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Person liable on consideration.
but with the drawer's name in blank. X. as surety deposited certain stock certificates with the creditor as collateral security. The acceptor died insolvent, without the creditor having inserted any drawer's name. The bill was never presented for payment, and no notice was given to X. Held that X. was not discharged.
In America the cases conflict. The balance of authority inclines to the view that notice of dishonour need not be given to a guarantor.? It is prudent to give a guarantor some notice.
A person who is not a party to a bill, but who is liable on the consideration for which it is given, is (probably) entitled to notice of dishonour. Thus:
1. X. buys goods from D. to be paid for “ by approved banker's bill."° C., who is X.'s broker, obtains a banker's bill payable to his own order and indorses it to D. If the bill be dishonoured, X. (probably) is not liable for the price of the goods, unless he receives notice of dishonour.
2. C., the holder of a note payable to bearer on demand, transfers it to D., without indorsing it, to pay for goods supplied by D. If the note be dishonoured, C. is not liable for the price of the goods, unless he received notice of dishonour.4
It seems from the last-cited cases that the same strict and technical notice of dishonour is not requisite to charge a person liable on the consideration as is requisite to charge a party liable on the bill. This is fair, for in the one case the liability is transferable, in the other it is not, and therefore all defences between the parties can be inquired into. A distinction might be drawn between persons liable on the consideration who have, and who have not, been holders of the bill.5
Noting inland bill.
51. (1) Where an inland bill has been dishonoured it
may, if the holder think fit, be noted
· Carter v. White (1883), 25 Ch. D. 666, C. A.
See e.g., Brown v. Curtis (1849), 2 New York R. 225 : contra, Poote v. Brown (1841), 2 McClean, 369.
3 Smith v. Mercer (1867), L. R. 3 Ex. 51 ; contra, Swinyard v. Boves (1816), 5 M. & S. 62, not cited.
* Camidge v. Allenby (1827), 6 B. & C. 373 ; Turner v. Stones (1843), 1 D. & L. 122; Robson v. Oliver (1847), 10 Q. B. 704, cases on country balk notes : cf. sect. 58, post, p. 194.
5 Cf. Camidge v. Allenby (1827), 6 B. & C. at p. 381.
for non-acceptance or non-payment, as the case $ 51. may be; but it shall not be necessary to note or protest any such bill in order to preserve the recourse against the drawer or indorser.
By “noting" is meant the minute made by a notary public on a dishonoured bill at the time of its dishonour. The formal notarial certificate, or protest, attesting the dishonour of the bill is based upon the noting.
The “noting" consists of the notary's initials, the date, the noting charges, and a mark referring to the notary's register written on the bill itself. The notarial registers bear certain letters upon them, and a corresponding letter is put upon the bill as a mark. A ticket or label is also attached to the bill on which is written the answer given to the notary's clerk who makes the notarial presentment, e.g.,
no orders," no advice,” or “no effects.” Before sending out the bill the notary makes a full copy of it in his register, and then subsequently adds the answer given, if any."
By sect. 73 this provision applies to cheques, and by sect. 89 to promissory notes. By sect. 57 the expenses of noting can be recovered as liquidated damages.
This Act attaches no legal consequence to noting an inland bill, except by making it a necessary preliminary to acceptance or payment for honour: see sects. 65 and 67. For business purposes noting is usually taken as showing due presentment. For purposes of summary diligence in Scotland an inland bill must be protested as heretofore : sect. 98, post, p. 284. (2) Where a foreign bill, appearing on the Protest of
foreign bill. face of it to be such, has been dishonoured by non-acceptance it must be duly protested for nonacceptance, and where such a bill, which has not been previously dishonoured by non-acceptance, is dishonoured by non-payment it must be duly protested for non-payment. If it be not so
* Brooks' Notary, 4th ed. p. 80 ; and evidence before Select Committee on Bank Holidays Bill, 1868, see at pp. 51-53.
protested the drawer and indorsers are discharged. Where a bill does not appear on the face of it to be a foreign bill, protest thereof in case of dishonour is unnecessary.
