of foreign bills.

The history, &c. early period of our history, though no earlier decision relative to the custom can be found, than in Jas. 1'. where it was adjudged, that an acceptance raised an assumpsit in law, for the breach of which an action on the case would lie. However, as our courts did not at first conceive it necessary to the encouragement of commerce, that this exception to the rule relative to choses in action, should be carried any further than to Foreign Bills drawn merely for the purposes of trade, we find that formerly they would only give effect to bills made between merchant strangers and English merchants, however, it was soon extended to all traders, and finally, to all persons, whether traders or

not 3.

The history, use, &c. of inland bills of exchange.

INLAND BILLS of EXCHANGE, (which are so called because they are drawn and payable in this country,) according to Lord C. J. Holt's opinion, did not originate at a much earlier period than the reign of Charles the Second. They were at first, like foreign bills, more restricted in their operation than they are at present; for it was deemed essential to their validity, that a special custom for the drawing and accepting them should exist between the towns in which the drawer and acceptor lived; or, if they lived in the same town, that such a custom should exist therein. At first also effect was only given to the custom when the parties were merchants, though afterwards extended, as in the case of Foreign Bills, to all persons,

Martin and Boure, Cro. Jac. 6.-Oaste v. Taylor, Cro. Jac. 306.1 Rol. Abr. 6.—Hussey v. Jacob, Lord Raym. 88.

2 Oaste v. Taylor, Cro. Jac. 306, 7.

3 Per Treby, Ch. J. in Bromwich v. Loyd, 2 Lutw. 1585.-Sarsheld v. Witherly, 2 Vent. 295.-Comb. 45. 152. S. C.-Cramling ton v. Evans, 2 Ventr. 310.

4 Buller v. Crips, 6 Mod. 29.-Anon. Hardr. 485.-Claxton v. Swift, 3 Mod. 86.-Marius. 2.

Buller v. Crips, 6 Mod. 29.-Pinckney v. Hall, Lord Raym. 175. Erskine v. Murray, id. 1542.-Mannin v. Carey, Lutw. 279.-Pearson v. Garrett, 4 Mod. 242.

&c. of inland bills

whether traders or not'. And even after the general The history, use, custom had been established, and it had been adjudged of exchange. that all persons having capacity to contract, might make them, a distinction was taken with respect to form, between bills made payable to order, and bills made payable to bearer; for it was once thought, that no action could be maintained on a bill payable to the order of a certain person, by that person himself, on the ground that he had only an authority to indorse; and those payable to bearer were at first thought not to be negotiable in any case. These distinctions, however, have long been held to be without foundation; and on the whole, as observed by Mr. Justice Blackstone, although formerly Foreign Bills of Exchange were more favourably regarded in the eye of the law than Inland, as being thought of more public concern in the advancement of trade and commerce, yet now, by various judicial decisions, and by two statutes, the 9th and 10th W. 3. c. 17. and the 3d and 4th Anne, c. 9. Inland Bills stand nearly on the same footing as Foreign; and what was the law and custom of merchants with regard to the one, and taken notice of as such, is now by these statutes enacted with regard to the other.

Besides Inland and Foreign Bills of Exchange, there are two other descriptions of negociable instruments for the payment of money, viz. Promissory Notes and Cheques on Bankers, and which are transferrable so as to vest the legal right to receive the money in the holder. Most of the rules applicable to Bills of Exchange, equally affect these instruments; their peculiar. qualities, and the law affecting them in particular will hereafter be separately considered.

$2.

'Bromwich . Loyd, 2 Lutw. 1585,-Sarsfield . Witherly, Carth * Bla. Com, 467.

Sect. 1. Of the capacity of the contracting parties, and who may be parties to a bill.

CHAPTER II.

OF THE PARTIES TO A BILL OF EXCHANGE, &c.

IT is essential to the validity of every contract, that there be proper parties to it, and that those parties have capacity to contract. The parties to a contract are generally only two, namely, the person binding himself to perform some act, and the person in whose favour that act is to be performed: but in the case of bills of exchange, &c. on account of the assignable quality of each, there may be, and usually are, more than two parties. The capacity of the contracting parties, or, in other words, who may be concerned in the transaction, will be considered in the first part of this chapter. The number of the parties, and the mode by which they may become such, will be treated of in the second part.

All persons, if they have capacity to contract, and be not subject to any legal disability, may be parties to a Bill of Exchange'. In general, contracts with alien enemies are void; but where two British subjects detained prisoners in France, one of them drew a bill in favour of the other on a third British subject, resident in England, and such payee indorsed the same in France to an alien enemy, it was held that the alien right of action was only suspended during the war, and that on the return of peace he might recover the amount from the acceptor.

It appears, that in France, ecclesiastics were prohibited from being parties to a Bill of Exchange, or from carrying on commerce in any way, on the principle that such transactions were repugnant to the sanctity of their profession; but in this country although clergymen are prohibited by statute, under

'Therefore a bill drawn in war by an alien enemy abroad, on British subject here, and indorsed during war to a British-born subject, spontaneously resident in the hostile country, cannot be enforced by the latter after peace restored, Willison v. Patteson, 7 Taunt. 439. Antoine. Morshead, 6 Taunt. 237.-1 Marsh. 558. S. C. 3 Poth. Traité de Change, pl. 27.

