A cheque is not an assignment by the drawer to the payee of a debt or Sec. 72. a chose in action; and the payee of the cheque has no right of action for its dishonor against the banker on whom it is drawn: Schroeder v. Central Bank, 34 L. T. Rep. 735. See also Hopkinson v. Forster, L. R. 19 Eq. 74. The bearer of a cheque is the person entitled to the money, and he may transfer it to any other person, and whoever has possession of it, as bearer, is entitled to the amount stated in it, and to maintain an action on it: Ancona v. Marks, 7 H. & N. 696. The rule of law as to bills of exchange and promissory notes,—that an indorsee taking them after maturity, takes them upon the credit of, and can stand in no better position than, his indorser,-does not apply to cheques London and County Banking Co. v. Groome, 8 Q. B. D. 288. : A banker cannot debit his customer with the payment made through a forged indorsement of a bill, unless there are circumstances amounting to a direction from the customer to the banker to pay without reference to the genuineness of the indorsement, or equivalent to an admission of its genuineness, so as to preclude the customer from shewing it to be forged : Roberts v. Tucker, 16 Q. B. 500. Where a bank, without the authority of its customer, counted out the amount of such customer's deposit, and handed it over to a sheriff, who held an execution against the goods and chattels of the customer, it was held that the amount so paid was the bank's money, and not the money of the customer: Carroll v. Cone, 40 Barb. (N. Y.) 220. Where a draft in the usual form of a cheque, is made payable on a future specified day, it is prima facie but not conclusive evidence that the instrument is a bill of exchange, and as such entitled to days of grace: Andrew v. Blachly, 11 Ohio St. 89. When, however, such an instrument is designed by the parties as an absolute transfer and appropriation to the holder of so much of an actually existing fund in a bank belonging to the drawer, it is nevertheless a cheque, and not a bill of exchange, and is not entitled to days of grace. Ibid. A cheque post-dated seven days, cannot in substance be distinguished from a bill of exchange at seven days date: Forster v. Mackreth, L. R. 2 Ex. 163. A cheque given in settlement of losses at matching coppers, is a note of hand given in consideration of a gambling debt, and such a security is void, even in the hands of bona flde holder for value: Summerfeldt v. Worts, 12 Ont. R. 48. 2 These provisions are: s. 10, defining a bill payable on demand; s. 14, no days of grace; capacity and authority of parties, s. 22; and the general provisions as to acceptance, indorsement, negotiation, holder in due course, presentment for acceptance and payment, notice of dishonor, contracts of acceptor, drawer and indorser, and discharge of bill. 73. Subject to the provisions of this Act Presentment payment within reasonable time. (a) Where a cheque is not presented for payment within of cheque for a reasonable time of its issue, 1 and the drawer or the son on whose account it is drawn had the right at the time Imp. Act,s.74 per Ind Act, Sec. 73. of such presentment, as between him and the bank, to have the cheque paid, 2 and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such bank to a larger amount than he would have been had such cheque been paid; 3 Usage and facts to govern. When holder is a creditor of bank. (b) In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade and of banks, and the facts of the particular case; 4 (c) The holder of such cheque, as to which such drawer or person is discharged, shall be a creditor, in lieu of such drawer or person, of such bank to the extent of such discharge, and entitled to recover the amount from it. 5 1 The usage recognized by the cases is, that when a party receives a plain or uncrossed cheque, drawn on a bank in the place where he resides, he should present it for payment not later than the day after he receives it. But if the cheque be crossed by the drawer before delivering it to the holder, such holder should deposit it in his own bank for collection not later than the day after he receives it; and the bank, the day next following, present it to the bank on which it is drawn: Alexander v. Birchfield, 7 M. & Gr. 1061. In computing time, the non-business days mentioned in s. 14 are excluded (s. 91). In the former case, the drawer of the cheque is held to be responsible one day, and in the latter case, two days, for the solvency of the bank on which he has given his cheque. When the person taking a cheque, and the banker, do not reside in the same place, the person taking the cheque should send it to his banker, or agent, by the next business post to the town where the bank is situated; and such banker, or agent, should present it on the next business day, in order to be able to hold the drawer liable in case the bank on which it is so drawn suspends payment. See further, as to "reasonable time," ss. 20, 36, 40 and 45, and notes thereto. 