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Un des symboles suivants apparaitra sur la dernidre image de cheque microfiche, selon le cas: le symbole — ► signifie "A SUIVRE", le symbole V signifie "FIN". Les cartes, planches, tableaux, etc., peuvent dtre filmds d des taux de reduction diff^rents. Lorsque le document est trop grand pour dtre reproduit en un seul cliche, il est f\lxu6 d partir de Tangle supdrieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images ndcessaire. Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 '■J*«!6Q.'.'E*-3. I u BR Any BILLS, NOTES AND CHEQUES. THE BILLS OF ErUtllGE ACT, 1890. CANADA, AND AMENDING ACTS, WITH NOTES AND ILLUSTRATIONS FROM CANADIAN, ENGLISH AND AMERICAN DECISIONS, AND REFERENCES TO ANCIENT AND MODERN FRENCH LA W. BY J. J. MACLAREN, Q.C., D.C.L., LL.D., Member of the Bar of Ontario and of Quebec ; Author of Banks and Bankimj, Etc., Etc. SECOND EDITION TORONTO: THE CARSWELL Co. Ltd., LAW PUBLISHERS. Etc. 1896. 254745 Entered accordiiiR to Act of the Parliamout of Canada, in t)io year one thousand eight hundred and uinety-aix, by Thr Cabswell Co, (Limited), in the office of the Minister of Ajmculture, PRiNTF.n ny The Carrwkll Co. Ltd. », 30 Adelaide St. E. Toronto. --^WjEs -ift'-iii PREFACE TO THE SECOND EDITION ni HE first edition of this work having been sold in a' little more than a year trom its publication, it has been out of print for nearly three years. Several new features have been added in the pre- sent edition. The Imperial Act of 1882 having been adopted by most of the Australasian colonie.s shortly f fter it became law in Great Britain, a number of deci- sions in the Courts of these colonies on the Act have been inserted, some of them on points of interest that have not yet ar.sen elsewhere. The two Dominion Statutes of 1893 and 1894, making changes in the holidays for bills and notes, have been incorporated in the Act. The notes have been carefully re't^ised, and a number of changes have been made. About two hundred and fifty new cases have been added, more than half of them being Canadian, and nearly all of them decisions render- ed since the publication of the first edition. J. J. M. Toronto, April, 1896. Ill I' I In .<• PREFACE TO THE FIRST EDITION. IN the course of his work upon the Act of 1890 the writer found tliat in a number of instances where our Parliament 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 un- provided-for cases, it was also thought, would interfere with the uniformity 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 refer- ences 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 deci- sions are brought down to January, 1892. Where a summary of the law is given for any coun- try it is taken as a rule from the latest edition of oie of the leading text writers. Thus, for a summary of the law in England reference is usually made to Byles on Bills, 15th ed., 1891, or to Chalmers, 4th ed., 1891. For the United States, Daniel on Negotiable Instruments,. 'Jk '■A A f,,' PREFACE. V 4th ed., 1891, and Randolph on Commercial Paper, have been selected. For the old French law, Pothier, Contrat de Chaage, is usually cited; and for the modern French law, the Code de Commerce, 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 American nearly four liundred. 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 deci- sion 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 com- parison 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 Act, and the old laws regulating pleading and procedure, and those which depend upon the facts of the particular case. A large proportion of the Cana- dian cases will be found in the illustrations, where they are given with considerable fulness. Special attention has also been paid to the deci- sions upon the Imperial Act of 1882. Not only those in the regular English Law Reports have been cited, but also the Scotch and Irish cases, and those in the other English Reports, including twenty-five cases from the London Times '.aw Reports. These decisions are of special value on account of the great similarity of the SiBf8!».S VI PREFACE. two Acts, especially in view of the provision in bection 8 of the amending Act of 1891, that the rules of the com- mon law of England including the law merchant shall apply to Oanada, except in so far as they are incon- sistent with the express provisions 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 closely 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 intercourse. As so many of the Canadian decisions contain allu- sions to the laws in force in the various provinces before the present Act, there will be found in the Appendix the Articles of the Civil Code of Quebec upon the sub- ject, 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 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. v> Toronto, April, 1892. J. J. M. CONTENTS. Addenda kt Corrigkkda Casks Cited . . Overruled Casks ., .. ». ... .. ., ABBr.KVIATIONS Introduction BILLS OF EXCHANGE ACT, 1890. Former Lbgislation in Canada and the Provinces Pack xii xiii . XXXV zli . xlv PART L Sections OF the Act. Preliminary— 1 Short Title of the Act— Commencement jl i, Interpretation of words used 21 22 3 4 PART IL Bills of Exchange— Form and Interpretation. Bills of Exchange defined— Notes and Illustrations Inland and foreign bills distinguished Bills presumed to be inland unless the contrary appear If different parties to bill are the same person When instrument may bo treated as either bill or note Address of bill to drawee or drawees— Certainty Certainty required as to payee— Fictitious payee Vagliano v. Bank of England Negotiable and non-negotiable hills— to bearer— to order Chose in action Sum payable— interest— instalments— exchange .. SI 49 52 53 63 56 66 61 66 67 72 /*: ll i Vlll CONTENTS. Skctionh. Page. 10 Bill payaV)le on detn>»nd— no days of grace 77 U Bill payable at a future time, certain to iiapjien 79 12 Omission of date filling up- wrong date 82 18 Datfi presumed to be corrt!ct--antedating--po8tdating . . . 84 14 Computation of time of payment— days of graee -holidays 86 Payable at or aft«r sight — at a month or numths .. .. 90 16 Referee in case of need — resort to hirn optional . . . , 93 16 Liabilities may be negatived or limited, or duties waived . . 94 17 Definition of acceptance 95 Requisites of acceptance . . . . . , 98 18 Time for acceptance— before completion — if overdue . . 101 19 (reneral and qualified acceptances 103 Examples of qualified acceptances . . . . , . . . 104 20 Inchoate instruments— signature on blank paper 110 Filling up — reasonable time— authority given 112 21 Contract not complete until delivery 114 Requisites as to delivery — presumption 116 Capacity and Althoiuty of Parties— 22 Capacity of parties — capacity to contract . . . , . . 119 CorjKjrations as parties to bills . . . . . . . , 126 28 Signature essential to liability . . . . ' 132 Assumed name— firm signature 136 24 Forged or unauthorized signature 189 Payment of cheque on forged indorsement 140 86 Procuration signatures — when principal bound . . . . 147 26 higning as agent or in representative capacity . . . . 162 Officers of corporations . . . . . . . . . . . . 153 Thk Consideration for a Bill— 27 Valuable consideration — anteced'^nt debt " * . . . . 159 Failure of consideration . . . . . . . . . . . . 163 28 Accommodation party to a bill 174 88 Holder in due course defined . . . . . . . , . . . . 177 Defects of title, fraud, duress, etc. . . . . . . . . 180 SO Presumption of value and good faith — proof 189 Bill for " patent right " 193 Neootiation of Bills- si Negotiation of bills— to bearer— to order .. .. .. .. 196 Transfer without indorsement 199 88 Requisites of a valid indorsement — allonge 202 Order of indorsements . . . . , . 207 88 Conditional indorsements not binding 207 84 Indorsement in blank— special indorsement 209 86 Restrictive indorsement- rights under .. .. ,. 212 36 When negotiable bill ceases to l)e so 214 37 Negotiation of bill to party ■■ 'ady liable 220 88 Rights of holder— action on > il— holder in due course . . 221 39 40 41 48 48 44 45 46 47 4» 62 53 64 55 66 67 68 69 60 61 62 63 64 65 CONTfcNT.j. Sbotions. Gknkkal Duties of thb IIot.DER— Whpn prescntnienC for accejitaiice in necessary Presentment of bill j)aya1)le at or after siffht . . Rules aH lo presentment for acceptance Excuses fur mm- presentment Drawee allowed two Hays to decide as to acceptance Bill Jishoni»red if not accepted Holder's ucourse againxt drawer and indorserH . . Qualified acceptance — holder may refuse If taken, a«.ient of drawer and indorser necessary Presentment for payment — effect of not presenting . . Rules as to presentment time- fierson Proper place for presentment Excuse for deiay >n presentment . . , . Presentment for pay iiient distjenaed with .. Dishonor by non-payment Notice of dishonor n.nd effect of non-notice Rules as to notice of dishonor . . Delay in nc'tice of dishonor excused .. ,. .. Notice of dishonor dispensed with .. .. .. Noting or protest of inland bill - necessary in Quebec Dishonored foreign l>ill must be i rested . . Rules as to protest — contents Liability of acceptor a.s to presentment . . . , LlABILITIEH OK PaRTIKS— Bill not an assignment of funds Liability of acceptor — estoppel Liability of drawer— estoppel Liability of indorser—estopijel Stransrer signing bill, liable as indorset Warrantor — avai Measure of damages on dishonored bill . . . . Transferrer by delivery — warranty DrsCHAKlJK OF BrLL — Dischai-ge by " payment in due course " Prescription or Statute of Limitations Payment by druwer or indorser not discharge. . Acceptor the holder ut maturity— confusion Waiver by holder as against acceptor, a discharge Holder may discharge any party to bill Discharge by cancellation of bill Errcmeous cancellation not a discharge Material alteration discharges bill Acceptance and Payment for Honor— Acceptance for iionor supra protest Liability of acceptor for honor IX Paoe. 231 234 237 238 239 239 241 241 242 243 246 251 252 266 267 260 276 278 283 285 286 2!)2 296 298 301 302 304 305 310 14 318 326 334 337 ;«8 ;W9 344 345 345 351 353 •.>v4. fit tv. X: CONTENTS. Sections. 66 Presentment to acceptor for honor 67 Payment for hoaor — act of honor Lost Instruments— . , ■ ■ « 68 Holder s right m 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 . . PART III. Cheques on a Bank— ' 72 Cheque defined —provisions a'^ to dera?.nd bill af ^/ly 73 Presentment of cheque for payment 74 Duty and aiithority 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 7K Crossing cheque a protection to bank and drawer 80 Holder taking " not negotiable " cheque 81 Protection to bank collecting crossed cheque FAOK. .. 354 356 359 359 361 365 379 386 389 .393 393 393 394 395 396 397 398 V, jM^ f ART IV. Promissor. Notes- 82 Promissory nt te defined .. 83 Delivery necessary to ii iir.plete note. , 84 .Toint and several notes 8o Presei.^ment of i;f)te payable on demand 86 Prpsentment of note for payment. . 87 Liabilrty of maker— e8t<)pi)el .. 88 Application of Part II. to notPfj . . 399 407 408 410 413 417 418 PART V Supplkmkntary— 89 G.w)d faith defined 90 Signatures by agents — signatures of corporations 91 Computation of time — " non-business days " 92 Whiu nc^'.nf? is equivalent to protest , , 419 421 423 424 ^!id.^iiL.^ ^.:^,iJk.. 3^S^S^^^^^^^M^^!^S!^^i COyiENTS. Sections. M Protest by justice -f the peace , , . . Notarial charges for protests . . Forms of protests M Dividend warrants may he crossed Wf Repeal of Acts in ?econd schedule Cfc.tain Imperial Ao^s not to be in force in Canada 96 Construction with other Acts, or documents 97 Commencement of Act —not retroactive . . Amending Act of 189J Common law of England —law merchant Amending Acts o? 1893 and 1834 .. ,., Other Nkqotiablb I^vstbumknts . . . . FIRST SCHEDULE. FouMB A. TO J,— PnoTKS'T— NoncE ,. V. SECOND SCHEDULE. jGnactments Repkai>ed ; , , . Page. p 424 426 , 4iS 480 , 431 432 433 433 435 436 440 441 .. 448 456 APPENDIX I. Additional Forms— Bills- Chkquks~Note3 468 APPENDIX IJ. Statdtes— Civil Code o'' Lower Canada- Bills of E.xchange, Notes and Cheques 462 Code of Civil Procedure , , , 47tt Rev.Stut. N.S ... ,, „ .. 484 Rev. Stat. N. B •. .. i. .. 485 iKDBX 48'^ iii 4i [: 1i ill < Wh ADDENDA ET CORIUGENDA, 1^ ; ii I*- P\ 1. Pagb 37, lines 6 and 14, for "5 Exch.," read "6 Exch. ' 2. Page 45, after No. 11, add :-" 11 a. A promise to pay a sum by instalmontH, tlie whole to become due ou default in pay- ment of one instalment, with the following proviso added ; ' No time given to, or security taken from, or cciposition arrangements entered into, with either party hereto, sliall prejudice the rights of the lioldcr to proceed against any other party ' : Kirkwood v. Smith, W. N April 2uth, 1896, p. 46." 8. Page 46, after line 28. add :-" 3 a. 'An order to pay »600 out of money due me by your company ' : Ward v. Royal Canadian Ins. Co., Q. E. 2 S. C. 229 (1892)." 4. Page 123, illustration 3, after (1889), add : "In a subsequent action founded on the same transaction further proof was made, and it was held by the Supreme Court that plaintiff was entitled to judgment against her und to execution against iier separate property : Moore v. Jackson, 22 S. C. Can. 210 (1893)." 5. Page 294, last line, for If ' 288," read " 292." Page 347, last line but one, for " Q. B.," read " 1 Q. B. . w ^m^ApsasffisciizsEiii^r "*:,. ■■• "xt^'-w^s CASES CITED. A. .„■■:,;, Abbott .. Fisher, Ifig. " V. HendrickB, 49. V. Wnrtele, 340. Abell V. MorriHon, HtW. Abrey v. Cnix, 3(5, 162. Achfson V. Fountain, 212, Iviii. Adams v. Nelsdn, 320. " V. '1'lioin.as, 35. Adansonia Co., Re. 1,3.J. Aga Aiimwl lapaliany v. Crisp, 330. Agra Bank, Jie, 297. . . ". V. Lcighton, 171. As'nciiltiiral S. & L. A. v. Fede-al Bank, 383. Alabama Coal M. Co. v. Bvainard, 56. Alcock V. vSmitli, SC'., .372, 377. Alderson v. Langdalo, 347. AldouH V. Cornwell, 350. Alexander v. Btu-rhfiold, 294, 888. V. McKHnzift, 152. " V. Sizf-r, 1.57. " V. Thomas, 82. Alltjn V. Clark, 316. " V. Edmiindsoii, 245, 2ti7, " V. Kemble, 72, 372. 376, 377. " V. McNauRhtou, 2.55, 374. ;; V. Sea, Fire & L. A. Co., 34, 54. V. Huydani, 231. Alliance Bunk v, Carey, 378. AlliHon V. Central Bank, 27, 233. " V. MuDonald, 343. Alnion V. Cock, 1.50. Almour v. Cable, 1(!5. " V. Banf|iie.)acfiue8Cartier,150. Alsager v. Close, 117. Amazon Ins. Co. v. (^ue'iec and (}nlf I'orts H. H. Co., 217, 325, Aniiw, He, 38. Ammidown v. Woodman, 90. Amner v. Clarke, 52. Amory v. Merrvweather, 218 Anclier V. Bank of England, 213. Ancoma v. Marks, 224. Anderson v. Artihibald, 259, 282. V. .lenninKii, 162. V. Park, .38. V. T(Kld, 7. " V. Weston, 84. Andffton v. Beck, 2.59. AndrewH v. Franklin, 81. V. Pond, 369. AndroBcogfirin Bank v. Kimball, 83. Angers v. Erniatinger, 325. Angle V. N. W. Mutual L. Ins. Co., 181. Anglin v. Kingston, 443. An^lo-CJreek N. Co , He, 222. Aniba v. Yeonians, 203. Anon., 1 Ld. Kavm., 229. 12 Mod., 56. Archer v. Lortie, 2t)2, 414. Archibald v. Brown, 15H, 417. Armour v. Gates, 35, 1,55, 163. " V. Imperial Bank, 446. Armstrong v. Chadwick, 255. V. Christiani, 265. " V. Garafraxa, 423. " V. Hemstreet, 384. Arnold v. Caldwell, 385. " V. Ciiequo Bank, 116, 117. " V. Dresser, 260, Am jt V. Symonda, 28, 203. Arpin v. Poulin, 184, 186. Arthur v. Lier, 342. Aspitel V. Bryan, (iO, iiG, 300. Astley V. .fohnson, 169. Astor V. B( nn. 372. Atkins V. Owen, 323. " V. Wardlfl, 97, 128. Atkinson v. Hawdon, ,347. 318. Attenborough v. Mackenzie, 221, 32H. Atty.-Gen. v. Bouwens, 442. " V. Htewart, « V. Theobald, 434. Attwood V. Emery, 112. " V. Muniiings, 161. Atwooti V. Crowd ie, 173. Auldjov. McDougall, 57, .59, 148. Aurele v. Durocher, 199, 403. Ayr Am. Plough Co, v. Wallace, 306. Ayrey v. Kearnsides, 45. Ay ton V. Bolt, 3.%. Awde V. Dixon, HI. B. Backliou^e v. Charlton, 390. Bttdemi v. Braidt, 123. Barley v. Ellison, .57. Bailey v. Bicuvell, 191. " V. BodeidiRtn, 236. " V. Edwards, 342. " V. Porter, 2^5. Bailho V. Hickson, 274. Bain v. Gregory, 265. XIV CASES CITED. « it Bain V. W. & V. Ry. Co., 378. Raines, Re, 420. Baker v. Birch, 253. " V. Dening. 38. " V. Reatl, IHR. Balcolm v. Phinney, 308. Baldwin v. lIitclio(x;k, 247. " V. Richardson, 2V8. BallinKalls v. Gloster, 240. Balloch V. Binney, 273. Baintield v. Tjipi>er, 332. Ban))iiry v. Lissiitt, 109. Bank of Alexandria v. Swann, 265. " America v. Copland, 375. " Australasia v. Breillat, 136. " BiMigal V. Fagan, 17i). " ''^ V. McLeod, 420. " Brazil, .Ea- parte, 311. B. N. A. V. Ellis, 211. " " V. Gibson, 46. " " V. Jones, 2(i7, 320. *• "v. Ross, 208. 279. " Commerce v. Adamaon, 15. " " V. Bogy. 2!)7. " " V. Oreen, 259. " V. (iurh-y, 163. " V. Nortliwtxxl, 342. " V. Wooflward, 173. Enf^^land v. Newman, 314. " V. Vagliano, 247. Ireland v. Archer, 101. Michiffan v. Gray, 268. Montreal v. Armour, 320. V. Audette, 186. " V. Cameron, 183. De Latre, 96, 155. Grover, 205. Harrison, 313. , Knr.pp, 472. Lanp^lois, 209. Little, 440. Page, 148. Scott, 279. Smart, lit), 1,V). Thomas, VK, 299. N. B. V. Knowles, 255, 278. " V. Millican, 275. N. S. W. V. Milvain, 389. N. S. V. Ijepage, 111. Ottawa V. Harrrington, 130. Scotland v. llom. Bunk, .345. South Australia v. \Villiama,,37 Syracuse v. Holliater, 415. Toronto v. Colxiurg P. & M. Ry. Co., 444 V. McDougall, 185. Upper Canada v. Bartiett, H)3, 320. V. BliKjr, 273. V. Cooley, 279, V. Jardine, 342. V. Jones, 36. V. Ockormann, 342. (1 V II V tl V M V «« V U V U V II V . Bayley v. Taber, 84. Beak v. Beak, 3i)l. Bealls V. Peck, 2(58. Beardsley v. Hill, 76. "v. Baldwin, 82. Beaubien v. H'lsson, 124. Beaudoin v. Dahnasse, 321. Beaudry V. liaflamtne, 404. Beaulieu v. Demers, 220, 410. Beaumont v. Barrett, 8. V. Greathead, 323. Beau pro v. Burr, 3(i0. Becher v. Aniherntbur>f, 249. -'■. Bechervaise V. Lewis, 170. Beckett V, Cornish, 270. Beckham v. JJrake, 133. Beddall v. Maitlaud, 24. - "' Bedell v. Eaton, 'M2. ■ ! Beechinj,' v. firower, 49, 247. Beenian v. Duck, 146. Bobbie V. Levi, 8,5, 80. Beicpie V. Bury, 177. ; Beirnstein V. Usher, 246. Belanger v. Baxter, 190. Belden v. Carter, 117. Belfast Banking' Co. v. Doherty, 125. Bell V. Dagg, 310. " V. Ingestns 117 " V. Moffat, 135. V. Packard, .371. V. Riddell, 180. B<>llamy v. MarjorihankH, 391. Beltz V. Molsons Bank, 348. Berard v. McKay, 187. Benham v. Lord Mornington, 370. Bennett v. Brnrnfitt, 39. " V. London & County Bank, 398. Benoit v. Brais, 184. Bftntinck v. Dorrien, 115, 290. Berg V. Abtott, 251. Berridge v. Fitzgerald, 259, 277. Berthelot v Aylwin, 342. Berton v. Central Bank, 74, lOO. Besantv. CronH, ;!(?, Bethell, Be, 21, ,^28. Beitis V. Bristol, 423. V Weller, 42. Bevan v. Stevenson, 169. Beveridge v. Burgis, 278. Bickertlike v. Bollman, 281. Biggs V. Lawrence, 367. " V. Pijwr, 84. " V. Wl)ell, 51. Bois V. (rervais, 180. Bolton V. Dugdale, 45. Bomley v. Frazier, 304. Bond V. Moore, 252. Bonistee! v. Saylor, 185. Bof)th V. Barclay, .306. " V. Powers, 349. Boston Bank v. Hodges, 240. Bcttomley v. Nuttall, ,'523. Boucher v. Girard, 121. " V. Lawson, 367. Boulton V. .Tones, 42. Bounsall v. Harrison, 220. Bonrdin v. (Jr«'!iW(jod, 333. ; Bove V. Macdonald, 335. Bowen v. Newell, 381, 438. Bowes, Re, \T1. " V. Holland, 175. * " V. Howe, 2,53, 254. Bowker v. Fenn, 326. Boyd V. Nasmith, 384, ,388. " V. Orton, 268. Boyes V. Joseph, 233. BovK, Re, 174. Boyse, He, 48, 254, 328. Bradbury v Baillie, .332. V. Doole. 50. V. Oliv-r, 35, 108. Bra7. British Linen Co. v. Caledonian Ins. Co., 2!t7, 447. " V. Drwmmond, 378. Britt V. LiiwHon. 2.')0, 410. Brittoii V. Fish»T, 217. " V. Milson, 280. Brockville & (). By. Co. v. Canada C. Ky. Co., 129. Broke v. Arnold, 2*27. Bromnge v. Lloyd. 11."., 1<)8, " V. V.arifli.an, 2()0. Broniwich v. Lloyd, xlviii. Br. Browne v. Boidton, 248. " V. Dow, 481. Browning v. Rrit. Am. F. S., 149. " V. (Josuell, 34!*. V. Kinnear, 278. Bnindige v. Delanev, 170. Bruneau v. Barnes, 124. Brunet v. Lalonde, 1i>8. Bryant v. Bani|ne du Pouple, 150. " V. Lord. im. " V. Merchants' Bank, 9.5. " V. (.^nebec Bank, 147, 150. Bryoe, B,; 38. Bueoleugh v. Kden, 330, 333. Buck V. Rolwon, 47. Buckley v. .l.ackson, 213. (hiffalo l?ank v. Tr\isa)tt, 374. Bull V. (^oiieland, 185. " V. First Nat. Bank, 79. Bull.T V. Crips, 10, 47. Bult V. Morrell. 97, 128. Burehiield v. Mm.re, 299, 316, 347. Burden v. Benton, 172. Burges v. Wickham, 33. Burgh V. Legge, 2.58. Burke v. Dulaney, 118. " V. Elliott, 279. Burmester v. Barron, 272. Burnett v. Monag'ian, 244, 252. Bnrnham v. Watts, 45. Burns V. Har|)er, 405. " V. Snow, 134, 300. Burrough v. Moss, 218, 320. Burrows v. .Teniino, 371. Burson v. Huntington, 117. Butler V. Crips, ,53. " V. McDoual), 327. Buxton V. .(ones, 249. Byroui V. Th(.-m|)son, 3.50. Byrne v. O'Callaghan, 187. C. Caldwell v. Merchants' Bank, 290. Callisher v. Bischotfaheim, 167. Callow V. Lawrence, 212, 335. Calvert v. Baker, 349. Cameron v. Kyte, 8. Caniidgo v. Allenby, 282, 314. Camj) V. King, 48. Campbell v. French, 90, 229. V. Hall, 7. " V. Maokay, 97. V. MeX;rea, 301. " V. McKinnon, .349, 402. V. Kiendeau, 3,S8. V. Webster, 291. Canivda Far. M. Ins. O). v. Watson, 1H3. " Paper Co. v. (Jazette P. Co., 160. Canadian Bankr.f Com.v. Adamson, 15, V. Green, 2.59. V. (lurley. 16!^. V. Northwood, 342. " •• V. Woodward, 173. Investm't Co. V. Brown, 349. " Sec'ties Co. v. Prentice, 217. Cape Breton, Jic. 11. Card V. Cuddv, 483. Canien v. Finley, 30, 321. " V. Ruiter, 300. Carew v. Duckworth, 279. Carlon v. Ireland, 392. Carlos V. Fancourt. 47, 82. " V. Kenealy, 74. Carpenter v. Farnsworth, 59. V. North N.-vt. B.ank, 14(i. V. Street, 178, .ISl. Cnrr v. London & N. W. Ry. Co., 144. " v. Nat. Bank, 297. Carruthers v. Anlagh, 321. Carslake v. Wyatt, 343. Carter v. Flower, 2.58. " V. White, 114, 2.59, 283, 342. Cartier v. Pelletier, 124. Carvick V. Vickery, 205. , rv « It (« CASES CITED. XVll Cassanova v. Moier, 372. CaMHidy v. Mansfield, 265. Castle V. Baby, 150. Castri(iue v. Kemabo, 240, 256. V. Buttigieg, 303. Caton V. Caton, 3!(. Gaunt V. Tlxtinpson, 250, 279, 281. Cawley v. Fiirnoll, 330. Cayuga Co. Biiuk v. Hunt, 23.5. Cazet V. Kirk, 42. Central Bank, Re, 417. V. (Jarland, 173, 406. Chamlierlain v. Young, 58. Chainberlin v. Ball, 35, 480. Chambers v. Miller, 323. ChamiMon v. Gord(deUine V. Vnllee, 124. Chapleau v. Lemay, 186. Chapman v. Bishoi), 260. V. Cottroll, ;^6, 407. " V. Keane, 262. Chard v. Fox, 266. Chartered M. Bank v. Dickson, 411. Cheek v. Rimer, 229. Chesney v. St. .Tohn, 47. Chetlain v. Republic Life Ins. Co., 168. ■Chieago Ry. E. Co. v. Merchants' Bank, 45, 403. Chichester V. Hill, 191. Chicopee Bank v. Philadelphia Bank, 415. Childsv. Monins, 1.58. €hing V. Jeffrey, 217. Chf)let V. Duplessis, 124. Christian, Re. 39. Citizens' Bank v. New Orleans Bank, 298. City Bank v. Cheney, 1.55. V. Hunter, 2.55. V. Lafleur, 124. " V. Rowan, 6.% 301. City of Froderioton v. Lucas, 166. City of Glasgow Bank v. Murdook, 176. Clark V. Blackstock, 410. " V. Boyd, 198. " V. Ksson, 71. " V, Sigourney, 198. " V. Farmers' Mfg. Co., 423. Clarke v. Ash, 170. " V. Cock, 22. " V. Porcival, 45. " V. aharpe, 272. Clarkson v. Lawson, 188. Clayton v. Gosling, 80. " V. McDonald, 214, 247. Clearihuo v. Morris, 74. Clement v. Cheesenian, 391. Clerk V. Pigot, 224. Clerka v. Martin, 16. ClerouK V. Pigeon, 312. Cleveland v. Exchange Bank, 321. Cliflord V. Parker, 344. b Clipijerton v. Spottigue, 137, 309. Cl(jde V. Bailey, 270. Closson V. Stcarn.s, 38. Cloyes V. Chapman, 312, 371 . Clutton V. Attenborough, 64, 301, 386. Ccjchrane v. Boucher. 406. *' V. Caie, 42. Cfickburn v. .Johnston, S'>0. Codd V. Lewis, 4.S0. Cohen v. Hale, 3()0. Cohn V. Werner, 227. Cole V. Hills, .S50. Collins V. Baril, 186. " V. Bradaliaw, 38. " V. Butler, 229. " V. Martin, 173, 1. Collinson v. Lister. 179. Collis V. Emett, 302. " V. Stack, .S3(). Colonial Bank v. Bt-nnett, 348. " Investment Agency Co. v. Maxwell, 181. Oolson V. Arnot, 28, 181. Colvile V. Flan.agau, 164, 391. Colwell V. Robertson, 25,5. Comer v. Thonii>.«on, 162. Commercial Bank, Re, 297,346,349, 386. V. Allan, 264, 403, 411. " V. Bissett, 247. V. Cuvillier, .320. V. Ecoles, 273. V. Fleming, 38.5. " " V. .fohnston, 106. V. Khind, ;iiK). V. Rokeby, 184 V. Weller, 266. "' " of .South Au-otraii'i, Re, 311, 377. Compagnie de Moulins v. Parkin, 223. Confederation Life v. Howard, 4 'i3, 441. Conflans Quarry Co. v. Parker, 447. Conn V. Merchants' Bank, 314, ?15. Connolly v. Woolwich, 1.5. Connjy v. Mount, 482. Converse v. Brown, .37. Cook V. Fen ton, 308 " V. Fowler, 312. " V. Lister, 214, 298, 337. Cooke V. Colehan, SI. Cooley V. Dominion B. S. 360. Coolidge V. Payson, 101. " V. Ruggles, 81 . " V. Wiggin, 207. Cooiiftr V. Blacklock. 149. '* V. Cooper, 121. " V. Meyer, 299. '" V. Waldergravp, 377. Corcoran v. Montreal Ab. Co., 257. Cordery v. Colville, 279. Coriwration of Grantham v. Couiure, 130. Coriwration of Kingsley Falls v. Ques- nel, 322. XVIU CASES CITED. 1 ! ■■ ! i Corporation of Perth v. McGregor, 46. Roxlon V. E.T. Bank, 443 " Toront*^ Township v. McBride, 417. Cosgrav) v. Boyle, 271, 274. Coxsitt V. Cook, 16t). Cote, Ex parte, 116. " V. Ltmieux, 4.5, 86, 462. , " V. Morrison, 326. Coalcher v. Toppin, 280. Coulter V. L e, 170. County of Ottawa v. M. O. &. W. Ry. Co., 443. Coiipal S-. Co\ipal, 38. Coiiijer's Trustees v. Nat. Bank, 390. Courtauld v. Saunders, 1.57. Cousineivu v. Leoours. 2li5. Coutu V. Rafferty, 201, 308. Cowan V. DiK)little, 3.">6, Coward v. Hughes, 167. Cowie V. Hiilsall, 348. " V. Stirling, 5!l ' ' Cowing V. Altmun, S3. Cowley V. Dunlop, 166. Co.\ V. National Bank, 247, 298. " V. Troy, 2^, 115. Craig V. Samuel, 195. Cramlington v. Evans, 213. Cranley v. Hilary, 292. Crawford v. Cobourg, 443. Crears v. Hunter, lt)7. Creighton v. Allen, 330. " V. Fretz, 410. V. Halifax Banking Co., 138. Crepeau v. Moore, 29 ?^ Crevier v. Sauriole, 331. Cridiford v.Bulmer, 164, 405. Cripps V, Davis, 411. » Crofton V. Crofton, 48, 254. Cronibie v. Overholtzer, 86. Cromwell v. Sac Co., 443. Crook V. .Tadis. 420. Cro!»8 V. Currit', 1H8, 225. " V. Snow, 331. Crosse V. Smith, 249, 267. Crossley v. Ham, 220. Grouse V. Park, 76, 311. Crouch V. Credit Foncier, 197, 423, 441, 445, Iv. Ivii. Crowe V. Clay. 295, 360. Cixjwfoot V. Gurney, 42. Croxon V. Worthen, 255. Cruchley v. Clarance, 57. . - Crutchly V. Mann, 111. ' ' - Cullen ". Bryson, 410. Cunard v. Simnn-Kaye, 414. V. Tozer, 350, 416. • . -i CunliflFe v. Whiteheatl, 212. Cunningham v. Lyster, 176. Ctirrio V. Misa, 160, 161. 343. Currier v. Ottawa Gus Co.. 149. Curtis V. Clark, 169. Gushing v. Dupuy, 23. Cuvillier v. Eraser, 221, 320. Dalbec v. Dugas, 480. . . Dalby V. Humphivy, 312. Dalglish V. Bond, W. Dalton V. Lake, 170. Dana v. Bradley, 250. " V. Sawyer, 246. Dando v. Boden, 312. Dondurand v. Ruulier, 412. Dansereau v ,St. Louis. 187. Danziger v. Ritchie, 123. Darah v. Church, 331. Darling v. Gillit-s, 247. " V. HitciicocL, 33L " V. McBumey, 184. Dasylva v. Dufour, 405. Daun V. Sherwood, 404. Davidson v. Bartlett, 342. " V. Robertson, 361. Davits V. Funston, 307. " V. Herbert, 45. " V. Humphreys, 332. " V. Wilkinson, 42. Dnvis V. Clarke, 97. " V. Dunn, 79, 2-53. " V. Jones, 48, 8.3. " V. McSherry, 33, 48. " V. Muir. 225. Davison, Be, 409. Day V. Longhurst. 201. " V. Nix, 17». " v.Sculthorpe, 207. Leacon V. Stcxlhart, 356. Dean v. Green, 429. Decellea v. Bertrand, 186. ' ., ■, " V. SamoLsette, 35. Dechantal v. Pominville, 76, 312. Decrf)i.\ v. Meyer, 104, 109. Deering v. Harden, 25.5. , . . ■.>.• De Forest v. Irarey, 82. ' .' Dehera v. Harriot, 291. De la Chauuiette v. Bank of England, 373. De la Chevrotiere, V. Guibnet, 295, 414. De la Courtier v. BelLamy, 83. Delaney V. Hall, 264. Delajjorte v. Mailden, 276. De la Vega v. Vianna, 377. . •» Delaware Bank v. Jarvis, 316. " v. Harvey, 410. Demers v. Hogle, 28, 201. " V. Rousseau, 256. Demuth v. Cutler, 224. Dennistoun v. Stewart, 266. Dentfin v. Peters, 118. Derby v. Thrall, 350. Descfiamps v. Leger, 207. Desiardins v. Pauze, 482. De Sola v. Ascher, 402. Desrosiers v. Guerin, 343. V. Monti-eal P. & B. Ry. Co., 444. De Tastet v. Baring, 313. ■i .-.■■4 If . : I CASES CITED. atk: Deuters v. Townsend, 219. Devanney v. Browniee, 342. l>ewey v. R«e(1, 41li. Diokens v. Heal, "iSl. Dickenson v. CU'iiiow, 1<>;{. " V. Dicken*>n, 3.5. Dickinson V. Valpy, Vl^, VM. Dill'm V. Kimnier, 323. Dingwall V. DuMstiT, 338. Dinsmore v. Jhmcan, -103. Dion V. Boulangpr, 380. Dixon V. Bovill. Iv. " V. Nuttall. 47, 93. " V. Paul, 170. Doak, V. Robinson, .50 Dodd V. (iill, 41.5. Dolnian v. Orchard, 148. Dominion Hank v. Beaaick, 57. " V. Wi^rgins, 46, 403, Doniville v. Davies, 307. Don V. Lippman, 371, 373. Dool«y V. Smith, 40. -'' / Dooly V. Ryarson, 81. -. -'. Dora'is V. dhalifoux,220. ' -> v Doran v. Chambers, 11. ■-• . Dorion v. Benoit, 41 1. " V. Dorion, 384. Dorwin v. Thomson, 111, 347. Dou(?all V PoHt, 182. Doutre v. Buiiqnc Jacques Cartier, Itowling V. Eastwood, 1.5,5. Down V. Hailing, 210. Downer v. Read, 50. Downes V. Olinnjh, 3'33. Downie V Francis, 36. Downs V. McNamara, 41. Doylo V. Carroll, 183. Drake v. Rosrerw, 84. , Draper V. Wood, 349. . ' ' , Dra'-tou v. Dale, 418. Driggs V. Wftite, 247. Diichainc v. Muguire, 81. Duchesnay v. Evarts, 101, 463. Dufre.sne v. GuevronK)nt, 180. " V. Jacques Cartier B. S., 257. V. St. Lonis, 383. Duguay V. Senecal, 217, 325. Dumas V. Baxter, Htl. Dumont V. Willirtui-'oii, 04. Duncan v. N. &. S. W. Bank, 298. Dunlop V. Tiiggin.s, 270. Dunn V. Allen, 41. " V. O'Keefe, 178, 200. Dunapaugh v. Molson.s Bank, 101, Dnpuis v. Marsnii, 200. Durand v. Stevenscm, .30. Durkin v. Cranston, 303. Durocher v. Lapalnio, 220, 409, Diithie V. Essery, .3(t0, .307. D\»1ton V. MurHh, 157. Dwight V. fcUlHWorth, 186. 274. £. East V. Smith, 2GC. Eastern T. Bank v. ConitHon, 403, 443. Eastwood V. Kenyon, 1(50. V. Westlev, 304. Edie V. East India Co. 210, 212, Iviii. Edgar V. Magee. 331. Edmliurgh B. G. M. I. Co. v. Sydney, 66. . ■.. Edi<>v. Bnry. .S3, 401. Edmonds v. (loater, 3.30. Eilwards v. T' )mas, ' ^■ Edwards v. Walters, ... j. Eisenlord v. Dillenbiick, 70. Elder v. Kelly, 207. Elford V. Teed, 2.35, 2V6. Elliott V. Beecli, 80. Ellis V. Thompson, 112. Ellison V. Collingridge, 34. Elsam V. Denny, 33.5. Ely V. Clat*-, 410. E-nard v. Marcille, 308. Embrey v. Jeniison, 187. Emerson v. I'rovidenco IL M. Co. 157. Emmeti) v. Tottenham, 224. Engel V. Stourton, 17.5, 348. English Bank and Bank of Brazil, 358. of River I 'late, Ee, 311. Ennia v. Hastings, 405. Enthoven v. Hoylo, .57. Esdaile v. La Nauze, 143, 146, 151. " V. Sowerby, 253. Esson V. McGregor, 170. Estea V. Tower 2.57. Ethier v. Thomas, 149, 480. European Bank, Re, 174. 218. Evans v. Cross, 84. " V. Foster, 240. " v.Kymer, 11.8. " V. Morley, lii3, 225. Everard V. Watson, 205. Ewart V. Weller, 35. • P^win V. Lancaster, 34'». Ewing V. Cameron, .370. Exchange Bank v. Banque du Peuple, 384. " V. Canadian Bank of Com., 325. V. Carle, 101. V. Citv&D. 3. bank^ 32.5. " V. Nonnand, 173. " V. QuelHjc Bank, 70,. 215, 384. Exon V. Russell, 414, 416. 290. F. Fahnestock v. Palmer, 75. Fairchild v. Ferguson, 1.50. V. Ogdensburgh K. R. Co., 65. Fairclough v. Pa via, 300. Fairrnan v. Maybee, 320. Faith V. Richmond, 139. Falk V. Moebs. 157. Fall River Bank v. Willard, 235. Fancourt v. Thome. 400. Fansliawe v. Peet, 104. 108, 336. CASES CITED. i il^ U: Farmers' Bank v. Dom. Coal Co., lOl. I'arnsworth v. Allen, 240. .Farquhar v. Southey, 350. Farrell v. Osliawa Mnfg. Co.. 129, 342. Faulks V. Atkins, 112. Feani v. Lewis, 330. Federal Bank v. Northwood, 137. Fenn v. Harri«on, 314, 316. Fentum v. PoctKik, 341. Ferguson v. Stewart, 217, 320. FergusBon v. Fyffe, 3t)l), 378. Ferrie v. Kjknian, 247. " V. WanleuH H. of I., 228, 321. Fessenmayer v. Adcock, 404. Field, Re, 38. Fielder v. Marshall, 33, 401. Fine Art Society v. Union Bank, 447. First National Bank v. Dubuque, 21)7. " " V. Lovhed, 423. " " V. Leach, 384. \. R.C.15ank,213. Firth V. Brooks, .388. " V. Thrush, 267. Fiset V Fournier, 331. '■ Fisher v. Archibald, .36, 171. " V. .Jewett, 125. " V. Robertf, 398. Fiaken v. Meehan, 309. Fitch V. Jones, 191. " V. Kelly, 249, '3,6, 318. Fletcher v. Noble, 170. Foley V. Hill, 389. Folger V. Chase, 350. Forbes v. Marshall, 33. Ford V. Auger, 111. Forget \. Ostignv, 187. Forster v. Mackreth, 8.5, 381, 385, 422. Forsyth v. Forsyth, 166. " V. Lawrence, 199. Forward v. Thomitson, 38, 253, 402. Foster v. Bowr^s, 197, 31.3. " V. Dawber, 37, 338. Farewell, 176, 22L Fraser, .382. , Geddts, 96. 155. . Jolly, 36, 162. , Mackinnon, 226. " V. Parker, 2.54. Fournier v. IV.ior. JJ.".r.h, 381. France v. Clark, 446. Francis v. Bruce, 339, 413. Franklin v. March, 40.5. Fraaer v. Armstrong, .320. Freakley v. Fox, 337. Free v. Hawkins, 36. Freeman v. Boynton, 231. Frey v. Ives, 180. Fry V. Hill, 234. Fuchs V. Legare, 331. ^ -" Fuller V. Lumbert. 166. " V. Smith, 316. FuUerton v. Bank of U. S., 415. V. Chapman, 46, 257. Fulton V. Lafleur, 223. V. V. V. V. V. Fulton V. McArdle, ,349. Furze v. Sharwood, 263. Fyfe V. Boyce, 308, 4,33. Gale V. Walsh, 264, 286. (Jallery v. Priiidle, 47. Gammon v. Schmoll, 257. Gamsby v. Chapman, 169. Garden v. Bruce, 333. Gardner v. Lucas, 434'. " V. Shaver, 41.5. " V. Walsh, 346, 349. Garland v. Jaoomb, 13(>, 300. Garneau v. Ijariviure, 186. Garnett v. McKewan, 390. Garrard v. Lewis, 76, 114. Gates V. Beecher, 2.50, 264. " V. Crooks, 162 Gathercole v. Smith, 23. Gay V. Lander, 212, 40(). " V. Rainey, 371. Gazzam v. Armstrong, 3.53. Geary v. Physic, 35, 38. Gedfles v. Toronto S. R. Co., 129. Genmiell v. Colton, 329. General Estates Co. , Re, 445. (Jeneral S. Am. Co., Re, 311. George, Re, 339, 413. Gefirgian Bay L. Co. v. Thomspon, 170 Geralopulo v. Wielor, 356. German Nat. Hank v. Studley, 152. Germania Bank v. Distier, 84. Gerow v. Holt, 151. Gervais v. Dube, 186. f ; Giard V. Giard, 326. : : ' " V. Lamoureu.x, .326. > ■ Gibb V. Mather, 246, 349. (iiblxni V. Coggon, 291. Gibbs V. Fremont, 372, 377. Gibson v. Grosvenor, 330. " V. Minet, .57, 65. Gibsone v. Lee, 325. Giddings v. Giddings, 117, 167. Gilbtirt V. Dennis, 295. Giles V. Bourne, 48, 83. Gill V. Cubitt, 420, 421. i-t:ii.,.„;„ i>„ oji «>.»" ''>n V. Marsh, 268, 279. V. Mather, 82. Gillin V. Cutler, 45. Girouard v. Guindon, 226. V. Lachapelle, 124. Girvan v. Price, 261, 266. Girvin v. Burke, 194. Gladstone v. Dew, 348. i Gla8gf)w Bank v. Murdock, 176. GlassciKik V. Balls, 324, 412. Glassford v. McFaul, 169. Glennie v. Tmri, 170. Glyn V. Baker, 442, liv. Goggerley v. Cuthbert, 117. Going V. Barwick, 41. I' 1,1 ag SI •»s» CASES CITED. XXI (ioldie V. Maxwell, 200. Oolding V. Waterhouae, 53. Goli? V, Coekburn, 37. GoiDPisall, He, 174, 420. (Jompfi'tz V. Bartlett, 316. , (Jocxl V. Martin, 2*20. " V. Walker, 201. Gmxlall V. DoUey, 279. " V. Exchanffo Hank, 3i-'2, 335. V. Folhill, 270, 3j8. Gooflerhatn v. Hutchison, 163, 182. (Jcxxlinan v. llarvfy, 179, 220, 203, 420. Goodwin v. Davenport, 71). " V. Rf)barts, IB, 438, 415, xliv. GofKlwyn v. Cheveley, 112. Gordon v. Mulcher, 2'.>7. Gore V. Gibson, 125. Gore Bank v. Craig, 258. V. CrtK.ks, ll'J. V. Eaton, 320. V. MoWhirter, 320. V. Meredith, 422. Gorgier v. Mieville, 442, IvL Gonng V. Edmonds, 342. -. . . - Goss V. Nelson, 81. - , '-' : " V. Nugent, :'>7 ' Gould V. Coombs, 404. Gotipy V. Harden, !I4. Grafton B.ink v. Moore, 62. (.irahaui, Jie, l.'V. V. (irahani, 35, 165. Granite Bank v. Ayers, 249. Grant v. Da C^o.sta, 49. " V. Heather, 414. " V. People's Loan & D. Co., 312. " V. Vaughan, Iviii. ** V. Winstanley, 217, 258. " V. Wilson, 05. " V. Young, 75. Grantham v. Couture, 130. ' , V. Powell, 329. ;; , (Jravelle v. Beaudoin, 331, Graves v. American Bank, 324. " V. Key, 218, 323. Gray v. Milner, .50. " V. Kayier, 1.57. " V. Whitman, M, 1G5. • ' " V. Word.'ii, 42, 105. Greatorex v. Score, 51, 75. Green v. Humphreys, 333. Greene v. Tobiu, 18!>. Greenfield Bank v. Crafts, 143. Greening, Ex parte, 201. Greenough v. McClelland, .S42. Greenshields V. Plaaiondon, 180. Greenway \'. Hindley. 291. CJreenwood v. Perry, 103. ullier v. Hartsinok, 47. Hawkes v. Snltfr, 27t). HawkinK v. Cudy, 204. " V. Troui), l!l2. V. Wanl, V.K>. Hawley v. Bnverlny, 320. Hay V. Burke, 274. " V. Powrie, 342. Hayden v. Johiim)!!, 330. HaveH V. Davis, 3(i. Hay.s V. David, H», .323. Healey v. Ddlsoii, :{42. Heath Held v. Van Allan, 148. .' Heaviside v. Munn, 7<). Heilbut V. Xevill, 146, 204. Heliiier v. Krcilick, 81. Hemint^nway v. Stone, 410. Hempsted v. Drumniond, l!tl). Henault v. Tlinnia-". I(i4. Henderson v. Bank of Hamilton, 389. •.. (Jarveth. 1.3V. " v. Cotter, 170. Henry v. Heeb, 143. " v..lnneK, DO, 244. " V. Little, 1S.5. Herald v. '."onnah, OS Herrick v. Wolverton, 412. Herring v. Woodlinll, 28. Hervey v. .Jacque;*, 331. " V. Pridli.ani, ,'431. Ileseltine v. Sigpers, 442. Hewi'it v. K.-iye, 390. " V. Tlionipson. 277. Hoy\V(x)d v. l^ickering, 230, 251, 3bS. HickH v. Brown, ;>71. Hiphinore v. Priniros-e, 4!). Hill V. Coole- M'i. " V. Half I " V. Hf-M " V. L. " V, Mc " V. Ro\ " V. Wiiao Hillis V. Tenii. . 1(53. Hills v. I'arker, i74. Hillsburgh v. Mayer, 331. Hindhanfrh v. Blakcy, W. Hinds, Rr, 3!(. Hine v. A lie! v. 240. Hirchfield, v. Smith, 75, 211, 374. Hirschnian v. Bndd, 348. Hitchcock V. Edward.s, 178, 381. V. Humfrey. 259. Hoare v. C'aztnovo, 'iiM. " V. Niblett, 409. Hobbuv. Hart, 480. Hoffman v. Bank of Milwaukee, 20!). Hoffarth v. Latham, 114. " V. Wherley, ir)2. Hogg V. Skeen, 140, 101. " V. Marsh. W. Holbrow V. VVilkins, 282. Hdldsworth v. Hunter, M, 362. Holliday v. Atkinson, IGO. " V. .Jack.son, 340. Holman v. .lohncion, 307. Holmes V. Durkee, 307. " V. .Jaqiies, i)'.). " v. Kerri.son, 220, 332. Ho(k1 v. Stewart, 200. H(X>k v. I'ratt, 213. Ho, .^.80. Hopley v. Dufresne, 25.5. Home V. Rouquette, 302, 372, 374. HoHstatter v. Wdson, 403. Houghton v. Francis, 350. Houhlitcli V. Cautj , 200. Honliston V. Parsons, 80. Housepo V. Cowne, 2(i4. Hovey V. Cassels, 137. " V. Nolin, 221. Howard V. Duncan, 143. " V. (iodard, 28, 223, 201. " V. Sabouiin,274, 374. Howes V. Bowes, 41(). Howland v. .lennings, 70,311. Hoyt V. Lynch, 34. Hubbard v. .Jackson, 335. Huher v. Steiuer, 370. HulM'rt V. Moteaii, 'S)<. , Hubley V. Morasli, !()(!. Hudon V. Ch.ini{)Hgiie, 481. " V. (iervais, 3c!l. " V. (iirouarki, 22.3. Hudson V. Fawcctt, 311. Hughes V. Can. Per. L. & S. S., 383. " V. Snure, 217. Hnut V. Lee, 100. Hunter V. .Teffrev, 00. ' ' " V. Wilson, 171. Huntley v. Sandeivon, 332. Husband v. Eplinp, 82. Hussey V. Winslow, 405. Hutcliins V. Cohen, 84, 173. ', Hyde V, ■Johnson, SO. lanson v. Paxton, 309. Ilitirvi'i'e V. Banque du Peuple, 130. Tlsley V. .Tones, 101. Imeson, Ex parte, 42. Imi)erial ISank v. Bromish, 45, 403. " V. Brydou, 3(5. w^i-^'^iaHLMsaaHamfMMtwnint^ ■P«i!" CASES CITED. XXiJl Imperial Land Co., Br, 445. " L(>an Co. v. .Stone, 125. Ingham v. Primrose, 180, 344. IngliH V. AlKni, 35. Ingrah.ini v. (Jiblw, 3(W. Ireliiiul V. (iuesH, 1(>2. Irvine v. Lowry, 43, 45. Irwin V. Hrov/n, 24. Ihohch v. (Jrothe, 1544. Itinlin V. RowiandH, 21-», Ives Estate, He, ;i2-'. JackKon v. HudHon, ;i7, 308. JaooV) V. Kirk, 30. Jacolw V. Benson, 57. Jame», lU; 123. " V. Oatherwood, 3G7. Janiinev. Rowley, 15(} • Jefferies v. Au.-tin, 118. . Jelfery v. Walton, 35. Jenkins v. Bossom, 37. " V McKenzie, 338. " V. Tongue, 224. Jenks V. Doran, 118. JenningH v. Roberts', 2()2, 200. .lenvs V. Fav/ler, 2'.il». JeiJlison V. Kiera, 8. Johnson v. Guotlrion, fio5. V. Col'.inps, 101. " V. Martin, l'.)5. " V. Roliurtif. 172. " V. Way, 22H, 421. " V. Windl(;, 140. Johnston v. .Soott, 124. Jones, Ex parte, 12.5. " V. Ashoroft, 13,3, 3(H). ■' V. Bank of Montreal, 389. " V. Broadhiifst, 204, 224, 2!)8. " V. Dickinnon, 124. " V. E. T. Alutual Fire Ins. Co., 130, 150. " V. Fales, 410. " V. Gordon, 17'J, 419. " V. (ioudie, 22, 99, 21)9. " V. Hart, 38. " V. Jaokaon, 98. '' V. Jones, 107. V. LeiiieHurier, 321. " V. Ryde, 310. " V. Sinip.'ion, 4*?. " V. Whittaker, 344. " V. Whitty, 09, 70. " V. WilMon, 259. Jordan v. Coates, 295. Joseph V. Delisle, 290. " V. Button, 149. " V. Turcottu, 41. " Suche & Co., Re, 434. JoHselyn v. Laoier, 40. Jury V. Barker, 37, 403. Kearney v. Gervai^, 124. " V. Kinch, 80. " V. West Granada Co., 361, Keating v. Moises, 1.5. Keeuo V. Beard, 29«J. " V. Kec-ne, 312. Kellogg V. Hyatt, 170. j Kelly V. O'Connell, 4«1. Kendall v. Hamilton, 409. Kennedy v. Adaui.s, 42. " V. E.xchanKe Bank, 403. " V. GtHldes, 101. " V. Thonia.'^, 250. Kenney v. Price, 220. Kerr v. Parsons, 1.58, 417, " V. rftraat, 210. Kershaw v. Cox, 09, 3.")0. Ketchuin v. Powell, 325, Keys V. Pollok, 32y. Kilihle, Kx parte, 125. Kilby v. Rllia«is, 390. Kimball v. Huntington, 405. Kiaibray v. Draper, 434. King V. Bickley, 205. '• V. Glasgford, 331. " V. Hoare, 409. Tbiv. McLaughlin, 12, 13. " V. Sniith, 139. " V. Ziu.ineniian, 301. Kingsey Fallc v. (lueHnel, 322. Kingsford v. Oxenden, 107. Kingsley v. State Bank, 1,52. Kingston, Ex parte, 174. Marine R. Co. v. Gunn, 1C9. Kinnard v. TewsUy, 347, 349. Kinnear ■'. Ferguson, 323. " V. Go. Law V. Parneli, 210. 224. Ljiwrenc'P v. VVill-cxjkn, 312. LawHcn V. Laidhiw, 123. La^^r.')n v. MiUkIkb, 349. Lafanis ". C't)wie, 337. Leach v. Buchanan, 14t». Leadbitter v. Farrow, IRW. I^IhjI v. Tiickur, .'•)2, 132. 373,377. Leblanc v. Rollin, 304. Leclaire v. CasRrnin, 18G. Leciero v. Ouiniet, 124. Ledou.\ V. Mile Enrl, 130. Lee V. Alxly, 372. " V. Bank ]}. N. A., 446. " V, McDonald, 137. " V. Zagury, 222. Leeds 3ank v. Walkur, 21, 347. Leet V. Ingran), '-'23. Lefebvre v. Berthiaunie, 186. Leftley v. Mills, 215. 2.57. r^egal Tender Cat^e.-i, 40. Legge V. Thorne, 2'.)1. Lcitli V. O'Neill, 274. Leith lnking Co. v. Walker, 411. Le .leiine v. Sparrow, 343. Lemay v. Boissinot, 223. Lemieux v, Bouransa, 1(!4. Ij»'nox V. (./'ook, 24<). Leonani v. Ma.sun. 34. Lepage v. Huniel, 326. Leroux v. Brown, 378. Ijeslie V, Emmons, 3 lit. ■' V. Hastings, 100, Le«s.~»rd V. (.Jtmest,, 414. Le8ter v. Garland, W>. " V. Giv.'n, 2U7. Lt^tellier v. SoIkk)! Comrs.,'131, Leveille v. r>nigle, 207. Levinson v. Young, 147. Lewinsohn v, Kent, .57, 66. LewiH V. Jelferv, 310. " V. Tarktr, 220. " V. Reilly, 130. Lickbarrow v. Mason, lii. Light V, Kingsbury, 7!K Lightfoot V. Tenniir.t, 3C7. Lindley v. Lacv, 37. Lindo V. Lord Rodney, 13. Lindsay v, /wicker, Sti. LinduM V. Brotlwell, 136. Lipsc bv. Mutton, 406. Littl. . Slackford, 34. Liverp(X)l B. Bank v. Walker, 150. Llewellyn v. Winokworth, 151. Lloyd V. Howard, 184, 217. " V. Sigournev, 213, 214. Lock V. lieid, lti2," 307. Lockerby v. OUara, 160. Lockwood V. Crawford, 295. Logan V. Cassell, 224.': London and Brazilian Bank v. Maguirs, ."-ri, 377. London and Co. Bank v. Grfjome, 219, 421. " " V. London and R. P. Bank, 167, 446. R. P. Bank v. Bank of LiveriKKil, 147, 324. S. W. Bank v. Went- worth, 300. S. Co.'k I. A. and D. Co. V, Clamp, 310. '* Universal Bank v. Clan- carty, 312. B. &, S. 8. Bank, Rf, 323. " Chartered Bank v. White. 172. " Joint Stock Bank v. Sim- mons, 445. Long V. M(Kn-e, 348. Loku V. Hall, 422. " V. Hunter, .384. •' Ward V. Oxford Ry. Co , 2fi2. Losee v. Dunkins, 412. Lo>'f;ll V. Meikle, 257, 287. Low V. Copestakp, 224. " V. Owen, 265. Lowe V. J'eskett, 337. Lowenthal, Ke parte, 264, 291. Lowery v. Scott, 273. Ludl(pw V. Van Rensselner. 367. ■ Lund«y v. Palmer, 22, S*9. Lyman v. Chamard, 328. " V. ]>v(m, 177. Lyon V. Marshall, 58. Lyons V. Doiikin, 166. " V. East India Co., 7. Ljsught V. Bryant, 115, 202. M. Mabie v. Johnson, 421. MacArtluir v. MacDowall, 218, 356. Macaulav v. Me.Farlane, 255, 2!>3, .3,35. Macdojiald v. Whitfield, 303, 'M)V, 335, 341. Macdongall, lif, 312. V. Word.iworth, 276. Macfarlane v. I)owey, I.H. V. St. C«'saire, 403, 443. MacCregor v. Rhtsli s, 304. Madae V. Sutherland, 157. Maclellim v. Davidson, '. J7, .301. Miuileisl V, Snw, 47. Maenider v. Voung, 218. 4 ^^ '■^^jr'WtW CASES CUED. XXV 5'' I'' Madrfon v. Cox, 97, 156. Miiillard v. I'iirp, 37. Mair V. McT-Han, I'.K). Mr-ihiot V. Tessier, 409. Mallette V. Sntcliffi', 71. Maloiu'V V. Fit/.i>iitriok, «2. Maltby V. Murrells, 2',t2. Mander v. Evans, 3()!(. " V. K^yal Can. Bank, 446. Mann v. Mours, 272. Manter v. Churchill, 1(58. March v. Ward. 410. Marchr.iid v. Wilkes, Ifi'J. MiircusKen v. HIrkheuk Bank, 347. Maro V. Charles, m, 401. Marjfrett, E.fjiartr, 12.'). Marine Nat. Bank v. Nat. City Bank, 21«t. Marion Co. v. Clarke, 180. Maritime Bank v. Union Bank, 101, .384. Marler v. Molsons Bank, 2!>7, 382, 389. " V. Stewart, -.m. Marrett v. E()uitabln Ins. Co., 45. Marstjilli'N Exti'iisiun Ry. Co., Re, 368. Marsh v. Enltoti Co., 444. Marfliall V. Smith, 330. Martin \. Bomc, xlvii, " V. Ciittuutrv, 4r). " V. Citvof flull, 130. " V. (iuvot. 124. " V. Macfariune, 186. " V. Murtin, 483. " V. I'.mlin, 180, 322. Marzetti v. Williani.s, 38'.). Mason V. Dousay, 3(i(l. Massie v. Belford, 81. Mass\ie V. Crebassj*, 343. Mast<'n V. Milker, 348. MastiTs V. Bart^tt^), 40(5, 416. V. IblH-rmin, 18!l. V. .Stul>bs, 2r)(;. Mathifssfin v. London and County Bank, 3<)8. Mathii'ti V, MoiisMf'au, 22(5. Matthews v. Williiiins, 3i'8. Matthewsim \ . Brouso, ,'<2(). " V. (Jjrumn, 170. Maulson v. Arrol, ]!K». Maxwell v. Brain, 2(>(>. " V, Dearo, .'523. May V. Ch«)iii'an, M*\l Mayer V. .Fiidia, 211. 213, McCall V. Taylor, 38. McCamill V. Kfurdon, 106. McCailhy v. Barthe, 481. V ]'hel|js, 255, ? .Colhnn V. Churi.'h, 182 McConiu'll V. Wilkins, i37. McCorkill V. Barrabe, ti8, 71. McCfirtnick v. Trottur, 4.'!. A'cCranier v. Thmnsou, 181. MeCubbin v, .Stejihen, 404. McCunnilfo v. .\llfn, %'>o. McDaniel V. McMillan, 166. McI)onald v. Mc.Arthur, 2-57. V. Senez, 18(5. V. Small, 224. McDonell V. llolgatf!, 41, 402. McDonnell v. I^owry. 255. McEowen v. 8cott, 242. McFatridg-e v. NVilliston, 279. MciJhie V. (Gilbert, l.")l. Mc(Jillivray v. Koefer, 1(52. McGrwvy v. Mcdireevy, 3.52. McGreevy v. Russell, 1(10. McGregor v. Bishop, 171, 321. " V. Daly, 68. " V. Harris, 170. McGrnder v. Bank of Washinflrton, 24" Mc(iuire v. Bo.swovth, 30ri. McHugh V. Si:haylkill Co., 149. Mclnnesv. Milton, 111, 22.'). Mcintosh V. McLt'od, 170. Mclver V. Donnison, 132. " V. McFarlane. 21%, 293. McKay v O'Nyil, 322. McKenzie v. British Linen Co., 143. " V. Eraser, 2!i9. " V. Frizzell, 322. " V. N.irthron, 2(58. McKinnon v Kerouack, 223. McLean v. CJydesf'ale Banking Co., 21, 32. 3i)0. V. (Jarnier, (,i4, 207, 264. " V. RotiS, 34. V. Shields, 108. McLellan v. Mi;Lellan, 50, 243, 244, 255. McLeodv. Carman, 138, 188, 227, 304, 34.S. y. McKay, 320. McMcekin \'. Eastoii, 159. McMurray v. Talbot, 134, 307. ::' • McMuvvich V. Powers, 2i)6. ' McNab V. Watrstatf, .335. McPheo V. Mol'hee, 134, 307. ' . Mct^neen V. Mclntyrn, 348. '* V. McC^ueen, 3(5, 74. 1 McC^uiii V. Horell, 218. , McBobhie v. Torrame. 42, 249. McRobwts V. Scott. 209. Mc Vicar V. Mclvanghlin. 312. Mead V. Voting, 14(). Meakins v. Martin, 337. Mechanics' Bank v. Bank of Columbia, 423. " V. Bramlry, 130. " V. Merchants' Bank, :.-' .-.: 244. " V. Seale,' 481. Megginson v. }!ariier, 59. Meikle v. Dorion, 343. Melledge v. Boston Iron Co., 136. Mellersi; v. Ripiieit, 2»i(>. Mellish V. Hawdon, 233. MeBille V. 15eddell. 15. Meniliynltal v. Machiidi), 109. Merchants' Bank v. Bell, 123, 2(58. XXVI OASES CITED. iM; li^ MerchttutH Hunk v. IJusiwick, 42U. " V. C.'mmiiix'taiii, 2iM), i!'"), 30H. " V. Dnnlop, 4a, J03. " V. . " V. Mum«li>y, i.'2f). " V. Miilv.'v, 1(J. V. H'-l.iiiHoii, l(i3. V. Nplo.T, 3!). • " V. Spinui'V, 'J!)(\ " V. HMifc Hunk. .•(8;. " V. .Stirling, Hi, ;V|!(, 371, 407. V. If. K. Club, 304, 4'J3. V. Wlii,l(i,.|,, 314. V. Wliitfiiild, 34l>, 411?. MiToior V. Bouxqiu't, 321. Mi'ivditii V. Cnlv*'!-, 348. Aleiritt V. Colt', 4"i3. V. 1 A' noli, 7, 308, 409. " V. Maxwdll, 4'J3. V. T.Mhl, 411. Mt*rHuian v. VVcrpffH, :U7, 3 Jit, Metropolitan H.uik v. Sniir.<, '.J17. Mm'\vi;i V, tfatt's, liiil. McHHitir V. i)!ivi(,'noM, ^no. Mt'tcalft' V. I{ii;liiu'({s(in, 2ii4. MjytT V. Dfoviiix, (i7, 212. _" V. HiitcliinHc.n, lot). Mier» V. lirown, 2.">ll. Milfoiil V. Miiyic 240. Milliii- V. Plnninicr, 181. MllliT V. Kid.lli.. 74. " V, l?l(.(ls(.(i, 204. " V. l);iu.l<'lin. 31(5. " V. D-hIj,'!', 414. " V. J'"ninini', I7(>. " V. Kiiuf. 1>I7, 1. " V. TKoni|iyi)n, 54. n Millikmi V. (,'liii|iniiin, 315. Mill )y V. Fiinni'i, 4.M. Mills V. IliU'licr, IKS ' V. Hank of U. S. 2G5. " V, (lihsoti, 27! " V. I'liilliin. 2'i,J. Mi 111 V. I'l-PHt., lOS. MilneH V. l)iivvsnii, 171, Mint'Hult V oif, 2!I2, 411. Min<>t V. (iili.son, ,*»!). Miri'hoiKSH V KniU'll, *37. MiMft V. ('uivip, 172. .Miser V. T.\.vin(jr»>r, 2(i>t. MitclicU V. HnrinK', 2S«, 3.53. " V. Uriuvnc, 2(M. V. llolLml. 314, 331. V. .Smith, 203. Mobley v. CUrk, 55. ^^offar, V. KiIwriiIm, 74. Mulfutt V. Honiil.l,.320. " V. iSoyitioiir, 2".)0. MonHon V. Drakr'y, 410. Montiiguc V. IVrkin.x, H4, 333. Mont,g>init:>rv V. HinK'licr, 312. V. McNair, 332. Moodifi V. Howutt, 58. Moore V. Bu.slinU, 2'.t7. " V. (JroHvciior, 3(>, 37. " V. .lat^kson, 123, xii. " V. Manning. 71. " V. HuUivan, 35. More V. .Manning', Iviii, Monilumne v, I'linlaiid, 175. Morey v. Wakelicid, 412. Mor(f!in V, |);ivis(in, 245. " V. Larivicre, 2!)7. " V. llowluiidri, .H;<:t. " V. I'nitcd States, 411. Morgans V. lleskett, 114. Morley V. (Mdverwell, S23. M()rrii\ v. liegaiilt, l!i8. .MviriiH V. Walker. 221. 307. Morrison v. Hailey, 381. " V. Huehanan, 224. " V. .S|)urr, 151. Mor^ou V. Cr.i'ii'liell, ':i4, ;;<«). " V. Nayli.v. -H. Moses V. L.'i'Vienoe Co. Rank, 40ti. Mot/. V. Holliwell, ](!!. Moult! V. I'.riiwii, 111,'"), .Mount V. Dunn. 2',t3, 414. Mousseau v. Kivehuni, 482. •Mowbray, A'.r^Kw^', 202. .^luibuan v. UKwuino, 233. Muir V. Caineron, 17'>. " V. Cr.u,foril,342. MuUiek V. Uadakissin, 233, 231, 2!»4. ■ .Munger V. Sliann-.in, 47. Munro V. Cox, 57, 214. Muiu'(K' V. Hordier. 172. Mur.Hter and Iwcinster IJftuk v. Franctt. 340. Murdoek v. Pitto, 330. Ml ray v. Kant India CJo., 00, 100. " V. (iaHt(jnj'!iay, 322. " V. King. 2M2. " V. Imrdn. r, 28 421. V. Miller, 320. Miirrow v. Htuiirt, 21.S. MuHfon V. Lake. 205. ■- , . -, Mutford V, Walcot. 352. MuttyK.ll .Sral v, Dent, 117. Mutu.il iSafetv Inn. Co. \, I'orter, .'>7, 111. Myers V. Clornell, '.Mi!. " V. WilkiuH, 71. -^< '* CASES CITED. xxvn N. Nailwnne v. Tetroau, 3<)S. NumIi V, (•il)l)fn()le V. 'I'm-loii, |-_'H, Xt."). New Havt!t> Oo. Hank v. Mi'.cliell, 274 Nowhurii V. Lawri'iu'f, 41. N»'wiiiaii V. KroKi, Ki'i. Nowton, Kx }i(trtc, 174. V. Allon, 71. Niaffiir.a Dist. J5aiil< v. Fairman, 108. NicliollH V. iJiaiiiDiiil, 'J7. Nichol. V. Ryan, ;W;«. NicholHon V. (ioulhit, 'ITt'i. " V. llovill, ;i4'.). Niffhtiiigalf v. (Jity l(aiil<,32l. " V. Wiiliiiigton, 132. Noftd V. Hoiioliai(l,32l. " V. (!liatfnuvt)rt, 3f>. " V. JiainpMDii, ,T2I. Norniand v. lira.ii.sdlt-il, 180. Norris v. t;Mn(l..ii, l.V>, ;i()l, 3()8. " V. Siiloiiion, ;j4. Nortlititld V. Lawi'Hiiix-, 3(!. North IviviT Hunk v. Ayiiiar, 152. North Wntl N. IJaiik v. JarvJH, 41. Norton V. lOHani, 415. Nuuvdiln lianquo de I'Union v. Aytcjii, 372. Novi'lli \ . RoMsi, 315. Nowliu V. iCoaoh, 253. O. Oakley v. IJoulton 101. " V. rash.llcr, 340. O' Brien \'. Fiuht, 171. " V. ScinplH, 343. V. .Stev.iih!)ti, 247, 2!)3, 414, 410. Odttmiian V. IlLicklook. 40. ()'(!oiiii. Pheliw V. Williamson, SiiO. Phillimore v. Barry, 38. Philips V. A.stlin«,"253, 282. Phillip. V. Iin Thurn, 0(5, 3,>4. " V. Hanborn, 37. Philpot V. Briant, 298. 342, Philjxjtt V. Bryant, 247. Phipps '■. Tanner, 76. Bichette v. Lajoie, 188. Pickard v. Sears, 114. Picker v. London and Co. Bank, 442. Pier V. Ueinrichsohoffen, 252. Pierce v. Htruther.s 228. Piers V. Hall, ^^^r,, 307. Pi«»;-8on V. Hutchinson, 360. Pigeon V. Dagenuis, 331. " V. Moore, 414. Pillans V. Van Nliorop, 99. Pillow V. Hardeman, 26S. Pinard v. KlocI;innn, 301. Planche v. Fletcher, 367. Piatt V. Smith, 416. Pliinley V. Westley, 71. I'oirier v. Morris, 224. Polak V. Everett, 340. Polhill V. Waiter, 97. Pollard V. Herries, 49. Pontiac v. Hosk, 443. PcHil V. Andertion, 9.5. P. Potters V. Taylor. 108, 257. Pott V. CKgR, lii. " V. Reed, 21.3. Poulton V. I)oIinajfe, 163. Powell V. P.-ek, 312. Powers V. Lyneli, 371. Prong*, K.r fiortr., 267, 271. Pratt V. Drake, 145. " V. Miu'Dougill, .308. Prentiss v. .Mavage, 371. Preseott V. Klynn, 151, 4W. Preston v. Diinh.im, 81. " V. .lohnstnn, 240. Prestwiuk v Maishali, 1.3.'). Prevost V. I'ickel, 186. Price V. Mitchell, 414, 416. Price V. Taylor, 81. Prideaux v. Collier, 244. V. Criddlo. 236, 2.')0, 388, 390. Prince v. Oriental Bank, 270, 345, 390. " V. Stevenfwn, 483. Protection Ins. Co. v. Bill, 81. Puffer V. Smith, 226. Pullen V. Sanford, 295. ' ■■. - Q. ^ Quebec Bank v. Bryant, 1.50 227. V. Miller, 97, 138, V. Molson, 325. V. Ogilvy, 2iJ3, 348. Quintal v. Aubin, 325. R. I Rabey v. Giibert, fSO. Racine v. Cliauipiinx, 186. Railroad Co. v. iTohu^on, 40. Ralli <■. Dennistoun, 337, 341, 376. R.-'.inohurn , , Lnehmiechnnd, 414. Ramsav v. M.inn, 483. Ranisdell v. Te'.fer, 306. Ramiii! V. Crowe, 29.'., 300. Randolph v. Parish, .V). V. Peck, 168. V. Bank v. Hornblower, 386. Ranken v. Alfaro, 298. i RaiHir V. Bii'kbeck, 345. Raphael v. Bank of England, 171, 179, 420. Rfltchford V. Griffith, 29g. Rawson v. Davidson, 423. Ray V. Isbister, .335. Redrnayne v. Bin-ton, 180. Rednoth y. Kolfage, 3a3, 388. Reed v. Kavanagh, 240. " V. Mercer, 279. " V. Retid, 36, 58. " V. Roark, .38. . . Reg. V. Bartlett, .53. V. Bowerman, 38. " V. Chawton. 91. " V. Cornmck, 402, " V. Craig, 348. " V. Har|«'r, 38. " v.^Hazeltor., 381. ■ ^ " V. ifinnear, 231. " V. MiirMn, 142, " V. Nan e-(£uis-a-ka, 17. ■. " V. Rogers, 141. ' >> " V. Tnke, 34. " V. Wilso.., 38.5. . ■•--" Reid V. Fiirnival, 172. " V. Humphrev, 346, 349. " V. McChesney, 1.56, " V. Rigbv, 152. Reinhardt v. JJhirhy, 180. Rennie v. .larvis, 171, 216. m CASES CITED.' XXi.K E«w V. Pettet, 158. Rex V. T^x, 50. " V. Elliott, 76. " V. Ellor, 3t. " V. .liickson, 381. " V. McLaiiKhl'n, 13. " V. Randall, I'T. Reynolds v. Doyle, ;i32. V. Chettle, 247. " V. Vaugliaii, 17. V. Wheeler, im. Rhodes. V. Morw, 35!>. " V. Heynnmr, 412. Rickfd V. Bauqiie Nationale, 124, 22G. Rice V. Bowkor, 2.55. 2!)3, 414. " V. SteaniN, 94. Richard v, Boisv^rt, J?21. Richardson v Dani-la, 230, 244. V. Kllett, 83. " V. RichardsoM, 67. Ricketts V. Bennett, 136. Rickfonl V. RiilKe, 25!). Riddell v. Goolcl, 325. Rido\it V, Manninpf, 8. Riid V. MoEwen, 164. Riffgs V. Lindaay, 101. River Stoanior Co., Be, 333. Rivet V. li(X)nard, 123. RobftrtH V. Tucker, 62, 146, 210, 247, 300, 323, 389. '« Ex parte, 311,377, 438. Roberts, A'a; pa r>, 314. V. Austin, 21»7. V. Bt-thell, 83, 84. " V. Fisher, 315. V. Peake, 82. Robertson v. Bendekin, 373. V. Caldwell, 370. . " V. Furnes , 183. " V. Glass, 96, 155. V. Kelly, 122. " V. Kensington, 208. " V. Lonsdale, 134, 306, 307. Robey v. Oilier, 298. Robins V. Oibsim, 264. Robinson v, Ames, 240. V. Blan9. " V. Calcc.tt, 19(1. V. Criv>i)s, 222. " V. Duff, 275. " V. Kanavi-ha Bank, 1!16. " V. Stone, 199. V. Taylor, 248, 205. V. Yairovv, .SOO. Robitaille v. Denet^haud, 331. Rolwon V. Ci rlewis, 2fi3. V. Oliver, 31.5. Roche V. Campbell, 4ir>. " V. (ioanoko Seminary, 1()8. Rfer8on v. Ladbroke, 390. RoUs V. Pearoe, .391. ; Romford Canal Co. , Re, 445. Iloscow V. Hardy, 260. Rose-Belford P. Co. v. Bank of Mon- treal, 383. Rose V. Sims, 203. Koslier V. Kieran, 261. Ross V. Codd, 134, 136. " V. Dixie, 240, 304. " V. McKindsay, 430. " V. Ross, 586. " V. Tyson, 173, 223. " V. Wilson, 279. " V. Winans, 320. Rossin V. MoCarty, 111. Rothschild V. Corney, 219. V. Currie, 252, 277, 374. Itouquette v. Overraann, 252, 298, ,302, .375, 377. Rouse V. Br.adford Banking Co., 341. Rousseau v. Wilson, 483. Rowe V. Tipper, 261, 270. " V. Youne, 10.5. 108, 242, 292,298. Rowlands v. Sjiringett, 266. Royal Bank v. Tottenham, 85, 167, 3S6. " Canadian Bank v. Minaker, 3('. ' V. Wilson, 137. 139. Ruff V. Webb, 34. Russel v. Fisher, 327. Russell V. Crofton, 290. V. McDonald, 300, v. Phillips, 100, 109. " V. Wells, 81. Rutherford, Re, 3.3:1. Ryan v. Bank of Montreal, 146, 299, 300. " V. Hunt, .325. " v. Malo, 267, 480. " V. McConnell, 173. " V. McKerr.tU, 164, 342. " V. Teruiinal City Co., 151. Rymes v. Clarkson, SH. t S. Saokett v. Sper...... 406. Sager v. Tupper, 422. Salmon v. Webb, 37. Snmsrm v. Yager, 349. Samuel v. Fairgrievo, VXi. .SiMjderson v. ( tollman, 299. Sundford v. Ross, 110. Sanford Co. v. McLaren, 184. Sands v. Clarke, 253, 415. " \. Keator, 332. Saul \..lones. 246, 254. Saunderson v. .Tack8(m, 39 " '.Judge, 416. $1 XXX CASES CITED. ^»,« .»rc m k 11! ^i- H Sunderson v. Piper, 70. Savago \'. Aldieii, 2(U-'. 332. Sawyer v. 'i'lioina-", 3,>.H. " V. Wiswell, 11(9. .Saxton V. Stevenson 42, 75. Scales V. Jacob, 33C. Scantlin v. Ht. I'i.nv, 124. Scard v. Jackson, 113. Scpally V. >[c(^ullmii. 44j. Sclmeiiler v. Norris, .Si). Schofield, I'.V purti, \72. 174. " V. liayard, 3.")7. Sciiiilfield V. liondeaboniugh, 347. Scholey v. Ramsbottoni, 180, 344. Schroeder v. {.Central Hank, 2Itt!, 'Mi. Scott V. Bank of New Brunswick, 145. " V. DouRla-s, .SIX!. " V. Quelxrc Bank, 35, 177. " V. TurnhuU, 207. Scudder v. Union National Bank, 3G6. Sf abury v. Hunpi'rford, 307 SearH v. Lantz, 203. Seaverv. Lincoln, 411. Sel).ag V. Abitbol, 212. Seguin V. Bergevin, 331. Seiiter v. Continental Bank, 297. Serrell v. Derbyshire Ry. Co., 219. Seymour v. Wright, 204. Shand v. Du Boisaon, 297. Shank v. Butsch, 38. Shannon v. Hivstings, 270. Stiarp V. Bailey, 281. Shiiw V. Oawford, 320. " V. Railroad Co., 421. " V. Salmon, 279. Shearer v. Conipain, 123. Shed V. Brett, 240. Shettield v. London J. S. Bank, 44.5, 440. Shelby V. .rul. Shiritf V. }Iolcomi),33l. Shisler V. Van Dyke. 143. Shreeves v. Allan, 421. Shute V. Robins, 233. .Shuter V. Paxton, 292. Shuttlewortli v. Stephens, 55. Sibree v. Tripp, 401. Siddall V. (Ji)won, 410. 'S\KgHrs V. Browne, 277. Simmons v. Taylor, .392. " V. London J. S. Bank, 441, 445. Llovd, 323. V. f ravin, 323. ^ V. (iraham, 312. Henderson, 180. ^\ . .Mulligan, 10. V. Rolwon, 2.57. ... V. Waketield. 125. ' '' Sim' Sin Hitr.' SiuoL u Singer v. Elliott, .309. " V. Hnsson, 434. Skillwck V. Porter, 134, 300. ■ , Small V. Riddel, 303. •> Smith V. Abl)otl, 108, 241. " V. Battens, 84. " V. Bellamy, 54, 253. " V. Bibber," I(i8. " V. Hill, 300. " v..T\ulhon. 320. " V. Kenr). " V. McKay, \m. Stott V. l^'airlamb, 1C7 Stoutiniore v. Clark, 300. Straas v. Gilbt'rt, 481 . Stnvker v. Graham, 234. Strathy v. Nicholla, 173, 176. .Straton v. Rastall, 444. Street v. Beckwith. .H.^. " V. Quinton, 1()C, 223. " V. Walnh, 347. Strong V. Foster, 3J<7. .Stuart V. Bowman, 7. Studdy V. Beesty, 278. Stultzman v. Ye.igley, 36. Sturdy v. Henderson, 229. Sturtevant v. Ford, 218. Suehe k Co., .Toseph, «<•, 4.34. Siiffell V. Bank of Enpla \d, 34(5. Sunnnerfii'dt \ . Woi'ts, 225. Supervisors v. Schenck, 443. Suse V. Pompe, 313. Sussex Bank v. Baldwin, 249. Sutlierland v. Ptttter. Sutton V. Toomer, .348. Swftisland v. Davidson, 180, MQ, 349. Swan, Ex parti:, I7r>, 218, a56. " V. N. B. A. Co., 197, 420, 440. Sweeney v. Easter, 213. Swift V. Smith, 420. Swinyard v. Bowes, 259, 282. Sylvain v. Flanagan, 220. Tiiher V. Cannon, .^O. Tarratt v. vVihnot, 278. Ttttam V. Haslar. 192, 419. Taylor v. Croker, 1.32, 300, 418. " V. Curry. 37. " V. Grier, 274, 276. " V. McFnrlane, 35. " V. Newman, 5/>. Tees V. Mc Arthur, 180. Temple v. .Tones, 162. " V. Pullen, 113. Terrv v. Parker, 254. , Thackray v. Blackett, 3.W. Thew V. Adams, 1.34. Thibaudeau v. Burke, 124. Tliicknesse v. Broinilow, 130, .304. Third National Bank v. Ashworth, 2.50. V. Cosby, 40, 41. 42, 75. V. Nat. Bank, 213. Thomas v. Grace, 40.3. " V. McLeod, 106, 218. Thompson v. Cotterell, 205. V. Farr, 170. V. McDonald, 342. V, Siou.\ Falls, 386. " V.Sloan, 43. * V. Universal Salvage Co., 128. Thorn v. Sandford, 265. Tliome V. Scovil, 411. Thornton v. Maynard, 222. Thorold Mfg. Co. v. Imp. Bank, 145. Thorpe v. Coombe, .332. Thurber v. Deseve, .38. Thurgar v. Clarke, 304. " V. Travis, 340. Ticonic Bank v^Smiley, 94. Tidmarsh v. Grover, 348. Tindal v. Brown, 2.33, 262. Timmins v. Gibbins, 31.5. Todd V. Union Bank, 389. Toms V. Wilson, 112. Tondeur, Ex parte, 238. Tootell, Ex parte, 82. Toponce V. ^lartin, 185. Topping V. Buffalo B. & G. Ry. Co., 129. Toronto V. M.-vclaren, 409. Torrance v. Bank B. N. A., 101, 299. Towne V. Wason, 224. Township of Toronto v. McBride, 69. Treatilier v. Hinton, 294. Trecothick v. Edwin, 410. Trenholme v. Coutu, 134, 201, 402. Treuttel v. Barandon, 213. Triggs v. Newnham, 245. Triml)ey v. Vignier, 37i. Trimble v. Miller, 402. True v. Collins, 275. Trneman v. Loder, 1.30. Trust and Loan Co. v. Hamilton, 443. Tunno v. Lague, 277. Turner v. Leech, 262. " V. Samson, 254. " V. Stones, 315. Tur()uand, Ex parte, 438. Twogfxxl, Ex parte, 172. Uniacko v. Dickson, 11. Union Bank v. Bryant, l(i5. V. Bulmer, 138,«184. xxxu CASES CITED. « ^;lii' s4:. Union Bank v. Cole, 297. " V. FarnHWortli, 145. V. Giljeatilt, 255. V. McKilligai), 252. V. Middlebrook, 143. " V. Ontario Bank, 299. " V. WilliH, 230. Union Nat. Bank v. Oceana Co. Bank, 297. United States v. White, .58. Upton V. Ferrers, 73. Usher V. Dauncey, 113. V. Vagliano v. Bank of England, 21, CO, 61, 143, 299, 301, 389. Vallee v. Talbot, 309, 335. Vallieres v. Baxter, 184. Vance v. Lowther, 34(), 348. Vandal v. Domville, 201. Vander Donckt v. Thcllusson, 415. Vandewall v. Tyrrell. 352. Vankoug-hnet v. Mills, 342. Vanleuvtin v. Vandusenifl34, 306. Van Wart v. Woolley, 282, 314. Vaiiwart v. Roberts, 332. Vaughan v. Koss, 2(3. Vavasseur v. Krujip, 24. Venables v. Baring, 445. Venner v. Futvoye, 253. Viale V. Michael, 206. Vidal V. Ford, 36. Ville d'lberville v. Banque du Peuple, 130. Vincent v. Horlock, 135, 211. Voyer v. Richer, 44C.. Vreeland v. Hyde, 411. W. Wackerbftth, /> parte, 351. Waddell v. .Taynes, 183. Wagner v. Kenner, 8.5. Wain V. Bailey, 360. Wainman v. Kynnian, 330. Wainwright v. Webster, 315. Walker v. Atwood, 109. " V. Bank of New York, 108. " V. Johnson, 37 " V. Macdonald, 70. " V. Rfjberts, 80. " V. Stetson, 2.30. V. Sweet, 331. Wallace v. Agrv, 2;«. " V. Branch Bank, 152. " V. Henderson, 405. " V. Souther, 223, 365. Wall bridge v. Beckot, 188. Walmsley v. Child, 359. Walter v. Haynes, 275. " V. Molsons Bank, 138, 226. Wallers v. Mahan, 48. Walton V. Mascall, 259, 282. Wante v. Robinson, 360. Ward V. Kvans, 328. " V. National Bank of N. Z., 343. " V. Vuobec Bank, 70, 180. " V. Royal Canadian Ins. Co., xii. Warner v. .Smion-Kaye, 414. Warren v. Lynch, 423. Warrington v. Pearly, 348. V. Fubor, 282. Warwick v. Nairn, 170. V. Rogers, 326, 345. Wasliington Bank v. Knnn, 174. Waterous Engine Co. v. McLean, 347 Watkins v. Maule, 202. Watson V. Evans, .59. " V. P(,rter, 336. " V. Tarpley, 240. Watters v. Lordly, 255. V. Reiflfenstein, 246. Watts V. Robinson, 320. Wav V. Towle, 381. Webb V. Fairraaner, 91. " V Heme Bay Com'rs, 443, 445. Webster, Ex parte, 342. Wed lake v. Hurley, 213. Wegersloffe v. Keene, 109. Wells V. Giles, 257. " V. Hopkins, 169. " V. McCarthy, 308. " V. Whitehead, 363. Wesleyan Seminary v. Fisher, 168. West V. Brown, 249. " V. Bown, 69, 71,134, 307. " V. Maolnnes, 217. West London Com. Bank v. Kitson, 155, 157. Westacott v. Smalley, 309. Westfall V. Braley, 315. Westfield Bank v. Cornen, 147. Westloh V. Brown, 145. 348. Westminster Bank v. Wheaton, 381. Weston V. Myers, 39. Wethey v. Andrews, 412. Whatley v. Tricker, 338. Wheatley v Williams, 403. Whicker v. Hume, 7. Whishaw v. (Jilniour, 402. Whistler v. Forster, 178. Whitaker, Re, 125, 167. " V. Bank of England, 245. White V. Nat;v nal Bank, 213. " V. Smith, 75. " V. Stoddard, 262, 277. " V. Wells, 138. Whitehead v. Walker, 217, 240, 260 332. Whitehouse v. Bedell, 2.')5. Whitley v. Pinkerton, 257. Whitman ". Parker, 170. Wiflen V. Roberts, 92, 244. wmt r ar i xt w Hkl JI^ _, CASES CITED. Wilcocks V. Tinnin.?, i3}, 3o6. Wilcox V. Wilcox. 8. Wilders V. Stevens, 207, 221, 307 Wi py V. Ltdyard, 407. Wilkes V. Skinner, 186. Wilkins V. .Tadia 9:in 245 Wilk,n«.n V. Johnaon, 211. 345,354. _^ V. Lutwidge, <(9. Will \- ^^nwin, 221, 307. Wi Hans v. Ayers, K, 313. VVi lett V. Court, 207. VV illiams V. Bayley, 185. V. Colonial Bank, 446. ,; V. Gait, 27. V. Gerinaino, 278, 353. ,^ V. Jdmt'tj, 224. ^, V. Xoxon, Go. " "• ^h?*!!^!', 213, 214. Will- 7,- V '"'ams, xlviii. W.Ihs V. Bank of England, 179. ^^ V. Barrett, 57. Will ^f^reen, 250. 2(i8. W, loughby V. Moulton, 38. Wilson V. Aitkin, 106 ,; V. Banque Ville Marie, 384. V. Bartlirop, 13.5. V. Br,.wn, 137, 29? 342. „ ^- Drmerg, 331 V. ra,te8, 402, 423. „ V. /-iolme.s, 21.1 V. McQueen, 213. .> '^- J^«''nfirie,261,273. Wiu u"- Swal'ey. 262. Wiltshire V. Surrey, 444 Wm^iau, Bank v^' Norton, 251, 053, Wirth V. Austin, 254. Wise V. Charlton, 406 Wo ke V. Kuhne, 419. Wolverhampton & 8 R P« r 185. • ^*'' ^a^pa •'e, xxxiii Wood V. Connop, 224. .'.' ^- ^'Sffinbotha'm, 81. .. ^- go-s, 171, 216, .S25. .. 1- 1^*^*:' ^". 149, 164, 464. Woodbridgev.lj,.ig,,a^^415_ \ir J , ^- Spoonor, 36. W.wn™''^ ''• IJ""'^«*orth. 276. W^ ""''t^- **^'*'-- ^15. 390- Woods V. Dean, 279. Ww^thorpe V. Laucs, 2fJ2. Wood ward v. Pell, 221 Wo,^worth V. Bank of America 416. Wookey V. P„le, 197 , j ^™«"ca, 416. Wort en v. Dodge, 47. Worrlsworth v. McDougall. 207 307 Workman v. McKinstry, 422 ' Worley V. Harri.son, 74: Wright V. Barrett, 280 bright V. Hall, 434. V. Maidstone, 3(50. ^^ V. Shawcnws, 270 WT 1 1 r^- '^^ri^ht, 163. Wy .. 3' «/"*«. 290. 347, .JS?,. V. Macnider, 218, 445. ■*'- CASES OVERRULED, QUESTIONED OR DISTINGUISHED. Where a case Is in whole or in part in conflict with a provi- sion of the Bills of Exchange Act, 1890, the section of the Act alone is given, even when the case may have been previously overruled or overriden by legislation prior to the Act. Allen V. Kemble, 6 Moore P. C. 314 (1848), qualified in Rouquette V. Overmann, L. R. 10 Q. B. 540 (1875). Armfleld v. Allport, 27 L. J. Ex. 42 (1857), distinguished in Mc- Call v. Taylor, 19 C. B. N. S. 301 (1865). Arthur v. Clarkson, 35 Beav. 458 (1865), disapproved in Re Whit- aker, 42 Ch. D. at p. 125 (1889). Bacon v. Searles, 1 H. Bl. 88 (1788), overruled by Jones v. Broad- hurst, 9 C. B. at p. 186 (1850). Balloch V. Binney, 5 N. B. (3 Kerr) 440 (1847). Contra, section 49, 8-s. 5. Banbury v. Lisset, 2 Stra. 1211 (1774), overruled by Griffin v. Weatherby, L. R. 3 Q. B, at p. 75s> (1868). Bank of Bengal v. Pagan, 5 Moore Indian Appeals 40 (1849), distinguished in Jonmenjoy v. Watson, 9 App. Cas. at p. 568 (1884). Bank of Bengal v. Macleod, 7 Moore P. C. 35 (1849), distinguished, in .Tonraenjoy v. Watson, 9 App. Cas. at p. 567 (1884). Bank of Michigan v. Gray. 1 U. C. Q. B. 422 (1841). Contra, sec- tion 49 (/). Bank of Montreal v. Langlois, 3 Rev. de Leg. 88 (1847). Contra, section 32 («). Bank of U. C. v. Parsons, 3 U. C. Q. B. 383 (1846). Contra, sec- tion 45 (d) (1). Banque du Peuple v. Ethier, 1 R. L. 47 (1869). Contra, section 8, 8-s. 4. Bartrum v. Caddy. 9 A. & E. 276 (1838), distinguished in Glass- cock V. Balls, 24 Q. B, D. 13 (1889). Baxter v. Bruneau, 17 R. L. 359 (1889). Contra, section 29, s-s. 3. Bell V. Moffat, 20 N. B. (4 P. & B.) 121 (1880). Contra, sections 23 and 56. Berton v. Central Bank, 10 N. B. (5 Allen) 493 (1863). Contra, section 17, s-s. 2. BettlB v. Weller, 30 U. C. Q. B. 23 (1870), overruled by Third Nat. Bank v. Cosby, 40 U. C. Q. B. 69 (1878). XXXVl CASES OVERRULED, ETC. I ( r. Blckerdlke v BoUmon, 1 T. R. 405 (1786), criticized In Carter v. Flower, 16 M. fe W. at p. 748 (1847). Bloxam, Ex parte, 6 Ves. 449 (1801), doubted In Re Gon>er8all, 1 Ch. D. 137 (1875), and overruled In Ex parte Newton, 16 Ch. D. 336 (1880). Boulton V. Welsh, 3 Bing. N. C. 688 (1837), overruled in Lewis v. Gompertz, 6 M. & W. at p. 403 (1840). Brown v. Davies, 3 T. R. 80 (1789), overruled in Ex parte Swan, L. R. 6 Eq. 358 (186S). Brunet v. Lalonde, 16 I.. C. R. 347 (1866). Contra, Aurele v. Duro- cher, :. R. L. 16C (1873). Brown v. Philpot, 2 M. & Rob. 285 (1840), overruled by Smith v. Bralne, 16 Q. B. at p. 254 (1851). Callaghan v. Aylett, 2 Camp. 549 (1810), overruled by Fenton v. Goundry. 13 East, 459 (1811). Camidge v. Allenby. 6 B. & C. 373 (1827), distinguished in Leeds Bank v. Walker. 11 Q. B. D. at p. 88 (1883). Canadian Investment Co. v. Brown, 19 R. L. 364 (1890). Contra, section 63, s-s. 2. Castrique v. Buttigieg, 10 Moore P. C. 94 (1855), explained in Abrey v. Crux, L. R. 5 C. P. 42 (1869). Catton v. Simpson, 8 A. & E. 136 (1838). overruled in Aldous v. Cornwell, L. R. 3 Q. B. at p. 578 (1868). Cazet V. Kirk, 9 N. B. (4 Allen) 543 (1860). Contra, section 9 (d). Coles V. CanL"5f England, 10 A. & E. 437 (1R391, questioned in Baxendale v. Bennett, 3 Q. B. D. at p. 534 (1878). Commercial Bank v. .lohnston, 2 U. C. Q. B. 126 (1845), Contra, section 45 (d) (1). Coutu V. Rafferty, M, L. R. 7 S. C. 146 (1891). Contra, section 56. Cowie V. Stirling, 6 E. & B. 333 (1856). Contra, section 7, s-s. 2. Crevler v. Sauriole, 6 L. C. J. 257 (1862), overruled. See p. 331. Crouch V. Credit Foncier, L. R. 8 Q. B. 374 (1873), explained and qualified In Goodwin v. Robarts, L. R. 10 Ex 355 (1875), and 1 App. Cas. at p. 494 (1876); discussed in London & County Bank v. River Plate Bank, 20 Q. B. D. p 240- (1887). DeBerdt v. Atkinson, 2 H. Bl. 336 (1794), overruled by li'sitass V. Siddle, 6 C. B. N. S. 494 (1859). Dechantal v. Pominville, 6 L. C. J. 88 (1860). overruled. See Cleroux v. Pigeon. 32 L. C. J. 236 (1888). Delaney v. Hall, 3 N. S. (2 Thorn.) 401 (1858). Contra, section 49 (e). Dingwall v. Dunster, 1 Dougl. 247 (1779). Contra, section 61. Down V. Hailing, 4 B. & C. 330 (1825), dissented from in Bank of Bengal v. Macleod, 5 Moore, Indian Appeals, 1 (1849): distinguished in Ijondon & County Bank v. Groome, ? Q. B. D. 288 (1881). Dupuis v. Marsan. 17 L. C J. 42 (1872). Contra, section 31, s-s. 4 Exchange Bank v. Quebec Bank, M. L. R. 6 S. 0. 10 (1890) Contra, section 36. A i •ta^imi^Si:rm!mmi CASES OVERRULED, ETC. XXXVll Fahnsstock v. Palmer, 20 U. C. Q. B. 307 (1860). Contra, sec- tion 9 (orts the customary en Bench Rep'ts. Manning, Granger and Scott. C. B. N'. P Common Bench R<)|>orts, New Series, Scott. V. f (Mvil C'Kle of Lower Canada. 0. ' '' .. . .Canadian Iiaw Times, Occasional Notes. 0. ' '.. .. . .Common I'leas Division, Tana(la, 18(51. C. S. iN ' ,. . .Consolidated Statutet-, New Brunswick, 1877. C. S. U. C Consolidated Statutes, Upper C'anada, 18.M). C. & E CabalH' and Kills' Reports, Nisi Prius. 0. & J Crompton and Jervis Reports, Exchoqiier. C & K Carrington and Kirwan's Reports, Nisi I'rius. C. & M Crompton mid Me^eson's Reports, ICxcliequer. C. M. A R f'rompton, Meeson nnd Ro.sr )e"s Re|>ortH, Kxclieqner. C. &. P Carrington and Payne's Re|)orts, Nisi Prius. Camp. ,, ,, ^;. .Campbell's Reports, Nisi Prius, Oftgg ,,*, .Court of Cfvssation, France, Ch. D (Miancery l)ivisi«^ I . .Connecticut Reports. OiiW Cowper's Ri'ports, King's Bench. xlii ABBREVIATIONS. Cranch C. C Cranch's Circuit Court Reports, U.S. Cushinff CushinR's Reports, Mass. D. &L D. & K. N. P. C. Daniel De(J. F. & J. . . DeG. & J DeG. M. & G. . . DeG. & Sm. . . Dorion Dougl Dia . Dowiinpf and Lowndes' Practice Reports. .DowlinK and Ry land's Ni.si Priud Cases. .Daniel on Negotiable In.MtruinentH, 4th etl., 1891. I)e Gex, Fisher and Jones' Ketwrtfi, Chancery. .De (tbx and Jones' Reports, (chancery. .De Ge.x, Macnaghten and Gordon's lieports, Chancery. De Gex and Siuale's Reports, ViceChano?llor's. . Dorion 's Quf'en's Bench Reports, Montreal .Douglas' Reports, King's Bench. . Draper's Upixsr Canada Reportd. E. & B. E. B. & E. E. & E. Esp. .. . Ex. . . Ex. D,. . .Ellis and Blackburn's Reporb '*.,'>'>n'8 Bench. . .Ellis, Blackburn and Ellis' Rej ; " . m's Bench. , .PiUis and Ellis' Reports, Queen's . . .Ettpinasse's RefHirts, Nisi Prius. . .Exohecpier Reports, Welsby, Uurlstni.c and Gonlon. . .Exchequer Divisifm, Law Reports, 1875-90. F. & F Foster and Finlason's Reports, Nisi Prius. Fed. Rep Federal Re|)orter, U. iS. Circuit and District. Forsyth .Forsyth's Constitutional Law, 1809. G. & O. Grant . . H. Bl... . H. L. Cas.. H. & C. . H. * N. . Han. .. HoltN. P. How. . . ■ Geldert and Oxley's Reports, Nova Hcotia. .Chancery Refwrts, U. C. and Ontario. .Henry Blackstone's Reports, Common Pleas. . House of Lords Cases, by Clark. .Huristone and Coltuian's Reports, Exchequer. . Hurlstono and Norinnn's RoiH)rtH, Exchequer. . Hannay's R), Crown Cast's Ite«erved. . . " " " Cf-nnnon Pleas. , . " " '• Chance.-y Amieals. App . " " " English and Irish Apjieals. •i Tr-"^?^i'-*^ ABBREVIATIONS. xliii L R Kq Law Re|X)rt8 (1500-75), Equity Cases. L'.r'.V.x " '• ". Exchequer. L. R. H. L " " House o"^ Lurds. h. r! p.' c' . " " " Privy (council. l! T. N 8.' .. , .Law Times (En(?li»li), New Series. La. Ann Loiiitfiana xVnnual Reinirts. L^::y^:;'',- 'i- N. H New Hanip.iiiire Reports. ' ' •:'■_ N.J New .leriey Reports. N. 8 Nova Sciitia Rei-Kjrts. N. S. W. R New So\ith Wales Reports. N. Y New York Reports, N. & M Neville and Manning's Reports, King's Bench. Nougiiier Nougnier, Leitros de Change, 4th ed. , 1875. N. Z. L. R New Zealand Law Reports. (». R Ontario Reports. Ohio .St Ohio .State KeiM)rts. Ont. A. R. Ontario Appeal Rc^iorts. Ont. P, R Ontario Practice Reports, p. & B .Pugsley and Bnrbidgo's Reports, New Brnnswick. P. & D Perry and Davison'.'i Reports, Queen's Btmch. Penn. St Pennsylvmiia State ReiM>rts. Pet Peters' Reports, Supreme C'ourt, IT. S. Phil Pliillimore s lOcclesiastical ReiKirts. Pick. Pickering's Report.^, Mass. Pothier Potliier, Traite dii (.'ontrat de Change. Pugs.. ,. Pugsley 's Reports, New Brunswick, Q. B. Queen'.s Bciuli Reports, Adolphus and Ellis, N. S. Q. B. Queen's Bencli Division, Law Rejxnt^, 1875 'X. Q. L. R Qiieb'c Law Reports. Q. R.- Q. B Queliec Fteiiort.i (Rapjtorts Judiciaireti de Quebec)- Queen's Bench. Q. R,— S. 0. . . Ibid.-Sup.iior Court. R The R«t)ort8( English ), l**?^!,' R. Revue Critiqjt', Xlontreal. 1-95. ^s xliv ABBREVIATIONS I M ■'i \i4 R.I Rhode I 'and Reports. . .. . R. L Revue Legale, Montreal. . '. il. S. C Revised Statutes of ('anada, 1880. R. iS. Man Revised Statutes of Manitoba, 18!)1. R. S. N. B Reviwid Statuti'H of New Brnnswiok. ■ R. S. N. H RevisiKl Statutes of Nova Scotia. R. S. O Revised Statutes of Ontario, 1887. R. S. Q Revised Statutes of Queliec, 1888. v. .. R. & C Russdl and Chesley's Jleports, N. S. R. & G Russell and Geldert'.* Reports. N. S. R. i^ M Ryan and Moody V. Reports, Nisi Prius. R. & R Russell and Ryan's (Jnnvn Cases Reserved. Ramsav A. C Ramsay's Appeal Cist-s, Montreal. RandolpTi Randolph on Comnieroial Paper, 1886-8. Rav. de Leg. . . . .Revue de Legislation, Montreal. Rev. Ord. N. W. T. Revised Ordinances, North West Territoriea. Rob & Jos. Dig. . Robinson and Joseph's Ontario J.)ige.st. Russ RuKsell's Chancery ReiKirts. Ry. & M . .Ryan and Moody's Reports. ■'1? in ■}■'/ S. C Can., Rei)ort.s of the Supreme Court, Canada. S. C. R. N. W. T. . Supreme Court Re|K)rts, North West Territories. S. Car South Carolina Reports. Salk Salkeld's Reports, King's Bench. - Sandf Sandford's S. C. Rejx^rts, N. Y. Scho. A Lef Schoales and Lefroy's Irish Chancery Reports. Sess. Ciis New t!ourt ot Sessions Cases, Scotland. Serg. & R Sergeant anil Rawlo's Reports, Pennslyvania. Show Shower's Re^wrts, House of Lords. Sm, & G Sniale and (liffard's Reports, Vice-Chancellor's. Stark Starkie's Reports, Nisi I'rius. Str Strange 's ReiX)rt8, English. . • ■ • • ■ T. L. R London Times Law Reixjrts. T. R Term Reports, Durnfoni aud East, K. B. *• '' Taunt Taunton's Reports, Common Pleas. " ' Taylor Taylor on Evidence, Uth ed., 18'.l.5. " " Tenn '. Tennessee Reports. ' ' ; , Thorn Thonisim's Reports, Nova Scotia. " Tyr Tyrwhitt's Reports, Exchequer. fi^. I i; I r i( (. U. C. C. P ITpper (Janiida Oannnijn I'leas RejKJrts. U. C. L. J Ui)per Canada Law Journal. U. C. (). S .... Upper Canada Reports, Old Series. '" ' 17. C. P. R Upper Canada Practice Reports. U, C. Q. B Upper Canada (Queen's Bench ReiKirts. , •• V. L. R Victoria Law Reiiorts. , ; • Ves . , Vesey, Jr's, C!haiicory Rejxjrts. Vt Vermont Reports. W. N Weekly Notes, Law Rei.orts, ISfifi-W. Wall Wallace's Reports, United States Supreme Court. Wend Wendell's Reports, N. Y. Wis Wisconsin Reports, Westlake WestlaUe on International Law, .3rd ed., LSOO. Wheat Wheaton's Reports, United States Supremo Court. Y.AC Younge and Collyer's Rejwrts. [im ] A. C Law Reports (18!»l-90), Ai>i>eal Cases. " Ch " " " Chancery Division. " ilh " " " Queen's feonoh Division. ■',r ^ INTRODUCTION. The origiu of Bills and Notes was formerly a vexed question among legal antieedily came into general use, and as part of the general custom of merchants, received the sanction of our Courts. At first the use of bills of exchange seems to have been confined to foreign bills between English and foreign merchants. It was afterwards ex- tended to domestic bills between traders, and finally to bills of all persons, whether traders or not: see Chitty on Bills, 8th ed., p. 13. " In the meantime, promissory notes had also come into use, differing herein from bills of exchange that they were not drawn upon a third party, but contained a simple promise (o pay by the maker, wasting, therefore, upon the security of the maker alone. They were at first made payable to benrcr, but wlien the practice of making bills of exchange payable to order, and making XlVlll l\TlU)l)UCTION. III <• I! 'f^ ^ -'r them transferable by ind'^rsement, had once become established, the practice of making promissory notes payable to order, and of transferring them by indorse- ment, as had been done with bills of exchange, speedily prevailed. And for some time the courts of law acted upon usage with reference to promissory notes, as well^ as with reference to bills of exchange. " In 1C80, in the case of Shelden v. Hentley, 2 Shower, 160, an action was brought on a note under seal by which the defendant promised to pay to bearer £100, and it was objected that the note was void because not made payable to a specific person. But it was said by the Court, ' Traditio facit chartam loqui, and by the deliveiy he (the maker) expounds the person before meflnt; as when a merchant promises to pay to the bearer of the note, anyone that brings the note shall be paid.' Jones. J., said that ' it was the custom of mer- chants that made that good.' In Bromwich v. Lloyd, 2 Lutwyche, 1582 (1697), the plaintiff declared upon the custom of merchants in London on a note for money payable on demand, acd recovered; and Treby, C.J., said that ' bills of exchange were originally between for- eigners and merchants trading with the English; after- wards, wlien such bills came to be more frequent, then they were allowed between merchants trading in Eng- land, and afterwards between any traders whatsoever, and now betw^een any persons, whether trading or not; and, therefore, the i)laintiff need not allege any custom, for now those bills were of that general use that upon an indebitatus assumpsit they may be given in evidence upon the trial.' To which Powell J., added, ' On indebi- tatus assumpsit for money received to the use of the plaintiff the bill may be left to the jury to determine Avhether it was given for value received.' " In Williams v. Williams, Carthew, 269 (1699), where the plaintiff brought his action as indorsee against the payee and indorser of a promissory note, declaring on the custom of merchants, it was objected on error, that -»5w;®t*?fiS®'s,E&'; ':^'i^:!£^''VRiP?f?v lamiiiurr' • INTRODUCTION. ii and instruments which ai-e the repreaentatives of money, and other forms of property. ' The Courts,' he says, ' have considered the8<> iustruinents, eith'^r promises or orders for the payment of money, or iuHtruments entitling the holder to a sum of m«mey as being appeudages to money, and following J he nature of their principal.' After refer- ring to the authorities he proceeds: 'These authorities shew that not only money itself may pass, and the right to it may anm by currency alone, bn+; further, that these 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 insti'u- ments, which either give to their holders, uerely as such, a right to receive the money, or spei y them as the persons entitled to receive it.' "Another very remarkable iustance of the efticac;, of usage is to be found in much more recent times. It \a notorious that, with the exception of the Bank of Eng- land, the system of banking ha« 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 thingSi the general course of dealing between bankers and their customers has attjichetl incidents pre- viously 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 drnwer, is not bound to accept unless by his own agreement or consent, the banker, if he lias funds, is boiMid to pAy on presentation of a cheque on demand. Even admis- sion of funds is not sufficient to bind an ordinary 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 Hi INTRODUCTION. I % \ 5 ; 1 t 1 J i ■T \ i i ■f k V of the customer: see Pott v. Clegg, 16 M. & W. 321, 1847. Besides this, a custom has grown up among bjuikers themselves, of marking cheques as good for the purposes of clearance, by which they become bound to one another. " Though not immediately to the present purpose 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 not have that effect at common law. It is from mercantile usage as proved iu evidence, and rj'tifled 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. " It thus appea"s 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, yud were adopted by the law into our Courts as being in conformity with the usjiges of ti'ade; of which, if it were needed, a further contirmation might be found in the fact that, according to the old fuini of de(;laring on bills of exchange, the de'aration always wjis founded on the custom of mer- chants. " Usage, adoptetl by the ('ourts, having been thus the origin of the whole of the so called law merchant as to •negotiable SLCurities, what is there to prevent our acting upon the principle acted upon by our predecesr.o' s, and followed in the }>recedents they have left to us? Why is it to be said that a new usage which has sprung up under altered i'ircumt:tance8, is to be less admissible than the usages of past times? Why is the door to be now shut to the admission and adoption of usage in a matt* r altogether of cognate character, as though the law had been liually stereoty[ ed and settled by some positive and peremptory enactment? It is tru(? that this scrip purports, on the face of it, to be a security not for money, but for the delivery of a bond; neverthe- I INTRODUCTION. liii less we think that substantially and in effect it is a security for money, which, till the bond shall be de- livered, 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 pos- sible case that the bon-owing government, after receiv- ing one or two instalments, were to determine to pro- ceed no further with its loan, and to pay back to the lenders the amount they had already advanced ; the scrip with its receipts weald be the security to the holders for the amount. The usage of the money market has solved the question whether scrip should be considerf'J security for, and the representative of, money by treating it as such. " The universiility of a usage voluntarily adopted be- lueen buyers and sellers is conclusive proof of its bein-^ in accordance with public convenience ; and there can 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 should materially hamper the transactions of the money n.'irket 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. But this is an evil common Q. H. ,'W6; 15 L. J. Q. B. 305 (181()), and which, amongst other things, turned on the negotiability of dividend warrants of the Bank of Eng- land, is not, so far as that (piestion is concerned, nlto gcther satisfiuMory, as the decision turned also upon other }>oints. The bank was in tiie habit of paying divi- dends to thos<> entitled to them by warrants, and it was pleaded and proved that by a usage of sixty years' stand- ing of the bankers and merchants of London, these war- rants which are not niade 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 ■H INTRODUCTION. ft required before payment would be made. Such a war- rant had been obtained by an agent of the plaintilt authorized to receive liis dividend, and had been made over to the defendants for good consideration, in fraud of tlu^ nlaintitf, so far as the agent was concerned, but without knowledge of such fraud on the part of the de- fendants. The warrant had been delivered by the de- fendants to the 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 tlie defend- ants, but had not been carried to their draAving account. Tht' Court of Queen's Bench held this proof of the cus- tom to be a good defence. The C^ourt of Exchequer Chamber reversed their judgment, on the ground among others, that the custom relied on was 'rather a prac- tice (if trade than a custom properly so called, and that such a practice could not alter the law according to which such an instrument conferred no right of action on an assignee.' We quite feel the force of this distinc- tion, though it is not quite so dear in Avhat sense' it was here intended to be applied. I'ossibly what was m< iit was, that the custom apjilied to the warrants of a par- ticular compauy, and therefore could not forr 'he Hub- ject of any general mercantile usage. '' In Dixon v. Bovill, 3 Macq. 1 (1850), where the note was ' to deliver so much iron when required to the jiarty lodging this document with me,' there wtus neither a promise to bearer, nor was there any proof whatever of any us^ige whereby such notes were dealt with aa negotiable. The case has therefore, with reference to its facts, no bearing on the present. " In Crouch v. The Credit Foncier of England, L. R. S Q. B. 374 (IST.'l). the defendants, a limited company, had issiKMi bonds payable to bearer, * subject to the con- ditions indorscMl cm this del)entuiv '; and by the condi- -tions so indorsed the bonds were to be paid off by a cer- tain numlx'r being drawn at stat'.'d periods; in which respect, it may b«> observeur( had been satis- fled with the verdict, it would no doubt have been up held. ''We must by no means be understood as saying that mercajitile usage however extensive, should b»' allowed to pi-evail, if contrary to positive law, including in the Iviii INTUODUCTTON. , i i ^^* S =1 i ^ lalter 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 in- volves a defiance or disregard of the law would be obvi- ously contrary to a fundame-ntal principle. And we quite agree that this would apply quite as strongly to an attempt to set up a new usage against one which has become settled and adopted by the common law as to one in conflict with the more ancient rules of the com- mon law itself. Thus, it having been decided in the two cases of More v. Manning, 1 Comyns, 311 (1719), and Acheson v. Fountain, 1 Str. 557 (1730), 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 Manslield and the Court of King's Bench, in the case of Edie v. The East India Com- pany, 2 Burr. 121(1 (17(J1), held that evidence of a con- trary usage was inadmissible. In like manner, in Grant v. Vaughan, 3 Burr, 151() (176i), where a cash note, pay- able to bearer, had been lost by the owner, but had Ixrn taken by the plantitf bona tide for value, on an ac- ti(m on the note by the latter against the maker. Lord .MiUisflcld having left it to the jury to say ' whether such drafts as this, when actually paid away in the course of tiade den ling and business, were negotiable or in fact sind practice negotiable'; and the jury, inlluenced no doubt by the natural desire to protect the owner of the note, having found for the defendant. Lord Mansfield and ihe Court here sigain set their verdict aside, on the ground (hat, the law having been settled by former de- risions that notes payable to bearer pass<'d by delivery to a bona fide holder, the Judge ought to have directed a verdiet for the plaintiff. _^ " If we could see our way to the c(mclu8iou that, in holding the scrip in question, to pass by delivery, and to be available to bearer, we were giving effect to a usagt> incompatible either with the common law or with the law merchant as incorporated into ciiO embodied '■;,•► INTRODUCTION, lix in it, our decision would be a verj different one from tliat wliich we are about to pronounce. But so far from tliis being tlie case we are, on the contrary, in our opin- ion, only acting on an established 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 ex- pressly made transferable to bearer, as the represen- tative 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 441 of the presen work, as to the progress made 'in' Canada b^ «r tZ/h'^^'T"' *""^^'^ P^^^*^^ instrument' foot'^g ' "''*^' '"''^ '^"'i""« "P''" ^ «i«»la'' ■f?^^?-!^fe • ii THE c^3srjLX)JL. 53 VICTORIA, CHAPTEll 33, AS AMENDED BY 54-55 VICTORIA, CHAPTER 17; 56 VICTORIA, CHAPTER 30; A*1D 57-58 VICTORIA, CHAPTER 55. An Act relating to Bills of Exchange, Cheques, and Promissory Notes. m -^ BY the British North America Act, section 92, sub- Dominion section 18, the right to legislate respecting Bills *'8"'**^"^°- of Exchange and Promissory Notes was assigned exclu- sively to the Dominion Pnrliament. Ho sparingly, how- ever, had this power been exercised during the flrst nineteen years of Confederation, 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. The remaining twenty sections are nuide up of provincial enactments passed before Confederation, which were as a rule appli- cable only to a single province. Apart fron» the con- tents of that chapter, the only Canadian legislation on the subject in force in any part of the Dominion was: (1) two short chapters of the Civil Code of Quebec, (2) a single section in the Revised Statutes of Nova Scotia, m'i .1). K. A,— 1 mm mn BILLS OF EXCHANGE ACT, 1890. A code. Provincial aubjectti. (3) two HPctions in the Rtatutes of NcrV Brunswick, all of which, 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 atTected by the Act. A cheque being a bill of exchange drawn on a bank, payable on 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 F^nglish 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 aft'ects other matters which are within the exclusive jurisdic- tion 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 part- nership, of suretyship, of evidence, and the procedure in the provincial civil courts. There are also other mat- ters indirectly affected, which come chiefly under the head of " Property and Civil Rights " and " the Admin- istration of Justice." The fact above mentioned, that there has hitherto been scarcely any Dominion legisla- tion upon the subject, has doubtless been the reason why more conflict has not arisen between the Dominion and the Provinces. It is too much to expect that some of 1 FORMER LEGISLATION. 8 \ the provisions of the new Act bearing upon tlio fore- going points, or others nnmenlioned, which may not agree with provincial law upon these subjects, will not be qne8tl3ned in the Courts in the near future. The Bill which subsequently became law in the form Bin of i8«» of 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 con- tracts. 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 I'rovince of Qnebec. I may say tluit tli<^ Bill is principally the codification of tlie 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 witli , the English Statute law." — Commons Debates, 1889, p. 14. As first submitted, it was almost an exact trans- cript of the Imperial Bills of Exchange Act, 1882, 45 and 46 Vict. cap. 61, the full title of which is " An Act to codify tlu 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 Kingd or settled the laws of these countries. The course of provincial legislation also tended to similarity. The i^Siii^sx^Jiti^ .. BILLS OF EXCHANGE ACT, 1890- ■,,M 1:^ CaHM un- der old lavf provisions of the Hucnesaive English statutes on the sub- ject were frequently re-enacted by tlio provinces, includ- ing Lower Canada. Notwithstanding these circam- stances a glance at the jurisprudence, as it is recorded in tlie provincial reports, and as it will be briefly noted in the following pages, will show that there lias been a wider divergence in the decisions of the Courts in tlu^ different provinces than miglit have been expected from the similarity of the statute law. The desire to render the law throughout the Domin- ion as nearly uniform as possible, which was one of the leading objects of the Act, no doubt influenced the Par- liam'Ut to restore the clause which had been dropped from the Bill in 1890, and it was made retroactive ia its effect, so that even a temporary divergence in juris- prudence from this cause will be avoided. In all cases not specially provided feu* by the Act, recourse will now be had in all the province, to tlie common law of Eng- land and the law merchant, instead of to the law of France in (Quebec or to that of England at varying daten in the other provinces, as would have been the case under the Act of 18{)0: (54-55 V. c. 17, s. 8). In the course of the following notes upon the various sections of the Act, cases decided tinder the old laws will be cited which in whole or in part may be no longer law, either in consequence of this Act or prior Dominion or provincial legislation. These have been noted, partly becatise they will be of assistance in trac- ing t.K' course of jurisprudence on the subject, and partly because, foi a few years at least, the cases which will come before our (\mrts will be largely upon bills and notes made before the passing of the Act, and con- Hfijuently governed by the old laws. In order to facilitate a comparison of this jurispru- dence with th«' course <»f legislation, the dates of the vnriotis decisions will be given. A concise summary of the more salient points in the history of the law in th** differeni j.rovinces is also here gi'/en, which, it is hoped» '^y ■ ■'!;;! FORMER LEGISLATION. will be found to be suiRriently full and exact for the purpose above stated. , . „.. ' Quebec— The French commercial law, introduced French with the Coutume do Paris on the establishment of the '**' Conseil Superieur in 1663, as modified by subsequent enactments and decisions, and which was the law mer- chant, and substautiallv the same as the commercial law of England of the same period, regulated the bills and notes of the colony, until the conquest in 1760. The French Commercial Ordinance of March, 167.'}, 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; 9 L. C. R. 353 (1859). The admirable treatise of Pothier on the subject, Con trat de Change, cannot consequently be accepted as an authority without question where tlu^ ordinance may have made a change in the older law. See the Seventh Report of the Commissioners 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 controversy. By the Proclamation of Geo. III. of the 7th of October, 1763, the Ooverumeat of Quebec was constituted, embracing the pi'esent Province of Quebec and the eastern part of Ontario; the people to have the "enjoyment of the benefit of the lawH of England," and the Courts to decide "all causes according to law and equity, and, as near as may be, agreeable to the laws of England." The validity of this Prodauiation as a legislative act has been questioned, but it was affirmed by a unanimous judgment of the Court of King's Pench, delivered l)y Lord Mansfield: Campbell v. Hall, Cowper 204 (1774). It has also been recognized by the Privy Council: Lyons v. East Indhi Co., 1 Moore 272 (1836); and by the House of Lords: Whicker v. Htime, 7 H. L. Cas. 150 (1858). See Anderson v. Todd, 2 IT. C. Q. P. at p. 84 (1845); Stuart v. Bowman, 3 L. C. R. 369 (1851); J ii: V t BILLS OF EXCHANGE ACT, 18»0. ; ! ■I f i H in Appeal, 3 L. C. R. 309 (1853); 2 L. C. J. Appendix No. 2; Wilcox V. Wilcox, 2 L. O. J. 1 (1857); Atty. Gen. v. Ktewart, 2 Merivale 143 (1817); Jephson v. Kiera, 3 Knapp 152 (1835); Cameron v. Kyte, ibid. 340 (1835); Beanmont v. Barrett, 1 Moore P. C. 272 (1830). The majority of the Judges in these Lower Canada cases held that the English law was not introduced into the province during the period in question. As a matter of fact, the Courts during that period administered the English law in commercial cases: Wilcox v. Wilcox, at p. 11. By the (iuebec Act of 1774, 14 Geo. III. c. 83 (Imp.), the limits of the province were extended westward, the proclamation 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. This restored the Frencli commercial law, with such modifications as had been introduced into Canada. Provincial In 1777 an Ordinance was pas.sed by the Governor leKislation. .jj^j t()uncil of the province regulating the protesting of bills, and the damages, interest and fees thereon: 17 Geo. Ill c. 3. Another < >rdinance passed in 1785, 25 Geo. III. c. 2, provided by Art 10 that, " in proof of all facts concerning commercial matters, recourse shall be had, In all the Courts of civil jiirisdiction in the province, to the rules of evidence laid down by the laws of Eng laud." In 1793 a statute was passed to facililate the negotiation of jtromissory notes: 34 Geo. III. c. 2. In the A it of 1849, 12 Vict. c. 22, for the first time a geneial law on the subject was enacted, enibodying provisions that up to that time had existed in custom alone. T;iis statute, passed by the Parliament of Ignited Canada, do<'S not purpoit to be for Lower Can- ada alone, but it has been decided that it did not apply to ITpper ('aiuida: Kidoiit v. Manning, 7 IT. ('. il. B., 35 (1849). It was eTnbodie0, then military rule to the peace of 17r»3, Englisli law after the i)roclamation of October, ir(>3, and French and (^anadian law again after the Ist of May, 1775. The first Parliament of the new ' ■ y ' > » aB» i i-' 10 BILLS OF EXCHANGE ACT, 1890. - i Provincial Ifgiitlation, Kngli»h law. province of Upper Canada, which met at Niagara on the 17th of September, 1792, by its first Act, 32 Geo. III. c. 1, repealed that part of the Quebec Act rehiting to llie laws of Canada, and provided that in all matters 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. » In 1811 the Quebec Ordinance of 1777 regulating protests, above referred to, was repealed by 51 Geo. III. c. 9. The principal Acts relating to bills and notes were the following: 2 G«o. TV. c. 12, declaring that the Imperial Acts 15 & 17 Geo. III., respecting small notes, should not apply to Upper Canada; 5 Wm. IV. c. 1, facili- tating actions on bills and notes; 7 Wni. IV. c. 5, requir- ing acceptances to be in writing, and making an accept- ance at a particular place general, unless the words "only and not otherwise or elsewhere" were added; 12 Vict. c. 7(5, regulating protests and damages; 14-15 Vict. c. 94, as to days of grace and holidays; and 19 Vict. c. 43, as to actions on lost bills and notes. These, with some others, were eml>odied in the Consolidated Statutes of Upper Canada of 1859, c. 42; and those sec- tions which had not been previously altered by Domin- ion legislation formed sections 15 to 25 of chapter 123 of the Revised Statutes of Canada, 188(i, but they con- tinued to be applicabh? to Ontario alone. Nova Scotia- — This province is considered to have beconie a British colony by discovery and settlement; and the date of its settlement is generally given as immedifi ely following its discovery by Cabot in 1497: 1 Burge's Colonial Law, p. xxxiv. ; Forsyth's Constitu- tionail Law, p. 2b. The first actual settlement was under the grant to Sir William Alexander in 1G21. It subse- quently passed into the hands of the French, who aban- doned their claim by the Treaty of I' -echt in 1713. Even after this there was a conflict of possesMon, but Bfjf' FORMER LEGISLATION. 