Effect of the alteration of a bill, &c.

But where the drawee of a bill of exchange payable at three months after date, requested the drawer that it might be altered to four months, to which the latter consented, and which was done whilst in his hands and before it was negotiated or accepted, it was held that such alteration did not invalidate the bill, it not having been a complete instrument prior to the alteration'.

If upon a bill being presented for acceptance, the payee alters it as to the time of payment, and accepts it so altered, he vacates the bill as against the drawer and indorsers; but if the holder acquiesces in such alteration and acceptance, it is a good bill as between him and the acceptor; and keeping the bill and presenting it for payment at the deferred period, is proof of such acquiescence; and the holder cannot afterwards maintain an action on the case against the acceptor, for thereby destroying the bill. The effect of an alteration in the acceptance of a bill will be hereafter considered. It is proper to observe, that alterations and erasures will frequently give the transaction the appearance of fraud 3.

Liability of the drawer.

UPON delivery of the bill to the payee or indorsee the liability of the drawer becomes complete.-The act of drawing a bill, implies an undertaking from the drawer to the payee, and to every subsequent holder fairly entitled to the possession, that the person on

Kennerly. Nash, 1 Stark. 452.

2 Paton v. Winter, 1 Taunt. 420.-See 6 East. 309. The drawee altered the time of payment of a bill from one month to two and accepted it; the holder kept it two months and then presented it for payment. The court held that this was an acquiescence in the alteration, and directed a nonsuit to be entered in an action on the case brought by the holder against the acceptor, for having mutilated the bill.

3 Singleton, Butler, 2 Bos. & Pul, 283.

drawer.

whom he draws is capable of binding himself by his Liability of the acceptance; that he is to be found at the place where he is described to reside, if that description be mentioned in the bill; that if the bill be duly presented to him, he will accept in writing on the bill itself, according to its tenor; and that he will pay it when it becomes due if presented in proper time for that purpose. This engagement is in all its parts absolute and irrevocable, and therefore where A. in England drew a bill of exchange on B. in a foreign country, who, by the laws of that country was prohibited from paying it, although it was urged that the undertaking of the drawer did not extend to the case of a prohibition to accept or pay the bill, imposed by the law of a foreign country in which the drawee resided, yet it was ruled in an action against the drawer, that this was no defence, it not being necessary for the holder to inquire for what reason the bill was not paid'. But if the payment or acceptance be prohibited by the law of this country, it is otherwise. The drawer will also be equally liable, whether he draw the bill

'Mellish v. Simeon, 2 Hen. Bla. 378.-Poth. pl. 58.-Tooting v. Hubbard, 3 Bos. & Pul. 291.

Mellish v. Simeon, 2 Hen. Bla. 378. A bill drawn in London upon Paris, and negotiated through Holland; before it became due, the French government prohibited the payment of any bill drawn in England, in consequence of which, it was dishonoured and sent back through the different hands by which it had before been negotiated to London; the re-exchange between Paris and Holland raised the bill from £603. 19s. 10d. to £905. 138. 9d. and the re-exchange between Holland and London, to £913. 4s. 3d. which the plaintiff, the payee, paid; and upon an action by him against the drawer, Eyre, C. J. left it to the jury, whether the defendant was liable for the re-exchange occasioned by returning the bill through Holland, and they found that he was. An application was made for a new trial, upon the ground that the defendant was not liable for the re-exchange, because there was no default in him, the payment being prohibited by the government of France. But the court held it immaterial why the bill was not paid; that as it was not paid, he was liable to all the consequences, of which the re-exchange was one, and the rule was refused.

Pollard. Herries, 3 Bos. & Pul. 340. Lord Alvanley, C. J. It cannot be disputed, that whatever be the nature of the contract into which a subject of this country enters, he is excused from the performance of it if the laws of his country interpose and forbid the performance.

Liability of the drawer.

on his own account or as agent of a third person'. And we have also seen, that a person signing his name on a blank paper stamped with a bill-stamp, will be liable to pay to a bonâ fide holder any sum inserted in the bill, and warranted by the stamp 2.

