$ 72. the Act, and if marked or accepted it might be claimed that the bank was not liable, as it would not be the drawee of the instrument and consequently could not become liable by acceptance.

The words "on demand" need not be on the cheque, as they are understood when no time for payment is expressed section 10 (b).

A cheque may be antedated or postdated: section 13, s-s. 2; Wood v. Stephenson, 16 U. C. Q. B. 419 (1858); And the fact that it is postdated is not an irregularity: Hitchcock v. Edwards, 60 L. T. N. S. 636 (1889); Carpenter v. Street, 6 T. L. R. 410 (1890). But a cheque dated seven days after delivery is in substance a bill of exchange at seven days' date: Forster v. Mackreth, L. R. 2 Ex. 163 (1867).

In the United States there has been a conflict as to whether a cheque may be made payable on a day subsequent to its date. The weight of authority is in favor of what is law under our Act, that such an instrument is not a cheque, and has three days' grace. See Bowen v. Newell, 13 N. Y. 290 (1855); Morrison v. Bailey, 5 Ohio St. 13 (1855); Harrison v. Nicollet Bank, 41 Minn. 488 (1889); 2 Daniel, § 1574. But see contra, re Brown, 2 Story, C. C. 502 (1843); Westminster Bank v. Wheaton, 4 R. I. 30 (1856); Champion v. Gordon, 70 Penn. St. 474 (1872); Way v. Towle, 45 Alb. L. J. 177 S. C. Mass. (1892).

The Act does not make it a part of the definition that the drawer should be a customer of the bank; but if a person gets goods or money on the strength of a cheque where he has no account he is guilty of obtaining the goods or money by false pretences, and is liable to three years' imprisonment: R. S. C. c. 164, s. 77; Rex v. Jackson, 3 Camp. 370 (1814); Reg. v. Hazelton, L. R. 2 C. C. 134 (1874).

2. Except as otherwise provided in this part, § 72. the provisions of this Act applicable to a bill of Provisions exchange payable on demand apply to a cheque. apply to Imp. Act, s. 73.

The exceptions are, (1) that failure to present a cheque for payment within a reasonable time does not discharge the drawer, except in so far as he is damaged thereby: section 73; (2) that the bank should not pay after notice of the customer's death: section 74; and (3) the provisions relating to crossed cheques: sections 75 to 81, inclusive.

The chief provisions of the Act relating to bills payable on demand, which also apply to cheques, are the following: (1) There are no days of grace: section 14; (2) when they appear on their face to have been in circulation for an unreasonable length of time they are deemed to be overdue, so as to prevent a holder from acquiring them free from defects of title: section 36, s-s. 3; (3) they must be presented for payment within a reasonable time after indorsement to charge an indorser: section 45, s-s. 2 (b).

as to bills

cheques.

an assign

funds.

A cheque being a bill of exchange does not operate as Cheque not an assignment of funds in the hands of the bank available ment of for the payment thereof, and until it accepts a cheque the bank is not liable on it: section 53. The holder of an unaccepted cheque, consequently, cannot sue the bank upon it, except under the circumstances mentioned in section 73 (c). Under the Code it was held in Quebec that a cheque was an assignment of so much of the drawer's funds: Marler v. Molsons Bank, 23 L. C. J. 293 (1879). This is the law in Scotland: section 53, s-s. 2 of the Imperial Act; and also in France: Nouguier, §§ 392, 431.

$ 72.

ILLUSTRATIONS.

1. The production of a cheque is not even prima facie evidence of money lent by the drawer: Foster v. Fraser; Rob. & Jos. Dig. 652 (1840); Nichols v. Ryan, 2 R. L. 111 (1868); Dufresne v. St. Louis, M. L. R. 4 S. C. 310 (1888). A cheque may be postdated, and is then payable on the day of its date without grace: Wood v. Stephenson, 16 U. C. Q. B. 419 (1858).

2. Where plaintiffs accepted from defendant a cheque of a third party in part payment of goods, and presented it at the bank the next day, and also applied several times to the drawer, but did not notify the defendant for a week, held, that the latter was not liable: Redpath v. Kolfage, 16 U. C. Q. B. 433 (1858).

3. A cheque operates as payment until it has been dishonored. It may be received either as conditional or as absolute payment: Hughes v. Canada Permanent L. & S. S., 39 U. C. Q. B. 221 (1876).

