§ 57.

Further damages.

2. In the absence of proof, interest will be allowed at the rate allowed by our law on a note dated and payable in the United States: Griffin v. Judson, 12 U. C. C. P. 430 (1862).

3. Where a note fixes the rate to be paid after maturity "and until paid," this will be allowed, in the absence of fraud, however exorbitant: Young v. Fluke, 15 U. C. C. P. 360 (1865).

4. Where a note was dated and payable in New York, but discounted in Canada, the law of Canada governs as to interest: Cloyes v. Chapman, 27 U. C. C. P. 22 (1876).

5. Where the holder of a note recovered judgment with costs against the maker and indorser, and the indorser paid and took an assignment of the judgment, he is entitled under R. S. O. c. 116, s. 3 to recover from the maker the whole of the judgment including costs: Harper v. Culbert, 5 O. R. 152 (1883).

6. Where indorsers waived protest, the interest after maturity was not fixed by C. S. U. C. c. 42, s. 13, so as to enable the holder to rank for it under the Insolvent Act: re Macdougall, 12 Ont. A. R. 265 (1885).

7. A note for $3,000 payable six months after date "with interest at the rate of two per cent. per month until paid," only bears interest at the legal rate of six per cent. after maturity: St. John v. Rykert, 10 S. C. Can. 278 (1884). See also Dalby v. Humphrey, 37 U. C. Q. B. 511 (1875); Simonton v. Graham, 8 Ont. P. R. 495 (1881); Powell v. Peck, 15 Ont. A. R. 138 (1888); Grant v. People's Loan and Deposit Co., 18 S. C. Can. 262 (1890); Cook v. Fowler, L. R. 7 H. L. 29 (1874).

8. In Quebec under the old law a note payable on demand bore interest from its date: De Chantel v. Pominville, 6 L. C. J. 88 (1860); but under the Code, only from demand and default: Cleroux v. Pigeon, 32 L. C. J. 236 (1888).

(b.) In the case of a bill which has been dishonored abroad, in addition to the above damages, the holder may recover from the drawer or any indorser, and the drawer or an indorser who has been

compelled to pay the bill may recover from any § 57. party liable to him, the amount of the re-exchange with interest thereon until the time of payment Imp. Act, s. 51 (2)

"

Re-exchange is the amount which the party who has been compelled to pay the dishonored bill would have to pay for a sight bill, drawn at the time and place of dishonor at the then current rate of exchange on the place where the drawer or indorser sought to be charged resides, to cover the amount of the dishonored bill with interest and expenses: De Tastet v. Baring, 11 East, at p. 269 (1809); Suse v. Pompe, 8 C. B. N. S. at pp. 566, 567 (1860); Willans v. Ayers, 3 App. Cas. at p. 146 (1877).

The same rule prevails in the United States: Bank of the United States v. United States: 2 How. 727 (1844).

The provisions of this section apply to promissory notes with the necessary modifications: section 88.

centage

It will be observed that the present Act does not recog- No pernize or allow the further damages formerly allowed on bills allowed, drawn or negotiated in Canada and dishonored by non-payment abroad. In the various provinces there was allowed a per-centage from ten per cent. downward. By the Dominion Act of 1875, embodied in R. S. C. c. 123, s. 6, it was abolished for any part of Canada or Newfoundland and reduced to two-and-a-half per cent. for other countries. See Foster v. Bowes, 2 U. C. P. R. 256 (1857); Bank of Montreal v. Harrison, 4 U. C. P. R. 331 (1868).

by delivery

58. Where the holder of a bill payable to Transferer bearer negotiates it by delivery without indorsing it, he is called a "transferrer by delivery": Imp. Act. s. 58 (1).

A bill payable to bearer is one which is expressed to be so payable, or on which the only or last indorsement is in

s-s.

§ 58. blank: section 8, 8-8. 3. The holder of such a bill is the person in possession of it: section 2 (d) (g). It is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder: section 31. Such a negotiation is a sale of the instrument.

Liability.

On consideration.

Transferee

must use

2. A transferrer by delivery is not liable on the instrument: Imp. Act, s. 50 (2).

No person is liable as drawer, indorser or acceptor of a bill who has not signed it as such: section 23. See ex parte Roberts, 2 Cox 171 (1789); Bank of England v. Newman, 1 Ld. Raym. 442 (1700); Fenn v. Harrison, 3 T. R. 757 (1790).

