contract on a bill, whether it be the drawer's, the acceptor's, or an indorser's, is incomplete and revocable, until delivery of the instrument in order to give effect thereto. But where an acceptance is written on a bill, and the drawee gives notice to, or according to the direc tions of the person entitled to the bill that he has accepted it, the acceptance then becomes complete and irrevocable. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery (a) in order to be effectual must be made either by or under the authority of the party drawing, accepting, or indorsing, as the case may be; or (b) may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the bill. But if the bill be in the hands of a holder, in due course a valid delivery of the bill by all parties prior to him, so as to make them liable to him, is conclusively presumed. Where a bill is no longer in the possession of a party who has signed it as drawer, acceptor, or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved.
Capacity and authority of parties.—A party having capacity to con tract may incur liability as a party to a bill ; if, for example, a minor is party to a bill, he would not be liable to the holder, but the latter may sue the other parties, if any, thereto. No person, not having signed a bill, is liable thereon ; but where a person signs in a trade or assumed name, he is liable thereon as if he had signed in his own name ; and the signature of the name of a firm is equivalent to the signature by the person signing of the names of all the partners in that firm. A forged or unauthorised signature is absolutely inoperative; but an unauthorised signature may be subsequently ratified. Signature by procuration is notice that the agent has only a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority. Where a person signs, and adds words to his signature indicating that he signs on behalf of a principal, or in a representative character, he is not personally liable; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability. In determining whether a signature on a bill is that of the principal or that of an agent by whose hand it was written, the construction most favourable to the validity of the instrument will be adopted.
Negotiation.—A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill. A bill payable to bearer is negotiated by delivery ; one to order, by indorsement of the holder together with delivery. A bill is not a negotiable instrument unless it is payable to bearer; or °being payable to order, until it has been indorsed by the drawer. Where the holder of a bill payable to his
order transfers it for value without indorsing it, the transfer gives the transferee such title as the transferor had in the bill, and the transferee in addition acquires the right to have the transferor's indorsement. Where any person is under obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to negative present liability.
indorsement in order to operate as a negotiation must comply with the following conditions :—(1) It must be written on the bill itself and be signed by the indorser ; his simple signature being sufficient. An indorsement written on an allonge, or on a copy of a bill issued or negotiated in a country where copies are recognised, is deemed to be written on the bill itself. (2) It must be an indorsement of the entire bill; neither an indorsement of part only of the amount payable, nor one to two or more persons severally, would operate as a valid negotiation. (3) Where a bill is payable to the order of two or more payees or indorsees, who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others. (4) Where the name of a payee or indorsee is wrongly designated or misspelt, it may be indorsed as therein described, with the optional addition of the correct signature. (5) Where there are more than one indorsement, each is deemed to have been made in the order appearing on the bill, until the contrary is proved. (6) The indorsement may be blank, special, or restrictive; but if conditional, the condition may be absolutely disregarded. An indorsement in blank specifies no indorsee, and a bill so indorsed becomes payable to bearer, while a special indorsement specifies the person to whom, or to whose order, the bill is pay able, and such an indorsee comes under the same rules as the payee of abill. Where there is an indorsement in blank, any holder may convert it into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person.
Restrictive is an indorsement which prohibits the further negotiation of the bill, or expresses that it is a mere authority to deal with the bill as thereby directed, and not a transfer of the ownership thereof. Thus, a bill indorsed "Pay D. only," or "Pay D. for the account of X.," or "Pay D., or order, for collection," would be restrictive. As a result of such an indorsement the indorsee acquires the right to receive payment of the bill and to sue thereon, but he has no power to transfer his as indorsee unless he is expressly authorised so to do. Where a 1, restrictive indorsement authorises further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement. An indorser may append to his signature the words sans recours, by doing which he escapes liability on the bill.