61 out notice, of a bill of exchange indorsed by one of the partners of a firm, may recover the amount against all the partners, notwithstanding the indorsement of the name of the firm was expressly prohibited in the articles of partnership. And though partners may have agreed between themselves that no member of the firm. should indorse paper to make the others liable, yet this will be no defense to an action on such paper made payable to the firm and indorsed by one of the partners in the firm name to a bona fide purchaser for value.62 In the case, however, of an action by an indorsee against the members of a firm on a bill accepted in the name of the firm, upon its being proved that the acceptance was by one of the partners in fraud of the partnership and contrary to the partnership articles, it has been decided that the burden rests on the plaintiff to show that he gave value.63 And the fact that a note was executed or transferred in violation of the articles of partnership will be a good defense as against a holder with notice.64 § 179. Paper executed in firm name after dissolution.-If, after the dissolution of a firm by one or more of the parties retiring, a bill or note is re-executed in the firm name of the remaining partners, in the usual course of business, the retiring partners can not set up in defense to an action thereon by the holder for value and without notice the fact that the firm has been dissolved, as the, authority and obligation of the partners continue until legal notice of the dissolution has been given.65 "When a partnership has once existed the presumption is that it still exists until its dissolution is made known, and, until this is done, the public have the right to presume on its continued existence, and when a former member 61 Bank of Kentucky v. Brooking, 2 Litt. (Ky.) 41. 62 Barrett v. Russell, 45 Vt. 43. 63 Hogg v. Skeen, 34 L. J. C. P. 153. See Dickson v. Primrose, 2 Miles (Pa.) 366. 64 Monroe v. Conner, 15 Maine 178, 32 Am. Dec. 148; Dickson v. Primrose, 2 Miles (Pa.) 366; Gallway V. Mathew, 10 East 264. 65 Marsh v. Wheeler, 77 Conn. 449, 59 Atl. 410, 107 Am. St. 40; Ewing v. Trippe, 73 Ga. 776; Holtgreve v. Wint ker, 85 Ill. 470; Stall v. Cassady, 57 Ind. 284; Merrit v. Pollys, 16 B. Mon. (Ky.) 355; Goddard v. Pratt, 33 Mass. (16 Pick.) 412; Wagner v. Freschl, 56 N. H. 495; Van Eps v. Dillaye, 6 Barb. (N. Y.) 244; Buffalo City Bank v. Howard, 35 N. Y. 500; Hammond v. Aiken, 3 Rich. Eq. (S. Car.) 119; Davis v. Willis, 47 Tex. 154; Clement v. Clement, 69 Wis. 599, 35 N. W. 17, 2 Am. St. 760. Compare Gale v. Miller, 54 N. Y. 536; Woodford v. Dorwin, 3 Vt. 82, 21 Am. Dec. 573. contracts a debt in its name, to allow a retired member to escape liability from its payment would be to allow a perpetration of a fraud. * * * Until notice of the dissolution of a firm is given, the public, who has no such knowledge, may treat the firm as in existence, and a note given by one member of such firm is binding upon all the other members, notwithstanding such dissolution."66 And, where partners individually indorse a partnership note, they do so as principals, and not as sureties.67 So, where, after the dissolution of a partnership, a note is given by one of the members in the firm name in payment of a firm debt to one who has had no notice of the dissolution, the firm will be held liable thereon.68 But there can be no recovery against a firm on a note given by one of the partners in the firm name for his personal debt, after dissolution of the firm, where the payee knew that it was given for a member's private debt, and knew, or what amounts to the same thing, was chargeable with notice of the dissolution. 