Other negotiable instru

ments.

The Act applies only to bills, notes, and cheques and not to other negotiable commercial instruments with the exception of section 7, which declares that the provisions as to crossed cheques shall apply to warrants for the payment of dividends. It is certain, however, that the rules laid down as to bills, notes, and cheques, will by analogy be applied in the course of business by bankers and merchants to the other commercial instruments which have so much in common with them, and some of which are now undergoing the process by which customs and usages of trade are crystallized into and acquire the force of law. A short chapter on other negotiable instruments will be found at the end of the notes on the Act.

It is difficult to over-estimate the importance to the commercial interests of the Dominion of not only a uniform law, but also a uniform interpretation and application of the law. This desirable end has been, no doubt, brought about in a large degree by the fact that we have had the advantage of the decisions of the English Courts under the Act since its adoption in 1882. On some of the points raised, and on which the judgments of our Courts have been conflicting, we will soon have authoritative decisions from the Supreme Court or the Privy Council.

The United States. On account of the law as to bills and notes in many States differing in some respects from that of England and Canada, and also from that in force in other States, the reports have been of comparatively little value and in many cases actually misleading. In 1897 the State of New York adopted the Negotiable Instruments Law which will be found in the Appendix. Since that time it has also been adopted in thirty other States, three Territories, and the District of Columbia. An examination of this law shews that in the main it agrees with the English and Canadian Acts. Attention will be called to some important differences under the respective sections. On the whole, it will, no doubt, not only tend to greater uniformity in the States affected, but to closer agreement with English and Canadian decisions. This law, with a list of the States which have adopted it, will be found in the Appendix.

SHORT TITLE.

§ 1

1. This Act may be cited as change Act. 53 V., c. 33, s. 1.

the Bills of Ex-Short title. Imp. Act, ibid.

The Dominion Act 53 Vict. c. 33, of which the present Act is a revision, was called "The Bills of Exchange Act,

1890."

It was assented to on the 16th of May, but did not come into force until the 1st of September of that year. It was not retrospective, and that part of it which was new law did not apply to instruments issued before its commencement, except in the case of transactions and matters connected with them after that time; as for instance; the acceptance of such a bill after the first of September, or the protesting of a bill or note issued before, but only dishonored after that date: Maxwell on the Interpretation of Statutes, 321; Leeds and County Bank v. Walker, 11 Q. B. D. at p. 91 (1883).

The Imperial Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61, from which the Canadian Act of 1890 was almost wholly copied, has been held to be largely declaratory of the prior English law. The Master of the Rolls speaks of it as "the codifying Act which declares what was and is the law": Vagliano v. Bank of England, 23 Q. B. D. at p. 248 (1889); and Stirling, J., says that it "may be accepted as declaratory of the prior law": Re Bethell, 34 Ch. D. at p. 567 (1887). See also to the same effect the remarks of Lord Blackburn in McLean v. Clydesdale Banking Co., 9 App. Cas., at p. 106 (1883); and of Lord Herschell in Bank of England v. Vagliano, [1891] A. C. at p. 144.

As the law in the various provinces of Canada before 1890 varied considerably, as shewn in the foregoing pages, and as the Act of that year in a number of instances changed the law to make it harmonize, with that of England, it cannot be so generally accepted as declaratory of the old law in Canada. Nevertheless, there has been a disposition on the part of the Courts to consider it as declaratory, where it is not clear that the law was actually changed.

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It is intended to declare the law upon the subject of bills of exchange, cheques and notes; and where it is laid down clearly and without ambiguity, it is to be followed without any enquiry as to the previous state of the law. In cases of doubt, ambiguity or obscurity, the old cases may often be usefully examined and considered.

INTERPRETATION.

Definitions

2. In this Act, unless the context otherwise requires,

Accept (a) acceptance' means an acceptance completed by delivery or notification

ance.

This, and the following clauses of this section, with the exceptions noted below, are taken from section 2 of the Act of 1890, which copied them from section 2 of the Imperial Act. The words defined occur a number of times, and are used in a technical, and not in their ordinary or popular sense, hence the necessity for definitions or an interpretation clause.

