relations between states, the need of uniformity in legislation concerning this form of international currency became apparent. As a consequence, an advance draft of a uniform law relating to bills and notes was prepared at an international conference at The Hague in 1910, and at the second conference in 1912 the uniform regulation was adopted.

The convention entered into at that time, which governed the adoption of the uniform regulation by its signatories, contained the obligation to introduce into their respective territories, either in the original text or in their national tongues, the annexed regulation concerning bills of exchange and promissory notes payable to order." The signatories were Argentina, Austria, Belgium, Brazil, Bulgaria, Chile, Costa Rica, Denmark, France, Germany, Guatemala, Netherlands, Hungary, Italy, Luxembourg, Mexico, Montenegro, Nicaragua, Norway, Panama, Paraguay, Russia, Salvador, Serbia, Sweden, Switzerland, and Turkey. The delegates from Great Britain and the United States, who assisted at both conferences, expressed the interest of their countries in the undertaking but stated that they were not in a position to become parties to an international convention."

At a meeting of the International High Commission held in April, 1916, at Buenos Aires, the provisions of the uniform regulation were unanimously approved, except the articles relative to the law which should govern capacity in the conflict of laws, by 18 of the Latin-American states.

The uniform regulations are now serving as a basis of study by the economic committee of the League of Nations. A report made by this committee in 1923 reveals that a number of the signatories had taken steps toward ratification before the war. The only states which have adopted it, however, are, as has been stated, Nicaragua, Guatemala, Venezuela, and, substantially, Paraguay and Poland.

Although Poland was not a signatory to the convention, her new law of bills and notes, outside of a few additions, is a virtual word for word adoption of the uniform regulation. A study of the Polish law, therefore, amounts to a study of the synthesis of the most favored doctrines concerning negotiable instruments which have received the approval of nearly all the important commercial countries other than the Anglo-American group. It envisages the bill of exchange as a form of international currency, circulating freely among good-faith holders, independent of the transaction and the relations of the parties from which it proceeded.

* Lorenzen, op. cit., p. 18.

Mitchell B. Carroll, Division of Commercial Laws

The Austrian, French, German, and Russian regulations which had hitherto been in force in different parts of Poland were totally replaced by the decree of November 14, 1924, promulgating the new law of bills of exchange and promissory notes, effective January 1, 1925. This new law is much shorter than the uniform negotiable instruments law, with which we are acquainted in this country, having only 102 sections of subject matter as compared with 184 sections, exclusive of those relating to checks.

While the negotiable instruments law treats first the general principles common to all negotiable instruments and the particular rules governing, first, bills of exchange, and second, promissory notes and checks, the Polish law takes up each kind of instrument as a separate subject. There are, however, under section 1 of the title of the Polish law relative to promissory notes a large number of cross references to provisions relating to bills of exchange. The subject of checks is covered in the separate decree of Novem ber 15, 1924, which is treated further on in this bulletin.

In running over the subjects of the articles in our negotiable instruments law relative to bills of exchange, one finds, under Tile I. the general rules pertaining to form and interpretation, consideration, negotiation, rights of the holder, liabilities of parties, presentment for payment, notice of dishonor, and discharge. In the title devoted exclusively to bills of exchange are found covered form and interpretation, acceptance, presentment for acceptance, protest, acceptance for honor, payment for honor, and bills in a set.

Although the Polish law contains substantially the same subjects. the order of treatment is somewhat different, being drawing and form of the bill of exchange, indorsement, acceptance, bill of exchange guarantee or "aval." times of payment, payment, recourse for nonacceptance or nonpayment, intervention for honor, parts of a set and copies, forgery and alterations, prescription, claims arising from unjust enrichment (not in the negotiable instruments law), general regulations, conflict of laws, protest, and lost bills. At first glance it will be observed that the Polish law is broader in its scope than the American regulations.

