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$7.

What bills
are negotiable.

Jacques, L. R. 1, Q. B. 376; Thomson v. Philp, 25th Mar. 1867, 5 M. 344.

(d.) A bill payable to the unnamed holder of an office is not a warrant for summary diligence, Fraser v. Bannerman, 21st June, 1853, 15 D. 756, and vide note on § 98.

(e.) By § 54 the acceptor is precluded from denying to a holder, in due course, the existence of the payee. This clause, however, renders it unnecessary for any holder to show that the acceptor knew that the payee was a fictitious person. In England, it was decided that the onerous indorsee of a bill drawn payable to a fictitious person, and purporting to be indorsed by him, was entitled to sue an acceptor, who knew that the payee was a fictitious person, but not otherwise. No indorsement of such a bill is necessary. It is negotiated by delivery, vide § 31 (2); but if there be no indorsement, or if the genuineness of the indorsement be challenged, the holder must prove that the payee is a fictitious or non-existing person.

8. (1.) When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but is not negotiable (a).

(2.) A negotiable bill may be payable either to

order or to bearer.

(3.) 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 (b).

(4.) A bill is payable to order (c) which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer, or indicating an intention that it should not be transferable.

(5.) Where a bill, either originally or by indorse

ment, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option.

(a.) This section enacts that a bill shall be negotiable except
where it contains words-(1) prohibiting transfer, or (2)
indicating an intention that it should not be transferable.
The law of England, differing from the law of Scotland, held
that no bill was negotiable which was not drawn payable to
order. The effect of this rule was to deprive a bill, through
an accidental omission, of one of its chief characteristics, and
necessarily led to inconvenience in the mercantile intercourse
of the two countries. The adoption of the Scotch rule assimi-
lates the law of England on this point to that of most other
mercantile countries. The omission of the words "
or order "
is, therefore, not of itself an indication that the parties did
not intend the bill to be not negotiable. Transfer of a bill
is prohibited where it is made payable to A. B. only; and
where a bill bears to be payable to A. B. for my use, or A. B.
for collection, it is held to be an indication that the bill is
not negotiable. If a bill be drawn payable to A. B. or order
for collection, the payee may indorse it; but the indorsee
takes the bill subject to the obligation to account to the
drawer for the amount received by him when the bill is paid,
vide § 35. For the rules relating to the negotiation of bills,
and the rights acquired by the holders of bills, vide §§ 31-38.

(b.) A bill payable to A. B. or bearer is payable to bearer,
and the name of the payee may be disregarded. Apparently,
the holder of a bill with a blank indorsement, followed by
special indorsements, may cancel the special indorsements, and
the bill is then payable to bearer, I. Bell's Com. 428, vide
§ 34.

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(c.) A bill payable to order may be expressed thus,—" Pay
to A. B.;
"Pay to A. B. on order;" or, "Pay to A. B.'s
order." The effect of these three forms is now the same, and

in whichever way a bill may be expressed, the payee may sue
in his own name for payment, or may negotiate the bill by
indorsing it.

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$9.

9. (1.) The sum payable by a bill is a sum certain

Sum payable. Within the meaning of this Act, although it is required

to be paid

(a.) With interest (a).

(b.) By stated instalments (b).

(c.) By stated instalments, with a provision that upon default in payment of any instalment the whole shall become due.

(d.) According to an indicated rate of exchange or according to a rate of exchange to be ascertained as directed by the bill (c).

(2.) Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable (d).

(3.) Where a bill is expressed to be payable with interest, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated, from the issue thereof (e).

