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A Bill of Exchange, endorsed in blank, is thus rendered negotiable, but by means of a procuration only, with equities attaching. By the German Law, art. 36, the holder of a Bill of Exchange is exempt from the necessity of furnishing proof of identity of prior parties to a Bill, the Code de Commerce retaining the older opinion in this respect. By the Law of France, mere delivery does not transfer title, while the German Law allows this. Further, the value (valeur, valuta, consideration) must be stated, according to the French Law, on the face of the Bill; the German Law, on the contrary, expressly rids the holder of a Bill of Exchange from all liability of proof of value given. Another point of importance is that of cumulative re-exchanges and charges. The Code de Commerce allows only one charge for re-exchange; the German Law inflicts cumulative charges on antecedent parties. *

III. In England the introduction of Bills of Exchange is but of modern date. It is true, we may find traces of their employment in the 13th and 14th centuries. Nevertheless, the year-books and reports of the 16th century do not contain a single reported case. Rymer's Fædera refers to the use of exchanges and re-exchanges (A.D. 1554) by Sir Thomas Gresham, in remitting moneys to King Edward VI. and Queen Mary. Chittyand Story|l, in their historical sketches of the development of the use of Bills of Exchange, furnish an interesting account of the adoption of these instruments in the 15th and 16th centuries. The Acts of Parliament regulating the Law of Bills of Exchanges gave but tardily legislative sanction to some of the usages and customs of merchants. The English Courts of Law, from

* Biener, p. 488.
† Madox, History of the Exchequer, ch. 23, p. 633 et seq.

Chitty on Bills of Exchange.
Il Story, Commentaries on the Law of Bills of Exchange.
89&10 William III., O. 17 (1699), 3 & 4 Anne, c. 9 (1705) (as regards
Ireland), 1 & 2 Geo. IV. c. 78, 18 & 19 Vict. c. 67, and 19 & 20 Vict. c. 97.

the days of Lord Holt, tenaciously adhered to the theory of an assignment of a chose in action, and only reluctantly have our lawyers yielded to the more modern notion put in practice by merchants and formulated into legal axioms by Continental Jurists-namely, that of the unfettered negotiability of a Bill of Exchange.

The fundamental notion universally current in England being that a Bill of Exchange or Promissory Note transferred a debt (a chose in action), there arose a necessity of proof of a "justa causa" (consideration), the burden of which fell upon the holder. Both these rules greatly impaired the negotiability of the instrument and hindered the right of recovery, destroying its free use. To remedy these defects the Legislature intervened, and, to use Chitty's expressive words, “clothed the instrument with special privileges."*

The Courts of Equity, it is true, to remedy the evil extended an Equity in favour of the assignee, that is a right to sue the debtor in the name of the assignor.f The tardy and costly aid of a Court of Equity, however, ill suited the requirements of the trader and banker. By slow degrees the custom of merchants prevailed. Hesitatingly our Courts consented to acknowledge the Law Merchant, the Legislature in part consolidating what had been sanctioned by usage. I

The numerous cases cited by Chitty, exceeding 2,000, embody the laws of England. These decisions have cleared the way for an ultimate consolidation into a system of the laws, rules, and practices in relation to these instruments. The absence of any guiding principle has, it is to be feared, made it all but impossible to shape the material contained in these decisions into anything approaching completeness. Nevertheless some general rules may be deduced, which might ultimately form the foundation of a system. As

• Chitty, Treatise on Bills of Exchange, 10th ed., 1859. t Coke on Littleton, s. 347, p. 214. Formerly the King only could code a right of action absolutely.

| Bayley on Bills of Exchange, 5th ed., 1830.

already pointed out, these rules in many respects conform to the German Law, and the acceptor being regarded as the principal debtor, all the other parties as sureties (Einert regarding the drawer as the principal debtor and all the other parties as sureties). In the United States of America the English Law prevails throughout the Northern States of the Union.* Chancellor Kent,t in his Commentaries, gives a lucid account of the difference between the Laws of the various States of the Union, remarking that, subject to local modifications, the rules of the English Law prevail.

