§ 51

tion.

Where an agent draws, accepts, makes or indorses "per pro.," or words of like import, the taker of such a bill or note Signature is bound to inquire as to the extent of the agent's authority, by procuraWhere an agent has such authority, the abuse of it does not affect a bona fide holder for value. The apparent authority is the real authority: Bryant v. Quebec Bank, [1893] A. C. 170; Bissel v. Fox, 53 L. T. N. S. 193; 1 T. L. R. 452 (1885); Westfield Bank v. Cornen, 37 N. Y. (10 Tiffany) 322 (1867).

tion

The same rule applies where a bill is signed on behalf Corporaof a corporation by its officers or agents. In such a case the officers. statute or by-laws take the place of the power of attorney. As to Dominion and Provincial Joint Stock Companies, see the notes on sec. 47, ante p. 137.

An agent or attorney who is not competent to make Agents. himself liable on a bill, may nevertheless be able to bind a principal. It may be laid down as a general rule that all persons of sane mind are capable of becoming agents to sign bills. This applies to infants, married women, etc.

As to the personal liability of an agent who transcends his authority or who signs without authority, see the notes on the next section.

"The mandate and powers of the partners to act for Partners. the partnership cease with its dissolution, except for such acts as are a necessary consequence of business already begun:" C. C. Art. 1897. The giving of a note or the drawing or accepting a bill in the firm name even for partnership business would not be such an act, but would require special authority from the co-partners: Dolman v. Orchard, 2 C. & P. 104 (1825); Bank of Montreal v. Page, 98 Ill. 110 (1881).

ILLUSTRATIONS.

1. A general power of attorney to an agent to sign bills, notes, etc., and to superintend, manage and direct all the affairs of the principal, gives him a power to indorse notes: Auldjo v. McDougall, 3 U. C. O. S. 199 (1833).

2. D. was a clerk or agent keeping a store at L. for defendant, who had sanctioned his purchasing certain goods. Held, that the circumstances gave D. no implied authority to sign defendant's name to a note: Heathfield v. Van Allan, 7 U. C. C. P. 346 (1857).

§ 51

3. J. M. B. held a power of attorney from the executors of E., authorizing him, among other things, to indorse notes in their names. Procura - He indorsed some notes "J. M. B., agent of the executors of E.," tion. and others "the executors late E., per pro B.," and delivered them to M., an executor, who was financially embarrassed, and who discounted them with plaintiffs on his private account. Held, that the indorsements were sufficient in form, but not within the scope of B.'s power, and the other executor was not liable: Gore Bank v. Crooks, 26 U. C. Q. B. 251 (1867).

4. When the president was authorized by the directors to sign a note in the name of the company, irregularity in the appointment of the directors was not sufficient to destroy such authority, when the company received value and the plaintiff took the note in good faith Currier v. Ottawa Gas Company, 18 U. C. C. P. 202 (1868).

5. A wife bought her husband's insolvent estate and the business was continued by him, she having given him a power of attorney. Held, that his agency was not limited by the writing, but might be ascertained from any admissible evidence, and she was held for notes given by him not strictly within the written authority: Cooper v. Blacklock, 5 Ont. A. R. 535 (1880).

6. Where an agent fraudulently gave a note, which was, however, within the scope of his authority, the principal was held liable to a bona fide holder for value: Molsons Bank v. Brockville, 31 U. C. C. P. 174 (1880).

7. In the absence of proof to the contrary the secretary of a commercial company will be presumed to have authority to indorse notes payable to the order of the company: Wood v. Shaw, 3 L. C. J. 173 (1858).

8. A non-commercial corporation is not liable on a bill drawn by the manager upon and accepted by the secretary in his capacity as such, which is not authorized by the board: Browning v. British American Friendly Society, 3 L. C. J. 306 (1859).

9. Where a promissory note is signed by procuration, proof of the due execution of such procuration must be made to entitle the plaintiff to recover judgment in an ex parte suit on a note: Ethier . Thomas, 15 L. C. J. 225; 17 L. C. J. 79 (1870). See also Joseph v. Hutton, 9 L. C. R. 299 (1859).

