Acceptor or maker. The repeal of the statute of Anne may, however, have an important bearing on notes made under the seal of a corporation as provided for by sect. 91 (2) ante, p. 278. Such notes might be held to come under the 3 & 4 Will. 4, c. 42, s. 3, which enacts that all actions of covenant or debt upon any bond or other specialty shall be commenced and sued within twenty years after the cause of such actions and not after. There is sometimes a difficulty in proving the fact which sets the statute running. For instance, if a note be payable three months after demand, the statute cannot begin to run till three months after demand be made. If the maker be dead it may be impossible to prove the demand on him. In such cases after the lapse of a considerable time, a presumption of payment seems to arise independent of the statute.1 Rule 2. As regards the acceptor, time begins to run from the maturity of the bill, unless 2 (1.) Presentment for payment is necessary in order to ILLUSTRATIONS. 1. Bill payable in futuro, e.g. three months after date or sight. Time runs in favour of the acceptor from the day the bill is payable, not from the day the acceptance is given.* 2. B. in 1840 gives a blank acceptance to C. In 1850 it is filled up as a bill payable three months after date, and negotiated to a bona fide holder. Time runs in favour of B. from the day the bill was payable.5 3. Note payable on demand (with or without interest), and issued on the day it bears date. Time runs in favour of the maker from the date of the note, and not from the date of demand." 4. Note payable on demand, dated January 1, is not issued till July 1. Time runs in favour of the maker from July 1, the day of issue.7 1 Re Rutherford (1880), 14 Ch. D. 687, at p. 691, C. A., where twenty years had elapsed. 2 Cf. sect. 52 (2), ante, p. 177. 3 Cf. sect. 10 (2), ante, p. 30. Holmes v. Kerrison (1810), 2 Taunt. 323; cf. Fryer v. Roe (1852), 12 C. B. 437. See sect. 14, ante, p. 34, computation of time of payment. Montague v. Perkins (1853), 22 L. J. C. P. 187; cf. sect. 20. Norton v. Ellam (1837), 2 M. & W. 461; cf. Jackson v. Ogg (1859), Johns. at p. 400; Wheeler v. Warner (1872), 47 New York R. 519. 7 Savage v. Aldren (1817), 2 Stark. 232; cf. Richards v. Richards (1831), 2 B. & Ad. 447; Watkins v. Figg (1863), 11 W. R. 258. 5. Note payable three months after demand. favour of the maker from the day the bill is payable.1 Time runs in Rule 3. As regards the drawer or an indorser, time Drawer or (generally) begins to run from date when notice of dis- indorser. honour is received,2 ILLUSTRATIONS. 1. Bill payable ninety days after sight is dishonoured by nonacceptance. As regards the drawer time runs against the holder from the dishonour by non-acceptance and notice thereof. If the bill is presented for payment and again dishonoured, no fresh cause of action arises.3 2. A bill drawn on B. C. indorses it for A.'s accommodation. The bill is dishonoured, and five years after the dishonour, C., as indorser, is obliged to pay the holder. Two years later (i.e., seven years after the dishonour), C. sues A. on the bill. The action is barred. Aliter if C. sued A. on the implied contract of indemnity. 3. C. is the indorser of a bill or note payable on demand. Time in ordinary cases does not begin to run in favour of C. until demand has been made and notice given." See sect. 47. In England it has been held that the holder's right of action against the drawer or an indorser is complete when notice of dishonour is received; when then does the cause of action arise when the notice is delayed or lost in the post? Perhaps from the time when it ought to have been received. In America the balance of authority favours the view that the cause of action is complete when notice of dishonour is sent. In cases where notice of dishonour is unnecessary probably the cause of action arises on dishonour. A difficulty arises in the case of a bill payable on demand when presentment for payment is excused, and presentment is not made in fact. On principle, it would seem that time should run in favour of the drawer or indorser from the date when the holder was entitled to treat the bill as dishonoured (see sects. 