A survey of the subjects in the order adopted by the Polish law reveals that while many of them embrace essentially the same principles that are found in the American law, others are distinct in character, and in general there is a great divergence as to detail. In the following paragraphs some of the more salient points of likeness and diversity will be signaled.

BILLS OF EXCHANGE

DRAWING AND FORM OF A BILL OF EXCHANGE

In the first place, with regard to form, the Polish law requires that the word "weksel" (bill of exchange) appear on the face of the instrument. The rest of the requirements are substantially the

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same as in our law, being a claim for unconditional payment of the sum indicated, the name of the drawee, the time and place of payment, the name of the person to whom or to whose order payment is to be made, the date and place of drawing the bill, and the signature of the drawer.

Although the document will not be considered as a legal bill of exchange unless it contains all the above indications, with certain. exceptions, the person signing it bears the same responsibility as for a regular bill of exchange with regard to a good-faith purchaser for value. The exceptions referred to are that (1) bills of exchange not indicating a time of payment are considered payable on sight; (2) if no place of payment is indicated after the name of the drawee, payment may be made at the drawee's place of habitation: (3) bills of exchange failing to indicate the place in which they have been drawn will be considered as drawn in the place indicated after the name of the drawer. (Art. 2.)

As in other Continental countries, a bill may not be drawn payable to bearer. One may draw a bill to his own order or to the order of a third person, and the drawee may be the drawer himself. The instrument may be negotiated even if the "to order" clause is not added.

In case there is any dissimilarity between the amount indicated in figures and that written out, the latter will prevail, and if there are repeated dissimilarities the lowest sum indicated will be taken as binding. While the drawee is not. bound to accept the bill, once he has accepted it he is responsible for its payment.

The "sum indicated" may be in a definite foreign currency, and payment may be required in that currency if expressly stipulated, as by inserting the word "effectiv" after the indication of the sum, or some similar expression. (See section on "Payment," below.).

The Polish law allows a stipulation for interest only in the case of bills payable at sight or within a certain time after sight. In all other kinds of bills such a provision is considered as not written. Unless the rate of interest is indicated in the bill, the legal rate of interest will be adopted, and if no other date is mentioned interest will begin to run from the date of the drawing of the bill. (Art. 5.) A person who signs a bill as an agent, whether without authority or in excess of his powers, is liable for the full obligation.

INDORSEMENT

A valid indorsement of the bill transfers all rights therein, but the indorser remains responsible for acceptance and payment of the bill unless there is a stipulation to the contrary.

Indorsement of a bill may be made in order to negotiate it, even though it contains no "to order" clause or similar authorization. If the drawer indicates on the bill "not to be transferred by power of attorney" or any equivalent expression, the bill may then only be assigned in the ordinary way.

In order to be valid, the indorsement must be unconditional, for the entire amount, and otherwise than "to bearer." If the indorsement is in blank, the holder of the bill may (1) fill in the indorse

The legal rate of interest was reduced from 24 per cent to 15 per cent per annum by an order of the Minister of the Treasury January 24, 1925.

ment with his own name or another person's name; (2) further indorse the bill to another person or in blank; and (3) transfer the bill to another person without filling in the blank indorsement and without indorsing it himself.

This last provision, permitting the holder to transfer an instrument indorsed in blank to a third person without indorsing it himself would, in its result, seem to be a contradiction of the previous rule which prohibits an indorsement "to bearer." The theory prevailing on the continent is, however, that an indorser can not change the original character of the paper, and that while an indorsement in blank may enable a bill payable to order to be transferred as if it were a bearer bill, such an instrument is different from an original bearer bill in that each holder has the power to prevent its further negotiation by delivery by filling out the blank indorsement or by indorsing the bill specially.

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A bill may be indorsed also to the drawee, regardless of the fact whether he has accepted or not, and to the drawer or any other person bound by the bill, all of whom may further indorse the instru ment.

Indorsement must be made on the bill itself or on a supplementary sheet attached to it and signed by the indorser. The indorsement is perfectly valid when no indorsee is indicated, as where the indorser makes an indorsement in blank by only signing his name on the back of the bill.

