not according to the law of nationality, but probably for mercantile purposes it must be determined by the lex loci contractus. Question 36 (b). The validity of a bill as regards requisites in form is determined by the law of the place of issue and its validity as regards the requisites in form of the supervening contracts, such as acceptance or indorsement or acceptance under protest, is determined by the law of the place where such contract was made. If, however, a bill issued outside the United Kingdom conforms in matter of form to the law of the United Kingdom, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold, or become parties to it in England. (Bills of exchange act. sec. 72, subsecs. 1 and 6.) Question 36 (c). The duties of the holder ("formalités ") with respect to presentment for acceptance or payment and the necessity for or sufficiency of a protest or notice of dishonor, are determined by the law of the place where the act is done or the bill is dishonored. (Bills of exchange act, sec. 72, subsec. 3.) Question 36 (d). The law of the United Kingdom disregards the fiscal laws of other countries. A bill drawn out of but negotiated in the United Kingdom has to conform to the stamp laws of the United Kingdom. If a bill is issued out of the United Kingdom, it is not invalid for English purposes by reason only that it is not stamped in accordance with the law of the place of issue. (Bills of exchange act, sec. 72, subsec. 1 (a).) No. 11.] II. INSTRUCTIONS TO THE BRITISH DELEGATION. Sir Edward Grey to Sir G. Buchanan.1 FOREIGN OFFICE, June 16, 1910. SIR: With reference to previous correspondence on the subject of the forthcoming international conference at The Hague on the laws relating to bills of exchange, I transmit herewith for your guidance two copies of the instructions to the British. delegates, which have been received from the board of trade and have been approved. I am, etc., [Inclosure in No. 11.] E. GREY. INTERNATIONAL CONFERENCE ON THE LAWS RELATING TO BILLS OF EXCHANGE. INSTRUCTIONS TO THE BRITISH DELEGATES. The British delegates to The Hague conference on the unification of the laws relating to bills of exchange are empowered to discuss any proposals that may be brought before the conference, and in so doing they should emphasize the facts, first, that the rules of law in force in the United Kingdom have been adopted substantially unchanged in the British oversea dominions; and secondly, that the English law merchant is an integral part of the common law and, broadly speaking, English law draws no distinction between traders and nontraders. There are accordingly in the United Kingdom no special tribunals of commerce, and any dispute which may arise on a bill of exchange is determined by the ordinary tribunals as part of their ordinary business. As a general rule the British delegates will not hold out any hope that English rules of law are likely to be substantially modified and brought into conformity with continental rules, particularly in cases where the English rule prevails not only in the United Kingdom, but also throughout the English-speaking world. It will be open for them, however, to argue in favor of the English rules and to point out to the foreign delegates the advantages of adopting them. There are, nevertheless, certain points on which the English law is doubtful or where there are points of divergence between the different English-speaking communities. In such cases it would evidently be desirable if a uniform rule could be arrived at, and the uniformity of the rule is probably of more importance than the nature of the rule itself. 1. Discrepancies between words and figures. The English act provides for words prevailing over figures, but makes no provision for discrepancies where the sum payable is expressed more than once in words or more than once in figures. German law provides that in such cases the lower sum shall prevail, and the German rule accords with the practice of English bankers, though it has not the sanction of positive law. There appears to be no objection to adopting the German rule into our law. 2. Form of acceptance. As English law now stands, an acceptance on the back of a bill is clearly irregular, but perhaps not invalid. A uniform rule providing that an acceptance must be written on the face of the bill would be convenient. 1 Also to Sir. M. D. Chalmers and Mr. F. H. Jackson. 3. Limitation of time for presentment or negotiation of demand drafts. In the United Kingdom a bill payable on demand (other than a check) must be presented for payment within a reasonable time after issue in order to make the drawer liable, and within a reasonable time after indorsement to make the indorser liable. So, too, a bill payable after sight must either be presented for acceptance or negotiated within a reasonable time after it comes into the holder's possession. The foreign codes fix definite limits of time in all these cases, and there is a good deal to be said for adopting fixed limits if convenient limits could be agreed on. The present foreign limits are too long, according to English business notions. 4. Drawee's time of deliberation as to acceptance. Under English law, when a bill is duly presented for acceptance and is not accepted within the "customary time," the person presenting it must treat it as dishonored by nonacceptance. The "customary time" is usually taken to be one business day. Most of the foreign codes and some of the States of the United States fix the time for deliberation at 24 hours. The English rule is too vague, and the 24-hour limit, if strictly construed would give rise to much dispute. If a uniform rule could be arrived at that the drawee should be allowed to retain the bill till the close of business hours on the next succeeding business day, this would appear to be a desirable compromise. 