V. '*:.' TREATISE ON THE LAW RELATING TO BILLS, NOTES, CHEQUES AND 1 U'S, inr ■' ■ If S. R. CLARKE, of Osgoode Hall» BARRISTBR-AT-LAW, Author o, " The Criminal Law of Canada," " The Law nf Insuranc' TORONTO: R. CARSWELL, LAW BOOKSELLER AND PUBLISHER, 26 AND 28 Adelaide Street East. 1875. 1 1 q ? o 4 '6 Entered according^ to Act of the Parliament of Canada, in the year of our Lord one thousand eight hundred and seventy-five, by Robut CAEtwiti, in the Office of the Minister of Agriculture. PRIMTID BT McLEISH & CO. tOROKTO. -( w To the Honourable John ^illgarb Camcroit %€,, iH.J. \ Treasurer of the Law Society in Ontario, This work is, by permission, most respectfully inscribed as a slight tribute to his varied and brilliant talents and as a token of the affectionate regard in ivhich he is held by the profession among whom he has so long and successfully labored. (, f M PREFACE. I have been induced to publish this work in the hop* that it will be a useful supplement to English and Ameri- can works on the same subject. I have endeavored to trace the law as it exists in each of the Provinces of the Dominion, and have availed myself of all the published reports, the statutes of each Province, and also the C^vil Code of the Province of Quebec. A few cases not else- where reported have been taken from Stevens* Digest of Reports in New Brunswick. I have not thought it necessary to cite authorities for every position taken in the book, but I trust that all the points discussed are sustainable by competent authority. Since Confeder'^tion commercial intercourse between the several Provinces of the Dominion has very much increased, and if my efforts render the laws of each Pro- vince more intelligible in the others I will be abundantly satisfied. The law as to bills and notes is now so much assimilated that the few slight differences which exist might, with great propriety, be swept away, and I, for one will, with great pleasure hail the day when there is one uniform code of commercial law throughout the Dominion. S. R. G. ToROxto, leth Jfay, 1874. '/ ■!:■ ■'>• '-;■' .- ■.',, ,/* t " A > I CONTENTS. CHAPTER I. Introductory— Op Bills and Notes 1 CHAPTER IJ. Of the Power of Partiks to Contract, and therein op AoENcv AND Partnership 19 CHAPTER III. Of CoNsrosBATioN 37 CHAPTER IV. Of Transfer 52 CHAPTER V. Of Payment, Satisfaction, Extinguishment and Suspension 73 CHAPTER VI. Of Presentment and Acceptance 98 CHAPTER VII. Of Principal and Surety 114 CHAPTER VIII. Of Notice op Dishonor 130 CHAPTER IX. Op the Alteration and Forgery op Bills and NoTEi . . 158 CHAPTER X. Op Interest and Damages 167 CHAPTER XI. Op the Statute of Limitations 188 CHAPTER XII. Op Stamps 196 CHAPTER XIII. Of Set Off 206 CHAPTER XIV. Op Cheques 312 CHAPTER XV. Of Actions on Bills and Notes 228 CHAPTER XVI. Of Pleading and EyiDBNCE 284 TABLE OF CASES. PAOI. A Aokermnn V. Elin'nsperjr«r. . 175 Adainn v. 'I'horuns 238 A'lamH V. Wordlcy 109 AlilerHon v Lftnpdftlc KJ'J Alj-XHUdcr V. Bun li field, 2 15, 21T Allm V. MtNaufjhton 23T Allimtn v. Centml Bank 12 Aliman v. Kensel 230 Almon V, Cock 69 Am Ex. Bank T. McMicktn. 181 Anrona ▼. Marks 12, 223 AnderHon t. Macaulay !i\ Arid(*r8on V. Park 224 Andri' w8 v. Tal bot 236 Artlier V, Baniford 45 Armfleld t. Ailporl 107 Armour v. (Jatcs 28 Arthur V. IJer 117 Afihh'y V. .Jamt'B 193 Antor V. Benn 182 Atkinson v. Hawdon 162 AulM-rt V. Walwh • 76 Auld^o V. McDougal 24 Autttin T. Farmer .19 B Badeau V. BrauU 20 Batrnall V. Andrews 225 Bailey v. Bodtinham 218 Baldwin V. Hitchcock 105 Ball V. Gibson 123 Bauburv V. Lessett 109 Bank B.N. Ay Elliott 2 28 Bank B. N. A. r. Jones 2c'5 Bunk B. N. A. V. I!osk . . . 1 39, 1 44 Bank M N. A. v. Sherwood. . 39 B»»nk Michigan v. Gray 13B Bank Montreal v. Artuour . . 88 Bank Montreal v. DeLatre,24 27 Bank Montreal v. G^over,l.^4 135 Bank Montreal v. Harrison.. 180 Bank Montreal v. Scott 171 Bank Montreal v. Smart 28 PAOi. Bank Montreal T. Snyder... . 229 Bank N. H. T. KnowlVu HI Bank U. C. t. Bartleti 44 Bank U C. ▼. Gwynno 236 Bank U. (J. v. .lardine 118 Bank U. V. LizarH 89 Bank U. C. ▼. Orkvrnian. . .. 119 Bank U. C. V. I'arHonH 98 Bank U. C. V Uuttan 70 Bank U. C. v. Sh*'rwood .... 100 Bank U. C. T. Smith 142 Bank U. C. ▼. Street 134 Bank U. C. ▼. ThomaH 119 Bank U. C. V. Upton 239 Banque J. C. T. Strachan . . . . 84 Barber t. Richard (51 Barlow t. Clark 83 Barnum t. Turnbull 176 I'aroMgh T. Whitt* 1 74 Barrington, Ke 60 BaHkerville T.Brown 207 Bass V. Clivo 110 Batchclor v. Laurence 18 Baxter v. Baynes 204, 206 Beaubien t. Hu.sHcn 19 Beaudry v. Latiamme 11 Bedell V. Eaton 117 Beech r. Jones , 226 Beccham v. Smith 16 Beeching V. Gower 101 Beeman V. Duck 110 Bell T. Gardener 162 Berton t. C«;ntral Bank 106 Bettis V. Wcllcr 6 Bird T. Gammon 191 Birolean v. Dei duin 49 Bishop T. Church 34 Bishop V. Hayward 67 Bishop V. Howe 231 Blain v. Olipha'nt 127 Blake T. Harvey 123 Blake V. Walsh 12, 44 Blanckenbagen v. Blundell.. 10 Blaney V. Hendricks 174 TABIiE OF CASKS. VAnn Blinn V. Dixon 134 Buddinuton V. Schlencker. .. 215 Bodeiiliani V. Purchas 83 Bodyer V. Archer., 193 Boehm V. Skirling 218 Booth V. Barclay 55 Boiilton V. Jontis 9 Bower Baak V. Monteiro. ... 109 Bowktir V. Fenn 185 Boyd V McLnuchlan 89 Boyes v. JoHeph 140 Boys V. JoHeph 235 Bradbury V. Baillle 189 Bradbury v, Doole 141 Bradbury v. Oliver 238 Bradley v. James 194 Brandon v. Delmasse 88 Bray V. Hftdwen 140 Breeze v. Baldwin 67 Brett V. Smith 230 Brewcrton V. Parker 167 Briphtly v. Rankin 234 Britton V. Fisher 64 Brooks V. Clegg 66 Brown V. Boulton 103 Brown v. Carr 116 Brown V. Harraden 77 Brown V Lee 124 Browning V. B. Am. P.S'cy.. 25 Bruce v. Bruce 166 Biunet V. Lalonde 53 Buckmaster V. Russell 191 Bull V. Cuvillier 71 Bullitt V. Shaw 236 Burchfield V. Moore 161, 1H5 Burke's case l:'2 Burnell V, Minot 18 Burnett v. Monaghan 1 39 Burns V. Harper 71 Burrough v. Moss 209 Burt V. Palmer 192 o Calhoun V Col pitta 167 Calvert V. Gordon 120 Cami'lge v. Allenby 59, 103 Caropbtll V. McKinnon 9 Canadian B. C v. Ross 66 Canby V. Wright 142 Carden V. Fiuley 77 Garden V. Renter 84, 85 Care w v. Duckworth 218 Carr V. Coulter 67 Carstairs v. RoUeston 117 Cazett V. Kirk 8 PAOB. Chad wick V. Allen 9 Chalmers V Lanion 64 Cliamberlin v. Ball 238 Cliambers V. Miliar 221 Chandler v. Beckwith 102 Chapman V. Bi.shop 137 Chapmin v. I Mibrey 235 Chapman v. Keene 134 Child V. Monins 29 Cholet V. Duple-ssis 19 Christie V. Fousinch 188 City Bank v. Bank Montreal 213 City Bank v. Chont^y 26 City Glasgow B.ink v. Miir- dock 30, 116 Clark V. Cock 105 Clark V. Devlin 122 CLirke v. Lazarus 40 Ciaxton v. Swift 89, 120 Clayton's case 83 CIt ave v. Jones 194 Clerk v. Blackstock 16 Clipperton v Spettigue 125 C'oatt's v. Kelty ] 2 Codd v. Lewis 143 Coleman V. Bredman 224 Collidge V. Mnywood 188 Collins V. Bradshaw 6 Collins V. Martin 61 Com. Bank v. Allan 181 Com Bank V.Cotton 170 Com. Bank V. Culver 98 Com. Bank. V. Cuvillier 92 Com. Bunk v. Ecch'S 139 Com. Bank v. Harris I7i Com. Bank v. Johnston.. 98, 118 Com. Bank V. Weller 141 Com. Bank V. Wilson 121 Commercial Bank v. Flem- ing 106, 212 Commercial Bunk v Page... 41 Cook V. Fowl) r 163 Cooper V. Meyer HO Corporation of Belleville v. Fahey 36 Corporation of Cy. Perth v. McGregor 4, 70 Corporation N. Gwillimbury V.Moore 175 Cote v. Leraieux 50 Cote V. Morrison 185 Cowing V. Vinceut 193 (Jox V. Troy no Creighton V. Allen 16, 192 Crombie v. Overholtzcr 50 TAJ;LE OF CASEH, ^ PAOK. CroflB T. Smith 136 CroBBley V. Ham 63 Grouse V. Park 167 CuDHrd V. Tozer 161 Cnnliffe v. Whitehead 63 Cuvillier r. Fraser 67 D Daly V. Graham 82 Dana T. Bradley J 04 Darah V. Church 185 Darling v. Hitchcock 185 Darnell V. WilliamH 40 Da iSilva v. Kullur 218 Dasylva v. Dufour 15 DftvidHon V. Bartictt 123 Davis V. Dunn 98 Davis V. McSherry 288 Dawtion v. Morgan 225 Day V. Sculthorpe 129 Do Beauvoir V. (Jwnd T. Smith .. 109 Handy side V. Courtney 132 Han. Leer. Zngnry 66 Lewis V. Nichtdcon 25 Linxt^ll v. lioiisor.. . . 19 Liverpool B. I'ank v. Walker ' Lloyd V. I'ligJie 2i!0 Luvell V. Meikle 80 Low V. Owen 131 Lowe V. Hall 203 Liindy v. Carr 45 Lyman V. CLamard 91 M ' Maclae v. Sutherland 16 Mair v. Jones 236 Mai r V. McLean 41 Malcom V. Scoft 213 March V. Waro 16 Mar^h v, Pediler 85 MarHhall, ex parte 226 Manotti V. WilliHms 214 Ma«on q. t. V. Mossop..203, 205 ilaRHoe V. Crehasse 121 Mathewson V. lirouse 92 MitttiiewH V. ilavdon 95 Maynard V. Renaud 224 Mellish T. Himeon 223 Melville V. Bedell 7 i Merchants Hank v. Birch.. 136 Merrick v. Sherwood 19 MciriU V. Maxwell 5 Meriitt v. Woods . . 238 Metropolitan Bank v. Snnre 210 M.yer V. Hutchinson 181 Michael Y. Myers 120 Millier V. Kerrier 39 i Mills V. Fowkes 193 Mii'liell V. Ensfiish 125 Mi'ffatt V. Uo'-s. 71, 127 M. ffatt V. Itobertsoii 239 Mcffrttt V. Vance 237 Mog^erid^e V Jones.. .... .. 40 Muliue exparte 72 FAOl. Montgomery V. Boucher... lt)8 Mooditi V. liowatt 20 Moore V. Manning 63 Moore V. Sullivar. 109, 237 Morley V. Culverwell 218 Motrin v. Deslauricrs 71 Morrison V. Kyle 12^ Moulo V. Brown 216, 217 Mount V. Duna JOO Mountstephen v. Brook.... 194 Muilraan v. I) Kguino 94 Miiir V. Cameron 3'J Munrov. Cox 58 Murphy V. Cotram 200 Murray V. Kast Ind. Co...35, 183 Miiiriiy v. King J 36 Murray v. Miller 92 Myers v. W^ilkins 9 Mc McCalla v. Tlobinson.... .. 200 McCann V. Kiley 16 McCarroIl V. Ileardon .38 McCoy v. Diueen h2 McDontll V. Lowry 105 iVh Far lane v. Dewey 46 MfGillivray V. Keefer 39 Mclnnes v. Milton........ 62 M'.Iver v. Dennison 20 Mclver v. McFarlane 105 McKay v. Orin'ey 204 McKinnon v. Campbell 15 McLaren v. Muirhead 240 McLellan v. McLellan lOl McLennan v. McMonies.... 66 McL^od v. Carman 68 McLeod v. McKay 91 Nafis V. Sonlea 123 Napier V. Schneider 233 Nash V. Gibbon 8 Needham's Case, Sir John ... 29 New Bk Assce Co. v. Ausley 45 Newhorn V. Lawrence 7 15 Nichols V. Diamond I06 Niihols V. Kaynt 8 183 Nicholson V. Hevill 122 North V. Wakefield 122 Korton V. El lam 188 Nuwlin V. Roach 102 O'Brien V. Stevenson 97 Ockerman v. Black lock.... 9 XIV TABLK OV CAMES. PAUR. O'Keefo v. Dunn (53 OriidRe v. Sheilionrne. ... 15, 77 Owen V. Qiu'bi'c- Mank....... 2lfi Owen V. Von Ulster lo7 Owen V. Wilkinrton 16 P Pacand v. Corporation Hali- fax 3G Palmar v. Fabnotock 7 Palmer V, McLennan 11, 204 Parker v. McCn-a 92 Patterson v. Tapley 102 Pattonv. Melville 10 Peck V. Phi |»pon 127 Peel V. Kingsmill 82 Peele v. Rohinson 28 Perham v. lU-ynal 192 Perley v. Howard 105 Perley V. Loney 124 Perrinpv Hone 17 Perry v. Lawless 239 Perry v. Milne 15 Peters V. Brown 194 Peto v. Reynolds 9 Phillips V. Iin Thurn. . ..110, 112 Phillips V. Phillips 191 Pidgeon v. Dagenais 185 Pierce V. Folhergill 174 Pike V. Street 5G Pinkney V, Hall 30 Polev.Ford 89 Polhill V. Walter 106 Porthouse v. Parker 135 Pottv. Cbgg 222 Poulton V. Dolmsge 38 Powell V. Roche 76 Prevost V. Pickle 46 Price V. Neal 110, 166 Price v. Price 84 Prince v. Brnnatte 110 Pring v. Clarkson 120 Pyper v. McKay .66 Q Quebec Bank y. Sewell 201 R Racey v. Carman 230 Rumsdell v. Telfer 55 Ratchfordv. Sriffith 99 llawlinson v. Stone 35 Reed v. Reed 7 Reg. V. Bigge 54 Reg. V. Craig 164, 165 I'AOE. Reg. V. Wilson 164 Rew v. Fett.'t.... •••• 193 Hex V. Bontien 164 R"X V. Elsworth 164 Kex V. Francis 164 ltag "v Abitliol 108 Serle v. Norton 21") Serle V. Waterwoilh* • •• .... 2!) Seymour v. Wright 50 Shaw V, Boomer 02 Shaw V. Crawford 118 Shelton V Braithwaite 132 Sheppards case 164 Sheiiffv. Holcomb 184, 18 J Shuter V. Paxton 96 Shuttleworth ex-parte 60 Sibieev, Tiipp 85 Sifton V. Anderson 116 Sifton V. McCahe 22 7 Slgourney v. Lloyd 53 Simson V. Intrham 83 Sinclair V. Henderson 46 Sinclair v. Bobson 79 Skilbetk v. Porter f.S Slatt«ry v. Turney 228 Slipper V. Stidstone 209 Small V. Bodgers 237 Smith V. Abbott 109 Smith V. Burton 90 Smith V. Chester 110 ^^mith V, Hill 25 Smith V Leveaux 222 Smith T. Marsach 110 Smith V, Mercer 166, 219 Smith T. Nicholson...* 211 Smith V. Richardson ] 28 Smith v. Sullivan 230 Smith V. Vertue 109 Smith V. Winter 122 Bnarr v. Toronto P.B.4 S.S'y, 33 Solly v.Hinde 40 Spillerv. WestJake [ 40 Sproat V. Matthews 108 Stackweather v. Andrews. . . 223 Steele V. Harmer 88 Stephens v. Berry 200, 205 Stevens V, Lloyd 161 Stevens t. Lynch .', 1 22 Stevenson, V. Bissett 223 Stevenson v. Kimpton 200 Stoekwood v. Duan 209 Stones V. Butt **[ 223 Stratby v. Nicholls . . . ... . .[ 41 PAOR. Street v. Walsh 1 62 St. Stephoa B. By. Co. v. Black 81, 104 Sturdy v. Henderson 188 Sturtevant v. Ford 05 Suse V. Pompe 233 Sutton V. Toomer 102 Swaine V Ware 124 Swan V. Steele 30 Sweeting V. Halse Ill Swinyard V. Bowes 136 T Tanner V. Smart 191, 193 Tarleton v. Allhausen 89 Tarratt V. Wilmot 140, 237 Tate V. Hilbert 218, 219 Taylor v. Dobbins 220 Taylor v. Golding 204 Taylor V. Grier 133 Terry V. Parker 104 Thewv. Adarus 5, 71 Thomas V. Grace 17 Thompson v. Cotterell 131 Thompson v. Farr 40 Thompson v. Keith , , . 90 'i'hompson v. McDonald 117 Thompson v. Percival 87 Thorn v. Sandford 13 1 Thome v. Scovell 81 Thorpe V. Booth 188 Thurgar V. Clarke 69 Tindall V.Bell 225 Tippets V. Heane 193 Tomkins V, Ashby 11 Toms V. Powell 225 Torrance v. Bank B. N. A . . . 219 Treutell v. Barandon 58 Truscott v.Lagourge 104 Tullock v. Dunn 191 Turney V. Dodwell 193 Tuttle v. Smith 47 V Vanleuven v. Vandusen 55 VanWartv. Woolley 136 Vennerv. Fuhvoye 103 Vernon V. Bouverie 76 Vernon v. Hankey 218 Vincent v. Horlock 56 w Wnin V.Bailey 84 Walker V. Barnes 174 XVI TABLE OP CASES. PAOB. Walker V, Clements 188 Walker V. O'Kdlly 70 Wallace v. Henderson 10 WallbridKe V. Beckett 49 Waller V. Atwood 108 W'inkford v . Wankford 29 Wanzur v. Storkunburgh .... 73 Ward V. Evaua 60 Warrington V, Fiirbar 136 Watters V. RtiifTeusteiu 103 Waynam v. Bend 11 Webb's case 164 WcgersloflFe v. Keen 108 Wtillgv. Hopkins 40 West V. Bown 64 West T. Mclnnes 66 Whatoly V. Tricker Ill Whitehead v. Walker 188 Whitney V.Burke 236 Wilcocka v. Tinning 71 Wildiiian ex parte 224 Willett V. Do Grosbois 49 Williams V. Germain 112 Williams v. Marshall 89 Williams V. Noxon 52 Willins v. Smith 192 Wilson V. Aitkin 182 rAOR. WilHon V. Deniers..., 195 WilHon V. Gates 6 WilHon V. Pringle 135, 139 Windham V, Wither 224 Wine V. Prowse 2j5 WiHmer v. VVismer 41 Witliall V. Ma8t(irman 122 Withall V. lluHton 39, 42 Wooil V. Braddick 192 Wood V. Hutt 141 Wood V. Ross 39, 64, 210 Wood V. Nhaw 43, 71 Wood V. Stephenson 215 Woodtliorpe v. Lawes 135 Wool ley V. Huntun 201, 2ot Wordsworth v. Macdon^all.. 127 Woikiniin v. McKinistiy. . .. 6:> Wortliin^ton v. Grirnsditch.. 193 Writfht v. Meriam 69 Wynne v. Raikes Iu7 " Yatea ex parte .' . . 54 Young v. Cole 60 Young V. Fluke 16 < Yonug v. Grote 66,219 Young V. Waggoner 203 • / ,• ■■■ i; r r: J^^j CHAPTER I. . . ■V '-:''-•..(>•/,;„ ' ... .f ■;.. ,^ ^. .:,,.,„„,»;; INTRODUCTORY. . ^ , i ' • ■ ) • ■•■ ■ 1 ■■ f- I.'', ,'-' \> ^^^^^ .„■ '' ■ m' .» OF BILLS AND NOTES. '' ' , ' A bill of exchange is an unconditional written order addressed by A to B, directing him to pay a sum of money, named therein, to C. In this case, A (who is called the drawer of the bill) is said to draw upon B, who is, therefore, called the drawee ; and C, the person to whom the money is to be paid, is on that account called the payee. - . - The drawer may be himself the payee, and he may direct B to pay him simply (as by the words ^^pay to me,") or to pay to him or his order (as by the words "pay to me or my order.") />;^i,) pf :.{*•■<>'•'■■■■ The drawer having written this order, it should be presented to the drawee to receive his assent. If the drawee assents to it, he testifies such assent by writing his name across it, which is called accepting the bill or draft, after which the drawee is called the acceptor. If he refuses to accept, he is said to dishonor the draft or bill by non-acceptance. When a person, in order to transfer his interest in & bill, writes his name on the back, he is called an in- dorser, and the person to whom his rights are so trans- ferred is called an indorsee. Bills are often indorsed when the interest in them would pass without such in- dorsement, but in many cases it is necessary to indorse a bill in order to pass an interest therein ; as if the bill be payable to the drawer or his order, the drawer must indorse in order to transfer his interest, and if the bill be payable to C or his order, must indorse. 1 2 LAW OF BILLS AND MOTES. The dr&wcr and C would in these cases be called indorserSy and the persons taking from them indorsees. When no such indorsement is necessary to transfer the interest in the bill, it Is said to be payable to bearer; and fi, person transferring without indorsement is simply called the transferor, and the person who takes fi'om him the transferee. The holder is, in the words of Mr. Justice Byles, "the person in actual or constructive possession of the bill, and entitled at law to recover its contents from* the parties to it." A promissory note is an absolute promise in writing, signed but not sealed, by A to B, to pay to B, or to B or his order, a specified sum on demand, or at a certain time, (a) The person giving the promise is said to be the maker o^ the note, and occupies a position resembling that of the acceptor of a bill ; and the words transferor and transferee, indorser and indorsee, and holder, are applicable with reference to notes, the same as to bills of exchange. An ordinary bank note is a banker's promissory note. Bills of exchange, being intended for the transfer and transmission to third parties of debts due by one man to another, the drawer is supposed to be the creditor of the drawee, who is presumed to have in his hands effects of the drawer which the latter is de- sirous of transferring. An ordinary banker's cheque is a bill of exchange payable to bearer on demand. It is therefore for the drawer to consult his coti- veniecce as to how he shall direct the drawee to pay the money (1), at what time, or (2), at what place, and (8), to whom. For instance, the bill may be payable HI) at sight, six months after date or after sight ; (2), in Toronto, or At any bank ; (3), to the drawer or his order. (a) See any r. Worden, 29 Q.B.n.C. 637. FORM AND OPERATION OF BILLS AND NOTES. 3 Instead of directing the drawee to pay to the drawer or his order, the drawer may make the hill payahle to a third person (naming him), or to such person or his order, or to bearer. If the bill is not payable to the payee's order, it is not negotiable, and is of no use except to the payee. If it is payable to the payee's order, the payee, in order to transfer his right to it, must indorse it, and the per- son to whom he gives it will take the money on the bill at maturity, by virtue of the order testified by the indorsement. If the indorsement be by simply writing the in- dorser's name, as is usual, the bill is then payable to bearer, and passes by delivery; though at each succes- sive delivery an indorsement is often icquired for the security of the transferee. The same rules apply where the bill is payable to the drawer or his order. ' If the drawee is directed to pay " to bearer," the bill needs no indorsement to confer a title to the money, though indorsements are often given as the bill changes liands. ■' '''-■':'■ -■■-"••■' ■ -:■-■ :■ ■ ';'••■■ ■^■' -■- Promissory notes may be made payable in the same way as bills, and with the same results. The acceptor is the person who is to be liable to the drawer on a bill, so long as it remains in the drawer's hands, and is always the person primarily liable; and when the drawer, by indorsement (which is in general necessary), transfers the bill to another, the drawer in bis turn becomes liable, with the acceptor, to the holder of the bill, and so does every subsequent indor&er — the security thus increasing with each in- dorsement. The drawer is also liable upon every unaccepted draft of his which he transfers, for by so doing he makes an implied undertaking that upon presentment to the drawee it shall be accepted. 1 J . . LAW 0¥ BILLS AND NOTES. ^ y The maker of a note occupies a position similar to that of an acceptor of a bill, being the person pri- marily liahlty and when the note is transferred by in- dorsement by the payee, the indorser likewise becomes liable to the holder of the note, as does every subse- quent indorser. By drawing a bill payable to a third person the drawer enters into a conditional contract to pay the payee, his order or the bearer, as the case may be, if the acceptor do not. By accepting a bill or making a note, the acceptor or maker enters into an absolute contract to pay the payee, or order, or bearer, as the instrument may require. The effect of indorsing is a conditional contract on the part of the indorser, to pay the immediate or any suc- ceeding indorsee or bearer, in case of the acceptor's or maker's default. Having explained the foregoing general points in regard to bilh and notes, we proceed to notice the several judi- cial decisions in Canada, by which they have been elucidated. The first part of the definitiou of a bill of exchange is that it is an unconditional order. In accord- ance with v-his principle an instrument in the following form : , ,• . . '• In the Queen's Bench. ., The Municipal Cou >cil of the ^ • > . " Please payEger- County of Perth — Plaintiffs^ i ton G. Ryerson, vs. [ Esq., Attorney for Thomas Smith, Defendant. J ^ the Plaintiff, in this cause, the sum of one hund bed red and twenty- five pounds, on account of the ± ^ Plaintiff's claim in this suit ; dated the 20th ^ o August, 1856. To Alexander McGregor, County . ** Treasurer," was held not a bill of exchange, *^ the amount pay- able being dependent on the con tinuance of the Plaintiff's claim in the suit, and therefore subject to a contingency, (a) (a) Corporation of th« County of Perth, y. McGrafor, 11 Q.B.U.0. 469; GENERAL REQUISITES OF BILLS AND NOTES. 5 So the order can only be in writing, and an instrument under seal is not a promissory note. Thus an instrument in the following form : £50 0. For value received, we jointly and severally promise to pay to W. P. Osborne, or bearer, the sum of Fifty Founds currency, in manner following, &c. As witness our hands and seals, this 29th April, 1856. m Signed, Sealed and Delivered ^ In presence of > M. M. Patman. L.S. RICHARD SMITH. J E. H. Gates. L.S. TTas held clearly not a promisory note, but a specialty, and of course the same rule will apply to bills of ex- change, (a) So when an instrument purporting to be a promissory note is made by an incorporated company, under their common seal, the payee and indorser of such instrument is not liable to his indorsee, as the indorser of a note would be lor being sealed, it is not a note nor negotiable as such. (6) There cannot be two acceptors to a bill by distinct and separate acceptances, nor can the indorser of a note be considered as a new maker, and where A makes a note payable to B or order, and C writes hia name on the back, without B's first endorsement, C cannot be con- sidered as a new maker, and is not liable on the note, (c) But to make a bill of exchange there must be an acceptor or drawee ; and to make a promissory note thore must be a promise to pay : an instrument in the following form : * £228 7 6. "Port Hope, Dec. 8th, 185S. Three months after date, pay to the order of William '») Wllion ▼. Gaten. 16 Q.B. , U.C. 278. ») Merritt v. Maxwell, 14 Q.B., U.C. 60, \^' V- ■^d'^mi, 6 O. S., 60. See alio Jones t. Aihcrolt, « O.S., 154 : M« poit P 4iUe 8 LAW OF DILLS AND N0TB8. Thompson, at Port Hope, the sum of two hundred anJ twenty-eight poundH, Heven shillingH and sixpence^ currency, for value received. Signed, John Thompson. hut not directed to any person, was hold not a promissory note, and it seems also, would not be a bill of exchange, (a) A promissory note signed by a cross in the presence of one witness is good (6) ; and the signature or indorse- ment of negotiable instruments, may be by a mark, (c) A promissory note or bill of exchange, must be for the payment of money absolutely, and it must be a good note in itself, and cannot depend for its validity upon some alleged collateral agreement not visible on the face of it. Thus a promise to pay a certain sum on a day named " in cash or mortgage upon real estate," is not a promissory note, not being an absolute promise to pay in money, and it does not become a note by the maker's election to pay in cash, (d) So the instrument must bo for the payment of money in specie, and a promise to pay a certain sum in Canada Bills would not be a good note, for such bills though cur- rency are not specie or money, {e) So a note made in this Province payable in current funds of the United States of America is not a promissory note. (/) V . ;. . ■ The Statute of Canada 29 & 30 Vic, Cap. 10, author- ises the issue of Provincial or Dominion notes, and pro- vides that they shall be redeemable in specie on presenta- tion at offices to be established for that purpose, and that such notes shall be a legal tender, except ttt the offices- aforesaid. . - (a) Forward r. Thompson, 12 Q- B., U. C. 103. ») Oollint T. Bndthaw. 10 L. C. R. 866. (•) Oflorge T. Surrey, 1 M. fc M. &]6. (/) Going T. Barwick, 16 Q. B. U. C. 45. U) Gray r. Worden. 29 Q. B. U. C. 635. (f) Btttla T. WaUar, 80 Q. B. U. C. S8. OBNERAL REQUISM'KH OF BILLS AND NOTKS. 7 On tho same principle that the note must be for the pay- ment of money, an inNtniment in the following form waa held not to bo a promitiHury note : " Three months after date, we, or either of us, promise to pay to Elias S. Reed, or John Eraser, his guardian, at the Post office, Embro, £110 17 currency, value received, in rent of farm." (a) The instrument must bo for the payment of money and not of any other commodity, and a paper writing* undertaking to pay A B or bearer, a certain sum of money, one half in cash and one half in grain, is not a promissory note, and therefore not negotiable. (6) So, where an instrument was made in the following form : " Ten days after date wo promise to pay Mr. New- horn the sum of £83 15 for value received ;" and at the time tho instrumf^nt was made a memorandum was en- dorsed on it as follows : "It is agreed that this note is to be paid by a lawful mortgage, with interest on the samt;, having three years to run," it was held that the endorse- ment being written at the time the instrument was made, must be considered as forming a part of it, and conse- quently the sum was to be paid by a lawful mortgage, and not in money, and the instrument, therefore, was not a promissory note, {c) A promissory note must be made for a sum certain, and an instrument purporting to be a promissory note with the words "with exchange on New York," was held not to be a promissory note, the amount being rendered uncer- tain by the uncertainty of exchange, (d) So an instrument drawn by A upon B requesting him to pay to the order of A five months after date $400 with (a) Reed v. RMd, 11 a B. U. C. 28. (b) Gillin T. Cutlw, 1L.C.J. 277. See «lao Melrille ▼. Bedell, Sterens Dig. M.B. Bepe. «5. (e) Newhorn ▼, L»wrance, t Q B. U. C. 869. (d) Palmer t. Fahnestock, 9 C. P. U. C. 172 ; ■• c. 20 Q. B. U. C. SOT. See alio Grant t. Yonoff, 23 Q. B. U. C. 387 ; Sazton v. titevonion, 23 C. P. U. C. 608. *^ LAW OF BILLS AND NOTES. Qurrent rate of exchange on New York is not a Bill of Exchange, for, as the rate of exchange fluctuates, the amount due at maturity is not ascertained, (a) A promissory note must be payable at some specified time, or on a contingency which must happen. (6) If the note is payable eventually, upon a certain con- tingency, it will be good although the promise is in the Alternative. Thus, an instrument in the following form was held a valid promissory note : "YoNOE Street, 29th April, 1839. ■" "Seventeen months after date I promise to pay to Mr. James Hogg or order, the sum of X50, without interest, or three years and five months after date with two years interest, for value received." (c) ,: ., An instrument which is conditional in its terms, will not amount to a promissory note, nor will the happening of the contingency upon which payment depends cure the defect. Thus, an instrument in the following form : " $400. Toronto, 12th May, 1858. " Six months after date we promise to pay to James Boulton, Esq., or order, the sum of Four hundred dollars, for value received. Signed, "N.J "W.W. B. - "E.D.W." " The above note is to be paid in merchantable lumber, to be delivered in Toronto, at cash price, and an addi- tional quantity of lumber suflicient to pay the freight is to be sent in. If not so paid within the time, then the «ams to be paid in cash," was held not to be a promissory note, and not being a note when made, it did not become (») collet V. Kirk 4 Allen, 543. See alto Nuh v. Gibbon, 4 Allen, 479. (i) Rueeell v. Well?. 5 O. 8. 72S. ;. , .. , v The sixth section of the statute provides that in cas« notice of the assignment is given to the debtor or other person liable in respect of a chose in action arrising out of contract, the assignee shall have, hold and enjoy the same, free from any claims, defences or equities which might arise after such notice as against his assignor. This section, however, does not apply to bills of exchange or promissory notes, nor is there any necessity that it should be so extended. , , The common law is, that on the assignment of an ordinary chose in action, the title of the assignee is not complete until he has given notice to the debtor of the assignment ; but negotiable securities form an excep- tion to this rule, and the delivery of a note payable to bearer vests the absolute property therein in the transferee, without any notice given by him to the maker ; and his right to sue cannot be defeated by any subsequent dealings between the maker and his trans- feror. For instance, a payment made by the maker to the original holder after the transfer, would be at his own risk, and would not prevent the transferee from afterwards recovering the amount against the maker, even though the note was overdue at the time of the transfer. (6) Promissory notes, however, derive their assignable properties from the Stat. 3 & 4 Anne, c. 9, which makes them assignable and indorsable, like bills of exchange, and enables the holder to bring his action ou the note itself. fa) Rovtnweer t. Robinson, 28 C. P. U. C. 3B0. (*) Fargnton t. Stewart, 2 U. 0. L. J., 116. PITABLE BT INSTALMENTS. IS f * A note may be made payable by instnlments, and yet be assignable within the Statute of 8 & 4 Anne, -.-_; A .. A writing merely certifying that a person is indebted unto another in a certain sum of money is not nego- tiable as a promissory note, (c) A date is not in general essential to the validity of a bill or note, and if there be no date it will be con- sidered as dated at the time it was made. (/) But the date of a promissory note is prima facie proof that such note was made on the day of its date, and a party suing on a note cannot prove that it was actu- ally made on a day posterior to its date, (g) fa) Orridge t. Sherbom 11 M. ft W., 374. (6) lb. fe) McEinnon v. Campbell, 6 U. Ck L. J. 58. Newborn t. Lawrence, 5 Q. B. IT. C. .-, Perry ▼. MUne, 6 L. C. J. 121. (t) DasTlva t. Dnfoar, 16 L. C. R. 291. If) De la Courtier V. Bellamy, 2 Show, 422. Hague t. French, 3 B. Ai P. ITS. Oilee T. Boarn, 6 M. & S. 73. ig) Bran* y. Croae, 16 L. C. B. 469. 16 LAW OF BILLS AND NOTES. The date of a note is uot evidence of the date of the contract out of which the consideration upon the note arises, noi* does it afford any evidence of the time when the consideration of the note arose. If, therefore, it is material to determine the le;',*:;• J: ■'ir '^ 1*,"- », 19 CDAPTER II. OP TUB POWER OP PARTIES TO CONTRACT AND THEREIN OF AOENCY AND PARTNERSHIP. ' An infant, that is a person under full age, cannot bind himself or herself by a bill or note, unless it be merely for the price of necessaries, and not carrying interest. But a person after he comes of age is liable upon a note made by him when an infant, if after coming of age he promises to pay it. (a) Married women cannot bind themselves, unless they have separate property under " The Married Women's Property Act, 1872," or have separate property vested in trustees for them ; in which latter case the proceed- ings must be in a Court of Equity. (6) :. ♦ It has been held in Quebec that the promissory note of a married woman, separated as to property from her husband, given for provisions and necessaries used ill the family, in favour of her husband, and by him indorsed, is valid without proof of express autho- rity to her to sign the same, (c) So where a note was signed by a married woman, separated as to property from her husband, the Court held it valid, though signed without the husband's concurrence, it appearing that the wife had assumed the quality of a pulilic merciiant, (d) The ground of the decision in these cases was that the notes were given for necessaries supplied to the {a) FJdher t. Jewett. Berton'e N. B. Rep§. 35. (b) S«e as to tbi« point Merritk v. Shfrwocl, S2 C. P. U. C. 197. (e) rh..|et T. UapfeeBlf, 12 I.. C. R., 308; 6 L. O. J. 81. (lO Btmubien v. Biumb, 12 L. 0. R. 47. IP LAW OF DILLS AND NOTES. wife for tho U80 of tho family, and probably, in Buch a cftHO, tho hnsband's authority would bo presumed. Under ordinary circumstances, even though a wifo \d separated from her husband, she cannot, without Bpecial authority from him, niako a promissory note ovon in respect of purchases made by her. (a) But thouf^h infants and married women in general cannot bind themselves, yet they may bo agents for others, so as to bind those others; and a married woman may bo an agent as well for strangers as for her husband ; and if a husband expressly or impliedly constitute his wifo his agent for tho purpose of making notes ho will bo liable for all acts do.io by her in tho scopo of her authority. /Thus if a man makes a note payable to his wifo or order ho thereby gives her authority to endorse it as his agent, and her indorsee will have a right to recover against tho husband, the maker of the note, (b) A not© made payable to A, " or to his wife, and to no other person," 's tho same as if made payable to A alone, and his executors may sue upon it. (c) Insane persons are under disability to contract only while they are insane, unless they have been declared lunatics under a commission of lunacy, in which case the commission must be superseded before any valid contract can be mad© with thorn even during a lucid interval. Idiots are persons who never have sufficient wits to be of a contracting mind, so that a though th©y may go through an exterior form of contracting, as by making a mark, yet no actual contract can be made with them. Persons who are drunk, or whos© mental faculties are by some accident materially impaired, whether for («) Badenn t. Branlt. 1 L. C J. 171. <») M Iv«rv. n'mlMin. IH Q B. U. C.«l». c) Muudi* r. Itowutt, 14 <^. B. V. 0. 27i. ' PRINCIPAL AND AGENT. fl A long or a short timo, arc, during such statci, incap- able of contracting. ■ . ' , I But to ascertain whether a person is capable of por- Bonally binding himself is generally far easier than to discover, in cases where lie affects to act as agent, whether he is capable of binding those whom he pro- tends to represent. This, which at first sight would appear simple, will be found to require careful attention. ' . ' It is scarcely necessary to say that where one man appoints another his ugent (which may be by word of mouth as well as by writing, and no particular form is necessary,) the agent becomes able to bind his principal as to all ma**'»r8 within the scope of his authority. We are not speaking now of contracts under seal, i. e. by deed, to execute which the agent must be appointed by deed, for this work does not treat of any contracts which come under that class. But it is not merely by virtue of an actual authority that one man becomes able to bind another; for A may hold such a position with regard to B, as that without such authority to act as agent, nay, in the face of an express contract not to act as agent, A will be presumed by the law to have authority «o to act, and will be capable of binding B in contracts made by all persons who ar3 not aware of the actual arrangement between A and B. In other words, a man who is not actually an agent, may be an agent to the world, though in so acting he be exceeding his authority, or even be guilty of a breach of contract as between himself and his supposed principal. Authority, therefore, is divided into real and presvmp- iive ; real being where a man has actually or impliedlj authorized another to do certain acts ; and presumptive being where a man by his conduct holds out another 22 LAW OF BILLS AND NOTES. as being authorized to bind him : for whether that other be really authorized or not, the public have under ^ certain circumstances a right to conclude that such authority exists. In fact, real authority arises from the act of the prin- cipal, and presumptive authority from the appearances held out to the world. And both these kinds ot au- thority may be either limited^ i. e. as to time, particular acts, or mode of business, or general^ i. e. extending to all acts connected with the principal's affairs at all times. If the supposed agent acts without, or exceeds his real authority, and has no presumptive authority, he alone is liable. In case of doubt whether a man has real authority or not, the best course, where practicable, is to ask his principal. Where the alleged authority is in writing, and is shewn to you, you must judge for yourself of its sufficiency, and whether the act which the agent proposes to do is within its scope. There are many cases where you may be quite sure that a man is agent for another for some purposes, as in the case of clerks, foremen, attorneys, &c. ; but you are not entitled to presume from the situations of these persons that they are capable of binding their employer in bill transactions; yon must therefore be satisfied before dealing with them that they have a distinct authority, or a presumptive one, from a ratification of their former dealings. ; ,. i.:::i. . -i. An agent may have a special or limited authority referring |o a single bill or note, or he may have a general authority to become a party to all bills or notes : clerks, and foremen at home, and other agents at a distance, are often general agents. A general authority to transact business docs not enable the agcm< to bind his principal by accepting or indorsing bills. And special or limited authoiities to accept or indorse are construed strictly. AUTHORITY OF AGENTS. ^ , "We will now pass on to the cases of presumptivo authority ; that is, cases where, not knowing whether a man is authorized or not, you may presume that ho is so. Authority may be presumed from custom and acquiescence; as where A had been in the habit of indorsing and accepting for B in his name, and B had recognized A's acts (as by paying the bills or other- wise), B cannot defend an action on one of A's accep- tances, on the ground that it is a forgery. And it is a question for a jury whether a man has held out another to the world as his agent by thus ratifying and adopt- ing his acts. Where an agent proposes to indorse bills which are already in his hands, it is quite as important to inquire into his authority, as if he were about to draw or accept a bill ; for, unless he be authorized, the only person bound by such indorsement will be the agent himself. This refers to bills payable to order; if, however, the bills are payable lo bearer^ the agent may be presumed to have authority to transfer. But in whatever way the bills are payable, the transferee, if he knows the agent, has no authority to transfer, cannot recover on the bills. -'■- '■^"'-■- ''■^^'-'^ -,;. --^-^a'^^-ii :::.!^ And when overdue bills, even though payable to bearer are improperly transferred by an agent, the transferee cannot recover upon them, though he were ignorant of the absence of authority to transfer. The fact of their being overdue should put the transferee upon his enquiry; — he takes them at his peril. ' When & general agent is once constituted, his autho- rity is presumed to continue till notice is given of its revocation. "When a customer has dealt with a prin- cipal through an agent, or has become acquainted with the fact of his agency through business transactions^ the customer is entitled to presume that the agency 24 LAW OF BILLS AND NOTES. continues, until he has individually received notice that it has ceased. To persons who have not had such dealings with the firm, notice in the Gazette is sufiicient. An agent holding a hill or note may sue and recover upon it the same as the principal ; hut if the principal lannot recover, no more can the agent. So a principal, though his name do not appear on the bill or note, niay take the benefit of it, if it be held for him by his agent : but is subject to any defence that might be set up against his agent. Thus, where a principal delivered a hill to his agent to be discounted, and the agent treated it as his own, and the trans- feree who discounted it only paid the agent a part of the money, the principal was held entitled to recover the remainder of the money from the discounter. But in that case, if the defendant, the discounter, had had a set off against the agent, it could have been success- fully pleaded against the principal. ; J i A general power of attorney to an agent to sign bills, notes, &c., and to superintend, manage and direct all the afiairs of the principal, gives him a power to iiidorse notes, and an indorsement to pay to the trustees of an insolvent firm without naming them is sufficiently cer- tain, on showing who they are, and tha^. they act in that capacity, (a) It is a general principle that the acceptance admits the ability of the drawer to make the bill, and it admits also his signature, and where the bill is drawn by a person signing as agent of a company upon a defendant who accepts the bill, the acceptance admits the signa- ture of the agent and his authority from the company to draw the bill. It also precludes the setting up of any legal technical objections in regard to the composi- tion or description of the company or tLeir ability to draw the bill, {b) (a) Anld^a v. M'Donf^all, 3 O. 8. WD. (h) Bank Montreal v. De Laire, 6 Q. B. IT. C. 302. AUTHORITY OF AGENTS. , |5 But such acceptance woulc! be no admission of the agent's authority to indorse the bill, though his indorse- ment were on the bill at the time of acceptance, (a) The authority of an agent specially authorized to draw a bill of exchange for a particular purpose ceases on tl:e acceptance, and if the drawer is discharged by want V. '^otice of dishonour, the agent cannot, without further express authority, revive the liability by agreeing to waive the legal discharge. (6) A party who, on the face of a note, signs as agent for the makers, cannot, by indorsing his name thereon, render himself liable to the payee as maker of the note. Thus, where a note was signed " George D. Kobinson & * Co., per Stephen Hill, jr.," and the name of " Stephen Hill, jr.," was indorsed on the note, the Court held t^at Kobinson & Co. were the makers ot the note, and that Hill was not liable as maker, (c) The acceptance of a bill of exchange by the officer of a society, if not within the scope of his regular duties as such officer, is, unless specially authorized by the society, not binding upon it. (d) An agent cannot appoint another person to act for bim, unless specially authorized to do so. ■ s . No action lies upon a bill except against those who are in some shape parties to the bill itself. Where, therefore, an agent indorses, the principal cannot be held liable on the bill as an indorser where his name does not appear in any shape upon it. (e) In such a case as this, the agent would be personally liable. An agent who makes a contract as agent, thereby impliedly undertakes that he has authority, and he and his executors are liable in an action ex con- iractu, if he really had no authority. (/) , , (a) Rohlneon T. Tflirow. 