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Member o BILLS, NOTES AND CHEQUES THE BILLS OF EJCHiNGE iCT, 18P0 CANADA, AND THE AMENDING ACT OF 1891 WITH NOTES AND ILLUSTRATIONS ™'^.^r^'''^''' '^''^''''" ^^^^ AMERICAN DECISIONS, AND RLiERENCES TO ANCIENT AND MODERN FRENCH LAW. BY J. J. MACLARE^, Q.C., D.C.L, LL.D., Me,nlerof tke Bar of Ontario and QneUec: Larc E.amner of Victoria University: and Honorary Lecturer on Comparative Jurisprudence in the University of Toronto. TORONTO : THE CARSWELL CO. (Ltd.) LAW PUBLISHERS, 1892. M3'/ 233354 Entered according to Act of the Parliament of Canada, in the year one thousand eight hundred and ninety-two, by The Cabswell Company (Limited), in the office of tl'.e Minisier of A^'rioulture. PREFACE. lu the course of his work upon the Act of 1890 the writer found that in a number of instances where our ParHament had not followed the Imperial Act, the changes had not been carried into other sections where this was necessary' in order to make the Act consistent with itself. The absence of any general rule for unprovid-^ i for cases it was also thought would interfere with the uuifor- mity of the law in the different provinces which was one of the main objects of the Act. The Minister of Justice signified his approval of these changes, and the amending Act of 1891 was introduced and passed. The present work was delayed in order that these amendments might be embodied in their proper places. Meantime the notes and illustrations were extended beyond the limits originally contemplated. The references to cases, statutes and other authorities in the work number nearly four thousand. The number of separate decisions cited is two thousand three hundred, and the number of illustrations nearly a thousand. The decisions are brought down to January, 1892. Where a summary of the law is given for any country it is taken as a rule from the latest edition of one of the leading text writers. Thus, fur a summary of the law in England reference is uaunlly made to Byles on Hills, 15th IV PREFACE. ed., 1891, or to Chalmers, 4th ed., 1891. For the United States Daniel on Negotiable Instruments, 4th ed., 1891, and Randolph on Commercial Paper, have heen selected. For the old French law, Pothier, Contrat de Ghanqe, is usually cited ; and for the modern French law, the Code de Com- merce, and Nouguier, Lettres de Change, 4th ed., 1875. The Canadian cases cited number nine hundred and fifty, the English about the same number, and the Ameri- can nearly four hundred. It will be observed that the illustrations have been arranged in three classes in the foregoing order. The Canadian cases have been sub- divided by provinces, observing the order [in which the provinces are usually named. The date of each decision has been given, and the cases in each class arranged in chronological order beginning with the oldest. The principal English and Canadian Statutes have also been given for convenience of reference and for comparison with the dates of the cases. The Canadian cases comprise nearly all the decisions of the Supreme Court and of the provincial Courts on the subject, except those based on repealed statutes, such as the Stamp ^ict, and the old laws regulating pleading and procedure, and those which depend upon the facts of the particular case. A large proportion of the Canadian cases will be found in the illustrations, where they are given with considerable fulness. Special attention has also been paid to the decisions upon the Imperial Act of 1882. Not only those in the regular English Law Reports have been cited, but also the iScotch and Irish cases, and those in the other English Reports including twenty-five cases from the London Times Law Reports. These decisions are of special value on account of the great similarity of the two Acts, especially in view of the provision in section 8 of the amending Act PREFACK. [ns be Ihe Ish ion lue LCt of 1891, that the rules of the common law of England in- cluding the law merchant shall apply to Canada, except in so far as they are inconsistent with the express pro- visions of the Canadian Act. The decisions selected from the great mass of American cases have been chiefly from the reports of the Supreme Court of the United States, and of the higher Courts of those States which follow most clobely the common law and the law merchant. They are, as a rule, upon points that are not affected by local statutes or usages. Preference has also been given to decisions of these Courts in the leading commercial centres with which Canada has most inter- course. As so many of the Canadian decisions contain allusions to the laws in force in the various provinces before the present Act, there will be found in the Appendix not only Chapter 123 of the Revised Statutes of Canada, but also the Articles of the Civil Code of Quebec upon the subject, and the Nova Scotia and New Brunswick Statutes, which were repealed when the present Act came into force. In order to facilitate reference, in addition to the alphabetical index at the end of the volume, a somewhat full table of contents is given at the beginning. The list of overruled cases is, of course, only a partial one, but it is hoped that it may be found useful. It will be observed that a number of cases are there referred to that are not to be found in the body of the work. J. J. M. Toronto, April, 1892. 3 4 5 CONTENTS. Cases Cited , . Addenda et Corrigenda Overruled Cases Abbreviations Introduction . . BILLS OF EXCHANGE ACT, 1890. Former Legislation in Canada and the Provixc ks Pauk. xiii. xxxiv. MXV. xli, xlv. Sections or THE Act. Preliminary— 1 Short Title of the Act— Commencement 2 Interpretation of words used PART II. 3 4 5 6 Bills of Exchange— Form and Interpretation. Bills of Exchange defined— Notes and illustrations Inland and foreign bills distinguisJied Bill presumed to be inland unless the contrary appear. If different parties to bill are the same person When instrument may be treated as either bill or note. Address of bill to drawee or drawees— Certainty 21 88 di 52 65 65 56 58 VIU CONTENTH. Sbotionb. 7 Certainty required as to payee — Fictitious payee Vngliano v. Bank of Kn^land 8 Negotiable and non-negotiable bills — to bearer — to order Chose in action 9 Sum payable — interest — instalments — exchange.. 10 Bill payable on demand — no days of grace 11 Bill payable at a future time, certain to happen , . 12 Omission of date — filling up — wrong date 18 Date presumed to be correct —antedating — postdating . . 14 Computation of time of payment — days of grace — holiday Payable^at or after sight — at a month or months 16 Referee in case of need — resort to him optional 16 Liabilities may be negatived or limited, or duties waived 17 Definition of acceptance Requisites of acceptance 18 Time for acceptance — before completion — if overdue 10 General and qualified acceptances . . Examples of qualified acceptances 20 Inchoate instruments — signature on blank paper Filling up — reasonable time — authority given. . 21 Contract not complete until delivery Requisites as to delivery — presumption Capacity and authority of Pahties — 22 Capacity of parties — capacity to contract. . Corporations as parties to bills . . .' 28 Signature essential to liability Assumed name — firm signature . . 24 Forged or unauthorized signature . . Payment of cheque on forged indorsement 26 Procuration signatures — when principal bound . , 26 Signing as agent or in representative capacity Officers of corporations The Consideration for a Bill — 27 Valuable consideration — antecedent debt Failure of consideration 28 Accommodation party to a bill . . 29 Holder in due course defined . . Defects of title, fraud, duress, etc. 80 Presumption of value and good faith — proof Bill for " patent right " Negotiation of Bills— SI Negotiation of bills — to bearer — to order . . Page. lU N 60 m ,4] 64 ■ ^'^ 9 ^'' 121 9 ] ■ 4,; 124 I 131 ■ 47 . ■ i:}8 ■ 4H 142 ■ 4!) 145 .50 146 158 51 15!) 15!» 52 106 17ti L 183 >H 186 4 19o 5 198 203 6 206 CONTENTS. Kkction 32 aa M ;t.'> ati 87 38 8. TniiiBfer without, iiuloi-Bement . . llo(|ui8itc8 of i\ valid iiidorfleinent— allonjje Order of indorsements Conditional liidorHementH not binding,' IndorHenient in bltvnk— Hpecitvl indorHenient .. Restrictive indorHenient—rif^hts under When ni'jiotiable bill ceiiHea to bo ho Net;otiation of bill to party already liable.. Riglits of holder — action on bill — holder in due course General Dutieh ok the Homu'.b — ait When presentment for acceptance is necessary . . JO Presentment of bill payable at or after sight . . 41 Rules as to presentment for acceptance K.xcuses for non-presentment 42 Drawee allowed two days to decide as to acceptance 43 Bill dishonored if not accepted . . Holder's recourse aj^ainst drawer and indorsers . . 44 Qualified acceptance — holder may refuse If taken, assent of drawer and indorser necessary 4") Presentment for payment — effect of not presenting Rules as to presentment — time — person Proper place for presentment 41 251 268 258 254 255 258 263 268 270 273 290 292 297 299 300 306 310 312 315 317 319 319 324 327 % CONTENTS . Srctions. DiacHAKOk; of Bill — •")!) Discharge by " payment in clue course" Prescription or Statute of Limitations Payment by drawer or inslorser not discharfje tiO Acceptor the liohier at maturity — confusion ♦51 Waiver by holder as against acceptor, a discharge Holder may discharge any party to bill <)2 Discharge by cancellation of bill Erroneous cancellation not a discharge (>'{ Material alteration discharges bill Acceptance and Payment for Honor — 64 Acceptance for honor supra protest . . 65 Liability of acceptor for honor . . 66 Presentment to acceptor for honor . . 67 Payment for honor — act of honor Lost Instruments — 68 Holder's right to duplicate of lost bill 69 Action on lost bill— security Bill in a Set — 70 Rules as to bills in a set — parts Conflict of Laws— 71 Rules where laws conflict . . Paqr. 332 341 349 352 353 355 359 360 361 30«; 369 M 370 fl 371 W ■Jo 374 Ml 375 Ss lin 380 PART III. Cheques on a Bank — 72 Oiieque defined — Provisions as to demand bill apply 73 Presentment of cheque for payment 74 Duty and authority of bank to pay — revocation . . Crossed Cheques — 75 Crossing defined — general . . Special crossing — " not negotiable " 76 By whom cheque may be crossed or uncrossed 77 The crossing a material part of cheque 78 Duties of bank as to crossed cheques . . 79 Crossing cheque a protection to bank and drawer. . 80 Holder taking " not negotiable "' cheque 81 Protection to bank collecting crossed cheque 395 401 403 407 407 408 40!) 409 410 411 1 412; CONTENTS. XI PART IV sections. Promihsory Notes — Promissory note defined . . Delivery necessary to complete note Joint and several notes Presentment of note payable on demand Presentment of note for payment. . Liability of maker — estoppel. . Application of Part II. to notes . . Paoe. 411 42S 4-21 424 427 403 432 PART V. BCPPLEMENTARY — Good faith defined Signatures by agents — signatures of corporations Computation of time — " non business days " When noting is equivalent to protest . . Protest by justice of the peace Notarial charges for protests Forms of protests Dividend warrants may be crossed . . . . Repeal of Acts in second schedule . . Certain Imperial Acts not to be in force in Canada Construction with other Acts, or documents Commencement of Act — not retroactive Amending Act ok 1891 Common law of England — law merchant Other NEooTiAnLE Instruments . . 433 435 438 438 435) 440 443 444 445 44rt 447 447 44'.> 4-)0 454 FIRST SCHEDULE. Forms A. to J. -Protest— Notice 40O SECOND SCHEDULE. Ekactments Repealed 468 xil CONTENTS. APPENDIX I. ADI.mOSALF0RM8-BlLL3-CHEQUE8-NOTE8 469^ APPENDIX II. Statutes Rev. Stat. Canada, Ch. 123 Consolidated Rule 303, Ontario •■_•• "^ ,JJ^,,a Civil Code of Lower Canada-Bills of Exchange, Notes and Cheques Code of Civil Procedure Rev. Stat. N.S Rev. Stat. N.B 41^ m m Inuex i Allen V. ( " V. ] " V. ] " V. I i " V. f- '• V. ^ jAUiaiice 1 Allison V. lAlmon V. lAlmoiir V, CASES CITED A. Abbott V. Fi.sher, 17ti. " V. Hendricks, 51. Abell V. Morrison, 37o. Abrey v. Crux, 38, !(>".). Achfson V. Fountain, 'J22, lix. Adams v. Nelson, ;tt4. " V. Thomas, 37. Adansonia Co., R>', 138. Atrra Bank, ii^, 312. " V. Leightun, 17{>. Agricultural S. & L. A. v. Federal Bank, 3'.)9. Alabama Coal M. Co. v. Brainard, 59. Alcock V. Smith, 384, .388. AMers(jn v. Langdale, 3(13. Aldous V. Corn well, 305. Alexander v. Burchfield, 308, 402. " V. McKenzie, 158. V. Sizer, 1(J3. _ " V. Tlumias, 85, Allen V. Clark, 330. V. Kdmund-son, 258, 280. V. Kemble, 75, 387, 392. V. McNaughton. 2t;7, 389. V. Sea, Fire & L. A. Co., 35, 37. V. Suydam, 242. lAlliance Bank v, Carey. 393. lAllison V. Central Bank, 28, 234. lAlmoii V. Cock, 1.57. |Almour V. Cable, 172. " V. Banque .Tacques Cartier, 1.56. llsager v. Close, 122. Ima/.on Ins. Co. v. Quebec & Gulf Ports S. S. Co., 228, 340. Imiss. Re„ 40, 100. Irnmidown v. Woodman, 93. bnner v. Clark, 54. Imory v. Merryweather, 229. Ancher v. Bank of England, 223. Ancona v. Marks, 236. Anderson v. Archibald, 272, 2^*0. " V. Jennings, 109. V. Park, 40. V. Todd, 8. " V. Weston, 88. Anderton v. Beck, 272. Andrews v. Franklin, 84. V. Pcmd, 384. Androscoggin Bank v. Kimball, s7. Angers v. Ermatinger, 340. Angle V. N. W. Mutual L. Ins. Co., liK). Anglin v. Kingston, 450. Anglo-Greek N. Co. Re, 233. Aniba v. Yeomans, 213. Anon. 1. Ld. Ravm., 241, 428. " 12 Mod., .w9. Arcedeckne n\ 484. Archer v. Lortie, 300, 428. Archibald v. Brown, 4.31. Armimr v. Gates, 37, 102, 170. Armstrong v. Chadwick, 208. " V. Christiani, 278. " V. (iarafraxa, 438. Arnold V. Caldwell, 400. " V. Cheque Bank, 121, 122. V. Dresser, 202. Araot V. Svuionds, 29, 212. Arpin v. P'oulin 194, 195. Arthur v. Lier, 357. Ashpitel V. Bryan, 63, 08, 314. Astley V. .Tohnson, 177. Atkins V. Arcedekne, 484. " V. Owens, 338. " V. Wardle, 101, 133. Atkinson v. Hawdon, 303. Attenborough v. Mackenzie, 232, 338. Atty.-Gen. v. Bouwens, 455 " V. Stewart, 8. •' V. Theobald, 448. XIV CASES CITED. m Attwood ' . Emerj;, 117. " V. Miinnings, 15.S. Atwood V. Crowdie, 182. Auldjo V. McDougall, 60, 62, 155. Aurele v. Diirocher, 208, 416. Ayrey v. Fearnsides, -18. Ayton V. Bolt, 345. Awde V. Dixon, 11(5. B. Backhouse v. Charlton, 405. Badeau v. Brault, 12!). Bailey v. Bidwell, 201. " V, Bodenhani, 248. " V. Edwards, 358. " V. Porter, 278. liaillie v. Dickson, 288. Bain v. (iregory, 278. " V. W. & ¥. Ky. Co., 3!»3. Baker v. Birch, 266. " V. Dening, M. " V. Read, 17.S. Baldwin v. Hitchcock, 2.59. " V. Ricliardson, 2i)2. Ballingalls v. (Jloster, 252. Ballvjch V. Binnry, 287. Banifield v. Tupper, 348. Banbury v. Lissett, 113. Bank of Ale.xandria, v. Swann, 271*. " America v. Copland, 3!tl. Australasia V. Breillat, 142. Bengal v. Fagan, 188. V. McLend, 435. " B. N. A. V. Ellis, 221. V. Jones, 281, 334. V. Ross, 282, 2!»3. Commerce v. Adamson, 16. V. Bogy, 311. " " V. Green, 271. " " V. (iurley, 170. " " V. North wood, 3.58. V. Woodward, 181. " England v, Newman, 328. " " V. Vagliano, (»4. " Ireland v, Arciier, 105. " Michigan v. (Jray, 282. " Montreal V. Armour, 33.5. V. Audette, 196. " " V. Cameron, 1!)2. V. De Latre, 100, 161. V. Grover, 278. " V. Harrison. 327. " V. Knapp, 496. V. Langlois, 219. V. Little, 459. V. Page, 154. V. Scott, 2<.»4. V. Smart, 100, 162. K it (< II tl l> Bank of Montreal v. Thomas. 105, 313. " N. B, V. Knowles, 2(J8, 292. " " V, Millican, 289. " N. S. V. Lepage, 116. " Ottawa, V. Harrington, 135. " Scotland v. Dom. Bank, 361. " Syracuse v. Holliater, 429. " Toronto v. Cobourg P. &, M. Ry. Co., 457. V. McDougall, 19.5. " l^pi)er Canada v. Bartlett, 170, 334. V. Blwr, 287. V. Cooley, 293. " " V. Jardine,3)8. V. .Tone*, 37. •' " V. Ockermann, 358. " " V. Parsons, 110. " " V. Ruttan, 234. V. Sherwoid, 334 V. Smith, 277, 290. " ♦' V. Street, 276. " " V. Turcotte, 504. " U. S. V. Bank of Georgia, 313. " V. Cariieal, 429. " V. Hatch, 280. " V. Smith, 259. "v. IT. S., 327. " Utica V. Phillips, 289. " Van D. Land v. Bank of Vic- toria, 121. Banqiie .Tacciues Cartier v. Banque d'Epargne, 149. " Jacques Cartier V. Cote, 505. V. Leblanc, 238. " " V. Lescard, 110, 238. " " v.Strachan, 376 " Nationale v. Betournay, 358. V. City Bank, 2.37, 399. V. Guy, 238. " " V. Merchants' Bank, 341, 452. V. Ross, 237. " (hi Peuple V. Brvaut, 157. V. Ethier, 73. V. Viau, 335. " Ville Marie v Prinieau, 363. V. Mallette, 3.58. Banner v. Johnston. .50. [ BarV)er v. Morton, 179. I Barclay ». Bailev, 258. Bardy'v. Huot, 341. Baring v. Clark, 372. Barnard, lii; 101. Barnett v. Jnday, 423, CASES CITED. XV 105, 313. \S, 21)2. J. on, 135. $ank, 3(51. p, 423. P. & M. )., 457. ;all, 195. rtlett, 170, 1. loor, 287. Ooley, 293. irdine, 358. )ne», 37. •ckermaiin, 58. arsons, 110. Uittan, 234. SherwoiKl, 14. . 129. 0. ). i89. ank of Vic- toria, 121. . Banqiu' >te, .505. blanc, 238. ■jcscard, 110, 238. trachan,37<' rnav, 358. Bank, 237. 238. ants' Bank, 2. 237. It, 1.57. r, 73. 335. neau, 363. lette, 3.58. Barnewell v. Mitchell, 287. Harrington, K'', 70, 212. Barttie v. Armstrong, 223, 3»S0. Bartholomew v. Hill, 21t4. I5artley v. Hodges, 391. Hartriini v. (^-vddy, 338, 425. Hiissenhorst v. Wilby, 82. 15.istal>le V. Poole, 123. liatenian v. .To.seph, 241, 21>3. V. Mid Wales Ry. Co. 134. Bates V. Leclair, 84. Baxendale v. Bennet, 11(5. I5axter v. Bilo;'.eaii, 51, 200. " V. Bruneau, I'M*, .505. '' V. Robinson, 79. Havley v. Taber, 88. Beak v. Beak. 405. I?ealls V. Peck, 282. Beardsley v. Hill, 79. " V. Martin, 85. Beaubien v, Hiisson, 12JK Btaucheniin v. Hrodeur, .505. Bcaudoin v. Dalniasse, 3.3(5. Beaudry v. liatlaninic, 419. Bcaulieu v. Deniers, 2;W, 424. Beiiuniont v. liarr.tt, 8. V. (ireatheiwl, 338. lieaupre v. }}urn, 376. Bccher V. .\ni!ier.stl)urg, 2til. liechervaise v. Lewis, 185. B. ckett V. Cornish, 293. liickham v. Drake, 138. Beldall V. Maitland, 24. Bedell v. Katun, 3.")7. Bceching v. Gower, .52, 25W. Becnian V. Duck, 1.53. B.'f,'bie V. Levi, 89, !iO. Bxiciue V. Biu'v, 18(!. ISelanger v. Ba.xter, 2lH». Belden V. Carter. 122. Belfast liankiiigCo. v. Dohertv, 130. Bell V. DaKU'. 3.«). " V. Ingcstr,', 122. " V. Moffatt, 140 " V. Packard, 3S(). " V. Ridde 1, 195. Bellaniv V. Marjoribanks, 4; 21, 34.3. Bettis V. Bristol, '^". " V. Weller. 44. Bevan v. Stevenson, 177. Beveridpe v. Biirgis, 21>3. Bickerdike v. Bollnian, 295. Bickford v. Ridge, 272. Biggs V. Lawrence, 382. " V. PiiH^r. 88. " V. W.kkI, 259, 308, 3(«l, 300. Bigler v. Waller, 42. Bignold, E.I' im lie, 21)0. Bird, Ex pitrti', 330. Birkett v. Mc(!nire, 335. liirniinghani Banking Co., Ex jnirlt, 40. Biroleau v. Derouin, 237. Biron v. Brossard, 233, 234. Bishop, E-ijHirtc, 329. " v. Chittv, 308. V. Hay ward, 232. Bisaell v. Fox, 412. I " v. Lewis, .382. Black V. (iesner, 38, 173. " V. Ottoman l^ank, 357. " V. Strickland, 222, 232, 350. j Blacklev v. McCabe, 2(i8, 403. I BlackwI)od V. Cliinic, 19.5. 1 Blain v. Oliphant, 277. i Blaine v. Bourne. 223. i Blake V. Mc.Millen, 2(!2. i " V. Walsh, 171. j Blakelv Ordnance Co., He. 4.'>7. j Blancllard v. Hns.sell, 391. I Blanckenhagen v. Blundell, 02 lileau V. Brissette, 500. ' Bliiui V. Di.xon, 277, 279. Block V. Lawrance, 237, 424. ! BUxlgett V. Jackson, Oi). i Boaler v. Mayor, 338. I Bobbett \ . Pnikett, 400. I BiKidington v. Sclili'nker, 25!l, ^i.C. j Boelini V. Canijibell, 54. ' Bois v. (Jervais, IIMJ. Bolton V. Dugdale, 47. ; Boniley v. Frazier, 319, Bund \. !Moore, 2. Jiridge v. Batohelder, 330. Bridges v. Berry, 272. Brighty v. Norton, 117. Brigstocke v. Smith. 345. Bristol V. Warner, 84. Bristow V. Seq\ieville, 84. British Linen Co. v. Caledonian Ins. Co., 312, 45<>. V. Drummond, 3!»3. Britt V. Lawson, 2(52, 429. Britton v. Fisher, 227. Brockville & O. Ry. Co. v. Canada C. Rv. Co., 1.35. Broke v. Arnold, 227 . Bromage v. Lloyd, 120, 208. I. V. Vaughan, 279. Bromwich v. Lloyd, xlviii. Brook V. Hook, 148, 153. Brooks %• . Clegg, 228. " V. Elkins, 419. " V. Mitchell, 425, 420. Broughton v. IVLiu. Water Works, 134. Brown, Re, 390. " V. Archbald, ir>5, " V. Batchers' Bank, 39. " V. Byers, 134. " V. De Winton, 420. " V. (nirrett, 178. ' • V. Harris, 337. '• V. Rowland, 120, 103. " V. .Tordhal, 438. " V. Langley, 38. " V. Mailloux, 330. " V. Marsh, 294. Browne v. Boulton, 260. V. Dow, 505. Browning v. Brit. Am. F. S., 156. V. Kinnear, 293. Brundige v. Delaney, 178. Bruneau v. Barnes, 130. Brunet v. Lalonde, 208. Bryant v. Lord, 99. Bryant v. Merchants' Bank, 99. Bryce, Re, 40. Buccleugh V. Eden, 345, 349. Buck V. Robson, 49, 50. Buckley v. .Jackson, 224. Buffalo Bank v. Truscott, 389. Bull V. Copeland, 194. " V. First Nat. Bank, 82. Buller V. Cripjts, 17, .50. Bult V. Morrell, 101, 1.34. Burchfield v. ^Iwirv, 313, 33(», 303. Burdon v. Benton, 180. Burges v. Wickhani, .30. Burgh V. Legge, 271. Burke v. Elliott, 294. Burniester v. l?arron, 280. Burnett v. Monaglian, 250, 2(i4. Burnhani v. Watts, 47. Burns V. Harper, 420. " V. Sn()«, 140, .321. Burrough v. Moss, 229. 340. Burrows v. .Temiiio, 387. Burson v. Huntington. 122. Butler V. Crips, ,50. " V. Macdougall, 342. Buxton V. .Tones, 201. Byrom v. Thompson, 305. c. Caldwell v. Merchant."-" Bank, 311. Callisiier v. Bi.sclioffsheim, 17"). Callow V. Lawrence, 222. 350. Calvert v. Baker, .304. Cameron v. Kvte, 8. Ctvmidge v. Al'lenby, 2.s(;, 32S. Campbell v. French, 93, 94, 241. V. Hall, 8. { " V. McCrea, 370. \ " V. McKinnon, .304, 410. '• V. Webster, 305. Cape Iketon, Re, 12. Canada Farmers' M. Ins. Co. v. Wat- son, 192. Canadian Bank of Com. v. Adanison, St t( (t y ' " " V. i< . Cazet V. Kirk, 44. C'.'ntral Bank, He, 459. V. (iarland, 182, 420. ('hanil)erlain v. Ball, 37, 504. (Mianihers v. Miller, 338. ('hanii)ion v. (Gordon, 391!, 452. Cliandler v. Bi'ckwith, 123, 307, 309. Chanoine v. Fowler, 274. Cliapdelaine v. Vallee, 130. Chapman v. Bishop, 282. V. Cottrell, 381, 421. " V. Keane, 275. Chaput V. Robert, 485. Chard v. Fox, 279. C!liurtered M. Bank v. Dickson, 425. Cheek V. Roper, 241. Chesney v. St. Jthn, 49. Ohetlain v. Kr'public Life Ins. Co., 170. Cliichester v. Kill, 2<>1. fhioipee Bank v. Philadelphia Bank, 429. Cliilds V. Monins, 105. Ching V. Jeffery, 228. Cliolet V. Duplessis, 129. Christian, lie, 40. Citizens" Bank v. New Or. Bank, 312. City Bank v. Cheney. ]j2. " V. Hunter, 207. V. Lafleiir, 129. City of Fredericton v. Lueas, 174. City of (Jlasgow Bank v. Murdock, 185. Clarihue v. Morris, 77. Clark V. Blackstock, 424. " V. Bovd, 208. " V. Sigourney. 20S. " V. Farmers" Mnfg. Co., 437. Clarke V. Ash, 178. " V. Cock, 22. " V. Fsson, 74. " V. Percival, 47. V. Sharpe, 280. Clarksnn v-. Lawson, li)7. Jl'c li.K.A. — B Clayton v. (iosling, 83. Clement v. Cheesenian, 405. Cleroiix V. Pigeon, .320. Clerk V. Pigot, 235. Clerke v. Martin, 17. Cleveland v. Exchange Bank, 335. Clifford V. Parker, 300. Clip|H'rton v. .Spettigue, 143, 323. Ck)de V. Bailt y, 284. Closson V. Stearn.s, 40. Cloyes V. Cliapnian, 320, 38(i. Cochrane v. Boucher, 420. V. Caie, 44. Cockburn v. Johnston, 323. Ccxid V. Lewis, 444. Cohen V. Hale, 44. Corporation of (irantham v. Conture, 130. Corjioration of Kingsey Falls v. (^ues- ne, 330. Corporation of Perth v. Mc(iregor, 49. " Roxton V. E. T. Bank, 45(5. (I XVIU OASES CITED. CoriHjratidii of Toronto Township v. McHiifle, 431. Cosgrave v. Boyle, 28r), 2XH. Cosst'tt V. Cook, 174. Cott', E.C tmiir, 121. " V. Lfinieux, 47, Kit, 486. " V. Morrison. 341. Coulchcr V. Toppin, 2!t4. Coulter V. L('<', 17'.*. County of ()ttaw:i v. M. O. & W. Ry. Co., 45(). Conpal V. Coupal, 40. Courtauld v. Saunders, 1()3. Cousiiu'iui V. Lecours, 247. Coutu V. Ratferty, 418 Coward v. Muddies, 174. Cowie V. Halsall, 304. " V. Stirling, ()2. Cowing V. Altnian, 8(5, 87. Cowley V. Dunlop, 174. Cow[)er"s Trustees v. National Hank of Scotland, 404. Cox V. National Bank, 2'y\\ 312. " V. Trov, 22, 120. Cranley v. Hillary, 30«. Crawford v. Cobourg, 4.j<>. Crears v. Hunter, 175. Creiglit(jn v. Allen, 34(5. V. Fretz, 424. V. Halifa-x Banking Co. , 141. Crepeau v. Moore, 307. Cre\ ier v. Sauriole, 340. Cridil'ord v. Buhner, 172, 410. Crii)i)s V. Davi.-J, 425. Crofton v. Croft(-n, 50, 2t>(). Crombie v. Overholtzer, 89. Cromwell v. Sac Co., 45(>. Crook V. Jadis, 4:i4. Cross V. Currie, 107, 2.S(>. " V. Snow, 34(). Crosse V. Smith, 2()1, 280. Crossley v. Ham, 231. Crouse V. Park, 70, 325. Crouch V. Credit Foncier, 207, 437, 4.54, 458, Ivi, Ivii. Cri)we V. Clay, 300. 375. Crowfo((t V. (Turiiey, 44. Croxon V. Wortlien. 2(i8. Cruchley v. Clarence, (iO. Crutcldv V. Mann, IKJ. Cunliffe V. Whitehead, 222. Cunard v. Tozer, 3t)5, 430. Cunningham v. Lyster, 18(1. Currie v. Misa, 107, 1(58, 359. Currier v. Ottawa (ias Vo., 155. Curtis V. Clark, 178. Cushing V. Dupuy, 23. Cuvillier V. Fraser, 231, 334. 1). Daines, iff, 443. Dalby v. Humphrey, 320. Dalton V. Lake, 17f<. Dana v. Bradley, 2(52. Dana v. Sawyer. 258. Dandurand v. Roulier, 42G, Dan/iger v. Ritchie, 12!) Darah V. Church. 31(5. Darling v. (iillies, 2.59. " V. HitchcG:)k, 34(5. Dasylva v. Dufour, 419. Davidson v. Bartlett, .3.57. " V. Robertson, 377. Davies v. Fmiston, 322. " V. Humphreys .348. " V. Wilkinson, 45. Davis V. Clarke, 101. " V. Dunn, 2(55. " V. Jones, 51, 87. " V. McSherrv, 37. 51. " V. Muir, 23('. Davison, lie, 423. Day V. Ni.\, 179. " V. Sculthfirpe, 217. De&con v. Stodhart, 372. D«an V. Green, 444. Decelles v. Bertrand, 19.5. " v. Samoisette, 37. Dechantal v. Pominville, 79, 320. Decroix v. Meyer, GO, 108, 114, 222. Deering v. Hayden, 208. De Forest v. Frarey, 85. Dehers v. Harriot, 305. De la Chaumette v. Bank of England, :w8. De la Chevrotiere v. (4uilii -t, 309, 428. De la Courtier v. liellamy, 8(5. Delaney v. Hall, 277. Delaporte v. Madden, 290. De la Vega v. Vianna, 393. Delaware Bank v. ,Iarvia. 330 Demuth v. Cutler, 235. Dennistoun v. Stewart, 279- Desby v. Thrall, 3(55. Descliamps v. Leger. 217. Desjardins v. Pauze. .50(5. De Sola v. Ascher, 41(5. Desrosiers v. (iuerin. 358. v. Montreal P. k B. Ry. Co., 4,57. De Ta.stet V. Baring, 327. Deuters v. Townsend, 229. Devanney v. Brownlee, 358. Dewey v. Reed, 4.30. Dickens v. Beal, 295. Dickenson v. Clemow, 170. " V. Dickenson, 30. V. V.dpy, 134, 142. CASES CITKD. XIX Dillon V. Kiiniiier, 337. l)iiij,'W!ill V. Dunstcr, 3^A. Dinsinurf v. DiincjU), IKk Dixon V. IJovill, Iv', " V. Nuttall, ;■)<>, !t(i. " V. Paul, 17.\ Doak V. Robinson, i)'2. D(Kld V. (iill, 428. Dolman v. Orchard. IB4. Dominion Bank v. Heacock, tiO. Doniville v. Davien, 3(i2. Don V. Lippinann, 3K7, Mi. Dooley V. Smitli, 42. Dooly V. Kyarion, sr>. Dorais v. Chalifoux, 237. I^oran v. ("liamlH'rJ*, 11. Dorion v. Hcnoit, 428. " V. Dorion, SitO. Dorwin v. Thomson, 11;'), 302. Dongall V. Post, 1<)2. Doutre V. Bamiuc .lacfiucH Cartier, 28!t. Dowling V. KastwiHul, 1(1]. Down V. Hallinfr, 230. Downer v Read, 03. Downes v. Chiu'cii, 37!t. Downit' V. Francis, 3S. Downs V. McNamara, 43, Doyle V. Carroll, l!t3. Drake v. Rogers, 88. Draper v. WochI. 304. Dravton v. Dale, 431. Driggs V. Waite, 2r)!). Dnchaine v. Magiiire, 80. Duchesnay v. Evarts, 108, 487. Dnfresne v. (iuevremont, 1%. " V. Jacques CartierB. S., 113, 269. V. St. Louis. 3<»8. Duguay v. Senecal, 228, 340. Dumas V. Baxter, 201. Duniont V. Williamson, !t8. Duncan v. X. & S. W. Bank, 313, 351, 485. Dunloj) V. Higgins, 2!M). I )unn V. Allen, 43. " V. Davis. 82 " V. O'Keefe, 188, 272. Dunspaugli v. Molstms Bank, 105. Dupuis V. Marsan, 210. Durand v. Stevenson, 37. Durkin v. Cranston, 37!K Dunxilier v. Lapalnie, 237, 423. Dutton V. Marsh, 103. Dwightv. p:ils\vorth. li»5. E. East V. Smith, 270. Eastern T. Bank v. Coinpton, 417, 45<\ Eastwood V. Kcnyun, 107. V. Westley, 318. Kdie V. East India Co., 220, 222, lix. Edpar v. Magee, 34(>. Edinburgh B. (r. M. I. Co. v. Svdney, ()l). Ed is v. Bury, 34, 415. Edmonds v. (»< ater, 345. Eisenlord v. Dilleiiback, 82. Elder v.Kellv, 217. Elford v. Teed, 240, 257. Elliott v. Beech, 83. Ellis v. Thounison, 117. Ellison V. Collingridge, 3.5. Els.am V. DenTiy, .351. Ely V. Clute, 424. Emerson v. Providence H. M. Co. 104. Ennnett v. Tottenham, 235. Engel V. Stourton, 184, .304. ?]nnis V. Hastings, 420. Enthoven v. Hoyle, 00. Pisdaile v. La Is'au/.e, 150, 152, l."8. '' V. Sowerby, 20.5. Estes V. Tower, 20<>. Ethier v. Thomas, 1.50, 'm. Euroi)ean Bank, /'>; IH.'!. Evans v. Cramlington, 223. " V. Cross, 88. '■ V. Foster, 201. " V. Kymer, 123. " V. Morley, 170, 230. Everard v. Watson, 278. Ewart v. Weller, 37. Vav'ui v. Lancaster, 350. Ewing v. Cameron, 302. Exciiange Bank v. Banque du Peuple, 3!)0. " v. Canadian Bank of Cor;., 340. V. Carle, 201. V. Citv & D. S. Bank, 340. " V. Xormand, 1^2. " V. (Quebec Bank, 73, 225. Exon V. Ru.-sell, 428, 430. F. Fahnestock v. Palmer, 7>*. I'airehild v. Ogdensburfrh R. K. Co. 58. Fairulongii v. Pavia, 320. Fairnian v. May bee, 334. Faitii v. Richmond, 145. Falk v. Mixbs, 104. Fall River Bank v. Willard, 247. Fancourt v. Thome, 420. Fanshawe v. Peet, 108. Farnsworth v. Allen. 258. Farcpdiar v. Southev. .305. Farrell v. Oshawa Mnfg. Co., 135, 357. Fearn v. Lewis, 345. u CASES CITED. Firtli Fecleriil Hank v. North wckmI, 143. IVnii V. HiirriHon, :«8, 3.S0. Kentuni v. PckjikjU, ;i">(i. Fcrgiisiiii V. Stewart, 227, ii^"). FiMxussoii V. Fyfc, .S.S4. ;{!).'{. Ferrie v. Hvkinan, 2r)!». " V. Wardens 11. of 1., 2.3!t, 33(1, Fe.Hseiiniiiver v. Adcock, 41!). l''iel. Foley V. Hill, 404. Folger V. (Miase, .Sdo. Forbes V. Marshall, 34. Ford V. .Viitrer, 110. Forster V. Mackreth, 8',), 3. V. Chainnan, -lil, 20!t. Furze v. Sharwood, 27ti. Fyfe V. Boyce, 322, 448. G. Gale V. Walsh, 277, .300. (iallery v. I'rindle, 40. (ianinion v. Schiuoll, 2()!t. (Janisby v. Chapman, 177. (iarden v. Bruce, .348. (iardner v. Lucas, 448. V. Walsh, .301. 304. (Jarland v. .laeonib, 142, 314. (iarnetfc y. McKewan, 404. (Jarrard v. L(!wis, 78, 110. (Jates V. Beecher, 202, 278. " V. Crook.s, Ifly. (iathercole v. Smith, 24. (iay V. Lander, 222, 420. " V. Kainey, 380. (jiazzam v. Annstrong. 3(iS. (ieary y. Physic, 30. 30. (ieddes v. Toronto S. K. Co., 1.35. (leunnell y. Colton, .344. (iener.al Estates Co., Jit, 457. (ieneral S. Am. Co., Re, 325. (Jeorge. lie, 427, (ieorjfian Bay L. Co. v. Thompson, 170. (Jeralopulo y. Wieler, 372. (Jerniania Bank y. Distler, 88. (Jerow y. Holt, 158. (ieryais y. Dube, 417. (jiard y. (Jiard, M\. " y. liaTuoureux, 311. (iibb y. Mather, 2.50, 304. (iibbon y. Coggon, 30.5. (iibbs y. Fremont, 387. (Jibson y. Orosyenor, 345. " y. Minet, 00, 08. (tib.sone y. Lee, .340. (iiddings v. (Jiddings, 122, 175. (iilbert y. Demiis, 300. (liles V. 15ourne, ,50, 80. (iill y. Cubitt, 434. 4.35. (iillesi)ie, l!r, ex /ki rtf Kol)arts, 325, '.VXi, 4.52. y. Marsh, 281. 2!t4. " y. Mather, 85. (J ill in y. Cutler, 47. (irirouard y. (Juindon, 237. y. Lachapelle. 120. Girvan y. Price, 274, 270. (iirvin y. Bm'ke, 204. Gladstcue y. Dew, 303. (Jlasgow Mank y. Murdock, 185. (ilasscock y. 15alls, 338, 426. (llassford y. -McFaul, 177. (Jlenuie y. Imri, 178. (llvn y. Baker, 4.5.5, ly. (xoggerley y. Cuthbert, 12J. (ioing y. Barwick. 43. (ioldie y. Ma.\well, .304. CASES CITED. xu (iiililiiit; V. Wiitt'rluMi>c, .')2. (}iii«lnian v. Harvey. l,sH, 231, 27ti, 434. (ioodwin V. |)avt'n]>ort, H2. " v. KobartM, 17, 4.")2, .\liv. (Joiidwyn V. Cli(nt'l»(y, 117. (iordiin V. .Mnlchcr, 311. (lore V. (iiiison, 130. (iort' Hiuik V. C/'raJK', 271. " V. Crodk.-i, li>r>. V. Katon, 334. V. McWhirter, 334. ;• v.MiTfditli, 4.%. (iiirKitr v. Micvillc, 4.');"), Ivii. • ioriny V. Fid wards, 3r)7. (Jus.s V. Xi'Non, M. (rduld V. Cuondw, 410. (Joiipy V. Harden. OS. (irafton Miink v. Mixjre, Tm. (irahani, Jlr, 144. v. (Iraliam, 37, 173. (Jranite Bank v. Ayres, 2t)l. Krant v. DaC'osta, ;")1. " V. Heatlier. 42S. " V. People's Loan & D. Co., 32t;. " V. Vaiijirlian, lix. " V. Wiiistanley, 227, 271. V. Wilson, (»H. ■' V. Younj,', 7S. (Irantliani v. Powell, 341. (Jravelle v. P>eaiidoin, 34ti, (iraves v. American Hank, 3.3S. •' V. Key, 220, 33S. Grav V. hewis, 4H4. "' v. Milner. .50. " V. Kai)er, 103. " V. Whitman, 38, 173. " V. Worden, 44, 410. Greatorex v. Score. .54, 7H. (ireen v. Hum])h-eys. 340. (ireentield Bank v.'Crafts, 149. Greening, K.r/xidc, 211. Greenougii v. McClelland, 3.57, 494. Green.shields v. riani(md(m, lOG. Greenway v. Hindley, 30.5. Greenw(MKl v. Perry, 170. Grenier v. Pothier. 330. Grey v. C(M)per, 137. Grieve v. Molsons Bank, 430. (Trittin v. Judson, 320, 302. " V. Latimer, 318. " V. Phillips, 271, 290. " V. Weatherbv, 311. (Griffiths V. Kellogg, 238. (trluisliaw V, Bender, ,5.5. (trove V. Clarke, 37ti. (Juardiansof Lieliticl 1 v. Gr.'ene, .'128, (Jnepratte v. Young, 3>>2. (Jnerin v. Orr, 210. (tiigy v. Larkin, 100. (iinin V. MePherson, 18;5, 2.'52. (Jnmbe's Case, 11. Gurney v. Kvans, 142. " V. Woinersley, 330. (Jwinnell v. Hert)ert, .'^21. H. Hagarty v. S(inier, 102. Hague V. French, 50, 80. Haines v. Dubois, 20. Halcrow v. Kelly, 3(i2, 304. Hales V. London" & N. W. Ry. 117. Hall V. Bradbury. 415, 410. " V. Coleman, 178. " V. CoWlMT, T. " V. Francis, 37. " V. Fuller, 40<>. " V. Merrick, 47, 410. 420. " V. Newconilt, 321. " V. I'rittie, 42. Hallett's Trusts, /!<', 224. Halsteiwl v. Skelton, 308. Hamelin v. Bruck, 304. Hamilton v. Spottiswoode, 30. Hammond v. Scliotield, 422. " v. Small, 37, 137, 170. Handyside v. Coc-^'i'-y, 277. Hannum v. Richardson, i(8. Hanscome v. Cotton, 118, 180, 2, 318, Hansard v. Robinson, 300, 375. Hardy v. Wixnlroofe, 203. Harev. Henty, 203, 403. Harley v. Falconer, 08. Hanuer v. Steele, 220, 313, 3.38, 3.53. Harper v. Culbert, 320. " V. Paterson, 37. Harphani v. Child, 270. Harris V McLeinl, 143. " V. Packer, 259. " v. Perry, 277, .'JOO. " V. (iuine, .'«t2. " V. Schwob, 24.5. Harrison, K.r parte, 212. V. >ficollet Bank, 390 " V. RusccM', 274. Harrop v. Fisher, 211, 212, 437. Hart V. Davy, 'M. " V. :Macpherson. 108, 487. " V. Middleton, 94. Harvey v. Bank of Hamilton, 71, 73. " V. Geary, 37. " v. Martin, 251. XXll CABEij CII'KO. HaHkcll V. .I<)ii"s, 205. lIantiii(^N V. O'Mivlioin'V, 237. Hatch V. Hairett, 213." " V. Hi'arh'M, llM. '• V. TraycH. 51. Haiissoiillitr v, lliirt»iiKik, 5(». lliiwkcH V. Salt.T, 2!M». HawkiiiH V. (Janly, 214. " v. Tmiii), 202. " v. WanI, 2lt2. Haw lev V. Hfvcilt'y, 335. Hay V. Hurkt;, 2H8. " V. I'owric, 3.")7. Haydin v. .Ii)hnH(iii, 345. Haves V. David, HH, 340. " V. DaviH; 37. Hi alt 'y V. I)()l)s()ii, 3.58. Heatliticld v. Van .Vllan, 155. Hfatdii V. MeKfllar, 4.S5. Heavisidc v. Miinii, 7'.*. Hi-illiiit v. N.-vill, 1,53, 214. Heinnicnway v. Stone, 424. Heniiisted v. I)runnn()nd, 20it. Henault v. 'riidnias, 171. Henderson \. Carveth, 143. V. ("otter, 17!l. Hemv V. Heel., 140. " v. .lones, 03, 2.5(i. " V. Little, 105. Herald \. fJounah, 102. Herrick v. Wolverton, 42(i. Herrinpr v. Woodludl, 20. Hervey v. .lawiueH, 34(). " v. Pridlmni, 34(). Htseltine v. Sigg^erH, 455. Hewitt V. Kaye. 40.5. " V. Tlionipson, 201. Heywood v. Pickering, 248, 263, 403. Hicks V. Brown, 387. Highmore v. Priniro.se, 51. Hill V. Coolev, 430. " V. Halford, 85. " V. Heap, 2(>(>, 208. " V. Lewis, 323. " V. McLeod, 17S. " V. Royds, 311. " V. Wilson, 38, 175. Hillis V. Tenipleton. 170. Hills V. Parker, 182. Hillsburgli V. Mayer, 34(i. Hindhaugh v. Blakey, 103. Hinds, Ec, 40. Hine V. Allelv, 261. Hirschfield v. Smith 78, 221, 380. Hirscliinan v. Budd, 363. Hitchcock V. P]d wards, 187, 39(>. " V. Humffey, 272. Hoare v. Cazenove, 360. " v. Niblett, 423. Hobbs V. Hart, .504. Hoffman v. Bank of Milwaukee, 313. Hogarth v. Latham, Ills. Hogarth v. Wherley, ini». Hogg V. Skeeii, 153', 201. " V, Marsh, 83. Holbrow V. Wilkins, 2!M). Holdsworth V. Hunter, .56, 377,378. HoUiday v. Atkinson, 174. Holman v. •lohnson, 382. Hohiier v. Kroli('k, 84. Holmes V. Dnrkee, 321. " V. .riic(|iitis, 62. V. Kerrison, 241, .347. H(mk1 v. Stewart, 210. Hook v. Pratt, 223. Hooker V. Hiiiibarrl, 177. " V. Leslie, 110. Hooper V. Williams, 41.5, 420, Hope V. Caldwell, ,S.S6. Hopkins V. Farewell, 232. V. Ware, 272. Hoiikinson v. Foister, 311, 401. Hople.v V. Dnfresiie, 268. Home V. Koumiette, 316, ;i87, 300. Hosstatter v. Wilson, 416. Houghton V, Fiiiiicis, 365. Houlditcli y. Canty, 270, Houliston V. {'arsons, 80. Housego V. Co wile, 277, Hovev V. Cassels, 14.S, " ' V. Nolin, 232. Howard v. Duncan, 140. " V. C4(Klard, 20. 234, 274. " V. Salx.iirin, 288, 380. Howes V. Bowes, 430. Howland v. .leimings, 70, 325. Hoyt v. Lynch, 35, Hubbard v. Jackson, 350. Huber v. Steiner, 302. Hubert V. Moreau, 40. Hudon V. Champagne, .505. " V. (iirouard, 234. Hudson V. I'^awcett, 325. Hughes V. Can. P(t. L. & S. S., 308. " V. Snure, 227. Hunt V. Lee, 100, 200. Hunter v. Jefferv, 68. " V. Wilson, 180. Huntley v. Sanderson, 348. Husband v. lOpling, 8.5. Hussey v. Winslow. 410. Hutcliins v. Cohen, 88, 182. Hyde v. Johnson, 40. I. lansou v. Paxton, 323. Ilsley V. Jones, 105. Imeson, Ex. parte, 44. Imjierial Bank v. Brydon, 37. Imjierial Land Co., A''' 458. ( AKl-.S CITED. xxni [ntfliuin V. I'riniiiw»'. 1!M». 'AW. IiiKli" V. AUfii, ;<". iii)?niliiiiii V. »Jil)lw, 'M'.K inliuiil V. (!MfM-4. IH'.I. Irvine V. Liiwry, ^•">, l'"*- Irwin V. Hrown, lit. IsiUll'H V. (il'utllf, IttW. isflin V. Kuwliiii'l'*. t.'-'"'. Iv.s. /.'■■. :w7. J. •lackson V. IIikIsi.m, Io1. :<2-'. .Iiiciil> V. Kirk, 4. .Iiiiiii's V. Catlier\MPin!,'.'"). .Ii'iik- V. Doriin, 12;{. •Icnniiijc-* ^'- l{. Wimllc. 1.VJ. .TolniHtou V, Hcott, 12'.». .1(ine.'<, A'.'' /mr/i', \'M). " V. Ashcroft, i;v.i, ;«i. •' V. iUiik ipf .Mimtrciil, 4;5r., ;H1l'. " V. K. T. Mutiiiil I'Mrc Ins, Co. VM>, in?. '• V. Kiile.s, 430. " V. (lordon, l.SH, 4;$:!. " V. (4()U(lii', 2'J, 103. :I13. " V. Hart, 40. " V. .fjiokxon, 101, " V. Jones, 174. " V. Hyde, 3.S0. " V. Simpson, 44. " V. Whittiiker, a')!). '• V. Whittv, 71, 73. " V. Wils(,ii. i>71. .Ionian v. 0< ates, 30!». .lose])h V. iJelisle, 304. " V. Hutton, irjO. V. Turcotte, 42. " Siiclie& Co., A'.', 44S. .Tosselyn v. Lacier, 4'.i. .Tury V. Barker, 3!t, 417. K. Kearney V. Kinoli, ^O. " V. West (Jr.mada di., 377. Keating' v. Moises, 1(1. Keene V, Hear I, 310. " V. Keen-. 32:'). Kello^J^ V. Ilvatt, 17H. Kendall v. Il'aniilton, 422. Kennedy v. Adams, 44. " V. K\elninK'' Hank. 417. " V. (Jeddes, 10.'i. Kerr v. I'arsons, l(i.'i, 431. " V, Straat, 227. Kerry v. O'Connell. "lO."). Kersliaw v. Con, 72, 3('>."), Ketcliiim V. I'oweli, 330. Keys V. l'oll( ok, 34.'i. Kii)lple, /■•,.//.'/■/(■, 130. Killpy y. IJoelnisseii. 204. Kilroy v. Simkins. 170. Kilslpy v. Williams, 404. Kiml)all y. Huntington, 110. Kiml)ray \\ l)rai)er, 44S. KinK y. l>i(;kley, -JTS. " y. (41aMsf<')rd, 3H. " V. Hoare, 422. " 'I'lie y. Mcl.aim'ldln. 13. " V. .Smith, 14;.. " V. Zimmerman, 37(i. Kinnear y. Ferguson, ;{37. " y. (Joddard, 2(11. Kinjfsford y. Oxenden, 17'>. Kinst,'ton, K.r imrti, 1S2. Kint^ston Marine H. Co. v. (luMn.131. Kirk V. Hlurton, 1 lo. Knu))|> y. liank of Montreal, 207, 20i"), 200. Kneesliaw \. (^)llier, 103. Knight y. (~'lenients, 300. " y. .tones, (12. Kynier y. Laurie, 4(»4. L. L'xVlilie y. Noiinandin, 23S. Lacoste y. Oliauvin, .34(1. Lafaille v. Lafaille, 340. Lagueu.v y. Casanlt, 40. y. Everett, 22, 103. Laine y. Clark, 3(1.5. Laingy. Tavlor, KM), 102. Lalonde y. Holland, ;?S. 17!l. Laml) y. .Sutherland, 311. Laml)ert, A'.'' /"/Vc, 372. V. Tack, 310. Landry y. Heaucliam)>, 33(1. Lane y. Krekle, 431. XIV CASES CITED. Lani; v. Smyth, -liV), Iviii. Lauglois V. Johnston, 342. Laprise v. Methot, .505. Larkin v. Wianl, IH'.t, 2.3(i. Larocqut' v. Andres, .34<). V. Franklin Hank, 51, 1(58, 487. Larue v. Evanturcl, 151. Latham v. Norton, .S50. Lat(}uche v. Latouche, 175. Latour v. Gauthit'r, 322. Latter V. Wliite, 121. Laurence v. Hearn, 238. Lavoie v. Crevier, 341. Law y. Parnell, 220, 235. Lawson v LaifUaw, 1 28. Lawton V. J.'^illidge, .304. Lazarus v. Cuwie, 352. Leach v. Buchanan, 152. Leadbitter v. I'arrow, KiS. Lebelv. Tucker, ,54, 137, .38!). Leljlanc V, Rollin, 318. Leclaire v. Casgrain, I'.M!. Ledoux V. Mile End, 135. Lee V. Jiank B. N. A., 45!>. Lee V. McDonald, 142. Lee V. Zagiirv, 233. Leeds Bank v. Walkei, 21, 303. Leet V. Tiiffram, 234. Lefebvre v. Bertliiaume, I'Jti. Leftley v. Mills, 220, 200. Legal Tender Cases, 42. Legge V. rhorpe, 305. Leith V. O'Neill, 288. Leitli linking Co. v. Walker, 425. Lemay v. Boissinot, 2.34. Lemieux v. Bourassa, 172. Lenox v. Crook, 2.52. Leonard v. Mason, 35. Lepage v. Hajn«'l, 340. Leroux V. Bn.wn, 303. Leslie V. Kinnions, 3(i4. " V. Hastings, 104. Lessarit v. (i;enest,428. Lester v. Garland, !I3. " V. Given, 311. Letellier v. School Comrs., 136. Leveille v. Daigle, 217. Levinson v. Ytning, 153. Lewis V. .Tetfery, 32!). " V. Parker, 230. " V. Keilly, 14.5. Lickbarrow v. Mason, lii. Light V. King.sl)urv, 82. Lightfoot V. Tennant, 383. Lindley v. Lacy. .38.' Lindo V. Lord Rodney, 14. Lindsay v. Zwicker, 38. Lindus V. Brad well, 141. Little V. Slackford, 36. Liverpool B. Bank v. Walker, 165. Lleweleyn v. Winckworth, 1.58. Lloyd V. Dimniack, 484. v. Howard. ]!»4, 227. V. Sigourney 224. Lock V. Reid, ]6!),'321. Lockerby v. O'Hara, 167. Lockwood v. Crawford, 30!(. Logan V. Cassell, 235. London Ch'd Bank v. White, 181. " B. & S. S. Bank, /{e, 337. " & Co. Bank v. (iroome, 230, 3.54. " & Ct). Bank v. London & R. P. Bank, 175, 458. " & S. W. Bank v. Wentworth, .315. " & S Go's I. A. & D. Co. V. Clauip, 324. Long V. Moore, 364. Lord V. Hall, 436. " V. Hunter, .300. " Ward V. Oxford Ry. Co, 264. Losee V. ] )unkins, 426. Lovell V. Meikle, 260, .301. Low V. CoiH'stake. 23,5. " V. Owen, 270. Lowe V. I'eskett, .3,53. Lowentlial, Kcpude, 277, 305. Lowery v. Scott. 287. Ludlow V. Van Rensselaer, 383. Liunli'y V. Palmer, 22, 103. Lyman v. Cluaniard, .3,37. " v. Dion, 18(i. Lyon v. Marshall, 61. Lyons V. East India Co., 8. Lysaght v. Bryant, 120, 275. :\i Mabie \-. .Tohnson, 435. ;Maca\ilav v. McFarlane, 2(57, 307. Macdonald v. Whitfield, 317, 323, 352, 3.56, 418. Macdougall, Re, 326. V. Wordsworth, 290. Macfarlane v. Dewey, 103. V. St. Cesaire, 417, 4.56. Mivclell.an v. Davidson, 230, 31.5. Macle(Kl v. .Snee, .50. Madden v. Cox, 101, 162. Maillard v. Page. .38. Mair v. McLean, 100. Malhiot v. Tessier, 42.3. Maloney v. Fitzpatrick, 85. Maltby'v. Murrelle, 306. Mander v. Evans, .324. " V Royal Can. B.ink, 4.59. Mann v. Moors, 28(5. Manter v. Churchill, 176. Marc Aurele v. Durocher, 208, 410. March v. Ward, 424. Maichand v. Wilkes, 177. CASES CJTED. XXV .Mar(jii*>-eii v. Hirkbcuk Bank, 302. Mart' V. Cliiirlfs, 102, 415. Marifivtt, h:x)i(trt<. 131. >Ianiie Nat. ]?itiik \. Nat. City Bank, ;jl4. Mari.)nCo. v. Clarke, 1!)8. >iaiitinK' Bank v. l^nion Bank, lOo, 3()'.t. Mailer v. Molsons Bank, 311, 397, 403. " V. :5tewart, 403. Marri'tt v. Etiuitable Ins. Co., 48. Marseilles Kxtension Ky. Co., Re, 383. Marshall v. Smith, 341). Martin v. Boiire, xlvii. Cliaiintrv, 47. City of ilull, 135, Macfarlaue, I'.W. I'tmiin, 33t). V. Williams, 404. Uonsav, 3S2. Belford, H4. . Crel.assa, 358. M iller, 3(13. Harrettd. 420, 430. Il)i)ers(,n. I'.W. Stiilihs. 2(;s. Mathiessen v. London it Countv 15ank. 412. -Matthewson v. liroiise, .'J34. •' V. Carman. 178. An-ol, 2(Mt. lirain, 27!l. Deart', 337. iimian, 1!I8. KJis, 221, 22.3. McCall V. 'I'a\ lor, .3!). McCarroll v. Keardon, 174. McCarthy v. Bartlie, "Hh"). ' V. Phelps, 217. MeC.illum V. Clnirch. 1!)2. MeConnell v. Wilkins. 144. McCi.rkill V. Barrahe. 70, 73. MeCorniick v. 'j'ruttei-, 4.5. McCramer v. 'riiouiiisi-n, 1!)0. McCul)l)i!i V. Stei)hen, 417. McCunniffe v. Allen, 2li7. MeDaniel v. McMillan, 173. McDonald v. McArtinir, 270. V. Senez, !!».">. McDoiniell V. Holffate, 42, 410. '' V. Lowry, 207. McKowen v. .Scott, 254. -Mcliliie V. (iilbert, 157. McCiillivray v. Keefer, 170. MclJreevy v. Russell, 107. Mcdre^'or V. Bisli,.)), 17!t. 33.5. V. Daly, 01. V. Rhodes,. 31 it. McCtruder v. Bank of Washington, 201. Me7, 307. O'Neil, 3.37. V. British Linen Co., 14'l. V. Kraser, 313. V. Northrop, 281. V. Kerou.ack, 234. Clydesdale Banking Co., 21, 3.3, 404. (Jarnier, 140, 217, 277. Koss, 30. Shields, 113. McLellan \ . McLellan, 52, 255, 2.56, 208. McLefjd V. Carman, 144, 198, 238, 318. 359. " V. McKay, 334. McMeekin v. Kaston, 100. McMurray v. 'J'albot, 139, 321. McMurrich v. I'owers, 280. McNabb v. Wafrstatf. 350. McPhee v. McPhee, 140, 322. Mc<;ueen v. Mclntyre, 304. " V. Mc(^^een, 37. 77. Mc(^lin y. Sorrell, 228. McKobhie v. Torrance, 44, 201. McRoberts y. Scott, 219. Meaank, 250. V. Scale, 505. V. Harper, 02. Boston Iron Co., 141. Megginson Melledge y Mellersh y Rippen, 279. Mellish y. Kawdon, 244. Melyille y. Beddell, 47. Mendizabal y. Machado. 113. Merchants' Bank Bell, 128, 281. Bostwick, 43ti. (4oo(l, 118, 2.3(). Henson, 223. .Macdougall, 290, 444. Lucas, 149, 151. McKay, 3.58. Mulvey, 10. McNutt, 289. Robin>on, 171. Spicer, 40. Spinney, 304. State liank, .399. Stirliiig, 87, 305, .387, 121. I'. E. Club, .318, 437. Whidden, 328. Whit«|)L]litan Bank v. .Snure,|227. Mer«in v. (xate.>f, 177. Massier v. Daviginon, 1.5t>. Metcalfe V. Richardson, 277. Afeyer v. Hutchin.son, 110. Mier.s V. Brown, 272. Jklilford V. Mayer, 2r)2. Miller v. Biddle, 77. " V. Bledsoe, 214. " \ . Handelin. .330. " V. Ferrier, IS;"). " v. Race, 207, 1. " \. Thoni))son, 57. Milliken V. Chiiimian, .320- Millov V. Farmer, 505. .Mills V. lUrber, I'.IS. " V. Bank of V. S.,270. " V. (lil)son, 204. " v. I'hilijin, 234. Miln V. Prest, 112. Milnes V. Dawson, 1M». Miiieaiilt V. Lajoie, 30(;, 42S. Mintt \. Gibson, 03. Mireliouse V. Rennell. 451. Misa V. Currie, 1«1. Miser V. Trovin^^er, 2X2. Mitchell V. Baring, 302. 3(i.s. " V. Browne, 277. V. Holland, 32."^, 347. V. Smith, 213. Mobley V. Clark, 58. Moflfat V. Edwards, 77. Moffatt V. Rees, ]S5, 232, 321. Moir V. Allen, 74. Mcjlleur V. Roy. 172. Molsons Bank v. lirockville, 150. V. McDonald, 334. " V. Seymour, 313. Monson v. Drakely. 424. Montag'ue v. Perkins, iSH, 34M. Montgomery v. lioucher, 3^5. V. MeNair, .347. McK'dio V. Rowatt, 02. Moore V. Bushell, 311. " V. Jack.son, 120. " V. Manning, 74. " V. Sullivan, .37. More V. Manning, lix. Morehouse v. liurland, 184. - Morey v. Waketteld, 420. Morgan v. Davison, 258. " V. Lariviere, 311. " V. Rowland.s, 340. " V. United States, 42.>. Morgan.^ v. Heskett, 110. Morley v. Culverwell, 33S. Morrin v. Legault, 208. Morris v. Walker, 232, :<21 Morrison v. Bailey, .300. " V. Buchanan, 240. " V. Sjuirr, 1.57. • Morton v. Canii)bell, 140. 321. " V. Navlor, 40. Motz V. Holliwell, 172. Moule V. Brown, 328. Mount V. Dunn, 307, 428. Mowbray, /ix p'irtr. 211. Muilman v. D'Eguino, 244. Muir V. Cameron, 185. " V. Crawford, 3-58. Mullick V. Riidakissen, 244, 240, .308. Munger v. .Shannon, 40. Munro V. Cox, 00, 224. Munroe V. Bordier, 180. Munster & Lein.ster Bank v. Fniniie, 355. Murdoch V. Pitts, .345. M\nray v. East India Co.. 08, 201). " v. (iillet, 484. " V. (Jastonguay, 337. " V. King, 200. " v. Lardner, 28, 4.35. " V. Miller, 334. Murrow v. Stuart, 224. Musson V. Lake, .300. Mutford V. Walcot, 307. Muttyloll Seal v. Dent, 122. Mutual Safety Ins. Co. v. Porter, 00, 110. Myers v. Cornell. 227. ■" v. Wilkins, 71. N. Nash v. (liblnm, 78. Narbonne v. Tetre.au, 322. Nassau V. O'Reilly, 282. Natal Investment Co., Ji(, 457. National Bank v. Silke, 60, 408, 412. Neale v. Turton, 134, 353. New Haven Co. Bank v. Mitchell, 280. Newborn v. Lawrence. 43. Newman v. Frost, 174. Newton, E.<' /lartc, 183. " V. Allen. 74. Niagara Dist. Bank v. l''airi«ian, 112. Nicholls V. Diamond, 101. Nichols v. Ryan, 308. Nicholson v. (iouthit, ItiO. V. Reveill. .304. Nightingale v. City Bank. 335. " v. Witliington, 137. Noad V. Bonchard. 330. " v. Chateainert. J" " V. Lainpson. 330. m CASES CITED. XXVll (), 308. 'oitcr, (>0, m, 412. tclu-ll, 2S!t. nan, 112. 37. Ndnnaml v. Hc-iuisoleil, litti. Niin-is V. Cumlon, 137. 318, 322. " V. Solonuiii, 3(). Northfield V. Liuvrance, 418. North River IJank v. Aymar, 158. X(irtli-West X. Bank v. .larvis, 43. Norton V. Kllaui, 428. Nonvelle Bantpie fie I'Union v. Ayton, 388. Novelli V. Kossi, 3<)0. Nowlin V. Koaclu 2()(i. 0. Oaklfv V. Houlton, 201. O'lJrien v. Ficht, 171t. " V. Seniple, 3-")!). " V. Stevenson, 2,511, 307, i28, 430. Ofkernian V. lUackloek, 48. O'Connor v. Clarke, 32;"). Orlell v.Corniiiek, 102, IT)!!. (.)'l)onohue V. Swaiii, IT'.l Ogdeii V. Benas, 1.*.2, 411. (J'Keefe v. Dunn, 231. OKell V. Cliarles, 102. Ontario Bank v. Bnrke, 3!>2. V. Foster, 2()!). " v. (Jil)son, lit). V. McArtluir, 113, 20!). O'Neil V. Benin, 271). Ord V. Portal, 23."). Oridge v. Sherhornt', '.l(>. Oriental Bank, K.r /mrli; 188. " F. Corporation v. Overend, 1S4, 3.5.5, 3.56. Ornisbee v. Home, 170. Orr V. Ma^nnnis, 300, 301. Orr V. Union liank, 1.5.3, 45'.l. (»rser v. Mountenv, 178. Ottawa Co. v. M'. O. & W. Ry. Co., 45H. Oiilds V. Harrison, 180, 228. Oulton, He, 402. (Jutliwaite v Luntley, 303. Outlnvite V. Porter. 17(). Overend (iurney & Co., Jii, 372. Owen V. Honian, .35:5. " V. Von I'ster, 114. Owens V. Qiiel.ec liank, .^!t8, 403. Owenson v. Morse, 337. P. Paeaud v. Halifax South, 135. Palen v. Slmrtleff, 275. Palliser v. (inrney, 12'.t. " V. Lindiay, 417. Palmer v. Baker, 2!Mi, 322. " V. Fahne.stock, 4.3, 78. " V. McLennan, 41'.». V. Minar, 205. " V. Pratt, 8.5. Pardo V. Bingham, 3!t3. Pariseau v. Onellet, 322. Parker v. Fuller, 184. " V, (iordon, 24t), 253, 257, 2iM). " V. MeCre.a, 334. " V. Stroud, 425. Parkin v. Moon, 2.30. Parr v. Jewell, 227, 352; Parshley v. Heath, it!). Par.son.s v. (iraham, 'MO. Partridge v. Bank of England, 44.5, Iv. V. Colby, 424. v. Davis, 2!i. Pasmore v. Nortli, 80, 88. Patch V. King, 232. Patent Safety (i. C. Co. v. Wilson, 411. Patience v. Townley, 204. Pattarson v. lieecher, 305. v. Pain, 40, .322. V. Tapley, 2.5S. v. T.Kld, .S2. V. Welsh, 21!l. Patton V. Melville, 02. Paul V. .I(H-1, 278. Peacock v. F'ursell, 255, 272. V. Rhodes, 21!». Pearson v. Oarrett, 85. Peck v. PhipiH)n, 185, .321. Peel V. Kingsniill, 300. Peele v. Robinson, 103. Pella.s V. Neptune M. Ass. Co., 24. Pelletier v. Brosseau, ;i58, 440. Penny v. Innes, 317, 323. Penrase v. Martyr, 101. 1.3.3. Pentz V. Stanton, 141. Pcirkins v. Beckett, 431. Perley v. Howard, ".'44, 205. V. Loney, 357. Perrault v. Bergevin, 423. V. Herdman, 340. v. Laurin, 1!>0. Perreira v. .Topj), 378. Perring v. Hone, 304. Perry y. Milne, 171. " - v. Rodden, 180. Peruvian Ry. Co., Rt, 1.33, 1.34. I'eters y. W aterbury, 352. Petit v. Benson, 113, 25.3. Peto V. Reynolds, .58. Phelps V. \Villiani.son, .34.5. I'hilliniore v. B.arry, 40. PhiliiKs v. Astling,"200, 2'.m;. Phillips V. Im Thurn, 08, 370. " V. Sanborn, 3>. Philpot V. Briant, 2.5il. 312, ,3.57. Phipps V. Tanner, 70. XXVIU CASESJ CITED. Pichette v. Livjoie, 1!»7. Pickard v. Sears, 150. Picker v. London & Co. Bank, 4'm. Pier V. Heinrielischotfen, 204. Pierce V. Strutliers, 287. Piers V. Hall, 140, 321. Piersun v. Hutchinson, 375. Pigeon V. Dagenais, .34(1. Pillans V. Van Microp, 103. Pilley V. Robinson, 484. Pillow V. Hardeman, 281. Pinard v. Klocknian, ."377. Planehe v. I'letclier, ;«3. Piatt V. Smith, 430. Plimley v. Westley, 73. Poirier v. Morris, 235. Polak V. Everett, .355. Polhill V. Walter, 101. Pollard V. Herries, 52. Pontiac V. Koss, 450. Pool V. Anderson. !l'.». Ptxjley V. Brown, 330. " V. Driver, 142. Porteoiis V. Miiir, 37. Porter v. Cushnian, 221. Potter V. Brown. 387, 3!tl. Potters V. Taylor, 11.3, 200. Pott V. CleKK, lii- " <•. Reed, 224. Poulton V. Dolmajare, 170. Powell V. Peck, .320. Powers V. Lynch, 387. Prangre, Ex /xirtr, 280, 2S4. Pratt V. Drake, 151. " V. .NfacDouKall, 322. Prentiss v. Savage. .387. Prescott V Flynn, 158, 430. Preston v. Dindiani, 84. " V. Johnston. 252. Prestwick v. Marshall, 141. Prevosi V. Piekel. 100. Price V. Mitchell, 428, 430. " V. Taylor, 84. Prideaux v." Collier, 2.5yS2K. " V. Austin, 3n. " V. Hfthell, X(\, H,S. " V. FisinT, 32!l. V. Peakt', S"). Kolun-lson v. ]?end(M. " V. Kanawiia 15ank, 141. V. Taylor, 2(iO, 270. " V. Yarrow, 314. Roliitaille V. Denechaud, 347. Rol)son V. Curlew is, 277. " V. Oliver, 32S, Roche V. Camiibell. 420. " V. Roanoke Seniinarv, 17.5. Kock Co. liank v. KollistiT. 22.5. Hufliiier V, Kniekerhoekei', !'(>. Io>lfey V. (ireenwell, ,S4. Roofers V. Langl'ord, .'528. " V. Morris, 33(1. '• V. Stephens, 277, 30ii. '■ V. Wiiitely, 4(),-|. liiijiu V. Stewart.' 404. l!iii,'erson V. Ladhroke, 405. i;< lis V. Rtaie.'. 40,\ io'niford Canal Co.. R(, 458. iuiseow V. }lard\-. 272. liose-Hclford r.'Co. V Rutiiscliild V. Cornev, 230. V. Curri"". 2f.J, 2111, .^H'.t. Rouquette v, Overniann 2<)4, 313, 301. Rowe V. Tipper, 274, 284. " V. Young, 109, 110. IIJ, .30(1, 312. Rowlands v. Springett, 270. Royal Canadian bank v V Min V. il 1 aker ion, 45. 31t;, 25 1, . 37. 143, 15ank of Mon treal, 308. li'oM- V. .Sims, 212. I.'o'her V. Kieran, 274. iJoss v. ('odd, l.'V.l, 141. •• V. Dixie, 252. 31\ •' V. McKmdsav. 444. •• V. Tvson. IM'. 2."4. " V. Wi!s(,n, 2114. •• V. \Vin;,ns. p:u. ioi-sin V. Mi'tartv. ll"). Ruff V. Wehl., .15. Russell V. Croft..n, 304. " V. Fisher, 342. " V. McDonakl, .37(; '• V. I'iiillips, 104, 11.3, 114. " V. Wells, 84. Rutherford, lii, 340. Ryan v. Hankof Montreal, 152, 31.3, 315. " V. Hinit, 340. " V. Malo, 280, .504. " V. MoConnell, 182. " V. McKerrall, 171, 35S. j Rvmes V. Clarkson. .3(i. I i ^• I ' Sackett v. Spencer. 410. * .Sager v. Tupper, 437. Salmon v. u'ebh, 38. S.imson V. Yager. 304. 1 Sanderson, v. ('oilman, 313. ! Samlford v. Ross, 115. Sands V. Clarke, 205, 42:>. " V. Keator, 347. . Saul V. Jones, 250, 207. ■ Saunderson v. .Jjickson. 40. , '• V. .ludge. 420. I " V. I'iixr. 70. I Sa\age v. Aldren, 218. 347. Sawver V. Thomas, 4(»3. " V. Wisewell, r.18. Saxton V. .Stevenson, 44, 78. Scales V. .lacolt, 345. Scantlin v. St. I'ierre, 120. Scard v. J;ickson, 118. Sccidly V. McCallum, 4.5C.. Seliiieider v. Xorris, 40. .Siiiotield, Kr ji'irti, 18(1, ],s;{. .ScholHeld V. Hayard, .372. Scholev V. Ramshi.ttoni, 100, 3ii(). Schroeder v. Central Hank, 311, 401. Scott V. I'.ink of New Brunswick, 152. " V. Douglas. .320. " V. (^)uehec I'.ank, 37. 18G. V. 'I'urnliuli, 217. Sculder V. I'niou X.iticjial Rank, 382. .Seal)urv \. Ill ngeifo-.d, 321. Sears V. Lant;:. 213, XXX CASES CITED. \ 51) Seavfi- V. Lincoln, IlV). Sehiijf V. Abitliol, '2^)4. Seguin V. Bcr^jeviii, 'AMi. Scnter v. Continental Hank, lill. Sernll v. Derliyshire Ry. Co., 230. Seymour v. Wright, 277. Shand v. l)u HuiHson, 811. Shank v. li\itsch, 40. Shannon v. Hastings, 21tO. Sharp V. Haih-y, 'I'Xt. Shawv. Crawford. 334. " V. Railroad Co.. 43'). " V. .Salmon, 2!t4. Shearer v. Compain, 12!(. Shedd V. Brett, 252. Sheffield v. London .1. S. Bank, 45«. Shelhy v. .ludd, 213. .Shelden v. llentley, xjviii. Sheldon v. Piirker, 70. ' Shellard, hJ.r parte, 50. Shelton v. Braithwaite, 27i'<. Shei)ley V. Hurt', 234, 357. Shii>sey v. Bowtr/ Xat. Bank, 203. Shiriff'v. Holcomb, 34tl. Shisler v. Van Dyke, 140. iShreeves v. Allen, 4.'>5. Shute V. Robins, 244. Shuter V. I'axton, .Wf!. Slmttleworth v. .Stephens, 58. .Sibree v. Trifip, 415. Siddall T. (Jibson, 420. Siggers V. l?ro\vne, 21t]. .Sigourney v. Lloyd, 223. Sinniionds v. T.aylor, 40<). Simmons v. London .J. S. Biink, 454, 457, 458. .Simon v. Lloyd, 337. Sinionds v. Travis, 337. Rimonton v. Graham, 320. Sinclair v. Henderson, 105. " V. Mulligan. 1(!. " V. Robson, 260. " V. Wakefield, 130. Singer v. Elliott, 323. " V. Hii.sHon, 448. Skilbeck v. Porter, 140, 321. Slott V. Fairlamb, 175. Small V. Riddell, 317. Smith V. Abbott, 113, 25;<. •' V. Battens, NS. " V. Bellamy, 57, 200. " V. Bibber,' 17<). " V. Hill, 321. " V. Horsfjill, 484. " V. .TucKson, 334. " V. Kendall, 00. " V. Marsack. 314, 321, 431. " V. McEaeliren, 10,i. " V. Mercer, 207. " V. New S. Wales Bank, 248. " V. Nicholson, 340. Smith V. Nigiitingale, 47. " V. Richards, 170. " V. Richardson, 185, 321. " V. Smith, 175, 301. " V. Thatcher, 300. " V. XTnion Hank, 28. " V. Cnion Bank of London, 406. " V. Vt^rtue, 113, .308, 312. " V. Whiting, 270. Siiaitli V. Miugay, 54. Snarr v. Toronto V. B. & S. S., 135. Snee v. Prescott, 223. Soares v. tilyn, 01. 220. Societe do Construction v. Banque Xationale, 1.30. Societe (J enerak v. Metropolitan Bank, 377. Solarte v. Palmer, 270. Solly V. Hinfle, 177. Solomon \'. l)avis, 351. Soltykoff, lir, (.1- iKtrti- Margrett, 131. Southall V. Rigg, 174. Southam v. Raiiton, 444. S. Carolina Bank v. Case, 141. Soutiier V. Wallace, 43, 300. Spalding v. McKay, 3(>7. Spaulding v. Evans, 02. SiH'lman v. Robidoux, 178. Spindler v. Grellett, 420. .Spong V. Wright, 345. Springfield Ins. Co. v. Peck, 311. Sproat v. Matthews, 304. St. Aubin v. Fortin, 358. St. Cesaire v. Macfarlane, 450. St. Jean v. Metroiwlitan Bank, 1,56. St. .lohn V. Rykert, 32(i. St. Louis V. Senecal, 100. St. Stephen Ry. Co. v. Black, 43, 267- Staffoi-d v. Yates, 275. Stagg v. Elliott, 158. Standard Bank v. Dunham, 143. Stanton v. Blossom, 274. Star Kidney Pad Co. v. Greenwood, 170. Stayner v. Howatt, 200, 205. Ste Marie v. Stone, 340. Steele v. Harnier, 134. Steele v. McKinlay, 101, 317, 310, 323. Steer v. Adams, 130, 321. Stein V. Ygle.sias, 220. Steinhoff V. Merchants' Bank, 284. 202. .Stephens v. Hughes, 350. .Stephens, A'x /w/tc, 312. Stephen.son v. Miller, 337. .Stevens v. Blount, 84. Stewart v, Kennett, 274. " V. Lee, 40<>. Stinison V. Whitney, 435. St)cken V. (,'ollin, LIS'.!. Stockman v. I'r.rr, 270. St(ioki> \' . 'I'ay'or, 2;'. 'ir'ii I CASES CITED, XXXI ;v2i. [jiindon, 406. 312. S. S., 135. V. Banque piiUtan Bank, ai'tjrt^tt, 131. ^ 141. 50!). 7S. I. Peck, 311. le, 4.')t). n Bank, 156. I. i>6. Black, 43, 2b.. , 143. Ireenwood, IT'J. 29.5. M, 317, :<10, 323. 21. Bank, 284. 292. i39. ■1. 234. Storv V. 15;itt(ii. 371. " ' s: McKay, 3S(). Stoutinioif V. Clark, 314, .Straas v. (Jillx'i'r, ."iO.'). Htrakcr V. (Jraliam, 24(1. Stratliy V. NiclidUs, LSI, 185 Street V. Bfckwitli, 37 " V. (/uiiiton, 174, " V. Walsh, ;{ti2. StrcuK V. Foster, 3.52. ■Stuart V. Bowman. 8. StmUiy V. Bfcsty. 29:'. .StiiUy.inan v. Yea^'ley, _ . Stiirdv V. Henderson, 241. .Sturtevant v. Ford. 229, Suelie & ( 'o., .Tosei)li, Ji 38. 448. Siitfell V. I?ank of Knjiflaiid, .361. Suinnierfeldt, In re, v. Worts, 237- Suse V. l*oiii])e, .327. Sussex Baid< v. Baldwin, 261. Sutlierland v. I'atterson, 47, 199, 41(», 42(». Sutton V. Toouier, 3()4. Swaisland v. Davidson. 18!), 3(52, 364. Swan, /;.<• iwrfe, 1S4. 229, .372. " V. X. B. A. Co., 207, 4.34, 458. Sweenev v. Faster, 223. Swift V. Smith. 435. Swiiiyard v. Bowles, 272, 2i)(i. .Sylvaiii v. Flanagan, 237. ^ Taher v. Cannon, 59. Tarratt v. Wilmott, 2!)2. Tatam v. Haslar, 201. 433. Taylor v, Croker, 1.37. 314, 431. " V. Cnrrv, .3!». " V. (Jrier, 288,290 " V. McFarlane, 37 " V. Newman, 58. 'i'ees V. McArtimr, 417. Temple v. Jones, lO!). " V. Pnllen, 117. Terry v. Parker, 266. Tiiaekray v. Blackett, 375. Thew V. Adams, 13!). Thieknes.se V. Bromilow, 142, 319 Tiiird Natic iial Bank V. V. V. Thomas v. Grace, 416. " V. McLecd, 174, 228 Thompson v. Cotterill, 27!K V. Farr, 178. " V. McDonald, 357 V. Sloan 45. Ashworth, 268. Cosby, 41, 42, 44, 78. Nat. Bank, 223 Co., Bank, 151. Toronto 1). Torrance v. Thompson v. I'liivpr^'al Salvaj?*- 134. Tiiorn V. Sandford, 279. Thome V. .Scovil, 425. Thornton v. Mavnard, 233. Thorold U(fr. do. V. Imp. Thorpe v. ('(nnnlie, 347. Thurber v. Deseve, 40. Thurgar v. Clark.', 31 «. " V. Travis, 3.56. Ticonic liank v. Smiley, 98. Tidmarsh v. (J rover, 364. Tindal v. Brown, 244, 27.5. ■rinnnin.s V. Cibbins, 329. Toms V. Wilson. 117. Tondeur, Ex p(iiii\ 250. Tootell h'.f jKirlr, S5. Toponce V. Martin, 1!).5. Tt)pi)ing V. Buffalo B. & C. Ky. Co.. 1.34. M. Co., V. Mnclaren 423. Bank B. N. A., 105, 313. Towne V. Wason, 235. Township of Toronto v. Mcliride, 72. Trecothick v. Fdwin, 430. Treacher V. Hinton. 308. Treuttel v. Barandon, 223. Trigffs V. Ne William, 2.58. Trimbev v. Vignier, 387. Trne v."Collins, 28!). Trueman v. Loder, 141. Trust & Loan Co. v. Hamilton, 4.56 Tunno v. Lagiie, 2!)1. Turner v. Leech, 275. " V. Samson, 267. " v. Stones, 32!). Tnrqnand, Kr /mr/c, 452. Twogootl, Ex pnitf, 180. u. Uniacke v, Dicks.ni, 11 Union Bank v. Brvaiit, 172, V. ' '" V. V. V. V. " V. " V. V. Unicm Nat. Bank v .311. United States v. White, 61. U\)ton v. Ferrers, 76. Usher v. Dauncey, 1 18. Buhner, 144, 1!)4. Cole, 312. Fanis worth, 1.52. (iibeault, 26S. McKilligan, 264. Middlebrook, U!), Ontario Bank, 314. Willis. 2()2. Oceana Cn. Bank, XXSll CASES CITKl). V. Viijfliiini) V. Bank of Kngland, 21, (). W.addell V. .lavnes, l!t2. Wa.'JTner v. Kenuer, 88. \Viun V. Bailey, .S7(). Wainnian v. Kvnnia!i, 345. W linwripht v. 'Webster, 32!>. Walker V. Atwood, 114. Jiank of New York, 112. Macidonald, HolwrtH, 83. Stetson, 242. Sweet, 347. Affry, 244. Henderson, 420. V. V. V. \. V. Wallace v. V. " V. Soutlier, 235, 381. Wallbridge v. Becket, 107. Wahnesley v. Child, 375. Walter v. Havnes, 289. •' V. Moisons Bank, 144, 237. Walters v. Mahan, 51. Walton V. Mascall. 272, 290. Ward V. Evans, 328. " V. National BaJik of N. Z., 359. Warren v. Lynch, 438. Warrington v. Earlj', 304. " V. Furbor, 290. Warwick v. Nairn, 178. V. Rogers, 341, 300. Washington Bank v. Kruin, 183. Waterous Engine Co, v. McLean, 303. Watkins v. Ma>ile, 211. Watson V. Evans, 62. V. Porter, 3.52. ': V. Tarpley, 252. Watters V. Lordly, 207. " V. Reiffenstein, 258. Watts V. Robinson, 335. Wauto V. Robinson. 1175. Way v.Towle, 390. Webb V. Fairniainer, 94. " v.Herne Bay Coin'rs, 458. Webster, Ex jvn-te, 358. Wedlake v. Hurley, 223. Wegerslotfe v. Keene, 1 13. Wells v. Hopkins, 177. " V. Whitehead, 379. Weslevan Seminary v. Fisher, 175. West v. Brown, 201. " V. Bown, 72, 73, 139, S21. •' V. Maclnnes, 227. West London Com. Bank v. Kitson, 101, l(i4. Westacott V. Sniallev, 323. Westfall V. Braley, 329. Westloh V. Brown, 151. MA. Westminster Bank v. Wheaton, 390. Westt\ 131, 175. " v. Bank of England, 257. White V. National Bank, 223. " V. Smith, 77. " V. Stoddar.1, 275, 291. " V. Wells, 1 14. Whitehead v. Walker, 2:'8, 252, 272, .348. Whitehouso v. Bedell, 208. Whitman v. Barker, 178. Wiffen V. Roberts, 95, 250. Wilcocks V. Tinning, 139, .321. Wilcox V. Wilcox, 8. Wilders V. Stevens, 217, 232, 321. Wiley V. Ledyard, 420. Wilkes V. Skinne r, 195. Wilkitw V. Jadis, 240, 258. Wilkinson v. Johnson, 221, 301, 370. V. Lntwidge, 102. V. Unwin, 232, 321. Willans v. Ayers, .57, 327. Willett V. Court, 217. Williams V. Bayley, 194. " V. Colonial Bank, 458. " V. Gait, 27. V. (;ermaine, 293, 309. " V. .fames, 235. " V. Noxon, (JS. V. Shadbolt, 223, 224. " V. Wheeler, 393. " V. Williams, xlix. Willis V. Bank of England, 188. " V. Barrett, 01. " V. lireen. 2.52, 282. Willoughby V. Moulton, V\. CASES CITED. XXXIU Wilson V. Aitkin, 110. " V. Uimquo Ville Marie, 400. " V. Biirthrop, 140. " V. Brown, 143, 300, 357. " V. Deiners, 347. " V. (JateH, 41(5, 438. " V. Homes, 223. " V. McC^iefn, 223. " V. Prinple, 274, 'i87. " V. Rhodes, 4S5. " V. tSwabey, 275. Windham liank v. Norton, 2(53, 204, 291. Wirth V. Austin, 200. Wise V. Charlton, 420. Wiseman v. Easton, 142. Withall V. Huston, 200. Witte V. Derby Fishing Co., 1G4. •' V. Williams, 50. Wolkov. Kuhne, 431. Wolverhampton & S. B. Co. Ex parte, 194. Wood V. Connop, 235. " V. Hij,'^'inbotham, 85. " V. Ross, 180, 227, 340. " V. Siiaw, 4'.», 150, 171, 100, 488. " V. Stephenson, 39(i, 308. " V. Young, 78. W'oodbridge v. 15righani, 420. V. Spooner, 38. Woodcock V. Houldsworth, 200. ^Voodll^n^l w Feai, 32!», 404. Woods V. Dean, 204. Woodthorpe v. Lawes, 275. Woodward v. IVll, 232. Woodworth V. Bank ot America, 430. Wookey v. Pole, 207, li. Worden v. DtKltre, 40. Wordsworth v. Macdougall, 217,321. Workman v. McKinstry, 43(5. Worley v, Harrison, 77. Wright V. Hall, 448. " V. Maidstone, 37(5. " V. Shawcross, 284. " V. Wright, 171. Wyld, Ex parte, 372. Wylde V. Wetmons 245. Wynne v. Jackson, 383. " V. Raikes, 10(5. Y. Y&U'A Ex parti', 212. " V. IJell, 311. " V. Tiiompson, 303. Yglesias v. River i'late Bank, 3(iO. Yorkshire Banking Co. v. Beataon, 145. Young V. Adams, 320. " V. .A.usten, 37, 38. " V. Fluke, 70, 320. " V. (ilover, 20, 103, 212. " V. (Jrote, 314. 3(52.400. M C.B.B.A. — C ADDENDA BT (X)RRIGENDA. rage l'J7, . . line 23, . . for " C " I'cad " B." .. 2'21, .. " 2(5, .. " "Meyer" " " Ma>er." .. m .. " 10, .. " "Colin" " "Cohn." .. 305... " 3,.. " "H.L." •' "3«.L." .. 403^ .. .. 17, .. " "Marter" " "Marler." ., 431_ .. " 16, .. " "Maker of a note" " "Acceptor of alii." .. m, .. "in, .. " "H.c." " "C.^.- 453, add to laet line, " 22 and 59 " CASES OVERRULED, QUESTIONED OR DISTINGUISHED. Where a caao ia in whole or in parfc in conflict with a provision of the Hills of Exchange Act, 1890, the section of the Act alone ia given, even \vhen the case may have been previously overruled or overridden by legislation prior to the Act. ifalil. Allen V. Kemble, G Moore P. C. 3U (1848), qualified in Kouquette v. Over- mann, L. R. 10 Q. B. 540 (1875). Armfteld v. AUport, 27 L. J. Ex. 42 (1857), diatinguiahed in McCall v. Taylor, 19 C. B. N. S. 801 (186.5). Arthur v. Clarkson, 35 Beav. 458 (18G5), disapproved in lie Whitaker, 42 Ch. D. at p. 125 (1889). Bacon v. Searles, 1 H. Bl. 88 (1788), overruled bv Jones v. Broadhurat, 9 C. B. at p. 185 (1850). Balloch V. Binney, 5 N. B. {H Kerr) 440 (1847). Contra, section 49, s-a. 5. Banbury v, Lisaet, 2 Stra. 1211 (1774), overruled by Griffin v. Weatherby, L. K. 3 Q. B. at p. 759 (1868). Bank of Bengal v. Fagan, 5 Moore Indian Appeals 40 (1849), distinguished in Jonmenjoy v. Wataon, 9 App. Caa. at p. 5()8 (1884). Bank of Bengal v. Macleod, 7 Moore P. C. 35 (1849), distinguished in Jon- menjoy v. Watson, 9 App. Cas. at p. 567 (1884). Bank of Michigan v. Gray, 1 U. C. Q. B. 422 (1841). Contra, section 49 ( j). Bank of Montreal v. Langlois, 3 Rev. de Leg. 88 (1847). Contra, section 32 (a). Bank of U. C. v. Parsons, 8 U. C. Q. B. 383 (1847). Contra, section 45 i'l) (1). Uanque du Peuple v. Ethier. 1 R. L. 47 (1809). Contra, section 8, s-a. 5. I3artrum v. Caddy, 9 A. & E. 275 (1838), distinguished in Glasscock v. Balls, 24 Q. B. D. 13 (1889). Baxter v. Bruneau, 17 R. L. 300 (1889). Contra, section 29, s-s. 3. Bell V. Moffat, 20 N. B. (4 P. & B.) 121 (1880). Contra, sections 23 and 56. lb XXXVl CASKS ovr.nnuLKD, etc. Berton v. Central Bank, 10 N. B. (3 Allen) 19;{ (18(13). Contra, section 17 8-8. '2. Bettis V. Weller, IJO U. C. Q. B. 23 (1H70), overruled by Third Nat. Bank V. CoHliy, 43 U. ('. g. B. Cit (1H7H). Bickerdike v. Bollnmn, 1 T. R. 40/> (17Hr>), criticiHerl in Cnrter v. Flower, 1(1 M. .V W. at p. 7JH (1«47). Bloxani, K.v pitrte, (1 Ves. 44'J (1801), doubted in Ue GomerHall, 1 Ch. D. 137 (1875). and overruled in Ex parte Newton, 1(1 Ch. D. 336 (IHHO) Boulton V. WelHh, 3 Bing. N. C. (1S8 (1H37\ ovorrukd in Lewin v. Gom- piTtz, (1 M. iV W. at p. 403 (1840). Brown v. Davits, 3 T. R. 80, '178'.)), overruled in Kx parte Swan, L. R. Va\. 3r,K (1K(18). Brunei v i-iilonde, 1(1 L. C. II. 347 (18(1(1). Contra, Marc Aurelu v. Duro- cIkt. -) R. L. 105 (1873). Ih-dwn V. l'liil|)i)t, 2 M. A Rob. "285 (1840), overruled bv Sinitli v. Braine, 1(1 Q. B. at p. '254 (18,51). Calla^,'h;in v. Avlett, "2 Camp. 54!( (1810), overruled by Fenton v. Goundry, 13 V.ttk, 45',» (IHll). Caniid}.'o v. All( iibv, (1 B. A C. 373 (1827), difitinf^uislied in Leeds Bank v. Walker", 11 Q. B. 1). at p. 8H (l,S83). Canadian Investment Co. v. Brown, 1!) R. Ij. 3(14 (181)0), Contra, section (13, s-a. 2. Castriifue v. Btitteyieg, 10 Moore P. C. \)i (18o5s explained in Abrey v. Crux, L. R. 5 C. V. 42 (18(1(1). Catton v. Simpson, 8 A. iV 10. 13(1 (1838), overruled in Aldona v. Corn- well, L. R. 3 (,) n. at p. 587 (18(18). Ca/A't v. Kirk, '.» N. B. (4 Allen) 513 (18(10). Contra, sootion !) ( Kx. H,">1 (iH.'jl). Contra, section 01. Frith V. Forbes, 4 Do G. F. A' J. 401) (18(13), explained in E.r pitrte Arbuthnot, 3 VA\. D. 4K0 (IHTO), and overruled in Brown v. Kon^,'h, -it) Ch. D. H48 (Ihk4). Fvfe V. Bovcu. 21 B. L. 4 (18'Jl). Contni, section ">li. Gill V. Cubitt, 3 B. .V C. 4()() (I8.'i), dissented from in Bank of Bengal v. INIacleod, 5 Moore, Indian Appeals, I (I84'.l) ; held overruled in London A- County Bank v. Groonu', 8 q. \\. i). 288 (18,sl). , Burke, 11) O. 11. 204 (18'J0). Conlni, section 30, s-s. 4. 1 V. Uobarts, ID Kx. 3:)7 (187.')), and 1 Apii. fas. 47(1 (1870). dis- tinj^iiished in London iV (.'ounty Bank v. River IMate Bank, 20 Q. B. 1). 241 (1887); criticised in I'.ivston v. London .Joint Stock Bank, 34 ('li. 1). !)•') (188(1); disciuised v. London Joint Stock Bank, 13 Ajip. Gas. at p. 342 (18,S8). , /•..(• imrtc, .") J)e G. M. tV (i. 3.")(1 (18")(li, overruled by (,)riental Corporation v. Overend. L. \\. 7 Gh. at p. l."(2 (1871). " Youn-^, 23 IT. G. Q. B. 307 (18tU)i. Cnntni. section !) (d). (iirsin v Goodwii (jruliain Cirant v. Hall v. Smith, 1 B. A- G. 407. (1823), overruled bv /v'.r iniite Buckley, 14 M. A W. 4(11) (1845). Hansard v. Robinson, 7 B. A- G. 1)0 (1827). not followed in Wright v. Lord ^Maidstone, 1 K. A J. 401 (iSjJ). Harris v. Benson, 2 Str. 1)10 (1713), overruled bv Taunlev v. rainier, 2 Str. 1,000 (1734) ; Windle v. Andrews, 2 B. A A. 01)1), 700 (1811)). Harvey v. C'ane, 34 L. T. N. K. 74 (1^7(t), questioned m Ilojjarth v. Latham, 3 Q. B. D. 051 (1878). Harvey v. Bank of Hamilton, 10 S. G. Can. 714 (1881)). Contra, section 8. 8-8. 4. Ileiith V. Sansoni, 2 B. A Ad. 21)1 (1831), quesli.'njd in Smith v. Braine, 10 Q. B. 244 (1851). IIhidhau«h v. Blakey, 3 G. P. D. 130 (1878), overruled by Steele v. Mc- Kinlay, 5 App. Gas. 782, 785 (1880), and see section 17 (2) of the Act. Howland v. Jenninjj;s, 11 U. G. G. P. 272 (1801), overruled bv St. John v. Ilykert, 10 S. G. Can. 278 (1884). Bengal ished in ID- 4. lanson v. Paxton, 23 U. C. C. P. 439 (1874), overruled by Macdonald v. Whitfield, 8 App. Gas. 733 (1883). Ingham v. Primrose, 7 G. B. N. S. 82 (1859), dissented from i-i Baxendale V. Bennett, 3 Q. B. D. 532 (1878). XXXVlll (;a8E8 overruled, etc. Doran, f) Ont. A. R. 558 (1880). Contra, section 21, s-s. 2 {d). Broadhurst, 'J C. B. 173 (1850), qualified in Cook v. Lister, 13 C. B. N. S. 5!)7 (18(53) ; discussed in Thornton v. Mavnard, L. R. 10 C. P. 698 (1875) ; questioned in Soloman v. Davis. 1 C. & E. 83 (1883). Goudie, 2 Rev. de Le^. 334 (1820). Contra, section 17, s-s. 2. Hart, 2 Rev. de Leg. 29 (1819), overruled. See p. 40. Lane, 3 Y. & C. 281 (1839), overruled by Deuters v. Townsend, 5 B. & S. 013 (18()4). Jones V. Whitty, 9 L. C. R. 191 (1859). Contra, section 8, s-s. 4. Jenks V. Jones V. Jones V. Jones V. Jones V. Keates v. Whieldon, 8 B. & G. 7 (1828), overruled by Gheetham v. Butler, 5B. ct Ad. 837 (1833). Keene v. Beard, 8 C. B.N. S. 372 (1860), qualified in Ilopkinson v. Forster, L. R. 19 Eq. 76 (1874). Kirk V. Blurton, 9 M. & W. 2H4 (1841), questioned in Forbes v. Marshall. 11 Ex. at p. 180 (18.i5) ; distinguished in Odell v. Cormack, 19 Q. B. D. 223 (lfiK7). Lagueux v. Casault, 2 Rev. do Leg. 28 (1813), overruled. See p. 40. Lagueux v. Everett, 1 Rev. de Leg. 510 (1817). Contra, section 17, s-s. 2. Lambert, Kx parte, 13 Ves. 179 (1794), overruled in K.r ixirte Swan, L. R. 6 Eq. 358 (1868). Latour v. Gauthier, 2 L. C. L. J. 149 (1866). Contra, section 56. Lloyd V. Ghune, 2 Giffard, 441 (1860), criticised in Jie Wliitaker, 42 Ch. D. 125 (18H9). Marler v. Molsons Bank, 23 L. C. J. 293 (1879). Contra, sections 53 and 72. Massue v. Crebassa, 7 L. G. J. 211 (1868), overruled. See p. 358. McCorkill v. Barrabe, M. L. R. 1 S. G. 319 (1885). Contra, section 8, s-s. 4. McDonnell v. Holgate, 2 Rev. de Leg. 29 (1821). See p. 42. McPhee v. McPhee, 19 O. R 603 (1890), overruled by Robertson v. Lons- dale, 22 O. R. (1892). Merchants' Bank v. Spinney, 13 N. S. (1 R. it G.) 87 (1879). Contra, section 51, s-s. 7. Merchants' Bank v. Stirling, 13 N. S. (1 R. & G.) 439 (1880). Contra, section 63, s-s. 2. Merritt v. Maxwell, 14 U. C. Q. B. .50 (1886). Contra, section 90, s-s. 2. Mertens v. Winnington, 1 Esp. 113 (1794), doubted in Ex parte Wvld, 2 ]3e G. F. it J. 650 (1860). Montgomery v. Boucher, 14 IT. G. G. P. 45, (1964), overruled by St. John V. Rykert, 10 S. C. Can. 278 (1884). Musgrave v. Drake, 5 Q. B. 185 (1843), dissented from in Hogg v. Skeen, 18 G. B. N. S. at p. 426 (1865). Napier v. Schneider, 12 East, 420 (1810), held overruled in Re Genera South American Co., 7 Gh. D. 644 (1877). Narbonne v. Letreau, 9 L. G. J. 80 (1863). Contra, section 5(5. Nash V. Gibbon, 9 N. B. (4 Allen) 479 (1860). Contra, section 9 {d). CASES OVERRULED, ETC. XXXIX O'Connor v. Clarke, 18 Grant, 422 (1871), overruled by St. John v. Rykert, 10 S. C. Can. 278 (1884). Owen V. Van Uster, 10 C. B. 318 (1850), diatinguishefl in Ee Barnaru. 32 Ch. D. 452 (1886). I'lilmer v. Fahnestock, 9 U. C. C. P. 172 (1859). Contra, section 9 (rf). Parry v. Nicholson, 13 M. & W. 778 (1845), doubted in Hirschmann v. Budd, L. li. 8 Ex. 172(1873). TMriseau v. Ouellet, M. C. II. (59 (1850). Contra, section 56. Partridge v. Bank of England, 9 Q. B. .390 (1846), criticised in Goodwin V. Robarts, L. R. 10 Ex. 354 (1875). I'aterson v. Hardacre, 4 Taunt. 114 (1811), overruled by Bailey v. Bid- well, 13 M. & W. 73 (1844). I'aterson v. Pain, 1 L. C, R. 210 (1851). Contra, section 66. I'iors V. Hall, 18 N. B. (2 P. * B.) 34 (1878). Contra, sections 23 and 56. I'liwell v. Ford, 2 Stark. 164 (1817), disapproved of in Lewis v. Sapio. M. & M. 39(1827). I'ralt v. Macdougall, 12 L. C. J. 243 (1808). Contra, sections 56 and 72. s-s. 2. Wyld, 2 lua V. MegRott, Cas. temp. Ilardw. 77 (1730), overruled bv Luniley v. Palmer, 2 Str. 1,000 (1734); Windle v. Andrews, 2 B & A. 6;)9, 700 (1819). Ktirina v. Hawkes, 2 Moodv, C. C. 60 (1810), overruled by Peto v. Rov- nolds, 9 E.x. 415 (1854). Ui.'liardson v. Daniels, 5 U. C. O. S. 671 (1839). Contra, section 39. s-s. 2. Richards, Re, Shenstone v. Brock, 36 Ch. D. 541 (1887), criticised in /I'c Whitaker. 42 Ch. D. at p. 125 (1889). Rivet V. Leonard. 1 L. C. J. 172 (184H). Contra, Badeau v. Brault, 1 L. C. J. 171 (1857) ; Danziger v. Ritchie, 8 L. C. J. 103 (1864). Rjhartb v. Tucker, 16 Q. B. 560 (1851) distinguished, in Bank o' England v. Vagliano (1891), App. Cas. 107. Robertson v. Kensington, 4 Taunt. 30 (1811). Contra, section 33. Rothschild v. Corney, 9 B. & C. 388 (182',i), distinguished in London A County Bank v. Groome, 8 Q. B. D. 288 (1881). Rothschild v. Currie, 1 Q. B. 43 (1841), questioned in Allen v. Kemble, 6 Moore, P. C. 323 (1848) ; explained and qualified in Home v. Rou(iuette, 3 Q. B. D. 521, 523 (1878) Rowe V. Young, 2 B. & B. 105. Contra, 1 & 2 Geo. IV. c. 78 (Imp.) and section 19, s-s. 2 (a). Savage v. Aldren, 2 Stark. 232 (1817). Contra, section 33. Saxton V. Stevenson, 23 U. C. C. P. 503 (1874). Contra, section 9 (a van's Rolls Reports liing. N. C liingham's New Cases, Common Pleas. Brown C. C Brown's Chancery Cases. Burge Commentaries on Colonial and Foreign Laws, 18.SH Burr ]5urrow's Reports, King's Hench. Byles Byles on Bills, l.")th ed , IH'.tl. C. 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Y. and C \''ounge and Collyer's Reports. ques was I and a VGi lettei spea mod( of Ijf was a me P but t that as a J whicl recog mercl in the caee c 10 E,^ INTRODUCTION. The origin of Bill? and Notes was formerly a vexed question among legal antiquarians. On the one hand it was claimed that they were known to the ancient Romans and Jews, while on the other hand they were assigned to a very recent date. It is now conceded, however, that the letter or order on Athens in favor of his son of which Cicero speaks in one of his letters had little in common with a modern Bill of Exchange; and that the writing or note of hand for ten talents mentioned in the hook of Tobit was not the parent of the modern Promissory Note, but a mere acknowledgnent of debt. Promissory Notes are no doubt the older instruments; but thpy only acquired their negotiable character long after that of Bills of Exchange had been firmly established as a part of the law merchant. The process of evolution by which these and the other instruments which are now recognized as negotiable acquired that right under the law merchant has probably been no where better described than in the judgment of the late Chief Justice Cockburn in the case of Goodwin v. Robarts reported in the Law Reports, 10 Exchequer. xlvi INTRODUCTION. ^* This was a case in which the negotiability of certain Eussian and Austrian bonds was in issue. The Chief Justice took occasion to correct the idea that the law merchant was a fixed or stereotyped body of law, forming part of the ancient common law or coeval with it. He claimed that it was of comparatively recent origin and was simply the usages and customs of merchants in the different departments of trade, ratified by the decisions of courts of law upon proof of their existence in the marts of commerce. He there quotes with approval the remark of Lord Camp- bell, that " when a general usage has been judicially ascertained and established, it becomes a part of the law merchant, which Courts of Justice are bound to know and recognize." He then proceeds, at page 346, to trace the history of the development of the law merchant as regards the different classes of negotiable instruments as follows: — "Bills of Exchange are known to be of comparatively modern origin, having been first brought into use, so far as is at present known, by the Florentines in the twelfth, and by the Venetians about the thirteenth century. The use of them gradually found its way into France, and, still later and but slowly, into England. We find it stated in a law tract, by Mr. Macleod, entitled " Specimen of a Di- gest of the Law of Bills of Exchange," priiiled, we believe, as a report to the government, but which, from its research and ability, deserves to be produced in a form calculated to insure a wider circulation, that Eichard Malynes, a London merchant, who published a work called the Lex Mercatoria, in 1622, and who gives a full account of these bills as used by the merchants of Amsterdam, Hamburg, and other places, expressly states that such bills were not used in England. There is reason to think, however, that this is a mistake. Mr. Macleod shews that promissory INTRODUCTION. xlvii 31' tain Chief e law rming . He id was ffereut arts of merce. Camp- licially ,he law 3W and story of •ds the lows : — ratively so far twelfth, The nd, still ated in 3f a Di- believe, esearch dilated ynes, a the Lex of these amburg, were not ?er, that ►missory notes, payable to bearer, or to a man and his assigns, were known in the time of Edward lY. Indeed, as early as the statute of 3 Rich. 2, c. 3, bills of exchange are referred to as a means of conveying money out of the realm, though not as a process in use among English merchants. But the fact that a London merchant writing expressly on the law merchant was unaware of the use of bills of exchange in this country, shews that that use at the time he wrote must have been limited. According to Professor Story, who herein is, no doubt, perfectly right, "the introduction and use of bills of exchange in England," as indeed it was evervwhere else, " seems to have been founded on the mere practice of merchants, and gradually to have acquired the force of a custom." With the development of English commerce the use of these most convenient instruments of commercial traffic would of course increase, yet, according to Mr. Chitty,'the earliest case on the subject to be found in the English books is that of Martin v. Boure, Cro. Jac. G (1603), in the first James I. Up to this time the practice of making these bills negotiable by indorsement had been unknown, and the earlier bills are found to be made pay- able to a man and his assigns, though in some instances to bearer. But about this period, that is to say, at the close of the sixteenth or the commencement of the seven- teenth century, the practice of making bills payable to order, and transferring them by indorsement, took its rise. Hartmann, in a very learned book on Bills of Exchange, recently published in Germany, states that the first knoun mention of the indorsement of these instruments occurs in the Neapolitan Pragmatica of 1607. Savary, cited by Mons. Nouguier, in his work " Des Lettres roperty. " The Courts," he says, " have considered t. se instruments, either promises or orders for the payment of money, or instruments entitling the holder to a sum of money as being appendages to money, and following the nature of their principal." After referring to the authorities he pro- ceeds : " these authorities shew that not only money itself may pass, and the right to it may arise by currency alone, but further, that tiiese mercantile instruments, which entitle the bearer of them to money, may also pass, and the right to them may arise, in like manner, by currency or delivery. These decisions proceed upon the nature of the property (i.e. money), to which such instruments give the right, and which is in itself current, and the effect of the instruments, which either give to their holders, i^f- Hi INTRODUCTION. merely as such, a right to receive the money, or specify the n as the persons entitled to receive it." Another very remarkable instance of the efficacy of usage is to be found in much more recent times. It is notorious that, with the exception of the Bank of England, the system of bankino; has recently undergone an entire change. Instead of the banker issuing his own notes in return for the money of the customer deposited with him, he gives credit in account to the depositor, and leaves it to the latter to draw upon him, to bearer or order, by what is now called a cheque. Upon this state of things the general course of dealing between bankers and their customers has attached incidents previously unknown, and these by the decisions of the Courts have become fixed law. Thus, while an ordinary drawee, although in possession of funds of the drawer is not bound to accept unless by his own agreement or consent, the banker, if he has funds, is bound to pay on presentation of a cheque on demand. Even admission of funds is not sufficient to bind an ordin- ary drawee, while it is sufficient with a banker ; and money deposited with a banker is not only money lent, but the banker is bound to repay it when called for by the draft of the customer (see Pott v. Clegg, 16 M. & W. 321, 1817) Besides this, a custom has grown up among bankers themselves, of marking cheques as good for the ^yurpose of clearance, by which they become bound to one another. Though not immediately to the presentpurpose, bills of lading may also be referred to as an instance of how general mercantile usage may give effect to a writing, which without it would have that effect at common law. It is from mercantile usage as proved in evidence, and ratified by judicial decision in the great case of Lickbarrow V. Mason, 2 T. R. 63 (1787), that the efficacy of bills of lading to pass the property in goods is derived. INTRODUCTION. liii It thus appears that all these instruments which are said to have derived their negotiability from the law merchant had their origin, and that at no very remote period, in mercantile usage of trade, and were adopted in by the law into our Courts as being in conformity with the usages of trade ; of which, if it were needed, -a further contirmation might be found in the fact that, according to the old form of declaring on bills of exchange, the declara- tion always was founded on the customs of merchants. Usage, adopted by the Courts, having been thus the origin of the whole of the so-called law merchant as to negotiable securities, what is there to prevent our acting upon the principle acted upon by our predecessors, and followed in the precedents they have left to us ? Why is it to be said that a new usage which has sprung up under altered circumstances, is to be less admissible than the usage of past times ? Why is the door to be now shut to the admission and adoption of usage in a matter altogether of cognate character, as though the law had been finally stereotyped and settled by some positive and peremptory enactment ? It is true that this scrip purports, on the face of it, to be a security not for money, but for the delivery of a bond ; nevertheless we think that substan- tially and in effect it is a security for money, which, till the bond shall be delivered, stands in the place of that document, which, when delivered, will be beyond doubt the representative of the sum it is intended to secure. Suppose the possible case that the borrowing government, after receiving one or two instalments, were to determine to proceed no further with its loan, and to pay back to tlie lenders the amount they had already advanced ; the scrip with its receipts would be the security to the holders for the amount. The usage of the money market has solved the question whether scrip should be coosidered iiv INTRODUCTION. security for, and the representative of money, by treating it as such. The universality of a usage voluntarily adopted between buyers and sellers is conclusive proof of its being in accord- ance with public convenience ; and there cm be no doubt that by holding this species of security to be incapable of being transferred by delivery, and as requiring some more cumbrous method of assignment, we shuuhl materially hamper the transactions of the money market with respect to it, and cause great public inconvenience. No doubt there is an evil arising from the facility of transfer by delivery, namely, that it occasionally gives rise to the theft or misappropriation of the security, to the loss of the true owner. Uut this is an evil common to the whole body of negotiable securities. It is one which may be in a great degree prevented by prudence and care. It is one which is counterbalanced by the general convenience arising from facility of transfer, or the usage would never have become general to make scrip available to bearer, and to treat it as transferable by delivery. It is obvious that no injustice is done to one who has been fraudulently dispossessed of scrip through his own misplaced confidence, in holding that the property in it has passed to a bona fide holder for value, seeing that ho himself must have known that it purported on the face of it to be available to bearer, and must be presumed to have been aware of the usage prevalent with respect to it in the market in which he purchased it. Lastly, it is to be observed that the tendency of the Courts, except only in the time of Lord Holt, has been to give effect to mercantile usage in respect to securities for money, and that where legal difficulties have arisen, the legislature has been prompt to give the necessary remedy, us in the case of promissory notes and of the East India lionds. INTRODUCTION. Iv The authorities relied on on the part of the plaintiff do not appear to us materially to conflict with this view. Glyn V. Baker, 13 East 509 (1817), which was an action to recover India Bonds, and in which it was held that such bonds did not pass by delivery, the bonds were not made payable to bearer, and there was a total absence of proof that they passed by delivery, though it was asserted by counsel in argument that when these bonds, which in the first instance were made payable to the treasurer of the company had been indorsed by him, they were afterwards negotiable and passed by delivery from one io another. The inconvenience which would have arisen from this decision was remedied by the immediate passing of 51 Geo. 3, c. 64, by which bonds of the East India Company were made transferable by delivery. . The case of Partridge v. Governor and Company of the Bank of England, 9 Q. B. 396; 15 L. J. Q. B. 395" (1846), and which, amongst other things, turned on the negotiability of dividend warrants of the Bank of England is not, so far as that question is concerned, altogether satisfactory, as the decision turned also upon other points. The bank were in the habit of paying dividends to those entitled to them by warrants, and it was pleaded and proved that by a usage of sixty years' standing of the banks and merchants of London, these warrants , aich are not made to bearer were nevertheless negotiable so soon as the party to whom they were made payable had annexed to them the receipt which the bank required before payment would be made. Such a warrant had been obtained by an agent of the plaintiff authorized to receive his dividend, and had been made over to tlie defendants for good consideration, in fraud of the plaintiff, so far as the agent was concerned, but without knowledge of such fraud on the part of the defendants. The warrant had been delivered by the defendants to the Ivi INTRODUCTION. bank, with whom they had an account, to be carried to their credit, and the amount had been entered to their credit in the cash book of the defendants, but had not been carried to their drawing account. The Court of Queen's Beuch held this proof of the custom to be a good defence. The Court of Exchequer Chamber reversed their judgment, on the ground among others, that the custom reUed on was "rather a practice of trade than a custom properly so called, and that such an instrument conferred no right of action on an assignee." We quite feel the force of this distinction, though it is not quite so clear in what sense it was here intended to be applied. Possibly what was meant was, that the custom applies to the warrants of a particular company, and therefore could not form the subject of any general mercantile usage. In Dixon v. Bovill, 3 Macq. 1 (1856), where the note was " to deliver so much iron when required to the party lodging this document with me," there was neither a promise to bearer, nor was there any proof whatever of any usage whereby such notes were dealt with as negoti- able. The case has therefore, with. reference to its facts, no bearing on the present. In Crouch v. The Credit Foncier of England, L. R. 8 Q. B. 374 (1873), the defendants, a limited company, had issued bonds payable to bearer, " subject to the conditions indorsed on this debenture " ; and by the con- ditions so indorsed the bonds were to be paid oif by a certain number being drawn at stated periods ; in which respect, it may bo observed, they bore a close resemblance to tile bonds of foreign governoients when loans are thus raised l»y way ol bond. A bond thus made having been stolen from the lawful owner, and having been purchased bona fide by the plaintiff from the thief, was drawn for payment. The plaintiff claimed payment, which was INTRODUCTION. Ivii refused, whereupon the action was brought. It was there held by three Judges of the Court of Queen's Bench that the plaintiff could not recover ; first, because, even assum- ing that a promise to pay under seal could be considered a promissory note, here the conditions annexed to the pro- mise took away that character from the instrument. No evidence had been offered at the trial as to whether these or similar documents were, in practice, treated as negotiable, nor was any express admission made as to the point ; but it was assumed from the report of the learned Judge before whom the cause was tried, that this had been tacitly admitted. But it was said that these instruments having been only of recent introduction, it followed that such custom, to whatever extent it had gone, must also have been quite recent. Under these circumstances the Court held that, while it was incompetent to the defendants, as an individual company, to give to that which was not a negotiable instrument at law the character of negotiability by making it payable to bearer, the custom could not have that efiect, because, being recent, it formed no part of the ancient law merchaiii For the reasons we have alrea>Iy given we cannot concur in thinking the latter ground conclusive. While we quite agree that the greater or less time during which a custom has existed may be material in determining how far it has generally prevailed, we can- not think that, if a usage is once shewn to be universal, it is the less entitled to prevail because it may not have formed part of the law merchant as previous- fy recognized and adopted by the Courts. It is obvious that such reasoning would have been fatal to the negotiability of foreign bonds, which are of comparatively modern ori;^'in, and yet, according to Gorgier v. Mieville, 3 B. & C. 45 (1824), are to be treated as negotiable. We think the judgment in Crouch v. The Credit Foncier, L. R. 8 Q. B. 374 (1873) may well be supported on the ground that I Iviii INTRODUCTION. in that case there was substantially no proof whatever of general usage. We cannot concur in thinking that if proof of general usage had been established, it would, have been a sufficient ground for refusing to give effect to it that it did not form part of what is called " the ancient law merchant." In addition to the cases we have already referred to, in which usage has been relied on as making mercantile instruments negotiable, the case of Lang v. Smyth, 7 Bing 284 (1831) was cited as shewing that the question with reference to instruments of this description turns upon how far the particular instrument has by usage acquired the quality of negotiability. The action has reference to Neapolitan bonds with coupons attached to them, which latter referred to a certiticate. Plaintiff's agent being in possession of the coupons belonging to the plaintiff, but not of the certificate fraudulently pledged the coupons with the defendant who took them bona fide. On an action by the plaintiff to recover tbe amount received by the defendant on the coupons, Tindal, C.J. left it to the jury to say whether the coupons without the certificate "passed from hand to band like moneys or bank notes," in other words, " whether they had acquired from the course of dealing pursued in the City, the character of bank notes, bills of exchange, dividend warrants, exchequer bills or other instruments which formed part of the currency of this country." Thejury, indeed, found in tbe negative, butitwas held by the Court of Common Pleas that the question had been rightly left to them. If the usage had been found tbe other way, and the Court had been satisfied with the ver- dict, it would no doubt have been upheld. We must by.no means be understood as saying that mercaotile usage, however extensive, should be allowed to prevail, if contrary to positive law, including in the latter i INTRODUCTION. lix such usages as, having been made the subject of legal decision, and having been sanctioned and adopted by the Courts, have become by such adoption part of the common law. To give effect to a usage which involves a defiance or disregard of the law would be obviously contrary to a fundamental principle. And we quite agree that this will apply quite as strongly to an attempt to set up a new usage a^'fiinst one which has become settled and adopted by the common law as to one in conflict with the more ancient rules of the common law itself. Thus, it having been decided in the two cases of More v. Manning, 1 Comyns' Hep. 311 (1719), and Acheson v. Fountain, 1 Str. 557 (1736), that when a bill of exchange was indorsed to A.B., without the words " or order," the bill was nevertheless assignable by A.B., by further indorsement, Lord Mans- field and the Court of King's Bench, in the case of Edie v. The illast India Company, 2 Burr. 1216 (1761), held that evidence of a contrary usage was inadmissible. In like manner, in Grant v. Vaughan, 3 Burr. 1516 (1764), where a cash note, payable to bearer, had been lost by the owner, but had been taiien by the plaintiff buua Jhle for value, on an action on the note by the latter against the maker, Lord ^lansfield having left it to the jury to say " whether such as this, when actually paid away in the course of trade dealing and business, were negotiable or in fact and prac- tice negotiable " ; and the jury, influenced no doubt by the natural desire to protect the owner of the note, having found for the defendant. Lord Mansfield and the Court here again set their verdict aside, on the ground that, the law having been settled by the former decisions that notes payable to bearer passed by delivery to a bona Jule holder, the judge ought to have directed a verdict for the plaintiff". If we could see our way to the conclusion that, in hold- ing the scrip in question, to pass by delivery, and to be available to bearer, we were giving effect to a usage incom- r Ix INTRODUCTION. patible either with the common law or with the law mer- chant as incorporated into and embodied in it, our declBion would be a very different one from that which we are about to pronounce. But so far from this being the case we are, on the contrary, in our opinion, only acting on an estab- lished principle of that law in giving legal effect to a usage, now become universal, to treat this form of security, being on the face of it expressly made transferable to bearer, as the representative of money, and as such, being made to bearer as assignable by delivery." The reader is also referred to the chapter on "Other Negotiable Instruments" to be found at page 454 of the present work as to the progress made in Canada by legislation and otherwise towards placing instruments other than bills, notes and cheques upon a similar footing. THE BILLS OF EXCHANGE ACT, 1890. CANADA. VICTOUIA, CHAPTf]R 17. AS AMENDED BY 54-55 VICTORIA, CHAPTER 17 (18;»1). An Act relating to Bills of Excliuiige, Cheques, and Promissory Notes. BY the British North America Act, section 92, sub-section Dominion ., 1-1 • ii'ii i-Tii letjislationi 18, the right to legislate respecting Bills of Exchange and Promissory Notes was assigned exclusively to the Do- minion Parliament. So sparingly, however, had this power been exercised during the first nineteen years of Confedera- tion, that when the Statutes were revised and consolidated in 1886, the whole of the Dominion legislation on the subject was comprised in ten short sections of Chapter 123. Tlie remaining twenty sections are made up of provincial enactments passed before Confederation, which were as a rule applicable only to a single province. Apart from the contents of that chapter, the only Canadian legislation jOM the subject in force in any part of the J)ominion was : (.1) two short chapters of the Civil Code of Quebec, (2) a 1 single section in the Revised Statutes of Nova Scotia, (3) two sections in the Statutes of New Brunswick, all of which, « • 2 BILLS OF EXCHANGE ACT, 1800. A code. Provincial Bubjecta. except two Articles of the Code relating to evidence, are repealed by the present Act ; and (4) such provisions in the criminal statutes and those relating to procedure in the provincial courts as refer to actions on bills and notes, which latter are not affected by the Act. A cheque being a bill of exchange drawn on a bank, pay- able demand, as defined by section 72 of the Act, falls under the authority of the Dominion Parliament, especially as the subject of banking is also within its exclusive jurisdiction. Previous legislation respecting cheques was still more meagre, being almost wholly confined to the short chapter on the subject in the Civil Code and the references to these instruments in the Criminal Statutes. The present Act is really a codification of the law, although this idea is not expressed in its title, as is the case in the English Act from which it is copied, the title adopted being the same as that of Chapter 123 of the Revised Statutes of Canada, with the addition of the single word " cheques." Although the Act treats directly only of Bills, Notes and Cheques, which °are clearly within the jurisdiction of the Dominion Parliament, it also touches and affects other matters which are within the exclusive jurisdiction of the local legislatures. Mention need only be made of such subjects as the capacity of persons, and of corporations, the law of contracts, of agency, of partnership, of surety- ship, of evidence, and the procedure in the provincial civil courts. There are also other matters indirectly affected which come chiefly under the head of " Property and Civil Rights " and " the Administration of Justice." The fact above mentioned, that there has hitherto been scarcely any Dominion legislation upon the subject has doubtless j been the reason why no conflict has as yet arisen between the Dominion and the Provinces. It is too much to expect FORMER LEGISLATION. 3 that some of the provisions of the new Act bearing upon the foregoing points, or others unmentioned, which may not agree with provincial law upon these subjects, will not be questioned in the courts in the near future. The Bill which subsequently became law in the form of mu of i8«9. the present Act, was first introduced by the Minister of Justice in the House of Commons in the session of 1889, in the following terms : " The object of this Bill is to render uniform in almost every particular the laws throughout the Dominion with respect to these contracts. The law under this Bill will be uniform in every particular, except as regards statutory holidays, in respect of which special provision is to be made as regards the province of Quebec. I may say that the Bill is principally the codification of the existing law relating to Bills, Cheques and Promissory Notes, and that the changes which are made in our law on these subjects are in the direction of making it uniform with the English Statute law." — Commons Debates, 1889, p. 14. As first submitted, it was almost au exact tran- script of the Imperial Bills of Exchange Act, 1882, 45 *lt 46 Vict. cap. 61, the full title of which is " An Act to codify the law relating to Bills of Exchange, Cheques and Promissory Notes." The changes proposed at that time were restricted almost entirely to substituting " Canada " for " the United Kingdom " wherever the latter words occurred in the Act, and the insertion of the numerous holidays of the different provinces for the com- paratively few holidays recognized in England. The Bill was partially considered by the House of Com- Biiiof isdj. monsinlSSO, and various suggestions and recommenda- itions were made during the session and the following recess by private individuals and commercial bodies. As a jresult, the Bill was re-introduced in 1890 with a number |of modifications. Still further changes were made in both t Iiiiiu«riiil Act. BILLS OF EXCHANGE ACT, 1800. Houses of Parliament, most of these being in the direction of retaining special provisions of the law formerly recognized in Canada or in some of the provinces, and substituting these in the Bill for certain clauses of the Imperial Act which were embodied in the first draft. In the following notes special attention will be called to those sections which differ from the former Canadian law as well as to those in which the Imperial \ct has not been followed. The Bills of Exchange Act, 1882, is of special interest as being the first instance of the codification, l)y the Imperial Parliament, of any portion of the Civil Law. The experi- ment has been an unqualified success, and no greater tribute could be paid to those who prepared the bill and successfully piloted it through both Houses, than the mere mention of the fact that although it has now been in force for nine years, not a single amendment has been found to be necessary. The amount of litigation which has arisen over it has been comparatively small, and it has been very favourably received by the English Judges some of whom were not disposed to look with much approval upon the idea of a code. The changes which were made in the Canadian Bill in its passage through Parliament tended, not only to lessen its similarity to the Imperial Act as above stated, but some of them also interfered with the uniformity of the law throughout the Dominion which was stated to be its chief object. Examples of the former are found in the legisla- tion regarding bills payable at sight, and as to the pay- ment by banks of demand drafts on them, when t' endorsement is forged ; and of the latter, in th- r^p provisions regarding the protest of inland bilb and the retention of the provincial tariffs I notan services. These and other changes of like nature will oe more specially noticed, when considering the partici sections affected. FORMER LEGISLATION. But probably the change which would have interfered N.'imifonn moat seriously with the uniformity of the law, and which would have brought about great diversity in the juris- prudence of the respective provinces was the omission from the Act of a clause that stood in the original bill as section !>7, and which was struck out in the Senate. — Senate Ihhdtoi, 1800, p. 407. It was a reproduction of section 97, sub-HGction 2, of the Imperial Act and read as follows : " The rules of the common law of England, including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to bills of exchange, promissory notes and cheques." All the Dominion Statutes in force at the passing of the Act, as well as all the subsisting provincial statutes on the subject passed prior to Confederation, with the unimportant exceptions above mentioned, having been repealed by section {)5, recourse would have been had in unprovided for cases in the several provinces, to the law as there orifj^inally introduced, in so far as it might be applicable, and where this failed, to the law in the respective provinces, which by analogy might serve as a rule in each particular case. The Act is no doubt a comparatively con.piete code of the law upon the subject, but a number of cases unprovided for will be pointed out in the course of the following notes, and experience will not fail to disclose many more. The absence of any uniform rule or standard for the decision of these cases: would no doubt have led to consider- '•1' liversity in the jurisprudence. In all the provinces pt (Quebec the English law was that which was originally jduced. It was introduced however at different dates that English Statutes which were thus in force in some I provinces were not in others. The French commercial law in force in (,?uebec it is true had much more in common with i ■ '3 6 BILLS OF EXCHANQE ACT, 1890. Cases un- der old law that of England, than had other branches of the civil law. Both were based on the law merchant, and upon the usages and customs of merchants, who were much more cosmopo- litan in their ideas than the legislators or judges who framed or settled the other laws of these countries. The course of provincial legislation also tended to similarity. The provi- sions of the successive English statutes on the subject were frequently re-enacted by the provinces, including Lower Canada. Notwithstanding these circumstances a glance at the jurisprudence as it is recorded in the provincial reports, and as it will be briefly noted in the following pages will show that there has been a wider divergence in the decisions of the courts in the different provinces than might have been expected from the similarity of the statute law. The desire to render the law throughout the Dominion as nearly uniform as possible which was one of the leading objects of the Act, no doubt influenced the Parliament to restore the clause which h." d been dropped from the Bill in 1890, and it was made retroactive 'u its effect so that even a temporary divergence in jurisprudence from th's cause will be avoided. In all cases not specially provided for by the Act, recourse will now be had in all the provinces to the common law of England and the law merchant, instead of to the law of France in Quebec or to that of England at varying dates in the other provinces, as would have been the case under tbe Act of 1890 : (54-55 V. c. 17, s. 8.) In the course of the following notes upon the various sections of thd Act, cases decided under the old laws will be cited which in whole or in part may L j no longer law, either in consequence of this Act or prior Dominion or Provincial legislation. These have been noted partly because they will be of assistance in tracing the course of jurisprudence ou the subject, and partly because for a few years at least tbe cases which will come before our Courts will be largely FORMER LBQISLITION. upon bills and notes made before the passing of the Aot, and consequently governed by the old laws. In order to facilitate a comparison of this jurisprudence with the course of legislation, the dates of the various deci- sions will be given. A concise summary of the more salient points in the history of the law in the different provinces is also iiore given which it is hoped will be found to be suffi- ciently fui) and exact for the purpose above stated. Quebec. — The French commercial law, introduced with French the Coutuine de Paris on the establishment of the Con- Keil Superieur in 1663, as modified by subsequent enact- ments and decisions, and which was the law merchant, and substantially the same as the commercial law of Eng- land of the same period, regulated the bills and notes of the colony, until the conquest in 1760. The French Commercial Ordinance of March, 1673, has been generally held not to have been in force in the province on account of its not having been registered at Quebec : Merritt v. Lynch, 3 L. C. J. 276 ; !) L , C. R. 353 (1859). The admir- able treatise of Pothier on the subject, Gontrat de Change, cannot consequently be accepted as an authority without question where the ordinance may have made a change in tlie older law. See the Seventh Report of the Commis- sioners on the Civil Code of Lower Canada, page 216. As to whether the law in force in Quebec between 1763 and 1774 was English or French, has been a matter of I controversy. By the Proclamation of Geo. 3 of the 7th of ()etober, 1763, the government of Quebec was constituted, embracing the present province of Quebec and the eastern [part of Ontario ; the people to have the " enjoyment of [the benefit of the laws of England," and the courts to decide " all causes, according to law and equity, and, as lear as may be, agreeable to the laws of England." The validity of this Proclamation as a legislative act has been '1^ 8 BILLS OF EXCHANGE ACT, 1890. Provincial leKixlatiou questioned, but it was affirmed by a unanimous judgment of the Court of King's Bench, delivered by Lord Monsfield : Campbell v. Hall, Cowper 204 (1774). It has also been recognized by the Privy Council : Lyons v. East India Co., 1 Moore 272 (1836); and by the House of Lords: Whicker v. Hume, 7 H. L. Ca. 150 (1858). See Anderson V. Todd, 2 U. C. Q. B. 84 (1845); Stuart v. Bowman, 2 L. C. 11. 369 (1851) ; in Appeal, 3 L. C. R. 309 (1853) ; 2 L. C. J. Appendix No. 2 ; Wilcox v. Wilcox, 2 L. C. J. 1 (1857); Atty. Gen. v. Stewart, 2 Merivale 143 (1817); Jephson v. Riera, 3 Knapp 152 (1835); Cameron v. Kyte, ibid. 346 (1835); Beaumont v. Barrett, 1 Moore P. C. 272 (1836). The majority of the Judges in these Lower Canada cases held that the English law was not intro- duced into the province during the period in question. As a matter of fact the courts during that period admin- istered the English law in commercial cases : W^ilcox v. Wilcox, at p. 11. By the Quebec Act of 1774, 14 Geo. 3, c. 83, (Imp.) the limits of the province were extended westward, the procla- mation of 1763 was revoked, and it was ordered that in all matters of controversy relative to property and civil rights, resort should be had to the laws of Canada- Thi'i restored the French commercial law with such modifica- tions as had been introduced into Canada. In 1777 an Ordinance was passed by the Governor and "Council of the province regulating the protesting of bills, and the damages, interest and fees thereon : 17 Geo. 3, c. 3. Another Ordinance passed in 1785, 25 Geo. 3, c. 2, provided by Art. 10 that " in proof of all facts concerning commercial matters, recourse shall be bad, in all the courts of civil jurisdiction in the province, to the rules of evidence laid down by the laws of England." In 1793 ti statute was passed to facilitate the negotiation of promis- sory notes : 34 Geo. 3, c. 2. FORMER LEGISLATION. tnent field : been India lOrds : lerson I, 2L. L853) ; . C. J. ,1817^ . Kyte, C. 27-2 Lower intro- lestion . admin - ilcox V. np.) the pvocla- that in ,nd civil Tlii'5 lOdifica- fDor and lof bills, Geo. 3, 3, c. 2, icerning all the rules of 1793 rt promis- In the Act of 1845), 12 Vict. c. 22, for the first time a general law on the subject was enacted, embodying pro- visions that up to that time had existed in custom alone. This statute, passed by the Parliament of United Canada, does not purport to be for Lower Canada alone, but it has been decided that it did not apply to Upper Canada : Hidout V. Manning. 7 U. C. Q. B. 35 (1850). It was em- bodied in the Cousolidated Statutes for Lower Canada as cha|)tor 04, and most of its provisions subsequently appeared in the Civil* Code. The Act itself was largely taken from the English law and usages, and by section 80, in all cases not provided for, recourse was to be had to tlio laws of England as they stood at the date of its passage, viz., May, 30th, 1849, a provision that was retained in the Civil Code as Art. 2340. The short Act of the following year, 13-14, Vict. c. 23, applied to both I pper and Lower Canada, and became chapter 57 of the Consolidated Staintes of Canada. It related chiefly to the protesting of bills and notes. ' The Civil Code, which came into force on the Ist August, civii uodo. 18()t), contained 70 articles (2279 to 2354) on the subject of bills, notes, and cheques. As a reference to these will be of great advantage in considering the Quebec decisions cited as illustrations of various sections of the present Act, they will be found in the appendix. The references under each article show how largely the codifiers drew from English sources, and this with articles 2340 and 2341 adopting Unglish law and the English rules of evidence has tended to assimilate the law of Quebec on this subject to that of .England and thereby to that of the other provinces. The Code, modified in a few particulars by Dominion legislation, Icontinued to be tlie law of Quebec until it was repealed by JBeetion 95 of the present Act, with the exception of the two irticles that relate to evidence, viz., 2341 and 2342 : See Second Scheilule. I. 10 BILLS OF EXCHANOE ACT, 1890. EnRiish Ontario.— What is now the province of Ontario formed a part of Quebec until 1791. It was subject to the same laws, viz., the French law as modified by Cana- dian ordinances up to 1760, then military rule to the peace of 1768, English law after the proclamation of October 1768, and French and Canadian law again after the 1st of May, 1775. The first Parliament of the new province of Upper Canada which met at Niagara on the 17th of September, 1792, by its first Act, 82 Geo. 8, c. 1, repealed that part of the Quebec Act relat. ing to the laws of Canada and provided that in all mat- ters of controversy relative to property and civil rights resort should be had to the laws of England as the rule for the decision of the same, that is, as they stood at that date. I^rovindai In 1811 the Quebec Ordinance of 1777 regulating pro- tests, above referred to, was repealed by 51 Geo. 3, c. 9. The principal Acts relating to bills and notes were the fol- lowing : — 2 Geo. 4, c. 12, declaring that the Imperial Acts 15 \- 17 Geo. 3, respecting small notes should not apply to Upper Canada ; 5 Wm. 4, c. 1, facilitating actions on bills and notes ; 7 Wm. 4, c. 5, requiring acceptances, to be in vviiting, and making an acceptance at a particular place general, unless the words " only and not otherwise or else- where" were added; 12 Yict. c. 76, regulating protests and damages ; 14-15 Vict. c. 94, as to days of grace and holidays ; and 19 Yict. c. 48, as to actions on lost bills and notes. These with some others were embodied in the Con- solidated Statutes of Upper Canada of 1859, c. 42 ; and those sections which had not been previously altered by Dominion legislation formed sections 15 to 25 of chapter 123 of the Revised Statutes of Canada, 1886, but they continued to be applicable to Ontario lone. EnRlisli Uw. Nova Scotia. -This province is considered to have become a British colony by discovery and settlement; FORMER LEGISLATION. u and the date of its settlement is generally given as immediately following its discovery by Cabot in 1497 : 1 Burge's Colonial Law, p. xxxiv ; Forsyth's Constitu- tional Law, p. 26. The first actual settlement was under the grant to Sir William Alexander in 1621. It subsequently passed into the hands of the French who abandoned their claim by the treaty of Utrecht in 1713. Even after this there was a conflict of possession, but it was finally confirmed to England by the treaty of Paris in 1763. A country re-conquered from an enemy reverts to the same state that it was in before the conquest : Gumbe's case, 3 Knapp, 869 (1834). Having become a colony by settlement, the laws originally in force in Nova Scotia would be the common law of England with the statutes passed before its settlement, in so far as they were applicable to the condition of the people : Uniacke v. Dickson, 2 N. S. (James) at p. 300 (1848). The time usually fixed upon in such cases, as the date when ordinary Imperial legislation ceases to apply, is when the new colony first has a law-making body of its own. With respect to Nova Scotia, this date has not been authoritatively deter- niiut'd, some placing it as early as 1622, when Sir William Alexander made the first settlement, others placing it at various later dates. From 1713 to 1758, the government consisted of a j0 : section 97. It is not retrospective, and that part of it which is new hiw will not apply to instruments issued before its commencement, except in the case of transac- tions and matters connected with them after that lime ; as for instance, the acceptance of such a bill after the first of September, or the protesting of a bill or note issued before, but only dishonored after that date : Maxwell on the Interpretation of Statutes, '257, '271; Leeds and County Hunk V. Walker, 11 Q. B. D. at p. S>1 (1883). The Imperial Bills of Exchange Act, 1H82, 45 \- Hi Vict. c. Gl, from which the ('aniulian Act is almost wholly copied, ha3 been held to be largely declaratory of the prior Kn^^lish law. The Master of the liolla speaks of it as " the codifying Act which decliires what was and is the law" : Vagliano v. Bank of Kngland, 23 Q. !