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A

TREATISE

ON

BILLS OF EXCHANGE, &c.

PART FIRST.

THE RIGHT ACQUIRED BY BILLS, &c.

CHAPTER I.

THE GENERAL NATURE, UTILITY, AND HISTORY OF

BILLS OF EXCHANGE, &c.

General Nature

A BILL of EXCHANGE is defined by Mr. Justice Definition Blackstone to be an open letter of request, or an and Utility. order from one person to another, desiring him to pay, on his account, a sum of money therein mentioned, to a third person'. It is consequently an assignment to a third person of a debt due to the person drawing the bill, from the person upon whom it is drawn. In other contracts and securities there are generally only two parties, or at most a third as a guarantee; whereas, on account of the assignable quality of a bill of exchange, there may be, and usually are, many more parties, severally liable for the performance of the contract. The person who makes or draws the bill is termed the drawer; he to whom it is addressed is, before acceptance, called the drawee, and afterwards, the acceptor, the person in whose favour it is drawn is termed the payee, and when he indorses the bill, the indorser; and the person to whom he transfers it is called the indorsee, or holder. Though this security

'2 Bla. Com. 466.-Gibson v. Minet, 1 Hen. Bla. 586.-Stock t. Mawson, 1 Bos. & Pul. 291.-Walwyn v. St. Quintin, 1 Bos. & Pul. 654.-Selw. Ni. Pri. 4th edit. 285.-Bayl. on Bills, 3d edit. 1.-Rex v. Box, 6 Taunt. 325.

1 Bay 1, 2.

D

General Nature and Utility.

is entitled to peculiar privileges, yet it is to be considered as a simple contract debt in the course of administration, which an executor or administrator cannot discharge until after satisfying debts by bond, without being guilty of a devastavit. And for the same reason, a bill of exchange is considered as following the person of the debtor, and as bona notabilia where he resides at the time of the creditor's death, whereas a bond, or other specialty, is bona notabilia, wherever it may be at the time of such death'. And though a bond or bank note may be delivered in prospect of death, and be a good donation mortis causâ, bills of exchange, promissory notes, and checks on bankers, seem in'capable of being the objects of such donation 2. A

'Yeomans v. Bradshaw, Carth. 373.-3 Salk. 70 and 164.-Comb. 392, S. C.-Bac. Ab. tit. Executors, E. 2.-Com. Dig. Administrator, B. 4. The case of Yeomans v. Bradshaw, as reported in Carth. 373, was an action on a bill of exchange, brought by the plaintiff, as administratrix of her late husband, against the drawer; the bill was drawn in London. The defendant craved oyer of the letters of administration, which were granted by the Bishop of Durham. Upon demurrer, it was insisted, that a bill of exchange was only a simple contract debt, and so followed the person of the debtor, wherever he might be, and that the right of granting administration belonged to the ordinary of the place where the debtor was at the time of the death of the intestate, and that the administration was void, and of which opinion were the court, and gave judgment for the defendant; and see the judgment of Holt, C. J. in the same case, 3 Salk. 70.

2 Miller v. Miller, 3 P. W. 356.—Ward v. Turner, 2 Ves, sen. 442. Tate v. Hilbert, 2 Ves. jun. 111.-Lawson v. Lawson, 1 P. W. 441.—1 Roper on Leg. 2d ed. 3.-Toller Executors, 3d ed. 234, 5, where see the exceptions. Miller v. Miller, 3 P. W. 356. A person, after having made his will, and about an hour before his death, delivered to his wife two bank notes for £300 each, and another note for £100 (not being a cash note, or payable to bearer), adding, that he had not sufficiently provided for her. On a bill filed in the name of the infant son, being the residuary legatee, against the widow and executors, for an account of the testator's personal estate, it was insisted, that the £600 was in payment of a legacy given her by the testator in a codicil to his will, and that, with regard to the other note for £100, which was not payable to bearer, that was merely a chose in action, and consequently could not pass by a delivery thereof. Per Master of the Rolls, the gift of the £600, contained in the bank notes, was a donatio causâ mortis, which operates as such, though made to a wife, for it is in nature of a legacy, though it need not be proved in the Spiritual court as part of the testator's will. But as to the note for £100, which was merely a chose in action, and must still be sued in the name of the executors, that cannot take effect as a donatio causâ mortis, inasmuch as no property could pass therein by the delivery. See also Ward v. Turner, 2 Ves. sen. 442, and Tate v. Hilbert, 2 Ves. jun. 120, in which it was held, that a check on a banker,

and Utility.

bill of exchange also being merely a simple contract, General Nature it is affected by the statute of limitations, and must be sued for within six years after it is payable. And being a chose in action, and a mere security for a debt, it is not to be considered as goods and chattels, and it therefore does not pass by a bequest of all the testator's "property" in a particular house, though bank notes would have passed, they being quasi cash2; and upon the same principle, a bank note or bill cannot be taken in execution, or as a distress for rent 3. And the accepting of a bill or note, in satisfaction of a specialty debt or demand for rent, at most only suspends the remedy on the former security, and does not entirely defeat it *.

