Fig. 6 is an indorsement in full of X. X. Crumby. By this indorsement, only John Jones, the person to whom he indorses, may obtain payment of the note. If John Jones indorses the note in blank, that is, signs his name to it, the note becomes payable to bearer, and passes like money, without further indorsements.
Fig. 8. Indorsement without Recourse.
By the indorsement, Fig. 7 which is also an indorsement in full, X. X. Crumby becomes liable as indorser to John Jones only, and not to anyone to whom John Jones may indorse the paper. X. X. Crumby's indorsement does not contain the words "or order." The face of the note, however, contains the words "or order," which makes the note negotiable. X. X. Crumby's indorsement to John Jones, although not containing words of negotiability, does not destroy the negotiability of the note. John Jones may indorse the note in blank, or in full. The only effect of X. X. Crumby's omitting words of negotiability from his indorsement is to limit his primary liability as an indorser to John Jones.
138. Indorsement without Recourse. Frequently, the holder of a negotiable instrument is unwilling to assume any primary liability by transferring a negotiable instrument which he possesses. He may desire to transfer the right he has in the instrument, without becoming liable thereon. He may do this by indorsing it without recourse.
Fig. 9. Indorsement for Collection and for Deposit.
By either of the indorsements, (Fig. 8) the one in blank, or the one in full, Jos. Rundy, transfers his interest in the note to John Jones, and does not become liable thereon as an indorser. It is not quite accurate to say that an indorser without recourse has no liability as an indorser. He impliedly warrants the signatures preceding his own to be genuine, and that the parties making them had legal capacity to sign. The implied liabilities of an indorser are discussed under a separate section.
Fig. 10. Promissory Note with Anomalous Indorser.