The leading features of the Law of England regarding Bills of Exchange, according to Byles and Chitty, may be stated as follows:- First, That transfer by endorsement, or delivery assigns the sum stated on the instrument absolutely. Second, That in the absence of fraud, it is not necessary to prove consideration on the part of the holder. Third, That a Bill of Exchange passes by endorsement (without notice). Fourth, That an endorsement may be either special, general, in blank, or to Bearer. Fifth, That notice of dishonour, only and instead of protest, save in the case of foreign bills, is necessary. Sixth, That a Bill of Exchange or promissory note may be created by any written words expressing the intention of the parties, it being neither necessary to state the name of the place, nor the date, nor the time of payment; even the direction of payment to order need not be in any given form. Seventh, No words importing value or consideration are necessary. Eighth, Acceptance must be in writing, and in words plainly signifying an under

• The Civil Code of the State of New York (Tit. xv. on negotiable instruments) enunciates the law as in force in the Northern States with admirable precisicn. Both the public and the profession are indeed deeply indebted to David D. Field and Alexander W. Bradford for the manner in which they have carried out their important task. Civil Code of New York, 1 865, Report of Commissioners.

+ Kent's Commentaries, v. iii. 8. 71 (Negotiable paper).

Chitty's Treatise on Bills of Exchange ; Thomson, on the Law of Bills of Exchange ; Byles, The Law of Bills of Exchango.

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taking to pay. Ninth, That the acceptor is the principal debtor, the other parties sureties; each prior party being a principal in respect of each subsequent party.*

In the views expressed by Byles and Chitty, Dr. Story, with but unimportant modifications, concurs. Story lays down the rule that presumably the drawer has funds in the hands of the drawee; that he sells or assigns to the transferee for valuable consideration such part thereof as amounts to the sum stated to be payable by the Bill, and that acceptance is appropriation, pro tanto, of such funds; hence the acceptor is treated as the primary, or principal debtor to the payee, or other holder of the Bill of Exchange. Further, that the drawer and other parties on the Bill are held only to be collaterally liable. Chancellor Kent, following the language of Bayley in his Treatise on Bills of Exchange,t gives a definition which is at once concise, clear and accurate. “A Bill of Exchange," says this author, “is a written order or request by one person to another for the payment of money, absolutely and at all events." I

IV. In respect of the laws of the Russian Empire regarding Bills of Exchange, and which constitute the fourth group of Laws respecting these instruments, it is only necessary for my present purpose to observe that they intrinsically resemble those of Germany. The rules and Laws relating to negotiable instruments are contained in the code of the Empire promulgated 23rd June, 1832,|| and further amended 15th December, 1862.

The Imperial Government has since published a draft of a Law (1869) embodying many important amendments. The matter is now under consideration. In amending the Law of Bills of Exchange, it is generally understood that the General Law of Germany is, so far as practicable, to serve as a guide. For the kingdom of Poland, the Code de Com

* Byles on the Law of Bills of Exchange, p. 222.

+ Bayley on Bills, Ch. I., p. 1.

Kent's Comm. Lect. 44, p. 74.
Reichs Codex R:198lınds, Enthaltend die Wechselordnung, 1832.

merce (1807) is in force in its entirety. The Duchy of Finland has, as stated previously, adopted the German Law.

The laws of the different settlements of our Colonial Empire differ widely from one another. Thus, in Ceylon, and the Cape of Good Hope, the rules of the Roman-Dutch Law are retained; in the Colony of Mauritius, the Code de Commerce is in force; whilst, in Lower Canada, the Civil Code of France substantially prevails. In the Australian Colonies, Upper Canada, British Guiana, Trinidad, and in our East Indian possessions, the English Law prevails. In each of these colonies, however, it must be remarked that local laws have to a certain extent introduced modifications. Appeals from all these countries lying to the Privy Council, England is thus not only the commercial centre of all of these vast territories, but the seat of the ultimate Supreme Court of Appeal. Nevertheless, up to the present day, strange as it may appear, no attempt has been made to bring about a uniformity in the laws and practice regarding Bills of Exchange.

Having thus far endeavoured to explain the guiding principles in relation to Bills of Exchange and negotiable instruments which have been evolved from the usages and customs of the merchants of Northern Europe, the question may be, it is conceived, urged with great force, whether it would not be practicable to establish a common code for the continental States of Northern Europe, Germany, Austria, Scandinavia, Prussia, and England, as well as for the United States.* The answer, I believe, will be in the affirmative, each country preserving its own mode of legal recovery, that is without interference in the procedure of its Courts of Law. “The Jurisprudence which regulates Bills

* The first congress on trade (Handelstag), held at Heidelberg, 13th to 18th May, 1861, (

Goldschmidt, p. 177), passed a series of resolutions to the effect that a Common Commercial Code for all the German States should be adopted ; in part, at least, this suggestion has been already put into practice, the Coinmercial Codes of Germany and Austria substantially agreeing with one another.

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