INDORSEMENT (from 11L. indorsare, to in dorse, from Lat. in. in -f- dorsum, back). In its broadest sense, any writing on the back of an instrument. As a technical term of the law merchant, it denotes the writing of the holder's name upon a bill of exchange, cheek, promissory note. or other negotiable instrument, on trans ferring it to another. While this writing is ordinarily on the back of such an instrument (whence its name), it is equally effective if made on its face, or on a paper annexed to the instrument. In order to convert the writing into a contract, it must be delivered with the inten tion of giving effect thereto; or it must find its way into the hands of a bona-fide holder. The contract obligation of an indorser is to pay the indorsed instrunn nt, provided payment is duly demanded, and payment is refused, and due not ice of the dishonor is given to him. If the payee or holder simply signs his nnme, the indorsement is said to be blank. and the subsequent holder may till out the indorsement to any one. A special indorsement is one which specifies the person to whom, or to whose order, the instru ment is to be payable, e.g. Tay C. D. or order.
(Signed) A. IL' When personal liability as indorser is to be avoided, the words 'without recourse' are added. Such an indorsement does not prevent the further negotiation of the in strument, or east any suspicion upon its validity. A similar restriction is made in England in the case of checks by crossing them. (See CnEcK.) One which limits further negotiation is called a restrictive indorsement, e.g. 'Pay Corn Exchange Bank only.' It is provided by modern legisla tion that when an indorsement is conditional, a party required to pay the instrument may disre gard the condition and make payment to the indorsee or his transferee, whether the condition Ins been fulfilled or not. This changes the old rule, under Which an acceptor or maker paid a hill or note with such an indorsement at his peril, if the condition was not fulfilled. That was thought to be' unduly hard upon the party required to pay. See BILL or EXCHANGE ;