46 (2) and 47), but the cases are conflicting. Rule 4. When an action is brought against a party to Collateral a bill, to enforce an obligation collateral to the bill, though obligations. 1 Thorp v. Coombe (1826), 8 D. & R. 347; cf. Way v. Bassett (1845), 5 Hare, 55; Brown v. Rutherford (1880), 14 Ch. D. 687, C. A. 2 Cf. Castrique v. Bernabo (1844), 6 Q. B. 498; and sect. 43, ante, p. 139. 3 Whitehead v. Walker (1842), M. & W. 506. 4 Webster v. Kirk (1852), 17 Q. B. 944; cf. Woodruff v. Moore (1850), 8 Barb. 171, New York. Cf. Re Brown's Estate, (1893) 2 Ch. at pp. 304, 305. 6 Castrique v. Bernabo (1844), 6 Q. B. 498. 7 Daniel, § 1212; Shed v. Brett (1823), 18 Massachus. R. 401. 8 Cf. Re Bethell (1887), 34 Ch. D. 561, Stirling, J.; but see contrà Re Boyse (1886), 33 Ch. D. 612. Foreign laws. Statute, how defeated. arising out of the bill transaction, the nature of the particular transaction determines the period from which time begins to run. ILLUSTRATIONS. 1. B. accepts a bill to accommodate the drawer. It is dishonoured, and two years afterwards B. is compelled to pay the holder. B sues the drawer on the implied agreement to indemnify. Time runs from the date B. was compelled to pay, and not from the maturity of the bill.1 2. B. authorizes A., an agent abroad, to draw upon him for the price of goods to be shipped to B. B. dishonours a draft so drawn, and A. is compelled to take it up. A. can sue B. on an implied contract to indemnify. Time runs from the date when A. was compelled to pay.2 3. A., intending to lend C. 507., draws a cheque in C.'s favour for that sum. A. sues C. to recover the loan. Time runs from the date when the cheque was cashed.3 See note, ante, p. 199, distinguishing a right of action on a bill from a right of action which a party to a bill may have arising out of the bill transaction but independent of the instrument. Foreign laws and conflict of laws.-In France the period of limitations is five years, and the time, it seems, begins to run against acceptor, drawer, and indorsers from the day of protest. By German Exchange Law, Art. 77, the limitation as regards the ac ceptor is three years, starting from the maturity of the bill; but as regards the drawer or indorsers, it is three months, starting from the day of protest, if the drawer or indorser live and the bill be payable in Europe. Where laws conflict as to time of limitation, and the limitation, as in England, merely bars the remedy, the lex fori governs. Aliter probably when lapse of time operates as a discharge. Rule 5. Any circumstance which postpones or defeats the operation of the Statute of Limitations in the case of an ordinary contract postpones or defeats it in like manner in the case of a bill. No indorsement or memorandum of any payment written. or made upon a bill by or on behalf of the party to whom such payment is made is sufficient to defeat the operation of the statute 6 1 Reynolds v. Doyle (1840), 1 M. & Gr. 753; Angrove v. Tippett (1865), 11 L. T. N. S. 708; but cf. Coppin v. Gray (1842), 11 L. J. Ch. 105, as to a premature payment; see Davies v. Humphreys (1840), 6 M. & W. 153, contribution among co-makers. 2 Huntley v. Sanderson (1833), 1 Cr. & M. 467. 5 Don v. Lippmann (1837), 5 Cl. & F. 1, H. L. ILLUSTRATIONS. 1. The holder of an accepted bill dies intestate before its maturity. The statute does not begin to run until an administrator is appointed.1 2. The holder of a bill at the time of its dishonour is a minor or a lunatic. The statute does not begin to run against such holder until the disability ceases.2 3. Note payable on demand, no mention of interest being made in it. Proof that interest has been paid takes the note out of the statute.3 4. Note payable on demand with interest. Four years after its issue the holder sues the maker for interest, and recovers. Three years later (i.e., seven years after issue of note) the holder sues the maker on the note. The action is barred. Aliter if the payment of interest had been voluntary. 