11 M it was finally confirmed to England by the Treaty of Paris in 1763. A country reconquered from an enemy reverts to the same state that it was in before the con- quest: Gumbe'8 case, 3 Knapp, 301) (1834). Having become a colony by settlement, the laws originally in force in Nova Scotia would be the common law of Elng- land, with the statutes passed before its settlement, in BO 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 determined, 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 Governor and a council, which undertook as a legislative body to pass ordinances. In 1755 the Chief Justice of the province held that they had no such power without an assembly, and this opinion was confirmed by the law oflicers of the Crown in England. The first General Assembly met at Halifax on th<; 3rd of October, 1758, and this would seem to be the latest date at which general British Statutes not specially applicable to it or the other colonies would apply: Doran v. Chambers, 20 N. S. at p. 311 (1887); Forsyth, p. 19. Cape Breton is also claimed to have been a British colony from 1497 for the same reasons: 1 Burge, xxxiv. By the Treaty of Utrecht, however, it was retained by France. Conquered in 1758, it was confirmed to Eng- land by the Treaty of Paris; and, by the proclamation of October 7th, 1703, it was annexed to Nova Scotia, and the laws of England made applicable. It was separated in 1784, and re-united to Nova Scotia in 1820: Re (^upe Breton, 5 Moore P. Ci 259 (184G). By the provincial Act 1 & 2 Geo. IV. c. 5, the laws of Nova Scotia were extended to Cape Breton. n -^ruw'^ w »* »gp * ^'? t* y f g- ' yi ^ sffm g 6g g»si^ "wraw ■■\v^^-m i-;u " i':' t- iih Xf . HILLS OP EXCHANGE ACT, 1890. SatLn. ^^^^ °^^®* ^^ *^'*^ ^*^*''' eoloriies, the first Act passed by the Nova Scotia xissembly ngardiiiff bills of ex- change was to regulate protests and the damages on dishonored bills, and this was done at the first session in 1758. The provincial legislation on the subject was very meagre, and at Tonfederation the whole of the statute law, apart from that relating to procediire in the Courts, was comprised in three short sections of chapter 82, Revised Statutes, as amended in 1865, relat- ing respectively to (1) damages on protest(Mi bills. (2) the transfer and indorsement of promissory notes, and (3) requiring the acceptance of a bill to be in writing upon it. Notes for sums payable otherwise than in money were j)resumed to be for value, and recognized as promissj)ry notes, but were not negotiable. These last have not bevMi dealt witli in the present Act, or in any other Dominion legislation, as they are not consid- ered promissory notes within the meaning of the British North America Act. . ^ •, .^ . t: The provincial Act making promissory notes assign- able and indorsable like inland bills of exchange, and allowing the payee, indorsee, or holder to sue in his own name, was ])a8sed in 17G8: 8 Geo. III. c. 2. This was sub- stantially a re-enactment of the English Act \i & 4 Anne, c. 9. From this it would appear that the Local Assem- bly was of oi)inion that the Imperial Act was not in force in the colony. • It is possible that in Nova Scotia tlie period of the restoration of Charles II. was adopted as the date at which ?]nglish Statut(^s gen(>rally shonhl cease to apply, as is said by Judge Chipman in The King v. McLaugh- lin, quoted below, to have been tlie case in New Brans wick. The statute requiring the acceptance of a bill of exchange to be in writing on the bill was passed in 1865. Knsrlish New Bfunswick. — This province was a ])art of Nova law. ' ^ Scotia until 1785; but all Nova Scotia statutes passed FORMER LEGISLATION /a ■vi , ) ! previous to that date were repealed in 1790, in so far as they afl'eeted the new province. As to English law and statutes, the rule would be the same as that applicable to Nova Scotia. The question was discussed in The King V. McLaughlin, an unreported case decided in 1830, quoted in Cassels' '* Procedure in the Supreme and Exchequer Courts," at page 30, from whiih the follow- ing extracts are taken. Saunders, C.J., said that '* the colony was not to be considered as either a conquered or a ceded country, and therefore the colonists at the time it was settled brought with them such parts of the common law of England as were applicable to their condition." Bliss, J., was of the same opinion, and Botsford, J., said he " never considered Nova Scotia, of which New Brunswick was a part, in the light of a con- quered country. The British right to it was founded on discovery and w;is always so maintained; and the grant to Sir William Alexander, in lOiiO, was founded on this right of discovery; therefore the English com- mon law and all statutes in amendment of the common law jnissed anterior to the settlement of the colony were in force." Chipman, J., considered the true prin- ciple to be as laid down by Lord Mansfield in Lindo v. Lord Rodney, that each colony at its settlement " took with it the conmion law and all the statute law appli- cable to its colonial condition. It might not be a clear point as to what period of time should be deemed the time of the settlement of that colony; the period of the restoration of Charles IL, it was understood, was adopted in practice by the General Assembly of the pro- vince at its first session as th(» period anterior to which all Acts of Parliamont should be considered as extend- ing, and the reason which had been given for this was that it was about the time of the restoration that tlje niantations began to be specially mentioned in Acts. of Parliament, and the inference therefrom was tliat it any Act after that period was intended to extend to the plantations it would be so expressed." i'' 14 Provincial legislation. \ BILLS OF EXCHANGE ACT, 1890. The provincial legislation on the subject of bills and notes was almost identical with that of Nova Scotia. Here also the statute of Anne was re-enacted at the first session held on the 3rd of January, 1786: 26 Geo. III. c. 23. The Act requiring the acceptance of a bill of exchange to be in writing on the bill was passed in 1836: () Wm. IV. ^■. 49. The law in force at the time of f^on- federation was to be found in 1 Rev. Stat. Title xxx. c. 116, as amended by 22 Vict. c. 22, and 30 Vict. c. 34. See Con. Stat. N. B. pp. 1064-5. ti nsriish Prince Edward Island.— This province is also *"^' claimed to have been a colony by settlement, dating from 1497, when it was discovered by Cabot: 1 Burge, xxxiv.; Forsyth, p. 26. It was, however, colonized by the French, but ceded to England by the treaty of Paris, and subsequently annexed to Nova Scotia by the procla- mation of October 7th, 1763, when the laws of England at that date were made applicable to it. After being connected with Nova Scotia for some years it was made a separate colony in 1769, and its first Assembly con- vened in 1773. . , . . .Provincial ^^^ ^^ ^^^ ^^^^ ^^^^ ^^ the Legislature was to fix legislation, the damages on protested bills: 13 Geo. III. c. 5. In 1836 an Act was passed to regulate the transfer of notes payable in Treasuiy notes: 6 Wra. IV. c. 3. In 1861 certain bills and notes were exemptel from the usury laws: 24 Vict. c. 28. The Act of 1864, 27 Vict. c. 6, de- clared the acceptance of a bill at a particular j)lace to be general unless accepted there "only and not other- wise and elsewher . It also required all acceptances to be in writing on the bill, and provided a remedy on lost bills and notes. These were the principal provincial Acts in force on the 1st of July, 1873, when Prince £; Edward Island became a part of the Dominion of Canada. *.: FORMER LEGISLATION. 16 Manitoba. — There has been a conflict of decisions Kngiish as to the law regulating bills and notes in this province. *^' It formed a part of the territory of the Hudson's Bay Company under its charter of May 2nd, 1070. 'As the company was giv^n the power " to make laws, constitu- tions, and ordinances," which were to be binding within its territories, subsequent English statutes would not be in force there unless specially made applicable to these territories or to the other colonies similarly situated: Connolly v. VVoolrich, 11 L. C. J. 197 (1807). It does not appear that any laws or ordinances were made affecting bills or notes either by the company or by the Council of Assiniboia, which for some 1 irae before the union with Canada had jurisdiction over the central part of what is now the Province of Manitoba. With the rest of the Hudson's Bay territory it was purchased by Canada in 18<>9 and became a part of the Dominion on the 15th of July, 1870, under the Imperial order in council of June 23rd, 1870. On the 8th of October, 1883, in the case of the Cana- dian Bank of Commerce v. Adamson, 1 Man. 3, it was held by Justice Dubuc that the English Bills of Ex- change Act, 19 & 20 Vict. c. 97, was in force in that part of the province formerly Assiniboia by virtue of the Ordinance of 1864, which he held introduced the English law of that date. A few days later, October 16th, Mr. Justice Tfiylor laid down the rule that the laws of Eng- land as of May 2nd, 1070, the date of the Hudson's Bay Company's charter, were in force until April lltii, 1802, when the laws of England as at Her Majesty's accession (June 20th, 1837) were brought in by local ordinance of the Council of Assiniboia; and that by another ordi- nance of January 7th, 1864, the laws of England as of that date were introduced: Keating v. Moiscs, 2 Man. 47. Mr. Justice Killam subsequently held that these ordinances merely introduced the English procedure in the local Courts, and that the general statute law ot England subsequent to the date of the Hudson's Bay 16 BILLS OF EXCHANGE ACT, 1890. Company's charter was not in force: Sinclair v. MuHi gau, a Man. 481 (1886). This view was snbseciuently upheld by the full court, Chief Justice Taylor a(lopt- ing the view of Mr. Justice Killam: Sin- lair v. Mulli- gan. 5 Man. 17 (1888). In the case of the Merchants' Bank v. Mulvey, €> Man. 467 (1800), Mr. Justice Dubuc held that although the English Htalute. .'{ & 4 Anne, c. 9, which made pro- missory notes transferable by indorsement, and gave the holder the right to sue in his own name, was not in force in Manitoba under the rule laid down in Sinclair v. Mulligan, yet the bank as holder of a note to order in- dorsed to it could recover on two grounds: (I) the Manitoba Statute 38 Vict. c. 12, which introduced the English law, brought in the statute of Anr u so far as it related to procedure; and (2) the Doni, )n Bank- ing Act of 1871 gave plaintiff the right to carry on the business of discounting notes. Under the authority of Goodwin v. Robarts, L. R. 10 Ex. 337 (1875), however, promissory notes would always have been negotiable in Manitoba, and private holders as well as banks could sue. Chief Justice Cockburn there held that the statute of Anne was declaratory of what was the law before it was changed by Lord Holt. The series of Lord Holt's decisions w>:ich the st ttute was passed to overridt? ex- tended from Clerk, v. Aiartin, 2 Ld. Raym. 757 (1702) to BuUer v. Crips, 6 Mod. 30 (1703), the first of them being more than 30 years subsequent to the Hudson Bay Com- pany's charter. The ease of the Merchants' Bank v. Mulvey having been begun before the 22nd of May, 1888, was not affected by the Dominion statute 51 Vict. c. 33, which brought into force in Manitoba the laws of England re- lating to matters within the jurisdiction of the Parlia- ment of Canada, as they existed on the 15th (^ Jul.Y, 1870, and gave them a retroactive effect to that date, subject to any changes subsequently made by the Im- perial or Canadian Parliament. This would include the m m FORMER LEOIStATION. w I. I '4Jk law of England as of July 15th, 1870, respecting bills notes, anci cheques. • ' The North-West Territories, having formed a part of the Hudson's Bay territory, were, like Manitoba, gov- erned by the h'lws of Eughind in force on the 2nd of May, 1670, until they became a part of Canada on the 15th of July, 1870. The Dominion statutes did not for- merly apply to them nnloss specially so declared . North- West Territories Act, 1875, section 77. Now Dominion AcLs apply to them unless inapplicable or otlui wise de- clared: 40 Vict. c. 25, 8. 2; R. 8. C. c. 1, s. 7 On the 2nd of June, 1886, the laws of England as they existed , on the 15th of July, 1870, were introduced into the Terri- tories: 49 Vict. c. 25, s. 3; R. 8. C. c. 50, s. 11; Beg. v. , Nan-e-quis-a-ka, 1 8. G. R. N. W. T. 24 (1889). British Columbia. — The laws of Englfuid as they existed on November the 19th, 1858, wert- introduced ' into this province: C. 8. B. C. c. 69; Reynolds v. Vaug- han, 1 B. C. R. 3 (1872). There was no provincial legis- lation regarding bills and notes prior to the admission of the province into the Dominion, which took plact July 20th, 1871, under the Imperial Order in Council of May 16th, 1871. The Old Laws. — The Act of 1890 havintj repealed all Nomii- previous Dominion and Provincial legishition, and not ^'^'"""^^•* having furnished .any uniform rule for cases not pro- vided for, I'ecoui'se would have been had for tlu's<' to the old law as introduced into each province, and failing any provision applicable there, to the principles of the law on analogous subjects in the reMi>octive provinces. If this rule were adopted, recourse would have been had in the Province of Quebec to the old French law, and in the other provinces to the law of England as it existed at the following respective dates: In Ontario as m'l.b.e.a. — 3 m iiii w BILLS OF EXCHANQE ACT, 18{K). li 1- »:■ on the 15th of October, 1792 ; in Nova Scotia and "New Brunswick, probably as on tlie 3rd of October, 1758; in Prince Edward Island, as on the 7th of October, 1763; in Manitoba as on tlie 15th of July, 1870; in the North-West Territories, for matters arising prior to the 2nd ot June, 1886, to the law of England, as on the 2nd of May, 1670, and for matters arising since the 2nd of June, 1886, to the law of England, as on the 15th of July, 1870; and in British Columbia to the law of England, as on the 19th of November, 1858. ; c :: •; , v;' v Actofi«9i It was no doubt the conclusion that such a conflict would to some extent defeat the uniformity which was declared to be one of the chief objects (j^ the Act, that induced Parliament to pass section 8 of the amending Act of 1891, and to make it retroactive. It might be thought that the Act is such a complete codification of the law regarding bills and notes, that few questions would arise which are not there provided for. It is however quite certain that many questions affecting these instruments directly or indirectly will arise for which no provision is made in the Act. It is not necessary here to do more than barely mention a few of these, such as ** aval " ; the relation of indorsers inter se; the rights and liabilities of parties to bills and notes, once the relation of principal and agent or that of principal and surety is established between them ; whether the insolvency of the acceptor of a bill or the maker of a note makes these instruments mature or gives the holder any rights. Liniitation The Act does not treat of the limitation of actions ofiictionH. QY prescription as affecting bills and notes, but leaves the law of each province to be applied within its bounds. The period is ilve years in Quebec and six years in the other provinces. This diversit}' will in many cases in- volve a question of the conflict of laws as between the different provinces. For its consideration the reader is referred to the notes under section 71, as the rules I X SCOPE OF THE ACT. 19 m fti I .f ► which govern it have much in common with the princi- ples there laid down when there may be a conflict be- tween the law of Canada and that in force in foreign countrieB. The Act applies only to bijs, notes, and chejaues, other^ne^ and not to other negotiable commercial instruments with gtrumenu the exception of section 94, which declares that the pro- visions as to crossed cheques shall apply to warrants for the payment of dividends. It is certain however that the rules laid down as to bills, notes, and cheques, will by analogy be applied in the course of business by bankers and merchants to the other commercial instru ments which have so much in common with them, and some of which are now undergoing the i)roces8 by which customs and usages of trade are crystallized into, and acquire the force of law. A short chapter on other negotiable instruments will be found at the end of the notes on the Act. It is well established that the Imperial Act had the effect of largely diminishing the volume of litigation respecting bills and notes. Indeed, for the past few years it has been phenomenally small. Our experience thus far in Canada leads to the belief that the results will be similar in this country. The decisions in the reports of the Provinc*^ of (Juebec alone during tlie four years that have elapsed since the issue of tlie first edi- tion of this work, are more nunrerous than the aggre- gate in all the English reports during the same period. It is worthy of note, however, that the greater proportion of the Quebec cases belong to the earlier years, and relate to bills and notes issued before the Act of 1890, and which, in consequence, were governed by the old law. From a comparison of the recent decisions in the different provinces it will be seen that there has been very little of clashing in the interpretation of the various provisions of the Act that have come under review. 20 BILLS OF EXCHANGE ACT, 1800. It is difficult to over-estimate the importance to the commercial interesta of the Dominion of not only a uni- form law, but also a uuifonn interpretation and appli- cation of the law. This desirable end has been, no doubt, brought about in a large degree by the fact that we have had the advantage of the decisions of the Eug lish Courts under the Act since its adoption in 1882. On some of the points raised, and on which the judgments of our Courts have been conflicting, we will soon have authoritative decisions from the Supreme Court or the Priw Council. I.' PART L PRELIMINAEY. 1, This Act may be JExchange Act, 1890." c; u ed as "The Bills of Short titi.. Tho Act was assenled to on the 16th of May, but did not come into force until the 1st of September, 1890: «ection 97. It is not retrospective, and that part of il which is new law will not apply to instruments issued before its commencement, except in th*- case of transao tions and matters connected with them after that time; as for instance, the acceptance of such a bill after the flrwt of September, or the protesting of a bill or note issued before, but only dishonored after that date: Max- well on the Interpretation of Htatuteiu, 257, 271; L.eeds and County Bank v. Walker, 11 Q, B. D. at p. 91 (1883). The Imperial Bills of Exchange Act, 1882, 45 & 40 Vict. c. 61, from which the Canadian Act is almost wholly *'opk»d, has been held to be largely declaratory of thi- prior English i.iw. Tlie Master of the Rolls speaks of It as " the codifying Aci which declares what was and is tht- law " : Vagliano v. Bank of England, 2;{ Q. B. D. at p. 248 {1889 ; and Stirling, J., says that it " may be accepted as dedarfttory of the prior law " : Re Bethell, 34 Ch. D. at p. r>«7 (18H7). Ser also to the same <^(fed as declaratory of the old law in Canada. Nevertheless, "''"t,; 22 BILLS OF EXCHANGE ACT, 1890. § 1, there will probably be a disposition on the part of the ~~" Courts to consider it as declaratory, where it is not clear that the law has been actually changed. Intorpre- tutioii. 2. In this Act, unless the context otherwise requires, — "Accept- (a) The expression "Acceptance" means an acceptance completed by dehvery or notification ; This and the following clauses are copied from sec- tion 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 iuterpre tation clause. *' Acceptance " in connection with a bill was former- ly used to indicate the act by which the diawee 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, 2 8tr. 1000 (1735); Clarke T. Cock, 4 East, 57 (1803); Lagueux v. Everett, 1 Rev. de Leg. 510 (1817); Jones v. Goudi.-. 2 Rev. de Leg. 334 (1820). Since the two latter methods have been done away with by legislation, the word has been generally used to d ignate simply the writing on the bill. In the; Act, however, when used without qualification, it is ap- plied only to the cases where the writing and the liability thereunder have become complete and irrevocable by being followed either by delivery of the bill or by noti- fication that it has been accepted: Cox v. Troy, 5 B. & Aid. 474 (1822). " Acceptance" in commercial language is also sometimes used to designate a bill thai has been acce|)ted, but it is not U8«^d in this sense in the Act. "Delivery" here is also used in the technical sense deimed in clause (f) of the present section. " Notiflca tion " is not defined in the Act but is described in sec- tion 21, and may be either written or verbal. 3 Ife PRELIMINARY. 23 ^ The definition and requisites of a valid acceptance § 2. are given in section 17. (6) The expression "Action" includes counter.. Action, claim and set-off ; Tlie word " action " is not often used in tlie Act. It is found in sections 24, 30, 52, 69, 86 and 93. The pro- cedure in the provincial Courts, in which actions on bills and notes are brought, is within the exclusive jurisdic- tion of the local Legislatures. B. N. A. Act. s. 92, s-s. 14. The Dominion I*arlianient has however the right to interfere with this procedure in so far as may be neces- sary to deal fully with the subject of bills and notes. See CuHhing v. Dupuy, 5 App. Cas, at p. 415 (1880). Most of the provinces have special provisions in their stiitutes 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 Prac- tice, quoted with approval by Cockburn, C.J., in Stooke v. Taylor, 5 Q. B. D. 577 (18.80), says: " A aet-otf would a«t.,if seem to be of a different nature from a defence (? counter claim) inasmuch as a set-oft' appears to shew a debt balancing the debt claimed by the plaintiff, and thus leaving nothing due to him; while a counter-claim, it would seem, (jonsists of a cross claim, not necessarily oxtingniKhing or deHtr(>ying the plaintiff's demand. In other words, a set-ott' appears to consist of a defence to the original claim of the plaintitT, a counter claim is the assertion of a separate and independent demand, which does not answer or destroy the original claim of the jtlaintiflf. The right to rely on n set oflf has long existed. The right to set uj) a counter-claim was first given by the Judicatui'e Acts." See also C)atht?rcole v. Smith. 7 Q. B. D 626 (1881); Pellas v. Neptune Marine Ass. Co., 5 C. P. D. 34 (1879). 2i BILLS OF EXCHAVOS ACT, 1890. 1 11 y U 'I '' V §2. Oounter- olaim. TncidentAl demand. UiKler the Imperial and Ontario Judicature Acts there have been e(»iifliotiiig decriHions as to wheth39 urt to pronounce a final judgment i« f^he mi m action, both on the original and on the cross «M<)»." Bet off corresponds approximate}/ to ^iWpMMlllil^ under the civil law. The Quebec flivtl <"4i4»*. A** Hm, says: "Compensation takes j)lace by the tt/M op^itti^ of law between debts which are equally lu{iJi4tt0Ai4 4^*4 demandabh and have each foi- object a sum of Uii/m^f or a certain quantity of indeterminate thingu of the mun^ kind and quality. Ho soon as the debts exist simultj^ neouslj' they are naturally extiiigujsh« ' ^o so far as thelf respective amounts correspond. Counter-claim is analogous *n an Un'SA't' ' ''mand by a defendant in Quebec The Ci/fU' (tt * /^'>. < '•e, Art. 151, says: " The defendant nutf 04 np ttf u, *^ demand any claim of his arising out /// tf^^ same (.^ m^ as the principal demand, and which hf ^##^/» plead >»/ exception. When the principal demand ii* lor 'i> pay ment of a sum of money, the defeuiiunt may aliw> /r*«k»* an incidental demand upon any claim for vonrnt/jf ktitAitf out of other causes; but such an incidental iMMlld ii distinct from and cannot ret^ird the principal Mttoa. The Court, whenev(!r it renders judgment «p«ii botfc demands at the same time, may order comp«w«tioH, il the case admits of it." PRELIMINARY. 25 (c) The expression " Bank " means an incor- § 2.' porated bank or savings bank carrying on business "Bank." in Canada ; The corr»^spondinj^ 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 incorporated bodies. The bill as intro- duced into the Canadian Parliament used the term " Banker " and also adopted the English definition. As the business is carried on in Canada chiefly by incorpo- rated banks operating under ihe provisions of the Bank Act, 5.'l Vict. c. 31, and savings banks operating under 53 Vict. c. 32, both of which came into force on the Ist of July, 1S91, it was determined to restrict to these cor- porations the provisions relating to banking. They will be found in P.'irt ITI. of this A((. H-ctions 72 to Ml in- clusive. As our Parliament refused lO adopt the princi- ple laid down in section 60 of th< Imperial A'' which prot<'cts a banker who has paid a demaij i bill or a <'heque on a forged indorsement, tlie omission of private banks from the definition and their exclusion from the provisions and privileges of the Act is not pf so mu£^ cousr'quence. Formerly private bankers might use the words "bank," "banking company," "banking house," 'bank- ing rfssocl/ition," or '■ banking institution," provided the words " lUft jocorporated ' were added. Now, however, i any private /wraon or body using any of these terms is i guilty of a misdemeanor and liable to a fine not exceed- ing fl.OOO, or to imprisonment for a term not exceeding f) years, or to both 53 Vict. c. 33, 88. 100, JOl. (/I) Tbf^ expression "Bearer" means the person "Bwrer. fn possesBio// //f a bill or note which is puyshle to bearer : . " ' 'a-{ 26 " Bill." " Not*.' "DeliT- •ry." BILLS OF EXCHANGE ACT, 1890. A bill is payable to bearer which is expressed to be 80 payable or on which the only or last indorsement is an indorsement in blank : section 8, s-s. 3. Where a per- son 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 of a chose in action, and the right to have the indorsement of the transferrer: sec- tion 31, 8-s. 4. On obtaining such indorsement he would become the " bearer " of the bill. The bearer need not be the owner of the bill. {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 pro- missory note in section 82. The latter does not include bank notes. A chi^que is defined in section 72 as a bill of exchange drawn on a bank, payable on demand. Where 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. {/) The expression ** Dehvery" means transfer of possession, actual or constructive, from one person to another ; . . A person has oonstrnctive possession of a bill when It is in the actual posseshion of his servant or agent on his behnlf. Delivery does not always impl\ an actual » transfer from one possessor to ajiother. A person who holds a bill for another nujy become the owner of it him- self; a person who holds a bill for himself may be. ome the holder of it for anolher; a per'ion who hoids . bill for one parly may become the holder of It for anolh<»r. In each of these cases there is "delivery" without, any 1 PRELIMINARY. 27 actual change of possessioB, and a sufficient delivery § 2. to comply with the requirements of section 21, and make - — -. the contract of the drawer, acceptor or indorser, as the case may be, complete and irrevocable. Where bankers indorsed a note to a customer, and put it in an envelope with his papers, at the same time making 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, 95 111. 172 (1880). For a definition of the word " person " see the Interpretation Act, R. 8. C. c. 1, s. 7 (g) The expression " Holder " means the payee "Holder." or indorsee of a bill or note who is in possession of it, or the bearer thereof ; ,, ;: ,,,,,.• ^ The holder may or may not be the legal owner. It is sufficient for him to be in possession 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 38. The word holder is used in different senses. It may mean a " holder in duo course " as defined in section 29; i; ' and every holder of a bill or note is prima fade deemed to l,e a holder in due course: section 30, s-s. 2. This latt,^r 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, 8-8. 2. . ^ . . • The word holder also includes one whose possession ♦s unlawful, but who can give a valid discharge to a per- sss 't-'w#-fe''tw.88'':s ''«i\'? "'y"Tx-^f r^"rr^' 28 BILLS OF EXCHANGE ACT, 1890. t't § ^^ son 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 finder of a bill payable to bearer or indorsed in blank : section 38; Murray v. Lard- ner, 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. R. 10 Q. B. per Blackburn, J., at p. 296 (1875); Col- son V. Arnot, 57 N. Y. 253 (1874). The words " Property of the Eastern Townships Bank " stamped on the face of a note, without any sig- nature attached, prove nothing in the absence of any evidence as to how the words were placed there : Demers v. Hogle, Q. R. 7 S. C. 476 (1895). Every " bearer " of a bill within the meaning of the definition in clause (rf) of this section, is the holder of it: Howard v. Godard, 9 N. B. (4 Allen) 452 (1860). mJn?"™^' (7t) The expression "Indorsement" means an indorsement completed by delivery ; Indorsement, as its derivation and meaning \'ould 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. N. 8. 637 (1857). See also Partridge v. Davis, 20 Vt. 499 (1848); Herring v. Wood- hull, 29 111. 92 (1862); Haines v. Dubois, .30 N. J. 259 (1863); Arnot v. Symonds, 85 Penn. St. 99 (1877). In certain cases it may be written on an allonge or on a copy of the bill : section 32 (a). In the Act the word is not applied to this writing alone, but only when followed and completed by the I 1:^ I I' \ PRELIMINARY. m delivery of the bill to another, which makes the contract § 2. of the indorser complete and irrevocable: section 21. ' Delivery is here used in the sense indicated in clause (f) of this section. The requisite^ of a valid indorsement to operate as a negotiation of a bill are set out in sec- tion 21. - % ' ,'■:■-'■'■.-,' , ,:;'/ .^ (i) The expression "Issue" means the first "issue." delivery of a bill or note, complete in form, to a person who takes it as a holder ; " Issue " is used only a few times in the Act. Interest runs from the " issue '' of an undated bill when it is expressed to be payable with interest, without say- ing from what time: section 9, s-s. 3. As to the effect of inserting a wrong date of issue when a bill has been issued undated, see section 12. As to the reissue of a bill, see section 37. Where a bill drawn in one country is payable, negotiated or accepted in another, it may become of importance to determine the place of issue: section 71. A bill is complete in form when it complies with section 3, and a note when it complies with section 82. For the definition of " person," see the note at the end of the present section. {j) The expression "Value" means valuable " vaiue." consideration; The term " valuable consideration " is defined in sec- tion 27. ,./■:' -, • .- .■ (k) The expression "Defence " includes counter- «vDefence" claim. V ^ ■ ,- The word " defence " is used in sections 30, s-s. 5 and 38 (6). For a definition of counter-claim, see note to clause (h) of this section. "Defence" would also in- clude in Quebec an incidental demand by a defendant: C. C. P. Art. 51. ^. 3', BILLS OF EXCHANGE ACT, 1890. rt- § 2. The foregoing definitions are taken from the corro- ~ sponding 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 Cana- dian Act, as we have no general bankrupt or insolvency 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 heira, executors, administrators or other legal representatives of such person, to whom the context can apply according to the law of that part of Canada to which such context extends." " (23) 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 por- tions of the Canadian Act were not prepared iv arranged with the same care as must have characterised the pre- paration of the Imperial Act. In the latter the words defined are all arranged alphabetically. Those copied from it in the Canadian Act follow the same order; but the word " defence " which has been added, instead of being inserted in its proper alphabetical place, comesL • after " value." Another change which is scarcely an improvement, is the insertion of the words " The expres- sion " at the commencement 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. »v4 i 1 J PART II. BILLS OF EXCHANGE. The Act, as its title indicates, relates to Bills of Exciiange, 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. Hectiou T2 defint :^ a cheque ut a bill of exchange drawn on a bank payable on d< vnand, 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 vari- ous sections of Part II. of the Act, where a clause or pro- vision 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 chequijs. Form and Interpretation. 3. A bill of exchange is an unconditional order bj" of k«- in writing, addressed by one person to another, definod. .^1, IMAGE EVALUATION TEST TARGET (MT-3) ^ // ^4^ >" A " ^ % ^#/ .:^ 1.0 I.I 11.25 m |[^ ill Z5 Sitt iM 2.0 1.8 1.4 i4 <^ /} />^%'}, °3 Cy/M w Photographic Sciences Corporation <^ i^ \ % V ""^^ 23 WEST MAIN STREET WEBSTER, NY. 14580 (716) 872-45C3 ."■^ mmm '-iM- rl ■." .illOH*w 82 BILLS OF EXCHANGE. ill i : I l:'''!^- § 3. signed by the person giving it, requiring the per- ~ son to whom it is addressed to pay, on demand Bill of or at a fixed or determinable future time, a sum Exchange defined, 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 clmnge. Probably no definition of a bill of exchange has yet been given which is not open to criticism. The present one is not the most felicitous, as will be seen on comparing it with the second part of the section. c . r* • This definition also includes a cheque and is declar- atory of the former law: McLean v. Clydesdale Banking Co., 9 A})p. 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 per- son to another for the payment of money absolutely and at all events. — Article 2280. It is essential to a till of exchange: That it be in writing and contain the signa- ture 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." The definition in the Code is taken from Kent's Com- mentaries, vol. 3, p. 74. Kent copied it from Bayley on . Bills, p. I, and speaks of it as "a concise, clear and accu- rate production." Blackatone says a bill of exchange is " nn open '<>tter 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 differ- ent definitions given by various authors, see 1 Ran- dolph, S 3, note. In France the law governing bills of exchange* differs in some important particulars from that of Eng- la!id or the United States, as may be seen from the fol- lowing definition taken fiom the Code de Commerce, i ■^ '■;- % POaM AND INTERPRETATION. 33 Art. 110: — *' A bill of exchange is drawn from one place § 3. on another. It is dated. It set^ forth, the sura 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 payable to the order of a third party, or )f the drawer himself. It must state whether it be the first, second, third, or fourth, etc., of the same tenor and content?.." A bill of exchange is sometimes called a draft, and after it has been accejjted, s my accoury., and you will much oblige your humble servant, S.": Little V. Slackford, 1 M. & M. 371 (1828). 4. A note written by the creditor to his debtor at the foot of the creditor's account req\iesting the debtor to pay the account to the creditors agent: Norris v. Solomon, 2 M. & Rob. 266 (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. Spottis- . woode. 4 Ex. 200 (1840). _ , : ..._.„„, 1.1 FORM AND IKTEUPKETATION. "In Writing."— VVritincj, aa defined in the Interpre- § 3. tation Act, R. S. C. c. 1, s. 7 (23), " includes words printed painted, engraved, litho{?raphed, or otherwise traced or copied. ' It is not material whetlier the writing? be in pencil or ink, though as a matter of permanence and security ink is of course preferahle. A writing in pencil is within the meaning o? that term at common hiw, and w^+' -a the custom of merchants: Geary v. Physic, 5 B. ^ L. i>er Bayley, J., at p. 238 (182G). See also Jeffery v. Walton, 1 Stark. 207 (1816); Rymes v. Glarkson, 1 Phih 22 (1809); Dickenson v. Dickenson, 2 Phil. 173 (1814). It is a general rule of law that contracts in writing Cannot be cannot be varied by extrinsic evidence of the intention pZ-lZ '^ of the parties; Barges v. Wickham, 3 B. & S. 6G9 (1863); Taylor, § 1132; or as it is put in tlie Civil Code, Art. 1234, "Testimony cannot in tmy case be received to contra- dict or vary the terms of a valid written instrument.'' According to this rule the contracts of the parties to bills of exchange aud promissory notes as appearing upon the face of the instrument, whether of drawer, acceptor, maker or indorse'*, cannot be varied by parol evidence: Hart v. Davy, 1 U. C. Q. B. 218 (1843); Ewart v. Weller. 5 ibid. 610 (1849): Adams v. Thomas, 7 ibid. 249 (18.-)0); Davis v. McSlierry, ibid. 490 (1850); Hall V. Francis, 4 U. C. 0. P. 210 (1854), Hammond v. Small, 16 IT. C. Q. B. 371 (1858); Armour v. Gates, 8 TI. O. C. P. 548 (1859); Street v.' Beckwith, 20 U. C. Q. B. 9 (1860) ; Moore v. Sullivan, 21 ibid. 445 (1862); Chamberlin v. Ball, 5 L. C. J. 88 (1860) ; Scott v. QiiebtH- Bank, 7 L. N. 343 (1884) ; D«'celles v. Samoisette, M. L. R. 4 S. C. 361 (1888); Inglis v. Allen, 7 N. S. (1 G. & O.) lOi (18')7); Graham v. Gra- ham, 11 N. S. (2 R. & C.^ 265 (18 ;7); Taylor v. McFar- lane, 12 N. S. (3 R. & G. 190 (1878). Thus in an action brought upon a bill or note, it is iiinHtia- not fidmissible to prove that at llu* time of making* it ^"'"''' was agreed verbally that the bill or note shoiild be renewed or not paid at maturity: Bradbury v. Oliver, I 36 BILLS OF EXCHANGE. §3. ?t i -J! s ii i Excep- tions. 5 F. C. O. S. 703 (1839); Diirand v. Stevenson, 5 U. C. Q. B. 830 (1849); Hayes v. Davis, ibid. 39 is not the true date: section 13; or, that the delivery is iii<'onij»le(<' and conditional only so that the contract is not operative: section 21, s-s. 3 or, to impeach the consideration for the contract: Northi field V. Lawrance, M. L. R. 7 8. C. 148 (1891); Abrey v. Crux, L. R. 5 (\ P. 37 (1869); Downie v. Francis! 30 L. C. J. 22 (1885); Fisher v. Archibald, 8 N. 8. (2 G. & ().) 298 (1871); Black v. Gesner, 3 .N. 8, (2 Thorn.) 157 (1847); Gray v. Whitman, ibid. (1857); Lindsay v. Zwicker, 8 N. S. (2 G. & O.) 100 (1870); or to shew that the contract has been discharged by payment, release or otherwise: 3 iLl h' M 3 . FORM AND INTERPRETATION. 37 C&rden v. Finley, 8 L. G. J. 139 (1860); PliilUps v. San bora, 6 ibid. 252 (1862); Gole v. Cockburu, 8 ibid. 341 (1864); Lalonde v. Holland, 10 ibid. 321 (1864); Converse V. Brown, 10 ibid. 196 (1865); namiUon v. Perry, Q. K. 5 S. C. 76 (1894); Moore v. Grosvenor, 30 N. B. 221 (1890); Foster v. Dawber, 5 Excli. 839 (1851); Walker v. John- son, 6 N. Z. L. R. 41 (1880); but see now section 61. In an Australian case, Bank of South Australia v. Williams, 19 V. L. R. 514 (1893), it was held that parol evidence was admissible to shew that plaintiff agreed at the time of the making of the note that the maker should not be liable on it. The authorities chiefly relied upon were Goss v. Nugent, 5 B. & Ad. 58 (1833), and Foster v. Dawber, 5 Exch. 839 (1851). The decision, however, is open to question, especially in view of the principle adopt vd in section 61 of the Act. A contem- poraneous agreement in writing referring to a bill or note b(;tween the same parties may be binding: Jenkins V. Bossom, 13 N. S. (1 R. & G.) 540 (1880); Young v. Aus- ten, supra; Brown v. Langley, 4 M. & Gr. 466 (1842); Sal- mon V. Webb, 3 H. L. Cas. 510 (1852) ; Lindley v. Lacy, 17 C. B. N. S. 578 (1864); Maillard v. Page, L. R. 5 Ex. 312 (1870); but the mere fact that a bill or note refers td^a collateral Avriting or agreement which is conditional in its terms will not affe(;t the bill in the hands of a holder without notice of its contents: Jury v. Barker, E. B. & |E. 459 (1858); Taylor v. Curry, 109 Mass. 36 (1871). "Addressed by One Person to Another."— "Person " here includes any body corporate and polilic, 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 defi- nition is not strictly complied with when the drawer and drawe 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 • note at his option. §3. 38 BILLS OF EXCHANGE. :i|: >}i - 'ft § 3, An instrument regular in form, except that it is not — addressed to any drawee, is not a bill of exchange : For- ward V. Thompson, 32 U. C. Q. B. 103 (1854). The drawee need not be named; it is sufficient that he be describf^d with reasonable certainty, so that the bill can be duly presented to the proper person: section C. " Signed." — The instrument is not a bill of exchange until signed by the drav>'er. He may sign a blank paper which may be subsequently filled up: section 20; or it m.ay 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. g. 301 (1865), Ueg. v. Harper, 7 Q. B. D. 78 (1881); 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: Reg. v. Bowerman, [1891] 1 Q. B. 112; or within section 326 (d), or section 353 of the Criminal Code, 1892. . It may be signed in pencil: Geary v. Physic, 5 B. & C. 234 (1826); Brown v. Butchers' Bank, 6 Hill 443 (1844); Closson V. Stearns, 4 Vt. 11 (1831); Reed V. Roark, 14 Tex. 329 (1855); or with a cross or mark: Noad v. Ohateauvert, 1 Rev. de Leg. 229 (1846) ; Paterson v. Pain, 1 L. C. R. 219 (1851); Thurber v. Deseve, M. C. R. 125 (1854); Anderson v. Park, 6 L. C. R. 479 (1855); Collins V. Bradshaw, 10 ibid. 366 (1860) • 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 Tnd. 19 (1867). Contra, Lagueux v. Casault, 2 Rev. de Leg. 28 (1813), and / nes v. Hart, ibid. 58 (1819), over- ruled. 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 i FORM AND INTERPRETATION. them as their signatures: — initials, a trade or assumed name, a stamp, or a printed or engraved signature. See - Saundorson v. Jaekson, 2 B. & P. 238 (1800) ; Phillimoro V. Barry, 1 Camp. 513 (1808) ; Schneider v. Norris, 2 M. & 8. 286 (1814); Hyde v. Johnson, 2 Bing. N. G. 780 (1836); Jacob v. Kirk, 2 M. & Rob. 221 (1839); Re Chris- tian, 2 Robertson, 110 (1849); Re Hinds, 16 Jur. 1161 (1852); Caton v. Caton, L. R. 2 H. L. 143 (1867); Ben- nett V. Brumlitt, L. R. 3 C. P. 28 (1807); Ex parte Bir miugham Banking Co., L. R. 3 Ch. 6t3 (1868); Mer chants' Bank v. Spicer, 6 Wend. 443 (1831); Weston v. Myers, 33 111. 424 (1864); 1 Randolph, §§ 63, 64; i Daniel. § 74. The signature of a party need not be written with j his own hand; it is suflficieut if it be by some other per- son by or under his authority: sections 25 and 90. As to notarial promissory notes en brevet in Que- bec, where the maker neither signs nor makes his mark, see note to section 82. In the case of a corporation, the seal alone would be sufiicient; but a seal is not necessary or even usual: section 90, s-s. 2. Bills of a company incorporated under Ihe general Act or by letters patent may be drawn by any agent, oflBcer, or servant in general accordance with his powers under the by-laws: B. S. C. c. 118, s. 35; c. 119, s. 76. . : ' The drawer usually signs at the foot of the bill, but his signature may be in the body of it or on any part 80 long as he signs as drawer: Byles, p. 97. i 39 §3. " 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 oec- tions 10 and 11. See these sections and the notes and illustrations under them. Bills are usually made pay- mmm 40 billj: of exchange. § 3, ^ble " on dt'inand " or " at Hij^ht," or a certain tin>e " after date " or " after sight." H .1 If if i' I' V I V' ' ■, 'd: " A sum certain in Money."— A sum is certain within the menninj:i; of the Act although payable with interest, or by stated instalments, or according to a cer- tain rate of exchange : section 9. It must be for money alone ; but it may be in the money of any country: Chitty on Hills, 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. " What is Money ? — It is not necc^ssarily 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 payment 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. G. Q. B., per Harrison, C.J., at p. 408 (1877). Money in Canada wotild be specie or Dominion notes: see R. S. C. c. 30, an Act respecting the currency; and c. 31, 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 thtnn, nor the addition of the words " gold " or '' specie." ITnder the judgment of the Supreme Court of tlie United States in the Legal Tender cases, it makes no difference if a note be made payable in any particular kind of money, as gold or silver, any money obligation can be discharged by legal tender notes: Legal Tender cases, 12 Wall. 457 (1870). This doctrine was re-afflrmed in Dooley v. Smith, 13 Wall. 605 (1871); Bigler v. 'SValler, 14 Wall. 208 (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 pay- able in money. 4»- FORM AND INTEUl'HETATION. ILLUSTRATIONS. The following have been held to be valid bills or notes as being for a sura certain in money: ^ 1. A note made In Canada promising to pay at Chicago "$893, American currency": Third National Bank v. Cosby, 41 U. C. Q. B. 502 (1877). 2. " To P.— Please pay to H. the sum of $1.'{.S.40 for flooring supplied to your buildings on D. road and charge to my account, E.": Hall v. Prittie, 17 Ont. A. R. 306 (189f>). 3. A promise to pay in cash or goods if the holder chooses to demand the former: McDonell v, Holgate, 2 Rev. de Leg. 29 (1818). But see Nos. 3, 4, and 14, post. 4. A note payable in American silver at par, before the pro- clamation declaring such silver uncurrent: Joseph v. Turcotte, 2 R. C. 479 (1871). .5. A note made in Nova Scotia promising to pay a sum of money in Boston "in currency": Souther v. Wallace, 20 N. S. 509 (1S88). Affirmed in the Supreme Court of Canada, where it was held that " It is no objection to the validity of a promissory note that It is for the payment of a certain sum in currency, which must be held to mean United States currency when the note is payable in the United States": 10 S. C. Can. 717 (1889). 6. A note made in New Brunswiclt promising to pay "$ . payable in United States currency": St. Stephen Ry. Co. v. Black, 13 N. B. (2 Han.) 139 (1870). 7. A note payable "in bankable currency": Dunn v. Allen, 24 N. B. 1 (188-1). , •:,......,, ;^,;..w 8. A note payable " in legal tender money ": North-Western National Bank v. Jarvis, 2 Man. r>;{ (1883). The following Instruments have been held not to be valid bills or notes: — 1. A promise to pay £14 " in carpenter's or joiner's work as required ": Downs v. McNamara, 3 U. C. Q. R 270 (1846). 2. A promise to pay £83 in ten days for value received, with a memorandum indorsed, when made, that it was to be " paid by a mortgage": Newborn v. Lawrence, 5 U. C. Q. B. 359 (1848). 3. A promise to pay £2.") " in cash or mortgage," even in case of election to pay in cash: Going v. Barwick, 10 U. C. Q. B. 45 (1857). 41 §3. Si m.u^ii Mm i^ i i j g tf , 42 BILLS OF EXCHAM(}E, §3. iM ! 't' ; ii 4, A promissory note at six months for $4(H), with a memo- randum that It is to paid In lumber, and if not so paid within the time, then in cash: Boulton v. Jones, 10 U. C. Q. B. 517 (1860). n. A proir ise to pay In Kingston, Canada, £72 " with ex- change on Nyw York": Palmer v. Fahnestock, 9 U. C. C. P. 172 (18r.9). 6. A promise dated in the United States to pay hearer " |482 In Canada bills": Gray v. Worden, 29 U. C. Q. B. r)35 (1870). 7. A promise to pay in Cobourg, Canada, f200, in current funds of the United States: Bettls v. Weller. 30 IT. C. Q. B. 23 (1870)— Overruled: Third National Bank v. Cosby, 43 ibid, at p. 69 (1878). 8. A i)romlsft to pay at Auburn, N. Y., |3,301 " with exchange not to exceed one-half per cent.": Saxton v. Stevenson, 23 U. C. C. P. r)03 (IS74). 9. An order to pay ?40(> " with curreni rate of exchange on New York ": Cazet v. Kirk, 9 N. B. (4 Allen) 543. (18t?0). But see now section 9 (rf). 10. An order by A. on B. requesting him to pay K. " the amount of my account furnished," on which B. had written " Correct for say $75 " and had initialled it: Kennedy v. Adams, 15 N. B. (2 Pugs.) 1(52 (1874). 11. " I will pay J. C. $90 for D. V. or otherwise Bt-ttle the sum of $90 for him on a note that he says h« gave J. C. for 1100": Cochrane v. Caie, 10 N. B. (3 Pugs.) 224 (1875). 12. A promise to pay a sum "to collaterally secure the pay- ment of tlie money mentioned in an assignment of mortgage": McRobble v. Torrance, 5 Man. 114 (1888). . ; 13. An ordrr retiuirlng payment in good East India Bonds: Buller, N. P., p. 208. 14. -^ n order to pay " in cash or Bank of England notes " : Ex parte Imeson, 2 Rose. 225 (1815). This was prior to 3 & 4 Wm. IV., c. 98, 8. 5, making these notes a legal tender. 15. An order to pay the proceeds of a shipment c ' goods, value about £2,000: Jones v. Simpson, 2 B. & C. 318 (IK^S). 16. An order requiring payment of " the balance du to me for building the Baptist College Chapel": Crowfoot v. Gurney, 9 Blng. 372 (1832). 17. A promise to pay £095 in four instalments, 3 of £200 each, and the balance, £95, to go as a set-off for an order: Davies v. Wilkinson, 10 A. & B. 98 (1339). . ;; v ^1 ^ :'i!'l: yim-iiJViii^iXi&iiSrti^,.,^^ FORM AND INTKIirilKTATION. 18. A promise to pay in current bank bills or notes: McCor- mick V. Trotter, 10 Serg. & R. IM (1S2;{). 19. A promiBe to pay " in office notes of a bank ": Irvine v. Lowry, 14 Peters (U. S.) 293 (1840), 20. A promise in New York to pay "In Canada currency": Thompson v. Sloan, 23 Wend. iN. Y.} 71 (1840). See also notes and cases under section 82. "A specified Person." — The person to whom or to whose order a bill is made payable is caHed the payee. As to th«^ necessity for the payee being 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 spe<*ified 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 perso*^ .except chartered banks are prohil)ited under a penalty of |4()0 from issuing, making, drawing, or indorsing any bill, note, or cheque intended to circulate as money; and such intention is presumed if the sum is less than $20, : and the instrument is payable to bt?arer, or at sight, or on demand, or wi an 30 days, unless piven by the maker directly to h.s immediate cn^ditor: Bank Act, 53 Vict. c. 31, s. CO. Companies incoi-porated by special Dominion Act, to which the general Act applies, or by letters patent, are prohibited from issuing a note pay- able to bearer or intended to circulate as money: B. S. C. c. 118, s. 35; c. 119, s. 76. Companies incorporated by special Acts or by letters patent in most of the pro- vinces are subject to a like disability: R. S. O. c. 156. s. 33, s-s. 2; c. 157, s. 59, s-s. 2; R. 8. Q. Arts. 4689 and 4746; R. S. N. S. c. 79, s. 67 ; R. S. Man. c. 25, s. 62 ; Rev. Ord. N.-W. T. c. 30, s. 80. Thej may apparently 48 fil'li; •I!- 'V.:S-f'--^>r.\ F.:^.«n--v,'ii-fj?K^-*| 44 BILLS OF EXCHANGE. m ■ A 1 '. 1 «i ■ I! f ' it i l! fl!^ !•■; § 3. accept bills payable to bearer, except such as come within the foregoiup: prohibition in the Bank: Act. In France a bill cannot be drawn payable to bearer, but 1 lust be to the order of a third party or of the drawer himself: Code de Com. Art. 110. When in- strument is not Huch b'll. 2. An instrumerit 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 e^ichange • Imp. Act, s. 3 (2). "Excpt as hereinafter provided.' -These words are not in the Imperial Act, and it ia doubtfnl if they serve any usefnl jmrpose. 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 ex- change (section 9 (d) ), which was assumed not to be for a sum certain: Commons Debates, 1880, 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 recognized as bills by the Act which do not fairly come v/ilhin the definition in the first Clause of this section are those in which the drawer and the draw(^ are the same person, winch, strictly speaking, are not addressed by one person to another. The use of the word " conditions " here is nt : the most felicitous, in view of t'\e use of " unconditional " in the definition; but it is 'he order to pay that must be unconditional. Tho following are examples of instrument held not to be valid bilis or notes on account of their ^/ideriug or promising sbme act to be done in addition to the pay- ment of money. .,; ILLUSTRATTONS. 1. An Instrument in the form of a note, with the following clause added: " This nota to bo held as collateral security ': HaU V. Merrick, 40 U. C. Q. R. 560 (1877). I H FORM AND INTERPRETATION. 45 % 2. A note payable in 3 years, with the following words artded: e g "This note Is given as collateral security for a guarantee of _J [ $5,(XK) given to John Sutherland by Alexander Sutherland"; Sutherland v. Patterson, 4 O. R. Mio (1884). '^. An instrumert in the form of a promissory note with the following clause added: " The title and right to the possession of the property for which this note is given shall remain in (tae vendors) until this note is piiid"': Dominion Bank v. Wiggins, 21 Ont. A. R. 275 (1894); Imperial Bank v. Bromish, 16 C. L. T 21 (189r>). Contra, Merchants' Bank v. Dtinlop. 9 Man. 623 (1894); Chicago Railway Equipment Co. v. Merchants' Bank, 136 U. S. 269 (1890). 4. A promise to pay a certain sum, half iu cpsh and hr.;f In goods: Gillin v. Cutler, 1 L. C. J. 277 (18.57); Burnham v. Watts, 4 N. B. (2 Kerr) 377 (1844). ^ » 5. An instrument promising to pay £'J5 for a mare by Instal- inents, 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, L.. C. R. 221 (1859). . 6. An order on defendant to pay £"», " half cash and half goods": Melville v. Beddell, Stevens' N. B. Digest, p. 95 (18.'12). 7. A promise to pay a sum of money on a particular day, and deliver up horses and a wharf: Martin v. Chauntry, 2 Str. 1271 (1747). 8. A promise to pay £05, " and also all other sums which may be due": Smith v. Nightingale. 2 Stark. 375 (1818). 9. A promise to pay £1,2W, " ihis being intended to stand as a set-off to a legacy": Clarke v. Percival. 2 B. & Ad. P)7''t the same from my share of the profits of the partnership": Munger v. Shannon, 61 N. Y. 2.51 (1871). 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 indt>rse £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 £,'^,374 " against credit No. 20, and place It to account as advised": Banner v. Johnston L. R. 5 H. L. 157 (1871). 0. An oriicr to pay $200 out of moneys vhlch would become payable on the completion of a contract: ¥jX parte Sbellard, L. R. 17 Eq. 109 (1873). Disapproved in Buck v. Robson, 3 Q. B. D. 686 (ir-8). m H M 48 BILLS OF EXCHANGE. R Q 10. An order for £7,0(K), " which is on account of dividends ! and which ciiarge to my account according to a registered letter . I have addressed to you ": Re Boyse, Crofton v. Crofton. 33 Ch. D. (il2 (18S(3). 11. "To the trustees of the estate of T. — Please pay to C. the sum of £208, being the amount of two pi-omissory notes given ■■■•. by me to him for meat. Jan, 20th, 188(i. A. B.": Camp v. King, , 14 V. L. K. 22 (1887). Bill not 4. A bill is not invalid by reason — invalid for «i)ecified. (a) That" it is not dated : Imp. Act, s. 3 (4) (a). A bill without a date is irregular, although not invalid. If issued undated and payable at a fixed period j 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, 3 B. & P. 173 (1802); Giles v. IJourne, M. & S. 73 (1817); and proof of this may be made by parol : Davis - V. Jones, 17 C. B. 025 (1856). 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 (53. In France a bill must be dated or it is invalid: Code de Com. Art. 110, (6) That it does not specify the value given, or that any value has been given therefor Imp. Act, 8. 3 (4) (6). ,,^..^ ,,..„, ... Formerly the words " vnlue received " or some words implying consideration were necessary: Byles, p. 05; Rnndolph, § 159. By ihv Civil Code of T.owei Can- ada, Article 2285, wh«!n a bill ctmtains the words " value? received " value for the amount of it is presumed to have been received on the bill and upon the indorse- ments thereon: Larocque v. Franklin (bounty Bank, 8 L. C. R. 328 (1858); Walters v. Mahan, 6 L. N. 31(J (1883). Even where the words are in a bill, ]>arol eri- dence may be received to prove the contrary: l):ivi8 r. ^\! V FORM AND INTERPRETATION. 49 McSherry, 7 U. C. Q. B. 400 (1850) ; Ba:itor v. Bilo- § 3. dean. Q. L. R. 268 (188M); Abbott v. Hendricks, 1 M. & G. 791 (1840). In an accepted bill, payable to the order of the drawer, those 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 r ' imply value received by the drtiwer: Grant v. Da Costa, 3 M. & S. 351 (1815). In England these words have long beeii unnecessary: Hatch v. Trayes, 11 A. & E. 702 (1840). * (c) That it does not specdfy the place where it is drawn or the place where it is payable: Imp. Act, s. 3 (4) (c). , y- The place where a bill is drawn is usually placed ; at the top before the date. If no place is specified tbe holder may treat it as an inland bill, even although drawn abroad: s«>ction 4. In France the place must be stated on the bill: Code de Com. Art. 110; Nouguier, §§ 93-105. If no place of payment is specified it is payable gen- erally. It may be payable at either of two places at the option of th^ holder: Pollard v. Herries, 3 B. & P. 335 (1803); Beeching v. Gower. Holt N. P. 313 (1816). An acceptance may name the place of payment: section 19 (2) (a). A change in the place of payment or the addition of a place of payment without the acceptor's assent is a material altj-ration, and may render the bill void: section 63, sf. 2. In France the place of i)ayment must be different from that whei-r it is drawn, and tJiere must be a. possible rate of exchange between the two places: Code de Com. Art. 110 j Nouguier, §§ 93-105. The tendency in France is towards a relaxation of this rule. ^ 4. An inland bill is a bill which is, or on the inland »Kd face of it purports to be (ti) both drawn and payable biir«T m'l.b.k.a.— 4 I 60 BILLS OF EXCHANGE. § 4. within Canada, or {b) drawn within Canada upon "~~~~ some person resident tlierein. Any other bill is a Imp. Act, s. 4 (1). foreign bill Inland and fortign bills. This clause is taken from the Imperial Act, the only change being the substitution of " Canada " for the " British Islands.'' Prior to the passing of the Act, the different provinces were, as a rule, considered to be for- eign to eacli other; but a note made in Upper Canada, payable in Montreal, was held to be payable generally under 7 Wm. IV. c. 5, and treated as an inland note: Bradbury v. Doole, 1 U. C. Q. B. 442 (1841). In a later case, however, a similar note was treated as a foreign note nnd proof of the Lower Canadian law received : McLellan v. McLellan, 17 U. C. C. P. 10!) ^866). Tn Quebec the Civil Code, Art. 2336, provided that bills drawn upon persons in Upper Canada, or any other of the British North American Colonies, and returned under protest for non-payment, were subject to four per cent, danmges. Most of the other provinces had similar provisions. See Con. 8tat. U. C. c. 42, s. 9; Kev. Stat. N. S. (3rd Series) c. 32, s. 1; 1 Rev. Stat. N. B. (1854) c. 110, s. 1; and Acts of P. E. I., 17 Geo. III. c. 5, s. 2. These damages were abolished by the Dominion Act, 38 V. c. 19. and only the amount of the bill, with the cost of noting and protest, interest, cxc])ange and re-ex- ^hange, were to be rccovoratde after llie 1st of July, 1875, on a bill drawn upon any person in the Dominion or Newfoundland, f The following are inland bills: 1. A bill drawn in Canada upon some person resi dent there and payable in Canada. 2. A bill drawn in Canada upon some person abroad but payable in Caniida. 3. A bill drawn in Canada upon some person resi- dent there but payable abroad. '; ■.!.■■ I FORM AND INTERPRETATION. 51 4. A bill which on its face purports to come with- in any of the foregoing classes but which was actually drawn abroad though dated in Canada. The place of payment in any of the foregoing casee may be detei mined by the acceptance: section 19, 2 (a"i. If no place of payment is specified in the bill or accept- ance it is payable at the address of the drawee or ac- ceptor: section 45, s-s. 2 (d) (3). Forms of inland and also of foreign bills will be found in the Appendix. It is sometimes of importance to determine whether a bill is an inland or a foreign one. The latter, when dishonored in any part of Canada by non-acceptance or non-payment, must bo protested: section 48. In any other province than Quebec an inland bill need not be protested: section 51. The drawer, acceptor, and each indorser of a bill is a several and distinct contracting party, and the rights, duties, and liabilities of these parties respectively may vary according to the law of the place of issue, or of the place where such con^iact was made, or where it is to be performed. Cn this point see section 71. As to inland and foreign promis- sory notes, see sect?* -« 82, s-s. 4, and 88, s-s. 4. In the United Ovates the different States are con- sidered to be fot'eign to each other for the purposes of bills of exchange: Daniel, § 9. §4. ILLUSTRATIONS. 1. On a bill drawp in London. England, on defendant in Toronto, but accepted by blm In London and payable there, plaintiff was allowed the current rate of exchange on the day it became due, and not merely 24s. 4d. in the f sterling: Greatorex V. Score, 6 U. C. L. J. 212 (1860). 2. A bill in blank signed and endorsed in Ireland, sent to England where the blanks were filled up ard ^he bill nego- tiated there, is a foreign bill: Snaith v. Mingay, 1 M. & S. 87 (1813). 3. A bill written and accepted In England and sent abroad to the drawer, who signed it there, is a foreign bill: Boehm v. Campbell, Gow 40 (1818). 62 §4. If not noted as foreign. BILLS OF EXCHANGE. 4. A bill drawn In London upon Brussels and accepted there, - but payable In London. Is an inland bill: Amner v. Clark, 2 C, M. & R. 4«',8 (1835). 5. A bill payable to order, drawn, accepted and payable in. England, but Indorsed in France, is an inland bill: Lebel v. Tucker, L. R. 3 Q. B. 77 (18ti7). 0. A bill drawn and payable in England upon a Bostpij house, and accepted in England by a partner of the Boston house, who was there at the time, held to be a foreign bill, as If accepted in Boston: Grimshaw v. Bender, ). 7. A bill drawn in one State and payable in another, is a foreign bill, although all parties are citizens of one State: Graf- ton Bank V. Moore. 14 N. H. 142 (184;}). v , ; , ^ ^ 2. Unless the contrarj^ appears on the face of the bill, the holder may treat it as an inland bill. Imp. Act, s. 4 (2). This is givea by Chalmers as new law. He says, p. IG: "The result appears to be that though a bill pur- ports to be a foreign bill, the holder may nevertheless, show that it is in fact an inland bill for the purpose of excusing protest; while if it purports to be an inland bill, though really a foreign bill, he may treat it at his option as either." The former part of this quotation appears to be clear; not however from sub-section 2 of section 4, but froui the flrst part of the section, wiiich dechares that to be an inland bill which is drawn and payable within Canada, or is drawn within Canada upon some person resident therein. If actually drawn within Canada it may be treated as an inland bill although djited abroad. The second part of the above quotation does not ap[iear to be authorized by any part of the seiition. The most obvious meaning of subsection 2 would appear to be the Kime as that part of the flrst subsection which declares that to be an inland bill which on its face purports to be drawn within Canada although actually drawn FORM AND INTERPRETATION. 53 iS^i abroad, and which meets the other requisites of an in- § 4^ land bill. ~ 5 A bill may be drawn payable to, or to the if different '-' • "^ 1 ./ parties u> order of, the drawer ; or it may be drawn payable bin are to. or to the order of, the drawee : Imp. Act, i^rHon. s.5(i). Usually there are three distinct parties to a bill, . the drawer, the drawee and the payee. In the above cases there are only two parties. In the first instance the drawer and the payee are the same person. This is a form of bill or draft long in use, and frequently adopted: Butler v. Crips, 1 Salk. 130 (1704). Such an instrument may be treated either as a bill of exchange or as a promissory note: Golding v. Waterhouse, 16 N. B. (3 Pugs.) 313 (1876). In the second instance the drawee and the payee are the same. This is a more un- common form, and may be used when the drawee acts for himself, and also as agent for another person in- terested in the bill, or when he acts as agent for two different persons: Tardessus, Droit Commercial, § 339. In this case he is, in the language of Pothier, at the same time, acceptans et praesentans: Change, No. 19. In such cases the bill can not be enforced until the acceptor has endorsed and delivered it to some other person: Reg v. Bartlett, 2 M. & R. 362 (1841); Holds- worth V. Hunter, 10 B. & C. 449 (1830); Witte v. Wil- liams, 8 S. Car. 25JO (1876). The Civil Code does not in terms recognize as a bill an instrument payable to the order of the drawee: see Art. 2282. Nor does the Code de Commerce: see Ait. 110. 2. Where in a bill drawer and drawee are the Option o^ ■ IT • n • holder same person, or where the drawee is a fictitious in case person or a person not having capacity to contract, mmmmmmm mmmm 54 BILUS OF EXCIIANQE. § 5. the holder may troat the instrument, at his option, either as a bill of exchange or as a promissory note. Imp. Act, s. 5 (2). Fictitious drawee. Where the drawer and the drawee are the same person notice of dishonor is dispensed with as regards the drawer: section 50, 2 (c). Where a bill is drawn upon a fictitious person or a person not having capacity to contract by bili, present- ment for acceptance is excused: section 41, 2 (a); also presentment for payment: section 46, 2 (ft). Notice of dishonor is, in such cases, dispensed with as regards the drawer: section 50, 2 (c) — and also as regards an in- dorser who was aware of the fact at the time he in- dorsed the bill: section 50, 2 (d). For instance, a bill is drawn upon a fictitious per- son, or a minor, or a corporation having no power ta incur liability ou a bill, or a married woman having no separation of property from her husband in the Pro- vince of Quebec and not a trader or merchande publique» The holder may treat it as a note, and without present- ing or protesting it, sue the drawer or such indorser. V m I ILLUSTRATIONS. 1. A bill is drawn upon a fictitious person and negotiated by the drawer. The holder may treat it as a note of the drawer and need not prove presentment or notice of dishonor: Smith V. Bellamy, 2 Stark. 223 (1817). 2. An instrument in the form of a bill, drawn upon a bank,^ by the manager of one of its branch banks, by order of the directors, may be treated as a note: Miller v. Thompson, 3 M. & G. 576 (1841). 3. The directors of a joint stock company draw a bill in the name of the company, addressed " To the Cashier." The holder may treat it as a note by the company: Allen v. Sea, F. & L. A. Co., 9 C. B. 574 (1850). 4. Although instruments where drawer and drawee are the same persons are promissory notes rather than bills, yet where 1« ■MXM^19Mamay(iis9*mHm»m^ Zfr 10 FORM AND INTERPRETATION. 55 the Intention to give and receive them as bills of exchange is & Q^ clear, both the holders and the parties may treat them accord- 1— Ingly: Wlllans v. Ayers, 3 App. Cas. 13a (1877). 5. A bill drawn by a party upon himself is a bill of exchange in the hands of an indorsee: Randolph v. Parish, 9 Porter, 70 (1839). 6. Where the president of a company drew upon its treasurer for the amount due the payee as contractor, the holder may treat it as a draft of the company on itself or as a note of the com- pauy: Fairchlld v. Ogdensburgh R. R. Co., 15 N. Y. 337 (1857); approved in Mobley v. Clark, 28 Barb. 391 (18G8). See Taylor v. Newman, 77 Mo. >7 (1883). 6. The drawee must be named or otherwise Drawee to indicated in a bill with reasonable certainty : Imp.*'*"*™*"* Act, 8. 6 (1). The name and address of the drawee, preceded by the word " To," are usually placed at the lower left hand corner of a bill, but they may be placed on any part of it provided it be clear to whom the bill is meant to be addressed. The certainty is required in order that the payee may know upon whom he is to call to accept and pay the bill; iind in order that the drawee may know whether he would be justified in accepting and paying the bill on account of the drawer. At com- mon law the name of the drawee is not necessary, if he be otherwise sufficiently indicated. Blanks may be filled up in accordance with the provisions of section 20, — even after acceptance: section 18 (a). If the drawer be a fictitious person, see section 5, s-s. 2. If not address- ed to a drawee, but accepted, is it a bill of exchange? See Peto v. Reynolds, 9 Ex. 410 (1854) ; 11 Ex. 418 (1855). ILLUSTRATIONS. 1. Where the word " At " is placed before the name of the drawee instead of "To," it Is sufficient: Shuttleworth v. Ste- phens, 1 Camp. 407 (1808). 2. Where the words " payable at No. 1 Wilmot Street, Lon- don," appeared on a bill in the place where the name of the 56 BILLS OF EXCHANOE. .% K g drawee Is usually written, and it was accepted by defendant, ' who lived there, held sufflclent, and M. liable as acceptor; (Iray V. Milnor, S Taunt. T.'Ut (IHlt)). 3. A bill addroBsed " To the agent and owners " of a certain ship without naming thera is a sufficient Indication of the drawee: Taber v. Cannon, M Mete. 45(5 (1840. 4. A bill addressed " To the Steamer Dorrance and owners " Is a Hufncient designation: Alabama Coal Mining Co. v. Bra a- ard. 35 Ala. 476 (1860). ■«'•,' If there 2. A bill may be addressed to two or more than on.'. (Irawoes, whether they are partners or not ; but an order addressed to two drawees in the alternative, or to two or more drawees in succession, is not a bill of exchange. Imp. Act, s. 5 (2). • WlitT*' a bill is addressed to two or more drawc^es, it must he accepted by all or it is a qualified acceptance: section 19, 2 (rf). But those who accept are bound even if the others do not. A bill might formerly be addreBa«od to two drawees in the alternative: Anon. 12 Mod. 447 (1701), where an instrument directed to' A., or in his absence to B., and ; beginning, "Gentlemen, pray pay," etc., was lield by Lord Holt to be a bill of exchange. If the biH is ad dressed to two persons, " or either of them," acceptance . by either is a. snflBcient compliance with its mandate. Thomson on Bills, 212. The referee in case of need sometimes named in a bill, as one to whom tlie holder may resort in case it is dishonored by tlie drawee, is not considered an alternative or successive drawee : section 15. Certainty required as to payee. 7. Where a bill is not payable to bearer, the payee must be named or otherwise indicated there- in with reasonable certainty : Imp. Act, s, 7 (1). In the definition of a bill the payee is spoken of.aa " a specified person " : section 3. He should be clearly % :< FORM AND INTKHI'miTATloN. 8. An instrument which was matlo payable to or 6T spociflod 8o that tho drawee, when he accepts, ma:; 'e mentioned l>y name; it iH sufllcient that he be indicated ho that lie can be cioarly identihed. yVs to indication by office see notes to the foll«.winj; flub-8ectiv;;::'v, v, -.■;.<,:. ..^v; '. ILLUSTRATIONS. 'f^ , 1. An order to pay to the order of the trustees of an insol- vent firm, without naming them, 1b sufficiently certain: Auidjo V. McDoiigall, ."{ U. C. O. S. 1!«) (18.'{:{). 2. A note payable to the order of .1. B. G., for the use of VV. M„ la a promissory note: Munro v. Cox, 30 U. C. Q. B. JMW (1870), ;{. A note payable "to the estate of D." is valid: Dominion Bank v. Beacoclt, U C. L. T. 2.')2 (1880); Lewlnaohn v. Kent, 87 Hun (N. Y.) 340 (1895). ; ' 4. A note payable to or order cannot be recovered by the person to whom it was giv«n either as payee or bearer, with- out inserting his name in the blank as payee: Mutual Safety Ins. Co. V. Porter, 7 N. B. (2 Allen) 2;?0 (18ni). 5. If no one be named or definitely referred to as payee, the Instrument is not a valid bill: Gibson v. Minet, 1 H. Bl. mj (17!»1)- Bnthoven v. Hoyle, 13 C. B. :'-:\ (1853). C. Where the bill was made payable to or order, evi- dence to show that C. was intended to be the payee v.as held to be inadmissible: Rex v. Randall, R. & R. Iti.". (1811). 7. Where a bill was made payable to the order of J. Smythe, evidence was admitted to show that T. Smith was ihe person Intended: Willis v. Barrett, 2 Stark. 20 (181(!). See Soares v. Glyn. 8 Q. B. 24 (1845); Jacobs v. Benson, ,'iO Me. 132 (1855). mi\ order," the blank never having been filled in, must be construed 'W^ m m mm -;"f4i:-.- 58 §7. BILLS OF EXCHANGE. as meaning that it was payable to " my order," that la, to the order of the drawer, and having been Indorsed by him, it wad a valid bill of exchange: Chamberlain v. Young, [1803] 2 Q. B. 2(.)6. 0. A note payable " to t le order of the inrtorser " was held ■ to be valid, and payable to any liolder who might Indorse It: Unlied States v. White, 2 Hill (N. Y.) 59 (1811). 10. An instrument payable "to the estate of L., deceased." held not to be a note: Lyon v. Marshall, 11 Barb. (N. Y.) 241 (1851). If prtyrtbie 2. A bill may be made payable to two or more wl^ore payees jointly, or it may be made payable in the to hokio7 alternative to one of two, or one or some of several ofottit.'. py^ygg^^ ^ \y\\i Y^^^y r^igQ \)Q made payable to the holder of an oflice for the time being : Imp. Act, s. 7 (2). ,,.,._. ,-,-,.,,. ,.|^. ^.,,. CluUmers says "this sub-section ma+'^rially alters the law." From the illustratioiis given below it will be setn that the decisions on the subject have been con- Hicting both in the United States and in Canada, and also that they were not absolutely uniform in England. The second sentence would move naturally belong to the first sub-section, but in this the Imperial Act i» followed. ,: :-'■■:■--:■ . • ' ILLUSTRATIONS. 1. A promise to pay "to E. S. R. or J. P., his guardian," is not a promissory nota: Reed v. Reed, 11 U. C. Q. B. 2(5 (185;J). 2. A promise *o lay "A. B., treasurer, etc., or his successor or successors in office," la a valid note: McGregor v. Daly, 5 U. C. C. P. 120 (1855). 3. A note payable to A., " or to his wife and no other person," is a good note and the same as If payable to A. alone: Moodie v. Rowatt. 14 U. C. Q. B. 273 (la'iC). 4. A rromiso to pay J. P., " treasurer of the building com- mitte.? of St. John's Church, or his successor duly appointed," is a. promissory note: Patton v. Melville. 21 U. C. Q. B. 203 (18tU). I. ^'^\-^: FORM AND INTERPRETATION. 59 ■.'ij "^■S'i ■'■1 ■■ ^^^M.r:l ■..;.' 1^Bp~ t '^K| .' i B 5. A note payable to A., " or hla 1 elrs," is not a promissory c I7 note: Doak v. Robinson, 12 N. B. (1 Han.) 270 (1868). J! L (). A promlso to pay to " W. & D., stewar-.'.esses for the time being of tlie P. D. Society, or their successo e in office," held to be a promissory note: Rex v. Box, Taunt. 325 (1815). 7. A promise to pay " to A. or to B. or to C," is not a note: Blanclteahagen v. Blundell, 2 B. & Aid. 417 (1819). 8. A promise to pay " to the trustees acting under the will of the late W.,' held to be a promissory note: Megginson v. Harper, 2 C. & M. 322 (ISIM). y. A promise to pay the secretary or treasurer for the time being of a society is not a note: Cowle v. Stirling, 6 E. & B. 333 (1850). 10. A promise to pay " to the W. M. P., or order, or the najor part of them," is a good note: Watson v. Evans, 1 H. & (',. 602 (1863). 11. A promise to pay "to the trustees of the Wesleyan Chape], Harrogate, or their treasurer for the time being," Is a good note: Holmes v. Jaquea, L. R. 1 Q. B 376 (1866). See Auldjo V. McDougaU, 3 U. C. 0. S. 199 (1883). 12. A note In the alternative is payable to, and may be sued on by '^ither one of tho payees: Spauldlng v. Evans, 2 McLean, 139 (1840). 13. A note payable to A. B., " or heirs," held to be a 'promis- sory note: Knight v. Jones, 21 Mich. 161 (1870). 14. A promise to pay a sum " to A. or B." is cot a t>ote: Carpenter v. Farnsworth, 106 Mass. .Wl (1871). 15. A note payable to the order of " A. B. trustee for C. D.." Is a good promissory note: Downer v. Read, 17 Minn. 41)3 (1871). 3. Where the payee is a fictitious or non-exisfc-n payee ing person, the bill may be treated as payable tolfxrstrnK. bearer. Imp. Act, s. 7 (3). « Formerly hi Eiinlniid it was only nn apninst a party to the bill %vho know that the payee was a flctit'- 0118 person, that a bona f1ayable to the order of a fictitious person might be treated as payable to the order of any one who should indors(» it, or, in other words, as iudors- ftble by the bearer. Thougii the bill may be payable to bearer, it Is clear that a holder who is party or privy to any fraud acquires no title. What the Act has done f 1 i ■I ■I 4 FORM AND INTERPRETATION. 61 1^! ■:..i : i is to (iotlare that the mere fact that a bill is payable § 7, to a fictitious person is not of itsf-)f a bar to proce.din'i; — — against parties who were ignorant of the fact." Vagliano's Case. — The case of Vagliano and the Bank of England above mentioned is the most .striking one that has arisen nnde' fhe Imperial Act, and is of special interest not only on account of the number and magnitude of the forgeries in question, but also on account of the skilful numner in which they were per- petrated, and the great diversity of judicial opinion upon the questions of law involved. The following are fhe leading facts of the case. Viigliano, the plaintiff, was a London merchant, who kept his account with the Bank of England and made his bills payable there. These Cuch year numbered about 4,000 and iimounted to three or four million ]>ounds. Among his foreign correspondents was Vucina, an Odessa, merchant, who for several years had drawn a large number of bills upon him, several of them being to the order of C. Petridi & Co., of Constantinople. During 1887, up to the 12th of October, Vucina's drafts upon him numbered over 700, aggregating about £:MO,000. Yagliano had a clerk named Olyka, who committed the forgeries in question. His plan was as follows:— He would forge Vucina's name to a draft in favor of C. Tetridi & Co., place it among the genuine bills left fo/ acceptance, forge a letter of advice from \'ucina, procure Vagliano's acceptance, have it entered among the bills ])ayal>le, and then steal the bill. The bank would be notif'ed in duo course, and Olyka would forge the indorsement of O. Petridi & Co., present the bill, and get tlie money. Be- tween the 4th of February, 1SS7, and the 12th of Octo- ber of that year when his forgeries were discovered, he had forged no less than 43 such bills, which aggre- gated £71,500. The bank charged these bil... to Vngli a no, and the action was brought by him to recover that amoimt. 62 BILLS OF EXCHANGE. § 7. The case was tried before Charles, J., without a jury- It was conceded that by section 54 of the Act, inappeaL Yjjgjj.jjjj^^ was precluded from denying the genuineness ; of the signature of Vucina. The questions remained whether the case came within subsection 3 of section 7, :, and what effect the conduct of tlie parties had upon i their respective rights and liabilities. The decision was in favor of the plaintiff, the judge holding that C. Tetridi & Co., the payees, were not " fictitious or non-existiug persons" within the meaning of this subsection, and the bank wa.« not entitled to treat the bills in question as payable to bearer; that Vagliano had not been guilty of negli gence immediately connected with the transactions, so as tc disentitle him to recover; and that on the author ity of Robarts v. Tucker, 1(5 Q. B. 560 (1851), embodied in section 24 of the Act. the bills being payable to order the bank had no right to pay to one who had not become the holder by genuine indorsement: 22 Q. B. D. 103 ;. (1888). :■;..,.,- ,,.•..;.;,,: --W-- • •; Th.-^ case went to the Court of Appeal, where it was heard by six judges. The decision of Charles, J., was affirmed by the majority, Lord Esher, M.R., dissenting: 23 Q. B. D. 243 (1889). It was held thai although the instruments in question might not really be bills of ex< hange 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 hills; that the payees were not fictitious or non-existing, but a real and existing firm; that '* fictitious ' meant fictitious to the knowledge of the partly siuight to be charged upon the bill; and that the bank was not justified in paying upon a forged indorsement. LorJ Esher was of opiaion that the instruments were not bills of exchange at all, l)ut +hat Vagliano was estopped from saying that they were not bills; that the Bills of Exchange Act altered th»» law so that it was not necessary that Vagliano ■^(pFTJraFPW^i-^'rt-^'. rsTT^ FORM AND INTERPRETATION. 63 should know that the ])ayees v/ere fictitious in order to malce the bills payable to bearer, and that in this case the payees were really fictitious and the bank conse- ijueutly justiiied in paying the bills to the bearer. In the House of Lords these decisions were reversed by the Lord Chancellor, Lords Selborue, Watson, Her schell, Macuaghten and Morris, while Lords Bramwell and Field were in favor of the plaintiff: [18!)!) A. C. 107. The majority however did not agree in the grounds upon which the judgment should be based. Lords Wat- son, Herschell, Macnaghten and Morris held that this sub section applied, an opinion in which the Lord Chan- cellor reluctantly concurred, while Lord 8elborne thought that the payees were not fictitious or non- existing. The Lord Chancellor and Lord Selborne thought that as Vagliano had accepted the bills, and liad advised the bank that he had done so, and had seen the payments ertered in hii< pass-book, he was estopped from claiming that the payments were unau- thorized, an opinion in whiv-^h Lords Watson ani Mac- naglitt'U alone partly concurred. The divergence of opinion was such that it would seem almost to justify the somewhat caustic ''emark of Lord Brarawel! regard- i.ig 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 th most abstract form — namely, a banker cannot charge his customer with the amount of a bill [lald to a person who had no right of action against the customer, the acceptor. But I think the head-ni.io which will represent the decision of your lordshijis should be in a strictly concrete form slating Ihe facts and saying that on them it was held that judg- ment should be for the appellants." This clause as applicable to a promissory note was considered in the City Bank v. Rowan, 14 N. S. ^V. II. (Law) 120 (1803). a case under the New South Wales Act, which is identical with the English and §7. Final judgment. An A\!8- tralian ua«e. fiSMiifmtm^tiii^, *HW TMntMtiktn.: 64 BILLS OF EXCHANGE. §7. Fictitious l>ayt!e of ciiwjue. Canadian Acts on this point. One W. Shaokell, pre- tending to be acting for James ShacUell & Co., of Mel- bourne, sold a l(>t of wool to defendant in Sydney, and on Ills handing over a bogns store warrant for the wool signed by one Jones, who (dainied to be the Sydney agent of tlic Melbourne firm, reeeiv<'d a promissory note pay- able to the order of James Sluu-kell & Co. This was indorsed by Jones in the name of James Shaoktdl & Co., and discounted with the City Bank. There had been a firm of James Shackell & Co. in the wool business in Melbourne; but it had bee^n out of business for some (iuie, although James Shackell still lived there. The (^-ourt held that the case was governed by Vagliano v. Bank of England, that James Shackell & Co., the pay- ees, were non-existing, and even if they had V^eeu still an existing firm, they had no interest in the :iote, and no right to indorse it, or to be paid upon it, and that the payees were in reality flctitious. There being no perf^on who had the right to indorse it as payeis it waa in effect payable to bearer. The clause has also been considered by the Court of A|)oeal in England in a recent case arising out of che(|ues on a banker: (Mutton v. Attenborough, [1895} 2 Q. H. 7(>7. A clerk of plaintiffs, by fraudulently re- presenting to them that work had been done for them by Geoi'ge Brett, induced Inem from time to time to draw che<|ues payable to the order of George Brett. There was no such j)erson as George Hrett and no such w<.rk haaid umler a mistake of fact. It was dainu'd for plaintiffs that in case of a cheque the payee must be tictitious or non-existing to the know- ledge of the drawer to bring it within the Act; but it was held that the case was governed by the Vagliano case, and that the payee was not the less a " flctitious or li3^-JU assji,: FORM AND INTERPRETATION. 65 3, 1 I i. non-existing person " because the drawers supposed him § 7. to be a real person, and that the cheques were payable to bearer. Estoppels as to Payee— The acceptor is precluded from denying to a holder in due course the existence of the payee and his capacity to indorse at the time of acceptance: section 54(3). The drawer is also pre- cluded from denying to a holder in due course the existence of the payee and his capacity to indorse at tlie time the bill is drawn, section 55 (?>). The onus is on the holder to prove that the payee is fictitious or non- existing. The holder of such a bill, if he desires to negotiate it, should indorse it in the name of the fictiti- ous payee. The signature of the name of a fictitious payee in such a case must be distinguished from the forgery of the 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 fic- titious payee is void in the hands of a holder with no- tice: Nouguier, § 277. In the United Stales it is looked upon with disfavor: Daniel, §§ 13t* 140. By section 34, s-s. 3, the provisions of the Act re- lating to a payee apply with the necessary modifications to an indorsee under a sp<^cial indorsement. 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. 2.7.) (18.53). 2. A note in favor of one who is absent, and w'ao (as it happens) is dead, is not void and his executors may maintain an action on it: Grant v. Wilson, 2 Rev. de Leg. 20 a814), 3. 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. 669 (1701). m'lb.e.a.— 5 ■ir HHi 66 BILLS or EXCHANGE. R f? 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 m his hands, purchases with It a bill of exchange, which he Indorses specially to his principal; the latter, at the time of the indoreement, 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., 5 B. & Aid. 2(H (1821). 6. When a clerk drew and endorsed a bill as attorney for hfs 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: Aspltel v. Bryan, 3 B. & S. 474 (18(54). 7. The innocent acceptor of a forged bill payable to a fictiti- ous payee is liable to a bona fide holder for value, and the bill may be treated as if payable to bearer: Phillips v. im Thum, L. R. 1 C. P. 463 (1866). S. Where a promoter of a company Induced a friend to sub- scribe for shares as C, a name not his own, and gave the direc- tors the cheque of a third party to the order of C, which was not indorsed, the directors could treat the payee as fictitious, and Indorse the cheque in the name of C: Edinburgh Ballarat G. M. Q. Co. V. Sydney, 7 T, L. R. (ioG (1891) 9. Where the name of the payee is fictitious it may be Indorsed by the person to whom the note is delivered: Blodgett V. Jackson, 40 N. H. 21 (1859). 10. An instrument payable " to the estate of A.," a deceased person, is a promissory note, payable to a fictitious payee: Lew- insohn v. Kent, 87 Hun (N. Y.) 257 (1895). • Certain Q When a bill contains words prohibiting biiiB valid ^: . -. . • , ,. 1 • , , T but not transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but it is not negotiable : Imp. Act, 8. 8 (1). If a party to a bill wishes to make it not negotiable, he must do so in clear terms. Where a biii was drawn payable to the order of F. the drawer, and the drawees struck out the word " order " and accepted the bill " in -ft*^' PI FORM AND INTERPRETATION. ft7 • .*} favop of F. only," at a certain bank, it was held that § 3^ such acceptance waH not a qualified one, and did not vary the effect of the bill as drawn : Meyer v. Decroix, [1891] A. C 520. Whcrf' a cheque payalile lo the order of M. was crossed *' account of M., National Bank, Dublin," it was held that these words in the crossing did not pro hibit transfer, and that the bank having credited M. with the amount, could sue the drawer: National IJank V. Hilke, [1891] 1 Q. B. 435. For the rule as to bills negotiable in their origin, but which have their nego- tiability either stopped or limited by a restrictive in- dorsement, see section 35. The Old Law. — Formerly a bill payable to a par- ticular 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 tin- reported cases are of this class; now, by sub-section 4, such a bill is negoti- able. It remains to be 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 pro- hibited, as they have heretofore done as to a bill not payable to order or bearer. As to the law in England, Chalmers says at p. 129: "A bill may be transferred by assignment or sale, subject to the same conditions as would be requisite in the case of an ordinary chose in action. Thus:— C. is the holder of a note payable to his orl n fm u iu ^ ^^ h l ^|^^ e^IM^IiXMlMKyMMtifl FOUM AND INTERPRETATION. 71 Whitty, 9 L. C. R. 191 (1859); Bauqne du Penple v. § 0. Ethier, 1 R. L. 47 (1809); McGorkill v. Burrabe, M. L. R. 1 8. C. 319 (1885); Mallette v. Sutcllffc, Q. R. 5 8. C. 430 (1894); West v. Bown, 3 U. C. Q. B. 290 (1846). 8uch a note was not a negotiable instrument in England before the Act of 1882, which adopted ihe 'aw of Scotland in this respect for the United Kingdom: Plimley v. Westley, 2 Bing. N. C. 251 (1835). Huch is still the law in nearly all the United States: Daniel, § 105 ; Randolph, § 174. Inl Illinois there is a statute similar to the present Imperial and Canadian Acts. Like other changes in the law introduced by th' Noti*tro- Act, it will apply only to bills and notes made in Can- "P*"^*'"^- ada on or after the Ist of September, 1890. As to the assignment or transfer of non-negotiable bills, or what is a suflBcieut indication of an intention that a bill should not be transferable, 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 r. Manning, Comyns, 311 (1719). 5. Where a bill, either originally or by indorse- Option of ment, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order, at his option. Imp. Act, s. 8 (5). A bill payable to a person " or his order " or " to l 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 (1849). A note payable " to A. or order on account pf B." is payable to A. or to his order and m)t to B. : Newton v. Allen and Moir V. Allen, 2 Rev. de Leg. 29 (1817); Clark v. Esson, 2 Rev. de Leg. 30 (1820). 72 §9. Sum payable. im lilLLS OF EXCHANGE. 9. The sum payable by a bill is a sum certain within tho meaning of this Act, although it ic required to be paid — {a) With interest ; (6) By stated instalments ; (o) By stated instalments, with a provision that upon default of payment of any instalment the whole shall become due ; (d) According to aji 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). A bill must be for " a sum certain in money ": sec- tion 3. See notes and illustrations ante p. 41. Tliis section gives some instances that might not be thought to come under that designation unless specially so de- clared. "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 deter- mined by the law of the place where the bill is drawn; Story on Conflict of Laws, 8th ed., s. 305: .4 lien v. Kemble, 6 Moore P. C. at p. 321 (1848). In Canada where 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 pro- vinces. In Ontario and Quebec certain corporations could not talce 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 2 5; Britlhh Col- umbia, ss. 24 to 27; Princo Edward Island, ss. 28 to 30. The restrictions relating to these provinces were all abolished by the Act of 1890 immediately following i 'Ay.W.t&^'rWli-'. ■4. FORM AND INTERPRETATION. 78 .J the present Act, 53 Vict. c. 34, which repeals section !) to 30 inclusive of R. S. 0. 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 stipulate for, take, reserve or exact any rate of interest or discount not exceeding seven jter centum per annum, ani may receive and take in advance any such .'ate, but no higher rate of interest shall bt; recoverable by the bank ": Bank Act, 53 Vict. c. 31. s. 80. Section 81 pro- vides that no promissory note or bill of exchange dis counted by or assigned to a bank shall be oid 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 entitled to recover more than seven per cent. On account of 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 inoperative. Certain corporations by their charters are restricted as to the rate of interest they may take. These are 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. 803 (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 Massa- chusetts, Rhode Island, and Connecticut, usury laws have been abolished; in the other northern and north- eastern States they still exist with varying degrees of severiry. 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 sec- tion 71. §9. 'w--im mm 74 BILLS OF EXCHANGE. S Q Where a special rate of interest is mentioned in the bill, see the notes and cases under section 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. As to presentment and notice of dishonor each instalment is treated as a sepa- rate bill. A valid indorsement must be of all instal- ments unpaid. ILLUSTRATIONS. 1. A promise to pay £102 " in yearly proportions," heni to Ir© a valid note payable in two annual instalments: McQueen v. McQueen, 9 U. C. Q. B. 536 (1852). 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: Clearlhue v. Morris, 2 Rev. de Leg. ^0 (1820). 3. 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 wfthin |741, Aug. 12, '61." Held to be an acceptance for the remaining instalments: Berton v. Central Bank, 10 N. B. (5 All.) 493 (1863). 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. & B. 669 (1835). 5. A promise to pay £6 " by instalments " simply, is not a note: Moffat v. Edwards, Car. & M. 16 (1841). 6 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 whote amount: Carlon v. Kenealy, 12 M. & W. 130 (1^43). 7. A non-negotiable note, payable in Instalments, but on default the whole to become due. Is valid, and the maker has three days' grace: Miller v. Blddle, 11 Jur. N. 3. 080; 13 L. T. N. 8. 334 (1865). kmim!^lem$miim? mm t m i ! Vmi Mmmxm B m i iU '^m» •"-^■^.^:-' .s-r- J-.ujb "^ f r ' « k I Jt^ r' ■■••'• J- «*«ll«U3*>nKf»W*M»li-" FORM AND INTERPRETATION . 