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P. 669. A forged paper purporting to be a bank note is a promissory Sec. 24. note, and equally so, even if there be no such bank as that named: Regina v. Macdonald, 12 U. C. Q. B. 542.

ILLUSTRATIONS.

The holder of a promissory note whose title thereto was derived from an indorsement which proved to be a forgery, although he had acted in entire good faith, cannot recover the amount of the note from any of the previous indorsers: Larue v. Evanturel, 2 L. C. L. J. 115.

When the original indorsement of the payee's name on a bill of exchange was written without authority, and therefore a forgery, the subsequent indorsement by such payee, after the bill had arrived at maturity, was held not to give the holder any title to the bill: Esdaile v. La Nauze, 1 Y. & C. Ex. 394,

Notice of such fraudulent indorsement given to the bona fide holder of a note, will not affect his right to recover, nor will it affect the right of his indorsee, though the last indorsement was made after the note was due : McLeod v. Carman, 1 Han. N. B. 592.

The Court will not order the production of cheques alleged by the defendant to be forgeries, for the sake of comparing the handwriting with a document, about the genuineness of which the parties are at issue: Wilson v. Thornbury, L. R. 17 Eq. 517.

These (forged) documents are not bills of exchange; therefore prima facie such documents are not dealt with by the Act. But as between parties, where one is estopped from denying to the other that the document is a bill of exchange, the document as between them must be treated as a bill of exchange, and as being within the Act: Per Lord Esher, M. R., Vagliano v. Bank of England, 23 Q. B. D. 252.

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3 "Unauthorized signature." The general rule is that if any person puts the name of another on a bill or note without authority, with the intention of meeting the payment of such bill or note when due, or that the person whose name has been put on the bill or note will overlook it, it is forgery Rex. v. Forbes, 7 C. & P. 224. So if a person relying upon the kindness of a near relation or friend, uses his name on a bill or note without authority, trusting that such person will pay it rather than there should be a prosecution, this is also forgery. And the fact that such relation or friend had on three or four previous occasions, when bills had been so drawn, paid them without remark or remonstance, would afford no ground for the belief that he had authorized such use of his name: Regina v. Beard, 8 C. & P. 143.

ILLUSTRATIONS.

A person who knows that another is relying upon his forged signature to a bill cannot lie by and not divulge the fact until he sees whether the position of such other person is altered for the worse, or he will be held to have acquiesced in the forgery, and be estopped from denying his liability on the bill: McKenzie v. British Linen Co., 6 App. Cas. 82.

The name of one F. had been forged to a note, but previous to the trial he had stated that he had signed the note for the accommodation of his co-defendant;-Held, that F.'s conduct amounted to an adoption and ratification of the signature to the note, and that he was liable thereon: Union Bank v. Farnsworth, 19 Russ. & Gel. 82.

Sec. 24.

If a party to a bill, on being asked if it is his handwriting, answers that it is, and will be duly paid, he cannot afterwards set up a defence of forgery, for he has credited the bill, and induced others to take it: Leach v. Buchanan, 4 Esp. 226.

A bill purporting to be drawn by a really existing firm payable to their order, and to be indorsed by them, was negotiated by the acceptor with that indorsement upon it. The drawing and indorsement were forgeries; -Held, that if the bill was accepted and negotiated by the acceptor with knowledge of the forgery, he was estopped to deny the indorsement as well as the drawing: Beeman v. Duck, 11 M. & W. 251.

Where the trustees of a charity left their seal in the custody of their secretary, and he fraudulently affixed the seal to five forged powers of attorney authorizing the transfer of stock ;-Held, that any alleged negligence in allowing the secretary to have the custody of the seal was very remotely connected with the fraudulent act of transfer, and not such as to make the trustees liable therefor. If a person negligently keeps his cheque book, or neglects to lock the desk where it is kept, and a servant or stranger takes it and forges a cheque, such person is not guilty of legal negligence to make him liable for the consequences of such forgery: Bank of Ireland v. Evans Charities, 5 H. L. Cas. 389.

Where a bill of exchange has been negotiated by means of the forgery of the name of the payee, as indorser, equity will restrain even a bona fide holder of the bill from suing the acceptor, and will direct the forged instrument to be delivered up to be cancelled: Esdaile v. La Nauze, 1 Y. & C. Ex. 394.

cases.

