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are reserved, whether by express agreement (z), or by the nature of the transaction, or by the original debtor's name being on the new bill, the taking of the bill of one of several, or of a stranger, does not discharge the original debtor.

Where a debtor indorses a bill to his creditor, the creditor cannot sue for his debt without proving presentment of the bill and notice of dishonour (a). But where he does not indorse it, it seems sufficient for the creditor, when suing for the original debt, to show that the bill still remains in his hands, without proving presentment (b), or notice of dishonour (c); for that is presumptive evidence of dishonour, sufficient to throw it on the defendant to show that the bill has been paid.



What a creditor who has been paid by

a dishonoured

bill must


knew the instrument to

If the party who gave the bill in payment as a good bill Where the know at the time that it was of no value, or fraudulently transferor misrepresented the solvency of parties to it (d), the holder, on discovering the fraud, may immediately sue such party be of no on his original liability; or, if the bill were given for goods, value. delivered at the time, he may disaffirm the contract, and sue in trover for the goods. Thus, where a vendee, under terms to pay for goods on delivery, obtained possession of them by giving a cheque which was afterwards dishonoured, Lord Tenterden said, "If the vendee had reasonable ground to expect that the cheque would be paid, the transaction was not fraudulent, and the property would pass to him if he had not reasonable ground for so expecting, the transaction was fraudulent, and the vendors are entitled to recover their property in an action of trover" (e).

A negotiable bill or note given in discharge of a debt, and then lost or destroyed, is at common law payment (ƒ); but

(2) Bedford v. Deakin, 2 Stark. 178; 2 B. & Ald. 210.

(a) Kearslake v. Morgan, 5 T. R. 513 Bridges v. Berry, 3 Taunt. 130; 12 R. R. 618.

(b) Goodwin v. Coates, 1 M. & Rob. 221.

(c) Bishop v. Rowe, 3 M. & Sel. 362.

(d) Byles on Bills, 6th American ed. p. 575.

(e) Hawse v. Crowe, 1 R. & M. 414; Puckford v. Maxwell, 6 T. R. 52; Owenson v. Morse, 7 T. R. 64; Bishop v. Shillito, 2 B. & Ald. 329, n.; 20 R. R. 457, n.;

Taylor v. Plumer, 3 M. & Sel.
562 16 R. R. 361; Brown v.
Kewley, 2 B. & P. 518; Gladstone
v. Hadwen, 1 M. & Sel. 517;
14 R. R. 520; Noble v. Adams, 7
Taunt. 59; 17 R. R. 445; Earl of
Bristol v. Wilsmore, 1 B. & C.
514; 2 D. & R. 755; 25 R. R. 488;
Kilby v. Wilson, 1 R. & M. 178.
See the American authorities to
the same effect, Byles on Bills,
6th American ed. pp. 37, 450,

(f) Woodford v. Whiteley, M.
& M. 517; Crowe v. Clay, 9
Exch. 604. N.B.-In this Chapter

A lost or destroyed bill,

when payment.


Payment by

bank notes or

bills or notes payable to bearer.

Where a bill is renewed.

Taking a bill determines a lien.

the statute 17 & 18 Vict. c. 125, s. 87, would enable the owner to recover, or Code, ss. 69, 70.

We have already seen (g), that it has been held that, where a bill or note payable to bearer is delivered without indorsement, not in payment of a pre-existing debt, but in payment or exchange for goods or other securities sold at the time, such a transaction amounts in general to a sale of such a bill or note, and to an election by the transferee to take it as money with all its risks, and, consequently, to complete payment by the transferor (h).

If, in payment of dishonoured bills, other bills be given for the sum due, and the first bills remain in the hands of the holder, if the latter bills be not paid, the liability of parties on the first bills revives (i). And even if the new bills be duly paid, the holder may recover on the old bills, if the amount of principal and interest due thereon be not covered by the amount of the new bills (k). The holder of an old bill for the full amount of which a new bill is given cannot sue on it till the new one is at maturity (1).

The taking of a bill or note in payment will, in general, determine a lien. Thus, where the owner of a ship having a lien on the goods, until the delivery of good and approved bills, took a bill of exchange in payment, and though he objected to it at the time, afterwards negotiated it, it was held that such a negotiation amounted to an approval of the bill by him, and to a relinquishment of his lien on the goods (m). So, where, for goods sold, the vendor took the vendee's promissory note, and negotiated it with his banker, and it was subsequently dishonoured, but continued outstanding in the banker's hands, it was once held that the vendor, by taking the note and negotiating it, relinquished his lien, and that the lien did not revive on the dishonour

the word PAYMENT is not always
used in its strict legal sense.

(g) Chapter on TRANSFER.
(h) Camidge v. Allenby, 6 B. &
C. 373; 9 D. & R. 391; 30 R. R.
358; Ward v. Erans, 2 Ld. Raym.
928: Brown v. Kewley, 2 B. &
P. 518; Guardians of Lichfield
Union v. Greene, 26 L. J., Exch.
140; 1 H. & N. 884; Smith v.
Mercer, L. R., 3 Ex. 51. See
the Chapter on TRANSFER.

() Ex parte Barclay, 7 Ves.

596; Bishop v. Ronce, 3 M. & S. 362; Dillon v. Rimmer, 1 Bing. 100; 7 Moo. 427.

(k) Lumley v. Musgrove, 4 Bing. N. C. 9; 5 Scott, 230.

