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able to the drawer or his order, the drawer must indorse in order to transfer his interest, and if the bill be payable to C or his order, C must indorse.

The drawer and C would in these cases be called indorsers, and the persons taking from them indorsees.

When no such indorsement is necessary to transfer the interest in the bill, it is said to be payable to bearer; and a person transferring without indorsement is simply called the transferor, and the person who takes from him the transferee.

The holder is, in the words of Mr. Justice Byles, "the person in actual or constructive possession of the bill, and entitled at law to recover its contents from the parties to it."

2. A promissory note is a written promise by A to B, to pay to B, or to B or his order, a specified sum on demand, or at a certain time. The person giving the promise is said to be the maker of the note, and occupies a position resembling that of the acceptor of a bill; and the words transferor and transferee, indorser and indorsee, and holder, are applicable with reference to notes, the same as to bills of exchange.

An ordinary bank note is a banker's promissory note.. 3. Bills of exchange, being intended for the transfer and transmission to third parties of debts due by one man to another, the drawer is supposed to be the creditor of the drawee, who is presumed to have in his hands effects of the drawer which the latter is desirous of transferring.

An ordinary banker's cheque is a bill of exchange payable to bearer on demand.

It is therefore for the drawer to consult his convenience

as to how he shall direct the drawee to pay the money (1), at what time, or (2), at what place, and (3), to whom.

For instance, the bill may be payable (1) at sight, six months after date or after sight; (2), in London, or at Drummond's bank; (3), to the drawer or his order.

Instead of directing the drawee to pay to the drawer or his order, the drawer may make the bill payable to a third person (naming him), or to such person or his order, or to bearer.

If the bill is not payable to the payee's order, it is not negotiable, and is of no use except to the payee. If it is payable to the payee's order, the payee, in order to transfer his right to it, must indorse it, and the person to whom

he gives it will take the money on the bill at maturity, by virtue of the order testified by the indorsement.

If the indorsement be by simply writing the indorser's name, as is usual, the bill is then payable to bearer, and passes by delivery; though at each successive delivery an indorsement is often required for the security of the transferee.

The same rules apply where the bill is payable to the drawer or his order.

If the drawee is directed to pay "to bearer," the bill needs no indorsement to confer a title to the money, though indorsements are often given as the bill changes hands.

Promissory notes may be made payable in the same way as bills, and with the same results.

4. The acceptor is the person who is to be liable to the drawer on a bill, so long as it remains in the drawer's hands, and is always the person primarily liable (a term to be presently explained, see chap. xii); and when the drawer, by indorsement (which is in general necessary), transfers the bill to another, the drawer in his turn becomes liable, with the acceptor, to the holder of the bill, and so does every subsequent indorser, the security thus increasing with each indorsement.

The drawer is also liable upon every unaccepted draft of his which he transfers, for by so doing he makes an implied undertaking that upon presentment to the drawee it shall be accepted.

5. The maker of a note occupies a position similar to that of an acceptor of a bill, being the person primarily liable, and when the note is transferred by indorsement by the payee, the indorser likewise becomes liable to the holder of the note, as does every subsequent indorser. (As to the nature of joint and joint and several notes, 1 see chap. xix, sec. 1.)

As all these parties have different rights and liabilities, it will be convenient to treat those of each one separately; but before doing so it is necessary to make some general observations upon the power which different classes of persons have in law to bind themselves or others by be-coming parties to bills or notes; for it is most important to every one who deals with these instruments to know the real position of those who may be liable to or with him. Persons incurring such liability, whether on behalf of themselves or others, are said, in legal language, to

Contract; and the power to do this will be the subject of the next chapter.



1. Importance of the Subject to those who have dealings with Bills.

2. Disqualification of Infants, Married Women, Insane Persons, Idiots, Persons Drunk.

3. Agents, how appointed.

4. Of authority to an Agent, divided into real (whether express or implied) and presumptive.

5. How to ascertain whether a man is authorized to act as Agent.

6. Of limited and general Agency.

7. Of presumptive Agency, whether limited or general. 8. Authority of general Agent presumed to continue. 9. How Agent can bind Principal, and how bind himself. 10. Rights of Principal and Agent respectively to sue. 11. Of Partnership, and the mutual Agency of Partners. 12. Of the various kinds of Partners, and how they can bind or be bound by one another.

