have the original when wanted. E. commences an action against the acceptor, and after action brought he gets the bill. E. cannot maintain this action, for at the time he began it he had neither the actual nor the constructive possession of the bill.1 7. A note payable to bearer is handed to the solicitor of a loan society in payment of a debt due to the society. D., a member of the society, instructs the solicitor to commence an action on it in his (D.'s) name against the maker. D. can maintain this action.2 § 38. Rule 4. When a party to a bill becomes bankrupt, the Holder's holder, who could have maintained an action against such right of party if he had remained solvent, can prove against his proof. estate in bankruptcy.3 Any defence, set-off, or counter-claim available in an action is available against a proof.4 In one respect the right of proof is more extensive than the right of action. An action can only be brought to recover a debt which is due, but under Bankruptcy Act, 1883, § 37, a future or contingent debt may be proved; therefore, if the acceptor of a bill not yet due becomes bankrupt, the holder may prove, and so might the drawer or an indorser-so, too, the holder of an accepted bill may prove if the drawer or an indorser becomes bankrupt.6 But as regards amount, the right to prove is narrower than the right to sue. The amount for which a holder can prove is limited by rules peculiar to bankruptcy, such as the rules relating to double proof and creditors holding security. These it is beyond the scope of the present work to discuss. Transmission by Act of Law. The Act deals only with transfer by negotiation, that is, transfer according to the law merchant. It leaves un 1 Emmett v. Tottenham (1853), 8 Exch. 884; cf. Olcott v. Rathbone (1830), 5 Wend. 490, New York. 2 Jenkins v. Tongue (1860), 29 L. J. Ex. 147. 3 Cf. 46 & 47 Vict. c. 52, § 37; cf. Re Charles (1873), L. R. 8 Ch. at p. 537. See e.g. Rohde v. Proctor (1825), 4 B. & C. 517, want of notice of dishonour; Ex parte Manners (1811), 1 Rose, 68, want of a stamp ; cf. Jones v. Gordon (1877), 2 App. Cas. 627, H. L. 5 Cf. Wood v. De Mattos (1865), L. R. 1 Ex. 91, Ex. Ch. 6 Cf. Starey v. Barnes (1806), 7 East, 435. 7 See e.g. Re Douglas (1872), L. R. 7 Ch. 490, foreign bankruptcy; approved Banco de Portugal v. Waddell (1880), 5 App. Cas. at p. 165. See e.g. Re Howe (1871), L. R. 6 Ch. 838, conditional acceptance § 38. Marriage. touched the rules of general law which regulate the transmission of bills by act of law, and their transfer as choses in action or chattels according to the general law; see sect. 97 (2), post, p. 281. The law on these points may, perhaps, be summed up in the following rules: Rule 1. Since the Married Women's Property Act, 1882, a bill payable to a woman, either before or after marriage, no longer vests in her husband. Before that Act, except in the case of a bill forming part of the wife's separate estate, if a bill was held by an unmarried woman who subsequently married, or if a bill was made payable to a married woman, the title thereto vested in the husband, provided he reduced it into possession.2 If the husband died without having reduced the bill into possession, the title thereto reverted to the wife if she was alive, and passed to her personal representatives if she died before her husband.3 During the marriage, the husband was for all purposes deemed to be the holder of a bill payable to the order of his wife, whether it was made payable to her before or after the marriage. When a bill was made payable to the order of a married woman, the husband might sue on it in his own name alone, or if he liked he might join his wife. When a bill was payable to the order of a single woman, who subsequently married, both husband and wife ought to have joined in an action on it; but it was once held that the husband might sue alone.5 1 Green v. Carlill (1877), 4 Ch. D. 882. 2 Cf. Fleet v. Ferrins (1868), L. R. 3 Q. B. at p. 541; affirmed (1869), L. R. 4 Q. B. 500. As to what was or was not a reduction of a bill into possession, cf. Nash v. Nash (1817), 2 Mad. 133; Sherrington v. Yates (1844), 12 M. & W. 855, esp. at p. 865, Ex. Ch.; Hart v. Stephens (1845), 6 Q. B. 937; Scarpellini v. Atcheson (1845), 7 Q. B. at pp. 875, 876; Latourette v. Williams (1847), 1 Barb. 9, New York: Parker v. Lechmere (1879), 12 Ch. D. 256. 3 Hart v. Stephens (1845), 6 Q. B. 937; Williams on Executors, 7th ed. pp. 848-852; cf. M'Neilage v. Holloway (1818), 1 B. & Ald. 218; Connor v. Martin (1721), cited 3 Wils. at p. 5: Roberts v. Place (1846), 18 New Hamp. R. 183; Mason v. Morgan (1834), 4 N. & M. 46; cf. Smith v. Marsack (1848), 6 C. B. 486, at p. 503. 4 Fleet v. Perrins (1868), L. R. 3 Q. B. at p. 541. 