An endorsement is restrictive, which has express words making it so, or is made in favor of a person who cannot make a transfer.

Thus an endorsement in these words, "Pay the contents to I. S. only," "to I. S. (12) for my use;" or (at least when addressed to the drawee) (13) “the within must be credited to I. S.," is restrictive.

An endorsement, "Pay the contents to A. B. on my being gazetted ensign in a given time" is restrictive, and will give no subsequent endorsee a right, unless he is so gazetted. (14)

An endorsement, "Pay to A. or order, for account of B.,"

(12) Per Wilmot J. Burr. 1227. Blackst. 299. The payee may check the currency of a bill or note by giving a bare authority to receive the money; as "Pay to A. for my use;" and per Lord Hardwicke in Snee v. Prescott, 1 Atk. 249. Bills and notes are frequently endorsed in this manner, “Pray pay the money to my use,” in order to prevent their being filled up with such an endorsement as passes the interest.

(13) Ancher v. Bank of England, Dougl. 615. 637. A bill was drawn by the plaintiffs upon Claus Heide and Co. payable to Jens Mostue or order. Mostue endorsed it to this effect: "The within must be credited to Captain M. L. Dahl, value in account," and sent it to Claus Heide and Co. who credited Dahl for the amount, and gave notice to Dahl and the plaintiffs that they had done so; an endorsement by Dahl was afterwards forged upon the bill, and the bank discounted it. Claus Heide and Co. having become insolvent, Fulgberg paid it for the honor of the plaintiffs, and upon the ground that the endorsement had restrained the negotiability of the bill, they brought an action for money had and received against the bank: Lord Mansfield directed a nonsuit, but upon a rule to shew cause why there should not be a new trial, and cause shewn, Lord Mansfield, Willes, and Ashhurst, Js. thought the endorsement restrictive, and that the plaintiffs were entitled to recover; but Buller J. thought otherwise; upon which Lord Mansfield said, the whole turned on the question, whether the bill continued negotiable? and if they altered their opinion, they would mention the case again; but it never was mentioned afterwards, and upon a new trial Lord Mansfield directed the jury to find for the plaintiffs, which they did.

(14) Robertson v. Kensington, 4 Taunt. 30. Bill payable to plaintiff or order he endorsed it, "Pay the within to Clerk and Ross, or order, upon my name appearing in the Gazette as ensign in any regiment of the line between the 1st and 64th, if within two months from this date :" the bill was at forty-five days after date : defendants accepted it after it was so endorsed: Clerk and Ross endorsed it over, and after passing through several hands it, came to the bank, and them defendants paid: plaintiff's name was never in the Gazette, and he therefore insisted the payment by defendants was wrongful, and that he was entitled to the money. He accordingly brought an action, and on a case reserved the court was of that opinion, and decided for the plaintiff.

will not prevent A. from endorsing for value, if it be under circumstances which may induce a belief that such value is to be applied to B.'s use; (15)

But it will from endorsing by way of pledge for the private debt of A; (15)

Or for advances to A. on his own account.

But an endorsement is not restrictive, merely because it expresses what is the consideration for it.

Therefore this endorsement, "Pay the contents to I. S., being part of the consideration in a certain deed of assignment, executed by the said I. S. to the endorser and others," is (16) not restrictive.

And the (17) mere omission of words to give a power of transfer will not make an endorsement restrictive.

(15) Treuttel v. Barandon, 8 Taunt. 100. Two bills were endorsed "Pay to J. P. De Roure, Esq. or order, for account of Messrs. Treuttel and Wurtz:" De Roure endorsed them, and gave them to defendants as a security on his own account: he was indebted to them at the time to more than the value of the bills, and they afterwards advanced him money on these bills: De Roure failed, and Treuttel and Wurtz brought trover for the bills. Gibbs C. J. thought this endorsement sufficiently intimated that the bills were not the property of De Roure, and under his direction, verdict for plaintiffs: and on rule nisi for new trial, the court thought, that though he might not be restricted from discounting, and might pass a good title to a person who might suppose they were passed to the use of plaintiffs, he could not pledge them on his own account, and rule discharged.

(16) R. Potts v. Reed, 6 Esp. N. P. C. 57.

(17) Moore v. Manning, Com. 311. A note was drawn by the defendant payable to Statham or order; Statham endorsed it to Witherhead, but did not add "or to his order," and Witherhead endorsed it to the plaintiff. The defendant contended, that as there were no express words to authorize Witherhead to assign it, he had no such power, but the whole court resolved, that as the bill was at first assignable by Statham as being payable to him or order, and as all Statham's interest was transferred to Witherhead, the right of assigning it was transferred also, and the plaintiff had judgment.