21 Hen. 8. c. 13.-43 Geo. 3. c, 84. s. 5.

capacity of the ties.

penalties, from trading or farming; yet the act of Sect. 1. Of the being a party to a bill would not constitute a trad- contracting par ing within the statute'; and if it did, as the act is merely prohibitory, the bill itself would be void 2.

It was once thought, that as the only reason why Bills of Exchange were suffered to be assigned by one person to another, was, because they were the means of increasing commerce, and facilitating the ends of it, no person who was not a merchant, or engaged in some trade, could be a party to a bill 3. It has, however, been long settled, that all persons, having capacity and understanding to contract in general, may be parties to these instruments; and as a person does not make himself a merchant, by drawing or accepting a Bill of Exchange, therefore an attorney does not, by accepting a bill, lose his privilege from arrest and to be sued by bills.

'Hankey v. Jones, Cowp. 745. This was a case on an issue to try whether the defendant was a trader within the meaning of the bankrupt laws, and also the validity of the petitioning creditors debt. The defendant, a clergyman, had drawn bills for the purpose of raising money for draining certain lands, &c. belonging to him, and had allowed his banker a commission on paying his bills, also other persons for getting them discounted, and had also borrowed accommodation bills, in lieu of which he gave his own bills and notes to the same amount. The court held, that this was not a trading within the true intent and meaning of the bankrupt laws, and Lord Mansfield, said "this case is merely a drawing by a person for the purpose of improving his own estate, and he pays discount on what he draws, and therefore there is no colour for saying he is within the description of the bankrupt laws."

Ex parte Meymot, 1 Atk. 196. The petitioner applied to supersede a commission of bankrupt taken out against him, on the ground, that being a clergyman, he was not liable to the bankrupt laws, the 21 Hen. 8. c. 13. s. 5. was cited in favour of the petitioner. There was no dispute either as to the trading or act of bankruptcy, Per Lord Chancellor," the statute of 21 Hen. 8. is rather in the nature of a prohibition, and a prohibition will not exempt him from being a bankrupt, for if a man with his eyes open will break the law, that does not make void the contract."

Fairley v. Roch, Lutw. 891.-Bromwich v. Loyd, Lutw. 1585. * Sarsfield v. Witherly, 2 Ventr. 295.-Comb. 152.-Carth. 82. 1 Show. 125. S. C.-Hodges v. Steward, 12 Mod. 36.-1 Salk. 125.S.C. 'Comerford v. Price, Dougl. 312. This was an action by original against defendant who was an attorney, as acceptor of a bill of exchange; defendant pleaded in abatement his privilege to be sued by bill, and the plaintiff demurred generally. The case was argued for the plaintiff. Defendant's counsel was stopped by Lord Mansfield, who said, "This case is extremely clear; a man does not make him

Sect. 1. Of the capacity of the

In general, a corporation can only contract by deed, contracting par under their corporate seal'; but the Bank of England

ties.

Corporations.

have power to issue their promissory notes, and notes and bills have been issued by other companies signed by their agent without objection. A restraint, however, is imposed by the legislature in regard to the mode in which corporations (except the Bank) may draw bills; it having been enacted, That it shall "not be lawful for any body politic or corporate what" soever, or for any other persons whatsoever, united, or to be united in covenants, or partnership exceeding the number of six persons, in England, to borrow, owe, or take up any sum or sums of money, << on their bills, or notes, payable at demand, or at any "less time than six months from the borrowing "thereof, during the continuance of the privilege of "exclusive banking granted to the governor and com

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pany of the Bank of England." But this statute does not preclude the members of a commercial firm, although exceeding six in number, from drawing bills at a shorter date than six months".

self a merchant by drawing or accepting a bill of exchange; if there are no cases, it is because the privilege cannot admit of a doubt."

Slark v. Highgate Archway Company, 5 Taunt. 794.-The King v. the Inhabitants of Chipping Norton, 5 East. 239.-Bac. Ab. Corporations, E. 3.-The King v. Bigg, 3 P. Wms. 432, 4.-Yarborough 7. Bank of England, 16 East. 11.-3 & 4 Anne, c. 9. s. 3.-1 Chitty on Pleading, 3d ed. 102.

215 Geo. 2. c. 13. s. 5.—5 Wm. and Mary, c. 22.-The King v. Bigg, 3 P. Wms. 432, 4.-Bac. Ab. Corporations, E. 3.

Edie v. East India Company, 2 Burr. 1216.-Ryall v. Rolle, 1 Atk. 181.-Watson's Law of Partnership, 1st edit. 53.-Kyd. on Bills, 32.-In Slark v. Highgate Archway Company, 5 Taunt. 792 which was an action of assumpsit upon their promissory note in the common form, and indorsed to the plaintiff, it seems to have been considered, that if a corporation is authorized to raise money on promissory notes for a particular purpose, evidence might be received to impeach the notes by shewing they were issued for another purpose; and the court said, that assumpsit would not lie against a corporation, unless the act which authorized the making of promissory notes eo nomine by such corporation ex vi termini, impliedly empowered the corporation to make a promise.

+6 Ann. c. 22. s. 9.-15 Geo. 2. c. 13. s. 5.

5 Wigan v. Fowler and others, 1 Starkie N. P. C. 459. This was an action against seven defendants co-partners, not bankers, on their promissory note for £1000, payable three months after date. It was objected by the defendants, that the note was illegal, contrary to the above statute. At the trial, a verdict was found for the plaintiff, and upon motion to set it aside, Lord Ellenborough said, this objection, if