2 A banker does not generally accept his customer's cheque; the reason being that the banker is the debtor of his customer to the extent of the funds which he holds on his customer's account, with the obligation imposed upon him, arising out of the custom of bankers, of honoring his customer's cheques, to the extent of his customer's funds: Foley v. Hill, 2 H. L. Cas. 28. ILLUSTRATIONS. A bank is bound by law to pay a cheque drawn by a customer within a reasonable time, after the bank has received sufficient funds belonging to the customer; and the latter may maintain an action of tort against the bank, for refusing payment of a cheque under such circumstances, Sec. 73. although he has not thereby sustained any actual damage: Marzetti v. Williams, 1 B. & Ad. 415. A. presented a cheque at a banking house. The cashier counted out the amount in notes, gold, and silver, and placed it on the counter. A. took it and counted it, and was in the act of counting it a second time, when the cashier (having discovered that the drawer's account was overdrawn) demanded the money back, and upon A's refusal, detained him, and took it from him by force;-Held, that the property in the notes and money had passed from the bank to the bearer of the cheque, and that the payment was complete, and could not be revoked. Chambers v. Miller, 13 C. B. N. S. 125; s. c., 3 F. & F. 202. Where cheques drawn on the Bank of Montreal by the agent of the City Bank had been accepted by the manager of the former, who received the funds of the latter in return;-Held, that the Bank of Montreal was responsible for the acceptance of its manager by his initials, especially as it had adopted the acceptance by accepting the funds of the City Bank in consideration therefor: Banque Nationale v. City Bank & Bank of Montreal, 17 L. C. J. 197. When a customer pays to his bankers a cheque drawn upon them by another customer, he must, in order to make them liable at all events, demand payment, or request that the amount may be placed to his credit: Boyd v. Emerson, 4 N. & M. 99; 2 A. & E. 184. A cheque crossed in blank was deposited by the holder in his bank, which two days afterwards presented it for payment, when it was dishonored ;-Held, to be presented within a reasonable time: Stringfield v. Lanezzari, 16 L. T. N. S. 361. As between the drawer of a cheque and the holder, no time, within six years, is unreasonable for presentment to the banker for payment, unless some loss to the drawer is occasioned by the delay: Laws v. Rand, 3 C. B. N. S. 442. The drawer of a cheque is responsible on it until it is outlawed, and is not entitled to notice or other privileges, not even of presentment, unless it be shewn that, from want of such diligence, he had suffered damage; as from the bank on which it is drawn having failed in the interim: Pratt v. McDougall, 12 L. C. J. 243. 3 The latter part of this clause is new. lutely discharged, if the bank failed. Formerly the drawer was absoNow, by the operation of this clause, and clause (c), the drawer is discharged only to the extent of the damage he suffers; and the holder is given the right of the drawer in recovering the amount from the bank, or proving the amount of the damages claimed against it in any winding up proceedings. ILLUSTRATIONS. If the holder of a cheque neglect to present the same for payment within a reasonable time, and the bank fails between the time of the drawing and the presentment thereof, the drawer is discharged from liability, pro tanto the loss he has sustained by such failure: Daniel v. Kyle, 5 Ga. 245. In an action by a trader against his banker for dishonoring his cheque, he having funds to meet it, substantial damages may be recovered, with out proof of any actual damage: Rolin v. Steward, 14 C. B. 595. Sec. 73. Revocation of bank's authority. Imp. Act,s.75 A "usage of trade and of banks" can only be established by evidence. A custom or usage would be binding and obligatory on all persons engaged in a certain trade, because long and universally acted upon by all persons in such trade, who may therefore be reasonably presumed to have made their contracts on the faith of it. The alleged custom could only be proved by a long, well known and acknowledged and universal usage and practice among bankers and traders to act in accordance with it: Bellamy v. Marjoribanks, 7 Ex. 387. See note I to this section, and the notes to ss. 26, 36, 40 and 45. ILLUSTRATIONS. Greater diligence is required in presenting a cheque for payment, than in presenting a common inland bill of exchange for payment: Gough v. Staats, 13 Wend. (N. Y.) 549. Where the parties reside in the same place, a delay of six days to present a cheque for payment, discharges the