(1) Three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace: Provided that § 14. grace. (a) When the last day of grace falls on Days of (b) When the last day of grace is a bank ILLUSTRATIONS. Subject to the proviso: 1. A note dated 31st January is payable "without grace" one month after date. It is due on February 28th. A similar note, dated January 1st, would be due on February 1st.' 2. A note for 1007. is made payable by two equal instalments, on January 1st and February 1st. The instalments fall due on January 4th and February 4th." 3. A bill dated January 1st is payable thirty days after date. It is due on February 3rd. 4. A non-negotiable note, not payable on demand, is entitled to days of grace.3 1 Cf. Roehner v. Knickerbocker Life Ass. Co. (1875), 63 New York R. 160. 2 Oridge v. Sherborne (1843), 11 M. & W. 374. 3 Smith v. Kendall (1794), 6 T. R. 123. § 14. 5. A bill dated 28th November, a bill dated 29th November, and a bill dated 30th November, each being payable three months after date, all fall due on March 3rd, inasmuch as February has but twenty-eight days. 6. A bill is dishonoured by non-payment on the last day of grace. No right of action arises till the next day.' It is believed that all countries, except those where the Greek Church is the prevailing religion, use the New Style, or Gregorian Calendar. A suggestion to abolish days of grace, in accordance with recent legislation in many continental countries, was made in committee but withdrawn. The number of days of grace allowed in different countries differ considerably. Originally, as the name implies, days of grace were a matter of favour, but they have long been a matter of right. Thus, presentment for payment on the second day of is invalid. The allowance of days of grace is regulated by the lex loci solutionis, irrespective of the country where the bill is drawn: see sect. 72 (5), post, p. 244. grace As to the term "business day," see sect. 92. It excludes both statutory and common law holidays. It was suggested in committee that the effect of statutory and common law holidays should be assimilated, and that when a bill fell due on a non-business day it should be payable in all cases on the preceding business day; but this was opposed by the bankers. It was said that when two holidays came together it was convenient that the due date of some bills should be thrown back, and of others thrown forward, in order to obviate too great a press of business on any one day. In Scotland, Christmas Day and Good Friday are bank holidays, but it was agreed to assimilate Scotch law to English law as regards bills falling due on those days. In assimilating the law of the two countries, one case appears to have been lost sight of, namely, when Christmas Day falls on Saturday. In such case it appears from the latter part of clause (b) that bills which fall due on the Sunday in Scotland would be payable on the succeeding business day, while in England they would be payable on the preceding business day. 1 Kennedy v. Thomas, (1894) 2 Q. B. 759, C. A. 2 See French Code, Art. 135; German Exchange Law, Art. 33; Italian Code, Art. 290. 3 Wiffen v. Roberts (1795), 1 Esp. 262. Foreign bills are sometimes drawn payable at one or § 14. more usances. By "usance is meant customary time, "Usances. that is to say, the time for payment as fixed by custom, having regard to the place where the bill is drawn and the place where the bill is payable. Thus, if the usance between London and Amsterdam is one month, a bill drawn in Amsterdam dated 1st January, and payable in London at double usance, falls due on 4th March. Where the usance is a month, "half usance means fifteen days. See Pothier, No. 15. The existence of a usage will not be judicially noticed. It must be proved. See a table of usances given by Nouguier, edition of 1875, § 144. sight bills. (2) Where a bill is payable at a fixed period After date or after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment.2 (3) Where a bill is payable at a fixed period after sight, the time begins to run from the date of the acceptance if the bill be accepted, and from the date of noting or protest if the bill be noted or protested for non-acceptance, or for non-delivery.3 (4) The term "month" in a bill means calen- Month. dar month.* ILLUSTRATIONS. 1. The holder of a foreign bill, payable sixty days after sight, makes an agreement that if it be dishonoured by non-acceptance, he will re-present it for payment at maturity. Acceptance is refused. The time of payment must be calculated from the day the 1 Cf. Mutford v. Walcot (1698), 1 Ld. Raym. 574. 