But it appears to be contrary to the general rules of inter- S. 57. national law, and to section 72, to hold that this section governs the liabilities and rights of relief of foreign parties. d As to stipulated interest see s. 9 (3). • This provision repeals the clause as to annualrent in the Act, 1681, c. 20.1 As to rate of interest see s. 9, n.b f It has been held that a protest is necessary in the sense of this sub-section when prescribed by the Act, but not when simply permitted, and therefore, that the expense of a protest for better security is not recoverable.2 Debts due between merchants trading in different countries are usually settled, so far as possible, not by money remitted from the one place to the other, but by bills drawn in the one place upon the other. Any sum due from the one place above the amount due from the other must be paid by remitting money, unless credit can be obtained till it is adjusted in the course of trade. For example, if there is a course of trade between two countries, A. and B., debts due by merchants in A. to those in B. are paid by bills drawn by creditors in A. upon their debtors in B., purchased by the debtors in A., and remitted to their creditors in B. When more is due from A. to B. than from B. to A., there will be in A. more debtors in need of drafts on B. than creditors prepared to sell them; and owing to the expense of remitting money or obtaining credit, there will be a competition for drafts on B., which, in consequence, will rise in value. Conversely, in B. there will be more sellers than buyers of drafts on A., so the value of these drafts will fall. Thus, the creditor in A. will get more for his draft than the sum contained in it, while the creditor in B. will get less. The difference between the sum paid and the sum in the bill is called the exchange. In the case supposed the exchange is said to be against A. and in favour of B. Bills on A. are said to be at a discount, and those on B. at a premium. When a bill drawn or indorsed in one country and payable in another is dishonoured, the holder is entitled to 1 P. 247, infra. [1893], 2 Ch. 438; see s. 51 (1, 2 English Bank of the River Plate 2, 5). S. 57. recover from the drawer or indorser the amount of the bill payable at the place of payment, with interest from the date of dishonour, the expenses of protest and notice, and any expenses which he may have incurred for commission, postages, or travelling, in consequence of the dishonour. For this purpose he may draw upon the drawer of the dishonoured bill a new bill, called a re-draft, payable at sight, for a sum which, on his selling it, will yield him what he should have received for the dishonoured bill.1 If in the circumstances above supposed a bill is dishonoured at B., the holder, if he re-drew for the amount of the original bill with interest and expenses, would receive only that sum, less the amount of the exchange, at the current rate. Therefore he is entitled to draw for that amount, with the exchange thereon at the current rate in addition. The whole amount for which he may draw is called the re-exchange,2 and is recognised in international law as the measure of the damages due to the holder by the drawer or indorser of a bill which has been dishonoured in a country other than that in which it has been drawn or indorsed.3 It is now unnecessary and unusual to draw the second bill, but the amount of the damages due in consequence of the dishonour is fixed by what its amount would be.1 If a bill has passed through several countries, each holder may re-draw upon his immediate indorser, and the drawer will be liable for the accumulated re-exchange.5 If at the place of dishonour bills on the place of drawing are at a premium, the holder is apparently entitled to recover the amount of the original bill and expenses less the amount of the exchange. The law or custom of a country may fix the amount due as re-exchange at a fixed percentage on the sum in the bill.6 1 Commercial Bank of South Australia, 1887, 36 Ch. D. 522, 528; Suse v. Pompe, 1860, 8 C.B., N.S. 538, 30 L.J. C.P. 75; Chitty, 438; Thomson, 450; Byles, 444. 2 Suse v. Pompe, cit. 3 Westlake, s. 234; Story on Bills, s. 399 seq.; Kent's Commentaries, iii. 116; Pothier, Contrat de Change, p. 1, cap. 4, s. 64. 4 Suse v. Pompe, cit.; Robarts, 1886, 18 Q.B.D. 286, 293; Chitty, 440; Byles, 444; Thomson, 443. 5 Millish v. Simeon, 1794, 2 H. Bl. 378; Thomson, 444; Byles, 445. 