security to the drawer, if required, to indemnify him against all persons whatever in case the bill alleged to have been lost shall be found again. If the drawer on request as aforesaid refuses to give such duplicate bill, he may be compelled to do so1. 1 Act II of 1885, sec. 3. CHAPTER IV. OF NEGOTIATION. 46. The making, acceptance or indorsement of a promissory Delivery. note, bill of exchange or cheque is completed by delivery, actual or constructive 1. As between parties standing in immediate relation2, delivery to be effectual must be made by the party making, accepting or indorsing the instrument, or by a person authorized by him in that behalf. As between such parties and any holder 3 of the instrument other than a holder in due course, it may be shown that the instrument was delivered conditionally or for a special purpose only, and not for the purpose of transferring absolutely the property therein. A promissory note, bill of exchange or cheque payable to bearer is negotiable by the delivery thereof. A promissory note, bill of exchange or cheque payable to order is negotiable by the holder 3 by indorsement and delivery thereof 4. 47. Subject to the provisions of section fifty-eight, a pro- Negotiamissory note, bill of exchange or cheque payable to bearer is tion by negotiable by delivery thereof. Exception. A promissory note, bill of exchange or cheque delivered on condition that it is not to take effect except in a 1 i. e. transfer of a possession actual or constructive. Constructive possession' is what jurists call 'representative possession,' i. e. where the thing is in the custody of the owner's agent, clerk, or servant. Where there is authority express or implied to send a bill by post, the post office is deemed to be the agent of the person to whom the bill is sent, and therefore delivery is complete as soon as the letter containing the bill is posted, Ez p. Cote, 9 L. R., Ch. Ap. 27. But VOL. I. where (as in France) the person post- Y y 2 Sec. 44. 3 See the first note on sec. 15. See secs. 7, 14 and 15. The fourth and fifth clauses of sec. 46 were left in the Bill per incuriam. The matter is provided for in secs. 47, 48. delivery. Negotiation by in certain event is not negotiable (except in the hands of a holder for value without notice of the condition) unless such event happens. Illustrations. (a) A, the holder of a negotiable instrument payable to bearer, delivers it to B's agent to keep for B. The instrument has been negotiated. (b) 4, the holder of a negotiable instrument payable to bearer, which is in the hands of A's banker, who is at the time the banker of B, directs the banker to transfer the instrument to B's credit in the banker's account with B. The banker does so, and accordingly now possesses the instrument as B's agent. The instrument has been negotiated, and B has become the holder of it. 48. Subject to the provisions of section fifty-eight, a dorsement. promissory note, bill of exchange or cheque payable to the order of a specified person, or to a specified person or order, is negotiable by the holder by indorsement and delivery thereof. Conversion of Indorsement in indorse 1 49. The holder of a negotiable instrument indorsed in blank without signing his own name, by writing above may, blank into the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank into an indorsement in full; and the holder1 does not thereby incur the responsibility of an indorser. ment in full. Effect of indorsement. 50. The indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein with the right of further negotiation; but the indorsement may, by express words, restrict or exclude such right, or may merely constitute the indorsee an agent to indorse the instrument, or to receive its contents for the indorser, or for some other specified person 3. Illustrations. B signs the following indorsements on different negotiable instruments payable to bearer : (d) The within must be credited to C.' These indorsements exclude the right of further negotiation by C. (e) 'Pay C.' (f) 'Pay C value in account' with the Oriental Bank.' (9) Pay the contents to C, being part of the consideration in a certain deed of assignment executed by C to the indorser and others.' These indorsements do not exclude the right of further negotiation by C. 51. Every sole maker, drawer, payee or indorsee, or all of Who may negotiate. several joint makers, drawers, payees or indorsees, of a negotiable instrument may, if the negotiability of such instrument has not been restricted or excluded as mentioned in section fifty, indorse and negotiate the same. Explanation.-Nothing in this section enables a maker or drawer to indorse or negotiate an instrument, unless he is in lawful possession or is holder thereof; or enables a payee or indorsee to indorse or negotiate an instrument, unless he is holder thereof. Illustration. A bill is drawn payable to A or order. A indorses it to B, the indorsement not containing the words or order' or any equivalent words. B may negotiate the instrument. who ex 52. The indorser of a negotiable instrument may, by ex- Indorser press words in the indorsement, exclude his own liability cludes his thereon, or make such liability or the right of the indorsee own liato receive the amount due thereon depend upon the hap- makes it pening of a specified event, although such event may never condihappen. Where an indorser so excludes his liability and afterwards becomes the holder of the instrument, all intermediate indorsers are liable to him. Illustrations. (a) The indorser of a negotiable instrument signs his name, adding the words 'Without recourse.' Upon this indorsement he incurs no liability. (b) A is the payee and holder of a negotiable instrument. Ex 1 'Value in account' means only ment, Buckley v. Jackson, L. R., 3 value received in account. It in no Ex. 136, per Kelly C.B. way restricts the effect of the endorse bility or tional. Holder deriving cluding personal liability by an indorsement without recourse,' he transfers the instrument to B, and B indorses it to C, who indorses it to A. A is not only reinstated in his former rights, but has the rights of an indorsee against B and C. 53. A holder of a negotiable instrument who derives title title from from a holder in due course has the rights thereon of that holder in due course. holder in due course. Instrument indorsed 54. Subject to the provisions hereinafter contained as to in blank. crossed cheques 1, a negotiable instrument indorsed in blank is payable to the bearer thereof even although originally payable to order. Indorsement in blank followed by indorsement in full. Indorse ment for part of 55. If a negotiable instrument, after having been indorsed in blank, is indorsed in full, the amount of it cannot be claimed from the indorser in full, except by the person to whom it has been indorsed in full, or by one who derives title through such person 2. 56. No writing on a negotiable instrument is valid for the purpose of negotiation if such writing purports to transfer sum due. only a part of the amount appearing to be due on the instrument; but where such amount has been partly paid, a note to that effect may be indorsed on the instrument, which may then be negotiated for the balance 3. Legal 57. The legal representative of a deceased person cannot representa- negotiate by delivery only a promissory note, bill of exchange or cheque payable to order and indorsed by the deceased but not delivered 5. tive cannot by delivery only negotiate instrument indorsed by deceased. 1 Secs. 123-131. The following illustration is taken from Chalmers, p. 60: C, the payee of a bill, indorses it in blank and delivers it to D. Then D specially indorses it to E or order. E without indorsement transfers the bill to F. Then F as the bearer is entitled to receive payment or to sue the drawer, the acceptor, or C, who indorsed in blank; but he cannot sue D or E. (Smith v. Clarke, Peake 295, and cf. Walker v. Macdonald, 2 Exch. 527.) The following illustrations are suggested by Mr. Chalmers : |