CHAPT. X. $59.

tablished rule of construction already indicated (Vattel. Lib. II. Chap. XVII. § 274). There can be no plainer principle of equity, than that which requires every one to speak the truth, if he chooses to speak at all, in matters which affect the interests of others. He that knowingly misrepresents a fact for the purpose of inducing another to part with his money or goods, is held to his representation in favour of the party who confided in it. It is upon this principle, that the maker of a negotiable instrument is not allowed to impair its value in the hands of a bona fide holder, by denying the existence of a consideration, or by otherwise showing that it is not what it purports to be (Chitty. On Bills. 9; 7 C. & P. 633. Byles. On Bills. 65)."

"On the same principle, a man who procures credit for an insolvent person, by knowingly misrepresenting him a man of ability, is bound to answer in damages for the injury thereby produced. In truth, the merchant law is a system founded on the rules of equity, and governed in all its parts by plain justice and good faith.” (Master v. Miller, 4 T. R. 342).

"When this bill was dressed in the costume of a Pennsylvania bill, it thereby gained a credit in the foreign market which it would not otherwise have received. The Act of 1821, providing ample damages in case of the dishonour of bills drawn in Pennsylvania, contributed to give it that credit. That Act must be considered as operating on the minds of those who purchased it. In Ripka v. Gaddis (Philad., March 1851), it was declared by this Court, after a careful examination of the authorities, that it had been long established in the case of negotiable paper of every kind, that it is construed and governed, as to the obligation of the drawer or maker, by the law of the country where it

was drawn or made; as to that of the acceptor, by the law of the country where he accepts; and as to that of the endorser, by the law of the country where he endorsed.' In Hazelhurst v. Kean (4. Dal. 20), it was affirmed that the parties in the purchase of a bill of exchange must be supposed to have in contemplation the law of the place where the contract was made, and it-that is the law of the place where the bill was drawn *-necessarily forms part of the contract.' In Allen v. the Bank (5 Whar. 425), the same principle was re-asserted. From this rule, thus repeatedly recognised and well established, it follows that the Bank, in the purchase of this bill, must be supposed to have had in contempla- · tion the law of Pennsylvania, providing indemnity for its dishonour. The law of this State was therefore a part of the contract of purchase, and we have no right to impair its obligation."

"There is no reason why the Statute of 1821 should not receive a liberal construction. It has been held that it is not penal, but, on the contrary, it is a remedial Act; that the damages given are not for punishment, but are intended as compensation; that its provisions are just and equitable, and highly necessary in a commercial community, to guard the interests of innocent individuals, and to secure good faith in commercial transactions (5 Wharton, 425). No one can foresee the extent of the injury which the holder of a foreign bill of exchange may suffer from its dishonour. It is not like a domestic obligation, the breach of which can, in general, be repaired by the presence and credit of the holder. But the dishonour of foreign bills may occur, and usually does occur, at points where the holders cannot supervise the result, and where they have neither means nor credit to

*The lex loci contractus.

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provide against the injury. These instruments are generally procured at a premium by the holders, for the purpose of making their purchases in the country where they are payable, or as the means of pursuing their travels, or maintaining their credit abroad. The great distance between the residence of the drawers and that of the acceptors, must necessarily cause great delay in procuring indemnity from the former. In the meantime the loss to the holders, if they rely exclusively upon the bills to maintain their credit, and carry on their business, might be irreparable. Under such circumstances the recovery of the face of the bill only, with the usual interest, re-exchange, and costs, would be but a cold and inadequate remedy for so great an injury. The Act of 1821 was deemed necessary, in order to do justice in such cases, and for the purpose of maintaining our commercial credit in other countries. It should receive such a construction as will best promote the intentions of the legislature in these respects. Upon the whole, we are of opinion, that the bill should be met by the drawers in the same sense in which they manifestly intended that it should be received by the holder, and we think that the District Court was in error in adopting a different rule."

"Judgment reversed, and judgment for the plaintiff in error for 1,453 dols. 31 c., with interest from the 18th May 1852, and costs of suit." *

Moratorium

Bills of Ex

In the particular circumstances of war or Protest of Bills. general calamity, in which, for the temporary with regard to protection of traders, it is deemed necessary by change. the Municipal Legislature of the country thus situated, to extend the usual time within which dishonoured bills must be protested,-what is in

*LENNIG V. RALSTON. 23 Penn. State Dep. p. 137. Daily News of Wednesday, June 7, 1854.

Rules with regard

to Protest of Bills.

Opinion of Pro

$59.

legal phraseology called moratoria,-the foreign drawer and endorsers ought to be subjected to this law of necessity, and indeed on the general principle, that the obligation of the acceptor is governed by the law of the place of acceptance and of the place where the payment is to be effected (lex loci solutionis), which also rules all questions arising with regard to the maturity of the bill, the manner of payment, etc.

The moratorium, however, created by the French Law of 13th August 1870, during the Franco-German war of 1870-1871, with a view to give temporary facilities to acceptors, to comply with their obligations, through extending the limit of the time of protest to a month after the maturity of bills of exchange, was not generally acknowledged by the German Courts. The German Reichs-Oberhandelsgericht at Leipzig, by judgment of 21st February 1871, decided against plaintiffs, in the action for re-exchange against a German drawer, on the plea that the protest for non-acceptance of the bil! (payable in France) was not timely executed in France, but a month after the bill had arrived at maturity, although this was in conformity with the then existing moratorium of the French law.*

With regard to Protest of bills and re-exchange and re-exchange. Prof. von Bar gives the following rules. "The fessor von Bar. conditions of recourse are to be ruled by the law which determines the liability of that obligant in

*For the arguments pro and contra this principle, see Professor Fick. 66 Ueber internationales Wechselrecht in Beziehung auf Fristbestimmungen, inbesondere die französische Wechsel-Moratoriums Gesetze und Decrete," published first in the Central-organ für deutsches Handelsrecht, VII. p. 167, and also separately at Elberfeld, 1872. The consultation held at Berne, 12 March 1871, by Prof. MUNZINGER and NIGGELER, "Rechtsgutachten betreffend die durch die prorogirenden Gesetze und Dekrete der französischen Behörden hervorgerufenen Regressfragen," § 93. CHARLES BROCHER. Etude sur la lettre de change etc. Revue de Droit Intern. 1874 p. 210.

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the bill against whom recourse is desired to be had, and, therefore, as a general rule, by the law of the place from which the indorsation, or the bill itself, as the case may be, is dated; the rule, that the holder is entitled to rely upon the litera scripta being applicable in this case also. For the obligant has bound himself ultimately to pay the contents of the bill, if the conditions required by his own law are fulfilled: we refer especially to the requirement of a protest or notification. Many authors are, however, of a different opinion. The opinion which makes the law of the place of the action the rule, unless it proceeds on the principle that the lex fori is always applicable, if that law does not itself command the applicacation of some other, does not require further discussion, and we need only note, that, as the place of action and the domicile of the obligant will, as a general rule, be the same, the result of that theory will generally coincide with the result of our own. But if it is to be contended against us from another point of view, that, in this matter, all the parties to the bill have subjected themselves to the law of the place of payment, and that it is imperatively necessary, in judging of a right of recourse which affects several parties, that one and the same law should rule all the various claims of recourse, because any obligant who pays must have it in his power to recover from the obligant who is prior to him; we must take exception to the former of these arguments by pleading that the importance of the solemnities required to found a right of recourse lies in reality in this, that the person against whom recourse is to be had, need only pay, if he is provided with summary evidence and immediate intimation of the fact that the contents of the bill have been demanded in vain