How a bill or note is indorsed. tract, viz. that, provided the drawee does not pay the bill, the drawer will: for which reason it is usual, in bills of exchange, to express that the value thereof hath been received by the drawer; in order to show the consideration upon which the implied contract of repayment arises. And this property, so vested, may be transferred and assigned from the payee to any other man: contrary to the general rule of the common law, that no chose in action is assignable which assignment is the life of paper credit. It may therefore be of some use to mention a few of the principal incidents attending this transfer or assignment, in order to make it regular, and thereby to charge the drawer with the payment of the debt to other persons than those with whom he originally contracted. In the first place, then, the payee, or person to whom or whose order such bill of exchange or promissory note is payable, may by indorsement, or writing his name in dorso or on the back of it, assign over his whole property to the bearer, or else to another person by name, either of whom is then called the indorsee; and he may assign the same [469] to another, and so on in infinitum. And a promissory note, payable to A. or bearer, is negotiable without any indorsement, and payment thereof may be demanded by any bearer Acceptance. of it. But, in case of a bill of exchange, the payee, or indorsee (whether it be a general or particular indorsement) is to go to the drawee, and offer his bills for acceptance; which acceptance of an inland bill (so as to charge the drawer with costs) by 1 & 2 Geo. IV. c. 78, s. 2, must be in writing, under or on the back of the bill. If the drawee accepts the bill, either verbally or in writing, he then makes himself liable to pay it; this being now a contract on his side, grounded on an acknowledgment that the drawer has effects in his hands, or at least credit sufficient to warrant the payment. If the drawee refuses to accept the bill, and it be of the value of £20, or upwards, and expressed to be for value received, the payee or indorsee Protest for may protest it for non-acceptance; which protest must be made in writing, under a copy of such bill of exchange, by some notary public; or, if no such notary be resident non-accept ance. in the place, then by any other substantial inhabitant in the presence of two credible witnesses; and notice of such protest must, within fourteen days after, be given to the drawer. grace. Protest non-pay ment. But, in case such bill be accepted by the drawee, and after acceptance he fails or refuses to pay it on the last of the three days after it becomes due, (which three days are Days of called days of grace") the payee or indorsee is then to get it (if it be a foreign bill) protested for non-payment, in the for same manner, and by the same persons who are to protest it in case of non-acceptance, and such protest must also be notified, within fourteen days after, to the drawer." And he, on producing such protest, either of non-acceptance or non-payment, is bound to make good to the payee, or indorsee, not only the amount of the said bills, (which he is bound to do within a reasonable time after non-payment, without any protest, by the rules of the common law,) but also interest and all charges, to be computed from the time of making such protest. But if no protest be made or notified to the drawer, and any damage accrues by such neglect, it shall fall on the holder of the bill; but [470] in order to recover special damages and costs occasioned by the non-acceptance or non-payment of an inland bill, it is not necessary to protest the bill, or to give evidence of any such protest. The bill, when refused, must be demanded of the drawer as soon as conveniently may be for though, when one draws a bill of exchange, he subjects himself to the payment, if the person on whom it is drawn refuses either to accept or pay, yet that is with this limitation, that if the bill be not paid, when due, the person to whom it is payable shall in convenient time give the drawer notice thereof: for otherwise the law will imply it paid since it would be prejudicial to commerce, if a bill might rise up to charge the drawer at any distance of u Bills of exchange becoming due on fast or thanksgiving days are payable on the day next preceding such fast or thanksgiving day, 7 & 8 Geo. 4, c. 15. w The stat. 2 & 3 W. 4, c. 98, regulates the protesting for non-payment : of a bill of exchange drawn payable y Windle v. Andrews, 2 B. & A. M M Remedies of the drawee of change against the drawer and indorsers. time; when in the mean time all reckonings and accounts may be adjusted between the drawer and the drawee." If the bill be an indorsed bill, and the indorsee cannot a bill of ex- get the drawee to discharge it, he may call upon either the drawer or the indorser, or if the bill has been negociated through many hands, upon any of the indorsers; for each indorser is a warrantor for the payment of the bill, which is frequently taken in payment as much (or more) upon the credit of the indorser, as of the drawer. And if such indorser, so called upon, has the names of one or more indorsers prior to his own, to each of whom he is properly an indorsee, he is also at liberty to call upon any of them to make him satisfaction; and so upwards. But