tinct; and according as the action on a bill is brought against this or that party to it, so will the form of declaration in an action framed upon the idea of an undertaking by him necessarily vary. And whatsoever proceedings upon the bill be taken it must be borne in mind that the receipt of a bill of exchange in respect of a debt does not extinguish the debt, it merely postpones the period of payment; and if for some reason or other the remedy upon the bill, when arrived at maturity, fail, a remedy still remains in respect of the original consideration for the bill.

The conditions precedent to enforcing payment of a dishonoured bill as against any party to it intermediate between the holder and the acceptor (who is absolutely liable upon it) are presentment and notice of Conditions precedent to enforc- dishonour. ing payment.

Payment of the bill, when refused, must be demanded of the drawer as soon as conveniently may be: for though, when one draws a bill of exchange, he subjects himself to payment of it, if the person on whom it is drawn refuses either to accept or pay it, yet this is subject to a condition that if the bill be not paid when due, the person to whom it is payable, [* 190] or the holder, shall in convenient time give the drawer notice thereof; for, otherwise, the law will imply it paid: since it would be prejudicial to commerce, if a bill might rise up to charge the drawer at any distance of time; when meanwhile all reckonings and accounts might have been adjusted between the drawer and the drawee.

If the bill be an indorsed bill, and the indorsee cannot get the drawee to discharge it, he may call upon either the drawer, or the indorser, or, if the bill has been negotiated through many hands, upon any of the indorsers; for each indorser is in the nature of a new drawer, and is a warrantor for the payment of the bill, which is frequently taken in payment as much upon the credit of the indorser as of the drawer. And if such indorser, so called upon, has the name or names of one or more indorsers prior to his own, to each of whom he is properly an indorsee, he is also at liberty to call upon any of them to make him satisfaction; and so upwards. But the first indorser of a dishonoured bill has nobody to resort to but the drawer.

The bill must be presented for payment in due time, that is, on the last of the three days of grace, to the acceptor, if the acceptance be general (t), or at the place named upon the bill if the acceptance be qualified. (529)

(t) A bill accepted payable generally at a at the banker's. Halstead v. Skelton, 5 Q. B. particular banker's may be presented for 92.

payment either to the acceptor personally, or

(529) Presentment should be made at a reasonable time of the day. If the maker or acceptor be a banker, demand should be made during banking hours, unless a person be left at the bank to give answer after the close of the regular hours of business. Bank of Utica v. Smith, 18 Johns. 230. Business hours, in respect to the time of presentment of paper not payable at a bank, generally range through the whole day, down to the hours of rest in the evening. Cayuga County Bank v. Hunt, 2 Hill, 635. See Lunt v. Adams, 17 Me. 230; Farnsworth v. Allen, 4 Gray (Mass.), 453.

If the maker or acceptor, at the time he executes the paper, resides in a different State from that of the payee or drawer, the paper must be sent thither for presentment. Taylor v. Snyder, 3 Denio, 145; Adams v. Leland, 30 N. Y. (3 Tiff.) 309; Foster v. Julien, 24 N. Y. (10 Smith) 28. But if at such time the parties reside in the same State, and the maker or acceptor subsequently remove into another State, the holder is not bound to send the paper to him for payment. Id.; 2 Story on Cont., § 1182.

Presentment.

Presentment for payment must be made at the maturity of the bill. It is a well-known rule that where a creditor gives time to his principal debtor, there being a surety to secure payment of the debt, and does so without consent of, or communication with, such surety, the surety is discharged, because he is thus placed in a new situation, and exposed to a risk and contingency to which he would not otherwise, and according to the terms of his undertaking, have been liable (u); and although it is quite competent to [*191] *a man to give up or renounce a right appertaining to himself alone, he cannot renounce on behalf of another a right which belongs to him; at least, should he assume to do so, our law will protect that other from being prejudiced by the act, and will, perhaps, place him in a position more favourable than that which he had before occupied, and exonerate him from liabilities which had before attached to him. In accordance with the above principle, and on general grounds of expediency, our law will not permit the responsibility of any party to a negotiable instrument intermediate between the holder and the person primarily liable upon it to be prejudiced by any secret understanding between those two persons. If this rule were relaxed, traders would be reluctant to put their names to negotiable paper. The proposition therefore was long since established (v) that the holder of a bill of exchange, by giving time to the acceptor, discharges the other parties to it, for the acceptor of a bill is the party principally, and in the first place, liable upon it; the other parties, whose names appear on the instrument as making, drawing, or indorsing it are, in legal contemplation, sureties only (x); and, as above intimated, any private agreement between a creditor and his principal for a variation in the terms of their contract is viewed as a fraud upon the surety, who is accordingly, ipso facto, discharged and exonerated from the collateral or contingent liability which he had assumed.

