Dishonoured Bills of Exchange Bill.

been served with any order for the payment of the Judge of such County Court, where the a bill of exchange or promissory note issuing matter in dispute between the parties is above out of any County Court, at any time before 201., an appeal to one of the Superior Courts execution has issued, or before any proceed- at Westminster shall be allowed where either ings fully taken on such order, on notice to the party shall be dissatisfied with the determinaholder of such bill of exchange or promissory tion or direction of the Judge on the trial of note, to apply to the Judge out of whose Court the said issue in point of law, or upon the adthe order issued to stay execution, which applica- mission or rejection of any evidence; provided tion must be supported by affidavits disclosing that such appeal shall be in the same form, and what would constitute a legal defence to an ac- subject to the same conditions and regulations tion on the bill or note against the party seek- as appeals which are now allowed by law in ing to stay execution or by parol evidence to such County Court; provided also, that the the like effect: provided always, that if the said Court of Appeal may either order a new party served with such order shall be arrested on trial, on such terms as it thinks fit, or may any capias ad satisfaciendum issued as herein- order judgment to be entered for either party before provided on such order, it shall be law (as the case may be), and make such order ful for him, at any time before he is discharged with respect to the costs of the said appeal as from custody, to apply to such Judge to stay such Court may think proper, and such order or set aside such proceeding, and to discharge shall be final. him from custody, and to stay all further execution, which application shall be supported by parol evidence or affidavit as aforesaid.

Dishonoured Bills of Exchange Bill.

proper, and for fixing the costs to be allowed | Courts shall forthwith after the approval thereof be laid before both Houses of Parliament, if Parliament be then sitting, or if Parliament be not sitting, then within five days after the next meeting thereof; and no such rule or order shall have effect until six weeks after the same shall have been so laid before both Houses of Parliament; and any rule or order so approved shall from and after the expiration of such time as last aforesaid be of the same force and effect as if the same had been enacted by authority of Parliament.

Observations on the Bills of Exchange Bill.

437

against acceptors in the latter case; and by the same Act it is allowed on promissory notes in the same way as on bills of exchange.

"Under these Acts a notarial protest of a dishonoured bill or note, when registered in the books of certain Courts, becomes in effect a judgment against any of the parties whose names may be on the bill or note, and an extract is granted to the holder so registering the protest, containing a warrant of the Court for execution against the party from whom payment is sought, on the expiration of six days after he has been duly served with notice according to the Law of Scotland; therefore a party who puts his name to a bill of exchange or promissory note is considered as giving a warrant to any bond fide holder to sign judgment against him, in the event of the note or bill being dishonoured.

by her Majesty at any foreign port or place; and every affidavit so sworn by virtue of this Act may be used and shall be admitted in evidence, saving all just exceptions, provided it purport to be signed by such consul-general, consul, vice-consul, or consular agent: provided always, that if any person shall forge the signature of any such affidavit, or shall use or tender in evidence any such affidavit with a false or counterfeit signature thereto, knowing the same to be false or counterfeit, he shall be guilty of felony, and shall upon conviction be liable to imprisonment for any term not exceed ing three years nor less than one year, with hard labour; and every person who shall be charged with committing any such felony may be dealt with, indicted, tried, and, if convicted, sentenced, and his offence may be laid and charged to have been committed in the county or place in which he shall be apprehended or be in custody; and every accessory before or after the fact to any such offence may be dealt with, tried, and, if convicted, sentenced, and his offence may be laid and charged to have been committed, in any county, or place in which the principal offender may be tried: provided also, that if any person shall wilfully and corruptly make a false affidavit before gence is not competent on bills or notes, such consul-general, consul, vice-consul, or consular agent, every person so offending shall be deemed and taken to be guilty of perjury, in like manner as if such person had wilfully and corruptly made such false affidavit in England before competent authority, and shall and may be dealt with, tried, and, if convicted, sentenced, and his offence may be laid and charged to have been committed, in any county or place in which he shall be apprehended or be in custody, as if his offence had been actually committed in that county or place.

"There are various restrictions, however, to the right which the holder of a bill or note thus acquires, some of which it may be proper to mention. The protest cannot be registered after six months from the time the bill or note becomes due. The bill or note must be good on the face of it, and free from erasures or alterations in substantialibus. Summary dili

which, though the party's name be inserted by himself in the body of them, are not subscribed by him, or which are subscribed only by initials or by a mark. And there are various other restrictions on the right of the holder for the protection of the debtor, which it is unnecessary here to detail. But the great restriction on the right of the holder arises from the power which the party from whom payment is sought by the process of summary diligence has, of coming forward at any time before execution is completed, and staying execution by what is termed "a suspension.' In OBSERVATIONS ON THE BILLS OF for the latter party which would form a defence this proceeding any grounds will be available

EXCHANGE BILL.

"The object of this Bill will be best understood by a brief explanation of the Scottish system of summary diligence on dishonoured bills of exchange and promissory notes, which it proposes to introduce into England, and by a statement of some of the advantages which are found to arise under that system.

