TITLE XXVII. BILLS OF EXCHANGE, AND PROMISSORY NOTES. A BILL of exchange may be defined, to be an open letter of request, addressed by one person to a second, desiring him to pay a sum of money to a third, or to any other to whom that third person shall order it to be paid; or it may be payable to bearer. The person who makes the bill is called the drawer; he to whom it is addressed, the drawee; and if such drawee undertake to pay the amount, he is then called the acceptor. The person to whom it is ordered to be paid is called the payee; and if such payee appoint another to receive the money, that other is called the indorsee, as the payee is, with respect to him, the indorser; and any one who happens, for the time, to be in possession of the bill, is called the holder of it. Kyd, 3, 4. Ibid. 4. A promissory note, or note of hand, is a plain and direct engagement in writing, to pay a sum specified, at the time 2 Bl. Com. 467. therein limited, to a person therein named; or sometimes to his order; or often to the bearer at large. 1. Of the origin of bills of exchange and promissory notes. 2. Of the capacity of the contracting parties to a bill of exchange or promissory note. 3. Of the consideration. 4. What bills of exchange or promissory notes are of a negotiable nature. 5. Who may make an indorsement. 6. Of the several kinds of indorsement. 7. The nature and effect of the indorsement. 8. In what manner and order the several parties are chargeable after indorsement. Kyd, 2 Kyd, 2. 2 Bl. Com. 466. Montesq. S. L. Kyd, 18. 9. Of bills of exchange and notes, negotiable without indorsement. 10. What shall amount to an acceptance of a bill of exchange. 11. Of the manner of acceptance. 12. Of the effect of an acceptance; and how it may be discharged. 13. Of the protest of bills of exchange. 14. Of cases in which the holder of the bill or note shall be charged with the loss by reason of his neglect; or be exempted from it for having used a due degree of diligence. 15. Of notes considered as joint or several. 16. Of the declaration....evidence....interest. I. Of the origin of bills of exchange and promissory notes. It was reserved for an oppressed people, considered as the outcasts of mankind, in an unenlightened age, urged by the necessity of their situation, to introduce into Europe at least, if not to give birth to, a method by which the merchants, of regions the most remote from each other, could convey the means of procuring the value of their commodities, without the inconveniency of transporting gold or silver. About the middle, or towards the end, of the thirteenth century, the Jews, driven by the exactions of the prince, from England and France, took refuge in Lombardy, and from thence gave to merchant strangers and travellers, secret letters on those to whom they had entrusted their effects in the former countries; who honourably discharged the trust reposed in them, by complying with the orders. contained in the letters. In the course of time, these letters received a fixed form, and had conferred on them the name of bills of exchange. As commerce advanced in its progress, the multiplicity of its concerns required, in many instances, a less complicated mode of payment than by bills of exchange. A trader, whose situation and circumstances rendered credit from the merchant or manufacturer who supplied him with goods, absolutely necessary, might have so limited a connexion with the commercial world at large, that he could not easily furnish his creditors with a bill of exchange on another man; but his own responsibility might be such, that his simple promise of payment, reduced to writing for the purpose of evidence, might be accepted with equal confidence as a bill on another trader: Hence, it may reasonably be conjectur- Ibid. cit. 6 Mod. 30. ed, promissory notes were at first introduced; and the pe riod of this introduction appears to have been about thirty years before the reign of queen Anne. II. Of the capacity of the contracting parties to a bill of exchange or promissory note. Bills of exchange having been first introduced for the con- Kyd, 28. venience of commerce, it was formerly thought that no person could draw one, or be concerned in the negotiation of it, who was not an actual merchant: But the multiplied concerns of society rendering it necessary for others, not at all engaged in trade, to adopt the same mode of remittance, it has been since decided, that any person capable of binding himself by a contract, may draw or accept a bill of exchange, or be in any way engaged in the negotiation of it, and shall be considered as a merchant for that purpose; and that it is not necessary, in a declaration on a bill, to aver that the defendant is a merchant. On the same principle, since the statute of queen Anne, Ibid. any man capable of contracting, though not a merchant, may be a party to a promissory note. It has not, as yet, been determined that a bill of exchange Selw. 257. drawn by an infant, for necessaries, will bind him; but it is Kyd, 28. settled that an infant cannot bind himself by a bill drawn in Carth. 