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Bill of exchange defined.
this Act relating to bills of exchange, are with a few exceptions,
London, 1st January, 1883.
Three months after date pay to our order the sum of one hundred
J. SMITH & Son.
(y) Before this Act too it was held that the order must be to pay absolutely, in other words, the payment must not be made to depend on a contingency, Story on Bills, s. 46; Palmer v. Pratt, 9 Moore, 358; 2 Bing. 185; Carlos v. Fancourt, 5 T. R. 482; Kingston v. Long, 4 Dong. 9; Lovell v. Hill, 6 C. & P. 238; Richardson v. Martyr, 25 L. T. 64; it must not be payable out of another person's fund, Dawkes v. De Lorane, 3 Wils. 209; Clarke v. Percival, 2 B. & Ad. 660; Robins v. May, 11 A. & E. 213; but see Ellison v. Collingridge, 9 C. B. 570. The following document was held not to be a promissory note, viz. : “We promise to pay on the death of George Hindshaw, provided he leaves either of us sufficient to pay the said sum, or if we otherwise shall be able to pay it," Roberts v. Peake, 1 Burr. 323. The makers of a joint and several note signed on the back of it a memorandum in these words: “The within note is taken for security of all such balances as James Marriott may happen to owe to Thomas Leeds & Co., not extending further than the within-named sum of £200; but this note is to be in force for six months, and no money is liable to be called for sooner in any case.” It was held that in the hands of the payee the document was an agreement, and not a promissory note; but that in the hands of a bonâ fide holder who received it as a promissory note, it might possibly be considered as such, Leeds v. Lancashire, 2 Camp. 205; sce also Haussoullier v. Hartsinck, 7 T. R. 733. In Pearson v. Garrett, 4 Mod. 242, it was held that an action brought by the payee of a note by which the maker promised to pay him sixty guineas within two months after the maker shall have married such a person, cannot be sustained, for such a note was not within the custom of merchants. It has been also decided that a promissory note to pay money so many days after the defendant should marry is not a negotiable note within that statute, Beardsley v. Baldwin, 2 Stra. 1151. Any promise, order, or undertaking, therefore, which is dependent on any such contingency, is not a promissory note or bill of exchange. For the same reason a note promising to pay "on the sale or produce, immediately when sold, of
Bill of exchange defined.
the White Hart, St. Albans, Herts, and the goods, &c., value received,”
And I hereby deposit in his hands twenty two Union Bank shares, as particularised at foot, by way of pledge or security for the due payment of the said sum of Company's rupees twenty thousand, as aforesaid ; and in default thereof, hereby authorize the secretary for the time being, forthwith, either by private or public sale, absolutely to
Bill of exchange defined.
sell or dispose of the said twenty-two Union Bank shares so deposited with him; and out of the proceeds of sale to reimburse himself the
h said loan of Company's rupees twenty thousand, and interest thereon as aforesaid, he rendering to me any surplus which may be forthcoming from such sale. And I hereby promise and undertake to make good whatever, if anything, may be wanting over and above the proceeds of such sale, to make up the full amount of the said loan of Company's rupees twenty thousand, and interest as aforesaid,” Storm v. Stirling, 3 E. & B. 832, affirmed by the Court of Exchequer Chamber, 6 E. & B. 333. See further as to this point sect. 83, note (b). It has been held also that if the contingency or event on the happening of which a promise or an order to pay is made or given, must inevitably happen, the document is a good bill or note. Thus a promise to pay within two months after a king's ship is paid off, was held to be a good promissory note, Evans v. Underwood, 1 Wils. 262; see also Andrews v. Franklin, 1 Stra. 24; see these cases discussed in a note on p. 334 of 1 Sel. N. P. 13th ed., see sect. 11, subs. 2. So in Roffey v. Greenwell, 10 A. & E. 222, a promise on behalf of oneself and executors to pay F. H. or her executors one year after his death was held to be a good promissory note; see also Cooke v. Colehan, 2 Stra. 1217; Sackett v. Palmer, 25 Barb. 179; a note of hand, however, payable to an infant, when he shall come of age, specifying the day, is a good note, Goss v. Nelson, 1 Burr. 226. A bill or note may be made payable by instalments, Worley v. Harrison, 3. A. & E. 669; Oridge v. Sherborne, 11 M. & W. and it may also provide that on default of one instalment the whole shall become payable on demand, Carlon v. Kenealey, 12 M. & W. 139; Cook v. Horne, 29 L. T. N. S. 369; the time for the payment of the instalments must be stated in it, Moffat v. Edwards, C. & M. 16. As is frequently the case a bill may be directed to be paid “
without further advice." See Chitty on Bills (9th Edition), 162.
