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Allenby, 6 B. & C. 373 (1827); Smith v. Mercer, L. R. 3 $ 50. Ex. 51 (1867); Carter v. White, 25 Ch. D. 666 (1883).
As to those who have placed their names on bills in Quebec pour aval or as warrantors elsewhere, see the notes on section 56.
51. Where an inland bill has been dishonored Noting or it may, if the holder thinks fit, be noted and inland bill. protested for non-acceptance or non-payment, as the case may be; but, subject to the provisions of this Act with respect to notice of dishonor, it shall not, except in the Province of Quebec, be necessary to note or protest any such bill in order to preserve the recourse against the drawer or indorser; but in the case of a bill drawn upon any person in the Province of Quebec, or payable or accepted at any place therein, in default of protest for non-acceptance or non-payment, as the case may be, and of notice thereof, the parties liable on the bill other than the acceptor are discharged, subject, nevertheless, to the exceptions in this section hereinafter contained: Imp. Act, s. 51 (1); C. C. 2298, 2319.
Section 51 of the Imperial Act reads as follows:- Sec. 51 of "Where an inland bill has been dishonored it may, if the Act. holder think fit, be noted for non-acceptance or non-payment, as the case 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." It will be seen that the Canadian Act, for the provinces other than Quebec, is substantially the same as the Imperial Act. The words "subject to the provisions of this Act with respect to notice of dishonor," were added in the Senate, to make it clear that
$51. while inland bills need not be noted or protested, there was
no intention to relieve from the duty of giving notice of dishonor, as laid down in sections 48 and 49, when the drawer or indorsers were to be held liable.
All bills must be
By the latter part of the clause, Quebec retains its old protested law as embodied in articles 2298 and 2319 of the Civil in Quebec.
Code which required a notarial protest with notice to the drawer and indorsers of an inland as well as a foreign bill. In the other provinces the holder of an inland bill may either protest it, or merely send notices of dishonor in accordance with section 49. As a protest makes prima facie proof not only of presentation and dishonor, but also of the service of the notices, section 93, s-s. 5, the practice of protesting in these other provinces has, as a rule, been adopted. If a bill sent for acceptance or collection is not to be protested in case of dishonor, special instructions should be given by attaching a memorandum of "no protest," or otherwise.
The protesting of inland bills for non-acceptance or for better security, elsewhere than in Quebec, is only compulsory as a preliminary to an acceptance supra protest for honor: section 64; and a protest for non-payment, only as a preliminary to presentment for payment to the acceptor for honor, or referee in case of need: section 66. Conflict of In case of conflict, the laws governing presentment for
acceptance or payment, and the necessity for or sufficiency of a protest, are those of the place where the act is done or the bill is dishonored; section 71, s-s. 2 (c). This principle is recognized in the second clause of the above sub-section, which lays down the rule for the provinces other than Quebec; but according to the last clause, every inland bill drawn upon any person in Quebec, or accepted at any place in that province, must be protested in order to hold the drawer and indorsers, even if it be drawn and
made payable in another province. According to the $51. recognized rules of interpretation, this last clause being exceptional and explicit would govern, although it is certain that Parliament did not contemplate any such departure from the general rule.
The form for the noting of a bill for non-acceptance is Noting given as Form A in the first schedule to the Act
The protest of a bill need not be made out at the time, it is sufficient for the notary to make the necessary noting on the bill, and to extend it later, as of the day of the noting: section 92.
When a bill is not paid on the day it falls due, but is expected to be on the following day, it is sometimes simply noted on the day of maturity. If If it is not paid the next day as expected, the protest is extended and the notices of dishonor sent.
The present section applies to promissory notes as well as to bills and cheques, with the modifications mentioned in section 88.
2. Where a foreign bill, appearing on the face Protest of of it to be such, has been dishonored by non-accept- bill. ance, it must be duly protested for non-acceptance, and where such a bill, which has not been previously dishonored by non-acceptance, is dishonored by non-payment, it must be duly protested for nonpayment. If it is not so 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 dishonor, except as in this section. provided, is unnecessary. Imp. Act, s. 51 (2).
The words "except as in this section provided" are not in the Imperial Act, but were inserted to meet the exceptional
§ 51. provisions for the Province of Quebec in the preceding subsection. As to what is a foreign bill, see section 4. Foreign notes as well as bills should be protested in order to bind the indorsers: section 88, s-s. 4.
Time for noting.
Chalmers says (p. 2) that this sub-section alters the law in England. He probably refers to the last clause which agrees with section 4, s-s. 2. The first clause is part of the law merchant: Rogers v. Stephens, 2 T. R. 713 (1788); Gale v. Walsh, 5 T. R. 239 (1793); Orr v. Maginnis, 7 East, 359 (1806).
3. A bill which has been protested for nonacceptance, or a bill of which protest for nonacceptance has been waived, may be subsequently protested for non-payment. Imp. Act, s. 51 (3).
The above provision regarding a waiver of protest for non-acceptance is not in the Imperial Act. The holder may upon dishonor by non-acceptance either proceed at once against the drawer and indorsers: section 43, s-s. 2; or he may hold the bill until its maturity and present it for payment.
4. Subject to the provisions of this Act, when a bill is protested the protest must be made or noted on the day of its dishonor. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting: Imp. Act, s. 51 (4).
The Imperial Act reads, "when a bill is noted or protested it must be noted on the day of its dishonor." The circumstances which excuse delay in protesting or noting, or dispense with protest, are to be found in sub-section 6 (a), and sub-section 9. See section 92 for similar pro
visions. If the bill has been duly noted, the protest may § 51. be completed even during the trial. Orr v. Maginnis, 7 East, at p. 361 (1806).
The rule requiring the noting or protest to be on the day of the dishonor is new.
5. Where the acceptor of a bill suspends pay- If acceptor ment before it matures, the holder may cause the payment. bill to be protested for better security against the drawers and indorsers: Imp. Act, s. 51 (5); 54-55 V. c. 17, s. 7 (Can.).
The Imperial Act reads, "where the acceptor of a bill becomes bankrupt or insolvent, or suspends payment, etc." In the Act of 1890, the words "or insolvent" were omitted, but "becomes bankrupt or" remained. These were struck out by the amending Act of 1891, as there is no general bankrupt law for Canada.
Chalmers says, (p. 173):—" Under some of the Con- Rule on tinental codes when the acceptor fails during the currency nent. 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 honor."
In Quebec the Civil Code provides, Art. 1092, that "the Rule in debtor cannot claim the benefit of the term when he has become bankrupt or insolvent," and bankruptcy is defined as "the condition of a trader who has discontinued his payments": Art. 17 (23). It has been held, that on the bankruptcy of the maker, a promissory note which had two years to run became immediately exigible: Lovell v. Meikle, 2 L. C. J. 69 (1853). See p. 269 ante.
In France, when the acceptor fails, the bill may at once be treated as dishonored and protested for non-payment: Code de Com. Art. 163; Nouguier, § 1277. ·