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be made in a contract which carries interest be made in a foreign country, foreign country, our courts will direct the payment of interest according to interest is calculated according the law of that country in which the contract was made (p). to the law of that country.
Thus, Irish, American, Turkish, and Indian interest, have [ * 464 ]
*been allowed in our courts to the amount of even twelve per cent.: for the moderation or exorbitance of interest depends upon local circumstances; and the refusal to inforce such contracts would put a stop to all foreign trade. And, by statute 14 Geo. III. c. 79, all mortgages and other securities upon estates, or other property in Ireland or the plantations, bearing interest not exceeding six per cent. shall be legal; though executed in the kingdom of Great Britain: unless the money lent shall be known at the time to exceed the value of the thing in pledge; in which case also, to prevent usurious contracts at home under colour of such foreign securities, the borrower shall forfeit treble the sum so bor
rowed. Debt-a con- 4. The last general species of contracts, which I have to tract whereby a mention, is that of debt; whereby a chose in action, or determinate sum of money be- right to a certain sum of money, is mutually acquired and any person.
lost (9). This may be the counterpart of, and arise from, any of the other species of contracts. As, in case of a sale, where the price is not paid in ready money, the vendee becomes indebted to the vendor for the sum agreed on; and the vendor has a property in this price, as a chose in action, by means of this contract of debt. In bailment, if the bailee loses or detains a sum of money bailed to him for any special purpose, he becomes indebted to the bailor in the same
comes due to
(p) 1 Equ. Cas. Abr. 289. 1 P. Wms. 395.
(9) F. N. B. 119.
in cases where the debtor becomes But the statute of 58 Geo. III. c. 93,
numerical sum, upon his implied contract, that he should execute the trust reposed in him, or repay the money to the bailor. Upon hiring or borrowing, the hirer or borrower, at the same time that he acquires a property in the thing lent, may also become indebted to the lender, upon his contract to restore the money borrowed, to pay the price or premium of the loan, the hire of the horse, or the like. Any contract in short whereby a determinate sum of money becomes due to any person, and is not paid, but remains in action merely, is a contract of debt. And, taken in this light, it comprehends a great variety of *acquisition; being [ * 465 ] usually divided into debts of record, debts by special, and debts by simple contract.
A debt of record is a sum of money which appears to be Debts of record; due by the evidence of a court of record. Thus, when any specific sum is adjudged to be due from the defendant to the plaintiff, on an action or suit at law; this is a contract of the highest nature, being established by the sentence of a court of judicature. Debts upon recognizance are also a sum of money, recognized or acknowledged to be due to the crown or a subject, in the presence of some court or magistrate, with a condition that such acknowledgment shall be void upon the appearance of the party, his good behaviour, or the like: and these, together with statutes-merchant and statutes-staple, &c., if forfeited by non-performance of the condition, are also ranked among this first and principal class of debts, viz. debts of record; since the contract on which they are founded is witnessed by the highest kind of evidence, viz. by matter of record.
Debts by specialty, or special contract, are such whereby by specialty; a sum of money becomes, or is acknowledged to be, due by deed or instrument under seal. Such as, by deed of covenant, by deed of sale, by lease reserving rent, or by bond or obligation: which last we took occasion to explain in the twentieth chapter of the present book; and then shewed that it is a creation or acknowledgment of a debt from the obligor to the obligee, unless the obligor performs a condition there
unto usually annexed, as the payment of rent or money borrowed, the observance of a covenant, and the like; on failure of which the bond becomes forfeited and the debt becomes due in law. These are looked upon as the next class of debts after those of record, being confirmed by special evidence,
under seal. by simple con- Debts by simple contract are such, where the contract tract.
upon which the obligation arises is neither ascertained by matter of record, nor yet by deed or special instrument, but
by mere oral evidence, the most simple of any; or by notes [ *466 ) *unsealed, which are capable of a more easy proof, and
(therefore only) better, than a verbal promise. It is easy to see into what a vast variety of obligations this last class may be branched out, through the numerous contracts for money, which are not only expressed by the parties, but virtually implied in law. Some of these we have already occasionally hinted at; and the rest, to avoid repetition, must be referred to those particular heads in the third book of these commentaries, where the breach of such contracts will be considered. I shall only observe at present, that, by the statute 29 Car. II. c. 3, no executor or administrator shall be charged upon any special promise to answer damages out of his own estate, and no person shall be charged upon any promise to answer for the debt or default of another, or upon any agreement in consideration of marriage, or upon any contract or sale of any real estate, or upon any agreement that is not to be
performed within one year from the making; unless the agreement, or some memorandum thereof, be in writing, and signed by the party himself, or by his authority.
