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post-dated, or dated on a Sunday, or that it does not specify the value given, or that any value has been given therefor, or that it does not specify the place where it is drawn or where it is payable.

A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an indorsement in blank. A bill is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable.

When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties, but is not negotiable. For example, a bill may be drawn, “" Pay John Brown only," or "Pay John Brown, not transferable," in which case no one except John Brown can safely be paid or is entitled to receive payment. Where the bill either originally, or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is, nevertheless, payable to him or his order at his option.

An inland bill is one which is both drawn and payable within the British Islands or which is drawn within the British Islands upon some person resident therein. All other bills are foreign bills (section 4). (x) Unless the place of payment is clearly indicated, it may be reasonably assumed that it is payable at the residence or place of business of the drawee, and unless the contrary appears on the face of the bill, it may be treated as an inland bill. Thus a bill drawn in the Isle of Man payable in Liverpool is an inland bill, and so also is a bill drawn in Birmingham on a merchant resident in Paris, and accepted payable at a bank in London. On the other hand, a bill drawn in Paris on a person resident in London, and accepted payable in London, is a foreign bill.

The advantages derived by the mercantile community from the use of bills of exchange are very great. For example, if A owes £50 to B, but the agreement has been that it shall not be paid for three months, B would ordinarily have to wait that length of time for his money. B, however, could draw a bill of exchange on A to pay B or order £50 three months after date. If A accepts the bill, B can then transfer it to, say, C, to whom he owes money, or he may convert it into cash by discounting it at a bank. Time of Payment.

A bill is not rendered invalid by reason of being undated, or being ante-dated, post-dated, or dated on a Sunday, although it is irregular to omit to date a bill. If a bill payable after date is undated, or if the date of acceptance of a bill payable after sight is omitted, any holder may insert the true date of issue or (x) See post, p. 334.

acceptance, and the bill is payable accordingly; provided that, where he in good faith and by mistake inserts a wrong date, or in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course, the bill is not avoided thereby, but it operates and is payable as if the date so inserted had been the true date.

A bill is payable on demand which is expressed to be so payable, or when it is expressed to be payable at sight, or on presentation, or when no time for payment is expressed. And, where a bill is accepted or indorsed when it is overdue, it is deemed as regards the acceptor or any indorser to be payable on demand.

A fixed time is not defined by the Act, but the term is customarily taken to apply to a bill drawn thus : "On the 18th September fixed, pay . . ." in which case no days of grace are allowed.

A bill is payable at a "determinable future time" within the meaning of the Act when it is expressed to be payable at a fixed period after date or sight, or on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening may be uncertain. But an instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect.

For instance, a bill payable seven days after the death of X would be a valid bill, as the specified event is bound to happen and therefore the "future time" is "determinable." But a bill payable seven days after the marriage of Y would not be valid, for, although the event may happen, yet it may not-there is no certainty. Similarly, a bill payable "seven days after my return from abroad is not valid, for I may never return.

Where the bill is not payable on demand, the day on which it falls due is determined in accordance with the provisions of Section 14, which should be carefully studied.

In calculating the date of payment of a bill, in accordance with the provisions of this section, calendar months are reckoned and no allowance is made for lacking days, so that a bill at one month's date, dated 31st January, falls due on the 3rd March, whether there are 28 or 29 days in February. When a bill after sight is sighted on one day and accepted on another, the due date is calculated from the sighting date.

The bank holidays in England and Ireland are Easter Monday, Whit Monday, the first Monday in August, and Boxing Day, i.e. December 26th, if that day is a weekday, but December 27th if the 26th is a Sunday. In Scotland the bank holidays are New Year's Day, the first Monday in May and the first Monday in August, Christmas Day, and Good Friday. The effect of the Bills of Exchange Act, section 14 (1.b), is to make Christmas

Day and Good Friday in Scotland have the effect of common law holidays in England, the object being to render the law uniform in both countries.

One case was, however, overlooked, viz., when Christmas Day falls on Saturday and the last day of grace is December 26th. In Scotland the bill is payable on December 27th, as Christmas Day is a bank holiday, but in England the bill is payable on December 24th in accordance with section 14 (1.b).

Bills in a Set.

Bills may be drawn in a set of two, three, or more parts, and, where so drawn, each part of the set (known as a via) being numbered and containing a reference to the other parts, the whole of the parts constitute one bill. The acceptance may be written on any part, but it must be written on one part only; otherwise, if more than one part is accepted, the drawee will be liable on each part as though it were a separate bill, except where all the parts get into the hands of one holder. Where the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof. Subject to the preceding rules, where any one part is discharged by payment or otherwise, the whole bill is discharged. Foreign bills are generally drawn in sets, but inland bills are rarely so drawn, as the object of the practice is to ensure safety, and speedy acceptance. The two parts are sent by different mails for acceptance, the second to arrive being attached to the already accepted first part in the hands of the holder, the two parts thereafter forming one bill.

