« AnteriorContinuar »
Doctrine of commerce, adopted a less technical mode of considering personally as to the as- than reality; and, in support of commercial transactions, have establishsignment of ed the law merchant, which is a system founded on the rules of equity, action. and governed in all its parts by plain justice and good faith.
Of the dis- Having thus endeavoured to point out the peculiar properties of a bill tinction be- of exchange, in respect of its being assignable so as to give the holder a right of action in his own name, it will be proper to make a few obsertracts as to vations on the second privilege by which it is distinguished from other considera- simple contracts, that of its importing a consideration unless the con tion, and trary be shown.z
presumed in the case of a bill of exchange, &c.
tion not es
When a Contracts are of three descriptions. 1st. Matter of record. 2dly. considera- Specialty. 3dly. Parol or simple contracts. 3dly. Parol or simple contracts. The first of these, viz. sential the judgment of, or a recognizance acknowledged before a court of revalidity of cord, on account of its being sanctioned by such a tribunal, cannot be a bill of ex- impeached, or the propriety of it questioned, in any action on the judgchange, &c. ment, but only by writ of error. Nor can there be any allegation in pleading against the validity of a record, though there may be against its operation. Secondly. Specialties rank next in point of estimation. These, on account of the deliberate mode in which they are supposed to be made and executed, have always been holden to bind the party making them, although they were executed without adequate consideration, and consequently it is not incumbent on the plaintiff in an action upon a deed to state or prove upon what cause or for what consideration it was made; and though the defendant may be at liberty to avail himself of the illegality in the consideration, it is incumbent on him to state it in pleading, and to establish it by evidence. But the third description, namely, parol or simple contracts, which include as well unsealed written contracts as those which are merely verbal, ́are not in general entitled to such respect, because the law presumes that such contracts may have been made inadvertently, and without sufficient reflection, and therefore, in general, they will not be enforced, unless the plaintiff can prove that they were made for a sufficient consideration. It is otherwise, however, in the case of a bill of exchange, it being scarcely ever necessary for the plaintiff to prove that he gave a consideration for it; and the defendant is not at liberty to prove that he received no consideration, unless in an action brought against him by the person with whom he was immediately concerned in the negotiation of
y Per Buller, J. in Master v. Miller, 4 T. R. 342.
Per Lord Ellenborough, C. J. in Phil. liskirk v. Pluckwell, 2 M. & S. 395.
See the argument in Sharington r.
Fellowes v. Taylor, 7 T. R. 477.
Petrie v. Hanney, 3 T. R. 424,
d Fonbl. 329. 333. Sharington v. Strotton, Plowd. 308.
* See the case of Rann v. Huges, 7 T. R. 350, in which it was adjudged, that all contracts are by the law of England, distinguished into agreements by specialty, and agreements by parol, and that there is not any such third class as contracts in writing if they be merely written, and not specialties, they are parol, and a consideration must be proved. See also same case in 7 Bro. Parl. Cas. 550. Parker æ. Baylis, 2 Bos, & Pul. 77. Johnson v. Collings, 1 East, 104. Sharington . Strotton, Plowd. 308. Petrie v. Hanney, 3 T. R.
Simmonds v. Parinter, 1 Wils. 159.
the instrument, or by a person who has given no value for it. In this When a respect, therefore, a bill of exchange, although it is not a specialty, yet not esit carries with it the same presumption of a consideration as a bond, or sential other specialty, particularly when it is in the hands of a third person. validity of It is not, however, owing to the form of a bill of exchange, nor to the a bill of excircumstance of its being in writing, that the law gives it this effect, change, &c. but in order to strengthen and facilitate that commercial intercourse which is carried on through the medium of this species of security; for, notwithstanding a contract be in writing, it is essential to the validity of it, that it should in all cases be founded on a sufficient consideration, unless the writing, from its being of the highest solemnity, imports a consideration, or unless it be negotiable at law, and the interests of third persons are involved in its efficacy.(14)
Having endeavoured to state two of the most peculiar properties of The histoa bill of exchange, namely, its assignable quality, and its validity in ry, &c. of the hands of a bona fide holder, though made without consideration, it foreign may be proper to inquire concisely into the history, general nature, and use of these instruments.
