Art. 100. A bill may be seized in execution by the Execution. sheriff under a writ of fieri facias.1 Explanation.-Payment to the sheriff of a bill so seized is valid, and, if the judgment-creditor give security, an action may be brought on the bill in the name of the sheriff.2 3 NOTE. The language of the Act is obscure and ungrammatical. Can the sheriff hand over to the creditor or sell a bill payable to bearer? The Act gives him no power to indorse a bill payable to order. Further, he is responsible to the judgment debtor for any surplus over the amount of the debt and costs. It would seem then that he must keep all bills and endeavour to collect them himself. ruptcy. Art. 101. If the holder of a bill, who is the beneficial Bankowner of it, become bankrupt, or if a bill be made payable to a bankrupt for his own account, the title thereto vests in his trustee in bankruptcy.* NOTE.-The title of the trustee relates back to the commencement of the bankruptcy. It is sometimes a difficult question to determine the exact time when a bankruptcy commences, but this is a question beyond the scope of a treatise on bills. When the holder has merely a lien on a bill his trustee stands exactly in his shoes, having the same rights and duties in regard to it." Explanation.-Subject to Art. 102, if the holder of a bill is not the beneficial owner of it, the title thereto does not pass to his trustee in bankruptcy." ILLUSTRATIONS. 1. C. indorses a bill to D., his agent, for some special purpose. D. becomes bankrupt. The title to the bill does not vest in D.'s trustee.' 1 1 & 2 Vict. c. 110, § 12. As to a cheque drawn by the AccountantGeneral of the Court of Chancery but not issued: Cf. Watts v. Jefferies (1851), 3 Mac. & G. 422; Courtoy v. Vincent (1852), 21 L. J. Ch. 291. 2 1 & 2 Vict. c. 110, § 12. 3 Cf. Mutton v. Young (1847), 4 C. B. at 373. 4 Cf. Bankruptcy Act, 1869. 32 & 33 Vict. c. 71, § 15, cl. 3; Cf. Green v. Steer (1841), 1 Q. B. 707. 5 Cf. Ex parte Buchanan (1812), 1 Rose 280. 6 Bankruptcy Act, 1869, § 15, cl. 1. 7 Ex parte Armistead (1828), 2 G. & J. 371; Cf. Belcher v. Campbell (1845) 8 Q. B. at 11. E Bank. ruptcy. Reputed ownership 2. D. by fraud induces C. to indorse a bill to him. D. becomes bankrupt. The title to the bill not pass to D.'s trustee: Exception 1.-The bankrupt holder of a bill who negotiates it before the date of the order of adjudication can give a good title to a person who takes it in good faith for value, and without notice that such holder has committed an act of bankruptcy available for adjudication.1 Exception 2.-Payment of a bill to a bankrupt holder is valid if made before the date of the order of adjudication in good faith, and without notice that he has committed an act of bankruptcy available for adjudication.* Exception 3.-An accommodation bill given for the accommodation of the bankrupt (probably) does not pass to the trustee in bankruptcy. ILLUSTRATIONS. A. draws a bill on B. payable to his own order. B. accepts it to accommodate A. A. is adjudicated bankrupt. He subsequently indorses the bill to C., who gives value. The indorsement is valid. C. can sue B.3 NOTE. The terms of the present Act are very wide, see § 15, cl. 2, but the cases quoted probably still hold good. Art. 102. If the holder of a bill, who is not the beneficial owner of it, become bankrupt, the title thereto passes to his trustee in bankruptcy, as being in his reputed ownership, provided-(a) that such holder be a trader; (b) that the bill constitutes "a debt due to him in the course of his trade or business;" (c) that he held it at the commencement of 3 Wallace v. Hardacre (1807), 1 Camp. 45; Willis v. Freeman (1810), 12 East. 656. the bankruptcy with the consent and permission of Reputed the true owner.1 NOTE. The provisions of the present Act, quoted above, are new, and no case on a bill has as yet arisen under them. It seems that a current bill would constitute a "debt due" within the meaning of the Act. Transfer by Assignment. ownership. ment or Art. 103. A bill may be transferred by assignment Assignor sale, subject to the same conditions that would sale. be requisite in the case of an ordinary chose in action. ILLUSTRATIONS. C. is the holder of a note payable to his order. He may transfer his title to D. by a separate writing assigning the note to D.;3 or by a voluntary deed constituting a declaration of trust in favour of D., or by a written contract of sale." NOTE.-A bill is a chattel, therefore it may be sold as a chattel. A bill is a chose in action; therefore it may be assigned as a chose in action. It is clear that a subsequent title under the law merchant would override a prior title under a sale or assignment according to the general law, e.g., C. the holder of a bill payable to bearer, assigns by deed certain property, including the bill, to D. C. no longer has any property in the bill, but he holds it, and if he transfer it by delivery to E., who takes it for value and without notice, E.'s title overrides D.'s." order Art. 104. If the holder of a bill payable to order Bills to transfers it for value without indorsing it, the transac- transferred tion operates as an equitable assignment of the bill.7 without The transferee also acquires the right to compel ment. indorsement.8 1 32 & 33 Vict. c. 71, § 15, cl. 5. 