other than such signers.38 Nor will such evidence be admissible to discharge an agent who signs his own name merely to a negotiable instrument, though he describes himself in the body of the instrument as the agent of another.39 As between the original

parties and a bona fide holder of a negotiable instrument, no extrinsic evidence is admissible to show that some other person than the one named in the instrument is chargeable with the debt;40 except, perhaps, in those cases where the terms of the instrument are such as to suggest that it was the intention of the parties to bind some other person than the one named as maker or drawer.41 There are cases, also, where the principal has adopted the agent's name as his own, in which case extrinsic evidence may be admitted to show that such name had been so adopted.42

d. Signature by procuration; effect of. A signature by "procuration" operates as notice that the agent had but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority.43 A signature by procuration is a technical one seldom used in this country. The signature is ordinarily in the following form: "A. (agent) per proc. or p. p. B. (principal)." It is notice to all persons of the limits of the agent's authority and in that respect differs somewhat from the cases of ordinary agency, when an instrument is sought to be enforced by a bona fide holder for value and without notice."4

"c. That an instrument which is so ambiguous on its face as to render it uncertain who was intended to be bound, was known to be the obligation of the principal.

"2. Between one of the original parties and a third party, such evidence is admissible to make either of the lines of proof mentioned above:

"a. Where the third person is not a bona fide holder.

"I. Where the paper on its face is the undertaking of the agent only, no reference being made on its face to representative capacity, and where the paper on its face is unmistakably the principal's, parol evidence will not be received, in the one case to exonerate, and in the other to charge the agent. "II. But where the paper bears on its face some reference to a principal, or some appellation indicating representative character, while it is un- "b. Where the instrument bears doubtedly true that the mere addition sufficient evidence upon its face, or is of the words agent,' 'trustee,' 'treas- so ambiguous as to put a reasonably urer,' and the like, or the mere recital prudent man upon inquiry. As to this in the body of the instrument that last subdivision it may be said that the person signing is such agent, treas- the mere addition of the word agent,' urer or trustee of a principal named or trustee,' etc., without disclosing the unnamed, is, as has been said, prima principal, is not sufficient to make facie or descriptio persona merely, third persons chargeable with notice and not as characterizing the act as of any representative relation of the one done in a representative capacity; signer; but the form of executing may and while it is also true, as a general be such as to well awaken the susrule, that parol evidence is not ad- picion of third persons (citing Metmissible to exonerate an agent from calf v. Williams, 104 U. S. 93; Slawa contract into which he has person- son v. Loring, 5 Allen [Mass.], 340, ally entered, yet it is believed that 81 Am. Dec. 750; Davis v. Henderson, the preponderance of authority will 25 Miss. 549, 59 Am. Dec. 229; Mott warrant the statement of the rule v. Hicks, 1 Cow. [N. Y.] 513, 13 Am. that: Dec. 550).

"1. Between the immediate parties to a bill or note, parol evidence is admissible to show:

66 a. That, by a course of dealing between the parties, that form of execution has become to be the recognized and adopted form by which the obligation of the principal is entered into;

or

"b. That the instrument was, to the knowledge of the parties, intended to be the obligation of the principal and not of the agent, and that it was given and accepted as such;

"III. As between the principal and the agent, the more modern cases hold that it is competent for the agent to show that what appears to be the agent's obligation is in fact the principal's."