Bills of exchange are foreign or inland. Foreign, when drawn by a person abroad upon another in England, or vice versa; and inland, when both the drawer and the drawee reside within this kingdom.
It seems extremely doubtful at what period, or by whom, foreign bills of exchange were first invented. The elementary writers differ on the subject. It is said by Pothier, that there is no vestige among the Romans of bills of exchange, or of any contract of exchange; for though it appears that Cicero directed one of his friends at Rome, who had money to receive at Athens, to cause it to be paid to his son at that place, and that friend accordingly wrote to one of his debtors at Athens,
Guichard v. Roberts, 1 Bla. Rep. 445. Lewis v. Cosgrave, 2 Taunt. 2.
Yeomans v. Bradshaw, 3 Salk. 70. ante, 2.
i Philliskirk v. Pluckwell, 2 M. & S. 95. Traités de Droit. Civil, tit. Traité du Contrat de Change, pl. 6.
(14.) The doctrines contained in this paragraph have been frequently recognised in the United States. In general, a written promise requires a consideration no less than a parol one. Hosmer v. Hollenbeck, 2 Day's Rep. 22. And a note made without consideration is a nude pact, and void as between the original parties to it. Pearson v. Pearson, 7 John. Rep. 26.-Stockpole v. Arnold, 11 Mass. Rep. 27. So if the consideration have totally failed. Dennison v. Bacon, 10 John. Rep. 198. Tappen v. Van Wagenen, 3 John. Rep. 465. Fowler v. Shearer, 7 Mass. Pep. 14. Livingston v. Hastie, 2 Caine's Rep. 247.
Every note within the statute imports a consideration unless the contrary appear on the face of the note itself. Goshen Turnpike Company, 9 John. Rep. 217. Ten Eyck. v. Vanderpool, 8 John. Rep. 120. And the words "value received" in a note not within the statute are prima facie evidence of a consideration sufficient to cast on the defendant the burthen of proof of the want of a consideration. Jerome v. Whitney, 7 John. Rep. 321. contra.-Lansing v. M‘Killip, 3 Cain. Rep. 286. The holder of a bill, check, or note, is prima facie deemed the rightful owner of it, and need not prove a consideration given for it, unless where circumstances of suspicion attach to the transaction. Cruger v. Armstrong, 3 John. Cas. 5. Conrey v. Warren, 3 John. Cas. 259. 3 Wheaton 182. And an indorsement of a note is primâ facie evidence of being made for full value; and it is in general incumbent on the defendant to show the real consideration if it was an inadequate one. Biddle v. Mandeville, 5 Cranch's Rep. 322. The drawer of a Bill of Exchange may rebut the presumption of his liabiltity, in case of nonpayment by the drawee, by proving that between the payee and himself, there was no consideration, 1 Serg. & Rawle, 32.
The histo- and ordered him to pay a sum of money to Cicero's son, yet it is obry, &c. of served that this mode amounted to nothing more than a mere order, or foreign mandate, and was not that species of pecuniary negotiation which is carried on through the medium of a bill of exchange; nor does it appear that the commerce of the Romans was carried on by means of this instrument; for we find by one of their laws, that a person lending money to a merchant who navigated the seas, was under the necessity of sending one of his slaves to receive of his debtor the sum lent, when the debtor arrived at his destined port, which would certainly have been unnecessary, if commerce, through the medium of bills of exchange, had been in use with them. Most of our modern writers have asserted (probably on the authority of Montesquieu,) that these instruments were invented and brought into general use by the Jews and Lombards when banished for their usury, in order, with the secrecy necessary to prevent confiscation, to draw their effects out of France and England, to those countries in which they had chosen, or been compelled to reside; but Mr. Justice Blackstone says, this opinion is erroneous, because the Jews were banished out of Guienne in the year 1287, and out of England in the year 1290; and in the year 1236, the use of paper credit was introduced in the Mogul empire in China. Other authors have attributed the invention to the Florentines, when being driven out of their country by the faction of the Gebelings, they established themselves at Lyons and other towns. On the whole, however, there is no certainty on the subject, though it seems clear, foreign bills were in use in the fourteenth century, as appears from a Venetian law of that period; and an inference drawn from the statute 5 Rich. 2. st. 1.2.r warrants the conclusion, that foreign bills were introduced into this country previously in the year 1381.