7 Tftnnt. 465. ib) M'Ghle V. Gilbttrt. I Allen. 2*5. (r) Smith T. Hill, 1 Allen. 213. (d) Brownini! v. BrlMi^h Am. P. Society, 3 L. C. J. 306. «r) Rocfi V. Codd. 7 ti. B. U. C. 64. "Six months after date, for value received, we pro- mise to pay to A. K. Boomer, Esquire, or his order, at the City Bank, Montreal, the sum of four hundred and twenty- four pounds sixteen shillings and two pence currency, with interest, from dat'^- " Geo. II. Chei:?5Y, "President Grand Trunk Telegraph Co. "F. A. Whitney, " Secretary G. Grand Trunk Telegraph Co." The seal of the company was affixed, and it was held that the makers were not personally liable on the above instrument, as being their promissory note, (c) («) Tendbltter v. Furrow. S M. ft 8. 3«l ; Sow«pby T. Batcher, 2 a It IL 363. {b) FoHter V. Gedilen. 14 Q. B. U. C. 23». (c) City Bank v. Cb«ney, ifi Q. B. U. C. 400. . -> PERSONAL LIABILITY OF AGENTS. ' Sf An action was brought on the following instrument bythepayee: ,< ^ ;,' ;: i; * :»v i - J "Montreal, July 9, 1847. "£225. " Three months after date pay to the order of Alex- ander Simpson, Esq., cashier of the Bank of Montreal, two hundred and twenty-five pounds currency, for Talue received. " (Signed) The Coalbrooke Dale Compant, per "Philip Holland. " To P. C. De Latre, Esq., President Niagara Dock and Harbor Company, Niagara, C.W." The bill was accepted thus, in writing "Accepted payable at the office of the Bank of Upper Canada, Niagara. " (Signed) P. C. De Latre, "President N. H. & D. Co." And it was held that the acceptor had rendered him- self personally liable, (a) ' G, being the secretary of an insurance company, gave the following note for a loss sustained by an in- surer therein : »?•-;:!•,•?/...-: -..M-v ,;.;-,'.i.i.i-j' '';'." jf "X1,000 currency. '* '' '' ■ - -s:, , ,, -..? , - " Sixty days after date I promise to pay to the order of James Sword, Esq., of Colborne, the sum of one thousand pounds currency, value received by the On- tario Marine and Fire Insurance Company, payable at the Gore Bank in Hamilton. "(Signed) C. Horatio Gates, *' . Secretary of the Company." (( The Court held that the Secretary wp': personally liable on the note, and a plea that the same was taken (a) Bank Montreal r. De Latre, 5 Q. B. U. C. 861 * ¥ 28 '' LAW OF BILL8 AND NOTES. for a liability of the company, and with the understand- ing that they were to pay the same, was held bad, as setting up a contemporaneous verbal agreement to vary the terms of a written contract, (a) «-v Where a bill of exchange was drawn by a person under the following signature and description :— r" W. Lynn Smart, Secretary of the N". & D. Rs. ^^3. Co.," on the president ot the company, described as follows: — *' To George Macbeth, Esq., President, London, C.W.," and the bill was accepted as follows:- *' Accepted. George Macbeth, President." It was held that both the president and secretary were personally liable on the bill, the statute 18 Vic. c. 182 sec. 18, only author- izing the company to draw, accept, or endorse bills by the president, or vice-president, and not by the secre- tary, and further requiring that the drawing or accept- ance by the president should be countersigned by the secretary. (6) The defendant, as Commissioner of the New Bruns- wick & Canada Kailway Company, drew a bill of exchange on the company to pay for work done on the railway, and signed it " J. J. Robinson, Commissioner." The bill was duly accepted, and the drawer indorsed it to the plaintiff. The drawer knew for what purpose the bill was drawn, and that the defendant was the agent of the company, but it did not appear that the plaintiff was aware of these facts. It was held that the defendant was personally liable to the plaintiff", and that the defendant should, if he did not intend to make himself liable, have signed the bill on behalf of the company or used clear words to show that he intended to exempt himself from personal liability, (c) An executor, like an agent, is personally liable on making, drawing, indorsing, or accepting negotiable (a) Armonr t. Oatep, 8 C P. U. C. 548. ih) Bank Montreal t Smart. 10 C P. U. C. 15. (•) P«ele T. Robinaon, 4 Allvu, S61. PERSONAL LIABILITY OF EXECUTORS. instruments, though he describe himself as executor, unless ho expressly confine his stipulation to pay out of the estate, (a) If notes are given by persons describing themselvea as executors for a debt accruinir after the testator's death, they will be personally liable on the notes, and they would be liable in the same manner if the debt had accrued in the lifetime of the testator and after his death the executors had given the notes, (b) If a creditor constitute his debtor executor, the debt is released and extinguished ; hence it follows that if the holder of a bill appoint the acceptor his executor the acceptor is discharged and all the other parties also^ for a release to the principal discharges the surety, and if one of several joint debtors be appointed executor it is a release to all, and though thoy were liable severally as well as jointly. The debt is also released where ono of several executors is indebted, and though the execu- tor die without having either proved the will or ad- ministered, (c) . ■- ,;',:^. •,^!,.-: ;-'-/'■ ..■.]':.. The taking out letters of administration by a debtor to his creditor is merely a suspension of the legal remedies as between the parties, but being the act of law, and not the act of the intestate, it is no extinguishment of the debt, and the action will revive when the affairs of the intestate and of the administrator are no longer in the hands of the same person, (d) In many deeds and agreements of partnership there is a stipulation that one partner shall not draw, indorse or accept biUs without the consent of his co-partners. The consequence of a violation of this stipulation is, as be- tween the partners, to create a right of action at the suit of the injured partner, against the partner violating it, («) Chi'd T. MoTiJn*. 2 B. 4 B. 460; Serle v. Waterworth, 4 M. & W. 9; LlTcr- pool K. Bk. V. Walker. 4 Oh G. A J. 24. (») Kerr v. P«rfoiiM 11 C.P.U.C. 618. (c) Byles on Bills, 0th edition, 64-5. (<() Sir Jolia NeedLam's case, 8 Coke, 135 ; Wankford r. Wankfoid, 1 Salk. 299. 19 ' LAW OF BILLS AND NOTES. and to protect the former against bills improperly drawn, indorsed or accepted when in the hands of a holder with notice. But such agreement will be no defence as against a party who has given value for the bill without notice. In fact, unless a bill is absolutely void, it is good in the hands of a bona fide indorsee for value. If one partner in trade become a party to a bill or note, the act will render all the partners liable to a bona fide holder, although the instrument had no relation to the joint trade, and the other partners are wholly ignorant of the transaction, or were even intentionally defrauded by their co-partner. The plaintiff, having a claim against M, agreed to give him time, on receiving a good indorsed note, and M sent him a note made by himself, payable to W M or order, and indorsed by W M and by the firm of " J. & J. Carveth." The plaintiff took the note before it was due, knowing nothing of the circuinstances under which it was indorsed by the firm, or of the authority of James Carveth, who indorsed it, to use the partnership name. When it fell due, James Carveth being absent from the country, the plaintiff sued" the other partner, John, and was hold entitled to recover, (a) The law presumes that each partner in trade is en- trusted by his co-partners with a general authority in all partnership affairs, and when a bill is signed by one partner in the name of the firm the assent of the firm is to be presumed from the use of the name of the firm by one of the partners, and the onus of proving the contrary rests on those seeking to rebut the presumption. (6) Each partner, therefore, by making, drawing, indorsing or accepting negotiable instruments in the name of the firm, (c) and in the course of the partnership transactions, binds the firm, whether he sign the name of the firm («) Henderson v. C«rveth. 16 Q. B. U. 324. (6) City QIasjfuw Bank v. Murdoch, 11 C. P. U. C. 138. (e) Harrison v. Jackson. 7 T. R. 207 ; Pinkney y. Hall, 1 Bftlk. 12C ; Swan t. BtmK T But 210 ; Ridley v. Tftylor, 13 Eaat 175. POWERS AND LIABILITIES OF PARTNERS. SI simply, or sign by procuration, or accept in his own name a bill drawn on the firm, (a) The name of the firm must be used without any sub- stantial variation. But this extended power of drawing bills is only enjoyed by partners in trode, and partners not in trade cannot bind each other by bills, without ex- press authority. Therefore, one attorney who is partner with another has not from that relation alone, power to bind his co-partner by a bill or note, (h) In the case of partners in trade there is an implied power from that relation. In other cases the authority to draw must be expressly conferred. • ; , , A note signod A. & Co. by B., who is not a partner in the firm prima facie imports that B. signs the note for the fii'm, and not as one of the firm, (c) A dormant partner, whose name does not appear, is bound by bills drawn, accepted or indorsed by his co- partners in the name of the firm, and not only when the bills are negotiated for the benefit of the firm, but when they are given by one of the partners for his own private debt, provided the holders were not aware of the circum- stance, (r/) for credit is given to the firm generally, of whomsoever it may consist. So a party whose name ap- pears in a firm as a nominal or ostensible partner is liable on all bills and notes made in the name of the firm, though he really has no interest therein, (e) We will endeavour to illustrate the different rights which a contracting party may have against a dormant and an ostensible partner. ' If at the time you deal with the firm of "A and B," you know that C is a dormant partner, and that D is an ostensible partner in the firm, they are of course both liable to you. But if, after you have taken an acceptance (a) MoRon v. Rurosey, 1 C»mp. 884 ; ne Jenkiiu t. Morris, 16 Bl & W. 879 : Stepheat ▼. ReynoMs, 5 H & N. 613. (*) fledley v. Bviiibridge. 8 Q. B. 310. ie) Dowllng v. l-astwood, 8 Q. B. U. C. 876. id) Vere v Ashhy. 10 b & C. 288 ; Lloyd v. Ashby, 8 B. & Ad. 2.1. r v j j r s ^ («) S«e DioiieuBon y. Valpy, 10 B. & 0. 141 ; Gumey ▼. Evans, 3 H. & N. 121 32 LAW OF BILLS AND NOTES. I I of "A and B," you discover that C ia a dormant partner, and that D has been acting aw a partner, you raay treat G as liable to you on the acceptance, for he has been re- ceiving, directly or indirectly, a portion of the profits of the firm, which is the fund to which creditors look for payment. But you cannot make D liable, who was, in the case supposed, merely an ostensible partner, for the only ground on which he could bo liable to you was that you contracted with him and on hia credit, and that you did not do, for you did not know him as a partner. To put it shortly : The man who is really a partner is liable, though he was not known to be a partner; and the man who holds himself out as a partner is liable to those who thought him one, whether he was one or not. Thus there are two clases of persons who are liable on a bill or note signed in the name of the firm : (1.) Those who participate, or are entitled to partici- pate, in the profits of the concern. (2.) Those on the strength of whose credit a person may have contracted. As regards the firm, a partner may have no rigid to pledge the credit of his co-partners, but he has the 'power to do so; and it is unnecessary here to consider the con- sequences of a breach of the agreement which the partners have made with one another. A retired partner is, as regards those who knew of his retirement, only liable upon bills and notes signed while he remained a partner. A joining partner is only liable upon bills and notes signed after he has joined the firm. We have hitherto considered the doctrine of agency as regards partners in a still subsisting firm ; we will now treat shortly of the power which, after a dissolution, a partner may have of binding his late co-partners. T ere is no charm in the word " dissolution;" for as a partnership may be originally created by a common con- DISSOLUTION OF PARTNERSHIP. H sent of two or more persons, with or without a deed or written agreement ; so, if there has been a deed or written agreement between the partners, and such instrument has been cancelled, and even a deed of dissolution executed, yet the partnership may still subsist by a common con- sent, or, what comes to the same thing, a new partnershij) may, by such consent, be straightway created. And after a dissolution, one partner may be so intrusted by liis late partners with the management of affairs, that, oven with those who knew of the dissolution, he may be able to bin ' the late firm by contracts made in their name. But, in- dependently of any consent on the part of his late partners, each member of the dissolved firm can, as will be seen, under certain circumstances, bind his late co-partners. After a partnership is dissolved, a dissolving partner has no longer any right to pledge the credit of the firm. To avoid doing so is his duty to his late co-partners. His 7)0iyer as regards I 'e public is as follows : As regards tho^e who know of the dissolution, a partner is no longer able to bind his former partners ; but to those who do not know of it, each partner occupies the same position as a nominal or ostensible partner did before the dissolution, i. e. each will be liable to those who may contract upon his credit. For this reason it is usual upon a dissolution to give express notice of the fact to those who have been cus- tomers or correspondents of the firm, and to give notice to the world by advertisements in the Gazette and other papers, which will be always sufficient as to those who have not been customers, and will be prima facie evidence that even customers knew of the dissolution. If a bill be accepted by an ex-partner in the name of the dissol-'ed firm in favour of a person who has no notice of the dissolution, such person has not only himself a right to sue, but his transferee, though taking the bill with notice, will have a like right. 3 84 LAW OF BILLS AND NOTES. Notice to one partner is conHidored by the law to be notice to all ; so that a bill improperly accepted by an ox- partner in the name of the dissolved firm in favor of another firm, of whom one know of the dissolution, could not be sued upon by the latter firm. A dormant or secret partner, whoso liability arises solely from his right to participate in the profits, cannot after a dissolution be bound by the acts of an ex-partner; for, with the dissolution, the cause of the liability has wholly ceased. The estate of a deceased partner is never liable upon contracts made by the surviving partners after his death. In taking from an ex-partner a bill belonging to a late firm, it will be well to have the separate name of each partner, or else to see that the partner putting the name of the firm to the bill has actual authority to do so. A shopman, a foreman, a clerk, or a wif^, has not, as such, authority to pledge a man's credit by putting his name to a bill ; but there is often not only an express authority to such persons, but a presumed one arising from ratification or payment of bills already drawn, in- dorsed, or accepted by such persons, as the case may be. An authority to indorse does not include an authority to draw, and vice versa; and neither amount to an authority to accept. Notes are on the same footing as bills with regard to authority, actual and presumed. If one partner die, being liable or entitled on a bill or note, the legal right of action or the liability to be sued survives, but the personal representatives of the deceased are entitled or liable in equity, (a) Bills and notes being personal property, the executor of a deceased party to a bill or note has, in general, the same rights and liabilities as his testator ; (b) and if a bill is (a) Lane t. WlHlaum, 2 Vem. 277 ; Biahop t. Church, S VeB. Sen. 100, 871. (ft) Hyde v. Skinner, 2 P. Wms. 196. —^ POWERS OF C0UP0RATI0N8. 35 indonod to a man who is dead, by a person ignorant of his death, it will enuro aH an indorsement to the personal representatives of the dcceasod. (a) On the death of the holder of a bill or note his execu- tors or administrators may indorse. (6) Presentment notice of dishonor and payment should be made by and to the executor or administrator in the same manner as by and to the deceased. • ' Without a special authority, express or implied, a cor- poration has no authority to make, indorse, or accept bills or notes. ■•• ■•*'''■ •■ ' ■ A corporation established strictly for trading purposes has an implied authority to become parties to bills, but a mining company incorporated under the " Con. Stat., Can. c. 63," has not, as a necessary incident, the right to draw, accept, or indorse bills of exchange. Such right can only be conferred on them by express authority or reasonable implication. The power of " selling or otherwise dispos- ing of their ores, as the company may see fit," in their articles of association, will not confer such power by im- plication. Bills directed to the secretary of the company, and so describing him, are, in effect, drawn on the com- pany, and authorize him to accept, on their behalf, if he has authority to bind them, and it is unnecessary to put the seal of the company to the acceptance. Such bills may be accepted in the name of the company per the secretary, and on such an acceptance the secretary is not personally liable. Under section 63 of this statute the trustees are personally liable, where there is no mention in the bills of the capital stock of the company. But thig liability does not attach where the trustees have no power to contract at all for the company, and where they assume to exercise such power, they are not liable in their own right, (c) (a) Hurray v. East Ind. Co., 6 B. & Aid. 204, ii) RawlinBon v. Stone, 3 Wils. 1. (c) QUbcrt T. McAnoauy, 28 Q. B. U. C. 884. Bob«rtion r. Olaai^ 20 0. P. U. C. 260. 36 LAW OF BILLS HID NOTES. A municipal corporation cannot make negotiable in- struments unless expressly empowered to do so by its charter, apd where such power is not expressly given it cannot be implied as necessary to accomplish any of the purposes for which such a corporation is created. A promissory note made by a municipal corporation to pay the amount of a judgment against the municipality is void wheD the Legislature has empowered the munici- pality to raise any necessary funds in a different manner, (a) A promissory note made payable to the treasurer of, and endorsed by him to a municipal corporation, to secure a balance due the corporation on a past transaction, is not void under the Municipal Acts, (b) A building society incorporated under the "Con. Stats. U. C. ,c. 53" may, under certain circi: instances, make promissory notes, and as they have this power under some circumstances, when a note is made by such society it will be assumed to be valid, uidess it is shewn that circumstances exist depriving them of the power. If such circumstances exist they must be shewn by plea, (c) («) Pacaud V, Corporation Halifax, 17 L, C. R. 56. (b) Corporation Belleville v. Fahey, 6 U. C. L. J. N. S. 73. («) Snarr V. Toronto P. B. & S. Scjr., 29 Q. B. U. C. 317. ' 37 '. * ■..T' \A * ' CHAPTER III, t OF CONSIDERATION. A consideration is some benefit or promise made, or loss suffered by the plaintiff to or for the defendant. It is necessary for a plaintiff suing on contracts or promises, whether made by word of mouth or in writing (unless by deed, i. e. under seal), to prove a consideration to have been given for them. Bills and notes are exceptions to this rule, as we have already seen, for where a bill or note is given a considera- tion will be presumed to have passed, till the contrary is made probable ; and to do this rests with the person sued on the bin. For instance, if A has drawn upon B, and he has ac- cepted the biU, and A then sue him upon it, it is B's business to shew by his witnesses, or by cross-examina- tion of A, and those called by him, that the acceptance was given not for value, but for the accommodation of A, ind to enable him to obtain money from other parties. Although consideration is presumed to have been given br a bill or note, yet, under certain circumstances, to be )resently explained, a defence may be made out by shew- ng either: 1. The absence of consideration. ^5 2. That the bHl or note was obtained hy fraud: 3. That it was given in pursuance of an illegal con- ract, i. e. an an illegal consideration. 38 LAW OF BILLS AND NOTES. The rule regarding the necessity of consideration is this : Where a person gives a bill gratuitously to another, either by way of accepting it for his accommodation, or indorsing to him another bill, if the accommodating party is afterwards sued on the acceptance or indorsement, it will be a sufficient answer to the action that the plaintiff gave no consideration for the bill or note, and the law is the same when a note is given without any consideration passing, and merely by way of gift or gratuity, (a) Accommodation bills and notes being, however, meant for the person accommodated to obtain money upon, the latter can, by indorsing them to another party for value, entitle him to recover both against the party accommo- dating and the party accommodated. For instance, suppose a bill accepted gratuitously (which we will call an " accommodation bill"), were indorsed by the drawer in whose favor it was accepted, to a third party for value, such party can recover upon the bill as well against the gratuitous acceptor as against the drawer who indorsed it. And, to go one step further, suppose the indorsee for value, instead of being the plaintiff, were to transfer the bill gratuitously, his transferee would be able to stand in his place, and the transferee might suc- cessfully sue all the parties to the bill except his gratui- tous transferor. From this it will be seen that any person may sue upon a bill or note, who has either himself given value for it, no matter to whom, or deduces his title from some one who has ; and any person may be sued on a bill, either if he has received value for it, no matter from whom, or if the plaintiff has given value, or deduces title from one who has. Therefore, where a person, who has gratuitously drawn, accepted, or indorsed a bill, or made or indorsed a note, ia sued upon it, it is necessary for him to allege in his plea, (a) M'CarroU t. Reardon, 4 Allen, 231 ; Poulton v. Dolmage, (J Q. B. U. C. 277. CONSIDERATION. 89 and to prove, not only that it was an accommodation bill, but that the plaintiff and those through whom he deduces his title, gave no value for it. (a) This is necessary in every case where the action is not between immediate parties, (b) Thus a person who indorses a note, though there is no consideration between him and the holder, is liable to the holder if he has given value, and it is no defence to an action on a note by the indorsee (a holder) against the indorser that the plaintiff gave no value to the indorser for his indorsement, or that he took the note knowing at the time he took it that it was indorsed for the accommo- dation of the maker, (c) On the same principle it is no defence for the maker of a note payable to bearer to shew that it was made for the accommodation of some person other than the plain- tiff, and that the latter holds the same without value as regards the maker, for there might still be a valuable consideration as between the plaintiff and the person for whose accommodation the note was made, (d) So an indorsee without value is entitled to recover on a bill or note if an intermediate party has given value, (e) But a consideration of some sort is necessary to support the promise made in a promissory note, even as between the original parties, and a promissory note given by A to B, for a debt due by C to B, upon no consideration of for- bearance to C, nor any stipulation to discharge him, and without the knowledge and consent of C, cannot be en- forced. (/) ' ' ^ ' In this case, the debt payable by C to B was not due when the note was given, and the note was payable be- fore the debt became due, so that there was no giving of (a) Bank B. N. A. t. Sherwood, « Q. B. U. C, 818. • (i) \Vhith»ll T, Ruston, 7 L. C. R. 399. (e) Millier t. Ferrier, 7 Q. B. U. 0. 640. ■li) Muir V, Cameron, 10 Q. B. U. C. 866. . ^ «) Wood V. Rom, 8 C. P. U. C. 299. t^s "tj '=- ) M'Gillivray v. Keefer, 4 Q. B. U. C. 466. ■ ' 4CI LAW OF BILLS AND NOTES. time to C, which might have formed a consideration. Where the maker of the note has derived an advantage, though not precisely such, or in such a form as he had in contemplation when he gave the note, and his object is, in effect answered, there will be a sufficient consideration for the note, although the consideration does not prove so beneficial as was expected, (a) So a partial failure of consideration is no defence to an action on a note, (6) but the entire failure of consideration has the same effect as its original and total absence, (c) and it seems that a partial failure of a specific ascertained amount would be a defence j5ro tanto. (d) Even if the consideration entirely fails, yet if the bill or note is indorsed to a third party for value, without notice, he could, of course, recover on the principles already stated. As between the original parties there must be either an original absence or a total failure of consideration on the note, and a separate and independent wrong, although it virtually renders worth- less that which was the consideration for thu instrument, will not prevent the person to whom the instrument is given from recovering upon it. For instance, if a bill be given for the price of goods sold and delivered, and the goods are never delivered, there is a defence to an action on the bill, but if having delivered the goods the vendor forcibly take them away again he may recover upon the bill, and the forcible removal will be merely ground for cross action. It seems that a bona fde holder for value of a bill or note will not be affected by the failure of consideration between the original parties thereto. The defendant made a note in favor of S for the amount of a bill of exchange. S failed and the bill was (a) Dutton t. Lake, 4 O. S. IS. (») Dixon V. Paul, 4 0. S. 327. S«e also Thcmpwii T. Vur, 6 Q. B. U. 0. 387 ; HiU t Byan, 8 Q. B. U. C. 443. («) Solly V. Hinde, 2 C. & H. 616 ; Wtlli t. Bopkiiu. 6 K. ft W. 7. (d) Darnell r. Williama, 2 Stark 168 ; Clarke ▼. Lasanu. 2 M. ft 0. 1«7 ; Moffmrldf» ▼. Jonei, 14 Bast 486 ; Spiller v. Westlak*. 2 B. ft Ad. 16*. CONSIDERATION. 41 dishonoured. Before the note became due, and before the failure of S, it was deposited by him» with a number of other notes, with the plaintiffs, as collateral security for the payment of certain bills of exchange, on which he waa liable, to the plaintiffs, the agreement being that if the bills were not paid the proceeds of the notes were to be applied in payment of the amount; but if the bills were paid the plaintiffs were to collect the notes and place the amount to the credit of S. The amount of notes deposited by S with the bank, as collateral security, never exceeded his indebtedness, and at the time the note in question was indorsed to the plaintiffs, and when S failed, there was a considerable deficiency. The Court held that the plaintiffs were bona fide holders for value, and were not affected by the failure of consideration between the defendant and S.(a) As the payee of an accommodation note cannot himself sue the maker upon it, so neither can his indorsee, unless he pays value for it, and if he only pays or lends a small sum on the note he can only enforce it for the sum lent, {b) Where, in an action on a promissory note, payable to the order of A, it was proved that B indorsed it and then brought it to A, who indorsed merely for accommodation, never having received any value for it, the Court held that want of consideration could not, on these facts, be inferred, as between the maker and B, and that the plaintiff was not obliged to prove the consideration, (c) A person has no right to recover on a note, though made in his favour, if the maker place it in his hands merely for the purpose of its being taken care of, and on condition that the holder shall not negotiate or part with it to any other person, and there is no other con- sideration for the note, {d) U) Commercitl Bank v. Page, Eut. T. 1S71, Stortni' DlgMt V. B. Bcportd, 7. \b\ Strathy t. Nicholli, 1 Q. B. U. O. 32. (e) Mair Y. M'L«an, 1 Q. B. U. C. 466. -- n {(t) Wiimar t Winner, sa Q, B, U. 0. 446. i k ir\ * ; . ;. ^. v : . , 42 LAW OF BILLS AND NOTES. We haye next to consider how far r fraud practised on the defendant is an answer to an action on the bill or note. If the defendant has been defrauded of the bill or note, or it was given for an illegal consideration, he must state this in his plea, and also that the plaintiff gave no con- sideration for the bill ; but there is an important difference between this case and the one already mentioned, namely, that when the defendant has proved the fraud or illegality, the plaintiff is then put upon proof of having, in igno- rance of fraud or illegality, given value for the instru- ment; (a) for there is a presumption that value was given for an accommodation bill, which was intended to raise money, but no such presumption with regard to bills tainted with fraud or illegality; and, besides, it would be manifestly unjust to place the defendant in an action on such bills under the necessity of proving that no consideration passed between the alleged defrauder and the plaintiff in the action ; whereas nothing can be more fair than to leave the fact of consideration having passed to be proved by the plaintiff, who should know all about it. Where a plaintiff is suing upon a bill which he himself has obtained from the defendant by fraud or on an illegal contract, the defendant upon proof of these facts, andy in case of fraud, of his having repudiated the contract upon discovery of the fraud, will have made out a valid defence. But where the plaintiff has not himself been guilty of the fraud, or a party to the illegality, the proof of these facts, on the part of the defendant will only constitute a de- fence subject to the conditions above stated, namely, if the plaintiff took the bill with notice of the fraud or ille- gality, or gave no consideration. We will now proceed to consider what constitutes con- sideration, fraud, and illegality, respectively. (a) See Withtll y. Rurton, T L. C. R. 8W. "t^ WHAT IS A CONSIDERATION. 43 The payment of money amounts to a consideration, and, no matter how small the sum is, so that there is an ■absence of fraud, it will be sufficient to entitle the holder to recover against prior parties. un . . ■•' ^ Any risk run at the request of the person who gives the bill or note, may be a consideration for it. If A has given B his acceptance, this may be a consideration for B's acceptance given to A Cross acceptances may thus be considerations for each other, although there is no other consideration than the mere exchange of the bills, for such exchange is sufficient to constitute each party a holder for value of the paper he receives, (a) A debt due to another may be a consideration, though the debt is not payable at the time the note is given ; thus, if A owe money to B, and C give B a bill or note for the amount, this will be a good consideration, and, of course, it will be equally so if C be jointly liable with A for the debt. (6) Also, if the bill C gave to B were for a debt which C owed to A, the consideration would be good. Where a bill is given for the debt of a third party, it is no defence to an action on the bill that juch debt was without consideration. A judgment debt may be a consideration for a note payable at a future day ; for the person taking it thereby impliedly undertakes to suspend proceedings on the judg- ment till the maturity of the instrument. Where a bankrupt gives a note to a creditor for a former debt, such debt is not a sufficient consideration to support the note ; nor is it so in the case of an insolvent discharged under the Act, such securities given by him being illegal. i .t m „ , But a debt due to a bankrupt estate is a good consid- eration for notes for that debt, given to the trustees and assignees of the estate, (e) 'a) Wood V. Shaw, S L. C. J. 169. ' "i i .^i ;■; .; i/> <■ -. -'3 n v.lV S«e Dickenson t. Clemow, 7 Q. B. U. C. 421. . ,v ■-". v:? Gates V. Crooks, Draper 469-466. .?:trti s^T-rrT^T^.Mj^s^ 4)1 LAW or BILL9 AND N0TI8. A fluctuating balance may be a consideration when it ia in favour of the party to whom a bill or note is given, the consideration increasing or decreasing from time to time with the amount of the balance. In fact a note cannot be said to be an accommodation note if there is a valuable consideration at any time during its currency. If, therefore, a note is discounted and another note maturing after the first is given aa collateral security, the moment the principal note falls due and is unpaid a consideration will arise for the collateral note, and the holder thereof may recover thereon, (a) A pre-existing debt from the maker to the holder is a good consideration for the giving of a note, and although the debt is already secured by a mortgage on real estate, it is still a consideration for the note. As long as there is an unextinguished debt existing, it forms a consideration for a new promise, as may be illustrated by the case of a debt, the remedy for which is barred by the Statute of Limitations, and which is still a good consideration for a note. (6) .• ->-^^.'-' --.1 '..^ -• ,■.,.; , ■ .' ■ < ■ V-. r Where the plaintiffs, who were an insurance company, refused payment of a partial loss to the assured in a marine policy, in consequence of the claims of W. P. Ss Co., to whom the amount of insurance was, in case of loss, made payable, but consented to advance the amount upon the insured giving his promissory note, indorsed by the defendant, for the sum, which was to be paid at maturity unless they procured the assent of W. P. •& Co. to their retaining the money, which assent was refused. It was held that the defendant was liable on the note, and could not defend himself on the ground of want of consideration; or that the plaintiffs were not justified in. (a) Blake t. Wabh, S9 Q. B. IT. 0. £41. (b) Bank U. C. v. Bartlett, IS C. P. U. 0. 238; Brans t. Mori*y, 11 Q. B. U. 0. Ml; Oaoderham v. Hutchlion, i C. P. U. C. 341 ... , ^ - _ FRAUD AS ▲ DEFENCE. 45 requiring the aHsent of W. P. & Co, to the payment of the money for which the note waa given, (a) A deed by which the party conveys all his right, title and interest in a lot of land, will form a good consider- ation for a note given by the grantee to the grantor, for the former would have his remedy on the covenants in the deed, and at all events it would bind the grantor by estoppel: (6) that is to say, if the grantor afterwards acquired any interest in the property he could not hold it for his own benefit but would be bound to transfer it to the grantee. Where the defendant insists on fraud as a defence, he must, on the discovery of the fraud, have entirely repu- diated the contract and retained no benefit under it. (c) Fraud is where a man is induced to do any act by means of an intentional material misrepresentation, though the party so deceiving him aim at no profit by the transaction; and where a man, in order to influence the conduct of another in business, makes a random assertion (not being a warranty), without knowing whether it be true or false — this is a fraud. I say ''material" misrepresentation, for it is not every assertion that a man may make (as for instance, in vending his goods) which, though intentionally false, will constitute fraud, or wiU amount to a warranty. Also, the false state- ment or the conduct (for fraud may be by act as well as words, or by both together) must be such as would bo naturally calculated to lead a reasonable man astray. I say "without being a warranty," for a random warranty of a fact which the warrantor did not know to exist, does not amount to fraud; though it does amount to fraud if he knew the warranty to be false. There are several cases in our own Courts in which notes have been held void for fraud. (a) New 6k. Assce. Co. T. Ansley, 2 Kerr 106. i ' „jv,;. . ■ .,^ „i\ f») Lundy v. Carr, 7 C. P. U. C. 371. ;'^ i • • , ., ,. - , „ .-o ,,, (e) Archer T. Bamford, S SUrk. 176. ,, .^ , ,^1 '•*••_;>' !!:• • j:^*' f'>- 46 LAW or BILLS AND NOTIS. Thus a promissory note, given by an insolvent debtor to a creditor, in contemplation of a deed of composition^ and as a preference to such creditor, without the knowledge of the other creditors, is null and void, and will be declared so even as against the compounding debtor himself, (a) So a note givsn by an insolvent to one of his creditors, for the purpose of procuring his signature to a deed of composition, and whereby the insolvent agrees to give the creditor more by the amount of the note than his other creditors, cannot serve as a'ground of action against the insolvent, and is void as a fraud on the other creditors, (b) The Insolvent Act of 1869 prohibits, under a penalty, the giving of any promise of payment as a consideration or inducement to the creditor to consent to the debtor's discharge; and, therefore, a note of a third party, given by an insolvent to a creditor, to obtain the creditor's con- sent to the discharge of the insolvent, is null and void, (c) If a note is obtained by menaces and threats, without any consideration passing between the parties, it will be null and void. (<'/) Defendant gave a negotiable note to G, who agreed to hold it as security for a liability he had incurred for the defendant. G, in violation of this agreement, indorsed and transferred the note to C, in order to raise money for G's benefit. C got the note discounted at a bank, and was obliged to take it up at maturity, and two years afterwards he transferred it to the plaintifi; G never paid the money for the defendant, which formed the consideration for the note. The Court held that unless G knew the circumstances under which G got the note, or was implicated in G'& fraud, he would have had a right, on taking up the note at the bank, to recover the amount (a) Oreenibields v. Plamondon, S L. C. J. 210. .. ,1^ _ _ _.• : , ft) Sinclair V. Henderson, L. C. J. 306. ' -"' («j Doyle V. Prevost, 17 L. C. J. 807 ; Prevoit v. Fickel, 17 L. C. J. 314. - ,' \'{ (^ McFarlane T. Dewey, 15 L. 0. J. 86. .■>'-<>) ILLEGAL CONSIDSIUTIONS. 47 V from tho defendant, and that the plaintiff, claiming under had the same right, (a) . If an action is brought on a note obtained by fraud, and the defendant, instead of resisting payment on this ground, compromises the action by giving a new note for the original consideration, he will thereby waive the fraud, and cannot take advantage of it in an action on the second note, (6) A plaintiff cannot recover upon a bill given for illegal consideration, if he is obliged to rely on the illegal trans- action in making out his case. Considerations which are illegal are so either (1) at common law, i. e. by tho general unwritten law of the land, or (2) by statute. Considerations illegal at common law may be again divided into (1) such as are privately immoral, and (2) such as contravene public policy. Under the former head come the considerations for bills, notes or cheques given for future cohabitation, fcfr the rent of apartments knowingly let for the purpose of prostitution, etc. Under the latter are included the considerations for bills, etc., given upon a contract for the general restraint of trade or business; as if, upon a purchase of the good- will of a medical practice, or a shoe-maker's shop, it were bargained that the persons parting with the businesses should thenceforth altogether cease from curing wounds or making shoes respectively. Though there would be no objection to a partial restraint, as to do business only within fifty miles of Toronto, or only with certain classes of customers, as wholesale or retail, etc. So contracts in restraint of marriage (and it should I seem though only in partial restraint) are likewise void; and so are contracts to procure a marriage, or to procure (a) Hastings y. 0*Mahoney, 4 Allen 305. (») Tuttle V. Smith, 8 Kerr 048. .