ÆäÀÌÁö À̹ÌÁö
PDF
ePub

2. The defendant drew the cheque without receiving any consideration, and for the accommodation of A. W. the payee.

3. The cheque was indorsed to the plaintiff without consideration, if indorsed to him at all.

4. The defendant was induced to draw the cheque by the fraud of the said A. W.

Particulars of the fraud are as follows:

The said A. W., on or about the 15th of July, 1883, falsely and fraudulently stated to the defendant that he had deposited 50 pipes of port wine in the

warehouse,

in the name and to await the orders of the defendant,
which he had not done.

5. If the cheque was indorsed to the plaintiff, he had notice of the premises when it was so indorsed.

Bearer of a Crossed Cheque against Drawer (a).

1. The plaintiff's claim is as the holder for value against the defendant as the drawer of a cheque for £50, dated 1 July,

187

(a) The law on the subject of crossed cheques is now regulated by the What statute 45 & 46 Vict. c. 61. By sect. 76 where a cheque bears across its amounts to face an addition of the words “And Company," or any abbreviation thereof, a crossing between two parallel transverse lines or of two parallel transverse lines of a cheque. simply, and either with or without the words "not negotiable," that addition shall be deemed a crossing, and the cheque is crossed generally; Crossing and where a cheque bears across its face an addition of the name of a generally. banker either with or without the words "not negotiable," that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed Crossing specially, and to that banker. Sect. 79 provides that where a cheque is specially. crossed generally, the banker shall not pay it otherwise than to a banker; but where it is crossed specially, it must not be paid except to the banker to whom it is crossed or his agent for collection. By the same section "Where Bankers a cheque is crossed specially to more than one banker, except when crossed to an agent for the purpose of collection, the banker on whom it is drawn shall refuse payment thereof." Lawful holders of uncrossed cheques are authorised to cross them, and holders of cheques crossed generally are authorised to cross them specially (sect. 77). The bankers on whom the cheque is drawn are liable to the true owner if they pay a crossed cheque except as directed by the Act, s. 79.

liable if they pay a crossed

cheque except as directed by

the Act.

Defence on

GENERAL DEFENCES TO ACTIONS ON BILLS, NOTES, AND CHEQUES. The loss of the bill, &c.]-It is a good defence to an action on a bill or bill, &c. note or cheque in a negotiable state, that the same has been lost or cannot be produced by the plaintiff. The principle of this defence is that the holder of a negotiable security is only entitled to payment on Loss of bill.

How the defence is defeated.

Alteration.

Presumption of consideration.

When want
of con-
sideration
a defence.

When not a defence.

When illegality of considera

tion a defence.

1883, drawn upon the J. S. Bank, payable to C. D. or bearer, and crossed generally. The said cheque was duly presented

production of it for re-delivery to the person liable to pay, As however this defence often worked great injustice, it was provided by the C. L. P. Act, 1854, sect. 87, “in case of any action founded upon a bill of exchange or other negotiable instrument, it shall be lawful for the Court or a judge to order that the loss of such instrument shall not be set up, provided an indemnity is given to the satisfaction of the Court or judge or a Master against the claims of any other person upon such negotiable instrument.' But unless he avail himself of this enactment, the plaintiff, where the defence is properly pleaded-by that is meant specially and distinctly raised-cannot recover on a lost bill indorsed by the payee without proving that it has been destroyed. (Pierson v. Hutchinson, 2 Camp. 211; Hansard v. Robinson, 7 B. & C. 90; Confians Stone Quarry Co. v. Parker, L. R. 3 C. P. 1.) The plaintiff should offer an indemnity before action. (King v. Zimmerman, L. R. 6 C. P. 466.)

Alteration.]—A material alteration in a bill, even though made by a stranger, avoids it, even in the hands of an innocent holder for value (Master v. Miller, 2 H. Bl. 140), except as against parties consenting to such alteration. (Downes v. Richardson, 5 B. & Ald. 674.) See further, ante, "Alteration," pp. 129-130, and Suffell v. Bank of England, 9 Q.

