Sec. 8.

ferable bills

8. When a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, Non-transit is valid as between the parties thereto, but it is not valid. negotiable: 1

Imp. Act,s. 8.

2. A negotiable bill may be payable either to order or to Negotiable bearer: 2

bill.

to bearer.

3. A bill is payable to bearer which is expressed to be so Bill payable payable, or on which the only or last indorsement is an indorsement in blank : 3

to a particu

4. A bill is payable to order which is expressed to be so Bill payable payable, or which is expressed to be payable to a particular lar person. person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable: 4 When

transferable.

to order.

5. Where a bill, either originally or by indorsement, is Bill payable expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to Option of him or his order, at his option.

1 It was formerly a matter of doubt whether, by our law, it was not essential to the character of a bill of exchange that it should be negotiable, for otherwise it was thought that it might be deemed to have no greater effect than being evidence of a contract. It was formerly held that a bill payable to A. or bearer, was not negotiable. It is essential, however, to the negotiability of a bill between all persons except the Queen or Government, that it should be payable to order or bearer, or that some other equivalent words should be used, authorizing the payee to assign or transfer to third persons: Story on Bills, s. 60. There must be an intention apparent on the face of the bill or in the indorsement, that it is not negotiable. The drawing or indorsing it payable to a particular person simply, will not make it non-negotiable. See subs. 4, and s. 35.

ILLUSTRATIONS.

A note payable to A., without the words or bearer, or order, is valid: Smith v. Kendall, 6 T. R. 123.

A note payable to the "treasurer of the corporation of Toronto township," without words making it negotiable, cannot be sued upon by the township corporation: Township of Toronto v. McBride, 29 U. Ĉ. Q. B. 13.

A director of a company, jointly and severally with three others, made a promissory note payable to said company, and not negotiable, with the intent that it should be used by the company, upon the credit of the makers, for the purposes of the company, and the company indemnified

payee.

Sec. 8.

the makers against liability thereon; the plaintiffs discounted the note for the company, and paid the proceeds to the company, and the money was applied to the purposes of the company, and that after default in payment the director gave security to the plaintiffs against his liability upon the note: Held, that the plaintiffs were entitled to recover against the defendant the amount of the note, though not a negotiable instrument Bank of Hamilton v. Harvey, 9 Ont. R. 655; 16 S. C. R. 714.

An indorser of a non-negotiable note, or if negotiable, not indorsed by the payee, cannot be sued on such note: West v. Bown, 3 U. C. Q. B. 290.

2 A bill or note is a chose in action, and the title to it may be transferred by a separate writing, or by a voluntary deed constituting a declaration of trust, or by a written contract of sale: Chalmers on Bills, 118. Formerly it was the policy of the common law not to recognize the assignment of choses in action, for the reasons given by Lord Coke: "And first was observed the great wisdom and policy of the sages and founders of our law who have provided that no possibility, right, title or thing in action, shall be granted or assigned to strangers, for that would be the occasion of multiplying of contentions and suits of great oppressions of the people:" Lampert's Case, 10 Co. R. 48. But when the necessity of facilitating the operations of trade and commerce led to the recognition and ultimate reception of the lex mercatoria, the rigor of the common law had to be modified in regard to the assignment of bills of exchange. Legislative recognition was given to such assignments of bills by 3 & 4 Anne, c. 9, which provided that promissory notes should be assignable or indorsable over "in the same manner as inland bills of exchange are, or may be, according to the custom of merchants." Choses in action, previously assignable in equity, were first made assignable at law in Ontario in 1872 by the Act 35 Vic. c. 12, now R. S. O. 1887, c. 22, s. 6. There are some decisions holding that bank deposit receipts are not negotiable; but those payable to order have been held negotiable.

ILLUSTRATIONS.

A deposit receipt acknowledging the receipt of a sum certain by a bank to be accounted for to the party depositing the money, is not a negotiable instrument in equity any more than at law, so as to entitle the transferee to demand payment of the money from the bank: Mander v. Royal Canadian Bank, 20 U. C. C. P. 125 and 21 U. C. C. P. 492; s. p., Bank of Montreal v. Little, 17 Grant 313; Lee v. Bank of British North America, 30 U. C. C. P. 255; Moore Ulster Banking Co., 1. R. 11 C. L. 512; Voyer v. Richer, 13 L. C. J. 613, but see the latter case in L. R. 5 P. C. 461.

