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OF

BOOK I. TITLE VIII.

OF

THE COMMERCIAL CODE.

Presented to the Legislative Body, by Messrs. Bégouen, Fourcroy, and Bérenger, Counsellors of State.

SITTING OF THE SECOND SEPTEMBER, 1807.

GENTLEMEN,

We are charged by his majesty the emperor and king, to present to you Title VIII. of Book I. of the project of the commercial code: this title relates to bills of exchange and promissory

notes.

The word, bill of exchange, cannot be pronounced without immediately connecting itself in our minds with commerce; without our reflecting upon its influence on the happiness of mankind, the prosperity, the wealth, and the power of states.

Commerce, by the distribution of labour, combats idleness, that corrupter of morals; it encourages industry by furnishing raw materials for manufactures, and by procuring the sale of their products; it gives activity to reproduction by promoting consumption, and thus makes agriculture flourish; it has carried civilization to all parts of the globe, and bound all the nations of the earth to one another.

Commerce, the importance of which profoundly felt, has dictated to the greatest man in history, to the hero-pacificator of Europe, these memorable words; "that a general peace is the object of all his prayers; but that he desires France to have commerce and colonies." Commerce, I observe, is indebted to bills of ex

change for the greatest part of its progress, and for the immense developments, which, for these several centuries, it has exhibited.

In times even when people had advanced so far as to give to the precious metals the form of money, the charges and risks of transportation indispensable for purchases and exchanges abroad, imposed heavy fetters on the commerce of the interior, and rendered it almost impracticable with foreign nations.

Bills of exchange were afterwards invented.

This event, which forms in the history of commerce an epoch almost equal to that of the discovery of the loadstone and of America, has removed all those obstacles. Bills of exchange have liberated moveable capital; they have facilitated its circulation and disposition; they have created an immense sum of credit. Since that period commerce knows no other bounds than those of the world.

Whether Europe be under obligations for this fine conception to the commercial genius of the Jews, driven out of France and refuged in Lombardy, or that we must attribute it to the Florentines, expelled from their country, by intestine divisions, and retired into France; this contract, so concise in its form, so energetic in its expression, so simple in its object, so fruitful in results, holds the first rank among instruments of credit.

By this character it has engaged the attention of the most distinguished civilians.

Their sagacity has been exercised in the scrupulous examination of its essence. In the analysis which they have made of it, they have found united the contract of mandate, (bailment,) and that of exchange or of sale.

From the nature of these contracts are derived all the principles and rules which legislation has established, in relation to bills of exchange.

These principles are,

That he to whose order the bill is drawn, transfers the property by an endorsement regularly made, without any need of giv ing notice of the transfer.

That the drawer and the endorsers are bound as sureties for the payment of the bill when due; and the holder is reciprocally obliged to present the bill for payment at its maturity.

That the holder who has, at the maturity of the bill, in default of payment, done all the acts prescribed by the law, may have recourse for reimbursement, to the endorsers, to the drawer, and also to the subscribing sureties, if there be any to the bill; all the signatures to the bill of exchange, under this reciprocal obligation, being jointly and severally responsible, the one for the other, to the amount of the bill.

All the commentators have also thought, that it is the essential character of a bill of exchange that it should imply a remittance of money from one place to another, that is to say, that the bill ought to be payable in another place than that in which it is drawn.

The ordinance of 1673 did not textuarily determine this question, but the unanimous opinion of the jurists had settled the jurisprudence on this point; and although several chambers and tribunals of commerce, and even some courts of civil law, had expressed a wish to see this principle yield to considerations of advantage, of convenience, and of facility for internal commerce, it has been deemed, on the contrary, necessary to give sanction to it by a provision in the text of the present code. It has been thought that this contract, fortified by the law with such special protection, ought to have certain forms, and a character which will eminently distinguish it from all other negotiable paper.

I ought, gentlemen, to mention to you that a few changes have been made in the ordinance, which were indicated by the experience of a century, and solicited by justice, or the interests of commerce in the first place, you will remark that which relates to the provisions of article 16. of title 5. of the ordinance of 1673.

That article restored the negligent holder to his remedy against the drawer and endorsers, which had been declared to be

forfeited in article 15. and consequently subjected the endorsers as well as the drawer to prove, in case of denial, that those on whom the bill was drawn had funds in hand when the bill became due.

It results, on the contrary, from the provisions of article 117. and 168. of the project of the law now submitted to you, that in case of protest tardily made by the holder, the forfeiture of his remedy against the endorsers is fatal and without relief.

In order to establish the justice of this provision, it is sufficient to consider, that if on the one hand the drawer contracts an obligation to have funds in the hands of the drawee, when the bill becomes due, the holder on his part contracts not less rigorously to present the bill at that period for payment.

From the union of these two obligations the rights of all the parties to the bill are derived.

If the protest has been made in due time, the holder of the bill may have recourse to the endorsers and the drawer, in the mode and time prescribed.

If, on the contrary, the protest has been tardily made, the holder has no longer any right of action either against the drawer or endorsers; his remedy in this case was expressly taken away by article 15. of the ordinance.

However, it is highly just that the holder should be relieved from this forfeiture of his remedy, in regard to the drawer, if the latter do not prove that the drawee was indebted to him, or had funds in hand belonging to him, at the time the bill became due.

Nothing is more just in regard to him; for the drawer in delivering the bill of exchange receives value for it; he enters into a personal obligation to see that funds be ready in the hands of the drawee to meet the bill when due. If he has not done so, the holder has done him no injury by the delay of the protest; he would, on the contrary, profit most unjustly by depriving the holder of his remedy; and the amount of the bill of exchange, which he would then have received, without giving any value in return, would be, on his part, a real robbery.

It is not the same with respect to the endorsers; for if it be just, if such be the text and the meaning of the law, that the drawer who proves that he had made provision to meet the bill be discharged, the rigorous and legal consequence is, that the endorsers would be exonerated without being compelled to make this proof; because each of them gave value for the bill in taking it.

Because the joint and several responsibility of the endorsers with the drawer expires on the day when the holder is in default, for not having fulfilled his express obligation of presenting the bill when due.

Because it ought not to be in the power of the holder, by his act, to render the condition of the endorsers worse, by prolonging indefinitely the time of their guaranty, a prolongation which would bring upon them an increase of risk, since, during this time, their prior endorsers, and the drawer himself, might become insolvent.

Because it would be unjust that the endorser, who has already given value for the bill, who has fulfilled all his obligatious, should be liable to pay the amount of it a second time, whilst the holder, alone in fault, should be indemnified.

Finally, because there is no just grounds to restore, in prejudice to endorsers, the title of the holder, barred by the forfeiture of his remedy, and to revive in his favour, the joint liability of the endorsers, extinguished with the term of their engagement.

A remarkable provision again in the new law is, the abrogation of the days of grace, of favour, of usage, and of local custom, for the payment of bills of exchange.

The ordinance of 1673 had granted ten days to the holder in which to make his protest for non-payment; but a declaration of the king having given to the accepter the right of demanding these ten days, the consequence was, that they had become an absolute extension of the term of payment expressed in the bill, so that the holder could not legally have the bill protested till the last of the days called days of grace. Thus, the real maturity of the bill was fixed on this last day, instead of that expressed in

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