to enforce his rights on the instrument, although an innocent purchaser from him may do so (10).

§ 83. Form of indorsement. The mode of transfering a bill or note payable to order is by indorsement. The formal requirements with which an indorsement must comply to be effective are: (1) that it be in writing on the instrument; (2) that it be an order to pay the transferee; (3) that the order direct the payment to the transferee of the whole sum due on the instrument; and (4) that the instrument with the indorsement upon it be "delivered" to the transferee.

§ 84. Indorsement must be in writing on the instrument. A delivery of a note payable to order, coupled with an oral promise by the holder to be responsible as indorser, or to indorse in the future, does not transfer the note (11). Nor would a letter to the transferee, promising to be responsible as indorser and to indorse as soon as possible, be effective as an indorsement (12). But an indorsement written on an allonge, or piece of paper attached to the instrument for the purpose of bearing indorsements, is sufficient (13). If the indorsement is written on the instrument, it does not affect its validity that it is written on the face of the paper, notwithstanding the meaning of the word "indorse" and the almost universal usage of writing the order on the back (14). The N. I. L. provides in general terms that:

(10) Hays v. Hathorn, 74 N. Y. 486.

(11)

(12)

See Moxon v. Pulling, 4 Campbell, 50.

Wilmington Bank v. Houston, 1 Harrington, 225 (Del.).

(13) Folger v. Chase, 18 Pick, 63 (Mass.).

(14) Herring v. Woodhull, 29 Ill. 92.

"The indorsement must be written on the instrument or upon a paper attached thereto" (15); and "Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is deemed an indorser" (16).

§ 85. Indorsement must be an order to pay. The ordinary indorsement complies in terms with this requirement. For example, "Pay to X (Sgd.) B," indorsed on a note made payable to B by A, is an order upon the maker, A, to pay X the amount of the note at its maturity. Anything less than an order, i. e., an imperative direction, is not an indorsement. Thus, the delivery of a note payable to order, with the following guaranty of payment written thereon, was held not to transfer the note (17):

"For value received, we hereby guarantee the payment of the within note at maturity, or at any time thereafter, with interest at ten per cent. per annum until paid, and agree to pay all costs and expenses paid or incurred in collecting the same. B. F. Allen, Pres't."

"I assign the within note," or "I assign all my right, title and interest in and to the within note," is not an indorsement (18). An assignment is an authority to the assignor to collect; an order is a direction to the maker to pay. This distinction has been overlooked by many courts in recent decisions, and both guaranties and assign

(15) Neg. Inst. Law, sec. 31.

(16) Neg. Inst. Law, sec. 17 (6).

(17) Trust Co. v. Bank, 101 U. S. 68.

(18) Hatch v. Barrett, 34 Kan, 223.

ments written on negotiable instruments have been held to transfer them as indorsements (19).

§ 86. Indorsement must be an order to pay the whole sum due on instrument. If the holder attempt to split up the maker's or acceptor's obligation by directing payment of part of the sum due to one transferee, and the payment of another part to a second, the attempt is futile, is not an indorsement, and does not transfer the instrument to either (20). Even if partial "indorsements" which together cover the entire sum due, are made to the same person at different times, the instrument is not transferred (21). Of course there is no objection to indorsing a bill or note, after part of the sum due has been paid. Such an indorsement orders the payment of the whole sum due on the instrument at the time the indorsement is made. An indorsement ordering payment of a bill or note to A and B jointly is not a partial indorsement of one-half to each, for the two as a group are entitled under the order to the whole sum, but neither separately is entitled to anything. An indorsement ordering payment of the whole sum to A and also to B is manifestly contradictory in its terms, and is neither an order to pay the whole or any part of the sum due on the instrument to either A or B. However, an indorsement "Pay to A or B" seems to be good. under the section of the N. I. L. (22) authorizing an instru

(19) Thorp v. Windeman, 123 Wis. 149; Evans v. Freeman, 142 N. C. 61; Elgin Co. v. Zelch, 57 Minn, 487.

ment to be made payable to "one or more of several" persons. The N. I. L. provides:

Sec. 32. The indorsement must be an indorsement of the entire instrument. An indorsement, which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument. But where the instrument has been paid in part, it may be indorsed as to the residue.

§ 87. Indorsement is not binding unless instrument is delivered. "Indorsement" means an indorsement completed by "delivery" (23). "Delivery" means, as we have already seen (24), nothing more than a physical transfer of the instrument. Thus, if A, the payee of a note, write upon it, "Pay to X (Sgd.) A," and place the note in his safe, the indorsement is not complete. But, if in the night X breaks open the safe and steals the note, the indorsement is complete and effective to transfer the instrument and bind A as indorser. Although X is not allowed personally to take advantage of the legal rights he has acquired, because of the manner in which he has acquired them, an innocent purchaser of his rights may do so (25).

§ 88. Kinds of indorsement. The formal requirements which have been stated apply equally to the several kinds of indorsement which are recognized. The N. I. L. says:

(23) Neg. Inst. Law, secs. 191, 30.

(24) §§ 6, 49, above.

(25)

Greeser v. Sugarman, 76 N. Y. Supp. 922; Massachusetts Bank v. Snow, 187 Mass. 159.

Sec. 33. An indorsement may be either special or in blank; or it may also be either restrictive, or qualified, or conditional.

§ 89. Special indorsements. "A special indorsement specifies the person to whom, or to whose order, the instrument is to be payable; and the indorsement of such indorsee is necessary to the further negotiation of the instrument" (26). "Pay to X (Sgd.) A;" "Pay to X, or order (Sgd.) A;" and "Pay to the order of X (Sgd.) A;" are examples of special indorsements. Just as a note payable to A cannot be transferred without the indorsement of A, so an instrument specially indorsed by the payee, A, to X, cannot be transferred by X without his indorsement.

§ 90. Blank indorsements. If the payee writes his name upon the instrument without designating any transferee, the indorsement is blank, i. e., incomplete. If the instrument passes into the hands of a transferee he has an authority, implied from the delivery of the instrument with the incomplete indorsement upon it, to complete the indorsement by filling in his name or that of some other person as indorsee or transferee. If he fills in his own name, the indorsement becomes a completed special indorsement, and the legal situation is the same as if the payee had made a special indorsement to him in the first instance. Again, if he fills in the name of a third person as indorsee, upon delivery to him the person named becomes the indorsee with precisely the same results as if the payee had indorsed specially to him. However, without com

(26) Neg. Inst. Law, sec. 34.