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4. Where successive endorsements,-which may be struck from the bill by the holder; and of which he may avail himself.
So strict a rule as was laid down in Gorgerat &c. v. McCarty, 1 Yeates 94, 2 Dall. 144, would not now be acted on. The supreme court of the United States has said that if any person who endorses a bill of exchange to another, whether for value or for the purpose of collection, shall come to the possession thereof again, he shall be regarded, unless the contrary appear in evidence, as the bona fide holder and proprietor of such bill, and shall be entitled to recover, notwithstanding there may be on it one or more endorsements in full subsequent to the one to him, without producing any receipt or endorsement back from either of such endorsees, whose names he may strike from the bill or not as he may think proper. Dugan &c. ex'ors of Clarke v. U. S. 3 Wheat. 172; Lonsdale v. Brown, 3 Wash. C. C. R. 404. This rule has been generally approved. Mullen v. French, 9 Watts 96; Clark v. Schwing, 1 Dana 335; Bank of Tennessee v. Smith, 9 B. Monroe 612; French v. Barney, 1 Iredell 219; Kiersted v. Rogers, 6 Har. & J. 285, 6; 2 Texas Rep. 510, 11; Picket v. Curtis, 1 Sumner 478. Mr. Justice Story thinks that such is also the French law. S. C.; 2 Pardessus, p. 379, art. 349.
The rule which now prevails in Louisiana accords with that established by the supreme court of the United States. There may be on the note the plaintiff's endorsement, and no evidence to shew how he became repossessed of it; but this circumstance will not prevent his recovery when the endorsement is in blank. 7 Martin N. S. 254; Griffon v. Jacobs &c. 2 Louis. 193; Barbarin v. Daniels, 7 Id. 481; Mourain v. Devall &c. 12 Id. 95. If the endorsement was special, the early Louisiana decisions required the plaintiffs to shew that the endorsee was merely their agent, Dicks v. Martin &c. 6 Martin N. S. 45; or to shew a re-transfer, Hart &c. v. Windle, 15 Louis. 266. But the court has changed this opinion, and adopted the rule of the supreme court. Huie v. Bailey, 16 Louis. 217; Gordon v. Nelson, Id. 324.
That is where the bill has been endorsed in blank by the payee. When after his blank endorsement there is a special endorsement by another person, making it payable to a certain person or order, should the bill get back to the person who made that special endorsement, he may consider himself as the endorsee of the payee and strike out the other endorsements, Smith &c. v. Clarke, 1 Peake's N. P. Cas. 295, 1 Esp.
80; Myers & Son v. Friend &c. 1 Rand. 12; or if, from the person who made that special endorsement, it get back to the payee, he may bring an action as if there had been no endorsement, Mitchell v. Fuller, 3 Harris 268.
At one time the omission of the words "or order" in the endorsement by the drawer was thought to render the endorsement restrictive: but it has long been settled otherwise. If the bill itself be payable to the payee or order, and so in its nature negotiable, though the payee endorse it to another, without adding the words "or order," the bill continues negotiable in the hands of the endorsee, and his endorsement to the plaintiff is sufficient. Edie v. East India Co. 1 W. Bl. 295, Burr. 1216; Bayley on Bills, 4 edi. 105; Tindal, C. J. in Cunliffe v. Whitehead, 3 Bingh. N. C. 828, 32 Eng. Com. Law Rep. 344.
But in the case of a note endorsed by the payee not in blank, but to another or his order, an endorsement by the special endorsee is generally necessary. A greater negotiability may have been given to the instrument by a blank endorsement of the endorsee, yet if that negotiability was again restricted by the special endorsement of another endorsee, a person who after such special endorsement receives the note is bound to shew that he comes within the authority comprised in it; he must deduce a title under the person to whose order it is made payable by that last special endorsement; he cannot strike out such special endorsement, and claim a property in the note under the blank endorsement. Myers & Son v. Friend &c. 1 Rand. 12; 1 Bingh. N. C. 828.
In Virginia, as elsewhere, it is admitted that if the payee's endorsement be in blank, the holders are entitled not only to strike out the names of the endorsers, subsequent to the payee, but to write over the payee's name an assignment to themselves; or without writing such assignment, the bills will be considered their property by their holding them and having it in their power to write it. Ritchie &c. v. Moore &c. 5 Munf. 395.
In New York, a note payable at the Mechanics Bank was endorsed in blank by the payee. Over his name there was written afterwards, when the note was presented at the Mechanics Bank, "pay to the order of W. Fisk, Esq., Cashier." Fisk had no interest in the note; it was sent to him merely to collect, and not being paid he sent it back to the plaintiffs, and they struck out the transfer to him and made the bill payable to themselves. Their right to do so was sustained. Bank of Utica v. Smith, 18 Johns. 239.
5. What sort of interest in the bill plaintiff must have.
The endorsee of a bill has a right of action on the custom of merchants, independently of any statute. Ridgway v. Farmers Bank, 12 S. & R. 266.
In New York, where a note endorsed in blank was delivered to T. L. & Co. as security for a debt due them, and the blank was filled up before the trial with the words "
pay the contents to T. L.," it was considered that the owner had a right to fill up the blank with what name he pleased; and the action in the name of T. L. alone was sustained. Lovell v. Evertson, 11 Johns. 52. The beneficial owner of a bill of exchange or negotiable note, which is payable to bearer, or is endorsed in blank, may, says Walworth, Chan., institute a suit thereon in a court of law, in the name of any one who is willing to allow his name to be used for that purpose; and where the defendant has no legal or equitable defence to the bill or note, as against the real owner thereof, he cannot be permitted to shew that the nominal plaintiff, in whose name the suit is so brought, is not the real party in interest. ton v. Rogers, 14 Wend. 580. Decisions on similar principles have been made in Massachusetts and Pennsylvania. Little v. O'Brien, 9 Mass. 423; Sterling v. Marietta Co. 11 S. & R. 181.
