The rule as to bills and notes when taken after they are due, is in general applicable also to (52) checks upon bank

ers.

But it will not apply to such checks where they appear to have been issued long after their date. (52)

A bill or note cannot be (53) endorsed or negotiated af

that the bill had been accepted for a debt contracted in a smuggling transaction, and that though it had been endorsed for value before it became due to a bonâ fide holder, yet that it had been endorsed by him to the plaintiffs after it was due; and it was contended that having been so endorsed to the plaintiffs, it was competent to the defendant to set up the illegality of the consideration as a defence, in like manner as if the action had been brought by the payee. But Lord Ellenborough held, that if the plaintiffs' endorser might have maintained an action upon the bill, the circumstance of the endorsement to them having been made after the bill had become due, was insufficient to let in the proposed defence. And the court of King's Bench concurred in opinion with his lordship.

(52) Boehm v. Sterling, 7 Term Rep. 423. Muilman lent the defendant his acceptance for £2444 14s. at three months, and the defendant gave Muilman a check upon his banker for the amount, dated 17th of Feb. 1796. The year was perhaps intended for 1797. On the 20th of January Muilman gave this check to the plaintiff in payment of an old debt. Muilman died before his acceptance became due, and the defendant was obliged to take it up. In an action upon the check, the defendant urged that Muilman could not have sued him upon this check, and that therefore the plaintiff could not, because he took it so many months after it was dated. Lord Kenyon left it to the jury whether the plaintiff took it bonâ fide, and without knowing the circumstances under which Muilman held it. They found for the plaintiff. And on a rule nisi for a new trial, and cause shewn, Lord Kenyon admitted that it was to be considered as a rule that the person who takes a bill after it is due, is subject to the same equity as the party from whom he took it, though the bill did not appear upon the face of it to have been dishonored; and he thought there was no distinction in this respect between checks upon bankers and bills of exchange: but as the defendant had not issued this check until nine months after it was dated, he thought it was not competent to him to object to the time when the Plaintiff took. it; the other judges agreed that the rule mentioned by Lord Kenyon was to be considered as settled, but for the reasons given by Lord Kenyon that it did not bear upon this case. Rule discharged.

R. acc. Tinson v. Francis, 1 Campb. N. P. C. 19.

(53) Beck v. Robley, B. R. Tr. 14 Geo. 3. cited 1 H. Blackst. 89 n. Brown drew a bill upon Robley, which Robley accepted, payable to Hodgson or order; Robley did not pay it when it was presented, upon which Brown took it up; Brown afterwards endorsed it to Beck, and Beck brought an action upon it against Robley; but the jury thought that when Brown took up the bill, its negotiability ceased, and found for the defendant; and on a rule nisi for a new trial, the court thought the jury right, and Lord Mansfield said, "When a draught is given payable to A. or order, the purpose is, that it shall be paid to A. or or

ter it has been once paid, if such endorsement or negotiation would make any of the parties liable who would otherwise be discharged.

But an endorser who pays a bill, may endorse or negotiate it, because his endorsement or negotiation will make no person liable but himself, and those whom he might sue. (54)

der; and when it comes back unpaid, and is taken up by the drawer, it ceases to be a bill. If it were negotiable here, Hodgson would be liable, for which there is no color."

(54) Callow v. Lawrence, 3 Maule. 95. Pywell drew on defendant, payable to his own order, and endorsed to Taylor; defendant accepted the bill, but did not pay it; Pywell took it up, and endorsed it to plaintiff. It was urged, that after Pywell had once paid it he could not endorse it, its negotiability was at an end; but on cause shewn the court were clear that Pywell's payment did not terminate its negotiability, because his endorsement would make no person liable but himself and defendant, and defendant had never been discharged. Rule discharged. [It was formerly held in Massachusetts that a note or bill once paid ceased to be negotiable. See Blake v. Sewell, 3 Mass. R. 556; Boylston v. Greene, 8 Mass. R. 465; and Emerson v. Cutts, 12 Mass. R. 78. But the doctrine stated in the text is now fully established.

