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17. Where an instrument may be construed Ambiguous either as a promissory note or bill of exchange, the BLR 15 Br ZR15 holder may at his election treat it as either, and the 267 instrument shall be thenceforward treated accordingly.
The reason for this is, that the words of an instrument are to be taken most strongly against the person using them. Thus where an instrument was as follows:
LONDON, 5th August 1833.
Three months after date I promise to pay to Mr. John Bury or order, the sum of forty-four pounds, eleven shillings, and six pence, value received.
J. B. GUTHEROT,
35, Montague Place,
and Gutherot's name was written across the face of the instrument as an acceptance, and the maker's name across the back as an indorsement; it was held that the plaintiff who had taken it on Bury's indorsement, might treat him either as the drawer of a bill, or the maker of a note, and as the latter, no notice of dishonor would be necessary to him.1
Although bills of exchange drawn and accepted by the same party, may be in strictness promissory notes rather than bills, yet where the intention is to give, and receive such documents as instruments capable of being negotiated in the market as bills of exchange, both the holders and the parties may treat them accordingly. It will be observed that the section only refers to the holder being allowed his election.
18. If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words shall be the amount undertaken or ordered to be paid.
This is the English law laid down in the year 1839, but where there is an ambiguity in the words they may be explained by the
Edis v. Bury, 6 B. & C. 433. 2 Willans v. Ayers, L. R. 3 App. Cas. 133.
8 Sanderson v. Piper, 5 Bing. N. C. 425; S. C. 7 Scott, 408.
Instruments payable on demand.
Inchoate stamped instruments.
figures, thus if the body of the instrument contain a direction to pay thirty, ten annas and six pies, and the figures on the same instrument show the amount to be 30 10 6. This could be proved for, as an instrument for thirty rupees, ten annas, and six pies.
Rupees Annas Pies.
19. A promissory note or bill of exchange, in which no time for payment is specified, and a cheque, are payable on demand.
This is the English law.-The latest case in which this principle has been recognised,2 was where the defence raised was, that as the promissory note sued on, which had been made and issued without any time being mentioned in it, at which it was to become payable, and the words "on demand" had been added, it was void, by reason of having been altered, the Court said :— "It seems to us repugnant to justice and common sense, to hold that a maker of a promissory note is discharged from his obligation to pay it, because the holder has put in writing on the note what the law would have supplied, if the words had not been written." (See post, Sec. 87). A cheque by Sec. 6, can only be made payable on demand.
20. Where one person signs; and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in British India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives primâ facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount: provided that no person
Phipps v. Tanner, 5 C. &
2 Aldous v. Cornwell, L. R. 3 Q. B. 573.
other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
Signs and Delivers.-The expression in this section "where one person signs and delivers" would, from the use of the singular number, seem to imply, that the legislature intended to follow a recent case in England, and to declare, in reference to these somewhat exceptional instruments, that he alone who signs shall be responsible, and prima facie shall not be considered to have authority to bind his partners, or any one but himself. The case referred to was as follows: A, was a member of a firm consisting of A and B, and was privately indebted to C who pressed him for payment, whereupon A gave to C, two bills of exchange which were accepted in the name of the firm of A and B, and complete with the exception of the drawer's name. C informed D (the plaintiff) who discounted them, that he had arranged with A and B, that the bills might be drawn in the names of C and his partner E, and accordingly their names were inserted by D as drawers, but D subsequent to their receipt, and before inserting the names of C and E, as drawers had reason to suspect something was wrong. The bills having been dishonored, D sued A and B. B had given no authority to A to issue the blank acceptances, and the bills had not been accepted for partnership purposes. The question was, whether the plaintiff having given value for the bills, was entitled to charge B, whose partner had written the blank acceptance. Bramwell, L. J., said, “I am “of opinion this is not a mercantile business transaction, and was "not within the presumable authority of A. Anybody who takes "such an instrument as this, knowing that when it was accepted, "the bill had not the name of any drawer upon it, takes it at "his peril, and must show that in fact the partner who did not
write the acceptance, authorized the attaching of the partnership name to the document, with the intent that it should be "filled up by any person who got it. Plaintiff's counsel argued "that it was a negotiable instrument before the drawer's name
was put to it, but I am of opinion that it was not. To enable "the plaintiff to complete it and make it a negotiable instru
ment, it must be shown he had the authority of the person, who
was to be liable on it. I am inclined to think, that if he had in
"dorsed the bill for value after he had filled in the defendants' 66 names as drawers, the indorsee could have maintained an action, "for the indorsee would have taken a perfect bill of exchange, signed by such a firm, as one of its partners would presumably "have had authority to draw. The difference would be, that in 66 that case, the plaintiff would not have had the notice which he "had in this."1 Brett, L. J., said, "I therefore come to the "conclusion that the person who takes an acceptance with the "drawer's name in blank, has no right to say, that that accept66 ance entitles any holder to put in any name which he may “think fit. It seems to me to be contrary to every rule of law
as to principal and Agent, and to every rule of mercantile "law, to suppose plaintiff had the right to assume that defend"ants could be lawfully made drawers of the bill. They were "not drawers of the bill. Now until a custom of merchants is "proved, and proved so satisfactorily, that the Court may take "notice of it afterwards, to the effect that it is an ordinary "transaction for one partner to draft an acceptance in blank and "to deliver it, I shall hold that an instrument thus drawn is "invalid."