"Summary diligence on foreign bills of exchange was first introduced into Scotland by an Act of the Scottish Parliament in the year 1681, and was afterwards extended, by an Act passed in 1696, to inland bills. Under these Acts it was only allowed against drawers and indorsers in the case of non-acceptance, the acceptor alone being liable to this proceeding in the case of non-payment. By the 12 Geo. 3, c. 72, summary diligence was allowed to proceed against drawers and indorsers as well as

to an action against him on the bill or note,
and the effect of his being successful is to dis-
charge his liability. There are other objections
which may be urged as grounds of suspension
be brought forward in answer to an action.
of summary diligence, although they could not

"On the other hand, the right of suspension itself is placed under very stringent conditions. The first step to be taken by the debtor for obtaining a suspension of execution is by preferring a bill or short petition to the Lord Ordinary on the bills, if the protest has been registered in the Courts of Session, or to the sheriff, if it has been registered in the Sheriff. Court. The Judge to whom the application is made examines with all possible despatch, either before or after hearing the holder, whether the debtor has alleged sufficient primâ facie grounds for staying execution; and if they are such as would be incompetent in law, the petition is at once dismissed. When the grounds, however, are such as, if proved, would entitle the debtor to resist payment, the prayer of the petition is granted, and execution is stayed till the grounds of suspension are

438

Observations on the Bills of Exchange Bill.

discussed, in which both parties are allowed an | been owing to political causes, it is unneces

opportunity of deliberately making good their pleas and averments; and upon the proof and argument thus submitted, the Court finally determines whether execution is to issue or not. But in general no suspension is granted without security given by the party applying for it, to pay the debt, if it shall be found due, and the costs of suit. The bond into which the sureties are required to enter becomes, if the holder is successful in the suit, a warrant for instant execution against the sureties.

"In the proceedings in suspension the debtor is placed in the position of a plaintiff, and must take on himself the burden of instituting the process and of proving his case. The law presumes that the holder has a just title to the bill, and that it is a regular instrument when ex facie correct, and he is therefore entitled to stand on its merits until the debtor has made out a sufficient case to call on him for proof.

sary to inquire; but the fact is unquestionable that a system which bears directly on credit, has been found contemporaneous with one of the most astonishing developments of trade which has been recorded in history.

"One obvious consequence of the systera is, that defences pleaded for the mere purpose of delay and embarrassment, which are too common in the English Courts in actions on bills of exchange, and which render legal proceedings the last resource of à prudent merchant, are seldom raised in the Scottish tribunals.

Questions on important points of Law, from the very nature of commercial dealings, do arise; but time and money are not wasted on subtle points of special pleading, nor in defeating the sham defences of an opponent. Another consequence is no less clear. A dishonoured Scotch bill of exchange becomes of "It cannot be questioned that the principle considerably higher value to the holder than applied by the Law of Scotland to bills of ex- an English one. Its payment can be enforced change and promissory notes is in accordance by a much less dilatory and expensive mawith the sound mercantile view of such docu- chinery; and when the holder knows, as he ments. According to the custom of merchants, ought to do, the true nature and character of they are not treated as mere contracts for the the instrument in his possession, he is not payment of money, enforceable only by action, afraid to put that machinery in motion. He in which the onus probandi on every point, ex- knows that mere dilatory proceedings will be cept the consideration, rests with the holder, of no avail to prevent the enforcement of his but as securities which are certainly to be paid just rights; and he has no fear that the final when due, if the parties liable remain in sol- result of any proceedings which shall take vent circumstances. Accordingly, when the place, may end in a judgment against an innames of the parties to bills of exchange are solvent, since a surety must be interposed known, and their credit perfectly ascertained, whose ability to pay he has the means of these documents circulate as money; and the stringently testing. But there is a further only point considered by the most prudent consequence still which results with equal cermerchant in receiving a bill in payment of a tainty from this system. If the party liable on debt is, whether the credit of the parties is the bill be in insolvent circumstances when it satisfactory. A man who puts his name to a is protested and registered, he is deprived of bill as drawer, indorser, or acceptor, is under- the means of putting off the evil day, and of stood in the mercantile world to do so ad-going further and further into a hopeless convisedly, and pledging his credit to the fullest dition. Should execution proceed against him extent that he will pay it in certain circum- without his attempting to stay it, the true state stances. The principle of the system of sum- of his affairs becomes apparent; and even mary diligence is, that when these circumstances have arisen and are undeniable, the holder is entitled to enforce payment by a speedy legal process, unless the party held liable in the bill can show that the instrument is not what it professes to be, and either that it does not possess the character which he vouched for by his signature, or has, since he put his name to it, acquired a new character which frees him from the obligation to pay which would else be incumbent on him.

