$ 46.

it becomes due he becomes insolvent and absconds. Presentment at 1, X. Street, is not dispensed with.1

This sub-section is declaratory.2 In some American States there is a tendency to dispense with the attempt to make presentment when such attempt would be futile.3 This tendency is of doubtful expediency, and finds no favour in England, compare sect. 45 (5), and sect. 50 (2), and notes thereto.

(b) Where the drawee is a fictitious person.

This is declaratory. The fact that the drawee is a person not having capacity to contract does not excuse presentment for payment, unless the case falls within the next clause, though it does excuse presentment for acceptance: see sect. 41 (2), ante, p. 137.

(c) As regards the drawer, where the drawee or acceptor is not bound, as between himself and the drawer, to accept or pay the bill, and the drawer has no reason to believe that the bill would be paid if presented.

(d) As regards an indorser, where the bill was accepted or made for the accommodation of that indorser, and he has no reason to expect that the bill would be paid if presented.

ILLUSTRATIONS.

1. Bill payable to drawer's order is accepted and indorsed to accommodate the drawer. The drawer discounts it, but does not provide the acceptor with funds to meet it at maturity. Presentment is not necessary to charge the drawer, but is necessary to charge the accommodation indorser."

5

1 Sands v. Clarke (1849), 19 L. J. C. P. 84; Pierce v. Cate (1853), 66 Massachus. R. 190.

2 Cf. Pothier, Nos. 144-147; Re East of England Banking Co. (1868), L. R. 4 Ch. at p. 18.

3 See, e.g., Foster v. Julien (1861), 24 New York R. 28.

4 Smith v. Bellamy (1817), 2 Stark. 223.

5 Terry v. Parker (1837), 6 A. & E. 502.

6 Saul v. Jones (1858), 28 L. J. Q. B. 37; cf. Turner v. Samson (1876),

2 Q. B. D. 23, C. A.

2. A cheque is drawn on the Union Bank, the drawer not having sufficient funds there to meet it, and having no reason to expect that it will be honoured. Presentment is not necessary to charge the drawer.1

Compare sect. 50 (2) (c) and (d), post, pp. 167, 168, and notes thereto; also Pothier, No. 157.

§ 46.

(e) By waiver of presentment, express or Waiver. implied.

This is declaratory. Compare sect. 50 (2) (b), post, p. 165, as to notice of dishonour. The waiver may be either before or after the time for presentment. As to express stipulation in the bill waiving presentment, see sect. 16 (2), ante, p. 40. Waiver of notice of dishonour does not of itself include a waiver of presentment for payment.3 German Exchange Law, Art. 42, provides that when the drawer or indorser inserts the term "Protest waived," presentment for payment is not waived thereby, but it lies on such drawer or indorser to prove that the bill has not been duly presented.

See further sect. 51 (6) (b), post, p. 174, as to protest of bill previously dishonoured by non-acceptance.

non-payment.

47. (1) A bill is dishonoured by non-pay- Dishonour by ment (a) when it is duly presented for payment and payment is refused or cannot be obtained, or (b) when presentment is excused and the bill is overdue and unpaid.

(2) Subject to the provisions of this Act, when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer and indorsers accrues to the holder.

1 Wirth v. Austin (1875), L. R. 10 C. P. 689; cf. Re Bethell, W. N. 1887, p. 17.

Hopley v. Dufresne (1812), 15 East, 275; cf. Ex parte Bignold (1836), 1 Deac. at p. 737; Sheldon v. Horton (1870), 43 New York R. 93.

3 Hill v. Heap (1823), D. & R. N. P. C. 57. So held also in Louisiana, Wilkins v. Dawes (1862), 20 La. An. 538; aliter, in New York, Coddington v. Davis (1848), 1 New York R. 187.

§ 47.

Presentment to charge stranger.

Notice of dishonour and

effect of non. notice.

This is declaratory. For the provisions referred to, see sects. 65-68, post, pp. 226-232, as to acceptance and payment for honour. As a general rule the holder's right of action against a drawer or indorser dates from the time when notice of dishonour is or ought to be received and not from the time when it is sent; and in any case there is no right of action till the day after dishonour. The right of recourse must be distinguished from the right of action.3

Presentment for payment to charge Stranger to Bill.

Presentment for payment is not generally a condition precedent to the liability of a person who has given a guarantee for the payment of a bill by the acceptor. The reason is that presentment is not necessary to charge the acceptor or maker (sect. 52 (1)). If the drawer were the party guaranteed, or, perhaps, if the acceptance were qualified, presentment would be necessary.

A person who is not a party to a bill, but who is liable. on the consideration for which it is given, is discharged by the holder's omission to present it for payment.5 The same diligence is not requisite in this case as is necessary to charge a party to the instrument. It is sufficient that the holder does what is reasonable to obtain payment."