>. D. at p. 248 (188!») ; and Stirling, J. says that it " may be accepted as declaratory of the prior law": re Bethell, 34 Ch. 1>. at |>. 507 (1887). See also to the same elTect the remarks of Lord lilackburn in McLean v. Clydesdale Batiking Co., J) A pp. Cas., nt p. lOG (1883). As. the law in the various provinces of Canada has heretofore varied considerably, as shewn in the foregoing 22 §1. BILLS OF EXCHANGE ACT, 1890. pages, and as the present Act has in a number of ' instances changed the law to make it harmonize with that of England, it cannot be so generally accepted as declnr- atory of the old law in Canada. Nevertheless, there will probably be a disposition on th*- part of the courts to consider it as declaratory, where it is not clear that the law has been actually changed. intori.reta- 2. Ill tlils Act, uiiless tlie coutext otherwise requires, — aifce*!"'"" (") ^^^ expression " Acceptunee " means an acceptance completed by delivery or notification ; This and the following clauses are copied from section 2 of the Imperial Act with the changes noted below. The words defined occur a number of times, and are used in a technical, and not in their ordinary or popular sense, hence the necessity for definitions or an interpretation clause. " Acceptance " in connection with a bill was formerly used to indicate the act by which the drawee made himself responsible for the payment of a bill — whether by writing on the bill itself, or by collateral writing, or by parol : Lumley v. Palmer, Str. 1000 (1735) ; Clarke v. Cock, 1 East, 57 (1803) ; Lagueux v. Everett, 1 Rev. de Leg. 510 (1817) ; Jones v. Goudie, 2 Rev. de Leg. 834 (1820). Since the two latter methods have been done away vith by legislation, the word has been generally used to designate simply the writing on the bill. In the Act, however, when used without qualification, it is applied only to the cases where the writing and the liability there- under have become complete and irrevocable by being followed either by delivery of the bill or by notification that it has been accepted : Cox. v. Troy, 5 B. »fe A. 474 PRELIMINARY. (1822). " Acceptance " in commercial language ia also sometimes used to designate a bill that has been accepted, but it is not used in this sense in the Act. " Delivery " here is also used in the technical sense defined in clause (/) of the present section. " Notification " is not defined in the Act, but is described in section 21, and may be either written or verbal. The definition and requis tes of a valid acceptance are given in section 17. m §2. (h) The expression " Action " includes counter '^'^tion.- claim find set-off ; The word " action " is not often used in the Act. It is found in sections 21, 30, 52, 60, 8(5 and 1)3. The procedure in the provincial courts, in which actions on bills ai.. mo', "i are brought, is within the exclusive jurisdiction 0. L .cal legislatures: B. N.A. Act, s. 92, s-s. 14, The Dominion Parliament has however the right to interfere with this procedure in so far as may be necessary to deal fully with the subject of bills and notes : See Oushing v. Dupuy, 5 App. Cas. at p. 415 (1880). Most of the provinces have special provisions in their statutes and rules regulating the procedure of their courts, as to actions on bills and notes. These have not been repealed by the present Act, and extracts from them will be found in the appendix. Mr. Pitt Lewis in his work on County Court Practice, quoted with approval by Cockburn, C. J. in Stooke v. Taylor, 5 Q. B. 1). 577 (1880^, says: "A set-off would sttoir. seem to be of a differ^-nt nature from a defence ( ? counter claim) inasmuch as a set-off appears to shew a debi lialancing the debt claimed by the plaintiff, and thus k living nothing due to him ; while a counter claim, it 24 BILLS OF EZCHANOB ACT, 1890. § 2. >^ould seem, consists of a cross claim, not necessarily ~~~ cxtinguisbin<7 or destroying the plaintifiTs demand. In other words, a set-off appears to consist of a defence to the original claim of the plaintiff, a counter claim is the assertion of a separate and independent demand, which does not answer or destroy the original claim of the plain- tiff. The right to rely on a set-off has long existed. The right to set up a counter claim was first given by the Judicature Acts." See also Gathercole v. Smith, 7 Q. B. D. 626 (1881) ; Pellas v. Neptune Marine Ass. Co., 5 C. P. D. 84 (18V9). co.mter- Under the Imperial and Ontario Judicature Acts there have been conflicting decisions as to whether a counter claim was to be considered as a defence or as an action : see Vavasseur v. Krupp, 15 Ch. D. 474 (1877) ; Beddall v. Maitland, 17 Ch. D. 174 (1879) ; Irwin v. Brjwn, 12 Ont. P. B. 630 (1888). In Ontario, provision is made in Consolidated Bule 873, under the Judicature Act which reads as follows ; " A defendant in an action may set up by way of counter claim, against the claim of the plaintiff, any right or claim whether the same pound in damages or not. {a) A counter claim shall have the same effect as a statement of claim in a cross action, so as to enable the court to pronounce a final judgment in the same action, buih on the original, and on the cross claim." Set off corresponds approximately to compensation under the civil law. The Quebec Civil Code, Art. 1188 says : " Compensation takes place by the sole operation of law between debts which are equally liquidated and demandable and have each for object a sum of money or a certain quantity of indeterminate tlimgt of the same kind and quality. So soon as the debts exit.t simultaneously PRELIMINARY. 25 they are mutually extinguished in so far as their respective § 2. amounts correspond." Counter claim is analop;ou8 to an incidental demand by incidontai doniaud. a defendant in Quebec. The Code of Civil Procedure, Art. 151, says : " The defendant may set up by incidental demand any claim of his arising out of the same causes as the principal demand, and which he cannot plead by exception. When the principal demand is for the payment of a sum of money, the defendant may also make an incidental demand upon any claim for money arising out of other causes; but such an incidental demand is distinct from and cannot retard the principal action. The court, when- ever it renders judgment upon both demands at the same time, may order compensation, if the case admits of it." ((;) The expression " Bank " means an incor- '"*"•*• " porated bank or savings bank carrying on business in Canada ; The corresponding word in the Imperial Act is " Banker," which " includes a body of persons whether incorporated or not who carry on the business of banking." There the business is carried on largely by individuals or unincorporated bodies. The Bill as introduced into the Canadian Parliament used the term " Banker " and also adopted the Ejiglish definition. As the business is carried on in Canada chiefly by incorporated banks operating under the }trovi8ions of the Bank Act, 63 Viet. c. 81, and savings I'anks operating under 53 Vict. c. 32, both of which came into force on the 1st of July, 1801, it was determined to restrict to these corporations the provisions relating to banking. Tliey will be found in Part III of the Act, sections 72 to 81 inclusive. As our Parliament refused to adopt the principle laid down in section 00 of the Imperial 96 BILLS OF EXCHANGE ACT, 1890- ^ 2. Act which protects a banker who has paid a demand bill or a cheque on a forged indorsement, the omission of private banks from the definition and their exchision from the provisions and privileges of the Act is not of so much consequence. Formerly private bankers might use the words "bank," "banking company," "banking house," "banking association," or "banking institution," provided the words " not incorporated " were added. Now, however, any private person or body using any of these terms is guilty of a misdemeanor and liable to a fine not exceeding $1000, or to imprisonment for a term not exceeding 5 years, or to both : 53 Vict. c. 31, ss. 100, 101. noaror." (J) Tho expi'essioii "Bearer" means the person in possession of a bill or note which is payable to bearer ; A bill is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank : section 8, s-s. 3. Where a person acquires a bill for value from the holder to whose order it is payable without its being endorsed, he does not thereby become the " bearer " or entitled to the rights of a bearer under the Act ; he merely acquires the rights of a transferee <>f a chose in action, and the right to have the i' iorsenient of Uie transferror : section 31, 8-8. 4. On obtaining such nulorseraent he would become the " bearer " of the bill. The bearer need no* be the owner of a bill. •• Hill," " Xoto," (e) The expression " Bill " means bill of ex- change, and " Note " means promissory note ; A bill of exchange is defined in section 3, and a promis- sory note in section 82. The latter does not include bank PRELIMINARY. 27 f notes. A cheque is defined in section 72 as a bill of exchange drawn on a bank, payable on demand. ^Vhere the word " Bill " is used in the Act, it includes a cheque, unless in case of some conflicting provision in Part III. It also includes a promissory note, unless found in some portion of the Act within the exceptions mentioned in section 88. 2. ivury. (/) The expression "Delivery" means transfer"''^' of possession, actual or constructive, troni one person to another ; A person has constructive possession of a bill when it is in the actual possession of his servant or agent on his behalf. Delivery does not always imply an actual transfer from one possessor to another. A person who hohls a bill for another may become the owner of it himself ; a person who holds a bill for himself may become the holder of it for another ; a person wlio holds a bill for one party j may become the holder of it for another. In each of these i cases there is " delivery " without any actual change of I possession, and a sufficient delivery to comply with the ', requirements of section 21, and make the contract of the I drawer, acceptor or indorser, as the case may be, complete * and irrevocable. Whero bankers indorsed a note to a customer, and put it in an envelope with his papers, at the same time '"aking appropriate entries of the transaction in their books, it was held to be a sufficient delivery to him, and that a subsequent assignment of the bankers could not defeat it : Williams v. Gait, 1)5 111. 172 U880). For a definition of the word " person " see the Interpreta- tion Act, R. S. C. c. 1, 8. 7 (22). (fj) The expression " Holder" means the paye'e nower. or indorsee of a bill or note who is in possession of it, or the bearer thereof; I BILLS OF EXCHANGE ACT, 1890. ^ 2. 1^i>6 holder may or may not be the legal owner. It is sufficient for him to be in poesession and entitled, at law, to recover or receive its contents from another : Daniel § 28. If the payee or indorsee of a bill or note indorse it in blank and send it to another person for discount, collection, or some other special' purpose, the latter, while in possession, would be the " holder " of the bill or note: Allison v. Central Bank, 9 N. B. (4 Allen) 270 (1859). The rights and powers of the holder of a bill are given in section 88. The word holder is used in different senses. It may mean a " holder in due course " as deilned in section 29 ; and every holder of a bill or note is prima facie deemed to be a holder in due course: section 80, s-s. 2. This latter expression is used in the Act instead of the old phrase " bona fide holder for value without notice." The term " holder for value " is defined in section 27, s-s. 2. The word holder also includes one whose possession is unlawful, but who can give a valid discharge to a person who pays the bill in good faith, or who can give a good title to a purchaser before maturity in good faith and for value, such as the tinder of a bill payable to bearer or indorsed in blank : section 88 ; Murray v. Lardner, 2 Wall., 110 (1864). A person who is in possession of a bill or note other- wise than as above stated is not a " holder " of it. Thus the possessor under a forged indorsement even for value and in good faith acquires no rights and is not entitled to the designation : section 24 ; Smith v. Union Bank, L. 1{. 10 Q. B. per Blackburn, J. at p. 296 (1875) ; Colson v. Arnot, 57 N. Y., 253 (1874). PRELIMINARY. 29 Every " bearer " of a bill within the meaning of the § 2. definition in clause {d) of this section, is the holder of it : Howard v. Godard, 9 N. B. (4 Allen) 452 (18G0). (//) The expression "Indorsement" means an ',',,'Jj;',",T*"* indorsement completed by delivery ; Indorsement, as its derivation and meaning would indicate, is generally made by writing the name of the transferrer on the back of the bill ; but it may be written on any other portion of it. " It is quite immaterial whether the indorsement be written on the back of the instrument or on the face," as said by Lord Campbell in Young v. Glover, 3 Jur. X. 8. 637 (1857). See also Partridj,'e v. Davis, 20 Vt. 4!n) (1848) ; Herring v. Wood, hull, 21) 111. 92 (1862) ; Haines v. Dubois, 30 N. J., 259 (1863); Arnot v. Symonds, 85 Penn. St., 99 (1877). In certain cases it may bo written on an allonye or on a copy of the bill : section 32 {»'«"<•" (/,) The expression " Defence " includes counter- claim. The word " defence " is used in sections 30, s-s. 5 and 38 (/>). For a definition of counter-claim see note to clause (/>) of this section. " Defence " would also include in Quebec an incidental demand by a defendant: C. C. P. Art. 151. The foregoing definitions are taken from the correspon- ding section of the Imperial Act, almost without change. " Banker " in the Imperial Act has been replaced by "Bank" in the Canadian, for the reasons above mentioned. "Bankrupt" is not used in the Canadian Act as we have no general bankrupt or insolvent law in force in the Dominion. " Person " " written " and " writing," which are all used in a peculiar sense, are defined in the Imperial Act, but not in the Canadian, as they are defined in the general Interpretation Act, R. S. C. c. 1, s. 7, as follows : — " (22) The expression " person " includes any body corporate and politic, or party, and the heirs, executors, I'RELIMINARY. 31 administrators or other legal representatives of such § 2. person, to whom the context can apply according to the law of that part of Canada to which such context extends." " ('2B) The expression " writing," " written," or any term of like import, includes words printed, painted, engraved, lithographed, or otherwise traced or copied." The only one of the foregoing definitions not in the Imperial Act is that of "defence." This section is another illustration of the fact that the original portion^! of the Canadian Act were not prepared or arranged with the eame care as must have characterized the preparation of the Imperial Act. In the latter the words defined are all arranged alphahetically. Those copied from it in the Canadian Act follow the same order ; hut the word "defence" which has been added, instead of being inserted in its proper alphabetical place comes after " value." Another change which is scarcely an improvement, is the insertion of the words " The expression " at the com- mencement of each definition, while in the Imperial Act each clause begins with the word to be defined. If any prefix was thought necessary, it would have been more appropriate to have used " the word " rather than " the expression," as in each instance it is a single word that is defined. hi ral IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I 1.25 • 50 lis M IIIIIM 2.5 12.0 1.8 1.6 VQ <^ /a ^> Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 fA PART II. BILLS OF EXCHANGE. The Act as its title indicates, relates to Bills of Exchange, Cheques and Promissory Notes. The rules and principles relating to the former are set out in Part II, which embraces sections 3 to 71 inclusive. Section 72 defines a cheque as a bill of exchange drawn on a bank payable on demand, and enacts that the provisions of the Act applicable to a bill of exchange payable on demand shall apply to a cheque, except as otherwise provided in Part III. By section 88 the provisions of the Act relating to bills of exchange apply to promissory notes with the necessary modifications, and subject to the exceptions of that section and the provisions of Part IV. In the notes and illustrations appended to the various sections of Part II of the Act, where a clause or provision is equally applicable to a promissory note or cheque as well as to a bill, authorities and cases bearing upon the principle will be cited, although they may have been laid down or decided with reference to notes or cheques. FORM AND INTERPRETATION. 88 \ Form and Interpretation. § 3. 3. A bill of exchange is an unconditional order ^^1^',°'^^/;. in writing, addressed by one person to another/"^'*" signed by the person giving it, requiring the per- son to whom it is addressed to pay, on demand or at a fixed or determinable future tune, a sum certain in money to or to the order of a specified person, or to bearer : Imp. Act, s. 3 (1). The foregoing clause is copied from the Imperial Act without change. Probably no definition of a bill of exchange has yet been given which is not open to criticism. The phraseology of this section is not the most felicitous, as the next clause almost discredits the definition in two respects. First, a bill of exchange must be "unconditional," yet the next sentence speaks of the "conditions," of which there appear to be no less than six. Again, the introduc- tion of the words " except as hereinafter provided " is an intimation that certain instruments which do not meet the requirements of the definition are nevertheless bills of exchange. This definition also includes a cheque and is declara- tory of the former law : McLean v. Clydesdale Banking Co., 9 App. Cas. per Lord Blackburn at p. 106 (1883). The Civil Code of Lower Canada says : " Article 2279. A bill of exchange is a written order by one person to another for the payment of money absolutely and at all events. Article 2280. — It is essential to a bill of exchange : That it be in writing and contain the signature or name of the drawer ; That it be for the payment of a specific sum of money only ; That it be payable at all events without any condition." m'c.b.e.a. — 3 34 BILLS OF EXCHANGE 3. The definition in the Code is taken from Kent's Com- - mentaries, vol. 3, p. 74. Kent copied it from Bayley on Bills, p. 1, and speaks of it as " a concise, clear and accurate production." Blackstone says a bill of exchange is " an open letter of request from one man to another desiring him to pay a sum of money therein named to a third person on his account " : 2 Comm. 466. Chitty follows Blackstone. For a very full list of the different definitions given by various authors, see 1 Randolph, § 3, note. In France the law governing bills of exchange differs in some important particulars from that of England or the United States, as may be seen from the following definition taken from the Code de Commerce, Art. 110: — "A bill of exchange is drawn from one place on another. It is dated. It sets forth, the sum to be paid ; the name of the person who is to pay ; the time and place of payment ; the value given in money, goods, account or otherwise. It is pay- able to the order of a third party, or of the drawer himself. It must state whether it be the first, second, third, or fourth, etc., of the same tenor and contents." A bill of exchange is sometimes called a draft, and after it has been accepted, sometimes an acceptance. It may be in any language, and in any form of words that complies with the requirements of the foregoing definition or the provisions of the Act. Where an instrument is so ambiguous as to make it doubtful whether it is a bill of exchange or a promissory note, the holder may, as against the maker, treat it as either : Edis v. Bury, 6 B. & C. 483 (1827) ; Forbes v. Marshall, 11 Ex. 166 (1855) ; Fielder v. Marshall, 9 C. B., N. S. 606 (1861). "An Unconditional Order."— A bill of exchange is an order, and is in its nature the demand of a right, not the Ilec FORM AND INTERPRETATION. 35 mere asking of a favor, and therefore a supplication made, or authority given to pay an amount is not a bill : Daniel, § 35. The person addressed is *' required " to pay the sum named. The insertion of mere terms of courtesy, however, will not destroy its validity. It seems impossible to reconcile the conflicting decisions on this point. The same may be said to be true as to what orders have been held to be ** unconditional." As to an instrument payable on a contingency, see section 11 and the notes and illustra- tions thereunder. A promissory note is an unconditional promise to pay : section 82. For illustrations of irregular instrumen's in this respect see notes under that section. !^ 3. It ILLUSTRATIONS. The following have been held to be valid bills : — 1. " Mr. Warren please let the bearer William Tuke, have the amount of £10, and you will oblige me, B. B. Mitchell": Reg. V. Tuke, 17 U. C. Q. B. 296 (185H). 2. " Mr. Nelson will much oblige Mr. Webb by paying J. Ruff, or order, on his account, twenty guineas": Ruff v. Webb, 1 Esp. 129 (1794). 8. " To the Cashier,— Credit P. & Co., or order, with £500, claimed, per Cleopatra, in cash, on account of this corporation, A. C, Managing Director " : Ellison v. Collingridge, 9 C. B. 570 (1850) ; Allen v. The Sea Fire and Life Assurance Co., 9 C. B. 574 (1850). 4. An order written under a note " Please pay the above note, and hold it against me in our settlement": Leonard v. Mason, 1 Wend. 522 (1828). 5. Also a like order written under au account : Hoyt v. Lynch, 2 Sandf. 328 (1847). G. " Please let the bearer have $50. I will arrange it with you this forenoon. Yours truly": Bresenthal v. Williams, 1 Duval, 829 (1864). ^■1 36 BILLS OF EXCHANGE §3. The following have been held not to be valid bills : — 1. An open letter from one Government officer to another desiring the latter to pay plaintiff a certain sum of money due him by the department : McLean v. Ross, 3 Rev. de Leg. 484 (1816). 2. " Please to send £10 by bearer, as I am so ill I cannot waits upon you ": Rex v. Ellor, 1 Leach 823 (1784). 3. "Mr. L., please to let the bearer have £7, and place it to my account, and you will much oblige your humble servant S.": Little v. Slackford, 1 M. & M. 371 (1H28). 4. A note written by the creditor to his debtor at the foot of the creditor's account requesting the debtor to pay the account to the creditor's agent : Norris v. Soloman, 2 M. & Rob. 200 (1840). 5. " To E. & S. — We hereby authorize you to pay on our account to the order of G. £6,000, W, & S." : Hamilton v. Spottiswoode, 4 Ex. 200 (1849). " In Writing."— Writing, as defined in the Interpreta- tion Act, E. S. C. c. 1, s. 7 (23), " includes words printed, painted, engraved, lithographed^ or otherwise traced or copied." It is not material whether the writing be in pencil or ink, though as a matter of permanence and security ink is of course preferable . A writing in pencil is within the meaning of that term at common law, and within the custom of merchants : Geary v. Physic, 5 B. & C. per Bayley, J. at p. 238 (1826). See also Jeffery V. Walton, 1 Stark. 267 (1816) ; Rymes v. Clarkson, 1 Phil. 22 (1809) ; Dickenson v. Dickenson, 2 Phil. 173 (1814). Cannot bo It is a general rule of law that contracts in writing parol. cannot be varied by extrinsic evidence of the intention of the parties : Burges v. Wickham, 3 B. & S. 669 (1863) ; Taylor § 1132; or as it is put in the Civil Code, Art. 1234, FORM AND INTERPRETATION. 37 " Testimony cannot in any case be received to contradict ^ 3. or vary the terms of a valid written instrument." Accord- -. ing to this rule the contracts of the parties to bills of \ exchange and promissory notes as appearing upon the * face of the instrument whether of drawer, acceptor, maker or indorser, cannot be varied by parol evidence : Hart V. Davy, 1 U. C. Q. B. 218 (1844) ; Ewart v. Weller, 5 U. C. B. 610 (1849) : Adams v. Thomas, 7 U. C. Q. B. 249 (1850) ; Davis v. McSherry, 7 U. C. Q. B. 490 (1850) ; Hall V. Francis, 4 U. C. C. P. 210 (1854) ; Hammond v. Small, 16 U. C. Q. B. 371 (1858) ; Armour v. Gates, 8 U. C. C. P. 548 (1859) ; Street v. Beckwith, 20 U. C. Q. B. 9 (1860) : Moore v. Sullivan, 21 U. C. Q. B. 445 (1862) ; Chamberlain v. Ball, 5 L. C. J. 88 (1860) ; Scott v. Quebec Bank, 7 L. N. 343 (1884) ; Decelles v. Samoisette, M. L. R. 4 S. C. 361 (1888) ; Inglis v. Allen, 1 N. S. D. 101 (1867) ; Graham v. Graham, 11 N. S. (2 R. c^- C.) 265 (1877) ; Taylor v. McFarlane, 12 N. S. (3 R. & C.) 190 (1878). Thus in an action brought upon a bill or note, it is not iii"stra- admissible to prove that at the time of making it was agreed verbally that the bill or note should be renewed '6r not paid at maturity : Bradbury v. Oliver, 5 U. C. 0. S. 703 (1839); Durand v. Stevenson, 5 U. C. Q. B. 336 (1849); Hayes v. Davis, 6 U. C. Q. B. 396 (1850) ; McQueen v. McQueen, 9 U. C. Q. B. 536 (1852); Bank of Upper Can- ada V. Jones, 1 Pr. R. 185 (1854) ; Harper v. Paterson, 14 U. C. C. P. 538 (1864) : Yidal v. Ford, 19 U. C. Q. B. 88 (1859) ; Porteous v. Muir, 8 0. R. 127 (1885) ; Imperial Bank v. Brydon, 2 Man. L. R. 117 (1885); Young v. Austen, L. R. 4 C. P. 553 (1869) ; or, that the instrument expressed to be payable at a certain time should be payable t^ only in a given event ; Harvey v. Geary, 1 U. C. Q. B. 483 (1845) ; Reed v. Reed, 11 U. C. Q. B. 26 (1853) ; Royal Canadian Bank v. Minaker, 19 U. C. C. P. 219 (1869) ; 88 BILLS OF EXCHANGE V}' ^ 3 Stultzraan v. Yeagley, 32 U. C. Q. B. G80 (1872) ; Foster — ' — — V. Jolly, 1 C. M. & R. 703 (1835) ; or, that it should bo payable by instalments or in any other manner than expressed in the instrument : Besant v. Cross, 10 C. B. 895 (1851) : or, that a note payable on demand should not be payable until the death of the maker : Wood- bridge V. Spooner, 3 B. & A. 233 (1819) ; or, that it should be only to secure the payment of interest during the life of the payee : Hill v. Wilson, L. R. 8 Ch. App. 888 (1873) ; or, that an indorser at the time of indorsing had agreed to waive his right to have notice of dishonour : Free v. Hawkins, 8 Taunt. 92 (1817) ; Leake on Contracts, p. 179. Kxceptiona But parol cvidonce is admissible to shew that the date of the bill or note is not the true date : section 13 ; or, that the delivery is incomplete or conditional only so that the contract is not operative : section 21, s-s. 3 ; or, to impeach the consideration for the contract : Abrey v. Crux, L. R. 5 C. P. 37 (1869) ; Dowuie v. Francis, 30 L. C. J. 22 (1885) : Fisher v. Archibald, 2 N. S. D. 298 (1871) ; Black v. Gesner, 3 N. S. (2 Thorn.) 157 (1817) ; Gray v. Whitman, ibid. (1857); Lindsay v. Zwicker, 2 N. S. D. 100 (1870) ; or to she\v that the contract has been discharged by payment, release or otherwise : Garden v. Finley, 8 L. C. J. 139 (1800) ; Phillips v. Sanborn, 6 L. C. J. 252 (1862); Gole v. Cockburn, 8 L. C. J. 311 (1864); Lalonde v. Rolland, 10 L. C. J. 321 (1864) ; Converse v. Brown, 10 L. C. J. 196 (1865). A contemporaneous agreement in writing referring to a bill or note between the same parties may be binding : Jenkins v. Bossom, 13 N. S. (1 R. & G.) 540 (1880) ; Young v. Austen, supra ; Brown v. Langley, 4 M. & Gr. 466 (1842) ; Salmon v. Webb, 3 H. L. Ca. 510 (1852); Lindley v. Lacy, 34 L. J. C. P. 7 (1864) ; Maillard v. Page, L. R. 5 Ex. 312 (1870) ; but the mere fact that a bill or note refers to a collateral FOKM AND INTKRPRETATION. 3i> writing or agreement which is conditional in its terms will !:; 3, not aifect the bill in the hands of a holder without notice of its contents: Jury v. Barker, E. B. & E. 450 (1858) ; Taylor v. Curry, 109 Mass. 30 (1871). "Addressed by One Person to Another." — "Person" here includes any body corporate and politic, party, and the representatives of such person, or any number of persons : R. S. C. c. 1, s. 7 (21) and (22). The person addressing the bill is called the drawer, and the one addressed, the drawee. After acceptance of the bill the latter is called the acceptor. This part of the definition is not strictly complied with when the drawer and drawee are the same person, or when the drawee is a fictitious person : section 5, s-s. 2. The holder may treat such an instrument as a bill or a note at his option. An instru- ment regular in form, except that it is not addressed to any drawee is not a bill of exchange : Forward v. Thomp- son, 12 U. C. Q. B. 103 (1854). The drawee need not be named ; it is sufficient that he be described with reason- able certainty, so that the bill can be duly presented to the proper person : section 6. " Signed." — The instrument is not a bill of exchange until signed by the drawer. He may sign a blank paper which may be subsequently filled up : section 20 ; or it may be accepted first and signed by the drawer after- wards : section 18. Even if accepted it is not a bill if it lack the drawer's signature : McCall v. Taylor, 19 C. B. N. S. 301 (1865) ; but if still in his hands it may be a security for the payment of money within section 75 of the Imperial Larceny Act, 1861, which corresponds to section 60 of the Canadian Larceny Act, R. S. C. c. 164 : Reg. v. Bowerman, L. R. (1891) 1 Q. B. 112. It may be signed in pencil : Geary v. Physic, 5 B. & C. 234 (1826) ; Brown v. Butchers' Bank, 6 Hill 443 (1844) ; 40 BILLS OF EXCHANGE is 3. u f. Closson V. Stearns, 4 Vt. 11 (1831) ; Reed v. Roark, 14 Tex. 329 (1855); or with a cross or mark: Noad v. Chateauvert, 1 Rev. de Leg. 229 (1846) ; Patterson v. Pain, 1 L. C. R. 219 (1851) ; Thurber v. Deseve, M. C. R. 125 (1864) ; Anderson v. Park, 6 L. C. R. 479 (1855) ; Collins V. Bradshaw, 10 L. C. R. 366 (1800) ; Coupal v. Coupal, 5 R. L. 465 (1873) ; Hubert v. Moreau, 12 Moore, 219 (1827) ; Baker v. Dening, 8 A. & E. 94 (1838) ; re Bryce, 2 Curtis, 325 (1839); re Field, 3 Curtis, 752 (1843); re Amiss, 2 Robertson, 116 (1849); Willoughby v. Moulton, 47 N. H. 205 (1866) ; Shank v. Butsch, 28 Ind. 19 (1867). Contra, Lagueux v. Caeault, 2 Rev. de Leg. 28 (1813), and Jones V. Hart, ibid. 29 (1819), overruled. In written contracts of various kinds it has been held or intimated that the following were sufficient, where it was clear that the parties intended to adopt them as their signatures : — initials, a trade or assumed name, a stamp, or a printed or engraved signature. See Saunderson v. Jackson, 2 B. & P. 238 (1800) ; Phillimore v. Barry, 1 Camp. 513 (1808) ; Schneider v. Norris, 2 M. & S. 286 (1814) ; Hyde v. Johnson, 2 Bing. N. C. 780 (1836) ; Jacob V. Kirk, 2 M. & Rob. 221 (1839) ; re Christian, 2 Robert- son, 110 (1849) ; re Hinds, 16 Jur. 1161 (1852) ; Caton v. Caton, L. R. 2 H. L. 143 (1867) ; Bennett v. Brumfitt, L. R. 3 C. P. 28 (1867) ; ex parte Birmingham Banking Co., L. R. 3 Ch. App. 653 (1868) ; Merchants' Bank v. Spicer, 6 Wend. 443 (1831) ; Weston v. Myers, 33 111. 424 (1864) ; 1 Randolph |^63, 64 ; 1 Daniel, § 74. The signature of d, party need not be written with his own hand ; it is suffi6i6nt if it be by some other person by or under his authority : sections 25 and 90. As to notarial promissbry notes en brevet in Quebec, where the maker neither signs nor makes his mark, see note to section 82. - ^^ or FORM AND INTERPRETATION. 41 24 UllS In the case of a corporation, the seal alone would be sufficient ; but a seal is not necessary or even usual : section - 90, 8-8. 2. Bills of a company incorporated under the general Act or by letters patent may be drawn by any agent, officer, or servant in general accordance with his powers under the by-laws : li. S. C. c. 118, s. 35 ; c. 119, s. 76. The drawer usually signs at the foot of the bill, but his signature ma^/ be in th' body of it or on any part so long as he signs as tlrawer : Byles p. 97. " On demand, or at a fixed or determinable future time." — Every bill of exchange falls under one or other of the above classes. The words are used in a special or technical sense and are explained respectively in sections 10 and 11. See these sections and the notes and illustra- tions under them. Bills are usually made payable " on demand " or " at sight," or a certain time " after date " or " after sight." "A sum certain in money."— A sum is certain within the meaning of the Act although payable with interest, or by stated instalments, or according to a certain rate of exchange : section 9. It must be for money alone ; but it may be in the money of any country : Chitty on Bills, 153. A promissory note must also be for a sum certain in money : section 82. Money is not defined in the Act, and is used in its ordinary sense. " ^Vhat is money ? It is not necessarily either gold, silver or paper. It is just what the people of the country, where the instrument is made, choose to treat as money, in other words, as currency. If the note be for the pay- ment of what is deemed money, it is wholly immaterial in the money of what country the note is payable " : Third National Bank v. Cosby, 41 U. C. Q. B. per Harrison, C.J. t 42 DILLS OF EXCHANOB § 3. S't P* "^OS (1877). Money in Canada would be specie or Dominion notes : see R. S. C. c. 30, an Act respecting the currency ; and c. 81, an Act respecting Dominion Notes. In the United States words of description prefaced to the word " money " have been held not to vitiate the instrument containing them, nor the addition of the words " gold " or " specie." Under the judgment of the Supremo Court of the United States in the Legal Tender cases, it makes no difference if a note be made payable in any par- ticular kind of money, as gold or silver, any money obliga- tion can be discharged by legal tender notes: Legal Tender cases, 12 Wall. 457 (1870). This doctrine was re-affirmed in Dooley v. Smith, 13 Wall. 605 (1871); Bigler v. Waller, 14 Wall. 298 (1871); and Railroad Co. v. Johnson, 15 Wall. 195 (1872). Notes payable in "current funds" and in " currency " have been held in many States to be promissory notes payable in money. .1 ; ILLUSTRATIONS. The following have been held to be valid bills or notes as being for a sum certam in money : 1. A note made in Canada promising to pay at Chicago '•$893, American currency": Third National Bank v. Cosby, 41 U. C. g. B. 402 (1877). 2. " To r.— Please pay to H. the sum of §188.40 for floor- ing supplied to your buildings on U. road and charge to ray account, E.": Hall v. Prittie, 17 Out. A. R. 30G (1890). 3. A promise to pay in cash or goods if the holder chooses to demand the ^ormer ; McDonnell v. Holgate, 2 Rev. de Leg. 29(1821). But see Nos. 3, 4, and 14, pp. 43 and 44. 4. A note payable in American silver at par, before the pro- clamation declaring such silver uncurrent : Joseph v. Turcotte, 2 R. C. 479 (1871). FORM AND INTRRl'RKTATION. 43 n. A note nmdo in Nova Scotia pi'oinisinj,' to pay a sum of money in lioston " in cunoncy ": Souther v. Wallaci', 20 N. S. TjOI) (IHKH). Aflirnii'd in Supreme Court of Canada, wlioro held that " It in no objeetion to the vaHihty of a promissory note that it i.s for tlio payment of a certain sum in currency, which nuist he held to mean I'nited States currency when the note la payable in the United States": Ki S. C. Can. 717 (ISSO). (). A note made in New JU'unswick promising to pay " $ payable in I'nited States currency ": St. Stephen Ky. Co. v. ]{lack, la N. I'.. (2 Han.) \H\) (1H70). 7. A note payable " in bankable currency": Dunn v. Allen, 24 N. 15. 1 (1?. i<: C. 818 (1823). 16. An order requiring payment of " the balance due to me for building the Baptist College Chapel ": Crowfoot v. Gurney, 9 Bing. 372 (1832). B. C. lAW LIBRARY FORM AND INTERPRETATION. 45 17. A promise to pay £695 in 4 instalments, 8 of £200 each, and the balance £95 to go as a set-off for an order : Davies v. Wilkinson, 10 A. & E. 98 (1839). 18. A promise to pay in current bank bills or notes : McCorniick v. Trotter, 10 Serg. & R, 94 (1823). 19. A promise to pay *'in office notes of a bank ": Irvine V. Lowry, 14 Peters, 293 (1840). 20. A promise m New York to pay " in Canada currency ": Thompson v. Sloan. 28 Wend. 71 (1840). "A specified person."— The person to whom or to whose order a bill is made payahle is called the payee. As to the necessity for the payee heing clearly specified when the bill is payable to order, see section 7. The payee may be the same person as the drawer or the drawee or a fictitious person : section 5. As to the change in the law making negotiable a bill payable to a specified person, and not to his order, see notes on section 8, s-s. 4. *' Person " is here used in the wide sense of the Interpretation Act R. S. C. c. 1, s. 7 (22), and includes corporations, partnerships, etc. *' Bearer." — A bill payable "to John Smith or bearer " is a bill payable to bearer. All persons except chartered banks are prohibited under a penalty of $400 from issuing, making, drawing, or endorsing any bill, note, or cheque intended to circulate as money ; and such intention is pre- sumed if the sum is less than $20, and the instrument is payable to bearer, or at sight, or on demand, or within 30 days, unless given by the maker directly to his immediate creditor : Bank Act, 53 Vict. c. 31, s. 60. Companies incorporated by special Dominion Act, to which the general Act applies, or by letters patent are prohibited from issuing a note payable to bearer or intended to circulate as money : R. S. C. c. 118, s. 35 ; c. 119, s. 76. Companies incorpor- 46 § 3. Wlu'ii iii- struinoiit is not sue bill. BILLS OF EXCHANGE ated by special Acts or by letters patent in most of the provinces are subject to a like disability : R. S. 0. c. 156, 8. 33, s-s. 2 ; c. 157, s. 59, s-s. 2 ; R. S. Q. Arts. 4689 and 4746; R. S. N. S. c. 79, s. 67; C. S. Man. c. 9, s. 269; Rev. Ord. N.-W. T. c. 30, s. 80. They may apparently accept bills payable to bearer, except such as come within the foregoing prohibition in the Bank Act. In France a bill cannot be drawn payable to bearer, but must be to the order of a third party or of the drawer himself : Code de Com. Art. 110. 2. An instrniuent which does not comply with these conditions, or which orders any act to be done in addition to the payment of money, is not, except as hereinafter provided, a bill of exchange : Imp. Act, s. 3 (2). ** Except as hereinafter provided."— These words are not in the Imperial Act, and it is doubtful if they serve any useful purpose. They were not in the bill as introduced, but were inserted in the House of Commons ostensibly to meet the case of a bill payable with exchange (section 9 (d) ), which was assumed not to be for a sum certain : Commons Debates, 1889, p. 778. That section, however, declares such a bill to be for a sum certain, within the meaning of the Act. Probably the only instruments recog- nized as bills by the Act, which do not fairly come within the definition in the first clause of this section are those in which the drawer and the drawee are the same person, which, strictly speaking, are not addressed by one person to another. The use of the word " conditions " here is not the most felicitous, in view of the use of " unconditional " in the definition ; but it is the order to pay that must be uncon- ditional. FORM AND INTERPRETATION. 47 to 9 og- h;n in on, son The following are examples of instruments held not to ^ 3^ be valid bills or notes on account of their ordering or pro- mising some act to be done in addition to the payment of money. ILLUSTRATIONS. 1. Au instrument in the form of a note, with the following clause added " This note to be held as collateral security ": Hall V. Merrick, 40 U. C. Q. B. 5GG (1H77). 2. A note payable in 8 years, with the following words added : " This note is given as collateral security for a guarantee of $5,000 given to John Sutherland by Alexander Sutherland": Sutherland v. Patterson, 4 0. R. 565 (1HH4). 8. A promise to pay a certain sum, half in cash and half in goods : Gillin v. Cutler, 1 L. C. J. 277 (1857) ; Burnham v. Watts, 4 N. B. (2 Kerr) 877 (1844). 4. An instrument promising to pay £25 for a mare, by instalments, and further to give a mortgage on a day named, and if this were not given the whole amount should be payable at once : Cote v. Lemieux, 9 L. C. R. 221 (1859). 5. An order on defendant to pay £5, " half cash and half goods " : Melville v. Beddell, Stevens N. B. Digest, p. 95 (1832). (5. A promise to pay a sum of money on a particular day, " arid deliver up horses and a wharf": Martin v. Chauntry, 2 Str. 1271 (1747). 7. A promise to pay £05, " and also all other sums which may be due ": Smith v. Nightingale, 2 Stark. 875 (IHIH). 8. A promise to pay £1,200, " this being intended to stand as a setoff to a legacy ": Clarke v. Percival, 2 B. & Ad. GGO (1881). 9. A promise to pay £80, and the demands of the sick club : Bolton v. Dugdale, 4 B. & Ad. 619 (1838). 48 BILLS OF EZCHANQE § 3. Uncon- ditional order dctlned 10. A promise to pcty £10 and all fines according to rule : Ayrey v. Fearnsides, 4 M. & W. 168 (1838). 11. An order requiring payment of a certain sum, " and to take up a note for the drawer": Irvine v. Lowry, 14 Peters, 298 (1840). 12. An order for " $800, and such additional premiums as may be due on policy, No. 218,171 ": Marrett v. Equitable Ins. Co., 64 Maine, 537 (1867). 3. An order to pay out of a particular fund is not unconditional within the meaning of this section ; but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to re-iniburse himself, or a particular account to be debited with the amount, or {b) a statement of the transaction which gives rise to the bill, is unconditional : Imp. Act, s. 3 (3). An order to pay out of a particular fund is not a bill, being conditional, as the fund may prove inadequate. It may, however, be a valid assignment of the fund, or a part of it, and operate without an acceptance by the debtor. A bill may be accepted, payable out of a certain fund. As will be seen from the following illustrations, the decisions have not been consistent as to whether a particular bill should fall within the first or the second of the classes indicated in the above clause. 9. share o 61 N. ILLUSTRATIONS. The following have been held not to be billc or notes, as being payable out of a particular fund : — 1. An order for £25, payable out of S's money : Ockerman V. Blacklock, 12 U. C. C. P. 362 (1862). a of la& FORM AND INTERPRETATION. ^9 2. An order to pay £125, " on account of the plaintiff's ^ 3 claim in this suit": Corp. of Perth v. McGregor, 21 U. C. -— Q. B. 459 (1862). 8. An order to pay " out of the first moneys received by you on my account": Pullerton v. Chapman, 2 N. S. D. 470 (1871). 4. An order by a captain for £420, as being the full amount of freight for the voyage : Brett v. Lovett, 2 N. S. D. 472 (1871). 5. An order to pay £7 "out of my growing substance": Josselyn v. Lacier, 10 Mod. 294 (1715). 6. An order to pay "out. of the moneys arising from my reversion ": Carlos v. Fancourt, 5 T. R. 432 (1794). 7. " To B. — I do hereby order, authorize and request you to pay to B. £ out of moneys due or to become due from you to me, and his receipt for same shall be a good discharge. G.": Brice v. Bannister, 3 Q. B. D. 569 (1878) ; see Buck v. Robson, ibid. 686 (1878). 8. A promise to pay out of the net proceeds of ore : Worden V. Dodge, 4 Denio, 159 (1847) ; Morton v. Naylor, 1 Hill 683 (1841); Gallery v. Prindle, 14 Barber 186 (!851). 9. An order to pay $ "and deduct the same from my share of the profits of the partnership": Munger v. Shannon, 61 N. Y. 251 (1874). The following have been held to be valid bills and notes as coming within the rule in the latter part of the above sub- section : — 1. A promise to pay $150, with the clause added, " which when paid is to be endorsed on the mortgage bearing even date herewith ": Chesney v. St. John, 4 Ont. A. R. 150 (1879). 2. A promise to pay, with a memorandum that the note was ,c;iven for insurance premiums : Wood v. Shaw, 8 L. C. J. 169 (1858). M C.B.E.A.- m BILLS OF BXCHANQE 3. Bill not invalid for reason specified. 3. An order to pay on account of wine had of the drawer : BuUer v. Cripps, 6 Mod. 29 (1703). 4. An order to pay £9, "as my quarterly half pay, by advance ": Macleod v. Snee, 2 Str. 762 (1728). 5. A promise to pay £50, being a portion of a value as under deposited, deposited in security for the payment hereof : HaussouUier v. Hartsinck, 7 T. R. 783 (1798). 6. A promise to pay £16 " by giving up clothes and papers, etc."; these latter words being merely equivalent to "value received ": Dixon v. Nuttall, 6 C. & P. 820 (1834). 7. An order to pay £600 " on account of moneys advanced by me for the F. Co.": Griffin v. Weatherby, L. R. 3 Q. B. 753 (1868). 8. An order for £3,874 " against credit No. 20, and place it to account as advised": Banner v. Johnston, L. K. 5 E. &. I. App. 157 (1871). 9. An order to pay £200 out of moneys which would become payable on the completion of a contract : ex parte Shellard, L. R. 17 Eq. 109 (1878). Disapproved in Buck v. Robson, 8 Q. B. D. 686 (1878). 10. An order for £7,000 " which is on account of dividends and which charge to my account according to a registered letter I have addressed to you ": Crofton v. Crofton, 83 Ch. D. 612 (1886). 4. A bill is not invalid by reason — (a) That it is not dated : Imp. Act, J. 3 (4) (a). A bill without a date is irregular, although not invalid. If issued undated and payable at a fixed period after date, any holder may insert the true date of issue and it shall be payable accordingly : section 12. It is presumed to be dated on the day it is made : Hague v. French, 8 6. & P. 173 (1802) ; Giles v. Bourne, 6 M. & 8. 73 (1817) ; and (c) is draw Act, s. FORM AND INTERPRETATION. 51 proof of this may be made by parol : Davis v. Jones, 17 § 3. C. B. 626 (1866). Although not an essential part of a bill the date is a material part, and when altered without proper assent renders the bill void : section 63. In France a bill must be dated or it is invalid : Code de Com. Art. 110. (b) That it does not specify the value given, or that any value has been given therefor: Imp. Act, s. 3 (4) {b). Formerly the words ** value received " or some words implying consideration were necessary : Byles, p. 95 ; Ean- dolph, § 159. By the Civil Code of Lower Canada, Article 2285, when a bill contains the words " value received " value for the amount of it is presumed to have been received on the bill and upon the indorsements thereon : Larocque v. Franklin County Bank, 8 L. C. E. 328 (1858); Walters v. Mahan, 6 L. N. 316 (1883). Even when these words are in a bill, parol evidence may be received to prove the contrary : Davis v. McSherry, 7 U. C. Q. B. 490 (1849); Baxter v. Bilodeau, 9 Q. L. B. 268 (1883) ; Abbott v. Hendricks, 1 M. & G. 791 (1840). In an accepted bill, payable to the order of the drawer, these words imply value received by the acceptor : Highmore v. Primrose, 5 M. & S. 65 (1816). If the bill be payable to a third party they imply value received by the drawer : Grant v. Da Costa, 3 M. & S. 351 (1815). In England these words have long been unnecessary : Hatch v. Trayes, 11 A. & E. 702 (1840). (c) That it does not specify the place where it is drawn or the place where it is payable : Imp. Act, s. 3 (4) (c). The place where a bill is drawn is usually placed at the top before the date. If no place is specified the holder may la BILLS OF EXOHANaE § 3. e Gl.ka would forge the iadoraemt T."".^ """"^' -<• Pr-ent the bill, ,nd get the mo^' If' "^"'"f * Co., February, 1887, and the 12tli om!.^' , , '™ ""^ ^'h «' "■8 forgeries were discovered hA . /°'"'"* ^^« "h™ "8 snoh bills, which al—d 1 °'r' "° '^^ "'«» charged these bills ,o VagS and tfe ' r "" ^"^ ^'""' I'yhim to recover that amount " "*" '''<"'8''t " wis :„::dert;a'f by sit; S" , r^ ';■ """'"" « j-^- precluded from denying the » ""' '^'"' '^»«l'*'"> was ^'--a. The q„es2 rema n dT « "' '"* ^'«-'"« <> withi„sub.section8ofseet!r7 !.!""■■ ""^ ""«« "^me of the parties had upon th ir rlre^^'^'-l"' '"^ -""J""' t'os. The decision was iTL ^ ,T "8'"' »'"' 'iabili- folding thatC. Petri "coth'' "' ''"""'"^' "'^i'«'ge "ous or non-existing p rso^s •• t ,,"•''''7 "'"^ ""' "«-=«■ «»b.sectio„, and the banrCIs no ' ^^.f .' """"'•"^ <" «"•« ;° question as payable to belrer thifv "j'"^' '"^ ""« been guilty of negligence imld' . ^ ^"«'"'"° ^ad not "ansactions, so as to d seiwl v'"f '"""'^'"*'' ""l" "-e «n the authority of Robarts ' t '^^ '"""'''' """^ """ embodied in section 24 of be /fZ' 'u '^^ "■ ^«" »851,, '» order, the bank had „„ right to nl.'"° '""« P"^-""; b^ome the holder by IZZ T^ '" '"'" "■"> ^^^ "«' 108 (1888). ^ " """^ ""iorsement: 22 Q. B. D. The case went to the rr.„,^ , . 66 66 BILLS OF EXCHANOE §7. Final juilgment affirmed by the majority, Lord Esher, M.R., disBenting : 23 Q. B. D. 243 (1889). It was held that although the instruments in question might not really be bills of exchange at all, there being no real drawee and no real payee, the bank, in view of their acceptance by plaintiff and his letters directing their payment, was justified in dealing with them as if they were actual bills; that the payees were not fictitious or non-existing, but a real and existing firm; that " fictitious " meant fictitious to the knowledge of the party sought to be charged upon the bill ; and that the bank was not justified in paying upon a forged indorsement. Lord Esher was of opinion that the instruments were not bills of exchange at all, but that Vagliano was estopped from saying that they were not bills ; that the Bills of Exchange Act altered the law so that it was not necessary that Vagliano should know that the payees were fictitious in order to make the bills payable to bearer, and that in this case the payees were really ficti- tious and the bank consequently justified in paying the bills to the bearer. In the House of Lords these decisions were reversed by the Lord Chancellor, Lords Selborne, Watson, Herschell, Macnaghten and Morris, while Lords Bramwell and Field were in favor of the plaintiff: (1891) A. C. 107. The majority however did not agree in the grounds upon which the judgment should be based. Lords Watson, Herschell, Macnaghten and Morris held that this sub-section applied, an opinion in which the Lord Chancellor reluctantly con- curred, while Lord Selborne thought that the payees were not fictitious or non-existing. The Lord Chan- cellor and Lord Selborne thought that as Vagliano had accepted the bills, and had advised the bank that he had done BO, and had seen the payments entered in his pass- book, he was estopped from claiming that the payments FORM AND INTERPRRTATION. r.7 The ■were unauthorized, an opinion in which Lords Watson and § 7, Macnaghten alone partly concurred. The divergence of opinion was such that it would seem almost to justify the somewhat caustic remark of Lord Bramwell regarding the dissenting opinion of himself and of Lord Field, when he said : " It is some comfort to me to think that the head- note of our opinion may be expressed very shortly, and in the most abstract form — namely, a banker cannot charge his customer with the amount of a bill paid to a person who had no right of action against the customer, the acceptor. But I think the head-note which will represent the decision of your lordships should be in a strictly con- crete form stating the facts and saying that on them it was held that judgment should be for the appellants." Estoppels as to payee.— The acceptor is precluded from denying to a holder in due course the existence of the payee and bis capacity to indorse at the time of acceptance: section 54 (8). The drawer is also precluded from denying to a holder in due course the existence of the payee and his capacity to endorse at the time the bill is drawn : sec- tion 55 (h). The onus is on the holder to prove that the payee is fictitious or non-existing. The bolder of such a bill, if he desires to negotiate it, should indorse it in the name of the fictitious payee. The signature of the name of a fictitious payee in such a case must be distinguished from the forgery of tbe signature of a real person, and also from the case of a real payee using a business or fictitious name instead of his own. In France a bill with a fictitious payee is void in the hands of a holder with notice : Nou- guier, § 277. In the United States it is looked upon with disfavor : Daniel, §§ 136-140. By section 34, s-s. 3, the provisions of the Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement. r''# 68 BILLS OF EXCHANOB §7. ILLUSTRATIONS. 1. Where a note is made payable to a fictitious payee and not to his order or bearer, a holder for value cannot maintain an action against the maker as on a note payable to bearer, as it is not negotiable : Williams v. Noxon, 10 U. C. Q. B. 259 (1858). 2. A note in favor of one who is absent, and who (as it happens) is dead, is not void and his executors may maintain an action on it: Grant v. Wilson, 2 Rev. de Leg. 29 (1814). 8. When a bill was drawn in favor of a fictitious payee and indorsed by the drawer in that name to the knowledge of the acceptor, the latter is liable to an innocent indorsee for value : Gibson v. Minet, 1 H. Bl. 569 (1791). 4. The holder with notice of a bill payable to a fictitious payee cannot sue the acceptor : Hunter v. Jeffery, Peake, Ad. Ca. 146 (1797). 5. An agent having money in his hands, purchases with it a bill of exchange, which he indorses specially to his principal ; the latter, at the time of the indorsement, was dead, but the fact was not known to the agent. Held, that the property in the bill passed to the administrator of the principal : Murray v. East India Co., 4 B. & Aid. 204 (1821). 6. When a clerk drew and endorsed a bill as attorney for his deceased employer, upon a debtor of the estate who accepted with full knowledge of the facts, the acceptor was liable to the indorsee on the bill : Aspitel v. Bryan, 83 L. J. Q. B. 328 (1864). 7. The innocent acceptor of a forged bill payable to a fictitious payee is liable to a bona j\de holder for value, and the bill may be treated as if payable to bearer: Phillips v. im> Thurm, L. R. 1 C. P. 468 (1866). 8. Where a promoter of a company induced a friend to sub- scribe for shares as C, a name not his own, and gave the directors the cheque of a third party to the order of C, which FOBM AND INTERPRETATION. OS) the the ■was not indorsed, the directors could tr^at the payee as fictitious, § y^ and indorse the cheque in the name of C. : Edinburgh Ballarat O. M. Q. Co. V. Sydney, 7 T. L. R. (556 (1891). 9. Where the name of the payee is fictitious it may be indorsed by tlie person to whom the note is delivered : lilodg(?tt V. Jackson, 40 N. H. 21 (18,59). 8. ^\'hi'^ 51 bill contains words prohibiting,' [^i^JJ^^'^ii^, trunsfer, or indicatinj^' an intention that it should negotiable, not be transferable, it is valid as between the parties thereto, but it is not negotiable : Imp. Act, s. 8 (1). If a party to a bill wishes to make it not negotiable, be must do 80 in clear terms. Where a bill was drawn payable to the order of F. the drawer, and the drawees struck out the word "order" and accepted the bill "in favor of F. only," at a certain bank, it was held that such acceptance did not vary the efifect of the bill as -drawn : Decroix v. Meyer, 25 Q. B. D. 313 (1890) ; affirmed by the House of Lords, July 30th, 1891, W. N. 156 ; 7 T. L. R. 729. Where a cheque payable to the order of M. was crossed " account of M., National Bank, Dublin," it was held that these words in the crossing did not prohibit transfer and that the Bank having credited M. with the amount, could sue the drawer : National Bank v. Silke, (1891) 1 Q. B. 436. For the rule as to bills negotiable in their origin, but which have their negotiability either stopped or limited by a restrictive endorsement, see section 35. The Old Law. — Formerly a bill payable to a particular person and not to his order or to bearer would have come under this sub-section, and most of the non-negotiable bills and notes in the reported cases are of this class ; now, by sub-section 4, such a bill is negotiable. It remains 70 BILLS OF EXCHANGE ) '. § 8. t<* ^^ seen whether the courts will recognize in third parties the same rights under a sale or assignment of a bill or note whose transfer is prohibited, as they have heretofore done as to a bill not payable to order or bearer. Ag to the law in England, Chalmers says at p. 129: "A bill may be transferred by assignment or sale, subject to the same conditions that would be requisite in the case of an ordinary chose in action. Thus : — C. is the holder of a note payable to his order. He may transfer his title to I). by a separate writing assigning the note to I). : re Barrington, 2 Scho. \- Lef. 112 (1804); or by a voluntary deed constituting a declaration of trust in favor of 1).: Richardson v. Richardson, L. 11. 3 Eq. 68G (18G7) ; or, by a written contract of sale : Sheldon v. Parker, 3 Hun., 498 (1870). A bill is a chattel, therefoie it may be sold as a chattel. A bill is a chose in action, therefore it may be assigned as a chose in action." Chose in action. — In Ontario, the Mercantile Amend- ment Act which gives the assignee of a chose in action the right to sue in his own name, does not apply tt» bills of exchange or promissory notes : R. S. 0. c. 122, s. 13. The Manitoba Statute on the subject makes a similar exception : C. S Man. c. 37, s. 105; also the Ordinance of the North West Territories : Rev. Ord. c. 51, s. 7 ; and the Act of British Columbia : Cons. Acts, B. C. c. 19, s. 7. The law of Quebec is contained in Articles 1570 and and 1671 of the Civil Code, and provides that the sale of debts and rights of action is effected by an instrument of sale, a copy of which is served on the debtor unless he is a party to it. The transferee may then sue in his own name. Article 1573 provides that these provisions do not apply to bills, notes or cheques payable to order or bearer. In McCorkill v. Barrabe, M. L. R. 1 S. C. 319 (1886), it was held that the indorsee of a non-negotiable note could sue FORM AND INTERPRETATION. 71 the maker, when a copy of the note and indorsement had heen served upon the latter. In Brice v. Bannister, 3 Q. B. T). 560 (1878), Brarawell, L.J., in Bpcakinp; of an assignment of money to be earned under a written contract, says at p. 580 : "It does seem to me a strange thing and hard on a man that he should enter into a contract with another and then find that because that other has entered into some contract with a third, he, the first man, is unable to do that which is reasonable and just he should do for his own good. But the law seems to be so ; and any one who enters into a contract with A. must do so with the understanding that B. may be the person wiih whom he will have to reckon. Whether this can be avoided, I know not ; may be, if in the contract with A. it was expressly stipulated that an assign- ment to B. should give no rights to him such a stipulation would be binding. I hope it would be." This section of the Act appears to furnish the stipula- tion sugggested by Lord Bramwell, and as the law of Quebec makes provision for transfer the question proposed by him may come up for solution there. If there be a conflict between the Act and the Code there may be still further an important question as to which law shall over- ride the other. In Quebec it has been held that the indorsee of a non- negotiable note could sue his immediate indorser but not a more remote party : Jones v. Whitty, 9 L. C. R. 11)1 (1859). In Harvey v. The Bank of Hamilton, 16 S. C. Can. 714 (1888), an Ontario case, it was held that a'though the note was not negotiable the indorsee was entitled to recover from the maker it being shewn that the note was intended by the makers to have been made negotiable, and was issued by them as such, but, by mistake or inadvertence; 8. 72 BILLS OF EXCHANGE § g, it was not expressed to be payable to the order of the ' payee. But, in this case might not the holder have added the words "or order" as having been omitted by inadver- tence ? In Kershaw v. Cox, 3 Esp. 246 (1801), it was held that the insertion of these words did not vitiate the note. It has been held that the indorser of a non-negotiable note is not liable to the payee : West v. Bown, 3 U. C. Q. B. 290 (1847) ; and that the maker of a note payable to the treasurer of a township cannot be sued by the corporation : Township of Toronto v. McBride, 29 U. C. Q. B. 13 (1869). The French Code de Commerce does not recognize a non-negotiable instrument as a bill of exchange : Arts. 110, 136. order'oV" ^- ^ negotiable bill may be payable either to bearer. qy({qy ot to bearer : Imp. Act, s. 8 (2). To bearer. 3. A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an indorsement in blank: Imp. Act, s. 8 (3). A bill is payable to bearer, which is payable " to A. B. or bearer," or which is payable "to or bearer." The last clause of this sub-section altered the law in England, and it also alters the law in Canada. Formerly a bill having been indorsed in blank, its negotiability could not afterwards be restrained by a special indorsement : Walker v. Macdonald, 2 Ex. 517 (1848). No indorsement other than that by the payee can stop the negotiability of the bill : Civil Code, Quebec, Art. 2288. A cheque payable to C. M. & S. or bearer was stamped for deposit to their credit in a bank and endorsed by them. Their clerk instead of depositing it drew the funds, the teller not observing the FORM AND lUTERPRETATION. 73 to special indorsement. It was held that as bearer the clerk § g, was entitled to receive payment and the bank which paid was not liable: Exchange Bank v. Quebec Bank, M. L. B. « S. C. 10 (1890). As to a bill not payable to bearer, negotiable in its origin, being made non-negotiable by a restrictive indorse- ment, see section 36. 4. A bill is payable to order which is expressed to order, to be so payable, or which is expressed to be pay- able to a particular person, and does not contain words prohibiting transfer or indicating an inten- tion that it should not be transferable: Imp. Act, s. 8 (4). The second part of this sub-section makes an important change in change in the law. Formerly in Canada a bill or note payable to a particular person by name and not to his order or to bearer was not negotiable : Harvey v. Bank of Hamilton, 16 S. C. Can. 714 (1889). Jones v. Whitty, 9 L. C. R. 191 (1859) ; Banque du Peuple v. Ethier, 1 R. L. 47 (1869); McCorkill v. Barrabe, M. L. R. 1 S. C. 319 (1885); West v. Bown, 3 U. C. Q. B. 290 (1847). This was the law in England before the Act of 1882, which adopted the law of Scotland in this respect for the United Kingdom: Plimley v. Westley, 2 Bing. N. C. 251 (1835). It is still law in nearly all the United States: Daniel, § 105 ; Randolph, § 174. In Illinois there is a statute similar to the present Imperial and Canadian Acts. Like other changes in the law introduced by the Act, it Not "-e'lo will apply only to bills and notes made in Canada on or after the Ist of September, 1890. As to the assignment or transfer of non-negotiable bills, or whpt is a sufficient 74 BILLS OF EXCHANGE §8. Option of payee. 1 Hum payable. indication of an intention that a bill should not be trans- ferable, see the notes to sub-section 1 of this section. Under the old law if a bill originally negotiable were indorsed to a particular person and not to his order, it would still be negotiable by him : Moore v. Manning, Comyns, 311 (1719). 5. Where a bill, either originally or by indorse- ment, is expressed to be payable to the order of a specitied person, and not to him or his order, it is nevertheless payable to him or his order, at his option. Imp. Act, s. 8 (o). A bill payable to a person " or his order " or " to the order" of a person means the same thing, and in either case he can demand payment without indorsing it : Myers V. Wilkins, 6 U. C. Q. B. 421 (1850). A note payable " to A. or order on account of B." is payable to A. or to his order and not to B.: Newton v. Allen and Moir v. Allen,^ 2 Rev. de Leg 29 (1817) ; Clarke v. Esson, 2 Rev. de Leg. 30 (1820). 9. The Slim payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid — (a.) With interest ; (b.) By stated instalments ; (f.) By stated instalments, with a provision that upon default in payment of any instalment the whole shall become due ; (d.) According to an indicated rate of exchange, or according to a rate of exchange to be ascer- tained as directed by the bill : Imp. Act, s. 9 (1). FORM AND INTERPRETATION. u A bill must be for " a sum certain in money ": section 3. ^ 9. See notes and illustrations ante p. 42. This section gives " some instances that might not be thought to come under that designation unless specially so declared. "With interest." — It may be "with interest" simply, or with interest at a certain rate. In the former case the rate up to maturity at least would be determined by the law of the place where the bill is drawn : Story on Conflict of Laws, 8th ed., s. 305 : Allen v. Kemble, 6 Moore P. C. 321 (1848). In Canada when no special rate is mentioned, the law fixes it at 6 per cent., but the parties may agree upon any higher or lower rate : R. S. C. c. 127, ss. 1 and 2. Formerly there were restrictions in certain cases in most of the provinces. In Ontario and Quebec certain corpor- ations could not take more than six, and others not more than eight per cent : ib. section 10. See as to Nova Scotia ss. 12 to 17 ; New Brunswick, ss. 18 to 23 ; British Columbia, ss. 24 to 27 ; Prince Edward Island, ss. 28 to 30. The restrictions relating to these provinces were all abolished by the Act of 1890 immediately following the present Act, 53 Vict. c. 34, which repeals sections 9 to 30 inclusive of R. S. C. c. 127. Banks are subject to the following limitation : " The bank shall not be liable to incur any penalty or forfeiture for usury, and may stipu- late for, take, reserve or exact any rate of interest or discount not exceeding seven per centum per annum, and may receive and take in advance any such rate, but no higher rate of interest shall be recoverable by the bank " : Bank Act, 53 Vict. c. 31, s. 80. Section 81 provides that no promissory note or bill of exchange discounted by or assigned to a bank shall be void on the ground of usury, on account of its bearing a higher rate of interest than is allowed in the province, but the bank shall not be 76 BILLS OF EXCHANGE § 9. entitled to recover more than seven per cent. On account ot the repeal of the usury clauses of "The Act respecting Interest '"" affecting the different provinces, as mentioned . above, the greater part of the latter section is now inoper- ative. Certain corporations by their charters are restricted as to the rate of interest they may take. These g,re not affected by the above repeal. In England the rate is 5 per cent, but the parties may agree upon any other rate : Upton v. Ferrers, 5 Ves. 808 (1801). In the United States the rate varies. In most of the northern and north-eastern States the legal rate is 6 per cent. ; in Wisconsin, Minnesota, and some other western States it is 7 per cent. In Massachusetts, Bhode Island, and Connecticut, usury laws have been abolished ; in the other northern and north-eastern States they still exist with varying degrees of severity. In New York any higher rate than 6 per cent, is only allowed in exceptional cases. In Ohio, Indiana and Illinois the maximum is 8 per cent. ; in Michigan, Wisconsin, and Minnesota, 10 per cent. Where a bill drawn in one country is negotiated, accepted or payable in another, for the rule as to what rate of interest is to govern, see the notes under section 71. Where a special rate of interett is mentioned in the bill, see the notes and cases under st^ction 57, s-s. 2, as to the rate which is to run after maturity. "By Stated Instalments."— The instalments must be " stated," for if there be any uncertainty about them the instrument is not a bill. The instalments may be either with or without interest. /. *> to presentment and notice of dishonor each instalment is treated as a separate bill. A valid indorsement must be of all instalments unpaid. FORM AND INTERPRETATION. 7T ILLUSTRATIONS. 1. A promise to pay £102 " in yearly proportions " held to be a valid note payable in two annual instalments : McQueen v. McQueen, 9 U. C. Q. B. 586 (1853). 2. An action lies on a note payable by instalments as soon as the first day of payment is passed, but only for the amount of the first instalment, each of them being considered as a separate debt : Clarihue v. Morris, 2 Rev. de Leg. 80 (1820). 8. A bill was payable in three equal instalments. When the first became due, it was presented at the bank where it was made payable, the cashier paid the instalment due, and returned the bill to the holder with the following indorsement : " Paid on the within $741, Aug. 12 '61." Held to be an acceptance for the remaining instalments: Berton v. Central Bank, 10 N. B,. (5 All.) 498 (1803). 4. A promise to pay £50 by instalments, all payments to cease on the death of W. is not a note : Worley v. Harrison, 3 A. & E. 069 (1835). 5. A promise to pay £6 "by instalments " simply, is not a, note: Moflfat v. Edwards, Car. & M. 16 (1841). 0. A note payable by instalments, with a proviso that if default is made on the first instalment, the whole shall become due is a valid note, and on default an indorser is liable for the whole amount : Carlon v. Kenealy, 12 M. & W. 139 (1843). 7. A non-negotiable note, payable in instalments, but on default, the whole to become due, is valid, and the maker has three day's grace: Miller v. Biddle, 14 Jur. N. S. 980 ; 18 L. T. N. S. 384 (1805). 8. A note payable '* in such instalments, and at such times as the directors of a company may from time to time require," held to be a valid note, as being payable on demand, or in instal- ments on demand: White v. Smith, 77 111. 851 (1875). "With Exchanjfe."— Where the bill is to be paid- in one country and the sum is expressed in the currency off 78 BILLS OF EXCHANGE ^ 9. another, the amount is determined according to the rate of exchange on the day the bill is payable: Hirschfield v. Smith, L. R. 1 C. P. p. 340 (1866) ; section 71, 2 {d). On a sterling bill drawn in London on defendant in Toronto, but accepted by him in London and payable there, plaintiff was held entitlerl to be paid at the current rate of exchange : Greatorex • . L.. e, 6 U. C. L. J. 212 (1860). It was for- merly held in Ontario that a promise to pay a certain sum " with exchange on New York " or " with the current rate of exchange on New York " or " with exchange not to exceed one-half poi v 3nt." was not valid as not being for a sum certai? . IfUi^er v. Fahnestock, 9 U. C. C. P. 172 (1859) ; Fahnesir.e;. ' . ..i.lraer, 20 U. C. Q. B. 307 (1860) ; Grant v. i'oung, 23 U. C. Q B 387 (1%4); Wood v. Young, 14 U. CO. P. 250 irf,J t); Sa- -. v. Stevenson, 23 U. C. C. P. 603 (1874). It was uoO l-^' . . ^;:w Brunswick that a promise to 4'42 3s. 9d. with curreiir rate of exchange on Boston was not a promissory note : Nash v. Gibbon, 9 N. B. (4 Allen) 479 (1860). It was also held in a number of cases in Ontario that notes payable in current funds of the United States were not valid, but these cases were expressly overruled in Third National Bank of Chicago v. Cosby, 43 U. C. Q. B. 58 (1878). Discre- iiancy between tlRures and words. 2. Where the sum payable is expressed in words and also in figures, and there is a discrepancy be- tween the two, the sum denoted by the words is the amount payable : Imp. Act, s. 9 (2). Usually the amount is stated in words in the body of the bill, and in figures in the margin. In some countries the law requires the amount to be stated in words, while in others both are required: Eandolph, § 105. The figures in the margin form no part of the bill or note : Garrard v. Lewis, 10 Q. B. D. 30 (1882). When the words are not S IS FORM AND INTERPRETATION. 79 distinct, or the word " dollars " or " pounds " is omitted, § 9. the figures in the margin may be looked at to explain them : Rex v. Elliott, 1 Leach C. C. 175 (1777) ; Phipps v. Tanner, 5 C. & P. 488 (1833) ; Beardsley v. Hill, 61 111. 854 (1871). The rule in this sub section is so binding that when the figures in the margin differ from the amount in words evidence is inadmissible to show that the amount in figures is the correct one : Saunderson v. Piper, 5 Bing. N. C. 425 (1839). 3. Where a bill is expressed to be payable with i"to»es». interest, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated, from the issue thereof. Imp. Act, s. 9 (3). The first part, of this sub- section follows the old law. On a note payable on demand with interest, the interest runs from the date of the note : Baxter v. llobinson, 2 Rev. de Leg. 439 (1816) ; Dechantal v. Pominville, 6 L. C. J. 88 (1860) : Grouse v. Park, 3 U. C. Q. B. 458 (1847) ; Howland v. Jennings, 11 U. C. C. P. 272 (1861). Where a note was made payable twelve months after date, with six months' interest, the interest began to run six months after the date of the note : Heaviside v. Munn, 2 Rev. de Leg. 439 (1817). The agreement between the parties fixes the rate, no matter how exorbitant it may be : Young v. Fluke, 15 U. C. C. P. 360 (1865). As to what rate of interest should be allowed after maturity, see notes to section 57, s-s. 2. An undated bill is issued when first delivered, complete in form, to a person who takes it as a holder : section 2 (t). A bill is complete in this sense without being dated : section 3, 4 (a). If a wrong date is inserted and the M' 80 BILLS OF EXCHANGE § 9. bill comes into the hands of a holder in due course, he can collect interest from the date inserted, even if it be- previous to the true date of issue : sections 12 and 20. payable on demand. At a future time. 10. A bill is payable on demand — (a) Which is expressed to be payable on demand, or on presentation ; or — (b) In which no time for payment is expressed : Imp. Act, s. 10 (1). Clause (a) differs from the Imperial Act which has the words "or at sight " after " demand." If this section stood alone it might be inferred that bills payable " at sight " were meant to be included as being payable " on presentation," and therefore not entitled to the three days of grace under section 14. But sub-sections 3 and 4 of section 14 and section 39 show that bills payable at sight were not meant to be included among those payable on demand. By section 3 every bill is payable either on demand or at a determinable future time. The Imperial A et enum- erates in section 10 the five classes of bills which are payable on demand within the meaning of that Act, viz. : (1) Those expressed to be payable on demand; (2) Or at sight ; (3) Or on presentation ; (4) Those with no due date expressed ; and (5) Those accepted or indorsed after maturity. In section 11 it enumerates the four classes of those payable at a determinable future time, viz. : (1) Those payable at a fixed period after date ; (2) Or after sight ; FORM AND INTERPRETATION. 81 10. (3) On the occurrence of a specified event certain to § happen ; and (4) At a fixed period after the happening of such event. Those in section 11 are entitled to days of grace, those i''»>8"f in section 10 are not. For a long time it was a doubtful point in England whether hills paj'able at sight or on presentation were entitled to days of grace. It was finally settled by the courts that they were. But by 34 ct 35 Vict. c. 74, after stating the doubts that had arisen on the subject, it was enacted that bills and notes payable at sight or on presentation should be payable on demand and iiave no days of grace. This provision was reproduced in the Imperial Bills of Exchange Act. In Canada, before the Act, bills payable at sight were entitled to days of grace. The Bill as intro- duced into parliament proposed to assimilate our law to that of England in this respect. The House of Commons however, decided not to make the change, and the words " or at sight " were struck out of clause (a) : Commons Debates, 1890, p. 108. Apparently, however, by an over- sight they were not then inserted in section 11; so that the enumeration in these two sections which was meant to be exhaustive and to include all bills that meet the conditions of section 3, did not, in the Act as passed in 1890, include bills payable at sight under either head. This has been remedied by the Act of 1891, which has included them among those payable at a determinable future time, and so entitled to grace. The term " on presentation " has not been in common use in Canada. "On demand" has been the ordinary expression used when the bill was to be paid on presenta- tion, and "at sight" when it was to be paid three days later. These particular words, however, need not be used ; any other words that convey the same idea would serve m'c.b.e.a. — 6 «2 BILLS OF RXCHANOE § 10. equally well. "Presentation" is used in section 98, s s. 6 as synonymous with "presentment." In the United States as a rule days of grace are allowed on bills payable at sight: 1 Daniel, § 617. In New York, Illinois, Vermont, Rhode Island and some other States sight bills have no grace. In France a bill payable at sight is payable on presentation : Code de Com. Art. 180. Accel)- tancewlien overdue. Bill pay- able at a future time 2. Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand: Imp. Act, s. 10 (2). "Before this enactment the English law on the subject dealt with was very obscure; but it had been held in the United States that where a bill was indorsed after maturity, the indorser was entitled to have it presented for payment and to receive notice of dishonor in the event of non-pay- ment, within a reasonable time": Chalmers, p. 29. In Upper Canada the same principle had been laid down in Dunn v. Davis, 6 U. C. Q. B. 327 (1850). As to the United States, see Patterson v. Todd, 18 Penn. St. 426 (1852); Goodwin v. Davenport, 47 Me. 112 (1860); Light v. Kings- bury, 50 Mo. 881 (1872); Eisenlord v. Dillenback, 22 Hun, N. Y. 28 (1878); Bull v. First Nat. Bank, 14 Fed. Eep. 618 (1883); Bassenhorst v. Wilby, 45 Ohio St. 336 (1887); also Daniel, § 611, and Eandolph, § 596 and 671 and cases there cited. 11. A bill is payable at a determinable future time, within the meaning of this Act, which is expressed to be payable — (a.) At sight, or at a fixed period after date or sight : FORM AND INTERPRETATION. ;e(\ irU, itea ) at ;0. in it o so . be s. 10 ubject in the turity, i,yinent, •n-pay- i9. In lown in United |(1852) ; Kings- ;2 Hun, lep 61S |7) ; also [d cases future lich is Idate or (b.) On or at a fixed period after the occurrence § u. of a specified event which is certain to happen, though the time of happening is uncertain : Imp. Act, 8. 11 (1) and (2); 54-55 Vict. c. 17, s. 1 (Can.) (a.) This clause in the Act of 1890 was copied from the Imperial Act without change and read, "At a fixed period after date or sight." As mentioned in the notes under section 10, sight bills in England are payable on demand. The Canadian Parliament refused to abolish the days of grace on these bills, and they were struck out of section 10, but were not then inserted in this section, so that they did not appear in either list. The first section of the amending Act of 1891 placed them in the first clause of the present section. As to when bills payable at a determinable future time fall due, see section 14. In the case of acceptance for honor, see section 64, s-s. 5. It is not necessary to use either the word "date" or "sight" to bring a bill within the provisions of clause (a) of this section. The following are examples of bills and notes that have been held to be valid as coming within the rule laid down in this sub- section. 1. An instrument payable 17 months after date without interest or 41 months after date with interest, as falling due at the later date: Hogg v. Marsh, 5 U. C. Q. B. 819 (1848). 2. A promise to pay on a specified date, with a proviso that if the maker should sooner sell certain lands, the note should be payable on demand: Elliott v. Beech, 8 Man. L. R. 213 (1886). A promise to pay 12 months after notice : Clayton v. Gosling, 6 B. & C. 860 (1826) ; or on six months notice : Walker v. Roberts, Car. & M. 590 (1842); or two months after demand in writing: ■t' $4 BILLS OF EXCHANOB /i;l § 11 Price V. Taylor, r> H. & N. 540 (1800) ; or upon notification of 80 days in any newspaper; Protection Ins. Co. v. liill, HI Conn. 584 (18G.^). "Certain to happen."— Most of the instances of valid notes under this* head are those payable at or after the death of some person. The following are illustrations: — 1. " Six weeks after the death of my father": Cooke v. Cole- han, a Str. 1217 (1745); "one year after iny death": Roft'ey v. Greenwell, 10 A. i^ E. 222 (18,49); "on demand after my decease": Jh'istol v. Warner, li) Conn. 7 (1848). 2. It was held in Andrews v. Franklin, 1 Str. 24 (1717), that a note payable two months after a Government ship was paid off, was a good note as Government was certain to pay; but this decision is open to question. 8. A promise to pay when an infant comes of age, naming the day is a good note: Goss v. Nelson, 1 Burr. 226 (1757); also a promise to pay on a day named, or when a certain work is com- pleted, the day named being held to be the day when it fell due : Stevens v. Blount, 7 Mass. 240 (1810); "on or by" a certain day: Massie v. Belford, G8 111. 2!)0 (1878); Preston v. Dunham, 52 Ala. 217 (1875); on or before a certain time: Bates v. Leclair, 49 Vt. 229 (1877); Holmer v. Krohck, 86 Mich. 871 (1877). tinuendes '^- ^'^ iiistruiiieiit Gxpresscd to be payable on a contingency is not a bill, and the happening of the event does not cure the defect. Imp. Act, s. 11. ILLUSTRATIONS. Orders or promises to pay a certain sum of money on the following terms and conditiohs have been held not to be valid bills or notes, under the rule laid down in this sub-section : — ■ 1. At the sale of timber marked P. A. in Quebec : Russell y. Wells, 5 U. C. 0. S. 725 (1848). 4 V, i. •, a a FORM AND INTERPRETATION. 8(f' 2. Oil tlio arrivftlof a certain ship: Wood v. ITiRginbotliam, ^ ^i. 2 Rev. (le Lep. 28 (1H18) ; Palmer v. Pratt, 2 JJiiig. 185 (1H24) ; — — Coolidge V. Ruggles, 15 Mass. 8H(} (IHIO). 8. Three days after the sailing of a vessel : Dooly v. Ryar- 1 Q. L. R. 219 (1H75) ; Duchaine v. Maguire, H Q. L. R. -„» (18H2). 4. Within so many days after the maker married: Pearson V. Garrett. 4 Mod. 242 (1(598) ; Jieardsley v. Martin, 2 Str. 1151 (1741). 5. £116 on the death of (i. H. provided he left the makers 80 much, or if they were otherwise able to pay it: Roberts v. Peake, 1 liurr. 828 (1757). 6. Ninety days after sight, or when realized : Carlos v. B'ancourt, 5 T. R. at p. 4HG (1794). 7. When I am in good circumstances: ex parte Tootell, 4 Ves. 872 (179H). When a certain sale is made : Hill v. Ilalford, 2 B. Ot P. 4, oOl) ; De Forest v. Frarey, Cow. 151 (182(1). 9. Ninety days after sight or when realized : Alexander v. Thomas, 16 Q. B. 3»8 (1851). 10. When in funds : Gillespie v. Mather, 10 Penn. St. 28 (1848). 11. When an estate is settled up: Husband v. Epling, 81 111. 172 (1876). 12. On demand, or in three years : Maloney v. Fitzpatrick, 188 Mass. 151 (1881). 12. Where a bill expressed to be payable at aomisBion^ fixed period after date is issued undated, or wbere ai'iV^^t the acceptance of a bill payable at sight or at a Hxed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly; VT.VS date. ter 86 BILLS OF EXCHANQIJ date § 12. Provided that («) where the holder in good faith A^o'wrong and by mistake inserts a wrong date, and (h) in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course, the bill shall not be voided thereby, but shall operate and be payable as if the date so inserted had been the true date. Imp. Act, s. 12; 54-55 Vict. c. 17, s. 2 (Can.) In the Act as passed in 1890 the third line read, ** pay- able at a fixed period after sight," thus following the Im- perial Act. It was another case of an omission to harmonize the rest of the \ct with the change made in section 10 by the exclusion of sight bills from those payable on demand. Sight bills thus requiring acceptance a rule became neces- sary for an undated acceptance. The words "at sight or" were therefore inserted after "payable" by section 2 of the Act of 1891. A bill of exchange without a date is valid : De la Cour- tiev V. Bellamy, 2 Show. 422 (1685); Hague v. French, 3 B. & P. 173 (1802); Pasmore v. North, 13 East 621 (1811) ; Giles V. Bourne, 6 M. & S. 73 (1817); Cowing v. Altman, 71 N. Y. 441 (1877). A date is not included among the conditions in section 3 ; but it is a material part of a note and should not be altered : section 63, s-s. 2. A bill is issued when it is first delivered, complete in form, to a person who takes it as holder : section 2 (t). It is only when payable at a fixed period after date, or at sight, T)r at a fixed period after sight, that the date of the bill or of the acceptance becomes of importance. Where an acceptance is not dated, the bill is presumed to have been accepted a few days after its date : Koberts v. Bethell, 17 C. B. 778 (1852). In France if a bill be payable after sight, and the acceptance be not dated, time runs from the date of the bill : Code de Com. Art. 122. )te is i\y FORM AND INTERPRETATION. 87 The section probably goes farther than the old law. It § 12. has been held that parol evidence was admissible to show ~— from what time an undated instrument was intended to operate: Davis v. Jones, 17 C. B. 625 (1856); Richardson V. Ellett, 10 Texas 190 (1853); Cowing v. Altman, 71 N. Y. 135 (1877) ; and that when a note without date was made for another's accommodation, the maker authorized him to fill up the date as he saw fit : Androscoggin Bank v. Kimball, 10 Cush. 373 (1862). And where the maker in June, 1876, sent an accommodation note dated "6th 1875" not naming a month and the 6th of June was a Sunday, and the receiver made the date "June 8th," the note was held not to be voided : Merchants' Bank v. Stirling, 13 N. S. (1 11. & G.) 439 (1880). This presumption of authorization is now extended as regards the kind of bills named to any payee or indorsee who has the bill in possession, and to the bearer. As to tilling up omissions in incomplete bills generally, see sec- tion 20. In France, under the Code de Commerce Art. 110, a bill must be dated. Under the old French Law, according to Pothier, Contrat de Change, No. 36, " omission of the date, or error in the date, cannot be raised by the drawer or the acceptor." 13. Where a bill or an acceptance, or any uatea indorsement on a bill, is dated, the date shall, ''^'''*"'^" unless the contrary is proved, be deemed to be the true date of the drawing, acceptance, or indorse- ment, as the case may be : Imp. Act, s. 18, (1). •* It may be laid down as a general prima facie pre- sumption, that all documents were made on the day they bear date ": 1 Taylor on Evidence, § 169. This has been specially recognized with reference to bills and notes : 88 BILLS OF EXCHANGE § 13. Hayes v. David, 3. L C. R. 112 (1852) ; Evans v. Cross, - — '- 15 L. C. R. 86 (1865) ; Hutchins v. Cohen, 14 L. C. J. 85 (1869) ; Smith v. Battens, 1 M. & Rob. 341 (1834) ; Anderson v. Weston, 6 Ring. N. C. 296 (1840) ; Roberts v. Bethell, 12 C. B. 778 (1852). Parol evidence is admissible to show that the date on the bill is not the true date : Pasmore v. North, 13 East 617 (1811); Montague v. Perkins, 17 Jur. 557 (1853); Bayley v. Taber, 5 Mass. 286 (1809) ; Drake v. Rogers, 32 Me. 524 (1851) ; Germania Bank v. Distler, 4 Hun 633 (1875) ; Biggs v. Piper, 86 Tenn. 589 (1888). If a bill be datod on an impossible date, such as the 81st of September, the law adopts the nearest day by the doctrine of cy pres; and the computation will be from the 30th of September : Wagner v. Kenner, 2 Robinson (La.) 120 (1842). datffiuot '^' -^ "^^^^ ^^ '^^^^ invalid by reason only that it is tojnvaii- {mtedated or postdated, or that it bears date on a Sunday or other non-juridical day. Imp. Act, 8. 18 (2). Bills, cheques, and notes are sometimes postdated or antedated for purposes of convenience ; and the fact that they are negotiated prior to the day of date, is not a suspicious circumstance against which parties must guard ; Daniel, § 85. The indorsee of a bill that was postdated, and indorsed by the payee who died before the day of date, was held to have derived title through the indorser and entitled to recover against the drawer : Pasmore v. North, 13 East, 517 (1811). This case has been followed in the United States: Brewster v. McCardel, 8 Wend. 479(183;^). Time is computed on such bills with reference to the actual date they bear. A postdated cheque is equivalent FORM AND INTERPRETATION. 89 to a bill payable after date : Forster v. Mackreth, L. K. ^ 13, '2 Ex. 163 (1867). -^ — The above rule as to a bill dated on Sunday, is that of onLuuiay. the Imperial Act and also of the English law before the Act. But if a bill were given in pursuance of a contract declared by 29 Car. 2, c. 7, to be illegal, as being made on a Sunday in the course of a man's ordinary calling, it would be void as between the immediate parties, and as to any person who takes it with notice: Begbie v. Levi, 1 C. & J. 182 (1830). The fact of its being dated on Sunday would not be such notice. The above Act of Charles II. is in force in some of the provinces ; and in several of the provinces, similar Acts have been passed. See R. S. 0. c. 203 ; R. S. Q. Art. 3498 ; R. S. N. B. Tit. 39, c. 144, s 2; 20 Geo. 3, (P. E. I.) c. 3. The words " or other non-juridical day," are not in the Imperial Act, and were not in the bill but were added in the Senate to remove possible doubts : Senate Debates, 1890, p. 463. A note void as between the immediate parties on account of its being a Sunday transaction, would be valid in the hands of a holder in due course. ILLUSTRATIONS. 1. A note made on Sunday in payment of <,'oo(ls sold on tljat day is void as between the original parties, hut not as against an indorsee for value and without notice : Houliston V. Parsons, U. C. Q. B. OHl (IH.Vi) ; Crombie v. Overholtzer, 11 U. C. Q. B. 55 (1858). 2. A promissory note dated on Sunday given in payment of a horse purchased on that day, is null and void: Cote v. Lemieux, !> L. C. R. 221 (1859). 8. A promissory note made on Sunday is valid : Kearney v. Kinch, 7 L. C. J. 81 (1868). ^30 § 13. BILLS OF EXCHANOE 4. An indorsee may recover against the acceptor of a bill dated on Sunday : Begbie v. Levi, 1 Cr. & J. 180 (1880). 5. A bill made and delivered on Sunday is void in most of the United States : Randolph, i j 225, 1790. 14. Where a bill is not payable on demand, the Conii)iita- tioii of payment, day on which it falls due is determined as fol- lows : — Days of grace. Non-jiiri- ilinal dav> (n.) Three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace : Provided that — (1.) Whenever the last day of grace falls on a legal holiday or non-juridical day in the Province where any such bill is payable, then the day next following, not being a legal holiday or non-juridical day in such Province, shall be the last day of grace: Imp. Act, s. 14 (1); R. S. C. c. 128, s. 2; C. C. 230G. The first part of this sub-section is taken verbatim from the Imperial Act ; its effect, however, is different. There, bills payable at sight are payable on demand by section 10, so that they are not entitled to days of grace. In Canada, they fall under the rule in clause (a). The proviso is taken from R. S. C. c. 123, s. 2, and differs raaterially from the corresponding rule in England. There when the last day of grace falls on Sunday, Christmas Day, Good Friday, or a public fast or thanksgiving day, it is payable on the preceding business day, except that when the last day of grace is a bank holiday other than Christmas or Good Friday, or when the last day of grace is a Sunday, and the on t I 91 14. FOHM AND INTKBPRETATION. second day of grace is a bank holiday, the bill is payable on the succeeding business day. This sub-section applies only to bills payable in Canada. Those payable elsewhere are governed as to their due date by the law of the place where they are payable : section 71, 2 (e). In the United States, as a general rule, if a bill payable without gnice falls due on a Sunday or legal holiday it is not payable until the next regular business day ; but if payable with grace and the last day of grace falls on a Sunday or holiday, it is payable on the day preceding : 1 Daniel, § 627. In France a note maturing on a holiday is payable the day before : Code de Com. Art. 134. '2. In all matters relating to bills of exchange wiiatsimii the following and no other shall be observed as^"'" legal holidays or non-juridical days, that is to say: ((7.) In all the Provinces of Canada, except the 1,*;.^,*?/, Province of Quebec — Sundays ; New Year's Day; Good Friday ; Easter Monday ; Christinas Day; The birthday (or tlie day fixed by proclamation for the celebration of the birthday) of the reigning Sovereign ; and if such birthday is a Sunday, then the following day ; The first day of July (Dominion Day), and if that day is a Sunday, then the second day of July as the same holiday ; m luces except yneliec. 1 92 BILLS OF EXCHANGE 8 14. In Quebec. Any day appointed by proclamation for a public holiday, or for a general fast, or a general thanks- giving throughout Canada; and the day next follow- ing New Year's Day and Christmas Day, when those days respectively fall on Sunday; (i.) And in the Province of Quebec the said days, and also — The Epiphany ; (Jan. 6th.) The x\nnunciation ; (March 25th.) The Ascension ; (Movable.) Corpus Christi ; " St. Peter and St. Paul's Day; (June 24th.) All Saints' Day; (Nov. 1st.) Conception Day; (Dec. 8th.) (c.) And also, in any one of the Provinces of .... ^ Canada, any day appointed by proclamation of the ^*^' ^*1 Lieutenant Governor of such Province for a public ' ' . . . '^ '""^^ holiday, or for a fast or thanksgiving within the same, or being a non-juridical day by virtue of a statute of such Province: R. S. C. c. 123, s. 3. "Province" includes the North-West Territories and the district of Keewatin ; and " Lieutenant Governor " includes administrator : R. S. C. c. 1, s, 7, (9) and (13). The above list increases the number of holidays before the Act in two particulars : — 1st, in making Monday a holi- day when the Queen's birthday falls on Sunday ; and 2nd, in making every provincial non-juridical day a holiday in j that province. j|| The holidays on bills and notes in England are Sundays, ;||l Christmas Day, Good Friday, any public fast or thanks- In every Trovince. ff* A^mJU^ «w~ when tiuu' 'i begins to t. run. ■f t "i ■is 94 BILLS OF EXCHANGE 5} 14. date of the aceepfeance if the bill is accepted, and "~from the date of noting or protest if the bill is noted or protested for non-acceptance, or for non- delivery: Imp. Act, s. 14 (3). This Bub-section also reproduces the old law : Campbell V. French, 6 T. R. 200 (1795). A bill need not be noted or protested for non-acceptance, if the drawee do not forthwith accept on its presentment ; but if not accepted on that day or within two days thereafter, it must be treated as dis- honored or the holder will lose his recourse against the drawer and indorsers : section 42. A bill is protested for non-delivery when the drawee to whom it has been pre- sented wrongly detains it, and refuses either to accept or return it : section 51, s-s. 8. When a bill, payable after sight, is dishonoured and subsequently accepted supra pro- test, the time runs from the date of protesting for non- acceptance and not from the date of acceptance : section 64, s-s. 5. MoiithB. 5. Xhe term " Month " in a bill means the calendar month: Imp. Act, s. 14 (4). This rule has always been followed in mercantile con- tracts, even when at common law and in Statutes it meant a lunar month : Reg. v. Chawton, 1 Q. B. 247 (1841) ; Webb V. Fairmaner, 3 M. & W. 473 (1838); Hart v. Middleton, 2 C. & K. 10 (1845). In England the change was not made in the interpretation of Statutes until 1850. In Canada it was made in 1849. Ueckoning of time. 0. Every bill which is made payable at a month or months after date becomes due on the same numberod day of the month in which it is made payable as the day on which it is dated — unless FORM AND INTERPRETATION. 95 there is no such day in the month in which it is 5^ 14. made payable, in which case it becomes due on the last day of that month — with the addition in all cases, of the days of grace. K. S. C. c. 123, s. 1. This sub-section is not in the Imperial Act, but it corresponds with the English usage: Chalmers, p. 35; also with that of the United States : 1 Daniel, § 624. When enacted in Canada in 1872, the preamble of the Act stated that doubts existed on the point : 85 Vict. c. 10. The last clause of the sub-section as found in the present Act differs from that in the previous Acts which read : " with the addition, in all cases, of the days of grace allowed by law." By section 14 days of grace are only allowed " where the bill itself does not otherwise provide." Notwithstanding the clause as it now stands says that they shall be allowed " in all cases," it is hardly to be pre- sumed that it would be held to appljr, say to a bill made at a month after date " without grace." The rule will some- times make bills of different dates on their face having an equal time to run, mature on the same day. For instance, four bills dated respectively, December 28th, 29th, 30th, and 31st, 1890, payable two months from date, would fall due on the 3rd of March, 1891. If made on the same dates in 1891, the first would fall due on the 2nd of March and the other three on the 3rd of March, 189^, on account of 1892 being a leap year. " Days of Grace." — What was at first a real grace or indulgence granted for the payment of foreign bills subse- quently passed into 9. right. Later it was extended to inland bills, and finally by the Statute of Anne (1704) pro- missory notes were placed on the same footing. It was held in Wiffen v. Roberts, 1 Esp- 262 (1795), that presentment on the second day was invalid. In England, the United ■n 90 BILLS OF EXCHANGE S : -|i 14. States, and Canada, the authorities agreed that days of grace did not apply to bills payable on demand, or those without specification of time, or those expressly payable without grace. The only difference has been with respect to bills payable at sight. For the law as to these, see the notes on section 10. In France, days of grace were abolishea by the Code de Commerce, Art. 135. Other European countries have done likewise, and a similar pro- posal was made in the English Parliament in 1882, but not adopted. The perpetuation of this practice after the necessity for it has long since disappeared, seems to be at variance with the precision and punctuality that char- acterize modern commercial transactions. Where a bill is payable by instalments days of grace are allowed on each instalment: Oridge v. Sherborne, 11 M. & W. 374 (1843). The allowance of grace in the United States is limited to three days as in England, except that in some States it has been varied by Statute, and in some localities modi- fied by a well-established usage. A note or bill dated January 31st, payable " without grace," one month after date, falls due February 28th : Roehner v. Knickerbocker Life Ass. Co., 63 N. Y. 160(1875). The following expressions in bills have been held to be a sufficient indication that days of grace were not to be allowed, " without grace," " no grace," and " fixed." But a memorandum of the due date in the margin is not sufficient. Non-negotiable notes not payable on demand are entitled to days of grace : Smith v. Kendall, 6 T. R. 123 (1794). A note, payable " on demand, at sight," was held to be a sight bill and entitled to days of grace : Dixon v. Nuttall, 1 C. M. & R. 307 (1834). (a) I ^iie hold FORM AND INTERPRETATION. 97 15. The drawer of a bill and any indorser may § 15. insert therein the name of a person to whom the case of holder may resort in ease of need, that is to say, in case the bill is dishonored by non-acceptance or non-payment. Snch person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not, as he thinks fit. Imp. Act, s. 15. This is given by Chalmers as new law. He has refer- ence probably to the last sentence which settles a point that before the Act had not been decided in England. According to Pothier (Chaiij^'e, No. 187) it had been a disputed point in France whether it was obligatory on the holder to present a bill to the referee in the event of its being dishonored by the drawee. The Civil Code of Quebec made it compulsory. If the bill be unaccepted, and there be a drawee an besoin (referee in case of need), present- ment must be made in like manner to him also: Art. 2306. " In modern France if the drawee au besoin be named by the drawer, the bill, if dishonored must be pre- sented to him ; if he be named by an indorser it is at the option of the holder": Nouguier §§ 249, 250. Before a bill is presented to the referee in case of need for payment it must have been protested for non-payment : section 66 ; or at least have been noted for non-payment : section 92. 16. The drawer of a bill, and any indorser, mav <>i.'tionai insert therein an express stipulation — """ ' ' (a) Negativing or limiting his own liability to the holder ; (b) Waiving, as regards himself, some or all of the holder's duties. Imp. Act., s. 16. m'c.b.b.a. — 7 tioiis !)>• «1 rawer 'or indorser. 98 BILLS OF KXCHANOE jl6. Limiting' liRliility. ■x~ * t-. Waiving holder'fl diitiee. The ordinary liability of the drawer to the holder IB that if the bill be dishonored and due notice given h& will compensate the latter : section 65. He is in a sense after acceptance surety for the acceptor. The ordinary liability of an indorser to the holder is similar ; and he is in the nature of u new drawer : section 55, s-s. 2. The drawer may stipulate that he shall not be liable on the bill,, and then the holder must look alone to the acceptor, and to any indorser who may be liable lo him. Or the drawer may limit his liability as to amount or otherwise, and any indorser may do the same. In practice it is not common for drawers to make such a stipulation ; indorsers fre- quently do so. The form in which the latter generally negative liability is by writing before their indorsement the words " sana recount," or " without recourse." For all practical purposes an indorsement " without recourse " may be placed upon the same footing as a note payable ta bearer or transferred by delivery. The party so making the transfer does not thereby incur the obligation or responsi- bility of an indorser : Dumont v. Williamson, 2 U. C. L. J. N. S. 219 (1866); Goupy v. Harden, 7 Taunt. 16a (1816) ; Rice v. Stearns, 8 Mass. 224 (1807); Ticonic Bank v. Smiley, 27 Me. 225 (1847) ; Harley v. Falconer, 32 Ala. 636 (1858); Hannum v. Richardson, 48 Vt. 508 (1875). The duties of a holder of a bill to a drawer or indorser are to present it for acceptance and payment, or for payment only, according to its tenor, and in case of dishonor to give due notice to the drawer and indorsers, as provided in sections 39 to 52 inclusive. The drawer or any indorser may relieve the holder from these obligations. The usual form of effecting this is by usiug the words " return without protest," "protest waived," or " notice of dishonor waived." In the United States it has been held that where the waiver is embodied in the instrument itself, it enters into the contract of every party who signs it: 'ill. , \Vh( lire. FORM AND INTERPRETATION '""ties ■• as regarle h,m,er ^^ "'' ""■' "' "'« '">'<""•« by the drawee of his Z ll '" ^^« «>f("ification,^....nit,o.. ^i'-Hwer: I,.p. Act, s. 17 (j; *" '^^^ ^^•^-- ^^^ the •"•■^'••^'- When the drawee writ . i • "elivers i. or givea " ielt beoo^r,? ™ "" ""' "»<• "«' IS irrevocable.- section o,T"'""''P""- ""'"'i^ except the drawee or an authonV»!' °"° "'" """P' " "11 'n case of need, or an Z'ZTr T'' "'"" "-^ «'<•'«« "■"J 64. Before the aCJ i ''°"'"- '^i'""' U a»oep,„nee ,„ he s.^,ed by the'" "' '" '^■""'"-^ »° "ityin other reepectsas wm V""™;- «'-« "»» "l^o '■lustrations given below. ''™ '""" '"""^ °f the In some instances where n l,ni • j of a corporation it i« freoltlv dffi T" ""^ "-^ °«cer 'ho drawee is the cor no In ^ ^™" '" ''oo'de whether A« will be seen fromle ^t^ t "*"'' '"''■■"•''"ally' 'ondeney ,,as been to I th offi""'™"™' '«'"- "« "'0 maker "f a promissorvno e „ ,"'' ""■'™"">' "aWe. 'Wll. Tie d ' ' ■""■'■''P™''' '0 '•'o '■y officers eoXr "'?•"'"« '™'"-0'^ „,, ^y -s readily PC „~;^'''? "'»' P^"""-^ "" 'fforu,ce arises We yTol, h '" ,""' ""'' "' >""- «-'">" that it is the drawee j;;'': '"'' "' «'o Prosent „. Where a bill ie „.,, reslltr""^"""""- '«-' as though ad u to a,? fn" " '" ""^ '""o - • a to all the partners, and the: !)!) 100 BILLS OF EXCHANQB § 17. signature of the firm's name by a partner or agent is equivalent to his signing the names of all the partners : section 23 (b). The liability of the acceptor is set out in section 54. It will be borne in mind that the provisions of this and the following sections apply only to acceptances in Canada. By section 71 the validity of the form of an acceptance is determined by the law of the country where it takes place. ILLUSTRATIONS. 1. Upon a bill addressed to " P. 0. De Latre, Pres. N. I), it H. Co.", and accepted thus,— " Accepted P. C. De Latro, Pres. N. 1). &, H. Co." the acceptor was held personally liable to the payees : Bank of Montreal v. De Latre, .5 U. C. Q. B. 8G2 (1H49). 2. Defendant accepted a bill drawn upon him as treasurer of the "Wolfe Island Railway and Canal Co. thuj, — " Accepted, W. A. Geddes. Treas. W. I. R. »t C. Co " and affixed the com- pany's seal. Held, that he was personally liable : Foster v. Geddes, 14 U. C. Q. B. 289 (IHSO). 8. Upon a bill drawn by the secretary of a company upon its president and accepted thus, — " Accepted, Geo. Macbeth, President," both were held personally liable : Bank of Montreal v. Smart, 10 U. C. C. P. 15 (18(51). 4. On a bill addressed to " -Taines Glass, Sec. R. G. M. Co." and accepted thus, — " Accepted, the R. (i. M. Co. per .Tas. Glass, Sec." held that the secretary was not the acceptor or personally hable: Robertson v. Glass, 20 U. C. C. P. 250 (1809). 6. A bill was addressed to " M. H. Taylor, Tr. C. S. Ry. Co." and accepted thus, — " Accepted, M. H. Taylor, Tr." Held, that he was personally liable as acceptor to an indorsee who took it as the bill of the company : Laing v. Taylor, 20 U. C. C. P. 410 (1870). 6. A bill address^id '• to the Pres. Midland Railway " was accepted thus, — " For the Midland Railway of Canada, accepted, H. Bead, Sec, Geo. A. Cox, President " Held, that the presi- FORM AND INTERPRETATION. 101 3th, lass, lallv (lent was personally liable as acceptor : Madden v. Cox, 5 Ont. A. R. 478 (1880). 7. A bill addressed to " M. »•« McQ." intended for M. McQ. it Co. was accepted by the manager of the latter in the name of " M. X' McQ." The firm of M. McQ. it Co. were held not liable as acceptors : Quebec Bank v. Miller, H Man. L. R. 17 (1885). 8. Where a person to whom a bill is not addressed writes an acceptance upon it (not as acceptor for honor) he is not liable as an acceptor : -Jackson v. Hudson, 2 Camp. 447 (1810); Polhill V. Walter, H B. Sc Ad. 114 (1882); Davis v. Clarke, 6 Q. B. 10 (1844); Steele v. McKinlay, 5 App. Cas. 7r,4 (1880). 9. A bill addressed to the " Directors of the B. Co." is accepted by two directors and the manager. The latter is not liable as an acceptor: Bult v. Morrell, 12 A. 6c K. 745 (1840). 10. A bill :?ddressed to a firm is accepted by a partner in his own name. He is personally liable as an acceptor : Owen v. Von Uster, 10 C. B. 818 (1850). if he accept in the firm name and add his own it does not make him separately liable to an indorsee: rp Barnard, .82 Cli. D. 447 (188()). 11. A bill addressed to a partner is accepted by him in the firm name. He is personally liable, as the firm name is a short form of the partners' names: NichoUs v. Diamond, 9 Ex. 154 (1858). 12. A bill is addressed to the S. S. I*. Co., the proper name being the S. S. P. Co., Limited. It is accepted by " .1. M., Sec. 10 the Co." This is not the acceptance of the company, but imder the Companies' Act, .T. M. is personally liable : Penrose v. Martyr, E. B. & E. 499 (1858); Atkins v. Wardle, 58 L. •). Q. B. :!77 (1889). 13. A bill addressed " to the joint managers of the Royal M. M. Association," is accepted thus, — " Accepted, .T. J., W. S., as joint managers of the Royal M. M. Association." Held, that they were personally liable as acceptors : Jones v. .Jackson, 22 li. T. N. 8. 828 (1870). 17. 102 BILLS OF EXCHANGE !;j 27. !'*• ^ "^'^^ addressed to the '* B. Co." is accepted thus, — '* J. S. and H. T., directors of the B. Co." This is an acceptance by the company and not by the directors personally : Okell v. Charles, 34 L. T. N. S. 822 (1870). 15. A bill addressed to ".1. B., agent of the L. Co." is accepted thus, — "Accepted on behalf of the company. — J. B." He is personally liable as acceptor : Herald v. Connah, 34 L. T. N. S. 885 (187()) ; Mare v. Charles, 5 E. & B. 978 (1856). 16. A bill was drawn on a firm in liquidation, and the agent who was winding it up accepted it for his own purposes, in the name of one of the former partners, and in his own. Held, that the former partner was not liable : Odell v. Cormack, 19 Q. B. D. 223 (1887). oV'.lciei'r '^- ^^^ Hcceptaiice is invalid unless it complies taiico. with the following conditions, namely : — {a.) It must be written on the bill and signed by the drawee. The mere signature of the drawee without additional words is suthcient ; {h.) It must not express that the drawee will perform his promise by any other means than the payment of money : Imp. Act, s. 17, (2). (a) " According to the law merchant, an acceptance may be (1) expressed in words, or (2) implied from the conduct of the drawee. (3) It may be verbal or written. (4) It may be in writing on the bill itself or on a separate paper. (5) It may be before the bill is drawn or afterwards. Acceptance by telegram has been held sufficient ": Daniel, § 496. In nearly all countries these provisions have been restricted by statute. In writing. It was held in England that the Statute 3 & 4 Anne, c. 9, which was intended to require a written acceptance of inland bills had not that effect: Wilkinson v. Lutwidge, 1 FORM AND INTERPRETATION. 103 rill Str. 648 (1726) ; Lumley v. Palmer, 2 Str. 1000 (1735); § 17. Pillaus V. Van Microp, 3 Burr. 1663 (1765). The Act 1 & 2 Geo. 4, c. 78, was passed to make a written acceptance necessary in such cases, and the Mercantile Amendment Act, 1856, 19 & 20 Vict, c. 97, s. 6, required an acceptance on any bill, foreign or inland, to be in writing and signed by the drawee. It was held in Hindhaugli v. Blakey, 3 C. P. D. 136 (1878) that the signature alone of the acceptor was not sufficient, and, the Bills of Exchange Act, 1878, 41 il' 42 Vict. c. 13, was passed to declare the mere signa- ture sufficient. In Lower Canada a parol acceptance was formerly held to be sufficient : Lagueux v. Everett, 1 Rev. de Leg. 510 (1817) ; Jones v. Goudie, 2 Rev. de Leg. 334 (1820). The Act of 1849 required an acceptance to be in writing on the bill, and this was subsequently embodied in the Civil Code, Art. 2292. The same law was introduced into Upper Canada by 7 Wm. 4, c. 5 ; into Nova Scotia by 28 Vict. c. 10 ; into New Brunswick by 6 Wm. 4, c. 49 ; and into Prince Edward Island, by 27 Vict. c. 6. These various provisions were consolidated and made applicable to the whole Dominion in section 4 of chapter 123 of the Revised Statutes of Canada. It is in effect reproduced in the first part of the above clause which says, " It must be written on the bill." As to what is a writing, and what is recognized as a signature, see notes on section 3, ante pp. 36 and 39. The acceptance and signature of the drawee are usually where ou Avritten across the face of the bill ; but its direction and position are immaterial, provided it appear that it was meant to be an acceptance. It may be below the drawee's name or above it, and parallel to it, or it may even be on the back of the bill : Young v. Glover, 3 Jur. N. S. 687 0857) ; 1 Daniel § 498. bill. 36 104 BILLS OF EXOHANOB § 17. Hource of law. MuBt pay in uioney. The whole clause is copied from section 17 of the^ Imperial Act, the latter part, relating to the signature of the drawee, having been taken from the Mercantile Amend- ment Act, 1856, and the Bills of Exchange Act, 1878, as stated above. These Statutes were not in force in any part of Canada, except the Act of 1856 in Manitoba, British Columbia, and the North-west Territories, having been introduced there as part of the law of England, as men- tioned in the introduction. However, the various provincial statutes above mentioned were very similar to the Imperial Act, 1 & 2 Geo. 4, c. 78, and it was held in England that the signature alone of the drawee on the bill was a sufficient acceptance : Leslie v. Hastings, 1 M. & Rob. 119 (1831). In New Brunswick, under the Act requiring an accept- ance to be in writing, a bill was drawn upon a bank payable in three instalments. When the first instalment became due, the cashier paid it, and indorsed on the bill,. " Paid on the within $741, Aug. 12, 1861." This was held to be an acceptance for the remaining instalments : Berton V. Central Bank, 10 N. B. (5 Allen), 403 (1863). This would not be an acceptance under the present Act for want of a signature. In some of the United States the old common law rule of a verbal acceptance still prevails. (b) A bill may be varied in certain respects by the acceptance : section 19. But the drawee does not become an acceptor if he proposes to satisfy the bill in anything except money. This was the old law. As to what is money, see notes on section 8, ante p. 41. An acceptance to pay by anoth. bill is not an accept- tance: Bussell v. Phillips, 14 Q. B. 891 (1850). A Promise to Accept is not an acceptance. The drawee who gives such a promise may be held liable on his con- FORM AND INTERPRETATION. 105 I rule the tome fling Iney, ftept- iwee Icon-^ tract or by estoppel, but not as an acceptor. So if what would formerly have been acceptance is written elsewhere than on the bill : See Bank of Montreal v. Thomas, Ifi 0. R. 503 (1888); Torrance v. Bank of British North America, 17 L. C. J. 185 ; L. R. 5 P. C. 247 (1873) ; Duns- paugh V. Molsons Bank, 23 L. C. J. 57 (1878) ; Maritime Bank v. Union Bank, M. L. R. 4 S. C. 244 (1888) ; Coolidge V. Payson, 2 Wheaton o6 (1817); Ilsley v. Jones, 12 Gray 260 (1868); Riggs v. Lindsay, 7 Cranch (U.S.) 500(1813). A verbal promise to accept was insufticient under the old law, when a verbal acceptance was binding : Johnson V. CoUings, 1 East 98 (1800) ; Bank of Ireland v. Archer, 11 M. & W. 383 (1843) ; Kennedy v. Geddes, 8 Porter (Ala.) 268 (1839). 