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§ 38.

Donatio mortis causâ.

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. Query, if a non-negotiable note can be assigned, there being an intention manifest on the instrument that it shall not be transferable.?

Rule 7. If the holder of a bill make delivery of it by way of gift in contemplation of death and die, this is a valid donatio mortis causâ. Thus :

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.3

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 bill passes to D.

3. B. makes a note payable to C., and hands it to him as a gift in contemplation of death. B. dies. C. (perhaps) is not entitled to receive the amount out of Bi's estate. 5

4. C., the holder of a banker's deposit note, with a form of cheque on the back, gives it to D. in contemplation of death, and dies. D. is entitled to the money..

It is clear that the gift of a bill or note does not create a debt as against the donor; 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 reconsideration. The recent cases have arisen on cheques where the peculiar relations of banker and customer complicate the matter: see post, p. 250. Query, in Illustration 2, must D. sue on the bill in the name of C.'s executor, or can he compel C.'s executor to indorse the bill to him as he could if he had given value ?

1 Cf. Sheldon v. Parker (1874), 3 Hun. R. 498 ; Aulton v. Atkins (1856), 18 C. B. 249 ; and sect. 31 (4), ante, p. 103.

Cf. Brice v. Bannister (1878), 3 Q. B. D. at pp. 580, 581, per Brett, L. J. 3 Miller v. Miller (1735), 3 P. Wms. 356. + Veal v. Veal (1859), 27 Beav. 303 ; Austin v. Mead (1880), 15 Ch. D.

Clement v. Cheeseman (1884), 27 Ch. D. 631.

Tate v. Hilbert (1793), 4 Bro. C. C. 286 ; Holliday v. Atkinson (1826), 5 B. & C. at p. 503 ; cf. Re Whitaker (1889), 42 Ch. D. 119, at p. 124.

6 Re Dillon (1890), 44 Ch. D. 76—C. A.
7 Cf. Williams on Executors, 7th ed. 778—780.

651 ;

§ 39.

General duties of the Holder. [When a party to a bill is discharged from his liability thereon by reason of the holder's omission to perform his duties as to presentment for acceptance or payment, protest, or notice of dishonour, such party is also discharged from liability on the debt or other consideration for which the bill was given. The holder's omission, without lawful excuse, to perform his duties with reference to a bill, is commonly called “laches." As the Crown can do no wrong, so also it cannot be guilty of laches. The duties in question are not absolute duties; but, throughout the Act, the holder is required to use reasonable diligence in order to fulfil them.]

39. (1) Where a bill is payable after sight,” When prepresentment for acceptance is necessary in order acceptance is

necessary. to fix the maturity of the instrument.

(2) Where a bill expressly stipulates that it shall be presented for acceptance, or where a bill is drawn payable elsewhere than at the residence or place of business of the drawee it must be presented for acceptance before it can be presented for payment.

(3) In no other case is presentment for acceptance necessary in order to render liable any party to the bill.

Sub-section (2) settles a doubtful point. Sub-section (3) is declaratory.S

1 See, e.g., Soward v. Palmer (1818), 8 Taunt. 277 ; Peacock v. Purssell (1863), 32 L. J. C. P. 266, presentment for payment; Bridges v. Berry, (1810), 3 Taunt. 130, and Peacock v. Purssell, supra, as to notice of dishonour ; cf. also, Crowe v. Clay (1854), 9 Exch. 604, lost bill.

? See sect. 40, as to bills payable after sight.

3 Cf. Ramchurn Mullick v. Luchmeechund Radakissen (1854), 9 Moore, P. C. at pp. 65, 66 ; German Exchange Law, Arts. 19 and 24.

8 39. In New York it has been held that where a bill payable

after date was drawn on B. payable at the X. Bank, it was sufficient to present the bill for payment at the X. Bank without making any demand on B. This would not be the case in France; Nouguier, § 1068. By German Exchange Law, Art. 24, when a bill is drawn payable at the house of a third person, the drawer may insert_a stipulation requiring presentment for acceptance. In France it seems the drawer or indorser of any bill may insert such a stipulation : Nouguier, ss 464–469. See also Netherlands Code, Arts. 117 and 176.

