Sec. 123.

123. Where a dishonoured bill is authorized or required to Official when be protested, and the services of a notary cannot be obtained at notary is not accessible. the place where the bill is dishonoured, any justice of the peace resident in the place may present and protest such bill and give all necessary notices and shall have all the necessary powers of a notary in respect thereto. 53 V., c. 33, s. 93. Cf. Eng. s. 94.

Expenses.

Fees.

The corresponding section of the English Act omits the words after "dishonoured" (where it secondly occurs) and provides that "any householder or substantial resident of the place may, in the presence of two witnesses, give a certificate, signed by them, attesting the dishonour of the bill, and the certificate shall in all respects operate as if it were a formal protest of the bill," and also in a schedule provides a form which may be used. The English section also contains the words "or note" after the word "bill" in the first line.

No clerk, teller or agent of any bank shall act as a notary in the protesting of any bill or note payable at the bank or at any of the branches of the bank in which he is employed (sec. 13). A notary who is one of the endorsers of a bill is not entitled to act as notary in protesting the bill. (Pelletier v. Brosseau, 1890, M.L.R. 6 S.C. 331.)

124. The expense of noting and protesting any bill and the postages thereby incurred, shall be allowed and paid to the holder in addition to any interest thereon.

2. Notaries may charge the fees in each province heretofore allowed them. 53 V., c. 33, s. 93.

The expenses of noting and protest are part of the measure of damages allowed by sec. 134 where a bill is dishonoured.

R.S.C., 1886, c. 123 (repealed by the Bills of Exchange Act, 1890) contains provisions relating to notary's fees: sec. 7 (Nova Scotia); sec. 8 (Prince Edward Island); sec. 25 (Ontario); schedule B. (Quebec).

In the other parts of Canada, the changes appear to be regulated by usage, although in New Brunswick a provincial statute (46 Vict., c. 11) purports to prescribe a tariff.

125. The forms in the schedule to this Act may be used in noting or protesting any bill and in giving notice thereof.

Sec. 125.

Forms.

2. A copy of the bill and endorsement may be included in Contents. the forms, or the original bill may be annexed and the necessary changes in that behalf made in the forms. 53 V., c. 33, s. 93. Cf. Eng. s. 94.

Cf.

The English Act provides a form only for the case of the protest of a bill by a householder or substantial resident. notes to sec. 123.

As to sub-sec. 2, cf. sec. 122.

The forms in the schedule are not obligatory. As to form of notice of dishonour, see notes to sec. 96.

126. Notice of the protest of any bill payable in Canada When notice of protest shall be sufficiently given and shall be sufficient and deemed to shall be have been duly given and served, if given during the day on given. which protest has been made or on the next following juridical or business day, to the same parties and in the same manner and addressed in the same way as is provided by this Part for notice of dishonour. 53 V., c. 33, s. 49.

Subject to the provisions of the Act, protest must be made or noted on the day of the dishonour of a bill (sec. 119). Notice of protest may be given on that day or on the next following juridical day.

As to the persons to whom notice must be given, see sec. 96 and notes. As to the manner, see secs. 98 and 99. As to the manner in which the notice is to be addressed, see secs. 103 and 104 and notes.

35-BANK ACT.

Equitable assignment

A bill not an equitable assignment.

CHAPTER XLV.

LIABILITIES OF PARTIES.

The sections comprised in this chapter provide for the obligations of the various contracts which are entered into by parties to a bill. A person signing a bill may be liable as acceptor (secs. 128 and 129) or as drawer (sec. 130). When a person signs a bill otherwise than as acceptor or drawer he thereby incurs the liabilities of an endorser to a holder in due course (sec. 131). The obligations of an endorser are provided for by sec. 133. A transferrer by delivery is not liable on the bill (sec. 137), but by virtue of negotiating it, enters into a contract with his immediate transferee, being a holder for value (sec. 138).

The measure of damages for dishonour of a bill and the recovery of such damages is provided for by secs. 134 to 136.

127. A bill, of itself, does not operate as an assignment of funds in the hands of the drawee available for the payment thereof, and the drawee of a bill who does not accept as required by this Act is not liable on the instrument. 53 V., c. 33, s. 53. Eng. s. 53.

The corresponding section of the English Act provides that it shall not extend to Scotland, and further, by sub-sec. 2, that "in Scotland, where the drawee of a bill has in hands funds available for the payment thereof, the bill operates as an assignment of the sum for which it is drawn in favour of the holder, from the time when the bill is presented to the drawee." law of France is similar to that of Scotland.

The

A bill of exchange is an unconditional order in writing, but an order to pay out of a particular fund is not unconditional, and therefore such an order is not a bill (sec. 17).

