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SS. 22, 23.
Capacity of parties.
amount due for such work, Haigh v. The Guardians of North Bierley Union, E. B. & E. 873. It would seem to follow as the result of the authorities that where a corporation is established for trading purposes, the very object of which requires that it should have the power of issuing bills of exchange and promissory notes, e.g. in banking and trading corporations, or where expressly authorized by its charter, such a corporation has that power; per Lord Denman, C. J., in Church v. Imperial Gas Light Company, 6 A. & E. at p. 861 ; see also Broughton v. Manchester Water Works Company, 3 B. & Ald. 1; Wells v. Kingston-upon-Hull, L. B. 10 C. P. 402; 44 L. J. C. P. 257. Therefore a corporation cannot draw, accept or indorse a bill of exchange or be a party to a promissory note unless expressly or impliedly authorised to do so. But it is not competent to a company incorporated in the usual way for the formation and working of a railway to draw, accept, or indorse bills of exchange, Bateman v. Mid-Wales Railway Company, L. R. 1 C. P. 499. In another case a company was formed under the Companies Act, 1862, for the purpose of purchasing a concession from a foreign Government for the construction of a railway, and forming a société anonyme to make the railway. The memorandum stated that in order to attain their main object the Company might do in England or Peru, or elsewhere, whatever they thought incidental or conducive thereto. The articles' gave the directors power to do all things and make all contracts which, in their judgment, were necessary and proper for the purpose of carrying into effect the object mentioned in the memorandum. It was held (by the Court of Appeal) that although the Companies Act, 1862, does not confer on all companies registered under it a power of issuing negotiable instruments, such a power exists only where, upon a fair construction of the memorandum and articles of association, it appears that it was intended to be conferred; and that such a power existed in that case, for that although it could not be inferred from the nature of the business of the company, it was conferred by the above general words in the memorandum and articles. The Peruvian Railways Company v. Thames & Mersey Marine Insurance Company, L. R. 2 Ch. Ap. 618.
(d) So held in Smith v. Johnson, 3 H. & N. 222; 27 L. J. Ex, 363.
Signature essential to liability.
Ind. Act, s. 28.
23.—No person is liable as drawer (a), indorser (6), or acceptor (e) of a bill who has not signed (d) it as such: Provided that, (1.) Where a person signs a bill in a trade or assumed
name, he is liable thereon as if he had signed it
in his own name (e); (2.) The signature of the name of a firm is equiva
lent to the signature by the person so signing of the names of all persons liable as partners in that
Sigoature essential to liability
(a) See note (v) to sect. 3 of this Act.
(6) See sect. 31, sub-sect. 3, and sect. 32, sub-sects. 1 and 2, of this Act, and the notes thereto,
(c) See sect. 17, sub-sect. 2 (a) of this Act, and the notes thereto.
(d) It has been long established that no one is liable on a bill unless he is a party to it, Vincent v. Horlock, 1 Camp, 442. Is it not an universal rule that a man who puts his name to a bill of exchange thereby makes himself personally liable ? per Lord Ellenborough, in Leadbitter v. Farrow, 5 M. & S. 349; see also Bult v. Morrell, 12 A. & E. 745. Where two persons accepted a bill of exchange as managers of an association, it was held that they were personally liable, Jones V. Jackson, 22 L. T. N. S. 828, following Allen v, Miller, 22 L. T. N. S. 825; and in which Jenkins v. Morris, 16 M. & W.877; Nicholls v. Diamond, 9 Ex. 154; 23 L. J. Ex. 1, were referred to and approved of; see also Price v. Taylor, 2 L. T. N. S. 221; 5 H. & N. 540; 29 L. J. Ex. 331 ; so where the defendants as “ Directors ” jointly and severally promised to pay, it was held that the words jointly and severally were equivalent to jointly and personally, Healey v. Story, 3 Ex. 3; 18 L. J. Ex. 8; see also Dutton v. Marsh, L. R. 6 Q. B. 361; 40 L. J. Q. B. 175; 24 L. T. N. S. 470; 19 W. R. 754. But under the Companies Act 1862 a bill of exchange shall be deemed to be accepted on behalf of any company under the Act if it is accepted by or on behalf or on account of the company by any person acting under its authority; see also Okell v. Charles, 34 L. T. N. S. 822; Herald v. Connah, 34 L. T. N. S. 885; Forbes v. Marshall, 11 Ex. 166. But a bill, headed “office of B.Co.” and concluding, charge same to account of B. Co.; W. B., president, J, W., Secretary,” is the bill of the Company, and not of the individuals signing, Hitchcock v. Buchanan, 15 Otto, Sup. Ct. U. S. 416.
