Sec. 38.

the law already prevailing in Ontario and Prince Edward Island. Acceptance (R.S.C. 1886, c. 123, secs. 9 and 16.)

payable at a

particular specified

place.

In 1890 the clause referring to an acceptance payable at a particular specified place was omitted from the bill, owing to the strong opinion expressed at the previous session against making the Ontario provisions applicable to the whole Dominion. Under the Ontario Statute, a convenient practice had grown up of persons accepting their bills at particular banks, not with the intention of restricting their liability upon the bills, but with the intention that the banks at which they kept their accounts should pay the bills when they matured without cheque and without further instructions. In other provinces the same practice had been followed to some extent, but except in Prince Edward Island without the sanction of statute. The practice was especially convenient in cases where an acceptance had to be procured by a bank at a considerable distance away. By stamping upon the bill "accepted payable at the A. Bank,' and procuring the drawee's signature to the acceptance in that form, a bank avoided the necessity of having to present it to the drawee, as presentment at the place specified in the acceptance, i.e., at the bank itself, was sufficient (sec. 88).

The omission of the clause would have had the effect of making an acceptance to pay at a particular specified place a qualified acceptance, which a bank would take at the risk of discharg ing the other parties to the bill (secs. 83 and 84). Under the English and Ontario statutes, the bank might take an acceptance payable at a particular specified place, provided the acceptor did not expressly provide that the bill should be paid there only and not elsewhere.

The English clauses were restored in committee. In the Senate, however, the clause relating to a local acceptance was struck out and the present clause inserted, providing generally that the acceptance to pay at a particular specified place is not conditional or qualified.

The difference between the English and the Canadian law may be illustrated as follows::

1. The drawee of a bill accepts "payable at Smith & Co." his bankers. This is a general acceptance in England (cf. Halstead v. Skelton, 1843, 5 Q.B. 86) and in Canada.

2. The drawee of a bill accepts it "payable at the Union Bank and not elsewhere," or "pay only at the Union Bank."

This is a qualified acceptance in England (ibid.), but a general Sec. 38. acceptance in Canada. Acceptance A bill is presented at the proper place if a place of payment payable at a is specified in the bill and the bill is there presented (sec. 88). particular As to presentment as regards drawer and endorsers, see sec. place. 85, and as regards acceptor, see sec. 93.

specified

39. Every contract on a bill, whether it is the drawer's, the When acceptance acceptor's or an endorser's, is incomplete and revocable, until complete. delivery of the instrument in order to give effect thereto: Provided, that where an acceptance is written on a bill, and the Proviso. drawee gives notice to, or according to the directions of, the person entitled to the bill that he has accepted it, the acceptance then becomes complete and irrevocable. 53 V., c. 33, s. 21, Eng. s. 21.

Prior to 1906 this section and secs. 40 and 41 constituted one section. The sections must be read together.

The following sections contain provisions relating to the different "contracts on a bill":

Secs. 130 to 133: drawer or endorser;
Secs. 35, 38 and 128: acceptor.

Delivery means transfer of possession, actual or constructive, from one person to another: see notes to sec. 2, sub-sec. 1(f).

"To constitute a contract there must be a delivery over of the instrument by the drawer or endorser for a good consideration, and as soon as such delivery takes place the contract is complete and it becomes a contract in writing." (Abrey v. Crux, 1869, L.R. 5 C.P. 37, at p. 42, 4 R.C. 195, at p. 199; cf. Denton v. Peters, 1870, L.R. 5 Q.B. 475; Ex parte Cote, 1873, L.R. 9 Ch. 27.)

As to the admission of oral evidence to contradict or vary the contract in writing, see notes to sec. 40.

"It is not the mere act of writing on the bill, but the making a communication of what is so written, that binds the acceptor; for the making the communication is a pledge by him to the party, and enables the holder to act upon it." (Cox v. Troy, 1822, 5 B. & Ald. at p. 478.)

The drawee, unlike the drawer or endorser, has no property in the bill; therefore less is required to make him attorn to the holder. Chalmers, p. 53.

Sec. 39. Bill incomplete and revocable until delivery.

The following illustrations of this section are given by Chalmers, pp. 53-55:

1. B., who owes C. £100, makes a note for the amount payable to C. B. dies, and the note is afterwards found among his papers. C. has no right to this note, and if it be given to him he cannot enforce it. (Cf. Bromage v. Lloyd, 1847, 1 Ex. 32.)

