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French's Ex- by acting on the presumption that the bill is actually paid. The law requires this notice, not merely as an Bank of Co- indemnity against actual injury, but as a security against a possible injury which may result from the laches of the holder of the bill. To this security, then, it would seem, the drawer ought to remain entitled, unless his case be such as to take him out of the reason of the rule.

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A drawer who has no effects in the hands of the drawee, is said to be without the reason of the rule, and, therefore, to form an exception to it.

This has been laid down in the books as a positive qualification of the rule, but has seldom been so laid down, except in cases where, in point of fact, the drawer had no right to expect that his bill would be honoured, and could sustain no injury by the neglect of the holder to give notice of its being dishonoured. In reason it would seem, that in such cases only can the exception be admitted, and that the necessity of notice ought to be dispensed with only in those cases where *notice must be unnecessary, or immaterial to the drawer.

The reasoning of the judges, in most of the cases which have been cited, would seem to warrant this restriction of the exception.

The case of Bikerdike v. Bollman was a bill drawn by a debtor on his creditor, without a single accompanying circumstance which could raise an expectation that the bill would be accepted or paid. Notice in this case was declared to be unnecessary. Justice Ashhurst gives as a reason for this opinion, that the drawing was in itself a fraud. This reason must be considered as additional to the general ground on which the case was placed in the argument, which was, that the want of notice could not possibly affect the drawer. The particular reason given by Justice Ashhurst for his opinion, is clearly inapplicable to any case in which the drawer was justified in drawing.

Into the opinion of Justice Buller some general reasoning is introduced, from which it is fairly deducible that he considered the drawer as having no right to expect that the bill would be paid, and as being liable to

no injury from the want of notice, and that these were the true grounds of the exception.

He says, "If it be proved on the part of the plaintiff, that from the time the bill was drawn till the time it became due, the drawee never had any effects of the drawer in his hands, I think notice to the drawer is not necessary; for he must know whether he had effects in the hands of the drawee or not; and if he had none, he had no right to draw upon him and to expect payment from him; nor can he be injured by the non-payment of the bill, or the want of notice that it has been dishonoured."

These observations were, in fact, applicable to the case, for the drawer was the debtor of the drawee, and had no right to draw the bill, nor reason to expect that it would be accepted.

*This principle was recognised in Goodall et al. v Dolly, in which the same idea, so far as respects the impossibility of injury to the drawer, was repeated.

This point came on again to be considered in the case of Rogers v. Stephens, 2 T. R. 713. in which, as between the drawer and drawee there was no pretext of a right to draw. It was said that a third person had stated himself to have funds in the hands of the drawee; that the bill was really drawn on the credit of those funds, and that loss had been actually sustained from the want of notice. But these facts formed no part of the case. If they had, it is apparent that, in the opitions of Lord Kenyon and Justice Grose, they would have been decisive in favour of the necessity of notice, upless that necessity had been dispensed with by the subsequent conduct of the drawer. Lord Kenyon states the reason why notice need not be given to the person who draws without funds in the hands of the drawee to be," because the drawer must know that he had no right to draw on the drawee." The opinions of Lord Kenyon and Justice Grose in this respect, though not assented to, were not controverted by Justice Ashhurst. The decision in Rogers v. Stephens was made on the authority of Bikerdike v. Bollman.

It would seem to be the fair construction of these cases, that a person having a right to draw in consequence of engagements between himself and the drawee, or in consequence of consignments made to the drawee,

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or from any other cause, ought to be considered as drawing upon funds in the hands of the drawee, and, Bank of Co- therefore, as not coming within the exception to the general rule.

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The transaction cannot be denominated a fraud, for in such case it is a fair commercial transaction.

Neither can it be truly said that he had no right to expect his bill would be paid, for a person authorized to draw must expect his draft will be honoured.

*Neither can it be said that he has virtual notice of the protest, and that actual notice is useless, and the want of it can do him no injury; for this is only true when at the time of drawing the drawer has no reason to expect that his bill will be paid.

A person having a right to draw, and a fair right to expect that his bill will be honoured, would not come within the reason of the exception, and, therefore, it may well be contended, ought not to be brought within the exception itself.

This doctrine appears to be contradicted in the case of Walwyn v. St. Quintin.

