PROOF OF DEBTS AGAINST THE BANKRUPT

ESTATE.

The creditor should take steps to prove his debt as soon as possible after the sequestration order, and should make his proof as perfect as practicable.

The mode of proof is to post to the Registrar an affidavit in the printed form prescribed, and in which must be inserted particulars of the debt. It must also state if the creditor is secured, and should be accompanied by the proper vouchers, as receipts for goods sold and delivered, promissory notes, etc.

Interest at the rate of six per cent. will be allowed on debts or other liquidated sums which are overdue at the date of the sequestration order and provable in bankruptcy.

INDICTABLE OFFENCES BY THE BANKRUPT AND

OTHERS.

Any person who fraudulently conceals any of the bankrupt's property, or makes a false claim against his estate; and any bankrupt who, with fraudulent intent, neglects to make full disclosure of his property to the official assignee, or conceals any of his property to the value of £10, or makes a material omission in his statement of affairs, or prevents the production of his books of account, is liable to a term of imprisonment varying from not exceding two, to not exceeding three years.

PROCEDURE IN OBTAINING A CERTIFICATE OF

DISCHARGE.

1. Publish notice of intention to apply in the "Gazette" and a local newspaper.

2. Give the official assignee 14 days' notice in writing of such intention, obtain from him a certificate of the number of proved creditors, and file an affidavit in answer to his report, if necessary.

3. The official assignee gives seven days' notice of the bankrupt's intention to each proved creditor, and lastly

4. The application is heard in open court on the day fixed, or may be adjourned.

The notice of intention must name a day for such application (as fixed by the Judge or Registrar) not less than 14 nor more than 30 days from the first publication of such notice.

Bills of Exchange and Promissory Notes.

GENERAL REMARKS.

Bills of exchange and promissory notes are a peculiar class: of simple contracts which were required to be in writing originally by the custom of merchants and then by the common law, and to which writing is now essential under the Bills of Exchange Act.

A bill of exchange is an unconditional order in writing addressed by A to B, and directing B to pay to C (a third person) or to C's order, or to the bearer simply, or to A himself, a certain sum of money. A is termed the drawer, B the drawee, and C (or the person to whom the money is payable) the payee. If B consents to pay the sum specified, he writes on the bill the word "accepted," followed by his signature, and he is then termed the acceptor. A promissory note is a written promise from A to pay to B or to B's order, or to the bearer, a certain sum of money. Such instruments are sometimes termed "notes of hand"; and the person making the promise is called the maker; an IOU is not a promissory note.

In all cases consideration (or value) is presumed at law to have been given for the bill or note until the contrary is. admitted or proved.

BILLS OR NOTES-HOW INDORSED.

The indorsement may be "special" or "in blank.” As to indorsement in blank: suppose the bill or note to be payable to "C or order," the mere signature by C of his name on the back will effect such indorsement; and the bill or note with the right to sue thereon is thenceforth transferable by mere delivery.

But suppose C to have indorsed the bill or note "Pay D or order, (signed) C"; then the indorsement is special, and, in order to make the instrument transferable, it must be indorsed by D. The person who holds the bill, etc., after indorsement is termed the indorsee.

EFFECT OF INDORSING THE BILL OR NOTE.

1. A right of action vests in the indorsee against all parties whose names are on the bill, etc., in case of failure in its acceptance or payment.

2. The indorser becomes practically a new drawer (or maker), and is liable to every succeeding holder in default of acceptance or payment by the drawee, etc.

3. The acceptor remains primarily liable on the bill, the drawer and each indorser being considered as his sureties, and therefore liable to the holder in case of default by the acceptor..

But to render such indorsers so liable, certain steps must (generally speaking) be taken by the holder, viz. :

(a) The holder must present the bill for payment by the acceptor upon the date on which it falls due.

(b) If payment is then refused, he must give notice to every other party, other than the acceptor, whose name appears on the bill, and against whom he wishes to secure a right of action.

INCIDENTS OF A BILL OF EXCHANGE OR NOTE.

1. As previously stated, consideration is presumed to have been given for the bill or note until the contrary is admitted or proved; therefore, if a bill, etc., has been drawn, accepted, indorsed, or made without consideration, or for an illegal consideration, a person who gave value for it and took it without notice of such want of, or illegal, consideration, may yet, as a rule, enforce payment for when he took the bill, etc., he is entitled to rely on the presumption that due consideration was given.

