Definition of BILL OF EXCHANGE


contracts. A bill of exchange is defined to be
an open
letter of request from, and order by, one person on another, to pay a sum
of money therein mentioned to a third person, on demand, or at a future
time therein specified. 2 Bl. Com. 466, Bayl. on Bills, 1, Chit. Bills, 1,
1 H. Bl. 586, 1 B. & P. 291, 654, Selw. N. P. 285. Leighs N. P. 335, Byles
on Bills, 1, 1 Bouv. Inst. n. 895.

2. The subject will be considered with reference, 1 . to the parties to a
bill, 2. the form, 3. their different kinds 4. the indorsement and
transfer, 5. the acceptance 6. the protest.

3. - 1. The parties to a bill of exchange are the drawer, (q. v.) or he
who makes the order, the drawee, (q. v.) or the person to whom it is
addressed, the acceptor, (q. v.) or he who accepts -the bill, the payee,
(q. v.) or the party to whom, or in whose favor the bill is made. The
indorser, (q. v.) is he who writes his name on the back of a bill, the
indorsee, (q. v.) is one to whom a bill is transferred by indorsement, and
the holder, (q. v.) is in general any one of the parties who is in
possession of the bill, and entitled to receive the money therein

4. Some of the parties are sometimes fictitious persons. When a bill is
made payable to a fictitious person, and indorsed in the name of the
fictitious payee, it is in effect a bill to bearer, and a bona fide holder,
ignorant of that fact, may recover on it, against all prior parties, who
were privy to the transaction. 2 H. Bl. 178, 288, 3 T. R. 174, 182, 481, 1
Camp. 130, 19 Ves. 311. In a case where the drawer and payee were
fictitious persons, the acceptor was held liable to a bona fide holder. 10
B. & C. 468, S. C. 11 E. C. L. R. 116. Vide, as to parties to a bill, Chit.
Bills, 15 to 76, (ed. of 1836.)

5. - 2. The form of the bill. 1. The general requisites of a bill of
exchange, are, 1st. that it be in writing. R. T. Hardw. 2, 2 Stra. 955, 1
Pardess. 344-5.

6.- 2d. That it be for the payment of money, and not for the payment of
merchandise. 5 T. R. 485, 3 Wils. 213, 2 Bla. Rep. 782, 1 Burr. 325, 1
Dowl. & Ry. N. P. C. 33, 1 Bibbs R. 502, 3 Marsh. (Kty.) R. 184, 6 Cowen,
108, 1 Caines, R. 381, 4 Mass. 245, 10 S. & R. 64, 14 Pet. R. 293, 1,
MCord, 115, 2 Nott & MCord, 519, 9 Watts, R. 102. But see 9 John. R. 120,
and 19 John. R. 144, where it was held that a note payable in bank bills
was a good negotiable note.

7. - 3d. That the money be payable at all events, not depending on any
contingency, either with regard to the fund out of which payment is to be
made, or the parties by or to whom payment is to be made. 8 Mod. 363, 4
Vin. Ab. 240, pl. 16, 1 Burr. 323, 4 Dougl. 9, 4 Ves. 372, Russ. & Ry. C.
C. 193, 4 Wend. R. 576, 2 Barn. & Ald. 417.

8. - 2. The particular requisites of a bill of exchange. It is proper
here to remark that no particular form or set of words isnecessary to be
adopted. An order " to deliver money," or a promise that " A B shall
receive money," or a promise " to be accountable" or " responsible" for it,
have been severally held to be sufficient for a bill or note. 2 Ld. Raym.
1396, 8 Mod, 364.

9. The several parts of a bill of exchange are, 1st. that it be properly
dated as to place

10.- 2d. That it be properly dated as to the time of making. As the time
a bill, becomes due is generally regulated by the time when it was made,
the date of the instrument ought to be clearly expressed. Beawes, pl. 3 1 B
. & C. 398, 2 Pardess. n. 333.

11. - 3d. The superscription of the sum for which the bill is payable is
not indispensable, but if it be not mentioned in the bill, the
superscription will aid. the omission. 2 East, P. C. 951.

12. - 4th. The time of payment ought to be expressed in the bill, if no
time be mentioned, it is considered as payable on demand. 7 T. R. 427, 2
Barn. & C. 157.

