no conclusive acceptance or promise of payment on the part of the bank, whether both drawer and holder are its customers, or the holder alone.1 A bank should not pay a check after notice that it was lost; nor before it is due, if on time; nor after notice of the drawer's insolvency; nor (since a bank is the drawer's agent) after notice of the drawer's death.2

§ 469. Points of Resemblance between Check and Bill of Exchange; Effect of Indorsement, etc. But while a check, in many respects, is found to be unlike an inland bill of exchange, payable on demand, in others they strongly resemble one another. A check, like a bill or note, may be indorsed; and the method of conferring the quality of negotiability, again, of restraining or taking it quite away, is much the same in all negotiable instruments. Checks may

be drawn to a person by name, in which case it is at least prudent for the bank to take his indorsement before making payment; or to a person "or bearer," being thereby made capable of passing from hand to hand, by a simple delivery; or to a person "or order," in which case the check can be transferred, and should be paid after the person has written his name on the back and not before. And subsequent holders by means of a restrictive indorsement may convert a check once payable to bearer to one payable on order. The writing on the back of a check, however, may or may not be an "indorsement," in the strict legal sense; and whether the party who writes his name there is made subject to the surety liabilities which were considered in our last chapter will depend upon circumstances. For the usual object aimed at where checks are drawn payable to "order" rather than to "bearer" is simply to guard against loss of the fund; and, besides, to secure, on return of the cancelled check from the bank, a sort of receipt of the payee, for the drawer's convenience. But, certainly, a check is capable of indorsement in the full legal sense; and one who indorses it

12 Pars. 77, n.; Boyd v. Emmerson, 2 A. & E. 184; Overman v. Hoboken City Bank, 1 Vroom, 61. And see Peterson . Union Nat. Bank, 52 Penn. St. 206, where some

element of fraud on the holder's part appeared; 69 Ind. 479.

22 Pars. 81, 82, and cases cited, mostly English. See Tate v. Hilbert, 2 Ves. Jr. 118.

with the intent of making himself an indorser to his transferee is chargeable as such at the suit of a subsequent bond fide holder, and ought to be notified when the check is dishonored, on the usual principles. And the rule is that a check expressed payable to bearer or indorsed in blank confers the usual presumptive title upon the holder.2

Where the indorsement of a check was intended merely to transfer one's legal rights, not to incur the responsibility of an indorser, that intention will be given effect. And in general the courts appear less inclined to fasten liabilities upon the indorser of a check than upon the indorser of a bill or note; while the holder of a check finds considerably more favor as against a drawee, who ought not to have drawn.

§ 470. Effect of paying a Forged or Altered Check. — The better opinion is, that where the drawer's own negligence causes the drawee, who exercises reasonable care, to believe that a forged or altered check was genuine and payable according to its face, and the drawee accordingly pays the

1 See Keene v. Beard, 8 C. B. N. S. 372; 2 Pars. 58, 59, 71.

2 Ib.

8 Kimmel v. Bittner, 62 Penn. St. 203.

4 Thus, the mere fact that one in regular course of business in good faith and for value receives a check at some brief period, such as ten days after it was drawn and dated, does not subject him to the equities which prevail between the original parties to the check; though a demand bill or note might perhaps, under the same circumstances, be considered as overdue. Ames v. Merriam, 98 Mass. 294. And see, further, Hare v. Henty, 10 C. B. N. s. 65; Prideaux v. Criddle, L. R. 4 Q. B. 455.

And it is a rule that the drawer of a draft or check, in case he has drawn against no funds, is not entitled to notice of its dishonor before he can be held liable for non-acceptance or non-payment. Even though there were some funds in the bank

to his credit, so long as they were insufficient to meet the check, and the drawer had no reasonable expectation that the check would be paid, the holder is excused from giving strict notice of dishonor. Carew v. Duckworth, L. R. 4 Ex. 313. And see Lawrence v. Schmidt, 35 Ill. 440, which was a case where only depreciated currency was in the drawee's hands. Primâ facie, the drawer of a check should have early notice of its dishonor; hence legal excuse for omission to give such notice ought to be shown where the holder has failed to give it; still, if the holder can show that the drawer has suffered no prejudice by his omission, he can maintain his action against him. 2 Big. Bills and Notes, 2d ed. 116, and cases cited; 41 Wis. 479; Heywood v. Pickering, L. R. 9 Q. B. 428. And see Fletcher v. Pierson, 69 Ind. 281.

