APPENDIX III.

CASES UNDER THE BILLS OF EXCHANGE ACT.

It would require too much space to include in the abstracts of the following cases the text of the sections of the Bills of Exchange Act therein involved. Reference should therefore be made to the corresponding sections of the Negotiable Instruments Law, as shown in Appendix II, Table 11, supra, p. 187, or, as the case may be, to the Additional Sections of the Bills of Exchange Act set forth in Appendix I, supra, p. 177. To find the cases decided on any par ticular point, first find the section of the Negotiable Instruments Law covering the point by the use of the Index, infra, p. 239, then find the corresponding section of the Bills of Exchange Act in Appendix II, Table 1, supra, p. 184, then look under such section herein. For cases under provisions of the Bills of Exchange Act not adopted by the Negotiable Instruments Law, examine Appendix I and the cases under the corresponding sections herein.

[The figures in heavy-face type refer to the Sections of the Bills of Exchange Act.]

2. The possessor of an unindorsed bill payable to order, who is not the payee, is neither a "holder" nor a "bearer." Day v. Longhurst, W. N. (1893) 3; cf. Walters v. Neary, 21 T. L. R. 146, infra, sec. 31 (4).

3 (2). See infra, sec. 73. Bavins v. London & S. W. Bank.

5 (1). "Pay to order " means "pay to my order," and a bill so reading and indorsed by the drawer is a valid bill of exchange. Chamberlain v. Young, [1893] 2 Q. B. 206.

7 (1). See supra, sec. 5 (1). Chamberlain v. Young.

7 (3). A bill payable to a real person not intended by the drawer to have any interest in it is payable to a fictitious person and is to be treated as payable to bearer, and the acceptor's ignorance of the fiction is immaterial. Bank of England v. Vagliano, [1891] A. C. 107. See S. C., infra, sec. 24.

The drawer's ignorance that the payee is non-existing is also immaterial. Clutton v. Attenborough, [1897] A. C. 90. But if the payee is a real person intended by the drawer to be the payee, he is not a fictitious person, and the drawer is not liable to one claiming under a forged indorsement of the payee's name, although the payee really had no interest in the instrument. Bank of England v. Vagliano and Clutton v. Attenborough, distinguished. Vinden v. Hughes, [1995] 1 K. B. 795; Macbeth v. North & South Wales Bank, [1908] 1 K. B. 13, affirmed in House of Lords. 24 T. L. R. 397. Cf. cases under secs. 9-3 and 23 N. I. L.

8 (1). A check payable to M's order was crossed by the drawer "account of M., National Bank, Dublin." Held, that the check contained no words prohibiting a transfer or indicating an intention that it shall not be transferred, and M's indorsee could recover from the drawer. Semble, a check payable to order or to bearer cannot be made non-negotiable except by crossing it in the manner

provided by sec. 76. National Bank v. Silke, [1891] 1 Q. B. 435. See S. C., infra, sec. 76.

8 (4). The acceptor of bill payable to drawer or order, when accepting, struck out the words " or order" and wrote over his acceptance the words "in favor of F. (the drawer) only." Held, that the alteration was immaterial, the bill being still payable to order under sec. 8 (4), and the acceptance was a general acceptance of a negotiable bill. Meyer v. Decroix, [1891] A. C. 520.

13 (2). A post-dated check is not invalid, and may be properly stamped as a bill payable on demand. Royal Bank v. Tottenham, [1894] 2 Q. B. 715; Hitchcock v. Edwards, 60 L. T. Rep. 636.

A post-dated check is not irregular within sec. 29 (1) so as to charge the holder with equities. Hitchcock v. Edwards, 60 L. T. Rep. 636.

14 (1). A bill is dishonored by the refusal of the acceptor to pay at any time on the last day of grace, and notice of dishonor may be given at once to the drawer and indorsers. But no right of action arises until the following day. Kennedy v. Thomas, [1894] 2 Q. B. 759.

20 (2). A note signed in blank was filled up in excess of the authorized amount, the name of C. inserted as payee, and the completed note delivered to C., who took in good faith and for value. Held, that this was not a negotiation to a holder in due course within the meaning of the proviso to sec. 20 (2), and C. could not recover. Herdman v. Wheeler, [1902] 1 K. B. 361. (See criticism in 15 Harvard Law Rev. 579.)

But where defendant signed a note as maker in blank with authority to another to fill it up with a certain sum payable to plaintiff, and it was filled up for a larger sum and delivered to plaintiff, who had no notice of the fraud, held, that, independently of section 20 (2), defendant was estopped to deny the validity of the note as against the plaintiff. Herdman v. Wheeler distinguished. Lloyd's Bank v. Cooke, [1907] I K. B. 794.

