persons making claims thereto to interplead concerning the same, or he may, if he thinks fit, pay the same into the High Court of Justice under and in conformity with the provisions of the Acts for the relief of trustees.” this provision. The effect of this provision is now to make it the Remarks on general rule that choses in action are assignable so as to enable the assignee to sue in his own name if notice in writing is given to the holder of the chose, but the student will notice that the enactment does not extend to assignments by way of charge, but only to absolute assignments. the system Bills of exchange, promissory notes, and cheques The origin of owe their origin to the law merchant. The system of exchange. of exchange did not originate in England, but was anciently made use of at Athens, some provinces of France, and some few other places, and brought to perfection in Italy, from whence it appears to have been introduced to our country. Bills, notes, and cheques have until recently been mainly governed by the custom of merchants, such custom forming the common law thereon; but the subject is now governed by the Bills of Exchange Act, 1882 (t), which codifies the whole law with regard to such instruments. By that Act a bill of exchange is defined as "an un- Definitions of conditional order in writing, addressed by one person and cheques. 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" (u). A promissory note is defined as an unconditional promise in writing, made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time, a (t) 45 & 46 Vict. c. 61. bills, notes, Explanation of advantages derived from the use of bills of exchange and promissory notes. sum certain in money to, or to the order of, a specified person or to bearer" (x). A cheque is defined as "a bill of exchange drawn on a banker payable on demand" (y). For those not conversant with such matters to properly understand the subject, it seems necessary to first explain the advantages to be derived by the means of bills of exchange, and this is best shewn by an example. Suppose B. to owe money to A., but it has been arranged that payment shall not be made for say three months; in the ordinary course of things A. would simply have to wait that time for his money, which he would be deprived of using for that period. But A. may draw a bill of exchange, directed to B., requesting him to pay to him or his order the amount due three months after date; and A. would here be called the drawer, and also the payee, as it is payable to him, and B. would be called the drawee. At first this would not have full effect, but B., the drawee, then signifies his acquiescence in it by as it is called-accepting it, and it is then handed back to the drawer and payee, A. (z). The advantage to A. is that he can then transfer it over to any one to whom he in his turn may owe money, who will at the proper time get payment from the acceptor, and thus the original drawer quickly turns his money over. If the bill is payable to him or bearer, the transfer is effected by simply handing it over; if to him simply or to him or order, by his indorsing his name on the back, when he, in addition to being the drawer, becomes an indorser, and the person to whom he indorses it an indorsee, who in his turn may indorse it over to some one else, and so it may pass on to any extent. When the time mentioned in the bill is up, and the bill therefore becomes due, the then holder of it presents it to the person who originated it, viz., the (x) Sect. 83. A bank-note is in effect a promissory note payable to bearer on demand. See Byles on Bills, 9. (y) Sect. 73. (2) As to acceptance, see now 45 & 46 Vict. c. 61, s. 17, post, pp. 142, acceptor; and if he pays it, the bill has operated and been used as money, and served as such between the other parties, though actually no money has passed between them. The bill might even have a still more extended operation, for it need not necessarily be made payable to the drawer. Say B. in India owes money to A. here, who in his turn owes money to C. in India: A. can draw a bill on B. payable to C. and send it to India; and it can be accepted and placed in C.'s hands, who, when it is due, obtains payment from B., and A.'s debt to him is thus liquidated without the actual transmission of money from England to India. A promissory note is not quite so practically useful as a bill of exchange, but nearly so, and remarks as to the one will generally apply to the other. To take an example of one: If B. owes money to A. he can sign a promissory note, of which he will be called the maker, in which he engages to pay at a certain time to A. (who will be called the payee), or order, or bearer, and A. can then transfer it over to any one to