by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement."

§ 1152. Restrictive and qualified indorsements.

Section 36. [WHEN INDORSEMENT RESTRICTIVE.] An indorsement is restrictive, which either,

or

(1) Prohibits the further negotiation of the instrument;

2) Constitutes the indorsee the agent of the indorser; or (3) Vests the title in the indorsee in trust for or to the use of some other person.

But the mere absence of words implying power to negotiate does not make an indorsement restrictive.

An indorsement for collection is restrictive and makes the indorsee merely a trustee to collect for the beneficial owner. It is common to speak of an indorsee for collection as an agent rather than as a trustee, but as such an indorsee can maintain an action in its own name on the instrument, and could do so prior to the Statute, it seems clear that he is properly a trustee rather than an agent. Whether an indorsement "to any bank or banker" though not in terms an indorsement for collection is by virtue of banking custom to be so interpreted is not clear. 10

It seems improbable that any contract is consistent with a blank indorsement except one which merely affects the question of the person to whom the obligation of the indorsement shall run. There is no implied authority to write a guaranty over such an indorsement, Belden v. Hann, 61 Ia. 42, 15 N. W. 591, and its effect cannot be varied by parol evidence. Torbert v. Montague, 38 Colo. 325, 87 Pac. 1145.

8 Commercial Nat. Bank v. Armstrong, 148 U. S. 50, 37 L. Ed. 363, 13 Sup. Ct. 533; Lippitt v. Thames L. & T. Co., 88 Conn. 185, 90 Atl. 369; Armstrong v. National Bank, 90 Ky. 431, 14 S. W. 411, 9 L. R. A. 553;

9

Freeman's Bank v. Tube Works, 151 Mass. 413, 24 N. E. 779, 8 L. R. A. 42, 21 Am. St. Rep. 461; Bank of America v. Waydell, 187 N. Y. 115, 79 N. E. 857; Murchison Nat. Bank v. Dunn Oil Mills, 150 N. C. 718, 64 S. E. 885. See also Werner Piano Co. v. Henderson, 121 Ark. 165, 180 S. W. 495.

9 Regina Flour Mill Co. v. Holmes, 156 Mass. 11, 30 N. E. 176; Ward v. Tyler, 52 Pa. 393; Metzger v. Sigall, 83 Wash. 80, 145 Pac. 72.

10 See First Nat. Bank v. Weitzel, 239 Fed. 497, 152 C. C. A. 375; Citizens' Trust Co. v. Ward, 195 Mo. App. 223, 190 S. W. 364; National Bank of Commerce v. Bossemeyer, 101 Neb. 96, 162 N. W. 503, L. R. A. 1917 E. 374.

Section 37. [EFFECT OF RESTRICTING INDORSEMENT; RIGHTS OF INDORSEE.] A restrictive indorsement confers upon the indorsee the right,—

(1) To receive payment of the instrument;

(2) To bring any action thereon that the indorser could bring;

(3) To transfer his rights as such indorsee, where the form of the indorsement authorizes him to do so.

But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement.11

Section 38.-[QUALIFIED INDORSEMENT.] A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words "without recourse" or any words of similar import. Such an indorsement does not impair the negotiable character of the instrument. 12

Section 39. [CONDITIONAL INDORSEMENT.] Where

"In the Illinois Act the following words are added to subsection 2: "or except in the case of a restrictive indorsement specified in section 36subsection 2-any action against the indorser or any prior party that a special indorsee would be entitled to bring." Subsection 3 reads as follows: “(3) To transfer the instrument, where the form of the indorsement authorizes him to do so" and at the end of the section is added: "specified in section 36 subsection 1-and as against the principal or cestui que trust only the title of the first indorsee under the restrictive indorsement specified in section 36 subsections 2 and 3 respectively." See National Bank v. Bossemeyer, 101 Neb. 96, 162 N. W. 503, L. R. A. 1917 E. 374; Smith v. Bayer, 46 Or. 143, 79 Pac. 497, 114 Am. St. 858; Metzger v. Sigall, 83 Wash. 80, 145 Pac. 72; American Sav. &c. Bank v. Dennis, 90 Wash. 547, 156 Pac. 559.

12 See cases cited under Sec. 31, supra, § 1149. Though the statute speaks of "adding" the words "without

recourse," it may be shown by parol where the statute has been passed that the words "without recourse" written below one indorsement and above another were written by the first indorser. Leahmer v. McCullough, 99 Kan. 451, 162 Pac. 297; Goolrick v. Wallace, 154 Ky. 596, 157 S. W. 920, 49 L. R. A. (N. S.), 789. Prior to the enactment of the statute also such evidence was admissible, Corbett v. Fetzer, 47 Neb. 269, 66 N. W. 417, even though the holder when he became such did not know of the fact. Fitchburg Bank v. Greenwood, 2 Allen, 434. The closing sentence of the section was involved in Bank of Sampson v. Hatcher, 151 N. C. 359, 66 S. E. 308, 134 Am. St. Rep. 989; Page v. Ford, 65 Or. 450, 131 Pac. 1013, 45 L. R. A. (N. S.) 247, Ann. Cas. 1915 A. 1048; Elgin City Banking Co. v. Hall, 119 Tenn. 548, 108 S. W. 1068; Leavitt v. Thurston, 38 Utah, 351, 113 Pac. 77; Dollar Sav. & Trust Co. v. Crawford, 69 W. Va. 109, 70 S. E. 1089, 33 L. R. A. (N. S.) 587.

an indorsement is conditional, a party required to pay the instrument may disregard the condition, and make payment to the indorsee or his transferee, whether the condition has been fulfilled or not. But any person to whom

an instrument so indorsed is negotiated, will hold the same, or the proceeds thereof, subject to the rights of the person indorsing conditionally.