But there is one species of debts upon simple contract, which, being a transaction now introduced into all sorts of civil life, under the name of paper credit, deserves a more particular regard. These are debts by bills of exchange, and promissory notes.
A bill of exchange is a security, originally invented among change. merchants in different countries, for the more easy remittance
of money from the one to the other, which has since spread
Bills of ex
itself into almost all pecuniary transactions. It is an open letter of request from one man to another, desiring him to pay a sum named therein to a third person on his account; by which means a man at the most distant part of the world may have money remitted to him from any trading country. If A. lives in Jamaica, and owes B. who lives in England 10001., now if C. be going from England to Jamaica, he may pay B. this 10001., and take a bill of exchange drawn by B. in England upon A. in Jamaica, and receive it when he comes thither. Thus does B. receive his debt, at any distance of place, by transferring it to C.; who carries over his money *in paper credit, without danger of robbery or [ * 467 ] loss. This method is said to have been brought into general use by the Jews and Lombards, when banished for their usury and other vices; in order the more easily to draw their effects out of France and England, into those countries in which they had chosen to reside. But the invention of it was a little earlier: for the Jews were banished out of Guienne in 1287, and out of England in 1290 (r); and in 1236 the use of paper credit was introduced into the Mogul empire in China (s). In common speech, such a bill is frequently called a draft, but a bill of exchange is the more legal as well as mercantile expression. The person, however, who writes this letter, is called in law the drawer, and he to whom it is written the drawee; and the third person, or negotiator, to whom it is payable (whether specially named, or the bearer generally) is called the payee.
These bills are either foreign, or inland; foreign, when Foreign. drawn by a merchant residing abroad upon his correspondent in England, or vice versa; and inland, when both the Inland. drawer and the drawee reside within the kingdom. Formerly foreign bills of exchange were much more regarded in the eye of the law than inland ones, as being thought of more public concern in the advancement of trade and com
But now, by two statutes, the one 9 & 10 W. III.
(r) 2 Carte. Hist. Eng. 203, 206.
(8) Mod. Un. Hist. iv. 499.
c. 17, the other 3 & 4 Ann. c. 9 (28), inland bills of exchange are put upon the same footing as foreign ones; what was the law and custom of merchants with regard to the one, and taken notice of merely as such (t), being by those statutes expressly enacted with regard to the other. So that now there is not in law any manner of difference be
tween themt. Promissory Promissory notes, or notes of hand, are a plain and di
rect engagement in writing, to pay a sum specified at the time therein limited to a person therein named, or sometimes to his order, or often to the bearer at large. These also, by the same statute 3 & 4 Ann, c. 9, are made assignable and indorsable in like manner as bills of exchange.
But, by statute 15 Geo. III. c. 51, all promissory or other *468 ] notes, *bills of exchange, drafts, and undertakings in writ
ing, being negotiable or transferable, for the payment of less than twenty shillings, are declared to be null and void; and
(t) 1 Rol. Abr. 6.
(28) The acts, which at first were temporary, were made perpetual by
7 Ann. c. 25.
+ Mr. Christian observes, that “one inland bill, payable at or after sight, very important distinction between fo- can be protested; or which is not drawn reign and inland bills of exchange still payable at some time after date. (4 T. remains unaltered by the statutes; viz. R. 170).” in a foreign bill, in order to recover [In Windle v. Andrews, (2 Barn. & against the drawer or indorsers, it is Ald. 701), it was decided, that, although necessary that the bill should be pro- the indorsee of an inland bill of extested for non-acceptance or non-pay- change has no remedy for interest unment; (5 T. R. 239); but a protest is not der the statute of Ann., unless the bill necessary upon an inland bill, to en- has been regularly protested; still, that able the holder to recover the amount statute does not take away any remedy of it against the drawer or indorsers; which the holder of a bill of exchange and the only advantage of a protest had previously; and the drawer of a upon an inland bill is to give the hold- bill of exchange, which is not duly paid, er a right to recover interest and ex- is liable at common law for interest, alpenses incurred by the non-acceptance though no protest was made.-Ed.] or non-payment. (Ld. Raym. 993). No