the first indorser has nobody to resort to, but the drawer only. Remedies of the payee of note against the drawer and indorsers. What has been said of bills of exchange is applicable a promissory also to promissory notes, that are indorsed over, and negotiated from one hand to another: only that, in this case, as there is no drawee, there can be no protest for nonacceptance; or rather, the law considers a promissory note in the light of a bill drawn by a man upon himself, and accepted at the time of drawing. And, in case of nonpayment by the drawer, the several indorsees of a promissory note have the same remedy, as upon bills of exchange, against the prior indorsers. Shares in public companies. Lastly, among contracts of this species may be placed that which arises from the holding shares in a public or joint-stock company, in which undertakings of various descriptions a very large capital is now embarked. Many of these relate to land, as railway, canal, and mining companies; but the shares in them are now usually declared to be personal estate by the act of parliament or deed of settlement constituting the company. The shares in the Avon navigation, however, are real estate; so are those in the New River. But the shares in the Chelsea Water-works company were held to be personal estate, although there was no declaration to that effect in the act. And it was also decided that real property, held for the purposes of a * Salk. 127. Buckridge v. Ingram, 2 Ves. Jun. 652; and see Earl of Portman v. Baker, 1 B. & C. 699. b Townsend v. Ash, 3 Atk. 336. trading company, is in equity to be deemed in the nature of personal estate, although the company is a corporation, and the shares are assignable, and one shareholder is not answerable for the acts of another in relation to the particular concern; the leaning of the courts, both of law and equity, being now to hold all shares in public companies to be personal estates, and transferrible accordingly. Where an act of parliament, or a charter of incorporation, has been obtained by the company, the shares may be transferred in the mode recognised by such act or charter. And after assignment, the assignees hold the shares on the same conditions, and are subject to the same rules and orders as the original subscribers, and are to all intents and purposes substituted in the place of the original subscribers. But where an act prescribes certain forms in the transfer of the company's shares, unless they are strictly complied with, the shares remain in the order and disposition of a bankrupt proprietor, the ordinary mode of transfer not constituting an equitable mortgage and where the mortgagor is a trader, and the shares are personal estate, the transfer must be made in the books, in order to render the security valid against the assignment in bankruptcy. It seems also clear, that though there be no act of parliament, or charter of incorporation, a share in a company for a proper object may be transferred, and the responsibility affecting the share may be transferred to the assignee." c Brent v. Brent, 2 Yo. and Jer. 268. Bradley v. Holdsworth, 2 M. & W. 422. Humble v. Holdsworth, 11 Ad. & E. 205. d The Huddersfield Canal Company v. Buckley, 7 T. R. 36. e Exparte Lancaster Canal Navigation, 1 Dea. & Ch. 411. f Nelson v. London Assurance Company, 2 Sim. & Stu. 392. Nockels v. Crosby, 2 B. & C. 814. CHAPTER THE THIRTY-THIRD. [ 471 ]OF TITLE BY BANKRUPTCY AND INSOLVENCY. Title by bankruptcies. 1. Who may become a bankrupt. [ 472 ] THE preceding chapter having treated pretty largely of the acquisition of personal property by several commercial methods, we from thence shall be easily led to take into our present consideration a tenth method of transferring property, which is that of X. Bankruptcy; a title which we before lightly touched upon, so far as it related to the transfer of the real estate of the bankrupt. At present we are to treat of it more minutely, as it principally relates to the disposition of chattels, in which the property of persons concerned in trade more usually consists, than in lands or tenements. Let us therefore first of all consider, 1. Who may become a bankrupt: 2. What acts make a bankrupt: 3. The proceedings on a fiat of bankruptcy; and, 4. In what manner an estate in goods and chattels may be transferred by bankruptcy. 1. Who may become a bankrupt. A bankrupt was befores defined to be "a trader, who secretes himself, or does "certain other acts, tending to defraud his creditors." He was formerly considered merely in the light of a criminal or offender; and in this spirit we are told by Sir Edward Coke, that we have fetched as well the name, as the wickedness, of bankrupts from foreign nations. But See page 331. b Previous to the 1 & 2 W. 4, c. 56, a commission of bankruptcy was sued out, but by virtue of that statute a fiat now issues. See page 331. d Stat. 1 Jac. 1, c. 15, s. 17. e 4 Inst. 277. f The word itself is derived from the word baneus or banque, which signifies the table or counter of a tradesman (Dufresne, I. 969), and ruptus, broken; denoting thereby one whose shop or place of trade is broken and gone; though others rather choose to adopt the word route, which in French signifies a trace or track, and tell us that a bankrupt is one who hath removed his banque, leaving but a trace behind. (4 Inst. |