2. B. makes a note in favour of his servant and hands it to his solicitor, telling the solicitor to retain the note till his death, and then hand it to the servant, if still in his service. B. dies, and the solicitor hands the note to the servant. The servant can (perhaps) prove for the amount in the administration of B.'s estate. (Re Richards, 1887, 36 Ch. D. 541, criticized, Re Whitaker, 1889, 42 Ch. D. 119, at p. 125.)

3. B. makes a note in favour of C. and delivers it to a stakeholder (e.g., trustee under composition deed). C. thereby acquires no property in the note. (Cf. Latter v. White, 1872, L.R. 5 H.L. 578.)

4. C., the holder of a bill, specially endorses it to D., and encloses it in a letter addressed to D. The letter, which is put in the office letter box, is stolen by a clerk of C.'s, who forges D.'s endorsement and negotiates the bill. The property in the bill remains in C. (Cf. Arnold v. Cheque Bank, 1876, 1 C.P.D. at p. 684.)

5. By the regulations of the English Post Office, a letter once posted cannot be reclaimed. If, then, the endorsee of a bill authorize the endorser to transmit it to him by post, the property in the bill passes to the endorsee, and the endorsement becomes complete as soon as the letter is posted. (Ex parte Cote, 1873, L.R. 9 Ch. 27; Sichel v. Borch, 1864, 2 H. & C. 954; but if there be no authority to send by post, the instrument is so sent at sender's risk, Pennington v. Crossley, 1897, 13 Times L.R. 513.)

6. The holder of a note payable to bearer wishes to remit money to D. For safety of transmission he cuts the note in two and posts one-half to D. Before he posts the second half he changes his mind, and writes to D. demanding back the half he has sent. He is entitled to do so, for a partial delivery is ineffectual. (Smith v. Mundy, 1860, 29 L.J. Q.B. 172; cf. Redmayne v. Burton, 1860, 2 L.T.N.S. 324.)

7. A bill is left with the drawee for acceptance. The drawee writes an acceptance on it. The next day the holder calls for the

revocable

bill; he is merely informed that it is mislaid, and is requested to Sec. 39. call the next day. In the meantime the drawee hears that the Bill incomdrawer has failed. He accordingly cancels his acceptance, and plete and the next day delivers the dishonoured bill back to the This is no acceptance; the drawee is entitled to cancel it. of Van Diemen's Land v. Bank of Victoria, 1871, L.R. 526.)

holder. until
(Bank delivery.
3 P.C.

8. A firm is indebted to D. B., who is a member of the firm, and also agent for D., writes the firm's endorsement on a bill held by the firm, and puts the bill with some other papers of D.'s of which he has the custody. This is a valid endorsement by the firm, and the property in the bill passes to D. (Lysaght v. Bryant, 1850, 9 C.B. 46.)

27-BANK ACT.

Requisites.

Authority.

Conditional.

Presumption.

CHAPTER XXXVI.

DELIVERY AND ORAL EVIDENCE.

Sec. 39, subject to a proviso specially applicable to acceptance, provides that "Every contract on a bill, whether it is the drawer's, the acceptor's or an endorser's, is incomplete and revocable, until delivery of the instrument in order to give effect thereto.'

The other sections relating to delivery of a bill are secs. 40 and 41. Prior to 1906 all three sections formed one section. Section 39 is now placed in the Act under the heading "Acceptance and interpretation," and has therefore been included in the chapter so entitled. The section and the illustrations cited in connection with it must, however, be read along with the sections, which are included in this chapter.

If a bill is in the hands of a holder in due course a valid delivery by all parties prior to him is conclusively presumed (sec. 40). In other cases where a bill is no longer in the hands of a party who has signed it, a valid and unconditional delivery by him is presumed until the contrary is proved (sec. 41). See sec. 40 and notes as to when the contrary may be proved.

Delivery.

40. As between immediate parties, and as regards a remote party, other than a holder in due course, the delivery,—

(a) in order to be effectual must be made either by or under the authority of the party drawing, accepting or endorsing, as the case may be;

(b) may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the bill.

2. If the bill is in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him, so as to make them liable to him, is conclusively presumed. 53 V., c. 33, s. 21. Eng. s. 21.