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such bona fide holder, however fraudulent or even felonious as against him, the transfer may have been.1 Holder we have already seen (Sec. 8) must be a person entitled in his own name to the possession of the negotiable instrument, and to receive or recover monies thereon, from the parties thereto, so that under the Act, if the person who makes or completes the instrument, be not a holder within Sec. 8 the person who signs will not be liable. This provision has been so worded, to prevent fraud and to avoid such a case as where a stranger by fraud fills up a blank acceptance.2 Where the defendant had been induced to put his name to the back of a bill of exchange, by the fraudulent representation, that he was signing a guarantee, in an action against him as an indorser, it was held, that as his signature, was obtained upon a fraudulent representation as to the nature of the instrument he was signing, and without his knowing, it was a bill of exchange, and as he had not been guilty of any negligence in so signing, he was not liable. He never intended to put his signature to any instrument which then was or which might become negotiable. He was deceived not merely as to the legal effect, but as to the actual contents of the document.3 The effect of these cases is that no action can be brought on an inchoate instrument unless it was intended to be issued (negotiated), and no authority to complete it can be implied, unless the issue was intended.
21. In a promissory note or bill of exchange the "after expressions "at sight" and "on presentment" mean on demand. The expression "after sight" means, in a promissory note, after presentment for sight, and in a bill of exchange, after acceptance, or noting for non-acceptance, or protest for non-acceptance.
The first clause of this section is taken from 34 and 35, Vict. c. 74, s. 2.
The instruments drawn or made, mentioned in the first
1 Watson v. Russell, 3 B. & S.
2 Schultz v. Astley, 2 Bing. N.
most extent of the law; see also L. & S. W. Bk. v. Wentworth, 5 Exch. D. 96.
3 Foster v. Mackinnon, L. R. 4 C. P. 704.
clause, have the effect of being payable on demand,' but differ from those in which no time is mentioned, or which are expressly made payable on demand, inasmuch as there must, in their case, be an actual demand and presentment, whereas in the latter, though it is usual to make a demand, there is no legal obligation to do so, and a holder's right to recover thereon would not be affected by the omission to do so, for it is the debtor's legal duty to seek out his creditor. Sec. 81 is not inconsistent with this, for it is only when demand is made the section applies. It seems doubtful what stamp would be required; it is not made payable on demand, though the effect of certain expressions is to make it so, it would therefore, I think, require the higher stamp.2 Instruments so drawn are not entitled to 'days of grace.' As to the latter portion of the section, with reference to a bill of exchange, the presentment must appear on the instrument itself, as by acceptance, or upon a paper annexed thereto when noted for non-acceptance, or by a separate paper when protested.3
22. The maturity of a promissory note or bill of Maturity. exchange is the date at which it falls due.
Every promissory note or bill of exchange which
is not expressed to be payable on demand, at sight
or on presentment is at maturity on the third day Days of grace. after the day on which it is expressed to be payable.
Days of grace were omitted in the draft bill, Mr. Maine saying with reference to them: "In making this change, we have followed the course which is now adopted almost everywhere in continental Europe, and which we believe to be, in accordance with the general opinion of the mercantile classes. Greater simplicity is thereby introduced, and an embarrassing distinction between instruments payable on demand and at sight is got rid of. But they were introduced again by the first Select Committee who considered the draft bill.5
1 Van Wart v. Woolley, 3 B. & C. 439; S. C. Ry. & M. 4; 5 D. & Ry. 374; 1 Moo. & M. 520.
2 Stamp Act, Sched. I, Art. 11, cl. (b), (App.)
3 Secs. 99, 101, Campbell v.
French, 6 T. R. 200; S. C. 2 H.
+ Statement of objects and
5 Report of Select Committee, 10th October 1877.
Calculating maturity of bill or note payable so many months after date or sight.
Brooke says of them,' By the custom of merchants, whenever a bill is drawn payable at a certain number of days, months or other period after sight, or when a bill or note is payable at a certain time after date, or on a particular date mentioned in it, the drawer or maker cannot be required to pay it until the third day afterwards. This additional period, being originally considered as a boon or indulgence is called the days of grace, and they are reckoned exclusively of the day on which the bill would otherwise fall due." He mentions France, Germany and Italy as countries where no days of grace are allowed. For a list of the different periods allowed as days of grace in different places. As to a day of grace falling on a holiday, see notes to Sec. 25.
