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issue, and the validity as regards requisites in form § 71. of the supervening contracts, such as acceptance, or indorsement, or acceptance supra protest, is determined by the law of the place where such contract was made: Imp. Act, s. 72 (1).
"Country" is not defined in the Act. While, strictly speaking, Canada is one country for the purposes of bills and notes, these being assigned by section 91 of the British North America Act exclusively to the Dominion Parliament, it is probable that the Courts will apply the principles of the present section, which are the recognized rules of private international law, to cases where two or more provinces are concerned and there is a conflict between their laws.
"Drawing, in reference to bills of exchange, includes not only the writing and signing, but also the full execution by delivery": Wallace v. Souther, 2 S. C. Can. at p. 613 (1878). A bill is not "drawn " until it is issued, that is, delivered, complete in form to the payee or indorsee if it is payable to order, or to some person as bearer, if it is payable to bearer: section 2. The contracts of acceptance and indorsement, like that of the drawer, are only complete upon delivery, so that it is the delivery in each case which determines the place of the contract: Chapman v. Cottrell, 34 L. J. Ex. 186 (1865).
A bill is presumed to have been issued and indorsed at the place where it bears date, and to have been accepted at the place at which the drawee is addressed, unless there is something on it to show that the contract was in fact made in some other place.
The rule in this sub-section that the validity of a bill as regards the form of the bill itself, or of the acceptance or indorsement, is to be governed in each case by the lex loci contractus is one that is generally recognized.
§ 71. See on this point, Story on the Conflict of Laws, secs. 238, 260, 262; Westlake, § 228; 1 Daniel, §§ 867, 868. and deeds made out of Lower Canada are valid if made and passed according to the forms required by the law of the country where they were passed or made": C. C. Art. 7. See also Guepratte v. Young, 4 DeG. & Sm. at p. 228 (1851).
Bill not stamped.
A bill drawn in Michigan, where a verbal acceptance is not recognized, upon a person in Illinois where such an acceptance is binding, may be validly accepted by parol: Mason v. Dousay, 35 Ill. 424 (1864); Bissell v. Lewis, 4 Mich. 450 (1857).
A bill drawn in Illinois upon a person in Missouri, where a verbal acceptance is not legal, and verbally accepted by the drawer in Illinois, binds him: Scudder v. Union National Bank, 91 U. S. (1 Otto) 406 (1875).
It is doubtful how far the principle of such decisions would be law under the Act. The rule in the present clause is "subject to the provisions of this Act." Section 17 provided that an acceptance is invalid unless it is written on the bill and signed by the drawee.
See the notes and cases under clause (b), below.
(1) Where a bill is issued out of Canada, it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue; Imp. Act, s. 72 (1) (a).
This proviso adopts the well established rule of the common law that no country will regard or enforce the revenue laws of another country. See Story, secs. 245, 257; Boucher v. Lawson, Cas. temp. Hard. 89, 194 (1734); Holman v. Johnson, Cowp. 341 (1775); Biggs v. Lawrence, 3
T. R. 454 (1789); Lightfoot v. Tennant, 1 B. & P. 551, 557 § 71. (1796); Planche v. Fletcher, 1 Dougl. 251 (1779); James v. Catherwood, 3 D. & R. 190 (1823); Wynne v. Jackson, 2 Russ. 351 (1826); Ludlow v. Van Rensselaer, 1 Johns. (N. Y) 94 (1806). The doctrine of Bristow v. Sequeville, 5 Ex. 275 (1850), that where the want of a stamp not only rendered a bill inadmissible in evidence but absolutely void in the foreign country where drawn, it would be held void in England is not recognized in the Act, as regards bills drawn in one country and negotiated or payable in another.
(2) Where a bill, issued out of Canada, con- Foreign forms, as regards requisites in form, to the law of as valid. Canada, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold or become parties to it in Canada: Imp. Act, s. 72 (1) (b).