13. Of Dissolution,-how it affects the power of one Partner to bind another.

14. Miscellaneous matters connected with the above subjects.

1. Bills and notes are one kind of contract.

It is easy to decide how a bill or note shall be made payable; but it is far more important to be able to know how far the persons who are to be parties to these instruments are by law capable of contracting, so as to bind themselves or others.

Every one who contemplates dealing with a bill or note should carefully consider whether those who are already, or are about to become, parties to the instrument are capable of binding themselves; or, if they sign as agents for others, whether they are capable of binding those others.

2. I will first mention the disqualifications attaching upon the person of a contracting party in his individual capacity. I say 'upon his person,' because there are certain classes of people who are by law wholly or partially incompetent to contract; and I say 'in his indi

vidual capacity,' because one who cannot bind himself may yet be an agent to bind another.

An infant, i. e. a person under full age, cannot bind himself or herself by a bill or note, unless it be merely for the price of necessaries, and not carrying interest.

Married women cannot bind themselves unless they are carrying on business as sole traders according to the custom of London; or have separate property under "The Married Women's Property Act, 1870;" or have separate property vested in trustees for them, in which latter case the proceedings must be in a court of equity.

Insane persons are under disability to contract only while they are insane, unless they have been declared lunatics under a commission of lunacy, in which case the commission must be superseded before any valid contract can be made with them even during a lucid interval.

Idiots are persons who never have sufficient wits to be of a contracting mind, so that although they may go through an exterior form of contracting, as by making a mark, yet no actual contract can be made with them.

Persons who are drunk, or whose mental faculties are by some accident materially impaired, whether for a long or a short time, are, during such states, incapable of contracting.

But, though infants and married women in general cannot bind themselves, yet they may be agents for others so as to bind those others; and a married woman may be an agent as well for strangers as for her husband. So, indeed, might a lunatic bind people who were foolish enough to employ him.

It may here be observed that if an acceptance be taken from an infant for a debt which he owes, he will, though not bound by the acceptance, be entitled to credit, like any other person, for the time the bill has to run, during which he cannot be sued either on the bill or on the original debt.

3. But to ascertain whether a person is capable of personally binding himself is generally far easier than to discover, in cases where he affects to act as agent, whether he is capable of binding those whom he pretends to represent. This, which at first sight would appear simple, will be found to require careful attention.

It is scarcely necessary to say that where one man appoints another his agent, (which may be by word of mouth as well as by writing, and no particular form is

necessary,) the agent becomes able to bind his principal as to all matters within the scope of his authority. We are not speaking now of contracts under seal, i. e. by deed, to execute which the agent must be appointed by deed, for this work does not treat of any contracts which come under that class.

4. But it is not merely by virtue of an actual authority that one man becomes able to bind another; for A may hold such a position with regard to B, as that without such authority to act as agent, nay, in the face of an express contract not to act as agent, A will be presumed by the law to have authority so to act, and will be capable of binding B in contracts made by all persons who are not aware of the actual arrangement between A and B.

In other words, a man who is not actually an agent, may be an agent to the world, though in so acting he be exceeding his authority, or even be guilty of a breach of contract as between himself and his supposed principal.

Authority, therefore, is divided into real and presumptive; real being where a man has actually or impliedly authorized another to do certain acts; and presumptive being where a man by his conduct holds out another as being authorized to bind him: for whether that other be really authorized or not, the public have under certain circumstances a right to conclude that such authority exists.

In fact, real authority arises from the act of the principal, and presumptive authority from the appearances held out to the world. And both these kinds of authority may be either limited, i. e. as to time, particular acts, or mode of business, or general, i. e. extending to all acts connected with the principal's affairs at all times. If the supposed agent acts without, or exceeds his real authority, and has no presumptive authority, he alone is liable.

5. In case of doubt whether a man has real authority or not, the best course, where practicable, is to ask his principal. Where the alleged authority is in writing, and is shewn to you, you must judge for yourself of its sufficiency, and whether the act which the agent proposes to do is within its scope.

There are many cases where you may be quite sure that a man is agent for another for some purposes, as in the case of clerks, foremen, attorneys, &c. ; but you are not entitled to presume from the situations of those persons that they are capable of binding their employer in bill transac

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