The legal owner of the bill will be considered the person who holds the bill and who can prove his right thereto by an unbroken series of indorsements, even though the last indorsement be in blank. When an indorsement in blank is followed by another indorsement. it will be presumed that the person who signed it has acquired the bill on the basis of the blank indorsement. A crossed-out indorsement is considered as nonexistent.

If the owner of a bill accidentally loses possession of it, the new holder of the bill who presents his rights in accordance with the preceding rules will not be obliged to give up the bill unless he has acquired it through theft or "through inadmissible carelessness."

Indorsement after maturity has the same effect as indorsement prior to that time, provided it is made before protest of payment. An indorsement made after protest, or after the expiration of the time allowed for protest, has the value of an ordinary cession.

The Polish law provides for certain indorsements which are equivalent to restrictive indorsements in the negotiable instruments law. Article 14 permits the indorser to forbid further indorsement. and under article 17 he may indorse with such phrases as "currency to be paid," "to be cashed," "power of attorney," or any other note indicating the delegation of authority. The indorsee may then exercise his acquired rights but may not exceed his authority. He can indorse the bill only in the capacity of an agent.

Indorsement by way of pledge, a provision which is found in the law of France and other continental countries, is permitted by article 18. Its purpose is to protect the indorser against a dishonest indorsee to whom he has pledged the instrument. Such an indorsement is shown by the stipulation "value as security," "value as

Lorenzen: Conflict of Laws Relating to Bills and Notes.

pledge." or any other words implying a pledge. In confers upon the holder all the rights proceeding from a bill of exchange, but his capacity to indorse is only that of an agent. The parties liable can not set up against the holder defenses founded on their personal relations with the indorser, unless the indorsement has taken place pursuant to a fraudulent understanding.

ACCEPTANCE

The holder of the bill may present it to the drawee for acceptance at any time before maturity. Presentment must be made at the residence of the drawee even though payment is to be effected elsewhere. The drawee may provide that the bill be presented for acceptance with or without an indication of the limit of time for presentment. On the other hand, he may forbid presentation for acceptance, except in the case of a domiciled bill (one payable in another place), or of a bill drawn payable at a certain time after sight. He may also stipulate that presentment for acceptance shall not take place before a certain day. Moreover, every indorser may, unless the drawer has prohibited acceptance, stipulate that the bill shall be presented for acceptance with or without fixing a limit of time for presentment. While bills of exchange payable at a certain time after sight must be presented for acceptance within six months of their date, the drawer may prolong this time, and both he and the indorsers may shorten it.

It is not necessary for the holder to leave the bill presented for acceptance in the hands of the drawee. The latter may demand that the bill be presented to him a second time on the day following the first presentment. Interested parties are not allowed to set up that the right to make this demand has not been exercised, unless this fact. is specified in the protest. Acceptance is indicated by writing on the bill" accepted" or any other equivalent term and the signature of the drawee. It may be signified by the mere signature of the drawee on the face of the bill.

When a bill is payable within a certain time after sight, or when it must be presented for acceptance within a stipulated period, the acceptance must be dated the day it is given unless the holder requires that it be dated as of the preceding day. In case of claims against the drawer and indorser, the holder must confirm the lack of a date by effecting protest within the proper time.

An acceptance must be unconditional. The drawee may restrict it, however, to a part of the amount of the bill. Any other noncompliance with the tenor of the bill operates as a refusal to accept. In any case the acceptor is bound according to the terms of his accept

ance.

If the drawer of the bill has named a place of payment other than the residence of the drawee, without mentioning the person who lives there, the acceptance must specify the person who is to pay the bill. Unless this specification is made, the acceptor is deemed to have undertaken to pay the bill himself at the place of payment. When the bill is payable at the residence of the drawee, he may in his acceptance specify an address in the same locality where payment is to be effected.