In that case the bill was drawn to accommodate the endorsor, who had previouly placed securities, on which he wished to raise money, in the hands of the acceptor; but the drawer had no effects in his hands. It was determined that, in this case, notice to the drawer was unnecessary.

If this determination should be considered without examining the reasoning on which it was founded, the reader would conclude that the single circumstance of drawing without funds in the hands of the drawee belonging to the drawer, subjected him, without notice, to the payment of his bill, if dishonoured, at any period of time when not barred by the act of limitations; and that no demonstration of his perfect right to draw, or of the loss to which the want of notice had exposed him, could relieve him from the claim of the holder of the bill. For in this case, the drawee having accepted on funds, the drawer had a right to expect that the bill would be paid, could not be chargeable with fraud in drawing, nor required to prepare other funds to prevent the disgrace and injury of his bill's being dishonoured, or to take measures to secure himself against the acceptor or endorsor. He does not appear

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to have come within any one reason assigned in the French's Excases of Bikerdike v. Bollman, or of Rogers v. Stephens, for the exception stated in those cases to the neral rule.

ge

*This induces the necessity of examining with particular attention the reasons given by the judge, which must be considered as explanatory of the decision.

In delivering the opinion of the court, Lord Chief Justice Eyre said, "The true fact is, that this was the acceptor's bill, and not the drawer's." "The transaction in this case was a mode by which the acceptor advanced a sum of money to the payee, and the drawer was a mere instrument of the acceptor." "It seems

clear, that notice can be of no use to him, his situation being this, that if the acceptor do not pay, he must, and may then, and not till then, resort to the acceptor to be reimbursed. Notice, therefore, can amount to nothing, for his situation cannot be changed."

It is observable that the principle supposed to be laid down in the cases previously adjudged as constituting the reason for the exception is here expressly recognised, and forms the great and operative motive for the judgment of the court. It is, that notice could be of no use, that the drawer could not avail himself of it, that he could take no step which would in any manner change his situation, that he could have no recourse against the acceptor until he paid the bill.

In no case is the reason of the exception more expli citly given, and the only difficulty is to apply the rea soning to the facts as reported.

The court seem to have supposed, that since the drawer could not maintain an action against the acceptor until he had taken up the bill, that it was perfectly useless to enable him, by proper notice, to employ those other various means which he might have taken to secure himself. Such is not the reasoning of the judges in the cases previously decided; and this reasoning certainly would not be permitted to apply to an endorsor who had given value for the bill not knowing that it was drawn without funds in the hands of the drawee. Yet he would be unable to recover from the drawer until he had taken up the bill.

*If an action could not have been maintained, might VOL IV.

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French's Ex- not the drawer have effects of the drawee in his hands which he might retain; or might not various other Bank of Co- means of saving himself be neglected, in consequence of the opinion that the bill would be paid? If this might be, how can it be true that notice can be of no use to him?

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If the fact even be that the drawer could only sue the acceptor in such a case as this, after having himself discharged the bill, still he ought to have notice, that he might immediately take it up for the purpose of proceeding against the acceptor.

The reasoning of Lord Chief Justice Eyre, to be perfectly consistent with itself and with the principles laid down in previous decisions, would seem to be predicated on an understanding on the part of the drawer when the bill was drawn, that it was not to be paid by the acceptor; or on the idea that a bill drawn without funds is not a commercial transaction, and not subject to commercial rules.

The presumptions are rendered the stronger from the cases afterwards stated, in which a drawer without funds in the hands of his drawee would still be entitled to notice. These are "acceptances on the faith of consignments from the drawer not come to hand," and “ acceptances on the ground of fair mercantile agreement;" to which, he says, may possibly be added many others.

If the exception admits of these exceptions and of many others, it would be difficult to apply it to any case of a fair transaction, where the drawer had really a right to draw, unless it be supposed not to be governed by the law merchant.

The judge next proceeds to describe the case in which notice is not requisite.

He says,

"Where the drawer has no effects, and has no fair pretence for drawing, or where he draws without effects intended to be applied in payment, and only *for the purpose of raising money by discount for himself, and à fortiori for the acceptor, it is fairly deducible from the cases that notice need not be given.'

It is not only necessary that the drawer should have no effects, but also that he should have no fair pretence for drawing. Now he may have a fair pretence, as in the case of a "fair mercantile agreement," without having any funds in the hands of the drawee, which no