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it gives the like remedy to and for corporations and others as upon inland bills of exchange, it implies, that by the custom of merchants they might, in some cases at least, draw, indorse, accept, or sue upon bills of exchange.
But if the being parties to bills or notes were inconsistent with the purpose for which they were incorporated, that inconsistency might be a bar to any remedy by, or through, or against them, on a bill or note.
And English corporations, unless authorized by statute, cannot be parties to bills or notes of less than six months after date. (30)
And this applies to all English corporations; it is not confined to banking corporations. (30)
And where an English corporation is empowered by statute to raise money by notes for a special purpose, if it issue notes at less than six months' date, without stating therein that they were given
(30) Broughton v. the Manchester Water Works Company, 3 Barnw. and Alderson, 1. Action against defendant, as acceptors of two bills of exchange payable at three months after date. Demurrer: and the objection was, that they were not liable; they were incorporated for water-work purposes only. One of their acts authorized them to borrow to a limited extent upon bonds under their common seal; but no other power was expressly given, nor was such power necessary for the purposes for which they were established: and the court thought the bank acts (ante, p. 50) an answer to the action, because the acceptance made them debtors and owe money upon the bills,
for that purpose, the corporation may resist payment, on the ground that they were given for another purpose. (31)
And this will be a defence even against an innocent indorsee. (31)
Sect. 7.- Where a bill or note is drawn by an agent, executor, or trustee, he should take care, if he means to exempt himself from personal responsibility, to use clear and explicit words to shew that intention.
Thus, if a broker sell goods, and draw upon the buyer in favour of his principal, he will be liable upon the bill, if it be dishonoured, unless he use special words to prevent it; (32)
And may be sued there on by his principal. (32)
(31) Slark v. Highgate Archway Company, 5 Taunt. 792. Defendants were incorporated by 52 Geo. 3. c 146. (local and personal) and authorized to borrow money to complete their works; they gave a note under their common seal at two months after date for 1000l., payable to Nash or order it did not import to be for money borrowed to complete their works. Plaintiff sued thereon as indorsee. Defence, that it was given for Nash's accommodation, not to complete their works. Gibbs C. J. thought this no defence against an innocent indorsee who had paid the value, and the plaintiff had a verdict; but on a rule nisi for a new trial, the Court of Common Pleas, without assigning their reasons, granted a new trial.
(32) Lefevre v. Lloyd, 5 Taunt. 749. Defendant, as broker, sold cotton for plaintiff at two months' credit, and drew on the
So if an agent for A. draw upon B. in favour of C., though he direct B. to place the amount to A.'s debit, he will be personally liable to C. if the bill is not paid, though C. knew he was only agent for A., unless he uses proper words to prevent such liability. (33)
So if an agent employed to buy bills get them payable to himself and indorse them generally, he will be liable upon that indorsement even to his own employer (34); to have exempted himself he
seller for the amount in favour of plaintiff: the bill being dishonoured, plaintiff sued defendant on the bill; and Gibbs C. J. at the trial, held, that as defendant had put his name upon the bill, however imprudent that was, all the legal consequences of that act attached upon him, and verdict for plaintiff: and on motion for a new trial, the court agreed with him; for by drawing the bill, defendant removed from plaintiff all consideration of the buyer's responsibility. Rule refused.
(33) Leadbitter v. Farrow, Michaelmas, 1816, in B. R. Plaintiff wanted a bill upon London for 50%., and sent to defendant, whom he knew to be agent to the Durham Bank at Hexham : defendant drew a bill accordingly, "Pay to the order of Mr. Leadbitter 501., value received, which place to the account of the Durham Bank, as advised C. Farrow. To Messrs. A. and B. London." In an action thereon, the defendant urged that he was not personally liable, or at least that the plaintiff, who knew him to be only agent, could not sue him; but on a case reserved, the court held his signature pledged his own credit, and that only, and that he was therefore liable.
(34) Goupy v. Harden, Holt. 342. 2 Marsh. 404. 7 Taunt.159. Plaintiff employed defendant at a commission of 10s. per cent. to procure him bills on Portugal, and to transmit them to him in Paris: defendant got bills payable to his own order, and indorsed them generally, without restriction: plaintiff after
should have got the bills made payable to his employer, or should have introduced into his indorsement words to exclude his personal responsibility.
So if a man draw a bill or note as executor of J. S., and sign it in terms as such, yet if it is in a form which implies assets, or will procure forbearance, it will bind him personally. (35)
If an executor means to limit his responsibility, he should confine his stipulation, viz. to pay out of the estate; and if an executor indorse, it binds him personally. (36)
wards sued him on this indorsement, and defendant insisted that under the circumstances this indorsement did not make him liable to plaintiff; but on rule nisi, to set aside verdict for plaintiff, the court thought it did; for had defendant meant to exclude his liability, he should have given a qualified indorsement; and rule refused.
(35) Childs v. Monins and Bowles, 2 Brod. and Bingh. 460. Defendants signed this note, "As executors to J. S. we severally and jointly promise to pay plaintiff 2007. on demand, together with interest:" they were sued thereon, and then contended that it only bound them as executors; but on demurrer, the court were clear it bound them personally. It admitted assets, and tended to procure forbearance, and as a several note from each would bind the executor of whoever died first, and ultimately the executors of both; an effect it would not have, if it bound them as executors only.
(36) King v. Thom, 1 Term Rep. 487. The court held, that upon a bill payable to several as executors, they might sue as executors and, per Buller J., no inconvenience can arise from their indorsing the bill; for if they indorse, they are liable personally, and not as executors, for their indorsement would not give an action against the effects of the testator,
So if drainage or inclosure commissioners draw upon the banker appointed by the act, they may be personally liable, unless they use proper words to prevent it, though the bill imports to be drawn on the drainage or inclosure account, and directs the money to be placed to their account as commissioners. (37)
So if a bill is addressed to a man as cashier of a particular company, though it direct him to place it to the company's account, an acceptance upon it by him will bind him personally, unless he uses special words to prevent it. (38)
(37) Eaton v. Bell, Michaelmas, 1821. 5 Barnw. and Ald. 34. Defendants were inclosure commissioners, and plaintiff the banker under the act; the act authorized the commissioners to raise money by rate, and directed that persons advancing money for the purposes of the act should be repaid with interest
out of the monies the commissioners should raise: defendants drew on plaintiff in this form: "Messrs. E.-Pay A. or bearer, 40%. on account of the public draining, and place the same to our account as commissioners of the Frodsham inclosure:" Plaintiff sued defendants personally; and Dallas C. J. left it to the jury whether credit was given by plaintiff to defendants personally, or to the fund they had to raise the jury thought it given to defendants personally; and, on case, the court thought them right, and plaintiff had judgment.
(38) Thomas v. Bishop, Ann. 1 Str. 955. A bill for 2001. was drawn upon the defendant by the description of Mr. H. Bishop, cashier of the York Buildings Company, at their house in Winchester-street, London; and the bill directed him to place the 200l. to the account of the company. The defendant accepted the bill; but on being sued insisted that the acceptance did not bind him personally, and gave in evidence that the letter of advice from the drawer of the bill was sent to the