75 8. A note payable "In such instalmenta, and at such times g Q^ as the directors of a company may from time to time require," . held to he a valid note, as being payable on demand, or in instal- ments on demand: White v. Smith, 77 111. 35 (1875). "With Exchange."- Where the bill is to be paid in one country and the sum is expressed in the currency of another, the amount is determined according to the rate of exchange on the day the bill is payable: Hirsch- fleld V. 8mith, L. R. 1 C. P. p. 340 (1866); section 71, 2(d). On a sterling bill drawn in London on defen- dant in Toronto, but accej>te«ff*y>iWV»''W!Pfji^w»ii'#w'»wiij.w'iy.s ^^ 80 BILLS OF EXCHANGE. § 11. (b) On or at a fixed period after the occurrence ~ of a specified event which is certain to happen, though the time of happening is uncertain : Imp. Act, s. 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 sec- tion, 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. 319 (1849). 2. A promise to pay on a specified date, with a pro- viso that if the maker should sooner sell certain lands, the note should be payable on demand: Elliott v. Beech,^ 3 Man. 213 (1886). A promise to pay 12 montha after notice: Clayton v. Gosling, 5 B. & C. 360 (1826); or on six months' notice : Walker v. Roberts, Car. & M. 590 (1842); or two months after demand in writing r FORM AND INTERPRETATION. 81 ;,■' Price V. Taylor, 5 H. & N. 540 (1860); or upon notiflca- § H. tion of 30 days in any newspaper: Protection Ins. Co. - V. Bill, 31 Conn. 534 (1863). ( "Certain to Happen."— Most of the instances of valid notes under tliis iiead 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, 3 Str. 1217 (1745); "one year after my death": Rolfey v. Green well, 10 A. & E. 222 (1R39); " on demand after my decease ": Bristol V. Warner. 19 Conn. 7 (1848). 2. It was helfl in Andrews v. Franklin, 1 Str. 24 (1717>, thav, a note payable two months after a Government ship was paid off, was a good note as Government was certain to pay; but thlB decision is open to question. 3. 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 completed, the day named being held to be the day when it fell ^ue: St'jvens v. Blount, 7 Mass. 240 (1810); " on or by " a certain day: Massie v. Belford, 68 111. 290 (1873); Preston v. Dunham, 52 Ala. 217 (1875) ; on or befo»"e a certain time : Bates v. Leclair, 49 Vt. 229 (1877); Helmer v. Krolick, 36 Mich. 371 (7877). 2. An instrument expressed to be payable on a As to con- | 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 conditions have been held not *" 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 v. Wells. 5 U. C. O. S. 725 (1848). 2. On the arrival of a certain ship: Wood v. Higginbotham, 2 Rev. de Leg. 28 (1813); Palmer v. Pratt, 2 Blng. 185 (1824); Coolldge v. Ruggles, 15 Mass. 386 (1819). 3. Three days after the sailing of a vessel: Dooly v. Ry.ir- ff.n, 1 Q. L. R. 219 (1873); Du?h\ine v. Maguire, 8 Q. L. R. 2t».-> (1882). h'l.b. 11.-6 I mmmm 82 § 11. BILLS OF EXCHANGE. 4. Within so many days after the maker married: Pearson V. Garrett, 4 Mod. 242 (1693^: Beardaley v. Baldwin, 2 Str. 1151 (1741). 5. £116 on the death of G. H., provided he left the makers so much, or if they were otherwise able to pay it: Roberts v. Peake, 1 Burr. 323 (1757). ♦5. Ninety days after sight, or when realized; Carlos v. Fan- court, 5 T. R. at p. 486 (1794). 7. When I am in good circumstances: VoB. 372 (1798). Ex parte Tootell, 4 8. When a certain sale la made: Hill v. Halford, 2 B. & P. 413 (1801); De Forest v. Frarey, 6 Cow. 151 (1826). 9. Ninety days after sight or when realized: Thomas, 16 Q. B. 333 (1851). Alexander ▼. 10. When in funds: (1848). Gillespie v. Mather, 10 Penn. St. 28 11. W^hen an estate is settled up: 111. 172 (1876). 12. On demand, or In three years: 133 Mass. 151 (1881). Husband v. Epling, 81 Maloney v. Fitzpatrick^ Omission of date in 12. Where a bill expressed to be payable at a bill my- fixed period after date is issued undated, or where able after ^ i i • i date. the acceptance of a bill payable at sight or at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly ; Provided that (a) where the holder in good faith and by mistake inserts a wrong date, and {b) 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.) As to wrong date. I FORM AND INTEllPRETATION. 83 In the Act as passed in 1890 the third lino read, § 12. •"payable at a fixed period after sight," tiius following the Imperial Act. It was another case of an omission to harmonize the rest of the Act with the change made in section 10 by the exclusion of sight bills from those payable on demand. Sight bills thus requiring accept- ance a rule became necessary for an undated accept- ance. The words " at sight or " were therefore inserted after " payable " by section 2 of the Act of 1891. A bill of exchange without u date is valid: De la Courtier v. Bellamy, 2 Show. 422 (1685); Hague v. French, 3 B. & P. 173 (1802); Pasmore v. North, 13 East 521 (1811); Giles v. Bourne, 6 M. & S. 73 (1817); Cow- ing V. Altman, 71 N. Y. 441 (1877). A date is not in- cluded among the conditions in section 3; but it is a material part of a note and should not be altered: sec- tion 63, s-8. 2. A bill is issued when it is first delivered complete in form, to a person who takes it as holder : section 2 (i). It is only when payable at a fixed period after date, or at sight, or at a fixed period after sight, that the date of the bill or of the acceptance be- comes of importance. Where an acceptance is not dated, the bill is presumed to have been accepted a few days after its date: Roberts v. Bethell, 12 C. B. 778 (1852). In Prance if a bill be payable after sight, and the ac- ceptance be not dated, time runs from the date of the bill: Code de Com. Art. 122. The section probably goes farther than the old law. It has been held that parol evidence was admis- sible 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); Cow- ing V. Altman, 71 N. Y. 435 (1877); and that when a note without date »vas 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 (1852). And where the maker in June, 1875, sent an accommo- dation note dated " 6th, 1875," not naming a month and imimifUifmin na Mr wva; Mi 84 BILLS OF EXCHANGE. § 12. t^^ ^t^ ^' ''"°^ ^''*' ^ Sunday^ and the receiver made ■ -^ the date " June 8th," the note was held not to be voided: Merchants' Bank v. Stirling, 13 N. 8. (1 R. & G.) 439 (1880). This presumption of authorization is now extended as regards the kind of bills named to any payee or in- dorsee who has the bill in possession, and to the bearer. As to filling up omissions in incomplete bills generally, see section 20. In France, under the Code de Commerce, Art. 110,. a bill must be dated. Under the old French law, ac- cording to Pothier, Contrat de Chantre, No. 36, " omis- sion of the date, or error in the date, cannot be raised by the drawer or the acceptor." i^ate 1^3 Where a bill or an epfcance, or any in- evidence, dorsemeiit on a bill, is dateu, vue date shall, unless the contrary is proved, be deemed to be the true V date of the drawing, acceptance or indorsement, as the case may be : Imp. Act, s. 13 (1). " It may b^ laid down as a general prima facie pre- sumption, that all documents were made on the day they bear date ": 1 Taylor on Evidence, § 160. This has been specially recognized with reference to bills and notes : Hays v. David, 3 L. C. R. 1121 (1852) ; Evans V. Cross, 15 L. C. R. 86 (1865); Hutchins v. Cohen, 14 L. 0. J. 85 (1869); Smith v. Battens, 1 M. & Rob. 341 (1834) ; Anderson v. Weston, 6 Bing. 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, 517 (1811); Montague v. Perkins, 17 Jur. 557 (1853); Bayle-" 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). FORM AND INTERPRETATION. 85 If a bill be dated on an impossible date, such as § \3m the 31st 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). 2. A bill is not invalid by reason only that it is Certain antedated or postdated, or that it bears date on a!"'tto '^ invalidate Sunday or other non- juridical day. Imp. Act, s. 13 (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 V 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 jf 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. Mc- Cardel, 8 Wend. 479 (1832). Time is computed on such bills with reference to the actual date they bear. A postdated cheque is equivalent to a bill payable after ■date: Forster v. Mackreth, L. R. 2 Ex. 163 (1867); Royal Bank v. Tottenham, [1894] 2 Q. B. 715. The above rule a» to a bill dated on Sunday, is „ that of the Imperial Act and also of the English law onSunday. 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 ordin- ary 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. 180 (1830). The fact of its be- ing dated on Sunday would not be such notice. The above Act of Charles II. is in force in some of the pro- vinces, and in several of the provinces similar Acts have been passed. See R. S. O. c. 203 ; IV 86 BILLS OF EXCHANGE. "§ 13. ^- ^- Q- ^^^- ^^'-^^ 5 ^- ^- ^- ^- '^*- ^^> ^- ^^^^ ^- 2 ^ -^ 20 Geo. III. (P. E. I.) c. 3. The words " or oilier non- juridical day," are not in the Imperial Act, and '.ere not in the bill, but were added in the Senate to remove pos- sible doubts: Senate Debates, 1890, p. 403. A note void as between the inmn'diate 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 ou Sunday In payment of goods sold on that day is void as between tlie original parties, but not as against an indorsee for value and without notice: Houliston v. Parsons, 9 U. C. Q. B, 681 t18i'2); Cromble v. Overholtaer, 11 U. C. Q. B; 55 (1853). 2. A promissory note dated on Sunday given in payment of a horse purchased on that day, is null and void: Cot6 v. Le- mieux, 9 L. C. R. 1>21 (1859). 3. A promissory note made on Sunday Is valid: Kinch, 7 L. C. J. 31 (1863). Kearney v.. 4. An Indorsee may recover agai'^st the acceptor of a bill dated on Sunday; Begbie v. Levi, 1 Cr. & J. 180 (1830). 5. A bill made and delivered on Sunday is void in most of the united States: Randolph, §? J2B, 1790. Computii- 14. Where a bill is not payable on demand,. time of the day on which it falls due ia determined as Pays of gTMM. (a) Three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to t\e 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 dioai days, i^^^^j hoHdjiy or r.on-juridical d\y in the T 'ovince where any such bill is payable, then the day next. Nonjuri- FORM AND IN TEUPUETATION. 87 i following, not being a legal holiday or non-juridical § 14. day in such Province, shall be the last day of grace : Imp. Act, s. 14 (1) ; R. H. C. c. 123, s. 2 ; 0. C, 230t). The first part of thiH subsection is taken verbatim J]*^,"^''* from tlie Imperial Act; its etfect, however, is different. There, bills payable iit sight are payable on demand by section JO, so tliat they are not entitled to days of grace. In Canada, they fall under the rule in clause (a). Tlie proviso is taken from R. 8. C. c. 123, 8. 2, and differs materially from the corresponding rule in England. There when tlu* Inst day of grace falls on Sunday, Christmas Day, (iood Friday, or a public fast or thanks giving day, it is payable on the preceding business day, except that when the last day of grace is a bank holi- day other than Christmas or Good Friday, or when the last, day of grace is a Sunday, and the second day of grace is a bank holiday, ihe bill is payable on the suc- ceeding 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) («). In the United States, as a general rule, if a bill payable without grace falb; 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 lioi.Iay, it is payable on the day preceding: 1 Daniel, § ($27. In France a note maturing on a holiday is payable the day before: Code de Com. AH VM. /-■■''■■'"'-':.x:\/ 2. Tn all matters relating to bills of exchange what ,, , . hIihU bo the following and no other shall he observed as >««>'''"ay»« legal holidays or non-juridicfd days, that is to say : \$ li wmmmmmmmim 18 §14. BILLS OF EXCHANGE. In all Provinces except Quebec. F \ i\ (a) In all the Provinces of Canada, except the Province of Quebec — Sundays ; New Year's Day ; Good Friday ; Easter Monday ; Christmas Day ; The birthday (or the 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 lirst day of July (Dominion Day), and if that day is a Sunday, then the second day of July as the same holiday ; The first Monday in September, to be de- signated "Labour Day" : 57-68 Vict. c. 55, s. 2 ; 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 fol- lowing New Year's Day and Christmas day, when those days respectively fall on Sunday ; In Quebec. (h) And iu the Province of Quebec the said days, and also — The Epiphany ; (Jan. 6th.) The Ascension ; (Movable.) All Saints' Day ; (Nov. Ist.) Conception Day; (Dec. 8th.) iif every (c) Aud also, in any one of the Provinces of x*rov>uct*. Canada, any day appointed by proclamation of the FORM AND INTERPRETATION. 9» il ! P Lieutenant Governor of such Province for a public § 14. 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-Gover- nor" includes administrator: R. S. C. c. 1, s. 7 (9) and <13). The original Act increased the number of holidays in two particulars: — Ist, in making Monday a holiday when the Queen's birthday falls on Sunday; and 2nl, in making every provincial non-juridical day a holiday in that province. The Annunciation, March 25th, Corpus Christi, a movable festival, and St. Peter's and St. Paul's Day, June 24th, were holidays for Quebec under the Act of 1890: but vfCTv struck out of the list in 1893, by 56 V. c. 30. Labour Day was added for the whole Domin- ion in 1895. The liolid: on bills and notes in England are Sun- days, Chnstmaf* Day, Goi.f^>i^^ FORM AND INTERPRETATION. 88: •r! 28th: Roehner v. Knickerbocker Life Ass. Co., 63 N. Y. § 14, 160 (1875). The following expressions in bills have been held to be a suflBcient indication that dajs of grace are not to" be allowed ;—'' withodt 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 Eight bill and entitled to days of grace: Pixou V. Nuttall, 1 C. M. & R. 307 (1834). 15. The drawer of a bill and any indorser mayjja^of insert therein the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonored by non-acceptance or non-payment. Such 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 refeience probably to the last sentence,, which settles a point that before the Act had not been decided in Eng- land. According to Pothier (Change, No. 137) it had been a disputed point in France whether it was obliga- tory 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 un- accepted and there be a drawee au besoin (referee in case of need), presentment must be made in like mannei* to him also: Art. 2306. "In modern France if the drawee au besoin he named by the drawer, the bill, if dishonored, must be presented to him; if he be named by an indorser it is at the option of the holder " : Nou- m^ r^m 'wpwrrmp^rr mmmmmttmmggn UMI hI 94 BILLS OF EXCHANGE. t -f § 15. S"ipr, §§ 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. 2fpS*^ 16. The drawer of a bill, and any indorser, may drawer^or ^^^^'^^ therein an express stipulation — indorser. (a) Negati\ang 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. The ordinary liability of the drawer to the holder is that if the bill be dishonored and due notice given he will compensate the latter: section 55. 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 a 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 to him. Or the drawer may limit his liability as to amount or otherwise, and any indorser may do the same. In prac- tice it is not common for drawers to make such a stipu- lation; indorsers frequently do so. The form in which the latter generally negative liability is by wr?+ing before their indorsement the words " sans recours, or " without recourse." For all practLal purposes an in- dorsement " without recourse " may be placed \ipon the same footing as a note payable to bearer or transferred by delivery. The party so making the transfer does not thereby incur the obligation or responsibility of an in- dorser: Dumont v. Williamson, 2 U. C. L. J. 219 (1866); Goupy V. Harden, 7 Taunt. 163 (1816); Rice v. Stearns, 3 Mass. 224 (1807); Ticouic Bank v. Smiiey, 27 Me. 225 (1847); Hailey v. Falconer, 32 Ala. 536 (1858); Han- num V. Richardson, 48 Vt. 508 (1875). FORM AND INTERPRETATION, 96 f pi The duties of a holder of a bill to a drawer or in- § \Q^ dorser 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 diawer and indorsers. iiuties. as provided in sections 39 to 52 inclusive. The drawer or any indorser may relieve the holder from these obli gations. The usual form of effecting this is by using 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: Bryant v. Merchants' Bank, 8 Bush (Ky.) 43 (1871); Bryant v. Lord, 19 Minn. 897 (1872) ; Parsaley v. Heath, 69 Me. 90 (1879); Pool v. Anderson- 116 Ind. 94 (1888); Daniel, §§ 1092. 1093. Such is also the law of France: Cass. 9th Nov. 1870, Dalloz, 70, 1, 350. Our statute would appear to contemplate the restriction of the waiver to the drawer or indorser who expressly waives any of the holder's duties " as regards himself." 17. The acceptance of a bill is the signification ^efin^Hion by the drawee of his assent to the order of the »«!<=«• drawer : Imp. Act, s. 17 (1). When the drawee writes his name on the bill and delivers it or gives notice he becomes the acceptor and his act is irrevocable: section 21. No one can accept a bill except the drawee or an authorized agent, save the referee in case of need, or an acceptor for honor : sections 14 and 64. Before the la»v was so strict in requiring an acceptance to be signed by the acceptor, there was also laxity in oiuer respects as -v^nll be seen from some of the illustrations given below. In some instances where a bill is drawn upon the officer of a corporation it is frequently difficult to decide whether the drawee is the corporation or the officer in- dividually. As will be seen from some of the illustra- m KM 96 BILLS OF EXCHANQK. ifj § 17. tioos below the tendency has been to hold the oflBcer personally liable. The maker of a promissory note usually corresponds to the acceptor of a bill. The de- cisions regarding promissory notes made by officers of corporations show that personal liability is less readily presumed than in the case of bills. The difference arises largely from the rule of the present section that it is the drawee who must accept the bill. Where a bill is addressed to a firm it is the same in effect as though addressed to all the partners, and the signature of the firm's name by a partner or agent is equivalent to his signing the names of all the part- ners: section 23 (6). 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. C. De Latre, Pres. N. D. & H. Co.," and accepted thus,—" Accepted, P. C. De Latre, Pres. N. D & H, Co.," the acceptor was held personally liable to the payees: Bank of Montreal v. De Latre, 5 U. C. Q. B. 362 (1848). 2. Defendant accepted a bill drawn upon him as treasurer of the Wolfe Island Railway and Canal Co. thus, — " Accepted, W. A. Geddes, Treas. W. I. R. & C. Co.," and affixed the company's seal. Held, that he was personally liable: Foster v. Geddes, 14 U. C. Q. B. 239 (1856). 3. 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 (1860). 4. On a bill addressed to " James Glass, Sec. R. G. M. Co.," and accepted thuii, — " Accepted, the R. O. M. Co., per Jas. Glass, Sec," held that tiie secretary was not the acceptor or personally liable: Robertson v. Glass, 20 U. C. C. P. 250 (1869). >. A bill was addressed " M. H. Taylor. Tr. C. S. Ry. Co.," and accepted thus, — Accepted, M. H. Taylor, Tr." Held, that he FORM AXD INTERPRETATION. 97 I ■was personally liable as acceptor to an indorsee who took it as ^ ]_*7^ the bill of the company: Luiug v. Taylor, 20 U. C. C. P. 41ii J '. (1870). 0. A bill addressed " lo the Pres. Midland Railway " was Accept- accepted thus.—" For the Midland Railway of Canada, accepted , ','jjj^ "' H. Read, Sec, Geo. A. Cox. President." Held, that the president was personally liable as acceptor: Madden v. Cox, 5 Ont. A. R. 473 (IHSO). 7. Defendant accepted a bill " as executor of estate J. P." Plaintift. was holder for value without notice. A defence that defendant was liable only as executor was struck out: Camp- bell V. Mackay, 24 N. S. 4(M (1892). 8. A bill addressed to " M. & McQ.," intended for M. McQ. & Co., was accepted by the manager of the latter In the name of " M. & McQ." The firm of M McQ. & Co. were held not liable as acceptors: Quebec Bank v Miller, S Man. 17 (1885). J). Where a person to whom a bill is not addressed wrltfis an acceptance upon it (not as acceptor for honor) he is not liable as an acceptor: Jackson v. Hudson, 2 Camp. 447 (1810); Polaill V. Walter, 3 B. & Ad. 114 (18.'J2); Davis v. Clarke, fi Q. B. Id (1844); Steele v. McKinlay. 5 App. Cas. 7M (1880). 10. A bill addressed to the " Directors of the B. Co.," fff accepted by two directors and the manager. The latter is not liable as an acceptor: Bull v. Morrell, 12 A. & E. 745 (1840). 11. A bill addressed to a firm is accepted by a partner in his own name. He is pers')nally liable as an acceptor: Owen v. Von Uster, 10 C. B. 318 (1830). If he accept in the firm name and add his own it does not make him separately liable to an Indorsee: Re Barnard, 32 Ch. D. 447 (188(5). 12. A bill addressed to a partner is accepted by him in the firm name. He is personally lialde, as tlio firm name is a short form of the partners' names: Nicholls v. Diamond, 9 Ex. 154 (1853). 13. A bill is addresi.ad to the S. S, P. Co., the proper name being the S. S. P. Co., Limited. It is accepted by ".I. M., Sec. to the Co." This is not the acceptance of tb'^ Company, but under the Companies' Act, J. M. is personally liable: Penrose v. Martyr, E. B. & E. 409 (1858); Atkins v. Wardle, 58 L. J. Q. B. 377 (1889). 14. A bill addressed " to the joint mauagfTS of the Royal M. M. Association," is accepted thus,— " Accepten. J. J., w. S., ns joint managers of the Royal M. M. Association. ' Held, that they m'l.h.e.a.— 7 I'ii 98 BILLS OF EXCHANGE. S 17 were personally liable as acceptors: Jones v. Jackson, 22 L. T. 1 _, N. S. 828 (1870). m 15. A bill 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, ;J4 L. T. N. S. 822 (1S7(J). 16. A bill addressed to " J. B.. agent of the L. Co.," Is accepted thus, — " Accepted on behalf of the company, J B." He is per- sonally liable as acceptor: Herald v. Connah, 34 L. T. N. S. HSTi (1870); Mare v. Charles, f. E. & B. »7« (1850). 17. A bin was drawn on a Arm 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). 18. Two directors and the secretary of " The Bastille Syndi- cate, Limited," accepted a bill in the name of " The old Paris and Bastille Syndicate, Limited." The company did not pay the bill, and the directors and secretary were held p^Tsonaliy liable under section 42 of the Companies' Act: Nassau Press v. Tyler, 70 L. T. N. S. 376 (1894). Requisites of accept- 0-V ^ 2. An acceptance is invalid unless it complies with the following conditions, lu iiiely : — (a) It must be written on the bill and signed by the drawee. The mere signature of the drawee without additional words is sufficient ; ■ (b) 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) " Accoi'ding 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 sepa- rate 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. FORM AND INTERPUETATION. 99 It was IwUl ill En{«« wid}?e, 1 Str. 648 (1726); Lumley v. Palmer, 2 Str. 1000 (1735); Pillans v. Van Mierop, 3 Burr. 1663 (1765). The Act 1 & 2 Geo. IV. v. 78, was passed to make a written acceptance necessary in such cases, and the M»'rcantil(.' Amendment Act, 1856, 19 & 20 Vict. c. 97, s. 6, required an acceptance on any bill, foreign or inland, to be in writing and 8igne«^ FORM AND INTERPRETATION. ! 101 Thomas, 16 O. R. 503 (1888); Torrance v. Bank of British § 17, North America, 17 L. 0. J. 185; L. R. 5 P. G. 247 (1873); '- Dunspaugh v. Molsons Bank, 23 L. C. J. 57 (1878) ; Mari- time Bank v. TTnion Bank, M. L, R. 4 S. C. 244 (1888); Coolidge V. Payson, 2 Wheaton, 66 (1817); Ilsley v. Jones, 12 Gray, 260 (1858); Riggs v. Liudsay, 7 Granch :«W»iW*i*«it, iH.'i*!(i(ir«ai«s*!i'!irj»WOTBS' FORM AND INTERPRETATION. the words "at sight or ' in the first lioe. It was another instance of the omission of the ohange necessary to mal?e the Act consistent with the decision to. con- tinue to allow days of grace ou 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 subsection is new law, and is designed to place all parties in the same position as if the bill had been acceptt^i 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, notwith- standing 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 pre- sentment : 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. loa §18. ■» • 19. An acceptance is either (a) general, or (b) ««nern! qnalified : a fi^eneral acceptance assents without f''«iaccept- quahtication to the order of the drawer ; a qiiahfied acceptance in express terms varies the effect of the - bill as drawn: Imp, Act, s. 19 (I). The usual way of accepting a hill 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 parable at or after sight. It is sufficient if he simply sign his nam»^: section 17. He may alsi) name a par- ticular specified place of payment as provided in the next sub-secthm without making his acceptance a quali- fied one. The definitions of a general and qualified acceptance as given above ar* taken from the Imperial Act without change, but the effect of the change made in the next subsection and in sections 45 and 52 is to materially change the law. if "SCTS ^^^^?^^P«H?5^ iiIBi 104 it!' §19. Qualified accept- ance. BILLS OF EXCHANGE. , The holder of a bill may refuse to take a qualified 1 acceptance, and if he does not obtain a general accept- ' ance he may treat the bill as dishonored by non aci*ept- ance: 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. 8. 314 Ex. (1857). A bill of exchange being drawn by L. D. Plipo, pay- able " to order L. D. Flipo," the drawees erased the word *' order,'" and accepted the bill • in favor of L. D. , Flipo only, paj'able at the Alliance Bank, Loudon." In an action upon the bill the indorsees for value against the acceptors it was held by the English ('ourt of Ap- peal, 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. I). 343 (1890). The decision was affirmed by the House of Lords: [1891] A. C. 520. If u qualified acceptance is taken, it discharges the ^ drawer and indorsers if they have not authorized it, or difciapprove on receiving notice: sectit * 44. 2. In particular, au acceptance is qualified which is — ■• (a) Conditional, that is to say, which makes payment hy the acceptor dependent on the fulfil- ment of a condition therein stated ; but an accept- ance to pay at a particular specified place is not conditional or qualilied. (h) Partial, that is to say, an acceptance to {)ay part ouly of the amount for which the bill is drawn ; FORM AND INTERPRETATION. 105 (c) Qualified as to time ; ;;:;;■::■' " §19. {d) The acceptance of some one or more of the 2;;,*Jif.^ drawees, but not of all. Imp. Act, s. 19 (2). . * *"«»• This sub-section is taken chieflj from section 19 of , the Imperial Act, but some changes have been made, the full effect of which it may be difficult to foretell, when taken in connection with the chanpjes made in sections 45 and 52, In the Imperial Act, clause (a) en<1s with the word " stated," and the following appears among the qualified acceptances, "(c) local, that is to v 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 elsewhere." IMior to 1820 it was a point much disputed in Eng Atparti- "^ ciilar placA land whether a bill made or accepted payable at a particular place required to be presented there in order to charge the acceptor, drawer and indorscrs. In Rowe V. Young, 2 B. & B. 165 (1820) it was decided by the House of Lords that such an acceptance was a qualified acceptance, rendering it necessary in an action against . the acceptor to prove presentment at such place. The ■ ;' practice of making bills payable at a banker's had become gen(;ral and was found to be a. great conveni- ence. 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 Rovvc v. Young, the Act 1 & 2 Geo. I v. c. 78, was passed, declaring an acceptance to pay at a particular place a general ac- ceptance, unless made payable there " only and not otherwise or elsewhere." Chinse (c) of section I!) of the Imperial Act above quoted is a reproduction of this Act. A similar Act applicable also to promissory notes was passed in Upper Canada in 18:17 as V Wm, IV. c. 5. This was embodied in the Cou. Stat. IT. O. c. 42, as sec- tions 5 and G, and appears in chapter 123 of the Re- i; 106 §19. Chan(?P« in bill. BILLS OF EXCHANGE. ,? vised Statutes of Canada, 1886, as section 16, but re- mained applicable to Ontario alone, and was repealed by the present Act. For cases where bills and notes omittinfr the restrictive words were held to be payable generally, see Oomniercial Bank v. Johnston, 2 (J. ('. (i. B. 126 (1845), and Bank of U. <~5. v. Parsons, a V. C. Q. B. 383 (1846). On such a note paji'.ble in Scotland or the United States the holder could not recover the ditfereuce of exchange or the damage allowed on foreign notes: Wilson V. Aitkin, 5 U. 0. C. V. 370 (1855); 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 eflfect 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 slated place, either by its original tenor or by a quaLfled acceptance, presentment must be made at such place." In Prince Edward Island an Act to the same effect as 1 & 2 Geo. IV. c. 78, was passed, 27 Vict. c. 6. This was repealed by the Revised Statutes of Canada, 1886, Schedule A, p. 2274. In the Canadian bill as introduced in 1889, section 19 was identical with the Imperial Act. There was a stnmg expression of opinion against the principle of the Act 1 & 2 Geo. IV. c. 78, especially against rec^uiring the words " only and not otherwise or elsewhere," and when the bill was introduced in 1890 the second sen tence of clause (p) 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 omit- ting 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 quali- fied." To appreciate the full effect of this change the present section must be read in connection with sec- tions 44, 45 and 52, and the reader is referred specially i «uclk. FORM AND INTEIiPRETATION, 107 to section 45, s-s. 2 (rf) (1), and to section 52, s-s. 2, and § 19. tbt,' notes on these subsections. The effect of the Canadian Act would appear to be Effect of 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 origin- ally drawn or in the acceptance the bill must he pre- sented there or the drawer and indorsers will be dis- charged: section 45. The acceptor is not discharged \ by the omission to present the bill for payment on the day that it matures, but if he is sued before presenta- tion the costs are in the discretion of the Court: sec- tion 52, s-a. 2. A difficulty may possibly arise if the drawee should, ^"^f/^J."* 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 place," and being a general acceptance the holder could not refuse it, or pi'otest the bill for non-acceptante. Tt 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 <^lie drawer and indorsers. The 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 to pay in another town as a qualified acceptance. There appears, however, to be nothing in the context or in the Act to require such a conBtmction, and ' place of payment " in section 45, 8-8. 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. 'asssmte: i-JlWi.iiJ-JJ"ip,«"^ Av,4S? 108 BILLS OF EXCHANGE. § 19. would have removed all uncertainty. 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 Gobonrg, Upper Canada, was accepted " payable at the Bank of Upper Canada, Port Hope"; Niagara District Bank v. Fairman, 31 Barb. 403 (I860). 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 fr.l- fllment of the condition it becomes absolute and the acceptor liable: Miln v. Prest, 4 Camp. 393 (1816). Where the acceptance on a bill is unconditional, parol evidence cannot be received to show that it was accepted conditionally: Bradbury v. Oliver, 5 U. C. O. S. 703 (1839). Conditional acceptances were not recog- nized in the old French law: Pothier, Change, No. 47: nor are they under the Code de Commerce: Art. 124. England and the United States are said to be the only countries which acknowledge them. The following are examples of conditional acceptances: — 1. If a certain house shall be finished: Dufresne v. Jacques Cartler Building Society, 5 R. L. 235 (1873). 2. When in funds from the estate of C. Potters v. Taylor, 20 N. S. (8 R. & G.) 362 (1888). .3. Provided they shall have earned that sum: McLean v. Shields, 1 Man. 278 (1884). 4. When certain debentures are sold: Ontario Bank v. McArthur, 5 Man. 381 (1889). 5. As soon as he should sell such goods: Smith v. Abbott, 2 Strange 1152 (1741). i"fciT^ iMWii MTl'lill"i' l^r'*^'S*''-t'' «»li^H^£!t!i.; FORM AND INTERPRETATION. 109 6. As remitted for: Banbury v. Lissett, 2 Strange, 1211 s 1 Q (1744). - 7. When he would obtain those turds from Prance: Men- dlzabal v. Machado, 3 Moore & S. 841 (1833). 8. On condition that It be renewed: Russell v. Phillips, 14 Q. B. 891 (1850). 9. On giving up bills of lading: Smith v. Vertue, C. B. N. S. 214 (1860). {b) Partial Acceptance.— A bill may be validly accepted for part: Petit v. Beiison, Comberbach, 452 (1697) : Wegersloffe v. Keene, I Str. 214 (1709). In this form of qualified acceptance, the drawer and indorsers have no opportunity of freeinff themselves by their dissent. The holder should give due notice of the partial dishonor: section 44, s-s. 2; Pothier, Change, ■ No. 49; Code de Commerce, Art. 124. (f) Qualified Acceptance as to Time. — The acceptor may vary the time of payment named by the bill; and if none be named he may fix a time and he will be bound by it: Walker v. Atwood, 11 Mod. 190 (1709); Russell v. Phillips, 14 Q. B. 891 (1850); Pothier, Change, No. 49. {d) Acceptance by Part of Drawees.~If there are several drawees and they do not all accept, those who do are bound. A partner may accept in his own name a bill addressed to his firm and it is a valid acceptance:" Owen V. Von Uster, 10 C. B. 318 (1850). The list of qualified acceptances given in this sec- tion may not cover the whole ground. Any acceptance which by its terms varies the effect of the bill as drawn would be a qualified acceptance, although it might not literally be within any of the classes enumerated. Of the corresponding section in the Imperial Act, the Mas- ter of the Rolls says, in Decroix v. Meyer, 25 Q. B. D. 348 (1890):—" I think it is true to say that in section 19 of the Act the examples given of a qualified acceptance ' ^Mmk^ ' !^Mm ]^ ' b ' i!^: '^'^ 110 BILLS OF EXCHANGE. § 19. ^^^ "^^ exhaustive and that there might be other cases '- of qualified acceptances, when the acceptance in express terms varied the effect of the bill as drawn." Inchoate 20. Where a simple signature on a blank paper ments. ig delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any : ' amount, using the signature for that of the drav^er, or the acceptor, or an indorser; and, in like manner, w^hen a bill is wanting in any material particular, the person in possession of it has a 'prima facie author!^ o fill up the omission in any way he • thinks li.. Imp. Act, s. 20 (1). This section applies to notes as well as to bills, and is copied from the Imperial Act with the omission of the reference to stamps. In England the signature must be on " blank stamped paper," and it can only be filled up for an amount that " the stamp will cover." This is a great aid in checking fraud. It is to be observed that the paper must have been delivered by the signer • in order that it might be converted into a bill or note, and the onus of proving this delivery is on the holder. Once it is proved tlwit il was so delivered, the onus is ^ shifted, and it is then for the signer to prove that it was not filled up within a reasonable time or in accordance with the authority given. The particular case of an * undated bill which is payable at a fixed period after ^ date, or an undated acceptance of a bill payable at sight or at a fixed period after sight, had already been provided for by section 12. ILLUSTRATIONS. 1. Where the payee of a note indorsed it with the date and amount blank, he was held liable to an Innocent indorsee for the note as filled up: Sandford v. Robs, « U. C. O. S. 104 (1841). BirvL FORM AND INTERPRETATION. Ill 2. An Indorser of a note who signH before the maker or payee, and before the amount is filled up, is liable on the note aa com- pleted: Rossin V. McCarty. 7 U. C. Q. B. 100 (184»). 20. a. The maker of a note delivered It with the amount In blank. Inch lato It was fraudulently filled up for *«.">. He was held liable to an in'»t;n'- Innocent Indorsee: Mclnnes v. M"ton, 30 U. C. Q. B. 4W) (1S70). 4. Where defendant indorsed as payee a note for S.">00, on which there was a blank space to the left of the word " five," which the maker fraudulently filled up with the word " twenty," the indorser was held liable for $2,.')(h» to an innocent indorsee: Dorwln v. Thomson, !.'{ L. C. .1. 2(5'J U8(!9). 5. 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 his address, cannot be recovered on: Ford v. Auger, IS L. C. J. 200 (1.S74). G. Where a signature was obtained ostensibly for a receipt, and a note was written over it, the signer is not liable: Banque Jacques Cartler v, Lescard, 18 Q. L. R. 39 (1880), 7. A note, signed in blank and sent with instructions to be filled up for |115, was filled \ip for $4(il. Held, that the maker was liable for the full amount to a holder in due course: Bank of Nova Scotia v. Lepage, M. L. R. 6 S. C. 321 (1889). S. A note payable to or order cannot be recovered by the person to whom it was given, either as payee oi bearer, with- out inserting his name in the blank as payee; Mutual Safety Ins. Co, v. Porter, 7 N, B. (2 Allen) 230 (1851). 9. A. Indorsed a note for the accommodation of the maker on condition that B. should indorse also. ' be maker issued it with- out B.'s indorsement. Held, that a holder in due course could not recover from A.: Ontario Bank v. Gibson. 3 Man 406 (1886); 4 Man. 440 (1887). 10. A bill is drawn payable to or order. Any holder for value may write hi.- own n.iiue in the blank and sue on the bill: Crutchly v. Mann, 5 Taunt. 529 (1814). 11. A note is signed by oio maker on condition that ano»^her Fign as joint maker. The person tu whom he gives it fills it \^ without the other signature and negotiates it. A holder in due course cannot recover: Awde v. Dixon, 6 Ex. 869 (1851). 12 Where a blank acceptance was stolen from the desk of the signer and filled up, he was held not liable to a holder In due course: Baxendale v, Bennett, 3 Q, B. D. 525 (1878). 112 HILLS OF EXCHANGE. §20. Whf n to be tilled u) As to sub aequent holder. V.i. Three bills of exchange were accepted by defendant with- out a drawer's najie and handed to B. In payment of bets. B. subsequently, for consideration, handed the blllB to the plaintiff, who signed his own name to them as drawer and sued the defen- dant on them. Held, that the Gaming Act, 1892, did not apply, and that the defendant was liable: Faulks v. Atkins, 10 T. I.. R. 178 (1893). 2. In order that any such instrument when completed may be enforceable a;,'ainst any person who became a party thereto i)rior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given ; reasonable time for this purpose is a question of fact : Provided, that if any such instrument, after completion, is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up within a reasonable time and istrictly in accord- ance with the authority given. Imp. Act, s. 20 (2). Where a contract imports performance within a reasonable time, extrinsic evidence of all the material circumstanties is necessarily admissible to determine what is a reasonable time for the purpose: Ellis v. Thompson, 3 M. & W. 445 (1S:^8); Attwood v. Emiry, 1 C. B. N. S. no (1856); Goodwyn v. Cheveley, 4 H. & N. 631 (1859); Brighty v. Norton, 3 B. & 8. 305 (1862) ; Tom» V. Wilson, 4 B. & S. 455 (1863); Hales v. London & N. W. Ry. 4 B. & 8. 66 (1863). It is for the party seeking to enforce the bill to ac- count for the delay if it has been unusual. Where a debtor gave his creditor a blank promis- sory note and subsetjuently failed, and the creditor did not fill up the note until after he had obtained his discharge five years later, the jury found that the delay was not ■-.rr^, ^t-tw FORM AND INTER I'UETATION. 113 nnroasonablf under tlu* tircumstances and the verdict § 20. was upheld: TeuipU' v. Pullen, 8 Ex. 389 (1853). - —-— "The Authority Given."— The onus is on the signer seekinfj to escape liability to prove that the autlioiity given has been exceeded, as the holder has prima faoi*; authority to till it up as he sees fit. If no instructions have been given or are proved, the bill will be upheld. Any person taking a bill in an incomplete state* is ex- posed to this defence, except in the case of the want of a date in section 12. Death revokes tlie authority to till | up a bill unless the holder be a holder for value. The liability of the signer begins when the bill is first issued complete in form, and not when he signs. . i - "Holder in Due Course."— The preceding limita- tions, as to time and authority, have no application to one who takes a bill complete and regular on the face of it before maturity, in good faith and for value without Dotice of dishonor or defect: sections 29 and 38; Hans- come V. Cotton, 15 U. C. Q. B. 42 (1857); Merchants' Bank v. Good, G Man. L. It. 339 (1890). The instrument so taken must have been originally delivered as a bill, or delivered in an incomplete state in order that it might be converted into a bill. ILLUSTRATIONS. 1. A partner having authority to do so gives a blank accept- ance in the name of his firni and dies. It may be filled up and enforced against the surviving partners: Usher v. Dauncey, 4 Camp. 97 (1814). 2. After the death of the signer of an accommodation accept- ance it was filled up in the presence of a person who discounted it. The latter cannot recover from the estate of the acceptor: Hatch V. Searles, 2 Sm. & G. 147 (18r>4). 3. A debtor gives a blank acceptance to a creditor who dies without filling it up. The administrator has a right to fill it up using his own name as drawer: Scard v. Jackson, 24 W. R. 1.7i); 34 L. T. N. S. «J5 (1875). m'l.d,e.a. — a ''■:-X' ;t. .' •. I. \ 114 BILLS OF EXCHANGE. 1 ! ij g; l'^ f. Of) 4. rt partner gives without authority a blank acceptance of J _!_ his Ann. 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, 3 Q. B. D. 0^3 (1878). 5. A debtor gives his creditor a blank acceptance and dies. The creditor may fill in his own name as drawer and payee and recover from his debtor's estate: Carter v. White, 20 Ch. D. 225 (1882); 25 Ch. D. GOO (iaS3). G. An acoeptftnce is signed with £4 in the margin, but with the amount blank in the body of the bill. It Is fraudulently filled rp for £40 and the margin altered to £40. The acceptor is liable to a holder in due course for £40: (larrard v. l,ewis, 10 Q. B. D. m (18:^2). 7 A bill without date and payable months after .iato " was filled up with the date Sept. 24th, 1887, and made payable 18 months after date. Held that it was valid in tii« hands of a bona fide holder for value: Morgans v. Heskeit, T. L. R. 102 (ISOO). Contract not com 21. Every covitraci on a bill, whether it is the pi.'te i.ritiitlrawer's, the acceptor's or an indorser's, is inc.om- plete and revocable, until delivery of the instrument in ordev to give eifect thereto : Exception. Provided, that vvlierc an acceptance is written on a bill, and the drawee given notice to, or according to the directions of, the person entith»d to the bill that he has accepted it, the acceptance then becomes complete and irrevocable : Imp. Act, s. 21 (1). Delivery has bHeri defined in sectiou 2 as ihM Irans fer of posHession, actual or conHtruclive, fporn one periw>:i to iinotluM'; fuid it is lu^re used in that »en«f'. The j acceptance nnirtt be in writing, Ixit the notiflcalion may ' be cither written or verbal. Delivery is necessary also to render the contract of the maker or indorser of a pro missorv note complete and irrevocable. FORM AND INTERPRETATIOS. 115 m " Df'liver.v is the final step necossary to ptM'fcct tbe !^ 21, existence of any wntten contract; and, therefore, as long as a bill or note ijemalns 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, ;5 0,3. IT.Lrr.STRATI0N3. 1. Where the secretary of o comp^Uf. intGncHtiji *o give a renewal note of the conipany, signed hiB name with the word "per" before it, leaving a space before his aj|f// 'ture for the stamp of the company, and sept It to the manii|f4^. #5^0 slgpod the note but omitted to insert tn^ eoiJipany's name, and aelivered it to the creditor, it was held, that (he iustrument never wpi? pnrfeetcd or delivered as a promisHory noi i and the secretary wa? not liable as maker: Brown v. Howland, 9 O. R. 48 (1885); affirmed, 1^ Ont. A. R. lUu (1,SS7). 2. Where a drawee has written his acceptance on the bill, but cancels it and returns it to the holder, who has it noteti for non-acceptance, the drawer ti not liable as an acceptor; Ben- tlnck v. Dorrlen, »J East, im CSOr,). ;!. Where a drawee, after writing his acceptance on the bill, chatnges his mind, and instead of notifying the holder or deliver- ing the bill, erases his acceptance, he is not liable as an acceptor Cox v. Troy, r. B. & Aid. 471 (1822). 4. A debtor marie a promissory note in favor of his cnditor for the amount of bis claim, but died l>efoie deliveriuK it. If given to the creditor subsequently it is not a valid note: Bro- mage v. Lloyd, 1 Ex. '.\2 (1847). 5. A partner who is also agent for a creditor of tlie firm, indorses the firm's name on a bill, and places it among some other papers of the creditor which he has. This is a valid Indorsement by the firm and a delivery to the creditor: Lysaght T. Bryant, Ore. 10 (1.S50). -y rt. The drawe* trrites an acceptance on a bill left with him. The holder calls for \X next day ami is told iit is mislaid. The drawoti hears that the drawer has failed and erases bis accept- ani'o. The foliowinK day he d'slivers the dishonored bill to the holder This is not an aceptance: Bank of Van Diemen's Land V Hank of Victoria, Ti. R 3 P. C. 526 (1871). ilMl mmmmen t 116 §21. BILLS OF EXCHANGE. 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 ts addressed. If it contains a bill, this is a delivery: Ex parte Cotfi, L. K. 2 Ch. 27 (1873), J). A bill is specially indorsed and inclosed in a letter addressed to the indorse.^. It is placed In the office letter box of the indorser, but before posting or delivery is stolen by a clerk, who forges an indor.sement and negotiates it. The property in the bill remains in the Indorser: Arnold v. Cheque Bank, 1 C. P, D, 5S4 (187*i). Requisites 2. As betweeii immediate parties, and as regards very. a reiuote party, other than a holder in due course^ the (lehvery — {a) In order to be effectual must be made either by or under the authority of the party drawings accepting or indorsing, as the case may be ; (6) May be shown to have been conditional or for a special purpose only, and not for tlio purpose of transferring the property in the bill. But if the bill is in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him, so as to make them liable to him, is conclusively presumed. 8. Where a bill is no longer in the possession of a party who has signed it as drawer, acceptor or indorser, a valid and unconditional delivery by him is presumed until the contrary is pioved. Imp. A.ct, 8. 21 (2), (3). " lmmediat«» partios" ai*f those who have direct dcaliugM wUh each other in ivliitioii to a bill, such aj* drawer imd acceptor, drawer and payee, indorger and VVlirn valid deli- very i)re «iimei • prt ed. PnniH fiftoie tni dence. FORM AND INTERPRETATION. next indorsee, A "remote party" taking a bill incom- plete or irregular on its face, or after maturity, or witfi notice of a defect, or without giving value is in no better position. For tlie definition of a " holder in due course," see section 29. Where a bill has been delivered conditionally or for * a special purpose only, and the person n'ho has so re- ' ceived it violates his trust, the owner may recover the bill or its amount from such person or anyone who has taken it with notice: Goggerley v. Cuthbert, 5 B. & P. 170 (1806) ; Alsager v. Close, 10 M. & W. 576 (1842) ; Muttyloll Seal v. Dent, 8 Moore, P. G. 319 (1853) ; Arnold v. Cheque Bank, 1 G, P. D. 585 (1876); Burson V. Huntington, 21 Mich. 415 (1870). Escrow. — A bill or note may be delivered condi- 1 tionally, and upon the happening of the event or fulfil- ment of the condition, no further delivery is necessary. What was before a mere paper writing becomes a valid bill. In the case of a deel the custodian must be a third party. In Bell v, Ingestre, 12 Q. B. 317 (1848), Lord Denimm held that the same principle applied to Indorsees who received bills as trustees. The death of f the parties liable does not prevent the bill taking eflfect: Belden v. Carter, 4 Day 66 (1809); Giddings v. Giddiugs, 51 Vt. 227 (1878). "There \h this distinction between negotiable and sealed instruments: If the ciistodian of the former betrays his trust, and passes off the negoti- able instrument to a bona fide holder before maturity, nnd without notice, all parliiM are bound; but if the instrument be sealed, the rule is otherwise": 1 Daniel, § 68. A bill, complete in form, put into the hands of a third parly as nu escrow is not a valid bill, but a mere paper writing until the ha{)pt'riing of the condition : Chandler v. Beckwith, 2 N. B. (Berton) 423 (1838), 11' I I I §21. I ILLUSTRATIONi. 1. The payee of a promiBBory note, after a writ of attachment had leaued against him, for value iiidorsed It to a bona fl-le "-•iM»fl"''i'rT-«'-tif 118 BILLS OF EXCHANGE t V !i K 21 *^<''^®'" o^^fre its maturity Held, that the iado/aee isyf no — title, as it hart vested in the assignee before its indorsement or delivery: Jenks v. Doran. .', Out. A. R, 5.58 (1880). (But 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) :i A bill was delivered by the acceptor to he drawer for a purpose for wh.';b it became unnecessary. The drawer indorsed it for value to a p'^raon who was aware he had no right to do so. The property in th* Mil remained in the acceptor- Evans v. Kynaer i H & Ad. 528 '1830). 4. Tfi* ^r**" ^ a bliJ <»Te it to a friend to get it discounted. Tlie latt«r iMf <# ijidorse it V/ get it diw;ounted, and only received a part of 1SII0 fff^fmAH. The person who ditic/xinted it was aware of the itM£r. f!m jwye* 'lould ahoy the natuf'^ of the delivery and recovfV iji,^ MMiPiMt df the 9r(it*>Mi. Bastable v. Poole, 1 C. M. & R. *m y)it^. 5. Defead«int 4f^m m ««# «i^ |KHr a d[«1>f/>r of Unm\t and plaintiff Jointly. Jit* Mt/Af Sm fMI Bad defendant indorsed and delivered th« Wi K^ pia «' # *A C/fMitf^. it was dlshonor^rt. and plaintiff sued de < r«M Held, that rbis was not an indorsement and 4iHl^i«ty v ■•* WQt»t4 ff#8 the ^roj^rty: Denton v. Peters, L. R. 5 Q M 47.' 1 1 6. In an action by thr payee of < >> ^ / Ittsory ntt§ fHfUffM I the maker, evXy^nce ia admissible /t itbow a i/:yrol -igreflMmM the rim* of the mating of the note, r*p«t it su'.- ■ not bel the maker could examine f*-e proper!/ for wbleh It Wit§ flv«n, #*»4 determine whether he wo^ld i:ur- chase it Rurkit r r>ialan«x if^< U. 3 22t< ri894) The Uf^ *>«aw />/ 0i/fy§Mh^ 2 and mib Bcction 3 ulford examfiP0 tA *he two ItNtiir //f pr*^o«iptions of law, namely, oon< ' />a*>I dinpuf^iM^r m they ar<' r ued in the language of Kughi^i law; (/T l^gai ifrc^utnytion* and pre8unif>tion« '- ' t 4^- Jure, a» the/ n/f (n)led in the lan)?uage of Tm i . " VoncluBivc pr . >})<> (|unntlly of < 7' dence reet aside as being against evi- dence " : 1 Taylor, § 109. " Legal presumptions are those which are specially attached by law to certain facts. Thej^ exempt from making other proof those in whose favor they «'X)f«t, (frtain of them may be contradicted by other proof; others are presumptions juris et do jure and cannot be contradicted": O. C. Art. 12;J9. A CAi'-i<7Ty AND Ai THORITY OK pAmiEH. 22. Capacity to in/>nr liability as a p«rt^ io ao«kpaoity bill iw co-extensive with capacity to coutraot ; " ***' '**' Provided, that nothint/ in this section shall AtiiAtor enable a corporation to make itself habJc i drawer, acceptor or indorser of a bill, unless it is coinpeteiit to it so to do under the law for the time being in force relating' to such corporation ; Imp. Act, h. n (1). Under the British North America Act, s. 92, s-s, 13, the L(i<;al Legislatures have the exclusive right, under the bead of "civil rights," to legislate regarding the '■apacity to ('ontract, except as to corporations created by or under the aDiiiorify of the liominiou Parliament, and they may be subjt < t indirectly to Dominion legis- lation, regarding some of tfee other subjects tnumcrated in 8e( tlon 91. The first seuteno' of this section, like tln' fl 120 BILLS OF EXCHANGE. Conflict of IttWS. §22 ^'•♦'ater part of the Act, is taken without change from the — Imperial Act. In England it could not give rise to any question, except as to contracts 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 hav(» effect to this extent at least, that no per- son having capacity to contract by provincial law is rendered incapable of contracting as to bills and notes by the present Act. The practical difficulty that will at once arise .will be 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 commer- cial 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 (^ode says: — "Art. 6. An inhabi- tant 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 Com ts when there has been a conflict. Judging from analogy, the leaning appears to be towards the law of the domicile. In the United States, on the other hand, the law of the place of the contract is generally followed as to the capacity of the contracting parties: Htory on Contlict of Laws, s. 102. In England the question does not seem to be authoritatively settled. " When the capacity of a person to act in finy given way is questioned on the gronn.l of his ag«', it is still perhaps uncertain whether the Noliiti(»u of the question will b«' n^ferred iu Kngland to a personal law." that is to the law of the d, and a married woman having separate property n\ay by bill, | note, or otherwise, bind the separate property which she th-'u lia«, or which she may afterwards ac. 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 of the father. He'd, that the father's estate was not liable: Re James, V) Ont. P. R. 88 (1881). .'{. Defendant, a married woman, indorsed certain notes held by plaintiff and wrote him a letter that she '._ad $.''h{,0<)() worth of land in her own name and right. There was no evidence given at the trial aa to when sh^ was married or as to how the property was held for her. Held, that there was not sufHclent evidence to entitle the plaintiff to a judgment against her: Moore v. Jackson, 16 Ont. A. R. 431 (1889).^ See Palllser v. Our- ney, 19 Q. B. D. 519 (1887). ^ 4. A promissory note signed by a wife, separate as to pro- perty, is null, unless authorized by her husband: Quay v. Peltier, '2 Rev de Leg. l.'{7 (1812); Badeau v. Brault. 1 L. C. J. 171 (I8rj7), overruling Rivet v. Leonard. 1 L. C. J, 172 (1848); Danziger v. Ritchie, 8 L. C. J. 103 (18)J4). 5. A wife is not liable on a note made by her jointly with her husband where she received no value: Shearer v. Com pain, 5 L. C. J. 47 (18G0). ,^ JL^ /j^'^ . I 111! 124 BILLS OF EXCHANGE. r.. m ^ OO ^- A husband and wife are both liable on a note given for L business lu 'A'hlch they are jointly interested: Girouard v. Lachapelle, 7 L. C. J. 289 (18(K0. 7. A note made by a wife, separate as to property, In favor of her husband, and indorsed by him for necessaries purchased by her, is binding on her: Cholet v. Duplessls, 6 L. C. J. 81 (1802). f<. A note made by a wife, who is a public trader, for her business is binding on her, although not authorized by her bus- band: Beaublen v. Husson, 12 L. C. R. 47 (1862). 9. Where a minor simply pleaded his minority to an action on ft note given by him, held that he should have pleaded lesion and asked to be relieved to the extent to which he was not bene- fited: Cartier v. Pelletier, 1 R. L. 4G (18t5«); Boucher v. Girard, 20 L. C. J. IM (1S75). 10. A note made by a minor engaged in trade in connection with his business is bindi^.g on him: City Bank v. Lafleur, 20 L. C. J. 131 (187r»); but a note signed and made payable in Mont- real, by an Ontario trader who is a minor, is null, the law of Ontario governing as to his capacity: Jones v. Dickinson, Q. R. 7 S. C. ai3 (1805). 11. A wife separate as to property Is not liable on a note given or indorsed for a debt of her husband: Scantlin v. St. Pierre, 10 R. L. 52 (1879) ; Martin v. Guyot, M. L. R. 1 S. C. 181 <1885); Thibaudeau v. Burke, 20 R. L. 85 (1890). 12. The authorization of a married woman to make a promis- sory note is sufficiently proved by the indorsement of her hus- band: Johnston v Scott, .'< L. N. 171 (1880). 13. The indorsement by a wife, separate as to property, of her husband's note given for goods sold and delivered and charged to h m is null, although such goods may have contri- buted to her support: Bruneau v. Barnes, 25 L. C J. 245 (1880). 14. A promissory note, made by a wife separate as to pro- perty, jointly and severally with her husband, is null and of no effect as regards the wife, such an obligation being prohibited by the terms of Art. 1301. C. C: Chapdelaine v. Vallee, M. L. R. 3 S. C. 380 (188fi); Leelerc v. Ouimet. IS) R. L. 78 (1800). 15. A note signed by a wife for the benefit of her husband, and for which she receives no value. Is null; and this nullity being a matter of public policy, may be Invoked even against a holder In due course: Ricard v. Banque Nationale, Q. R. 3 Q. B. 161 (1893); overruling Kearney v. Gervais, Q. R. 3 S. C. 496 (1893). See Banque Nationale v. Guy. M. L. R. 7 S. C. 144 (1891). VI CAPACITY AND AUTHORITY. 125 16. A husband had a power of attorney to manage his wtfe s ^ OQ business. He Indorsed a nolo in her name to accommodate a friend without authority. Th»- wiff made an aaalgnment and Included this note among her liabilities. The husbr.nd was not a party to the assignment. Held, that the ratification was null, and her estate was not liable: Paquln v. Dawson, Q. R. 4 Q. B. 72 (181(4). 17. A person is liable on a note given by him during Infancy, if, after coming of age, he promises to pay it: Flaher v. Jewett. 2 N. B. (Berton) Ott (18;{5). 18. A married woman is not liable on a note given by her during her coverture; Sinclair v. Wakefield, 13 N. S. (1 R. & O.) 465 (1880). 19. Complete drunlcenness, 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, 13 M. & W. 623 (1845). 20. An infant 20 years and 9 months old accepts a bill pay- ab' " 'n six months. He ratifies the transnction on attaining his majoity and the 1)111 Is negotiated. He is uot liable on the bin: Ex parte Kibble, L. R. 10 Ch. 373 (1875); 37 & 3S V. c. r iV2 (Imp.). 21 A person after coming of age accepts a bill for a debt contracted by him during his Infancy. He is liable to a holder in due course: Belfast Banking Co. v. Doherty, 4 Ir. L. R. Q, B., 13. 124 (1879). . ' 22. An infant trader cannot be adjudicated a bankrupt for debts contracted for trading purposes: Ex parte Jones, 18 Ch. D. 109 (1881). 23. A lunatic, while sane, ?ave a note for a very large sum for a merely moral obligation. Held, that the payee was not entitled to rank on the lunatic's estate for the amount of the note; In re Whltaker, 42 Ch. D. 110 C1889) 24. 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; Re Soltykoff, Ex parte Margrett, [18it]] 1 Q. B. 413. 25. It is not enough that defendant show that he was insane ,| jvhen he gave the note sued on; he must also show that the per- son to whom he gave it knew that he was Insane: Imperial Loan Co. v. Stone, [1892] 1 Q. B. 599. Hi: ^i|:iM, #^ \i h IMAGE EVALUATION TEST TARGET (MT-3) / O €.0 V ^i is t W4 ^^. <' i/j y^ ^ ^3 vW ""^^ 0^ >^/ J^ ^^ %* om 1.0 I.I St. 3 IM 2.0 i.8 1.25 1-4 lilll.6 6' Photographic Sciences Coiporation ^. w. 4^ % A ^ V ^ 73 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) B73-4S03 4f . V"'i;^ n S' '1 126 BILLS OF EXCHii'TGE. i ft r.' Dominion charters. §22. 4- Corporations.— Some corporations are giv'eu Hpt'cial authority to become jjarties 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 corpora- tion may exercise, besides those specially conferred by its title, or by the general laws applicable to its particu lar kind, are all those which are necessary to attain the object of its creation; thus it may acquire, alienate, and possess property, sue and be sued, contract, incur obligations, and bind others in its favor": G. O. Art. .'558. Formerly the right to become parties to bills and notes was almost restricted to commercial corporations; the modern tendency is to extend it to corporations generally. As to comparios incorporated by special Act of the Dominion Parliament or by letters patent from the Gov- ernor in Council, it is provided that, " Every contract, agreement, engagement or bargain made, and every bill of exchange drawn, accepted or indorsed, and every pro- missory note and cheque made, drawn or indorsed on behalf of ihe comjjany 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 binding u])on the company; and in no case shall it be necessary to have the seal of the company affixed to any such cun- Iract, agreenieiit, engagement, bargain, bill of exchange, promissory note or cheque, or to provi> thai the same was made, drawn, a"cepted or indorsed, as the case may be, in pursuance of any by-law or 8[)ecial vote or order, and the person so acting as agent, officer or servant of the company, shall not bi^ therel>y subjected individually to any liability whatsoever to any third person therefor ; Trovided. always, that nothing in this Ad shall be con- strued to authorize the company to issue any note pay- able to the bearer thereof, or any promissory note in- teixled to bi' circulated as money, or an 1li(> not-' of o bank, or to engage in ihe business of banking or insur- ance": R. 8. C. c. US, 8. 35; t. 119, s. 7(5. t\ \ i fe:i. i .. ir'T?!f»!™?^W«Si<«5««if-''.i'S:7' CAPACITY AND AUTHORITY. 127 It is further provided with reference to companies S 22 incorporated by Dominion letters patent that every direc- tor, manat;er ov olUcer of tlie comitany, and every person )\'}^. , „ 1 ./ J .1 '•limited. on its behalf who signs or authori/A'S to ha 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 aj)pear in legibh' char- acters, shall incur a penalty of f2(MI, and shall also be personally liable to the holder of any s.uh bill of ex change, promissory note or checjue for the amount there- of unless the same is duly paid by the company: R. 8. C. c. 119, 8. 79. In the case of companies incori)orated by special Act and subject to the general Act, '' The direc- tors of the company shall be jointly and severally liable upon every written contract or undtntaking of the com- pany, on the face whereof the word ' limited,' or the words ' limiteti liability ' are not distinctly written or printed after the name of the com])any, where it first occurs in such contract or undertaking ": It. S. C. c. 118, s. 39. The provisions of the general Acts of most of the i'ro\mciai provinces regarding companies incorporated by special °^'"''*''''' Act or Provincial Letters Patent regarding the making, a<'ce])ting and indorsing of bills, notes and cheques, are similar to (hose of R. 8. (J. c. 118, s. 35, and c. 119. s. 76, above quoted: see R. S. O. c. 150. s. 33, and c. 157, s. 59; R. S. Q. Arts. 4(589 and 4740; R. S. N. S. c. 79, s. 67; 48 Vict. c. 9, s. 62 (N. B.)\ R. S. Man. c. 35, a. 62 ; Kev. Ord. N.-W. T. c 30. s. 89. Companies incorporated by Lettei's Patent in Nova Bcotia are require*! to add the word " limit<'d " after the nam<» on ev<'ry bill, note or cheque, and e\ery director or manager who signs, issties, or authorizes any bill, note or cheque without this word is liable to a penalty of !|200. and is alstt personally liable for the amount of the instrument unless it is |»aid by the company: R. S. N. S. c. 79. s. 78. A similar i»rovi8ion is in force in the Terri- ^::-^ ■ tories: Rev. Ord. X.-\V. T. c. '% s. 83. ' ■II .» >^ HIiiliil Mi I 128 BILLS OF EXCHANGE. §22. n Ij if I ''i i< t Ripht to makn billn 111 British Columbia, the English Companies Act, 1862, is in force: G. 8. B. C. c. 21, a. 2. By section 47 of this Act it is declared that prominsory notes and bills of exchange shall be deemed to be made, accepted or indors- ed 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, man- ager or officer of a limited company, signs on behalf of the company any bill 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 company incorporated xinder this Act the power to execute bills or notes, but only indic^ites how the power may be exerci8<^d when it is conferred: Ke Peru- vian Railways Co., L. R. 2 Ch. (>17 (18t)7). In England, where the power is not expressly given, it has been '.aid down that it will be implied only when the corporation without it cannot carry on its business, or 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 commercial or negotiable i>apep involves something more than the contracting of a debt, namely, the imposition upon the corporation of the lia- bility to innocent indorsers for debts, whi<'h the corpora- tion is not authorised to contract. See Batenuin v. Mid- Wales Ky. r.o.. L. R. 1 C. P. 490 tlH(5G). It has also been held that this imj)lied power is not possessed by a water works company: Neale v. Turton, 4 Bing. 149 (1827); Broughton v. .Manchester Wat«'r Works, 3 B. & Aid. 1 (IH19); or by n)ining companie:?: Dickinson v. Valpy, 10 B. & C. 128 (1829); Brown v. Byers, 16 M. & W. 252 (1847); Bult v. Morr*>Il, 12 A. & E. 745 (1840); by a sal- vage company: Thompson v. Universal Salvage Co., 1 Ex. 694 (1><48); by a gas company: Brnmah v. Roberts, li Bing. N. C. 963 (1837); or by a cemetery company: Steele CAPACITY AND AUTHORITY. 129 I ■:r^- %t V. Haraipr, 14 AI. & W. 831 (1845). The tendency of § 22. recent decisions, however, is towards a more liberal in- terpretation of these powers: lie Peruvian Railways Co. L. R. 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 - •. A a bill of exchange for the amount: 1 Daniel, §§ 381 S. ILLUSTRATIONS. 1. Under the Act, 7 Vic. c. l(j, the K. M. R. Co. incorporated for repairing vessels, etc., may give and receive notes in the course of its basincss: Kingston Marine R. Co. v. Gunn, 3 U. C. Q. B. 368 (1846). 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., 6 U. C. C. P. 141 (m')6). 3. A manufacturing company will be presumed to be a trading corporation and capable in law of making a promissory note: Farrell v. Oshawa Manufacturing Co., \) U. C. C. P. 239 (t8r.O). I. Debentures or coupons cannot bo considered promissory notes when the company which issues them has no authority 10 make notes: Geddes v. Toronto Street Railway Co., 11 U. C. C. P. 513 (1864). 5. A building society, incorporated under C. 3. U. C. c. 53, may make promissory notes. Snarr v. Toronto Permanent Building and Savings Society, 20 U. C. Q. B. 317 (186!>). 6. The defendants desiring lo raise money drew a bill and requested plaintiffs to indorse it for their accommodation, which plaintiffs did Defendants got it ditcountra, but failed to meet It and the plaintiffs had to pay it. Held, that, assuming defen- dants had no power to draw the bill, they were nevf^rthelesa liable to plaintiffs as for mon' y paid for them: Brockvllle and Ottawa Ry. Co. v. Canadp ^;entral Ry. Co., 41 U. C. Q. B. 431 (1877). 7. Where the holderp of h note sued the president of a cluh personally on a note of tiie club aisned by him aa president, on ii'j:,*b.b,a.— 9 I- m i mm 130 BILLS OF EXCHANGE. i i M is ^;T § 22. ^^*^ ground among others that the club had no power to make i-notee. 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. S., who was the president and treasurer of a company, kept the company's account with a banker in his own name as president. He made a note iu the company's name without authority, which the banker discounted, placing the proceeds to the company's credit. The president paid the money out to creditors of the company whom he should previously have paid with moneys which he had misappropriated. The banker, be'ng in good faith, was held entitled to charge up the note to the company's account: IJridgewater Cheese F. Co. v. Murphy, 23 Ont. A. R. 66 (1896). 0. Municipal corporations have not the right to make notes or accept bills: Pacaud v. Halifax South, 17 L. C. R. 56 (1806); Martin v. City of Hull, 10 R. L. 2.'?2 (1878). 10. A promissory notei of a municipal corporation held good: Ledoux V. The ManicipaJity of Mile End. 2 L, N. 37 (1878). 11. A municipal corporation will be condemned to pay the amount of a nromissory note signed by the mayor and secretary- treasurer in tlie name of the corporation, where it is not proved that the note was given without consideration Corporation of Grantham v. Couture, 24 L. C. J. 105 (1870); Vllle d'Iberville v. Banque du Peuple, Q. R. 4 Q. B. 268 (1895). 12. Where the by-laws of a (company require notes to be signed by the president and vice-president, and countersigned by the treasurer, n 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. 2r»(5 (1879). 13. A building society hot specially authorized to make notes held liable to an indorsee for value: SoclMf^ de Construction du Canada v. Ls Banque Natlonale, .H L. N. 130; 24 L. C. J 22(5 (INSO). 1-1. The by-laws of a mutual assurance company gave the prosidetit the management of its affairs, und it was his duty to sign all notes authorized by the board or by the by-laws. He gave a tiote in the nn ne of the company in settlement of a loss. The company was helu liable to a holder in due course: Jones v. Eastern Townships Mutual F"ire Ins. Co., M. L. R. 3 S. C. 413 (1887). •;!\ ^■)^-1\ ml\ -l\ CAPACITY AND AUTHORITY. !3R, 15. The chairman aud secretary-treasurer of a boarfT^of s ^Q ^s-J school coramissioners have no right to give a note for a debt of -^ L the board -without special authorization: Letellier v. School Commissioners of Ouiatchouan, 16 R. L. 449 (1888). 16. The making or indorsing of a promissory note on behalf of a chari able corporation where liabilitv is incurred is not an act of mer«i administration, and must be either authorized or rati- fied by the governing body to bind the corporation: Banque Jacques C.irtier v. Les Religieuses Soeurs, Q. R. I Q. B. 215 (1892). 2. Where a bill is drawn or indorsed by an Drawing . » , • J • 1 • • , "^r indors- infaiit, minor, or corporation having no capacity ing by or power to incur liability on a bill, the drawing «^m|^t«mt. or indoi'sing 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 upcessarv to the validity of a bill that the / drawer or indorHors should bo liable. The drawer or any indorser may insert an express stipulation negativing his liability to the holder: section 16. As to estoppel of the drawer, acceptor, or indorser of a bill as to cer tain other parties to the bill, see sections 54 and 55. It is to be observed that c^ married woman is not Married Included in the list of incompetent pt^rsons who may ^"'"•"*- become parties to a bill and render others liable theri'on without incurring liability themselves. The clans;' is taken without change from the Imperial Act, and in England she is now practically in the same position as if unmarried. In Quebec, if not separate as to p; operty, she could not validly pass the property in a bill payable to her order, without authorization of her husband, ^ except as against an acceptor, drawer or indorser, who is precluded from denying it under sections 54 and 55. See C. C. Art. 177. "WaaHpHPHHRH?!"?™ ■iPI 132 BILLS OF EXCHANGE. t ...J s i ■ 11 11; ( ,: i i § 22. ILLUSTRATIONS. 1. The holder of a note, payable to a certain society or bearer, may recover from the maker, even although the society has no power to endorse or transfer notes: Hammond v. Small, 13 U. C. Q. B. 371 (1858). 2. A husband, who made a note payable to the order of his wife, is liable to her indorsee: Mclver v. Denuison, 18 U. C. Q. B. H19 (1859). 3. An Indorser pour aval cannot set up as a defence that the note is null because the maker, a married woman, was not authorized by her husband: Norris v. Condon, 14 Q, L. R. 184 (1888). 4. In an action against an acceptor by an indorsee, it is no defence that the drawers and payees were infants: Taylor v. Croker, 4 Esp. 187 (1803). 5. The infancy of the payee is no answer in an action by the indorsee against the drawer: Grey v. Cooper, 3 Douglas 65 (1782); Lebel v. Tucker, 8 B. & S. 833 (1867), Nightingale v. Withlng- tou, 15 Mass. 272 (1818). sifimature 23. No person is liable as drawer, indorser, or eesential />i'iiii i • ■, • to liability acceptor of a bill who has not signed it as such: Provided that — Ex- ceptions. ,-* (a) Where 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 ; (6) 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 sction should be read in con- nection 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 pro« visions of the Act respecting indorse'^. The same rule CAPACITY AND AUTHORITY. would apply to the maker and indorsers of a promis- sory 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 excep- tion. For a consideration of this point see the notes on section 56. If an agent becomes a party to a bill in his own name, his undisclosed principal cannot be made liable on the bill: Beckham v. Drake, 9 M. ft W. 92 (1841); Re Adansonia Co., 43 L. J. Ch. p. 734 (1874). As be tween 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, adniinis trators or other legal representatives of such person r R. S. C. c. 1, s. 7 (22>. It is not necessary that the person charged should have signed with his own liand, it is sufBcient if his name be signed by some otlier person by or under his authority: section 90; and in tiie case of a corporation that it be executed by the proper otti- <^er8, or under the corporate Sical, 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 corpora- tions who purport to draw, indorse or accept on behalf of the corporation, see notes on section 26. As to what is a sufficient signature to a bill see the note on section 3, p. 38. 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 indorse. Held that C. could not be held liable as a new maker: Steer v. Adams, 6 U. C. O. S. ■flO (1839); Jones v. Ashcroft, 6 U. C. O. S. 154 (1841). 188 §23. " Person " iBfined. *am&M^ lUPsseBnasmm 184 BILLS OF EXCHANGE. r^ : S PI H r ! ?=! c Qrt 2. A party indorsiug his name on the back ot 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, indor- ser or guarantor: West v. Bown, S U. C. Q. B. 290 (1847); Thew v. Adams, ibid., 291 (1838); Wilcocks v. Tinning, 7 U. C. Q. B. 372 (1850) 3. A. made a nole payable to B. or bearer. D. indorsed i^ and was held liable to B. as holder of the note: Vanleuven v. Vandusen, 7 U. C. Q. B. 17(5 (1S4J»). 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. (H: (1849). 5. Defendant Indorsed in blank as security for the maker a promissory note, payable to plaintiff, but not negotiable. Held, that defendant was not liable as a maker: McMurray v. Talbot, 5 U. C. C. P. 157 (1855). 6. W. made a non-negotiable note ify plaintiff for mon''y lont, and defendants Indorsed as sureties for W. One of them paid Interest and both promised to pay. Held, that thay were not liable as indorsers or on an account stated; Skilbeck v. Porter, 14 U. C. Q. B. 430 (1856). 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, IS) O. R. 603 (1890). Overruled by Robertson v. Lonsdale, 21 O. R. 600 (1892). 8. Where a promissory note was drawn payable to the order of the maker, and he did not Indorse It, the indorsers were held not liable as indorsers pour aval or otherwise, the instrument not being a promissory Bote under Arts. 2.S44 and 2345, C. C: Trenholme v. Coutu, Q. R. 2 Q. B. 387 (1893). 9. Where three persons indorsed a note which was 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) 5 (1859). 10. A person who had put his name on the back of a note . before its delivery to the payees, held not liable to them as an indorser: Burns v. Snow, 9 N. S. (3 G. & O.) 530 (1875). 11. A note payable to P. was indorsed by G. lengthwise ort r, - the note, and then by P. G. was held liable as an Indorser: - McLean v Gnrnler, 14 N. S. (2 R. & G.) 432 (1881). CAPACITY AND AUTHORITY ns 12. Y. signed a non-negotiable note, and H., who agreed to Join blm in It, wrote his name on the back, saying it was " a . Joint note or better than a Joint note." Held, that H. was liable as maker: Piers v. AaU. 18 N. B. (2 P. & B.) 34 (1878). 13. 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 tako effect as a promissory note, he is liable ah maker: Bell v. Moffat, i;0 N. B. (4 P. & B.) 121 (1880). 14. 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). 15. 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. 8(j3 (18:^7). 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 (1833). 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. 417 (1886). §23. Assumed Nams.—A person may adopt whatever name he pleases in his busine':.^ dealings, unless there be some special reason against his using that particular name; and in such a ease the adopted name is in law equivalent to his actual name. Thus an individual may carry on business in a Arm 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. ^i ■I ILLUSTRATIONS. 1. A bill drawn and Indorsed 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; Prestwlck v. f 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 his liability and promised to pay. Held, that he was liable as smmm mmmm 13G BILLS OF EXCHANGE. §23. acceptor: LlnduB v. Brad well, 5 C. B. 583 (1848). See also Ross V. Codd, 7 U. C. Q. B. at p. 74 (1850); and Trueman v. Loder, 11 A. & E. at p. 504 (18-10). 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., 5 Cash. 158 (1849). 'I * I! \' t Firm Signature- — The signature of a firm is deemed to be the signature of all those who are partners iu the firm, whether working, dormant or secret, or whoj by holding thf mselves^but as partners, are liable as such to third parties: Poolej v. Driver, 5 Ch. D. 458 (1876); Gumey 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 on the principle contained in this clause: section 17. The partners are presumed to h.ave given each other author- ity 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 com- mercial partnerships each partner will be presumed to have authority to sign the lirm name as drawer, acceptor, maker or indorser to commercial papar for the business of the firm. If a partner sign the firm name on his private business, the firm is not liable ex- cept to a holder in due course: Bank of Australasia v. Breillat, 6 iVloore P. C. 152 (1847); Wiseman v. Easton, 8 L. T. N. 8. 637 (1863). In civil or non trading partnerships there is no su h presumption, and the partner signing the firm name may make only himself liable: Dickinson v. Valpy, iO B. & C. 137 (1829); Thicknesse v. Bromilow, 2 Cr. & J. 425 (1832); Ricketts v. Bennett, 4 C. B. 699 (1847); Gar- land V. Jacomb, L. B. 8 Ex. 219 (1873). But the others may become liable by estoppel or ratification : sec- tion 24. CAPACITY AND AUTHORITY. 137 ILLUSTRATIONS. § 23. 1. Where the drawing or accepting of bills la not a neces- sary pari of the business o' a firm, the fact that bills wore drawn and accepted with defendant's knowledge while he was partner 1h sufficient to render him liable: Lee v. McDonald, 6 U. C. O. S. 130 (1H41). 2. Where the plaintiff knowingly received a note indorsed for the accommodation of the maker by on<^ partnt-r without the co-partner's authority or knowledge, the latter is not liable: Harris v. McLeod. 14 U. C. Q. B. 104 tlSTMi); Royal Canadian Bank v. Wilson, 21 U. C. C. P. 3G2 (1874). 3. A holder who received In good faith before maturity a note indorsed in the name of a commercial firm by one partner, ' Is entitled to recover against the firm although the co-partner did not authorize the indorsement which was for the accommoda- tion of the maker: Henderson v. Carveth, 10 U. C. Q. B. 324 (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, !."» Grant, Chy. 269 (1868). 5. A draft was made on a firm and a partner ma'' 1 it " good " adding his own initials Held, that the firm was not liable: Hovey v. Cassels, 30 U. C. C. P. 230 (1879). G. 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. 'M (1881). 7. Plaintiffs discount' "" 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. W^here a person held out to be a partner gave a note in the name of the firm for money borrowed, and vrhich was to be kept secret from the other partners, the lender cannot recover from the other memberB of the firm: McCouuell v. Wilkins, 13 Ont. A. R. 438 (1885). 9. Where plaintiff took a note which had been fraudulently signed by a partner In the firm name after dissolution, but before 1 ■■',■ / 'i -1 :; f-ii rnuH mmmmm 138 PILLS OF EXCHANGE. |; j; 'l lii V' i e OQ being adverUaod, and plaintiff knew nothing of the f rm or Us _I L members, held, that the oth^^r partner was not liable: Standard Bank v Dunham, 14 O. R. 67 (1887). , 10. A note made fraudulently by a partner in the firm name binds the partrerahip in the hands of a bona fide holder for value: Walter v. Molsons Bank, Ramsay A. C. SO (1877). n Where by the deed of dissolution of a partnership, one partner was given authority to sign Dotes in the firm's name, and another partner, when sued on such a note, pleaded that it «\'ap given without his knowledge in the mate of a terminated co-partnerahip, he was held liable: Whita v. Wells, 1 L. N. 87 0878). 12. A r irtner made notes in the firm's name, forged the name of cUe payee, gut the notes discounted at the bank, and applied a large part of tho 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). 13. 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 Arm, to raise money for the other. The bank which discounted the note was av/are of the facts. Held, that the partner who was ignorant of the making was not liable to the bank: C'^eighton V. Halifax Banking Co., 18 S. C. Can. 140 (1800). 14. In au action by a bona fide holder against a firm as indorsera of a note, it is no defence that it was indorsed fraudu- lently by one of the firm, and for matters not relating to ihe business of the partnership: McLeod v. Carman, 1' N. B. (1 Han.) 692 (18«il>). . 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 partnership, the onus is on him to prove the knowledge or assent c' each partner: Union Bank v. Bulmer, 2 Man. Ji ) (1885). 1(5. 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 accept- ors of the bill: Quebec Bank v. Miller. 3 Man. 17 (1885). 17. Where a bill in 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 i ! iipmimuiitJuaiammm ..^i...^i-J.^i',-..Lv :apa'^itv and authority. 13» authorizes the payment thereof: King v. Smith, 4 C. & P, 108 R OO (1829); Lewis v. ileilly, 1 Q. B. 349 (1841). Contra, 1 Daniel, _l_!zZ_ § 370«, and cases there cited. 18. Wher? a member of a firm in fraud of his partner accepts a bill in a name which is not the regular lirm name but reseiubles It, the latter is not liable. P^aith v. Richmond, 11 A. & E. ;«9 (1840); Kirk v. Blurton, S) M. & W. 2S4 (1S41); Royal Canadian Bank v. Wilson, 24 U. C. C. P. '.VI (1874)-. ' 19. A person carries on business in his o-vn name, but has a. dormant partner. He accepts a bill in the common name on his private account. If the dormant partner can show that the bill is not a firm b'.ll, he is not liable: Yorkshire Banking Co, v. Beatson, j C. P. D. \m (1880). 24. Subject to the provisions of this Act, where Forfreti or a, signature on a bill is forged or placed thereon it^Tsigna without the authority of the person whose signature "'^*'' it purports to be, the forged or unauthorized sig- nature 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 payment of the bill is precluded from setting up the forgery or want of authority : Provided, that nothing in this section shall affect Proviso. the ratiticatioii of an unauthorized signature not amounting to a forgery : And provided also, that if a cheque, payable to order, is paid by the drawee upon a forged indorsement out of the funds of the 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 80 paid, or no defence to any claim made by the drawee for the amou'^.t so paid as the case 11 140 BILLS OF EXCHANGE. 5 24. ™ay ^Je, unless he gives notice in writing ot such forgery to the drawee within one year after he has acquired notice of such forgery ; and in case of failure by the drawer to give such notice within Pa ment ^^^' ®^^^ pcriod, such chequc shall be held to have on forged bccu paid in due course as respects every other inc!l<> oIVi'ih!!* aiui liiibl«> lo lilt' r«>llo\viii^ |iiitiislMii(>ii( : (A) To iinpriH- oiinion( for life If (lie (ItKiinicnl for^od purporlM to ln', or WJiM fiit«Mi(ltMl l»v llic otVriulor to l>;' uiidcrHlood to be. or to bv iiw'H iiol troat of bills forjijod by bfiuj; fra»nbil«'ntly altJMVd. For IIumc, wm' hoc- tion (>;{ A .si).'natur(' that is wholly niianlhorizcd, wht'tlitT |Mir])ortiiij; to hr l>y jtroruratiou or ollifrwisc, is as \n- ctTt'ftUiil to rony^'y title to a. bill as a forged signature, I'Xi't'pt an against a party who is pr»'clud«'d or estopped from setting up the forgery or want of authority, '* A signature placed on u bill, without bring author- Ired, but not amounting to a. forgery, may be ratilled. It has been laid down that a forgery c.iium>t be rntitled. and the languajro of the tlrsl ()i'oyiso of thi section wojild seem by implieation to suslairi that yiew. In llrook y. lio(»k. h. \i. « Kx. S!> tlHTlt. (^hiet Harou Kelly, speaking for (he majority of the court, says, p. 100: "In all the cases «'!ted for the plaintilV, the act ratified Nyas an act pretended to haye b.'en di>ne for or under the authority of tlu' party sought t« he chiti-ged; and such Nvould haye been The ease ln're if Jones had pretended to have had the authority of the defendant to put his name to the note, and that \\( had signed the note for the defendant ace(H'diugly. nnd had thus in — — dueed the plaintilf to take it In that ease, although ' there had been i»o previous authority, it would have been competent to the defendant to ratify the act. But hero Jones had forged the name of the defendant to the :) ,£XiOiSffiaafui^ CATAi'lTY AND AirmoiHTY, u:{ t:(il<>, ;iniinl nitiflf'iitiori or HlatcrniTit. A^aiM, in IIm- <-]iHfH ritfil, Hk' act (lonr, tlioii^j^h utuiiit iioH/.cd a) tin- (iin<', waw a <'ivll art, atitl <-aj>al)l«' of Ix-inK uiadf j^otd Itv II HnbH<-(|iii'iil rcco^nilion or dcclaralioii; hut no aiith(»ril.v is to he found (hni an a(«'m lidoptcd by Hu- (/ourl of Appeal in (hilario: McnluinlH' ISanU v. liUcuH, Ifi Hnl. A. It. DT.'? (IBS'.)); and anirnic.l by the Hujironic (iourt of (/anada in Ih- «iarno cuhc: 18 a 0. Oan. 704 (IHJM>). He.- alHo La Ranriue .Ja,c(jueH earlier v, l-a IJaiupn d' Iliiar^'iie, 1.'', App. CaH. (ISisT) a« p. IIS. In I1h> IJniled Riaien, liowevep, it han been held liiat I a forj^er/ may I»e ratilled: rni<»n Hank v. Midr. (IHdr)); (;i'e<'n(leld Itank v. (Jiaftw, 4 Alir'n, 447 (IH(12); Howard v. Duncan, !{ l.auHinK I7r) n«7()); but there are deciHioiiH therjr to th(* contrary: MtHugh V. Hchuylkill Oo., r> Am. Hep. 445 as7I); HhiMJer v. Van- , dike. 92 I'eni.. HI. 441) (1880); lleriry v. ITeeb, 114 Ind. Ii7r> {1HK7). Home reniarkw of Lord Blackburn In liie Heototi (•ase of .MiKenzie v. The liritiHli Lin<;n C(t.. , would appear to HUHlain the posi- tion that a forgery may be ratified; but in tliat case it WOH h^'ld tiuit there had been no ratlHcati(m, and it was really a er8on from whom he received it, to recover the amount he paid for the bill, under sections 55 and 58. ILLUSTRATIONS. 1. Where defendant's name was signed by a nephew for whom he was In the habit of Indorsing on purchases from plain- •^ni'f_r .'-nt r r -ri^^w^r ■^j5f«j?2™f^ CAPACITY AND AUTHORITY. 145 tiffs, and he had acknowledged his liability and asked for time, c 04, and only denied his liability after his nephew had absconded. !, Held, that he had precluded himself from disputing his liability: Pratt V. Drake, 17 U. C. Q. B. L'7 (1858). 2. A cheque to the order of a company was cashed by a tank on the Indorsaticu of the secretary. The by-laws required the signature of the president also. The secretary had on previous occasions Indorsed in the same 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. 330 (1887). 3. Defendants separately called at plaintiff's bank and examined a bill to which their firm name had been forged. They both examined it closely, and one of them used words throwing aoubts as to lis genuineness, and gave an evasive answer as to its payment. The other promised to send a cheque for it the next day. They were held not to be precluded from setting up the defence of forgery: Merchants' Bank v. Lucas, 15 Ont. A. R. 573 (188'J); affirmed in the Supreme Court: 18 S. C. Can. 704 (1890). A forged bill or note cannot be ratified: Westloh v. Brown, 43 U. C. Q. B. 402 (1878); Merchants' Bank v. Lucas, supra. 4. The holder of a promissory note whose title was derived from a forged indorsement, although he acted in entire good faith, cannot recover the amount of the note from any ot th<5 previous Indorsers: Laru? v. Bvanturel, 2 L. C. L. J. 112 (186fi). 6. Wben the maker f^' 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 consequ'jnce refrained from prosecuting the in- dorser for forgery; held that the maker was liable and was precluded from setting up the defence of forgery: Union Bank v. Farnsworth, 19 N. S. 82 (1886). (5. Plaintiff, a sea captain, deposited with the defendants |1,0(H>, and took a deposit receipt payable to his order, which he left with K., the managing owner of the vessel, who indorsed plaintiff's name and drew the money. Plaintiff was absent three years, and on his return R. confessed, promised to pay the money and gave a mortgage as security. Plaintiff was agair absent two years, and when he returned R. had absconded. The jury gave a verdict for plaintiff, but held on appeal that by withholding from the bank for two year, he knowledge he had, plaintiff by his laches was estopped from recovery: Scott v. Bank of New Brunswick, 31 N. B. 21 (1891). M'l,.B.E.A.— 10. 146 §24. .41 BILLS OF EXCHANGE. 7. Where a note 1b 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 (17{K>); and If he collect on the forged indorsement he is liable to refund: Johnson v. Windle. 3 Ding. N. C. 225 (1830); Robarts V. Tucker, Ki Q. B. 560 (1851); Ogden v. Benas. L. R. 9 C. P. 513 (1874); Carpenter v. Northborough National Bank, 12.'J Mass. 60 (1877); Ryan v. Bank of Montreal, 14 Ont. A. R. 533 (1887). 8. If a party whose name is forged on a bill acknowledge* 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 setting up the defeuce of forgery to the indorsement as well as 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 bank. The payee can recover the amount from the bank: Orr v. Union Bank, 1 Macqueen H. L. 513 (ia>l). 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. 432 (1865). 13. A partner fraudulently indorses for a private debt a bill payable to the firm. The indorsee collects the money. The 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 responsible tor a note dated, etc., bearing my signature." The ratification is illegal and he is not liable: Brook v. Hook, L. R. 6 Ex. 89- (1871). 15. Before discounting a bill plaintiff went to the acceptor, and asked him if he had accepted bills for the drawer. Ho said he had but was not shewn the bills. The jury found for the m CAPACITY AND AUTHOHITY. 147 defendant; the Court refused a new trial, the Judge not saying 524. that he was dissatisfied with the verdict: Levinson v. Young, -1 1 T. L. R. 571 (1885). 10. When a bill becomes due and is presented for payment, and is paid in good faith, and the money is received in good faith, . if such an interval of time has elapsed that the position of the holder may have been alter :1, the money so paid cannot be re- covered fro the holder, although indorsements on the bill sub- sequently provf to be forgeries: London & River Plate Banic v. Bank of Liverpool, [ISOG] 1 Q. B. 7. 25. A. signature by procuration operates asprociira- notice that the agent has but a hmited authority to tures'!'^"** sign, and the principal is bound by such signature (jnly if the agent in so signing was acting within the actual limits of his authority. Imp. Act, s. 25. - Whenever an anthority purports to be derived from a written instrument, or the agent signs the paper with the 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; aiul if M'ithout exam- ining into it when ho knows of its existence — and espe- cially if he has it in his possession — he ventures to deal with the agent, he acts at his peril and must bear the loss if the agent has transcended his authority: Daniel, § 280. Where an agent draws, accepts, makes or indorses " per pro.," the taker of such a bill or note is bornd to inquire as to the extent of the agent's authority. Where an agent has such authority, the abuse of it does not affect a bona fide holder for value. The apparent authority is the real authority: Bryant v. Qi^.*bec Bank, [1893] A. C^170; Westfleld Bank v. Cornen, 37 N. Y. (10 Tiffany) 32S (1867). * T 148 ^ §25. CorjKjra- tion officers. AgentR. Partners. BILLS OF EXCHANGE. The same rule applies where a bill is signed on behalf of a corporation by its officers or agents. In such a case the statute or b.v-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. 126. An agent 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 all persons of sone mind are capable of becom ing agents to sign bills. This applies to infants, mar- ried women, etc. ' As to the personal liability of an agent who tran ncends his authority or who signs without authority, eee 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. 1807. The giving of a note or the drawing or accepting a bill in the firm name even for partnership business would not be such an act, but would require special authority from the co-part- ners: Dolman v. Orchard, 2 G. & P. 104 (1825); Bank of Montreal v. Page, 98 111. 110 (1881). ■ - ILLUSTRA.TIONS. ^ ' 1. A general power of attorney to an agent to sign bills, notes, etc., and to superintend, manage and direct all the affairs of the principal, gives him a power to Indorse notes: Auldjo v. McDougall, :\ U. C. O. S. 199 (183.3). 2. D. was a clerlt or agent keeping a store at L. for defend- ant, who had sanctioned his purchasing certain goods. Held, that the circumstancos gave D. no implied authority to sign defendant's name to a note: Heathfleld v. Van Allan, 7 U. C. C. P. 340 (1857). 3. J. M. B. 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 " .1. M. B., agent of the -IJ'fl WH^ q-T'g"- '■■■^jr'^";'»T| CAPACITY AND AUTHORITY. Itf executors of E.," ami others "the executors late E., per pro. B.," R Og and delivered them to M., an executor, who was financially em- L banassed, and who discounted them with plaintiffs on his private account. Held, that the indorsements were sufficient in form, but not within the scope of B.'s power, and the other executor was not liable: Gore Banlt v Crooks, M II. C. Q. B. 251 (18«)7). 4. When the president was authorized by the directors to sign a note in the name of the company, irregularity in the appointment of the directors was not sufllcienl to destroy such authority, when the company received value and the plaintiff took the note in goc faith: Currier v. Ottawa Gas Company, 18 U. C. C. P. 202 (1808). 6. A Wife bought her husband's insolvent estate and the business was continued by him. she having given him a power of attorney. Held, thai his agency was not limited by the writing, but might be ascertained from any admissible evidence, and she was held for notes given by him not strictly within the written authority: Cooper v. Blacklock, 5 Ont. A. R. .'')35 (1880). (>. Where an agent fraudulently gave a note. v,hich was, however, within the scope of his authority, the principal was held liable to a bona fide holder for value: Molsons Bank v. Brockville, 31 U. C. C. P. 174 (1880). 7. In the absence of proof to the contrary the secretary of a commercial company will be presumed to have authority to indorse notes payable to the order of the company; Wood v. Shaw, 3 L. C. J. 173 (1858). 