2 Ex parte Kemp (1874), 9 L. R. Ch. at 388, Mellish, L. J.; as to the previous law, Cf. Hornblower v. Proud (1819), 2 B. & Ald. 327 ; Thompson v. Giles (1824), 2 B. & C. 422. 3 Re Barrington (1804), 2 Scho. & Lef. 112. 4 Richardson v. Richardson (1867), 3 L. R. Eq. 686; Cf. Byles, p. 148 n. 5 Sheldon v. Parker (1874), 3 Hun. New York, R. 498. 6 Cf. Sheldon v. Parker, supra; Aulton v. Atkins (1856), 18 C. B. 249. 7 Whistler v. Forster (1863), 14 C. B. N. S. at 258, Willes, J. 8 Harrop v. Fisher (1861), 10 C. B. N. S. at 203, Byles, J. indorse Bills to order transferred without indorsement. ILLUSTRATIONS. 1. C. the holder of a bill payable to order transfers it to D. for value without indorsing it. D. cannot sue the acceptor in his own name, or negotiate the bill by indorsing it to E.1 1 2. A draws a bill on B. payable to his own order. B. accepts. A. discounts the bill with C., but by mistake or fraud omits to indorse it. C. indorses the bill in blank in A.'s name, and sues B. C. cannot recover; he had no right to indorse the bill." 3. C. the holder of a bill payable to order transfers it for value to D. without indorsing it. If C. becomes bankrupt, the Court will compel his trustee in bankruptcy to indorse the bill. If C. dies, the Court will compel his executor or administrator to indorse.* 4. C., the holder of a bill for 1000l. payable to his order, deposits it with D. as security for a debt of 3007. C. becomes bankrupt. The Court will order C.'s trustee to indorse the bill to D. upon terms.5 Explanation.—When indorsement is subsequently obtained, the transfer takes effect as a negotiation (Art. 106) from the time when the indorsement is given. ILLUSTRATIONS. 1. A. draws a bill on B. payable to C. or order. A. is induced to do so by C.'s fraud. C. transfers the bill to D. for value, but does not indorse it. D. subsequently receives notice of the fraud practised on A. After this he obtains C.'s indorsement. D. cannot recover from A.-he has no better title than C. Aliter if he had obtained C.'s indorsement before he had notice of the fraud." 2. B. makes a note payable to C. or order. C. transfers it to D. for value without indorsing it. After the note is overdue D. 1 Harrop v. Fisher (1861), 10 C. B. N. S. at 203, Byles, J.; and Cunliffe v. Whitehead (1837), 3 Bing. N. C. at 830. 2 Harrop v. Fisher (1861), 10 C. B. N. S. 196. 3 Ex parte Mowbray (1820), 1 Jac. & W. 428. Indorsement should negative personal liability: Cf. Art. 76. Indorsement by bankrupt is, it seems, equally good: Ex parte Rhodes (1837), 3 Mont. & Ayr. 217. 4 Cf. Watkins v. Maule (1820), 2 Jac. & W. 237. Ex parte Price (1844), 3 Mon. D. D. 586; but cf. Ex parte Brown (1824), 1 Gl. & J. 407, where a different order was made. 6 Whistler v. Forster (1863), 14 C. B. N. S. 248; Lancaster Bank v. Taylor (1869), 1 Amer. R. 71. obtains C.'s indorsement. D. holds the note subject to all equities Bills to between B. and C.1 order, &c. mortis Art 105. If the holder (Art. 3) of a bill make Donatio delivery of it by way of gift in contemplation of causá. death and die, this is a valid donatio mortis causâ. ILLUSTRATIONS. 1. C. the holder of a note payable to bearer, hands it to D. in contemplation of death. C. dies. The property in the note passes to D.2 2. C., the holder of a bill payable to his order, gives it to D. in contemplation of death and dies. The title to the note passes to D.3 3. B. makes a note payable to C., and hands it to him as a gift in contemplation of death. B. dies. C. (probably) is not entitled to receive the amount out of B.'s estate.* NOTE. It is clear that the gift of a bill or note does not create a debt as against the donor, cf. Art. 91; but is this the principle of a donatio mortis causâ? The law as to the gift of bills and notes made by the donor requires re-consideration. The recent cases have arisen on cheques where the peculiar relations of banker and customer complicate the matter, see Art. 262. Transfer by Negotiation. tion Art. 106. "Negotiation" means the transfer of a Negotiabill in the form and manner prescribed by the law defined. merchant with the incidents and privileges annexed thereby, i.e. (1.) The transferee can sue all parties to the instrument in his own name. (2.) The consideration for the transfer is primá facie presumed. 1 Clark v. Whitaker (1871), 9 Amer. R. 286. 2 Miller v. Miller (1735), 3 P. Wms. 356. 3 Veal v. Veal (1859), 27 Beav. 303. Qu. Must D. sue on the bill in the name of C.'s executor, or can he compel an indorsement? 4 Tate v. Hilbert (1793), 4 Bro. C. C. 286; Holliday v. Atkinson (1826), 5 B. & C. at 503. 5 Cf. Williams on Executors, 7 Ed. 778-780. |