terms. A BILL of Exchange is an unconditional written order (a) Explanation of from A. to B., directing B. to pay C. a sum certain of money therein named. A. is called the drawer, B. the drawee, and C. the payee. And usually the bill is made payable, not to the payee alone, but also to his order or to the bearer. When B., the drawee, has undertaken to pay the bill, he is called the acceptor. 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 then D. stands in the same situation with regard to B. the acceptor, as C. the original payee did. If the bill be payable to C., or order, then C. cannot transfer, except by a written order, usually on the back of the bill, called an indorsement, after which C. is called the (a) It is said, that it was formerly essential to the validity of a bill of exchange, that it should be drawn in one place and payable in another: no such requisite now exists by the English law, although · B. it is in general otherwise, accord- B CHAPTER I. Two peculiar qualities of contracts on bills or notes. indorser, and D., to whom it may be so transferred, the indorsee (b). Holder is a general word, applied to any one in actual or constructive possession of the bill (c), and entitled, at law, to recover or receive its contents (d) from the parties to it. No one but the holder can maintain an action on a bill of exchange. By the common law of England no contract or debt is assignable, our ancestors appearing, in the times of simplicity, to have apprehended from such transfer much oppression and litigation. But mercantile experience has proved the assignment of debts to be indispensable, and bills of exchange to be the most convenient instruments for facilitating, 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 (e). 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 void unless consideration be averred in pleading and established in evidence. All the contracts arising on a bill of exchange are simple contracts, but they differ from other simple contracts in these two particulars: first, that the benefit of the contract (b) See Chap. XI. on TRANSFER. (c) 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 Exch. 884; Gill v. Lord Chesterfield, Ibid.; Sainsbury 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. 163, Exch.; 7 H. & N. 686, S. C. (d) This latter branch of the definition is equally essential. For if a man find or steal a bill, though his mere possession will give him a title to retain the instrument as against strangers, yet he cannot sue on the bill, for under a traverse of the indorsement or delivery to himself, which he must allege in his declaration, the circumstances attending his acquisition of the bill may be shown. Marston v. Allen, 8 M. & W. 494. (e) Usages which are part of the law merchant need not be pleaded. Such are the assignable qualities of bills of exchange and bills of lading. Such also the general lien of bankers on the securities of their customers. "When," says Lord Campbell, "a general usage has been judicially ascertained and recognized, it becomes part of the law merchant, which Courts of justice are bound to know and recognize." Brandao v. Barnett, 3 C. B. 530, Dom. Proc.; Barnett v. Brandao, 6 M. & G. 665. is assignable at law, and its obligation communicable (ƒ); secondly, that consideration will be presumed till the contrary appear. CHAPTER 1. or endorsing bill. The legal effect of drawing a bill, payable to a third Effect of drawing person, is a conditional contract by the drawer to pay the payee, his order, or the bearer, as the case may be, if the acceptor do not. The effect of accepting a bill, or making a note, is an absolute contract, on the part of the acceptor of the one, or maker of the other, to pay the payee, or order, or bearer, as the instrument may require. The effect of indorsing is a conditional contract, on the part of the indorser, to pay the immediate or any succeeding indorsee or bearer, in case of the acceptor's or maker's default. Bonds, bills, notes and other securities are not the subjects of larceny at common law. For the words bona et catalla, used in indictments, "don't of their proper nature,' says Lord Coke, "extend to charters and evidences concerning freehold, or inheritance, or obligations, or other deeds or specialties, being things in action "(g). And these observations as to obligations and deeds are at common law applicable also to bills of exchange and promissory notes (h). In an indictment, bills or notes ought not in strict propriety to be described as chattels (i). But, for almost all purposes, they are comprehended under the general words goods and chattels, or either of them. Thus, as chattels, they are forfeitable to the Crown, and may be the subject of reputed ownership or fraudulent transfer (j). How far bills and notes are consi dered as chattels. At common law, neither money nor securities for money May be taken in could be taken in execution, at the suit of a subject. But execution. now, by the 1 & 2 Vict. c. 110, s. 12, money, bank notes, (f) In one sense a bill of lading is at common law assignable, that is to say, its indorsement assigns the property, but does not transfer the contract. Thompson v. Dominy, 14 M. & W. 403. Now, however, by a recent statute, rights of action pass to the indorsee of a bill of lading. (18 & 19 Vict. c. 111.) (9) Calye's case, 8 Co. Rep. 33; 4 Bla. Com. 234; 2 East, P. C. 597. But see now 24 & 25 Vict. c. 96, ss. 1 & 27, by which, for the purposes of that act relating to larceny, they are comprehended within the words "valuable secu- (i) Sadi and Morris's case, 2 (j) Slade's case, 4 Co. Rep. 93; Bullock v. Dodds, 2 B. & Ald. 258; Ryal v. Rolle, 1 Atk. 165; 1 Ves. sen. 363; Hornblower v. Proud, 2 B. & Ald. 327; Cumming v. Bailey, 6 Bing. 363; 4 Moo. & P. 36, S. C.; Edwards v. Cooper, 11 Q. B. 33. See Chap. XXXVI. on BANKRUPTCY. |