Page images

On a bill or note, payable a certain time after date, the action can be first brought on the day of dishonor.

The action on a bill accepted, payable on a certain event, as the paying off of a Queen's ship, &c., can be first brought on the happening of the event on which the instrument was payable.

If a note is payable by instalments, but upon any default then the whole to be due, the action can then be brought upon the first default.

But, if the administrator of a party to a bill or note have not taken out letters of administration till after the bill or note became due, then the six years will only count against the administrator from the time of his taking out letters of administration.

If a bill or note is payable at, or a certain time after sight, no action can be commenced until presentment, or exhibition to the maker.

But, if the instrument be payable "on demand," (no demand being necessary to entitle a person to sue, i. e. the action being itself a sufficient demand,) the six years will count from the date of the bill.

If an accommodation acceptor, having paid the bill, is suing the drawer, the plaintiff can sue within six years from the time of paying the money.

If acceptance of a bill be refused, and afterwards at maturity it be not paid, the six years counts from the refusal to accept.

If the Statute have run out against the holder of a bill or note, his transferee is in no better position.

5. The six years, in order to operate as a bar, must have expired before the commencement of the action, i. e. in the Superior Courts before the issuing of the writ, and in the County Courts before entering the plaint.

6. The operation of the Statute can be effectually prevented by commencing an action without bringing it to trial. If the action is in the High Court of Justice the plaintiff may obtain a writ which is good for a year and even then he need not serve but, before the end of the year, may get it renewed by leave of a Judge or of the district registrar. On renewal it is resealed and stands good for six months, before the lapse of which it may be again renewed for a similar period. A plaint entered in the County Court stands good for a year

and if the summons be not served the plaint may be renewed every year. Where the defendant is difficult to find or is unable to pay, this is a mode in which the plaintiff may keep up his rights against him as long as he does not go bankrupt.

7. Certain acknowledgments and payments have the effect of taking the case out of the Statute (i. e. preventing its operation), and give the plaintiff another six years within which to sue, counting from the date of such acknowledgment or payment, and they have this effect whether made before or at any time after six years from the accrual of the original debt.

8. These acknowledgments must be in writing, and signed by the party whom it is sought to make liable (i.e. the defendant), or by some person authorised by him.

A clerk, a wife, or an infant, may be an agent for this purpose.

In case of persons liable jointly, or jointly and severally, as drawers, acceptors, makers, &c., no acknowledgment or payment will bind any one but the person making it, unless, of course, it were made with the authority of the person liable jointly with him, as it would often be in the case of ordinary partnerships, when the acknowledgment was signed or the money paid in the name or on behalf of the firm.

No acknowledgment need be stamped, unless it amounts to a promissory note, an agreement, or a deed.

A simple acknowledgment of a sum due is presumed to mean a promise to pay, though it may be written, as often happens in correspondence, without any such intention; but, of course, the promise of payment must not be repelled by any expressions in the acknow ledgment.

If the acknowledgment do not state expressly or point out by reference, some particular sum, as by referring to a bill or note, or the balance due upon it, &c., the sum due may be supplied by verbal evidence.

If the acknowledgment contain no date, the person receiving it should preserve the date in his memory, by making a memorandum on the back, which is not, how ever, in itself evidence.

9. A payment, in order to take a case out of the

Statute, should appear to be part payment of a larger sum, of which a portion remains due, and to be made on account of the debt sued for.

A devise, or bequest for the payment of the debt due to a specified creditor, will take the debt out of the operation of the Statute.

An executor is not bound, except by an express promise.

Where a debtor owes some debts which are barred, and some which are not, and makes a general unappropriated payment, such payment will not take the barred debts out of the Statute, unless the creditor, by notice, appropriates the payment; (as to which, see chap. xi). Giving a bill or note may amount to payment or acknowledgment. Goods treated as money are a sufficient payment. When on one or both sides of an account there are items which are barred by the Statute, and a settlement of the account takes place and a balance is struck, the process of forming a balance by both parties is regarded as a mutual payment, and takes the case out of the Statute, as regards the balance, which may, therefore, be sued for by the person in whose favor it stands.