£ A _!.:::• J 1 2 ..i»;.i'j.l! .r, 1. ■ ilh_ 46 LAW OF BILLS AND N0TB8. tho Reparation of thono already married; also coittracUi to injure the revenue, to compound a felony or a public miudemeanor, ur to induce a person to infringe tlie law. Contracts with a public enemy, as bills or notes in their favour, are also illegal, and all bills and notes are worthless in their bands ; so also contracts for obtaining publio offices, and all bills, etc., given in pursuance of such con- tracts are illegal at common law. These are also many of them illegal by statute, which is the other main division of illegality. In treating of considerations illegal by statute, it may be convenient first to mention that the offence of usury has ceased to exist, and no contract can any longer be objectionable on that ground, and that gaming contracts, whether written or verbal, are not in general illegal, but are merely void; i e. a man may make a wager or a bet if he pleases upon a lawful game, but having made it, he need not pay. Bills, notes and cheques, therefore, given in putsuance of such bets or wagers, can only be recovered upon by an innocent indorsee or holder, who has taken the bill for value, and in ignorance of the transaction out of which it originated. • Though the winner of stakes at a horse-race may, in general, recover them in an action, (a) yet it seems that a promissory note given for the amount would be void, except in the hands of an innocent holder for value. If the loser by play or betting, having given a bill or note, has to pay the innocent holder, the former can recover the amount against the man to whom he lost the bet. But if one man employs another to bet for him, the employer thereby authorizes his agent to pay losses; the agent having done so, can recover the money from his principal. Therefore a bill drawn by the agent upon, and accepted by the principal for the amount, (a) See Kelly t. Gafnejr, 8 U. C. L. J. 60. —- — -^^r^-^u^^ji ^.^^ ILLEGAL CONSIDERATIONS. 4& muflt bo paid by him. In this case, it will bo observed, tlio flum sued for is not money won at play, but a sum paid by the agent to a third party at tlio princi[)ara os- prcHs or implied request. A note given for a bet or wager respecting the result of an oloction, is null and void, at least as regards the payee, {n) And an action cannot bo maintained on a note which is given, and the proceeds of which, aro applied for the purpose of bribing tho electors in a IcHslativo election. (6) " Tho Corrupt Practices Prevention Act, 18(>0," of tho late Province of Canada, is in force, and ap})lies in Ontario and Quebec to elections of members for the House of ^Commons of the Dominion, and, therefore, a note given 'or the payment of even lawful expenses connected with ,ny such election is void in law, (c) So, a note given for a gambling debt is null and void, ivcn in tho hands of a third party holding it in good [aith before maturity, (d) > • . >, A note given for tho price of a lottery ticket is not -voided by the statute against lotteries, and, therefore, bona fide holder, for value without notice, can recover ;hereon, and any one in whoso hands such securities re valid, can transfer them even to persons cognizant f the illegality, and the latter will have a right to re- over on them. If, therefore, any intermediate indors.ee f such a note is an innocent holder for value, a person ith notice of the illegality of the consideration will ike a good title from him. (e) " The Temperance Act of 1864," section 43, avoids all icurities given for liquors sold in contravention of that ct, save when they are in the hands of bona fide holders (a) Dufresne V. Giievremont, 6 L. C.J. 278. ' i ►.' ' '^vv * {■,' (ft) Gufry V. Larkin. 7 L. C. R 11. .^ , _,:;^. .4.: ,Wj \e) Willett V. De Grosbols. 17 L C. J. 293. ' • ''^ ^ ^ ^ - ,d) Birolcan v. Derduln, 7 L. C. J. 128. ^"X ^."J"'«'^?;° ;;: Heuket la Q. B. U. C. 805; see also Evam v. Morley, 21 Q. B. C. 547 ; S. C. 2J Q. B. U. O. 236. 4 . ^- .v.; ' '. , t LAW OF BILLS AND NOTES. for value without notice of the illegality. In general, when the consideration for a bill or note is illegal by statute, a person taking the same for a valuable con- sideration, without notice of the illegality, may recover thereon. , , ,,, . When a statute does not provide that all securities shall be void which shall be made in furtherance of such dealiug as the statute prohibits, but merely prohi- bits the act, or even goes farther and imposes a penalty, such a statute has not the effect of making void in the hands of an innocent holder for value a negotiable in- strument which was made in furtherance of such a trans- action. Therefore a note given on account of a sale made on a Sunday is not void in the hands of an inno- cent holder for value, (a) But a promissory note or agreement in writing, dated on a Sunday, and given in payment of a horse purchased on the same day, is null and void under the 45 Geo. 3 c. 10, and 18 Vic. c. 117, as between the original parties. (6) As to notes and securities made on a Sundayj the result of the law seems to be that under the statutes a note made on a Sunday in payment of goods sold on that day is void, as between the original parties, but not as against an indorsee, for value without notice, {c) An agf^ement not to proceed in a prosecution for permitting unlawful gambling in a tavern, is an illegal consideration for a promissory note, {d) A promissory note given by a client to his attorney in respect of services to be rendered by the attorney, is invalid, (e) (•) Cromble v. Overholtzar, 'll Q. B. U. C. 65 {b) Cote V. Lemieux, 9 L. C. R. 221 ; sea alf o Keamey t. Kinoh, 7 L. 0; J. ai. (e) Houliston t. Panoui. 9 Q. B. U. C. Ml. ' * ■" (<0 DwlRht V. Ellsworth, 9 Q. B. U. C. 639. (•) fiobartaon v. Caldwell, SI Q. R U. C. 402; Hope t. Caldwell, 21 C. P. U. 0. 241. 4- ILLEGAL CONSIDERATIONS. 51 When any part of the consideration for a bill or note i8 fraudulent, the bill or note is bad. When an original bill or note is without considera- tion, or given on an illegal consideration, a renewed bill or note will be open to the same objection, except *he amount be reduced by excluding so much of the consideration of the original bill as was illegal. '■ t ■ - 1^ «2 CHAPTER lY. OP TRANSFER. Transferring a bill or note means so passing it to^ another person as to enable him to recover at matur- ity against the parties to it. A bill or note is only transferable when it contains a direction to pay to the payee's order or to bearer. If it contain no such direction, it is of no use to any but the original payee. The payee may be either the drawer or a third person, and therefore a bill, when payable to order, may either contain the words " pay to me or my order," or "pay to C or his order." If the bill or note be payable to order it is transfer- able by endorsement, which may be either in full or iu blank. If payable to bearer or indorsed in blank, it is transferable by delivery, either with or without a further indorsement, (a) If the bill or note be not payable either to order or to bearer, it is only good in the hands of the payee, and is not negotiable. , And the fact that the note is payable to a fictitious person does not render it negotiable any more than if the payee were a real person. (6) Thus, where a note is, by the maker, knowingly made payable to a fictitious payee, and not to his order or bearer, a person receiving (a) See Art. 2286 of the Civil Code, Quebec. (b) Williams v. Noxon, 10 Q. B. U. C. 259. . * INDORSEMENTS. 53 it from a third party for value cannot maintain an action against the maker by declaring, as on a note payable to bearer. Bills may be indorsed or transferred by delivery be- fore as v^ell as after acceptance, and before as well as after they become due. , Indorsements are of two sorts : an indorsement in blank and an indorsement in fall, or special indorsement. A blank indorsement is made by the payee simply writing his name on the back of the bill or note, and this makes it thenceforth transferable by delivery, though in practice, the transferor is often asked to in- dorse each time that tlie instrument changes hands. An indorsement in blank enilJes any persons to sue upon the bill who may agree to join in the action, and where three out of a firm of four persons sued upon a note averring an indorsement to themselves as plain- tifis it was held that the non-joinder of the other part- ner was not aground of non-suit, (a) A note passed before notaries en brevet payable to A B or his order cannot be transferred by a blank indorse- ment, but it may by an indorsement in full, or spe- cial indorsement. (6) A special indorsement is by writing a direction to pay to a particular person, and may be made by A B thus: "Pay C D or his order. A B." The words "or his order" may be omitted in this case, for their omission will not restrict the negotiability of the instru- ment, (c) By Art. 2288 of the Civil Code of Lower Canada, an indorsement may be restrictive, qualified or conditional, and the rights of the holder under such indorsements are regulated accordingly. , Anderson T. HMauIay, 6 0. S. 637. Brunet v. Lalonde, 16 L. C. R. 347. Moore v. Manning, Com. Rep. 811 ; Cuuliffe v. Whitehead, 3 BIngN. C. 829. 54 LAW OF BILLS AND NOTES. These iadorsements, though not bad if written on the face, are most properly written on the back ; and if more space is wiinted, a piece of blank paper, for which no stamp is required, should be pasted on to the end of the bill, (a) An indorsement, like an acceptance, is never com- plete without delivery. Giving or sending a bill to the transferee, or sending it to his place of business, will of course, constitute delivery ; but there are so many circumstances which constitute constructive delivery, that the general rule is all that can be given. Every indorser of a bill is in the position of a new drawer, and, as a consequence of this, a person who in- dorses a bill which is not negotiable, and therefore does not give the indorsee a right to sue the drawee or acceptor, is liable on his indorsement to his immediate indorsee, but he is not liable to any remoter parties, and the second indorser of such a bill cannot by his indorse- ment give his indorsee an action against the first indoi'ser. (b) There is a distinction in this respect between bills and notes; the indorser^of a bill may be treated as a new drawer, but the indorser of a non-ne^'tiable note cannot be so treated ; an4 a party indorsing his name on the back of a note not negotiable, or if negotiable, not indorsed by the payee, cannot be sued as an in- dorser by the payee, (c) Where W made a note payable to the plaintiffs alone, on which the defendants indorsed their names, one after the other, and it was proved to have been given for money lent to W" by the plaintiffs, in defendants' presence, and for which they agreed to become security, and that one of them had paid interest on it ; and that one of them had promised to pay the note, when spoken (a) Reg V Bigge, 1 Stra. 18, ex-parte Yates, 27 L. J. (Bky.) 9. (b) Jones v. VVhitty, 9 L. C. R. 191. (e> Wwt V. Bown, 3 Q. B. U. C. 290. . .. .„ .^^ .,, - INDORSING NOTE PAYABLE TO BEARER. S^ to, it was held, nevertheless, that the defendants could not be liable in any way, as upon a note, {a) So where a note was given to a Mutual Insurance Company, and was therefore not negotiable under the statutes; it was held that a person indorsing it could not be fixed witli the ordinary liabilities of an indorser. {b) We have already seen (c) that the Statute 3 & 4 Anne, c. 9, makes promissory notes assiauablo and indorsable, like bills of exchange. In the revised Statutes of the Provinces of Nova Scotia and New Brunswick similar provisions are contained, and pro- missory notes are invested with the same properties as belong to bills ot r^excliange, by the custom of merchants, (d) Where a note is made payable to A or bearer, and A indorses it, though the indorsaraent is not necessary for tho. purpose of transfer, yet A will be liable on his indorsement, {e) So where a note is payable to A or bearer, and a third party endorses it, he will be liable on such indorse- ment to the payee, the latter not having indorsed the note. Thus, when, after the note was made, it was de- livered to C, who, as bearer, was the holder thereof, and he afterwards indorsed and delivered the note to the payee, he was held liable on his indorsement to the payee. (/) A party indorsing a note payable to A or bearer, may be sued as indorser, jointly with the maker, under the Stat. chap. 42 ofthe Con. Stat., Ontario, (r/) Where a party holds himself out to the world as an indorser, unless he can show manifest error, and that (n) Skilbeck v. Porter, 14 Q. B. TJ. C. 430. , (6) Oore D. M. Ins. Co. V. Simons, 13 Q. B. IT. C. 555. ■ . ' ■. t >,, (c) Ante Page 14. (-<) See Rev. Stat. N B. Chap. 116, S. 2, Rev. Stat. N.S, Chap. 82, S. 2. («) Booth V. Barclay, 6 Q. U. U. C. 215. ,. . ., , : - (/) Vanleuven v. Vandutien, 7 Q. B. U. C. 176. '^ /^-.^ ^-'T^ - »-ri- » "^ t^--.--^---^',-- ' (^; RaniBdellv.Telfer. 6Q. B. U. C, 603. .1 , ;< , ' ;'N;-; ,■■ :■:' 66 LAW OF BILLS AND NOTES. some one else was the real cIebtor,hei8 liable; and where a person, intending to indorse as the agent or attorney of another, indorses his own name by mistake, he is liable. Thus, where the indorsement was "L. Wright per G. F. Wright," L. Wright was held liable, though he intended to sign as agent of Q. F. Wright, the error not being pleaded, (a) An agent, or any other person who indorses and does not want to become personally liable, should add to his name the words ^^sans reeours,'" or "without recourse to me." An agreement, written or verbal, not to hold the in- dorscr liable, will prevent Lis indorsee suing him. (6) But a subsequent indorsee, for value, without notice of the agreement, may of course do so, and such agree- ment will be no defence against him. Another way in which the holder of a bill or note in- dorsed to him in blank, may transfer it without incurring personal liability, is by writing over the indorser's sig- nature the words " Pay A B or order." This in no way affects the liability of the blank indorser, but simply converts his blank indorsement into a special one in favor of A B ; and this is done without the trans- feror's name appearing on the bill, {c) When a man indorses a bill or note, he warrants that the bill has properly come to his hands, and that all the signatures on it are what they purport it to be, and these things he cannot deny when sued on the bill. A holder may, in suing a drawer, acceptor, maker, or early indorser, omit to prove the intermediate indorse- ments, \N ich may be struck out, and the case may be treated as though the bill were indorsed to the plaintiff in the first instance. This may be done at the trial. (a) Seymour v. Wright. 3 L. C. R. 454. (ft) Pike V. Street. T M. & M. 226. vj («) See Vincent V. Horlock, 1 Camp. 442. * ! ,?! ,, RIGHTS OF INNOCENT INDORSEE. 67 An indorsement intentionally struck out by the holder discharges the indorser. (a) In. default of acceptance, or, after acceptance, in de- fault of payment an innocent indorsee for value may sue all the parties to the bill, and none of them can set up the defence of fraud, duress, absence of consideration, or, in general, illegality. The only cases where an innocent indorsee for value has not a good title against all prior parties to the bill (unless there is an agreement to discharge any of them) are those where the security is rendered absolutely void by statute. The effect of the law in these cases is, that the party who gives the billor note for any of these considerations, whether as acceptor, maker, drawer, or indorser, can- not be successfully sued thereon, but the other parties may be so sued. If a bill which either requires indorsing, or was in- tended by the parties to be indorsed, be delivered with- out indorsement, the transferee has a right of action against the transferor for not indorsing, (6) and perhaps now a manda nus will lie to compel indorsement ; at all events, a bill in Chancery may, where it is worth while, be filed for this purpose, and the costs would have to be paid by the person refusing to indorse. The per- sonal representatives of the deceased transferor may also be compelled to indorse. If a man, having indorsed a bill, gets it indorsed again to him, he cannot, as a general rule, sue the inter- mediate indorsers. (c) If a man to whom a bill or note is indorsed for a par- ticulai" purpose, improperly indorse it to another, the indorsee, if he knew of the breach of trust, cannot sue the real owner of the bill upon it ; but, on the contrary, («) Faircloufch v. Pavia, 9 Bxch. 600 ; tee Art. 2289 Ciril Code, Queb«o. ih) Rose V. iSima, 1 B. & Ad. 521. (e) Bishop v. Hayward, 4 T. R. 470. 58 LkW OF BILLS AND NOTES. tho real owner of the bill may bring his action to have it given u. •— This kind of trust may be expressed on the bill itself by tho form of indorsement, as *' Tho witliin must be credited to A B;" ^Tay A B or order for my use ;" " Pay A B for the account of C D ," or "For my use ;" or " Pay A B only." But we have seen that if the in- dorsement had been merely " Pay A B," this would have been equivalent to " pay A B or order." The restrictive indorsements above mentioned amount to notice to all who may see the bill, that A B is merely a trustee of it, and therefore cannot assign to any one the right to receive on his own account the proceeds of it: 80 that any one to whom A B indorses the bill will be liable to deliver it up, or the money received upon it, to the real owner. Also, if the person who takes the bill from the trustee indorse it again to another indorsee, who receives the money on it, and pays it to the former, tho latter indorsee will be responsible for any misappro- priation of the money by such intermediate indorsee ; for it is the duty of every holder, having notice of the trust, to pay the proceeds either to the trustee or the real owner, (a) And as the trust is apparent on the face of the instrument, every person into whose hands it falls is affected with notice of it. In accordance with these principles, it has been held that when a bill or note is drawn payable to the order of A, for the use of B, it cannot be transferred for the benefit of any other than the person for whose use it is expressed to have been made, and the indorsee of such a bill is bound to see that the money he pays is applied according to the trust stated in the bill, for he takes it as trustee for the person to whom it is payable. (6) (i) See Treuttel v. Barandon, 8 Taunt. 100 ; Sigourney t. Lloyd, 8 B. & C. 622, & Bln)f. 5*25 (6) Munro v. Cox, 30 Q. B. U. C. SOS. --^--ju, _+ .^ .*.^_^^^.* ,»„.f.r-Tr^ -prr INDORSEMENTS IN BREACH OF TRUST. 6^ Where a party ia made the holder of a promissory note for one purpose, he cannot, contrary to good faith, apply it to another. Where, therefore, a note, indorsed generally, was put into the hands of A, to get it discounted for the benefit of B, and instead of doing this, ho discounted it for his own benefit; after the note had matured, as found by the jury, it was held that these facts constituted a good defence to the action, (n) But it could only be a defence between the original parties, A and B, unless the agreement appears on the face ot the instrument or the holder had other- wise notice of the agreement when he took the bill. The trusts which we have heretofore been considering are such as usually appear on the face of the instrument, but an agreement such as the above would not, in ordinary cases, appear on the instrument, and if it did not it is clear that it would be no defence as against a bona fide holder for value, without notice. Whore a promissory note is signed or indorsed on condition tliat another person becomes a party to it, and the condition is not fulfilled, the note is ineffectual as between the parties to the agreement. Thus where a note, not signed by any one, was indorsed by defendant and delivered by him to the plaintiff, upon condition that A and B should sign it as makers, and it was signed by C only, this was held a good defence, and the defendant was allowed to show these facts under a plea denying the indorsement. (6) "When a bill or note is orginally made, or has become payable to bearer, and is transferred by mere delivery, without indorsement, the transferor is, as a general rule^ not liable, (c) If the transferor merely made a gift of the bill or (a) Kerr V. Straat 8 Q. B. U. C. 83. - ; :»= m-».; "i i- • .- ('v (*) Austin V. Parmer. 30 Q. B. UC. 10. ,.,.;', n ;■,-! vs ,. v^ : v (c) Camidge V. AUeuby, B. & C. 373. :>-' v €0 LAW OF BILLS AND NOTES. note, ho is, of course, not liable, for even if ho had indorsed, he could not be sued by the transferee. If a man pays a bill or note on the purchase of goods without indorsing it, ho will not then bo liable on the bill (unless ho has agreed or promised so to be); for the man who sells the goods, having taken the bill or note without indorsement, must be presumed to have consented to look to the other parties. In fact, the bill has been exchanged for the goods, (a) So, if such bill or note were given in exchange for other bills or notes, or for money by way of discount, this is a sale of the bill, and the transferor is not liable. By not indorsing it, the transferor refuses to pledge himself to the solvency of the parties'. But if such a bill bo paid for a pre-existing debt, as for goods bought ten minutes before, the transferor will, in the absence of any understanding on the sub- ject, be liable; for the creditor is entitled to cash, and it is not to be inferred that he meant to let the debtor off by merely taking notes or bills. (6) And there are other circumstances from which a jury may infer that the implied contract was that the transferor should be responsible, witho'^t indorsement, if the bill or notes were dishonored; as, for instance, if cash were given for the instrument by a friend, as a favor, and not by way of sale or discount. A person transferring by delivery always impliedly warrants that the bill is not forged or fictitious, and if there be a single fictitious signature there will be a breach of warranty, and any cash given for the bill must be returned ; or if any other consideration be given, an action may bo brought for the breach of warranty, (c) > • .;,_3 ,,,^ ^ , i - f (a) Bee Fenn v. Harrison, S T. R, 769 ; Ex-parte Shuttleworth, 3 vei, 308. U) Ward v. Evani, 2 Ld. Raym. 928. (e) Jones v. Hyde, 6 Taunt. 487 ; Young v. Cole, 3 Bing. N. C. 724 ; Re Barrington, i acb. & Lef. 112. TRANSFEU OF NOTES PAYABLE TO IJEAUKU. 61 A person who has received a bill by delivery does not, on so transferring again, make any implied war- ranty that the signatures are genuine; nevertheless, if he knoivs that they are not so, he will be answerable for the fraud. Bills or notes payable to hearer circulate as money. The bona fide possessor of them is their true owner. Therefore, a cheque, bill, or note, payable to bearer, passes to any person honestly taking it for value, though the person transferring it had no right to transfer. Wo say honestly taking it, for mere negligence, how- ever gross, will not of itself invalidate his title. Gross negligence, however, in a man at all acquainted \7ith business, may be suflSciont evidence of dishonesty and bad faith. And these rules apply to the pledging of bills and notes, as well as to their absolute transfer; the honest pawnee obtains a property in the bills or notes, and cannot be compelled, as in the case of goods improperly pledged, to return the bills to their rightful owner, {a) An indorsement may be made on a blank piece of paper, on which no note or bill has been made or drawn ; and the effect of this is to make the drawer liable upon any bill or note afterwards drawn or made on the same paper to the extent of the stamp. The indorser cannot, when sued, set up as a defence that the note or bill was not made or drawn when he signed his name at the back. I -, In regard to signing or indorsing notes in blank, it is settled law that when a person puts his name to or on a bill or note, and gives or intrusts the blank so signed to another, that other has a general authority to fill in the blanks as he may choose, and to an unlimited (o) Barber v. Richard, 20 L. J. Excb. 135 ; Collins v. Martin, 1 Bos. & Pul. 048. LAW OF BILLS AND NOTES. amount, and tho party so Bigning is liablo npon the note or bill «o tilled up, in tho hands of a bona fide holder for value, no matter upon what private under- standing or terms tho blank was signed or parted with. If the authority to fill up the blank is conditional or limited, tho person signing must, in order to exempt himself from liability, prove the existence of the condition or limitation, and that the person taking the note liad knowledge of its violation. It is immaterial that the person signing the note is defrauded ; if the holder has given value, the only thing that will affect his claim is a knowledge of the fraud, {a) It is no objection to the validity of a note that at the time it was indorsed to the plaintiffs it had not in fact been signed by the maker; the subsequent filling up of the maker's name, or of the amount, or of the payee's name, will be treated as if made before the indorsement. (6) "Where the indorser places his name upon a note while it is in blank, there being no maker's name attached to it, nor any sum of money nor payee expressed in it, and it appears that the name of the maker was afterwards signed without authority, the indorsee suing upon such a note must show himself a bona fide holder for value, and the usual presumption in the first instance, that value has been paid to him as an indorser, will not be entertained, (c) By the Civil Code of Lower Canada, Art. 2285, when a bill or note contains the words "value received," value for the amount of it is presumed to have been received upon the instrument and upon the indorse- ments thereon. The omission of these words does not render the instrument invalid. (a) McInTies v. Milton, 80 Q. B. U. C. 489 ; see also Sanford v. Ross, 6, 0. S. 104. (6) RosBin V. McCarty, 7 Q. B. U. C. 100. 3 by indorscraont an unac- cepted bill, witli notice that the acceptance lias been refased^ ho takes it solely on the credit of the indorsor, 80 that, if the indorser cannot sue the drawer, neither can the indorsee. As, for instance, if the drawer, owing money to A, were to draw upon a tliird party a bill payable "to A or order," and were afterwards to pay the money to A, and caution the drawee not to accept, and A wore then, instead of returning the draft, to present it to the drawee for acceptance, and upon his refusal were to indorse the draft to B with notice of such refusal, and suppose then B were to sue the drawer upon his dishonored draft, the drawer might success- fnlly defend the action on the ground that A, who indorsed the draft, could not have recovered on it, and that the plaintiff took it with notice of non-accept- ance, {a) But if the transferee have no such notice, ho may sue the other parties to the bill, although his transferor could not. (6) The same principle is applied in the case of a bill being transferred overdue ; for such a bill is said to "come disgraced to the indorsee," who takes it at his peril, and " subject to all the equities with which it may be encumbered." For instance, suppose a bill, drawn on a person for a gaming debt, and accepted, were endorsed by the drawer, when overdue^ to an innocent indorsee for value, the latter could not recover against the acceptor; for the indorsee took the bill under circumstances of sus- picion, and solely on the credit of his indorser. But, if the same bill were indorsed in the same way before it became due, the indorsee could have (a) See Crogsley v. Ham. 13 East, 4G8. (b) U'Keefe t. Dunn, 6 Taunt. 305. 64 LAW OF BILLS AND NOTES. recovered against the acceptor, as well as against the -person from whom he took the bill. The above is a case, where the person who indorsed the bill overdue could not himself recover upon it, but if the indorser be able to sue upon the bill, so can his indorsee. As if, for instance, in the above case the drawer had indorsed the bill to an innocent indorsee for value before it wa=^ due, and then the indorsee had indorsed to another after due, the latter could recover, (a) "Where a bill or note is indorsed, after it becomes due, to a person who takes it with full notice that the indorser has no right to transfer it, and that the indorse- ment is in direct violation of the trust on which the indorser held the bill, the person to whom it is indorsed cannot recover on it. In general, a person taking a bill or note after it becomes due, takes it subject to all the equities with which it is encumbered in the hands of the person from whom he obtains it. A valid agreement to give time to the maker is an pq^uity which attaches to the bill, as against a person taking it after maturity, and where such agreement is made after the note comes due, by the holder for valuable consideration, a person afterwards taking the bill is bound by the agreement (6) and cannot bring an action upon the bill until the expiry of the time given. But the indorsee of an overdue bill takes it subject only to such equities as attach to the bill itself in the hands of the holder when it fell due, and such indorser would not be affected by a collateral matter like a set-off" which the acceptor might have against the person transferring the bill, (o) ■ i- Ej the Civil Code of Lower Canada, Art. 2287, if the bill or note is transferred by endorsement before it (n) Chalmers v. Lanion, ' Camp. 3S3. (6) Uritton v. Fisher, 26 <^. B. U. C 338. (c) Seo also Wood v. Ross, 8 0. P. U. C 299. EQUITIES ATTACHING TO OVERDUE NOTE. (55 becomes due, the holder acquires a perfect title, free from all liabilities and objections which any parties may have had against it in the hands of the indoraer; if transierred after it becomes due, the bill or note is subject to such liabilities and objections in the same manner as if it were in the hands of the previous holder. Where a person takes a note by indorsement, after it becomes due, with notice that it was originally an accommodation note, he takes it subject to all its equities, and though he gives value for the note, he will not be entitled to recover upon it if there was an agree- ment between the maker and indorser of the note that it should not be negotiated after it became due. lu oilier words, an agreement restraining the negotiability of the note, after maturity, is one of the equities which will invalidate the title of an indorsee for value, though he had no notice of such an agreement when his title accrued, (a) But it seems, unless there is such an agreement, the ori^nal absence of consideration, such as arises in the case of accommodation acceptances, will not defeat the title of an indorsee for value of an overdue bill or note, although the indorsee had notice of the fact when he took the bill. (6) The equity attaching to a bill or note must form part of the original consideration for which it was given, and arise between the original parties thereto, at the time the bill or note is made. Thus where a bank took a note after it was due, as collateral security to a note discounted by them for the holder of the first note, and the discounted note was paid ; it was held the maker of the collateral • te could not, in an action brought (n) Grant v. Winstanley, 21 C. P. U. C. 257. (b) lb. 261; Sturtevaut v. Ford, 4 M. & O. 101. 5 66 LAW OF BILLS AND NOTES. 4 on it by the bank, set up that the bank had been paid the full amount of the discount, (a) Where a note is made without value or consideration, for the accommodation of the payee, to enable him to raise money thereon, and the note is, after maturity, paid by the payee, it will be wholly extinguished, and cannot afterwards be negotiated to the prejudice of the maker, for payment is one of the equities which attach to an accommodation note after it is due. (6) Where an agent of the holder disposes of a promis- sory note, overdue, without authority, though for good consideration, the person taking from him obtains no title as against his principal j and an agent who exceeds his authority in negotiating a bill, cannot in any case convey a title to it if overdue at the time, and a party who takes a bill from an agent under such circum- stances that his title is affected by the wrongful act of the agent, is liable to refund to the principal money which he may receive in discharge of the bill from the previous parties, (c) Where the holder is a mere agent, and tak^ it when overdue, the maker may avail himself of all defences which he would have against the owner of the note, (d) It is no defence to an action by indorsee against the maker of a note, that a prior indorsee, while the holder, and before the plaintiff" took it, recovered a judgment against the defendant and payee, and that the note was indorsed to the plaintiff when it was overdue, (e) If a promissory note is indorsed over as a security for advances only, the holder is subject to the same equities as the payee. (/ ) (a) Canadian B C. v. Ross, 22 C. P. U. C. 407. (A) Pyper v. McKay, IC C. P. II. C. 67. (c) West v.'McInnes, 23 Q. B U. C. 357 ; Loe v. Zagury, 8 Taunt. 114. (d) Brooks v. Clejrg. 12 L. C. R. 461. (e) SlcLennan v. McMonies, 23 Q. B. U. C. 114. (/) Estabrooke v. McKenzle, C. M's. 69 Steven's Digest N. B. Reports 78. PAYMENT AT MATURITY. 67 An indorser of a promissory note cannot pay the amount of a judgment obtained thereon against a previous in- dorser, and enforce it for his own benefit, (a) When once paid at maturity by the acceptor or maker, bills and notes are extinguished and cannot again be negotiated ; but if paid before maturity, they will st 11 be good in the hands of a bona fide indorsee for value, who has taken them without notice of their having been paid. A bill or note which is paid at maturity by or on behalf of the party primarily liable thereon, is for all pur- poses satisfied and discharged as a bill or note. The giving of a renewal note at maturity operates as a pay- ment which extinguishes the original note, and the lia- bility on the original note will not revive on the dishonor of the renewal bill. Where an overdue note has been retired by the substitution of a renewal note, the original note is so far cancelled that it cannot be put in circulation again, even by the payee, who has taken up the renewal note out of his own funds, (b) But until a note or bill has been paid by the person originally liable upon it, it continues to be negotiable ad ivfiniiumj so that the right of action which the holder for value must necessarily have n p^ainst him may be trans- ferred from one to another, notwithstanding some one of the latter parties to the note or bill may have paid it in his own discharge ; therefore a second accommodation indorser who has paid a promissory note after its becom- ing due m?j,y sue the maker or any prior party, (c) The only exception to this rule is in the case of an accommodation note which has been paid by the drawer at maturity ; such note cannot be re-issued, (d) In all other cases the drawer or indorser who has taken up a dishonored bill at maturity can, instead of himself suing (a) Carr v. Cowlter. 2 P. R. U. O. 317. (b) Cuvillier v. Fraser. 5 Q. B. U. C. 152. (e) Breezo v. Baldwin, 5 O S. 444. (d) liazarus v. Cowie, 3 Q. P.. 404. 08 LAW OF BILLS AND NOTES. the acceptor, indorse the bill to another pers'm, who will have that right. When the acceptor or maker has made a partial pay- ment at maturity, the ])alance only can be recovered by the holder. The holder of a note, on which part of the considera- tion has been paid, can only indorse for the whole of the balance. When a bill is transferred for part only of the sum due upon it, if this fact appears on the bill itself, the indorsee must sue in the name of the person who trans- ferred to him ; but if the indorsement do not mention the fact, and there be no memorandum of it (m the bill, the indorsee can sue and recover in his own name the wJiole amount of the bill, and will be a trustee of the surplus for his transferor. After taking a release of the bill, or after bringing an action on the bill, the holder caimot indorse so as to con- fer a title on any one who knows of the release or the action, as the case may be. By indorsing a bill, the indorser admits the genuine- ness of the signatures of all prior parties ; and in arj action by an indorsee against his immediate indorser the latter cannot set up that the names of the prior parties are forged, (a) The indorsee of a not*' cannot deny the title of his immediate indorser ; and where the first and second indorsers of a note are .sued thereon, the latter cannot st-t up as a defence that the first did not indorse the note as alleged. (6) An indorser of a note undertakes that he has a c:ood right to transfer it to the immediate indorsee. When a note is made to two persons jointly, who are not part- (o) Eftstwood V. Westley, 6 O. S. h^ ; See also McLood v. Carman. 1 Rannay, 5»2 ; Ross V. ')ixil, 7 ij. B. U. C. 414. (ft) Griffln v. Latimtr, 13 Q. B. U. C. 187. INDORSEMENT BY PAIlTNEliS. G9 ners, both must indorse, unless one has authority to write the other's name ; and one of them cannot in his own name alone, without the authority of the other, con- vey a title by indorsement. But any person who, after such indorsement, puts his name on the note, will be liable to an action, at the suit of his indorsee, for as against the latter he would be estopped from disputing the validity of the previous assignment to him. But in such a case as the above, the makers might take advantage of the defect in the indorsee's title, if an action were brought against them, (a) One partner of a firm of attorneys and solicitors has no authority to use the name of another in indorsing notes. In an action against B & S, a firm of solicitors, on pro- missory notes endorsed by B, in the name of the firm, it was proved that on other occasions S had indorsed in the same manner, and as the witness believed, with B's knowledge ; but it did not appear what the consideration was for the indorsement sued oh, or that S knew of it. This was held sufficient evidence to go to the jury of a mutual authority ; and a verdict having been found for the plaintiff, the Court refused to interfere, {b) One of several executors can indorse a note payable to their testator, (c) An executor or administrator may indorse and transfer bills and notes, though tlie parties indebted upon them at the time of the testator's or intestate's death resided out of the jurisdiction irom which the administration emanated, (d) Where a note is made by a resident of Canada, payable to A or order, who dies in the United States, having the note there in his possession, his administrators appointed there may indorse, and transfer the property in the note, («) Thurgar t. Clarke, 2 Kerr 37? (b) Workman v. McKlnstry, 21 (i- h. IJ. C. flSS. (e) Almon V. Cook, S Thomi^on 265. (d) Wrltrht >. Meriitm, 6 O. S. 463. 70 LAW OF BILLS AND NOTES. SO as to enable the indorsee to sue upon it in his own name in this country, without their taking out letters of administration here ;. but if the administrators appointed by the. foreign court desired themselves to sue on the note in this country, as representatives of the payee, they would have to shew administration granted to them by the proper authority in this Province. («) The acceptor or maker cannot be called upon to pay any person who does not appear on the face of the bill entitled to the money; and where a bill is made payable to A or order, though the beneficial interest is in B, the right to transfer, and to sue upon the bill, is in A alone. (6) The indorser, like the drawer of a bill of exchange, is liable to the holder the moment the drawee has refused acceptance ; and the holder is not forced to wait until the bill has been presented for non-payment, (c) By the Civil Code of Lower Canada, art. 2298, when- ever acceptance of a bill of exchange is refused by the drawee, the bill may be forthwith protested for non- acceptance ; and after due notice of such protest to the parties liable upon it, the holder may demand immediate payment of it from such parties, in the same manner as if the bill had become due, and had been protested for non-payment. The words, " I guarantee the paj'^ment of the within," written upon the back of a promissory note, over the signature of the payee, may be treated as an endorse- ment of the note, and not as S guarantee or collateral agreement for its payment, (d) This case would seem to be overruled by that of Palmer V. Baker, where such a memorandum was treated as a guarantee, (e) (rt) Hard v. Palmer, 20 Q. B. U C 208. (6) Bank U. C. v. Ruttan, 22 Q. B. U. C. 451 ; see also Corporation County Perth v. McGregor, 21 Q. B. U. C. 459. (c) Ross V. Dixil, 7 Q. B. U. 0. 414. ?/<) Walker V. O'Reilly, r U. C. L. J. 300. i») 23 C. P. U. C. 302. WHAT NOTES NEGOTIAIILE. 