The payee in such a case is a holder in due course, per Fletcher Moulton, L. J. Ib. 805, 809. Where, however, the defendant signed blank forms of promissory notes and left them with his attorney, but with no authority to complete and issue them until so instructed by telegram or letter, and the attorney without further instructions filled up the forms, making plaintiff payee, and plaintiff bought the notes bona fide for value, but although he knew that they had been signed in blank, and were held by the attorney under a power of attorney, made no inquiries as to its terms. Held, that as defendant had intrusted the blank forms to his attorney as custodian merely, and had not given him authority to issue them as negotiable instruments he was not estopped to deny the validity of the notes. Also per Fletcher Moulton, L. J., that plaintiff was bound to inquire into the attorney's authority. Lloyd's Bank v. Cooke distinguished. Smith v. Prosser, [1907] 2 K. B. 735.

21 (1). A bill of exchange was indorsed and handed to the payee's bankers to be discounted. Some days later the bankers credited the payee's account with the bill. Held, that the property in the bill did not pass to the bankers until it was discounted by them. Dawson v. Isle, [1906] 1 Ch. 633.

21 (2) Evidence of a contemporaneous oral agreement to renew a bill of exchange is inadmissible because its effect would be to contradict the terms of the written instrument. New London Credit Syndicate v. Neale, [1898] 2 Q. B. 487.

22 (1). Under the Infants' Relief Act, 1874, and Bills of Exchange Act, sec. 22, an infant cannot be held on a bill of exchange, even though it was given for necessaries and is in the hands of a holder in due course. In re Soltykoff, [1891] 1 Q. B. 413.

24. A bill payable to a real person not intended by the drawer to have any interest in it, is payable to a fictitious person, and is therefore to be treated as payable to bearer, under sec. 7, sub-s. 3, and payment of it in due course by the acceptor's banker is binding on the acceptor. Bank of England v. Vagliano, [1891] A. C. 107. See S. C., supra, sec. 7 (3).

A check on a London bank drawn in Roumania was transferred by a forged indorsement in Austria, where such transfer gave a good title. Held, that the validity of the transfer is to be governed by the law of Austria, section 24 B. E. A. being only declaratory of English law and not controlling the general rule of international law. Embiricos v. Anglo-Austrian Bank, [1905]1 K. B. 677. See also infra, sec. 72 (2), and infra, sec. 82, Kleinwort v. Comptoir National d'Escompte de Paris, and Lacave v. Crédit Lyonnais.

25. The manager of a company in order to obtain a guarantee for the company's business, without authority, gave a note signed "for myself and in representation of the company." This was not necessary or in the ordinary course of the company's business. Held, that the company was not liable on the note. Re Cunningham & Co., 36 Ch. D. 532.

An agent of a company drew a check " per proc.," in excess of his authority. The company is not liable on the check to one who cashed it in good faith, but must account for any money which came into its possession and was employed for its benefit. Reid v. Rigby & Co., [1894] 2 Q. B. 40. See also infra, sec. 82.

Bissell v. Fox.

Directors of a company which had no power to accept bills, accepted a bill per proc." the company. Held, that they are personally liable in an action for false representations. West London Commercial Bank v. Kitson, 13 Q. B. D. 360.

26. See supra, sec. 25.

27. A note made merely in renewal of a prior note which was without consideration is invalid for want of consideration. Edwards v. Chancellor, 52 J. P. 454.

Where the payee of a check deposits it with his bank, and is credited with the amount, the bank is a holder for value. Royal Bank v. Tottenham, [1894] 2 Q. B. 715, 717, 718. Capital & Counties Bank v. Gordon, [1903] A. C. 240, 245 semble. A fortiori if the amount is drawn out by the depositor. National Bank v. Silke, [1891] 1 Q. B. 435, 439.

27 (3). See infra, sec. 36 (2). Redfern v. Rosenthal.

29. The manager of a bank stole negotiable securities from the bank and pledged them with A. He afterwards got them back, with other negotiable securities, from A. by fraud and replaced them in the bank. The bank knew nothing of the transaction. Held, that the bank was a holder in due course and entitled to keep the securities. London & County Banking Co. v. London & River Plate Bank, 21 Q. B. D. 535.

Quare whether the payee of a note obtained by fraud can be a "holder in due course"? Lewis v. Clay, 14 T. L. Rep. 149; Herdman v. Wheeler, [1902] 1 K. B. 361. That he can be, see Lloyd's Bank v. Cooke, [1907] 1 K. B. 794, 805-808, semble. See supra, sec. 20 (2).

A post-dated check is valid and negotiable, and is complete and regular on its face, notwithstanding it is stamped as a check, and not as a bill of exchange payable on time. Hitchcock v. Edwards, 60 L. T. Rep. 636.

29 (1) (b). See infra, sec. 61.

29 (2). See infra, sec. 36 (2).

Nash v. De Freville.

Alcock v. Smith.