10. A power of attorney to a husband to administer the affairs of his wife generally, and to mortgage her property, is not an authority to sign her name to a promissory note, and verbal evidence of his right to sign could not be received, his powers being governed by the terms of the written power of attorney: St. Jean v. The Metropolitan Bank, 21 L. C. J. 207 (1876).

11. An agent under a general power of attorney cannot bind his principal by bill or note: Castle v. Baby, 5 L. C. R. 411 (1854); Messier v. Davignon, 3 L. C. L. J. 67 (1867); Serre v. Metropolitan Bank, 21 M. C. J. 207 (1876); Molsons Bank v. Cooke, Q. R. 27 S. C. 130 (1905).

12. The president of a company incorporated under the Canada Joint Stock Companies' Act, 1877, will be presumed to have auth

ority, in absence of proof to the contrary, to sign a promissory note § 51 on behalf of the company: Brice v. The Morton Dairy Farming Co., 6 L. N. 171 (1882).

13. Where a cheque was payable to the order of "William Almour," the bank was not justified in paying it on the indorsement "William Almour, per A. B. Almour," unless the authority of the latter to indorse were proved: Almour v. La Banque Jacques Cartier, M. L. R. 1 S. C. 142 (1884).

66

66

14. The by-laws of a mutual insurance company gave the president the management of the concern and funds, with power to act in his discretion and judgment in the absence of specific directions from the directors." It was also made his duty to sign all notes authorized by the board or by virtue of the by-laws." Held, that the company was liable on a note in settlement of a loss, signed by the president: Jones v. E. T. Mutual Fire Ins. Co., M. L. R. 3 S. C. 413 (1887).

15. A power of attorney to draw, accept and indorse bills of exchange, promissory notes, bills of lading, delivery orders, dock warrants, bought and sold notes, contract notes, charter parties, etc., includes the power to make and sign promissory notes, more particularly where the whole tenor of the document shows the intention to confer powers of general agency: Quebec Bank v. Bryant, 17 Q. L. R. 78 (1891); affirmed on appeal, and in the Privy Council, Bryant v. Quebec Bank, [1893] A. C. 179.

16. A power of attorney, whether bestowed by a written instrument or inferred from a train of circumstances, must be construed strictly. The power of attorney in Quebec Bank v. Bryant, supra (15) does not give the agent power to borrow money for the principai: Banque du Peuple v. Bryant, 17 Q. L. R. 103 (1891); reversed on appeal, but the original judgment was restored in the Privy Council Bryant v. Banque du Peuple, [1893] A. C. 170.

17. A wife appointed her husband her general and special attorney, with power to draw for her bills of exchange, promissory notes, etc. Held, that the wife's liability was not limited by Art. 181 C. C. to notes required for the purposes of administration: Banque d'Hochelaga v. Jodoin, [1895] A. C. 612.

18. The company's station agent endorsed and cashed cheques given for freight. He had no authority to endorse. Held that the bank was liable to the company as the owner of the cheques, and it was no answer that the agent had used the proceeds to cover up previous defalcations: Canadian Pacific Ry. Co. v. Hochelaga Bank, 5 E. L. R. (Que.) 569 (1908).

19. Where a note is payable to a testator, the indorsement by one of several executors held sufficient: Almon v. Cock, 3 N. S. (2 Thomson) 265 (1847).

20. The agent of a company gave a mortgage note in its name for the balance of the purchase price of land. The company with knowledge of the fact did not repudiate his act, but took possession of the land. Held, that it was estopped from denying its liability on the note: Ryan v. Terminal City Co., 25 N. S. 131 (1893).

Procuration.

§ 51

Procuration.

21. The power of an agent authorized to draw a bill ceases with the drawing, and if the principal is afterwards relieved, the agent cannot revive his liability: McGhie v. Gilbert, 6 N. B. (1 Allen) 235 (1848).

22. A bill drawn on a merchant was accepted by his clerk, "per pro." The drawee in speaking of the bill some months later said that the drawer should pay it as it was for his benefit. Held, that this was sufficient to leave to the jury the question of whether the clerk's authority had been recognized: Morrison v. Spurr, 8 N. B. (3 Allen) 288 (1856).