71 A promissory note payable to the order of an Insurance Company, and given in payment of a premium of insur- ance, is negotiable. A memorandum at the foot of the note, indicating its consideration, does not limit its negotiability. The indorsement of such a note by the secretary of the company, in that capacity, is sufficient to pass the title to the note to the plaintiffs, an implied authority in him to do so having been shewn by proof of the ordinary business of the company, that the directors had effected the arrangement with the plaintiff's, of which the transfer of the note formed part, and that the company had received the consideration of such transfer, (a) A billet promissoire en brevet, executed in notarial form before two notaries, without signature or mark, (the defendant being unable to write,) payable to a party or his order, is negotiable by indorsement in the ordinary way. (6) When a note is made payable to A B, or order, the latter must indorse the note before he can maintain an action against another person as indorser. (<;) And where a note is made payable to B, or order, and indorsed only by C in blank, B cannot sue C as maker of the note, (d) When a man makes a note payable to his own order, and indorses it, the note becomes a note payable to bearer, but not to any particular person ; and though any holder of such a note may sue the indorsee thereon, he should not, in his declaration, describe the note as pay- able to himself or bearer, (e) (a) Wood V. Shaw. 3 L. 0. J. 109. ib) Morrin v. Deslauriers, 3 L. C J. 66. x fe) MolTatt v. Rees, 15 Q. B. U. C. 622. (d) Wilcocks V. Tinning, 7 Q. B U. C. 372 ; following Thew v. Adanu, 6 O. S. 60. («> Burn* V. Harper. 6 Q. B. U. C. 60». 71 CHAPTER V. OF PAYMENT, SATISFACTION, EXTINGUISHMENT AND SUSPENSION. The holder of a bill or note may, if payment be refused by the acceptor or maker on presentment, immediately give notice of dishonor to all or any of the earlier parties to the instrument, (a) But the maker or acceptor has the whole of the day of the presentmont in which to pay, and if he pay on that day, though after a refusal, the payment is good, and the notice of dishonor, if given, falls to the ground. (6) No payment will discharge the maker or acceptor, unless it be made to the true holder. For instance, if the drawer have indorsed an accepted bill to his bankers, who give him credit for it, and the acceptor at maturity pay to the drawer, the acceptor is liable to be sued by the bankers and may have to pay over again, {c) If the bill or note be not payable to bearer, that is, if it has required indorsement to make it the property of the holder, the acceptor or maker should be satisfied, on paying the money on presentment, that the indorsement is genuine ; for if it be forged or made by an unauthor- ized person, the payment will be no discharge, and the money may have to be paid over again. (a) Ex parte Moline, 1 Rose 303. (») Hartley v. Case, 1 C. & P. 656. ((-} See Field v. Carr, 5 Bing. IS. PAYMENT. 7'i To the mle that no payment, save to the true holder, will operate as a discharge, there is an exception in favor of bills or notes made or become payable to bearer. Not only does a person who has taken such instruments bona fide and for value from one who has found or stolen them, acquire a title to thom so as to be able to recover on them, but a payment made bona fide and without negligence, even to the tinder or the thief, will discharge the party paying, though the finder or the thief could not recover on the instrument in a court of law. (a) But where a note is payable to bearer, and before it }>ecomes due, the plaintiff, for a valuable consideration, de- livers \'i to certain persons, unknown to the maker, who lose the note, and the same then comes into the hands of the plaintiff by finding, and not by assignment or delivery for consideration, and the persons who lost the note are entitled to it, the plaintiff cannot recover thereon. (6) If a bill be paid by the drawer, the holder may still, at the drawer's request, sue the acceptor on it, and thus re- imburse the drawer, or the drawer may himself sue the acceptor. If the holder sue he will be a trustee for the drawer of the amount recovered from the acceptor. This rule arises from the acceptor being the person primarily liable, and, therefore, does not apply to accommodation bills, in which, as we have seen, the drawer is usually the person primarily liable. Payment by the drawer, there- fore, of such bills is a complete discharge of the bill, (c) By article 2,313 of the Civil Code of Lower Canada, payment by the drawer of an unaccepted bill finally dis- charges it. If it be accepted he is entitled to recover from the acceptor, unless the acceptance is for his accommoda- tion. And by article 2,312 the obligation of the acceptor to pay the bill is primary and unconditional, and legal (a) fivles on Bills, 0th edition, 213. I») Wanzer V. Storkanburgh, 13 Q. B. U. C. 184. (•) r^AZonu V. Cowie, 3 le, the acceptor or maker of a bill or note, made or become payable to bearer, and not yet due, may pay the present holder, and atrai^ditway, for a consideration, give the instrument to another. Or if a bill payable to bearer bo paid by the acceptor before it is due, and, instead of being destroyed, f,'et lost, and the person finding it give it to a bona fide liolder for value, such last-mentioned holder may recover on it at maturity. A bill or note payable on demand can never be pre- maturely paid, and, therefore, a payment on «lemand of such a l)ill will be a defence even against an indorsee for value without notice of the payment, for such bills arp prevented b\f statute from circulating again. When the note is payable on demand it cannot 1)0 as- certained, from inspection of the note, when it became due, and such a note is not considered as overdue unless there be some evidence of payment having been refused ; but it would seem that if payment has been demanded and refused, or if the note has actually been paid before it comes into the hands of the holder, the latter will have no better title than the j^erson from whom he ob- tains it. If, therefore, a note payable on demand has been paid, or if payment has been demanded before it reaches the holder, the latter cannot recover, even if he is an indorsee for value, without notice of the payment, (a) A note payable on demand was indorsed to the plaintiff' as security for a liability he had incurred for the payee ; the maker afterwards paid the amount of the note to the payee, and the Court held that the note not having been absolutely transferred to the plaintiff, he stood in the same position a*s the payee, and could not recover, {b) Payment may be made in money or by means of any (a) Doui^n t. Small, 2 Kerr 89. ^ ib) Estabrooki v. M'Kenzie, Hil. T. 1827 ; Steven't DiifMt, N. B. H«port8 66. 79 LAW or BILLS AND NOTES. « other consideration. Payment of a smaller sum can never be a satisfaction of a larger sum. (a) By article 2,318, payment of a biJ or note must include the full amount of it, with interest from tne last day of grace, and all expenses of noting, protest and notices legally incurred upon it, with the damage prescribed by law. If it be made by a cheque, as is often the case, and the bill be given up to the acceptor, and the cheque be dishonored, the drawer and indorsers will be discharged ; for they, when the}/ pay, have a right to have the bill given up to them, and, if the acceptor has the bill, this is impossible. (6) It has been held, nevertheless, that an agent, unless ordered to the contrary, is justified in giving up the bill on receipt of a cheque, (c) The same result would probably be considered to arise if the payment were made in bank notes, and the baiter were to fail, (d) When a man is sued upon a bill or note, and he pro- duces a cheque for the amount of the bill or note drawn by him, and which has passed through his banker's hands, and bears the plaintiff's name at the back, this raises a presumption of payment, unless there have been so many dealings between the parties that it is impossible to say, to which the cheque in question relates, (e) It may be observed that upon payment of a note the holder must deliver it up to the person paying. This delivery is of great importance when a bill is paid before maturity, for, as we have already seen, a note may be negotiated after payment, unless it is paid at maturity by or on behalf of the party primarily liable thereon. The delivery is also of importance where the payment is not made to the true holder. (a) See Fitch v. Sutton, 5 Vast 230. (») Powell V. Roche, 6 Esp. 76. re) RuBsell v. Hankey, 6 T. R. It. (d) Vernon v. Bouverie, 2 Show. 29r the original debt. We have spoken of the debt being dischimjcd by the negligence of the creditor who has taken the bill; this refers to the case where the debtor, giving the bill for the debt, is drawer or indorser, and must have punctual notice of dishonour. If the debtor were acceptor or maker of a bill or note, he cannot be discharged by the creditor's negligence. The law will be the same if the debtor request the creditor to take a bill or note of a third person, and the bill or note is dishonored; the creditor may sue his original debtor. The same where, not having the option of taking cash, he takes a bill of the debtor's agent, (c) We have seen that whore a bill or note made or be- come payable to bearer, is given, though without in- dorsement, for a pre-existing debt or past consideration to a creditor who is entitled to money, the creditor may still sue his debtor if the bill is dishonored. But if the payment of such a bill be made, not for a past debt, but for an immediate consideration, such as the salp of («i) Cardon ▼. Rputer, L. 0. J. JIT. (A) Sibree v Tripp, 15 M. & W. 2S. (e) Marsh v. Pedd«:r, 4 Camp. 257 ; Rubinion v. Read, B. A C. 449. . M| LAW OF DILLS AND NOTES. goods then and there, the seller is supposed to consent to take the bill in exchange for the goods, and as h& has not insisted on indorsement, he cannot sue the buyer if the bill turns out worthless, for the bill has been simply exchanged, with all its faults, for the goods. But a bill may, in the same way, by agreement be- tween the parties, be taken, not only upon such a bar- gain as that just mentioned, but for a pre-existing debt. In fact, a debtor may, by express agreement with his creditor, give him a bill payable to bearer without in- dorsing it, so as to be at once, and whether eventually paid or not, a satisfaction and payment of the debt. But though, in the absence of an agreement, a cre- ditor does not receive payment of a debt by simply taking the bill or note of his debtor, yet if his debtor be a firm, and he takes the separate note of one of the part- ners, he will be taken to have discharged the firm, and to rely solely upon the single partner, unless, of course, there were an express agreement that the others should remain liable. This is because, in the case of the bank- ruptcy of the firrrij or the death of the partner, the cre- ditor might be in a far better position than if he had the whole firm as his debtors, and this advantage amounts to a consideration. Where a man has a lien on goods, and he takes a bill or note for the debt, the lien on the goods ceases, and he must give them up to the owner, unless there is an express agreement for him to keep them. There are* other circumstances under which a bill or note may be as much satisfied, and the remedies on it extinguished, as by means of payment strictly so called. Although, as we have seen, part payment by the party owing a larger sum can never satisfy the whole debt, yet such part payment, if accompanied by an act done at the request of the creditor, will amount to such a consideration, as is capable of efiecting this object. ACCORD AND SATISFACTION. WT If, for example, it be agreed between tbe acceptor and tbe holder of a dishonored bill for $100, that the acceptor shall pay 10 cents in satisfaction of the debt, this consideration will be insufficient ; whereas, if to the payment of 10 cents it be agreed to add the delivery of a loaf of bread, the bill will be thereby discharged ; and tliis may be done though an action has been brought. Tills is called " accord and satisfaction." Before maturity, a bill or note may be discharged either by deed or by other writing, or by word of mouth ; in cither case, without aw/ consideration. If, however, the bill or note should not be given up, or a memorandum made on it, the holder may frustrate what he has consented to do, by transferring the bill or note to a bona fide holder for value, without notice. After maturity a release (strictly so called) can only be effected by deed, for which, however, there need be no consideration, and this binds the releasor's trans- ferees, who, though they have no notice of the release, yet cannot recover on the bill ; for the bill being over- due, should put them on their enquiry. A bill taken from one of two partners in his own name, may be a satisfaction for a joint debt, (a) Foregoing a defence to a suit may be a satisfaction of a debt. Taking a bill or note for a smaller sum may be a satis- faction for a larger sum, for the negotiable quality of the instrument confers an advantage, as does also the more effectual remedy afforded by law upon such in- struments. If a creditor takes the bill or note of a third person in satisfaction and discharge of a debt owing by another, the debt will then be extinguished, and it will not re- vive on the dishonor of the security ; but it \i\ alwayi (•) Thompson r. P«aotviil, 6 B. ft Ad. 025, H^ LAW OF BILLS AND NOTES. a question for a jury, whether the inatrument be so taken, or merely by way of further security, or on account, (a) A bill indorsed in blank to one of several acceptors, and in his hands when due, can neither be sued on by the holder, nor transferred by him so as to confer a right against any of the acceptors, (h) Whenever the acceptor or maker of a bill or note is discharged, all the other parties are discharged, for the surety is always discharged by the discharge of the principal. But there is no principle upon which, as a con e- quence of law, the satisfaction of a bill as between the indorsee and drawer operates as a satisfaction and dis- charge in an action by the indorsee against the acceptor, and such satisfaction will not avail between the indor- see and acceptor without its being further shewn that such satisfaction or payment was made on the acceptor's account, and that ho adopted it at the time of payment or 8ubseq:ently. (c) The taking ot a promissory note does not operate as a novation, and will not extinguish the original debt unless it be paii)> real V Armour, C. P. U. C. 401. (a) Braoduiu v. l>almM«e, 7 L. C. B. 47. SATISFACTION. > sea before its acceptance, the drawer was held liable on the original consideration. («) A mere statement by the holder of a note, that he , would accept an order for the amount thereof, will not amount to a satisfaction of the note ^here there is no acceptance in writing, and the note is not given up, and the order is obtained again some months after by the person presenting it. (6j "When the holder of a bill sues the drawer, acceptor, and subsequent indorsers in one action, and tlieindorsers appear, but the drawer and acceptor do not appear, and thereupon the plaintiff signs judgment against them, and abandons the action against the indorsers, but the latter do not sign judgment of non pros, nor is any dis- continuance entered as to them, this will be no bar to a subsequent action against the indorsers. (c) Issuing execution against either the body or goods of one party does not discharge the others ; but discharg- ing a party whose body has been taken in execution will operate as a discharge to all those pa tics to the instru:r.cnt who stand as his sureties. Waiving the right of taking his goods in execution will not have the same effect. {*() Judgment recovered on a bill or note is an extin- guishment of the original debt as between tho plaintiff' and defendant; but it alone without actual satisfaction is no extinguishment as between the plaintiff' and other ■ parties not jointly liable with the original defendant, whether those parties be prior or subsequent to the defendant; (e) nor is it an extinguishment as between a party prior to the plaintiff, to whom the plaintiff, after the judgment, returns the bill and the defen- dant, (e) (a) Boyd ▼. McLauchlan, 1 Kerr 210. S30. *) Williams v. Manthall, 20 U. B. U C 2! (e) Bank U. 0. v, Llaun, 11 C. P. U C 1V6. 01) See Ha} ling v. HulhaU. 2 W. HI. 1286 ; Pole t. Ford, 2 Chit. 12fi. («) Bayley, 335 ; CluxUm v. swift. 2 Show. 441. If) Tarleton v. AUbuaea, 2 Ad. ft E. 82. 90 LAW OF BILLS AND NOTES. Where several persons are liable as joint makers of a promissory note, the recovery of a judgment against any one of them will operate as a merger of the right of action against all, and the holder cannot afterwards proceed in an action for the amount of the bill against the other joint makers, (a) "Where the holder of a note brings a suit against the payee and indorser, and fails for want of proof of notice of dishonor to the defendant, this judgment will be no bar to an action by an indorsee of the defendant prior to the former holder, and not claiming in any way, by, through or under such holder, though the notice of dis- honour relied upon by the indorsee is the same notice which the former holder failed to prove, (b) Plaintiff having an account against defendant and W K, settled it by taking "W K's notes, payable at a future day in favour of plaintiff and his partner, and gave a receipt at the foot of the account, stating that he had received payment by the notes (describing them), and the Court held the original debt was ex- tinguished by the notes, (c) If a bill or note be given by way of payment of a debt, no action can be brought for the debt till the maturity of the bill or note ; also, if another bill or note be given, by way of renewal of a former bill or note, no action can be brought till the maturity of the second bill or note, (rf) Taking a bill of exchange is notf per se, a satisfaction of the debt, but operates only as a suspension of the plaintiff's right to recover on the consideration of the bill until he has done all that is necessary to procure satisfaction of the debt by means of the bill, (e) («) Hollowell T. MacDonell, 8 C. ?. U. C. Jl. . (») Smith V. Burton, 11 C. P. U. C. 273. (•) Tho>-npson ▼. Keith, Eait T. 1864 ; Steven's DigMt ; N. B. Reporto, 77. {d) Keanlake v. Morgan, 6 T. K. 613 ; Kendrick ▼. Lomaz, 2 C. A J. 40». («) Emeraon v. Cardinor, 1 Allen 461. MERGER OF REMEDT ON BILL. 91 An agreement to renew a note cannot be inferred trom the fact ot the holders' not returning a renewal note sent then , when on receipt of the renewal note they declined to renew, (a) "Where the maker of a note, after it becomes duo, deposits with the holder the notes of other parties as collateral security, upon an agreement that the holder shall not sue upon the principal note until the colla- teral notes become due, this will form no defence to an action on the principal note, and the only remedy would be a cross-action against the holder for the breach of agreement. (6) The general rule is that where a security of a higher nature is taken for the amount of a bill or note, the latter merges in the former, and no action can after- wards be maintained ot the bill or note. But the liability on a bill or note will not thus be extinguished unless all the parties to it are parties to the higher security, so that the note or bill will be in its entirety merged, and the remedy on the higher security will be co-extensive with the remedy on the note. If, there- fore, one of the parties to a bill give the holder thereof a mortgage, this will not extinguish the liability of the others, (c) But if the higher security is given by one of two joint-makers of a note, and the note is merged as to the person giving the security, it will also be merged as to the other. Thus, where one of the joint makers of a note, after it fell due, by indenture coven- anted with the plaintiff to pay him $319, the amount of the note, with interest at 15 per cent, in one year, and delivered the indenture to the plaintiff, who ac- cepted it, tho note was held to have merged in the speciality, though it did not appear that the latter was accepted in satisfaction, (d) ' (a) Lyman v. Chamard, 1 L. C. J. S86, (») Durand y. Stevenson. 6 Q. B. U. 0. 888. (•) Oura Bank v. M-Whirter, 18 C. P. U. G. 203 ; see also Fraaer r. Armitrong, 10 O. P. U. C. 600. (i) M'Leod ▼. U'Say, SO Q. B. U. C. SM. 92 LAW or BILLS AND NOTES. "Where a creditor took from his debtor a note of a third party, indorsed by the debtor as a security for a portion of liis debt, and afterwards took a mortgage from liis debtor for the whole sum due him, and ap- pointed a (hiy for payment more distant than that on whici) the note was to fall due, with the usual covenant in tlio mortgage to pay the money, the Court held that the remedy against the debtor, as indorser of the note, was extinguished by the taking of the mortgage for the same debt, tliere being no reference in the mortgage to the note as being an outstanding security for the same debt. (") But where the higher security is taken as collateial security, and there is an intention shown on its fact; that the lower security is not to be merged, full efffct will be given to the intention of the parties. (6) Where the right to sue on the note is expressly re- served in the mortgage or specialty there will be no merger of the note, (c) When a note is held as collateral security to a mortgage, the mortgagee may sue on the note and on the mortgage at the same time, and even the indo!see of such a note may recover thereon, though he takes it after it becomes due and sues thereon at the same time that his indorser, the mortgagee, is prosecuting a suit to foi eclose the mortgage, (d) The liability on a promissory note will be extin- guished by taking a chattel mortgage for the same debt, though by a verbal understanding between the parties the chattel mortgage was to be held as a colla- teral security, (e) (a) Mathewson t. BrouRO, 1 Q. B. U. C. 272. (*) Murray v. Miller, 1 Q. B. 11. C. 868 ; see also Gore Bank v. M'Wbirter, 18 C. F. U. 0. 203. (e) Com. Bank v. Cuvilller, 18 Q. B. U. C. 878. id) Shaw V. Boomer, 9 C. P. U. C. 468. («) Parker v. M'Crea, 7 C. P. U. C. 124. i# CHAPTER VI. OP PRESENTMENT AND ACCEPTANCE. Every bill shoiiid be presented by the holder for acceptance without delay, for if the bill be accepted he has the acceptor's security ; aud if the acceptance be refused, then the prior parties become imniedialely liable. For this purpose, in the event of refusal, votice of non-acceptance, i. e. dishonor, should at once be given. Though presentment for acceptance is always desir- able, and though upon non-acceptance prior parties are always chargeable, yet it is only in case of bills pa} able at sighty or a certain period after sight, that such jiresent- ment is absolutely necessary. It is, however, clearly the duty of the holder to pre- sent a bill, drawn payable at a certain number of days after sight, to the drawee within a reasonable time for acceptance, and if acceptance is refused it is the duty of the holder to give notice of the non-acce[>tiince to all prior parties. Notice of non-acceptanco and non- payment should be given to the drawer and indorser of the bill, and where notice of non-payment only was given to an accommodation indorser of such a bill, he was held discharged for want of notice of non-accept- ance, and the Ct)urt declared that the fact of tiie drawee having no effects of the drawer in his hands, aud of the 94i LAW OF BILLS A (TD NOTES. indorser being an accommodatioa indorser onlj, did not vary the rule, (a) By Art. 2,290 of the Civil Code of Lower Canada, bilU of exchange payable at sight, or at a certain period after sight, or after demand, must be presented for acceptance, so that the law in the Province of Quebec is similar to the law in the other Provinces of the Dominion. To procure the drawee's acceptance, the bill should be taken within a reasonable time, at business hours, to the place of business of the drawee, or his residence as described on the bill, or his other known place of abode, or such other place as he m9y have removed to in the neighborhood, and it must there be presented to the drawee or his authorized agent. If the drawee have absconded, such presentment is excused. It is likewise excused by illness, or any other accident not attributable to negligence in the holder. The drawee may keep the bill twenty-four hours for deliberation, but if he keeps it longer prior parties should have notice, in order to make them chargeable. If the drawee be dead, the bill should be presented to his personal representative. In the Province of Quebec the presentment is made by the holder, or on his behalf, to the drawee or his representative, at his domicile or place of business, or if the drawee be dead or cannot be found and is not represented, presentment is made at his last known domicile or place of business. The presentment must be made within a reasonable time from the making of the bill, according to the usage of trade and the discre- tion of the Courts. (6) Presentment of bills payable at or after sight is excused by their being put in circulation, (c) la) Oora Bank ▼. Oraisr. 7 C P. U. C. 844. h) See ArtidM 2290-1 of the Civil Code, (c) MuUuuui ▼. D'Eguino, 8 H. BI. fiW. ' 1 ' PRESENTMENT FOR ACCEPTANCE. 95 Where a bill of exchange is payable at a certain time after date it need not be presented for acceptance, but may be held till due and then presented for payment ; and where a bill is payable at a particular place, but is not accepted or presented for acceptance, presentment for payment at that place on the day it falls due is suf- ficient to charge the drawer, as the obligation of noti- fying the drawee of the place of payment lies on the drawer, (a) In a case where the declaration alleged that on the 27th day of August, 1870, C. & J. Lortie made their draft at three days on J.Redpath & Son, Montreal, which they handed to Harris, who on the 29th indorsed it over to Schowb, et al; that the latter presented it for acceptance on the first of September following, which was refused, and the draft was protested for non-acceptance on the 8th of September, the Court held that the plaintifi did not use legal and sufficient diligence in and about the presentment and protest of the draft, and the action was, dismissed. (6) As to presentment for payment of bills and notes, a personal demand on the drawee or acceptor is not necessary. It is sufficient if the bill be exhibited and payment be demanded at his usual residence or place of business, of his wife or other agent, for it is the duty of the acceptor, if he is not himself present, to leave provision for the payment, (c) And it is the duty of the maker of a note to find the holder wherever he may be and tender him the amount before action, and the tact that the holder resides out of the country will not alter this obligation. Thus, it has been held that the amount of a note payable on demand by a debtor, in the Province of Quebec, to a foreign creditor, was U> Richurdson t. Daniel*, 5 O. S. 071. h) Harris v. Schowb, 1 Rerue Critique, 478. (c) MatUiew* v. Uaydon, 2 Eap. ft09. 96 ' LA.W OF BILLS AND NOTES. - recovcrnblo with costs in tlmt Province by the creditor, witliont proof of any Ueniand before institution of action, (a) But a bill or note payabln at or after sight must be presented, in order to cluirgo the acceptor or maker. {b\ By Art. 230G of the Civil Code of Lower Canada, every bill of exchange must bo presented by the holder, or in his behalf, to the driiwee or acceptor for payment on the afternoon of the third day after the day it be- comes due, or after presentment for acceptance if drawn at sight, unless the third diiy is a legal holiday or non- juridical day, when the presentment must be on the next day thereafter, not being a legal holiday or non- juridical day. If the bill be payable at a bank, present- ment may be made there either within or after the usual hours of lianking. But every bill or note payable at a bank, or other stated place only, shall at maturity be presented for lyraent at sucli hank or place only, (c) And by Art. 2307 of the Civil Code, it a bill of ex- change be made payable at any stated place, either by its original tenor or by a qualitied acceptance, present- ment must be made at such place. If the bill or note be payable generally, presentment is made at maturity to the acceptor or maker, as the case may be, either personally or at his residence, or office, or usual place ot business, or, if by reason of his absence and not hav- ing any known residence or office, or place of business, or of his death, such presentment cannot be so made, it may be made at hii last known residence or office, or usual place of business, in the place where the ac- ceptance or note bears date, {d) By the Con. Stat, of Lower Canada, chap. 64, s. 9, every such bill and note shall be held to be payable (a) Shuter v, Paxton, 5 L, C. J. 55. h) liixoii V. Nuttall, 1 U. M. & K. 307. (c> Cun. SUt L.C. c. 64, s. 16. {U) Art. 230d ; Con. Stat. L. C, c. 64, s. 15, s-s. 2. PliESENTMENT AT STATED PLACE. 97 generally, unless it is expressed in the body tliereof that the same is payable at a bank or other stated place ; ftnd every acceptance of a bill shall be deemed and ' taken to be a general acceptance, unless the same is ' ez)>ressod to be payable at a bank or other stated place. But when the acceptance or the promise is made pay- able at a bank or other stated place, as aforesaid, it is deemed and taken to be a qualified acceptance or promise, and is pay.ible at such stated place only, and the acceptor or maker shall not be liable to pay such bill or note, ex- cept in default of payment, when such payment is duly demanded at such bank or other stated place. This statute is similar to that in force in Ontario, ex- cept that in the latter Province the acceptance or promise is not qualified unless it is expressed to be payable " at a bank or at any other particular place only, and not other- wise or elsewhere;" but when so stated, the acceptor or maker is not liable without a presentment at the stated place. On the statute in force in Quebec, it has been held that a promise to pay at a specified place is not a promise to pay generally, and that there is no liability on the part of the maker of a promif >ry note payable at a specified place, unless proof be given of a presentment and demand of payment at such specified place, and of a neglect or refusal there to pay the amount of the note, (a) As we have already seen, if a bill be accepted payable at a particular place only, and not otherwise or elsewhere, or a note be made so payable in che body of it, it must be presented at that place at maturity in order to charge the acceptor or maker; and, in the Province of Quebec, such presentment is necessary when the note is payable at a stated place, without the addition of the words, and " not otherwise or elsewhere." («) O'Brien ▼. Sterenson, 16 L. C. K. 266. 98 LAW OF BILLH AND NOTKS. Except in the eases in which presentment is necessary under the stittites in force in Ontario and Quebec, the acceptor of a bill or the maker of a note is alwayn liable upon it, whether presented or not; but presentment is necessary in order t») charge parties secondarily liable. The undertaking^ of an indorscr is conditional to pay if the maker does not, and there mast be a presentment, or what is equivalent to a presentmeit, to the maker before the indorsor can be called upon to pay, even when the note is indorsed to the plaintiff after it has matured. When the plaintiff takes the note after it bucomes due, he cannot, of course, present it on the day it became due, but he should first call on the maker to pay, and on his failure to do so, may proceed against the indorser. (a) In the Province of Ontario, when a note is jmyable at a particular place, but the words " and not otherwise or elsewhere " are omitted, it is not necessary in an action against the indorser to shew a presentment at that place, (b) A presentment at the f;tated place would be sufficient whether the maker was to be found or not, but a present- ment to the maker at any ])lace is all that would be re- quired in order to charge the indorser. (c) But there must be such a presentment to the maker, as the law requires, on the day the n te falls due. Under our statute the effect of the omission of the words, " and not otherwise or elsewhere," is to make the note payable generally. The result is that, as against the indorser, a presentment at the particular place specified is not re- quired ; but the statute does not alter the rule of law that a note or bill must be presented at maturity to the party primarily liable thereon, in order to charge the indorsen. Such presentment is in all cases required. When the instru- ment is payable generally, the presentment, in order to (a) Davii t. Dunn, « Q. B. U. C. 327. (*) Com. Bank v. Culver, 3 Q. B. U. C. 303 ; Bank U. C. t. Paraonn, 8 Q. B. U. 0. 8SS. (e) Coin. Bulk v. JuhuitoB, t Q. B. U. C. 126, 2 O. 8. 126. PRESENTMENT AT STATED PLACE. 99* charge the indorser, may be at the place specified, or at the residence or place of busijiess of the party primarily liable ; when the acceptance or promise is (pial fled under the statute, in order to charge the indorsor the present- ment can only be at the particular place specified, and the instrument must be presented there at maturity in order to charge either the indorser or the party primarily liable thereon. In the Province of Ontario, a note made payable at a particular place does not require any special presentment ' if it is in the hands of the holder on the day it matures at the place where it is payable. When the note is payable at a particular place, it is the maker's duty to provide funds for it at the place where it is payable ; and the holder residing at such place is not obliged to go through the empty form of presentment any more than if under precisely similar circumstances it would be necessary to do so were the note lying at a bank, they being the holders thereof, (a) It has been held in the Province of New Brunswick^ that when a note is made payable at a particular place, as ' against the maker, it will be sufficient to present it at that place at any time before action brought ; and it need not be presented on the very day it falls due. (b) And it has been held in the Province of Quebec, that, as against the maker of a note no demand of payment is necessary before bringing an action, though the note is payable at a particular place. The only effect of the want of a previous demand would be this, that the defendant might reply to the action that he had funds at the place of payment and that he would pay the note there, or he might bring the money intf> court, and, in consequence of the want of a previous demand, throw the costs of the action upon the plaintiff. (•) HmtIb ▼. Pernr. 8 O. P. U. C. 407. (*) Ratcbford t. Qriffitb, S Kerr 111. 100 LAW OF BILLS AND MOTBI. But evidonco of no funds at the place of payment will •XCU80 the plaintiff from proving a previoun demand, in order to entitle him to his costs in such a case as the above ; and a partial payment is a waiver of all objection as to want of demand of payment, (a) It is quite clear that at the present day, in the Province of Quebec, the maker would not be liable without a pre- sentment of the note at maturity at the place where it is payable. But if there was such a presentment, and the maker's liability thereby fixed, the case goes to shew that the want of a demand of payment before bringing an action on the note would only affect the costs. The case in New Brunswick agrees with the present law in Outario, when the promise to pay is general ; in such a case it is con- ceived that the maker might bo sued without a present- ment at maturity or demand of payment before suit, and the only result would be that the plaintiff might be saddled with costs. When funds are provided at the place indicated to meet the note, which is not presented for payment, the maker must urge the same specially by exception, and adduce evidence thereof (A) Where the maker provides that tho note shall be pay- able at a bank or other place, it will be a sufficient pre- sentment to him to present the note at such bank or other place, (c) The law in the Province of Quebec is the Hame as the law here, that as between the holders and indorsers of a promissory note, the note must be presented for payment, so as to bind them on the day the statute makes it pay- able, and at the place where it is payable ; but, as between the holder and the maker, it is enough to present it at any time within the period fixed by the Statute of Limita- U) Rloe v. Bowker, 8 L. C. R. 806. U) Mount r. Dunn. 4 L. C. R. 348. (•) BMDk U. 0. T. Sbtrwuod, 8 <^. B. U. 0. 116. PRESENTMENT FOR PATMFNT. 101 tions and before action brought ; (a) provided, of course, the instrument is not payable at a stated place. The conaequonce of a bill or note not being duly pre- sented for payment to the acceptor or maker is that all the antecedent parties will bo dischargod from their lia- bility, whether on the instrument or on the consideration for which it was given. The acceptor or maker, however, still continues liable, and indeed presentment is not in general necessary for the purpo.so of chnrgiiig him, the action itself being held to be a sufficient demand, and that though tlie instrument be made payable on demand. (6) When a promissory note is payable at either of two places, presentment at either of them will suffice, (c) Presentment of a note at the maker's place of business is sufficient, although there is no person there at the time. The maker of a note was proved to have occupied an office up to the first of May, after which there was no diiect evidence of occupation, but his desk remained there as before. The Court held, in the absence of any proof of his having changed his office, that presentment of a note there after the 1st of May was sufficient. { B«!achiiig V Guwer, Holt. N. P. C. 813. d) KlnnMr v. Goddard, « Allan. 668. ,^2 LAW OF BILLS AND NOTES. but that the refusal to pay on the 3rd rendered the actu^ presentment of the bill on that day unnecessary, {a) There is no positive authority requiring a note to be presented at the maker's place of business instead of his residence ; and if the maker of the note has absconded and his place of business is closed, a presentment at his last place of residence will be sufficient, (b) As we have already seen, there must, even when the promise is not qualified, be a presentment at the residence or place of business of the maker ; and the circumstance that he is lying dangerously ill, and cannot be seen on business, will not excuse the want of presentment there. Uader such circumstances a presentment to any inmate of his hou3e, who is not his agent in the matter, will not be 8uffi3ient. A subsequent promise to pay by the indorser in ignorance of such a defect in the presentment, but with knowledge of his discharge for want of due notice of dishonor, is a waiver of the want of notice, but not of the presentment, (c) In an action against the indorser of a note the plaintiff must shew that it was presented at a reasonable hour. As to bankers, it is established with reference to a well- known rule of trade, that a presentment out of the hours of business is not sufficient ; but in other cases the rule of law is that a bill must be presented at a reasonable hour, which is generally understood to mean by or before seven or eight o'clock in the evening. Where a note was pay- able at a " store," and the only evidence was that when the holder went to the store it was closed, the Court held, in the absence of any evidence of the nature of the busi- ness carried on at the store, it might be inferred that it was closed in the due course of business, and therefore that the presentment was not made at a reasonable time. (U) (a) Chandler v Beckwith, Berton's N. B. Reports, 2CS. (») Kobinson v. TH\lor, 2 Kerr 198. (e) Kowlin v. Hrtuch, 2 K»Tr 337. {d) Pattenon v. Tapley, 4 Allen 292. PRBSENTMENT FOR PAYMENT. ^108 The presentation of a promissory note at the closed door of a bank, after its usual office hours, is not a suffi- cient presentation for payment, (a) It is not absolutely necessary in all cases to exhibit the note to the maker at the time of the presentment ; and where the maker of the note was insolvent, it was jield that the non-exhibition of the note to him at the time of the protest did not invalidate it, and that notice of such protest would render the indorsers liable, (h) The bankruptcy or insolvency of the drawee is no excuse for a neglect to present for payment, for many means may remain of obtaining payment by the assistance of friends or otherwise. (' ) By Art. 2309 of the Civil Code of Lower Canada, if a bill, payable generally, be accepted before and become due after the appointment, duly notified, of an assignee to the estate of the acceptor in the case of an insolvent trader, presentment for payment may be made either to the insol- vent or to the assignee personally, or at the residence or office or usual place of business of either of them. As to the circumstances which will excuse neglect to present for payment : When a biU is payable at sight pre- sentment for payment and acceptance are identical, at all events, as to time ; and, therefore, presentment for pay- ment will, as well as that for acceptance, be excused hy putting such bills in circulation. ( iiylea on Billd, 9th Ed. S56. 