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OF THE PARTIES TO BILLS AND NOTES.
When personally responsible.
Mode of becoming parties to bills.
In what cases a partner cannot bind his co-partners by
pledging the credit of the firm for his separate
debt. In what cases a partner may bind his co-partners, by
pledging the credit of the firm for his separate debt. One partner cannot bind his co-partner by giving a
bill or note the partnership name, where the party receiving it knew at the time, that the other partners had given notice that they would not be
an act of bankruptcy.
In general.] The person who makes a bill is called the drawer, the person to whom it is addressed the drawee, and
the person in whose favour it is made, the payee. If the drawee accepts the bill, he is called the acceptor. The person who makes a note, is called the maker; and the person to whom it is payable, the payee. When a bill or note is indorsed, the person indorsing it, is called the indorser, the person to whom it is indorsed, the indorsee. Bayley, 2. The liabilities of these parties will form the subject of the next chapter.
A person may also become a party to a bill collaterally, as by accepting it, for the honor of the drawer, on the refusal of drawee to accept, which is termed an acceptance supra protest, see post, Chap. VIII. So a party may pay a bill for the honor of the drawer, or of any of the indorsers. Chap. X.
It was formerly thought, that no person who was not a merchant, could be a party to a bill, but it has been long decided, that all persons who have capacity to contract, may become parties to a bill. Sarsfield v. Witherley, 2 Vent. 292. Carth. 82. Nor will drawing bills for a particular purpose (not continuing it with a view to gain a profit on the exchange), constitute the party a trader within the bankrupt laws. Hankey v. Jones, Cowp. 745. Richurdson v. Bradshaw, 1 Atk. 128. see post, Chap. XIV. So the accepting a bill will not deprive an attorney of his privilege of being sued' by bill. Comerford v. Price, Dougl. 312.
In general, a party is only liable, when he has written his name on the bill. Fenn v. Harrison, 3 T. R. 761. Siffkin v. Walker, 2 Campb. 308. Thus, where a party said he guaranteed a bill as if he had indorsed it, and became bankrupt, the bill not being due until after the bankruptcy, Lord Thurlow held that it was a mere guarantee, and there could be no proof without actual indorsement. Cited ex-parte Gardom, 15 Ves. 288. So where B. handed over a negotiable note for a valuable consideration to G. not indorsing it, but gave a written acknowledgment on a separate paper, to be accountable for the note to G., and G. indorsed the note and delivered the written acknowledgment to M. for a valuable consideration, and then B. and the parties to the note, became bankrupt, the Chancellor held, that M. could not prove the note against the estate of B., the written acknowledgment not being assignable, but that he was entitled to have the amount made an item in the account between B. and G., and to stand in the place of the latter. In the matter of Barrington, 2 Sch. & Lef. 112. See also, ex-parte Roberts, 2 Cox, 171. Ex-parte Harrison, 2 Cox, 172. 2 Bro. C. C. 614. S. C. Er-parte Hustler, 1 Glyn & J. 9. post, Chap. XIV. If the holder of a bill send it to market without indorsing his name on it, neither morality nor the laws of this country will compel him to refund the money for which he has sold it, if he did not know at the time that it was not a good bill. If he knew the bill to be bad, it would be like sending out a counter into circulation, to im. pose upon the world , instead of the current coin. Per Lord Kenyon, Fenn v. Harrison, 3 T. R. 759. Jones v. Ryde, 1 Marsh. 163.
Where the same persons are parties in different characters.) Although in general there are three parties to bill of exchange, the drawer, the payee, and the drawee, yet it is not unusual for the same persons to be both the drawers and the drawees. Ex-parte Parr, 18 Ves. 69. It has been customary in such cases to declare upon the bill, treating the drawer and drawee as different persons. Starke v. Cheesman, Carth. 509. 1 M. & R. 120. ante p. 20. But it has lately been determined that such an instrument is a mere promissory note, and that the maker is not entitled to notice of dishonor. Roach v. Ostler, 1 Mann. & Ry. 120.
So the same person may be both the payee and second indorsee of a note, in which case he cannot maintain an action on the note against his immediate indorsee. Bishop v. Hayward, 4 T. R. 470. So where in a declaration upon a bill drawn by the plaintiffs upon one F. W. indorsed by the plaintiffs to the defendant, and re-indorsed by the defendant to the plaintiffs, there was an averment, that at the time of the drawing of the bill, and of the indorsement by the defendant to the plaintiffs, it had been agreed between them, that the name of the defendant should be indorsed upon the bill, as a security to the plaintiffs, for the due payment thereof by F. W., and that the bill was so indorsed by the defendant under such agreement, and for such purpose only; and that the plaintiffs took and received the bill in satisfaction of the debt of the said F. W., upon the faith, that the defendant would indorse the same as such security, and that the indorsement by the plaintiffs was made without any consideration, and for the purpose only of procuring the indorsement of the defendant, and making the bill negotiable ; and it was also averred, that the bill was presented to F. W., and that he refused to pay, and that notice of such refusal was given to the defendant, and he thereby became liable to pay, and being liable, promised, it was held upon demurrer, that this declaration was bad, inasmuch, as if the action was founded on the bill, the plaintiff could only recover according to the custom of merchants, and by that custom the plaintiffs as indorsers and drawers, would be liable to pay the amount of the bill to the defendant; and if the action was considered as founded on the special contract, it was not maintainable, inasmuch as there was not any consideration for the defendant's indorsement Britten v. Webb, 2 B. & C. 483.
