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cepted, but afterwards dishonored, it was held that the bill was not to be considered as accepted in satisfaction of the debt, and that not being paid, the debt remained ; sit was also held that as the defendant was not a party to the bill he was not entitled to notice of dishonor. Swinyard v. Bowes, 5 M. & S. 62. Nor is it material that by the contract the goods, &c. are to be paid for by a bill, for still, unless that bill proves available, it will not be accounted payment. Thus where Dickson sold a quantity of sugar to Parker, for which the latter was “to pay him in one month, in good bills at two months ;” and bills were accordingly given upon parties who became bankrupt, and Parker also became bankrupt, the Lord Chancellor ordered Dickson to prove not only under the commissions against the parties to the bills, but also under Parker's commission. Er parte Dickson, cited 6 T. R. 142. But where, on the sale of goods, the purchaser gave an order upon C. and Co. to give to the vendor “good bills on London at seventy days,” and the vendor took bills which were dishonored ; Lord Kenyon is reported to have said that under the order to C. and Co., it was incumbent on the vendor to take care that he got good bills, that he therefore took them at his peril, and their having turned out bad did not give him a right to waive all the in. termediate transaction, and have recourse to the demand for goods sold. Bolton v. Reichard, 1 Esp. 10. 6 T. R. 139. semb. S. C. and see 1 M. & M. 30; and post. Where A. having been arrested at the suit of B. gave him a draft for part of the demand, and agreed to settle the remainder in a few days, and the draft was dishonored, on which B. arrested him again on the same affidavit, it was held to be regular; and Lord Kenyon said, that in cases of this kind, if the bill which is given in payment do not turn out to be productive, it is not that which it purports to be, and which the party receiving it expects it to be, and therefore he may consider it as a nullity, and act as if no such bill had been given at all. Puckford v Marwell, 6 T. R. 52. Where a bill or note has been indorsed to a
payment for goods, &c. though not as absolute payment, yet until that bill or note is due or dishonored, no action can be maintained by the vendor against the vendee ; Keurslake v. Morgan, 5 T. R. 513 ; and payment of such bill or note will be presumed after it is due, unless the contrary be shewn. Hebden v. Hartsink, 4 Esp. 46. Stedman v. Gooch, 1 Esp. 3, 4.
Although in general where a bill or note is transferred by delivery, without indorsement, for a valuable consideration, as for goods sold to the party transferring it, the obligation upon him is the same, though the remedy is different, as when the bill or note is transferred by indorsement, ante, p. 95; yet when it appears that by the contract the bill is to be taken as cash or as complete payment, then, in case of its dishonor, the person who took it has no remedy except against the parties
to the bill. Thus, in an early case, it was held that a goldsmith's note is no payment, being only paper and received conditionally, if paid, and not otherwise, without an express agreement, to be taken as cash. Ward v. Evans, 2 Salk. 442. So it was said by Lord Kenyon, in Owenson v. Morse, 7 T. R. 66, that if the defendant had agreed to take the notes as payment and to run the risk of their being paid, that would have been considered as payment, whether the notes had or had not been afterwards paid.
