Davis and Gaines vs. John D. Henderson, 25 Miss. 549

Mr. Justice Fisher delivered the opinion of the court. The defendant in error was sued as the drawer and indorser of the following bill of exchange, to wit: — Natchez, March 4, 1846. Exchange for $2,000. Fifty days after sight of this only of exchange, pay to my own order two thousand dollars, value received, and charge the same to account of your agency at Natchez. Jno. D. Hendeeson, Agent. To Stephen Franklin, Esq., New Orleans. Indorsed, Jno. D. Henderson, Agent.

The defence relied on is, that the bill was drawn and indorsed by the defendant, as the agent of the drawee, Stephen Franklin ; and that it was not intended by either act to assume a personal responsibility. The counsel for the plaintiffs in error, on the contrary, insists, that the bill having passed into the hands of third parties, and not disclosing on its face the name of the agent’s principal, no other evidence can be admitted for this purpose.

If it were necessary that the bill itself should unequivocally disclose the name of the principal, in order to exonerate the agent, this position would probably be correct. But this is not required. It will be sufficient, if enough appears upon the face of the transaction, to put a prudent man, before taking the bill, upon inquiry. Mott v. Hicks, 1 Cow. 513.

"Where it can be done consistently with justice and sound policy, an indorsee ought in all cases to be confined to the contract as made and assented to by the immediate parties thereto. ’This rule is only relaxed in favor of innocent holders, who, fiom the language employed by the original parties, had good weason to believe that the contract was subject to no conditions or restrictions as to the liabilities of the parties appearing íto be bound thereby.

But the reason of the rule ceases the 'moment it appears that the indorsee could not, with ordinary prudence, have been misled in regard to the terms of the contract. The defendant, in drawing and indorsing the bill, attached to his name the word “ agent.” It was, moreover, to be charged •Jo the drawee’s own agency at Natchez. These facts appearing upon the bill itself, if not conclusive evidence that the defendant was acting in a representative capacity, were at least sufficient to put a prudent man, taking the bill from the drawee, upon inquiry. What was he to ascertain by this inquiry ?

The precise terms of the contract, of course, as assented to by the original parties. Plaving ascertained these terms, he at once learns that no one but the drawee is bound for the payment of the bill; for he is then informed that the defendant merely acted as the drawee’s agent, and did not intend, by either the act of drawing or indorsing it, to bind himself personally.

Inasmuch as enough appeared upon the bill to enable the plaintiffs to learn the terms of the contract, and the extent of the defendant’s undertaking, we are of opinion that the court committed no error in receiving the defendant’s evidence, which shows that no liability existed on the part of the defendant to the drawee, from whom the plaintiffs received the bill; and as ordinary diligence would have placed them in possession of the terms of the contract, it is but right that they should be charged with notice of the facts as proved. Under this view of the law, the judgment must be affirmed.