The defendants were sued as makers of a note payable to Littlefield, and endorsed by him. Littlefield paid the note at maturity, and afterwards passed it to the plaintiff Guild. The plaintiff was nonsuited at the trial subject to the opinion of the court. Parker, C. J. delivered the opinion of the Court. “In England at this day, the proposition which has been received here without qualification, that a negotiable note once paid, cannot be transferred, is restrained to cases, where by such transfer some party to the bill or note might be prejudiced, or troubled with a suit, who ought to be discharged. As if there be several endorsers, none shall be allowed to transfer it but the last: because if the note is taken up by any prior endorser, and again put in circulation by him, the subsequent endorsers may be exposed to a suit by the new assignee. But where no such consequence will follow, an assignment by the party taking up the bill is lawful, and an assignee may maintain an action upon it in his own name." The court considered the distinction a correct one, and granted a new trial, overruling the cases of Blake v. Sewall, and Boylston v. Greene, supra. Guild v. Eager, 17 Mass R. 615.

So in New York it has been held that the negotiability of a note is not impaired by its being paid and taken up by an endorser, where no party who was not at all events bound to pay it, could be sued in consequence of its being again put in circulation. Havens v. Huntington, 1 Cowen, 387. See also Williams v. Matthews, 3 Cowen, 252. The same doctrine is recognised in Maine. Mead v. Small, 2 Greenleaf, 207.

In a case in N. Hampshire, the court take the position generally, that "it is very clear that where a note has once been paid it ceases to be negotiable." But there were other sufficient grounds for judgment in favor of the defendant. Bryant v. Ritterbush, 2 N. Hamp. R. 212.]

And if a bill or note is paid before it is due, and nothing done upon it to mark such payment, an endorsement afterwards before the time it would have become due, will give the endorsee, if he take it bonâ fide and for a valuable consideration, the same right as if there had been no such payment. (55)

[But if the endorsee, at the time he receives the note, knows that it has been paid by the maker, the endorsee cannot maintain any action upon it against the maker. (a)]

If a (56) man endorse a bill or note before the sum or

(55) Burridge v. Manners, 3 Campb. 194. Four days before a note became due, some person went to the banker's where it lay, and paid it, and carried it away; it was not cancelled, nor any minute made upon it to denote such payment; within the four days it was endorsed bonà fide, and for valuable consideration, to plaintiff, and in an action by him against the payee this payment was relied on, and it was urged that after payment it could not be negotiated; sed per Lord Ellenborough, that means payment in due course, not payment by anticipation; had the note been due before plaintiff took it, he would have taken it with all its infirmities, but here was nothing to awaken his suspicion; this payment does not extinguish it more than discounting would; whilst its time is running, it remains negotiable. Verdict for plaintiff.

[In Webster v. Lee, 5 Mass. R. 334, C. J. Parsons says, that "in an action by an endorsee of a note against the maker, the law admits the defendant to prove payment before the endorsement." See also Baker v. Wheaton, 5 Mass. R. 509. But this expression must be restricted to the case of an endorsement after the note becomes due. ]

[(a) White v Kibling, 11 Johns. R. 128. ]

(56) Russell v. Langstaff, Dougl. 496. 514. The defendant, to accommodate Galley, endorsed his name on five copper-plate checks, maɗe in the form of promissory notes, but in blank, without any sums, dates, or times of payment being mentioned therein, and delivered them to Galley; Galley filled them up as he thought fit, and the plaintiff discounted them; the plaintiff knew the notes were blank at the time of the endorsement; Galley not paying them when they became due, the plaintiff brought this action. Hotham, B. before whom the cause was tried, was of opinion, that as the notes were incomplete when the defendant endorsed them, no subsequent act of Galley could make them otherwise, because that would alter the effect of the defendant's endorsement, and he accordingly directed a verdict for the defendant; but upon an application for a new trial, and cause shewn, Mr. Wallace, the attorney-general, gave up the point, though Mr. Lee afterwards argued it, and Lord Mansfield said, "Nothing is so clear as the point; the endorsement on a blank note is a letter of credit for an indefinite sum; the defendant said, trust Galley to any amount, and I will be his security; it does not lie in his mouth to say, the endorsements were not reguJar." A new trial was accordingly granted, and a verdict having been found for the plaintiff in a similar action before Lord Mansfield, the defendant submitted in this, without going to a second trial.

time of payment be mentioned therein, he will be precluded from saying that his endorsement was prior to the completion or issuing of the bill or note, and this though the holder knew when he took it in what state the bill was at the time of the endorsement.