3. Where in a bill the drawee is wron^dy desig- nated or his name is misspelt, he may accept the bill as therein described, adding, if he thinks fit, his proper signature, or he may accept by his proper signature. This sub-section is not in the Imperial Act, but the same principle as to a payee or indorsee is found in section 82, s-s. 2, and it is in harmony with commercial usage. It was inserted in the bill at the suggestion of the Toronto bankers : Commons Debates, 1890, p. 109. When section 32 was under consideration in the Senate, a member'of that body suggested that the words, "if he. thinks fit" should be omitted, on the ground that if a man adopted a wrongful designation or name that was not his own, he should be compelled to do so over his proper signature. The suggestion was adopted, and the words struck out : Senate Debates, 1890, p. 572. It was apparently not observed that a like expression was used in this section. We have consequently the anomaly that it is optional with N> 17. iiiiiiit' for ilri 106 BILLS OF EXCHANOE ^ 17, a drawee to add his proper signature, but compulsory on a payee or indorsee. Time (or accej)- taiice. Acceiv taiice after ^iHliouor. 18. A bill may be accepted — (a.) Before it has been signed by the drawer, or while otherwise incomplete ; (h.) When it is overdue, or after it has been dishonored by a previous refusal to accept, or by non-payment : Imp. Act, s. 18, (1) (2). " (rt.) " The acceptance may be upon a blank paper, and if delivered to be filled up as a bill it is binding, and any other material particular in respect to which the bill may be incomplete, the person in possession has a prima facie authority to supply in any way he thinks fit : section 20. By section 88 this is one of the sections not applicable to a promissory note. The signing of an incomplete note by the maker is however covered by the rule laid down in section 20, which does apply to promissory notes. For illustrations of the foregoing see the notes to section 20. " (b.) " A bill accepted when overdue is payable on demand : section 10, s-s. 2. After a bill has been refused acceptance, and notice of dishonor has been given, the holder may apply to the referee in case of need if there be one named in the bill : section 16 ; or it may be accepted for honor by a third person : section 64 ; or the drawer himself may change his mind and accept : Wynne v. Raikes, 5 East 514 (1804). If he should do so, the date from which time should run is fixed by the next sub- section. 2. When a bill payable at sight or after sight is dishonored by non-acceptance, and the drawee !^^ FOKM AND INTERl'RBTATION. 107 le on [fused the fere be lepted rawer le V. date Bub- thtis iwee subsequently accepts it, the holder, in the absence § 18. of any dififerent aj,'reenient, is entitled to have the bill accepted as of the date of first presentment to the drawee for acceptance. Imp. Act, s. 18, (8); 54-/55 Vict. c. 17, s. 8. This sub-section in the Act of 1890 was copied verbatim from the Imperial Act which does not contain the words " at sight or " in the first line. It was another instance of the omission of the change necessary to make the Act consistent with the decision to continue to allow days of grace on sight bills. These words were added by the amending Act of 1891, thus putting all bills payable at a certain time after acceptance on the same footing. This sub-section is new law, and is designed to place all parties in the same position as if the bill had been accepted when first presented, or as if accepted by a referee in case of need or by an acceptor for honor : section 66. The date of the first presentment, notwithstanding the words of the Act will probably be held to be fixed by the date of the protest for non-acceptance, which may be two days later than the actual first presentment : section 42. If the holder took an acceptance of a later date, it would be a qualified acceptance and he would do so at his own risk : section 44. 19. An acceptance is either (a) «^(»neral, or (/>) General iiualified : a i^eneral acceptance assents without filed 'acceV (jiialitication to the order of the drawer; a qualified]^ acceptance in express terms varies the effect of the l)ill as drawn: Imp. Act, s. 19 (1). The usual way of accepting a bill generally, is for the drawee simply to write his name across the face of the bill with the word " accepted," adding the date if it be payable 108 BILLS OF EXCHANGE § 19. ^^ ^^ ^^^^i* sight. It is sufficient if he simply sign his name : section 17. He may also name a particular speci- fied place of payment as provided in the next sub-section without making his acceptance a qualified one. The definitions of a general and a qualified acceptance as given above are taken from the Imperial Act without change, but the effect of the change made in the next sub- section and in sections 45 and 62 is to materially change the law. The holder of a bill may refuse to take a qualified acceptance, and if he does not obtam a general acceptance he may treat the bill as dishonored by non-acceptance : section 44. An acceptance will be construed as a general one wherever practicable, and a memorandum of a wrong due date in a bill was held not to vary its effect or to be a qualified acceptance, but that anything in an acceptance contrary to the tenor of the bill should be in the clearest language: Fanshawe v. Peet, 26 L. J. N. S. 314 Ex. (1857). A bill of exchange being drawn by L. D. Flipo, payable " to order L. D. Flipo," the drawees erased the word "order," and accepted the bill " in favor of L. D. Flipo only, pay- able at the Alliance Bank, London." In an action upon the bill by the indorsees for value against the acceptors it was held by the English Court of Appeal, reversing the decision of the lower court, that the acceptance did not vary the effect of the bill as drawn, and that it was a general acceptance of a negotiable bill, and the action was maintainable : Decroix v. Meyer, 25 Q. B. D. 343 (1890). The decision was affirmed by the House of Lords : [1891] A. C. 520. If a qualified acceptance is taken, it discharges the drawer and indorsers, if they have not authorized it, or disapprove on receiving notice : section 44. FORM AND INTERPRETATION. 109 2. Ill particular, an acceptance is qnalitied which § 19. is — (a.) Conditional, that is to say, which makes ^,!;,\\',','""' payment by the acceptor dependent on the fultil-""'" ment of a condition therein stated; but an accep-l tance to pay at a particular specitied place is not • conditional or (|ualitied. (/>.) Partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn ; (c.) Qualified as to time; (V/.) The acceptance of some one or more of the drawees, but not of all. Imp. ActJ s. 11) (2). This sub-section is taken chiefly from section 19 of the Iinperial Act, but some changes have been made, the full trt'ect of which it may be ditKcult to foretell, when taken in connection with the changes made in sections 45 and 52. In the Imperial Act, clause (a) ends with the word "stated," and the following appears among the qualified acceptances, "(c) local, that is to say, an acceptance to pay only at a specified place. An acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only and not else- where." Prior to 1820 it was a point much disputed in England, At imrticu- whether a bill made or accepted payable at a particular [)Iace, required to be presented there in order to charge the the acceptor, drawer and indorsers. In Rowe v. Young, 2 l'>. & B. 165 (1820) it was decided by the House of Lords that such an acceptance was a qualified acceptance, 1 tndering it necessary in an action against the acceptor to luove presentment at such place. The practice of making y no BILLS OF EXCHANGE I , § 19. ^^1'b payable at a banker's had become general and was found to be a great convenience. If this were held to be a qualified acceptance it would require the assent of the drawer and indorsers. To overcome the effect of the decision in Rowe v. Young, the Act 1 & 2 Geo. 4, c. 78 was i passed, declaring an acceptance to pay at a particular I)lace a general acceptance, unless made payable there "only and not otherwise or elsewhere." Clause (c) of section 19 of the Imperial A^t above quoted is a reproduc- tion of this Act. A similar Act applicable also to promis- sory notes was passed in Upper Canada 1837 us 7 Wm. 4, c. 5. This was embodied in the Con. Stat. U. C. c. 42, as sections 5 and 6, and appears in chapter 123 of the Revised Statutes of Canada, 1886, as section 16, but remained applicable to Ontario alone, and was repealed by the present Act. For cases where bills and notes omitting the restrictive words were held to be payable generally, see Commercial Bank v. Johnston, 2 U. C. Q. B. 126 (1846), and Bank of U. C. v. Parsons, 3 U. C. Q. B. 383 (1847). On such a note payable in Scotland or the United States the holder could not recover the difference of exchange or the damage allowed on foreign notes : Wilson v. Aitkin, 5 U. C. C. P. 376 (1856); Meyer v. Hutchinson, 16 U. C. Q. B. 476 (1858); Hooker v. Leslie, 27 U. C. Q. B. 295 (1868). A clause to the same effect was made applicable to Lower Canada in 1849 by 12 Vict. c. 22, s. 7; but it was repealed the next year by 13 & 14 Vict. c. 23, and replaced by the following which subsequently appeared in the Civil Code as Art. 2307; " If a bill of exchange be made payable at any stated place, either by its original tenor or by a quali- fied acceptance, presentment must be made at such place." In Prince Edward Island an Act to the same same effect as 1 & 2 Geo. 4, c. 78 was passed, 27 Vict. c. 6. This was repealed by the Revised Statutes of Canada, 1886, Schedule A, p. 2274. FORM AND INTERPRETATION. Ill In the Canadian Bill as introduced in 1889, section 19 § X9. was identical with the Imperial Act. There was a strong 3^,~;7f;; expression of opinion against the principle of the Act 1 t!^ 2''*" Geo. 4, c. 78, especially against requiring the words "only and not otherwise or elsewhere," and when the Bill was introduced in 1890 the second sentence of clause (i) of the Imperial Act was omitted entirely. While the Bill was before the Senate it was further amended and put in its present form by omitting the whole of the original clause (c), and adding to clause (a) the words: "but an acceptance to pay at a particular specified place is not conditional or qualified." To appreciate the full eifect of this change the present section must be read in connection with sections 44, 45, and 52, and the reader is referred specially to section 45, s-s. 2 (d) (1), and to section 52, s-s. 2, and the notes on these sub-sections. The effect of the Canadian Act would appear to be this : When the drawer has not named a particular place of payment, the acceptor may name a place in his acceptance, and this will be a general acceptance which must be taken by the holder, and of which he need not give notice to the drawer or indorsers in order to hold them liable on the bill : section 44. Where a place of payment is specified either in the bill as originally drawn or in the acceptance, the bill must be presented there or the drawer and indorsers will be discharged : section 45. The acceptor is not discharged by the omission to present the bill for pay- ment on the day that it matures, but if he is sued before presentation the costs are in the discretion of the court : section 52, s-s. 2. A difficulty may possibly arise if the drawee should, by his acceptance, make the bill payable in another town. This would literally be within the words of the Act as " an acceptance to pay at a particular specified \ leaning' <>( lact) \ iia DILLS OF RXCHANOR X9, place," and being a general acceptance the bolder could ~ not refuBc it, or protest the bill for non-acceptance. It might be very inconvenient for the holder of a bill drawn upon a person in Toronto, if the latter could accept it payable at New York, Chicago or Winnipeg, and require the holder to present it there in order to bind the drawer and indorsers. Tlie Courts may possibly restrict the word "place" to a bank or other place in the town or locality which is given in the bill as the address of the drawee, and treat an acceptance in another town as a qualified accept- ance. There appears, however, to be nothing in the con- text or in the Act to require such a construction, and " place of payment" in section 45, s-s. 2 (d), (1) and (2), and in section 52 is distinguished from the address of the drawee as given in the bill. A few words limiting it to the town or locality where the drawee is addressed, or within a certain limited distance, would have removed all uncer- tainty. It was held in the State of New York that where a bill addressed to " E. C. H. of New York," was " accepted payable at the American Exchange Bank, Clayville Mills," which was in another county, it was a qualified acceptance: Walker v. Bank of N. Y., 13 Barb. 636 (1852) ; so also where a bill addressed A. Y. & Co., at Cobourg, Upper Canada, was accepted " payable at the Bank of Upper Canada, Port Hope ": Niagara District Bank v. Fairraan, 81 Barb. 403 (1860). If the bill as drawn specifies a particular place of payment, and the acceptance names a different one, this would be such a variance as would make the acceptance a qualified one : Rowe v. Young, 2 B. & B. 165 (1820). Conditional Acceptance.— A bill of exchange is an unconditional order to pay; but the acceptance may be conditional without destroying its validity. On the fulfilment of the condition it becomes absolute and the acceptor liable: Miln v. Prest, 4 Camp. 393 (1816). -\ (1744). 7. \\\ 'lizabaJ fOHM AND INTERPnETATION. Where the accoptanee mi » wii i. ,. «v.">y "nder In-ted States are said to be the . •''*"'' »'"' "-e "Cknowledge them. '° ""'^ countries which T<.«'^.owi„..reo,.„.pies„rc„„«„„aUocep..^^^^ «. Provided tbev aJjuIJ i,- «'-Ids, I Ma„. L. ^.t,":!',;':™ -™^'' "'»' su,„ . McLean v. ^ .s.lt m;;;;:/;;-' -" -«- «oods . «„,, ,. ,,,„,,^ „^«- As remitted, or: B.„b„r,v..i3se.,. strange,.,, ^' On condition tliat h u " ^- B. 891 (1850). * ''' '^"«'^^^^- Russell v. Ph|„ip,^ <'•) PartialAcceotanci. a i ■„ "«■ » part : Petit ,. Benson Cmfh "? '"' ""'""y «°««PW -epeanee, the drawer andSrser "> " '""" "''"■»«««'' 118 114 BILLS OF BXOHANOB §19. LiHt not exbauittive. Inahoatit inttrii- meiitB. give due notice of the partial dishonor : section 44, s-s. 2 ; ■ Pothier, Change, No. 49 ; Code de Commei<;e, Art. 124. (c.) Qualified acceptance as to time.— The acceptor may vary the time of payment named by the bill ; and if none be namrd he may fix a time and he *vill be bound by it: Walker v. Atwood, 11 Mod. 190 aV09) ; Russell v. Phillips, 14 Q. B. 891 (1850) ; Pothier, Change, No. 49. ( for $500, on which there was a blank space to the left of the word " five," whi^h the maker fraudulently filled up with the word " tv;enty," the indorser wac held liable for $2,500 to an innocent indorsee : Dorwin v. Thomson, 18 L. C. J. 2G2 (18GU). 11(> BILLS OF BXOIIANaB (■,. 20. S- A writing in the form of a note, which was written over the signature of the maker, given merely for the purpose of indi- cating hifl uddreHH, cannot he recovered on : Ford v. Auger, IK L. C. J. 2J)0 (1874). ((. Wliere a signature was ohtained OHtensihly for a receipt, and a note was written over it, tlie signer is not liable : Uanque Jacques Cartier v. lioscard, 18 Q. L. U. HI) (1HH«). 7. A. note, signed in blank and sent with instructions to be filled up for $115, was filled up for $4G1. Held, that the maker was liable for the full amount to a holder in due course : liank of Nova Scotia v. Lepage, M. L. R. « S. C. 821 (188»). K. A note payable to or order cannot he recovered by the person to whom it was given, either as payee or hearer, with- out inserting his name in the blank as payee : Mutual Safety Ins. Co. v. Porter, 7 N. H. (2 Allen) 280 (1H51). 0. A. indorsed a note for the acconnnodation of the maker on condition that B. should indorse also. The maker issued it without B.'s indorsement. Held, that a holder in due course could not recover from A.: Ontario liank v. (libson, 8 MT,n. L. U. 400 (1H86); 4 Man. L. U. 440 (1HH7). 10. A bill is drawn payable to or order. Any holder for value may write his own name in the blank and sue on the bill: Crutchly v. Mann, r» Taunt. fi2» (1H14). 11. A note is signed by one maker on condition that another sign as joint maker. The ))erson tu whom he gives it fills it up without the other signature and ncv^otiates it. A holder in d :e course cannot recover: Awde v. Dixun, K\. HiiU (1851). 12. Where a blank aceeptance was stolen from the desk of the signer and filled up, he wr» held not liable to a holder in due course : Haxendale v. Bennett, ii Q. B. I). 525 (187H). Wlmij til be niU» b!-;nk acceptance of his firm. It is subsequently negotiated in an incomplete state to a holder for value who completes it. The latter cannot recover on the bill: Hogarth v. Latham, 8 Q. B. D. 648 (1878). rORM AMD INTBRPRITATION. 119 5 A debtor gives his creditor a blank acceptance and dies. § 2O. The creditor may fill in his own name as drawer and payee and — recover from his debtor's estate : Garter v. White, 20 Ch. D. 225 (1882) ; 25 Ch. D. 660 (1888). 6. An acceptance is signed with £4 in the margin, but with the amount blank in the body of the bill. It is fraudulently tilled up for £40 and the margin altered to £40. The acceptor is liable to a holder in due course for £40 : Garrard v. Lewis, 10 Q. B. D. 80 (1882). 7. A bill without a date and payable " months after (late " was filled up with the date Sept. 24th, 1887, and made payable 18 months after date. Held that it was valid in the hands of a hona fide holder for value: Morgans v. Heskett, (! T. L. R. 102 (1890). 21. Every contract on a bill, whether it is the drawer's, the acceptor's or an indorser's, is incomplete and revocable, until deliver}' of the instrument in order to give effect thereto : Provided, that where an acceptance is written on a bill, and the drawee gives notice to, or according to the directions of, the person entitled to the bill that he h{»8 accepted it, the acceptance then becomes complete and irrevocable: Imp. Act, s. 21 (1). Delivery has been defined in section 2 as the transfer of possession, actual or constnictive, from one person to another ; and it is here used in that sense. The acceptance must bo in writing, but the notification may be either written or verbal. Delivery is necessary also to render the contract of the maker or indorser of a prcmissory note complete and irrevocable. " Delivery \% tha iinal step necessary to perfect the existence of any written contract; and, therefore, as long C'lmtniet not o(»ii- i>lete till delivi'iv. Rxcf ptloii. 120 BILLS OF EXCHANGE §21. as a bill or note remains in the hands of the drawer or maker it is a nullity. And even though it be placed by the drawer or maker in the hands of his agent for delivery, it is still undelivered so long as it remains in his hands, and may be recalled ": 1 Daniel, § 63. Is ' , \m ILLUSTRATIONS. 1. Where the secretary of a company, intending to {^ive a renewal note of the company, signed his name with the word " per " before it, leaving a space before his signature for tlie stamp of the company and sent it to the manager who signed the note but omitted to insert the company's name, and delivered it to the creditor, it was held, that the instrument never was perfected or delivered as a promissory note and the .secretary was not liable as maker : Brown v. Rowland, 15 Ont. A. R. 750 (1887). 2. Where a drawee has written his acceptance on the bill, but cancels it and returns it to tlie holder, who has it noted for non-acceptance, the drawer is not liable as an acceptor: Ben- tinck V. Dorrien, (5 East 199 (1H05). 8. Where a drawee, after writing \m acceptance on the bill, changes his mind, and instead of notifyini? the hohler or deliver- ing the bill, erancH his acceptance, he is not liable as an acceptor : <.'ox V. Troy, 6 U. .^ A. 474 (1822), 4. A debtor "• le a promissory note in fa, or of his creditor for the amount of his claim, but died before delivering it. If given to the creditor subsequently it is not a valid note : r»ro- magev. Lloyd, 1 Ex. 82 (1847). 5. A partner, who is also agent for a creditor of the nrm, indorses the firm's name on a bill, and places it among some jther papers of the creditor which lie has. This is a valid mdorsement by the firm and a delivery to the creditor : Lysaght V. Bryant, 9 C. B. 40 (IMiKM. 6. The drawee writes an acceptance on a bill left with him. ^pe holdej calls for it next day and is told it is mislaid. The FORM AND INTERPRETATION. 121 drawer hears that the drawee has failed and erases his acceptance. The following day he delivers the dishonored bill to the holder. This is not an acceptance : Bank of Van Diemen's Land v. Bank of Victoria, L. R. 8 P. C. .ViO (1H71). 7. By the delivery of a note to the trustee under a composi- tion deed, the creditor, who is the payee, acquires no property in it: Latter v. White, L. R. 5 H. L. 578 (1872). 8. A letter when posted becomes the property of the party to whom it is addressed. If it contains a bill this is a delivery: ^.r luirte Cot6, L. R. 9 Ch. 27 (1H78). '* A bill is specially indorsed and inclosed in a letter adit, ssed to the indorsee. It is placed in the office letter box of the indorser, but before posting or delivery is stolen by a clerk who forges an indorsement and negotiates it. The property in the bill remains in the indorser : Arnold v. Cheque Bank, 1 C. P. D. 584 (1870). 2. As between iniinediate parties, and us regards a remote party, other than a holder in dne course, the delivery — [a.) In order to be tactual must be made either by or under the authority of the party drawing, accepting or indorsing, as the case may be ; (h.) May be shown to have been conditional or lor a special purpose only, and not for the purpose of transferring the property in the bill ; But if the bill is in the hands of a holder in due roiirse, a valid delivery of the bill by all parties prior to him, so as to make them liable to him, is <()ilclusively presumed : 8. Where a bill is no longer in tlie possession of a party who has signed it as drawer, acceptor or § 21. KU(| ll'«Ltt ilcli- WIl.MIVHlid (lulivi'iy |ii-eHiiiiiiM) m I'riinii I'iti'ie evitleiioe 122 BILLS OF BXCRANOE § 21. indorser, a valid and unconditional delivery by him '~ is presumed until the contrary is proved. Imp. Act, 8. 21(2), (3). " Immediate parties" are those who have direct deal- ings with each other iu relation to a bill, such as drawer and acceptor, drawer and payee, indorser and next indorsee. A " remote party " taking a bit! incomplete or irregular on its face, or after maturity, or with notice of a defect, or without giving value is in no better position. For the definition of a " holder in due course," see section 29. Where a bill has been delivered conditionniiy or for a special purpose only, and tbe person wbo has so received it violates his trust, the owner may recover the bill or its amount from such person or any one who has taken it with notice : Goggerley v. Cutlibert, 5 B. & P. 170 (1806) ; Alsager v. Close, 10 M. & W.57G (1842) ; Muttyloll Seal v. Dent, 8 Moore P. C. 319 (1853) ; Arnold v. Cheque Bank, 1 C. P. D. 585 (1876) ; Biirson v. Huntington, 21 Mich. 415 (1870). Escrow. — A bill or note mny be delivered conditional!}', and upon the happening of the event or fulfilment of the condition, no further delivery is necessary. What was before a mere paper writing becomes a valid bill. In the case of a deed the cust'^dian must be a third party. In Bell V. Ingestre, 12 Q. B. 317 (1848), Lord Denman held that the same principle arpl'ed to indorsees who received bills as trustees. The death of the parties liable does not prevent the bill taking effect : Belden v. Carter, 4 Day 66 (1809) ; Giddings v. Giddings, 51 Vt. 227 (1878). " There is this distinction between negotiable and sealed instruments : If the custodian of the former betrays his trust, and passes off the negotiable instrument to a bona Me holder before maturity, and without notice, all parties FORM AHD INTBSPRBTATION. 123 srf bound ; but if the instrument be sealed, the rule Ih )j 21. otherwise ": 1 Daniel, § 68. A bill, complete in form, put into the hands of a third party as an escrow is not a valid bill, but a mere paper writing until the happening of the condition : Chandler v. Beckwith, 2 N. B. (Berton) 423 (1888). ILLUSTRATIONS. 1. The payee of a promissory note, after a writ of attachment had issued against him, for value indorsed it to a bona jule holder, before its maturity. Held, that the indorx/e had no title, as it had voated in the assignee before its indotHi ment or delivery : Jenks V. Doran, 5 Ont. A. R. 558 (1H80). (Hut would not the indorsee as a holder in due course, now be within the provisions of the last clause of sub-section 2 ?) 2. The payee of a note which was delivered to him condition- ally sues upon it. The maker may show that the condition was not complied with: Jefferies v. Austin, 1 Stra. 674 (1725). H. A bill was delivered by the acceptor to the drawer for a purpose for which it became unnecessary. The drawer indorsed it for value to a person who was aware he had no right to do so. The property in the bill remained in the acceptor: Evans v. Kymer, 1 B. & A. 528 (1880). 4. The payee of a bill gave it to a friend to get it discounted. The latter had to indorse it to get it discounted, and only received 11 part of the proceeds. The person who discounted it was aware of the facts. The payee could show the nature of the delivery and •ooover the balance of the proceeds : Bastable v. Poole, 1 C. M. & R. 110 (1886). The last clause of sub-section 2 and sub-section 3 afford PieHninp examples of the two kinds of presumptions of law, namely, conclusive and disputable as they are designated in the language of English law ; or legal presumptions and pre- sumptions jurt« et dejure, as they are called in the language of the civil law. "Conclusive presumptions of law are rules tUIIIH. 124 BILLS OF EXCHAMQEt 1^ liiilr 21, determining the quantity of evidence requisite for the sup- port of any particular averment which is not permitted to be overcome by any proof that the fact is otherwise. . They have been adopted by common consent, from motives of public policy, for the sake of greater certainty, and the promotion of peace and quiet in the community ; and there- fore it is, that all corroborating evidence is dispensed with> and all opposing evidence is forbidden": 1 Taylor, § 71. In disputable presumptions, the law "defines the nature and amount of the evidence which is sufficient to establish a prima facie case, and to throw the burden of proof on the other party ; and if no opposing evidence is offered, the jury are bound to lind in favor uf the presumption. A contrary verdict might be set aside as being against evidence": 1 Taylor, § 109. " Legal presumptions are those which are specially attached by law to certain facts. They exempt from making other proof those in whose favor they exist ; certain of them may be contradicted by other proof; others are presumptions juris et de jure and cannot be contra- dicted": C. C. Art. 1289. Capacity and Authority of Parties. Capacity of partied. Ah to cor- VoratioiiH. Provincial subject. 22. Capacity to incur liability as a party to a bill is co-extensive with capacity to contract : Provided, that nothing in this section shall enable a corporation to make itself liable as drawer, acceptor or indorser of a bill, unless it is competent to it so to do under the law for the time being in force relating to such corporation : Imp. Act, s. 22 Under the British North America Act, s. 92, s-s. 13, the local legislatures have the exclusive right under the CAPACITY AND AUTHORITY. 125 head of " civil rights," to legislate regarding the capacity ;^ 22- to contract, except as to corporations created by or under the authority of the Dominion Parliament, and they may be Hubject indirectly to Dominion legislation regarding Rome of the other subjects enumerated- in section !)1. The first sentence of this section, like the greater part of the Act, is taken without change from the Imperial Act. In England it could Lot give rise to any question, except as to con* tracts made abroad. Here it is open to question as to how far it would prevail, if it clashed with a provincial law on the subject. It would no doubt have effect to this extent at least, that no person having capacity to contract by provincial law is rendered incapable of contracting as to bills and notes by the present Act. The practical difticulty that will at once arise will be conflict or IfiWB. as to which provincial law is to govern where that of more than one province is to be applied. The law of Quebec as to capacity differs considerably from that of most of the other provinces, and the intimate commercial relations between that province and the others will soon bring these questions before the courts. The point to be determined in such cases, is whether the law of the domicile of the person, or the law of the place where the contract is made, or of the place where it is to be performed, is to control. The law in Quebec is explicit, and adopts the civil law rule in favor of the domicile. The Civil Code says : " Art. G. — An inhabitant of Lower Canada, as long as he retains his domicile therein, is governed by its laws respecting the status and capacity of persons." The law of the other provinces can hardly be said to be settled, as the question of the capacity to contract appears seldom to have come before the courts when there has been a con- Hict. Judging from analogy, the leaning appears to be towards the law of the domicile. In the United States, on the other band, the law of the place of the contract is ■^p IMAGE EVALUATION TEST TARGET (MT-3) /. k ^/, & 1.0 I.I 1.25 |50 '""== i^ IIIIIM !? I !." 1140 2.5 IIP 2.0 14 II 1.6 <- V <^ /: "^/ Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 ^w tf. 4. %" . '"W 6^ 126 BILLS OF BZOHAMOB n iiii i.. § 22. genei^aUy followed as to the capacity of the contracting parties : Story on Conflict of Laws, s. 102. In England the question does not seem to be authoritatively settled. " When the capacity of a person to act in any given way is questioned on the ground of his age, it is still perhaps uncertain whether the solution of the question will be referred in England to a personal law," that is to the law of the domicile : Westlake, p. 43. " The capacity to con- tract is regulated by the law of the domicile," per Hals- bury, C, in Cooper v. Cooper, 13 App. Cas. 99 (1888). In this case Lords Watson and Macnaghteu declared against the lex loci solutionis as regulating the capacity to contract, but expressed no clear opinion between the law of the domicile and the lex loci contractus, which happened to be the same. " When the capacity of a married woman to act in any given way is questioned on the ground of her coverture, it would seem that the choice between the lex loci contractus and her personal law, as deciding the ques- tion, should follow whatever may be laid down as to the similar choice when capacity is questioned on the ground of age": Westlake, p. 47. Hank It is provided by section 84 of the Bank Act, 53 Vict. depositors. * ./ c. 31, that any person although not qualified to enter into ordinary contracts may make deposits up to $500 and withdraw the money without the authority or assistance of any person or official. This would authorize the draw- ing of cheques by such disqualified persons. By section 16 of the Savings Bank Act, 53 Vict. c. 32, deposits may be made in Quebec by suoh persons to the amount of $2,000. The principal classes of persons without full capacity to contract are : I. Infants or minors. — As the age of majority through- out the Dominion, as in England, is fixed at 21, conflict will not arise as to these, except probably as to minors mp CAPACITY AMD AUTHORITY. 127 €mancipated under the law of Quebec by marriage, or by § 22. the Court, whereby they acquire a restricted right to con- tract : C. G. Arts. 814-322 ; or by engaging in trade when they are reputed of full age for all acts relating to such trade : Art. B23. A promise or ratification after majority to pay a debt or obligation contracted during minority, is only binding when in writing : C. C. Art. 1235 (2) ; E. S. 0. c. 123, 8. 6. 2. Idiots, lunatics and interdicted persons.— The rule in Quebec is that all acts subsequent to interdiction for imbeci- lity, madness, or insanity are null and void ; previous acts may be annulled if injurious : G. G. Arts. 334, 335. So of the acts of persons interdicted for prodigality and drunken- ness: G. G. Art.987. The contract of a lunatic or drunken man, who by reason of lunacy or drunkenness, is not capable of understanding its terms or forming a rational judgment of its effect on his interest, is not void, but only voidable at his option, and this only if his state is known to the other party : Pollock on Contract, p. 91. See Eob- ertson v. Kelly, 2 0. K. 163 (1883). 3. Married women.— The law of Quebec differs in this respect from that of the other provinces. The general rule there is that a wife cannot contract without the authoriza- tion of her husband. If she is separate as to property by marriage contract she may administer her own property : C. G. Art. 1422 ; or if she be granted by the court a separ- ation from bed and board : Art. 210 ; or even a separation as to property : Art. 177^ If she is a public trader she may bind herself without the authorization of her husband for all that relates to her commerce : Art. 179. A wife cannot bind her separate property in any contract with or for her husband : Art. 1301. So that if a wife gives a note or accepts a bill for her husband's debt, or indorses her husband's bill or note, it is a nullity. 128 BILLS OF EXCHANGE § 22. ^^ the other provinces the original rule was that of the common law. " Without authority from her husband, a wife cannot at the common law charge either him or herself by making, drawing, accepting, or indorsing nego- tiable instruments ": Byles, p. 71. In those provinces which have adopted the principle of the English Married Women's Property Act, 1882, the stringency of the common law rule is somewhat relaxed, and a married woman having separate property may by bill, note, or otherwise, bind the separate property which she then has, or which she may afterwards acquire, in all rnspects as if she were /erne sole. See "The Married Women's Property Act," K. S. 0. c. 132 ; R. S. N. S. c. 94 : C. S. Man. c. 65 ; N. W. Territories Act, R. S. C. c. 50 : Cons. Acts, B. C. c. 80. I m ILLUSTRATIONS. 1. A promissory note made by a married woman for a debt of her husband is not binding on her personally either at common law or mider the statutes. Where a married woman who has separate property contracts a debt, she is deemed in equity to have contracted it with reference to her separate property, and if she had power to dispose of that property, equity will make it liable for the payment of the debt : Lawson v. Laidlaw, 3 Ont. A. R. 77 (1878). See also Merchants' Bank v. Bell, 29 Grant, 418 (1881). These cases were prior to the passing of the Ontario Married Women's Property Act, 47 V. c. 19. 2. An infant gave his note for value and got it indorsed by his father who was of unsound mind, and who got no value for it. The holder was not aware of the condition oi the father. Held, that the father's estate was not liable : re James, 9 Ont. P. R. 88 (1881). 3. Defendant, a married woman, indorsed certain notes held by plaintiff and wrote him a letter that she had $38,000 worth of land in her own name and right. There was no evidence given at the trial as to when she was married or as to how the property OPACITY AND iUTHOBITY. 1?9 ws held for her. HeH tl,„, „ ' " 519(1887). ' ' ^'"■'*"- Gxraey, 19 Q. B. D. ^- C. J. 171 (1857), ovZZnTj **"''' "'<'»« "• B"«ult 1 0-)^ ;a.„er v^urrr^-i^;^:;/ ^- ^- ■'• "^ her h„sba:;:h:r:i:tVv:a°„rvir s^^^ her j„ta«, „.,„ 5 J-. C. J, 47 (1860). "''• ^*^«arer v. Compain, h«f ,^rrh t;t^i^ "r °" > »- -» ^^ Laohapelle, 7 L. C. J. 289 (ms) '"""■"''ed: Girouard v. of hJ- ,f„i'„7:^d ?nd::*'hXfo " '" ^^'^''^^ ■" '-» by her „ binding on her: Ch^T t'T''''"'"""'"''^ (1862). ^""'e' V. Duplessis, 6 L. c. J. 8i business is"°bL^;;g%'^ LT'm^" 'u " '"''"''' ^'^''- '"''her husband: Bea„bien%.V;s;n SaTc r';;;?:" "' "^ '"' 0- «™rn vir;sihr;r, "r '"-"'"'-■■ -'- «nd asked to be relie^d t 'h, t »" ' ''"^ P'-ded iesion , benefltted: Cartier v. Pelfe L , R r 4 ".Tf ' '"' ™» "»' '■"■ard, 20 L. C. J. 184 (1875, ^'*<'*' > ^^'^oher v. ' 12. The authorization nf l™n.i»sory note is sufficiently nL'T,"'?, """""" "» "lake a 180 ' DILLS OF EXOHANOB § 22. ^^* '^^^^ indorsement by a wife, separate as to property, of her husband's note given for goods sold and dehvorod and charged to him is null, although such goods may have contri- buted to her support : Ikuneau v. Barnes, 25 L. C. J. 245 (1880). 14. A promissory note, made by a wife separate as to property, jointly and severally with her husband, isjiull and of no etTect as regards the wife, such an obligation being prohibited by the terms of Art. 1801 C. C: Chr.pdelaine v. Vallee, M. L. R. 8S. C. 8H0 (1880). 15. A person is liable on a note given by him dur ng infancy, if, after coming of age, he promises to pay it : Fisher v. Jewett, 2 N. B. (lierton) 69 (1885). 16. A married woman is not liable on a note givea by her during her coverture: Sinclair v. Wakefield, 18 N. S. (1 R. & G.) 465 (IHHO). 17. Complete drunkenness, so that the party did not know what he was doing, held to be a good defence by an indorser against an indorsee who took with notice : Gore v. Gibson, 18 M. *t W. 628 (1845). 18. An infant 20 years and months old accepts a bill pay- able in six months. He ratifies the transaction on attain- ing his majority and the bill is negotiated. He is not liable on the bill : ex parte Kibble, L. R. 10 Ch. 878 (1876) ; 87 & 88 V. c. 62 (Imp ). 19. A person after coming of age accepts a bill for a debt contracted by him during infancy. He is liable to a holder in due course : Belfast lianking Co. v. Doherty, 4 Ir. L. R. Q. B. D. 124 (1879). 20. An infant trader cannot be adjudicated a bankrupt for debts contracted for trading purposes: ex parte Jones, 18 Ch. D. 109 (1881). 21. A lunatic while sane gave a note for a very large sum for a merely moral obligation. Held, that the payee was not 181 §22. . le on )8V. debt ler in fo.D. 3t for fcli.D. CAPACITY AND AUTHORITY. entitled to rank ou tlie lunatic's estate for the amount of the note: in re VVhitaker, 42 Ch. D. 119 (1889). 22. An infant cannot bind himself by the acceptance of a bill of exchange, even when it is given for necessaries supplied him. Such an acceptance is wholly void : in re Soltykoff, ex parte Margrett [1H91] 1 Q. li. 418. 4. Corporations. — Some corporations are given special authority to become parties to notes and bills by their charters, or by the general laws by which they are governed, in the case of others it is implied from the nature of their objects. " The rights which a corporation may exercise, besides those specially conferred by its title, or by the general laws applicable to its particular kind, are all those which are necessary to attain the object of its creation ; thus it may acquire, alienate, and possess pro- perty, sue and be sued, contract, incur obligations, and bind others in its favor": C. C. Art. 358. Formerly the right to become parties to bills and notes was almost restricted to commercial corporations; the modern ten- dency is to extend it to corporations generally. As to companies incorporated by special Act of the Dom'nion Dominion Parliament or by Letters Patent from the Governor in Council, it is provided that, " Every contract, agreement, engagement or t)argain made, and every bill of exchange drawn, accepted or indorsed, and every pro- missory note and cheque made, drawn or indorsed on behalf of the company by any agent, officer or servant of the company, in general accordance^ with his powers as such under the by-laws of the company, shall be bmd^ing upon the company ; and in no case shall it be necessary to have the seal of the company affixed to any such contract, agreement, engagement, bargain, bill of exchange, promis- ' sory note or cheque, or to prove that the same was made, drawn, accepted or indorsed, as the case may be, in pur- 182 BILLS OF EXCHANGE Word "limited.' m W m § 22- suance of any by-law or special vote or order, and the ~ person so acting as agent, officer or servant of the com- pany, shall not be thereby subjected individually to any liability whatsoever to any third person therefor : Provided, always, that nothing in this Act shall be construed to authorize the company to issue any note payable to the bearer thereof, or any promissory note intended to be circulated as money, or as the note of a bank, or to engage in the business of banking or insurance": R. S. C. c. 118, s. 35 ;, c. 119, 8. 76. It is further provided with reference to companies incorporated by Dominion Letters Patent that every direc- tor, manager or officer of the company, and every person on its behalf who signs or authorizes to be signed on behalf of the company, any bill of exchange, promissory note, indorsement or cheque wherein its name with the word " limited " after it does not appear in legible characters, shall incur a penalty of $200 and shall also be personally liable to the holder of any such bill of exchange, promis- sory note or cheque for the amount thereof unless the same is duly paid by thv company : R S. C. c. 119,. s. 79. In the case of companies incorporated by special Act and subject to the general Act, "The directors of the company shall be jointly and severally liable upon every written contract or undertaking of the company, on the face whereof the word 'limited,' or the words 'limited liability' are not distinctly written or printed after the name of the company, where it first occurs in such contract or under- taking ": R. S. C. c. 118, s. 39. The provisions of the general Acts of most of the pro- vinces regarding companies incorporated by special Act or Provincial Letters Patent regarding the making, accepting and endorsing of bills, notes and cheques are similar to those of R. S. C. c. 118, s. 36, and c. 119, s. 76, above Provincial •barters. CAPACITY AMD AUTHORITY. 133 ben ty' Ithe ier- ^ro- or ling quoted : see R. S. 0. c. 166, s. 33, and c. 157, s. 59 ; R. S. Q. § 22. Arts. 4689 and 4746 ; R. S. N. S. c. 79, s. 67 ; 48 Vict. c. 9, ^ 8. 62 (N. B.) ; C. S. Man. c. 9, s. 269 ; Rev. Ord. N.-W. T. c. 30, 8. 80. Companies incorporated by Letters Patent in Nova word Scotia are required to add the word " limited " after the name on every bill, note or cheque, and every director or manager who signs, issues or authorizes any bill, note or cheque without this word is liable to a penalty of $200, and is also personally liable for the amount of the instru- ment unless it is paid by the company : R. S. N. S. c. 79, s. 78. A similar provision is in force in the Territories : Rev. Ord. N.-W. T., c. 30, s. 83. In BritiEh Columbia, the English Companies Act, 1862, is in force : C. S. B. C. c. 21. s. 2. By section 47 of this Act it is declared that promissory notes and bills of exchange shall be deemed to be made accepted or iudorsed on behalf of a company, if made, accepted or indorsed in the name, or by, or on behalf of the company by any person acting under its authority. If any director, manager or officer of a limited company, signs on behalf of the com- pany any bil! or note without adding the word " limited," he is personally liable to pay the same, unless it is duly paid by the company: section 42. See Penrose v. Martyr, E. B. & E. 499 (1858); Atkins v. Wardle, 58 L. J. Q. B. 377 (1889). It is to be remarked that this does not confer on every Kight to , ■! 1 ■ 1 make bult. ■company mcorporated under this Act the power to execute bills or notes, but only indicates how the power may be exercised when it is conferred : re Peruvian Railroad Co. L. R. 2 Ch. 617 (1867). In England, where the power is not expressly given, it has been laid down that it will be only implied when the corporation without it cannot carry on its business, or m 184 BILLS OF EXCHANGE § 22* attain the end for which it was created, and that it cannot be implied from the power to contract debts, since the power to issue cbmmerciai or negotiable paper involves something more than the contracting of a debt, namely, the imposition upon the corporation of the liability to innocent indorsers for debts, which the corporation is not authorized to contract. See Bateman v. Mid Wales By. Co. L. B. 1 C. P. 499 (1866). It has also been held that this implied power is not possessed by a waterworks company : Neale v. Turton, 4 Bing. 149 (1827) ; Broughton v. Manchester Water Works, 3 B. & A. 1 (1819); or by mining companies; Dickinson v. Valpy, 10 B. & C. 128 (1829); Brown v. Byers, 16 M. & W. 252 (1847); Bult v. Morrell, 12 A. & E. 745 (1840); by a salvage company: Thompson v. Uni- versal Salvage Co. 1 Ex. 694 (1848) ; by a gas company: Bramah v. Boberts, 3 Bing. N. C. 963 (1837); or by a cemetery company : Steele v. Harmer, 14 M. & W. 831 (1845)*. The tendency of recent decisions, however, is towards a more liberal interpretation of these powers : re Peruvian Bailways Co. L. B. 2 Ch. 617 (1867). In the United States, the courts have laid down the broad rule, that whenever a corporation can contract a debt for a certain object, it may give a negotiable note, or accept a bill of exchange for the amount: 1 Daniel, §§ 381-8. ILLUSTRATIONS. 1. Under the Act, 7 Vict. c. 16, the K. M. R. Co. incor- porated for repairing vessels, etc., may give and receive notes in the course of its business : Kingston Marine R. Co. v. Gunn, 3 U. C. Q. B. 868 (1847). 2. The Buffalo B. & G. Ry. Co. have no power under their charter or under the General Railway Clauses Consolidation Act to make promissory notes : Topping v. Buffalo B. & G. Ry. Co.y 6 U. C. C. P. 141 (1867). CAPACITY AND AUTHORITY. 135 a or fcor- in 8. A manufitcturing company will be presumed to be a trading corporation and capable in law of making a promissory - note: Farreli v. Osliawa Manufacturing Co.,^) U. C. C'. P. 289 (1860). . 4. Debentures or coupons cannot be considered promissory notes when the company which issues them has no autiiority to make notes : Geddes v. Toronto Street Ry. Co., 14 U. C. C. P. 518 (1864). 5. A building society, incorpox'ated under C. S. U. C. c. 58, may make promissory notes : Snarr v. Toronto Permanent Building and Savings Society, 29 U. C. Q. B. 817 (1869). 6. The defendants desiring to raise money drew a bill and requested plaintiffs to indorse it for their accommodation, which plaintiffs did. Defendants got it discounted but failed to meet it and the plaintiffs had to pay it. Held, that assuming defend- ants had no power to draw the bill, they were nevertheless liable to plaintiffs as for money paid for them : Brockville and Ottawa Ry. Co. V. Canada Central Ry. Co., 41 U. C. Q. B. 481 (1877). 7. Where the holders of a note sued the president of a club personally on a note of the club signed by him as president, on the ground among others that the club had no power to make notes, it was held that this was a matter of law known to plain- tiffs as well as defendant, and they had accepted it as a note of the club, which had never repudiated liability : Bank of Ottawa V. Harrington, 28 U. C. C. P. 488 (1878). 8. A municipal corporation has no power to make a pro- missory note, and a note given by the secretary-treasurer in its name in settlement of a judgment is null : Pacaud v. Halifax South, 17 L. C. R. 56 (1866). 9. A promissory note of a municipal corporation held good : Ledoux v. The Municipality of Mile End, 2 L. N. 87 (1878). 10. Municipal corporations have not the right to make notes or accept bills : Martin v. City of Hull, 10 R. L. 232 (1878). ;. 11. A municipal corporation will be condemned to pay the amount of a promissory note signed by the mayor and secretary- 22. idG BILLS OF BXOHANOB m § 22. ^fcftsurer in the name of the corporation, where it is neither alleged nor proved that the note was given without considera- tion : Corporation of Grantham v. Couture, 24 L. C. J. 105 (1879). 12. Where the by-laws of a company] require notes to be signed by the president and vice-president, and counter-signed by the treasurer, a note payable to the order of the company indorsed by the vice-president alone and delivered to a creditor for a private debt is not binding on the company: Mechanics' Bank v. Bramley, 25 L. C. J. 250 (1879). 18. A building society not specially authorized to make notes held liable to an indorsee for value : Socictd de Construction du Canada v. La Banque Nationale, 8 L. N. 180 ; 24 L. C. J. 220 (1880). 14. The by-laws of a mutual assurance company gave the president the management of its affairs, and it was his duty to sign all notes authorized by the board or by the by-laws. He gave a note in the name of the company in settlement of a loss. The company was held liable to a holder in due course : Jones V. Eastern Townships Mutual Fire Ins. Co., M. L. R. 8 S. C. 418 (1887). 15. The chairman and secretary-treasurer of a board of school commissioners have no right to give a note for a debt of . the board without special authorization : Letellier v. School Com- missioners of Ouiatchouan, 10 R. L. 449 (1888). Drawing or 2. Where a bill is drawn or indorsed by an indorsing *' ^yjPJ'^^. infant, minor, or corporation having no capacity **"*■ or power to incur liability on a bill, the drawing or indorsing entitles the holder to receive payment of the bill, and to enforce it against any other party thereto. Imp. Act, s. 20 (2). It is not necessary to the validity «f a bill that the drawer or indorsers Bhould be liable. The drawer or any indorser may insert an express stipulation negativing his im-i- CAPACITY AND AUTHORITY. i«(l. liability to tlie holder : section 16 A , '' Jrawer, acceptor, or indorser of » h,, '""PP'' <>< 'he 5 99 inoiud^' In tbetr^f" iltllrT™'' """"'" " »»"""- become parties to a bill a„TT ' "'"""^ «>'» may " " without incurring habi Lthl , "" ""'''^ "'""« """^on »itho„t change from t C'lf 2 ''!"• "''""' '« »»'- " now practically in theZmTL r ""'' '" "^"S'""'' »»>« In Quebec, if not separate T . ^ " "' " -""afried. validly pass the prop^rTv v 'u,r''""'^' '^' '^""W "ot without the authorization her bl."?'''' "> ''«'• '»•''«. an acceptor, drawer, or .ndor'th"'': '''"'''''' ''S'''"''' "-y.ng it under sections ^HT^'^'I: ^'T^, ^'.^ m: ILLUSTRATIONS. 1. The holder of a notp W. may recover from the' makl , *' ^T'''' ^°«'^*3^ or ^as no power to endorse or a^ ^r" f ^^°"^'' *^^« society 16 U. C. Q. B. 871 (1868). "'*''* •" ^^"^"lond v. SmaJj! 2. A husband whn moj ,f e, is liable to ' her in" t: ■ " t r*.*" '"^ "''- ■" '"« y- B. 619 (1859). *'°I™'' V- Dennison, 18 0. c. t'oker, 4 Esp. jg; (jg^g^^ W^^s were infants: Taylor v. Ti'r^^^^^1Z'^0r::rcZ^^^^ -y the Lew v.Tucter, 8 B. 4 s. 888 (Lbt^^'u """«'»'«« '"82): ' 'on, 15 Mass. 272 (1818). ' ^*' "'Sbtingile v. Withing. % 138 BILLS OF EXOHANOB iflif! § 23. 23. No person is liable as drawer, indorser, or sTgli^r acceptor of a bill who has not signed it as such: essential -n» • t t j i i to liability. Provided that — Exceptions (^a.) Whcrc a person signs a bill in a trade or assumed name, he is liable thereon as if he had signed it in his own name ; (h.) The signature of the name of a firm is equi- valent to the signature by the person so signing of the names of all persons liable as partners in that firm. Imp. Act, s. 23. The first part of this section should be read in connec- tion with section 56, which provides that when a person signs a bill otherwise than as a drawer or acceptor, he thereby incurs the liability of an indorser to a holder in due course, and is subject to all the provisions of the Act respecting indorsers. The same rule would apply to the maker and indorsers of a promissory note: section 88. It probably represents correctly the former law in England, and also in the provinces other than Quebec, where an aval would be an exception. For a consideration of this point see the notes on section 56. If an agsni become a party to a bill in his own name, his undisclosed principal cannot be made liable on the bill : Beckham v. Drake, 9 M. & W. 92 (1841) ; re Adansonia Co. 43 L. J. Ch. p. 734 (1874). As between the immediate parties he may nevertheless be liable on the consideration. "Person" here includes any body corporate and politic, or party, and the heirs, executors, administrators or other legal representatives of such person : C. S. C. c. 1, s. 7, (22). It is not necessary that the person to be charged should have signed with his own hand, it is sufficient if his name be signed by some other person by or under his authority : section 90 ; " Person " defined. CAPACITY AND AUTHORITY. 131^ r, or uch: ie or ) had i eqiu- ling of n that connec- , person jptor, be lolder in { the A-ct J to the 88. It ,ngland, e an aval lis point and in the case of a corporation that it be executed by the § 23' proper officers, or under the corporate seal, although the Act does not require the bill or note of a corporation to be under seal. As to the personal liability of officers of corporations who purport to draw, indorse or accept on behalf of the corpora- tion, see notes on section 26. As to what is a sufficient signature to a bill see the note on section 3, p. 39. With regard to promissory notes executed before a notary in the province of Quebec, and which are not signed by the makers, see note on section 82. ILLUSTRATIONS. 1. A. made a note payable to B. or order, and C. wrote his name on the back, but B. did not endorse. Held, that C. could not be held liable as a new maker : Steer v. Adams, 6 r. C. 0. S. 60 (1839) ; Jones v. Ashcroft, U. C. 0. S. l.U (1841). 2. A party indorsing his name on the back of a note not negotiable, or if negotiable not indorsed by the payee to whose order it is made, is not responsible to the payee as maker, indorser or guarantor : West v. Bown, 3 U. C. Q. B. 290 (1847); Thew V. Adams, ibid., 291 (1840); Wilcocks v. Tinning, 7 U. C. Q. B. 372 (1850). 3. A. made a note payable to B. or bearer, D. indorsed it and was held liable to B. as holder of the note : Vanleuven v. Vandusen, 7 U. C. Q. B. 176 (1849). 4. A husband is not liable on a note made by his wife in her own name, although she was acting as his agent in the transaction : Ross v. Codd, 7 U. C. Q. B. 64 (1850). 5. Defendant indorsed in blank as security for the maker I a promissory note, payable to plaintiff, but not negotiable. I Hekl, that defendant was not liable as a maker : McMurray v.. Talbot, 5 U. C. C. P. -167 (1856), 140 BILLS OF BXOHANGE §23. 6. W. inade a non-nogotiable note to plaintiff for money lent, and defendants indorsed as sureties for W. One cf them paid interest and both promised to pay. Held, that they were not liable as indorsers or on an account stated: Bkilbeck v. Porter, 14 U. C. Q. B. 480 (1857). 7. Where a non-negotiable promissory note given for money lent to a firm, was signed by one partner and indorsed by the other, the latter was under the particular facts of the case held to have signed as guarantor : McPhee v. McPhee, 19 0. R. COS (1890). 8. Where three persons indorsed a note which was not not indorsed by the payees to whose order it was made, they were held not liable as makers : Morton v. Campbell, 4 N. S. (Cochran) 6 (1859). 9. A person who had put his name on the back of a note before its deliv6ry to the payees, held not liable to them as an indorser: Burns v. Snow, 3 N. S. D. 530 (1875). 10. A note payable to P. was indorsed by G. lengthwise on the note, and then by P. G. was held liable as an indorser : McLean v. Gamier, 14 N. S. (2 R. & G.) 432 (1881). 11. Y. signed a non- negotiable note, and H. who agreed to be his surety, wrote across the back, " a joint note or better than a joint note," and signed it. Held, that H. was liable as maker : Piers v. Hall, 18 N. B. (2 P. & B.) 34 (1878). 12. Where A. puts his name on the back of a promissory note payable to B. or order, before it is delivered to the payee to take effect as a promissory note, he is liable as maker : Bell v. Moffat, 20 N. B. (4 P. & B.) 121 (1880). 18. D., the holder of a bill indorsed in blank, converts the last indorsement into a special indorsement in favour of a person to whom he transfers the bill. D. is not liable as an indorser : Vincent v. Horlock, 1 Camp. 442 (1808). 14. A clerk draws a bill in the name of a firm whose business he is winding up, two of the partners being dead. He is not liable on the bill : Wilson v. Barthrop, 2 M. & W. 868 (1887). CAPACITY AND AUTHOWTY. 141 money i tliem 3y were beck V. f money a by the ase lield . R. 003 was not ade, they I, 4N. S. of a note em as an [thwise on indorser : agreed to or better ,s Uable as iromissory e payee to Hr: Bellv. Inverts the \i a person indorser : le business iHe is not (1837). 15. A. draws a bill, signing it " J. A., agent." A. alone is liable as agent ; his principal is not : Pentz v. Stanton, 10 - Wend. 271 (1888). 16. The principal is not liable on a note on which his name does not appear, even if the payee knew that the note was given on his account : Robinson v. Kanawha Bank, 44 Ohio St. 447 (1886). Assumed Name. — A person may adopt whatever name he pleases in his business dealings, unless there be some special reason against his using that particular name ; and in such a case the adopted name is in law equivalent to his actual name. Thus an individual may carry on business in a firm name, or a husband in the name of his wife, or a principal in the name of an agent, or a corporation may use a firm name or that of its agents, etc. ILLUSTRATIONS. ' ' 1. A bill drawn and indors"^d by a wife in her own name in the presence of her husband and under his direction was treated as the bill of the husband : Prestwick v. Marshall, 7 Bing. 565 (1831). 2. A bill drawn on William Bradwell was accepted by his wife Mary Bradwell in her own name. The husband recognized* hia liability and promised to pay. Held, that he was liable as acceptor: Lindus v. Bradwell, 5 C. B. 588 (1848). See also Ross v. Codd, 7 U. C. Q. B. at p. 74 (1850) ; and Trueman v. Loder, 11 A. & E. at p. 594 (1840). 3. Where one partner of an English firm did business for the firm in America in his own individual name, the firm was held liable on indorsements by him: South Carolina Bank v. Case, 8 B. & C. 427 (1828). 4. The " Boston Iron Company " was held liable on notes signed "Horace Gray & Co.": Melledge v. Boston Iron Co., 5Cush. 158(1849). 23. 142 BILLS OF EXCHANGE \i% § 23. Finn signature. — The signature of a firm is deemed to be the signature of all those who are partners in the firm, whether working, dormant or secret, or who, by holding themselves out as partners, are liable as such to third parties: Pooley v. Driver, 5 Ch. D. 458 (1876); Gurney v. Evans, 27 L. J. Ex. 166 (1858). A bill addressed to a partner may be accepted by the firm, and the partner made liable as acceptor en i,lie prin- ciple contained in this clause: section 17. The partners are presumed to have given each other authority to do the business of the firm, and what is done by one binds the others, not only ordinary partners but also dormant or secret partners. And in trading or commercial partner- ships each partner will be presumed to have authority to sign the firm name as drawer, acceptor, maker or indorser to commercial paper for the business of the firm. If a partner sign the firm name on his private business, the firm is not liable except to a holder in due course : Bank of Australasia v. Breillat, 6 Moore P. C. 152 (1847); Wiseman V. Easton, 8 L. T. N. S. 637 (1863). In civil or non-trading partnerships there is no such presumption, and the partner signing the firm name may make only himself liable: Dickenson v. Valpy, 10 B. & C. T37 (1829); Thicknesse v. Bromilow, 2 Cr. & J. 425 (1832); Ricketts v. Bennett, 4 C. B. 699 (1847); Garland v. Jacomb, L. R. 8 Ex. 219 (1873). But the others may become liable by estoppel or ratification : section 24. ILLUSTRATIONS. 1. Where the drawing or accepting of bills is not a necessary part of the business of a firm, the fact that bills were drawn and accepted with defendant's koowledge while he was a partner is sufficient to render him liable : Lee v. McDonald, 6 U, C. 0. S. 180 (1841). CAPACITY AND AUTHORITY. 143 ned to B firm, lolding ) third iney v. by the le prin- jartners B do the nds the naant or partner- hority to indorser m. W a .ness, the Bank of Wiseman no such ame may B. &C. i5 (1832); I. Jacomb, Ime liable necessary iwn and 1 partner is [. C. 0. s. 2. Where the plaintiflf knowingly received a note indorsed for § 23. the accommodation of the maker by one partner without the CO partner's authority or knowledge, the latter is not liable: Harris v. McLeod, 14 U. C, Q. B. 164 (1856); Royal Canadian Bank v. Wilson, 24 U. C. C. P. 362 (1874). 3. A holder who received in good faith before maturity a note indorsed in the firm name by one partner, is entitled to recover against the firm although the co-partner did not authorize the indorsement which was for the accommodation of the maker : Henderson v. Carveth, 16 U. C. Q. B. 824 (1858). 4. Where a firm of two or more indorse in the partnership name, the liability as sureties is a joint liability, and not the several liability of each partner: Clipperton v. Spettigue, 15 Grant, Chy. 269 (1868). 5. A draft was made on a firm and a partner marked it ^' good " adding his own .initials. Held, that the firm was not liable: Hovey v. Cassels, 30 U. C. C. P. 230 (1879). 6. Where a solicitor signed his firm's name to an accommo- dation note without the authority or knowledge of his co-partner, the latter is not liable, even to a holder in due course : Wilson V. Brown, 6 Ont. A. R. 411 (1881). 7. Plaintiffs discounted a note for the maker, payable to and indorsed in a firm name by one of the partners, plaintiffs know- ing that it was so indorsed as security for the maker, and having no reason to suppose it was in connection with the partnership business. Held, that the other partners were not liable; Federal Bank v. Northwood, 7 0. R. 389 (1884). 8. Where plaintiff took a note which had been fraudulently signed by a partner in the firm name after dissolution, but l)efore being advertised, and plaintiff knew nothing of the firm, or its members, held, that the other partner was not liable: Standard Bank v. Dunham, 14 0. R. 67 (1887). 9. Where a person held oui io be a partner gave a note in the name of the firm for money borrowed, and which was to be kept secret from the other partners, the lender cannot recover from 144 BILLS OF EXCHANGE l4ik| •i ■ ^ § 23. *^*® other members of the firm : McConnell v. Wilkins, 18 Ont» ^ A. R. 488(1885). 10. A note made fraudulently byja partner in the firm name binds the partnership in the hands of a bona fide holder for value : Walter v. Molsons Bank, Ramsay A. C. 80 (1877). 11. Where by the deed of dissolution of a partnership, one partner was given authority to sign notes \v the firm's name, and another partner, when sued on such a note, pleaded that it was given without his knowledge in the name of a terminated co-partnership, he was held liable : White v. Wells, 1 L. N. 87 (1878). 12. A partner made notes in the firm's name, forged the name of the payee, got the notes discounted at the bank, and applied a large part of the proceeds to partnership purposes. Held, that the bank could not rank on the insolvent estate of the firm on the notes, but could for the amount of them as for money paid : re Graham, 12 N. S. (3 R. & C.) 251 (1878). 18. A person who was a member in two firms made a note in the name of one, without the knowledge of his partner in that firm, to raise money for the other. The bank which discounted the note was aware of the facts. Held, that the partner who was ignorant of the making was not liable to the bank: Creigh- ton V. Halifax Banking Co., 18 S. C. Can. 140 (1890). 14. In an action by a bona Jide holder against a firm as indorsers of a note, it is no defence that it was indorsed fraudu- lently by one of the firm, and for matters not relating to the business of the partnership : McLeod v. Carman, 12 N. B. (1 Han.) 592 (1869). 15. Where a party takes a note made or indorsed in a firm's name, knowing that it was not for the purposes of the partner- ship, the onus is on him to prove the knowledge or assent of each partner : Union Bank v. Bulmer, 2 Man. L. R. 880 (1885). 16. Where a bill is drawn on M. & McQ. for goods supplied to M, McQ. & Co., and accepted in the name of M. & McQ. by the manager of M. McQ. & Co., the latter are not liable as CAPACITY AND AUTHORITY. 145 Dnt. lame i,lue: I, one lame, hat it nated N. 87 ad the k, and r poses. > of the as for )• » a note in that sounted ler who ICreigh- Ifirm as Ifraudu- to the Han.) firm's |)artner- bsent of [(1885). [applied IcQ. by lable as acceptors of the bill : Quebec Bank v. Miller, 3 Man. L. R. 17 § 23, (1886). — 17. When a bill is payable to the order of a firm and the partnership is subsequently dissolved, the indorsement of an ex- partner of the late firm transfers the property therein, and authorizes the payment thereof: King v. Smith, 4 C. & P. 108 (1829) ; Lewis v. Reilly, 1 Q. B. 349 (1841). Contra, 1 Daniel j 370^(, and cases there cited. 18. Where a member of a firm in fraud of his partner accepts a bill in a name which is not the regular firm name but lesembles it, the latter is not liable : Faith v. Richmond, 11 A. & E. 339 (1840) ; Kirk v. Blurton, 9 M. & W. 284 (1841) ; Royal Canadian Bank v. Wilson, 24 U. C. C. P. 362 (1874). 19. A person carries on business in his own name, but has a dormant partner. He accepts a bill in the common name on his private account. If tlie dormant partner can show that the bill is not a firm bill, he is not liable : Yorkshire Banking Co. v. Beatson, 5 C. P. D. 109 (1880). 24. Subject to the provisions of this Act, where ^^^eefj^r a signature on a bill is forged or placed thereon with- iurl *'^""'' out the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce pay- ment of the bill is precluded from setting up the forgery or want of authority : Provided, that nothing in this section shall affect Proviso. the ratification of an unauthorized signature not amounting to a forgery : And provided also, that if m'c.b.e.a. — 10 \t^ 146 BILLS OF EXCHANOB illl^ to >j § 24. a cheque, payable to order, is paid by the drawee upon a forged indorsement out of the funds of tlie drawer, or is so paid and charged to his account, the drawer shall have no right of action against the drawee for the recovery back of the amount so paid, or no defence to any claim made by the drawer for the amount so paid as the case may be, unless he gives notice in writing of such forgery to the drawee within one year after on^f^ged he has acquired notice of such forgery; and in case Inen"''" of failurc by the drawer to give such notice within the said period, such cheque shall be held to have been paid in due course as respects every other party thereto or named therein, who has not previously instituted proceedings for the protection of his rights. Imp. Act, s. 24. Right of drawee or indorser who pays. my. 2. If the drawee of a cheque bearing a forged indorsement pays the amount thereof to a subse- quent indorser, or to the bearer thereof, he shall have all the rights of a holder in due course for the recovery back of the amount so paid from any indorser who has indorsed the same subsequent to the forged indorsement, as well as his legal recourse against the bearer thereof as a transferrer by deli- very, and any indorser who has made such payment shall have the like rights and recourse against any antecedent indorser subsequent to the forged in- dorsement ; the whole, however, subject to the provisions and limitations contained in the last preceding sub-section. 54-55 V. c. 17, s. 4. CAPACITY AND AUTHORITY. 147 vsee the Lint, .inst Dunt B by case g of after L case within ) have •party iously of his The first paragraph of this section and the first proviso § 24. are taken from the Imperial Act, and form the whole of ^^j;^— — section 24 of that Act. The second proviso is in part a®'**<'"°"- substitute for section 60 of the Imperial Act, which protects a banker who pays a cheque or bill payable on demand on which one or more indorsements are forged. In the bill as introduced into the Canadian Parliament, section 60 was a copy of the same section in the Imperial Act ; but after a long discussion it was struck out in the House of Commons as it would have made an important innovation in our law : Commons Debates, 1890, p. 1526. In the Senate a motion was made to restore it, but this was rejected : Senate Debates, 1890, p. 373. In lieu of section 60, the second proviso of this section was in substance inserted in the Bill in the Senate : Debates, p. 464 ; and the Commons finally accepted it. The second sub-section is part of the amending Act of 1891. It did not form part of the Bill as introduced in the House of Commons by the Minister of Justice, but was inserted in the Senate on the suggestion of the Prime Minister, as it was believed that a bank or indorser would not, without this amendment, have the remedy thereby given against indorsers subsequent to the forged indorse- ment. "Subject to the provisions of this Act."— These words in the Imperial Act applied especially to section 60 above referred to. The sections in the present Act to which they would appear to apply are 54 and 55 relating to estoppel as to a drawer or acceptor of a bill, and 79 and 81 relating to the payment of crossed cheques by a bank. "Forged or unauthorized signature." — Forgery is making a faUe document with intent to defraud. Signing the name of a non-existing or fictitious person or firm m 148 BILLS OF EXOHANQU § 24. ^^^^ fraudulent intent is forgery : Beg. v. Bogerd, 8 C. & P. '-' 629 (1838). It was a misdemeanor at common law, but has been made a felony by various statutes. The Canadian statute relating to the forgery of bills is B. S. C. c. 165, s. 28 : " Every one who, with intent to defraud, forges or alters, or ofifers, utters, disposes of, or puts off knowing the same to be forged or altered, any bill of exchange, or any acceptance, indorse- ment or assignment of any bill of exchangS, or any promis- sory note for the payment of money, or any indorsement on, or assignment of, any such promissory note, is guilty of felony, and liable to imprisonment for life." The forged instrument must be false in itself. The mere subscribing a cheque, given as a party's own, by a fictitious name, is not forgery : Beg. v. Martin, 6 Q. B. D. 34 (1879). The present section does not treat of bills forged by being fraudulently altered. For these, see section 63. A signature that is wholly unauthorized whether pur- porting to be by procuration or otherwise, is as ineffectual to convey title to a bill as a forged signature, except as against a party who is precluded or estopped from setting up the forgery or want of authority. A person is guilty of forgery, who, with intent to defraud, and without lawful authority or excuse, draws, makes, signs, accepts or indorses a bill of exchange or promissory note : B. 8. C. c. 165, s. 30. A signature placed on a bill, without being authorized, but not amounting to a forgery, may be ratified. It has been laid down that a forgery cannot be ratified, and the language of the first proviso of this section would seem by implication to sustain that view. In Brook v. Hook, L. B. 6 Ex. 89 (1871), Chief Baron Kelly, speaking for the majority of the court, says, p. 100 : " In all the cases cited for the plaintiff, the act ratified was an act pretended to ;ual as bting ■ized, CAPACITY AND AUTHORITY. have been done for or under the authority of the party sought to be charged ; and such would have been the ease here if Jones had pretended to have had the authority of the defendant to put his name to the note, and that he had signed the note for the defendant accordingly, and had thus induced the plaintiff to take it. In that case although there had been no previous authority, it would have been compe- tent to the defendant to ratify the act. But here Jones had forged the name of the defendant to the note, and pretended that the signature was that of defendant; and there is no instance to be found in the books of such an act being held to have been ratified by a subsequent ratification or state- ment. Again, in the cases cited, the act done, though unauthorized at the time, was a civil act, and capable of being made good by a subsequent recognition or declara- tion; but no authority is to be found that an act which is itself a criminal offence is capable of ratification." This view has been adopted by the Court of Appeal in Ontario : Merchants' Bank v. Lucas, 15 Ont. A. K. 573 (1888); and affirmed by the Supreme Court of Canada in the same case : 18 S. C. Can. 704 (1890). See also La Banque Jacques Cartier v. La Banque d* Epargne, 13 App. Cas. (1887) at p. 118. In the United States, however, it has been held that a forgery may be ratified : Union Bank v. Middlebrook, 33 Conn. 95 (1865); Greenfield Bank v. Crafts, 4 Allen, 447 (1862); Howard v. Duncan, 3 Lansing 175 (1870); but there are decisions there to the contrary : McHugh v. Schuylkill Co., 5 Am. Rep. 445 (1871); Shisler v. Van Dyke', 92 Penn. St. 449 (1880) ; Henry v. Heeb, 114 Ind. 275 (1887). Some remarks of Lord Blackburn in the Scotch case of McKeuzie v. The British Linen Co., 6 App. Cas. 82 (1881), at page 99, would appear to sustain the position that a forgery 149 24. I 160 DILLS OF EXCHANQE nil m$ II § 24. may be ratified ; but in that case it was held that there had been no ratification, and it was really a question of estoppel rather than of ratification, which may be said of most of the decisions that appear to uphold that view. See Vagliano v. Bank of England [1891] A. C. 130, and note, ante p. 64. In England where a bill is held with a forged signature, the court will restrain its negotiation by injunction, or order it to be given up and cancelled : Esdaile v. La Nauze, 1 Y. & C. 394 (1835). Estoppel. — In the Imperial Act " precluded " was used instead of "estoppel" when it was determined to extend the Act to Scotland, as the latter word is unknown to Scotch law. A party to a bill, whose signature is unauthorized or even forged, may by his language or conduct have led an innocent holder to take the bill as genuine, and he cannot subsequently repudiate it to such innocent holder. The rule is, that when one by his words or conduct wilfully causes another to believe in the existence of a certain state of things and induces him to act on that belief, or to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time : Pickard V. Sears, 6 A. & E. 4G9 (1837). See also Ciirr v. London & N. W. Ey. Co.. L. E. 10 C. P. 307 (1875). " Notice of such forgery."— Where actual notice has been given or received, no question will arise as to when the year for action will expire. The difficulty will arise where notice or knowledge is to be inferred from the circumstances of the case, as for instance the fact of the cheque with the forged indorsement being given up to the drawer. "Subject to the provisions and limitations."— The drawee also must take action against an indorser or a transferrer by delivery within a year, or his security is CAPACITY AND AUTHORITY. 151 Inm tion, ter a kai'fl ion & has nthe where ances h the j^one. So also must an indoraer who has been compelled § 24. to pay under the provisions of this section. No action is here given to a transferrer by delivery who has been <)l)liged to pay but be would have his recourse against the person from whom he received it, to recover the amount he piiid for the bill, under sections .'iS and 58. ILU'STHATIONS. 1. Where defendant's name was signed by a nephew for whom he was in the habit of indorsing on purchases from plaintitts, and he had acknowledf,'ed his liability and asked for time, and only denied bis liability after his nephew had absconded ; Held tliat be bad precluded himself from disputing bis liability : Pratt V. Drake, 17 U. C. Q. li. 27 (IH^O). 2. A cheque to the order of a company was cashed by a bank on the indorsation of the secretary. The by-laws re(pured the signature of the president also. The secretary had on previous occasions indorsed in the sauie way, and the company had not objected. Held, that the bank was not liable to the company: Thorold Manufacturing Co. v. Imperial Bank, 13 O.R. ;i8() (18H7). 8. Defendants separately called at plaintifi's bank and examined a bill to which their firm name bad been forged. They both examined it closely, and one of them used words throwing doubts as to its genuineness, and gave an evasive answer as to its payment. The other promised to send a clieque for it the next day. They were held not to be precluded from setting up the defence of forgery ; Merchants' Bank v. Lucas, 15 Out. A. R. 573 (1889) ; affirmed in the Supreme Court: 18 S. C. Can. 701 (18i)0).' A forged bill or note cannot l>o ratified: Westloh v. Brown, 48 U. C. Q. B. 402 (1878); Merchants' Bank v. Lucas, sjipni. 4. The bolder of a promissory note whose title was derived IVom a forged indorsement, although be acted in entire good i'aith, cannot recover the amount of the note from any of the previous indorsers : Larue v. Evanturel, 2 L. C. L. J. 118 (1866). ^Vi^ {ill Hi Mil 5 15*2 BILLS OF EXCHANGE § 24. ^' ^^^'^ ^^^^ maker of a note, whose signature was forged, stated before suit that he had signed the note for the accommo- dation of the indorser and offered to pay if time was given, and the holder in consequence refrained from prosecuting the indorser for forgery ; held that the maker was liable and was precluded from setting up the defence of forgery : Union Bank v. Farns- worth, 19 N. S. (6 R. & G.) 82 (1886). 6. Plaintiff, a sea captain, deposited with the defendants $1,000, and took » deposit receipt payable to his order, which he left with R., the managing owner of the vessel, who indorsed plaintiff's name and drew the money. Plaintiff was absent three years, and on his returii R. confessed, promised to pay the money and gave a mortgage as security. Plaintiff was again absent two years, and when he returned R. had absconded. Tho jury gave a verdict for plaintiff, but held on appeal that by withholding from the bank for two years the knowledge he had, plaintiff by his laches was estopped from recovery : Scott v. Bank of New Brunswick (N. B.), 11 C. L. T. 844 (1891). 7. Where a note is payable to the order of Henry Davis and is indorsed by another person of the same name it is a forgery and the indorsee cannot recover : Mead v. Young, 4 T. R. 28 (1790) ; and if he collect on t)ie forged indorsement he is liable to refund: Johnson v. Windle, 3 Bing. N. C. 225 (1836) ; Robarts v. Tucker, 16 Q. B. 560 (1851) ; Ogden v. Benas, L. R. 9 C. P. 518 (1874) ; Carpenter v. Northborough National Bank, 123 Mass. 66 (1877) ; Ryan v. Bank of Montreal, 14 Ont. A. R. 583 (1887). 8. If a party whose name is forged on a bill acknowledges the signature, and a holder takes it on the strength of this, he is liable : Leach v. Buchanan, 4 Esp. 226 (1803). 9. Where the original indorsement of the payee's name is a forgery, a real indorsement by the payee after the bill has arrived at maturity will not give the holder any title : Esdaile v. La Nauze, 1 Y. & C. 394 (1835). 10. The name of a firm, as drawers and indorsers of a bill, was forged. The acceptor who negotiated is estopped from CAPACITY AND AUTHORITY. 153 hedges setting up tlie defence of forgery to the indorsement as well as § 24 to the drawing : Beeman v. Duck, 11 M. & W. 251 (1843). '— 11. A clerk of the payee of a letter of credit forges the payee's name and gets the money from the hank. The payee can recover the amount from the bank: Orrv. Union Bank, 1 Macqueen H.L. 618 (1854). 12. A partner in a commercial firm fraudulently accepts a bill in the firm name for his private debt. The firm is estopped from setting up the fraud against a holder for value without notice : Hogg v. Skeen, 18 C. B. N. S. 482 (1865). 18. A partner fraudulently indorses for a private debt a bill payable to the firm. The indorsee collects the money. I'lie partner becomes bankrupt. The other members of the firm and his trustee can recover the money from the indorsee : Heilbut v. Nevill, L. R. 5 C. P. 478 (1870). 14. Defendant in order to prevent the prosecution of one who had forged his name to a note wrote, " I hold myself vesponsible for a note dated, etc., bearing my signature." The ratification is illegal and he is not liable : Brook v. Hook, L. K. Ex. 89 (1871). 15. Before discounting a bill plaintiff went to the acceptor, and asked him if he had accepted bills for the drawer. He said he had but was not shewn the bills. The jury found for the defendant ; the Court refused a new trial, the -Judge not saying that he was dissatisfied with the verdict : Levinson v. Young, 1 T. L. R. 571 (1885). 25. A signature by procuration operates asi'»ocnra- notice that tlie agent has but a Hniited authority to ^"'"^ sign, and the principal is bound by such signature only if the agent in so signing was acting within the actual limits of his authority. Imp. Act, s. 25. Whenever an authority purports to be derived from a written instrument, or the agenb signs the paper with the ■m ■pw I ! ;'. ? \ I I 154 § 25. <'<>ilioin.- tioii ulUi'ora. Af;iMitR. ruifiif'rK. BILLS OF EXOHANOK words " by procuration," in such a case the party dealing with him is bound to take notice that there is a written instrument of procuration, and he ought to call for and examine the instrument itself, to see whether it justifies the act of the agent. Under such circumstances he is chargeable with enquiry as to the extent of the agent's authority ; and if without examining into it when he knows of its existence — and especially if he has it in his possession — he ventures to deal with the agent, he acts nt his peril and must bear the loss if the agent has trans- cended his authority : Daniel, § 280. The same rule applies where a bill is signed on behalf of a corporation by its otticers or agents. In such a i-nse the statute or by-laws take the place of the power of attorney. As to Dominion and Provincial Joint Stock Companies: see the notes on section 22, ante p. 181. An agftnt or attorney who is not competent to make himself liable on a bill, may nevertheless be able to bind a principal. It may be laid down as a general rule that itll persons of sane mind are capable of becoming agents to sign bills. This applies to infants, married women, etc. As to the personal liability of an agent who transcends his authority or who signs without authority, see the notes on the next section. " The mandate and powers of the partners to act for the partnership cease with its dissolution, except for such acts as are a necessary consequence of business already begun : " C. C. Art. 1897. The giving of a note or the drawing or accepting a bill in the firm name even for l)aitnership business would not be such an act, but would require special authority from the co-partners : Dolman v. Orchard, 2 C. iV: P. 104 (1825) ; Bank of Montreal v. Pag-. i)8 111. 110 (1881). m >5i to the for luch CAPACITY AND AUTHOUITY. ILLUSTRATIONS. 1. A fjcneral power of attorney to an a<,'«MU to Hif^ni bills, notes, etc., and to superintend, nianai^e and direct all the affairs of the principal, given him a jjower to indorse notes : Auldjo v. McDouKall, i\ V. C. (). S. IIM) (ISMM). 2. I), was a clerk or ajjient l<('e))in<» a store at L.for defend- ant, who had sanctioned his purchasing certain ^oods. Held, that the circumstances gave l). no implied authority to sign defendant's name to a note: lieathfield v. \'an Allan, 7 V. C. C. r. MIG (1857). H. .1. M. h. held a power of attorney from the executors of K., authorizing him, among other things, to indorse notes in their names. He indorsed some notes ".I. M. H., agent of the executors of I'i.," and others " the executors late E., /nr /mi. ]>.," and delivered them to M.. an exi'cutor, who was financially end)ar- rassed, and who discoinited them with plaintiffs on his private account. Held, that the indorsements wt're suilicient in form, hut not within the scope of 15. 's ))ower, and the other executor was not liable: (lore liank v. Crooks, M V . V.Q. W. 2")! (1H()7). 1. When the president was authorized hy the directors to sign a note in the name of the company, iiregularity in the appointment of the directors was not suHieient to di'stroy such authority, when the company received value and the plaintiff look the note in good faith: Currier v. Ottawa (las Company, IH r. C. C. P. 202 (KSOH). T). A wife bought her husliand's insolvent estate and the business was contiiuied by him, she having given him a power of attorney. Held, that his agency was not limited by the writing, but might db aseertaiimd from any ailmissii le eviiU-nce, and she was held for notes given by him m)t strictly within the written authority: Cooper v. lUacklock, 5 Out. A. K. oHrj (lf tliia occasion he showed tlie customer a letter that his employers ^ 26. desired to draw upon him. Held, that neither the letter nor the former dealing authorized him to draw the bill: Hogarth v. Wherley, L. R. 10 C. P. 630 (1875). 27. An agent appointed to wind up the business of a firm held not to have authority to accept bills drawn on the firm, or to accept a bill in the name of a partner: Odell v. Cormack, 11) Q. B. D. 223 (1887). IS 26. Where a person signs a bill as drawer, indorser or acceptor, and adds words to his signa- ture indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon ; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability : 2. In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted. Imp. Act, s. 26. Agents and Officers of Corporations. Notes and bills are constantly made, accepted and indorsed by agents and officers of corporations in such a way as to make it very difficult to say whether the signers are liable personally, or whether the principal or corporation is liable, or whether both are liable. The question in every such case is one of construction. Whose note or bill does it purport to be? If, on the true construction of the instrument, it is the note or bill of the principal or of the company, they will be liable on it, and not the individuals whose names are on it, unless it is the note or bill of both. On the Signing as agent or in represen- tative capacity. J' 160 BILLS OF EXCHANGE I § 26. olher band, if on the true construction, it is not the note or bill of the principal or company, the persons whose names are upon it will be liable, whether they intended to be so or not. The address of a bill and the body of a note are frequently more conclusive on this point than the words that may follow the signature. The first impression on reading the section would be that it was intended to relax the somewhat severe rules that have been followed, in England and Ontario especially, in holding officers of companies personally liable on bills connected with the business of the company. It remains to be seen whether the Courts will so interpret it. In the United States there has been a great conflict of decisions, but the tendency seems to be, on the whole, to relieve officers of corporations in certain cases where they would have been held liable in England or Ontario- In making promissory notes on which a company alone is to be liable, officers would do well to use the name of the company in the body of the note and not the ordinary *' I" or " we "; and if agents would sign the name of their prin- cipals first, followed by "per" or "per pro." before their own names, there would be less danger of ambiguity. In drawing bills the name of the company or principal should likewise be placed prominently in the foreground. In accepting bills they should look carefully to see who is the drawee, as this is usually the controlling circumstance in the case of bills, the form of whose acceptance might leave it a matter of doubt whether it was that of the company or of the officer accepting. Except in case of need or for honour it is only, the drawer that can accept. It is on this account that officers of companies have been held to be personally liable on bills where the acceptance would appear to be in the same terms as promissory notes where the officers signing them have been relieved from personal liability. CAPACITY AND AUTHORITY. 161 The officer of a company who becomes a party to a bill § 26. or note on its behalf in accordance with his powers under the by-laws is not personally liable. In the case of companies incorporated by letters patent under the general Dominion Act, he will be personally liable if the word "limited" does not appear in legible characters after the name of the company: B. S. C. c. 119, s. 79. So also in the case of companies incorporated by letters patent in Nova Sootia, the North West Territories and British Columbia: see onite p. 132. Where from the terms of a bill, or from the words added to his signature, it is apparent that the person signing is merely doing so in the name of and on behalf of another who is fully disclosed, or that he is merely acting in a representative character, "he is not personally liable thereon," as he is not, properly speaking, a party to the bill. He may, however, be held liable in an action for false representation: West London Commercial Bank v. Kitson, 13 Q. B. D. 362 (1884). prin- iheir In lould In the ce in leave or of 8 ILLUSTRATIONS. • 1. A note indorsed '* Eastwood & Co. per J. Eastwood, jr." imports that the signer is not a partner, and he is not personally liable : Bowling v. Eastwood, 3 U. C. Q. B. 376 (1846). 2. A bill was drawn upon *' P. C. De Latre, president N. D. & H. Co." and accepted by him in the same terms. He was held personally liable : Bank of Montreal v. De Latre, 5 r. C. Q. B. 362 (1849). 3. A bill was drawn on " W. A. Geddes, treas. W. I. C. Co." He accepted it " W. A. Geddes, treas. W. I. C. Co." and affixed the company's seal. He was held personally liable : Foster v. (xeddes, 14 U. C. Q.B. 239 (1856). 4. A note in the words •' we promise to pay " was signed, ce, the application 168 BILLS OF BXCHAMGE M § 27. ^^ ^^3 principles of iuternational law will be required ~ for their solution. See notes on sections 22 and 71. " (a) " — " An agreement containing a promise made by the one party, for a valid consideration, and agreed to by the other, creates a contract by force of the mere agree- ment without other formality. The contract so created is a simple contract": Leake, p. 21. " (6) " — Formerly in England it was doubted whether an antecedent debt was a valid consideration for a bill payable on demand, but it was settled in accordance with the rule laid down in this clause in Gurrie v. Misa, L. B. 10 Ex. 153 (1875). For the law as to accommodation bills see section 28. As to bills tainted with illegal consideration, fraud, etc., see section 29, s-s. 2. Evidence as to consideration.— In Quebec under the code it was provided by article 2285, that when a bill or note contained the words ** value received," value for the amount of it would be presumed to have been received on the bill or note and on the indorsements. The omiesion of these words did not render the instrument invalid, but threw upon the holder the onus of proving value : Duches- nay v. Evarts, 2 Rev. de Leg. 31 (1821); Hart v. Macpherson, Girouard, Lettres de Change, 66 (1848) ; Larocque v. Franklin Bank, 8 L. C. B. 328 (1858). These words were at one time considered necessary in England. In France the bill should state in what the value consists : Code de Cora. Art. 110 ; but it has been held, that when a bill does not state the nature of the value, it is not on that account void, but the holder must prove what the value was : Cour de Cassation, 30th Aug., 1826. Now every party whose signature appears on a bill or note is presumed to have become a party for value : sec- CONSIDERATION. le^ tion 80. While oral evidence is not admissible to vary § 27. the terms of the \i^ritten contract between the parties, it is admissible to impeach the consideration for the contract, and notwithstanding the words " value received " or their equivalent, the defendant may prove by parol the want or failure of consideration, where, on the issues raised, that would be a defence : Foster v. Jolly, 1 C. M. tfe R. at p. 708 (1835) ; Abrey v. Crux, L. R. 5 C. P. at p. 45 (1869) ; Temple v. Jones, Ramsay A. C. 76 (1883) ; Taylor, § 1138, See also notes on section S, ante p. 51. bill or sec- ILLUSTRATIONS. 1. A debt due to a bankrupt estate is a good consideration for notes given to the trustees and assignees of the estate : Gates V. Crooks, Dra. 459 (1881). 2. A member of a joint stock company, not incorporated, lending, with the assent of the company, a sum of money out of the joint fund, to another member, and taking from him a note payable to himself individually, can recover on tlie note : Comer V. Thompson, 4 U. C. 0. S. 256 (183(}). 8. A guarantee endorsed on a note at the time of its execu- tion in the following words: '* We guarantee the payment of the written note," does not show a sufficient consideration for the promise, the case being within the Statute of Frauds : Lock v. Reid, 6 U. C. 0. S. 295 (1842). 4. It is no defence to an action on a note to plead that it was given in payment of 200 hats and caps, and that tbey remained undelivered, without alleging that there was any default, neglect, or refusal on the part of the vendor : Anderson V. Jennings, 2 U. C. Q. B. 422 (1845). 5. Notes given to commissioners of a turnpike trust by the tenant, for rent on a lease beyond the powers of the commis- sioners cannot be collected, although the tenant was in possession for the full term of the lease: Ireland v. Guess, 3 U. C. Q. B. 220(1847). 170 BILLS OF EXCHANGE 27. i-, yi 6. A note given by A. to B. for a debt due by C, upon a consideration of forbearance, and upon no privity shewn between A. and C, cannot be enforced: McGillivray v. Keefer, 4 U. C. Q. li. 456 (1848). 7. A defence that the note was made to the holder as a gratuity and that the maker never received any consideration for it, is good: Poulton v. Dolmage, 6 U. C. Q. B. 277 (1849). 8. A debt due by a third party, but not yet payable, may form a valid consideration for a note : Dickenson v. Clemow, 7 U. C. Q. B. 421 (1850). 9. A pre-existing debt is a good consideration in whole or in part for a note or bill: Gooderham v. Hutchison, 5 U. C. C. P. 241 (1856); Hillis v. Templeton, 7 U. G. L. J. 301 (1861); Evans v. Morley, 21 U. C. Q. B. 547 (1862) ; Canadian Bank of Commerce v. Gurley, 80 U. C. C. P. 583 (1880). 10. A note promising to pay to the Toronto Church Society or bearer £50 towards the support of a bishop to be appointed to a western diocese, held to be founded upon a sufficient considera- tion : Hammond v. Small, 16 U. C. Q. B. 871 (1858). 11. A note was made by the secretary of an insurance com- pany in his own name for a loss, the policy being surrendered, and marked cancelled, and the note being payable three days after the loss would be payable according to the policy. Held, sufficient consideration : Armour v. Gates, 8 U. C. C. P. 548 (1859). 12. A pre-existing debt is a good consideration for a note, even although a mortgage on real estate had been taken to secure the same debt: Bank of Upper Canada v. Bartlett, 12 U. C. C. P. 288 (1862). 13. Defendant having endorsed a note for $1,250, to enable the maker to get as an additional advance the di£ference between that sum and the original loan of $918, advanced to him before the making of the note, which additional advance was, however, not made, it was held that defendant was not liable on the note for any sum: Greenwood v. Perry, 19 U. C. C. P. 403 (1869). CONSIDERATION. 171 com- Idered, days Held, 548 note, ten to irtlett, suable ktween [before ^ever, [e note 59). 14. Value arising at any time during the currency of a note ^ o?. is sufficient : Blake v. Walsh, 29 U. C. Q. B. 541 (1870). - 15., A note barred by the Statute of Limitations is a good consideration for a new note : Wright v. Wright, 6 Ont. P. R. 295 (1876). 16. A note payable on demand with interest held to be without consideration as to one of the makers, the note being for an old debt due by the other maker alone : Merchants' Bank v. Robinson: 8 Ont. P. R. 117 (1879). 17. When, after a note is completed, so far as the intention of the parties is concerned, it is signed by a third person, or is so signed by him after maturity, without any consideration moving directly to such third person, or any agreement to extend the time for payment, such third person is not liable thereon : Ryan v. McKerral, 15 0. R. 460 (1888). 18. Notes given to an insurance company for premiums subsequently earned, are given for a valuable consideration and valid : Wood v. Shaw, 3 L. C. J. 169 (1858). 19. A promissory note was given as an indemnity to a party assuming a liability for a third person. Held, that the payee could sue on the note as soon as troubled, and before paying the debt for which he had become liable : Perry v. Milne, 5 L. C. J. 121 (1861). 20. A dying man signed several cheques payable to the order of certain friends, and delivered them to his private secretary for the respective payees as parting gifts. He died before they were presented. Held, that the payees were entitled to payment of the cheques : Colville v. Flanagan, 8 L. C. J. 225 (1864). 21. A note given to a new firm, after the dissolution of the old, in satisfaction of a guarantee given to the old for advances made by them, was held to have been given in error and without consideration, and therefore void : Henault v. Thomas, 1 R. L. 706 (1868). ,Mlll 172 BILLS OF EXCHANGE li § 27. ^^' Where a tenant was partly deprived of the use of the premises by works carried on by the corporation of Quebec, but at the end of the year gave his landlord a note for the full amount of the rent, there was sufficient consideration for the note, although the landlord was suing the corporation for damages to '.e leased premises: Motz v. Holliwell, 1 Q. L. R. G4(18'j), 23. On a sale of tho stock of an insolvent made by the assignee, nominally to a third party, who in reality purchased for the insolvent, he accepted in part payment a note of the latter ; helJ. th^i 'here was consideration for the note : Lemieux v. Bourassr, 1 iA..v,-n 30'» (1881). 24. A pro; is,s'.; 7 aot^ given for consideration erroneously belie'f>d to be good ii. Ir »y, is noi valid: Riel v. McEwen^ Ramsay A C. '"^ '1S81). 25. Where a bon, maJe uo ; '.Jt^iit the value of a share in a business purchased by the plaintitt", was indorsed and transferred to the plaintiff by the vendor, the plaintiff could not sue the vendor on the bon while at the same time he retained the share acquired by him in the business, which was represented by the bon : Cridi- ford V. Buhner, M. L. R. 4 Q. B. 293 (1886). 26. A note given for a patent which is not a new and useful invention is void for want of consideration : Almour v. Cable, Ramsay A. C. 87 (1886). 27. Want of consideration being established and there being no evidence of the fact of a gift to bring the case within Colville V. Flanagan, stipm, No. 20, the note was held void : Molleur v. Roy, 31 L. C. J. 99 (1887). 28. A draft made by B. & Co. through their agent D., given to a bank in payment of another draft by W. on S. in favor of D. (subsequently dishonored by S.) discounted by the bank to pay a note due by reason of a transaction by which B. & Co. never profited, and of which they were ignorant is withoutconsideration, and no action lies against B. & Co.: Union Bank v. Bryant, 17 Q. L. R. 93 (1891). CONSIDERATION. 178 given •ofD. pay a never •atioHr |nt, 17 29. Where a note was given as part payment of a purchase S 27. of land under a verbal agreement of sale, the plaintiff cannot recover for want of consideration : Black v. Gesner, 3 N. S. (Thomson) 157 (1847). 80. Where a note was given on a verbal purchase of land of which the defendant took possession, held to be for a good consideration : Gray v. Whitman, 8 N. S. (Thomson) 157 (1857). 81. A purely moral consideration (affection and regard) does not constitute sufficient considevation for a promissory note : Baker v. Read, 1 N. S. D. 199 (1868). 82. A note was given in part payment of land when the deed was executed by plaintiff and his wife, and delivered ; but plaintiff's wife was to go before a J. P. to be examined separate and apart from her husband, which she refused to do. Held, that the delivery of the deed was a good consideration, and parol evidence of an agreement to vary the terms of the note should not have been received : Graham v. Graham, 11 N. S. (2 R. & C.) 265 (1876). 38. C. made an assignment under the Insolvent Act. One of the debts due him was by a woman whom he subsequently married. After her marriage the assignee induced her to give a note, the husband signing as a surety. Held, that there was no consideration for her giving the note : McDaniel v. McMillan, 11 N. S. (2R. &C.;405 (1876). 84. A deed of land was made by a father to one of his sons, who, at the father's request, gave his promissory notes payable to the other brothers respectively, the arrangement being for the purpose of distributing the estate of the father without a will. Held, that the payees could not recover on the notes for want of consideration mo^^ng from them to the maker : Forsyth V. Forsyth, 13 N. S. (1 R. & G.) 380 (1880). 35. A. who was indebted to plaintiffs, sold defendant a threshing machine, and took his note, which at A.'s request was made payable to plaintiffs. A. sent plaintiffs the note, but they •s 3 •I m i I WP ;ti 174 BILLS OF EXCHANOE \'^^' § 27. ^'^^^v nothing of the transaction foi' which it was given. Held, that they could not recover on the note for want of consideration moving from them to defendant : Cossett v. Cook, 17 N. S. (5 R. & G.) 84 (1884.) 86. Defendant gave his note to the city for arrears of rent on condition of his getting a lease on the same terms as the previous lessee. There was no power to lease except by auction. Held, that the defendant was not liable on the note : City of Fredericton V. Lucas, 8 N. B. (8 Allen) 588 (1857). 87. A note given to a brother of a deceased intestate by the person who received the estate, on the ground that if the deceased had left a will, he would have left his brother the amount of the note, is void for want of consideration : McCarroll v. Reardon, 9 N. B. (4 Allen) 261 (1859). 38. A note given by A. to his son-in-law B. by way of advancement to B.'s wife, held void for want of consideration : Thomas v. McLeod, 12 N. B. (1 Han.) 588 (1869). 89. A note was given by a son in payment of his father': debt. Held, that it was invalid for want of consideration : Street v. Quinton, 18 N. B. 567 (1879). 40. Where a note was given to an infant, nine years of agt, affection for the child and gratitude were held not sufficient con- sideration to bind the estate of the maker in favor of the payees : HoUiday v. Atkinson, 5 B. Si C. 501 (1826). See Fuller v. Lumbert, 78 Me. 325 (1886). 41. Cross acceptances for mutual accommodation are respec- tively considerations for each other: Cowley v. Dunlop, 7 T. R. 565 (1798) ; Newman v. Frost, 52 N. Y. 424 (1873). 42. A note for the price of land may be binding on the maker, although the contract is not binding on account of the Statute of Frauds: Jones v. Jones, 6 M. & W. 84 (1840). 48. A debt represented to be due, but not really due, is not a sufficient consideration : Southall v. Rigg, 11 C. B. 481 (1851) ; nor is the giving up of a void note : Coward v. Hughes, 1 K. & J. 448 (1855). I;: CONSIDERATION. 175 agt, con- espec- IT. R. f the 44. A promise to give up a bill thought to be invalid is a sufficient consideration: Smith v. Smith, 13 C. B. N. S. 418 (1868) ; as is also a debt barred by the Statute of Limitations : Latouche v. Latouche, 8 H. & C. at p. 576 (1865) ; Giddings v. Giddings, 51 Vt. 227 (1878). So is the bona tide compromise of a disputed claim, although it afterwards appears that the claim was wholly unfounded : Callisher v. Bischoffsheim, L. R. 5 Q. B. 449 (1870). 45. The voluntary gift of a sum of money is not a valid con- sideration : Hill V. Wilson, L. R. 8 Ch. at p. 894 (1878). 46. An agreement to pay a debt within three years is no consideration for giving a note payable on demand: Slott v. Fairlamb, 52 L. J. Q. B. 420, per Denman, J. (1888). 47. Actual forbearance from suing a thii'd party is a good consideration for a note, although there was no contract to forbear: Crears v. Hunter, 19 Q. B. D. 841 (1887). 48. The manager of a bank stole certain securities which he negotiated. He subsequently obtained them from the purchasers by fraud and returned them to the bank. Held, that the bank was a holder for value : London and County Bank v. London and River Plate Bank, 21 Q. B. D. 585 (1888). 49. A promissory note given for a mere moral obligation is not binding, but where the maker had made payments thereon, and afterwards became lunatic, the Court recognized it as a debt of honour to be paid out of the estate : t« re Whitaker, 42 Ch. I). 119 (1889). 50. Where a promise to pay £200 was supposed to be enforce- able, though not in fact so, a promis3ory note given to postpone payment of such sum was given for a good consideration : Kingsford v. Oxenden, 7 T. L. R. 18 (1890). 51. The accomplishment of the objects of an educational institution held to be sufficient consideration for a note : Wes- leyan Seminary v. Fisher, 4 Mich. 515 (1857) ; Roche v. Roanoke Seminary, 56 Ind. 198 (1877). 27. 17(5 §27. ■ \. I BILLS OF EXCHANGE 52. A note given in settlement of a civil suit for damages against the maker's brother, is founded upon sufficient consider- ation : Smith v. Richards, 29 Conn. 232 (1860). 58. When A. is indebted to B. and B. to C, and A. gives his note, in extinguishment of both debts, to C, there is sufficient consideration: Outhwite v. Porter, 18 Mich. 588(1865). 64. An agreement not to bring suit on ihe debt or on other liability of one person is a valid consideration for the commercial paper of another; Randolph v. Peck, 1 Hun 188 (1874) ; Abbott V. Fisher, 124 Mass. 414 (1878). 65. Subscriptions for stock in an incorporated company are a sufficient consideration for a note: Chetlain v. Republic Life Ins. Co. 86 111. 220 (1877)- 56. Mere forbearance, without an agreement to forbear, is not a sufficient consideration for a note : Manter v. Churchill, 127 Mass. 81 (1879) ; Smith v. Bibber, 82 Me. 84 (1889). But see No. 47, m\tra. 57. The compromise of a claim, which the party putting it forward knew was unfounded and illegal, is not a sufficient con- sideration : Ormsbee v. Home, 54 Vt. 182 (1881). Total failure of consideration.— Every party whose signature appears on a bill or note is presumed to have become a party to it for valuable consideration, but he may prove the contrary. If a total failure of considera- tion be proved, it is a good defence if the plaintiff and defendant are immediate parties, that is, if they con- tracted directly with each other, or even if they are remote parties, provided value has not been given for the bill. A total failure of consideration has the same effect upon the liability of the parties as an original want of consider- ation. ILLUSTRATIONS. 1. A. being seized in fee of lands, made jointly with B. a lease to C. taking notes from C. for the rent. The day after the CONSIDERATION. 177 ges ler- his lent ither ircial hbott are a I Life ear, is U, 127 lut see tting it t con- Ith B. a Ifter the execution of the lease A. died intestate, and then B. died and his § o?. executors sued C. on the notes. Held, that they could not recover, the consideration having wholly failed: Merwin v. dates, U. C. E. T. 7 Wm. 4 (1887). 2. When a stockholder in a joint stock company had given notes for his stock, which he afterwards forfeited by not com- plying with the conditions of the association, it was held, that there was not a failure of consideration, and it was no defence to an action on the notes: Glassford v. McFaul, U. C. T. T. 8 & 4 Vict. (1841). 8. Where a note was given for logs on condition that no claim should be made for the logs, and they were revendicated, there was a total failure of consideration and the note became null : Gamsby v. Chapman, 18 L. C. R. 289 (1862). 4. Where the discharge of an insolvent was annulled by the Court, the indorsers remained liable on the composition notes, and there was not a total failure of consideration : Marchand v, Wilkes, 8 L. N. 818 (1880). 5. A. appointed B. his executor and gave him a demand note to compensate him. B. died first and his executors sued on the note. It was held that there was a total failure of consideration and the action failed : Solly v. Hinde, (5 C. A P. 816 (1884). See Wells v. Hopkins, 5 M. & W. 7 (1889). 6. A. draws a bill at three months on B. in favour of C, to be paid for in seven days. B., who is A.'s agent, accepts on his account. C. does not pay A. He cannot sue B.: Astley v. Johnson, 5 H. & N. 187 (1860). 7. When bills are given for a cargo and owing to the inability of the acceptor to me^t the bills the cargo is sold by the drawer at a loss, the latter should sue for the difference in price, and not sue upon the bills which fail for want of consid- eration: Bevanv. Stevenson, 1 T. L. R. 587 (1885). 8. In a suit upon a renewal note total failure of considera- tion of the original note is available as a defence: Hooker v. Hubbard, 102 Mass. 239 (1869). m'c.b.e.a. — 12 178 BILLS OF EXCHANOK § 27. ^' '^^^^^ want of title constitutes a total failure of consid- ^ei-ation: Curtis v. Clark, 188 Mass. 509 (1882). Partial failure of consideration.— Where the con- sideration for a note has only partially failed, the question as to how far it may be set up as a defence, is largely a question of pleading. Formerly it would not be allowed in England or the provinces where the old English rules of pleading were followed. Now in England and Ontario it may be set up as a defence pro tanto as between the original parties, or between those who are in the same position, provided the failure be for a definite sum clearly ascertained. Failure of consideration should not be confounded with inadequacy of consideration. ^m i ILLUSTRATIONS. 1. Wliere a note was given on an exchange of horses, the maker, .viien sued on the note two years later, was not allowed to set up as a defence that the horse be received was not sound as warranted : Hall v. Coleman, 3 U. C. 0. S. 89 (1884). 2. In the following cases a partial failure of consideration was held to be no defence in actions on bills and notes between immediate parties : Dalton v. Lake, 4 U. C. 0. S. 15 (1834) ; Dixon V. Paul, 4 U. C. 0. S. 827 (1836) ; Kellogg v. Hyatt, 1 U. C. Q. B. 445 (1840) ; Matthewson v. Carman, 1 U. C. Q. B. 2(56 (1848) ; Brown v. Garrett, 5 U. C. Q. B. 248 (1848) ; Thomp- son v. Farr, 6 U. C. Q. B. 887 (1849) ; Orser v. Mounteny, 9 U. C. Q. B. 882 (1852) ; Spelman v. Robidoux, 1 R. C. 241 (1871) ; Brundige v. Delaney, 2 N. S. D. 62 (1870) ; Hill v. McLeod, 17 N. S. (5 R. & G.) 280 (1884) ; Mcintosh v. McLeod, 18 N. S. (6 R. & G.) 134, 6 C. L. T. 449 (1886) ; Whitman v. Parker, 18 N. S. '8 R. & G.) 155, 6 C. L. T. 448 (1885) ; Clarke v. Ash, 5 N. B. (8 Kerr) 211 (1846) ; Glennie v. Imri, 8 Y. & C. 486 (1889) ; Warwick v. Nairn, 10 Ex. 762 (1865). C0N8IDRRATI0N. 179 sound 8. In the following cases it was held, that the partial failure § 27. of consideration was not sufficiently definite or clearly ascertained to he allowed as a defence in part : Coulter v. Lee, 5 U. C. C. P. . (1856) ; Henderson v. Cotter, 15 U. C. Q. B. 845 (1868) ; ^leorgian Bay L. Co. v. Thompson, 85 U. C. Q. B. 04 (1874) ; Kilroy v. Simkins, 20 U. C. C. P. 281 (1876) ; Fletcher v. Noble, H 0. R. 122 (1885); O'Donohue v. Swain, 4 Man. L. R. 476 (1887) ; Day v. Nix, 9 Moore 169 (1824). In a number of the cases in this and No. 2, sujnut, the decision is based largely upon the technical rules of pleading that then prevailed. Undtir the modern Judicature Acts, it might in most cases be set up by way of counterclami. 4. In the following cases a partial failure of consideration, where the amount was definitely ascertained, was allowed as i defence pro tanto between immediate parties : O'Brien v. Ficht, IS U. C. Q. B. 241 (1859) ; Barber v. Morton, 7 Ont. A. R. 114 SI) ; Star Kidney Pad Co. v. Greenwood, 5 0. H. iiH (1884) ; ade V. Rolland, 10 L. C. J. 821 (1864) ; Fisher v. Archibald, 2 N. S. D. 298 (1871) ; Agra Bank v. Leighton, L. R. _ Ex. 56 (1866). Also between remote parties, where the plaintiff became the holder only after maturity : Rennie v. Jarvis, 6 U. C. Q. B. .S29 (1850) ; McGregor v. Bishop, 14 0. R. 7 (1887). 2. Where value has at any time been given for Voider for a bill, the holder is deemed to be a holder for value as regards the acceptor and all parties to the bill who became parties prior to such time : Imp. Act, s. 27 (2). The holder of a bill is the payee or indorsee of a bill payable or endorsed to his order, who is in possession of it, or the person who is in possession of a bill payable to bearer : section 2. The holder for value may not be a holder in due course : section 29 ; Raphael v. Bank of England, 17 C.B. at p. 174 (1855). He may have taken the bill or note after maturity and dishonor. He need not have given 180 BILLS OF EXCHANGE it " V •-^■^ § 27. ^ftlue himself, it is suDicient that some previous holder has done so, in order to enable him to recover on the bill from the prior parties : Milnes v. Dawson, 5 Ex. 948 (1850). For the rights of a holder, see section 38. Until value has been given for a bill it cannot be enforced against any of the parties even though it may have passed through the hands of a number of holders : Perry v. Rodden, 7 R. L. 477 (1873). ILLUSTRATIONS. 1. An iiidorsee without value is entitled to recover on a bill or note if any intermediate party is a holder for value : Wood v. Ross, 8 U. C. C. P. 299 (1859) ; Hunter v. Wilson, 4 Ex. 489 (1849) ; Oulds v. Harrison, 10 Ex. 579 (1854). 2. A bill is firawn payable to the order of the drawer, and the drawee accepts for the accommodation of the drawer, but subsequently receives value from him. The drawer thereby becomes a holder for value as against the acceptor : Burdon v. Benton, 9 Q. B. 843 (1847). 8. A. drew a bill on B. to the order tjf C, and delivered it to D., who received value for the bill from C, but who did not pay A. C. is a holder for value and can recover on the bill from A.: Munroe v. Bordier, 8 C. B. 862 (1849). As to lien. 3. Where the holder of a bill has a lien on it, arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien. Imp. Act, s. 27 (8). A lien is the right to retain possession of a thing belonging 'to another until a claim be satisfied. Where bills and notes are deposited as collateral security for a debt, the creditor acquires a lien upon them by contract : ex parte Twogood, 19 Ves. 229 (1812) ; ex parte Schofield, CONSIDERATION. 181 12 Ch. D. 337 (1879). If while they are in the possession § 27. of the creditor, the debtor contracts other debts, he will have, in the absence of agreement to the contx*ary, a lien on them by implication of law for the payment of these new debts : C. C. Art. 1975. In England a banker has a lien by implication of law on all bills or notes received from his customers in the ordinary course of banking busi- ness to secure any balance that may be due : Brandao v. Barnett, 3 C. B. at p. 531 (1846) ; Johnson v. Kobarts, L. R. 10 Ch. 505 (1875) ; Misa v. Currie, 1 App. Cas. at p. 569 (1876) ; London Chartered Bank of Australia v. White, 4 App. Cas. 413 (1879) ; re Bowes, 33 Ch. D. 586 (1886). If the amount of the lien is less than the note, the holder is a trustee for the pledgor for the difference : Keid v. Furnival, 1 Cr. & M. 538 (1833). not [mp. ILLUSTRATIONS. 1. A holder received a £30 note as security for a i'lO loan. He can only recover £10 from the accommodation maker: Strathy v. Nicholla, 1 U. C. Q. B. 82 (fH44). 2. The holder of promissory notes transferred by the payee as collateral security against a future liability on the holder's part for the payee, can collect the notes at maturity before that liability arises, and hold the proceeds to the extent of his liabihty : Ross v. Tyson, 19 U. C. C. P. 294 (1869). 8. When a $200 note is deposited as collateral to a dis- counted note of the same amount, it may be retained as collateral to a partial renewal of the discounted note for $17''5, and the latter not being paid the holder can recover $175 from the maker of the collateral note : Canadian Bank of Commerce v. Wood- ward, 8 Ont. A. R. 847 (1888). 