Lost or destroyed

instruments.

Holder to have duplicate of lost bill.

Refusal.

CHAPTER XLVIII.

LOST INSTRUMENT.

At common law when a negotiable bill has been lost or destroyed no action can be maintained either on the instrument or on the consideration for it (Crowe v. Clay, 1854, 9 Ex. 604, 4 R.C. 648), even if the instrument is lost when overdue (Hansard v. Robinson, 1827, 7 B. & C. 90), or if it is payable to order and not endorsed. (Ramuz v. Crowe, 1847, 1 Ex. 167.)

The fact that a bill has been lost or destroyed does not excuse the omission to demand payment or to give notice of dishonour (Thackray v. Blackett, 1812, 3 Camp. 164). Protest may be made on a copy or written particulars of a lost or destroyed bill (sec. 120).

But if a bill or note not negotiable, i.e., an instrument payable to the payee only and with words restraining transfer, be lost, it is conceived that an action will lie either on the bill or on the consideration. Byles, 16th ed. p. 394. But the defendant may be entitled to require an indemnity under sec. 157.

Lost Instruments.

156. Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer, if required, to indemnify him against all persons whatever, in case the bill alleged to have been lost shall be found again.

2. If the drawer, on request as aforesaid, refuses to give such Compulsion. duplicate bill, he may be compelled to do so. 53 V., c. 33, s. 68. Eng. s. 69.

This section reproduces the effect of 9 and 10 Will. 3, c. 17, s. 3. That act applied only to inland bills for £5 or upwards. The remedy is still very inadequate, as it gives no power to obtain an endorsement or acceptance over again. Chalmers, p. 236.

lost bill.

157. In any action or proceeding upon a bill, the court or Sec. 157 a judge may order that the loss of the instrument shall not be Action on set up, provided an indemnity is given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question. 53 V., c. 33, s. 69. Eng. s. 70.

Apart from this section, the holder of a lost bill cannot sue either on the bill or on the consideration. (Tessier v. Caillé, 1902, Q.R. 25 S.C. 207; and ef. notes, supra.)

This section reproduces the provisions of 17 and 18 Vict., c. 125, with an extension of its provisions to all courts. Chalmers, p. 237.

It has been held that the section applies to non-negotiable instruments and gives the person liable on such instruments the right to require an indemnity. (Pillow v. Lespérance, 1902, Q. R. 22 S.C. 213.)

If no tender of an indemnity were made before suit, the court may refuse the plaintiff the costs of the suit. (King v. Zimmerman, 1871, L.R. 6 C.P. 466; Banque Jacques Cartier v. Strachan, 1869, 5 P.R. 159; Tessier v. Caillé, supra.)

In an action on a lost note, when the loss is pleaded, the plaintiff should, in general, tender the defendant a proper bond of indemnity with a sufficient surety or sureties before applying to set aside the plea under sec. 157, in order to avoid paying the costs of this defence and of the application. (Orton v. Brett, -1899, 12 Man. R. 448.)

Although the words of the statute are that an indemnity be given to the satisfaction of the court or a judge," the security may be left to the master to settle. (Ibid.)

The defence that the bill was lost before action brought must, in the superior courts, be raised by plea, otherwise the plaintiff may recover by producing the ordinary secondary evidence. (Blackie v. Pidding, 1848, 6 C.B. 196; Charnley v. Grundy, 1854, 14 C.B. 608). And a judge had formerly no power to order a stay of proceedings until an indemnity be given. (Byles, p. 394.)

Indemnity.

CHAPTER XLIX.

BILL IN A SET.

Foreign bills are often drawn in parts called the first of exchange, the second, etc., all the parts in a set constituting one bill (sec. 158). The several parts are made on separate pieces of paper, each part being numbered and referring to the other parts (sec. 158). Each part usually contains a condition that it shall continue payable only so long as the others remain unpaid. One part may be forwarded for acceptance, while the other is delivered to an endorsee, thus relieving him from the necessity of forwarding his part for acceptance, but giving him the endorser's security immediately and diminishing the chances of losing the bill.

A part of a set (duplicata or exemplaire) must be distinguished from a "copy" (copie); cf. sec. 62.

Secs. 158 and 159 do not apply to promissory notes: see sec. 186.