10. The acknowledgment need not be made to the plaintiff, nor, indeed, to any party to the bill or note. Thus, a letter from one joint acceptor to his co-acceptor, or a deed between a party to the bill and a stranger, reciting that the bill is outstanding and unpaid, may amount to an acknowledgment against the persons writing the letter, or executing the deed respectively.

11. Payment may be proved like any other fact. An entry or memorandum, or a statement made by the party paying, will be good evidence against him by way of admission in proof of such payment.

But, no entry of part payment made on a bill or note, by the party receiving the money, will be evidence of such payment, so as to prevent the Statute from running.

Mr. Justice Byles, in his work on bills, advises that the debtor should write the memorandum of part payment, whether of principal or interest, on the back of the bill or note, and that he and the creditor should both sign it, and thus the rights of both will be protected.

Payment of interest takes the principal out of the Statute, and part payment of principal (in the case of bills and notes) has the same effect upon interest.

12. Independently of the Statute, there is a presumption that a note twenty years old (not being a bank note) is paid.



1. Of the right to set-off debts.

2. General requisites of debts which are to be set-off. 3. Defendant may set-off a debt though he may be able to sue others than plaintiff for it.

4. Mutuality of such debts.

5. Position of surviving partner as to set-off.

6. Joint and several debtor sued alone for his joint and several debt.

7. Enlarged right of set-off under Judicature Acts. 8. In Bankruptcy.

1. A defendant sued for a liquidated money demand, is permitted, but not obliged by law, to set-off against the sum which plaintiff claims, any liquidated money demand due from the plaintiff to the defendant.

2. Subject to the qualification stated in s. 7 below, both the plaintiff's claim, and the defendant's set-off, must be liquidated money demands.

The defendant's set-off may be of a less or a greater amount than the plaintiff's claim.

Instead of pleading a set-off, the defendant may, if he likes, bring a cross-action, or he may do both, but if he is successful on the plea in the original action, the judgment in the cross-action, if in his favour, will be propor. tionally reduced.

One judgment may be set-off against another.

The debt to be set-off must be one recoverable at law, without the help of equity.

It must be a subsisting legal debt, and not one the remedy for which is barred by the Statute of Limitations, or one which is satisfied by the discharge of the debtor out of custody. If the set-off claimed is barred

by the Statute of Limitations, that Statute must be specially replied.

The debt must have been due at the commencement of the action, and must remain due at the time of trial.

A bill or note, for example, to be set-off, must have been due and unpaid in the defendant's hands when the action was commenced, and must remain in his hands at the trial.

3. A debt may be set-off although the defendant who sets it off may be able to sue persons other than the plaintiff for it; for instance, on a bill there might be many who could be sued for the amount, and also on a joint and several note of which the plaintiff was one of the makers.

4. The rule of set-off is that the debts must be mutual; that is, that the debt to be set off must be due from the plaintiff or plaintiffs alone to the defendant or defendants alone.

For example, if A and B sue D, D can set-off a debt due to him from A and B, but not one due to him from A alone, or one due from A, B and C.

So also if the debt were due from A and B, not to D alone, but to D and E, then the debt could not be set-off by D.

5. But the debts and credits of a firm are vested at law in the surviving partner, who is then in the same position as regards set-off as if the other parties had never existed.

For example in the above case, suppose D and E were partners, and E were dead, D, though the sole defendant, and sued for his private debt, might set-off a sum due by A and B, the plaintiffs, to the firm of D and E. And the reason of this is to save the trouble of cross-actions; for though the debt did not originally accrue to D alone, yet D is now the only person who could sue for it.

6. If A sue B alone, B may plead that the money is owed by him, together with C, and that a set-off is due from A to B and C.

7. But now, by the Supreme Court of Judicature Acts, a defendant may set up by way of counter-claim any claim whether liquidated or not, (that is, whether debt or damages,) and may in like manner, set off any claim of whatever kind which he may have against the plaintiff jointly with any other person or persons. These

« PreviousContinue »