But if a man holds a bill or note, not in his own right, but as a trustee, his bankruptcy will not pass the right to transfer to his assignees. (34)

And if partners hold a bill or note, as trustees, the bankruptcy of one of them will not preclude him and the others from transferring it. (34)

[If after a commission has issued against a bankrupt and before he obtains his certificate, a note be given to him payable to his order, in payment of a debt contracted previously to the bankruptcy, his endorsement will pass a good title to the endorsee, except perhaps against the assignees. (a)]

present action was brought by Thomason, and the assignees of Underhill and Guest. The house of Thomason, Underhill, and Guest was still indebted to the defendants beyond the amount of the sum now sought to be recovered.-The plaintiffs were nonsuited. But on a rule nisi for a new trial, the court (Lord Ellenborough C. J. absente) held that the endorsement, having been made after an act of bankruptcy, though before the issuing of the commission and for the purpose of paying a partnership debt, was invalid; and they inclined to think that, this action being brought to recover the money received on the bill, which had been thus wrongfully endorsed, the defendants had no right to set off their demand upon the firm, against this claim by Thomason and the assignees. Rule absolute.

(34) Ramsbottom and others v. Cator, 1 Stark. 228. J. and M. Hervey were partners as bankers; defendant delivered them a bill that they might get it discounted; they passed it to plaintiffs, their bankers; but before they did so, J. H. committed an act of bankruptcy, upon which a commission afterwards issued: it was urged for defendant that the bankruptcy of J. H. destroyed his and his partner's right to pass away the bill; but Lord Ellenborough held, that as the Herveys held it upon a special trust, to get it discounted, and not in their own right, no interest in it passed to the assignees of J. H., and though he doubted whether plaintiffs had an interest beyond what the Herveys had, he allowed them to take a verdict, and gave the defendant leave to take the opinion of the court upon the point.-But the defendant did not move it.

[See also Thompson v. Giles, 3 Dow. & Ryl. 733: S. C. 2 Barn. & Cres. 422. A customer was in the habit of endorsing and paying to his bankers bills of exchange, not due, which if approved were immediately entered to his credit as "bills" (not as "cash") to their full amount, and he was then at liberty to draw for that amount by checks on the bank. The bankers paid away such bills to their customers, as they thought fit. But there was no evidence of an agreement by the customer, that when the bills were paid in they should become the bankers' property. The bankers becoming bankrupt, it was held that the customer might maintain trover against their assignees for bills paid in by him, and remaining in specie in the hands of the bankers at the time of their bankruptcy, the cash balance, independently of the bills being in the customer's favor at the time of the bankruptcy.]

[(a) Bayley J. said, "As against this defendant (the maker of the

If the person who has a right to endorse a bill or note, deliver it over to another for a valuable consideration, and forget to endorse it, he (35) may endorse it after he has become a bankrupt, and the right in it will pass to the person to whom he so delivered it.

So the right to endorse will not devolve upon a bankrupt's assignees, if (36) neither he nor they would have any right to demand payment.

Therefore if a bankrupt draw a bill payable to his own order, having at the time (36) no effects in the hands of the drawee; or if, having effects, he draw it for a sum (37)

note) and as against all the world except the assignees, the bankrupt was a person competent to make the endorsement." Drayton v. Dale, 3 Dow. & Ryl. 534. 2 Barn. & Cres. 293.]

(35) Smith and another v. Pickering, Peake, N. P. C. 50. Richardson and Hill drew a bill on the defendant, payable to their own order, which the defendant accepted. The drawers delivered this bill to the plaintiffs for a valuable consideration, but forgot to endorse it. They afterwards became bankrupts, and then endorsed it. The plaintiffs, as endorsees, now sued the defendant as acceptor. Lord Kenyon was clearly of opinion that the endorsement was good, and the plaintiffs had a verdict.

[See also Baker v. Arnold, 3 Cain. R. 279, an action by an endorsee, in which Livingston J. expressed his opinion that where a note had been delivered before it became due, the endorsement, even if made after it became due, should be regarded as relating back to the time of its actual delivery to the endorsee. See also White v. Kibling, 11 Johns. R. 128, in which the same question is raised by the counsel, though the court expresses no opinion upon it.]