5 M'Neilage v. Holloway (1818), 1 B. & Ald. 218; but cf. Sherrington v, Yates (1844), 12 M. & W. at p. 865, Ex. Ch. Rule 2. On the death of the holder of a bill the title thereto passes to his personal representatives (executors or administrators, as the case may be). Thus : 1. C., the holder of a bill payable to order, dies. His administrator can enforce payment of it or indorse it away, using his own name.2 2. C., the holder of a bill payable to order, dies, having specifically bequeathed it to X. X. cannot sue on it or indorse it away, unless he first obtain an indorsement of the bill to him by C.'s executor.3 An executor or administrator who indorses a bill may, in express terms, exclude personal liability: see sect. 31 (5), ante, p. 105; and as he is not the agent of the deceased he cannot by his delivery complete an indorsement written by the latter. He must indorse it de novo: see ante, p. 55. When there are two or more executors, the indorsement of one is probably sufficient to transfer the property in the bill. § 38. Death. Rule 3. A bill may be seized in execution by the sheriff Execution under a writ of fieri facias.* 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.5 The language of the Act, post, p. 334, is obscure and ungrammatical. Can the sheriff hand over to the creditor or sell a bill payable to bearer ?6 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. As to execution against bills and notes under the County Courts Act, 1888, see 51 & 52 Vict. c. 43, §§ 147, 148, set out post, p. 350. Rule 4. If the holder of a bill, who is the beneficial Bankruptcy. owner of it, become bankrupt, or if a bill be made payable 1 Williams on Executors, 7th ed. p. 786. 2 Rawlinson v. Stone (1746), 3 Wils. 1, Ex. Ch. He should specify the capacity in which he indorses to make the title clear. 3 Bishop v. Curtis (1852), 21 L. J. Q. B. 391. 41 & 2 Vict. c. 110, § 12. As to a cheque drawn by the AccountantGeneral of the Court of Chancery but not issued, cf. Watts v. Jefferyes (1851), 3 Mac. & G. 422; Courtoy v. Vincent (1852), 21 L. J. Ch. 291. 51 & 2 Vict. c. 110, s. 12, set out post, p. 334. Cf. Mutton v. Young (1847), 4 C. B. at p. 373. § 38. to a bankrupt for his own account, the title thereto vests in his trustee in bankruptcy; but subject to the next rule (reputed ownership), if the holder of a bill is not the beneficial owner of it, the title thereto does not pass to his trustee in bankruptcy. Thus : 2 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.3 2. D., by fraud, induces C. to indorse a bill to him. D. becomes bankrupt. The title to the bill does not pass to D.'s trustee.* 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.5 Where a bill is indorsed to an undischarged bankrupt, it seems he may sue on it in his own name, unless his trustee interferes and objects. Exception 1.-The bankrupt holder of a bill who negotiates it before the date of the receiving order 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 available act of bankruptcy.7 Exception 2.-Payment of a bill to a bankrupt holder is valid if made before the date of the receiving order in good faith, and without notice that he has committed an available act of bankruptcy.8 Exception 3. An accommodation bill given for the 1 Cf. Bankruptcy Act, 1883, § 44; cf. Green v. Steer (1841), 1 Q. B. 707. 2 Bankruptcy Act, 1883, § 44; cf. Harrison v. Walker (1792), Peake, 111. 3 Ex parte Armitstead (1828), 2 G. & J. 371; cf. Belcher v. Campbell (1845), 8 Q. B. at p. 11. See e.g. Thompson v. Giles (1824), 2 B. & C. 422, bill entered "short" by banker; Ex parte Plitt, Re Brown (1889), 6 Morrell, 81, cheque specially intrusted for collection. Harrison v. Walker (1792), Peake, 111. 5 Cf. Ex parte Buchanan (1812), 1 Rose, 280. 6 Herbert v. Sayer (1844), 5 Q. B. 965; approved, Jameson v. Brick and Stone Co. (1878), 4 Q. B. D. 208, C. A. ; cf. Cohen v. Mitchell (1890), 25 Q. B. D. 262, at p. 269. 7 Bankruptcy Act, 1883, § 49. As to what constitutes such notice, see Ex parte Gilbey (1878), 8 Ch. D. 248, C. A. 8 Bankruptcy Act, 1883, § 49. accommodation of the bankrupt (probably) does not pass to the trustee in bankruptcy. Thus: 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.1 The terms of the present Act are very wide, see § 44; but the cases quoted probably still hold good. § 38. Rule 5. If the holder of a bill, who is not the beneficial Reputed owner of it, become bankrupt, the title thereto may pass to ownership. his trustee in bankruptcy, as being in his reputed ownership, provided-(a) that the bill constitutes " a debt due or growing due to him in the course of his trade or business; (b) that he held it at the commencement of the bankruptcy with the consent and permission of the true owner.2 The provisions of the present Act, quoted above, are new, and no case on a bill has as yet arisen under them. It seems clear that a current bill would constitute a "debt growing due" within the meaning of the Act.3 Transfer by Assignment. Rule 6. A bill may be transferred by assignment or sale, Assignment subject to the same conditions that would be requisite in or sale. the case of an ordinary chose in action. Thus : 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.; or by a voluntary deed constituting a declaration of trust in favour of D., or by a written contract of sale." 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 1 Wallace v. Hardacre (1807), 1 Camp. 45; Willis v. Freeman (1810), 12 East, 656. 2 Bankruptcy Act, 1883, § 44 (2), III.; cf. Ex parte Kemp (1874), L. R. 9 Ch. App. at p. 389. 3 Ex parte Kemp (1874), L. R. 9 Ch. at p. 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. 4 Re Barrington (1804), 2 Scho. & Lef. 112. 5 Richardson v. Richardson (1867), L. R. 3 Eq. 686, as explained in Warriner v. Rogers (1873), L. R. 16 Eq. 340. 6 Sheldon v. Parker (1874), 3 Hun. New York R. 498. C. K |