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CHAPTER I.

OF BILLS AND NOTES IN GENERAL.

Definition of a bill of exchange.
Foreign bills.
Inland bills.
Definition of a promissory note.
Statute 3 & 4 Ann.
Notes under 20s.
Notes under 51.
Bankers' notes.
Bankers' checks.
Bank notes.
Coal notes.
Insolvent notes.
A bill of exchange is a chose in action.
A bill or note must be for the payment of a specific sum of

money only.
A bill or note must not be conditional or contingent.

Time of payment contingent.
Fund contingent.

Parties contingent.
Wording of bills and notes.
Whether certain instruments ure bills or notes.

Definition of a bill of exchange.] A bill of exchange is an open letter of request from one man to another, desiring him to pay a sum named therein to a third person on his account. 2 Blackstone's Com. 466. A bill of exchange, in its own nature, amounts to nothing more than an authority, (Note 1.) on the one hand, to pay to the order of the person to whom it is made payable; and on the other, to an undertaking on the part of the acceptor, that he will pay it. Per otham, B. Gibson v. Minet, I H, Bl. 586 The theory of a bill of exchange, is, that it is an assignment to the payee, of a debt due from the acceptor to the drawer, and that acceptance imports that the acceptor is a

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debtor to the drawer, or at least has effects of the drawer's in his hands. Per Eyre, C. B. Gibson v. Minet, 1 H. Bl. 602. A bill of exchange is nothing but an order on the drawee to pay so much out of the effects of the drawer in his hands, and the acceptance is evidence in law that the acceptor has such effects. Per Heath, J. Stock v. Mawson, 1 B. & P. 291. In a regular bill transaction, the drawing by A, payable to B or payable to A's own order, and indorsing the bill to B, is a mode by which the drawer pays a sum of money to his payee or indorsee through an acceptor. Per Eyre, C. J. Waluyn v. St. Quintin, 1 B. & P. 654. A bill of exchange is an order or command to the drawee, who has, or is supposed to have, effects of the drawer in his hands to pay. When the drawee has accepted he is the original debtor, ( Note 2.) and due diligence must be used in applying to him. The drawer is only liable in default of payment by him, due diligence having been used. Per Lord Mansfield, Heylin v. Adamson, 2 Burr. 674. When a bill of exchange is indorsed by the person to whom it was made payable, as between the indorser and indorsee, it is a new bill of exchange, and the indorser stands in the place of the drawer. Id. Ibid. Buller v. Crips, 6 Mod. 30. Hill v. Lewis, 1 Salk. 132. Ballinghalls v. Gloster, 3 East, 482.

Foreign bills.] Foreign bills are bills made or payable abroad. In general they consist of several parts. The several parts of a bill are called a set. Each part contains a condition that it shall be payable only so long as all the others remain unpaid. (Note 3.) In other respects all are of the same tenor. This condition should be inserted in each part, and should in each mention every other part of the set, for if a man, with an intention to make a set of three parts, should omit the condition in the first, and make the second with a condition mentioning the first only, and in the third alone take notice of the other two (which is the mode pointed out by Molloy, Malynes and Marius), he might perhaps in some cases be obliged to pay each; for it might be questionable if it would be any defence to an action on the second that he had paid the third, or to an action on the first that he had paid either of the others. (See Davison v. Robertson, 3 Dow, 218.) But an omission is not perhaps material, which, upon the face of the condition, must necessarily have arisen from a mistake, as if in the enumeration of the several parts one of the intermediate ones were to be omitted ; for instance, Pay this my first of exchange, second and fourth not paid.” Where a bill consists of several parts, each ought to be delivered to the person in whose favour it is made (unless one is forwarded to the drawee for acceptance), otherwise there may be difficulties in negotiating the bill or obtaining payment. Bayley, 22. 24.

Inland bills.) Inland bills are supposed to have come into use about the middle of the seventeenth century. Holt, C. J. said he remembered when they first began, and the plaintiff declared on a particular custom between London and Bristol. Buller v. Crips, 6 Mod. 29. But it was soon afterwards held that all the difference between inland and foreign bills was, that foreign bills must be protested before a notary public before the drawer can be charged, but that inland bills need no protest. Ibid.

Definition of a promissory note.] A promissory note is a written

promise for the payment of money, and while in the bands of the payee has this resemblance to a bill, that it is for the payment of money absolutely and at all events, and when transferred it is exactly similar to a bill of exchange. Bayley on Bills, 1. 3. While a note continues in its original shape of a promise from one man to another, it bears no similitude to a bill; but when it is indorsed the resemblance begins, for then it is an order by the indorser upon the maker, to pay the indorsee, which is the very definition of a bill : the indorser is the drawer, the maker of the note the acceptor, and the indorsee the person to whom it is made payable; and all the authorities and particularly Lord Hardwicke in a case of Humerton v. Mackarell, M. 10 Geo. 2. put promissory notes on the same footing with bills of exchange. Heylin v. Adamson, 2 Burr. 676. It has been frequently said, that the statute (3& 4 Ann. c.9. vide infra), puts notes on the same footing with bills of exchange. Bishop v. Young, 2 B. & P. 84. Carlos v. Fancourt, 5 T. R. 486. Brown v. Harraden, 4 T. R. 155. It is not necessary that a note should be in itself negotiable ; it is sufficient that it be a note for the certain payment of a sum of money, whether negotiable or not. Per Cur. R. v. Bor, 6 Tuunt. 328.