The transferrer by delivery although not liable on the instrument itself may in certain cases, in the event of its dishonor, be liable on the consideration for which the bill has been transferred: Merchants' Bank v. Whidden, 19 S. C. Can. 70 (1891). This is the case if the bill was given for an antecedent debt: Mitchell v. Holland, 16 S. C. Can. 687 (1889); Ward v. Evans, 2 Ld. Raym 930 (1703); Camidge v. Allenby, 6 B. & C. 382 (1827); Guardians of Lichfield v. Greene, 26 L. J. Ex. 142 (1857). Or if the delivery was not intended to operate a full and final discharge of the liability of the transferrer: Vau Wart v. Woolley, 3 B. & C. 446 (1824).

The transferee in order to hold the transferrer liable, diligence. must act with reasonable diligence in seeking to obtain payment, and in giving notice of dishonor or repudiating the transaction: Conn v. Merchants' Bank, 30 U. C. C. P. 380 (1879); Rogers v. Langford, 3 Tyr. 654 (1833); Moule v. Brown, 4 Bing. N. C. 266 (1838); Robson v. Oliver, 10 Q. B. 704 (1847).

Where a person changes bank notes or cashes a cheque payable to bearer to oblige the holder, he can recover back the money if the bank has stopped payment or if the cheque

is dishonored, provided he acts with diligence: Conn v. § 58. Merchants' Bank, supra; Turner v. Stones, 7 Jur. 745 (1813); Timmins v. Gibbins, 18 Q. B. 722 (1852); Woodland v. Fear, 26 L. J. Q. B. 202 (1857).

Where bill brokers got bills discounted at their bankers for the drawer and acceptor, and made themselves liable to the banker by a separate document but did not indorse the bills, they were, on payment of the bills, held entitled to rank on the estate of the acceptor, as if they had actually indorsed the bills: ex parte Bishop, 15 Ch. D. 400 (1880).

3. A transferrer by delivery who negotiates a Warranty. bill thereby warrants to his immediate transferee, being a holder for value, that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless: Imp. Act, s. 58 (3).

Subject to the conditions mentioned under the preceding sub-section, these three warranties appear to comprise all that were recognized in England or Canada before the Act. In some of the United States such a transferrer is held also to warrant the solvency of the maker at the time of the transfer: Roberts v. Fisher 43 N. Y. 159 (1870); Wainwright v. Webster, 11 Vt. 576 (1839); Westfall v. Braley, 10 Ohio St. 188 (1859); while in others the English rule is followed: Young v. Adams, 6 Mass. 182 (1810); Milliken v. Chapman, 75 Me. 306 (1883).

As appears from some of the illustrations below, the word "valueless" need not be taken in a strictly literal

sense.

ILLUSTRATIONS.

1. A transferrer by delivery for value implies a warranty that the maker is not insolvent to his knowledge: Lewis v.

$58. Jeffery, M. L. R. 7 Q. B. 141 (1875). See Fenn v. Harrison, 8 T. R. 759 (1790); Delaware Bank v. Jarvis, 20 N. Y. 228 (1859); Bridge v. Batchelder, 9 Allen (Mass.) 394 (1864).

2. The transferrer of an unindorsed note represented it to be as good as gold when the parties were insolvent to his knowledge. He was held liable for the amount: Miller v. Daudelin, 24 L. C. J. 208 (1879).

3. A vendor of a bill impliedly warrants that it is of the kind and description that it purports on its face to be: Gompertz v. Bartlett, 2 E. & B. 849 (1853).

4. C. discounts with D. a bill payable to bearer without indorsing it, which, unknown to C., had been fraudulently altered in amount by a previous holder. D. can recover from C. the money he paid: Jones v. Ryde, 5 Taunt. 488 (1814); Burchfield v. Moore, 23 L.J. Q.B. 261 (1854); Bell v. Dagg, 60 N.Y. 530 (1875). 5. A bill broker discounts with a bank a bill indorsed in blank by the payee. The indorser absconds and the signatures of the drawer and acceptor turn out to be forgeries. The bank can recover from the broker the money they paid: Fuller v. Smith, R. & M. 49 (1824).

6. An agent gets a bank to discount a bill drawn and indorsed in blank by his principal, and then pays over the money to his principal. The signature of the acceptor was a forgery but the agent did not know it. The drawer fails. The bank cannot recover from the agent: g parte Bird, 4 De G. & Sm. 273 (1851).

7. The bona fide holder of a bill purporting to be drawn by A., accepted by B., and indorsed in blank by C., discounts it with a banker. It turns out that the signatures of A. and D. were forgeries, and that C., whose indorsement was genuine, is insolvent. The banker can recover from the holder the money he paid Gurney v. Womersley, 4 E. & B. 139 (1854); Allen v. Clark, 49 Vt. 390 (1877).

8. When the transferee discovers the defect in the bill, he must repudiate the transaction with reasonable diligence: Pooley v. Brown, 31 L. J. C. P. 134 (1862).