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gence pays it, if crossed generally, to a bank, or, if $ 79. crossed specially, to the bank to which it is crossed, or to a bank acting as its agent for collection, the bank paying the cheque, and if the cheque has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner thereof. Imp. Act, s. 80.
This section gives to a bank on which a cheque is drawn Disadvanthe protection, in the case of a crossed cheque, which our loser of Parliament refused to give it as to demand bills and cheque. ordinary cheques by striking out of the bill the clause corresponding to section 60 of the Imperial Act. On the other hand, it furnishes to the other parties to a cheque a strong reason for objecting to the crossing of a cheque. If a crossed cheque which has not been made "not negotiable" is lost or stolen before it reaches the hands of the payee, and the bank pays it in good faith and without negligence even upon a forged indorsement, the drawer has no recourse against the bank which has paid or the bank which has collected, but can only look to the guilty party or some subsequent holder. See Ogden v. Benas, L. R. 9 C. P. 513 (1874); Patent Safety Gun Cotton Co. v. Wilson, 49 L. J. C. P. 713 (1880); section 81. If it is lost or stolen after reaching the hands of the payee, and is paid in like manner, the drawer is released but the payee, indorsee, or holder who has lost the bill, or from whom it has been stolen, is in the same position as the drawer in the case just mentioned.
80. Where a person takes a crossed cheque Effect of which bears on it the words "not negotiable," he
§ 80. shall not have and shall not be capable of giving a better title to the cheque than that which had the person from whom he took it. Imp. Act, s. 81.
Making a cheque "not negotiable" puts it on the same footing as an overdue bill, so that any holder takes it subject to the equities attaching to it, and no person can become a holder in due course. If such a cheque should be lost or stolen the person receiving the money from the collecting bank would be liable in any event.
Where a cheque crossed "not negotiable" was drawn in favor of a firm, and one partner S., in fraud of plaintiff his co-partner indorsed it to defendant, who got it cashed for S., defendant was held liable to the co-partner who under the partnership articles was entitled to the cheque: Fisher v. Roberts, 6 T. L. R. 354 (1890). See National Bank v. Silke, [1891), Q. B. 435.
81. Where a bank, in good faith and without ing bank. negligence, receives for a customer payment of a cheque crossed generally or specially to itself, and the customer has no title, or a defective title thereto, the bank shall not incur any liability to the true owner of the cheque by reason only of having received such payment. Imp. Act, s. 82.
Section 79 relieves the bank on which the crossed cheque is drawn; this section, the bank which collects it. If it is indorsed "per proc." and the banker makes no inquiry as to the authority to so indorse, this may be negligence: Bissell v. Fox, 53 L. T. N. S. 193; 1 T. L. R. 452 (1885). See Mathiessen v. London & County Bank, 5 C. P. D. 7 (1879); Bennett v. London & County Bank, 2 T. L. R. 765 (1886).
Only seven sections of the Act, 82 to 88, are devoted specially to promissory notes. As will be seen from section 88, however, most of the provisions of the Act in Part II. relating to bills of exchange, except those connected with their acceptance, apply also to promissory notes.
82. A promissory note is an unconditional Promissory promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person, or to bearer. Imp. Act, s. 83 (1).
This definition of a promissory note is an adaptation of that of a bill of exchange, given in section 3, with the necessary modifications.
The definition in the Civil Code, Quebec, is given in Art. 2344 as follows:-"A promissory note is a written. promise for the payment of money at all events and without any condition." The French Code de Commerce does not define a note, but, after specifying what articles apply to notes as well as to bills, says, Art. 188:-"A promissory note is dated. It specifies the sum to be paid, the name of the person to the order of whom it is made, the time at which payment must be made, the value furnished in money, goods, account, or otherwise."
The definition makes no change in the law as to what is a promissory note, except that in Nova Scotia and New Brunswick notes payable otherwise than in money, which, under provincial Acts, were, in certain respects, placed on the same footing as promissory notes payable in money, and were generally called promissory notes, will no longer be so considered. A note payable to a specified person and not to his order, or to bearer, was considered a promissory note before the Act but was not negotiable. It is now negotiable: sections 8 and 88.
"Unconditional promise."-The maker of a note is deemed to correspond with the acceptor of a bill: section 88. A bill is an unconditional order, but the acceptance may be conditional: section 19. There is consequently this difference, that while the undertaking of the acceptor may be only conditional, that of the maker of a note ist unconditional, and corresponds with the position of an unconditional acceptor.
"In writing."-As to what is a writing, see p. 36.
"One person to another."-While there are three parties to a bill of exchange, the drawer, the drawee, and the payee, there are only two necessary parties to a promissory note, the maker and the payee.
"Signed."-As to what is a signature under the Act, see pp. 39 to 41. Where a person signs, as agent or in a representative character, it is often a matter of dispute whether he is personally liable. See pp. 160 to 166.
"On Demand" etc.- A note is payable on demand which is expressed to be so payable, or in which no time for payment is expressed: sections 10 and 88. A note is payable at a fixed or determinable future time which is expressed to be payable at a fixed period after date, or on or at a fixed period after the occurrence of a specified event which
is certain to happen, though the time of happening is $82. uncertain sections 11 and 88. See notes and illustrations under the former of these sections.
"A sum certain in money."-See pp. 41 to 45; also section 9 and the notes and illustrations thereunder.
"Specified person. "-The person to whom or to whose order a note is made payable is called the payee. If the note is not payable to bearer, he should be named or otherwise indicated with reasonable certainty: section 7. See p. 45.
"Bearer."-Most of the companies incorporated under Imperial, Dominion or Provincial Charters are prohibited from issuing a note payable to bearer. See pp. 131 to 136; also 54 Vict. c. 35 (Que). All persons except chartered banks are prohibited under a penalty of $400 from issuing notes payable to bearer, intended to circulate as money: Bank Act, 53 Vict. c. 31, s. 60.
No particular form of words is required to constitute a valid note, provided the instrument meet the requirements of the definition: Hall v. Bradbury, 1 Rev. de Leg. 180 (1845); Hooper v. Williams, 2 Ex. at p. 20 (1848). But a promissory note, as between the original parties at least, is something which they intend to be a promissory note: Sibree v. Tripp, 15 M. & W. at p. 29 (1846). If an instrument is ambiguous and it is uncertain whether it was meant to be a bill or note, the holder may treat it as either at his option: Edis v. Bury, 6 B. & C. 433 (1827); Fielder v. Marshall, 9 C. B. N. S. 606 (1861). The construction most favorable to the validity of the instrument will be adopted: Mare v. Charles, 5 E. & B. at p. 981 (1856).
If an instrument is in the form of a bill, and the drawer and the drawee are the same person, or the drawee is a fictitious person or one not having capacity to contract, it may be treated as a note by the holder: section 5, s-s. 2.