(a.) Where no rate of interest is named or legal interest is mentioned, five per cent. per annum is implied in inland bills, but a higher rate will be allowed in the case of bills payable in a foreign country, where a higher rate of interest is held to be meant by legal interest, 17 & 18 Vict. c. 90, § 3, Fife v. Ferguson, 25th May, 1837, 16 Sh. 1038, 4th May, 1841, 2 Rob. Ap. 267. The laws against usury are repealed by 17 & 18 Vict. c. 90, § 1. This section scems to apply only where the amount of interest is either expressed or implied to be at a fixed rate, and not where the stipulation for interest is qualified by words which render the amount of interest payable uncertain. The amount payable is to be ascertained from the bill itself; but, apparently, a sum payable, with bank interest or at a rate of interest to be

ascertained extraneously, is not a sum certain in the sense of the Act. In Morgan v. Morgan, 20th Jan. 1866, 4 M. 321, it was held that a promise to pay a sum "with interest at the rate which shall be paid on money lent upon first heritable security," was not a note, as the sum payable could not be ascertained from the writing itself; and in Tennent v. Crawfurd, 12th Jan. 1878, 5 R. 435, the same rule was applied where a sum was to be paid with bank interest. Where interest at a fixed rate was promised, the sums payable were held to be certain and the writings to be notes, Vallance v. Forbes, 27th June, 1879, 6 R. 1099.

(b.) Vide Macfarlane v. Johnston, 11th June, 1864, 2 M. 1210; Davies v. Wilkinson; 2 Perry and Davidson, 256.

(c.) Where no rate is indicated, the amount payable is calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is payable, vide 72 (4).

(d.) The sum payable may be expressed either in words or in figures. If the bill originally only bore the amount in figures, and a different sum in words be filled in, it is competent to prove by parole, vide § 100, that the bill as issued did not contain the words which have been added, and that the addition was not made with the assent of the person sued on the bill, vide § 64. If, however, the issuer of a bill has been guilty of negligence-e.g., by leaving a blank where the sum in words has been filled in, he will be liable in a question with a holder in due course for the sum so filled in, Grahame V. Gillespie & Co., 27th Jan. 1795, M. 1453; Pagan v. Hunter & Wylie, 19th June, 1793, M. 1660. Where, however, the sum has been filled in in such a manner as to excite suspicion, the bill will be avoided even in the hands of a holder in due course. The variance between the words and the figures, may amount to notice to a holder that there has been an unauthorised alteration.

Where there is an ambiguity in the sum as written, the figures may be looked at to discover what the true sum in words is, Gordon v. Sloss, 3rd June, 1848, 10 D. 1129.

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$9.

Bill payable on demand.

(e.) The date of issue may be proved by parole, vide § 100, if the bill be undated; but if a wrong date has been filled in, and the bill comes into the hands of a holder in due course, interest will be due from the date which the bill bears, vide $12 and 20. If the bill has been issued antedated or postdated, interest runs from the date it bears, vide § 13 (2).

10. (1.) A bill is payable on demand (a).

(a.) Which is expressed to be payable on demand, or at sight, or on presentation; or

(b.) In which no time for payment is expressed.

(2.) Where a bill is accepted or indorsed when it is overdue (b), it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand.

(a.) A bill is payable on demand, although it be postdated, but payment cannot be demanded until after the date it bears, Gatty v. Fry, 2 Ex. Div. 265. Presentment for payment of a bill payable on demand can only be made on a business day, vide § 45 (3). Non-business days are Sunday, Good Friday, Christmas Day, Bank Holidays under the Bank Holiday's Act, 1871, and days appointed by Royal Proclamation as a public fast or thanksgiving day, vide § 92. There are no days of grace in the case of bills payable on demand.

(b.) A bill not payable on demand is overdue on the expiry of the last days of grace, vide § 14. If not then presented, the drawer and indorsers are in the general case discharged, vide § 45, and this clause does not reimpose any liability upon them. To render the indorser, who has negotiated the bill after it became overdue, liable in recourse, it is sufficient that the bill be presented for payment within a reasonable time after its indorsement, vide § 45 (2). The acceptor by his acceptance binds himself to pay on demand, unless he has qualified his acceptance, vide § 54. This clause does not make

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