whom he owes money, becoming if he indorses it an indorser, and the person to whom he indorses it an indorsee, and, when due, it will be presented to the maker and payment obtained. Of course in both a bill of exchange and a promissory note the ultimate holder's claim is not only against the founder of the bill or note, but if he acts properly (as is hereafter detailed), he has a claim against every prior party. The follow- Form of ing is a form of a bill of exchange and of a promissory change and of note respectively: bill of ex promissory note. FORM OF A BILL OF EXCHANGE. order months after date [or on demand, or at sight, or months after sight, of a some other period] pay to my [or pay to the order & E. F., or pay to E. F. or bearer] Five hundred pounds for falue received. To Mr. C. D., of, &c. A. B. Stamp varying according to amount. Stamp varying according to amount. Bills and notes FORM OF A PROMISSORY NOTE. months after date [or on demand, or at sight, or months after sight, or at some other period] I promise to pay to C. D. or order [or to C. D. or bearer] Five hundred pounds for value received. A. B. On these forms it should be remarked that there is no virtue in the words at the end of each, "for value received," and that the instruments would be just as valid if those words were omitted. If the words "or order" or "or bearer" are not inserted, the instrument formerly would not have been negotiable as a bill of exchange or promissory note (a), but now if such words are omitted the instrument will be deemed payable to order and negotiable by indorsement, unless it contains words prohibiting transfer or indicating an intention that it shall not be transferable (b). And even if its negotiability is thus restricted, the amount comprised in the instrument may be assigned in the ordinary way in consequence of the provisions of the Judicature Act, 1873 (c). Bills of exchange and promissory notes were always by custom required to be in writing, and it is now expressly provided by the Bills of Exchange Act, 1882, that an acceptance must be in writing on the bill and be signed by the drawee (d). With regard to such acceptance, it was held that the mere writing by the drawee of his name across the instrument without adding the word "accepted" was not a sufficient acceptance to satisfy the statute (e), but it is now. (a) Byles on Bills, 85. (b) 45 & 46 Vict. c. 61, s. 8. (c) See ante, p. 138. (d) 45 & 46 Vict. c. 61, s. 17. Sect. 96 of this Act repeals the former provisions on this point which were contained in 1 & 2 Geo. 4, c. 78, ss. 2, 19, and 19 & 20 Vict. c. 97, s. 6. (e) Hindehaugh v. Blakey, L. R. 3 C. P. D. 136; 47 L. J. C. P. 345 ; 26 W. R. 480. provided that the simple signature of the drawee across the bill is sufficient (ƒ). of persons liable on bills and notes. From the foregoing remarks the student will have Two classes observed as indeed has been expressly pointed out that there are two classes of persons liable on bills of exchange and promissory notes, viz.: (1) Those primarily liable, who on a bill are the acceptor or acceptors, and on a note the maker or makers; and (2) those not so primarily liable, who are the drawer and the indorser or indorsers, and therefore the positions of the parties are similar to that of creditor, principal debtor, and surety, the holder for the time, being the creditor, the acceptor of a bill or maker of a note the principal debtor, and all other parties the sureties. ment of an for honour, The engagement of the acceptor is to pay the bill The engageaccording to the tenour of his acceptance (g), and as a acceptor of general rule only he can accept a bill to whom it is a bill is to pay according addressed, but to this rule there is an exception; for to its tenour.. suppose the person to whom the bill is directed cannot be found, or through infancy or any other cause cannot accept, some other person may accept for him to pre- Acceptance vent his being sued, and such an acceptance is called or supra an acceptance for honour (h), and such an acceptor, an protest. acceptor for honour (i). An acceptance for honour is not of constant occurrence. In addition to this, the drawer of a bill and any indorser may insert therein Referee in the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonoured by non-acceptance or non-payment, and such person is called the referee in case of need. It is in (f) 45 & 46 Vict. c. 61, s. 17. Sect. 96 of this Act repeals the former provision to the same effect contained in 41 & 42 Vict. c. 13. (9) 45 & 46 Vict. c. 61, s. 54. (h) It is sometimes also called an acceptance supra protest, because it can only be so accepted after the bill has been protested. See Byles on Bills, 267. (i) Byles on Bills, 268. case of need. |