13. - 5th. Although it is proper for the drawer to name the place of
payment, either in the body or subscription of the bill, it is not
essential, and it is the common practice for the drawer merely to write the
address of the drawee, without pointing out any, place of payment, in such
case the bill is considered payable, and to be presented at the residence
of the drawee, where the bill was made, or to him personally any where. 2
Pardess. n. 337 10 B. & C. 4, Moody & M. 381, 4 Car. & Paine, 35. It is at
the option of the drawer whether or not to prescribe a particular place of
payment, and make the payment there part of the contract. Beawes, pl. 8.
The drawee, unless restricted by the drawer, may also fix a place of
payment by his acceptance. Chit. Bills, 172.

14. - 6th. There must be an order or request to pay and that must be a
matter of right, and not of favor. Mood. & M. 171. But it seems that
civility in the terms of request cannot alter the legal effect of the
instrument. "il vous plair a de payer," is, in France, the proper language
of a bill. Pailliet, Manuel de Droit Francais, 841. The word pay is not
indispensable, tor the word deliver is equally operative. Ld. Raym. 1397.

15. - 7th. Foreign bills of exchange consist, generally, of several
parts, a party who has engaged to deliver a foreign bill, is bound to
deliver as many parts as may be requested. 2 Pardess. n. 342. The several
parts of a bill of exchange are called a set, each part should contain a
condition that it shall be paid, provided the others remain unpaid. Id. The
whole set make but one bill.

16. - 8th. The bill ought to specify to whom it is to be paid. 2 Pardess.
n. 338, 1 H. Bl. 608, Russ. & Ry. C. C. 195. When the name of the payee is
in blank, and the bill has been negotiated by indorsement, the holder may
fill the blank with his own name. 2 M. & S. 90, 4 Camp. 97. It may,
however, be drawn payable to bearer, and then it is assignable by delivery.
3 Burr. 1526.

17. - 9th. To make a bill negotiable, it must be made payable to order,
or bearer, or there must be other operative and equivlent words of
transfer. Beawes, pl. 3, Selw. N. P. 303, n. 16, Salk. 133. if, however, it
is not intended to make the bill negotiable, these words need not be
inserted, and the instrument will, nevertheless, be valid as a bill of
exchange. 6 T. R. 123, 6 Taunt. 328, Russ. & Ry. C. C. 300, 3 Caines R.
137, 9 John. It. 217. In France, a bill must be made payable to order. Code
de Com. art. 110, 2 Pardess. n. 339.

18. - 10th. The sum for which the bill is drawn, must be clearly
expressed in the body of it, in writing at length. The sum must be fixed
and certain, and not contingent. 2 Stark. R. 375. And it may be in the
money of any country. Payment of part of the bill, the residue being
unpaid, cannot be indorsed. The, contract is indivisible, and the acceptor
would thereby be compelled to make two payments instead of one. But when
part of a bill has been paid the residue may be assigned, since then it
becomes a contract for the residue only. 12 Mod. 213, 1 Salk. 65, Ld. Ray.

19. - 11th. It is usual to insert the words, value received, but it is.
implied that every bill and indorsement has been made for value received,
as much as if it had been expressed in totidem verbis. 3 M. & S. 352, Bayl.
40, n. 83.

20. - 12th. It is usual, when the drawer of the bill is debtor to the
drawee, to insert in the bill these words: " and put it to my account but
when the drawee, or the person to whom it is directed, is debtor to the
drawer, then he inserts these words : "and put it to your account," and,
sometimes, where a third person is debtor to the drawee, it may be
expressed thus: "and put it to the account of A B," Marius, 27,. C, om.
Dig. Merchant, F 5, R. T. Hardw. 1, 2, 3, but it is altogether unnecessary
to insert any of these words. 1 B. & C. 398, S. C. 8 E. C. L. R. 108.

21. - 13th. When the drawer is desirous to inform the drawee that he has
drawn a bill, he inserts in it the words, "as per advice," but when he
wishes the bill paid without any advice from him, he writes, "without
further advice." In the former case the drawee is not authorized to pay the
bill till he has received the advice, in the latter he may pay before he
has received advice.

22. - 14th. The drawee must either subscribe the bill, or, it seems, his
name may be simply inserted in the body of the instrument. Beawes, pl. 3,
Ld. Raym. 1376 1 Stra. 609.