112 LAW OF BILLS AND NOTES. The holder of a dishonored bill, who is offered an acceptance for the nonor of some one of the preceding parties to the bill, should first cause the bill to be pro- tested, and then to be accepted supra protest. At maturity he should again present it to the drawee for payment » and if payment by tho drawee be refused the bill should be protested a second tin^e for non-payment, and then presented for payment to the acceptor for honor, {a) The acceptoi: supra protest becomes liable to all parties on tho bill subsequent to him, for whose honor the accept- ance was made, (b) The acceptor supra protest admiia the genuineness of the signature, and is bound by any estoppel binding on the party for whose .honor he accepts, (c) By acceptance svpra protest the party for whose honor it was made, and all parties antecedent to him, become liable to the acceptor supra protest for all damages he may incur by reason of the acceptance, (d) By Art. 2317 of the Civil Code of Lower Canada, pay- ment may bo 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 person paying do not declare for whose honor he pays, he has his recourse against all the parties to the bill. 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. («) The method of accepting supra protest is said to be as follows : The acceptor supra protest must personally appear («) Hoare v. Cf lenove, 16 EMt. 801 ; WillUmn y. Oermaine. 7 B. ft C. 477. (*) Hoare v Casenove, ubi tvpra ; Art. 2290 Civil Code, Quebec. (e) PhUHps V. Im Thtirn. 18 C. B. M. S. 004. <^ Bylea, Oth Ed. 259. (•) Art. 2207 Civil Code, Quebec. ACC'EITANCE 'SUPRA PROTEST.' 113 before a notary public, with witneuseN^ and declare that he acceptfi Huch protested bill in honor of the drawer or indorsor, as the case may be, and that he will natisfy the same at the a])pointcd time ; and then he must Nubscribe the bill with his own hand, thus : " Accepted supra protest in honor of A B, &c. ;" or, as it is more usual, " Accept** S. P." (a) («) Bylw on Blllf, •lt> Kd. M6. — S_ 114 CHAPTER VII. OF PRINCIPAL AND HUREIT. "Without an elaborate definition of the word "Princi- pal/' it will be understood that the principal debtor is the man who is primarily liable as the person himself owing the money ; and the surety is, in relation to the prin- cipal, one who in some way or other may be obliged to pay the money in default of the principal ; i. e. the surety is the person secondarily liable. This relationship may attuch to a person either by his becoming a party to a bill or note, or by an indepen- dent contract. First, as to the relation of principal and surety arising upon the instrument itself. The acceptor of a bill and the maker of a note are the principals, being the persons primarily liable upon the instrument. All the other parties are sureties to the principals; but as between themselves they are not merely co-sure- ties, but each prior party is a principal to those who follow him. Looking at the matter from the holder's point of view, the acceptor is, at maturity, his principal debtor, and the drawer and indorsers are all the acceptor's sureties ; the indorsers are again sureties for the drawer, and the third indorser is surety for the second indorser, (the^r^^ indorser being the drawer.) PRINCIPAL AND SURETY. 115 When the acceptor of a bill or maker of a rfoto it discharged, all the other parties are discharged, for the surety is always discharged by the discharge of the principal. And where the arrest and discharge of the acceptor of a bill operates, so far as he is concerned, as a dis- charge of the debt, the drawers are thereby prejudiced, and are aho discharged, (a) But if the acceptance is merely for the accommoda- tion of the drawer, the latter will uot be discharged, (h) Where the holder of a note dies, leaving the payee and indorser one of his executors, he thereby dinchurges him from the debt ; and i" discharging him, the testator also discharges all indorsers Rubsequent to the payee, who are merely sureties to the payee. The executors, therefore, could not recover in an action against any indorser subsequent to the payee, (c) A discharge to prior parties is a discharge to subse- quent parties, but a discharge to subsequent parties is not a discharge to prior parties. This is because the subse luent parties may, if com- pelled to pay the bill or note, sue the prior parties ; but the latter cannot, on such payment, sue the subsequent parties. And where the subsequent parties cannot, on pay- ment, sue the prior parties, the rule does not apply. Thus, where the maker and payee of a note made and indorsed it solely for the accommodation of a subse- quent indorser and without any consideration to the maker, and the plaintiff took the note up after it became dufi, and afterwards compromised with the maker by taking part of the sum for which the note was made, and thereupon discharged the maker, thia was held !•) Hamilton t Holcomb. 1 *) B. 0.. 12 G. P. U. 88. («) Hamilton t Holcomb. 11 0. P. tJ. C. OS. I. P. U. C 88. llMkOBiio, « Q. B. U. 0. 644. 116 LA.W OF BILLS AND NOTES. no discharge to the persons for whose accommodation the note was made, for they could have no recourse against the maker, (a) Where the holder sues in one action the various parties liable on the note or bill under the Statute of Ontario, chap. 42, and obtains judgment against them, he may discharge the drawers or indorsers after an arrest under a capias ad satisfaciendum^ without losing his remedies against the other defendants liable in priority to those discharged. (6) It will thus be seen that obtaining a judgment under the statute against the several parties liable on a bill or note does not alter their relative rights as between themselves. On a similar principle it is no defence for the maker of an accommodation note to shew that no notice of dishonor was given to the payee and indorser, for the maker could never sue at law upon the note : his only remedy would be for money paid to the indorser's use. (c) ''-'^■ So a party who pays value for a bill, originally an accommodation bill, and has no notice of the fact when he pays value, may, on his subsequently becoming aware of the fact that the bill was originally given for accommodation only, release the drawer without releasing the acceptor, (d) But, if the acceptor be insolvent, the holder may prove under the assignment, the discharge in this case beini^ by act of law, and not of the holder himself; and he may for the same reason sue the drawer and indorsers. The fact of the bill being an accommodation bill, even if the holder knew it, would make no difference, (e) In the case of a note, the relations are the same, the («) SitUm r. Andanon. S Q. B. U. C. S06. (*) Holuomb V. Henderson, 2 E. A A. Repi. 2S0. (e) Grant v. WiniUnley, 21 C. P. U. C. 267. (d) City Olugow Bank v. Murdouk. 11 C. P. U. C. 138. (•) Brown* r. Cut, S Ruas. COO ; Langrdftl* v. Parry, S D. & R. 817. PRINCIPAL AND SURETY. 117 indorsers being sureties for the maker. It makes no difference if the note be given gratuitously, (a) But this is, of course, subject to the rule that no man can sue on a bill or note the person from whom he gratui- tously received it. The holder may be as negligent as he pleases in suing, prosecuting his suit, obtaining judgment, and issuing execution against the person primarily liable, and he may still, until the suit is barred by the Statute of Limitations, sue the persons liable as sureties. But, if the holder once, by a binding contract, part with or suspend, for however short a time, the right of suing to judgment, or of obtaining the fruits of a judg- ment against the person primarily liable, those liable as sureties are discharged, unless the loss or suspension of the rights against the principal took place with their sanction ; for the surety always has a right to pay off the debt and recover. Thus, an agreement by the holder of a note to give time to the maker, without the consent of the iudorser, will discharge the latter. (6) And an undertaking to the maker to "holdover and return the notes" on a certain contingency will amount to such an agreement, and will discharge the indorsers if they are not parties to it. (c) , But to effect the discharge of the sureties the agree- ment to give time must, whether written or verbal, be such as binds the creditor ; and where there is no agree- ment by which the holder binds himself to give time to the principal debtor, but a mere forbearance or indul- gence without consideration, the surety will not be discharged, {d) CaraUin v. RoIlMton, 6 Tkunt. 661. Arthur t. Liar, 8 O. P. U. 0. 110. ficdoll T. EKton. 1 Kerrtir. id) ThompMU T. MttDonUd, 17 Q. B. U. C. M4. » 118 L4W OF BILLS AND NOTES. The giving of time must be by aome party interested in the note, and in an action against the indorser a plea of time given to the maker of the note is bad, unless it expressly shews that when the time was given the plaintift'was the holder of the note, (a) If on giving time to the principal the right against the surety is expressly reserved, he will not be dis- charged. Thus, in an action by the indorsee against the acceptor of a bill the defendant pleaded on equitable grounds that he was an accommodation acceptor for the drawer, which the plaititifid knew, and that upon the receipt of collateral security the plaintiff's gave time to tne drawer without the defendant's consent. It was held a good answer, that when the time complained of was given it was exprtssly understood and agreed that the plaintiffs should reserve all the rights against the acceptor. (6) Where the maker of a note gives a mortgage to the holder, which provides expressly that it shall " operate and take effect as a collateral security only;" this does not amount to u giving of time to the maker, so as to discharge the indorser, his surety, though the mortgage is due and payable after the maturity of the note ; and in such case the holder of the note may sue the indorser thereon before the mortgage falls due, and there will be no merger of the note in the mortgage security, (c) As we shall hereafter see, the law is the same if a new bill is taken from the person primarily liable by way of collateral security only. Where the maker of a note, in consideration of time given, agrees, without the consent of the indorser, to pay a sum larger than he would be liable for on the note itself, or than he would by law be liable to pay if (a) Contmarolal Bank v. Johnrton. t O. S. ISS. (•) Bank U. 0. ▼. Jardlne, C. P. 17. C. 832. («) Sbawr T. Orawford, 1« q. B. U. C. 101.. PRINCIPAL AND SURETY. 119* the holder had merely let it lie over for the time given, the indorser will be discharged. Thus, in an action against the maker and indorser, the latter pleaded that it was agreed between the plaintiff and the makers by their President, without the knowledge and consent of the indorser, that t^ plaintiff should give the makers time for the payment of the said note for a good con- sideration, to wit : interest thereon at the rate of 14 per cent, per annum, and that the makers, by their President, agreed to pay such interest for the extension. The plea was held a good defence to the action, (a) So it seems that any act between the creditor and the principal, which is substantially to the prejudice of the surety, and is done without his consent, will dis- charge the surety, as in certain cases the release of a security held by the creditor, (b) If the holder, when he takes the bill, knows that any of the parties thereto are sureties for the others, he must in all dealings with the principal consider the rights of the sureties, and anything done to the prejudice of the surety will discharge him. But it is essential that the holder should know at the time he takes the bill that the party is a surety. If he does not acquire such know- , ledge until afterwards, he may then give time to the . principal without discharging the surety, (c) If the holder of the bill is aware at the time he gives time to the principal that the bill is only an accom- modation bill, all the equities of the surety attach ; and by giving time to the principal the accommodation acceptor is released, {d) A bargain may, however, be made not to sue for a certain time, with a proviso that if thc| money be not paid, ihe creditor may have a judgment as soon as he (•) Farrell v. Oihawa Mfg. Co., 9 C. P. U. C. 8S». (6) Onnt ▼. Wiiutanley, 21 C. P. U. C. 267. <«) Bulk U. C. T. Thomaa. 11 C. P. U. C. 615. (d) liank U. G. v. Ockeman, lb C. P. U. C. 808. 120 LAW OF BILLS AND NOTES. might in the regular course. This will leave untouched the liability of the sureties, (a) The same rules apply equally to suretyships con- tracted by agreement, independent of the bill. These agreements, usually called guarantees, can only be made in writing, and cannot be made binding, unless they are either made by deed, or there is some consideration. But it is not necessary that the consideration should appear on the face of the instrument, (b) The taking a new bill or note from the person pri- marily liable, payable at a future day, discharges the sureties, for it interferes with the right of the surety at any time to pay off the debt, and recover against his principal, (c) This is the same whether they are sureties on the bill, or by independent contract. If, however, the second bill be taken only by way of collateral security, i e. if the right to sue on the first be not thereby suspended, the sureties, whether on the bill itself, or by independent contract, are not dis- charged, (d) Taking a new bill from, or suspending the remedy against a subsequent party, never discharges a prior party. The holder of a bill may sue all the parties at tie same time, or one after the other, and a judgment against any will not be a satisfaction as to the rest, (e) It is presumed, also, that the drawer and indorsers of an unaccepted draft will be discharged if the holder gives the drawee a longer time to accept than according to the tenor of the draft. (a) Kennard v. Knott. 4 H. & Qr. 474 ; Michael v. Myen, 6 M. & Or. 702. (») 26 Vic. 0. 46, of OnUrio ; 28 Vic. c. 31 ■. 1, of New Brunswick, (e) Gould r. Robson, 8 Baat. 576. (d) Calvert v. Gordon, 7 B. A C. 800 ; Prinr t. Clarkaon, 1 B. 4 G. 14. («) Claxton V. Swift, 2 Show. 441. PRINCIPAL AND SURETY. 121 A covenant not to sue entered into by a creuitor with the principal debtor, without the surety's consent, docs not dischargee such surety, (a) Where a debtor assigns for the benefit of creditors generally, and there is a clause contdined in the deed reserving all rights and remedies aga nst third parties, but at the same time releasing the assignor from his liability : this operates as a covenant not to sue, and not as a release. (6) If the holder of a bill of exchange signs a deed of composition of the debt of the acceptor or principal debtor thereon, without a special reservation of his rights as to the drawers and indorsers, he discharges them, (c) In an action by an indorser, who has paid his in- dorsee, against the maker of a note, it is not a good defence to allege that the indorsee, whilst holder of the note, granted delay to the maker by taking his note and renewing it from time to time; nor can such indorser be compelled, under the circumstances, to return or account for such renewed notes, or any of them. ( DaTidion t. Bartlatt, 1 Q. B. U. C, 60. » Hall V. Oilaon, 7 0. P. U. , 681, •) Blake v. Harvey, 1 C. P. U. C. 417. li \i Nafb ▼. Soulen, 2 C. P. U. C. 41t. ) Morrison v. Kjrl«, 8 Bar. Oritiqu* 487 ; St«T«iM' Die. N. B., B«pi. t6. 124 LAW OF BILLS AND NOTES. But in equity, if one joint maker is in fact a surety for the others ; and after the note matures, the payee, in consideration of a certain sum paid to him, gives time to the other makers, without the consent of the surety, the latter will he discharged as to any person taking the note, after it becomes due, with knowledge of the facts, (a) When a person makes a note, which is placed by the payee in the hands of another, to secure him against accruing liability, as surety to the payee, the maker cannot resist payment at maturity, in an action at the suit of the surety, on the ground, that as yet the latter has been compelled to pay nothing for the payee ; or on the ground that the payee promised to give the maker further time for payment. (6) When a surety has paid an overdue bill, he has his remedy against his principal ; nay, if he pay by instal- ments, he may bring a separate action for each instal- ment. If one become insolvent and can pay nothing, each of the others is, at law, only liable to contribute to the extent of his original proportion ; but in equity each is liable for as large a proportion as if the bankrupt or insolvent had never been reckoned among the num- ber, (c) Where there are several sureties for the whole amount, each is liable to the creditor for the whole, but, among one -another, each is only liable for his share; therefore, if one pay more than the others, he may sue the others for contribution. Co-sureties for the same debt ape liable to mutual contribution, although they contract independently, and indeed, without knowledge of each other. Accommo- (•) Pmrley r. Loney, IT Q. B. U. C, I7». h) Bom v. Tyiion, 19 C. P.U. C. 294. («) Brown* t. Lm, 9 B. * C. 489 ; dwainc t. Wan, 1 Cha. Rap. 149. PRINCIPAL AND SURETY. 12* dation indorsers of a negotiable security, are to be co>n- ■idered as co-finreties, irrespective of tbe order uf their liability on the instrument itself. Each surety will be presumed to undertake an equal liability with his fellows, ill the absence of any limitation of his liability, but there is nothing to prevent him qualifying this by contract, (a) Where a firm of two or more persons, indorse in the partnership name, the liability as sureties, is a joint liability, and not the several liability of each partner; and therefore, the firin will be considered as one individual, in determining their liability to their co- sureties, (b) By the ptatnte of Canada, 26 Vic. c. 45, which applies tD the Province of Ontario only, every surety who pays the debt of his principal, is entitled to have assigned to him, or a trustee for him, every judgment specialty, or other security which is held by the prin- cipal, ill respect of the debt or duty, whether the judg- ment, or specialty, shall or shall not be deemed at law, to have been satisfied by the payment of the debt, (c) The surety is entitled to stand in the place of the creditor, and to use all the remedies, and if need be, and on proper indemnity, to use the name of the creditor in any action or proceeding at law, or in equity, in order to obtain from the principal debtor, or any co-surety indemnification for the advances made, and loss sus- tained by the surety. The law is precisely the same in Nova Scotia, (d) The accoptor for honor is a surety for the person for whose honor he accepts, whether drawer or indorser, and for all parties antecedent to him. (a) Mitchell V. English 17 Grant, 303 ; Clipperton v. Spcttlgue. 16 Grant. MO. . (*) Clipperton v. Sp«ttiKue, vii nupra it) Sm hNo Grant v Winstanley, SI C. P. U. C. UT. (d) Sec 28 Vic, c. 10, s. 4, uf that Pruvince.. 126 LAW or BILLS AND MOTES. It 18 not till the bill hat been presented for payment to the drawee, when due, that the acceptor for honor becomes primarily liable to all parties subsequent to him for whose honor he accepts. When the bill Accepted for honor has been presented for payment to the drawee and dishonored, the holder may sue the acceptor for honor. But the latter is, as between himself and the person for whooe honor he accepted, and parties antecedent to that person, a mere surety ; and therefore, when he has paid the bill, he can compel any of such parties to reimburse him. jMjr And the holder must not discharge the person for whose honor the bill was accepted, or any person prior to him, for then the acceptor for honor, being but a surety, will be discharged. It is the general ur,lerstanding among mercantile men, that each prior indorser on a note, is a surety for each subsequent one ; and this understanding is correct. The successive iudorsors of a promissory note, merely on proof that it was made for the accommodation of the maker, are not necessarily to be regarded as co-sure- ties, and so liable to contribution ; but in the absence of any agreement to the contrary, the parties on such proof may be considered as having entered into a con- tract of suretyship, in the terms which the note and indorsements are known to create, and the first indorser having paid the note, cannot recover contribution from the second, (a) But the liability of the indorsers, as between them- selves, according to the order in which they stand on the instrument, may be modified by express agreement, and it is not absolutely necessary that such agreement should be in writing, (6) and when the second indorser (a) Unnn v. Putoo, S3 C. P. U. C. iSO, in appeal, raraninc t£« oaaa balow, SS 0. JP U. C , 606. (*) But Ne »d«r y. KaUy. S Q. B. U. C. t40. . PRINCIPAL AND SURETY. 127 indorses as surety lor the payee and first indorser, who is not to become liable ; the second indorser will be liable to the first, notwithstanding their respective positions on the note, (a) If the indorsement was intended by all parties as a security to the payee, and it was not intended that the payee should be liable to such subsequent indorser, efiect will be given to the agreement of the parties, (b) When a note payable to A B, or order, is indorsed by C D, at the makers' request, as surety to A B, and for his benefit, A B may recover on the indorsement against C D ; though when the latter indorsed, A B had not indorsed, and though in fact A B docs not in- dorse until after action brought, (c) "" ' Where the payee and indorser of a note, is sued by his immediate indorsee, it will be a good defence for the former, to show that the note was intended to have been made to the indorsee, or order, and indorsed by him to the indorser, to secure a debt due to the latter by the maker; but that by mistake itwas made payable to the indorser or order, and that he thereupon indorsed it to the indorsee, in order to enable him to sue the maker, and on the understanding that the indorsees would have no recourse against him, as indorser. (d) The payee of a note, whose name is indorsed in blank thereon, may recover from a subsequent indorser, if such subsequent indorser indorsed as surety to the maker for the payee. Where the real transaction is that the payee discounts the note for the benefit of the maker, he may sue any persons who indorse as sureties to the maker, though their names are subsequent to that of the payee, (e) [«) Moffat V. ReM, 16 Q. B. U. C. 6?7. *) Woidaworth v. MacDounll, 8 C. P. U. C.'408. c) Peck V. Phippon. 9 Q. B. U. C. 78. d) BI»b«rtaon v. Hueback, 16 0. P. U. 0. 298. *) Day V. 8Gultborp«, 11 L. 0. R. 209. ; > • (•) Jutivt T. Aaliorolt, 9 O. 8. 164. _a- 130 CHAPTER VIII. OF NOTICE OF DISHONOR. . K'. When acceptance of a bill is refused on presentment for that purpose, or when payment of a bill or note, on its being presented when due, is refused by the acceptor or maker, the holder cannot sue the drawer and indorser of the bill, or the indorser of the note, unless each of them receives, within a certain time, notice of dishonor. - r The object of the notice is both to apprise these parties of the fact of dishonor, and to let them know that they will be called upon to pay. It is advisable to give the notice in writing, though it is sufficient if only verbal. There is no precise form of words required in giving notice of dishonor; all that is necessary is to apprise the party liable, of the dishonor of the bill in question, and to intimate that he is expected to pay it. (a) But, as we shall hereafter see, it should show the holder of the bill or note, and that the latter looks to the party to whom the notice is given, for payment. (6) And in the Provinces of Ontario and Quebec, it is necessary that the notice should show that the bill or note has been protested, for non-acceptance or non-pay- ment, (c) ;«) See East r. Smith, 4 Dowl. & L. 744. ' See the Con. Stata. Ontarl See Con. Sut. L. C. C*04. '*) See the Con. Sttita^ Ontario, Chap. 42, S. 21. NOTICE OF DISHONOR. 131 If the notice is such that the defendaot cannot be mistaken as to the bill referred to, it will be sufficient, though not in all particulars strictly accurate. Thus notice of dishouor to the indorser of a promissory note, is not avoided by a mistake in the description of the note ; e. ff., stating it as a note of £1,000, payable 1st January, 1841, whereas, it was dated 1st January, 1840 ; the note being in other respects correctly described, and there being no other note to which the notice could have applied, (a) So where a notice of non-payment of a note received by defendant, the first of four indorsers, stated the date and parties correctly; but described it for £28, instead of £25, it was held to be a question for the j,ury, whether the de- fendant was misled by the notice, and if he was not misled, that the notice was sufficient. (6) Though there is an error in the date of the notice of dishonor, yet if the inJorser is not thereby misled, the notice will be sufficient. Thus where a note was properly presented and protested, but the notice of dishonor, being dated the 20th November, stated the note to have been that day presented and protested for non-payment, whereas, in fact, the note was presented and protested on the 19th, the court held that the proper question for the jury, was whether the indorser had been misled by the mistake in the notice, (c) Where notice of < Jionor of a note sent to an indorser stated the amount a urately, but stated incorrectly the day when it became due, and no evidence was given of any other similar note falling due on the day stated, the notice was held sufficient, the defendant not having been misled, (d) (a) Robinson v. Tavlor, 2 Kerr, 19S. I ;») Thompson v. Cotterell. 11 Q. B. U. C. 186. «) L»w V. Owen, 12 C. P. U. C. 101. \d) Thorn t. Swdlord, « C. P. U. C. MS. 182 LAF OF BILLS AND NOTES. If there be more than one bill to which the notice mcy apply, it lies on the defendant to prove that fact. («) - In ca^e of mis-description of an instrument, as by calling a note a bill, or vice versa, or transposing the names of the drawer or acceptor, etc., it is no objection unless mistake or inconvenience has arisen, which lies on the defendant to prove. All that is required is that there should be no reason- able doubt of the identity of the note referred to in the notice. Thus, in the Province of Quebec it was held, in an action against an indorser of a promissory note pay- able to the order of the maker, and indvrrsed by him to such indorser, that the following notice of dishonor,' addressed to maker and indorser conjointly, was sufficient in the absence of any proof by defendant of the existence of another note : " Your (W. V. Courtney's) promissory note for £30 currency, dated at Montreal the 2nd Septem- ber, 1856, payable three months after date to you or order, and endorsed by you, was this day at the request of A B, of this city, merchants, protested by me for non- payment." (b) It will be observed that though in this case there is an inaccuracy in the description of the note, yet the notice in its essentials follows the form given in the Con. Stats, of the Province of Quebec, c. 64, at page 531. The form there given of notice of protest for non-payment of a note is as follows: — Montreal, 12th January, 1874. To A B, At Sir, — Mr. C D's promissory note for $1,000, dated at Montreal, in the Province of Quebec, the ninth day of September, in the year of our Lord, 1873, payable four months after date to E F or order, and endorsed by you, («) Shelton r. Braithwaite, 7 M. & W. 436. lb) Uaiidyside v. Courtney, 1 L. C. J. 250. . .^''JtMOTICB OF DISHONOR. ^ 13S was this day at the request of G. H. protested by me for non-payment. If rv<', ' *>•; r :/:;- :''Hf 'K' «^^:"V;-« .;^.' I',..;';-.' J. K., ■r ;.-v:-^: Not. Pub. r Section 22 of the Statute in force in Quebec provides that the several notings, protests, notices thereof, and services of notices, shall be in the forms of the several schedules of forms to the Act subjoined. It is appre- hended that the only safe course is to follow the forms given in the several statutes in all their essentials, and that the cases already referred to do not go further than relieve against mere inaccuracies of description. The form of notice of dishonor piescribed by the Con. Stats, of Ontario, chap. 42, s. 21, is as follows : — Toronto, January 12th, 1874. To Mr. A B, Sir, — Take notice that a bill of exchange, dated on the 9th day of September, 1873, for the sum of $1,000, drawn by C D on and accepted by E F, payable four months after the date thereof at the Bank of Toronto, in Toronto, and indorsed by you and C D, was this day presented by me for payment at the said Bank, and that payment thereof was refused, and that G H, the holder of the said bill, looks to you for payment thereof; also take notice that the same bill was this day protested by me for non- payment. Your obedient servant, /. A. H., , Notary Public. In England it is held that the notice need not state on whose behalf it is given, nor who is the holder of the bill or note ; but under the statute referred to in Ontario, it is conceived that the notice must show the holder of the instrument and on whose behalf payment is applied for. 184 LAW OF BILLS AND NOTES. Where a note was payable to defendant or order at tlim. Bank y. EccIm, 4 Q. B. U. C 3Se [e) Wilion V. Pringle. 14 Q. B. U. C. 280. rf) Bank B. N. A. v. Rom. 1 Q. B. U. C. IMl [•) Burnett r. Monaghan, 1 BevuM Critique 47S. 140 LAW OF BILLS AND NOTES. A\nioQ a bill is in the hands of an agent an an attorney or banker, he is considered oh a .separate party as regards time for giving notice, and consequently he has a day to give notice to his principal, and the latter another day to give notice to the antecedent parties, (a) Where the holder is suing the; d^^wer of a bill upon which there has been several intermediate indorsers, it is not necessary for the holder to show notice given from each indorser within the regular period. (6) On the dishonor of a foreign bill which passes through several hands before it reaches the plaintifi', it is not incumbent on the latter to shew that he received notice in tiuie. If he send it by the first f)racticable conveyance after ho would himself be entitled to notice, this is sufii" cient. A bill drawn in Saint John, New Brunswick, was dishonored in London, England, on the 16th of October (a Saturday). The plaintiffs resided at Wolverhampton, in England, but were not then the holders. The then holder resided in London, but as the IGth was a Saturday he was not bound to send notice to the plaintiffs till the 18th. The plaintiffs, therefore, would not receive it till the 19th ; but even if they had received it earlier, the Court held that they were not bound to transmit notice to the drawer until they were themselves entitled to it ; and, it appearing that they had sent notice by the first mail after the day when they should have received notice from the holder in London, that this was sufficient, (f) Where a bill drawn on persons residing in Dublin, Ire- land, was protested for non-payment on the 3rd November, 1841, notice thereof to tlip indorsers, who resided at Saint John, in the Province of New Brunswick, where the bill was drawn, on the 22nd December following, was held not to be in due time, it appearing that mails left Great (a) Rubson v. Bennett, 2 Taunt. 388 ; Bray v. Hadwen, 6 M. & Sel. 68 ; Firth v. ThruHh, 8 B. & C. 387. (ft) Boyea v. Joseph, 7 Q B. U. C. 606. (c) Tarratt r. Wilmot, 1 Allen 861. NOTICE OF DISHONOR. Ul Britain for tKa Province or the 4th and on the 19th of November, and that a notice sent by the mail of the 19th would have reached Saint John about the 4th December. A promissory note made in Ontario, payable in Mon- treal, is an inland note, being in effect payable generally under our statute (Con. Stats. U. C c. 42), and may be properly protested on the day after the third day of grace, and the presentment at the place of payment may be proved oy a notarial act. (6) It was held that a promissory note made between par- ties in Nova Scotia, payable in the Province of New Brunswick, was a foreign bill, and that a })rotest thereof was necessary. It is not now necessary that a copy of the protest should be sent, but the notice of dishonor must state that the bill has been protested. {(-) In the Province of Quebec there is no distinction between foreign and inland bills of exohange. ( of billfi of exchange and promiflsory notes nhall be received in all courts as prima facie evidence of the allegations and facts therein contained. ' < ( • . i .t . * Bectiori 7 of this Statute provides that any note, memo- randuDi or certificate, at any time made by one or more notaries public, either in Ontario or Quebec, in his own handwriting, or signed by him at the foot of or embodied in any ])rotest, or in a regular register of official acts kept by him, shall be presumptive evidence in Ontario of the fact of any notice of non-acceptance or non-payment of any note or bill having Ix'en sent or delivered at the time, and in the manner stated in such note, certificate or memorandum. Section 8 ])rovidc8 i'lat the production of any protest on any note or bill, under the hand and seal of any one or more notaries public, either in Ontario or Quebec, in any court in Ontario shall be presumptive evidence of the making of such protest. Sections 7 and 8 of this Statute have the etlect of making the certificate of a notary evidence of the sending or delivery of a notice of non- payment, &c., and they also make tlie production of a pro- test prima facie evidence of presentment for payment or acceptance, (a) The form of protest given in the Statute of Ontario, Con. Stats, c. 42 s. 21, sets out the serving of notice, according to law, upon the several parties thereto, by depositing in the post-ofiice at , being the nearest post-ofiice to the place of the said presentment, letters containing such notices, one of which letters was addressed to each of the said parties severally, adding the super- scription and address of the letters. The sixth section of the Statute of Canada, before referred to, only applies to Ontario ; but under this section, in the Province of Ontario the protest is prima facie evidence of the giving of notice («) Codd T. Lewta, 8 (J. B. U. 0. S4t. . .1 I. „> 144 LIW OF BIl.LS AND NOTES. of dishonor, for the form of protest used contains an allegation to that affect. Indeed, it has been held that the certificate of a notary on the adjoining half sheet of the protest that he had served on the indorser a notice of non-payment of the note protested, was sufficient evidence of notice to the indorser of non-payment of the note, (a) The notarial certificate is only to be received in evidence of such facts as the notary may properly do, and if the notary has no authority to give notice of dishonor, his certificate to the effect that he had given notice would not be sufficient, (h) ' ■ It is impossible, however, to hold, since the passing of the statute referred to, by which the production of a pro- test is made prima facie evidence of the allegations and facts therein contained, that the notary is not a proper person to give notice, (c) And we may, therefore, safely conclude that in Ontario the protest in the ordinary form is prima facie evidence of the sending of notice of dishonor to the parties entitled thereto. Where a notarial certificate of protest of a note due 25th of June was dated on the 26th of June, and certified that the notary had sent notice to the indorser, not saying when it was sent, the Court held that the notice of non- payment was sufficiently proved, for by the certificate the notice must have been given either on the 26th or on the 25th. If on the 26th, it would be in proper time ; and if on the 25th, it would also be sufficient, for notice given on the day the bill is payable will be good if the bill is not afterwards paid, (d) A notarial certificate that a note has been duly pro- tested is sufficient, without alleging that the note has been (n) Russell V. Croiton, 1 C. P. U. C. 428. (») Ewintr V. Cameron, 6 O. S. 541. (e) See Bank B. N A. v. Ross, 1 Q. B. U. C. 204. ,^« * (<0 WuoU V. Hutt; 9 Q. B. U. C. 344. ^'*'^ ^ ''' NOTICE OF DISHONOR. 145 presented, for it could not be duly protested without being presented. («) "'' -• ' "• • • •' .,.' / ^ ., - - In the ease of Ross v. McKindlay, (6) the Couit expressed an opinion that a notarial protest from Quebec, certified by the notary as a true copy from his notarial book, was Bufiicient without any notarial seal. And a protest without seal is admissible evidence of the facts therein contained, under the sixth section of the Statutes of Canada, chap. 57, already cited, {a) Where a note is dated and made payable at any place in the United States, the production of a protest of a notary of that place is no evidence in this country of the facts therein stated. A protest, to be evidence in our courts, must be made in conformity with the seventh section of tlie Con, Stats. Can. c. 57 ; in other words, this statute only applies to protests made by notaries in Ontario and Quebec, {(i) To prove the sending of notice without reference to the statute, it is necessary to call as a witness the person who posted it, and also the writer, or some one else who can speak to its contents. • It will be sufficient proof of posting, however, if the writer of the notice deposes to putting it in a box or on a table for posting, and a servant afterwards deposes that he always posts a,ll the letters so placed, {e) An action by the payee against the drawer of a dis- honored bill of excha" T^e was discontinued on terms of the acceptor paying i >e costs, and placing the amount of the bill to the payee's credit with a person to whom he was indebted ; and on the representation of the acceptor that this had been done the bill was given up to him. The Court held in trover against the acceptor for the bill, that the jury might presume from these facts that the - («) BUin ▼. Oliphant, • Q. B. U. C. 47S. (») 1 , m-i -. In an action against the indorser of a promissory note f,the duplicate notice of protest must be produced and fyled, and the certificate of the notary that he has served due notice upon the indorser is insufficient, (e) ,jjf.j i In case there is no notary in the place or he is unable fi or refuses to act, any Justice of the Peace in Quebec (•) McDonald v. Everitt, 8 Kerr 669. h) Leith V O'Neill. 19 Q. B. U C. 288. ^ (e) Pengnetv. McKenzie, 6 0. P. U.C. 808. •«» »t r <»'jv ^ (<0 Con. Stat. L. C. c. 64, 8. 14. )•*•}*:" A (•) Seed V. Courtenay, 8 L. 0. R. 101. fC p t > • ^| - : - ^^' NOTICE OF DISHONOR. 147 may make sach noting and protest, and give notice thereof in the same manner, and his acts in that behalf have the same effect as if done by a notary, but snch Justice must set forth in the protest the reason why the same was not made by the ministry ot a notary, (a) • The annexing of a copy of the promissory note to the protest, or affixing it to the notarial act, is suffi- cient. The certificate of the notary, signed by him, of notice sent, indorsed on the protest, instead of being written ** on the foot of or embodied in the protest," sufficiently complies with our Act. (6) In an action against the drawer of a foreign bill, the protest is evidence of an acceptance payable at a parti- cular place, and of due presentment at that place, (c) In an action on a promissory note drawn and payable in the Province of Quebec, the law of that Province must govern in regard to the sufficiency ol" the notice of non-payment by the maker to charge the iiidorser. (d) When the note is made and indorsed in Ontario, but made payable in Quebec, the law of the latter Province is to govern the time within which notice of non- payment is to be sent, (e) , ,. , , The Statute of Canada, 37 Victoria chap. 47 sec. 1, provides that notice of the protest or dishonor of any bill of exchange or promissory note, payable in Canada, shall be sufficiently given if addressed in due time to any party to such bill or note entitled to such notice, at the place at which such bill or note is dated, unless any such party has, under his signature on such bill or note, desi^^nated another place, when such notice shall be sufficiently given if addressed to him in due time at such other place ; and such notice so addressed shall be o) Art. ^2804 of the Civil Code. ^ ,^m»*^ -*r-if ^>v-f « tj;ji»;«»- - Lvman V. Boulton, 8 Q,. B. IT. C. 823. Tsrratt v. Wllmott, 1 Allen, 863. a) City Bauk y. Uy, 1 Q B. U. C. 192. , , . . «} ttatfafewMD V. Ouawn, 1 Q. B. U. 0. 2S9. '^ <^ '^* vw !'?*avi 148 . LAW OF BILLS AND NOTES. sufficient, although the place of residence of such party be other than either of such betbre-mentioned places. By virtue of this statute a person may, when becoming a party to a bill or note, prescribe under his signature the place to which notice of dishonor to him must be sent ; and if the party specifies no place the notice of dishonor may be sent to the party at the place where the note is dated, whether the party resides there or not. The law in the Province of Ontario, prior to the passing of the statute, wus that the notice of dishonor might be sent in writing to the residence or place of business of the party for whcra it was intended, or it might be served in writing or delivered by word of mouth to the party personally. It is apprehended that the statute is merely for the convenience of the holder in cases where he is unable to ascertain the residence or place of business of the party entitled to notice, and that it does not abolish the former, but merely pre- scribes adaitional methods of giving notice. It would seem, as the law now stands, when the holder knows the residence or place of business of the party he may send a written notice by post, according to th** Con. Stat, of Ontario, chap. 42, or he may serve a written notice on the party personally, or give him verbal notice of the dishonor ; or he may, where it is more convenient, send a notice in writing to the party entitled at the place where the note is dated, unless some other place is specified on the note itself, under the signature of the party entitled, when notice must be sent to such place. Whether it is not in the latter case imperative on the holder to send notice to the place designated, admits of very great doubt on the terms of the statute. it is conceived that the safer com*8e, when a place is designated on the note pursuant to the statute, is to send notice to the place designated. Under the law prior to this statute, if the notice reached the party it NOTICE OF DISHONOR. . 