Statute 3 & 4 Ann.] By statute 3 & 4 Ann. c.9. made perpetual by 7 Ann. c. 25., s. 3. reciting that it had been held that notes payable to a person or his order were not assignable or indorsable over, (see Clarke v. Martin, 2 Lord Raym. 758. Sto’y v. Atkins, Id. 1430. Brown v. Harraden, 4 T. R. 152. Trier v. Bridgman, 2 East, 360), it is enacted that all notes in writing that after 1st May, 1705, shall be made and signed by any person or persons, body politic or corporate, or by the servant or agent of any corporation, banker, goldsmith, merchant, or trader, who is usually entrusted by him, her, or them, to sign such promissory notes for him, her, or them, whereby such person or persons, body politic and corporate, his, her, or their servant or agent as aforesaid doth or shall promise to pay to any other person or persons, body politic and corporate, his, her or their order, or unto bearer, any sum of money mentioned

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in such note, shall be taken and construed to be, by virtue thereof, due and payable to any such person or persons, body, politic and corporate to whom the same is made payable, and also every such note payable to any person or persons, body politic and corporate, his, her, or their order, shall be assignable or indorsable over in the same manner as inland bills of exchange are or may be according to the custom of merchants, and that the person or persons, body politic and corporate to whom such sum of money is or shall be by such note made payable, shall and may maintain an action for the same, in such manner as he, she, or they might do upon any inland bill of exchange made or drawn according to the custom of merchants, against the person or persons, body politic and corporate, who, or whose servant or agent as aforesaid, signed the same, and that any person or persons, body politic and corporate to whom such note that is payable to any person or persons, body politic and corporate, his, her or their order, is indorsed or assigned, or the money therein mentioned ordered to be paid by indorsement thereon, shall and may maintain his, her, or their action for such sums of money, either against the person or persons, body, politic and corporate who or whose servant or agent as aforesaid signed such note, or against any of the persons that indorsed the same, in the like manner as in cases of inland bills of exchange. See Appendix, No. 1.

This act being made for the advancement of trade, ought therefore to receive a liberal construction. Per Cur. Milne v. Graham, 1 B. & C. 193. 2 D. & R. 293. S. C. Thus it has been held that a foreign note, as a note made in Scotland, is both within the words and the spirit of the act. Ibid. Bentley v. Northouse, 1 M. & M.66. In several cases, previously to the above, parties had recovered without objection on notes made abroad. Pollard v. Herries, 3 B. & P. 335. Houriet v. Mor‘ris, 3 Campb. 303. Roche v. Campbell, 3 Campb. 247. Splitgerber v. Kohn, 1 Stark. 125. Though in one case the court had intimated a strong opinion that the statute did not apply to foreign notes. Carr v. Shaw, 39 G. 3. Bayley, 22. The statute speaks of notes signed by the party, yet a note beginning “I, W. S. promise to pay,” &c. is as good as if signed with the

Taylor v. Dobbins, 1 Str. 399. Elliott v. Cooper, 2 Lord Raym. 1376. 1 Str. 609. S. C.

Notes under 20s.] By 48 G.3. c. 88. s. 2. all promissory or other notes, bills of exchange, or drafts or undertakings in writing, being negotiable or transferable for the payment of any sum or sums of money or any orders, notes or undertakings in writing being negotiable or transferable for the delivery of any goods, specifying their value in money less than the sum of 20s, in the whole, theretofore made or issued, or which shall hereafter be made or issued, shall from and after the 1st Octo

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ber 1808, be and the same are thereby declared to be absolutely void and of no effect. By sec. 2. a penalty not exceeding 201. is imposed upon any person publishing or uttering any such notes &c. recoverable before a justice of the peace. See Appendir, No. 2.

Notes under 51.] By 17 Geo. 3. c. 30. s. 1. made perpetual by 27 Geo. 3. c. 16. all promissory or other notes, bills of exchange, or draughts, or undertakings in writing, being negotiable

or transferable for the payment of 20s. or any sum of money above that sum, and less than 51., or on which 20s. or above that sum, and less than 5l. shall remain undischarged, and which shall be issued within that part of Great Britain called England, at any time after 1st January 1778, shall specify the names and places of abode of the persons respectively, to whom or to whose order the same shall be made payable, and shall bear date before or at the time of drawing or issuing thereof, and not on any day subsequent thereto, and shall be made payable within the space of twenty-one days next after the day of the date thereof, and shall not be transferable or negotiable after the time thereby limited for payment thereof; and every indorsement to be made thereon, shall be made before the expiration of that time, and bear date at or not before the time of making thereof, and shall specify the name and place of abode of the person or persons to whom or to whose order the money contained in every such note, bill, draught or undertaking is to be paid, and that the signing of every such note, bill, draught or undertaking, and also, of every such indorsement, shall be attested by one subscribing witness at least; and which said notes, bills of exchange, or draughts or undertakings in writing may be made or drawn, in words to the purport or effect, as set out in the schedules thereunto annexed, No. 1 and 2. And that all promissory or other notes, bills of exchange, or draughts or undertakings in writing, being negotiable or transferable for the payment of 20s., or any sum above that sum and less than 51. or on which 20s. or above that sum and less than 51. shall remain undischarged, and which shall be issued within that part of Great Britain called England at any time after the said 1st day of January 1778 in any other manner than as aforesaid, and also every indorsement on any such note, bill, draught, or undertaking to be negotiated under this act, other than as aforesaid, shall be absolutely void.

SCHEDULE.

No. 1. (Place) (Day) (Month) (Year) Twenty-one days after date, I promise to pay to A. B. of

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