transferrable by delivery; they may however be negotiated by Bankers notes. indorsement, in which case the act of indorsing will operate as the making of a bill of exchange, and the instrument may be sued on as such against the indorser (1). If the party receiving a banker's note in payment does not, within a reasonable time, present it for payment, he will, in case of nonpayment, have no right of action against the person from whom he received it; but if he uses due diligence in presenting it, and giving due notice of the dishonour, he may recover the amount from that party. (2) Checks or drafts on bankers appear to have been sanctioned Checks. and recognized as valid instruments by our courts, previously to the statute of Ann. In point of form, they nearly resemble bills of exchange, and only differ from them in this respect, that they are uniformly payable on demand, and usually to the bearer, and should be drawn upon regular bankers. From their daily and immediate use, the legislature has also considered them in a more favourable light, in the exemption of them in certain cases from stamp duties, for no draft or order for the payment of money to the bearer on demand, bearing date on or before the day on which the same is issued, and at the place where the same is made and drawn on a banker, acting as such within ten miles from such place, is subject to any duty. A check is usually transferred, not by indorsement, but by mere delivery (3). We have already shortly considered the time within which it should be presented for payment. Upon the dishonour of a check, and after due notice given, the holder may sue the drawer, and the immediate party from whom he received it. Having thus considered those securities which are most Bonds. (4) usually given in the course of commerce, we will now inquire into those securities which, though they are not so frequent, are yet occasionally taken, viz. bonds, warrants of attorney, recognizances, statutes merchant and staple, and in the nature (1) Lord Raym. 743. 132. 7 T. R. 430. (2) 7 T. R. 64. 1 Salk. (4) As to specialty securities in general, ante, 6, 7, 8, 9. And see forms post, 4 vol. 7. and 226 to Bonds. Bonds to bankers. (6) of a statute staple. These are frequently adopted, either where the credit of the merchant is not so unquestionable, or where, from the prospect of there being more than a single transaction. between the parties, it may be desirable to have a more formal security than a bill of exchange or promissory note. With respect to bonds, they have already been considered with reference to their peculiar requisites, qualities, and advantages (1). Some of the decisions on bonds given collaterally for facilitating trade, either to bankers for the repayment of advances, or for the replacing of stock and bonds in the faithful performance of the duties of clerk, &c., and the liability of sureties upon such bonds, have also been considered. (2) Some advantages may result from taking a bond as a security, superior to those which the holder of a bill of exchange possesses; they are principally on account of the preference to which they are entitled in the administration of assets upon the death of the obligor, and the circumstance of the heir being liable to the payment of the debt, which he is not upon a bill of exchange or promissory note, or other simple contract (3). Sir Samuel Romilly endeavoured to introduce an act to annul this distinction; but he only succeeded to a certain extent by the statute of 47 Geo. 3. c. 74., by which it is enacted, that if any trader die, seised or entitled to any estate or interest in lands, or other real estate which he has not charged by his will with the payment of debts, the same shall in equity be assets for the payment of all his just debts, whether due on simple contract or specialty, and that the heir and devisees shall be liable to the suit in equity of such creditor, provided that creditors holding specialties in which the heir is bound shall be first paid. We have already in a former chapter noticed some of the requisites and properties of deeds (4), and the distinctions between a simple contract and one under seal (5). The bonds which most frequently give rise to questions connected with trade, are those given to bankers as a security for advances which may be made by them, or for the due accounting of (1) Ante, 6. (2) Ante, 8 & 9. (3) Ante, 6, 7, 8, and 9. (5) Ante, 7. (6) Ante, 309. 1 Taunt. 673. 2 Barn. & Ald. 39. And see forms post, 4 vol. 226, &r. clerks employed by the obligees, and for replacing stock. In Bonds. the case of bonds given as securities on opening an account with bankers, they should be so framed as to cover advances to be made by the banking house, whatever change of partners may take place, either in the firm accommodated, or in that of the banking house, for otherwise, upon a change by death or otherwise of one of the partners, the bond will be no longer a security for future advances; and therefore, where a bond by A., reciting that B. intended to open a bank account with C., D., and E., as his bankers, was conditioned for payment to them of all sums from time to time advanced to B. at the banking house of C., D., and E., it was held, that on C.'s. death such obligation ceased, and did not cover future advances made after another partner was taken in, and that B., who was indebted to the house at C.'s. death, having afterwards paid off the balance which was applied at the time to the old debt incurred in C.'s. lifetime, A. was wholly discharged from his obligation; and Lord Ellenborough C. J. said, "The court will no doubt construe the words of the obligation according to the intent of the parties to be collected from them; but the question is, what that intent was. The defendant's obligation is to pay all sums to them, on account of their advances to Blyth; now who are 'them' but the persons before named, amongst whom is James Walwyn, who then constituted the banking house, and with whom