The use of a Bill of Exchange - The form of drawing-Respecting alterations - Agreement of body with figures - Bills of Exchange drawn in sets -Presentation at maturity; before maturity; after maturity - Mode of proceeding with Dishonored Bill - Notation of protest; necessity for, and security of - Acceptance; acceptance contrary to tenor - Stamps, inland and foreign - Indorsements - Bankruptcy of acceptor - Statute of Limitations, as affecting Bills of Exchange - Payment - Cases in which a Banker is justified in refusing payment of a Bill or Note-Discounting Bills-Indications in case of need-The 'copy' of a Bill.

1. The Use of a Bill of Exchange.

There does not appear to be any evidence of the existence of bills of exchange among the ancients, and there are differences of opinion as to the exact time of their introduction. Byles in the preface to his well known 'Treatise on the Law of Bills of Exchange,' etc, says "it is certain that bills of exchange are in use in the fourteenth century. Indeed they are mentioned as "lettres d'eschanges" in the English Statute Book (3 Ric. 2, c. 3) as early as the year 1379, though we find in our English reports no decision relating to them earlier than the reign of James I.* Pothier, in his 'Traite du Contrat de Change,' partie prem.; chap. I, s. I, remarks: "II n'y a aucun vestige de notre contrat de change, ni des lettres de change, dans le droit Roman. Ce n'est qu'il n' arrivat quelquefois chez les Romans, que l'on comptat pour quelqu'un une somme d'argent dans un lieu a une per-sonne, qui se chargeoit de lui en faire compter autant dans un autre lieu. Ainsi nous voyons, dans les lettres de Ciceron a Atticus, que Ciceron voulant envoyer son fils faire ses etudes a Athenes s'informe si pour epargner a son fils deporter lui-meme a Athenes, l'argent dont il y auroit besoin, on ne trouveroit pas quelque occasion de le compter, a Rome, a quelqu' un que se chargeoit de lui faire compter a Athenes. Epist. ad Att. xii, 24; xv, 25. Mais cela n'etoit pas la negociation de lettres de change telle qu'elle a lieu parmi nous; cela se faisoit par de simples mandats."

* Martin v. Boure, Cro. Jac, 6.

A bill of exchange was employed, in the first instance simply as a letter of credit from one country to another, much more extensive in form than the document used in the present day, and containing an. amount of matter which time has gradually reduced to its present more business-like dimensions. This mode of settling accounts between merchants in distant lands, was found to be of infinite use, as it obviated the great risk of carrying large amounts of specie, and told at a glance the value of the document, thereby considerably facilitating pecuniary transactions in commercial intercourse. These bills of exchange, after having done duty from one country to another, changed hands frequently before they were finally disposed of.

Bills of exchange, on being introduced into this country, were discovered to be of greater use than merely as the representatives of so much money, as they could be instrumental in effecting the assignment of a debt, and as such are now recognised by the common law. Not only was the debt transferred, but its value was enhanced, inasmuch as the debtor himself accepted to pay a certain amount, from which engagement he could not afterwards depart. These bills of exchange were allowed only among merchants at first; but, as commerce increased, they became common with all classes of traders, and long ago it became evident to the governments of all countries that it was in their own interests, not less than in those of the commercial communities they governed, that the law applicable to these instruments should be made as clear and expeditious as possible. The same authority to which we have just referred, wrote as far back as 1829, "at the first introduction of bills of exchange the English courts of law regarded them with a jealous and evil eye, allowing them only between merchants; but their obvious advantages soon compelled the judges to sanction their use by all persons; and of late years the policy of the bank has been industriously to remove every impediment, and add all possible facilities to these wheels of the vast commercial system."

2. The Form of Drawing.

In drawing a bill or note the law does not compel the maker to use ink; the document would have the same effect if written in pencil; but the liability to obliteration would prevent the use of a pencil, except in cases where no other material was at hand. There are usually three parties to a bill of exchange: 1st, the drawer: 2nd, the drawee, who, on the completion of the document, becomes acceptor; and 3rd, the payee-the person to whom the amount specified in the bill or note is to be paid, to his order or to the bearer, as the case may be. Frequently the drawer is also the payee. When the payee's name is followed by the word ' order '-which is the most customary method-an endorsement becomes necessary previous to the instrument changing hands. The word ' bearer' coming after the payee's name renders any writing unnecessary in the event of transfer-' bearer f simply implying anybody. It is very unusual to draw a bill of exchange payable to ' bearer,' although no legal objection can be raised against it.* It is scarcely necessary to explain that the ' holder' of a bill is the person in actual -or, as Sir J. B. Byles says, in ' constructive '-possession, and legally entitled to recover the amount specified, from the parties thereto.

Inland bills of exchange are drawn on demand, at so many days', or weeks', or months' sight, or date, as the case may require, or payable on such a day named therein; in all cases, excepting with paper of the Bank of England, carrying three days' grace. Where no time is named, the document is payable on demand.

* In case Rex v. Randall, Eyre, C.B., ruled that a bill payable to blank or order was waste paper. In Minet v. Gibson, the majority of the judges held an opposite opinion.