Act. Under our Act, it is always proper to protest a dishonoured Sec. 134. bill (sec. 113) and by sec. 134 the damages include "the expenses Expenses of of noting and protesting." а In Banque Populaire v. Cavé, 1895, 1 Com. Ca. 67, it was held that the holder of a bill drawn abroad and dishonoured in England is entitled to recover no other charges than those provided by this section. noting and protest. same. 135. In case of the dishonour of a bill the holder may re- Recovery of cover from any party liable on the bill, the drawer who has been compelled to pay the bill may recover from the acceptor, and an endorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior endorser, the damages aforesaid. 53 V., c. 33, s. 57. Eng. s. 57. As to the parties liable on a bill, see sec. 128 (acceptor), sec. 130 (drawer), secs. 131 and 133 (endorser). The "damages aforesaid" are provided for by sec. 134. Prior to 1906, the provisions of secs. 134, 135 and 136 were parts of one section. 136. In the case of a bill which has been dishonoured abroad Re-exchange and in addition to the damages aforesaid, the holder may recover interest. from the drawer or any endorser, and the drawer or an endorser who has been compelled to pay the bill may recover from any party liable to him, the amount of the re-exchange with interest thereon until the time of payment. 53 V., c. 33, s. 57. Eng. s. 57. The corresponding provision of the English Act provides for the recovery of re-exchange only "in lieu of the above damages," whereas under the Canadian Act re-exchange may be recovered "in addition" to the damages provided for by sec. 134. Apparently in the Canadian Act the word re-exchange is Re-exused to signify, not the whole amount of the damages (exclusive change, meaning of. of interest) as used in the English Act and as explained by Byles, J., in Susé v. Pompe, 1860, 8 C.B.N.S. 538, 565, but the excess of those damages over the amount of the bill and the Sec. 136. Re-exchange, meaning of. Transferrer expenses of noting and protest. (Cf. Willans v. Ayres, 1877, 3 App. Cas. 133, 144, and judgments in In re Gillespie, Ex parte Robarts, 1886, 16 Q.B.D. 702, 18 Q.B.D. 286.) The wording of the Canadian Act renders inapplicable the decision in In re Commercial Bank, 1887, 36 Ch. D. 522, in which it was held that the only damages which the holder of a bill dishonoured abroad can recover are the amount of the re-exchange, with interest thereon, as provided by sub-sec. 2 of sec. 57 of the South Australian Act [sec. 136], and that he has no option to sue for interest under sub-sec. 1 [sec. 134]. This re-exchange must be distinguished from the expenses or damages in the nature of re-exchange which the person suing may have had to pay under the foreign law to the holder of a foreign bill drawn upon an acceptor in Canada. (Cf. In re Gillespie, in notes to sec. 134.) The re-exchange in the sense used in the English Act, is ascertained by proof of the sum for which a sight bill (drawn at the time and place of dishonour at the then rate of exchange on the place where the drawer or endorser sought to be charged resides) must be drawn in order to realize at the place of dishonour the amount of the dishonoured bill and the expenses consequent on its dishonour. (De Tastet v. Baring, 1809, 11 East, at p. 269; Susé v. Pompe, supra.) The expenses consequent on dishonour are the expenses of protest, postage, customary commission and brokerage, and, when a re-exchange bill is drawn, the price of the stamp. Chalmers, p. 196. The holder is entitled to draw a re-exchange bill upon the party liable. If the drawee accepts and pays such bill, he fulfils his contract of indemnity. According to English practice the re-exchange bill is now seldom drawn, but the right of the holder to draw it is settled by the law merchant, and it is only by a reference to this supposed bill that the re-exchange, in other words, the true damages in an action on the original bill, can be scientifically understood and computed. (In re Commercial Bank, 1887, 36 Ch. D. at p. 528.) 137. Where the holder of a bill payable to bearer negoby delivery. tiates it by delivery without endorsing it, he is called a 'trans ferrer by delivery.' 2. A transferrer by delivery is not liable on the instrument. 