condition attached to it, which affects the original contract, it is void.24 In this respect a conditional indorsement is essentially different. The conditional indorsement does not alter the character of the instrument, or affect in any way its negotiability. The liability of the maker or drawer, as expressed in the original contract, is not affected by such indorsement; the condition only relates to the manner in which the transfer by the indorsement shall be made effectual or shall be rendered void. An instrument indorsed "Pay the within sum to C. & R., or order, upon my name appearing in the Gazette as ensign," etc., is a conditional indorsement, and if the condition is not fulfilled, the title of the indorsee and every subsequent holder becomes void, and the right to the note reverts to the original indorser.26 The effect of the decision in this case was that the conditional indorsement did not transfer the title absolutely. This doctrine has been altered by the English Bills of Exchange Act, and by a similar provision contained in Negotiable Instruments Law.

66

66

b. Statutory provision.— The Negotiable Instruments Law provides that: Where an indorsement is conditional, a party re"quired to pay the instrument may disregard the condition and "make payment to his indorsee or his transferee, whether the con"dition has been fulfilled or not. But any person to whom an "instrument so indorsed is negotiated will hold the same, or the proceeds thereof, subject to the rights of the person indorsing "conditionally." 27 The English Bills of Exchange Act contains a similar provision.28 Judge Chalmers says: "This section alters the law. It was formerly held that if a bill was indorsed conditionally, the acceptor paid it at his peril if the condition was not fulfilled. This was hard on him. If he dishonored the bill, he might be liable in damages, and yet it might be impossible for him to find out if the condition had been fulfilled." 29

contemporaneously and delivered with
it, and intended as a part of the
contract, is a substantive part of the
note and qualifies it the same as if
inserted in the body of the instrument,
and that it constitutes a single con-
tract. Benedict v. Cowden, 49 N. Y. 396.
24. See ante, chap. III, § 36.
25. Story on Promissory Notes,

$ 149.

26. Robertson V. Kensington, 4 Taunt. (Eng.) 30.

27. Neg. Inst. L. (N. Y.), § 69. For the same section in the statutes of other States see Appendix.

28. English Bills of Exchange Act, 1882, § 33.

The last sentence of the above-quoted section of the Negotiable Instruments Law was not contained in the English Bills of Exchange Act.

29. Chalmers on Bills of Exchange (5th ed.), p. 110, citing Robertson v. Kensington, 4 Taunt. (Eng.) 30.

63. Indorsement of instrument payable to bearer.

66

a. Statutory provision.- The Negotiable Instruments Law provides that: Where an instrument payable to bearer is indorsed specially, it may, nevertheless, be further negotiated by delivery; "but the person indorsing specially is liable as indorser to only "such holders as make title through his indorsement." 30 The negotiability of a note payable to bearer has always been regarded as being no further restrained by an indorsement in full than would the negotiability of a note payable to order be, by the same indorsement. The rule is well settled that "if a bill be once indorsed in blank, though afterward indorsed in full, it will still, as against the drawer, the payee, the acceptor, the blank indorser, and all indorsers before him, be payable to the bearer, though as against the special indorser himself, title must be made through the indorsee." 32

31

8 64. Indorsement of instrument payable to two or more persons. a. Statutory provision.— The Negotiable Instruments Law provides that: "Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the "others." 33 This section is declaratory of the common-law rule. It is not questioned that a partner, in general, may indorse and transfer a promissory note made payable to his firm. It is also unquestioned that if a note is payable or indorsed to several persons who are not partners, the transfer can only be made by a joint indorsement of all of them.34

For the same section in the statuies of other States see Appendix.

34. Ryhiner v. Feickert, 92 Ill. 305, 34 Am. Rep. 130. In this case a note was executed and delivered payable to the order of " 'Charles and William Feickert;" these persons were not partners, but Charles Feickert, having possession of the note and representing that the defendants were partners, sold and assigned it to the plaintiff by a writing signed in the style of "Charles and William Feickert." was held that possession of the note by Charles was not evidence of a partnership, and that title as against both of them could only pass by a joint indorsement. See also Wood v. Wood, 16 N. J. L. 428.