But in England the rule is rather stricter. True it has even there been said that an endorsement in blank gives a joint right of action to as many as agree in suing on the bill; and that if, by virtue of such endorsement, two or more sue, it is not necessary for them to shew that they were in partnership. Ord &c. v. Portal, 3 Camp. 239. But if the defendant shew that the bill, at the time of being endorsed in blank, was delivered to a firm, it is considered that the right to sue is in the firm; and that if the firm consist of three partners, all living when the action is brought, that action should not be in the names of only two of the partners. Mackell &c. v. Kinnear, 1 Stark. 499; 2 Eng. Com. Law Rep. 484.
As a person who has no interest in, or possession of, a bill cannot maintain an action upon it, it is a valid defence that the bill was not endorsed to the plaintiff, and that he is not the holder of it. Emmett v. Tottenham, 8 W. H. & G. 884. In Maryland, as in England, it is considered that there can be no right of action in one who has no interest in the bill, either as holder or owner. Whiteford v. Burckmyer &c. 1 Gill 147. When on a note there was a special endorsement by the payee, assigning the note to J. H. L. & Co., and an
action was brought on it in the name of the payee for their use, against the maker, without any proof of the payee having, after that endorsement, had actual possession of the note, except that it was filed in the cause, it was considered in Maryland that it did not sufficiently appear that the nominal plaintiff was the holder of the note; and the action was therefore defeated. Bowie v. Duvall, 1 Gill & J. 179.
It is, however, enough that the plaintiff is the holder of the bill-having the legal interest. It is no valid objection that the beneficial interest is in another. Mechanics Bank v. Hazard, 13 Johns. 333. Even in Maryland the courts will not enquire whether the plaintiff sues for himself, or as trustee for another, nor into his right of possession unless on an allegation of mala fides. Burckmyer &c. v. Whiteford, 6 Gill 16.
A house at Paris pressing for a remittance from one in America indebted to it, the American instructed a London house, in discharge of so much of its debt to the American, to remit to the Paris house, and accordingly a bill was bought and remitted to the Paris house. When the bill became due, the drawer having, on the ground of its not having been paid for, directed payment to be refused, the bill was protested. In an action by the Paris house against the drawers (who were the sellers) of the bill, it appeared that the American house, feeling bound in honour to indemnify the Paris house, had paid them the amount of the bill, and thereby become beneficially entitled to it; and the defendants insisted that the London house, in buying the bill, were agents of the American house, and that the latter was responsible for the. price. But this defence did not avail. For the London house were not agents in the sense necessary to make such a plea good. And, moreover, when the bill was dishonoured the Paris house were holders for value, and had then a legal right to sue the drawers. That right, the court of queen's bench was of opinion, they still retained, notwithstanding they had since been reimbursed by the American house: though the beneficial interest was in the American house, the legal interest was not transferred to it, but remained in the London house as trustees for the American house. Poirier &c. v. Morris &c. 2 El. & Black. 89, 75 Eng. Com. Law Rep. 89.
6. General rule as to nature of endorser's liability.
The promise of the endorser of a bill is that he will pay to the endorsee and those claiming under him if the acceptor does not pay to a person entitled to call on him for payment
of the bill when due. Pollock, C. B. in Walker &c. v. Macdonald, 2 W. H. & G. 532.
In like manner the endorsement of a note makes a new contract in case the maker of the note does not pay it. Lambert v. Oakes, 1 Ld. Raym. 443. He is liable conditionally for the payment, in case of a dishonour of the note at its maturity by the maker, and notice thereof to the endorser. Shaw, C. J., 3 Metcalf 506.
7. Endorser of a bill in the nature of a new drawer; but endorser of a note not in the nature of a new maker.
It has frequently been said that every endorser of a bill is in the nature of a new drawer. 1 Str. 442. It is, says Parke, B., part of the inherent property of the original instrument that an endorsement operates as against the endorser in the nature of a new drawing of the bill by him. 1 C. M. & R. 441. And it will not avail the defendant, that when he endorsed the bill he had no property in it. That is not necessary to render him liable to be sued upon it. His endorsement may have no operation with regard to prior parties; but as against him it is equivalent to the drawing of a new bill and operates to transfer that new bill. Penny v. Innes, 1 C. M. & R. 439.
The defendant's endorsement may be after a special endorsement by a payee making the bill payable to a firm, and yet, if the bill become the property of that firm, after the defendant's endorsement, they may sue him on his endorsement; the fact being that he never was the endorsee of the firm, nor was it ever intended to convey the property in the bill to him. S. C.
If the fact had been that the defendant was the endorsee of the firm, and again delivered the bill to them, then to avoid circuity of action the firm would not be allowed to recover against him. Certainly an action by the holder, against an endorser of a note, will be defeated by shewing that the plaintiff is one of a firm who endorsed before the defendant. the action could not be maintained against a subsequent endorser by a firm which stood as prior endorsers, so neither can it be maintained by one of the firm. Decreet v. Burt, 7 Cush. 551. And in this respect it is not perceived that there is any difference between a bill and a note.
There is a difference in some others. The maker of a negotiable note is viewed rather as an acceptor than a drawer. If the drawee accept a bill, and another person not a drawee accept it also, the latter cannot be sued as acceptor. Jackson