8. A non-commercial corporation is not liable on a bill drawn by the manager upon and accepted by the secretary in his capacity as such, which is not authorized by the board: Brown- ing v. British American Friendly Society, 3 L, O. J. 306 (1859). 9. Where a promissory note is signed by procuration, proof of the due execution of such procuration must V>e made to entitle thf) plaintiff to recover judgment in an ex parte suit on a note; Ethler v. Thomas, 15 L. C. J. 225; 17 L. C. J. 79 (1870). See also Joseph V. Hutton, L. C. R. 299 (ia')9). 10. A power of attorney to a husband to administer the ' affairs of his wife generally, and to mortgage her property, is not an authority to sign her name to a promissory note, and verbal evidence of his right to sign could not be received, his powers being governed by the terms of the written power of • ; attorney: St. Jean v. The Metropolitan Bank, 21 L. C. J. 207 •• (1876). n E I n \i ,■-=■■-:'- — r ■ 150 §25. BILLS OF EXCHANOE. 11. An agent under a general power of attorney cannot bind . hl8 principal by blU or note: Castle v. Baby, 5 L. C. R. 411 (18r»4); Messier v. Davlgnon, 3 L. C. L. J. 07 (1807). 12. The presldfnt of a company Incorporated under the Canada Joint Stock Companies' Act, 1877, will be presumed to have authority. In absence of proof to the contrary, to sign a promissory note on behalf of the company: Drice v. The Morton Dairy Farming Co., L. N. 171 (18Ki). Vi. Where a cheque was payable to the order of " William Almour," the bank was not justified In paying It on the indorse- ment " William Almour, per A. B. Almour, " unless the authority of the latter to indorse were proved: Almour v. La Bauque Jacques Cartler, M. L. R. 1 S. C. 142 (1.884). 14 The by-laws of a mutual insurance company gave the president " the management of the concern and funds, with power to act in his discretion and judgment In the absence of specific direction? from ihe directors. ' It was also made his duty " to sign all notes authorized by the board or by virtue of the by-laws." Held, that the company was liable on a note In Battlement of a loss, signed by the president: Jones v. E. T. Mutual Fire Ins. Co., M. L. R. 3 S, C. 413 (1887). 15. A power of attorney to draw, accept and indorse bills of exchange, promissory notes, bills of lading, delivery orders, dock warrants, bought and sold notes, contract notes, charter parties, etc.. Includes the power to make and sign promissory notes, more particularly where the whole tenor of the document shows the intention to confer powers of general agency: Quebec Bank v. Bryant, 17 Q. L. R. 78 (1891); aflflrmed on appeal, and In the Privy Council, Bryant v. Quebec Bank, [1893] A. C. 179. 10. A power of attorney, whether bestowed by a written in- strument or inferred from a train of circumstances, must be con- strued strictly. The power of attorney in Quebec Bank v. Bry- ant, supra (15) does not give the agent power to borrow money for the principal: Banque du Peuple v. Bryant, 17 Q. L. R. 103 (1891) ; reversed on appeal, but the original judgment was restored in the Privy Council: Bryant v. Banque du Peuple, [1893] A. C. 170. 17. Where a note is payable to a testator, the Indorsement I by one of several executors held sufficient: Almon v. Cock, 3 N. S. (2 Thomson) 2(55 (1847). .,,,,,,>• , , I CAPACITY AND AUTHORITY. 151 18. The agent of a company gave a mortgage note In Its & OR name for the balance of the purchase price of land. The com- *. pany with knowledge of the fact did not repudiate his act, but took possession of the land. Held, that it w^s estopped from denying its liability on the note; Ryan v. Terminal City Co., 25 N. S. 131 (ISOIi). 19. The power of an agent authorized to draw a bill ceases with the drawing, and if the principal is afterwards reueved, the agent cannot revive his liability: McGhle v. Gilbert, 6 N. B. (1 Allen) 235 (1848). 20. A bill drawn on a merchant was accepted by his clerk, " per pro." The drawee in speaking of the bill some months later said tiiat the drawei should pay it as it was for his benefit. Held, that this was sufficient to leave to the Jury the question of whether the clerk's authority had been recognized: Morrison v. Spurr, 8 N. B. (3 Allen) 288 (l&W). 21. The indorsee of a note died intestate. His widow who \ was not administering the estate could not indorse it, even to pay funeral expenses and her husband's debts: Gerow v. Holt, 24 N. B. 412 (1884). •22. B., a member of a firm, gave a power of attorney to pccept bills in his name in respect of his private business, to his co-partner S. The latter accepted a bill in respect of partnership business in the name of B. and the bill was negotiated. Held, that B. was not liable: Attwood v. Runnings, 7 B. & C. 278 (1827). 23. A confidential clerk was accustomed to draw cheques for his employeni, and In one Instance at least was authorized to indorse for them, and in two instances they received money • through his indorsing their name. These facts were evidence to go to a jury as to his general authority to indorse: Prescott v. Flynn, 9 Bing. 19 (1832). , lr 24. A power of attorney giving full power to manage certain real estate, followed by general words giving full power to o o all the business of the principal, does not authorize the agsnt to Indorse bills in the name of the principal: Esdaile v. La Nauze, 1 Y. & C. 394 (183r>). 25. in an action against an acceptor of a bill of exchange, accepted in his name by another person, when evidence had been given of a general authority in that person to accept bills In de- fendant's name, an admission by defendant of liability on another bill so accented, is confirmatory of the former: Llewellyn V. Wlnckworth, 13 M. & W. 598 (1845). w»w^fes?^Mg-JTOCT*^^3 ? r a mtf w^^'^^mmmm 152 BILLS OF EXCHANGE. ;i OK 26. The party taking an acceptance or indorsement per pro- j — ^ curation caaaot hold the principal if the authority given be ex- | ■^ ': V- ceeded: Alexander v. Mackenz;**, C. B. TOO (1848); Stagg v. ^ hJlllott, \2 U. u. N S. 3.73 (1862); North River Bank v. Aymar, 3 . Hill 202 (1842), ... , •,< ., . 27. M., a traveller, obtained from a customer of his employ- errf an acceptance in blank, which Ti(^ signed as drawer and In- dorser and fraudulently negotiated It was proved that on a former occasion he had obtained from the customer a blank acceptanr-e which his employers received in payment, and on this occasion he showed the customer a letter that his employers 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. mO (I87r>). 28. An agent appointed to wind up the business of a firm held not to have authority to accept bills drawn on the Arm, or to accept a bill in the name of a partner: Odell v. Cormack, 1!) Q. B. D. 22:5 (1887). 20. Defendants' manager had authority to draw on f :ir bank account for tho business, but not to overdraw or to borrow. Having overdrawn the account for nis own purposes, he borrowed money from plaintiff, and gave him a cheque of the firm, paying the money to the firm's credit in the bank, and using it for their business. It was held, that plaintiff could not recover 1 . on the cheque as it exceeded the authority given, but defendants \\^r& liable for money and had received: Reld v, Rigby, [18941 2 Q. B. 40. ? 3(». A power of attorney to draw, indorse, or accept bills, does not authorize the agent to become a party to accommodation paper: Wallace v. Branch Bank, 1 Ala. 565 (1840); North River Bank v. Aymar, a Hill (N. Y.) 202 (1842); Kingsley v. State Bank. .'{ Yerger (Tenn.) 107 (1832); German Nat. Bank v. Studley, 1 Mo. App. 2(!0 (1870). But the pr'ucipal would be liable to a holder in due course: Edwards v. Thomas, (iO Mo. 4(]U (1877); North River Bank v. Aymar, supra. Signing as 26. Where a person signs a bill as drawer, r..preHi.n- indorser or acceptor, and adds words to his sigua- capacity. tiire indicating that ho signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon ; but the mere addition CAPACITY AND AUTHORITY. 153 to his signature of words describing him as an § 26. agent, or as filhng a representative character, does not exempt him from personal b'-ibility: 2. In determining whether a sigi-.iure or a bill is that of the principal or that of the agent by whose hand it is written, the construction most favorable to the validity of the instrument shall be adopted. Imp. Act, s. 26. Agents and Officers o^ Corporations.— Notes and bills are constantly made, accepted and indorsed by agents and otBcers of corporations in such a way as to make it very difticult to say whether the signers are liable personally, or whether tlie principal or corpora- tion is liable, or whether both are liable. The ques- tion in every such case is one of construction. Whose note cr bill does it purport to be ? I^, ' u the true con- struction of the instruni'mt, 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, unletjs it is the note or bill of both. On the other hand, 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 fre- quently more conclusive on this point than the words that may follow the signature. The first impression on reading the section would bf< that it was intended to relax the somewhat severe rules that have been followed, in England and Ontario especially, in holding officerg of companies personally liable on bills connected with the businosK of the com- I>uny. It remains to be seen whether the Courts will so interpret it. In the United Stales there has been a great conflict of decisions, but the tendency seems to be, on the whole, nt n ^ •;•'• ^.|air':i:?"Pl^-i #w»'*j|«igf^ 154 BILLS OF EXCHANrK ' Officers of Corpora- tions. §26. *** relieve oflScers of corporations in ceitain cases where they would have been held liable in England or Ontario. In making promissory notes on which a comppny alone is to be liable, ofHcers would do well to use the name of ttie company in the body of the note and not the orJinary " I " or " we ;"' and if agents would sign the name of their principals first, followed by " per " or " per pro." before their ov" names, there would be lees danger of ambiguity. In drawing bills the name cf 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 drawee that can accept. It is on this account that officers of companies have been held to be personally liable on bills where ths accept- ance would appear to be in the same termti as promis- sory notes where the officers signing them have been relieved from personal liability. The officer of a company who becomes a party to a bill 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: R. S. C. c. 119, s. 79; 80 also in the case of companies incorporated by letters patent in Nova Scotia, the North-West Territories and British Columbia: see ante p. 127. Where from the terms of a bill, or from the words added to his signature, it is apparent that the person signing is merely '^oing so in the name of and on behalf railv/ay, and signed it " J. J. Robinson, commissioner." He was held personally liable: Peele v. Robinson, 9 N. B. (4 Allen) 501 (1800). 15. A note signed " A. G. Bowes, President Gazette Publish- , Ing Co.," is not the note of the company: Canada Paper Co. v. Gezette P iblishlng Co. (N. B.) 13 C. L. T. 151 (1893). 10. A note reading " We prom'se to pay ' etc., was signed " W. D, Rorison. Manager Otter Tail L. Co." The company received value for the note. Held, that the note was the com- pany's, and not Rorison's individual note; Falrohild v. Fergu- •j ioii, 21 8. C. Can. 484 (18JI2). 17. A man who puts his name to a bill of exchange makes himhelf porsonally liable unless he states upon the face of the bill that he subscribes it for another, or by procuration of an- other. Unless he says plainly " I am the mere scribe," he be- comes liable: per Lord Ellenborough, in Leadbitter v. Farrow, 5 M. & B. at p. 349 (1810). ..uiXJKffisSSSSS ^m rv^' I t CAPACITY AND AUTHORITY/ . 18. Defendants gave a note !n these words: — " We the under- signed being members of the executive committee, on bthalf of the L. & S. W. Ry. Co-operative Society, do Jointly promise to pay," etc. Held, that they were personally liable: Gray v. Raper, L. R. 1 C. P. <>1M (18ii2 (1867). lit. On a promissory note In the words " I promise to pay " etc., signed: "For the M. T. & W. Ry. Co.— John Sizer, secre- tary," held that the secretary was not personally liable: Alex- ander V. Sizer, L. R. 4 Ex. 102 (18ti9). 20. Defendants sign a note, " We, the Directors of the I. M. S. Co., promise to pay," etc., and affix the company's seal. They were held personally liable: Dutton v. Marsh, L. R. 6 Q. B. 361 (1871). See Penklvil .'. Connell, 5 Ex. .'J81 (1850): Maclae v. Sutherland, 3 E. & B. 1 (1854). 21. A bill of exchange addressed to the B. & I. Co. which had no power to accept bills, was accepted thus- " Accepted for and on behalf of the B. & i. Co , G. K., F. S. P. dlrwtars, B. W., secre- tary. " The directors and secretary were held personally liable to a holder in due course, as by their acceptance they represented that they had authority to aec»,pt for the company: West London Commercial Bank v. Kltson, IS Q. B. D. 360 (1884). 22. Where a note read, '* I premise to pay," etc., and was signed " For the Providence Hat M'f'g. Co., A. B., agent," it ' was held to be the company's note, sjid not the agent's notwith- standing the words "I prcjilse": Emerson v. Providence H. M. Co.. 12 Mass. 237 (181.5). •• . ;- - ■ . -' 23. Where a bill contained the direction to " place to account of Derby Fishing Co. ' and was signed " A. B., President," the company was held to be the drawer: Witte v. Derby Fishing Co., 2 Conn. 260 (1817). v , . ;. ,v i 24. " We, the subscribers, jointly and severally promise," etc., and signed " For the Boston Glass Manufactory, A. H & C," was held to bo the note of the individual makers: Bradlee v. Boston Glass Co.. 16 Pick. 347 (183.5). 25. A promissory note which roads, "four months after date we promise to pay to the order of (Jeorge Moebs, Sec. & Treas 11,061,24 at M. Bank, value received," signed " Peninsular Cigar Co., Geo. Moebs, S»>c. & Treas." Is a note drawn by, payabhi to. and Indorsed by the ooiporatlon, and without ambiguity In the Indorsement; and evidence is not admissible to show that It was the intention of the Indorser In making the Indorsement to bind hlmsell personally: Falk v. Moebs, 127 U. S, 697 (1888). 157 §26. lil)*,fi:'A*hl it/'fS:aiUti'.m^'H;'', MAT" iF^ 158 BILLS OF EXCilAxNGE. §26. Other Representative Capacities— The same prin- eiples applj to those acting in other representative capa- cities, such as executors, "dministrators, trustees, guar- dians, tutors, curators, etc. With regard to these, the law in the other provinces in which tlie conimou law prevails is mudi more stringent in holding them person- ally than in the Province of Quebec where the principles of the civil law obtivin. In Quebec the representative capacity or quality, as it is there called, is more fully recognized, and a. bill or not(^ signed in this form would be freciuently treated as the bill or note of the jfX'rson or body represented, where in England or the other pro- vinces, the person actually signing would alone be lield liable. Where any person is under obligation to indorse a bill or note in a representative capacity he may ('o so in such terms as to negative i)er8onal liability: section 31. 8-8. 5. The usual method is to use the words " sans recours " or " without recourse " in indorsing. : ILLUSTRATIONS 1. Dei'endants, as executors, purchased goods from plaintiffs and gave notes,-" We, as executors of the late B. P., promise to pay," etc., and after their signatures wrote " executors," etc. Held that they were personally liablr: Kerr v. Parsons, 11 U. C. C. P. 513 (ISGl). 2. Where trustees of an Insolvent estate under a deed of composition, which gave them no power to draw or accept bills, signed promissory notes with the words " Trustees to estate C. D. Edwards" after their signatures, held, that they were person- ally liable: Archibald v. Brown, 24 L. C. J. 85 (1879). ;{. On a promissory note whereby the makers as executors of the late T. promise to pay, they are personally liable, when they do not expressly limit their liability to pay out of the estate: Chllds V. Monins. 2 Brod. & B. 460 (1821). 4. The churchwardens for a debt of the parish gave a note signed " J. B. and G. W., churchwardens," for which they were held personally liable: Rew v. Pettet, 1 A. & E. 196 (1834). r£u '^'di^iL±l.^^^-L^::il'..i't. A CAPACITY AND AUTHORITY. 159 5. BxecKtors carrying on the business of the testator &s ^ 0/> directed by the will, in the ordinary course, accepted a bill de- J 1 Bcrlbing themselves simply as executors of the testator. They were held personally liable. Liverpool Borough Bank v. Walker, 4 DeG. & J. 24 (1859). 6. A., B. and C. signed a note In t'ae following terms: " W9 the undersigned, in the name and on behalf of the Reformed Presbyterian Church, Stranraer, promise to pay," etc.: — Held, that A., B. and C. were personally liable on the note: McMeekin V. Baston, 16 Court of Sessions Cases, 363 (1889). " The Construction Most Favorable to the Validity of the Instrument." — This is in accordance with the maxim, ut res magis valeat. In many of the eases iu which an agent or officer has been lield personally liable on a bill, it is quite evident that he did not intend to bind himself personally, and there is a great deal to be said in favor of his not being liable; but inasmuch as he did not legally bind his principal or the company as the case may be, he has been condemned jiersonally on the principle laid down in this sub-section. The Consideration for a Bill. "^ 27. Valuable consideration for a bill may bevaiuaw© constituted by— S?" how con- (a) Any consideration sufficient to support a**'*"**^" simple contract ; (6) An antecedent debt or liability; such a debt or liability is deemed valuable consideration, whether the bill is payable on demand or at a future time : Imp. Act, s. 27, 1 {a) (h). The terms "valuable consideration" and "value" in the Act are synonymous: section 2. " It is necessary in the English law that an agreement. In order to create a legal contract, should include in the matter agreed upon, besides a promise, what is called a consii'erntion 160 BILLS OF EXCHANGE. § 27 ^^^ ^^^^ promise. The consideration may be described generally as some matter accepted or agreed for as a Considera return or equivalent for the promise made, showing that tion for 11 ^ ^, ,,,-,<- bill. the promise is not made gratuitously : Leake, p. 17. *• A valuable consideration in the sense of the law, may consist either in some right, interest, profit, or b;'netit, accruing to the one party, or some forbearance, detri- ment, loss, or responsibility given, suffered or undertaken by the other": Currie v. Misa, L. R. 10 Ex. 162 (1873). In the French law the word " cause," which takes the place of the English " consideration," has a wider mean- ing, and includes natural or moral obligations: Potliier on Obligations, Nos. 42, 43; Code Napoleon, Arts. 1108, 1131; 16 Laurent, 107-111; 24 Demolombe, p. .320. A mere moral obligation is not a sufficient consideration for a bill or note in England: Eastwood v. Kenyon, 11 A, & E. 438 (1840); but may be in Quebec: Lockerby v. O'Hara, M. L. R. 7 S. C." 35 (1890). The meaning of " sans cause " seems in the French law to be confined to what in English law would be called total failure of consideration as distinguished from mere absence of consideration: 16 Laurent, 111119; 24 ' ; Demolombe, p. 342, The Civil Code of Lower Canada has introduced the English " consideration' as a synonym for the French " cause." Oue of the requisites to the valid- ity of a contract is, "a lawful cause or consideration": C. C. Art. 984. " A contract without a consideraton or ; with an unlawful consideration has no ailect" : C. C. Art. 989. The Privy Council has held in a case from Quebec that there is no difference between French law and Eng- lish law as to the necessity for a valuable consideration for the validity of a contract: McGreevy v. Russell, 56 L. T. N. 8. 501 (1887). > As the subject of contract is within the jurisdiction of the local legislatures, the validity or invalidity of bills and notes on the qu-^stion of consideration may vary, in the different provinces, and where contracts on a bill or note, or rights in it, arise in more than one province, the -. I '.&4iimiims^^^^stmma^M CONSIDERATION. 161 application of the principles of international law will be ^ 27. required for their solution. See notes on s 'ctions 22 — — and 71. " (a) "^-" An agreement coutalninf; a prnmi-te made by the one party, for a valid consideration, and agreed to by the other, creates a conti-act by force of the mere agreement without other formality. The contract so created is a simple contract": Leake, p. 21. " (&) " — 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 Currie v. Misa, L. R. 10 Ex. 15o (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 omission 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. Mac- phersoii, Glrouard, Lettres de Change, 66 (1848); Laroc- que V. Franklin Bank, 8 L. C. R. 328 (1858). These words were at me time considered necessary in England. In France the bill should state in what the value con gists: Code de Com. 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., 1828. Now every party whose signature appears on a bill 1 or note is presumed to have become a party for value: I section 30. While oral evidence is not admissible to ML.B.E.A. — 11 n:^ff^'VTMp^.^crtvT yqff'g* ^mt^^ 1^1 yjuii ' 162 BILLS OF EXCHANGE. § 27 vary the terms of the written contract between the par- ties, it is admissible to impeach the consideration for the Conaidera- contract, and notwithstanding the words " value re- ceived" 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. & 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 3, ante p. 48. ILLUSTRATIONS. 1. A debt due to a bankrupt estate Is a good consideration for notes given to the trustees and assignees of the estate: Gatet V Crooks, Dra. 446 (1831). 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 the note: Com^i v. Thompson, 4 U. C. O. S. 256 (1836). 3. A guarantee indorsed on a note at the tim'i of its execu- tion in the following words: " We guarantee tLo 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. O. S. 293 (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 they re- mained undelivered, without alleging that there was any default, neglect, or refusal on the part of the vendor: Auderson v. Jen- nings, 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 oosses- Bion for the full term of the lease: Ireland v. Guess, 3 U. C. Q. B. 220 (1846). 6. A note given by A. to B. for a debt due by C, upon no consideration for forbearance, and upon no privity shewn be- tween A. and C, cannot be enforced: McGilllvray v. Keefer, 4 U. C. Q. B. 456 (1847). CONSIDLltATlON. 163 7. A defence that the note was made to the holder as a gra- S Q'T tulty and that the maker never received any oonslderation for ! It, iB good: Poulton v. Dolmage, « U. C. Q. B. 277 (1850). 8. A debt due by a third party, but not payable, may form a valid consideration for a note: Dickenson v. Clemow, 7 U. C. Q. B. 421 (1850). U. A pre-extstlng debt is a good consideration In whole or In part for a note or bill: Gooderham v. Hutchison, 5 U. C. C. P. 241 (isr>5); Hillls v. Templeton, 7 U. C. L. J. 301 (1801); Evans V. Morley, 21 U. C. Q. B. 547 (1802); Canadian Bank of Com- merce V. Gurley. 30 U. C. C. P. 583 (1880). 10. A note promising to pa^ to the Toronto Church Society or bearer £50 towards the support of a bishop to oe appointed to a western diocese, held ^o be founded upon a sufflclput considera- tion: Hammond v. Small, 16 U. C. Q. B. 371 (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 u 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. ZiH (18G2). 13. Defendant having endorsed a note for |1,250, to enable the maker to get as an additional advance the difference between that sura and the original loan of $01 S, 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, 10 U. C. C. P. 403 (ISGO). 14. Value arising at any time during the currency of a note 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, G Ont. P. R. 295 (1870). 1(*>. A note payable on demand with Interest held to be with- out consideration as to one ol' 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). 164 BILLS OF EX( HAXOE. § 27. Connidera- tiun. 17. When, after a note is completed, so far em 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 mov- ing 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 O. R. 4CA) (1H88). 18. Notes given to an Insurance company for premiums sub- sequently, earned, are given for a valuable consideration and are valid: Wood v. Shaw, 3 L. C. J. 169 (1858). 1V> A promissory note was given as an indemnity to a party assuming a llabllrty 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;. UO. 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 or ihe cueques: Colvile v. fi'lanagan 8 L. C. J. 225 (18G4). 21. A note given to a new firm, after the dissolution of the old, in satisfaction of a gu vantee given to the old for advances made by them, was held to have been given in error and without consideration, and therefore void; Renault v. Thomas, 1 R. L. 700 (18G8). 22. Where a tenant was partly deprived of the use of the premises by works carried on by the corporation of Quebec, biit at the end of the year gave his landlord a note for the full anioiini of the rent, there was sufficient consideration for the note, al- though the landlord was suing the corporation for damages to the leased .r-mises: Motz v. Holiwell, 1 Q. L. ^ 64 (1875). 23. )v i sale of the stock of an insolvent made by the as- signee, no ilnally to a third party, who in reality purchased for the insolvent, he accepted in part payment a note of the latter; held, that there was consideration for the note: Lemleux v. Bourassa, 1 Dorlon, 305 (1881). 24. A promissory note given for consideration erroneously believed to be good in law, is not valid: Riel v. McEwen, Ram- say A. C. 82 (1881). ,.^v, :•-/.■- -., ■/V,-..Wv; 25. Where an T.O.TJ., made to repreeent the value of a share in a business purchased by the plaintiff, was Indorsed and trans- ferred to the plaintiff by the vendor, the plaintiff could not sue the vendor thereon, while at the same time he retained the share acquired by him in the business, which was represented by the L O. U.: Cridiford v. Bulmer, M. L. R. 4 Q. B. 293 (1886). ■WAIrlKttft9»».E^ CONSIDERATION. '20. 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 (1««G). 27. Want of consideration being established and there being no evidence of the fact of a gift to bring the case within Oolvile V. Flanagan, supra. No. 20, the note was held void: Mo "eur v. Roy, 31 L. C. J. 1)9 (1887). 28. A draft made by B. & Co. through their agent D., given to a bank in payment of another draft by W. on 3. 1p favour of D. (subsequently dishonoured 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 without considera- tion, and no action lies against B. & Co.: Union Bank v. Bryant, 17 Q. L. R. 93 (1891). , 29. Where a note was given as part payment of a purchase of land under a verbal agreement of sale, the plaintiff cannot recover for want of consideration: Black v. Gesner^ 3 N. S. (2 Thomson) 157 (1847). - , 30. Where a note was given on a verbal purchase of land of •which the defendant took possession, held to be for a good con- sideration: Gray v. Whitman, 3 N. S. (2 Thomson) 157 (1857). 31. A purely moral consideration (affection and regard) does not constitute sufficient consideration for a promissory note: Baker v. Read. 7 N. S. (1 G, & O.) 199 (1868). J^ 32. 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 (1877). .-- 'V - .-: m/, --..o;- ,;■' -r . ; 33. C. made an assignment under the Insolvent Act. One of the debts due him was by a woman whom h( subsequently mar- ried. After her marriage the assignee induced her to give , note, the husband signing as a surety. Held, that there was no con- sideration for her giving the note: McDaniel v. McMillan, 11 N. S. (2 R. & C.) 405 (187(1). 34. 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 165 §27. I WW P"l OMRl 166 BILLS OF EXCHANGE. I ! I ' I I f I c OI7 to the other brothers respectively, the arrangement being for Z il. the purpose of dietrlbuting the estate of the father without a win. Held, that the payees could not recover on the notes for want of consideration moving from them to the maker: Forsyth V. Forsyth. 13 N. S. (1 R. & G.) 300 (1880). Ccniidera- tiou. 35. A., who was indebted to plaintiffs, sold defendant a threehmg machine, and took his note, which at A.'s request was made payable to plaintiffs. A. sent plaintiffs the note, t'lt they knew nothing of the transaction for which it was given. Held, that they could not recover on the note for want of consideration moving from them io defendant: Cossitt v. Cook, 17 N. S. (5 R. & G.) 84 (1884.) ?". An agreement to forbear for thirty days is a good consid- eration for an acceptance: Lyons v. Donkin, 23 N. S. 258 (1891.) 37. A promissory note given in satisfaction of a claim for damages for an assault on plaintiff's minor son ia binding: Hub- ley V. Morash. 27 N. S. 281 (1894). 38. 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. He?d, that the defendant was not liable on the note: City of Fredericton V. Lucas, 8 N. B. (S Allen) 583 (1857). 3J>. A note given to a brother of a deceased Intestate by the person who received the estate, on the ground that if the de- ceased had left a will, he would have left his brother the amount of the note, is void for want of consideration: McCarroll v. Rear- don, 9 N. B. (4 Allen) 261 (1859). 40. A note given oy A. to his son-in-law B. by way of ad- vancement to B.'s wife held void for want of consideration: Thomas v. McLeod, 12 N. B. (1 Han.) 588 (1869). 41. A note wai given by a son In payment of his father's debt. Held, that It was not invalid for want of consideration: Street v. Quinton, 18 N. B. 567 (1879). 42. Where a note was given to an Infant, nine years of age, affection for the child and gratitude were held not sufficient con- sideration to bind the estate of the maker in favour of the payees: Holllday v. Atkinson, 5 B. & C. 501 (1828). See Fuller v. Lum- bert, 78 Me. 325 (1886). 43. Cioss acceptances for mutual accommodation are respec- tivaly considerations fc each other: Cowley v. Dunlop, 7 T. R. 505 (1708): Nawmon v. Frost, 62 N. Y. 424 (1873). CONSIDERATION. 167 44. A note for the price of land may be binding on the malier, S O*? although the contract is not binding on account of the Statute of J 1 Frauds: Jones v. Jones, 6 M. & W. 84 (1840). Considera- tiuii. 45. A debt represented to be due, but not really due, !a not a sufficient consideration: Southall v. Rlgg, 11 C. B. 481 (18.=jl); nor Is the giving up of a void note: Coward v. Hughes, 1 K. & J. 443 (1855). „;.,,; , ■:,.-■. , .- ■ v,^ ■■;■■.; . 46. A promise to give up a bill tho::ght to be invalid is a flufflcient consideration: Smith v. Smith. 13 C. B. N. S. 418 (1863); as is also a debt barred by the atatutp of Limitations: La Touche V. La Touche, 3 H. & C. at p. 570 (1805) ; Giddings v. ^^liddings, 51 Vt. 227 (1878). So is the bona fide compromise cJ a disputed claim, although it afterwards appears that the claim was wholly unfounded: Callisher v. Bischoffsheim, L. R. 5 Q. B. 440 (1870). 47. The voluntary gift of a sum of money is not a valid con- sideration: Hill V. Wilson, L. R. 8 Ch. at p. 894 (1873). 48. An agreement to pay a debt within three years is no consideration for giving a note payable on demand: Stott v. Fair- lamb. 52 L. J. Q. B. 420, per Denman, J. (1883). 49. Actual forbearance from suing a third party is a good consideration for a note, although ther^ was no contract to for- bear: Crears v. Hunter. 19 Q. B. D. 341 (1887). I 50. The manager of a bank stole certain securities which he negotiated. He subsequent'y 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. 535 (1888). 51. A promissory note given for a mere moral obligation is not binding, but where the maker had made payments thereon, snd afterwards became a lunatic, the Court recognized it as a debt of honour to be paid out of the estate: In re Whlttaker, 42 Ch. D. 119 (1889). 52. Where a promise to pay £200 was supposed to be enforce- able, though not in fact so, a promissory note given to postpone payment of such sum was given for a good consideration; Klugs- tord v. Oxenden, 7 T. L. R. 506 (1891). 53. An undertaking by a bank to give a customer credit on his general account for a cheque deposited, is a sufficient considera- tion to constltutfc the bank a holder for vplue: Royal Bank v. Tottenham, [1894] 2 Q. B. 715. ■^. "W !,.."i • I J^WL mmmm 168 BILLS OF EXCHANGE. ^27 54. A pre-exlhJng debt, is a good consideration for a promis- sory note payable* on demand for a larger amount than the debt Considera- flue: Haslam v. Williams, U N. S. W. R. (Law) 110 (1893). tion. 55. The accomplishment of the objects of an educational in- stitution held to be sufficient consideration for a note; Wesleyan Seminary v. Fisher, 4 Mich. 515 (1857) ; Roche v. Roanoke Semin- ary, 5« Ind. 108 (1877). 5(i. A note given in settlement of a civil suit for damages against the maker's brother, is founded upon sufBcient consider- ation: Smith V. Richards, 2S) Conn. 232 (1800). * , 57. When A. is Indebted to E. and B. to C, and A. gives his note, in extinguishment of both debts, to C, there is sufficient consideration: Outhwite v. Porter, 13 Mich. 583 (1805). 58. An agreement not to bring suit on the debt or on other liability of one person is a valid consideration for the commercial paper of another: Randolph v. Peck, 1 Hun 138 (1874); Abbott v. Fisher, 124 Mass. 414 (1878). 59. Subscriptions for stock in an incorporated company are a sufficient consideration for a note: Chetlain v. Republic Life Ins. Co., 86 111. 220 (1877). ■ 60. Mere forbearance, without an agreement to forbear, 1» . ; not a sufficient consideration tor a note: Manter v. Churchill, 127 Mass. 31 (1879); Smith v. Bibber, 82 Me. 34 (1889). But see No. 49, supra. (51. The compromise of a claim, which the party putting It forward knew was unfounded and illegal, is not a sufficient con- sideration: Ormsbee v. Howe, 54 Vt. 182 (1881). Total Failure of Consideration. — Every party whose Hignaturo apiu'iirs 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 f?ood defence if the plaintiff and defendant are imme. Where a seller took cuetomers' notes and hire receipts as collateral, discounted the nptes 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 O. R. 142 (1890); affirmed in Appeal, IS Ont. ". A. R. 438 (1891). «>. 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, 13 R. L. 50 (1884). 8. An agent holds a bill indorsed in blank. He fraudulently 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 Mm: Collins v, Martin, 1 B. & P. 048 (1797). 9. A., the holder of a bill for £100. deposits it with B. as security for a running account. When the note matures there l8 a balance in A.'s favour, but subsequently there is a balance of £50 against him. B. is a holder for value for £50. Atwood v. Crowdie, 1 Stark. 483 (1816). uamunmi^i^imm •? 174 BILLS OF EXCHANGE. ft § 27. ■^*^- 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 (186G); He Boys, L. R. 10 Eq. 467 (1870). 11. If a banker negotiates a bill that he knows does not be- long to his customer, no lien can attach: Ex parte Kingston, L. R. 6 Ch. 632 (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 the amount. He falls 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 Bank. 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); Ex parte Seho- fleld, 112 Ch. D. 337 (1871)). 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, 16 Ch. D. 330 fl880). > ,*- ^^ 15. Accommodation paper may be pledged as collateral: Washington Bank v. Krum, 15 Iowa 53 (1863). ^^ccommo- 28. An accommodation party to a bill is a per- uartytoa son who has signcd a bill as drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending 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 > when the acceptor of a bill or the maker of a note is an accommodation party, that it is strictly an ac(ommo- dation 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 accom mn^ CONSIPERATION. 175 raodation bill is accepted, for the benefit of the drawer or an indorser, he is liable without presentment for pay ment, protest, or notice of dishonor: section 46, s-s. 2 (c) and (d) ; section 50, s-s. 2 (e) (4) and s-s. 2 ((/) (3) ; section 51, s-s. 9. As to the negotiation of an overdue accom- modation bill, see section 36, s s. 2. Every party whose signature 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. Bnrland, Ramsay A. C. 280 (1875); Parker v. Fuller, ibid. 281 (1877). Where notes were agreed to be made and indorsed indiscriminately oy a number of partners and the pro- ceeds go to the benefit of the joint concera, they were held to be accommodation notes, and one partner could not recover as a holder from his co-partners: Bowes v, Holland, 14 V. C. Q. B. 316 (1856). Where there is «a running account betw(?en the draw- er and drawee, and a bill is accepted, it is not an accom- modation bill, even although the account was ag.ninst the drawer at the time of acceptance: lie Overend, Gurney & Co., Ex parte Swan, L. K. 6 Eq. 356 (1868). Where the drawer and acceptor receive a commis- sion for drawing and accepting the bill from a person who does not become a party to it, this is an accommoda- tion bill: Oriental Financial Corporation v. Overend, L. R. 7 Gil. 142 (1871). An accommodation bill is not issued, within the meaning of section 64 of the Act (63 of the Canadian Act), until it comes into the hands of some perbun who can sue upon it Engel v. Stourton, 5 T. L. R. 444; 53 J. P. 535 (1889). §28. Accojnmo- Hation party. .;- 2. An accommodation party is liable on the bill f.*'«.,.^ to a holder for value ; and it is immaterial whether, when such holder took the bill, he knew such party to be an accommodation party or not. Imp. Act, 8. 28(2). wMi saisaateij-tj; iv 176 ^28. AccDtnino- dation party. fl!l * BILLS OF EXCHANGE. The rights of a holder for value have been defined in section 27, h h. 2 and ^i. An accommodation party occu- pies the relation of a surety with respect to the person for whose accommodation he has become a party, and may set np any defence connected with the bill that his princi[)al could. He may also be released by the holder giving time to the princiipal, if the holder is aware of the relation between them; Bechervaise v. Lewis, L. R. 7 C. P. 372 (1872). y^,,,-v, . -..-v. y- .; ■:.■■■;■■.. :^::} '-,\^ ILLUSTRATIONS. 1. A Becond accommodation tadorser. who has paid a note, may recover from a prior accommodation indorser: Breeze v. Baldwin, 5 U. C. O. S. 444 (1837). 2. It Is no defence by a malcer of a note payable to bearer that it was made for the acconimodatiou of a third party, and that plaintiffs hold it without value or consideration: Muir v. Cameron, 10 U. C. Q. B. 356 (1852); overruling on this point Strathy v. Nicholls, 1 U. C. Q. B. 32 (1844). 3. It is no defence by the maker that the plaintiff, indorsee, gave no value to the indorser for his indorsement, or that he took the note knowing that it was indorsed for the accommoda- tion ot the maker, without de-aying that he is a holder for value: Miller v. Ferrier, 7 U. C. Q. B. 540 (IHTiO). 4. The indorser of a note to enable the maker to get goods from the payee is liable on an action by the payee: Moffatt v. Rees, 15 U. C. Q. B. 527 (1^57). See also Peck v. Phippon, U. C. Q. B. 73 (1851); Foster v. Farewell. 13 U. C. Q. B. 440 (18."^); Gunn V. McPherson. 18 U. C. Q. B. 244 (1859); Smith v. Richard- son, 16 U. C. C. P. 210 (1805). 5. The holder 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 Glasgow Bank v. Murdock, 11 U. C. C. P. 138 (1801). 6. Accommodation indorsers, after the note on which they were liable had matured, tiled a bill against the holder and maker to enforce payment against the latter. The relief prayed was granted, and the maker was ordered to pay the costs both of ihe plaintiff and the holder of the note: Cunningham V. Lyster, 13 Grant, 575 (1807). ^'jiSM)>iiidw.-mA ' t^';;,ttiiiiii!i;is!i»iaji'£jyj COXSTDERATION. 177 7. The holder of accommodation paper, knowing It to be & 29. such, may rank upon the estate of and discharge the indorsers. and then recover the balance from the accommodation maker: Lyman v. Dyon, 13 L. C. J. 1«<) (1808). 8. The holder for value can recover from the accommoda- tion maker the amouiit of a note although he was aware of the fact when he took it, and was interested in the transaction out t of which it arose: Beique v. Bury. 3 L. N. IGO (1880); Scott v. Quebec Bank. 7 L. N. 343 (1884). ,. -, 29. A holder in due course is a holder who has Holder m taken a bill, complete 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 ; (6) 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 defejct in the title of the person who negotiated it : Imp. Act, s. 29 (1) ii " Holder in Due Course " is used in the Act as an equivalent for the old expression, '' bona fide 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 pay- able 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 cir- cumstances that do not meet all the conditions of th(! present section, has all the rights of j^n ordinary holder, and in addition, those mentioned in sections 27, 28 and 58. m'l.b.k.a.— 12 1; 178 BILLS OF EXCHANGE. § 29b ^^ *^^ negotiation of a bill to a holder in due course, the transferrer 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 (18G3). .. , 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 .% s-s. 4; but it is irreerular. 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 -^ne course. The fact of a cheque being post-dat' es not pre- vent its being regular within the meaning ^^ am section: Hitchcock V. Edwards. GO L. T. N. H. 636 (1889); Carpen- ^ ter V. Street, 6 T. L. R. 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 demand are deemed to be overdue when in circulation for an unreasonable length of time: section 36, s-s. 3. A demand note would not be consider- ed overdue for the purposes of the present section, solely on the ground that a reasonable time for presenting it for payment had elapsed since its issue: section 85. Without Notice of Dishonor or Defect.— The fact that a bill had been dishonored by non-acceptance, or if a demand bill, for non-payment, would not prevent a per- son from becom'ng a holder in due course, if it bore no . mark of protest or dishonor, and if he had no notice otherwise: Dunn v. O'Keefe, 5 M. & S. 282 (1816). m m I I >i It COKSIDEKATION. 179 Formal notice is not necessary; it is enough that the § 29. party have linowledge, or even a suspicion, and that he wilfully shuts his eyes: Raphael v. Bank of England, 17 J^^"' C. B. 173 (1855); Jones v. Gordon, 2 App. Cas. OKi (1877). Mere negligence however on the part of thn person taking a bill does not fix him with the defective title of the party passing it to him : Goodman v. Harvey, 4 A. & E. 870 (1836); Bank of Bengal v. Pagan, 7 Moore P. C. 61 (1849). Notice to the agent is notice to the principal and vice versa, but when a bill is negotiated to one and notice Is given to the other, a reasonable time must be given for ^omTri.;;^;^.^^^lon: Willis v. Bank of England, 4 A. & E. at p. 39 (1835); Collinson v. Lister, 7 De G. M. & G. at p. n37 (1855). If the agent is a party to a fraud he is H" I presumed to have advised his principal of it: Ex parte Oriental Bank, L. R. 5 Ch. 358 (1870). Good Faith. — A thing is deemed to be done in good / faith, within the meaning of this Act, where it is in fact done honestly, whether it is done negligently or not : sec- tion 89; see the notes on that section. ''Good faith is always presumed. He who alleges bad faith must prove - it ": C. C. Art. 2202. " Gross negligence may be evidence of bad faith, but it is not the same thing": Lord Den- man in Goodman v. Harvey, supra, at p. 881. For Value. — Value means valuable consideration: section 2. For the meaning of valuable consideration see section 27, and the notes thereon. Value is presumed to have been given whether the bill or note contains the words " Yalue received" or not: section 30. Negotiation of Bill — A bill is nejjotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill. The holder need not be the owner of the bill; he may, for ex- ample, be merely a pledgee, or hold it for discount, col- lection, or the like: section 27, s-s. 3. I ■f« r> ', 180 BILLS OF EXCHANGE. § 29. Defect in Title— The defects in uhe title of one nego- tiating a bill, which prevent the person acquiring it with notice from becoming a holder in due course, are set r at in sub-section 2 of the present section. ILLUSTRATIONS. 1. The fact that the word " renewal" had been written on the ba^k of a note and erased, was not sufficient notice to prevent an Indorsee for value before maturity from becoming a bona fide holder: Larkin v. Wlard, 5 U. C. O. S. <5«51 (IKW). 2. The fact of the name of tho maker of the note having been used without authority, is a fact material for the Jury to consider 'n connection with ether evidence offered to show that the plain- tiff took the aote with knowledge of the circumstances: Hans- come V. Cotton, 16 U. C. Q. B. 98 (1857). ;i. The maker gave two notes with indorsement on each, " the within note not to be sold," which formed part of the con- tract. The notes were transferred to plaintiff with the word " not" on one note struck out (which plaintiff noticed on taking the note), and the whole endorsement cut off the other, but with- out destroying any part of the face of the note. Held, that plain- tiff had notice of the defects, was not an Innocent holder, and could not recover: Swriisland v. Davidson, ^ O. R. 320 (1883). 4. A pereon receiving in good faith, notes before maturity as collateral security without notice of their bogus nature, is not affected by any equities between tho original parties: Wood v. Shaw, ;? L. C. J. ItiO (1858); Ward v. Quebec Bank, Q. R. 3 Q, B. 122 (18U4). 5. Where p" lintiff knew when he took the note that it was indorsed for tue accommociatiou of the maker by an agent, who had noc the right to do so, he cannot recover from the principal on the indorsement: Rolnhardt v. Shirley, Q. R. (J S. C. 11 (1894). »>. The fact that a bill has been torn and the pieces pasted together again, is a sufflcien. irregularity to prevent the holder becoming a holder in due course: Ingham v. Primrose, 7 C. B. N. S. 82 (ISi'D). See also Scholey v. Ramabottom, 2 Camp. 486 (1810); Redmayne v. Burton. 2 L. T. N. S. 324 (18(50). 7. If facts come to the knowledge of the holder which are such as to raise a suspicion In his mind that there Is some def»'*t in the title to the hill, and he makes no further mqulry, he Is not a holder in due course: Frey v. Ives. 8 T. L. R. 682 (1892). m WW^l CONSIDERATION. 181 8. Where a mortgage Is given to secure payment of a pro- S QQ missory note, the holder who takes it with knowledge of the ' mortgage, cannot recover on the note more than Is due on the r^ r . • mortgage, If the mortgagor Is allowed to deal with the original title. mortgagee without notice of the transfer: Colonial Investment and Agency Co. v. Maxwell, 8 N. Z. L. R. aio (18SKt). 9. The erasure of the name of one of the sureties on a note. Is an irregularity which should put the purchaser upon enquiry: McCramer v. Thompson, 21 Iowa 244 (18»)t5). 10. The erasure of the indorsement of the payee by a thief, ■was held to be an irregularity sufficiently patent to have put the purchaser on his guard: Colson v. Arnot 57 N. Y. 253 (1874). 11. If blanks in a note are filled up by a holder with stipu- lations repugnant to what was previously written, or erasures are made with like intent, this is a sufficient irregularity to prevent ; a subsequent holder claiming to be a bona fide holder for value •without notice: Angle v. N. W. Mutual Life Ins. Co., 1)2 U. S. (2 Otto) SM tl«7r)). 2. In particular, the title of a person who nego- tiates a bill is defective within the meaning of this Act when he obtained the bill or the acceptance thereof by fraud, duress, or force and fear, or othe^r unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud : Imp. Act, 8. 29 (2). Thi« Hub-seotion dooH not purport (o nnint- Jill the dt'fectH that inuy be in tlio lith» of a pctHon ncj^olijitiug: a bill, but men^Iy given >; number of illustritiouB of tbe defects referred to in the tirst Hub-sectiovi. A defective title niUHl not be cr untrue statement intentionally made for that purpose. Duress may consist in actual violence to the person or in threats thereof. " Violence or fear is a cause of nullity, whether practised or produced by the party for whose benefit the contract is made or by any other person": C. C. Art, 994. The "other unlawful means " referred to, which when employed would vitiate a bill or acceptance obtained thereby and constitute a defect in the title of the party negotiating it, would be means similar to those enumerated. Fraud is never pre- sumed, but must be proved: C. C. Art. 993. ILLUSTRATIONS. T See also Illustrations under section .SO, a-s. 2 and 38 (6) 1. On a settlement, part of the conslderniion for a note was that certain notes according to a schedule were to be handed over to the maker, and plaintiff fraudulently concealed the fact that he hnd not all the notes. Held, to be a pood defence on the note: MoCollum v. Church. 3 U. C. O. S. 3.56 (1^34). 2. When it was alleged that a prior note had been obtained by fraud from the maker, and the note sued on given as a re- newal, evidence of the allegf-d fraud is inadmissible in the action on the renewal: Dougall v. Post, 5 U. C. Q. B. r».')4 (1S48). 3. 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 drawee,?, It was held that the note was obtained by fraud: Oooderham v. Hutchison, 5 U. C. C. P. 241 (1855) ^n CONSIDERATION. 183 4. Action on a bill drawn by K. upon and accepted by C. and S OQ indorsed to plaintiffs. A plea by C. that ue was Induced to ac- -' ~ cept by the fraud of the drawers and indorsers, and that it was Fraud, etc. indorsed to plaintiffs without value, held to be a good deleuce: Bank of Montreal v. Cameron, 17 TT. C. Q. B. 036 (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 from 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 recovered by him: Canada Farmers' M. Ins. • Co. V. Watson. 25 U. C. C. P. 1 (1875). 7. Where defendant's son had committed forgery and the , ^ notes sued on were given to plaintiff to prevent the scandal be- coming public, they were held to be void: Doyle v. Carroll, 28 U. C. C. P. 213 (1877). 8. Where a husband as the agent of his wife obtained a note by fraud, her title I Icfrctive, and a holder for value receiving It after maturity cannot lecover- Uobertson v. Furness, 43 U. C. Q. B. 143 (1.*^- 0. The del- lant C. being In prison undr- i dictment for assaulting plaintiff, who ivul also sued him fo' lamages, offered through his counsel, la a«ittlement, an itidorsed note for $1,a). ,a ■vtKm^;^!iiimKUK»m»item^^kmMSt^iiMsmitmm,. CONSIDERATION. 185 19. Where a son forged his father's name to certain notes S OQ and discounted them In a bank, the 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 (18(50). 20. 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., 1-1 Q. B. D. 32 (1884), that the con- sent of the magistrate did not make the transaction a lawful one: Bull v. Copeland, 4 T. L. R. 139 (1887). Illegal Consideration.— Considerations are illegal which violate the rules of morality, which contravene public policy, or which are prohibited by statute. If part of the consideration of a bill be illegal the 'instru- ment is vitiated altogether. A renewal, «r the substitu- tion of a new instrument for the old one will not cijre the defect. ,1, ILLUSTRATIONS. See also illustrations under section 30, s-s. 2, and 38 (b). 1. An agrpement not to proceed in a prosecution for per- mitting unlawful gambling in a tavern, is an illegal considera- tion for a note: Dwight v. Elh. worth, 11. C. Q. B. .'.^O (1852). 2. To support a plea that a note was given in consideration of forbearance to proceed in a prosecution for felony, the par- ticular nature of the charge should be proved: Henry v. Little, 11 U. C. Q. B. 290 (1854). .3. 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, ;{S U. C. Q. B. 411 (IHTU). 4. It is no defence to an action or. a note that the considera- tion was for pork speculations in Chicago, which are illegal by the laws of Illinois, the contract which was made In Ontario not being attainjt its laws; Bank of Toronto v. McDougall, 28 U. C. C. P. ;{4.'. (1877), 5. Defendant, a J. P., was arrested for embezzling fines belonging to the township. Plaintiff gave his note to the town- ship and took the note of defendant and his wife, and the pro- secution was abandoned. Held, that the plaintiff was in no f i 186 § 29 . Illegal ofJiiHiderfi tion. BILLS OF EXCHANGE. better position than the township, and the note was void for illegal consideration: Bell v. Rlddell, 2 O. R. 26 (1882); affirmed 10 Ont. A. R. 544 (1885). 0. 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 (18t)9); Sinclair v. Hen- derson. 9 L. C. J. 306 (1865); Decelles v. Bertrand, 21 L. C. J. v 291 (1877) ; Martin v. Poulln, 1 Dorion, 78 (1880); Gervals v. Dube, M. L. R. 6 S, C. 91 (1890) ; Greene v. Tobin, Q. R. 1 S. C. 377 (1892); Collins v. Baril, ibid.; Ross v. Ross, ibid.; Gar- ; neau v. Lariviere, Q. R. 1 S. C. 491 (1892). Also a renewal of such note: McDonald v Senez, 21 L. C. J. 290 (1877); Arpin v. Poulin, ^ 22 L. C. J. 331; 1 L. N. 290 (1878); Wilkes v. Skinner, Ramsay A. C. 82 (1882). 7. A note given to raise money for corrupt purposes at ' an election where the maker was a candidate, is null: Gugy v. Larkin, 7. L. C. R. 11 (1857). , 8. A note given as a wager on an election, held to be void: / Dufresne v. Guevremont, 5 L. C. J. 278 (1859). ' I). Notes given in excess of composition, held not to be void for illegal consideration: Greenshields v. Plamondon. 8 L. C. J. 192 (1800); Perrault v. Lnurin, 8 L. C. J. 195 (18(i:?); Martin v. Macfarlane, 1 L. C. L. J. 55 (1865); Bank of Montreal v. Audette, 4 Q, L. R. 254 (1878); Chapleau v. Leraay. 14 R. L. 198 (1886); Lefebvre v. Berthiaume, 18 R. L. 325 (1889); Racine v. Cham- poux, M. L. R. t) S. C. 478 (189l»): Lamalice v. Ethier, Q. R. 1 S. C. 377 (1890); Tees v. McArthur, 35 L. C. J. 33 (1891). 10. A note of a third party given by an insolvent to a credi- tor, to obtain his consent to the discharge of the insolvent, is null and void: Prevoat v. Pickel, 17 L. C. J. 314 (1872); Leclaire V. CaBgrain, 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 liabil- ity: Normand v. Beausoleil, 2 Dorion 215 (1882); affirmed, 9 8. C. Can. 711 (18815). 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: BolB v. Gervals, 10 L. N. 195 (1887). ^ ..ij 187 j29. Illeg;al odnttidera- tion. . CONSIDERATION. 13. A note given as a subscription to an election fund for provincial elections is null: Dansereau v. St. Louis, 18 S. C. Can. 587 (1890)* 14. No action lies on a promissory note given by the pro- prietor of what is commonly termed a " bucket shop " to plaintiff, a customer, in settlement of speculative transactions between them, i.e., speculations on the rise and fall of prices of goofls and stocks, without intention of delivery: Dalglish v. Bond, M. L. R. 7 S. C. 400 (1890). See Forget v. Ostlgny, [1895] A, C. 318. 15. A note given for smuggled whiskey is null, and where the holder does not make the proof required by clause (h) the action will be dismissed: Banque Jacques Cartier v. Gagnon, Q. R. 5 S. C. 499 (1894). < > 16. A note given to a hotel-keeper in part for liquor is wholly void: Benard v. McKay, 9 Man. 150 (1893). ■- 17. A note given in part for illegal sales of liquor is wholly Invalid: Smith v. McEachern, 7 N. S. (1 G. & O.) 299 (1868). 18. A promissory note given as collateral security for an illegal contract or agreement, and in effect as part of the same transaction, is tainted with the same illegality, and an action cannot be maintained upon It: Byrne v. O'Callaghan, 13 V. L. . R. 924 (1887). 3. A holder, whether for vakie or not, who Rights of derives his title to a bill through a holder in due holder"*" course, and who is not himself a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all ;;orties to the bill prior to that holder. Imp. A.ct%. 29(3). ■: u l!'.^! sm It is only one who has been a party to the fniud or illegality, that is precluded from acquiring all the rights and privileges of a holder in due course. Previous no- tice or knowltKlge of the original defei. t in the bill is not sufficient. See Embrey v. Jeniison, 131 U. 8. 3.36 (1888). il Ml i 188 §29. BILLS OF EXCHANGE. ILLUSTRATIONS. 1. The Indorsee of a note given for lottery tickets, who re- ceived it from a bona fide holder for value without notice before maturity, can recover from the maker, even although he knew what the consideration was when he acquired the note: Wall- bridge v. Becket, \n U. C Q. B. 305 (1855). 2. Where a bona flde 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: Clark son V. Lawson, 14 U. C. Q. B. 67 (1856). 3. B. indorsed a note for C. to renew another note indorBed by him for C.'s accommodation. C. transferred the note for value to plaintiff, who knew no taore than that B. was an accom- modation indorser; there was no bad faith on plaintiff's part. Held, that he was entitled to recover: Cross v. Currie, 5 Ont. A. R. 31 (1880). 4. A person receiving after its maturity an accommodation note from a holder in due course, may recover from the maker: Pichette V. Lajoie, 10 L. N. 260 (1887). 5. A third party cannot recover from the maker the amount of a promissory note obtained by fraud, if such third party was aware of the fraud before the note was transferred to him, although the transfer was made by an indorser who took it before maturity in good faith and for value: Baxter v. Bruneau, 17 R. L. 359 (1889). Contra, above clause of Act. 6. The indorsee of a note who received It after maturity from a holder in due course, is not affected by the fact that his indorser was aware before he transferred it to the indorsee that it had been iss\ied by a partner in, fraud of the partners. McLeod v. Carman, 12 N. B. (1 Han.) 592 (1809). ,*' 7. The indorsee of a bill sues the acceptor who proves that he accepted it 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 (18;i0). 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 B., who accepts \i 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 .-at-.i-s'Et-K.y.wXJW CONSIDERATION, 189 value, he can sue all except E.: May v. Chapman, 10 M. & W. R OQ a55 (1847). See also Masters v. Ibberson, 8 C. B. lO) flH4»); ^ ^*^' 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 indcrses to D. for value without notice. Subsequently D. indorses it back to C. for value. C. cannot collect the note from B.: Sawyer v. Wiswell, 01 Mass. 42 (18G4). A; , •■ 30. Every party whose signature appears on a rre sump- bill is prima facie deemed to have become a party value aiid 11 1 /• 1 Kood faith. thereto for value : 2. And every holder of a bill is prima facie deemed to be c holder in due course : but if, in an action on a bill, it is admitted or proved that the acceptance, issue or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof that he is such holder in due course shall be on him, unless and until he proves that, subsequent to the alleged o^^^hom fraud or illegality, value has in good faith been pK-of ilea, given for the bill by some other holder in due course : Imp. Act, s. 30. A party to a bill who disputes his liability on the ground that he is only an accoramodution 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. 3fi 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 un- less and until the holder proves that, subsequent to the T" 190 BILLS OF EXCHANGE. § 30. ^^Jeged fraud or illegality, value has in good faith been given for the bill." There is probably no difference in pnwf^" °^ *^® ^^^^^ o^ *^^ t^® clauses. ILLUSTRATIONS. See Illustrations under section 29, s-s. 2, and section 38 (b), 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 coul^I not on these facts be inferred, as between the malier and B., and plain- tiff was not obliged to prove consideration: Malr v. McLean, 1 U. C. Q. B. 455 (1841). ■Mil I * 2. In an action on a note where defendant pleads no con- sideration, he must impeach it, the plaintiff need not prove it in the first instance: Sutherland v. Patterson, I Rob. & Jos. Dig. 511 (1842). 3. Where a note is obtained by fraud or affected by illegality on the part of an indorser, plaintiff must prove that he is a bona fide indorsee for value: Maulson v. Arrol, 11 U. C. Q. B. 81 (1853). 4. Where the indorser indorsed the note while in blank, there 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 bona fide holder for value: Hanscome v. Cotton, 15 U. C. Q. B. 42 (1857). 5. Proof of fraud in the making of the note, casts upon the holder a third party the burden of showing that he is a bona fide holder for value: Withall v. Ruston, 7 L. C. R. 399 (1857). See also Hunt v. Lee, 2 Rev. de Leg. 28 (1819); Robinson v. Calcott, Ramsay A. C. 83 (1875); Banque Jacques Cartier v. Gagnon, Q R. C S. C. 88 (1894). 6. 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 (1883). 7. Where a note is transferred by indorsement before ma- turity, but it is provtd that it was obtained from the maker by fraud, it does noi, com»5 under the general rule iaid down in Art. 2287 C. C, and the onus of showing that he is in good faith falls upon t' holder: Belanger v. Baxter, L. N. 113 (1883). # CONSIDERATION. 191 8. Where a note was obtained from the maker by fraud and s orv without consideration, tho holder cannot recover unless he proves ** ' that he received the note before maturity for good and valuable .j^. , consideration, and in ignorance of the circumstances under which prodf It was given: Dumas v. Baxter. 14 R. L. 49l> (1885). 9. 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: Ex- change Bank v. Carle, M. L. R. 3 Q. B. 01 ; .'U L. C. J. 90 (1S87). 10. Before ite Act there was the same presumption in favour of the holder: Bard v. Francoeur, Q. R. 7 S. C. 315 (lSi)4). 11. Defendants proved that the note was for the accommoda- tion of a third party and not authorized; but there was no defence of illegality or fraud. Held, that the on'is was not on plaintiffs to prove that they were holders in due course: Farm- ers' Bank v. Dominion Coal Co., 9 Man. 542 (1893). 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. 13 M. & W. 73 (1844). 13. The indorsee of a note sues the maker, who proves that it was given for a wager, 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. .Tones, 5 E. & B. 238 (1855). , 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. 426 (1865). ; - ., 15. The owner of a negotiable instrument which has been stolen has no title to it against a bona flde holder for value, although he has prosecuted the thief to conviction: Chichester V. Hill, 52 L. J. Q. B. 160 (1882). 16. Where authority was given to fill in tho name of a firm as drawers of a bill, and a partner filled in hit own name as drawer 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. Boulton, 5 T. L. R. 60 (1888). , - m BILLS OF EXCHANOE. c Qf\ 17. Where there was evidence that the acceptor of a bill had 1 banded It to L. to get It discounted for him, .but instead of doing 80, 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, 23 Q. B. D. 345 (1889). 18. Sub-section 2 of section 30 of the Imperial Act does not affect or vary the practice of the Chancery Division in dealing with an application for an injunction to restrain 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 stlH 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). Usurione coiiBidera- tion. 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 him actual knowledge that it was originally given for a usurious con- sideration, or upon a usurious contract : The Imperial Act does not contain any provision similar to this, which is taken in substance from R. S. C. c. 123, s. 17, where however it applied to Ontario alone, having; been enacted for Upper Canada when the usur.v 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 prac- tically obsolete in Canada. The Act, 53 Vic. c. 34, s. 2, which immediately follows the present one in the sta- tutes of 1890, and which came into force on the day of its assent, May ifith, 1890, repealed all the subsisting usury laws which remained in force from old provincial enactments, and which were embodied in the Revised Statutes of Can- ada as chapter 127, with varying provisions applicable CONSIDERATIOV. IAS Ij to the provinces of Ontario, Quebec, Nova Scotia and § 30. New Brunswick respectively. Now any individual or cor- poration, in the absence of some sjH'cial statutory prohi- bition, may stipulate for, allow, and exact, on bills and notes, or on any other contract or ajfreement, any rate of interest or discount wliidi is agreed upon: K. H. 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 penalty 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 tliat 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 know- ledge of the illegality. 4. Every bill or note the consideration of which For a consists, in whole or in part, of the purchase money Sf of a pateut right, or of a partial interest, hmited 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 ''giyen for a patent right:" and without such words thereon such instrument and any renewal thereof shall he void, except in the hands of a holder in due course without notice of such consideration : 5. The indorsee or other transferee of any such Liawiityof 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 : u'l.b.z.a.— 18 K ' f I "jwrna 194 §30. Penalty. . I ij wm \ BILLS OF EXCE>NOE. 6. Every one who issues, sells or transfers, by- indorsement or delivery, any such instrument not having the words "given for a patent right" printed or written in manner aforesaid n.cross 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 interest, limited geographically or otherwise, in a patent right, is guilty of a misdemeanor, and liable to imprisonment for any term not exceeding one year, or to such fine, not exceeding two hun- dred dollars, as the court thinks fit. R. S. C. c. 123, 88. 12, 13, 14. Fov a patent ri^ht. 1:1 F'i: These provisions are not in the Imperial Act and were not in the bill as introduced into the House of CfJxm^uH, but were reluctantly inserted by the Minister of Justice at the urgent request of certain members of that House: Commons Debates, 1800, pp. 105, 1415 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 bearing the pre- scribed words, and any renewal thereof, shall be void, except in the hands of a holder in due course without notice of such consideration. Those words were added to the clause to override the interpretation placed upon Ihe original Act as embodit^ in R. S. C. c. 123, by the Ontario Common Pleas Divisional Court iu the case of Qirvin v. Burke, 19 O. R. 204 (J890), a decision which was rendered while the Bill was before Parliament: vSenate Debates, 1890, p. 405. In that case it was held, that the omission of the prescribed words in a note or renewal note did not render it void as between the maker and the payee, and that the intention of the Act was to give the indorsee or transferee notice, and to put him in the 1 \"\ CONSIDERATION. 195 position of the payee as to any defence wliicli tiie mal er § Qf) migtit have against a claim by the payet>. In this the Cc'H't followed a decision in Pennsylvania on a similar ?j]['tg* statute: Haskell \. Jones, 8G Penn. St. 173 (1878) ; ■ ight! where Chief Justice Bharswood said: ''By the express provisions of the statute tlie only effect of the insertion of such words, is that sucli note or instrument in the hands of the purchaser or holder, shall be subject to the same defence as if in the hands of the original owner or holder." In Johnson v. Martin, 19 Ont. A. R. 594 (1892), it was held that an indorsee for value before maturity wlio took a note given for a patent without these words, with knowledge of the consideration, could not recover. A creditor of a patentee induced a third party to purchase a half-interest in the patent for |T0(), and to join the patentee in a note for $1,000, the creditor giving the latter |200 as an inducement. The note was held to be void as to the third party for want of the words ** given for a patent right " : Craig v. Samuel, 24 S. C. Can. 278 (1895); reversing Samuel v. Fairgrieve, 21 Ont. A. R. 419 (1894). .v-.:. , -r v" -"/^ Under a statute on this subject where the rights of a holder in duo course were not in express terms pro- tected, 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 general principles of the law merchant : Palmer V. Minar, 8 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 adhennl to in every other section, iind provisions for the punishment of the forgery of bills nnd other frauds in connection witli them, have not been .. inserted in the .\ct, but are to be found among the <'rimi- nal statutes. Sub-section 6 is the only exception to this rule. This led to the further anomaly of the insertion of s if •m ^■■!Mii«5'3;:«.i>«K*?WiM»sa*fi;:;/ ,v Negotiation of Bllls. /! Sections 31 to 38 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 de- livery when a bill is payable to bearer, and by indorse- ment and delivery when it is i)ayableto order. Other methods by which negotiable bills may be transferred, or the methods by which non-negotiable bills may be transferred, are not considered at all. These ar<' left to the operation of the ordinary laws. It is to be observi^d that by none of these other methods can u transferee become a holder in due course or acquire greater rights than were possessed by the transferrer. Thus bills, wliether negotiable or non-negotiable, may i)ass by death, by assignment in bankruptcy, by ordinary execution, by gift, by donatio mortis causa, or by any method recognized by the law of any of the pro- vinces. i:' '■■ .- \ ^;.■^ ■ ■ ' ■■•'■ ' -; -'■■ .■-. ■ 'K -■ • ■.'■'■ ■'■' 31. A. bill is negotiated when it is transferred from one person to another in such a maimer as to constitute the transferee the holder of the bill : Imp. Act, s. 31 (1). ^ i " 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, lie 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 t NEGOTIATION. m '* \ may be a pledging? or a, mere transfer of possession, pro- § 31. vided the transferee is in a position thereby to acquire- the status of a holder as above detined. As to the rights of a liolder. sen section 38. In Crouch v. Credit Foncicr, L. R. 8 Q. B. (1873), at p. 381, Lord Blackl)uru spealvs of negotiation as follows: — " In the notes to Miller v. Kace in Smith's Leading Cases, where all the authorities are collected, the very learned author says: * It may therefore be laid dowu as a safe rule, that where sin instrument is by the custom of trade tran8ferai)le, like cash, by delivery, and is also cai>able of being sued upon l»y the fiersou holding it pro tempore, then it is entitled to tlie name of a negotiable / instrument, and the property in it passes to a bona fide transferee for value, though tlie trausfayable, or when the only (»r last indoiseiuent is in ■ blank: section 8, s-s. 3. Delivery means the transfer of I HP n :i| i- 198 §31. To order BILLS OF EXCHANGE. possessiou, att'ial or constructive, from one person to ■another: section 2. Ah to the conditions under which ii valid delivery takes place, see section 21. Where the holder of a bill payable to bearer, n<'gotiates it by de- livery without indorsing it, he is called a " transferrer by delivery ": section 58. See that section and the notes thereon as to the liability of a person who negotiates a bill by delivery. The holder 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 case the indorsement is no part of the negotiation but precedes It: section 56. 3. A bill payable to order is negotiated bj' the indorsement of the holder completed by delivery ; Imp. Act, 8. 31 (3) ; C. C. 22B6. i: ¥ ii Hi -^ i - A bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a par- ticular person, 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 indorsement are set out in section 32 and the dift'erent kinds of indorsement in sections 34 and 35. The indors<^ment and delivery must be by the same per- son. The delivery in order to be effectual n.' jst be made either by or under the authority of the party indorsing: section 21, s-s. 2 («). Where the payee of a note in- dorsed it in blank before his death, and his ex«»cutrix delivered it to plaintiff, it was held that the latter could not recove.': Bromage v. Lloyd, 1 Ex. 32 (1847); Clark v. J^oyd, 2 Ohio 50 (1825); Clark v. 8igourney,*17 Conn. 511 (184fi). (.iii-beo In Quebec a promissory note executed befor»» no- notanal nuto; tanes and payable to order, is negotiable by indorsement In the ordinary way: Morrio v. Legault, 3 L. C. J. 55 (1859), It may i»e nf^rotiated by special indorsement^ but not by an ind»»rHeui«^nt in blank: Firunet v. Lalonde. NEGOTIATION. > 199 16 L. C. R. 347 (1866). But held later by the Court of § 31. Review that such instruments are ordinary promissory —^- notes: Aurele v. Durocher, 5 R. L. 165 (1873). Negotiation in this sub section is a transfer by the law merchant, and has no reference to a transfer that may take place in various other ways, as by sale and assignment, by transmission, by death, by will, or by gift. A bill of exchange was indorsed to the order of the indorse- ' Bank of Kova Scotia at Amherst, and by the agent at""^"' Amherst to the order of the Bank of Nova Scotia at Halifax "for collection.' It Wslh 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: For- syth V. Lawrence, 19 N. S. 148; 7 C. L. T. 174 (1886). Plaintiff sued on notes alleging himself to be the holder. The payee had indorsed tliem, but his indorse- ment 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 I repre84Mitative8, who may negotiate it by ind»)i*semeut: Robinson v. Stone, 2 Str. 1260 (1746). So also if a bill be made payable to a dead man in ignorance of his death: Murray v. E. I. Co., 5 B. & Aid. 204 (1821). 4. Where the holder of a bill payable to his without order transfers it for value without indorsing it, the transfer gives the transferee such title as the transferrer had in the bill, and the transferee in addition acquires the right to have the indorsement of the transferrer; Imp. Act, s. 31 (4). Such transfer may be made to a purchaser or tm4«W!:^M^^i-'j, NEGOTIATION. 201 Where the maker of a proinissory note payable to § 31. his own order, transferred it for value without indorsing it, he was held liable to the transferee, and a judj^nient ordering him to indorse it held to be superfluous: (Joutu V. Rafferty, M. L. R. 7 S. C. 146 (1891), In this case in- dorsers were held liable without protest as indorsers '• pour aval " ; but one of them appealed, and it wab held that the instrument was not really a promissory note and he wa» not liable: Trenholme v. Coiitu, Q. R. 2 Q. B, 387 (1893). Where a note is not indorsed by the payee the presumption is that it is still his property : Demers V. Hogle, Q. R. 7 S. C. 47() (1895). If the transferrer refuses to indorse the bill, the ^'ff^'t >» conii)fl transferee has a right of action to compel him: Ex parte indorse GretMiing, 13 Ves. 206 (1806); Day v. Longhurst, 62 L, j.'"*"* Ch. 334 (1893), If he should die before indorsing, his per- sonal representatives would be subject to the 8am<» obli- gation. Where such indorsement has been omitted by mistake, the transfere<' has not the right to sign the name of the transferrer in order to perfect his tHle: Uar- rop v. Fisher, 10 C. B. N, B. 196 (1861). A payee who has transferred for value without in- dorsing may be made a party: Vandal v. Domville, 20 R, L, 305 (1890). A promissory note was transferred by delivery to the plaintiffs by way of pledge to sec ure repayment of an advance. There was no intention on the part of the transferrer to transfer the whole of liis rights iu the note, nor to indorse it. It was held that the plaintitfs could not recover from the maker: Good v. Walker, 61 L, J. Ch. 736(1892). ., 5. Where any person is under oblit^ation to in- Pewmai 1 .„ . . . , liability dorse a bill in a representative capacity, he mayavoidoii. indorse the bill in such terms as to negative per- sonal liability. Imp. Act, s. 31 (5). Mut^iimmut^yt w^r^m^imil^ wmmm M^ I! i. '■ of a valid indorse nipnt. 202 BILLS OF EXCHANOE. § 31. '^^^^ subsection would be applicable where bills or notes were made p.'iyable to the order of persons, who died or lost their capacity before indorsing them, when executors, administrators, tutors or curators would re- quire to do so. Indortiing in such capacity would or- dinarily relieve them from personal liability: section 26; but it would be prudent in these cases to add such words as "without recourse" or "without recourse to me personally": section 16; Ex parte Mowbray, IJac. & ; W. 428 (1820); Watkius v. Maule, 2 Jac. & VV. 243 (1820). Requisites 32. An indorsement in order to operate as a negotiation must comply with the following con- ditions, namely: — (a) It must be written on the bill itself and be signed by the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient ; Imp. Act, s. 32 (1). According to sub-section 3 of section 31 a bill pay- able to order is negotiated by the indorsement of the holder completed by delivery. The present section sets out the conditions of such an indorsement. In the first place it must be " written." This as we have seen, ac- cording to the Interpretation Act, R. S. C. c. 1, s. 7 (23), includes words printed, painted, engraved, lithographed or otherwise traced or copied. A stamp is frequently used by banks and other corporations, so that the only writing is the signature of the officer who executes it. The indorser need not sign with his own band; his sig- nature may be written by some one authorized by him: sections 25 and 90. The indorsement and signature may be in pencil : ante, p. 38. As to what is a suflBcient sig- nature, see page 39. '■ Indorsement in its literal sense means writing one's name on the back of the bill, but the indorsement may be on any part of it, even on the face: Young v. Glover, NEGOTIATION. 20» [i Jur. N. S. Q. B. 637 (1857); Ex parte Yates, 2 De G. & § 32. J. 191 (1858); Ainot v. Svmonds, 85 Penn. St. 09 (1877). - Where a person signs a bill otherwise than as a drawer or acceptor, he is liable as an indorser: section 56. An agreement in writing to indorse a bill is not anNotanin- indoreement: Rose v. Sims, 1 B. & Ad. 521 (L830); jjar- *^''"'""*'"*' rop V. Fisher, 10 C. B. N. S. at p. 204 (1801). Nor is the assignment of a bill by a separate writing: Re Barring- ton, 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 trans- feree greater rights than he himself has, when the latter is in the position to become a holder in due course. • ILLUSTRATIONS. 1. The holder of a note writes on the back " I bequeatlx — pay the within to D. or his order at my death," signs It and gives it to D. This is not an indorsement: Mitchell v. Smith, 33 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 indorse- ment: — " I hereby sell and assign all my interest in the within note to B." Sears v. Lantz, 47 Iowa 658 (1878); Shelby v. Judd, 24 Kansas, 161 (1880); Hatch v. Barrett, 34 Ibid. 223 (1885). 3. In Michigan it has been held that the words. " I transfer my right, title and Interest in the within note to Y." over the signature of the indorser on the back 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. Yeomans, 39 Mich. 171 (1878). This has been criticised and not followed in other States: 1 Daniel, § 688ft, (TT (< An indorsement written on an allonge, or on a Allonge. 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. 32 (1). ' / i !■ 1 "^ i i t iwa i;: ty f t-J 1 I If \ -5 204 §32. ill ■ I **( : f w ■I I No partial ind(»rae- nient. BILLS OF EXCHANGE. Au allonpe (literall.v l<»ngthenin}i; or elongation) is a paper attaclx'd to the bill to receive iudoi-HomentH, wheu there is no longer room for them on the back of the bill itself. ■ ■' ■ -i ■ ■ , ,, ■ 1. ',, . Copies of bills are not used in England, Canada or tke United States; but on the continent of I^urope, where the practice of drawing bills in sets is not followed, copies are sometimes used for convenience of transfer while the original is being forwarded for acceptance: Nouguier, § 208. (h) It must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorse- ment which nurports to transfer to the indorsee a part only le amount payable, or which purports to transfer tne bill to two or more indorsees sever- ally, does not operate as a negotiation of the bill : Imp. Act, 8. 32 (2). There may be a partial acceptance of a bill : section 19, 8-s. 2 (h). 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 the bill does not constitute the indorsee a holder or give him the 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. liaym. 300 (1704); Jones V. Broadhurst, 9 C. B. 173 (1850); Heilbut v. Ne- ville, L. R. 4 C. V. at p. 3.58 (1869); Miller v. Bledsoe, 2 111. 530 (1838). All must indorse. (c) Where a bill is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others : Imp. Act, s. 32(3). Bt' NEGOTIATION. 205 This clause is an exam])I»' of the custom of mer- ^; 32 chants havlnj; overcome the law as laid down b.v the ■* judges, in the case of Carvick v. Vickery, 2 Douglas 653 n. (1781), action was brought upon a bill drawn by two persons, not partners, payable "to us or t»ur order,"' and indorsed by only one of them in his own name. The fit' I court unanimously set aside a nsuit, Lord Mans- field remarking that the drawers by making the bill pay- able "to our order" had made themselves partners as to this transaction. At the new trial the defence stated and offered to prove, that by the univ* r-sal ut^age and understanding of all the bankers .'ind merchant h in Lon- don, the indorsement was bad, because not signed by both payees. The jury, una voce, de(^lared they knew it perfectly to be as stated, and without hearing n 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, so this is no exce|>tion. In the case of a partnershij*, a part- ner is presumed to have authority to indorse a bill pay- able to the order of the firm. 2. Where, in a bill paycible to order, the payee Missijeii- or indorsee is wrongly designated, or his name is"'^' misspelt, he may indorse the bill as therein described, adding his proper signature ; or he may indorse by his own proper signature : Imp. Act, s. 32 (4). 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 op- tion, add his proper signature, the words " if he thinks fit '' being 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 requirwi to add his proper signa ture: Senate Debates, 1890, p. 3(52. They were however 1 ^ lllli -s &. I., 206 BILLS OF EXCHANUE. w m\ ii I i. n Mt.L Manner of indorse ment. § 32. aHowed to stand in a similar clause as to the aocoptor, — section 17, s-s. 3, so that an acceptor under similar cir- cumstances is not obliged to add his proper signature. If he should indorse a bill bj such wrong name or desig- nation 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 well settled rule as to the manner in which indorsements 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 probiibly 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 BtiflBxes such as "Mr.," *'Mrs.," "Miss," "Messrs.," "Hon., ' " Esq.," etc. Where for the purpose of identification, an addition 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 " IMary Smith, wife of John Smith "; or a bill "to the estate of John Jones, or order," by "A. B., execu- tor or administrator lute John Jones"; a bill "to the order of the City 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 part- ner, 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.," "Per 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.» -.^Bm^a^isex'jkfi^XiLirjrti'AA iy^ute- NEGOTIATION. 207 3. Where there are two or more indorsements § 32. on a bill, each indorsement is deemed to have been Order of made in the order in which it appears on the bill, indowe until the contrary is proved ; Imp. Act, s. 32 (5). nient. Each indorser undertakes to compensate the holder or subsequent indorser who is compelled to pay the bill: section 55, s-s. 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 par- ties 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 (1850); McLean v. Garnier, 14 N. S. (2 R. & G.) 432 (1881). This agreement may be proved by parol: Woids- worth V. McDougall, 8 U. C. C. P. 403 (1858); Day v. Sculthorpe, 11 L. C. R. 2«)9 (1861); Leveille v. Daigle, 2 Dorion, 129 (1880); Willett v. Court, 6 L. N. 204 (1883); Scott V. Turnbull, ibid. 397 (1883); Deschamps v. Leger, M. L. R. 3 S. G. 1 (1886); Wilders v. Stevens, 15 M. & W. 208 (1846); Coolidge v. Wiggin, 62 Me. 568 (1873). 4. An indorsement may be made in blank or.si)eciai spe/cial. It may also contain terms making itmVnt^ restrictive. Imp. Act, s. 32 (6). For indorsements in blank and special indorsements, ser? section 34. For restrictive indorsements, see section 55. 33. Where a bill purports to be indorsed con- Conditions ditionally, the condition may be disregarded by the ments. payer, and payment to the indorsee is valid, whether the condition has been fulfilled or not. Imp. Act, s. 33. 208 BILLS OF EXCHANGE. !•**;'.!« m "E -^: f . II: ? § 33. ^^ absolute indorsement is one by which the indoi'- ser binds himself to pay, upon no other condition than the failure of prior parties to do so, and due notice to him of sucli failure, and protest when required by hiw. A conditional indorsement is one by which *he indorser annexes some other condition to his liability. Some- times the condition is precedent and sometimes subse- quent. 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 con- trary," is iipoa a oonditiou subsequent. A condition attached to the indorsement does not restrain the ne- gotiability 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 having been fdl- fllled, h'» was obliged to pay a second time: Hobertson v. Kenijiugton. 4 Taunt. 30 (1811); Savage v. Aldren, 2 Stark. 2'{2 (18171. In Quebec the sanx' rule pnnailed: " An indorsement may be restrictive, qualified or con- ditional, and the rights of the holder under such indorsement are regulated accordingly': C. C. Art. 2288. The new rule is much more equitable, an it was manifestly unfair to impose, for example, the duty upon an acceptor of determining whether or not a rovision8 of the Act made applicable to an indorsee by (his clause are that he must be named or clearly indicated by his office or otherwise*, that a bill may be indorsed to two or more indorsees jointly, or to several blank indorsements the holder may convert the first into a special indorsement without discharging the 8ubse(iuent 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 subserjuent to one struck out is dis- charged: Wilkinson v. Johnson, .'i B. & C. 428 (1824); Mayer v. Jadis, 1 M. & Rob. 247 (18.s:<). He cannot strike ont special indorsements, through which he has to make title. Ke cannot strike out a special indorsement and insert his own name: Porter v. Gushmati. 11) 111. 572 (1858). The former Quebec rule is found in Article 2289 C. C. Indorsements for collection may be sfpuck out by the owner of the bill, and its possession after dishonor by an indorser with l;ls special indorsement struck out, ia l>rima facie evidence that he took up the bill on its dia- hoDor, although there wan no reindnrseraent to him: ■\'v Id. 212 OF EXCHANGE It " U I 34. Black V. Strickland, ?. O. R. 217 (1883); Callow v. f/aw- * rence. 3 M. & 8. »5 (1814). ^¥c- 36 An indorse men t is restrictive whioh pro- tivo in- ■'^■^ ' i ^ dorsemtmt hibits the further negotiation of the bill, or which expresses that it is a mere authority to deal with the bill us thereby directed, and not a transfer of the ownership thereof, as, for example, if a bill is indorsed '' Pay \). only," or " Pay I), for the account o»f X.," or "Fay D., or order, for collec- tion": Imp, j|#dJ, 8. 85 (J; A restiVlri**^ iiKff^fiiCmout indt^atos that the indorsee is merely an i(*ffi^ X4ff^*'fS\f the moi>e,v. and (iiii*^ he is not j a purchaser o^ 'Im» ^% H* ';AH*BOt ]A*>A^t^ or »ell »hf' bill except in the csmi*» Bft*w(^WB!<^ h» wtvsection ?, of tlii** >!**<• tion. and all nu\m»^ptt^t(l v^4^f^*^ »rf Huhy-'-i to tbf same restriction. An indorst ment in fa ^•■'■/f // » y«^-^««s»# iMxr^d, a» '' Fay D.," was not reHlricti-ve \H4^/f*f the />^. wh#>B th<- Kiim" words in the body of a Mil of fto<«? w(/0if Jwitye render* favor of D, only," is lu/i a. quaMfled .u'/m^hw* M-cyer v f/eeroix, [J89J] A. 0. 520. The meaniijjir /;/ i*4d\ni( iU*' sufff^ ' fmij^ '' in tfe/- Rcc/pt- ance in that caw w^n that If Oil** M*l <^/< which O. was the only drawer ;^y ^y^d Eaht^. W ^. *• !/• »t ^. »4J«. The aay T). for the account of X.," or " for my use," or " for the use of X.," or tYic like: Cramllngton v. I5y#fl8, 2 Ventrls Wl (1687), Snee v. Pn'sc(^4; I Atk. 247 (1743), Aiuh/kt , fiank of England, 2 DougUn. 63Y (/'/ID; Treuttel v. Rarand9i; Mayer v, Jiulis, 1 M. A Rob. 247 (1833). An indorsement is not restrictive on account of its (ontaining a statement of the transaction out of which It arose: l»otts v. KeeiJ, 6 Esp. 57 (180r)); or of being for " value in account with A.'; Murrow v. Stuart, s Mnor»' P. C. 267 (1853); Buckley v. Jackson, L. R. 3 Ex. 135 ■ *^>. .JX'^..vJJiJI WW ^T" ^m 1 1 i ' 1 1 ■I -• '< 214 BILLS OF EXCHANGE. §35. 2. A restrictive indorsement 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 : Right of incTorsee there- under. If furthtr transfer is 3. Where a restrictive indorsement authorizes authorized further transfer, ail sul)sequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement. Imp. Act, s. 35 (2) (3). If the restrictive indorsement be in favor of the indorser " or order," this gives him authority to transfer the bill, but always subject to the same restriction as in the indorsement to himself: Munro v. Cox. 30 U. C. Q, B. 363 (1870); Lloyd v. Sigourney, 5 Bing. 525 (1829). The relation between the restrictive indorser and indorsee is that of principal and agent, so that if the acceptor pay the indorser the indorae<' cannot recover from him, althougli he may have given value for thi* bill: Williams v. Shadbolt, 1 C. & E. 52!) (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 Estate, 13 Ch. D. 708 (1879). In some of the United States a restrictive indorsee cannot sue in his own name: Rock Co. Nat. Bank v. Hoi- ligter, 21 Minn. 385 (1875); Isolin v. Rowlands, 30 Hun (N. Y.) 488 (1883). 36. Where a bill is negotiable in its origin, ifc be negotiable until it has been («) n««gi)tiAbh> , . , bill ceases COntUlUeS tO *" *"*"■ ro8trictiv(^ly indorsed, or (b) discharged by payment or otherwise : Imp. Act, a. 86 (1). iV': ■ I NEGOTIATION. 215 A bill is not negotial>le in its origin which contains i^ 36. ■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 particu- lar person or to his order: section 8. • As to what is a restrictive indorsement, see section 35. I'nder the Quebec Civil Code, which recognized re- strictive indorsements, it was provided by Art. 22SS, that " no indorsement other than that by tlie 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 banli 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 tlie writing on the back. It was held, that such a cheque could not be restrictively indorsed: Exchange Hank v. Quebec Bank, M. L. R. 6 S. C. 10 (1890). 2. "Where an overdue bill is negotiated, it canNegroti*- be negotiated only subject to any defect of title overdue affecting it at its maturity, and thenceforward no person who takes it ca]i acquire or give a better title than that which had the person from whom he took it : Imp Act, s. 36 (2). Overdue. — A bill payable (m demand ia deemed to be overdue when it appears on its face to have been in cir- culation for an unreasonable length of time; section 30, 8-8. 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 elapstnl 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 r^ ^^fmmmm 216 BILLS OF EXCHANGE. ,Jii:- ''i H 5 'f r Overdue bill. § 36. " .3. Where an overdue note is transferred, and there has been a partial failure of consideration, such failure Is a good defence pro tanto: Rennie 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 bene- fit, 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 equiti«;3 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 NB.GOTIATION. 217 V. Robs, 8 U. C. C. P. 299 (1858); Metropolitan Bank v. Snure, 10 R Qg U. C. C. P. 24 (1860); Hughes v. Snure, 22 U. C. Q. B. 597 (1863); J! L Canadian Securities Co. v. Prentice, 9 Ont. P. R. 324 (1882); Fer- overdue guson V. Stewart, 2 U. C. L. J. 116 (1856). biU. C. Where an agent of the holder disposes of an overdue note, I without authority, tliough for value, the purchaser obtains no \ title against the principal: West v. Maclnnes, 23 U. C. Q. B. 357 (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. 338 (1867 >. S. An agreement not to negotiate a note after maturity Is an equity attaching to such note when overdue: Grant v. Win- stanlej', 21 U. C. C. P. 257 (1871); Parr v. Jewell, 16 C. B. 684 (1855). *'■• I \ 9. The holder of an overdue note agreed to let a board bill go in reduction. Held, that a subsequent transfer is subject to this claim: Ching v. Jeffery, 12 Ont. A. R. 432 (1885). 10. Where the plaintiff received the note sued on after ma- turity 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: Brooks v. Clegg, 12 L. C. R. 461 (18G2). 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 sub- ject to all the equities that had arisen meantime between the maker and payee: Duguay v. Senecal, 1 L. C. L. J. 26 (1865). 12. A person receiving by indorsement a note after it was due, held it under Art. 2287 C. C, subject to the objections to which it was liable in the hands of the indoraer. This article differs from the law of England, which makes the indorser liable only to the equities attaching to the note itself, that is, to the eiuities arising out of the transaction in the course of which the note was made, but not to those arising out of a collateral mat- ter: Amazon Ins. Co. v. Quebec and Gulf Ports S. S. Co., 2 Q, L. R. 310 (1876). As to law of England see Whitehead v. Walker, 10 M. & W. 696 (1842); Quids v. Harrison, 10 Ex. 572 (1854). 13. Neither this section nor Art. 1487 of the Civil Code pre- vents the purchaser in good faith of negotiable instruments *■?'■ m I 218 BILLS OF EXCHANGE. 1 . (i ■ 1^; Overdue biU. S 36 ^^^^^ thPir maturity from acquiring a good title from an agent, 1- who disposes of them in fraud of his principal: Macnlder v. Young. Q. R. 3 Q. B. 539 (1894). Affirmed in the Supreme Court, where it was also helfi that u person taking such instruments after maturity, took th< i.i subject not only to the equities of prior imrties to them, but also to the equities of third parties; Young V. Mrcnider, 25 S. C. Can. 272 (18E5). See Re European Bank: L. R. 5 Ch. 358 (18Y0). 14. Where a person indorsed a note at the request of the payee on the understanding that he was not to be held liF.ble, he is not liable to a party to whom the payee afterwards indorsed it after it was due: McQuin v. Sorell, 7 N. B. (2 Allen) 140 (1851). 15. 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 McLcod, 12 N. B. (1 Han.) 588 (1869). 16. An agreement between the maker and payee of a promis- sory note that it shall only be used for a particular purpose, constitutes an equity which attaches to it in the hands of a bona fide liohler for value who takes it after dishonor: MacArthur v. MacDowall, 23 S. C. Can. 571 (1893). 17. A note is made payable for an illegal consideration. After maturity the payee indorses it. The indorsee cannot recover from the makar: Amory v. Merry weather, 2 B. & C. 573 (1824). 18. 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, but not to a set-off in respect of a debt duo from the indorser to the maker of the note, arising out of collateral mat- ters: Burrough v. Moss, 10 B. & C. 558 (1830). 19. Part payment is an equity which attaches to a bill: Graves v Key, 3 B. & Ad. at p. 319 (1832). 20. The fact of a bill being an accommodation bill, is not an equity 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. & R. 566 (1834). 