Where A joined in making a joint and several promissory note with B, upon the agreement that it was not to be issued until a third person C joined in making it, leaving blanks for the date and payee's name, and it was left in possession of B, who represented to D that he had authority to issue it, it was held that D could not sue A, Parke, B, saying, “I do not gainsay the posi"tion that a person who puts his name to a blank paper impliedly "authorizes the filling up of it to the amount the stamp will
cover. Here the instrument to which the defendants' name " is attached, was delivered to B with power to make it a com"plete instrument on one condition only, viz., if C would be a "joint surety with him. This, therefore, is a case of a limited "authority, where, in case of a refusal by C to join there was a countermand. A party who takes such an incomplete instru"ment cannot recover upon it, unless the person from whom he "receives it had a real authority to deal with it. The maxim "of law is "nemo plus juris in alium transferre potest quam
ipsi habet." It is a fallacy to say that the plaintiff is a bonâ
1 Ib., 3 Q. B. D. 643.
2 Hogarth v. Latham, at pp. 651, 652.
“fide holder for value, he has taken a piece of blank paper, not a promissory note. He could only take it as a note under the "authority of A, and he had no authority; consequently the “instrument is void as against the defendant."
From these cases it will be seen, that the duty arises of clearly ascertaining the authority of the person who delivers such an instrument, when it is intended to charge any other person on his signature being thereon, or the signature of a partnership.
Whether the acceptor of a blank bill is liable on it, depends upon his having issued the acceptance intending it to be used. No case has been decided where the acceptor has been held liable if the instrument has not been delivered by the acceptor to another person. And Parke, B, says, "If a man should lose his cheque"book, or neglect to lock his desk, in which it is kept, and a ser"vant or stranger should take it, it is impossible in our opinion "to contend, that a Banker paying his forged cheque would be "enabled to charge his customer with that payment. Would it "be contended that if he kept his goods so negligently, that a "servant took and sold them, he must be considered as having "concurred in the sale, and so be disentitled to sue for their con"version on demand and refusal." 113
The section provides that there must be delivery after signing to another, and then the holder will have prima facie authority to make or complete the instrument. Where a bill of exchange is issued in blank for the name of the payee, a bonâ fide holder may insert his own name as payee, and the drawer will be liable :^ or by any bearer with his own name, who can show that he came regularly to the possession of it: and the acceptor may add the drawer's name to complete the instrument, even after the latter's death." If a person puts his name to a paper, which either is, or by being filled up, or indorsed may be converted into a negotiable security, and allows such paper to get into the hands of another person, who transfers the same to a holder for consideration and without notice, such party is liable to
1 Awde v. Dixon, 6 Exch. 869. Baxendale v. Bennett, 3 Q. B. D. per Brett, J., at p. 531; S. C. 47 L. J. (Q. B.) 624.
3 Bank of Ireland v. Evans Charities, 5 H. L. C. 39.
4 Crutchley v. Clarance, 2 M. & S. 9o.
5 Crutchley v. Mann, 5 Taunt., 529.
6 Carter v. White, 20 Ch. D. 225; see also Scard v. Jackson, 34 L. T. 65 (n); S. C. 24 W. R. 159; Harvey v. Cane, 34 L. T. 64; S. C. 24 W. R. 400.