23. The indorsee of a note died intestate. His widow who was not administering the estate could not indorse it, even to pay funeral expenses and her husband's debts: Gerow v. Holt, 24 N. B. 412 (1884).

24. The local manager of a company was authorized to indorse cheques only for deposit with the Bank of British Columbia. The Bank of Montreal gave him the cash for cheques which he indorsed in the company's name. Held that the bank was liable to the company for the amount so paid: Hinton v. Bank of Montreal, 9 B. C. R. 545 (1903); Gompertz v. Cook, 20 T. L. R. 106 (1903).

25. B., a member of a firm, gave a power of attorney to accept bills in his name in respect of his private business, to his co-partner S. The latter accepted a bill in respect of partnership business in the name of B. and the bill was negotiated. Held, that B. was not liable: Attwood v. Munnings, 7 B. & C. 278 (1827).

25. A confidential clerk was accustomed to draw cheques for his employers, and in one instance at least was authorized to indorse for them, and in two instances they received money through his indorsing their name. These facts were evidence to go to a jury as to his general authority to indorse: Prescott v. Flynn, 9 Bing. 19 (1832).

27. A power of attorney giving full power to manage certain real estate, followed by general words giving full power to do all the business of the principal, does not authorize the agent to indorse bills in the name of the principal: Esdaile v. La Nauze, 1 Y. & C. 394 (1835).

28. In an action against an acceptor of a bill of exchange, accepted in his name by another person, when evidence had been given of a general authority in that person to accept bills in defendant's name, an admission by defendant of liability on another bill so accepted, is confirmatory of the former: Llewellyn v. Winckworth, 13 M. & W. 598 (1845).

29. The party taking an acceptance or indorsement per procuration cannot hold the principal if the authority given be exceeded: Alexander v. Mackenzie, 6 C. B. 766 (1848); Stagg v. Elliott, 12 C. B. N. S. 373 (1862); North River Bank v. Aymar, 3 Hill 262 (1842).

30. M., a traveller, obtained from a customer of his employers an acceptance in blank, which he signed as drawer and indorser and fraudulently negotiated. It was proved that on a former occasion he had obtained from the customer a blank acceptance which his em

$51

ployers received in payment, and on this occasion he showed the customer a letter that his employers desired to draw upon him. Held that neither the letter nor the former dealing authorized him to Procuration. draw the bill: Hogarth v. Wherley, L. R. 10 C. P. 630 (1875).

31. An agent appointed to wind up the business of a firm held not to have authority to accept bills drawn on the firm, or to accept a bill in the name of a partner: Odell v. Cormack, 19 Q. B. D. 223 (1887).

32. The general 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 Co." 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 (1887).

33. Defendants' manager had authority to draw on their bank account for the business, but not to overdraw or to borrow. Having overdrawn the account for his own purposes, he borrowed money from plaintiff, and gave him a cheque of the firm, paying the money to the firm's credit in the bank, and using it for their business. It was held, that plaintiff could not recover on the cheque as it exceeded the authority given, but defendants were liable for money had and received: Reid v. Rigby, [1894] 2 Q. B. 40.

34. À power of attorney to draw, indorse, or accept bills, does not authorize the agent to become a party to accommodation paper: Wallace v. Branch Bank, 1 Ala. 565 (1840); North River Bank v. Aymar, 3 Hill (N. Y.) 262 (1842); Kingsley v. State Bank, 3 Yerger (Tenn.) 107 (1832); German Nat. Bank v. Studley, 1 Mo. App. 260 (1876). But the principal would be liable to a holder in due course: Edwards v. Thomas, 66 Mo. 469 (1877): North River Bank v. Aymar, supra.

Signing in

sentative

capacity.

52. Where a person signs a bill as drawer, endorser or acceptor, and adds words to his signa repreture indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability.

ing

2. In determining whether a signature on a bill Rule for is that of the principal or that of the agent by determinwhose hand it is written, the construction most capacity. favourable to the validity of the instrument shall be adopted. 53 V., c. 33, s. 26. Imp. Act, ibid.