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CH. XVI. s. 3. S. 75. The duty and authority of a banker to pay a cheque Cheques on a
drawn on him by his customer are determined byBanker (Act of 1882). (1) Countermand of payment: Revocation
(2) Notice of the customer's death. of banker's authority.
[Sects. 76—82, which re-enact the Crossed Cheques Act, 1876 (39 & 40
Vict. c. 81), relate to crossed cheques, sects. 80–82 being as follows:-] Crossed cheques, S. 80. Where the banker, on whom a crossed cheque is drawn, Protection of in good faith and without negligence pays it, if crossed generally, drawer. to a banker, and if crossed specially, to the banker to whom it is
crossed, or his agent for collection being a banker, the banker paying the cheque, and, if the cheque has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and be placed in the same position as if payment of the
cheque had been made to the true owner thereof. Effect on
S. 81. Where a person takes a crossed cheque which bears on holder.
it the words "not negotiable,” he shall not have and shall not be capable of giving a better title to the cheque than that which the
person from whom he took it had. Protection of
S. 82. Where a banker in good faith and without negligence collecting banker. receives payment for a customer (x) of a cheque crossed generally
or specially to himself, and the customer has no title or a defec. tive title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment (y).
Promissory note defined.
Sect. 4.–Promissory Notes. Sects. 83-88 of the Bills of Exchange Act, 1882, enact on this subject as follows:
S. 83.-(1) A promissory note is 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 sum certain in money, to, or to the order of, a specified person or to bearer.
(2) An instrument in the form of a note payable to maker's order is not a note within the meaning of this section unless and until it is indorsed by the maker.
(x) A person accustomed to get cheques (y) Bankers are entitled to the protec. cashed at a bank but having no account tion of this section only in cases where is not a customer" ; so that a bank they receive payment of crossed cheques cashing for such person a fraudulently as agents for customers : Gordon v. Lone obtained " not-negotiable" cheque which don, Cily and Midland Bank; Gordon v. is honoured must refund to the drawer : Capital and Counties Bank, [1902) 1 Great Western Rail. Co. v. London and K. B. 242, C. A., reversing Bucknill, I., County Banking Co., [1901) A. C. 414, 83 L. T. 762 ; aff. by H. L.,  A. C. reversing C. A. and Bigham, J.
(3) A note is not invalid by reason only that it contains also CH. XVI. s. 4. a pledge of collateral security with authority to sell or dispose
Promissory thereof (2).
(4) A note which is, or on the face of it purports to be, both made and payable within the British Islands is an inland note. Any other note is a foreign note. S. 84. A promissory note is inchoate and incomplete until Delivery
necessary. delivery thereof to the payee or bearer.
S. 85.-(1) A promissory note may be made by two or more Joint and inakers, and they may be liable thereon jointly, or jointly and severally according to its tenor.
(2) Where a note runs "I promise to pay" and is signed by two or more persons it is deemed to be their joint and several note.
S. 86.—(1) Where a note payable on demand has been Note payable indorsed, it must be presented for payment within a reasonable on demand. time of the indorsement. If it be not so presented the indorser is discharged.
(2) In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade, and the facts of the particular case.
(3) Where a note payable on demand is negotiated, it is not deemed to be overdue, for the purpose of affecting the holder with defects of title of which he had no notice, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue. S. 87.—(1) Where a promissory note is in the body of it made Presentment
of note for payable at a particular place, it must be presented for payment at
payment. that place in order to render the maker liable. In any other case, , presentment for payment is not necessary in order to render the maker liable.
(2) Presentment for payment is necessary in order to render the indorser of a note liable.
(3) Where a note is in the body of it made payable at a particular place, presentment at that place is necessary in order to render an indorser liable ; but when a place of payment is indicated by way of memorandum only, presentment at that place is sufficient to render the indorser liable, but a presentment to the maker elsewhere, if sufficient in other respects, shall also suffice.
(2) And in Kirkwood v. Carroll, (1903] 1 K. B. 531, C. A., overruling Kirkwood v. Smith,  1 Q. B. 582, and approving Yates v. Evans (1892), 61 L. J., Q. B. 446, it was held that a joint and several note for payment of 1251. by instalments, the whole to become due on
default in payment of any one instalment, and “no time given to or security taken from, or composition or arrangement entered into with either party hereto” to “prejudice the rights of the holder to proceed against any other party," was a valid promissory note.
CH. XVI. 8. 4.
Liability of maker. Application of Part II. to notes.
S. 88. The maker of a promissory note by making it-
(2) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse.
S. 89.-(1) Subject to the provisions in this Part and, except as by this section provided, the provisions of this Act relating to bills of exchange apply, with the necessary modifications, to promissory notes.
(2) In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer's order.