The doctrine of Estoppel has been much discussed in some of the It is generally favored by the courts, especially where it is essential to the quick and easy transaction of business. And so that a man should be able to put faith in the conduct and representations of his fellows, the Courts have inclined to hold such conduct and representations binding, in cases where a mischief or injustice would be caused by treating their effect as revocable: 2 Smith's Leading Cases 460a. And although it has been laid down as a broad general principle that wherever one of two innocent persons must suffer, by the act of a third, he who has enabled such person to occasion the loss must suffer it, (Per Ashurst, J., in Lickbarrow v. Mason, 2 East 70), the general rule now seems to be that where a clerk or servant of one person has by virtue of his employment, been able to commit a fraud on another, negligence of the employer of such clerk or servant, must have been the immediate cause of the fraud, so as to make such employer liable; but where such negligence of the employer is the remote and not the proximate cause of such fraud, the employer is not liable. Mere negligence, or a careless and slovenly mode of conducting business is not enough: Vagliano v. Bank of England, 22 Q. B. D. 117.

ILLUSTRATIONS.

In an action against the indorser of a note, it appeared that his name had been written by the maker, his nephew, and there was no evidence of express authority; but it was proved that the defendant had before and afterwards indorsed for his nephew on purchases by him from the plaintiffs, and that when payment of this note was demanded from him, he had

asked for time, and had not denied his indorsement until some months Sec. 24. afterwards, when the maker had absconded. His excuse was, that he kept no memorandum of his indorsements, and supposed it was right;Held, that the defendant had precluded himself by his conduct from disputing his liability: Pratt v. Drake, 17 U. C. Q. B. 27.

On an action by indorsees for value, against a firm of M. and C., on a bill drawn by S. & Co., in their own favour, accepted by M. & C., and indorsed by S. & Co. to the plaintiffs, the defendant C. pleaded that the bill was accepted by his partner M. in the name of the firm as an accommodation for S. & Co., and without his, C.'s authority, and was not within the scope and objects of the partnership business, and that the plaintiffs took it with notice ;-Held, that although it might be inferred that the defendant C. knew nothing of the bill, and that the acceptance was beyond the scope and object of the partnership, and entirely foreign to the purposes of it, he should have pleaded that it had no reference to any transaction and dealings between S. & Co. and his firm : City of Glasgow Bank v. Murdock, 11 U. C. C. P. 138.

5 There are cases which show that a forgery in connection with a bill of exchange or promissory note cannot be ratified; and this section may be read both ways. The first part of the section declares that a forged signature is "wholly inoperative" and gives no right to retain or enforce payment of it "unless the party against whom it is sought to retain or enforce payment of the bill is precluded (i. e., estopped by ratification or negligence), from setting up the forgery." The subsequent proviso however would seem to countenance the view that a forgery could not be ratified. But Lord Blackburn says: If a person whose name was used without authority, chooses to ratify the act, even though known to be a crime, he makes himself civilly responsible, just as if he had originally authorized it :" McKenzie v. British Linen Co., 6 App. Cas. 99. See the cases to note 4.

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ILLUSTRATION.

One W. accepted certain bills of exchange in the name, but without the authority, of his brother J. W. was taken up on another charge of forgery, and while in custody the holders of the bills applied to J. for payment. J. then gave a written acknowledgment (after the bills had been dishonored), that he was responsible for them, and would pay them in case his brother should fail to do so;-Held, sufficient to make J. liable on the bills: Ex parte Edwards, 5 Jur. 706.

This proviso is new law, and may be taken as a modification of s. 60 of the English Act which provides that when a banker, on whom a bill payable to order or demand and indorsed, is drawn, pays it in good faith and in the ordinary course of business, he shall be discharged, although such indorsement has been forged. A similar clause to s. 60 (Imp.) in this measure, was struck out of the Bill during its progress in Parliament. The effect of this proviso is to fix a limitation of time to a claim against a bank or other drawee, for paying out of and charging against the funds of a customer, the amount of a forged cheque.

ILLUSTRATIONS.

Payment of a forged draft is no payment as between the person paying and the person whose name is forged: Orr v. Union Bank of Scotland, 1 Macq. H. L. Cas. 513.

Sec. 24.

Procuration signatures notice of limited

A customer drew upon his banker a cheque for £3, and paid it away. The amount of the cheque was altered by the holder, to £200, in such a manner that no one, in the ordinary course of business, could have observed it, was presented, and the £200 paid by the banker ;-- Held, that the banker was liable to the customer for the difference between the amount of the genuine and the altered cheque: Hall v. Fuller, 5 B. & C. 750.

The U. Bank, at Quebec, made a draft upon their branch at Montreal for $25, without advice to the branch of the fact. The holder altered the amount of the draft to $5,000, and deposited it to his own credit in his banking account with O. Bank which presented it without delay, to the branch at Montreal, where it was paid without objection. The O. Bank then paid part of the proceeds to the depositor. Six days afterwards the U. Bank discovered the fraud and demanded back the amount of the forgery;-Held, that they could not recover: Union Bank of Lower Canada v. Ontario Bank, 2 Leg. News 132 & 23 L. C. J. 66, 3 Leg. News 386, & 24 L. C. J. 309.