Notice of dishonour.

The rule ordinarily applicable is that, in order to charge the drawer of a bill, due notice of dishonour must be given him, the want of notice of dishonour being, indeed, tantamount to payment by him, for the law presumes, regard being had to the usual course of commercial dealing, that the bill is drawn on account of effects of the party who drew it being in the hands of the person upon * whom it is drawn, and who [* 192] accepts the bill. If the drawer has notice that the bill is not paid (or not accepted, for the rule applies also to that state of things), he may then at once withdraw his effects from the hands of him upon whom the bill was drawn, and so may possibly protect himself by getting back the consideration for the bill. If, however, the party last named had at the time of drawing the bill no effects in the hands of the drawee, the reason of the rule requiring notice of dishonour fails, and no notice of dishonour need be given him (y).

The notice of dishonour must expressly or by reasonable intendment convey information that the bill has been dishonoured, and demand payment of it (z),

(u) Per Lord Lyndhurst, Oakley v. Pashel ler, 4 Cl. & F. 233.

(v) Tindal v. Brown, 1 T. R. 167. (x) To whom, therefore, the stat. 19 & 20 Vict. c. 97, s. 5, applies.

(y) Bickerdale v. Bollman, 1 T. R. 485, where Buller, J., says-the party drawing the bill "must know whether he had effects

in the hands of the drawee or not, and if he had none, he had no right to draw upon him and to expect payment from him, nor can he be injured by the non-payment of the bill, or the want of notice that it has been dishon oured." Carter v. Flower, 16 M. & W. 748.

(z) Solarte v. Palmer, 2 Cl. & F. 93; Lewis v. Gompertz, 6 M. & W. 402, 3.

and although no period can be named within which, under all circumstances, it should be given, the rule upon this point has during the last century become tolerably definite, the question what is reasonable notice having been held to be one of law, regard being had however to the particular facts of the case (a). Whether the post goes out this or that day, at what time, and so forth, are matters of fact; but where the facts pertinent to the matter agitated are established, it becomes a question of law upon these facts what notice may be reasonable and sufficient. The rule now established as regards the time for giving notice is that the party sought to be charged upon the bill is entitled to "prompt notice" of its dishonour by the acceptor. Where the parties live in the same town the notice should be given in time to be received in the course of the day next after the dishonour of the bill, or after the party giving the *notice had himself received notice of dishonour. There must be [* 193] due diligence: not that the party is bound to neglect all other business and the moment he receives notice send a notice to those he means to charge. He has a whole day, and so much more as will enable him, using due diligence, to communicate the notice to the party sought to be charged. If there are many indorsers, and the notice in fact travels through them all — if there has been no want of diligence between any two of them — whatever time is occupied the notice will be good. The rule is not imperative that each indorser has a day, but rather that due diligence shall be observed (b). (530)

for bill.

It is an elementary rule that, to support a simple contract, some sort of consideration is essential, a mere voluntary courtesy will not uphold an Consideration assumpsit (c). The rule applies generally to simple contracts. There is, however, this peculiarity about a bill of exchange that the consideration for the promise evidenced by it will, in the first instance, be presumed. As between the immediate parties to a bill of exchange the onus lies on the defendant of showing-by an apt plea and by apt evidence that he transferred it to the holder without consideration, and that therefore he cannot at suit of the plaintiff be made liable upon the bill. The drawer of an accommodation bill cannot successfully sue the acceptor upon it, and is even liable to be called on to indemnify him if compelled to take up the bill (d). (531) As between parties to a bill of exchange not immediate, the rule is settled that if the defendant in an action upon the bill adduces evidence of fraud connected with its inception, or with its original transfer, the onus is thus cast upon the plaintiff of proving that he is a holder of the bill for value. Indeed the presumption in favour of the holder of a bill can only be * in the [*194] case of a genuine instrument. If once a bill is shown to be tainted

(a) Blesard v. Hirst, 6 Burr. 2670; Tindal Aspinall, Doug. 654; Heylin v. Adamson, 2 v. Brown, 1 T. R. 167.

