37 CHAPTER V. OF THE CAPACITY, AUTHORITY, AND LIABILITY OF CONTRACTING PARTIES TO A BILL OR NOTE. · 38 50 38 39 39 Rights and liabilities as between the Firm and the World 2 233 52 41 54 42 42 42 43 54 54 43 When Authority may be inferred To draw and to indorse When admitted Effect of a Forged or Un authorized Signature When Agent liable Ambiguous Signatures Pledging Bill Brokers Procuration When the Production of Agent's Authority may be required. How determined. One partner binding the others by Bills By Promissory Notes . Must observe Style of Firm. 53 Farming and Mining Partnerships. Partnerships not in Trade 54 Creditors carrying on Trade α Consequences of Partner exceeding his Authority Where there is Notice. Common Partner in Two 55 Fresh Security 44 PARTNER 44 His Liability When it may be delegated Personal Liability of an Agent to Third Persons Parol Evidence inadmissible to discharge the Agent NOMINAL PARTNER DISSOLUTION Signature without Authority 46 Retirement of Secret Partner 61 Liability, how avoided Liability of Agent for Fraud Rights of an Agent against Third Persons Liability of an Agent to his Principal OCCASIONAL PARTNER 47 47 SHIPS 47 48 Rights of Principal against . When Executors may sue as may s such 64 64 65 65 Who may contract. Signature essential to liability. Agents, CAPACITY to incur liability as a party to a bill or note is co-extensive with capacity to contract; hence, in general, corporations, unless specially authorized so to do, infants, lunatics, married women not having a separate estate, cannot become liable as parties, Code, s. 22. But when a bill is drawn or indorsed by an infant, or by a corporation, not so authorized, the holder is entitled to enforce payment against other parties to the bill (a). No person is liable as drawer, indorser, or acceptor, or maker of a bill, or note, unless he has signed it as such; but signing a trade or assumed name is as binding as a man's real name; and signing the name of a firm is equivalent to the signature by the person writing it of the names of all the partners (b). The signature need not be by the man himself, it may be written by the hand, or even in the name of a dulyqualified agent, for whatever a man may do himself (a) Code, s. 22 (2). They may be channels to convey title and liability, though not to originate it, as the section makes no mention of acceptance, the primary contract on a bill, and hence by inference excludes the making, the primary contract on a note. Married women again are omitted, as if they possess a separate estate, their contracts primâ facie relate to that, and if they do not, they can only act as agents for their husbands. An infant in the Scotch law is termed a minor. (b) Code, s. 23. If he have authorized another to accept in that other's name that will bindhim, though his own do not appear. Lindus v. Bradwell, 5 C. B. 583. As to the liability of a transferor by delivery, see post, the Chapter on TRANSFER. (except in virtue of a delegated authority) he may do by CHAPTER his agent (c). V. No particular form of appointment is necessary to enable how an agent to draw, indorse or accept, or make bills or notes, appointed. so as to charge his principal; he may be specially appointed for this purpose, or derive his power from some general or implied authority. And it is important to see that the ostensible do not exceed the actual authority, for if the principal's representations or acts give to the agent the appearance of an authority larger than the agent actually possesses, the principal may be bound by such of the agent's acts as, although beyond the line of the agent's actual authority, are still within the margin of the ostensible or apparent authority. And this, on the established and elementary principle, that untrue representations, on the faith of which a man induces a third person to act, bind the party making them. Subsequent recognition of an agent's acts is equivalent to Ratification. previous authority; provided the agent, when he acted, assumed to act as agent (d). General authorities to transact business, and to receive and discharge debts, do not confer upon an agent the power of accepting or indorsing bills, so as to charge his principal (e). And special authorities to accept or indorse (c) Code, s. 91. Combi's case, 9 Rep. 75; Lindus v. Bradwell, 5 C. B. 583. Disqualifications for contracting on a person's own account are not necessarily disqualifications for contracting as agent for another; for an agent is considered as a mere instrument therefore infants, married women, persons attainted, outlawed, or excommunicated, aliens and other persons labouring under disabilities, may be agents. Co. Lit. 52 (a). An infant, though he may be a private, cannot be a public, attorney at law to conduct suits. Ibid. 128 (a); Mir. C. 