43. Neg. Inst. Law (N. Y.), § 40. See English Bills of Exchange Act, $ 25.

44. The rule as stated in the text is supported in the cases of Attwood v. Munnings, 7 B. & C. 278, 4 Eng. Rul. Cas. 364; Stagg v. Elliott, 12 C. B. (N. S.) [Eng.] 373.

e. Liability of agent indorsing negotiable paper, or drawing bill of exchange. There is a clear distinction between what has been said of the liability of an agent who makes or accepts negotiable paper in his own name, and simply affixes thereto a word showing his representative capacity, without disclosing his principal, and one who indorses a bill or note, or draws a bill in that form. The authorities generally hold that in the latter case the agent is not liable where the principal is disclosed in the body of the instrument and his indorsement passes the title.15 Perhaps the leading case on the effect of such an indorsement is that of Falk v. Moebs, decided in the United States Supreme Court, an extract from which is given in the note.46 Mr. Mechem, in his work on Agency

The question involved, as stated by the court, was: "Does the indorsement on the notes involved in this case, in terms, purport to be that of the Pennsylvania Cigar Co., or does it purport to be the personal indorsement of Moebs? In other words, can it be clearly ascertained from these instruments themselves who is, in law, the indorser of them? Is the indorsement plain and clear, or is it ambiguous?"

The court, after calling attention in specific detail to the many cases both for and against the admissibility of extrinsic evidence to determine the liability of parties who have made, drawn, or indorsed negotiable paper, said:

greatly protract this opinion, and would subserve no beneficial result. In all this vast conflict- we had almost said anarchy-of the authorities bearing on the question under consideration, it is not easy to lay down any general rule on the subject which would be in harmony with all of them. It seems to us, however, that the case of Hitchcock v. Buchanan, 105 U. s. 416, 26 L. Ed. 1078, controls the case at bar. Both the decision in this, to be consistent principles, and with that of the former, must sustain

involve

the

same

the contention of the defendant in error. Neither do we think that the case of Mechanics' Bank v. Bank of Columbia, 18 Wheat. (U. S.) 326, when considered in the light of the facts upon which it is based, in anywise conflicts with this conclusion.

We conclude, therefore, that the notes involved in this controversy, upon their face, are the notes of the corporation. In the language of the court below, they were "drawn by, payable to, and indorsed by, the corporation." There is no ambiguity in the indorsement, but on the contrary, such indorsement is, in terms, that of the Peninsular Cigar Company.

This being true, it follows that the court below was right in excluding from the jury the evidence offered to explain away and modify the terms of such indorsement. White v. Miners' Nat. Bank, 102 U. S. 658; Martin v. Cole, 104 U. S. 30; Metcalf v. Williams, Id. 93."

"Many more authorities are cited The case of Falk v. Moebs, supra, and might be dwelt upon ad infinitum. has not been uniformly approved by A discussion of all of them would the courts of all the States. The

(§ 439), draws a distinction between a note or bill drawn payable to an agent of a private individual and indorsed by such agent, and one drawn payable to an individual as an officer of a corporation; in the former case he asserts that the same general rules apply to his liability on the indorsement, as where he signs the bill or note in the same form as a maker; while in the latter case he considers the note or bill to be in reality payable to the corporation of which the individual payee is an officer and regards the indorsement of such officer in the same way as an indorsement of the corporation. There does not seem to be any valid reason for this distinction. The same reasoning which would make the indorsement of an officer of a corporation an obligation of the corporation rather than of the officer would also make the indorsement of an agent of a private individual, made in the same way, binding upon the private individual. But few cases can be cited affecting indorsements made by agents of private individuals; but many have been reported where indorsements have been made by agents and officers of corporations.48 The Court of Appeals of the State of New York in an often-cited case49 has said: "The indorsement of a

47

Chillicothe Branch of State

Supreme Court of Illinois, in the case enable the indorsee to maintain an of Hately v. Pike, 162 Ill. 241, 44 action against the maker in his own N. E. 441, expressly dissents from the name. authority of that case. In this case Bank V. Fox, Fed. Cas. 2,683, 3 a note made by a corporation, pay- Blatchf. 431. See also Bank of Uniable to "P., President (P. being versity v. Hamilton, 78 Ga. 312; Soupresident of the corporation) was held hegan Nat. Bank v. Boardman, 46 to be payable to P., the word Presi- Minn. 293, 48 N. W. 1116. dent" being merely descriptive; and an indorsement by "P., President was held to be an indorsement by P. individually. There are other Illi

nois cases to the same effect. See Johnson v. Glover, 121 Ill. 283, 12 N. E. 257; Courtney v. Hogan, 93 Ill.