21. The fact that a bill is an accommodation bill does not pi event its being negotiated after m iturity. A plea to that effect by the acceptor in an action by the indorsee, held bad: Sturte- vant V. Ford. 4 M. & G. 101 (1842); Ex parte Swan, L. R. 6 Eq. 344 (1868). — • - • ; • 3 'I NEGOTIATION. 219 'i 22. A plea that a previous action was begun by another R Qg person and is pending, is no defence to an action on a note Itrought by a holder who acquired it after maturity : Deuters v. Townsend, 5 B. & S. 613 (1864). 3. A bill payable on demand is doemetl to be ^^'he" i»ii . 1 7 ' . deeme<*r>.f1:nai<«'FW*^M' c rf- y ^ i*- ^< Q^ :/. i^ 1.0 I.I '" IM ■ 1^ 1.25 M |2j_ 20 U II 1.6 -»• ^^ <^ ''^ /^ >^^ %;^^#.% VI /^ ^^ r ^1^ i?>l^ '^ Photograpliic Sciences Corporation 23 WESY MAIN STREPT WEBSTER, N.Y. 14580 (716) B73-4S03 .«• ■* «?. .5 rf- E?^ I* Imt^^' ;! i It) .1 m '••; ; i Ihl J ?fiii 220 BILLS OF EXCHANGE. § 36. ^^ ^^'*^' indorsement bears a date, it is presiamed to ) be the true date of indorsing. If undated, it is presumed ' to have been indorsed before maturity and either ou the date of the bill or within a reasonable time there- after. In any of such cases the contk-ary may be proved: see Lewis v. Parker, 4 A. & E. 8:^8 (18 6): Parkin v. Moon, 7 C. & P. 4()S (1836); Bounsall v. Harrison, 1 M. & W. 611 (1836); Good v. Martin, 9o U. S. (5 Otto) 94 (1877). Taking bill mbse 5. Where a bill which is not overdue has been nuentto dishoiiorecl, 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 , but nothing in this sub-section shall affect the rights of a holder in due course. Imp. Act, s. 36 (o). This may happen in case of non payment of a bill payable on demand, or of non-acceptance of anotiier bill, when the bill has not been noted or protested. If taken with notice it is open to the same objections as an over* due bill. In England before the Act there were con- flicting decisions. T!ie riile laid down in Crossley v. Ham, 13 East, 498 (1811), md O'lveefe v. Dunn, 6 Taunt, 3t)5 (1815), has been adopted, and ihat in Ooodnian v. Harvey, 6 Nev. & Man. 37U (1836), rejected. As to notice, and holders in due course, see sections 20 and 38. Negotia- 37. Wiiere a bill is negotiated back t(i the to ,jMrty drawer, or to a prior mdorser, or to the acceptor, alruady , , i . , , , • . i. i • liable such party may, subject to the provisions of this Act, re-issue and furtlier 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. I imsri NEGOTIATION. 221 A bill is negotiable until it is restrictively indorsed § 37^ or discharged by payment or otherv/ise: section 36, s-s. 1. As to restrictive indorsements, see section 35; and as to discharge, sections 59-63. 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 ha3 taken up the renewal note out of his own tunds, at least so as to make a subsequent indorser liable: Cuvillier v. Eraser, 5 U. C. Q. B. 152 (1848). 2. The drawer of a oill payable to his order specially In- dorsed it. It subsequently came into his hands after maturity. He struck out all the special indorsements, and indorsed it to plaintiff, who sued the acceptor. Held, that he was entitled to recover: Black v. Strickland, 3 O. R. 217 (18:!3). 3. A bill was paid after maturity by the drav^er, 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. 439 (1889). 4. Ab to a blil negotiated back tu the drawer, see Bishop v. Hay ward, 4 T. R. 470 (1791); Wllders v. Stevens, 15 M. & W. 208 (1846); Woodward v. Pell, L. R. 4 Q. B. 55 (18fi8); to a prior indorser, Foster v. Farewell, 13 U. C. Q. B. 449 (1S55): Moffat v. Rees, 15 U. C. Q. B. 527 (1858); Gunn v. Macpherson, 18 U. C. Q. B. 244 (1859); Morris v. Walker. 15 Q. B. 594 (1850); Wilkin- son V. Unwin, 7 Q. B. D. 636 (1881); to the acceptor before ma- turity, Attenborough v. Mackenzie, 25 L. J. Ex. 244 (1856). 5. One of two joint makers of a note to whom it is negoti- RightH of ated back, cannot re-issue and further negotiate It, so aa to make the holder, the other joint maker liable: Hopkins v. Farewell, 32 N. H. 429 (1865); Patch v. King, 29 Me. 448 (1849). 38. The ri^^lits and powers oC the liokler of a / bill are as follows : — (a) He may sue on tlie bill in his own name : Imp. Act, 8. 38 (1). The "holder" of a bill has been defint'd in section 2 as the payee or indorsee who is In possession of i1. or -, !:% 222 BILLS OF EXCHANGE. i i'l : si' lit. •■'! Rights of holder. siS^: § 38. ^^^ bearer thereof; and "bearer" as the person in pos- session of a bill or note which is payable to bearer. As there pointed out, the holder need not be the owner; it is suffici€*nt for him to be in possession and entitled at law U) 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 to whom it is negotiated, until it is restrictively indorsed or discharged, is the holder. If a holder sues on a note, and he is not the owner but 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. K. 2 S. C. 105 (18Si»); Leo v. Zagury, 8 Taunt. 114 (1817); Re Anglo Greek Naviga- tion To., L. K. 4 Ch. 174 (1809); 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 negoti- able instrument, and has the special privileges accorded to such instruments by the law merchant. The right to sue upon a bill accrues upon its dis- honor for n(m-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 G9. In the case of the death of the holder of a bill, his executor or i)ersonal 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. ILLUSTRATIONS. 1. Defendant gave to plaintiff's 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 possession up to her death and that there was no administration to her estate was upheld: Robinson v. Crlpps, 6 U. C. C. P. 381 (1856). fs 'y .^-^fv**". ?i4ia,r»*'»^fr«ifasfi^4«f"i;'Tip.F>f^w?f^^-w-^p RIGHTS OF HOLDER. 2. Plaintiffs declared against ths acceptor of a 1)111 as drawn In their favor. It was on ite face payable " to the order of 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 payaole 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 bene- ficial interest plaintifrs were alleged to have lu the bill did not entitle ih-^m to sue on it in their own name: Bank of U. C. v. Rutta . U. C. Q. B. 451 (1863). 3. Ti o 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 ol' 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. Hurd, 3 Ont. A. R. 519 (1879); Mills v. Philbin, 3 Rev. de Leg. 255 (1848). 5. An action on a promissory note not produced will be dis- missed: Hudon V. Glrouarri, 21 L. C. J. 15 (1875). 6. The holder of a promissory note, although without per- sonal interest in It, may sue on it in his own name, the defen- dant being sufficiently protected by being allowed to set up any defence he may have against the real owner: McKinuon v. Kerouack, 15 R. L. 34 (1877); Biron v. Brossard, M. L. R. 2 S. C. 105 (1880); Leet v. Ingram, Ibid. (1885); Fulton v. Lafleur, Q. R 5 S. C. 431 (1894); Allison v. Central Bank, 9 N. B. (4 Allen) 270 (1859); Howard v. Godard, ibid. 452 (1860); Street v. Qulnton. 18 N. B. 567 (1879). 7. 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 plaiutifT: Lemay v. Boisslnot, 10 Q. L. R. 90 (1883). 8. Where an Indorser paid a note which was detained by the government, and there was no delivery, ari.ual or legal, to the company plaintiff, the latter could not re ;over as holder: Com- pagnie de Moulins v. Parkin, Q. "^ 4 s. C. 365 a893). 8. A promissory note mar' .- payable to John Souther & Son, was dued by John Souther Sl Co. It being v?kar from the evi- dence that the plaintiffs were the persons designated as payees, It was hold that they could recover: Wallace v. Souther, 16 S. C. Can. 717 (1889), affirming 20 N. 8. 509 (1888). ; , : 223 §38. Right to sue. ' 224 BILLS OF EXCHANGE. >" ! f i w\ , if?" 1 ^111. ; S QQ 10. A note in favor of a life ineurance agent wl+h the addition ' 1- of his agency, given for a premium on a policy, may be sued by Right to ^"^ °^ transferred by indorsement: McDonald v. Smaill, 25 N. S. •ue. 440 (1893). 11. Where a biU 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. Plgot, 12 Mod. 193 (1699); Ord. v. Portal, 3 Camp. 239 (1812); Low v. Copestake, 3 C. & P. 300 (1828); Wood V. Connop, 5 Q. B. 292 (1843); Emmett v. Tottenham, 8 Ex. 884 (1853): Demuth v. Cutler, 50 Me. 300 (1862). 12. 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. Broadhurst, 9 C. B. 173 (1850); Logan v. Cassell, 88 Penn. St. 290 (18^9); Towne v. Wason, 128 Mass. 517 (1880). 13. The holder may sue on a bill without ever havlnp 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); Pol- rier v. Morris, 2 E. & B. 89 (1853). 14. 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 brcught 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). I If Rights of holder in (b) Where he is a holder in due course, he due com"e. 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 may enforce payment against all parties liable on the bill ; Imp. Act, s. o8 (2). A "holder in due course," is one who tnkes a bill, i comjdeto a ad regular on its face, before maturity, in / good faith, witliout notice of any defect in the bill or in tlie title of the person negotiating it to him. The principal defects of title arise from fraud, duress or :l3S?!S"^^f?S'Sfi!'3-*i!^4t'?!iPS.' "^ :'.•;*' <'^f,*'»w^r--"r."' RIGHTS OF HOLDER. othfr anlawfnl means, illegal consideration or fraudu- lent negotiation: section 29. '* Merc per.sonal defences'' might include the fon>going, and also set-off, compensa- tion, etc. Thej' would not include want of capacity, want of authority, the defence of forgery or the like. Anything which renders a note absolutely Toid would not be included in either of the above terms. 225 §38. SUt". ILLUSTRATIONS. See Illustrations under section 29, s-s. 2, and 30, s-s. 2. 1 A note indorsed on <^ondition that it was to be used to K'S^'' ^ renew another note wi.g fraudulently negotiated by the maker ' for value before maturity. Held, that the holder, being in good faith, could recover from the lndors'»r: Larkin v. Wiard, 5 U. C» O. S. 661 (1838): Cross v. Currie, 5 Ont. A. R. 31 (1880). • 2. A note given for lottery tickets is not void under 12 Geo. 2, c. 2S. in the hands of a bona fide holder for value before ma- turity: 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 sura 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. 339 (1890). 4. A cheque given in settlement of losses at matching coppers is a note of hard given in consideration of a gambling debt with- in R. S. O. c. 47, 3. 53, 8-s. 3, and such a security is void under 9 Anne, c. 14, even in the hands of a bona fide holder for value: Summerfeldt v. Worts, 12 O. R. 48 (1886.) 5. A note given for a gambling debt Is null and void even in the hands of au innocent indorsee for value before maturity: Biroleau v. Dorouih, 7 L. C. J. 128 (1863). 6. A note given in violation of paragraph 3 of the Insolvent Act of 1864 is an absolute nullity, and Is void ab initio even in the hands of a third party, innocent holder for value befo»*e ma- turity. Davis v. Muir, 13 L. C. J. 184 (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 repudlattd by the bank when the cheques are held by a bona fide holder for value: Banque Nationale v. City Bank, 17 L. C. J. 197 (1873). m'i..ii.e.a. — 15 ' T^mmmf^ I 1 '< r 226 §38. Rifrht to sue. BILLS OF EXOHANOE. 8. A note given for an illegal consideration, namely, to in- duce a witness not to give evidence on a criminal prosecution, may be collected by a bona flde holder for value before maturity: Dorais v. Challfoux, 6 R. L. 325 (1875). 9. The holder of a promissory note for value without notice an recover against the indorser, although the agent to whom the latter transmitted the note delivered it against his instruc- tions: Sylvaiu 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- Bhlp name, binds the firm in the hands of a bona flde 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 right to have the action stayed by dilatory exception, until other parties who may lie liable to him are called in as warrantors: Durocher v. Lapalme, M. L. R. 1 S. C. 494 (1S85); Block v. Lawrance, M. L. R. 2 S. C. 279 (1886); Molsons Bank v. Charle- toois, Q. R. 2 S. C. 286 (1892); Merchants' Bank v. Moseley, 24 N. S. 301 (1892). Beaulieu v. Demers, 5 R. L. 244 (1874); and Mathieu V. Mousseau, 5 R. L. 260 (1874), contra, ovnrruled, 13. Where an illiterate man was led to believe that he was becoming a parly to an agreement, but the instrument proved to be a promissory note, and he was not guilty of negligence, he Is not liable on the note even to a holder in due course: Banque Jacques Cartier v. Lescard, 13 Q. L. R. 39 (1886); L'Abbe v. Nor- niandin, 32 L. C. J. 163 (1888); Foster v. Mackinnon, L. R. 4 C. P. 704 (1869); Puffer v. Smith, 57 111. 527 (1871); Griffiths v. Kellogg. 39 Wis. 290 (1876). 14. A person who receives for value in good faith a cheque on the day of its date which is payable four days later, can en- force it against the drawer, even if Improperly obtained by the first holder: Kenny v. Price. 20 R. L. 1 (1890). 15. A promissory note made bj a married woman, separate as to property, in favor of a creditor of her liusbaiid is absolutely null, and no action can be maintained thereon l)y a bank which has discounted the same in good faith hefore maturity, in igno- rance of the cause of nullity: Banque Nationale v. Guy, M I^. R. 7 S. 0. 144 (1891); Ricari v. La Banque Nationale, Q. R. 3 Q. B. 161 (1893). RIOFiTS OF HOLDER. 227 16. Abuse of power or betrayal of trust by an agf-nl who in- S OQ dorses a bill of exchange for his principal, does not affect the recourse against the latter of a bona fide holder for value, whoR,g|,tj„ had no knowledge of such abuse or betrayal: Quebec Bank v. sue. Bryant, 17 Q. L. R. 98 (1891). 17. Where the maker was aware he was signing a promissory note, fraud on the part of the person to whom he delivered it will not prevent a holder in due course recovering on It: Banque Jacques Cartier v. Leblanc, Q. R. 1. Q. B. 128 (1892). 18. 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. 375 (1888). 19. In an action by a bona fide indorsee of a note for value before maturity against the indorsers, it is no defence that the note was indorsed in the firm name by one of the partners fraudu- lently 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). 20. A writ of attachment having issued against the payee of a promissory note, he indorsed 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 was en- titled to recover: Maclellan v. Davidson 20 N. B. (4 P. & B.) 338 (1880). 21. A bill was Indorsed for value 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 indorsee, who ftued upon it. The acceptor set up as a defence that he had not leceived value from the drawer. Held, that this was no defence; that the mere sending of the bill back to the drawer did not de- prive the plaintiff of his rights as a holder in due course: Cohn V. Werner, 8 T. L. R. 11 (1891). (c) Where his title is defective, (1) if he ne^'O-HoWer tiates the bill to a holder indue course, that holder rivetitir 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 tlie bill : Imp. Act, s. 38 (3). n I -A i \ '228 BlhLH OF EXCHANGE. § 38. ^^'^ ^^^ preceding siib-sertion 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 in defective: section 5!>. 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 tjjief, linder, or fraudulent holder: Byles, p. 293; Randolph, § 1444. In order to vitiate the payment by the maker of a promissory' note indorsed in blank, bad faith must be shown; payment under circumatances of suspicion is not enough. The mnker is only bound to assure himself of the genuineness of the signatures, and is not bound to make any tmquiry: Perrie v. Wardens of (he House of Industry, 1 Rev. de Leg. 27 (1845); Johnson v. Way, 27 Ohio St. 374 (1875). General Duties of the Holder. Sections 39 to 52, inclusive, define the general duties of the holder with referem e to obtaining payment of the bill. They include its presentment for acceptance where this is necessary, presentment for payment, notice of dis- honour to those w\u are onlv 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 presentinent, protest and notice ditfer from those in the Imperial Act. These will be pointed out in the notes under the respective sections. When pre- 39 _ Where a bill is payable at sight or after for accept- sic/ht, presentment for acceptance is necessary in nwf'ssary. order to fix tho maturity of the instrument ; Imp. Act, s. 39 (1); C. C. 2290. i PUESENTMFNT FOR ACCEPTANCE. This 8ub-s<'ctiou 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 Commons 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 lt>, 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. The acceptance of a bill payable at or after sight should be dated, so that it may be known from what day the time runs. A sight bill is payable on the third da.v after acceptance, one payable after sight on the third day after the expiration of the time mentioned in the bill. See section 14, s-ss. 3 and 4, and section 40. The sub-section as it stands is in accordance with the law of England before the passage of the Act of 1871; Camp- bell V. French, T. R. at p. 212 (1795); Holmes v. Kerrl- son, 2 Taunt. 323 (1810); Sturdy v. Henderson, 4 B. & Aid. 592 (1821). A bill should be presented for acceptance to the drawee, personally, or at his place of business or resi- dence; or to his authorised agent, '^f it is addressed to him at a particular place, it ma\ be trLatt■->,.;■. PRESENTMENT FOR ACCEITANCE. 281 however, advisable to present such bills for acceptance, § 39^ in order to secure the liability of the drawee it he ac — cepts, or to have recour.se at once against the other parties liable on the bill if he refuses to accept. An apent should in all cases present such bills for accept- ance, or he may be held liable for negligence: Allcu v. Suydam, 20 Wend. (N. Y.) 321 (IS^S); I'othicr, Change, No. 128; Noiiguier, § 4«i2. If the bill contain the words '• acceptance waived " or equivalent words, il need not be presented except for payment: Reg. v. Kinnear, 2 M. & R. 117 (1838); Freeman v. Boynton, 7 Mass. 483 (1811); Nouguier, § 470. 4. Where the holder of a bill, drawn payable JJ^^«»»^ elsewhere than at the place of business or resi- 1""*^"*:"'- dence of the drawee, has not time, with the exer- cise of reasonable diligence, to present the bill for acceptai 6 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 drawer and indorsers. Imp. Act, s. 39 (4). This sub-section is introduced in order to prevent hardship from the rule laid down in sub-section 2. It is applicable to bills payable a. fixed period after date, or on the occurrence of a spec ied event or at a fixed period after it. What is " reasonable diligence " will depend upon the facts and circumstances of each particular case. 40. Subject to the provisions of this Act, when Time fw a bill payable at sight or after sight is negotiated, hm^py"^ the holder must either present it for acceptance or si^ht' negotiate it within a reasonable time : Imp. Act, s. 40 (1) ; 64-65 Vict. c. 17, s. 5 (Can.). ter mi BILLS OF EXCHANGE. m ' §40. The words "at sight or" are uot in the Imped il Act, as bills payable at sight being payable ou demajfld aeed 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, ( mit- ting bills payable at sight from among those payable on demauu. I^his was remedied, and these words added, by the amending 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: G. C. Arc. 2291. As to what is a reasonable time, see sub-sec- tion 3. The reason for the rule is that the drawer, and prior indorsers, if any, have -a. right to expect that tl.ey 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 ihe ac- oei^tor. " Subject to the Provisions of this Act."— These provisie?:H are those that relate to excuses for present- ment, which are found in section 41, s-s. 2, !)' ' « ' ifnotpi*. 2. If he does not do so, the drawer and all indorsers prior to that holder are discharged : As*') 3. In determining what is a reasonrble time reasonable time. within the meaning of this section, r. ^^rd shall ■ .^1 . he had to the nature of the bill, the usage of trade . . with respect to similar bills, and the facts of the 1 particular case. Imp. Act, s. 40 (2) (3). What is a reasonabl*^ time to present such a bill for acceptance has l>eon held to be a mixed question of law PRESENTMENT FOR ACCEPTANCE. 238 aiid fact: Perley v. Howard 4 N. B. (2 Kerr) 518 (1844); § 40 Tindal v. Urown, 1 T. R. 168 (1786); Muiliuan v. D Kguiuo, ' ^- 2 11. Bl. 565 (1795); Shute v. Robins, 3 C. & P. 80 ( 1828) ; J^j'«;'" Mellish V. Rawdon, 9 Bing. 416 (1832); Mullick v. Kada- " ^ ""'' kissen, 9 Moore P. G. 46 (1854); Wallace v. Agrj, 4 Mason (U. S.) 336 (1827). But see section 36, s-s. 3, where what is an unreasonable length of t'lue for a demand bill to be iu circulation is made a question, of fact alone. No absolute rule hasi ever been laid down in Eng- land, the United States or Canada, as to what is a reasonable time for such presentnient. hi Franci, a limit ot three months isi fixed for Europe and Algeria, four months for Asia, six months for Aneiica au'i Southern Africa, and a year for the rest of the world: Code de Com. Art 160, as amended by the law of the 3rd of May, 1862. ILLUSTRATIONS. 1. A bill drawn in Toronto on Aiigast 6th, Dy a ptrty deal- ing in bills, on New York, payable at sight, in favor of a party living in Illinois, tc be sent there as a remittance and for cir- culation, 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: 2 yes V. Joaeph, 7 U. C. Q. B. 505 (18G0). 2. A bill of exchange was drawn on the 27th of August, and after passing through the hands of two intermediate holders, was presented on the Ist of September, and refused payment, and protested on Septtmber 8th, all parties being iu Montreal. The holder sued the last indorner. Held that presentation and protest had not been made with due diligence, and action dismissed: Harris v. Schwob, 3 R. L. 453 (1871). 3. Defendants indorsed on October 8th, a bill payable after sight, drav/n on Liverpool, E.igla»id. The drawer held it over two malls, 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 dir??nce in presenting. Flea struck out on th ; ground that there was no such delay as would constitute a defence: Wylde v. W'raore, 7 N. S. (1 G. & O.) 504 (1869). 284 BILLS OF EXCHANGE. i». it f\¥'' m }■' 1 g 40 ^' ''^ ^^^^ having found a vtrdlct against the drawee, on a '_ bill drawn in Windsor, payable in London a month after sight, and presented on the fourth day, the Court held that the deiay was not unreasonable and refused a new trial: Fry v. Hill, 7 Taunt. 397 (1817). 5. A bill drawn on August 12th, in Carbonear, Newfound- land, on London, payable 93 days afti r sight, was oreseuted for acceptance November 16th. There was a daily mail from Carb- onear to St. John's. 20 miics, and a tri-weekly mall from St. John's ^o 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 (1839). 6. A bill drawn at Calcutta, February 13th, on Hong Kong at 50 days after sight was indo-sed and negotiated by the drawers. On account of the state of the money market the in- dorsee kept it five months and then nogotiated it. The holder presented it on October 24th 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: MuUick v. Radakissen, 9 Moore P. C 46 (1854). Fillies as to 41. A bill is diily presented for acceptance nient for whlcli Is presented in accordance with the follow- acccptance . , 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 bis behalf, at a reasonable hour on a business day and before the bill is overdue : Imp. Act, s. 41 (1)(«). By or for holder. Hour uii'l day. The holder bj' whom or on whose behalf a bill is presented need not be the owner or even a lawful holder: section 2 (q)\ Morrison v. Buchanan, 6 C. & P. 18 (1833); Nouguier, § 4(52. As to what is a reasonable hour may depend on where the bill should be presented. If at a bank it should be durinii; banking hours; if at another office, during ordinary offico hours; if at a private house, it may be earlier in the morning or later in the evening: PRESENTMENT FOK ACCEPTANCE. 235 Parker v. Gordon, 7 East, 385 (1806) ; Elford v. Teed, 1 § 41^ M. & S. 28 (1813) ; Wilkins v. Jadis, 2 B. & Ad. 188 - (1831); Cayuga Co. Bank v. Hunt, 2 Hill (N. Y.) 6:^ (1842). Any day is a business day except those men- tioned 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, and should then be presented for payment within a reason- able time so as to bind indorsers after acceptance: sec- tion 45, 8-s. 2 (b). The Act does not give ).recise directions as to theMtxieof presentment of a bill for acceptancj. Some of the rules ,„j,i,t. laid do*vn 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 reieive 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 ac- ceptance 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. 5 Metcalf (Mass.) 216 (1842). (h) Where a bill ia addressed to two or more i^ra wees arawees, who are not partners, presentment mnstn^rH. 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 (rf); and the holder \ 236 §41. BILLS OF EXCHANGE. should either notiry the drawer and indoraerti, or treat the bill as dishouoied by non-afceptance; otherwise the drawer and indorsers will be discharged: section 44. Drawee (c) Where the drawee is dead, presentment may be made to his personal representative ; Imp. Act, s. 41 (c). . . , ... As to the law in England, Chalmers says, p. 13T, " Before this eftactment 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. 221M) C. 0. : " ff the drawee be dead or can- not be found and is not represented, presentment is made at his last known domicile or place of business." It will be observed that presentment to the personal i representative is optional with the holder. Ho may treat i the bill as dishonored by non-acceptance without present- ing it at all: sub-section 2. ' : Through (<^) Where authorized by agreement or usage, a presentment througii the post office is sufficient : Imp. Act, 8. 41 (e), " This enactment gives effect to the recognized prac tice among English merchants " : Chalmers, p. 137. Long before the Act it had been well established with regard to cheques: Bailey v. Bodenham, 16 C. B. N. S. 288 (18u4); Prideaux v. Criddle. L. R. 4 Q. B. 461 (1869); Hey wood v. Pickering, L. R. 9 Q. B. 432 ^1874). No such usage, it is believed, has yet been estab- - lished in Canada. As to presentment for payment through the post, or at the post oflflce, see section 45, s-ss. 6 and 7. ,'. «¥:_--:r'yfiHrt«-A;'' U^^ PRESENTMENT FOR ACCEPTANCE. 237 i tixcusea for lum- prestait niHiit. 2. Presentment in accordance with these rules § 41. is excused, and a bill maybe treated as dishonored^ by non-acceptance — (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. 6 (Can.). Where the drawee Is dead ihv. holder may either r^rawee treat the bill as dishonored by uou-acceptance or may* present it to his personal representative: sub-section 1 (e). The Act of 1890 read " Where the drawee is dead or barknipt." followinj? the Imperial Act. As there is no bankrupt law in Canada the words were struck out in other places, but left in here by inadvertem-e. They were struck out by the amending Act of 1891, Where there has been an assignment for the benefit of cridi- tors, or an 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, ss. 2; and as to capacity to contract by bill, see section 22. (5) Wljere, after the exercise of reasonable Pn-s^-nt- diligence, such presentment cannot be effected ; IS^i'Lssib'e Imp. Act, s. 41 (2) {h). Reasonable dilij^ence is a (juestion to be detennined according to the facts and circumstances of each par- ticular case: see section 45, s-s. 2, and section 50, s-s. 2 (n). (c) Where, although the presentment has been (jronnd of irregular, acceptance has been refused on sonie'^""'*" other ground: Imp. Aot, s. 41 (2) (c). > . . . Xi ' f 288 HILLS OF EXCHANGE. § 41. '^'^''* '^ ^^ ^^^*^ ground of estoppel. A refusal to ac- cept is au ackuowledgment of the sufflcieucy of the pre- sentment. Noexouse. 3. The fact tliat the holder has reason to be- lieve that the bill, on presentment, will be dis- honored does not excuse presentment. Imp. xVot, 8.41(3). This was the law in England before the A.ct: Ex parte Tondeur, L. R. 5 Eq. 1()5 (18G7j. A similar rule prevails as to presentment for pay- ment: section 46, s-s. 2 (a). Non-ac- ceptance. Two (lays to acceiit. 42. When a bill is duly presented for accept- ance and is not accepted on the day of presentment or within two days thereafter, the person j^resent- ing it must treat it as dishonored by non-accept- ance. If he does not, the holder shall lose his right of recourse against the drawer and indorsers. Imp. Act, 8. 42. In the Imperial Act a bill is to be treated as dis- honon'd if it is not accepted '* within the customary time." In the Canadian bill the same expression was used. It was changed in the Oommons so as to reijuire acceptance on the day of presentment or on the next business day, which Avas in accordance with Canadian usage, at least in the principal cities of Ontario and Quebec. In the Senate the time was extended to two days. This nit-nns two business days: section 91. If in cases of urgency, say for instance, ^vhcre a demand draft is attached to a bill of hiding of perisluilde goods, a more s|)eedy acceptance is required, special instrui'- tions should be given, as otherwise the drawee would be justiflod in claiming and the party presenting the bill in granting the delay mentioned in the Act. In case \ ^i^^ niESENTMENT FOR ACCEPTANCE. 239 of a draft on a known business house the usual practice § ^O is to leave the bill for acceptance. If it is detained bj the drawee protest may be made on a copy or written particulars of the bill: section 51, s-s. 8. Before the law rt^juired an acceptance to be in writ- ing on the bill, detention beyond the time prescribed by law was treated as an acceptance: Harvey v. Martin, I Camp. 425, n. (1807). Such is still the law in most places where parol acceptances are recognized. 43. A bill is dishonored by non-acceptance — Di»i,on„r by noii-ao- (a) When it is duly presented for acceptance, ^^^p'^'^^e. and such an acceptance as is prescribed by this Act is refused or cannot be obtained ; or — (b) When presentment for acceptance is ex- cused and the bill is not accepted : Imp. Act, s. 43 (a) (b). The rules for the due presentment of a bill for acceptance have been given i" section 41, s-s. 1. The requisites of a valid acceptanc-^ are set forth in sections 17 and 19. If a qualifled acceptance is offered, see sec tion 44 as to the rights aad duties of the hohhn' 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 Recourse bill is dishonored by non-acceptance an immediate ca-ie. right of recourse against the drawer and indorsers accrues to the holder, and no presentment for pay- ment is necessary. Imp. Act, 3. 43 (2). The provisions of the Act to which this sub section is subject, and which suspend the immtnliate right of recourse against the parties named, are those relating to 240 BILLS OF EXCHANGE. § 43. a''<^eptanco and pavnifiit for honor, sections 64 to 67. If the drawer or indorser has named a referee in case of need, the holder has the option of proceedinj.^ immedi- ately against the drawer and indorsers after the dis- honor of the bill hy the drawee, or of resorting to the referee: section 15. If he applies to the referee and he accepts, the holder must await (he maturity of th<' hill 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 present- ment: section IS. Old law. Frpnch law. 5^N- in England the rule laid down in this sub-section has long been recognized as law. S' e as to the drawer, Mllford V. Mayor, 1 Douglas, 54 (1779); and as to the indorser, Hallingalls v. Gloster, 3 East, 481 (18'>3). So also in Upper Canada. In Ross v. Dixie, 7 U. 0. Q. B. 414 (1850). Kobins(m, C.J., said : " An indorser. like the dr.awer, is liable the moment the holder is refused ac- ceptance " It has been >i«'iH in England, that the ri;j;ht of action is not complete until notice of dishonor has had time to reach the parties: Whitehead v. AValker, 9 M. & W. 50G (1842); Castrique v. Bernabo, 6 Q. B. 498 (1844). In Quebec it was sufficient that tlie notice was sent: C. C Art. 2298. So also in the United States: Lenox v. Cook, 8 Mass. 460 (1812); Robinson v. Ames, 20 Johns. 146 (1822); Shed t. Brett, 1 Tick. 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. Tender old French law he had also to await maturity and protest for non-payment: Pothier, Change, No. 133; Preston v. Johnston, 2 Rev. d > Leg, 28 (1813). PRESENTMENT FOR ACCEPTANCE. 241 44. The hold(3r of a bill iiuiy refuse to take a >; 44. qiialitied acceptance, and if he does not obtain anAKto unuualilicd acceptance may treat the bill as dis- ..ccpi- honored by non-acceptance : Imp. Act, s. 44 (1). A qnaliticd k ;cept ^ce is ono which in oxpr^SH terms varii'8 the effect of the bill an drawn: sot lion 1!>. The examples there enumerated are acceptances that are con- ditional, partial, qiialiiied as to time or by sorae of the drawe<^8 only. The " nnqualitled " acceptance of this section is called a general acceptance in section 19. If the drawee insists upon addinp; anytiiinji to a bare ac- <'.eptance beyond indicating a bank or otlier place \vhert« he will pay, that will vary the terms of the bill, the holder may refuse to take it, and treat the bill as dis- honored. This has always been the law in England : Petit V. Benson, Tomberbach, 452 (1(597); Smith v. Abbot, 2 Stra. 1152 (1741); Parker v. (Jordon, 7 East, 1587 (18U6). Also in the Province of Quebec: ''The acceptance must be absolute and unconditional, but if the holder consent to a conditional or qualified acceptance the acceptor is bound by it ": (\ (\ Art.221):i. See also Pothier, (!hange, Nos. 47 49. The same doctrine is recognized in the United vStates: Daniel. § 465; Randolph; S <>21. If th. holder j lakes a qjalitied acceptance he is bound by it, and does ! 80 at the risk of releasing the drawer and iudorsers, save as provided in the tw<» following sub-sections. 2. Where a qualified acceptance is taken, and if taken the drawer or an indorser has not expressly or authority. impliedly authorized the holder to take a qualilicd acceptance, or does not subsequently assent there- to, such drawer or indorser is discharged from his liability on the bill; . The provisions of this sub-section do not apply Partial w. to a partial acceptance, whereof due notice has been ''^''**"*^" M'L.B.K.A.— 16 wt.;^_A -.j.. 1 <'~ ill 242 BILLS OF EXCHANGE. § 44. given ; where a foreign bill has been accepted as to part, it must be protested as to the balance: Imp. Act, 8. 44 (2). ThiH Hub soction is said by (Chalmers to introduce new law in England. He piobably refers to the excep- tion regarding a partial acceptance, us the first clause appears to have been well recognized in England before the Act of 1882: Byles (7th Ed.), p. 164; Ghitty (11th Ed.), p. 207; Sebag v. Abitbol, 4 M. & H. at p. 460 (1816); Rowe V. Young, 2 3. & B. 165 (1820). A similar rule prevails in the United States: Daniel, §§ 508, 515; Mc- Eowen v. Scott, 49 Vt. 876 (1877). If the holder is will- ing to accept the offer, he should then give notice of its <'xact terms to all the parties, and state his readiness to accept the offer, if they will respectively consent; Daniel, §510. What \h di-eniwl unseat. SI'.' Prusont- int'iit for pii.VTncnt. 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, 8. 44 (3). As to what is a " reasonable time " see section 45, H-S. 2 (b). 45. Subject to the provisions of this Act, a bill nnist be duly presented for payment ; if it is not so presented, the drawer and indorsers shall be dis- charged : Imp. Act, s. 45 ; C. C. 2322. Tlie provisions of the Act which relieve from pre- sentment of a bill for payment are the following: — Sec tiou .'{!), s s. 4, which alh>W8 a delay in certain cases for bills that must tirst be presented for acceptanc;?; sec- tion 48, s-s. 2, winch provides that a bill dishonored by nou acceptance need not be presented for payment; PRESENTMENT FOR PAYMENT. 243 m j;iid sf'ctiou 4(), which mentions the circumstances whirh s AR t'xcnse dehiy in presentinj; for payment, or dispensi' with it entirely. In presenting a bill it shonid be exhibited: section ^2, H-s. 4. Sec rases under (hn( snb-secHon. as to a bill beinj? at the place of payment on the day it mntures. For the rules as to the presentment of a cheque, see sec tion 7a. The consequence of not duly presentinj* a bill for payment is that the drawer id indorsers are diHcharRed from their liability, not only on the bill, but also on tli«' consideration for which it was given: Peacock v. Pur «ell, 14 C. B. N. 8. 728 (18(;a); Hart v. McDougall, 25 N. 8. 38 (1802); section 73. No [jresentmenf is necessai-y as afjainst the acceptor, who is the primary debtor; but if the bill be payable in a specified pla<'e and be sued before pr(»8entment, the costs are in the discretion of the Court: section 51, See McLellan v. McLellan, 17 U, C, O, P. 109 (1860). 2. A bill IS dnly presented for payment which KuiesMt.) . profient Ib presented in accordance with the following ment. rules : — (a) Where the bill is not payable on demand, presentment must be made on the day it falls due ; (6) 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 ; ' In determining 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). ! 1 ■"^"■•■pp^ 244 BILLS OK EXCHANGE. §45. Not Payable on Demand. Th<> nil.s as to the due (late of hiliH not pjijiiblc on dcnianc] ai-c pivcn in sc*;- tion 14. I'lt'senl merit inu8t Im- made on the third day of grace, unless that be a non business day, when it must be pi-cHt-nted on the next busineH.s day: Iticluix'dson v. Daniels, TJ. C. O. S. (171 (ISHH); McLeilan v. McLellan. 17 IT. C. C. P. 10!) (180G). The former rule In Quebec, in tliiis stated in C O. Art. '2'HH\: " Every bill of exchanj^e must be presented by the bidder, or in his behalf, to the drawee or accep- tor for payment, on vhe afternoon of the third day after the day it becomes due. or after presentment for accept ance if drawn at sifijht ; unless such third day falls upon a legal hcdiday, in which cas" the next day thereafter not being a legal ludiday is the last day of grace. If the bill bi' payable at a Lank, presentment may be made there either within or after the usual hours of banking." As to the liour at which presentment should b<> made, see notes to clause (c) of this section. Presentment on the second day of grace is a nullity: Wiffen v. Roberts, 1 Esp. 2G2 (1795); Afechanics' Bank v. Merchants' Bank, fi Mete. ia (1843); H( nry v. Jones. 8 Mass. 45:5 (1812); also on tlie day aftei- maturity unless the delay is ex- cused. Prideaux v. r'ollier, 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. Monagliau, 1 R. O. 473 ,(1871). Payable on Demand. — As to what bills are payable on demai'd, se<' section 11). The: modifying provision referred to is that relating to cheques which are bills of exchange j>ayable on demand: section 72. As 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 do Com. Art. KiO as amended. • ■ | PIIESENTMENT FOh I'AYMENT. 2i6 Ab to th«' delay for pfesentiiiff for p.aymont pro § 45 Tiiiasory notoK payable on deniami, see section 85. (c) Presentment unist be made by the holder "y whom, or by some person antliorized to receive payment t' wh,,,,.. on his behalf, at the proper phice, 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 ca inhere be found ; Imp. Act, s. 45 (8). frmii Ini IX 'rial Act. This clause differs from that in the Imperial Act in two particulars. There the words " at a reasonable hour on a business day " follow the words " on hi.^ be- half " in the second line; and the words "or to his re- presentative " in the fifth line are not found in the Im- perial Act, Our Act does not specify the hour of pre- Sv,ntment for payment; but section r»l, s-s. 6 (fc), provides that a protest Hiall 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. 2IW6. The English rule has been stated as fidlows: If auuiesrary bill be payable at a bank it must be presented within banking hours: P:iford v. Teed, 1 M. & S. 28 (1813) ; Tarker v. Gordon, 7 Easr, 385 (180G); Whitaker v. IJank of England, 1, C. M. & R. 750 (1835); if at a merchant's place of business, then within ordinary business hours*, liarclay v. Bailey, 2 Camp. 527 (1810), time 8 p.m.; Morgan v. Davison, 1 Stark. 114 (1815), time (>.30 p.m.; Allen v. Edmundson, 2 Ex. 723 (1848); if at a private house, probably a presentment up toi bed-time would be suflB cient: Triggs v. Newnhsim. 10 Moore, 249 (1825), time S p.m.; Wilkins v. Jadis, 2 B. & Ad. 188 (1831). In Quebec it has been held that presentmeut at the -closed doors of a bank after its usual office hours was I: •246 BILLS OF EXCHANGE. i 1 I , . ' Ht I,.'-: § 45. °*^*^ sufficient to base a protest upon: Watters v. R^iffen- ' titein, 16 L. C. R. 297 (1866). In New Brunswifk where a note was payable at a •* store," ttie only evidince wa& tliat wlien tlie holder went to present it the store waa closed. It was held that in the absence of eviden<'e it niiglit be inferred that it was closed in the due course of business, and that the presentment was not made at a reasonable time: Pat- teryon v. Taple.v, 9 N. B. (4 Allen) 292 (1859). Present- ment at The door of a store which was closed at 5 p.m. Iicld sufficient: Reed v. Kavanagh, 9 N. B. (4 Allen) 457 (1859). In Massachusetts a presentment at the maker's residence, ten miles from Boston, at 9 p.m. was held sufficient, although he and his family had retired: Farns- worth V. .Mien, 4 Oray, 453 (1855). In Maine a present- ment at the maker's house a few minutes before Jiid- night, when he was Makened up, was held insufficient Dana v. lawyer, 22 Me. 244 (1843). Present (o) A bill Is presented at the proper place : — nient at H^^Ifiwt (^) Where a place of payment is specified in the bill or acceptance, and the bill is there pn - * seuted ; Imp. Act, s. 45 (1) (a). The words " or acceptance " are not in the Imperial Act. According to Chalmers 1 he word "bill" includes acceptance. He says, p. 145: "The place of payment may be specified either by he drawer or the acceptor " : Gibb V. Mather, 2 Or. & J. 254 (1832); Baul v. Jones, 1 E. & E. o9 (18.58). Where a bill was payable at the office of the acceptor, Swansea, and wa« presented to him personally at Newport, it was held that an indorser was not liable: Beinistein v. [Isher, 11 T. L. R. 35G (1895). In England it is only when the acceptance state.^ that the bill ia to be paid at a particular place and not else- where that it must be presented there. Ho also form- iUfAAU^*^ kl^ A ■,ll!.7fftl*^»««?. ^^s^s^sz PRESENTMENT FOR PAYMENT. 247 eriy in Ontario as to both bills and notes, and in Prince § 45. Edward Island as to bills: see ante, p. 105. In Canada under the Act it is now snSicient to name the place of payment in the bill or acctptauce 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. 2G5 (1865), Ferrie v. Rykraan, Draper U. 0. 01 (1830); l)riKJ,'s v. Waite, 6 U. <\ O. S. 310 (1842); Dar- ling V. (Mllies, 20 N. S. 423, 9 C. L. T. 120 (1888); Clayton ' V. McDonald, 25 N. S. 446 (1893); Biggs v. Wood, 2 Man. 272 (1885); Philpott v. Bryant, 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. 8. V. Smith, U Wheaton iV. S.) 171 (1826); Cox v. " ^ National Bank, 100 U. S. (10 Otto) 712 (1879). Where a person accepts a bill payable at his own bank, it is m efifect an order to the bank to pay it unless notified to the contrary, and to charge it to his account: Robarts v. Tucker, 16 Q. B. 560 (1851); Bank of England, V. Vagliano, [1891] A. C. 107. If a bill is payable at a bank in a town where there is a clearing-house, it has been held in England that presentment through the clearinghouse is sufficient: Reynolds v. Chettle, 2 Camp. 596 (1811); Harris v. Packer, 3 Tyr. 370 (183.3); Boddington v. Schlenker, 4 B. & Ad. 752 (1833). If alternative places are named it is sufficient to pre^ sent 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.) 310(1869). A note dated at Brandon. Man., and made payable "at the Imperial Bank," is payable at the efflce of thai bank in Brandon, and not at the head office in Toronto} Ci,jimercial Bank v. Bissett. 7 Man. 58 • (IS!>1). PI ii-'^ 248 BILLS OF EXCHANG!':. f. , -. §45 Wo place, but No place, and no iwidrews. Other (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 rpsidence, 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) (b) (c) (d) ; C. C. (2308). .... Tliese rules have been generally followed in Can- ada, England 'uid the I'nited States. A note payable generally was left for collection at a bank in the town where the maker lived. Before it matured he lefi town. A clerk went to p!.'e8;'nt it at the house where he formerly lived, and could not learu there where he ii 'd gone to. lb' had heard before the note matured that the maker had left lown, 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 aslced as to his v/hereabouts. Held, that reasoaabh; diligence vvaa not used and the indorser was released. Browne v. Boulton. !) U. C. Q. B. U (1851). The maker of a promissory note, a merchant, having absconded before the note became due and closed hiii store, it was held that presentment at his late dwelling house was sutTlcient without proof of pres(mtment at the store, or that the store remained c'osed on the day the note fell due: R( 'musou v. Taylor, 4 N. B, (2 Kerr) 19S (1843). I'HLSKNTMENT FOR PAYMENT. 249 Tlie maker of a note was proved to have occupied an § 4:5. office up to May Ist, after which there was no direct — evidence of occupation, but his desK remained there as before. Hekl, in the absence of any proof of his having? changed his office, that presentment of the note there after the Ist of May was sufficient: Kinnear v. fJoddara. 9 N. B. (4 Allen) 559 (1860). See Fitch v. Kelly, 44 1. ( '. Q. B. 578 (1879); Evans V. Foster, 13 N. 8. 60 (1879); Hine v. Allely. 1 N. & M. 433 (1833); Buxton v. Jones, 1 M. & Gr. 83 (1840); Mc- Gruder v. Bank of Washington, 9 Wheaton (U. S.) 598 (1824); Sussex Bank v. Baldwin, 2 Harrison (N. J.), 487 (1840); West v. Brown, 6 Ohio St. 542 (1856); Granite Bank v. Ayers, 16 Tick. (Mass.) 302 (1835). 3. Where a bill is presented at the proper place, sufficient and, after the exercise of reasonable diligence, no»"iit. 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 8omi> p-rsou at the proper place, on the day a bill matures, to pa.y it. If no person is there prepared to pay, or authorized to refuse payment, or if the place be closed during reason- able hours, no further presentment is recjuired. and the bill may be treate2 (1862). 6. Where authorized by agreement or usage, a presentment through the post office is sufficient : Imp. Act, 8. 45 (8). - ■ » • ; > J, If is said that no such usage has existed in any part of Canada. Th^ policy of the Act is to use the post office as far as practicable. In F.ng!' - ']. 7. Where the place of payment specified in the No place in bill or acceptance is any city, town or village, and si«cifie). It should be presented to charge the indorsers: Knapp v. Bank of Montreal, 1 L. C. R. 252 (1850); Saul v. Jones, 1 E. &E. 59 (1858). -. .. , Bill for (d) As regards an indorser, where the bill was dationof acceptcd or made for the accommodation of that indorr.er, and he has no reason to expect that the bill would be paid if [presented : Imp. Act, s. 4(5 Where a bill was made and accepted for the ac- commodation of the last indorser and he made no pro- vision for it, he is liable without presentment bat the prior indorsers are not: T'lrner v. Samson, 2 Q. B. D. 23 (1876); see Foster v. Parker, 2 C. P. D. 18 (1876). J. ■■) ■■ ■ PRESENTMENT FOR PAYMENT. 255 {e) By waiver of presentment, express or im- § 46. plied. Imp. Act. s. 46 (2) {e). - ~ Waiver isbiudin;^ without consideration. It may be Waiver, eitlier before or after the time tor presentment. It may j be in writing or verbal, or inferred from conduct or cir- cumstances. It may be in or on tlie bill itself: sec- tion ir)(ft), ILLUSTRATIONS. 1. A declaration of inability to pay and request for time is a waiver as regards the party making it; McDonnell v. I..owry, 3 U. C. O. S. 302 (1833). 2. A promise to pi,/ after the bill is due with knowledge of the facts is a waiver: Mclver v. McFarlane, Taylor I'. C. 113 (1824); Macaulay v. McFarlane, Rob. & Jos. Dig. 49'1 (1840): McCuniffe v Allen, 6 U. C. Q. B. 377 (1849); McCarthy v. Phelps. 30 ibid. 57 (1870); City Bank v. Hunter, 2 Rev. de Leg. 171 (1847); Johnson v. Geoffrlon, 7 L. C. J. 125 (1863); Watters v. Lordly, 4 N. B, (2 Kerr) 13 (1842); Allen v. McNaughton. 9 N. B. (4 Allen) 234 (1858); St. Stephen B. Jcy. Co. v. Black, 13 N. B. (2 Han.) 139 (1870); Colwell v. Robertson, 17 N. B. (1 P. & B.) 481 (1877); Whitehouse v. Bedell, £6 N. B. 46 (1886); Deering v. Hayden. 3 Man. 219 (1886); Hopley v. Dufresne, 15 East 275 (1812); Croxon V. Worthen, 5 M. & W. 5 (1839); Armstrong v. Chadwick, 127 Mass. 156 (1879). 3. 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 waive;! presentment and was liable: Blackley v. McCabe, 16 Ont. A. R. 295 (1889). ; . 4. Waiver of presentment by the payee does not bind the drawer: McLellan v. McLellan, 17 U. C. C. P. 109 (1866). 5. Part payment is a waiver: 305 (1853). Rice v. Bowker, 3 I.. C. R. 6. A promise by an indorser to pay a composition on a note If it was not paid at maturity, is not a waiver of presentment or of protest: Union Bank v. Gibeault, 12 Q L. R. 145 (1886). 7. An offer to give new notes which the holder docs not ac- cept Is not a waiver: Bank of New Brunswick v. Knowles, 4 N. B. (2 Kerr) 219 (1843). pF^^"«HBHy • 25G BILLS OF EXCHANOE. e AR *• 'I'li*^ 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, uaking him to keep it. This was u waiver of presentment: Masters v, Stubbs, 9 N. B. (4 Allen) 453 (1860). . ::; ■ ? - / - < 9. Waiver of notice of dishonor Is not waiver of presentment: Hill v. Heap. I). & 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, ■ ■ 105 Mass. .^03 (1870). Dishonor by non 47. ^ t)ill is dishonored by non-payment [a) PHyineiit. wlien it is duly presented for payment and payment is refused or cannot hy, vibtained, or (6) when pre- sentment is excused and the bill is overdue and unpaid .* 2. Subject to the provisions of this Act, when a bill is dishonored by non-payment, an immediate right of recourse against the drawer, acceptor and indorsers accrues to the holder. Imp. Act, s. 47. Rrcours iigiiini 118.36); Ktniuedy v. Thomas, [1894] 2 Q, B. 759. Contra, ,-if, .JiSS^-llJ ii-"!!*..®;.!!*'/.' DISHONOll BY NON- PAYMENT. 267 Sinclair v. Robson, W U. C. Q. H. 211 (1858); Ontaiio ;^ 47. Bank v. FoKttT, L. N. 5J38 (188;?); Leftley ". Mills, 1 '- T. R. 170 (1791); Estes v. Tower, 102 Ma«8. 66 (1869). In Quebec the insolvency of the ajcceptor before tlie maturity of the bill makes it immediately exigible as ajjainst hitii: Lovell v. :\leikle, 2 L. ('. J. 6!> (185:5); Cor- coran V. Montreal Abattoir Co., 6 L. N. 1M5 a882i; On tario Bank v. Foster, 6 L. N. 398 (1883); but not as apiinst an indorser: (Juilbault v. Mi^ue, 20 R. L. 597 (1891). Prescription does not, however, be^in to run until the time fixed for the maturity of the bill: Whitley V. Pinkerton, Q. It. 2 8. C. 256 (1892». 1 Where thf acceptance is conditional the condition must be fulfilled or the acceptor is not liable Dufresne V. Jacques Gartier Building Society, 5 R. L. 2:^5 (1873); Fullei-ton v. Chapman, 8 N. S. (2 O. & O.) 470 (1871); Pot- ters V. Taylor, 20 N. S. 362, 7 C. L. T. 431 (1S88); On- tario Bank v. .McArthur, 5 Man. 381 (1889); Gammon v. Schmoll. 5 Taunt. 344 (1814). In an action on a bill or note payable at a particular place it is not necessary to show that there were not I Hufficient 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 bnt. A. R. 553 (1883). It 48. Siibiect to the provisions of tliis Act, when Notice ,.f a bill has been dishonored by non-acceptance or bv nud eiff'ot non-paynjent, notice of dishonor niiist be given to notice, 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. m'l.u.k.a. — 17 t i. 25H §48. Notice of diflhunur. niLLS OF EXCflAXOE. The ruU^H governing notice of dishcnor are to be found in section 41>. As to when a bill is dishonored by non-acceptance or non payment, see sections i'.i and 47. The liability of the drawer and indorsers of a bill being co'itingent u{)on its non-acceptance or non-pay- ment, notice of dislionor must be given to them, save in the exceptional cases mentioned in section 50, in order to hold them liable. • By section 50, any person who signs n bill otherwise / than as a drawer or acceptor, incnrs the liabilities of an f indorser to a holder in due course, and is subject to all the provisions of the Act respecting indorsers. Under French law, indorsers are dia 'harged for want of notice, but a drawer is not, unless he can show that (he 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 4t>, s-s. 2 (p). Mere knowledge of the dishonor of a bill is not enough to bind a drawer or indorser: Burgh v. Legge, 5 M. & W. at p. 422 (183!)); Carter v. Flower, 16 M. & VV. at p. 74!» (1S47). A notice in accordance with the rub s in section 49 should be given where notice is not ex- cused. Before the Act, persons who bocame parties to bills as warrantors, have been held not entitled to the same notice as ordinary ind .mers. As to their position no.:, see section 50, s-s. 2 (iV>, .aid seel ion 50 and notes thereon. IL;.USTRATIONS. 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 the indorser was discharged, although the drawer had no effects in the hands of the drawee: Gore Bank v. Craig, 7 U. C. C. P. 344 (1857). 2. It is only the drawer or indorser who has not been notified that can claim such discharge: Grant v Winstanley, 21 U. C. C. P. 257 (1871). NOTICE or DISHONOR. 259 3. A bank's notary received for protest a note made and In- ^ AQ dorsed 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 and 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-pay ment: Jones v. Wilson, 2 Rev. de Leg. 28 (1813). ■ '.I 6. The indorser of a bill of exchange is In all cases entitled to notice, even when the drawee has no effects in his hands: Griffin v. Philips, ? Rev. de Leg. 30 (1821). 6. An accommodation indorser is entitled to notice of dis- honor, and is discharged by the absence of it: Merchants' Bank V. Cunningham, Q. R. 1 Q. B. 33 (1892). 7. A person who is interested in the bill, to the knowledge of i the holder, but whose name Is not on It, is not entitled to notice I of dishonor: Anderson v. Archibald, 9 N. S. (3 G. & O.) 88 (1872); Swlnyard v. Bowles, 5 M. & S. 62 (1816); Hitchcock v. Humfrey, 5 M. & Gr 559 (1843); Walton v. Mascall, 13 M. & W. 72 (1844); Carter v. White, 25 Ch. D. 666 (1883). 8. A bill is dishonored and the holder gives notice to the Indorser but not to the drawer. If the Indorser 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 in- . dorser, but neither of them can sue the drawer: Rickford v. Ridge, 2 Camp. 537 (1810); MIers v. Brown, 11 M. & W. 372 (1843); Berrldge v. Fitzgerald, L. R. 4 Q. B. at p. 642 (1869). 9. 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, 3 Taunt. 130 (1810); Peacock v. Purscll, 14 C. B. N. S. 728 (1863); Hart V. McDotigall 25 N. S. 38 (1892). So also Is any person who Is a warrantor or surety for him: Anderton v. Beck, 16 East 248 (1812); Hopkins v. Ware, L. R. 4 Ex. 268 (1869). (a) Where a bill is dishonored by non-accept- Notice of ance, and notice of dishonor is not given, the rights acc"e,>tanc« of a holder in due course subsequeiit to the omis-"" ^""°' sion shall not be prejudiced by the omission : Imp. Act, s. 48(1). f . '1 ' ', 1 ' V' ''' ■ 1 iii:.|! k F!» "F" nRii PiR \ ^ ^r^V^ . v^ BILLS OF EXCHANGE. S 48. '^ person acquiring such a bill might becom » a holder in due courise if it bore no mark of dishonor, and he was not aware of the dishonor : section 29 ; Roscow v. Hard.v, 12 East, 434 (1810) ; Duiin v. O'Keefe, 5 M. & S. 282 (1816); Whitehead v. Walker, 9 M. & W. 506 (1842). Nutiee of 1^^) Where a bill is dishonored by iiou-accept- acc.'ptan,ie ance aiid due notice of dishonor is o:i\en, it shall RUtnctent. _ o ? not be necessary to give notice of a subsequent dishonor by non-payment, unless the bill shall in the iDeantime have been accepted. Imp. Act, 8. 48(2). ,-,..„ ■ •:4-. •■ ;• The subsequent acceptance referred to here may be either an acceptance b.v ^he drawee, or by an acceptor for lionor or referee in case of need: section 66. RuiHsasto 49. Notice ot" dishonor, in order to be valid and dishonor, effectual, must be given 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 th(» i)rotest and dishonor, ad- dressed to the party at his usual address or residence or at the place where the bill is dated unless he has given some other address on the bill. Th'n latter provision obviates many of the difficulties that arise, which have been urged as reasons for delay in giving notice or for excusing notice altogether, in England and the United States, wh(?re they have no law making the place where the bill is dated a sufficient address. See the notes and illustrations und';''^'''' of the holder, or on behalf of an indo^-ser who, at tlie time of giving it, is himself liable on the bill: (b) Notice of dishonor may be given by an agent By a^.-iu either in his own name, or in the name of any party entitled to give notice, whether that party is his principal or not : Imp. Act, s. 49 (1) (2) ; C. C. 2320. The holder or his agent may give notice to all the anteced* nt parties entitled to notice, or only to such of them as he may desire to hohl liable on the bill. In the latter case, an iudorser receiving notice may tliereupon give notice to any additional parties entitled to notice, whom he desires to hold liable: sub-sections 2 and 'A. The usual practice in Canada is for the bidder to give notice to all prior parties who have not waived notice on the bill. V ILLUSTRATIONS. 1. When a note payable at a bank is sent ttiere for colh'c- tion, the protest may properly be made and notice given by the ■ banli although It has no interest in the note: WMlson v. Tringle, ' 14 U. C. Q. H. 230 (1856); GIrvan v. Price, 8 N. B. (3 Allen) 409 (1857); Howard v. Godnrd, 9 N. B. (4 Allen) 462 (1860). Also by any person authorized to receive payment: Rowe v. Tipper, !:•> €. B. 249 (1853). 2. An Indorser is notified of dishonor by a person who form- erly held the bill, but had not at the time of dishonor any such relation as above indicated. He is released: Stewart v. Kennett, 2 Camp. 177 (1809); Chanoine v. Fowler, 3 Wem.. 173 (1829). 3. The drawee may act as agent for a party entitled to give notice: Roaher v. Kleran, 4 Camp. 87 (1814), as modified l)y 262 BILLS OF EXCHANGE. K 49 Harrison v. Ruscoe. 15 M. & W. at p. 235 (1846). If, however, the !_ drawee be not properly authorized the notice Is bad: Stanton V. Blossom, 14 Mass. 116 (1817). 4. An indorser who is discharged by notice coming one day late gives notice In time to the drawer. The latter is not liable: Turner v. Leech, 4 B. & Aid. 451 (1821). , ^ _ , 6. A notice by an attorney ia sufficient, although he does not | say for whom he is acting: Woodthorpe v. Lawes, 2 M. & W. i 109 (1836). 6. An indorser who holds a bill as agent for the indorsee may give notice in his own name: I^ysaght v. Bryant, 9 C. B. 46 / (1850). , .. - . , „..,;;...,; ;,.:-■■■-.!•- ■■ rv:'-^ 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. 615 (1855). 8. If the holder be dead, notice should be given by his per- • sonal representative: White v. 'Stoddard, 11 Gray, 268 (1858). Notice benfiits Hther parties. (c) Where the notice is given by or on behalf of the holder, it enures for the benefit of all subse- tjiient holders and all prior indorsers who havea 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 pro- vided, it enures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given : Imp. Act, s. 49 (3) (4). The holder of a bill is entitled to ayail himself of notice of dishonor given by any party to the bill : Chap- man V. Keane. 3 A. & E. 193 (1835), overruling Tindal v. Brown, 1 T. R. 167 (1786); Wilson v. Swabey, 1 Slark. 34 (1815); Stafford v. Yates, 18 Johnw. 327 (1820); Brails- ford V. Williams, 15 Maryland, 157 (1859); Palen v. Phurtleff, 9 Mete. 681 (1845). ,**;?» ^^.'iWJ^'^lTyT- Ill I N(3TICE OF I>ISHONOK. 263 • - i ■' (e) The notice may be given in writing or by § 49. personal communication, and may be given in any ' ~ terms which sufficiently identify the bill and inti-""tice and mate that the bill has been dishonored by non- acceptance or non-payment : Imp. Act, s. 49 (5). The tendency of modem 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 he is conditionally liable, has been dis honored. 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. C/halmets says, p. 158: "Since 1841 it does not appear that any written notice of dishonor has been held bad on the ground of insutti'-i»>ncy in form." Under the Act very informal notices will sullice, and the iiotice in the cas" referred to by (.Ihalmers, Furze t. Sharwood, 2 Q. B. 388 (1841), would no doubt now be hold to be good. In the lirst sdiedule to the Act. are given forms (G. and H.) of notice of noting and of protest, for non acceptance or non payment. '<^ i , ILLUSTRATIONS. 1. A notice thnt u foreign bill has been returned protested 1b a sufflcleut notice of non-acceptance, without sending a copy of the protest with the notice: O'Nell v. Perrln, Rob. & Jos. Dig. 4»6 (1839); Goodman v. Harvey, 4 A. & E. 870 (1836). 2. A notice to the Indorser must, tlther In express terms or by necessary Intendnunt, show that the note h ih been presented for payment and that payment has been refused: Bank of n. C. v. Street, Rob. & Jos. Dig 496 (1841). , 3. A notice to an Indoit^r, describing the bill and saying that It " Is due this day and unpu d, and as holder I look to you for payment," i» sufflclent: Bank of U. C. v. Street, 3 TJ. C. Q. B. 29 (1846); Bllnn v. Dixon, 5 U. C. Q. B. B80 (1818); Robaon v. I ...u a w^ 9P 264 lULLS OF EXCHx\NGE. R 49, Curlewis, 2 Q. B. 421 (1842). Also a verbal message to the drawer 1 to the same effect: Metcalfe v. Richardson, 11 C. B. 1011 (1852). Notice (if dishonor. ' 4. What is or is not a sufficient notice of the dishonor of a bill or note, when tne fac's are undiaputed, 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 tha' it was presented: Blain v. Oliphant, 9 U. C. Q. B. 473 (1852). 6. A notice describing the note, and adding, " you will in cone i,'T>oe of non-payment be held responrJble," is sufficient: Harri. - .y. 8 U. C. C. P. 407 (1858). 7. A n. e giving other particulars of the note but not men- tioning the amount is sufficient, when there is no evidence of the existence of anoth'ir note: Handyside v. C'ourlney, 1 L. C. J. 250 (1857). ^ , . . . ^ 8. A notice to a female Indorser, beginning " Sir," is suffi- cient if it reached her: Mitchell v. Browne, 9 1.. C. J. 168 (1865), overruling Seymour v. Wright, 3 L. C. R. 454 (1852). 9. Where the noUce of dishonor does not state that a foreign bill has been protesti^d, the indorser will not be li'ible: Delaney v. Hall, 3 N. S. (2 Thorn.) 401 (1858); see Rogers i. Stephens, 2 T. R. 713 (1788); Gale v. V/alsh, 5 T. R. 239 (17P3): Robins v. Gibson, 1 M. & S. 288 (1813). Contra, Ex parte Lowenthal, L. R. 9 Ch. 591 (1874). 10. Where it was alleged thr.t « notice of dirJicnor was cent by telegraph, but the contents of the telegram were not proved, and no evidence given of its having been received, the indorser was held to be discharged: McLean v. Garnier, 15 N. S. (3 R. & G.) 276 (1882). 11. The issue and service of a writ of summons is not a suffi- cient notice of dishonor to bind an indorser, although the writ was served on the same day that the note was dishonored: Com- mercial Bank v. Allan, 10 Man. 330 (1S94). ' 12. 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). 13. If there bo more than one bill to which the notice may refer, the onus is on the defendant to prove this fact: Shelton v. BralthwHlte, 7 M. & W. 43G (1841); Gates v. Beocher, GO N. Y. (Sickles) at p. 527 (1875). immiimmtm NOTICE OF DISHONOR. 265 14. A notice to an Indorser describing the bill and slating R ^Q that it lies at a certain place dishono.-ed, is sufflcient: King v. . 1. BJckley, 2 Q. B. 419 (1842). 15. The holder's clerk wrote to an indorser that J. C.'s ac- ceptance due that day was unpaid, and requesting his immediate attention to it. Held, a sufficient notice of dishonor: Bailey v. Porter, 14 M. & W. 44 (1845). To the same effect, Armstrong v. Christian!. 5 C. B. 687 (1848); Everard v. Watson, 1 E. & B. 801 (1853); Paul v. Joel, 3 H. & N. 455; 4 H. & N. 355 (1859); Bain v. Gregory, 14 L. T. N. S. 601 (1866). The spirit of the Act is in favor of holdinjjj any no- tice sufficient which would reasonably inform the party that the bill on which his name appears has been dis honored. (/) 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 m tv be supplemented and validated by verbal communication. 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). ILLUSTRATIONS. 1. A notice to a firm about a note alleged to be indorsed by them, bold not to be sufflcient (o bind a partner who was the real Indorser: Bank of Montreal v. G rover, 3 U. C. Q. B. 27 2. The following errors have been held not to vitiate the notice, the correct particulars being sufflcient to identify the bill or note: — a mistake in the due date of the bill or in its date: niinn V. Dixon. 5 U. C. Q. B. 580 (1848); Thorn v. Sandford, 6 U. C. C. P. 462 (1857); Low v. Owen, 12 ibid. 101 (1862); Cassidy V. Mansfield, 24 ibid. 383 (1874); Robinson v. Taylor, 4 N. U. (2 Kerr) 198 (1843); Mills v. Bank of U. S., 11 Wheat. (U. S.) 431 (1826); Smith v. Whiting, 12 Mass. 6 (1815);- giving a wrong amount: Thompson v. Cotterell. 11 U. C. Q. B, 186 (1854); Bank Return iif bill siiHi- cient. Informal notice. N 266 BILLS OF EXCHANGE. ^ 49. °' Alexandria v. Swann, 9 Pet. (U. 3.) 33 (1835);— giving the name !_ of a party incorrectly: Girvan v. Price, 8 N. B. (3 Allen) 409 (1857); Harpham v. Child, 1 F. & F. 652 (1859); Dennistoun v. . Stewart, 17 How. (U. S.) 606 (1854);- transposing the names of the drawer and acceptor: Mellersh v. Rippen, 7 Ex. 578 (1852); — calling a bill a note, or vice versa: Stockman v. Parr, 11 M. & W. 809 (1843) ;— naming the wrong bank or place where the bill was payable or was lying: Bromage v. Vaughan, 9 C B. 608 (1846); Rowlands v. Springett, 14 M. & W. 7 (1845). 3. A notice by holder to Indorser in these terms: — "Messrs.. H. are surprised to hear that Mrs. G.'s bill was returned to the holder unpaid," followed by a visit from the indorser 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 Bing. N. C. 411 (1838). 4. For other instances of Imperfect written notices accom- ■ ' panied or followed by verbal communications, see East v. Smith, V, . 4 D. & L. 744 (1847); Chard v. Fox, 14 Q. B. 200 (1849); Jenninga v. Roberts, 4 E. & B. 615 (1855); Viale v. Michael, 30 L. T. N. S. 463 (1874). 5. An unsigned notice in writing from the right person is ;) f sufficient: Maxwell v. Brain, 10 L. T. N. S. 301 (1864). N i'ase of Cosgrave v. Boyle, noted below. If the death of ■ ^ ._^ ii 272 §49. Notice through the |KiHt. BILLS OF EXCHANGE. tliH party i» known to the party giving notice, tliin the " notice should be given to tlie personal representative of the deceatM^d, if he can be found: ehiuse (A') ante. Heretofore in (Canada the linage has been for tlie holder at the time of dishonor to send notice to all par- ties entitled to it through the post, addressed to them at the place at which the bill or note is dated. This is very frequently not the real address of the indorsers, especi- ally when maker 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 iudorser who in such ji case has neg- lected to give his real address, may find that his re- course against antecedent parties is entirely gone. By sub-secti(m 5 when such a notice is addressed anr' posted, the sender is deemed to have given due noti* and by the present sub-section notice is " suflBcient.^ given " when given in this manner. It is not likely that in such a case where the notice does not reach an in- dorser that he will be held to have " received due no tice " within the meaning of subsection .'{ ante, so as to make the delay run as to notice to antecedent parties; but the miscarriage being owing to his own fault and neglect he might be held responsible under certain cir- cumstances. At all events, in such a case, he should lose no time in giving notice to antecedent parties, it the holder has not notified them. In England the holder must use due diligence to ascertain the correct address of the drawer and in- dorsers. It has been laid down that while there might not be any reason for addressing a notice of dishonor to an indorser at the place where the bill was dated, yet it was proper to leave it to a jury whether a notice to the drawer might toot reasonably be addressed there: Burmester v. Barron, 17 Q. B. 828 (1SJ)2); Clarke v. Sharpe, 3 M. & W. 166 (1838); Mann v. Moor», Ry. & M. 249 (1825). NOTICE OF DISHONOR. 273 In the UnittMl States it has generally b.on held that ^ 49. the place of date of a bill is not even prima fao'.e evi- deuce of the address of an indor8«'r, aud if .{ appear that it is not the real address of the drawer the holder must show that he had made due en<|uir\ : nariiewell v. Mit- chell, 3 Conn. 101 (1819) ; Lowery v. Scott, 24 Wend. (N.V.) .M58 (1840); Pierce v. Struthers, 27 Penn. St. 249 (1^56). Where a bill is sent by a Canadian holder to the United States for eollection and is dishonored, the custom is to return the bill to the owner with the protest aud 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 posted notice addressed to the drawee at the place where the bill was dated was not valid in the absence of pr< , that a notice sent to that ottice would reach him: lialloch v. Binuey, 5 N. B. (3 Kerr) 440 11.M7). * ludorsers 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 with- in the legal delay. ILLUSTRATIONS. 1. A notice deposited in the Toronto post office for an In- dorser residing there is as good as if left at his residence: Com- mercial Bank v. Eccles, 4 U. C. Q. B. 336 (1847). - 2. A notice duly posted and addressed to an indorser In "York Township," in which he resided, was h:»ld sufflclent, there being no evidence that it should have been otherwise addressed: Bank of U. C. v. Bloor, 5 U. C. Q. B. 619 (1849). , 3. An indorser's agent gave a wrong address which was written by plaintiff's agent under his signature. A notice sent to the address given held sufficient: Vaughan v. Ross, 8 U. C. Q B. 506 (1852). 4. Notice mailed between eight and nine in the evening of the day after protest aeld sufficient, though the post-mark was of the following day: Wilson v. Pringle, 14 U. C. Q. B. 230 (1856). m'l.b.k.a.— 18 I .i? i^ ■ - 274 IIILLH OF EXCHANGE. !-! S 4.Q ^- A^ '^o*^ ^^"^ prf'sented for payment at G., where the in- J L dorser lived, and notice was mailed the following day at M., five Notice bv "''^^^ distant, but not received at G. until the fourth day after Ifflrt., dishonor. Held, sufficient: Taylor v. Grier, 17 U. C. Q. B. 222 (1858). 6. When a notary mailed a notice to a wrong address which reached the indorser about a week later, and there was some evidence of t'.ie latter having applied to plaintiff for further time, the court refused to disturb a verdict for plaintiff: Leith v. O'Neill, 19 M. C. Q. B. 233 (1860). 7. An indorser died shortly before the maturity of the note, The bank which held it not being aware of his death sent the notlc 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. Hold, reversing 5 Ont. A. R. 458, that the notice was sufficient, and enured to the benefit of plaintiffs: Cosgrave v. Boyle, 6 S. C. Can. 165 (1881). 8. A notary in Montreal protested a note payable there, which ""CB dated at Belleville. Being unable to deciper an indorsement, he put a fac simile of it on an envelope addressing it to Belle- ville. The holder knew the indorser's name but did net tell the notary. The indorser sworvj that he did not receive the notice. Held, that he was discharged: Baillie v. Dickson, 7 Ont. A. R. 759 (1882). 9. The address under the indorser's name need not be written by himself, it may be written by another with his knowledg*) and consent. Sending a notice to such addreps is sufflcltnt, even if the holder has rea^ m to know that it is not his residence or place of busiiess: Tiay v. Burke, 16 Ont. A R. 463 (1889). 10. A note dated at Moi.trenl payable at Albany, N.Y , was protested there, and a notice addressed to the indorser at Mont- real. Held, sufflclrnt as to form, but invalid as it did not appear that the postage was prepaid; Howard v. Sabourin, 6 L. C. H. 45 (1854). • 11. A notice which thi' notary swore was mailed on the evening of the last day for mailing, was held sufficient although - it bore the stamp of the following day: Doutre v. I.«a Manque Jacques Cartier, De Bollefeuille C, C. Art. 2319 (187«<). See also StocKen V. Collin. 7 M. & W. 515 (1841); New Havei Co. Bark v. : ^- Mitchell, 15 Conn. 206 (1842). NOTICE OF DISHONOR. 275 12. Notice of protest sent to an indorser to a wrong address ft AQ given by tlie maker when he got the note discounted, is not sulfl- t !! cient to bind the indorser: Merchants' Bank v. Cunningham, Q. R. 1 Q. B. 33 (1892). ; . .: ;, 13. " Under his signature " in tliis section doss not mean " below his signature," but written so that the signature covers >^ it. Where a wrong address of the indorser was written in i)encii under his name, and no proof made as to who wrote it, a notice of protest sent to such address, not being the place where the note was dated, is insufficient: Banque Jacques Cartier v. Gag- non, Q. R. 5 S, C. 499 (1894). 14. Under the Dominion Act of 1874, a notice posted to the address of tlie indorser the day following dishonor is sufficient, although he lives in the same town, and there is no local de- livery: Merchants' Bank v. McNutt, 11 S. C. Can. 126 (1883). 15. A notice 'to an indorser posted at St.. John, addressed " Mr. D. Duff, near Blake's Mills, Nashwaak," is not sufficient without proof that such a letter would probably reach him: Hobinson v. Duff, 4 N. B. (2 Kerr) 206 (1S43). 16. The holder got the address of an indorser from the payee of the note, with whom he did business, and addressed a notice to him there. It was afterwards learned that he had .ately re- moved. Held, sufficient: Bank of New Brunswick v. Milllcan, 9 N. B. (4 Allen) 254 (1859). 17. 't has been held in England that to address a Jetter to a • person in a large town without any addition to the name of the person or of the town may be invalid. A letter addressed simply " W. Haynes, Bristol," held, not sufficient: Walter v. Haynes, . R. & M. 149 (1824). 18. A notice addressed "Mrs. Susan Collins. Boston," held sufficient, there being no proof there v lo Hn> other or the rame. " Mrs. Collins, Boston," vvould prol>ably have been ueld insuffi- cient: True V. Coiliiis. 3 Allen, 440 (1862). 19. A drawer or indorser will be presumed not to have <;hanged his address duiing the currency of the bill: Bank of Utlca V. Phillips, 3 Wend. 408 (1829). 5. Where a notice of dishonor isdnly addressed MiBcar- and posted, as above provided, the sender is deemed p'«*t.' '" to have given due notice of dishonor, not with- '"""^ 276 BILLS OF EXCHAN(iE. Ui J 49. standing any miscarriage by the post office : Imp. Act, s. 49 (15) ; R. S. C. c. 123, s. 23. If the address on the letter is that on the bill no question 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 be certain that he is correct. In such a case it would be prudent to send a notice to the address oq the bill as well. If the receipt of the notice is denied, plaintiff must prove that it was j.;iveu: Macdouffall v. Wordsworth, 8 U. C. C. P. 400 (1858); Merchants' Bank v. Macdou^all,. 30 U. C. C. P. 230 (1879); Hawkes v. Salter, 4 Bing. 715 (1828). A protest is prima facie evidence of the service of notice of dishonor: section 93, s-s. 5 By B. S. C. c. 35, s. 43, as soon as any letter is de- posited in the post office it ceases to be the property of the sender and becomes the projjerty 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 IJ. C. v. Smith, 3 U. C. Q. B. 358 (1840); Taylor v. Grier, 17 U. C. Q. B. 222 (1858); Shanmm v. HastiuKi^ M. Ins. Co. 2 Ont. A. B. 81 (1877); Delaporte v. Madden. 17 L. C. J. at p. 32 (1872) ; Barker v. (Jordon. 7 East, 385 (1806) ; Woodcock V. Houldsworth, 10 M. & W. 124 (1840); Dun- lop V. Eliggins. 1 H. L. Cas. 380 (1848)., Kxonses 50. r)play in giving notice of dishonor is ex- notico and cased where the delay is caused by circumstances delay. beyond the control of tlie party giving notice, and not imputable to his default, misconduct or negli- --..,-_..„ gence : when the cause of delay ceases to operate the notice must be given with reasonable diligence : Imp. Act, s. 50(1). / t.i NOJ'ICE OF DISHONOR. 277 Tlie present sub section deals with the circumstances ^ ^Q, which excuse dehiy 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 46 regarding the excuses for d<'lay in the pre- sentment for payment ; and in section 51, s-s, 9, I'egard- ing excuses for delay in noting or protesting. In England and the Ignited States, wliere no provi sion exists similar to thai in section 40. s-s. 4, recogniz inj? 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 excuse delay, which would not be sufficient in Canada. Notice does not require to be given until' after pregi'ntment and' dis honor. Where delay in presentment is excused, a notice mailed the following day is regular. The only circum- stances likely to arise ini (Canada to cause lexcusi.ble delay in giving notice, would be the death, sudden ill- ness, or some accident »o th(? person making out or post- ing the notices, or some at cident to the messenger charged with taking Wwrn to the pust office, or the less of the letters oi e way without n«'gligence. The following clrcumBt-mcep hnve boen held in R' gl.md and the United States siiffloient to case delay; — 1. A state of war: see p. 251: file 2 An epidemic or other calamity, making < c nuiicatirn imprapticable Windham Hank v, Nortor "J Tonn. 2ia (1852); 'I'unno V. Lague, 2 Johns. (N.Y.) (1800). .1. Dealh or sudden illness of the holder or his ag^nt who has the bill; Rothschild v. Currie, 1 Q. B. at p. 4 '1841); White V. Stoddard, tl Gray (Mass.) 258 (1858). 4. Delay caused by the indorser having given a wrong or Illegible address: Hewitt v Thompson, I M & Rob. 54.1 (1836); Siggers V. Urowne, 1 M. & Rob. 620 (18a(i); Berridge v. Fitzgerald. L. R. 4 Q. B. 639 (1869). 6. An indorser could not be found when a bill was dis- honored. Hubsequently his address became known, nnd some f'i • ff^ifiET.* ■'1 278 §50. Notice diHuenfied witn. If iinprac- ticalik". BILLS OF EXCHANGE. time after a writ was served on him without any previous notice. Held, that he was released on account of not being notified when his address became known: Studdy v. Beesty. 60 L T. N. fl. 647 (1889); W. N. 1889, p. 14. See Baldwin v. Richardson, 1 B, & C. 245 (1823). 6. A bill drawn in St. John, N.B., was payable in Tiondon, Eng., on Saturday, October 16th, and was dishonored. Plaintiffs at Wolvevhanipton wpre the holders. .\ mail left Liverpool on Octobfr 19th. Plaintiffs sent notice to the drawer by the next mall, which left on November 4th. Held, that the delay was excused: Tarratt v. Wilmot, 6 N. B. (1 Allen) 353 (1849) The delay was held inexcusable in th.j following case: A bill was protested in Dublin, Ireland, on November 3rd. Malls for St. John, N.R., where the drawer and Indorsers lived, left November 4th and 19th. Notices were .sent only by the fol- lowing mail, which arrived December 22nd. Held, that the drawer and indorsers were discharged: Bank of New Bruns- wick v. Knowles, 4 N. B. (2 Kerr) 219 (1843). 2. Notice of dishonor is dispensoci with — (a) When, after the exercise of reasonable dili- gence, iioticje as required by this Act cannot be given to or does not reach the drawer or indorser sought to be charged : Imp. Act, s. 50, (2) {a). - If a uotii'e is sent otliorwise than by post, and doe-« not reach tlie party, from some cause for which the seuder is not responsible, and the latter is not aware of the fiitt that thf notice was not received, it will be dis- pensed with. If the sender becomes aware of tlu; fact, or if the notice s(^nt by |>o8t is to a wronf,' address, he should send a proper notice at once: Bteinhoff v. Mer- chants' l?ank, 4(5 IJ. 0. Q. U. 25 (1881). , It has been held in En^liind that ignoi'anoi' of the place of residence of a drawer or indor8(!r dispenses with notice if ). The waiver may be on the bill itself: section 16 (&). See ante p. 94. Where an aci v -^ "IP^^ II ^1 |: 282 HILI.S OF EXOHANfJE, . § 50, Notice need not be given to the indorser in these eases, because in (1) he has no reasonable ground for be- lieving that the bill will be honored; in (-) he is aware it is not paid: and (3) he is the person wlio ought to pa J it. , • An indorser is entith'd to notice of dishonor whether the drawee has funds in his hands or not: Grif- fin V. IMiillips, 2 Key. de Leg. :{(> (1821): Knapp v. Hanlc of Montreal, 1 L. C. K. 252 (1850). Notice to Othekh th.\n Diiawer and Indoksers. The Act provides only for notice to the drawer and indorsers of a bill. The acceptor of a bill and maker of ,. a note are liable without notice: section 32, s-s. 3; sec- J tlon 88, s-8. 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 con- sideration for which the bill is given, is not alfected by the Act, but will remain subject to the laws in force in the several provinces. ■ ;- A person who lias given a guarantee for the pay- } nient of a bill is liable without notice of dislmnor: Pal- mer V. Baker, 22 U. C. C. P. 59 (1871); Warrington v. Furbor, 8 East, 242 (1807); Murray v. King, 5 B. & Aid. H»5 (1821); \'an ^^'art v. Woolley, 3 B. & ('. 139 (1824); Wal(tor of a) bill or the malier of a note is not entitled (o notice of if the goods are for the drawer of the bill he is entitled to notice: Philips v. Astling, 2 Taunt. 200 (1809). gee also Swinyard v. Bowes, 5 M. & 8. 02 (1810); Ga midge v. Allenby, B. & C. 373 (1827); }'R{)TEST. 283 Smith V. Mercer, L. R. 3 Ex. 51 (1807); Carter v. White, § ^Q 2;i Ch. D. am (1883). As to those who have placed their names on hilln 1 in Quebec "pour aval " or as warrantors elsewhere, see the notes on section 56. 51. Where an inland bill has been dishonored it may, if the holder thinks fit, be noted and protested for non-ac{3eptance or non-payment, as the case may be ; but, subject to the provisions of this Act with respect to notice of dishonor, it shall not, except in the Province of Qin ^ec, be necessary to note or protest a^iy such bill in. order to preserve the recourse against the drawer or indorser ; but 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 than the acceptor are discharged, subject, never- theless, to the exceptions in this section herein- after contained: Imp. Act, s. 51 (1); C. C. 2298, Xotint? or protetit (if iiilaud hilU Section 51 of the Imperial Act reads as follows:— '' Where an inland bill has been dishonored it may, if the holder think fit, be noted for nou acceptance or non payment, as the case may be; but it shall not be neces- sary to note or protest any such bill in ordf.T to preserve the recourse against the drawer or indorser. It will be seen that the Canadian Act, for the Provinces other than Quebec, is substantially the same as the Imperial Act. The words "subject to the provisions of this Act with respect to notice of dishonor " were added in the Senate, to make it clear that while inland bills need not be noted or protested, there was no intention to relieve Seo. 5 1 of Imperial Act. wr^ mm 284 §51. All billM must lit) 1 in (tested in CiueU'c. Olttionivl elBewhere. (Jonflict of laws. BILLS OK EXCHANHK. from the duly of jjfiving notice of dishonor, as laid down in sections 48 and 40, when the drawer or indoi'si'i.s were to be held liable. « By the latter part of the clause, Quebec retains its old law as unbodied in arlicles 229S and 2U9 of the Civil Code, which required a notarial protest with notice to the drawer and indorsers of an inland as well as a forei}i;n bill. In the oth<'r provinces the holder of an inlanr protest it. or merely send noticea of dishonor in accordance with section 49. As a protest makes prima facie proof not only of presentation and dishonor, but nlso of the service of the notices, section 93, 8-8. 5, the practice of protesting in these other pro vinces has, as a rule, been adopted. If a bill sent for acceptance or collection is not to be i)rotested in case of dishonor, special instructions should be given by attach- ing a memorandum of '' no protest," or otherwise. The protesting of inland bills for non acceptance or for better security, elsewhere than in Quebe<\ is only compiilHory as a preliminary to an acceptance supra protest for honor: section G4; and a protest for non payment, only as a preliminary to i)resentment for pay- ment to the acceptor for honor, or ref.'ree iu case of need: section (5(5. In case of conflict, the laws governing presentment for acceptance or payment, and the necessity for or suffi- ciency of a protest, are those of the place where the act is done or the bill is dishonored: section 71, s-s. 2(c). Tliis principle is recognized in the second darse of the above subsection, which lays down the rule for the provinces other than Quebec; but, according to the last clause, every inland bill drawn upon any pi'rson in Que- bec, or accepted at any place in that province, must be protested in order to hold the d"awer and indorsers. even if it be drawn and made T)aya')le in another provin<'e. According to the recognized rules of interpretation, this last clause being e" 'optional and ex])licit would govern, I'UOTEsr. §51. Ndting lirutest. silthoiij^Ii It \s certain tliat I'arliainent did not conteni- plate any sucli departure; fioni tlic jjft'nerul rule. The form f )r the noting of a bill for non acceptance is given as Form A in tlie first achedul lo the Act. Tlie protest of a bill u«'ed not be made out at th ' time; it is sutticicni for tlie notary to aiake the necessary noting on the bill, and to extend it later, as of the day of the noting, section 92. ' When a bill is not paid ou the day it falls due, but is expected to be on the following day, it is sometimes simply noted on the day of maturity. If it is not paid the next day as expected, the protest is extended and th(> notices of disiionor sent. The present section applies to promissory notes as well as to bills and cheques, with the moditications men- tioned in section 88. 2. Where a foreign bill, appearing on the face protest .)f of it to be such, has been dishonored l)y non-accept- llni'^^ ance, it must be duly protested for non-acceptance, '> and where such a bill, wliich has not been previously dishonored by non-acceptance, is dishonored by non-payment, it must be duly protested for non- payment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does no/." appear on the face of it to be a foreign bill, protest thereof in case of dishonor, except as in this section provided, is unnecessary. Imp. Act, s. 51 (2), The words " except as in this section provided " are not in the Imperial Act, but were inserted to meet the -•-,■■ exceptional provisions for the Province of Quebec in the preceding subsection. As to what is a foreign bill, see — - section 4. Foreign notes as well as bills should be pro- tested in order to bind the indorsers: section 88, s-s. 4. ^li 286 HILLS OF EXCHANGE. § Q"],. Chalnierw says (p. 2) Hint tliis 8iib-8«T whieb agrees with section 4, s-s. 2. The first cl.iiiHe is part of the law merchant: Rojjers v. Stephens, 2 T. K. 7ia (17.S8); dale V. Walsh, 5 T. K. 239 (1793); Orr v. Ma>,Mnni8, 7 East. 359 (1806). t Subsc- 8, A bill which has been protested for iion- tent '"^"acceptance, or a bill of which protest for non- acceptance has been waived, may be subsequently protested for non-payment. Iiup. Act, s. 51 (3). The above provision rej^nniing a waiver of protest for non-acceptance is not in the Imperial Act. The hoMer may npon dishonor by non-acceptance either pro- ceed at once against the di'awer and indorsers: section 43, s-s. 2; or he may hold the bill until its maturity and present it for payment. Time for noting. 4. Subject to the provisions of this Act, when a bill is protested the protest must be made or noted on the day of its dishonor. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting ; Imp. Act, s. 51 (4). The Imperial Act reads, " \A'heu a bill is noted or protested it must be noted on the day of its dishonor." The circnnislances which excuse delay in protesting or noting, or dispense with protest, are to be found in sub- section fi [n), and subsection 9. See section 92 for simi- lar provisions. If the bill has been duly noted, the protest may be completed even during the trial. Orr v. Maginnis, 7 East, at p. 361 (1806). The rule requiring the noting or protest to be on the day of the dishonor is new. PROTEST. •287 ; 5. Where the acceptor of a bill suspends pay- § 51. nient before it matures, the holder may cause the iTacvptor bill to be protested for better security against the j*," vrM"nt. drawer and indorsers : Imp. Act, s. 51 (5) ; 54-55 V. c. 17, s. 7 (Can.). The Imperial Act reads, " Wliere the acceptor of u bill becomoH bankrupt or insolvent, or suspends pay- ment, etc." In the Act of 1890, the words " or insol- vent " were omitted, but " becomes bankrupt or " re- mained. These were struck out by the amending Act of 1891, as there is no general bankruot law for Canada. Chalmers says (p. 173) : — " Under some of the Con tinental codes, when the acceptor fails during the cur rency of a bill, security can be demanded from th" drawer and indorsers. English law provides no such remedy, and the only effect of such a protest in England is, that the bill may be accepted for honor." In Quebec the Civil Code provides. Art. 1092. that " the debtor cannot claim the benefit of the term when he has become bankrupt or Insolvent," and bankruptcy is defined as " the condition of a trader who has discon- tinued his payments " : Art. 17 (23). It has been held, that on the bankruptcy of the maker, a promissory note which had tw'o years to run became immediately exigi- ble: Lovell V. Meikle, 2 L. C. J. G9 (1853). See p. 257 ante. Hiilc oji thf ("uiiti iifnt. Kiile in (Quebec . In France, when the acceptor fails, the bill may at once be treated as dishonored and protested for non- payment: Code de Com. Art. 163; Nouguicr, §A277. 6. A bill must be protested at the place where where bin it is dishonored, or at some other place in Canada ".rotH^tod. situate within five miles of the place of present- ment and dishonor of such bill : Imp. Act. s. 51 (6). ■I m ^pv^mmVP -'5 f '. 288 BILLS OF EXCHANGE. § 51. '^^'^ Imp.H'ial Act simply reads, " A bill must b ^ pi'ot(?sted at the place where it is dishonored.'' The other words were added in the Hous.- of Commons on the suggestion of the Minister of Justice, in order, as he said, to "facilitate the making of protests, and i>revint hardship likel\ to occUi in country districts.'' H"e Mit- chell V. B.iring, 4 0. & P. 35 (1829), and section 93. li presptit- efl thrnuj
