66

(1822). Acceptance in commercial language is also § 2. sometimes used to designate a bill that has been accepted, but it is not used in this sense in the Act. "Delivery here is also used in the technical sense defined in clause (f) of the present section. "Notification " is not defined in the Act, but is described in section 21, and may be either written or verbal.

The definition and requisites of a valid acceptance are given in section 17.

(b) The expression

claim and set-off

;

"Action" includes counter "Action."

The word "action" is not often used in the Act. It is found in sections 24, 30, 52, 69, 86 and 93. The procedure in the provincial courts, in which actions on bills and notes are brought, is within the exclusive jurisdiction of the local legislatures: B. N.A. Act, s. 92, s-s. 14. The Dominion Parliament has however the right to interfere with this procedure in so far as may be necessary to deal fully with the subject of bills and notes: See Cushing v. Dupuy, 5 App. Cas. at p. 415 (1880). Most of the provinces have special provisions in their statutes and rules regulating the procedure of their courts, as to actions on bills and notes. These have not been repealed by the present Act, and extracts from them will be found in the appendix.

Mr. Pitt Lewis in his work on County Court Practice, quoted with approval by Cockburn, C. J. in Stooke v. Taylor, 5 Q. B. D. 577 (1880), says: "A set-off would set-off, seem to be of a different nature from a defence (? counter claim) inasmuch as a set-off appears to shew a debt balancing the debt claimed by the plaintiff, and thus leaving nothing due to him; while a counter claim, it

§ 2. would seem, consists of a cross claim, not necessarily extinguishing or destroying the plaintiff's demand. In other words, a set-off appears to consist of a defence to the original claim of the plaintiff, a counter claim is the assertion of a separate and independent demand, which does not answer or destroy the original claim of the plaintiff. The right to rely on a set-off has long existed. The right to set up a counter claim was first given by the Judicature Acts." See also Gathercole v. Smith, 7 Q. B. D. 626 (1881); Pellas v. Neptune Marine Ass. Co., 5 C. P. D. 34 (1879).

Counterclaim.

Under the Imperial and Ontario Judicature Acts there have been conflicting decisions as to whether a counter claim was to be considered as a defence or as an action : see Vavasseur v. Krupp, 15 Ch. D. 474 (1877); Beddall v. Maitland, 17 Ch. D. 174 (1879); Irwin v. Brown, 12 Ont. P. R. 639 (1888).

In Ontario, provision is made in Consolidated Rule 373, under the Judicature Act which reads as follows; "A defendant in an action may set up by way of counter claim, against the claim of the plaintiff, any right or claim whether the same sound in damages or not. (a) A counter claim shall have the same effect as a statement of claim in a cross action, so as to enable the court to pronounce a final judgment in the same action, both on the original, and on the cross claim."

Set off corresponds approximately to compensation under the civil law. The Quebec Civil Code, Art. 1188 says: "Compensation takes place by the sole operation of law between debts which are equally liquidated and demandable and have each for object a sum of money or a certain quantity of indeterminate things of the same kind and quality. So soon as the debts exist simultaneously

they are mutually extinguished in so far as their respective § 2. amounts correspond."

demand.

Counter claim is analogous to an incidental demand by Incidental a defendant in Quebec. The Code of Civil Procedure, Art. 151, says: "The defendant may set up by incidental demand any claim of his arising out of the same causes as the principal demand, and which he cannot plead by exception. When the principal demand is for the payment of a sum of money, the defendant may also make an incidental demand upon any claim for money arising out of other causes; but such an incidental demand is distinct from and cannot retard the principal action. The court, whenever it renders judgment upon both demands at the same time, may order compensation, if the case admits of it."

(c) The expression "Bank" means an incor- “Bank.” porated bank or savings bank carrying on business in Canada;

"Banker"

The Bill

Parliament

The corresponding word in the Imperial Act is Banker," which "includes a body of persons whether incorporated or not who carry on the business of banking." There the business is carried on largely by individuals or unincorporated bodies. as introduced into the Canadian used the term and and also adopted the English definition. As the business is carried on in Canada chiefly by incorporated banks operating under the provisions of the Bank Act, 53 Vict. c. 31, and savings banks operating under 53 Vict. c. 32, both of which came into force on the 1st of July, 1891, it was determined to restrict to these corporations the provisions relating to banking. They will be found in Part III of the Act, sections 72 to 81 inclusive. As our Parliament refused to adopt the principle laid down in section 60 of the Imperial

§ 2. Act which protects a banker who has paid a demand bill or a cheque on a forged indorsement, the omission of private banks from the definition and their exclusion from the provisions and privileges of the Act is not of so much consequence.

"Bearer."

"Bill,"

Formerly private bankers might use the words "bank," "banking company," "banking house," "banking association," or "banking institution," provided the words "not incorporated" were added. Now, however, any private person or body using any of these terms is guilty of a misdemeanor and liable to a fine not exceeding $1000, or to imprisonment for a term not exceeding 5 years, or to both 53 Vict. c. 31, ss. 100, 101.

(d) The expression "Bearer" means the person in possession of a bill or note which is payable to bearer;

A bill is payable to bearer which is expressed to be so payable or on which the only or last indorsement is an indorsement in blank section 8, s-s. 3. Where a person acquires a bill for value from the holder to whose order it is payable without its being endorsed, he does not thereby become the "bearer" or entitled to the rights of a bearer under the Act; he merely acquires the rights of a transferee of a chose in action, and the right to have the indorsement of the transferrer: section 31, S-s. 4. On obtaining such indorsement he would become the "bearer" of the bill. The bearer need not be the owner of a bill.

(e) The expression "Bill" means bill of ex"Note." change, and "Note" means promissory note; A bill of exchange is defined in section 3, and a promissory note in section 82. The latter does not include bank

notes. A cheque is defined in section 72 as a bill of § 2. exchange drawn on a bank, payable on demand. Where the word "Bill" is used in the Act, it includes a cheque, unless in case of some conflicting provision in Part III. It also includes a promissory note, unless found in some portion of the Act within the exceptions mentioned in section 88.

(f) The expression "Delivery" means transfer "Delivery." of possession, actual or constructive, from one person to another;

A person has constructive possession of a bill when it is in the actual possession of his servant or agent on his behalf. Delivery does not always imply an actual transfer from one possessor to another. A person who holds a bill for another may become the owner of it himself; a person who holds a bill for himself may become the holder of it for another; a person who holds a bill for one party may become the holder of it for another. In each of these cases there is "delivery" without any actual change of possession, and a sufficient delivery to comply with the requirements of section 21, and make the contract of the drawer, acceptor or indorser, as the case may be, complete and irrevocable. Where bankers indorsed a note to a customer, and put it in an envelope with his papers, at the same time making appropriate entries of the transaction in their books, it was held to be a sufficient delivery to him, and that a subsequent assignment of the bankers could not defeat it: Williams v. Galt, 95 Ill. 172 (1880). For a definition of the word "person" see the Interpretation Act, R. S. C. c. 1, s. 7 (22).

(g) The expression "Holder" means the payee "Holder." or indorsee of a bill or note who is in possession of it, or the bearer thereof;