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it is payable, that there may be a possible rate of exchange between the two. A false statement of places, so as to evade this rule, avoids the bill in the hands of a holder with notice. As French lawyers put it, a bill of exchange necessarily presupposes a contract of exchange.* In England, since 1765, a bill may be drawn payable to bearer, though formerly it was otherwise.t In France it must be payable to order; if it were not so, it is clear that the rule requiring the consideration to be expressed would be an absurdity. In England a bill originally payable to order becomes payable to bearer when indorsed in blank. In France an indorsement in blank merely operates as a procuration. An indorsement, to operate as a negotiation, must be an indorsement to order, and must state the consideration ; in short, it must conform to the conditions of an original draft. In England, if a bill be refused acceptance, a right of action at once accrues to the holder. This is a logical consequence of the currency theory. In France

cause of action arises unless the bill is again dishonoured at maturity; the holder, in the meantime, is only entitled to demand security from the drawer and indorsers. In England a sharp distinction is drawn between current and overdue bills. In France no such distinction is drawn. In England no protest is required in the case of an inland bill, notice of dishonour alone being sufficient. In France every dishonoured bill must be protested Grave doubts may exist as to whether the English or the French system is the soundest and most beneficial to the mercantile community, but this is a problem which it is beyond the province of a lawyer to attempt to solve.


M. D. C.

* This rule is said to be now obsolete ; but the Code remains unaltered. + See Stewart v. Hodges (1692), 12 Mod. 36.


45 & 46 Vict. c. 61.

An Act to codify the law relating to Bills of
Exchange, Cheques, and Promissory Notes.

[18th August, 1882.] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:



1. This Act may be cited as the Bills of short title. Exchange Act, 1882.

The Bill as originally drafted applied only to England Local extent and Ireland. The clause excluding Scotland was struck out in committee. The Act therefore applies to the whole of the United Kingdom. Sect. 4 and sect. 83 (4) (inland and foreign bills and notes), and the consequential enactment, sect. 51 (2) (protest), apply also to the Channel Islands and the Isle of Man. The general rule of construction is that an English Act does not bind foreigners



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out of the jurisdiction, and of course an English Act cannot bind foreign courts. As to the effect to be given to foreign laws where they differ from English law, see sect. 72, post, p. 238.

The commencement clause in the Bill was struck out in committee. The Act therefore came into operation from the date when it received the Royal assent, namely, the 18th August, 1882.

The general rule of law is that a statute is not to be construed as retrospective unless it contains express terms giving it retrospective effect. In so far, therefore, as the Act alters the law, it is presumed that it does not apply to any instrument made before that date. Provisions which alter the law are sect. 4 (2); sect. 7 (2) (3); sect. 8 (1) and (3); sect. 12; sect. 14 (1); sect. 15; sect. 18 (3); sect. 33 ; sect. 36 (3); sect. 39 (4); sect. 41 (2); sect. 44 (2); sect. 49 (6); sect. 51 (2); sect. 61 ; sect. 62; sect. 64; sect. 73 ; sect. 74; sects. 91–95; sect. 100.

The Act is by its title a codifying Act, and the rule for its construction is thus stated by Lord Herschell:—“I think," says he, “the proper course is, in the first instance, to examine the language of the statute, and to ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view. If a statute intended to embody in a code a particular branch of the law is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it the law should be ascertained by interpreting the language used, instead of, as before, by roaming over a vast number of authorities in order to discover what the law was, extracting it by a minute critical examination of the prior decisions, dependent upon a knowledge of the exact effect even of an obsolete pro

Jefferys v. Boosey (1854), 4 H. L. Ca. at pp. 935, 939; Ex parte Blain (1879), 12 Ch. D. 522.

2 Cf. M'Lean v. Clydesdale Banking Co. (1883), 9 App. Cas. at p. 106 ; Leeds Bank v. Walker (1883), 11 Q. B. D. 84.


ceeding, such as a demurrer to evidence. I am, of course, $ 1. far from asserting that resort may never be had to the previous state of the law for the purpose of aiding in the construction of the provisions of the code. If, for example, a provision be of doubtful import, such resort would be perfectly legitimate. Or, again, if in a code of the law of negotiable instruments, words be found which have

previously acquired a technical meaning, or been used in a sense other than their ordinary one, in relation to such instruments, the same interpretation might well be put upon them in the code. I give these as examples merely; they, of course, do not exhaust the category."?

This Act deals only with bills, notes, and cheques. It has Negotiable no application to other negotiable instruments, such as negoti- scrip, bonds, able bonds or scrip. As to such instruments, see Chapter on Negotiable Securities for Money, post, pp. 312—327.

As to bills and notes made by a corporation under seal, see sect. 91 (2), post, p. 278. The enactments which regulate bank notes are expressly saved by sect. 97 (3) (c), post, p. 284.

2. In this Act, unless the context otherwise Interpretarequires,

Acceptance” means an acceptance completed Acceptance.

by delivery or notification.2 As to delivery or notification to complete an acceptance, see sect. 21, post, p. 52; and as to the requisites of a valid acceptance, see sect. 17, post, p. 40.

“ Action" includes counter-claim and set-off. Action.

See sect. 30, post, p. 93; sect. 57, post, p. 190, and sect. 70, post, p. 233, which require this definition. “Banker” includes a body of persons, whether Banker.

incorporated or not, who carry on the busi

ness of banking See sect. 60, post, p. 208, as to forged indorsements on

tion of terms

1 Bank of England v. Vagliano, (1891) A. C. at p. 144, decided on sect. 7 (3). 2 See Smith v. M'Clure (1804), 5 East, 476.

$ 2.



demand drafts, and sects. 73 to 83 as to cheques. Compare the definition of "banker,” given by sect. 29 of the Stamp Act, 1891, post, p. 354.

Bankrupt” includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to

bankruptcy. This definition includes a debtor who has liquidated by arrangement under the Bankruptcy Act of 1869, or whose estate is vested in a trustee under sect. 3 of the Bankruptcy Act, 1890, as well as a bankrupt properly so called. It does not appear to include a debtor against whom merely a receiving order has been made. See sects. 41 (d), 49 (10), which require this definition. “Bearer” means the person in possession of a

bill or note which is payable to bearer. The possessor of a bill or note payable to order is not technically the “bearer” of it. As to the rights of a person who has given value for a bill payable to the order of some other person, see sect. 31 (4), post, p. 103. By sect. 8 (3), a bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an indorsement in blank. “Bill” means bill of exchange, and “note”

means promissory note. For the operative definitions of these terms, see sects. 3 and 83. “ Delivery” means transfer of possession, actual

or constructive, from one person to another. A person is said to have constructive possession of a thing when it is in the actual possession of his servant or agent on his behalf ; therefore delivery may be effected without change of actual possession in three cases, namely: (1) A bill is held by O. on his own account; he sub

Bill and note.


1 Cf. Day v. Longhurst, W. N. (1893), p. 3.

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