Bill of Exchange, Cheque, and Promissory Note.

225 a Bank Note)-drawn, or expressed to be payable, or actually paid or endorsed, or in any manner negotiated in the United Kingdom :"

Where the amount or value of the money for which the bill or note is drawn or made does not exceed 5l.,-1d. ; exceeding 5l. and not 10l.,—2d. ; 10l. and not 25l.,—3d.; 25l. and not 50l.,—6d.; 50l. and not 75l.,—9d.; 75l. and not 1007.,-18.; exceeds 1007.-for every 100l., and also for any fractional part of 100l., of such amount or value,-1s.

Exemptions.-These include notes and bills of the Banks of England and Ireland; certain drafts, orders and letters drawn by bankers; dividend warrants for dividends on Government securities; bills drawn by certain public departments (extended by 45 & 46 Vict., c. 72, s. 9), and companies; and coupons or warrants for interest attached to and issued with any security.

The statute 10 Geo. 4, c. 56, s. 37, does not exempt from duty drafts payable to bearer given by a friendly society to their members. Att.-Gen. v. Gilpin, L. R., 6 Ex. 193. This decision will apply to the Friendly Societies Act, 1875 (38 & 39 Vict. c. 60), s. 15, (2a), and the Building Societies Act, 1874 (37 & 38 Vict. c. 42), s. 41, the corresponding provisions being similar in terms.

Bill of Exchange.-Sect. 48. "(1.) The term 'bill of exchange' for the purposes of this Act includes also draft, order, cheque, and letter of credit, and any document or writing (except a bank note) entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money therein mentioned.

"(2.) An order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, is to be deemed for the purposes of this Act a bill of exchange for the payment of money on demand.

"(3.) An order for the payment of any sum of money, weekly, monthly, or at any other stated periods, and also any order for the payment by any person at any time after the date thereof of any sum of money, and sent or delivered by the person making the same to the person by whom the payment is to be made, and not to the person to whom the payment is to be made, or to any person on his behalf, is to be deemed for the purposes of this Act a bill of exchange for the payment of money on demand."

The corresponding provisions of the earlier Acts (55 Geo. 3, c. 184, Sched. Part 1, & 16 & 17 Vict. c. 59, Sched.) were less wide than those of the present section, for the paragraph in italics is altogether new. to what instruments fall within the present section, vide post, pp. 227, et seq.

As

Promissory Note.-Sect. 49. "(1.) The term 'promissory note' means and includes any document or writing (except a bank note) containing a promise to pay any sum of money.

"(2.) A note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, is to be deemed for the purposes of this Act a promissory note for the said sum of money."

The paragraph in italics is new, and the earlier provision (in 55 Geo. 3, c. 184, Sched. Part 1), corresponding to sub-sec. (2), supra, applied only

VOL. I.

to notes payable to bearer or to order, and definite and certain, and not amounting in the whole to 201. Instruments in the form of notes and held to be agreements, were, except in the case of those expressly directed to be promissory notes, exempt from the note stamp, but liable to be stamped as agreements. As to what instruments fall within the present section, vide post, pp. 229, 230.

"The

Bu payable on demand, cheque, &c., adhesive stamp on.-Sect. 50. fixed duty of 1d. on a bill of exchange for the payment of money on demand may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the bill is signed before he delivers it out of his hands, custody, or power."

This stamp may, under sect. 54, (2), (post, p. 227) be affixed and cancelled by the person to whom it is presented.

Foreign bills, adhesive stamp on.-Sect. 51. "(1.) The ad valorem duties upon bills of exchange and promissory notes drawn or made out of the United Kingdom are to be denoted by adhesive stamps.

"(2.) Every person into whose hands any such bill or note comes in the United Kingdom before it is stamped shall, before he presents for payment, or indorses, transfers, or in any manner negotiates, or pays such bill or note, affix thereto a proper adhesive stamp or proper adhesive stamps of sufficient amount, and cancel every stamp so affixed thereto.