(1) Kendrick v. Lomax, 2 C. & J. 405; 2 Tyr. 438.

(m) Horncastle v. Farran, 3 B. & Ald. 497: 2 Stark. 590; 22 R. R. 461; Alsager v. St. Katherine's Dock Company, 14 M. & W. 784: Tamraco v. Simpson, 19 C. B., N. S. 478.


of the note, the note continuing in the banker's hands (n). CHAPTER But this doctrine has been overruled by a decision of the highest authority (0).

But if a bill or note is taken, and, remaining in the vendor's hands, is dishonoured, the goods not being delivered, it should seem that the lien revives (p).

On the sale of real property the taking and negotiating But not on a note or bill by the vendor does not amount to a relin- real property. quishment of his lien (q) on the land (r) for the unpaid


A bill, cheque, or promissory note was earnest, or part Is earnest. payment, within the seventeenth section of the Statute

of Frauds, so as to obviate the necessity of a written

contract (s).

A covenant to pay in promissory notes implies and includes a covenant to pay the notes when due (t). An unstamped bill or cheque is not payment (u).

(n) Bunney v. Poyntz, 4 B. & Ad. 568; 1 N. & M. 229; 38 R. R. 309.

(0) Gunn v. Bolckow, Vaughan, & Co., L. R., 10 Chan. Ap. 490, where it was held that a vendor's lien was only conditionally discharged by taking vendee's acceptances, and was capable of reviving on their dishonour, even though they had been negotiated.

(p) New v. Swain, 1 Dans. & L. 193; 34 R. R. 767; Valpy v. Oakley, 16 Q. B. 941. Sale of Goods Act, s. 38 (1) b.

(g) Ex parte Loring, 1 Rose, 19: Grant v. Mills, 2 V. & B. 306; 13 R. R. 101. See Macreth v. Simmons, 15 Ves. 329; 10 R. R. 85. See as to the effect of taking a void cheque, Bond v. Warden, 14 L. J., Chan. 154; 1 Coll. 583.

As to the circumstances under which the transfer of a bill is payment in bankruptcy, see the Chapter on BANKRUPTCY.

(s) Now Sale of Goods Act [1893], s. 4. If duly stamped, see Stamp Act [1891], s. 14 (4), and the analogous case of Jones v. Ryder, 4 M. & W. 32, under the Statute of Limitations.

(t) Dixon v. Holroyd, 27 L. J., Q. B. 43; 7 E. & B. 903.

(u) Cundy v. Marriott, 1 B. & Ad. 696; 35 R. R. 416; Bond v. Warden, 14 L. J., Ch. 154; 1 Col. 583. But now, in case of a bill payable on demand, the stamp may be subsequently affixed by the drawee, Stamp Act, [1891] s. 38 (2); and the bill or cheque is good, though the penalties are incurred.


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Requisites in Form

Interpretation of Contracts 383

Duties of Holder

Foreign Acceptance

Foreign Note.

Foreign Indorsement of

Foreign Discharge



Statute of Frauds

Protest and Notice of Dis


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SOMETIMES bills drawn in England are payable in a foreign country, and bills drawn in a foreign country are payable in England. Sometimes English bills circulate abroad, and foreign bills circulate here: and, frequently, suits on RELATING TO foreign bills, or bills negotiated abroad, are brought in English Courts of Justice. The laws of foreign countries, as to bills of exchange, often differ widely from the law of England, and from each other. But natural justice, mutual convenience, and the practice of all civilized nations, require that contracts, wherever enforced, should be regulated and interpreted according to the laws with reference to which they were made, otherwise the rights and liabilities of parties would entirely depend on the law of the country


where the remedy might happen to be sought. Such a CHAPTER state of things would introduce uncertainty and confusion infinitely greater than arises from that measure of respect and comity, which every tribunal now shows to the law of foreign nations.

In determining how far foreign laws are to regulate Elements in foreign contracts in English Courts, a great variety of the question. circumstances are often necessary to be considered. It may be essential to regard the domicil of one, or both, or all, of the contracting parties, the place where the contract is made (which place it may not always be easy to determine, for the parties may live in different countries), the place where the contract is to be performed, the place where the subject-matter of the contract is locally situate, and the place where the remedy is sought.

Many nice questions, therefore, have already arisen, and many more will, no doubt, in future arise in our Courts, from the conflict of English with foreign law, as to bills of exchange.

in the

The decisions of English Courts of justice on the inter- Discrepancy national law of contracts have not been very numerous, but doctrine of nothing can exceed the discrepancy and irreconcilable conforeign trariety of the doctrines and opinions of foreign writers, not writers. only on the application of the principles of international law to foreign contracts, but on the very principles themselves (a). To enter into the discussion of such topics would be foreign to the object and exceed the limits of this little book.


But in the dearth of authoritative decisions, on the degree General to which foreign law is admissible here to govern the con- principles tracts arising on bills or notes made, negotiated, or payable laid down in abroad, it may not be altogether useless, with a view, as well to the right understanding of such decisions as have already been pronounced, as to the solution of such undecided questions on the same subjects as may hereafter arise, first to enumerate some of the general principles which seem to have guided the English Courts in determining the circumstances, and the degree in which they will respect foreign laws, in interpreting contracts either altogether or partially foreign, and then to adduce instances illustrating the application of those principles to the Laws of Bills of Exchange.

(a) See Story's Conflict of Laws.

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