A Bill of Exchange is a security originally invented amongst merchants in different countries for the more easy and safe remittance of money from the one to the other, and has since been extended to commercial transactions in this kingdoms. The instance put by Mr. Justice Blackstone of the utility of the instrument, is this, "If A. live in Jamaica, and owe B. who lives in England, £1000., now if C. be going from England to Jamaica he may advance B. this £1000. and take a bill of exchange, drawn by B. in England upon A. in Jamaica, and receive it when he comes thither: thus B. receives his debt at any distance of place by transferring it to C., who carries over his money in paper credit, without the risk of robbery or loss." In the origin of bills of exchange, it is probable that their principal utility was the safe transfer of property from one place to another, but that since the great increase

delivered by J. S. on his death-bed, did not take effect as a donatio causa mortis. But see 1 P. W. 441, and Toller's Law of Executors, 3d ed. 234, 5.

'Renew v. Axton, Carth. 3.

Flemming v. Brook, 1 Sch. & Lef. 318.-Stewart v. Marquis of Bute, 11 Ves. 662.

Francis v. Nash, Cas. Temp. Hardw. 53.-Knight v. Criddle, 9 East. 48.

+ Curtis v. Rush, 2 Ves. & Bea. 416.-Drake . Mitchell, 3 East. 251-Harris v. Shipway, Bul. N. P. 182.

$2 Bla. Com. 466, 7.

and Utility.

General Nature of commerce, they have become the signs of valuable property and equivalent to specie, enlarging the capital stock of wealth in circulation, and thereby facilitating and increasing the trade and commerce of the country'. The trader whose capital may not be sufficient to enable him to pay ready money for the commodity which he purchases, on account of his not having the means of immediately obtaining payment of the debts due to him from others, and who might find a difficulty on his own individual security, to purchase goods, or obtain money for the purposes of his trade,. by drawing a bill on one of his debtors payable at a future period, may obtain the goods or money on the credit of such bill; the vendor, of the goods, to whom the bill is handed as a security, may also, in his turn, obtain goods or money, in the way of his trade, on the credit of the bill, and the bill may have the same effect in different persons hands, to whom it may be transferred by indorsement or otherwise. This security is preferable to many others of a more formal nature, for each of the parties to a bill, by simply writing his name upon it either as drawer, acceptor, or indorser, guarantees the due payment of it at maturity, and the consideration in respect of which he became a party to it can be rarely inquired into; whereas, in the case of a formal guarantee, the Statute against Frauds requires the consideration to be expressed, and other matters of form, which frequently render an intended guarantee wholly inoperatives. So with respect to interest, it is a better security than a bond, for when the principal and interest in a bond equal the amount of the penalty, the interest must thenceforth ceasc

'Per Eyre, C. J. Gibson v. Minet, 1 Hen. Bla. 618.

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3 Wain v. Walter, 5 East. 10. In this case it was held, that an engagement in writing to pay the debt of a third person at an hour named, in consideration of the creditor suspending proceedings in an actioa ill that time, but which consideration did not appear on the face of the written engagement, was void on that account; but in Ex parte Minet, 14 Ves, jun. 189, and in Ex parte Gardom, 15 Ves. jun. 286. this doctrine was denied; and see La Morris v. Stacey, Holt N. P. C. 158, in notes.

and Utility.

for the obligor in a bond is not answerable in the whole General Nature beyond the amount of the penalty'. From the circumstance also of the exposure of the contract to the public eye, there is a stronger stimulus on every party to a bill, to take care that it be duly honoured; whereas punctual payment of a guaranty or bond is not so frequent, and consequently less to be relied on in commerce, where certainty is so essential to the welfare of the merchant.

There are, however, some disadvantages accompanying this security, compared with others, and principally, that in case of the dishonour of the bill by the person on whom it is drawn, the holder must immediately give notice of the non-payment to all the other parties, or he will lose the benefit of his security, whereas in the case of a guaranty such nice and exact conduct on the part of the creditor is not in general requisite. Again, in case of death, a bill of exchange being a simple contract, is not entitled to the same priority of payment out of the assets of the deceased as a bond; nor is there the same expeditious or extensive mode of obtaining payment as in case of a bond, warrant of attorney, Statute Staple, or Statute Merchant'.

The pernicious effects of a fabricated credit, by the undue use of accommodation bills of exchange, drawn out of the ordinary course of trade, have been too much felt to require any observation; the use of them, where there is no real demand subsisting between the different parties, is injurious to the public as well as to the parties concerned in the negotiation; unless in cases where, from some sudden and

'Hefford v. Alger, 1 Taunt. 220.-Wild v. Clarkson, 6 T. R. 303. Ex parte Mills, 2 Ves. jun. 301.-Clark v. Seaton, 6 Ves. jun. 411. but observe, that in an action of debt on a judgment recovered on a bond, interest may be recovered in damages beyond the penalty of the boud, M'Clure v. Dunkin, 1 East. 436.

* Warrington v. Furbor, 8 East. 245. but see Philips and Astling, 2 Taunt. 206. See these cases, post.

32 Saund. 70 a. & b. in note:

Per Ld. Eldon, in Ex parte Wilson, 11 Ves. 411,

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