Henry Dunning Macleod.

The theory and practice of banking online

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Q., 258

347. If the acceptor or any party is discharged by operation
of law, as by the Bankrupt Act, it does not discharge the sureties

Brovme v. Garr, 7 Bing., 508. Langdale v. Parry, 2 D. & B.,
337. Nadin v. Battie, 5 Bast., 147

348. So, if the creditor expressly agrees with the principal
debtor that the sureties shall not be discharged, they are not

349. If the creditor agrees with the principal debtor to
give time to the surety, the surety is discharged



586 THEOEY AND PRACTICE OF BANKING

Oriental Financial Go. v. Overend, Gurney & Co., L. E., 17 Ch.,
Ap. 142

On Foreign Bills, and Bills drawn in Sets, Parts, or Copies

350.* 1. Where a bill is drawn in a set, each part of the set
being numbered, and containing a reference to the other parts,
the whole of the parts constitute one bill

2. Where the holder of a set indorses two or more parts to
different persons, he is liable on every such part, and every in-
dorser subsequent to him is liable on the part he has himself
indorsed, as if the said parts were separate bills

3. Where two or more parts of a set are negotiated to different
holders in due course, the holder whose title first accrues is as
between such holders deemed the true owner of the bill; but
nothing in this sub-section shall affect the rights of a person who
in due course accepts or pays the part first presented to him

4. The acceptance may be written on any part, and it must
be written on one part only

If the drawee accepts more than one part, and such accepted
parts get into the hands of different holders in due course, he is
liable on every such part as if it were a separate bill

5. When the acceptor of a bill drawn in a set pays it without
requiring the part bearing his acceptance to be delivered up to
him, and that part at maturity is outstanding in the hands of a
holder in due course, he is liable to the holder thereof

6. Subject to the preceding rules, where any one part of a bill
drawn in a set is discharged by payment, or otherwise, the whole
bill is discharged

351. Every transferor ought to deliver over to his trans-
feree all the parts in his possession: but if a subsequent transferee
takes one part from his transferor without demanding the re-
maining parts, he cannot sue an indorser prior to his own who
has not got them

Pinard v. Klockman, 3 B. & S., 388

353. If the drawee pays one part of the bill with a forged
indorsement, he is still liable to pay the real holder of another
part

Cheap Y. Barley, 3 T. E., 127



LAW OF CREDIT, BILLS AND NOTES 587

_ 353. If a foreign bill is refused acceptance or payment it

IS necessary, in order to charge the drawer, to have it protested (a)

But a protest is not necessary on a foreign promissory note (6)

(a) Borough v. Perkins, 2 Ld. Eaym., 993. Rogers v. Stephens,

2 T. E., 713. Gale v. WaUh, 5 T. E., 329. Orr v. Maginnis, 7

East., 359. Vandewall v. Tyrrell, M. & Mai., 87. Geralopulo v

WieUr, 10 C. B., 690

(6) Bonar v. Mitchell, 5 Ex., 415

Conflict of Laws

354.* Where a bill drawn in one country is negotiated,
accepted, or payable in another, the rights, duties, and liabilities
of the parties thereto are determined as follows :

1. The validity of a bill as regards requisites in form is de-
termined by the law of the place of issue, and the validity as
regards requisites in form of the supervening contracts, such as
acceptance, or indorsement, or acceptance supra protest, is de-
termined by the law of the place where such contract was made

Provided that —

(a) Where a bill is issued out of the United Kingdom it is not
invalid by reason only that it is not stamped in accordance with
the law of the place of issue :

(&) Where a bill, issued out of the United Kingdom, conforms,
as regards requisites in form, to the law of the United Kingdom,
it may, for the purpose of enforcing payment thereof, be treated
as valid as between all persons who negotiate, hold, or become
parties to it in the United Kingdom

2. Subject to the provisions of this Act, the interpretation of
the drawing, indorsement, acceptance, or acceptance supra protest
of a bill, is determined by the law of the place where such contract
is made

Provided that where an inland bill is indorsed in a foreign
country, the indorsement shall, as regards the payer, be inter-
preted according to the law of the United Kingdom

3. The duties of the holder with respect to presentment for
acceptance or payment, and the necessity for or sufficiency of a
protest, or notice of dishonour, or otherwise, are determined by
the law of the place where the act is done or the bill is dis-
honoured



588 THEORY AND PRACTICE OF BANKING

4. Where a bill is drawn out of, but payable, in the United
Kingdom, and the sum payable is not expressed in the currency
of the United Kingdom, 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

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

Supplementary

355" A thing is deemed to be done in good faith, within
the meaning of this Act, where it is in fact done honestly, whether
it is done negligently or not

356.* 1. Where, by this Act, any instrument or writing is
required to be signed by any person, it is not necessary that he
should sign it with his own hand, but it is suflBcient if his signa-
ture is wi'itten thereon by some other person by or under his
authority