[So if a person write his name on a blank paper to be used as an endorsement of a note to be written on the other side, and the paper thus endorsed be obtained from him by fraud, and a different note from the one intended to be written on the other side, he will be liable as endorser to a bonâ fide holder for a valuable consideration. (a)]

[Violett endorsed a blank paper with intent to have a promissory note written on the other side, it was afterwards filled up as intended. The court held that Violett was liable as endorser of the note, and " that he was concluded from saying or proving that it was not filled up when he endorsed it." Violett v. Patton, 5 Cranch, 142, ]

[(a) Sullivan and Co. being about to be absent from Boston, left with a clerk a number of papers on which the name of the firm was written in blank, some to be used as notes endorsed by the house, and others as notes signed by the house. These papers were to be filled up when money was to be advanced on goods, or to renew the notes of the house at the banks. The clerk was directed to deliver one of the blanks to the promiser of a certain note on which Sullivan and Co. were endorsers, in order to enable him to renew it. The clerk accordingly delivered the promiser one of the endorsed papers. He, afterwards pretending that by some mistake it had become useless to him, and feigning to burn it in the clerk's presence, procured another blank of the clerk, and by a similar contrivance a third and fourth blank, the last of which was used for the purpose intended by Sullivan and Co. Sullivan and Co. were sued by bonâ fide holders as endorsers of one of the first blanks, which had been filled up as a note by the promiser. Verdict for the plaintiffs, subject to the opinion of the court. Parsons C. J. delivering the opinion of the Court, said, that this note could not be considered as a forgery of the names of the defendants, although it was a gross fraud, since when the defendants' name was endorsed, it was intended that something should be afterwards written to which their name should apply as an endorsement. He said also that writing the note was not such a fraud as would discharge the endorsers against an innocent endorsee; that since one of two innocent parties must suffer, the loss ought to fall on the endorsers, on account of their laches and misplaced confidence in their clerk which had given the promiser the opportunity to commit the fraud, and not on the endorsees who were not chargeable with any neglect. The court also thought that a different opinion would operate injuriously upon the commercial community. Judgment on the verdict. Putnam v. Sullivan, 4 Mass. R. 45.

"Perhaps if a blind man had a note falsely and fraudulently read to him, and he endorsed it supposing it to be the note read to him," he would not be liable as endorser, because he is not guilty of any laches, By Parsons C, J, in Putnam v. Sullivan, 4 Mass. R. 45,]

And if a man endorse a bill or note with blanks for sum and date, and die before they are filled up, the person filling them up can make no objection on account of his previous death. (57)

And if a bill or note be post-dated (as in most cases it (58) may be) an endorsement before the date (59) will entitle the endorsee to sue the drawer or maker, although the endorser die defore the date of the bill or note.

Upon the transfer of a bill drawn in sets, each part must be delivered to the person in whose favor the transfer is made; otherwise the same inconveniences may follow, which would ensue upon a neglect to deliver each of them to the payee.

The endorsement of a bill or note, implies an undertaking from the endorser to the person in whose favor it is made, and to every other person to whom the bill or note may af

(57) Usher v. Dauncey, 4 Camp. 97. F. D. and three others were partners, and used to draw bills, with blanks for sums and date, to raise money: F. D. drew one 28th February to his own order, and endorsed it in blank, and died 15th March: 22d April the clerk to the surviving partners inserted as the date 27th Feb., and as the sum £1574 and an agent of theirs got it discounted in an action thereon against the surviving partners, it was urged, that F. D.'s death countermanded all authority in the clerk to fill up a bill with his name to it, and that the bill was therefore void but Lord Ellenborough thought the clerk's authority emanated from all the partners, and that when he filled up the bill on account of their survivors and for their use, he acted as their agent and bound them, and that the case was within the principles of Russell v. Langstaff. The plaintiff had a verdict, and the court of king's bench

refused to set it aside.

(58) See ante, p. 15.

The defendant, on the

(59) Pasmore v. North, 13 East. Rep. 517. 4th of May, 1810, drew a bill for £200 on Brook and Co., dated the 11th of May, 1810, payable to Totty or order, sixty-five days after date. On the 5th of May, Totty endorsed this bill to the plaintiff for a valuable consideration; and on the same day died. After the 4th, and before the 11th of May, the defendant received effects of Totty's to the amount of about £130 to answer this bill. On the 12th of May, the defendant advised the drawees of the bill having been drawn, and of Totty's death, and desired them not to accept or pay the bill. Acceptance and payment were accordingly refused and this action was brought against the drawer. A verdict was found for the plaintiff, subject to the opinion of the court of king's bench, on a case reserved. The court, after adverting to the 17 G. 3. c. 30. as to bills for less than £5, and to the 48 G. 3. c. 149. as to post-dating draughts upon bankers, held clearly, that the plaintiff was entitled to recover for the whole amount of the bill; and he had judgment accordingly.

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