Where presentment is optional, the object of presenting is (1), to obtain the acceptance of the drawee, and thereby secure his liability as a party to the bill; (2), to obtain an immediate right of recourse against antecedent parties in case the bill is dishonoured by non-acceptance. An agent is bound to use due diligence in presenting for acceptance, even when presentment is optional for the purposes of the Act, and he is liable to his principal for damage resulting from his negligence. A bill in the form “Pay without acceptance” is valid.3

Subject to sect. 40 (2) the question of due presentment is only material when acceptance cannot be obtained. If acceptance is obtained the informality of the presentment is immaterial. There is very little English authority on the subject, and it is to be noted that rules as to presentment for payment do not apply in their entirety to present

ment for acceptance, see post, p. 137. Domiciled (4) Where the holder of a bill, drawn payable bill coming forward late. elsewhere than at the place of business or resi

dence of the drawee, has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before pre

1 Walker v. Stetson (1869), 2 Amer. R. 405.

Pothier, No. 128 ; Nouguier, $ 462 ; Alen v. Suydam (1828), 20 Wend. 321, New York, as to date bills; see Bank of Van Diemen's Land v. Victoria Bank (1871), L. R. 3 P. C. at p. 542, after sight bill.

3 R. v. Kinne ur (1838), 2 M. & R. 117; Nouguier, $ 470.

senting it for payment is excused, and does not § 39. discharge the drawer and indorsers.

This sub-section, which is rendered necessary by subsection (2), was added in committee. It settles à moot point, and perhaps alters the law. Suppose a bill, payable one month after date, is drawn in New York on a Liver. pool firm, but payable at a London Bank. It only reaches the English holder, or his agent, on the day that it matures. He must, nevertheless, present it for acceptance to the drawees in Liverpool. The Act provides that he shall not be prejudiced by so doing. Before the Act the usual practice was to protest the bill in London without any presentment to the drawees—an obviously inconvenient mode of proceeding, for the holder's object is to get the bill paid, and not to run up expenses against the drawer and indorsers.

40. (1) Subject to the provisions of this Act, Time for when a bill payable after sight is negotiated, the bill payable

after sight. holder must either present it for acceptance or negotiate it within a reasonable time.

(2) If he do not do so, the drawer and all indorsers prior to that holder are discharged.

(3) In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case.

ILLUSTRATIONS. 1. A. in Windsor draws a bill on B. in London, payable one month after sight. The holder keeps it for four days before presenting it for acceptance. It is then dishonoured. This may not be an unreasonable delay.”

2. A. in London draws a bill on B. in Rio, payable sixty days after sight. The payee holds it back for four months, during which

For the provisions referred to, see sect. 41 (2), post, p. 137, which deal with the excuses for non-presentment.

· Pry v. Hill (1817), 7 Taunt. 397 ; cf. Shute v. Robins (1828), 2 C. & P.

$ 40.

time Rio bills are at a discount. He then negotiates it. This may not be an unreasonable delay.'

3. A. in Newfoundland draws a bill (in a set) on B. in London, payable ninety days after sight. The payee holds it back for two months, and then forwards it for presentment. No reason for holding back is shown. This may be an unreasonable delay.”

4. A. in Calcutta draws a bill on B. in Hong Kong, payable sixty days after sight. The holder retains it for five months, during which time China bills are at a discount. He then negotiates it. This may be an unreasonable delay.3

5. A. draws a bill on B., payable to C. three months after sight. C. holds it back for an unreasonable time. He then presents it, and it is accepted. Before it is due the acceptor fails. A. is (probably) discharged.

Reasonable time is a mixed question of law and fact, and in determining it regard must be had to the interests of the holder as well as to the interests of the drawers and indorsers. Qu. What, if any, is the liability of a person who retains a bill an unreasonable time and then negotiates it without indorsement ? Again, does not negotiation within a reasonable time, toties quoties, excuse presentment or is there any limit? By German Exchange Law, Art. 19, when a bill payable after sight does not fix a time for presentment, it must be presented within two years of its date. By French Code, Art. 160, as amended by the law of May 3, 1862, bills payable after sight are divided into classes according to the places where they are drawn and payable, and definite limits of time for presentment are fixed, varying from three months to one year-e.g., bill drawn in Paris on London must be presented for acceptance within three months. The effect of this conflict of laws has not been considered.

Rules as to presentment for acceptance, and excuses for non-present. ment.

41. (1) A bill is duly presented for acceptance which is presented in accordance with the following rules:

(a) The presentment must be made by or on

1 Mellish v. Rawdon (1832), 9 Bing. 416.
2 Straker v. Graham (1839), 4 M. & W. 721.

3 Ramchurn Mullick v. Luchmeechund Rudakissen (1854), 9 Moore, P. C. 46 ; cf. Godfray v. Coulman (1859), 13 Moore, P. C. 11.

4 Straker v. Graham (1839), 4 M. & W. 721. 5 Ramchurn Mullick v. Luchmeechund Radakissen (1854), 9 Moore, P. C. 46 ; Wallace v. Agry (1827), 4 Mason, 336, Sup. Ct. U. S., per Story, J.

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