$88. Applica

tion of Part II. to notes.

Corresponding terms.

As to foreign notes.

88. Subject to the provisions in this part, and except as by this section provided, the provisions of this Act relating to bills of exchange apply, with the necessary modifications, to promissory

notes:

2. In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to the drawer's order:

What provisions do

3. The following provisions as to bills do not not apply apply to notes, namely, provisions relating to

(a) Presentment for acceptance;

(b) Acceptance;

(c) Acceptance supra protest;

(d) Bills in a set: Imp. Act, s. 89 (1) (2) (3).

The following sections in Part II. of the Act do not apply to promissory notes:-3, 4, 5, 6, 15, 17, 18, 19, 36 s-s. 3, 39, 40, 41, 42, 43, 44, 53, 54 s-s. (1) (2), 64, 65, 66, 67 and 70.

4. Where a foreign note is dishonored, protest thereof is unnecessary, except for the preservation of the liabilities of indorsers. Imp. Act, s. 89 (4).

The exception in this sub-section is not in the Imperial Act. Its effect is to place foreign notes on the same footing as foreign bills: section 51, s-s. 2.

PART V.

SUPPLEMENTARY.

89. A thing is deemed to be done in good Good faith faith within the meaning of this Act, where it is in fact done honestly whether it is done negligently or not. Imp. Act, s. 90.

The expression "in good faith" is used in section 29 with reference to a holder in due course acquiring a bill; in section 59, with reference to payment in due course; and in sections 78 and 81, with reference to the payment of a crossed cheque.

The rule of the civil law is that "good faith is always presumed; he who alleges bad faith must prove it": C. C. Art. 2202. See section 30 as to the shifting of the onus of proof once fraud is proved.

section.

This section was considered in England recently in the Origin ɔf case of Tatam v. Haslar, 23 Q. B. D. 345 (1889). Denman, J., there says that it is obviously founded upon the distinction which is pointed by Lord Blackburn in Jones v. Gordon, 2 App. Cas. at p. 629 (1877), between honest blundering or carelessness and a dishonest refraining from inquiry. The following is the substance of the remarks referred to:If value has been given for a bill, it is not enough to shew that there was carelessness, negligence or foolishness in not suspecting that the bill was wrong when there were M'C.B.E.A.-28

§ 89. circumstances that might have led a man to suspect that. It is necessary to show that the person who gave value for the bill, whether the value given be great or small, was affected with the notice that there was something wrong about it when he took it. It is not necessary that he should have notice of what the particular wrong was. Evidence of carelessness or blindness may be good evidence upon the real question, which is, whether he did know that there was something wrong in it. If he was honestly blundering and careless, and so took a bill or note when he ought not to have taken it, still he would be entitled to recover. But if the facts and circumstances are such that the jury, or whoever has to try the question, comes to the conclusion that he was not honestly blundering and careless, but that he must have had a suspicion that there was something wrong, and that he refrained on this account. from asking questions or making further inquiry—I think that is dishonesty.

Bad faith more than

In re Gomersall, 1 Ch. D. at p. 146 (1875), it is said negligence. that "negligence or carelessness on the part of the holder

of a bill, is not of itself sufficient to deprive him of his remedies for procuring its payment. But negligence or carelessness, when considered in connection with the surrounding circumstances, may be evidence of mala fides." In Swan v. North British Australasian Co., 2 H. & C. 184 (1863), Byles, J., says: "The negligence of the holder makes no difference in his title. However gross the bolder's negligence, if it stop short of fraud, he has a title." The same rule was laid down in Goodman v. Harvey, 4 A. & E. at p. 876 (1836), going somewhat farther in this direction than Crook v. Jadis, 5 B. & Ad. 909 (1834), which was a partial departure from the rule laid down in Gill v. Cubitt, 3 B. & C. 466 (1824), when the jury was told that the question was, whether the holder of the bill took it under circumstances that ought to have excited the suspi

cion of a prudent and careful man. This last case was § 89. disapproved of in Bank of Bengal v. McLeod, 5 Moore's Indian Appeals 1 (1849), and Raphael v. Bank of England, 17 C. B. 161 (1855); and in London and County Bank v. Groome, 8 Q. B. D. 288 (1881), it was held to have been overruled. The old rule in England was similar to that laid down in the recent cases and adopted by the Act.

Some American authorities followed Gill v. Cubitt, but the contrary doctrine has been firmly established there. See Murray v. Lardner, 2 Wall. (U. S.) 110 (1864); Shaw v. Railroad Co., 101 U. S. (11 Otto) 564 (1879); Swift v. Smith, 102 U. S. (12 Otto) 444 (1880); Shreeves v. Allen, 79 Ill. 553 (1875); Johnson v. Way, 27 Ohio St. 374 (1875); Mabie v. Johnson, 6 Hun. (N. Y.) 309 (1876); Stimson v. Whitney, 130 Mass. 591 (1881); Daniel, §§ 775, 1503.

This rule has been generally recognized in Canada, although there are expressions in certain cases that are not quite consistent with it.

90. Where, by this Act, any instrument or Signature. writing is required to be signed by any person, it is not necessary that he should sign it with his own hand, but it is sufficient if his signature is written thereon by some other person by or under his authority: Imp. Act, s. 90 (1).

As to what is a writing or signature within the meaning of the Act, see ante pp. 36, 39.

As to a signature by procuration, see section 25 and the notes and illustrations thereunder.

The person whose name is signed, is sometimes held liable on the ground of having authorized it before it was signed, sometimes on account of having ratified it, and frequently on the ground of estoppel.

§ 90.

ILLUSTRATIONS.

See also Illustrations ante pp. 151, 155.

1. In an action against B. and S., a firm of solicitors, on promissory notes indorsed by B. in the name of the firm, it was proved that on other occasions S. had indorsed in the same manner with B.'s knowledge. Held, sufficient evidence to go to the jury of a mutual authority: Workman v. McKinstry, 21 U. C. Q. B. 623 (1862).

2. Where one executor was authorized by the others to manage the estate, and signed notes in the names of all executors, but was given no authority to bind them personally, and they were not aware of the giving of the notes, held that the others were not liable on the notes: Gore Bank v. Meredith, 26 U. C. Q. B. 237 (1866).

3. Where a person, whose name had been signed as indorser for notes by a friend, gave a mortgage to secure the indebtedness and renewals "similarly indorsed," and allowed the maker to sign his name to the mortgage so that it would be in the same handwriting, the indorser was held liable for the indorsements although they were for a much larger sum than he was aware of: Merchants' Bank v. Bostwick, 3 Ont. A. R. 24 (1878).

4. A bank manager is not acting without the scope of his authority in accepting the cheque of a customer to deliver to another customer on a particular day, or on the happening of a specified event: Grieve v. Molsons Bank, 8 O. R. 162 (1885).

5. The power to draw bills is not of itself sufficient to establish the right to indorse in the name of the principal: Prescott v. Flinn, 9 Bing. at p. 22 (1832).

6. Where a wife had authority to indorse bills for her husband, and the name was written by her daughter in her presence and at her request, held, sufficiently authorized: Lord v. Hall, 8 C. B. 627 (1849).