4. Plaintiff deposited in defendant's bank the cheque of a third party on another bank in the same town. Defendants credited it in his pass-book as cash and stamped it as their property. They presented it the next business day when it was dishonored. If they had presented it the same day it would have been paid. Held, that the bank was not liable: Owens v. Quebec Bank, 30 U. C. Q. B. 382 (1870).

5. The Bank of Montreal allowed a private banker at London to put on his cheques, "payable at Bank of Montreal, Toronto, at par." Held, that these words simply meant that there would be no charge for cashing the cheques, and not that the Bank of Montreal would pay them if there were no funds of the drawer to meet them: Rose-Belford Printing Co. v. Bank of Montreal, 12 O. R. 544 (1886).

6. Where a bank paid cheques on forged indorsements, the receipt given by the plaintiffs at the end of the month, was at

most, an acknowledgment that the balance was correct on the § 72. assumption that the cheques had been paid to the proper parties. Where the names of the payees had also been forged on an application for a loan to plaintiffs, the cheques were not payable to fictitious payees: Agricultural S. & L. Association v. Federal Bank, 6 A. R. 192 (1881).

7. The payee of a cheque took it to the bank on which it was drawn the same day as he received it from the drawer, and had it marked "good," the amount being charged to the drawer's account; but he did not demand payment. The bank suspended payment that evening, and the next day the cheque was presented for payment and dishonored. Held, that the drawer was discharged from all liability thereon: Boyd v. Nasmith, 17 0. R. 40 (1888); Merchants' Bank v. State Bank, 10 Wall (U. S.) 647 (1870); First National Bank of Jersey City v. Leach, 52 N.Y. 350 (1873).

8. A bank held liable to the holder of a marked cheque : Banque Nationale v. City Bank, 17 L. C. J. 197 (1873); even when marked good only on a future day by the president and cashier: Exchange Bank v. Banque du Peuple, M. L. R. 3 Q. B. 232 (1886). Items of claim older than a cheque cannot properly be set up in compensation against it: Dorion v. Dorion, 4 L. N. 130 (1882).

9. A cheque should be presented the day after delivery and notice of dishonor given to charge the indorser: Lord v. Hunter, 6 L. N. 310 (1883).

10. A bank acting as agent for another bank is not authorized, in the absence of an express agreement, to cash a cheque drawn upon the principal bank, but not accepted by it: Maritime Bank v. Union Bank, M. L. R. 4 S. C. 244 (1888).

11. A bank held liable for the amount of a cheque it had lost, which the drawer disputed, although the latter had been guilty of negligence in not objecting earlier when it was entered in his pass book: Fournier v. Union Bank, 2 Stephens' Que. Dig. 99 (1878).

$ 72.

12. Where an account bears interest, it ceases on the amount of a cheque drawn on the account when the cheque is marked, although the money is not actually drawn out until long after: Wilson v. Banque Ville Marie, 3 L. N. 71 (1880).

13. The initialling of a cheque by the cashier does not amount to an acceptance. A cheque so initialled received by the defendant only a few days before the trial, when it was more than four years old, could not be used by him as a set-off to the bill of exchange on which he was sued: Commercial Bank v. Fleming, 1 Stevens' N. B. Dig. 92 (1872).

14. H. owed defendant $500, and induced him to indorse. his (H.'s) cheque for $1,000 on a bank at N., out of the proceeds of which the debt was to be paid. The two went to a bank at W. to get cash for the cheque. H. alone went into the manager's room, and on his return told defendant he had given the cheque to the manager to forward it to N. for collection. H. in fact retained the cheque and the same day transferred it to plaintiff for value. Held, that defendant was liable on the cheque Arnold v. Caldwell, 1 Man. L. R. 81 (1884).

15. A banker paid a cheque where the amount had been raised, but in such a way that it could not be easily detected. He was held liable to the customer for the difference between the genuine and the altered cheque: Hall v. Fuller, 5 B. & C. 750 (1826).

16. Where a cheque was so carelessly drawn as to be easily altered by the holder to a larger sum, so that the bankers, when they paid it, could not distinguish the alteration:-Held, that that the loss must fall on the drawer, as it was caused by his negligence Young v. Grote, 4 Bing. 253 (1827).

17. Filling in a blank cheque with a larger sum than that authorized is forgery: Reg. v. Wilson, 2 C. & K. 527 (1847).

18. An authority to draw cheques does not necessarily include an authority to draw bills: Forster v. Mackreth, L. R. 2 Ex. 163 (1867).