or by a procuration signature, is (probably) not Signature liable on the instrument.1 Exception. If the alleged principal be a fictitious or non-existing person, the signer is liable.2 ILLUSTRATION. A bill drawn on B. is held by C. X., without authority, accepts it for B., signing " B. per proc. X." X. is not liable as acceptor, though he may be liable to C. or a subsequent holder in an action for a false representation." 4 NOTE. In an action for false representation, under such circumstances, it lies on the holder to prove damage. The modern tendency is to restrict liability ex delicto to cases of intentional fraud. By German Exchange Law, Art. 95, a person who, without authority, signs a bill as agent for another is personally liable thereon. The Indian Draft Code adopts this rule. To sign the name of another person to a bill " per proc." without authority and with intent to defraud was not a forgery at common law, but it is now made so by statute." per proc. agent. as agent or representative. Art. 76. A person who signs a bill in a represen- Signature tative or official character, or who, in signing, describes himself as agent for a principal, whether named or not, is personally liable thereon, unless in express terms he repudiate such liability." ILLUSTRATIONS. 1. Money is lent to a parish. The churchwardens give a note 2. B. by will directs his executor to carry on his business. He does so, and in the course of the business accepts bills, signing 1 Polhill v. Walter (1832), 3 B. & Ad. 114. 2 Cf. Kelner v. Baxter (1866), 2 L. R. C. P. 174; and Art. 72, Expl. 2. 3 Polhill v. Walter (1832), 3 B. & Ad. 114. 4 Eastwood v. Bain (1858), 3 H. & N. 738. 24 & 25 Vict. c. 98, § 24. 6 Leadbitter v. Farrow (1816), 5 M. & S. 348. 7 Rew v. Pettet (1834), 1 A. & E. 196. Signature as agent or representative. Trading firm. J. S. executor of B." He is personally liable on these acceptances.1 3. D., the holder of a bill payable to his order, dies. X., his executor, indorses the bill away, signing the indorsement, “J. X., executor of D." X. is personally liable on this indorsement, unless he add some such words as "without recourse against me personally." 2 4. Money is lent to the X. Company. A note for the amount is given in the form, "We promise to pay, et cet." signed, Directors of the X. Company, Limited. "J. B., The persons who sign are personally liable as makers.3 5. Money is lent to the X. Railway Co. A note for the amount. is given in the form, "I promise to pay, et cet." (signed), “For the X. Railway Co. J. B., Secretary." J. B. is not personally liable.1 6. Note in the form, "We, the directors of the X. Company, Limited, et cet." (signed by the directors), "J. B. J. S." In the corner of the note is the seal of the company, and the signature of an attesting witness. J. B. and J. S. are personally liable." 7. Bill specially indorsed to "C., agent." He indorses it away, signing "C., agent." C. is personally liable as indorser." NOTE.-for further illustrations, Cf. Art. 50 and Art. 37, Ex. 3. The terms agent, manager, &c., attached to a signature are regarded as mere designatio personæ. The rule is applied with peculiar strictness to bills, because of the non-liability of the principal: Cf. Art. 71. It is often difficult to determine whether a given signature is the signature of the principal by the hand of an agent, or the signature of the agent naming a principal. maxim ut res magis valeat governs the construction. The Art. 77. A partner in a trading firm has primâ fucie authority to bind the firm by drawing, indors 1 Liverpool Bank v. Walker (1859), 4 De G. & J. 24. 2 Cf. Childs v. Monins (1821), 2 Brod. & B. 460. 3 Courtauld v. Saunders (1867), 16 L. T. N. S. 562. 4 Alexander v. Sizer (1869), L. R. Ex. 102; but see Gray v. Raper (1866), 1 L. R. C. P. 694. 5 Dutton v. Marsh (1871), 6 L. R. Q. B. 361. Bartlett v. Hawley (1876), 120 Mass. 92. firm. ing, or accepting bills in the firm name for partner- Trading ship purposes; and if the bill get into the hands of a holder for value without notice, the presumption of authority becomes absolute, and it is immaterial whether it were given for partnership purposes or not.1 ILLUSTRATIONS. 1. X., a partner in a trading firm, makes a note in the firm's name, payable to C., and gives it to him in payment of a private debt. It lies on C. to show that X. had authority from his copartners so to do.2 2. A. draws two bills on a firm in respect of one and the same debt. By mistake both bills are accepted. The bills are negotiated to bona fide holders. The firm is liable on both.3 3. A partner accepts in the firm name a bill drawn on the firm in respect of a debt partly due from the firm and partly due from himself alone. Fraud is negatived, but the holder knows the facts. The pro tanto liability of the firm on the instrument is doubtful.* NOTE.-In Illust. 