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S. 3. Bill of exchange defined.

this Act relating to bills of exchange, are with a few exceptions, equally applicable to promissory notes. There is no particular form or language necessary to make a document a valid bill of exchange, any words will do, provided they embrace the different points of the definition given by this section. The following is a common form of a bill of exchange, viz.:

£100. Os. Od.

LONDON, 1st January, 1883.

Three months after date pay to our order the sum of one hundred pounds. Value received.

To Messrs. JONES BROTHERS.

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; see 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

the White Hart, St. Albans, Herts, and the goods, &c., value received,"
was held not to be a promissory note within the statute 3 & 4 Anne,
c. 9, Hill v. Halford, 2 B. & P. 413; but see Dixon v. Nutall, 6 C. &
P. 320. A promise to pay £50 "at such period of time that my
circumstances will admit without detriment to myself or family," is
not a note; Ex parte Tootell, 4 Ves. 372. "At 12 months date I
promise to pay Messrs. R. F. & Co. £500, to be held by them as
collateral security for any moneys now owing to them by B., which
they may be unable to recover on realizing the securities they now
hold, and others which may be placed in their hands by him," is not
a note; Robins v. May, 11 A. & E. 213. In Ayrey v. Fearnsides,
4 M. & W. 168, a document whereby the defendants promised to pay
the plaintiffs or order the sum of £13 Os. Od. for value received, with
interest at £5 per cent. and all fines according to rules, was held not to
be a promissory note. A promise to pay a certain sum by instalments,
but it was declared that "all installed payments thereupon from and
after the decease of the plaintiff should cease," is not a note; Worley
v. Harrison, 3 A. &. E. 669. In Shenton v. James, 5 Q. B. 199,
the following document was held not to be a promissory note, viz.:
"On demand I promise to pay W. S. £50 in consideration of foregoing
and forbearing an action in the Queen's Bench for damages ascertained
by consent to amount to that sum by reason of the injury sustained
by his wife in respect of my liability for non-repair of a footway." An
order for a sum payable ninety days after sight or when realised was
held not to be a bill of exchange, Alexander v. Thomas, 16 Q. B.
333. In Drury v. Macaulay, 16 M. & W. 146, the following document
was held not to be a promissory note: "Drury v. Vaughan. In con-
sideration of W. Drury not taking any further proceedings in the above
actions, I hereby undertake with the said W. Drury that I will pay
him £3 5s. Od. every quarter of a year from this day until the whole of
the principal money now due from Messrs. J. & T. Vaughan to Mr.
Drury, £26 1s. Od., with lawful interest, be paid and satisfied; the first
of such quarterly payments to become due on the 30th October next.
It is understood that this undertaking is not to be a release or discharge
of the note signed by Messrs. Vaughan to the said W. Drury on the 9th
March, 1840, but as an additional security for the above-mentioned
amount now due on such note, with the interest." The following
document was also held not to be a promissory note:
after date I promise to pay to the secretary for the time being of the
Indian Laudable and Mutual Assurance Society or order, Company's
rupees twenty thousand, with interest at the rate of six per cent. per
annum. 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

66 Nine months

S. 3.

Bill of exchange defined.

S. 3.

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
said loan of Company's rupees twenty thousand, and interest thereon
as aforesaid, he rendering to me any surplus which may be forth-
coming 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. Green-
well, 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. 374; 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 as per
advice or "without further advice."
See Chitty on Bills (9th Edition), 162.

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(x) 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

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to and accepted by the defendant, but without the names of either a payee or drawer, is neither a bill of exchange nor a promissory note, but only an inchoate instrument. McCall v. Taylor, 19 C. B. N. S. 301; 34 L. J. C. P. 365; see also Ex parte Hayward, In re Hayward, 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 instru

ments and the power of filling them in, see sect. 20.

S. 3.

Bill of exchange defined.

(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 (b) 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

S. 3.

Bill of exchange defined.

Ind. Act, s. 7.

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

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