Capacity tions. § 47 by any agent, officer or servant of the company in general accordance with his powers as such under the by-laws of the of corpora- company, shall be binding upon the company. 2. In no case shall it be necessary to have the seal of the company affixed to any such contract, agreement, engagement, bargain, bill of exchange, promissory note or cheque, or to prove that the same was made, drawn, accepted or endorsed, as the case may be, in pursuance of any by-law or special vote or order. 3. No person so acting as agent, officer or servant of the company, shall be thereby subjected individually to any liability whatsoever to any third person:" R. S. C. c. 79, ss. 32 and 160. Provincial charters. It is also provided that every company incorporated by Letters Patent shall have its name with the word "limited" after it mentioned in all bills of exchange, promissory notes, endorsements and cheques purporting to be signed by it or on its behalf; and every director, manager or officer of the company, and every person on its behalf who signs or authorizes to be signed on its behalf any bill, note, endorsement or cheque without the said word, shall incur a penalty of $200 and be personally liable to the holder of such bill, note or cheque unless the same is paid by the company: R. S. C. c. 79, ss. 33 and 115. In the case of companies incorporated by special Act and subject to the general Act, "the directors of the company shall be jointly and severally liable upon every written contract or undertaking of the company, on the face whereof the word 'limited,' or the words 'limited liability are not distinctly written or printed after the name of the company, where it first occurs in such contract or undertaking" R. S. C. c. 79, s. 165. The provisions of the general Acts of most of the provinces regarding companies incorporated by special Act or provincial Letters Patent regarding the making, accepting and endorsing of bills, notes and cheques, are similar to those of R. S. C. c. 79, above quoted. See 7 Edw. 7 (Ont.) c. 34, s.-S. 7 (1), and 27; R. S. Q. Arts. 4689 and 4746; R. S. N. S. c. 128, ss. 73, 74 and 88; C. S. N. B. c. 85, s. 72; R. S. Man. c. 30, s. 64; Cons. Ord. N.-W. T. c. 61, 97; R. S. B. C. c. 44, ss. 26 and 27. In England, where the power to issue bills and notes is not expressly given, it has been laid down that it will be 847 Corpora implied only when the corporation without it cannot carry on its business, or attain the end for which it was created, and that it cannot be implied from the power to contract tions. debts, since the power to issue commercial or negotiable paper involves something more than the contracting of a debt, namely, the imposition upon the corporation of the liability to innocent indorsers for debts, which the corporation is not authorized to contract. See Lindley on Companies, p. 242; Bateman v. Mid-Wales Ry. Co., L. R. 1 C. P. 499 (1866); West London Commercial Bank v. Kitson, 13 Q. B. D. 360 (1884). It has also been held that this implied power is not possessed by a water works company: Neale v. Turton, 4 Bing. 149 (1827); Broughton v. Manchester Water Works, 3 B. & Ald. 1 (1819); or by mining companies: Dickinson v. Valpy, 10 B. & C. 128 (1829); Brown v. Byers 16 M. & W. 252 (1847); Bult v. Morrell, 12 A. & E. 745 (1840); by a salvage company: Thompson v. Universal Salvage Co., 1 Ex. 694 (1848); by a gas company: Bramah v. Roberts, 3 Bing. N. C. 963 (1837); by a railway company: Bateman v. Mid-Wales Ry. Co., L. R. 1 C. P. 499 (1866); or by a cemetery company: Steele v. Harmer, 14 M. & W. 831 (1845). The tendency of recent decisions, however, is towards a more liberal interpretation of these powers: Re Peruvian Railways Co., L. R. 2 Ch. 617 (1867). In the United States, the Courts have laid down the broad rule, that whenever a corporation can contract a debt for a certain object, it may give a negotiable note, or accept a bill of exchange for the amount: 1 Daniel, §§ 381-3. ILLUSTRATIONS. 1. Under the Act, 7 Vic. c. 16, the K. M. R. Co. incorporated for repairing vessels, etc., may give and receive notes in the course of its business: Kingston Marine R. Co. v. Gunn, 3 U. C. Q. B. 368 (1846). 2. The Buffalo B. & G. Ry. Co. have no power under their charter or under the General Railway Clauses Consolidation Act to make promissory notes: Topping v. Buffalo B. & G. Ry. Co., 6 U. C. C. P. 141 (1856). 3. A manufacturing company will be presumed to be a trading corporation and capable in law of making a promissory note: Farrell v. Oshawa Manufacturing Co., 9 U. C. C. P. 239 (1859). 4. Debentures or coupons cannot be considered promissory notes when the company which issues them has no authority to make notes: Geddes v. Toronto Street Railway Co., 14 U. C. C. P. 513 (1864). $47 Corporations. 5. A building society, incorporated under C. S. U. C. c. 53, may make promissory notes: Snarr v. Toronto Permanent Building and Savings Society, 29 U. C. Q. B. 317 (1869). 6. The defendants desiring to raise money drew a bill and requested plaintiffs to indorse it for their accommodation, which plaintiffs did. Defendants got it discounted, but failed to meet it and the plaintiffs had to pay it. Held, that, assuming defendants had no power to draw the bill, they were nevertheless liable to plaintiffs as for money paid for them: Brockville and Ottawa Ry. Co. v. Canada Central Ry. Co., 41 U. C. Q. B. 431 (1877). 7. Where the holders of a note sued the president of a club personally on a note of the club signed by him as president, on the ground among others that the club had no power to make notes, it was held that this was a matter of law known to plaintiffs as well as defendant, and they had accepted it as a note of the club, which had never repudiated liability: Bank of Ottawa v. Harrington, 28 U. C. C. P. 488 (1878). 