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acceptor, and a note by the maker, they remain negotiable. Therefore, the drawer or indorser who has taken up a dishonored bill at maturity, can, instead of himself suing the acceptor, indorse the bill to another person, who will have that right.
When the acceptor or maker has made a partial payment at maturity, the balance only can be recovered by the holder.
The holder of a note, on which part of the consideration has been paid, can only indorse for the whole of the balance.
When a bill is transferred for part only of the sum due upon it, if this fact appears on the bill itself, the indorsee must sue in the name of the person who transferred to him; but if the indorsement do not mention the fact, and there be no memorandum of it on the bill, the indorsee can sue and recover in his own name the whole amount of the bill, and will be a trustee of the surplus for his transferor.
After giving a release for the bill, or after bringing an action on the bill, the holder cannot indorse so as to confer a title on any one who knows of the release or the action, as the case may be.
19. A promissory note for less than £20, payable to bearer on demand must be made payable where issued, but may be also payable elsewhere. If the bill or note be under £5, it must not be payable to bearer on demand, and must only have twenty-one days to run. No indorsement must be made after the bill or note is due ; each indorsement must be dated; and the date must be at or not before the time of making, must specify the name and place of abode of the indorsee, and be attested by one subscribing witness at least. (See 42 and 43 Vict., c. 67; and see Chalmers on Bills Act, 284.)
HOW FAR A BILL OR NOTE IS CONSIDERED AS PAYMENT.
1. Rights of Creditor who has taken a Bill or Note for a Debt.
2. Rights of Parties taking Instruments payable to Bearer without Indorsement.-Sale of Bill or Note. 3. Creditor of a Firm taking separate Bill or Note of one Partner
4. Loss of Bill received for a Debt.
5. Lien ceases on taking a Bill.
6. Miscellaneous matters connected with payment.
1. It has already been stated that if a creditor take a bill or note payable at a future day from his debtor, or from a third party for the debtor, the debt is not paid, but no action can be brought for it till the bill or note is mature and dishonored.
If the bill or note is paid, or if it is lost or discharged by the negligence of the creditor, the debt is satisfied; but see sec. 4.
I quote the following from Chalmers on Bills, chap. v: "When a party to a bill is discharged from his liability thereon by reason of the holder's omission to perform his duties as to presentment for acceptance or payment, protest, or notice of dishonor, such party is also discharged from liability on the consideration for which the bill was given."
Protest is not wanted for inland bills and notes, except it be desired to obtain an acceptance supra protest.
If the bill is in the hands of the creditor overdue and dishonored, he has his remedy, either on the bill itself or the original debt; and though he may have parted with the bill, the creditor will, in case it be dishonored, still have his remedy for the original debt.
I have spoken of the debt being discharged by the negligence of the creditor who has taken the bill. This refers to the case where the debtor, giving the bill for the debt, is drawer or indorser, and must have punctual notice of dishonor. (See chapter xiv.) If the debtor were acceptor or maker of a bill or note, he cannot be discharged by the creditor's negligence.
The law will be the same if the debtor request the creditor to take a bill or note of a third person, and the bill or note is dishonored; the creditor may sue his original debtor. The same where, not having the option of taking cash, he takes a bill of the debtor's agent.
2. We have seen (chap. iv, sec. 11) that where a bill or note made or become payable to bearer, is given, though without indorsement, for a pre-existing debt or past consideration to a creditor who is entitled to money, the creditor may still sue his debtor if the bill is dishonored. But if the payment of such a bill be made, not for a past debt, but for an immediate consideration, such as the sale of goods then and there, the seller is supposed to consent to take the bill in exchange for the goods, and as he has not insisted on indorsement, he cannot sue the buyer if the bill turns out worthless, for the bill has been simply exchanged, with all its faults, for the goods. As to the case of some of the signatures being forged, &c., see chap. iv, sec. 12.
