it is bad, yet may confer a good title to it (y). This principle was established in favour of all negotiable instruments by the case of Miller v. Race (z); but it Miller v. Race. must be carefully borne in mind that if the instrument is not negotiable, as if in the body of it the words "or bearer," or "or order," are not made use of (a), or if it is payable to order, and not indorsed, the thief or finder cannot pass any title to it by forging the indorsement (b), except, indeed, as against himself. But to enable the principle of the above-mentioned case of Miller v. Race to apply, it is necessary that the instrument should have been taken for valuable consideration and bona fide, for if there are any mala fides, then being in the nature of specific property, the true owner has a right to recover; but any mala fides must be alleged and clearly proved (c), and the mere fact of a person not having exercised the fullest caution in taking such an instrument will not be sufficient to deprive him of his benefit as transferee (d). debt a sufficient con Upon the point of consideration, the recent case of Pre-existing Currie v. Misa (e) may be noticed, it deciding that a pre-existing debt due to the holder of a negotiable in- sideration. strument is a sufficient consideration for its having Currie v. Misa. been handed to him, just as much as if it had been a fresh advance. In that case the defendant drew a cheque. for £1999. 38. in favour of one Lizardi or bearer, and he paid it to the plaintiffs, his bankers, in consideration and on account of an amount owing to them exceeding that sum on his overdrawn account. Before presentment of the cheque Lizardi stopped payment, whereby (y) Broom's Coms. 453. (z) 1 S. L. C. 526; 1 Burr. 452. (a) See ante, p. 120. (b) Byles on Bills, 335. (c) Goodman v. Harvey, 4 A. & E. 870; Usher v. Rich, 10 A. & E. 784. (d) Ibid.; Raphael v. Bank of England, 17 C. B. 161; and cases collected in 1 S. L. C. 548-552. (e) L. R. 10 Ex. 153. Lord Coleridge, C.J., dissented from this decision, which has, however, now been affirmed by the House of Lords (see Weekly Notes, July 8th, 1876, p. 213). No title can be obtained through a forgery. How the liability on a bill or note may be dis charged. Acts which will operate to discharge sureties will operate to discharge drawer or indorsers. the consideration for the defendant giving the cheque failed, and he accordingly instructed his bankers not to honour it, and this was an action brought to recover the amount. There was no doubt that had the cheque been parted with to the plaintiffs for value then paid bona fide without notice, they could have recovered, and the court decided that they could do so here, the already existing debt being equivalent to a first advance. The general rule is, that no title can be obtained through a forgery, and if a bill or note bearing a forged indorsement is paid by a banker the loss will fall on him and not on the customer, in which respect it is now different to a cheque, as is hereafter noticed (ƒ). The liability on bills and notes may be discharged in different ways, and especially as to different parties to them. If the person primarily liable on such an instrument pays the amount, that necessarily discharges all the other parties, but if a person not so primarily liable pays it, then only he and parties subsequent to him are discharged, and the liability of prior parties remains. Irrespective of payment the obligation on such an instrument may be discharged at any time by parol, and, it seems, without any consideration (9), also as to parties not primarily liable by omission to present and give due notice of dishonour, and as (as has been pointed out (h)) the position of the parties is similar to that of creditor, principal debtor, and surety, any act that will operate to discharge sureties will operate to discharge parties not primarily liable on bills and notes (i). Noting or protesting is not necessary to entitle a person to sue on an (f) See post, p. 137. (g) Byles on Bills, 234. For the acts that will operate to discharge sureties, see ante, pp. 41, 42. not for an inland bill. what is a inland bill or note, though even as to them noting is Noting and very usual, but in the case of a foreign bill both noting necessary for protesting and protesting are generally necessary. By the noting a foreign, but is meant a minute made by a notary public or consul of the fact of the presentment and dishonour of the instrument; and by the protesting is meant a solemn declaration by the same official that the instrument has been presented for payment and dishonoured. An What is an inland bill is one both drawn and payable in the United inland and Kingdom, or the Islands of Man, Guernsey, Jersey, foreign bill. Alderney, and Sark, and the islands adjacent to any of them, being part