dents of negotiability were to be recognised in the case of promissory notes. The dispute was settled by the stat. 3 & 4 Anne, c. 9, which vindicated the custom and confirmed the negotiability of notes. Again, in 1873, the Court of Queen's Bench were of opinion that documents other than bills and notes could not be endowed by custom with the incidents of negotiability. But the efficacy of custom was again upheld by the Exchequer Chamber in 1875, in Goodwin v. Robarts, where it was determined that foreign scrip might be rendered negotiable by custom, so as to pass with a good title, and free from all equities to a bonâ fide purchaser. The Court then say (p. 356), "While we quite agree that the greater or less time during which a custom has existed may be material in determining how far it has generally prevailed, we cannot think that if a usage is once shown to be universal it is the less entitled to prevail, because it may not have formed part of the law merchant as previously recognised and adopted by the Courts." The House of Lords approved the decision in 1876.

The results of this formation of the law by custom are instructive. A reference to Marius' treatise on Bills of Exchange, written about 1670, or Beawes' Lex Mercatoria, written about 1720, will show that the law, or perhaps rather the practice, as to Bills of Exchange, was even then pretty well defined. Comparing the usage of that time with the law as it now stands, it will be seen that it has been modified in some important respects. Comparing English law with French, it will be seen that, for the most part, where they differ, French law is in strict accordance with the rules laid down by Beawes. The fact is, that when Beawes wrote, the law or practice of both nations on this subject was uniform. The French law, however, was embodied in a Code by the 'Ordonnance de 1673,' which is amplified but substantially adopted by the Code de Commerce of 1818. Its development was

thus arrested, and it remains in substance what it was 200 years ago. English law has been developed piecemeal by judicial decision founded on custom. The result has been to work out a theory of bills widely different from the original. The English theory may be called the Banking or Currency theory, as opposed to the French or Mercantile theory. A Bill of Exchange in its origin was an instrument by which a trade debt, due in one place, was transferred in another. It merely avoided the necessity of transmitting cash from place to place. This theory the French law steadily keeps in view. In England bills have developed into a perfectly flexible paper currency. In France a bill represents a trade transaction; in England it is merely an instrument of credit. English law gives full play to the system of accommodation paper; French law endeavours to stamp it out. A comparison of some of the main points of divergence between English and French law will show how the two theories are worked out. In England it is no longer necessary to express on a bill that value has been given, for the law raises a presumption to that effect. In France the nature of the value must be expressed, and a false statement of value avoids the bill in the hands of all parties with notice. In England a bill may now be drawn and payable in the same place (formerly, it was otherwise, see the definition of bill in Comyn's Digest.*) In France the place where a bill is drawn must be so far distant from the place where it is payable, that there may be a possible rate of exchange between the two. A false statement of places, so as to evade this rule, avoids the bill in the hands of a holder with notice. As French lawyers put it, a Bill of Exchange necessarily presupposes a contract

* "A bill of exchange is when a man takes money in one country or city upon exchange, and draws a bill whereby he directs another person in another country or city to pay so much to A. or order for value received of B., and subscribes it."

of exchange.* In England, since 1765, a bill may be drawn payable to bearer, though formerly it was otherwise.† In France it must be payable to order; if it were not so, it is clear that the rule requiring the consideration to be expressed would be an absurdity. In England a bill originally payable to order becomes payable to bearer when indorsed in blank. In France an indorsement in blank merely operates as a procuration. An indorsement, to operate as a negotiation, must be an indorsement to order, and must state the consideration; in short, it must conform to the conditions of an original draft. In England if a bill be refused acceptance, a right of action at once accrues to the holder. This is a logical consequence of the currency theory In France no cause of action arises unless the bill is again dishonoured at maturity; the holder in the meantime is only entitled to demand security from the drawer and indorsers In England a sharp distinction is drawn between current and overdue bills. In France no such distinction is drawn. In England no protest is required in the case of an inland bill, notice of dishonour alone being sufficient. In France every dishonoured bill must be protested. Grave doubts may exist as to whether the English or the French system is the soundest and most beneficial to the mercantile community, but this is a problem which it is beyond the province of a lawyer to attempt to solve.

M. D. C.

November, 1878.

* This rule is said to be now obsolete; but the Code remains unaltered.

+ See Stewart v. Hodges (1692), 12 Mod. 36.

d

[EXPLANATORY HEAD NOTE.-The term "Bill," as used in the articles of this Digest, includes, mutatis mutandis, Promissory Note and Cheque as well as Bill of Exchange. When a provision does not apply equally to Notes and Cheques, the full expression "Bill of Exchange" is used. See Introd., p. iv., and head note to chaps. IX. and X.]

Art. I. A Bill of Exchange is an unconditional Bill of Exchange order in writing, addressed by one person to another, defined." signed by the person who gives it, requiring the person to whom it is addressed to pay on demand, or at a determinable future time, a sum certain in money to, or to the order of, a specified person, or to bearer.

NOTE. A Bill of Exchange is frequently called a "Draft." By English law no particular form of words is requisite to its validity (Art. 10), and it need not necessarily be negotiable (Art. 8). A comparison of the above definition with the definition of "Bill of Exchange" in the Stamp Act, 1870, will show that many instruments require to be stamped as bills to which the mercantile incidents of a bill do not attach. By German Exchange Law, Art. 4, a bill must expressly mention that it is a Bill of Exchange. Subjoined are two common forms :

B