30 (2). When fraud has been proved, the burden of proof is on the holder to prove both that value has been given and that it has been given in good faith without notice of the fraud. Tatam v. Haslar, 23 Q. B. D. 345; Oakley v. Boulton, 5 T. L. R. 60; Harris v. Aldous, 18 New Zealand L. R. 449.

This section does not affect the practice of the Chancery Division, which requires the amount of the bill to be paid into court or security to be given upon an application for an injunction to restrain the negotiation of a bill alleged to have been obtained by fraud. Hawkins v. Ward, W. N. (1890) 203.

31 (4). Defendant, to accommodate C., drew a bill to his own order on C., who accepted the bill and transferred it to plaintiff for a loan. Defendant neglected to indorse the bill, which was not noticed by plaintiff when he made the advance. Held, that defendant was the "holder" of the bill within sec. 2, that he transferred it by means of C. to the plaintiff, and that plaintiff was entitled to have the indorsement of defendant and to recover against him on the bill. Walters v. Neary, 21 T. L. R. 146; cf. Day v. Longhurst, supra, sec. 2.

35 (1). An indorsee "for collection" cannot hold the acceptor where the drawer paid the amount of the bill before maturity to the indorser and released the acceptor, although said indorsee has paid the amount to the indorser. Under sec. 35 Bills of Exchange Act such indorsee gets no property in the bill. Williams, Deacon & Co. v. Shadbolt, 1 Cababé & Ellis, 529.

36 (2). A bill drawn for the acceptor's accommodation but which had never been negotiated was in the hands of the drawer after maturity, and having come into the possession of the drawer's solicitors, the latter claimed a lien on it for services previously rendered the drawer in an action to recover the bill from a converter, and sued the acceptor on the bill. Held, that plaintiffs taking the bill overdue could acquire no rights against the acceptor. Redfern v. Rosenthal, 86 L. T. Rep. 855; see also sec. 27 (3).

An overdue bill indorsed in blank was sold in Norway on a judicial proceeding against one of several joint owners of the bill. By the laws of Norway the purchaser acquired a good title as against the equity of the other joint owners.

Held, that although the bill was drawn and payable in England, sec. 36 (2) of the Bills of Exchange Act was not applicable and the purchaser was entitled to the bill. Alcock v. Smith, [1892] 1 Ch. 238; see also secs. 29 (2) and 72 (2).

In the above case Lindley, J. (p. 263), said that "defect of title' is a phrase introduced into the Bills of Exchange Act in lieu of the old expression 'subject to equities,' which is an expression not adopted, because the Act applies to Scotland as well as to England, and 'subject to equities' is an expression not known to Scotch law."

47 (2). See supra, sec. 14 (1).

Kennedy v. Thomas.

49 (12) (13). A branch of a country banking company sent to a London bank for collection a bill bearing several indorsements. Upon dishonor the London bank sent notice by post on the next day to another branch of the forwarding bank. The next day notice was sent by telegraph to the right branch, and the subsequent notices of dishonor to other parties were given in due time, Held, that sufficient notice of dishonor was given and the first indorser was liable. Fielding v. Corry, [1898] 1 Q. B. 268.

I

50 (1). Delay in giving notice of dishonor caused by the necessity of making inquiries as to the address of the party to be notified is excusable, the holder being ignorant of the address. The Elmville, [1904] P. 319.

Failure, after the exercise of reasonable diligence, to find the drawer of a dishonored bill at the address given by him, does not dispense with notice if an address at which he is to be found comes to the holder's knowledge before action brought. Studdy v. Beesty, 60 L. T. Rep. 647. The drawer, being ig norant that the bill had not been presented for payment, accepted notice of non-payment. Held, that he had not waived presentment. Keith v. Burke, 1 Cababé & Ellis, 551.

50 (2) (b). A bill was drawn by the A. Company to its own order on the B. Company and accepted and indorsed to the C. Company. All three companies knew that the bill would be dishonored. No notice of dishonor was given to the drawer, because the secretary of the C. Company, who was also secretary of the other two companies, knew it never was intended to make the drawer liable. Held, that it was not the duty of the secretary of the C. Company to communicate his knowledge of the dishonor to the drawer, that his knowledge was therefore not notice to the drawer, and that the latter was discharged. In re Fenwick, [1902] I Ch. 507.

51 (4). A bill was protested on 25th September, but the noting on bill was 24th September. The extended protest dated 25th September contained 25th September as date of noting. The protest was held invalid. M'Pherson v. Wright, 12 Sess. Cas. 942.

52 (2). See infra, sec. 87 (1). Gordon v. Kerr.

53 (2). A., having a certain sum on deposit with a bank, gave a check for a larger sum. Held, that the check on presentation operated as an intended assignation of the amount of the deposit. British Linen Co. Bank v. Carruthers, to Sess. Cas. 923.

A bill accepted payable at a banker's operates on presentment as an intended