(b) Tipper v. Rowe, 13 C. B. 249.

Generally, as to the necessity of presentment and notice of dishonour, see Rushton v.

Burr. 669.

(c) Ante, p. 157.
(d) Beech v. Jones, 5 C. B. 696.

(530) See, on this subject, Lawson v. Farmers' Bank, 1 Ohio St. 206; Haskell v. Boardman, 8 Allen (Mass.), 38; Stephenson v. Dickson, 24 Penn. St. 148; Manchester Bank v. Fellows, 28 N. H. 302; 1 Wait's Law & Pr. 453; 3 Kent's Com. 106; Redfield & Bigelow's L. C. 390, note.

(531) As it regards a consideration the only difference between the case of a bill or note and any other contract, as to the immediate parties, is, that the burden of proof is shifted, and it is incumbent upon the defendant to show the want of consideration or its illegality. See 1 Wait's Law & Pr. 437; Clark v. Sisson, 22 N. Y. (8 Smith) 312; S. C., 5 Duer, 408.

with illegality or fraud, the presumption of bona fides, which ordinarily arises from the indorsement ceases, and a fortiori if the instrument is proved to have been forged (e). (532)

Negotiable instruments form an important part of the currency of the country, and are therefore subjected to the operation of a fundamental rule applicable to money. If such an instrument be transferred in good faith for value before it is overdue, it becomes available in the hands of the holder, notwithstanding fraud which would have rendered it unavailable in the hands of a previous holder; (533) though if a bill of exchange be payable to order, the holder of the bill must perfect his title to it by indorsement in order that he may not be affected by notice of a fraud tainting the instrument perpetrated before it came to his hands. Upon the maxim, nemo plus juris ad alium transferre potest quam ipse habet, which comes to us from the Roman law (ƒ), has thus been engrafted an exception with a view to facilitating commercial dealings, and for promoting confidence amongst traders in the paper which they circulate. But the operation of this exception has likewise, with a view to the maintenance of good faith and the suppression of fraud, been, in accordance with equitable principles, limited and restrained (g).

Procedure

on bill.

As a general rule no one whose name does not appear upon a bill of exchange can be sued on it, and no one except the holder can sue upon it (h). The holder moreover * of such a negotiable instrument suing [* 195] upon it may be called on by an apt plea to produce it at the trial. This tends to prevent fraud, and to protect a defendant, who obviously ought not to be in peril of paying the bill twice over. It is also in conformity with the practice of merchants having reference to the payment of the instrument in ordinary course. By the custom of traders the holder of a bill of exchange should (as already stated (i) ), present it at maturity to the acceptor, demand payment of its amount, and upon receipt of the money deliver up the bill; the acceptor, upon paying the bill, having a right to its possession for his own security, and as his voucher and discharge pro tanto in the account between himself and the party who drew upon him (k).

(e) Mather v. Lord Maidstone, 1 C. B. N. S. 273.

(f) Dig. 50, 17, 54.

(g) Whistler v. Forster, 14 C. B. N. S. 248. The unauthorized alteration of a bill of exchange, if material (Aldous v. Cornwell, L. R. 3 Q. B. 573), though made by a stranger, Master v. Miller, 4 T. R. 320; 2 H. Bla. 140; Hirschfeld v. Smith, L. R. 1 C. P. 340.

will vitiate it.

(h) The holder of a bill may bring actions against the acceptor, drawer, and all the indorsers at the same time; but though he may obtain judgments in all the actions, yet he can recover but one satisfaction for the value of the bill. See also 18 & 19 Viet. c. 67, s. 6. (i) Ante, p. 190.

(k) Judgm. Hansard v. Robinson, 7 B. & C. 90, 94.

(532) See the following American cases in illustration of the doctrine in the text: Clark v. Pease, 41 N. H. 414; Perrin v. Noyes, 39 Me. 384; Farmers & Citizens' Bank v. Noxon, 45 N. Y. (6 Hand) 762; Bertrand v. Barkman, 13 Ark. 150; Hutchinson v. Boggs, 28 Penn. St. 294; Sloan v. Union B. Co., 67 id. 470; Woodman v. Churchill, 52 Me. 58; Spitler v. James, 32 Ind. 202; Burson v. Huntington, 21 Mich. 415; Roberts v. Hall, 37 Conn. 205; Wilson v. Lazier, 11 Gratt. (Va.) 477.