It

b. Authority to indorse. As a general rule, the lawful possession of a negotiable instrument confers on the holder authority to transfer all right and title thereto.35 It is not necessary that the authority of one of two or more payees to indorse should appear upon the note.36 But where notes are payable to joint payees the actual manual possession of the notes must be in some one of the payees. It is impossible that it can be in all at the same time; therefore the possession of the notes by one of such payees is of no particular significance. The face of a note payable to two or more payees discloses the interest of the payee in possession, and rebuts any ordinary presumption that might arise therefrom.37 It would seem, therefore, that the authority of one of two or more joint payees to indorse must appear from the express terms of a contract, or from circumstances implying such an authority. It is probable that such authority may be given by parol, as in the case of other instruments payable to a single payee.38

65. Indorsements by or to cashiers, corporate officers, and other persons acting in a representative capacity.

a. Indorsement to a cashier or officer of corporation; statutory provision.— The Negotiable Instruments Law provides that: "Where an instrument is drawn or indorsed to a person as "cashier' or other fiscal officer of a bank or corporation, it is "deemed prima facie to be payable to the bank or corporation of "which he is such officer; and may be negotiated by either the "indorsement of the bank or corporation, or the indorsement of "the officer." 39 This section of the statute seems to be declaratory of the common law.

b. Indorsement to bank or corporation. An indorsement of a note by the holder in these words, "Pay to E. O., cashier, or order," made upon the purchase of it by the bank of which E. O. was cashier, is a legal transfer of the note to the bank.40 The general rule relating to notes payable or indorsed to a person as agent does not apply in the case of bank cashiers.11 A negotiable instru

35. Andrews v. Bond, 16 Barb. (N. Y.) 633.

39. Neg. Inst. L. (N. Y.), § 72. For the same section in the 36. Bettis v. Bristol, 56 Iowa, 41, 8 statutes of other States see ApN. W. 808.

37. Rvhiner v. Feickert, 92 Ill. 305, 34 Am. Rep. 130.

38. Brown v. Bookstaver, 141 Ill. 461, 31 N. E. 17; Cooper v. Bailey, 52 Me. 230; Turnbull v. Trout, 1 Hall (N. Y.), 336.

pendix.

1

&

40. Watervliet Bank V. Hoyt, Den. (N. Y.) 608; Farmers Mechanics' Bank V. Day, 13

ment payable, or an indorsement of such an instrument to, a cashier of a bank is payable to him, not as an individual, but as a bank officer, and the contract is with the bank; and it is unnecessary in a suit upon such an instrument by the bank to show an indorsement by the cashier to the bank.42 The rule as to negotiable instruments payable to the treasurer or other fiscal officer of a corporation is not uniform in all the States. In Massachusetts, for instance, it has been held that an instrument payable to "G. S., treasurer," is payable to him personally, though described as treasurer and not merely treasurer for the time being, and may be indorsed by him as treasurer either in person or by attorney. But in some States it has been held that if the interest of the corporation can be shown, the fact that the instrument is payable to its treasurer will not affect the title of the corporation. The rule seems to be now established by the above section of the Negotiable Instruments Law, and in all the States having adopted this act, an instrument payable or indorsed to the treasurer of a corporation is prima facie payable to the corporation.

44

43

c. Indorsement by cashier or treasurer of corporation.- Independent of the statute above referred to an indorsement of a negotiable instrument by the cashier on behalf of the bank is sufficient to pass title to the instrument. An indorsement of a negotiable instrument, payable to a corporation, by its treasurer in his official capacity prima facie passes title to the instrument.45 The general

42. New York Bank v. Ohio Bank, 29 N. Y. 619; Bank of Genesee v. Patchen Bank, 19 N. Y. 312; First Nat. Bank v. Hall, 44 N. Y. 395, 4 Am. Rep. 698; Blair v. First Nat. Bank, Fed. Cas. No. 1,485; Nave v. First Nat. Bank, 87 Ind. 204; Garton v. Union City Nat. Bank, 34 Mich. 279; Lookout Bank v. Aull, 93 Tenn. 645, 27 S. W. 1014, 42 Am. St. Rep. 934.

43. Shaw v. Stone, 1 Cush. (Mass.) 288. See also Horan v. Long, 4 Dev. & B. (N. C.) 274, 34 Am. Dec. 378; Johnson v. Catlin, 62 Am. Dec. 622; Chadsey v. McCreery, 27 Ill. 252; Rutland & B. R. Co. v. Cole, 24 Vt. 33; Société des Mines, etc. v. Mackintosh, 5 Utah, 568, 18 Pac. 363; Alston v. Steartman, 2 Ala. 699; McDonald v. Laughlin, 74 Me. 480.

