RESIDENT MAGISTRATE'S COURT. EXTENDED JURISDICTION.

Daily Southern Cross, Volume XIV, Issue 1020, 7 April 1857, Page 2

RESIDENT MAGISTRATE'S COURT. EXTENDED JURISDICTION.

Appeal to the Supreme Court, and decision of thb iowek Cocht sustained. McFarlane v. Read. This was an action brought by J. S. Macfarlane of Auckland, against G. E. Read of the East Coast, on the undermentioned order " £54 0 0. ••Auckland, 27th December, 1856. "Please pay Mr. Macfnrjane the sum of fifty four pounds ai promised by you to have placed to ihy credit out of proceeds of oil from Henri Potiri of Mumby. Mr. Forester. "Signed G. E. Rbad." The defendant's counsel pleaded, first. That the Older was not a valid bill of exchange by reason of its being made payable out of a particular fund. 2nd. That not having been accepted, the bill was invalid. These objections were overruled by the Presiding Judge, and judgment for Plaintiff was accordingly recorded. Against this judgment, Defendant appealed to the Supreme Court, and the following is the decision of Chief Justice Stephen on the points raised. Macfarlane », Read, On the facts submitted to me in this case, I am satisfied that the decision of the Resident Magistrate must be confirmed. The Ist. objection, That the Bill in question is no Bill of Exchange by reason of its having been made payable out of a particular fund would not be arguable in that form. But taking it to be as I suppose it was intended that it was not a valid Bill, by reason of its being made payable on a contingency, thatis, ou* of a fund not then existing, I !find that all the cases which are collected in Chitty on Bills, P. 137, and sequent, make a Bill invalid only when the fund out of which the Bill is to be paid (supposing it to be made payable out of a particular fund) is not expressed to be then in existence but one which may or not be hereafter in existence. I Thus "Where payable out of the Drawer's growing subsistence. "Out of the fifth payment when it should grow due and it should be allowed by the Drawer." "Out of the money when received." j "Out of the purchase money of the Drawer's house.*' "Out of the Drawer's reversion when sold." "Out of rents to be received " "Out of the Bale of an Inn when sold," &c, &c. These would be imalid, because of the contingencies, for they might never arise. But, where a particular fund is mentioned merely as a direction to the Drawer how to reimburse himself as, "value received out of the premises in Rosemary Lane," "on account of wine had of the Drawer, &c," such Bills would not be invalid because they are not conditional. Now the Bill in question is "Please to pay to Mr. Macfarlane the sum of £54 as promised by you to have placed to my credit out of proceeds of oil from Hemi Poteri," from which we can infer only that certain oil of the Plaintiff had been sold by Defendant, and that it was out of the proceeds of that oil that the Bill was to be paid. We are led to infer that these proceeds were sufficient for the purpose, and that tney were in the hands of the Defendant for the Plaintiffs use. I say we are led to infer this from the plain and ordinary meaning of the order. It may or may not have been true that there were any such funds at all, but that is not the question. The simple question is does the Bill shew that there was no such fund then in existence. In this case too, especially, such a view is agreeable to Justice as well as to Law, for as the action is ■< between the Payer and Drawer, if the Drawer had no such funds in the Draioee's hands, he was guilty of a deception on the Payee, of which he ought not to be allowed to take an advantage. With regard to the 2nd objection, it is made up of two mntters — the non-acceptance by the Drawer, and the want of notice of non-acceptance. As regards the Ist portion, inasmuch as the Plaintiff proved stich non acceptance, and the Defendant did not dispute it at the trial, it is unnecessary now to refer it . ]?psides. this matter is not referred to me" as one of want of evidence or want of sufficient evidence, but simply as a question of Law. But this branchof the objection, as well asthe 2nd portion of the same objection, proceeds on the ground that the Instrument in question is a Bill of Exchange. But I cannot consider it as such because of its wanting one of the most important requisites of a Bill of Exchange, viz., its negotiability, or its being assignable. It is made payable only to the Plaintiff. It may be valid as a Bill, and it may for certain purposes be treated as such . but it is not liable to the same rules in all respects as Bills of Exchange. Those Rules, as well as the na- | ture of the Instrument, are founded on the Law Merchant, or Custom of Merchants. Chitty alludes to this in p. 1 , Chitty on Bills. "There is this peculiarity, that in other contracts and securities there are generally only two parties, or at most a third , as a guaranteo, whereas on account of the assignable and negotiable quality of a Bill of Exchange, there may be, and usually are, many more parties, &c," and in p. 3. "A Bill of Exchange is a security originally invented amongst Merchants in different countries and kingdoms for the purpose of avoiding the necessity for transmitting money itself from the one to the other" (Now how could it be regarded as money if it were not negotiable ?) And in speaking of the utility of Bills, h« says in p. 4. "The vendor of the goods to whom the Bill, is handed as a security may also in his turn obtain goods or money in the way of his trade on the credit of the Bill and the Bill may have the same effect in different persons' hands to whom it may be transferred by endorsement or other- [ wise." And in p. 5, speaking of the peculiar properties j and a (vantages of Bills he says, "Although a Bill of Exchange is a chose in action, yet it may be assigned, so as to vest the legal as well as equitable interest therein the endorsee or assignee." The Plaintiff in his particulars of demand calls it "an order" and this is its proper description. As such, the rules as to protesting for non-acceptance, and giving notice of dishonor, which are applicable to Bills of Ex- ' change by the law of Merchants, do not apply. Sidney Stbphin, Chief Justice. 31st March, 1857. Mr. Russell appeared for the Plaintiff and Mr. George for the Defendant. *\ ]