PRELIMINARY DRAFT OF THE UNIFORM LAW ON BILLS OF EXCHANGE AND PROMISSORY NOTES PAYABLE TO ORDER.

CHAPTER I.-Creation and form of bills of exchange.

ARTICLE 1. A bill of exchange must contain

1. A statement that is a bill of exchange.1 This statement must be written in the body of the instrument and expressed in the language of the instrument.

2. An unconditional order to pay a sum certain in money.

3. The name of the party who is to pay.

4. A statement of the time of payment.

5. A statement of the place where payment is to be made.

6. The name of the payee.

7. A statement of the place where the bill is drawn, and the date of drawing.

8. The signature of the drawer.

A bill of exchange may be drawn in one place on another, or may be drawn and payable in the same place. It is not necessary that it should specify the value given therefor.

ART. 2. An instrument in which any of the statements indicated in article 1 are wanting, does not constitute a bill of exchange, except in the cases mentioned in the next paragraph.

A bill of exchange in which no time of payment is indicated is deemed to be payable at sight.

A bill of exchange which does not indicate the place of payment is deemed to be payable at the residence (domicile) of the drawee, provided that this residence is either expressly mentioned in the bill, or can be clearly gathered from the terms of the bill.

BILLS OF EXCHANGE ACT, 1882. (45 AND 46 VICT., CAP. 61.)

SEC. 3. (1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to, or to the order of, a specified person, or to bearer.

(2) An instrument which does not comply with these conditions, or which orders any act to be done in addition to the payment of money is not a bill of exchange.

(4) A bill is not invalid by reason(a) That it is not dated;

(b) That it does not specify the value given, or that any value has been given therefor;

(c) That it does not specify the place where it is drawn or the place where it is payable.

And see sections 6 and 7.

See above, and see section 10 (1), which provides that a bill is payable on demand in which no time of payment is expressed.

A bill of exchange which does not indicate the place where it is drawn is deemed to have been drawn in the place where the drawer resides, but subject to the like conditions.

ART. 3. A bill of exchange may be drawn payable to the drawer's order.

The drawer and drawee may be the same person. In this case the instrument is deemed to be a promissory note, if it is payable to the drawer's order.

A bill of exchange may be drawn for the account of a third person.

It may be drawn payable to bearer.1

ART. 4. Subject to the case of bills payable to bearer, every bill of exchange, even if it is not expressly drawn payable to order, may be transferred by endorsement.

The drawer may prohibit the transfer of a bill of exchange by inserting therein the words "not to order," or any equivalent expression. In this case the bill can only be transferred with the formalities and effects of an assignment according to the civil law ("cession ").

ART. 5. A bill of exchange may be made payable at the residence of a third person in the place where the drawee resides. It may also be made payable at some other place.

A bill of exchange may indicate a person who is to pay it in case of need. The drawer may also expressly indicate a person who is to accept it in case of need.

ART. 6. In the case of a bill of exchange payable at sight, or at a cer

SEC. 5. (1) A bill may be drawn payable to, or to the order of, the drawer; or it may be drawn payable to, or to the order of, the drawee.

(2) Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note. And see section 3.

SEC. 8. (1) When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but is not negoti able.

(2) A negotiable bill may be payable either to order or to bearer.

(3) A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an indorsement in blank.

(4) 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.

(5) Where a bill, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.

See section 45 (4).

SEC. 15. The drawer of a bill and any indorser may insert therein the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonored by nonacceptance or nonpayment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may think fit.

SEC. 9. (1) The sum payable by a bill is a sum certain within the mean

tain period after sight, the drawer may insert a provision that the amount shall be payable with interest. A provision for payment of interest in any other bill of exchange is to be disregarded ("réputée non écrite ").

The rate of interest should be specified. If it is not specified, the rate shall be 5 per cent.

Interest runs from the date of the bill of exchange, in the absence of any stipulation to the contrary.

ART. 7. If the sum payable by a bill of exchange is expressed in words, and also in figures (and there is a discrepancy) the sum expressed in words is the sum payable.

If the sum payable is expressed more than once in words, or more than once in figures (and there is a discrepancy), then the lesser sum is the sum payable.

ART. 8. If a bill of exchange bears the signature of parties not having capacity to contract, the liability of the other parties to the bill who have signed it is not thereby affected.

ART. 9. Whoever signs a bill of exchange as agent or representative of another person is himself liable on the bill when he had no authority to act for that person, or when he has exceeded his powers.

ing of this act, although it is required to be paid

(a) With interest.

*

(3) Where a bill is expressed to be payable with interest, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated from the issue thereof.

SEC. 9. (2) Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable.

Assumed, but not expressly stated, in sections 54 (2) and 55 (1) and (2).

SEC. 26. (1) Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability.

(2) In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favorable to the validity of the instrument shall be adopted.

SEC. 31. (5) Where any person is under obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to negative personal liability.

SEC. 55. (1) The drawer of a bill by drawing it

(a) Engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonored he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonor be duly taken.

SEC. 16. The drawer of a bill, and any indorser, may insert therein an express stipulation—

(1) Negativing or limiting his own liability to the holder.

(2) Waiving as regards himself some or all of the holder's duties.

SEC. 32. (2) It must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorsement which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a negotiation of the bill.

SEC. 33. Where a bill purports to be indorsed conditionally the condition may be disregarded by the payer, and payment to the indorsee is valid whether the condition has been fulfilled or not.

SEC. 31. (1) A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill.

(2) A bill payable to bearer is negotiated by delivery.

(3) A bill payable to order is negotiated by the indorsement of the holder completed by delivery.

SEC. 56..(2) The indorser of a bill by indorsing it

(a) Engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonored he will compensate the holder or a subsequent indorser who is compelled to pay it, provided that the requisite proceedings on dishonor be duly taken.

And see section 16, ante, page 85.

SEC. 34. (1) An indorsement in blank specifies no indorsee, and a bill so indorsed becomes payable to bearer.

(2) A special indorsement specifies the person to whom, or to whose order, the bill is to be payable.

(3) The provisions of this act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement.

(4) When a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person.

SEC. 15. The drawer of a bill and any indorser may insert therein the name of a person to whom the holder may resort in case of need; that is to say, in case the bill is dishonored by nonacceptance or nonpayment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not, as he may think it.

SEC. 16. The drawer of a bill and any indorser may insert therein an express stipulation—

(1) Negativing or limiting his own liability to the holder.

himself

(2) Waiving as regards some or all of the holder's duties. And see section 35.

SEC. 24. Subject to the provisions of this act, where a signature on a bill is forged or placed thereon without the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from settling up the forgery or want of authority.

Provided that nothing in this section shall affect the ratification of an unauthorized signature not amounting to a forgery.

SEC. 8. (3) A bill is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank.

SEC. 38. The rights and powers of the holder of a bill are as follows— (1) He may sue on the bill in his

own name

(2) Where he is a holder in due course, he holds the bill free from any defect of title of prior parties, as well