48. Subject to the provisions of this Act, when a bill has been dishonoured by non-acceptance or by non-payment, notice of dishonour must be

8

1 Ex parte Moline (1812), 1 Rose, 303; Siggers v. Lewis (1834), 1 C. M. & R. 370.

2 Castrique v. Bernabo (1844), 6 Q. B. 498; see note on Statute of Limitations, post, p. 289.

3 Kennedy v. Thomas, (1894) 2 Q. B. 759, C. A.

4 Walton v. Mascall (1844), 13 M. & W. 452; Nouguier, § 1192; cf. Hitchcock v. Humfrey (1843), 5 M. & Gr. 559; Black v. Ottoman Bank (1862), 15 Moore P. C. 472, 484; Carter v. White (1883), 25 Ch. D. 666, C. A.

Anderton v. Beck (1812), 16 East, 248; Hopkins v. Ware (1869), L. R. 4 Ex. 268; Cf. Straker v. Graham (1839), 4 M. & W. 721, presentment for acceptance.

6 Sands v. Clarke (1849), 8 C. B. at p. 761, Maule, J.; Smith v. N. S. Wales Bank (1872), 8 Moore, P. C. N. S. at pp. 461-463, Mellish, L.J. See e.g., Robson v. Oliver (1847), 10 Q. B. 704, at p. 717.

7 For provisions referred to, see sect. 50, excuses for non-notice and delay. 8 Cf. sects. 43 and 47, defining dishonour by non-acceptance and nonpayment.

given to the drawer and each indorser, and any drawer or indorser to whom such notice is not given is discharged; Provided that—

(1) Where a bill is dishonoured by non-acceptance, and notice of dishonour is not given, the rights of a holder in due course 2 subsequent to the omission, shall not be prejudiced by the

omission."

(2) Where a bill is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment unless the bill shall in the meantime have been accepted.

ILLUSTRATION.

A bill bearing indorsement is dishonoured, and the holder gives notice of dishonour to the indorser but not to the drawer. If the indorser in turn sends a notice of dishonour to the drawer, the holder can sue both indorser and drawer. If this be not done the holder can sue the indorser, but the indorser cannot sue the drawer.

When the drawer or indorser of a bill is discharged from his liability thereon by the omission to give him due notice of dishonour, he is also discharged from any liability on the consideration therefor.5

Under French Code, Arts. 168-170, the omission to give due notice of protest discharges the indorsers, but the drawer is not discharged unless he can show that the drawee had sufficient effects in his hands when he dishonoured the bill. Under German Exchange Law, Art. 45, the omission to give due notice of protest deprives the holder of his right to interest and damages, but he can still

1 Berridge v. Fitzgerald (1869), L. R. 4 Q. B. at p. 642.

2 See sect. 29, defining holder in due course.

3 Roscow v. Hardy (1810), 12 East, 434; Dunn v. O'Keeffe (1816), 5 M. & S. 282.

4 Cf. Rickford v. Ridge (1810), 2 Camp. at p. 538; Miers v. Brown (1843), 11 M. & W. 372; sect. 49 (3), (4), post.

5 Bridges v. Berry (1810), 3 Taunt. 130; Peacock v. Purssell (1863), 14 C. B. N. S. 728.

§ 48.

§ 48.

Rules as to notice of dishonour.

By whom to be given.

By whom notice of dishonour to be given.

recover the amount of the bill, unless his omission has caused actual damage.

"Notice of dishonour" means notification of dishonour, i.e., formal notice. The fact that the drawer or indorser of a bill knows that it has been dishonoured does not dispense with the necessity for giving him notice of dishonour. Pothier (No. 147), speaking of protests, lays down a similar rule: "la raison est que les formalités établies par les lois pour donner à quelqu'un la connaissance de quelque fait, ne se suppléent point, et ne s'accomplissent pas par équipollence." As regards notes and inland bills, notice of dishonour is the English substitute for protest.3 As regards foreign bills notice of dishonour is supplementary to protest.* Under French Code, Arts. 165, 166 (modified by law of May 3, 1862, cf. Nonguier, §§ 10861099), and German Exchange Law, Arts. 45-47, notice of protest must be given within certain definite limits of time. See post, p. 172.

49. Notice of dishonour in order to be valid and effectual must be given in accordance with the following rules 5:—

(1) The notice must be given by or on behalf

of the holder, or by or on behalf of an indorser who, at the time of giving it, is himself liable on the bill.6

(2) Notice of dishonour may be given by an agent, either in his own name or in the name of any party entitled to give notice whether that party be his principal or not.7

1 Burgh v. Legge (1839), 5 M. & W. at p. 422, Alderson, B.; Carter v. Flower (1847), 16 M. & W. at p. 749, Parke, B.

2 Micrs v. Brown (1843), 11 M. & W. 372; East v. Smith (1847), 16 L. J. Q. B. 292; cf. Caunt v. Thompson (1849), 18 L. J. C. P. 125.

3 Solarte v. Palmer (1833). 7 Bing. at p. 533.

Exp. Lowenthal (1874), L. R. 9 Ch. 591. The notice is not bad because

it does not state that the bill has been protested.

The fifteen rules which follow are declaratory, except that rules 5 and 6

somewhat modify the stringency of the common law.

6 See Chapman v. Keane (1835), 3 A. & E. 193; Story, § 304; cf. Harrison v. Ruscoe (1846), 15 M. & W. at pp. 234, 236.

7 Cf. Harrison v. Ruscoe (1846), 15 M. & W. at p. 235.