"(3.) Provided as follows:-(a.) If at the time when any such bill or note comes into the hands of any bona fide holder thereof there is affixed thereto an adhesive stamp effectually obliterated, and purporting and appearing to be duly cancelled, such stamp shall, so far as relates to such holder, be deemed to be duly cancelled, although it may not appear to have been so affixed or cancelled by the proper person. (b.) If at the time when any such bill or note comes into the hands of any bona fide holder thereof there is affixed thereto an adhesive stamp not duly cancelled, it shall be competent for such holder to cancel such stamp as if he were the person by whom it was affixed, and upon his so doing such bill or note shall be deemed duly stamped, and as valid and available as if the stamp had been duly cancelled by the person by whom it was affixed."

On the transferror is imposed the duty of cancelling the stamp affixed to a foreign bill, and on the transferee of seeing that it is done. Pooley v. Brown, 11 C. B., N. S. 566; 31 L. J., C. P. 134.

If a foreign bill be produced at the trial bearing the proper stamp, it will be presumed that the stamp was affixed at the time required by this section; Bradlaugh v. De Rin, L. R., 3 C. P. 286; even though it is not properly cancelled; Marc v. Rouy, 31 L. T., N. S., 372, M. T. 1874, Q.B. The party objecting to the admission of the instrument on the ground that the stamp was not affixed at the proper time must plead the objection specially. S. C., per Blackburn, J. It seems that cancellation may be made at any time in court before verdict; Viale v. Michael, 30 L. T., N. S. 463, E. T. 1874, Q. B. per Id.

Sect. 52. "A bill of exchange or promissory note purporting to be drawn or made out of the United Kingdom is, for the purposes of this act, to be deemed to have been so drawn or made, although it may in fact have been drawn or made within the United Kingdom."

This section obviates the objection held to be fatal in Steadman v. Duhamel, 1 C. B. 888.

Wrong denomination of stamp.-Sect. 53. "(1.) Where a bill of exchange

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227

or promissory note has been written on material bearing an impressed stamp of sufficient amount but of improper denomination, it may be stamped with the proper stamp on payment of the duty and a penalty of 40s. if the bill or note be not then payable according to its tenor, and of 101. if the same be so payable. (2.) Except as aforesaid, no bill of exchange or promissory note shall be stamped with an impressed stamp after the execution thereof."

It is sufficient if a bill so re-stamped be produced at the trial. Haiser v. Grout, 5 H. & N. 35; 29 L. J., Ex. 20.

Effect of want of stamp.—Sect. 54. “(1.) Every person who issues, indorses, transfers, negotiates, presents for payment, or pays any bill of exchange or promissory note liable to duty and not being duly stamped shall forfeit the sum of 107., and the person who takes or receives from any other person any such bill or note not being duly stamped either in payment or as a security, or by purchase or otherwise, shall not be entitled to recover thereon, or to make the same available for any purpose whatever.

"(2.) Provided that if any bill of exchange for the payment of money on demand, liable only to the duty of 1d., is presented for payment unstamped, the person to whom it is so presented may affix thereto a proper adhesive stamp, and cancel the same, as if he had been the drawer of the bill, and may, upon so doing, pay the sum in the said bill mentioned, and charge the duty in account against the person by whom the bill was drawn, or deduct such duty from the said sum, and such bill is, so far as respects the duty, to bedeemed good and valid.”

Bill in set. Sect. 55. "When a bill of exchange is drawn in a set according to the custom of merchants, and one of the set is duly stamped, the other or others of the set shall, unless issued or in some manner negotiated apart from such duly stamped bill, be exempt from duty; and upon proof of the loss or destruction of a duly stamped bill forming one of a set, any other bill of the set which has not been issued or in any manner negotiated apart from such lost or destroyed bill may, although unstamped, be admitted in evidence to prove the contents of such lost or destroyed bill." A bill drawn in England on a person abroad, and accepted by him payable in England, is an inland bill, and must bear an impressed stamp. Amner v. Clark, 2 C. M. & R. 468. So, conversely, a bill sketched out and accepted here, and transmitted to a person abroad for his signature as drawer, is a foreign bill, and does not require an impressed stamp. Boehm v. Campbell, Gow, 56. A foreign bill drawn and indorsed abroad, may be presented in this country by the indorsee for acceptance without being stamped, and he may sue the drawer on it for non-acceptance. Sharples v. Rickard, 2 H. & N. 57; 26 L. J., Ex. 302. A foreign bill may be given in evidence for a collateral purpose without a stamp, before it has been presented for payment, indorsed, transferred, or otherwise negotiated. Griffin v. Weatherby, L. R., 3 Q. B. 753.

The Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61, s. 97, (3), provides that nothing therein, "or in any repeal effected thereby shall affect (a.) the provisions of the Stamp Act, 1870, or Acts amending it, or any law or enactment for the time being in force relating to the revenue."

What are bills, &c., within the Stamp Act, 1870.] It was the object of the legislature, in framing the provisions of 55 Geo. 3, c. 184, " to treat as promissory notes and bills of exchange, and to subject to stamp duty, such instruments as, being payable on a contingency or out of a particular fund,

could not, in strictness, fall under that denomination." Per Ld. Ellenborough, C. J., Firbank v. Bell, 1 B. & A. 36; and see Jones v. Simpson, 2 B. & C. 321. In considering the cases decided under that Act, with a view of ascertaining whether an instrument is now chargeable with duty or not, it must be borne in mind that the provisions of the present Act are considerably wider than those of the former one (vide ante, p. 225), and the cases decided on 55 Geo. 3, c. 184, cited below, where instruments were held to be entitled to exemption, must be applied subject to such modifications.

Where the instrument operates as an equitable assignment it seems not to be within the act. Thus, an order by A., addressed to his debtor on a contract for works, authorising him to pay B. the sum of 3651., "being the amount of my contract, B. having advanced me that sum,” was held, under 55 Geo. 3, c. 184, not to be an order for payment out of a particular fund within the Act, for it operated as an equitable assignment of the whole fund. Diplock v. Hammond, 2 Sm. & G. 141;5 D. M. & G. 320; 23 L. J., Ch. 550. So, under the Stamp Act, 1870, where it was in the form, "I hereby assign to R. the sum of 401., or any other sum now due or that may hereafter become due in respect of the steam launch I am building for you." Buck v. Robson, 3 Q. B. D. 686, following Brice v. Bannister, Id. 569, C. A., and dissenting from Ex pte. Shellard, L. R., 17 Eq. 109. So, a document addressed to C., the trustee of a will, and given to F. "I hereby authorise and direct you to pay to F. or his order the sum of 1401. out of moneys now due, or hereafter to become due to me under the will of my late father, and before making any payment to me thereout." Fisher v. Calvert, 27 W. R. 301, M. R., H. S. 1879.

Before the doctrine of equitable assignment of a fund was well understood, there were decisions on 55 Geo. 3, c. 184, which conflict with those cited above. Thus, where in order to prove the payment of money pursuant to order, the following letter was given in evidence:-" Mr. B., When the mahogany, per Regent, is sold, you will please pay over to P. 1500l., in such bills as you receive from the said sale. S. Mann." P. inclosed this letter in another addressed by him to B.; and B. in reply, wrote promising to pay over the money. The letter from P. was stamped with an agreement stamp. It was held that the letter from Mann was an order for payment of money out of a fund which might or might not be available, and ought to have been stamped accordingly. Firbank v. Bell, supra; Butts v. Swann, 2 B. & B. 78. So it seems that an order to pay half the net proceeds to R. & Co., "provided the same shall not exceed 5000l.," required a stamp. Hutchinson v. Heyworth, 9 Ad. & E. 375, 400.

In order however to come within 55 Geo. 3, c. 184, it was held that the instrument must be for the payment of a specified sum; and therefore where A., having consigned goods to B., sent him the following order,"Pay to C. the proceeds of a shipment of 12 bales of goods, value about 2000l., consigned by me to you ;" and B., by writing, consented to pay over the full amount of the net proceeds of the goods; it was held that neither of these instruments came within the above clause. Jones v. Simpson, 2 B. & C. 318; and see Roscoe, Dig. Bills of Exchange, p. 31. The order in Hutchinson v. Heyworth, supra, was held sufficiently to satisfy this requisite. It has been held that an ordinary bill of exchange drawn on H. by C. for the exact amount of C.'s funds in H.'s hands does not operate as an equitable assignment of such funds. Shand v. Du Buisson, L. R., 18 Eq. 283. And the Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61, s. 53, expressly provides that "a bill of itself does not operate as an assignment of funds in the hands of the drawee available for payment thereof," but this section has no effect on the stamp duty payable on such an instrument, vide, sect. 97 (3, a.), ante, p. 227.