B. D. 555.

Want of consideration.]—It is said that bills and notes are presumed to have been given for consideration; but this only means that the plaintiff in the first instance need not aver and prove that any consideration passed. If, however, the fact of there being consideration is denied, or any suspicion is thrown upon the bill, then the plaintiff may have to show that there was consideration in fact. Want of consideration alone is only a defence when the parties to the action are the parties as between whom there was the alleged want of consideration, or as between parties who are in privity with them. See 45 & 46 Vict. c. 61, ss. 29 and 30. It is also good defence between remote parties where the bill has passed without consideration through the hands of the intermediate parties. In this latter case care must be taken in pleading the defence to aver want of consideration at each step, that is, at each indorsement or transfer of the bill or note. (Whitaker v. Edmonds, 1 A. & E. 638; Hunter v. Wilson, 4 Ex. 489; Low v. Chifney, 1 Bing. N. C. 267.) A bonâ fide holder for value is not affected by any want of consideration as between antecedent parties to the bill or note. On the subject of consideration the recent case of Currie v. Misa, 1 App. Cas. 554, 45 L. J. (H. L.) 852, is of importance. There it was decided that a creditor to whom a cheque or other negotiable security is given on account of a pre-existing debt, holds it by an indefeasible title, whether it be a cheque or bill payable at a future time or on demand.

Illegality of consideration.]—This is a good defence as against the parties guilty of the illegality or those privy to it, and also as against all those to whom they have passed the bill without value; but as against a bona fide indorsee for value without notice of the illegality, it is no defence. (Wyat v. Bulmer, 2 Esp. 588; Masters v. Ibberson, 8 C. B. 100, 45 & 46 Vict. c. 61, s. 30.) In this and similar cases the question for the jury is now settled to be whether the party taking the bill acted with good faith. If he took it without actual knowledge of the illegality or other circumstance affecting the title to the note and gave full value for it, this entitles him to recover, although he may have neglected the means of ascertaining the illegality which were in his power. (Raphael v. Bank of England, 17 C. B. 161, L. J. 25 C. P. 33; Bengal, Bank of, v. Mcleod 7 Moo. P. C. 35.)

through bankers and dishonoured, of which the defendant had due notice.

The plaintiff claims £50.

Agreement at variance with the bill.]-The terms of a bill or note Variation cannot be varied by parol evidence which contradicts it (Stoll v. Fairland, of terms of 52 L. J. Q. B. 420), even as between original or immediate parties to it, the bill by yet a contemporaneous memorandum in writing is admissible for that another inpurpose, whether on the same or a separate paper. (Leeds v. Lancashire, strument. 2 Camp. 205; Bowerbank v. Monteiro, 4 Taun. 844.) In such a case the bill or note and the memorandum will be looked upon as one instrument, and if the terms of the instrument so created do not entitle the plaintiff to recover against the defendant at the time and in the manner in which he is seeking to recover, the defendant has a good defence. (Young v. Austen, L. R. 4 C. P. 553.)

Defences

to bills.

No presentation for payment.]-The drawer and indorsers of a bill Non-preand the indorser of a note may plead that the bill or note was not duly sentapresented for payment, or that it was not presented at all, or where tion for made payable at a particular place, not presented at such place. (45 & payment. 46 Vict. c. 61, s. 45.) This will also be a good defence to the acceptor of a bill, or the maker of a note, when the bill or note was made payable at a particular place and not elsewhere, and there is an express stipulation. (45 & 46 Vict. c. 61, s. 52, and r. 87 as to notes.) As to what amounts to a good presentation for payment, see ante.

Who entitled to notice of dishonour.

