CHAPTER XVI. BILLS OF EXCHANGE, CHEQUES AND PROMISSORY NOTES. [See Byles on Bills, 16th ed., 1899; Watson on Cheques, 3rd ed., 1904.] from other contracts. A BILL of exchange, or open letter of request from one man to Distinction another desiring him to pay a sum named therein to a third person on his account, a cheque or bill of exchange desiring a banker to pay a sum named therein to a third person on demand, and a promissory note or open promise by one man to another to pay him a certain sum of money therein specified, become each of them by delivery contracts differing from other contracts in the two essential particulars (1) that they are Consideration presumed to be made for a consideration, and (2) that they are and assignapresumed, assignable. The rules governing their form and the liabilities bility. of the parties to them, though occasionally embodied in the statute law before 1882, were to a very much greater extent decided from a long succession of judicial decisions perpetually increasing with the increase of commerce and business, for the facilitating the transaction of which they were originally devised many hundred years ago. In 1882, however, the Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61, was passed to "codify" the law "relating to Bills of Exchange and Promissory Notes," and this Act embodies in 100 sections the result of the previous judicial provisions and statutes (a), assimilating the Scots and English law, clearing up many points theretofore doubtful, but as a general rule leaving the substance of the law unaltered. In the next three sections of this chapter will be given the main provisions of this important Act as they affect bills, cheques and notes respectively, but it will (a) See McLean v. Clydesdale Banking Co. (1883), 9 App. Cas. 95, per Lord Blackburn, In re Bethell (1883), 34 Bills of Exchange CH. XVI. s. 1. be first desirable to extract the two principal provisions of general Generally Bills of Act, 1882 contd. Signature. Savings for bankruptcy, application :— S. 91.—(1) Where, by this Act, any instrument or writing is required to be signed by any person, it is not necessary that he should sign it with his own hand, but it is sufficient if his signature is written thereon by some other person by or under his authority. (2) In the case of a corporation, where, by this Act, any instrument or writing is required to be signed, it is sufficient if the instrument or writing be sealed with the corporate seal. But nothing in this section shall be construed as requiring the bill or note of a corporation to be under seal. S. 97. (1) The rules in bankruptcy relating to bills of exlaw merchant, change, promissory notes, and cheques, shall continue to apply thereto notwithstanding anything in this Act contained (b). &c. Stamps. Companies. Bank of Dividend warrants. Bill of ex-change -defined. (2) The rules of common law including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to bills of exchange, promissory notes, and cheques (c). (3) Nothing in this Act or in any repeal effected thereby shall affect (a) The provisions of the Stamp Act, 1870 (d), or Acts amending it, or any law or enactment for the time being in force relating to the revenue: (b) The provisions of the Companies Act, 1862 (e), or Acts amending it, or any Act relating to joint stock banks or companies : (c) The provisions of any Act relating to or confirming the privileges of the Bank of England (f) or the Bank of Ireland respectively: (d) The validity of any usage relating to dividend warrants or the indorsements thereof. SECT. 2.-Bills of Exchange. By the Bills of Exchange Act, 1882— S. 3. (1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the (b) See Ex parte Robarts (1886), 18 Q. B. D. 286, C. A. (c) See Kirkwood v. Carroll, [1903] 1 K. B., at p. 533. (d) 33 & 34 Vict. c. 97, repealed and re-enacted, with its amending Acts, by the Stamp Act, 1891, 54 & 55 Vict. c. 39, Chit. Stat., tit. "Stamps." See sects. 32-39, and schedule, tit. "Bill of Exchange," and as to construction of 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 (g), 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. (3) An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or (b) a statement of the transaction which gives rise to the bill, is unconditional. (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. S. 4.-(1) An inland bill is a bill which is or on the face of it purports to be (a) both drawn and payable within the British Islands, or (b) drawn within the British Islands upon some person resident therein. Any other bill is a foreign bill. For the purposes of this Act "British Islands" mean any part of the United Kingdom of Great Britain and Ireland, the islands of Man, Guernsey, Jersey, Alderney, and Sark, and the islands adjacent to any of them being part of the dominions of her Majesty. (2) Unless the contrary appear on the face of the bill the holder may treat it as an inland bill. S. 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. S. 6.-(1) The drawee must be named or otherwise indicated Address to in a bill with reasonable certainty. (2) A bill may be addressed to two or more drawees whether they are partners or not, but an order addressed to two drawees drawee. CH. XVI. s. 2. in the alternative or to two or more drawees in succession is not a bill of exchange. Bills of Exchange (Act of 1882). Certainty as to payee. What bills are negotiable. Sum payable. S. 7.-(1) Where a bill is not payable to bearer, the payee must be named or otherwise indicated therein with reasonable certainty. (2) A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an office for the time being. (3) Where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer (h). S. 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 negotiable. (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. S. 9. (1) The sum payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid— (h) The effect of sect. 7 (3) is that a bill may be treated as payable to bearer where the payee is a real person, but was not intended by the drawer to have any right upon it; and this is so though the bill (so-called) is not in reality a bill but a document in the form of a bill, manufactured by a person who forges the signature of the named drawer, obtains by fraud the signature of the acceptor, forges the signature of the named payee, and presents the document for payment; Bank of England v. Vagliano, [1891] A. C. 107, reversing both decisions below, Lords Bramwell and Field, diss.-with the result that Vagliano, a customer of the bank, and not the bank, as had been held by the Court of Appeal and by Charles, J., had to bear the loss of more than 70,0007., arising from the payment of 43 so-called bills. A non-existing person is none the less so because the drawer supposes him to be a real one; Clutton v. Attenborough, (a) With interest. (b) By stated instalments. (c) By stated instalments, with a provision that upon default in payment of any instalment the whole shall become due. (d) According to an indicated rate of exchange or according to a rate of exchange to be ascertained as directed by the bill. (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. (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. S. 10.—(1) A bill is payable on demand— (a) Which is expressed to be payable on demand, or at sight, or on presentation; or (b) In which no time for payment is expressed. (2) Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand. CH. XVI. s. 2. Bill payable on demand. S. 11. A bill is payable at a determinable future time within the Bill payable meaning of this Act which is expressed to be payable : (1) At a fixed period after date or sight. (2) On or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening may be uncertain. at a future time. Omission of date in bill An instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect. S. 12. Where a bill expressed to be payable at a fixed period after date is issued undated, or where the acceptance of a bill payable at a fixed period after sight is undated, any holder may date. insert therein the true date of issue or acceptance, and the bill shall be payable accordingly. Provided that (1) where the holder in good faith and by mistake inserts a wrong date, and (2) in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course the bill shall not be avoided thereby, but shall operate and be payable as if the date so inserted had been the true date. S. 13. (1) Where a bill or an acceptance or any indorsement on a bill is dated, the date shall, unless the contrary be proved, be deemed to be the true date of the drawing, acceptance, or indorsement, as the case may be. (2) A bill is not invalid by reason only that it is ante-dated or post-dated, or that it bears date on a Sunday. C.C. 28 payable after Ante-dating and postdating. |