53 V., c. 33, s. 58. Eng. s. 58. Sec. 137. Liability of. No person is liable as endorser who has not signed the bill Transferor (sec. 131), but the transferor by delivery, by the act of negotiat- by delivery. ing it gives a warranty to his immediate transferee, being a holder for value, in the terms mentioned in sec. 138. See sec. 2 as to "holder" and "delivery," and sec. 21 as to "bill payable to bearer." As to negotiation, see sec. 60. A transfer by delivery is frequently spoken of as a sale of the bill. This is of course a different transaction from the sale of a bill or draft payable in another place as a means of enabling the buyer to remit money. Cf. supra, pp. 135, 141. by. 138. A transferrer by delivery who negotiates a bill thereby Warranty warrants to his immediate transferee, being a holder for value, (a) that the bill is what it purports to be; A transferor by delivery is not liable on the instrument (sec. 137), but as an incident of the contract of sale he warrants the genuineness of the instrument, like an ordinary vendor of a chattel. When the transferee discovers the defect in the bill, he must repudiate the transaction with reasonable diligence. (Pooley v. Brown, 1862, 31 L.J.C.P. 134.) Genuineness. Chalmers (p. 199) gives the following illustrations of this Liability of section: 1. C. discounts with D. a bill payable to bearer without endorsing it. It turns out that, unknown to C., the amount of the bill had been fraudulently altered by a previous holder. D. can recover from C. the money paid. (Jones v. Ryde, 1814, 5 Taunt. 488; cf. Burchfield v. Moore, 1854, 23 L.J.Q.B. 261.) transferor by delivery. Sec. 138. transferor 2. A bill broker discounts with a bank a bill endorsed in Liability of blank by the payee. The endorser absconds, and the signatures of the drawer and acceptor turn out to be forgeries. The bank. can recover the money paid from the broker. (Fuller v. Smith, 1824, R. & M. 49.) by delivery. 3. An agent gets a bank to discount a bill drawn and endorsed in blank by his principal, and then pays over the money to his principal. The signature of the acceptor was a forgery, but the agent did not know it. The drawer fails. The bank cannot recover from the agent. (Ex parte Bird, 1851, 4 De G. & S. 273.) 4. The bonâ fide holder of a bill purporting to be drawn by A., accepted by B., and endorsed in blank by C., discounts it with a banker. It turns out that the signatures of A. and B. were forgeries, and that C., whose endorsement was genuine, is insolvent. The banker can recover from the holder the money he paid. (Gurney v. Womersley, 1854, 24 L.J.Q.B. 46; Merriam v. Wolcott, 1861, 85 Mass. 258.) CHAPTER XLVI. DISCHARGE OF BILL. A bill is discharged when all rights of action on it are extinguished. The bill then ceases to be negotiable. (Cf. Harmer v. Steele, 1849, 4 Ex. 1, 4 R.C. 515.) A bill may be discharged by payment in due course (sec. 139), by renunciation (sec. 142), by cancellation (secs. 143 and 144), by material alteration (secs. 145 and 146). It is also discharged when the acceptor is or becomes the holder of the bill, at or after its maturity, in his own right (sec. 141). The discharge of a bill must be distinguished from the dis- Discharge of bill distincharge of one or more of the parties thereto, e.g., a particular endorser may be discharged by want of notice of dishonour, discharge of guished from while the drawer and other endorsers remain liable on the bill; party. or an endorser may be discharged as regards a particular party but not as against subsequent parties (cf. sec. 96). Again, liabilities arising out of the bill transaction, as distinguished from liabilities on the bill itself, may or may not be extinguished by the discharge of the bill. For instance, if one of three joint acceptors pays a bill, it is discharged, but he personally has a right of contribution from his co-acceptors (Harmer v. Steele, supra). If an accommodation acceptor pays a bill it is discharged, but he has a personal right of action for indemnity. If an acceptance be given for a debt, and the acceptance is paid, both the bill and the debt are discharged. Chalmers, p. 202. The discharge of a party from his liability on a bill, as distinguished from the discharge of the bill, is also subject to the general rules of the provincial law of property and civil rights. The liability may, in the province of Quebec, be extinguished by payment, by novation, by release, by compensation, by confusion, by prescription, etc. Discharge of Bill. 139. A bill is discharged by payment in due course by or Payment. on behalf of the drawee or acceptor. |