the amount of the bill and the penalty; and therefore, I suppose, the complete measure of damages will be indicated by the amount for which a holder must re-draw, to place himself in funds. But if this holder be an impecunious person, hardly any amount for which he could negotiate his re-draft would enable him to realise the amount of the dishonoured bill.

Mr. BASTABLE: I have always understood that a cheque marked "not negotiable" does not mean that it is not assignable, but that the person who takes it does so at his own risk. With regard to the banker who collects such cheques the original Crossed Cheques Act, section 12, has been reproduced in sections 81-82 of the Bills of Exchange Act, 1882. In the Crossed Cheques Act the section was connected by the word "but," and I believe that Sir John Lubbock attached some importance to the word "but " in a letter which he wrote shortly after a discussion took place on section 12 of the Crossed Cheques Act. He said, "I believe that the word 'but' drew a distinction between bankers and other people. I do not know the grounds for this alteration." In this Act the two sections are made distinct. Section 82 says: "Where a banker in good faith and without negligence receives payment for a customer of a cheque crossed generally or specially to himself, and the customer has no title, or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment." I have heard it stated, though I do not agree with the opinion, that a banker does not act without negligence if he takes a cheque payable to John Smith, crossed "not negotiable," from anybody else but John Smith. As far as I can see, John Smith may pass it on, but the person who takes it from him does so at his own risk, but has just as good a title to it as John Smith. The banker, however, who collects the cheque has nothing whatever to do with the fact that his customer or anybody else has a good title provided he acts in good faith and without negligence. One more point with regard to these sections. Mr. McLeod, who read a paper before this Institute, holds, that when a customer pays a cheque into a bank to his account the cheque becomes the property of the banker. It appears to me that would be to a certain extent correct, because if the bank fails the customer could not go next morning and say "give me back my cheque," he would only have a claim against the bank for the amount standing to his credit. If that is the effect of the law, can it be said that the banker receives payment for his customer? According to Mr. McLeod he does not receive payment for his customer, but for himself. Of course, if the cheque is not paid the banker may debit the customer's account, and send it back to him, but if the account were overdrawn, or if there were not sufficient funds on the account to cover the return, the banker may hold the cheque and can sue the drawer in his own name as holder in due course. have heard it said that a banker cannot insist on a second or third

I

continuous endorsement on a cheque. Section 73 says a cheque is a bill of exchange drawn on a banker payable on demand, and section 8 (sub-section 3) says, "a bill is payable to bearer, which is expressed to be so payable, or on which the only or last endorsement is an endorsement in blank." Now, if a cheque is made payable to John Smith or order, and he endorses it "pay John Jones or order" and Jones endorses it "pay A B or order," can the banker insist on having A B's endorsement before paying the cheque to another banker? I ask the question because I have heard it raised, and I do not see why the banker should not have continuous endorsements on a cheque as he would on a bill of exchange.

The PRESIDENT (Sir John Lubbock): If no other gentleman wishes to address the meeting before I call upon Mr. Chalmers to reply, I will say a few words upon the paper now before us. If I might venture upon any criticism of that paper, it is, I think, that Mr. Chalmers does not quite appreciate so much as it is obvious other gentlemen present have done, the importance of this Act in clearing up many points which remained doubtful, and to which he himself called our attention in an interesting paper he read to us at one of our previous meetings, where he says, "The Act, consciously at any rate, effects but few direct changes in the law and none of those are of any great importance." Mr. Steel, in his excellent speech, Mr. Billinghurst, and several of the other speakers have shown, as a matter of fact, that though when it was first introduced there is no doubt this Bill was what it professed to be, simply and solely a codification of the law, and very important from that point of view, but, at that time, containing no new provision, still, during its passage through Committee, we introduced a considerable number of new points which I believe to be satisfactory to the commercial community, in many cases assimilating the written law of the land to commercial usage, and especially assimilating the law of Scotland to that of England. Mr. Billinghurst has referred to several points; for instance, the question of blank endorsement, that is to say, a cheque or bill with a blank endorsement, and then afterwards one or more special endorsements. I think the general practice of bankers was to return such bills if the later endorsements were in any way irregular. I think it was a convenient practice, and it is an advantage that the law of the land should be made clear. More than one of the speakers have referred to the question of clause 48, which, however, merely states the law as it stood before, and does not, therefore, require any change of practice. Mr. Venn has called attention to two points, one in reference to cases of need and the other to clause 51, section 3, which says:—"A bill which has been protested for non-acceptance may be subsequently protested for non-payment," and he says that that brings us to a certain extent in conflict with foreign law, and it is very necessary that we should in dealing with bills of exchange, deal with them not only with

reference to English law, but in regard to foreign law. But I would point out that all an Act of Parliament can do is to lay down English law. If you are going to deal with a bill in England you are not prevented from doing so by not having protested it under this clause, but as regards foreign bills you must have reference to foreign law, and it is to keep us all straight with reference to the foreign codes that we are so glad to avail ourselves of the services of Mr. Venn and other gentlemen conversant with foreign codes. These two clauses merely have reference to English law, so far as regards this country.

Mr. VENN: It is clause 43 I wish to draw attention to:-" (1.) A bill is dishonoured by non-acceptance (a) When it is duly presented for acceptance and such an acceptance as is prescribed by this Act is refused or cannot be obtained; or (b) when presentment for acceptance is excused and the bill is not accepted. (2.) Subject to the provisions of this Act when a bill is dishonoured by non-acceptance an immediate right of recourse against the drawer and indorsers accrues to the holders and no presentment for payment is necessary."