(533) In a recent American case, in which the authorities, English and American, are carefully considered, the rule is stated to be, that one who purchases negotiable paper before due for a valuable consideration, in good faith, and without actual knowledge or notice of any defect of title, holds it by a title valid as against every other person. Seybel v. National Currency Bank, 54 N. Y. (9 Sick.) 288; affirming S. C., 4 Abb. N. S. 352; 2 Daly, 383. And see Phelan v. Moss, 67 Penn. St. 59; Spooner v. Holmes, 102 Mass. 503; Gould v. Stevens, 43 Vt. 125.

The rule above stated was in its policy sound, as perhaps might be said of almost every rule adopted into the practice of merchants, originating in necessity and tested by long experience. Nevertheless the particular rule adverted to might occasionally, if not relaxed, be productive of hardship—perhaps might work positive injustice. The holder of a bill of large amount losing it through the negligence of a clerk or other agent, in the absence of personal default, might be without remedy upon it. Therefore the legislature interposed, and by section 87 of the second Common Law Procedure Act (17 & 18 Vict. c. 125), enacted that in case of any action founded upon a bill of exchange or other negotiable instrument, it shall be lawful for the court, or a judge, to order that the loss of such instrument shall not be set up, provided a satisfactory indemnity be given against the claims of any other person upon such instrument. (534)

The procedure upon a bill or note has also been simplified and amended by the under-mentioned statute (7).

An inland bill of exchange is drawn and payable here, or drawn [*196] in one part and payable in any other part of the British Islands (m). A bill drawn or payable elsewhere is (except for stamp purForeign bill. poses (n)) a foreign bill (o). Such a bill is usually drawn in parts which circulate together, at one or more usances," the "usance" being the period for payment customary as between the places at which respectively the bills is drawn and made payable. (535)

66

The acceptance of a foreign bill of exchange in this country might formerly have been written or oral, or evidenced by the conduct of the acceptor (p); now, however, no acceptance of a foreign bill of exchange will suffice to charge any person unless it be in writing on such bill, or on one part of such bill, and be signed by the acceptor, or some person duly authorised by him (q). Payment of any part of a foreign bill is conditional on the other parts of like tenor and date as itself remaining unpaid at maturity; and if default be made in payment, the bill must be protested by a notary before proceedings can be taken upon it. If acceptance of such bill be refused, it may be accepted

(7) 18 & 19 Vict. c. 67, which provides that a writ of summons in a special form may, within six months after a bill of exchange or promissory note has become due and payable, be issued, and to this writ an appearance within twelve days from the date of service, can only be entered by leave of a judge on disclosing good grounds of defense, or on payment into court of the sum indorsed on the writ. On an affidavit of service, or leave given to proceed, final judgment may, in case of the defendant's non-appearance, be signed, and execution may be had thereupon. Leave to appear to the writ may, however, under special circumstances, be given, even after

judgment, execution in this case being either stayed or set aside.

See Agra Bank v. Leighton, L. R. 2 Ex. 56. (m) Great Britain, Ireland, Man, Guernsey, Jersey, Alderney, and Sark. 19 & 20 Vict. c. 97, s. 7.

(n) Griffin v. Weatherby, L. R. 3 Q. B. 753. (0) As to the stamp thereon, see 17 & 18 Vict. c. 83, s. 5. (Pooley v. Brown, 11 C. B. N. S. 566.) 27 & 28 Vict. c. 56, s. 2.

(p) Clarke v. Cock, 4 East, 57; Wynne v. Raikes, 5 id. 514; Harvey v. Martin, cited 1 Camp. 425; Judgm. Jeune v. Ward, 1 B. & Ald. 653, 657.

(g) 19 & 20 Vict. c. 97, s. 6, operative from Dec. 31, 1856.

(534) Provision has been made by statute in some of the States of the Union for a recov ery upon negotiable instruments which are lost. See, as to New York, 2 R. S. 406, § 75. To entitle a party to recover on a lost instrument the proof of the genuineness of the original must be positive. Slone v. Thomas, 12 Penn. St. 209.

(535) See 1 Wait's Law & Pr. 401; Wells v. Whitehead, 15 Wend. 527.

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