INDORSEMENT. In Commercial Law. That which is written on the back of an instrument in writing and which has relation to it.
Writing one's name on the back of a pro missory note or other negotiable instrument. 20 Vt. 499.
2. An indorsement is generally made primarily for the purpose of transferring the rights of the holder of the instrument to some other person. It bss, however, various results, suoh ne rendering the indorser liable in certain events; and hence an indorsement is sometimes made merely for the purpose of additional security. This is called an accommodation indorsement when done without consideration other than an exchange of indorse ments.
A blank indorsement is one in which the name of the indorser only is written upon the instrument. It is commonly made by writing the name of the indorser on the back, 13 Serg. & R. Penn. 315 ; but a writing across the face may answer the same pur pose. 18 Pick. Mass. 63; 16 East, 12.
A conditional indorsement is one made sub ject to some condition without the perform ance of which the instrument will not be or remain valid. 4 Taunt. 30.
An indorsement in full is one in which mention is made of the name of the indorsee. Chitty, Bills, 170.
A qualified indorsement is one which re strains, or limits, or qualifies, or enlarges the liability of the indorser, in any manner differ ent from what the law generally imports as his true liability, deducible from the nature of the instrument. Chitty, Bills, 8th ed. 261; 7 Taunt. 160. The words commonly used are sans recours, without recourse. 3 Mass. 225 ; 12 id. 14.
A restrictive indorsement is one which re strains the negotiability of the instrument to a particular person or for a particular pur pose. 1 Rob. La. 222.
3. The effect of the indorsement of a negotiable promissory note or bill of ex change is to transfer the property in the note to the person mentioned in the indorse ment when It is made in full, or to any per son to whose possession it may lawfully come thereafter even by mere delivery, when it is made in blank, so that the possessor may sue upon it in his own name at law, as well as if he had been named as the payee. 11 Pet. 80; 2 Hill, N. Y. 80.
And any person who has possession of the instrument is presumed to be the legal bond fide owner for value, until the contrary is shown.
When the indorsement is made before the note becomes due, the indorsee and all sub sequent holders are entitled to recover the face of the note against the maker, without any right on his part to offset claims which he may have against the payee; or, as it is frequently stated, the indorsee takes it free of all equities between the antecedent parties of which he had no notice. 3 Term, 80, 83; 7 id. 423; 8 Mees. & W. Exch. 504; 8 Conn. 505; 13 Mart. La. 150; 16 Pet. 1.
4. Indorsers also, unless the indorsement be qualified, become liable to pay the amount demanded by the instrument upon the fail ure of the principal, the maker of a note, the acceptor of a bill, upon due notification of such failure, to any subsequent indorsee who can legally claim to hold through the par ticular indorsee. Story, Bills, Q 224 ; Parsons, Bills.
The effect of acceptance upon a bill is to remove the acceptor to the head of the list as as principal, while the drawer takes his place first indorser.
See GUARANTY; BILLS OF EXCHANGE;