149 did not matter whether it were rightly addressed. If rightly addressed, the Court would treat it as having reached the party entitled, though the evidence proved the contrary, for the party was not permitted to suffer by the failure of the post. Where the bolder desires to avail himself of the pro- visions of the Act referred to, he must prove that the notice was addressed in due time to the proper place. Tiiis is all he is called upon to prove, but in the absence of such proof it is conceived he would have to support his notice on general principles, independent of the statute. If all the formalities of the law are complied with in posting or serving notice, this is sufficient, though the notice never reach the party ; and where the letter is not properly addressed or despatched, it is conceived that proof that it actually came into the hands of the party entitled in proper time would make the notice good. When the letters containing notice of dishonor are not properly addressed, it must be shewn that they were posted in proper time, and that they came into the bands of the proper party in proper time-. Thus, where the letter was addressed, "Administrator of William Stiuson's estate, Belleville," instead of to the administrator by name, it was held that such proof as above mentioned was necessary, (a) '. Where the notice is not properly addressed there must be clear evidence that it came into the hands of the proper party ; but if such evidence is furnished the notice will be sufficient, though there is a mistake in the description of the party. A notice of protest left by a notary with the payee and first indorser of a note personally, is sufficient, although the notice is addressed (fl) UeKraiie v. Noitbrop, Si 0. P. U. 0. 3U. 1|50 LAW OF BILLS AND NOTES. to " C. C. Payette, Sir," and such indorser is a married woman, described as ** Catherine Godin dite Chatliton," sopnr.itod as to property from Eugene Payette, her husband, (a) ; , ■ - ••; ■( . v'.v > A notice of protest, addressed to a female indorser as " Sir," is bad where there is no evidence that she received the notice. (6) But such a notice is sufficient if proved to have been duly served upon her. (c) , .; The notice must be so addressed as to reach the party entitled in due course of post. A notice of non-pay- ment, addressed to no one by name, nor to any street, or house, or place of business, but merely " to the executrix or executor of the late Mr. Jones, Toronto," is bad, for the Court could not assume that the post- master would take the trouble to enquire who were the executors or executrix of Mr. Jones, or that the matter was so public and notorious that the letter was sure to reach the proper party without delay, {d) It has been held that notice sent to the indorser at the place where the note was dated, is sufficient diligence, such place being sufficient indication of the indorser's dcmicile to "uj ruiil the liok'eis in scding notice there, the indorsement being unrestricted. In the case of a protest of a note dated at Montreal, and payable at a bank in Albany, in the State of New York, a notice of protest mailed at Albany addressed to an indorser at Montreal, (protest being made, and notice mailed according to the laws of the State,) is not sufficient where the postal arrangements between the two countries at the time are such, that letters could not pass through the post without the pre-pay ment of postage from Albany to the line, (e) (a) Mitchell r. Browne, 15 L. C. R. 485 >) Seyaibur v. Wrivht, 3 L. C. R. 464, c) Mitchell v. Browne. 9 L. C. J. 168. i d) Bank B. N. A. v Jones, 8 Q. B. U. C. 86 ; Mejfdeo Ballooh t. Bin: '•) Howard t. Sabourin 6, L. C. R. 4t, afDrmiug 6. C, 8 L. 0. R. 519, nej|al8o Ballooh t. Binoey, t Kerr, 440. NOTICE OF DISHONOR. 151 Where a party proposes to give a note indorsed by another, and states the place of his residence, and the note is afterwards indorsed and delivered to the maker, the indorser thereby constitutes tlie maker his agent for the purpose of informing the creditor of the place of his residence, and a notice to the indorser of non-pay. uient, mailed by tlie creditor to the place named by the maker, will be sufficient, although the place stated is not the proper place for sending notice, (a) So, where the agent of the indorser is asked by the holder's agent where the indorser resides, and the agent gives an erroneous direction, which the holder's agent writes in pencil under the indorser's name, notice of non-payment sent to the indorser at such supposed place ot residence, will be sufficient, (h) Under the old law, it was held that it must be shown that the defendant lived at the place to which the letter was addressed. In a case where this was not shown, the Court held that a notice of dishonor put in the post office at St. John, and directed as follows: — *' Mr. Daniel Duff', near Blake's Mills, Nashwaalk," was not sufficient, without proof that a letter thus directed would probably reach the defendant in due course, through the medium of the post office, (c) A notice of non-payment of a note sent to an indorser through the Toronto post office, (the place where the note was dated,) addressed to him in " York Township " in which he resided, was held sufficient, there being no evidence as to whether there were one or more post offices in that Township, nor any proof that a letter for any <»ther purpose would have been usually addressed in any other manner, or ought in the common course of things to have been directed to any certain pq^t (•) McMurrich v. Powen, 10 Q. B. U. C. 481. (b) VauKhan v. Rom, 8 Q B. U C. 606. (•> RobUison ▼. Duff, 2 Kerr, 206. V: . ;*.' • 1 ;»<: iiv ■::} "J£{Jf"lJSv''*^i ,vW-n'. . ' sitVt'^- sm'^\% 152 LAW OF BILLS AND MOTBS. office in the Township, or in any other Township near him. The City of Toronto, being in the Township of York, (a) It is immaterial that a notice of dishonor is dated on Sunday, if given on the following Monday, in due course, the note falling due on the preceding Saturday and the days of grace expiring on Sunday, (h) Notice may be dispensed with and excused by a prior agreement on the part of the party otherwise entitled to it, that it shall not be necessary to give him notice, (c) Where, before the note matures, the iiidorser, believing that the maker will not pay, recovers a judg- ment against him for the amount of the note on other securities, and makes the debt his own, and th .% , ») Bllimv Ulxon.6ti. B. U. C. 580. ;*Vi&v5 v.»i '•.u.ivf iv» e) Fhipsun v. Kiifller, 4 Camp 286. d) Beckett V. ComiBri. 4 (i. B. U. C. 188. •) Sue Hickerdike v. Bollman, 1 T. R. 406. /) Ex parte Heath S VeH. & B. 240 ; Cory v. Scott, SB.* Aid. 619. /) IIM Wllka V. Jauka, Peake 20S. „...;„.«_,...•'' NOTICE OF DISHONOR. 153 \ Though the acceptor, At the time of diahonor, have no effects of the drawer in his hands, yet it he ever had any after the drawing of the bill, or if without effects the drawer had any reasonable ground for expecting that the bill would be honored, he is entitled to notice, (a) A drawer who himself made a bill payable at his own house, has been held not entitled to notice, for it might be presumed to be for his own accommo- dation, (b) In the Province of Quebec the drawer cannot avail himself of the want ot protest and notice, unless he proves that provision was duly made by him tor the payment of ihe bill, (c) The holder's ignorance of a party's residence will excuse notice of dishonor, provided due diligence be used to find such residence; and due diligence is a question for a jury. (. (b) Sharp V. Bailey, 9B. AC. 44. . i,^ ^ , -^. ,!.« y>A h) Art. 23; 3 of Civil Code ; Knapp v. Bank Montreal, 1 L. C. R. 252. id) Batenian v. Joneph, 1*2 East, 438. ,' (•) Art. 2826 of the Civil Code. t_ ^ J,_ . IH LAW or BILLS AND MOTBS. rendered impoBRible by inevitable accident, or irre- sietible fbrco. They may also be waived by any party to the bill, in so far as his ri«;ht8only are c^hcerned. (a) Where, after the time for giving notice of dishonor, there is an absolute promise to pay, deliberately made, with full kuovvlodge of the fuc Is, this will prevent the defeuduut from setting up that a notice was not given, (b) • ■ • /i •' > • • , , , And if the indorser of a bill or note promit^e to pay it, with full notice that he is not legally liable, he will be bound to do so, though he is at the time actually discharged from want of presentment and notice of dishonor, (c) . • . In an action by indorssee against indorser of a note, an averme!it of presentment and notice is supported by proof of a subsequent promise to pay, although it appears that there was in fact no proper presentment or notice. (• <> (e) Johnson v. Gkioffrion, 13 L. C R. 161. i-T-^'-i -« .-^^-.^^ -„>^^*^.^ , . (rf) PIckin V. Oraham, 1 C. & M. 726. '•'•« - ' - • («) See Phipeion v. Keller, 4 Camp. 286. . (f) Burke v. Elliott, 16 Q. B. U, C. eiO. .. _ A»!>?" •A'J' ISa LAW or BILLS AND NOTES. recover against him, by proving his promise to pay, made afler action brought, and aflor issue is joined, for the admission operates as evidence of a previously existing fact, which it otherwise would have been necessary to prove, (a) ' A promise l)y the indorser to pay the note after his discharge for want of protest, may be proved by parol evidence, and this, though the promise was also con- tained in a letter which has been destroyed. (6) In the Province of Quebec, whenever acceptance of a bill of exchange is refused by the drawee, the bill may be forthwith protested for non-acceptance, and after due notice of such protest to the parties liable upon it, the holder may demand immediate payment of it from such parties, in the same manner as if tlje bill had become due and had been protested for non- payment. The holder is not bound afterwards to present the bill for payment, or if it be so presented, to give notice of the dishonor, (c) 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 qu ilified notary ; such noting lo be made under- neath or to be indorsed upon a copy of the bill, and kept upon record by the officiating notary, (d) When a bill which has been noted for non-acceptance as provided in the last preceding article, is afterwards protested for non-payment, a protest for non-acceptance need not be extended; but the noting with the date thereof, a^nd the name of the notary by whom the same was made, must be stated in the protes for non- paymerit. (e) . . McCuniffe y. Allen. 6 Q. B. U. C. 377. *< ^, Johnson, v. Oeoffrion. 7 L. C. J. 126 ; IS L. 0. R. Kl. Art 2*298 of tb« Civil Cod*. d) lb. 2V09. •) lb. 1800 > NOTICI OF DISHONOR. 157 Upon every bill noted or protCHied for non-accoptance, the words " Noted for non-acceptance," or, '* Protested for non-acceptance," as the case may be, together with the date of noting or protesting, and his fees and charges must be written or stamped by the ofliciating notary, and subscribed by him with his name or initials as such notary, (a) 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-p:»yment, the notice of such protest must contain a notice of the previous noting for non-acceptance. (6) The noting and prot( voting of bills of exchange for non-acceptance and the giving notice thereof, are done by the ministry of a single public notary, without witnesses in the manner and according to the forms pre8crii»ed by the Act intituled "An Act respecting Bills of Exchange and Promissory Notes," (c) Con. Stat. L. C. c. 64. (a) Art 2801 of th« Ciril Oodt. QuobM. . (*) lb. 2302. («) lb. 230«. t:" ',■'■: ■ ; y'r. 'Vi ' ■.'■:■ .r ■ " ■■• '-' ■■■)■ '. . ■'■' ' i' ■ - -■ II \t6S ..„•'•/.. •!. -■ '■• \'l .'•^. l' , I ■ CHAPTER IX. OP THE ALTERATION AND FORGERY OF BILLS AND NOTES. It is a rule that all instruments in writing, and bills of exchange, and promissory notes among the number, are rendered void by any alteration in a material part, whether made by a p uty to the instrument, or by a stranger, unless all parties consent thereto, (a) It ia held in England, that even if the consent of all parties has been obtained to an alteration in a material part, such alteration, nevertheless, avoids tb*) bill, under the stamp laws, for it is become a new and different instrument, and therefore requires a new stamp, which stamp cannot there be affixed. (6) It is apprehended that the law is different in this country. If by alteration a new instrument is created, it surely may be stamped as effectually under our Statutes, as a note not stamped when issued. As will be hereafter seen, the Statutes in force in Canada allow any holder of an instrument which is not properly stamped, to pay double duty, and thereby render the instrument valid. There is no analagous provision in the English Statutes. If the alteration is material, and the party affected by it does not consent to it, there is an end of his liability, but if he does consent to remain liable, it would seem <«) Davidson V. Cooper, 11 M.&W. 778; 13 M. AW. 848. , _ (*) See Bowman v. Michol, 6 T. R. 5S7. ALTMATION OF BILLS AND NOTES. 159 that the instrument might be re-stamped, and rendered valid under our Statutes. There are two cases in which an alteration, though in a material part, will not vacate the instrument: fii'st, where such an alteration is made before the bill is issued, or become an available instrument, and secondly where the bill is altered to correct a mistake, and in fdrtlierance of the original intention of the parties, (a) But a bill cannot be altered after an attempt to nego- tiate it with a holder for value, (6) and if either payee or indorsee have given value for it, so that the drawer is liable, an alteration, though before acceptance, vacates the bill, (c) But a mere accommodation bill may be altered before it comes into the hands of a holder for value, as it i& not an available instrument until some person has given value for it. (d) , * If A and B exchange acceptances, this will be a negotiation of each acceptance for value, and neither acceptance can be altered, even while in the hands of the original parties, without any consideration but the exchange, (e) If an alteration is merely for the purpose of correct- ing a mistake, or to make the bill what it was originally intended to be, it will not be avoided. Thus it 'las been held as against a party who indorsed a note aiid thereby evinced an intention to negotiate it, tliut the insertion of the words " or order," to carry out that intention, with the consent of all parties, did not vitiate the instrument. (/) So, a bona fide holder of a bill of exchange, accepted payble to or order, may insert his own name as ia) See Downea v. Richardson, 5 B. &. Aid. 674; Catton t. Sampson, 8 Ad. & E. 130. '. (M Calvert v. Roberts, 3 Camp. 343, ic) Walton V. Hastingra, 4 Camp. 223. Id) Downes v. Richanlson, itit tupra, («) Cardwell v. Martin, East, 190 ; Cowiey v. Dunlop, 7 T. R. 50.5 ; se« Wood T Shaw. 3 L C. J. 169 ; ante p. 43. if) Kenhaw v. Cox, 10 East, 487 ; Byrum r. ThompKn, U A & E. 81. 160 LAW OF BILLS AND NOTIS. payee, and indorse it, and the bill may be sued on as payable to the party who has inserted his name, (a) But a material alteration of note made after it is issued, not in pursuance of the original intention of the party affected, and, without his consent, will invali- date it. Thus where a note was made by A, payable to B, without the words " or order," and indorsed by B, it was held that the insertion by the holder of the words " or order," after the issue of the note, rendered it void as against B, for there was no evidence that he at any time agreed to the insertion of words which would render the note negotiable. (6) So the addition of the words " interest to be paid at six per cent, per annum," written at the corner of the note and not in the body, is a material alteration, avoiding the note, (c) A material alteration of a bill or note renders it void, even in the hands of a bona fide indorsee for value. Thus where the holder of a bill sued B, the acceptor, and C, the indorser, as upon a bill "dated Ist of June, 1847, payable four months after date ; " and the bill, when produced at the trial, appeared in fact to have been " dated Nov. 1st, 1841, and payable three months after date," and to have been altered by erasure, and made to read as declared upon. The Court held that the alterations were material to the contract and fatal to the holder's recovery, though an indorsee for value, and not shown to have been in any way privy to the alterations, (rf) ■ ^- (^ ^ . . ,i But where a note is made or a cheque drawn in such a careless manner that it may be altered or increased if it is altered, and the alteration ia not in any way apparent, the maker or drawer will be liable to any ' I («) Atwood V. Griffin, R. k M. 426. » Uwton V. Mill id((«. S Kerr, 620. e) Warriinrton v Early, 28 L. J. O. B. 47. ■'^■'■: ■> ' » • -• ' * •' " * "-'^ (ii MarvdiUi t. Oulrcr, 6 Q. B. U. 0. ni. ^-^ ; tii^- r^'^^ ^ t— - -^ ti^ti^ C\.i > ' \-i(^7'ZV ALTERATION OF BILLS AND NOTES. 161 bona fide holder into whose hands it may afterwards come, though as between the original parties to the note the alteration might bo a forgery, rendering the note void, {a) But if the alteration is apparent on the face of the paper, it is conceived that the mnker or drawer would not be liable to a subsequent holder; though, as we shall hereafter see, as between banker and customer, it the latter, by his careless manner of drawing a cheque, invites a forgery, he must bear the loss if the banker pays the cheque. Where the word " months" was omitted in a note after the word " three," and was inserted by the holder, without the knowledge of the indorser, it was held that this was not an alteration, and that the indorser was liable. (6) An alteration in the place of payment is a material alteration under our statutes, (c) where it is made with- out the consent of the party affected. But a similar alteration with the consent of the parties would not invalidate the instrument, either at common law or under the Stamp Act. (tone V. Dew, 9C. P. U. C.48». , ,. , ^^t-j ;i iv (/) Canard v. Tozer, 2 Kerr, 306. 11 162 LAW OF BILLS AND NOTES. delivered to the plaintiff by an agent of one of the makers [defendants] in its altered state; the other defendant was called as a witness, and stated that he could not write or read writing, beyond his own name, and could not say that the note had been altered since be signed it. The Court held this sufficient for the jury to infer that the alteration was made before the note was signed, (a) A material alteration by the drawer and payee of the bill, or the payee of a note, though it avoids the instru- ment, does not extinguish the debt, (b) But an altera- tion by an indorsee not only avoids the security as against all parties, but also extinguishes the debt due to the indorsee from the indorser; {c) for if the indorsee could compel payment from his indorser, the latter would bear the whole loss, being unable to recover from any other party. A party is not liable on a substituted bill given in renewal of an altered bill, unles-i he knew of the altera- tion at the time of giving the substituted bill, {d) Where an alteration appears on the face of a bill or note, it lies on the plaintiff who sues on it to show under what circumstances it was made, so as to satisfy the jury whether it was a mere correction of an error, or was made before the instrument was issued, or was a material alteration made after the bill or note was complete, (e) It is therefore advisable that persons drawing a bill or making a note should make every correction, as f».r as possiblCj-explain itself, as by passing the pen through a word meant to be omitted, instead of erasing or completely obliterating it. ni ty: :rm^ (a) Stra«t T. Walsh, Trin. T. 1862, Stevens' Digttt, N. B. Reports TO. h) Sutton V. Toomer, 7 B & C. 416 ; Atkinson v. Hawdon, 2 Ad. & E. OSS. (e) Alderso" v. Langdale, 3 B. & Ad. 660. ■ ■ • Id) See Bell v. Gardiner, 4 M. A 0. 11. • -: : • («) Ilenman v. Dickinson, 5 Bing. 183 ; Knight T. Clements, 8 Ad. * E. US. FORGERY OF BILLS AND NOTES. 163 And if it is impossible to do this, as in the case above stated, of the acceptor refusing to accept unless the date or time of currency be altered, it is advisable in practice either to get a new stamp and draw the bill afresh, or, at least, to append a note at the back of the bill, signed by the acceptor, stating the jdteration to have been at his request, and before acceptance. Witii reference to the amount, if a change should be required, we have already seen, under the head " qnalitied acceptance," that the acceptor may reduce the amount by accepting for part only. Forgery is defined as the fraudulent making or alteration of a writing to the prejudice of another man's right, or as the false making or making malo arnmo of any written instrument for the purpose of fraud and deceit, (a) Tlie forgery of bills or notes or of any part of them, and the uttering of them, knowing them to be forged, are re-ipectively felonies punishable by impilov^x^inent in tlie Penitentiary for life, or for any term not less than two years, {b) Fraudulently obliterating or altering the crossing of a c}io(|iie is felony punishable in like manner, (c) lly section 27 of the same statute, the fraudulent Biguini; of a bill ov note for any other person by pro- curation or otherw i ^e without lawful authority or knowingly uttering the same, is also a felony. The most common species of forgery is fraudulently writing the name of an existing person. But the mis- applicHtion of a genuine signature, as by writing over it a promissory note for a large sum of money is ag much forgery as the making of a false signature, {d) (a) Clftrke's Crim. Law, C»iiada, 356. {h) Stilt, uf Canada, 32 A 33 Vic. c. 19. a. 25 (c) Ih. i. ■:». \fi) K«x V. Hales 17 St. Tr. 1«1. 164 LAW OF BILLS AND NOTES. ' To sifjjn the name of a fictitious or non-existing perso!! is forgery where it is signed with intent to defraud, (a) i But there is nothing criminal in merely assuming the name of a fictitious person. If done innocently without any fraudulent intent it is clear it would not be a forgery, and even assuming and using a fictitious name, though for the purpose of concealment and fraud, will not amount to forgery, if it was not for that very fraud or system of fraud of which the forgery forms a part, (h) The adpotion of a false description and addition where a false name is not assumed is not forgery, (c) If a clerk be intrusted to fill up a blank cheque, signed by his master, with a particular sum, and he fraudulently insert a larger sum, it is a forgery of the cheque, [d) and every fraudulent alteration, whether by subtraction, addition or substitution, is forgery, (e) The statute already referred to extends to an altering as well as forging. ' . ; A promissory note was made by A, payable two months after date to the order of B, and after indorsement by the latter, A altered the note by making it payable three months after date, and then discounted it at a bank in London, Ontario. The Court held that the altering by A of the note while it was in his possession, after indorse- ment, was a forgery of the note and not of the indorse- ment, though the note was made by A. (/) , , A man may make a promissory note for any sum he })leases, and in favor of any person, and payable to him, or to his order or to bearer, or on demand, (a) Rex V. Francis, Bayley fith Ed. 572; Russ & Ry. 209; Shoppard's case, 1 Leach 22fi. (6) R«x V. Bontlen, R. & R. 260. (c Webbs (ase, R.&R. -105. ; - V ' [d) R.'},' V. Wilson. 1 Den. C. C. 284. " *''■ ■•' ■ V' ■ ' . ■ ' (e) Rex V. Klsworth, iSayley, 6th Ed. 574. -. i^^ ::^ .i^ujt . iiiri- iL ■"' (/) Reg V. Craig, 7 C. P. U. 0-239. '"' ' ' ^f' -^ iC= ;.' • ^ ■''} FORGERY OF BILLS AND NOTtJ. 165 or at any time after date, at any place, and so long as it remains simply as his own promissory note, in his own possession, and charging no other person but himself with liability, he may alter it at his own free will, ill all or any particulars. But that right of altera- tion ceases when another per.sou becomes interested in the note, either by accpiiriiig it as his own property, or Vjy becoming a party to, or responsible for its payment, and an alteration then made prejudicial to any such person, and under circumstances which afford ground for infer- ring au intent to defraud, is a criminal act. [fi) When the signature of a bill is genuine, an uttering by another person, with a representation that he is the person whose signature is on the bill, is not forgery or a felonious uttering. (6) A boha Jide holder for value cannot sue upon a forged bill or note, or even keep it against the man whose name is forged, (c) . . Therefore, if the acceptor or maker pay a person who derives his title through a forgery, the payment is no discharge; that is, the acceptor or maker may be obliged to give up the instrument to the true owner, and may be sued either upon it or upon the consideration. But as we have already seen, if the alteration of a bill or note is not in any way apparent, the maker or drawer will be liable thereon to a bona jide holder, though as between the original parties the alteration may be a forgery, rendering the bill or note void. If a bill or cheque be altered and made payable for a larger sum than that originally inserted, should the drawee, banker or acceptor pay it, he cannot charge the drawer for more than the original sum ; {d) nor would the acceptor or maker, if he had paid it, be able to take credit for it in his account («) Betf. V. Craig. 7 C. P. U. C. 241. (») Rex V. Hevey, 1 Leach 241. (e) Burchfleld t. Moore, 3 E. Jt B. 68S ; Johnson r. Windle, 8 Bing. N. C 22S. \(t) Hall T. Fuller, 6 B. & C. 750. 166 LA\T 07 BILLS AND NOTEA. with the drawer or payee. But in case any act of the drawer facilitated or gave occasion to the forgery, he must bear the loss himself; as, if a customer of a bank di vv a cheque for fifty dollars, and left room for the words " t liree hundred and" to be placed before the fifty, then the banker, on paying the cheque bona Jide, may take credit for the payment, (a) It is a general rule of law that money paid under a mistake as to facts may bo recovered back, though it is otherwise as to money paid under a mistake of law. I'his principle regulates the dealings with forged instruineiits; thus, if a forged note be discounted the transferee may recover back the money on discovering the forgery, if, as would usually be the case, he were guilty of no negligv^iice, and believed ths signature to be genuine. (6) But any fault or negligence on the part of him who pays the money on the note will disable him from recovering; thus, a banker is bound to know his customer's handwriting, and an aceptor of a bill the handwriting of the drawer, and each of them, in paying a forged cheque or draft, must, in ordinary cases, bear the loss, (c) (a) Young v. Oroto, 4 Bing. 263 ; Bee InRham v. Primrose, 7 C. B. N. S. M. (4) Bruce v, Bruce, 5 Tvunt. 495 ; lb. 488 ; Ourney v. Woniorsley, 4 E. &. li. 133. . 114. h) Royal Can. Bk^v. Shaw, 21 C. P. U. 0. 456. INTEREST ON BILLS AND NOTES. 171 nevertheless, be recovered on by them. But this statute has not a retrospective operation so as to enable a bank to recover upon usurious notes given before it was passed, (a) In the Provinces of Ontario and Nova Scotia it ii provided that interest shall be payable in all cases in which it is now payable by law, or in which it has been usual for a jury to allow it. And on the trial of any issue, or on any assessment of damages upon any debt or sum certain: 1. Payable by virtue of a written instrument at a certain time, the jury may allow interest to the plaintiff from the time when such debt or sum became payable ; or, 2. If payable otherwise than by virtue of a written instrument at a certain time, the jury may allow interest from the time when a demand of payment is made in writing, informing the debtor that interest will be claimed from the date of such demand. (6) In the Province of Ontario, it is also provided that aU inlaud bills or notes, if protested for non-payment shall be subject to interest from the date of the protest, or if interest be therein expressed, as payable from a particular period, then from such period to the time of payment, and in case of protest, the expense of noting and protesting, and the postage thereby incurred, shall be allowed, and paid by the holder over and above the said interest, (c) In both Ontario and Quebec, bills or notes drawn for an usurious consideration are not void in the hands of an innocent liolder, for valuable consideration, ((f) In the Province of Nova Scotia, in all cases where interest is, or may be chargeable, or recoverable by law> or by any contract express or implied, and the rate of interest shall not have been agreed upon in writing, such («) Com. Bank v. Harris, 20 Q. B. U. 0. 604 ; 8«e, alio. Bank of Montreal v. Scott, 17 <3. P. U. C. 8..8. (b) Con. SUtt. Ont.. o. 43 ; Rev, Stat. N. S. chap. 82. a. i. («) Gun. Stat. Ont. c. 42, b. 13. ) Nothing in the act is to apply to, or affect any char- tered Bank, (c) In the Province of New Brunswick, the Provincial Statute 22 Vic, c. 21, s. 2, provides that no person shall take, directly or indirectly, more than six per centum per annum, for the loan or forbearance of money, but no contract for the payment of a greater rate of interest is to be deemed void. The excessive rate may be proved under the general issue, and it shall then be deducted from the demand. In New Brunswick, therefore, a note carrying on its face more than six per cent, interest, would not be void on that ground, but no more than six per cent, could be recovered in an action on the note. In the Province of Quebec, it is provided that the non- payment of any bill or note, after the maturity thereof, and on or before the last day of grace, shall ipso facto entitle the holder to recover from the party liable on such (<•) SA Vic. c. 71, Si. 1 & 2 of Dominion. (») Tb. 1. 8. (<) lb. ■. 7. ^ INTEREST ON BILLS AND NOTES. 175 bill or note, in addition to the principal sum thereof, legal interest thereon, from the last day of grace, whether such bill or note is protested or not ; buu nothing in the act con- tained shall prevent the recovery of any higher rate of interest, than six per cent,, legally stipulated in any bill or note, (a) As the law now stands in Ontario and Quebec, any person or persons may stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount, which may be agreed upon. {}>) But six per cent, is the rate of interest, in all cases where, by the agreement of the parties, or by law, interest is payable, and no rate has been fixed by the parties oi- by law. (c) The general banking act, 34 Vic. c. 5, s. 52, provides that the bank may in discounting at any of its places of business, branches, agencies, or offices of discount and deposit, any note, bill, or other negotiable security or paper, payable at any other of its own places, or seats of business, branches, agencies or offices of discount and deposit, in Canada, receive or retain in addition to the ^discount,' any amount not exceeding the following rates per centum, according to the time it has to run, on thf amount of such note, biU, or other negotiable security, oi- paper, to defray the expenses attending the collection thereof, that is to say : — under thirty days — one-eiglith of one per cent. ; thirty days or over, but under sixty days — one-foui-th of one per cent. ; sixty days and over, but under ninety days — three-eighths of one per cent. ; ninety days and over — one-half of one per cent. The Bank may, on discounting any note, bill or other negotiable security, or paper, bona fide, payable at any place in Canada, diffisrent from that at which it is dis- (a) Con. Stat. L. C. c. 04, Ss. 7 A 8. <*) Con. Stat. Can. c. 68, i. S. («) lb. B. 8 ; t^ee further as to Usury, 86 Vic. o. 8, 1. 1. 174 LAW OF BILLS AND NOTES. counted, and other than one of its own places, or seats of business, branches, agencies or offices of discount and deposit, in Canada, receive and retain in addition to the discount thereon, a sum not exceeding one half of one per centum on the amount thereof, to defray the expenses of agency, and charges in collecting the same. Where interest is not expressly made payable by the terms of the instrument, it runs from the maturity of the bill or note. If a bill or note not expressly made payable with interest, be payable on demand interest runs not from the date of the instrument, but from the time of the demand, (a) Where there has been no demand except the action, interest may be given from the service of the writ of summons. (0) The indorser of a bill or note has been held liable to pay interest only from the time that he receives notice of dishonor ; so the drawer of a bill is not liable for interest until he ascertains who is the holder. When he has found out who is the holder, he is bound to pay within a reasonable time. If he does not, he is liable to damages for not performing his contract; these damages are the interest on the bill, (c) Interest was formerly computed only to the commence- ment of the suit. In the Province of Ontario, it is now computed to the time of the verdict, and in any suit or action, in which any verdict is rendered for any debt or sum certain, on any account, debt or promises, such verdict shall bear interest at the rate of six per cent, per annum, from the time of the rendering of such verdict if judgment is afterwards entered in favor of the party or person who obtained such verdict, notwithstanding the entry of judgment upon such verdict has been suspended (•) BUner r. Hendricks, S Bla. 761, Barough r. Whit*, 4 B. * 0. MT. (*) Pierce ▼. FothcrKiH, S Bing. N. 0. 167. (c) Walker t. Bamct, 6 Taunt. 240. INTEREST ON BILLS AND NOTES. 175 by the operation of any rule or order of Court, which may be made in such suit or action, and in all cases damages shall be assessed only up to the day of the verdict, (a) Where a note, payable with interest, is paid by instal- ments from time to time, not always sufficient to cover the interest due at each time of payment, the usual mode of adding the interest to the principal, deducting the payment and charging interest on the balance, cannot be adopted ; but the proper mode is to allow the payment toade only to sink so much of the principal at the payment exceeds the interest due, and then compute interest on the balance, (h) Interest ceases to run after a tender, by the party liable on a bill or note, of the amount due. (c) A party who guarantees the due payment of a bill is liable for interest, (rf) Interest at the rate allowed by our law, is chargeable upon a note dated and payable in the United States, when an action is brought against the parties thereto residing in this country. (*) Corporations not incorporated for the business of lend- ing money, but only allowed by law to lend money which they have to invest, may charge the same rate of interest as a private individual. Thus, a municipal corporation may lend money at any rate of interest which may be agreed upon; and the reasons which make it necessary to limit the amount of interest to be charged by corpora- tions engaged in the business of lending money, do not apply to municipal corporations. (/) The Statutes of Canada, 36 Vic. c. 70, enact that any corporation constituted for religious, charitable or educa- tional purposes, in the Province of Ontario or Quebec, (a> S9 ft ao Tit., c. 48, ■. 1 (b) Barnum t. Turnbull, 18 Q. B. U. C. 277. (e) Dent t. Dunn, 8 Camp. tK. (<0 Ackennan ▼. Ehrenapenrer. 18. M. k W, M. («) Oriffln T. Judson. IS C. P. U. C. 430. if) Corpontien N. GwlIIimbury r. Moon, 16 0. P. U. 0. 445. 176 LAW OF BILLS AND NOTES. authorized by law to lend or borrow money, may here- after stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount which may be agreed upon, not exceeding eight per cent, per annum. The rate of damages allowed on protested bills of exchange, varies in the different Provinces of the Dominion. In the Province of Ontario the rate of damages to be allowed and paid upon the usual protest for non-pay me i5t of bills of exchange drawn, sold or negotiated within the Province, and although the same may not have been drawn on or by any person residing therein, shall, in the following cas(}S, be as follows : 1, If the bill has been drawn upon any person, at any place in Europe or in the West Indies, or in any part of America not within the Province of Ontario, or any other British North American Colony, and not within the territory of the United States, ten per cent, upon the principal sum specified in the bill. 2. If the bill has been drawn upon any person in any of the other British North American Cblonies, or in the United States, four per cent, upon the principal sum specified in the bill, (a) In each of such last-mentioned cases, the bill shall also be subject to six per centum per annum of interest, on the amount for which the bill was drawn, to be reckoned from the day of the date of the protest to the time of repayment, and such aggregate amount, together with the expenses of noting and protesting and the postages, shall be paid to the holder at the current rate of eS:change of the day when the protest for non-payment is produced and repayment demanded; that is to say, the holder of any such bill returned under protest for non-payment, (a) Con. Stat*. Ont. chap. 42 8. 9. * DAMAGES ON PBOTESTED BILLS. 177 may demand and recover from the drawer or indorsers so much current money of this Province as shall then be equal to the purchase of another bill of the like amount^ drawn on same place, at the same date, or sight, together with the damages and interest above mentioned, as also the expenses of noting and protesting the bill, and all other charges and postages incurred thereon, (a) In case any promissory note, payable only at some place in the United States of America, or in some 6ne of the British North American Colonies, not being Canada, and not otherwise or elsewhere, be made or negotiated within Upper Canada, and be puotested for non-payment, the holder shall, in addition to the principal sum mentioned in the note, recover damages at the rate of four per cent, upon such principal sum, and also interest thereon at the rate rate of six per centum per annum, to be reckoned from the day of the date of the protest, and suc'i aggregate amount, together with the expenses of protesting the note, and all charges and postages incurred thereon, shall be paid to the holder at the current rate of exchange of the day when the protest is produced and repayment demanded, that is to say : the holder of any such note returned under protest may demand and recover from the maker or indorsers thereof, su much current money of this Province as shall then be equal to the purchase of a bill of exchange of the like amount, drawn on the same place at the same date, or sight, together with the damages and interest above mentioned, and also the expense of protesting the note -and all charges and postages incurred thereon. (6) When the holder of a protested bill or note returned for non-payment, notifies the drawer, maker, or indorser of the dishonor thereof in person, or delivers notice (•) Con. State. Ont. chap. 42 ■. 10. (*) lb. 8. 11. 12 • 178 LAW OF BILLS AND NOTBS. thereof in writing to a grown up person at his or their counting house or dwelling house, and they disagree about the then rate of exchange for commercial bills, the holder and the drawer, maker or endorser so notified, or any of them, may apply to the president, or in his absence to the secretary of any Board of Trade or Chamber of Commerce in the city or town, in which the holder of such protested bill or note, or his agent, resides, or in the city or town nearest to the residence of such holder or agent, and obtain from such president or secretary a certificate in writing under his hand, stating the said rate of exchange, and the rate stated in said certificate shall be final and conclusive as to the then rate of exchange, and shall regulate the sum to be paid accordingly, (a) In the Province of Quebec, any person who discounts or receives a bill of exchange payable in that Province, at a distance from the place where it is discounted or received, may take or recover, besides interest, a com- mission sufficient to defray the expenses of agency and exchange, in collecting the bill. Such commission not in any case to exceed one per cent, on the amount of the bill. (6) Bills of exchange drawn, sold or negotiated within Lower Canada, which are returned under protest, for non-payment, are subject to ten per cent, damages, if drawn upon persons in Europe, or the West Indies, or in any part of America, not within the territory of the United States, or British North America. If drawn upon persons in Upper Canada, or in any other of the British North American colonies, or in the United States, and returned as aforesaid, they are subject to four per cent, damages, with interest at six per cent, ia each case, from the date of the protest, (c) (a) Con. Stata. Ont. chap. 42 1. 