2 Campbell v. French (1795), 6 T. R. at p. 212; Story, § 329; cf. German Exchange Law, Art. 32. 3 Campbell v. French (1795), 6 T. R. 200. 4 Webb v. Fairmaner (1838), 3 M. & W. 473; French Code, Art. 132. § 14. Case of need. bill was protested, and not from the day of presentment to the drawee for acceptance.1 2. A bill is payable three months after sight. The acceptance bears date January 1st. The bill is due on April 4th. 3. Bill payable after sight is noted for non-acceptance on January 1st. It is accepted supra protest on January 5th. The time of payment must be calculated from January 1st, not from January 5th.2 As a promissory note cannot be accepted, "after sight" in a note, means after mere exhibition to the maker. A bill presented for acceptance is usually left for twenty-four hours with the drawee, but the custom is for the acceptance to bear date the day of presentment, and not the day of return to the holder-e.g., a bill presented on a Saturday during business hours, is accepted and returned on the Monday; the acceptance should bear date of the Saturday. The holder is probably entitled to this as a matter of right. Compare sect. 18 (3) as to the acceptance of a bill which has previously been refused acceptance. 15. The drawer of a bill and any indorser may insert therein 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. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may think fit. The referee in case of need is sometimes called the drawee in case of need, or simply the "case of need." A bill must be protested or noted for protest before it can be presented to the case of need, see sects. 65, 67, 68. The concluding words of the section settle the moot point, whether presentment to the case of need is obligatory or optional in the United Kingdom. In the United States presentment is, 1 Campbell v. French (1795), 6 T. R. 200; cf. French Code, Art. 131; German Exchange Law, Art. 32. 2 See sect. 65 (5), post, p. 227, which accords with custom, and over-rides the dictum in Williams v. Germaine (1827), 7 B. & C. at p. 471. 3 Sturdy v. Henderson (1821), 4 B. & Ald. 592; cf. sect. 89 (3), post, p. 271. perhaps, obligatory, and in India it is clearly obligatory.2 By French law, when a reference in need is given by the drawer, the holder is bound to present to the case of need; but when the reference is given by an indorser, it seems he has an option: Nouguier, §§ 249, 250. By German Exchange Law, Art. 52, presentment is in both cases obligatory; but then it is held that the case of need (besoin or recommandataire) must reside in the place where the bill is payable: Nouguier, § 244. In England this is not so; for instance, a bill drawn on Liverpool often names a case of need in London. It may possibly be necessary in some cases to present to the case of need in England, in order to charge a foreign drawer or indorser in his own country, for an English statute is of course only binding in British Courts. However, in most countries the duties of the holder would be held to be regulated by the lex loci solutionis. § 15. 16. The drawer of a bill, and any indorser, may Special insert therein an express stipulation stipulations by drawer or (1) Negativing or limiting his own liability to indorser the holder: ILLUSTRATION. or 66 or The holder of a bill indorses it to D. thus: "Pay D. or order without recourse to me,' Pay D. or order sans recours, 993 "Pay D. or order at his own risk," 4 or "Pay D. or order without recourse, unless presented within 30 days." The indorser thereby passes his interest to D., but negatives or limits his liability as an indorser.5 Such an indorsement is sometimes called a qualified indorsement. Compare sections 33 and 35 as to conditional and restrictive indorsements. It has been held in the United States that an indorser "without recourse" is responsible to the same extent that a transferor by delivery is responsible, e.g., where the bill is a forgery. As to the ordinary liability of 1 Story, § 65; but no American case is cited. 2 Indian Act, sect. 115. 3 Goupy v. Harden (1816), 7 Taunt. at p. 163. 4 Rice v. Stearns (1807), 3 Massachusetts R. 224. 5 Cf. Castrique v. Buttigieg (1855), 10 Moore, P. C. pp. 110-112, 117 ; German Exchange Law, Art. 14; Nouguier, §§ 268-270. 6 Dumont v. Williamson (1867), reported in England, 17 L. T. N. S. 71; Hannum v. Richardson (1875), 21 Amer. R. 152. restricting liability. |