S. 59. a person who is agent for more than one party to a bill, or who is himself a party and agent for another party, there is no presumption as to the capacity in which he has paid.1 If a pay The debtor is under no obligation to accept a payment to account unless the bill is payable by instalments.2 ment to account is taken it is usual to mark the amount paid on the bill. The holder after taking partial payment may transfer the bill or recover the balance from any person against whom recourse has been preserved.4 • For the purpose of this section, bills payable on demand are due as soon as they are issued.5 As to other bills, see s. 14. d The holder of a bill is not necessarily the true owner of it. But if a bill is paid in due course, though to a holder who is not the true owner, the acceptor is discharged from all liability to the true owner, and, if the bill has come into the hands of the payee, the consideration between drawer and payee is also discharged. If, on the contrary, payment is made to a person who has no title either to enforce or to discharge the bill, the bill is not discharged, and unless the payment falls under the exception of section 60 or of section 80, the liabilities of all parties remain as if no payment had been made.10 A banker who has paid a bill on behalf of a customer to a person in possession of it under a forged indorsation, cannot debit the customer with the amount.11 The person to whom payment is made, unless a banker protected by section 82, is liable to the true owner for the amount received by him, though he has in good faith given value for the bill, and also though he has in 1 Stiells v. Holmes, 1868, 6 M. 2 Ersk. iii. 4, 1; Bell's Prin. 556. 4 Thomson, 262; Bartsch v. Poole 5 George, 1890, 44 Ch.D. 627; Edwards v. Walters, [1896], 2 Ch. 6 Ss. 2, n.h, 79, n.b. 7 S. 38 (3); Byles, 297. 8 See Charles v. Blackwell, 1877, 2 C.P.D. 151. 9 See ss. 24 and 64. 10 S. 24; Byles, 298. 11 Robarts v. Tucker, 1851, 16 Q.B. 560, 20 L.J. Q.B. 270. receiving payment acted merely as an agent.1 In the case S. 59. of Clydesdale Bank v. Royal Bank2 the facts were, that was ех 3 immunity of the Royal Bank as agent appears to have de pended on S. 59. quently recovered from Paul on the ground that the forgery had been committed by his agent so as to benefit him.1 In the case of the London and River Plate Bank v. Bank of Liverpool 2 it was held that the pursuers having paid a draft by their branch in Monto Video upon their London office to the defenders, who received the money in good faith, were not entitled to recover the amount from the defenders on discovering shortly afterwards that the draft had been held by them under a forged indorsement. This decision does not appear to be consistent with those cited above,3 and further, it does not follow from the cases cited in support of it. In Price v. Neal the drawee of a bill which was not payable to the drawer's order, was found not to be entitled, on discovering that the drawer's name had been forged, to recover from an indorsee to whom he had made payment.5 In Cocks v. Masterman a banker who had paid a bill the acceptance of which was forged in name of his customer, was found not entitled to recover from the payee. In that case it was said, "that the holder of a bill is entitled to know, on the day when it becomes due, whether it is an honoured or dishonoured bill, and that, if he receive the money, and is suffered to retain it during the whole of that day, the parties who paid it cannot recover it back." But the person to whom in these cases payment was made, was holder of the bill. The rule cited from Cocks v. Masterman does not appear to be applicable when payment has been made to a person who has no right to the bill. "The rule laid down in Cocks v. Masterman, and recently reasserted in even wider language by Matthew, J., in London and River Plate Bank v. Bank of Liverpool, has reference to negotiable instruments on the dishonour of which notice has to be given to some one, namely, to some drawer or indorser, who would be discharged from liability unless such notice were given in proper time. . . . Assuming 1 Clydesdale Bank v. Paul, 1877, 4 R. 626. 2 [1896], 1 Q.B. 7. See in particular Bobbett v. Pinkett, 1876, 1 Ex.D. 368, per 4 1762, 3 Burr. 1355. 5 See s. 54 (2a). 6 1829, 9 B. & C. 902. it to be as stringent as is alleged in such cases as those above S. 59. described, their Lordships are not prepared to extend it to other cases where notice of the mistake is given in reasonable time, and no loss has been occasioned by the delay in giving it." 1 ." In the case of the Imperial Bank of Canada v. Bank of Hamilton1 the circumstances were, that a customer of the Bank of Hamilton drew a cheque on that bank for five dollars, and had it certified by the bank. He then altered the amount of the cheque to five hundred dollars, which was more than the amount of his account, and paid it in to another account, which he opened with the Imperial Bank of Canada. The Bank of Hamilton, after having paid the cheque in the ordinary course of business, was found entitled on discovering the fraud to recover four hundred and ninety-five dollars from the other bank. A party to a bill may by negligence bar himself from pleading against one who has in good faith paid it, or given value for it, to a person who has no title to it, that it has been forged or vitiated. Negligence to have this effect must arise in the bill transaction, must involve a breach of duty owed to the person misled, and must be the cause of his having been misled.2 The customer of a banker, if his conduct has given his banker reason to believe a forged instrument to be genuine, is thus bound to reimburse the sum paid by the banker thereunder.3 A customer may also be liable to his banker, or the drawer of a bill to the drawee, for sums paid owing to fraudulent alterations facilitated by the form in which he has drawn a cheque or bill; but the drawer or acceptor of a bill is not liable on this ground to the payee.5 4 Payment in due course may be made to an agent of the S. 59. holder who has authority to give up the bill, but not to one who is not in possession of the bill.2 S. 60. whereon indorsement is forged. • See s. 90. f See s. 29, n.h. g See s. 29, n.i. h See also sub-sec. (3). i Though he does not strike out these indorsements, subsequent indorsees have no recourse against the indorsers. between his two indorsements, for as regards him they are discharged, and no subsequent indorsee can be a holder in due course.3 As to bills negotiated back during their currency to prior parties, see s. 37. j See s. 28 n. a. с e 60. When a bill payable to ordera on demand is drawn on a banker, and the banker on whom it is Banker paying demand draft drawn pays the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority." a See s. 8 (4). b See s. 10. c See the definition of a cheque in section 73. A bill accepted payable at a bank by a customer is an authority to the banker to apply the customer's funds in payınent of it; but if the banker pays a person deriving his title through a forged signature, he is liable to his customer for the amount.* 1 S. 45 (3). 2 Mayer v. Hamilton, 1865, 3 M. 1066. 3 $. 29. 4 Kymer v. Laurie, 1849, 18 L J. Q.B. 218; Robarts v. Tucker, 1851 16 Q. B. 560, 20 L.J. Q.B. 270. |