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54-55 VICT. CAP. 17.

An Act to amendThe Bills of Erchange Act, 1890.

[AssENTED TO 28th August, 1891.] HE ER MAJESTY, by and with the advice and

consent of the Senate and House of Commons of Canada, enacts as follows:

par. (a) of
s. 11 repeal-

1. The paragraph lettered (a) of sub-section 33 V. c. 38 one of section eleven of The Bills of Exchange ed Act, 1890,is hereby repealed and the following substituted in lieu thereof:

(a) At sight, or at a fixed period after date or sight.

2. Section twelve is amended by inserting Sectioned? after the word “payable" in the third line thereof the words “at sight, or.”

3. Section eighteen is amended by inserting Section 18 after the word “payable" in the first line of subsection two thereof the words “at sight, or.”


4. Section twenty-four is amended by adding Section the following sub-section:


as to forged indorsements.

$ 4. “2. If the drawee of a cheque bearing a forged Provision indorsement pays the amount thereof to a subse

quent indorser, or to the bearer thereof, he shall have all the rights of a holder in due course for the recovery back of the amount so paid from any indorser who has indorsed the same subsequent to the forged indorsement, as well as his legal recourse against the bearer thereof as a transferrer by delivery; and any indorser who has made such payment shall have the like rights and recourse against any antecedent indorser subsequent to the forged indorsement,—the whole, however, subject to the provisions and limitations contained in the last preceding sub-section."

5. Section forty is amended by inserting in the second line thereof, after the word “payable,” the words “at sight, or.”

6. The paragraph lettered (a) of sub-section two of section forty-one, is amended by striking out the words “or bankrupt” in the first line thereof.

Section 40 amended.

Section 41 amended.

Section 51 amended,

7. Section fifty-one is amended by striking out the words “becomes bankrupt or” in the first line of sub-section five thereof.

The foregoing amendments have all been embodied in the sections to which they respectively refer, and their effect has been there considered.

Common law of England and apply.

8. The rules of the common law of England, con un shall including the law merchant, save in so far as they

are inconsistent with the express provisions of the $ 8. said Act, as hereby amended, shall apply, and shall be taken and held to have applied from the date on which the said Act came into force, to bills of exchange, promissory notes and cheques. Imp. Act, s. 97 (2).

This clause was in the bill as it passed the House of Commons in 1890, but was struck out in the Senate. See Senate Debates, 1890, p. 467. As to what would have been the effect of the omission of any uniform rule for cases unprovided for by the Act, see ante pp. 5, 18. It will be observed that the present section is made retrospective.

The expression “common law" is used in different senses.

In this section it is probably used in the comprehensive Common sense in which it was spoken of by Baron Parke in the defined. House of Lords in Mirehouse v. Rennell, 8 Bing. 515 (1832), when he said :-"Our common law system consists in applying to new combinations of circumstances those rules of law which we derive from legal principles and judicial precedents; and for the sake of attaining uniformity, consistency, and certainty, we must apply those rules when they are not plainly unreasonable or inconvenient, to all cases which arise; and we are not at liberty to reject them, and abandon all analogy to them, in those to which they have not yet been judicially applied, because we think that the rules are not as convenient or reasonable as we ourselves could have devised." The “ law merchant” is another expression that may Law

merchant not be capable of an exact definition. It has always, as its defined. name implies, recognized the customs and usages of merchants. Indeed, it has been based upon them. “The law merchant is sometimes spoken of as a fixed body of law, forming part of the common law, and as it were,

$ 8. coeval with it. But as a matter of legal history, this view

is altogether incorrect. The law merchant thus spoken of with reference to bills of exchange and other negotiable securities is of comparatively recent origin. It is neither more nor less than the usages of merchants and traders, in the different departments of trade, ratified by the decisions of courts of law :" per Cockburn, C.J., in Goodwin v. Robarts, L. R. 10 Ex., at p. 346 (1875).

" When a general usage has been judicially ascertained and established, it becomes a part of the law merchant, which courts of justice are bound to know and recognize:por Lord Campbell in Brandao v. Barnett, 12 Cl. & F. at p. 805

(1846). Local The existence, nature and scope of a given usage is a usages.

question of fact. A particular or local usage must be proved each time, until it becomes so notorious that the courts will not require further proof of it, but will take judicial notice of it: per Brett, M. R., in ex parte 'Turquand, 14 Q. B. D. at p. 645 (1885). For examples of the application of this principle in the United States, see Bowen v. Newell, 13 N. Y. 290 (1855), and Champion v. Gordon, 70 Penn. St. 476 (1872), where proved local usages as to cheques payable at a future day having no days of grace, received judicial sanction. See also the remarks of Davidson, J., in La Banque Nationale v. Merchants' Bank, M. L. R. 7 S. C. 336 (1891) as to proof of the custom of the

Montreal clearing house regarding unaccepted cheques. Imperial The corresponding section of the Imperial Act has been

considered in the case of re Gillespie, ex parte Robarts, 16 Q. B. D. 702 (1885). It was there held that section 57 of the Act was not exhaustive, as to the damages the holder of a dishonored bill might recover. After quoting section 97, Cave J. said, p. 705: “It therefore follows, unless there is something in the Act expressly inconsistent with the ancient law, that the right to prove for damage

Act, s. 97(2).

of the kind which I have spoken of still exists." In the $ 8. same case, in appeal, 18 Q. B. D. at p. 292, Lindley, L.J., says, "section 97 preserves the former liability of the acceptor to indemnify the drawer against his liability in such a case.

Section 97 has been added to meet cases not exhaustively dealt with by other sections of the Act.”

It will be observed that the language of the section is compari much broader than the corresponding article of the Civil code. Code. That article No. 2340, reads as follows: "In all matters relating to bills of exchange not provided for in this code recourse sball be had to the laws of England in force on the 30th of May, 1849.” Not only that part of the Code relating to bills of exchange was to be looked at, but the whole Code, before recourse could be had to the laws of England. Now the common law of England and the law merchant are to apply in Quebec as well as in the other provinces, when they are not inconsistent with the express provisions of the Act.

It is probable that this section will have an important influence in harmonizing the decisions in the various provinces, when the provincial laws differ on subjects directly or indirectly affecting bills and notes, some of which have been considered in the preceding pages, especially under sections.

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