In most of the cases a person not a party to the, instrument who writes his name on the back of it before delivery, is in many states considered an original promisor ; Mal bon v. Southard, 36 Me. 147; White v. How land, 9 Mass. 314, 6 Am. Dec. 71; Baker v. Block, 30 Mo. 225; Carr's Ex'x v. Rowland, 14 Tex. 275 ; Sylvester v. Downer, 20 Vt. 355, 49 Am. Dec. 786 ; and in Pennsylvania it was held that such irregular indorser was not liable to the payee ; Schafer v. Bank, 59 Pa. 144, 98 Am. Dec. 323. By Neg. Instr. Act 156, it is provided that: Where a person, not otherwise a party to an instrument, places thereon his signature in blank before deliv ery, he is liable as indorser in accordance with the following rules: If the instrument is payable to the order of a third person, he is liable to the payee and all subsequent par ties ; if it is payable to the order of maker or drawer or to bearer, then he is liable to all parties subsequent to the maker or draw er; if he signs for the accommodation of the payee, he is liable to all parties subse quent to the payee.
One who takes a note from its maker or payee is chargeable with knowledge that the indorsement of a third party thereon was for accommodation, and in a case of a corpora tion, such an act is ultra vires; Brill Co. v. Ry. Co., 189 Mass. 431, 75 N. E. 1090, 2 L. R. A. (N. S.) 525.
A plaintiff, in suing the first indorsee may omit to state in his declaration all the in dorsements but the first indorsement in blank, and aver that the first blank indorser indorsed directly to himself ; in such case all the intervening indorsements must be struck out; Byles, Bills *155 ; Merz v. Kais er, 20 La. Ann. 377.
An indorsement by an officer of a corpora tion, where the fact appears on the instru ment, dees not render him individually lia ble; State Nat. Bank v. Singer, 39 La. Ann. 813, 2 South. 599.
An indorsement by one of several execu tors will not transfer the property; 2 C. & K. 37 ; Smith v. Whiting, 9 Mass. 334; con tra, in case of administrators ; Sanders v. Blain's Adm'r ; 6 J. J. Marsh. (Ky.) 446, 22 Am. Dec. 86; and see Wheeler v. Wheeler, 9 Cow. (N. Y.) 34. An executor cannot com plete his testator's indorsement by deliver ing the instrument, which has already been signed by the testator ; Wood's Byles, Bills 58 ; 1 Exch. 32.
The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out and all indorsers subsequent to him are thereby relieved from liability on the indorsement ; Neg. Instr. Act § 147.
By the general law merchant, the indors er of a negotiable instrument is bound in stantly, and may be sued after maturity, up on demand and notice of non-payment. But by the statutes of some of the states the maker must first be sued and his property subjected; Watson v. Hahn, 1 Colo. 385 ;
Mason v. Burton, 54 Ill. 349 ; Booth v. Storrs, 54 Ill. 472; Harrison v. Pike, 48 Miss. 46.
The effect of acceptance upon a bill is to remove the acceptor to the head of the list as principal, while the drawer takes his place as first indorser.
A course of decisions with respect to re strictive indorsement has given rise to much discussion, resulting in so general a change in clearing-house rules as to amount to a revolution in banking methods.
The litigation arising from the relations between' a bank, its depositor, and the in dorsee of a check or draft commences with the early English case of Price v. Neal, fol lowed in England and this country, in which it was held by Lord Mansfield that if the drawee pays a bill which he afterwards Ends to be forged, he has no recourse against an innocent indorser ; 3 Burr. 1354; nor has a bank which paid a forged check ; Taunt. 76 : Levy v. Bank, 1 Binn. (Pa.) 27. See also Bank of U. S. v. Bank, 10 Wheat. (U. S.) 333, 6 L. Ed. 334 ; U. S. Nat. Bank v. Bank, 59 Hun 495, 13 N. Y. Supp. 411. The precise principle on which the doctrine of Price v. Neal was founded, has been a subject of va rying opinion and the different theories con cerning it, as also a voluminous citation of the cases, will be found in an article by Pro fessor J. B. Ames in 4 Harv. L. Rev. 297. An extended review and discussion of the cases will also be found in Keener, Quasi-Cont. 154. While it is true that a bank pays a forged cheek at its own peril, if the depositor be free from negligence ; Shipman v. Bank, 126 N. Y. 319, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821; it was held that no title passed through a forged indorsement, and hence payment by a bank made on the faith of it may be recovered from an indorsee even if bona fide for value ; Canal Bank v. Bank, 1 Hill (N. Y.) 290.
A later decision had a very far-reaching effect with respect to the effect of restrictive indorsements. What has been characterized as "the doctrine, newly announced by the courts," has been thus stated: "Where a draft is indorsed to a bank for collection or for account of the indorser, the form of in dorsement carries notice to the bank of pay ment that the bank to whom the paper is thus indorsed is a mere agent of the indorser to collect, having no proprietary interest in the paper ; hence if the paper turns out to be forged (i. e. raised in amount, or payee's indorsement forged), the agent bank's own indorsement is not a guaranty of genuine ness, and it is under no liability to repay the amount collected, after it has paid the same over to its principal." 13 Banking L. J. 75.