  • Iies to the maker of a f»romissory note: section S«). s-s. 1. 8ee Wilson v. Brown, Ont. A. K. 87 (1881); Shuter v. Paxton, 5 L. (3. J. 55 (I860); Archer V. Lortie, 3 Q. L. R. 15{) (1877); Mineault v. Lajoie, R. L. :i82 (1877); Rowe v. Young, 2 Blifjh H. L. at pp. ir)7. 4«]8 ( 1820); Maltby v. Murrells, 5 H. & N. at p. 82:{ (I860), Also uot«'s and illustrations under section 80, s s. 1. The reason given by Chalmers for the rule in this section is lliat "at common law the debtor is "onnd 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 Quebec is. that if no place is indicated iw the conlraci, payment should be made at the domicile of the debtor: C. C Art. 1152. By Art. 1061) of the Civil Code it is pr<»vided 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 bills and notes ni>t payable on de- mand, and would provide for interest from their ma- tuiity; so that it b. < ue made. PROTEST. 293 A prosentmpnt and notice of dishonor unless dis )^ gg. pensed with are neeessnry to rendei' the drawer and - iudorsers liable; sections 45, 4(5, 48 and 49. 2, When a place of payment is specified in the^"!"' bill or acceptance, the acceptor, in the absence of •'•i p''^'^''. 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 : I Section 52 (2) of the Imperial Act reads: "When by the terms of a qualified acceptance presentment for payment is reijuired, tlie acceptor, in the absence of an express stipulation to that effect, is not disrliarj?ed by the omission to pn^sent the bill for payment (ui the day that it matures.'' The change in the first part of the subsection was Reason for made in the Senate to correspond with the change made '^'^*"'*^- in section 1!> as to an accejitauce at a particular speci- fied place; and in the latter part to mc^t the case of an acceptor [iroviding funds at the proper place and Uif holder suing witlioul applying tl)ci'c St'ciion ^^<> has a similar provision as to promissory notes. See Mclver v. McFarlane. Taylor V. C. 118 (1824); Macaulay v. McP^irlane, liob. & Jos. Dig. 49a {184(»); Rice V. Kowker. 8 L. V. 11. .'{05 (185:5); Mount v. Ihuin. 4 L. V. U. :U8 (1854); O'Mrieu v. Stevenson, 15 L. ('. H. 2(15 (18(>5); (Jrepeau v. Moore, 8 (l L. Jl. 1!)7 (1881'); Chandler v. Be<;kwith, 2 N. B. (^Bertou) 42:{ (1838); Ratchford v. (Srifflth, 4 N. B. (2 Kerr) 112 (1843); Biggs V. Wood, 2 Man. 272 (1885). It would seem as if the words "express stipula- tion " in the clause as it now stands, would mean an '^"* ^^ itself, does not operate as an cinvvvef. assigiiinfiiit of funds in the hands of the drawee availiihle for the payment tliereof, and the drawee of a bill v.ho does not accept as required by this Act is not liable, on the instrument. Imp. Act, s. 53 (1). Seetion 53 of the Imperial Act, from which the fore- going is taken, provides that it shall not apply to Scot- land, and the following sub-section is added: — ** ('J) In Sfotlaiul, where the drawee of a bill has in his hands funds available for tliei payment tlu^reof, the bill oper- ates 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 similar to that of Scotland: Nouguier. §§ :W2, 431. .\n oi'der to pay Aii of a itarticular fund is not a I 1<'!1 of excJiange; section 3, s s. 3. It was formerly con- ' signiiiont, sidcred in England that a cheque was in the nature of an tMiuitable assignment of funds in the hands of the banker: Keene v. lieard, 8 C. B. N. 8. at p. 381 (1860). • Hut it was well settled before the .Vet of 1882, tl.at a ' elieciuc was not an eijnitable assignment, but a bill of exchange drawn upon a banker, that there was no priv- ity betweeiu' the banker and th<' holder of the cheque, ana the latt(^r had no action, even if there were funds: noi)kinson \, Forster. L. R. 19 Eq. 74 (1874); Schroedc^r v. Central Hank, 34 L. T. N. S. 735 (187(i). Ft was also held in Ontario that an unaccepted cheque was not an equitable assignment, and the holder had no action against the bank: Caldwell v. Merchants' Hank, 26 U. C. O. P. 21)4 (1876). In Quebe<-, however, it was held Cliuqilc and e(|ui v'-i?ii .€•;, "&;«': LIAIULITV OF DUAWliE. 297 that a cheque was a transfer of so much of the funds of !^ gQ the drawer in the bank and pave the holder a ri},'ht of action: Ma'rler v. Molsons Bank, 23 L. C. J. 2\Ki (1^7!>). In several of the United States the holder is allowed lo " sue on an unaccepted cheque; — in Louisiana: Gordon v. Mulcher, 34 La. Ann. 008 (1882);— in Illinois: I nion Nat. Bank v. Oceana Co. Bank, 80 111. 212 (1875); Springfield Ins. Co, V. Peck, 102 111. 265 (1882);— in Iowa: Roberts V. Au.stin, 20 Iowa, 316 (1868);— in Missouri: Senter v. Continental Bank, 7 Mo. App, 532 (1879);— and in Ken- tucky: Lester v. Given, 8 Bush (Ky.), 358 (1871). The Knjjlish and Ontario rule will now prevail throughout Canada, as section 72 of the Act provides that " a cheque is a bill of exchanfje drawn on a bank." and the present section app ies to cheques as well as to other bills: Ke Commercial Bank, 10 Man. 171 (1894). The rule laid down in the section has lonj^ been re- Hill imt cof!;nized in f^njjland as to ordinary bills: Griflfin v. ',n',.^,t' ^'" Weatherby, L. R. 3 i}. B. 753 (1868) ; Shand v. Du Buij^ son, L. R. 18 Eq. 283 (1874); even in case of a bill ac- i'epted payable at a banker's: Yates v. Bell, 3B. & Aid. 643 (1820); Moore v. Bushell, 27 L. .7. Ex. 3 (1857); Hill V. Royds, L. R. 8 Eq. 290 (1869). Also in Ontario: Lamb V. Sutherland, 37 U. (\ Q. B. 113 (lS7r.); and in the United 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, 378 (1879^. A letter of credit is similar in this respect to a bill Lttt.>rof ■of exchange: Morgan v. Lariviere, L. 11. 7 H. L. 4:^2 "*"'"^' (1875); British Linen Co. v. Caledonia Ins. Co., 4 Macq. H. L. 109 n. (1861); Union Bank v. Cole, 47 L. J. C. P. 109 (1878). Where, however, an o])('ii letter of credit contained a pi'ovision that parties negotiating bills under it were recpiested 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. R. 2 Ch. 391 (1867). See also Ex parte t i ■ 298 HILLS OF KXCHAXGF. m i i'=>. '■ .: ^ Liability of ac- Cfpt<,>r. ^ 53. Stophens, L. K. a Ch. THG (1868); Citizei.s' Bank v. New Orleans Hank, L. K. G H. L. 352 (1873). It will be observed that the section says that a bill does not "of itself" oix-rate as an assi}?nnient of funds in the hands of the drawee. This, however, mav be etfecled by .'in agreement outside of th(» bill: Robey v. Oilier, L. R. 7 Ch. G95 (1872); Ranken v. Alfaro, L. R. 5 Ch. D. 78G (1877). 54. The acceptor of a bill, by accepting it — (a) Engages that he will pay it according to the tenor of his acceptance ; Imp. Act, s. 54 fl). See section 17 as to ^ form of a valid acceptance. An acceptance may bi either general or qualilied section 19. In the former case the undertaking of the acceptor is thiit he will pay th(^ bill according to its- terms; in the latter that he will pay it as modified by the terms of his (inalititHl acceptance. By his accept- ance he becomes the primary debtor, the drawer and indorsers being only secondarily or conditionally liable: Rowe V. Yoinig, 2 Rligh H. L. 4G7 (1S20); Philimt v. Briant, 4 Bing. 720 (182S); Jones v. Broadhurst, 9 C. B. 15^1 (1850); Smith v. Vertue, 9 C. B. N. S. 214 (1860)^ Jev V. National Bank, 100 U. S. (10 Otto) 712 (1819); C. C. Art. 2294. « The position of the drawer and indorsers after dis- honor of a liill is aniilogons in several respects to that of a surety: Cook v. Lister, 13 C. B. N. S. 543 (18C3); Rouqnette v. Overmann, L. R. 10 Q. B. 53(5 (1875); Duncan V. North & S. W. Bank, G App. Cas. 19 (1880). See Harmer v. Steele, 4 Ex. Ch. 13 (1819), on the rela- tion of several joint acceptors who are not partners. Drawees who have promised to accept, or who have knowingly accepted the benefit of funds obtained on a representation that they would accept, have been held LIABILITY OF ACCKPTOU. 299 ^ liable: Torrance v. T^.ink of Hritish Nortli Aniericii. 15 i^ g^^ L. (\ J. 1(i9; 17 L. C. .). 1H~,; L. K. 5 P. C. 2ir, (187:5); - Molsoiis IJiink V. Seymour, 21 L. C. ,1. 82; in appeal, I)uiiHpanj?li V. MolHons Bank, 23 L. C. J. 57 (1878); IJiiuk of Montreal v. Thomas, 16 O. R. 503 (1888). See section 2(5 as to an acceptor sij^uin^ as an agent or in a representative character. (b) la precluded from denying to a holder in K,r.,,,,«,i due course — • . c.^ptor. (1 ) The existence of tlie drawer, the oenuinenoss a» to fdrcfpd of his signature, and his capacity and authority to Ki^uature. draw the bill ; Imp. Act, s. 54 (2) (a). Section 24 provides that. '' subject to tlio provisiouH of the Act," a forpd or unauthorized Hignature i.s wholly inoperative. The present is one of th<' provision.^ Avhich modify that seel ion. This has lonp; been recog- nized as law: Jones v. (loudic'. 2 Kcv. de Le^. .'J.'U (1820); McKenzie v. Fraser, ibid. 30 (1825); Ryan v. Bank of Montreal, 12 O. R. 39 (18SG); 14 Ont. A. R. 53:5 (1887); Jeny.s v. Fawler, 2 Str. 946 (1732); (hooper v. M( yer, 10 R. & C. 468 (1830); Sanderson v. rollnian, 4 M. & Gr. 209 (1842); Vagliano v. Rank ol 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 A^ to precluded from setting this up; Burchfleld v. Monr>', yJi' 3 E. & B. 683 (1854); Young v. Grote, 4 TUng. 25:; ■ 1S27); Marine Nat. Bank v. National City Bank, 59 N. Y. 67 (1874). But where a bank issued a draft for $'_'.') on cne of its brandi's without advice, and the holder raised it to 15,000 and deposited it in another bank which drew the money, and the forgery was discovered six days later, it was held That the bank which had ymid could not recover back: Union Bank v. Ontario Bank, 3 L. N. 386; 24 L. O. J. 309 (1880). 300 BILLS OF EXCHANGE. ''$ r^H ■ i i; :! V. '■ f ' ' i' § 54. (2) In the case of a bill payable to drawer's E8topiHa~ order, the then capacity of the drawer to indorse, r.r w'^to but not the genuineness or validity of his indorse- dmwp? " ment ; Imp. Act, s. 54 (2) (b). If bill in- •dorsed im- fore ac- ceptancp. ExiMtence ''*'"''ty , 1 1 • n T • "f drawer. bo accepted and paid according to its tenor, and tliat if it is dishonored he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings oji dishonor are duly taken ; (h) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse : Imp. Act, s. 65 (1) {a) (b). {(i) This is the ordinary undertaking of ji drawer. . By section 16 he may negative or limit his liability. The re(|uisite proceedings on dishonor are set out in sec- tions 48 and 40. These may be waived by the drawer: , section 16 (?>). For the compensation duo by the drawer • to the holder or indorser who pays, see section 57. •, -;: mmm wsm. 802 BILLS OF EXCHANGE. 55. ^ t i li ' '' LiRbi'ity of drawer. When a bill is drawn, the drawer is in the position ■ of a pri'icipal debtor, and the iudorser in that of a / surety. When it i:; accepted the accei)tor becouiiti the ' principal debtor, and the liability of the drawer and indorsers is conditional, until the bill is dishonoi'ed. It is only an indorser " who is compelled to pay " the bill, that is, who is under legal liability to pay, that can claim to be compensated by the drawer. 8ee Home v. Itouqu;?tte, 3 Q. B. D. at p. 519 (1878). The acceptor, drav.er and indorsers are jointly and severally liable to the bolder of a bill for its acceptance •and payment: Rouquette v. Overmann, L. R. 10 Q. li. at p. 537 (1875); C. C. Art. 2310; Code de Com. Art. 140. If the drawer has not capacity or power to incur liability by bill, he is not liable; but other parties to the bill mav be: section 22, s-». 2. (6) This has long been the 'aw; Collis v. Emett, 1 H, Bl. 313 {17!)0). " Precluded '' was inserted in the Im- perial Act when it was deinded to extend it to Scotland, as " estoppel " is not a term of Scotch Jaw. " Holder in due course " is defined in section 29. The drawer is not precluded from denyinp: the jrenu- ineness or validity of the indorsenvnt by the payee. i I I 2. The indorser of a bill, l>y indorsing it — Liability (a) Engages that on due prasentment it shall be ofiiult rser. i i -t t • accepted and paid accordnig to its tenor, and that if it is dishonored he will compensate tht? holder or a subsequent indorser who is coinpeJied to pi} it. provided that the requisite proceedings on dis- honor are duly taken : Imp. Act, s. 56 <2)(a). As regards the holder ot a bill an indorser has been compared to a new drawer: Penny v. lunes, 1 C. M. & R. at p. 441 (1834); Steele v. McKinlay, 5 App. Cas. at ]). 769 (1880). t.-;.! -r'r:.v_>:«-;-. LIABILITY OF INDORSEU. ^m This sub-section sets out the ordinary contract oi' jn Q^^ the indorser. ft may, lilie that of the drawer, be varied in different ways. His liability may be limited or even T'aV.iiity •^ • '' of in- nejratived; or Ik* may waive, as regards himse'^ some 'lorwr. or all of the duties imposed on the holder a^^ t<» present ment, protest and notice: section 10. See also se -tions 31 and 32, and the preceding sub section. As to the nalure of the contract of indors'-ment, gf/P the remarks o' Maule, J., in Castrif/ue v. Buttigieg, f/f Moo»e P. C. at p. 108 (1855). The indorsers may have an agreement varying /!ls between themselves the nudertaklug in this section, and €ven reversing the ordcn* 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 rda lion to each other is tliat of cosureties, irrespective of the order in which they have indorsed : Macdouald v. Whitfield, 8 App. Cas. 733 (1883). See Small v. Riddel, 31 U. C. C. P. 373 (1880). (h) Is precluded from denying to a holder in due Estoppel course the genuineness and regularity in all respects dower. of the drawer's signature and all previous indorse- ments ; (c) Is precluded from denying to his immediate or a sub8e({uent indorsee that thebill was, at the time of his indorsement, a valid and subsisting bill, and that he had then a good title thereto. Imp. Act, 8. 55(2) (6) (c). An indorner by putting his name on the l>ack of the bill has in flTed made these representations, and he is esttfpped from denying them to one who has in good faith given value for it while current, witliout notice of any defect. i;; fi f I i ,.* \ ^i'li' ! :i ! f. : 304 HILLS OF EXCHANGE. K 55_ ILLUSTRATIONS. -., 1. In an action against the last Indorser, it Is no defence „f^i„. *^ that the names of the maker and prior indorsers are forged: dorsf-r. Eastwood v. Weatley, 6 U. C. O. S. 55 (183S); McLeod v. Carman, 12 N. B. (1 Han.) 592 (1869). 2. The indorser of an unaccepted bill is estopped from deny- ing the signature or the competence of the drawer, a married woman: Ross v. Dixie, 7 U. C. Q. B. 414 (1850). See also (Jriffln V. Latimer, 13 U. C. Q. B. 187 (1856); Hanscome v. Cotton, 16 U. C. Q. U. 98 (1857). a. T'le indorser of a note made by a corporation is estopped from alleging that it was ultra vires: Merchants' Bank v. United Empire 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: Lebianc v. Rollin, Mont. Cond. Hep. 68 (1854); Norris v. Condon, 14 Q. L. R. 184 (1888). 5. A note in favor of two payses jointly was indorsed by one of them to a person who In turn indorsed it to another. The latter sued the payer- 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) 370 (1844). 6. Where a partner, having authority to draw and indorse, raised money for firm use by drawing bills in fictitious names and indorsing them in the firm name, the other partner was liable to an indorsee: Thicknesse v. Eromilow, 2 Cr. & J. 425 (1832). 7. A pl'3a denying the indorsement to defendant who indorsed it to plaintiff is bad: MacGregor v. Rhodes, 6 13. & B. 266 (1856). See r.nmbert v. Pack, 1 Salk. 127 (1699); Bomley v. Frazlev. 1 «tr«. 441 (1721). strunger 56. Where a person signs r bill otherwise than bill, liable as a drawer or ac(;eptor, he thereby incurs the d.irt^r liabilities of an indorser to a holder in due course, and is subject to all the provisions of this Act respecting indorsers. Imp. Act, s. 50. MAIULITY OF INDORSEU. 306 This section in th<' Imperial Act ends with tlie !^ QQ^ words " due oourse."' The last chuise was added in tlie Senate in ordeii to make it dear, that a iwrnon wliv) signs a bill as warrant**!' is entitled to notice of dis- honor. In Quebec, under Article 2311 of the Civil Code, a warrantor, or avjil, as lie is called in French law, wa« bound whenever the party for whom ho became war- rantor was bound, aid he was not entitled to anv notice of dishonor or protest, ajtart from that given to his, principal. The English decisions regarding such warrantors w.-inan were not uniform or consistent; but this section of the ''^^^' Imperial Act was framed in accordance with the doc- trine laid down in Steele v. McKinlay, where it was held that a pei'son 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 aeeeptoi-, as he was nor a drawe<', or an acceptor supra protest. The aval was fully n^cognized in Ereneh law. both Aval. ancient and modern. Pothier speaks of it. Change, No. 122, as " the contract of warranty nndjitakeii by a per son, either for the drawer, by putting his signature at the foot of the bill; or for the indorser by signing below the indorsement; or f<»r tin' a»i tptor by signing below the acceplanee." 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 rec«»gnized in Louisiana: McCtuire \ Hosworth, 1 La. Ann. 248 (1840). In Lower Canada before the <'o73, that an indorser " pour aval " was not entitle lial>ilities are. They may Im' varied »h provided in section 16. It is to be observed thar the Jinperia! Act does not say that lie is an in- dor»er or even that he has the ri{?htH of an indorser. The latter are cleail> given him here by the added words. Ah between the immediate parties, these rights and liabiiitM'H may be varied l)y ajfreenient; if the bill has not pasiMd into eh** iiauds of a holder in due course it may be mib}ect to tlwwe as defects of titU\ In the (mmf trf Duthie < Essery, 22 Out. A. R. IfM (1895), cit«*d in i|n» followinjf iUuMtraf ions, it was li«'ld that the old pWMi^^ o< the j^yee signing his uami', without veeofM'it^. aii^iWe that of a* iudor»r the ir,»ker is fild liable to a holder who tw/tr tfe^ *r^^ WW liHt^arity. See section 23, an<1 nhiiK.f0it'm *A*/> ff. pil$, 1. A bill or notp if payaW* */> b«ar^, *r J« indorBod ih blanJi. A perBou who put? hlH nft*<<- ffo H W *Oabl« aaother t/> negotiate it, or wlio 8lgn« An4 migotlat*« It tt^iM^/t, is liabl* an nn indorw^T to the »Htt ' . D'/wrl**-, !> ^ '' O. 8. 2(n (1836); Ha#»«^v<>n K, 'fwiT^f, 6 U C. Q. B, JO* 084*/, liOoth v. Barclay, 6 iM4 /'^^ ^>*W), VanleuvuD v. Vaft<M. 17« (1849); Fairoloiigh v f»,fiA. 9 tfif p. 6d5 (1854). 2. A. niafl^f « ft/>t« (/*y»M* tO ^ ^' order, and wrote tiis name ou tiie i/*t«*. wUhwt* M'n ftfm /#4«&rBemeat. Held, that C. could not be coiM«*4U/pd An n b^ f> at»t*'f and that t,#ie note would not suiiport a fi'/^^^r/ against Mrt> fy/ #. iH*-^r v Adams, 6 U V. O. a. t>0 (M^'i^i ^'tM^ ' A8honadale, 21 O. R. 600 0>r*/>, K *M UM«). Ayr ^merlrfln Plougb Co. V. Wallace, 21 S. C. Can. Ht (IIMK Gwia**!! v ««rber:, 5 A. & E. 436 (1836). 3. A. made a note to th# ord«r of B. for vatup, and befof» delivery it was indorsed bv c. <» sur^y for th* maker. B. in- ^ H^W^ LIABILITY OF S'lIUNGER OR AVAL tlorses It " without recourse" above C.'s signature, and then sues y C. He can recover; Peck v. Phippon, f« U. C. Q. D. 73 (1851); '^ Smith V. Richardson, 16 U. C. C. P. 210 (1865). See also, Words- worth V. Macdougall, 8 U. C. C. P. 403 (1858); Wilders v Stevens. 15 M. & W. 208 (1846); Smith v. Marsack, 6 C, B. 486 (1848); Morris v. Walker, 15 Q. B. 589 (1850); WllliOnsideration of $100, I ffin^f antee payment of the within note >feld, that defendant w^* liable without notice of dishonor: Palmer •/ Baker, 23 ('. C. C. P. 302 (1873). 7. Defendant indorsed on a note " I guarantee the payment of the within note to D. (the payee nnd plaintiff) on demand This was done to secure time, which was given Defendant wa« not liable as an indoraer, the note never having been negotiated, but he was held liable as a guarantor: Da vies v. Funston. 45 U. C Q. B. 369 (1880). 8. Plaintiff lenl money to a firm. One purtner made and the other inr'orsed a non-negotiable note in plaintiffs favor for the amounl. The indorser was held liable as a guarantor: Mc- Phee V, McPhee 19 O. R. 603 (1890); overruled by Robertson v. IX)n8d8ie, 21 O. R. 600 (18»a>. ». Defendant put his name on the back of a note as guar- antor for the maker. The note w^ dishonored and defendant ;8 guarantor for the maker l)Pfore its delivery to the poyi-c^a, he was held liable as an indorser to the latter, who had i;i-r.'^''-vf.T;}.Y t'yc?\'^-yi^\i'i\'*i'>yi\*ti.isW''i:^'^rifix^^ t r DAMAGES ON DISHONOR. (6) : Re Commercial Bank of 8outh Australia, 36 Ch. O. 522 (1887). It has bwn held in England, undci' thi- similar clause of the Imperial Act, that wh( r.; a for- eign drawer has paid re exchange, he may recover it from the English acceptor in additiim to the items (1), (2) and (3) named: Ex parte liobarts. Re Gillespie, IS Q. B. D. 28G (1880). See Re General South America Co., 7 Ch. D. 637 (1877). 311 §57. 1 ' f : I f (1) Amount of the Bill. — If the bill bears interest from its date or issue this would b» included: section 1»; Crouse v. Park, 3 U. C. Q. B. 458 (1847); Hudson v. Pawcett, 7 M. & G. 348 (1844). So would exchange if indicated in the bill: section 9 (d), section 71, s-s. 2 {(J), (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. 72, 73 ante. The rule in this clause is in ace »rdance with the general ruh' as to interest. See R. S. O. 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. (3) Expenses.— As" to these see section 93, s-ss. 2, I 3. Under this tenn the expense of protesting for better \ security is not included; nor is commission: Re English ' Bank of the River Plate, Ex parte The Bank of Brazil, [1893] 2 Ch. 438. ILLUSTRATIONS. 1. Where a bill or note la payable with interest at a certain rate, this rate governs after maturity: Howland v. Jennings, 11 ■r 312 BILLS OF EXCHANGE. ! I f : i ^ C17 U. C. C. p. 272 (1861); Montgomery v. Boucher, 14 U. C. C. P. ^ 4S (1864); O'Connor v. Clarke, 18 Grant, 422 (1871); Keene v. Keene, 3 C. B. N. S. 144 (1857). Overr uled by N0;_7 be^gsf. In t* rent on hill. :Ui; 2. In the absence of proof, nterest will be allowed at the rate allowed by our law on a note dated and payable in the United States: Grlflin v. Judson. 12 U. C. C. P. 430 (18C2). 3. Where a note fixes the rate to be paid after maturity i. " and until paid," this will be allowed, in the absence of fraud, ,' however exorbitant: Young v. Fluke, 15 U. C. C. P. 360 (1865). 4. Where a note was dated and payable in New York, but discounted in Canada, the law of Canada governs as to Interest: Cloyes V. Chapman, 27 U. C. C. P. 22 (1876). 5. Where the holder of a note recovered judgment with costs against the maker and indoraer, and the indorser paid and took an assignment of the judgment, he is entitled under R. S. O. c. 116, s. 3, to recover from the maker the whole of the judgment, including costs: Harper v. Culbert. 5 O. R. 152 (1883). •;. Where indorsors waived protest, the interest after matu- rity was not fixed by C. S. U. C. c. 42, s. 13, so as to enable the holder to rank for it under the Insolvent Act: Re Macdougall, 12 Qnt. A. R. 265 (1885). 7. A note for $3,000, payable six months after date " with ( interest at the rate of two per cent, per month until paid," only | bears interest at the legal rate of six per cent, after maturity: I St. John V. Rykert, 10 S. C. Can. 278 (1884). See also Dalby v. ' Humphrey, 37 U. C. Q. B. 514 (1875); Simonton v. Graham, 8 Ont. P. R. 495 (1881); Powell v. Peck, 15 Ont. A. R. 138 (1888); Grant V. People's Loan and Deposit Co., 18 S. C. Can. 262 (1890); Cook v. Kowler, L. R. 7 H. L. 29 (1871). 8. In Quebec under the old law a note payable on demand bore Interest from its date: De Chantel v. Porainville, 6 L. C. .1. S8 (1860); but under the Code, only from demand and default: Cleroux v. Pigeon, 32 L. C. J. 236 (1888). 9. " Bank charges" on a specially indorsed writ is a sufll- cient description of the expenses of noting: Dando v. Boden, [1893] 1 Q. B. 318. .As to an indorsement for interest, see London & Universal Bank v. Clancarty, [1892] 1 Q. B. 689; Lawrence v. WillcockB, ibid. 596; McVicar v. McLaughlin, 16 Ont. P. R. 450 (1895). lit' DAMAGES ON' DISHONOR. 313 (7)) In the case of a bill which has been dis- !< 57. honored abroad, in addition to tbe above damages, Further the holder may recover from the drawer or any j,i.'''*'"*tf«"'- dorser, and the drawer or an mdorser who has been compelled to pay the bill may recover from any party liable to him, the amount of the re-exchange with interest thereon until the time of payment : Imp. Act, s. 5] (2). Rt'-exchauge is the amouiu wliich tho party who ■ has btM'n compelled to pay the di.shouored bill would have to pay for a siglu hill, drawn at the time and place of dishonor at the then current rate of exchange on tlie place where the drawer or ind(trser soufjht to be charged resides, to cover the amount of the dishonored bill with interest and expens. ': De Tastet v. Uaring, 11 East, at p. 2*)i> (1809) ; Sut^e v. Pompe, S C. B. N. S. at pp. 56(;, 507 (18()0); Willans v, Ayers, 3 Apj.. Cas. at p. lUi /1877). The same rule prevails in the United States: Bank of the United States v. United States: 2 How. 727 (1844). The provisions of this section apjtly to promissory notes with the necessary modifications: section 88. It will be observed that the present Act does not No per- recognize or allow the furth(M' damages foimerly aiiowwi. allowed on bills drawn or negotiated in Canada and dishonored! by non-payment abroad. In the various provinces there was allowed a percentage from ten per cent, downward. By the Dominion Act of 1875, em- bodied in R, S. C. c. 123, s. 6, it was abolished for any part of Canada or Newfoundland and reduced to two and a half per cent, for other countries. See Foster V. Bowes, 2 U. C. P. R. 2m (1857); Bank of Montreal V. Harrison. 4 U. C. P. R. 331 (1808). .-•«f/>«i»»ft-T»»sse»s«»«s»s-"«t^-3K»T?r«»'»»^ m a'V^ ^-# IMAGE EVALUATION TEST TARGET (AAT-3) I 1.0 I.I «i? 1^' 112.8 112 IM M 1 2.2 2.0 1.8 1 1.25 1.4 1.6 •^ 6" ► V] m 'a ^^"^^ % cy^>^jfe Photographic Sciences Corporation 23 WEST MAIN STRBIT WEBSIER.N.Y. 14S80 (716) 872-4503 /" ^ <> ^9> V Q»\ "O^ ^<^. >^ \y ,.x ■"% 314 BILLS OF EXCHANGE. 1 5 I i, ... \-^^ § 58. 58. Where the liolder of a bill payable to bearer negotiates it by delivery without indorsing ferrerby it, he is Called a " transferrer by delivery": Imp. delivery. ' ^a n ^ Act, s. 58 (1). A bill payable to bearor is one which is expressed to be so payabk, or on whirh the only or last indorse- ment is in blank: section 8, s-a. 3. The holder of such a bill if. the person in possession of it : section 2 (d) (y). It is negotiated wh"n It is transferred from one person to another in such a manner as to constitute the trans- feree the holder: section 31. Such a negotiation is a sale of the instrument. Liability. (2) A transferrer by delivery is not liable on the instrument: Imp. Act, s. 50(2). No person is liable as drawer, indorser or acceptor of a bill who has not signed it as sucl' : section 23. See Ex parte Roberts. 2 Cox, 171 (1781)); Bank of England v. Newman, 1 Ld. Raym, 442 (1700); Feun v. Harrison, 3 T. R. 757 (1790). On eoimid- The transferrer by delivery, although not liable on the instrument itself, may in certain coses, in the event of its dishoaor, be liable on the consideration for which the bill has been transf(M*red : Merchants' Bank v. Whidden, 19 8. C. Can. 53 (1891). This is tlie case if i]\c bill was given for an antecedent debt: Mitchell v. Holland, IG S. C. Can. 687 (1889); Ward v. Evans, 2 Ld. Raym. 930 (1703); Camidge v. Allenby, B. & C. 382 (1827); (iuardians of Lichfield v. Greene, 1 H. & N. 884 (1857). Or if the delivery was not intended to operate a full and final dis<'harge of the liability of the trans- ferrer: Van Wart v. Woo'.ley, 3 B. & C. 446 (1824). Tranefprt^e The transferee, in order to hold the transferrer diligence, 'hible, must act with reasonabh' diligence in seeking to obtain payment, and in giving notice of dishonor or rejnKliatiug the transaction: Conn v. Merchants' Bank. ^ TIIANSFEUUF.R BY DELIVEIIY. 815 30 U. C. C. P. 380 (1879); Rogers v. Langford, 3 Tyr. § 53_ 654 (1833); Moule v. Brown, 4 Bing. N. G. 26(5 (1838); "~ - Robsoii V. Oliver, 10 Q. B. 704 (l.«47). Where a person changes bunk nott.'s or cashes a cheque payable to bearer to oblige the holder, he can recover back the money if the bank has stopped pay- ment or if the cheque is dishonored, provided he acts with diligence: Tonn v. Merchiints' Bank, supra; Turner v. Stoaes, 7 Jur. 745 (1843); Timmins v. Gibbins. 18 Q. B. 722 (1852); Woodland v. Fear, 7 E. & B. 519 (1857). ■ Where bill brokers got bills discounted at their banker's for the drawer and acceptor, and made them selves 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 accept- or as if they had actually indorsed the bills: Ex parte Bishop, 15 Ch. D. 400 (1880). 3. A transferrer by delivery who negotiates a warranty, 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, 8. 58(3). Subject to the conditions mentioned under the pre ceding subsection, th(«e three warranties appear to comprise all that were recognized in England or Can- ada before the Act. In some of tlie^ United States such a transferrer is held also i o 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. 570 (1839); Westfall v. Braley, 10 Ohio St. 188 (1859); while in others the English rule is follow<»d: Young v. Adams, 6 Mass. 182 (1810); Milliken v. Chapman, 75 Me. 30(5 (1883). ! I ^ ^ J ii! iM s; II 11 Hi iii i. « J l! i I' J i 1 I 1 :i ^ ''i'^ !• 316 BILLS OF EXCHANGE. ^ 58. ^* appears from some of the illustrations below, the word " valueless " need not be taken in a strictly literal sense. Trans fcrrer by delivery. ILLUSTRATIONS. 1. A transferrer by delivery for value impliedly warrants that the maker is not insolvent to his knowledge: Lewis v. Jeffery, 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). 3. A vendor of a bill impliedly warrants that it is of the kind and description that it purports on its face to TJe: 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, 3 E. & B. 683 (1854); Bell v. Dagg, 60 N. Y. 530 (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 anu acceptor Turn out to be forgeries. The bank can recover from the broker the money it paid: Fuller v. Smith, R. & M. 49 (1821). 6. An agent gets a bank to discount a bill drawn and in- dorsed 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 fide holder of a bill purporting to be drawn by A., accepted by B., and indorsed fn 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 dlllgcnco: Pooley v. Brown, 11 C. B. N. S. 566 (1862). I Wm ;f 5 ■i dischauge by payment. \ Discharge of Bill. Hoctious 59 to G3, inclusive, treat of the cin'um- stanees under which a bill is discharged. These are, payment by the acceptor, his becoming the h )Mer, his being released, or the bill being cancelled or materially ali<^red. Section (51, s-s. 2, treats of the release of a party (o a bill from his liability thereon, without the bill itself being discharged. Section 48 had provid.Mi for the discharge of a drawer or indoreer tt) 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 obligation to pay a s.mu of mone>- may become ex- tinct by payment, by uovJition, by release, by compensa- tion, by confusion, by prescription, and by some other special causes: C. 0. 1138. In the other provinces a bill may b satisfied in several ways, and may be discharged in whole or in part by set-off. In conne< tion with the five follo\viug sections these various subjects will be briefly noticed, as will also the release of a surety by (he holder's dealings with the principal. It ia possible that the last section (8) of the amend- ing Act of 1801 nuiy have an important bearing upon llu'se and other matters not speciflciilly mentioned or provided for in Ihe Act. The rentier is referred to the notes upon that s;>ction for a discussion of the question. Thus far the numbering of the sections hns fol- lowed that in the Imperial Act. Section ♦)(> of the latter provides, that where a cheque or bill payable to order on demand is drawn on a banker, and hi pays it in good fritii, hi is not resjtonsible, altliougli the in- dorseni'^its are uniiuthoriz<'d or even forged. Our Par- liament struck this section out of the bill, so tiiat Bec- tiou 60 of our Act is section Oh of the Imperial Act^ 317 §58. '•^ ] ' ;\ ' 1 J I It ^''^mmm \h\^ 318 BILLS OF EXCHANGE. Jill' I ' ! ; t 1 5 !if 'i 1. r I ■ \ § 58. ^°^ *^^^ difference is continued in the numbering of the succewiiug sections. P"";.av'^'' 59. A bill is discharged by payment in due ment: course by or on behalf of the drawee or acceptor: raynient " Payment in dne course " means payment made oouree. 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 (I). Payment is not defined in the Act. A bill is for a sum certain in money, but it may be satisflwi at or after maturity, in any way in which any other contract to paj' money may be satisfied, and, as provided by sec- tion 01, in a manner which would not be sufficient in the case of ordinary 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 parties who entered into the agree- ment. Whether the transaction is a purchase or a pay- ment, is a question to be resolved according to the intention of the parties, and 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 jiayment. Payment of a debt is not ne(*es- sarily i payment of money; bu( that is payment which the parties contract shall be accepted as payment, or which the law recognizes as such": 2 Daniel, § 1221. If the drawee or acceptor pays a bill before maturity, it is not thereby discharged; he may negoti- ate it. If the bill is payable to bearer or indorsed in blank, h«' may pay to the bearer ; if indorsed in fall, he may i>ay to the indorsee or to his crder. Payment is in good faith if made honestly; mere negligence is not enough to vitiate it: section 89. As to what may if I'M ,'1 ! 'S53l8 ipipw msCHAUGE BY PAYMENT. Sid I render the title of the holder of a bill defective, see § SS. sectiou 29. 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 newi one; if that is paid or discharged, so is the original. If the new one is dishonored the original lia- bility revives, except as to parties, who are merely sure- ties, and who may h.ave 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 pre- sumption will be, that such was not the intention of the part'es. 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. Article 1169 of tlie Civil Code provides that " Nova tion is effected (1) when the debtor contracts towards his creditor i\ new debt, which is substituted for the ancient one, ?nd the latter is extinguished; (2) when a new debtor is substituted for a former /. Wardens of the House of Industry. 1 Rev. de Leg. 27 (1845). 13. The acceptance of a promissory note is not payment or novation unless there be an evident intention that it shall have that effect: Jones v. Lemesurier. 2 Rev. de Leg. 317 (1840); Beaudoin v. Dalmasse, 7 L. C. R. 47 (1857); Brown v. Mailloux 9 ibid. 252 (1859); Noad v. Bouchard, 10 ibid. 476 (1860); Noad v. Lampsnn, 11 ibid. 29 (1860); Rogers v. Morris, 13 L. C. J. 20 (1869); Richard v. Boisve-t, 3 R. L. 7 (1871); Mercier v. Bous- qaet, 5 R. L. 352 (1874); Patterson v. Mc.Dougall Distilling Co. 26 N. S. 209 (1894); even when there is an indorser: Landry v, Boau- champ. 13 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: Garden v. Finley, 8 L. C. J. 139 (1860). m'l.b.e..4.— 21 M^^mS? I I ■wl 322 BILLS OU" EXCHANGE. l ■ :* 1 ■ il *■ f it S 59. ^^- Po*^^P8fi'on of a note by the maker after maturity, la a presumption of payment, but It may be rebutted by parol: Gre- Discharffe nler v. Pothler, 3 Q. L. R. 377 (1877); McKenzle v. F^izzell. Ram- "fpay- say A. C. 77 (1874). ment. 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 tlie drawer: Goodall v. Exchange Bank, M. L. R. 3 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, 19 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: Brown v. Harris, 13 N. S. (1 R. & G.) 13 (1879); Lyman v. 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, 13 N. S. (1 R. & G.) 319 (1880). 21. One of a firm who were makers of a note died, and the business was carried on by the surviving partner, who was execu- tor 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. 108; 7 v.', T,. T. 146 (1886). 22. Plaintiff agreed to advance a sum of money to defendant to fit 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'Nell, 22 N. S. 346 (1890). 23. When the holder of a bill Improperly sold property which he held as collateral, without notice, the note was paid only to DIKCHAUOE BY PAYMENT. 32.'i the extent of the amount received, although the 'ebtor might e KQ have a further claim for damages: Klnnear v. Ferfe don, 9 N. B. [. (4 Allen) 391 (1859). "4. The fact thnt the holder of a note had poaaesslon 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: Slmonds v. Travis. 13 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. 12 (1888); Owenson v. Morse, 7 T. R. 64 (1796); Dillon v. Rimmer, 1 Blng. 100 (1822); Simon v. Lloyd. 2 C. M. & R. 187 (183.5), Maxwell v. Deare, 8 Moore, P. C. 363 (1853): Bottomley v. Nuttail, 5 C. B. N. S 122 (1858); Re London B. & S. S. Bank, 34 Beav. 332 (1865). 26. Part payment to the holder at or after maturity operates as a discharge pro tanto, and any EUDsequen^ holder takes It sub- ject to such partial payment: Graves v. Key, 3 B. & Ad. 313 (1832). 27. Credit given to the holder of a bill by the party ulti- mately liable io equivalent to payment: Atkins v, Owen 4 N. & M. 123 (1834). 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- horough v. Mackenzie, 25 L. J. Ex. 244 (1856). 29. A bill is pccepted by three joint acceptors, not partners. It is paid at ma urity 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. 275 (1838); Beaumont v. Greathead, 2 C. B. 494 (1846). 30. 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. 560 (1851). 31. Payment by a banker is com))lete when the money is placed on the counter: Chambers v. Miller, 13 C B N S 125 (1862). 32. Bond or deed to operate as a merger must be co-extensive with the bill and between the same parties: Boaler v. Mayor 19 C. B. N. S. 76 (1865). I. f If ^ Ills I "VMVKIPMIUi'a I 324 jaJ.LS OF EXCHANGE. .'i i If I! n H: 11 H 5 59 '''^' ''^'^'^ payee of a note payable on rieniand fak^s a mortgage I as collateral security. He transfers the niorfgage, slotting the / amount of tbe note. Afterwards he indorses the note to u holder ,' in due course. The note is not paid: Glassccck v. Balls, 22 Q. D. D. i;j (1889). 34. Defendant wrote offering to guarantee the renewal of two maturing bilis of £1,048 and £462 respectively, i'lalnliff took bills foe £1,025 and £485. field, that although theat; were not strictly renewals, the guarantee covered them, the aggregate being the same: Barber v. Mackrell, 68 L. T. N. S. 29 (1892). 35. The fact of a landlord taking a bill of exchange from his tenant tor rent due ia some evidence of an agreement by the land- lord to suspend hl.s remedy by distress during the currency of the 1:111: Palmer v. Bramley, [1895| 2 Q. B. 7. 36. When a bill becomes due and i . presented for payment, and ia paid in good faith, if such an Interval of time has elapsed that the position of the holder may have been altered, the money so paid cannot be recovered from the holder, although indorse- ments ou the bill subsequently prove to be forgeries: London & River Plate Bank v. Bank of Liverpool, [1896] 1 Q. B. 7. 37. Where a person of the same name as the payee or indor- see of a bill payable to order. pret?ent» It at maturity to the ac- ceptor, who pays it, he reuipins liable to the real owner: Graves v. American Bank, 17 N. Y. 205 (1858). 1* ' ill If Compel) • gation or n«t-ofF. Conipeusa1i»)n in Quebec differs from set-olT in the other provinces in this, that when two persons are niutuaily debtor and creditor, conipensaiion takes place bv the sole operation of the law. The moment two debts, eipially ]i(iuidated and demandable, exist simul- taneously, they are mutuully extinf^uished in so far as they correspond: C. C. Arts. 1187, 1188. The result is that in Quebec, a bill transfecred after maturity would be subject to any money claiin which the acceptor might have against any prior hold r at or after maturity. In the other provinces a claim arising out of some matter not conuecttHl with the bill, :>nd which a party liable on it might set up against the holder, could not be set up jigalnst a person to whom such' holder might transfer it bona tide, even after maturity. In the old phrase- ology it is not an equity attaching to the bU, or in the- DISCHARQE BY PAYMENT. 325 language of the Act, a defect of title. The repeal of Art. 2287 of the Code which weut farther than the law of England in this respect, and the enactment of section ^'"f"P'^" 8atiun or 8 of the amending Act of 1891, may tend to assimilate setoff, the law in (^Juebec 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 fe«B were Indorsed on the note and enough more were earned to pay it, tjiit the attorney refused to credit o- apply them. He afterwards absconded. It was held that the note waa only discharged in part: Ketchum v. Powell, 3 U. C. O. S. 167 (1833). 2. Set-off by indorsees against the holder is no defence on a note given for the accommoua'Jon 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; Wood v. Koss, 8 U. C. C. P. 299 (1858); Smith v. Nicholson, 19 U. C. Q. B. 27 (1859). 3. A note transferred after maturity Is subject in Quebec to a money claim against any holder at or after maturity: Gibsone T. I.«e, 1 Rev. de Leg. 347 (1814); Hayes v. David, 3 L. C. R. 11« (1852); Duguay v. Senecal, 1 L. C. J. 26 (1865); Amazon Ins. Co. V. Quebec & G. P. S. S. Co., 2 Q. L. R. 310 (1876). 4. The indorser 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). 5. An account for goods sold and delivered may be set up ill jmpensation of a promissory note: Angers v. Ermatinger, 2 L. 1. L. J. 158 (1866); Quintal v. Aubin, M. L. R. 1 S. C. 397 (18'*3). 6. Compensation not allowed against a bill or note becarse claim not equally " clalre et liquide": Ryan v. Hunt, 10 L. C. R. 474 (1860); Parsons v. Graham, 15 L. C. J. 41 (1870); Perrault v. Herdman, 3 R. L. 440 (1871). 7. Claims arioing 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 and 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. Goold, ibid 5 S. C. 170 (1889). ,,. — X ; I ill '4 326 BILLS OF KXCHANGE. ' ^59 ^' '^^^ maker of a note may set up in compensatU n against . '_ tlie holder the amount of a note of a third party which he gave him aa collateral, and which the latter has disposed of: Lepage -J" V. Hamel. W R. L. 439 (1884). 9. The indorsee of an overdue promissory note is liable, in p,n action against the maker, to all equities arising out of the noti? transaction itself, but not to a set-off in rospect of a debt due from the indorser to the maker, arising out of collater&i matters: Burrough v. Moss, 10 B. & C. 558 (1830). ,; . 10. As to exchange of bills under a settlement at the clear- ing house, aee Wa/wlck v. Rogers, 5 M. & G. 340 (1843) ; Banqua Natlonale v. Merchants' Bank, M. L. R. 7 S. C. 336 (1891). I! 111-! Prescription or the Statute of Limitations. —This is anotlKM' subject ns to whicli the law of Q;uebec differs from that of the otiier provinces, not onlv 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 extinguishes the right of action. In Quebec the time required is five years, reckon-] ing from maturity: C, C. Art, 2260 (4). The debt is' then absolutely extinguished, and no action can be maintained after the delay for prescription has expired: O. C. .\rt. 22(J7. This was also the law before th{> Code: Cote V. Morrison, 2 L. C. J. 206 (1858); Lavoie v. Crevier, 9 L. C. R. 418 (1855)); Bardy v. Huot, 11 L. C. K. 200 (1861); Giard v. Giard. 15 L. C. K. 494 (1865); Bowker V. Penn, 10 L. (\ J. 120 (1865); Giard v. Lamoureux, 16 L. C. R. 201 (1865). The Code also contains the following provisions regarding the interruption of prescription: — No in^.or.se- ment on a note or bill made by a person receiving pay- ment will take it out of t o» operation of the law: Art. 1229. Where the atnoimi exceeds f50, no promise or acknowledgment is sutlicient, unless in writing ar»d signed by the party making the promise: Art. 1235. Prescription cannot be renounced by anticipation, but time acquired may be renounced: Art. 2184. Renuncia- LIMITATION OF ACTIONS OR PRESCllI FFION. 327 tion by any person does not prejudice his co-debtortt, hi8 sureties, or third parties: Art. 2229, , • Prescription runs against absentees: Art 22:^2 — also against married women, minors, idiots, m-idmen and insjine persons, saving their recourse against those wlio legally represent them: Arts. 22.'i4, 22G5), It does not run with resi>ect to debts depending on a condi- tion until the condition hapj:c?nM; or debts with a term until the term has expired: Art. 22;?6. Any one ov more of the following prescriptions may be invoked in Quebec: — (1) Any prescription entirely acquired under a foreign law, on a bill payable outside of Quebec, in favor of a i>erson Jving abroad, (2) Any prescription entirely acquired in Quebec, reckoning from "maturity, on a bill payable there, when the party was doniiciltd there at nmturity, in other cases from the time he be- came domiciled there. (:?) Any prescription resulting frou) the lapse of successive periods in the preceding cases, when the first })eriod elapsed under the foreign Jaw: Art. 2190. As to a conflict of these laws, see sec- tion 71 and notes thereon. In the o+her provinces the time reiiuired is six years. The English Statutes, 21 Jan^es I. c. 1(5, and ;{ & 4 Anne c. 8. establishing this limitation a:" to bills and notes, were introduced into the other provinces as set out ante ])p. 9-17; but were never law in Lower Canada: Under V. IMacdouall, 2 Rev. de Leg. 70 (183.5); Ru^isel v. Fisher, 4 L. C. R. 237 (1854); Langlois v. Johnston, ibid. 'A'^l (1854). There has also L..'en provincial legislation fixing this time in Nova Scotia and New Brunswick: K. H. N. 8. c, 112; C 3. N. B. c. 85. Under these Acts a promise or acknowledgment must be in writing aud signed by the pai'ty chargeal)le, to take a case out of the statute. Payment nuiy have such effect, but an indorsement on a bill or note by the party receiving or his agent, is not sufficient. No person is liable on account of the act or promise of his "o-contractor or debtor, and one may be liable and may be sued without the other. Actions by §59. fir-riii: 1 ii "■ Bv-rrm'm^' \'rt »v vn^ •>'. 328 BILLS OF EXCHANGE. §59 PreHcrip- tiua. mt\ If I Wlitii It run. or against minors, married women, or insane persons ~ may be brought within six years from the removal of the disability. In Kow Brunswick, absentees are placed on the same footing; in Nova Scotia the provision ap- plies only to actions to be brought against them. In Ontario there are two Acts — R. 8. (). c. GO, relating to the Limitation of Actions, and c. 123, to Written Pro mises. The former allows minors and persons non com- pos mentis six years after the removal of the impedi- ment to bring an action; allows Ihe same time afte.. his return to the province, to sue an absentee; and pro- vides that time shall run in favor of a joint debtor, although one or more joint debtors may be out of the province. Chapter 12;i provides that a i>romise to take a cjise out oi the statute must be in writing and signed by the i>arty chargeable; that in case of joint contrac- tors, or exe(!Utor8 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 receiv- ing 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 ma- tures 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. 'i5r>. It has, however, been considered latterly that bills payable on or after demand, or at sight, or a fixed p^'riud alter sights should be on the same footing as other bills, and the statute should only run from their dishonor or maturity. See Re IJoyse, 33 Ch. 1). 612 (1880); Re liethell, 34 Ch. D. 5G1 (1887); Sparham v. Carley. 8 Man. 240 (1802). See section 57 (a) (3), where interest, as damages on a dishonored bill, runs from the time of presentment for payment, if the bill is pa^'able on demand, and from the maturity of the bill in any other case. The principle rm LIMITAT[ON OF AC'J'IONS OR FRESCRIFnON. 829 there involved is somewhat analogous to that in the § 59. present question. Chalmers (p. 289) lays down the following five rules j]^,Tiami as embodying the law of England on the subject : — 1. Subject to the case provided for by section 48 (1), ami rule 5, no action on a bill can be maintained against any party tliereto 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 ma- turity of the bill, unless— (1) Presentment for i»ayment is necessary in order to cliarge the accep or, 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. 3. As regards the drawer or an indorser, time (generally) begins to run from date when notice of dishonor is received. 4. When au action is brouglit against a party to a bill to enforce an obligation collateral to the bill, though arising out o*" the bill transaction, the nature of the particular transaction determines the period from which the time begins to n'n. 5. Any circumstance which postpones or defeats the opera- tion of the Statute of Llraitations in the case of an ordinary con- tract postpones or defeats it in like manner In the ca&e of a Mil. No indorsement or memorandum of any payment written or made upon a bill by or on behalf of the party to whom auch pajment is made, is cufflcient to defeat the operation of the statute. ILLUSTRATIONS. The follovvlng expressions have been held not sufficient to take the case out of the statute: — 1. "The notes are gonulne; that Is, I think I made them, but I am under the impreswion they were paid, but T 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 t cannot do anything for you at pre- sent, but shall remember you as soon as possible": Genimell v. Colton, 6 U. C. C. P. 67 (lh56). 3. " K there is anything due plaintiff, I am willing to pay htm": Keys v. Pollok, 1 N. S. (1 Thorn.) 109 (1839). P: i; V iW.'T!"" f i 330 BILLS OF EXCHANGE. ■ ' ' 1' m ( . i ■,■ 1' il ; ' ' ii ■ ' t i K 59. ^' ''^ promise to pay "as soon as possible," without proof of -'- * (lefendsnt's ability: Murdoch v. Pitts, 2 N. S. tJames) 258 (1S54). 5. " I know that it is due, but I will never pay it": Wain- Prescrip- tion. man v. Kynman, 1 Ex. 118 (1847). See also Scales v. Jacob, 3 Bing. 638 (182t)); Ayton v. Bolt, 4 ibid. 105 (1827); Fearn v. Lewis, 6 ibid. 34;) (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 (1851). 7. " As I do not recollect the date or the amount of the in- dorsements, I would tli.ink you to send me a statement of them": Gibson V. Grosvenor 4 Gray, (Mass.) 606 (1855). ;-7 t f - *' 1^1, ■ Hf ■ ■'■■ If 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": Collis v. 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 (18:2). 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 vour s^norositv xvViorher 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 1 shall have to pay in the end" Williamson, 2G Vt. 230 (1854). Phelps V. 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). The following cases further illustrate the various rules above laid down: — 13. Payments made by one of two joint and several makers will not take (he case out of the statute, as against the other, unless made expressly as his agent- and by his authority: Crelgh- ton V. Allen. 26 U. C. Q. B. 627 (1867). 14. A writing siifflclent to take a note out of the statute enures to the jeneflt of a Bubsequent holder: Marshall v. Smith, 20 U. C. C. P. 356 (1870), il i) UMITATION OF ACTIONS Oil PRESCRIFFION. 381 16. For conflicting decisions In Upper Canada aa to prescrlp- S KQ tion claimed under the Lower Canada Statute, see Hervey v. Prirt- I [ 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. Jac- ques, 20 U. C. Q. B. 366 (1861); Darling v. Hitchcock, 28 U. C. Q. B. 439 (1868). " •• 16. The statute begins to run the day after the last day cl grace: Kdgar v. Magee. 1 O. R. 287 (1882); Ste. Marie v. Stone 2 DorloD. 369; 5 L. N. 322 (1882). .7 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. Andres, 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 five years' prescription" Gravelle v. Beaudoln, 7 L. C. J. 289 (1863); Lacoste v. Chauvin, ibid. 339 (1863); Seguin v. Bergevin, IG L. C. R. 415 (1865); Pigeon v. Dagenals, 17 L. C. J. 21 (1872). Crevier v. Saurlole, 6 L. C. J. 257 (1862), overruled. 20. The lex fori governs as to prescription: Hlllsburg'i v. Mayer, 18 L. C. J. 69 (1873); Cross v. Snow, 9 L. N. 196 (1886); LafalUe v, Lafallle, 14 R. L. 466 (1886); but held In a case govern- . ed 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 holder did not learn his whereabouts until more than five years had passed, the five years' prescription did not apply under the rule, "contra non valentem agere non currit prescriptio": Wilson V. Demers, 14 L. C. J. 317 (1870). 21. Where the defendant had frequently written during the / five years, asking for delay, prescription was held to have been J inte-rupted: Walker v. Sweet, 21 L. C. J. 29 (1876). , ' 22. A verbal promise to pay a note under |50 during the ,• five years, will Interrupt prescription. Fuchs v. Legare, 3 Q. I^. ^. R. 11 (1876); but such a promise after the five years have ex- ' pired will not revive a note: Flset v. Fournicr, 1 I^. N. 589 (1878). 23. Whero a bill fs not accepted in payment of a debt, the prescription of tho note does not prevent a recovery on the original debt if It Is not prescribed: Robitallle v. Denechaud. 5 g, L. R. 238 (1879); Mitchell v. Holland. 16 S. C. Can. 687 (1889). if ■I n m\ 'm 332 BILLS OF EXCHANGE. ii«fn:;. 4 I n! '. ■■A fi Mil ; h ji: riii §59. tion. 24. A conditional offer In writing which is not accepted, does not interrupt prescription; nor does the deposit of collaterals Prescrip- with the holder: McGreevy v. McGreevy, 17 Q. L. R. 278 (1891). 25. Payments on account by one partner take a note out of the statute as against hid co-partner also: Sands v. Keator, & N. B. (3 Kerr) 329 (1847); Vanwart v. Roberts, ibid. 572 (1847). 26. The action accrued to the plaintiff, an indorser, when the note wab transferred to him, and this being more than six years after it was due, his absence beyond the seas was immaterial: Bradbury v. Bnillle, 6 N. B. (1 Allen) 690 (1850). 27. Where a note is payable by Instalments, each Instalment 1 is subject to a separate plea of prescription: Montgomery v. ■ MeNair, 7 N. B. (2 Allen) 31 (1850). ,.; _ , . , , . 28. A bill is payable three months after date or sight. Tim© 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. 323 (1810). v, v • 29. A note payable on demand, dated Jan. 1, Is not iasued I until July 1. Time runs in favor of the maker from July 1: / Savage v. Aldren, 2 Stark. 232 (1817). 30. A note Is payable three months after demand. Time i runs in favor of the maker from the day it is payable: Thorpe / V. Coombe. 8 D. & R. 347 (1826). 31. The consignee of goods authorizes the consignor to draw on him against them. The bill is dishonored and the drawer compelled to pay. '^'ime runs against him on the implied con- tract of indemnity from ihe date of payment only: Huntley v. Sanderson, 1 Cr. & M. 467 (1833). 32. 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 ac- ceptor was compelled to pay and not from maturity: Reynolds V. Doyle, 1 M. & Or. 753 (1840); in cases of contribution, see Davies v. Humphreys, 6 M. & W. 153 (1840). 33. A bill payable 90 days after sight is dishonored by non- acceptance. As regards the draver, time runs against the holder from the dishonor and notice thereof. If the bill is presentAd for payment and again dishonored, no fresh cause of action arises: Whitehead v. Walker, 9 M. & W. 506 (1842). 34. A note ia payable on demand, with no mention of in- terest Proof that interest ha:8 been paid on it takes it out of the statute: Bamfleld v. Tupper, 7 Ex. 27 (1851). LIMITATION OF ACTIONS OR PRESCRIPTION. 333 35. In 1840 a blank acceptance is given to a i^erson who in R 59. 1850 fills it up as a bill payable three months after date and negoti- 1 1.. ates it to a bona fide 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). 36. 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 runb from the day the cheque was cashed, and not from its date: Garden v. Bruce, L. R. 3 C. P. 300 (1868). 37. The maker of a note, twenty 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: Bourdln v. Green- wood, L. R. 13 Eq. 281 (1871). 38. To take a case out of the statute there must be an ac- knowledgment of the deot from which a promise to pay is im- plied; or an unconditional promise to pay; or a conditional pro- mise, and proof of the fulfilment of the condition : Re River Steamer Co., L. R. 6 Ch. at p. 828 (1871); Green v. Humphreys, 26 Ch, D. at p. 479 (1884). 39. Where part payment is relied upon as an acknowledg- ment, it must be under such circums ances that a promise to i^ay may be Inferred in fact, not merely implied in law: Morgan v. Rowlands, L. R. 7 Q. B. at p. 498 (1872). 40. A note dated in 1857 was made p^-yable three months after demand with no mention cf interest. Interest was paid in 1857 and l&5^, and indorsed on the note. The maker died in 1869, and the rr.yee in 1878, being still the holder. On a claim by the executor of the payee, held, that time ran from the first ijayra>nt of interest, and independent of the statute it would be presumed to nave been paid: Ro Rutherford, 14 Ch. D. 687 (1880). 41. Where a demand note was given and dated .July 24th for a loan, but the money was not paid to the malier until Septem- ber 8th, the statute (probably) runs from July 24th: Buccleugh v. Eden, 5 T. L. R. 690 (1889). 42. After the indorsement of a note the maker made a pay- ment to the payee, who had no right to receive the money. Held, that this did not take the case out of the statute: Stamford Bank- ing Co. v. Smith, [1892] 1 Q. B. 765. 2. Subject to the provisions hereinafter con- Payment tallied, when a bill is paid by the drawer or andriu-'*^*'^ indorser, it is not discharged ; bat — effect ' ' umamBaiiim 834 BILLS OF EXCHANGE. § 59. (a) Where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer Payment by drawer, may enforce payment thereof against the acceptor, but may not re-issue the bill ; um Payment byin- dorser. (b) 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 own and subsequent indorsements, and again ne- gotiate the bill : Imp. Act, s. 59, (2) (a) (6). The provisions to which this sub-section is subject are those relating to accommodation bills in sub-sec- tion 3. If the indorser, who has paid a bill, desires to nego- tiate the bill again, he must strike out his own and sub- sequent indorsi ments, and if indorsed to him in full h ■ must re-indorse it. The present section contemi)lates payment at or after maturity; where a bill before maturity is negoti- ated back to the drawer or an indorser, he may re-issue it, but cannot enforce the bill against any intervening party to whom he was previously liable: section 37. If several jwrsons indorse a bill or note for the ac conmiodation of the acceptor or maker, and one of them pays it, the whole circumstances attendant upon its making, issue and transference, may be legitimately leferred to for the purpose of ascertaining the true rela- tion to each other of the parties who put their signa- tures upon it, and reasonable inferences from these facts and circumstances are admitted to the effect of qualifying, altering, or even inverting the relative lia- bilities which the law merchant would otherwise assign to them. Where several directors mutually agreed to y'^n^sncen*? MB JUj a ptiM i ^ a^ i PAYMENT HY DKAWEU OR INDOUSF.U. 385 I I i become joint suretios for the oompan}-, and in pursu- S QQ ance thereof indorsed notes made by tlie eoinpan.y, they were entitled and lial)le to (Mjual oontriliutionw anions; themselves: Macdonald v. Whitfield, 8 App. Cas. 73.'J (1883). Wh<'re an action apainst the indorser of a note was dismissed on the {ground that he had indorsed for the accommodation of the plaintiffs, this was held to be sm answer to an aelion seeking to hold him responsible as a partner by estoppel in the firm which made the note: Kay V. Isbister, 22 Ont. A. R. 12 (1895). Affirmed in the Supreme Court. 16 C. L. T. 150 (189G). ILLUSTRATIONS. 1. The Indorser who pays a note at maturity may at once > proceed against the prior parties who are liable to him: Latham i V. Norton, 6 U. C. O. S. 82 (1841); McNab v. Wagstaff, 5 U. C. Q, B. 588 (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 the plain- tiff who was held entitled to recover from the acceptor: Black v. Strickland, 3 O. R. 217 (1883); Callow v. Lawrence, 3 M. & S. 95 (1814); Hubbard v. .Jackson, 4 Bing. 390 (1827). 3. An indorser who pays is not entitled to and does not need conventional subrogation against prior parties: Bove v. Mc- Donald, 16 L. C. R. 191 (18(55). 4. Payment of a bill by the drawer does not discharge the bill or free the acceptor: Goodall v. Exchange Bank, M. L. R. 3 Q. B. 430 (1887). 5. Where two persons indorse a note for the accommodation ^ of the maker, and the last indorser pays It, he is entitled to re- ■'> cover only one-half the amount from the prior indorser: Vallee v. Talbot, Q. R. 1 S. C. 223 (1892). 6. The indorser of a bill writes to the drawer of a bill, pro- mising to " retire" it, and accordingly takes it up before maturity. It is not discharged: Elsam v. Denny. 15 C. B. at p. 94 (1854). " -" 7. The drawer or Indorser of a bill who pays. Is a quasi- «urety for the acceptor, and as such Is entitled to the benefit of !ii ii ; ■; f BiKJffiSiSmsKra -ma BILLS OF EXCHANGE. S RQ any securities deposited with the holder by the acceptor: Duncan V. N. & S. Wales Bank, C App. Cas. 1 (1880). The Indorser of a promissory note has the same rights: Aga Ahmed Ispahany v. Crisp. 8 T. L. R. 132 (1891). ml 'i •■! V a i I! IS : Acc(,n.in() 3. Where an accommodation bill is paid in due nation bill. ^ course by the party accommodated, the bill is dis- charged. Imp. Act, 8. 59 (3). An accommodation bill is one which the drawee ha» aceeptod for the accommodation of the drawer or some other person. The person thns accommixlaled nia.v or may not be a party to tlie bill. For a definition of an accommodation party and his liabilities, see section 2S. The principle on which the V>ill is discharged is, that it has been paid by the person who is in reality primarily liable for the debt; and havin}- no rights against any person, he conld not by a transfer after ma- turity give any rights to another holder: Solomon v. Davis, 1 C. & E. 83 (1883). If the bill was for the accommodation of several parlies, and it is paid by one of them, the bill is dis- charged, but the party who has paid has his recourse against the others. . . ILLUSTRATIONS. U: r ;' . " 1. Where the payee for whose accommodation the bill was made pays It after maturity, the bill is discharged: Watson v. Porter, 5 N. B. (3 Kerr) 137 (1846). 2. Plaintiff 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 in- dorsed by him and discounted in a bank. Plaintiff paid it at maturity and sued the maker. Held, that although plaintiff did 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. B. 154 (1884). 3. 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 niSCHAUGE BY CONFUSION. i vfUB discharged when the drawer paid it: Coolc v. Lister, 13 C. B. K CQ N. 8. at p. 591 (1863). See also Lazarus v. Cowle, 3 Q. B. 451) (1842); Ralli v. Dennlsfoun, G Ex. 483 (1851); Parr v, .Jewell, KJ C. a at p. 709 (1855); Strong v. Foster, 17 C. B. at p. 222 (1856); Mcaklns v. Martin Q. R. 8 S. C. 522 (1895). 60. When the acceptor of a bill is or becomes A»x,epU)r the holder of it at or after its maturity, in his own at umtur rifjht, the bill is discharged. Imp. Act, s. Gl. ItV. If the pei'Hou who has acct'ptJ'd a bill in his own name at maturity, is tlie holder in his capacity of exe riitor, administrator, trustee, asMif;u<'e. tutor, curator, or Ihe like, the bill is not dischar{?ed. Such a bill lie would need to hold " in his own right " in order that it might be discharged under the present section. If the sicceptor becomes the holder of the bill beCon' its maturity it is not discharged, but he may reissue and further negotiate it; but lie is not entitled to en- force payment of it again..t any interA'ening party to whom he was previously liable: section 37. When a bill is discharged, all rights of action on it are extin guished; 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 discharged, but if he became the executor of the holder it was discharged, though he had to account for tho amount of it as assets: Freakley v. Fox, 9 B. & C 1.30 (1829). The discharge of the bill freed the indor.sers: Jenkins v. McKenzie, 6 U. O. Q. B. 514 (1849); Lowe v. Peskett, 10 C. B. 500 (1855). The principle of this section is what is known in the Confunio civil law as " confusion." The law of Qnebec 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 ])einson, there arises a con- ,, - fusion which extinguishes the obligation. — 1199. The confusion which takes place by the concun-ence of the m'i,.h.b.a. -*22 fl 888 BILLS OF EXCHANGE. § 00. Q"nliti('S of creditor and |>rinoipal debtor in the Hani«> person avails the snroties." It only takes plaee when the person is both creditor and debtor personally, in hi» own right, or when he is both debtor and creditor in the parae capacity or quality. If a bill, accepted by two or more joint acceptors, is held by one of them at or a'ter maturity, it iy dis- charged; but such acceptor doi-s not then by lose his recourse or right of contribution against his co-accep- tors: Harmer v. Steele, 4 Ex. 1 (1849). See Ntale v. Turton, 4 Bing. at p. 151 (1827). Express waiver aH against acceptor. 61. When the holder of a bill at or after matu- rity, absolutely aiul unconditionally renounces his. rights against the acceptor, the bill is discharged : the renunciation nnist be in writing, unless the bill is delivered up to the acceptor. Imp. Act, s. 02(1). ■ .* A bill or note payable on demand is "at maturity"" immediately on its being made, and the holder in desir- ing to renounce all rights in it, when delivering it to any peribon other than the acceptor, must make his renuncia- tion in writing: Edwards v. Walters, W. N. Feb. 15th^ 1S96, p. 15. _, , / V The principle of this section in allowing a bill to be discharged by accord alone, without satisfaction, is con- trary to the ordinary rule of the common law with re- spect to contracts. It was embodied in. the law mer- chant 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 wa» formerly sufficient: Dingwall v. Dunster, 1 Dougl. 247 (1779); Whatley v. Tricker, 1 Gamp. 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. DISCHARCE BY WAIVER. 339 Where there is a payment of a sum \ohh than (he § Q\^ amount of the bill, th<» bill may, in Quebec and Ontario, , : , ~ be discharKed under Ihe provisions of the present sec- by partial tion; or, it may be considered as discharned by pay- ''*^*""° ' nient under section 59, This was always the rule of (he civil law; and it has been in effect adopted in Ontario by R. 8. O. c. 44, s. 53, s s. 7, which altered the rule of the common law as to accord and satisfaction, and pro- vides that ''part performance of an obligation, either before or after a breach thereof, when expressly ac- cepted by the creditor in satisfaction, or rendered in pursuance of an a{?reenient for (hat purpose, though without any new consideration, shall be held to extin- guiph the obligation,'- In any of the other province** where the common law. rule is still in force, part pay- ment would only operate as a discharge when the con- ditions of the present section are complied with. The bill is discharged only >vhen the renunciafnm . by the acceptor is at or after maturity, and when it is absolute and unconditional: See Re George, Francis v. Bruce, 44 Ch. D. 627 (1890). For the consideration of the questions that may arise, where the holder reserves his rights againat other parties to the bill, see the notes on the following sub-section. -v 2. The liabilities of any party to a bill may in DischftrRe like manner be renounced by the holder before, at waiver", or after its maturity ; but nothing in this section shall effect the rights of a holder in due course without notice of renunciatiun : Imp. Act, s. 62(2). "In like manner.'' that is. absolutely and uncon- ditionally; and in writing, unless the bill is delivered up. If the acceptor or any other party to a bill is dis- charged by the holder before maturity, and no entry be •«£^SeB«SI^«S¥3 n . ■■ 840 BILLS OF EXCHANGE. 1 .: ■! At com- mon law. § 61. n^'ide of it upon the bill, and it come into the hands of a l>ona fide holder for value before ih.iturity without no- tice, the party so released would be liable to: him. 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 wIm stands in the relation of principal to other parties, becomes a matter of great importance. The question arises most frequently in connection wit a com- position and discharge, or the granting cf time by tak- ing a renewal. At common law where parties to a bill stand in the 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 sur^^ti's ar^? discharged, unless the holder has expressly reserved his rights against the sureties, or has reserved their rights against the principal deb iv: Oakley v. Pasheller, 4 CI. & F. 207 (1836); Owen v. Homan, 4 H. L. Gas. 997 (18H3); Oriental Corporation v. Overend, L. R. 7 Ch. 142 (1871); Polak v. Everett, 1 Q. B. D. at p. 673 (1876) ; Munster and Leiuster Bank v. Prance, 24 Ir. L. R. 82 (1889); Thurgar V. Travis, N. B. (2 Allen) 272 (1851); Holliday v. Jack- son, 22 S. C. Can. 479 (1894). On this subject, Chalmers ^ay^, p. 219: "For the present purpose, prima facie the acceptor of a bill is the principal 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 i t the principal as regards the second and subsequent indorsers, and so on in order; but evidence for the pre sent 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 th bill, pro- vided 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. R. 7 H. L. 348 (1874). The rule is the same if one who was ' ti-mmm^i^saMiitsi^etmmatf f^ DISCHAKQE BY WAIVER. 341 orijjinall.y a principal debtor becomes a siirtty, and the § Q"^^ creditor has had notice of tlie change: Rouse v. Brad ford Banking Co., [1894] A. C. 586. It was formeiiy held that an acceptor could not be shewn to be a mere surety, as this wruld be contradict- ing the written instrument by parol : Fenturo v. Pocock, 5 Taunt. 192 (1813). But now all the attendant facts and circumstances may be referred to, for the purpose, of a/jcertaining the true relation of the parties to each othfr: Macdo.iald v. Whitfield, 8 App, Cas. at pp. 745, 748(1883). In Quebec suretyship becomes extinct by the same suretyKhip c?iuses as other obligations: C, C. Art. 1956. For these, '" <-i'»'''«c. nee p. 317, ante. The discharge of the principal debtor discharges the surety: C. C. Art. 1958; but delay given lo the principal debtor does not discharge tlu^ surety, who may in case of such delay sue the debtor in order to compel him to pay: C. C. Art. 1961. The suretyship is also at an end when by the art of the creditor the surety can no longer be subrogated in the rights, hypothecs, and privileges of such creditor: C. (^ Art. 1959. As will be seen from the cases cited, the decisions in the Quebec courts have been conflicting, and wlierc a party to a bill occuping the ri^lation of a surety has btvn released by the mere giving of time, notwithstand- ing 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 applicabh", where the law of the proviace or the Code has no ex- pnss provision. As to the effect of the conflict between the law of Quebec and that of other jjrovinces, see notes on sec- tion 71. and on section 8 of the amending Act of 1891. 1i Il ^ 842 §61. BILLS OF EXCHANGE. ILLUSTRATIONS. Dischiirpe 1. Time given to the maker of a note, discharges an intlorser: by waiver. Vankoughnet v. Mills, 5 Grant, 6C3 (185G); Arthur v. Ller, 8 U. C. C. P, 180 (1858); Farrell v. Osha\,a Mtg. Co., 9 U. C. C. P. 23» (1859); Bedell v. Eaton, 4 N. B. (2 Kerr) 217 (1843). 2. The holder of a note gave time to two makers who were the principal debtors, without the consent of a faird maker who waj surety for them. The latter was held not li^iule to a plain- tiff who received the note after maturity with notice: Perley t. Loney, 17 U. C. Q. B. 279 (1858); Shepley v. Kurd, 3 Ont. A. R. 549 (1879); Davidson v. Bartlett, 1 U. C. Q. B. 50 (1844), overruled; Greenough v. McClelland, 2 El. & Fl. 424 (I860). 3. Mere delay, or indulgence, or -^ven negligence, is not enough where there i3 no binding agreement to give time: Thompson v. McDonald, 17 U. C. Q. B. 304 (1858): Wilson v. Brown. 6 Ont. A. R. 87 (1881); Birthelot v, Aylwin, 2 Rev. de Leg. 31 (1819); Merchants' Bank v. Whitfield, 2 Dorion, 157 (1881); Philpot V. Briant, 4 Blng. 717 (1828); Goring v. Edmonds, 6 Bing. at p. 99 (1829); Black v. Ottoman Bank. 15 Moore P. C. at p. 484 (18G2); Carter v. White, 25 Ch. D. at p. 672 (1883); Hay v. Powrie, 13 Sess. Cas. 777 (i88o); Grelg v. Taylor, 15 V. L. R. 86 (1889). 4. A reserve of the rights of the holder against the parties who apparently occupy the relation of sureties, prevents a dis- charge of the latter: Bank of Upper Canada v. Jardlne, 9 U. C. C. P. 332 (1859); Canadian Bank of Commerce v. Northwcod, 14 O. R. 207 (1«87); Mulr v. Crawford, L. R. 2 So. App. 456 (1875). 5. When the hclders of a note gave time to an indorsor. knowing that the maker had signed the note for his accommoda- tion the maker was discnarged: Bank of Upper Canada v. Ocker- mann, 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. 355 (1883). See ilealey v. Dolson, 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: Mer- chants' BanA 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 tr payment to such date, and dlsf-hn'ges a surety: Ryan v. McKerrall. 15 O. R. 160 (1888). Ill 1 ; DISCHARGE 3Y WAIVER. 9. Two partners gave a creditor a Joint and several note, and a mortgage on firm property. The firm dissolved, one partner taking the assets and assuming the liabilities. The creditor ( discharged the mortgage without getting payment, and after- wards sued the other partner on the note. Held, that he could ■not recover: Allison v. McDonald, 23 S. C. Can. 635 (1894). 10. Delay granted to the mak«r ot a note does not liberate the indorsor: Massue v. Crebassa, 7 L. C. J. 211 (1863); Meikle v. Dorion, . R. 1 S. C. 72 (1892); Guy v. Pare, Ibid. 443 (1892). ■Contra, St. Aubin v. Fortin, 3 Rev. de Leg. 293 (1845); Desrosiers v. Guerin, 21 L. C. J. 96 (1876); Carslake v. Wyatt, 2 Stephens' Dig. 112 (1877); Banque Ville Marie v. Mallette, 33 L. C. J. 8 <1888); Pelletier v. Brofeseau, M. L. R. 6 S. C. 331 (1890). 11. Where the holder accepted a composition from and re- leased 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). 12. 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 original debtor was discharged; O'Brien v. Semple, M. L. R. !i Q. B. 55 (1887). 13. An Indorser was released before maturity by the bank which held ihe note at maturity. Held, that the plaintiff who took it when overdue, cannot recover from the indorser: McLeod y. Carman, 12 N. B. (1 Han.) 592 (1869). 14. Plaintiffs held as collateral a note indorsed by one of de- fendants for the accommodation of rhe makers, who were plain- tiffs' debtors. Plaintiffs re lewed the note, to which the Indorsed note v»a8 collateral. This rel'Qved the indoiser: Le Jeune v. Sparrow, 1 N. W. T. R., part 4, p. 50 (1893). , • 15. Taking a renewal bill payable on demand, Is a giving of / •time 88 w^ell as one payable at a fixed future time: Currie t. Mlsa, L. R. 10 Kx. at pp. 163, 164 (1875). 16. When two or mo e sureties contract severally, the credi- tor by releasing one docB not discharge the others; but when the r 'editor releases one of two or more sureties who have contract- ed Jointly and severally, the others are discharged, thf Joint suretyship of the others bei x part of the consideration of the contract of each: Ward v. National '^ank of New Zealand, 8 App. Cas. at p. 764 (1888). 348 §61. '.lasattaeauaak' u$ BILLS OF EXCHANGE. i ^- ' S 61 ^^' ^*^® discharge of on© or 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). 18. " An absolute discharge given to the acceptor dlschargca 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, 3 T. L. R. 723 (1887). , . „ ,^■ ... tionofbiii ^2, Where a bill is intentionally cancell(>d by the holder or his agent, and the cancellation m apparent thereon, the bill is discharged : 2. In like manner, any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case, any indorser who would have had a right of recourse against the party whose signature is can- celled is also discharged : Imp. Act, s. 03 (1) ('^). Of any sig- iiature. ' Ah to slrikin}«' out iiuloi'HenumtH, st-e ante p. 211, and section 59, s-s. 2 (h). Prior parties are not released by the cancellation of a lignuture: Bart he v. Arm- stronp, 5 R. L. 2i;i (18m»); Bigg8 v. Wood, 2 Man. 272 When a bill, produced at the trial, has the defen- , dant's signature erased, the plaintiif cannot recover j without evidence that it was I BILLS OF EXCHANGE. is estopped from rleuying the prior signatures, and. that it is a valid bill: section 55, s-s. 2. 't 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 ma- terial or not. is a question of law: Re Commercial Bank, 10 Man. 174 (1894); Vance v. Lowther, 1 Ex. I). 176 (1870). The proviso was inserted in the English bill in committee, and is intended to modify the rigor of the common law, which voided the bill entirely, even in the hands of an innocent holder. For a definition of a holder in due course, see section 29. ILLUSTRATIONS 1. Defendant Indorsed a note for the accommodation of thrt makers. They afterwards inserted the words " with Interest at 10 per cent." without his Icnowledge. He was held not liable on the note to a bona flde holder for value: Halcrow v. Kelly, 28 U. C. C. P. 551 (1878). 2. Whf 1 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). 3. Where a note was payable to P. or bearer, and 'after being negotiated, the name 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 lie sold." The payee cut from one note the portion with these words, but without (U'facliig it. On the other he erased the word " not." Plaintiff noticed tlie erasure when buying the notes, and gave much less than their value for tliem. Held, that he was not an Innocent holder and the notes were void: Swalsland v, David- eon, 3 O. R. 320 (1882). ^ -, DISCHARGE BY ALTERATION. 5. Two persons signed a promissory note commencing " I promise to pay to bearer." It was discounted by plaintiff for the holder, on the latter agreeing to become responsible for the note, and signing below the malters. It was held that he was not an indoreser, but was liable as a surety, and that the note was not voided as against any of the parties: Kinnard v Tews- ley, 27 O. R. 398 (l':96); Mersman v. Werges, 112 U. S. 139 (1884) approved. 6. 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: Dorwln v. Thomson, 13 L. C. J. 262 (1889); Young v. Grote, 4 Ring. 253 (1827); Marcussen v. Blrkbeck Bank, 5 T. L. R. 646 (1889). 7. 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). 8. Where a renewal note was altered by inserting the words "jointly ar,d severally," it was rendered void; but plaintiffs re- covered the balance due on the original note which was also declared on: People's Bank v. Wharton, 27 N. S. 67 (1894). 9. The rule in the proviso was applied in favor of plaintiffs when after the note was signed, the words " jointly and sever- ally" had been inserted in the same handwriting as the rest of the body of the note: Waterous Engine Co. v. McLean, 2 Man. 279 (1885). 10. Where a bill Is voided on account of a material altera- tion, 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. I^angdale, 3 B. & Ad. 660 (1832); Burchfield v. Moore, 3 Z. *. B. 683 (1854); Atkinson v. Hawdon, 2 A. & E. (J28 (1835). 11. The alteration may be " apparent " although the holder may not have been able to detect it: Leeds Bank v. Walker, .>^ Q. B. D. 84 (1883). 12. A bill for £500 was after acceptance altered by the drawer to £3,500. The stamp was pvflaclent to cover the larger amount, and the bill when accepted had spaces where the words and figures necessary for the alterations were written In. In an action by a holder for value against the acceptor, It was held that the latter was not estopped from setting up the true facts, and was only liable for £500 Scholfleld v. Londesborough, [1895], t^ B. 1)36. An appeal has been taken to the House of Lords. 347 §63. ■ :!H.7-^| 848 BILLS OF EXCHANGE. 5i63. What are material altera- ti(.)ni). 13. Except in the case of banker and customer, there is no duty on the part of the drawer or maker of a negotiable instru- ment to use care in framing It so as, as far as posbible, to pre- vent fraudulent interpolation or alteration, and failure to use such care will not prevent him from setting up the defence that the instrument has been avoided as against him by material alteration without his consent. A finding by the jury that but for the plaintiff's want of care he would have seen that the bilT in question had been altered, negatived the proviso of this section and was equivalent to a finding that the alteration was apparent: Brown v. Bennett; Colonial Bank v. Bennett, 9 N. Z. L. R. 48T (1891). 2. In particular, the following alterations are material, namely, any alteration of the date, the 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). 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. 439 (1859); Beltz v. Molsons Bank, 40 U. C. Q. B. 253 (1876)- Banque Villo Marie v. Primeau, 26 L. C. J. 20 (1881); Quebec Bank v. Ogilvy, 3 Dorion. 200 (1883); Masten v. Miller, 4 T. R. 320 (1791); Outhwaite v. Luntley. 4 Camp. 179 (1815); Atkinson v. Hawdon, 2 A. & E. 62S (1835); Hirschnian v. Budd, L. R. 8 Ex. 171 (1873); Vance v, Lowther, 1 Ex. D. 176 (1876); Engel v. Stourton. 5 T. L. R. 444 (1889). 2. Alteration of the sum payable: Halcrow v. Kelly, 28 U. C. C. P. 551 (1878); Fitch v. Kelly, 44 U. C. Q. B. 578 (1879). Even if made less: Hamelin v. Bruck, 9 Q. B. 306 (1846); Sutton v. Toomer, 7 B. & C. 416 (1827); Warrington v. Early, 2 E. & B. 765 (1853). 3. Alteration of the time of payment: Meredith v. Culver, supra; Reg. v. Craig, 7 U. C. C. P. 239 (1857); Westloh v. Brown, 43 U. C. Q. B. 402 (1878); Loni? v. Moore, 3 Ksp. 155 n. (1790). 4. Alteration of the place of payment: McQueen v. Mclntyfe. 30 U. C. C. P. 426 (1879); Tidmarsh v. Grover, I M. & S. 73ft (1813): Cowie V. Halsall, 4 B. & Aid. 197 (1821). ■i"fl^ •1 niSCHAROE BY ALTERATION. 349 5. Adding a place of payment: Calvert v. Baker, 4 M. A W. R AQ 417 (1838); Gibb v. Mather, 2 Cr. & J. at p. 262 (1832). -_J1_ 6. Making a "Joint" note "joint and several": Samson v. Yager. 4 U. C. O. S. 3 (1834); People's Bank v. Wharton, 27 N. S. 67 (1894); Perring v. Hone, 4 Blng. 28 (1826). See Leslie v. Em- mons. 25 U. C. Q. B. 243 (1866). 7. By striking out or clipping off a condition indorsed: Campbell v. McKinnon, 18 U. C. Q. B. 612 (iS59); Swaislaud v. Davidson, 3 O. R. 320 (1883). 8. By adding "or order" to make the note negotiable: Law- ton v. Millidge, 4 N. B. (2 Kerr) 520 (1844). But see No. 19 below. 9. By adding a new maker after issue: Reid v. Humphrey, 6 Ont. A. R. 403 (1881); Gardner v. Walsh, 5 E. & B. 83 (1855); Browning v. Gosnell, (Iowa) 59 N. W. R. 340 (1894). Contra, . Kiiinard v. Tewsley, 16 C. L. T. 141 (1S96) to appear in 27 O. R.; Mersman v. Werges, 11? U. S. 139 (1884) approved. 10. Striking out without the consent of the makers a memor- andum on the back of a note that It was to be renewed: Fulton V. McCardle, 6 N. Z. L. R. 365 (1888). 11. Erasing the signature of one of two joint makers: Nich- olson V. Revlll, 4 A. & E. 675 (1836). 12. Changing "I" to "we": Draper v. Wood, 112 Mass. 315 (1873). 13. Changing "order" to "bearer": re Commercial Bank, 10 Man. 171 (1894); Booth v. Powers, 56 N. Y. 22 (1874). The following alterations have been held not to be ma- terial: — 14. Inserting the word " months" where Inadvertently omitted: Laine v. Clarke, 3 Rev. de Leg. 434 (1816). 15. As regards the maker, giving the note a later date: Canadian Investment Co. v. Brown, 19 R. L. 364 (1890); but now see sub-section 2, supra. 16. Writing the words " pour aval" over the signature of the first Indorser. when he had in fact Indorsed the note above the payee, and as an "aval": Abbott v. Wurtele, Q. R. 6 S. C. 204 (1894). 17. 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' Bank v. Stirling, 13 N. S. (1 R. & G.) 439 (1880): bat now see sub-section 2, supra. t* i ;' 850 BILLS OF EXCHANGE. p. K go 18. A memorandum at the foot declaring the note to be pay- !- able at a particular place: Cunard v. Tozer, 4 N. B. (2 Kerr) 365 (1844), 19. Adding "or order": Kershaw v. Cox, 3 Esp. 246 (1800); Byrom v. Thompson, 11 A. & E. 31 (1839). 20. 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). 21. Adding " on demand," where no due time was mentioned: Aldous V. Cornwell, L. R. 3 Q. B. S'S (1868). 22. Adding "for the Bank of, etc." to the signature of the cashier when he had in fact signed for the bank: Folger v. Chase. 13 Pick. (Mass.) 63 (1836). 23. Inserting the dollar mark before the numerals: Hough- ton V. Francis. 29 111. 244 (1862). 24. Correcting a name incorrectly written: Cole v. Hills, 44 N. H. 227 (1863); Derby v. Thrall, 44 Vt. 413 (1872). Fraudulently altering a bill or note is forgery. See ante p. 141, and the Criminal Code, 1892, section 422, which defines forgery as the making of a false docu- ment. Sub-section 2 of the same section declares that " making a false document includes altering a genuine document in any material part, and making any ma- terial addition to it, or adding to it any false date, at- testation, seal or other thing which is material, or by making any material alteration in it, either by erasure, obliteration, removal or otherwise." Acceptance and Payment for Honoe. Sections 64 to 67, inclusive, relate to this peculiar form of acceptance and payment, called also supra pro- test, because it can' only take place after the bill has been protested 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 "W w^ i ArCEPTANCE AND PAYMENT FOR HONOR, 861 now have for communicating with each other, it is sel- 5j 63. dom resorted to in the course of modern mercantile affairs. i 64. Where a bill of exchange has been protested Accep- for dishonor by non-acceptance, or protested for honor better security, and is not overdue, any person noti-roteat. 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. 65(1); C. C. 2296. It is not necessary that the protest should be ex- t tended before acceptance supra 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 Wacker- bath, 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 ac- ceptance supra protest benefits only the party for whose honor it is made, and those subsequent to him. With the consent of the holder there might also be accept- ances supra protest for the honor of prior parties: 1 Daniel, § 525, The drawee may also change his mind and accept supra protest. If the acceptor supra pro- test 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- ^ payment by the drawee. The bill must still be pre- ; 1 h f i I fill: ti 362 BIIJJS OF EXCHANGE. § 64. ^t'^ilfd at maturity to the drawee, and prott'Bted for non- payment before beinj^ presented to the acceptor for htmor, who is in the position of a surety, rather thau as being primarily liable: sections 66. 67, s-s. 5. ILLUSTRATIONS. 1. A defendant cannot be char»?«d as an acceptor of a bill that has already been accepted, though conditionally, by the drawee: Spalding v. McKay. 5 U. C. O. S. 656 (1838). 2. OrlRlnally It was not necessary to protest a bill before an acceptance for honor: Mutford v. Walcot, 1 Ld. Raym. 575 (1697). 3. A protest was subseque^'tly held to be a necessary prelim- inary In accordance with the custom of merchants: Vandewall v. Tyrrell, 1 M. & M. 87 (1827). Accep- 2. A bill may be accepted for honor for part tance in i^ii n i ■ i • • ^ -r » i)art. only of the sum far which it is drawn. Imp. Act, s. 65 {2). Must be in writing. And signed. An acceptance for part only is a qualified accept- ance section 19, 2(h); but does not require the assent of the drawer or indorsers: section 44, s-s. 2. Where a foreign bill has been accepted as to part, it must be pro- tested as to the balance: ibid. 3. An acceptance for honor supra protest, in order to be valid, must — (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 fre- quently simply, " accepted S. P.," with the signature of the acceptor, and if not accepted for the honor of the* «1rawer, with a designation of the party for whose honor wm^mm m ACCEPTANCE FOR HONOR. '.io'd iHf H it is rnadc, Fornu'il y a notarial " act of lionor " was ^ Qj^ nec»*H8ar.v as in t\w cano of a payment for ''onoc. Brooks' Notary, 4th Ed. IKJ; Mitciiell v. Baring. 10 B. & C. 4 (lHL*j>); (Jazzam v. Arnistronj?. [i Dana, 554 (1835); sec- tion OH, 8-8. 3; bnt this is not iTjpiired by the A«;t. As to tlie rccinireincnts of an ordinary accx'ptanoc, sih? si-c tion 17. 4. Where an acceptance for honor does not For wh.w^ 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 Comimw for honor, its maturity is calculated from the date time, 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 tlie Imperial Act with the single substitution of the word '' protestinjr " for " notinfc,'' which really makes no chanf?e: section 92. In order to make it harmonize with section 11, s-s. 1 («), the words "at sight or" should have been insetted as has been done in sections 12, 18, and 40 by the amending - Act of 1801. It is likely, however, that the Courts will interpret it as if the change hnd been made (s(n' 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. Germaine, 7 B. & C. at p. 471 (1827). 65. '-l-'he acceptor for honor of a bill by accept- Liability ing it engages that he will, on due presentment, L'S?r pay the bill according to the tenor of his acceptance, 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 tbpse facts : Imp. Act, s. 66 (1) ; C. C. 2296. m'l.b.e.a.— 23 s ll' 354. §65. To whom liable. BILLS OF EXCHANGE. The acceptor for honor is only secondarily liable on / the bill. It is sufficient that the bill be noted for pro- / test, the forual protest may be extended subsequently: Hectioi) 51, s-H. 4, and section 92. The reason for requir- ing a presentation for payment to the drawee at ma- turity, is that he may in the meantime have received effects or instructions that may lead him to pay the bill ; Hoare v. Ca/enove, 16 East, 398 (1S12). 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 cf his acciptance without de- lay to the party for whose honor he a<'cepted, 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 hoMer and to all parties to the bill subsequent to the party for whose honor he has accepted. Imp. Act^ s. 66 (2). Presfiiit- mpnt to iiccej>tor fur honor, The acceptor for honor is subject to the same ea- toppels as an ordinary acceptor, and if he has accepted for the honor of the drawer to the same estop])els as a drawer: see section 54 (/>), and also section 55 (ft); also IMiillips V. Im Thurn, !8 C. B. N. S. 094 (1805), and L. R. 1 C. P. 471 (1866) ; Wilkinson v. Johnston, 3 B. & C. at p. 430 (1824). 66- Where a dishonored bill has been accepted for honor supra protest, or contains a reference in case of i\eed, 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, s. 67 (1). It is HufHcient that the bill be noted for non pay ment, the protest may be extended subsequently: see- ACCEPTANCE FOR HONOR. 355 tion 51, 8-8. 4, and section 92. It is optional with the § QQ, holder to resort to the referee in case of need or not as he thinks fit: section 15. In Quebec, under the Code, presentment to the referee was compulsory: C. 0. 2306. 2. Where the address of the acceptor Tor honor Time for is in the same place where tb ? bill is protested for ment. non-pa,yment, the "bill must be presented to him not later than the day following its maturity : and where the address of the r.cceptor 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. 67 (2), The " day followinj; " would mean the next busi- ness day: section 91. The Act is silent as to t?M» effect of want of presentation to the acceptor for hono' within the prescribed time From the Jauguaji^e used it would «eeni as if he would be discharged, and also any party to the bill who would have been dischar^. d if he had [>aid It. See Story v. Patten, .1 ^Yend. (N. Y.) 480 (1S:50); Noupuier, § 583; also sub-secticm 4. 3. Delay in presentment or non-presentment is Delay and excused by any circumstance which would excuse ^'"^"^*'*' delay in presentment for payment or non-present- ment for payment. Imp. Act, s. 07 (8). For the circumstances which excuse delay in pre sentment for payment or which dispense witii present ment for payment, see section 40. 4. When a bill of exchange is dishonored bypn.tostfoi the acceptor for honor, it must be protested foruu'n'r''' non- payment by him. Imp. Act, s. 67 (4). 860) BILLS OF EXCHAXGE. § 66. The fact that a protest for non-pa^meut is requiitrt in all cases where an acceptor for honor refuses to pay a bill, even when no one has indorsed the 1)111 subse- quent to his acMx^ptance for honor, would seem to favor the idea, that failure to present it would not only re- lease him, but also release the party for whose honor he had accepted and subsecjuent parties. Notice of dis- honor should be sent to each of these parties. See Nou- guier, § 1.320, 1321. Payment for honor 67. Whare a bill has been protested for uon- uic'*^'^" payment, any person may ir'^e^vene and pay it supra protest for the hon > ..ny 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. II TTMillTT < It is not necessary that the protest be actually ex- / tended before the payment for honor is made; it is suffl- ■ cient that it be noted : nectiou 02. The person for whose nccount a bill is drawn is in England called " the third account." This section would appear to be applicable to pro- missory notes. A person who takes up a bill supra ••< ;■ t for the benefit of a particular jiarty to the bill H'^ 6- to the title of tlie {K'rson from whom, not for m'i. -' '. he re- ceives it, and has all the title of such |>erson to sue upon the bill, excei)t that he discharges all the parties sub- sequent to the one for whose honor he takes it up, and that he cannot himself indorse it over: In re Overend, Guiney & Co., Rx parte Swan, L. li. 6 Eq. 344 (18G8). See also Cowan v. Doolittle. 4fi U. C. Q B. 808 (1881); MacArthur v. MacDowall, 23 S. C. Ci :. 571 (18<)3); Ex parte Lambert. 13 Vesey, 179 (180(5); <}< ..alopulo v. Wie- ler, 10 C. n. fiOO (1851); Ex parte Wyh* . D.'G. F. & J. C42 (18G0): Deacon v Stodhart, 2 M. & Or. at p. 320 f 1HW« '« ^ ACCEPTANCE FOR HONOR. 867 (1841); Baring v. Clark, 19 TMck. (Maws.) 220 ilKil); § 67, Hohofleld v. Hayavd, 3 Weud. (N. Y.) 488 (l.S:{()). - The Frenoh Code de ComrnercL' contaius provisioiin similar to those of the present section: Arts. 158, 159. Jt is there 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 (6). r " Protest " in this sub-section means the protest for lion-paviiient by the acceptor, which is necessary in order to cliarge t!ie acceptor for honor: per Cliitty, J., In re English Bank and Bank of Brazil, [1893] 2 Ch. at p. 444. ••:■; ^- ;:/-;v. ;■'•:•;!>.,-■: :: I.e. Holder's 7. \\ here the holder of a bill refuses to receive din)\icate payment supra protest, he shall lose his right of of loiit bill. • , ,1 111 1 recourse agamst any party who would have been discharged by such payment : Imp. Act, s. 68(7). / ' :«v Lost Instruments. > . ^v Only two sections, (\H and 69, are devoted to this subject. The former gives the holdei" the righl to de- mand a duplicate 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 th<' rubs of evidence, by which secondary evidence is allowed in the case of a bill or note lost or destroyed. mmm LOST INSTRUMENTS. 859 . 68. Where a bill has been lost before it is § 68. overdue, the person who was holder of it 1^^^}^^^^" apply to the drawer to /jjive him another bill of theriRhtto ^^ '' 111' iluulicate same tenor, giving security to the drawer, if re->jf i<«t 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 if refused. to give such duplicate bill, he may be compelled to do so. Imp. Act, s. 69. Before the passage of the Imperial A<'t this provl- siou applied to inliind bills aud notes, under 1> Wni. III., c. 17, and 3-4 Anne, e. 8. Courts of Equity had ex- tended it to indor.sers as well as to the drawer. Chal- mers (p. 233) speaks of the remedy as being still very inadequate, as it gives no power to obtain an indorse- ment or acceptance over again, aud contrasts it with the remedy given by the Continental Codes, which have elaborate provisions on the subject. See Walmsley v. Child, 1 Vesey, sen. 341 (1749), and Rhodes v Morise, 14 Jur. 800 (1850). The loss o?' destruction of a bill does not i'<'li<'ve pre„ent from the duty of demanding payment. This should be accompanied by an offer of indt mnity, and if pavment is refused, protest nujy be made on a copy or wiitteii particulars: section 51, s-s. 8. " i^i'eglect to offer in- demnity to the maker or acceptor on denuind of pay ment does not deprive the payee of his right oF acti ui, but it will prevent him from recovering costs, and will compel him to bear any special damages resulting from the neglect on his subsequent suit": 2 Daniel, § llOo; Thackray v. Blackett, 3 Camp. 1(54 (1812). 69. In an action or proceeding upon a bill, Action c,r the court or a judge may order that the loss of the'"***"" infiit if bill is kwt / !1 i m i 1 ' ! i 360 BILLS OF EXCHANGE. li" § 69. instrument shall not be set up, provided an iiidem- , nitv is i^riven to the satisfaction of the court or Lost bill. -^ ^ . , , . ,. , , judge against the claims oi 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 uunntained, either on the instiument (ir on the coneideration for it, even if it was overdue win n lost: Pierson v. Hutchintou, 2 Camp. 211 (1809); Han- sard V. Robinson, 7 B. & ('. 9) (1827); Ramuz v. Crowe, 1 Ex. 1G7 (1847); Crowe v. Clay, 9 Ex. (iO-l (1854). Most of the provinces had provisions similar to the present sect; >n. When the defendant did not demand security a de- cree was made for plaintiff without requiring it: Abell v. Morrison, 23 (Irant, 109 (1876). The loss or destrvictiou of the note must be provi d and indemnity offered: Wante v. Robinson, 2 Rev de Leg. 29 (1816); Reaupr(5 v. Burn, 2 Rev. de Leg. 31 (1821). See Carden v. Ruiter. 9 L. C. J. 217 (18(55); Wright v. Maidstone, 1 K. & J. 701 (1855). No indemnity is recjuired if the bill is not nego- tiable: Cooley V. Dominion Building Society, 24 L. C. J. Ill (1878). See Wain v. Bailey, 10 A. & E. 616 (1839). ^ ,,, ILLUSTRATIONS. \. Whore a note had been Indorsed to an attorney's clerk and mislaid: Held, that secondary evidence of it could not bo given without calling the clerk, although the attorney vms called and swore to his belief of Its loss: Grover v. Clark, 5 U. C. O. S. 208 (1835). 2. When the plaintiffs 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 al'.cp;e that the bill was unindorsed at the time of the loss, the declaration was held bad on general demurrer: Russell v. McDonalri, 1 U. C. Q. B. 296 (1844). BILL IN A SET. 1 3. Payee against maker. Plea, loss of the note by plaintifF before eult, and that he hath been and la unable to produce it. Replication denying the loss only, held good: Campbell v. Mc- Crea, 11 U. C. Q. B. 93 (1853, 4. A person suing on a lost note should, before action, ten- der 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 (1869); King v. Zimmerman, L. R, 6 C. P. 466 (1871). 5. Where the maker of notes is entitled to get them back, and the holder says they are lost and offers security, the former is not obliged to accept security, but is entitled to a payment Into Court of the amount: Hudon v. Gervais, Q. R. 7 S. C. 221 (-895). 361 §69. HetM. Bill in a Set. ' > The provisions of the Act relating to bills in a set are all found in section 70. Bills in this fonn are usual for remittances abroad. To prevent delay in case the first should miscarry a second is frequently sent by a suc- ceeding mail. In Canada a set is generally made up of three parts. F^ach part contains a <;ondition that the others (naming them) are unpaid. See form in Ap- pendix. 70. Where a bill is drawn in a set, each part i'.^ '« of the sot being numbered, and containing a refer- ence to the other parts, the whole of the parts constitute one bill : Imp. Act, s. 71 (1). An agreement to d liver u]) certain sets of foreign bills which were drawn in three parts is not complied with by delivering up one of each sei : Kearney v. West (Jranada Co., 1 H. & N. 412 (1S5()). A person who negu- tiates one part of a set does not warrant that he has the others: Pinard v. Klockman, 'A B. & H. 388 (18(;3). 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. Robertson, '\ Dow. p < .J5,..i^ .J IV m 362 BILLS OF EXCHANGE. ^ 17Q 218 (1815); Soci6i6 Generale v. Metropolitan Bank, 27 -^ L. T. N. S. 849 (1873). If indorsed 2. Where the holder of a set indorses two or todiner*-!!! persona, 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). If nogoti- .»ted to dif ferent holders. Accept- ance. If more than one part is accepted. See Holdsworth v. Hunter, 10 B. & C. 449 (1830). 3. Where two or more parts of a set arc nego- tiated to different holders in due course, the holder whose title first accrues 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). Bee Perreira v. Jopp, 10 B. & O. 450 u. (1793) ; Lan^ V. Smyth, 7 Bing. 284 (1831). 4. The acceptance may be written on any part, and it must be written on one part only : Imp. Act, s. 71 (4). 5. If the drawee accepts more than one part, and such accepted 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). Payment witlmut delivery of proper jiart. See Holdsworth v. Hiiuter, supra. 