§ 154

Declara

tion.

Subroga

2. The notarial act of honour must be founded on a declaration made by the payer for honour, or his agent in that behalf, declaring his intention to pay the bill for honour, and for whose honour he pays. 53 V., c. 33, s. 67 (3) (4). Imp. Act, s. 68 (3) (4).

This notarial act of honour is necessary, in order to give the person who pays the rights and privileges accorded by section 155. For the form for such an act, see Appendix.

Discharge. 155. Where a bill has been paid for honour, all parties subsequent to the party for whose honour it is paid are discharged, but the payer for honour tion. is subrogated for, and succeeds to both the rights and duties of the holder as regards the party for whose honour he pays, and all parties liable to that party. 53 V., c. 33, s. 67 (5). Imp. Act, s. 68 (5).

Holder to have du

If the holder is a holder in due course, or if any party to the bill subsequent to the party for whose honour the bill has been paid was a holder in due course, the payer for honor acquires their rights in this respect. Among the duties to which he succeeds is that of giving notice of dishonour: Goodall v. Polhill, 14 L. J. C. P. 146 (1845).

LOST INSTRUMENTS.

Only two sections, 156 and 157, are devoted to this subject. The former gives the holder the right to demand a duplicate of a bill lost before maturity; the latter gives the party liable the right to indemnity when he is called upon to pay a lost bill.

The Act does not treat of the rules of evidence, by which secondary evidence is allowed in the case of a bill or note lost or destroyed, as administered in the several provinces.

156. Where a bill has been lost before it is overplicate of due, the person who was the holder of it may apply lost bill. to the drawer to give him another bill of the same

tenor, giving security to the drawer, if required, § 156 to indemnify him against all persons whatever, in case the bill alleged to have been lost shall be found again.

2. If the drawer, on request as aforesaid, refuses Refusal. to give such duplicate bill, he may be compelled Compul to do so. 53 V., c. 33, s. 68. Imp. Act, s. 69.

Before the passage of the Imperial Act this provision. applied to inland bills and notes, under 9 Wm. III. c. 17, and 3-4 Anne, c. 8. Courts of Equity had extended it to indorsers as well as to the drawer. Chalmers (p. 236) speaks of the remedy as being still very inadequate, as it gives no power to obtain an indorsement or acceptance over again, and contrasts it with the remedy given by the Continental Codes, which have elaborate provisions on the subject. See Walmsley v. Child, 1 Vesey, sen. 341 (1749), and Rhodes v. Morse, 14 Jur. 800 (1850).

sion.

The loss or destruction of a bill does not relieve from Presentment if the duty of demanding payment. This should be accom- bill is lost. panied by an offer of indemnity, and if payment is refused, protest may be made on a copy or written particulars: sec. 120. "Neglect to offer indemnity to the maker or acceptor on demand of payment does not deprive the payee of his right of action, but it will prevent him from recovering costs, and will compel him to bear any special damages resulting from the neglect on his subsequent suit": 2 Daniel, § 1465; Thackray v. Blackett, 3 Camp. 164 (1812).

lost bill.

157. In any action or proceeding upon a bill, the Action on court or a judge may order that the loss of the in- Indemstrument shall not be set up, provided an in-nity. demnity is given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question. 53 V., c. 33, s. 69. Imp. Act, s. 70.

At common law, if a negotiable bill were lost, no action could be maintained, either on the instrument or on the consideration for it, even if it was overdue when lost: Pier

§ 157 son v. Hutchinson, 2 Camp. 211 (1809); Hansard v. Robinson, 7 B. & C. 90 (1827); Ramuz v. Crowe, 1 Ex. 167 (1847); Crowe v. Clay, 9 Ex. 604 (1854).

Action on lost bill.

Before the Act of 1890 most of the provinces had provisions similar to the present section.

When the surrender of a bill or note has been obtained by fraud, by a forged renewal or otherwise, an action may be brought upon the bill or note so surrendered: Irwin v. Freeman, 13 Gr. 465 (1867); McIntyre v. McGregor, 21 C. L. T. 25 (1900); Matthews v. Marsh, 5 O. L. R. 540 (1903); Scholefield v. Templer, 4 DeG. & J. 433 (1859).

When the defendant did not demand security a decree was made for plaintiff without requiring it: Abell v. Morrison, 23 Grant, 109 (1876).

The loss or destruction of the note must be proved and indemnity offered: Wante v. Robinson, 2 Rev. de Lég. 29 (1816); Beaupré v. Burn, 2 Rev. de Lég. 31 (1821). See Carden v. Ruiter, 9 L. C. J. 217 (1865); Wright v. Maidstone, 1 K. & J. 701 (1855).