No notice of dishonour.]—The drawer and indorsers of a bill, and the indorsers of a note are, as a very general rule, entitled to due notice of the dishonour of the bill or note, where upon presentation it is dishonoured; and if such notice is not given to them they are discharged from all liability on the bill. There is no prescribed form of notice of dishonour, and it need not be in writing; but proof of knowledge of dishonour is not equivalent to proof of notice; and a mere demand of payment without notice of the dishonour is not sufficient. (Hartley v. Case, The nature 4 B. & C. 339.) The notice must convey to the mind of the receiver the of the following facts: 1. That the bill has been presented when due; and notice. 2. That it has been dishonoured. (Sect. 49 of stat. 45 & 46 Vict. c. 61.) It was not necessary that the defendant should have had notice from the holder of the bill at the time it is dishonoured; it is enough if he has had notice from any person who is a party liable upon it. (Chapman v. Keane, 3 Ad. & E. 193; Lysaght v. Bryant, L. J. 19 C. P. 160; Harrison v. Ruscoe, 15 M. & W. 231.) The holder of a bill who is desirous From of suing all the parties to it, should give notice at once to all of them; whom otherwise notice may not be regularly transmitted to the prior parties, notice who may consequently be discharged. (Rowe v. Tipper, 13 C. E. 249; L. J. should C. P. 135.) When notice is given by or on behalf of an indorser entitled to give notice, it secures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given. As to the time within The time which notice should be given, the general rule with regard to inland bills within is, that where the parties do not reside in the same town, it is sufficient which it to send a notice by the post on the day following that on which the must be party sending receives intelligence of the dishonour. (S. 49 of 45 & 46 given. Vict. c. 61.) (Williams v. Smith, 2 B. & Ald. 496; Geill v. Jeremy, M. & M. 61.) It is a question of due diligence (sect. 50); and distance and other circumstances may sometimes warrant a longer delay, as where the holder of the bill does not know the address of the party to whom notice ought to be given. In the latter case where the holder is excused by ignorance from giving notice until after the usual day, the common allegation of due notice in the statement of claim is sufficient (Firth v. Thrush, 8 B. & C. 387); though generally an excuse for not giving notice

come.

are ex

cluded

from the computation of time.

Sufficient

that notice

What days should be specially pleaded. If the parties reside in the same town, notice must be given or sent off on the day after the dishonour of the bill, or the day after the sender has received notice of dishonour. (Sect. 49.) (Cf. Smith v. Mullett, 2 Camp. 208.) Where a party receives notice on a dies non, as Sunday, he is in the same situation as if he did not receive it till the next day. The 45 & 46 Vict. c. 61, ss. 49 & 92, provides for giving notice of dishonour, when a bill or note falls due on a non-business day, and excludes non-business days from the computation of time when the time limited for doing any act is less than three days. (Sect. 92.) Before the statute 45 & 46 Vict. c. 61, it was held that a Jew was not obliged to forward notice on the day of a great Jewish festival. (Lindo v. Unsworth, 2 Camp. 602.) But quære as to this now. It is sufficient proof of a notice to show that it was sent in a letter by the post, without proving that the letter was received. (Saunderson v. Oridge, 2 H. Bl. 509); and it is no answer that delay did in fact take place in the postoffice. (Woodcock v. Houldsworth, 16 M. & W. 124.) When the notice must be given on a particular day, it is enough if the letter be put into the post at such an hour, that it would in the usual course be delivered on that day. (Stocken v. Collin, 7 M. & W. 515.) (45 & 46 Vict. c. 61, s. 49.) As to excusing notice, see p. 177, ante.

of dishonour is posted.

The effect of giving time for payment to the ac

Payment.]—See Roscoe's Nisi Prius, 12th ed. 390, for cases as to what amounts to a good payment of a bill or note.

Voluntary discharge.]—As a general rule a principal debtor cannot be discharged after breach, except by a release under seal; but it has for a long time been held that an acceptor of a bill or a maker of a note can be discharged from liability by the express exoneration of the holder. (See Dangwell v. Dunster, 1 Doug. 247; Farquhar v. Southey, M. & M. 14; Harner v. Steele, 4 Exch. 1.) It is a question how far, if at all, this rule extends beyond the parties named-acceptors and makers; but the decision in Foster v. Dawber, 6 Exch. 839, L. J. 20 Ex. 385, is general; and the law of foreign countries from which this rule is probably borrowed, extends it to indorsers and parties to bills generally.

Giving time to principal debtor.]-The acceptor of a bill of exchange is regarded as the principal debtor, and the drawer and indorsers merely as sureties; therefore any binding act by which the plaintiff agrees to give extra time for payment to the acceptor, will discharge the drawer and indorsers, and there is no difference between an accommodation ceptor of a acceptor and an acceptor for value. There must, however, be a binding bill or agreement founded on a good consideration on which an action would lie if broken (Moss v. Hall, 5 Exch. 46); for mere forbearance to sue the acceptor is not equivalent to giving time. (Price v. Kirkham, 3 H. & C. 437 L. J. 34 Ex. 35.) Although there be a binding agreement to give time to the principal or to release him, yet if there is an express reservation of remedies against the surety, the surety is not discharged. (Bateson v. Gosling, L. R. 7 C. P. 9.)

maker of a note.