Foreign Bills.

As stated above, any bill which does not fulfil the definition of an inland bill is a foreign bill. Foreign bills differ slightly from inland bills, as follows:

(1) They are usually drawn in sets of three, as mentioned in the preceding paragraph, with the condition expressed on each part that it is payable if neither of the other parts has been paid.

(2) Occasionally, a foreign bill is drawn at one or more usances. A usance is the customary time allowed for payment as between the country where the bill is drawn and the country of payment. If no period of payment is expressed, the maturity of the bill is reckoned at the period of usance between the two centres concerned. For example, the usance between London and New

York is sixty days' sight, the majority of bills being drawn at that currency. The practice is, however, fast dying out. (3) Foreign bills negotiated in this country are stamped with adhesive foreign bill stamps, except in the case of foreign bills on demand, when postage stamps may be used. Inland bills, other than those subject to the twopenny duty, must be drawn on paper bearing impressed stamps. (4) On dishonour, they require protesting as well as noting. (y) It is unnecessary to protest a bill which does not show on the face of it that it is a foreign bill. If, however, an inland bill bears a foreign indorsement it may be necessary to protest the bill in order to charge a foreign indorser in his own country.

The rules relating to the conflict of laws governing foreign bills will be found set out in section 72 of the Act. Broadly, it may be said that the law of the place where an act is to be done is the law governing the performance of such act; so that a bill drawn in England, accepted in Spain, and payable in France, is subject to English law as regards the drawing, to Spanish law so far as concerns the acceptance, and to French law in relation to the payment.

Capacity of Parties.

By section 22 of the Act, capacity to incur liability as a party to a bill is co-extensive with capacity to contract, except that a corporation cannot make itself liable as drawer, acceptor or indorser of a bill unless it is competent to do so under the law in force relating to corporations. It was held in In re Soltykoff, already cited, (2) that an infant is not liable upon a bill either as drawer, acceptor or indorser, even though he has given it for the price of necessaries supplied. He can be sued only upon the consideration. But where a bill is drawn or indorsed by a corporation having no capacity to do so, or by an infant, the drawing or indorsement entitles the holder to receive payment of the bill from, and to enforce it against, any other party thereto.

No person is liable as drawer, indorser or acceptor of a bill who has not signed it as such, except that a person who signs in a trade name or under an assumed name is liable as if he had signed his own name; and the signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm.

Under the Companies (Consolidation) Act, 1908, a limited company incorporated for the purposes of trade, or otherwise (y) See post, p. 112. (z) See ante, p. 34.

having capacity, may be a party to a bill and will be bound if it is made, accepted or indorsed in the name of, or by or on behalf of, or on account of, the company by any person acting under its authority. But, as held in the case of Premier Industrial Bank Limited v. Carlton Manufacturing Co. Limited (1909), the person signing must be a person who is in fact acting under the authority of the company.

A signature by procuration (per procurationem or, in short, per pro) operates as notice that the agent has but a limited authority to sign, and the principal is bound by such signature only if the agent in so signing was acting within the actual limits of his authority.

Any person who signs a bill as drawer, indorser or acceptor and adds words to his signature indicating that he signs for or on behalf of a principal, or in a representative character, is not personally liable thereon; but the mere addition of words describing himself as an agent, or as filling a representative capacity, does not exempt him from personal liability. Thus, if A.B. signs as "A.B., Manager," he is personally liable; but if he signs "For X.Y.Z. Co., Ltd., A.B., Manager," he is not liable. A member of a partnership, if it is a trading concern, may draw, accept, and issue bills and other negotiable instruments in the name of the firm. But partners in firms not formed for the purpose of trade, or whose business does not normally demand the drawing or accepting or indorsing of bills, are not able to bind the firm by signing a bill in any capacity unless they are in fact so authorized, e.g., a partner in a firm of solicitors would have no implied authority to accept a bill in the name of the firm.


Where a signature is forged or placed on the bill without the authority of the person whose signature it purports to be, such signature is wholly inoperative and no right can be acquired thereunder unless the person against whom it is sought to enforce the right is precluded from setting up the forgery or want of authority. So that a forged indorsement on an order bill would give no title to a transferee and he would not be a holder in due course, even though he took the bill for value and with no knowledge of the forgery. But he could, however, recover the amount he himself had paid for the bill from the person who transferred it to him. It has been held that if the holder of a bill on which the acceptance is forged gets the acceptor to ratify it, such ratification fails as being contrary to public policy.


Acceptance is defined by section 17 (1) of the Act as

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