A bank deposit receipt payable to C. or order, with interest, but with the following condition: "No interest will be allowed unless the money remains with this bank six months; this receipt to be given up to the bank when payment of either principal or interest is required," is negotiable, and the holder is entitled to recover on it as a promissory note: Re Central Bank, Morton's & Block's Cases, 17 Ont. R. 574. But see the prior cases above referred to.

A writing, purporting to be a bank certificate that B. had deposited a sum of money in the C. Bank, dated C. Bank, July 6th, 1889, and payable

on the 1st December then next, to the order of B. and on the return of Sec. 8. the certificate, and signed " W., President," is negotiable and a bill of exchange: Kilgour v. Bulkley, 14 Conn. 362.

3"Bearer" is a descriptio persona, and a person holding a bill so payable, may take by that description as well as by any other. The contract is to pay to the bearer or the person to whom he shall deliver the bill : Grant v. Vaughan, 3 Burr. 1527. A transfer by mere delivery, without indorsement, of a bill or note, made or payable to bearer, does not render the transferor liable on the instrument to the transferee. The sending to market of a bill or note payable to bearer without, indorsing it, is prima facie a sale of the bill or note, and there is no implied guarantee of the solvency of the maker or any other party: Byles on Bills, 122. See as to warranty in such case, s. 58. Although a note is not in form negotiable, the payee may make it so by indorsing it payable to order, after which it becomes, as between him and the holder, an inland bill of exchange, which an indorsee takes subject to the same rules which govern instruments negotiable in the inception: Brenzer v. Wightman, 7 Watts & S. (Pa.) 264.

4 This sub-section alters the former law, under which it was held that a bill not drawn payable to order, was not negotiable: Plimley v. Westley, 2 Bing. N. C. 249; although the rule was held to be otherwise in regard to indorsements without the words " 'or order:" More v. Manning, Comyns 311; and evidence of a contrary mercantile usage was held to be inadmissible: Edie v. East India Company, 2 Burr. 1216. This clause does not apply to bills or notes dated prior to the first day of September, 1890.

certain.

9. The sum payable by a bill is a sum certain within the sum must be meaning of this Act, although it is required to be paid-Imp. Act s.9.

(a) With interest;

(b) By stated instalments ; 1

(c) By stated instalments, with a provision that upon default in payment of any instalment the whole shall become due; 2

Ind. Acts. 5.
Interest.

Instalments.

Exchange.

(d) According to an indicated rate of exchange, or accord- Rate of ing to a rate of exchange to be ascertained as directed by

the bill: 3

between fig

2. Where the sum payable is expressed in words and Discrepancy also in figures, and there is a discrepancy between the two, gures and the sum denoted by the words is the amount payable: 4

Ind. Act s.18

Sec. 9.

3. Where a bill is expressed to be payable with interest, Time when unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated, from the issue thereof, 5

interest

payable.

1

By s. 3, a bill must be an order to pay a sum certain in money.' See note 8 to that section, p. 38 ante. On a note payable by instalments, an action of debt will not lie until the last day of payment be past; because the different instalments are considered to constitute but one debt, and for one debt the plaintiff can bring but one action of debt, and cannot split his demand, and vex the debtor with a multitude of suits: Byles on Bills 333.

ILLUSTRATIONS.

"For value received, I promise to pay James McQueen and Jacob McQueen, or their order, the sum of £102.15, cy., to be paid in yearly proportions:"- Held, that the effect of this was to give two years for payment; and that no parol evidence could be admitted to prove that it was payable in four years, or until after the death of the plaintiffs" father: McQueen v. McQueen 9 U. C. Q. B. 536.

A bill of exchange was drawn, payable in three instalments. When the first instalment became due, the holder presented it at the bank where it was payable; the cashier paid the first instalment and returned the bill to the holder with the following indorsement: "Paid on the within $741.00, August 12, 1861;"-Held, an acceptance for the remaining instalments: Berton v. Central Bank, 5 All. N.B. 493.