2. In the case of a corporation, where, by this Act, any in-
strument or writing is required to be signed, it is sufficient if the
instrument or writing be sealed with the corporate seal

But nothing in this section shall be construed as requiring the
bill or note of a corporation to be under seal

357.* Where, by this Act, the time limited for doing any
act or thing is less than three days, in reckoning time, non-
business days are excluded

" Non-business days," for the purposes of this Act, mean —

(a) Sunday, Good Friday, Christmas Day :

(Jb) A bank holiday, under the Bank HoUdays Act, 1871, or
Acts amending it :

(c) A day appointed by Royal Proclamation as a public fast
or thanksgiving day :

Any other day is a business day

358.* For the purposes of this Act, where a bill or note is
required to be protested within a specified time, or before some



LAW OF CREDIT, BILLS AND NOTES 589

further proceeding is taken, it is sufficient that the bill has been
noted for protest before the expiration of the specihed time, or the
taking of the proceeding ; and the formal protest may be extended
at any time thereafter as of the date of the noting

359.* Where a dishonoured bill or note is authorised or
required to be protested, and the services of a notary cannot be
obtained at the place where the bill is dishonoured, any house-
holder or substantial resident of the place may, in the presence
of two witnesses, give a certificate, signed by them, attesting the
dishonour of the bill, and the certificate shall, in all respects,
operate as if it were a formal protest of the bill

The form given in Schedule 1 to this Act may be used with
necessary modifications, and, if used, shall be sufficient

360.* The provisions of this Act as to crossed cheques shall
apply to a warrant for payment of dividend

361.* The enactments mentioned in the second Schedule to
this Act are hereby repealed as from the commencement of this
Act to the extent in that Schedule mentioned

Provided that such repeal shall not affect anything done or
suffered, or any right, title, or interest acquired or accrued before
the commencement of this Act, or any legal proceeding or remedy
in respect of any such thing, right, title, or interest

362.* 1 The rules in bankruptcy relating to bills of ex-
change, promissory notes, and cheques, shall continue to apply
thereto, notwithstanding anything in this Act contained

2. The rules of common law including the law merchant, save
in so far as they are inconsistent with the express provisions of
this Act, shall continue to apply to bills of exchange, promissory
notes, and cheques

3. Nothing in this Act, or in any repeal affected thereby, shall

Siffcct

(a) The provisions of the Stamp Act, 1870, or Acts amending
it or any law or enactment for the time being in force relating to

^Ih) The provisions of the Companies' Act, 1862, or Acts



590 THEORY AND PRACTICE OF BANKING

amending it, or any Act relating to Joint Stock Banks, or
Companies

(c) The provisions of any Act relating to or confirming the
privileges of the Bank of England, or the Bank of Ireland,
respectively

(d) The validity of any usage relating to dividend warrants,
or the indorsements thereof

363.* Nothing in this Act, or in any repeal effected thereby,
shall extend or restrict, or in any way alter or affect the law and
practice in Scotland in regard to summary diligence

364.* Where any Act or document refers to any enactment
repealed by this Act, the Act or document shall be construed, and
shall operate, as if it referred to the corresponding provisions of
this Act

365.* In any judicial proceeding in Scotland, any fact
relating to a bill of exchange, bank cheque, or promissory note,
which is relevant to any question of liabihty thereon, may be
proved by parole evidence : Provided that this enactment shall
not in any way affect the existing law and practice whereby the
party who is, according to the tenour of any bill of exchange,
bank cheque, or promissory note, debtor to the holder in the
amount thereof, may be required, as a condition of obtaining a
sist of diligence, or suspension of a charge, or threatened charge,
to make such consignation, or to find such caution, as the Court
or Judge before whom the cause is depending may require

This section shall not apply to any case where the bill of
exchange, bank cheque, or promissory note has undergone the
sexennial prescription

On the Forgery of Bills and Notes

366. Forgery is defined to be the making, altering, or mis-
applying any writing with intent to defraud

Forging bills or notes, or any part of them, as well as uttering
them, knowing them to be forged, are each felonies, punishable
by penal servitude for life, or for any term not less than five (1)



LAW OF CREDIT, BILLS AND NOTES 591

years— or by imprisonment for any term not exceeding two years,
with or without hard labour, and with or without solitary con-
finement

24 & 25 Yict. (1861), c. 98, s. 22

(1) 27 & 28 Viot. (1864), c. 47, s. 2

367. If several persons make different parts of the instru.
ment, they are each chargeable with forging the entire instrument,
though they may be ignorant of each other's proceedings

Bex V. Bingley, E. & E., C. C, 446. Rex v. Kirkwood, 1 Mood.,
C. C, 304. Bex v. Bade, 1 Mood., C. C, 307