There is also another exception to the general rule, that a bill or note delivered in payment, is not to be considered as actual payment, unless duly honored ; and that exception is, where the person indebted to the party taking the bill, gives him an order upon third persons entitling him to receive cash, instead of which the creditor elects to take a bill ; in which case though the bill is dishonoured, the debtor is discharged. The plaintiff, who had sold goods to the defendant, took a note from the defendant upon his banker, who asked the plaintiff if he would have money or notes. He said he must pay it away, and therefore, took two notes payable to his creditors, and received of the banker 7s. overplus, and within three hours afterwards the banker broke. It was ruled by Pemberton, C. J., that the defendant was not liable, and it was agreed, that if the banker had refused to pay the plaintiff, the defendant would have been chargeable still. But here the plaintiff had accepted the banker for his debtor, by receiving part of the money, and by taking notes in his creditor's name. Vernon v. Boverie, 2 Show. 296. So where the vendor of goods received an order upon the banker of the purchaser“ Please to pay the Gomersal Mill Company 1931. equal to six months,” and on presenting it, the agent of the vendor was told he might have the whole in cash allowing discount, but received a bill at three months for 1001., and the rest in banker's notes, which bill was afterwards dishonored; it was held that as the plaintiff had thought fit to waive his right to immediate payment, and to take the bill, he must bear the loss which had happened through his own default. Smith v. Ferrand, 7 B. & C. 19. But it seems that in such cases, the taking a check upon a banker, from the agent of the debtor, will not, if the check is dishonored, discharge the purchaser. The plaintiff employed the defendant, as a salesman in Smithfield, to sell cattle. On the 15th June, the plaintiff's son went to receive the money. The defendant carried the young man with him to Mingay & Co. who acted as book-keepers and sub-agents for him, and desired them to make out the plaintiff's account. Mingay & Co. offered to pay the plaintiff's son in bank of England notes, but he said a check would suit him better, and received Mingay & Co.'s check, which was dishonored. Per Lord Ellenborough, “ In the ordinary case, if a creditor prefers a bill of exchange
accepted by a stranger to ready money from his debtor, he must abide the hazard of the security he takes. But Mingay & Co. are not to be considered in the light of third persons, but as the defendant's servants. When they offered to pay by notes or their check, it was tantamount to an offer to pay by notes or his check. The check must be looked upon as his, and there is no pretence for saying that a debtor is discharged by giving a check which produces nothing, although payment in cash may have been previously tendered." Everett v. Collins, 2 Campb. 515. 7 B. & C. 24, 25. Where there was a charterparty covenanting for payment of freight upon a right and true delivery of the goods at a foreign port, and the master took from the freighter's agent, who was furnished with funds pay
him the freight, a bill of exchange upon a third person, which was dishonored, it was held by Gibbs, C. J. that the freighter was not thereby discharged. Marsh v. Pedder, 4 Campb. 257. So where the plaintiff engaged by charterparty to carry goods to Ancona for the defendant, and accordingly delivered them to the agent of the defendant, and received from him a bill on the defendant for the freight, which was dishonored, it was held that the defendant was not discharged by the plaintiff's taking the bill. “ If the fact had been,” said Lord Kenyon, “as supposed in argument by the defendant's counsel, that the consignee had been ready to pay in money, and that the plaintiff had taken this bill for his own accommodation, there would have been some weight in the argument, but the fact was otherwise.” Tapley v. Martins, 8 T. R. 451. The point adverted to by Lord Kenyon, arose in the following
The master and part-owner of a vessel carried a cargo from St. John's Newfoundland to Bilboa, and delivered it there to the consignees (he having signed bills of lading, making the cargo deliverable to the consignors or their assigns, he or they paying freight for the same) taking a bill for the freight, which was afterwards dishonored ; in an action commenced against the consignors for the freight, it was held that the jury were properly directed to find for the defendants if they thought that the master took the bills voluntarily, and for his own convenience, and that the defendants were not bound to prove that an offer was made to pay in cash. And per Bayley, J. “ I think that the evidence in this case took it out of the general rule laid down in Marsh v. Pedder. If the master of a vessel is to get payment in the best mode he can, and has no power to get any thing but a bill, he must take that; but if he can get paid in any better mode he should do so, otherwise he will be bound by taking a bill. The means of proving that he could not obtain payment by any other mode lay on the plaintiffs.” Strong v. Hart, 6 B. & C. 161. The plaintiff by charterparty engaged to bring a cargo of cotton from Alexandria to Liverpool, “ the freight to be paid on unloading and right delivery of the cargo, one third in cash, and the remainder by an approved bill at three months' date.” The ship was consigned to Garnett at Liverpool, who had authority from the defendants to settle the freight. The plaintiff, without apprising the defendants, received from Garnett his acceptance for 10001. which was dishonored. Per Abbott, C. J., "'I have no doubt about the point. The hill, even if taken as an approved bill, cannot, if unproductive, be reckoned in discharge of the defendants.” Taylor v. Briggs, 1 Moody & Malkin, 28. Where A. sold goods to B. for which the latter was to pay by a bill at three months, and B. gave A. a check on his bankers (who were also the bankers of A.) requiring them to pay A. on demand in a bill at three months, and A. paid the check into the bankers, taking no bill from them, but the amount was transferred in the banker's books from B.'s account to A.'s with the knowledge of both, and the bankers failed before the check became due, it was held that A. could not recover the value of the goods from B. Bolton v. Richard, 6 T. R. 139. See Brown v. Kewley, 2 B. & P. 518.
