England, to A. In Horne v. Rouquette the foreign holder S. 72. gave notice in accordance with the law of his country, but not with that of England, to B., by whom notice according to the law of England was given to A. In each case it was found that sufficient notice had been given to A. This sub-section is not readily applicable to the case of an indorser to whom notice of dishonour has been given.1 Apart from this sub-section the rule is that he must give notice according to the law of the place where he gives notice, which need not be either the place of drawing or that of presentment.2 If the section were held to be applicable to this case, it would apparently be necessary to construe the words "when the act is done" as applying in this case to the giving of notice. r The alteration of the expressed rate of exchange or the addition of a rate of exchange vitiates the bill.3 The stamp duty is calculated according to the current rate of exchange on the day of the date of the instrument.4 This rule holds good, though the time of payment be altered by exceptional legislation during the currency of the bill. During the Franco-German war the French Government prolonged the time for the payment of current bills. A French holder, after presenting at the postponed date, was found entitled to recover from an English indorser.5 Days of grace are allowed in the Colonies, but not in France, Germany, Sweden, or Spain, or in such of the United States of America as have adopted the Negotiable Instruments Law.8 1 See s. 49 (14). 2 Horne v. Rouquette, cit.; s. 97 (2). 3 Hirschfeld v. Smith, 1866, L.R. 1, C. P. 340; S. 64 ni. 4 54 and 55 Vict. c. 39, s. 6, p. 262, infra. 5 Rouquette v. Overmann, 1875, L.R. 10, Q. B. 525. 6 see n.a, supra. 7 French Commercial Code, 135; German Exchange Law, 33; Swedish Exchange Law, 31; Spanish Commercial Code, 455. 8 Negotiable Instruments Law, 145; cf. Kent's Com. iii. 100; Story on Bills, s. 333. S. 73. Cheque defined. PART III. CHEQUES ON A BANKER. a 73. A cheque is a bill of exchange drawn on a banker, payable on demand." Except as otherwise provided in this Part, the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque. a Coupons on colonial stock certificates are cheques under this Act, but not under the Stamp Acts.1 A draft by one branch of a bank upon another may be treated by the holder as a bill of exchange or as a promissory note, but the bank is not entitled to treat it as a bill or cheque.2 b See s. 2. c See s. 10. ◄ This part deals with (1) presentment for payment,3 (2) countermand, and (3) crossing.5 • Cheques are negotiable. A person who has written his name on the back of a cheque, may show that he did so non animo indorsandi, though this would not be relevant against a holder in due course.7 A cheque is negotiable though drawn for a sum less than one pound sterling. The enactment cited appears to be applicable to all cheques, whether payable to the drawer's order or to the order of another person or to bearer, but it is to be noted that section 19 of 23 and 1883, 10 R. 719, affd. 1883, 11 R. (H.L.) 1, L.R. 9 A.C. 95; Macdonald v. Union Bank, 1864, 2 M. 963; Keene v. Beard, 1860, C.B. N.S. 372, 29 L.J.C.P. 287; Semple v. Kyle, 1902, 4 F. 421. 7 Macdonald v. Union Bank, cit.; Keene v. Beard, cit. 8 8 and 9 Vict. c. 38, ss. 16 and 20, p. 253, infra; cf. s. 3, n.b No. 6. 24 Vict., c. 111, by which this was expressly provided, has S. 73. been repealed by the Bills of Exchange Act.1 Joint parties to a cheque are jointly and severally liable thereon as on a bill of exchange.2 This is the effect of the decision in the case of Henderson, Sons, and Co., Limited v. Wallace and Pennell,3 which apparently was treated as an action on the cheque in question. It may, however, be doubted if the action should have been so regarded. A cheque was drawn by A., B., and C. upon the National Bank blank in the name of the payee. It was paid by the bank to A. as an advance to A., B., and C., so that the bank was an accommodation party. At the date of the action the bank still held the cheque, and was still entitled to fill in the name of the payee. The question in the case, the circumstances of which were complicated, was, whether A., as one of the drawers of the cheque, was liable to the bank for the full amount of the cheque or for only a third