— Part
III.
Business of Banking.
reimbursement and give him notice
intention to sell if the But, in the absence of special application is not complied with {p). agreement, he is not entitled to sell before the due date in order to The statement on the put himself in funds to meet the bill((/). face of a bill that it is drawn against specific cargo, goods, or credit, however minutely the same may be described, does not, without the documents of title, create any charge over or claim to the goods in favour of a holder in the event of the dishonour of the bill (r). Nor would it appear that such a statement on the bill conveys any right to the acceptor over the goods apart from the of
625 ^^gt. 13.
Letters of Credit and
tarymlls.
documents of title (s). A banker who has accepted
bills in this form is in no sense a trustee for the holder of the bill with respect to the goods or documents of title, and the bill holders have no right to question the bank's dealings w^ith such goods or securities (t).
1262. The drawer may by formal agreement, apart from the bill, Rights of transfer his residuary rights in the goods to a third person, whether drawer. holder of the bill or not, so long as by so doing he does not interfere with the rights of the acceptor who holds the documents of title (a).
The holder may acquire rights to the goods if they are in the hands of one of two insolvent parties to the bill, both of whom are liable to the holder, and whose estates are being judicially
Rights of holder.
administered (b). Though the holder of the bill of exchange may have the documents of title with it, he will not be able to claim appropriation of the goods to it, if he took the bill and documents with notice of the acceptor's right to have the documents on acceptance. Such notice may be conveyed by the letter of credit, the terms of the bill, or
otherwise
(c).
1263. If a bill is accepted conditionally payable on delivery of documents, the acceptor is not liable unless the documents are
(p) See Re Barned's Banking Go. (1871), L. R. 5 H. L. 157. There (q) Be Barned's Banking Go., supra, is not an authority to the contrary. was in that case an undertaking by the drawers that the bankers should be kept out of cash advances. See per Lord Hatherley, at p. 167. (r) Inman v. Glare (1858), John. 769, at p. 776 Robey dh Go.'s Perseverance Ironworks v. Oilier (1872), 7 Ch. App. 695, 698; Ex parte 'jDever, Re Suse (1884), 13 Q. B. D. 766, per Lindley, L.J., at p. 777. Compare Brown, Shipley & Go. V. Kough (1885), 29 Ch. D. 848. (s) See Phelps, Stokes <h Go. v. Gomher (1885), 29 Ch. D. 813, per Cotton, L.J.,
at p. 819.
Re Barned's Banking Go., supra, per Lord Hatherley, at p. 168. Ranken v. Alfaro (1877), 5 Ch. D. 786. Such an agreement is really only a transfer of the drawer's right to have the goods specifically applied to the payment of the bill, and an assignment of his right to any surplus proceeds which {t)
(a)
the acceptor (6)
is
Ex parte
not entitled to retain. JVaring (1815), 19 Ves. 345.
See
title
Bankruptcy and Insol-
vency. (c) See Ex parte Dever, Re Suse, supra, where a letter of credit which provided that bills of lading were to accompany bills of exchange, and to be surrendered to the acceptor on acceptance, was referred to on the bills of exchange.
H.L.
—
I.
Stipulation
tender of
documents.