A bill of itself does not operate as an assignment of funds in the hands of the drawee available for the payment thereof. The drawee, as such, incurs no liability to the holder, and there is no privity of contract between them. (Hopkinson v. Forster, 1874, L.R. 19 Eq. 74, 3 R.C. 755.)

This was the law before the Act. A. having an account Sec. 127. against B. gives C. an order upon B. In the absence of accept- A bill not an ance by B., B. is not liable to C. (Hall v. Prittie, 1890, 17 A.R. equitable 306, and cases cited; Percival v. Dunn, 1885, 29 Ch. D. 128.) assignment. One of the very incidents which makes the instrument a valid bill of exchange, namely, that it is not drawn against or payable out of any particular fund, prevents it from operating as an equitable assignment. (Hall v. Prittie, supra.)

An order invalid as a bill may be valid as an equitable assignment. (Buck v. Robson, 1878, 3 Q.B.D. 686; Chalmers, p. 13; see the English and American cases reviewed in Munger v. Shannon, 1874, 61 N.Y. 251.)

But where the evidence shewed that there was only one fund out of which the drawee could be expected to pay the order; that the nature of the fund and its origin were well known to all the parties; that when the drawer promised to give the persons with whom he dealt orders upon the drawee, he intended to give and these persons expected to get, orders which were to be paid out of the particular fund; and that the drawee understood the order as intended to deal with portions of the fund and to be payable only out of the fund; it was held that the court should look to the real intention of the parties to the transaction and should give effect to such intention by declaring that the drawer did make an equitable assignment to the order-holder of a portion of the fund. (Lane v. Dungannon, 1892, 22 O.R. 264.)

Where there is a specific appropriation of funds with the assent, express or implied, of the drawee there is privity between the drawer and the holder. De Bernales v. Fuller, 1810, 14 East. 590n. 13 R.R. 321n, was a case where money was expressly paid into the defendant bank for the specific purpose of taking up a bill, the purpose being declared by the payer at the time, and not being repudiated by the bank until afterwards. The case is referred to in Prince v. Oriental Bank, 1878, 3 App. Cas. 325, 334, as a case which has never been overruled; the bank so receiving the money must be held to have received it for the use of the holder of the bill, and cannot apply the money to the general indebtedness of the acceptor who paid in the money. Cf. supra, p. 132.

A. draws a bill on B. in favour of C., and remits funds to meet it. B. does not accept the bill, but he tells C. that he has received the funds and promises to pay the bill. B. does not pay

Sec. 127. the bill. No action on the bill can be maintained against B., but A bill not an C. can sue B. for money received to his use. (Griffin v. Weatherequitable by 1868, L.R. 3 Q.B. 753; cf. Torrance v. Bank of B.N.A., 1873, assignment. L.R. 5 P.C. 246.)

Privity may be created by agreement external to the bill, and the relations of the parties are then regulated by the terms of the agreement. (Robey v. Ollier, 1872, L.R. 7 Ch. 695; Ranken v. Alfaro, 1877, 5 Ch. D. 786; cf. Bank of Montreal v. Thomas, 1888, O.R. 503.

What Chalmers (p. 183) calls a quasi-privity is created by sec. 166, which provides that when the holder of a cheque omits to present it within a reasonable time, whereby the drawer has been damnified (i.e., by the failure of the bank), the drawer is pro tanto discharged, and the holder is substituted as a creditor of the bank. As to the applicability of sec. 127 to a cheque, see notes to sec. 165.

Subject to the rule that a customer is entitled to draw cheques on his bank, a creditor, as such, is not entitled to draw on his debtor in respect to his debt; and the drawee of an unaccepted bill is under no obligation to accept or pay it unless he has for valuable consideration expressly or impliedly agreed to do so. (Cf. Goodwin v. Robarts, 1875, L.R. 10 Ex. at p. 351.)

When the drawee breaks his contract with the drawer by dishonouring his bill, the drawee is liable to the drawer for the damages reasonably resulting from the breach.

A customer having a balance of $200 at his banker's draws a cheque for $100 or accepts a bill for $100 payable at his banker's. If this cheque or bill is dishonoured he may recover substantial damages for the injury to his credit, without proving any actual loss. (Rolin v. Steward, 1854, 23 L.J.C.P. 148; cf. Chapter XVIII, supra, p. 211.)

A. in a foreign country draws on B. in England under a letter of credit. B. dishonours the draft. A. may recover the re-exchange and notarial expenses which he has had to pay to the holder (Walker v. Hamilton, 1860, 1 De G. F. & J. 602; Re General South American Co., 1877, 7 Ch. D. 637), and also the cost of telegrams, etc., consequent on the dishonour. (Prehn v. Royal Bank, 1870, L.R. 5 Ex. 92.)