§ 1153. Other kinds of indorsement.

Section 40.-INDORSEMENT OF INSTRUMENT PAYABLE TO BEARER.] Where an instrument, payable to bearer, is indorsed specially, it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as indorser to only such holders as make title through his indorsement. 13

Section 41. [INDORSEMENT WHERE PAYABLE TO TWO OR MORE PERSONS.] Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others.

This section follows the previously existing rule.14 It would seem, however, that either payee or indorsee could discharge the instrument, though unable to negotiate it.15 The section does not cover the case of an instrument payable to "A or B," but only the case of joint payees. 16

Section 42. [EFFECT OF INSTRUMENT DRAWN OR INDORSED TO A PERSON AS CASHIER.] Where an in

13 In the Illinois Act instead of the words "payable to bearer," are the words "originally payable to or indorsed specially to bearer." See the criticism of the section in 26 Harv. L. Rev. 493, 500. It is probably applicable only to instruments which on their face are expressed to be payable to bearer, though section 9 (5) classifies instruments indorsed in blank as also payable to bearer. See Crawford, N. I. L. (4th ed.) 83.

14 Foster v. Hill, 36 N. H. 526. See Allen v. Corn Exchange Bank, 87 N. Y. App. Div. 335, 84 N. Y. S. 1001. Under the statute see First Nat. Bank v. Gridley, 112 N. Y. App. D. 398, 98 N. Y. S. 445; Martz v. State Nat. Bank, 147 N. Y. App. Div. 250, 131 N. Y. S. 1045.

15 See supra, § 343.

16 Union Bank v. Spies, 151 Iowa, 178, 130 N. W. 928. See Sec. 8 (5) of the Act, supra, § 1139, also § 325.

strument is drawn or indorsed to a person as "Cashier " or other fiscal officer of a bank or corporation, it is deemed prima facie to be payable to the bank or corporation of which he is such officer; and may be negotiated by either the indorsement of the bank or corporation, or the indorsement of the officer.17

This section is an illustration of the principle that the actual owner of an instrument may negotiate it though not named by his legal name in the instrument. The converse of the section is equally true; that is, a bill or note payable to, or indorsed to a corporation may be indorsed by a fiscal officer if acting within his authority, in his own name with the addition of his official title; 18 and though the signature as maker or drawer of a negotiable instrument by an officer of a corporation in his own name with the addition of his official title creates no presumption that the instrument was the obligation of the corporation, this may be shown.19

Section 43. [INDORSEMENT WHERE NAME IS MISSPELLED, ETC.] Where the name of a payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described, adding, if he think fit, his proper signature.20

Section 44. [INDORSEMENT IN REPRESENTATIVE CAPACITY.] Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability.21

§ 1154. Time and place of indorsement, etc.

Section 45. [TIME OF INDORSEMENT; PRESUMPTION.] Except where an indorsement bears date after the

17 Johnson v. Buffalo Bank, 134 Iowa, 731, 112 N. W. 165; Eades v. Muhlenberg County Sav. Bank, 157 Ky. 416, 163 S. W. 494; Quincy Mutual Fire Ins. Co. v. International Trust Co., 217 Mass. 370, 104 N. E. 845, 1915 B. L. R. A. 725. Cf. First Nat. Bank v. McCullough, 50 Oreg. 508, 93 Pac. 366,

17 L. R. A. (N. S.) 1105, 126 Am. St. 758.

18 See supra, § 1149.

19 See supra, §§ 298-301, 1144.
20 See supra, § 1149.

21 Chelsea Exchange Bank v. First &c. Church, 152 N. Y. S. 201, 89 N. Y. Misc. 616.

maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue.22

Section 46. [PLACE OF INDORSEMENT; PRESUMPTION.] Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated.

Though a note is presumed to have been made where it is dated, evidence of a different actual place of making is admissible, 23 unless this would invalidate the instrument; in which case the signer is estopped to deny the truth of the representation contained in the instrument.24

Section 47. [CONTINUATION OF NEGOTIABLE CHARACTER.] An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise.

Under this section a bill or note is negotiable after maturity,25 but the right of one who then purchases will be limited by the fact that he is not a holder in due course. He will succeed to the legal title of his transferor, but will be subject to all defences which were good against the latter.26

Section 48. [STRIKING OUT INDORSEMENT.] The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument. 27

22 See German-American Bank v. Cunningham, 97 N. Y. App. D. 244, 89 N. Y. S. 836; Cedar Rapids Nat. Bank v. Bashara, 39 Okla. 482, 135 Pac. 1051.

23 Finch v. Calkins, 183 Mich. 298, 149 N. W. 1037.

24 Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 2 L. R. A. (N. S.) 299, 111 Am. St. 717.

25 Barnes v. Carr, 65 Fla. 87, 61 So.

184; Oakdale Mfg. Co. v. Clarke, 29 R. I. 192, 69 Atl. 681.

28 Ohio Valley &c. Co. v. Great Southern F. Ins. Co., (Ky. 1917), 197 S. W. 399.

27 See New Haven Mfg. Co. New Haven Pulp Co., 76 Conn. 126, 55 Atl. 604; Jerman v. Edwards, 29 Dist. Col. App. 535; Howell v. Commercial Nat. Bank, 40 App. D. C. 370; Ensign v. Fogg, 177 Mich. 317, 143 N. W. 82;