(e) See South Carolina Bank v. Case, 8 B. & C. 427; 2 Man. & Ry. 459; Wilde v. Keep, 6 C. & P. 235; Kirk v. Blurton, 9 M. & W. 284; Stephens v. Reynolds, 5 H. & N. 513; Edmunds v, Bushell, L. R. 1 Q. B. 97.
(f) Thus in Wells v. Masterman, 2 Esp. 731, it was held that a bill drawn on a partnership and accepted by one of the partners, shall, even if for a separate debt of one of them, bind the partnership, if in the hands of a bonâ fide indorsee, without notice ; see also Stephens v. Reynolds, 5 H. & N. 513. In a recent case it was held that where a signature to a bill is common to an individual and a firm of which the individual is a member, and when the individual carries on no business separate from the firm, there is a presumption that the bill is given for and is binding on the firm, The Yorkshire Banking Company v. Beatson and another, 5 C. P. D. 109; 49 L. J. Q. B. D. 380,
24.-Subject to the provisions of this Act, where a Forged or
signature on a bill is forged (a) or placed thereon without unauthorised the authority (6) of the person whose signature it pursignature,
ports to be, the forged or unauthorised signature is wholly inoperative, and no right to retain (c) the bill or to give a discharge therefor, or to enforce payment (d) thereof against any party thereto, can be acquired through or under that signature, unless the party against whom it
is sought to retain or enforce payment of the bill is Ind. Act, s. 41. precluded from setting up the forgery or want of authority.
Provided that nothing in this section shall affect the ratification of an unauthorised (e) signature not amounting to a forgery (f).
(a) Forgery has been defined to be the fraudulent making or alteration of a writing to the prejudice of another man's right, 4 Bl. Com. 247; it is forgery to make a deed fraudulently with a false date, when the date is a material part of the deed, Reg. v. Ritson, L. R. 1 C. C. R. 200. The general rule is that no title can be obtained through a forgery, per Tindal, C.J., in Johnson v. Windle, 3 Bing. N.C. 229; 3 Scott, 608. There may, however, be negligence in the party whose signature on the bill is forged, which may make the case different; see note to sect. 74, title Forged and altered Cheques. In a recent case, where the defendant accepted a bill of exchange in blank, and the drawing and drawer's indorsements were afterwards forged by the person to whom the defendant gave the bill, and the plaintiffs took the bill without notice, it was held that the forgery of the drawing and indorsement did not prevent the defendant from being liable to the plaintiffs, The London and South Western Bank v. Wentworth, 5 Ex. D. 96; 49 L. J. Q. B. D. 657; 42 L. T. N. S. 188; 28 W. R. 516. A forgery is incapable of ratification ; see the proviso at the end of this section. A person who knows that a bank is relying upon his forged signature to a bill cannot lie by and not divulge the fact until he sees that the position of the bank is altered for the worse, McKenzie v. British Linen Company, 6 Ap. Cas. 82; 44 L. T. N. S. 431; 29 W. R. 477.
(6) Where a bill was presented for acceptance at the office of the drawee when he was absent, and A., who lived in the same house with the drawee, being assured by one of the payees that the bill was perfectly regular, and was induced to write on the bill an acceptance as by the procuration of the drawee, believing that the acceptance would be sanctioned and the bill paid by the latter, but the bill was dishonoured when due, the indorsee brought an action against the drawee, but was non-suited, Polhill v. Walter, 3 B. & Ad. 114.