Liability of party delivering over bill by way of discount.] Where a bill or note is delivered over by way of discount, and the party delivering it does not indorse it, and the bill or note is dishonored, there is no remedy against the party delivering it. “ It has been held,” says the Lord Chancellor, in Ex parte Blackburne, 10 Ves. 206. “ that if there is no antecedent debt, and A. carries a bill to B. to be discounted, and B. does not take A.'s name upon the bill, if it is dishonored, there is no demand, for there was no relation between the parties excep that transaction, and the circumstance of not taking the name upon the bill is evidence of a purchase of the bill." Fenn v. Harrison, 3 T. R. 759. ante, p. 43. So where A. gave B. cash for a bill, but refused to let B. indorse it, and B. afterwards became bankrupt, and A. proved the amount of the bill under his commission; the Chancellor held this to be a sale of the bill, and ordered the proof to be expunged. És parte Shuttleworth, 3 Ves. 386. ante, p. 42. And see Ex parte Roberts, 2 Cor, 171. So it was said by Holt, C. J., that if a man has a bill payable to him or bearer, and he delivers it over for money received, without indorsement of it, this is a plain sale of the bill, and he who sells it does not become a new security; but if he had indorsed, he had become a new security, and then he had been liable upon the indorsement. Bank of England v. Newman, 1 Ld. Raym. 442. Com. 57. S. C. So in the case of an exchange of bills without indorsement, the party giving the bills without indorsement, will not be liable in case of their dishonor. Fydell v. Clark, 1 Esp. 447. And see Ex parte Hustler, 1 Glyn & Jam. 9. post Chupter XIV.
A transfer by delivery where a bill or note is sold, may imply that it is a genuine bill. Bayley, 129. And should it appear to
be a forgery, the party who has received money upon it will be answerable to that extent. A. having a navy bill purporting to be for 18001. paid it to B. for that sum; B. passed it to C. who presented it at the Navy Office, for payment, when it appearing that it was originally drawn for 8001. only, and that the sum had been fraudulently altered to 1800l. ; the Navy Office detained the bill and issued a fresh one for 8001.; C. demanded and received from B. the rem ning 10001., and it was held that B. was entitled to recover that sum from A., though all the parties were equally ignorant of the fraud. Jones v. Ryde, i Marsh. 157. 5 Taunt. 488. S. C.
Bruce v. Bruce, 1 Marsh. 165. “I believe it is not disputed,” said Lord Chief Justice Gibbs, in the above case, “ that if a man take a forged note, he is entitled to recover the amount of it from the person of whom he received it; and I cannot distinguish this from the case of a promissory note ; for though one should not be answerable on the note as party to it, one should be liable for the money which had been paid on the supposition of its being worth so much.” (Note 17.) So where the plaintiffs, bankers, discounted for the defendants, bill-brokers, a bill of exchange which the latter did not indorse, and it appeared that the signatures of the drawer and acceptor (the latter of whom kept an account with the plantiffs) were forged ; Abbott, C. J. ruled that the defendants were liable to refund the money, and that the fact of their having paid over the money to the indorsee, for whom they were brokers, would not relieve them from their liability. If you take a bill without an indorsement,” said his Lordship;
you cannot sue the person from whom you received it; but here, in fact, the instrument, on the faith of which the money was advanced, turns out not to be a bill of exchange as it was represented, being altogether a forgery, and that I conceive to be the distinction.' Fuller v. Smith, Ry.& Moo. 49. See further, as to payments on forged bills, post, Chapter X.
Liability of party delivering over bill — how discharged.] Though bills or notes given in payment, will not operate as such unless actually paid, yet they will operate as a discharge, unless the party who holds the instruments does all that the law requires to be done in order to obtain payment of them. See stat. 3 & 4 Ann, c. 9. s. 7. In an action for the price of goods, it appeared that the same were sold at York, on Saturday the 10th December ; and on the same day at three o'clock in the afternoon, the vendee delivered to the vendor, as and for a payment of the price, certain promissory notes of the bank of D. & Co. at Huddersfield, payable to bearer on demand. D. & Co. stopped on the same day at eleven o'clock in the morning, and never afterwards resumed their payments ; but neither of the parties knew of the stoppage or insolvency of D. & Co. The vendor never circulated the notes or presented