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The history was introduced into the Mogul empire in China (a). Other au&c. of foreign thors have attributed the invention to the Florentines, when, be

bills.

ing driven out of their country by the faction of the Gebelings, they established themselves at Lyons and other towns (b). 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 (c). warrants the conclusion, that Foreign Bills were introduced into this country previously to the year 1581.

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 [* 16 ] *early period of our history, though no earlier decision relative to the custom can be found, than in Jas. 1 (d), 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 (e), however, it was soon extended to all traders, and finally, to all persons, whether traders or not (f).

use, &c. of

The history, INLAND BILLS OF EXCHANGE, (which are so called because they inland bills of are drawn and payable in this country,) according to Lord C. J. exchange. Holt's opinion, did not originate at a much earlier period than

(a) The only authority in support of this assertion is the 4 Mod. Un. Hist.

499.

(b) Poth. pl. 7.

(c) Claxton v. Swift, 2 Show. 441.494.

(d) Martin and Boure, Cro. Jac. 6. Oaste v. Taylor, Cro. Jac. 306. 1 Rol. Arb. 6.-Hussey v. Jacob, Lord Raym. 88.

(e) Oaste v. Taylor, Cro. Jac 306. 7.

(f) Per Treby, Ch. J. in Bromwich v. Loyd, 2 Lutw. 1585.-Sarsfield v. Witherly, 2 Vent. 295.-Comb. 45. 152. S. C.-Cramlington. Evans, 2

Ventr. 310.

use, &c. of

the reign of Charles the Second (a). They were at first, like for- The history, bills, more restricted in their operation than they are at pre- inland bills of sent; for it was deemed essential to their validity, that a special exchange. astom for the drawing and arcepting them should exist between the towns in which the drawer and acceptor lived; or, if they Ered in the same town, that such a custom should exist therein()(1). 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 (c). [ 17 ] 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 (d), 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 Sd 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 the 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 Checks on Bankers, and which are transferable so as to vest the legal right to receive the

(a) Buller v. Crips, 6 Mod. 29.-Anon. Hardr. 485.-Claxton v. Swift 3 Mod. 86.-Maurius. 2.

(6) Buller v. Crips, 6 Mod. 29.-Pinckney v. Hall, Lord Raym. 175. Erskine v. Murray, id. 1542.-Mannin v. Carey, Lutw. 279.-Pearson v. Garrett, 4 Mod. 242.

(c) Bromwick v. Loyd, 2 Lutw. 1585.-Sarsfield v. Witherly, Carth. 32. (d) 2 Bla. Com. 467.

(1) 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. Mil ler v. Hackley, 5 John. Rep. 375.

use, &c. of

The history, money in the holder (1). Most of the rules applicable to Bills of inland bills of Exchange, equally affect these instruments; their peculiar qualiexchange. ties, and the law affecting them in particular will hereafter be separately considered.

(1) 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 shewing that he came fairly by it, for a valuable consideration, Ball v. Allen, 15 Mass. Rep. 433.

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* CHAPTER II.

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.

[ *18 ]

of the con

All persons, if they have capacity to contract, and be not sub- Sect. 1. Of ject to any leg.I disability, may be parties to a Bill of Ex- the capacity change (a). In general, contracts with alien enemies are void; tracting parbut where two British subjects detained prisoners in France, one ties, and who of them drew a bill in favour of the other on a third British sub- ties to a bill. may be par ject, resident in England, and such payee indorsed the same in France to an alien enemy, it was held that the alien right of ac

tion was
only suspended during the war, and that on the return

of

peace he might recover the amount from the acceptor (b).

It appears (e) 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 (d), under *penalties, from trading or farming; yet the act of being a party,

(a) Therefore a bill drawn in war by an alien enemy abroad, on a British subject here, and indorsed during war to a British-born subject, spontaneously resident in the hostile country, cannot be enforced by the latter after peace restored, Willison v. Patteson, 7 Taunt. 439.

(6) Antoine v. Morshead, 6 Taunt: 237.1 Marsh. 558. S. C. (e) Poth Traite de Change, pl. 27.

(21 Hen. 8. c. 13.-43 Geo. 3. c. 84, s. 5.

VOL. I.

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[ * 19 ]

the capacity of the con

Sect. 1. Of to a bill would not constitute a trading within the statute (a); and if it did, as the act is merely prohibitory, the bill itself would tracting par be void (b).

ties.

It was once thought, that as the only reason why Bills of Exchange were suffered to be assigned by one person to another, was because they were the means of increasing commerce, and facilitating the ends of it, no person who was not a merchant, or engaged in some trade, could be a party to a bill (c). It has however, been long settled, that all persons, having capacity and understanding to contract in general, may be parties to these instruments (d); and as a person does not make himself a merchant, by drawing or [20] accepting a Bill of Exchange, therefore an attorney does not by accepting a bill, lose his privilege from arrest and to be sued by bill (e).

*In general, a corporation can only contract by deed, under their corporate seal (ƒ); but the Bank of England have power to

(a) Hankey v. Jones, Cowp. 745. This was a case on an issue to try whether the defendant was a trader within the meaning of the bankrupt laws, and also the validity of the petitioning creditor's debt. The defendant, a clergyman, had drawn bills for the purpose of raising money for draining certain lands, &c. belonging to him, and had allowed his banker a commission on paying his bills, also other persons for getting them dis counted, 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."

(b) 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 clergyman, he was not liable to the bankrupt laws, the 21 Hen. 8. c. 13. s. 5. was cited in favour of the petitioner. There was no dispute either as to the trading or act of bankruptcy. Per Lord Chancellor," the statute of 21 Hen. 8. is rather in the nature of a prohibition, and prohibition will not exempt him from being a bankrupt, for if a man with his eyes open will break the law, that does not make void the contract."

(c) Fairley v. Roch, Lutw. 891.-Bromwich v. Loyd, Lutw. 1585. (d) Sarsfield v. Witherly, 2 Ventr. 295.-Comb. 152.-Carth. 82.1 Show. 125, S. C.-Hodges v. Steward, 12 Mod. 36.—1 Salk. 125. S. C.

(e) Comerford v. Price, Dougl. 312. This was an action by original against defendant who was an attorney, as acceptor of a bill of exchange; defendant pleaded in abatement his privilege to be sued by bill, and the plaintiff demurred generally. The case was argued for the plaintiff. Defendant's council was stopped by Lord Mansfield, who said, " This case is extremely clear; a man does not make himself a merchant by drawing or accepting a bill of exchange; if there are no cases, it is because the privilege cannot admit of a doubt."

(f) Slark v. Highgate Archway Company, 5 Taunt. 794.-The king ~. the inhabitants of Chipping Norton, 5 East. 239.-Bac. Ab. Corporations, E. 3.-The King v. Biggs, 3 P. Wms. 432, 4.-Yarborough v. Bank of England, 16 East. 11.-3 and 4 Anne, c. 9. s. 3.-1 Chitty on Pleading, Sd ed. 102.

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