4. Days of grace.—When a bill is not payable on demand, three days of grace are added to the time of payment as fixed by the bill and, unless otherwise provided, the bill is due and payable on the last day of grace.' 5. Bills of Exchange Act.—Our present Bills of Exchange Act is a revision or consolidation of the Act of 1890 and its amendments. Before that time the laws governing bills and notes varied in the different provinces. In Quebec, a mixture of French and Eng lish commercial law was enforced. In the other prov inces, the English law as it existed when introduced into the particular province and, as amended by local statute, was applied. There were anomalies and con tradictions, and it became evident that, in a matter of such vital importance to our commerce, there should be a uniform law for the whole of Canada. The Eng lish law respecting bills and notes had been codified in 1882, and our Act of 1890 was largely copied there from.
In the United States, where formerly there existed conflicts between the laws of the different states gov erning the subject of bills and notes, a Negotiable Instrument Law has been adopted in most states. This law is, in the main, in agreement with the Eng lish and Canadian acts.
6. Promissory notes.—Too careful attention can not be given to the definitions of the various negotiable instruments.
A promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person, or to bearer.
A note need not be in any particular form of words, so as the conditions just mentioned as being necessary to its existence are present. The promise must be unconditional, hence a document reading, "I promise to pay, on demand, to A. B. $50, if I can sell my B. C. Company stock," is not a valid note. Similarly, as it contained a condition, the following instrument was declared invalid—"Four months after date I promise to pay to W. H. or order, $1,264, value received. This note to be held as collateral secur ity." - A "sum certain in money" must be promised. A promise to pay out of a particular fund is not a promissory note. The fund may prove inade quate or may never exist. Hence a promise to pay out of the net proceeds of the sale of a cargo is not a promissory note, because it is not negotiable. Yet the instrument will serve as an evidence of the debt and as an assignment of the sum mentioned.
. The note is to be "signed by the maker"—which means that the maker may sign, or someone under his authority may sign for him. A corporation signs thru its authorized officers. Only the person who signs is liable; and so a person whose signature is forged is not bound. But when an agent signs for a principal he must be careful to sign so as to avoid personal liability. He must not sign "John Smith, agent for J. A. McDonald," but J. A. McDonald, Per John Smith, or the Estate Company, Limited, Per John Smith, President. • Thus, when at the left side of a note the words, "The Estate Company, Limited," were printed, and the note was signed "John Smith, President," "James Thompson, Treasurer," Smith and Thompson were held personally liable. To bind the company and not
the officers the note should have been signed: But the mere signature is not enough; to become a note the instrument must be delivered; or, if payable to the maker himself, must be indorsed by him. A note is payable on demand which is expressed to be so payable, or in which no time for payment is expressed. Generally the place at which the note is payable is mentioned, and whether or not the note is to hear interest. If interest is stipulated, it will run from the date of the note; if not, then only from its maturity. If the rate is not fixed, only the legal rate of five per cent can be charged.
7. Bills of bill of exchange is an un conditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum cer tain in money to, or to the order of a specified person, or to bearer.
The remarks just made concerning promissory notes are crenerally applicable to bills of exchange. A bill of exchange is an order, and is in its nature the demand of a right, not the mere asking of a favor, and therefore a supplication made or authority given to pay an amount is not a bill.l The person addressed is "required" to pay the sum named. But mere terms of courtesy will not render the bill invalid. Hence it has been held that an order, as follows, "Mr. Nel son will much oblige Mr. Webb by paying J. Ruff, or order, twenty guineas on his account," was held a good bill; as also the following, "Please let the bearer have $50. I will arrange it with you this forenoon. Yours truly." But the following were held to be bad : "Please to send $10 by bearer, as I am so ill I cannot wait upon you" ; or, "To. E. & S.—We hereby au thorize you to pay on our account to the order of G., $600. de W. & S." All of these examples are in formal, and it is difficult often to reconcile the judgments declaring similar informal orders good or bad. It is wise, of course, to avoid informality in business matters, and to follow closely the accepted form of contract. A correct and simple form of bill of exchange may be here set out: A bill of exchange is commonly called a draft, and after it has been accepted by the person to whom it is addressed, an acceptance. In the above model bill of exchange or draft, Balfour and Company is the drawer, because it draws on W. L. Booker. A. Mac Naughton and Company, Limited, in whose favor the draft is made, is called the payee, for payment is to be made to it, or to any one to whom it may negotiate the bill. Booker, against whom the draft is drawn, is called the drawee. If Booker accepts the draft, he writes across the draft the word "accepted," with the date, and frequently the bank at which it is payable, and signs his name.