Between immediate parties fraud

vitiates a bill. Aliter in the hands of third

parties.

Fraud.]-If the consideration for a bill can be shown to be vitiated by fraud, of which the defendant was ignorant when he gave the bill, and if the defendant has derived no benefit from the contract, but has elected to repudiate it as soon as he knew of the fraud, he has a defence to an action on the bill at the suit of the party to whom he gave it. (Mills v. Oddy, 2 C. M. & R. 103.) As where by fraudulent representations a man induces another to give him for a business more than it is worth, and takes a bill in payment, he cannot recover on the bill. (Archer v. Bamford, 3 Stark. 175.) But where in the case supposed the bill is in the hands not of the person guilty of the fraud, but of an innocent indorsee or holder for value who is plaintiff, the defendant has no answer to the action. (Robinson v. Reynolds, 2 Q. B. 196.)

Notice of infirmity of title.]—Though since the repeal of the usury laws the fact of taking a bill at a considerable undervalue is not, of

Bill of Lading (a).

Action on a Bill of Lading for Injury done to Goods comprised in the Bill.

1. The plaintiff has suffered damage by breach of contract by bill of lading of cotton goods shipped by the plaintiff on

itself, sufficient to affect the title of the holder, it is an important element in considering whether the man who gave the undervalue was acting bonâ fide in ignorance and error, or was assisting in committing a fraud, and avoided making inquiries because they might be injurious to him. (Jones v. Gordon, 2 App. Cas. 616.)

(a) A bill of lading is a document which is signed and delivered by a shipowner, or the master of the ship as his agent, to the shipper in a general ship on goods being shipped. In practice, upon the goods being shipped, the mate usually gives the shipper an acknowledgment thereof, which is called the "mate's receipt," and the shipper, on taking this to the broker or captain of the ship, receives in exchange for it the bill of lading.

What a bill

of lading is.

Bills of lad

ing made

Bills of lading are generally made out in parts, one or more of which being sent to the consignee, one is retained by the shipper, and another given to the master, captain, or shipowner. The bill of lading, after men- in parts. tioning the shipping of the goods in good order and condition, and their destination, contains an undertaking to deliver them in the like good What it order and condition (loss or damage by certain perils excepted) to the contains. consignee or his assigns, the latter paying the agreed freight.

When goods are shipped under a bill of lading, drawn in parts, to be delivered to the consignee "or his assigns, the use of which bills being accomplished, the others to stand void," the master or the warehouseman who has custody of the goods, under the Merchant Shipping Act, 1862, is justified in delivering to the consignee on production of one part, although there has been a first indorsement for value to the holder of another part, provided the delivery be bona fide and without notice or knowledge of such prior indorsement. (Glyn v. East and West India Dock Co., 7 App. Cas. 591.)

The delivery of a bill of lading duly indorsed passes the property to the indorsee, and since the 18 & 19 Vict. c. 111, the indorsee may sue on it in his own name. The actual holder of a bill of lading though insolvent, may defeat, by a bona fide indorsemement and delivery, the right of the unpaid vendor or consignor to stop in transitu, even though the indorsee may know that the vendor or consignor was not paid, provided he did not know that the consignee was insolvent, or that the bills given by the latter in payment were bad. (Cumming v. Brown, 9 East, 506.) This doctrine would hold even where the only consideration for the assignment of the bill of lading is a past one, and has not been got by means of the bill of lading. (Leask v. Scott, 46 L. J. 576, reversing judgment below and dissenting from Rodger v. The Comptoir d'Escompte de Paris, 38 L. J P. C. 30.)

How far indorsement confers a title to the goods.

perty

But no property passes if there is fraud in the transfer, or if there be No pronotice by the previous indorsement that the earlier transfer was only conditional. (Virtue v. Jewell, 4 Camp. 31.) Nor can a bonâ fide indorsee for value interfere with the consignor's right to stop in transitu, if the person through whom the bill of lading came to him had no authority from the shipper or consignee to put it in circulation, the bill of lading being, in this respect, like an overdue bill of exchange. (Gurney v.

passes where there is fraud.

« ÀÌÀü°è¼Ó »