12. (ft) Art. 233a of the Civli Cod*, (c) lb. S33«. DAMAGES ON PROTESTED BILLS. 17^ The amount of clamas^es and interest specified in thd 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 re-payment de- manded ; 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, together with the damages and interest, and also the expense of noting and protesting, and of postfiges thereon. («) When notice of the protest of a bill, returned for non payment, is given by the holder thereof to any party secondarily li;ible upon it, in person or by writing, delivered to a grown person at his counting house, or dwelling house, and they disagree as to the rate of ex- change, the holder aud 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 con- clusive as to the rate of exchange, and regulates the sum to be paid accordingly (b) 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 arbitrator on the other part is conclusive, (o) By the 22 Vic. < hap. 22, s. 1, of the Province of New Brunswick, wh 'never any bill of exchange drawn or indorsed within the Province, and payable in any part of North America, without the Province, or in Prince Edward Island, or in the island of Newfound- land, shall be returned protested, the party liable for the contents of such bill, shall upon due notice and demand, pay the same with damages, at the rate of two («) Art. 2337 of the Civil Code. (») lb. 2338. (*) lb. 2339. 180 LAW OF BILLS AND NOTES. and one-half per cent, upon the contents thereof, with lawful interest aner annum, interest, from the date of the protest to the lime of payment. The Con. Stats. U. C. chap. 42, gives damages on the usual protest for non-faymmt of bills of exchange, but damages cannot be claimed under the statute, by reason of the non-acceptance of such bills, (a) (a) Bank Montrul v. Harriion, 4 U. C. P. R. 381, DAMAGES ON PROTESTED BILLS. 131 *' A foreign bill may be referred to the master for thd computation of the principal, interest, and costs, and ten per cent, damages, (a) Under the Con. Slats. U. C c. 42, sections 9 and 10, ten per cent, damages is recoverable on all bills drawn or negotiated in Ontario on England, and protested for non- payment. (6) Four per cent, is the rate allowed on a bill or note drawn on a person in the United States. A note made here, payable in ^New York, but not there " only and not otherwise or elsewhere," is not within this statute so as to entitle the holder to four per cent, damages on protest for non-payment, (c) The term negotiate, in reference to bills of exchange, means to transfer for a valuable consideration, and the sending of a bill by the drawer, residing out of Ontario, to the drawee, residing in the Province, and the accept- ance of t!ie bill by the latter, and the transmission of it back again, does not constitute a negotiation of the bill within Ontario, within the meaning of the statute in Ontario already referred to, and consequently in such case no damages can be recovered under the statute, but only the value of the bill at 24s. and 4d, to the pound sterling, {d) Six per cent, damages fs chargeable upon a protested bill of exchange drawn and accepted in Ontario, but payable in the United States, {e) Where a bill of exchange is drawn in Ontario addressed to a person residing there and is payable in England, ten per cent, damages upon the amount of such bill can be collected under the statute. (/) A promissory note made in Ontario for a sum of (•) Coml Bank t. Allan, b O. 8. 574. (ft) Royal B. Liverpool v. Whittemore, 16 Q. B. U.. C. 4M. ie) Mayer y. Hutchinson. 10 Q. i;. U. C. 476. id) Foeter r. Bowes, 2 P. R. U. C. 266. <•) Am. Ex. Bank v. McMicken. 8 C. P. U. C. 69. (/) Rom t. Winans, 5 C. P. U. C. 186. |82 LAW OF BILLS AI7D NOTSS. iponey expressed to be sterling, payable in Glasgow, not ^ding the words "and not otherwise or elsewhere," is 4 note payable generally, and the plaintiff is not entitled ^ recover the difference in exchange on such a note, (a) Where an action is brought on a sterling bill drawn by plaintiffs in London upon defendant in Ontario, and accepted by defendants in London (one of them being at the time in London) payable in London, the plaintiffs lire entitled to recover the current rate of exchange. (6) As against the several parties to a bill of exchange the rate of damages on non-acceptance or non-payment must be regulated by the law of the place where his contract is made. The drawer, therefore, is only liable to the damages provided by the laws of the countiy in which it is drawn, although it may be afterwards negotiated in another country, (c) When a note is dated and made payable in the United States the rate of exchange on the day of the maturity of the note is to govern the amount the defendant has to pay, without reference to the rate of exchange at the time of the trial of the cause, or at any other time. (//) The 10 per cent, damage allowed on protested bills of exchange is not to be considered as a substitute for the difference of exchange, but is to be paid in addition to the sum paid for the bill which always includes exchange, (e) (a) Wilson V. Aitkin, 5 C. P. U. C. 376. ib) Greatorea t. Score, 6 U- 0. L. J. 212. (t) Astor V Benn. Stuart, L. C. Appeals, 69. <(0 JudBiin V. Griffin, 18 C. P. U. C. 360. (e) ^ichol8 V. Raynes, 6 Q. B. U. C. 273; Con. Stats. Ont. c, 42 s. 10. las CHAPTER XL OF THE STATUTE OP LIMITATIONS. By the 21 Jac. 1 c. 16, applicable to the Province of Ontario, all actions on simple contracts, which of course include those on bills, notes, cheques, &c., must be commenced within six years after the right to bringthe action accrued. This is also the limitation in the Pro- vinces of Nova Scotia and New Brunswick. («) The 26 Vic. c. 45 8. 5, of the Province of Ontario, enacts that all actions of account or for not accouniins:, and suits for such accounts as concern the trade of mer chandize between merchant and merchant, their factors and servants, shall be commenced and sued within six ypprs after the cause of such actions accrued. Such is also the law in Nova Scotia. (6) Merchants' accounts provided for in the latter statutes were excepted from the Statute 21 Jac. 1 c. 16. The 25 Vic. c. 20, of the Province of Ontario^ provides that a plaintift shall not, by reason of absence from Ontario, have any greater time to bring his action than if he were resident therein. A similar provision is contained in the statutes of Nova Scotia in regard to personal actions, (c) And lastly, in Ontario, by the 29 Vic. c. 28 s. 29, if an executor or administrator of a deceased party liable on B B«T. SUt. N. B., olMp. 140^ a. 4 ; Rtv. But. N. S oh»p. IM, ■. 1. - Vl«.o.lOf.«. Vic. c. 10 ■. 7. 184 LAW or BILLS AND KOTll. a bill or note gives notice in writing to any holder of the bill or note, of whose claims he has notice, or to the attorney or agent of such holder, that the executor or administrator rejects or disputes the claim, the holder or creditor must commence his suit within six months after such written notice was given in case the note or some part thereof was due at the time of the notice, or within six months from the time the note or some part thereof falls due, if no part thereof was due at the time of the notice, and in default, the suit shall be for- ever barred. In the Province of Quebec, all bills, whether foreign or inland, and all notes due and payable therein, are held to be absolutely paid and discharged if no suit or action is brought thereon within five years next after the day when such bills or notes became due and payable, (a) After the expiry of the five years no action can be maintained on the note, even against a defendant making default, (b) Where a note is made indorsed, and is payable in Quebec, it is subject to the Statute of Limitations of that Province, though the parties thereto may be resi- dents of the Province of Ontario; and the Quebec Statute of Limitations must be construed in our courts as it is construed in the courts of that Province ; and the right of action on such a note as the above is there- fore barred in five years, (c) A promissory note due and payable in Montreal is absolutely extinguished after the lapse of five years without suit, and cannot be sued herd within the period (a) Con. SUt. L. 0. o. 04, ■. 81 ; Art. tfltO of Chn Coda. (») Oiard T. Umoraux. 16 L. G. R. flOl ; mo >lio Oiud t. Olurd, 15 L. C. B. M4; HtrToy V. Jacqu«a, 20 Q B. U. C 8M. (e) Sheriff T. Holoombo, 18 0. P. V. 0. 5S0 ; Afflrmod in appool, SE. it A. Rop. 816; So* Herver v. Pridham. 11 G. P. U. 0. St0, in wbioh tho contnurjr wm hold, MUl thai tho romody only wu bomd by thii SUtuto. STATUTE OF LIMITATIONS. 185 allowed by our statntes, though made in this Pro- vince, (a) The five yeara* prescription under the statute in force in Quebec is not interrupted by the defendant's absence of seven or eight years from Canada, and the plaintiff may proceed during such absence by calling the defen- dant in by advertisement. (6) The limitation of five years under the statute is so absol\{te that no acknowledgment of indebtedness or partial payment will take the case out of the statute; and if no suit or action be actually brought on a note within five years after its maturity, it will be held to be absolutely paid and discharged, (c) The five years' prescription under the statute applies to a note made in 1824, and not sued upon until 1853; {d) and it seems the prescription under the statute applies to all notes due and payable previous to the passing of the statute, (e) A notarial note en brevet is not subject to this pres- cription. (/) The expiry of the time prescribed by the Statute of Limitations, merely bars the remedy on the note j and where a note made more than five or six years, as the case may be, before action brought, is indorsed to a third party before the expiry of the time limited, the indorsee thereof, may after the expiry of the time, plead it as a set off" to an action brought against him on a note made by him, to the person from whom he obtained the first note by indorsement, {g) The Statute of 21 Jac. 1, c. 16, s. 3, is not a bar to a ft r«) Durlinr T. Hiteheock, 25 Q. B. U. C. 46S *) DHrmh t. Church, 14 L. C. R. 295. «i Bowkar T. Fenn, 10 L. C. J. ItO. •) Hoylc T. TornuiM, 7 L. 0. R. tit. •) Goto T. Mfimton, 8 L. C. R 26t. >) DcUSaltoT ^rK*Tin.l6L.0.B.«16:PigMBT.Di««uaa. 17L.C. J. tl. ) n»jB r. DftVid, t L. C. B. 111. ,ld6 'AW OF «{|;'LS ANp NOTIS. set oiF, unless the six years have expired before the action is brought, (a) But where the Statute provides not merely that no action shall be brought, unless within the specified time, but also, that if an action is not brought, the note shall be absolutely paid and discharged, such Statute extinguishes the debt, as well as bars the remedy, and it is conceived that when the debt is extinguished, such a set oft* as the above, could not be pleaded. Thus in regard to the Statute in force in Quebec, we hare seen that it wholly extinguishes the debt. If it affected the remedy merely, a note which was barred in Quebec in five years, might be sued on in this Province, at any time within six years — the period fixed by our Statute. If a note made in a foreign country contains a clause that it shall be void after the expiry of a certain time, no action could be maintained on it here, after the expira- tion of such time ; and the law is the same, where such a proviso or condition is implied by law. Thus, as we ha\>e already seen, by the Statute of Limitations, in force in Quebec, the note is deemed absolutely paid and dis- charged, after the lapse of five years; and where an indorser of a note, made, indorsed and* payable, in Montreal, who was however, a residetit of Toronto, was sued there as such indorser alter the lapse of five years from the maturity of the note, it was held that the action could not be maintained, the lapse of time operating under the Statute as an extinguishment of the debt, and not barring the remedy merely. (6) A foreign Statute of Limitation is no defence to an action on a foreign contract in our courts, unless it have the effect of extinguishing the contract. If, for instance, the Statute of Limitations in Quebec, merely barred the remedy by action, unless pursued within five « (•) VTalkw V. aemmts, M Q. B. 1046. (>) Sheriff T. Holoomb, S E. & A. Rept. S10. 9TATI7TE OF LIUITATIONS. 187 years, bnt did not extinguish all right of action, there is no doubt, a note barred by the iive years limitation in Quebec, might be sued on in this Province within six years, (a) But aa the Quebec Statute actually extinguishes the contract, after the expiry of the prescribed period, effect must be given to the operation of the Statute in our courts. It is said that the modern Statutes of Limita- tion in England, cut off* jthe right as well as the remedy. (6) If the Statute of Limitations has barred the remedy on a bill, the holder cannot by transferring it to another person, give the latter any right to sue ; for as trans- feree of an overdue bill, he can stand in no better situation than his transferor. The time is counted, or in legal language, the statute begins to run on bills or notes, from the first day that an action could be brought upon them, though at that time an action and judgment would have been fruit- less, (c) Therefore, on a bill payable at a certain period after date, the statute runs not from the time the bill was drawn, but from the time it falls due; and where a bill is payable on a contingency, the statute only runs from the happening of the contingency. If a note be payable by instalments, and contain a provision that if default be made in payment of one instalment, the whole shall be due, the statute runs from the first default against the whole amount of the note, (d) If the admin istrato-s of a party to a bill or note have not taken out letters of administration till after the bill or note became due, then the six years will only (a) See Harria t. Quine. L. R. 4. Q. B. 653 ; 20 L. T. K. S. M7. (i) Dundee Har. (Trusteea) v. Dougall, 1 Maoq. H. L. Oa«. 317 ; De Beauroir t. Oven, 6 Exch. 166. (e) iSmenr ▼. Dqr. 1 0. M. * B. 245. d) eeUempT. Garland, A <).£.U». 188 LAW or BILLS AND NOTES. count against the adminietrator from the time of his taking out letters of administration, (a) As upon a bill drawn payable at or after sight, there is no right of action till presentment, so without such presentment the statute does not begin to run. (6) And where a note is payable at a certain period after sight, the statute runs from the expiration of that period after the exhibition of the note to the maker, {c) If acceptance of a bill \^ refused, and afterwards at maturity it be not paid, the six years count from the refusal to accept, {d) If a note is made payable at a certain period after demand, it is like a note payable after sight, the demand and the lapse of the specified time after demand are conditions precedent, and the statute runs when the time has elapsed, (e But as a bill or note payable on demand simply, is due and payable immediately, -the statute runs from the date of the instrument and not from the time of the demand. (/) So, a note payable on demand, with lawful interest, is payable immediately, and therefore the statute runs from the date of the note. (^) If an accommodation acceptor, having paid the bill, is suing the drawer, the former has six years from the time ot paying the money. (A) Where a cheque is given not in payment of any pre-iexisting debt, but merely as a loan of money, the statute begins to run on it only from the time it is actually paid, and not from the time of its delivery to the party, (i) (•) Murray v. Eutlnd. Co. 6, B. & AI 204. \h) Holmw ▼. Kerriion, S Tauut. 828 ; ByleS on fiUli, 9(h Ed., 881. (c) Kturdy v. Hendenon, 4 B. & Al 698. i U) Whitehead ▼. Walker. B M. & W. 606. (•) Thorpe t. Booth, R. h H. 888. /) Ohriktie r. Ftoustnoh, 1 Selw. N. P. 1M-S61. Ig) Norton v. Ellam, 2 M. & W. 461. A) Reynolds v. Doyle. 1 M. ft O. 768 ; CoUinge v. Heywood, 9 Ad. * E. 018. (t) Garden t. Bruoe, L. R. 8 0. P. 800; 18 L. T. M. 8. 644. STATQTE OF LIMITATIONS. 189 When the statute once hegins to run it never stope, although circumstance? should arise in which it is impossible to sue, as if, for example, the debtor die before action and no executor be appointed, (a) When the statute once begins to run on a note no subsequent indorsement to any person, whether in or out of the Province, will stop its running. If, there- fore, the holder of the note is within the Province ^hen it falls due, the statute commences to run at that time, and it will run on from that time against any person to whom it is afterwards transferred. (/') As the six years, in order to bar the remedy, must expire before the commencement of the action, the opera- ation of the statute of limitations may be obviated by issuing a writ of summons against the debtor before the expiry of the prescribed period, and keeping the writ renewed from time to time until there is an opportunity to go on with the action, (c) Certain acknowledgments and payments have the effect of preventing the operation of the statute, and of giving the plaintiff' another six years within which to sue, counting from the date of such acknowledgment or payment, and they have this effect whether made before J or at any time after six years from the accrual of the original debt. But throughout the Dominion no acknowlegdment or promise by words only will suffice, and the acknowledgment must be made or con- tained by or in some writing signed by the party chargeable thereby. (-m .ooO () (/) Asliley ▼. Jamea, 11 M. & Vf. 04S; Bbdyer t. Arehfr, 10 Ezch. Itl vslt>inat^i (ir) Tanner v. Smart, B. <$• C. 603 ; Bew t. PetUt, 1 Ad. & £. 198. ^ 13 104 LAW OF BILLS AND NOTKt. letter from one joint acceptor to his co-acceptor, or a deed between a party to the bill and a stranger, reciting that the bill is outstanding and unpaid, may amount to an acknowledgment against the persons wr.ting the letter and executing the deed respectively, {ff) , j Payment may now be proved like any other fact, (b) In the Provinces of Ontario, Quebec, and Nova Scotia no indorsement or memorandum of any ])ayment written or made upon any promissory note, bill of exchange or other writing by or on behalf of the party to whom such payment han been made, shall be deemed sufficient proof of such payment so as to take the case out of the opera- tion of the statute, (c) Mr. Justice Byles, in his work on bills advises that the debtor should write the memorandum of pai-t payment whether of principal or interest on the back of the bill or note, and that he and the creditor should both sign it, and thus the rights of both will be protected. The expres- sion, "other writing," in the statute only means any other writing containing the contract, and as an entry by a person deceased against his interest, is evidence in an action brought by his representatives, an entry of pay- ment made by the deceased is admissible in an action on the bill by the representatives for the purpose of proving payment. But if the entry is on the bill or note itself, payment so proved, though admissible, would not by the express words of the statute be sufficient. If, however, the entry were on any other paper it seems it would not only be admissible but sufficient {(f) The law of limitation as to a promissory note made in a foreign country and payable there, is to be governed by («) Patera T. Brown, 4 Eip. 48; Halliday r. Ward, 3 Camp. 32; Ifotintitcphen v. Brooke. IB.k Aid. 224. (ft) Cteare v. Jones Ezch. 573. (' j Con. Stat. Ont o. 44 ■. 7 ; Con. Stat. Que. c 87 •. 4 ; Rev. Stat. N. S. o. 164 ■. 4.> («0 Bradley ▼. James, IS 0. B. 8S2. ^\ STATUTE OF LIMITATIONS. 195 the law of the place where it is made, and not hy the law of the place where the action is brought. The Statute of Limitations for the Province of Quebec, chnp. G4 of the Con. Stats, of Lower Canada only rcfors to promissory notes due and payable there, (a) (•) Wilion T. DcnUn, It L. C. J. 112; 10 L. C. J. Ml. m CHAPTER XII. OF STAMPS. The Statutes now in force respecting the stamping of negotiable instruments, are the 81 Vic, c. 9 ; the 33 Vic, c 13, and the 37 Vic, c. 47. Under these statutes, every promissory note, draft or bill of exchange, for an amount not less than twenty-five dollars, is liable to stamp duty, as follows :~a duty of one cent, if the instrument amounts ^ to, but does not exceed twenty-five dollars; a duty of two cents, if the amount thereof exceeds twenty-five dollars, but does not exceed fifty dollars; and a duty of three cents, if the amount thereof exceeds fifty dollars, but is less than one hundred dollars. On each such instrument for one hundred dollars or more, executed singly, a duty of three cents for the first hundred dollars, of the amount thereof, and a further duty of three cents for each addi- tional hundred dollars or fraction of a hundred dollars, of the amount thereof On each such draft or bill of exchange, executed in duplicate, a duty of two cents on * each part of the first hundred dollars of the amount thereof, and a further duty of two cents for each addi- tional hundred dollars, pr fraction of a hundred dollars, of the amount thereof. On each such draft or bill of exchange, executed in more than two parts, a duty of one cent on each part, for the first hundred dollars of the amount thereof, and a further duty of one cent for each additional hundred dollars, or fraction of a hundred dollars, of the amount thereof. STAMP3. 1^ Any interest made payable at the maturity of any bill, draft or note, with the principal sum, shall be counted as part of the amount thereof The bill or note is subject to duty, whether payment be required to be made to bearer, or to order. So a letter of credit is subject to duty, and also every receipt for money given by any bank or person, and entitling the person paying such money, or the bearer of such receipt to receive the like sum from any third person. The exemptions from duty are : — Every bill of exchange, draft or order, drawn by any officer of Her Majesty's Commissariat, or by any other officer in Her Majesty's Imperial or Provincial service, in his official capacity; any note, payable on demand to bearer, issued by any chartered bank in Canada ; any cheque upon any char- tered bank, or licensed banker, or on any savings' bank-^ if the same shall be payable on demand — any post-office money order, or order on any post-office savings' bank — and Any Municipal debenture, or coupon of such debenture shall be free of duty under the act. To these exemptions must also be added notes for any sum under twenty-five dollars, which do not require to be stamped. So under the 37 Vic, c. 47, s. 4, bills drawn and payable outside of Canada, are exempt from duty. By section 4 of the 31 Vic, c. 9, the duty on any such Promissory Note, Draft, Bill of Exchange or part thereof, shall be paid by making it upon paper, stamped in the manner thereinafter provided, to the amount of such duty -—or By affixing thereto an adhesive stamp, or adhesive stamps, of the kind thereinafter mentioned, to the amount of such duty, upon which the signature or part of the signature of the maker or drawer, or in the case of a Draft or Bill, made or drawn out of Canada, of the acceptor or first indorser in Canada, or his initials, or some integral 198 LAW or BILLS AND NOTEfl. or material part of the instrument shall be written, so as (so far as may be practicable,) to identify each stamp with the instrument to which it is attached, and to show that it has not before been used, and to prevent its being there- after used for any other instrument — or The person affixing such adhesive stamp, shall at the time of affixing the same, write or stam p tliQreon the date at which it is afi^xed, and such stamp shall be held prima facie to have been affixed at the date stamped or written thereon. And if no integral or material part of the instrument, nor any part of the signature of the maker, drawee, acceptor or first indorser in Canada, be written thereon, nor any date be so stamped or written thereon, or if the date do not agree with that of the instrument, such adhesive stamp shall be of no avail ; and any person wil- fully writing or stamping a false date on any adhesive •tamp, shall incur a penalty of one hundred dollars for each such offence. By the 31 Vic, c. 9, s. 10, the stamps must be affixed by the maker of the note, or the drawer of the bill at the time of making or drawing, and in default, a penalty is incuiTed, and the duty payable on the instrument, or the duty, by which the stamps affixed fall t>hort of the proper amount, is doubled. In accordance with these principles, it ha« been held, where no stamps were affixed to a promissory note when made, and only stamps sufficient for single duty were affixed when the note was produced at the trial, that the note was void under the 81 Vic, c. 9, (a) for on the omission to affix the proper stamps at the time of making, double duty became necessary, and that not being paid, it was the same as if the note were not stamped at all. It will thus be seen that the requisite stamps must be affixed at the time the instrument is made. Suppose, («) Trkvii V. Qluier, S Huiut, 216. STAMPS. "^ 199 however, that the maker of a note neglects to stamp it, and it is sent to the payee "unstamped. By reason of th^ default of the maker in such case the duty is doubled, and in order to satisfy the requirements of the statute the payee would be bound before using the note to affix double duty thereto; but suppose the payee affixed onl^ single duty, and then indotsed the note to a third party, such party would taky the note with apparently the proper stamps on it, and he would have a right to recover on it, provided he was ignorant of the fact that the note was not stamped by the maker. As soon, however, as he acquired knowledge of the fact that the note was not properly stamped in the first place, he would be bound to stamp it to the amount of double the original duty. On this point the 37 Vic, c. 47, s. 2, ss. 12, provides that any holder of such instrument may pay double duty by affixing to such instrument a stamp or stamps to the amount thereof, or to the amount of double the sum by which the stamps affixed fall short of the proper duty, and by writing his initials on such stamp or stamps, and the date on which they were affixed ; and where, in any suit or proceeding in law or equity, the validity of any such instrument i'' questioned by reason of the proper duty thereon not having been paid at all, or not paid by the proper party or at the proper time, or of any formality as to the date or erasure of the stamps affixed having been omitted, or a wrong date placed thereon, and it appears that the holder thereof, when he became such holder, had no knowledge of such defects, such instrument shall be held to be legal and valid, if it shall appear that the holder thereof paid double duty, as in this section mentioned, so soon as he acquired such knowledge, even although such knowledge shall have been acquired only during such suit or pro- ceeding; and if it shall appear in any such suit or pro- ceeding to the satisfaction of the Court or Judge, as the case ttiay be, that it was through mere error or mistake^ 200 LAW OF BILLS AND NOTES. aj^d without any intention to violate the law on the part of the holder, that any such defects as aforesaid existed in relation to such instrument, then such instrument or any indorsement or transfer thereof, shall be held legal and valid, if the holder shall pay the double duty thereon as ■oon as he is aware of such error or mistake: but no party who ought to have paid duty thereon shall be released from the penalty by him incurred as afore- said, (a) In affirmance of the principle already mentioned it has been held that when a party desires to avail himself of an instrument not properly stamped when made, he must as soon as he becomes aware of the fact that the proper stamps were not affixed to the note by the proper parties, at the proper time, affi^x stamps to double the original duty (b) ■ A promissory note stamped by the payees some weeks after its delivery to them, is null, and they cannot render it valid after suit brought by payment of double duty under the statutes, as they must have known it was not properly stamped at the time it came into their hands, and should have then paid the duty, {c) But, as we have seen, the instrument may be stamped, though the knowledge of the defect is acquired during the trial or at any time during the progress of a suit or proceeding, (d], Under the old law it was held (in the Pf evince of Ontario) not sufficient to stamp the note before oommencing an action upon it. (e) But in Quebec it was held under the 29 Vic, c. 4, 8. 4, where a note had been stamped by the indorsers and not by the maker, and When it came into the hands of the holder it was doubtful whether the proper stamps had been -■■.■\ . (a) Bee also SS Vic, c. 13, 8. 1. ^ (6) MoC*ll» V; Robinaon. I9 0. 1>. V. 0. lit; See Kirby t. Hall, 21 ) Under the 33 Vic, c. 13, the Court of Queen's Bench in Ontario held, on two occasions, that the payee of a note was a subsequent partj' within the statute, (c) While the Court of Common Pleas in Ontario and the Supreme Court of New Brunswick held the contrary on three occasions. (^0 No doubt the word " subsequent" was eliminated from the late statute for the purpose of rendering the law imiform throughout the Dominion. Though an attorney is the holder of a note for the purpose of collection, yet it seems he is not such a holder as is contemplated by the 37 Vic, c. 47, s. 2 ss., 12, for the holder there referred to must have a beneficial interest in the note, (e) Therefore, an attorney receiving a note for collection cannot affix the proper stamps thereto, so as to make it available. It would, however, be very convenient if attorneys had such power, for in many cases a defective stamping might not be discovered until it reached a solicitor's hands. There is no doubt, however, that under a Special authority from the real owner of a note it may be properly stamped by an attorney or solicitor. (/) It is clear that when the stamps are obliterated by writing the date thereon, the date on the stamps must agree with that of the instrument ; and as the person Quebec Bank v. Sewell, 17 L. C. ft. 8. (6) J:« Vic, c. 13. 1 ,12. (e) Woolley v. Huntun, 33 Q. B. U. C. 162 ; JoNph Hall Wg. 0*. v. Harnden, 34 U. C. 8. . (i) Escott V. EacQtt 22 C. P. U. C. 805; RoynolcU v. Vaughan, S Pugsley, iSd ; Kaniiedy v. Adams, ib. 162. !«) Reynolds v. Vaughan, 2 Pu|{8ley, 169. /) S«« Woolley v. Uunton, 83 Q. B. U. 0. 162. 202 LAW OF BILLS AND NOTEI. affixing the stamp must, at the time of affixing the same, write or stamp thereon the date at which they are affixed) it is also clear that .the stamps must be affixed and can- celled on the day the note is made, and the note must also be dated on the day it is made. A blank promissory note was sent to a bank agent to retire a previous note* and was received by the agent on the 27th of October, 1869. On the 2nd of November the agent dated it the 30th October, 1869, and affixed the proper stamps to it, which he obliterated on the same day, but marked the obliteration as of the 30th October, " 30, 10, 69." The note was held invalid under the 81 Vic, c. 9, for if made on the 27th or 30th October, it had not then the stamps affixed ; and if on the 2nd of November, the stamps bore a different date, (a) It will thus be seen that in such a case as the above the stamp laws in effect prohibit the ante-dating or post- dating of a negotiable instrument. When the instrument is made on stamped paper, or when the stamp is obliterated by marking the initials of the [^arty on the stamp, or by writing some integral or material part of the instrument thereon, it is not clear that the same rule would apply. When the instrument is made on stamped paper, the stamp would of course be obliterated at the time of making, and in the two latter cases the stamps must be obliterated at the time of making, ^c; but as a bill or notf may be dated on one day and marfe on another, it is con- ceived that when the adhesive stamp is obliterated by writing the initials, or by writing on the stamp an integral or material part of the instrument, it would be sufficient if this were done on the day the bill or note was made, though it bore date on a day prior or subsequent. When the stamps are not cancelled on the day of making, or there is any other defect in the cancellation or affixing of the stamps, there is no doubt that a subsequent holdi^ (a) Hoffmann ▼. Rlngler, 29 Q. B. U. 0. 681. STAMPS. 203 in good faith may affix double duty and render the instru- ment valid under the 37 Vic, c. 47, s. 2. The statutes make no distinction between notes insuffi- ciently stamped and notes without any stamp, and it is quite clear that all the stamps affixed to the instrument must be cancelled according to law. Thus, where a note required ninety-six cents in stamps, and on the face of the note there appeared nmety cents in stamps duly cancelled, and on removing these stamps two others, one for three and one for nine cents, were found, but they were uncan- celled, the Court held that the non-cancellation of some of the stamps on a note invalidates it, though the rest are duly cancelled, and they therefore declared the note void, (a) The stamps will be of no avail unless they are cancelled or obliterated as required by the statute, and li seems, if the proper amount of stamps is on the note, but they are uncancelled, the note may be treated as if no stamps whatever were affixed thereto. In an action by indorsee against maker it appeared that the proper adhesive stamps were upon the note, but they had not been cancelled by stamping or writing the date thereon, and the Court held under 29 Vic, c. 4, s. 3, that the note was of no avail, and that the plaintiff could not recover. (6) The stamps affixed must be the kind prescribed by the act or what are commonly known as " bill stamps," and affixing postage stamps or part postage stamps would be ineffectual, (c) If the instrument has been properly stamped at the time of the signature, and initialed by the maker, but the stamps have been rubbed off, defaced, or improperly removed by some one else, no penalty would be incuired, and proof of these facts would be a good answer to a plea («) Lowe T. HMl, 20 C. P. U. C. 244. (A) Younsr V. Wajrgoner, 89 Q. B. U C. 36. i' A bill, or note for example, to be set oft', must have been due and unpaid in the defendant's hands when the action was commenced, and must remain in his hands at the trial. (6) •^ I'he debts must be mutual — that is, they must be ^ue to the defendant or defend mts alone, from the plaintiff" or plaintiffs alone.'; ,' But it is not meant that the defendant must be unable to sue any one else than the plaintiff'; lor on » bill for instance, there might be several others who could be sued. Defendant may set off a sum due on plaintiff's joint and several note against plaintift"s demand. For examine, if A and B sue D, D can set off^a debt due to him from A and B, but not one due to him from A alone, or one due from A, B and C. So also if the debt were due from A and B, not to D alone, but to D and E, then the debt could not be set off by D. But the debts and credits of a firm are vested at law in the surviving partner, who is then in the same position as regards set off" as if the other parties had pever existed. ^' - ilFor example, in the above case, suppose D and E were partners, and E were dead, D, though the sole defen* dant, and sued for his private debt, might set off a sum due by A and B, the plaintiff's, to the firm of D and E. (a) BylM on BUlt. 9th Ed.. 858 ; Jacqunr. Withy, 1 T. R. 6£7. (*) Hlohanls >. JuntM, 2 Exoh. 471 ; Bvani T. PtoimtgA T^jE^ ^ l %t€ ye, 4 Excb. 169. l^ t.^tfixiii a -^ ^ BET OFF. 209 And the reason of this is to save the trouble of cross actions ; for though the debt did not originally accrue to D alone, yet D is now the only person who could sue for it. If A sue B alone, B may plead that the money is owed by him, together with C, and that a set oflf is due from A to B and C. (a) If a note be given to a married woman, the husband may either sue alone, or join his wife. If he sue in his own name, he is not liable to a set off, due from his wife before marriage, but he is to a set off due from himself. If he join her, it should seem he is liable to a set off due from his wife, but he is not to one due from him- self. (6) The 124)th section of the Insolvent Act of 1809 provides that the statutes of set off shall apply to all claims in insolvency, and also to all suits instituted by the assignee for the recovery of debts due to the insolvent, in the ^ame maimer and to the same extent as if the insol- vent were plaintiff or defendent as the case may be, except in so far as any claim for set off shall be affected by the provisions of the act respecting frauds and fraudulent preferences. The Con. Stats, of Ontario, chap. 42, enables the holder of a bill to bring a joint action against the diawers, makers, endorsers and acceptors of any bill or note, and section 32 provides that in such action any person sued may set off against the plaintiff any payment, claim or demand, whether joint or several, which in its nature and circumstances arises out of, or is connected with the bill or promissory note that forms the subject of such joint action, or the consideration thereof in the same manner, and to the same extent as if such defendant had been, separately sued. (a) See Slipper v. Stidstone, 1 Esp., 47 ; Stockwood v. Dunn, 8 Q. B. 821 <6) Burrough ▼. Moss, 10 B. & C. 668 14 210 LAW 07 BILLS AND NOTES. Although this statute allows the makers and indorsers of a promissory note to be sued in a joint action, it does not confound their -several liabilities, or enable the one to avail himself of that which is exclusively the defence of the other. In this respect the parties are to be looked upon as if they were sued in separate actions, {a) Payment, release, or any other matter which discharges all right of action on the bill or note, is a defence to each party. Set off may arise between an indorser and a holder, to which another indorser or the acceptor or drawer of a bill, or the maker of a note, may bo an entire stranger. Thus, though the indorsers and payees might have a right of set off against their immediate indorsee, yet a holder taking the bill mediately through the indorsee, would not be subject to a set off which the payees have against their immediate indorsee in respect of a matter collateral to the bill itself. (6) When the several parties to a bill or note are sued in one action under the statute, the right of set off enjoyed by each defendant is confined to a payment, claim, or demand, which in its nature and circumstances arises out of, or is connected with, the bill sued on. (c) And under this statute in an action against, the maker and indorser of a promissory note, neither defendant can plead separately a set off not arising out of, or connected with, the note, (r/) The indorsee of a note not overdue at the time he takes it, is not liable to a set-off which the maker or payee may have against the party from whom he took it. ^'he set off is a collateral matter, and would not affect the indorsee even if he took the note when overdue. (■) When the executors of the maker are sued en a note (») Wood y. RoflB, 8 0. P. U. C. 303. rt) Ih. 2»9. (•) >I'MniIton V Tlolconib, 12 C. P. U. C. 38, ftffimMd In ftppeal, 2 E. & A. Rep«. 230, W Hiicrhes r. Smire, 22 (^. B. U. C. 697. (•) Metroiwlttaa Bauk v. Snuro, 10 C. P. U. 0. 24; Wood r. RoM, 8 C. P. U. 0. 2M SET OFF. 211 payable to A, or bearer, and by him transferred to the plaintiff, the executors could not set off an account due ta them by A, though the note was transferred by A after the testator's death, (a) Where, in an action by the indorsee, the holder of a promissory note against the maker and indorsers, under the statute, the defences clash, or the facts set up as a defence are not equally adapted as a defence to all the parties, they should plead separately. Therefore a plea by all the defendants that there was no consideration for the making of the note, nor for the respective indorie- ments, nor either of them, and that the plaintiff holds the note without any consideration or value, is bad. {b) (o) Smith V. Nic'iol^on. 19 Q, B. U. C. 27. (*) Uttwke V. Salt, 3 C. P. U. C. 97. 212 CHAPTEK XIV. OF CHEQUES. A. cheque is a written order upon a bank or banker for the payment of money. It may be made payable to a particular person, or to order, or to bearer, and is nego- tiable in the same manner as bills of exchange and promis- sory notes, (a) A cheque is in legal effect an inland bill "of exchange payable to bearer on demand (b) Though a cheque is, in the Province of New Bruns- wick, treated as an inland bill of exchange, the mere initialing ii by the cashier of the bank on which it is drawn will not amount to an acceptance within the statute in force in that Province, which is similar to the Statute, chap. 42 of the Con. Stats, of Ontario, section 7. (c) This statute provides that no a''ceptance of any bill of exchange shall be sufficient to bind or charge any person unless such acceptance is in writing on the bill. As a cheque is an inland bill of exchange it is subject to the provisions of the statute, and the acceptance of it must be by writing thereon. It has not yet been decided that the marking in the usual way, by the ledger-keeper of a bank on which the^ cheque is drawn is such a writing as will satisfy the provisions of the statute, ard render the bank liable to pay the cheque by virtue of an actual {a) Art. 2340 Civil Code Quebec. (») Keene v Board, 8 0. B. N. S. 372. (c - (e) Commercial Bk. v. Fleming, Stevens Dir. N. B. Reports, 9S ; S Rctim Critiqu* 242-8. CHEQUES. 