4. A creditor who has received the promissory notes of third parties as collateral security, is not responsible to the debtor for Uiches with respect to the collection of ths notes cr want of 182 BILLB OF EXCHANGE M W •5 ■i\ S 27. ^^^^^^ to 'li6 debtor, unless the latter has been injured thereby : Ryan v. McConnell, 18 0. R. 409 (1889). • 5. Where a seller took customers' notes and hire receipts as collateral, discounted the notes with a bank, letting the bank know the circumstances, but not giving the receipts with the notes, the receipts were held to be accessory to the debt, and on default the bank was entitled to have them handed over: Central Bank v. Garland, 20 0. R. U2 (1H90); affirmed in Appeal, 18 Ont. A. R. 488 (1891). 6. Bills and notes held as collateral security may found a writ of attachment in insolvency against the maker : Hutchins V. Cohen, 14 L. C. J. 85 (1869). 7. The holder of a promissory note as collateral security for a loan is a holder for value within the meaning of Art. 2287 of the Civil Code : Exchange Bank v. Normand, 18 R. L. 59 (1884), 8. An agent holds a bill indc^-aed in blank. He fraudu- lently pledges it to a party who makes an advance on it in good faith. The pledgee can hold it against the principal for the amount due him: Collins v. Martin, 1 B. & P. VAS (1797). 9. A., the holder of a bill for iilOO, deposits it with B. as security for a running account. When the note matui'es there is a balance in A.'s favour, but subsequently there is a balance of JE50 against him. B. is a holder for value for £50 : Atwood v. Crowdie, 1 Stark. 488 (181(>). 10. Where a bill is negotiated from one person to another it will be presumed that it has been wholly transferred. He who claims that it was only pledged or deposited as collateral security must prove it: Hills v. Parker, 14 L. T. N. S. 107 (1860) ; re Boys, L. R. 10 Eq. 467 (1870). 11. If a banker negotiates a bill that he knows does not belong to his customer, no lien can attach: ex imrte Kingston, L. R. 6 Ch. 682 (1871). 12. A depositor has two accounts in a bank. He indorses a bill as collateral security for one account and draws for part of CONSIDERATION. the amount. He fails and the other account is overdrawn more than the balance of the bill. The bank is holder of the bill for full value : re European I'.ank, L. R. 8 Ch. 41 (1872). 13. Where a bill is discounted, the party discounting it does not hold it as collateral security, or as a pledgee, but is a holder for full value: re Gommersall, 1 Ch. D. 142 (1875); e.r /mrte Schofield. 12 Ch. D. 837 (1879). 14. The drawer of an accommodation bill indorses it as a security for a smaller sum. The acceptor fails. The indorsee can prove for the full amount of the bill, but cannot receive dividends in excess of the amount of the loan : ex parte Newton, 10 Ch. D. 330 (1880). 15. Accommodation paper may be pledged as collateral: Washington Bank v. Krum, 15 Iowa 53 (1803). 188 27. 28. -^11 accoininodatioii party fco a bill is a per- Acoommo- soii who has signed a bill as drawer, acceptor, or |Jf,^fy ^'^ * iiidorser, without receiving value therefor, and for the purpose of lendi)ig his name to some other person: Imp. Act, s. 28 (1). A bill may be drawn or indorsed by accommodation parties without being an accommodation bill. It is only wlien the acceptor of a bill or bhe maker of a note is an accommodation party, that it is strictly an accommoda- tion bill or note. The person accommodated need not be a party to the bill or note. Where an accommodation bill is paid in due course by the party accommodated the bill is discharged : section 59, s-s. 3. Where an accommo- dation bill is accepted, for the benefit of the drawer or an indorser, he is liable without presentment for payment protest, or notice of dishonor : section 46, s-s. 2 (c) and ((/) ; section 50, s-s. 2 (c) (4) and s-s. 2 (d) (3) ; section 51, H-B. 9. As to the negotiation of an overdue accommo- dation bill : see section 36, s-s. 2. Every party whose . :^ 184 BILLS OF EXCHANGE § 28. 9igDa.tui'e appears on a bill is prima facie deemed to have become a party for value, so that any person claiming to be an accommodation party must make clear proof of that fact : section 30 ; Morehouse v. Burland, Bamsay A. C. 280 (1875) ; Parker v. Fuller, ibid. 281 (1877). Where notes were agreed to be made and indorsed indiscriminately by a number of partners and the pro- ceeds to go to the benefit of the joint concern, they were held to be accommodation notes and one partner could not recover as holder from his co-partners : Bowes v. Holland, 14 U. C. Q. B. 316 (1867). Where there is a running account between the drawer t and drawee, and a bill is accepted, it is not an accommo- dation bill, even although the account was against the drawer at the time of acceptance : re Swan, L. R. 6 Eq., 356 (1868). Where the drawer and acceptor receive a commission for drawing and accepting the bill from a person who does not become a party to it, this is an accommodation bill : Oriental Financial Corporation v. Overend, L. B. 7 Ch. 142 (1871). An accommodation bill is not issued, within the mean- ing of section 64 of the Act (63 of the Canadian Act), until it comes into the hands of some person who can sue upon it: Engel v. Stourton, 5 T. L. B. 444 ; 53 .J. P. 535 (1889). His liability. 2. An accommodation party is liable on the bill to a holder for value; and it is nnmaterial whether, when such holder took the bill, he knew such party to be an accommodation party or not. Imp. Act, s. 28 (2). The rights of a holder for value have been defined in section 27, s-s. 2 and 3. An accommodation party occu- CONSIDERATION. 185 Ch. lean- ii pies the relation of a surety with respect to the person § 28. for whose accommodation he has become a party, and may set up any defence connected with the bill, that his princi- pal could. He may also be released by the holder giving time to the principal, if the holder is aware of the relation between them : Bechervaise v. Lewis, L. R. 7 C. P. 372 (1872). ""'" ILLUSTRATIONS. 1. A second accommodation indorser, who has paid a note, may recover from a prior accommodation indorser : Breeze v. Baldwin, 5 U. C. 0. S. 444 (18H7). 2. It is no defence by a maker of a note payable to bearer that it was made for the accommodation of a third party, and that plaintiffs hold it without value or consideration : Muir v. Cameron, 10 U. C. Q. B. 856 (1852) ; overruling on this point Strathy v. Nicholls, 1 U. C. Q. li. 82 (1844). 8. It is no defence by the maker that the plaintifi", indorsee, gave no value to the indorse! for his indorsement, or that be took the note knowing that it was indorsed for the accommoda- tion of the maker, without denying that he is a holder for value : Miller v. Ferrier, 7 U. C. Q. B. 540 (1850). 4. The indorser of a note to enable the maker to get goods from the payee is liable on an action by the payee : Mofiatt v. Kees, 15 U. C. Q. B. 527 (1858). See also Peck v. Pbippon, 9 U. C. Q. B. 73 (1852); Foster v. Farewell, 18 L'. C. Q. B. 440 (1855); Gunn v. McPberson, 18 U. C. Q. B. 244 (1859) ; Smith V. Richardson, 16 U. C. C. P. 210 (1865). 5. The bolder of a bill for value, notwithstanding his having subsequently become aware of its being an accommodation bill, may release the drawer without releasing the acceptor : City of (Uasgow Bank v. Murdock, 11 U. C. C. P. 188 (1861). 6. Accommodation indorsers, after the note on which they were liable bad matured, filnd a bill against the holder and maker to enforce payment against the latter. The relief prayed ■X'i a s'i 186 § 28. Holder in due oourtie, BILLS OF EXCHANGE was granted, and the maker was ordered to pay the costs both of the plaintiff and the 'holder of the note : Cunningham v. Lyster, 13 Grant, 575 (1867). 7. The holder of accommodation paper, knowing it to be such, may rank upon the estate of and discharge the indorsers, and then recover the balance from the accommodation maker : Lyman v. Dion, 13 L. C. J. 160 (1868). 8. The holder for value can recover from the accommoda- tion maker the amount of a note although he was aware of the fact when he took it, and was interested in the transaction out of which it arose : Beique v. Bury, 2 L. N. 160 (1880); Scott V. Quebec Bank, 7 L. N. 343 (1884). 29. A holder in due course is a holder who has taken a bill, coinplete and regular on the face of it, under the following conditions, namely : — (a.) That he became the holder of it before it was overdue and without notice that it had been pre- viously dishonored, if such was the fact ; {h.) That he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it: Imp. Act, s. 29 (1) (a) (b). " Holder in due course " is used in the Act as an equi- valent for the old expression, " bona Jide holder for value without notice." Holder has been defined in section 2 as the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof; and bearer as the person in possession of a bill or note which is payable to bearer. The rights and powers of a holder, and holder in due course respectively, are set out in section 38. A holder for value, who has taken a bill under circumstances that do CONSIDERATION. 187 lie 9(1) not meet all the conditions of the present section, has nil § 29. the rights of an ordinary holder, and in addition, those mentioned in sections 27, 28 and 58. In the negotiation of a bill to a holder in due course, the transferor frequently conveys greater rights than he himself possesses. The bill may have been without value in his hands, or void for fraud, illegality or other defect, but these are cured on its coming into the hands of a holder in due course : Whistler v. Forster, 14 C. B. N. S. 248 (1863). Complete and regular on the face of it— Such a bill must meet all the requirements of the definition in section 3, and. be without blanks, and not wanting in any material particular ; see section 20 and notes thereon. An undated bill is not invalid : section 3, s-s. 4 ; but it is irregular, especially if payable at a fixed period after date. A person taking a bill incomplete or irregular, even before maturity, and for full value in good faith, does not acquire the rights of a holder in due course. The fact of a cheque being post-dated does not prevent its being regular within the meaning of this section : Hitchcock v. Edwards, 60 L. T. N. S. 636 (1889) ; Carpen- ter V. Street, 6 T. L. E. 410 (1890). As to a bill bearing marks of cancellation, see section 62 and notes thereon. Not overdue. — The maturity of bills not payable on demand, is determined by the rules laid down in section 14 ; those payable on demai)). 1. On a settlement, part of the consideration for a note was that certain notes according to a schedule were to he handed over to the maker, and plaintiff fraudulently concealed the fact that he had not all the notes. Held, to be a good defence on the note: McCoUum v. Church, 8 U. C. O. S. 856 (1884). 2. When it waB alleged that a prior no^e had been obtained by fraud from the maker, and the note sued on given as a renewal, evidence of the alleged fraud is inadmissible in the action on the renewal: Dougall v. Post, 6 V. C. Q. B. 554 (184»). 8. Where a note was obtained in exchange for a bill drawn by shippers, but which the latter had no expectation or right to expect would be accepted by reason of their account being over- drawn and notice from the drawees, it was held that the note was obtained by fraud : Gooderham v. Hutchison. 6 U. C. C. P. 241 (1856). 4. Action on a bill drawn by K. upon and accepted by C. and indorsed to plaintiffs. A plea by C. that he was induced to accept by the fraud of the drawers and indorsers, and that it was indorsed to plaintiffs without value ; held to be a good defence : Bank of Montreal v. Cameron, 17 U. C. Q. B. 686 (1859). 5. A note was given to the payee and indorser for a share in a company for the sale of a patent alleged to be held by the payee. It was doubtful whether such company ever existed, or the maker of the note ever had a chance to join. Held, that the maker might set up the defence, that it was obtained fro him by fraud : Waddell v. -Jaynes, 22 U. C. C. P. 212 (1872). 6. A note given to plaintiff in consequence of threats to prosecute the maker for perjury and obtaining money on false pretences, cannot be recoveieu by him : Canada Farmers' M. Ins. Co. V. Watson, 25 U. C. C. P. 1 (1875). CONSIDERATION. 193 hare m Iby the Existed, |d, that fro 7. Where defendant's son had committed forgery and the S 09, notes sued on were given to phiintiflf to prevent the scandal becoming pubUc, they were held to be void: Doyle v. Carroll, 28 U. C. C. P. 218 (1877). H. Where a husband as the agent of his wife obtained a note by fraud, her title is defective, and a holder for value receiv- ing it after maturity cannot recover : Robertson v. Furness, 48 IJ. C. Q. n. 148 (1878). iJ. The defendant C. being in prison under indictment for assaulting plaintiff who had also sued him for damages, offered through his counsel, in settlement, an indorsed note for $1,000 which was accepted. The amount was held not to be dispropor- tionate to the injury. The civil action was withdrawn and the Judge in view of the settlement and reparation, inflicted a fine merely for common assault. Held, that there was no fraud, and no duress, and no illegal consideration, as the law had been vindicated: Kneeshaw v. Collier, 80 U. C. C. P. 265 (1879). 10. PlaintifY purchased from an alleged company 15 bushels of hull-less oats at $10 a bushel, and receiving the company's l)ond to sell 80 bushels for him at the same price. Defendant l)0ught plaintif!''s 80 bushels, giving his note for $800 and ;,'etting the company's bond to sell 00 bushels for him. The company sold defendant's notes to plaintiff. Both plaintiff and defendant knew this was only part of a series of transactions and that subsequent parties would be defrauded, the oats being worth no more than ordinary oats. Held, that the transaction was part of a fraudulent scheme, was contrary to public policy, and plaintiff's action properly dismissed : Bonisteel v. Saylor, 17 Ont. A '\. 505(1890). I on liaving acknowledged to have taken $25 from e latter by threatening to have the son arrested, ced mother to give a note for $400. Held, that there violence, fear and illegal consideration and she was not> i;iltle: Macfarlane v. Dewey, 15 L. C. J. 85 (1870). 12. Where a ere 'tor secured secretly the notes of the insol- v( nt for the balancf his claim, it was a fraud on the indorsers m'c.b.e.a. r.,|i I'? ,S'f 194 BILLS OF EXCHANOE § 29. ^^ ^^® composition notes and they were entitled to the benefit of '- this payment : Arpin v. Poulin, 1 L. N. 290 (1880). 18. Where an iUiterate man thought he was making his mark to a receipt, and plaintiff concealed the fact i.hat it was a promis- sory note, plaintiff cannot recover : Benoii ▼. Brais, 6 L. N. 842 (1883). 14. Where a person takes a note made or indorsed in a part- nership name, knowing that it was not made or indorsed for the purposes of the partnership, the onns is cast upon him of show- ing that the note was signed with the knowledge or assent of every member of the firm : Union Bank v. Bulmer, 2 Man. L. B. 880(1886). 15. Where the drawer of a bill gave it for a special purpose to a party who, instead of using it as directed, negotiated it after maturity, the person so acquiring it is not entitled to recover : Lloyd V. Howard, 15 Q. B. 995 (1860). 16. Where a son forged his father's name to certain notes and discounted them in a bank, tne forgeries being discovered, the bank pressed the father to give security which he did. Held, that the transaction was void on the ground of duress, and illegal consideration : Williams v. Bayley, L. R. 1 H. L. 200 (18C(J). 17. In an action on a note given for the compounding of a prosecution for perjury, it was held, following ex parte Wolver- hampton and S. Banking Co., 14 Q. B. D. 82 (1884), that the consent of the magistrate did not make the transaction a lawful one : Bull v. Copeland, 4 T. L. R. 139 (1887). Illegal consideration.— Consideratio'^ i are illegal which violate the rules of morality, which contravene public policy, or which are prohibited by statute. If part of the cousideration of a bill be illegal the instrument is vitiated altogether. A renewal, or the substitution of a new instru- ment for the old one will not cure the defect. C. p (j. claim Blacks Hende I- C. Jl \ • Sen€ •':<1; ] !lHH2;. i-! '-P Hi CONSIDERATION. ILLUSTRATIONS. 195 §29. See also illustrations under section 80, s-s. 2, and 38 (/>). 1. An agreement not to proceed in a prosecution for per- mitting unlawful gambling in a tavern, is an illegal consideration for a note : Dwight v. Ellsworth, 9 U. C. Q. B. 539 (1852). 2. Tn support a plea that a note was given in consideration of forbearance to proceed in a prosecution for felony, the particular nature of the charge should be proved : Henry v. Little, 11 U. C. Q. B. 296 (1H54). 8. A note given in consideration of a charge of felony being not proceeded with in Utah, is void and cannot be recovered on in Ontario: Toponce v. Martin, 38 U.C. Q. B. 411 (1H76). 4. It is no defence to an action on a note that the consider- ation was for pork speculations in Chicago, which are illegal by the laws of Illinois, the contract which was made in Ontario not being against its laws : Bank of Toronto v. McDougall, 2H L'. C. C. P. 845 (1878), 5. Defendant, a J. P., was arrested for embezzling fines belonging to the township. Plaintiff gave his note to the township and took the note of defendant and his wife, and the prosecution was abandoned. Held, that the plaintiff was in no better position than the township and the note was void for illegal consideration : Bell v. Riddell, 2 O. R. 2.') (1882) ; affirmed 10 Ont. A. R. 544 (1885). 6. Promissory notes to creditors for the balance of their claim for signing a deed of composition or discharge are void : Blackwood v. Chinic, 2 Rev. de Leg. 27 (IHOD); Sinclair v. Henderson, 9 L.C.J. 80(> (1866); Decelles v. Bertrand, 21 L. C. J. 291 (1877). Also a renewal of such a note : McDonald V. Senez, il L. C. J. 290(1877) ; Arpin v. Poulin, 22 L. C. J. :t:{l ; 1 L. N. 290 (1878); Wilkes v. Skinner, Ramsay A. C. 82 (1H82). m 1 1 i_ii__"!»p;^s^" 196 BILLS UF EXCHANGE I 1': || ll ^ 29. '^' ^ "^^^ given to raise money for corrupt purposes at an election v/here the maker was a candidate, is null : Gugy v. Lar- kin, 7L. C. R. 11 (1857). V 8. A note given as a wager on an election, held to be void : Dufresne v. Guevremont, 5 L. C. J. 278 (1869). 9. Notes given in excess of composition, held not to be void for illegal consideration : (Ireenshields v. Plamondon, H L. C. .1. 192 (1860) ; Perrault v. Laurin, 8 L. C. .J. 195 (1863) ; Martin v. Macfarlane, 1 L. C. L. .T. 55 (1865) ; Bank of Montreal v. Audette, 4 Q. L. R. 254 (1H7H) ; Lefebvre v. Berthiaume, 18 R. L. 325 (1889). 10. A note of a third party given by an insolvent to a creditor, to obtain his consent to the discharge of the insolvent is null and void : Prevost v. Pickel, 17 L. C. .1. 314 (1872) ; Leclaire v. Cas- grain, M. L. R. 3 S. C. 355 (1887). 11. A trader obtained from his creditors an extension of time, and a party indorsed the last instalment extension notes, on condition that he would pay into a bank a certain sum per week. He made an assignment before the indorsed notes became due, when about half their amount had been deposited. Held, that the consideration was not illegal, and the assignee could not claim this money without relieving the indorser from his liability: Normand v. Beausoliel, 2 Dorion 215(1882); affirmed, 9 S. C. Can. 711 (1883). 12. A note given to the collector of revenue for a fine is not null, although the fine belongs in part to the provincial treasury: Bois v. Gervais, 10 L. N. 195 (1887). 18. A note given as a subscription to an election fund for provincial elections is null: St. liouis v. Senecal, M. L. R. 5 Q. B. 882 (1889). 14. A note given in part for illegal sales of liquor is wholly invalid : Smith v. McEachren, 1 N. S. I). 299 (1868). Hit{litH of HvibBequent holder. 8. A holder, whether for vahie or not, wlio derives his title to a bill through a holder in due CONSIDERATION. 197 'H-il notes je is not reaaury "• I fund fov L. B- course, nnd who is not himself a party to any fraud § 29. or iUegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder. Imp. Act, s. 29 (8). It is only cue* who has been a party to the fraud or illegality, that is precluded from acquiring all the rights and privileges of a holder in due course. Previous notice or knowledge of the original defect in the bill is not sufti- cient. ILLrSTllATIONS. 1. The indorsee of a note },'iven for lottery tickets, who nceived it from a lunui I'ule holder for value witnout notice before maturity, can recover from the maker, even althouj^h ho know wliat the consideration was wlien he acquired the note : Wall- l.iidge V. Ik'cket, 18 U. C. Q. 1?. 85)5 (1H5(!). 2. Where a homi fiih' holder for value transferred a note to plaintiff, the latter was entitled to recover although he may have known of previous fraud in connection with the note : Clarkson v. Lrtwson, 14 r. C". Q. 15. (57 (iH.'iJ}). H. I?, indorsed a note for C. to renew another iu)te indorsed by him for C'.'s accommodation. C transferred the note for vidue to plttintitf, who knew no more than that C. was an accom- modation indorser ; there was no bad faith on pliiintitl's part. Held, that he was entitled to recover: Cros,--. v. Currie, ') Ont. A. 11. 81 (IHHO). 4. Atperson receiving after its maturity an iiceon)nu)dation note from a holder in due course, may recover from the maker : I'ichette v. Lajoie, 10 L. N. 2(J(; (1887). 5. A third party cannot recover from the maker the amor.nt (»r a promissory note obtained by fraud, if such third party was iiware of the fraud before the note was transferred to him, although the transfer was made by an indorser who took it * ir 198 BILLS OF EXCHAMOB iii d m I § 29. ^^^^^^ maturity in good faith and for value : Baxter v. Bruneau^ '- 17 R. L. 860 (1889). Contra, above clause of Act. 6. The indorsee of a note who received it after maturity from a holder in due course, is noc affected by tlie fact, that his indorser was aware before he transferred it to the indorsee that it had been issued by a partner in fraud of the partnership : McLeod V. Carman, 12 N. B. (1 Han.) 692 (1869). 7. The indorsee of a bill sues the acceptor who proves that he accepted for the accommodation of the drawer. This does not make it necessary for the indorsee to prove that he gave value : Mills v. Barber, 1 M. & W. 425 (1886). 8. A partner fraudulently indorses a firm bill to D. for a private debt. F. is aware of the fraud but not a party to it. D. indorses the bill for value to E., who accepts it in good faith. E. indorses it to F., who thereby acquires all E.'s rights. If he gave value for the bill he can sue all parties ; if he did not give value, he can sue all except E.: May v. Chapman, 16 M. & W. 855 (1847). See also Masters v. Ibberson, 8 C. B. 100 (1849) ; Marion Co. v. Clarke, 94 U. S. (4 Otto.) 278 (1876.) 9. C. by fraud induces B. to make a note in his favor, which he indorses to D. for value without notice. Subsequently D. indorses it back to C. for value. C. cannot collect the note from B.: Sawyer v.Wisewell, 91 Mass. 42 (1864). I'resunip- 30. Every party whose signature appears on a S^fRith. ^^^1 ^^ prima facie deemed to have become a party thereto for vahie : 2. And every holder of a bill is prima, facie deemed to be a holder in due course ; but if, in an action on a bill, it is adn; tted or proved that the acceptance, issue or subsequent negotiation of the \ bill is affected with fraud, duress, or force and fear, bMdi'nTf "P^ illegality, the burden of proof that he is such proof lies, ij^i^jgj. in ^„g course shall be on him, unless and CONSIDERATION. 199 from I party until he proves that, subsequent to the alleged( § 30. fraud or illegality, value has in good faith been t given for the bill by some other holder in due J course : Imp. Act, s. 30. A party to a bill who disputes his liability on the ground that he is only an accommodation party, or a surety for some other person, should make clear proof of such claim, even if the. bill contain the words " value received " or otherwise declare that value was given, the contrary may be proved by parol : see p. 38. Value is defined in sections 2 and 27, and holder in due course in section 29. " Illegality " in this section is used as the equivalent of " other unlawful means" and "illegal consideration" in section 29, s-s. 2. The latter part of sub-section 2 in the Imperial Act reads as follows : — " The burden of proof is shifted unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill." There is probably no difference in the effect of the two clauses. ILLUSTRATIONS. See illustrations under section 29, s-s. 2, and section 88 (/»). 1. Where in an action on a note payable to A. it was proved that B. indorsed it and brought it to A. who indorsed it for his accommodation ; Held, that want of consideration could not on these facts be inferred, as between the maker and B. and plaintiff' was not obliged to prove consideration : Mair v. McLean, 1 U. C. g.B. 455 (1841). 2. In an action on a note where defendant pleads no con- sideration, he must impeach it, the plaintiff need not prove it in tlie first instance : Sutherland v. Patterson, U. C. M. T. 6 Vict. (1842). aoo BILLS OF EXCHANGE § 30. ^' ^^^''0 ^ ^^^ is obtained by fraud or affected by illegality on the part of an indorser, plaintiff must prove that he is a bona Jide indorsee for value: Maulson v. Arrol, 11 U. C. Q. B. 81 (1868). 4. Where the indorser indorsed the note while in blank, thsre being no maker's name, or any sum or payee expressed, and it appeared that the maker's name was afterwards signed without authority ; held, that the indorsee suing must shew himself a hona fide holder for value : Hanscome v. Cotton, 15 U. C. Q. B. 42 (1857). 5. Where there is fraud in obtaining a note, the law on slight grounds, will presume that the indorsee had knowledge of the fraud, especially if he omitted to satisfy himself as to the validity of the note : Hunt v. Lee, 8 Rev. de Leg. 880 (1818). 6. Proof of fraud in the making of the note, casts upon the holder a third party the burden of showing that he is a honu jid« holder for value : Withall v. Ruston, 7 L. C. R. 899 (1857). 7. Where a note is obtained by fraud, and the holder does not show how it came into his possession, or that he gave value for it, he will be presumed to have been aware of its fraudulent origin* Robinson v. Calcott, Ramsay A. C. 88 (1876). 8. The presumption created by the words *' value received " is not only destroyed by proof that the note was obtained from the maker by fraud, but the presumption then is that the trans- feree before maturity has not given value and is not owner of the note : Baxter v. Bilodeau, 9 Q. L. R. 268 (1888). 9. Where a note is transferred by indorsement before maturity, but it is proved that it was obtained from the maker by fraud, it does not come under the general rule laid down in Art. 2287 C. C, and the onus of showing that he is in good faith falls upon the holder : Belanger v. Baxter, L. N. 418 (1888). , 10. Where a note was obtained from the maker by fraud and without consideration, the holder cannot recover unless he proves that he received the note before maturity, for good and valuable consideration, and in ignorance of the circumstances CONBIDERATION. 201 it was given: Dumas v. Baxter, 14 R. L. 45)0 (^ jq^ under «vhich (1885). 11. Where defendant's signature was obtained to a note by fraud, under circumstances which were matter of public noto- riety when the note was transferred to B., for whom plaintiff is suing on the note, it must be proved that B. gave value : Exchange Bank v. Carle, M. L. R. 8 Q. B. (U ; 81 L. C. J. 90 (1887). 12. The holder of a note sues the maker. It is proved that it was given for an illegal consideration. Plaintiff must prove that he gave value : Bailey v. Bidwell, 18 M. & W. 78 (1844). 18. The indorsee of a note sues the maker, who proves that it was given for a wagor, which is a consideration void by statute, but not prohibited under a penalty. Plaintiff is not obliged to prove that he gave value: Fitch v. Jones, 5 E. tt B. 28H (iHrt'}). 14. A firm sued as acceptors prove that it was signed by one partner for a private debt in fraud of the others. Plaintiff' must prove that he is a holder for value : Hogg v. Skeen, 18 C. B. N. S. 42() (1806). 15. The owner of a negotiable instrument which has been stolen has no title to it against a hnmi fiilc holder for value, although he has prosecuted the thief to conviction : Chichester v. Hill, 52 L. J. Q. B. 100 (1882). 10. Where authority was given to fill in tlie name of a firm as drawers of a bill, and a partner filled in his own name as .Irawer and accepted the bill in the firm name in fraud of the partnership, the latter was held not liable, as the holder had not exercised due care and did not prove that he had given value in good faith : Oakley v. lioulton, 5 T. L. R. (50 (1HH8). 17. Where there was evidence that the acceptor of a bill had liandod it to L. to get it discounted for him, but instead of doing so, L. had fraudulently handed it to the drawer who negotiated it, the burden of proof is on the holder to prove both that value had been given, and that it had been given in good faith without notice of the fraud : Tatam v. Haslar, 28 Q. B. D. 845 (1889). 202 BILLS OF EXORANOB § 30. ^^' Sub-section 2 of section 80 of the Imperial Act, does not afifect or vary the practice of the Chancery Division in dealing with an application for an injunction to restrain the negotiation of a bill of exchange, and an acceptor or holder who applies for an injunction in such a case, even though he alleges fraud, must still be prepared, as formerly, to pay the amount of the bill into court or give security : Hawkins v. Ward, W. N. Nov. 29th, 1890, p. 203. The sub-section relates to the proceedings at a trial, and the shifting of the burden of proof after evidence has been given of fraud, etc : Hawkins v. Troup, 7 T. L. R. 104 (1890). UsuriouH coiiniilera- tiou. 3. No bill, although given for a usurious con- sideration or upon a usurious contract, is void in the hands of a holder, unless such holder had at the time of its transfer to hiui actual knowledge that it was originally given for a usurious consider- ation, or upon a usurious contract : The Imperial Act does not contain any provision similar to this, which is taken in substance from B. S. C. c. 123, s. 17, where however it applied to Ontario alone, having been enacted for Upper Canada when the usury laws were in force there, and not having been repealed before the present Act. There was a similar provision for Quebec in Art. 2335 of the Civil Code. It is now practically obsolete in Canada. The Act, 53 Vict. c. 34, s. 2, which immediately follows the present one in the statutes of 1890, and which came into force on the day of its assent, May .16th, 1890, repealed all the subsisting usury laws, which remained in force from old provincial enactments, and which were embodied in the Revised Statutes of Canada as chapter 127, with varying provisions applicable to the provinces of Ontario, Quebec, Nova Scotia and New Brunswick respectively. Now any individual or corporation, in the absence of some special statutory prohibition, may stipulate for, allow, and exact, on hav( OONSIDBBATION. 208 bills and notes, or on any other contract or agreement any § 30. rate of interest or discount which is agreed upon : R. 8. C. c. 127, s. 1. By sections 80 and 81 of the Bank Act, 53 Vict. c. 31, chartered banks are not allowed to take more than seven per cent. They do not however incur any pen- alty or forfeiture for usury. The clause would protect the holder in Canada of a foreign bill, which might have been void for violation of the foreign usury laws. It will be observed that it is not merely a holder in due course, or even a holder for value that is protected ; but any holder who had not at the time of the transfer to him of the bill, actual knowledge of the illegality. imilar 123, been force Act. 335 of inada. ws the into ed all from ied in arying uebec, >w any pecial act, on 4. Every bill or note the consideration of which consists in whole or in part, of the purchase money of n rjatent rif^ht, or of a partial interest, limited geographically or otherwise, in a patent right, shall have written or printed prominently and legibly across the face thereof, before the same is issued, the words " given for a patent right :" and without such words thereon such instrument and any renewal thereof shall be void, except in the hands of a holder in due course without notice of such consideration : For H I m tent ii«lit. 5. The indorsee or other transferee of any suchp'*'''] ityof ran'iferee. instrument having the words aforesaid so printed or written thereon, shall take the same subject to any defence or set-off in respect of the whole or any part thereof which would have existed between the original parties : 204 DILLS OF BXOHANOB Hilt § 30. (')' Every one who issues, sells or transfers, by iviiftity indorsement or delivery, tiny such instrument not havinj( the words "■ ^iven for a patent ri^ht " printed or written in nninner aforesaid across the face thereof, knowin*^ the consideration of such instrument to have consisted, in whole' or in part, of the purchase money of a patent ri^dit, or of a partial interest, limited geographically or otherwise, in a patent ri«jfht, is ^Miilty of a misdemeanor, and liable to imprisoninent for any term not exceeding' one year, or to such tine, not exceeding' two hun- dred dollars, as the court thinks tit. H. S. ('. c. 128, ss. VI, 18, 14. These provisions are not in the Imperial Act and were not in the bill as introduced into the House of Comtnons, but were reluctantly inserted by the Minister of Justice at the urgent request of certain members of that House: Commons Debates, 18J)0, pp. 105, 1416 and 1520. The first Canadian statute on the subject was passed in 1884, 47 Vict. c. 38, and embodied the above clauses, with the exception of that part of sub-section 4, following the words " given for a patent right," which declare that any such bill or note not hearing the prescribed words, and any renewal thereof, shall be void, except in the hands of a holder in due course without notice of such consideration. These words were added to the clause to override the interpretation placed upon the original Act as embodied in II. S. C. c. 123, by the Ontario Common Pleas Divisional Court in the case of Girvin v. Burke, 19 0. R. 204 (1890), a decision which was rendered while the Bill was before Parliament : Senate Debates, 1890, p. 465. In that case it was held, that the omission of the prescribed words in a CONSIDERATION. 205 by not the inch )art, of a A'ise, and Imu- S. c. \ were iinons, tice at House : The 1884, litli the ■ words J such [nd any 8 of a iration . ide the idled in visional ll890), a before case it •da in a note or r newal note did not render it void as between the ^ 30. maker and the payee, and that the intention of the Act was to (^ive the indorsee or transferee notice, and to put him in the position of the payee as to any defence which the maker might have against a claim by the payee. In this the Court followed a decision in Pennsylvania on a Himilar statute: Haskell v. Jones, 86 Penn. St. 173 (1878) ; where Chief Justice Sharswood said : " By the express pro- vision of the statute the only effect of the insertion of such words, is that such note or instrument in the hands of the purchaser or holder, shall be subject to the same defences as if in the hands of the original owner or holder." Under a statute on this subject where the rights of a holder in due course were not in express terms protected, as they are in our Canadian Act, it was held that if the patent right consideration were not expressed in the note, a bona fide holder would be protected according to the gen* eral principles of the law merchant : Palmer v. Minar, « Hun (N. Y.) 342 (1876). The general purpose of the Act is to restrict its pro- visions to the civil rights and remedies relating to bills and notes. This is adhered to in every other section, and provisions for the punishment of the forgery of bills and other frauds in connection with them, have not been inserted in the Act, but are to be found among the crim- inal statutes. Sub-section 6 is the only exception to this rule. This led to the further anomaly of the insertion of the word " note " in this part of the Act which relates to bills of exchange, instead oMeaving it to the operation of section 88, as it was not thought desirable to leave a crim- inal offence to implication, or the operation of incidental legislation : Senate Debates, 1890, p. 464. 206 §31. BILLS OF KXCHANOB 11*4 tion of iUllH. Negotiation of Bills. Sections 81 to 88 inclusive treat of the negotiation of bills. The Act only treats of the negotiation or transfer of bills according to the law merchant, that is, by delivery when a bill is payable to bearer, and by indorsement and delivery when it is payable to order. Other methods by which negotiable bills may be trans- ferred, or the methods by which non-negotiable bills may be transferred are not considered at all. These are left to the operation of the ordinary laws. It is to be observed that by none of these other methods can a transferee become a holder in due course or acquire greater rights than were possessed by the transferrer. Thus bills, whether negotiable or non-negotiable, may pass by death, by assignment in bankruptcy, by ordinary execution, by gift, by donatio mortis caiiaa, or by any method recognized by the law of any of the provinces. 31. A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill : Imp. Act, s. 31 (1). " Holder " has been defined in section 2 as the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof. He need not be the owner, he may have it merely for discount, collection or the like, or may even hold it unlawfully ; so that the negotiation of a bill or note is not necessarily a sale of the instrument, but may be a pledging or a mere transfer of possession, pro- vided the transferee is in a position thereby to acquire the NEGOTIATION. 207 m of nafer ivery t and trana- B may left to Berved Qsferee rights e, may rdinary )y any tea. iterred status of a holdw as abov» defined. A» to the rights of a § 3X, holder, see section 38. In Crouch v. Credit Foncier, L. R. 8 Q. B. (1873) at p. 381, Loi'd Blackburn speaks of negotiation as follows: — In the notes to Miller v. Race in Smith's Leading Cases, where all the authorities are collected, the very learned author says : " It may therefore be laid down as a safe rule, that where an instrument is by the custom of trade transferrable. like cash, by delivery, and is also capable of being sued upon by the person holding it pro tevipore, then it is entitled to the name of a negotiable instrument, and the property in it passes to a bona fide transferee for value, though the transfer may not have taken place in market overt. Bills of exchange and promissory notes, whether payable to order or to bearer, are by the law mer- chant negotiable in both senses of the word. See also Wookey v. Pole, 4 B. & A. at p. 10 (1820), and Swan v. N. B. Australasian Co. 2 H. «& C. at p.l84 (1863). Where a merchant in London, England, drew upon a firm in Toronto, who accepted payable in London, it was held that the bill was not negotiated in Upper Canada within the meaning of the statute 12 Vict. c. 76 : Foster V. Bowes 2 U. C. P. R. 256 (1857). 2. A bill payable to bearer is negotiated by delivery : Imp. Act, s. 31 (2) ; C. C. 228(5. A bill is payable to bearer when it is expressed to be so payable, or when the only or last indorsement is in blank : section 8, s-s. 3. Delivery means the transfer of possession, actual or constructive, from one person to another : section 2. As to the conditions under which a valid delivery takes place, see section 21. Where the holder of a bill payable to bearer, negotiates it by delivery without indorsing it, he is ciilied a " transferrer by delivery ": section 58. See that To lieai'tir. 208 BILLS OF EXCHANGE t , ■ ,1*'!' § 31. section and the notes thereon as to the liability of a person who negotiates a bill by delivery. The hnlder of a bill payable to bearer may indorse it before delivering it, and he then becomes an indorser and liable as such, but in such a cas<> the indorsement is no part of the negotiation but precedes it : section 56. To order. i notarial note. 8. A bill puyable to order is npgoti.ited by the indorsement of the holder completed by delivery : Imp. Act, s. 81 (3) ; C. C. 2286. A bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular perscii, and does not contain words prohibiting transfer, or indicating an intention that it should not be transferable : section 8, s-s. 4. The conditions necessary to a valid in- dorsement are set oub in section 32, and the different kinds of indorsement in sections 34 and 35. The indorsement and delivery must be by the same person. The delivery in order to be effectual must be made either by or under the authority of the party indorsing: section 21, s-s. 2 (a). ^here the payee of a note indorsed it in blank before his death, and his executrix delivered it to plaintiff, it was held that the latter could not recover . Bromage v. Lloyd, 1 Ex. 82 (1847) ; Clark v. Boyd, 2 Ohio 56 (1825) ; Clark v. Sig- ourney, 17 Conn. 511 (1846). In Quebec a promissory note executed before notaries and payable to order, ir, negotiable by indorsement in the ordinary way : Morrin v. Legault, 8 L. C. J. 55 (1859). It may be negotiated by a special indorsement, but not by an indorsement in blank : Brunet v. Lalonde, 16 L. C. B. 847 (1866). But held later by. the Court of Review that such instruments are ordinary promissory notes : Marc Aurele V. Dnrocher, 5 R. L. 165 (1873). Negotiation in this sub-section is a transfer by the NEGOTIATION. 909 §31. Iiitlorse- meiit. law merchant, and has no reference to a transfer that may take place in various other yrays, as by sale and assipin- ment, by transmission, by death, by will, or by gift. A bill of exchange was indorsed to the order of the Bank of Nova Scotia at Amherst, and by the agent at Amherst to the order of the Bank of Nova Scotia at Halifax " for collec- tion." It was dishonored by non-payment and returned to the agent at Amherst, who sold it to L. without indorsing it. L. was sued by the assignee of the drawers, and pleaded the bill by way of set-off. Held, that he could not do so without indorsement : Forsyth v. Lawrence, 19 N. S. (7 R. fc G.) 148; 7 C. L. T. 174 (1886). Plaintiff sued on notes alleging himself to be the holder. The payee had indorsed them, but his indorsement was erased. Held, that plaintiff had shown no title : Hempsted V. Drummond, 10 L. C. R. 27 (1859). On the death of the holder of a bill payable to his order all his rights pass to his executors or personal representatives who may negotiate it by indorsement : Uawlinson v. Stone, 3 Str. 1260 (1746). So also if a bill be made payable to a dead man in ignorance of bis death : Murray v. E. I. Co., 5 B. & A. 204 (1821). 4. Where the holder of a bill payable to his ^);',\^);'j»' order transferH it for value without indorsing' it, th« trausfer f^ives the transferee such title as tlie trans- tVrrer had in the bill, apd the transferee in addition a('(|uires the ri^^ht to have tlie indorsement of the transferrer: Imp. Act, s. 31 (4). Such transfer may be made to a purchaser or to a pledgee. While the bill remains payable to the order of the transferrer, the transferee is not the holder of the bill, even if ha has given full value for it. Even if he receive m'c.b.e.a. — 14 iiii'iit. 210 OILLH OF RXCIIANGIC tH.i. 1^ I § 31. it before maturity, he cannot become a holder in due course, and does not acquire a better title than the transferrer had. He holds the bill subject to any defect of title in the trans- ferrer, of which he becomes aware before the indorsement of the bill to him, and if it is not indorsed before maturity, it is subject to any defects of title that existed in the transferrer. This is in accordance with principle. In the interest of commerce, the law makes an exception to the general rule, which is that no person can give to another greater rights than he himHelf has. ' This excep- tion being part of the law merchant, it applies only where a transfer takes place according to the law merchant, and the law merchant does not recognize any transfer of a bill payable to order, except by indorHcnient. Hcotciiiaw. In a Scotch case where the payee of a bill transferred it for value without indorsing it, it was held that the trans- feree was entitled to recover from the acceptor: Hood v. Stewart, 17 Court of Session Canes, 749 (1890). In a Quebec case, Dupuis v. Marsan, 17 L. C. J. 42 (1872), it was 'lold that the transferee of a note for $85 payable to order, could become the holder without indorse- ment by the payee, and that he might prove the transfer by parol under Art. 1284 of the Civil Code, which says that proof may be made by teBtiinony in all matters in which the sum in question does not exceed ^fiO. In auother Quebec- case it was held, that where the payee of a note, pa;,li«(aii()ii to f,'^[;|fi'JJ' iiKlorsc a hill in a reprcsentativt' capacity, he may"^"'''" indorse tlic hill in such terms as to negative per- sonal liability. Imp. .\ct, s. :il (;">). This sub-section would be applicable where bills or nc*p' were made payable to the order of persons, who di- J ox ■••Ht j'eir capacity before indorsing them, when executors, ack i 'i Tators, tutors or curators would require to do bo. Indorsing in such capacity' wcuid ordinarily relieve them from personal liability: section 2(> ; but it would be prudent in these cases to add such words as " without recourse " or "without recourse to me personally": section 1«; ej- parte Mowbray, 1 Jac. it W. 428 (1820) ; Watkins V. Maule, 2 Jac. & W. 248 (1820). 32. An indorsement in (t of a bill by a separate writing r re Barrington, 2 Scho. & Lef. 112 (1804) ; ex parte Harrison, 2 Brown C. C. 615 (1789;. The latter may be a transfer of all the rights of the holder to the transferee, but it does not operate as a commercial negotiation under the law merchant, to which the law accords special privileges, one of them being that the holder may give to his transferee greater rights than he himself has, when ihe latter is in the position to become a holder in due course. ILLUSTUATIONS. 1. The holder of i note writes on th(j hack ' I bequeath — pay the within to 1>. or his order, at my death " signs it and gives INDOnSEMBNT. 218 Mitchell V. Smith, 88 § 32. it to 1). This is not an indorsement L. J. Ch. 596 (1864). 2. The following on the back of bills and notes over the signature of the indorser has been held to be a valid mdorse- nient : — " I hereby sell and assign all my interest in the within note to B.": Sears v. Lantz, 47 Iowa G")H (1878) ; Shelby v.Judd, 24 Kansas, 161 (1880) ; Hatch v. Barrett, 84 /7m/ 228 (1885). 8. In Michigan it has been held that the words, " I transfer my right, title and interest in the within note to V.'over the signature of the indorser on the buck of a note, do not operate as a commercial indorsement, but only as an ordinary assignment, and if for value before maturity, do not give the transferee any higher or greater rights than the transferee possessed : Aniba v. Yeo- mans, 39 Mich. 171 (1878). This has been criticised and not followed in other States : 1 Daniel, j 688. An indorsement written on an allonge, or on a Aiionge. " copy " of a bill issued or negotiated in a country where " copies " are recognized, is deemed to be written on the bill itself; Imp. Act, s. 82 (1). An allonge (literally lengthening or elongation) is a paper attached to the bill to receive indorsements, when there is no longer loora for them on the hack of the bill itself. Copies of bills are not used in England, Canada or the United States ; but on the continent ot Europe where the practice of drawing bills in sets is not followed, copies are sometimes used for convenience of transfer while the ori- Kiual is being forwarded for acceptance : Nouguier, § 208. (b.) It must be an indorsement of the entire bill, no »'»rti»i A partial indorsement, that is to say, an indorse-"""" iiient which purports to transfer to the i)id()rsee a )>art only of the amount payabk\ or which purports '^■5-*" 214 BILLS OF BXCHANOE § 32. to transfer the bill to two or more indorsees sever- ally, does not operate as a ne^'otiation of the bill ; Imp. Aet, s. 82 (2). There may be a partial acceptance of a bill : section 19, s-s. 2(6). An indorsement of such a bill would be valid, as it would be an indorsement of the entire bill as accepted. An indorsement of part of tbe bill does not constitute the indorsee a holder or give him tbe rights of a holder. A person who has made himself liable on a bill cannot be compelled to defend two actions on it instead of one. See Hawkins v. Cardy, 1 Ld. Uaym. 300 (1704); Jones V. Broadhurst, 9 C. B. 173 (1850) ; Heilbut v. Neville, L. R. 4 C. P. at p. 358 (18<)9) ; Miller v. Hledsoe. 2 III. 530 (1838). All iiiUHf iiitlorH«>. II' ((•.) Where a 1)111 is paviihle to the order of two or more payees or indorsees who nre not j)artners, iill iiMist indorse, unless the one indorsinj^ has authority to in(b)rse for tli • others: Imp. Act, s. 82 (8). This clause is an example of tho '^ustom of merclmnts having overc 'ne the law as laid down by the judges. In the case oi arvick v. Vickery, 2 Douglas 653 n. (1781), action WKH brought upon a bill drawn by two persons, not partners, payable " to us or our order " and indorsed by only one of them in his own name. Tbe full coort unani- mously set aside a non-suit, Lord Manstieid r^tnarking that tluj drawers by making the bill payable " to our order " had made themselves partners as to this trans- action. At tbe new trial the defence stated and offered to prove, that bv th«' universal usage and understanding of all tb>' bankers and merchants in London, the indorse- luent was bad, because not signed by both payees. The IND0R8EMBNT. 216 jury, ttna voce, declared they knew it perfectly to be as ^ 32, Htated, und without hearing a witness found a verdict for defendant. Where one party has the authority of the other and indorses in his name, it is in effect indorsed by both, HO this is no exception. In the case of a partnership, a partner is presumed to have authority to indorse a bill payable to the order of the firm. •2. Where, in a l)ill payai)le to order, the payee •^,'|r''>'**"' "!• indorsee is wronj^ly desij^Mmted, or his imnie is misspelt, ht» may indorse the bill as therein (lescril)e(l, addin^^ his proper si^natnre ; or lie ntay indorse i)v his own proper si^nuitnre : Imp. .\et, .. :ti(i).' In the Imperial Act when a payee or indorsee is wrongly designated or his name is misspelt, and he indor- ses the bill as described, he may or may not, at his option, add his proper signature, the words, " if he thinks fit,"' Itiing inserted after the word " adding." These words were struck out in the Senate on the ground that if a person indorsed a bill otherwise than regularly in his own name, he should be required t > aill by such wrong name or designation alone, it would no doubt be held to be a valid negotiation of the bill, as he would be presumed to have adopted that as his proper name. It can perhaps hardly be said that there is any very Manner well settled rule as to the manner in which indorsements »ient. wv Pi-; 216 BILLS OF BXOHANOK § 32. '^:l ■f ■ ■■* I. Orilerof iu- iloripiiieiit. should be made. It is important that the signature should follow as closely as practicable the form of the name as given in the bill or special indorsement. The following will probably be found to be in accordance with the best commercial usage : — Use the christian name or initials as in the bill or special indorsement if there be no mistake in the name as there given and no misspelling, dropping all prefixes and suffixes, such as " Mr." " Mrs." " Miss," " Messrs." " Hon." " Esq." etc. Where for the purpose of identification, an addi- tion follows, such as " merchant," " M. D." " M. P." " Q. C." or the like, it may be well to add this to the signature. A bill to the order of Mrs. John Smith may be indorsed " Mary Smith wife of John Smith ;" or a bill " to the estate of John Jones, or order " by "A. B., executor or adminis- trator late John Jones;" a bill "to the order of the Gitv Treasurer, Toronto " by " A. C, City Treasurer, Toronto ;" a bill to the order of "The Canada Gas Co.," by "The Canada Gas Co., per E. F., Manager ;" a bill " to the order of John Smith & Co.," if by a partner should be indorsed simply " John Smith & Co." and if by another person authorized by the firm " John Smith & Co., per G. H. Atty." or " per pro. G. H." Signatures such as the following should be avoided, partly on the ground of ambiguity, and partly on account of the danger of the agent or representative making him- self personally liable- — "A. B., agent for C. D.," "Pet proc. E. F., G. H.," " J. K. for the L. M. Co." " J. K. for L. M. & Co." " J. K., for the estate of L. M." 8. Where there are two or more indorseiiieiits on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved : Imp. Act, s. 82 (5). il INDUR8EMBNT. 217 n •' the )ther Each indorser undertakes to compensate the holder or § 32. subsequent indorser who is compelled to pay the bill : section 55, s-8. 2. As between themselves they may agree that this liability shall not exist or even that it may be reversed ; but such an agreement would not affect the bona fide holder of a note who may treat the prior parties as liable in the order in which they stand on the note, although a contrary agreement, of which he was aware when he took it, may exist between the parties : Elder v. Kelly, 8 U. C. Q. B. 240 (1861) ; McLean v. Gamier, 14 N. S. (2 it. & G.) 482 (1881). This agreement may be pro^ <{ by parol : Wordsworth V. McDougall, 8 U. C. C. P. 408 (1850) ; Day v. Sculthorpe, 11 L. C. R. 2G9 (1861); Leveille v. Daigle, 2 Dorion 129 (1880); Willett v. Court, 6 L. N. 204 (1883); Scott v. TurnbuU, ibid. 897 (1883) ; Deschamps v. Leger, M. L. R. 3 S. C. 1 (1886) ; Wilders v. Stevens, 15 M. & W. 208 (1846) ; • Coolidge v. Wiggin, 62 Me. 568 (1873). 4. An indorsement nmy be made in blank orspeoiAi •' ^ iiiuorH(>- special, may also contain terms making it restric-"""" tive: Imp. Act, s. 82 (0). For indorsements in blank and special indorsements, Hee section 34. For restrictive indorsements, see section .S.J. Ihim- 33. Where a bill purports to be indorsed t^-on-^,"!"),'^';^;;" ditionally, the condition may he disregarded by the payer, and payment to the indorsee is valid, whether the condition has been fulHllcd or not. Imp. Act, s. 38. An absolute indorsement is one by which the indorser liinds himself to pay, upon no other condition than the failure of prior parties to do so, and due notice to him of such failure, and protest when required by law. A condi- nieiitH. 218 BILLH OF EXCHANUK 1. CIlHIIKU ill IllW. 4 § 33. tit^iin^l indorsement is one by which the indorser annexes some other condition to his liability. Sometimes the con- dition is precedent and sometimes subsequent. Thus, " pay to A. or order if he lives until he is 21," or " if he is alive when the bill becomes due," is an indorsement upon a condition precedent. " Pay to A. or order, unless before payment I give you notice to the contrary," is upon a con- dition subsequent. A condition attached to the indorsement does nut restrain the negotiability of the bill. This section alters the law. In England where the acceptor of a bill paid the indorsee who held under a con- ditional indorsement, the condition not havinp; been ful- filled, he was obliged to pay a second time : Robertson v. Kensington, 4 Taunt. 80 (1811) ; Savage v. Aldren, 2 Stark 232 (1817). In Quebec the same rule prevailed: "An indorsement may be restrictive, qualified or conditional, and the rights of the holder under such indorsement are regulated accordingly ": C. C. Art. 2288. The new rule is much more equitable, as it was manifestly unfair to impose, for example, the duty upon an acceptor of determining whether or not a condition that hud been placed upon the bill after his acceptance, and by parties of whom he might know nothing, nad been fulfilled. By paying he ran the risk of being compelled to pay a second time ; by refusing, his paper would go to protest, and lie be exposed to costs. It is to be observed that the section does not give the holder the right to compel payment if the condition is not fulfilled, it only discharges the person who pays. If the condition is not fulfilled the holder who receives payment may be responsible tc the prior indorser who made the conditional indorsement. A bill of exchange mast be unconditional : sections !) and 11, s-8. 2; e,n acceptaLce like an indorsement may be conditional : section 19, s-s. 2. rec'ogr except the ho Corn, law wa l>ankei A tavi I 'at ten V. Sco that Mank «H (18^ l>ill or be ind( 111 the INnURSKMKNT. 21!) 34. All indorseiiieiit in l)laiik spcciticH no in- § 34 (l()rH(»e, and H bill ho indorsed Ixn'onicH |)jiyal)lr to|,„i„r«e bearer: Imp. Act, s. :J4 (1). iiitMit 111 lilHiik. An indorHement in blank consistH simply uf the Hi^;- nature of the indorser. When so indorsed it may l»> negotiated by delivery : section !U, s-s. 2, unless or until the blank indorsement is converted into a special indorst*- mcnt : section 34, s-s. 4. The rule of this 8ui)-soction has long been recognized as law in England : Peacock v. lihodii), 2 Douglas G:)8 (17H1). By the old French law indorsements in blank were not recognized : Pothier, Change, No. 38 ; nor are they now except as *' i)in(inuitiim8" and not as negotiations of bills, the holder being merely the agent of the indorser : Code de Com. Arts. 137, 138. In Lower Canada the old French law was modified by 17 (leo. 4, c. 2, which allowed notes of l)ankers, merchants and traders to be indorsed in blank. A tavern keeper's note was held to be within the Act : Patterson v. Welsh, 2 Uev. de Leg. 30 (1819) ; McHobeits V. Scott, 2 Rev. de L^g. 31 11821); and it was held tliat only bankers, merchants and traders could indorse in blank : Bank of Montreal v. Langlois, 3 Rev. de Leg. HS (1847). By 12 Vict. c. 22, s. 1, it was enacted that any 1)111 or note payable to the order of any person might be indorsed in full or in blank, and this was embodied in the Civil Code as Article 228G. •2. A special indorsement snecities the person toiji"''"' '»• whom, or to whose order, the bill is to be payal)le: Imp. Act, s. ;J4 (2). A special indorsement or indorsement in full is so lulled because the indorser not only signs his name but "^ IMAGE EVALUATION TEST TARGET (MT-S) 1.0 I.I 1.25 In 1^ 1^ ll.n IP 14 1^ 1.8 LA. iiiili.6 V V] Photographic Sciences Corporation 23 WEST MAIN STREET ^ WEBSTER, NY. 14580 (716) 872-4503 "^ 'Q, 1 ~3F ' 'I' 220 BILLS OF EXOHANaS § 34, states in whose favor the indorsement is made. It may he ~ in any of the following forms : " Pay to A. B." which gave the right to negotiate the hill while a hill in that form was not negotiable : Edie v. East India Co., 2 Burr. 1216 (1761) ; or " Pay A. B. or order ;" or " Pay to the order of A. B." which last is equivalent to the preceding, as it enables A. B. to demand payment without indorsing, or to indorse the hill at hi^ option : section 8, s-s. 5. See Soares v. Glyn, 9 Q. B. 24 (1845) ; Harmer v. Steele, 4 Ex. 15 (1849) ; Robarts v. Tucker, 16 Q. B. 579 (1851) ; Law V. Parnell, 7 C. B. N. S. 285 (1859). A French indorsement must he dated, must declare how value has been given, and give the name of him in whose favor it is made : Code de Com. Art. 137. IT I " 3. The provisions of this Act relating to a Applica- tion of dom^.'"' payee apply, with the necessary modifications, to an indorsee under a special indorsement : Imp. Act, s. 34 (3). Each indorsement is like a new drawing of the bill ; if in blank, it is as if the new drawing were in favor of bearer; if special, as if it were iti favor of the indorsee. The chief provisions of the Act made applicable to an indorsee by this clause, are that he must be named or clearly indicated by his ofl&ce or otherwise, that a bill may be indorsed to two or more indorsees jointly, or to one of two or more, and that the indorsee may either demand payment of the bill h mself or again indorse it specially or in blank : sections 7 and 8. Conversion of blank in 4. Where a bill has been indorsed in blank, any dorsenient. j-j^j^gj. ^^^,^^ conveit tlic blank indorsement into a special indorsement by writing above the indor- ser's signature a direction to pay the bill to or INDORSEMENT. 221 ,ybe gave I was 1216 ler of as it or to See jteele, .851) ; leclare tiim in to a nis, to Imp. «U u I' . to the order of himself or somt other person. § 34. Imp. Act, s. 34 (4). • If the holder make the bill payable to himself he must indorse it, in order to negotiate it; he may however by writing over the signature of the last indorser the direction that it be paid to another person, do so without making himself liable as an indorser: Vincent v. Horlock, 1 Camp. 442 (1808) ; Hirachfield v. Smith, L. R. 1 C. P. 340 (1866). In such a case the indorsee takes the bill as specially indorsed to him by the last indorser, and the person giving him the bill would incur the liability only of^'^*' a transferrer by delivery. The person in possession of a French bill indorsed in blank, may, if he has given value, in the same manner complete the indorsement in his own favor, and so consti- tute himself a holder of the bill : Nouguier, §§ 747, 748. If there are several blank indorsements the holder may convert the first into a special indorsement without dis- charging the subsequent indorsers : Bank of British N. A. V. Ellis, 2 Federal Reporter 46 (1880). Striking out indorsements.— A holder may not only convert a blank indorsement into a special one, but he may also strike out any number of blank indorsements. Any indorser subsequent to one so struck out is dis- charged : Wilkinson v. Johnson, 3 B. & C. 428 (1824); Meyer v. Jadis, 1 M & Rob. 247 (1883). He cannot strike out special indorsements, through which he has to make title. He cannot strike out a special indorsement and in- sert his own name : Porter v. Cushman, 19 III. 572 (1858). The former Quebec rule is found in Article 2289 C. C. Indorsements for collection may be struck out by the owner of the bill, and its possession after dishonor by an indorser with his special indorsement struck out, is oJy jui^i '4- ; : 7 •¥ 222 BILLS OF EXCHANGE § 34 ]»inift facie evidence that he took up the bill on its ^ dishonor, although there was no re-indorsement to him: Black V. Strickland, 3 0. R. 217 (1883); Callow v. Lawrence, 3 M. & S. 95 (1814). Kestrictivo indorse- ment. 35. An indorsement is restrictive which pro- hibits the further ne^^otiation of the bill, or which expresses that it is a mere anthority to deal with the bill as thereby directed, and not a transfer of the ownership thereof, as, for example, if a bill is indorsed "Pay D. only," or "Pay D. for the account of X.," or "Pay 1)., or order, for collec- tion": Imp. Act, s. 35 (1). A restrictive indorsement indicates that the indorsee is merely an agent to receive the money, and that he is not a purchaser of the bill. He cannot sell or pledge the bill except in the case mentioned m sub-section 3 of this section, and all subsequent indorsees are subject to the same restriction. An indorsement in favor of a person named, as " Pay I).," was not restrictive before the Act, when the same words in the body of a bill or note would have rendered it not negotiable: Acheson v. Fountain, 1 Str. 557 (1723); Edie V. E. I. Co., 2 Burr. 1227 (1761) ; Cunliffe v. Whitehead, 8 Bing N. C. 829 (1837) ; Gay v. Lander, 6 C. B. 886 (1848). An acceptance " in favor of D. only," is not a qualified acceptance : Decroix v. Meyer, [1891] A. C. 520. The meaning of adding the word " only" in the acceptance in that case was that it was a bill of which D. was the only drawer : per Lord Esher, 25 Q. B. D. at p. 348. The adding of the word, however, in an indorsement makes it restrictive according to this section. The examples given are not tlie only words that render an indorsement restrictive, any others which show that the indorsee is not a purchaser of | the bill are equally effective. Where a wife, separated from ift'i ' 1 its him : w V. pro- vhich with fer of bill is )!• the :'ollec- INDORSBMENT. her husband, received notes of third parties in settlement of the amount to be paid to her, with the indorsement that they were not to be sold, her indorsee could not recover on them : Wilson V. McQueen, Rob. & Jos. Ont. Digest, 491 (1840). A method adopted by some with cheques about to be deposited in a bank is to indorse them " For deposit only," to prevent any person acquiring them in good faith, in case they should be lost or stolen before reaching the bank. Even if the indorsee, under a restrictive indorsement, has given full value, he cannot sue the indorser on the bill Williams v Shadbolt, 1 C. & E. 529; 1 T. L. R 417 (1885) AVhite v. National Bank, 102 N. S. (12 Otto) 658 (1880) Third Nat. Bank v. Nat. Bank, ibid. 663 (1880). < 223 35. orsee is is not a the bill of this t to the ILLUSTRATIONS. The following are examples of the restrictions referred to in this section :-- 1. "Pay D, only": Byles, p. 180; Randolph, § 725. 2. " Pay D. for the account of X.," or " for my use," or "for the use of X.," or the like: Evans v. Cramlington, 2 Ventris 807 (1687); Snee v. Prescott, 1 Atk. 247 (1748); Ancher v. Bank of England, 2 Douglas, 687 (1781); Treuttelv. Barandon, 8 Taunt. 100 (1817); Sigourncy v. Lloyd, 5 Bing. 525 (1829); Wedlake V. Hurley, 1 C. & J. 83 (1880) ; Wilson v. Holmes, 5 Mass. 543 (1809) ; Blaine v. Bourne, 11 R. 1. 119 (1875) ; Hook v. Pratt, 78 N. Y. 371 (1879); White v. National Bank, s«^>r« ; First Nat. Jiank V. Reno Co. Bank, 8 Fed. Rep. 257 (1880). 3. "Pay D. or order for collection": Williams v. Shadbolt, ^iiio-ii ; Sweeney v. Easter, 1 Wall. 106 (1863) ; Merchants* I'.ank V. Henson, 53 Am. Rep. 5 (1884). The holder under a restrictive indorsement cannot strike out indorsements on the bill : C. C. Art. 2289 ; Barthe v. Armstrong, 5 R. L. 272 (1885) ; Mayer v. Jadis, 1 M. & Rob. 247 (1833). 224 BILLS OF EXCHANOE I i;8,,"i m w- ';'k § 35. An indorsement is not restrictive on account of its con- 'taining a statement of the transaction out of which it arcSse : Potts v. Reed, 6 Esp. 57 (1806) ; or of being for " value in account with A": Murrow v. Stuart, 8 Moore P. C. 267 (1853) ; Buckley v. Jackson, L. R. 3 Kx. 135 (1868). Kicht of indorsee ligli lido there- under. If further transfer is 2. A restrictive iiidorseiiieiit gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorizes him to do so : 3. Where a restrictive indorsement authorizes authorized. f^jj.|.j-^gj. transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the hrst indorsee under the restrictive indorsement. Imp. Act, s. 85 (2) (3). If the restrictive indorsement be in favor of the indorsee ** or order," this gives him authority to trans- fer the bill, but always subject to the same restriction as in the indorsement to himself: Munro v. Cok, 30 U. C. Q. B. 363 (1870) ; Lloyd v. Sigourney, 5 Bing. 532 (1829). The relation between the restrictive indorser and indorsee is that of principal and agent, so that if the acceptor pay the indorser the indorsee cannot recover from him, although he may have given value for the bill : Williams v. Shadbolt, C. & E. 529 (1885). Such indorser is sometimes spoken of as a trustee, but this is true only so far as an agent or bailee is a trustee : Cook v. Lister, 13 C. B. N. S. 597 (1863) ; re Hallett's Trusts, 13 Ch. D. 708 (1879). I cann HolJi Hun conti I'estri or otl A 1 words it shoi origin person As t I'nder t indorser indorsee negotiab or bear to thei '^lieir c wliich tile writi could no Quebec B r ( i "fft'ctin" "<» perso '■mf NEGOTIATION. 2-25 to In some of the United States a restrictive indorsee § 35^ cannot sue in his own name: Rock Co. Nat. Bank v. HoUister, 21 Miun. 385 (1875) ; Iselin v. Rowlands, 30 Hun 488 (1883). 36. Where a bill is negotiable in its origin, it ];'^'^^[^,ii,,3 continues to be negotiable until it has been (a) vHTho!'^ restrietively indorsed or (/>) discharged by payment or otherwise : Imp. Act, s. 80 (1). A bill is not negotiable in its origin which contains words prohibiting transfer, or indicating an intention that it should not be transferable. A bill negotiable in its origin is one made payable to bearer, or to a particular person or to his order : section 8. As to what is a restrictive indorsement, see section 35. Under the Quebec Civil Code which recognized restrictive indorsements, it was provided by Art. 2288, that "no indorsement other than that by the payee can stop the negotiability of the bill." A cheque payable to C. M. & S. or bearer, was indorsed by them and stamped for deposit to their credit in the bank where they kept their account. Their clerk, instead of depositing it, took it to the bank on which it was drawn and the teller paid it without noticing the writing on the back. It was held, that such a cheque could not be restrietively indorsed : Exchange Bank v. Quebec Bank, M. L. R. 6 S. C. 10 (1890). due "2. Where an overdue bill is negotiated, it can Nck-Dtm lie negotiated only subject to any defect of title ".-n!" affecting it at its maturity, and thencefoi'vvard 110 person who takes it can acquire or give a better m'c.b.e.a. — 15 226 BILLS OF EXCHANGE U'-: )|i:3r § 36. title than that which had the person from whom ~~~ he took it : Imp. Act, s. 36 (2). Overdue. — A bill payable on demand is deemed to be overdue when it appears on its face to have been in cir- culation for an unreasonable length of time : section 36, s-s. 3. A note payable on demand is not deemed to be overdue for the purpose of this sub-section by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue : section 85, s-s. 3. A time bill or note is overdue after the expiration of the last day of grace : Leftley v. Mills, 4 T. R. 170 (1791). Defect of title.— This phrase was introduced into the Imperial Act as a substitute for the old expression "equity attaching to the bill," as the latter term was unknown in Scotch law. The corresponding provision in the Quebec Civil Code is found in Art. 2287 : " The transfer of a bill by indorsement may be made either before or after it becomes due. In the former case the holder acquires a perfect title free f'om all liabilities and objections which any parties may have had against it in the hands of the indorser ; in the latter case the bill is subject to such liabilities and objections in the same manner, as if it were in the hands of the previous holder." The chief " defects of title" are fraud, duress, force or fear, or other unlawful means in obtaining the bill or the acceptance thereof, illegal consideration, or negotiation in breach of faith : section 29, s-s. 2; or being given for a patent right: section 30, s s. 4 ; or set-off or compensation. Where a bill has been discharged by payment or other- wise and is improperly negotiated after maturity, this is not strictly speaking, a defect of title, as the bill is no longer a bill. NEGOTIATION. 227 ILLUSTRATIONS. §36. 1. Where plaintiif took a note after maturity from a holder who had agreed that it should be set otf against a bond, he took it subject to this defence : Broke v. Arnold, Taylor U. C. 25 <1828). 2. The admissions of the holder of an overdue note are admissible, without calling him, against plaintiff, to whom he subsequently transferred it : Myers v. Cornell, 2 U. C. Q. B. 279 (1846). 8. Where an overdue note is transferred, and there has been a partial failure of consideration, such failure is a good defence liro tanto : Eennie v. Jarvis, 6 U. C. Q. B. 329 (1850). 4. Where a note was given to a person to get discounted for the maker, and he discounted it after maturity for his own benefit, it is a good defence : Kerr v. Straat, 8 U. C. Q. B. 82 (1851). 5. The indorsee of a bill or note is liable to such equities only as attach to the bill or note itself and to nothing collateral due from the indorser to the maker, or indorsee to payee : Wood v. Ross, 8 U. C. C. P. 299 (1859) ; Metropohtan Bank v. Snure, 10 U. C. C. P. 24 (1860); Hughes v. Snure, 22 U. C. Q. B. 597 (1868) ; Canadian Securities Co. v. Prentice, 9 Ont. P. R. 324 (1882) ; Ferguson v. Stewart, 2 U. C. L. J. 116 (1856). 6. Where an agent of the holder disposes of an overdue note, without authority, though for value, the purchaser obtains no title against the principal: West v. Maclnnes, 23 U. C. Q. B. H57 (1864) ; Lloyd v. Howard, 15 Q. B. 995 (1850). 7. A valid agreement to give time is an equity which attaches to a bill as against a person taking it after maturity : Britton v. Fisher, 26 U. C. Q. B. 838 (1867). ' 8. An agreement not to negotiate a note after maturity is an equity attaching to such note when overdue : Grant v. Win- stanley, 21 U. C. C. P. 257 (1871) ; Parr v. Jewell, 16 C. B. 684 (1855). 1. pt. 228 BILLS OF BXCHANQK ■ I § 36. *^' '^^^ holdei of an overdue note agreed to let a board bill go in reduction. Held, that a subse(|uent transfer is subject to this claim : Clung v. Jeftery, 12 Ont. A. R. 4B2 (IHHf.). 10. Where the plaintiff received the note sued on after maturity without consideration and was merely an agent, the maker has a right to set up all matters he could have pleaded against the real owner, and also to obtain a reduction of the usurious interest included in the note and of payments made on account thereof: i3rooks V. Clegg, 12 L. C. R. 4()1 (1H(J2). 11. Where the payee of a note after its maturity indorsed it in part payment of goods to a third party, the latter took it subject to all the ecjuities that had arisen meantime between the maker and payee: Duguay v. Seneeal, 1 L. V. h. J. 26 (18(55). 12. A person receiving by indorsement a note after it was due, held it under Art. 22H7 C. C, subject to the ol)jections to which it was liable in the hands of the indorser. This article (lifters from the law of England which makes the indorser liable only to the equities attaching to the note itself, that is to the equities arising out of the transaction in the course of which the note was made, but not to those arising out of a collateral matter: Amazon Ins. Co. v. Quebec and Gulf Ports S. S. Co. 2 Q. L. R. 310 (187G). As to law of England see Whitehead v. Walker, 10 M. & W. (JOG (1842); Oulds v. Harrison, 10 Ex. 572 (1851). 18. Where a person indorsed a note at the request of the payee on the understanding that he was not to be held liable, he is not liable to a party to whom the payee afterwards indorsed it after it was due : McQuin v. Sorrell, 7 N. B. (2 Allen) 140 (1851). 14. A. made a note payable to his own order, and indorsed and delivered it to his son-in-law B. as a gift by way of advance- ment to B.'s wife. B. transferred it for value after maturity. Held, that the holder could not recover from A.'s executors as the note was void for want of consideration and he took it sub- ject to that defect : Thomas v. McLeod, 12 N. B. (1 Han.) 588 (1869). NKOOTIATION. '22D 15. A note is made payable for an illegal consideration. After 5j gg maturity the payee indorses it. The indorsee cannot recover from the maker : Amory v. Merryvveather, 2 B. it C. 578 (1824). 16. The indorsee of an overdue note is liable in an action against the maker, to all equities arising out of the note transac- tion itself, b'lt not to a set off in respect of a debt due from the indorser to the maker of the note, arising out of collateral matters: liurrough v. Moss 10 B. & C. 558 (1880). 17. Part payment is an equity which attaches to a bill : Graves V. Key, 8 B. & Ad. at p. 81«J (1882). 18. The fact of a bill being an accommodation bill, is not an e(]uity attaching to it in the hands of a holder to whom the drawer, who is also payee, has indorsed it after maturity: Stein V. Yglesias, 1 C. M. & 11. 505 (1H84). 19. The fact that a bill is an accommodation bill does not prevent its being negotiated after maturity. A plea to that effect by the acceptor in an action by the indorsee, held bad : Hturtevant \. Ford, 4 M. & G. 101 (1842) ; ex jxtrte Swan, L. R. G Eq. 844 (1868). 20. A plea that a previous action was begun by another person and is pending, is no defence to an action on a note brought by a holder who acquired it after maturity : Deuters v. Townsend, 5 B. & S. 618 (1864). 3. A bill payable on demand is deemed towheubiu 1)6 overdue within the meaning and for the pur- "''•"■'^"^• pose of this section, when it appears on the face of it to have been in circulation for an unreason- able length of time ; what is an unreasonable length of time for this purpose is a question of fact : Imp. Act, s. 30 (3). As to this sub-section, Chalmers says, p. 118 : " There appears to be no Enp;lish or American case as to a bill, but the enactment is probably declaratory." It will 280 BILLS OF exchanoe; i §36. ,1.4 , .' be observed that the rule here laid down is only for the purpose of this section, and not the purpose of the statute of limitations, prescription, interest or the like. The rule here laid down was adopted in Eng- land before the Act of 1882 with regard to cheques, which are bills of exchange drawn on a bank, payable on demand : Down v. Hailing, 4 B. & C. 330 (1826) ; Koth- schild V. Corney, 9 B. & C. 388 (1829) ; Serrell v. Derby- shire By. Co., 9 C. B. 811 (1850) ; London & County Banking Co. v. Groome, 8 Q. B. D. 288 (1881). To determine what is a reasonable time the judge or jury should take into consideration all the facts of the case : section 40, s-s. 8. This sub-section does not apply to promissory notes payable on demand which have been negotiated : sec- tion 85 s-s. 3. 4. Except where an indorsement bears date after the maturity of the bill, every negotiation is prima facie deemed to have been effected before the bill was overdue : Imp. Act, s. '6Qi (4). If the indorsement bears a date, it is presumed to be the true date of indorsing. If undated, it is presumed^ to have been indorsed before maturity and either on the date of the bill or within a reasonable time thereafter. In any of such cases the contrary may be proved : see Lewis V. Parker, 4 A. & E. 838 (1836) ; Parkin v. Moon, 7 C. & P. 408 (1836) ; Bounsall v. Harrison, 1 M. & W. 611 (1836) ; Good v. Martin, 95 U. S. (5 Otto) 94 (1877). TakiuR bill 5. Where a bill which is not overdue has been Bubsequent honor. dishonored, any person who takes it with notice of the dishonor, takes it subject to any defect of title attaching thereto at the time of dishonor; PreHuiup- tion aH to negotia- tion. •!■;<, NEOOTIATION. 231 but nothing" in this sub-section shall affect the § 36. rights of a holder in due course. Imp. Act, s. Si) (5). This may happen in case of non-payment of a bill payable on demand, or of non-acceptance of aiiotber bill, when the bill bas not been noted or protested. If taken with notice it is open to the same objections as an overdue bill. In England before the Act, there were con- flicting decisions. The rule laid down in Crossley v. Ham, 13 East. 498 (1811), and O'Keefe v. Dunn, 6 Taunt. 805 (1815) has been adopted, and that in Goodman v. Harvey, 6 Nev. & Man. 372 (1836), rejected. As to notice, and holders in due course : see sections 29 and 38. 37. Where a bill is negotiated back to the jj^{;°»}*^,„ drawer, or to a prior indorser, or to the acceptor, TuK^S such party may, subject to the provisions of this theruon. Act, re-issue and further negotiate the bill, but he is not entitled to enforce the payment of the bill against any intervening party to whom he was previously liable. Imp. Act, s. 37. A bill is negotiable until it is restrictively indorsed Of dischar^^ed by payment or otherwise : section 36, s-s. 1, As to restrictive indorsements, see section 35 ; and as to discharge, sections 59-63. Loon, ILLUSTRATIONS. 1. Where a note overdue has been retired and settled by a renewal note, it cannot be put in circulation again, even by the payee, who has taken up the renewal note out of his own funds, at least so as to make a subsequent indorser liable : Cuvillier v. Fraser, 5 U. C. Q. B. 152 (1848). 2. The drawer of a bill payable to his order specially indorsed it. It subsequently came into his hands after maturity. 282 BILLS OF EXCHANGE ■ Mz -:V .!* ,■;»' 1-^1 '%■ "'il 8 37 He struck out all the special indorsements, and indorsed it — to plaintiif who sued the acceptor. Held, that he was entitled to recover : Black v. Strickland, 8 0. R. 217 (1883). 8. A bill was paid after maturity by the drawer who waived protest and indorsed it. Held, that he was liable to the indorsee jointly and severally with the acceptor : Hovey v. Nolin, 18 R. L. 489 (1889). 4. As to a bill negotiated back to the drawer, see Bishop v. Hayward, 4 T. R. 470 (1791) ; Wilders v. Stevens, 16 M. & W. 212 (1846) ; Woodward v. Pell, L. R. 4 Q. B. 65 (1868) ; to a prior indorser, Foster v. Farewell, 18 U. C. Q. B. 449 (1856) ; Moflfatt v. Rees, 15 U. C. Q. B. 527 (1858) ; Gunn v. Macpher- son, 18 U. C. Q. B. 244 (1859) ; Morris v. Walker, 15 Q. B. 594 (1860) ; Wilkinson v. Unwin, 7 Q. B. D. 686 (1881) ; to the acceptor before maturity, Attenborough v. Mackenzie, 26 L. J. Ex. 244 (1866). 5. One of two joint makers of a note to whom it is negotiated back, cannot re-issue and further negotiate it, so as to make the other joint maker liable : Hopkins v. Farewell, 82 N. E. 429 (1855) ; Patch v. King, 29 Me. 448 (1849). Rights of the holder :| 38. The rights and powers of the holder of a bill are as follows : — (a ) He m>iy sue on the bill in his own name : Imp. Act, s. 38 (1). The " holder " of a bill has been defined in section 2 as the payee or indorsee who is in possession of it, or the bearer thereof; and " bearer" as the person in possession of a bill or note which ia payable to bearer. As there pointed out, the holder need not be the owner ; it is sufficient for him to be in possession and entitled at law to recover or receive its contents from another. If a note is non-negotiable in its origin, the payee alone can be the holder ; if negotiable in its origin any person 1. ^ legacj ««ed thj "Session ^ier estal (1867). 2. ill their I BIGHTS OF HOLDER. 288 I it s6to wbo 3 the jy V. lop V. &W. , ; to a L856) ; icplier- B. 594 to the 5 L. J. m it is e it, so ''areweU, Ider of name to whom it is negotiated, until it is restrictively indorsed § 38. or discharged, is the holder. If a holder sues on a note, and he is not the owner hut is merely acting for another, any defence that could be set up against the real owner is available against him : Biron v. Brossard, M. L. R. 2 S. C. 105 (1880): Lee v. Zagury, 8 Taunt, 114 (1817) ; re Anglo Greek Navigation Co., L. R. 4 Ch. 174 (1869) ; Thornton v. Maynard, L. R. 10 C. P. 695 (1875). This section furnishes one of the tests of whether or not an instrument is negotiable. If it may pass by delivery or indorsement as provided in section 31, and if the holder who so acquires it can sue upon it in his own name, then it is in the proper sense of the term a negotiable in- strument, and has the special privileges accorded to such instruments by the law merchant. The right to sue upon a bill accrues upon its dishonor for non-acceptance: section 43, s-s. 2; or for non-payment: section 47, s-s. 2. As to an action on a lost bill or note, see section 69. In the case of the death of the holder of a bill, his executor or personal representative would have the same right to sue as he himself would have had. So also would the assignee or trustee of a bankrupt holder. ;ion 2 as or the pssession I As there ler; it is lat law to lyee alone ly person ILLUSTRATIONS. 1. Defendant gave to plaintiffs wife his note in payment of a legacy. She died before the note was paid. Her husband sued the maker. A defence that the note was in the wife's pos- session up to her death and that there was no administration to her estate was upheld : Robinson v. Cripps, 6 U. C. C. P. 381 (1H57). 2. Plaintiffs declared against the acceptor of a bill as drawn ill their favor. It was on its face payable " to the order of ' ' f ' 234 BILLS OF EXCHANOB ^ gg T. G. Ridout, cashier," and indorsed '* Pay J. Smart, cashier or order, T. G. Ridout," but the signature T. G. Ridout, had been erased. At the trial an amendment was allowed alleging that the bill was payable to the order of Ridout, who indorsed to Smart, and that Ridout and Smart being plaintiff's cashiers and agents received the bill for them and as their property. Held, that the beneficial interest plaintiffs were alleged to have in the bill did not entitle them to sue on it in their own name : Bank of U. C. V. Ruttan, 22 U. C. Q. B. 461 (1863). 8. The holder of notes as collateral security against future liability can sue upon them when they mature and before the liability arises. Plaintiff who held the notes indorsed in blank, as his father's agent, could sue upon them in his own name: Ross v. Tyson, 19 U. C. C. P. 294 (1869). 4. A note indorsed in blank may be sued in the name of a person to whom the owner has handed it for that purpose, even although the plaintiff has no beneficial interest in the note : Shepley v. Kurd, 3 Ont. A. R. 549 (1879). 5. The indorsee and holder of a promissory note for collec- tion may in his own name sue the maker and indorser: Mills v. Philbin, 3 Rev. de. Leg. 255 (1848). 6. An action on a promissory note not produced will be dismissed : Hudon v. Girouard, 21 L. C. J. 15 (1875). 7. The holder of a promissory note, although without personal interest in it, may sue on it in his own name, the defendant being sufficiently protected by being allowed to set up any defence he may have against the real owner : McKinnon v. Kerouack, 15 R. L. 34 (1877) ; Biron v. Brossard, M. L. R. 2 S. C. 105 (1880) ; Leet v. Ingram, ibid. (1885) ; Allison v. Central Bank, 9 N. B. (4 Allen) 270 (1859) ; Howard v. Godard, ihid. 452 (1860) ; Street v. Quindon, 18 N. B. 567 (1879). 8. The maker of a note when sued by the indorsee has no right to plead that the note belongs to the insolvent estate of the payee and not to plaintiff: Lemay y. Boissinot, 10 Q. L. R. 90 (1884). 'I i RIOHTS OF HOLDEU. 235 9. A promissory note made payable to John Souther & Son, S qo was sued by John Souther & Co. It being clear from the evidence that the plaintiffs were the persons designated us payees, it was held that they could recover : Wallace v. Souther, 16 S. C. Can. 717 (1889), affirming 20 N. S. 509 (1888). 10. Where a bill is made payable to bearer, or is indorsed in blank, the person who has actual or constructive possession of it may sue upon it, and the person liable on the bill cannot ques- tion his right: Clerk v. Pigot, 12 Mod. 193 (1699); Ord v. Portal, 3 Camp. 239 (1812); Low v. Copestake, 3 C. & P. 800 (1828) ; Wood v. Connop, 5 Q. B. 292 (1843) ; Emmett v. Tottenham, 8 Ex, 884 (1853); Demuth v. Cutler, 50 Me. 300 (1862). 11. But possession by a nominal holder does not give him the right to sue if he holds the bill adversely to the real owner: Jones v. Breadhurst, 9 C. B. 173 (1850); Logan v. Cassell, 88 Penn. St. 290 (1879) ; Towne v. Wason, 128 Mass. 517 (1880). 12. The holder may sue on a bill without ever having had any interest therein : Law v. Parnell, 7 C. B. N. S. 282 (1859) ; Jenkins v. Tongue, 29 L. J. Ex. 147 (1860) ; or after he has parted with his interest : Williams v. James, 15 Q. B. 498 (1850) ; Poirier v. Morris, 2 E. & B. 89 (1853). 13. The holder of a bill, without the knowledge or authority of the plaintiff, indorsed and delivered it to an attorney for the plaintiff, in order that an action might be brought upon it in his name, and the plaintiff" after action brought ratified the Act. Held, that the subsequent ratification was equivalent to a prior authority, and that the plaintiff" had a valid title to sue on the bill : Ancona v. Marks, 7 H. & N. 686 (1862). (b.) Where he is a holder in due course, heHiKutsof ^ holder in holds the bill free from any defect of title of prior *'"«'^°"'^^- parties, as well as from mere personal defences available to prior parties among themselves, and .'■I ■■ t(. 'I / 23(> BILLS OF EXCHANGE s^ 38 "iJiy enforce payment against all parties liable on the bill; Imp. Act, s. 38(2). A " holder in due course," is one who takes a bill, com- plete and regular on its face, before maturity, in good faith, without notice of any defect in the bill or in the title of the. person negotiating it to him. The principal defp^ts of title arise from fraud, duress or other unlawful means, illegal consideration or fraudulent negotiation : section 29. "Mere personal defences" might include the foregoing, and also set-oft', compensation, etc. They would not include want of capacity, want of authority, the defence of forgery or the like. Anything which renders a note absolutely void would not be included in either of the above terms. 'illustrations. See illustrations under section 29, s-s. 2, and 30 s-s. 2. 1. A note indorsed on condition that it was to be used to renew another note was fraudulently negotiated by the maker for value before maturity. Held, that the holder, being in good faith could recover from the indorser : Larkin v. Wiard, 5 U. C. O. S. 661 (1838); Cross v. Carrie, 5 Out. A. R. 31 (1880). 2. A note given for lottery tickets is not void under 12 ^Geo. 2, c. 28, in the hands of a bona fide holder for value before 'maturity : Evans v. Morley, 21 U. C. Q. B. 547 (1862). 3. Where the maker signed a blank note and delivered it to the payee to fill up, and the latter fraudulently filled it up for a larger sum than authorized, the plaintiff, an indorsee before maturity for value without notice, can recover the full amount from the maker: Mclnnes v. Milton, 30 U C. Q. B. 489 (1870) ; Merchants Bank v. Good, 6 Man. L. R. 339 (1890). 4. A cheque given in settlement of losses at matching coppers is a note of hand given in consideration of a gambling debt within R. S. O. c. 47, s. 58, s-s. 8, and such a securitv is void value maker ; 12. f',i,'lit to piti'ties w l^nrocheii Rationale RIGHTS OF HOLDER. 207 under 9 Anne. c. 14, even in the hands of a hnmi fide holder for vahie : in re Summerfeldt v. Worts, 12 0. R. 48 (188G.) ;">. A note given for a gambhng debt is null and void even in the hands of an innocent indorsee for value before maturity : Biroleau v. Derouin, 7 L. C. J. 128 (1863). V). A note given in violation of paragraph 3 of the Insolvent Act of 18G4 is an absolute nullity, and is void ah initio even in the hands of a third party, innocent holder for value before maturity : in re Davis v. Muir, 13 L. C. J. 1S4 (1869). 7. Cheques fraudulently initialled by the manager of a bank, and for which the drawer has given in exchange to the manager certain securities which the bank retains, cannot be repudiated by the bank when the cheques are held by a hona tide holder for value : IJanque Natiouale v. City Bank, 17 L. C. J. 197 (1873). 8. A note given for an illegal consideration, namely, to induce a witness not to give evidence on a criminal prosecution, may be collected by a honn tide holder for value before maturity : Dorais v. Chalifoux, 6 R. L. 375 ^1875). 9. The holder of a promissory note for value without notice fiin recover against the indorser, although tht agent to whom the latter transmitted the note delivered it against his instruc- tions : Sylvain v. Flanagan, Ramsay A. C. 80 (1875). See as to maker, Hastings v. O'Mahoney, 9 N. B. (4 Allen) 305 (1859). 10. A note fraudulently made by a partner in the partner- ship name, binds the firm in the hands of a bomt fide holder for value : Walter v. Molsons Bank, Ramsay A. C. 80 (1877). 11. Where a note was given by an insolvent to a creditor for his consent to his discharge, an indorsee who received it before maturity for value, and without notice, can recover from the maker : Girouard v. Guindon, 2 L. N. 270 (1879). 12. A party to a bill or note when sued by the holder has no ri,i,'lit to have the action stayeu by dilatory exception, until other paities who may be liable to him are called in as warrantors : Durocher v. Lapalme, M. L. R. 1 S. C. 494 (1885); Banque Nutionale v. Ross, 11 Q. L. R. 109 (1885); Block v. Lawrance, 38. : '• -it pi-.- 238 BILLS OF EXCHANGE . 11' III § 33 M. L. R. 2 S. C. 279 (1886), overruling Beaulieu v. Demers, 6 R. L. 244 (1874). 18. Where an illiterate man was. ledJiQ -believ e that he was , becoming a party to an agreement, but the instrument p roved \ l_to be a promissory note, and he was not guilty of negligencejhe is not liable on the note even to a holder in due course : Banque Jacques Cartier vTTescard, 13 Q. L. R. 89 (1886); L'Abbe v. Normandin, 82 L. C. J. 168 (1888); Banque Jacques Cartier v. Leblanc, M. L. R. 6 S. C. 217 (1890); Foster v. Mackinnon, L. R. 4 C. P. 704 (1869); Puffer v. Smith, 57 HI. 527 (1870); Griffiths V. Kellogg, 89 Wis. 290 (1876). 14. A promissory note made by a married woman, separate as to property, in favor of a creditor of her husband is absolutely null, and no action can be maintained thereon by a bank which has discounted the same in good faith before maturity, in ignor- ance of the cause of nullity: Banque Nationale v. Guy, M. L. R. 7 S. C. 144 (1891). 16. Abuse of power or betrayal of trust by an agent who indorses a bill of exchange for his principal, does not affect the recourse against the latter of a boiia fide holder for value, who had no knowledge of such abuse or betrayal : Quebec Bank V. Bryant, 17 Q. L. R. 98 (1891). 16. Pleas set aside where a demand note sued on was for a gambling debt, but the plaintiff, an indorsee for value, was not aware of the nature of the consideration: Laurence v. Hearn, 21 N. S. 175 (1888). 17. In an action by a bona fide indorsee of a note for value before maturity against the indorsers, it ir no defence that the note was indorsed in the firm name by one of the partners fraudulently without the knowledge of the others, and for matters not relating to the business of the partnership : McLeod v. Carman, 12 N. B. (1 Han.) 592 (1869). 18. A writ of attachment having issued against the payee of a promissory note, he endorsed and delivered the note, and the holder indorsed it before maturity for value to plaintiff who was not aware of the insolvency of the payee. Held, that he ■'i"i ill RTOHTS OF HOLDER. 289 jsaa oved e, he ,nque be V. ier V. nnon, l870); parate olutely wliicli ignor- I.L.R. nt who ect the value, c Bank on was lue, was ■ence v. jr value ice that [partners lend for McLeoil Maclellan v. Davidson, 20 N. B. § 33 payee of and the I who was that he was entitled to recover ; <4 P. Si B.) 888 (1880). 19. A bill was indorsed for vakie before maturity by the drawer who was the payee. On its dishonor the holder returned it to the drawer, by whom it was sent back to the indorsr^e who sued upon it. The acceptor set up as a defence that he had not received value from the drawer. Held, that this was no defence ; that the mere sending of the bill back to the drawer did not deprive the plaintiif of his rights, as a holder in due course : Colin V. Werner, 8 T. L. R. 11 (1891). (c.) Where his title is defective, (1) if he nego- tiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and (2) if he obtains payment of the bill the person who pays him in due course gets a valid discharge for the bill : Imp. Act, s. 38 (3). See the preceding sub-section as to a defective title, and as to the rights of a holder in due course. Payment in due course means payment made at or after the maturity of the bill to the holder thereof in good faith, and without notice that his title to the bill is defective : section 59. If a bill be made payable to bearer or indorsed in blank, the person in possession may be presumed to be entitled to receive payment in due course, and payment to him is valid if made in good faith, although he may be a thief, finder, or fraudulent holder : Byles, p. 293; Randolph § 1444. In order to vitiate the payment by the maker of a pro- missory note indorsed in blank, bad faith must be shown ; payment under circumstances of suspicion is not enough. The maker is only bound to assure himself of the genuine- ness of the signatures, and is not bound to make any en- quiry : Ferrie v. Wardens of the House of Industry, 1 Rev. de Leg. 27 (1845) ; Johnson v. Way, 27 Ohio St. 374 (1875). Holdfi- with defec- tive title. ^rsm 240 § 39. BILLS OF EXOHANOE General Duties of the Holder. W'l 11:11 pre- Kuiitiiiont for ai.'ceii- taucf is necessary. Sections 39 to 52, inclusive, define the general duties of the holder with reference to obtaining payment of the bill. They include its presentment for acceptance where this is ne<;essary, presentment for payment, notice of dishonor to those who are only conditionally liable, and who may be released if notice is not given them, and protest made in certain cases. In a number of respects the rules as to presentment, protest and notice differ from those in the Imperial Act. These will be pointed out in the notes under the respective sections. 39- Where a bill is payable at sight or after sight, presentment for acceptance is necessary in order to lix tlie maturity of the instrument : Imp. Act, s. 39 (1); C. C. 2290. This sub-section in the Imperial Act reads, " Where a bill is payable after sight," etc. The words "at sight or" were inserted in the bill in the Canadian House of Com- mons after it had been determined not to change our law which allowed grace on bills payable at sight, and they had been struck out of section 10, where they stood as one of the classes of bills payable on demand. In England a sight bill is payable on demand, so that it need not be presented for acceptance. Hills pay- The acceptance of a bill payable at or after sight should aI)Ieator ^ '■ '' ° after siKht. be dated, so that it may be known from what day the time runs, A sight bill is payable on the third day after acceptance, one payable after sight on the third day after the expiration of the time mentioned in the bill. See section 14, s-s. 3 and 4, and section 40. The sub-section PBF8ENTMENT FOR ACCEPTANCE. 3om- as it stands is in accordance with the law of England § 39, before the passage of the Act of 1871 ; Campbell v. French, 6 T. R. at p. 212 (1795); Holmes v. Kerrison, 2 Taunt. 323 {1810) ; Sturdy v. Henderson, 4 B. & A. 592 (1821). A bill should be presented for acceptance to the drawee, Jy^entlo personally, or at his place of business or residence; or to'*'*'^'* his authorized agent. If it is addressed to him at a par- ticular place, it may be treated as dishonored if he has absconded: Anon. 1 Ld. Raym. 743 (1701); but if he has merely changed his residence or place of business, or if the bill is not addressed to him at a particular place it is incumbent on the holder to use due diligence to find him. And due diligence in such a case is a question of fact: Collins V. Butler, 2 Stra. 1087 (1729) ; Bateman v. Joseph, 12 East, 483 (1810). It is not enough to present it to some person in the drawee's yard, without knowing who that person is: Cheek v. Roper, 5 Esp. 176 (1806). The Act does not give definite directions as to the Place of ° present- proper place to present a bill, but the rules laid aown"^^"*- in section 46, s-s. 2 (d), as to presentment for payment, would seem to be reasonable in so far as they are applic- able. According to this, a bill should be presented for acceptance (1), at the address given, if any; (2), if no address is given, to the drawer personally or to his duly authorized agent, or at his ordinary place of business if known ; and if not, at his ordinary residence, if known. If he has no known residence in the place it may be presented at his last known place of business or residence, or if he has had none, then at the post office. The latter of course would not be applicable to presentment for acceptance. 2. Where a bill expressly stipulates that it shall ^fP^f^^Sj^^ be presented for acceptance, or vhere a bill is drawn elntoent. m'c.b.e.a. — 16 242 BILLS OF EXCHANGE J|}' § 39. payable elsewhere than at the residence or place of business of the drawee, it miist be presented for acceptance before it can be presented for payment : Imp. Act, s. 89 (2.) The second part of this sub-section according to Chal- mers (p. 131) settles a point which had not been decided in England. In Upper Canada it had been decided that presentment for acceptance was not necessary in such a case, so that it introduces new law in Ontario : Bichardson V. Daniels, 5 U. C. 0. S. 671 (1839). This latter is the rule in the United States : Daniel, § 454 ; Walker v. Stetson, 19 Ohio St. 400 (1869) ; but not in France : Nouguier, § 1068. No pre- Beutiueut in any other caae. 3. In no other case is presentment for accept- ance necessary in order to render liable any party to the bill: Imp. Act, s. 39 (3). A. bill payable at a fixed period after date, or on or at a fixed period after the occurrence of a specified event, need not be presented for acceptance, unless it come within sub section 2. Although not necessary, it is, however, advisable to present such bills .for acceptance, in order to secure the liability of the drawee if he accepts, or to have recourse at once against the other parties liable on the bill if he refuses to accept. An agent should in all cases present such bills for acceptance, or he may be held liable for negligence : Allen V. Suydam 20 Wend. (N. Y.) 321 (1838) ; Pothier, Change, No. 128 ; Nouguier, § 462. If the bill contain the words " acceptance waived " or equivalent words, it need not be presented except for payment : Reg. v. Kinnear, 2 M. &R. 117 (1838); Freeman v. Boynton, 7 Mass. 483, (1811); Nouguier, §470. Necessary 4. Where the holder of a bill, drawn payable ment"*" elsewheTc than at the place of business or resi- PRESENTMENT FOR AOOEPTANOE. 243 of tor lit: hal- ided that ich a dson 5 rule .068. jcept- party dence of the drawee, has not time, with the exer- § 39; cise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by present- ing the bill for acceptance before presenting it for payment is excused, and does not discharge the drawers and indorsers. Imp. Act, s. 39 (4). This sub-section is introduced in order to prevent hard- ship from the rule laid down in sub-section 2. It is applicable to bills payable at a fixed period after date, or on the occurrence of a specified event or at a fixed period after it. What is "reasonable diligence" will depend upon the facts and circumstances of each particular case. )ayable )r resi- 40. Subject to the provisions of this Act, when J'^^^^"/;,^ a bill payable at sight or after sight is negotiated, awVaner the holder must either present it for acceptance or ^ negotiate it within a reasonable time : Imp. Actj, s. 40 (1) ; 54-55 Vict. c. 17 s. 5 (Can.). The words " at sight or" are not in the Imperial Act, as bills payable at sight being payable on demand need not be presented for acceptance. Our Act of 1890 copied the Imperial Act without making the change in this section to correspond with that in section 10, omitting bills payable at sight from among those payable on demand. This was remedied, and these words added, by the amend- ing Act of 1891. The rule laid down in this sub-section is that in force in England before the change in the law : Byles (6th Ed.) p. 139 ; and is also the law in most of the United States : Daniel, § 454 ; and was in Quebec : C. G. Art. 2291. As to what is a reasonable time, see sub- section 3. >-< 244 BILLS OF EXOHAMOB §40. It not pre- eeiited. As to reasonablo time. The reason for the rule is that the drawer, and prior indorsers, if any, have a right to expect that they shall not be prejudiced by undue delay, as they have an interest in knowing at an early date whether the drawee will accept, and also in case he accepts that the date of payment shall not be unduly postponed, thus extending the period of their liability, and increasing the risk of their losing through the failure of the acceptor. "Subject to the provisions of this Act."— These provi- sions arc those that relate to excuses for presentment, which are found in section 41, s-s. 2. 2. If he does not do so, the drawer and all indorsers prior to that holder are discharged : 8. In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case. Imp. Act, s. 40 (2) (3). What is a reasonable time to present such a bill for acceptance has been held to be a mixed question of law and fact : Perley v. Howard, 4 N. B. (2 Kerr) 518 (1844) ; Tindal v. Brown, 1 T. E. 168 (1786) ; Muilman v. D'Eguino, 2 H. Bl. 665 (1795) ; Shute v. Robins, 3 C. & P. 80 (1828) ; Mellish V. Eawdon, 9 Bing. 416 (1832) ; Mullick v. Rada- kissen, 9 Moore P. C. 46 (1854) ; Wallace v. Agry, 4 Mason (U. S.) 336 (1827). But see section 36, s-s. 3, where what is an unreasonable length of time for a demand bill to be in circulation is made a question of fact alone. No absolute rule has ever been laid down in England, the United 8tates or Canada, as to what is a reasonable time for such presentment. In France, a limit of three months is fixed for Europe and Algeria, four months for Asia, PRE8RNTMBNT FOR ACCEPTANCE. 240 six months for America and Southern Africa, and a year for § 49. the rest of the world : Code de Cora. Art. 160, as amended by the law of the 8rd of May, 1862. ILLUSTRATIONS. 1. A bill drawn in Toronto, on August Gth, by a party dealing in bills, on New York, payable at sight, in favor of a a party living in Illinois, to be sent there as a remittance and for circulation, which passed through a number of hands, was presented in New York, on November 10th. The jury found that the delay was not unreasonable, and the court refused a new trial : Boyes v. Joseph, 7 U. C. Q. H. TjOr) (1850). 2. A bill of exchange was drawn on the ii7th of August, and after passing through the hands of two intermediate holders, was presented on the 1st of September, and refused payment, and protested on September 8th, all parties being in Montreal. The holder sued the last-indorser. Held that presentation and protest had not been made with due diligence, and action dismised: Harris v. Schwob, 8 R. li. 453 (1871). 3. Defendants indorsed on October 8th, a bill payable after sight, drawn on Liverpool, England. The drawer held it over two mails, and on November 5th sold it for full value to plain- tiffs, who remitted it the same day. It was accepted, but the acceptor failed before it became due. Defendants claimed that they were discharged by want of diligence in presenting. Plea struck out on the ground that there was no such delay as would constitute a defence : Wylde v. Wetmore, 1 N. S. D. 504 (1869). 4. A jury having found a verdict against the drawer, on a bill drawn in Windsor, payable in London a month after sight, and presented on the fourth day, the Court held that the delay was not unreasonable and refused a new trial : Fry v. Hill, 7 Taunt. 897 (1817). 6. A bill drawn on August 12th, in Carbonear, Newfound- land, on London, payable 90 days after sight wa» presented for acceptance, November 16th. There was a daily mail from Carb- , ,;. Af. 246 • . ' > BILLS OF EXCHANGE t . § 40. onear to St. John's, 20 miles, and a tri-weekly mail from St. John's to London. The delay was not explained. The jury found the delay to be unreasonable and the Court refused a new trial : Straker v. Graham, 4 M. & W. 721 (1889). 6. A bill drawn at Calcutta, February 13th, on Hong Kong at 60 days after sight was indorsed and negotiated by the drawers. On account of the state of the money market the indorsee kept ic five months and then negotiated it. The holder presented it on October 2*th, to the drawee at Hong Kong, who refused to accept it. The Supreme Court at Calcutta, found the delay unreasonable, and the Privy Council would not disturb the finding : Mullick v. Radakissen, 9 Moore P. C. 46 (1864). i KujMasto . 41. A bill is duly presented for acceptance Mc'epunce ^vhich is presented in accordance with the follow- ing rules : [a.) The presentment must be made by or on behalf of the holder to the drawee or to some person authorized to accept or refuse acceptance on his behalf, at a reasonable hour on a business day and before the bill is overdue : Imp. Act, s. 41 (1) («). ^ By or for bolder. Hour and day. The holder by whom or whose behalf a bill is presented need not be the owner or even a lawful holder: section 2 (g) ] Morrison v. Buchanan, 6 C. & P. 18 (1833) ; Nou- guier, § 462. As to what 13 a reasonable hour may depend on where the bill should be presented. If at a bank it should be during banking hours ; if at another ofidce, during ordi- nary office hours ; if at a private house, it may be earlier in the morning or later in the evening: Parker v. Gordon, 7 East, 385 (1806); Elford v. Teed, 1 M. & 8. 28 (1813). Wilkins v. Jadis, 2 6. & Ad. 188 (1831) ; Cayuga Co. Bank PRESENTMENT FOR ACCEPTANCE. 247 V. Hunt, 2 Kill (N. Y.) 635 (1842). Any day is a business § 41. day except those mentioned in section 14 : see section 91. A bill should be presented for acceptance before maturity. If accepted after maturity it becomes a bill payable on demand, aitd should then be presented for payment within a reasonable time so as to bind indorsers after acceptance : section 45, s-s. 2 {b). The Act does not give precise directions as to the Mode of presentment of a bill for acceptance. Some of the rules «"«"'• laid down in section 45 as to presentment for payment are no doubt applicable ; but there is a difference in principle between the two presentments, the former being personal, and the latter local. Where a drawee has accepted a bill he knows when and where it will be presented for payment, and all that is required is that some person on his behalf shall be there at the time with the money to hand over, and to receive the bill. In the case of a presentment for acceptance, however, even if advised by the drawer of the drawing, he may not know when the holder may choose to present it. When a bill is payable 15 days after sight a demand of payment unaccompanied by a presentment for acceptance is insufficient, and the action will be dismissed : Cousineau V. Lecours, M. L. R. 4 S. C. 249 (1888). The bill should be actually exhibited to the drawee : Fall River U. Bank V. Willard^i 5 Metcalf (Mass.) 216 (1842). (b). Where a bill is addressed to two or more to drawees ^ ' not part- drawees, who are not partners, presentment must"®'"^- be made to them all, unless one has authority to accept for all, when presentment may be made to him only ; Imp. Act, s. 4 (b). If all the drawees do not accept, the acceptance is a qualified one : section 19, s-s. 2 {d) ; and the holder should 248 BILLS OF EXCHANGE i ' § 41. either notify the drawer and indorsers, or treat the bill as dishonored by non-acceptance ; otherwise the drawer and indorsers will be discharged : section 44. Drawee dead. 'iift' (c.) Where the drawee is dead, presentftient may be made to his personal representative ; Imp. Act^ s. 41 (c.) As to the law in England, Chalmers says, p. 137,^ "Before this enactment the law on this point was very doubtful": Smith v. New South Wales Bank, 8 Moore P. C. N. S. 461, 462 (1872). In Quebec the rule was laid down in Art. 2290 C. C: " If the drawee be dead or cannot be found and is not represented, presentment i& made at his last known domicile or place of business." It will be observed that presentment to the personal representative is optional with the holder. He may treat the bill as dishonored by non-acceptance without present- ing it at all: sub-section 2. Through {(l.) Where authorized by agreement or usage ^ a presentment through the post office is sufficient : Imp. Act, s. 41 (e). " This enactment gives effect to the recognized practice among English merchants": Chalmers, p. 137. Long be- fore the Act it had been well established with regard to cheques : Bailey v. Bodenham, 16 C. B. N. S. 288 (1864) ; Prideaux v. Criddle, L. R. 4 Q. B. 461 (1869) ; Heywood v. Pickering, L. R. 9 Q. B. 432 (1874). No such usage, it is believed, has yet been established in Canada. As to presentment for payment through the post, or at the post office, see section 45, s-s. 6 and 7. •a; PRESENTMENT FOR ACCEPTANCE. 249 2. Presentment in accordance with these rules § 41. ^0^7 ictice be- fd to |»od V. lished is excused, and a bill may be treated as dishonored Excuses for noii- by non-acceptance — piesent- meut. (a.) Where the drawee is dead, or is a fictitious person or a person not having capacity to contract by bill: Imp. Act, s. 41 (2) (a); 54-55 Vict, c, 17, s. G (Can.). Where the drawee is dead the holder may either treat p»aweo '' _ dead. the bill as dishonored by non-acceptance or may present it to his personal representative: sub-section 1 (c). The Act of 1890 read " Where the drawee is dead or bankrupt," following the Imperial Act. As there is no bankrupt law law in Canada the words were struck out in other places, but left in here by inadvertence. They were struck out by the amending Act of 1891. Where there has been an assignment for the benefit of creditors, or a»i abandonment of his estate, by a debtor under a provincial Act, presentment should still be made to him. As to a fictitious drawee, see section 5, s-s. 2 ; and as to capacity to contract by bill, see section 22. (b.) Where, after the exercise of reasonable P';^^^"*- diligence, such presentment cannot be effected;""''"'^*'''*' Imp. Act, s. 41 (2) (b). Reasonable diligence is a question to be determined according to the facts and circumstances of each particular case: see section 45, 3-s. 2, and section 50, s-s. 2 (a). (c.) Where, although the presentment has been»^j^^»»','iof irregular, acceptance has been refused on some other ground: Imp. Act, s. 41 (2) (c). This is on the ground of estoppel. A refusal to accept is an acknowledgment of the sufficiency of the presentment. 260 BILLS OF EXCHANaB HMl|if ' nil 1' 1 1 H ' ^ § 41. 3- The fact that the holder has reason to beHeve No excuse, that the bill, on presentment, will be dishonored does not excuse presentment. Imp. Act, s. 41 (3). This was the law in England before the Act : ex parte Ton4eur, L. R. 5 Eq. 165 (1867). A similar rule prevails as to presentment for payment : section 46, s-s. 2 (a). Non-ac- ceptance. Two days to accept. 42. When a bill is duly presented for acceptance and is not accepted on the day of presentment or within two days thereafter, the person presenting it must treat it as dishonored by non-acceptance. If he does not, the holder shall lose his right of recourse against the drawer and indorsers. Imp. Act, s. 42. In the Imperial Act a bill is to be treated as dishonored if it is not accepted " within the customary time. " In the 2. ^^^**y''**^'**lCsLn&Ai&n bill the same expression was used. It was '^*^.!^fy^ ^Zji^^^^^^S^^ in the Commons so as to require acceptance on JjI^ A^C!^Z^^!^the day of presentment or on the next business day, which «j. t^ 1^*^''*^ bill »^ granting the delay mentioned in the Act. In case ^7 ^*7^ p^-^—^' °^ * draft on a known business house the usual practice is x»>t-t/'^^/U<U*l^of the bill : section 51, s-s. 8. Oi J. /wc^'/«^ *^*/fi-/ pit on i\ was t 425,] j)arol 4 {a and g Act is iK excuse s. 43( The ance ha of a va, If a qua i'igbts a may wai not tbei section «re giver «■«/ . *^ K « t i*'" ^ ■ ^*^ , PRESENTMENT FOR ACCEPTANCE. 251 Before the law required an acceptance to be in writing § 42. on the bill, detention beyond the time prescribed by law was treated as an acceptance : Harvey v. Martin, 1 Camp. 425, n. (1807). Such is still the law in most plpces where })arol acceptances are recognized. 43. A bill is dishonored by non-acceptance — i^'. uo°nTc- (a.) When it is duly presented for acceptance, and such an acceptance as is prescribed by this Act is refused or cannot be obtained; or — (b.) When presentment for acceptance is excused and the bill is not accepted : Imp. Act, s. 43 (a) (b.) The rules for the due presentment of a bill for accept- ance hav6 been given in section 41, s-s. 1. The requisites of a valid acceptance are set forth in sections 17 and 19. If a qualified acceptance is offered, see section 44 as to the rights and duties of the holder of the bill. The holder may wait two days after presentment for an acceptance, if not then obtained he must treat the bill as dishonored : section 42. The circumstances which excuse presentment are given in section 41, s-s. 2. 