(3) The following provisions as to bills do not apply to notes ; namely, provisions relating to
(a) Presentment for acceptance;
(4) Where a foreign note is dishonoured, protest thereof is unnecessary.
[For sects. 91 and 97, as to signature and general savings, see p. 430, ante.]
Sect. 1.-General Nature of Contract of Guarantee. The general nature of a contract of guarantee is sufficiently General
nature of the simple. It is a collateral engagement, to answer for the debt,
contract of default, or miscarriage of another (a), as distinguished from an guarantee. original and direct engagement for the party's own act. It is therefore of the essence of this contract, that there should be some one liable as principal (b); and, accordingly, where one party agrees to become responsible for another, the former incurs no obligation as surety, if no valid claim ever arises against the principal; whilst, on the other hand, the liability of the surety upon a claim which is good as against the principal, ceases so soon as such claim is extinguished.
But the rule that a party cannot be liable upon a contract of guarantee, unless the principal be also liable, is, in some cases, true in form or words, rather than in substance. Thus, in the case of a guarantee to answer for the price of goods not necessar ies, to be sold to an infant, or other person incompetent to contract, there is no doubt that the party guaranteeing, though professedly contracting only in the character of a surety, would be responsible: for, either he could not urge the incapacity of the supposed principal ; or he might, by construction of law, be himself treated as the principal.
(a) See Statute of Frauds, 29 Car. 2, c. 3, s. 4, p. 76, ante.
(6) Per Lord Selborne, in Lakeman v. Mountstephen (1874), L. R., 7 H. L. 17.
CH. XVII.s. 1. We have already seen that, in the case of every simple contract, General
a consideration is necessary to give it validity. And we now Nature of Contract of remark further that, in the case of a guarantee, the mere existence Guarantee.
of the debt, default, or miscarriage, in respect of which it is given, Considera- is not a sufficient consideration to support it: so that, unless there tion for.
be some further consideration for the promise of the guarantor,
such promise will be void. Past con- Thus, a promise to pay a debt already incurred by another, is sideration
not binding without some new consideration, such as forbearinsufficient.
ance (c) ; or without showing that such past consideration was moved at the defendant's request (d). And even in the case of a promissory note given by way of guarantee for a past debt, if it be shown that there was no consideration, such as forbearance, this
will be an answer to an action on the note (e). Guarantee of But a guarantee of a debt already incurred; or of such a debt past debt, in consideration
and a debt to be afterwards incurred, given in consideration of a of future future advance of money or sale of goods, by the creditor to the advance.
original debtor, is good (f). And it was probably on this ground, that the following memorandum was held to be sufficient :-“I hereby guarantee the present account of Miss H. M., due to R. T. S. & Co., of 1121. ; and what she may contract from this
date to the 30th September next" (g). Guarantee So where, in consideration of advances made and to be made to of past and
A. and B., the defendant guaranteed to A. and B. the repayment future adrances. of the said advances, this was held to be good (1).
And a guarantee will be good, although it may be doubtful whether it referred to a past or a future credit-provided it appear from all the circumstances that the parties contemplated the latter (i); and evidence is admissible to show what the transaction really was (k). For one consideration to be done on the one side stated in a document is at all events primâ facie consideration for all that is to be done on the other, and all the premises are to be referred to all the considerations (). But if it appear on
(c) See French v. French (1811), 2 M. & G. 644.
(a) See Parme v. Wilson (1827), 7 B. & C. 423 ; Johnson v. Nicholls (1845), 1 C. B. 251, 261, 1. (a).
(e) Crofts v. Beale (1851), 11 C. B. 172.
(f) See White v. Woodward (1848), 5 C. B. 810 ; Boyd v. Moyle (1846), 2 C. B. 644 ; Johnson v. Nicholls (1845), 1 C. B. 251 ; and see Westheal v. Sproson (1861), 6 H. & N. 728.
(9) Russell v. Moselcy (1822), 3 B. & B. 211.
(1) Chapman v. Sutton (1846), 2 C. B.
634. As to continuing guarantee, see Wood v. Priestner (1867), L. R., 2 Ex. 282, Ex. Ch., and post, p. 457 et seq.
(i) Colbourn v. Dauson (1851), 10 C. B. 765 ; Steele v. Hoe (1849), 14 Q. B. 431 ; Edward v. Jevons (1849), S C. B. 436 ; Goldshede v. Suan (1847), 1 Exch. 154 ; Broom v. Bachelor (1856), i H. &N. 255.
(k:) Goldshede v. Swan (1847), 1 Exch. 154 ; and see Butcher v. Steuart (1843), 11 M. & W.857; Haigh v. Brooks (1839), 10 A. & E. 309.
(1) Harris v. Venables (1872), L. R., 7 Ex. 235.