Ferrier v Stewart

The case of *Ferrier v Stewart* involved an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria. The respondents, John Gordon Stewart and Hester Ann Gummow, as executors, sued Agnes Ferrier and Joseph Ferrier on five promissory notes. The dispute centred on the liability of Agnes Ferrier as an alleged indorser of these notes, which were made by Joseph Ferrier in favour of Gummow & Stewart and subsequently indorsed by Gummow & Stewart "without recourse" and then by Agnes Ferrier.

The primary legal issues before the High Court were whether Agnes Ferrier was liable as an indorser of the promissory notes, whether the respondents were holders in due course, and whether Agnes Ferrier was estopped from denying her liability as an indorser. Specifically, the court had to determine the legal effect of the order of indorsements on the notes, particularly when Agnes Ferrier's signature appeared before that of the payee, Gummow & Stewart, despite the payee's subsequent indorsement.

The court reasoned that the order of indorsements on a negotiable instrument is not material if they appear in the order intended by the parties. Evidence established that Agnes Ferrier intended to indorse the notes and become liable upon them, and that Gummow & Stewart refused to accept the notes unless she first indorsed them. Consequently, Agnes Ferrier's indorsement was made with the intention of making herself liable to Gummow & Stewart, and she was estopped from denying that she was an indorser or that Gummow & Stewart were holders in due course. The court also considered section 57 of the *Instruments Act 1890* (Vic), which provides that a person signing a bill otherwise than as a drawer or acceptor incurs the liabilities of an indorser to a holder in due course, and found that Agnes Ferrier fell within the scope of this provision.

The High Court affirmed the decision of the Supreme Court of Victoria, holding Agnes Ferrier liable to the respondents on her indorsements. The appeal was dismissed.