2. Subject to the provisions of this Act, when a bill is dishonored by non-acceptance an immediate right of recourse against the drawer and indorsers accrues to the holder, and no presentment for pay- ment is necessary. Imp. Act, s. 43 (2). The provisions of the Act to which this sub-section is subject, and which suspend the immediate right of recourse against the parties named are those relating to acceptance and payment for honor, sections 64 to 67. If tbe drawer Kecourse in Biich case. 252 BILLS OF EXCHANGE §43. f I :*» iS,- ( Old law. French law. or an indorser lias named a referee in case of need, the holder has the option of proceeding immediately against the drawer and indorsers after the dishonor of the bill by the drawee, or of resorting to the referee : section 15. If he applies to the referee and he accepts, the holder must await the maturity of the bill to see whether it will be paid. If after dishonor, the drawee is willing to accept, the holder may allow him to do so, but such acceptance, if the bill is payable at or after sight, should bear the date of the first presentment : section 18. In England the rule laid down in this sub-section has long been recognized as law. See as to the drawer, Milford V. Mayer, 1 Douglas 54 (1779) ; and as to the indorser, Bal- lingalls V. Gloster, 3 East 481 (1808). So also in Upper Canada. In Eoss v. Dixie, 7 U. C. Q. B. 414 (1850), Rob- inson, C.J. said : " An indorser, like the drawer, is liable the moment the holder is refused acceptance." It ha& been held in England, that the right of action is not com- plete until notice of dishonor has had time to reach the parties : Whitehead v. Walker, 9 M. & W. 516 (1842) ; Castrique v. Bernabo, 6 Q. B. 498 (1844). In Quebec it was sufficient that the notice was sent : C. C. Art. 2298. So also in the United States : Lenox v. Crook, 8 Mass. 460 (1812) ; Robinson v. Ames, 20 Johns. 146 (1822) ; Shedd v. Brett, 1 Pick. 401 (1823) ; Boston Bank v. Hodges, 9 Pick. 420 (1830) ; Watson v. Tarpley, 18 Howard (U. S.) at p. 519 (1855). Under the modern French law no right of action accrues on dishonor for non-acceptance. The holder can only protest the bill and claim security from the drawer and indorsers until the maturity of the bill : Code de Com. Art. 120. Under old French law he had also to await m.itiirity and protest for non-payment : Pothier, Change, No. 133 ; Preston v. Johnston, 2 Rev. de Leg. 28 (1813). PRESENTMENT FOIl ACCEPTANCE. 26a 44. The holder of a bill may refuse to take a § 44. qnalilied acceptance, and if he does not obtain an ah to quau- , fled accep- unqualified acceptance may treat the bill as dis-tau'^es. honored by non-acceptance: Imp. Act, s. 44 (1). A qualified acceptftnce is one which in express terms varies the effect of the bill as drawn : nection 19. The examples there enumerated are acceptances that are con- ditional, partial, qualified as to time, or by some of the drawees only. The "unqualified" acceptance of this Bection is called a general acceptance in section 19. If the drawee insists upon adding anything to a bare accep- tance beyond indicating a bank or other place where he will pay, that will vary the terms of the bill, the holder may refuse to take it, and treat the bill as dishonored. This has always been the law in England: Petit v. Benson, Com- berbach 452 (1697); Smith v. Abbott, 2 Stra. 1152 (1741); Parker v. Gordon, 7 East 387 (1806). Also in the province of Quebec : " The acceptance must be absolute and uncon- ditional, but if the holder consent to a conditional or quali- fied acceptance the acceptor is bound by it :" C. C. Art. 2293. See also Pothier, Change, Nos. 47-49. The same doctrine is recognized in the United States : Daniel, § 465 ; Eandolph, § 621. If the holder takes a qualified acceptance he is bound by it, and does so at the risk of releasing the drawer and indorsers, save as provided in the two following sub-sections. 2. Where a qualified acceptance is taken, andJJi*i*ou" the drawer or an indorser has not expressly or^""'""*^' impliedly authorized the holder to take a qualified acceptance, or does not subsequently assent there- to, such drawer or indorser is discharged from his liability on the bill ;.,... 264 BILLS OF EXCHANGE H4. Partial ac- ceptance. I. m What is deemed assent. The provisions of this sub-section do not apply to a partial acceptance, whereof due notice has been given. Where a foreign bill has been accepted as to part, it must be protested as to the balance: Imp. Act, s. 44 (2). This sub-section is said by Chalmers to introduce new law in England. He probably refers to the exception regarding a partial acceptance, as the first clause appears to have been well recognized in England before the Act of 1882: Byles, (7th Ed.) p. 164; Chitty, (11th Ed.) p. 207; Sebag V. Abithol, 4 M. & S. at p. 466 (1816) ; Eowe v. Young, 2 B. & B. 165 (1820). A similar rule prevails in the United States : Daniel §§ 508, 515 ; McEowen v. Scott, 49 Vt. 376 (1877). If the holder is willing to accept the offer, he should then give notice of its exact terms to all the parties, and state his readiness to accept the offer, if they will respectively consent : Daniel, § 510. 3. When the drawer or indorser of a bill receives notice of a qualified acceptance, and does not within a reasonable time express his dissent to the holder, he shall be deemed to have assented thereto. Imp. Act, s. 44 (3). As to what is a " reasonable time " see section 45, s-s. 2(6). Present- ment for 45. Subject to the provisions of this Act, a bill payment. ;ui^^gt }^q ^yjy presented for payment. If it is not 80 presented, the drawer and indorsers shall be dis- charged : Imp. Act, s. 45 ; C. C. 2322. The provisions of the Act which relieve from pre- sentment of a bill for payment aro the following : — section PUESENTMENT FOR PAYMENT. 256 89, 8-s. 4, which allows a delay in certain cases for bills that § 45. must first be presented for acceptance ; section 43, s-s. 2, which provides that a bill dishonored by non-acceptance need not be presented for payment ; and section 46, which mentions the circumstances which excuse delay in present- ing for payment, or dispense with it entirely. In presenting a bill it should be exhibited : section 52, s-8. 4. See cases under that sub-section, as to a bill being at the place of payment on the day it matures. For the rules as to the presentment of a cheque, see section 73. The consequence of not duly presenting a bill for pay- ment is that the drawer and indorsers are discharged from their liability, not only on the bill, but also on the con- sideration for which it was given : Peacock v. Pursell, 14 C. B. N. S. 728 (1863); section 73. No presentment is necessary as against the acceptor, who is the primary debtor ; but if the bill be payable in a specified place and be sued before presentment, the costs are in the discretion of the court : section 51. See McLellan v. McLellan, 17 U. C. C. P. 109 (1866). a bill is not be dis- 2. A bill is duly presented for payment which J;'j«g«^*« ^^^ is presented in accordance with the following '"*""'■ rules : — (a.) Where the bill is not payable on demand, presentment must be made on the day it falls due ; (b.) Where the bill is payable on demand, then, subject to the provisions of this Act, presentment must be made within a reasonable time after its issue, in order to render the drawer liable, and within a reasonable time after its indorsement, in order to render the indorser liable ; ' ■ 'Mixi f m Ih ^66 DILLS OF EXCHANGE I § 45. In deterinininf? what is a reasonable time, regard ~ shall be had to the nature of the bill, the usage of trade with regard to similar bills, and the facts of the particular case ; Imp. Act, s. 45 (1) (2.) Not payable on demand.— The rules as to the due date of bills not payable on demand are given in section 14. Presentment must be made on the third day of grace, unless that be a non-business day, when it must be presented on the next business day ; Richardson v. Daniels, 5 U. C. 0. S. 671 (1839) ; McLellan v. McLellan, 17 U.C.C.P. 109 (1866). The former rule in Quebec is thus stated in C. C. Art. 2306 : " Every bill of exchange must be presented by the holder, or in his behalf, to the drawee or acceptor for payment, on the afternoon of the third day after the day it becomes due, or after presentment for acceptance if drawn at sight ; unless such third day falls upon a legal holiday, in which case the next day thereafter not being a legal holiday is the last day of grace. If the bill be payable at a bank, presentment may be made there either within or after the usual hours of banking." As to the hour at which presentment should be made, see notes to clause (c.) of this section. Presentment on the second day of grace is a nullity : Wiffen v. Roberts, 1 Esp. 262 (1795) ; Mechan- ics' Bank v. Merchants' Bank, 6 Mete. 13 (1843) ; Henry v, Jones, 8 Mass. 453 (1812) ; also on the day after maturity unless the delay is excused : Prideaux v. Collier, 2 Stark. 58 (1817). Where an indorser gave the holder a memorandum that a note would be good ten days after maturity, he was held liable on a presentment and protest at the end of the ten days : Burnett v. Monaghan, 1 R. C. 473 (1871). Payable on demand. — As to what bills are payable on demand, see section 10. The modifying provision referred to h PRESENTMENT FOR PAYMENT. c_ -28r (erred to is that relating to cheques which are bills of exchange § 45, payable on demand . section 72. ^is to a " reasonable "" time" see section 40, s-s. 3. In France the same delays are fixed for presenting for payment a bill payable on demand as for presenting for acceptance a bill payable after sight : Code de Com. Art. 160 as amended. As to the delay for presenting for payment promissory notes payable on demand, see section 85. (c.) Presentment must be made by the holder 'V'''""''. \ ' •' where, ami or by some person aiithori/ed to receive payment *" '^'""" on his behalf, at the proper place, as hereinafter defined, either to the person designated by the bill as payer or to his representative or some person authorized to pay or refuse payment on his behalf, if, with the exercise of reasonable diligence, such . person can there be found ; Imp. Act, s. 45 (3.) This clause differs from that in the Imperial Act in two ciinnee '■ from Iiii- particulars. There the words "at a reasonable hour on a P'^riai Act. business day" follow the words "on his behalf" in the second line; and the words " or to his representative" in the fifth line are not found in the Imperial Act. Our Act does not specify the hour of presentment for payment; but section 51, s-s. 6 {b) provides that a protest shall not be made until after three o'clock in the afternoon. The Quebec Civil Code provided that a bill should be presented " in the afternoon," and if payable at a bank " either within or after the usual hours of banking : " Art. 2806. The English rule has been stated as follows : If a bill Rules vary, be payable at a bank it must be presented within banking hours : Eiford v. Teed, 1 M. & S. 28 (1813) ; Parker v. Gordon, 7 East, 885 (1806) ; Whitaker v. Bank of England, 1 C. M. & B. 750 (1885); if at a merchant's place of busi- m'c.b.e.a. — 17 !iK S U- ' 268 BILLS OF EXOHANOB §45. Present- ment at place Hliecifled. ness, then within ordinary business hours : Barclay v. Bailey, 2 Camp. 527 (1810), time 8 p.m.; Morgan v. Dav- ison, 1 Stark. 114 (1815), time 6.30 p.m. ; Allen v. Edmund- son, 2 Exch. 723 (1848) ; if at a private house, probably a presentment up to bed-time would be sufficient : Triggs V. Newnham, 10 Moore 249 (1825), time 8 p.m. ; Wilkins V. Jadis, 2 B. ife Ad. 188 (1831). In Quebec it has been held that presentment at the closed doors of a bank after its usual office hours was not sufficient to base a protest upon : Waiters v. Reiffenstein, 16 L. C. B. 297 (1866). In New Brunswick where a note was payable at a " store," the only evidence was that when the hold^ went to present it the store was closed. It was held that in the absence of evidence it might be inferred that it was closed in the due course of business, and that the presentment was not made at a reasonable time : Patterson v. Tapley, 9 N. B. (4 Allen) 292 (1859). Presentment at the door of a store which was closed at 5 p.m. held sufficient: Keed v. Kavanagh, 9 N. B. (4 Allen) 457 (1860). In Massachusetts a presentment at the maker's resi- dence, ten miles from Boston, at 9 p.m. was held sufficient, although he and his family had retired : Farnsworth v. Allen, 4 Gray, 453 (1855). In Maine a presentment at the maker's house a few minutes before midnight, when he was wakened up, was held insufficient : Dana v. Sawyer, 22 Me. 244 (1843). (d.) A bill is presented at the proper place : — (1.) Where a place of payment is specified in the bill or acceptance, and the bill is there pre- sented; Imp. Act, s. 45 (4) (a). The words " or acceptance " are not in the Imperial Act. According to Chalmers the word " bill " includes PRESENTMENT FOR PAYMENT. 269 acceptance. He says, p. 145, " The place of payment may § 45. be specified either by the drawer or the acceptor ": Gibb v. Mather, 2 Cr. & J. 254 (1832); Saul v. Jones, 1 E. & E. 69 (1858). In England it is only when the acceptance states that the bill is to be paid at a particular place and not elsewhere that it must be presented there. So also form- erly in Ontario as to both bills and notes, and in Prince Edward Island as to bills : see ante p. 110. In Canada under the Act it is now sufficient to name the place of payment in the bill or acceptance without the additional words : section 19, s-s. 2 {a). When a place of payment is named it should be presented there : C. C. Art. 2307 ; O'Brien v. Stevenson, 15 L. C. R. 265 (1865); Ferrie v. Rykman, Draper U. C. 64 (1830); Driggs v. Waite, 6 U. C. 0. S. 310 (1843) ; Darling V. Gillies, 20 N. S. 423, 9 C. L. T. 423 (1888); Biggs v. Wood, 2 Man. L. R. 272 (1885); Philpot v. Briant, 3 C. & P. 244 (1827). The rule in the United States is the same as that now settled in Canada: Daniel, §§ 643, 644; Bank of U. S. v. Smith, 11 Wheaton (U. S.) 171 (1826); Cox v. National Bank, 100 U. S. (10 Otto) 712 (1879). If a bill is payable at a bank in a town where there is a clearing-house, it has been held in England that present- ment through the clearing-house is sufficient : Reynolds v. Chettle, 2 Camp. 596 (1811) ; Harris v. Packer, 3 Tyr. 370 (1833) ; Boddington v. Schlenker, 4 B. & Ad. 752 (1833). If alternative places are named it is sufficient to present it at one : Beeching v. Gower, Holt N. P. C. 313 (1816). A note made in Boston and payable "at any bank," means any bank in Boston : Baldwin v. Hitchcock, 12 N. B. (1 Han.) 31C (1869). 260 BILLS OF EXCHANGE ■m I* hi ' I §45. No place, but ■* address. No place, aud 110 address. Other cases. (2.) Where no place of payment is specified, ' but the address of the drawee or acceptor is given ' in the bill, and the bill is there presented ; (3.) Where no place of payment is specified and no address given, and the bill is presented at the drawee's or acceptor's place of business, if known, and if not, at his ordinary residence, if known; (4.) In any other case, if presented to the drawee or acceptor wherever he can be found, or if presented at his last known place of business or residence: Imp. Act, s. 45 (4) (h) (c) (d) ; C. C. (2308). These rules have been generally followed in Canada, England, and the United States. A note payable generally was left for collection at a bank in the town whore the maker lived. Before it matured he left town. A clerk went to present it at the house where jlie formerly lived, and could not learn there where he had gone to. He had heard before the note matured that the maker had left town, but heard different reports as to where he had gone. No enquiry was made at any of these places. It was proved that his leaving was no secret, and his business partner was not asked as to his whereabouts. Held, that reasonable diligence was not used and the indorser was released : Browne v. Boulton, 9 U. C. Q. B. 64 (1852). The maker of a promissory note, a merchant, having absconded before the note became due aud closed his store, it was held that presentment at his late dwelling house was sufficient without proof of presentment at the store, or that the store remained closed on the day the note fell due : Robinson v. Taylor, 4 N. B. (2 Kerr) 198 (1843). PRESENTMENT FOR PAYMENT. 9'M The maker of a note was proved to have occupied nn § 45. office up to May Ist, after which there was no direct evidence of occupation, but his desk remained there as before. Held, in the absence of any proof of his having changed his office, that presentment of the note there after the 1st of May was sufficient : Kinnear v. Goddard, 9 N. B. (4 Allen) 559 (1860.) See Fitch v. Kelly, 41 U. C. Q. B. 578 (1879); Evans v. Foster, 13 N. S. 66 (1879) ; Hine v. AUely, 1 N. & M. 433 (1833) ; Buxton v. Jones, 1 M. *S: Gr. 83 (1840) ; McGruder v. Bank ot Washington, 9 Wheaton (U. S.) 598 (1824) ; Sussex Bank v. Baldwin, 2 Harrison (N. .J.) 487 (1840) ; West v. Brown, 6 Ohio St. 542 (1855) ; Granite Bank v. Ayres, 15 Pick. (Mass.) 392 (1835). inent iving store, e was that due: 8. Where a bill is presented at the proper place, '^^4*^'='^"* and, after the exercise ot" reasonable diligence, no person authorized to pay or refuse payment can be found there, no further presentment to the drawee or acceptor is required : Imp. Act, s. 45 (5). It is the duty of the acceptor to have some person at the proper place, on the day a I)ill matures, to pay it. If no person is there prepared to pay, or authorized to refuse payment, or if the place be closed during reasonable hours, no further presentment is required, and the bill may be treated as dishonored : Hine v. Allely and Buxton v. Jones, supra; Crosse v. Smith, 1 M. & S. at p. 554 (1813). Before the Act it was considered that where a bill is payable at a bank which has ceased to exist or which has closed that particular office, it is payable generally : Becher V. Amherstburg, 23 U. C. C. P. 602 (1874); McRobbie v. Torrance, 5 Man. L. R. 114 (1888). E-i ^' ■" 262 BILLS OF EXCHANGE § 45. 4. Where a bill is drawn upon, or accepted by Acceptors two or Hiore persons who are not partners, and no partners, place of payment is specified, presentment must be made to them all : Imp. Act, s. 45 (6). Chalmers says, p. 146 : ** This is probably declaratory, but the point was not clear. Of course, if one pays, or in refusing payment, acts as the agent of the others, that is enough." Presentment should be made according to sub- section 2 (d) (2) (8) (4) ante. If they are in different places, so that presentment cannot be made to all on the day of maturity the bill should be presented to at least ope on that day and to the others as soon as practicable. The case is more likely to arise with joint makers of a note payable generally. See Willis v. Green, 5 Hill 232 (1843); Arnold V. Dresser, 8 Allen (Mass) 435 (1864) ; Union Bank v. Willis, 8 Mete. 604 (1844) ; Blake v. McMillen, 33 Iowa 150 (1871) ; Gates V. Beecher, 60 N. Y. 623 (1875) ; Britt v. Lawson, 22 Hun (N. Y.) 123 (1878). Where drawee dead. 5. Where the drawee or acceptor of a bill is dead, and no place of payment is specified, presentment must be made to a personal representative, if such there is, and with the exercise of reasonable diligence he can be found : Imp. Act, s. 45 (7). Presentment for acceptance in such a case is excused, but may be made : section 41. In the case of payment it must be presented to the personal representative if at all practicable. See Caunt v. Thompson, 7 C. B. 400 (1849) ; Dana v. Bradley, 10 N. B. (5 Allen) 292 (1862). ^^totSce ^" ^^®^® authorized by agreement or usage, a presentment through the post office is sufficient : Imp. Act, s. 45 (8). " • . PRESENTMENT FOR PAYMENT, 263 It is said that no such usage has existed in any part of § 45, Canada. The poHcy of the Act is to use the post office as far as practicable. In England and the United States such a usage has existed for many years, especially in the case of cheques. See Hare v. Henty, 10 C. B. N. S. 65 (1861) ; Prideaux v. Griddle, L. R. 4 Q. B. at p. 461 (1869) ; Heywood v. Pick- ering, L. R. 9 Q. B. at p. 482 (1874) ; Windham Bank v. Norton, 22 Conn. 214 (1852) ; Berg v. Abbott, 83 Penn. St. 177 (1876) ; Shipsey v. Bowery National Bank, 59 N. Y. 485 (1875). 7. Where the place of payment specified in the no place bill or acceptance is any city, town or village, and ^p^*''*^^''- no place therein is specified, and the bill is presented at the drawee's or acceptor's known place of business or known ordinary residence therein, and, if there is no such place of business or residence the bill is presented at the post office, or principal post office in such city, town or village, such presentment is sufficient. There is no corresponding clause in the Imperial Act, ami it is new law in Canada : Commons Debates, 1890, p. 1474. The former practice in England when the drav/er or acceptor had no place of business or residence, was to present it at all the banks in the place : Hardy v. Wood- roofe, 2 Stark. 319 (1818). This clause furnishes a very simple rule for a place where there is a large number of banks, or where there is no bank at all. 46. Delay in making presentment for payment excus.; for is excused when the delay is caused by circumstances pjI,'^",*^ beyond the control of the holder, and not imputable''*^'"*"* 2()4 BILLS OF EXCHANGE § 46. to his default, niisconduct or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence : Imp. Act, s. 46 (1). The present sub-section mentions the circumstances under which delay is excused, while the cause of delay exists; the following one, those under which presentment is dispensed with entirely. ILLUSTRATIONS. The following have been recognized as valid excuses for such delay: — 1 . A request from the drawer or indorser sought to be charged : Burnett v. Monaghan, 1 R. C. 478 (1871); Lord Ward v. Oxford Ry. Co. 2 DeCx. M. & G. 750 (1852). 2. A note was lying at a branch bank where it was payable. The new agent was not aware of its being there until noon of the day after maturity, when he had it protested and notice given. Held, sufficient to bind the indorser : Union Bank v. McKiUigan, 4 Man. L. R. 29 (1887). 3. The death of the holder : Rothschild v. Currie, 1 Q. B. at p. 47 (1841) ; Pothier, Change, No. 144 ; Nouguier, §§ 1107, 1108. 4. A state of siege or war, I'endernig it impracticable : Patience v. Townley, 2 Smith, 223 (1805) ; Bond v. Moore, 93 U. S. (3 Otto) 593 (I87G) ; 8 Randolph, ^ 1324. 5. A moratory law, passed in consequence of war, postponing the maturity of bills 3 months : Rouquette v. Overmann, L. R. 10 Q. B. 525 (1875). 6. Delay in the post office whei'e it was mailed in ample time : Windham Bank v. Norton, 22 Conn. 213 (1852) ; Pier v. Heinrichschofi'en, 29 Am. Rc;;^ 501 (1877). When Buch present- ment is ..1 disi.tnsed Willi with. 2. Presentment for payment is dispensed PRF.8ENTMKNT FOR PAYMKNT. 265 ipre cable. (a.) Where, after the exercise of reasonable § 46. (lihgence, presentiueiit, as required by this Act, >vhen cannot be effected ; The fact that the holder has reason to believe that the bill will, on presentment, be dishonored, does not dispense with the necessity for present- ment : Imp. Act, s. 4(3 (2) (a). The dispensing with presentment for payment under the present sub-section should be distinguished from the delay in presentment which is excused under the preceding clause. In many of the cases the distinction is not kept in mind. The circumstances which excuse delay in notice of dishonor or dispense with it are to be found in section 50. The different modes in which presentment may be made, and the order in which they should be attempted are set out in section 45. If after the exercise of reasonable diligence, a bill cannot be presented in any one of these ways, present- ment is dispensed with entirely : Forward v. Thompson, 12 U. C. Q. B. 194 (1854), Whether due diligence has been used is a mixed question of law and fact : Perley v. Howard, 4 N. B. (2 Kerr) 518 (1844). imple tier V. iised ILLUSTRATIONS. The following have been held not to be sufficient reasons for dispensing with presentment : — 1. The fact of the bill being overdue when indorsed : Davis V. Dunn, 6 U. C. Q. B. 827 (1850). 2. The insolvency of the acceptor : Quebec Bank v. Ogilvy, 3 Dorion 200 (1888) ; Esdaile v. Sowerby, 11 East 117 (1809) ; Bowes v. Howe, 5 Taunt, 80 (1813) ; Sands v. Clarke, 8 C. B. 751 (1849). f- 4 H. 266 §46. Fictitious drawee. Drawee not bounrt to pay. BILLS OF EXCHANGE 8. The dangerous illness of the maker of the note : Nowlin V. Roach, 4 N. B. (2 Kerr) 887 (1843). 4. Notice that the acceptor will not pay when due : Baker v. Birch, 3 Camp. 107 (1811); Hill v. Heap, D. & R. N. P. C. 57 (1828) ; e.v parte, Bignold, 1 Deacon, 712 (1886). See also Nicholson v. G athit, 2 H. Bl. 609 (1796). 6. Tue fact jf an acceptor being abroad, when the agent who accepted for him is at the place where the bill was addressed and accepted : Philips v. Astling, 2 Taunt. 206 (1809). {b.) Where the drawee is a fictitious person : Imp. Act, o. 4<: < ^) (/')• Where the -.ravi«.e is . fictitious person the holder may treat )l.d inslr ment aL ? nvomissoiy note : section 5, s-s. 2 ; Smith v. Boiiao -, 9 1 \. 9.23 (1817). The fact of the drawee nc ving capacity to contract does not dispense with presentment for payment. The holder may treat such a bill as a promissory note : section 5, 8-s. 2 ; and need not present it for acceptance : section 41, 2 (a) ; but it may be that it will be paid if presented and the drawer and indorsers thereby discharged. (c.) As regards the drawer, where the drawee or acceptor is not bound, as between himself and the drawer, to accept or pay the bill, and the drawer has no reason to believe that the bill would be paid if presented: Imp. Act, s. 46 (2) (c). A bill accepted for the accommodation of the drawer, need not be presented in order to charge him, where he has not provided funds to meet it : Stayner v. Howatt, 15 N. S. (3 R. & G.) 267 (1882) ; Terry v. Parker, 6 A. & E. 602 (1837) ; see Bowes v. Howe, 5 Taunt. 30 (1813) ; Wirth v. Austin, L. R. 10 C. P. 689 (1875); and in re Boyse, Crofton V. Crofton, 83 Ch. D. 612 (1886). It should be waiver a I. C. 2. A tlie factj (mi); McCunni Piielps, de Leg. ] ^Vatters ^'aiightor V. Black, DISHONOR BY NON-PAYMENT. 267 presented to charge the indorsers : Knapp v. Bank of Mon- § 45^ treal, 1 L. C. R. 252 (1850) ; Saul v. Jones, 1 E. & E. 59 - (1858). (d.) As regards an indorser, where the bill was^^Mor^^ accepted or made for the accommodation of thathfao^e? indorser, and he has no reason to expect that the bill would be paid if presented : Imp. Act, s. 40 (2) (^>. Where a bill was made and actdpted for the accommo- dation of the last indorser and he made no provision for it, he is liable without presentment but the prior indorsers are not : Turner v. Samson, 2 Q. B. D. 23 (1876) ; see Foster v. Parker, 2 C. P. D. 18 (1870). (e.) By waiver of presentment, express or im- ^^'' plied. Imp. Act, s. 46 (2) (e). Waiver is binding without consideration. It may be either before or after the time for presentment. It may be in writing or verbal, or inferred from conduct or circum- stances. It may be in or on the bill itself : section 16 (&). ILLUSTRATIONS. 1. A declaration of inability to pay and request for time is a waiver as regards the party making it : McDonell v. Lowry, 8 U. C. 0. S. 802 (1834). 2. A promise to pay after the bill is due with knowledge of the facts is a waiver : Mclver v. McFarlane, Taylor U. C. 113 (1824) ; Macaulay v. McFarlane, Rob. & Jos, Dig. 493 (1841) : McCunniffe v. AUen, 6 U. C. Q. B. 377 (1851) ; McCarthy v. Plielps, 80 U. C. Q. B. 57 (1870) ; City Bank v. Hunter, 2 Rev. de Leg. 171 (1847) ; Johnson v. Geoffrion, 7 L. C. J. 125 (1863) ; Watters v. Lordly, 4 N. B. (2 Kerr) 13 (1842) ; Allen v. Mc- Naughton, 9 N. B. (4 Allen) 234 (1868) ; St. Stephen B. Ry. Co. V. Black, 13 N. B. (2 Han.) 139 (1870) ; Colwell v. Robertson, aiver. i. 268 BILLS OF liXCHANOE § 46. 1'7 N- ^- -1^1 (1^'^'^) : Wliitehonse v. Ikdell, 2<> N. B. 4G (188(}) ; — Deering v. Hayden, H Man. L. H. 219 (lH8(i); Hopley v. Dufresne, 15 East 275 (1812) ; Croxon v. Wcirtlien, 5 M. k W- 5 (1H81)) ; Armstrong v. Chadwick, 127 Mass. 150 (1879). 8. Where a bank suspended payment on the day a cheque should have been presented, and the drawer sued the bank for the full amount of his deposit, including this cheque, it was held that he had waived presentment and was liable : Blackley v. McCabe, 10 Ont. A. R. 295 (1889). 4. Waiver of pi'esentment by the payee does not bind the drawer: McLellan v. McLellan, 17 U. C. C. P. 109 (1860). 5. Part payment is a waiver : Rice v. Bowker, 8 L. C. R. 805 (1853). 0. A promise by an indorser to pay a composition on a note if it was not paid at maturitv, is not a waiver of presentment or of protest : Union Bank v. Gibeault, 12 Q. L. R. 145 (1880). 7. An offer to give new notes which the holder does not accept is not a waiver : ]5ank of New Brunswick v. Knowles, 4 N. B. (2 Kerr) 219 (1848). 8. The payee indorsed a note to plaintiff. The maker having absconded, plaintiff on the day of maturity took it to the payee, who handed it back to plaintiff, asking him to keep it. This was a waiver of presentment : Masters v. Stubbs, 9 N. B. (4 Allen) 458 (1800). 9. Waiver of notice of dishonor is not waiver of presentment : Hill V. Heap, D. & R. N. P. C. 57 (1823). 10. It is no defence that the party making the promise to pay did not know its legal effect : Third Nat. Bank v. Ashworth, 102 Mass. 508 (1870). Dishonor by noii- imyiuent. 47. ^ bill is dishonored by non-payment (a) when it is duly presented for payment and payment is refused or cannot be obtained, or (b) when presentment is excused and the bill is overdue and , unpaid: • - . , • niSHONOR BY NON-PAYMENT. 261) laving payee, This Allen) tment : 2. Subject to the provisions of this Act, when § 47. a bill is dishonored by non-payment, an immediate KTei^in^ • 1 (■ •1-1 t ^fi*'""' n<^ht 01 recourse aganist the drawer, aceept'.tr and}i^^,\^f indorsers accrues to the holder. Imp. Act, s. 47. As to presentment for payment, see section 45; and as to when it is excused, section 46. As to when a bill is overdue, see sections 10 and 14. The provisions of the Act referred to in this section are sections 48 to 61, and 64 to 67. In the Imperial Act the word acceptor is not used. Chalmers distinguishes between the right of recourse and the right of action. It has been held in England that the latter exists against a drawer or indorser only from the time when notice of dishonor is or ought to be received and not from the time when it is sent : Castrique v. Bernabo, 6 Q. B. 498 (1844). The acceptor may be sued on the afternoon of the last day of grace after demand and refusal : Sinclair v. Robson, 16 U. C. Q. B. 211 (1858); Ontario Bank v. Foster, 6 L. N. 398 (1883) ; Leftley v. Mills, 4 T. R. 170 (1791); Estes v. Tower, 102 Mass. 66 (1869). In Quebec the insolvency of the acceptor before the maturity of the bill makes it immediately exigible as against him : Lovell v. Meikle, 2 L. C. J. 69 (1853) ; Corcoran v. Montreal Abattoir Co., 6 L. N. 135 (1882) ; Ontario Bank v. Foster, 6 L. N. 398 (1883). Where the acceptance is conditional the condition must be fulfilled or the acceptor is not liable : Dufresne v. Jacques Cartier Building Society, 5 R. L. 235 (1873); Fullerton v. Chapman, 2 N. S. D. 470 (1870) ; Potters v. Taylor, 20 N. S. 362, 7C. L. T. 434 (1888) ; Ontario Bank V. McArthur, 5 Man. L. R. 381 (1889); Gammon v. Schmoll, 5 Taunt. 344 (1814). 270 BILLS OF EXCHANQE § 47. In an action on a bill or note payable at a particular place it is not necessary to show that there were not suffi- cient funds at the place named ; all that is necessary, even as against an indorser, is to show presentment, non- payment and notice of dishonor : McDonald v. McArthur, 8 Ont. A. E. 553 (1883). W Notice of dishonor and otTeot of nou- notice. 11 48. Subject to the provisions of this Act, when a bill has been dishonored by non-acceptance or by non-payment, notice of dishonor nuist be given to the drawer and each indorser, and any drawer or indorser to whom such notice is not given is dis- charged : Imp. Act, s. 48. The provisions of the Act which dispense with notice of dishonor in certain cases, and excuse delay in giving notice in others are in section 50. The rules governing notice of dishonor are to be found in section 49. As to when a bill is dishonored by non- acceptance or non-payment, see sections 43 and 47. The liability of the drawer and indorsers of a bill being contingent upon its non-acceptance or non-payment, notice of dishonor must be given to them, save in the exceptional cases mentioned in section 50, in order to hold them liable. By section 56, any person who signs a bill otherwise than as a drawer or acceptor, incurs the liabilities of an indorser to a holder in due course, and is subject to all the provisions of the Act respecting indorsers. Under French law, indorsers are discharged for want of notice, but a drawer is not, unless he can show that the drawee had funds to meet the bill : Code de Com. Art. 170. Under the Act, it is only a drawer as to whom the drawee or acceptor is under no obligation to accept or pay the bill, that must prove this : section 46, s-s. 2 (c). NOTICE OF DISHONOR. 271 Mere knowledge of the dishonor of a bill is not enough § 43. to bind a drawer or indorser : Burgh v. Legge, 5 M. & W. T at 1). 422 (1839); Carter v. Flower, 16 M. & W. at p. 749 (1847). A notice in accordance with the rules in section 49, should be given where notice is not excused. Before the Act, persons who became parties to bills as warrantors, have been held not entitled to the same notice as ordinary indorsers. As to their position now, see section 50, s-s. 2 (&), and section 56 and notes thereon. )r want ^w that le Com- lom the or pay ILLUSTRATIONS. 1. A bill was indorsed for the accommodation of the drawer. The drawee refused to accept, and the bill was protested for non- acceptance and non-payment. Notices of both were sent to the drawer, but of non-payment only to the indorser. Held, that tlie indorser was discharged, although the drawer had no effects in the hands of the drawee : Gore Bank v. Craig, 7 U. C C. P. M44 (1868). 2. It is only the drawer or indorser who has not been noti- fied that can claim such discharge : Grant v. Winstanley, 21 V.V*C. P. 257 (1871). .S. A bank's notary received for protest a note made and indorsed for his accommodation which the bank had discounted for him. Instead of protesting it he gave it up to the parties, saying he had paid it. Some months after this he absconded. Held, that by the laches of the bank both maker aiid indorser were discharged : Canadian Bank of Commerce v. Green, 45 U. C. Q. B. 81 (1880). 4. The omission to give notice of non-acceptance is not cured by notice of non-acceptance given with the notice of non- payment : Jones v. Wilson, 2 Rev. de Leg. 28 (1813). 5. The indorser of a bill of exchange is in all cases entitled to notice, even when the drawee has no effects in his hands : (liiffin V. PhiUips, 2 Rev. de Leg. 30 (1821). 272 §48. BILLS OF EXCHANOK 0. A person who is interested in the hill, to the knowledge - of the holder, hut whose name is not on it, is not entitled to notice of dishonor: Anderson v. Archihald, 8 N. S. 1). 88 (1872) ; Swinyard v. Bowles, 5 M. k S. 02 (1810) ; Hitchcock v. Ilumfrey, 5 M. & Gr. 559 (1849); Walton v. Mascall, 19 M. & W. 72 (1844) ; Carter v. White, 25 C'h. 1). GOG (18HB). 7. A bill is dishonored and the holder gives notice to the indorser but not to the drawer. If the indoroer in turn sends a notice to the drawer, the holder can sue both indorser and drawer. If such notice be not given the holder can sue the indorser, but neither of them can sue the drawer : Bickford v. Ridge, 2 Camp, at p. 588 (1810) ; Miers v. Brown. 11 M. k W. 872 (1848) ; Berridge v. Fitzgerald, L. R. 4 Q. B. at p. G42 (1809). 8. Where the drawer or an indorser of a bill is discharged for want of notice of dishonor, he is also discharged from any liability on the consideration for the bill : Bridges v. Berry, 8 Taunt. 180 (1810) ; Peacock v. Pursell, 14 C. B. N. S. 728 (1808). So also is any person who is a warrantor or surety for him : Anderton v. Beck, 10 East 248 (1812) ; Hopkins v. Ware, L. R. 4 Ex. 208 (1809). {(L.) Where a bill is dishonored by non-accept- ance, and notice of dishonor is not f^nven, the rights of a holder in due course subsequent to the omis- sion shall not be prejudiced by the omission : Imp. Act, s. 48 (1). A person acquiring such a bill might become a holder in due course if it bore no mark of dishonor, and he was not aware of the dishonor: section 29 ; Roscow v. Hardy, 12 East, 434 (1810) : Dunn v. O'Keefe, 5 M. & S. 282 (181G); Whitehead v. Walker, 9 M. & W. 606 (1842). {h.) Where a bill is dishonored by non-accept- fficient. ^"^^ and due notice of dishonor is given, it shall Notice of nou-accei)- taiice not given. Notice of non-accep- tance 8U NOTICE OF DISHONOR. 273 iept- ights ccept- shall not l)t' uecessurv to ^'ive notice of u snbsequent § 48. dishonor by non-payaient, unless the bill shall in the meantime have been accepted. Imp. Act, H. 48 (2). The Bubsequent acceptance referred to here may be ^iiher an acceptance by the drawee, or by an acceptor for lionor or referee in case of need : section 66. 49- Notice of dishonor, in order to be valid ^/.'jV^VoV and effectual, must be ^nven in accordance with the **'"'"'"*" following rules : Imp. Act, s. 49. These rules are taken from section 49 of the Imperial Act, with the exception of that in sub-section 4, which declares a notice of protest or dishonor to be sufficient if posted on the day after the protest and dishonor, addressed to the party at his usual address or residence or at the ce where the bill is dated unless he has given some other •ess on the bill. This latter provision obviates many of the difficulties that arise, which have been urged an easons for delay in giving notice or for excusing notice alto- gether, in England and the United States, where they have no law making the place where the bill is dated a suffi- cient address. See the notes and illustrations under sub- section 4. Sub-section 10 of the Imperial Act allowing notice to be given to the trustee of a bankrupt was omitted as being inapphcable to Canada, there being no bankrupt law here, and the Act not recognizing or taking notice of the provin- cial Acts relating to assignments for the benefit of creditors, or the appointment of trustees or curators to the estates of those unable to pay their debts. (a.) The notice must be given by or on behalf ^yjho^^ii^. of the holder, or by or on behalf of an indorser m'o.b.e.a. — 18 274 BILLS OF EXCFIANOE i ]iy agent § 49. who, at the time of <^iving it, is himself liable on the bill ; (/;.) Notice of dishonor may be ^nven by an a^ent either in his own name, or in the name of any party entitled to j^nve notice, whether that party is his principal or not : Imp. Act, s. 49 (1) (2) ; C. C. 2826. The holder or liig af;ent may p[ive notice to all the ante- cedent parties entitled to notice, or only to such of them as he may desire to hold liable on the bill. In the latter case, an indorser receiving notice may thereupon give notice to any additional parties entitled to notice, whom he desires to hold liable : sub-sections 2 and 3. The usual practice in Canada is for the holder to give notice to all prior parties who have not waived notice on the bill. ILLUSTRATIONS. 1. When a note payable at a bank is sent there for collection, the protest may properly be niaile and notice given by the bank although it ha3 no interest in the note: Wilson v. Pringle, 1-1 U. C. Q. B. 280 (1S50); (lirvan v. Price, 8 N. B. (3 AUe'^) 409 (1857) ; Howard v. Oodard, 9 N. B. (4 Allen) 452 (1860). Also by any person authorized to receive payment : Rowe v. Tipper, 18 C. B, 249 (1858). 2. An indorser is notified of dishonor by a person who form- erly held the bill, but bad not at the time of dishonor any such relation as above indicated. He is released : Stewart v. Kennett, 2 Camp. 177 (1809) ; Cbanoine v. Fowler, 8 Wend. 173 (1829). 8. The drawee may act as agent for a party entitled to give notice: Rosher v. Kieran, 4 Camp. 87 (1814), as modified by Harrison v. Ruscoe, 15 M. & W. at p. 285 (1840). If, however, the drawee be not properly authorized the notice is bad : Stanton V. Blossom, 14 Mass. 116 (1817). ' ■• of di Kean IT. Staflfc Willi Mete. NOTICE OF DISHONOR. 275 to give "liitied by iowevev, Istanton 4. An indorser who is discharged by notice coming one day ^ ^g_ late gives notice in time to the drawer. The latter is not liable : Turner v. Leech, i B. & A. 451 (1821). 5. A notice by an attorney is sufficient, although he does not say for whom he is acting : Woodthorpe v. Lawes, 2 M. (t W. 109(1836. (). An indorser who holds a bill as agent for the indorsee may give notice in his own name : Lysaght v. Bryant, C. B. 46 (iHoO). 7. Notice by a party liable is good, although he is not at the time certain of the dishonor or of his own liability : Jennings V. Roberts, 4 E. *<: B. 015 (1855). H. If the holder be dead, notice should be given by his personal representative : White v. Stoddard, 11 Gray, 258 (1858). (c.) Where the notice is given hy or on behalf -If^'^^jf^;^ of the holder, it enures for the benefit of all subse- partL. quent holders and all prior indorsers who have a right of recourse against the party to whom it is given ; (d.) Where notice is given by or on behalf of an indorser entitled to give notice as hereinbefore provided, it enures for the benefit of the holder and all indorsers subsecpient to the party to whom notice is given : Imp. Act, s. 49 (8) (4). The holder of a bill is entitled to avail himself of notice of dishonor given by any party to the bill : Chapman v. Keane, 3 A. & E. 193 (1835), overruling Tindal v. Brown, 1 T. R. 167 (1786); Wilson v. Swabey, 1 Stark. 34 (1816); Stafford v. Yates, 18 Johns. 327 (1820); Brailsford v. Williams, 15 Maryland, 157 (1859) ; Palen v. ShurtlelT, f> Mete. 581 (1845). 276 BILLS OF EXCHANGK if §49. Mode of notice and terms. (c.) The notice may be given in writing or by personal comninnication, and may be given in any terms which sufficiently identify the bill and inti- mate that the bill has been dishonored by non- acceptance or non-payment : Imp. Act, s. 49 (5). The tendency of modern decisions in England has been to accept as sufficient any notice however informal, from which the party receiving it may know that the bill, on which be is conditionally liable, has been dishonored. In Solarte v. Palmer, 1 Bing. N. C. 194 (1834), the House of Lords held that a notice must inform the holder either in terms or by necessary implication, that the bill had been presented and dishonored. Chalmers says, p. 158 : " Since 1841 it does not appear that any written notice of dishonor has been held bad on the ground of insufficiency in form." Under the Act very informal notices will suffice, and the notice in the case referred to by Chalmers, Furze v^Shar- wood, 2 Q. B. 388 (1841), would no doubt now be held to be good. ; In the first schedule to the Act, are given forms (G. and H.) of notice of noting and of protest, for non-acceptance or non-payment. ILLUSTRATIONS. 1. A notice that a foreign bill has been returned protested is a sufficient notice of non-acceptance, without sending a copy of the protest with the notice : O'Neil v. Perrin, Rob. &, Jos. Dig. 490(1889) ; Goodman v. Harvey, 4 A. & E. 870 (1830). 2. A notice to the indorser must, either in express terms or by necessary intendment, shew that the note has been presented for payment and that payment has been refused: Bank of U. C. V. Street, Rob. & Jos. Dig. 496 (1842). 8. A notice to an indorser, describing the bill and saying that it "is due this day and unpaid, and as holder I look to you 10 by tele and DC was (3 R. M 11. iiis mi Houseg NOTICE OF DISHONOR. 277 & Jos. |36). trms or jsented k U. C. saying to you for payment," is sufficient : Bank of U. C. v. Street, 3 U. C. Q. B. f, ^g 29 (184G) ; Blinn v. Dixon, 5 U. C. Q. B. 580 (1848) ; Robson v. - Curlewis, 2 Q. B. 421 (1842). Also a verbal message to the drawer to the same effect : Metcalfe v. Richardson, 11 C. B. 1011 (1852). 4. What is or is not a sufficient notice of the dishonor of a bill or note, when the facis are undisputed, is a question of law : Bank of U. C. v. Smith, 4 U. C. Q. B. 483 (1847). 5. A notice to an indorser stating that the note was duly protested for non-payment, is sufficient without saying that it was presented : Blain v. Gliphant, 9 U. C. Q. B. 478 (1852). 6. A notice describing the note, and adding, " you will in consequence of non-payment be held responsible" is sufficient: Harris v. Perry, 8 U. C. C. P. 407 (1859). 7. A notice giving other particulars of the note but not mentioning the amount is sufficient, when there is no evidence of the existence of another note : Handyside v. Courtney, 1 L. C. J. 250 (1857). . 8. A notice to a female indorser, beginning, " Sir," is sufficient if it reach her : Mitchell v. Browne, 9 L. C. J. 168 (1865), overruhng Seymour v. Wright, 3 L. C. R. 484 (1852). 9. Where the notice of dishonor loes not state that a fceign bill has been protested, the inaorser will not be liable : Delaney v. Hall, 3 N. S. (2 Thom.) 401 (1858) ; see Rogers v. Stevens, 2 T. R. 713 (1788) ; Gale v. Walsh, 6 T. R. 239 (1793) ; Robins v. Gibson, 1 M. & S. 288 (1818). Contra e.r parte Lowenthal, L. R. 9 Ch. 591 (1874). 10. Where it was alleged that a notice of dishonor was sent by telegraph, but the contents of the telegram were not proved, and no evidence given of its having been i-eceived, the indorser was held to be discharged : McLean v. Gamier, 15 N. S. (3 R. & G.) 276 (1882). 11. A verbal notice by the holder at the drawer's house to his wife is sufficient without saying where the bill is lying : Housego V. Cowne, 2 M. & W. 348 (1837). r: 278 §49. I h i k& . :.:. Uoturii of bill suffi- cient. luforuial notice. BILLS OF EXCHANOE 12. If there be more than one bill to which the notice may refer, the onus is on the defendant to prove this fact : Shelton v. Braithwaite, 7 M. & W. 436 (1841); Gates v. Beecher, 60 N. Y. (Sickles) at p. 527 (1876). 13. A notice to an indorser describing the bill and stating that it lies at a certain place dishonored, is sufficient: King v. Bickley, 2 Q. B. 419 (1842). 14. The holder's clerk wrote to an indorser that J. C.'s acceptance due that day was unpaid, and requesting his im- mediate attention to it. Held, a sufficient notice of dishonor : Bailey v. Porter, 14 M. & W. 44 (1845). To the same effect, Armstrong v. ("hristiani, 5 C. B. G87 (1848) ; Everard v. Watson 1 E. & B. 801 (1858) ; Paul v. Joel, 8 H. & N. 455 ; 4 H. & N. 855 (1859) ; Bain v. Gregory, 14 L. T. N, S. 601 (1806). (f.) The return of a dishonored bill to the drawer or an indorser is, in point of form, deemed a suffi- cient notice of dishonor: Imp. Act, s. 49 (6). (g.) A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal comnnniication. A mis- description of the bill shall not vitiate the notice, unless the party to whom the notice is given is in fact misled thereby: Imp. Act, s. 49 (7). The spirit of the Act is in favor of holding any notice sufficient which would reasonably inform the party that the bill on which his name appears, has bvien dishonored. ILLUSTRATIONS. 1. A notice to a firm about a note alleged to be indorsed by them, held not to be sufficient to bind a partner who was the real indorser : Bank of Montreal v. G rover, 3 U. C. Q. B. 27 (1846). uay idorsed l^vas the B. 27 '■r NOTICE OF DISHONOR. 279 2. Tlie following eiiors have been held not to vitiate the 8 aq notice, the correct particulars being sufficient to identify the bill or note : — a mistake in the due date of the bill or in its date ; BHnn v. Dixon, 5 U. C. Q. B. 580 (1848) ; Thorn v. Sandford, GU. C. C. p. 402 (1857); Low v. Owen, 12 ihiil. 101 (1.^(52), ("assidy v. Mansfield, 24 ihid. 888 (1874) ; Kobinson v. Taylor, 4 N. B. (2 Kerr) 108 (1848) ; Mills v. F.ank, U. S. 11 Wheat. (L'. H.)481 (1H26) ; Smith v. Whiting, 12 Mass. 6 (1815) ;— giv- ing a wrong amount : Thompson v. Cottt-rill, 11 U. C. Q. B. 185 (1H54) ; Bank of Alexandria v. Swann, U Tot. (N. S.) 88 (1885) ; — giving the name of a party incorrectly : (arvan v. Price, 8 N. li. (8 Allen) 409 (1857) ; Harpham v. Child, 1 F. it F. 052 (1859); Dennistoun v. Stewart, 17 How. (U. S.) 000 (1854) ; — transpos- ing the names of the drawer and acceptor; Mellersh v. Kippen, 7 Ex. 578 (1H52) ; — calling a bill a note, or vice veixa : Stockman v. Parr, 11 M. & W. 809 (1841) ; — naming the wrong bank or place whore the bill was payable or was lying : Bromage v. Vaughan, Q. B. G08 (1847) ; Rowlands v. Springett, 14 M. it W. 7 (1845). 8. A notice by holder to indorser in these terms . — "Messrs 11. are surprised to hear that Mrs. G.'a bill was returned to the holder unpaid," followed by a visit from the indorscr to the holder the same day, when he expressed his regret and promised to write to the other parties, was held sufficient: Houlditch v. Cauty, 4 Biug. N, C. 411 (1888). 4. For other instances of imperfect written notices accom- panied or followed by verbal communications, see East v. Smith, 4 1). & L. 744 (1847) ; Chard v. Fox, 14 Q. P.. 200 (1849); .Jenn- ings v. Roberts, 4 E. & B. 015 (1855) ; Viale v. Michael, ;{0 L. T. N. S. 403 (1874). 5 An unsigned notice in writing from the right person is sutHcient: Maxwell v. IJrain, 10 L. T. N. S. 801 (1H04) (h ) Where notice of dishonor is reciuired to be Notice , . niveu to l^iven to any person, it nuiy be given either to the i;*^"^^ °^t ptirty himself, or to his agent in that behalf: Imp. Act, s. 49 (8). . . 280 BILLS OF EXCHANGE § 49, The agent should be some person designated for that purpose by the party, or in charge or employed nt his office or residence. Where Darty dead. ILLUSTRATIONS. 1. Delivery of a notice to a man cutting wood in the indorser's yard is insufficient, there being no evidence that the the man was an inmate of the family, or that the indorser received the notice : Commercial Bank v. Weller, 5 U. C. Q. B. 548 (1848). 2. Where the maker of a note gave the wrong address of his accommodation indorser, a notice to the latter at the address given was held to be binding on him : McMurrich v. Powers, 10 U.C.Q.B. 481 (1858). 8. Where an indorser goes to fill an office temporarily but leaves his family in his old home, a notice left there is sufficient : Ryan v. Malo, 12 L. C. R. 8 (18G1). 4. Verbal notice to the solicitor of an indorser is insuffi- cient : Cross v. Smith, 1 M. & S. at p. 554 (1816). 5. Notice to the person who has indorsed the bill under a power of attorney is probably good notice to the indorser : Firth V. Thrush, 8 B. & C. at p. 391 (1828). 6. Notice to a clerk ir. the office of the indorser who is a merchant, is sufficient : Allen v. Edmundson, 2 Ex. at p. 724 (1848). 7. Notice to a referee indicated by an indorser is not suffi- cient to bind the latter : ev parte Prange, L. R. 1 Eq. at p. 5 (1865). 8. Where a party has no office, and boards at a private boarding house, a notice left there with a fellow-boarder, in his absence, is sufficient : Bank of U. S. v. Hatch, 6 Pet.:(U. S.) 250 (1832). (i.) Where the drawer or indorser is dead, and the party giving notice knows it, the notice unist be given to a personal representative, if snch there NOTICR OF DISHONOU. 281 is and, with the exercise of reasonable diligence, § 49. he can be found : Imp. Act, s. 49 (i)). Sub-section 4 provides that a notice posted shall not be invalid by reason that the party to whom it is addresseil is dead. As the present clause is imperative where the death is known and a representative can be found, that sub- section will be limited to the cases where the party giving notice does not know of the death or cannot find such repre- sentative. Chalmers, p. 160, says there was no English decision on the point. Firth ot sufti- (1865). pri m (U. S.) Id, and there ILLUSTRATIONS. See also illastrations under sub-section 4, post p. 287. 1. A notice of non-payment, merely "To the executrix or executorof the late Mr. Jones, Toronto "is bad: BankofB.N.A. V. Jones, 8 U. C. Q. B. 86 (1851). 2. Where an indorser died intestate and no administrator had been appointed when the note matured, a notice addressed to him at his last residence was held good: Gillespie v. Marsh, 1 r. C. C. P. 458 (1852). 3. Where S. an indorser died and notices were sent addressed to the " Administrators of S.'s estate, at B." and also at C, where the deceased had lived, and it appeared that they reached them, the estate was held liable : McKenzie v. Northrop, 22 r. C. C. P. 883 (1872). 4. The indorser, a married woman, died intestate. A notice was addressed to the husband as executor of his wife and receivetl by him. The wife's estate was held liable : Merchants' Bank v. liell, 29 Griuit 413 (1881). 5. Where an, indorser has recently died and no administrator or executor can be found, a notice addressed to the " legal repre- sentative " of deceased, is sufficient : Pillow v. Hardeman, 8 Humphrey (Tenn.) 688 (1842). ■i • % ^ 282 § 49. Notice to non-part- ners. Time for notice. niLLS OF EXCHANGE G. A notice addressed to one of several executors or adminis- trators is sufticient : Bealls v. Peck, 12 iJarb. 245 (1851). (J.) Whore there are two or more drawers or iiulorsers who are not partners, notice must be ^iven to each of them, unless one of them has authority to receive such notice for the others : Imp. Act, s. 49(11). The contrary was held in Upper Canada: Bank of Michigan v. Gray, 1 U. C. Q. B. 422 (1841). Chalmers says, p. IGl, that there was no English decision on the ]ioint. The Act adopted the rule in the United Slates : Willis V. Green, 5 Hill (N. Y.) 232 (1843); Miser v. Trovinger, 7 Ohio St. 281 (1857) ; Boyd v. Orton, 10 Wis. 4S»5 (1803). (/.). The notice may be given as soon as the bill is dishonored, and must be given not later than the next following juridical or business day : Imp. Act, s. 49 (12). The Imperial Act provides that notice must be given " within a reasonable time " after dishonor. If the parties live in the same place it should be sent so as to arrive the day after dishonor, if in different places, so as to go off by next day's post if there is one. The Canadian Act has adopted the old rule in force in Ontario : R. S. C. c. 123, s. 23. In Quebec the holder had three days after protest to give notice : C. C. Art. 2331. For questions as to time of giving notice under the old law, see Nassau v. O'Reilly, Rob. & Jos. Dig. 498 (1888) ; Bank of B. N. A. v. Ross, 1 U. C. Q. B. 199 (1843) ; Chap- man V Bishop, 1 U. C. C. P. 432 (1852) ; Brent v. Lees, 2 Rev. de Leg. 835 (1820). See also illustrations under sub-section 4, post p. 287. 8. of dif iiotic( to ant dish 01 Ea( of the to the As notice f-tiiJ, or )K«t givi to protf See ^vilo do NOTICE OF DISHONOR. 283 ue old 838); Chap- jees, 2 .287. 2. Whore a bill, when dishonored, is in the § 49. hands of an agent, he may either himself ^'i\e iMshoi.or- I -I'll 1 1 -n 1 "'' '''" ''' notice to the iiarties liable on the bill, or he niiiy i"i"'i'"'f give notice to his principal. If he gives notice to liis principal, he must do so within the same time as if he were the holder, and the principal, upon receipt of such notice, has himself the same time for giving notice as if the agent had been an inde- pendent holder: Imp. Act, s. 49 (18). This and the following sub-section lay down the rule for successive notices of dishonor, a practice not followed in Cfinada before the Act, at least in Ontario or Quebec, where the usage has been for the holder at the time of dishonor to give notice to all the parties through the post office in accordance with the rules laid down in sub-section 4. See illustrations under the next sub-section. 8. Where a party to a bill receives due notice noucc, to of dishonor, he has, after the receipt of such >"''■'''''' notice, the same period of time for giving notice to antecedent parties that the holder has after the dishonor: Imp. Act, s. 41) (14). Each party receiving notice of dishonor has the whole of the following business day to send notice to any party to the bill whom he desires to hold liable. As the usage in Canada has been for the holder to give notice to all parties entitled to it, he should either do so still, or let the parties whom he notifies know that he is net giving notice to the others so that they may take steps to protect themselves if necessary. See note to sub-section 4, j^ost p. 287, as to indorsers V ho do not give their address. 284 §49. When notice shall be given. BILLS OF EXCHANGE ILLUSTRATIONS. 1. A holder in the country gives to his banker there a bill payable in London. The banker sends it to his London agent, who \>resents it and gives notice of dishonor to the country banker. The latter, the day after getting notice, notifies the customer, who in turn notifies his mdorser. The latter has received due notice : Bray v. Hadwen, 5 M. tt S. G8 (IHIG). 2. An indorser received a notice of dishonor from the post office on Sunday. Held, that he had until Tuesday to give notice to antecedent parties, as he was not bound to open his letter until Monday morning : Wright v. Shawcross, 2 B. ik A. at p. 501, n. (1819). 3. Different branches of a bank are considered as distinct parties for the purpose of this sub-section : Clode v. Bayley, 12 M. &, W. 51 (1843) ; Prince v. Oriental Bank', 3 App. Cas. at p. 832 (1878) ; Steinhoff v. Merchants' Bank, 40 U. C. Q. B. 25 (1881). 4. A party pays a bill nuprn protest for the honor of an indorser who is abroad and to whom he posts the bill the same day. The latter by return post sends notice of dishonor to the drawer. Although this is not received until six days after dis- honor it is in time : Goodall v. Polhill, 1 C. B. 233 (1845). 5. The holder in order to charge an earlier party by notice from himself, must send the notice as promptly as if to his own immediate indorser : Rowe v. Tipper, 18 C. B. 249 (1858). 6. The one day allowed by law to give notice cannot be extended to allow an agent and his principal to confer : e.r itnite Prange, L. R. 1 Eq. 1 (1865). 4. Notice of the protest of dishonor of any bill payable in Canada shall, notwithstanding anything in this section contained, be sufficiently given if it is addressed in due time to any party to such bill NOTICE OF D13H0N0U. 285 r-'"' xiite ly bill ^tiling fit \\Li TlirouRli "^ l>.iHt oHlce. Ill 1 Ih bill entitled to such notice, at his custouuiry address § 49. or place of residence or at the place at which such bill is dated, unless any such party has, under liis si^mature, designated another place ; and in such latter case such notice shall be suHiciently given if addressed to him in due time at such other place ; and such notice so addressed shall be sufficient, although the place of residence of such party is other than either of such above mentioned places ; and such notice shall deemed to have been duly served and given for all purposes if it is deposited in any post oihce, with the postage paid thereon, at any time during the day on which such protest or presentment has been made, or on the next following juridical or business day ; such notice shall not be invalid by reason of the fact that the party to whom it is addressed is dead : R. S. C. c. 123, ss. 5, 23 ; C. C. 2328. The Imperial Act has no provision exactly corresponding ^°^'"^ °' to this sub-section. It is taken in part from section 5 of chapter 123 R. S. C, which was first enacted in 1874, and applied to the whole of Canada ; and in part from section 23 of that chapter which applied to Ontario alone, and Article 2328 of the Civil Code which applied to Quebec. The last clause was added in harmony with the decision of the Supreme Court in the case of Cosgrave v. Boyle, noted below. If the death of the party is known to the party giving notice, then the notice should be given to the per- sonal representative of the deceased, if he can be found : clause (A:) ante. 28<; BILLS OF EXOHANQK KtVO gs '11 .-If' § 49, Heretofore in Canada the usage has been for the holder imiorHorB~ Q't' ^^^^ time of dishonor to send notice to all parties entitled wiiodonot^Q jj. tijrougi, ti,j> pjjgj;^ addressed to them at the place at which the bill or note is dated. This is very froqucntly not the real address of the indorsers, especially when iniikor and payee or drawer and drawee reside in different parts of the country, and a great many of such notices never reach the parties to whom they are addressed. If the holder should not send a notice to all the parties, an indorser who in such a case has neglected to give his real address, may find that his recourse against antecedent parties is entirely gone. By sub-section 5 when such a notice is addressed and posted, the sender is deemed to have given due notice, and by the present sub-section notice is " sufticiently given," when given in this manner. It is not likely that in such a case where the notice does not reach an indorser that he will be held to have " received due notice " within the meaning of sub- section 3 r3. It I be any Indorser loper to [ght nut ron, n (183H that the lence of the mUh'esH of an indorser, and if it appear that it is nut the real address of the drawer the holder must show that" he had made duo enquiry : Barnewell v. ^Fitchell, 8 Conn. 101 (1819); Lowery v. Scott, 24 Wend. (N.Y.) 358 (1H40); Pierce v. Struthtrs, 27 Penn. St. 249 (18515). Where a hill is sent by a Canadian holder to the United States for collection and is dishonored, the custom is to return the hill to the owner with the protest and the. notices, and let him send them to the proper addresses. In New Brunswick before the Dominion Act of 1874, it was held that a^iosted notice addressed to the drawee at the place were the bill was datsd was not valid in the absence of proof that a notice sent to that office would reach him : Balloch V. Binney, 5 N. B. (3 Kerr) 440 (1847). Indorsers who may wish to look to prior parties should be careful to see (1) that their proper address is given, and (2) that notice of dishonor has been given to such prior parties, and if not, to give it themselves within the legal delay. ILLUSTRATIONS. 1. A notice deposited in the Toronto post office for an indorser residing there is as good as if left at his residence : Commercial Bank v. Eccles, 4 U. C. Q. 13. 8.S0 (1H47). 2. A notice duly posted and addressed to an indorser in "York Township" in which he resided, was held sufficient, lliere being no evidence that it should have been otherwise addressed : Bank of U. C. v. Bloor, 5 U. C. Q. 13. 019 (1849). .S. An indorser's agent gave a wrong address which was .lintiflf's agent under his signature. A notice sent ^s given held sufficient : Vaughan v. Ross, 8 U. C. .. 50' S52). I. Nutice mailed between eight and nine in the evening of t ic day after protest held sufficient, though the post-mark was the following day : Wilson v. Pringle, 14 U. C. Q. B. 230 (1H56). 49. *t :■ 288 BILLS OF EXCHANGE § 49. ''*• ^ "^^^ ^*^ presented for payment at G., where the isulorser lived, and notice was mailed the following day at M., five miles distant, but not received at G, until the fourth day after dishonor. Held, sufficient : Taylor v. Grier, 17 U. C. Q. B. 222 (1858). G. When a notary mailed a notice to a wrong address which reached the indorser about a week later, and there was some evidence of the latter having applied to plaintiff for further time, the court refused to disturb a verdict for plai/itift' : Leith v. O'Neill, 19 U. C. Q. B. 233 (18G0). 7. An indorser died shortly before the maturity of the note. The bank which held it not being aware of his death sent the notice of dishonor addressed to him at Toronto where the note was dated. The firm who had got it discounted took it up and sued his executor. They were aware, before the note matured, both of the death and of the will. Held, reversing 5 Ont. A. R. 45S, that the notice was sufficient, and enured to the benefit of planitiffs : Cosgrave v. Boyle, G S. C. Can. 1G5 (1881). 8. A notary in Montreal protested a note payable there, which was dated at Belleville. Being unable to decipher an indorsement, he put &f'ac simile of it on an envelope addressing it to Belleville. The holder knew the indorser's name but did not tell the notary. The indorser swore that he did not receive the notice. Held, that he was discharged : Baillie v. Dickson, 7 Ont. A. R. 759 (18H2). 9. The address under the indorser's name need not be writ- ten by himself. It may be written by another with his knowledge and consent. Sending a notice to such address is sufficient, even if the holder has reason to know that it is not hio residence or place of business : Hay v. Burke, 16 Ont. A. R. 468 (1889). 10. A note dated at Montreal payable at Albany, N.Y., was protested there, and a notice addressed to the indorser at Montreal. Held, sufficient as to form, but invalid as it did not appear that the postage was prepaid : Howard v. Sabourin, 5 L. C. B. l'> (1854). NOTICE OF DISHONOR. 289 §49. 11. A notice which the notarv swore was mailed on the <}veuing of the last day for mailing, was held sufficient although )t bore the stamp of the following day : Doutre v. La Banque .Jacques Cartier, 4 L. N. UH (1H80); Stocken v. Collin, 7 M. .'i W. 515 (1H41); New Haven Co. Bank v. Mitchell, 16 <'onn. 20() (iS4*2). 12. Tnder the Dominion Act of 1874, a notice posted to the address of the iiidorser the day following dishonor is sufficient, altliuugh he livets in the same town, and there is no local delivery : Merchants' Bank v. McNutt, 11 S. C. Can. 120 (1883). 18. A notice to an indorser posted at St. John, addressed " yir. 1). Duff, near iilake's Mills, Naslnvaak," is not sufficient witliout proof that such a letter would probably reach him : Uobinson v. Duff, 4 N. B. (2 Kerr.) 206 (184.S). 14. The holder got the address of an indorser from the payee of the note, with whom ho did business, and addressed a notice to him there. It was afterwards learn»)d that he had lately removed. Held, sufficient : liank of New Brunswick v. Millican, N. B. (4 Allen) 254 (1H,')1)). 15. It has been held in England that to address a letter to a pi'ison in a large town without any addition to the name of the pii'soii or of the town may be invalid. A letter addressed simply •• \V. Haynes, Bristol," held, not sufficient : Walter v. Haynes, U. \ M. 149(1824). IC). A notico addressed " Mrs. Susan Collins, Boston,'" held siilHcicnt, there being no proof there was any other of the name. • Mis. Collins, Boston," would probably have been held insutli- vient : True v. Collins, 8 Allen, i40 (18(J2). 17. A drawer or indorser will be presumed not to have "hanged his address during the currency of the bill : Bunk of liiia V. Phillips, 8 Wend. 408 (182J)). 5. Where n notice of dishonor is duly addressed misihi and posted, as above provided, the sender isj^vj^.y : auv iiiiscarria^e by the post M ExcUHt'K for iioii- notice ami delay. «)rti(e: Jnip. A('t,s.4<)(1.5); 11. S. C. c. I'i.'i, s. 'iH. If the address oii the letter is that on the hill no ques- tion will arise. If however the holder knowing that this is not the usual address or residence of the party, undertakes to send a notice to such address or residence, he should he certain that he is correct. In such a case it would he prudent to send a notice to the address on the hill as well. If the receipt of the notice is denied, plaintiff must prove that it was given : Macdougall v. Wordsworth, 8 U. C. C. P. 400 (1858) ; Merchants' Bank v. Macdougall, BO U. C. C. P. 286 (1879); Hawkea v. Salter, 4 Bing. 715 (1828). A protest is prima facie evidence of the service of notice of dishonor : section 98, s-s. 5. By IX. S. C. c. 85, s. 43, as soon as any letter is deposited in the post office it ceases to he the property of the sender and becomes the property of the person to whom it is addressed. It is in accordance with principle that the loss should fall on the owner. See Bank of U. C. v. Smith, 8 U. C. Q. B. 358 (1840) ; Taylor v. Grier, 17 U. C. Q. B. 222 (1858) ; Shannon v. Hastings, M. Ins. Co. 2 Ont. A. R. 81 (1877); Delaporte v. Madden, 17 L. C. J. at p. 32 (1872) ; Parker v. Gordon, 7 East, 885 (180G) ; Woodcock V. Houldsworth, 16 M. \' W. 124 (1846); Dunlop v. Higgins, 1 H. L. Cas. 380 (1848). 50- Delay ill giving notice of dishonor is ex- cused where the delay is caused by circumstances beyond the control of the party giving notice, and not imputable to his default, misconduct, or negli- gence : when the cause of delay ceases to operate the notice nnist be given with reasonable diligence : Imp. Act, s. 50 (1). iiinl NOTICE OF DISHONOR. 291 B. B. 32 ex- \ces and [egli- L'ate luce : The present sub-section deals with the circumstances which excuse delay in giving notice of dishonor : sub-section 2 with the circumstances which dispense with it entirely. The language used is very similar to that in section 40 regarding the excuses for delay in the presentment for payment; and in section 51, s-s. 9, regarding excuse's for delay in noting or protesting. In England and the United States where no provision exists similar to that in section 49, s-s. 4, recognizing as sufficient, a notice posted to any party addressed to the place where the bill is dated, if no other address is given, circumstances would excMise delay, which would not be sufficient in Canada. Notice does not require to be given until after presentment and dishonor. Where delay in presentment is excused, a notice mailed tlie following day is regular. The only circumstances likely to arise in Can- ada to cause excaaable delay in giving notice, would be the death, sudden illuesp, or some accident to the person mak- ing out or posting the notices, or so'.ne accident to the messenger charge. See ante p. 98. Where an acknowledgement of liability is relied upon to establish a waiver it must be made with full knowledge of the facts : Goodall v. Dolley, 1 T. 11. 712 (1787). • ILLUSTRATIONS. 1. An indorser asked for time and promised to pay. Held, to be a waiver of notice : Bank of Upiier Canada v. Cooley, 4 C. C. 0. S. 17 (188r)). Where an indorser writes the bolder that the mtiker of a note is insolvent to make him l)elieve that presentment and notice are unnecessary, it is a waiver of notice: Ik'ckett V. Cornish, 4 U. C. Q. li. IHH (1847). 2. A promise to pay with knowled^^e of the facts is a waiver of notice : Bank of B. N. A. v. Ross, 1 V. C. Q. B. 109 (1844) ; 294 BILLS OF EXCHANGE § 60. l^rown V. Marsli, 1 U. C. C. P. 488 (IHS'i) ; Gillespie v. Marsli, '- ihiii. 458 (1H52); Burke v. Elliott, 15 U. C. Q. B. GIO (1858) ; Shaw V. Sahiion, 19 U. C. Q. B. 512 (1864) ; Ross v. Wilson. 2 Rev. (le Leg. 28 (1H12) ; Mills v. Gibson, 10 L. J. C. P. 249 (1H47) ; Woods v. Dean, 8 ]}. i^ S. 101 (18(52) ; Coidery v. Colville, 82 L. J. C. P. 210 (18(58) ; Bartholomew v. Hill, }> L. T. N. S. 756 (1862); Kilhy v. Rochussen, 18 C. B. N. S. 857 (1865) ; promise not sufficiently definite or well proved to amount to a waiver : Bank of Montreal v. Scott, 24 V. C. Q. B. 116 (1864); Reed v. Mercer, 16 U. C. C. P. 279 (18(55). 8. Waiver of notice to the holder enures to the benefit of prior parties, as well as to subsequent holders : Rabey v. Gilbert, 80 L. J. Ex. 180 (1861). 4. Waiver of notice enures to the benefit of the holder of a bill, and of all indorsers subsequent to the party to whom the waiver is made : Coulcher v. Toppin, 2 T. L. R. 657 (1886). t Whfii drawer not entitlerl to iiotipe. Drawer priiici)ial aobtnr. (f.) As regards tlu» drawer in the following cases, namely, (1) where drawer and drawee are the same person, (2) where the drawee is a tietitious person or a person not having capacity to contract, (8) where the drawer is the person to whom the bill is presented for payment, (4) where the drawee or acceptor is, as between himself and the drawer, under no obligation to pay the bill, (o) where the drawer has countermanded payment ; Imp. Act, s. 50, (2) (c). In these cases the drawer is in reality the principal debtor, and except in the last the bill is not what on its face it purports to be. He is therefore on the principles of the law merchant not entitled to notice, which is accorded only to the person who in effect only promises to pay if the person primarily liable does not honor the bill on due pre- sentment, and if notice of such dishonor is duly given him. NOTICB OF DISHONOR. 295 Where drawer aud drawee are the same person, or where ^ 50. the (h'awee is a fictitious person or a person not having capacity to contract, the holder may, if he choose, treat the instrument as a promissory note : section 5, s s. 2. The drawer would then be in the position of maker of the note and so not entitled to notice of its dishonor. Seep. 56 autr. In llio other instances notice is equally unnecessary. ILLUSTRATIONS. \. Where the drawer had no funds in the hands of the acceptor and made no provision for the payment of the bill, he is liable without protest or notice of dishonor : Knapp v. Bank of Montreal, 1 L. C. H. 2r)2 (1850); Bickerdike v. Bollman, 1 T. \\. Wr> (17S0) ; Dickens v. Beal. 10 Pet. (U. S.) 572 (1886). 2. A drawer wlio had no ett'ects in the hands of the drawees, or any reasonable ground for expecting he would have or that the bill would be honored, may be sued without previous notice pf dishonor : Stayner v. Howatt, 15 N. S. (8 R. & G.) 207 (1882). 8. A bill drawn payable at the drawee's is presumably an accommodation bill, and he is not entitled to notice : Sharp v. Bailey. 9 B. & C. 44 (1829). 4. Presentment of the bill to the drawer, as the executor of the acceptor, renders notic to him unnecessary : ('aunt v. Thomp- son, 7 C. B. 400 (1849). {(L) As regards the indorscr, in the following cases, namely, (1) where the drawee is a fictitious person or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the hill, (2) where the indorser is the person to whom the bill is presented for payment, (8) where the bill was accepted or made for his accommodation. Imp. Act, s. 50 (2) {(1). Wlieii iiulnrser not ••niitlfd to iiotici'. 296 BILLS OF EXCHANOK . >> . iU3» Notice need not be given to the indorsor in these casos^ bocanse in (1) he has no reasonable ground for believing that tliu bill will be honored : in (2) he is aware it is not paid : and (3) he is the person who ought to pay it. An indorser is entitled to notice of dishonor whether the dra\*ee has funds in his hands or not : Griffin v. Phillips, 2 Rev. de Leg. 30 (1821) : Knapp v. Bank of Montreal, 1 L. C. R. 252 (1850). Notice to Others than Dhawek and iNDonsEits. The Act provides only for notice to the drawer luul indorsers of a bill. The acceptor of a bill and maker of a note are liable without notice : section 52, s-s. 3 ; section 88, s-s 2. The liability of persons who are not parties to a bill, but, who may be guarantors of the bill or of some of the parties to it, or who may be liable on the consideration for which the bill is given, is not affected by the Act, but will reniiiin subject to the laws in force in the several provinces. A person who has given a guarantee for the payment of a bill is liable without notice of dishonor : Palmer v. Baker, 22 U. C. C. P. 69 (1871); Warrington v. Furbor, 8 East, 242 (1807); Murray v. King, 5 B. & A. 1()5 (1821); Van Wart V. Wooliey, 3 B. & C. 439 (1824); Walton v. Mascnll, 13 M. & W. 72 (1844). It has also been laid down that the person who gives a guarantee for the price of goods to be supplied to the acceptor of a bill or the maker of a note is not entitleil to notice of dishonor : Anderson v. Archibald, 3 N. S. 1). 88 (1872); Holbrow v. Wilkins, 1 B. & C. 10 (1822); while if the goods are for the drawer of the bill he is entitled to notice : Philips v. Astling, 2 Taunt. 206 (1809). See also Swinyard v. Bowes, 5 M. & S. 62 (1816) ; Camidge v. NOTICE OF DISHONOR. 297 AUenby, 6 B. & C. 373 (1827) ; Smith v. Mercer, L. R. 3 ;^ 50. Ex. 51 (1867); Carter v. White, 25 Ch. D. 66G (1883). As to those wlio have placed their nameu on bills in l^iu'bec pour aval or as warrantors elsewhere, see the notes on section 56. 51. Where an iiiluiid bill has been dishonored ^'<"i"8o>; ifc may, if the holder thinks tit, be noted aiid '"'*"'^ "'"• protested for non-acceptance or non-payment, as tiie case may be ; but, subject to the provisions of tiiis Act with respect to notice of dishonor, it shall not, except in the Province of Quebec, be necessary to note or protest any such Ijill in order to preserve the recourse against tiie drawer or indorser; hut in the case of a bill drawn upon any person in the Province of Quebec, or payable or accepted at any place therein, in default of protest for non-accept- ance or non-payment, as the case may be, and of notice thereof, the parties liable on the bill other tiian the acceptor are discharged, subject, never- tlieless, to the exceptions in this section herein- after Contained: Imp. Act, s. 51 (1); C. ('. -22^8, •2:U<). Section 51 of the Imperial Act reads as follows: — st.c. r.i,>f '■ . Iiii|iL'riii.l "Where an inland bill has been dishonored it may, if the ^<' liolder think fit, be noted for non-acceptance or non-pay- ment, as the case may be; but it shall not be necessary to note or protest any such bill in order to preserve the recourse against the drawer or indorser." It will be seen tiiat the Canadian Act, for the provinces other than Quebec, JH substantially the same as the Imperial Act. The wordii " subject to the provisions of this Act with respect to notice of dishonor," were added in the Senate, to make it clear that iV 1298 BILLS OF EXCHANOK § 51. ^vhile inland bills need not be noted or protested, there was " MO intention to relieve from the duty of giving notice of dishonor, as laid down in nections 48 and 49, when the drawer or indorsers were to be held liable. All biUs IIIIIKt 1>L' •jiroteHtcil ill yuolx'f. Dptioiml elsewliere. ("imflift of lawH. By the latter part of the clause, Quebec retains its old law as embodied in articles 2298 and 2319 of the Civil Code which required a notarial protest with notice to the drawer and indorsers of an inland as well as a foreign bill. In the other {>rovince8 the holder of an inland bill may either protest it, or merely send notices of dishonor in accordance with section 49. As a protest makes prima facie proof not only of presentation and dishonor, but also of the service of the notices, section 93, s-s. 5, the practice of protesting in these other provinces has. as a rule, been adopted. If a bill sent for acceptance or collection is not to be protested in case of dishonor, special instructions should be given by attaching a memorandum of "no protest," or otherwise. The protesting of inland bills for non-acceptance or for better security, elsewhere than in Quebec, is only com- pulsory as a preliminary to an acceptance supntt protent for honor: section 64; and a protest for non-payment, only ns a preliminary to presentment for payment to the acceptor for honor, or referee in case of need : section 66. In case of conflict, the laws governing presentment for acceptance or payment, and the necessity for or sufficiency of a protest, are those of the place where the act is done or the bill is dishonored; section 71, s-s. 2 (c). This principle is recognized in the second clause of the above Hub-section, which lays down the rule for the provinces other than Quebec ; but according to the last clause, every inland bill drawn upon any person in Quebec, or accepted ac any place in that province, must be protested in order to hold the drawer and indorsers, even if it be drawn and NOTICE OF DISHONOR. 299 "no or for ' coni- protent nt, only to the ion 66. ment for ficiency is done . This De above H'ovinces 86, every accepted in order ■rawn and made payable in anotlier province. According to the J^ 51^ recognized rules of interpretation, this last clause being exceptional and explicit would govern, although it is certain th it Parliament did not contemplate any nuch departuro houi the general rule. The form for the noting of a bill for nou-acee|)tance iHN'><»i>« given as Form A in the lirst schedule to the Act The protest of a bill need not be made out at the time, JL is sufficient for the notary to nnilce the necessary noting oil the bill, and to extend it later, as of the day of the noting : si'ction 92. When a bill is not paid on the day it falls due, but is expected to be on the following day, it is sometimes simply nuted on the day of maturity. If it is not paid the next day as expected, the protest is extended and the notices of - section. As to what is a foreign hill, see Hoction 4. Forei},n» notes as well as bills Hhoiild be protested in order to bin() the indorsers : section 8H, s h. 4. Chalmers says (p. 2) thntthis suh-section alters thelnw in England. He probably refers to the last clause which agrees with section 4, s-s. 2. The first clause is part of the law merchant: llogers v. Stephens, 2 T. R. 713 (178H) ; Gale V. Walsh, 5 T. U. 239 (1798); Orr v. Maginnis, 7 East, 859 (1806). qSentpio. •^- '^ bill Nvlii'^li li'is l)o('ii jjrotcsted for iioii- *'"'" acceptance, or a hill of which protest for non- acceptance has heen waived, may he snhsecjnently protested for non-payment. Imp. Act, s. 51 (8). The above provision regarding a waiver of protest for non-acceptance is not in the Imperial Act. The holder may upon dishonor by non-acceptance either proceed at once against the drawer and indorsers : section 43, s-s 2 ; or he may hold the bill until its maturity and present it for payment. notin'"*^ 4. Snbject to the provisions of this Act, when a bill is protested the protest nuist be made or noted on the day of its dishonor. When a bill has been dnly noted, the protest may be snbsequently extended as of the date of the noting: Imp. Act, s. 51 (4). The Imperial Act reads, " when a bill is noted or pro- tested it must be noted on the day of its dishonor." Tlie circumstances which excuse delay in protesting or noting', or dispense with protest, are to be found in sub-section (> (a), and sub-section 9. See section 92 for similar pro- orei^'* io biiK^ bhel'iw I wh'u'h t of tlie innis, 7 [• noii- r HOH- [lU'iitly )test for ' bolder Bceen duly noted, tbe protest iniiy be completed even during tbe trial. Orr \\ Maginniu, 7 KuBt, at p. 3()1 (180(5). Tbe rule requiring tbe noting or protest to be on tbe (iiiy of the disbonor is new. i). Wliciv the acceptor of a bill suspends pay- ment before it matures, the holder may cause the i)ill to he protested for better seciu'ity apiinst the • A bill imist be protested at tiic place wIk re Where bill it is dishonored, or at sonie other plact in Canada iippt hi! . • 1 • • ,.r<.t.s»,.,i. situate withni hve niiles of the place ol" present- ment and dishonor of such bill : Imp. Act, s. 51 ((»). The Imperial Act simply reads, " A hill must be protosttd at the place where it is dishonored. " The other wonls were added in the House of Commons on the r!nj»Re8tion of the Ministerof .histice, in order, ns he sai ', to " "acilitate the making of protests, and prevent hardship likely to occur in country districts " See Mitchell v. BariMg, i C. »t P. ^5 (1829). nnd section !13. Provided tliat — IdVimmKh ('''•) ^Vben a bill is presented thron^di the post the i.oHt. oJUj.^^ .jjj(| returned by post dishonored, it may \h- protested at the place to which it is returned, not later than on the day of its return or the nex^ juridical dny: Imp. Act, s. 51 ((>) {n). A bill may ho presented for payment through the post oflice where by agreement or usage this is sutUcient : section 45, s-8. (5. The Imperial Act requin^s the protest to be on the day of the return, il the bill arrives during business hours. Every day is a juridical day except the legal holidays mentioned in section 14, as. 2. Protest on (/>.) Every protest for dishonor, either for non- dirtiniior. acceptance or non-payment, may be made on the day of such dish )nor at any time after non-accep- tance, or in case of non-payment, at any time after three o'clock in the aftenioon : R. S. C. c. 123, s. '22. This claube in the Revised Statutes of Canada, cited above, applied to Ontario alone, having been taken from NOTHK OK DIKHONOH. 308: the Consolidated StatuteH of Upper Canada, chapter 42. ^ q\^ III (^)uebtc a bill could be protested for non-payment in the Hfternoon of the last day of grace : C. C. 231U. A bill may ai>parently be presented for payment at any ohv hiki reasonable hour on the day it falls due, or if payable oiii""'*"*' demand, at any reasonable time on any day on which the iiolder may choose to present it : section 45 ; but it cannot lie protested Iteforc three o'clock, even on Saturday. It was proposed in the Commons to make the hour one o'clock on Saturday, but the suggestion was not adopted. This pro- vision as to the hour is general, and apparently will apply lo bills i)ayable on demand as well as to those paynbln on a li.vfcii day. The protest does not recjuire to state that it wuH made alter three o'clock: Forms K and F. In England, Canada, and most of the United States, l)ill8, as a rule, are not presented by the notary in person, but by his clerk. When such a usage prevails it will be recognized. P^or notarial forms of protest, see First Sch"- ' dnle to the Act, Forms 13, C, D, E, and F. . 7. A protest imist coiituin a copy of the bill, or.^^'i'"'";"- l I .' ' tout HllHlI the original hill may he annexed thereto, and the"*"'''""' protest nnist be si<.(ned by tiie notary inakin«,' it, II ud nnist specify — {(I.) The person at whose re(piest the !)ill is pro- tested: {h.) The pla'*e and date of protest, the canse or icason for protei'tin«^ liie hill, tiie demand made, and the answer ^'^""1^ i^ "".^ » "*' tlie fact that the drawee or acceptor conld not he fonnd: Imp. .Vet, s. 7 (a) (/>). The words " or the original bill may be annexed thereto" are not in the Imperial Act ; but this mode of protesting. 304 BrLI.S OF bXCHANOE § 51. ^^iis that followed in Ontario before the Act : R. S. C. c. 128, ~~7 8. 24, and Schedule A. In Quebec, the bill and indorsements wore copied in tha protest whiul. was made in duplicate, tlie notary retaining one in hia otiice and delivering the other with the bill to the person at whose request the pro- test was made: Con. Stat. L. C. e. 64, ss. 11, 12; R. S. C. c. 128, 8. 29, and Schedule B. Before the Act of 1882, protests in England were usually made under the seal of the notary: Brooks' Notary, 4th ed. p. 82. The clause requiring a seal was struck out in Committee: Chahners, p. IT.*). In the case of foreign hills at least it is well for a notary to use his seal, as in some coimtries a protest will not be received in evidence without an ot!icial seal. ir I'lii ix loKt. t'tl". ILL r ST RAT IONS. 1. Before tlie Act a seal wns not rctmired on the protest in Ontario or Quebec: (loldif v. Maxwell, I l. C. Q. H. 424 (1841); Hussell v. Crofton. 1 V. C. ('. P. I2H (1852); R. S. C. c. 12.M, Schedules .\ and H; but was in Nova Scotia: Merchants' Hank v. Spinney, IH N. S. (1 R. A- 0.) H7 (IH7J>). 2. Refore the Act of 1>S51, a protest in Lower Canada that did not Htate that it was nmde in i\u) afternoon of tlie day it l)ore date, was invalid: Joseph v. Delisle, 1 L. ('. R. 244(18,51). H. When the protest is made for a qualified acceptance, it nuist not state a general refusal to accept, otherwise the holder cannot avail himself of the qualified acceptance: Rentinck v. Dorrien, East, 190 (IHor,); Sproat v. Matthews, 1 T. R. 182 (17H0). •S. \\ here a hill is lost ordestroyt'il, or is wfoii^iy oraecidtMitiilly detHiued from the person entitled to hold it, or is accidtMitnlly rctaiiu'd in a place othci than whtre payable, })rote8t may be inp.de on a PROTEST. 305 copy or written particulars thereof: Imp. Act, § 51. 8.51(8). The provision here made for protest in case of the accidental detention or retention of a bill is not in the Imperial Act. The necessary particulars can usually be obtained from the bill book. The right to make a protes ; on a copy of a lost note has long been recognized : Dehers v. Harriot, 1 Shower, 168 (1690). 9. Protest is dispensed with by any cirotnii- '" >^«" '*••'' '"f stances which would dispense with notice of dis- I,',?i|,".|"' honor. Delay in noting' or protesting is excused whe'^ he delay is caused hy circumstances beyond the ,;i'.i >1 of the holder, and not imputable to his defaiiiv, inisconduct or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence. Imp. Act, s. 51 (<)). The circumstances which dispense with notice of dis- honor are set out in section 50, s-s. 2. The circumstances which excuse delay in noting and protesting, as set out in this sub-section, are identical with those which excuse delay in making presentment for pay- ment, as set out in section 40. See the notes and cases cited under these sections; also Legge V. Thorpe, 12 East, 171 (1810); Gibbon v. Coggon, 2 Camp. 188 (1809); Greenway v. Hindley, 4 Camp. 52 ,1814); Patterson v.Beecher, 6 Moore, 319 (1821); Camp- bell V. Webster, 2 C. B. 258 (1845) ; -ex parte Lowenthal, L. R. 9 Ch. 591 (1874). 10. No clerk, teller or agent of any hank shnl) no !...,.>. ' " •' ottW'er to act as a notary in the protesting oi any bill or note'""'* m'o.b.k.a. — 20 lest. 806 BILLS OF RXCHANGE f ' . t. 1 »f 1 1 p 'll-^ ' ■J 5 § 51. payable at the bank or at any of the hraiuhes in which he is employed. \i. S. ('. c. 128, s. 11. This provision is not in the Imperial Act. It was tirst enacted for Upper and Lower Canada in 1850, and made applicable to the whole Dominion by the Revised Statutes of Canada. Iiiability of acceptor as to |>rej V here pay- ment to b« made. 52. When no place of payment is specified in the bill or acceptfince, presentment ibr paymentTT noF necessary in order to render the acceptor lial)le : Imp. Act, s. 52 (1). The Imperial Act reads, " when a bill is accepted generally, presentment is not necessary in order to render the acceptor liable." The change was made in this section to correspond with that made in section 19, which provider that an acceptance to pa> at a particular specified place is not a qualified acceptance. Tlie same rule applies to the maker of a promissory note: section 86, s-s. 1. See Wilson V. Brown, 6 Ont. A. K. 87 (1881) ; Shuter v. Paxton, 5 L.C. J. 65 (1860); Archer v. Lortie, 3 Q. L. K. 159 (1877) ; Mineault v. Lajoie, 9 R. L. 882 (1877); Rowe v. Young, 2 Bligh, H. L. at pp. 467, 408 (1820); Maltby v. Murrelle, 6 H. &, N. at p. 823 (18G0). Also notes and illustratioss under section 80, s-s. 1. The reason given by Chalmers for the rule in this section is that " at common law the debtor is bound to seek out his creditor to pay him": Coke on Littleton, s. 340; Cranley v. Hillary, 2 M. \- S. 120 (1813). The general rule in Quebe^ is, that if no place is indicated in th^ contract, payment should ho made at the domicile of the debtor: C. C. Art. 1152. By Art. 1069 of the Civil Code it is provided that in all contracts of a commercial nature in which the time of performance is fixed, the debtor is put in default by the mere lapse of time, and this would apply to PRESENTMENT FOR PAYMENT. 807 bills and notes not payable on demand, and would provide § 52. for interest from their maturity ; so that it becomes a mere question of costs, if the debtor when sued pays the money into court. A presentment and notice of dishonor unless dispensed with are necessary to render the drawer and indorsers liable : sections 45, 46, 48 and 49. 2. When a place of payment is specified in the JJ,e{,T»V"^ bill or acceptance, the acceptor, in the absence of rifled, an express stipulation to that effect, is not dis- charged by the omission to present the bill for payment on the day that it matures, but if any suit or action be instituted thereon before pre- sentation the costs thereof shall be in the discre- tion of the court : Section 62 (2) of the Imperial Act reads .* " When by the terms of a qualified acceptance presentment for payment is required, the acceptor, in the absence of an express stipu- lation to that effect is not discharged by the omission to present the bill for payment on the day that it matures." The change in the first part of the sub-section was made iwon for in the Senate to correspond with the change made in section 19 as to an acceptance at a particular specified place ; and in the latter part to meet the case of an acceptor providing funds at the proper place and the holder suing without applying there. Section 86 has a similar provision as to promissory notes. See Mclver v. McFarlane, Taylor, U. C. 113 (1824); Macauiay v. McFarlane, Rob. & Jos. Dig. 498 (1841); Rice V. Bowker, 8 L. C. R. 305 (1868) ; Mount v. Dunn, 4 L. C. R. 348 (1854); O'Brion v. Stevenson, 15 L. C. R. 265 (1865) ; Crepeau v. Moore, 8 Q. L. R. 197 (1882) , Chandler v. Beckwith, 2 N. B. (Berton) 428 (1888) ; R&tchford v. 808 BILLS OF KXCHANOK "% '• KxprcnH Hti|llllH- tloii." § 52. Griffith, 4 N. B. (2 Kerr) 112 (1843) ; Bigs^s v. Wood, 2 Man. L. R. 272 (1884). It ^vould seem as if the words " express stipulation " in the clauHe as it now stands, would mean an express stipula- tion that the acceptor should he discharged if the bill were not presented on the day of maturity. Chalmers (p. 171) applies these words in the Imperial Act, to the case where a bill by the acceptance is made ])ayable at a particular place only, and suggests that when a i)ill is made payable at a particular place and there only, the position of the acceptor is for many purposes analogous to that of the drawer of a cheque, and that if he could show that he was damnified by the holder's omission to present it on the proper day, ho would probably be discharged. He refers to IJislu-p v. Chitty, 2 8tra. 11U5 (1742); Alexander V. Burchfield,7 M. A Gr. 1061 (1842); Halstead v. Skelton, 6 g. h. at pp. im. 94 (1843); Mullick v. Hadakisscn, 9 Moore P. C. at p. 70 (1854); and Smith v. Vertuc, 80 L. J. C. V. at pp. 5}), 60 (1860). It will be observed that this -lause in the Canadian Act is wider in its scope than the correHponding one in the Im- pel ial Act. The latter api)lie8 only to . qualified acceptance making a bii payable at a particular i)lat.-u and there only; till- former lu all cases where fither the bill itself or the acceptance names a place of payment. No proteat or iiotico iiw'fiiKMrv. l\. Tn order to n'luler tlie Hf'f-<»ptor oi a bill liable, it is not iieceHHary to protest it, or that notice of dishonor should be ^nven liiiu : Imp. Act. s. 52 (3). Protest or notice to the acceptor of a bill is unnecessary even if it be a fonngn bill. The maker of a note is in the same position : section 8H. 8-8. 4. The reason is that they are th« (>erpons primarily liable : Treacher v. Hinton, 4 PUKHENTMBNT FOB PAYMENT. 809 l)ill that Act. c€88ary in the at they iton, i B. A: A. 413 (1821 1; Smith v. Thatcher, ihU, 200 (1821). § 52. See also cases under sub-fiection 1, (tnte p. 306. 4. Whore the hohlcr of tlu» l)ill prosonts it for iiuMit''fo'i- pHyiiitint. puyniciit, he sliall exliibit tlie hill to the person from whom he demands payment, and when a bill is paid the holder shall forthwith deliver it up to tile party payin*,' it. Imp. Act, a. ry2 (4). Presentment for payment is made by the holder or by h person authorized to receive payment on his behalf: section 45, s-s. 3. For a definition of holder see avtc, p. 27 : and as to payment, Hection 5\). See section G!) as to a lost bill. The bill should be produced and exhibited, as the person }',''|„'*.'""'''' paying has a right to it as a voucher in his account with''"'"*'' other parties : De la Chevrotiero v. Guilmet, 1) L. N. 412 (1886); Jordan v. Coates, 7 N. 13. (2 Allen) 107 (1850); Hansard v. llobinson, 7 B. it C. at p. U4, (1827); Itamuz v. Crowe, 1 Ex. at p. 174 (1847) ; Crowe v. Clay, 9 Ex. 604 (1854); Musson v. Lake, 4 How. (T. S.) 262 (1846). If a bill is payable at a bank or other particular place, and is lying there on the day of maturity, no special form of presentujent m necessary : Harris v. Perry, 8 V. C. C. P. at p. 409 (18581: Pullen v. Sanford, 16 N. S. (4 R. .t G.) 212 (1883); Souther v. Wallace, 20 N. S. (K H. .V: G.) 509 a8S8); Biggs V. Wood, 2 Man. L. H. 272 (1885). If on demand of payment the bill is not asked for and payment is refused on some other ground, or inability to pay is acknowledged, exhibition of the bill is waived : (handler v. Beckwith, 2 N. B. (Berton) 423 ( 1838); Gilbert V. Dennis, 3 Mete. 495 (1842); Lockwood v. Crawford, 18 Conn. 361 (1847). I N 810 §53. Fund* in hand* of drawee. •'^ Cheque and equi- Uble aaaignment BILLS OF BXOHANOB Liabilities of Parties. Sections 58 to 58, inclusive, treat of the liability of the several parties to a bill — the drawee, the acceptor, the drawer, the indorser — also of a stranger who puts his name upon it, and of a transferrer by delivery. The measure of damages against those who are parties to a dis- honored bill is also declared in section 57. 53. A bill, of itself, does not operate as an assignment of funds in the hands of the drawee / available for the payment thereof, and the drawee of a bill who does not accept as required by this Act is not liable on the instrument. Imp. Act, Is. 58 (1). Section 58 of the Imperial Act from which the foregoing is taken, provides that it shall not apply to Scotland, and the following sub-section is added: — "(2) In Scotland where the drawee of a bill has in his hands funds available for the payment thereof, the bill operates as an assignment of the sum for which it is drawn in favor of the holder, from the time when the bill is presented to the drawee." The law of France is sinuiiar to that of Scotland : Nouguier, §§ 892. 431. An order to pay oat of a particular fund is not a bill of exchange : section 3, s-s. 3. It was formerly considered iu England that a cheque was in the nature of an equitable assignment of funds in the hands of the banker : Keene v. Beard, 8 C. B. N. S. at p. 381 (18G0). But it was well settled before the Act of 1882, that a cheijue was not an equitable assignment, but a bill of exchange drawn upon a banker, that there was no privity between the banker and the holder of the che^|Ue, and the latter had no action even LIAUILITY OF DIUWKE. 811 if there were funds : Hopkinson v. Foster, L. R. 19 Eq. 74 § 53, (1874); Schroeder v. Central Bank, 34 L. T. N. 8.786 ^ il87H). It was alBo held in Ontario that an unaccepted cheque was not an equitahle assignment, and the holder had no action against the bank : Caldwell v. Merchants' Bank, 2() U. C. C. P. 294 (1876). In Quebec, however, it was held that a cheque was a transfer of so much of the funds of the drawer in the bank and gave the holder a right of action : Marler v. MolRcns Bank, 28 L. C. J. 293 (1879). In several of the I'nited States th« holder is allowed to sue on an unaccepted cheque ;--iii Louisiana: Gordon v. Mulcher, 34 La. Ann. 608 (1882) ;— in Illinois: Union Nat. Bank t. Oceana Co. Bank, 80 111. 212 (1876); Springfield Ins. Co. V. Peck. 102 111. 266 (1882);— in Iowa: Roberts v. Austin, 26Iowa, 316 (1868) ; — in Missouri : Senter v. Contin- ental Bank, 7 Mo. App. 632(1879); — and in Kentucky: Lester v. Given, 8 Bush (Ky). 368(1871). The English and (Ontario rule will now prevail throughout Canada, as section 72 of the Act provides that "a cheque is a bill of exchange drawn on a bank, " and the present section applies tu cheques as well as to other bills. The rule laid down in the section has long been recog- iini not &u asHit{iiiiieut nized in England as to ordinary bills : Griffin v. Weatherby, L. R. 3 Q. B. 7:>3 (1868); Shand v. Du Buisson, L. U. 18 Kq. 283 (1874); even in case of a bill accepted pQ^able at a banker's : Yates v. Bell, 3 B. \' A. 643 (1820); Moore v. Bushell, 27 L. J. Ex. 3 (1857); Hill v. Royds, L. R. 8 Eq. 290 (1869). Also in Ontario: Luuib v. Sutherland, 87 U. C. t^. B. 143 (1875); and in the I'nited States: Carr v. Nat. Bank, 107 Mass. 45 (1871); Bank of Commerce v. Bogy, 44 Mo. 15 (1869); First Nat. Bank v. Dubuque, 52 Iowa, 878 (1879). A letter of credit is similar in this respect to a bill of i.ittm .•( exchange: Morgan v. Lanviere, L. R. 7 H. L. 432 (1876);*'"' 812 BILLS OP BXCHANOE §53. ?l LlftbtUty of acceptor. id British Linen Co. v. Caledonia Ins. Co., 4 Macq. H. L. 109 n. (1801) ; Union Bank v. Cole, 47 L. J. C. P. 109 (1878). Where, however, an open letter of credit contained a pro- yision that parties negotiating bills under it were requested to indorse particulars on the back of it, and the payee of a bill drawn under it had the particulars duly indorsed, he was allowed to rank on the insolvent estate of the bank issuing the letter: re Agra Bank, L. B. 2 Ch. 301 (1867). See a,\ao ex parte Stephens, L. B. Ch. 756 (1868); Citizens' Bank v. New Orleans Bank, L. B.6 H. L. 862 (1878). It will be observec^ that the section says that a bill does not "of itself" operate as an assignment of funds in the hands of the drawee. This, however, may be effected by an agreement outside of the bill : Robey v. Oilier, L. B. 7 Ch. 696 (1872): Ranken v. Alfaro, L. R. 6 Ch. D. 780 (1877). 54. The acceptor of a bill, by accepting it — (rt.) Engages that he will pay it according to the tenor of his acceptance; Imp. Act, s. 54 (1). See section 17 as to the form of a valid acceptance. An acceptance may be either general or qualified : sec- tion 19. In the former case the undertaking of the accep- tor is that he will pay the bill according to its terms; in the Iatte» that he will pay it as modified by the terms of his qualified acceptance. By his acceptance he becomes the primary debtor, the drawer and indorsers being only secondarily or conditionally liable: Rowe v. Young, 2 Bligh H. L. 467 (1820); Philpot v. Briant, 4 Bing. 720 (1828); Jones V. Broadhurst, 9 C.B. 181 (1850); Smith v. Vertue, 80 L. J. C. P. 60 (1860); Cox v. National Bank, 100 U. S. (10 Otto) 712 (1879); C. C. Art. 2294. The position of the drawer and indorsers after dis- honor of a bill is analogous in several respects to that of LIABILITY OF ACCEPTOR. 318 (!)■ of dis- hat of a surety: Cook v. Lister, 32 L. J. C. P. 127 (1868) ; Rou- § 54. quette V. Overmann, L. R. 10 t^. B. 536 (1875); Duncan V. North & S. W. Bank, L. R. 6 App. Cas. 19 (1880). See Hariner v. Steele, 4 Exch. IS (1849), on the relation of several joint acceptorB who are not partners. Drawees who have promised to accept or who have knowingly accepted the heneiit of funds obtained on a repre- sentation that they would accept, have been held liable: Torrance v. Bank of British North America, 12 L. C. J. 325 ; 15 L. C. J. 169 ; 17 L. C. J. 185 ; L. R. 5 P. C. 246 (1873) ; Molsons Bank v. Seymour, 21 L. C. J. 82; 23 L. C. J. 57 (1878); Bank of Montreal v. Thomas, 16 Ont. R. 603 (1888). See section 26 as to an acceptor 8if:;ning as an agent, or in a representative character. (b.) Is precluded from denying to a holder inKKtopimi due course — (1.) TheexisteuceofthedrjiNver.theKf'iHiiuenessAnto of his sif(uature, and his cjipucity and authority to *'«""'"'■" draw the bill ; luip. Act, s. 54 (2) ((/). Section 24 provides that subiect to the proi'iaionH of the Act, a forged or unauthorized signature is wholly inopera. tive. The present is one of the provisions which modify that section. This has long been recognized as law: Jones v.Goudie, 3 Rev.de Leg. 28 (1813) ; McKenzie v. Fra8er,/7>j(/. no (1826); Ryan v. Bank of Montreal, 12 0. R. 39 (1886); 14 Ont. A. R. 533 (1887) ; Jenys v. Fowler, 2 Str. 946 (1732) ; Cooper V. Meyer, 10 B. & C. 468 (1830); Sanderson v. Coil- man, 4 M. & (ir. 209 (1842); Vagliano v. Bank of England, [1891] A. C. 107; Hoffman v. Bank of Milwaukee, 12 Wall. (U.S.) 193 (1870); Bank of U. S. v. Bank of Georgia, 10 Wheat. (U.S.) 333 (1825). If the bill be materially altered the acceptor is not pre- a>. to aiter- duded from setting this up : Burchfield v. Moore, 23 L. j/' ' IMAGE EVALUATION TEST TARGET (MT-3) i // {./ x •ip Ms> •v ^^ ."^P %^ A /a 1.0 I.I "- IIIIIM |50 »i MAC 1.25 m 1 2.0 1.8 1-4 IIIIII.6 Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, NY. 14580 (716) 872-4503 V V ). This has long been the law ; Collis v. Emett, 1 H. Bl. 313 (1790), "Precluded" was inserted in the Imperial Act when it was decided to extend it to Scotland, as " estop- pel" is not a term of Scotch law. "Holder in due course" is defined in section 29. The drawer is not precluded from denying the genuine- ness or validity of the indorsement by the payee. 3tt, 1 H. [mperial "estop- xenuine- LIABILITY OF IND0R8ER. 817 2. The indorser of a bill, by indorsin^^ it — § 55. (a.) Engages that oil due presentment it shall ,Vn„ai. be accepted and paid according to its tenor, and if : J is dishonored he will compensate the holder or a subsequent indorser who is compelled to pay it, provided that the requisite proceedings on dis- honor are duly taken: Imp. Act, s. 55 (;2) (a). As regards the holder of a bill an indorser has been compared to a new drawer : Penny v. Innes, 1 C. M. & R. at p. 441 (1834); Steele v. McKinlay, 5 App. Cas. at p. 769 (1880). This sub-section sets out the ordinary contract of the indorser. It may, like that of the drawer, be varied in different ways. Ilis habiliiy may be limited or even nega- tived; or he may waive, as regards himself, some or all of the duties imposed on the holder as to presentment, protest and notice : section IG. See also sections 31 and 32, and the preceding sub-section. As to the nature of the contract of indorsement, see the the remarks of Maule, J., in Castrique v. Buttigieg, 10 Moore P. C. at p. 108 (1855). The indorsers may have an agreement varying as between themselves the undertaking in this section, and even reversing the order in which they are to be liable to each other. If two or more persons indorse a bill or note to accommodate the acceptor or maker, their relation to each other is that of co-sureties, irrespective of the order in which they have indorsed : Macdonald v. Whitfield, 8 App. Cas. 738 (1883). See Small v. Riddell, 31 U. C. C. P. 373 (1880). (b.) Is precluded from denying to a holder iiiiJ,^;;,'^*"^ due course the genuineness and regularity in all I -I !■ '■:''il ! ■SI ■: !i vi •111'! 1 'II 4r ; il'l 818 BILLS OF EXCHANOB § 55. respects of the drawer's signature and all previous EBtoppei of indorsements ; indorser. (c.) Is precluded from denying to his immediate or a subsequent indorsee that the hiU was, at the time of his indorsement, a valid and subsisting bill, and that he had then a good title thereto. Imp. Act, s. 55 (2) (h) (c). An iudorser by putting his name on the back of the bill has in effect made these representations, and he is estopped from denying them to one who has in good faith given value for it while current, without notice of any defect. ILLUSTRATIONS. 1. In an action against the last indorser, it is no defence that the names of the maker and prior indorsers are forged : East- wood V. Westley, 6 U. C. 0. S. 55 (1839) ; McLeod v. Carman, 12 N. B. (1 Han.) 592 (1869). 2. The indorser of an imaccepted bill is estopped from denying the signature or the competence of the drawer, a married woman : Ross V. Dixie, 7 U. C. Q. B. 414 (1850). See also Griffin v. Latimer, 13 U. C. Q. B. 187 (1856); Hanscome v. Cotton, 16 r. C. Q. B. 98 (1857). 8. The indorser of a note made by a corporation is estopped from alleging that it yf&a ultra vires: Merchants' Bank v. United p:mpire Club Co., 44 U. C. Q. B. 468 (1879). 4. An indorser sued on a note by the indorsee cannot plead that the note is null, because made by a married woman without the authorization of her husband : Leblanc v. RoUin, Mont. Cond. Rep. 68 (1854); Norris v. Condon, 14 Q. L. R. 184 (1888). 6. A note in favor of two payees jointly was indorsed by one of them to a person who in turn indorsed it to another. The latter sued the payee who had indorsed. Held, that defendant was estopped from setting up the want of indorsement by the other payee: Thurgar v. Clarke, 4 N. B. (2 Kerr) 870 (1844). 1 ' is iVlOUS Bcliate \t the ig bill, Imp. the bill istopped en value fence that ed: East- . Carman, m denying d woman ; Griffin v. Cotton, 16 Is estopped V. United nnot plead an without :ont. Cond. |l888). •sed by one Ither. Tbe defendant [ent by tbe (1844). LIABILITY OF INDORSER. 319 i 6. Where a partner having authority to draw and indorse, & gg^ raised money for firm use by drawing bills in fictitious names and ■ indorsing them in the firm name, tbe other partner was liable to an indorsee : Thicknesse v. Bromilow, 2 Cr. &, J. 425 (1832). 7. A plea denying the indorsement to defendant who indorsed it to plaintiff is bad: MacGregor v. Rhodes, E. & B.2G6 (1856). See Lambert v. Pack, 1 Salk. 127 (1099); Bomley v. Frazier, 1 Stra. 441 (1721). 56. Where a person signs a bill otherwise than 8*j"*P«f^i„ as a drawer or acceptor, he thereby incurs the liabili- [{fdower. ties of an indorser to a holder in due course, and is subject to all the provisions of this Act respecting indorsers : Imp. Act, s. 5G. This section in the Imperial Act ends with the word, "due course." The last clause was added in the Senates in order to make it clear, that a person who signs a bill aa warrantor is entitled to notice of dishonor. In Quebec, under Article 2311 of the Civil Code, a warrantor, or aval, as he is called in French law, was bound whenever the party for whom he became warrantor was bound, and he was not • entitled to any notice of dishonor or protest, apart from that given to his principal. The English decisions regarding such warrantors werewarran- not uniform or consistent ; but this section of the Imperial Act was framed in accordance with the doctrine laid down in Steele v. McKinlay, where it was held that a person who put his name on the back of a bill was not liable on the bill to the drawer. It had been long settled in England that he could not be held liable as an accepi'or, as he was not a drawee, or an acceptor supra protest. The aval was fully recognized in French law, both Aval, ancient and modern. Pothier speaks of it. Change, No. 122, as "the contract of warranty undertaken by a person. 320 BILLS OF EXCHANaB ■I; 'ii Liability § 56. either for the drawer, by putting his eignature at the foot of the bill ; or for the inilorser by signing below the indorse- ment ; or for the acceptor by signing below the acceptance. " Such person assumes towards the creditor all the obligations of the party whose warrantor he becomes. See Code de Com. Arts. 141, 142. It is also recognized in Louisiana: McGuire v. Bosworth, 1 La. Ann. 248 (1846). In Lower Canada before the Code, it was held, following the old French law prior to the Commercial Ordinance of 1673, that an indorser puur aval was not entitled to notice of dishonor or protest, and this rule was adopted by the Civil Code in Article 2311. It is only to a holder in due course that the person signing a bill otherwise than as a drawer or acceptor, is said to incur the liabilities of an indorser. Section 55, s-8. 2, defines what these liabilities are. They may be varied as provided in section 16. It is to be observed that the Imperial Act does not say that he is an indorser or even that he has the rights of an indorser. The latter are clearly given him here by the added words. As between the immediate parties, these rights and liabilities may be varied by agreement ; if the bill has not passed into the hands of a holder in due course it may be subject to these as defects of title, ILLUSTRATIONS. See section 23, and illustrations ante, p. 189. 1. A bill or note is payable to bearer, or is indorsed in blank. A person who puts his name on it to enable another to negotiate it, or who signs and negotiates it himself, is liable as an indorser to the holder : Scott v. Douglas, 5 U. C. 0. S. 207 (1886) ; Rauisdell v. Telfer, 5 U. C. Q. B. 508 (1848) ; Booth v. Barclay, 6 ibid. 215 (1849); Vanleuven v. Vandusen, 7 ibid. 170 (1849); Faircloughv. Pavia, 9 Ex. p. 696 (1854). t\ LIABILITY OF BTRANGEIl OR AVAL. 821 he foot idorae- lance." gations 3ode de lisiana : jUowing nance of 10 notice \ by the e person eeptor, is ction 55, may be rved that dorser or latter are between IB may be iuto the t to these Indorsed in another to I is Uable as 0. S. 207 ; Booth V. 7 ibid. 176 2. A. made a note payable to B. or order, and C. wrote his K ro name on the back, without B.'s first indorsement. Held, that C. could not be considered as a new maker, and that the note would not support a recovery against him by B. : Steer v. Adams, 6 U. C. 0. S. 60 (1889); Jones v. Ashcroft, ibid. 154 (1841); Wilcocks v. Tinning, 7 U. C. Q. B. 872 (1850); Skil- beck V. Porter, 14 ibid. 480 (1856); Moffatt v. Rees, 15 ibid. 622 (1867); Robertson v. Lonsdale, C. P. D. (Ont.) 1892, to appear in 22 0. R. ; Morton v. Campbell, 3 N. S. (Cochran) 5 (1859) ; Burns v. Snow, 8 N. S. D. 580 (1875) ; Smith v. Hill, 6 N. B. (1 Allen) 218 (1848) ; Gwinnell v. Herbert, 5 A. & E. 486 (1848). 8. A. made a note to the order of B. for value, and before delivery it was indorsed by C. as surety for the maker. B. in- dorses it "without recourse" above C.'s signature, and then sues C. He can recover : Peck v. Phippon, 9 U. C, Q. B. 78 (1841) ; Smith v. Richardson, 16 U. C. C. P. 210 (1866). See also, Wordsworth v. Macdougall, 8 U. C. C. P. 408 (1858) ; Wil- ders V. Stevens, 15 M. & W. 208 (1846) ; Smith v. Marsack, 6 C. B. 486 (1848); Morris v. Walker, 15 Q. B. 589 (1850); Wil- kinson V. Unwin, 7 Q. B. D. 686 (1881) ; Holmes v. Durkee, C. Sc E. 28 (1883) ; Seabury v. Hungerford, 2 Hill (N. Y.) 80 (1841) ; Hall v. Newcomb, 8 Hill (N. Y.) 238 (1842). 4. Defendant having indorsed, as security for the maker, a promissory note payable to plaintiff, but not negotiable, he was lield not hable as a maker : West v. Bown, 8 U. C. Q. B. 290 (1846) ; McMurray v. Talbot, 5 t. C. C. P. 157 (1855). Contra, Piers v. Hall, 18 N. B. (2 P. & B.) 84 (1878). 5. A guarantee indorsed on a note at the time of its execu- tion as follows : " We guarantee the payment of the within note," does not show a sufficient consideration for the promise, the case being within the Statute of Frauds : Lock v. Reid, 6 U. C. 0. S. 295 (1842). 6. Defendant owing plaintiff delivered him a note made by a tliird party payable to defendant or bearer, on the back of which defendant had written " In consideration of $100, I guarantee payment of the within note." Held, that defendant was liable m'c.b.e.a. — 21 832 BILLS OF EXCHANOK '4-1 § 56. without notice of dishonor : Pahner v. Baker, 28 U. C. V. P. 802 (1878). 7. Defendant indorsed on a note " I guarantee tlie payment of the within note to D. (the payee and plaintiff) on demand. " This was done to secure time which was given. Defendant was not Hable as an indorser, tlie note never having been negotiated, but he was held liable as a guarantor: Davies v. Funston, 45 U. C. Q. B. 869 (1880). 8. Plaintiff lent money to a firm. One partner made and the other indorsed a non-negotiable note in plaintitt"'s favor for the amount. The indorser was held hable as a guarantor : Mc- Phee V. McPhee, 19 0. R. 608 (1890); but see Robertson v. Lonsdale, No. 2 mpm. 9. In Quebec one who puts his name on the back of a note before its delivery or indorsement by the payee, is an indorser jumr aval and is liable without notice of protest or dishonor : Paterson v. Pain, 1 L. C. R. 219 (18r)l) ; Merritt v. Lynch, 8 L. C. J. 276 (1859) ; Pariseau v. Ouellet, :Mont. Cond. Rep. (59 (1850); Narbonne v. Tetreau, 9 L. C. J. 80 (1808); Latour v. Gauthier, 2 L. C. L. J. 149 (1866). Also one who puts his name on the back of a cheque payable to bearer : Pratt v. Mac- Dougall, 12 L. C. J. 248 (18()8). 10. An indorser j[>()? ^^'^ ^^^^ ^"^ °^ ^^^ ^^^ merchant, which did not allow the drawer to sue an indorser : Mander v. Evans, 5 T. L. R. 75 (1888). 18. A director of a company which was trying to get a bill discounted for the drawer, stamped the company's name on the back, and wrote his own name opposite the word " Director." It required two directors to sign for the company. Not succeeding he returned the bill to the drawer, leaving the incomplete in- dorsement inadvertently uncancelled. The drawer negotiated it. Held, that the director had not " signed " the bill, and was not liable as an indorser : London & Southern Cos. I. A. & D. Co. v. Clamp, 7 T. L. R. 181 (1890). 