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Per Procuration

pro, authority, signature, agent, person, banker and cheques

PER PROCURATION. Where an agent signs, per procuration of, per pro., or p.p., it means that he holds an authority to sign on behalf of his principal. The Bills of Exchange Act, 15S2, Section 25, provides as follows :—" A signature by procuration operates as notice that the agent has but 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." An agent is not personally liable if he signs for or on behalf of his principal, but the mere addition to his signature of words describing him as an agent does not exempt him from personal liability.

The usual form of a per procuration signature is : per pro. John Brown, J. Jones.

or p.p. John Brown, J. Jones.

In Scotland, the agent's name often comes first and the principal's last, as- J. Jones per pro. John Brown.

A banker is protected by Section GO in paying an uncrossed cheque with a per pro. indorsement in the event of its being un authorised. If the banker on whom the cheque is drawn pays it in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement is made without authority.

It is the custom amongst bankers to accept per pro. indorsements, and they are justified in doing so both by that Section and the result of the case Charles v. Blackwell (1877, 2 C.P.D. 151), where it was decided that a banker is not liable if he pays a cheque pay able to order which is indorsed per pro., even when the person signing had not the authority of the principal.

But if a banker has reason to suspect the authority of a person so signing, he is, no doubt, entitled to ask for evidence of his authority. For instance, if a collecting agent for an insurance company were to present cheques payable to the insurance company, indorsed by him per pro. the company, and demand cash for them, the banker would render himself liable if he paid them with out authority from the company, because it is not the custom for cheques payable to a company to be cashed by an agent.

An agent may have authority to indorse cheques per pro. and to place them to the

credit of his principal's account, but he may not have power to take cash for cheques so indorsed, or credit them to his own ac count. A person may have power to draw cheques per pro., or to draw only to a limited extent, though he may not be authorised to accept bills drawn upon his principal. It is, therefore, necessary, not only to be satisfied that an agent has authority to draw cheques per pro., but to know the pre cise extent and limitations of his authority.

Some bankers consider that a per pro curation signature should include the words per pro. or words having the same meaning, but Sir John R. Paget states that ' whenever a signature shows by its form that it is put on by someone as deputy for another that signature must be treated as a per pro. signature, and puts anyone dealing with the bill on inquiry as to the authority of the person who so utilises the signature." A company's signature in the following form, The Universal Bread Co., Ltd., J. Brown, Secretary, or For and on behalf of the X and I Co., Ltd.

J. Brown, Secretary.

is in effect a procuration signature, though per pro. or p.p. are not used.

It is not impossible for a marksman to have power to sign per pro., but it makes an awkward arrangement, and such a signature should usually be confirmed.

A firm may have power to sign for a pri vate individual, as A person who has power to sign per pro curation has not, as a rule, any power to delegate his authority to another.

Per procuration signatures are not ac cepted upon dividend warrants, or interest warrants. Cheques which require a form of receipt to be signed by the payee have some times a note upon them to the effect that a per procuration discharge will be accepted if guaranteed by the payee's bankers, and that in the case of a company the receipt must be signed on its behalf by an authorised officer whose position must be stated.

An indorsement " For J. Brown & Co., Ltd., J. Jones, Secretary," " For John Brown, J. Jones, Agent," is often accepted as sufficient. The person signing should state in what capacity he signs. As to the stamp duty on a deed of procuration, see PROCURATION. (See AGENT, AUTHORITIES, INDORSEMENT.)