No indemnity is required if the bill is not negotiable: Cooley v. Dominion Building Society, 24 L. C. J. 111 (1878); Contra Pillow v. L'Espérance, Q. R. 22 S. C. 213 (1902). See Wain v. Bailey, 10. A. & E. 616 (1839).

ILLUSTRATIONS.

1. Where a note had been indorsed to an attorney's clerk and mislaid Held, that secondary evidence of it could not be given without calling the clerk, although the attorney was called and swore to his belief of its loss: Grover v. Clark, 5 U. C. O. S. 208 (1835).

2. When the plaintiffs declared against the drawer of a lost bill payable to plaintiffs' order on a promise to pay it, but did not state any new consideration for the promise, or allege that the bill was unindorsed at the time of the loss, the declaration was held bad on general demurrer : Russell v. McDonald, 1 U. C. Q. B. 296 (1844).

3. Payee against maker. Plea, loss of the note by plaintiff before suit, and that he hath been and is unable to produce it. Replication denying the loss only, held good: Campbell v. McCrea, 11 U. C. Q. B. 93 (1853).

4. A person suing on a lost note should, before action, tender an indemnity to the maker. If he neglect this, it will be at the risk of

costs to defendant. Banque Jacques Cartier v. Strachan, 5 Ont. P. R. 159 (1869); Tessier v. Caillé, Q. R. 25 S. C. 207 (1902); Palmer v. Reilly, 2 E. L. R. (P.E.I.) 308 (1906); King v. Zimmerman, L. R. 6 C. P. 466 (1871).

5. Where the maker of notes is entitled to get them back, and the holder says they are lost and offers security, the former is not obliged to accept security, but is entitled to a payment into Court of the amount: Hudon v. Gervais, Q. R. 7 S. C. 221 (1895).

6. When a lost bill is sued on, plaintiff should tender a bond with a sufficient surety or sureties. The Master may settle the bond: Orton v. Brett, 12 Man. 448 (1899).

BILL IN A SET.

The provisions of the Act relating to bills in a set are found in sections 158 and 159. Bills in this form are usual for remittances abroad. To prevent delay in case the first should miscarry a second is frequently sent by a succeeding mail. In Canada a set is generally made up of three parts. Each part contains a condition that the others (naming them) are unpaid. See form in Appendix.

$ 157

set.

158. Where a bill is drawn in a set, each part Bills in of the set being numbered, and containing a reference to the other parts, the whole of the parts constitute one bill.

ance.

2. The acceptance may be written on any part, Acceptand it must be written on one part only. 53 V., c. 33, s. 70 (1) (4). Imp. Act, s. 71 (1) (4).

An agreement to deliver up certain sets of foreign bills. which were drawn in three parts is not complied with by delivering up one of each set if he has others: Kearney v. West Granada Co., 1 H. & N. 412 (1856). A person who negotiates one part of a set does not warrant that he has the others: Pinard v. Klockman, 3 B. & S. 388 (1863). If one part of a set does not contain a reference to the other parts a bona fide holder for value may recover on it as a separate bill: Davidson v. Robertson, 3 Dow, 218 (1815); Société Generale v. Metropolitan Bank, 27 L. T. N. S. 849 (1873).

159. Where the holder of a set endorses two or Endorsing more parts to different persons, he is liable on more than every such part, and every endorser subsequent to

one part.

§ 159 him is liable on the part he has himself endorsed as if the said parts were separate bills.

Negotiation to different holders.

Accept

ance in

due course.

More than

accepted.

2. Where two or more parts of a set are nego. tiated to different holders in due course, the holder whose title first accrues is, as between such holders, deemed the true owner of the bill: Provided that nothing in this subsection shall affect the rights of a person who in due course accepts or pays the part first presented to him.

3. If the drawee accepts more than one part, one part and such accepted parts get into the hands of different holders in due course, he is liable on every such part as if it were a separate bill.

Part accepted.

4. When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acPayments ceptance to be delivered up to him, and that part delivery. at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof.

without

Discharge.

5. Subject to the provisions of this section, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged. 53 V., c. 33, s. 70. Imp. Act, s. 71.

The first and third sub-sections are declaratory of the old law: Holdsworth v. Hunter, 10 B. & C. 449 (1830).

So also is the second sub-section: Perreira v. Jopp, 10 B. & C. 450n. Lang v. Smyth, 7 Bing. 284 (1831).

Such a bill may be discharged in the same way as an ordinary bill which consists of a single part, that is by payment, release, cancellation, material alteration, etc.

The discharge results from the rule in section 158, that the whole of the parts constitute one bill. See Wells v. Whitehead, 15 Wend. (N.Y.) 527 (1836); Durkin v. Cranston, 7 Johns. (N.Y.) 442 (1811); Ingraham v. Gibbs, 2 Dallas 134 (1791).

When the first of a set was accepted and in the hands of a third party to cover advances to be made, but which he declined to make, the holder of the second who had made