(b) Is precluded from denying to a holder in § 87. due course the existence of the payee and his then Estoppel capacity to indorse: Imp. Act, s. 88 (1) (2).

The position of the maker of a note is similar in most respects to that of the unconditional acceptor of a bill: section 88, s-s. 2. He is the primary debtor; the indorsers being only secondarily liable, until after dishonor and notice, unless the latter is waived or dispensed with. For the liabilities of an acceptor see sections 54 and 57.

It is frequently a disputed question whether the maker of a note is personally liable, or whether he is a mere agent or officer, and the note is that of some principal or corporation. It is impossible to reconcile the conflicting decisions on this point, as regards the acceptors of bills and the makers of notes. It may be said generally that the maker of a note has sometimes been liable on an acceptance expressed in words which, if in a note, would not have bound him personally. See section 17 and the notes and illustrations thereunder. Also Kerr v. Parsons, 11 U. C. C. P. 513 (1861); Corporation of Toronto Township v. McBride, 29 U. C. Q. B. 13 (1869); Archibald v. Brown, 3 L. N. 43 (1879).

(b) See the similar rule as to the acceptor of a bill: section 54, s-e. 3.

A "holder in due course" has been defined in section 29. The reason for this estoppel is that the maker by issuing a note in this form has in effect made these representations to the person who becomes such a holder, and after it is acted upon cannot be allowed to claim the contrary. See Perkins v. Beckett, 29 U. C. C. P. 395 (1878); Taylor v. Croker 4 Esp. 187 (1803); Drayton v. Dale, 2 B. & C. 293 (1823); Smith v. Marsack, 6 C. B. 486 (1848); Lane v. Krekle, 23 Iowa, 401 (1867); Wolke v. Kuhne, 109 Ind. 313 (1886).

of maker.

$ 88. Applica

tion of

Part II.

to notes.

Corres

ponding

terms.

What provisions do

88. Subject to the provisions in this part, and except as by this section provided, the provisions. of this Act relating to bills of exchange apply, with the necessary modifications, to promissory notes:

2. In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to the drawer's order:

3. The following provisions as to bills do not not apply apply to notes, namely, provisions relating to— (a) Presentment for acceptance;

As to foreign notes.

(b) Acceptance;

(c) Acceptance supra protest;

(d) Bills in a set: Imp. Act, s. 89 (1) (2) (3).

The following sections in Part II. of the Act do not apply to promissory notes:-3, 4, 5, 6, 15, 17, 18, 19, 36 s-s. 3, 39, 40, 41, 42, 43, 44, 53, 54 s-s. (1) (2), 64, 65, 66, 67 and 70.

4. Where a foreign note is dishonored, protest thereof is unnecessary, except for the preservation of the liabilities of indorsers. Imp. Act, s. 89 (4).

The exception in this sub-section is not in the Imperial Act. Its effect is to place foreign notes on the same footing as foreign bills: section 51, s-s. 2.

PART V.

SUPPLEMENTARY.

89. A thing is deemed to be done in good faith within the meaning of this Act, where it is in fact done honestly whether it is done negligently or not. Imp. Act, s. 90.

The expression "in good faith" is used in section 29 with reference to a holder in due course acquiring a bill; in section 59, with reference to payment in due course; and in sections 78 and 81, with reference to the payment of a crossed cheque.

The rule of the civil law is that "good faith is always presumed; he who alleges bad faith must prove it": C. C. Art. 2202. See section 30 as to the shifting of the onus of proof once fraud is proved.

section.

This section was considered in England recently in the origin of case of Tatam v. Haslar, 23 Q. B. D. 345 (1889). Denman, J., there says that it is obviously founded upon the distinction which is pointed by Lord Blackburn in Jones v. Gordon, 2 App. Cas. at p. 629 (1877), between honest blundering or carelessness and a dishonest refraining from inquiry. The following is the substance of the remarks referred to :— If value has been given for a bill, it is not enough to shew that there was carelessness, negligence or foolishness in not suspecting that the bill was wrong when there were M'C.B.E.A.-28

§ 89. circumstances that might have led a man to suspect that. It is necessary to show that the person who gave value for the bill, whether the value given be great or small, was affected with the notice that there was something wrong about it when he took it. It is not necessary that he should have notice of what the particular wrong was. Evidence of carelessness or blindness may be good evidence upon the real question, which is, whether he did know that there was something wrong in it. If he was honestly blundering and careless, and so took a bill or note when he ought not to have taken it, still he would be entitled to recover. But if the facts and circumstances are such that the jury, or whoever has to try the question, comes to the conclusion that he was not honestly blundering and careless, but that he must have had a suspicion that there was something wrong, and that he refrained on this account from asking questions or making further inquiry-I think that is dishonesty.

Bad faith more than

In re Gomersall, 1 Ch. D. at p. 146 (1875), it is said negligence. that "negligence or carelessness on the part of the holder of a bill, is not of itself sufficient to deprive him of his remedies for procuring its payment. But negligence or carelessness, when considered in connection with the surrounding circumstances, may be evidence of mala fides.” In Swan v. North British Australasian Co., 2 H. & C. 184 (1863), Byles, J., says: "The negligence of the holder makes no difference in his title. However gross the holder's negligence, if it stop short of fraud, he has a title." The same rule was laid down in Goodman v. Harvey, 4 A. & E. at p. 876 (1836), going somewhat farther in this direction than Crook v. Jadis, 5 B. & Ad. 909 (1834), which was a partial departure from the rule laid down in Gill v. Cubitt, 3 B. & C. 466 (1824), when the jury was told that the question was, whether the holder of the bill took it under circumstances that ought to have excited the suspi

cion of a prudent and careful man. This last case was $ 89. disapproved of in Bank of Bengal v. McLeod, 5 Moore's Indian Appeals 1 (1849), and Raphael v. Bank of England, 17 C. B. 161 (1855); and in London and County Bank v. Groome, 8 Q. B. D. 288 (1881), it was held to have been overruled. The old rule in England was similar to that laid down in the recent cases and adopted by the Act.

Some American authorities followed Gill v. Cubitt, but the contrary doctrine has been firmly established there. See Murray v. Lardner, 2 Wall. (U. S.) 110 (1864); Shaw v. Railroad Co., 101 U. S. (11 Otto) 564 (1879); Swift v. Smith, 102 U. S. (12 Otto) 444 (1880); Shreeves v. Allen, 79 Ill. 553 (1875); Johnson v. Way, 27 Ohio St. 374 (1875); Mabie v. Johnson, 6 Hun. (N. Y.) 309 (1876); Stimson v. Whitney, 130 Mass. 591 (1881); Daniel, §§ 775, 1503.

This rule has been generally recognized in Canada, although there are expressions in certain cases that are not quite consistent with it.

90. Where, by this Act, any instrument or Signature. writing is required to be signed by any person, it is not necessary that he should sign it with his own hand, but it is sufficient if his signature is written thereon by some other person by or under his authority: Imp. Act, s. 90 (1).

As to what is a writing or signature within the meaning of the Act, see ante pp. 36, 39.

As to a signature by procuration, see section 25 and the notes and illustrations thereunder.

The person whose name is signed, is sometimes held. liable on the ground of having authorized it before it was signed, sometimes on account of having ratified it, and frequently on the ground of estoppel.