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§ 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:" pcr Lord Campbell in Brandao v. Barnett, 12 Cl. & F. at p. 805 (1846).
The existence, nature and scope of a given usage is a 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.
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
of the kind which I have spoken of still exists." In the
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.
It will be observed that the language of the section is Comparimuch 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 shall 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.
OTHER NEGOTIABLE INSTRUMENTS.
The Bills of Exchange Act treats only of bills, cheques and notes. The single exception to this is section 94, relating to dividend warrants, which are really cheques, as pointed out in the notes to that section. There are certain other instruments which represent money, and which by commercial usage or by legislation are gradually acquiring the full measure of negotiability which belongs to bills and notes. This process is very clearly described in the remarks of Cockburn, C.J., in the case of Goodwin v. Robarts quoted in the introduction, to which the reader is referred.
A negotiable instrument strictly so called, is one representing on its face a certain sum of money, which may be transferred by indorsement and delivery, or by delivery alone, so that the holder for the time being has a right to sue upon it in his own name; and if he is a bona fide holder for value before maturity, he may demand the full amount of the face of the instrument. See Crouch v. Credit Foncier, L. R. 8 Q. B. at p. 381 (1873), and Simmons v. London Joint Stock Bank 1891] 1 Ch. at p. 294.
Bank Notes and Dominion Notes.-As to these see ante p. 418. The debentures authorized by chapter 31, R. S. C., are also negotiable in the full sense of the term.
Foreign Government Bonds. In the English Courts the question of the negotiability of these instruments has often come up. The question to be decided has been held in these cases to be whether they were treated as negotiable in the English money market, if consistent with what appeared on their face, and not simply whether they were
made payable to order or bearer, or whether they were considered to be negotiable in foreign countries. See Glyn v. Baker, 13 East 509 (1811)-East India Bonds; Gorgier v. Mieville, 3 B. & C. 45 (1824)-Prussian Government Bonds; Lang v. Smyth, 7 Bing. 284 (1831)— Neapolitan Bonds; Atty. Gen. v. Bouwens, 4 M. & W. at p. 190 (1838) -Russian and Danish Bonds; Heseltine v. Siggers, 1 Ex. 856 (1848) Spanish Stock; Picker v. London and County Bank, 18 Q. B. D. at p. 518 (1887)-Prussian Government Bonds.
Municipal Debentures.-In 1855 by the Act, 18 Vict. c. 80, municipal debentures issued in Upper or Lower Canada, payable to bearer, were declared to be transferable by delivery, and those payable to any person or order, by indorsement, the holder for the time being having the right to sue in his own name, and his title not being liable to be impeached if he was a bona fide holder for value without notice.
Similar provisions are found in the municipal acts now in force in most of the provinces. See R. S. O. c. 184, s-s. 405-414; ibid. c. 186, s, 13: the Municipal Code, Quebec, Arts. 981-987; R. S. Q. Arts. 4629, 4630: Municipal Act of Manitoba, 1890, ss. 323-329; C. S. Man. c. 37, s. 104.
The negotiability of municipal debentures may be restrained by inserting a provision requiring registration in the books of the corporation.
They are usually issued for a term of years, with interest coupons attached. The debentures are under the seal of the corporation. It has been thought that on account of their being under seal they would not be treated as promissory notes, but in view of section 90 of the Act this would no longer be an objection. The coupons are generally in the form of ordinary promissory notes signed
by one of the officers who executes the debentures. Debentures may be for $100 each or any larger sum.
In Ontario such debentures have been held to be negotiable, and bona fide holders for value have been protected: Anglin v. Kingston, 16 U. C. Q. B. 121 (1857); Trust & Loan Co. v. Hamilton, 7 U. C. C. P. 98 (1857); Crawford v. Cobourg, 21 U. C. Q. B. 113 (1861); Sceally v. McCallum, 9 Grant, 434 (1862).
In Quebec they have been held to be negotiable like promissory notes, and in suing might be declared upon as such Eastern Townships Bank v. Compton, 7 R. L. 447 (1871). See also Corporation of Roxton v. E. T. Bank, Ramsay A. C. 240 (1882); Macfarlane v. St. Cesaire, M. L. R. 2 Q. B. 160 (1886); St. Cesaire v. Macfarlane, 14 S. C. Can. 738 (1887); County of Ottawa v. M. O. & W. Ry. Co. Cassels' Dig. 126 (1886); Pontiac v. Ross, 17 S. C. Can. 406 (1890).
In the United States, such municipal bonds, negotiable in form, notwithstanding they are under seal, are clothed with all the attributes of commercial paper, pass by delivery or indorsement, and are not subject to equities (where the power to issue them exists), in the hands of holders for value before maturity without notice: 1 Dillon, Municipal Corporations, 4th ed., §§ 486, 513. See Cromwell v. Sac Co.. 96 U. S. 51 (1877).
Decisions conflict as to whether coupons are entitled to grace. The weight of authority is in favor of their being payable on the very day of maturity without grace: 2 Daniel, §§ 1490a, 1505.
Coupons dishonored bear interest from their maturity: R. S. O. c. 44, s. 86 (2); C. C. 1069, 1077.
Debentures of other Corporations. Most railway and other commercial companies incorporated by special Dominion or Provincial Acts are authorized to issue bonds