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229

It seems that an order for the payment of money sent or delivered to the person by whom it is to be paid, and not to the person to whom the payment is to be inade, or any person on his behalf, is not liable to any stamp duty, unless payable after the date thereof, in which case it must bear a ld. stamp. See Hutchinson v. Heyworth, ante, p. 228. A written authority by A. to defendant to pay certain sums to plaintiff out of debts from time to time accruing due from defendant to A., and a written promise by defendant to pay accordingly, were held to constitute together an agreement, and not to require a bill or note stamp. Hamilton v. Spottiswoode, 4 Exch. 200. See Thompson v. Condy, infra. See also Walker v. Rostron, 9 M. & W. 411, cited ante, p. 219. So, where the creditor sends an account to his debtor, requesting him, at the foot of it, to pay the amount to A. B., and hands the account to A. B. to collect it on his (the creditor's) behalf, this is not a bill of exchange within the Act. Norris v. Solomon, 2 M. & Rob. 266.

What are promissory notes within the Stamp Act, 1870.] The terms of the present Act are so much wider than those of 55 Geo. 3, c. 184 (vide ante, p. 225), that many of the cases decided thereon are now clearly inapplicable; and as any writing containing a promise to pay any sum of money now requires to be stamped as a promissory note, it is difficult to define what instruments are to be stamped as notes, as distinguished from agreements to pay money.

The following letter, signed by the defendant, and addressed by him to the plaintiff, "G. T. M. Co.-I hereby undertake to pay you, on the first allotment of shares in the above-named Co., the sum of 105l. out of commission I shall have to pay E. M. in accordance with his letter to you on the other side," was held by Pollock, B., after consulting with Kelly, C. B., not to require a note stamp under the Stamp Act, 1870, s. 49, ante; p. 225. Thompson v. Condy, Sittings in London, 27th June, 1874; Ex. rel. editoris. The ground of this decision appears to have been that sect. 49, (1) applies only where the promise is to pay absolutely and at all events; and that (2) is limited in its application to instruments purporting to be notes, though not legally such because payable on a contingency, &c., and is not to be extended in its construction by reference to (1). See also Hamilton v. Spottiswoode, supra.

The following cases were all decided on 55 Geo. 3, c. 184, and some of them upon the special provisions of that Act with reference to agreements in the form of promissory notes, which were to be charged with agreement but not note duty, vide ante, pp. 225, 226. The Stamp Act, 1870, contains no similar provision, and the cases must therefore be read subject to sect. 49, (1), (ante, p. 225) of that act.

An instrument in this form: "Received of A. B. 100l. which I promise to pay on demand," is a promissory note, and requires a stamp as such. Green v. Davies, 4 B. & C. 235. "IO U 201., to be paid on the 22nd inst.,” dated and signed, is an instrument requiring to be stamped either as a note or an agreement. Brooks v. Elkins, 2 M. & W. 74. But the words "value received" will not render an IOU liable to a stamp. Gould v. Coombs, 1 C. B. 543. "I O U 40l., which I borrowed of M., and to pay 5l. per cent. till paid,―R. T.," is neither an agreement nor a note. Melanotte v. Teasdale, 13 M. & W. 216. See also Sibree v. Tripp, 15 M. & W. 23. "I have received the sum of 201. borrowed of you, and am accountable for it with interest," was held to be an agreement and not a note. Horne v. Redfearn, 4 N. C. 433. So, "Borrowed of J. W. 200l. to account for at months' notice if required," &c. White v. North, 3 Exch. 689. So, an instrument in the form of a receipt for money which had been advanced long before,