Acheson v. Fountain, Str. 557. Bull. N. P. 275. A bill was payable to Abercrombie or order, and he endorsed it thus, "Pray pay the contents to Louisa Acheson." This being stated in the declaration as an endorsement to Acheson or order, it was objected that it was a fatal variance; but upon consideration the whole court was of opinion against the objection, because this was the legal import of the endorsement, and Louisa Acheson was authorized by it to make an endorsement over.

Edie v. East India Company, Blackst. 295. Burr. 1216. A foreign bill drawn upon the East India Company was payable to Campbell or order; Campbell endorsed it to Ogilby, but did not insert the words "or order," or any similar words in the endorsement; Ogilby endorsed it to

A restrictive endorsement precludes the person in whose favor it is made from making a transfer so as to give a right of action against either the person making it, or any of the antecedent parties, and if payment is made to the person to whom such transfer is made, the party paying may, under circumstances, be liable to pay the money a second time (18), or the person receiving it may be liable to refund. (19) (a)

the plaintiffs. It was insisted that under the endorsement to Ogilby he had no authority to endorse it over, and upon that ground the jury found for the defendants; but upon a rule to shew cause why there should not be a new trial, and cause shewn, the court was clear, that as the bill was originally in its nature negotiable, it continued so in the hands of Ogilby, and that his endorsement was good; and a new trial was granted.

(18) Vide Robertson v. Kensington, ante p. 69. note.

(19) Vide Ancher v. Bank of England, ante p. 69. note.

[ (a) The Supreme Court of Massachusetts, in one case, seem to be of opinion that a guaranty endorsed on a note, by the promisee, destroys the negotiable quality of the instrument; and that no action can be maintained against him as endorser; or as guarantor, except by the original party to the guaranty. Binney holding a note of Fales, payable to Binney or order, some time after the note became payable, made and signed the following endorsement. "Dec. 13th, 1805. I guaranty the payment of the within note in 18 months, provided it cannot be collected of the promisor before that time.' Tyler sued Binney upon this guaranty; but it appeared that Tyler was not the party to whom the guaranty was originally made. Sewall J. delivered the opinion of the Court. "The present plaintiff was not the party to the guaranty or assignment, when it was made: and no evidence has been offered of any subsequent privity or assent between him and the defendant. The guaranty, taken independently of the note, is a promise not negotiable, being conditional and not absolute; and connected with it, the supposition is altogether unreasonable and improbable, of an unlimited currency being intended for the note itself at the risk of the endorser." Nonsuit. Tyler y. Binney, 7 Mass. R. 479.

But in a subsequent case the same court held that such an endorsement did not destroy the negotiable quality of the instrument.

Prince holding a note of Turner payable to himself, endorsed two days after the making of the note, "I guaranty the payment of this note within six months, Andrew H. Prince," and passed it to Faulkner, who passed it Upham. Upham sued Prince as endorser. "Per Curiam. We are all of opinion that the note did not lose its negotiability by this special endorsement, any more than it would, if it had been endorsed with the words, without recurrence to the endorser.' The defendant's engagement amounts to a promise that the note should at all events be paid in six months. Now this promise may not be assignable in law; and yet the note itself may be assignable by the party to whom it was so transferred, so that upon non-payment of it by the promiser, the holder would have a right of action against Prince." Defendant defaulted. Upham v. Prince, 12 Mass. R. 14.]

[An endorsement to pay to A at his own risk does not restrain the negotiability of a bill or note (a); nor an agreement written on a bill over the name of the endorser to pay damages in case the bill is protested. (b)]

An (20) endorsement cannot be made for the transfer of less than the full sum appearing to be due upon the bill or

note.

Sect. 2.-A transfer by endorsement will convey no title, except against the person making it, unless it is made by him who has a right to make the transfer: a transfer by delivery may.

Therefore in case of a loss by theft or accident, if the bill or note be assignable by mere delivery, the thief or finder may (21) confer a title by transferring it; if it be assignable by endorsement only, he (22) cannot.