23. - 15th. The bill being a letter of request from the maker to a third
person, should be addressed to that person by the Christian name and
surname, or by the full style of their firm. 2 Pardess. n. 335 Beawes, pl.
3, Chit. Bills, 186, 7.

24. - 16th. The place of payment should be stated in the bill.

25. - 17th. As a matter of precaution, the drawer of a foreign bin may,
in order to prevent expenses, require the holder to apply to a third
person, named in the bill for that purpose, when the drawee refuses to
accept the bill. This requisition is usually in these words, placed in a
corner, under the drawees address: " Au besoin chez Messrs. - at -," in
other words, ((In case of need apply to Messrs. at -. "

26. - 18th. The drawer may also add a request or direction, that in case
the bill should not be honored by the drawee, it shall be returned without
protest or without expense, by subscribing the words, " retour sans
protet," or " sans frais," in. this case the omission of the holder to
protest, having been induced by the drawer, he, and perhaps the indorsers,
cannot resist the payment on that account, and thus the expense is avoided.
Chit. Bills, 188.

27. - 19th. The drawer may also limit the amount of damages, by making a
memorandum on the bill, that they shall be a definite sum, as, for example:
"In case of non-acceptance or uon-payment, re-exchange and expenses not to,
exceed dollars." Id.

28. - 3. Bills of, exchange are either foreign or inland. Foreign, when
drawn by a person out of, on another in, the United States, or vice versa,
or by a person in a foreign country, on another person in another foreign
country, or by a person in one state, on another in another of the United
States. , 2 Pet. R. 589 ., 10 Pet. R. 572, 12 Pick. 483 15 Wend. 527, 3
Marsh. (Kty.) R. 488 1. Rep. Const., Ct. 100 4 Leighs R. 37 4 Wash. C. C.
Rep. 148, 1 Whart. Dig. tit. Bills of Exchange, pl. 78. But see 5 John. R.
384, where it is said by Van Ness, Justice, that a bill drawn in the United
States, upon any place within the United States, is an inland bill.

29. An inland bill is one drawn by a person in a state, on another in the
samestate. The principal difference between foreign and inland bills is,
that the former must be protested, and the latter need not. 6 Mod. 29, 2 B.
& A. 656, Chit Bills, (ed. of 1836,) p. 14. The English rule requiring
protest and notice of non-acceptance of foreign bills, has been adopted and
followed as the true rule of mercantile law, in the states of
Massachusetts, Connecticut) New York, Maryland, and South Carolina. 3 Mass.
Rep. 557, 1 Days R. 11, 3 John. Rep. 202, 4 John. R. 144, 1 Bays Rep.
468, 1 Harr. & John. 187. But the supreme court of the United States, in
Brown v. Berry, 3 Dall. R. 365, and in Clark v. Russel, cited in 6 Serg. &
Rawle, 358, held, that in an action on a foreign bill of exchange, after a
protest for non-payment, protest for non-acceptance, or notice of
non-acceptance need not be shown, inasmuch as they were not required by the
custom of merchants in this country, and those decisions have been followed
in Pennsylvania. 6 Serg. & Rawle, 356. It becomes a little difficult,
therefore, to know what is the true rule of the law-merchant in the United
States, on this point, after such contrary decisions." 3 Kents Com. 95. As
to what will be considered a foreign or an inland bill, when part of the
bill is made in one place and part in another, see 1 M. & S. 87, Gow. R.
56, S. c. 5 E. C. L. R. 460, 8 Taunt., 679, 4 E. C. L. R. 245, 5 Taunt.
529, 1 E. C. L. R. 179.

30. - 4. The indorsement. Vide articles Indorsement, Indorser, Indorsee.

31. - 5. The acceptance. Vide article, Acceptance.

32. - 6. The protest. Vide article, Protest. Vide, generally, Chitty on
Bills, Bayley on Bills, Byles on Bills, Marius on Bills, Kyd on Bills,
Cunningham on Bills, Pothier, h. t., Pardess. Index, Lettre de Change, 4
Vin. Ab. 238, Bac. Ab. Merchant and Merchandise, M., Com. Digest, Merchant,
Danes Ab. Index, h. t., 1 Sup: to Ves. Jr. 86, 514, Smith on Mer. Law,
Book 3, c. 1, Bouv. Inst. Index,.h. t.

Source: Bouviers Law Dictionary 1856 Edition