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§ 72.

dom, the amount shall, in the absence of some express stipulation, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is payable (w). (5.) Where a bill is drawn in one country and is payable in another, the due date thereof is determined according to the law of the place where it is payable (x).

(a.) Vide § 31.

(b.) The validity, as regards form, of bills drawn in this country is determined by § 3. In most commercial countries codes dealing with bills of exchange have been enacted, in some cases only recently. Except in a few points they agree with the law of Great Britain as now codified. Where they differ it is usually on the side of greater strictness. Thus the essentials of a bill, by the law of Germany, in so far as differing from those prescribed in this Act, are-(1), that it be described in the body of the bill as a bill; (2), that the addition of "with interest" is held pro non scripto; (3) the payee must be named; (4), the time of payment may be at a fair or market; (5), the drawer, must sign his name; (6), a bill must bear the date and place of issue. In France and in most of the countries which have adopted the code or followed it generally, (1), a bill must specify the particular value given, and (2) bear the name of the payee, (3) may be drawn payable at a fair.

(c.) Vide §§ 2 and 21.

(d.) Vide §§ 17, 18, 19. By the law of France, the signature of the acceptor is not sufficient without the word "accepté.”

(e.) Vide § 32. In Germany, an indorsement may be written on a copy of the bill. In France, it must be dated, and bear the name of the payee, and specify the value given.

(f) Vide § 65 (3). In France and Germany, the acceptance for honour must be noted on the protest.

(g.) The place of making the several contracts on the bill is the place of delivery to give effect to it, vide § 21.

(h.) Vide § 4.

(i.) See Stewart v. Gelot, 19th July, 1871, 9 M. 1057.

(j.) This subsection only applies to the validity of a bill, and not to that of an acceptance written on it. Accordingly, a drawer in this country will not be liable in recourse, where a holder, to whom he has negotiated the bill in this country has taken an invalid acceptance from a person in another country which is afterwards repudiated.

(k.) Vide § 55 (1). The interpretation of the contract of the drawer, acceptor, and acceptor for honour in all foreign countries seems generally to be the same as in this country.

(1.) Vide § 55 (2). In France an indorsement which does not state the value, only operates as a mandate, and cannot be further indorsed, and an indorsement which does not name the payee, gives him no right to sue on the bill in his own name.

(m.) Vide § 54, and note (k) supra.

(n.) Vide § 66. In France an acceptance for honour does not limit the right of the holder against the indorsers and drawer.

(0.) Vide § 21.

(p.) Vide § 4.

(q.) In Lebel v. Tucker, L. R. 3, Q. B. 77, a bill drawn, accepted, and payable in England was indorsed in blank in France, where such an indorsement does not transfer the indorser's title, it was held that though that belonged to the interpretation of the contract between the indorser and the indorsee, the indorsement gave him a title to sue the acceptor.

(r.) Vide §§ 39, 42. In Germany presentment for acceptance is not necessary, except in the case of bills payable after sight. Such bills must be presented within the time. prescribed in the bill, or, if none is prescribed, within two years. In France a bill at sight or after sight must be

§ 72.

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presented within a period varying from three months to a year, according to the places of drawing and payment.

(s.) Vide § 45, 46.

(t.) Vide $$ 44 (2), 51. In Germany protest is not necessary to preserve recourse against an acceptor, except in the case of non-payment of a domiciled bill. Inland as well as foreign bills must be protested for non-payment. Bills payable after sight must also be protested. The protest may be taken within two business days of the dishonour of the bill. In France protest must be made in the case of the non-acceptance or non-payment of both inland and foreign bills.

(u.) Vide $$ 48, 49, 50. In Germany notice of dishonour, but only in case of non-payment, must be given by the holder within two days to his immediate indorser, and each indorser in turn must give notice within the same time. If an indorser omits to give notice, he is liable to his prior indorsers in any damage they may sustain through want of notice. In France notice of non-payment may be made within the time limited for bringing action on the bill.

