The modern doctrine as to the liability of indorsers is a comparatively recent development in the law.

"The principle that the indorser of a bill of exchange may be held liable thereon when the paper is dishonored was apparently not generally accepted as a part of the custom of merchants when Marius published the second edition of his book (1670). It was shortly accepted, however, by the law courts. This event is worthy of more than passing notice.

"In Claxton vs. Swift (1685),6 the chief justice thought liability of the indorser might be deduced from principles of equity. The indorser is chargeable because, if he makes an indorsement upon a bad bill, it is equity and good conscience that the indorsee may resort to him to make it good.

"In Sir Bartholomew Shower's report of this case, we find the able argument made by himself in favor of charging the indorser after the drawer had been successfully sued, but without satisfaction of the judgment. Among other things, in the course of this argument, it was said:

" 'The necessity of trade and commerce, and the usefulness and convenience of transferring money by bills of exchange, has introduced the same; and the civil law allowing them in other nations has occasioned their approbation here; and amongst them the rule is, ubi literae excambii non habuerunt effectum, duret prima obligatio, and I think the same rule ought to hold with us. This and every indorsement is as a new bill of exchange, and has all the requisites and parties that a bill has, .... and a man that has a bill indorsed has, as it were, two bills for the same sum; and it is most true this action is not joint, and cannot be brought both against the drawer and indorser, for that the assumptions are at several times, and upon distinct considerations.' All of the judges, however, except the chief justice, concurred in giving judgment for the defendant; but this decision was subsequently-reversed in the Exchequer Chamber. The point for which Shower contended was thus accepted as law.7

6 3 Mod., 86; 2 Show, 494.

"The reason assigned for fixing liability upon the indorser is that by writing the indorsement he virtually and in fact draws a new bill. It will be perceived that this reasoning applies to the indorsement of a bill not containing words of negotiability as well as to those made payable to order or bearer. Accordingly, if a bill or note is made payable to B, without more, and B indorses this instrument to C, the latter, upon nonpayment of the bill, can sue his indorser, though of course he has no right of action against the party primarily liable, for the reason that the contract is not transferable by its terms." 8 9

The liability of the indorser in case of the dishonor of the bill or note is now settled beyond dispute. It is also settled that the obligation of the surety is a new and independent contract subject to the law of the place where the contract is made.10

The indorser is not released by the invalidity of the instrument.11

"The nature of the obligation of an indorser is very different from that of a surety. The surety's obligation is not an independent contract, but is identical with that of the maker, and ordinarily whatever defenses the principal succeeds in making inure to the benefit of the surety. But the obligation of the indorser is a new and separate contract, which may be valid and subsisting although the contracts of the other parties to the instrument be totally void. So distinct are the contracts of the maker and the indorser of a note, that, in the absence of statute, they cannot be joined in the same action." 12

7 Claxton vs. Swift, 1 Lutw., 878, 882b.

8 Hodges vs. Steward (1691), 1

Salk, 125. 9 Street's Foundations of Legal Liability, Vol. II, pp. 376-7.

10 Aymar vs. Sheldon, 12 Wend.

(N. Y.), 439; National Bank vs. Green, 33 Iowa, 140.

11 Morford vs. Davis, 28 N. Y., 481;

Neil's Succession, 24 La. Ann., 139.