8. S., who was the president and treasurer of a company, kept the company's account with a banker in his own name as president. He made a note in the company's name without authority, which the banker discounted, placing the proceeds to the company's credit. The president paid the money out to creditors of the company whom he should personally have paid with moneys which he had misappropri ated. The banker, being in good faith, was held entitled to charge up the note to the company's account: Bridgewater Cheese F. Co. v. Murphy, 23 Ont. A. R. 66 (1896). Affirmed 26 S. C. Can. 443 (1896). 9. Municipal corporations have not the right to make notes or accept bills: Pacaud v. Halifax South, 17 L. C. R. 56 (1866); Martin v. City of Hull, 10 R. L. 232 (1878). 10. A promissory note of a municipal corporation held good: Ledoux v. The Municipality of Mile End, 2 L. N. 37 (1878). 11. A municipal corporation will be condemned to pay the amount of a promissory note signed by the mayor and secretary-treasurer in the name of the corporation, where it is not proved that the note was given without consideration: Corporation of Grantham v. Couture, 24 L. C. J. 105 (1879); Ville d'Iberville v. Banque du Peuple, Q. R. 4 Q. B. 268 (1895). 12. Where the by-laws of a company require notes to be signed by the president and vice-president, and countersigned by the treas urer, a note payable to the order of the company indorsed by the vice-president alone and delivered to a creditor for a private debt is not binding on the company : Mechanics' Bank v. Bramley, 25 L. C. J. 256 (1879). 13. A building society not specially authorized to make notes held liable to an indorsee for value: Société de Construction du Canada v. La Banque Nationale, 3 L. N. 130; 24 L. C. J. 226 (1880). $47 14. The by-laws of a mutual assurance company gave the presi dent the management of its affairs, and it was his duty to sign all notes authorized by the board or by the by-laws. He gave a note in the name of the company in settlement of a loss. The company was tionsheld liable to a holder in due course: Jones v. Eastern Townships Mutual Fire Ins. Co., M. L. R. 3 S. C. 413 (1887). 15. The chairman and secretary-treasurer of a board of school commissioners have no right to give a note for a debt of the board without special authorization: Letellier v. School Commissio iers of Quiatchouan, 16 R. L. 449 (1888). 16. The making or indorsing of a promissory note on behalf of a charitable corporation where liability is incurred is not an act of mere administration, and must be either authorized or ratified by the gov erning body to bind the corporation: Banque Jacques Cartier v. Les Religieuses Soeurs, Q. R. 1 Q. B. 215 (1892). 17. Under R. S. Q. Art. 4889, as amended in 1890, a company is bound by the signatures of its officers to a promissory note only when they are authorized by a by-law or special resolution: Merchants Advertising Co. v. Bissonet, 10 Rev. de Jur. 209 (1903). 13. Authority to the secretary-treasurer of a company to accept bills drawn on the company, does not authorize him to indorse accommodation bills: Union Bank v. Eureka Woollen Mfg. Co., 33 N. S. 302 (1900). 19. The managing director of a company gave promissory notes of the company in connection with its business. There was no by-law defining his powers, but similar notes had been paid without objection by the other directors or the auditor. The company was held liable: Imperial Bank v. Farmers' Trading Co., 13 Man. R. 412 (1901). Corpora on holder. 48. Where a bill is drawn or endorsed by an Effect of infant, minor o corporation having no capacity or disability. power to incur liability on a bill, the drawing or endorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto. 53 V., c. 33, s. 22 (2). Imp. Act, ibid. It is not necessary to the validity of a bill that the drawer or endorsers should be liable. The drawer or any endorser may insert an express stipulation negativing his liability to the holder: sec. 34. As to estoppel of the drawer, acceptor, or endorser of a bill to a holder in due course, see sections 129, 130 and 133. It is to be observed that a married woman is not in- Married cluded in the list of incompetent persons who may become women. Married women. § 48 parties to a bill and render others liable thereon without incurring liability themselves. The clause is taken without change from the Imperial Act, and in England she is now practically in the same position as if unmarried. By the law of Quebec, if not separate as to property, a wife could not validly pass the property in a bill payable to her order, without authorization of her husband, except as against an acceptor, drawer or endorser, who is precluded from denying it under sections 129, 130, and 133. See C. C. Art. 177. Forgery. ILLUSTRATIONS. 1. The holder of a note, payable to a certain society or bearer, may recover from the maker, even although the society has no power to endorse or transfer notes: Hammond v. Small, 16 U. C. Q. B. 371 (1858). 2. A husband, who made a note payable to the order of his wife, is liable to her indorsee: McIver v. Dennison, 18 U. C. Q. B. 619 (1859). 3. An indorser pour aval cannot set up as a defence that the note is null because the maker, a married woman, was not authorized by her husband: Norris v. Condon, 14 Q. L. R. 184 (1888). 4. In an action against an acceptor by an indorsee, it is no defence that the drawers and payees were infants: Taylor v. Croker, 4 Esp. 187 (1803). 5. The infancy of the payee is no answer in an action by the indorsee against the drawer: Grey v. Cooper, 3 Douglas 65 (1782); Lebel v. Tucker, 8 B. & S. 833 (1867); Nightingale v. Withington, 15 Mass. 272 (1818). 49. Subject to the provisions of this Act, where a signature on a bill is forged, or placed thereon without the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded Estoppel. from setting up the forgery or want of authority: Provided that, Ratification. (a) nothing in this section shall affect the rati |