Story Case

Charles Kremer was indebted to Andrew Meade for a purchase of clothes. On the first of the month, after delivery of the order, Meade sent his collector to Kremer with the following instrument:

"$150. Chicago, June 1, 1915.

Mr. Kremer, I shall be pleased if you will pay Simon Filigree, my collector, or his order, the sum of one hundred fifty dollars.

Thank you. (Signed) Andrew Meade."

Kremer stated that he could not pay until the first of March, and, therefore, wrote on the back of the instrument:

"Accepted and will pay March 1.

(Signed) Charles Kremer."

Before taking the instrument, Filigree, the agent, requested that Kremer add a government revenue stamp, since the paper was a bill of exchange. Is this correct?

Ruling Court Case. Little Vs. Slackford, Moody, And Malkin, English Reports, Page 171

Slackford, being indebted to James Steerforth for work done, gave him an unstamped paper, addressed to Little in the following words:

"Mr. Little: Please let the bearer have seven pounds and place it to my account and you will oblige, your humble servant.

R. Slackford."

Little paid the seven pounds to James Steerforth. Thereafter, Slackford refused to pay the amount paid to James Steerforth for his benefit. Little, thereupon, brought this suit. In order to prove the claim, he introduced the foregoing writing. By Slackford it was contended that the paper was a bill of exchange and as it was not stamped as required by law, was not admissible in evidence.

Decision: Every writing must contain an order upon the drawee in order to be a bill of exchange. Mere polite words of request indicating a right upon the maker to order the drawee, are not sufficient as an order. The words in this case did not constitute an order. Therefore, the instrument is not a bill of exchange and is admissible in evidence without being stamped. Lord Tenderden, Chief Justice, said: "I think no stamp is necessary; the paper does not purport to be a demand made by a party having a right to call on the other to pay. The fair meaning is, 'You will oblige me by doing it.'"

Ruling Law. Story Case Answer

It is an essential requirement of a valid bill of exchange that it shall contain an order by the drawer upon the drawee to pay the amount therein named to the payee. If an instrument does not contain such words, then it is not a bill of exchange. Mere polite words of request are not sufficient to constitute an order to pay. The words must be such that they indicate a demand to pay by a person having the right to make that demand. The instrument in the Story Case is not a bill of exchange, because it does not contain a command to pay. But when Kremer wrote his acceptance on the reverse side of the paper he made it his own note, and a war revenue stamp should have been added.