[(a) Rice v. Stearns, 3 Mass. R. 225. ]

[(b) Lajus, payee of a bill of exchange, endorsed it "should the within exchange not be accepted and paid agreeably to its contents, I hereby engage to pay the holder in addition to the principal 20 p. c. damages. Dominique Lajus." In an action against the drawee, Parsons C. J. delivered the opinion of the Court. "The endorsement is evidence of a transfer of the bill, without naming the endorsee; and in this respect the endorsement may be considered as general, and a bona fide holder may fill it up, by inserting above the express stipulation a direction to pay the contents to his order for value received." The case turned on another point. Blakely v. Grant, 6 Mass. R. 386.]

(20) Hawkins v. Cardy, Ld. Raym. 360. Carth. 466. 12 Mod. 213. Salk. 65. In an action upon a bill drawn by the defendant for £46 19s. payable to Blackman or order, the declaration stated that Blackman endorsed £43 4s. of it to the plaintiff; the defendant pleaded an insufficient plea, upon which the plaintiff demurred; but the whole court held the declaration bad, because the bill could not be endorsed for less than all the money due thereon, and the plaintiff discontinued his action. And per Gould, J. in Johnson v. Kennion, 2 Wils. 262. where the drawer of a bill has paid part, you may endorse it over for the residue; otherwise not, because it would subject him to a variety of actions.

[Action against the endorser of a note. By one endorsement he had assigned part of the sum mentioned in the note, and the residue by another endorsement. The court held that the action could not be supported, on the ground that an endorsement for part of a note or bill is bad; and if so, these two vitious endorsements could never constitute a good one. Hughes v. Kiddell, 2 Bay, 324. ]

(21) Anon. Ld. Raym. 738. Salk. 126. 3 Salk. 71. B. lost a bank bill payable to A. or bearer; C. found it, and assigned it for a valuable

If a bill or note transferable by delivery be lost, the loser should give immediate notice thereof to the drawee, or persons who are to pay it. (23)

And if such persons afterwards pay it to a person who has

consideration to D. who got a new bill for it from the bank. Trover was then brought against D. for the first bill, but by Holt C. J. “ the action will not lie against him, because he took it for a valuable consideration, though it would against C., as he had no title; but payment to C. would have indemnified the bank.”

Miller v. Race, Burr. 452. A bank note payable to William Fenney, or bearer, was stolen out of the mail in the night of the 11th of December, 1756, and on the 12th came to the hands of the plaintiff for a full and valuable consideration, in the usual course of his business, and without any knowledge that it had been taken out of the mail; he afterwards presented it at the bank for payment, and the defendant, being one of the clerks, stopped it, upon which an action of trover was brought; and upon a case reserved upon the point, whether the plaintiff had a sufficient property in the note to entitle him to recover, the court was clear in opinion that he had, and that the action was well brought. Vide Lawson and others v. Weston and others, 4 Esp. N. P. C. 56.

Grant v. Vaughan, Burr. 1516. Vaughan gave Bicknell a draught upon his banker payable to " Ship Fortune, or bearer." Bicknell lost it, and the plaintiff afterwards took it, bonâ fide, in the course of trade, and paid a valuable consideration for it: the banker refused to pay it, upon which the plaintiff brought this action against Vaughan. Lord Mansfield left it to the jury to consider, 1st, whether the plaintiff came to the possession of the bill fairly and bonâ fide; and 2dly, whether such draught was in fact and practice negotiable; and the jury found for the defendant: but upon an application for a new trial, and cause shewn against it, the Court was clear that the second point ought not to have been left to the jury, because it was clear that such draughts were negotiable, and if the jury thought the plaintiff took the note fairly and bonâ fide, of which there appeared to be no doubt, he was entitled to recover. A new trial was accordingly granted, in which the plaintiff recovered the money. Peacock v. Rhodes, Dougì. 611. 633. ante, p. 67. note (9.)

By 9 & 10 W. 3. c. 17. § 3. "If any inland bill be lost, or miscarry within the time limited for its payment, the drawer shall, on security given upon request to indemnify him if such bill shall be found again, give another bill of the same tenor with the first." And it should seein that the equity of this statute would comprehend endorsements also, and that the 3 & 4 Anne, c. 9. (which gives the like remedies upon notes as were then in use on inland bills) would extend it to notes. See Walmsley v. Child, 1 Ves. Sen. 341. and see post, Chap. IX., in what cases an action may be maintained, where a bill or note has been lost.

(22) In this case, however, it is advisable for the loser, in order to guard against the forgery of his endorsement, to give immediate notice of the loss to all the antecedent parties, and if payment has been made before such notice could be given, to apprise the payee thereof without delay.

See the case of Smith and another v. Shepherd, in Chitty on Bills.