(v.) In Horne v. Rouquette, 3 Q. B., Div. 514, where a bill drawn in England, but payable in Spain, was negotiated to a holder in Spain and dishonoured, the holder gave notice within a reasonable time, according to the law of Spain, but too late according to the law of England, to his indorser, who gave due notice to the drawer, and after paying the bill, sued the drawer. In holding that he was entitled to recover, Mr. Justice Brett explained the reason of the rule of law, which is stated in this subsection thus: "Every party to a bill knows that by the law merchant it may be indorsed abroad. He, by the law merchant, undertakes some liability in respect of such indorsement abroad. The question is, how will he be affected by such indorsement abroad? Such an indorsement raises a contract between the immediate indorser and indorsee. Such an indorsement, then, raises a foreign contract, and that must be construed according to the law of the place where it is made. The liability of each of those contracting parties is to be measured by the law of the country in which it was made. The plaintiff, the

indorser, then, was liable to the indorsee, though he gave no $ 72. notice of the dishonour by non-acceptance. By an indorsement of which the defendant has no right to complain, which, by the law merchant, he in effect authorised the plaintiff to make at pleasure, the plaintiff, by reason of the default of the drawee, though he did once receive value for the bill, is liable to pay on the bill. He brings his case within the definition of the defendant's liability to him. It follows that, by the law of England applied to the English contract between the plaintiff and the defendant, the defendant is liable to the plaintiff. The English contract may be thus stated: An indorser contracts that if the drawee shall not on presentment accept, or at maturity pay the bill, he, the indorser, will, on receiving due notice of the dishonour, pay to the person who has a right to claim as holder against him, if such person, though he has given value for the bill, has received no value for it, or if such person, though he did receive value, is liable to pay on the bill the sum which the drawee ought to have paid, together with such damages as the law prescribes or allows as an indemnity.'" The English indorser, on receiving notice from the foreign indorser, has the same time for giving notice as a holder has, vide § 49 (14).

(w.) Vide note (d) on § 57. The alteration of the note fixing the rate of exchange, or the addition of a note fixing the rate of exchange, vitiates the bill. In Hirschfield v. Smith, L. R. 1, C. P. 340, a bill drawn in England, payable in France, was blank indorsed by the drawer to A., who also blank indorsed it to the plaintiff, who indorsed it to a banker in Paris. As by the law of France an indorsement must be special, and must specify the date and consideration, the plaintiff wrote above A.'s indorsement, "Pay to B. (the plaintiff), at the rate of 25 fr. 75 c. per £1 value received, the sum of ut retro," and he wrote the same words on the face of the bill, purporting to make them part of the acceptor's contract. The acceptor dishonoured the bill, and the plaintiff took recourse against A. It was held that the contract implied in the bill was to pay at the rate of exchange on the day when the bill fell due, and that

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§ 72.

Cheque defined.

as the rate on that day might be lower, the bill was materially altered, and therefore avoided, vide § 64.

(x.) A bill of exchange drawn in France or Germany payable in the United Kingdom is payable on the last day of grace; but a bill payable in France or Germany, or any other foreign country where days of grace are not permitted, will be payable on the day of maturity, without the addition of days of grace, The day of payment may also vary according as the law of the place of payment directs bills which fall due on a non-business day to be paid on the preceding or succeeding day. The place of payment fixes what days are non-business days.

PART III.

CHEQUES ON A BANKER.

73. A cheque (a) is a bill of exchange drawn on a banker (b), payable on demand (c).

Except as otherwise provided in this Part, the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque (d).

(a.) A cheque includes coupons on colonial stock certificates, 40 & 41 Vict. c. 59, § 7, vide Appendix.

(b.) Vide § 2.

(c.) Vide § 10.

(d.) It may be made payable either to bearer or to order. It is liable to a stamp-duty of one penny, which may be denoted by an adhesive stamp, vide Stamp Act, 33 & 34 Vict. c. 97, $$ 50 and 54 (2 and 3), Appendix. A postdated cheque is not objectionable under the Stamp Act, if not sued on till its date, Misa v. Currie, 1 Appeal Cases, 554. It cannot be drawn for less than 20s. in Scotland, 8 & 9 Vict. c. 38, § 16; but it may be so drawn in England.

A banker is bound by his contract with his customer

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