(36) Arden v. Watkins, 3 East's Rep. 317. On the 5th of October, 1801, Lewis Jones committed an act of bankruptcy, on which a commission issued on the 31st December, 1801. On the 4th of December, 1801, he drew a bill on Watkins for £100, payable to his own order, and endorsed it to the plaintiff, who paid him the full value. Watkins owed Jones nothing, but accepted the bill to enable him to raise money upon it, and Jones deposited a lease with him as an indemnity: the assignees insisted upon a restoration of the lease, and Watkins refused to pay the bill.-Action on the bill and reference. The arbitrator awarded against Watkins, but stated the facts specially, to enable him to take the opinion of the court. After a rule nisi to set aside the award, cause shewn, and time taken to consider, the court was clear that the defendant was liable: that as Jones had no effects in Watkins's hand, no right to endorse devolved on his assignees, and that therefore his endorsement was effectual, and transferred the property to the plaintiff. Rule discharged.

(37) Willis v. Freeman and another, 12 East's Rep. 656. In an action by the endorsee of a bill against the acceptors, a verdict was found for the plaintiff subject to the opinion of the court upon a case. case stated, that Anderson, the drawer, being indebted to the plaintiff

The

exceeding their amount, and the bill be accepted for his accommodation; his endorsement will, in the former case, confer a good title as to the whole sum mentioned in the bill; and in the latter, as to such sum as is not covered by the effects.

So if a trader get a bill by fraud, and become bankrupt, the bill will belong, not to his assignees, (38) but to the person from whom he obtained it; at least, if he promised, before he became bankrupt, to return it.

So if a banker who has a lien on a bill or note for his general balance, delivers it to his customer when it is due, that he may obtain payment, and the customer become bankrupt, the bill or note will nevertheless belong not to the assignees but to the banker. (39)

in more than £2000 and being insolvent, proposed to pay the plaintiff a composition of 13s. 6d. in the pound, together with the costs of an action which had been brought by the plaintiff against him, by a bill upon the defendants. This proposal being acceeded to, Anderson applied to the defendants to accept a bill for £1400, for his accommodatian. The defendants accepted the bill, drawn on the 5th of July, and payable on the 10th of November, 1809, having in their hands effects of Anderson's to the amount of £388 16s. 8d. Anderson had committed a secret act of bankruptcy on the 7th of March, 1809, upon which a commission issued on the 25th of July. The Court of King's Bench held, that to the extent of £888 16s. 8d. the defendants had a right to resist payment on the ground of their being answerable for that amount to the assignees, to whom these funds devolved upon the act of bankruptcy; and that therefore the endorsement by Anderson to that extent was inoperative: but as to the surplus (£511 3s. 4d.) for which the acceptance was accommodation, the case of Arden v. Watkins was in point to shew that the endorsement was valid. And they held that the law in this respect had not been altered by the 49th Geo. 3. c. 121. § 8. They therefore ordered the verdict to be entered for this reduced sum of £511 3s. 4d.

(38) Gladstone v. Hadwen, 1 Maule, 517. Sill and Co. got bills from Hadwen, under color of giving him a security upon some coffee to which however they had no title: on being pressed by Hadwen, they promised to return him the bills, which were on their way from London to Liverpool; but before they arrived, Sill and Co. committed acts of bankruptcy upon which a commission afterwards issued: when the bills arrived, they were delivered to Hadwen, upon which Sill and Co.'s assignees brought trover; but on case and time to consider, the court held that they could not sue for what a court of equity would not have allowed them to keep; and thaí as Hadwen would never have parted with the bills but for a false pretence and fraud, a court of equity would have compelled the assignees, who claimed under Sill and Co., had they got the bills, to have delivered them up to Hadwen.

(39) Bruce v. Hurley, 1 Stark. 23. Young and Co. bankers at Taunton, sent to plaintiffs, their town bankers, a note of defendant's at twe

If a bill or note is made payable to a person who is merely an agent in the transaction, if he endorse generally, without using words to prevent his liability, he will be bound personally. (40)

If an executor or administrator endorse, he binds himself personally, not the assets in his hands. (41)

Sect. 3. The transfer of a bill or note may be made either before the expiration of the time limited for its payment, or, unless (42) the sum payable thereby be under five pounds, (43) afterwards.

But a man who takes a bill after it is due, takes it subject to all the objections and equities to which it was liable in the hands of the person from whom he takes it. (44)

months after date. The day before it became due, plaintiffs sent it to Young and Co. at Taunton, that they might obtain payment from defendant; defendant did not pay it, and whilst the bill was in their hands, Young and Co. became bankrupts. Young and Co. had overdrawn plaintiffs, and plaintiffs sued defendant on this note; and as plaintiffs only sent the note to Young and Co. that they might obtain payment for plaintiffs and act as their agents in that respect, Lord Ellenborough held plaintiffs entitled to recover, and they had a verdict accordingly. (40) See Goupy v. Harden, ante, p. 49.