(20) See Gray v. Milner, 8 Taunt. 739; Miller v. Thompson, 3 M. & G. 576; Davis v. Clarke, 6 Q. B. 16; see also Polhill v. Walter, 3 B. & Ad. 114; Jackson v. Hudson, 2 Camp. 447; and Reynolds v. Peto, 11 Ex. 418.
(w) In Geary v. Physic, 5 B. & C. 234, it was held that an indorsement written with pencil is valid. In that case Abbott, C.J., in giving judgment said: “There is no authority for saying that where the law requires a contract to be in writing, that writing must be in ink. The passage cited from Lord Coke shews that a deed must be written on paper or parchment, but it does not show that it must be written in ink. That being sc, I am of opinion that an indorsement on a bill of exchange may be by writing in pencil.” It follows that any signature to a negotiable instrument may be written with pencil ; and such signature may be made by a mark, George v. Surrey, 1 M. & M. 516. An instrument in the form of a bill of exchange, addressed
as per advice"
to and accepted by the defendant, but without the names of either a
S. 3. payee or drawer, is neither a bill of exchange nor a promissory note,
Bill of but only an inchoate instrument. McCall v. Taylor, 19 C. B. N. S. exchange 301 ; 34 L. J. C. P. 365 ; see also Ex parte Hayward, In re Hayward,
defined. L. R. 6 Ch. 546; 40 L. J. Bankr. 49. Without the drawer's signature an instrument in all other respects complete as a bill, and signed even by the acceptor, is not a bill of exchange, Stoessiger v. South Eastern Railway Company, 3 E. & B. 557; as to inchoate instruments and the power of filling them in, see sect. 20.
(v) The person giving the order is the drawer. As to the necessity Ind. Act, s. 7. for the signature of the drawer see the last note.
(t) No precise words are requisite for the order or promise to pay, Morris v. Lee, 2 Ld. Raym. 1397; 1 Stra. 629 ; the question is whether it imports a promise ; Brooks v. Elkins, 2 M. & W. 74. In Brown v. De Winton, 6 C. B. at p. 376, it is said that though no precise form is requisite, the instrument ought to have the essentials of a contract. See also Peto v. Reynolds, 9. Ex. at p. 416. But a request is not sufficient, Little v. Slackford, 1 M. & M. 171.
(s) The person to whom it is addressed is the drawee of the instru- Ind. Act, s. 7. ment. By sub-sect. (1) of sect. 6 of this Act the drawee must be named or otherwise indicated in a bill with reasonable certainty. See further that sect. and the notes thereto. By sub-sect. (1) of sect. 5 of this Act a bill may be drawn payable to, or to the order of the drawer. By the sub-section just referred to, a bill may be drawn payable to or to the order of the drawee. See further that subsection and the notes thereto.
(r) The time of payment is generally stated in the bill or note, which, however, must be made payable at a time determinable, or on an event which must happen at some time or other, see sect. 11, subs. 2 ; also Andrews v. Franklin, 1 Stra. 24; Cooke v. Colehan, 2 Stra. 1217; Roffey v. Greenwell, 10 A. & E. 222; Pearson v. Garret, 4 Mod. 242; Evans v. Underwood, 1 Wils. 262; Goss v. Nelson, 1 Burr. 226; Ex parte Tootell, 4 Ves. 372; Clayton v. Gosling, 5 B. & C. 360; see also notes (y) hereto. A bill or note which is payable to bearer generally, that is to say, on which no time of payment is specified, is payable on demand, as is now provided by division () of sub-sect. (1) of sect. 10 of this Act, which see, as also the notes thereto.