A note payable by instalments is assignable under the statute of Anne, and three days grace are allowed on each instalment: Oridge v. Sherbone, 11 M. & W. 374; 7 Jur. 402.

"I agree to pay A. B., or order, £695, at four instalments, viz., the first on, &c., being £200; the second on, &c., being £150; the third on, &c., being £150; the fourth on, &c., being £100; the remainder, £95 to go as a set-off for an order of R. to G. and the remainder of his debt from D. to him," is an agreement and not a note: Davies v. Wilkinson, 10 A. & E. 98; 3 Jur. 405.

A premium note was given in these words: "I promise to pay said company the sum of $21 in such portions and at such time or times as the directors of said company may, agreeably to their Act of incorporation, require ;"-Held, a promissory note, and that the whole amount thereof was absolutely due: Washington Mutual Ins. Co. v. Miller, 26 Vt. 77.

In Quebec an action lies on a note payable by instalments as soon as the first day of payment is passed; but it lies only for the amount of the first instalment, each of them being considered as a separate debt: Clarihue v. Morris, 2 Rev. Leg. 30.

2 It is conceived that presentment and notice of dishonor are required when each instalment falls due, but that laches as to one instalment in ordinary cases only discharges an indorser as to that one; and that a note payable by instalments, cannot be indorsed over for less than the entire sum due upon it: Byles on Bills, 5.

ILLUSTRATIONS.

Where a bill or note is subject to a condition, that, on default in payment of the first instalment, the whole shall become payable, and default is made, an indorser is liable for the whole amount: Carlon v. Kennedy, 12 M. & W. 139.

A non-transferable note, payable in two instalments, or, on default in the former, at once, is valid, and the maker has three days grace: Miller v Biddle, 14 Jur. N. S. 980; 13 L. T. N. S. 34.

A promissory note made on the 25th April, 1872, to pay £170 with interest at five per cent. as follows: The first payment to wit, £40 or more, to be made on the 1st February, 1873, and £5 on the first day of each month following, until the note and interest should be fully satisfied; and upon default in payment of any of the instalments, the full amount then remaining due is to be forthwith payable, is a valid note: Cooke v. Horn, 29 L. T. Rep. 369.

3 The just and true exchange for moneys that is at this day used both in England and other countries, by bills, is par pro pari, or value for value, so that the English exchange being grounded on the weight and fineness of our own money, and the weight and fineness of those of each other country, according to their several standards, proportionable in their valuation, which being truly and justly made, ascertains and reduces the price of exchange to a sum certain for the exchange of moneys to any nation or country whatsoever: Beawes, Lex Mercatoria, 561. See as to exchange as damages, s. 57, and as to how the rate of exchange is to be calculated, s. 71.

ILLUSTRATIONS.

The current rate of exchange must be proved by extrinsic evidence; therefore a promise to pay a sum certain with the current rate of exchange added, is not a negotiable note, but a special promise, and requires proof of a consideration; Lowe v. Blisse, 24, Ill., 168.

Action on a sterling bill drawn by plaintiffs in London upon defendants in Upper Canada, accepted by defendants in London (one of them being at the time in London), and payable in London : Held, that the plaintiff's were entitled to recover the current rate of exchange: Greatorex v. Score, 6 U. C. L. J. 212.

It is not necessary in an action on a note, due and payable in the United States, to prove the value of dollars and cents in the States, as Canada has a corresponding currency, and there being no par value for the American currency fixed by law: Griffin v. Judson, 12 U. C. C. P. 430.

The figures at the top of the bill do only, as it were, serve as the contents of the bill, and a breviat thereof; but the words at length are in the body of the bill, and are the chief and principal substance thereof, whereto special regard ought to be had: Marius on Bills (1655), 34.

ILLUSTRATIONS.

A bill was drawn in words, " 'Pay to the order of C. two hundred pounds," and in the margin were the figures £245: Held, a bill for £200 only: Saunderson v. Piper, 5 Bing. N. C. 561.

Sec. 9.