23. In calculating the date at which a promissory note or bill of exchange, made payable a stated number of months after date or after sight, or after a certain event, is at maturity, the period stated shall be held to terminate on the day of the month which corresponds with the day on which the instrument is dated, or presented for acceptance or sight, or noted for non-acceptance, or protested for nonacceptance, or the event happens, or, where the instrument is a bill of exchange made payable a stated number of months after sight and has been accepted for honour, with the day on which it was so accepted. If the month in which the period would terminate has no corresponding day, the period shall be held to terminate on the last day of such month.
(a). A negotiable instrument, dated 29th January, 1878, is made payable at one month after date. The instrument is at maturity on the third day after the 28th February, 1878.
1 Brooke's office of Notary, 4th ed., p. 123.
2 See Byles on Bills, 13th ed., p. 209; Chitty on Bills by Russell, 11th ed., p. 266.
(b). A negotiable instrument, dated 30th August, 1878, is made payable three months after date. The instrument is at maturity on the 3rd December, 1878.
(c). A promissory note or bill of exchange, dated 31st August, 1878, is made payable three months after date. The instrument is at maturity on the 3rd December, 1878.
By the General Clauses Act, year and month, shall respectively mean a year and month reckoned according to the British Calendar, and by the Limitation Act,2 all instruments shall for the purposes of the Act, be deemed to be made with reference to the Gregorian Calendar, and one of the illustration given is (a) "a Hindoo makes a promissory note bearing a native date only, and payable four months after date. The period of limitation, applicable to a suit on the note runs from the expiry of four months after date computed according to the Gregorian Calendar."3
As to a foreign bill, see Sec. 134 under which the maturity of the instrument will have to be determined.
or note payable
after date or
24. In calculating the date at which a promis- Calculating sory note or bill of exchange made payable a certain maturity of bill number of days after date or after sight or after a somany months certain event is at maturity, the day of the date, or of presentment for acceptance or sight, or of protest for non-acceptance, or on which the event happens, shall be excluded.
The cases noted are those upon which the rule that, the day of the date, or presentment, &c., shall be excluded is founded.*
maturity is a
25. When the day on which a promissory note When day of or bill of exchange is at maturity is a public holiday, holiday. the instrument shall be deemed to be due on the next preceding business day.
1 Act I of 1868, sec. 2, cl. (4). 2 Act XV of 1877, Sec. 25. 3 Nilkanth v. Dattatraya, I. L. R. 4 Bom. 103; Almas Banee v. Mahomed Ruja, I. L. R. 6 Cal.
▲ Lester v. Garland, 15 Ves. 248; Webb v. Fairmaner, 3 M. & W. 473; Pellew v. Inhabitants of Wonford, 9 B. & C. 134.
Explanation. The expression "public holiday" includes Sundays: New-Year's day, Christmas day: if either of such days falls on a Sunday, the next following Monday: Good-Friday; and any other day declared by the Local Government, by notification in the official Gazette, to be a public holiday.
The provision making a promissory note or bill of exchange, which falls due on a public holiday, payable on the previous day, differs from the English law, which makes them payable on the next succeeding business day.' The Select Committee in their report, 27th May 1878, say, that they have made this provision in accordance with the existing practice of the country. The bill as introduced, made the law similar to that of England. But even now in England, bills and notes falling due on Sundays, Christmas day or Good Friday, become payable the preceding day. The Bank holidays in England under the above Act are : Easter Monday, Monday in Whitsun week, the first Monday in August, the 26th of December, or if it be a Sunday, then the 27th; and by Sec. 4 of the Act it is provided special days may, by Royal Proclamation, be appointed to be observed as Bank holidays, which as regards bill of exchange and promissory note becoming payable, shall be deemed Bank holidays within the Act. Under this section no native holidays are public holidays, unless specially notified in the Local Gazette.
1 34 Vict. c. 17.