The mode of transmitting money from one country to another by means of these instruments, being once discovered, the advantages derived from it soon induced merchants universally to adopt it; and from thence it very early grew into a custom, which seems to have been judicially sanctioned in this country at a very early period of our history, though no earlier decision relative to the custom can be found, than in Jas. I. where it was adjudged, that an acceptance raised an assumpsit in law, for the breach of which an action on the case would lie. However, as our courts did not at first conceive it necessary to the encouragement of commerce, that this exception to the rule relative to choses in action, should be carried any further than to foreign bills drawn merely for the purposes of trade, we find that formerly they would only give effect to bills made between merchant strangers and English merchants, however, it was soon extended to all traders, and finally, to all persons, whether traders or not."
INLAND BILLS OF EXCHANGE, (which are so called because they are , use, &c. drawn and payable in this country,) according to Lord C. J. Holt's
bills of ex-
1 De nautico fænere.
Esp. L. 21. c. 16. n. 1.
n 2 Bla. Com. 467.
⚫2 Carte. Hist. Engl. 203. 206.
The only authority in support of this
Claxton v. Swift, 2 Show. 411. 494.
Martin v. Boure, Cro. Jac. 6. Oaste
r. Taylor, Cro. Jac. 306. 1 Rol. Abr. 6. Hussey v. Jacob, Ld. Raym. 88.
Oaste v. Taylor, Cro. Jac. 306, 7. "Per Treby, C. J. in Bromwich v. Loyd, 2 Lutw. 1585. Sarsfield v. Witherly, 2 Vent 295. Comb. 45. 152. S. C. Cram. lington v. Evans, 2 Vent. 310.
opinion, did not originate at a much earlier period than the reign of The histoCharles the Second. They were at first, like foreign bills, more re-, use, &c. stricted in their operation than they are at present; for it was deemed bills of exessential to their validity, that a special custom for the drawing and change. accepting them should exist between the towns in which the drawer and acceptor lived; or if they lived in tho same town, that such a custom should exist therein. (16) At first also effect was only given to the custom when the parties were merchants, though afterwards extended, as in the case of foreign bills, to all persons, whether traders or not. And even after the general custom had been established, and it had been adjudged, that all persons having capacity to contract, might make them, a distinction was taken with respect to form, between bills made payable to order, and bills made payable to bearer; for it was once thought, that no action could be maintained on a bill payable to the order of a certain person, by that person himself, on the ground that he had only an authority to indorse; and those payable to bearer were at first thought not to be negotiable in any case. These distinctions, however, have long been held to be without foundation; and on the whole, as observed by Mr. Justice Blackstone, although formerly foreign bills of exchange were more favourably regarded in the eye of the law than inland, as being thought of more public concern in the advancement of trade and commerce, yet now, by various judicial decisions, and by two statutes, the 9th and 10th W. 3. c. 17. and the 3d and 4th Anne, c. 9. inland bills stand nearly on the same footing as foreign; and what was the law and custom of merchants with regard to one, and taken notice of as such, is now by these statutes enacted with regard to the other.
Besides inland and foreign bills of exchange, there are two other descriptions of negotiable instruments for the payment of money, viz. promissory notes, and cheques on bankers, and which are transferrable so as to vest the legal right to receive the money in the holder.(17) Most of the rules applicable to bills of exchange, equally affect these instruments; their peculiar qualities, and the law affecting them in particular, will hereafter be separately considered.
