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S. 46. accommodation party for the acceptor.1 "I take the rule to be that an indorser cannot be sued without notice of dishonour, unless it is shown that, if made liable, he would have no remedy against any other person." 2

S. 47.

g See s. 16 (2).

h For example, if the drawer or indorser induces the holder to defer presentment,3 or in the knowledge that the bill has not been duly presented asks for delay, or after it is due promises to pay it.5

47. (1.) A bill is dishonoured by non-payment Dishonour by (a) when it is duly presented for payment a and paynon-payment. ment is refused or cannot be obtained, or (b) when presentment is excused and the bill is overdue and unpaid.

(2.) Subject to the provisions of this Act," when a bill is dishonoured by non-payment an immediate right of recourse against the drawer and indorsers accrues to the holder.e

a See s. 45.

b See s. 46.

c See ss. 14 and 45 (2).

a That is to say, to the provisions restricting (1) the holder's right, and (2) the liability of prior parties.7

• The holder, to make his recourse effectual, must take the steps prescribed in ss. 48-51. He may proceed against parties liable by action or summary diligence.

1 Brown v. Kerr; Goldsmid v. M'Neil, Stewart, and Co.; Sleigh v. Sleigh, cit.

2 Per Brett, J. A., in Turner v. Samson, cit.

3 Cairns' Trs. v. Brown, 1836, 14 S. 999.

4 Cairns' Trs. v. Brown, cit.; Allhusen and Sons v. Mitchell and Co., 1870, 8 M. 600; Shepherd v. Reddie, 1870, 8 M. 619.

5 Kilby v. Rochussen, 1865, 18 C.B.

N.S. 357; Lundie v. Robertson,
1806, 7 East 231; Taylor v. Jones,
1809, 2 Camp. 105; see s. 50, ne
6 See s. 38.

7 S. 16-indorsement restricting
liability; s. 25-signature as agent;
s. 22-incapacity; s. 63-cancelled
signature; s. 64-alteration; s. 68
(7)-party who would have been
discharged by payment for honour.
8 See ss. 38 and 98.

honour and

48. Subject to the provisions of this Act,a when a S. 48. bill has been dishonoured by non-acceptance or by non- Notice of dispayment, notice of dishonour must be given to the effect of nondrawer and each indorser, and any drawer or indorser notice. to whom such notice is not given is discharged; Provided that

(1.) Where a bill is dishonoured by non-acceptance, and notice of dishonour is not given, the rights of a holder in due course,d subsequent to the omission, shall not be prejudiced by the omission.

(2.) Where a bill is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment unless the bill shall in the meantime have been accepted.*

a See s. 50.

b See ss. 43 and 47.

• These parties are discharged though the omission to give notice has caused them no injury.1 They are also discharged from liability on the consideration.2

As to transferors by delivery see s. 58.

d See s. 29.

e See s. 18 (3).

49. Notice of dishonour, in order to be valid and S. 49. effectual, must be given in accordance with the following rules: a

(1.) The notice must be given by or on behalf of the holder, or by or on behalf of an indorser who, at the time of giving it, is himself liable on the bill."

1 Thomson, 330; see s. 40. n.o.

2 Peacock v. Purssell, 1863, 14 C.B. N.S. 728; 32 L.J. C.P. 266,

Rules as to notice of dishonour.

S. 49.

(2.) Notice of dishonour may be given by an agent either in his own name, or in the name of any party entitled to give notice, whether that party be his principal or not.

с

(3.) Where the notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior indorsers. who have a right of recourse against the party to whom it is given.

(4.) Where notice is given by or on behalf of an indorser entitled to give notice as hereinbefore provided, it enures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given.

(5.) The notice may be given in writing or by personal communication, and may be given in any terms which sufficiently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or non-payment.d

(6.) The return of a dishonoured bill to the drawer or an indorser is, in point of form, deemed a sufficient notice of dishonour.d

(7.) A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A misdescription of the bill shall not vitiate the notice unless the party to whom the notice is given is in fact misled thereby.a

(8.) When notice of dishonour is required to be given to any person, it may be given either to the party himself, or to his agent in that behalf. e

(9.) Where the drawer or indorser is dead, and S. 49. the party giving notice knows it, the notice must be given to a personal representative if such there be, and with the exercise of reasonable diligence he can be found. (10.) Where the drawer or indorser is bankrupt, notice may be given either to the party himself or to the trustee."

(11.) Where there are two or more drawers or
indorsers who are not partners, notice must

be given to each of them, unless one of them
has authority to receive such notice for the
others.

(12.) The notice may be given as soon as the bill
is dishonoured1 and must be given within a
reasonable time thereafter.j

In the absence of special circumstances 1 notice is not deemed to have been given within a reasonable time, unless

(a.) where the person giving and the person to
receive notice reside in the same place, the

notice is given or sent off in time to reach
the latter on the day after the dishonour
of the bill.

(b.) where the person giving and the person to
receive notice reside in different places,
the notice is sent off on the day after the
dishonour of the bill, if there be a post at
a convenient hour on that day, and if there
be no such post on that day then by the
next post thereafter.

(13.) Where a bill when dishonoured is in the

hands of an agent, he may either himself

S. 49.

give notice to the parties liable on the bill, or he may give notice to his principal. If he give notice to his principal, he must do so within the same time as if he were the holder, and the principal upon receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder.

(14.) Where a party to a bill receives due notice of dishonour, he has after the receipt of such notice the same period of time for giving notice to antecedent parties that the holder has after the dishonour.

(15.) Where a notice of dishonour is duly addressed and posted, the sender is deemed to have given due notice of dishonour, notwithstanding any miscarriage by the post-office.1

a The principles on which this section is founded, are stated by Lord Justice Brett in Horne v. Rouquette.1

b Knowledge that a bill has been dishonoured is not equivalent to notice," for the object of notice is to inform the person receiving it, not only that the bill has been dishonoured, but also that the person giving notice looks to him for payment. Therefore notice must be given by the holder or by some person who is liable to pay the bill and entitled on paying it to demand reimbursement. Though the acceptor is notoriously bankrupt, or the prior indorser has been informed of the dishonour by a stranger, this is not notice. Though the secretary of a company in whose hands a bill has been dishonoured, is also secretary of another company which is drawer or indorser of the bill, this is not

1 1878, 3 Q.B.D. 514, 516-519.

2 As to notice of defect in title, see s. 29, n.h

5 Story on Bills, s. 304.

4 Calder v. Lyall, Dec. 22, 1808,

F.C., and Thomson, Still, and Co. v.
Macruer, 1808, in note thereto; East
v. Smith, 1847, 16 L.J. Q.B. 292;
Bell's Com. 443; Thomson, 355;
Byles, 237.

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