69 § 180. Authority to negotiate paper. The defense of want of authority to negotiate commercial paper is sometimes available, as where a firm puts a check into the hands of an agent for the purpose of raising money for the principal, the purchaser was put upon inquiry as to the agent's authority to deal with the check for his own profit, where the agent offered to, and did as part payment for the check, take a release for a debt owing by him to the purchaser.70 But the makers of notes can not defend an action on them by the indorsee on the ground that the payee had no authority to negotiate them, where the notes were duly indorsed and transferred by the payee, and the makers admit the validity of the notes.71 However, where the expression of the holder or transferrer's fiduciary character appears from the papers accompanying a note, the purchaser takes it with notice of the transferrer's limited authority to negotiate it.72 But, where negotiable securities were put into 66 Ewing v. Trippe, 73 Ga. 776, 777, 778. 67 Nashville Saddlery Co. v. Green, 127 Miss. 98, 89 So. 816. 68 Long v. Garnett, 59 Tex. 229. 69 Lansing v. Gaine, 2 Johns. (N. Y.) 300, 3 Am. Dec. 422. 70 Johnson v. Harrison, 177 Ind. 240, 97 N. E. 930, 39 L. R. A. (N. S.) 1207. 71 Winer v. Bank of Blytheville, 89 Ark. 435, 117 S. W. 232, 131 Am. St. 102. 72 Fidelity Trust Co. v. Fowler (Tex. Civ. App.), 217 S. W. 953. the hands of a bailee for a particular purpose, and were disposed of for a different purpose and in a different manner from that stipulated in the agreement between the parties, to one having no notice of the limitations placed upon the authority of the bailee, the purchaser acquired a good title, and a suit by him can not be defended on the ground of want of authority of the bailee in the transfer of the paper.' 73 SUBDIVISION VI. ALIEN ENEMIES, BANKRUPTS, AND PERSONS UNDER GUARDIANSHIP. Section 181. Transaction between alien enemies. 182. Capacity of bankrupt to contract. 183. Incapacity of persons under guardianship to contract. § 181. Transactions between alien enemies.-Under the principle of International Law rendering invalid dealings between alien enemies in time of war, commercial transactions between alien enemies during a state of war, are, as a general rule, void and unenforceable. And the same rule as to dealings between alien ene 73 Knight v. Seney, 290 Ill. 11, 124 N. E. 813. 1 Billgerry v. Branch, 19 Gratt. (Va.) 393, 433, 100 Am. Dec. 679; Wilson v. Patterson, 7 Taunt, (Eng.) 436. But see United States v. Barker, 1 Paine (U. S.) 156, Fed. Cas. No. 14517; Tarleton V. Southern Bank, 49 Ala. 229; Woods v. Wilder, 43 N. Y. 164, 3 Am. Rep. 684, where the court makes exceptions to the general rule, which arise out of the necessity of the case. In the case of Tarelton v. Southern Bank, 49 Ala. 229, a bill of exchange was drawn in Alabama on a bank in Louisiana. At the time a state of war existed between the United States and the Southern Confederacy of which Alabama was a part, and the city of New Orleans, in which the drawee bank was located, was in the occupancy of troops of the United States government, and so continued until the restoration of peace, while Alabama was under the control of the Confederate government. The purpose of the draft was to appropriate to the drawer its funds to its use in rebel territory, and to take the same from the territory under the control of the United States government; and the court held that this would not be permissible. the time such bill was drawn all commercial intercourse was forbidden between these two sections of the Union, by proclamation of the President. See also, Billgerry v. Branch, 19 Gratt. (Va.) 393, 100 Am. At mies applies in cases of acceptance, indorsement or assignment of commercial paper between persons who are under the control of the respective belligerent governments or powers.2 However, where a note was executed prior to the time the parties thereto became alien enemies, and before they were each under the dominion of their respective hostile governments, its renewal thereafter constituted it a valid obligation; and even where bills were drawn when a state of war existed between the respective governments of the parties to the bills, they can be rendered valid and enforceable by a mere oral promise, after cessation of hostilities, to pay the same. So paper executed by an alien enemy for the ransom of a captured ship, or for repairs made to a ship in the enemy country, may be valid and enforceable, especially when protected by an agreement between the belligerent powers.5 § 182. Capacity of bankrupt to contract.