(9) By section 11 of this Act a bill is payable at a determinable future time within the meaning of this Act which is expressed to be payable : (1.) At a fixed period after date or sight; (2.) On or at a fixed period after the occurrence of a specified event which is certain to happen. See that section and the notes thereto. See also note (y) hereto.
(p) The amount of the bill or note must be a sum certain. Thus in Bolton v. Dugdale, 4 B. & Ad. 619, the following document was held not to be a promissory note, viz. : “ Received and borrowed
Bill of exchange defined.
of A. B. £30 which I promise to pay with interest at the rate of £5 per cent. I also promise to pay the demands of the sick club at H. in part of interest, and the remaining stock and interest to be paid on demand to the said A. B;" nor a document by which the party promises to pay a sum certain, and all such other sums as by reference to his books he owed, Smith v. Nightingale, 2 Stark. 375; but see Leeds v. Lancashire, 2 Camp. 205; Jones v. Simpson, 2 B. & C. 318. In Ayrey v. Fearnsides, 4 M. & W. 168, it was held that a document whereby one promised to pay a sum certain and all fines according to rule was not a promissory note. As to bills and notes payable with interest, see Warrington v. Early, 2 E. & B. 763; Ayrey v. Fearnsides, supra ; and as to such instruments payable by instalments, see Origde v. Sherborne, 11 M. & W. 374; Carlon v. Kenealy, 12 M. & W. 139 ; 13 L. J. Ex. 64 ; see also Worley v. Harrison, 3 A. -& E. 669; Story on Notes, s. 28. But the rate of the interest payable on the bill or note must be fixed. Thus an instrument whereby the maker promises to pay £400 with “ bank interest” is not a promissory note, Tennent v. Crawford, Court of Sess. Cas., 4th series, Vol. 5, p. 433. As to interest see division (b) of sub-sect. (1) of sect. 57 of this Act and the notes thereto; see also sect. 9 of this Act and the sub-sections thereof and the notes thereto.
(0) Bills and notes must be for the payment of money only; thus an acceptance to pay by another bill is no acceptance, Russell v. Phillips, 14 Q. B. 891, 19 L. J. Q. B. 227; Petit v. Benson, Comb. 452 ; Davies v. Wilkinson, 10 A. & E. 98. As to promissory notes containing a pledge of security, see sect. 83, subs. 3.
(n) A specified person, i.e. the payee; he need not be named, but must be a person who is capable of being ascertained when the bill is drawn, Gray v. Milner, 8 Taunt. 739; and the payee must not be uncertain, see Storm v. Stirling, 6 E. & B. 333. And now by sub-sect. (1) of sect. 7 of this Act, where a bill is not payable to bearer, the payee must be named or otherwise indicated therein with reasonable certainty. See sub-sects. (1) and (2) of sect. 7 of this Act, and the notes thereto. As to extrinsic evidence for identifying the payee, see Soares v. Glyn, 8 Q. B. 24. By sub-sect. (4) of sect. 8, a bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable. So that it would follow from the sub-section just referred to that if a bill be payable to a particular person, it is payable to his order and is therefore negotiable, thus setting aside the decisions wherein it was held that unless a bill or note be payable to order or to bearer, it is not negotiable, Hill v. Lewis, 1 Salk. 133; Smith v. Kendall, 6 T. R. 123; Plimley v. Westley, 2 Bing. N. C. 251. If a bill be payable to the order of a particular person, it is payable to him or his order at his option ; sect. 8, subs. 5; Smith v. McClure, 5 East, 476. It has been held that the addition of the words “or order” does not render the
Ind. Act, s. 7.