Bills in set.

Acceptance.

Bill in a Set.

158. Where a bill is drawn in a set, each part of the set being numbered, and containing a reference to the other parts, the whole of the parts constitute one bill.

2. The acceptance may be written on any part, and it must be written on one part only. 53 V., c. 33, s. 70. Eng. s. 71.

If one part of a set omit reference to the other parts, it becomes a separate bill in the hands of a holder in good faith. Chalmers, p. 238.

It has been held that an agreement to deliver up an unaccepted bill drawn in a set is an agreement to deliver up all the parts in existence (Kearney v. West Grenada Co., 1856, 26 L.J. Ex. 15); and that a person who negotiates a bill drawn in a set is bound to deliver up all the parts in his possession, but by negotiating one part he does not warrant that he has the rest. (Pinard v. Klockman, 1863, 32 L.J.Q.B. 82.)

As to the liability of a holder who endorses two or more parts Sec. 158. to different persons, see sec. 159.

The acceptance must be written on one part only. If the Acceptance drawee accepts more than one part, and such accepted parts get of bill in a into the hands of different holders in due course, the acceptor

is liable on every such part as if it were a separate bill (sec. 159).

set.

more than

159. Where the holder of a set endorses two or more parts Endorsing to different persons, he is liable on every such part, and every one part. endorser subsequent to him is liable on the part he has himself endorsed as if the said parts were separate bills.

2. Where two or more parts of a set are negotiated to differ- Negotiation to different ent holders in due course, the holder whose title first accures is, holders. as between such holders, deemed the true owner of the bill: Provided that nothing in this subsection shall affect the rights Acceptance of a person who in due course accepts or pays the part first pre- course. sented to him.

in due

one part

3. If the drawee accepts more than one part, and such More than accepted parts get into the hands of different holders in due accepted. course, he is liable on every such part as if it were a separate bill.

to

accepted.

4. When the acceptor of a bill drawn in a set pays it without Part requiring the part bearing his acceptance to be delivered up him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof.

Payments without delivery.

5. Subject to the provisions of this section, where any one Discharge. part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged. 53 V., c. 33, s. 70. Eng. s. 71.

The drawer signs all the parts of a set; an endorser does not Endorsealways sign all the parts that he holds. Inasmuch as the whole ment of bill in a set. bill is discharged if any one part is discharged, it is doubtful whether an endorser, before paying a dishonoured bill, can require all the parts which bear his endorsement to be delivered up to him or accounted for. (Cf. Société Générale v. Metropolitan Bank, 1873, 27 L.T.N.S. at p. 854.)

As to holder in due course, see sec. 56.

CHAPTER L.

CONFLICT OF LAWS.

Prior to 1906 the provisions now contained in secs. 160 to 164 were all comprised in one section, as they are in the English Act, and all the clauses were governed by the words which introduced the section, namely, "where a bill drawn in one country is negotiated, accepted or payable in another, the rights duties and liabilities of the parties thereto are determined as follows": Conflict of laws may arise between two or more provinces of the Dominion, and doubtless the word "country," as used in sec. 160, includes province.

As between different provinces, a conflict of laws may arise: (1) in regard to the provisions of the Act which create special rules for the Province of Quebec, e.g., as to non-juridical days (see secs. 43 and 164) or protest (see secs. 114 and 162); and (2) in regard to matters not expressly or impliedly provided for by the Act and not governed by the law merchant within sec. 10. Such matters include the law relating to capacity, limitations and prescription, set-off and compensation, evidence, principal and surety, joint and several liability, illegality, payment and discharge.

In theory questions of conflict of laws may arise in regard to this second class of matters between any two provinces, as they may between a particular province and a foreign country, but practically the only conflict within Canada that is likely to arise is that between the Province of Quebec and one of the other provinces.

Capacity.

When laws conflict, capacity is for some purposes determined according to the lex domicilii of the contracting party, but for mercantile purposes it is probably determined by the lex loci contractus. (Chalmers, p. 62; Westlake's International Law, 4th ed., 1905, p. 43; Dicey's Conflict of Laws, pp. 546, 547.)

But the courts of Quebec make no distinction in this respect between mercantile and other contracts. Thus, although under