44. Genesee Bank v. Patchen Bank, 13 N. Y. 309; Houghton v. First Nat. Bank, 26 Wis. 663, 7 Am. Rep. 107.

Bank, 41 Barb. (N. Y.) 586, it was
held that the omission to write either
before or after the name of the cashier
of the bank on the back of the draft
"for the
bank" will not pre-

clude the holder from recovering
against the bank as indorser. An in-
dorsement of his name by the cashier
followed by "cash'r is sufficient.
And in the case of Folger v. Chase, 18
Pick. (Mass.) 63, the note of the bank
was indorsed "P. H. Folger, cashier,"
and it was held to pass the title to the
note, Wilds, J., remarking that "the
indorsement by the cashier in his of-
ficial capacity sufficiently shows that
the indorsement was made in behalf
of the bank, and if that is not suffi-
ciently certain, the plaintiffs have the
right now to affix the name of the cor-
poration." See also Spear v. Ladd, 11
Mass. 94.

45. Cole V. Merchants' Bank of In the case of Robb v. Ross County Watertown, 60 Ind. 350.

authority conferred upon an officer of a corporation to transact its financial affairs carries with it the power to transfer negotiable paper by his indorsement in his official capacity."

66

46

d. Indorsement in representative capacity.- The Negotiable Instruments Law provides that: "Where any person is under obligation to indorse in a representative capacity, he may indorse "in such terms as to negative personal liability.' 99 47 An indorsement to negative personal liability should be made in the same manner as the signature to a bill or note by the agent for his principal.48 Such an indorsement is usually "A. B., as agent for C. D.," or "C. D. by A. B., agent," or " Per procuration, C. D., principal, A. B., agent.'

" 49

§ 66. Misspelled name of payee or indorsee; presumption as to time and place of indorsement.

a. Indorsement where name is misspelled; statutory provision. -The Negotiable Instruments Law provides: "Where the name "of a payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described, adding, if he "think fit, his proper signature." 50 This is a similar provision

66

46. Russell v. Folsom, 72 Me. 436; Ogdon v. Andre, 4 Bosw. (N. Y.) 583; Scott v. Johnson, 5 Bosw. (N. Y.) 213; Merchants' Bank v. McCall, 6 Bosw. (N. Y.) 473; Elwell v. Dodge, 33 Barb. (N. Y.) 336; Clark v. Titcomb, 42 Barb. (N. Y.) 122.

agent." It was held that the indorsement was that of B., agent, and that it was not affected by the needless reference to the company for which he was agent. See also Paterson V. Henry, 4 J. J. Marsh. (Ky.) 126; Case v. Mechanics' Banking Assn., 4 N. Y. 166.

47. Neg. Inst. L. (N. Y.), § 74. It is provided in section 39 of the In the case of Durnall v. McElroy, Negotiable Instruments Law, ante, § 29, 3 Dana (Ky.), 407, a note payable to c (1), p. 72, that where the instrument C. was indorsed by L., his authorized contains or a person adds to his signa- agent, as follows: "L. per C." It ture words indicating that he signs was held that the presumption is that for or on behalf of a principal, or in the word "per" meant "for," and a representative capacity, he is not that the indorsement was effectual. liable on the instrument if he was In the case of Hunt v. Listenberger, duly authorized; but the mere addi- 14 Ind. App. 320, 42 N. E. 240, two tion of words describing him as agent, indorsements, as follows: "H. and or as filling a representative charac- A., by H. J. H., agent," and "H. J. ter, without disclosing his principal, H., agent, H. and A.," were held to does not exempt him from personal liability.

48. See ante, chap. II, § 29, c (3),

p. 86.

be the indorsements of H. and A., in the absence of proof as to the latter indorsement that it was not made by H. and A., respectively. The indorse49. Indorsement by agent. In the ment first mentioned was held to be case of Farmington Sav. Bank V. a sufficient indorsement by the payee. Fall, 71 Me. 49, a note payable 50. Neg. Inst. L. (N. Y.), § 73. to "B., agent," was indorsed For same section of statutes of other "Granite and Agricultural Works, B., States see Appendix.