The Law Governing Capacity With Regard To Bills Of Exchange
| DOI | http://doi.org/10.1111/j.1468-2230.1951.tb00196.x |
| Date | 01 April 1951 |
| Published date | 01 April 1951 |
| Author | Hugo Fischer |
THE LAW
GOVERNING
CAPACITY
WITH
REGARD
TO
BILLS
OF
EXCHANGE
I.
IN
English law the capacity to incur liability as a party to
a
bill
As
far as English
conflict rules are concerned, this general contractual capacity has
in turn
to
be
answered with regard to the
proper
law of the con-
tract.
It
will be submitted that
in
English law as well
as
in those
systems which have incorporated the Uniform Law
of
bills of
exchange and promissory
notes,3
the locus actus is the connecting
factor for the determination of capacity. Despite this identity
of
construction, the result will differ according to the law applied to
the determination of the locus actus. The locus contractus
of
a
bill signed in Hamburg but delivered in London4 is, according
to English law,5 England, but according to German law Germany.
If
the lex loci contractus could
be
determined
in
a
uniform way
acceptable to both English and Continental laws, an important
step in the direction of the unification of conflict rules would have
been made.
In
the present inquiry an analysis will be suggested
making a uniform determination of the connecting factor-the locus
actus-possibIe and with it the prOper law of a contract on
a
bilI.
It
is this law which according to English conflict rules governs
capacity
'
and although the present article
is
confined
to
questions
of
capacity, the significance of the suggested analysis is not.
is co-extensive with capacity to contract.
11.
CAPACITY
IN GENERAL
1.
THE
THEORIES
OF
SAVIGNY
AND
STORY
The
question as
to
the law to be applied
for
or
against contractual
capacity of the de cujus
is
by no means new.
1
8.
92
(l),
Bills
of
Exchange Act,
1882
(46
&
46
Vict. c.
61).
a
Where the primary classification of
a
document purporting to be
B
bill of
exchange
',s
concerned, the definition
of
s.
3
(l),
B.E.A., will be applied.
Moreover, when
a
bill issued out
of
the United Kingdom, conforms,
as
regards
requisites
in
form,
to
the
law
of
the United Kingdom, it may for the purpose
of enforcing payment thereof, be treated
as
valid between all pemons
who
negotiate, hold
or
become parties to
it
in the United Kingdom
'
(proviso
(b)
of
8.
79,
B.E.A.).
S.
73
includes cheques in the definition of bills.
3
Annex
I
to the Convention signed at Geneva, June
7.
1980, 143 League
of
Nations Treaty Serics
967,
No.
3318.
4
Haarbleicher
v.
Baerselman (1914)
187
~J.T.J.
664.
.,
a
8.
91,
B.E.A.
8
Now
Articles
1
(point
7)
and
2.
German
Rills
of
Exchange Statute
of
June 91.
7
See
II,l,
tnfra.
1983, R.G,Bl.
I,
p. 899.
Arm.
1961
CAPACITY AND
BILLS
OF
EXCHANGE
145
Two different schools can be distinguished at
a
very early time.
Those who hold that capacity is
to
be governed by the personal
status of the person disposing of property and those who stress
the law
of
the place of the transaction itself.
A
prominent pro-
ponent of the former view is Savigny who finds support for his
views in the Continental codes. The latter view, of which Paul Voet
could perhaps be called
a
forerunner,
is
held by Story and appears
to
be
the basis of English law.
It
will, however, be shown that
at
the present time the personal status is not the main criterion of
capacity in the Continental codes and it will also be submitted that
even in English law the &personal statute’ cannot be entirely
disregarded.
Von Savigny answers the question which law governs capacity
to
bind oneself in contract in the sense that the law of the con-
tracting party’s domicile governs the issue.8 Thus, according to
his view, a woman who according to the law
of
her domicile is
incapacitated to undertake
a
suretyship (by virtue of the
S.C.
Velleianum)
or
a
person standing under paternal power who accord-
ing to the law
of
his domicile cannot, without
his
father’s consent,
contract
a
valid loan (by the
S.C.
Illacedonianum),
are
so
incapaci-
tated all the world over.
Although adhering to this view even with regard to bills
of
exchange,O Savigny admits
lo
that the legislator is justified in inter-
fering because
of
the difficulties in ascertaining the various laws
of
domicile as well as the personal circumstances of the debtors on
a
bill.
Story holds that
‘
every person contracting in a country is under-
stood
to
submit himself to the law of the place and silently
to
assent to its action upon his contract
’.ll
‘The law
of
the place
of
the contract acts upon
it,
independently
of
any volitions of the
parties, in virtue
of
the general sovereignty possessed by every
nation to regulate all persons and property and transactions within
its own territory.’la
Where, however, the contract has to be performed elsewhere,
Story accepts
as
regards the validity of the contract
the
view
of
the
Digest
:
Contractum autein non utique eo loco intellegitur,
quo
negotiwm gestum sit; sed quo solvenda est pecunia
lS
and
:
Con-
traizisse unusqziisque in
eo
loco intellegitur, in
quo
ut solveret, se
o
bliga~it.~‘
Two schools
of
thought are therefore to be reckoned with
:
one
holding an almost immutable personal statute
’
to govern capacity,
a
A
Treatise
on
the
Conflict
of
hW8,
translated
by
W.
Guthrie,
Edinburgh
and
London,
1869,
pp.
113,137
and
196.
9
P.
196,
op.
Cit.
10
P.
114,
op.
cit.
11
Carnmentafies
on
the
Conflict
of
Law,
etc.
(8th ed.), Boston,
188,
p.
348.
11
r.
349.
op.
tit.
18
42,
6,
3.
1‘
44,
7,
22.
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