See “foreign bill,” defined by sect. 4. By sect. 89 (4), post, p. 271, protest of a foreign note is unnecessary. As to protest for purposes of summary diligence in Scotland, see note to sect. 98, post, p. 284. By sect. 52 (3), protest is not necessary in order to charge the acceptor of a bill.
The notice of dishonour is not bad because it omits to state that the bill has been protested. As to notice of protest under the foreign codes, see ante, p. 162.
(3) A bill which has been protested for nonacceptance may be subsequently protested for non-payment.
Protest in such case might be necessary for the purpose of charging a foreign drawer or indorser in his own country. An English Act can only lay down the law for the United Kingdom, though by the comity of nations the duties of the holder would generally be regarded as regulated by the law of the place where they are to be performed. As has before been pointed out (ante, p. 140), under some of the Continental codes no right of action arises on non-acceptance; the holder can demand security from antecedent parties, but he is bound to re-present the bill at maturity.
(4) Subject to the provisions of this Act, when a bill is noted or protested, it must be noted on the day of its dishonour. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.
For the provisions referred to, see sub-sect. (6) (a), and
Time of protest.
Gale v. Walsh (1793), 5 T. R. 239 ; cf. Whitehead v. Walker (1842), 9 M. & W. 506.
? Ex parte Lowenthal 4), L. R. 9 Ch. 591, and see ante, p. 154.
3 See M«Pherson v. Vright (1885), 12 Sess. Cas. 942, Scotch protest for diligence.
sub-sect. (9). The provisions of this sub-section as to the § 51. extension of the protest are supplemented by sect. 93. post, p. 279.
Before the Act it was not clear that a bill could not be lawfully noted for protest on the day after its dishonour; but the business members of the Select Committee were unanimous in thinking that noting on the day of dishonour should be made obligatory. By French Code, Art. 162, a bill is to be protested for non-payment on the day after it is due. By German Exchange Law, Art. 41, a dishonoured bill may be protested for non-payment on the day it is due, and it must not be protested later than the second day after. See the laws of different nations on the point collected: Nouguier, $ 1270.
(5) Where the acceptor of a bill becomes bank- Protest for rupt or insolvent or suspends payment before it security
. matures, the holder may cause the bill to be protested for better security against the drawer and indorsers.
See Brooks' Notary, 4th ed., pp. 88, 219. Under some of the Continental codes, when the acceptor fails during the currency of a bill, security can be demanded from the drawer and indorsers. English law provides no such remedy, and the only effect of such a protest in England is that the bill may be accepted for honour. In France, if the acceptor fails, the bill may at once be treated as dishonoured and protested for non-payment.
(6) A bill must be protested at the place where Place of it is dishonoured. 3
protest Provided that(a) When a bill is presented through the post
office, and returned by post dishonoured, it
1 See, e.g., German Exchange Law, Art. 29; Netherlands Code, Arts. 177, 17 .
French Code, Art. 163; Nouguier, 1277. 3 Cf. Mitchell v. Baring (1829), 10 B. & C. 4 ; French Code, Art. 173 and see sect. 94, post, p. 280, as to protest in places where there is n notary available.
returned and on the day of its return if received during business hours, and if not received during business hours, then not later than the next business day :
This sub-section was inserted in committee to protect a common practice of the Liverpool notaries with regard to bills drawn on cotton-spinners in Lancashire.
(6) When a bill drawn payable at the place of
business or residence of some person other than the drawee, has been dishonoured by non-acceptance, it must be protested for nonpayment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is
necessary. This sub-section reproduces the effect of the repealed. 2 & 3 Will. 4, c. 98. Suppose a bill is drawn on B. in Liverpool, “payable at the X. Bank in London.” It is dishonoured by non-acceptance. It is to be protested for non-payment in London without any further demand on B. Ordinarily the protest recites the demand on the acceptor or other payer.
(7) A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify(a) The person at whose request the bill is
protested : (6) The place and date of protest, the cause or
reason for protesting the bill, the demand made, and the answer given, if any, or the fact that the drawee or acceptor could not be found.
Requisites in form of protest.