5. Note payable three months after demand. Interest is paid on it, as appears from indorsements on the back of the note. This is evidence of a demand, and the statute begins to run from the first payment of interest." 6. An acknowledgment in writing signed by the party sought to be charged defeats the operation of the statute, e.g., the maker of a note twenty years after its maturity signs his name on the back, and adds the date. The holder can sue the maker within six years after this acknowledgment." 7. A note is indorsed away by the payee for value. Subsequently the maker, not knowing of the indorsement, makes a payment on account to the payee. This payment does not take the case out of the statute.7 A debt may be taken out of the Statute of Limitations in two ways, (1) by a written acknowledgment of the debt after it has become due, and (2) by a payment on account of principal or interest. Before Lord Tenterden's Act (9 Geo. 4, c. 14), a bare verbal acknowledgment was sufficient. But now by sect. 1 of that Act, as amended by sect. 13 of the Mercantile Law Amendment Act, 1856 (19 & 20 Vict. c. 97), the acknowledgment must be in writing, and signed by the debtor or his authorized agent, and must be in 1 Murray v. East India Co. (1821), 5 B. & Ald. 204; see conversely Maxwell v. Tuhill (1878), 1 Ir. L. R. Ch. D. 250, death of acceptor intestate. 2 Cf. 21 Jac. 1, c. 16; Scarpellini v. Atcheson (1845), 7 Q. B. 864. 3 Bamfield v. Tupper (1851), 7 Exch. 27. 4 Morjan v. Rowlands (1872), L. R. 7 Q. B. 493; see also Harding v. Edgecumbe (1859), 28 L. J. Ex. 313, payment by agent. 5 Brown v. Rutherford (1880), 14 Ch. D. 687, C. A. 6 Bourdin v. Greenwood (1871), L. R. 13 Eq. 281. See as to acknowledgments, Re River Steamer Co. (1871), L. R. 6 Ch. at p. 828, Mellish, L.J.; Chasemore v. Turner (1875), L. R. 10 Q. B. 500, Ex. Ch. 7 Stamford Banking Co. v. Smith, (1892) 1 Q. B. 765, C. A. 66 such terms as to indicate a promise to pay. "To take the case out of the statute," says Mellish, L.J., either there must be an acknowledgment of the debt from which a promise to pay is to be implied; or, secondly, there must be an unconditional promise to pay the debt; or, thirdly, there must be a conditional promise to pay the debt, and evidence that the condition has been performed." Lord Tenterden's Act, which required the acknowledgment to be in writing, expressly provided that nothing therein contained should "alter or take away, or lessen the effect of any payment of any principal or interest made by any person whatsoever." (9 Geo. 4, c. 14, s. 1.) "The principle," says Blackburn, J., "laid down as to an acknowledgment, has been applied in all cases upon part payment, namely, that it must be such that a promise [to pay] may be inferred in fact, not merely implied in law." 2 By 9 Geo. 4, c. 14, s. 1, as amended by 19 & 20 Vict. c. 97, s. 14, an acknowledgment or part payment by one co-debtor or co-contractor does not prevent the statute from running in favour of the other or others, and by sect. 10 of the latter Act, the absence of the plaintiff beyond the seas, or his imprisonment, does not prevent the statute from beginning to run. When the statute begins to run, no supervening disability stops it. It is clear then that if a dishonoured bill be indorsed to an infant the time still runs on.3 On the other hand, if the holder of a bill at the time of dishonour be an infant, and he subsequently indorse it while still an infant to an adult, it is conceived that the statute runs from the indorsement. It seems that an acknowledgment to the holder enures for the benefit of a subsequent holder; but an acknowledgment to a previous indorser, who at the time does not hold the bill, is ineffectual.5 4 1 Re River Steamer Co. (Mitchell's Claim) (1871), L. R. 6 Ch. App. 822, at p. 828; cf. the test proposed by Bowen, L.J., in Green v. Humphreys (1884), 26 Ch. D. 474, at p. 479, C. A. 2 Morgan v. Rowlands (1872), L. R. 7 Q. B. 493, at p. 498; cf. Davies v. Edwards (1851), 7 Exch. 22, at p. 25, per Parke, B. 3 Rhodes v. Smethurst (1840), M. & W. 351, Ex. Ch. 4 Byles, 12th ed. p. 359; cf. Cripps v. Davis (1843), 12 M. & W. 159. 5 Stamford Banking Co. v. Smith, (1892) 1 Q. B. 765. |