2. As it is negotiable, the holder for the time being may sue upon it, though both he, and the fact that he holds the bill, etc., are unknown to the party liable to pay it.

3. Notice of the assignment of the bill, etc., need not be given the party liable.

4. If the instrument has been lost, the loser may, under the Bills of Exchange Act, obtain an order from the Court or a Judge preventing such loss being set up as a defence to an action, provided that a proper indemnity is given the defendant against the claim of any other person.

5. In actions upon bills and notes the defendant must support his plea by an affidavit of its truth, or of such facts as the Judge considers sufficient for the purpose the plaintiff therefore cannot be delayed and put to expense by a merely dilatory plea, such as "never indebted."

It should be noted that a bill or note, the consideration for which is a gaming or wagering debt, is void by a Statute of Anne, and whether or not the holder gave value for it, or was without notice of the illegal consideration.

DAYS OF GRACE.

By immemorial custom, which has now become a legal right, the party or parties liable to pay the amount of a bill or note have three days in which to pay the same after the date upon which the bill, etc., actually falls due. These three days are called the "three days' grace."

OBJECT OF BILLS OF EXCHANGE.

By means of bills of exchange money may be easily and safely remitted from one country to another. For instance, A lives in New South Wales, and has funds in the hands of B (who resides in New Zealand) amounting to £500; now C is going to the latter country, and will want money when he arrives there. He may then pay A £100 or more, and take his bill of exchange (or draft as it is often called) on B for a like sum and receive it on his arrival.

The transaction is thus effected without the risk from robbery, etc., which would be incurred if C were to attempt to take the money with him in coin. As a general rule these transactions are effected through the medium of bankers, a certain rate of exchange being paid by the buyer of the draft.

BILLS OF EXCHANGE ACT.

By this statute the law relating to bills of exchange, cheques, and promissory notes has been declared; but it also provides that the rules of common law (including the law merchant) shall continue to apply to the above instruments so far as such rules are not inconsistent with its express provisions.

The more important provisions of the Act have been noticed below; but, for information as to provisions which have been framed to meet particular cases, the reader is

advised to consult the statute itself. It should be noted that most of the following provisions apply with the necessary modifications to promissory notes as well as to bills of exchange.

INTERPRETATION OF TERMS USED IN THE ACT. Unless the context otherwise requires

“Acceptance” means an acceptance completed by delivery or notification. "Australasia" means and includes Australia, Tasmania, New Zealand, and the Fiji Islands.

"Bearer" means the person in possession of a note payable to bearer.

"Delivery" means transfer of possession, actual or constructive, from one person to another. Constructive possession accrues to the transferee, e.g., where the instrument is delivered to his agent.

"Holder" means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof.

"Indorsement" means an indorsement completed by

delivery.

"Issue" means the first delivery of a bill or note, complete in form, to a person who takes it as holder.

"Value" means valuable consideration.

"Written" includes printed, and "writing" includes print. STATUTORY DEFINITION OF A BILL OF EXCHANGE.

A bill of exchange is an unconditional 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 certain in money to, or to the order of, a specified person, or to bearer.

By the interpretation clause, “writing" includes print.

WHAT CIRCUMSTANCES WILL NOT INVALIDATE A BILL.

Want of date, neglect to specify the value given, or to state that any value has been given for the bill, or to specify the place where it is drawn or that where it is payable, will not invalidate a bill.

DEFINITION OF INLAND AND FOREIGN BILLS. An "inland" bill is a bill which is, or on the face of it purports to be

1. Drawn and payable within Australasia; or,

2. Drawn within Australasia upon some person resident therein.

Any other bill is a "foreign" bill.

Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.

WHEN HOLDER MAY TREAT THE INSTRUMENT AS A BILL OR PROMISSORY NOTE.

Where in a bill

1. Drawer and drawee are the same person; or,

2. Drawee is a fictitious person; or,

3. Drawee is a person not capable of contracting—it is optional for the holder to treat the instrument either as a bill or as a promissory note.

WHEN A BILL IS NOT NEGOTIABLE.

A bill which contains words prohibiting transfer, or which indicate an intention that it should not be transferable, is valid as between the parties to it, but is not negotiable.