So where a bill or note is indorsed by a firm, and comes into the hands of another firm, in which one of the partners in the first firm is a partner, it cannot be enforced against the first firm, for that would be to allow a man to sue himself. Mainwaring v. Newman, 2 B. & P. 120. And where a holder of shares in a washing company, drew bills on the directors of the company for goods furnished by him and his brother, and the bills were accepted
“ for the directors of the company, by the secretary, who had authority to accept bills drawn by the holder's brother, in an action by the holder against the company, it was held that the plaintiff was not entitled to recover. Neale v. Turton, 4 Bingħ. 150. Teague v. Hubbard, 8 B. & C. 345.
Agents — how appointed.] A person may become a party to a bill of exchange by his agent, and it is not necessary that such agent should be appointed in writing. Anon. 12 Mod. 564. An authority also, may be presumed from circumstances, as from a subsequent recognition of the agent's act by the principal. Thus, where an agent accepted a bill for his principal, who admitted that it was a just debt and ought to be paid, this was held to be evidence of a special authority to accept. Howard v. Baillie, 2 H. B. 618. So if a person has in the principal's absence usually accepted bills for him, and the principal on his return, has approved thereof, it would always be construed as his intention, and be as valid and binding as a legal and formal instrument. Beawes, pl. 86. So where one Taylor accepted several bills in the defendant's name which the latter had paid, in an action on a similar bill, Lord Kenyon ruled that though the defendant might not have accepted the bill, he had adopted the acceptance, and made himself thereby liable to the payment of it. Barber v. Gingell, 3 Esp. 60. Neal v. Erving, 1 Esp. 61. Haughton v. Ewbank, 4 Campb. 88. Townsend v. Inglis, Holt, N. P. C. 278. When an authority is once proved it will be presumed to continue. Thus, if a servant having power to draw bills in his master's name, is turned out of the service, and draws a bill in so little time after that the world cannot take notice of his being out of service, or if he were a long time out of his service, but it is kept so secret that the world cannot take notice of it, the bill will bind the master. Per Holt, C. J. v. Harrison, 12 Mod. 346. And if my servant has a note for money due to him, or other goods which in their nature are not properly in the custody of a servant, that is evidence prima facie, that he has an authority from me to apply them to such use as he does afterwards put them to, but the contrary may be given in evidence, as that he came by the note by undue means or had it to another particular purpose. Per Holt, C. J. Anon. 12 Mod. 564.
One partner may, by procuration, indorse bills for the firm. Williamson v. Johnson, 1 B. 8 C. 146. 2 D. & R. 283. S.C.
Agents cannot depute their authority.] In general an agent cannot delegate his authority, unless he has express power so to do. Pulliser v. Ord, Bunbury, 166. Coles v. Trecothick, 9 Vesey, 234. But where a person authorised another " to make use of his name by procuration or otherwise to draw bills,” and a clerk of the latter drew a bill per procuration of the principal, the Lord Chancellor held that the principal was bound, for that whenever this sort of authority is given it must be taken to be given, to be made use of in the common course of business, and that the clerk only did in the name of the principal, what he used to do in the name of the agent. Ex-parte Sutton, 2 Cox's Ca. 84. but see Coles v. Trecothick, 9 Ves. 234.
Agents---eatent of authority.] There is this distinction between a general and a special agent, that in the first case the principal must be bound by all his acts, whereas in the latter he is only bound while the agent acts within the scope of his authority. Per Lord Kenyon, East India Company v. Hensley, 1 Esp. 112. A general authority does not import an unqualified authority, but that which is derived from a multitude of instances; whereas a particular authority is confined to an individual instance. Per Lord Ellenborough, Whitehead v. Tuckett, 15 East, 408. Where the holder of a bill desired A. to get it discounted, but positively refused to indorse it, and A. delivered it to B. for the same purpose, informing him to whom it belonged, and B. finding he could not dispose of it without indorsing it, was prevailed upon to do so by A.'s telling him that he would indemnify him ; but the indorsee took it upon the credit of the names on the bill without any knowledge of the real owner, although such original holder afterwards promised to pay the bill ; it was held that such promise would not support an action against him by the indorsee, it being nudum pactum, for as A. was a special agent under a limited authority he could not bind his principal by any act beyond the scope of such limited authority. Fenn v. Harrison, 3 T.R. 757. Lord Kenyon diss.
But where the agent is merely employed to get the bill discounted, without his authority being limited, he may bind his employers by warranting the bill to be good. S. C. 4 T. R. 177.
Where a person delivers to another a blank form of a promissory note with his name endorsed thereon, he will be liable for any sum and time of payment which that person may