57. Where a bill is dishonored, the measure Jlrtfes to of damages which shall be deemed to be liquidated dlBhonored -• 1111 <• 11 damages, shall be as follows : Measure of dain&ges against bill (a.) The holder may recover from any party liable on the bill, the drawer who has been com- pelled to pay the bill may recover from the accep- tor, and an indorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior indorser — (1) The amount of the bill ; (2) Interest thereon from the time of present- ment for payment, if the bill is payable on demand, and from the maturity of the bill in any other case ; (3) The expenses of noting and protest : Imp. Act. s. 57 (1) {a) {b) (c). This section applies when a bill is dishoDored, either by non-accoptanee : section 43; or by non-payment: section 47. Becovery is had when the parties named have no valid defence. DAMAGES ON DISHONOR. 826 ient- nand, ;ase ; Imp. either section ave no (a.) This clause does not apply to bills dishonored § 57, abroad. These fall exclusively under the next clause (6.) : re Commercial Bank of South Australia, 86 Ch. D. 522 (1887). It has been held in England, under the similar clause of the Imperial Act, that where a foreign drawer has paid re-exchange, he may recover it from the English acceptor, in addition to the items (1), (2) and (3) named: ex parte Eobarts, re Gillespie, 18 Q. B. D. 286 (1886). See re General South America Co., 7 Ch. D. 637 (1877). (1) Amount of the bill.— If the bill bears interest from its date or issue this would be included: section 9; Crouse V. Park, 8 U. C. Q. B. 458 (1847) ; Hudson v. Fawcett, 7 M. & G. 348 (1844). So would exchange if indicated in the bill: section 9 (d), section 71, s-s. 2 {d). (2) Interest. — This clause applies only to interest allowed as damages for non-payment of the bill at maturity. As to interest provided for by the bill itself which forms part of the bill or debt, see section 9, pp. 75, 79 ante. The rule in this clause is in accordance with the general rule as to interest. See E. S. 0. c. 44, s. 86; C. C. Arts. 1067, 1069, 1070, 1077. The rate of interest allowed by the law of Canada is six per cent.: R. S. C. c. 127, s. 2; illustration No. 7 below. A third sub-section in the English Act giving the Courts or jury a discretion as to the rate of interest to be allowed as damages was not adopted for Canada. (8.) Expenses. — As to these see section 93, s-s. 2, 8. ILLUSTRATIONS. 1. Where a bill or note is payable with interest at a certain rate, this rate governs after maturity: Rowland v. Jennings, 11 *" U. C. C. P. 272 (1861); Montgomery v. Boucher, 14 U. C. C.P. 46 (1864); O'Connor v. Clarke, 18 Grant, 422 (1871); Keene v. Keene, 8 C. B. N. S. 144 (1857. Overruled by No. 7 below. rr^ 926 BILLS OF EXCHAMOB $57. |tiated 8uch a section Dll the tor of a IX parte •. New- 3 T. R. on the nt of its the bill [den, 19 as given C. Can. ) ; Cam- ,f Lich- delivery e of the B. &C. ^r liable, obtain idiating IC. C. P. Moule lliver, 10 cheque srer back I cheque is dishonored, provided he acts, with diligence: Conn v. § 5g, Merchants' Bank, siipra ; Turner v. Stones, 7 Jur. 745 (1843) ; Timmins v. Gibbins, 18 Q. B. 722 (1852) ; Wood- land V. Fear, 26 L. J. Q. B. 202 (1857). Where h^^\ brokers got bills discounted at their bankers for the drawer and acceptor, and made themselves liable to the banker by a separate document but did not indorse the bills, they were, on payment of the bills, held entitled to rank on the estate of the acceptor, as if they had actually indorsed the bills: ex parte Bishop, 15 Ch. D. 400 (1880). 3. A transferrer by delivery who negotiates aw»i"a»ty- bill thereby warrants to his immediate transferee, ^ being a holder for value, that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware/ of any fact which renders it valueless : Imp. Act,j s. 58 (3). Subject to the conditions mentioned under the preced- ing sub-section, these three warranties appear to comprise all that were recognized in England or Canada before the Act. In some of the United States such a transferrer is held also to warrant the solvency of the maker at the time of the transfer : Roberts v. Fisher 43 N. Y. 159 (1870) ; Wainwright v. Webster, 11 Vt. 576 (1839); Westfall v. Braley, 10 Ohio St. 188 (1859) ; while in others the Eng- lish rule is followed: Young v. Adams, 6 Mass. 182 (1810); Milliken v. Chapman, 75 Me. 306 (1883). As appears from some of the illustrations below, the word "valueless" need not be taken in a strictly literal sense. ILLUSTRATIONS. 1. A transferrer by delivery for value implies a warranty that the maker is not insolvent to his knowledge : Lewis v. Ilf^r-**' 830 BILLS OF EXCHANGE :•#! 58 JeflFery, M. L. R. 7 Q. B. 141 (1875). See Fenn v. Harrison, 3 — - T. R. 759 (1790) ; Delaware Bank v. Jarvis, 20 N. Y. 228 (1859) ; Bridge v. Batchelder, 9 Allen (Mass.) 394 (1864). 2. The transferrer of an unindorsed note represented it to be as good as gold when the parties were insolvent to his know- ledge. He was held liable for the amount : Miller v. Daudelin, 24 L. C. J. 208 (1879). 8. A vendor of a bill impliedly warrants that it is of the kind and description that it purports on its face to be : Gompertz v. Bartlett, 2 E. & B. 849 (1853).' 4. C. discounts with D. a bill payable to bearer without in- dorsing it, which, unknown to C, had been fraudulently altered in amount by a previous holder. D. can recover from C. the money he paid : Jones v. Ryde, 5 Taunt. 488 (1814) ; Burchfield v. Moore, 23 L.J. Q.B. 261 (1854); Bell v. Dagg, 60 N.Y. 580(1875). 5. A bill broker discounts with a bank a bill indorsed in blank by the payee. The indorser absconds and the signatures of the drawer and acceptor turn out to be forgeries. The bank can recover from the broker the money they paid : Fuller v. Smith, R. & M. 49 (1824). 6. An agent gets a bank to discount a bill drawn and indorsed in blank by his principal, and then pays over the money to his principal. The signature of the acceptor was a forgery but the agent did not know it. The drawer fails. The bank cannot recover from the agent : ex parte Bird, 4 De G. & Sm. 273 (1851). 7. The bona tide holder of a bill purporting to be drawn by A., accepted by B., and indorsed in blank by C, discounts it with a banker. It turns out that the signatures of A. and B. were forgeries, and that C, whose indorsement was genuine, is insolvent. The banker can recover from the holder the money he paid : Gurney v. Womersley, 4 E. & B. 139 (1854) ; Allen v. Clark, 49 Vt. 390 (1877). 8. When the transferee discovers the defect in the bill, he must repudiate the transaction with reasonable diligence : Pooley V. Brown, 81 L. J. C. P. 134 (1862). DISCHABOB BT PAYMENT. ■rison, 3 (1869); I it to be is know- )audelin, [ the kind tnpertz v. itliout in- tly altered om C. the irchfieldv. 530(1875). ndorsed in I signatures The bank Fuller V. Dd indorsed joney to his rery but the [ank cannot & Sm. 273 he drawn by Idiscounts it A. and B. genuine, is |r the money 1854); Allen the bill, he tnce; Pooley 381 § 59. Discharge of Bill. Sections 59 to 63, inclusive, treat of the circumstances under which a bill is discharged. These are, payment by the acceptor, his becoming the holder, his being released, or the bill being cancelled or materially altered. Section 61, s-s. 2, treats of the release of a party to a bill from his liability thereon, without the bill iCself being discharged. Section 48 had provided for the discharge of a drawer or indorser to whom notice of dishonor was not given. Besides the foregoing, the liability of a party to a bill may be terminated by the other means by which a debt may be extinguished. In the province of Quebec an obli- gation to pay a sum of money may become extinct by pay- ment, by novation, by release, by compensiation, by con- fusion, by prescription, and by some other special causes : C. C. 1138. In the other provinces a< bill may be satisfied in several ways and may be discharged in whole or in part by set-oflf. In connection with the five following sections, these various subjects will be briefly noticed, as will also the release of a surety by the holder's dealings with the principal. It is possible that the last section (8) of the amending Act of 1891, may have an important bearing upon these and other matters not specifically mentioned or provided for in the Act. The reader is referred to the notes upon that section for a discussion of the question. Thus far the numbering of the sections has followed that in the Imperial Act. Section 60 of the latter provides, that where a cheque or bill payable to order on demand is drawn on a banker, and he pays it in good faith, he is not responsible, although the indorsements are unauthorized or even forged. Our Parliament struck this section out of the 8B2 BILLS OF EXOHANOE 'i I 1 r § 59. bill, so that section 60 of our Act is section 61 of the Im- perial Act, and this difference is continued in the numbering of the succeeding sections. '*-^ Discharge by pay- ment. Payment in due course. 59. A bill is discharged by payment in due course by or on behalf of the drawee or acceptor : "Payment in due course" means payment made at or after the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective ; Imp. Act. s. 59 (1). Payment. — Payment is not defined in the Act. A bill is for a sum certain in money, but it may be satisfied at or after maturity, in any way in which any other contract to pay money may be satisfied, and, as provided by section 61, in a manner which would not be sufficient in the case of ordi- nary contracts. " By payment is meant the discharge of a | contract to pay money, by giving to the party entitled to | receive it, the amount agreed to be paid by one of the par- ties who entered into the agreement. Whether the tran- saction is a purchase or a payment, is a question to be | resolved according to the intention of the parties, and I looking to the substance of the matter rather than its form. Credit given by the drawee of a bill or by a party to a bill or note, who is liable for its payment to the holder at his request, is equivalent to payment. Payment of a debt is not necessarily a payment of money ; but that is | payment which the parties contract shall be accepted as payment, or which the law recognizes as such " : 2 Daniel, § 1221. Payment in due course. — If the drawee or acceptor! pays a bill before maturity, it is not thereby discharged;! he may negotiate it. If the bill is payable to bearer or in- DISCHARGE RY PAYMENT. 333 >f the Im- numbering it in due cceptor : payment (ill to the Dut notice Imp. Act. Act. A bill atisfied at or r contract to )y section 61, p case of ordi- lischarge of a ty entitled to le of the par- 1 her the tran- ' lestion to be parties, and her than its ,r by a party to the holder I ayment of a but that is accepted as ' : 2 Daniel. 5 or acceptor I discharged;] bearer or in- dorsed in blank, he may pay to the bearer ; if indorsed in § 59, full he may pay to the indorsee or to his order. Payment is in good faith if made honestly ; mere negligence is not enough to vitiate it : section 89. As to what may render the title of the holder of a bill defective, see section 29. Payment by bill or note.— When a renewal bill is taken the original one is not discharged, unless there is a special agreement to that effect. It is a mere conditional payment. So where the bill of a third party is taken. The remedy on the original bill is suspended until the maturity of the new one; if that is paid or discharged, so is the original. If the new one is dishonored, the original liability revives, except as to parties, who are merely sureties, and who may have been discharged by the delay granted to the principal debtor. In either of the foregoing cases the renewal or new bill will operate as a discharge, if the parties have so agreed. If the holder has retained the old bill, the presumption will be, that such was not the intention of the parties. Merger. — A bill may also be discharged by being merged in a security of a higher nature, such as a bond, mortgage, or the like. So a judgment recovered on a bill, operates as an extinguishment of the original debt, the bill being merged in the judgment. Novation.— Article 1169 of th( Civil Code provides that "Novation is effected (1) when the debtor contracts towards his creditor a new debt, which is substituted for the ancient one, and the latter is extinguished ; (2) when a new debtor '8 substituted for a former one who is discharged by the creditor; (3) when by the effect of a new contract, a new creditor is substituted for a former one, towards whom the debtor is discharged.'* Such a discharge has been con- sidered in part under payment by bill and merger. For discharge by "compensation " or " set-off," see post p. 338. r fih da4 §59. BILLS OF EXCHANOK The provisions of this section regarding a drawee or acceptor, apply to the maker of a promissory note : section 88. K < \ '■ ILLUSTRATIONS. 1. Notes were given for the purchase money of personal property, and were not to be paid if the property was given up. The property was returned and sold for less than the first sale. Held, that the notes were satisfied by the return of the property as agreed : Smith v. Judson, 4 U. C. 0. S. 184 (1885). 2. The following are examples of the discharge of the bill or note by merger in the mortgage or other security taken, al- though the holders may not have so intended ; Matthewson v. Brouse, 1 U. C. Q. B. 272 (1848) ; Bank of B. N. A. v. Jones, H U. C. Q. B. 86 (1850) ; Parker v. McCrea, 7 U. C. C. P. 124 (1857); Fairman v. Maybee, ibid. 467 (1858); Fraser v. Arm- strong, 10 ibid. 506 (1860) ; McLeod v. McKay, 20 U. C. Q. B. 258 (1860) ; Adams v. Nelson, 22 ibid. 199 (1862). 8. Where a mortgage or other security is taken as collateral to a bill or note, there is no merger, and the bill or note is not discharged, but may be sued if not paid, although the morigage is not due; Murray v. Miller, 1 U. C. Q. B. 358 (1844); B>ink of U. C. v. Sherwood, 8 ibid. 116 (1850); Koss v. Winans, r, []. C. C. P. 185 (1855) ; Shaw v, Crawford, 16 U. C. Q. B. 101 (1857); Commercial Bank v. Cuvillier, 18 ihid.SlH (1859); Bank of U. C. V. Bartlett, 12 U. C. C. P. 288 (1862) ; Gore Bank v. McWhirter, 18 ibid. 298 (1868) ; Gore Bank v. Eaton, 27 U. C. Q. B. 882 (1868) ; Molsons Bank v. McDonald, 2 Ont. A. R. 102 (1877). 4. Where a note overdue has been retired and settled by a renewal note, it is cancelled and cannot be put in circulation again even by the payee, who has taken up the renewal note out of his own funds : Cuvillier v. Fraser, 5 U. C. Q. B. 152 (1848). 6. In an action by the indorsee against the acceptor of a bill, a plea of payment by the drawer is no defence, unless made i fi 1 ' fi i , DI8CHAR0B BY PAYMENT. 386 rawee or : section if personal 3 given up. e first sale, le property )• of the bill y taken, al- tthewson v. V. Jones, H . C. P. VIA ser V. Arm- U.C. Q. B. as collateral Isettled by a llation again le out of lii^ 1848). Lceptor of a linless made on the acceptor'8 account and adopted by him ; Bank of Montreal § 59^ V. Armour, 9 U. C. C. P. 401 (1859). . '- 6. Payment by the maker to the original holder after trans- fer would be at his own risk, and be no discharge though the note was overdue at the time of the transfer ; Ferguson v. Stewart, 2 U. C. L. J. 116 (1860) ; Banque du Peuple v. Viau, 4 L. N. 188 (1H80) ; Hawley v. Beverley, 6 M. & Gr. 221 (1848). 7. Taking the note of a new firm for goods sold to the old firm may operate as a release to the latter : Watts v. Robinson, 82 U. C. Q. B. 862 (1872). 8. A creditor took the note of a partner for a partnership debt, sued on it and took judgment. Failing to recover, he is not precluded from claiming against the partnership : Carruthers v. Ardagh, 20 Grant, 579 (1873). 9. Where a bank held for collection a note made by one customer in favor of the other, and on the day it matured, charged it to the maker and credited it to the payee in their books, and in his pass-book, it was held to be a payment, and irrevocable : Nightingale v. City Bank, 26 U. C. C. P. 74 (1876) ; Cleveland v. Exchange Bank, 81 L. C. J. 126 (1887). 10. The firm of H. & M. were in the habit of buying goods from D. & C. and giving them notes for the price. They dis- solved in 1876, M. carrying on the business and dealing with B. i<; Co., who took his notes for the runnuig account. He tailed in 1880. His payments to B. & Co. were sufficient to pay off the notes of H. & M. if so applied. Held, reversing 7 Ont. A. R. 88, that from the blending of the accounts and the course of dealing, the paper of H. & M. was fully paid : Birkett v. McGuire, Cassels' S. C. Digest, 882 (1888). 11. A note was given for goods. Before maturity the vendor who held the note agreed, on account of partial failure of con- sideration, to reduce it by $500. After maturity he indorsed it to M. " without recourse." Held, that M. must credit this ^r>00 on the note : McGregor v. Bishop, 14 0. R. 7 (1887). m!i ;'• ■ w !| 886 BILLS OF EXCHANOB § 59, 1^' ^^ order to vitiate the payment by the maker of a note ' indorsed in blank, bad faith must be shewn : Ferrie v. Wardens of the House of Industry, 1 Rev. de Leg. 27 (1846). 18. The acceptance of a promissory note is not payment or novation unless there be an evident intention that it shall have that effect : Beaudoin v. Dalmasse, 7 L. C. R. 47 (1857) ; Brown v. Mailloux, 9 ibid. 262 (1869) ; Noad v. Bouchard, 10 ibid. 476 (I860): Noad v. Lampson, 11 ibid. 29 (1860); Rogers v. Morris, 18 L. C. J. 20 (1869) ; Richard v. Boisvert, 8 R. L 7 (1871); Mercier v. Bousquet, 6 R. L. 862 (1874); — even when there is an indorser: Landry v. Beauchamp, 18 L. N. 169 (1890). 14. Proof of the payment of a promissory note in Lower Canada is governed by the law of England, and may be made by parol : harden v. Finlay, 8 L. C. J. 189 (1860). 15. Possession of a note by the maker after maturity, is a presumption of payment, but it may be rebutted by parol : Gre- nier v. Pothier, 8 Q. L. R. 877 (1877) ; Frizzell v. McKenzie, Ramsay A. C. 77 (1874). 16. Where an insolvent has secretly agreed to pay a creditor a sum in excess of the composition note, the indorser is not dis- charged, but the sum so paid must go in partial discharge of the note : Martin v. Poulin, 4 L. N. 20 (1880). 17. Charging a bill in the books of the bank to the account of the drawer who had got it discounted, is not payment, nor can the acceptor, when sued by the bank, set up in compensation claims he may have against the drawer : Goodall v. Exchange BanK, M. L. R. 8 Q. B. 430 (1887). 18. The receipt of a cheque which is subsequently dishon- ored, is not payment, and is not a novation of the original debt: Corporation of Kingsey Falls v. Quesnel, 18 R. L. 470 (1888). 19. The fact that plaintiffs did not return a note sent them by defendant, but handed it to their attorneys with the claim, is not conclusive that it was accepted even as conditional payment : \ i DISCHARGE BY PAYMENT. 887 f a note Vardena ment or lall have (1857) ; hard, 10 ; Rogers 8R. L7 en when , N. 169 in Lower be made irity, is a rol : Gre- ^cKenzie, a creditor ks not dis- Irge of the iccount of |or can the [on claims ige Bank, [y dishon- original . L. 470 3ent them claim [payment IS Brown v. Harris, 18 N. S. (1 R. & G.) 18 (1879); Lyman v. § 59, Chamard, 1 L. C. J. 285 (1857). - 20. The acceptance of a renewal note is a conditional pay- ment and while it is current, an action will not lie on the original note : Murray v. Gastonguay, 18 N. S. (1 R. & G.) 819 (1880). 21. One of a firm who were makers of a note died, and the business was carried by the surviving partner who was executor of the deceased. The survivor gave a renewal note and the old one was given up to him. Held, that no novation was created, "^ and the estate of the deceased partner remained liable : re estate Ives, 19 N. S. (7 R. & G.) 108 ; 7 C. L. T. 146 (1887). 22. Plaintiff agreed to advance a sum of money to defendant to tit out his vessel, the latter giving his notes for the sum, and plaintiff to take as collateral security a mortgage on the vessel and an insurance policy for the amount. Plaintiff subsequently proposed to be his own insurer, and defendant paid him the pre- mium. The vessel was lost. Held, that the notes were paid, and the subsequent agreement as to the insurance could be proved by parol : McKay v. O'Neill, 12 C. L. T. (N. S.) 22 (1891). 28. When the holder of a bill improperly sold property which lie held as collateral, without notice, the note was paid only to the extent of the amount received, although the debtor might have 11 further claim for damages ; Kiunear v. Ferguson, 9 N. B. (4 Allen) 891 (1859). 24. The fact that the holder of a note had possession of land belonging to the maker from which he might have received rent, does not operate as payment if he did not actually receive it : Bimonds v. Travis, 18 N. B. (2 Han.) 14 (1870). 25. Receipt of a bill or note is prima facie only conditional payment : Stephenson v. Miller, 27 N. B. 42 (1888) ; Owenson V. Morse, 7 T. R. 64 (1796) ; Dillon v. Rimmer, 1 Bing. 100 (1822) ; Simon v. Lloyd, 2 C. M. & R. 187 (1886) ; Maxwell v. Deare, 8 Moore, P. C. 864 (1868) ; Bottomley v. Nuttall, 5 C. B. N. S. 122 (1868) ; re London B. & S. S. Bank, 84 L. J. Ch. 418 (1865). m'o.b.e.a. — 22 iir . BHiLe OF EXOHANOE ■I § 69. ^' ^^^^ payment to the bolder at or after maturity operates "^ as a discharge i>ro tanto, and any subsequent holder takes it sub- ject to such partial payment : Graves v. Key, 8 B. & Ad. 818 (1882). 27. Credit given to the holder of a bill by the party ulti- mately liable is equivalent to payment : Atkins v. Owens, 4 N. & M. 128 (1884). 28. Payment by the acceptor before maturity is equivalent to a purchase of the bill, and he may negotiate it before it becomes due : Morley v. Culverwell, 7 M. & W., at p. 182 (1840) ; Atten- borough V. Mackenzie, 26 L. J. Ex. 244 (1856). 29. A bill is accepted by tllree joint acceptors, not partners. It is paid at maturity by one of them. It is discharged, and he cannot negotiate it, although he accepted it for the accommoda- tion of the other two : Harmer v. Steele, 4 Ex. at p. 13 (1849). See as to promissory notes : Bartrum v. Caddy, 9 A. & E. 276 (1888) ; Beaumont v. Greathead, 2 C. B. 494 (184C). 80. The indorsee of a bill obtained it by fraud. He presented it at maturity to the acceptor, who paid it in good faith. The bill is discharged : Robarts v. Tucker, 16 Q. B. at p. 676 (1851). 31. Payment by a banker is complete when the money is placed on the counter : Chambers v. Miller, 82 L. J. C. P. 80 (1862). 82. Bond or deed to operate as a merger must be co-extensive witl. the bill and between the same parties : Boaler v. Mayor, 19 C. B. N. S. 76 (1866). 88. The payee of a note payable on demand takes a mortgage as collateral security. He transfers the mortgage, getting the amount of the note. Afterwards he indorses the note to a holder in due course. The note is not paid : Glasscock v. Balls, 24 Q. B. D. 18 (1889). 84. Where a person of the same name as the payee or indor- see of a bill payable to order, presents it at maturity to the acceptor, who pays it, he remains liable to the real owner : Graves v. American Bank, 17 N. Y. 206 (1858). DISOHARaS BY COMPBNSiLTION. )eTate8 it 8ub- .d. 818 ty ulti- 18, 4 N. alent to aecomea ; Atten- lartners. , and he )minoda- 3 (1849). & E. 275 presented til. The 6 (1851). Iraoney is c. r. 30 [extensive '. Mayor, I mortgage jtting the a holder I Balls, 24 or indor- ^ty to the il owner : Compensation or Set-off.— Compensation in Quebec § 90. dififers from set-off in the other provinces in this, that when two persons are mutually debtor and creditor, com- pensation takes place by the sole operation of the law* The moment Iwo debts, equally liquidated and demandable, exist simultaneously, they are mutually extinguished in so far as they correspond : C. C. Arts. 1187, 1188. The result is that in Quebec, a bill transferred after maturity would be subject to any money claim which the acceptor might have against any prior holder at or after maturity. In the other provinces a claim arising out of some matter not connected with, the bill and which a party liable on it might set up against the holder, could not be set up against a person to whom such holder might transfer it bona fide, even after maturity. In the old phraseology it is not an equity attaching to the hill, or in the language of the Act, a defect of title. The repeal of Art. 2287 of the code, which went farther than the law of England in this respect and the enactment of section 8 of tUe amending Act of 1891, may tend to assimilate the law in Quebec to that of England in this matter. ILLUSTRATIONS. 1. An attorney holding for collection the note of a local judge arranged to apply on the note fees payable to the maker. Certain fees were indorsed on the note and enough more were earned to pay it, but the attorney refused to credit or apply them. He afterwards absconded. It was held that the note was only discharged in part : Ketchum v. Powell, 8 U. C. 0. S. 167 (1838). 2. Set-oflf by indorsees against the holder is no defence on a note given for the accommodation of the indorser. The indorsee of an overdue bill or note is liable to such equities only as attach to the bill or note itself, and to nothing collateral due from the indorser to the maker, or indorsee to payee : ^'i ■:^l 840 BILLS OF EXCHANGE § 69. Wood V. Ross, 8 U. C. C. P. 299 (1858) ; Smith v. Nicholson, '— 19 U. C. Q. B. 27 (1869). 8. A note transferred after maturity is subject in Quebec to a money claim against any holder at or after maturity : Gibsone v. Lee, 1 Rev. de Leg. 347 (1814) ; Hayes v. David, 8 L. C. R. 112 (1862) ; Duguay v. Senecal, 1 L. C. L. J. 26 (1865); Amazon Ins. Co. v. Quebec & G. P. S. S. Co., 2 Q. L. R. 810 (1876). 4. The maorser may set up in compensation any money due or paid to the maker by the holder since its maturity : Quebec Bank v. Molson, 1 L. C. R. 116 (1851). 6. An account for goods sold and delivered may be set up in compensation of a promissory note : Angers v. Ermatinger, 2 L. C. L. J. 158 (1866) ; Quintal v. Aubin, M. L. R. 1 S. C. 897 (1888). 6. Compensation not allowed against a bill or note because claim not equally claire et U(fui(le : Ryan v. Hunt, 10 L. C. R. 474 (1860) ; Parsons v. Graham, 15 L. C. J. 41 (1870) ; Perrault v. Herdman, 8 R. L. 440 (1871). 7. Claims arising after the insolvency of a company, or a judicial abandonment, cannot be set up in compensation against the liquidator or curator : Exchange Bank v. City & District Savings Bank, 14 R. L. 8 (1885) ; Exchange Bank v. Canadian Bank of Commerce, M. L. R. 2 Q. B. 476 (1886) ; Riddell v. Gould, ibicL 5 S. C. 170 (1889). 8. The maker of a note may set up in compensation against the holder the amount of a note of a third party which he gave him as collateral, and which the latter has disposed of: Lepage v. Hamel, 19 R. L. 489 (1889). 9. The indorsee of an overdue promissory note is liable, in an action against the maker, to all equities arising out of the note transaction itself, but not to a set-oflf in respect of a debt due from the indorser to the maker, arising out of collateral matters: Burrough v. Moss, 10 B. & C. 558 (1880). DISCHARGE BY COMPENSATION. 341 olson^ Quebec lurity : David, .J. 26 Co., 2 aey due Quebec set up 2 397 inger, C because LR.474 rrault v. or a against District banadian Iddell V. against Ihich he )8ed of: lable, in it oi' the [{ a debt jUateral 10. As to exchange of bills under a settlement at the clearing § gg^ house, see Warwick v. Rogers, 5 M. & G. 840 (1848) ; Banque ■ Nationale v. Merchants' Bank, M. L. R. 7 S. C. 836 (1891). Prescription or the Statute of Limitations. — This is another subject as to which the law of Quebec differs from that of the other provinces, not only as to the length of time necessary to acquire the right, but also as to its nature, as to whether it merely bars the remedy on a bill or extin- guishes the right of action. In Quebec the time required is 5 years, reckoning from J/V^^"**^"' maturity : C. C. Art. 2260 (4). The debt is then absolutely extinguished, and no action car be maintained after the delay for prescription has expired ; C. C. Art. 2267. This was also the law before the Code : Cot^ v. Morrison, 2 L. C. J. 206 (1858) ; Lavoie v. Crevier, 9 L. C. R. 418 (1859) ; Bardy V. Huot, 11 L. C. R. 200 (1861): Giard v. Giard, 15 L. C. R. 494 (1865); Bowker v. Fenn, 10 L. C. J. 120 (1865); Giard v. Lamoureux, 16 L. C. R. 201 (1865). The Code also contains the following provisions regard- Jjj,*^''^^,"^'; iug the interruption of prescription : — No indorsement on scription. a note or bill made by a person receiving payment will take it out of the operation of the law : Art. 1229. Where the amount exceeds $50, no promise or acknowledgment is sufficient, unless in writing and signed by the party making the promise : Art. 1285. Prescription cannot be renounced by anticipation, but time acquired may be re- nounced : Art. 2184. Renunciation by any person does not prejudice his co-debtors, his sureties, or third parties : Art. 2229. Prescription runs against absentees : Art. 2232— also when it against married women, minors, idiots, madmen and insane persons, saving their recourse against those who legally re- present them : Arts. 2234, 2269. It does not run with respect to debts depending on a condition until the condition hap- I li III im BILLS OF EXCHANGE iir In other provinces. 1 iN l\ § 59. pens: or debts with a term until the term has expired: Art. 2236. Any one or more of the following prescriptions may be invoked in Qaebec : — (1) Any prescription entirely acquired under a foreign law, on a bill payable outside of Quebec, in favor of a person living abroad. (2) Any prescription entirely acquired in Quebec, reckoning from maturity, on a bill payable there, when the party was domiciled there at maturity, in other cases from the time he became domiciled there. (3) Any prescription resulting from the lapse of successive periods in the preceding cases, when the first period elapsed under the foreign law : Art. 2190. As to a conflict of these laws, see section 71 and notes tbereon. In the other provinces the time required is 6 years. The English Statutes, 21 James I. c. 16, and 3 & 4 Anne c. 8, establishing this limitation as to bills and notes, were introduced into the other provinces as set out ante pp. 10-18 ; but were never law in Lower Canada : Butler v. MacDougall, 2 Eev. de Leg. 70 (1835) ; Kussell v. Fisher, 4 L. C. E. 237 (1854); Langlois v. Johnston, ibid. 357 (1854). There has also been provincial legislation fixing this time in Nova Scotia and New Brunswick : E. S. N. S. c. 112; C. S. N. B. c. 85. Under these Acts a promise or acknowledgment must be in writing and signed by the party chargeable, to take a case out of the statute. Payment may have such effect, but an indorsement on a bill or note by the party receiving or his agent, is not Eufficient. No person is liable on account of the act or promise of his co-contractor or debtor, and one may be liable and may be sued without the other. Actions by or against minors, married women, or insane persons may be brought within six years from the removal of the disability. In New Brunswick, abcen tees are placed on the Sflnre footing; in Nova Scotia the provision applies only to actions to be brought against thetn. In Ontario thc.c are tWOi Acts — B. S. 0. c. 60, relating to the Limitation of Aottonv, and c. 128, to Written Promises. The former t < f i : Art. aay be quired luebec, ription y, oua here at miciled apse of he first As to a eon. i years. 4 Anne es, were 3.10-18; Dougall, C. R. There ) in Nova S.N.B. ent must |to take a ih effect, [receiving account I, and one Actions persons al of the ed on the s only to lthc*o are [tation of former LIMITATION OF ACTIONS OR PRESCRIPTION. 848 allocs minors and persons non compos mentis six years after § ^^ the removal of the impediment to bring an action; allows '■ the same time after his return to the province, to sue an absentee; and provides that time shall run in favor of a joint debtor, although one or more joint debtors may be out of the province. Chapter 123 provides that a promise to take a case out of the Statute, must be in writing and signed by the party chargeable ; that where there are joint contractors, or executors or administrators of any contractor, a promise or payment by one shall not bind the others ; that no indorsement on a bill or note by the party receiving payment shall be sufficient; and that a ratification after majority, of a contract during infancy, must be in writing. Ordinarily the statute begins to run when a bill matures when it •' " begins to or is dishonored. If it is payable on demand, it has been""""- held in Quebec, that prescription runs from its date or its issue (illustration no. 17 post) ; and this was considered to have been the case in England : Byles, p. 56. It has, however, been considered latterly that bills payable on or after demand, or at sight, or a fixed period after sight, should be on the same footing as other bills, and the statute should only run from their dishonor or maturity. See re Boyse, 33 Ch. D. 612 (1886) ; re Bethell, 34 Ch. D. 561 (1887). See section 57 (a) (2), where interest, as damages on a dishonored bill, runs from the time of presentment for payment, if the bill is payable on demand, and from the maturity of the bill in any other case. The principle there involved is somewhat analogous to that in the present question. Chalmers (p. 289) lays down the following five rules as Law of embodying the law of England on the subject : — 1. Subject to the case provided for by section 48 (1), and rule 5, no action on a bill can be maintained against any party ii li li i; 844 BILLS OF BXCHANOB § 59, thereto after the expiration of six years from the time when a cause of action first accrued to the then holder against such party. 2. As regards the acceptor, time begins to run from the maturity of the bill, unless — (1) Presentment for payment is necessary in order to charge the acceptor, in which case time (probably) runs from the date of such presentment ; or (2) The bill is accepted after its maturity, in which case time (probably) runs from the date of acceptance. 8. As regards the drawer or an indorser, time (generally) begins to run from date when notice of dishonor is received. 4. When an action is brought against a party to a bill to enforce an obligation collateral to the bill, though arising out of the bill transaction, the nature of the particular transaction determines the period from which the time begin? to run. 5. Any Circumstance which postpones or defeats the opera- tion of the Statute of Limitations in the case of an ordinary contract postpones or defeats it in like manner in the case of a bill. No indorsement or men^orandum of any payment written or made upon a bill by or on behalf of the party to whom such payment is made, is sufficient to defeat the operation of the statute. ILLUSTRATIONS. The following expressions have been held not sufficient to take the case out of the statute : — 1. " The notes are genuine ; that is, I think I made them, but I am under the impression they were paid, but I don't think I am called upon to have any further conversation with you about them ": Grantham v. Powell, 6 U. C. Q. B. 494 (1849). 2. " I am sorry to say I cannot do anything for you at pre- sent, but shall remember you as soon as possible": Gemmell v. Colton, 6 U. C. C. P. 57 (1866). ; . ' v.", ^• LIMITATION OF ACTIONS OB PRESCRIPTION. 345 when ft ist such Tom the charge the date case time generally) eived. a bill to ling out of ransaction un. the opera- 1 ordinary case of a snt written horn such ton of the ifficient to lade them, lon't think with you (1849). irou at pre- temmell v. 8. " If (here is anything due plaintiff, I am willing to pay ^ gg^ him ": Keys v. Pollock, 1 N. S. (1 Thorn. 2nd ed.) 109 (1839). - 4. A promise to pay " as soon as possible," without proof of defendant's ability: Murdoch v. Pitts, N. S. (James) 258 (1854). 5. " I know that it is due but I will never pay it ": Wain- man V. Kynman, 1 Ex. 118 (1847). See also Scales v. Jacob, 8 Bing. 638 (1826); Ayton v. Bolt, 4 ibid. 105 (1827); Fearn v. Lewis, 6 ibid. 349 (1830); Brigstocke v. Smith, 1 Cr. & M. 483 (1833) ; Spong v. Wright, 9 M. & W. 629 (1842). 6. " I never shall be able to pay cash, but you may have any of the goods we have at Y.": Cawley v. Furnell, 12 C. B. 291 (1852). 7. "As I do not recollect the date or the amount of the indorsements, I would thank you to send me a statement of them ": Gibson v. Grosvenor, 4 Gray, (Mass.) 606 (1855). The following have been held to be sufficient to take the case out of the statute : 8. "I shall repeat my assurance of the certainty of your being repaid your generous loan " : CoUis y. Stack, 1 H. & N. 605 (1857). 9. " I hope to be in H. very soon, when I trust everything will be arranged with Mrs. W.": Edmonds v. Goater, 15 Beavan 415 (1852). 10. " The great kindness of your father in lending me the money to purchase my seat on the Stock Exchange places me now in your debt. I must leave it to your generosity whether you will have me liquidate the loan on the sale of my seat," where the seat had been sold: Buccleugh v. Eden, 5 T. L. R. 690 (1889). 11. "I suppose I shall have to pay in the end" : Phelps v. Williamson, 26 Vt. 230 (1854). 12. •• I supposed the note was paid by A.; and if he does not, I shall have to pay it" : Hayden v. Johnson, ibid. 768 (1854). Iff ^ 'I i-fc %3 ii* MC BILLS OF BXOHAMOE S gg The following cases farther illustrate the various rules above ;; laid down : — 18. Payments made by oneiof two joint and several makers will not take the case out of the statute, as against the others unless made expressly as his agent and by his authority : Creigh- ton V. Allen, 26 U. C. Q. B. 627 (1867). 13. A writing sufficient to take a note out of the statute enures to the benefit of a subsequent holder : Marshall v. Smith, 20 U. C. C. P. 356 (1870). 15. For conflicting decisions in Upper Canada as to prescrip- tion claimed under the Lower Canada Statute, see Hervey v. Prid- ham, 11 U. C. C. P. 329 (1861) ; King v. Glassford, ibid. 490 (1861) ; Shiriff v. Holcomb, 2 E, & A. (U. C.) 516 (1864) ; Hervey V. Jacques, 20 U. C. Q. B. 366 (1861) ; Darling v. Hitchcock, 28 U. C. Q. B. 439 (1869). 16. The statute begins to run the day after the last day of grace : Edgar v. Magee, 1 0. R. 287 (1882) ; Ste. Marie v. Stone, 2 Dorion, 369 ; 5 L. N. 322 (1882). 17. The old rule in Lower Canada was, that a note payable on demand was due from the day of its date, and prescription ran from that time : Larocque v. Audres, 2 L. C. R. 335 (1851). 18. The absence of the defendant from the country does not interrupt prescription : Darah v. Church, 14 L, C. R. 295 (1861). 19. A note made before a notary en brevet was held not to be a promissory note within the meaning of 12 V. c. 22, and C. S. L. C. c, 64, and not subject to the 5 years' prescription : Gravelle V. Beaudoin, 7 L. C. J. 289 (1863) ; Lacoste v. Chauvin, ibid. 339 (1863) ; Seguin v. Bergevin, 16 L. C. R. 415 (1866) ; Pigeon v. Dagenais, 17 L. C. J. 21 (1872). Crevier v. Sawriole, 6 L. C. J. 257 (1862). overruled. 20. The lex fori governs as to prescription : Hillsburgh v. Mayer, 18 L. C. i. 69 (1873) ; Cross v. Snow, 9 L. N. 196 (1886) ; Lafaille v. Lafaille, 14 R. L. 466 (1886) ; but held in a case governed by the law before the code, that where defendant made a note in the United States which was payable there, and before its maturity he absconded and came to Lower Canada, and the J '\k LIMITATION OF ACTIONS OB PRBSCRIPTION. 847 les above 1,1 makers Ue others : Creigb- ,e statute V. Smitb, ) prescrip- ey V. Prid- ibid. 490 :) ; Hervey ichcock, 28 last day of ie V. Stone, lote payable irescription )35 (1851). y does not 295 (1861). not to be and C. S. ; Gravelle in, ibid. 339 Pigeon V. e, 6 L. C. J. illsburgh v. 196(1886); in a case ndant made and before bda, and the holder did not learn his whereabout until more than five years ^ 59^ had passed, the five years' prescription did not apply under the rule, contra non valentem agere non currit preacriptio: Wilson v. Demers, 14 L. C. J. 817 (1870). 21. Where the defendant had frequently written during the 5 years, asking for delay, prescription was held to have been in- terrupted : Walker v. Sweet, 21 L. C. J. 29 (1876). 22. A verbal promise to pay a no'.e under $60 during the 5 years will interrupt prescription : Fuehs v. Legare, 8 Q. L. R. 11 (1876) ; but such a promise after the 5 years have expired will not revive a note : Fiset v. Fouriner, 1 L. N. 589 (1878). 23. Where a bill is not accepted in payment of a debt, the prescription of the note does not prevent a recovery on the origi- nal debt if it is not prescribed : Bobitaille v. Denechaud, 5 Q. L. R. 288 (1879) ; Mitchell v. Holland, 16 S. C. Can. 687 (1889). 24. Payments on account by one partner take a note out of the statute as against his co-partner also : Sands v. Keator, 5 N. B. (3 Kerr) 829 (1847) ; Vanwart v. Roberts, ibid. 572 (1847). 25. The action accrued to the plaintiff, an indorser, when the note was transferred to him, and this being more than 6 years after it was due, his absence beyond the seas was immaterial : Bradbury v. Baillie, 6 N. B. (1 Allen) 690 (1850). 26. Where a note is payable by instalments, each instalment is subject to a separate plea of prescription : Montgomery v. Mc- Nair, 7 N. B. (2 Allen) 31 (1850). 27. A bill is payable three months after date or sight. Time runs in favor of the acceptor from the day the bill is payable, not from the day the acceptance is given : Holmes v. Kerrison, 2 Taunt. 828 (1810). 28. A note payable on demand, dated Jan. 1, is not issued until July 1. Time runs in favor of the maker from July 1 : Savage v. Aldren, 2 Stark. 282 (1817). 29. A note is payable three months after demand. Time nnis in favor of the maker from the day it is payable : Thorpe v. Coombe, 8 D. & R. 847 (1826). 848 BILLS OF EXCHANOE t 3l il ■r, ^ 59. ^^" ^^^^ consignee of goods authorizes tlie consignor to draw on him against them. The bill is dishonored and the drawer compelled to pay. Time runs against him on the implied con- tract of indemnity from the date of payment only : Huntley v. Sanderson, 1 Cr. & M. 467 (1888). 81. A bill is accepted to accommodate the drawer. It is dis- honored and two years afterwards the acceptor has to pay it. Time runs in favor of the drawer only from the time the acceptor was compelled to pay and not from maturity : Reynolds v. Doyle, 1 M. it Gr. 758 (1840); in cases of contribution, see Davies v. Humphreys, G M. ik W. 158 (1840). 82. A bill payable 90 days after sight is dishonored by non- acceptance. As regards the drawer, time runs against the holder from the dishonor and notice thereof. If the bill is presented for payment and again dishonored, no fresh cause of action arises : Whitehead v. Walker, 9 M. & W. 506 (1842). 88. A note is payable on demand, with no mention of interest. Proof that interest has been paid on it takes it out of the statute: Bamfield v. Tupper, 7 Ex. 27 (1861). 84. In 1840 a blank acceptance is given to a person who in 1850 fills it up as a bill payable 8 months after date and negoti- ates it to a bona Jide holder. Time runs in favor of the acceptor only from the day the bill was payable : Montague v. Perkins, 22 L. J. C. P. 187 (1853). 35. Defendant asked plaintiff for a loan, no time for re-pay- ment being fixed. The latter gave him a cheque, which was not cashed at once. In an action to recover the sum lent, time runs from the day the cheque was cashed, and not from its date: Garden v. Bruce, L. R. 3 C. P. 800 (1868). 86. The maker of a note, 20 years after it was due, signed his name and the date on the back of the note. Held, a sufficient acknowledgment to take it Out of the statute : Bourdin v. Green- wood, L. R. 13 Eq. 281 (1871). 87. To take a case out of the statute there must be an acknowledgement of the debt from which a promise to pay is LIMITATION OF ACTIONS OR PRESCRIPTION. 849 r to dvaw le drawer plied con- iuntley v. It is dis- to pay it. le acceptor Is V. Doyle, e Davies v. •ed by non- t the holder s presented Qtion arises : a of interest, the statute : jrson who in and negoti- the acceptor V. Perkins, le for re-pay- Ihich was not jnt, time run3 |om its date: le, signed his I, a sufficient tdin V. Green- must be an lise to pay is implied ; or an unconditional promise to pay ; or a conditional & 59^ promise, and proof of the fulfilment of the condition : re River Steamer Co., L. R. G Ch. at p. 828 (1871) ; Green v. Humphreys, '2(5 Ch. D. at p. 479 (1884). 88. Where part payment is relied upon as an acknowledgment, it must be under such circumstances that a promise to pay may be inferred in fact, not merely implied in law : Morgan v. Row- lands, L. R. 7 Q. B. at p. 498 (1872). 39. A note dated in 1857 was made payable B months after demand with no mention of interest. Interest was paid in 1857 and 1858, and indorsed on the note. The maker died in l86iK and the payee in 1878, being still the holder. On a claim by the executor of the payee, held, that time ran from the first payment of interest, and independent of the statute it would be presumed to have been paid: in re Rutherford, L. R. 14 Eq. G87 (1880). 40. Where a demand note was given and dated July 24th for a loan, but the money was not paid to the maker until Septem- ber 8th, the statute (probably) runs from July 24th : Buccleugh V. Eden, 5 T. L. R. 690 (1889). 2. Subject to the provisions hereinafter con- Pay^«^ent^ tdined, when a bill is paid by the drawer or imZtfttH' indorser, it is not discharged; but — {(I.) Where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not re-issue the bill ; {h.) Where a bill is paid by an indorser, or where a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his uo BILLS OF EXOHANae § 59. own and subseqiie»i indorsements, and again ne- gotiate the bill: Imp. Act, s. 59, (2) (a) (b). The provisions to which this sub-«iection ir Buhjeot are those relating to accommodation bills in sub-section S. If the indorser who has paid a bill, desires to negotiate the bill again, he must strike out his own and subsequent indorsements, and if indorsed to him in full he must re-in- dorse it. The present section contemplates payment at or after maturity ; where a bill before maturity is negotiated back to the drawer or an indorser, he may re-iBsue it, but canuot enforce the bill against any intervening party to whom he was previously liable : section 87. In France, payment by the drawer or an endorser dis- charges the bill : Pothier, Change, No. 106. ILLUSTRATIONS. 1. The indorser who pays a note at maturity, may at once proceed against the prior parties who are liable to him : Latham V. Norton, 6 U. C. 0. S. 82 (1841) ; McNabb v. Wagstaff, 5 U. C. Q. B. 688 (1849). 2. The drawer drew a bill to his own order and specially indorsed it. After dishonor it came back into his hands; he struck out the special indorsement, and indorsed it to plaintiff who was held entitled to recover from the acceptor : Black v. Strickland, 3 0. R. 217 (1883) ; Callow v. Lawrence, 8 M. & S. 95 (1814) ; Hubbard v. Jackson, 4 Bing 890 (1827). 3. An indorser who pays is not entitled to and does not need conventional subrogation against prior parties : Bove v. Macdou- aid, 16 L. C. R. 191 (1865). 4. Payment of a bill by the drawer does not discharge the bill or free the acceptor : Goodall v. Exchange Bank, M. L. R. 8 Q. B. 480 (1887). DIBOHAROE BT PAYMENT. ain ne- • bject are negotiate ibsequent uBt re-in- ,t or after ated back )ut cannot •whom h« dorser dis- L ay at once m: Latham Wagstaff, 5 ,nd specially hands; he to plaintiff or: Black V. e, 3 M. & S. • ioes not need re V. Macdou- iischarge the £, M. L. R. 8 5. The indorser of a bill writes to the drawer of a bill, pro- § 59^ raising to " retire " it, and accoruingly takes it up before matur- — - ity. It is not discharged : Elsam v. Denny, 15 C. B. at p. 94 (1854). 6. The drawer or indorser of a bill who pays, is a quasi' surety for the acceptor, and as such is entitled to the benefit of any securities deposited with the holder by the acceptor : Duncan V. N. & S. Wales Bank, 6 App. Cas. 1 (1880). 3. Where an accommodation bill is paid in due ^^^^^^"^^i^ course by the party accommodated, the bill is dis- charged. Imp. Act, s. 59 (3). An accommodation bill is one which the drawee has accepted for the accommodation of the drawer or some other person. The person thus accommodated may or may not be a party to the bill. For a definition of an accommodation party and bis liabilities, see section 28. The principle on which the bill is discharged is, that it has been paid by the person who is in reality primarily liable for the debt ; and having no rights against any person, he could not by a transfer after maturity give any rights to another holder: Solomon v. Davis: 1 C. & E. 83 (1883). If the bill was for the accommodation of several par- ties, and it is paid by one of them, the bill is discharged, l)ut the party who has paid has his recourse against the others. If several persons indorse a bill or note for the accommo- dation of the acceptor or maker, and one of them pays it, the whole circumstances attendant upon its making, issue and transference, may be legitimately referred to for the purpose of ascertaining the true relation to each other of the parties who put their signatures upon it, and reasonable inferences from these facts and circumstances are admitted to the effect of qualifying, altering, or even inverting the r 862 DILLS OF EXCHANQE. § 59. ^'elative liabilities which the law merchant would otherwise assign to them : Macdonald v. Whitfield, 8 App. Cas. 733 (1888). • • ILLUSTRATIONS. 1. Where the payee for whose accommodation the bill was made pays it after maturity, the bill is discliarged : Watson v. Porter, fi N. li. (8 Kerr) 187 (1846). 2. Plaintiif took a bill of sale of A's goods, undertaking to pay his borrowed money and accommodation notes. The note sued on was made by defendant for A's accommodation and indorsed by him and discounted in a bank. Plaintift' paid it at maturity and sued the maker. Held, that although plaintift' (hd not know it was an accommodation note, it was discharged on his paying it for A. and his action was dismissed : Peters v. Waterbury, 24 N. Ji. 154 (1884). 8. A bill is accepted for the accommodation of the drawer. He negotiates it, and at maturity takes it up. Subsequently he re-issues it. The holder cannot sue the acceptor, for the bill was discharged when the drawer paid it : Cook v. Lister, 82 L. J. C. P. at p. 127 (1868). See also Lazarus v. Cowie, 8 Q. B. 459 (1842); RaUi v. Dennistoun, 6 Ex, at p. 498 (1851); Parr V. Jewell, 16 C. B. at p. 709 (1855) ; Strong v. Foster, 17 C. B. at p. 222 (1855). Acceptor the holder at matur- ity. 60. When the acceptor of a bill is or becouies the holder of it at or after its maturity, in his own right, the bill is discharged. Imp. Act, s. Gl. If the person who has accepted a bill in his own name at maturity, is the holder in his capacity of executor, administrator, trustee, assignee, tutor, curator, or the like, the bill is not discharged. Such a bill he would need to hold "in his own right" in order that it might be dis- charged under the present section. i'i ; DISCHARQB BY CONFUSION. 358 therwise :a8. 733 e bill was Watson V. ing to pay ate sued on idorsed by a,turity and ot know it •aying it for y, 24 N. B. rawer. He iquently be for the bill Lister, 82 •wie, 8 Q. B. 851); Parr V, 17 C. B. becoixies b his own . 61. own name executor, 3r the Uke, lid need to Iht be dis- If the acceptor becomes the holder of the bill before § go. its maturity it is not discharged, but he may re-issue and further negotiate it ; but he is not entitled to enforce pay- ment of it against any intervening party to whom he was previously liable : section 37. When a bill is discharged, all rights of action on it are extinguished; it ceases to be a bill. At common law if the acceptor or maker became the administrator of the holder, the bill or note was not dis- charged ; but if he became the executor of the holder, it was discharged, though he had to account for the amount of it as assets : Freakley v. Fox, 9 B. & C. 130 (1829). The discharge of the bill freed the indorsers : Jenkins v. McKen- zie, 6 U. C. Q. B. 544 (1849); Lowe v. Peskett, 16 C. B. 500 (1855). The principle of this section is what is known in the confusion, civil law as " confusion. " The law of Quebec on the subject is contained in the following Articles of the Civil Code : — "1198. When the qualities of creditor and debtor are united in the same person, there arises a confusion which extin- guishes the obligation. — 1199. The confusion which takes place by the concurrence of the qualities of creditor and principal debtor in the same person, avails the sureties." It only takes place when the person is both creditor and debtor personally, in his own right, or when he is both * debtor and creditor in the same capacity or quality. If a bill, accepted by two or more joint acceptors, is held by one of them at or after maturity, it is discharged ; but such acceptor does not thereby lose his recourse or right of contribution against his co-acceptors : Harmer v. Steele, 4 Ex. 1 (1849). See Neale v. Turton, 4 Bing at p. 151 (1827). Express waiver as 61 • When the holder of a bill at or after matu rity, absolutely and unconditionally renounces his SSoeptor, m'c.b.e.a. — 23 354 BILLS OF EXOHAMQE § 61. riglits against the acceptor, the bill is discharged r the renunciation must be in writing, unless the bill is delivered up to the acceptor. Imp. Act, s. 62, (1).. The principle of this section in allowing a bill to be discharged by accord alone, without satisfaction, is contrary to the- ordinary rule of the common law with respect to contracts. It was embodied in the law merchant from the civil law. In French law it is called remise: Pothier, Change, No. 176; Nouguier, §§ 1043-1052. In England an express renunciation by parol was for- merly sufficient : Dingwall v. Dunster, 1 Dougl. 247 (1779) ; Whatley v. Tricker, 1 Camp. 35 (1807) ; Foster v. Dawber, 6 Ex. at p. 851 (1851). The clause making a writing neces- sary was inserted in the Imperial Act from the Scotch law. Where there is a payment of a sum less than the amount of the hill, the bill may in Quebec or Ontario, be discharged under the provisions of the present section ; or, it may be considered as discharged by payment under section 59. This was always the rule of the civil law; and it has been in effect adopted in Ontario by R. 8. 0. c. 44, s. 53, s-s. 7, which altered the rule of the common law as to accord and satisfaction, and provides that "part performance of an obligation, either before or after a breach thereof, when expressly accepted by the creditor in satisfaction, or rendered in pursuance of an agreement for that purpose, though without any new consideration, shall be held to extinguish the obligation." In any of the other provinces where the common law rule is still in force, part payment would only operate as a discharge when the conditions of the present section are complied with. The bill is discharged only when the renunciation by the acceptor is at or after maturity, and when it is absolute and unconditional. For the consideration of the questions that Discharge by partial payment. riSCHARGE BY WAIVER. 355 rged r le bill 2,(1). I to be jntrary pect to •cm the Pothier, vaa foi*- (1779) ;. Dawber, g neces- } Scotch 3 amount scharged |t may be ion 59. has been 3, 8-8. 7, cord and ce of an of, when rendered though tinguish vhere the ould only e present on by the lolute and lions that may arise, where the holder reserves his rights against § gi, other parties to the bill, see the notes on the following sub-section. 2. The liabilities of any party to a bill may in ?/ panoy like manner be renounced by the holder before, at''^*"'^' or after its maturity ; but nothing in this section shall affect the rights of a holder in due course without notice of renunciation : Imp. Act, s. 02 (2). "In like manner."— That is, absolutely and uncondi- tionally ; and in writing, unless the bill is delivered up. If the acceptor or any other party to a bill is discharged by the holder before maturity, and no entry be made of it upon the bill, and it come into the hands of a bfma fide holder for value before maturity without notice, the party so released would be liable to him. Principal and Surety.— Where the parties to a bill stand in the relation of principal and surety to each other, the nature of the renunciation of his rights by the holder against the party who stands in the relation of principal to other parties, becomes a matter of great importance. The question arises most frequently in connection with compo- sition and discharge, or the granting of time by taking a renewal. At common law where parties to a bill stand in the Atcomuiou ' law. relation of principal and surety to each other, if the holder, being aware of the fact, grants a discharge to the principal debtor or gives him time, the sureties are discharged, unless the holder has expressly reserved his rights against the sureties, or has reserved their rights against the prin- cipal debtor: Owen v. Horaan, 4 H. L. Cas. 997 (1853); Oriental Corporation v. Overend. L. R. 7 Ch. 142 (1871) y Polak V. Everett, 1 Q. B. D. at p. 678 (1876) ; Munster & 856 BILLS OF EXOHANOE § 61. Leinster Bank v. France, 24 Ir. L. E. 82 (1889) ; Thurgar V. Travis, N. B. (2 Allen) 272 (1851). On this subject, Chalmers says, p. 219 : " For the pre- sent purpose, prima facie the acceptor of a bill is the prin- cipal debtor, and the drawer and indorsers are, as regards him, sureties, and the drawer of a bill is the principal as regards the indorsers, and the first indorser is the prin- cipal as regards the second and subsequent indorsers, and so on in order; but evidence for the present purpose is admissible to show the real relationship of the parties, and it is immaterial that the holder was ignorant of the relationship when he took the bill, provided he had notice thereof at the time of his dealings with the principal": Ewin V. Lancaster, 6 B. & S. at p. 577 (1865) ; Oriental Corporation v. Overend, L. K. 7 H. L. 348 (1874). It was formerly held that an acceptor could not be shewn to be a mere surety, as this would be contradicting the written instrument by parol : Fentum v. Pocock, 5 Taunt. 192 (1813). But now all the attendant facts and circumstances may be referred to, for the purpose of ascer- taining the true relation of the parties to each other: Mac- donald v. Whitfield, 8 App. Cas. at pp. 745, 748 (1883). 8uret*hii) In Qucbec suretyship becomes extinct by the same causes as other obligations : C. C. Art. 1956. For these, see p. 331, ante. The discharge of the principal debtor dis- charges the surety: C. C. Art. 1958; but delay given to the principal debtor does not discharge the surety, who may in case of such delay sue the debtor in order to com- pel him to pay : C. C. Art. 1961. The suretyship is also at an end when by the act of the creditor the surety can no longer be subrogated in the rights, hypothecs, and privileges of such creditor : C. C. Art. 1959. . As will be seen from the cases cited, the decisions in DISCHARGE BY WAIVER. 367 the Quebec courts have been conflicting, and where a party § 61. to a bill occupying the relation of a surety, has been released by the mere giving of time, notwithstanding Article 1961 of the Code, it is not usually clear from the report whether this is on account of there having been a novation, or on account of the provision making the law of England as to bills and notes applicable, where the law of the province or the Code has no express provision. As to the effect of the conflict between the law of Quebec and that of other provinces, see notes on section 71, and on section 8 of the amending Act of 1891. who [i of the in the : C. C. Isions in ILLUSTRATIONS. 1. Time given to the maker of a note, discharges an indorser : Vankoughnet v. Mills, 5 Grant, 658 (1856); Arthur v. Lier, 8 U. C. C. P. 180 (1858); Farrell v. Oshawa Mfg. Co. 9 U. C. C. P. 239 (1859); Bedell v. Eaton, 4 N. B. (2 Kerr) 217 (1848). 2. The holder of a note gave time to two makers who were the principal debtors, without the consent of a third maker who was surety for them. The latter was held not liable to a plain- tiff who received the note after maturity with notice : Perley v. Loney, 17 U. C. Q. B. 279 (1858) ; Sher)ley v. Kurd, 3 Ont. A. R. 549 (1879); Davidson v. Bartlett, 1 :■. C. Q. B. 50 (1844), overruled; Greenough v. McClelland, 2 El. i^ El. 424 (1800). 8. Mere delay, or indulgence, or even negligence, is not enough where there is no binding agreement to give time : Thompson v. McDonald. 17 U. C. Q. B. 804 (1858); Wilson v. Brown. 6 Ont. A. R. 87 (1881); Berthelot v. Aylwin, 2 Rev. de Leg. 81 (1819); Merchants' Bank v. Whitfield, 2 Dorion, 157 (1881); Philpot V. Briant, 4 Bing. 717 (1828) ; Goring v. Edwards, 6 Bing. at p. 99 (1829) ; Black v. Ottoman Bank, 15 Moore P. C. at p. 484 (1862); Carter v. White, 25 Ch. D. at p. 672 (1883); Hay V. Powrie, 13 Sess. Cas. 777 (1886). 4. A reserve of the rights of the holder against the parties who apparently occupy the relation of sureties, prevents a ^ .■:l 858 BILLS OF EXCHANQE S CI discharge of the latter: Bank of Upper Canada v. Jardine, '— 9 U. C. C. P. 882 (1859) ; Canadian Bank of Commerce v. Northwood, 14 0. R. 207 (1887); Muir v. Crawford, L. R. 2 Sc. App. 456 (1875). 5. When the holders of a note gave time to an indorser, knowing that the maker had signed the note for his accommodation the maker was discharged : Bank of Upper Canada v. Ockermann, 15 U. C. C. P. 363 (1865) ; ex parte Webster, De Gex, 414 (1847) ; Bailey v. Edwards, 4 B. & S. 761 (1864). 6. A mother gave her son a note for his accommodation. The holder, who was aware of the facts, took two renewal notes from the son without the mother's knowledge. Held, that she was released : Devanney v. Brownlee, 8 Ont. A. R. 855 (1883). See Healey v. Dobson, 8 O. R. 691 (1885). 7. Where a bank gave up notes to a principal debtor and took forged renewals in their place, the surety was released : Merchants' Bank v. McKay, 15 S. C. Can. 672 (1888). 8. An indorsement of the payment of interest on a note up to a date beyond, is evidence of an extension of time of payment to such date, and discharges a surety: Ryan v. McKerrall, 15 0. R. 460 (1888). 9. Delay granted to the maker of a note does not liberate the indorser: Massue v. Crebassa, 7 L. C. J. 211 (1863). Contra, St. Aubin v. Fortin, 3 Rev. de Leg. 243 (1845); Desrosiers v. Guerin, 21 L. C. J. 96 (1876) : Carslake v. Wyatt, 2 Stephens' Dig. 112(1877); Banque Villc Marie v. Mallette, 33 L. C. J. 8 (1888): Pelletier v. Brosseau, M. L. R. 6 S. C. 831 (1890). 10. Where the holder accepted a composition from and released an indorser for whose accommodation the note was made, not knowing that it was for his accommodation, the maker is not discharged: Banque Nationale v. Betournay, 18 R. L. 175 (1887). Jl. A creditor took from a debtor a sight bill accepted by a third party and instead of collecting it, took a renewal. The acceptor failed before the renewal matured. Held, that the DISCHARGE BY WAIVER. 8S9 original debtor was discharged : O'Brien v. Semple, M. L. R. § gj^ 8 Q. B. 55 (1887). - 12. An indorser was released before maturity by the bank wliich held the note at maturity. Held, that the plaintiff who took it when overdue, cannot recover from the indorser : McLeod V. Carman, 12 N. B. (1 Han.) 692 (1869). 18. Taking a renewal bill payable on demand, is a giving of time as well as one payable at a fixed future time : Carrie v. Misa, L. R. 10 Ex. at pp. 163, 164 (1875). 14. When two or more sureties contract severallv, the credi- tor by releasing one does not discharge the others ; but when the creditor releases one of two or more sureties who have contracted jointly and severally, the others are discharged, the joint surety- ship of the others being part of the consideration of the contract of each : Ward v. National Bank of New Zealand, 8 App. Cas. at p. 764 (1883). 15. The discharge of one of two makers of a joint and several promissory note on part payment, does not discharge the other from his liability for the balance : Stephens v. Hughes, 1 T. L. R. 415 (1885). 16. " An absolute discharge given to the acceptor discharges him from all liability on the bill. But a discharge with the reservation of the rights of the sureties, the indorsers, only dis- charges the acceptor from his liability to the person giving the discharge" : per Lopes, L.J. in Jones v. Whittaker, 8 T. L. R. 723 (1887). bill. 62. Where a bill is intentionally cancelled bycanceiu, the holder or his agent, and the cancellation is apparent thereon, the bill is discharged : 2. In like manner, any party liable on a bill of ^j'^'y^^.^ may be discharged by the intentional cancellation of his signature by the holder or his agent. In such €ase, any indorser who would have had a right of 860 BILLS of: exohanqb § 62. recourse against the party whose signature is can- celled is also discharged. Imp. Act, s. 63 (1) (2). As to striking out indorsements, see ante p. 221, and section 59, s-s. 2 (b). Prior parties are not released by the cancellation of a signature : Barthe v. Armstrong, 5 K. L. 218 {•"> 9): Biggs v. Wood, 2 Man. L. E. 272 (1885). Whan a bill, produced at the trial, has the defendant's signature erased, the plaintiff cannot recover without evidence that it was done by mistake : Peel v. Kingsmill, 7 U. C. Q. B. 364 (1850) ; Issacs v. Grothe, 10 C. L. T. (N. J ._ 1390); Knight v. Clements, 8 A. & E. 215 (1836j; C.j '^ ' : Parker, 2 M. & Gr. 909 (1841). For a discnssic .-^ of the principle of the section, see bcholey v. ?am8(f- ' a, 2 Camp. 485 (1810); Ealli v. Denaistouu, » E.:. li'M); Ingham v. Primrose, 7 C. B. N. S. 82 (1859), Igiesias v. River Plate Bank, 3 C. P. D. 60 (1877). Krroneous cancella- tion. i J; n 3. A cancellation made unintentionally, or under a mistake, or without the authority of the holder,, is inoperative; but where a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionallyj or under a mistake, or without authority. Imp. Act, s. 63 (3). The usage in London in such a case is to return the bill with the words "Cancelled by mistake" written upon it: Byles, p. 263. If a banker cancel a bill by mistake, without any want of dvM care, he does not incur any liability ; but if there is negligence, and any loss result therefrom, he may be held Uable: Novell! v. Rossi, 2 B. & Ad. 757 (1831); Warwick V. Rogers, 5 M. & Gr. 340, 373 (1843); Prince v. Oriental DISCHARGE BY CANCELLATION. 361 Ls can- )(2). 21, and . by the 5 R. L. 5). mdant's without ngsinill» C. L. T. E. 215 iion, see Ealli V. nrose, T Bank, a )r under holdeiv nature burden at the jnder a 1.03(3). the bill pon it: |ny want there is be held Tarwick )riental Bank, 3 App. Cas. 325 (1878); Bank of Scotland v. § 62. Dominion Bank, Toronto, [1891J A. C. 692. See also — — — Raper v. Birkbeck, 15 East, 17 (1812); Wilkinson v. Johnson, 3 B. & C. 428 (1824). 63. Where a bill or acceptance is materially ^/*b^'5f"°" altered without the assent of all parties liable on the bill, the bill is voided, except as against a party who has himself made, authorized, or assented to the alteration, and subsaquent indorsers : ' Provided, that where a bill has been materially P»"o^i8»- altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it accord- ' ing to its original tenor: Imp. Act, s. 64 (1) The first clause is in accordance with the old law. Subsequent indorsers are held liable because an indorser is estopped from denying the prior signatures, and that it is a valid bill : section 55, s-s. 2. It has been laid down that an alteration is material which in any way alters the operation of the bill and the liabilities of the parties, whether the change be prejudicial or beneficial, or which would alter its effect if used for business purposes : Gardner v. Walsh, 5 E. & B. at p. 89 (1855); Suffell v. Bank of England, 9 Q. B. D. at pp. 568, 574 (1882). Whether an alteration is material or not, is a question of law : Vance v. Lowther, 1 Ex. D. 176 (1876). The proviso was inserted in the English bill in com- mittee, and ia intended to modify the rigor of the common law, which voided the bill entirely, even in the hands of a.n innocent holder. For a definition of a holder in due course,. see section 29. 'Mti , «62 §63. BILLS OF EXCHANGE ILLUSTRATIONS, 1. Defendant indorsed a note for the accommodation of the makers. They afterwards inserted the words "with interest at 10 percent." without his knowledge. He was held not liable on the note to a bona Jiile holder for value : Halcrow v. Kelly, 28 U. C. C. P. 551 (1878). 2. Where indorsers subsequently assented to the addition of the words "with interest at 7 per cent." they were held liable : Fitch V. Kelly, 44 U. C. Q. B. 578 (1879). 8. Where a note was payable to P. or bearer, and after being negotiated, the name of P. was written, but not by him, below the signature of the makers, and without their knowledge, the note was held to be void : Reid v. Humphrey, 6 Ont. A. R. 403 (1881). 4. Two notes were given for patent rights, and the maker indorsed on them the words " the within notes not to be sold. " The payee cut from one note the portion with these words, but without defacing it. On the other he erased the word "not." Plaintiff noticed the erasure when buying the notes, and gave much less than their value for them. Held, that he was not an innocent holder, and the notes were void : Swaisland v. David- son, 3 0. R. 320 (1882). 5. When the maker of a note signed it with a blank before the sum, both in the body of the note and in the margin, and the amount was increased, he was, on the ground of negligence, held liable to an innocent holder for the larger sum : Dorwin v. Thomson, 13 L. C. J. 262 (1869); Young v. Grote, 4 Ring. :253 (1827); Marcussen v. Birbeck Bank, 5 T. L. R. 646 (1889). 6. The question of the alteration of a note is for the jury : Domville v. Davies, 13 N. S. (1 R. & G.) 159 (1879) ; Street v. Walsh, Stevens' N. B. Dig. 250 (1862). 7. The rule in the proviso was applied in favor of plaintiffs -when after the note was signed, the words "jointly and severally" had been inserted in the same handwriting as the DISCHAROB BY ALTERATION. 363 on of the oterest at not liable Kelly, V. xldition of (Id liable : ifter being lim, below vledge, the )nt. A. R. the maker o be sold." words, but ord "not." , and gave was not an i V. David- lank before aargin, and negligence, Dorwin v. e, 4 Bing. 646 (1889). jr the jury : Street v. )f plaintiffs hointly and [ting as the rest of the body of the note : Waterous Engine Co. v. McLean, § gg^ 2 Man. L. R. 279 (1885). - 8. Where a bill is voided on account of a material alteration, the holder cannot sue on the consideration, unless the alteration took place before the bill was negotiated to him, or he is innocent in the matter, and the person from whom he received it, had no remedy over on the bill: Alderson v. Langdale, 8 B. & Ad. (560 (1882); Burchfield v. Moore, 28 L. J. Q. B. 261 (1854); Atkinson v. Hawdon, 2 A. & E. 628 (1885). 9. The alteration may be "apparent" although the holder may not have been able to detect it : Leeds Bank v. Walker, 11 Q. B. D. 84 (1888). are material altera- 2. In particular, the following alterations are^^'^*'^* material, namely, any alteration of the date, thetions" sum payable, the time of payment, the place of payment, and where a bill has been accepted gen- erally, the addition of a place of payment without the acceptor's assent. Imp. Act, s. 64 (2). The list of material alterations here given is not exhaus- tive. For a statement of the grounds on which an alteration is deemed to be material, see the notes to the preceeding sub-section. ILLUSTRATIONS. The following alterations in bills and notes have been held to be material : — 1. Alteration of the date : Meredith v. Culver, 5 U. C. Q. B. 218 (1848); Gladstone v. Dew, 9 U. C. C. P. 489 (1859) ; Beltz V. Molsons Bank, 40 U. C. Q. B. 258 (1876); Banque Ville Marie v. Primeau, 26 L. C. J. 20 (1881) ; Quebec Bank v. Ogilvy, iH)orion, 200 (1883); Masten v. Miller, 4 T. R. 820 (1791); Outhwaite v. Luntley, 4 Camp. 179 (1815) ; Atkinson v. Hawdon, 2 A. & E. 628 (1885) ; Hirschman v. Budd, L. R. 8 Ex. 171 (1873) ; 804 BILLS OF EXCHANQE & g3 Vance v. Lowther, 1 Ex. D. 176 (1876); Engel v. Stourton, '— 6 T. L. R. 444 (1889). 2. Alteration of the sum payable : Halcrow v. Kelly, 28 U. C. C. P. 651 (1878); Fitcli v. Kelly, 44 U. C. Q. B. 578 (1879). Even if made less : Hamelin v. Bruck, 9 Q. B. 806 (1846) ; Sutton V. Toomer, 7 B. & C. 416 (1827); Warrington v. Early, 28 L. J. Q. B. 47 (1853). 8. Alteration of the time of payment : Meredith v. Culver, supra; Reg. v. Craig, 7 U. C. C. P. 289 (1857); Westloh v. Brown, 48 U. C. Q. B. 402 (1878); Long v. Moore, 8 Esp. 155 n. (1790). 4. Alteration of the place of payment : McQueen v. Mclntyre, 80 U. C. C. P. 426(1879); Tidmarsh v. Grover, 1 M. & S. 785 (1818) ; Cowie v. Halsall, 4 B. & A. 197 (1821). 5. Adding a place of payment : Calvert v. Bakor, 4 M. & W. 417 (1888); Gibb v. Mather, 2 Cr. & J. at p. 262 (1882.) 6. Making a "joint" note "joint and several ": Samson v. ^ager, 4 U. C. 0. S. 2 (1834); Perring v. Hone, 4 Bing. 28 (1826), See Leslie v. Emmons, 25 U. C. Q. B. 248 (1866). 7. By striking out or clipping off a condition indorsed : Campbell v. McKinnon, 18 U. C. Q. B. 612 (1859) ; Swaisland V. Davidson, 3 0. R. 320 (1888). 8. By adding "or order" to make the note negotiable: Lawton v. Millidge, 4 N. B. (2 Kerr) 520 (1844). But see No. 17 below. 9. By adding a new maker after issue : Reid v. Humphrey, 6 Ont. A. R. 408 (1881) ; Gardner v. Walsh, 5 E. »& B. 83 (1855). 10. Erasing the signature of one of two joint makers : Nichol- son v. Reveill, 4 A. & E. 675 (1886). 11. (^hanging "I" to "we": Draper v. Wood, 112 Mass. 815 (1878). 12. Changing "order" to "bearer": Booth v. Powers, 56 N. Y. 22 (1874). ! n ' If DISCHARQE BY ALTERATION. 365 . Stourton, r. Kelly. 28 578 (1879). 800 (1846) ; on V. Early, th V. Culver, Westloh V. oore, 8 Esp. McQueen v. li V. Grover, 197 (1821). ar, 4 M. & W. L832.) ' : Samson v. , 4 Bing. 28 3 (1866). [on indorsed : i); Swaisland negotiable : But see No. Humphrey, |B. 83 (1855). brs : Nichol- l, 112 Mass. Tbp following alterations have been held not to, be material : — § 53^ 18. Inserting the word "months" where inadvertently omitted: Laine v. Clarke, R. L. 450 (1871). 14. As regards the maker, giving the note a later date : (.'anadian Investment Co. v. Brown, 19 R. L. 864 (1890) ; but now see sub-section 2, supra. 15. The maker of an accommodation note issued in June, dated it " 6th, 1875," without a month. June 6th was a Sunday. The payee made the date June 8th. Held, that the note was not voided: Merchants' Jiank v. Stirling, 18 N. S. (1 R. & G.) 489 (1880) ; but now see sub-section 2, supra. 16. A memorandum at the foot declaring the note to be payable at a particular place : Cunard v. Tozer, 4 N. B. (2 Kerr) ma (1844). 17. Adding "or order": Kershaw v. Cox, 3 Esp. 246 (1800); 15yrom v. Thompson, 11 A. & E. 31 (1889). 18. Changing the name of the drawees from S. C. & Co. to S. & C, their proper firm name : Farquhar v. Southey, 1 M. & M. 14 (1826). 19. Adding "on demand," where no due time was men- tioned: Aldous v. Cornwell, L. R. 3 Q. B. 578 (1868). 20. Adding " for the Bank of, etc." to the signature of the cashier when he had in fact signed for the bank : Folger v. Cliase, 18 Pick. (Mass.) 68 (1886). 21. Inserting the dollar mark before the numerals : Hough- ton V. Francis, 29 111. 244 (1862). 22. Correcting a name incorrectly written : Cole v. Hills, a N. H. 227 (1868) ; Desby v. Thrall, 44 Vt. 413 (1872). Fraudulently altering a bill or note is forgery. See ante p. 148. Powers, 56 H 866 §64. Acceji- taiice for honor Kuirra {iroteRt. BILLS OF EXOHANOB Acceptance and Payment for Honor. Sections 64 to 67, inclusive, relate to this peculiar form of acceptance and payment, called also supra protest, be- cause it can only take place after the bill has been protest- ed for non-acceptance or non-payment as the case may be. In the French Code de Commerce it is called acceptance or payment by intervention. On account of the great facilities which parties to a bill now have for communica- ting with each other, it is seldom resorted to in the course of modern mercantile affairs. 64. Where a bill of exchange has been protested for dishonor by non-acceptance, or protested for better security, and is not overdue, any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill supra protest, for the honor of any party liable thereon, or for the honor of the person for whose account the bill is drawn. Imp. Act, s. (35 (1); C. C. 2290. It is not necessary that the protest should be extended before acceptance stipra protest; it is sufficient that the bill has been noted : section 92. As to protest for better security when the acceptor has failed, see section 51, s-s. 5 and ex parte Wackerbatb, 5 Vesey, 574 (1800). The holder may refuse to allow an acceptance supra protest ; he may prefer an immediate recourse against the parties liable to him on the bill. An acceptance sujm protest benefits only the party for whose honor it is made, and those subsequent to him. With the consent of the ,i> AOOBPTANOE AND PAYMENT FOR HONOR. 867 •uliar form arotest, be- en protest- ,se may be. acceptance the great ommunica- i the course 1 protested )tested ibv person, not y, with the l-pt the bill irty liable for whose s. G5 (1); be extended int that the acceptor has "Wackerbatb, ptance supra against the stance supra »r it is made, sent of the holder there might also be acceptances supra protest for the § 54. honor of prior parties : 1 Daniel, § 525. The drawee may ' also change his mind and accept supra protest. If the acceptor supra protest should fail, there might be a second acceptance, after a protest for better security. In Quebec, under the Code, an acceptor was bound to give notice without delay to the party for whose benefit he accepted, and to the other parties liable to him on the bill : C. C. 2297. This is not now required. The acceptance for honor is conditional upon non- pay- ment by the drawee. The bill must still be presented at maturity to the drawee, and protested for non-payment before being presented to the acceptor for honor, who is in the position of a surety, ratlitr than aa being priiK.u'ily liable : sections (56, 67, s-s. 5. ILLUSTRATIONS. 1. A defendant cannot be charged as an acc( "or of a bill that has already been accepted, though conditionally, by the drawee : Spalding v. McKay, 5 U. C. (). S. 656 (188H). 2. Originally it was not necessary to protest a bill before an acceptance for honor : Mutford v. Walcot, 1 Ld. Rayni. 575 (1697). 8. A protest was subsequently held to be a necessary prelim- inary in accordance with the custom of merchants ; Vandewall V. Tyrrell, 1 M. & M. 87 (1827). tance m •t. 2. A bill may be accepted for honor for part ^^^'=^cei, only of the sum for which it is drawn. Imp. Act,*'** s. G5 (2). An acceptance for part only is a qualified acceptance : section 19, 2 {b) ; but does not require the assent of the drawer or indorsers : section 42, s-s. 2. Where a foreign bill has been accepted as to part, it must be protested as to the balance : ibid. •i P 368 BILLS OF EXCHANGE AiidRi(;i)0(l § 64. 3- An acceptance for honor supra protest, in Must be in ordcr to be valid, must — writing. (a.) Be written on the bill, and indicate that it is an acceptance for honor ; (b.) Be signed by the acceptor for honor : Imp. Act, s. 65 (3). The usual form of such an acceptance is " accepted for honor," "accepted supra protest," or more frequently simply, " accepted S. P.," with the signature of the acceptor, and if not accepted for the honor of the drawer, with a designation of the party for whose honor it is made. Formerly a notarial " act of honor " was necessary as in the case of a payment for honor. Brooks' Notary, 4th Ed. 93 ; Mitchell v. Baring, 10 B. & C. 4 (1829) ; Gazzam v. Armstrong, 3 Dana, 554 (1835) ; section 68, s-s., 3 ; but this is not required by the Act. As to the requirements of an ordinary acceptance, see section 17. 4. Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer : 5. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of protesting for non-acceptance, and not from the date of the acceptance for honor : Imp. Act, s. 54 (4) (5). Sub-section 5 is copied from the Imperial Act with the single substitution of the word "protesting" for "noting," which really makes no change : section 92. lu order to make it harmonize with section 11, s-s. 1 (a), the words " at sight or " should have been inserted as has been done in For wlidse honor. Coinpiita- tioM of time. ACCEPTANCE FOR HONOR. 869 sections 12, 18, and 40 by the amending Act of 1891. It § 64. is likely, however, that the Courts will interpret it as if the change had been made (see section 14, s-s. 4) ; although the former rule was to calculate the maturity from the date of the acceptance and not of the protest : Williams v. Gcr- maine, 7 B. •'i: C. at p. 471 (1827). 65. 'Che acceptor lor honor of a bill by 'Accept- y'|'^'^'Ji/|>^,,j. iiig it en^^ages that he will, on dne presentment, '°'"''*'"°'" pay the bill according to the tenor of his accept- ance, if it is not paid by the drawee, provided it has been duly presented for payment and protested for non-payment, and that he receives notice of these facts: Imp. Act, s. (>() (1); C. C. 2296. The acceptor for honor is only secondarily liable on the bill. It is sufficient that the bill be noted for protest, the formal protest may be extended subsequently: section 51, 8-8. 4, and section 92. The reason for requiring a presen- tation for payment to the drawee at maturity, is that he may in the meantime have received effects or instructions that may lead him to pay the bill : Hoare v. Cazenove, 10 East. 398 (1812). If a place of payment is specified in the bill it should be presented there: section 45, s-s. 2 {d} (1). In Quebec under the Code the acceptor for honor was bound to give notice of his acceptance without delay to the party for whose honor he accepted, and to the other parties who might be liable to him on the bill : C. C. 2297. This is no longer necessary. 2. The acceptor for honor is liable to the holder 1:° «'""» and to all parties to the bill subsequent to the party for whose honor he has accepted. Imp. Act, s. 66 (2). ' m'c.b.e.a. — 24 J** r 870 §65. BILLS OF EXCHANGE The acceptor for honor is subject to the same estoppels as an ordinary acceptor, and if he has accepted for the honor of the drawer to the same estoppels as a drawer : see section 54 (b), and section 55 (b) ; also Phillips v. Im Thurn, 18 C. B. N. S. 694 (1865), and L. R. 1 C. P. 471 (1866) ; Wilkinson v. Johnson, 3 B. &. C. at p. 436 (1824). Present- ment to .■■■'■' r . v' !Ki-- I ! 66. Where a dishonored bill has been accepted forCr. for honor supra protest, or contains a reference in case of need, it must be protested for non-payment before it is presented for payment to the acceptor for honor, or referee in case of need : Imp. Act, 8. 67 (1). It is sufficient that the bill be noted for nonpayment, the protest may be extended subsequently : section 51, s-s. 4, and section 92. It is optional with the holder to resort to the referee in case of need or not as he thinks fit : sec- tion 15. In Quebec, under the Code, presentment to the referee was compulsorj* : C. C. 2306. Time for 2. Where the address of the acceptor for honor present- _ _ ^ ™*"*- is in the same place where the bill is protested for non-payment, the bill must be presented to him not later than the day following its maturity: and where the address of the acceptor for honor is in some place other than the place where it was pro- tested for non-payment, the bill must be forwarded not later than the day following its maturity for presentment to him. Imp. Act, s. G7 (2). The "day following" would mean the next business day: section 91. The Act is silent as to the effect of want of presentation to the acceptor for honor within the prescribed time. From the language used it would seem as if he i" ACCEPTANCE FOR HONOR. 371 jtoppels for the irawer : )9 V. lin . P. 471 i (1824). ccepted •ence in layment icceptor [ip. Act, payment, »n 51, 8-8. f to resort 8 tit : sec- ent to the 'or honor lested for him not bty : and Inor is in vas pro- )rwarded iurity for liness day : Lf want of jpreBcribed as if he would be discharged, and also any party to the bill who ^ gg, would have been discharged if he had paid it. See Story ~~ Y. Batten, 3 Wend. (N.Y.) 486 (1830); Nouguier § 583; also sub-section 4. 3. Delay in presentinen|i or non-presentment is "jfc'Sse*"'^ excused by any circumstance which would excuse delay in presentment for payment or non-present- ment for payment. Imp. Act, s. 67 (3). For the circumstances which excuse delay in present- ment for payment or which dispense with presentment for payment, see section 46. 4. When a bill of exchange is dishonored bv^'^'^testfor " t' non-pay- the acceptor for honor, it must be protested for'"®"*- non-payment by him. Imp. Act, s. 67 (4). The fact that a protest for non-payment is required in all cases when an acceptor for honor refuses to pay a bill, even when no one has indorsed the bill subsequent to his acceptance for honor, would seem to favour the idea, that failure to present it would not only release him, but also release the party for whose honor he had accepted and subsequent parties. Notice of dishonor should be sent to each of these parties. See Nouguier, §1320, 1321. 67. Where a bill has been protested for non- fo7^i*'J,, payment, any person may intervene and pay it ?eit!** ^'*^ supra protest for the honor of any party liable thereon, or for the honor of the person for whose account the bill is drawn : Imp. Act, s. 68 (1) ; C. C. 2317. It is not necessary that the protest be actually extended before the payment for honor is made; it is sufficient that 372 §67. If nmic tliciii one offer to imy. Atti'^tii- tioii. BILLS OF EXCHANGE it be noted : section 92. The person for whose account a bill is drawn is in England called "the third accoun'^." This section would appear to be applicable to promis- sory notes. A person who takes up a bill supra protest for the benefit of a particular party to the bill succeeds to the title of the person from whom, not for whom, he receives it, and has all the title of such person to sue upon the bill, except that he discharges all the parties subsequent to the one •for whose honor he takes it up, and that he cannot himstlf indorse it over: in re Overend, Gurney \' Co., c.v parte Swan, L. li. 6 Eq. 344 (1868). Sec also ex parte Lambert. 13 Yesey, 179 (180()); Geralopulo v. Wieler, 10 C. B. (i'.lO (1851); ex parte Wyld, 2 DeG. F. \- .T., 642 (I860); Deacon v. Stodhart, 2 M. \- Gr. at p. 320 (1841); Baring V. Clark, ID Pick. (Mass ) 220 (1837): Sch.iltield v. Bayard. 3 Wend. (N.Y) 488 (1830). The French Code de Commerce contains provisions similar to those of the present section : Arts, 158, 159. It is there called payment by intervention. See also Pothier, Change, Nos. 113, 114, and Nouguicr, 5j § 1004-1009. '1. Where two or more persons otfer to pay <\ hill for the honor of different parties, the person whose payment will discharge most parties to the hill shall have the preference : Imp. Act, s. ()8 {'!). 8. Payment for honor sNjini protest, in order to operate as snch and not as a mere volnntary pay- ment, must be attested by a notarial act of honor, which may he appended to the protest or form an t^xtension of it : Imp. Act, s. ()8 {:]). This notarial act of honor is necessary, in order to give the person who pays the rights and privileges accorded by satsaons PAYMENT FOR HONOR. 373 count a in'i/. promis- for the the title iS it, and 11, except » the one it himstlf ex })((i'tc Lambert. C. B. (JS)0 I (I860); ); Bavins V. Bavavd, provisions ^, 150. It Pothier, D09. pay a bill 1)11 NvllOSt' the bill order to ;ary pay- |)f boiior, fori 11 an ler to give tcorded hv For § 67. the present section, and especially by sub-section 5. the form for such an act, see Appendix. 4. The jiotarial act of honor must be founded J|;^f;^„, on a declaration made by the payer for honor, or his agent in that behalf, declaring his intention to pay the bill for honor, and for whose honor he pays: Imp. Act, s. 08 (4). 5. Where a bill has beeni paid for honor, allj;,*^''|!i**jj^'; parties subsequent to the party for whose honor it is paid are discharged, but the payer for honor is subrogated for and succeeds to both the rights and duties of the holder as regards the party for whose iionor he pays, and all parties liable to that party : Imp. Act, s. ()8 (5). If the holder is a holder in due course, or if any party to the bill subsequent to the party for whose honor the bill has been paid was a holder in due course, the payer for lionor acquires their rights in this respect. Among the duties to which he succeeds is that of giving notice of dis- honm-: Goodall v. Polhill, 14 L. J. C. P. 14(5 (1845). (). The payer for honor, on paying to the holder oi'iivery i •' ' r .' n to payer the amount of the bill and the notarial expenses '"' """°''- incidental to its dishonor, is entitled to receive both the bill itself and the protest. If the holder does not on demand deliver them up, he shall be liable to the payer for honor in damages : Imp. Act, s. 08 (0). 7. Where the holder of a bill refuses to receive payment supra protest, he shall lose his right of p. 'f'l- 874 BILLS OF EXCHAMQE 1 , ^. * ; r >»( t ! ^ - ;r. '* b- '■J '* ?1 1 ^^>" i|: 1 § 67. recourse against any party who would have been " discharged by such payment: Imp. Act, s. 68 (7). Lost Instruments. Only two sections, 68 and 69, are devoted to this subject. The former gives the holder the right to demand a dupli- cate of a bill lost before maturity ; the latter gives the party liable, the right to indemnity when he is called upon to pay a lost bill. The Act does not treat of the rules of evidence, by which secondary evidence is allowed in the case of a bill or note lost or destroyed. nghwo 68. Where a bill has been lost before it is odui. overdue, the person who was holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer, if re- quired, to indemnify him against all persons what- ever in case the bill alleged to have been lost shall be found again : 2. If the drawer, on request as aforesaid, refuses to give such duplicate bill, he may be compelled to do so. Imp. Act, s. 69. Before the passage of the Imperial Act this provision applied to inland bills and notes, under 9 Wm. 3, c. 17, and 3-4 Anne, c. 8. Courts of Equity had extended it to indorsers as well as to the drawer. Chalmers (p. 233) speaks of the remedy as being still very inadequate, as it gives no power to obtain an indorsement or acceptance over again, and contrasts it with the remedy given by the Con- tinental Codes, which have elaborate provisions on the If refused. LOST INSTRUMENTS. 375 subject. See Walmesley v. Child, 1 Vesey, sen. 341 (1749), § 68. and Rhodes v. Morse, 14 Jur. 800 (1850). The loss or destruction of a bill does not relieve from Present- ment if the duty of demanding payment. This should be accom- '^'" *» '"»*• panied by an offer of indemnity', and if payment is re- fused, protest may be made on a copy or written particu- lars : section 51, s-s. 8. " Neglect to offer indemnity to the maker or acceptor on demand of payment does not deprive the payee of his right of action, but it will prevent him from recovering costs, and will compel him to bear any special damages resulting from the neglect on his subse- quent suit " : 2 Daniel, § 1465 ; Thackray v. Blackett, 3 Camp. 164 (1812). 69. In any action or proceeding upon a bill, j^«»'ojjj»» the court or a judge may order that the loss of the instrument shall not be set up, provided an indem- nity is given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question. Imp. Act, s. 70. At common law, if a negotiable bill were lost, no action could be maintained, either on the instrument or on the consideration for it, even if it was overdue when lost: Pier- son v. Hutchinson, 2 Camp. 211 (1809); Hansard v. llobin- 8on, 7 B. it C. 90 (1827) ; Ramuz v. Crowe, 1 Ex. 167 ( 1 847) ; Crowe v. Clay, 9 Ex. 604 (1854). Most of the provinces had provisions similar to the present section. When the defendant did not demand security a decree was made for plaintiff without requiring it : Abell v. Mor- rison, 23 Grant, 109 (1876). The loss or destruction of the note must be proved and indemnity offered : Waute v. Robinson, 2 Rev. de Leg. 29 I'm 376 BILLS OF EXCHANGE § 69. (1816); Beaupre v. Burn, 2 Rev. de Le«. 31 (1821). See Garden v. Ruiter 9 L. C. J. 217 (1865) ; Wright v. Maid- Btone, 24 L. J. Ch. 623 (1856). No indemnity is required if the bill is not negotiable : Cooley V. Dominion Building Society, 24 L. C. J. Ill (1878). See Wain v. Bailey, 10 A. & E. 616 (1839). II^LUSTRATIONS. 1. Where a note had been indorsed to an attorney's clerk and mislaid : Held, that secondary evidence of it could not be given without calling the clerk, although the attorney was called, and swore to his belief of its loss : Grove v. Clarke, 5 U. C. 0. S.. 208 (1886). 2. When the plaintiifs declared against the drawer of a lost bill payable to plaintiff's order on a promise to pay it, but did not state any new consideration for the promise, or allege that the bill was unindorsed at the time of the loss, the declaration was held bad on general demurrer : Russell v. McDonald, I U. C. Q. B. 290 (1844). 8. Payee against maker. Plea, loss of the note by plaintiff before suit, and that he hath been and is unable to produce it. Replication denying the loss only, held good : Campbell v. McCrea, II U. C. Q. B. 98 (1858). 4. A person suing on a lost note should, before action, tender an indemnity to the maker. If he neglect this, it will be at the risk of costs to defendant : Banque Jacques Cartier v. Strachan, 5 Ont. P. R. 159 (18G9) ; King v. Zimmermarj» L. R. 6 C. P. 466 (1871). BILLS OF EXCHANGE 377 §70. Bill in a Set. . The provisions of the Act relating to bills in a set are all found in section 70. Bills in this form are usual for remittances abroad. To prevent delay in case the first should miscarry a second is frequently sent by a succeed- infT mail. In Canada a set is generally made up of three parts. Each part contains a condition that the othprs (naming them) are unpaid. See form in Appendix. 70. Where a bill is drawn in a set, each part bui" '» of the set being ninnbered, and containing a refer- ence to the other parts, the whole of the parts constitnte one bill : Imp. Act, s. 71 (1), An agreement to deliver up certain sets of foreign bills which were drawn in three parts is not complied with by delivering up one of each set : Kearney v. West Granada Co. 1 H. & N. 412 (1856). A person who negotiates one part of a set does not warrant that he has the others : Pinard v. Klockman, 3 B. & 8. 388 (1863). If one part of a set does not contain a reference to the other parts, a bona fide holder for value may recover on it as a separate bill: Davidson v. Kobertson, 3 Dow, 218 (1815); Societt^ Generale v. Metropolitan Bank, 27 L. T. N. S. 849 (1873). 2. Where the holder of a set indorses two or " j,»;J">»«^ to dinorent more parts to different persons, he is liable on***'^""" every such part, and every indorser subsequent to him is liable on the part he has himself indorsed as if the said parts were separate bills : Imp. Act. s. 71 (2). See Holdsworth v. Hunter, 10 B. & C. 449 (1830). 878 BILLS OF EXCHANGE M;: § 70. •'^- Where two or more parts of a set are nego- if^otia- tiated to different holders in due course, the holder ted to ' ho7de?8.* ^vhose title first iiccrues is, as between such holders, deemed the true owner of the bill ; but nothing in this sub-section shall affect the rights of a person who in due course accepts or pays the part first presented to him. Imp. Act, s. 71 (3). See Perreira v. Jopp, 10 B. \' C. 450 n. (1793) ; Lang v. Smyth, 7 Bing. 284 (1831). Accep- tance. 4. The acceptance umy be written on any part, and it must l)e written on one part only: Imp. Act, s. 71 (4). thw^one '^' ^^ ^^^^ drawcc accepts more than one part, acciV'ted. Hud such acccptcd parts get into the hands of dif- ferent holders in due course, he is liable on every such part as if it were a separate bill : Imp. Act, s. 71 (5). See Holdsworth v. Hunter, supra. Payment without delivery of proper part. 0. When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof: Imp. Act, s. 71 (G). 7. Subject to the preceding rules, where any one part of a bill drawn in a set is discharged by pay- ment or otherwise, the whole bill is discharged: Imp. Act, s. 71 (7). iiii BILL IN A SET. 379 As to bosv a bill may be discbarged, see sections 59 to § 70, 63, inclusive. The discharge results from the rule in sub-section 1, that the whole of the parts constitute one bill. See Wells V. Whitehead, 15 Wend. (N. Y.) 527 (1836); Durkin v. Cranston, 7 Johns. (N. Y.) 442 (1811); Ingrabam v. Gibbs, 2 Dallas 134 (1791). In an action against the drawer or indorsers, the part of the set which was protested must be produced : Downes V. Church, 13 Peters (U. S.) 205 (1839). Conflict of Laws. Section 71 lays down certain rules upon questions involving the conflict of laws or private international law. On some of the points thus settled, there bad been a great conflict of authority and decisions in England and Canada. The section is copied from section 72 of the Imperial Act with the simple substitution of "Canada" for the words "United Kingdom" wherever they occur. On account of the peculiar character of our federal con- stitution some new questions will arise here in consequence of the adoption of the language of the Imperial Act with- out change or definition. Is Canada one "country" within the meaning of sub-section 1 ? Or will the different pro- vinces be considered as different countries for the purposes of the section with respect to matters as to which the Act itself makes different provisions for them, or where the provincial laws directly or indirectly affecting bills and notes differ so widely? The analogy of the United States does not afford us much assistance, as there the subject belongs to the individual States, each of which is, for pur- poses within its jurisdiction, considered a distinct and independent sovereignty. In these respects the States 880 BILLS OF EXOHANUIS § 71. I'etain their separate Hutonomies, and are deemed as much foreign to each other, as if they did not form a Union at all. As the rules laid down in this section are those gen- erally recognized, it is prohable that our Courts will apply them to a settlement of interprovincial as well as inter- national ((uestions. Tile points which will arise under the Act involving^ such conflict between the laws of the different provinces, are numerous and important. Some of them will arise under provisions of the. Act itself, such as that of the due date of a bill being affected in certain cases by the non- juridical days differing in the different provinces under section 14; or the rules as to protests in Quebec differing from those in the other provinces. In clauses (c) and (e) of this section are laid down the rules which govern these cases. They will arise, however, chiefly from the conflict of provincial laws on such subjects as capacity, compen- sation, prescription, suretyship, etc. It is to be borne in mind that it is a rule of international law that a discharge in the place where the contract is made is recognized as a discharge everywhere. For a full discussion of the important questions arising under this head, the reader is referred to the standard works on the subject, and to the full reports of the leading cases, some of which are cited in the following notes on the various clauses of the section. where laws conflict. 71.. Where a bill drawn in one country is iip{?o- tiated, accepted or payable in another, the r'' ' duties and liabilities of the parties there, .ae determined as follows : — V! Validitiy. how datei'- luined. J (a.) The validity of a bill as regards requisites in form is determined by the law of the place of ti'.i. CONFLICT OF LAWS. H81 3,8 much Jnion at ose gen- ill apply m inter- involving loviucos, will arise f the due the non- •es under > differing c) and {e) rern these [le contiict , compeu- ernational ontract is fns arising standard he leading iteson the 18 iieKO- le r'"h*' [eqiiisites place of > issue, and tln' validity as re^'ards re((nisit(>s in form 5^ 71. of the supervenin^M'ontnicts, such as a('C('|)taM(('. ~ or indorseiiKMit, or acceptance siiju-a protest, is determined by the law of tiie |)lac<' where such contract was made: Imp. Act, s. 7*2 (I). " Country " is not defined in the Aet. While, strictly speaking, Canada is one country for the purposes of hills and notes, these heing assigned hy section !)1 of the Ihitish North America Act exclusively to the Dominion Parliiiinent. it is prohahle that the (Courts will a])ply the principles of the present section, which are the recognized rules of private international law, to eases where two or more })rovinces are concerned and there is a contiict hetween their laws. "Drawing, in reference to hills of exchange, includes not only the writing and signing, hut also the full execution by delivery ": Wallace v. Souther, 2 S. C. Can. at p. (Jl:} (lb/8). A bill is not "drawn " until it is issued, that is, delivered, complete in form to the payee or indorsee if it is payable to order, or to some person as bearer, if it is i)ay- ' able to bearer : section 2. The contracts of acceptance and indorsement, like that of the drawer, are only complete upon delivery, so that it is the delivery in each case which determines the place of the contract : Chapman v. Cottrell, 34 L. J. Ex. 186 (1865). A bill is presumed to have been issued and indorsed at the place where it bears date, and to have been accepted at tb lace at which the drawee is addressed, unless there is (thing on it to show that the contract was in fact made 1 tme other place. The rule in this sub-section that the validity of a bill as regards the form of the bill itself, or of the acceptance or indorsement, is to be governed in each case by the lex I 'ontractiis is one that is generally recognized. 882 BILLS OF EXCHANGE § 71. 3^6 01' ^^^^ point, Story on the Conflict of Laws, sees. 238, 260, 262; We8tlake^§ 228; 1 Daniel, §§ 867, 868. "Acts and deeds made out Qf Lower Canada are valid if made and passed according to the forms required by the law of the country where they were passed or made": C. C. Art. 7. See also Guepratte v. Young, 4 DeG. & Sm. at p. 228 (1861). A bill drawn in Michigan, where a verbal aco«ptance is not recognized, upon a person in Illinois where suoh an acceptance is binding, may be validly accepted by parol : Mason v. Dousay, 35 111. 424 (1864) ; Bissell v. Lewis, 4 Mich. 450 (1857). A bill drawn in Illinois upon a person in Missouri, where a verbal acceptance is not legal, and verbally accepted by the drawer in Illinois, binds him : Scudder v. Union National Bank, 91 U. S. (1 Otto) 406 (1875). It is doubtful how far the principle of such decisions would be law under the Act. The rule in the present clause is " subject to the provisions i f this Act." Section 17 provided that an acceptance is invalid unless, it is written on the bill and signed by the drawee. See the notes and cases under clause (b), below. Iii Proviso. Bill not stamped. Provided that — (1) Where a bill is issued out of Canada, it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue ; Imp. Act, s. 72 (1) (a). This proviso adopts the well established rule of the common law that no country will reg'\rd or enforce the revenue laws of another country. See Story, sees. 245, 257 ; Boucher v. F^awson, Cas. temp. Hard. 89, 194 (1784) ; Hol- man v. Johnson, Cowp. 341 (1776) ; Biggs v. Law«'ence, 8 •"1 CONFLICT OF LAWS. 383 C8. 238, "Acts iralid if by the made": . & Sm. itance is Buoh an ly parol : Lewis, 4 !^isBOuri, verbally cudder v. 5). decisions a present I Section es'u it is w. da, it is jtamped f issue; of the force the S45,267; |4); Hol- ence, 3 T. R. 454 (1789) ; Ligbtfoot v. Tennant, 1 B. & P. 551, 657 § 71. (1796) ; Plauche v. Fletcher, 1 Dougl. 251 (1779) ; James — V. Catherwood, 3 D. & R. 190 (1823); Wynne v. Jackson, 2 Eu8S. 351 (1826); Ludlow v. Van Rensselaer, 1 Johns. (N. Y ) 94 (1806). The doctrine of Bristow v. Sequeville, 5 Ex. 275 (1850), that where the want of a stamp not only rendered a bill inadmissible in evidence but absolutely void in the foreign country where drawn, it would be held void in England is not recognized in the Act, as regards bills drawn in one country and negotiated or paysble in another. (2) Where a bill, issued out of Canada, con- ^°][«'8j^j^j forms, as regards requisites in form, to the law of**^*"''" Canada, it may, for the purpose of enforcing pay- ment thereof, be treated as valid as between all persons who negotiate, hold or become parties to it in Canada: Imp. Act, s. 72 (1) {h). Bills of exchange were drawn in France by a domiciled Frenchman in the French language in English form on an English company, who duly accepted them. The drawer indorsed the bills and sent them to an Englishman in Eng- land. It was held that the acceptor could not dispute the negotiability of the bills by reason of the indorsements being invalid according to French law, when they would be valid indorsements according to the law of England : re Marseilles Extension Ry. & L. Co., 30 Ch. D. 598 (1885). Interpreta- tion hy lex Imi con- {b.) Subject to the provisions of this Act, thetumTJ interpretation of the drawing, indorsement, accep- <»•<««"'» tance or acceptance supra protest of a bill, is determined by the law of the place where such contract is made: Imp. Act, s. 72 (2). The provisions of the Act to which this clause is subject lire the succeeding clauses of this section, and section 53. 884 BILLS OF EXCHANGE § 71. "Interpretation'' is not defined in the Act. Is it to be taken in a narrow sense and confined simply to the con- What is l.fX tiK-i tiiiliitiiiniK interprotii- stnictioH ot' the drawing, indorsement or acceptance as the case may be '? Or does it also include the nature and effect of these respective contracts, and the rights, obliga- tions and liabilities of the parties who enter into them? In Alcock V. Smith, 7 T. L. R. at p. 752 (1891), Romer, J., says that he understands "interpretation" here to mean "legal effect," and he held that the indorsement of an English inland bill in Norway was governed by Norwegian law. This decision was affirmed in appeal. See No. 13 below. The word "form" in clause (a) of this section, and "interpretation" in the present clause may perhaps be used in the same sense as in the heading ^to sections 3 to 21 ot the Act. If so, this would favor giving them the wider meaning. ^^ . It has been generally recognizel^as {k rule of interna- tional law that where a contract is entte^ed into in one place to be performed in another, it is to 'be governed as to its validity, aature and obligation b^ the law of the place of performance, in accordance with the maxim : con- traxisse unnHqnisque in co loco intelliiiitur, in quo, u4 solreret, sc obliffavit. See Story on Conflict of Laws, sees. 280, 281 ; Westlake, § 229; 3 Burge, Col. Law, pp. 771, 772; Robin- son V. Bland, 2 Burr. 1078 (1760); Fergusson v. Fyfe, 8 CI. .^- F. 121 (1840); Andrews v. Pond, 13 Pet. (U. S.' (55 (1839); C. C. Art. 8. To give a wide meaning to the word " interpretation ' indoiBera. j^ this sectiou would not interferft with the prmciple just mentioned, so far as the drawer and indorsers of a bill are concerned. When a bill is drawn on a person in a foreign country or made payable there, what the drawer and indorsers agree to do is not to pay the bill in the foreign country, but they As li> drawer aud CONFLICT OF LAWS. 885 it to be ,he con- e as the are and , obliga- them? OMER, J.i to mean at of an orwegian jB No. IB tion, and jrhaps be )ns3to21 the wider )f inteina- to in one )verned as aw of tlie ixim : <"<>»- j<^ solver ct, 280, 281 ; 72; Robin- n V. Fyfe, et. (U. S.,' pretation' nciple just f a bill are \ga country prsers agree \y, but they guarantee that it will be accepted and paid by the drawee, § yj, and if he does not do so, they will, if duly notified, re-im- burse the holder at the place where they have respectively drawn or indorsed the bill. The contract of the acceptor, on the other band, is to pay at the place of payment. If it is payable generally, or in the place where it is accepted, then no difficulty arises as to the application of the present clause ; the law of the place of acceptance will govern. But if the bill is payable in a different country from that in which it is accepted, does the present clause apply? For instance, if a bill drawn in Montreal is accepted in Toronto and payable in New York, is the liability of the acceptor to be determined by the law of Canada ? If so, the rule above quoted as to the law of the place of payment or performance of the contract is overridden by the Act. Surge suggests (vol. 3, p. 771) that the placft of perform- ance is lictione juris the locus contractus; and Westlake (p. 254) that the law of the place of fulfilment is really the law of that jurisdiction which would be the forum contractus according to true Roman principles. Byles says (p. 381), "where a contract is made in one country to be performed in another, the country where the contract is to be per- formed is deemed the country in which it is made. " This, however, does not seem to be a satisfactory solution of the difficulty. Westlake, in discussing this clause of the Imperial Act, which is identical with our own, says, § 229, "The obliga- tion incurred by accepting a bill of exchange or making a promissory note, is measured by the law of the place where it is payable." There is no attempt made to harmonize this with the rule laid down in the Act, nor ip attention called to the apparent discrepancy, or to the fact that m the Act there appears to be a clear line drawn between the m'c.b.e.a. — 25 886 BILLS OF EXCHANOE § 71. ^^^ o^ ^^3 place of the contract, and that of the place where the bill is payable. The enactment of clauses (c) and (e) of this section relating to presentment, protest and the due date of bills, apparently as exceptions to the rule in the present clause, would seem to suggest that in other respects the law of the place of contract is to govern. A literal rendering of the present clause taken in con- nection with the introductory clause of the section would scarcely seem to cover the case of a promissory note made in one place and payable in another, but section 88 may l)e wide enough to authorize the necessarv modifications. T ^„^ ' a ILLUSTRATIONS. 1. Where a note, made and payable in Quebec was sued upon in Ontario, and a defence of no consideration valid in Ontario was set up, plaintiflf who simply joined issued could not sliow that tlie consideration was valid by the law of Quebec. He should have replied that it was f?overned by Quebec law and have proved it like any other fact : Hope v. Caldwell, 21 U. C. C. P. 241 (If^Tl) ; Robertson v. Caldwell, 81 U. C. Q. B. 402 (1871). See IJenliam v. Lord Mornington, 8 C. li. 188 (1840). 2. A note payable in the State of New York was signed by u tirni and indorsed there by one of the partners and by two other persons tor the accommodation of the firm. It was then taken by another partner to Canada and negotiated there. Held, that it was a Canada contract: Cloyes v. Chapman, 27 U. C. C. P. 22 (1H70). See also Gay v. Raincy, Si) 111. 221 (1H7H) ; Ikll v. Packard, (J9 Me. 105 (1879). a. Defendant, domicil in Ontario, while in New York, drew a bill in favor of plaintift" upon a person in Ontario, who refused acceptance. Defendant, by drawing the bill, in effect jj:uaranteed its acceptance and payment in Ontario, and in f ' '"''""''"" ill a foreij^n conntry, tlie indorse/nent shall, as ref^ards the payer, he interpreted aecordin^^ to the law of Canada. Imp. Act, s. 7'2 (*2). Before the Imperial x\ct of 1K82 the principle of this proviso was recognized in both England and Scotland, not only as to indorsement, but also as to transfer by delivery. ILLI'STUATIONS. 1. A promissory note, made and payble in England to bearer, is transferred by delivery in France where such transfer gives no title. Held, that the holder can recover : De la Chaumette V. Bank of England, 2 B. & Ad. 885 (1881). CONFLICT OF LAW8. 889 alian and no action o defence an action ere exam. law. The This was (Igium was law it was nent given V. Ay ton, 7 lul overdue, ian hiw the it free from Norwegian ehing to the ^t maturity : to appear indorsed sluill, as in«j[ to tho lipli' of this |olhiud, not by delivery. lud to bearer, lansfer gives Chaumette 2. A imte made and payable in Scotland in favor of a person & ni and not to his order or bearer being negotiable by the law of Scotland, was indorsed in England, when such a bill was not negotiable there. Held, that it was a valid negotiation : Rob- ertson V. Bendekin, 1 Ross, Scotch L. C. 824 (1843). H. A bill of exchange was drawn, accepted and payable in England. It was indorsed in France in proper English form, but in one which would not by French law give the indorser the right to sue in his own name. Held, that the indorsee could recover from the acceptor in England : Lebel v. Tucker, L. R. H (}. IJ. 77 (1H()7). {(•) The duties of the holder with respect to d^»^'«j; <•' presentinent for acceptance or payment and the necessity for or suliiciency of a protest or notice of dishonor, or otherwise, are determined hy the hiw of the phice where the act is done or the bill is dishonored. Imp. Act, s. 72 (8). This is one of the provisions to which the rule laid down in clause (/>) ante is subject. ILLUSTRATIONS. 1. A bill is payable in Buffalo. Presentment, etc., are gov- erned by the law in force there. In the absence of proof of that law, it will be presumed to be the same as here, and no present- , ment being proved or notice of dishonor, drawer and indorsers are not liable : Buffalo Bank v. Truscott, 1 Rob. &, Jos. Dig. 495 (1838). See Howard v. Sabourin, 5 L. C. R. 46 (1854); Allen V. McNaughton 9 N. B. (4 Allen) 234 (1868). 2. Defendant indorsed in England to plaintiff a bill payable in Paris. Plaintiff indorsed to a Frenchman, who, on dishonor, had the bill protested and defendant notified according to French law. Held, that defendant was duly notified and was liable to plaintiff: Hirschfield v. Smith, L. B. 1 C. P. 840 (1866); Rothschild v. Currie, 1 Q. B. 43 (1841). • ii w 890 §71. Bill in foreign currency. II' Due date. BILLS OF EXCHANGE 8. A bill drawn in England and payable in Spain is indorsed -in England by defendant to plaintiff, who indorses it to M. in Spain. It is dishonored by non-acceptance, and twelve days later M. notifies plaintiff, who at once notifies defendant. The law of Spain does not require notice of non-acceptance. Defen- dant is liable to plaintiff: Home v. Bouquette, 8 Q. B. D. 514 (1878). (d.) Where a bill is drawn out of but payable in Canada, and the sum payable is not expressed in the currency of Canada, the amount shall, in the absence of some express stipulation, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is pay- able. Imp. Act, 8. 72 (4). This is the rule applied to the case of bills disliouored abroad : section 57 (8) (6.). And the same rule governs where bills payable abroad in a foreign currency are sued upon in Canada. The holder is entitled to recover the amount according to the rate of exchange on the day of maturity or dishonor with interest thereon. (e.) Where a bill is drawn in one country and is payable in another, the due date thereof is deter- mined according to the law of the place where it is payable. Imp. Act, b. 72 (5). This is one of the provisions to which the rule laid down in clause (b) ante, is subject. !^ ! ILLUSTRATIONS. 