6 See Robarts, cit.; General South American Company, 1877, 7 Ch.D. 637; Francis v. Rucker, 1768, Amb. 671; Commercial Bank of South Australia, cit.; Willans v. Ayres, 1877, 3 A.C. 133; Kent's Comnientaries, iii. 117; Story on Bills, s. 407. Exchange operations are now usually conducted through S. 57. bankers. When a foreign bill is dishonoured in a banker's hands he simply debits his correspondent with the amount and expenses at the current rate of exchange of the day of dishonour, or, as is commonly the practice, at a rate fixed by agreement. The holder of a bill drawn in one country upon another merely for the purpose of raising money, if he is not a holder for value, but one of the parties for whose benefit the bill was concocted, is not entitled to re-exchange.1 a 58. (1.) Where the holder a of a bill payable to S. 58. bearer negotiates it by delivery without indorsing Transferor by it, he is called a "transferor by delivery." (2.) A transferor by delivery is not liable on the instrument.c (3.) A transferor by delivery who negotiates a bill thereby warrants to his immediate transferee, being a holder for value, that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless.e a See s. 2. b See s. 8 (3). But if the bill is not paid, the transferor may be liable to the transferee on the consideration. In the absence of an agreement that the bill is, or is not, to be taken in absolute discharge of the consideration,2 the transferor is liable to the transferee for the amount of the bill, in case it is dishonoured, if he has delivered it in satisfaction of a prior debt, but is not liable, if he has discounted it, or sold it for a price instantly paid.3 When a bill is delivered in exchange for goods, it must be decided, as a question of fact in each case, whether 1 Willans v. Ayers, 1877, 3 A.C. 133. 2 See s. 27, n.o. 3 North British Bank v. Ayrshire Iron Co., 1853, 15 D. 782, per L. P. M'Neill, 787; Blackburne, delivery and transferee. S. 58. the bill was exchanged for the goods absolutely, or was given in conditional satisfaction of the obligation to pay the price. Though it may more readily be inferred that bank notes have been taken in lieu of cash, these rules are applicable to them.2 S. 59. Payment in due course. A transferor by delivery who is liable on the consideration is apparently entitled to notice of dishonour.3 d See s. 27 (2). • A bill, purporting to be drawn in Sierra Leone and accepted in London, was in point of fact both drawn and accepted in London, and, being unstamped, was null under the Stamp Acts. It was held that the transferor for value, though not a party to the fraudulent misdescription, was liable to the plaintiff for the price paid for the bill. The transferor will also be liable if the bill has been forged or materially altered, or if he knows the parties liable on it to be insolvent.5 66 Discharge of Bill. a 59. (1.) A bill is discharged by payment in due course by or on behalf of the drawee or acceptor." Payment in due course means payment made at or after the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective.g e C (2.) Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged; but (a.) Where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not re-issue the bill. 1 Ibid.; see Evans v. Whyle, 1829, 5 Bing. 485. 2 Lichfield Guardians v. Green, 1857, 26 L.J. Ex. 140; Camidge v. Allenby, cit. 3 Smith v. Mercer, 1867, L.R. 3 Ex. 51; Camidge v. Allenby, 1827, 6 B. & C. 373; cf. Van Wart v. Woolley, 1824, 3 B. & C. 439; Byles, 243. 4 Gompertz v. Bartlett, 1853, 23 L.J. Q.B. 65. 5 Thomson, 188; Byles, 191; see 16, n.a (b.) Where a bill is paid by an indorser, or S. 59. paid by the drawer, the party paying it is (3.) Where an accommodation bill is paid in due course by the party accommodated the bill is discharged. a A bill may be discharged in the following ways—(1.) by payment; (2.) by confusion;1 (3.) by renunciation or acceptilation; 2 (4.) by prescription;3 (5.) by compensation ; 4 (6.) by novation or delegation.5 When a bill is renewed it is held in the absence of express agreement not to be novated, unless it is given up. 6 b A promissory note is discharged by payment by the maker. The payee of a promissory note, which was held by him in security of a debt due to him by the maker, received from his debtor a mortgage in further security. He assigned the mortgage, receiving for it the amount of the debt, and then negotiated the note for value. In an action by the indorsee against the maker, it was held that the pursuer was entitled to recover, as the note had not been paid or come under the control of the maker.8 It is to be presumed, till the contrary is proved, that a bill which is in the hands of the acceptor has been paid, and that a bill paid by an agent of the person liable has been paid out of the funds of that person.10 But when a bill is paid by 1 S. 61. 2 Ss. 62 and 63. 3 See s. 100. 4 See 2 Bell's Com. 122; Bell's Prin. 572-5; ss. 2, 36, n.f. 5 Bell's Prin. 576-7. 6 See s. 27, no. 7 S. 89 (2). 8 Glasscock v. Balls, 1889, 24 Q.B.D. 13. 9 Bell's Prin. 566; Edward v. Fyfe, 1823, 2 S. 431, (n.e. 384; see s. 52 (4). 10 Ewing v. Strathmore, 1825, 4 S. 310, (n.e. 313), affd. 1832, 6 W. & S. 56. |