213 acceptance thereof. The banker having sufficient funds of the drawer of a cheque is liable to the drawer for non-payment of it, if presented within banking hours. But the question is more important as between the holder of a cheque, not being the drawer, and the banker, whether a banker, having marked the cheque of his cus- tomer in the usual way, could afterwards decline to pay the holder, if payment were revoked by the drawer. It is sub- mitted that if the cheque is marked bonajide without any mistake or misapprehension, the bajiker will be liable to the holder whether the marking is an acceptance within the statute or not. Thus in the Province of Quebec it has been held that when a cheque is marked or certified the undertaking of the bank is not revocable, and the bank cannot be discharged without release or payment unless the marking were made under a mistake. The ordinary effect of a bank manager placing his initials on a cheque is to convey instruction to the ledger-keeper to debit the drawer with the amount, and to the paying- teller to pay it. Whether the initialing of a cheque by a bank manager amounts to an acceptance within the statute or not, it appears that if a cheque is fraudulently initialed as accepted by the manager of a bank, and the drawer has given in exchange to the manager certain securities which the bank retains, the cheque cannot be repudiated by the bank when it is in the hands of a bona jide holder for value, (a) From the relations between banker and customer it is clear that the banker is under no obligation to pay the payee of a cheque until he has in some way bound himself to do so. (6) Until then the debt remains between him and his customer, and on non-payment of the cheque the latter is the proper party to sue for damages. But the •marking of cheques in the usual way answers all pur- <«) CHy Bank t. Bank of Montreal, 17 L. C. J. 107. (h) Malcolm v. Scott, h Exch. 610: 2t4 LAW or BILLS AMD NOTEH. poses in the majority of cases, for the banker will not mark the cheque unless there are sufficient funds to the drawer's credit. Imihediately on the cheque being marked the drawer is charged with the amount, and as between him and the banker, the cheque is treated as paid. There is this difference between the drawee of a bill and a banker on whom a cheque is drawn, that the former is not in general liable until acceptance, but a banker having in his hands effects of his customer, is an exception to this rule. He is bound within a reasonable time after he has received the money to pay his cus- tomers' cheques, and is liable to an action at the suit of his customer if he neglect to do so. (a) And on liable to this action though the cheque has not been accepted as required by the statute, provided, of course, he has suffi- cient funds. And if a bank refuse to pay a cheque when they have sufficient funds of the drawer for the purpose, the holder can compel payment in equity. For the purpose of deter- mining the liability of the bank in this respect the actual state of the account must be looked to, and if by mistake there is sufficient funds entered at the drawer's credit in the bank-ledger at the time of the cheque being presented, this will not make the bank liable if, in fact, they have not sufficient funds. The mistake in the entries, though made by the clerks in the bank, will not prejudice them. (6) "When a note or bill of a customer, discounted by the bank, falls due, and is unpaid, and the bankers are the legal holders thereof, they are entitled to apply any balance which the customer has to his credit, to the payment of the discounted bill or note; and if such appropriation exhausts the funds which the customer has to his credit, the bankers will not be liable to an* (a) Marzetti v. Williamii, 1 B. & Ad. 416; Bollin t. Stowwd, 14 C. B. 695. (b) Gor« Bank t. UoyM Can. Bk., 13 Grnnt, 425. CHEQUES. 2lj^ action, at the suit of their customer, for aflerwardg dishonoring hia cheque, (a) Nor will tliey be liable to such action, if the drawer's assets have been exhausted by the payment of bills accepted by him, payable at the bankers, and it is not necessary for the bankers to show any special authority^ or any further order than that contained in such accept- ance, to enable them to pay the amounts due upon the bills. (6) A cheque in this country may he post dated, though in England, it is prohibited by the stamp act. Where a cheque is payable on demand, no days of grace are allowed. The want of due presentment, or of notice of dishonor, to the drawer, is of no consequence, unless when the banker on whom it is drawn has become insolvent, (c) And as between the payee and drawer of a cheque, the f )rmer miy present it at any time within six years, hut if the cheque is not presented in due time, and the banker fail, the payee of the cheque must bear the los8.(^ As a matter of expediency, therefore, a cheque should be presented w^ithin a reasonable time, which is gene- rally considered to mean within banking hours, of the day after it is received, (e) The holder of a cheque, is not bound to present it for acceptance apart from payment, nevertheless, if it be accepted, he has a direct action against the bank or banker, without prejudice to his claim against the drawer, either upon the cheque or for the debt on account of which it was received. (/) In the Province of Quebec, if the cheque be not pre- sented for payment within a reasonable time, and the (a) Jones T. Bank of Montreal. 29 Q. B. U. C. '.^ (ft) Kymer t. Laurie, 18 L J. Q. B. tl8. (c) Vi ood V. Stephenson, 16 Q. B. U. C. 410. (rf) Alexander v. BurchHeld, 7 M. & G. 1067 ; Serle t. Norton, S II. & Rob. 401. {r) B. Andrews, 7 Bing. 217; Tindall v. Bell, 11 M. & W. 228; Ronneberg r. F^klanif I. Co.. 10 L. T. N. S. 630. ■ 15 226 LAW OF BILLS AND NOTES. who is compelled by an actioa to pay it, may have a «laim upon the drawer for all the expenses of the action, (a) But an . accommodation acceptor has no right to charge the party accommodated with the costs of an action to which the accommodation acceptor had evidently no defence. (6) Although under the statute, the several parties to the note may be sued in a joint action, yet each must succeed or fail upon any issue of law or fact applying to his own case, in the same manner as if he were separately sued. Where in assumpsit against the maker and indorsers of a promissory note, undei' the statute, the plaintiff averred that the payee duly indorsed the note to the plalntift', but the indorsement was not stated to have been made at a certain time, nor was the word " after- wards" used as given in the form in the statute, the declaration was held insufficient, (c) When the several parties to any bill or note are sued in one action under the statute, their rights and r«»«pon- sibilities as between each other, remain the same as though the Act had not been passed, saving only the rights of the plaintiff, so far as they may have en determined by the judgment, (d) In such case a joint judgment against them has not the effect of an ordinary judgment against joint con- tractors, but the rights of the plaintiff in respect of the several parties stand on the same ground as if he had recovered a several judgment against each. If, for instance, the drawer and accommodation acceptor of a bill are sued in one action, and a joint judgment obtained against them, a release by the plaintiff of the (o) Ex parte Marshall, 1 Atk. 862 ; Garnirt r. Cottrell, 10 Q. D. V19. (b) Roach V. Thompson, M. & M. 487 ; Beech v. Juuei ( C. B. (iOO ; Byle >th Ed. 808. (e) Grant v Eyre, 2 Q. B. U. C. 486. (d) Con. Stat. Ont, chap. 42, 8. 26. ACTIONS ON BILLS AND NOTES. 227 acceptor will not discharge the drawer, though it would do 80 if they stood in the position of ordinary debtors? ugainst whom a joint judgment has been obtained, (a) When the several parties to a bill or note are sued in one action utider the Con. Stats. Out. chap. 42, s. 25, judgment ma}' be rendered against some one or more of the defendants, and also in favour of some one or more of the defendants against the plaintiff, according as the rights and liabilities of the respective parties may appear, either upon confession, default, by plead- ing, or on trial ; and when judgment is rendered in favor of any defendant, he shall recover costs against the plaintiff in the same manner as though judgment had been rendered for all the defendants. This statute does not apply to joint makers of a note, who may be sued together independently of the provi- sions of the Act ; and when such joint makers are sued together in one action, if the plaintiff" fails iu proving a caEe against one he will fail as to all. A case must be established as against all the parties sued on a joint contract, (b) When several defendants are included in one process, under the Act, and any of them cannot be served there- with by reason of absence from or concealment within Ontario, then the action may proceed as against the other defendant or defendants, without prejudice, and the plaiutifF may afterwards sue the defendant separately who has not been served with process, and may recover costs as if the Act had not been passed, (c) In case an action be brought against more than one defendant under the Act, who must otherwise have been sued separately, and it happens that any defendant dies pending the suit, an action may nevertheless be ;«) Hamilton v. Holcomb, 13 C. P. U. C. 88 ; affirmed In appml, ^E k A. S«pfl. 88 6) Sifton V. McCabe, 6 Q. B. U.C. 89«. e) Cob. btat. Unt., c. 42, a. 29. 228 LAW OF BILLS AND NOTES. brought ao^ainst the executors or administrators of such deceased defendant, (a) The statute further provides that in case several suits be brouglit on one bond, recognizance or other instru- ment, against the difierent parties to the same, or on one promissory note or bill of exchange, or against the maker, drawer, acceptor, or indorser of such note or bill, respectively, there shall be collected or received from the defendant the costs taxed in one suit only, at the election of the plaintiii'; and in the other suits the actual disbursements only shall be collected or received from the defendant ; but this provision shall not extend to any interlocutory costs in any such suits, (b) This section does not apply where one of the parties to the note, who is not sued with the others, is at the commencement of the suit out ol the jurisdiction of the court, (r) A note made in this country, payable in the United States in American currency, may be sued on here when all the parties reside in this country, {d) In an action on a note made payable in the United States, for so many dollars, it is not necessary to prove the value of the dt)llars and cents in the States, as we have a corresponding currency, and no par value for the American currency is fixed by law. (e) The payee of two promissory notes for X25 each having absconded, is not thereby disabled from suing the maker upon them on his return to the Province, because in his absence an attachment had been taken out against him by A B a creditor for £-21.0) (a) Con. St«». Ont., c. 42. a. 28. («)Ib.«.S6. («) Bank U. N. A. v Elliott, « U. C. L. J. 18. (d) Greenwood v. Foloy. 22 C. K U. C. 362. (e) OriOn r. Jfudnon, 12 0. P. U. C. 430. if) UUttoiy T. Turn«y, 7 Q. B. U. C. STU. ACTIONS ON BILLS AND NOTES. 229 Though the holder of a note has proved f«>r the amount thereof, under a nequestration issued against liis debtor, the maker, in Glus^ow, under the " Scottish Bankrupt Act of 1856," he may, nevertheless, main- tain an action in this country against the maker of the note, if he carries on business here and in Scothunh, and the proof will be no bar to an action commenced durinffthe pendency of the bankruptcy proceedings aud before final discharge, (a) When fraud is pleaded to a note, it is necessary that the note should be produced in Court before the defence ean be gone into, and when the making of the note is not denied the plaintiff is not bound to produce it, unless notice to produce has been given him. (6) In the Province of Ontario, a defendant cannot be arrested on a bill or note, unless it amounts to, or exceeds one hundred dollars. But if the holder of a note by the affidavit of himself or of some other indi- vidual, shews to the satisfaction of a judge of eiiher of the Superior Courts ot Common Law, or the judge or acting judge of any County Court, that such holder has a cause of action agdnst the party liable on the note, to the amount of one hundred dollars or upwards, and also by affidavit shows such facts and circumstances as satisfy the judge that there is good and probable cause for believing that such person, unless he be forthwith apprehended, is about to quit Canada with the intent to defraud his creditors generally, or the said party in particular, the judge may order a writ ot capias to issue, to arrest the party liable on the note or bill. ((*) Tiie style and title of the court need not be inserted in the affidavit at the time it is made, but may be added at the time of suing out the process, and such style and title when so added, shall be for all purposes and !a) Rnbinson t. McKeand, 23 Q. B. U. C. S69. ») Bank uf Montreal v. Snyder, ID Q. B. U. C. 492. (e) Con But. Unt. c. 24, s. 4 ^ 6. 230 LAW OF BILLS AND NOTXS. in all proceedings, whether civ'' or criminal, taken and adjudged to have been part of the affidavit ab initio, (a) It is necessary that the style of the Court should be inserted in the affidavit at the time of suing out of the process. (6) In case the parties to the bill or note are designated therein by the initial letter or letters, or some contrac- tion of the Christian or first name or names, they may be designated in the same manner in the affidavit, (c) The affidavit on which the order for the capias is moved for must shew the amount for which the note is made, and that the note is payable, (d) and it must also state the default of the maker or acceptor, (e) The plaintiff need not state expressly that ho is the holder of the bill at the time of making the affidavit to hold to bail. (/) But the affidavit must shew that the note is overdue, either by directly stating the fact or by giving t'.e date of the note and the time it has to run. (g) If the holder bring concurrent actions against the acceptor, the drawer, and the indorsers, the Court will stay the proceedings in any one of those actions on pay- ment of the amount of the bill, and of the costs in that particular action, (A) and in Ontario, by rule No. 25 of the superior court, it is provided that in any action against an acceptor of a bill of exchange or the maker of a promissory note, the defendant shall be at liberty to stay proceedings on payment of the debt and costs ill that action only. It is stated by Mr. Justice Byles that when a bill is (a) Con. Stat Ont.. e. 24, ■ 6. (t) AUman v. Keiisel, 8 P R. U. 0. 110. («) Con. SUt. Ont., e. 42 h. 30. (d) Smith ▼. Sullivan. Taylor 49S. («) Rom t. Balfour, 6 O. S. 688. (/) Brett T. Smith, 1 P. R. U. C. 809. (g) Ravey v. Carman, 3 L. J. U. C. 204 ; Kom t. Hurd, 1 P. B. V. 0. IM; Diffett of RoDinson k Joseph, 1BV4. (A) BjlM 00 BUla,9th Ed. 889-400. ' ACTIONS ON BILLS AND NOTES. 231 dishonored the owner has his option to sue on the bill or on the consideration. That is to say if a merchant who has supplied a quantity of goods to a customer take a bill for the amount, he may, on the dishonor of the bill, sue for the amount of it or he may bring his • action for the price of the goods, which form the con- sideration for the bill. It is advisable, however, to sue on the bill — first, because it reduces the debt to a cer- tainty ; secondly, because less evidence is necessary ; thirdly, in an action on a bill proof of payment of the bill lies on the defendant, but in an action on the con- sideration only, if a defendant shew that a bill was given, plaintiff must prove that the bill wa3 not paid, (a) It is best, when possible, to join a count on the bill with a count on the consideration, and the plaintiff may take a verdict on both counts. (6) The following explanation of Re-exchange is taken from Byles on Bills : "Re-Exchange is the difference in the value of a bill occasioned by its being dishonored in a foreign country in which it was payable. The existence and amount of it depend on the rate of exchange between the two coun- tries. The theory of the traneactiou is this : A mer- chant in London indorses a bill for a certain number of Austrian florins, payable at a future day in Vienna. The holder is entitled to receive in Vienna, on the day the maturity of the bill, a certain number of Austrian florins. Suppose the bill to be dishonored. The holder is now, by the custom of merchants, entitled to imme- diate and specific redress, by his own act, in this way: lie is entitled, being in Vienna, then and there to raise the exact number of Austrian florins, by drawing and negotiating a cross bill, payable at sight, on his indorser in London, for as much English money as (a) BjlM on Bllli, 9th Ed. 402-8 ; Dlshop T. IUw«, S M. A Sel. 861. (») lb., RjrdM T. fillia, 8 C. & t>. 867. 232 LAW OF BILLS AND NOTES. • will purchase in Vienna tlie exact number ot AuRtrian florins, at the rate of exchange on the day of di honor, and to include in the amount of that bill the interest and necessary expenses of the transaction. Tliis cross- bill h called in French the reiraite. The amount for which it is drawn is called m low Latin ricatubium^ in Italian ncmhio, and in French and English re-ex- change. If the indorser pay the cross or re-exchange bill he has fulfilled his engairement of indemnity. If not, the holder of the original bill may sue him on it, and will be entitled to recover in that action the amount of the retraiie or cross bill, with the interest and expenses thereon. The amount of the verdict will then be an exact indemiiity for the non-payment of the Austrian florins, in Vienna on the day of the maturity of the original bill. According to English practice the retraife or re-ex- change bill is now seldom drawn, but the right of the holder to draw it is settled by the law-merchant of all nations, and it is, only by a reference to this supposed bill that the re-exchange, in other words, the true damage in an action on the original bill, can be scien- tifically understood and computed. It is plain that whether the indorser crain or lose by the re-exchange depends (except in so far as relates to the expenses) on the rate of exchange betw^een the two countries. If the value of the Austrian florin, measured in pounds sterling, has risen, the holder will be entitled to recover more than the original amount of the bill in English money, (a) But if the value of the Austrian florin has declined, then the indorser may not be liable to repay as much English money as tie bill was origiua.ly drawn for, So it is sufficient to allege that the note was made without expressly alleging that it was signed, {(t) A declaration on a note need not allege that the note was given for value received, as the fact of such value being received is a matter of proof, (e) In an action against the maker and indorser of a pro- missory nate the plaintiff declared according to the form given by the Con. Stats. Oat., chap. 42, s. 31, but did not aver presentment to the maker and notice to the indorser. The Court held on demurrer by both defendants, on that ground that by reason of s. 25 of the statute (which pro- vides that judgment may be rendered for the plaintiff against some one or mor« of the defendants, and also in favor of some one or more of the defendants against the (•) Malr V JoneB, 7 Q. B. U. C. 139. (») Bink U C. V. Owvnno, 7 Q. B. U. C. 140. 4e) Andrews r. Talbot. 13 Q. B. U. C. lU. U) tiuliit V. Shaw. 7 L. C. J. 47. (e) WJiiliiey v. Burk*. 4 L. C. J. 308. PLKADIXa AND EVIDEN'CK. 237 plaiiitifT, according as the rights and liabilities of the respective parties may appear), the plaintiff was entitled to judgment against the maker, and that the iudorser was entitled to judginent against him. (a) A bill was specially indorsed to a firm composed of three partners. After the note became due, and before action, one of the partners died and the action was brought by the survivors, but the declaration stated that the indoriemetit was made to the two surviving partners. This defect was allowed to be amended under the Act, 7 \Vm. 4, c. 14, s. 7, of the Province of New Brunswick, {b) In declaring upon a note made payable to and indorsed by a firm, it is necessary to aver that the maker of the note promised to pay " to certain persons using the name and style of," and then to aver that the said persons so using the name and style did, by such name and style* &c., endorse the note, (c) In an action by the payees against the maker of a promissory note payable to A B C & D, the declaration alleged that the defendant promised to pay the plaiutifis by the name, style and firm of A B C &; D. The words, " name, style and firm," were not in the note. The Court held that it was not necessary to prove that the plaintifi*s were partners, and that the words " name, style and firm" might be struck out of the declaration, {d) A verbal agreement entered into at the time of making a note cannot be relied upon, or given in evidence to vary its terms, (e) . This is in accordance with a well-established rule of evidence, that verbal testimony cannot be relied on to control written documents. The rule is the same in regard to bills and notes as in other cases. Thus, where (a) Small v. Rogers, 6 O. 8. 476. h) Tarratt t. W.Imot, 1 Allen 353. (e) Molfat V. Vance, 7 Q B U. C. 14t. id) Allen V McNauKhtuD, 4 Allen 234. (•) Moure r. buUivau, 21 Q. B. U. C. 44*. 238 LAW OP BILLS AND NOTES. a party indorses a note in the usual manner he cannot afterwards adduce parol evidence to show that he was not to be liable on his indorsement, inasmuch as such evidence cannot be given to contradict or vary a contemporaneous written document (a) ^ Parol evidence cannot, in the absence of fraud, be received to shew that a bill of exchange, accepted pay- able three days after sight, is not to be paid until a further time has elapsed. (6) Where a man draws a bill of exchange to pay a debt, he cannot set up as a defence to an action brought by the indorsee, that the bill was given upon a prior verbal understanding between himself and the indorsee, that the drawees would not pay unless they chose, and that in that event he was not to be liable as drawer, (c) The maker of a note cannot be allowed to prove that before the note was made, or at the time it was made, a parol agreement was made by the holder to renew the note on being paid half the amount due on the note, {d) Parol evidence is admissible to deny the receipt of value for a bill or note, but not to vary the engagement to pay the amount at the time specified, (e) In an action by the payee against the maker, a promis- tsory note is admissible in evidence under the common money counts, although it is in the body of it made pay- able at a particular place ; the right of recovery, however, is suspended until presentment be made at the place, on or after the time of payment. (/) When the maker of the note has induced the plaintiff to purchase it, and promised that if purchased by the plaintiff he will pay it, and has, before trial, admitted hi8 (•) Chamborlin t. Ball, 11 L. C. R. 60. (») Bradbury v. Oliver. 6 O. 8. 70S. (c) Adams r. Thomas, 7 Q. B. U. C. 2u9. (i) Hayes t. Davis. C Q. R. U. G. 896. (•) Da»i8 V. McShenry, 7 Q. B. U. C. 490. if) Merritt v. Woods. Beiton, 201. PLEADING AND EVIDENCE. 239 signature, it is not necessary to call a subscribing witness to the note to prove the signature, (a) In case the several parties to a note are sued in on« Action under the statute, any defendant shall be entitled to the testimony of any co-defendant as a witness, in case the defendant or defendants calling the witness would have been entitled to his testimony had such co-defendant not been a party to the suit or individually named in the Record. (6) In the Province of Ontario, no person offered as a wit- ness is excluded by reason of incapacity, from crime or interest, from giving evidence, either in person or by deposition, according to the practice of the Court, on the trial of any issue joined, or of any matter in question, or on any enquiry arising in any civil suit, action, or pro- ceeding in any Court, or before any judge, jury, coroner, magistrate, officer, or person having by law or by con- sent of parties, authority to hear, receive, and examine evidence, (c) Section 4 of this statute further provides that on tht trial of any issue joined, or of apy matter or question, or on any enquiry arising in any civil suit, action or proceed- ing, the parties thereto and the persons in whose behalf any such suit, action or proceeding may be brought or defended, shall be competent and compellable to give evidence either viva voce or by deposition according to the practice of the court on behalf of themselves, or of any or either of the parties, to such suit, action or other proceeding. It has been held that the indorser of a note is not a competent witness for the maker, {d) But under the statute already referred to in Ontario it (a) Perry v. Lawlera. 6 Q. B. U. C. 614. -- (ft) Con. SUt. Ont. c. 42, 8. 27. (c) Ont. 33 Vic. C. 13, 8. 2. (d) Bank U. C. r. Upton, 10 C, P. U. C. 465 ; Moffatt v. Robtrteon, 19 Q. B. U. C. 401. 240 LAW OF BILLS AND NOTES. is apprehended there is nothing to disqualify the indorser from giving evidence for the maker of the note. In a joint action against the maker and indorser of a note, the maker having suffered judgment by default, is admissible as a witness under the Con. Stat. Ont. ch. 42, against the indorsers in the same manner as if the parties had been sued in separate actions, (a) (a) M«Lur«n r. MuirhMd, t Q. B. U. C. 6». \\- J ., ■'■"- '. mt Il^DEX AcCKPTANCB, presumption as to time of making, 107. ' Absolute and qualified, 107-8. Cancellation of, 109-10-11. When general and qualified, 96-7. , By agents, 24-5. What it is and how made, 105-6. ■ By writing on bill, 106. By whom made, 106-7. . Different kinds of, 107-8-9. Agreement rendering it conditional, 109. Delivery and cancellation of, 109-10. . • What it admits, 24-110. Discharge of acceptor. 111. Supra protest, 111-12. Admission when bill drawn by agent, 24-5. After period at which note is payable, 107. ' Absolute and conditional, 107-8. Acceptor, cannot be two, but must be one, 5. For honor is a surety, 125-6. Undertaking of acceptor for honor, 73-4. ' ' • " Aqcommodation, notes, 38-9. Paid by maker at maturity, 67. » : Accord and satisfaction, 87-8-9. - ? , Agknt, power ■< of, 21-2-3-4 5-6 (soe principal and agent). Transferring or taking overdue note, 66. Party acting as, undertakes that he has authority, 25. When agent personally liable, 26-7-8. ' Power to bind principal by notf, 34. May gire up bill on receipt of cheque for amount, 76. . . Action, when it may be brought, 78-9. Who may bring, 12-13. Actions ou bills and notes, 223. H«»ldor nt time of action brought, 223. Who can sue on note, 223-4. All parties may be included in one action, 224, But otherwise, if party liable in more than one capacity, 224-5. Coats, when an action may be brought for, 225-6. When several parties are sued, rigiita as between each other, 226-7, Judgment in such case, 226-7. Joint makers, action against, 227. Action may proceed against one when others absent, 227. And against executors of deceased defendant, 227-8. 16 242 INDEX. Actions, costs in ease of several, 228. Note payable in United States, 228. When note must b« produced in court, 229. Arrest of defendant on note, 229-230. Staying proceedings in case of several actions, 230-1 . Holder may either sue on bill or on consideration, 230-1. He-exchange, 231-232 AoBKRHBNT as to bills and notes, 15. Made at time of signing or afterwards, 15. Between parties that one shall not draw bills, 29-30. Not to hold indorser liable, 56. Rendering acceptance conditional, 109. ■ Alteration of bills and notes, 158. Under stamp, laws, 158-9. Before issue of bill, 159-160. In pursuance of original intention of parties, 159-160. To correct a mistake, 159-160. As regards holder for value, 160-1. In place of payment, 161. When it extinguishes the debt, 162-3. Accommodation bill and bill given for value, 159. • Wbat alterations avoid note, 159-160-1-2. Where alteration is not apparent, 160-1. Burden of proving alteration, 162. Appropriation of payments, 82-3. AuRBST of party liable on note, 229-230. When a writ of capias may be issued, 229-230. On day note falls due, 79. AssiQNABLB properties of bills and notvs, 13-14. How they differ from other contracts, 13-14. Attornbt taking note from client, 50. One partner in firm of, has no authority to indorse, 69. Banebr and customer (see cheques). , - -.^ - Bank Notb, defined, 2. Bankruptot or Insolvency, presentment of note in case of, 103. Banes, what rate of interest they may charge, 170-1. Charges for collecting notes, 1 73-4. Bbarer, title of person taking bill payable to, 61. Bona-fide payment to, discharges person paying, 73. Bet, note given for, 48-9. BiIiIi of Exchanob, defined, 1. Unconditional order, 4. Must b'! in writing, not under seal, 5. Cannc* be two acceptors of, 5. Must be for payment of momey absolutely, 6. And in specie, 6-7. Cannot be payable out of particular fuHd, 9. Difference between and other contracts, 13-14. Transfer of when overdue, 63-4-5-6. Blank, indorsements in, 63. Signing or indorsing notes in, Cl-2. Acceptance signed in, 107 BoNA-riDB holder of note, rights of, 66-7. Buildino Sooiitt, powers of, 36. INDEX. 243 '■'■•'■ Cahcrllation of Indorser'g name, » ' ' Raises inference of payment, 82. ' • ■ Of acceptance, 109-110. Certain Sum, note or bill must be for, 7-8. CHHQaE, defined, 2-212. Days of grace not allowed on, 77. Acceptance of within statute, 212-13. Banker not liable to payee until acceptance, 213. Banker liable to drawer without acceptance, 214. Liability of banker for non-payment of, 214-15. Presentment of, 215-16-1 7, Post-dating and ante-dating, 215-18. When presentment immaterial, 217-18, Insolvency or death of drawer, 218-19. Increase or alteration of sum for which drawn, 219 . For what sum it may be drawn, 220. Executors, married women, and corporations, 220- . Signature of drawer, 220. Banker disclosing customer's account, 221. Legal relation between banker and customer, 222. Chosb in action, 13-14. Clirnt giving note to attorney, 50. Conditional, note or bill must not be, 8-9. Indorsement of bill or note, 59. Consideration, presumed for note, 37. Must be for bills and notes, 38-9-40. What is, 43-4-5. Illegal considerations, 47-8. Failure of, 40-1. As between original parties, must be absence or total failure, 40 . Party taking accommodation note for value, may recover, 38-9. But party taking must pay value, 41. Note placed in holders' hands to be taken care of, 41. Bill obtained by fraud, i2. Contract of drawer, conditional, 4. Of acceptor, absolute, 4. . , ^ . Of indorser, conditional, 4. ^:^ ^ . Words of necessary, 10. Contbmpobanbous memorandum, 15. *• Contribution between joint debtors, 17-18. . ; , Between sureties, 124-5. See principal and surety. Corporation, powers as to bills and notes, 35-6. What interest they may charge, 175-6. CuBUBNOY, in which note payable, 81-2. " ', Dauages, rate of, on protested bills in different Provinces, 176-7-8-9-180, Statute of Ontario, only gives on non-payment, 180. [181-2. Negotiation of bills as to, 181. Rate of regulated by-law of place where contract made, 182, Date of note, 15-16. Days, what are non-juridical, 78. Days of grace, 15-77. On note payable by instalments, 15. On what instruments allowed, 77. 24!4! INDEX. Days of Graob, when last day of is a holiday, 77-8. DiLivBRY, necessary to complete indorsemeut, 54. Liability of transftiror bv, 59-60-1. Of note on payment, 76-7. t Dkmand, paying not») payable on, 75, Note payable on 81. Of payment, 99-100. Note id payable on, when no time specified, 81. When acceptance is payable on, 107. Drcnkbn Pkrsons, notes by, 20-1. ^ EQUiTi'is, attaching to overdue note, 63-4-5-G. EVIDBNCB, 237. Vi rbal agreement made when note signed is inadmissiblt, , 237-8. Parol evidence when admissible, 238. When unnecessary to call subscribing witness, 238. WUen one defen'tant entitled to tostimony of co-defenda it, 239. Interent not a disqialiticatioa, 239-40. I ndorser a witness for maker, 23'J-40. ExKCurioN on bills aud notes, 16 ishuing against one party dous not disoharge others, 89. ExECarotia and administrators, notes by, 28-9. When they are personnUy liable, 28-9. Dtl>tor constituted such, 29. , Rights and liabilities of, 34-5. laiorsement and presentment to, 35. Indorsement and transfer by, 69-70. EXTINQUISHMSNT of debt. By creditor co'istituting d'ibtor, executor, 29. By recovery of judgment, 89-90. FiCTiTioDS person may be payee of note, 10. Whethernote negotiable in such case, 52-3. ' FiNDKR of lost note or bill, 73. FoHGBRY, defined, 163. Writing name of existing person, 163. • Signing fictitious name, 164. Alteration by addition or subtraction is, 164-5. Alteration after negotiation of note, 164-5. Payment to bona fide holder of forged note, 165-6. ' Recovery of money paid on forged note, 166. ' ■ Transferor by delivery warrants that bill not forged, 60-1. Form of note or bill, 9. Words of «contrart, 10. Fraud, how far defei.ce, 42. What is, 45-6-7. On proof by defendant, plaintiff must prove value, 42. Contract must be repudiated when fraud discovered, 45. How it may be waived, 47. Gaming, contracts, 48-9-50. Gdarantbb, what is, 70. Can only be in writing, 120. Holder, defined, 2. Who is, 12-13. INDEX. • ^ 245 Holiday, last day of grace falling on, 17, What iH, 78. ' .y Idiots and inRane persons, notes by, 20. ItiiBQAL considerations, 47-8-9-50-1. » At common law, 47-8. By statute, 48. Gaming, bets and wagers, 48-9-50. Indemnity, note made as, 15. Imdoksemknt. In full, in blank, or special, 53-4. May be written on face of bill, 54. Not complete without delivery, 54. Restrictive indorsemfnts, 58. May be compelled, 57. In breach of trust, 57-8. On condition, 59. In blank, 61-2. Admit genuineness of signatures, 68-9. , Of note payable to A or order, 71. ' Order of siv^natures by, 126-7-8-9. Of bill not negotiable, 54-5. Of note payable to bearer, 55. Striking out indorsementfl, 56-7. For part of sum due on note, 68. Indorsbu, rights and liabilities of, 54-5-6-68-9. To whom bill is reindorsed, 57. ' ' ' To whom bill is indorsed for particular purpose, 57-8. Undertaking of, 68-9. Liable according to the order of the names on the bill, 1 26 7-8. Infant cannot bind himself by bill or note, 19. May be agent for others, 20. Innocbnt indorsee for value, rights of, 57. iNsoiiVB.NCY renders note immediately exigible, 80. No excuse for neglect to present for payment, 103. Insolvent debtor giving note as preference, 46. ' Instalments, note payable bv, 15. Days of grace in case of, 15. Interest, from date of note, 167. From maturity of note, 167-174. Note payable on demand, 167. When part of debt, 167. Same rate of interest after maturity as before, 168-9. What rate banks may charge after and before maturity, 170-1-173. What rate of, jury can give, 171. Laws of different Provinces as to, 171-2-3. On verdicts, 174-5. Proper mode of computing, 175. What rate corporations may charge, 175-6. I.e. U., what it is, 11. Does £!ot require stamp, 204. Joint and several notes, 16-17. Partnership note ie joint only, 16. JcnaMBNT, effect of recoveting against different parties, i9-90. 246 ' INDEX. JcDaMENT is extinguishment of debt on bill, 89. .Against one joint maker, 90, Liabilities of Indorser, 64-5-6. Limitations, statute of, 81, . ' . v ; i'. On note payable on demand, 81. bee Statute of Limitations. '. Lost bill or note, proceedings on, 83-4-5. ' LoTTBKY ticket, note given for, 49. ; Mark, note may bo signed by, 6. Makbied Wombn, bill or note by, 19-20. May be agent for others, 20. MATuniTY of notes, 79-80, Payment at by person primarily liable, 67-8. At and before, 67-8. Of notes when payable at month from datii, 79-80. At certain number of days after date, 79-80. MKifouANDDM on note, 15. Mrnaobs and threats, note obtained by, 46. Mbrgkr of remedy on bill, 91-2. By taking higher security, 91. Not where it is collateral, 92. MoNBY, note or bill must be for payment of, 6. , Absolutely and iu specie, 6-7. Month, notes payable at a, from date, 79-80. McNiciPAL Corporation, 36. Negotiable, what notes are, 52-3-4-5-71. Notice, necessary on assignment of chose in action, 14. Otherwise in case of bills and notes, 14. To one partner, is notice to all, 34. Notice of dishonor, if payment or acceptance refused, 72-130. Form and essentials of 130-1-2-3-4. Mistake or inaccuracy in, 131-2. Shewing holder of note, 133-4. Who may give, 134-5. To whom given, 135-6. To partners, executors, assignees, &c., 135-6. Time of giving 136-7-9-140. C ■ ■; '■ How given or served, 138-141-2. Of foreign bill, 140-1. . a^. Given by post, 142. Left at residence or place of business, 142. .... : Protest is evidence of, 142-3-4-5-147. ■-. •' Proof of sending, 145-6. In the Province of Quebec, 146-7. May be sent to place where note is dated, 147-8-9. Sent by letter not properly addressed, 149 150. How addressed, 150. To what place sent, 151-2. Dated on Sunday, 152. How dispensed with or excused, 152-3-4. Waived by subsequent promise to pay, 154-5-6. Noting, for non-acceptance, 156-7 . Ordir of person, note payable to, 9. « t INDEX. 24-7 Obdsr, to maker's own, 9-10. When bill payable to, it is transferable by Indorsement, 52. Bight to transfer vested in person to whoee order note is made, 70. Effect of indorsing note payable to indorser's order, 71. OviRDDB note, rights of transferee of, 63-4-ri-G. Indorsee of, only subject to equity attaching to bill itself, 64. Agreement restraining negotiability, 65. Payment is one of the equities, 66. PABTiotTLAR fund, Hote or bill payable out of, 9. Pabtnirs, rights and powers of, as to bills and notes, 29-30-1-2-3-4. Indorsing notes, 69. Agreement that neither shall indorse notes, 29-30. Survivorship between, 34-5. Patbb, uncertainty as to, 10. Fictitious person, 10. Paymbnt, is an equity attaching to overdue bill, 66. At and before maturity, 67-8. When to be made, 72. To true holder, 72-3. Of notes payable to bearer, 73. By person not primarily liable, 73-4. Before maturity, 74-5. Evidence of payment, 76. Of note payable on demand, 75. What amounts to, 75-6, 83-4-5-6. When note to be paid, 77-8-9-80. In what currency to be made, 81-2. PBBSONAii liability of agent, 26-7-8. Payments, appropriation of, 82-3. Plbadino, in actions on bills and notes, 234. Not necessary to declare specially for damages and interest, 234. Plea in abatement by joint maker, 234. Plea that plaintiff, not the holder, 235. Averment of joint liability, or promise to pay, 236. Initial letters and one christian name, 235-236. Allegation of signature, or value received, 236. Judgment may he rendered as rights appear, 237. Averment that persons by name, style, and firm, indorsed, 237. Amendment, 237. Plkdging of bills or notes, 61. Prbbkntment for acceptance. " In case of bills payable after sight, 93-4. •• - ■ -v How made, and how excused, 94. ., Bills payable after date, 95. ' ~ , ■^ - Pbisbntmknt for payment. Personal demand not necessary, 95-103. Where bill payable afte*- sight, 96. . r^ How made when payable at stated place, 96-7-8-9-100. To charge parties secondarily liable, 98-9-100. Consequences of want of presentment, 101. At what place, 101-2. Before expiry of days of grace, 101. At what hour to be made, 102-3. In cas* of insolvency, 103. 248 INDEX. Prkbentmbnt, excuses for non-preRcntment, 103-4-5. in tlib Province of Quubt-c, 96 Acceptor or maker liable without presentmoQt, 98-9. But it is required to chr-rge indorser, 88-9. Principal and ageut, 21-2-3-4-5-6. Autiiority of agent, ceases on acceptance, 35. PRiNCiPAii and surety, 114. Discharge to prior and subsequent parties, 115-G. Giving time to principal, discharges surety, 117-8-9. Collateral security, 118-120. Knovrledgeof suretyship at time of taking bill, 119. i Taking new bill discharges surety, 120-1. Covenant not to sue, 121. Consent and ratification by surety, 122. , Joint makers or acceptors, 122-3-4. . Contribution between sureties, 124-5. Acceptor for honor, J 25-6 Prior indorser is surety for subsequent one, 126-7-8. Promisi to pay necessary in note, 11. Pbomissobt note defined, 2. Must be for payment of money absolutely and in specie, 6-77. And for sum certain, 7-8. Must not be conditional or payable on contingency, 89. Payable to order of person, 9. To maker himself, 9-10. Payable to bearer, 10. Promise to pay, 11. Joint and several, 16-17. Payable to bearer, circulate as money, 6\. Tran8f«'r of when overdue, 63-4. What negotiable, 71. Prote-st is evidence of giving notice of dishonor, 142-3-4, Without seal, 145. Of notary in United States, 145. ' Of foreign bill, 1 47. ■ * " ' How made in Quebec, 146-7. ' ,. When it may be made, 79. Rk-Ezohangb, defined and explained, 231-2-3. Kbnbwal of note, agreement for, 91. Bbsthiotivb indorsements, 58-9. Betirbmbmt of notes, 74. Sali of bill or note, 60-85-6. SATisrACTiON of debt on bill, 85-6. Accord and satisfaction, 87-8. What amounts to, 87-8-9-90-1. Sbal, instrument under, is not note, 5. SsT-oFr, not equity attaching to overdue note, 64. Statutes as to, 206. Law in Quebec, 206-7. May bring cross-action instead of pleading, 207. What debts may be set-ofif, 208-9. In insolvency cases, 209. When several defendants sued in joint action, 209-10 . INDKX. '2\'\) Skt-okk is oolliitiU'iil to uotc, 210/ * Wliijii iliit'oiiLiiit-f sli>alii i)loA;i .snjurato'ly, ail. Sni.VAruiihi i)f ncgi)tiabl