1. A note drawn in Montreal was made payable in New York. The third day of grace fell on Sunday. The note was protested on Saturday in accordance with the law of New York. CONFLICT OF LAWS. 391 ndorsed to M. in [ve days it. The Defen- able in ssed in in the culated b drafts is pay- shouored > govern* are sued over t'ue |ie day of and is deter- lere it is lule laid in New 1 note was lew York. Held, to be regular : Bank of America v. Copland, 4 L. N. 154 ^ n^ (1881). - 2. A bill is drawn in England payable in Paris three months after date. Before it matures, a moratory law is passed in France, in consequence of war, postponing the maturity of all current bills for a month. The bill is subject to this French law : Rouquette v. Overmann, L. R. 10 Q. B. 525 (1875). Capacity. — Any person who has capacity to contract may incur liability as party to a bill : section 22. Where there is a conflict of different laws on this question, the general rule, as stated ante pp. 125-128, is that it is gov- erned by the law of the domicile. The Act has no pro- vision on this question of conflict unless such a wide mean- ing should be given to the word " interpretation " in clause (6) of this section, as to make it include the capacity of the parties, in which case the law of the place where the con- tract is made would govern. Discharge. — The general rule is that a defence or dis- charge, good by the law of the place where the contract is made or is to be performed, is to be held of equal validity in every place where the question may come to be litigated. In England and America the same rule has been adopted, and acted on with a most liberal justice : Story on Conflict of Laws, sees. 831, 332. This rule would apply not only to the discharge of a bill, but also to the discharge of any party to it. The latter point arises most frequently with reference to discharges in bankruptcy. Patter v. Brown, 5 East, 124, 130 (1804); Smith v. Smith, 2 Johns. (N. Y.) 235 (1807); Blanchard v. Russell, 13 Mass. 1 (1816). When, however, a bill was drawn, accepted and pay- able in England, the bankruptcy and discharge of the acceptor in Australia did not relieve him from the bill : Hartley v. Hodges, 30 L. J. Q. B. 852 (1861). Where an Austrian bill was discharged by a partial payment I 892 M\ li»; w' it 'I §71. Kvidence of fureiti'ii proteHt. niLLB OP EXCHANOK there, it was held good in England when it would not have had that effect if paid there: Ralli v. Dennistown, G Ex. at p. 496 (1861). If a bill is discharged by compen- sation in Demerara, it will be held discharged in England where compensation would not have this effect : Allen v. Kemble, 6 Moore P. C. 314 (1848). So a bill discharged in Quebec by either compensation or prescription, would be held to be discharged in other countries where these would not operate as dischaiges as to bills made or payable there. See Huber v. Steiner, 2 Bing. N. C. 211 (1835) ; Harris v. Quine, L. R. 4 Q. B. 653 (1869); Story, sec. 582. (/.) If a bill or note, presented for Hcceptance, or payable out of Canada, is protested for non- acceptance or non-payment, a notarial copy of the protest and of the notice of dishonor, and a notarial certificate of the service of such notice, shall be received in {ill courts, as prhna facie evidence of such protest, notice and service. This clause is not in the Imperial Act. Con. Stat. C. (1859) c. 57 had a similar provision, but it applied only to protests in Upper or Lower Canada : Griffin v. Judson, 12 U. C. C. P. 430 (1862). See also Ewing v. Cameron, 6 U. C. 0. S. 541 (1842) ; Ontario Bank v. Burke, 10 Ont. P. R. 661 (1885). ; Lex loci contractus.— The effect of the Act will pro- bably be to make the n,pplication of the law of the place of the contract more general, especially if clause (b) of this section is liberally construed. Lex loci solutionis.— The law of the place of payment is applied in the Act with respect to presentment, protest, etc., by clause (c), and to the due date of bills by clause (e). See also what is said ante p. 884. It has been laid down CONFLICT OF LAW8. 893 that interest on a bill dishonoured Ity non-payment is § 7]^^ determined by the law of the place of payment : Cooper v. ~f Waldegrave, 2 Beav. 282 (1840). See also re Gillespie, ex 1 parte liobarts, 18 Q. B. D. 286 (1886) ; re Commercial Bank 1 of South Australia, 36 Ch. 1). 522 (1887) ; section 67. \ Lex fori — The law of the place as to where the action is brought or proceedings are taken governs as to all matters belonging to the remedy or mode of enforcement: De la Vega v. Vianna, 1 B. i't Ad. 2S4 (1830). Under this head are comprised : — 1. The limitation of actions, subject to the operation of the law in places like Quebec when it operates as a dis- charge: Don V. Lippmann, 5 CI. A: F. 1 (1837); British Linen Co. v. Drummond, 10 B. & C. 903 (1830); Fergusson V. Fyffe, 8 CI. & F. at p. 140 (1841); Pardo v. Bingham, L. R. 4 Ch. 735 (1869); Alliance Bank v. Carey, 5 C. P. I). 429 (1880). See ante pp. 341-9. 2. Set-off, subject to the same limitations. See ante p. 389. 3. The admission of evidence : Yates v. Thompson, 3 CI. & F. 644 (1835) ; Bain v. Proprietors W. & F. Ry. Co., 1 (1850) ; Leroux v. Brown, 12 C. B. 801 (1862) ; Williams V. Wheeler, 8 C. B. N. S. at p. 316 (1860). \'4 ''i 'V i ; .1 f f'-V, .'s. Enslitb and Can- adian law differ. e^m-. 1 ,, m- PART III. CHEQUES ON A BANK. The Third Part of the Act which is devoted to cheques consists of ten sections, 72 to 81, inclusive. The first three of these relate to cheques generally, the remaining seven to crossed cheques. They are taken from the Imperial Act with the single change that the word "bank" has been substituted for "banker, " for the reason mentioned ante p. 25. Although this part of the two Acts is thus substantially identical, there are two marked differences regarding cheques between the law and the practice in England and in Canada. The first arises from the omission of section 60 of the Imperial Act from the Canadian bill as already mentioned. It provides in effect that when a bill payable to order on demand is drawn on a banker, and he pays it in good faith in the ordinary course of business, he is not responsible although the indorsements are forged or un- authorized. As a cheque is a bill of exchange drawn on a banker payable on demand, and that section applies to cheques, the making of a cheque payable to order is in England little protection. The crossing of cheques has consequently become more general. The other great difference arises from the fact that the practice of getting cheques marked or accepted, bo general in Canada, is almost unknown in England. Byles says, p. 82, that cheques are not accepted, and that to issue CHEQUES ON A BANK. 395 them accepted would probably be an infringement of the § 72, Bank Charter Acts. A cheque drawn upon a private banker would not be ti cheque within the meaning of the Act, and would not bo subject to the special rules contained in this part of the Act applicable to cheques, such as crossing and the like. They would be simply bills of exchange payable on demand and subject to such provisions of the Act as apply to thc^e instruments. 72. A cheque is a bill of exchange drawn ou*^^^^»^ a bank, payable on demand. Imp. Act, s. 73. Reading this definition in connection with that of a bill of exchange in section 3, a cheque is an "unconditional order in writing addressed by a person to a bank, signed by the person giving it, requiring the bank to pay on demand a sum certain in money, to, or to the order of a specified person, or to bearer. " As to what are bills payable on demand, see section 10. According to the definition in section 2 (c), "bank" means "an incorporated bank or savings bank carrying on business in Canada"; that is, one of the 36 banks men- tioned in Schedule A to the Bank Act, 53 Vict. c. 31 ; or the City and District Savings Bank of Montreal, or La Caisse d'Economie de Notre Dame de Quebec : 53 Vict. C.32. In Quebec, under the Code, a cheque might be drawn upon a private banker as well as upon an incorporated bank: Art. 2349. And this was the law before the Act in the other provinces. A cheque should be addressed to the bank by its proper Form or 1 . .1 I cheque. corporate name, and not to the "cashier, " manager ' or "agent." An instrument addressed to one of these would not, properly speaking, be a cheque within the meaning of 1^ 996 CHEQUES ON A BANK. I*' § 72. tl>c ^ct, and if marked or accepted it might be claimed that the bank was not liable, as it would net be the drawee of the instrument and consequently could not become liable by acceptance. The words "on demand "need not be on the cheque, as they are understood when no time for payruent is ex- pressed : st'ction 10 (h). A cheque may be antedated or postdated : section 18, 8-8. 2 ; Wood V. Stephenson, 16 U. C. Q. B. 419 (1858) ; And the fact that it is postdated is not an irregularity: Hitchcock V. Edwards, 60 L. T. N. S G36 (1889;; Car- penter v. Street, 6 T. L. R. 410 (1890). But a clicque dnted seven days after delivery is in substance a bill of ex'^hange at seven days' date : Forster v. Mackreth, li. R. 2 Kx. 103 (1867). In the United States there has been a conflict as to whether a cheque may be made payable on a day (sub- sequent to its date. The weight of authority is in favor of what is law under our Act, that such an instrument is not a cheque, and has three days' grace. Seo Bowen V. Newell, 13 N. Y. 290 (1865^ ; Morrison v. Bailey, 6 Ohio St. 13 (1855); Harrison v. Nicollet Bank, 41 Minn. 488 (1889) ; 2 Daniel, § 1574. But eee contru, re Brown, 2 Story, C. C. 502 (1843) ; Westminster Bank v. Wheaton, 4 R. I, 30 (1866) ; Champion v. Gordon, 70 Penn. St. 474 (1872) ; Way v. Towle, 45 Alb. L. J. 177 S. C. Mass. (1892). The Act does not nake it a part of the definition that the drawer should be a customer of the bank; but if a person gets goods or money on the strength of a cheque where he has no account he is guilty of obtaining the goods or money by false pretences, and is liable to three years' imprisonment: R. S. C. c. 164, s. 77; Rex v. Jackson, 3 Camp. 870 (1814); Reg. v. Hazelton, L. R. 2 C. C. 134(1874). :>■ hr i, I PKOVI8ION8 AS TO BILLS APPLY. 397 lairoed drawee e liable clieque, t is ex- tion 13, (1858) ; [ularity : D); Car- , clicque a bill of h, L. r*. let as to day t?ub- j in favor Btrument Bowen ailey, 5 I Minn. Brown, heaton, St. 474 (1892). ion that but if a cheque he goods e years' Jackson , 2 C. C. 2. Except as otherwise provided in this part, § 72. the provisions of this Act Hpplical)le to a hill of'provisionr (exchange payable on demand apply to a t'lle(ln(^*{^j>>.vJo Imp. Act, s. 78. The exceptions are, (1) that failure to present a checjue for payment within a reasonable time does not discharge the drawer, except in so far as he is damaged thereby : sec- tion 73 ; (2) that the bank should not pay after notice of the customer'^ death : section 74; and (3) the provisions relating to crossed cheques : sections 75 to 81, inclusive. The chief provisions of the Act relating to bills payable on demand, which also apply to cheques, are the following: (1) There are no days of grace: section 14; (2) when they appear on their face to have been in circulation for an unreasonable length of time they are deemed to be overdue, so ns to prevent a holder from accpiiring them free from defects of litle : section 30, s-s. 3; (3) they must be presented for payment within a reasonable time after indorsement to charge an indorser : section 45, s-s. 2 (/>). A cheque being a bill of exchange does not operate a-. ""•>« ->' f(ir the payment thereof, and until it accepts a cheque the bank is not liable on it : section 53. The holder of an unaccepted cheque, consequently, cannot sue the bank upon it, except under the circumstances mentioned in sec- tion 73 (r). Under the Code it was held in (Quebec that a cheque waf, an assignment of so much of the drawer's funds: ^larler v. Molsons Bank, 23 L. C. J. 293 (1879). This is the law in Scotland : section 53, s-s. 2 of Lhe Imperial Act; und also in France : Nouguier, !{§ 392, 431. 998 §72. CHEQUES ON A BANK. ILLUSTRATIONS. 1 . The production of a cheque is not even prima facie evidence of money lent by the drawer: Foster v. Fraser; Rob. & Jos. Dig. 662 (1840); Nichols v. Ryan, 2 R. L. Ill (1868); Dufresne V. St. Louis, M. L. R. 4 S. C. 310 (1888). A cheque may be postdated, and is then payable on the day of its date without grace: Wood v. Stephenson, 10 U. C. Q. B. 419 (1868). 2. Where plaintiffs accepted from defendant a cheque of a third party in part payment of goods, and presented it at the bank the next day, and also applied several times to the drawer, but did not notify the defendant for a week, held, that the latter was not liable : Redpath v. Kdfage, 16 U. C. Q. B. 488 (1858). 8. A cheque operates as payment until it has been dishonored. It may be received either as conditional or as absolute payment : Hughes V. Canada Permanent L. & S. S., 89 V. C. Q. B. 221 (1876). 4. Plaintiff deposited in defendant's bank the cheque of ii tiiird party on another bank in the same town. Defendants credited it in his pass-book as cash and stamped it as their pro- perty. They presented it the next business day when it was dishonored. If they had presented it the same day it would have been paid. Held, that the bank was not liable : Owens v. Quebec Bank, .SOU. C. Q. B. 382 (1870). .'). The Bank of Montreal allowed a private banker at Lon don to put on his cheques, "payable at Bank of Montreal, Toronto, at par." HeM. that these words simply meant that tiiere would be no charge for cashing the cheques, and not that tl'e Bank of Montreal would pay them if there were no funds of the drawer to meet them : liose-Belford Printing Co. v. Bank of Montreal. 12 O. R. r,44 (1886). G. Where a bank paid cheques on forged hidorsements, thr receipt, given by the plaintiffs at the end of the month, was at fi v» ILMBTRATIONS. 899 evidence I. & Job. Dufresne 5 may be without ). eque of a it at the e drawer, that the Q. B. 4B8 ishonored. payment : C. Q. B. eijue of a defendants their pro- en it was it would Owens V. ler at Lon- I Montreal, lieant that Id not that lo funds of V. Bank luents, till' Ith, was at most, an acknowledgment that the balance was correct on the § 72. assumption that the cheques had been paid to the proper parties. Where the names of the payees had also been forged on an application for a loan to plaintift's, the cheques were not payable to fictitious payees : Agricultural S. tt L. Association v. Federal Hank, (} A. R. 192 (1«81). 7. The payee of a cheq le took it to the bank on which it was drawn the same day as he received it from the drawer, and had it marked " good," the amount being charged to the drawer's account; but he did not demand payment. The bank suspended payment that evening, and the next day the che<;ue was pre- sented for payn.ent and dishonored. Held, that the drawer was discharged from all liability thereon : Boyd v. Nasmith, 17 O. R. 40 (1888); Merchants' Bank v. State Bank. 10 Wall {V. S.) d':" (1870) ; First National Bank of .Jersey City v. Leach, 52 N. i . .'. n, i . 878). ■:. A bank held liable to the holder of a marked cheque : Banque Nationale v. City Bank, 17 L. C. J. 197 (1878); even when marked good only on a future day by the president and cashier: Exchange Bank v. lUnqm du Peuple, M. L. R. 8 Q. B. 282 (188(5). Items of claim older than a cheque cannot properly be set up in compensation against it: Dorion v. Dorion, i L. N. ISO (1882). 9. A cheque should be presented the day after delivery and notice of dishonor given to charge the iiidorser : Lord v. Hunter, (5 L. N. 810(1888). 10. A bank acting as agent for another bank is not authori/cd, ill the absence of an express agreement, to caHh a cheque drawn upon the principal bank, but not accepted l)y it : Maritiuu' Baid< V. Union Bank, M. L. H. I S. V. 241 (1H88). li. A bank lield liable for the amount of a cheque it had lost, which the drawer disputed, although the latter liad hfon 1,'uilty of negligence in not objecting earlier when it was entered in hifl pass book : Fournior v. Union Bank, 2 Stephens' (Jiu-. Dig. 99 (1878). jii J dt 400 0HE(jUB8 ON A BANK. § 72. ^'^' ^^'l'^***' i^" nccount beam interest, it ceaHes on the amount of a cheque drawn on tlie account when the cheque is marked, although the money is not actually drawn out until long after : Wilson V. IkiKiue Ville Marie, « L. N. 71 (1H80). l.M. The initialling of a cheque by the cashier doef^ not amount to an acceptance. A cheque so initialled received by the defendant only a few days before the trial, wlien it was more than four years old, could not be used by him as a set-oiT to the bill of exchange on which he was sue()0, and induced him to indorse his (H.'s) cheque for |»l,000on a bank at N., out of the proceeds of which the debt was to be paid. The two went to a bank at W. to get cash for the clie<|ue. H. alone went into the man- ager's room, and on his return told defendant lie had given the cheque to the manager to forward it to N. for collection. II. in fact retained the che()ue and the same day transferred it to plaintitT foi- value. Held, that defendant wa:4 liable on the che(|ue • .\niold v. Caldwell, 1 Man. L. U. HI (1884). 1'*^. A baiiker paid a cheque where the amount had been raised, but in such a way that it could not be easily detected- He wi's held liable to the customer for the difference l>etween the genuine and the altered cheque : Hall v. Fuller, 5 B. & C. 7oO(lH2<{). I(». When' a ciierjue was so carelessly drawn ao to be easily altered by the holder to a larger sum, so that the bankers, when they paid it, could not distinguish the alteration ; Held, that that the loss must fall on the drawer, ns it was caused by his negligence; Young v. (Irote. 1 Ming. 258 (1H27). 17. Fiiliitg in a blank cheque with a larger smn than that authorized is forgery : Keg. v. Wilson, ,i C. iV K. r)27 (1847). IH. An authority to draw chcqu« s does not necessarily inchule an authority to draw bills : Forster v. Mackreth, L. H. 2 Kx. l(m(;H(57). TRKSENTMENT FOR PAYMENT. 401 amount marked, jg after : ilotfM not eived by vaa more )fr*to tl\e Dank \ . I) indorse proceeds X bank at the man- ffivon the tion. H. erred it to lt> on the uid been detected. D between T) H. k ('. 1)0 easily era, whon Held, tlinl Bfd by his Ithan thill ,1847). L>co88«rilv [th. L. H. 19. A cheque is not an equitable assignment of so much of (^ 1^2. the drawer's funds in the hands of his banker, or of a chose in action : Hopkinson v. Forster, L. R. 10 Eq. 74 (1874) ; Schroeder V. Central Hank, 84 L. T. N. S. 785 (1H70). 73. Subject to the provisions of this Act — (a) Where u checiue is not presented for pay- present- ment within a reasonable time of its issue, andciequejor ' , _ payment. the drawer or the person on whose account it is drawn had the rij,'ht at the time of such present- ment, as between liim and the bank, to have the cheque paid, and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or pei*son is a creditor of such bank to a larger amount than he would have been had such cheque been paid. Imp. Act, s. 74 (1). The provisions of the Acfc to which this section is subject, are those in section 46 relating to excuses for nou-presentment and delay in presentment. As regards the drawer, the etfect of not presenting a cheque for payment within a reasonable time differs from that relating to other bills payable on demand. In the case of the latter the drawer as well as the indorsers are wholly discharged by the failure to present it for payment within a reasonable time : section 45. This part of the Act relating to cheques does not modify the rule as regards the indorsers ; but the present section lays down ii different rule as regards the drawer, who is only dis- charged to the extent to which he actually euffere damage I y the dtday. Chalmers says, p. 247: "This section is new law. It was introduced in the Lords by Loid Bramwell to mitigate M'r.B.E.A. — 2(5 402 CHEtiUES ON A lUNK. 73. ff '! ,. I n «.. R. the rigor of the common law rule. At common law the mere omission to present a che(iue for payment did not discharge tlie drawer, until, at any rate, six years had elapsed, and in this respect the common law appears to be unaltered. But if a cluMiue was not presented within a reasonable time, as defined by the cases, and the drawer si'JTered actual damage by the delay, e.)f., by the failure of the bank, the drawer was absolutely discharged, even though ultimately the bank might pay (say) fifteen shillings in the pound." The section is substantially the law of Quebec before the A(!t, the Code placing the indorsers in the same position :- " If the cheque l)e not presented for pay- ment within a reasonable time, and the bank fail between the delivery ot the cheque and such presentment, the drawer or indorser will be discharged to tiie extent of the loss he suffers thereby": Art. 2352. See also rt' Oulton, 15 N. B. (2 Pugs.) 338 (1874). When the drawer or other person is thus discbarged, the holder is a creditor of the bank to the extent of such discharge : clause («•). Rensoiiabh- (f,] 111 (h'tlTlll illjll'?' whill JS M n'MSOini l)l(' tiiiu>, time. '^ iv^jinl hall hv iiad to llie natuiv ot" the iiistruiiiciit, the iisa^e of trade find of hanks, and the faets of the particular case. Imp. Act, s. 74 ('!). The following are said to emboKly th* miea as to what is a reasonable time for the prestntment of che(p»es in England : — 1. if the person who reet'ives a cheque and the banker on wliom it is drawn are in the same place, the chetiue must, in the absence ol special circumstances, be presented for payment on th«' day after it is received : .\lexander v. liurcbtield, 7 M. k (ir. 10(}1 (1H42) ; Kirth v. JJrooks, 4 L. T. N. S. 4(}7 (1861). PRESKNTMBNT FOR PAYMENT. 403 i\w the J id not irs had >ears to vitliin a drawer ! faiUire cd, even shillings ! law of irs in the for pay- between lent, the it of the c Oulton, Bcliarged, , of HlU'h (' time, •miu'iit, fiicts of to what ie- » , drawer or person is discharged, shall he a creditor/''* ''*"''• in lieu of such drawer or person, of such hank to the extent of such discharge, and entitled to re- cover the amount from it. Imp. Act, s. 74 (2) (8). This is, to a certain extent, a modification of the rule in section 63. In England it introduced partially the Scotch principle of sub-section 2 of that Hection, and in Canada it recognizes in this particular case the principle laid down in Quebec in Marler v. Molcons Bank, 23 L. C. .J. 293 (1879). These countries adopted it from the civil law. 74. The duty and authority of a bank to P'>.V |,',7,;^';',{i',J,*'" a cheque drawn on it hy its customer are termiuiited *"'"""■"" by- 404 §74. Batik MyliiK OlIMIUKH, bills, He. t • CHEQUR8 ON A BANK. (a) Countermand of payment ; (h) Notice of the customer's death. Imp. Act. 8. 75. A bank having sufficient funds of the drawer of a cheque in its hands is bound to pay it, and in case of refusal is liable to an action of damages : Marzetti v. Williams, 1 B. & A. 415 (1830) ; Foley v. Hill, 2 H. L. Cas. 28 (1848) ; Rolin V. Stewart, 14 G. B. 696 (1864). It may also, with- out special instructions, pay any bills or notes, of which the customer is acceptor or maker, and which are payable at the bank : Jones v. Bank of Montreal, 29 U. C. Q. B. 448 (1869) ; Kyraer v. Laurie, 18 L. J. Q. B. 218 (1849) ; Bobarts v. Tucker, 16 Q. B. 560 (1861); Vagliano v. Bank of England, 1891 A. C. 107. Cheques are payable in the order in which they are presented, irrespective of their dates, provided the date in not subsequent to the prenentment : Kilsby v. WilliamR, 5 B. \- A. 819 (1822). Where a customer keeps his account at one branch of a bank, other branches are not bound to honor his cheques : Woodland v. Fear, 7 E. \' B. 519 (1857). But if he has accounts in two or more branches the bank may combine them against him, p-ovided they are all in the same right : (larnett v. McKewan, L. R. 8 Ex. 10 (1872) ; Prince v. (hiental Bank, 3 .Apr. Cas. 326 (1878). Entries made in a customer's pass book are prima facie evidence against the bank : Commercial Bank v. Rhind, 1 Macq. II. L. 643 (1860) ; Cowper's Trustees v. National Bunk of Scotland, 16 Sess. Cas. 412 (1889). Countermand.— A customer may stop payment of a cheque before it is accepted, but not after: Cohen v. Hale, 8 Q. B. I>. 371 (1878); McLean v. Clydesdale Bank, 9 App. Cas. 95 (1HH3). I I'AYMKNT STOPPED. 406 Act. sheque isal is lliamB, 1848) ; >, with- which sayable 3. Q. B. (1840) ; r. Bank liey are I date ia 'ilUams, anch of [heques : he has ombine e right : rince v. \ma facie Rhind, [ational mt of a iv. Hale, 1, 9 App. It has also been hehl that a bank is not bound to iionor a customer's cheques after a garnishee order is served on it, even although the balance exceed the judgment : Rogers V. Whitoly, 38 Q. B. I>. at p. 238 (1889). Death of customer.— Payment after the death but before notice is valid : Rogerson v. Ladbroke, 1 Ring. 9B (1822K It has been held in England that after the death of a partner, the surviving partner mayMraw cheques upon the partnership accornt : Backhouse v Charlton, 8 Ch. D. 444 (1878). In C^uebec tbi leath ot a partner terminates the partnership, and also the right of the survivors to act for the firm, in the absence of a special agreement to the contrary : C. C. 1892, 1897. A cheque given as a donatio mortis cnma must be pre* sented or negotiated before notice of the death of the donor in order to charge his estate : Hewitt v. Kaye, L. R. 6 Eq. 198 (1868) ; Beak v. Beak, L. R. 13 Eq. 489 (1872); Rolls V. Pearce, 5 Ch. 1). 730 (1877). But see Colville v. Flana- gan, 8 L. C. J. 223 (1864); and Clement v. Cheeseman, 27 Ch. D. 631 (1884). CUOSSKI) ('HEi^rKS. Sections 75 to 81, inclusive, treat of crossed cheiiues. They are copied from the Imperial Act, with the substitution of "bank" for " banker," as private bankers are not recog- nized by the Canadian Act. The practice of crossing cheques did not prevail in Canada before the Act, and it is nut likely to be generally adopted now, as the drawer can protect himself by making a cheque payable to order, since our Parliament refused to adopt section 60 of the Imperial Act, which relieves a bank from responsibility for the genuineness or authorization of the indorsement on cheques drawn upon it. 74. 406 CHEQUES ON A HANK. »„''!' w. • ■)-■ )^ 75, The practice is a comparatively modern one in England, ~and is another illustration of the elasticity of the law mer- chant by which a custom obtains for itself judicial sanction or legislative recognition. From the report of Stewart v. Lee, 1 M. & M. at p. 161 (1828), it would appear that the effect of crossing was not then fully settled. It is described in Boddington v. Schleuker, 4 B. Jlc Ad. 762 (1833); and in Bellamy v. Marjoribanks, 7 Ex. at p. 402 (1852). Baron Parke there gives a history of its origin and growth. The practice originated at the London clearing house,' the clerks of the diHerent bankers who did business there having been accustomed to write across the cheques the names of their employers, so as to enable the clearing- bouse clerks to make up the accounts. It afterwards became a common practice to cross cheques which were not intended to go through the clearing house at all. Baron Parke held that this had nothing to do with the restriction of negotiability, and formed no part of the cheque, and in noway altered its effect; but was a protection and safe- guard to the owner, as, if a banker paid it otherwise than through another banker, the circumstance of his so paying would be strong evidence of negligence in an action against him. See also Carlon v. Ireland, 5 E. \' B. 765 (1856). The first Imperial Statute recognizing crossings was passed in 1856. In Simmonds v. Taylor, 2 C. B. N. 8. 628 (1857), it was held that the crossing was not a material part of the cheque and a holder might erase it. The Act of 1858 was passed to overcome the effect of this decision. In Smith v. Union Bank of London, 1 Q. B. I). 31 (1875) a cheque crossed to a certain bank was stolen, and coming into the hands of a bona Jidc holder, he got it cashed through hits own bank. The Court held that the Act of 1858 did not affect the negotiability of the cheque which had been indorsed by the payee. In Bobbett v. Pinkett, 1 Ex. D- CROSSED (HEQIKK. 107 y(»8 (1876), where the indorsement of the payte was forj^ed, 5$ 75, the banker was held hable for paying it otherwise than throngh the hanker to whom it was specially indorsed. Then came the Act of 1876, which introduced the " not nojj;otiable" crossinfj;, which has hi en substantially repro- dui'ied in the Act of 1882 and the present Act. AltbouRli the crossiuR of cheques was not recognized in practice or in legislation in Canada, yet the Imperial Act nmking the obliteration or alteration of the crossing a fi imy was copied into our Forgery .\ct of 1861), and is now section 31 of H. S. C. c. 1(55. Even the words "and corn- puny" and "banker," are retained. The practice of crossing cheejucs has not been adopted in the Tnited States. 75. Wlicrc a clu'iiiu' bears across its face an "'"'"'• addition of— ''"" ' (ii) Tilt' word " bank " bctwrcn two paralbd transverse lines, either with or without the words • not negotiable ; " or — (/>) Two parallel transverse lines simply, eitlu>i' with or without the woi'ds '* not ne^otiiihle ; " That addition constitutes a crossing, and the cluMpie is crossed ,'.,'enerally : 2. AVhere a cluuiue hears across its face anHi'"l ^^ VI o / 7 /A Photographic Sciences Corporation 23 WEST MAIN STREET ^ WEBSTER, NY. 14580 (716) 872-4503 :*'^% ^ M^^ i/x r«f ^8 CHEQUES ON A BANK. § 75, incorporated bank be crossed in favor of a private banker^ ~ or if crossed generally, be presented through him. See ante, pp. 25, 26. . . Where the drawer of a cheque made it payable to the order of M., and crossed it " Account of M., National Bank " and gave it to M. who indorsed it to the National Bank, it was held that the bank could recover from the drawer, for these words, even assuming that section 8 applies to cheques, do not prohibit transfer or indicate an intention that it should not be transferred ; and that pro- bably the only way to make a cheque not transferable would be to comply with the provisions of this section : National Bank v. Silke, :18911 1 Q. B. 435. Crossing by drawer. 76. A cheque may be crossed generally or specially by the drawer : SclaL °* '^' Where a cheque is uncrossed, the holder may cross it generally or specially : May be varied. Words may be added. lle-croBsing for collec- tion. Crossing by bank. S. Where a cheque is crossed generally, the holder may cross it specially : 4. Where a cheque is crossed generally or specially, the holder may add the words ^'not nego- tiable : " 5. Where a cheque is crossed specially the bank to which it is crossed may again cross it specially, to another bank for collection : 6. Where an uncrossed cheque, or a cheque crossed generally, is sent to a bank for collection, it may cross it specially to itself: Imp. Act, s. 77. For a definition of " holder," see ante pp. 27-29: and of "bank," pp. 25, 26. banker^ im. See le to the National National from the section 8 dicate an that pro- ble would National rally or 3 holder lly, the ■rally or ;)t nego- ally the cross it cheque llection, t, s. 77. '-29: and CROSSED CHEQUK8. 401) 7. A crossed cheque may be reopened or uii- § 76. crossed by the drawer writing between the trans- umuossinf? verse hues, and niitialhng the same, the words t=i>e<)"e. " pay cash." This is not in the Imperial Act, but is in accordance with English custom : Chalmers, p. £56. It is the drawer alone who can obliterate the crossing. See the next sec- tion. 77. A crossing authorized by this Act is a ;^™«^\';;!|^, material part of the cheque ; it shall not be lawful ehequl for any person to obliterate or, except as authorized by this Act, to add to or alter the crossing. Imp. Act, s. 78. A material alteration voids a cheque except as to a party who has made, authorized or assented to it, and except as to indorsers subsequent to the alteration : sec- tion 63. In England an unauthorized obliteration or alteration is forgery : 24-25 Vict. c. 98, ss. 25, 39. This has been copied into our Canadian criminal law, and is now in R. S. C. c. 165, s. 31, but it is the English crossing that is there referred to, and declared to be a felony. That section is not applicable to the crossing authorized by the Canadian Act. 78. Where a cheque is crossed specially to |^^|ti^es^^^'^^ more than one bank, except when crossed to che'^i^ues. another bank as agent for collection, the bank on which it is drawn shall refuse payment thereof: 2. Where the bank on which a checiue so crossed liability i for iiiniro- is drawn, nevertheless pays the same, or pays a^fent."^" cheque crossed generally otherwise than to a bank, «; - 410 CHEQUES ON A BANK. §78. fn A i I'voviso. Alteratidii not anpar- {'iit. Protection to bank and drawer where cheque is crossed. or, if crossed specially, otherwise than to the bank to which it is crossed, or to the bank acting as its agent for collection, it is liable to the true owner of the clie((ue for any loss he sustains owing to the che(|ue having been so paid : Provided, that where a che(]ue is presented for payment which does not at the time of pres<'nt- ment appear to be crossed, or to have had a cross- ing which has been obliterated, or to have been added to or altered otherwise than as authorized by this Act, the bank paying the cheque in good faith and without negligence shall not be respon- sible or incur any liability, nor shall the payment l)e (juestioned by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise tlian as authorized by this Act, and of payment having been made otherwise than to a bank or to the bank to which the checpie is or was crossed, or to the baidv acting as its agent for collection, as tlie case may be. Imp. Act, s. 71). The first clause would prevent the thief or finder of a specially crossed cheque, or any holder subsequent to him from crossing the cheque a second time and so getting paid through another bank. Before acceptance there is no privity between the holder of a cheque and the bank upon which it is drawn: but sub- section 2 gives a remedy to the true owner against a bank which improperly pays a crossed cheque. 79. Where the bank, on which a crossed cheque is drawn, in good faith and without negli- CROSSED CHEQUES. 411 he bank ig as its e owner g to the itecl for present- •d cross- ve been fchorized in good respon- iaj'nient ing been [iterated ise tlian , iiaving he bank ': to the he case ider of a t to him 3 setting le holder hut sub- t a bank •rossed ; negli- gence pays it, if crossed generally, to a bank, or, if § 79. crossed specially, to the bank to v.hich it is crossed, or to a bank acting as its agent for collection, the bank paying the cheque, and if the cheque has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and be placed in the same position as if payment of the che(|ue had been made to the true owner there ^f. Imp. Act, s. 80. This section gives to a bank on which a cheque is drawn [^j'^g'to*^"' the protection, in the case of a crossed cheque, which our J,'^.'^,^'^^*^! l^arliament refused to give it as to demand bills and '='"'''"^' ordinary cheques by striking out of the bill the clause corresponding to section 60 of the Imperial Act. On the other hand, it furnishes to the other parties to a cheque a strong reason for objecting to the crossing of a cheque. If a crossed cheque which has not been made "not negotiable" is lost or stolen before it reaches the hands of the payee, and the bank pays it in good faith and without negligence even upon a forged indorsement, the drawer has no recourse against the bank which has paid or the bank which has collected, but can only look to the guilty party or some subsequent holder. See Ogden v. Benas, L. E. 9 C. P. 513 (1874) ; Patent Safety Gun Cotton Co. V. Wilson, 49 L. J. C. P. 713 (1880); section 81. If it is lost or stolen after reaching the hands of the payee, and is paid in like manner, the drawer is released but the payee, indorsee, or holder who has lost the bill, or from whom it has been stolen, is in the same position as the drawer in the case just mentioned. 80. Where a person takes a crossed cheque ^'r^ssinK^.n which bears on it the words "not negotiable," he^""***""' :t 412 CHEQUES ON A BANK. :S| §' § 80. shall not have and shall not be capable of ^ivinj^' a better title to the cheque than that which had the person from whom he took it. Imp. Act, s. 81. Making a cheque "not negotiable" puts it on the sarae footing as an overdue bilJ, so that any holder takes it subject to the equities attaching to it, and no person can become a holder in due course. If such a cheque should be lost or stolen the person receiving the money from the collecting bank would be liable in any event. Where a cheque crossed "not negodable" was drawn in favor of a firm, and one partner S., in fraud of plaintiff his co-partner indorsed it to defendant, who ot it cashed for S., defendant was held liable to the co-paitner who under the partnership articles was entitled to the cheque : Fisher V. Roberts, 6 T. L. 11. 354 (1890). See National Bank v. Silke, [1891], Q. B. 435. Protection to collcct- iuf,' bank. 81. Where a bank, in good faith and without negligence, receives for a customer payment of a cheque crossed generally or specially to itself, and the customer has no title, or a defective title thereto, the bank shall not incur any liability to the true owner of the cheque by reason only of having received such payment. InqD. Act, s. 82. Section 79 relieves the bank on which the crossed cheque is drawn ; this section, the bank which collects it. If it is indorsed "per proc." and the banker makes no inquiry as to the authority to so indorse, this may be negligence : Bissell V. Fox, 53 L. T. N. S. 193; 1 T. L. R. 452 (1885). See Mathif ssen v. London & County Bank, 5 C. P. D. 7 (1879) ; Bennett v. London & County Bank, 2 T. L. R. 765 (1886). lieh had ct, S.81. the sarae del" takes no person a cheque he money jvent. IAS drawn laintiff his cashed for who under le : Fisher il Bank v. without lent of a iself, and ive title bility to only of s. 8. When a note is made payable at a particular place, pre- sentment at that place is necessary to render the maker liable : ■ Spindler v. Grellett, 1 Ex. 884 (1H47); Sands v. Clarke, B C. B. 751 (1H49); Vandev Donct v. Thelluson, 8 C. B.H12 (1849). 9. If the maker had funds at the place of payment on the day of maturity, and they were left there and finally lost throu<,'li the neglect of the holder to present the note as, for instance, by the failure of a bank, the maker wonld be discharged, at least to the extent of the loss. 10. The last clause would appear not to give the Court any discretion as to costs if the note was payable generally ; but the courts have, as a rule, a discretion as to costs in general. 11. In presenting a note for payment it should be produced and exhibted ; but if it is held at the place of payment on the day it matures, no formal presentment is necessary. See ante p. 309; also Fullerton v. Bank of U. S., 1 Peters (U.S.) 604 (1828); Bank of U. S. v. Carneal, 2 ibid. 543 (1829); Chicopee Bank v. Philadelphia Bank, 8 Wall. (U.S.) 641 (1869); Wood- bridge V. Brigham, 13 Mass. 556 (1816) ; Bank of Syracuse v. Hollister, 17 N. Y. 45 (1858). 2. Presentment for payment is necessary in order to render the indorser of a note liable : Imp. Act, •s. 87 (2). For the rules as to presentment for payment, see section 45, which applies to promissory notes with the raodifications specified in section 88. The provisions of section 46 as to excuses for the delay in making present- ment, or presentment being dispensed with entirely, as well as those relating to notice of dishonor, also apply to notes with the necessary modifications. See the notes and illustrations under these sections. Also Siddall v. Gibson, 17 U. C. Q. B. 98 (1859) ; Saun- dersou v. Judge, 2 H. Bl. 510 (1795) ; Roche v. Campbell, 3 Camp. 247 (1812) ; Britt v. Lawson, 22 Hun (N.Y.) 123 (1878). 86. Aialulity of iiidiirMT. I .1 i 'Ste'i » 3 i!S: if 430 § 86. I'laue for present ■ IllOllt. rROMISSOUY NOTES. 3. Where a note is in the body of it made payable at a particnhir place, presentment at that place is necessary in order to render an indorser liable ; but when a place of payment is indicated by way of memorandum only, presentment at that place is sufficient to render the indorser liable, but a pre- sentment to the maker elsewhere, if sufficient in other respects, shall also suffice. Imp. Act, s. 87 (3). Where the place of payment is in the body of the note it is part of the contract : O'Brien v. Stevenson, 15 L. C. R. 265 (1865) ; Howes v. Bowes, 16 East 112 (1812). Where it is merely indicated in a footnote or some other part of the note, it has been a disputed point whether it is part of the contract. The affirmative has been held both in England and the United States. See Trecothick v. Edwin, 1 Stark. 468 (1816) ; Jones v. Fales, 4 Mass. 244 (1808) ; Piatt v. Smith, 14 Johns. (N.Y.) 368 (1817) ; Woodworth v. Bank of America, 19 Johns. 391 (1822) ; Dewey v. Reed, 40 Barb. (N.Y.) 17 (1863). Contra, Cunard v. Tozer, 4 N. B. (2 Kerr) 365 (1844) ; Price v. Mitchell, 4 Camp. 200 (1815) ; Exon V. Russell, 4 M. ifc S. 505 (1816) ; Masters v. Barretts, 8 C. B. 433 (1849) ; Hill v. Cooley, 46 Penn. St. 259 (1863). The Act recognizes such a memorandum, but appar- ently not as part of the contract, as presentment at the place indicated is made optional. Liability Q'J ^ The maker of a promissory note, by mak- of maker in^ it- (a) Engages that he will pay it according to its tenor ; LIABILITY OF MAKER. 431 (h) Is precluded from denying to a holder in § 87. due course the existence of the payee and his then HHtopm-i capacity to indorse : Imp. Act, s. 88 (1) {'2). The position of the maker of a note is similar in most respects to that of the unconditional acceptor of a bill : section 88, s-s. 2. He is the primary debtor ; the indorsers being only secondarily liable, until after dishonor and notice, unless the latter is waived or dispensed with. For the liabilities of an acceptor see sections 54 and 57. It is frequently a disputed question whether the maker of a note is personally liable, or whether he is a mere agent or officer, and the note is that of some principal or corporation. It is impossible to reconcile the conflicting decisions on this point, as regards the acceptors of bills and the makers of notes. It may be said generally that the maker of a note has sometimes been liable on an acceptance expressed in words which, if in a note, would not have bound him personally. See section 17 «.*! the notes and illustrations thereunder. Also Kerr v. Parsons, 11 U. C. C. P. 513 (1861) ; Corporation of Toronto Town- ship V. McBride, 29 U. C. Q. B. 13 (1869) ; Archibald v. Brown, 3 L. N. 43 (1879). (6) See the similar rule as to the acceptor of a bill : section 54, s-g. 3. A ** holder in due course " has been defined in section 29. The reason for this estoppel is that the maker by issuing a note in this form has in effect made these repre- sentations to the person who becomes such a holder, and after it is acted upon cannot be allowed to claim the con- trary. See Perkins v. Beckett, 29 U. C. C. P. 395 (1878) ; Taylor v. Croker 4 Esp. 187 (1803) ; Drayton v. Dale, 2 B. k C. 293 (1823) ; Smith v. Marsack, 6 C. B. 486 (1848) ; Lane v. Krekle, 23 Iowa, 404 (1867); Wolke v. Kuhne, 109 Ind. 313 (1886). ':MH ■It 432 Applioa- tinii of I'avt II. to llOtl'f*. CorroH- |10tl(1illL teriDH, PROMISSORY NOTES. 88. Subject to the provisions in this part, unci except as l)v this section provided, tlie provisions of this Act rehitin^' to i)ills of exchange apply, with the necessary nioditications, to promissory notes : 2. In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to the drawer's order : vL'ionid'.'. ^- '^'h® following provisions jis to bills do not not apply, jippiy ^q notes, namely, provisions relating to — («) Presentment for acceptance ; (h) Acceptance ; ((') Acceptance snpi'd protest ; {(1) Bills in a set : Imp. Act, s. 89 (1) (2) (8). The following sections in Part II. of the Act do not apply to iji'omissory notes : — 3, 4, 5, 6, 15, 17, 18, 19, 30 8-s. 3, 39, 40, 41, 42, 43, U, 53, 54 s-s. (1) (2), 64, 05, 66, 07 and 70. As to foreign notes. 4. Where a foreign note is dishonored, protest thereof is unnecessary, except for the preservation of the liabilities of indorsers. Imp. Act, s. 80 (4). The exception in this sub-section is not in the Imperial Act. Its effect is to place foreign notes on the same foot- ing as foreign bills : section 51, s-s. 2. rt, Hiul ivisioiiH apply, luissory ker of a ith the f a note rawer of der : 4 do not I to — :2) G^). •t do not 18,19,30 54, 65, 66, jen L-otest ation . SI) (4). Imperial same foot- PART V. SUPPLKMENTAliY. 89. A: thin^^ is deemed to be done in good faith within the meaning of this Aet, where it is in tact done honestly whether it is done negligently or not. Imp. jAct, s. 90. The expression " in good faith " is used in section 29 Avith reference to a holder in due course acquiring a bill ; in section 59, with reference to payment in due course ; and in sections 78 and 81, with reference to the payment of a crossed cheque. The rule of the civil law is that " good faith is always presumed ; he who alleges bad faith must prove it " : C. C. Ai't. 220^. See section 30 as to the shifting of the onus of proof once fraud is proved. This section was considered in England recently in the case of Tatam v. Haslar, 23 Q. B. D. 345 (1889). Denman, J., there says that it is obviously founded upon the distinc- tion which is pointed by Lord Blackburn in Jones v. Gordon, 2 App. Gas. at p. 629 (1877), between honest blundering or carelessness and a dishonest refraining from inquiry. The following is the substance of the remarks referred to : — If value has been given for a bill, it is not enough to shew that there was carelessness, negligence or foolishness in not suspecting that the bill was wrong when there were m'c.b.e.a. — 28 (iooU (aitli ( iriKiii -)f . sL'ctiou. 484 SUPPLEMENTARY PROVISIONS. ^ g9, circumstances that might have led a man to suspect that. It is necessary to show that the person who gave vahie for the bill, whether the value given be great or small, was affectetl with the notice that there was something wrong about it when he took it. It is not necessary that he should hnve notice of what the particular wrong was. Evidence of carelessness or blindness may be good evidence upon the real question, which is, whether he did know that there was something wrong in it. If he was honestly blundering and careless, and so took a bill or note when he ought not to have taken it, still he would be entitled to recover. But if the facts and circumstances are such that the jury, or whoever has to try the question, comes to the conclusion that he was not honestly blundering and care- less, but that he must have had a suspicion that there was something wrong, and that he refrained on this account from asking questions or making further inquiry — I think that is dishonesty. Baa faitii In re Gomersall, 1 Ch. D. at p. 146 (1875), it is said uegiiKoiice. that '* uegHgence or carelessness on the part of the holder of a bill, is not of itself sufficient to deprive him of his remedies for procuring its payment. But negligence or carelessness, when considered in connection with the sur- rounding circumstances, may be evidence of inala fidea." In Swan v. North British Australasian Co., 2 H. & C. 184 (1863), Byles, J., says: "The negligence of the bolder makes no difference in his title. However gross the hold- er's negligence, if it stop short of fraud, he has a title." The same rule was laid down in Goodman v. Harvey, 4 A. & E. at p. 876 (1886), going somewhat farther in this direction than Crook v. Jadis, 5 B. & Ad. "909 (1834), which was a partial departure from the rule laid down in Gill v. Cubitt, 3 B. & C. 466 (1824), when the jury was told that the question was, whether the holder of the bill took it under circumstances that ought to have excited the suspi- GOOD FAITH. 435 »ect that» value for nail, was ng wrong. ' that he ong was. i evidence did know 8 honestly note when entitled to 3 such that )me8 to the g and care- ,t there was ibis account y.y — I think 5), it is said f the holder him of his egligence or vith the sur- mala fides.'' H. & C. 184 the holder )88 the hold- Ihas a title." Harvey, 4 Irther in this [1834), whicli )wn in Gill v. /as told that bill took it ted the suspi- cion of a prudent and careful man. This last case was § gg, disapproved of in Bank of Bengal v. McLeod, 5 Moore's Indian Appeals 1 (1849), and Raphael v. Bank of England, 17 C. B. 161 (1855) ; and in London and County Bank v. Groome, 8 Q. B. D. 288 (1881), it was held to have been overruled. The old rule in England was similar to that laid down in the recent cases and adopted by the Act. Some American authorities followed Gill v. Cubitt, but the contrary doctrine has been firmly established there. See Murray v. Lardner, 2 Wall. (U. S.) 110 (1804) ; Shaw v. Railroad Co., 101 U. S. (11 Otto) 5G4 (1870) ; Swift v. Smith, 102 U. S. (12 Otto) 444 (1880) ; Shreeves v. Allen, 79 111. 553 (1875) ; .Tobnson v. Way, 27 Ohio St. 374 (1875) ; Mabie v. Johnson, 6 Hun. (N. Y.) 309 (1876) ; Stimson v. Whitney, 130 Mass. 591 (1881); Daniel, §^ 775, 1503. This rule has been generally recognized in Canada, although there are expressions in certain cases that are not quite consistent with it. 90. Where, by this Act, any instrument or s's"*^"*"^' writing is required to be signed by any person, it is not necessary that he should sign it with his own hand, but it is sufficient if his signature is written thereon by some other person by or under his authority: Imp. Act, s. 90 (1). As to what is a writing or signature within the meaning of the Act, see ante pp. 36, 39. As to a signature by procuration, see section 25 and the notes and illustrations thereunder. The person whose name is signed, is sometimes held liable on the ground of having authorized it before it was signed, sometimes on account of having ratified it, and frequently on the ground of estoppel. 436 90. SUPPLEMENTARY PROVISIONS. ILLUSTRATIONS. Hee also Illustrations ante pp. 161, 155. 1. In an action against B. and S., a firm of solicitors, on promissory notes indorsed by B. i\\ the name of the firm, it was proved that on other occasions S. had indorsed in the same manner with B.'s knowledge. Held, sufficient evidence to go to the jury of a mutual authority : Workman v. McKinstry, 21 U. C. Q. B. (523 (1862). 2. Where one executor was authorized by the others to manage the estate, and signed notes in the names of all execu- tors, but was given no authority to bind them personally, and they were not aware of the giving of the notes, held that the others were not liable on the notes : Gore Bank v. Meredith, 2G U. C. Q. B. 237 (1860). 3. Where a person, whose name had been signed as indorser for notes by a friend, gave a mortgage to secure the indebtedness and renewals "similarly indorsed," and allowed the maker to sign his name to the mortgage so that it would be in the same handwriting, the indorser was held liable for the indorsements although they were for a much larger sum than he was aware of: Merchants' Bank v. Bostwick, 3 Ont. A. R. 24 (1878). 4. A bank manager is not acting without the scope of his authority in accepting the cheque of a customer to deliver to another customer on a particular day, or on the happening of a specified event : Grieve v. Molsons Bank, 8 0. R. 162 (1885). 5. The power to draw bills is not of itself sufficient to establish the right to indorse in the name of the principal : Prescott V. Flinn, 9 Bing. at p. 22 (1832). 6. Where a wife had authority to indorse bills for ner hus- band, and the name was written by her daughter in her presence and at her request, held, sufficiently authorized : Lord v. Hall, 8 C. B. 627 (1849). SIGNATURE OP PARTIES. 7. The payee of a note transfers it for value without indors- ing it. The transferee is not authorized to indorse it in his ■ name : Harrop v. Fisher, 10 C. Ji. N. S. 196 (1861). 8. The rigiit of a solicitor to sign his firm's name to a cheque, does not authorize him to issue post-dated cheques which are in efi'ect equivalent to bills payable after date : Forster V. Mackreth, L. R. 2 Ex. 103 (1807). 9. If another person sign the name of the party in his pre- sence and at his request, it is the same as if he did it himself: Sager v. Tupper, 42 Mich. 605 (1880). 10. Verbal authcrity to execute or indorse a bill is sufficient, and it is not essential that the agent add his own name or initials : Mechanics' Bank v. Bank of Columbia, 5 Wheat. (U. S.) 826 (1H20) ; First Nat. Bank v. :royhed, 28 Minn. 898 (1881) ; Bet- tis V. Bristol, 56 Iowa, 41 (1H81). •2. In the case of a corporation, where, by this Act, any instrument or writing is required to be signed, it is sufficient if the instrument or writing is duly sealed with the corporate seal ; but nothing in this section shall be construed as requiring the bill or note of a corporation to be -under seal. Imp. Act, s. 91 (2). As to the powers of Foreign, Dominion and Provincial corporations with regard to bills and notes, see the notes and illustrations ante pp. 131-136. Before the Act it was doubted whether an instrument in the form of a note, but under the seal of a company, was a negotiable note : Merritt v. Maxwell, 14 U. C. Q. B. 50 (1856); Merchants' Bank v. U. E. Club, Uihid. 468 (1879) ; Crouch v. Credit Foncier, L. R. 8 Q. B. at p. 382 (1876) ; Clark v. Farmers' Mnfg. Co. 15 Wend. (N. Y.) 256 (1836) ; Merritt v. Cole, 9 Hun (N. Y.) 98 (1876). 437 §90. As to cor- lioiatioiis. !■' 488 § 90. Ilh Comimta- tion of time. >.]■ lii SUPPLEMENTARY PROVISIONS. A municipal corporation in Ontario may be liable on a promissory note under seal or without a seal : Armstrong V. Garafraxa, 44 U. C. Q. B. 515 (1879). An instrument in the form of a note signed and sealed is not a promissory note ; Wilson v. Gates, 16 U. C. Q. B. 278 (1858) ; Warren v. Lynch, 5 Johns. 239 (1810) ; Raw- son V. Davidson, 49 Mich. 607 (1883) ; Brown v. Jordhal, 32 Minn. 135 (1884). 91. Where, by this Act, the time limited for doing any act or thing is less than three days, in reckoning time, non-business days are excluded : *' non-business days," for the purposes of this Act, mean the days mentioned in the fourteenth section of this Act ; any other day is a business day. Imp. Act, s. 92. The Imperial Act nc«mes the holidays ; the list in Canada being so much longer and varying with the provinces, it was more convenient to embody them by reference. Some of the short delays in the Act are : — the drawer has two days to decide whether he will accept a bill : sec- tion 42 ; notice of dishonor must be given the next following business day: section 49 (k), and s-s. 4; and presentment to the acceptor for honor should be on the day following maturity : section 66, s-s. 2. :M ^®n" 92. For the purposes of this Act, where a bill to^rotes"! or uote is required to be protested within a speci- fied time or before some further proceeding is taken, it is sufficient that the bill or note has been noted for protest before the expiration of the speci- fied time or the taking of the proceeding ; and the PR0TK8T. 439 formal protest may be extended at any time there- ^ 92. lifter as of the date of the noting. Imp. Act, s. 93. 93. Where a dishonored bill is authorized or^][fg\f* required to be protested, and the services of anot*accM- notary cannot be obtained at the place where the bill is dishonored, any justice of the peace resident in the place may present and protest such bill and give all necessary notices, and shall have all the necessary powers of a notary in respect thereto : Imp. Act, s. 94. The Imperial Act reads, *' wlien a dishonored bill or note," etc. No reason was given for the omission of ^' note." Under section 88, and sub-section 5 of this section, this provision would, no doubt, be held to apply to notes. It has been the law in Lower Canada and Quebec since 1849 : S. C. L. C. c. 64, s. 24 ; C. C. Art. 2304. In- stead of a justice of the peace, the Imperial Act names as the substitute for a notary "any householder or substantial resident." Justices of the peace arc not so common in England as in Canada. The powers of a notary referred to are those relating to presentment, protest, and notice of dishonor in sections 41, 45, 49, 61, 64, 66 and 67. Notaries. — In England, notaries are appointed by the Archbishop of Canterbury, acting as the Court of Faculties. In Canada, they are provincial officers. In most of the provinces there are statutes regulating their appointment, duties and powers. See E. S. 0. c. 158 ; K. S. Q. Arts. 3604-3957 ; C. S. N. B. c. 28 ; 46 & 47 Vict. (Man.) c. 37 ; Rev. Ord. N. W. T., c. 40; Cons. Acts. B. C. c. 89. In the provinces, other than Quebec, they are usually barris- ters, solicitors or attorneys. In Quebec the notarial is a distinct profession, and '■Si\ ui 440 SUPPLEMENTARY PROVISIONS. \H^ § 93. incompatible with that of advocate or attorney. Notaries are the regular conveyancers, and the more important documents must be executed before them en minute, the notary keeping the original, and giving out certified copies; his certificate alone making full proof of the execution, in all courts, and for registration, etc. Certain less formal documents may be executed en brevet, the notary then simply attesting the instrument and handing out the original. Promissory notes are sometimes made before a notary in this form, which is analogous to the protest form under the Act. See form in Appendix. A notary who is one of the indorsers on a promissory note is not entitled to act as notary to make the protest ; even where he substitutes the name of another person for his own and purports to make the protest at the request of the person so substituted : Pelletier v. Brosseau, M. L, E. 6 S. C. 331 (1890). Expenses. 2. The expeiisG of noting and protesting any bill or note, and the postages thereby incurred, shall be allowed and paid to the holder in addition to any interest thereon : This clause is not in the Imperial Act, and had been already provided for by section 57, s-s. 3. In some of the provincial tariffs no provision is made for a fee for noting. Under this sub-section probably the same fee would be allowed as for a protest. It would also probably be held that a justice of the peace would be entitled to the same fee as a notary, at least in the Province of Quebec, as the statute in force there since 1849 allowed a justice of the peace the same fees as a notary. f«>?9. ;r 1 3. Notaries may charge the fees in each Pro- vince heretofore allowed them : PROTEST CHARGES. 441 Notaries portant ute, the copies; ition, in ! formal ry then out the before a est form )missory protest ; jrson for equest of M. L. R. ng any ciirred, dditioii lad been le of the noting. Irould be be held le same as the le of the In some of the provinces these fees were settled by J^ 93^ statute; in others they were regulated by usages which were by no means uniform. Ontario. — The fees allowed in Ontario before tbe Act were regulated by R. S. C. c. 123, s. 25, and were as" follows : — For the protest of any bill, draft, note or order 80 50 For every notice. 25 For postage, the amount actually expended. Quebec. — The taritf of fees and charges in Quebec i» found in Schedule B to R. S. C. c. 123, and is as follows : For presenting and noting for non-acceptance any bill of exchange, and keeping the same on record Copy of the same when required by the holder For noting and protesting for non-payment any bill of exchange, or promissory note, draft or order, and putting the same on record . . For making and furnishing the holder of any bill or note with duplicate copy of any pro- test for non-acceptance or non-payment, with certificate of service and copy of notice served upon the drawer and indorsers For every notice, including the service and recording copy of the same, to an indorser or drawer, in addition to the postages actu- ally paid »1 00 50 1 00 50 50 Pro- Nova Scotia. — The following tariff is laid down in R. S. C. c. 123, s. 7, for the protest of bills of exchange and promissory notes of $40 and upwards drawn or made at any place in this province upon or in favor of any person in the province : — For the protest 80 50 For each notice 25 For other than local bills and notes the former charge of 82.50 for each protest, includ- ing notices, is still made. Postage being additional in all cases. , .* 5>'l 442 SUPPLEMENTARY PROVISIONS. § 93. New Brunswick.— The statute of this province, 46 -^ Vict. c. 11, prescribed the following tariff: For the presentment and noting of any bill of exchange or promissory note, for non- acceptance or non-payment 90 50 Protest of note or bill of exchange, when made, including presentment, noting and notice 1 00 Necessary postage to be allowed. As the Parliament of Canada has exclusive jurisdiction over Bills of Exchange and Promissory Notes, the consti- tutionality of this provincial Act is open to question. It is «aid that the charge still usually made in this province is that in force before the Act in question, viz. : — For protest and all notices $B 00 Postage actually paid. Prince Edward Island.— R. S. C. c. 123, s. 8, lays ^own for this province a tariff similar to that for Nova Scotia. The old tariff was framed in 1776, and allowed : — For noting bills for non-acceptance Is. Od. Stg. For every protest 3 6 " For other than local bills and notes the , usual charge still is For protest and notices $2 50 Postage in addition. Manitoba. — The charges in this province appear to be tregulated by usage, and are as follows : — For protest «1 00' For each notice 50 Postage in addition. North West Territories. — The charges here also are governed by usage, and are as follows : — For protest $2 00 For each notice 50 Postage in addition. British Columbia. — The charges here also are governed hj usage, and are as follows : — For protest and notices $2 50 Postage in addition. . PROTEST FORMS. 443 4. The forms in the first schedule to this Act § 93. may be used in noting or protesting any bill or Forms. note and in giving notice thereof. A copy of the bill or note and indorsement may be included in the forms, or the original bill or note may be annexed and the necessary changes in that behalf made in the forms : The second part of this sub-section is substantially a repetition of section 51, s-s. 7. The forms in the first echodule to this Act are copied without change from Schedule B. to R. S. C. c. 123, where they were applicable to the province of Quebec alone, hav- ing been inserted there from the schedules to chapter 64 of the Consolidated Statutes of Lower Canada. It will be observed that even the words " protested in duplicate " have been retained. In Quebec it was formerly compulsory to make out the protest in duplicate and to copy the bill or note in the protest. Neither of these is required by the present Act, so that these words are now inappropriate. Form J. also provides for an attesting witness and the seal of the justice of the peace, although neither of these is required by the Act. As a matter of prudence it might be well to have a witness sign and to affix the seal in such a case, although the use of the forms is not imperativei and immaterial variations would not vitiate them: R. S. C. c. 1, s. 7, 8-s. 44. It is a recognized rule in the construction of statutes that their operation will not be restrained by any reference to the words of a form given for convenience sake in a schedule; and if the enacting part and the schedule do not correspond, the latter must yield to the former : re Daines, 444 SUPPLEMENTARY PROVISIONS. § 93. 1 Cr. & p. 31 (1840) ; Dean v. Green, 8 P. D. at pp. 89, 90 (1882). lr?ma)aeu '^- ^ protest of Riiy bill or note, and any copy evidence, ^j^^j-^f .^g copied by the notary or justice of the peace, shall, in any action he prima facie evidence of presentation and dishonor, and also of service of notice of such presentation and dishonor as stated in such protest. This provision is taken in substance from Article 2305 of the Civil Code, which also made the duplicate prima facie evidence. For similar provisions as to protests in Ontario, see C. S. C. c. 57, s. G, and R. S. 0. c. 61, ss. 31-34 ; and for Nova Scotia, Prince Edward Island, and New Bruns- wick, R. S. C. c. 123, ss. 7, 8, 10. See also Ross v. McKindsay, 1 U. C. Q. B. 507 (1845) ; Codd V. Lewis, 8 ibid. 242 (1850); Merchants' Bank v. McDougall, 30 U. C. C. P. 236 (1879) ; Southam v. Ran- ton, 9 Ont. A. R. 580 (1883). Section 71 (/) makes protests out of Canada also primtt facie evidence in all courts. Crossed dividend warrants. 94. The provisions of this Act as to crossed cheques shall apply to a warrant for payment of dividend. Imp. Act, s. 95. These warrants are not defined in the Act, and thi& section is the only provision in it concerning them. The Imperial Act contains in addition a proviso that nothing in the Act or in any repeal effected by it shall affect the validity of any usage relating to dividend warrants, or the indorsement thereof : section 97, 3 {d). This was inserted to protect the usage of paying these warrants on the indorsement of one of several payees, instead of having all indorse as required by section 32, s-s. 8. DIVIDEND WARRANTS. 445 In Partridge v. Bank of liJnglanil, 9 Q. B. 396 (184G), it § 94. was held that Bank of England dividend warrants payable to a person by name, and not to his order or bearer, were not negotiable, although it was the practice of bankers to treat them as negotiable. Such bills would now be nego- tiable under section 8, s-s. 4. In Canada they are usually called dividend cheques, and made payable to order ; so that sections 75 to 81 relat- ing to crossed chc(|ues would have applied to them in this form indejjendently of the present section. When they are issued by a bank and drawn upon itself, drawer and drawee being the same person, the holder might at his option treat them as promissory notes, in which case tlie crossing would be ina[)propriate. It is probable that it would be only those that are drawn upon an incorporated bank, that would be held to be dividend warrants within the meaning of the Act, as the policy of the Act is not to recognize any instrument as a cheque which is not drawn upon one of these banks. ' 95. The enactiuents mentioned in the second '*'"''"'"''■ schedule to this Act are hereby repealed, as from the connnencement of this Act, to the extent in that schedule mentioned : — Provided, that such repeal sliall not affect any- thin^' done or suffered, or any ri^-ht, title or interest acquired or accrued before the connnencement of this Act, or any legal proceeding or remedy in respect of any such thing, right, title or interest : Imp Act, s. 96. The Acts named in the second schedule were considered to be the only Dominion or Provincial enactments relating to bills and notes not previously repealed. I'riiviso. m W' 1 446 8UPPLKMENTAHY PROVI8ION8. § 95, The articles of the Civil Code which relate to evidence, and which are saved from repeal hy the exception at the foot of the Hohedule, are 2841 and 2342. As already pointed out there are isolated provisions in other Acts, chielly in those relating to procedure in the Courts. TheHo will still be in force, in so far as they do not conflict with the Act. The proviso is HuhHtiintially a repetition section 7, s-s. .'52 of the Interpretation Act. • TiioHiihk '2. Nothing" ill this Act or in any repeal efl'octed Kir.Mte.i thereby shall atl'eet the provisions of " The Bank .\et:"" The Bank Act in force when the present Act took effect was 1{. S. C. c. 120. The new Bank Act, 53 Vict. c. 31, came into force on the Ist of July, 18t)l. This sub-section would also apply to the latter under sub-section 51 of sec- tion 7 of the Interpretation Act. Iinitcriu Acts Canada. 3. The Act of the Parliament of Great Britain {'a»j«',',j"j^;i passed in the fifteenth year of the rei^ni of His late Majesty George III, intituled "An Act to restrain the negotiation of Proniissory Notes and Inland Bills of Exchange under a limited sum within that part of Great Britain called England," and the Act of the said Parliament passed in the seven- teenth year of His said Majesty's reign, intituled *'An Act for further restraining the negotiation of Promissory Notes and Inland Bills of Exchange under a limited sum within that part of Great Britain called England," shall not extend to or be in force in any Province of Canada, nor shall the said Acts make void any bills, notes, drafts or REPEAL — OONBTnUCTION. 44T ;o evidence, )tion at the I'ovisions in ure in the as they do ition 7, s-8. il effected The Bjink t took effect Vict. c. 31, sub-section 11 51 of sec- at Britain f His late o restrain \\d Inhmd ithin that and the le seven- intituled ation of xchange »f Great to or be shall the Irafts or orders which have been or may be made or uttered § 95. therein. This sub-section formed part of the Con. Stat. U. C. e. 42. It was inserted in 11. S. C. c. 123, as section 26, l)ut remained appUcable to Ontario alone. These Imperial Acts were introduced into Upper Canada by the Ih'st Statute of that Province, 32 Geo. 3, c. 1, ante p. 10. They would also be in force in Manitoba, the North -West Terri- tories and Britisli Columbia, (tnte pp. 17, 18. "Province" here includes the Territories : 11. S. C. c. 1, s. 7 (18). The other Imperial Acts rehitinj^ to bills and notes in force in the various provinces are not formally repealed, except such as were made i)art of the law of Quebec by Article 2340 of the Civil Code, which is repealed as form- ing part of the second schedule, except in so far as it relates to evidence. It is doubtful if there are any pro- visions in them not covered by the Act, in which case they would be practically repealed by the new enactment. 96. Where any Act or document n^fers to any [^i°|J''^*JJg' enactment repealed by this Act, the Act or docu- etc!®' ^'^^' ment shall be construed and shall operate as if it referred to the correspondin*,^ provisions of this Act. Imp. Act, s. 1)8. 97. '^['his Act shall come into force on the first day of September next. The Act was assented to on the IGth of May, 1890, but did not come into force until the first of September of that year. The Imperial Act, like the Canadian, is not retrospec- tive, but it has been held to be largely declaratory of the prior law. Seea«ply. law of England, in so far as they COMMON LAW AND LAW MERCHANT. 151 ii forj^ecl 11 subse- he shall jurse for [i-oiu any qiient to recourse 'errer by [icle such recourse Jilt to the r, subject ed in the serting in payable," lib-section striking first line •iking out first line ibodied in and their England, [y as they are inconsistent with the express provisions of the said Act, as hereby amended, sliall apply, and shall be t.'iken and held to have applied from the date on which the said Act came into force, to bills of exchange, promissory notes and cheques. Imp. Act, s. 97 (2). This clause was in the bill as it passed the House of Commons in 1890, but was struck out in the Senate. See Senate Debates, 1890, p. 467. As to what would have been the effect of the omission of any uniform rule for cases unprovided for by the Act, see ante pp. 5, 18. It will be observed that the present section is made retrospective. The expression "common law" is used in different senses. In this section it is probably used in the comprehensive sense in which it was spoken of by Baron Parke in the House of Lords in Mirehouse v. Eennell, 8 Bing. 515 (1832), when he said: — "Our common law system consists in applying to new combinations of circumstances those rules of law which we derive from legal principles and judicial precedents ; and for the sake of attaining uniformity, con- sistency, and certainty, we must apply those rules when they are not plainly unreasonable or inconvenient, to all cases which arise ; and we are not at liberty to reject them, and abandon all analogy to them, in those to which they have not yet been judicially applied, because we think that the rules are not as convenient or reasonable as we ourselves could have devised." The " law merchant " is another expression that may not be capable of an exact definition. It has always, as its name implies, recognized the customs and usages of merchants. Indeed, it has been based upon them. " The law merchant is sometimes spoken of as a fixed body of law, forming part of the common law, and as it were, 8. Couiiuon law deflnert, ■^ Iiaw iiiorcliaiit iletiued. fc?"J 462 AMENDING ACT OF 1891. § 8^ coeval with it. But as a matter of legal history, this view is altogether incorrect. The law merchant thus spoken of with reference to bills of exchange and other negotiable securities is of comparatively recent origin. It is neither more nor less than the usages of merchants and traders, in the different departments of trade, ratified by the decisions of courts of law : ''per Cockburn, C.J., in Goodwin v. llobarts, L. K. 10 Ex., at p. 34{) (1875). "When a general usage has been judicially ascertained and estab- lished, it becomes a part of the law merchant, which courts of justice are bound to know and recognize : " per Lord Campbell in Brandao v. Barnett, 12 CI. & ¥. at p. 805 (184(5). The existence, nature and scope of a given usage is a question of fact. A particular or local usage must be proved each time, until it becomes so notorious that the courts will not require furtber proof of it, but will take judicial notice of it : per Brett, M. Ji., in ex parte Turquand, 14 Q. B. 1). at p. ()45 (1885). For examples of the appli- cation of tliis principle in the United States, see Bowen v. Newell, 13 N. Y. 290 (1855), and Champion v. Gordon, 70 Penn. St. 476 (1872), where proved local usages as to cheques payable at a future day having no days of grace, received judicial sanction See also the remarks of David- son, J., in La Banque Nationale v. Merchants' Bank, M. L. R. 7 S. C. 336 (1891) as to proof of the custom of the Montreal clearing house regarding unaccepted cheques. The corresponding section of the Imperial Act has been considered in tbe case of re Gillespie, ex parte Bobarts, 16 Q. B. D. 702 (1885). It was there held that section 67 of the Act was not exhaustive, as to the damages the bolder of a dishonored bill might recover. After quoting section 97, Cave J. said, p. 705 : " It therefore follows, unless there is something in the Act expressly inconsistent with the ancient law, that the right to prove for damage InijU'ria' Act,s. i)7c2). COMMON LAW AND LAW MERCHANT. 453 his view pokeu of jgotiable 8 neither traders, [ by the Goodwin When a nd estab- ich courts per Lord at p. 805 usage is a ) must be 18 that the , will take Turquaud, the appli- i Bowen v. jordon, 70 iges as to 8 of grace, of David- ita' Bank, itoin of the hcques. has been e llobarts, section 57 Images the ,er quoting ^re follows, iconsistent or damage of the kind which 1 have spoken of still exists." In the 5) g. same case, in appeal, 18 Q. B. D. at p. 21)2, Lindley, L.J., ~ "" says, "section 97 preserves the former liability of tlie acceptor to indemnify the drawer against his liability in such a case. Section 97 has been added to meet cases not exhaustively dealt with by other sections of the Act." It will be observed that the language of the section '^ Jo|["^J'i*[,'' much broader than the corresponding article of the Civil '^"''" Code. That article No. 2340, reads as follows : " In all matters relating to bills of exchange not provided for in this code recourse shall be had to the laws of England in force on the 30th of May, 1849." Not only that part of the Code relating to bills of exchange was to be looked at, but the whole Code, before recourse could be had to the laws of England. Now the common law of England and the law merchant are to apply in Quebec as well as in the other provinces, when they are not inconsistent with the express provisions of the Act. It is probable that this section will have an important influence in harmonizing the decisions in the various provinces, when the provincial laws difter on subjects directly or indirectly affecting bills and notes, some of which have been considered in the preceding pages, especially under sections. .'. .''5 rT 451 BILLS OF EXCHANGE ACT, 1890. ^< OTHER NEGOTIABLE INSTRUMENTS. The Bills of Exchange Act treats onl}' of bills, cheques ' uci u .cs. The single exception to this is section 94, relating to dividend warrants, which are really cheques, as pointed out in the notes to that section. There are certain other instruments which represent money, and which hv oimimercial usage or by legislation are gradually acquiriL/^.' lii- fuH measure of negotiability which belongs to bills ■ j.vi . , <,od. This process is very clearly described in the remarks of Oockburn, C.J., in the case of Goodwin V. Eohii't- q'loteci ••••; introduction, to which the reader is refe; red. A negotiable instrument strictly so called, is one repre- senting on its face a certain sum of money, which may be transferred by indorsement and delivery, or by delivery alone, so that the holder for the time being has a right to sue upon it in his own name; and if he is a bona fide holder for value before maturity, he may demand the full amount of the face of the instrument. See Crouch v. Credit Foncier, L. R. 8 Q. B. at p. 381 (1873), and Simmons v. London Joint Stock Bank 1891; 1 Ch. at p. 294. Bank Notes and Dominion Notes.— As to these see ante p. 418. The debentures authorized by chapter 31, R. S. C, are also negotiable in the full sense of the term. Foreign Government Bonds.— In the English Courts the question of the negotiability of these instruments has often come up. The question to be decided has been held in these cases to be whether they were treated as negoti- able in the English money market, if consistent with what appeared on their face, and not simply whether they were OTHER NEGOTIABLE INSTRUMENTS. 455 >. cheques tion 94, i<|ue8, as lere are ley, and ;radually belongs described Goodwin [le reader ne repre- h may be delivery is a right bona fide the full Crouch V. 73), and 1 Ch. at ihese see apter 31, le term. sh Courts lents has been held IS negoti- vith what ;hey were made payable to order or bearer, or whether they were con- sidered to be negotiable in foreign countries. See Glyn V. Baker, 13 East 509 (1811) — East India Bonds; Gorgier V. Mieville, 3 B. (It C. 45 (1824) — Prussian Government Bonds; Lang v. Smyth, 7 Bing. 284 (1831)— Neapolitan Bonds; Atty. Gen. v. Bouwens, 4 M. & W. at p. 190 (1838) — Russian and J)anish Bonds; Heseltine v. Siggers, 1 Ex. 85G (1848) — Spanish Stock; Picker v. London and County Bank, 18 Q. B. 1). at p. 518 (1887)— Prussian Government Bonds. Municipal Debentures.— In 1855 by the Act, 18 Vict, f. 80, municipal debentures issued in Upper or Lower Canada, payable to bearer, were declared to be transferable by delivery, and those payable to any person or order, by indorsement, the holder for the time being having the right to sue in his own name, and his title not being liable to be impeached if he was a bona fide holder for value without notice. Similar provisions are found in the municipal acts now in force in most of the provinces. See R. S. 0. c. 184, s-s. 405-414 ; ibid. c. 186, s, 13 : the Municipal Code, Quebec, Arts. 981-987 ; B. S. Q. Arts. 4629, 4630 : Muni- cipal Act of Manitoba, 1890, ss. 323-329; C. S. Man. c. 37, s. 104. The negotiability of municipal debentures may be restrained by inserting a provision requiring registration in the books of the corporation. They are usually issued for a term of years, with interest coupons attached. The debentures are under the seal of the corporation. It has been thought that on account of their being under seal they would not be treated as promissory notes, but in view of section 90 of the Act this would no longer be an objection. The coupons are generally in the form of ordinary promissory notes signed 'I ;li^ >■ il ijjHI^K •u'^K^^B .' id^P^H 1 H 1 m i '^H^H t «■ ' w. 'i 45(> BILLS OF EXCHANGE ACT, 1890. by one of the officers who executes the debentures. Deben- tures may be for $100 each or any larger sum. In Ontario such debentures have been held to be nego- tiable, and bona Me holders for value have been protected : Anglin v. Kingston, 16 U. C. Q. B. 121 (1857) ; Trust & Loan Co. v. Hamilton, 7 U. C. C. P. 98 (1857) ; Crawford V. Cobourg, 21 U. C. Q. B. 113 (1861); Sceally v. Mc- Galium, 9 Grant, 434 (1862). In Quebec they have been held to be negotiable like promissory notes, and in suing might be declared upon as such : Eastern Townships Bank v. Compton, 7 R. L. 447 (1871). See also Corporation of Roxton v. E. T. Bank^ Ramsay A. C. 240 (1882); Macfarlane v. St. Cesaire, M. L. R. 2 Q. B. 160 (1886) ; St. Cesaire v. Macfarlane, 14 S. C. Can. 738 (1887) ; County of Ottawa v. M. 0. & W. Ry. Co. Cassels' Dig. 126 (1886) ; Pontiac v. Ross, 17 S. C. Can. 406 (1890). In the United States, such municipal bonds, negotiable in form, notwithstanding they are under seed, are clothed with all the attributes of commercial paper, pass by delivery or indorsement, and are not subject to equities (where the power to issue them exists), in the bands of holders for value before maturity without notice : 1 Dillon, Municipal Corporations, 4th ed., §§ 486, 513. See Cromwell v. Sac Co.. 96 U. S. 51 (1877). Decisions conflict as to whether coupons are entitled to grace. The weight of authority is in favor of their being payable on the very day of maturity without grace : 2 Daniel, §§ 1490rt, 1506. Coupons dishonored bear interest from their maturity : R. S. 0. c. 44, 8. 86 (2) ; C. C. 1069, 1077. Debentures of other Corporations.— Most railway and other commercial companies incorporated by special Dominion or Provincial Acts are authorized to issue bonds OTHER NEGOTIABLE INSTRUMENTS. 457 Deben- le nego- )tected : Trust & rawford V. Mc- ible like upon as . L. 447 1^. Bank, Cesaire, 3farlane» 0. & W. 17 S. C. gotiable clothed delivery here the ders for unicipal 1 V. Sae [titled to ir being race : 2 (aturity : [railway special le bonds or debentures to a certain extent which foim a first charge on the undertaking. Companies incorporated by Dominion Letters Patent may also issue bonds or debentures for borrowed money: R. S. C. c. 119, s. 37. It is not as yet well settled whether they are negotiable instruments in the full sense of that term. In Ontario, by R. S. 0. c. 122, s. 9, bonds and debentures of corporations if payable to bearer are transferable by delivery, and if to order by indorsement and delivery, and the holder may sue in his own name; but the Act is silent as to whether they are free from the equities attaching to them if transferred before maturity. Other provinces have similar provisions. See Bank of Toronto v. Cobourg P. & M. Ry. Co., 7 0. R. 1 (1884), where bonds are compared to promissory notes; and Desrosiers v. Montreal P. & B. Ry. Co., 6 L. N. 388 (1883), as to coupons. In England such bonds and debentures of both home and foreign companies have frequently come before tlie courts. Even when made payable to order or bearer, the courts have sometimes denied the right of the transferee to sue in his own name. It is necessary, in addition, to show that the property is considered to be vested in him by delivery according to the usage of trade in England. Again, a transferee may be able to sue in his own name, but the transfer, even before maturity, may be subject to equities. Such debentures have been spoken of as "con- tractual," and not "negotiable" instruments, the latter term being reserved for instruments like bills and notes, which a bona fide holder for value before maturity takes free from equities. See on this point, Simmons v. London Joint Stock Bank (1891), 1 Ch. at p. 294. For a full discus- Bion of the position of such bonds or debentures in England, see re Blakely Ordnance Co., L. R. 3 Ch. 154 (1867); re Natal Investment Co. ibid. 355 (1868); re General Estates TTT^rr >■:::: 458 BILLS OF EXCHANGE ACT, 1890. Co. ibid. 758 (1868j; re Imperial Land Co., L. R. 11 Eq. 478 (1870); Webb v. llerne Bay Commissioners, L. R. 5 Q. B. 642 (1870); Crouch v. Credit Foncier, L. R. 8 Q. B. 374 (1878); re Romford Canal Co., 24 Ch. \). 85 (1883); Simmons v. London Joint Stock Bank |l891j , 1 Ch. 271; Buckley's Companies Acts, (Jth ed., pp. 351)-302. It will be seen from the reports of these cases that holders have been allowed in certain instances higher rights on account of the companies being insolvent, and in others, parties on account of their own conduct or representations, have been estopped from denying the negotiability of instruments which might, not have been held to be negotiable in other circumstances. In the United States such bonds, as well as those issued by the Federal and State governments and by municipali- ties, if made payable to order or bearer, are generally con- sidered to be negotiable in the highest sense of that term, as are also the interest coupons : 2 Daniel, §§ 1486-1517«. Company Shares or Stock.— Where certificates are issued to represent such shares or stock they are not recog- nized in England as being negotiable. See Swan v. N. B. Australasian Co. 2 H. .^' C. 175 (1868); France v. Clark, 26 Ch. D. 257 (1884) ; Lcudon County Bank v. River Plate Bank, 20 Q. B. D. 232 (1887) ; Sheffield v. London Joint Stock Bank, 18 App. Cas. 333 (1888) ; Williams v. Colonial Bank, 38 Ch. D. 38S ^1888). In the United States they are not considered to be negotiable; but iiic said to be "quasi-negotiable" or assignable, being generally subject to certain restrictions in the charter or by-laws of the company. See 2 Daniel, §§ 1708. 1709. Bank Deposit Receipts. — The instruments of this character which were in question in the earlier Canadian . 11 Eq. 8, L. R. l. 8 Q. B. i (1883); Ch. 271; ises that ■8 higher veut, and nuluct or lying the lave heen ose issued lunicipali- rally con- that term, 3G-1517<«. cates are not recog- V. N. B. V. Clark, iver Plate idon Joint Colonial OTHER NEOOTIAHLE INSTRUMKNTa. cases had not the words " bearer " or " order," and it was held that the holder could not recover in hiu own name. See Mander v. Royal Canadian Bank, 20 U. C. C. P. 125 (1869); Bank of Montreal v. Little, 17 Grant, 313 (1870); Lee V. Bank B. N. A., 30 U. C. C. P. 255 (1879). In Voyer v. Richer, 13 L. C. J. 213 (18G9), the Quebec Courts held that even where the receipt was payable to order it was not negotiable. In the Privy Council, L. R. 5. P. C. 4()1 (1874), it was said there was "high authority in favor of considering it to be negotiable," but the case was decided on another ground. In re Central Bank 17 0. R. 574 (1889), it was held that the bank which had issued such a receipt payable to order was estopped from deny- ing its negotiable character. Such instruments are treated as negotiable in the United States, except in Pennsylvania. Circular Notes. — These are negotiable in England: Conflaus Quarry Co. v. Parker, L. R. 3 C. P. at pp. 10 and 12 (1867). A letter of credit is not a negotiable instrument : Orr V. Union Bank, 1 Macq. H. L. at p. 528 (1854); British Linen Co. v. Caledonian Ins. Co., 4 Macq. 107 (1861). Nor is a post-office money order : Fine Art Society v. Union Bank, 17 Q. B. D. at p. 713 (1886). 459 red to be iable " or estrictions 2 Daniel, 8 of this Canadian JM 460 ' FIRST 8CHEDULR. Form f. M FIRST SCHEDULE. Sec. 93, s-s 4. Form A. NOTIN(* FOR-ACCEPTANCE. {Copy of Bill and Indorsements.) On the 18 , the above bill waa, by me, at the request of , presented for acceptance to E. F., the drawee, personally {or, at his resi- dence, office or usual place of business), in the city (town or village) of and I received for answer, " " ; The said bill is therefore noted for non-acceptance. A. B., Notary Public. {Date and place.) 18 . Due notice of the above was by me served upon | ^ :~'' I ^^^^'lindoSer.j P^'^^^'^'^^y' o" *^^ ^*y ^f {or, at his residence, office or usual place of business) in , on the day of {or, by de- positing nuch notice, directed to him, at , in Her Majesty's post office in the city [town or village] , on the day of , and prepaying the postage thereon. .) (Date and place.) A. B. Notary Piddic. 18 ~fr- 11 was, by sented for it his resi- city (town noted for Public. n A. B., C. D.J ess) in or, by de- ,in )], on ^e postage IPuhlic. FORMS. 401 Form B. ^o"" » I'ROTKST FOK NON-ACCEPTANCK OR FOR NON-PAYMENT OF A BILL PAYABLE GENERALLY. {Copy of Hill and indoi'seinenta.) On this day ot , m the year 18 , I, A. B , notary public for the Province of , dwelling at , in the Province of , at the request of , dii exhibit the original bill of exchange, whereof a 1 -LL ^ Ti i,T i.1 f drawee \ true copy is above written, unto h. t ., the t jiccgvjfoi' thereof personally {or, at his residence, office or usual place of business) in , and, speaking to himself (or his wife, I • 1 1 1 • i. i. X ]• 1 1 A ' acceptance | his clerk, or his servant, etc.), did demand , „„, ' ,,l thereof ; unto which demand , ^^^^ answered: " ". Wherefore 1, the said notary, at the r( (juest aforesaid, have protested, and by these presents do protest against the acceptor, drawer and indorsers {or draw v and indors- ers) of the said bill, and other parties thereto or therein concerned, for all exchange, re-exchange, and all costs, damages and interest, present and to come, for want of ( acceptance ) , ,, -j i .n , payment j ""^ ^^'^ «*"^ ^'"• All of which I attest by my signature. (Protested in duplicate.) A. B., Notary PiiliUc. Form C. PROTEST FOR NON-ACCEPTANCE OR FOR NON-PAYMENT OF A BILL PAYABLE AT A STATED PLACE. {Copy of Bill and Indorsements.) On this day of , in the year 18 , I, A. B., notary public for the Province of , dwelling 'iiii Kl'i FIRST SCHEDULE. I. Form c. (^f; ^ jn ^1,^ Province of , at the request of , (lid exhibit the ori<];inal hill of exchange, whereof a true copy is above written, unto E. F. the I drawee ! thereof, at , beius the stated I acceptor i place where the said hill is payable, and there, speaking . 1- 1 1 1 ' acceptance ) *<5 '^''^ ^^e'"*^"^^ ( payment ] of the said bill ; unto whicli demand he answered : " ." Wherefore I, the said notary, at the request aforesaid, have protested, and by t)iese presents do protest against the acceptor, drawer and indorsers (or drawer and indors- ers) of the said bill, and all other parties thereto or therein concerned, for all exchange^ re-exchange, costs, damages and interest, present and to come, for want of i «« yment of the said bill. All of which I attest by my signature. (Protested in duplicate.) A. B., Form 1). PROTEST FOR NON-PAVMKNT OF A 1111,1, NOTED, HJ T NOT PROTKSTKI>, FOR NON-ArrKI'TANTi:. If (he protent ix nidth- hj llw same notani who noted the bill, it shonlil iinmcdidti'ly follow the net of noting and memorandum of scrrice thereof, and he(jin with the worth "and afterwards on, etc.," rontinuin;/ as in the last prered- in A. Notarl {Place and date of Notuiff or of Protest.) ^ i2nd. To C. D. (indorser), {or F. G.) at Sir, Mr. P. Q.'s bill of exchange for $ , dated at , the , upon E. F., in your favor {or iu favor of €. D.,) payable days after ■\ ^^^^ ' | and by you indorsed, was this day, at the request of , , , f noted 1 , , ( non-acceptance. "| ^"'y \ protested } ^y °^« ^^^ | non-payment. | A. B., Notary Public, Form H. NOTARIAL NOTICE OF PROTEST FOR NON-PAYMENT OF A NOTE. {Place and date of Protest.) To at 405 Form O. Sir, Mr. P. Q.'s promissory note for $ , the dated, at ( days ] payable months : after date to ion ) days I E F I ^^ order, and indorsed by you, was this day, at J m'c.b.e.a. — 30 IP m M\ ■ ' .■ lii ;;|- . ' ., (i:^ •■^ 466 ronn H. the request of payment. I I FIRST SCHEDULE. , duly protested by me for non- A. B., Notary Public. Form I. NOTARIAL SERVICE OF NOTICK OF A PROTEST FOR NON-ACCEPTANCE OR NON-PAYMENT OF A BILL, OR OF NON-PAYMENT OF A NOTE. {To hi' suhjaiui'd ti> the I'mtrst.) And afterwards, I, the aforesaid protesting notary pubUc, did serve due notice, in the form prescribed by law, , ,, , . i. i. ir ■ non-acceptance ) , ,, of the foregoing protest for , „on-payment | ^^ ^^'^ f bill ] .. , All f P- Qm 1 ., f dra\ver ) I note j ^^'''^^y ^'^^'^^''^ "1^^» I C. ll, j,*^^^ I indorsers j personally, on the day of {or, at his residence, office, or usual place of business) in , on the day of ; (or, by depositing such notice, directed to the said ' P- P SECOND SCHEDULE. ENACTMENTS REPEALED.— Sec. 95. Province and Chapter. Dominion of Cafiada : Chap. 128, 'Revised Sta tutes Province of Quebec : Civil Code of Lower Can- ada Nova Scotia : Revised Statutes, third series, chap. H'2 New Brunswick: Revised Statutes, chap, 116 30 Vict., 1867, chap. 34. Title of Act and extent of repeal. An Act respecting Bills of Exchange and Promissory notes. — The whole Act. Articles 2,'i79 to 2,354, both inclusive [*] . " Of Bills of Exchange and Promissory Notes." Section 2. The other sections of this chapter have been heretofore re- pealed. " Of Bills, Notes and Choses in Action." Section 2. The other sections of this chapter have been heretofore repealed. An Act to amend chap. 116 of the Revised Statutes, " Of Bills, Notes and Choses in Action ; " also Act 12th Victoria, chapter 39, relating thereto. Section 1. ['Except in so far as such articles, or any of them, relate to evidence in regard to bills of exchange, cheijues and promissory notes.] t> i repeal. APPENDIX r. Kcliange and le Act. lusive [•]. Promissory her sections iretofore re- in Action." 3ns of this repealed. bhe Revised d Choses in ria, chapter 1. to evidence Fomrs. No. 1. Inland Bill of Exchaxge.—Secs. .S, 4. Form 1. $475.50. Thr Toronto, 1st March, 1892 i'hree months after date pay to the order of E. F & Co four hundred and sevcnh-.flvp --^ t> n i ' ' «iiu fce\cnt3nAe v„t> roDaip, vttJre received To Afessrs. C. I). S: Co., Montreal. received A. B. No. 2. Foreign Bill of Exchange.— 8ecs. 8, 4. Exchange for il200 Stg. Toronto. 10th Fehruary, 1892. At sight of this First of Exchange (Second and Third Poundl sH- '""^ '''" '' ^- ^' "^ ^-' *^« hundred I'ounds Sterhng, value received. To the Bank of Montreal, London, Eng. A. B. 1^ w 470 Form 8. APPENDIX I. No. 3. ^ii r Foreign Bill of Exchange. — Secs. 3, 4, 9. i'lOO. Liverpool, 25th February, 1892. Sixty days after date pay to our order one hundred Pounds, value received, at current rate of exchange for banker's sight draft on London. C. D. & Co. To Messrs. A. B. & Son, Toronto. No. 4. Foreign Bill of Exchange. — Secs. 3, 4, 9. $500. Chicago, lat March, 189;".. Thirty days after date pay to the order of the First National Bank, five hundred Dollars, with exchange on New York, value received, and charge to account of The A. B. Co. Per C. D., Manager. To E. F. & Co., Toroiito. FORMS. Cheque Crossed $250.26. No. 5. GeNER. liLY. — Negotiable.- 3ecs. 72 , 75. 471 Form 5. MpNTREAL, 1st March, 1892. To the Merchants' Bahk. Pay to E. F., or orier, two hjandrod and fifty Dollars. I A. B. No. 6. Cheque Crossed pPECiA3jLt. — Not Negotiable. — $575. ^cs.|72 , 75. ^ o 'oRONTO, Ist March, 1892. To the Canadian B^nk^ otCJommerce. Pay to E. r. or Dollars. Qi^er fiv( hundred and seventy-five A. B. I ^ No. 7. Inland Promissory Note. — Secs. 82, 71 (e), 14(2) (6). !?250.75. Toronto, 26th February, 1892. Due 30th June. Four months after date I promise to pay to the order of E. F., at the Molsons Bank, Montreal, two hundred iind fifty iVx7 Dollars, value received. A. B. 472 APPENDIX I. Pom 8^ No. 8. Foreign Promissory Note. — Sech. 82, 71 {c). Montreal, 18th January, 1S\)2, Drr, 20th FEnnuAiiv. $600. One month after date I promise to pay to the order of U. S., at the First National Bank, New York, five hundred Dollars, value received. A. B. No. 9. Notarial Note, en brevet. — See p. 440. On the first day of March, one thousand eight hundred and ainety-two, before Mtre. Jacques Cartier Leclerc, the undersigned Notary Public for the Province of Quebec, residing in the parish of Notre Dame, in the district of Montreal, personally appeared Jean Baptiste Deschamps dit Sarrasin, farmer, and Louis Dubois, son of Pierre, lumberman, both of said parish, who acknowledged them- selves to be indebted to Napoleon Leriche, of the village of St. Mathieu, in said district, capitalist, in the sum of one hundred dollars, value received, which sum they promise jointly and severally to pay to said Napoleon Leriche, or order, in one year from the date hereof with interest at the rate of eight per cent., and with interest at the same rate on interest and principal if not paid when due. Whereof Acte required and granted en brevet. F0BM8. 473 Thus done and passed in the office of said Notary, the ^o"" *- day, month and year first above written, and after reading hereof the said Sarrasin has signed, and the said Dubois has declared he cannot write his name and bas made his mark, the whole in the presence of said notary who has signed. J. C. Leclerc, N. P. J. B. Sarrasin, hia Louis X Dubois mark. No. 10. Notarial Act of Honor. — Sec. ()7, s-k. 3, 4. On the fourth day of March, one thousand eight hundred and ninety-two, I, John Smith, Notary Public for the province of Ontario, dwelling at the City of Toronto, in said province do hereby certify that the original bill of exchange for five hundred dollars annexed to the protest thereof on the other side hereof written, was this day exhibited to C. D., of Toronto, agent, who declared before me that he would pay the amount of the said bill and protest charges for the honor of A. B., the last indorser thereof, holding the drawer and indorsers and all other proper persons responsible to him the said C. D. for the said sum and for all interest damages and expenses. I have therefore granted this notarial act of honor accord- ingly. Which I attest, [Seal.] John Smith, N. P. m h^. APPENDIX II STATUTES. A U. IHHO. §1. On what diiys bills and notes shall niHtiire. Wlifn hiKt (lay of «iacf is a non- juriilical day. REVISED STATUTES OF CANADA, CAP. 128. An Act respecting Bills of Exchange and Promissory Notes. [Came into force Marc)i lat, 1887 ; repealed, September Ibt, 1890, by the Bills of Excliajifje Act, sectiou 5)5.] TTEK MAJESTY, by and with the advice and consent of the Senate and House of Com- mons of Canada, enacts as follows : — 1. Every bill of exchange or promissory note which is made payable at a month, or months, from and after the date thereof, shall becomo due and payable on the same numbered day of the month in which it is made payable aa the day on which it is dated, — unless there is no such day in the month in which it is made payable, in which case it shall become due and payable on the last day of that month, — with the addition, in all cases, of the days of grace allowed by law. 85 Vict. c. 10, s. 1. 2. Whenever the last day of grace, in respect of i .«^ - ment of a bill of exchange or a promissory note, fal. on a legal holiday or non-juridical day in the Province where any such bill or note is payable, then the day next following not being n legal holiday or non-juridical day in such Province shall be the last day of grace as to such bill or note. 35 Vict. c. 8, 8. 8, part; 42 Vict. c. 47, a. 4. REVIBBD BTATUTE8 OF CANADA. 475 Jl> In all matters relating to bills of exchange and pro* § 3, inissory notes, the following and no other shall be observed :^, as legal holidays or non-juridical days, that is to say; — iuys.'"*' (d) In all the Provinces of Canada, except the Province RUewhere ' thftii ill of Quebec : — yueboo. Sundays ; New Year's Day ; Good Friday ; Easter Mon- day ; Chrietnias Day ; the birthday (or the day fixed by pro- clamation for the celebration of the birthday) of the reign iiig Sovereign ; the first day of July (Dominion Day), and if that day is a Sunday, then the second day of July as the same holiday. Any day appointed by proclamation for a public holi- day, or for a general fast, or a general thanksgiving tiiroughout Canada ; and the day next following New Year's D'ly and Christmas Day, when those days respectively fall on Sunday ; (It) And in the Province of Quebec the said days, and i„ Quebec, also — Tbe Epiphany ; The Annunciation ; The Ascension ; Corpus Christi ; St Peter's and St Paul's Day; All Saints' Day; Conception Day; (c) And also, in anyone of the Provinces of Canada, Days nxea any day appointed by proclamation of the Lieutenant Gov- nmtion. pvMor of puch Province, for a public holiday, or for a fast tbiiiiksgiving within the same. 8.5 Vict. c. 18, s. 8, part; Vict. c. 47, 8. 3; 4G Vict. c. 20, e. 11. 4. No acceptance of any bill of exchange shall be suffi- Acceinmico cient to bind or charge any person, unless such acceptance wiihiih on ... ..I'll -I'll • ,^ , tllO hill. IS in writing on the bill, or if there is more tlian one part 01 such bill, n on one of the said parts. C. S. U. C. c. 42, .s 7 ; C. i- b. C. c. 64, s. 5 ; 28 Vict. (N. S.) c. 10, s. 5 ; 1{. S. N c. 116, a. 4; 27 Vict. (P. E. 1), c. 6, s. 2. • h § 5. What 111)- t ice of protest or tliHllOIIOl' --hall l>t> HnHlcient. on bills luiyiiMe III ('niiiida or Ncw- foiiiiilland 476 APPENDIX II. <$• Notice of the protest or dishonor of any hill of ex- change or promissory note payahle in Canada shall be sufficiently given, if it is addressed in due time, to any party to such bill or note entitled to such notice, at the place at which such bill or note is dattfl, unless any such party has, under his si+:jnature, on such bill or note, desig- nated another [)lace, and in such latter case such notice sliall be sufficiently given if addressed to him, in due time, at such other place; and such notices so addressed shall be sufficient, although the piac c of residence of such party is other than either of such before mentioned places. B7 Vict. c. 47, 8. 1. 0. No damages hIuiU be recoverable in any action, suit or proceeding brought in any Province of Canada upon any bill of exchange drawn upon any person at any place in Canada or in the Island of Newfoundland against any [)arty thereto, <^xcept for the amount for which such bill of exchange is drawn, and for such further amounts as arise from the noting nnd protest of such bill of exchange and interest thereon, and exchange and re-exchange thereon. Aii.ionbiiis 2. No damages shall be recoverable in any action, suit iis.wiicio. or proceeding brought in any Province ot Canada upon nny bill of exchange drawn upon any i)erson at any place not being in Canada or in the Island of Newfoundland ngainst any party thereto, except for the amount for which such bill of exchange is drawn, and for two and one half p'^r cent, thereon, and for such further amounts as arise from the noting and protest of such bill of exchange and interest thereon, and exchange and re-exchai ge thereon. 38 Vict. c. 19, ss. 1 and 2. ofn'oi^ ^* ''^^^ ^*'^^ ^^ exchange and promissory notes drawn or ormllwili ™8'iii|)iiteiit f 1 • 1 • 1 • II • ' i. !• ii ri«iit to consideration oi wliicli consists, in wiiole or in part, of the ll.lVl' Ct'V- • 1 . t.iiii wonis purcbaso monev of a patent right, or of a partial interest. Mil its lauf. ^ ■ . , ... . limited goographically or otlierwise, in a patent right, shall have written or printed prominently and legibly across the face thereof, before the same is issued, the words " given fpr a patent right." 47 Vict. c. 38, s. 1. • Transfcroo to tuke ill- lit. The indorsee or other transferee of any such instru- stniiiieiit ment having the words aforesaid so printed or written riciit'of lie- thereon, shall take the same subject to any defence or set- oti in respect of the whole or any part thereof which would have existed between the original parties. 47 Vict. c. 38, 8. 2. ivnaity for ^^' Everyone who issues, sells or transfers, by indorse- "uch'fnstru. ment or delivery, any such instrument not having the words mfi'rkea!'*"** given for a patent right" printed or written in manner aforesaid across the face thereof, knowing the consideration of such instrument to have consisted, in whole or in part, of the purchase money of a patent right, or of a partial III REVISED STATUTES OF CANADA. 471) lange is inswick, 'rovince, ■ of such ed in all t of pre- ike maii- reisn bill i act as a ory note, the bank note, the rt, of the 1 h)tere8t, ijtht, shall icross the ' given ) instru- written ce or set- ich would ict. c. 38, indorse- the words manner jideration • in part, a partial interest, limited geographically or otherwise, in a patent § \^, right, is guilty of misdemeanor, and liable to imprisonment for any term not exceeding one year or to such fine, not exceeding two hundred dollars, as the court thinks fit. 47 Vict. c. 38, s. 3. 15. Section 16 to 2(5, both inclusive, apply to the Pro- iplS'Ii,, vince of Ontario only. '^ """*''"'• I0> If any person accepts a bill of exehanj'e, payable at f"""'"''' a bank, or at any other i)iirticular place, without further "".''>"" t'xpression in his acceptance or makes a promissory note payable at a bank, or at any particular ))lace without further expression in that respect, such acceptance and such promise shall be deemed and taken to be a p;oneral accept- ance and a general proiniHo respectively; (a) If the acceptor expresses, in his acceptance, that he '-*""''"•"'' accepts the bill payable at a bank, or at any other particu- ""'^,,'""* lar place only and not otherwise or elsewhere, or if the maker of a promissory note expresses in the body of the note that lie pronn'ses to pay at a bank, or at any other particular place only and not otherwise or elsewhere, then such acceptance or promise shall be deemed and taken to be a qualified acceptance or promise, and the acceptor or maker shall not be liable to pay the bill or note, unless payment has been first ^duly demanded at such bank or other place. C. S. U. C. c. 42, ss. 5 i.V: (5. IT". No bill of exchange or promissory note, although |*"'voi,H'r given for a usurious consideration, or upon a usurious J.',*;;.',',*;,!" contract, shall be void in the hands of an indorsee (or if *''^'*«» a note transferable by delivery, in the hands of a person who acquired the same as bearer) for valuable consideration, unless such indorsee or bearer had at the time of discounting or paying such consideration, for the same, actual know- A| * w 480 APPENDIX II. § 17. ledge that such bill of exchange or promissory note was originally given for a usurious consideration or upon a usurious contract. C. S. U. C. c. 42, s. 8. No vre- Heutineiit on iioti- iay^.'*'*' on any non -juridical day. C. S. U. C. c. 42, s. 19. 18. No bill of exchange shall be presented for acceptance FmUnter *** ^^ ^^^ promissory note payable only at some place fn*cemhr^ in the United States of America, or in some one of the dtBhonor-"" Provinces, Territories or Districts of C^ada other than ed notes. j(jg Provinces of Ontario and Quebec, or in the Island of Newfoundland, and not otherwise or elsewhere, is made or negotiated within the Province of Ontario, and is protested for non-payment, the holder shall, in addition to the prin- cipal sum mentioned in the note, recover damages at the rate of four per cent, upon such principal sum, and also interest thereon at the rate of six per centum per annum, to be reckoned from the day of the date of the protest, and such aggregate amount together with the expenses of pro- testing the note, and all charges and postages incurred thereon, shall be paid to the holder at the current rate of exchange of the day when the protest is produced and re-payment demanded, that is to say; the holder of any such note, returned under protest, may demand and recover from the maker or indorsers thereof so much current money of Canada as shall then be equal to the purchase of a bill of exchange of the like amount drawn on the same place at the same date or sight, together vith the damages and interest above mentioned, and also the expense of protest- ing the note, and all charges and postages incurred thereon. C. S. U. C. c. 42, s. 11 How rate *0. When the holder of a protested bill or note, re- sim'irht"*^'' turned for non-payment, riotifies the drawer, maker or aHcer a u jj^^Q^ggp q{ ^\^q dishouor thereof, in person, or delivers notice thereof, in writing, to an adult person at his or REVISED STATUTES OF CANADA. 481 their counting-house or dwelling-house, and they disagree t^ about the then rate of exchange for commercial bills, the — holder and the drawer, maker or indorser so notified, or any of them, may apply to the president, or, in his absence i to the secretary of any board of trade or chamber of commerce in the city or town in which the holder of such protested bill or note, or his agent, resides, or in the city or town nearest to the residence of such holder or agent, in which there is a board of trade or chamber of commerce, and obtain from such president or secretary a certificate in writing under his hand stating the said rate of exchange ; and the rale stated in such certificate shall be final and conclusive as to the then rate of exchange, and shall regulate the sum to be paid accordingly. C. S. U. C. c. 42, 8. 12. 20. 31. Every bill, draft and order drawn by any person in the Province of Ontario on any person in either of the Provinces of Ontario or Quebec, and every promissory note made or negotiated in the Province of Ontario, if protested for non-payment, shall be subject to interest from the date of the protest, or if interest is therein expressed as payable from a particular period, then from such period to the time of payment; and in case of protest, the expense of noting and protesting, and the postages thereby incurred shall be allowed and paid to the holder, over and above the said interest. C. S. U. C. c. 42, s. 13. IiiIhikI l)i!lt< iiiul notes to liear in- terest. 22. Every protest of inland or foreign bills of exchange ir.itoHt or promissory notes, for dishonor, either by non-acceptance iim.icM.i. or non-payment, may be made on the day of such dishonor, 'ii>'iion«.r. at any time after non-acceptance, or in case of non-pay- ment, at any time after the hour of three o'clock in thu afternoon. C. S. U. C. c. 42, s. 15. m'c.b.e.a. — 31 482 APPENDIX II. ■j?^.*' § 23. How in- tice of protest may be served. 23* A notice of such protest shall be sent to each of the parties to the bill or note, and such notice shall be deemed to have been duly served, for all purposes upon the person to whom the same is addressed, if it is deposited in the post office nearest to the place of making presentment of such bill or note, at any time during the day whereon such protest has been made, or the next juridical day then following. C. 8. U. C. c. 42, s. 16. protest' S'** Every such protest and notice may be according to tice."" the forms set forth in Schedule A to this Act, or to the like effect. C. 8. U. C. c. 42, s. 21, part. Notary's fees in Ontario. Certain statutes respect- ing small notes not in force in Ontario. S5* The fees to be taken by notaries public, for the services hereinafter mentioned, shall be as follows, and no more, that is to say ; for the protest of any bill, draft, note or order, fifty cents; for every notice, twenty-five cents; and for postage, the amount actually expended. C. S. U. C. c. 42. 8. 22; C. S. C. c. 67, s. 1. 36. The Act of the Parliament of Great Britain, passed in the fifteenth year of the reign of King George the Third, intituled: "An Act to restrain the negotiation of Promissory Notes and Inland Bills of Exchange, under a limited sum within that part of Great Britain called England," and the Act of the said Parliament passed in the seventeenth year of his said Majesty's reign, intituled : "An Act for further restraining the negotiation of Pro- missory Notes and Inland Bills of Exchange, under a limited sum, within that part of Great Britain called England," which are inapplicable to the Province of Ontario, shall not extend to or be in force therein, nor shall the said Acts make void any bills, notes, drafts or orders, which have been or may be made or uttered therein. C. 8. U. C. c. 42, s. 1. _ .,'1 ■■? 'V I REVISED STATUTES OF CANADA. 488 SB7. The following sections of this Act apply to the § 27. Province of Quebec only. Provl- sioDB ap- *2H. The several fees and charges mentioned in schedule to Quebec. B to this Act, relating to the protesting and noting ofNotary-H , lOOS in bills and notes in the Province of Quebec, together withQu'^ec. the postages prepaid upon notices deposited at any post- office, may be claimed from the holder of the bill or note by the notary or justice of the peace, performing such duties, and shall be recovered from such parties thereto as are liable for the payment of the same. C. S. L. C. c. 64, s. 21. 2». The several notings, protests, notices thereof, and quXV'" services of notices hereinbefore mentioned, shall be in the forma set forth in the said schedule. C. S. L. C. c. 64, s. 22. SIO. Every person who represents himself to be a notary Penalty for or justice of the peace in the Province of Quebec, and qualified who acts as such in and about the protesting of a bill or notes or protests note, or in and about the noting of a bill, not being such bins or notary for or justice in the Province of Quebec, is guilty of a misdemeanor, and liable to imprisonment for a term not exceeding six months. C. S. L. C. c. 64, s. 23. The articles of the Civil Code of Lower Canada relating to this subject will be found in the collection of Statutes not consolidated, and 2>o8t p. 486. Schedule A is the form of protest and notice formerly used in Ontario. Schedule B is the tariff for protests in Quebec, given ante p. 441. The Forms appended to this Act have become the first schedule to the Bills of Ex- change Act, 1890. 1] m i 484 APPENDIX II. CONSOIJ DATED lUJLKS OF PRACTICE. ONTARIO. IS ^^ li Rule 303. Rule 303. — The plaintiff may, at his option, join as All or parties to the same action all or any of the persons sever- lies lia- ally, or jointly and severally, liable on any one contract, one con- including parties to bills of exchange and promissory notes : may lie Judicature Act, Rule 93. Same as English Rule 1K75, joined. ' " 0. 16, r. 5, (1883, R. 128). Hy R. S. O. 1877, c. 50, s. 184, it was providtHl that all the parties to a bill or note might be joined in one action, but by section IHo the non-joinder of any joint drawer, maker, indorser, or acceptor might be pleaded in abatement. By the present rule it is optional with the plaintiti" in actions- on bills and notes, as well as in actions on any other contract, to proceed against any one or more of the parties jointly or severally liable. See >y Arcedeckne, Atkins v. Arcedeckne, 21 Ch. D. 709; Murray v. Gillett, 18 C. I.. J. 7H ; but one of siuh parties if sued alone is entitled to have his co-contractors joined; Pilley V. Robinson, 20 Q. R. D. 155. Under Chancery General Order 02, a plaintiff might seltct one or more of several persons liable. Inder the corresponding English Con. Order (VII. R. 2), it was held in Smith v. llors- fall, 24 Reav. H31, that if the plaintiff chose to sue all or some of them, and the suit became defective or abated by reason of a transmission of the interest of one of them, he could not after- wards proceed against the other. This gloss on the Order was described as highly technical : Gray v. Lewis, L. R. S Chy. 10,S5, 1052, and will not be imported by analogy into the present Rules Lloyd V. Dimmack, 7 Ch. D. 89><. In the latter case two of five defendants became bankrupt, and it was held that the action CONS0IiII»ATED lllLm OF PRACTICE. 485 rJCK. 11, join as 0118 stver- coiitract, ory notes: ule 1H75, hat all the on, but by r, indcrser, might procood a,i,minst tht- otliei' three without bringing tlieR«l«303. trustees of the bankrupts before the Court. For other restric- tions upon the application of Chy. (1. (). 02, .see Lewin, (ith Kd. 807. See also Wilson v. Uhodes, H Cli. D. 777. (Hohnested «c Langton, .Iiid. Aer. p. 9*21). I'liiintitt" sought in one action to get judgment upon two over- due promissory noies. and to obtain cxeculioii for this claim and a previously recovered judgment against two separate pieces of land conveyed by the maker of the notes to the two other defen- dants separately. Held, that these causes of action might be joined: Healou v. McKellar, IM Out. ['. II. f, lent Rules ;wo of five ;he action Iiiv CIVIL CODE OF LOWER CANADA, BOOK IV.