On failure of the performance of this engagement, the drawer of a bill will immediately, and before the time specified in the bill for payment, be liable to an action, not only for the principal sum, but also in certain cases for interest, re-exchange, and costs, as a consequence of the bill not being honoured. Besides this obligation to the payee and the holder, the drawer is also bound to indemnify the acceptor, if he accepted for his accommodation for any loss he may sustain in consequence of his acceptance'. These obligations, though absolute and irrevocable, may be discharged by the laches or neglect of the holder, or by other means which will be spoken of hereafter. If a bill be drawn abroad on a person in this country, and the latter refuse acceptance or payment, the drawer will, if discharged by the foreign law, be discharged in this country. Where an annuity was

Le Feuvre v. Lloyd, 5 Taunt. 749.—1 Marsh. 318. S. C.—Ante, 36,7. note 4.

2

Usher and others v. Dauncey and others, 4 Campb. 97.-Ante, 32, note 1. and 114, 5.

3 Bright v. Purrier, Bul. Ni. Pri. 269. A foreign bill payable 120 days after sight, was presented for acceptance, but acceptance being refused, the holder brought an action immediately against the drawer; the defendant objected that he was not liable till the expiration of the 120 days, and offered to call witnesses to prove that such was the custom of merchants; but Lord Mansfield said, the law was clearly otherwise, and refused to hear the evidence; so the plaintiff recovered.

Milford v. Meyor, Dougl. 54. Indorser against the drawer of a bill, which the drawee had refused to accept. On a rule to shew cause why the defendant should not be discharged, the ground stated was, that the bill was not due. Per curiam. It is settled that if a bill of exchange is not accepted, an action on the bill will lie immediately against the drawer, because his undertaking that the drawee shall give him credit, is not performed.

* Mellish v. Simeon, 2 Hen. Bla. 379.-Ante, p. 137, n. 1.-Poth. pl. 62.

5 Poth, pl. 97, 8, 9.

Cook v. Tower, 1 Taunt. 372.-Potter v. Brown, 5 East. 131.

drawer.

granted in consideration of a bill accepted, which Liability of the was dishonoured by the acceptor, but paid by the drawer on notice, it was held that this was not such a non-payment of the bill as to vacate the annuity, though the bill was accepted for the accommodation of the drawer, who undertook to furnish assets, but neglected to do so.

140

CHAPTER IV.

OF THE INDORSEMENT AND TRANSFER OF BILLS, &C. THOUGH Inland Bills are frequently accepted before they are indorsed, yet as all bills may be transferred before acceptance, we will consider the points relative to the transfer of bills and notes in this chapter.

It has been already observed', that it is the transferrable quality of bills and notes which principally distinguishes them from other contracts, and that on account of this property, and of their utility in mercantile transactions, they have been peculiarly favoured by our courts. The following points relating to the transfer of bills are to be considered. First, What bills are transferrable. Secondly, By and to whom. Thirdly, At what time. Fourthly, The mode of transfer. Fifthly, Its nature, operation, and obligation, and how that obligation may be released or discharged. And Lastly, Of the consequences of the loss of a bill, note, or check, and what conduct the holder should thereupon pursue.

With respect to bills payable to a certain person or order, or to the order of a certain person, no doubt seems ever to have been entertained respecting their negotiability; and though bills payable to bearer, or to a certain person or bearer, were formerly thought not to be negotiable, and considered as mere choses in action, upon a supposition that such instruments contained no authority to assign them, so as to enable the assignee to demand payment of the drawee; yet it is

1 Ante, 6, 7, 11.

2 Horton v. Coggs, 3 Lev. 299.-Hodges v. Steward, 1 Salk. 125.— Nicholson v. Sedgwick, I Ld. Raym. 180.-Mod. Ent. 313.-Bills and notes are valid, though they do not contain any words, rendering them negotiable. Smith v. Kendall, 6 T. R. 124.-Ante, 85.