Buller v. Crips, 6 Mod. 29. AnonHardr. 485. Claxton a. Swift, 3 Mod. 86. Marius, 2.
Buller v. Crips, 6 Mod. 29. Pinckney . Hall, Ld. Raym. 175. Erksine v. Mur
ray, id. 1542. Mannin v. Carey, Lutw.
(16.) A bill drawn in the United States upon any place within the United States, has been held in New York, to be an inland bill of exchange. Miller v. Hackley, 5 John. Rep. 375.
When a bill of exchange is drawn by one citizen of Kentucky, upon another citizen of that state, although payable in another state, the holder is not entitled upon payment to 10 per cent. damages. Clay v. Hopkins, 3 Marsh. 488. In Lonsdale v. Brown, Circ. Co. U. S. Penn. Dist. Oct. 1821. WASHINGTON J. held, that a bill drawn in one of the United States upon a person in another of the United States, is a foreign and not an inland bill of exchange; and subject to all the law of evidence and damage of foreign bills. 1 Rep. Const. Ct. So. Ca. 100. Purd. Dig. 93.
(17.) Bank checks are considered as inland bills of exchange, and may be declared on as such. Cruger v. Armstrong, 3 John. Cas. 5. The rules, therefore, that are applicable to the one, are generally applicable to the other.
One possessed of a check, or order, for the payment of money to bearer, addressed to no particular person as drawee, can maintain no action against the person subscribing it, without showing that he came fairly by it, for a valuable consideration. Ball v. Allen, 15 Mass. Rep. 433.
OF THE PARTIES TO A BILL OF EXCHANGE, &c.
IT is essential to the validity of every contract, that there be proper parties to it, and that those parties have capacity to contract. The parties to a contract are generally only two, namely, the person binding himself to perform some act, and the person in whose favour that act is to be performed but in the case of bills of exchange, &c. on account of the assignable quality of each, there may be, and usually are, more than two parties. The capacity of the contracting parties, or, in other words, who may be concerned in the transaction, will be considered in the first part of this chapter The number of the parties, and the mode by which they may become such, will be treated of in the second part.
Sect 1. Of All persons, if they have capacity to contract, and be not subject to the capaci- any legal disability, may be parties to a bills of exchange. In genety of the ral, contracts with alien enemies are void; but where two British subing parties, jects detained prisoners in France, one of them drew a bill in favour and who of the other on a third British subject, resident in England, and such may be par- payee indorsed the same in France to an alien enemy, it was held that ties to a the alien's right of action was only suspended during the war, and that on the return of peace he might recover the amount from the acceptor."
It appears, that in France, ecclesiastics were prohibited from being parties to a bill of exchange, or from carrying on commerce in any way, on the principle that such transactions were repugnant to the sanctity of their profession; but in this country, although clergymen are prohibited by statute, under penalties, from trading or farming; yet the act of being a party to a bill would not constitute a trading within [ 14 ]the statute ; and if it did, as the act is merely prohibitory, the bill itself would not be void.
Therefore a bill drawn in war by an alien enemy abroad, on a British subject here, and indorsed during war to a Britishborn subject, spontaneously resident in the hostile country, cannot be enforced by the latter after peace restored. Willison v. Patterson, 7 Taunt. 439.
b Antonie v. Morshead, 6 Taunt. 237.
Poth. Traité de Change, pl. 27.
Hankey v. Jones, Cowp. 745. This
him, and had allowed his banker a commission on paying his bills, also other persons for getting them discounted, and had also borrowed accommodation bills, in lieu of which he gave his own bills and notes to the same amount. The court held, that this was not a trading within the true intent and meaning of the bankrupt laws; and Lord Mansfield said, "this case is merely a drawing by a person for the purpose of improving his own estate, and he pays discount on what he draws," and therefore there is no colour for saying he is within the description of the bankrupt laws."
Ex parte Meymot, 1 Atk. 196. The petitioner applied to supersede a commission of bankrupt taken out against him, on, the ground, that being a clergymen,