thereof. Now, whatever name the bank might have been entitled to fill up, it had admittedly become holder after maturity of the cheque drawn upon it. Therefore it would appear that the cheque had been discharged, and that the bank had right of action against A., B., and C., not upon the cheque, but upon its right of relief as an accommodation party, in which action the defenders should have been entitled, as contended by them, to show what in point of fact was their liability to the bank.5 A cheque on presentation acts as an assignation, and is to be presumed to have been granted for value. At common law a cheque which was proved to have been granted for value was equivalent to an assignation, and under the Act a cheque is presumed to have been granted for value." A cheque is also a bill under the Stamp Act. The stamp duty of one penny may be denoted by an adhesive stamp. A cheque may be post-dated, but cannot be sued on till its date.8 As to summary diligence on cheques, see s. 98, p. 207, infra. 1 S. 96 and Schedule. 2 See s. 6, n.b. 81902, 5 F. 166. 4 S. 61. 5 See s. 28, n.c. 6 S. 53, n.b. 7 54 and 55 Vict. c. 39, ss. 32 and 34 (1), and Sch., p. 265, infra. 8 See ss. 13, n.o, 29, n.b. S. 73. S. 74. Presentment of cheque for payment. A cheque is certified by a duly authorised official of the bank on which it is drawn marking it with his initials to signify that the drawer has at his credit funds sufficient to meet it, and thereby adding to the credit of the drawer that of the bank.1 Marking by a banker “is similar to the accepting of a bill, for he admits hereby assets and makes himself liable to pay."2 In America cheques are certified by the word "certified," "good," or "accepted" being written or stamped thereon, with the signature of the person certifying; and the effect of certification at the instance of the holder is to discharge the drawer, and to make the bank the principal debtor.3 In this country “a cheque certified before delivery is subject, as regards its subsequent negotiation, to all the rules applicable to uncertified cheques." 4 a 74. Subject to the provisions of this Act- 1 Gaden v. Newfoundland Savings 2 Robson v. Bennett, 1810, 2 Taunt. 388, per Mansfield, C.J.; see also Macdonald v. Union Bank, 1864, 2 M. 963, per L.J.C. Inglis, 974; cf. Goodwin v. Robarts, 1875, L.R. 10, Ex. 337, per Cockburn, C.J., 351-2; Chalmers, 249-certification effectual only between banker and banker; see as to liability in Scotland of the drawee holding funds of the drawer, s. 53 (2). 3 Lawson, s. 531. Anderson v. Gill, 1894, 47 Am. St. Rep. 402; Cincinnati Oyster Co. v. National Lafayette Bank, 1894, 46 Am. St. Rep. 560. Gaden v. Newfoundland Savings Bank, cit., 285. (2.) In determining what is a reasonable time re- S. 74. gard shall be had to the nature of the instru ment, the usage of trade and of bankers, and C (3.) The holder of such cheque as to which such a See s. 2. b At common law the drawer of a cheque, if he suffered any damage through the holder's delay in presenting it, was absolutely discharged.1 But so long as he suffered no damage, he continued to be liable till the cheque prescribed.2 It is apparently implied by this sub-section that the latter rule should continue in force. If the holder of a cheque delays presenting it till after a reasonable time has elapsed, and the banker on whom it is drawn has become bankrupt in the interval, the drawer, if he has in the meantime withdrawn all his funds from the banker, suffers no loss; if he has withdrawn them to such an extent that the banker could not have paid the cheque in full, he suffers loss to the amount of his money in the banker's hands at the time of the failure; if he has sufficient funds in the banker's hands at the time of the failure to meet the cheque, he suffers loss to its full amount. In the first case he is liable to the holder in the amount of the cheque, and in the second in the difference between the sum in the banker's hands and the amount in the bill; in the third case, he is completely discharged. The holder may claim in the banker's sequestration for the amount which he has not recovered from the drawer.5 1 Alexander v. Burchfield, 1842, 7 M. & G. 1061; 11 L.J.C.P. 253 2 Robinson v. Hawksford, 1846, 9 Q.B. 52; 15 L.J. Q.B. 377; Laws v. Rand, 1857, 27 L.J.C. P. 76; Thom- 3 See s. 97 (2). |