5. Presentment for acceptance. Under English law if a bill payable after date is presented for acceptance and dishonored, the holder must immediately give notice of dishonor; and (if the bill be a foreign bill) have it protested for nonacceptance. Under the continental codes the holder is under no such obligation; he can not sue on the bill until it is overdue, but he can demand security from the drawer and indorsers, and the tribunals of commerce provide the necessary machinery. As at present advised, it seems very undesirable to depart from the English rule. The drawer and indorsers are entitled to prompt notice to enable them to protect their interest when the bill is dishonored. When the drawer and indorsers are in a foreign country it is difficult to see how they can be compelled to give security; but it will be interesting to find out how this matter is dealt with in practice under the foreign codes. 6. Place of payment. As English law stands at present, if the drawer of the bill indicates a place of payment, but the bill is accepted payable at a different place, the acceptance is nevertheless a general acceptance. There is a good deal to be said for adopting the rule, which prevails in many countries, that if the drawer expressly specifies a place of payment, and the acceptor accepts the bill payable at a different town or place, the holder shall be entitled to treat this as a qualified acceptance. 7. Days of grace. England and the English colonies and a few of the States in the United States are the only countries which retain days of grace. They have been. almost uniformly abolished. There is no valid reason for their retention, and it would be exceedingly convenient that bills throughout the world should be payable according to their tenor. 8. Bills maturing on nonbusiness days. In England a distinction is drawn between bills which fall due on commonlaw holidays, such as Sunday, Christmas Day, and Good Friday, and bills which fall due on bank holidays, and the rules are exceedingly complicated. It does not appear that any such distinction is drawn in any other country. The only argument in favor of the English rule is this: When a bank holiday follows or precedes a Sunday there is an accumulation of maturing bills, and it is convenient to have the maturity of some thrown back, while the maturity of others is thrown forward. But the English rule often gives rise to mistakes, and probably the advantages of having a uniform rule throughout the world would largely exceed any inconvenience that might arise from the temporary press of business. 9. Protest for better security. When the acceptor of a bill becomes bankrupt before a bill matures, the holder may protest it for better security. The only effect of this in England is that the holder may take an acceptance for honor, if he can get one. Under the continental codes the holder can demand security from the drawer, and, failing the drawer, from the indorsers. There is no machinery in England for any such procedure, and it is difficult to see how it can operate when the drawer is in a foreign country. It would be interesting to find out how the continental rule works in practice, though the British delegates should certainly not pledge themselves to recommend its adoption. 10. Effects of dishonor. Under English law the holder of a bill has, as a general rule, one day allowed him for giving notice of dishonor; and if he gives notice to his immediate indorser, that indorser also has a day for passing it on. Continental codes allow a longer time, Germany, for instance, allowing two days. If the uniform rule of two days could be arrived at, it might be desirable to adopt it. There is also a good deal to be said for the rule which prevails in some foreign countries under which the drawer of an unaccepted bill is not absolutely discharged by any irregularity in giving notice of dishonor, a distinction being drawn between the position of the drawer and the indorsers. Under English law a foreign bill must be noted for protest on the day of its dishonor. This often gives rise to difficulty in places outside London, where notaries are scarce and the procedure for dealing with foreign bills is unfamiliar. There is a good deal to be said for the German rule, which allows a bill to be noted for protest as soon as it is dishonored, but does not require this to be done until the next day. 11. Stamp duties. The bankers' institute recommend that "following what is believed to be the universal rule in other countries, the penalty for a breach of the stamp laws should, in all cases, be a monetary one, and not the inability to recover on the instrument." This is a matter for the English revenue authorities, but it will be interesting to hear what the foreign delegates have to say on the question, and to find out how far the foreign laws effectively protect the revenue. 12. Signature by stamp. A signature by stamp is clearly irregular, if not invalid, according to English law, and probably its express prohibition could be universally agreed on. 13. Oricntal indorsements. The bankers' institute suggest that oriental indorsements should be accompanied by translations by the last indorser. It is difficult to see how this rule could be enforced, but if the conference can suggest any workable and uniform rule for dealing with indorsements in oriental characters, there would probably be little difficulty in getting it adopted in Engalnd. 14. Forged indorsements. Under English law the payer of a bill is responsible for the authenticity of the indorsements, that is to say, if he pays the bill to a person who holds it under a forged indorsement the payment is invalid, and the loss falls on the payer. Under some of the continental codes, if the indorsement appears to be in order the payer is protected, just as a banker in England is protected if he pays a check held under a forged indorsement. The English rule is so well settled and so strongly supported by the mercantile community (bankers excepted) that there is no prospect of its being altered. But there is a good deal to be |