the defendant contracted. The words will admit of no other meaning; and indeed with respect to any intent which parties entering into contracts of this nature may be supposed to have, it may make a very material difference in the view of the obligor, as to the persons constituting the house at the time of entering into the obligation, and by whom the advances are to be made. To the party for whom he is surety, a man may very well agree to make good such advance, knowing that one of the partners, on whose prudence he relies, will not agree to advance money improvidently. The characters therefore of the several partners may form a material ingredient in the judgment of the obligor upon entering into such an engagement. It may be observed, that in one of the cases cited by counsel the words were different from the present case; the clerk was to be taken into the service of the obligees, as a clerk in their shop and counting-house, which might be supposed to mean the same house, however the individual partners may change. But without considering whether that were the true construction of those Bonds. Bonds to replace stock. (3) words, it is enough to say, that there are no such words here. But we are now desired to construe an obligation to be answerable for money due to them, (certain partners having been before named), to mean money due to any part of them, a construction which would be contrary to the words of the instrument, which it is contended for is, to make this a bond to the persons then constituting the banking house, and their successors, which cannot be admitted (1); but if the bond be given to the banking-house without reference to the names of the firm, it will then operate as a continuing security, whatever change of partners may take place. Thus it has been decided (2), that a bond given to trustees to secure the faithful services of a clerk to the Globe Insurance Company, who were no corporation, may be put in suit by the trustees for a breach of faithful services by the clerk, committed at any time during his continuance in the service of the actual existing body of persons carrying on the same business under the same name, notwithstanding any intermediate change of the original holders of the shares by death or transfer, the intention of the parties to the instrument being apparent to contract for such service, to be performed to the company as a fluctuating body, and the intervention of the trustees removing all legal and technical difficulties to such a contract made with or suit instituted by the company themselves as a natural body." With respect to bonds to replace stock, it has been decided (4), that it is lawful for a person to sell out stock and advance the produce to another on his bond to replace the stock on a named day, and in the meantime pay the dividends which would have accrued due if the stock had not been sold out, though such dividends might exceed legal interest, and though by the fluctuation in the price of stock the borrower might have to pay on the repurchase much more than the sum he received, because in this case the borrower takes the chance of the fall as well as the rise of the funds, and in the former instance he would of course be a gainer, and the lender derives no undue advantage or greater profit than if his money had remained in the funds; but if the stipulation had been, that borrower should (1) 3 East, 484.; and see (3) See ante, 311.; and 17 Ves. jun. 44. And see form, post, 4 vol. (4) 3 T. R. 531. repay a sum of money at a fixed day, which in contemplation of Bonds. the parties would in all probability exceed the current price of that day of the same proportion of stock, then the contract would be illegal, because the borrower is not in that case afforded the fair chance of the fluctuation of the funds (1). It was for some time doubted, but has at length been established, that it is not necessary that the party should sell out stock at the time. A stipulation to purchase stock will in general be valid if made in consideration of a pre-existing debt; and therefore, where (2) the defendant being indebted to the plaintiff in £486 4s. 6d., for which he was sued, and the plaintiff wishing to invest the amount of the debt in stock on the 19th of November 1803, when the same would have purchased £908 16s. 7d. stock, in consideration of forbearing his action and demand till the 19th of November 1804, takes bond from the defendant, conditioned for the transfer by him to the plaintiff on that day of £908 16s. 7d. stock, with such interest as the same would have produced as such stock in the meantime, it was held that this was neither usurious nor within the prohibition of the stockjobbing act, 7 Geo. 2. c. 8.; and the court said that this was not usury, as the amount of the sum to be paid by the defendant depended upon a contingency, and if the stocks had fallen in the meantime to £50, the plaintiff would have received less than his principal and legal interest would have amounted to; that this was no more usury than an agreement to replace stock lent, which, though once contended to be usury if more than the principal and legal interest were obtained thereby, had been long settled to be legal. If, indeed, this had been a mere colour for usury, it would not have availed, but that was negatived by the jury, and nothing appeared to impeach the fairness of the transaction. And in another case (3) it was decided, that an agreement for the purchase of stock to be transferred at a further day, at a price below the then value, is not usurious; but if the lender oblige the borrower to take stock at a rate exceeding the market price, it is usurious (4). It has been held (5), that in estimating the measure of damages in an action for breach of an engagement to replace stock on that day, it is not enough to take the value of the stock on that day, if it has risen in the (1) Id. ibid. 11 East, 616. (2) 8 East, 304. (3) 5 Esp. C.N.P. 64. (4) 1 Esp. R. 11. 11 East, 616. |