6. When the acceptor of a bill drawn in a set pays it without requiring the part bearing his BILL IN A SET. 863 • acceptance to be delivered up to him, and that § 70. 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 (6). 7. Subject to the preceding rules, where any one DiHcharge, part of a bill drawn in a set is discharged by pay- ment or otherwise, the whole bill is discharged : Imp. Act, s. 7i (7). As to how a bill may be discharged, see sections 59 to 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); Dur- kin V. Cranston, 7 Johns. (N. Y.) 442 (1811); Ingrahiim V. Gibbs, 2 Dallas 134 (1791). When the first of a set was accepted and in the hands of a third party to cover advances to be made, but whi ;h he declined to make, the holder of the second who had made advances on condition he should get the first, was held entitled to the latter to the extent of his advances, as against the holder, who claimed to hold them for a former balance due him: Soci6t«i General*' v. Agopian, 11 T. L. R. 244 (1895). 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. H.) 205 (1839). Conflict of Laws. Section 71 lays down certain rules upon qut'stioua involving the conflict of laws or private international law. On some of the points thus settled, there had been a great conflict of authority and decisions in England and Canada. The section, is copied from sei'tiou 72 of m^isiiw*. 364 BILLS OF EXCHANGE. :ifi| i| 'yO. ^^^ Imperial Act, with tlie siiiRle subHtitntion of " Can- — ada ' for the words " United Kingdom " wheiever tliey occur. On account of the peculiar character of our federal constitution some new questions will arise In re in con- 8e(|uence of the adoption of the language of the Im- perial Act without change or detinition. Is Canada Dominion Parliament, it is probable that the Courts will apply the princii)les of the present section, which are the recognized rules of private international law, to casses where two or more provinces are concerned and there is a conflict between their laws. '' Drawing, in reference to bills of exchange, in- clude.H not only the writing and signing, but also the full execution by delivery": \VaIlace v. Houther, 2 H. C. Can. at p. (iia (1878). 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 J .a V r'ifl I. ' 866 BILLS OF EXCHANGE. ^^^B ' § 71. l'*"'"'*'^" ''^^ bearer, ii' it is payable to bean'iv section 2. 'i'lu- contractH of acceptance and indorsement, like tlinr of the drawer, nvv only complete upon delivery, so that i it is (lie delivery in each case which deti rniini's th(» f 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 places where it bears date, and to have been accepted at the place at which the drawee is addressed,, unless there is somethinfj on it to show that the con- tract was in fact made in some 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 ac- ceptance or indorsement, is to b" governed in each case by the lex lo' ' contractus, is one that is generally re- cognized. W I this point, Story on the Conflict of Laws, sees. . , JCO, 202 ; Westlake, § 228 ; 1 Daniel^ Ss' 867. 868. " Acts and deeds made ont of T^ower Canada are valid if made and passed according to the forms reipiired by the law of the conntry where they were passed or made": C. C Art. 7. See also Gne- ' pratte v. Yonng, 4 DeG. & Sm. at p. 228 (18.51). A bill drawn in Michigan, where a verbal accept- ance is not recognized, upon a person in Illinois, where such an acceptance is binding, may be validly accepted by parol: Mason v. Dousay, 35 III. 424 (1864); Bissfll 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 drawee in Illinois, binds him: Scudder V. Union National Bank, 91 TJ. 8. (1 Otto) 406 (1875). A verbal agreement in Missouri by a Chicago firm to accept and pay in Chicago certain drafts for goods consigned, is governed by the law of Illinois, the place of performance, and is consequently binding: Hall v. Cordell, 142 U. S. 116 (1891). CONFLICT OF LAWS. 867 1 It is doubtful how far the principle of such deci- § Yl nions would be law under the Act. The rule in the pre- sent clause is " subject to the provisions of this Act." Bect^ ,n 17 provides that an acceptance is inv> lid unle.s8it is written on the bill and signed bv the drawee. See the notes and cases under (lanse ih), below. Provided that — Proviso. (1) Where a bill is issued out of Canada, it iswiinot not invalid by reason only that it is not stamped"**'" in accordance with the law of tbc place of issue ; Imp. Act, 8. 72 (1) (a). This proviso adoptsi the well established rule of ■ the common law that no country will regard or enforce / the revenue laws of another country. See Story, sees. 245, 257; Boucher v. Lawson, Cas. temp. Hard. 89, 194 (17.'?4); Holraan v. Johnson, Cowp. 341 (1775); Biggs v. Lawrence, 3 T. R. 454 (1789); Lightfoot v. Tenant, 1 B. & P. 551. 557 (1796);Planche v. Fletcher, 1 Dougl. 251 ^ ^ (1779); James v. Catherw^ood, 3 1). & R. 190 (1823); Wynne v. Jackson, 2 Russ. 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 by the Act, as regards bills drawn in one country and negotiated or payable in another. (2) Where a bill, issued out of Canada, conforms, Forrign 1 1 r /-I J bill treated as regards requisites m form, to the law of Canada, :« valid it may, for the purpose of enforcing payment there- of, be treated as valid as between all persons who negotiate, hold or become parties to it in Canada : Imp. Act, s. 72 (1) (6). 'ismMkSmiK:, B68 BILLS OF EXCHANGE. mm« § 71. Bills of exchange were drawn in France by a doini- '~ ciled Frenchman in the French language in English form on an P^nglish company, who duly accepted them. The drawer indorsed the bills and sent them to an Eng- lishman in England. It was held that the acceptor could not dispute the negotiability of the bills by reason of the indorsements being invalid according to Frencli 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- (5) Subject to the provlsioiis of this Act, the lexicxsi interpretation of the drawina:, indorsement, accept- ance 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 are the succeeding clauses of this section, and section 53. " Interpretation " is not defined in t!ie Act. Is it to be taken in a narrow sense and confined simply to the '' constrn don" of the drawing, indorsement or accept- ance 51S the case may be ? Or does it also include the natui'e and effect of these respective contracts, and the rights, obUgations and liabilities of the parties who enter into them? In Alcock v. Smith, [1S!>2] 1 Oh. at 1>. 25fi, Roiner, J., says that he understands " interpreta- tion " here to mean " legal effect," and he held that the indorsement of an FInglish inland bill in Norway was governed by Norwegian law. This decishm was attirmc-' in apiK'al. See No. *5 below. The word " fonn " in clause {a) of this section, and •' interjtretation " in the present clause, may perhaps be used in the same sense as '" the heading to sections A to 21 of the A >»'. If so, this would favor giving them the wider menr ing. DlSllONOK BY NON-PA YMENJ-. 369 It has beoa geuerally reeognizt'd as a rule of inter- national law that where a (iontract is enteicd into in one place to be performed in another, it is to be govern- ed as to its validity, nature and obligation by the law of the place of performance, in accordance with the maxim: contraxisse unusquisque in eo loco intelligitur, in quo. ul solverer, se oblif^uvit. See Story on <'oh flict of Laws, sees. 280, 281; Westlake, § 229; 3 Burge Col. Law, pp. 771, 772; Robinson v. Bland, 2 Burr. 1078 (1760); Fergusson v. Fyflfe, 8 CI. & F. 121 (lH-10); An- drews V. Pond, 13 Pet. (U. g.) 65 (1839); C. C Art. 8. To give a wide meaning to the word " interpreta- tion " in this section would not interfere with the prin- ciple just mentioned, so far a»i the drawer and indorsers of a bill are concerned. »r , When a bill is drawn on i person in a foreign coun- try or made payable there, what the drawer and in dorsers agree to do is not to pay the bill in the foreign country, but they guarantee that it will be accepted and paid by the drawee, and if he does not do so, they will, if duly notified, r'^imburse the holder at the place where they have respectively drawn or indorsed the bill. The (ontiact of the a('ce])tor, on the other hand, is to pay at the place of payment. If it is payable gener- ally, or in the place where it is accepted, then no diffi culty arisi'.-( 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 dilfefent country from that in which i. :s ii'cepted, doef the present clause apply? For instance, if a bill drawn iu Montreal is accepted in Toronto and payable in New fork, is the liitHlity of th<' 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 vhe contract Is overridden by the Act. Htirge suggests (vol. 3, p. 771) that the place of per- formance is, fictione juris, the locus contractus ; an 1 m' ..n.»;.A.--*J4 ^71. What m iiitt>riire- tatioii. Lex loci 8oluti()ni8. ilju": «iilii»S».iaKi;if5' »' .«>. itu,i„iiiiMk»JtiL.A 370 BILLS OF EXCHANGE. §71. ConHict of Ill Westlake (p. 254) that the law of the place of fulfil ment is really the law of that jurisdiction which would be the formu contractus according to true Roman prin- ciples. Byles says (p. 381), " where a contract 5b made in one country to be performed in another, the country where the contract is to be performed is deemed the country in which it was made." This, however, does not seem to be a satisfactory bolution oi the difficulty. Westlake, in discussing this clause of the Imperial Act, which is identical with our own, says, § 2*^.9, " The obligation 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 is attention called to the apparent discrepancy, or to the fact that in the Act there appears to be a clear line drawn between the law of the 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 jtresentment, 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 connection 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 sec- tion 88 may be wide enough to authorize the necessary modifications. ILLUSTRATIONS. 1. Where a note made and payable In Quebec was sued upon In Ontario, and a defence of no consideration valid in Ontario ■WTS set up, plaintiff who simply joined issue could not show that tlMs . onsideration was valid by the law of Quebec. He Bhould have replied that it was governed by Quebec law and have proved it like any other fact: Hope v. Caldwell. 21 IT. C, C. P. 241 (1871); Robertson v. Caldwell, 31 U. C. Q. B. 402 (1871). See Benham v. Lord Mornlngton, 3 C. B. 133 (1846). fpp n ; CONFLICT OF LAWS. 2. A note payable in the State of New York was signed by a firm and indorsed there by one of the partners and by two - other persons for the accommodation of the firm. It was then talien by another partner to Canada and negotiated there. Held, that it was a Canada contract: Cloyes v. Chapman, 27 11. C. C. P. 22 (1876). See also Gay v. Ralney, 89 III 221 (1878); Bell v. Packard, 69 Me. 105 (1879). 3. Defendant, domiciled in Ontario, while in New York, drew a bill in favor of plaintiff upon a person in Ontario, who refused acceptance. Defendant, by drawing the bill, in effect guaranteed Its acceptance and payment in Ontario, and In default, agreed to reimburse the holder at New York, so that his contract was governed by the law of New York: Story v. McKay, 15 O. R. 1G9 (1888); Potter v. Brown, 5 East, 124 (1804); Hicks v. Brown, 12 Johns. (N. Y.) 142 (1815); Powers v. Lynch, 3 Mass. 77 (1807); Prentiss v. Savage. 13 Mass. 20 (1816). 4. " Interpretation" in this section means " legal effect" or the liability of the parties to the bill. The liabiiity of the 'Vriwer and indorsers of a bill drawn and indorsed at Buenos Ay on a drawee in New York, and payable there, is determined ' he law of the Argentine Republic, and not by the law of New rk: London & Brazilian Bank v. Maguire, Q. R. 8 S. C. 3S8 (189i)j. 5. A resident of Halifax while In Paris made a note for the accommodation of the payee and sent it to him at Halifax, where the payee negotiated it Hold, that the liability of tiif maker was governed by the law of Nova Scotia and not by *>at of Prance: Merchants' Bat. v Stirling, 13 N. S ! K. & > t 439 Osso). 6. A bill was drawn in Ix>ndon upoi a Irawee in Legliorn who accepted. By the uw of Leghorn if an acceptor has not sufficient fund- of the uiawcT's in hie hands, and the latter fails, the acceptance m vacated. It was held that the liability of the acceptor was lo be determined by the law of Leghorn: Burrows V. Jemino, 2 Stra, 733 (1721). 7. A bill drn V' Belgium is indorsed in France. Held, that finch indorseii s to be interpreted by the law of France: Trimbey v ViKuier. 1 Biug. N. C. 151 (1834); Bradlaugh v. De- Rin, L. R. 3 C. P. 538 (1868). 8. A general acceptance given in Paris is to be interpreted by the law of France: Don v. Lippmann, 5 CI. & F. at pp. 12, 13 <1837). 371 ^71. 'I if di n 372 8 71. ; ■ ' HILLS OF EXCHANGE. : 9. If a hill drawn in one country and payable In another is dishonored, the drawer is liable according to the law of the place where the bill was issued and not where it was payable Allen V. Kemble, 6 Moore P. C. 314 (1848); Astor v. Benn, 2 Rev de Leg. 27 (1812). H 10. A bill drawn In California upon Washington Is dishon- ored. The drawer is liable for interest at the rate in California: Gibbs V. Fremont, 9 Ex. 25 (1853) i ...... HI 11. A bill drawn in England upon a person in Spain is in- dorsed in Spain. Such indorsement must be construed by the law of Spain : per Brett. L.J., in Home v. Rouquette, 3 Q. B. D. at p. 520 (1878). 12. Bills drawn and indorsed in England and payable in Milan are dishonored. The Milan holder sues the drawer and indorsers in England. They plead that the bills are Italian, and by the law of Italy plaintiff's remedy is lost because no action was taken within 15 days after protest. Held to be no defence in England: Cassanova v. Meier, 1 T. L. R. 245 (1885). 13. A man domiciled in Cape Colony, there assigned to his wife a policy on his life in an English company. He died at Cape Colony, being still domiciled there. Hold, that the law of the colony which prohibited an assignment fmm husband to wife applied, and she could not recover; Lee v. Abdy, 17 Q. B. D. 309 (188(>). 14. A note was signed and issued in Belgium. In an action by the indorsee against the maker, Belgian exports were exam- ined as to whether the note was negotiable by Belgian law. The Jury said they could not decide whether it was or not. This was held to be equivalent to a finding that the law of Belgium was not proved, and th-j note being negotiable by English law It was assumed that it would be by Belgian law, and jiidgment given in favor of plaintiff: Nouvelle Banquc de I'Union v. Aylon, 7 T. L. R. 377 (1891). 15. An inland Rnglish note payable to bearer, and overdue, was sold by Judicial sale in Norway. By Norwegian law the transferee of an overdue note in good faith takes it free from equities. Held, that the transfer was governed by Norwegian law and defendant could not set up the equities attaching to the note whi ■ he had against the person who held It at maturily: Alcock V. Smith, [1892J 1 Ch. 238. CONFLICT OF LAWS. 373 iM Provided, that where an inland bill is indorsed § 71> in a foreign country, the indorsement shall, as re- j„,,^,^. gards the payer, be interpreted according to the |;;','_^',Jj"{,i„ law of Canada. Imp. Act, s. 72 (2). ,. Before the Impeiial Act of 1882 the piimiple of this proviso was recognized in both F^nglaud and Scot land, not only as to indorsement, but also as to transfer by delivery. „, _, , ,..;., .... ..;■_ .,^ .,_.,-■,., ..,,.^. .... , , . . ."' ILLUSTRATIONS. 1. A promissory note, made and payable in England to bearer, is transferred by delivery in France where such transfer gives no title. Held, that the holder can recover: Ue la Chau- mette v. Bank of England, 2 B. & Ad. 385 (1831). . , 2. A note made and payable in Scotland in favor of a person and not to his order or b«arer, Ijeiag negotiable by the law of Scotland, was indorsed in Flngland, when such a bill was not negotiable there. Held, that it was a valid negotiation: Robert- son V. Bendekin, 1 Ross, Scotch L. C. 824 (1843). -. 3. 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 re- cover from the acceptor in England: Lebel v. Tucker, L. R. 3 Q. B. 77 (1867). (c) The duties of the holder with respect toT)"tie8<>f " holder. presentment for acceptance or payment and tlie necessity for or sufficiency of a protest or notice of dishonor, or otherwise, are determined by the law of the place where the act is done or the bill is dishonored. Imp. Act, s. 72 (3). , „ , ^. __Thi8 is one of the provisions to which the nile laid down in clause {b) ante is subject. m^ i|i| ILLUSTRATIONS. '"'''^: ,-•— ^— --;;- 1. A bill is payable In Buffalo. I'resentnient, etc., are governed 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 piesentment. T-- f^ ^^ ^■mi jipi 1^^"^ ■"^PF ■ '1f ^ ; 374 §71. i2 1"»!, K! Bill in foreign currency. Due (iat«. BILLS OF EXCHANGE. being proved or notice of dishonor, drawer and indorsers are not liable: Buffalo Bank v. Truscott; i Rob. & Jos. Dig. 495 (1838). See Howard v. Sabourin. 5 L. C. R. 45 (1854); Allen v. Mc- Naughton, 9 N. B. (4 Allen) 234 (1858). 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. R. 1 G. P. 340 (1866); Rothschild V. Currie, 1 Q. B. 43 (1841). 3. 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. Defendant la liable to plaintiff: Home v. Rouquette, 3 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 exchaiige for sight drafts at the place of payment on the day the bill is pay- able. Imp Act, s. 72(4). This is the rule applied to the case of bills dis- honored abroad: seolion 57 (3) (6). And the same rule governs where bills payable abroad in a foreign cur- rency 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 iii is payable. Imp. Act, s. 72 (5). This is one of the provisions to which the rule lai«l down in clause {h) ante, is stibject. ■ .imi^^i^Ht-^fy^^- CONFLICT OF LAWS. 876 ILLUSTRATIONS. • ' % i. A note drawn in Montreal was made payable in New Yorli. The third day of grace fell on Sunday. The note was protested on Saturday in accordance with the law of New York. Held, to be regular: Bank of America v. Copland, 4 L. N. 154 (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. H. .525 (1875). §71. Capacity. — Any person who has capacity to con- tract may incur liability as party to .a bill: section 22. Where there is a conflict of different laws on this ques- tion, the general rule, as stated ante ]»p. 120 lli:j, is that It is governed by the law of the donncile. The Act has no provision on this (juestion of coutiiet unless such a wide meaning should be given to the word " interpre- tation " in clause (h) of this section as to make it in- clude the capacity of the parties, in which case the law of the place where the contract is ma), and by giving a wide meaning to the word " inter- pretation " in that clause. Before the Act, the case of CONFLICT OF LAWS. 377 ! Lebel v. Tucker. L. K. 3 Q. 13. 77 (1867), and the remarks , ^ 7I, of Cockburn, <\J., in Rouquette v, Ovormann, L. R. 10 Q. B. HLT) (1875). apjH^ared to have somewhat shaken the ). A (jhequo nuiy be antedated or jtostdated : s;'c. 13, sub-sec. 2; Wood v. Stephenson, 1(5 U. C. (i. B. 41f> • (1858); and tht^ fact that it is pas date 1 i.( not an irr- jrularity: Hitchcock v. Edwards, (iO L. T. N. W. 036 (1889); Carpenter v. Street, 6 T. L. R. 410 (18J)0). But a cheque dated seven days after delivery is in substance a bill of exchange at seven days' date: Forster v. Mac- kreth, L. R. 2 Ex. 163 (1867). In the United States there has been a contlict as ' to whether a cheque may be made payable on a day subsequent to its date. The weight of authority is in favor of what is law under our Act, that such an instru- ment is not a cheque, and has three days' gi'ace. See IJowen V. Newell, 13 N. \. 290 (1855) : Morrison v. T5ailey, 5 Ohio St. 13 (1855); Harrison v. Nicollet Bank, 41 Minn. 488 (1889); 2 Daniel, § 1574. lint see contra, R'^ Brown, 2 Story, C. C. 502 (1843) ; Westniinster Bank V. Wheaton, 4 R. I. 30 (1856); Champion v. (iordon, 70 Penn. St. 474 (1872); Way v. Towle, 155 Mass. 37t (1892J. The Act does n(»t make it a part of the delinitiou , that the drawer should be a customer of the bank; but i if a i)erson gets goods or money on the strength of a cheque wlien he has no account he is guilty of obtain- '! ' ' ing the goods or money by fa!«e pretences, and is liable to three years' imprisonment. Crinanal Code, 1892, sec. 359; Rex v. Jackson. 3 Cau'p. 370 (1813); Reg. v. Hazel ton, L. R. 2 C. C. 134 (1874). 'W '^^'7! iU :i -lyl ' '« i;i 382 CHEQUES ON A BANK. § 72. 2. Except as otherwise provided in this part, J 7. the provisions of tliis Act applicable to a bill of as to bills exchange payable on demand apply to a cheque, cheques. Imp. Act, s. 73. The oxoeplions are, (1) that failure to present a tneque for pavm.iit within a reaf-onable time does not dischargfe the drawer, except in so far as he is damaged thereby : see. 7;i; (2) that the banli should not pay after notice of the customer's deatli: sec. 7-t; and (.'i) the pro- visions relating to crossed cheques: sees. 75 to 81, in elusive. The chief provisions of the Act relating to bills pay able ). A cheque being a bill of exchange dot^s not operate as an assignment of funds in the luinds of the bank available fnr tlie payment tliercof, and until it accepts a cheque the banii is not liable on it: sf^c. 53. The holder of an unaccepted cluMjue, consequently, cannot sue the bank upon it. except under the circumstances mentioned in section 73 (r). Under the Code it was held in Quebec that a cIk (|ue was an UKsignment of so much of the drawer's funds: .Marler v. Molsons Mank, 23 L. il J. 2!)3 (1S70». This is the law in Scotland: sec. 53, sub- see. 2, of the Imperial Act; and also in France: Nou- guier, §S 3!>2, 431. not an asmgii meiit of funds. ILI.USTRATI0N3. ■ > 1. The production of a oheque Is not even prima facie evi- donce of money lent by tbe drawer: Foster v. Frascr, Rob. & .Tos. , (i .^i.;.i.iK«ii .■ ill PROVISIONS AS TO BILLS APPLY. 383 \ Dig. 652 (1810); Nichols v. Ryan, 2 U. L. Ill (18S8); Dufresne v. ^ »70 St. Louis, M L. R. 4 S. C. 310 (1888). J— 1 ! 2. A cheque may be postdated, and is then payable on the | day of its date without grace: Wood v. Stephenson. 16 U. C. Q. ' B. 419 (1858). 3. 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, hold that the latter was not liable: Redpatb v. Kolfage. 16 U. C. Q. B. 433 (1858), 4. A cheque operates as payment until it has been dis- . honored. It may be received either as conditional or as absolute payment- Hughes v. Canada Permanent L. & S. S., 39 U. C. Q. B. 221 (1876). 5. Plaintiff deposited in defendant's bank the cheque of a third 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 dis- honored. If they had presented it the same day it would have been paid. Held, that the bank was not liable: Owens v. Quebec Bank, 30 U. C. Q. B. 382 (1870). 6. The Bank of Montreal allowed a private banker at Lon- don to piit on his cheques, "payable at Bank of Montreal, Toronto, at par." Held, that these words simply meant that there would be no charge for cashing the cheques, and not that the Bank of Montreal would pay them if there were no funds of the drawer to meet them: Rose-Belford Printing Co. v. Bank of Montreal, 12 O. R. 544 (1886). 7. Where a bank paid cheques on forged indorsements, tlie receipt given by the plaintiffs at the end of the month was, ftt most an acknowledgment that the balance was correct on the fisaumption that the cheques had been paid to the proper parties. Where the names of the payees had also been forged on an appli- cation for a loan to plaintiffs, the cheques were not payable to fictitious payees: Agricultural S. & L. Association v. Federal Bank. 6 A. R. 192 (1S81). 8. The payee of a cheque took it to the bank on which it was drawn the same day as ho 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 pnyment that evening, and the next day the clieque was pre- BPntod for payment and dinhonored. Held, that the drawer was ; I n I 884 §72. I irk I' ^ CHEQUES ()V A BANK. I. discharged from all liability thereon: Boyd v. Nasmith, 17 O. R. 40 (1888); Merohantf/ Bank v. State Bank, 10 Wall (U. S.) 647 (1870); First National Bank of Jersey City v. Leach, 52 N. Y. 350 (1873). > \ .. .- , . ; • 9. The handing by a debtor to his creditor of the cheque of a third person upon a bank in the place where the creditor lives, the maker of the cheque having funds there to meet it, is a " payment of money to a creditor" within the meaning of R. S. O. chap. 124, sec. 3, sub-sec. 1: Armstrong v. Hemstreet, 22 O. R. 336 (1892). 10. A bank was held liable for the amount of a cheque it had lost, which the drawer disputed, although the latter had been guilty of negligence in not objecting earlier when it was entered in his pass-book: Fournier v. Union Bank, 2 Stephens' Que. Dig. 99 (1873). 11. Where an account bears interest, it ceases on the amount of a cheque drawn on the account when the cheque is marked, although the money is not actually drawn out until long after: Wilson v. Banque Ville Marie, 3 L. N. 71 (1880). 12. A bank was held liable to the holder Of a marked cheque; Banque Nationals v. City Bank, 17 L. C. J. 197 (1873); even when marked good only on a future day by the president and cashier: Exchange Bank v. Banque du Peuple, M. L. R. 3 Q. B. 232 (1886). Items of claim older than a cheque cannot properly be set up in compensation against it: Dorlon v. Dorion, 5 L. N. 130 (1882). 13. A cheque should be presented the day after delivery and notice of dishonor given to charge the Endorser: Lord v. Hunter, « L. N. 310 (1883). ■ ■ * - ■ / - ■ , y ■ 14. A bank acting as ap^nt for another bank is not author- ized, in the absence of an express agreement, to cash a cheque drawn upon the principal bank, but not accepted by it: Maritime Bank v. Union Bank. M. L. R. 4 S. C. 244 (1888). '" 15. 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 deposit- ing 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 restrict! vely indorsed, and the bank so paying it was not liable: Exchange Bank v. Quebec Bank, M. L. R. fi S. C. 10 (1890). iMXSa m ILLUSTKATIONS. 16. A person receiving a cheque seven months after its date, ^ and after it was drawn, has no greater right against the drawer _!_ than the previous holder, in whose hands it was void as having been given for illegal expenditure at an election: Dion v, Bou- langer, Q. R. 4 S. C. 358 (1893). 17. The initialling of a cheque by the cashier does not amount to an acceptance. A cheque so initialled received by the defendant only a few days before the trial, when it was more than four years old, could not be used by him as a set-off to the bill of exchange on which he v«as sued: Commercial Bank v. Fleming, 1 Stevens' N. B. Dig. 294 (1872). 18. H. owed defendant $500, and induced him to indorse his (H.'s) cheque for $1,000 on 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 cheque. H. alone went into the manager's room, and on his return told defendant he had given the cheque to the manager to forward it to N. for collection. H. in fact re- tained the cheque and the same day transferred it to plaintiff for value. Held, that defendant was liable on the cheque: Arnold v. Caldwell, 1 Man. L. R. 81 (1884). 19. Where a bank certified a cheque it the request of the drawer, who afterwards altered it, maklnf, it payable to bearer instead of to order; this is a material alteration, and the bank ia not liable on the cheque to the drawer ov his assigns: Re Com- mercial Bank, Banque d'Hochelaga's Case, 10 Man. L. R. 171 (1894). . . 20. A banker paid a cheque where the amount had been raised, but in such a way that it could not be easily detected. He was held liable to the customer for the difference between the genuine and the altered cheque: Hall v. Fuller, 5 B. & C. 750 (1826). 21. Where a cheque was so carelessly drawn as 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 the loss must fall on the drawer, as it was caused by his negligence: Young V. Grote, 4 Bing. 253 (1827). 22. Filling in a blank cheque with a larger sum than that authorized is forgery: Reg. v. Wilson, 2 C. & K. 527 (1847). 23. An authority to draw cheques does not necessarily in- clude an authority to draw bills: P^orster v. Mackreth, L. R. 2 Ex. 163 (1867). 386 72. j ■; :» lii K '.« I II M'Ii.B.R A. -25 il iS; 386 CHEQUES ON A BANK. 8 72 ^*' ^ cheque Is not an eqiiltable assignment of so much of — ~ '— the drawer's funds in the hands of his banker, or of a ohose in action: Hopliinson v. Forster, L. R. 19 Eq. 74 (1874); Schroeder v. Central Bank. 34 L. T. N. S. 735 (1876). 25. A tenant proposed to assign his lease, and the landlord handed a license to sub-let to an auctioneer and house agent, with instructions to deliver it only on receipt of the rent. The agent accepted the tenant's cheque for the amount, and gave up the license. The cheque was dishonored. The agent was held liable for the amount: Pape v. Westacott, [1891 J 1 Q. B. 272. 26. Where a person pays a postdated cheque into his bank in order that the amount may be placed to the credit of his account, and the amount is so placed, the bank are holders for vahie of the cheque: Royal Bank v. Tottenham, [1894] 2 Q. B. 715. 27. A cheque is drawn in favor of a person who does not really exist, although the drawer supposes that he dees. This does not prevent the cheque being really payable to bearer, under sec. 7, sub-sec. 3, of the Bills of Exchange Act, as being payable to a fictitious or non-existing person: Clutto»i v. Atten- borough. 11895] 2 Q. B. 707. 28. Where it is admitted that a cheque was obtained without consideration, and was invalid in the hands of the immediate payee, the plaintiff must prove either that he Is a bona fide holder, or that the person from whom he received it had taken it for value without notice of defect in Its inception: Thompron v. Sioux Falls Nat. Bank, 150 U. S. 231 (1893). 29. If the drnwer of a cheque gets it accepted and then de- livers it to the payet,, the drawer is not discharged; and if the payee before delivery requests the drawer to send it to the bank and get it accepted, the rule is the same: Randolph Bank v. Hornblower. 160 Mass. 401 (1894). r V . 1" 1; ■, \ U ' Present- nn'ut of cheqw for payment. 73. Subject to the provisions of this Act — (a) Where a cheque is not presented for pay- ment within a reasonable time of its issue, and the drawer or the person on whose account it is drawn had the right at the time of such presentment, as hetwefrn him and the bank, to have the cheque ¥,..»N*»'». ., PRESENTMENT FOR PAYMENT. 887 paid, and suffers actual damage through the delay, 5^73. he is discharged to the extent of such damage, that is to r>ay, to the extent to which such drawer or person is a creditor of such hank to a larger amount than he would have heen had such cheque been paid ; Imp. Act, s. 74 (1). The provisions of the Act to which this section is subject, are those in section 40 relatinj,' to excuses for non-presentment and dela^' in presentment. Ah rejjards tlie drawer the effect of not presentiuj; a clieque for payment within a reasonabh^ time differs from that relatiuf; to otiier bills payabU? on demand. In the case of the latter the drawer as well as the in- dorsera are wholly discharpjed by the failure to present it for paynvent within a reasonable time: sec 45. This part of the Act relating to cheques does noi modify the rule as regards the iudorsers; but the present section lays down a different rule as regards the drawer, wha is only discharged to the extent to which he actually suffers damage by the delay. Chahners says, p. 247: "This section is new law. It was introduced in the Lords by Lord Bramwell to mitigate the rigor of the common law rule. At pay- able to order, since our I'arlianient refused to adopt sec- tion (j() of the Inipenal Act. which relieves a bank from respimsibility for lla^ genuineness or authorization of the indorsement on checfues drawn upon it. The practice is a com{»aratively modern one in Eng- land, and is anolliei' illustration of the elasticity of the law merchant by which a custom obtains for itself judi eial sanction or legislative recognition. From the report of Stewart v. Le<\ 1 M. & M. at p. KJl (1S28) it would appear that the ettect of crossing was not then fully settled. It is desciibt?d in Boddington v. Schlenkcr, 4 B. & Ad. 752 (1833I; 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 th<^ London clearing house, the clerks (»f (he dilferent bankers who did busi- ness there having bei-n accustomed to write across the cheques the names of their employers, so as to enable the clearing house clerks to make up the accounts. It afterwards became a common practice to cross cheques which were not inlended to go through the clearing house at all. Baron Parke held that this had notliing to do with the restriction of n«'gotiability. and formed no part of the cheque, and in no way altered its effect; ;i92 CHEQUES ON A HANK. )!ifi (J y^:. l>"t was a ptotcction and safeguaii' to the owner, as, if a banker paid it otherwise tliau Ihroii^li another- banker, the <'ircunistanee of his si. paying would be Htronjr evidence of nej^lif^ence in an action against Jiini. See also Carlou v. Ireland, 5 E. & 15. 7()5 (185«). The first Iniperial Statute recognizing (Tossings was passed in 185f). In Simmons v. Taylor, 2 C. B. N. 8. 528 (IS57), it was held that the crossing was not a material part of the cheque and a holdcc might erase it. The Act of IHn.S was passed to overcome the effect of this decision. In Smith v. Unitm Bank of Ijondon, 1 Q. B. D. JU (1875), a cheque crossed to a certain bank was stolen, and coming into the hands of a bona tide ludder, he got it cashed through his own bank. The Court held that the Act of 1858 did not affect tlie negotiability of the cheque which had b^en indcused by tlie payee. In IJob- bett V. Piukett. 1 Ex. D. 368 (187(1 ), where the indorse- ment of the payee was forged, the banker was held liable for paying it otherwise than through the banker to whom it was specially indorsed. Then came the Act of 187(1, which introduced the '* not negotiable " crossing, which has been substantially reproduced in the Act of 1882 and the present Act. Although the crossing of cheques was not recog- nized in practice or in legislation in Canada, yet the Imperial Act, making the obliteration or alteration of the crossing a felony, was co]>ied into our Forgery Act of 18(5!), and became section ,'{1 of K. S. C. chap. 105. Even the words " and company " and " banker " w^n'e retained. In the Criminal Code, 1892, by section 423 (A) (r), the forgery of a cheque renders the person found guilty liable to imprisonment for life, but obliter- ating or altering the <-rossing is not made a special " offence. The practice of cro.ssing checiues has not Ix-en adopted in the Ignited States. CHOSSED CHEQUES, 398 75. Where a cheque bears across its face an § 75. addition of — ;. nen^ croHNing (a) The word "bank" between two parallel •'««»«^- transverse lines, either with or without the words " not negotiable " ; or — (6) Two parallel transverse lines simply, either with or without the words " not negotiable " ; That addition constitutes a crossing, and the •cheque is crossed generally : 2. Where a cheque bears across its face ansiwciai addition of the name of a bank, either with or with- out the words "not negotiable," that addition constitutes a crossing, ,ind the cheque is crossed specially and to that bank. Imp. Act, s. 7G. As already stated, tliis part of tlic Act does not apply to cheques on private bankers, nor can a cheque on an int section 2 gives a remedy to the true owner against a banlv which improperly pays a crossed dieqiie ProtMtion 79. W here the bank, on which a crossed checjue luiddirttweris drawTi, in good faith and ^^ithout negligence pays dieq'i^eis it, if crosscd generally, tr a bank, or, if crossed specially, to the bank to which it in crossed, or to a bank acting as its agent for collection, the bank paying the cheque, and if the chfM^ue has come into the hands of tli-i"f a (!h<'(jue a stronji nason for objectiuf; to the croHsinj; ot cheque. a eheque. If a croHsed eheqne which haH not been made " not nejiotiable '• w lo»t or Ktoleu bcfor** il reaches the hands of the payee, and the bank payt» it in good faith and without nejfli^enoe ivt'O upon a fory^iS indorsernent, the drawer has no recour*' » (gainst the bank which has paid or the bank which huB c<'l)ected, but ' aji only look to the {,'uilty party (/r t^t/m^' subseijuent h//lder. Hee Ogden V. Benas. L. II. if i',. /' M3 (1871); Patent Kifety Gun Cottoa Co. v, Wilson. i'J i/./f. i). ^. 713 (18Wb: mt: 81. If it is lost ^r stolen after reaefwng the handu of the payee, and is p:i;d in lik(! manner, the drawer is released; but the payee, indorse**, or holder who haiM lost the !>ill, or from whom it has been stolen, is in th«* same position .is ihe drawer in ths case just mentioned. The payee of a crossed cheq';e s[>ecia!)y indorsed it to plaintitTs and posted it to them. A stransei- havinj^ obtained possession of it durinj? tnuistnissioii oliliterated the indtirseiaent to jihnntilTs. and havii^/ si^ecially in doi'sed it to himself, presented it at defendants" bank and re(] nested them to colleet it for him. They did so and handed him the money. In an action for >n ver- sion defendants were held liable for tiie amoii )f the chiMjue: Kleinwort v, Comptoir National d'h&»onipte, [l.s;)4] 2 Q. W. 157. 80. ^Vllel•e a person takes a crossed cheque Effect of I'll -111 ^ c J • I 1 11 1 iTOKsingon. which bears on it the words " not iieffotiable, hoiwidor. shall not have and shall i ot be capable of giving a bettor title to the cheqia^ tiiaii that which had the person from whom he took it. Imp. Act, s. 81. .Making a che(]ue "not negotiable" puts it on the Hamt^ footing as an overdue )ill, so that any holder lakes ' ' t! H \ % 1,. i i < ' .ItlCrti Vls,-,i'f l(.Ai*.i -^rrimtmm neiP mmm I 398 CHEQUES ON A BANK. § 80. ^^ 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 negotiable " was drawn in favor of a firm, and one partner S., in fraud of plaintiff, his co-partner, indorsed it to defendant, who got it cashed for S., defendant was held liable to the copartner, who under the partnership articles was en- titled to the cheque: Fisher v. Roberts, 6 T. L. R. 354 (18i)0). 8ee National Bank v. Kilke, [1891] 1 Q. B. 435. 81. Where a bank, in good faith and without neghgence, receives for a customer payment of a cheque crossed generally or specially to itself, and the customer has no title, or a defective title there- to, the bank shall not incur any liability to the true owner of the cheque by reason only of having received such payment. Imp. Act, s. 82. Section 70 relieves the bank on which the crossed cheque is drawn; this section, the bank which collects it. If it be indorsed " per proc." and the banker makes no inquiry as to the authority to so indorse, this may be negligence: Bissel v. Fox, 53 L. T. iN. S. 193; 1 T. L. R. 452 (1885). See Mathiessen v. London & (U)tinty Uank, 5 C. P. I>. 7 <1879); Bennett v. London & County Bank, 2 T. L. R. 705 (188(1). Where the only transaction between an indiviilual and a bank is the collection of a crossed cheque, such individual is not a customer of the bank within this sec- tion: Matthews V. Williams, 10 R. 210 (1894). I mmnmm PART IV. i 11 ,i& PROMISSORY NOTES. Only seven sections of the Act, 82 to 88, are devoted specially to promissory notes. As will be seen from (sec- tion 88, iiowever, most of the provisions of the Act in Part II. relating to bills of exchange, except those con- nected with their acceptance, apply also to promiasory notes. 82- A promissory note is an unconditional i^romis- promise in writing made by one person to another, defined.* signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum €ertain in money, to, or to the order of, a specified person, or to bearer : Imp. Act, s. 83 (1). This detinition of a promisHory note is an adaptation of that of a bill of exchange, given in section 3, with the necessary modifi(>ations. The detinition in the Civil Code, Quebec, is given in Art. 2M44 as follows: — "A promissory note is a written promise f(»f (he |>aytuent of money at all events and without any condition." The French Code de Com merce does not define a note, but, after specifying what arlich H apply to notes as well as to bills, says. Art. 188: " .\ promissory not(^ is dated. It specifies the sum to be paid, the name of tlu' person to the order of whom It is made, the time at whirh pjiyment jnusi be nmde, the value furnislu'd in money, goods, account, or other- wise." 400 i'ROMI.SSORY NOTKS. Mi; Si § 82. '''"' definition makog no clian^'*' in (lie law as to wlial is a })ronii!ssory note, except that in Ndva Scotia and New UrunHwiek notes payable otherwise than itt money, wliich, under provincial A»ts, were, in certain retjpects, placed on the same footing as promissory notes payable in money. ;ind were generally called pro- missory notes will no longei' be so considered. A note }»ayable to a s|KMifieci person and not to his order, or to bearer, was considered a promissory note before the Act but was not negotiabh'. It is n(»w negotiable: sections H and 88. "Unconditional Promise." Tlie maker of a note is' / deeaw^ to correspond with the acceptor of a bill: sec- tion ^^ A bill is an unconditional orde?', but the ac- wli»t is a writing see p. 35. ''0tlMp€tS/m to Another." While there are three parties fo a bill <>< <'xchan((e. f)ie drawer, the drawee,, and the payee, there Mfc only (w.> ncff'SKary parties to a ^omiss^iry note, t\ht^ maker and tke j/M/ee. ^llllWM "^^ -A« to what if a signature unfUf tlie Ai0, 0*^ pp. ^ and JJ9. Where a p*r8o;i signs, an h^ m Of ^tt li ^'^'pretknta^ive character. It ig often a matter (^f 4»>i|Mite wibetiier fee I* |i«'rftonalIy Jia^,!*. Hw pp. 152 9. "On Demand,'* tU -A hote is payaWe (m flemanJ which S-' /tfpn'Kwed to he go payafrle. or w which no time f«»r i«aym#*B' is expf-egsed: sections 10 and 8f A note ;^ pay;«bl<»;M ft fixed or 4i"t< rminaWe future time wbieb ^i exprr-MSi'd to be payable at a fixed period after date, or wt w at .•< ftxed period after the occurrence o7 a speci 19 !' ^KS., DEFINITION. 401 ti«'d event which is certain to happen, tliouf?h the time of ^ 82. happeuinj? is uncertain: sections 11 iin a inomissory note: Sibree v. Tripp. 15 M. A W. at p. 2f) (184(J). If an instrument is aniWKuous and it i<^ uncer- tain whether it was meant to Im' a bill or n^t^t^. the hvo years": Wheatley v. Williams, 1 M. & W. 533 (IS36). 10. " I promise to pay S. or order, 3 months after date, £100 as per memorandum of agreement"; Jury v. Barker, E. B. & E. 459 (1858). .1 • , , J li i'l u I' ' :!: '^ IM 404 I m 11 a i li §82. FKOMISSOKY NOTES. 11. "Received from A. B. £30, payable on demand"- Mc- Cubbln V. Stephen. 28 Juriat (Sc.) 618 (1850). 12. " We promise to pay one day after demand £500," is a promissory note although no payee is named. Having been de- livered to plaintiff aa a promissory note, it may be treated as if payable to bearer: Daun v. Sherwood, 11 T. L. R. 211 (1895). Bank Notes.— Bank notes are promissory notos pay- able r<> lu'iu-er on (iiTiiiUid. They may b»> isi*in' i i I Mt . When such a note is indorsed in blank it becomes a note payable to bearer: Burns v. Harper, 6 TJ. C. Q. B. 509 (1849); Wallace v. Henderson, 7 U. C. Q. B. 88 (1849); Ennis v. Hastings, 9 N. B. (4 Alien) 482 (1860); Hooper v. Williams, 2 Ex. 13 (1848); Brown v. De Win- I r //'■' 111 I. n| 406 PROMISSORY NOTES. if It u ill § 82. ton, «} ('. B. 3.% (1848); Masters v. Barctto, 8 C. B. 43:? ~~~ (1849). If indorsed specially it becomes a note payable to the indorsee: Gay v. Lander, fi (J. B. 3;it) (1848); Moses V. Lawrence County Bank, 149 U. S. 298 (1892). Collateral ^* ^ ^ote Is iiot invalid by reason only that it f^^*" '" contains also a pledge of collateral security with authority to sell or dispose thereof : Imp. Act, s. 83 (3). This sub-section is a modification of the rule in section o, that an instrument which orders anything to be done in addition to the payment of money, is not a bill. See Wise V. Charlton, 4 A. & E. 786 (18,'{(J); Pancourt v. Thorne, 9 Q. B. .'III? (1846). When a note on its face contains a statement that it is given as collateral security, it is not a promissory note: Hall v. Merrick, 40 U. C. Q. B. 566 (1877); Suther- land V. Patterson, 4 O. K. 565 (1884). The contrary has been held in Australia. In Lips- comb V. Mutton, 15 N. S. W. R. (Law) 362 (1891), it was decided that the words, ''this being collateral security to a mortgage given," etc.. did not import a condition that the promissory not(^ was only payable in the event of the mortgage not being paid. There is a contiict of authority as to whether lien notes, that is, notes which contain a statement that they have been given for an article which is to remain the property of the v(mdor until the note is paid, are nego- tiable instruments or not. In Ontario and the North- West Territories it has been held that they are not, while in Manitoba and in the Supreme Court of the Cnited States the contrary has been held. See ante p. 403. Where collateral security is given with a note, the right to such collateral goes with the note: Central Bank v. Garland, 20 O. R. 142 (1890). See Cochrane v. INLAND OR FOREIGN. 407 lioudicr, .t O. R. at p. 472 (1883). This is the law in § 92. France: Nouguier, § 715. The creditor has a right to hold the securities even after the remedy on the note is barred hy the Statute of J.imitatious. Wiley v. Ledyard, 10 Out. 1'. K. 1H2 (1^83). 4. A note which is, or on the face of it purports iniamiand to be, both made and payable within Canada, is an "'""'^'" inhind note : any other note is a foreign note. Imp. Act, 8. 83 (4). The Imperial Act uses the words '' liritish Islands." If dated abroad and payable in Canada, a note would still be an inland note if actually made or issued in Canada. On the other hand, if dated in Canada and payable there, it would be an inland note although actu- ally issued abroad. The distinction is of consequence for the purposes of protest. An inland note need not be protested except in Quebec, notice of dishonor being sufficient to bind indorsers in the other provinces: sec- tions 51, 88. To bind the indorsers of a foreign note protest is necessary in any part of (Janada: section 88, fc-s. 4. A note dated in Halifax, N.S., and payable there, is an inland note although made in France: Merchants' Bank v. Stirling, 13 N. S. (1 K. & G.) 439 (1880). 83. A promissory note is inchoate and incom- Delivery plete nnti) delivery thereof to the payee or bearer. Imp. Act, s. 84. It becomes a note on delivery to the se«:ond party to it. Delivery is the transfer of possession, actual or con structive, from one person to another: section 2(f). The nature of the delivery necessary to give effect to a note is set Oiit in section 21. See Chapman v. Cottrell, 3 H. & C. 865 (18C5). II Mill ' i 1 • 1.: - 1 H 4:';; 1, ! '1 1' .'.'.. u. 1' ■: \ r-- ■ . ~ ~ ._ f\, <■ ■ \ \i W^a <\y. .0.%^ ^0. IMAGE EVALUAT80N TEST TARGET (MT-3) t 1.0 I.I 1.25 "^IIIM ]M »" IIIIM III 2.2 2.0 1.4 6'' - 1.8 1.6 ^ 4\N ^^ %' ^' / / w Photographic Sciences Corporation €^ ^v 4? ;\ \ \ ^^\. ^:'^\ "^riS ^>^ r-L^^ 23 WEST MAIN STREET WEBSTER, N.Y 1458G (/16) 873-4503 ip ■■ 408 PROMISSORY NOTES. § 84. 84. A promissory note may be made by two 7^^ "or more makers, and they may be liable thereon Joint and "^ , sfiverai jointly, or jointly and severally, accordmg to its tenor : Imp. Aot, s. 85 (1). notes. •loint lia- Mlity in In tlie otlier Provinces This section is likely to briii}? up some interesting questions on account of the diiference betv/een the lavr of Quebec and tliat of the oilier provinces as to the na- ture of a joint contract, or joint liability, as distin- guished from that which is joint and scAeral. llndcr the French law, in force in Quebec, where several persons are jointly liable for a debt, each of them is liable for an equal fractional .part to the creditor, whatever may be their respective rights as against each other. Thus, if two are jointly bound, each is liable for on(>-half ; if there are three, each is liable for one-third, and so on; and no one of them l>y the death of his co- debtor or otherwise becomes liable for more. The ad- vantage to a creditor in having a joint contract instead of so many separate contracts is that he may sue all in one acti(m, obtaining a separate condemnation of each for his equal share. See Pothier on 'Jbligations, No. 165; 17 l^aureut, Nos. 274, 280. An obligation is pre- sumed to be joint, unless expressly declared to be joint and several. This rule does not apply to commercial transact i(»ns. where the i)vesuniption is in favor of the liability being joint and several: C. C. Art. 1103. Under English law, on the other hand, each joint debtor is liable to the creditor for the whole. If one dies, his representatives are not liable for any part to the creditor. Tf the creditor does not sue all who are alive and in the country, those who are sued might, under a plea in abatement, under the old system of pleading, or by a motion under the Judicature Act, have proceedings stayed, until the living joint debtors who are in the country are made parties. A judgment taken agains*: some of *^he joint debtors frees the others from mmmm JOINT AND SEVERAL. 409 §84. all liability ; Kin{? v, Hoare. V,', M. & W. 404 (1844) : Kendall v. Hamilton, 4 Ai>p. Chh. 504 (IS70); Hinnniond V. Schotield, [1«)1] 1 Q. B. 45;{: Hoarc v. NiblHt, [181)1] 1 Q. li. 781; Toronto v. Maclaren, 14 Ont. P. E. 89 (1890j; Leake on Contracts, p. 940. If a note is on its face "joint," and not joint and several, the law would dift'er as above, according to whether it is a Quebec luAv or not. The note would be in- terpreted according to the law of the place where it was made: section 71 ib); that is, where it was deliveri-d to the payee or bearer: section 83. Under English law, a note signed by several makers. Joint not* not partners, which reads ** we promise,'" is joint: Jiyles, p. 8; Chalmers, p. 200; I Daniel, i; 94; Randolph, § 149; Barnett v. Juday, 38 Ind. 8t5 (1871). In (Jucbec, since the abolition of the distinction between traders and non- traders with regard to negotiable notes, it was generally c(msidered that every negotiable note is a commer(Mal rransacti(m; but in Malhiot v. Tessier. 2 K. L. ii'^o (1870>, it was held that where two farmers signed such a note they were liable jointly, and not jointly and severally. The report of the case is so meagre that it does not appear whether it was a negotiiible note, but tbe pro- bability is that it was. In IN irault v. Berg<'vin, 14 K. L. 604 (1880), the liability on such a note was held to be joint and several. A " joint and stiveral " liability is substantially \ho same in English and French law. Each of the debtors' is liable for the full amount, and on his death his lia- bility d('S<'ends lo his repi-eseutalives. Taymenl by one discharges the liability of the others to the creditor. The debtor who has paid may havr his right of contri- bution against his co-debtors. .\ judgment against one maker is no bar to proceeding agaiust the others: Re Davison, 13 Q. B. I), at p. 53 (1884). If one or more are sued but not all, those who are sued have no right to delay the plaintiff by having the others called in: Dur^cher v. Lapalme, M. L. R. 1 S. V Joint and sovenil hkbtlity. i 11 i i ' i \ 1 ■ .iWI^»ifB^|P(J^5P^|M?.HH^"U!| "'!(w^BI!lTf^!J)5(^^Ji>WP''i»lSHBfS'w*r: i^ '^■~ 'M- 410 PUOMISSORY NOTES. § 84. ^^* (1885); Block v. Lawiv-uce, ibid. 2 8. C. 279 (188(»). _ ^-Contra, Beaulieu v. Demors, 5 R. L. 244 (1874); Dtniicm V. Harvey, Q. K. 5 8. 0. 1 (1893). Where one of two joint makers of a note signs for the ai'comniodation of tlie other, their rehition is that (tf principal and surety, and the pret'cription of five years does not apply: ('ulleu v. liryson, Q. K. 2 S. C. ;{G (1892). As to the possible effect of section 8 of the amending Act of 1891 upon this point, see the notes to that section. muXr ^* Where a note runs " 1 promise to pay," and is signed by two or more persons, it is deemed to be their joint and several note, - Imp. Act, a. 85 (2). This has long been recognized as law in England: March v. Ward, Peake, 177 (171)2); Clark v. Blackstock, Holt N. P. 474 (181G). And in the United States: Mon- son V. !)rakely, 40 Conn. 552 (1873); Heramenway v. Htono, 7 Mass. 58 (1810); Partridge v. Colby, 19 Barb. (N. Y.) 248 (1855); Ely v. (Mute. 19 Hun (N. Y.) 35 (1879). As also in Ontario: Oeighton v. Fretz, 2(5 V. (1 C). B. 627 (1867). It remains to be seen whether the enuncintion of tiie above rule, taken in connection with section 8 of the Act of 1891, will be held to have modified the law of Quebec,, or a no(e which reads " we promise." Note pay able nti 85. Where a note payable on demand has been umami. indorsed, it must be presented for pqynient within a reasonable time of the indorsement : if it is not so presented, the indorser is discharged ; if hew- ever, with the assent of the indorser, it has been delivered as a collateral or continuing secuiity it need not be presented for payment so long ae it is held as such security : *i I Iss^s "^PPWPfWf^ipPiiPiiF ^PVfRfiiiPPiiP^ PAYAULK ON DEMAND. 411 2. In determining what is a reasonable time, § 85. regard shall be had to the nature of the instrument, ~ ,1 /• i 1 TIC CI Rpiison- tiie usage oi tru-de, and the tacts of the particular aw& time, case : Imp. Act, s. 86 (1) (2). I : 1 The last clause of the first siib-sectiou is not In the Imperial Act. which ends with the word " discharged," Thv >d part, however, agrees with the law as laid down lU the English cases. A note is payable on demand which is expressed to be payable on demand, or on presentation, or in which no time for payment is expressed, or which has been indorsed when overdue: sections 10 and 88. Section 45, s-s. 2 (6), contains similar provisions ;i.s to presenting a bill for payment. As to what is " a rea- sonablo time," see ante, pi). 2;}2, 234. " A promissory note payable on deumnd is often intended to be a continuing security; it is (juite unlike a cheque which is intended to be presented speedily " : per Parke, B., in Brooks v. Mitchell, 9 M. & W. at p. 15 (1841). See also Cripps v. Davis, 12 M. & W. 1(55 (184:5); Bartrum v. Caddy, 1 1*. & I). 207 (18;?8); Leith Banking Co. V. Walker, 3 4 Sess. Cas. 332 (183t)); Morgan v. i;nite(? States, 113 U. S. 501 (1884). Where a demand note is payable with interest, this has been considered as an indication that an early pre- sentment was not contemplated: Thorne v. Scovil, 4 N. B. (2 Kerr) 557 (1844); (Jommercial Bank v. Allan, 10 Man. 330 (1894); Vreeland v. Hyde, 2 Hall (N. Y.) 463 (182!>); Seaver v. Lincoln, 21 Pick. (Mass.) 2G7 (1838); Merritt v. Todd, 23 N. Y. 28 (18G1); Parker v. Stroud, :{i Hun (N. Y.) 578 (1884). In the ('bartered TIercantile Bank v. Dickson, L. II. 3 P. G. 574 (1871), it was held that where a demand note was indorsed Feb. IGth, but the payment of whi'>h was not contemplated at any immediate or specific date, but ' i s v: ■^u 412 PhOMISSORY NOTES. § 85. ^'^^ intended as a continuing secarity, the indorsor was not discliarged by tlie fact that it was not presented to the payee until December 14tli. Defects without notice. In Dandurand v. Roiilier. .Ti L, C. J. 167 where defendant indorsed a demand note Marcli 28th, 1885, for tlie maker, a friend whom he knew to be banlc- rupt, and the note was not protested until August 28th, 1888, the iudorser was not discharged, as he was not injured but rather benefited by the delay, |50 having been paid September 27tb, 1887, and the maker's cir- cumstancef* having improved in the meantime. In thi** ease interest was allowed only from dem.and. In Merchants' Bank v. Whitlield, 2 Dorion, 157, (1881), where the directors -of a joint stock company indorsed a note of the company, vvhicli was given to the bank as a continuing security, and it was held for twenty-seven months before payment was demanded, it was held that the indorsers Avere not discharged. 3. Where a note payable on demand is nego- tiated, it is not deemed to be overdue, for the pur- pose of affecting the holder with defects of title of which he had no notice, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue. Imp. Act, s. 86 (3). In this respect a note differs from a bill payable on section, see Brooks v. Mitchell, J) M. & \V. 15 (1841) ; For illustrations of the rule laid down in this sub- s M. & W. 15 (1811) ; (Jlasscock v. Balls, 21 Q. B. D. al p. 15 (1SM!>); Wethey V. Andrews, 3 Hill (N. Y.) 582 (18-i2); Losee v. Dunkitis, 7 J(.hns (N. Y.) 70 (1810); Herrick v. Wolverton, 41 N. Y. 581 (1870); Morey v. Wak<'field, 41 Vt. 24 (1868); Rhodea v. Seymour. 'M Conn. 6 (18(i!»l. See also the cases in the last paragraph under the preceding subsection. ,2ittlHWKfi4 PRESEN'JMENT FOR PAYMENT. 41 :? A promissory note payable on demand with interest §85* is a present debt, and "at maturity'' as Hoon as fjiven. A written renunoialion tliereof by tlie liolder, in order to meet the requirements of section 61, must be an actual renunciation; and a paper written at the dicta- tion of a dyinj? man, that such note then mislaid should be destroyed when found, is not sullicient: Re (ieorge, Francis v. IJruce, 44 Ch. 1). 627 (1890). 86. Where a promissory note is in the body of it made payable at a particular place, it must he presented for payment at that place. But the maker is not discharged by the omission to present the note for payment on the day that it matures. But if any suit or action is instituted thereon against him before presentation, the costs thereof shall be in the discretion of the court. If nop^ce of payment is speciiied in the body of the note presentment for payment is not necessary in order to render the maker liable : The corresponding section in the Imperial Act, 87 (1), reads as follows: — "'Where a promissory note is in the body of it made payable fit a particular place, it must be presented for payment at that place in order to render the maker liable. In any other case present- ment for payment is not necessary in order to render the maker liable." The clause was put into its present form in the Senate. The rule is now substantially the same as tliat re- garding the jiresentment for payment of a bill of ex- <'hauge. See section 45, s-s. 2 ((/), and section 52. In Prince Edward Island and Ontario, before the Act, a promissory note, like a bill of exchange in Eng- land, required to be presented at the place indicated, only in case the words " and not otherwise or else- where " wei-e added: K. S. C. c. 123, ss. 9, 16. In Can- Prespnt- iiient of note far payment. if It i II :| r.i V h nn ^p* 414 PROMISSORr NOTES. § 86. ^^^ these words are not necessary in either bills or notes to require tlieir presentment at the place named in the bill or note. :1^ i' :i; ILLUSTRATIONS. 1. In an action against the maker a plea of want of present- ment Is of no avail, unless he allege and prove he had funds at the place named to meet it: Mount v. Dunn, 4 L. C. R. 348 (1854); Rice V. Bowker, 3 L. C. R. 305 (1853). See O'Brien v. Stevenson, 15 L. C. R. 2fi5 (1865). 2. Whore action was brought on a note payable generally, five months after its maturity without demand of payment, and defendant pleaded and proved that he had money ready i pay it at maturity, plaintiff was refused costs: Mineault v. Lajole, 9 R. L. 382 (1877). 3. Where action was brought on a demand note without pre- senting it for payment, and defentlant paid the money Into Court, plaintiff was condemned to pay costs: Archer v. Lortie, 3 Q. L. R. 159 (1877); Dorlon v. Benoit, 2 L. N. 171 (18'(9); Lessard v. Genest, Ramsay A. C. 86 (1883). 4. The demand of payment of a note must be accompanied by a tender of it to the maker. Such demand of payment can- not be made publicly at the church door, immediately after divine service, either on a Sunday or a feafet of obligation: De la Chevrotiere v. Guilmet. 9 L. N. 412 (1886). 5. Where a note was, in the body of it, made payable at a particular place, a presentment there after six years had elapsed, and just before action, was held to be sufficient to charge the maker: Miller v. Dodge, 23 N. S. 191 (1891). fi. A promissory noi;e made payable at a particular place must be presented there in order to render the maker liable: Pigeon v. Moore, 23 N. S. 250 (1892) ; Clayton v. McDonald, 25 N. a. 446 (1893); Warner v. Simon-Kaye, 31 N. S. 340 (1894). 7. A note payable " to the order of S. Cunard & Co. at Hali- fax" is payable at a particular place, and comes under the above rule: Cunard v. Simon-Kaye, 31 N. S. 344 (1894). 8. A note not payable at any particular place need not be presented for payment, as against the maker: Grant v. Heather. 2 Man. L. R. 201 (1885); Price v. Mitchell, 4 Camp. 200 (1815); Exon V. Russell, 4 M. & S. 507 (1816); Ramchum V. Luchmee- chund, 9 Moore P. C. at p. 70 (1854). PUESENTMENT FOR PAYMENT. 415 9. Where two Joint makers stand to the knowledge of the S Qf\ holder in the relation to each other of principal debtor and L surety, the latter is not released for a want of presentment and notice of dishonor: Gardner v. Shaver, (Man.) 13 C. L. T. 287 (1893). 10. The holder of a demand note may sue the maker without proving presentment or demaud: Norton v. Ellam, 2 M. & W. at p. 464 (1837); Dodd v. Gill, 3 F. & F. 261 (1862). 11. Tn the case of a note payable on demand, the Statute of Limitations runs in favor of the maker from the date of the note: Norton v. Ellam, 2 M. & W. 461 (1837). 12. When a note is made payable at a particular placs, pre- sentment at that place is necessary to render the maker liable: Spindler v. Grellett, 1 Ex. 384 (1847); Sands v. Clarke, 8 C. B. 751 (1849); Vander Donckt v. Thellusson, 8 C. B. 812 (1849). If the maker had funds at the place of payment on the day of maturity, and they were left there and finally lost thron^'h (lie neglect of the holder to present the note, fiH, for instannp, by the failure of a bank, the maker would be discharj^ed, at least to the extent of the loss. The last clause would appear not to give the Court any diseretio'x as to costs if the note was payable gener ally; but tae Courts have, as a rule, a discretion as to costs in general. In presenting a note for payment it should be pro- duced and exhibited; but if it is held at the place of payment on the day it matures, no formal ])resentm(mt is necessary. See ante, p. 29r; also FuUerton v. J?ank of IT. W., 1 Peters (U.S.) 604 (1828); Bank of U. S. v. Car- neal. 2 ibid. 548 (1829); Chicopee Bank v. Philadelphia Bank, S Wall. (U.S.) 041 (18(19); Wo(.dbridge v. Bi-igham, 13 Mass. 556 (1816); Bank of Syracuse v. Hollister, 17 N. Y. 46 (1858). 2. Presentment for payment is necessary inLiah.iity order to render the indorser of a note liable : Imp. '^ ""'""*"" Act, 8. 87 (2). 11 1 ' : i 1 1 . ■ ''t- ■ I il . n M ; rf.l . •^pnm^ I i" t 1! i Hi li'i i 410 PIUJMISSOUY NOTES. Placf ff)r present- ment. § 86. ^^^' ^l*P rules ns to prcsoiitment for payniont, sot soction 45, which applies to i>rnmi8.sory notes with the m^lTfor inoditieations specified in secticni SS. The provisions of pajintiit. section 4(5, as to excuses for the delay in nialiinj; pre- sentment, or j»resentmeut being dispensed with entirely, as well as those reli'.ting to notic' of dishonor, also ajtply to notes with the necessary modifications. See the notes and illustrations under (hew^ sections. Also Hiddall v. (Jibsc.n, 17 U. C. Q. IJ. 98 (1858); Saun- derson v. Judge, 2 H. Bl. 510 (1795); Roche v. Campbell, 3 Camp. 247 (1812); Britt v. Lawson, 15 Ilun (N. Y.) 123 (1878). 3. Where a note is in the body of it made payable at a particuhir phice, 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 presentment to the maker elsewhere, if suUicient in other respects, shall also suffice. Imp. Act, s. 87 (3). Where tlie place of payment is in the body of the note it is part of the contract: O'lJrien v. Stevenson, 15 L. C. R. 265 (18<)5) ; Howes v. Bowes, IC East, 112 (1812). Where it is merely indicated in a foot note or some other part of the note, i( lias been a disputed point whetb'M' it is part of the contract. The aftirmative has been held both in England and the United States. See Treoothick V. Edwin, 1 Stark. 4fi8 (1816); Jones v. Fales, 4 Mass. 244 (1808); Piatt v. Smith, 14 Johns. (N. Y.) 368 (1817); Woodworth v. Bank of America, 19 Johns. .39i (1822V, r>ew<>y V. Reed, 40 Barb. (N. Y.) 17 (186.3); Contra. Cu- nard v. Tozer, 4 N. B. (2 Kerr) 365 (1844); Price v. Mit- chell. 4 Camp. 200 (1815); Exon v. Russell, 4 M. & S. 505 (1816) ; Masters v. Baretto, 8 C. B. 433 (1849) ; Hill v. (^ooiey, 46 Penn. St. 259 (186.3). M I ■••m ' T.IAniLITY OF MAKER. The Act rot'Ojiiiizt'S such a menioratidmii. hut ap parently not as part of the contract, as prt'scntnicnt at the place indicated is made optional. 417 86. 87. '^I'he maker of a promissory note, by mak- Liability of maker.. ing it — (a) Engages that he will pay it according to its tenor ; (b) Is precladed from denying to a holder in i"'^t"pi"'f , . f , "^ maker. dne course the existence of the payee and his then capacity to indorse. Imp. Act, s. 88 (1) (2). The [losilioh of the maker of a note is Kimil:!i 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 dis- Iienor and notice, unless the lattei* is waived or dis pensed with. For the liabilities of an acceptor, see sec tious 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, arid thi' note is that of some prin cipal or corporation. It is imposi ibh,' to reconcile the condicting decisions on this point, as regards the ac ceptors of bills and the makers of notes. It may be said generally that the acceptor of a bill has sometimes b(H'n liable on an accept;uice expressed in woi'ds which, if in a note, would not have bound him personally. See sec- tion 17 and the notes and illustrations thereunder. Also Kerr v. Parsons. 11 F. C. C. P. 513 (18(>1); Corporation of Toronto Township v. McBride, 20 U C. Q. P.. 13 (ISt'.K); Archibald v. Jirown, 24 L. (\ J. 85 (1879). (b) See the similar rule as to the acceptor of a bill: section 54, s-s. 3. A "holder in dne course" has been defined in sec- tion 20. The reason for this estoppel is that the maker by issuing a note in this form has in effect made these representations to the jierson who becomes such t\ m'l.b.e.a.— 27 It r ' i. 418 PROMISSORY NOTES. hi- I; § 87. ^*^'^'^''» fti'd after it is acted upon cannot be allowed to claim the contrary Bee Perkins v. Beckett, 29 U. C. C. P. 395 (1^7«); Taylor v. Croker, 4 Esp. 1S7 (1803); Draj-tou v. Dale, 2 P. Ik C. 293 (1H23); Smith v. Marwack, 6 C. B. m\ (1848); Lane v. Krekle. 23 Iowa, 404 (1807); Wolke V. Kuhn.', 109 Ind. 313 (188(5). tioi\ of Part I r. to notes. Corre- sponding t«nuB. What pro- VlsioUH (1(1 not ap|)l.y. As to foreign notes. 88. iSubject to the provisions in this part, and except as by this section provided, the provisions of this Act relating to bills of exchange apply, with the necessary modifications, 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 drawer's order : 3. The following provisions as to bills do not apply to notes, namely, provisions relating to — (a) Presentment for acceptance ; [h) Acceptance ; (c) Acceptance supra protest ; {d) Bills in a set : Imp. Act, s. 89 (1) (2) (3). The following sections in Part II. of the Act do not apply to promissory notes: — 3, 4, 5, 6, 15, 17, 18, 19, 30, 8-ss. 3,39, 40, 41. 42. 43, 44, 53,554, s-ss. (1) (2), 04, 05, 06, 07 and 70. 4. Where a foreign note is dishonored, proti;st thereof is unnecessary, except for the preservati^ >n of the liabilities of indorsers. Imp. Act, s. 89 (4). The exception in this sub-section is not in thf Im- perial; Act. lis etfect is to plaw foreign notes on the same footing as foreign bills: section 51, s-s. 2. ^!iiiP^PP"|i ■■■^■"""Tli PART V, SUPPLEMENTARY. 89. A thing is deemed to be done in goodCfHid iaith within the meaning of this Act, where it is in "*' fact done honestly whether it is done negligently or not. Imp. Act, s. 90. The expression " in good faith " is used in section 2D with reference to a holder in due course acquiring a bill; in section 51), with reference to paynient 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 al- ways presumed; he who alleges bad faith must prove it ": C. C. Art. 2202. See section 80 as to the shifting of the onus of proof once fraud is proved. This section was c jsidered in England recently in Origin of the case of Tatam v. Haslar, 23 Q. B. D. .'U5 (188!)). ''"=''"" Denman, J., there says that it is obviously founded upon the distinction which is pointed out by Lord Blackburn in Jones v. Gord«,n, 2 App. Cas. at p. 629 (1877), between honest blundering or carelessness and a dishonest re- fraining 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 show that there was careless- ness, negligence or foolishness in not suspecting that the bill was wrong when there wei-e circumstances that might have led a man to suspect that. It is neces.sary II i > f -5 if i i : I? ' '1 IMP Ml i' rt 420 SUPPLEMENTAllY PROVISIONS. I-;- i ! (' i i« ■11' § 89 ^^ sliow that tlie persou who gave value for the bill, whether the value Riven be great or iiiiiall, was affected with the notice that there was something wronj;; about it when he took it. It is not necessary that he should have notice of what the particular wrong was. Evi- dence of carelessness or blindness may be good evidence lipon the real (juestion, which is, whether he did know that there was something wrong in it. If he was hon- estly blundering and careless, and so took a bill or note when he ought not to have taken it, still he would be entith'd to recover. But if the facts and circumstances are such that the jury, or whoever has to try the ques- tion, conies to the c(mclusiou that he was not honestly blundering and careless, but that he must have had a suspicion that there was something wrong, and that he refrained on this account from asking questions or mak- ing further inijuiry — I think that is dishonesty. Bad faith lu i(^ Oojuersall, 1 Gh. D. at p. 146 (1875), it is said "'"Ij" **"*" that *' negligence or cart?lessness on the part of the gence. liokler of a bill, is not of itself suflicient to deprive him of his remedies for procuring its payment. But negli- I gence or carelessness, when considered in connection with the surrounding circumstances, may be evidence of mala tides." In Swan v. North Britis?i Australasian Co., 2 H. & C. 184 (186.'?), Byles, J., says: " The negligence of (he holder makes no ditference in his title. However gross the holder's negligence, if it stop t^ort of fraud, he has a title." The same rule was laid down in Good- man V. Harvey, 4 A. & E. at p. 87(J (183G), going some- what farther in this dire -tion than Crook v. .Jadis, 5 B. & Ad. 909 (1S34), which was a partial departure from thi ruK. laid down in Gill v. (Jubitt, 3 " k C. 4(J(i (1824), when the jury was told that the question was, whether the holder of the bill took it under circumstancee that . ought, to have excited flie suspicion of a prudent and , careful man. This last case was disapproved of in z Bank of Bengal v. McLeod, 5 Moore's Indian Ai)peal8, 1 (1849), and Raphael v. Bank of England, 17 C. B. 161 -». s'.-fwr ?«r!»W!,s««»« GOOD FAITH. 421 (1855); and in London and County Bank v. Groome, 8 § 39. 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 eases and adopted by the Act. Some American authoritie common in Enj^^land ixs in Canada. The powers of a no tary referred to are those relating to presentment, pro test, and notice of dishonor in sections 41- 45, 49, 51, 64, 66 and 67. Notaries. — In England, notaries are appointed by the Archbishop of (Canterbury, acting as tlie Court of Faculties. In Canada, they are provincial officers. In most of th<' ))rovinces t]u'"e are statutes regulating their appointment, duties and powers. See K. S. O. c. 153; K. S. Q. Arts. :i604-3957; C. S. N. B. c. 28; R. S. Man. c. 108; Rev. Ord. N. W. T. c. 40; Cons. Acts B. C. c. 89. !n the provinces, other than Quebec, they are usually barristers, solicitors or attorneys. In Quebec the notarial is a distinct profession, and incompatible with that of advocate or attorney. No- taries are the regular conveyancers, and the more im- portant documents must be executed before them "en minute," the notary keejting the original, and giving out certified copies; his certificate ahme making full j)roof of the execution, in all courts, and for registra- tion, etc. Certain less formal documents may be «'xe- ' ral of the justice of the peace, althou. 15-17. '• Province" here includes the Territories: R. S. G. c. 1, s. 7 (13). The other Imperial Acts relatinj;^ to bills and notes in force in the various provinces are not formally re- pealed, except such as were made part of the law of Que- bec by Article 2340 of the Civil Code, which is repealed as forminf? part of the second schedule, except in so far as it relates to evidence. It is doubtful if there are any provisions in them not covered by the Act, in which case they would be jjractically repealed by the new enact- ment. ': ■ -; ^ CONSTRl TION. 433 96. Where any Act or document refers to any § 96. enactment repealed by this Act, the Act or tlocii-^^^^~ ment shall be construed and shall operate as if itt''"»with . . other referred to the corresponding provisions of this Act«. etc. Act. Imp. Act, s. 98. 97. This Act shall come into force on the first c;'>n> mence- day of September next. >»tnt of V Act. TliH Act was assented to on the 10th of Ma>, 1890, but did not come into force until the 1st of September of that year. / The Imperial Act, like the Canadian, is not retro- spective, but it has been held to be largely dfclaratory of the prior law. See ai^te, p. 21. As may be seen from the foregojnf? pages, the law has varied considerably in « the different provinces, so that the Canadian Act cannot be received as declaratory in Canada t(» the sanu' extent as in England. In harmony with this principle, it was held in Fyfe v. Royce, 21 1{. L. 4 (18J)l), that where a p(M'son put his ■name on the back of a note as an ''aval " in August, 1890, he was liable without notice of dishonor, although the note matured after the 1st of September, and that section 5G of the Act did not appl\' to such a note. A distinction is to be observed on this point be- tween matters affecting the rights of parties, and those relating to procedure and analogous subjects. Statute* relating to the latter are always retrospective, unless the contrary is declared. Thus, a bill or note issued before the 1st of Sei^tember, 1890, falling due after that date and dishonored, would be governed by tho" present Act as to the form of protest, notice, etc. The new Act would also govern as to the due date, if, for example, such a bill or note should fall due on a day made a holi- day by the Act, and not a holiday under the old law. See- M'UB.K.A.— 2.S ni--t 434 SUPPLEMENTARY PROVISIONS. § 97. Wright V. Hall, 6 H. & N. 227 (1860); Kimbray \ Draper, L. R. 3 Q. B. at p. 163 (1868); Re Joseph Suohe & Co., 1 Ch. D. at p. 50 (1875); Gardner v, Lucas, 3 Apu. Gas. ar p. 603 (1878); Singer v. Hasson, 50 L. T. N. S. 327 (1884); Atty. Gen. v. Theobald, 24 Q. B. D. at p. 560 (1890). i 1 f N AMENDING ACT OF 1891. 54-55 VICT. Cap. 17. An Act to amend '* r/ze Bills of Exchange Act, 1890:' :^;^: . ; ; „ : [AsSENTED TO 28tH AuGUST, 1891.] XT ER MAJESTY, by and with the advice and -"--^ consent of the Senate and House of Com- mons of Canada, enacts as follows: — 1. The paragraph lettered (a) of sub-section 53 v. -3.s. one of section eleven of ''The Bills of Exchange^^n^"l''' Act, 1890,'' is hereby repealed and the following''"'''^*^■ 8ubstituted in lieu thereof : — (a) At sight, or at a fixed period after date or sight. '■ 2. Section twelve is amended by "isertingHeotumi2 after the word "payable " in the third line thereof the words "at sight, or." 3. Section eighteen is amended by "^serting secUoins after the word " payable" in the first line of sub-"'*'""' section two thereof the words " at sight, or." 4. Section twei.ty-four is amended l>y a^".« 43G Provision att to forged in- dorse- mtints. Section 41 amended. r -■ '^ Section 61 amended. AMENDP.O ACT OF 1891 "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 delivery ; and any indorser who has made such payment snail have the like rights and recourse against any antecedent indorser subsequent to the forged indorsement, — the whole, however, subject to the provisions and limitations contained m the last preceding sub-section." Section 40 5. Scctiou forty is amended by inserting in amended. i p c i the second I me thereof, alter the word "payable, the words '* at sight, or." ' . ^ (j The paragraph lettered (a) of sub-section two of section forty-one, is amended by striking out the words " or bankrupt " in the first line thereof.. 7. Section fifty-one is amended by striking out the words " becomes bankrupt or" in the first line of sub-section five thereof. , The forepfoiiij; auicndnientH have all been embodied in the sect ions to which they respectively refer, and their effect has been there considered. Common 8. '-i^e rulcs of the common law of England, Kngiand including the law merchant, save in so far as they !!IRWW"^ COMMON LAW AND LAW MERCHANT. 437 are inconsistent witli the express provisions of tlio § 9. said Act, as hereby amended, shall apply, and^^^^^i^^^. shall be taken and held to have applied from the "''';';•'"'"'■ date on which the said Act came into force, to'^w'v- bills of exchange, promissory notes and cheques. Imp. Act, s. 97 (2). This clause was iu the bilJ as it passed ihc House of Commous in 1890, but was struck out in tlie Heuate. See Senate Debates, 1890, p. 467. As to wliat would have been the effect of the oniissioit of any uniform rule for cases unprovided for b.v the Act, see ante. pp. 5, 17. it will be observed that the present section is made retro- spective. The expression " common law "' is us^ed in different senses. In this section it is probably used in the compre- ODinmou lllW hensive sense in whi^h it was spoken of by Baron Parke riefimd. in the House of Lords in Mirehouse v. Henneil, 8 Biug. 515 (1832), when he said: — "Our common law system consists in applying to new combinations of circum- stances those rules of law which we derive from legal principles and judicial preceply Ihose rules, when they are not plainly iiii reasonable or inconvenient, to all cases wl ich 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 apj)lied, because we think that the rules are not as ('onvenient or reasonal)le as we ourselves could have devised." The " law merchant " is another expression that 1,^^ may not be capable of an exact definition, ft ^^i'' 'i"'fjH|^"'' always, as its nam<' implies, recognized *lie euHt(«us and usages of merchanis. Ind«'ed, it has been based upon them. " The law merchant is somt^times spoken of us a fixed body of law, forming part of the common law, and I' I I 1 ' I { ■•wr 438 AMEXDINQ ACT OF 1891. % r -.' §8. Legal Imperial Act, B, 97 (2). as it were, coeval with it. But as a matter of legal his- tory, this view is altogether incorrect. The law mer- chant 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 Cockourn, C.J.. in Goodwin v. Robarts, L, R. 10 Ex., at p. 346 (1875). " When a general usage has been judi(M- ally ascertained and established, it becomes a part of the law merchiint, which courts of justice are bound to know and recognize": per Lord Campbell in Brandao V. Barnett, 13 01. & P. at p. 805 (184G). The existence, nature and scope of a given usage is a question of fact. A [)articular or local usage must be proved eadi tiuK^ until it becomes so notoricjs that the courts will not rojuire further j)roof of it, but will take judicial notice of it: per Brett, M.R., in Ex parte Tur- quani, 14 i}. B. I), at p. 645 (1885). For examples of the application of this i)rinciple in the United States, see Dowen v. Newell, 1.3 N. Y. 200 (1855), and Champion v. Gordon, 70 Penn. St. 476 (1872), where proved local usjiges as to cheques payable at a future day having no days of grace i-eceived judicial sanction. See akw the reniai'ks of Davidson, J., in La Banque iTationale v. Mer- chants" Bank, M. L. R. 7 S. C. 336 (1891), as to proof of the custom of the Montreal clearing house i*egarding uu accepted cheques. - The correspcmding section of the Imperial Act has been considered in the <'ase of Re Gillespie, Ex jKirte Robarts, 16 Q. B. I). 702 (1885). It was there held that section 57 of the Act was not exliaustiv«! as to the dam ages the holder 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 of the kind which I have spoken of Btill exists." In the same case, in appeal, 18 Q. B. D. I : ill COMMON LAW AND LAW MERCHANT. 439 at p. 292, Lindley, L.J.. siiys, '* section 97 preserves the § 8. former liability of the 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 Co npari is 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 Eng land 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 impor- tant influence in harmciiizing the decisions in the various provinces, when the provincial laws differ on .ubjects directly or indirectly affecting bills and notes, some of which have been considered in the preceding pages, especially under sections 22 and 59. If m^% 56 VICTORIA, CHAPTER 30. if An Act to amend the law relating to Holidays. [AssENTEu TO 1st April, 1893.] TTER MAJESTY, by and with the advice and consent of the Senate and House of Com- mons of Canada, enacts as follows: — 1. The Annunciation, Corpus Christi and the Festival of St. Peter and St. Paul shall not hence- forth be holidays ; and paragraph (26) of section seven of The Interpretation Act, and paragraph [b) of section fourteen of The Bills of Exchange Act, 1890, are hereby amended by striking out thereof the names of the said holidays. m ll 57-58 VICTORIA, CHAPTER 55. . An Act further to amend the law relating to Holidays. [AssENTKD TO 28hd Jdly, 1894.] TTER MAJESTY, by and with the advice and consent of the Senate and House of Com- mons of Canada, enacts as follows: — '■ 2. Sub-section two of section fourteen of The Bills of Exchange Act, 1890, is hereby amended by adding to the days to be observed in the several provinces aa legal holidays or non-juridical days, the first Monday in September, to be designated '* Labor Day." OTHER NEGOTIABLE INSTRUMENTS f 1 1 WM-' The Bills of Exchange Act treats only of bills, cheques and notes. The single exception to this is sec- tion 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 by commercial usage or by legislation are gradually acquiring the full measure of negotiability which belongs to bills and notes. This process is very clearly described in the remarks cf Cockburn, C.J., in the case of (loodwin v. Robarts, quoted in the Introduc tion, to which the reader is referred. A negotiable instrument, strictly so called, is one representing 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, i>. 404. The debentures authorized by ciuipter 31, R. S. C, are also negotiabh^ in the •'uU sense of the terra. 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 negotiable in the English money market, if consistent with what appeared om their face, and not simply whether they were made payable to order or bearer, or ii mmmnm i| lii: I, _' %l\\ i i. 442 BILLS OF EXCHANGE ACT, 189.\ wh(!tlier they were considered to be negotiable in foreign countries. See Glyn v. Baker, 13 East, 509 (1811)— East India Bonds; Gorgier v. Mieville, 3 B. & 0. 45 (1824) — Prussian Government Bonds; Lang v. Suiytli, 7 Bing. 284 (1831)— Neapolitan Bonds; Atty.-Gen. v. Bouwens, 4 M. & W. at p. lUO (1838)— Russian and Danish Bonds; Heseltine v. diggers, 1 Ex. 856 (1848)— Spanish Stock; Picker v. London and County Bank, 18 Q. B. D. at p. 518 (1887) — Prussian (Government Bonds. The course of the jurisv)ru(lence is in tlie direction of favoring the nego- tiability of such instruments. Municipal Debentures— In 1855, by the Act 18 Vict. c. 80, municipal debentures issued in IJpiHir and Lower Canada, payable to bearer, w-ere declared to be transfer- able by delivery, and those payable to any person or order, by indorsement, the holder for the time being hav- ing 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 Mun. A»^t 1892 (Out.). HS. 405-414; K. S. O. c. 180,8. 13; the Munici pal Code, (Quebec, Arts. 981-987; K. S. Q. Arts. 4629, 4630; K. S. Man. c. 1, s. 7. The negotiability of municipal debentures nuiy 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 tliought 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 cou- pons are generally in the form of ordinary promissory notes signed by one- of the officers who execute the debentures. Debentures may be for |100 each or any larger sum. mm OTHER SEOOTIAHLE IKSTRUMENTS. 443 In Ontario such debentures have been held to be negotiable, and bona tide holders for value have been protected: Anglin v. Kingston, 16 U. C. Q, B. 121 (1857); Trust and Loan Co. v. Hamilton, 7 U. C. C. P. 08 (1857); Crawford v. Cobourg, 21 U. C. Q. B. 113 (1861); Sceally V. Mcrallum, 9 Grant, AM (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. 446 (1871). 8ee also Corporation of Roxton v. E. T. Bank, Ramsay A. C. 240 (1882); Macfarhine v. St. Cesaire, M. L. R. 2 Q. B. 160 (1886); St. Cesaire v. Mac- farlane, 14 8. C. Can. 788 (1887); County of Ottawa v. M. O. & W. Ry. Co., ibid. 193 (1886); Pontiac v. Ross, 17 S. C. (\\n. 406 am)). In the United States, such municipal bonds, negoti- able in form, notwithstanding they are under seal, are clothed with all the attributes of commercial paper, paos by delivery or indorsement, and are not subject to equities (where the power to" issue them exists) in tlu- hands of holders for value before niaturity without notice: 1 Dillon, Municipal Corporations, 4th ed., §§ 486, r.l3. See Cromwell v. Sac Co.. 96 V. S. 51 (1S77|. Where the power to' issue debentures for a given })urpose exists, but there has been some irregularity in connection with the passing of the by-law or non-compli- ance with certain directions, the corporation is estopped from denying the validity of the debentures in the hands of a bona tide holder: Webb v. Commissioners of Heme Bay, L. R. 5 Q. B. 642 (1870) ; (Confederation Life v. Howard, 25 O. R. 197 (1894); Board of Knox Co. v. Aspinwall, 21 Howard (U. S.) 539 (1858); Supervisors v. Schenck, 5 Wallace (U. S.) 772 (1S65); Pendleton County v. Amy, 13 Wallace (U. S.) 297 (1871). Where, however, th(» debenture refers to a by-law and the by-law on its face shows that it is for a purpose* not authorized by law, the debenture is invalid: Con- '•] i i ilf ii 444 BILLS OF EXCHANGE ACT, 1890. federation Life v. Howard, 25 O. R. 197 (IS04); Wiltshire V. Surrey. 2 R. C. R. 70 (1891); Marsh v. Fulton County, 10 Wallace (U. S.) 676 (1870). Money paid for worthless debentures can be re- covered back, as money paid without consideration, or for a consideration that has failed: Strdton v. Rastall, 2 T. R. .'^66 (1788) ; Yoiinff v. Cole, 3 Binj;. N. C. 724 (1837); Confederation Life v. Howard, 25 O. R. 197 (1894). Decisions conflict as to whether coupons are entitled to grace. The weight of authority is in favor of their being payable on the very c'ay of maturity without grace: 2 Daniel, §§ 1490a, 1505. Coupons dishonoRHl bear interest from their ma- turity: R. S. O. c. 44, s. 86 (2); C. C. 1069, 1077. Debentures of other Corporations. — Afost railway and other commercial companies incorporated by special Dominion or Provincial Acts are authorized to issue bonds or debentures to a certain extent, which form a first charge on the undertaking. Conii)anie8 incorpo- rated by Dominion Letters Patent may also issue Ixmds or debentures for borrowed money: R. S. C c. 119, s. 37. It is not as yet well settled whether they are nego- tiable instruments in the full sense of that term. In (Ontario, by R. S. O. 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 O. R. 1 (1884), where bonds are compared to promissory- notes; and Desrosiers v. Montreal P. & B. Ry. Co., (? L. N. 388 (1883), as to coupons. In England such bonds and debentures of both home iind foreign companies have frecpiently come before the (I8.VI1; British Linen Co. v. ('aleiiociau Ins. Co., 4 Macq. 107 (1861). The Provincial Secretary of Quebec wrote a letter to a government contractor that money would be voted at the ensuing session on his contract, whicli would be paid to any person to whom he might indorse the let- ter. He indorsed the letter to a bank for advances on his contract, and the money was voted by the legisla- ture. It was held by the Supreme Court of Canada that this " letter of credit " was not a negotiable instru- me^.t under the Bills of Exchange Act or the Bank Act. and that the bank could not recover upon it from the government: Banque Jacques Cartier v. Reginam, 16 C. L. T. 28 (1895). Circular Notes are negotiable in England : Conflans Quarry Co. v. Parker, L. R. 3 C. P. at i>p. 10 and 12 (1867).' A Post Office Money Order is not a np<;otinble in- strument : Fin? Art Society v. Union Bank, 17 Q. B. D. at p. 713 (1886). m m mm. II. 448 BILLS OF EXCHANGE ACT, 1890. FIRST SCHEDULE. Sec. .93, s-a 4. Form A. NOTING FOR NON-ACCEPTANCE. (Copy of mil and Indorsements.) On the 18 , the above bill was, 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 plcict.) 18 . Due notice of the above was by me served upon A. B., CD., (drawer, ) the ■ . 1 ^ r personally, on the day of {or, at his residence, office or usual place of business) in , on the day of (or, by de- positing such notice, dii-ected to him, at , in Her Majesty's post office in the city [town or village], on the day of , and prepaying the postage thereon.) A. B., Notary Public. (Date and place.) 18 . il Hi) mm mm ' ivmrJ^i >, I - I FIRST SCHEDULE, Form B. 449 PROTEST FOR NON-ACCEPTANCE OR FOR NON-PAYMENT OF A BILL PAYABLE GENERALLY. {Copy of Bill and Indorsements.) On this day oi" , in the year 18 ,1, A. B., notary public for the Province of , d /el ling at , in the Province of , at the request of , did exhibit the original bill of exchange, whereof a true copy is above written, unto E. F., the , (acceptor thereof personally (or, at his residence, office or usual place of buLiiness) in , and, speaking to himself (or his wife^ his clerk, or his servant, etc.), did demand ' ^ "'"^^ I ( payment ) thereof ; unto which demand ] , answered : " " ( she j Wherefore I, tlie said notary, at the request aforesaid, have protested, and by these presents do protest against the acceptor, drawer and indorstrs (or drawer and in- dorsers) 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 wait of i ^«^«Pt^"«^« I of the said bill. ( payment ) All of which 1 attest by my signature. (Protested in duplicate.) A. B., Notary Public. 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 ,1, A. B., notary public for the Province of , dwelling m'l.b.b.a.— 29 450 BILLS OF EXCHANGE ACT, 1890. ■i»tVI.H| |«ci ¥ at . , in the Province of , at the request of , did exhibit the original bill of exchange, whereof a true copy is above vs^ritten, unto E. F., the J \ thereof, at , being the stated ( acceptor ) place where the said bill is payable, and there, speaking ,. , , - ( acceptance ) to did demand \ , [ I payment j of the said bill ; unto which demand he answered : " ." Wherefore I, the said notary, at the request aforesaid, have protested, and by tliese presents do r-ot ' against the acceptor, drawei" and indorsers (or draw j. ixidors- ers) of the said bill, and all other parties thereto or therein concerned, for all exchange, re-exchange, costs, damages , . , , i. 1 J. e i. e f a. ''y}^'- :'-■_'..:/'" A. B., ■-'"'^'■''' ■■"':'■' "'"'^ : . : , Notary Public. Form G. NOTARIAL NOTICE OF A NOTING, OR OF A PROTEST FOR NON-ACCEPTANCE, 01? OF A PROTEST FOR NON- PAYMENT OF A BILL. Ist. at (Place and date of Notivg or of Protest.) To P. Q. {the drawer.) '^ ' Sir, Your bill of exchange for $ . dated at the , upon E. F., in favor of C. 1)., payable days 11 iU 'r (t«/y t>tk>:r Uijid r,vjH«^),did, at the rt'ijutist of , and in the ()reHence of , vvcfll known nnto me, exhibit the original I ' 1 whereof a true copy is ahov*i written, / (h'awt'i- j unto P.-Q., the acceptcjr thereof, perwonally (or at ' pronii.sor / his residence, office or UHXial j)hice of business) in , and speaking to himself (his wife, his derk or his servant, ,,,.,, , r accei»tance 1 ,, r . i • ■ etc.), did demand { ' \ thereoi, unto whicli I payment j .• - demand I . t she ) Wherefore I, the said justice of tiie peace, at the re(piest aforesaid, have protested, and by these presenta do protest r drawer and indorsers y against the \ promisor and indorsers ' of the said I acceptor, drawer and indorstrs J J ' I and all other parties thereto and therein con- \ note. ) cerned, for all exchange, re-exchange, and all c<"tsts, damages and iiiterest, present and to come, for want of I acceptance i ^^P ^j^^ ^^.^j | bill, j t payment j ( note. ) ' , All which is by these presents attested by the signature of the said (the witaess) and by my hand and seal. (Protested in duplicate.) witness) (Sifp of ^). (Signature and seal of the J. P.) 456 UILLS OF EXCHANGE ACT, 1890. Ilfilt SECOND SCHEDULE. ENACTMENTS REPEALED.- Sec. 95. Prorinoe and Chapter. Title and Extent of Repeal. Doininiun of Canada ; Chap. 123, Revised Sta- tutes An Act respecting Bills of Exchange and Promissory notes— The whole Act. Province of Quebec : Civil Code of Lower Can- ada Articles 2279 to 2354, inclusive [•]. Nova Scotia : Revised Statutes, third series, chap. 82 Nnw Brunswick : Revised .Statutes, chap. 116 ...,..,.. "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. ;iO Vict., 1867, chap. 34 . , An Aut 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 thew. relate to evidence in regard to bills of exchango, cbeques and promisBory notes ] f ■ ■, • Lm\\\ APPENDIX I. FORMS. No. 1. Inland Bill of Exchange. — Secs. 3, 4. ^475.50. Toronto, Ist May, 189G. Three months after date pay to the order of E. F. & €o., four hundred and seventy-flve dollars and fifty cents, value received. A. B. To Messrs. C. D. & Co., Montreal. t ■ No. 2. Foreign Bill of Exchange. — Secs. 3, 4. Exchange for £200 Stg. Toronto, 10th April, 1896. At sight of this First of Exchange (Second and Third unpaid) pay to the order of E. F. & Co., two hun- dred Pounds Sterling, value received. A. B. To the Bank of Montreal, London, Eng. f^wfJtwmf imfF.wnr-i'f^-im 468 APPENDIX I. No. 3. Foreign Bill of Exchange. — Secs. 3, 4, 9. £100. m i Liverpool, 25th April, 1896. Sixty days .ifter 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. «i: 1500. Chicago, 1st May, 1890. Thirty day.s after date pay to the order of the First National Bank, five hundred Dollars, with exchange on K w York, value received, and charge to account of The A. H. Co. Per C. D., Manager. To E. F. & Co., Toronto. timxm^ammmi^iK'iStvxax^i^i^AitiiilMtiiatti^ .,'.:.,.. ;.. ,t.:.>.L..,.,^.;i.iJitS.:ii.iti'Ol' .V.,ji m umt t' ' FOltMS. No. 5. 459 Cheque Croshed (.^NEUAiiY.— Negotiable. sJcH. 72,fr5. 1250.25. Montrodl, Ist May, 1896. To the Merchants' Huiilv. Pay to E. F., or orfler, twolmndrcd unci fifty Dolhirrf. A. B. ^w No. (). Cheque CkosseJ) ^ci^y.|~Not Negotiable. gECH>2,7r.. |;o75. SC S: s^ '■ Iv Toronto, Ist May, 1896. To the ("anadian|l\a^ of Gonlnerce. Pay to E. I'isP^i'At'^ti^' ^^""^""^^ ^^^ seventy-five Dollars. A. B. No. 7. Inland Phomissory Note.— Secs. 82, 71 (^O^ ^"^ (2) (^)^ $250.00. Toronto, 23rd April, 1896. Due 27th July. Four mouths after date I promise to pay to the order of E. F., at the Molsons Bank, Montreal, two hundred and fifty DollarH. value received. A. B. J *jfca.— .^ ^ii.& •I ^ ^iilp'" If' 460 APPENDIX I. No. 8. Foreign Promissory Note. — Secs. 82, 71 (e). • Montreal, 28th April, 1896. DuK 30xu Mat. ^500. One month Jifter dato I promise to pay to tlie order of U. 8., at tlif First National Bank, New York, ilve hundred Dollars, value received. A. B. No. 9. Notarial Note, e?i brevet. — See p. 425. V' k- On the first day of April, one tliousand eight hun- dred and ninety-six, before Mtre. Jacques Cartier Le- K-loro, the undersigned Notary Public for the Province of Quebec, residing in the parish of Notre Dame, in the dis- trict of Montreal, personally appeared Jean Baptiste Deschamps dit Sarrasin, farmer, and Louis Dubois, son of Pierre, lumberman, both of said parish, who acknow- ledged themselves 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 inteivst at tl:e rate of eight per cent., and with interest at the same rate on interest and principal if not paid when due. Whereof Acte recj aired and granted en brevet. ,■■.■>., .ffi'.-iri'*/6f^Si.i3'(!(Ml'jiR-»**'¥l4i ^p I KOHMS. 