But a bill may, in the same way, by agreement between the parties, be taken, not only upon such a bargain as that just mentioned, but for a pre-existing debt. In fact, a debtor may, by express agreement with his creditor, give him a bill payable to bearer without indorsing it, so as to be at once, and whether eventually paid or not, a satisfaction and payment of the debt.
3. But though, in the absence of an agreement, a creditor does not receive payment of a debt by simply taking the bill or note of his debtor, yet if his debtor be a firm, and he takes the separate note of one of the partners, he will be taken to have discharged the firm, and to rely solely upon the single partner, unless, of course, there were an express agreement that the others should remain liable. This is because, in the case of the bankruptcy of the firm, or the death of the partner, the creditor might be in a far better position than if he had the whole firm as his debtors, and this advantage amounts to a consideration.
4. If the bill or note be lost, the debt is discharged; but the owner may sue on the instrument, and recover the money, on giving an indemnity to the satisfaction of the Court.-B. of Exch. Act, s. 70.
5. Where a man has a lien on goods, and he takes a bill or note for the debt, the lien on the goods ceases, and he must give them up to the owner, unless there is an express agreement for him to keep them.
6. When a renewal bill or note is dishonored, the right to sue on the old bill or note revives.
Where a man is bound by deed to pay money, the taking a bill or note from him does not extinguish or suspend the right to sue him upon the deed.
If he owe money for rent, and give a promissory note for it, the landlord may still distrain at any time till the note is paid.
If on borrowing money a man covenant to pay it by deed, as by giving a mortgage, and give a bill or note at the same time by way of collateral security, the creditor may sue either on the deed or bill; but where it is not so intended, the right to sue on the bill is merged or swallowed up in the right to sue on the deed.
1. Meaning and nature of. 2. General Acceptance.
3. Qualified Acceptances.
4. Effect of taking qualified acceptances.
5. When Bill may be accepted-date.
6. What may be treated as a refusal to accept.
7. Delivery must accompany Acceptance.
8. Bill can only be accepted by drawee. Exceptions: acceptor for honor and case of need.
9. Condition of liability of acceptor for honor.
10. What is admitted by Acceptance. 11. How Acceptor may be discharged. 12. Who must accept?
1. Acceptance only applies to bills.
When the drawee irrevocably assents to pay the bill in money when due, he is said to accept.
Acceptance in this country of bills, whether inland or foreign, must be by writing on the bill, signed by the
acceptor, or some person duly authorized by him in his name; but mere signature without additional words is sufficient. (See B. of Exch. Act, s. 17.)
2. Adopting the classification of acceptances given in the Bills of Exchange Act, I divide them into general. and qualified.
A general acceptance assents without qualification to the order of the drawer and may be expressed by a simple signature written across the bill, whether preceded or not by the word "accepted." If a place of payment be designated in the acceptance by such words as "payable at Drummond's bank," without adding “and there only," or words to that effect, it is still a general acceptance.
3. A qualified acceptance is one which, in express terms, varies the effect of the bill as drawn.
An acceptance is qualified when it is conditional, i. e. when it makes the payment dependent on a condition stated, as "Accepted on condition of a six months' renewal."
An acceptance is qualified when it is partial as Accepted for £100 only," or "Accepted payable by monthly instalments of £10."
And an acceptance is qualified when it is local, as Accepted payable at Coutts' bank, and there only.' An acceptance may also be qualified as to time, as "Accepted payable in six months," when the bill is drawn at three months, and may be qualified also by being given by one only of two drawees.
But an acceptance which expresses that the drawee will satisfy the demand by any other means than the payment of money is bad.
4. Where a bill has been drawn and transferred unaccepted and it rests with the holder to get an acceptance, he may refuse to take any kind of qualified acceptance, and may at once treat the bill as dishonored for want of a general acceptance. If he takes a qualified acceptance it will bind the acceptor and all subsequent parties; but, except in the case of a partial acceptance, of which due notice has been given, it will not bind those who have already drawn or indorsed unless they have authorized it or assent to it expressly or by implication. If, upon receiving notice of it, they are silent, they will be deemed, after a reasonable time of