25. A signature by procuration operates as notice that the agent has but a limited authority to sign, and the authority principal is bound by such signature only if the agent in so signing was acting within the actual limits of his authority. 1

Imp. Act,s. 25

1 The signature by procuration (per proc. or per pro.) is notice of the limited authority of the agent signing. But the principal cannot be bound if the agent has not the authority he represents. The agent however will be bound if he assumes so to act without authority, or if he exceeds the authority of his principal. In case of a defective power in the agent to bind the principal, if the agent speaks only in the language of the principal, and does not use apt language to bind himself, he will not be liable on the contract; but he may be liable to an action for a false assumption or representation of authority: Johnson v. Smith, 21 Conn. 627. Unless an agent states upon the face of the bill that he subscribes it for another; unless he says plainly "I am the mere scribe," he will be liable personally : Per Lord Ellenborough, C. J., in Leadbetter v. Farrow, 5 M. & S. 345.

ILLUSTRATIONS.

A power of attorney giving the agent full powers as to the management of certain specified real property, with general words extending those powers to all the property of the principal of every description, and in conclusion authorizing the agent to do all lawful acts concerning all the principal's business and affairs of what nature or kind soever, does not authorize the agent to indorse bills of exchange in the name of his principal Esdaile v. La Nauze, 1 Y. & C. Ex. 394.

A general power to an agent to sign bills, notes, &c., and to superintend, manage, and direct all the affairs of the principal, gives him a power to indorse notes: Auldjo v. McDougall, 3 U. C. O. S. 199.

A person taking a bill signed (per proc.) should require the production of the authority which the agent exercises: Attwood v. Munnings, 7 B. & C. 278.

An acceptance or an indorsement expressed to be per procuration, is a Sec. 25. notice to the indorsee that the party so accepting or indorsing, professes to act under an authority from some principal, and imposes upon the indorsee the duty of ascertaining that the party so accepting or indorsing is acting within the terms of such authority: Alexander v. McKenzie, 6 C. B. 766; 13 Jur. 346.

A bill accepted per procuration is notice to any party who takes the bill that the acceptor has but a limited authority, and the holder cannot maintain an action against the acceptor if the authority has been exceeded: Stagg v. Elliott, 12 C. B. N. S. 373; 6 L. T. N. S. 433.

A person who accepts a bill per procuration, having no authority to do so, is liable to an action of tort for falsely representing that he was so authorized, although he may at the time have thought he had authority, or that his act would be ratified: Polhill v. Walter, 3 B. & Ad. 114.

If a principal authorizes an agent to accept a bill, such principal is liable as acceptor, though wrongfully described by his agent in the acceptance: Lindus v. Bradwell, 5 C. B. 583; 12 Jur. 230.

In an action against a party as acceptor of a bill accepted in his name by another person, when evidence has been given of a general authority in that person to accept bills, in the defendant's name, an admission by the defendant of liability on another bill so accepted, is good evidence confirmatory of the former: Llewellyn v. Winckworth, 13 M. & W. 598 ; 14 L. J. Ex. 329.

From the facts that the defendants' confidential clerk had been accustomed to draw cheques for them that in one instance, at least, they had authorized him to indorse, and in two other instances had received money obtained by his indorsing in their name, a jury is warranted in inferring that the clerk had a general authority to indorse: Prescott v. Flynn, 9 Bing. 19.

Where an agent is authorized to indorse the name of his principal, he may do so by the instrumentality of a third party, and such authority may be exercised by the clerks of such agent: Lord v. Hall, 2 C. & K. 698; Ex parte Sutton, 2 Cox 84.

Certain notes for debts payable to the executors of an estate came into the hands of B. the agent of the executors, who indorsed two of them, "J. M. B., agent of the executors of the late E." and the third "the executors late E., per pro. B." B. held a power of attorney from the executors, authorizing him (among other things) to make and indorse all such promissory notes as might be requisite in the conduct and management of the estate. These notes indorsed as above were given to M., one of the executors, who was largely indebted to the estate, and was in difficulties, and who discounted them with the bank, to whom M. owed a large sum, and who made no inquiries as to the extent of B's. authority, or the circumstances under which M. obtained them ;-Held, 1. That the indorsements were sufficient in form; but, 2 That not being for the purposes of the estate, they were not within the authority given to B., the extent of which it was the bank's duty to ascertain: Gore Bank v. Crooks, 26 U. C. Q. B. 251.

P. & C. foreign correspondents of H. G. & Co., remitted to them a bill upon the defendant for £300, inclosed in a letter advising them that it was sent to meet a draft on H. G. & Co. of the same amount. Before the arrival of the letter, G. (who alone constituted the firm of H. G. & Co.), had absconded, having previously addressed a letter to L. authorizing him, for and in the name of H. G. & Co., to indorse any bill or bills which

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