$2.

The holder may or may not be the legal owner. It is sufficient for him to be in possession and entitled, at law, to recover or receive its contents from another: Daniel § 28. If the payee or indorsee of a bill or note indorse it in blank and send it to another person for discount, collection, or some other special purpose, the latter, while in possession, would be the "holder" of the bill or note: Allison v. Central Bank, 9 N. B. (4 Allen) 270 (1859).

The rights and powers of the holder of a bill are given in section 38.

The word holder is used in different senses. It may mean a "holder in due course as defined in section 29; and every holder of a bill or note is prima facie deemed to be a holder in due course: section 30, s-8. 2. This latter expression is used in the Act instead of the old phrase "bona fide holder for value without notice." The term "holder for value" is defined in section 27, s-s. 2.

The word holder also includes one whose possession is unlawful, but who can give a valid discharge to a person who pays the bill in good faith, or who can give a good title to a purchaser before maturity in good faith and for value, such as the finder of a bill payable to bearer or indorsed in blank: section 38; Murray v. Lardner, 2 Wall., 110 (1864).

A person who is in possession of a bill or note otherwise than as above stated is not a "holder" of it. Thus the possessor under a forged indorsement even for value. and in good faith acquires no rights and is not entitled to the designation: section 24; Smith v. Union Bank, L. R. 10 Q. B. per Blackburn, J. at p. 296 (1875); Colson v. Arnot, 57 N. Y., 253 (1874).

Every "bearer" of a bill within the meaning of the § 2. definition in clause (d) of this section, is the holder of it: Howard v. Godard, 9 N. B. (4 Allen) 452 (1860).

(h) The expression "Indorsement indorsement completed by delivery;

Indorsement, as its derivation and meaning would indicate, is generally made by writing the name of the transferrer on the back of the bill; but it may be written. on any other portion of it. "It is quite immaterial whether the indorsement be written on the back of the instrument or on the face," as said by Lord Campbell in Young v. Glover, 3 Jur. N. S. 637 (1857). See also Partridge v. Davis, 20 Vt. 499 (1848); Herring v. Wood. hull, 29 Ill. 92 (1862); Haines v. Dubois, 30 N. J., 259 (1863); Arnot v. Symonds, 85 Penn. St., 99 (1877). In certain cases it may be written on an allonge or on a copy of the bill: section 32 (a).

In the Act the word is not applied to this writing alone, but only when followed and completed by the delivery of the bill to another, which makes the contract of the indorser complete and irrevocable: section 21. Delivery is here used in the sense indicated in clause (f) of this section. The requisites of a valid endorsement to operate as a negotiation of a bill are set out in section 21.

(i) The expression "Issue " means the first "Issue." delivery of a bill or note, complete in form, to a person who takes it as a holder;

"Issue" is used only a few times in the Act. Interest runs from the "issue of an undated bill when it is expressed to be payable with interest, without saying from what time section 9, s-s. 3. : As to the effect of inserting

$2.

"Value."

"Defence."

Other defi

nitions.

a wrong date of issue when a bill has been issued undated, see section 12. As to the re-issue of a bill, see section 37. Where a bill drawn in one country is payable, negotiated or accepted in another, it may become of importance to determine the place of issue: section 71. A bill is complete in form when it complies with section 3, and a note when it complies with section 82. For the definition of person" see the note at the end of the present section.

66

(j) The expression "Value" "Value" means valuable consideration.

The term "valuable consideration" is defined in section 27.

(k) The expression "Defence" includes counterclaim.

The word "defence" is used in sections 30, s-s. 5 and 38 (b). For a definition of counter-claim see note to clause (b) of this section. "Defence" would also include in Quebec an incidental demand by a defendant: C. C. P. Art.

151.

The foregoing definitions are taken from the corresponding section of the Imperial Act, almost without change. "Banker" in the Imperial Act has been replaced by "Bank" in the Canadian, for the reasons above mentioned. "Bankrupt" is not used in the Canadian Act as we have no general bankrupt or insolvent law in force in the Dominion. "Person"" written "and writing," which are all used in a peculiar sense, are defined in the Imperial Act, but not in the Canadian, as they are defined in the general Interpretation Act, R. S. C. c. 1, s. 7, as follows:

"(22) The expression "person includes any body> corporate and politic, or party, and the heirs, executors,

administrators or other legal representatives of such person, to whom the context can apply according to the law of that part of Canada to which such context extends."

(23) The expression "writing," written," or any term of like import, includes words printed, painted, engraved, lithographed, or otherwise traced or copied."

The only one of the foregoing definitions not in the Imperial Act is that of "defence." This section is another illustration of the fact that the original portions of the Canadian Act were not prepared or arranged with the same care as must have characterized the preparation of the Imperial Act. In the latter the words defined are all arranged alphabetically. Those copied from it in the Canadian Act follow the same order; but the word "defence" which has been added, instead of being inserted in its proper alphabetical place comes after "value." Another change which is scarcely an improvement, is the insertion of the words "The expression" at the commencement of each definition, while in the Imperial Act each clause begins with the word to be defined. If any prefix was thought necessary, it would have been more appropriate to have used "the word " rather than "the expression," as in each instance it is a single word that is defined.

§ 2.

PART II.

BILLS OF EXCHANGE.

The Act as its title indicates, relates to Bills of Exchange, Cheques and Promissory Notes. The rules and principles relating to the former are set out in Part II, which embraces sections 3 to 71 inclusive.

Section 72 defines a cheque as a bill of exchange drawn on a bank payable on demand, and enacts that the provisions of the Act applicable to a bill of exchange payable on demand shall apply to a cheque, except as otherwise provided in Part III.

By section 88 the provisions of the Act relating to bills of exchange apply to promissory notes with the necessary modifications, and subject to the exceptions of that section and the provisions of Part IV.

In the notes and illustrations appended to the various sections of Part II of the Act, where a clause or provision is equally applicable to a promissory note or cheque as well as to a bill, authorities and cases bearing upon the principle will be cited, although they may have been laid down or decided with reference to notes or cheques.