Bills of exchange were drawn in France by a domiciled Frenchman in the French language in English form on an English company, who duly accepted them. The drawer indorsed the bills and sent them to an Englishman in England. It was held that the acceptor could not dispute the negotiability of the bills by reason of the indorsements. being invalid according to French law, when they would be valid indorsements according to the law of England: re Marseilles Extension Ry. & L. Co., 30 Ch. D. 598 (1885).
lex loci con
(b.) Subject to the provisions of this Act, the tiny interpretation of the drawing, indorsement, accep- tractus. tance or acceptance supra protest of a bill, is determined by the law of the place where such contract is made: Imp. Act, s. 72 (2).
The provisions of the Act to which this clause is subject are the succeeding clauses of this section, and section 53.
"Interpretation" is not defined in the Act. Is it to be taken in a narrow sense and confined simply to the coninterpreta- struction of the drawing, indorsement or acceptance as the tion. case may be? Or does it also include the nature and effect of these respective contracts, and the rights, obligations and liabilities of the parties who enter into them? In Alcock v. Smith, 7 T. L. R. at p. 752 (1891), ROMER, J., says that he understands "interpretation" here to mean "legal effect," and he held that the indorsement of an English inland bill in Norway was governed by Norwegian law. This decision was affirmed in appeal. See No. 13 below.
Lex loci solutionis.
The word "form" in clause (a) of this section, and "interpretation" in the present clause may perhaps be used in the same sense as in the heading to sections 3 to 21 of the Act. If so, this would favor giving them the wider meaning.
It has been generally recognized as a rule of international law that where a contract is entered into in one place to be performed in another, it is to be governed as to its validity, nature and obligation by the law of the place of performance, in accordance with the maxim: contraxisse unusquisque in eo loco intelligitur, in quo, ut solveret, se obligavit. See Story on Conflict of Laws, secs. 280, 281; Westlake, § 229; 3 Burge, Col. Law, pp. 771, 772; Robinson v. Bland, 2 Burr. 1078 (1760); Fergusson v. Fyfe, 8 Cl. & F. 121 (1840); Andrews v. Pond, 13 Pet. (U. S.) 65 (1839); C. C. Art. 8.
To give a wide meaning to the word "interpretation" indorsers. in this section would not interfere with the principle just mentioned, so far as the drawer and indorsers of a bill are concerned.
When a bill is drawn on a person in a foreign country or made payable there, what the drawer and indorsers agree to do is not to pay the bill in the foreign country, but they
guarantee that it will be accepted and paid by the drawee, § 71 and if he does not do so, they will, if duly notified, re-imburse the holder at the place where they have respectively drawn or indorsed the bill.
The contract of the acceptor, on the other hand, is to pay at the place of payment. If it is payable generally, or in the place where it is accepted, then no difficulty arises as to the application of the present clause; the law of the place of acceptance will govern. But if the bill is payable in a different country from that in which it is accepted, does the present clause apply? For instance, if a bill drawn in Montreal is accepted in Toronto and payable in New York, is the liability of the acceptor to be determined by the law of Canada ? If so, the rule above quoted as to the law of the place of payment or performance of the contract is overridden by the Act.
Burge suggests (vol. 3, p. 771) that the place of performance is fictione juris the locus contractus; and Westlake (p. 254) that the law of the place of fulfilment is really the law of that jurisdiction which would be the forum contractus according to true Roman principles. Byles says (p. 381), "where a contract is made in one country to be performed in another, the country where the contract is to be performed is deemed the country in which it is made." This, however, does not seem to be a satisfactory solution of the difficulty.
Westlake, in discussing this clause of the Imperial Act, which is identical with our own, says, § 229, "The obligation incurred by accepting a bill of exchange or making a promissory note, is measured by the law of the place where it is payable." There is no attempt made to harmonize this with the rule laid down in the Act, nor is attention called to the apparent discrepancy, or to the fact that in the Act there appears to be a clear line drawn between the M'C.B.E.A.-25