Savannah morning news. [volume] (Savannah) 1868-1887, 1885-09-09
AN INTERESTING QUESTION
OF Special Interest to Bankers and Bust
ness Men.
From the Journal Of Commerce.

OF special Interest to Bankers and Bust-
ness Men.
From the Journal Of Commerce.
Editor of the Journal of Commerce:
HUNTSVILLE, ALA, Aug. q. 1885.
The answer below backed by several
decisions to the annexed inquiry is 50 at
variance with our views and the views
of our financial preceptor that we beg to
ask your opiniOnf SUBSCRIBER.
ENNIS NATIONAL BANK.
ENNIS, TEN, April q, 1851
Editor Rhodes journal Of Banning:
SRA bank in Texas draws draft on
its New York correspondent, payable 10
the order of B. indorses the draft in
blank and sells it to G.. Under the blank
Endorsement c indorses the draft in full
to it's correspondent in New York, and 1t
never reached its correspondent, but is
lost in the mail. The draft is shortly
afterwards presented 10 the drawee bank
in New York by q stranger, and it is paid
without the Endorsement of the cor
respondent of @, to whom it was Endorsed
in full. Can g make the drawee bank
paw it again?
The drawee bank claims that the draft
became payable to bearer when it was in
dOrsed in blank by b, and that no subse-
quent Endorsement Gin full' could change
the nature of the draft; after once be-
coming payable to bearer it always re-
manned so.
In the above case the draft was pre-
sented and collected by the stranger on
the seventh day after it was mailed by @.
By answering the above through your
journal you will oblige A SUBSCRIBER.
Ansl1er.-Daniel on Neg. Instruments
at section 696. states: 'sIf a bill or note
be once Endorsed in blank, though after
ward indorsed in full, it will still, as
against the drawer, acceptor, maker,
payee, the blank indorser, and all indors-
ers before him, be payable to bearer,
though as against the special indOrser
himself, title must be made through his in
dorsee." Citing, Smith vs. Clarke, Peake,
225; Walker VS.. Mcdonald, Exch., 527;
Habersham VS.. Lehman, 63 Geo., 5S3:
johnson Va. Mitchell, 80 Texas, 212.
The bank, therefore, was justified in
paying the draft TO the bearer.
RepIU.-The decision by which the
holder of a daft which has been Endorsed
by the original payee in blank, Is justified
in striking out subsequent Endorsements
and treating the bill as payable to bearer
do not rest on very high authority, but
they have never been seriously question
ed. A brief reference to those quoted
may be interesting:
In Smith VS.. Clarke, (Peake's Add
Cases, 295, the bill OF exchange was in
dOrsed in blank by the payee after several
-. y
under a special Endorsement to him or
order. The plaintiffs discounted it with
out JacksOn's Endorsement, and sued on
the bill after striking out all Of the in
dorsements except the first. The Court
of Kings Bench gave judgment for The
plaintiffs, Lord Kenyon saying: ''The fair
holder Of a bill may consider himself as
the indorsee OF the payee, and strike out
all other Endorsements. This special in
Do 49, 10 ak4 h.
had Endorsed il, cannot affect the title OF
the present plaintiffs"
The decision was made in the time of
George Ill, and in 1913, In the case of
Walker VS.. Mcdonald, Chief Baron Pol
lock said he never heard it questioned
during the interval.
In johnson VS.. Mitchell 80 Texas, 2i2, J
the note was TO Crabtree or bearer, as
signed by CrabtFee 10 Gilbert. and trans
ferred By the latter without Endorsement.
The suit was against the makers, and the
decision held them liable TO pay 70 the
holder by delivery.
In Hsbersbam VS.. Lehman, (63 Ga,
$50, the action was likewise against the
MAKER, on a note indOrsed in blank, then
IN full, the plaintiff showing no title save
possession. Judgement was for plaintiff,
the court saving: "The payee's order
10 pay 10 any holder 10 not revoked or can
celed by the order OF some Olher person to
pay to particular indlyidual."
In the case cited BY our correspondent,
when 6 purchased the draft he should
have written over BIS Endorsement line
making it payable 10 himself. That would
take away the blank character OF the in
dorsement, and then c by making 10 paya-
bic 10 the order OF ID, his New York cor
respondent, would have been amply pro-
tected,
Story on Bills sec. 2O7) says: at win
make no difference. while the first indorse-
ment remains blank that there are sub
sequent Endorsements in fun on the bill;
for these do not change the original char
acter OF the first blank Endorsement as 20
the rights OF the Holder against the Payer,
the Drawer, or the AcceptOr; but at most
they will only restrict the Holder 70 the
right 70 recover upon the bill as The i'm
mediate assignee OF The firgt tnd0raer:
and, therefore, be will he az liberty 20 pass
over, or strike out, All Subsequent indorse-
ments.' 70 the same effect is Bayley on
Bills, oh. ., PAGES 124. l25; Gritty on Bills,
ch.6,pages 203 70 207, and many others. This
IL not commonly Understood, and many
persons are IN the habit OF making on the
back OF a check or draft fun indorse-
ment 10 a new payee without changing
above as they have q distinct right 10
dO) the blank character OF the previous
Enforcement, and thus DO not protect
themselves rs they intended. We think
the drawee IN the case described ought
not 10 have paid the draft without ques-
tion ~ 10 the omission Of the signature II
seemed 70 require; but the decisions make