2. That the consideration for which it was given is infected with illegality; or, 3. That the bill was lost or stolen. § If the defendant makes out a primâ facie case, impugning the bill or note, as above, then the plaintiff is at once put to prove that he, or those through whom he claims, have given consideration for the document. Illustration. Bidwell, who was insolvent, presented a petition to the Bankruptcy Court, and gave a promissory note to E. C. Bailey, one of his creditors, in consideration of the latter agreeing not to oppose the petition. The consideration was, of course, illegal. E. C. Bailey indorsed the note to J. Bailey, who sued Bidwell thereon. Bidwell at the trial having given proof of the abovementioned facts, it was held that, thereupon, the onus of proving that he had given value for the note was transferred to the plaintiff. (a) § Even if the plaintiff proves that he gave consideration for the bill, or note, he will, nevertheless, not be entitled to recover, if he took it with notice of the infirmity of title, with which the bill, or note, was affected. § The onus of proving that the plaintiff had such notice lies on the defendant.(b) § In order, therefore, to be the lawful holder of a negotiable instrument, and so entitled to recover upon it, the plaintiff must be— 1. A holder for value; and 2. Without notice of any infirmity in the title to the bill or note. (a) Bailey v. Bidwell, 13 M. & W. 73. And if he is a holder for value, without notice, his title is unimpeachable. § NOTICE OF SUCH INFIRMITY OF TITLE MAY BE 1. Direct. 2. Implied. Illustration. John Gomershall and James Francis Gomershall carried on business at Dewsbury, and they, and one Searby, in London, established a system of making accommodation bills, by drawing bills on each other, and getting them discounted. Both they and Searby knew they were one and all insolvent, and were contemplating bankruptcy. Some of these bills, amounting to £1,727, were bought by Jones for £200. He knew at the time that the Gomershalls were in embarrassed circumstances. He also knew that certain persons could give him full information as to their affairs, but he made no enquiries of them. On the Gomershalls becoming bankrupt, Jones sought to prove against their estate for the £1,727, but his proof was objected to by the trustee in bankruptcy. It was held, that the objection was a valid one, and Jones should only be allowed to prove for the £200, the sum actually paid by him for the bills; and that wilful abstinence from inquiry, where the holder has a suspicion that the bill may not be quite right, is equivalent to notice.(c) PRESENTMENT FOR ACCEPTANCE. A bill may be drawn payable 1. On demand, or at sight (which are the same).(d) (c) Jones v. Gordon, 2 App. Ca. 616. (d) 45 & 46 Vict. c. 61, s. 10 (1). 2. A certain time after sight. 3. A certain time after date. § When the drawer has delivered a bill to the payee, the latter may either 1. Put the bill in circulation, or 2. Present it for acceptance to the drawee, or his authorized agent. § If the payee has put it into circulation, the holder may present it for acceptance. § A bill should be presented for acceptance without delay. For, if accepted, the holder obtains the additional security of the acceptor. If not accepted, the antecedent parties become at once liable upon it. § If a bill be drawn, payable on demand, or at a certain time after sight, it must be presented for acceptance within a reasonable time.(a) ACCEPTANCE. § This is a promise by the drawee to pay the bill when due. It must be 1. In writing on the bill.(b) 2. Signed.(6) 3. By the drawee or his authorized agent.(b) 4. Delivered or handed over to the party presenting it. [NOTE. Until handed over, the acceptance may be cancelled.(c)] 1. A bill may be accepted at any time, so long as it is in existence. 2. If accepted before it is filled up, it will be for any amount covered by the ad valorem stamp. (a) As to what is "reasonable time," see 45 & 46 Vict. c. 61, s. 40 (3). (b) 45 & 46 Vict. c. 61, s. 21. (c) See Van Diemens Bank v. Victoria Bank, L. R. 2 P. C. 28. 3. If after the date at which it becomes payable it becomes payable by the acceptor on demand. 4. An acceptance may be (i) Conditional, as "accepted, payable on giving up the bill of lading." (ii) Partial, as when the bill is drawn, say for £100, and it is accepted to the extent of £80.(d) 5. Waiver. Contrary to the law applicable to contracts generally, an acceptance may be waived after breach, merely by an express renunciation of his claim by the holder.(e) PRESENTMENT FOR PAYMENT. 1. May be made, either to the acceptor himself or to his duly authorized agent for payment. 2. If a bill of exchange is accepted, payable at a particular place only, presentments for payment must be made at that place in order to charge the acceptor.(f) 3. If the acceptor or the drawer has given even a general direction as to the particular place at which the bill will be payable, presentment must be made at that place, in order to charge the drawer or the indorser.(g) 1. Three days of grace are allowed by the custom of merchants beyond the date when the bill or note is actually due. Unless it is payable on demand. [Thus a bill drawn on January 1, at three months, will be payable, counting the days of grace, on April 4th.] 5. Bills or notes payable on demand must be presented for payment within "a reasonable time." 6. What is "a reasonable time," is a question of law for the court, depending on the facts of each case.(h) (d) 45 & 46 Vict. c. 61, s. 19. 7. Promissory notes, payable on demand, are often given as a continuing security. Interest is sometimes regularly paid on them, from time to time. Bank notes are intended to circulate as long as possible, so that, in such cases, a reasonable time" may be a period of considerable duration.(a) 8. If a bill or note be not duly presented for payment, all the antecedent parties are discharged, except the acceptor. [For delay in presenting for payment may work an injury upon the drawer and indorsers, by deterring them from dealing with the acceptor until it is too late. And it is only reasonable that the party, by whose negligence they are put in a worse position, should lose his remedy against them.] SUSPENSION. § Where a bill is renewed, that is, where a fresh bill is given in substitution of the original one, the debt is suspended until the substituted bill is matured.(b) [NOTE. The result of this is, that all the indorsers are discharged ;(c) they being in the position of sureties for the principal debtor, the acceptor, to whom time has been given by the holder renewing the bill. (See ante, p. 96.)] NOTING AND PROTESTING OF FOREIGN BILLS. 1. Noting is a minute, made by a public notary, on a foreign bill (the acceptance or payment of which has been refused), of the date of dishonour. § It should be made on the day of dishonour.(d) § It is a preliminary step to protesting. (a) Chartered Mercantile Bank of India v. Dickson, L. R. 3 P. C. 574. (b) Kendrick v. Lomax, 2 C. & J. 405. (c) Gould v. Robson, 8 East, 576. (d) 45 & 46 Vict. c. 61, s. 51. |