§ 1170. Acceptance supra protest, or for honor, occurs where, upon dishonor of the paper, a third person, or some party to the paper other than the drawee, accepts the bill for the honor, i. e. for the protection, of any of the parties, or of all the acceptance. Allen v. Suydam, 20 Wend. 321; Redfield & Bigelow's L. C. 26-41.
1 See Spear v. Pratt, 2 Hill, 582.
2 Fisher v. Beckwith, 19 Vt. 31; Bank of Rutland v. Woodruff, 34 Vt. 89; Spaulding v. Andrews, 48 Penn. St. 411; Redfield & Bigelow's L. C. 42, note.
3 Bank of Rutland v. Woodruff, supra.
4 Coolidge v. Payson, 2 Wheat. 66; Townsley v. Sumrall, 2 Pet. 170; Adams v. Jones, 12 Pet. 207; Exchange Bank v. Rice, 98 Mass. 288; 107 Mass. 37. See Redfield & Bigelow's L. C. 43-51.
5 Ibid.; McEvers v. Mason, 10 Johns. 207.
6 Spaulding v. Andrews, 48 Penn. St. 411. Jones v. Bank of Iowa, 34 I11. 313, holds that it is immaterial whether the plaintiff took the bill on the credit of the promise or not. See, also, Read v. Marsh, 5 B. Mon. 8. But this may be doubted. See Exchange Bank v. Rice, 98 Mass. 288, 293.
7 See Redfield v. Bigelow, L. C. 51.
8 Frith v. Forbes, 31 L. J. Ch. 793, 32 L. J. Ch. 10.
§ 1171. The acceptance of a bill of exchange may be conditional without changing the character of the instrument, if the holder be willing to receive such an acceptance; but he is in all cases entitled to insist upon an absolute undertaking on the part of the drawee, and to note the bill for dishonor in case of refusal.2 If, however, the holder receive a conditional acceptance, he will of course be bound to await the happening or performance of the condition before he can acquire any further rights against the acceptor or indorsers.3
§ 1172. The acceptance of a bill of exchange is a conclusive admission of the genuineness of the drawer's signature in favor of a bond fide indorsee for value.4 But it is held that this rule must be limited to the case of an indorsee who has taken the bill after acceptance, and that it does not apply in favor of one who purchased the paper before the drawee accepted it; on the ground that the drawee in such case did not contribute to cause the plaintiff's loss.5
§ 1173. This warranty of genuineness extends no farther than the signature of the drawer in ordinary cases. The acceptor is not precluded from alleging a forgery in the body of the bill,6 or in the signature of an indorser, even that of the payee,1 unless the signature of such party was indorsed by the drawer of the bill before it was put into circulation.2
1 Hoare v. Cazenove, 16 East, 391; Williams v. Germaine, 7 B. & C. 468; Schofield v. Bayard, 3 Wend. 488; Lenox v. Leverett, 10 Mass. 1.
2 See Story on Bills of Exchange, § 240; Ford v. Angelrodt, 37 Mo. 50; Wintermute v. Post, 4 Zabr. 420. In Pennsylvania the paper must be presented again to the drawee for payment, notwithstanding this dishonor. See Read v. Adams, 6 S. & R. 356.
3 Story on Bills of Exchange, § 240, and cases cited. 4 Hortsman v. Henshaw, 11 How. 177; Price v. Neal, 3 Burr. 1354; Story, Bills of Exchange, § 113, and cases cited. 5 McKleroy v. Southern Bank, 14 La. An. 458. 6 Bank of Commerce v. Union Bank, 3 Comst. 230.
§ 1174. The acceptor of a bill also warrants the legal capacity of the drawer to draw, and of the payee to indorse the same;3 the latter doubtless from analogy to the rule by which the maker of a promissory note is held to be estopped to allege the incapacity of the payee to indorse it.4
§ 1175. Indorsement may be either blank or special. A blank indorsement is made by writing on the bill or note the indorser's name simply; a special indorsement by prefixing or adding to the name qualifying words, such as "sans recours" (without recourse), "pay to A. B.," or the like. The effect of the first-named words is, to exempt the indorser from liability; and as its only object can be to pass the title, it is probably never used when the paper passes by delivery. The contract implied in a blank indorsement is perfectly definite and certain, and parol evidence will not be admitted to vary its signification as above explained.6
§ 1176. In order to pass the title to negotiable paper payable to a payee named, he must indorse it. It is, therefore, a perfect defence to the maker of a note or the acceptor of a bill, against any one claiming under the payee, that the payee has not indorsed the paper.6 So, too, in the case of a bill or note payable to a firm, the indorsement, to pass the title, must be made in the name of the firm, and not in that of one of the partners, unless his is the firm name." But the initials of the indorser, or even the use of figures in connection with proof that they stand for his name, are sufficient.8 And as a negotiable security made payable to a married woman belongs, at common law, to the husband, his indorsement, and not hers, must be made in order to pass the title to the paper.1 But the wife may indorse the instrument in her own name if authorized by the husband.2
1 Hortsman v. Henshaw, 11 How. 177; Coggill v. American Exchange Bank, 1 Corast. 113.
2 Ibid.; Redfield & Bigelow's L. C. 61, 62. 3 Smith v. Marsack, 6 C. B. 486.
4 Drayton v. Dale, 2 B. & C. 293. 5 Dale v. Gear, 38 Conn. 15 (1871).
6 As to the anomalous case of an indorsement (using the word in an untechnical sense) by a stranger before the payee has indorsed, see ante, § H11.
7 Estabrook p. Smith, 6 Gray, 570.
8 Palmer v. Stephens, 1 Denio, 471; Brown v. Butchers' Bank, 6 Hill, 443; Redfield & Bigelow's L. C. 110, I11.
§ 1177. The contract of the indorser of a bill of exchange or promissory note is this: He agrees to pay the sum named in the paper in case of due presentment and demand for payment made to the maker, if the instrument be a note, or to the acceptor, if it be a bill, and due notice of the dishonor thereof. Presentment, demand, and notice are conditions precedent to any liability on the part of the indorser, and must be strictly complied with unless excused; which point will be considered presently. Indorsement is equivalent to the drawing of a bill, since it is an order on the maker or drawee (as the case may be) to pay the money to the holder. It should follow that it is no defence for an indorser that a prior signature is a forgery or a prior party incompetent to contract; and such is the law.3