of the dominions of her Majesty (k), and a foreign bill is one either drawn abroad or payable abroad. The chief peculiarities of a foreign bill in which it differs from an inland one are, that it may be stamped after execution; it generally requires noting and protesting; it is most usually drawn in parts; it is frequently drawn at one or more usance," and with regard to the law which binds such bills, where both drawn and payable abroad, they will be construed according to the foreign law; where drawn here and accepted abroad the liability of the drawer is according to our law, and that of the acceptor according to the foreign law, and where drawn abroad and accepted here the liability of the drawer will be according to the foreign law, and that of the acceptor according to our law (). back of a bill A receipt given on the back of a bill or note for the Receipt on money requires no receipt stamp (m), and a person pay- or note requires ing a negotiable instrument has a right to the posses- no stamp. sion of it (n). Promissory notes, bills of exchange, or drafts, or Bills and notes undertakings in writing, being negotiable or trans- for less than (k) 19 & 20 Vict. c. 97, s. 7. (Broom's Coms. 464, 465. (m) 33 & 34 Vict. c. 97, Schedule, title "Receipt, Exemptions." (n) Byles on Bills, 226. 20s. pro- Ambiguous instrument. Effect of loss of a negotiable instrument. Bill or note carries interest. ferable for the payment of any sum or sums of money less than the sum of 20s. in the whole, are prohibited under a penalty of £5 (0). Certain penalties were also required in the case of such instruments above 20s. but less than £5 (p), but this statute is not in force at the present time (q). If an instrument is on its face so ambiguous that it is doubtful whether it is meant as a bill or a note, it is in the election of the holder to treat it as either, and where a person gave a note for money borrowed "which I promise never to pay," it was held that the word "never” might be rejected (r). A corporation cannot bind itself by a bill or note unless incorporated for the very purpose of trade (s). The effect of losing a negotiable instrument formerly was that no action could be brought in respect of the amount payable thereon, because there was always the possibility that it might have got into the hands of a bonâ fide holder for value; but equity would have given relief on a proper indemnity being given on the principle of an accident, and by the Common Law Procedure Act, 1854 (t), power was given at law for the court or a judge to order that the loss should not be set up on a like indemnity. A bill or note carries interest from the time of dishonour as regards the acceptor or maker thereof, and as regards any other party liable thereon from the time of notice of dishonour having been given to such other party, and it has been decided that when a person guarantees payment of a bill or note, he is liable not (0) 48 Geo. 3, c. 88, ss. 2, 3. (p) 17 Geo. 3, c. 30. (4) 38 & 39 Vict. c. 72, continues its repeal till 31st December, 1876, and end of then next session. (r) Chitty on Contracts, 94. (s) Ibid. 94, 249. (t) 17 & 18 Vict. c. 125, s. 7. only for the principal amount of it, but also for interest (u). c. 67, as to In the case of bills of exchange or promissory notes, 18 & 19 Vict. a special remedy has been provided by the Summary procedure. Procedure on Bills of Exchange Act, 1855 (a), for under that statute the holder of such an instrument, provided it is not more than six months overdue, may issue a writ of summons, to which the defendant cannot appear as a matter of course, but only on leave to be obtained from a judge, which leave will only be granted on paying the amount claimed into court, or shewing upon affidavit a defence upon the merits. If within twelve days of service of the writ the defendant does not get this leave and appear, the plaintiff may at once sign final judgment and issue execution. The holder may sue all the prior parties in one action, but all subsequent proceedings are as if separate writs had been issued. It is no defence to an action brought on a bill or note that after the day for payment the defendant tendered the amount to the plaintiff, for he has committed a breach in not paying on the day, and the plaintiff's claim is for damages (y). To sum up as to bills and notes, the following may be Summary of stated as the chief points in which they differ from differences in other ordinary simple contracts :— 1. They must always be in writing by the custom of merchants. 2. They must always be stamped, and as to inland bills before execution. (u) Ackerman v. Ehrensperger, 16 M. & W. 99. (a) 18 & 19 Vict. c. 67. Cheques are included under " Bills and Notes" in this statute. (y) Hume v. Peploe, 8 East, 168. bills and notes from other simple contracts. |