drawer: Ibid. A cheque drawn in Boston on a bank in Boston, was sent by mail to Rochester, N. Y., and there bought by a bank four days after its date, and was presented for payment two days after, in all six days from its date;-Held, under the circumstances, no unreasonable delay, and that it was not subject to any equities between the original parties: Bank of Rochester v. Harris, 108 Mass. 514. Where the holder of a cheque did not present it to the bank for two years after its date, and omitted to give any notice of non-payment to the drawer, but the drawer never had funds in the bank sufficient to meet it, except once, and then such funds were withdrawn immediately afterwards by himself, and the drawer sustained no loss by the delay in presentment; —Held, that the drawer was not exonerated from liability: Hoyt v. Seeley, 18 Conn. 353. 5 This clause is new. Formerly it was held that there was no privity between the holder of a bill or cheque payable at a bank, and the bank which would give such holder a right of action against the bank. The holder of a cheque cannot sue the bank for refusing payment, in the absence of proof that it was accepted by the bank, or charged against the drawer: National Bank v. Millard, 7 Can. L. J. 44. 74. The duty and authority of a bank to pay a cheque drawn on it by its customer are terminated by— (a) Countermand of payment; 1 (b) Notice of the customer's death. 2 1 The terms used in this section indicate that the drawing of a cheque by a customer imposes a “duty" on, and conveys an "authority" to, the bank drawn upon, to pay such cheque on demand. As stated in note 5 to s. 2, p. 25 ante, the ordinary relation of bank and customer in regard to moneys deposited, and cheques drawn for the payment of such moneys, is that of debtor and creditor. A bank is not obliged to pay a customer's Sec. 74cheques at all hazards. It should not do so, if it has had notice of such an act of insolvency as an assignment to a trustee, or assignee, for the benefit of creditors, and when the trustee or assignee has given notice of such assignment to the bank : Griffin v. Rice, Hilt. (N.Y.), 184; Beckwith v. Union Bank, 9 N. Y. 211. But the trustee is not bound to notify the bank not to pay the cheque, as he might expose himself to the risk of an action by a bona fide holder of the cheque: Ex parte Richdale, 19 Ch. D. 489. So a bank may refuse to pay a customer's cheque which he knows has been drawn for the purpose of committing a breach of trust; as where the customer is an executor and intends to mis-apply the money, and the bank is privy to the intent: Gray v. Johnston, L. R. 3 H. L. 1. But it would be a most serious matter if banks were to be allowed, on light and trifling grounds, on grounds of mere suspicion or curiosity, to refuse to honor a cheque drawn by their customer, even although that customer might happen to be an executor or administrator: Per Lord Cairns, L. C., in Ibid. ILLUSTRATIONS. A bank is bound to honor its customers' cheques to the amount deposited. And it is also bound to obey the orders of such customer countermanding the payment of, or "stopping," such cheques: Clydesdale Bank v. McLean, 10 Sess. Cas. 4 Ser. 719. Where a person having funds in a bank drew cheques in favor of different persons, and he afterwards, before they were presented to the bank, forbade the bank to honor the cheques and drew out the whole fund;-Held, that the holder of a cheque which was presented to the bank after the drawer had countermanded payment, but before the fund was drawn out, was not entitled to claim the amount of the cheque from the bank: Dykers v. Leather Manufacturers Bank, 11 Paige (N.Y.) 612. Where a bank was notified by the drawer of a cheque not to pay it, which the teller agreed not to pay, but afterwards paid it to the holder on presentation;-Held, that the drawer could recover from the bank the amount of the cheque so paid: Schneider v. Irving Bank, 1 Daly (N. Y.) 500. 2 This has been recognized as a rule in banking matters, although there has been no direct decision on the point, except in cases of donatio mortis causâ, “A cheque is nothing more than an order to obtain a certain sum of money, and it makes no difference whether the money is at the bank or any where else. It is an order to deliver the money, and if the order is not acted upon, in the lifetime of the person who gives it, it goes for nothing :" Per Lord Romilly, M. R., in Hewett v. Kaye, L. R. 6 Eq. 198. But where a bank held a deposit of a customer, and charged against it a bill which fell due after the customer's death, but before it had received notice of his death, it was held entitled so to charge the amount of the bill: Rogerson v. Ladbroke, 1 Bing. 93. See further Hill v. Royds, L. R. 8 Eq. at p. 292. But where a bank held a customer's notes which fell due after his death, it was held that they were |