"Acceptance" in connection with a bill was formerly used to indicate the act by which the drawee made himself responsible for the payment of a bill-whether by writing on the bill itself, or by collateral writing, or by parol: Lumley v. Palmer, 2 Str. 1000 (1735); Clarke v. Cock, 4 East, 57 (1803); Lagueux v. Everett, 1 Rev. de Leg. 510 (1817); Jones v. Goudie, 2 Rev. de Leg. 334 (1820). Since the two latter methods have been done away with by legislation, the word has been generally used to designate simply the writing on the bill. In the Act, however, when used without qualification, it is applied only to the cases where the writing and the liability thereunder have become complete and irrevocable by being followed either by delivery of the bill or by notification that it has been accepted; Cox v. Troy, 5 B. & Ald. 474 (1822). "Acceptance" in commercial language is also sometimes used to designate a bill that has been accepted, but it is not used in this sense in the Act. "Delivery" here is also used in the technical sense defined in clause (f) of the

present section.

"Notification" is not defined in the Act, but is described in section 39, and may be either written or verba?.

The definition and requisites of a valid acceptance are given in section 35.

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(b) 'action' includes counter-claim and set off; 'Action.

The word "action" is found in sections 11, 49, 58, 93, 157 and 183. The procedure in the provincial Courts, in which actions on bills and notes are brought, is within the exclusive jurisdiction of the local Legislatures: B. N. A. Act, s. 92, s.-s. 14. The Dominion Parliament has however the right to interfere with this procedure in so far as may be necessary to deal fully with the subject of bills and notes. See Cushing v. Dupuy, 5 App. Cas. at p. 415 (1880), and Tennant v. Union Bank, [1894] A. C. 31. Most of the provinces have special provisions in their statutes and rules regulating the procedure of their Courts, as to actions on bills and notes. These have not been repealed by the present Act, and extracts from them will be found in the appendix.

Pitt Lewis in his work on County Court Practice, quoted Set-off. with approval by Cockburn, C.J., in Stooke v. Taylor, 5 Q. B. D. 577 (1880), says: Set-off would seem to be of a different nature from a defence (? counter-claim), inasmuch as a set-off appears to shew a debt balancing the debt claimed by the plaintiff, and thus leaving nothing due to him; while a counter-claim, it would seem, consists of a cross claim, not necessarily extinguishing or destroying the plaintiff's demand. In other words, a set-off appears to consist of a defence to the original claim of the plaintiff, a counter-claim. is the assertion of a separate and independent demand, which does not answer or destroy the original claim of the plaintiff. The right to rely on a set-off has long existed. The right to set up a counter-claim was first given by the Judicature See also Gathercole v. Smith, 7 Q. B. D. 626 (1881); Pellas v. Neptune Marine Ass. Co., 5 C. P. D. 34 (1879).

claim.

Under the Imperial and Ontario Judicature Acts there Counterhave been conflicting decisions as to whether a counter-claim was to be considered as a defence or as an action: see Vavas

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Incidental demand.

seur v. Krupp, 15 Ch. D. 474 (1880); Beddall v. Maitland, 17 Ch. D. 174 (1881); Irwin v. Brown, 12 Ont. P. R. 639 (1888).

In Ontario provision is made in Consolidated Rules 251 and 252 under the Judicature Act, which read as follows: "251. A defendant may set up by way of counter-claim against the claim of the plaintiff, any right or claim whether the same sounds in damages or not. 252. A counter-claim shall have the same effect as a statement of claim in a cross action, so as to enable the Court to pronounce a final judgment in the same action, both on the original and the counter-claim."

Set-off corresponds approximately to compensation under the civil law. The Quebec Civil Code, Art. 1188, says: Compensation takes place by the sole operation of law between debts which are equally liquidated and demandable and have each for object a sum of money or a certain quantity of indeterminate things of the same kind and quality. So soon as the debts exist simultaneously they are naturally extinguished in so far as their respective amounts correspond."

Counter-claim is analogous to a cross demand by a defendant in Quebec. The Code of Civil Procedure, Art. 217, says: "The defendant may set up by cross demand any claim arising out of the same causes as the principal demand, and which he cannot plead by defence. When the principal demand is for the payment of a sum of money, the defendant may also make a cross demand for any claim for money arising out of other causes; but such cross demand is distinct from and cannot retard the principal action. The court, whenever it renders judgment upon both demands at the same time, may declare that there is compensation."

Clause (k) of the present section provides that “defence" when used in the Act also includes counter-claim.

Bank.' (c) bank' means an incorporated bank or savings bank carrying on business in Canada;

The corresponding word in the Imperial Act is "Banker," which includes a body of persons whether incor