461 Thus (loiic and paHScil in tlw otticf^ of nald notary, the day, month and year tlrnt above written, and after reading' hereof the said Harra.-thi lias si}j;in(i, and I lie said Dubois liMS d; repealed Sep- tember Ist, 1890, by the Bills of Exchange Act, s. 95, au(i second Schedule, except Articles 2341 and 2342, relating to e\ idence.] CHAPTER FIRST. -/ ' ^,' bills of exchange. ■ "^' ' l-_, ShC'VK.U 1. • Of tlu< Nature and Requisite!* of Bills of h'xchange. Article 2279. A bill of exchange is a written order by one person to another for Ihe payment of money absolujely and at all events. — Pothier, Change, n. 3 ; 2 Pardessus, n. 330 — ; Smith's Merc. Law, 207 9; liay- ley on Bills, J ; Story, B. E. n. 52, 53; 3 Kent, Com. 74; Cote V. Lemieiix, 9 T . C. R. 221. 2280. It is essential to a bill of exchange — That it be in writing a. id contain the 'gnatnre or • ame of the (irawt'r;— Tliiit it be for the [tayment of a specitic snm of money only; — That it be payable at all events without any condition. — Author, under a. 2279. CIVIL CODE OF LOWER CANADA. 463 2281. The parties to si bill of exchange at the time of makiiiK it are the drawer of the bill and tl)e payee.— The drawee beeomes a party by acceptance and is then called tlie acceptor.— Indorsers, warrantors upon the face of the bill, the person requested to pay an besoin who accepts, acceptors supra, protest and holders also bhice be specified, it is }>ayable generally'. — C. 8. L. .C. c. 64, s, 9; O. S. C. c. 57, s. 4. 2284. Foreign bills of exchange' ai-e usually drawn II sets of s<'veral parts, all of which the drawer is bound to deliver to the payee.— Poth. Ch. n. 37, 130; 2 Par. n. 342; 1 Chit. & H. 3; Bay. B. 30; Sto. IJ. E. n. 66; C. Co. 110. . -,.:-,., .......v ... v..:--;,.;'.-..'. >,-.-: ■ 2285. When a bill contrius the words "value re- ceived," value for th" amount of it is presumed to have been received on the bill and upon the indorsenu *» thereon. The omission of these words does not render the bill invalid.— I'oth. Ch. n. 34; O. 1673, t. 5, a. 1; C. 8. L. C. c. 57, s. 4 ; Duchesnay v. Evarts, 2 Rev. 31 ; Hart V. Macpherson, Cir. L. i\ 66; 8 L. C. R. Larocque & a(. V. Franklin Uaiik, 328; Bay. B. c. 1, S 14, p. 40; Sto. li. E. 11. 63; C. 98J>; C. Co. 110, 137. M ' ' "'"j'it"' .tk..^.»...i...tj . ill! !)•:,.' :!; {1:1 464 appendix ii. Section 2. Of the N'egot iaiion of Bills of Exehawje. liilLs of exiiiaiijie payable to order are trans- ferred by indorsement, which may be either in full or in blank. When indorsed in blank, they become transfer- able by delivery. Bills payable to bearer are transfer- able by delivery either wilh or without indorsement. — C. S. L. r. V. (14, s. 3. 2287. The transfer of a bill by indorsement may be made either before or after it becomes due. In the former case the fiolder acfiuires a perfect title free from all liabilities and objections wliich any parties may have had ajijainst it in the Ijands of the indorser; in the latter case till' bill is subjcH't lo such liabilities and objections, in the sjuue manner as if it were in the hands of the previous holder.— Poth. Ch. n. 141; 2 Par. 352; Sto. B. E. n. 220; Ray. n. 1(>2, 3; Wood et al. v. Shaw, 3 L. C. ,}. 175. 2288. An indorsement may be restrictive, qualified or conditfonal, and the rights of the holder under such indorsement are rejjulated accordiuj^ly. — Tint no indorse ment other than that by the payei^ can stop the negoti- ability of the bill.— Bay. IJ. 12();" Sto. W. E. n. 217; 3 Kt. Com. 00; 2 Par. n. 348; (Miit. & H. 17. 228J). The holder may, at his option, strike out the last indorsenient, although it be in full, and any prior indorsement in blank subsequent to that of the payee. — Ros. B. 285; 3 Kt. (Nun. 89; Sto. B. E. n. 208. . . Section 3. ' ' --^ ^, Of Acc'pU'nce. .,,.;,- 2200. Bills of exchange payable at sight, or at a certain jwriod of time after sight or after demand, must be presented for acceptance. — The presentment is made by the holder, or in his Ix'half, to the drawe«» or his .•jJstV. itJliMA)iiSt^Hi>ili CIVIL CODE OF LOWER CANADA. 465 representative, at his domicile or place of bnsinews, or if the drawee be dead or cannot be found, and is not repre- sented, presentment is made at his last known domicile or place of business. — If there be also a drawee au be- soin, presentment is made to him in like manner. — Poth. Ch. n. 137, 146; I Nou. 220, n. 3; 2 Par. n. 358, 362, 381 ; Baj. B. 244, 5; Sto. B. E. n. 228, 229, 235, 254; (;hit. ». 301 (8 ed.) ; C. S. L. C. c. 64, s. 15, § 2 ; C. Co. 173 ; C. 2308. , .■■ . ■ ,r^:^--;-v. 2291. Presentment for ai'ceptance when necessary must be made within a reasonable time from the mak- ing of the bill according to the usage of trade and the discretion of the courts.— I*oth. Ch. u. 143; Bto. B. E. n. 231. h 2292. The acceptance must be in writing upon the bill or upon one of the parts of the bill.— C. S. L. C. c. 64, s. 5. 2293. The acceptance must be absolute and uncon ditional, but if the hohUtr consent to a conditional or quali- acceptance the acceptor is bound by it. — Poth. Ch. n. t7 49; O. 1673, t. 5, a. 2; 2 Par i. 370, 372; Bay. B. 201, 202; Sto. H. E. 11. 240. 2294. The eff. t of ttc«.'ptanc. is to oblig- the acceptor to pay the bill to the holder* according > its tenor. — The signature of the draw< is admitted by the acceptance and cannot aft- wards be denied by the ac ceptor against a holder iii good faith. — I'oth, Ch. n. 44, 115117 ; Hein. de camb. c. § 26—; c. 6, § 5; 2 Par. n. 376; Sto. B. E. n. 113, 261, 262; 'iaj. B. 318, 31!). 2295. When a bill ha.^ ^ n accepted and delivered to the holder the acceptance <'annot be cancelled other- wise than by the consent of all parties to the bill. — Poth. (^h. n. 44, 1 Sav. P. N. 84t>; 2 Par. n. 377; Bay. B. 208; 3 Kit. Com. 85. Mli.D.E.A. — vJO '' * . , . ^ ■"■; MWttiinftrii mJL^jitii^^tm fmmsm^^i^m^ rr 4G6 APPENDIX II. ' till ' S : 1< m^ I i! .t' iWfe:i!J: 1^ ■ i, IT' \ Is. i I ,' 2296. When a bill has been protested for non- acceptance or for non-payment it may, with the consent of the holder, be accepted by a third person for the honor of the parties to it or any of them. Such accepti>nce benefits the parties only who are subse- quent to the one for whose honor it is made. — Poth. Ch. lia, 114, 170, 471; Jon. 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 protest 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 liable to him on the bill.— Poth. Ch. n. 113, 114; Joa. O. 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 Noting and P rot f'st for Non-acceptance. 2298. Whenever acceptance of a bill of exchange is refused by tlie drawee tlie bill may be forthwith pro- tested for non-acceptance, and after due notice of such protest to tlie parties liable upon it, the holder may demand immediate payment of it from such parties in the same manner us if the bill had become due and had been protested for non-payment. — The holder is not bound afterwiirds to present fhe bill for payment, or, if it be so presented, to give notice of the dishonor.— O. a L. C. c. 64, 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 qualified notary; such noting to be made underneath or to be indorsed upon a copy of the bill and kept upon record by the oflficiaiing otary.— lb. c. 64, s. 12. 2300. When a bill which has been noted for non- iicceptauce us piovided in the last, preceding article is lii;.:, 1 1 CIVIL CODE OF LOWER CANADA. 467 I 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, s, 12. , s* .. 2301. Upon every bill noted or protested for non- acceptance, the words " noted for non-acceptance," or ** protested for non-acceptance,'' as the case may be, together with the date of noting or protes+ingy and liis 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. 2302. 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 of such protest must contain a notice of the pre- vious noting for non-acce{)tance. — lb. c. 64, s. 20. 2303. The noting and protesting of bills of ex- change for non-acceptance and the giving notice thereof, are done by the ministry of a single public notary with- out witnesses, in the manner and according to the forms preBcnl>ed by the Act intituled : An Act respecting Bills of Exchange and Promissory Notes. — lb. c. 64, ss. 11, 22; C. 1209. 2304. In case there is no notary in the place, or he is unable or refuses to act, any justice of tlie peace in Lower Canada may make such noting and protest and give notice thereof in the same nmnner, and his acts in that behalf have the same effect as if done by u notary; but such justice must set forth in tlie protest the rea- sons why the same was not made by the ministry of a notary. — lb. c. 64, s. 24. 230,5. The duplicate protest and notice, with the certificate of service, and all copies thereof attested by ' i .■V^'■l'«■ „3 5, 154-(;; Sto. P. N. n. 4t)0, 484; 1 Pell, Com. 37G; C. Co. 141, 142; Marrett v. Lynch, 9 L. C. R. 353; 10 Lou. II. (O. S.) 374. 2312. The obligation of the acceptor to pay the bill is ])rimary and unconditional, and legal payment l)y him discharges the bill with respect to all the parties, unless he ie an acceptor for honor, in which case he is substi- tuted in the place of the party for who8<' honor he ac- cepts and has his reiourse against such ]>arty also. — The rule above declared is without prejudice to the rights of an acceptor against the party for whose accoin modation lie has accepted.— 2 Nou. 342, 343; Sto. B. E. n. 256, 257, 410, 420, 422; C. 2310. 2313. Payment by the drawer of an unaci-epted bill finally discharges it. If it be accept»'d he is entitled to i 470 Al'PENDIX 11. »| i recover from the acceptor, unless the acceptance is for his accommodation.— C. 2310; 2 Nou. 350; 8to. B. E. n. 422. 2314. Payment by an indorser entitles him to re- cover from the acceptor and drawer and all the indors- ers prior to himnelf; savinj; 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, otherwise he will not be discharged from his liability to innocent holders of such part of the bill. — G. Co. 145, 147. ■ -.^r - -: :r-J-.y,^..-:, .,„,: ,... 2316. Payment of a lost bill of exchange may be recovered upon the holder making due proof of the loss, and also, if the bill be negotiable, on giving security to the parties liable, according to the discretion of the court.— Jou. O. 1<;73, t. 5, a. 18, 10, 111; 2 Bor. 591; Sm. M. L. 285, 286; Sto. B. E. n. 447—; lb. P. N. n. 106—; C. 1233; 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 party on the bill. — If the perst . paying do not declare for whose hone^ 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, 334; C. 1141; C. Co. 158, 159. 2318. Payment of a bill must include the full amount (►f 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. 64, s. 7, 21. mm. CIVIL CODE OF LOWER CANADA. Section 6. " '^ Of Protest for Non-payment. 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 uou-paymeur 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 date unless the contrary appears on the face of it— C. 2306, 2307, 230S, 2309; C. 8. L. C. lb. s. IB, § 2, 8. 17, § 2. 2320. Protests for non-paymV'nt are made by the ministry of the same persons and in the same manner and form as protests for non-acce{>tance, and are sub- ject to the same rules of proof. — If the bill has been noted for non-acceptance it miist be so stated in the pro- test for non-payment, as declared in article 2300. — G. 2302, 2303, 2304; O. S. L. C. c. 64, ss. 11, 14, 20, 22. 2321. Bills drawn abroad upon any person in Lower Canada, or payable or accepted at any place therein, are subject, as to all parties therein resident and liable on such bills, to the rules contained in this title with re- spect to the days of grace and the noting and prot(?st- ing of bills for non-acceptance and for non-payment, and the notification and service of protests, and also with respect to commission and interest. — C. S. L. C. c. 64, s. 25. 2322. In default of protr t for non-payn}ent, accord- ing to the articles of this sei lion, and of notice thereof, as provided in the section next following, the parties liable on the bill other than the acceptor are dis- charged, subject nevertheless to the exceptions con- tained in the two following articles. — C. 8. L. 0. c. 64, 8. 16, § 2. ■■ f-n^*- la*' i. J ml- 1 -ti^a'mjMjjiaafa, mmt I I , -J 472 APPENDIX II. 232.'i. Tlie drawer cannot avail himself of tlio want of protest or notice, unless he proves that provision was duly made by him for the paynunt 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 acci- dent or irresistible force. They may also be waived by any party to the bill, in so far as his righ*^^s only are concerned. Poth. Ch. n. 144; 2 Par. n. 420, 434, 5; Bee. 99, «.; Bay. B. 294, 5 (5 ed.); 3 Kt. Com. 113; 8to. B. E. n. 327. M'' 2325. ^Vant of protest and notice is not excused by the loss of the bill or I)y the death or bankruptcy of the drawee or of the party entitled to notice. — I'oth. Ch. n. 145, (i; Byles, n. 193; Sto. B. E. n. 320. ,: : Section 7. Of Notice of Prolest. ■"■■ 2326. Notice of protest for non-acceptance ^r for non-payment is ^iven at the instance of the holder, or of any party liable on the bill who has received notice and who on paying will be entitled to recover from other parties upon the bill. — Poth. Ch. n. 153; Bay. B. 270, II. 147 (6 ed.) ; 1 Bell. Com. 330, n. 259 ; Sto. B. K. n. 291, 303, 304, 388. 2327. The notice is given by the notary or justice of the peace by whom the protest is made, and such no- tice, together with the cei'tificate of service thereof, is in the form prescribed iu the Act intituled: An Vet respect ing Bills of Exchange and Promissory Notes. — C. S. L. C. c. P^ 8. 22; C. 2303, 2804. «p t.IVIL CODE OK LOWEU TAN ADA. 47.*i 2328. The notice is fjiven to the party entitled thereto personally, or at his re8if an ir^iolveiit \ rader the notice may be given as provid<»d in the last preceding article, or to the assignee of the insolvent estate, provided the bill were drawn or indorsed by the insolvent before the assignnunt, or the attachment in compulsory liquida- tion.— lb. s. 13, § 2. 2330. Service of the notice of |)rotes<. whether for non-acceptance or for non-payment, may be iiuide at any time within three days next after the day on which the bill is protested. — lb. s. 10. 2331. The party notified is hound 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 u. 14.S-153; cniit. U. 520. .5:21 [H ed.); 3 Kt. «^om. 108, 109; Sto. B. E. n. 384; C. Co. IGl. j;': } ' :■ *i 5 . Section 8. • " i Of Interest, Commission and Dumaf/es. 2332. The amount of interest v.'hich may lawfully be paid upon the principal sum of a biil of exchange, for the discount thereof, may be taken at the time of discounting.- C. 8. L. C. c. o4, h. 20. 2333. Any person who discounts or receives a bill of exchange payable in Lower Canada, at a distance 474 APPENDIX II. ."'?:» I from the place where it is discouuted or received, may talie or recover, besides interest, a commission sufli- cient 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 contained in the next following article. Jb. 8. 27; C. S. 0. c. 57, ss. 4, 5, 7. 2.334. Banks in this Province discounting bills of exchange may receive, for defraying the expenses at- tending their collection, a commission on the amount according to the rates and in the manner prescribed iu the Act intituled : An Act resi^cting Interest. — (J. S. C. c. 58, ss. 5, 7; c. 55, s. 110. 2335. Bills drawn for an usurious consideration are not void in the hands of an innocent holder for valid consideration. — C. S. L. C. c. 64, s. 28. 233G. Bills of exchange drawn, sold or negotiated within Lower Canada, which are returned under protest for non-payment, are subject to ten per cent. v.aiiiage8 if drawn upon persons in Europe, or the West Indies, or in jmy part of America not within the territory of the United States or British North America. If drawn upon persons in Upper Canada, or in any other of the British North American Colonies, or In the United States and returned as aforestiid, they ar^? 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 holder being entitled to recover so much money as will be sufficient to purchase another bill drawn on the same place and at the same term for a like amount. .Z^iltj^'-.'^'^ CIVIL CODE OF LOWER CANADA. 475 topretlipr with the damages and interest and also the expenses of noting and protesting and of postages thereon. — lb. h. 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 iKn-son or by writing delivered to a grown person at his eoimting house, or dwelling house, and they disagree as to the rate of ex- change, the holder and the party notified appoint each an arbitrator to determine the rate; these in case of disagreement appoint a third, and the decision of any two of them given in writing to the holder is conclusive as to the rate of exchange, and regulates the sum to be paid accordingly. — lb. s. 2. 2330. 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 part is conclusive. — lb. s. 2, § 2. ' Section 9. ' General Provision f, 2340. In all matters relating to bills of exchange not provided for in this code recourse must be had to the laws of England in force on the thirtieth day of May, one thousand eight hundred and forty-nine. — lb. 8. 30. , . 2341. In the investigation of facts, in actions or suits founded on bills of exchange drawn or endorsed either by traders or other persons, recourse must be had to the laws of England in force at the time specified in the last preceding article, and no additional or differtnt evidence is required or can be adduced by reason of any party to the bill not being a trader. — lb. s. 30, 's 2 ; C. 1246. 4 i 470 Al'l'KXDIX II. 2342. The parties in the attions or suits specified in tlie last preceding; article may be examined under oatli as provided in tlie title " Of Obligatioiis." — lb. s. 30, § 3. 2343. The rules eonterainjjf the pres«*npti(m of bills of exchange are contained in the title *' Of Prescrip- tion."— C. 2260. CHAPTER SECOND. OF I'/IOMISSORY NOTES. 2344. A promissory note is a written promise for the payment of mont'j at all events and without any I'ondition. It must contain the signature or name of the maker and be for the payment ot a specific sum of money only. It may be in any form of words cpnsistent with the foregoing rules. — Poth. Ch. n. 216; 2 Par. n. 478; Bay. R 1; Hto. P. N. n. 1, 0. 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 nil of exchange.— Pay. P. l()i»; Sto. P. N. n. 4; i\ S. i.. C. c. 64. 2:i4(!. The provisions concerning bills of exchange contained in this title ajijsly to promissory notes when they relate to the following subjects, viz.: 1. The indication of the payee; 2. The timet and place of pay- ment; 3. The expression of value; 4. The liability of the parties; 5. Negotiation by indorsement or delivery; (J. Presentment and payment; 7. Protest for nonpay- ment and notice; (S. Interest, commission, or usury; t). The law and the rules of evidence to be applied; 10. Prescription. 2347. Parties liable on promissory notes made pay able on demand are not entitled to days of grace for the payment thereof.— C. B. L. C. c. 64, s. 6, § 2. ■3^ -';^' ^iWI CIVIL COPE OF LOWER CANADA. 477 2.^48. The makinj?, circulaHon. and payr cnt of bank notes are regulated by the provisions of a statute intituled: An Act respe<'tinj? Banks and Freedom of Hankinj,', and by the special Acts of incorporation of the banks respectively. — O. R. C. c. 55. CHAPTER THIRD. OF CHEQl'ES. 2849. A chequi' is a written order upon a bank or banker for tlie payment of money. It may be made pay- able to a particular person, or to order, or to bearer, and is negotiable in the same manner as bills of ex- change and promissory notes.— Chit. R. 545, Chit, & If. 24; Hos. H. 0; 2 Par. 4()4-407; Sto. P. N. n. 488, 400, 491. 2.-',5fl. Cheques are payable on presentment, without days of grace.— Author. und«'r a. 2349. 2351. The holder of a cheque is not bound to pre- sent it for acreptance apart from payment: neverthe- less, if it be accepted, he has a direct action against the bank or banker, without ])rejudice to his claim against the drawer, either upon the cheijne or for the debt on ac(;ount of which it was received.— Poth. Ch. n. 230, 232; Hto. P. N. n. 494. 2352. If the cheque be not pi-esentwl for payment within a reasonable time, and the bank fail between the delivery of the chcipie and sucli presentment, the drawer or indorser will be discharged to the extent of the loss he s.itTers thereby.— Poth. Ch. n. 229; Chit. & n. 32, 48; Sto. P. >J. n. 493, 498; 3 Kt. Com. 104, n. D.; C. 2323. --,,---- .- „-_^ ..-,_,. _,-,^,^,,_:,,„ 2353. Subject to the provisions contained in the last preceding article, the holder of a cheque who ha« received it from the drawer, may upon refusal of {lay- ment by the bank or banker return it to the drawer f ?■ r^"^-- 478 APPENDIX II. ■tm with reasonable dilip:ence, 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 re ceived 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 exchange. — Poth. Ch. n. 229; 1 Sav. 288, 244; 2 lb. IGO, 1G9, 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; Ros. B. 9; Sm. M. L. 20G; 3 Kt. Com. 75, 77; Sto. P. N. n. 488, 489. tm I i')i'« ''"\i ' ifi .!.^^) I CIVIL CODE or LOWER CANADA. 470 CIVIL CODE OF LOWEE CANADA. (IN FORCE.) 1 r Article 1232.— Testimony given by a party in a suit cannot avail in his favor. A witness is not rendered incompetent by reason of relationship or of being inter- ested in the snit, but his credibility may be affected thereby. The following has been added by the Quebec Stat- ute, 54 Vict. c. 45, 8. 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. 475 G. ■ 5^ t CODE OF CIVIL PROCEDURE. f (IN FORCE SINCE JUNE 28th, 1807.) Article 81).--If. in any action founded upon a bill of exchange, promissory note, c<^dule, cheque, act or private writing, the d(?fendant fails to appear or to plead, judgment may be rend(u'e irregularity consists; without x»r<'j"dit,'e, however, to the recourse of such party by im])robation. ('. S. L. C c. Hli, f<. 87, g 2. In the case of promissory notes or bills of exchange payable at a particular place, they are presumed, as a|,ainst the nuiki^r or acceptor, to have been present id at that place at maturity, unless the exception founded upon such want of presentation is accompanied with an atfldavit that, at the time they became due, provision had been made for their payment at the Hpe(;ifl(Mi place. — Added bv codiflers. ILLUSTRATIONS. 1. A plea attacking a protest insufficient on Its face muHt bo accompanied by an alTldavit: Chamberlin v. Rail, 5 L. C. J. Kg (I860); Bank of Upper Canada v. Turcotte, 15 L. C. R. 276 (iS65). HohbB v. Hart, 5 L. C. J. 62 (1860), overruled, 2. A plea of no protest should be supported by an affldavlt: Ryan v, Male. 12 L. C. R. 8 (1861). - :; iHiiilH ^■ii«i ^ vum CODE OF CIVIL PllOCEDURE. 481 3. An affidavit by an indorser that the signature purporting to be his was not written by him or with his knowledge, consent or authority, held sufficient: Browne v. Dow, 11 L. C. R. 273 (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, 6 L, C. J. 130 (1862); Baxter V. Bruneau, 17 R. L. 359 (1884). Contra. Kelly v. O'Connell, 16 L. C. R. 140 (1866). 5. 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). 6. A general denial to an action on a note, without an affidavit, will not be rejected on motion: Mechanics' Banic v. Seal©, 20 L. C. J. 196 (1876), Banque Jacques Cartier v. Goto, 9 <3. L. R. 76 (188.3). Contra, Laprise v. Methot, 4 Q, L. R. 328 (1877). 7. When a defendant has signed with a cross, an affi'lavit is required if he denies it: Straas v. Gilbert, 15 Q. L. R. 59 (1889). I Article 251. — ^^Any party to a suit may be sub popnaed, 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 c'wen. The answers jriven by a pnriy thus exam- ined as a witness may be used as a commencement of proof in writing. The following has been added by the Quebec Stat- ute, 54 Vict. c. 45, s. 2:— Any party to a suit may give testimony on his own behalf in every matter of a com- mercial nature, and in such a case, be examlii;'d, cross- examined, and trealed as any other witness. He may also be subpoenawi and treated as a witness by the oppo- site party, and in such latter case, his answers may be m'l.b.e.a. --31 %*K».\mv-. .■•'ixj&mm^&^m; 482 APPENDIX H. used as a commencement of proof iu writing. The default' by a partj to tender his own evidence cannot be construed against him. Articles 887-899 a-— By these articles of the Code of Civil Procedurf!, as amended by R. S. Q. Art. 5977; 52 Vict. c. 52, 8. 1; 53 Vict. c. 61,^^. 2, 3; and 54 Vict. c. 41, s. 4, actions founded on bills ot v^Achange, notes to order or bearer, cheques or orders for payment, and bons or acknowledgment of debt, are included among " summary matters." In these actions a defendant may be summoned to api^ear in five days instead of ten; he must appear on the day named, and file his plea within two days. Two da.ys 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 heariiig when the proof is closed. If inscribed for proof and hearing at the same time, ilve days' notice are required. Execution may issue eight days after judgment. .,,.';•'■■,■, ILLUSTRATIONS. :"■ '"i^iv':. '';. ■.■■:•:,,,■■.,'. / 1. In summary matters, default to appear la recorded, not at noon, but only after the cloBe of the day of the return of the writ: Desjardina v. Pauze, 11 L. N. 346 (1888). , 2. By Art. 897 a, as amended by 53 Vict. c. 61, s. 2, a notice of five dear days to the adverse party is required of an inscrip- ticn for proof and for hearing immediately after proof in con- tested cases, in summary matters: Conroy v. Mount, M. L. R. 7 S. C. 143 (1891). ,; 3. Such inscription and notice must not only be served, but filed in the prothonotary's office five clear days. A notice for June 4th given May 29th, but only filed June Ist, Is insufficient: Bleau V. Brissette, M. L. R. 7 S. C. 206 (1891). "" 4. If the words " summary matters " are not on the writ, the usual delay must be allowed: Mousseau v. Raeburn, Q. R. 2 S C. 29.'> (1892). niiii miPiiiiiiiii ^fmrn CODE OF CIVIL PROCEDURE. 488 5. The words " summary matters" need uot be on the writ of exerution: Eanque Nationale v. Trurtel, Q. R. 2 S. C. 403 (1892). G. The days of delay between service and return of writ need not be Juridical days: Martin v. Martin, Q. R. 2 S. C. 535 (1892). 7. The curator has the same right to proceed summarily as the party he represents would have had: Prince v. Stevenson, Q. R. 2 Q. B. 158 (1893). 8. An action to revendlcate a promissory note, and asking in the alternative for payment of the amount if it is not given up, is summary: Rousseau v. Wilson, Q. R. 5 3. C. 375 (1894). 9. It is not a cause of nullity that the words " summary mat- ters " are not on the copy of writ, provided they are on the original: Card v. Cuddy, Q. R. 5 S. C. 511 (1894). 10. The delay of five daj s is sufficient for any distance lesB- than thirty miles: Demers v. Hogle, Q. R. 7 S. C. 476 (1895). 11. An action on a letter of guarantee for goods sold Is not summary, even when a count for the price of the goods ie added: Hnmsay v. Mann.' Q. R. 8 S. C. 14 (1895). ,..1^111 vai:;a!i5i ■ 1 w . •— T" ■ - ^ 484 APPENDIX II. fmi . BEVISED STATUTES OF NOVA SCOTIA. Third Series. — Chapter 82. h ' ""'^ 2. A promissory note shall be assignable or indore- able 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 otherwise 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 ])ayable unconditionally in money. 4. In an action brought upon such note, only the amount payable thereunder shall be recoverable, with- out damages, for the nondelivery of the articles enu- merated therein. (In the Revised Statutes of Nova Scotia, Fourth Series, 1873. the whole of (•hai)ter 82 is placed in Appen- dix B, as unrepealed legislation, wholly or partially within the jurisdiction of the Parliament of Canada, or of doubtful jurisdiction. In the Fiftli Series, 1884, it is omitted as being exclusively within the jurisdiction of the Parliament of Canada. In the Revised Statutes of Canada, 1887, Appen- dix I., pag»' 2342, section 2, is placed in Schedule B as one of the Acts not consolidated. Sections 3 and 4 are omitted as being within provincial jurisdiction, and are REVISED STATl^TES. 485 not referred to in the present Act. On the other hand, section 1 of 30 Vict. c. 34. of the Statutes of New Bruns- wick, and copied on the next page, which is to the same effect as section 3 above quoted, is placed in Schedule B of the Revised Statutes of Canada (see p. 2366), and is repealed by the second Schedule to the present xVct. Those notes, which are not payable In money, are not really promissory notesi within the meaning of tha B, N. A. Act, section 91, and the Nova Scotia Legisla- ture 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 way). 1 f' WB\ 4 PI ,1 ^C8B APPENDIX ri. llEViaED STATUTES OF NEW BRUNSWICK (1854). , Chapter 116. I 2. A note in writing for money, payable to order or bearer, shall be assignable and iudorsable in the same manner as an inland bill of exchange is by the custom of merchants; and the payee, indorsee, or holder thereof m uaintain an action thereon in his own name. New Brunswick Statutes, 1867, 30 Vict. c. .*^4:— 1. That all notes, drafts or orders in writing for a sum certain payable otherwise than in money, shall be deemed and held prima facie to import that Ihey are given for a valuable consideration in like manner as promissory notes for the payment of money. (These two sections were repealed September Ist, 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). if! : INDEX. ABBREVIATIONS, list of, xli. ACCEPTANCE, defined, 22, 95 where bill or acceptance is undated, 82 « when date of, may be inserted, H2 by officer of corporation, 95 conditions of, valid -in writing, for money, 98 by parol under law merchant, 98 promise to acoept, 100 where wrung name for drawee is in bill, 101 where bill is incomplete or overdue, 101 by drawee after dishonor, 102 may be general or qualified, 103 what is general, 103 what is qualified, 103 qualified, may be conditional, partial, etc., 104 at particular place not qualified as in England, 105 conditional, 104, 108 partial, 104, 109 qualified as to time, 105, 109 by part of drawees only, 105, 109 list of qualified, not exhaustl^•e, 109 incomplete until delivery or notice. 114 bill payable at or after sight, presentment for, necessary, 228 when presentment for, necessary befort yreBemtment for payment, 230 presentment for, excused if time iw t'"> short, 231 holder must present for, it bill at or after sigl't, 231 effect of not presenting for, in rea*,uable time, 232 rules as to presentment for, 234 ^ _ mode of presentment for, '234 presentment for, where drawees not partners, 235 drawee dead, 230 through post-office, 236 excuses for non-presentment for, 237 ^1 F.""' w 4«8 INDBX. wm fi HI ml ACCEPTANCE— Continued. preeeatmeut for, excused where drawee dead or fictitious, 237 impossible, 237 irregularity waived, 237 not excused, because dishonor expected, 238 two days allowed drawee to decide on, 238 holding bill beyond two days not, 238 when bill ia dishonored by non-accoptunce, 23'J presentment for payment then unnecessary, 239 holder may refuse qualified, 241 if qualified, taken without assent, parties released, 211 what is assent to qualified, 242 notice of dishonor by non-acceptance must be >?iven, 257 effect of omission of, 267 as to holder in due course, 269 * Hufficient, 2(50 rules as to, 2C0 by holder or indorser, 261 by agent, 261 benefits other parties, 2(i2 in writing or verbally, 263 by return of bill, 265 if writing is irregular, 265 to party himself or to agent, 26& if no place of payment, is named in, 292 if place of payment is named in, 293 alteration in, material, 34o, 348 ACCEPTANCE FOR HONOR, 350 holder need not allow, 351 is conditional, 351 may be for part only, 352 must be in writing and signed, 352 , form of, 352 '„.■■.. for whose honor, 353 how maturity reckoned, 353 what it involves, 353 ? to whom acceptor liable, 354 i estoppels of acceptor, 854 ACCEPTOR, drawee by accepting becomes, 37, 05 . of overdue bill, liable on demand, 79 may sign as, on blank paper or incomplete bill, 110 7 * contract of, incomplete until delivery or notice, 114 ' if bill not in hands of, delivery presumed, 116 - .-_ -^ only person signing as, liable as, 132 ^; when not personally liable, 152 INDEX. 489 ACCEPTOR— Continued. • accepting as officer of a corporation, 153 in other representative capacities, 158 when holder deemed holder for value au against, 171 when bill may be re-issued by, '220 presentment for payment to, 248 ■uspending payment, protest for better security, 287 •' when liable without presentment for payment, 2".t2 protest not necessary, as against, 294 bill to be delivered to, on payVneut, 295 . . , • : undertakes to pay bill, 298 ^ .... estoppel of, as to drawer. 299 where drawer is payee, 300 as to payee, 65. ilOO , bill discharged on payment by, 318 liable to drawer or indorser, 334 becoming holder at or after maturity discharges bill, 337 holder may renounce as to, in writing, or by surrendor of bill, 338 ■ of bill in set not getting part accepted, liable to holder, 362-3 ACCEPTOR FOR HONOR, who may become, 351 must sign as such, 852 engages to pay bill conditionally, 353 • . to whom liable, 353 presentment for payment to, 354 time for presentment for payment to, 355 if bill dishonored by, must be protested, 355 ACCESSORY TO BILL discounted, collateral security is, 173, 406 ACCOMMODATION BILL, defined, 174 when deemed to be issued, 175 when drawer or indorser of, not entitled to notice of dishonor, 254, 280,281 discharged when paid by party accommodated, 336 ACCOMMODATION PARTY, defined, 174 liable to holder for value, 175 rights of, 176 . , paying bill discharges it, 336 ACCORD AND SATISFACTION, common law rule altered in Ontario, bill discharged by accord without satisfaction, 339 ACT, short title of, 21 - ■ ' ' largely declaratory of old law, 21 came into force, Sept. Ist, 1890, 433 not retrospective, 433 li 4^ INDEX. ACT— Continued. A.monding, of 1891, 435 1893,440 1894,440 J ACT3 KEPEALEP— See Statutes ACT OF HONOR, formerly necessary, before acceptance, 353 still necessary before payment for honor, 357 what must contain, 357 form oi!, 461 ACTION, includes counter-claim and set-ofif, 23 against drawee who pays on forged indorsement, 140 by drawee or indorser who pays on forged indorsement, 140 evidence of fraud in, shifts onus of proof, 189 to compel indorsement, 201 holder may bring, in his own name, 221 CD day of dishonor is premature, 256 liiritation of, 326 — See '.itutnte of Limitations on lost bill, 359 ADDENDA BT COLRIGENDA, xii. ADDRESS, of bill to drawee, 55, 56 notice at customary, sufficient, 271 of acceptor, presentment at, 248 party may give, under his signature, 271 notice to imiorsers who do not give, 27? 00 posted notice, 271 ADMINISTRATOR, when personally liable, 158 may indorse without personal liability, Wl bill hold in capacity of, 337 AFTER DATE, a determinable future time, 79 Dili payable, if issued undated, H2 has days of grace, 86 how maturity reckoned, fW presentment for aocept»uoa unneceiMHury, Ml AFTER SIGHT— See Sight AGENT — See also Principal and ageitt Bignature by procuration, notice of limited authority, 147 person not capable of contracting may be, 148 illustrations of pow ers of, 148 when not personally hable. 133 illustrations of liability of, 155 may give notice of dishonor, 261 notice of dishonor may be given to, 2C6 ■■Pi IMPJBX. 401 AGENT— Continued. notice when dishonored bill is in hands of, 269 of bank, when must not act as notary. 291 of holder may cancel bill, 344 diacharge any party, 344 of payer for honor, may make declaration for act, 367 cheque croHsed to another bank as, 895, 396 ALLONGE, defined, 203 indorsement may be on, where recognized, Wi ALTERATION of bill or acceptance, 345 material, renders bill void, 346 proviso if not apparent, 84fi what are, 348, 385 illuutrationa of, 348 illustrations of, not material. 349 fraudulent, is forgery, 360 ALTERNATIVE, instrument to drawees in, not a bill, 6(3 referee in case of need not so couaifiijred. 6t5 bill may be payable to payees in, 58 amount in money or alternative, not a bill, 41 if alternative places of payment, sufficient to present at either, 247 AMBIGUOUS INSTRUMENTS, holder may treat aa either bill or note, 33. 401 AMENDING ACT of 1891, 18, iSi—See Dills of Exchange Act 1893, 440 1894, 440 AMOUNT— See also Sum Payable corporations not to issue certain bills or notes under ^20, 43 debentp.res to be for $100 or upwards 442 ANTECEDENT DEBT, sufficient consideration for bill, 159, 161 taking bill for, generally only conditional payment, 319 ANTECEDENT PARTIES, rights against, by drawer or indor«er pay- ing, 334 ANTEDATED instruments valid, 85, 381 APPENDIX I. Forms of Bills, Cheques, Notes, and Act of Honor, 457 APPENDIX II. Statotes Civil Code Quebec, Arts. 2279-2354, p. 462 Arts. 1232, p. 479 Code of Civil Procedure, Arts. 89, 146, 887-889, p. 479 Rev. Stat. N. S. o. 82, p. 484 Rev. Stat. N. B. o. 116, p. 485 Stat. N. B. 30 V o. 34, p. 486 !■ . ■h: ^ III [si |i WK**Vf*^»" I i I 492 INDEX. ASSENT, acceptance is, to order of drawer, 95 of drawer and indorserB to qualified acceptanca necessary, 241 ASSIGNMENT, bill not an, of funds in hands of drawee, 296 of bills otherwise than by indordemeut or delivery, 199 of chose in action, 67 of debts in Quebec, 68 ASSUMED NAME, party using, liable as if he used his own, 132, 135 AT OK AFTER SIGHT— See Sight AU BESOIN— See Referee in Case of Need AUTHORITY to fill in date, 82, 110 to complete bill and fill up blsnka, 110 illustrations of, 110-2 blanks must be filled up in accordance with, 112 death revokes, unless value >?iven, 113 name signed without, is inoperative, 139, 142 estoppel as to denial of, 144 procuration is notice of limited, 147 of oiHcers of corporations, 148 of partners to bind firm, 148, 206 of Agent — See Principal and Agent restrictive indorsement is limited, 212 qualilieJ accepta.nco taken without, discharges parties, 241, 242 cancellation without, is inoperative, 345 AVAL, defined, 305 in same position as ordinary indorser under the Act, 304 illustrations of, 306 under Civil Code, 469 BANK, defined, 25— See Cheques misdemeanor, improperly to use name of, 26 restricted to seven per cent, interest, 73 cheque is demand bill drawn on, 380 usage of, may decide reasonable time, 388 duty of, to cash customer's cheques, 389 paying crossed cheque, when protected, 396 collecting crossed cheque, when protected, 3!I8 BANK ACT, banks recognized by, 26 limitation as to rate of intiirest, 73 banks under tlie provisions of, 380 present Act not to affect, 430 BANK DEPOSIT RECEIPTS, 446 BANK NOTES, law regulating the issue of, 404, 441 INDEX. 493 BAlNKER ir term used in Imperial Act, 25 " BANKRUPT," struck out by amending Act, 436 BEARER, defined, 25 bill payable to, '2(), 43, C9 ' prohibition as to issue of, 43, 127 when payee is fictitious, 59 negotiated by delivery, 197 holder of, without interest may sue, 223, 224 note payable to, 399. 401 bank notes payable to, 401, 404 Dominion notes payable to, 404 debentures payable to, 442, 445 BETTER SECURITY, protest for, if acceptor suspends payment, 287 BILL, in Act means bill of exchange, 26 BILL OF EXCHANGE, origin of, xlv. history of, xlvi. under Dominion jurisdiction, 1 defined, 31 what is not, 44, 46, 56, 81 inland and foreign, 49 requisites of, 31, 55, 56. wlien not negotiable, 66, 212, 214 wiien negotiable, 69, 71 liow maturity of, is computed, 86, 89, 90-1 acceptance of, 95 — Bee Acceptance incomplete, 82, 110 capacity to become party to, 119 — See Capacity who is liable on, 132 forged or unauthorized signature, 139 -See Forynry signature by procuration, 147 — See I'roeuration consideration for, 159 — See Comidfiation accommodation party to, 174 — Bee Accommodation Party holder in due course of, 177 negotiation of, 196 — See Negotiation indorsement of, 198, 201 — See Indoriement overdue, 215 rights and powers of holder of, 221 presentment of, for acceptance, 228 , must be presented for payment. 242 when dishonored by non-payment, 256 BILLS OF EXCHANGE ACT, 1890, is a oode. 2 bill introduced in 1889, 3 changes during passage through rarhameut, 4 ,1 |. t > 494 INI/KZ. i i' 'if BILLS OF EXCHANGE ACT— Cmtinued. how cited, 21 assented to, May 16th, 1890,21 came into force, Sept. Ist, 1h90, 21, 433 awended by Act of 1891, 6, in. 80, 83, 141, 2^2, 237, 287, 435 1893, 88, 89, 440 1894, 88, 89, 440 applies only to bills, cheques and notes, 19 copied from the Imperial Act, 1882, 21 is not retrospective, 21, 488 HI>ANK. date m bill or acceptance, 82 p»per with siipMttare only, to be tilled up as bill, 110 ,*i/sofnp\ete bill, aathority to fill up, 110 tione of biili» filled up, 110-2 ! of unsig/i"/! or inconipiote bill, 101 if iri«< H fl» te or. holder riOt in due course, 177, 180 ituJorummt io. 207, 209 how made, W^ 4iifM« <>f . 209 l» f,*mmt ';»n&da, 209 A0i^4f$ti Ufi'^^w.l 210 m^nm^mi^mbttl with, «» BON -Kee 7. O '/. BONA FIDK8 -Be*' <^ -906/ /«)r transfer bill, 131 if drawer < indorM/ vvithout, other parties liaMf/ iM if drawee without, holder nriay treat bill as no ceasing, presentment to be made, '251 lOr sending notice of dishonor, 968 in sending notice of dishonor excused, 276 in noting or protesting when excused, 291 when delay ceases, diligence required, 2ol, 291 DEI.J.VERY, definition of, 26 of bill necessary to complete contract, 114 requisites as to, 116 by whom it must be made, 116 possession creates presumption of, 116 conditional, or as an eaorow, 117 bill pavable to bearer negotiated by, 197 negotiation by indorsement completed by, 108 for value without indorsement, 199 person paying bill entitled to, 295 transff-rrer by, defined, 314 liability of, 314 what he warrants, 315 to acceptor at or after maturity, discharges bill, 337 to payee or bearer necessary to complete note, 407 DEMAND, bill or note payable on, 32, 89, 410, 412 when a bill is payable on, 77 no days of grace on bill payable on, 78 overdue bill accepted or indorsed is payable on, 79 when deemed overdue, 219 when prescription begins to run, 328 when to bo presented for payment, 243 when interest begins to run, 310 liability of indorser of note payable on, 110 note payable on, may be continuing security, 410 when it ahonkl bo presented. 410 when deemed to be overdue, 112 when " at maturity," 413 cheque is bill payable on, drawn on bank, 380 DEPOSIT RECEIPTS, negotiable, 446 i' I INDKX. 503 I DETENTION, of bill by drawee, 238, 290 DETERMINABLE FUTURE TIME, 32, 30, 79, 86, 399 DILIGENCE, REASONABLE, in attempting to present for accept- ance, 237 in attempun|4 to present for payment, 245 iu attempting to present where drawee or acceptor dead, 250 in noting or protesting bill, 291 DIRECTORS, when personally liable on bill or note, 127, 154, 417 DISCHARGE of bill may be proved by parol, 36 of bill by payment, 318 merger, 319 novation, 319 corapenKation or setofl, 324 prescription or Statute of Limitations, 326 confusion, 337 by cancellation, ,A4 material alterati' n, 345 of accommodation bill, 336 of party liable, by waiver, 338, 339 of surety, by dealing with principal, 840 at place of contract, 375 of one part of a bill in set, 363 DISCOUNT OF HILL, 172 entitles discounter to collaterals, 173 discounter holder for full value, 174 DISCRETION OF COURT, as to costs on premature action, 293, 413 DISCREPANCY between figures and words, 75 DISHONOR, case of need in event of, 93 acceptance after, 102 after notice of, holder takes subject to defects, 177, 220 by non-acceptance, 238, '239 alter two days, 238 recourse for, 239 unless acceptance unqualified, 241 by non-payment, 256 recourse for, 256 notice to drawer and indoraero on, 257 drawer and itidorsers dieclmrged unless notice of, 25? want of notice of non-acceptance, 25!l notice of non-acceptaucn, and non-payment, 260 rules as to giving notice of, 260— See Notice erf inland bill, 283 . t » > ^ iM 4 if H r 504 INDEX. DISHONOR— Cont/HweiZ. of foreign bill, 285 note, 418 of bill by acceptor supra protest, 355 DISPENSING with presentment for acceptance, 237 payment, 252 notice of dishonor, 278 protest, 291 DIHSENT, by drawer or indorsor to qualified acceptance, 242 DIVIDEND WARRANTS, crossed cheque provisions apply to, 430 are negotiable, 430 DOMINION NOTES, 404, 441 DONATIO MORTIfi CA(JSA,cheqm given as, 10.4, 390 DRAFT, bill frequently called, 33 DRAWEE is person to %vhom bill is addressed, 37 instrument not a bill if not addressed to, 38 bill may be drawn payable to order of, 53 llctitioua, or sanie person as drawer, 53 must be named, or clearly indicated, 55 there may be two or more, 56 not be alternate or successive, 56 by assent to bill becomes tlie acceptor, 95 assent must be written on bill and signed by, 9S promise of, must be payment in money, 98 wrongly designated or name misspelt, 101 may accept mcornplete or overdue bill, 101 bill after dishonor, 102 qualified acceptance by some, not all, 105, 109 delivery or notice of aoceptanco binds, 114 paying; cheque on forf^ed indorsement, 140 presentment for acceptance to, 234 presentment to all, when more than one, 235 if dead, presentment to representative, 236, 250 for acco ,tance excused, 237 if fictitious, presentment excused, 237, 253 has two days to accept bill, 238 when bill to bo presented at address of, 218 place of business of, 218 not accepting not liable on hill. 296 accepting parts of set, liable on each, 362 DRAWER, ia person who addrossc bill, 37 aud drawoa wlien same peraon, 53 . . . ■ "^"^SWTI^iP INDKX. 505 VlikVfEB.— Continued. bill may be drawn to order of, 5i) may insert name of case in need, 93 may limit liability or waive holder's duties, 04 drawee may sign bill before, 101 order of, may be accepted generally, 103 qualified acceptance of, 103, 104 may give sifjnature on blank paper. 110 contract of, incomplete until delivery, 114 delivery presumed, if not in possession of bill, 11(5 when corporation may be. 111) where no capacity to be party to bill, l31 must sign as such to be liable, 132 action on forf^od indorsement for one year, 130 sisnin^; aa assent, officer or representative, 152 when not pei'sonally liable, 152 may re-isaue bill negotiated back to him, 220 when not discharged by delay in presentment, 231 discharged by delay in presenting sight bill, '232 non-assent to qualified acceptance, 241, tV42 non-presentment for payment, 242 presentment excused as regards, 254 if dead, notice given to representative, 2G7 notice to, when dispensed with, 278 liability of, to holder or indort. , 301 estoppel of, as to payee, 301 damages recoverable by, who pays, 310 bill not discharged when paid by, 333 may re-issue bill to order of third party, fJ34 may not re-issue bill to his own order, 334 if bill for his ncoommodation, his payment discharges it, 330 accepted for honor of, if not otherwise stated, 353 may be re(iuired to replace lost bill, 350 undertaking of, 3'j9 of clieque discharged by negligence of holder, 380 holder of cheque is creditor in lieu of, 388 of cheque may stop payment before acceptance, 3S9 noticr of death of, stops payment of che(pie, 380 ma' re-opeii crossed cheque, 3'.I4 of oroBsed cheque, rights if paid in good faiUi, aiitJ DUE COURSE holder in, 177 -See Holder payment in, dedned, 318 — See Pa>jnient f \ DUE DATE, how determined, 86 place of payment governs, 374 !r fiOb INDEX. DUPLICATE of lost bill, if required. .SaO forms in lii-st schedule, 448 DURESS, cause of defective title, 189 evidence of, shifts burden of proof, 189 DUTIES OF HOLDER, 228- See HoJJer ENACTMENTS REPEALED, and extent, 431, 456 ENDORSEMENT— See ludurseinent ENGLAND, law of, in Quebec, ? Ontario, 9, 17 Nova Scotia, 10, 18 New Brunswick, 12, 18 P. E. Island, 14, 18 Manitoba, 15, 18 N. W. Territories, 17, 18 B. Columbia, 17, 18 common law of, in Canada, 436 EQUITABLE ASSIGNMENT, of fund or part, 4(J bill or cheque not, .'290 of bill, 67 of chose in action, 67 EQUITY attaching to bill— See Defect of Title ERASURE of signature, holder must account for, 345 of name, material alteration, 349 ESCROW, bill delivered as, 117 ESTOPPEL defined, 144 of acceptor, as to drawer, 299, 300 payee, 65, 300 of drawer as to payee, C5, 301 of indorser, as to drawer and prior iudorsers, "03 of maker of note, as to payee, 417 EVIDENCE, to vary or contradict bill. 35-7 date may be proved to be wronj}, 84 as to consideration is admissible, 161 of fraud, etc., shifts burden of proof, 189 of delivery being coiiditional, 116 foreinn protest is prima jac it' , 376 articles of code .la to, not repealed, 456 lex fori f^overns as to admission of, cheque not, of money leni, 332 protest ia prima facie, lil INDEX. 507 EXCHANGE, bill may be payable with, 7C, i:> damages on bill dislionorerl abroad, 3.3 foreif^n currency, at current rate of, 374 EXCUSED, presentment for accei)tance, 2.37 payment, S'l'i notice of dishonor, 278 EXHIBITED, bill should be, on demanding payment, 295 EXECUTOR— See Representative FACT, reasonable time, mixed question of law and, 232 unreaHonable time, question of, 219 FAILURE OF CONSIDERATION, effect of total, 1(58 effect of partial, 170 FAST DAY, is a holiday for bills, 89 FALSE PRETENCE, giving cheque where no account is, 381 FEAR, cause of defect in title, 189 effect of evidence of, 189 FEF2S, for noting or protesting, 426 allowed to holder, 426 part of liquidated damagiis, 310 provincial tariffs for, continue, 4"2G FICTITIOUS, where drawee, bill may be treated as note, 53 presentment is excused, 237, 2.53 notice of dishonor is excused, 280 where payee, bill payable to bearer, 59 person defined, tiO nayee, illustrations, Gl-0 FIGURF.S, different from words, latter guvern, 75 FIRM — See Partners FORCE, cause of defect in title, 189 effect of evidence of, 189 FOREIGN BILL, what is a, 50 accepted for part, murt be protested for balance, 212 diehonored, must be protested, 285 if not on face, protest unnecessary, 285 protested for non-acceptance and non- payment, 286 rights, duties and liabilities on, 305 not stamped, valid, 3G7 in Canadian form valid here, 307 law of place of contract governs, 308 protest of, prima facie evidence, 376 \ ■ i I 508 INDEX. FOREIGN NOTE, what is a, 407 should be protested to bind indorsers, 418 FOREIGN CURRENCY, computation of, 374 FOREIGN DISCHARGE, effect of, SfiS, .S75 FOREIGN GOVERNMENT BONDS, 441 FORGED OR UNAUTHORIZED SIGNATURE, is wholly inoperative, Vid, 141 confers no ri^lit except by estoppel, 139, 144 unauthorized, may be ratified, 13'J forced, cannot be ratified, 139, 142 one year to bring action for payment on, 140, 144 drawee of cheque indorsed with, has action, 140, 43(1 indorser " " " " 140 injunction a? to bill with, 143 illustrations of, 144-7 money collected on, liable to refund, 146 payment of crossed cheque altered, 396 FORGERY defined, 141 in Criminal Code, 141 by a person of the same name, 14 (> fraudulent alteration of b^ll is, iHiO FORM and interpretation of bills, 31 requisites in, governed by law of place of issue, 365 contract, 365 conforming to law of Canada, 367 FORMS in first schednle may be used, 428 A. Noting for non-acceptance, 448 B. Protest of bill payable geneially, 4 19 C at a stilted place, 44'.) D. noted for non-acceptance, 450 E. note payable generally, 451 F. at a stated place, 452 G. notice of noting or protest of bill, 452 H. protest of note, 453 1. service of notice, 454 ,1. protest by Justice of the Peace, 45i In Appendix I., 457 1. Inland bill of exchange, 457 2. 3. 4. Foreign bills of escliange, 437, 5. Cheque crossed generally, 459 6. specially, 469 INDEX. 509 nl FORM.B— Continued. 7. Inland promiaaory note, 459 8. Foreign " " 460 "■). Notarial note, en brevet, 400 10. Notarial act of honor, 4(U FUAUD defined, 18-2, 420 title defective i' bill obtained by, IHl acceptance obtained by, 181 negotiation fraudulent, 181 is not presumed, must be proved, 182 illustrations of bills obtained by, 182-5 may be holder in due course, unless party to, 187 burden of proof is sluTted, on evidence of, 18!) title may be through holder in due course, 189 illustrations of onus of proof, 190-2 fraudulent alteration of bill is forgery, 350 mere negligence is not proot of, 420 PRENOH LAW in Quebec, 7 in Ontario, '.) ancient, 7, 8, V), 17, 53, 84, 'X\ 108, IC'J, ItiO, 209, 241, 305, 338, 357, 408 modern, 32, 44, 49, 53, 65, 60, 84, 87, 92, 93, 05, 99, 108, 109, 160, 161, 172, 209. 211, 233, 240, 244, 2.58, 296, .302, 305, 338, 350 355, 350, 357, 382, 408 F UND, order to pay out of, not a bill, 46 indication uf, may be in bill, 46 illustrations of orders on a, 46-8 bill or cheque not an assignment of, 296 FUTURE TIME, bill payable at, 79 GENERAL ACCEPTANCE, 103— See Acceptance GENERAL CROSSING— See Croneed Cheque GOLDSMITH'S NOTES, 1. GOOD FAITH, wrong date inserted in, 82 holder in due co'irse, takes bill in, 177, 179 negotiation of bill in breach of, 181 payment in due course must be in. 318 bank paying crossed cheijue in, 396 thing done honestly deemed to be in, 419 negligently may be in, 420 is always presumed, 419 GRACE— See Day* of Grace 1 t i) ! 'i i 3 '. ( t 510 INDEX. GUARANTOR- Seo Aval—Wurrantor HISTORY of bills and notes, xlvi. UOLDERdefinetl, 27 liability to, may be negatived or limited, 01 whon deemed n, holder for value, 171 liavinf^ hen is deenr.eci a holder for value, 172 rights acquired by subsequent, 187 is prima facie a holder in due course, 189 netjotiation of bill to transferee as, 196 negotiation of bill to order to, 198 transferring bill to order without indorsement, 199 when usurious bill void in liands of, 192 rights and powers of, 221 may sue on bill in his own name, 221 general duties as to presentment, 228, 2,^1, 24a notice of dishonor enures to benefit of others, 202 noting or pi-otest of inland bill by, 283 when holder becomes transferrer by delivery, 314 receiving payment in diie coui e. 318 when bill is discharged by acceptor being, 337 may renounce rights against acceptor, 338 any party to bill, 339 may discharge bill by cancellation, 341 any parry by cancelling his signature, 344 cancellation without authority of, is inoperative, 345 may claim duplicate of lost bill, 309 rights of holders of different parts of set, 3t>2 may cross a cheque generally or specially, 394 '■ not negotiable," 394 entitled to expenses of noting and protecting, 420 Duties of, may be waived by drawer or iudorwcr, 94 not to take qualified acceptance without authority, 241 general duties of, as to presentment, 228, 231 to (jresent for acceptance, 231 or to negotiate, 231 to allow drawee two days and no more, 238 to present bill for payment, 242, 245 even if dislionor expected, 252 to give notice of dishonor, 257, 201 to protest inland bill in Quebec. 283 foreign bill for non-payment, 285 should exhibit bill on demand of payment, 295 are determined by the law of the place, 37 INDEX. 511 HOLDER— Continued. riyhts of, when may treat bill as an inland bill, 52 may date undated hill or acceptance, 82 may resort to referee in case of need, 93 aif^ht draft acceivtcd as of first presentment, 102 may enforce bill aj^ainst parties not incapacitated, 131 deriving title through a holder in due course, 187 may convert blank into special indorsement, 210 may sue on bill in his own name, 221 may refuse to take a (lualified acceptance, 241 ayainst drawer and indoraers on dishonor, 239 on dishonor by non-payment, 250 when may protest for better security, 287 of unaccepted cheation, 1!) declaratory of old law, 21 IMPRISONMENT for brtacb of "patent rinht" provisions, 194 TN(^HOATE INSTRUMENT, signature on blank paper, 110 holder may fill up blanks, 110 must be tiled up in reasonjible time, 112 and in accordance with authority j^iven, 112 in hands of holder in due course, 112, 113 promissory note, until delivered, 407 INCIDENTAL DEMAND, defined, 24 INDEMNITY, in action on lost bill, 359 defendant should demand on lost bill, 850 is not required if bill is not negotiable, 360 INDORSEE, when he need not indorse, 71 of " patent right" bill, takes subject :o equities, 193 if two or more, all must indorse, 20 J transfer of part of bill to, invalid, 20 ) rule as to misspelling or wrong desigiuition of, 205 payment to, contrary to condition is valid, 207 blank indorsement specifies no, 209 provisions as to payee apply to, 210 restrictive, takes subject to restrictions, 214 INDEX. 513 INDORSEMENT, must be completed by delivery. 98, 114 miy be on any jmrt of bill or on allonse, 28. "202, 203 blcnk, makes bill payable to bearer, 09 of overdue bill, effect of, 79 date of, deemed true date, 84 by infant, etc , gives rights to holder, 131 right of dawee of cheque paying on forged, 140, 436 of bill payable to order, 198 of notarial note in Quebec, 198 transfer for value without, 109 without personal liability, 2C1 requisites of a valid indorsement, 202 agreement to indorse is not an, 203 on allonge or copy of bill, 203 must be of entire bill, 204 must be by ;ill payee.s or indorsees, 204 when payee or irdorsee, wrongly designated, 205 when name of payee or indorsee miR-spelt, 205 suggested modes of indorsement, 200 order of, on bill deemed proper order, 207 may be in blank, or special, or restrictive, 207 conditional, may be disregarded by payor, 207 what is indorsement in blaiik, 209 what is special, 209 bolder may convert blank i..i,o special, 210 holder may strike out blank, 211 what ':i cstrictive, 212 examples of restrictive, 213 rights givon by restrictive, 214 rights of indorsee under restrictive, 214 negotiability of bill stopped by restrictive, 214 of overdue bill, effect of, 215 undated, presumed before overdue, 219 demand bill presented within reasonable time after, 243 presentment for payment excused as to accommodated indurser, 254 estoppel of acceptor as to any prior, 300 indcrser as to validity of bill at time of, 303 pour aval, 305 transferrer by delivery negotiates without, 314 of more than one part of a set, 3(i2 mterpreted by l^x loci contractus, 365 of inland bill abroad governed by law of Canada, 373 demand note presented within reasonable time after, 110 if given as collateral security not necessary, 410 m'l.b.e.a.— 33 rll mamimBmmssis^^SB3SSSSB wmmsm il4 INDEX. M I INDORSEE of overdue bill, liability of, 79 may unme referee in oaee of need, S3 may negative or limit his liability to holder, 94 may waive holder's duties as to himsylf, 94 may indorse " without recourse," 94 blank sifjnature for bill may be used for thit of, 110 contract of, incomplete until delivery, 116 delivery must be authorized by, 110 il bill not in possession of, delivery presumed, 116 when corporation may be, 119 rights to holde.-. through minor or corporation as, 131 only those who sign as. liable as such, 132 adding words indicating representative character, 152 prior, may re- issue bill negotiated back, 220 cannot enforce payment against intervening party, 220 discharged by non-presentment for acceptance, 232 liable to holder on dishonor by non-acceptance, 239 when discharged by qualified acceptance, 241 must express dissent from qualified acceptance, 242 discharged by non-presentment for payment, 242 presentment excused as reg(*rd8, 254 liable to liolder on dishonor by non-payment, 256 notice of dishonor must be given to each, 257 notice by holder be'ietits prior indorsers, 2C2 notice by, benefits subsequent indorsers, 262 notice to representative of dead, 2(>7 when not entitled to notice of dishonor, 281 discharged by non-protest of Quebec inland bill, 283 foreign bill, 285 acceptor admits capacity of ppyee to indorse, 300 drawer admits capacity of payee to indorse, 301 liability of, on ^-:il, 302 estoppel of, 303 person signing not as drawer or acceptor liable as, 304 pour aval, 305 compelled to pay may recover damages, 310, 313 payment by, does not dJHcliarge bill, 333 rights of, who pays bill, 33- when discharged by car tion, 344 alteration; does not disclinrge subsequent, 345 on each part of set liable, 302 liability of, when laws conllict. 305 liable only if note presented for payment, 415 at proper place, 410 first indorser of note correBponds to drawer of bill, 418 INDEX. 515 INFANl —See Minor INFORMAL BILL, ambiguoiia, may be treated as either bill or note, 83 if in blank or incomplete, how to be tilled up, llo illustrations of, 34, 41, 44, 4«). 110 INITIALS, 'jiifticiency of, as a signature, Sit of drawer required to uncross a cheque, 39 1 INLAND BILL, definition of, 49 illustrations of, 61, 54 presumed, unless contrary appear on face, 52 noting or protest of, optional except in Quebec, 283 measure of damages on dishonored, 310 interpretation of ndorsemeiiti, abroad of, 373 form of, 457 INLAND NOTE, definition of, 407 noting or protest of, optional except in Quebec, 407 form of, 4")(t INSOLVENCY, matures bill in Quebec, 257, 287 INSTALMENTS, bill may be payable by, 72 each, treated as separate bill 74 illustrations of bills payable by, 74 days of grace allowed on each, i)2 INSTRUMENTS, otliei negotial'le, 441 INTEREST, bill may be made payablo with, 72 banks limited to seven per ce.-i,., 73 rate of, in Canada and other countries, 73 if payable with, from what time, 76 bill given on usurious consideration, 192 allowed as damages on dislionorert t^ill. 310 rate before maturity does not govern after, 311 on bill dishono.L'd abroad, 313 rate of, in case of conflict of laws, 372, 377 INTERPRETATION of expressions used in Act, 22 3ft of contract, by Ic.r loci contractus, 3(3H what is meant by, 369--See Words and Pkrate» INTiiRVENING PARTY, not liable on bill negotiated back, 220 INTRODUCTION, xlv. I. (). U. OR BON, wbtther negotiable, 404 offe t of Act upon negotiability of, 405 IRPEGULAIUTY, in bill, 75, no, 17H m presentment, when excused, 237 I'M I I *: I 516 INDEX. ISSUE of bill defined, 29 date of, may be itiB.'rted in undated bill, 82 of accomniodiition bill, ITo JOINT AND SEVERAL, liability on a note may be, 408 bow differa from joint liability, 409 " I promise " by two or more is, 410 JOINT ACCEPTOR or maker in Quebec asd other provinces, 409 JOINT DRAWEES, a bill may be addressed to, 5« acceptance by some ouiy ia fiualitied, 105, 109 presentment must be to all, 235, 249 JOINT DRAWERS or ir.Jorsers, notice must be given to all, 268 JOINT PAYEES or indorsees, all must indorse, 204 JOINT STOCK COMPANY— See Corporation JUDGMENT on a bill operates as merger, 319 JUDICATURE ACT, 23. 24, 90 JUSTICE OF THE PEACE, when he may act' as notary, 424 whether entitled to fees, 426 form for protest by, 454 KNOWLEDGE as to accommodation piirty immaterial, 175 of defect of title sufKcient notice, 179 of fraud, if holder no party to, 187 of uauriouB consideration, l',)2 of dishonor not sufficient without notice, 258 L AC HES— See Diligence LAW ISIERCHANT common to England and France, 5 recognized undei- the Act, 430 what it is, 437, Hi. acceptance according to the, 98 LAW OF ENGLAND-See A'HiiZrtjKi LAWS, CONFLICT OF - See Conflict of Lmcn LEGAL HOLIDAYS-300 lloUdai/s LEGAL REPRESKNTATIVE. as pr.rty to a bill, 158 rnay indorse " without recourse," 201 See Personal licpresciUaiive — liKprimentative Capacity LEGAL TENDER, Dominion notes are a, 404 LETTER, ia sufficient notice of dishonor, 2() of credit is nut negotiable, 447 INDKX. 517 LEX DOMICILII 120, 375 fori, 331, 377 loci contractiu, 121, 865, 368, 370 loct soliUionit, 121, 369, 377 LIABILITY of drawer or indorser may be limited, 91 anteceden*/ is valuable consideration for a bill, 159 of acoeptor to pay bill, 298 of drawer is conditional, 301 of parties to bill is joint and several, 302 of indorser is conditional, 302 of stranger pigning bill, that of indorher, 30t measur. ->{, on dialionored bill, 310 of party to a bill may be renounced by holder, 339 cancelled by holder, 344 LIEN defined, 172 holder having, deemed a holder for value, 172 banker has, on bills for general balance, 172 discounter of bills has, on collateral hire receipts, ITH holder having, for part is trustee for balance, 172 notes, whether promissory notes, 45, 403 LIMITATIONS, STATUTE OF, OR FKESCRIPTION, Quebec law differs from other provinces, 18, 326 when it begins to run, 'A'JS, 329 law of Englant' as to, 329 acknowledgments to take case out of statute, 329 governed by the lex fori, 378 LIQUIDATED DAMAGES on dishonored bill, 310 LOST BILL, protest of, may be made on copy, 290 when loser has right to duplicate of, 359 action on, 359 indenmity must be given if required, 360 LUNATIC, rule in Quebec as to bill of, 122 bill of, voidable not void by English law, 122 MAKER of u'Ho given for a patent right, 191 note must oe signed by, 399, 400 note to order of, incomplete until indorsed by, 405 there may be two or more, 408 when jointly and soverally liable, 408, 410 of note not discharged by not presenting, 413 liability of, 417 estoppel as to holder in due course, 417 liability of, compared with tlmt of acceptor, 417 provisions as to acceptor apply to, with necessary modiflcatioaa, 418 personal liability of, 96, 41? I I U I -^ 518 INDKX. MANITOBA, former law as to bills in, 15, 18 Married Women's Property Act in, 123 power of corporation., under atatutea of, 127 office of notary in, 425 fees for protests in, 428 MARK, or crosa, a sufficient oignaturo, 38 to notarial note, en brevet, 461 MAliKED CHEQUE, not used in England, 380 liability of bank on, 383 MARRIED WOMAN, law of Quebec as to, 122 bill or note in Qi.^'bec for husband's debt null, 122, 124 law of other pro\ ii oea as to, l22 statutes relating to property of, 123 bill drawn or indorsed by, 131 MATERIAL ALTERATION— See Alteration MATURITY of bill not payable on demand, 80 mode of c!on:'piiting time of, 80 of bill payable in a month or nionthh, 91 liolder in due course must acquire before, 177 holder acquiring after, takes subject to equities, 21,5 of bill payable on demand, 21S) when bill deemed overdue, 215 when preeoptment necebsary to fix, 228 presentment for payment at, 242 when bill pi'otested for better security before, 287 aoccntor not discharj^'ed by non-presentment at, 293 payment m due course at or after, 318 acceptor the holder at or after, discharges bill, .337 discharge of acceptor at or aftur, discharges bill, 338 of bill accepted for honor, i!53 of bill determined by place of payment, 374 of notfi payable on demand, 410 maker of note not discharged by non-presentment ai, 413 MEASURE OK DAMAGES on dishonored bill, 310, 313 Interest af^er maturity, 810, 311 MERGER of bill in higher security discharges it, 319 MINOR cannot he bound by bill, 121 nay in (Juobec if emancipated or a trailer, 121 ratification after majority must ho in writing, 121 other parties liable on bill drawn or indorsed by, 131 presentment excused if drawee a, 237 MISCARRIAGE by post office does not invalidate notice, 275 INDKX. 519 MISDEMEANOR, in case of " patent right " bill or note, 191 MISDESCRIPTION of bill in notice not fatal unless raialeading, 265 of payee in bill, 57, 205 of drawee in bill, 101 MISSPELLING, how drawee ohonld accept in case of, 101 of name of payee or indorsee, 57, 205 how payee or indorsee should indorse in case of, 205 MISTAKE insertion of wrong dale in good faith by, 82 cancellation of signature by, is inoperative, 345 correcting a, not a material alteration, 350 MONEY, bill or note .nust be for sura certain in. 32, 40, .'59i) definition of, 40 illustrations of what is deemed, ^41-3 acceptance must be for payment in, i)8 MONTH means a calendar month, 91 maturity of a bill payable at a month or months, 91 ]\:UNICIPAL ACT, 1892, Ontario, p. 442 MUNICIPAL CODE, Quebec, p. 442 MUNICIPAL CORPORATION— See Corporation MUNICIPAL DEBENTURES, 403, 442 NEED, CASE OF— Sea Referee in Case of Need NEGLIGENCE, bad faith is something more than, 179, 228, 420 may be evidence of bad faith, 420 rule in Gill v. Cubitt not now followed, 421 bank paying crossed choquo without, 39G, 39S NEGOTIABLE, what bills are not, ()(>, 215 bill payable to particular person formerly not, G7, 70 bill payable to order or bearer, tj9 instrument defined, 197, 441 when negotiable bill ceases to be so, 214 other negotiable instruments, 441 NEGOTIATION OF BILL to holder in due course, after filUng up. 112 in breach of faith, a defect of title, 181 definition of, 190 payable to bearer, by delivery, 197 to order, by indorsement, 198 of Quebec notarial note, 198 transfer without indorsement, 199 requibi^es of indorsement to operate as, 202 must be of .vhole bill, 204 • P 520 INDEX. NEGOTIATION OF BILL— Continued. all payees or indorsees must indorHe, 204 presumed to be before bill overdue, 21'J back to previous holder, 220 presentment witliin reasonable time after, 2B1 by drawee or indorsee who has paid, 334 in other country, rights of parties, 3G5 of note payable on demand, 412 NEW BRUNSWICK, law of England introduced into, 13, 18 former law as to bills, 13 provincial kgislation as to bills, 14. 400, 427 office of notary in, 425 tariff of fees for protect in, 427 statutes of, repealed, 431, 456, 485 NON-ACCEPTANCE, naming referee in case of, 93 when bill is dishonored by, 238 recourse ajiainst drawer and indorsers on, 238 offer of qualilied acceptance may be treated as, 241 protest for non-payment may follow protest for, 286 NON-BUSINESS DAYS, holidays are, 423 not counted in delays under three days, 423 what are in Canada, 88 NON-EXISTING PAYEE, bill payable to bearer, 59 NON -JURIDICAL DAY, bill dated on, valid, 85 See Holiday NON-PAYMKNT-Stt Dishonor— Notice of Dishonor NORTH-WEST TERRITORIES, former law as to bills in, 17, 18 word " province " in Act includes. 89 Married Woman's Property Act in, 123 corporation must use the word " limited," 127 office of notary in, 425 fees for protests in, 428 "NOT NEGOTIABLE," cheque may be crossed, 393 effect of special cross! n^^, .997 NOTORIAL ACT OP HONOR, on payment supra protest, 357 basis of, 357 form of, 4G1 NOTARIAL NOTE, en brevec, 331, 423, 400 NOTARY PUBLIC must sign protest, 289 his clerk may present bill, 289 ' bank officer not to act as, 291 . INDEX. 681 NOTARY PUBLIC -Co?ivrty. or his agent, 2()0 in case drawer or indorser is known to be dead, 207 must be given to each drawer and indorser, 208 must be given on day of dishonor, or next business day, 208 agent may give, to parties liable, or to his principal, 269 principal has next business day to give, 209 each party receiving, has next business day to give, 270 suflicient to post, duly addressed post paid, 271 sender not responsible for miscarriage by post, 275 - excuses for delay in giving. 270 i! 522 INDEX. NOTICE OF DISHONOR— C'o«tJn«S-' ,;i*atVli^-i)fiM*??!tyi«'!!i«*i«MR^M*«'#W^em.W?#«sS>ft «■ \i.'/^ r^r?e»',(:.;«fi--«(F ■ '.t:'S:tf.«nr:'.-9t-:f\i ^'?r !«MMr^::n--i •'. '.. 52(1 ItiD&Z. PE15S0N deflnerl, 30, 37, 43 flotitiouH, 37, 43. 53, r>'J, (U, ()3, (54. 'J37, 2.',3 PERSONAL DEFENCES, holdtT in due course free from, 224 PERSONAL LIABILITY, when party not subject to, 162 of af^ent, 153, 158 of ofticera of oorponvtiona, 95, 153 differencH between billH and nolea, 154, 417 of executors, adniinistriitors, tutors, ate, 158 indorsement to negative, 201 PERSONAL RHPRESENTATIVB, on death of liolder bill passes to, 191) presentmont to, of dead drawee, 230, 250 acceptor, 250 should give notice of dishonor, 262 notice to, of dead drawer or indorser, 267 PLACE, bill valid without stating where drawn, 49 payable, 49 of payment not named, payable generally, 49 may be payable where drawn, 49 not (jualitied acceptance to pay at specified, 104 of payment suificient without " not elsewhere,"' 106 of business, bill not payable at, 230 bill presented at the proper, 2iC of payment named in bill or acceptance, 246 when alternative places are named, 247 of payment not specified, 248, 250 of business, presentment a'j last known, 248 presentment at proper, suflicient, 249 presentment at post oflice, 251 of protest, 287 of payment not named, when acceptor liable, 293 named, liability of acceptor, 29'^ alteration of, material, aiS adding to bill, material alteration, 348 law of, 121, 369, 'i77 law of, governs due date, 377 note must be presented at, 413 named in note, when indorser liable, 416 PLEDGE, holder of bill as, 172— See Lien discounter of bills is iiot pledgee but owner, 174 of collateral security, note may contain, 40C POSSESSION, bearer is person in, 25 delivery is transfer of, 2t) actual and constructive, 26 lO'SsswesitViE.'Vi INDEX. rOHBESmoS-- Continued. holder IB payco or indor.-ice in, 27 delivery is iirtisunied from transfer of, 116 person may hold bill as an escrow, 117 gives rij^lit to Hue, 222 adversely to real owner, 224 POST-DATED instruments valid, 85, 381 not an irrefjularity, 381 POST OFFICE, when presentment made through, 23B, 250 when demand to be made at, 251 notice of dishonor deposited in, 271 sender not liablo for niiaoarriage by, 275 letter in, belonfiB to party addressed, 270 POTHIER, Contrat de Change cited for old French law, v. based on Commercial Ordinance, 7 See Ancient French Law PREMATURE presentment for payment a nullity, 244 payment before maturity not a dischar^^e, 318 PRKSCRII'TION— See Statute of Limitations law differs in different provinces, 320 time in Quebec •> years, 32G absolutely extinf^uishes debt. 326 interruption of, by written acknwledgment, 326 runs af»ain8t persons without capacity, 327 how reckoned in case of conflict, 327 English Statutes in Canada, 327 in Ontario, Nova Scotia and Now Brunswick, 327 writing to take case out of statute, 328, 329 when statute begins to run, 328 Chahuer's five rules for England, 329 of notarial note en brevet, 331 governed by lex fori, 331, 378 PRESENTATION, payu'.ilo on, is payable on demand, 77 protest, prima facie evidence of, 429 cosis of action before, discretionary, 293, 413 PRESENTMENT FOR ACCEPTANCE, when dated as of first presentment, 102 when necessary, to fix maturity, 228 to whom, should be made, 229 place of. 229 express stipulation as to, 230 ■when not necessary, 230 527 ii «! I ■iiuniJH^ui (I: 628 INDEX. PRESENTMENT FOR ACCEPTAN 3K -ContrHWed. when delay in, excused, 231 as to bills payHble at or after sight, 2S1 e Tect of omission of, '2'A2 discharfo of drawer and indorser for want of, 232 rules as to, 234 by or on behalf of holder, 234 to ' 1 aweo at reasonable hour, 234 before bill overdue, 234 to all drawees not partners, 235 to personal representative if drawee dead, 236 when made through post office, 236 is excused if drawee dead, 237 fictitious, 237 if impossible, 237 when not excused, 238 two days after, bill is dishonored, 238 governed by law of place where presented, 373 abroad, proved by notarial copy of protest, 370 of cheque may discharge drawer, 383 dalay in, 38() provisions as to, not applicable to notes, 418 PRESENTMENT FOR PAYMENT, when not ntcesaary, 239 must be duly made, 242 drawer and indorsers discharged unless, '242 :-;, not necessary as against acceptor, 243 rules as to, !i43 time for, when bill not payable on demand, 243 payable ou demand, 243 made by holder or hy his authority, 2->5 at the proper nlace, 245 to payer or iiis representative, 245 hoar may depend on place, 245 at place specified in bill or acceptance, 246 when at address of drawee or acceptor, 240 when at place of businesa of drawee or accepter, 2 when to drawee or acceptor anywhere, 246 at proper place, when sufficient, 249 to uU drawees or acceptors not partners, 249 to representative of dead driiweo or acc(iptor, when through post oflice, 250 when at jjost office, 251 when delay in, excused, 251 should be made when cause ceases, 251 •HA.ii^.H^.^i^i^i.A i INDEX. 529 PKESENTMENT FOR PAYMENT-U -Hanufd. dispenfied with when impoBGible, 252 when drawee is lictitions, 253 as regards the drawer, 254 an indcrser, 254 by waiver express or implied, 255 and refusal dishonors bill, ''.56 acceptor liable without, if no jilace nameii, 2!)2 in action btfore, costa are discretionary, 2'J'd to acceptor for honor, S55 delay excused in, 355 governed by law of place whore made, 373 ' time for, f»overned by law of place where payable, 374 foreign protest prima facie evidence of 376 of cheque in reasonable time, 380 after countermand, 38!) death of customer, 380 of note payable on demand, 410 at a particular place, 413 action on note before, costs discretionary, 413 of note necessary to hold indorser, 415 PHESUMPTION, legal or disputable, IKi, 118 of delivery from possession, IKi that bill is inland, 52 acceptance shortly after date, 83 date of bill is correct, 84 acceptance is correct, 84 inchoate hill tilled up properly, 110 party is party for value, 189 holder is holder in due course. 18'.) IndorHcments are h\ proper order, 207 cancellation is regular 345 in favor of good faith, 410 coucluHive, or juris ft d" jure, IKJ, lis when valid delivery conclusively presumed, 116 PRINCE EDWARD ISLAND, law of England in, 14, 18 provincial legislation, 14 qualified acceptance, 106 note payable at a particular place, 413 tariff for proteat fees, 42(> PRINCIPAL AND AGENT- -See also J j;2 bank notes, 404, 441 Dominion notes, -^04, 441 , Bon or I. O. U., 404 * " indorsement neceHsary where maker also payee, 405 may contain pledge of collateral security, 406 discounted, securities go with, 406 ^. _._ ^._ wliat is an inland, 407 a foreign, 407 delivery to payee or bearer necessary to complete, 107 r INDEX. PROMISSORY NOTE— CoMtmwed. .. • may be by two or more makern, 408 may be joint or joint and several, 408 " I promise to pay " by two or more is joint and several, 410 preaentn-^ent of indorsed, payable on demand, 410 on demand, as collateral or cont;nuinf» security, 410 on demaud, when deemed overdue, 412 " at maturity," 413 must be presented at place of pu,yment, 413 maker not di^charKed by want of presentment, 413 costs of action before presentment discretionary, 413 indorser of, not liaole without presentment, 41o when place of payment by memorandum only, 416 liability of maker of, 417 estoppel of maker as to payee, 417 what provisions as to bill also apply to, 418 maker of, corresponds to acceptor, 418 first indorser to drawer who ia also payee, 418 protest of fo-^eign, necessary to bind indorsers, 418 notarial note en brevet in Quebec, 425, 4(50 form of inland, 459 foreign, 4()0 provisions of Quebec civil code relating to, 470 code of procedure relating to, 479 PROOF— See Evidence— Burden of Proof PROPERTY IN BILL, delivery may not always pass, 117 holdtr may sue without having, 222, 223 PROTEST for balance in case of partial accdptance, 242 of inland bill compulsory in Quebec, 283 optional elsewhere, 283 of foreit,n bill for non-acceptance neccr-Rary, 285 non-payment necessary, 285 in default, drawer and indorsers discliarged, 285 outside Quebec unnecebsary, unless foreign on face, 286' for non payment after proiest for non-acceptance, 286. waiver as to acceptance, 286 must be made or noted on day of dishonor, 280 may be extended later if noted on day of dishonor, 28ff for better security wiien acceptor suspends, 287 must be at place of dishonor, or within 5 miles, 287 may be at place when bill returned by post, 288 - -: in this ca..j on day of return or next day, 288 may be at any hour after non-acceptance, 288 fornonpayment only after th-ee o'clock, 288 mi «i^SrS# JSiiSS^^^^^^- ■ I I } 532 INDEX. PROTEST— Continued, presentment for, by notary's clerk, 289 must contain a copy of the bill, 289, 428 or have the origmal bill annexed, 289, 428 must be signed by notary, 289 what must be staled in, 289 seal not necessary on, 290 of lost, destroyed or detained bill on copy, 290 when, may be dispensed with, 291 delay excused, 291 must bs made when cause ceases, 291 bank clerk or a<»ent must not, 291 acceptor liable without, 294 acceptance gupra protest, only after, 351 presentment to acceptor for honor only after, 854 case of need only after, 354 in case of dishonor by acceptor for hono'", 356 payment for honor only after, 356 act of honor may be appended to, 357 payer for honor entitled to receiv 358 law of place rtetermines sufficiency of, 373 tiotarial copy makes prima facie proof of, 376 of foreign note necessary to bind indorsers, 418 may be extended later, if noted on day of dishonor, 121 when justice of the peace may, 424 liolder allowed expenses of, 310, 426 fees allowed for in different provinces, 426 forms of, 428, 449 forms of notice of, 452 j PROVINCE in Act includes th Territories, 89 holidays differ in differe>:t, 88 lefjal holiday or non-juridical day in, 88 fast or thankH^;iviug day in, 89 PROVINCIAL LEGISLATION as to bills, in Quebec, 8, 106, 462 i: Ontario, 10, 105 in Nova Scotia, 1_, 400, 484 in New Brunswick, 14, 400, 485 in Prince Edward Island, 14, 106 - PUBLIC HOLIDAY,~See Holidays PUBLIC POLICY, 185— See Contideratim QUALIFIED ACCEPTANCE defined, 103, 241 when an acceptance is, 104, 109, 114 payable at a particular place is not, 104 I- f '\ ^-^Ji- INDEX. QUALIFIED ACCEPTANCE--(7ortt/««.-d, " aud not elsewhere ' is in England, 105 was in part of Canada, 105, 413 holder may refuse to take, 241 requires assent of drawer and indorsers, 241 notice to drawer and indorse -'s of, 242 QUEBEC, French law introduced into, 7 English law in, 7 provincial legislation on bills, 8 Civil Code. 9, 4fi2-Ree Civil Code English rules of evidence, 9 old French law in, 17 compensation, 24, 324 incidental demand, 24 transfer of non -negotiable bill in, 68 holidays in, 88 law of, as to capacity, 120 minora, 121 idiots, lunatics, etc., J 22 married women, 122 companies, 127 tutors, curators, etc., 158 moral consideratior, valuable in, KiO inland bill or nc e shonld be protested in, 283. 418 insolvency of debtor makes debt mature in, 287 indorRenieiio pour aval, .SO.') novation in, 317 prescription of bill or note in 5 yearn, 320 law of, as to bom, 4tl5 joint liability in, defined, 408 office of notary in, 425 note en brevet in, 425, 460 tariff of fees for protests in, 426 municipal debentures in, 442, 443 bf.nk deposit receipts in, 446 civil code, articles relating to bills, etc., 4<'? Code of Civil Procedure, relating to bills, etc., 479 RATIFICATKJN of bill made by infant or minor, 121 of unauthorized signature, 139 forged signature incapabio of, 142 estoppel may have same effecn as, 189, 144 REASONABLE DILIGENCE, in presentment for ncceptance, 231, 237 in presentment for payment, 245, 250, 251, 252 in giving notice of dishonor, 278 in making protest, 291 583 41, J -^ r"' ' i^n IT ^TVfc ■»■ 'frj^f^rmiT 584 INDEX. ■■ i .' J r* REASONABLE HOUR for presentment for acceptance, 234 payment, 2t5 LiiASONABLE TIME, incomplete bill Hhould be iilled up in, 112 for presenting bill payable on demand, 21!), 243 bill at or after sight, presented or negotiated in, 2;-!l how determined, 232, 243, 411 dissent from qualified acceptance in, 242 for presenting cheque, 380 note payable on demand, 412 ' • ' RECOURSE, indorsing without, 94, 158, 202 RE-EXCHANGE in case of bill dishonored abroad, 313 BEFEREE IN CASE OF NEED defined, 93 resort to, optional, 03 was compulsory under code, 03 protest required before presentment to, 354 REFUSAL, drawee may accept after, 102 date of such acceptance, 102 REGULAR on its face, a bill, 177 an undated bill is not, 48, 178 a postdated cheque may be, 178 RE-ISSUE OF BILL, by drawer, indorber or acceptor, 220 paid by indorsor or drawer, 334 of bank notes, 4U4 RELEASE— See Discharge REMEDY, lex fori, governs as to, 377 REMOTE PARTIES, delivery as regards, 116 no' A,e of dishonor, 270 RENEWAL BILL, payment by, 319, 323 suspends remedy on original, 319, 823 See Novation REN UNCIATION by holder when discharges bill, 338 must be in writing unless bill given up, 338 by holder diiicharges any party, 339 does not affect holder in due course, 339 See Discharge 4 RE-OPENED, how crossed cheque may be, 394 i REPEALED Act in second Schedule, 431, 466 proviso as to aotjuired rights, etc., 431 Bank Act not to be affected, 431 certain Imperial Act» not to apply to Canada, 432 all prior Dominion or Provincial Acts, 17 lit •>»*»n:-W»t««S!t,W*K!W»' '■ 53G JNDEX. BET-OFF, included in "action," 23 defined, 23 Bubject of provinciiil legislation, 23 in action on note for patent rijjht, 193 compared with compensation m Quebec, 24, 32'1 whether equity attaching to a bill, 324, 325 difference between Quebec and other provinces, 324 BIGHT, at or after, bill payable, at Bight in Enf^dand ecjuivalent to demand, 77 Canada has days of grace, 78, 80, 86, 92 a determinable future time, 32, 39, 79 Amending Act of 1891 as to, 80, 83, 103, 232, 435 acceptance undated holder may insert date, 82 when time begins to run, 90 dishonored and subsequently accepted, 102 presentment necessary to (ix maturity, 228 must be presented or negotiated in reasonable time, 231 SIGNATURE of drawer necessary to a bill, 32, 38 may be in pencil, 38 with a cross or maik, 38, 4G1 by initials, assumed name, etc., 39, i36 on any part of bill, 39 of drawee sufficient acceptance, 99 usually across face of bill, 99 where bin name ia misspelt, 101 of acceptor may be on bill before that of drawer, 101 on blank paper converted into bill, 110 used for drawer, acceptor or indorser, 110 essential to liability on bill, 132 may be a trade or assumed name, 132, 135 of firm name, same as of all partners, 132, 136 of agent as regards principal, 133 forged or unauthorized, is inoperative, 139, 147 unauthorized, may be ratified, 139 forged, cannot be ratified, 13!t by procuration notice of limited authority, 147 when principal bound by agent's, 147 witli added words, effect of, 152 rule of construction as to principal and agent, 153 of oflBoera for a company, 163 in a representative capacity, 158 of each party to bill presumed for value, 189 of indorser operates as negotiation, 202 indorsement by one's proper, 205 INDEX. SIGNATURE— Continued. to notice of dishonor not necessary, 266 of notary neoosaary to protewt, 289 cancellation of, by holder discharf^ea party. 341 mistake, '6H erasing, a material alteration, 349 of acceptor for honor, 352 of maker to promissory note, 390, 400 of several makers to a note, 408, 410, 424 not necessarily by party's own hand, 421 sufficient if by or under his authority, 421 seal of a corporation is sufficient, 423 SIMPLE CONTRACT defined, KJO consideration for, valuable consideration for bill, l.;9 SPECIAL CROSSING of cheque defined, 393 drawer may make or unmake, 394 bank amy make, 394 to one bank only, 394 SPECIAL INDORSEMENT.def ned, 209, 210 indorsee under, similar to payee, 210 blank indorsement may be converted into, iilO holder cannot strike out, in his chain of title, 211 SPECIFIED EVENT cerUin to happen, 78, 80, 81 bill payable on or after, 80 at a determinable future time, 79 SPECIFIED PERSON, bill is payable to, or to order of. 32 such person is called the payee, 43 bill to, and not to order of, is negotiable, 71 note payable to, or to order of, 399, 400 SPECIFIED PLACE, acceptance to pay at, is not qualified, 104 " and not elsewhere, " 105 presentment for payment must bo at, 246, 413,410 acceptor not dischargnd by omission to present at, 29;> maker of note not dischartjed by omission to present at, 413 STAMPS, cases relatinj? to, not cited, v. in Euf^land, may check improper filling up, 110 want of foreign, will not invalidate bill in Canada, 367 TATUTE OF FRAUDS, guarantee on a note, 1(52 contract not binding under, 107 STATUTE OF LIMITATIONS— See [.imitations 537 I 588 INDEX. I! STATUTES CITED— Imperial : 21 Jac. I., o. 16, p. 327 29 Ger. II., c. 7,p.85 9 Wm. III., c. 17, p. 359 3 & 4 Anne. c. 9, pp. 12, 16, 92, 99, 327, 3r>9 14 Geo. III., c. 83, p. 8 15 Geo, III., c. 51, pp. 10. 432 17 Geo. III., c. 30. pp. 10, 4.S2 1 & 2 Geo. IV., c. 78, pp. 99, 100, 105, 100 19 & 20 Vict. o. 97, pp. 15. 99, 100, 392 24 4 31 & .35 Vict. 0. 74, p. 78 39A-40 Vict. c. 81, p. 392 41 A 42 Vict. 0. 13, pp. 99, 100 45 & 46 Viot. c. 61, Bills oi Exchange Act, 1882, pp. 3, 4, 21, .50, 60, 10,5, 140, 17.>, ' *• 85, p. 327 Priiict Edionrd Island • 13 Geo. III., c. 5, p. 14 17 Geo. III., c. .-), p. 50 20 Geo. III., c. 3, p. 80 6 Wm. IV., c. 3, p. 14 24 Vict. c. 28, p. 14 27 Vict. c. 6, pp. 14, 9;;, 106 Manitoba : 38 Vict. c. 12, p. 1(5 K. S. Man. o. 1, pp. 08, 442 25, pp. 43, 127 95, p. 123 108, p. 425 Sorth-U'est Territories : Rev. Ord. c. 30. pp. 43, 127 40, p. 425 51, p. 68 British Columbia : Cons. Acts, 0. 19, p 68 21, p. 128 69, p. 17 80, p. 123 89, p. 425 STOLEN BILL, title of buna fide holder to, lU, 116, 191 BTRANGER signing- bill liable as indorser, 304 acceptirif^ bill not liable as acceptor, 9a to bill may accept for honor, 351 pay bill for honor, 356 STRIKING OUT INDORSEMEIITS. 211 SU B3EQUENT holder, rifjht-} of, 187 SUM CERTAIN, bill or note must be for, 32, 40, 399 what is deemed, 40-3, 72 SUM PAYABLE, in bill, 32 must bo u\ money only, 32, 40-3 may be with interest or by instalments, 72-4 with exclianfie, 72. 75 "with interest" means from date, 70 i INDKX. 641 HUM PAYABLE— C'o;i/.»ii((?ri. words control figures in case of variai.'"e, 75 may be filled up if left blank, 110 holder in duo courHo may recover, 112, 224 with interest from maturity or dishonor, 310 in case of dishonor, 31*^ determined by rate of exchange on de,y of dishonor, 313, 374 alteration of, material, 318 holder in due course protected, 345 in foreign currency, how calculated, 374 SUNDAY, bill not invalid because dated on, 85 laws in different provinces, 86 a holiday or non-juridical day for hills, 88 bill falling due on, payable next business day, 80 May 24th falling on, Monday is observed, 88 July Ist falling on, Monday is observed, 88 no presentment for acceptance on, 234 is not counted in delay of less than three days, 423 8UPPLEMP:NTARY provisions, 419 SUPRA PROTEST-See Acceptance fin- Honor SURETY— See Principal and Surety SUSPENSION of acceptor, protest for better security, 287 of right of action by accepting a bill, 31',), 323 taking a renewal, 319, 323 TARIFF of fees for protests in different provinces, 42G TELEGRAPH, notice of dishonor by, 2G4 TELLER of bank must not act as notary, 291 THANKSGIVING DAY holiday for bills, 89 TIME OF PAYMENT fixed or determinable future time, 32, 79, 398 by instalments, each treated as a separate bill, 74 none expressed, bill is payable on demand, 77 " on presentation" is payable on demand, 77 accepted or indorsed wlieu overdue, on demand, 79 method of computing, 86, 89 when dr.vT, of grace are added, 8() first day excluded, last included, 89 when delay reckoned from acceptance, 90 dishonor, 90 when bill for a month or months, 91 alteration of, material, 348 ' TIME, REASONABLE— See Reasonable Tune '"^'w^W^mmmm 542 INDKX. TITLE— See also T)efect of Title of party negotiating? to holder in due -"".rse, 177, 181 aoqii'red from holder in due coarse, 187 to patent right note or bill, hI'A a(;quir>jd by transfer without indoraement, 199 of restrictive indorsee, 214 of person taking overdue bill, 215 bill before maturity with notice, 220 of holder in due course, 220 to cheque crossed "not negotiable" 397 liability of bank if customer has no title to crossed cheque, 398 of person acquiring stale demand note, 412 TOT.\L FAILURE OF CONSIDERATION- See Faihire TRADE NAME, liability ^f person sigtiing bill in, 132, 135 TRANSFER for value without indorsement, 190 right of, under restrictive indorsement, 214 bill may contain words prohibiting, 0(), 70 intention to prohibit, must be clearly expressed, 60 of chose in action or debt, 67 See Delivery — Indorsement — Negotiation TRANSFERABLE, bill indicating intention that it be not, 66, 70 See also Negotiable TRANSFEREE of patent right bill or note, 193 acquires greater rights only by negotiation, 196 constituted holder by negotiation, 196 by delivery, 197 by indorsement and delivery, 198 without indorsement of bill to order, 199 TRANSFERRER BY DELIVERY defined, 314 liability of, 314 wliat he warrants, 316 TRUE DATE of issue or acceptance, when holder may insert, 32 bill payable to holder in due course, as if, 82 TRUSTEE becoming party to a bill, 152, 1,58 holder with lien for part is, for balance, 172 restrictive indorsee conipai-ed to, 214 UNAUTHORIZED SIGNATURE, ratification of. 139 estoppel as to, 139, 144 UNCONDITIONAL, bill must be, 31, 33, 46 note must be, 399, 400 UNDATED bill or acceptance, holder may insert true date, 82 UNLAWFUL MEANS, bill or acceptance obtainedjby. 181 UNQUALIFIED ACCEPTANCE, holder entitled to, 241 INDEX. U8AGE. when general, becomes part of law .nerchant. m lii. particular or local, require, proof, 438 may determine negotiability, 441, Im. USURIOUS CONSIDERATION, bill for, when void. 192 CONTllACT, bill given on. Vn USURY abolished io Canada, 73, m except as tobanKa, ar i no penalty as to them, 73, IJS VAGLIANO'S CASE, 61-3 VALIb. bill may be. but not negotiable, 66 b-U improperly filled up is, to holder m due course, 112 delivery to holde, in due course presumed, lib VAI UABLE CONSIDERATION for bill, how constituted, 15» antecedent debt or liability deemed, 159 whether a moral consideration is, ICO VALUE defined, 29 Viill need not specify, 48 . • J^vahie received " not now necessary m bill. 49 and valuable consideration syiumymous, 29, l.^J may be S'ven at any time, 171 one; given, holder deemed holder foi-, in holder having lien is deemed holder for, .72 acr.mraodation party is one who has not received, .74 liable to holder for, 17o holder in due course must have given, 1<7./7'J'J_«» every party to bill deemed to have signed for 18J burden of proof as to when fraud, etc proved, 18J transfer of bill to order for, without indorsement, 1J9 VERBAL ACCEPTANCE formerly sufficient. 99 Btill valid in some of the United States, 100 notice of acceptance binds acceptor, 114 ^^ notice of dishonor may be suttlo.ient, 263. 2bo VOID, bill, for defects of title, 180 usurious consider ition, 192 omitting " given for a patent riglit, " 19» WAGER, when bill void as being for, 187 WAIVER of holders' duties by drawer, 94 indorser, 94 of protest, 95 ,• t o.-c of presentment may be express or nnphed 2.,5 may be rn writing or verbal, or by conduct. loH binding without consideration, 255 543 I 111 r i 1 -.^i^-' 54 J INDEX. WAIVER -CoHf»;j««d. •• of notice of dishonor may be express or implied, 279 before or after dishonor, 279 enures to other partieB, 2t<0 WAR, an excuse for not presenting a bill, 252 WARRANT FOR PAYMENT OF DIVIDEND, provisions as to crossed cheques appiy, 414 WARRANTOR of a note, 1G2 party sued no ri>>ht to call in, 22R * not a party to the bill, 282 English decisions reyardin;^, 30.5 French law of aval, 305— See Aval whether person indorsing above payie is, 307-9 WARRANTY by acceptor, 29!) drawer, iiOl indorwer, 308 transferror by delivery, 315 maker of a note, 417 WIFll — See Married Woman •' WITHOUT GRACE, " time bill, has no days of fjrace, D.H " WITHOUT RECOURSE, " indorsement, effect of, 94 WORDS, prohibiting transfer, 6(5, 69 must bo clear, (ifi amount expressed in, overrides fit,'ureB, 75 added to sij^nature to limit liability, 152 on face of bill or note for patent right, 193 WORDS AND PHRASES DFFINED, acceptance, 22, 95 accommodation bill or party, 174, 176 action, 23 allouije, 203 at maturity, 338 aval, 80.5 bad faith, 419 Bank, 25 bank notes, 404 bearer, 25 bill, 26 bill of exchange, 31 . • hon, 404 business day, 424 catMe, 160 -^ .- , - ^ :'^ INDEX. im 'V 4' WOIIDS AND PHRASES— C7on(inu«(i. cheque, 380 common law, 437 compenaation, 324 consideration, 160 crossed cheque, 3'.)3 counter claim, 23 days of grace, 86 ' defect of title, 181, 215 defence, 2!) delivery, 26 divideml warrant, 430 drawee, 37 " drawing" a bill, 365 duress, 182 escrow, 117 estoppel, 144 fictitious person, CA) foreign bill, SO note, 407 forgery, 141 fraud, 182 good faith, 179 holder, 27 holder for value, 171 holder in due course, 177, 224 holiday, 87 immediate parties, 116 incidental demand, 24 indorsee, 210 indorsement, 28, 202 inland bill, 49 note, 407 interpretation, 369 I. O. U.,404 issue, 2'J law merchant, 437 : lien, 172 LieutcnautGovernor, 89 merger, 31 i) money, 40 month, 91 negotiation, l!>9 note, 26 novation, 319 oveidue, 219 _ : ' m'i-.h.e.a. — 35 Ff/Jffil' -«■"-■■/- 546 INDEX. WORDS AND PHRASES -CoTi/muerf. payee, 43 payment, 318 payment in due course, 318 person, 30 prescription, 326 presumptionB, 116 procuration, 209 promissory noto, 399 province, 89 referee in case of need, 93 remote party, 116 zai\s recours, 94 . set-off, 23 signatuire, 38 simple contract, 160 lupra protest, 350 transferrer by delivery, 314 value, 29 without recourse, 94 WRITING detiued, 30, 35 bill is contract in, 35 parol evidence cannot contradict, 35 excciiptious to foregoing rule, 36 aoceytance must be in, 98, 368 . , .; ■ indfiraement must be ir, 202 " notice of dishonor may be in, 265 renunciation must be in, unless bill given up, 338 signature to any, by another, 421 WRONG DATE, effect of insertion of, 82. ' WRONG DESIGNATION of drawee, acceptance in case of, 101 of payer or indorsee, indorsement, 2(15 YEAR, drawer of cheque paid on forged indorsement has, 139 drawee who has paid cheque has some period, 140, 144 bills are prescribed in Quebec in 5 years, 326 limitation in other provinces in 6 years, 327 /\K, u 1 / • <■ '■> '1 ' V ^' -*; ' • ■' ' * ' ^^'3■''' "... -■ . 01 - i' I * ^ * .1