"The advantages of the system of summary diligence, in the opinion both of Scottish lawyers and mercantile men, are great and unquestionable. It has now been in existence for more than a century and a half, and its beneficial operation has been proved by the most satisfactory evidence. Under it the commerce of Scotland has increased and strengthened with a rapidity and steadiness which is scarely to be paralleled in the annals of any other modern nation. How much of this has

where he applies for a suspension of proceedings, he must provide sureties whose own solvency is closely scrutinized, who must render themselves liable for the debt, interest, and costs. This for a man verging on insol vency is no easy matter to accomplish; and the system, therefore, supplies a most efficient and searching test of insolvency, and affords one of the best securities which legislation has yet devised for mercantile credit. Nor can it be said that the system is too stringent, and must tend to check legitimate credit. It is the universal opinion of Scottish merchants that it has no such effect, and that it has operated most beneficially on the trade of that part of the United Kingdom. It is impossible indeed, on a fair consideration of the commercial condition of that country, to entertain any reasonable appprehension that the system has the slightest tendency to prevent legitimate speculation, or to damp the spirit of enterprise.

Such being the nature of the Scottish system of summary diligence on dishonoured Bills

439

Observations on the Bills of Exchange Bill.—Registration of Bills of Sale. of Exchange, and such some of the advantages | or, if not so ordered, execution would proceed resulting from it, this Bill proposes to intro- at the time at which it would be allowed to do duce the system into England in so far as may so in an ordinary action, where judgment must be compatible with the machinery of our Courts be signed for damages and costs. of Law. The benefits of the system, however, would All that is required for introducing the sys-be imperfectly realised if it were confined to the tem into England in its essential features, is to superior Courts. In Scotland, the local jurisgive to the registration of the protest of a dis-diction of the Sheriff Courts is the same as the honoured Bill the effect of a judgment, and general jurisdiction of the Court of Session in then to make provision for attempts to stay summary diligence; and, considering the adexecution, and this Bill seeks to accomplish vantages of local registers, the County Courts this object in the following manner :in England ought to be placed on the same footing so far as their jurisdiction extends. These Courts have already jurisdiction in cases of contract up to 50l., and there is no substantial reason why their jurisdiction in summary execution on bills and notes ought not to be to the same extent.

of every County Court shall be, by virtue of It is therefore provided that the chief Clerk his office, a registrar of protested bills, and shall keep a register for this purpose. Every holder of a dishonoured bill for the payment of any sum not exceeding 50%., within six months after protesting it, would be permitted to register it in the County Court within whose jurisdiction the acceptor resides; and thereupon he would be entitled to an order of the Court against any of the parties to the bill, and on this execution would proceed six days after service, in the same way as if the party had been duly summoned to appear before the Court, and an order made against him. The order would be served as summonses from the County Court now are. Before execution, the party served with the order might obtain from the Court a summons for staying execution, and at the hearing the Judge would either dismiss the summons or order a trial, in which the party seeking to stay execution would be plaintiff, and the holder defendant. The same provision with regard to security for principal and interest and costs are made as in the superior Courts. Within six days after trial, where the matter in dispute between the parties amounts to 207., an appeal would be allowed. ment of the Court was for the plaintiff, the If no appeal were made, then, where the Judgorder for execution would be discharged; and where for the defendant, execution would proceed, and costs be recoveeed in the ordinary way; where there was an appeal, execution would proceed or not, according to the judgment, as in other cases.

A protest is assumed as the foundation of the proceeding, not only because this method prevails in Scotland, but because the dishonour of the bill could not be proved in any more simple and economical mode. In each of the superior Courts of Common Law, one of the Masters would be appointed as the regis trar of protested Bills, and would keep a book for this purpose. Every holder of a dishonoured Bill, within six months after protesting it, would be permitted to register the bill and protest in the register of any of the Superior Courts, and would thereupon be entitled to judgment and to an order of the Court against any of the parties to the bill, for payment of the same with six days after the service of the order; and upon the expiration of six days after such service, execution might proceed. The order would be served in the same way as a Writ of Summons under the Common Law Procedure Act; and where the party sought to be served avoided service, the Court or a Judge would allow the holder to proceed as if service had been effected; where the party sought to be charged on the bill resided abroad, application for an order would be made to a Judge, who would allow a longer time after service before execution should issue. Before execution had taken place, it would be lawful for the party who had been served with the order to apply to the Court or a Judge to stay execution; and it would be necessary that the application should be supported by satisfactory affidavits, which the other party would be allowed to answer if he thought proper. Court or Judge would then determine whether The sufficient grounds had been laid for staying execution. If they thought so, then an issue in fact or in law would be directed to be tried by the parties, in the same way at if agreed on under the Common Law Procedure Act, and in which the party seeking to stay execution would be plaintiff, and the holder of the bill defendant. Within six days after the order directing an issue, the party seeking to stay execution would be required to give security for principal and interest on the bill, and for the costs of trying the issue, unless dispensed with by the Judge; otherwise, execution to proceed. The costs would be in the discretion of the Court. On the trial of the issue in fact REGISTRATION OF BILLS OF SALE. or in law, if the verdict or judgment were for the plaintiff, the order for execution would be discharged on application, within a certain

[We presume the proposed jurisdiction to be conferred on the County Courts on dishonoured bills not exceeding 50l., would be concurrently with the Superior Court, not exclusively. ED.]

THIS Bill, "For preventing Frauds upon

time, to the Court; if for the defendant, im- Creditors, by secret Bills of Sale of Personal mediate execution on the bill might be ordered; Chattels," recites, that frauds are frequently