— COMMERCIAL LAW. ■ ii-air* ja.; ■ ) Title I. — Of Billh of Exchange, Notes and Cheques. 0. c. 2279. [Came into force August Ist, 18G6 ; repealed September Ist, 1890, by the Bills of Exchange Act, s. 95, and second Schedule, except Articles 2341 and 2342 relating to evidence. 1 CHAPTER FIRST. BILLS OF EXCHANGE. Section 1. 0/ the nature and requisites of hills of exehamje. Article 2279. A bill of exchange is a written order by one person to another for the payment of money absolutely and at all events. — Pothier, Change, n. 3; 2 Pardessus, n. 330—; Smith's Merc. Law, 207-9; Bayley on Bills, 1 ; Story, B. E. n. 52, 53; 3 Kent, Com. 74; Cote v. Lemieux, 9 L. C. R. 221. 2280. It is essential to a bill of exchange — That it be in writing and contain the signature or name of the drawer ; — That it be for the payment of a specific sum of money only; — That it be payable at all events without any condition. — Author, under a. 2279. CIVIL CODE OP LOWER CANADA. 487 '2281. The partiea to a bill of exchange at the time of c o. aw. making it are the drawer of the bill and the payee. — The t^rawee becomes a party by acceptance and is then called the acceptor. — Indorsers, warrantors upon the face of the bill, the person requested to pay au hesoin who accepts, acceptors supra protest and holders also become parties. — Domnt, 1. 1, c. 16, s. 4; Poth. Ch. n. 17-27; 1 Nouguier, L. C. 148, 9 ; Bay. B. c. 1 , § 2— ; Sto. B. E. n. 35, 36, 264, 5. 2282. A bill of exchange may be made payable either to a certain person by name or other Buf!icient indication, or to such person or his order, or to the order of the drawer or to bearer. — If the name of the payee be left in blank the legal holder of the bill may fill up the blank.— Poth. Ch. n. 31, 223, 4; 1 Savary, P. N. 201; 1 Nou. L. C. 148; Roscoe, B. 2, 22; Sto. B. E. n. 54-57; C. S. L. C. c. 64, 8. 3 ; 0. 1673, t. 5, a. 1 ; C. Co. 110. 2283. If no time be specified in the bill for its pay- ment, it is held to be payable on demand; if no place be specified, it is payable generally. — C. S. L. C. c. 64, s. 9; C. S. C. c. 57, 8. 4. 2284. Foreign bills of exchange are usually drawn in sets of several parts, all of which the drawer is bound to deliver to the payee.— Poth. Ch. n. 37, 130 ; 2 Par. n. 342; lChit.&H.3; Bay. B. 30; Sto. B.E. n. 66; C. Co. 110. 2285. When a bill contains the words "value received," value for the amount of it is presumed to have been received on the bill and upon the indorsements thereon. The omission of these words does not render the bill invalid.— Poth. Ch. n. 34; 0. 1673, t. 5, a. 1 ; C. S. L. C. c. 57, 8. 4; Duchesnay, vs. Evarts, 2 Rev. 31; Hart v. Macpherson, Gir. L. C. 66; 8 L. C. R. Larocque & al, v. Franklin Bank, 328; Bay. B. c. 1, § 14, p. 40; Sto. B. E. n. 63; C. 989; C. Co. 110, 137. w i< 48B AITKNUIX II. Hi.-.,/ 0- 0. awe. Section 2. Of the negotiation of hills of exchange. 228G. BillB of exchange payable to order are trans- ferred by indorsement, which may be cither in full or in blank. When indorsed in blank, they become trans- ferable by delivery. Bills payable to bearer are transfer- able by delivery either with or without indorsement. — C. S. L. C. c. (54, 8. 3. 2287. The transfer of a bill bv indi-rsemcnt mav be made either before or after it becomes due. In the former case the holder acquires a perfect title free from all liabilities and objections which any parties may have had against it in the hands of the indorser; in the latter case the bill is subject to such liabilities and objections, in the same manner as if it were in the hands of the previous bolder.— Poth. Ch. n. 141; 2 Par. 352; Sto. B. E. n. 220; Bay. B. 162, 3; Wood, et al. vs. Shaw, 3 L. C. J. 175. 2288. An indorsement may be restrictive, qualified or conditional, and the rights of the holder under such indorsement are regulated accordingly. — But no in- dorsement other than that by the payee can stop the negotiability of the bill.— Bay. B. 126; Sto. B. E. n. 217; 8 Kt. Com, 90; 2 Par. n. 348; Chit. & H. 17. 2289. The holder may, at his option, strike out the last indorsement, although it be in full, and any prior indorse- ment in blank subsequent to that of the payee. — Bos. B. 285; 3 Kt. Com. 89; bto. B. E. n. 208. Section 3. Of acceptance. » 2290. Bills of exchange payable at sight, or at a certain period of time after sight or after demand, must be pre- sented for acceptance. — The presentment is made by the CIVIL CODE OF LOWER CANADA. I8!> liulder, or in his behalf, to the drawee or his representa- ° ^ "'* tive, at his domicile or place of hiiainesa, or if the dniwee be dead or cannot be found, and is not represented, {•resentment is made at his last known domicile or place of business. — If there be also a drawee an hvaoiu, present- nunt is made to him in like manner.- -I'oth. Ch. n. 1!J7, H(); 1 Nou. 220, n. 3; 2 Par. n. 858, M'l, 3H1 ; Bay. Ji. 244,5; Hto. JJ. K. n. 228, 22<>. 2;l5, 254; Chit. h. HOI (H Kd.); C. S. L. C-c. 04, s. 15, § 2; C. Co. 17:J ; C. :i308. 221H. I'resentment for acceptance when necessary must be made within a reasonable time from Ihe makinj? of the bill according to the usage of trade and the discretion of the courts.— Poth. Ch. n. 148 ; Sto. B. K. n. 281. 2202. Theaccoptance must be in writing upon the bill or upon one of the parts of the bill. — C. S. L. C. c. 64, s. 5. 2298. The acceptance must be absolute and uncon- ditional, but if the holder consent to a conditional or quali- fied acceptance the acceptor is bound by it. — Poth. ('h. n. 47-49; 0. 1673, t. 5, a. 2; 2 Par. n. 370, 372; Bay. B. 201, 202; Sto. B. E. n. 240. 2294. The effect of acceptance is to oblige the accep- tor to pay the bill to the holder according to its tenor. — The signature of the drawer is admitted by the accep- tance and cannot afterwards be denied by the accep- tor against a holder in good faith. — Poth. Ch. n. 44, 115- 117; Hein. de camb. c. ^ 26—; c. 6, § 5; 2 Par. n. 376; Sto. B. E. n. 113, 261, 262; Bay. B. 318, 319. 2295. When a bill has been accepted and delivered to the holder the acceptance cannot be cancelled otherwise than by the consent of all the parties to the bill. — Poth. Ch. n. 44; 1 Sav. P. N. 840; 2 Par. n. 877; Bay. B. 208— 3 Kt. Com. 85. 490 APPENDIX H. i 0. 0. aa>6. 2296. When a bill has been protested for non-accep- tanco or for non-payment it may with tho consent of the holder be accep*;ed by a third person for the honor of the parties to it or of any of them. Such acceptance benefits the parties only who are subsequent to the one for whose honor it is made. — Poth. Ch. 113, 114, 170, 171 ^ Jou. O. 1673, t. 5, a. 3, 75; 2 Par. n. 383, 388; Bay. B. 176-180; Sto. B. E. n. 121, 122, 123, 125; 3 Kt. Com. 87; C. Co. 126. 2297. An acceptor supra proteat is bound to give notice of his acceptance without, delay to the party for whose honor he accepts and to other parties who may be lial)le to him on the bill. — Poth. Ch. n. 113, 114; Jou. 0. 1673, t. 5, a. 3, 75, 76; 2 Par. n. 386; Bay. B. 179, 180; Sto. B. E. n. 124, 256; C Co. 127. Section 4. Of iiotintj (ind prntcst /or uon-ttfccptaiu'^!. 2298. Whenever acceptance of a bill of exchange is refused by the drawee the bill may be forthwith pro- tested for non-acceptance, and after due notice of such protest to the parties liable upon it, the holder ma}' demand immediate payment of it from such parties in the same manner as if the b'll had become due and had been protested for non-payment. — The holder is not bound afterwards to present the bill for payment, or, if it be so presented, to give notice of the dishonor. — C. S. L. C. c. 6 i, 8. 10. 2299. The holder of any bill of exchange, instead of protesting upon the refusal to accept, may at his option cause it to be noted for non-acceptance, by a duly (]uali- ficd notary; such noting to be made underneath or to be indorsed upon a copy of the bill and kept upon record by the officiating notary. — lb c. 64, s. 12. CIVIL code; of lower CANADA. 401 on-accep- msent of honor of cc^ptance > the one 170, 17 U ; Bay. B. Com. 87; d to give party for may be 4; Jon. 0. 179, 180; change is with pro- se of such ilder may ties in the had bee» lot bound ' it be so .C.C.C4. instead of lis option uly (juali- or to be record by 2300. When a bill which has been noted for non- « c. am acceptance as provided in the last preceding article is afterwards protested for non-payment, a protest for non- acceptance need not be extended, but the noting, with the date thereof and the name of the notary by whom the same was made, must be stated in the protest for non- payment. — lb. c. 64, 8. 12. 2301. Upon every bill noted or protested for non-accept- ance, the words "noted for non-acceptance," or "protested for non-acceptance," as the case may be, together with the date of noting or protesting, and his fees and charges, must be written or stamped by the officiating notary, and subscribed by him with his name or initials as such notary. — lb. c. 64, s. 12. 2802. When a bill is noted for non-acceptance the holder is not bound to give notice of the same in order to hold any party liable thereon. But whenever a bill so noted is afterwards protested for non-payment, the notice o* such protest must contain a notice of the previous noting for non-accoptance. — lb. c. 64, s. 20. 2303. The noting and protesting of bills of exchange for non-acceptance and the giving notice tbereof, are \. mc by the ministry of a single public notary without witnesses, in the manner and nccordinfr to the forms prescribed by the act intituled: An <(ct irHpeelinif hilh of crchtnifje ami promisHorjf notes. — lb. c. 64, s. 11, 22; C. 1209. 2304. In case there is no notary in the place, or he is unable or refn-^cs to act, any justice of the peace in Lower Canada may make Buch noting and protest and give notice tiiereof in the same manner, and bis acts in that behalf have the same etfect as if done by a notary ; but such justice must set forth in the protest the reusons why tlie same was not made by the ministry of a notary, —lb. c. 64, 8. 24. 492 C. C.2306 m APPENDIX II. 2305. The duplicate protest and notice, with the certi- ticnte of service, and all copies thereof attested hy the sig* natures of the notary or the justice of the peace, as the case may he, are }triin(i facie evidence. — Ih. c. 64, s. 14,24; C. S. C. c. 57, s. «. Section 5. 0/ payment. 230(5. Every hill of exchange must he presented hy the holder, or in his hehalf, to the drawee or acceptor for payment, on the afternoon of the third day after the day it hecomes due, or after presentment or acceptance, if drawn at sight; unless such third day fall upon a legal holiday in which case the next day thereafter not heing a legal holiday is the last day of grace. If the hill he payahle at a hank, presentment may he made there either within or after the usual hours of hanking. — If the hill he unaccepted and there be a drawee nu heaoiH, pre- sentment must he made in like manner to him also. — C. S. L. C. c. 64, 8. 6, 15, 32; C. S. C. c. 57, .. 5; Poth. €h. n. 137; Chit. B. 187, 188, 262; Sto. B. E. n. 65; 3 Kt. Com. 88; 2 Par. n. 341. 2307. If a hill of exchange he made payable at any stated place, either by its original tenor or by a qualified acceptance, presentment, must be made at such place. — C. S. L. C. c. 64, 8. 9, 15; C. S. C. c. 57, b. 4. 2308. If the bill be payable generally, presentment is made to the drawee or acceptor, as the case may be, either personally, or at his residence, or office, or usual place of business; or if by reason of his absence and not having any known residence, or office, or place of business, or of his death, such presentment cannot be so made, it may be made at his last known residence, or office, or usual place of business, where the acceptance, or, CIVIL CODE OF LOWER CANADA. 49a le certi- the sig- , as tbe .14.24; iutt'd by acceptor after the ceptance, )n a legal lot being [ tbe bill ide tbere r.— If tbe goin, pre- 11 albo. — 5; Potb. n. ♦>5 ; B ^le at any qualified [cb place. ^sentment (jase may lotttce, or sence and place of Inot be so Idence, or Itance, or, if there be no acceptance, where the bill bears date. — c. c. aaos. C. S. L. C. c. 64, § 2. 2300. If a bill payable generally be accepted before and become due after the appointment duly notified of an assignee to the estate of the acceptor, in the case of an insolvent trader, presentment for payment may be made either to the insolvent or to the assignee personally, or at the residence, or oftice, or usual place of business of either of them. — lb. s. 18. 2310. Tbe acceptor, drawer, and indorsers of a bill of exchange are jointly and severally liable to the bolder for the payment of it. — The liability of the drawer and indorsers and also of acceptors supra protest, is subject to the rules concerning protest and notice herein con- tained.— Potb. Ch. n. 58, 79, 117; Sto. B. E. 107. 108, r'3-118andcit.; C. Co. 140. 2311. A third person who becomes warrantor on a bill of exchange, is liable in tbe same manner and to the same extent as the person in whose behalf he ho be- comes warrantor. — He is bound by tbe diligence which I)ind8 his principal, and is not entitled to any notice of protest apart from the latter. — Potb. Ch. n. fiO, 122, 123 ; I Sav. P. N. 205, 2 lb. J)4 ; 2 Par. n. 3<)4, BDC), 307 ; Jou. 0. H;73, a. 33, p. 131, 132 ; Sto. B. E. n. 872, 303-5, 454 ; Sto. P. N. n. 4(50, 184; 1 Bell, Com. 376 ; C. Co. 141, 142; Marrett vs. Lynch, L. C. 11. 353 ; 10 Lou H. (0. S.) 374. 2312. The obligation of the acce[)tor to pay the bill is primary and unconditional, and legal uayment by him discharges tbe bill with respect to all tbe parties, i\nle.s8 be is an acceptor for honor, in which case be is substituted ni the place of tbe party for whose honor he accepts and has his recourse against such party also. — Tbe rule above declared is without prejudice to the rights of 494 APPENDIX II. .m ^- 23" au acceptor against the party for whose accouituodation he has accepted.— 2 Noii. 342, 343 ; Sto. B. E. n. 25G, 257, 410, 420, 422 ; C. 2310. 2313. Payment by the drawer of au unaccepted bill finally discharges it. If it be accepted he is entitled to recover from the acceptor, unless the acceptance is for his accommodation. — C. 2310; 2 Nou. 350; Sto. B. E. D. 422. 2314. Payment by an indorser entitles him to recover from the acceptor and drawer and all the indorsers prior to himself; saving the rights of the acceptor for his accommodation. — Author, under a. 2313. 2315. Payment of a bill must be made upon that part of the set upon which the name of the party paying appears, and such part should be delivered to him, other- wise he will not be discharged from his liability to inno- cent holders of such part of the bill. — C. Co. 145, 147. 2316. Payment of a lost bill of exchange may be recovered upon the holder making due proof of the loss, and aleo, if the bill be negotiable, on giving security to the parties liable, according to the discretion of the court. Jou. 0. 1673, t. 5, a. 18, 19, 111 ; 2 Bor. 591; Sm. M. L. 28d, 286; Sto. B. E. n. 447—; lb. P. N. n. 106—; C. 1238; C. 150-153. 2317. Payment may be made of a bill of exchange after protest, by a third person for the honor of any party to it, and the person so paying has his recourse against the party for whom he pays and against all those liable to such p«jrty on the bill. — U the person paying do not declare for whose honor he pays, he has his recourse against all the parties upon the bill.— Poth. Ch. n. 170, 171 ; 2 Par. n. 405 : 1 Bell, Com. 312, 384; C. 1141 ; 0. Co. 15b, 159. OIVIL CODE OF LOWER CANADA. 495 Qodatioa 256, 257, pied bill atitled to ice is for u. B. E. 2318. Payment of a bill must include the full amount^- 5 ^'H of it with interest from the last day of grace and all expenses of noting, protest and notices legally incurred upon it, with damages in the cases hereinafter stated. — C. S. L. C. c. 04, 8. 7, 21. Skction (5. to recover sers prior r for his i that part •ty paying inj, other- y to inno- ,147. may be |f the loss, lecurity to court. im. M. L. 1 — ; C mge after party to jgainst the liable to tot declare Inat all the ir. n. 405 ; Of protest for non-payrnvnt. 2319. Bills of exchange after presentment for pay- ment, as provided in the fifth section of this chapter, if not then paid, are protested for non-payment, in the afternoon of the last day of grace. — The protest is held to have been made in the afternoon of the day on which it bears f^^\f' unless the contrary appears on the face of it. — C. 2306, 2307, 2308, 2309; C. S. L. C. lb. s. 16, § 2, 8. 17, § 2. 2320. Protests for non-payment are made by the ministry of the same persons and in the same manner and form as protests for non acceptance, and are subject to the same rules of proof. — If the bill has been noted for non-acceptance it must be so stated in the protest for non-payment, as declared in article 2300.— C. 2302, 2303, 2304; C. S. L. C. c. 64, s. 11, 14, 20, 22. 2321. Bills drawn abroad upon any person in Lower Canada, or payable or accepted at any place therein, are Hubject, as to all parties therein resident and liable on such bills, to the rules contained in this title with respect to the days of grace and the noting and protesting of bills for non-acceptance and for non-payment, and the notifica- tion anU service of protests, and also with respect to com- mission and interest. — C. S. L. C. c. 64, s. 25. m 49() APPENDIX II. °- °- ^^- 2322. In default of protest for non-payment, according to the articles of this section, and of notice thereof, as pro- vided in the section next following, the parties liable on the bill other, than the acceptor are discharged, subject nevertheless to the exceptions contained in the two follow- ing articles. — C. S. L. C. c. 64, s. 16, § 2. 2823. The drawer cannot avail himself of the want of protest or notice, unless Ije proves that provision was duly made by him for the payment of the bill. — 1 L. C. R. The Bank of Montreal v.Knapp&al, 252— ; C. Co. 115-117. 2324. The want of protest and notice is excused when they are rendered impossible by inevitable accident or irresistible force. They may also be waived by any party to the bill, in so far as his rights only are concerned. Poth. Ch. n. 144; 2 Par. n. 426, 434, 5; Bee. 9!), n.; Bay. B. 294, 5, (5 I'd.); 3 Kt. Cora. 113 ; Sto. B. E. n. 327. 2325. Want of protest and notice is not excused by the loss of the bill or by the death or bankruptcy of the drawee or of the party entitled to notice. — Poth. Ch. n. 145, 6; Byles, n. 193; Sto. B. E. n. 326. Skction 7. Of nntict; of protest , '2'*'H]. Notice of protest for non-acceptance or for non- pii} iiient is given at the instance of the holder, or of any party liable on the bill who has reee'td notice and who on paying will be entitled to recover from other parties upon the bill.— I'oth. Ch. n. IM: B«y. B. 270, n. 147, (0 Ed.); 1 Bell. Cora. 330, n. 259; Sto. B. E. n. 291, 303. 304, 388. 2827. The notice is given by the notary or justice of the peace l)y whom the protest is raade, and such notice, together with the certificate of service thereof, is in the CIVIL CODE OF LOW HI C V.N AHA. 497 iccording f, as pro- liable on I, subject fo foUow- e want of was duly L. C. R. .115-117. ised when accident d by any !oncerned. », ».; Bay. ti. 327. sed by the he drawee n. 14'), ♦) : r for non- |der, or of lotico and lier paitie?* n. 147. lO 291, 303. [justice of ;h notice. is in the form prescribed in the Act int'luleil: An tirt rexiwctinfl hills C C- Mas. of exchange and prom > kiji "id-H. — C. S. L. C. e. G4, h. 22; C. 2303, 2804. 2328. The notice i:< pjiwn to the pnrty iiititled thereto personally, or at his resi luncc, or ollife, or usual place of business, and iu cii-o of denth or ahsoiice at his last residence, otlice, or pluee of ItUhinnss; or the notice, directed to the party, inav l>f> depositc I in the nejirest post-ofHice communicati'ij; with his nctiuilor la->t rt'sitleii<;e, ofl&ce, or place of business as aforesaid, as the caa^ tu.iy be: the postage being pro[)aid. — lb. s. l;i. 2329. In the case of an iiis')lveut tr.iiler th<' notice may be given as provided in the last [)re*."eiliii4 arLicle, or to the assignee of the insolvent estatt!, p'ovi:i. — lb. s. 13, §2. 2330. Service of the notice of protest, whether for non- acceptance or for non-payment may be made at any time within three days next after the day on which the bill is protested. — lb. s. 19. 2331. The party notitied is bound to give notice, within a reasonable delay, to any parties to the bill whom he intends to hold liable upon it, other than the acceptor. — Poth. Ch. n. 148-153 ; Chit. B. 520, 521(8 Ed.) ; 3 Kt. Com. 108, 109: Sto. B. E. n. 384; C. Co. lt)4. Section 8. Of interest, ronimission and damages. 2332. The amount of interest which may lawfully be paid upon the princii)al sum of a bill of exchau}j;e, for the discount thereof, may be taken at the time of discounting. — C. S. L. C. c. 64, 8. 20. m'c.b.e.a. — 32 H 1 I ■i\ ■ ;t 'i' •^^ 1 498 Al'PENDIX II. Q. 0. as88. 2383. Any person who discounts or receives a bill of exchange payable in Lower Canada, at a distance from the place where it is discounted or received, may take or recover, besides interest, a commission sufficient to defray the expenses of agency and exchange in collecting the bill. Such commission not in any case to exceed one per cent on the amount of the bill. — This article does not apply to banks, which are subject to the provisions con- tained in the next following aiticle. — lb. s. '27; C. S. C. c. 57, 8. 4, 5, 7. 2334. Banks in this province discounting bills of exchange may receive, for defraying the expenses attend- ing their collection, a commission on the amount accord- ing to the rates and in the manner prescribed in the act intituled : An act rcspectitvi interest. — C. S. C. c. 58, s. 5, 7, c. 55, s. 110. 2335. Bills drawn for an usurious consideration arc not void in the hands of an innocent holder for valid consideration. — C. 8. L. C. c. (»4, s. 28. 2336. Bills of exchange drawn, sold, or negotiated within Lower Canada, which are returned under protest for non-payment, are subject to ten per cent, damages if drawn upon persons in Europe, or the West Indies, or in any part of America not within the territory of the United States or British North America. If drawn upon persons in Upp«r Canada, or in any other of the British North American Colonies, or in the United States and returned as aforesaid, they are subject to four per cent, damages. — With interest, at six per cent., in each case from the date of the protest. — lb. s. 1. 2337. The amount of damages and interest specified in the last preceding article is reimbursed to the holder of the bill at the current rate of exchange of the day when the protest is produced and repayment demanded ; the CIVIL CODR OF LOWER CANADA. 499 A bill of ;e from ay take iient to ollecting jeed one [loes uot 3U3 coii- C. o» v-/. bill8 of s attend - t accord- n the act . 58, 8. 5, ation are for valid kegotiated ir protest images if ndiea, or |ry of the ,wn upon lie British ates and per cent, ach case sppcified I holder of lay when ded: the holder being entitled to recover so much money as will C- O- M38. bo flufticient to purchase another bill drawn on the same place and at the same term for a like amount, together with the damages and interest and also the expenses of noting and protesting and of postages thereon. — lb. s. 1, § 2. 2338. When notice of the protest of a bill returned for non-payment is given by the holder thereof to any party secondarily liable upon it, in person or by writing delivered to a grown person at his counting-house, or dwelling-house, and they disagree as to the rate of exchange, the holder and the party notilied appoint each an arbitrator to determine the rate; tli<-«« in case of disagreement appoint a third, and the decision of any two of them given in writing to the holder in conclusive as to the rate of ox- change, and regulates the sum to be paid accordingly. — lb. s. 2. 2331). If either the holder or the party notified, as provided in the last preceding article, fail, for the space of forty-eight hours after the notification, to name an arbitrator on his behalf, the decision of the single arbi- trator on the other |)art is conclusive. — lb. s. 2, S 2. Skction 9. Oenerol provisimis. 2340. In all matters relating to bills of exchange not provided for in this code recourse must bo had to the laws of England in force on the thirtieth day of May, one thousand eight hundred and forty -nine. — lb. s. 30. 2341. In the investigation of facts, in actions or suits founded on bills of exchange drawn or indorsed either by traders or other persons, recourse must be had to the laws of England in force at the time specified in the con APPBNDIX II. t? °-°;.*^l 'list preceding article, and no additional or different evidence is required or can be adduced by reason of any party to the bill not being a trader. — lb. s. 30, § 2; C. 1240. 2342. The parties in the actions or suits specified in the last preceding article may be examined under oilh as provided in the title Of Ohliyations. — lb. s. 30, § 3. 21)43. The rules concerning the prescription of bills of ex'-hange are contained in the title Of Prescnption, — c. 2:00. OPIAPTER SECOND. OF PROMISSORY NOTES. 2311. A promissory note is a written promise for the j»n>intMit of money at all events, and without any con- (liliuu. It must contain the signature or name of the maker and be for the payment of a specific sum of money only. It may be in any form of words consistent with the foregoing rules. — Poth. Ch. n. 216; 2 Par. n. 478; Bay. B. 1; Sto. P. N. n. 1; C. 2279. 2345. The parties to a promissory note at the time of making it are the maker and the payee. The maker is subject to the same obligations as the acceptor of a bill of exchange.— Bay. B. 169 ; Sto. P. N. n. 4 ; C. S. L. C. c. 64. 2346. The ])rovisionB concerning bills of exchange contained in this title apply to promissory notes when they relate to the following subjects, viz.: 1. The indication of the payee; 2. The time and place of pay- ment; 3. The expression of valve; 4. The liability of the parties; 5. Negotiation by indorsement or delivery; 6. Presentment and payment; 7. Protest for non-payment and notice; 8. Interest, commission, or usury: 9. The law and the rules of evidence to be applied; 10. Pre- scription. CIVIL CODE OF LOWER CANADA. 001 2347. Parties liable on promiBsory notes mado payable c°. 3847. on demand are not entitled to days of grace for the pay- ment thereof. — C. S. L. C. c. (54, s. 6, § 2. 2348. The makinf^, circnlation, and payment of bank notes are regulated by the provisions of a statute in- tituled: An net rcupectiuii }tnnkn and J'l'fcdom of hankbuj and by the special acts of incorporation of the banks respectively. — C. S. C. c. 55. CHAPTER THIRD. OF CHEQUES. 2349. A cheque is a written order upon a bank or banker for the payment of money. It may be made payable to a particular person, or to order, or to bearer, and is negotiable in the same manner as bills of exchange and promissory notes. — Chit. B. 545, Chit. & H. 24 ; Ros. B. J»; 2 Par. 464-4G7 ; Sto. P. N. n. 488, 490, 491. 2350. Cheques are payable on presentment, without days of grace. — Author, under a. 2349. 2851. The holder of a cheque is not bound to present it for acceptance apart from payment ; nevertheless, if it be accepted, he has a direct action against the bank or banker, without prejudice to his claim against the drawer, either upon the cheque or for the debt on account of which it was received.— Poth. Ch. n. 230, 232; Sto. P. N. n. 494. 2352. If the chequo be not presented for payment within a reasonable time, and the bank fail between the delivery of the cheque and such presentment, the drawer or indorser will be discharged to the extent of the loss he suflfera thereby.— Poth. Ch. n. 229; Chit. & B. 32, 48; Sto. P. N. n. 493, 498; 3 Kt. Com. 104, n. D.; C.2323. IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I 1.25 ■ 30 KKm IIIIIM IIM IIIIIM |||||22 1^ ^ il m IIIIIM i.4 il.6 Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 £j M') ^ ///// r if 1, ' Bli 502 C. C. 2353. APPENDIX II. 2353. Subject to the provisions contained in the last preceding article, the holder of a cheque who has received it from the drawer, may upon refusal of payment by the bank or banker return it to the drawer with reasonable diUgence, and recover the debt for which it was given, or he may retain the cheque and recover upon it without protest. — If the cheque be received from any other party than the drawer, the holder may in like manner return it to such party, or he may recover from the parties whose names are upon it as in the case of an inland bill of ex- change.— Poth. Ch. n. 229; 1 Sav. 238, 244; 2 lb. 166, 169, 715, 719, 745, 748; Sto. P. N. n. 498. 2354. In the absence of special provisions in this section, cheques are subject to the rules concerning inland bills of exchange in so far as their application is consistent with the usage of trade. — 1 Chit. & H. 24; Eos. B. 9; Sm. M, L. 206; 3 Kt. Com. 75, 77; Sto. P. N. n. 488, 489. t CIVIL CODE OF LOWER CANADA. tbe last received t by the aaonable IS given, without ler party L'eturn it es whose lill of ex- lb. 166, in this >ncerning ication is k H. 24; ito. P. N. 503 C. C. 1232. CIVIL CODE OF LOWER CANADA. (IN FORCE) Article 1232. — Testimony given by a party in a suit cannot avail in his favor. A witness is not rendered incom- petent by reason of relationship or of being interested in the suit, but his credibility may be affected thereby. The following has been added by the Quebec Statute, 54 Vict. c. 45, s. 1: — Notwithstanding that which precedes, any party to a suit may give testimony on his own behalf in every matter of a commercial nature ; but his credibility may be affected thereby. See also Arts. 2341, 2342 ante pp. 499-500. CODE OF CIVIL PROCEDURE (IN FORCE SINCE JUNE 28TH, 1867.) Article 99. — If, in any action founded upon a bill of exchange, promissory note, cedule, cheque, act or private writing, the defendant fails to appear or to plead, judgment may be rendered out of term upon the written application of the plaintiff, without its being necessary to prove the signatures to such documents, or to make any other proof. C. S. L. C. c. 83, SB. 86, 113. 504 APPENDIX II. M ; C.C.P.146. 1^ ' ILLUSTRATION. If the action is on a note signed by an attorney, the powe.i of attorney must be proved: Ethier v. Thomas, 17 L. C. -J. 79 (1870). Article 145. — Every denial of a signature to a bill of exchange, promissory note, or other private writing or document, upon which any claim is founded, must be accompanied with an attidavit of the party making the denial, or of some person acting as his agent or clerk, and cogni- zant of the facts in such capacity, that such instrument or some material part thereof is not genuine, or that his signature or some other on the document is forged, or, in the case of a promissory note or bill of exchange, that the necessary protest, notice and service have not been regularly made, stating in what the irregularity consists ; without prejudice, however, to the recourse of such party by impro- bation. C. S. L. C. c. 83, s. 87, § 2. In the case of promissory notes or bills of exchange pay- able at a particular place, they ar j presumed, as against the maker or acceptor, to have been presented at that place at maturity, unless the exception founded upon such want of presentation is accompanied with an affidavit that, at the time they became due, provision had been made for their payment at the specified place. — Added by codifiers. ILLUSTRATIONS. 1. A plea attacking a protest insufficient on its face must be accompanied by an affidavit : Chamberlin v. Ball, 5 L. C. J. 88 (1860) ; Bank of Upper Canada v. Turcotte, 15 L. C. R. 270 (18G5). Contra, Hobbs v. Hart, 5 L. C. J. 52 (1860). 2. A plea of no protest should be supported by an affidavit : Ryan v. Malo, 12 L. C.R. 8 (1861). . CODE OF CIVIL PROCEDIRE. 505 the powej L. C. J. a bill of riting or must be he denial, ad cogni- istrument ■ that his goA, or, in , that the I regularly ; without by impro- lange pay- gainst the it place at ch want of lat, at the e for their ers. face must , 5 L.C.J. . C. K. 270 m affidavit : 8. An affidavit by an indorser that the signatm-e purporting c.C.P. I4s to be his was not written by him or with Jiis knowledge, consent or authority, held sufficient : Browne v, Dow, 11 L. C. U. 27B (1861). Contra, Milloy v. Farmer, 2 L. N. 182 (1879). 4. A plea of fraud and no consideration does not require an affidavit: McCarthy v. Barthe, G L. C. .1. 180(1802); Baxter V. Bruneau, 17 R. L. 8.'39 (188i). Contra, Kelly v. O'Connell, 10 L. C. R. 140 (1800). i). An exception declining the jurisdiction as to a note dated at Montreal, but claimed to have been made in another district does not require an affidavit : Hudon v. Champagne, 17 L. C. J. 45 (1872). 0. A gene>-al denial to an action on a note, without an affidavit, will not be rejected on motion : Mechanics' Bank V. Scale, 20 L. C. J. 190 (1870); Banque .Jacques Cartier v. Cote, 9 Q.L.R. 70 (1883). Contra, Laprise v. Methot, 4 Q. L. R. 828 (1877). 7. When defendant has signed with a cross, an affidavit is required if he denies it : Straas v. Gilbert, 15 Q. L. R. 69 (1889.) Article 251. — Any party to a suit may be subpoenaed, examined, cross-examined and treated as any other witness; but his evidence cannot avail himself ; the adverse party may however declare, before he closes his proof, that he does not intend to avail himself of his testimony, and in such case it is deemed not to have been given. The answers given by a party thus examined as a witness may be used as a commencement of proof in writing. The following has been added by the Quebec Statute, 54 Vict. c. 45. s. 2 : — Any party to a suit may give testi- mony on his own behalf in every matter of a commercial nature, and in such a case, be examined, cross-examined, and treated as any other witness. He may also be subpoenffid and treated as a witness by the opposite party. m 506 APPENDIX II. c. c. P. 251 and in such latter case, his answers mav be used as a commencement of proof in writing. The default by a party to tender his own evidence cannot be construed against him. Articles 887-899 a — By these articles of the Code of Civil Procedure, as amended by R. S. Q. Art. 5977 ; 52 Vict. c. 52, s. 1 ; 53 Vict. c. 61, s-s. 2, 3 ; and 54 Vict, c. 41, s. 4, actions founded on bills of exchange, notes to order or bearer, cheques or orders for payment, and honx or acknowledgement of debt, are included among "sum- mary matters." In these actions a defendant may be summoned to appear in five days instead of ten ; he must appear on the day named, and file his plea within two days. Two days are allowed to answer it, and one day for a replication to the answer if necessary. It may then be inscribed for proof for any subsequent day, and for hearing when the proof is closed. If inscribed for proof and bearing at the same time, five days' notice are re- quired. Execution may issue eight days after judgment. ILLUSTRATIONS. 1. In summary matters, default to appear is recorded, not at noon, but only after the close of the day of the return of the writ: Desjardins v. Pauze, 11 L. N. 846 (1888). 2. By Art. 897 a, as amended by 53 Vict. c. 61, s. 2, a notice of five clear days to the adverse party is required of an inscrip- tion for proof and for hearing immediately after proof in con- tested cases, in summary matiers: Couray v. Mount, M. L. R. 7 S. C. 148 (1891). 3. Such inscription and notice must not only be served, but filed in the prothonotary's office five clear days. A note for June 4th given May 29th, but only filed .June 1st, is insufficient: Bleau v. Brissette, M. L. R. 7 S. C. 206 (1891). REVISED 8TATUTEP. used as a lult by a construed e Code of 5977 ; 52 i 54 Vict. I, notes to , and hons ng " sum- it may be ; be must vithin two d one day , may then y, and for I for proof tice are re- dgment. icorded, not iturn of the 2, a notice an inscrip- •oof in con- M. L. R. 7 be served, A note for nsufficient : 507 R.S.,N.S.2. REVISED STATUTES OF NOVA SCOTIA. Third Seiues. — Chapter 82. 3» A promissory note sliall be assignable or endorsable in the same manner as an inland bill of exchange, and the payee or indorsee thereof, or the holder, where the note is payable to bearer, may bring an action thereon in his own name. (Repealed September 1st, 1890, by the Bills of Exchange Act, s. 95). 3. A note in writing for a sum certain payable other- wise than in money shall be held prima facie to be given for a valuable consideration, but shall not be negotiable. The amount of such note shall be sued for and recovered as if the amount thereof were payable unconditionally in money. 4. In an action brought upon such note, only the amount payable thereunder sball be recoverable, without damages, for the non-delivery of the articles ennumerated therein. (In the Revised Statutes of Nova Scotia, Fourth Series, 1873, the whole of chapter 82 is placed in Appendix B, as unrepealed legislation, wholly or partially within the jurisdiction of the Parliament of Canada, or of doubtful jurisdiction. In the Fifth Series, 1884, it is omitted as being exclusively within the jurisdiction of the Parliament of Canada. In the Revised Statutes of Canada, 1887, Appendix 1, page 2343, section 2 is placed in Schedules B, as one of the Acts not consolidated. Sections 3 and 4 are omitted as being within provincial jurisdiction, and are not referred to in the present Act. On the other hand, section 1 of 30 Vict. c. 34 of the Statutes of New Brunswick, and copied 508 APPENDIX II. ^'l'*''^.!' o" ^^^6 "^^^ paRS, which is to the same effect as section 3 above quoted, is placed in Schedule B of the Revised Statutes of Canada (see p. 236()), and is repealed by the second Schedule to the present Act. These notes which are not payable in money, are not really promissory notes within the meaning of the B. N. A. Act, section 91, and the Nova Scotia Legislature would appear to be in error in treating these two sections as being under Dominion jurisdiction, and the Dominion Parliament in error in purporting to deal with the New Brunswick Statute. It seems strange that the Dominion Parliament should have treated the two statutes in a different wav). kp:vised statutes of new brunswick (1854). Chapter IIG. I I 2. A note in writing for money, payable to order or bearer, shall l)e assignable and endorsable in the same manner as an inland bill of exchange is by the custom of merchants ; and the payee, endorsee, or holder thereof may maintain an action thereon in his own name. New Brunswick Statutes, 1867, 30 Vict. c. 34 ; — I. That all notes, drafts or orders in writing for a sum certain payable otherwise than in money, shall be deemed and held jyrima facie to import that they are given for a valuable consideration in like manner as promissory notes for the payment of money. (These two sections were repealed September 1st, 1890, by the Bills of Exchange Act, s. 95. As to the effect of the repeal of the latter, see the note on the preceding page. ■ • ....■■'■■ ' . ■ '•. : " ^ ' ,'. .: ^-f ! s section 3 lie Revised lied bv the ey, are not heB. N.A. ture would sections as Dominion h the New Dominion itutes in a i:w D order or the same he custom ler thereof le. for a sum be deemed given for Tomissory 1st, 1890, 3 effect of preceding INDILX. ABBREVIATIONS, list of, xli. ACCEPTANCE, defined, 2'2, !)!» where bill or acceptance is undated, H",, h? by officer of corporation, 100-2 conditions of, valid-in writing, for „,onev. 10-> when date of. may be inserted, 8") by parol, 102-4 promise to accept, 104 where wrong name for drawee is in bill, lOo where bill is incomplete or overdue, 10(i by drawee after dishonor, 10(> may be general or qualified, 107 what is general. 108 qualified, may be conditional, partial, etc 10<» at particular place, not qualified as in Endanrl 10') conditional, 112 ' partial, 109, 113 qualified as to time, 10 holder must present for, if bill at or after sight, 24.=J effect of not presenting for, in reasonable time 044 rules as to presentment for, 246 mode of presentment for, 247 ' 510 INDEX. ACCEPTANCE— CoHMHHfif?. presentment for, where drawees not partners, 247 drawee dead, 248 through post-office, 248 excuses for non presontinent for, 24!) presentment for, excused wliere drawee dead or ftctitiouH, 249 impohsible, 249 iri'egularity waived, 24!) not excused, because dishonor expected, 2i)0 two days allowed drawee to decide on, 2oO liolding bill beyond two days, not, 251 when bill is dishonored by non-acceptance, 251 presentnieut for payment then unnecessary, 251 holder may refuse qualified, 253 if ({ualified, taken without assent, parties released, 258 what is assent to qualified, 254 notice of dishonor by non-acceptance must be given, 270 effect of omission of, 270 as to holder in due course, 272 rules as to, 273 by holder or indorser, 2 /3 by agent, 274 benefits other parties, 275 in written or verbally, 276 by return of bill, 278 if writing is irregular, 278 to party himself or to agent X)lace of payment, named in, 307 if bill not presented there, 307 alteration in, material, 361 ACCEPTANCE FOR HONOR, 36G holder need not allow, 366 is conditional, 367 may be for part only, 367 must be in writing and signed, 368 form of, 368 for whose honor, 368 how maturity reckoned, 368 what it involves, 369 to whom acceptor liable, 369 estoppels of acceptor, 370 ^ ? ■h)[ INDEX. 511 ACCEPTOR, drawee by acceptinj^ becomes, 39, 0!) of overdue bill, liable on demand, 82 may 8i>,'n ttH, on blank paper or incomplete bill, 114 contract of, incomplete until delivery or notice, ll!l il bill not in hands of, delivery prcHumed, Til only person sit^nintj as, liable as, 138 when not personally liable, 1')!) accepting asofticcr of a corporation, 159 in other representative capacities, 1(14 when holder de 'nud holder for value as against, 179 wlien bill may be re-issuod by, '2iU protest not necessary, as against, 308 bill to be delivered to, on payment, 309 when liable without presentment for payment, 30(> suspending payment, protest for bettor security, 301 undertakes to pay bill, 312 estoppel of, as to drawer, 313 where drawer is payee, 314 as to payee, (17, 315 bill discharged on payment by, 332 liable to drawer or indorser, 349 becoming holder at or after maturity discharges bill, 352 holder may renounce as to, in writing, or by surrender of bill, 353 of bill in set not getting part accepted, liable to holder, 378 ACCEPTOR FOR HONOR, who may become, 3fi(5 must sign as such, 368 engages to pay bill conditionally, 3f)9 to whom liable, 3(59 presentment for payment to, 370 time for presentment for payment to, 370 if bill dishonored by, must be protested, 371 ACCESSORY TO BILL discounted, collateral security is, 182, 420 ACCOMMODATION BILL, defined, 183, 184, 185 when deemed to be issued, 184 when drawer or indorser of, not entitled to notice of dishonor, 266, ■267, 294, 295 discharged when paid by party accommodated, 351-2 ACCOMMODATION PARTY, defined, 183 liable to holder for value, 184-6 rights of, 185 paying bill, discharges it, 351-2 612 INDEX. 1-!'"1 ACCORD AND SATISFACTION, common law rule altered in Ontario, bill (liHcliar^oct by aooorcl without aAtiufaotion, 854 ACT, Hhort title of, 21 mainly copied from Imperial Act, 3 larf^ely declaratory of old law, 21 came into force, Sept, Ist, 18!(0, 447 not retrospective, 447 Amending, of 1H'.)1, 44<» ACTS REPEALED. See Statute* ACT OF HONOR, formerly necessary, before acceptance, H(iH still necessary before payment for honor, 372 what must contain, 37H form of, 173 ACTION, includes counter-claim and set-off, 23 against drawee who pays on forged indorsement, 146 by drawee or indorser who pays on forged indorsement, 14<1 evidence of fraud in, shifts onus of proof, 198 to compel indorsement, 211 holder may bring, in his own name, 232 limitation of, 341 -See Statwfi; 0/' Li/«i7atio«« on lost bill, 375 ADDENDA ET CORRIGENDA, xxxiv. ADDRESS, notice at customary, sufficient, 284 party may give, under his signature, 285 notice to indorsers who do not give, 286 on posted notice, 287-290 to drawees when irregular, 58, 59 ADMINISTRATOR, when personally liable, 164 may indorse without personal liability, 211 bill held in capacity of, 352 AFTER DATi], a determinable future time, 82 bill payable, if issued undated, 85 has days of grace, 90 how maturity reckoned, 93 presentment for acceptance unnecessary, 242 AFTER SIGHT. See Sii/ht INDEX. 513 AGENT, see also Princiiial aiul A(i,'iit siKiiature by procuration, notice of limited (iiitliority, li"»3 perHon not captiblo of contracting' may be, lo4 illuBtrations of powers of, 156-0 when not personally liable, 1"»!) illuBtratiuns of liability of, 11)1-4 may >,'ive notice of dishonor, 271 notice of dishonor may be ^ivon to, '27',>-H0 notice when dishonored bills is in hands of, 'JS'.i of bank, when must not act as notary, '-W) of holder may cancel bill, Ho!) discharge any party, ;^;V,) of payer for honor, may make declaration for act, M'-i cheque crossed to another bank as, 40!)- Ill ALLONGE, defined, 213 indorsement may be on, where recognized, 2i;{ ALTERATION, of bill, 3(J1 material, renders bill void, HOI, iWt'2 if not apparent, proviso, 301, 3<)2 what are, 3(>3, 40!) illustrations of, 3(13-4 illustrations of, not material, 30') fraudulent, is forgery, 305 ALTERNATIVE, instrument to drawees in, not a bill, 51) referee in case of need not so considered, 5!) bill may be payable to payees in, 01 amount in money or alternative, not a bill, 42, 43, 44, 410 if alternative places of payment, sufficient to present at either, 25!) AMBIGUOUS INSTRUMENTS, holder may treat as either bill or note, 34, 415 AMENDING ACT of 18!tl, 44!)— See Bills of E.rrlnnine Act AMOUNT, see also Sum Piujahh' coi'porations not to issue certain bills or notes under #20, 45 debentures to be for ?>100 or upwards, 450 ANTECEDENT DEBT, sufficient consideration for bill, 100, 108, 170 taking bill for, generally only conditional payment, 333-7 ANTECEDENT PARTI KS, rights against, by drawer or iudorser pay- ing, 349. ANTE-DATED instruments valid, 8H, 31)0 1: m'cl.b.e.a. — 33 ■S .1 ^ i 514 INDEX. APPENDIX I. FoiuH nt IMIls, Cheques. Notes, mul Act of Honor, APPENDIX II. SiArriKs U. S.(". e. 12.;. I). 171 Consol. Rules, Ont. Rule 303. p, iSl Civil Code (Juebeo, Arts. ■2'27!t-23r)4, p. 4rt(l Art. 1232. p. .-)03 Coilc of Ci\ il Procedure, Arts, 8!». 145, H87-8S<», p. .',03 Rev. Stat. N. S. c. H2. \). .'.07 Rev. Stat. N. B. c. IKi. p. 508 Stat. N.H. 30 V. c. 34, p. 50.S ASSENT, acceptance is, to order of drawer, f((( ot drawee and iiidorsers to f chose in action, 70 of debts in (Quebec, 70 ASSUMED NAME, p.irty using, liable as if he used his own, 141 AT OR AFTER SUlHT-See Sluht AU RESOIN— Seu Ri-ferrt' iit ('«.<-■ vj See BRITISH COLUMBIA, former law in, 18 provincial companies in, 133 fees for protests in, 442 BRITISH NORTH AMERICA ACT, bills and notes assigned to the Dominion, 1 ban^s and banking also, 2 civil rights to the provinces, 124 BURDEN OF PROOF, on whom lies, when fraud proved, 198, 20J-1 when bill is improperly cancelled, 366 BUSINESS DAYS. See Holidays CANADA, object of Act to make law uniform in, 3, 6 former legislation in, 7-18 inland bill one drawn and payable in, 52 inland note one made and payable in, 421 one " country " for bills and notes, 379, 381 foreign stamp laws not regarded in, 382 foreign bills in Canadian form valid in, 383 law of, applies to contracts made in, 382 foreign indorsement of inland bill, 388 foreign currency changed to currency of, 390 foreign protest prima facie evidence in, 392 law of England and law merchant in, 450 CANCELLATION, of signature before delivery, 119-121 of bill by holder discharges it, 359 of signature by holder discharges party, 359 by mistake, is inoperative if proved, 360 of indorsements by holder, 221, 360 CAPACITY, to incur liability as party to bill, 124 to contract differs in different provinces, 125 of infants or minors, 126 of idiots, lunatics and interdicted persons, 127 of married women, 127 illustrations of, 128- 131 of corporations, 131-136 person without, may transfer bill, 136 if drawer or indorser without, other parties Uable, 136-7 if drawee without, holder may treat bill as note, 56-7 presentment for acceptance excused, 249 agent, incapable of contracting may bind principal, 154 conflict of laws as to, 391 CASE OF NEED— See Referee in Case of Need 618 INDEX. I' CASES CITED, list of, xiii. OVERRULED, or no longer law, xxxv. CERTAINTY as to amount of bill ornote, 33, 41-5, 74, 415 interest, instalments, exchange, do not affect, 74-8 as to drawee, 58 as to payee, 60-1, 415 as to indorsee, 220 as to time fixed for payment, 83-4 CERTIFICATE OF DEPOSIT, 458 CHEQUE, defined, 395 on incorporated bank in Canada, 394-5 not marked or accepted in England, 394 should be addressed to bank and not to officer, 395 may be antedated or postdated, 396, 399 . ' if drawer has no account, drawing is a misdemeanor, 396 general provisions as to demand bills applicable to, 397 not an assignment of funds in bank, 397, 401 illustrations, 398-401 is conditional payment, 398 delay in presenting, discharges drawer who suffers damage, 401 alteration of, 400 getting cheque accepted may discharge drawer, 399 delay for presenting, 402-3 drawer may countermand before acceptance, 405 death of drawer stops payment of, 404-5 as donatio mortis catisa, 404 when depositor without capacity may draw, 12G crossed cheque described, 407 generally, or specially, 408 made not negotiable, 408 crossed, may be uncrossed by drawer, 409 crossing is material part of, 409 can be crossed to one bank only, except for collection, 409 if alteration of crossing not apparent, bank not liable, 410 bank not liable for paying in good faith crossed, 411 if crossed "not negotiable" same as if overdae, 412 bank not liable for collecting in good faith crossed, 41^ CHOSE IN ACTION, 70 when assignee of, may sue in his own name, 70 Mercantile Amendment Act not applicable to bills, 70 CHRISTMAS DAY, a holiday for bills, 91 CIRCULAR NOTES, negotiable in England, 459 ^ J^'S INDEX. 519 CIVIL CODE OF LOWJ;iJ CANADA, in force since Aui,nist 1st 18t')(5, '.} articles 2279 to 23 U, repeiUeJ by Act, ki\H, i8 > as to capacity, 127, 131 conflict of laws, 12.3 novation, 333 compensation, 33',) prescription, 341 evidence, 503 cited, ly, 24, 33, 3(5, 51, 53, (JO, 70, 72. ;»3, ;>7, 103. 110, 124. 131, 137, 154, 107, 1(58, 181, 188, l',Jl, 202. 210, 218. 21<», 226, 240, 243, 2.53, 254, 25(5, 257, 28 2. 2.s-,. 2.17, 2:t8, ;J01, 320, 325, 331, 333, 339, 342, 343. 3.:V3, 350, 3117, 3iill. 370, 405, 413, 422, 439, 446, 447, 408, 480 CLEARING-HOUSE, presentment tliroii<.'h, 25!) exchange of bills at, 341 COLLATERAL SECURITY, is accessory to discounted bill, holder of bills as, may sue on before debt mat'irts. 234 note may contain a pledge of. 420 if instrument on its face only collateral, not a note. 47, 420 demand note given as, need not be presented. 424-0 COLLECTION, indorsement for— See Restrii-tire InduL-cinent COMMON LAW OF ENGLAND— See I-nnl.nu] COMPANY— See Corpora'Um COMPENSATION, in Quebec— See Set-Otr under Civil Code, 339 takes effect when two debts co-exist, 339, 340 operates as discharge, 339, 391 is an equity attaching to bill, 339, 340 conflict of laws as to, 302 governed by lex fori, 393 COMPOSITION, with principal, effect on surety. 355, 358-9 taking notes for claim in excess of. 195, 190, 417 COMPUTATION, of time of payment. 90-6. 3(58, 390 of foreign currency, 390 of damages on dishonored bill. 324-7 CONDITIONAL, bill or note must not iTe, 33, 413 acceptance may be. 109, 112-3 delivery may be, 121-3 indorsement may be disregarded, 217 CONFLICT OF LAWS, 125, 379-393 between provinces, as to capacity, 125-8, 379 125. 127, 221. 225, 300. 316 395, 402, 1M2, 420 ':* i:i 520 INDKX. i--'.' _^'' M CONFLICT OF IjWVS— Continued, h'.v domicilii, 12") as to requisites in form, 380 as to stamping bill, 382 bill issued abroad, sued on in Canada, 383 interpretation of contracts by bill, 383-6 illustrations of interpretations, 38G-8 inland bill indorsed abroad, 388 presentment, protest and notice, 38',) foreign currency, 390 date of maturity, 3(ti) foreign protest prima facie proof, 392 U'.v fori, 340, 393 loci contractus, 383, 392 Milutionis, 126, 384 CONFUSION, same person debtor and creditor, 352-3 CONSIDERATION, parol evidence as to, admissible, 38, -31, 166-205 need not be specitied in bill, 51 what constitutes valuable, 166 of simple contract sufficient, 166 antecedent debt or liability sufficient, 166 moral obligation insufficient in England, 167, 175 sufficient in Quebec, 167 compared with the French cause, 167 conflict of provincial laws as to, 167 evidence as to, 168 illustrations as to, 1<')9-176 mutual accommodation sufficient, 174 giving time or forbearance sufficient, 175 debt barred by Statute of Limitations sufficient, 175 total failure of, a good defence, 176 partial failure of, a defence pro tanto, 178 holder for value, 179 right of lien, 180 accommodation parties, 183 holder in due course, 186 fraud or illegal consideration, 190, 194 holder claiming through holder in due course, 196 value presumed as to all parties to bill, 198 proof of fraud shifts burden of proof, 198 usurious bill, without notice valid, 202 bill for -'patent right," 203-5 void unless marked " given for a patent right," 203 party offending guilty of misdemeanor, 204 INDEX. CONRIDERATION--Co«t/n„^ protest may be extended as of date of noting, 438 from which prescription runs, 340-9 of acceptance after previous refusal tz accept, 10(5 DAYS, time less than three, holidays excluded, 438 drawer has two. to decide as to acceptance, 250 of grace, not allowed on demand bills, 81, 90 rule in United States, 91 origin of, 95 determined by place of payment, 91, 390, 392 DEATH, revokes authority to complete bill not given for value, 118-9 if payee dead, bill payable to bearer, 03 presentment for acceptance where drawee dead, 248-9 for payment where drawee or acceptor dead, 202 notice of dishonor where drawer or indorser dead, 280 of drawer of cheque stops payment, 404-5 of holder, rights pass to personal representative, 209 DEBENTURES-See Bonds or Debentures DEBT, antecedent, is consideration for a bill, 160, 168 DEFECT OF TITLE, holder taking without notice of, 180 what is, 190-0, 220 DEFENCE, in Act includes counter claim, 30 total failure of consideration a good, 170 partial failure may be good, jj/o tanto, 178 in action on " patent " note, 203 h if t ? 524 DEFENCE— Co«//hhc(/. INDEX. where plaintiff is not the owner, 2H3 to action by holder in clue courae, 23') DEFINITION, of words used in the Act, 22-31 of a bill of exchan^^e, 33 of an inland bill, 52 of a foreign bill, 52 of a cheque, 395 of a promissory note, 413 See Words and Phrases DELAY, caused by presentment excused, 243 in making presentment excused, 263-4, 371 for sending notice of dishonor, 282-9 in sending notice of dishonor excused, 200-2 in noting or protesting when excused, 305 when delay ceases, diligence required, 264 ,305 DELIVERY, definition of, 27 of bill necessary to complete contract, 119-121 requisites as to, 121 by whom it must be made, 121 possession creates presumption of, 121 conditional, or as an escrow, 122-3 bill payable to bearer negotiated by, 207 negotiation by indorsement completed by, 208 for value without indorsement, 209 person paying bill entitled to, 309 transferrer by, defined, 327 liability of, 328 what he warrants, 329-330 to acceptor at or after maturity, discharges bill, 352 to payee or bearer necessary to complete note, 421 DEMAND, bill or note payable on, 33, 413, 425 when a bill is payable on, 80 overdue bill accepted or indorsed is payable on, 82 when deemed overdue, 229 when prescription begins to run, 348-4 when interest begins to run, 233-4 liability of indorser of note payable on, 424 no dtiys of grace on bill payable on, 424 when bill payable on, should be presented, 255-6 INDKX. S25 DEMAND— CoHf/Hi/rr/. note payable on, may be continuijiK security, 424 when it alionid be preHented. 424-(5 wlien deemed to be overdue, 42t) when " nt maturity," 42(i cheque is bill payable on, drawn on bank, HUo DEPOSIT RECEIPTS, negotiable, 458 DETENTION, of bill by drawee, 251, 304 DETERMINABLE FUTURE TIME, 33, 82, 90, 413 '"''''''^^2^^^''''''''''''' " "^"-'P^-g'^^ P-ent for accept- in attempting to present for payment, 257 in attempting to present where drawee or acceptor dead, 26o in noting or protesting bill, 3C5 DIRECTORS, when personally liable on bill or note, 132-3, 159-1C4, 431 DISCHARGE, of bill by payment, 331-351 merger, 333 novation, 333 compensation or set-off, 339 prescription or Statute of Limitations, 341-9 confusion, 352 by cancellation, 359 material alteration, 3G1 of accommodation bill, 351 of party liable, by waiver, 353-5 of surety, by dealing with principal, 355 at place of contract, 380, 391 of one part of a bill in set, 378 DISCOUNT OF BILL, 181-3 entitles discounter to collaterals, 182 discounter holder for full value, 183 DISCRETION OF COURT, as to costs on premature action. 307, 427 DISCREPANCY between figures and words, 78 DISHONOR, case of need in event of, 97 acceptance after, 100 after notice of, holder takes subject to defect.?, 180, 230 by non-acceptauce, 249, 251 "*- after two days, 250 -'"Sii'- recourse for, 251 ■•"•. unless acceptance unqualified, 253 lit 626 INDEX. r-^' /■ : DIBIIONOR -Coiitiiiii.il. by noii-pnyment, '2i\H rocoiirrto for, '2(5!> notice to (Imwor and iiidorHors on, '270 drawer and in lorHors diHolmr^^od unlosM notice of, '270 want of notice of non-acceptanco, '27'2 notice of non-acciptanco, and non-payment, '273 rulcH as to >{ivin;^ notice of, '273. Hee Sotice of iidand bill, 2117 of forci^'n bill, 2!»!) note, 182 of bill by acceptor HHpra protext, 871 DISPENHING with presentment for acceptance, 24i( payment, 2(il-8 notice of dishonor, 21(2-0 protest, ilO") DISSENT, by drawer or indorser to•» bill nitiy bo driiwii to onlor of, 55 may innort naino of ciiso in nood, (17 may limit liability or waivi! ho. dor's duties, !)7 drawoo may si^n bill huforo, 10l'> order of, miiy bo iiccoptod noiiorally, 107 (jiuili tied acceptance of, 107, 100 may ^ivo si^niituro on blank paper, 114 contract of, incomplete until delivery, 110 delivery proHunied, if not in poHsoHHion of hill, 121 when corporation may be, I'ii where no capacity to bo party tT hill, l.'JIJ must Hif,'n as such to bo liable, IHH action on forj^ed indorsement for one year, 14(J sijjninH as agent, officer or represontative, 159 when not personally liable, ISO-KWi may re-issue bill negotiated back to him, '2'M when not discharged by delay in presentment, 213 discharged by delay in presenting sight bill, 214 non-assent to qualiliod acceptance, 253-4 non-presentment for payment, 254 want of notice of dishonor, 270 if dead, notice given to representative, 280 notice to, when dispensed with, 204 liability, of, to holder or indorser, 315 estoppel of, as to payee, 31fi damages recoverable by, who pays, 324 bill not discharged when paid by, 340 may not re-issue bill to order of third party, 340 may re-issue bill to his own order, 340 if bill for his accommodation, his payment discharges it, 351 accepted for honor of, if not otherwise stated, 3(18 may be required to replace lost bill, 374 undertaking of, 384 of cheque discharged by negligence of holder, 401 holder of cheque is creditor in lieu of, 403 of cheque may stop payment before acceptance, 404 notice of death of, stops payment of cheque, 404 may re-open crossed cheque, 400 of crossed cheque, rights if paid in good faith, 401 DUE COURSE, holder in, 18C— See Holder payment in, defined, 332 — See Payment h T 528 INDEX. DUE DATE, how determined, 90-6 place of payment },'overn8, 890 DUPLICATE, of lost bill, if required, 37 forms in first schedule, 44H DUUES8, cause of defective title, 190-3 evidence of, shifts burden of proof, 198 DUTIES OF HOLDER, 240-309— See Ilohler ENACTMENTS REPEAL I'^D, and extent, 445 ENDORSEMENT— See Imlorxement ENGLAND, law of, in Quebec, 7, 8, 9 Ontario, 10 Nova Scotia, 11-13 New Brunswick, 13 P. E. Island. 14 Manitoba, 15-17 N. W. Territories, 17 B. Columbia, 18 common law of, in Canada, 450 EQUITABLE ASSIGNMENT, of fund or part, 48-50 bill or cheque not, 310-1 of bill, 70 of chose in action, 70-1 EQUITY attaching to bill. See Defect of Title ERASURE of signature, holder must account for, 3C0 of name, material alteration. 304 ECROW, bill delivered as, 122 ESTOPPEL, defined, 150 of acceptor, as to drawer, .'!13 payee, 07, 315 of drawer as to payee, 07, 31(i of indoraer, as to drawer and prior indorsers, 317 of maker of note, as to payee, 431 EVIDENCE, to vary or contradict bill, 36-9 date may be proved to be wrong, 88 as to consideration is admissible, 168 of fraud etc., shifts burden of proof, 198 of delivery being conditional, 121-3 foreign protest is prima facie, 392 articles of code as to, not repealed, 468 /*'.!; /'ori governs as to admission of, 393 cheque not, of money lent, 398 protest is prima facie, 444 ••t mfl INDKX. EXCHANGE, bill may be payable with, 74, 77-8 (lamaj^os on bill dishonored abroad, 320-7 forei{,'n currency, at current rate of, 390 EXHIBITED, bill should be, on demanding payment, 30'.» EXECUTOR, see Representative FACT, reasonable time, question of, 117 unreasonable time, (luestion of, 22!) FAILURE OF CONHIDERATION, effect of total, 176-8 effect of partial, 178-9 FAST DAY, is a holiday for bills, 92 FALSE PRETENCE, giving cliequo where no account is, 39(; FEAR, cause of defect in title, 198 effect of evidence of, 198 FEES, for noting or protesting, 410-2 allowed to holder, 440 part of licjuidated damages, 324 provincial tariffs for, continue, 440 FICTITIOUS, where drawee, bill treated as note, 56 presentment is excused, 249, notice of dishonor is excused, 294 where payee, bill payable to bearer, G3 person defined, G6 parties to bills, 08-9 FIGURES, different from words, latter govern, 78 FIRM, see Partners FORCE, cause of defect in title, 198 effect of evidence of, 198 FOREIGN BILL, what is a, 52 accepted for part, must be protested for balance, 254 dishonored, must bo protested, 299 if not, on face, protest unnecessary, 2i)9 protested for non-acceptance and non-pay men', 30J rights, duties and liabilities on, 380 not stamped, valid, 382 * . in Canadian form valid here, 383 law of place of contracc governs, 383 protest of, prima facie evidence, 392 FOREIGN NOTE, what is a, 421 should be protested to bind indorsera, 432 mc'lb.e.a. — 34 529 530 INDEX. FOREIGN CURRENCY, computation of, 390 FOREIGN DISCHARGE, effect of, 380, 391-2 FOREIGN GOVERNMENT BONDS, 4ri4 FORGED OR UNAUTHORIZED SIGNATURE, is wholly inoperative, 145, 148, 151 confers no right except by estoppel, 145, 151 unauthorized may be ratified, 145 forged cannot be ratified, 145, 148, 150 one year to bring action for payment on, 14G, 1$0 drawee of cheque indorsed with, has action, 14(5, 450 indorser " '' " " " " 140 iiijunction as to bill with, 150 illustrations of, 151-3 money collected on, liable to refund, 152-3 payment of crossed cheque altered, 410 FORGERY, defined, 147, 118 Canadian statute relating to, 148 by a person of the same invme, 152 fraudulent alteration of bill is, 3(55 FOIIM, and interpretation of bill, 33-124 requisites in, by law of place of issue, 380 contract 380 conforming to Irw of Canada, 383 FORMS in first schedule may be used, 443 A. Noting for non-acceptance, 460 B. Protest of Bill payable generally, 461. at a stated place, 461 noted for non-acceptance, 462 note payable generally, 463 at a stated place, 464 notice of noting or protest of bill, 464 protest of note. 465 service of notice, 466 466 C. D. E. F. G. H. I. J. protest by Justice of the Peace. In Appendix I, 469 1. Inland bill of exchange, 469 2. 3. 4. Foreign bills of exchange, 4C9-70 5. Cheque crossed generally, 471 C. specially, 471 7. Inland promissory note, 471 8. Foreign " '• 472 9. Notarial note, en brevet 472 10. Notarial act of honor, 473 INDEX. 631 FEAUD, defined, 191, 434 title defective if bill obtained by, litO acceptance obtained by, I'JO negotiation fraudulent, 11)0 is not presumed, must be proved, 191 illustrations of bills obtained by, 192-4 may beholder in due course, unless panv to, 196-7 burden of proof is shifted, on evidence oi, 198 title may be through holder in due course, 198 illustrations of onus of proof, 1 99-202 fraudulent alteration of bill is forgery, 365 mere negligence is not proof of. 434 FEENCH LAW in Quebec, 7 in Ontario, 10 ancient, 7, 8, 10, 56, 87, 97, 113, 114, 167, 219, 242, 252, 253, 319 350 3C4, 372, 422 modern, 34, 46, 51, 52, 56, 67, 72. 87, 91, 96, 97, 113, 114, 167, 168 213, 219, 220, 221, 242, 245, 252, 257, 270, 301, 316, 320, 354, 366, 372. 397, 413, 432 FUND, order to pay out of, not a bill, 48 indication of, may be in bill, 48 illustrations of orders on a, 48-50 bill or cheque not an assignment of, 310-1 GENEEAL ACCEPTANCE, 107. See AvcpUuice GENEEAL CEOSSING. See C;-ow drawer as against, 810 mdorser as against, 817 stranger signing bill liable as indoi'ser to, 81!) not affected by renunciation without notice. 85.5 if alteration not apparent, may enforce as bcfoje alteration, 301 of part of set with acceptance, may enforce it, 87^ estoppel of maker of note as against, 481 when drawee of cheipie entitled to rights of, i^tO HOLIDAYS, what days are, for bills. ;)0.8 last day of grace falling on. W for the whole Dominion. ',(1 additional, in Quebec, !I2 in England, !t2 in the United States, ',t8 are " non-business" dnvs, 488 HONOR, acceptance for, 800-871— Sec Accpptdiice nr Honor payment for, 371-4 — See raijiiunt for Honor notarial act of, 372-8, 478 -t 534 INDEX. HOUR, presentment should be at reasonable, 2i6 rales for presentment for payment, 257-8 protest after three in the afternoon, 302 HUSBAND AND WIFE— See Married Woman ILLEGAL CONSIDERATION, a defect in title, 190 what is, 194 illustrations of, 19o-(J overdue bill for, 226 IMMEDIATE PARTIES, delivery as between, 121 who are, 122 IMPRISONMENT for breach of '• patent right " provisions, 204 INCHOATE INSTRUMENT, signature on blank paper, 114 holder may fill up blanks. 114-0 must be filled up in reasonable time, 116 and in accordance with authority given, 117-9 in hands of holder in due course, 117, 119 promissory note, until delivered, 421 INCIDENTAL DEMAND, defined, 25 INDEMNITY, in action on lost bill, 375 defendant should demand, on lost bill, 375 is not required if bill is not negotiable, 376 INDORSEE, when he need not indorse, 74 of " patent right " bill, takes subject to equities, 203 if two or more, all must indorse, 214 transfer of part of bill to, invalid, 214 rule as to mis-spelling or wrong designation of, 215 payment to, contrary to condition is valid, 217 blank indorsement specifies no. 219 provisions as to payee apply to, 220 restrictive, takes subject to restrictions, 224 INDORSEMENT, must be completed by delivery, 23, 119 may be on any part of bill or on allonge, 29, 211, 213 blank, makes bill payable to bearer. 72 of overdue bill, effect of. B2 date of, deemed true date, 87 by infant, etc., gives rights to holder, 136 right of drawee of cheque paying on forged, 146, 450 of bill payable to order, 208 of notarial note in Quebec, 208 transfer for value without, 209 requisites of a valid indorsement, 211 -■"■> i INDEX. 536 INDORSEMENT— Co»//nHe<;. without persoiTal liability, 211 agreement to indorse is not an, 212 on allonge or copy of bill, 213 must be of entire bill, 213 must be by all payees or indorsees, 214 when payee or indorsee, wrongly designated, 215 when name of payee or indorsee mis-spelt, 215 suggested modes of indorsement, 216 order of, on bill deemed proper order, 216 may be in blank, or special, or restrictive, 217 conditional, may be disregarded by payer, 217 what is indorsement in blank, 219 what is special, 21'j, 220 holder may convert blank into special, 220 holder may strike out blank, 221 what is restrictive, 222 examples of restrictive, 223 rights given by restrictive, 224 rights of indorsee under restrictive, 224 negotiability of bill stopped by restrictive, 225 of overdue bill, effect of, 225 undated, presumed before overdue, 230 demand bill presented within reasonable time after, 255 presentment for payment excused as to accommodated indorser, 267 estoppel of acceptor as to any prior, 317 validity of bill at time of, 318 pour aval, 319 transferrer by delivery negotiates without, 327 of more than one part of a set, 377 interpreted by lex loci contractus, 383 of inland bill abroad governed by law of Canada, 388 demand note presented witliin reasonable time after, 424 if given as collateral security not necessary, 424 INDORSER of overdue bill, liability of, 82 may name referee in case of neec", 97 may negative or limit his liabilicy to holder, 97 may waive holder's duties as to himself, 97-8 may indorse " without recourse," 98 blank signature for bill may be used for that of, 114 contract of, incomplete until delivery, 119 delivery must be authorized by, 121 if bill not in possession of, delivei'y presumed, 121-2 when corporation may be, 124 ia I 586 INDEX. 111! mDOBBE'R— Continued. rights to holder, through minor or corporation as, 13<) 4\ / only those who sig^as, liable as such, liJ8 ' adding words indicating representative character, l.*)!) prior, may re-issue bill negotiated back, 231 cannot enforce payment against intervening party, 231 discharged by non-presentment for acceptance, 244 entitled to notice of non-acceptance, 2.50 liable to holder on dishonor by non-acceptance. 251 when discharged by qualified acceptance, 253 must express dissent from qualified acceptance, 254 discharged by non-presentment for payment, 254 liable to holder on dishonor by non-payment, 2()0 notice of dishonor must be given to each, 270 notice by holder benefits prior indoraers, 275 notice by, benefits subsequent indorsers, 275 notice to representative of dead, 280 when not entitled to notice of diahonor, 295 discharged by non-protest of Quebec inland bill, 297 foreign bili, 299 acceptor admits capacity of payee to indorse, 314-5 drawer admits capacity of payee to indorse, 31(') liability of, on bill, 317 estoppel of, 317 person signing not as drawer or acceptor liable as, 319 pour aval, 319 compelled to pay may recover damages, ,324, 32f) payment by, does not discharge bill, 349 rights of, who pays bill, 349 when discharged by cancellation, 359 alteration does not discharge subsequent, 361 on each part of set liable, 377 liability of, when laws conflict, 384 liable only if note presented for payment, 429 at proper place, 430 first indorser of note corresponds to drawer of bill, 432 INFANT, see J»/i?io?- . "' INFORMAL BILL, ambiguous, may be treated as either bill or note, 34 if in blank or incomplete, how to be filled up, 114 illustrations of, 36, 43, 47, 48, 116 INITIALS, sufficiency of, as a signature, 40 of drawer required to uncross a cheque, 409 fit^ • ikdex. INLAND BILL, definition of, 52 .- ' illustrations of, 53, 54 " • presumed, unless contrary appear on face, 55 noting or protest of, optional except in Quebec. 2SI7 measure of dama<,'e9 on dishonored, 824 interpretation of indorsement abroad of, 3ft8 form of, 409 INLAND NOTE, definition of, 421 noting or protest of, optional except in Quebec, 4'Jl form of, 471 INSTALMENTS, bill may be p.yable by, 74 each, treated as separate bill, 7() illustrations of bills payable by, 77 days of grace allowed on each, 00 INSTRUMENTS, other negotiable, 454 INTEREST, bill may be made payable with, 74 banks limited to seven per cent, 75 rate of in Canada and other countries, 75-0 if payable with, from wliat time, 79 bill given on usurious consideration, 202 allowed as damages on dishonored bill, ;J24 rate before maturity does not Kovern after, ;i2(; on bill dishonored abroad, 327 rate of, in case of conflict of laws, 387, 393 INTERPRETATION, of expressions used in Act, 22-31 of contract, by lev foci coittractus, 383 what is meant by, 384-See Words and Phraaex INTERVENING PARTY, not liable on bill negotiated back -m INTRODUCTION, xlv. I. O. U. OR BON, whether negotiable, 418 effect of Act upon negotiability of, 419 IRREGULARITY, in bill, 78, 114, 187 in indorsement, 209 in presentment when excused, 249 ISSUE, of bill defined, 29 date of, may be inserted in undated bill, 85 of accommodation bill, 184 . . JOINT AND SEVERAL. liability on a note may be. 421 how differs from joint liability, 423 "I promise " by two or more is, 424 JOINT ACCEPTOR or maker, in Quebec and other provinces, 422 637 588 INDEX. i 1 JOINT DRAWEES, a bill may be addreBsed to, 59 presentment must be to all, 247, 262 acceptance by some only is qualified, 109, 114 JOINT DRAWERS or indorsers, notice must be given to all, 282 JOINT PAYEES or Indorsees, all must indorse, 214 JOINT STOCK COMPANY, see Corporation JUDGMENT on a bill operates as merger, 333 JUDICATURE ACT, 24, 93 JUSTICE OF THE I'EACE, when he may act as notary, 439 whether entitled to fees, 440 form for protest by, 466 KNOWLEDGE, as to accommodation party immaterial, 184 of defect of title sufiicient notice, 188 of fraud, if holder no party to, 198 of usurious consideration, 202 of dishonor not sufficient without notice, 271 LACHES, see Diligence LAW MERCHANT, recof^nized under the Act 450 what it is, 451, xlvi. acceptance according to the, 102 LAW OF ENGLAND, see Enghind LAWS, CONFLICT OF, see Conflict of Lawt LEGAL HOLIDAYS, see Holidays LEGAL REPRESENTATIVE, as party to a bill, 164 may indorse " without recourse," 211 see Personal Representative — Representative Capacity LEGAL TENDER, Dominion notes are a, 418 LETTER, is sufficient notice of dishonor, 276 of credit is not negotiable, 459 LEX DOMICILII, 125, 391 fori, 346, 393 loci contractus, 126, 383, 392 loci solutionis, 126, 384, 390, 392 LIABILITY of drawer or indorser may be limited, 97-8 antecedent, is valuable consideration for a bill, 166 of acceptor to pay bill, 312 of drawer is conditional, 315 of parties to bill is joint and several, 316 INDEX. 589 LIABILITY-Continued. of indorser is conditional, ""7 of stranger signing bill, that of indorser, 319 measure of, on dishonored bill, 324 of party to a bill may be renounced by holder, 355 cancelled by holder, 369 LIEN, defined, 180 holder having, deemed a holder for value, 180 banker has, on bills for general balance, 181 discounter of bills has, on collateral hire receipts, 182 holder having, for part is trustee for balance, 181 LIMITATIONS, STATUTE OF, OR PRESCRIPTION, Quebec law differs from otiier provinces, 19, 341 when it begins to run, 341, 343 law of England as to, 343 acknowledgements to take case out of statute, 344, 346 governed by the lex fori, 393 LIQUIDATED DAMAGES on dishonored bill, 324 LOST BILL protest of, may be made on copy, 304 when loser has right to duplicate of, 374 action on, 375 indemnity must be given if required 375-6 LUNATIC, rule in Quebec as to bill of, 127 bill of, voidable not void by English law, 127 MAKER of note giver, for a patent right, 204 note must be signed by, 413, 414 note to order of, incomplete until indorsed by, 420 there may be two or more, 421 when jointly and severally liable, 424 of note not discharged by not 'presenting, 427 liability of, 430 estoppel as to holder, 431 liability of, compared with that of acceptor, 431 provisions as to acceptor apply to, with necessary modifications, 432 personal liability of, 99, 431 MANITOBA, former law as to bills in, 15 Married Women's Property Act in, 128 power of corporations under statutes of, 133 office of notary in, 439 fees for protests in, 442 MARK, or cross, a sufficient signature, 40 to notarial note, en brevet 472 540 INDEX. I<^ '}'■' MARKED CHHQUE, not used in England, 8'.>4 liability of bank on, 800 MAUUIKD WOMAN, law of Quebec as to, 127 bill or note in Quebec for liusbaiulu debt null, 127, 12'.). 1;I0 law of otber provinces as to, 128 statutes reliitinf^ to property of, 12H bill drawn or indorsed by, 187 MATERIAL ALTERATION, see Alteration MATURITY of bill not payable on demand, !)0 mode of coniputinj^ time of, 118 of bill payable in a month or months, !(4 holder in due course must aciiuire before, 18(1-7 bolder acquirinj^ after, tiikoti subject to equities, 225 of bill payable on demand, 221( when bill deemed overdue, 22!) when presentment necessary to fix, 240 presentment for payment at, 2.1") when bill protested for better security before, 301 acceptor not dischar^^ed by non-presentment at, 807 payment in due course at or after, 882 acceptor the holder at or after, discharges bill, 8r)2 discharge of acceptor at or after, discharges bill. 358 of bill accepted for honor, 3()8 of bill determined by place of payment, 890, 8<,»2 of note payable on demand, 424 maker of note not discharged by non-presentment at, 427 MEASURE OF DAMAGES on dishonored bill, 324, 82() interest after maturity, 825 MERGER of bill in higher security discharges it, 333 MINOR cannot be bound by bill, 126, 128, 131 may in Quebec if emancipated or a ti-ader, 127, 12'J ratification after majority must be in writing, 127, 1?0 other parties liable on bill drawn or indorsed by, 13(5 presentment excused if drawee a, 24{> MISCARRIAGE by post office does not invalidate notice, 289-90 MISDEMEANOR, in case of " patent right" bill or note, 204 MISDESCRIPTION of bill in notice not fatal unless misleading, 278-9 of payee in bill 00, 215 of drawee in bill, 105 MIS-SPELLING, how drawee should accept in case of, 105 of name of payee or indorsee, 60, 215 how payee or indorsee should indorse in case of, 215 li' \ INDEX. 04I MISTAKIO, insertion of wioiit; date in anod fivitli liy, H(i ciincollivtion of Hij^mitiire by, is iiiopiTntivc, 'MO correctin>< a, not ii mattriiil ivltorution, 3(i5 MONEY, bill or noto muHt bo for mim curtain in, 33,^413 . definition of, 41 illiiHtrations of what is dfiMned, 4'J-.'> (leceptivnco mUHt bo for paymont in, 102 MONTH, means a calender month, !(4 maturity of a bill payable at a month ormontha, '.ll-") MUNICIPAL COllPOllATION, see Corporation MUNICIPAL DEBENTURES, 417, 455 NEED, CASE OF, aee Rvferee in due of Need NEGLIGENCE, bad faith is something,' more than, 188, 23!>, 433 may bo evidence of bad faith, 434 rule in Gill v. Cubitt not now followed,J435 bank paying crossed cheque without, 410-'2 NEGOTIABLE, what bills are not, (Ji», 22o bill payable to particular person formerly not, (1',), 73 instrument delined, 207, 404 when negotiable bill ceases to be so, 225 other negotiable instruments, 454 NEGOTIATION OF BILL, to holder in duo course, after lilling up, 117 in breach of faith, a defect of title, 190 definition of, 206 payable to bearer, by delivery, 207 to order, by indorsement, 208 of Quebec notarial note, 208 transfer without indorsement, 201) requisites of indorsement to operate as, 211 must be of whole bill, 213 all payees or indorsees must indorse, 214 presumed to be before bill overdue, 230 back to previous holder, 231 presentment within reasonable time after, 243 by drawee or indorsee who has paid, 349 in another country, rights of parties, 380 of note payable on demand, 42(3 NEW BRUNSWICK, law of England introduced into, 13 former Jaw as to bills, 13-14 provincial legislation as to bills, 14, 414 office of notary in, 439 542 INDEX. ill: NEW BRUNSWICK— Co»/i;iM^f?. • tariff of fees for protests in, 442 foreign protest formerly evidence in, 478 statutes of, repealed, 468, 478, f>07 NON-ACCEPTANCE, naming referee in case of, 97 when bill is dishonored by, 251 recourse against drawer and indorsers on, 251-2 offer of qualified acceptance may be treated as, 253 protest for non-payment may follow protest foi", 300 NON-BUSINESS DAYS, holidays are, 438 not counted in delays under three days, 438 what are in Canada, 91-2 NON-JURIDICAL DAi', bill dated on, valid, 88 See Holiday NON-PAYMENT— See Dishonor— Notice of Dishonor NORTH-WEST TERRITORIES, former law as to bills in, 17 word " province " in Act includes, 92 Married Womeii's Property Act in, 128 corporation must use the word " limited," 133 office of notary in, 439 fees for protests in, 442 " NOT NEGOTIABLE," cheque may be crossed, 407, 408 effect of special crossing, 407 NOTARIAL ACT OF HONOR, on payment supra protest, 372 basis of, 373 form of, 473 NOTARIAL NOTE, en brevet, 340, 440, 472 NOTARY PUBLIC, must sign protest, 303 his clerk may present bill, 303 bank officer not to act as, 305 when justice of the peace may act as, 439 office of, in different provinces, 439 fees allowed to, 440-2 NOTE in the Act means promissory note, 20 See Promissory Note — Hank Notes NOTICE of acceptance of bill, equivalent to delivery, 119 of acceptance may be written or verbal, 119 of forged indorsement given within a year, 1415 of limited authority implied in procuration, 153 of party being accommodatiDn party, when immaterial, 184 i>f dishonor prevents holder from being hold'jr in due course, 186 M INDEX. 543 ^OTICE-Continued. of defect in title of party negotiating, lias same eflfect, 18(] of such flislionor or defect need not be formal, 188 to aj,'ent i? notice to principal, 188 actual knowledcje of usurious consideration necessary, 202 of " patent ri^ht " consideration, effect of, 203 of dishonor of bill not overdue, defect of title, 230 of partial acceptance prevents disclmr^e of drawer and indorsers. 25 1 Of death of customer to bank stops checjues, 404 405 NOTICK OF DISHONOR- See also Presentment must be given to drawer and each indorser, 270 knowledge of dishonor not sufficient to bind, 271 want of, will not prejudice holder in due course, 272 for non-payment, when not required, 272 rules as to, 273 must be given by holder, or indorser who is liable, 273 may be given by agent in his own name, 274 in name of any party entitled, 274 when given may benefit other parties, 275 may be verbal or written, 27() tendency not to regard informalities in, 27() return of dishonored bill to drawer, sufficient, 278 sufficient, although irregular, if not misleading, 278 may be given to party, or his agent, 279 in case drawer or indorser is known to be dead, 280 must be given to each drawer and indorser, 282 must be given on day of dishonor, or next business dav 28-> agent may give, to parties liable, or to liis principal, 283 principal has next business day to give, 283 each party receiving, has next business'day to give, 283 sufficient to post, duly addressed post paid, 285 sender not responsible for miscarriage by post, 28!) excuses for delay in giving, 200 dispensed with, 2!)2 if impossible, 2!)2 if waived, 293 as to drawer, 294 as to indorser, 2!).") to others than drawer and indorsers, 29ti to acceptor for honor, 3t59 NOTICE OF PROTEST, 464-5-See Xotice of DU!,onor NOTING, of inland bill, 297 must be oa day of dishonor, 300 T i' 544 INDEX. ;sii - - r a ■ ■ >; ;' S NOTING— CoH/iHK^/. delay in, when excused, 305 protest may be filled up later, 438 expense of, allowed, 440 forms of, 443, 4G0, 4(54, 465 NOVATION, defined, 333 NOVA SCOTIA, law of England introduced, 11 provincial legislation on bills, 1'2-lb, 414 Married Women's Property Act in 128 bills of companies, 132-3 seal on protest formerly necessary, 304 tariff of fees for protests in, 441 statutes repealed, 468, 476, 507 OFFICE, payee may be indicated by, 61 OFFICER OF CORPOKATION, bill drawn on, 90 acceptance by, 100-2 signature by, 154, 157, 159-164 0>rrARIO, French law originally in force, 10 English law introduced, 1792, 10 provincial legislation on bills, 10 assignment of chose in action, 70 Judicature Act, 24, 93, 484 qualified acceptance, 110, 427 Married Women's Property Act in, 128 bills of companies, 132-3 annexing bill to protest, 303-4 statute of limitations in, 342-3 written promises in, 342-3 notaries in, 439 tariff of fees for protests, 441 municipal debentures, 455-6 other corporation debentures, 457 statutes repealed by the Act, 479-83 consolidated rule 303, 484 ONUS PROBANDI— Sea Burden of Proof— PresamptiimH ORDER, when a bill is payable to, 73 : bill payable to particular person is payable to, 74 bill payable to, negotiated by indorsement, 208 transfer without indorsement, 209 debentures payable to, 455, 457 ORIGIN of bills and notes, xlv. , ■;, >^ . INDEX. 545 OVERDUE, bill may be accepted although, 82, 106 indorsed when, 82 person acquiring bill, not holder in due course. I8i> person acquiring, takes subject to equities, 225 when demand bill deemed to be, 22!) indorsement presumed before bill, 230 taking bill subject to dishonor, although not, 230 when demand note deemed to be, 426 OVERRULED CASES, xxxv OWNER, holder need not be, 28 restrictive indorsee not the, 222 when bank paying crossed cheque not liable to, 410 when bank collecting crossed cheque not liable to, 412 PARTS OF A SET— See Set PATENT RIGHT, bill or not3 for, must have words on face, 203 is subject to equities, 203 breach of law a misdemeanor, 204 '■ PAY CASH,"' words to reopen or uncross cheque, 40!) PAYEE, defined, 45 may be same person as the drawer, 56 drawee, 56 of bill to order must be naniod or indicated, 00 when parol evidence admissible as to, 00 joint or alternative payees, 01 tictitious or non-existing, 03 wlien need not indorse, 74 provisions regarding, apply to indorsee, 220 if two or more all must indorse, 214 wrongly designated, how must indorse, 215 suggestions as to indorsements by, 21() note inchoate until delivery to, 421 PAYER may disregard conditional indorsement, 217 for honor may intervene and pay bill, 371 entitled to bill, 373 declares intention to notary, 373 PAROL EVIDENCE, 3()-9, 00, 88, 121 3, 108, see Evidence PART PAYMENT, bill may b2 discharged by, 354 PARTIAL ACCEPTANCE 109, 131, 254, h.o Acceptance PARTICULAR FUND, order to pay out of, not a bill, 48 bill may indicate a, 48 PARTICULAR PERSON, bill payable to, payable to order, 73 m'l.b.e.a.— 35 646 INDEX. i'i 1 PARTIES, delivery as between immediate and remote, 121-2 capacity and authority of, 124 who may be parties to a bill, 124 holder for value as against prior, 179 holder in due course free from defects of, 235 liabilities of, 310 PARTNERS, bill may be aldressed to, 50 acceptance of bill by one, 99 signature of firm equivalent to that of all, 138, 142 power of, to bind firm, 142, 154 bill by o:ie in fraud of others, 142-5, I'tS PAYMENT, when no time for, is expressed, 80 timi? of, how determined, 90, 93 by acceptor, when conditional, 109 holder entitled to, althoujjh drawer or indorser without capacity, 13(1 of cheque on forj^ed indorsement, 14() against conditional indorsement valid, 217 restrictive indorsee may receive, 224 discharge by, stops negotiability of bill, 225 of bill negotiated back, 231 holder may enforce, 232 to holder with defective title valid, 239 bill must be duly presented for, 254 rules as to presentment for, 255-2C3 when delay is excused in presenting for, 263-8 refusal of, is dishonor of bill, 208 dishonor for want of, gives immediate recourse, 2(5 bill should be exhibited on demand of, 309 acceptor of bill primarily liable for, 312 drawer of bill conditionally liable for, 315 indorser of bill conditionally liable for, 317 of bill by drawer or indorser gi' . i right to damages, 324 interest on demand bill from pu sentment for, 324 further damages bear interest until, 326-7 in due course by drawee or acceptor discharges bill, 332 " payment in due course " defined, 332 Daniel's definition of, 332 in good faith, 333 by bill or note, 333 may be absolute, 333 is only conditional without agreement, 333 renewal, presumption against, 333 part payment is equity attaching tj bill, 338 INDEX. PAYMENT-Co/i^«./«.d. compensation in Quebec operates us, 339 defect of title, 339 prescription or Statute of Limitations as, 341 by drawer or indorser is not discharf^e, 349 by drawer, right against acceptor, 349 by indorser, right against antecedent parties, 349-50 alteration of time of, material, 363 for honor supra protest, 371 only after protest, 871 discliarges subsequent parties, 373 entitles payer to bill, 373 effect of refusal to accept, 373-4 of one part of set discharges whole, 37.S unless more than one part accepted, 378 contract when governed by law of place of. 384 h'x loci svliitioniii, 392 presentment of cheque for, 401 reasonable time for presenting cheque for, 402 of cheque by bank, when stopped, 404 of crossed cheque by bank, 409-12 presentment of demand note for, 424 presentment of note at place named, 427, 430 if note names no place of, 427 indorser liable only after presentment for, 429 maker of note primarily liable for, 430 PENALTY, banks not liable to. for usury, 7j company omitting word " limited." 132-3 officers of company liable for, 132 for omitting " given for a patent right," 204 for issuing notes to circulate as money, 415 . PENCIL, writing may be in, 30 signature may be in, 39 PERSON, defined, 30, 39 fictitious, 39, 56, 63, 60, 249. 260 PERSONAL DEFENCES, holder in due course free from, 23: PERSONAL LIABILITY, when party not subject to, 15.. of agent, 159, 106 of officers of corporations, 99, 159104 difference between bills and notes, 160, 431 of executors, administrators, tutors, etc., 164-0 indorsement to negative, 211 547 548 INDEX. PERSONAL REPRESEfJTATIVE, on death of holder bill passes to, 209 presentment to, of dead drawee, 248, 2G2 acceptor, 262 phould give notice of dishonor, 275 notice to, of dead drawer or indorser, 280-2 PLACE, bill valid without statins, where drawn, 51 payable, 51 of pi'i'i enb not named, payable generally, 52 iiay rjt jayable where drawn, 52 not qualifted acceptance to pay at specified, lO'J of payment sufficient without " not elsewhere," 110 of business, bill not payable at, 241-2 of presentment for acceptance, 248 bill ij-Lfsn iff'c a(; the proper, 258 of pii /lUiili i,u.r>ed in bill or acceptance, 258 when altt :i f^V 'aces are named, 25!) of payni„.'t nc^ s^eci ed„ "^GG, 202, 263 of busint ^s, preset 'lit it. at last known, 260 pres°ntr. ■ —i a propo '•■ "Jent, 261 prtsenfiexit a cs-.;^ •: i of protest, 302 of payment not named, when acceptor liable, 306 named, liability of acceptor, 307 alteration of, material, 363, 364 adding to bill, material alteration, 31)3 law of, 384, 392 law of, governs due date, 390 note must be presented at, 427 named in note, wlieu indorser liable, 430 PLEDGE, holder of bill as, 180— See Lien of collateral security, note may contain, 420 discounter of bills is not pledgee but owner, 183 POSSESSION, bearer is person in, 26 delivery is transfer of, 27 actual and constructive, 27 holder is payee or indorsee in, 27-8 delivery is presumed from transfer of, 121-2 person may liold bill as an escrow, 122 gives right to sue, 232 adversely to real owner, 235 POST-DATED instruments valid, 88, 396 not an irregularity, 396 I t INDEX. POST OFFICE, when presentment made through, 248, 202 when demand to be made at, 203 notice of dishonor deposited in, 283 sender not liable for mis-carriage by, 289-90 letter in, belongs to party addressed, 200 POTHIER, Contrat de Change cited for old French law, iv. based on Commercial Ordinance, 7 See Ancient French Laic PREMATURE presentment for payment a nullity, 250 payment before maturity not a discharge, 3;{2 PRESCRIPTION, see Statute of Limitations Iftw differs in difterent provinces, 341 time in Quebec o years, 341 absolutely extinguishes debt, 341 interruption of, by written acknowledgment, 341 runs against persons without capacity, 341 how reckoned in case of conflict, 342 English Statute in Canada, 342 in Ontario, Nova Scotia and New Brunswick, 342 writing to take case out of statute, 343, 314.5' when statute begins to run, 343 Chalmers' five rules for England, 343-4 of notarial note en brevet, 340 governed by lex fori, 34(), 3!)3 PRESENTATION, payable on, is payable on demand, 80, Ml protest prima facie evidence of, 444 costs of action before, discretionary, 307, 427 PRESENTMENT FOR ACCEPTANCE, when dated as of first presentment, 107 when necessary to fix maturity. 240 to whom should be made, 241 place of, 241 express stipulation as to, 241-2 when not necessary, 242 when delay in, excused, 242-3 as to bills payable at or after sight, 243 effect of omission of, 244 discharge of drawer and indorsers for want of, 244 rules as to, 240, 247 by or on behalf of holder, 246 to drawee at reasonable hour, 240 549 550 INDEX. PRESENTMENT FOR ACCEVTA.^CE— Continued. before bill overdue, 246 to all drawees not partners, 247 to personal representative if drawee dead, 24!) when made throu^li post office, 248 is excused if drawee dead, 249 fictitious, 249 if impossible, 249 if refused, 249 two days after, bill is dishonored, 2/50 governed by law of place where presented, 389 abroad, proved by notarial copy of protest, 392 of cheque may discharge drawer, 399 delay in, 401-3 provisions as to, not applicable to notes, 432 PRESENTMENT FOR PAYMENT, must be duly made, 254 drawer and indorsers discharj^ed unless, 254 not necessary as at^ainst acceptor, 253 rules as to, 255 time for, when bill not payable on demand, 255-t) payable on demand, 255-() made by holder or by his authority, 257 at the proper place, 257 to payer or his i-epresentative, 257 hour may depend on place, 257-8 at place specified in bill or acceptance, 258 when at address of drawee or acceptor, 260 when at place of business of drawee or acceptor, 2C0 when to drawee or acceptor anywliere, 260 at proper place, when sufficient, 201 to all drawees or acceptors not partners, 262 to representative of dead drawee or acceptor, 262 when through post office, 262 when at post office, 263 when delay in, excused, 263-4 should be made, when cause ceases, 264 dispensed with when impossible, 265 when drawee is fictitious, 266 as regards the drawer, 266 an indorser, 267 by waiver express or implied, 267 and refusal, dishonors bill, 268 acceptor liable without, if no place named, 308 INDEX. 551 PRESENTMENT FOR PAYMENT-C«««u,««i. in action before, coats are diacretioniiry, iJO? to acceptor for honor, 370 delay excused in, 371 governed by law of place where made, 389 time for, governed by law of place where payable, 31)3 foreign protest prima facie evidence of, 392 of cheque in reasonable time, 401 after countermand, 403-1 death of customer, 404-5 of note payable on demand, 424-0 at a particular place, 427 action on note before, costs discretionary, 427 of note necessary to hold indorser, 429-30 PRESUMPTION, legal or disputable, 121, 123 of delivery from losseFsion, I'il tliat bill is inland, 55 acceptance shortly after date, 8(5 date of bill is correct, 87 acceptance is correct, 87 inchoate bill filled up properly, 114 party is party for value, 198 holder is holder in due course, 198 indorsements are in proi)er order, 21(5 cancellation is regular, 3(10 in favor of good faith, 433 conclusive, or Juris et de jure, 121, 123 when valid delivery conclusively presumed, 121 PRINCE EDWARD ISLAND, law of England in, 14 provincial legislation, 15 qualified acceptance, 110, 427, 477 tariff for protest fees, 442, 477 statutes repealed, 477 PRINCIPAL AND AGENT, see also Anent undisclosed principal not liable, 138 signature by procuration, 153 rule when doubtful who h liable, 159, 160 notice of dishonor to either is valid, 279 when dishonored bill in hands of agents, 283 PRINCIPAL AND SURETY, renunciation where such relation exists, 355 effect of composition with princiial, 355, 338 discharge of princij; al releases sx rety, 355 562 INDEX. I-^- In h I PRINCIPAL AND SUUKTY-r.)»////i(, extinction of Huretyship in Quebec, i}5f> effect of delay ^,'ivento principal. HfiC), IJ^T, 'M'lH taking renewal from priricipal, ii.V.I, 'M>0 PROCEDURE provincial laws of, affoct bills and uoten, 2 action, cotmterclaim, set-off, 28-5 incidental demand in Quebec, 21 defence and counterclaim, 80 defence in case of patent rif^hts, 208 action on bills and notes in Ontario, 4s4 Quebec Code of Civil, cited, 25. <.»8 extracts from, 508-(l PROCURATION, operation of siynaturo by, l.")8-ll how bi'ls b>, Bhould be Bifined, ItiO PROMISE TO ACCEPT, is not an acceptance, 101 promissor may be liable on contract or by estoppel, lO") verbal, invalid where verbal acceptance valid, 10.") PROMISSORY NOTE, in .\ct "note" means, 20 when holder may treat instrument as bill or, 81, ')('>-8, ll.j bill where drawer or drawee same person is, 50 drawee fictitious or without capacity is, 5f'> payable at place named and "not elsewhere" in Ontario, 110, 127 to bearer, restriction on companies issuing, 132-8, 415 definition of, 418 not for money in Nova Scotia and New Brunswick, 414 unconditional promise in, 111 payable on demand, 41 1 no particular form of words icijuiretl, 415 illustrations of instruments not valid notes. 41(> valid notes, 41()-7 bank notes, 418, 454 Dominion notes, 418, 454 Bon or I. O. U., 418 indorsement necessary where ihaker also payee. 4'20 may contain pledge of collateral security, 420 discounted, securities go with, 420 what is an inland, 421 a foreign, 421 delivery to payee or bearer necessary to complete, 421 may be by two or more makers, 421 INDEX, PUOMrSSORY NOTl']~Contimiv,l. may ho joint or joint and Hoveral. 421 " ^ l»"»>"'Be to pay " by two or more is joint and several, H'l I'rt'Hentinent of indorHod, payable on demand, 121 on demand, iis collateral or continninn security, 424.(i on demand, when deemed overdue, 42fi "at maturity," 12() must be presented at place of payment, 427 maker not dischart^ed by want of preHentment, 427 costs of action before presentment discretionary, 427 indorser of, not liable without presentment, 42!».30 wiien placeiijj payment by memorandum only, 430 liabilityif i^iaker of, 430, 431 estoppel of'iAaker as to i)ayee, 431 what proviH^s as to bill also apply to, 432 maker of, coJjRjsponds to acceptor, 432 first indorser to drawer who is also payee, 432 protest of for6it^n, necessary to bind inilorsers, 432 notarial note mi brevet in (Quebec, 440, 472 form of inland, 471 foreif,m, 472 action in Ontario on, 484 provisions of Quebec civil code relating,' to, f.OO code of procedure relatinj,' to, 503 fKOOF, see Eridence—Iiitrdeii of Proof i'ROPEIlTY IN BILL, delivery may not always pass, 121 holder may sue without havinj,', 232, 234 PROTEST, for balance in case of partial acceptance, 2r)4 of inland bill compulsory in Quebec, 2!)7.h optional elsewhere, 297 of foreign bill for non-acceptance necessary, 2 , 48!) holder allowed expenses of, 824, 440, fees allowed for in ditTorent provinces, 440-2 forms of, 448. 4(i0-4 forms of notice of, 4(J4-f) PROVINCE, in Act includes tlic Territories. 112 holidays differ in different, i)2 lofjal holiday or non-juridical day in, 90 fast or thanksgiving day in, 92 PROVINCIAL LEGISLATION, as to bills, in Quebec, 8, 110, 47"., 4Sr. in Ontario, 10, 110, 427, 47'), -179 in Nova Scotia, 12, \1'\ 476, r,07 in New Brunswick, 14, 47"), 478, 508 in Prince Edward Island, 15, 110. 427, 475, 177 PUBLIC HOa^IDAY— See Holidays PUBLIC POLICY, 194— See Vonmhra'ion INDEX. gUALIFIKD ACCEPTANCH, (lofino.l, 107. 2!i^ whoii ail accoptftiico is, 10!», lU payable at a particular place ih not, 10!> " and not elsowhoro" Ih in Knj^'land, UO waH in part of Canada, 110, 4'J7 holder may refune to take, '2r}i\ reipiires assent of drawer and indorHorH. -i'l.'M notice to drawer and indomorH of, 2">4 (QUEBEC, French law introduced into, 7 Enjjlish law in, 7 provincial legislation on bills, H '"ivil Code, !», IHO— See Cinl Co,l,' Enj^lish rules of evidence, (> compensation, 24, 3a<» incidental demand, 2) holidays in, 92 law of, as to capacity, 12(1 minors, 12l> idiots, lunatics, etc., 127 married women, 127 companies, 182-8 tutors, curators, etc., 104 moral consideration valuable in, KKi inland bill or note should be protested in 21*7. 182 insolvency of debtor makes debt mature in, .iid indorsement ;)oi(r uvul, aii)-22 novation in, 338 prescription of bill or note in r> years, 841 recent decisions as to notes in, 417 law of, as to bans, 419 joint liability in, defined, 422 office of notary in, 439 note en brevet, in, 440, 472 tariff of fees for protests in, 441 municipal debentures in, 4")"), 4.50 bank deposit receipts in, 4")9 chapter 123, R. S. C. referring to, 483 civil code, articles relatin{>to bills, eti-., 48'>')08 Code of Civil Procedure, relatinj^ to bills, etc., .-Oa RATIFICATION, of bill made by infant or minor, 127 of unauthorized signature, 145 forged signature incapable of, 148-50 estoppel may have same effect as, 145, 150 6C5 I >'! :i ■■ itv. 556 INDEX. REASONABLE DILIGENCE, in preBentment tor acceptance, 243, 24*,) in presentment for payment, 257, 2()1, 2li'2 in t{iving notice of diuhonor, 290 in making protest, 305 REASONABLE HOUR, for presentment for acceptance, 24(5 payment, 2a7-H REASONABLE TIMIO, incomplete bill shonld be tilled np in, IKi for presenting bill payable on demand, 22'J, 255 bill at or after sight, presented or negotiated in, 243 how determined, 244, 250, 424 dissent from ({ualitied acceptance in, 254 for presenting cheque, 402 note payable on demand, 424 UECOUR^^E indorsing without, 08. Kio, 211 RE-EXCHANGE, in case of bill dishonored abroad, 32fi-7 REFEREE IN CASE OF NEED, defined, 07 resort to, optional, 07 was compulsory under code, 07 protest reguired before presentment to, 370 REFUSAL, drawee may accept after, lOfi date of sucli acceptance, lOfi-T REGIT LAR on its face, a bill, 180, 187 an undated bill is not, 50, 187 u post-dated checjue may be, 187 ' RE-ISSUE OF BILL, by drawer, indorser or acceptor, 231 paid by indorser or drawer, 340 of bank notes, 418 RELEASE, see Dischanjc REMEDY, lt'.r fori governs as to, 303 REMOTE PARTIES, delivery as regards, 121 notice of dishonor to, 283 RENEWAL BILL, payable by. 333, 337 suspends remedy on original, 333, 337 see Soratioii, 333 RENUNCIATION, by holder when discharges bill, 353 must be in writing unless bill given up, 854 by holder discharges any party, 355 does not affect holder in due course, 355 see Di»clar payment, 255 SA^S RACOaitS, indorsement, <)8 SCHEDULE FIRST, forms, 460-7 SECOND, list of enactments repealed, 468 SEAL of notary not re<]uired on protest, 304 of corporation sufficient signature. 437 not necessary on bill or note, 437 instrument under private, not a note, 438 SECURITY, protest for better, 301 on getting duplicate of lost bill, 374 on taking action on lost bill, 375 collateral, pledge of in note valid, 420 demand note may be a continuing, 424 SEPARATE ESTATE, bill of married woman who has. 128 567 Ofti ill i N V.' t ■■ I., 1 658 INDEX. SET, BILL IN A, generally in three parts, 377 ' " ' ^ all parts of, constitute one bill, 377 ' if holder indorses different parts, 377 • • acceptance should be on only one part, 378 if more than one accepted, liable on each, 37H what is discharge of whole bill, 378 SET-OFF, included in " action," 23 defined, 23 subject of provincial legislation, 23 compared with comp.'nsation in Quebec, 23, 33!) whether etjuity attaching to a bill, 330, 340 difference between Quebec and other provinces, 33it-40 SIGHT, at or after, bill payable, at sight in England eijuivalent to demand, 80-1 Cannda has days of grace, >Sl, 83, (Xi a determinable future time, 33, 41, 82 Amending Act of 18'J1 as to, 83, 8(1, 107, 243, 450. 451 acceptance undated, holder may insert date, 8.)-() when time begins to run, 93-4 dishonored and subsequently accepted, lOG-7 presentment necessary to fix niaturitv, 240 must be presented or negotiated in reasonable time, 243 SIGNATURE, of drawer necessary to a bill, 33, 3<» may be in pencil, 39 with a cross or mark, 40, 473 by initials, assumed name, etc., 40, 138, 141 on any part of bill. 41 of drawer, sufficient acceptance, 102 usually across face of bill, 103 where his name is mis-spelt, 105 of acceptor may be on bill before that of drawer, lOfi on blank paper converted into bill, 114 used for drawer, acceptor or indorser, 114 essential to liability on bill, 138 may be a trade or assumed name, 138, 141 of firm name, same as of all partners, 138, 142 of ag«nt as regards principal, 138 forged or unauthorized, is inoperative, 145, 147 unauthorized, may ba ratified, 145 forged, cannot be ratified, 148-150 by procuration notice of limited aut'iority, 153 when principal bound by agent's, ir)3-'J with ad led word", effect of, 159 *' ' INDEX. 569 SIGNATURE— CoHf/H«tv/. rule of coustraction as to principal and agent, lot) of officers for a company, 1(50 of an agent for his principal. 1''0 of each par'y to bill proHumed for value, 19S of indorser operates as negotiation, 211 indorsement by one's proper, 215 to notic2 of dishonor not necessary, 278 of notary necessary to protest, ;t03 canceUation of, by holder discliarges party, M")!! mistake, ilCiO erasing, a material alteration, Hi) I of acceptor for honor, 8(58 of rai\kor to promissory note, IIS, 414 of s'jve'"al makers to a note, 4"2!, 4 '4 not necessarily by party's own liand, 43') sufficient if by or under iiis authority, Ho seal of a corporation is sufficient, 437 SIMPLE CONTRACT, delined, 1(58 consideration for, valuable consideration for bill, 1(5(5 SPECIAL CROSSING of cheque defined, 407-8 drawjr miy make or unmake, 408-;i bank may make, 408 to one bank only, 405) SPECIAL INDORSEMENT, defined, 217, 210 indorsee under, similar to payee, 220 blank indorsement may be converted into, 220- 1 holder cannot strik'3 oat in his clmin of title, 221 SPECIFIED EVENT, C3rtain to happen, bill payable on or after, 8 J at a determinable future time, 83-4 SPECIFIED PERSON, bill is pxyable t\ or ti order of, ^^^ such person is called the payee, 45 bill to, and not to order of, is negotiable, 73, 74 note is payable to, or to order of, 413, 41o SPECIFIED PLACE, acc2ptince to pay at, is not qualifie.l, 10!» " and not elsewliere " not necessary, 110112 presentment for payment must be at, 258-<), 427, 430 acceptor not discharged by omission to present at, 307 maker of note not discharged by omission to present nt, 427 m jt '- 560 INDEX. STAMPS, cases relating to, not cited, iv. . in England, may check improper filling up, 115 want of foreign, will not invalidate bill in Canada, 382 STATUTE OF FRAUDS, guarantee on a note, 169 contract not binding under, 174 STATUTE OF LIMITATIONS— See Limitation.^ STATUTES CITED. IMPERIAL : 21 Jac. 1, c. 16, p. 234 ay Car. 2, c. 7, p. 89 !l VVm. 3, c. 17, p. 374 3 & 4 Anne, c. 9 pp. 12, 16, 95, 102, 342, 374 14 Geo. 3, c. 83, p. 8 15 Geo. 3, c. 51, p. 10, 51, 440. 17 Geo. 3, c. 30, pp. 10, 446 1 & 2 Geo. 4, c. 78, pp. 104, 110, 19 & 20 Vict. c. 97, pp. 103, 104 24 & 25, Vict. c. 98, p. 409 B. N. A. Act, 1867, pp. 1, 23, 124, 381 34 & 35 Vict. c. 74, p. 81 39 & 40 Vict. c. 81, p. 407 41 & 42 Vict. c. 13, p. 103 45 & 46 Vict. c. 61, Bills of Exchange Act, 1882, pp. 3, 21, 65, 73, 80, 147, and under the various sections of the Canadian Act. DOMINION : 35 Vict. c. 10, p. 95 47 Vict. c. 38, p. 204 49 Vict. c. 25, pp. 17, 18 51 Vict. c. 33. p. 17 53 Vict. c. 17. p. 1 53 Vicj. c. 31, pp. 25, 26, 45, 75, 126, 202, 395, 415, 418, 446 53 Vict. c. 32, pp. 25, 126, 395 53 Vict. c. 34, pp. 75, 202 54 & 55 Vict, c, 17, pp. 6, 81, 83, 86, 107, 146-7. 243, 249. 301, 449 R. S. C. c. 1, pp. 17, 27, 30, 36, 39, 45, 138, 212, 443, 447 30, p. 42 31, pp. 42, 418 ' 35, p. 290 50, pp. 18,128 ■'..... 118, pp. 41, 45, 132 119, pp. 41, 45, 132, 167, 457 . ^ . .* -.• -""; . INDEX. . 561 DOMINION— CoH^««e /. 123, pp. 1, !)0, 108, 110, 202, 204, 282, 285. 21)0, :J0'^ 304 30(5,827,441,442.418,444,447,408 474 127, pp. 75, 202, 203, 325 164, p. 39 165, pp. 148, 407, 409 ITPPKK CANADA OH ONTARIO: :}2 Geo. 8. c. 1. pp. lo, 447 51 Geo. 8, c. 9, p 10 2 Geo. 4, c. 12, p. 10 5 Wm. 4, c. 1, p. 10 . 7 Wm. 4, c. 5, pp. 10, .52, 103, 110 12 Vict. c. 70, pp. 10, 207 13 & 14 Vict. c. 23, p. 9 C. S. C. c. 57, pp. 392, 444 C. S. U. C. c. 42, pp. .58, 110, 447, 471) R. S. O - 41, pp. 32.5, 854 (iO, p. 842 <)1, p. 414 122, pp. 70, 457 ■ 123, pp. 127, 342 182, p. 128 153, p. 489 156, pp. 46, 133 ^ 157, pp. 46, 133 184. p. 4.55 * 203, p. 89 LOWER CANADA OR QUEBEC : 17, Geo. 8. c, 2. pp s, 219 25 Geo. 3, c. 2, p. 8 12 Vict. c. 22, pp. 9, 19, 110, 219 18 A 14 Vict c. 23, pp. 9, 110 54 Vict, c 35, p. 415 C S C. c. 57, p. 392 * C. S. L. C. 0. 64, pp. 804, 439, 443, 488 R. S. Q. Arts 8498, p. 89 3601-8957, p. 439 4629—80, p. 455 4689—4746, pp. 46, 188 See Civil Code— Code of Civil Pruceduic NOVA SCOTIA : 8 Geo. 8, c. 2, p. 12 1 & 2 Geo. 4, c. 5, p. 12 28 Vict. c. 10, p. 103 ■ m'cl.b.b.a. — 36 ," \w (1 ,1 1 562 INDEX. I i*" «;^^ 9, 101 to bill may accept for honor, 3(](; pay bill for honor, 371 STRIKING OUT INDORSEMENTS, 221-2 SUM CERTAIN, bill or note must be for, 3,$, 41, 4i;( what is (laenied, 41-o, 74 SUM PAYABLE, in bill. 3H must bs in money only, 41-r» may be with interest or by instalments, 74-7 with exchange, 74, 77.M " with interest " means from date, 7') words control figures in case of variance, 78 may be filled up if left blank, 114.(; holder in due course may recover, 117, 235-7 with interest Ifrom maturity or dishonor, 324-5 in case of dishonor, 324-7 determined by rate of exchange on day of dishonor, 327, 3;t() alteration of, material, 3()3, 3(14 holder in due course protected, 3(51, 3()3 in foreign currency, how calculated, 3<)0 SUNDAY, bill not invalid because dated on, hm laws in different provinces, H8 a holiday or non-jnridical day for bills, 91 bill falling due on, payable next business day. !»1 May 24th falling on, Monday is observed, i»l July 1st falling on, Monday is observed, !»1 is not counted in delay of less than three days, 438 no presentment for acceptance on, 24G SUPPLEMENTARY PROVISIONS, 433-448 SUPRA PROTEST-See .kr.;,f«„cc/b,- //o„or SURETY— See Vnncipol and s^nrfi/ SUSPENSION of acceptor, protest for better security, 301 of riglit of action by accapting a bill, 333, 330-7 taking a renewal,333, 337 TARIFF of fees for protests in different provinces, 440-2 TELEGRAPH, notice of dishonor by, 277 TELLER cf bank must not act as notary, SOT THANKSGIVING DAY, holiday for bills, 92 *• 5G3 ^>), if ■ n f .5H4 INDEX. TIME OF PAYMENT, fixed or determinable future time, 33, 82-3, 413 by instalments, each treated as a separate bill, 7(» none expressed, bill is payable on demand, 80 " on presentation " is payable on demand. 80 accepted or indorsed when overdue, on demand, 82 method of computing;, 90-6 when days of grace are added, 90 first day excluded, last included, 93 when delay reckoned from acceptance, 93-4 dishonor, 94 • wlien bill for a month or months, 94-5 alteration of, material, 303, 304 TIME, REASONABLE, see Reasonable Time TITLE, see also Defect of Title of party nej^otiatinj; to holder in due course, 180-18) acquired from holder in due course, 19() to patent ri<»ht note or bill, 203 acquired by transfer without indorsement, 209 of restrictive indorsee, 224 of person taking overdue bill, 220-9 bill before maturity with notice, 230-1 of holder in due course, 235-9 to cheque crossed " not negotiable " 411-2 liability of bank if customer has no title to crossed cheque, 412 of person acquiring stale demand note, 420 TOTAL FAILURE OF CONSIDERATION— See Failure TRADE NAME, liability of person signing bill in, 138, 141 TRANSFER, for value witliout indorsement, 209 right of, under restrictive indorsement, 224 bill may contain words prohibiting, 09. 73 intention to prohibit, must be clearly expressed, 69 of chose in action or debt, 70 see Deliven/ — Indorsement — Nepotiation TRANSFERABLE, bill indicating intention that it be not, 09, 73 see also Negotiable * TRANSFEREE, of patent right bill or note, 203 acquires greater rights only by negotiation, 206 constituted holder by negotiation, 206 by delivery, 207 by indorsement and delivery, 208 "^ •' without indorsement of bill to order, 20i( '' TRANSFERRER BY DELIVERY, defined, 327 liability of, 328 _■ -.••""" ■. 7 -^ w. at he warrants, 329-330 •' ' * ' ^' ■ ■'' • i *• --r- -• ".:s. '■■:.'- INDEX. 565 41 » TRUE DATE of issue or acceptance, when holder may insert, 85 bill payable to holder in due course, as if, 86 TRUSTEE becoming party to a bill, 159, 104-ti holder with lien for part is, for balance, 181 restrictive indorsee compared to, 224 UNAUTHORIZED SIGNATURE, ratification of, Ur, estoppel as to, 148, 150 3 UNCONDITIONAL, bill must be, 33, 34 note must be, 413 UNDATED bill or acceptance, holder may insert true date, 85 UNLAWFUL MEANS, bill or acceptance obtained by, 190 UNQUALIFIED ACCEPTANCE, holder entitled to, 253 UNREASONABLE length of time, demand bill in circulation, 229 a quejtion of fact, 229-230 USAGE, when general, becomes part of law merchant, 452, liii.-lix. particular or local requires proof, 452 may determine negotiability, 454, 457, xlix , Hi. USURIOUS CONSIDERATION, bill for, when void, 202 CONTHACT. bill given on, 202 USURY abolished in Canada, 75, 202-3 except as to banks, and no penalty as to them, 203 VAGLIANO'S CASE, 647 VALID, bill may be, but not negotiable, 69 bill improperly filled up is, to holder in due course, 117 delivery to holder in due course presumed, 121 VALUABLE CONSIDi: RATION for bill, how constituted, 16()-176 antecedent debt or liability deemed, 166, 170 whether a moral consideration is, 167 VALUE, defined, 30 bill need not specify, 51 " value received " not now necessary in bill, 51 and valuable consideration synonymouK, 30, 16(> may be given at any time, 179 once given, holder deemed holder for, 179-180 holder having lien is deemed holder for, 180 accommodation party is one who has not received, 183 liable to holder for, 184 holder in due course must have given, 186, 188, 198-9 6v**ry party to bill deemed to liave signed for, 198 burden of proof as to, when fraud, etc., proved, 198 201 transfer of bill to order for, without indorsement, 209 VERBAL ACCEPTANCE formerly sufficient, 102-3 still valid in some of the United States, 104 3 fJ^R INDEX. VEHHAL ACCEPTANCE— t'«»itJHue7 indoraer, 97-8 of prcMentment may be express or implied, 2li7-S nj ly ba in writinj^ or verbal, or by conduct, 2i)7 binding,' without consideration, 2(57 of notice of dishonor may be express or implied, 2'.):{ before or after dishonor, 293 ennres to other parties, 294 of protest, 98, 305 WAR. an excuse for not presenting a bill, 2(»4 , WARRANT FOR PAYMENT OF DIVIDEND, provisions as to crossed cheques apply, 444 WARRANTOR, of a note, 1(19 not a party to the bill, 29(i English decisions regarding;, 319 French law of aval, 319— See Aval whether person indorsing above payee is, 321, 322 WARRANTY, by acceptor, 313-4 drawer, 31(5 indorser, 317-9 transferrer by delivery, 320-330 maker of a note, 431 WIFE — See Married Woman " WITHOUT GRACE, "•time bill, has no days of grace, 9(> " WITHOUT RECOURSE,' indorsement, effect of, 98 WORDS, prohibiting transfer, (>9, 73 must be clear, (59 amount expressed in, overrides figures, 78 added to signature to limit liability, 159 on face of bill or note for patent right, 203 WORDS AND PHRASES DEFINED, acceptance, 22, 99 accommodation bill or party, 183 action, 23 allonge, 213 ' ' aval, 319 bad faith, 434 -• : . bank, 25 , - •' INDEX. WORDS AND PHRASES DEFINED- bank notes, 418 bearer, 26 bill, 20 bill of exchange, H3 ' lioti, 418 business day, 438 cause, 167 cheque, 3!)5 common law, 4;j1 compensation, 3,H9 consideration, 167 crossed cheque, 407 counter-claim, 24 days of fjrace, !)5 defect of title, 190, 226 defence, 30 delivery, 27 dividend warrant, 444 drawee, 3!) "drawing" a bill, 381 duress, 101 escrow, 122 estoppel, 150 fictitious parson, 66 foreign bill, 52 note, 421 * • forgery, 147 fraud, 1!)1 good faith, 188 holder, 27 holder for value, 179 holder in due course, 18(i, 231) holiday, 91 immediate parties, 122 incidental demand, 25 indorsee, 220 indorsement, 29, 211 inland bill, 52 note, 421 interpretation, 384 I. O. U. 418 issue, 29 law merchant, 451 lien, 180 r>07 -Continued. 568 INDEX. WORDS AND PHRASES DEFINED— ComMhi^c/. Lieutenant-Qovernor, 02 mfirger, 388 money, 41 month, i)4 nugotiatiuii, 20() note, 2<> novation, 383 overdue, 22(5 payee, 45 payment, 332 payment in due courae, 332 person, 30 prescription, 841 presumptions, 124 procuration, 21!( promissory note, 413 province, 92 _ . referee in case of need, 97 remote party, 122 nana reconrs, 98 . set-off, 23 signature, 39 simple contract, 108 supra protest, 3G(i . . transferrer by delivery, 827 value, 30 ij ^ without recourse, 98 ' WRITING, defined, 31, 36 bill is contract in, 83 parol evidence cannot contradict, 3(j-7 exceptions to foregoing rule, 88 acceptance must be in, 102, 368 indorsement must be in, 212 notice of dishonor may be iu, 276 renunciation must be in, unless bill given up, 854 signature to, 485 WRONG DATE, effect of insertion of, 86 WRONG DESIGNATION of drawee, acceptance in case of, 105 of payer or indorsee, indorsement, 215 YEAK', drawer of cheque paid on forged indorsement has, 14l) dvawee who has paid cheque hag some period, 146, 150 bills are preaocibod in (juebac in 5 years, 341 limitation in other provinces is 6 years, 342 7 487 I II