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“ in writing made by one person to another, signed by the “ maker, engaging to pay on demand, or at a fixed or deter“ minable future time, a sum certain in money, to or to the “ order of a specified person, or to bearer.” These instruments (if payable to order or bearer) were, by the statutes 3 & 4 Anne, c. 8, and 7 Anne, c. 25, placed upon the same footing, as to negotiability and otherwise, with inland bills of exchange, so that almost every point of law which applies to the one may be taken generally as applicable also to the other ; with only this difference, that, as a note is originally made between but two parties, viz., the maker and the payee, (there being no third party, or drawee, as in the case of a bill,) all those legal incidents of a bill which regard the position of the drawee, and the nature and effect of an acceptance, are of course foreign to a note (t). The maker of the note stands, in fact, in the place of both drawer and acceptor. He is the party in every case primarily liable ; and to him, accordingly, the holder presents the note in the first instance for payment, when it arrives at maturity. On his failure to pay, the holder may then resort to the indorsers, each of whom has a successive right of recourse against the names anterior to his own, leaving to the first indorser, or original payee, no remedy except against the maker himself. And there is this further difference to be observed between bills and notes, namely, that a note, if made payable at any specified place, must be presented there for payment, though the restrictive negative words “and not elsewhere” should not have been added (u).
Bills of exchange and promissory notes (as compared with other contracts) have, as “negotiable instruments," some legal properties of a peculiar kind. First, although choses in action, a “ holder in due course ” (.e., a bona file indorsee for value) takes them free from the equities affecting them in the hands of the assignor. So much so
(1) Section 89.
(u) Section 87.
that, though by the general rule of law a party can give no better title to a thing personal than he himself bas, yet he who has obtained by wrongful means, or even by felonious means, the possession of a bill or note drawn pavable to order and indorsed in blank, or drawn payable to bearer, is competent to make a valid transfer of the instrument and its contents, by merely delivering it for valuable consideration to a person unaware of the defect in his title (or). In this particular, the instruments in question-and indeed all others of a negotiable kind, which are transferable by mere delivery (with or without indorsement)--are, for the benefit of commerce, placed upon the same basis with the current coin of the realm ; which (as we have already had occasion to observe) passes freely from man to man, without regard to any defect in the title of him who pays it over, provided it be paid for valuable consideration, to an innocent party (y). Even where the bill or note is paid upon a forged indorsement, the money paid to a holder in due course cannot be recovered back (). This is a convenient place to observe that, by an express provision contained in section 60 of the Bills of Exchange Act, 1882, a banker who, in the case of a draft or order upon himself, pays the amount thereof in good faith and in the ordinary course of business to the purported indorsee or bearer, is not liable to make good to his own customer the amount so paid away, although it should be afterwards shown that the indorsement was a forgery. But in all other cases of a wrongful payment by a banker (as such), the bank is the loser, and cannot charge its own customer with the amount paid ; unless, of course, the customer by his own negligence has caused the wrongful payment (a).
Secondly, although in other cases of simple contract the
(3) Sections 29, 54, 55.
Bank v. Bunk of Liverpool, [1893 1 Q. B. 7.
(a) Vagliano v. Bank of Eng. land,  A. C. 107.
party who sues thereon for the breach of contract, is obliged to prove the consideration on which the promise was made, and on failure of such proof will be defeated, yet no evidence of the consideration is required from the holder of a bill or note, for he is in general called upon to provenothing beyond the signature thereto of the party charged, every bill or note being deemed, in law, to carry with it, primâ facie, a sufficient consideration (6). If, however, the bill or note were shown to have been given for an illegal consideration, the holder would be required to prove that he gave value for it ; and, even then, he might be defeated by proof that he was aware; of the illegality when he took it (c). And a party known as an “ accommodation “ party” who, in fact, receives no consideration for a bill, is not liable on the bill to any other party, except a holder for value, i.e., a person who has either himself given value for it, or has taken the bill through some prior party who has given value for it (d).
Thirdly and lastly, any material alteration in a bill or note avoids the instrument (e); and this rule extends to Bank of England notes (f). But, by the Bills of Exchange Act, 1882, s. 64, an alteration that is “not apparent,” does not avoid a bill or note in the hands of a holder in due course.
(6) Section 30; 2 Bl. Com. 446.
(c) Bailey v. Bidvell (1844), 13 M. & W. 73.
(d) Sections 28 ; and 27 (2).
(e) Aldous v. Cornwell (1868), L. R. 3 Q. B. 753.
(1) Sufiell v. Bank of England (1888), 9 Q. B. D. 555.
CHAPTER V.-SECTION X.
OF POLICIES OF LIFE AND FIRE INSURANCE ; AND OF
A POLICY of insurance is an instrument in writing by which one party, in consideration of a premium, engages to indemnify another against a contingent loss, by making him a payment in compensation, if and when the event happens by which the loss accrues. The effect of such a contract is obviously to protect the latter party (or the assured, as he is called) from the hazard to which he would otherwise be exposed, and to throw that hazard upon the insurer, or party giving the indemnity ; who, if he carries on a general insurance business, by balancing the good against the bad, and by adjusting the premium as the circumstances seem to require, may not only himself escape loss, but may even secure for himself considerable profit from the result. Moreover, associations and other companies and corporations have been established for carrying on the business of insurance on a large scale : and the risks of any particularly heavy insurance are usually distributed among a great number of insurers. The losses most commonly insured against are those occasioned by the storms and perils of the sea, or by fire, or by death, which insurances are therefore called respectively marine insurances, fire insurances, and life insurances. But insurances may be (and at the present day very usually are) effected also against losses resulting from other accidental causes, as from burglary (a), accident, illness, and the like (6). And a valid insurance has been
effected even against loss sustained to a trading port through the attacks of foreign enemies therein (c); and insurances to secure the payment of debentures (d) are now in common use. But it is sufficient if we discuss the subject of insurance in its three principal branches already mentioned.
(1.) MARINE INSURANCE is said to have been originally introduced into this country by the Lombards in the course of the thirteenth century. The business of marine insurance is commonly undertaken by individuals or firms carrying on business in private partnership. A certain number of these persons or firms usually subscribe ihe instrument (or policy, as it is called), each engaging, on his or their own separate account, to indemnify the assured to the extent of a particular sum of money, being a proportion of the whole value of the subject of insurance ; and such persons are called, with reference to the method used of thus subscribing their names, underwriters. They belong, for the most part, to an association called “ Lloyd's," the members of which underwrite each other's policies; and the association, for better protecting its members against avoidable losses, is enabled (with the sanction of the Board of Trade) to establish signal stations and signal houses, and to arrange for telegraphic communication therewith (e). But marine insurances may also be made by bodies incorporated by private Act or charter ; or by limited companies established under the Companies Acts, 1862 to 1900. For although the Royal Exchange and London Assurance Companies at one time enjoyed, under certain statutes, a practical monopoly of the business of underwriting, this monopoly was abolished by the statute 5 Geo. IV. c. 114.
(c) Carter v. Boehm (1763), 3 Burr. 1905.
(d) Finlay v. Mexican Invest
ment Corporation,  1 Q. B. 517.
(e) Lloyd's Signal Stations Act,