3, the safe plan is to sue on the consideration. This Art. and the next are merely deductions from the general rule that a partner has implied authority to do any act necessarily incidental to the proper conduct of the partnership business, and that there the presumption of authority ends. There is a quasi exception to the general rule where the name of the firm is the same as the name of one of the partners in it. In that case an acceptance in the common name, written by the partner whose name it is, may be shown to be his individual acceptance and not binding on the firm." trading Art. 78. A partner in a non-trading partnership Nonhas prima facie no authority to render his copartners firm. liable by signing bills in the partnership name. The holder must show authority, actual or ostensible." 1 Wiseman v. Easton (1863), 8 L. T. N. S. 637; Lindley, 3rd ed., p. 280. 2 Cf. Levieson v. Lane (1862), 32 L. J. C. P. 10. 3 Davison v. Roberts (1815), 3 Dow. 218; H. L. 4 Ellston v. Deacon (1866), 2 L. R. C. P. at 21. 5 Yorkshire Banking Co. v. Beatson (1880), 5 C. P. D. 109, C. A. Lindley, 3rd ed., p. 280; Dickinson v. Vulpy (1829), 10 B. & C. at 137; Thicknesse v. Bromilow (1832), 2 Cr. & J. 425. Nontrading firm. Power to transfer. Explanation.-Partnerships, such as professional partnerships (e.g., solicitors),' mining partnerships,2 agricultural partnerships,3 and commission agencies* have been held non-trading, NOTE.-In America, physicians, tavern-keepers, tunnel-workers, and farmers, have been held non-traders." In Harris v. Amery (1865), 1 L. R. C. P. at 154, Willes, J., points out that the term "trade" is not coextensive with the term "business." It does not seem to be decided how far the rule applies to cheques, as well as to bills and notes. The question cannot often arise, because opening an account in the firm name is evidence of actual authority. Note, that authority to draw cheques is not evidence of authority to draw bills, and a post-dated cheque is a bill." Art. 79. Where a bill is payable to the order of a firm, a partner who cannot by his indorsement render his copartners liable, may transfer the property therein by negotiating it in the firm name.7 ILLUSTRATIONS. 1. Bill specially indorsed to a non-trading partnership. One of the partners without communicating with his co-partners, indorses away for a firm debt. The property in the bill passes to the indorsee. it 2. Bill specially indorsed to a firm under a wrong style (e. g., to "Smith, Brown, & Co.," whereas the proper style is "Brown & Co."). One of the partners indorses it away, using, without the assent of the rest, the wrong style. The firm is not liable on the indorsement, but the property in the bill passes to the indorsee.' NOTE. Cf. Art. 71 as to the principle. When a bill payable to the order of a firm is indorsed by a partner in the firm name, in fraud of his copartners, the property therein does not pass to an 1 Garland v. Jacomb (1873), 8 L. R. Ex. at 219. 2 Ricketts v. Bennett (1847), 4 C. B. at 699. 3 Kimbro v. Bullit (1859), 20 Howard, 256. 4 Yates v. Dalton (1859), 28 L. J. Ex. 69. 5 Parsons on Partnership, 2nd ed., p. 99 n. ; Cf. Art. 67, as to Companies. 6 Forster v. Mackreth (1867), 2 L. R. Ex. 163. 7 Lindley, 3rd ed., p. 282; and Cf. Arts. 61, 64, 68. 8 Cf. Smith v. Johnson (1858), 3 H. & N. 222. 9 Williamson v. Johnson (1823), 1 B. & C. 146 ; Kirk v. Blurion (1841), 9 M. & W. at 287. indorsee with notice, but there seem to be technical difficulties in Power to the way of an action brought by the firm. In such case the transfer. proper course, perhaps, is to give notice to the acceptor not to pay. He could defend an action against a holder with notice. ners. Art. 80. When a bill is payable to the order of a Ex-partfirm, and the partnership is subsequently dissolved, the indorsement of an ex-partner in the late firm name transfers the property therein and authorizes the payment thereof.2 NOTE.-Lewis v. Reilly may be open to question in so far as it lays down that an ex-partner, by indorsing a bill in the late firm name, renders his former partners liable as indorsers to a holder with notice of the dissolution." Forgery, Etc. unautho Art. 81. Except as hereinafter mentioned, no Forged or person is liable as a party to a bill whose signature rized sighas been placed thereon without his authority, and matures. no right or title can be derived through a forged or unauthorized signature. (Cf. Art. 139). ILLUSTRATIONS. 1. A bill is payable to the order of John Smith. Another person of the name of John Smith gets hold of it and indorses it to D., who takes it in good faith and for value. D. acquires no title to the bill, he cannot enforce payment against any of the parties thereto, and should any party pay him, the payment is invalid." 2. A note payable to order is stolen from the payee. The thief forges the payee's indorsement, and collects the note from the 1 Heilbutt v. Nevill (1870), 5 L. R. C. P. 478, Ex. Ch. 2 King v. Smith (1829), 4 C. & P. 188; Lewis v. Reilly (1841), 1 Q. B. 349. 3 Cf. Lindley, 3rd ed., p. 423; Kilgour v. Finlayson (1789), 1 H. Bl. 155; Abel v. Sutton (1800), 3 Esp. 108; Anderson v. Weston (1840), 6 Bing. N. C. 296. 4 Bank of Bengal v. Fagan (1849), 7 Moore, P. C. at 72; Harrop v. Fisher (1861), 30 L. J. C. P. 283; British Linen Co. v. Caledonian Ins. Co. (1861), 4 Macq. H. L. 107; Massé, § 1529. Mead v. Young (1790), 4 T. R. 28; Graves v. American Bank (1858), 17 New York R. 205 (payment). |