2, s. 21. (d) Viner's Ab. Ratihabition; Saunderson v. Griffiths, 5 B. & C. 909; D. & R. 643; Vere v. Ashby, 10 B. & C. 288; 34 R. R. 408. See the law of Ratihabition discussed in Wilson v. Tummon, 6 M. & G. 236, which is the leading case on the subject. See also Ancona v. Marks, 31 L. J., Exch. 163; 7 (e) Hogg v. Snaith, 1 Taunt. CHAPTER When be inferred. are construed strictly. A. B., who carried on business on his own account, and also in partnership, went abroad, and gave to certain persons in this country two powers of attorney; by the first of which, authority was given for him, and in his name and to his use, to do certain specific acts (and, amongst others, to indorse bills, &c.), and generally to act for him, as he might do if he were present; and, by the second, authority was given, "for him, and on his behalf, to accept bills drawn on him by his agents or correspondents." C. D., one of A. B.'s partners (and who acted as his agent), in order to raise money for payment of the creditors of the joint concern, drew a bill which the attorney accepted in A. B.'s name by procuration. In action against A. B., by the indorsee of the bill, held, first, that the right of the indorsee depended upon the authority given to the attorney; secondly, that the power applied only to A. B.'s individual, and not to his partnership affairs; thirdly, that the special power to accept extended only to bills drawn by an agent in that capacity; and that C. D. did not draw the bills in question as agent, but as partner; and, lastly, that the general words in the power of attorney were not to be construed at large, but as giving general powers for the carrying into effect the special purposes for which they were given (f). An authority to indorse bills remitted to the principal, gives no power to indorse a bill which the principal could not have indorsed without a fraud, and such an indorsement conveys no title even to a holder in due course (g). It would be otherwise had the principal himself indorsed (h). An authority is often implied from circumstances; as if authority may the agent has formerly been in the habit of drawing, accepting or indorsing for his principal, and his principal has recognized his acts. Thus, to an action against an acceptor of a bill, the defence was, that the drawer had forged the acceptor's signature, in answer to which it was proved that the defendant had previously paid such Kilgour v. Finlayson, 1 H. Bla. by accepting a bill, even though expressly forbidden so to do. Edmunds v. Bushell, L. R., 1 Q. B. 97; 35 L. J., Q. B. 21. (f) Attwood v. Munnings, 7 B. & C. 273; 1 M. & R. 78; 31 R. R. 194. See Bank of Bengal v. M Cleod, 7 Moore, P. C. C. 35. (g) Fearn v. Filica, 14 L. J., C. P. 15; 7 M. & G. 513. (h) Ibid. acceptances; and this was held proof of authority to the drawer (i). CHAPTER V. indorse. "It may be admitted," says Tindal, C. J., "that an To draw and authority to draw does not import in itself an authority to indorse bills; but still the evidence of such authority to draw is not to be withheld from the jury, where they are to determine on the whole of the evidence, whether an authority to indorse existed or not" (k). And therefore, from the facts that the defendants' confidential clerk had been accustomed to draw cheques for them, that in one instance they had authorized him to indorse, and in two other instances had received money obtained by his indorsing in their name, a jury was held warranted in inferring that the clerk had a general authority to indorse (1). The acceptance of a bill drawn by procuration is an When adadmission of the agent's authority to draw, but no admis- mitted. sion of his authority to indorse, though the indorsement were on the bill at the time of acceptance (m). A forged or unauthorized signature is wholly inoperative, Effect of a and gives no right to retain or discharge the bill, or enforce forged or payment thereof, unless the party, against whom such unauthorized right is sought, be precluded from setting up the forgery or want of authority (n). signature. Where a person signs as drawer or indorser, or acceptor When agent or maker, of a bill, or note, adding words indicating that liable. (i) Barber v. Gingell, 3 Esp. 60; Llewellyn v. Winckworth, 13 M. & W. 598; Cash v. Taylor, Lloyd & Welsby, 178; 8 L. J., K. B. 262. But paying on one forged signature is no estoppel in the case of a second forged signature. Morris v. Bethell, L. R., 5 C. P. 47. (k) Prescott v. Flynn, 9 Bing. 19; 2 Moo. & Sc. 22; 35 R. R. 508. (1) Ibid. (m) Robinson v. Yarrow, 7 Taunt. 455; 1 Moo. 150; 18 R. R. 537. See the Chapter on ACCEPTANCE. Code, s. 54 (2) b. (n) Robarts v. Tucker, 16 Q. B. 560; Fearn v. Filica, 7 M. & G. 513; 14 L. J., C. P. 15; Code, s. 24. The other provisions of the Code to which section 24 is subject |