It was held that French law governed and the indorsement was valid: if the absence of
any indication of the agent’s position was a matter of form then this result followed from s
70(a), and if it was a matter of interpretation s 70(b) applied with the same result.
There can be little doubt that this decision is correct and, moreover, that it follows from an
application of s 70(b); if ‘interpretation’ is to bear anything like its ordinary meaning, then
deciding whether certain words on a bill amount to an indorsement by the payee is surely a
question of interpretation. Although Sargant LJ indicated that the validity of a transfer of
a bill under a forged indorsement was probably not a matter of interpretation, little
indication was given of where the line in interpreting ‘interpretation’ was to be drawn.
It is submitted that ‘interpretation’ ought to be given a narrow rather than a wide
meaning, ie s 70(b) should apply only to cases when the meaning of words on the
instrument is in issue. The width of the interpretation of s 70(b) may be considered a matter of little moment,
since, as the English cases show, even if the statute does not apply, the lex situs still
governs under the common law relating to the transfer of corporeal movables. This
would be to ignore the exception to s 70(b); this exception is a unilateral conflicts rule,
which provides where a bill is both drawn and payable in the Republic, indorsements affixed
elsewhere ‘shall as regards the payer be interpreted according to the law of the Republic’.
The reason for giving ‘interpretation’ a narrow meaning is now clear: it restricts the breadth
of the exception. The exception is the statutory enactment of the decision in Lebel v
Tucker, and creates a distinction between inland bills—on which, as regards the
payer, all indorsements must be valid by the lex fori—and foreign bills to which the
ordinary s 70(b) rule applies. Given that the ‘many laws’ rather than the proper law of the
bill approach has been adopted, it is difficult to see why this special rule should apply to
instruments drawn and payable in the Republic.
summarise this