-When a person has become a bankrupt, either voluntarily or involuntarily, he can not thereafter exercise any authority or control over his property, including commercial paper which belonged to him, as it has passed into hands of the assignee in bankruptcy and he can not perform any acts of ownership over it by way of indorsement or otherwise." But where before bankruptcy of the holder of a negotiable instrument he has transferred it without indorsement which the parties intended to be made the transferee may compel the bankrupt or the assignee to indorse the instrument. Dec. 679, which is a case based upon similar state of facts. Woods V. Wilder, 43 N. Y. 164, 3 Am. Rep. 684, was a case where a bill of exchange was drawn by a partner in the state of Georgia on his partners in the state of New York, while a state of war existed between the Union and the Southern Confederacy, when the proclamation of the President of the United States forbade all commercial intercourse between the people of the Union and the people of the Southern Confederacy, and it was held that such bill of exchange was illegal and void. 2 Woods v. Wilder, 43 N. Y. 164, So where, before bankruptcy, 3 Am. Rep. 684; Billgerry v. Branch, 19 Gratt. (Va.) 393, 100 Am. Dec. 679. 3 McVeigh v. Old Dominion Bank, 26 Gratt. (Va.) 785. 4 Duhammel v. Pickering, 2 Stark. (Eng.) 81. 5 Cornu v. Blackburne, 2 Dough. (Eng.) 641; Ricord v. Bettenham, 3 Burr. (Eng.) 1734. 6 Story on Notes, $102; Parsons, Notes and Bills, § 153. 7 Ex parte Mawbray, 1 Jac. & W. (Eng.) 427; Watkins v. Maule, 2 Jac. & W. (Eng.) 237. See also Hughes v. Nelson, 29 N. J. Eq. 547. a bankrupt had transferred a note or bill without indorsing it, but indorsed it after he had become bankrupt, the holder of the paper has good title thereto, since the act of indorsing it was a mere matter of form, to which the holder was entitled. And if a note is made payable to a bankrupt or his order, after the payee has become a bankrupt, the maker can not set up in defense, in action by the transferee of the bankrupt, that the payee had no right to transfer it. But where after a bankrupt has been discharged, he gives his note for a debt which existed prior to his adjudication as a bankrupt, the consideration of which was the dismissal of an application for the setting aside of the discharge, such note was void, as was also his subsequent promise to pay the note.10 § 183. Incapacity of persons under guardianship to contract. -Since persons who are under guardianship, either because of infancy, insanity, or any other legal cause, are incapacitated to make contracts, such persons, as a general rule, do not have capacity to execute, draw, indorse, or accept commercial paper, and their acts in that regard are void.11 SUBDIVISION VII. To WHOM DEFENSE AVAILABLE. Section 185. Who may set up incapacity or want of authority. § 185. Who may set up incapacity or want of authority.— The makers of a note negotiable under the law merchant warrant the capacity of the payee to transfer it in the usual course of business; and, in an action by a bona fide holder, can not dispute the authority of the payee to accept and transfer the note executed by them.74 The defendant, who owes the debt, has no interest beyond 8 Hessey v. Elliott, 67 Maine 526. See also Pavey v. Stauffer, 45 La. Ann. 353, 12 So. 512. 9 Drayton v. Dale, 2 B. & C. (Eng.) 293. 10 Fell v. Cook, 44 Iowa 485. 11 Chew v. Bank of Baltimore, 14 Md. 299 (transaction by lunatic or V. person non compos mentis); Mason Felton, 13 Pick. (Mass.) 206 (spendthrift under guardianship); Lynch v. Dodge, 130 Mass. 458 (indorsement of note by spendthrift under guardianship). 74 Wolke v. Kuhne, 109 Ind. 313, 10 N. E. 116 (so holding where a note |