§ 83.

Delivery necessary.

the bank enjoyed or the wealth of its shareholders, there is little doubt that at some distant date the holder of the bank note will be paid in full.

(c.) This subsection does not apply to the case provided for in § 5 (2), where a writing in the form of a bill may be treated as a note.

(d.) See in illustration Blyth v. Forbes, 27th June, 1879, 6 R. 1103; Wise v. Charlton, 6 L. J., K. B. 80, and Fancourt v. Thorne, 15 L. J., Q. B. 341. If, however, the writing in addition to containing a pledge of collateral security is so expressed as truly to be of the nature of a bond or obligation with security, it will be held not to be a note, Macfarlane v. Johnstone, 11th June, 1864, 2 M. 1210.

(e.) Vide § 4, and note (b) thereon. This definition does not make a note an inland note in the sense of the Stamp Act, vide § 3.

84. A promissory note is inchoate and incomplete until delivery thereof to the payee or bearer (a).

(a.) Vide § 21 and notes (b) and (c) thereon. It ought to be noted that the words "in order to give effect thereto " which are to be found in § 21 are omitted. It is however thought, that the omission of these words does not put delivery of a note in a different position from that of a bill, but merely fixes the time at which it shall be held to be issued. In § 21 it is said that every contract, including the acceptor's-i.e., the makers, vide § 89 (2), on a bill is incomplete and revocable till delivery in order to give effect thereto, while in this section, it is merely said to be inchoate and incomplete. The section refers to a note while in the possession of the maker, and before delivery-i.e., before transfer of possession, actual or constructive, from one person to another, vide § 2. If the maker transfers the possession of it to a third party it is delivered in the sense of the Act, and is no longer an inchoate and incomplete instrument, but the contract of the maker upon it,

vide § 88, is revocable, vide § 21, till it has been delivered to
the payee or some one to hold for him in order to give effect
thereto. Under the provision in the last-mentioned section
a valid and unconditional delivery will be presumed to have
been made until the contrary is proved, and if the note be in
the hands of a holder in due course, a valid delivery to all
parties prior to the holder will be conclusively presumed.

§ 84

several notes.

85. (1.) A promissory note may be made by two Joint and or more makers, and they may be liable thereon jointly, or jointly and severally, according to its tenour (a).

(2.) Where a note runs, "I promise to pay," and is signed by two or more persons, it is deemed to be their joint and several note.

(a.) This section will be interpreted according to the existing law in each country of the United Kingdom. In Scotland a note bearing, "We promise to pay," and signed by two or more obligants, is held to be, by the law merchant, a joint and several obligation, Ersk. Inst. iii. 3, 74; Bell's Prin. § 61; I. Bell's Com. 363; Watson's Bell's Dictionary, voce Co-obligant; Macmorland v. Maxwell, 19th Jan. 1675, Mor. 14673; Gordon v. Sutherland, 20th Jan. 1761, Mor. 14677. But in England a promissory note in these terms merely imports a joint-obligation, and any one party signing it will not be liable severally, but only jointly, Smith's Mer. Law, 8th edit. 221; Chitty on Bills, 11th edit. p. 24; Byles on Bills, 13th edit. p. 7. In a joint and several obligation each obligant is liable to the creditor for the whole amount, and can be sued therefor without calling the others, but is entitled to relief pro rata from the other joint-obligants; and if he has signed the bill as cautioner for the others, they will be bound to relieve him of any payment he may be called on to make; but in a question with a creditor his obligation is to pay the whole sum. In a joint-obligation all must be

§ 85.

Note payable on demand.

sued, and, in the first place, each is only liable for his own share, but is bound to make up any deficiency caused by the insolvency of the others, I. Bell's Com. 364. If any jointobligant in England be sued without calling the others, and he does not plead that the others must be called, decree against him will discharge the others, Chitty on Bills, 11th edit. p. 25. Accordingly, in England, but not in Scotland, the addition of the words "jointly and severally" would be a material addition, which would avoid the bill; while in Scotland the addition of the word "jointly" would have that effect, Gordon v. Sutherland, supra; Perring v. Howe, 2 C. and P. 401.

