ERRATA ET ADDENDUM. Page 1, note (c), line 5, for "drawer" read "drawee." ,, 18, line 4, for "post-pated " read "post-dated." ,, 88, note (r), line 8, for "Code" read "Code, s. 11." ,, 92, to note (m) add:—Vagliano v. Bank of England, in Dom. Proc. is reported 60 L. J., Q. B. 145. A BILL of Exchange is an unconditional order in writing Explanation addressed by one person to another, signed by the person of terms. 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 (a). No precise form of words is essential to the validity of a bill of exchange, provided it substantially complies with the above definition (b); but it must be an unconditional order (though it may be accepted conditionally), and it must not order any act to be done in addition to the payment of money, or it will not be a bill of exchange (c). The sum is certain within the above definition though it (a) Code, s. 3. It is said that it was formerly essential in a bill of exchange that it should be drawn in one place and payable in another; no such requisite now exists by the law of England, though it is in general otherwise according to the definitions in the codes prevailing on the continent of Europe; see note of Serjeant Manning to Miller v. Thompson, 4 M. & G. 260. (b) Chadwick v. Allen, Stra, B.B.E. 706; Peto v. Reynolds, 9 Ex. 410; (c) Code, s. 3 (3). To be a bill B I. CHAPTER be payable with interest, by stated instalments with or without a proviso making the whole due on default of any instalment, or according to an indicated rate of exchange or a rate to be ascertained as directed by the bill (d). The person signing is called the drawer, the person to whom it is addressed is called the drawee, and the receive the money the payee. person to When the drawee has undertaken to pay the bill, he is called the acceptor. The bill may also be drawn payable to the drawer or to his order, or to the drawee or his order (e). If the bill is made payable to C. or bearer, C. may transfer the bill to D. by merely delivering it into his hands, and D. then stands in the same situation with regard to the acceptor as C. the original payee did (ƒ). If the bill be payable to C., to C.'s order, or to C. or order, C. cannot then transfer except by a written order, usually on the back of the bill, called an indorsement and delivering it, after which C. is called the indorser, and D., if named in the indorsement, the indorsee; if no one be named in the indorsement the bill then becomes payable to bearer. Every contract on a bill or note is incomplete and revocable until delivery (g). Holder is a general word, and means payee or indorsee of a bill in possession of it, or bearer of a bill payable to bearer (h). Holder in due course is one who has taken a bill complete and regular on its face, before it was due and without notice of any previous dishonour, in good faith and for value, and without notice at the time of any defect in his transferor's title. Every holder is prima facie a holder in due course (i). No one but the holder can maintain an action in his own name on a bill of exchange or promissory note (j). (d) Code, s. 9 (1). (e) Where in a bill drawer and drawee are the same person, or the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat it at his option, either as a bill or a note. Code, s. 5. (f) For brevity's sake, it is convenient to call the drawer A., the acceptor B., the payee C., and the first indorsee D. (g) Delivery means transfer of possession, actual or constructive. Code, ss. 2, 21, 84, and 89. (i) Code, ss. 29 (1) and 30 (2). Holder in due course shortens considerably the former lengthy definition, "bona fide holder for value before due without notice.' (j) Code, s. 38 (1). A man who has no interest in the bill nor possession of it, but only lends his name for the purpose of suing on it, is not the holder. Emmett v. Tottenham, 8 Ex. 884; Gill v. Lord Chesterfield, ibid. ; Sainsbury I. By the common law of England no contract or debt is CHAPTER assignable, our ancestors appearing in the time of simplicity to have apprehended from such transfers much oppres- Two peculiar sion and litigation. But mercantile experience has proved qualities of the assignment of debts to be indispensable, and bills of contracts on exchange to be the most convenient instruments for facili- bills or notes. tating, securing, and authenticating the transfer. They have, therefore, come into universal use among all civilized nations, and the common law has recognized them as part of the Law Merchant. And though the rigidity of the common law has now been relaxed (36 & 37 Vict. c. 66, s. 25) to the extent of making debts and other legal choses in action assignable by writing (written notice being given to the debtor), yet bills and notes retain their superior convenience in being assignable by simple delivery, or indorsement and delivery, according to the requirements above explained. The common law, again, distinguishes contracts into two kinds contracts under seal or by deed, and contracts not under seal or simple contracts. Contracts under seal are valid without consideration; simple contracts are not enforceable unless consideration be averred and proved. All the contracts arising on a bill of exchange are simple contracts, but they differed in the eyes of the common law from other simple contracts in these two particulars: first, that the benefit of the contract has long been assignable at law, and its obligation communicable (k); secondly, that consideration will be presumed till the contrary appear (1). v. Parkinson, ibid. But if before action it be indorsed and delivered to an agent without his principal's knowledge, and the principal after action brought ratifies the delivery, that ratification will relate back, and make the agent holder from the time of delivery. Ancona v. Marks, 31 L. J., Ex. 163; 7 H. & N. 686. If a man find or steal a bill, though his mere possession will give him the right to retain the instrument as against strangers, yet he cannot sue on the bill, for under a traverse of the indorsement or delivery to him, which he must allege in his statement of claim, the real facts may be shown. Marston v. Allen, 8 M. & W. 494. (k) Code, ss. 8 and 31. It was never necessary to plead usages which are part of the law mer- (7) Code, s. 30. |