For an action against the indorser of a check, who indorsed " "waiving

check in good faith, the drawer must suffer loss.1 But where a bank pays a forged check, without some such excuse, whether the forgery be that of the drawer's name, or of some indorser (the check being made payable to order), the loss falls upon the bank. And if a bank pays a forged check, without the excuse of the drawer's negligence, payment cannot be charged against him; though, if the check was altered, the drawer will be liable for the original amount.2

§ 470 a. Memorandum Checks. —A peculiar class of checks may be found in modern business, known as memorandum checks. In form they differ from ordinary checks only in the usual insertion of the abbreviation "mem." in the heading, with perhaps a cancellation of the printed name of the bank. The effect of such a check is to create, on the drawer's behalf, an absolute contract to pay the bonâ fide holder of the paper unconditionally, waiving the condition of presentment at the bank and other formalities.3 A check drawn in the ordinary form cannot be shown to be a memorandum check.4

§ 471. Bills of Lading; how far Negotiable. - II. Besides bills, notes, and checks, there are other instruments which resemble them in the characteristic of negotiability; and the strong tendency of modern times is to introduce new or modified kinds of personal property, which may present this negotiable advantage to parties seeking investment. Bills of lading, as we have said, are sometimes considered negotiable; though the better opinion is that they are quasi-nego

demand and notice," see Emery v. Hobson, 62 Me. 578. That a check was dishonored when transferred does not discharge the drawer. Loss to the drawer by delay in presentment is matter of defence. Cowing v. Altman, 79 N. Y. 167.

1 See Young v. Grote, 4 Bing. 253; Lickbarrow v. Mason, 2 T. R. 63; 2 Pars. 80.

22 Pars. 80, 81, and cases cited; Morgan v. Bank of N. Y., 1 Kern. 404; Robarts v. Tucker, 16 Q. B. 560;

Orr v. Union Bank, 1 H. L. Cas. 513. And see last chapter. One who has collected funds from the drawee on a forged indorsement may be sued for the money obtained by the person whose name was forged. Shaffer v. McKee, 19 Ohio St. 526. See, further, Thomson v. British Bank, 82 N. Y. 1.

8 Franklin Bank v. Freeman, 16 Pick. 535; 4 Gray, 108; American Emigrant Co. v. Clark, 47 Iowa, 672; 2 Daniel, Neg. Instr. §§ 1583, 1584.

4 Ib.

tiable only. And such is the language usually applied to them in the later cases.2 The word "assigns" is commonly used instead of "order;" and then, again, the bill of lading is evidence, not of an incorporeal right, but of corporeal property, the goods or cargo on transit-which, after all, is what one feels particularly interested in obtaining. It is true that the law merchant makes a bill of lading so far transferable by indorsement (and this notwithstanding the use of the word "assigns") that an indorsee may sue the owner or ship-master, founding his title to the goods on his possession of the bill of lading; yet the property in goods. for which a bill of lading is given may be legally transferred for consideration, without indorsing and delivering the bill at all. This latter course, to be sure, is an unusual one; but, furthermore, the holder of a bill of lading cannot generally sue upon it at law, in his own name, more than any ordinary assignee of incorporeal property, though he is permitted to do so in courts of admiralty; and local statute at this day often confers such right. While, then, bills, notes, and checks not only evince money rights, but float them, as it were, that which a bill of lading represents may be styled a right to take, hold, and enjoy certain corporeal chattels; so that in some respects the primitive bill of lading would appear like a mere scrap of written evidence, to be produced in proof of one's title, much as the purchaser of chairs would show the receipted bill of the furniture dealer, to establish that the goods were his, and not the dealer's. But, on the whole, bills of

1 Supra, § 85. And see 1 Ld. Rayın. 271; Lickbarrow v. Mason, 2 T. R. 63; The Water Witch, 1 Bl. 494. The bank, having paid on a "raised" check, may recover the amount from the payee. 67 Ind. 500. And see, as to paying a forged check, Nat. Bank v. Bangs, 106 Mass. 441.

The question of the contributing fraud or negligence of a payee appears material here. Ib.

lading are more decidedly

3 Supra, § 321. It is both a receipt and a contract as to the goods described. Ib.

4 Cf. 1 Pars. Shipping, 193, 195; Allen v. Williams, 12 Pick. 297; Stanton v. Eager, 16 Pick. 467.

5 Thompson v. Dominy, 14 M. & W. 402; Tindall v. Taylor, 4 Ell. & B. 219; Cobb v. Howard, 3 Blatch. 524; 1 Pars. Shipping, 193; Gurney v. Behrend, 3 Ell. & B. 633; The Re

21 Pars. Shipping, 193; cases post. becca, 5 Rob. Adm. 102.

negotiable in their character than ordinary bills of sale; and to a great extent the method of selling cargoes and goods on transit or of raising money by their pledge must be sui generis; so it is fit that such instruments should occupy, as they unquestionably do, the midway position of quasi-negotiable. A bill of lading may be indorsed with restrictions or conditions which will be construed to much the same effect as the corresponding indorsement of a bill or note.1 Such an