(41) See King v. Thom., ante, p. 50.

(42) 17 Geo. 3. c. 30. § 1.

(43) Dehers v. Harriott, 1 Show. 163. A bill was endorsed to the plaintiff after it was due, and he had judgment without any objection on this ground.

Mutford v. Walcott, Lord Raym. 575. Holt C. J. said, he remembered a case where a bill was negotiated after the day of payment, and he had all the eminent merchants in London with him at his chambers, and they all held it to be very common and usual, and a very good practice.

(44) Taylor v. Mather, B. R. E. 27 Geo. 3. 3 Term Rep. 83, n. Endorsee of a note against the maker. It appeared to have been endorsed after it was due, and there were many circumstances which led the court and jury to conclude it had been unfairly obtained, upon which the jury found for the defendant. A new trial was refused upon the merits, and per Buller J., "It has never been determined that a bill or note is not negotiable after it is due, but if there are any circumstances of fraud in the transaction, and it is endorsed to the plaintiff after it is due, I have always left it to the jury upon the slightest circumstance to presume that the endorsee was acquainted with the fraud." The rest of the court concurred in this opinion.

Brown v. Davies, 3 Term Rep. 80. Davies drew a note payable to Sandall or order; Sandall endorsed it to Taddy, and he had it presented and noted for non-payment. Davies then paid the money to Sandall

And if such person were agent only, to receive the money for his principal, the person to whom he passes it will be accountable to the principal for whatever he receives thereon, whether it be money,

Or a new bill. (45)

and he took up the note from Taddy, but instead of returning the note to Davies, endorsed it to Brown. Brown thereupon sued Davies, and on Davies's offering to prove these facts, Lord Kenyon thought they would not amount to a defence, unless it could be proved that Brown knew them when he took the note, and he rejected the evidence; but upon a rule nisi for a new trial, and cause shewn, Lord Kenyon said, he thought there ought to be further inquiry; it did not strike him at the trial that the note had been noted before Brown took it, and that that circumstance ought to have awakened Brown's suspicion. Ashhurst and Builer Js. thought that the party taking a note after it was due, was to be considered as taking it on the credit of the person from whom he received it, and that whatever would be a defence against the giver would be a defence against the receiver; upon which Lord Kenyon said, he agreed with that, if the note appeared on the face of it to have been dishonored, or if knowledge could be brought home to the endorsee that it had been so; but otherwise he was not prepared to go that length. Grose J. said, if collusion could be proved between the defendant and Sandall, the defendant would not be entitled to insist on the objection; but as the case then stood he thought there ought to be a new trial. Rule absolute.

[Banks v. Colwell, Launceston Spring Assizes, 1788, before Buller J. cited 3 Term Rep. 81. Endorsee of a note payable on demand, against the maker. The note was given for smuggled goods; part of it was paid; and it was not endorsed to the plaintiff till a year and a half after it was given; no privity was brought home to the plaintiff, but Buller J. was clearly of opinion he ought to be nonsuited; and he said it had been repeatedly ruled at Guildhall, that if a bill or note was endorsed over after it was due, the endorsee took it on the credit of the endorser, and stood in his situation.

Brown v. Turner, 7 Term Rep. 630. Pritchard paid some stockjobbing differences for Turner, and drew on him for the amount; Turner accepted the bill, and after it became due Pritchard endorsed it to the plaintiff for a prior debt. Lord Kenyon however thought that as Pritchard could not have recovered on the bill, the plaintiff could not, and directed a verdict for the defendant; and the court was clearly of opinion that the direction was right, and refused a rule nisi for a new trial. See also Good v. Coe, cit. 7 Term Rep. 427. 429.

cases.

The principle stated in the text is fully recognized in many American Gold v. Eddy, 1 Mass. R. 1; Blake v. Sewell, 3 Mass. R. 556; Hemmenway v. Stone, 7 Mass. R. 58; Williams v. Matthew, 3 Cowen, 252; O'Callaghan v. Sawyer, 5 Johns. R. 118.j

(45) Lee v. Zagury, 8 Taunt. 114. Sebag had a bill accepted by defendant, overdue; he sent it to White, that White's correspondent might get the amount for Sebag: White's correspondent endorsed it to Vidal for a debt he owed Vidal, and Vidal not being able to obtain the money, got a new bill from defendant for the amount, and endorsed it