(b.) The difference between a bill and a note will be noted here. No one can accept except the drawee or an acceptor for honour, but a note bearing to be the obligation of a single person may become the joint and several obligation of as many persons as choose to sign it. In England it has been held that a note bearing, "I promise to pay-signed for self and partners," binds the firm, but not the individual partners, Chitty on Bills, 11th edit. p. 25; but in Scotland, wherever the firm is bound the partners are also bound, vide note on § 22.

86. (1.) Where a note payable on demand (a) has been indorsed (b), it must be presented for payment (c) within a reasonable time of the indorsement. If it be not so presented, the indorser is discharged (d).

(2. In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade, and the facts of the particular case (e).

(3.) Where a note payable on demand is negotiated, it is not deemed to be overdue, for the purpose of affecting the holder (f) with defects of title of which he had no notice, by reason that it appears

$86

that a reasonable time for presenting it for payment has elapsed since its issue (g).

(a.) Vide § 10.

(b.) Vide § 32.

(c.) Vide $$ 45 and 46.

(d.) Vide § 89 (2). The maker is deemed to correspond to the acceptor, who is not discharged by the lapse of any period short of the years of prescription, or by failure to discharge any of the duties imposed on the holder, vide § 52.

(e.) The three points here referred to vary in their relative importance in each case. Thus the indorser of a bank-note will not be discharged by a very long delay in presenting it, because such an instrument is intended to be kept in circulation for years before being presented. It may in some cases be the usage of trade to make use of promissory notes for large sums as equivalents for bank notes, and such a usage when proved will be given weight to. The greatest difficulty will probably be found in determining what is reasonable time, looking to the facts of the particular case. Thus, in the case of the Chartered Mercantile Bank of India, London, and China v. Dickson, L. R. 3, P. C. 574, a promissory note for £5000, dated 24th Feb. 1864, was granted by A. B. to C. D., who indorsed it to E., who indorsed it to the appellants. The note was payable on demand, but was not presented for payment till 14th December, 1864. The appellants sued the first indorser, who pleaded that there was undue delay in presenting the note, and that he was accordingly discharged. It was held that various objections to the validity of the note, which the defendant had stated were unfounded, and in the Privy Council the only question open for discussion was whether the bill was presented in a reasonable time or not. The Privy Council assumed for the purposes of the case that a note must be presented in a reasonable time, or the indorser would be discharged. The implication of law is that where a payee indorses, the

$86

Presentmen

of note for payment.

maker is the principal debtor, and the first indorser is a surety. No payment of the note by the makers at any immediate date or specific date was contemplated, and therefore the note was meant to be a continuing security. The defendant's partner left Colombo, where the transaction took place, about the end of March, and before leaving had a conversation with the appellant's manager in regard to this note, but he did not indicate any wish that the appellants should press it against the makers. The defendant's partner returned to Colombo in August, and found the account of A. B. in an unsatisfactory position, and on 22nd September sent to A. B. an account setting out, i.a., the note guaranteed to the appellants as a claim which they might have against them. Up to that date there was no unreasonable delay. Negotiations went on with the defendant's firm, which was then being wound up in consequence of a dissolution of the partnership. The defendants were clearly interested in keeping A. B. on foot, and in not bringing any pressure to bear. The appellants were never asked to present the note for payment, and did not do so till 14th December, 1864, when A. B. had become irretrievably insolvent. The Privy Council held that, considering all these facts and the actings of parties, the note was presented in reasonable time. See also Brooks v. Mitchell, 9 M. and W. 15.

(f.) Vide § 2.

(g.) The effect of this subsection is to give a holder, whether for value or not, the rights of a holder in due course, so far as defects of title to the note are concerned, vide § 29 (2), 38 (2), when a note is overdue, vide subsection 1, but will not put him otherwise in the position of a holder in due course.

87. (1.) Where a promissory note is in the body of it made payable at a particular place, it must be presented for payment (a) at that place in order to render the maker liable. In any other case presentment for payment is not necessary in order to render the maker liable (b).