101.

In the case of Terhune v. Parrott, 59 N. J. L. 16, 35 Atl. 4, it was held that an indorsement of a note in the following form: "J. W. Parrott, Prest. of Long Branch Hotel and Cottage Co.," imports prima facie the personal liability of J. W. Parrott.

Babcock v. Beman, 11 N. Y. 200; 47. In the case of Mott v. Hicks, Sieckman v. Allen, 3 E. D. Smith 1 Cow. (N. Y.) 513, a note was made (N. Y.), 561; Bank of New York v. payable to J. H. or order, and in- Bank of Ohio, 29 N. Y. 619, are also dorsed thus, "J. H., Agent." It was to the effect that an indorsement by

held that the indorser was not personally liable, such an indorsement being equivalent to a declaration that he will not be personally liable. See also Bowne v. Douglass, 38 Barb. (N. Y.) 312.

a person who signs as an agent or officer of a corporation with authority so to do will not personally bind such agent or officer.

"Four

49. Babcock v. Beman, 11 N. Y. 48. Indorsements by agents of corpo- 200. The note in question in this case ration. Where a note is indorsed by was drawn in these words: the president of a corporation by months after date we promise to pay signing his name with his title of to the order of R. Beman, treas., five office, such indorsement is sufficient hundred dollars, value received." to charge the corporation, and to Signed "Adam Smith & Co.," and in

promissory note or bill of exchange effects two different and distinct purposes. It is a present transfer and assignment of the paper to the indorsee, and an executory contract by which the indorser agrees, upon certain conditions, to pay the amount of the note or bill himself. There can be no regular indorsement which does not ipso facto transfer the paper; but it is not absolutely essential that it should also contain the collateral contract. The defendant in this case indorsed the note in question by writing his name upon it, and adding the word 'treasurer,' and the note itself was payable to him with the addition of the usual abbreviation of the same word. The answer shows that the defendant when he made the indorsement was the treasurer of a manufacturing corporation and that this was known to the plaintiffs, who received the note thus indorsed on account of a demand which they had against the corporation. The question is, whether this was a qualified indorsement, passing, as it clearly did, the interest in the note, but without any other contract on the part of the corporation. This question was decided against the plaintiff in the Supreme Court more than thirty years ago and has since been acquiesced in by the profession, and has been extensively acted on by business men." The reasoning of the court in this case assumes that in the hands of a bona fide holder who took the same without notice of the relation in which the indorser stood to the company for whom he acted as agent, the note would be valid as against the indorser; and this corresponds with other New York authorities that hold the question of agency, in such cases, material and issuable, and also the fact that the party taking the note received it with notice.50 This question has frequently arisen in connection with the indorsement of commercial paper by bank cashiers. It has been generally held that an indorsement by or to a cashier with the use of his name and by adding thereto the word "cashier" will bind the bank or transfer the instrument to the bank where it is shown by the pleadings and the proof that that was the design of the transaction and the intention of the parties."

51

dorsed "R. Beman, Treas.," he being known to the indorsee as the agent of a manufacturing company.

50. Brockway v. Alien, 17 Wend. (N. Y.) 40; Randall v. Van Vechten, 19 Johns. (N. Y.) 60; Tafft v. Brewster, 9 Johns. (N. Y.) 334; White v. Skinner, 13 Johns. (N. Y.), 307.

51. First Nat. Bank of Angelica v.

Hall, 44 N. Y. 395.
In this case a
draft in the following form: "Three
months after date, pay to the order
of J. E. Robinson, Cashier," etc., was
in question. It was held the addition
of the word "cashier" imported that
the bank of which the person named
was cashier, was intended as the
payee; and that an indorsement by