agent “per procuration” is a specially appointed agent, but his S. 24. authority is limited; as to such an agency see sect. 25, and the notes thereto. A power to receive all salary, and to recover, compound, unauthorised
Forged or and give discharges for the same; or a power to transact all business signature, does not authorise the agent to negotiate bills, Hogg v. Snaith, 1 Taunt. 347; nor a power to demand or sue, Murray v. East India Company, 5 B. & Ald. 204; nor a power given by an executrix to act for her as such, Gardner v. Baillie, 6 T. R. 591; see also Esdaile v. Lanauze, 1 Y. & C. 394 ; and so it is provided by the Indian Act, Ind. Act, s. 27. s. 27. The manager of a farm who conducts all its business has no implied authority to issue bills in the name of his principal, Davidson v. Stanley, 2 M. & G. 721; see also Hogarth v. Wherley, L. R. 10 C. P. 630; 14 L. J. C. P. 330; 32 L. T. N. S. 800. Where a principal is sued on the agent's bills, the agent having previously issued bills, it must be proved that the principal knew or might have known of it, Davidson v. Stanley, 2 M. & G. 721 ; see also Llewelyn v. Winckworth, 13 M. & W. 598; but an authority to draw does not give an authority to indorse, per Tindal, C. J., in Prescott v. Flinn, 9 Bing. 19. And so it is provided by the Indian Act, s. 27. An authority given to A. to draw bills in the name of B. may be exercised by the clerks of A., as it is given to be made use of in the common course of business ; Ex parte Sutton, 2 Cox, Eq. Cas. 84. So where payment was made to an agent by cheque, the authority to receive payment is not of itself sufficient to authorise the agent to indorse his principal's name on the cheque, Brush v. Barrett, 82 N. Y. Rep. 400. One partner is generally the agent of his partner or partners in all partnership matters. If, therefore, a partnership be in trade, one partner can bind the firm by drawing, accepting or indorsing a bill or note, provided he does so in the name of the firm, Norton v. Seymour, 3 C. B. 792 ; Stephens v. Reynolds, 5 H. & N. 513, and for partnership purposes, Browne v. Kidger, 3 H. & N. at pp. 858, 859; Dickenson v. Valpy, 10 B. & C. at p. 140. In a recent case it has been held that a partner has no implied authority to bind his firm by issuing acceptances in blank, Hogarth v. Latham, 3 Q. B. D. 643 ; 47 L. J. Q. B. D. 339. An association, consisting of several firms, but that has no name, is not liable on bills drawn and accepted by the different firms, though for the purposes of this association, In re Adansonia Fibre Company, L. R. 9 Ch. 635; 43 L. J. Ch. 732; 31 L. T. N. S. 9; 22 W. R. 889; under an authority to indorse, a partner cannot indorse for his private purposes ; Garland v. Jacomb, L. R. 8 Ex. 216; 28 L. T. N. S. 877; 21 W. R. 868. Attorneys cannot bind their firms by bills, Hedley v. Bainbridge, 3 Q. B. 316. See also sect. 91.
(c) Thus where a bill is negotiated by means of a forgery of the name of the payee as indorser, it was held that a Court of Equity will restrain even a bonâ fide holder of the bill from suing the acceptor, and will direct the forged instrument to be delivered up to be cancelled.
SS. 24, 25,
Forged or unauthorised signature.
Esdaile v. Lanauze, 1 Y. & C. 394; in this case it was also held that when the original indorsement of the payee's name on a bill is a forgery, a real indorsement by the payee, after the bill has arrived at maturity, will not give the holder any title. See also note (a) to this section.
(d) So beld in Johnson v. Windle, 3 Bing. N. C. at p. 229 ; see also the cases cited in note (a) to this section.
(e) An agent's acts where he has acted without or has exceeded his authority, are capable of ratification. Thus in Ancona v. Marks, 7 H. & N. 686, 31 L. J. Ex. 163; it was held that an action may be maintained by a person as the holder of a negotiable instrument, notwithstanding he has no real interest in it, and never was the actual holder. If it has been indorsed and delivered to some person professing to act as his agent, although without his knowledge, and he subsequently adopts the acts of the assumed agent, that is sufficient title, although such adoption is after action brought in his name without his knowledge. So the acts of one partner can be afterwards recognised or adopted by his co-partners, Duncan v. Lowndes, 3 Camp. 478.
(f) A forgery cannot be ratified, Brook v. Hook, L. R. 6 Ex. 89; 40 L. J. Ex. 50, inasmuch as the act done is illegal and void; but if the act had been only voidable, it might have been ratified.
25. A signature by procuration operates as notice that the agent has but a limited authority to sign (a), and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority (b).
(a) Before this Act, it was held that where a bill upon the face of it purports to be accepted “per procuration,” that circumstance is a notice to whoever takes the bill that the acceptor has but a limited authority; and the holder cannot maintain an action against the principal if the authority has been exceeded, Stagg v. Elliott, 12 C. B. N. S. 373; see also the remarks in it of Willes, J., about Smith v. McGuire, 3 H. & N. 554, where it was held that if a person permits another to act as his general agent, he is bound by a contract made by the agent, although the latter declares himself as acting “ by procuration” and has received special instructions which he exceeds. The decision in Stagg v. Elliott followed that in Alexander v. McKenzie, 6 C. B. 766; 18 L. J. C. P. 94; see also Attwood v. Munnings, 7 B. & C. 278; Smith v. Johnson, 3 H. & N. 223, in the course of the arguments in which Mr. Baron Bramwell put the following question : If a partner signs the name of the firm the partnership is bound, but if he signs “per proc.,” does he not give notice that he is acting, not