The PRESIDENT: That is another point, and I propose to leave it to Mr. Chalmers. Mr. Brett spoke about the question of reexchange. There was a section in the Bill, as drawn, about reexchange, but that was left out by the committee because it was found that custom was so very different in different parts of the world. The difference of currency, the difference of time and the difference of distance made it extremely difficult to lay down any exact rule which would apply in all cases. Therefore, they thought it would be better to leave this matter to be dealt with by custom. Mr. Bastable dealt with clause 82 and the word "but," on which I differed from some high authorities. I do not say I was right in the interpretation I put upon the clause in the old Act, but I have no doubt as to what the meaning of Parliament was when the Act was passed. At any rate I venture to think the provision is now quite clear. I trust it will be found, as I think the meeting is of opinion it has been proved so far, that the Bill has been carefully drawn and reflects great credit upon Mr. Chalmers. On the whole I believe that this Act carries out the intentions with which it was framed, that is to say, it gives in a very clear and succinct form the present state of the law, assimilates the law of England, Scotland and Ireland, clears up many points which remained doubtful, harmonises law and custom on some points on which they differed, and lastly, in some cases, introduces substantial improvement in the law. These are points of considerable importance. And I hope also this Act will confer another advantage upon the English community in being, as Mr. Steele has said, the first piece of codification of the law. Let us hope it may lead to the same principle being applied to other sections of the law which need it as much as this.

Mr. CHALMERS: Sir John Lubbock has, I think, answered most of the questions raised, but there are one or two minor matters I may refer to. Mr. Steele has pointed out the inappropriate character of the phrase "not negotiable" on a cheque, because it does not mean what it says. A cheque crossed "not negotiable" is of course still transferable. The phrase really means that it is "not fully negotiable." It is transferable, but the person who transfers it can give no better title to his transferce than he himself possesses. The subject was discussed by the committee, and I suggested that some such phrase as "with caution" or "with notice" should be substituted. But the committee rightly said that the Act which introduced the phrase not negotiable" had been some time in force. People had got used to writing the words and were beginning to understand their import. It would take some time to educate people into the use of a new phrase and therefore it was better to stick to the old one.

One small change I certainly wish to see made, because within the last few days I have had a practical example of the ill effects of the existing rule. I think statutory and common law holidays should be put on the same footing. In the case I refer to a firm of solicitors had to present a bill for payment. The third day of grace was Sunday. They presented it on the Monday. I had to tell them the drawer and the indorser were discharged, though no actual damage had been suffered. The fact is the solicitors were misled by the rule as to bank holidays.

Some remarks were made by Mr. Venn as to presentment to the case of need and the effect of the present rule on foreign indorsers. We must remember that an English Act can only legislate for England. No English Act can operate in a foreign country. If you want to charge an American drawer in America, you must have recourse to American law; and if you wish to charge a French indorser in France, you must have recourse to French law. I know the law of a foreign country requires presentment to the case of need, and does not consider it as optional; it is certainly safer to conform to that law and to make the presentment. Still I take it that the courts of most countries would hold that the duties of the English holder in England were regulated by English law, just as we hold (see sec. 72 of the Act) that for the purpose of charging an English drawer in England the duties of a French holder in France are determined and regulated by French and not by English law. However, in making the presentment you keep at any rate on the safe side. So, again, when a continental bill is dishonoured by non-acceptance, clearly the safer course is to protest it again for non-payment, though English law does not consider this essential if it has been duly protested for non-acceptance.

Mr. Billinghurst regarded with some doubt the section which protects bankers when the indorsement on a cheque is forged (see

sec. 60). I think that section correctly reproduces the 16 & 17 Vict., c. 59, s. 19; but that Act has not been repealed, because it was thought it might possibly apply to some "drafts or orders " which were not cheques. So Mr. Billinghurst now has the double protection of the old Act and the new one.

Some remarks were made about the justice of holding the drawer of an unaccepted bill liable, even though it was not duly presented. I would point out that Lord Bramwell's clause (sect. 74) is a step in that direction, and some day we may hope to see the principle further extended.

Mr. Venn has commented on the difficulty of giving notice of dishonour to the drawer and indorsers of a bill dishonoured by non-acceptance. How is the holder to know their addresses? Well, exactly the same difficulty arises if the bill is dishonoured by nonpayment. But I would call attention to sect. 50, which deals with excuses for non-notice and delay. All that is required of the holder is the exercise of reasonable diligence. Besides, the holder knows the party from whom he took the bill. If the holder gives notice to him, that party for his own protection will send on the notice, and the holder can take advantage of the notice so sent on. I do not think there are any other points that occur to me to refer to.

REMARKS ON THE BILLS OF EXCHANGE ACT, 1882.

By Mr. H. F. BILLINGHURST, a Member of the Council.

I PROPOSE in these remarks to regard the Act from a banking point of view, and to call attention to certain of the clauses which either introduce new law with regard to bills of exchange, or which formulate in the shape of clauses of an Act of Parliament certain customs or decisions with regard to bills of exchange to which it is well to call the special attention of bankers.

Amongst clauses which principally effect changes of the law, or which legalize customs, especially affecting bankers, are these:

CLAUSE 7, SECTION 2.-"A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an office for the time being."

This section is an innovation as respects the legality of alternative payees to a bill, also as to bills payable to the holder of an office, and these provisions, which appear to have been introduced by the Select Committee of the House of Commons, will doubtless