160. the course of trade, and not for necessaries. But it seems that an infant may bind himself by a pro- 1 T. R. 40. missory note, given for necessaries. So may an infant sue on a bill or note; for that is for his Kyd, 30. benefit. A married woman can, in general, bind herself by no Ibid. contract; nor can she, without a special authority, bind her Lloyd v. Lee, 1 Stra. 94. Kyd, 30. Selw. 258. Kyd, 33. Ibid. Puget de Bras v. 1 Esp. Rep. 117. Per Ashhurst, J. in Lickbarrow v. Mason, 2 T. R. 71. husband, except it be for such necessaries as are suitable to his rank; it is therefore clear, that a bill of exchange or promissory note, to which she is a party, is of no force. And where a woman, after her husband's death, promised to pay a note which she had previously given, during the coverture; such promise was held not to establish the note, which was void in its creation. But there are cases in which a married woman is considered as having an existence independent of her husband; and then she may contract, and be bound by her contract, as if she were single; and in such cases she may, among other contracts, certainly be bound by a bill of exchange or promissory note. But these cases, which operate as exceptions to the general rule respecting the contracts of married women, will be considered under the title of HUSBAND AND WIFE. Bills of exchange may be drawn, accepted or indorsed, by means of the agent or attorney of the party. An agent or attorney for this purpose may be constituted by parol. In such case the principal is said to draw, accept, or indorse, by procuration. And he who, by such a procuration, either negotiates, draws, indorses, subscribes, or accepts, bills of exchange, by subscribing his own name and quality, that is, as attor ney of his employer, as effectually binds his principal, as if he himself affirmed, whilst the procurator is not in the least bound. But if any one, under pretence of having a full power from a person of credit, transact business on his own account, he is bound, and not the person whose name he has used. III. Of the consideration. A bill of exchange is presumed to be made upon a good and valuable consideration. But, in certain cases, the illegality or want of consideration may be insisted on by way of defence to an action on the bill. Thus, as between the drawer and payee the consideration may be gone into, yet it cannot between the drawer and indorsee; and the reason is, because it would be enabling either of the original parties to assist in a fraud. A promissory note is also presumed to have been given Selw. 994. for a good and valuable consideration, until the contrary appears. As between the immediate parties, want or illegality of consideration may be insisted on as a defence. And in general, no advantage can beta ken of the ille- Kyd, 280 gality of the consideration, but as between the persons immediately concerned in the transaction; any subsequent holder of the bill or note, by a fair consideration, cannot be affected by it. But there are cases, in which the innocent indorsee shall not recover against the acceptor of the bill, or maker of the note. 1. One of these cases is, where the bill or note is found. ed in a gaming consideration. By statute it is enacted that all notes, bills, &c. where the whole or any part of the consideration of such securities, shall be for any money or other valuable thing whatsoever, won by gaming, or playing at cards, dice, or any other game or games whatsoever, or by betting on the side or hands of any person gaming, or for the reimbursing or repaying any money knowingly lent or advanced, for any gaming or betting, or lent and advanced at the time and place of such play, to any person or persons, so gaming or betting, or that shall, during such play, so play or bet, shall be void and of no effect. This provision is copied from an English statute, 9 Ann. c. 14, s. 1. In regard to which last mentioned statute, it has been decided, that the true construction of the words "shall be utterly void," &c. was that no recovery could be had against the defendant on the note, even in the hands of an innocent indorsee, who had paid for the note a valuable consideration. Notes made on a gam- Stat. 1785, c. 58, s. 1. Bowyer v. Bampton. Kyd, 281. usurious considera 2. Another case, in which a bill or a note is void Notes made on an though in the hands of an innocent indorsee, is, where tion are void. such bill or note was given on an usurious consideration. |