Page:The American Cyclopædia (1879) Volume VII.djvu/30

 22 EXCHANGE (BILL OF) an easy transmission of wealth and its safe keeping in foreign countries almost a necessity. Of course the bills drawn by them were upon persons of their own race. The negotiation of bills of exchange by law can be traced back about 4|- centuries, the earliest being an or- dinance of the city of Barcelona in 1394 re- specting the acceptance of bills of exchange. An edict of Louis XL in 1462 is the first notice of the subject in the laws of France. (See Kent's " Commentaries," vol. iii., p. 72, note.) In form, a bill of exchange is an order or re- quest addressed by one person to another di- recting the payment of money to a third person. The first is called the drawer ; the second is the drawee until the bill has been presented and accepted, and then he is called the ac- ceptor; the third is the payee. But some- fimes the bill passes through several hands, which may be either by successive indorse- ments specifying to whom payment is to be made, or by what is called an indorsement in blank, by which is meant that the payee, or the subsequent holder to whom the bill has been indorsed, merely writes his own name on the bill, which is equivalent to making it payable to Dearer. The most important incident of a bill of exchange is its negotiability, that is to say, facility of transfer from one person to another. For this purpose it is essential that the engagement of the several parties, whether drawer, acceptor, or indorser, should be dis- entangled from all matters not appearing upon the face of the bill. This, therefore, is the general rule, subject to some exceptions which will be presently mentioned. Equally neces- sary is it that the bill itself should by its terms involve no uncertain contingency, as to depend upon an event that may not happen, or upon some condition which may be the subject of controversy. Hence it has been uniformly held that it must be payable at a fixed time, that is to say, at some period which is certain ; but it may be so far contingent as to depend upon an event which must inevitably happen, though the precise time cannot be specified. Thus a bill may be payable a certain time after the death of a particular person ; but it would not be a good bill if made payable after the arrival of a certain vessel. The one event is certain to happen at some period, though it may be remote ; the other may not happen at all. Again, a bill of exchange must be ex- pressed to be for the payment of money only, and would not be good if payable in cattle or other species of property, nor even if made payable in bank bills, though it is held in some cases that if payable in currency it is a good bill, as this implies specie or its equivalent. "When it is said that a bill is not good if sub- ject to any contingency or payable otherwise than in money, it is intended merely that it is not negotiable with the legal effect which ap- pertains to a bill drawn in the prescribed form. It may nevertheless constitute a valid contract between the original parties, and may even be transferred so as to vest in the assignee the same right which the payee would have had against the drawer or acceptor. The transfer in such case will, however, be subject to the same rules that apply to other personal con- tracts usually denominated choses in action. In other words, the transfer is itself a contract ; and although it is not necessary that it should be in writing, yet it derives no aid from mer- cantile usage respecting the indorsement of bills. The delivery of a note not negotiable may give an ownership if so designed, and this is so in respect to a bond or other contract. But by the common law there was this limita- tion, that the right of the holder could be en- forced only in the name of the original obligee,, it being a rule that a chose in action was not assignable. In equity, however, the right of the assignee was recognized, and so to a certain extent it came to be in the common law courts, the formality of using the name of the assignor in a suit brought upon such chose in action be- ing all that is retained of the old strictness. In most of the states even this has been abro- gated, and the real party in interest, by which is meant whoever has the actual ownership, may be the party to the action. Again, such trans- fer confers no greater right than the original payee or obligee had, and is subject to any de- fence, legal or equitable, which the other par- ties had against such payee or obligee prior to actual notice of the assignment, or what in law would be tantamount thereto. The bill, or rather contract, as it should be termed in the case supposed, is itself also subject to one important rule distinguishing it from a proper bill of exchange, viz., that it does not import a consideration unless expressed. If, therefore, no consideration is specified, parol evidence there- of will be necessary, as the rule of the common law is that a consideration is an essential requi- site of a contract ; but parol evidence will be inadmissible in all those cases in which by statute it is required that the contract should be in writing, as when the contract is not to be performed within one year, or when it is to answer for the debt of another person, &c. It will now be understood what is the negotia- bility above referred to as being the peculiar incident of a bill of exchange. The bill, in the first place, imports per se to have been given for value, even if it does not contain the usual clause "for value received," which, though generally inserted, is mere surplusage ; and every successive holder who has received it before it was due, in the regular course of business, for a valuable consideration, is enti- tled to enforce it according to the terms of the obligation expressed therein, without regard to any transactions between the original parties. To this rule there are some exceptions, as when the bill was given for a gaming debt or when usury is involved, in which cases the bill is declared to be absolutely void by stat- utes in England, which have been generally reenacted in the United States. When there