368. The offence of forgery is complete without any pub-
lication or uttering

Elliott's Case, 1 Leach, C. C, 175. Crocker's Case, E. & B.,
C. C, 97

369. Altering the date of a Bill of Exchange after ac-
ceptance (a) : altering the place where a note is made payable
(&) : or altering the sum for which a bill or note is made pay-
able (c), are forgeries

(a) Master v. Miller, 4 T. E., 320. Bex v. Atkinson, 7 C. & P.,
699

(6) Bex V. Treble, 2 Taunt., 328

(c) Bex V. Fast, E. & E., 0. & C, 101

370. If a person is authorised to fill up a bill or note with
one sum, it is a forgery to fill it up with a larger sum, or even a
less sum, and apply the instrument to purposes different from his
instructions

Bex V. KarJ, Mood., C. C, 486. The Queen v. Sateman, 1 Cox,
C. C, 186. The -Queen v. Wilson, 1 Den., C. C, 284

371. To write one's own name, with the intention that it
should pass as the signature of another person of the same name,
is forgery

Mead v. Young, 4 T. E., 28. Bex v. Farkes, 2 Leaeh, 0. C, 775

372 . A person having obtained genuine signatures, wrote
above one a promissory note ; and on the other side of the other



592 THEORY AND PEACTICE OF BANKING

a promissory note payable to that person, and so changed the
signature into an indorsement ; was convicted of forging the note
and the indorsement

Bex V. Hales, 17 State Tr., 161, 209, 229

373. Using the genuine signature of one person in any
way, so as to make it appear that it is the signature of another
person of the same name, is forgery

Beg. V. Blenkinsop, 1 Den., C. C, 276. Beg. v. Mitchell, 1 Den.,
C. C, 282. Beg. v. Bogers, 8 C. & P., 649. Beg. v. Parke, 1 Cox.,
C. C, 4

374. Discounting bills, or drawing drafts with fictitious
names on them, is forgery

Dunn's Case, 1 Leach, 57. Botland's Case, 1 Leaeli, 83. Lockett's
Case, 1 Leaoh, 94. Taft's Case, 1 Leach, 172. Shephard's Case, 1
Leach, 226. Beg. v. Wardell, 3 F. & F., 82

375. Signing a bill or note by procuration for another
person fraudulently, and without lawful authority ; and uttering
such a bill knowing that it is so signed by procuration, without
lawful authority, is felony, punishable with penal servitude for
not more than fourteen and not less than five years : or imprison-
ment for not more than two years, and with or without hard
labour and solitary confinement

24 & 25 Yiot. (1864), c. 98, s. 24

376.* Subject to the provisions of this Act, where a sig-
nature on a bill is forged, or placed thereon without the authority
of the person whose signature it purports to be, the forged or
unauthorised signature is wholly inoperative, and no right to
retain the bill, or to give a discharge therefor, or to enforce pay-
ment thereof against any party thereto, can be acquired through
or under that signature, unless the party against whom it is
sought to retain or enforce payment of the bill is precluded from
setting up the forgery or want of authority

Provided that nothing in this section shall affect the ratifi-
cation of an unauthorised signature not amounting to a forgery



LAW OF CREDIT, BILLS AND NOTES 593

377.* A debtor who pays a holder who derives his title through
forgery is not discharged

In Rolarts v. Tucker (16 Q. B., 575), Maulb, J., said, that
in his opinion if a banker is called upon to pay an acceptance of
his customer's, bearing several indorsements, he is entitled to
reasonable time to inquire into their genuineness, and the title of
the presenter

A banker who issues cheques to his customer, payable to
order, is not bound to inquire into the genuineness of the payee's
indorsement

But any person who obtains the money from the banker by
means of a forged indorsement is liable to the true owner of the
cheque

Bobbett V. Pinckett, Ex. Div., May 5, 1876

378. A person who discounts a forged bill or note may
recover the money back

Jones V. Ryde, 5 Taunt., 488. Bruce v. Bruce, 5 Taunt., 495.
Gurney v. Womersly, E. & B., 133. Wilkinson v. Johnson, 8 B. &
C, 428

379. Where bankers paid a forged acceptance of their cus-
tomer, and did not discover the mistake the same day, they were
held not entitled to deinand it back

In Cocks V. Masterman, the Court expressly refrained from
giving an opinion as to whether they might have done so if the
demand had been made the same day

Smith V. Mercer, 6 Taunt., 76. Cocks v. Masterman, 9 B. & C,
902. Mather v. Lord Maidstone, C. B., 273

These seem to be the chief points relating to bills and notes,
which occur in daily practice, and are most necessary to be known



<|lnir noto is ham i}^& long bag's ixiaxk



A. P. ELOSDELL, T4YL0E & Oo., Piluters, 26, (Jarlick Hill, Oiumon Straet, Lonaon, E,0.






Online LibraryHenry Dunning MacleodThe theory and practice of banking → online text (page 57 of 57)