198 (1868); Beak v. Beak, L. R. 13 Eq. 489 (1872). It is, if pre-§ 165 sented, even though not paid: Bromley v. Brunton, L. R. 6 Eq. 275 (1868). 41. A cheque is not an equitable assignment of so much of the drawer's funds in the hands of his banker, or of a chose in action: Hopkinson v. Forster, L. R. 19 Eq. 74 (1874); Schroeder v. Central Bank, 34 L. T. N. S. 735 (1876). 42. Where a cheque given in payment is honoured on presentment, this operates as payment: Charles v. Blackwell, 2 C. P. D. at p. 161 (1877). 43. Where a customer pays a cheque into his bank in order that the amount may be placed to his credit, and the amount is so placed, the bank immediately becomes a holder for value, even though the account is not overdrawn: Ex parte Richdale, 19 Ch. D. 409 (1882); Royal Bank v. Tottenham, [1894] 2 Q. B. 715. 44. A cheque sent as being "in full of all demands" was retained and cashed and a receipt sent as on account. The drawer of the cheque demanded its return. The creditor sued for the balance of his claim. It was held that the keeping of the cheque was not conclusive that there was accord and satisfaction, but that it was a question of fact on what terms the cheque was sent, and plaintiff recovered judgment for the balance: Day v. McLea, 22 Q. B. D. 610 (1889). See also to the same effect, Nathan v. Ogdens, 22 T. L. R. 57 (1905); McPherson v. Copeland, 9 W. L. R. (Sask.) 623 (1908). 45. A tenant proposed to assign his lease, and the landlord handed a license to sub-let to an auctioneer and house agent, with instructions to deliver it only on receipt of the rent. The agent accepted the tenant's cheque for the amount and gave up the license. The cheque was dishonoured. The agent was held liable for the amount: Pape v. Westcott, [1894] 1 Q. B. 272. 46. A cheque is drawn in favour of a person who does not really exist, although the drawer supposes that he does. This does not prevent the cheque being really payable to bearer, under section 7 (3) of the Bills of Exchange Act, as being payable to a fictitious or nonexisting person: Clutton v. Attenborough, [1895] 2 Q. B. 707; affirmed, [1897] A. C. 90. 47. A solicitor who is authorized to accept a tender of mortgage money on behalf of his client is not at liberty to accept a banker's cheque, and the tender of a cheque is insufficient: Blumberg v. Life Interests & R. S. Corporation, [1898] 1 Ch. 27. 48. Where a cheque was given in payment of bets on horse races, and indorsed for value to the plaintiff, who was aware of the consideration, it was held that he could not recover, as the consideration was illegal under 5 & 6 William IV. ch. 41: Woolf v. Hamilton, [1898] 2 Q. B. 337. 49. The only affect of a drawee bank initialling a cheque for the drawer is to certify that it has funds of the drawer to meet it, and to add the credit of the bank to that of the drawer. Where a certified cheque is deposited and credited to the depositor, the presumption is § 165 that the bank accepted it as agent of the depositor to cash it, and not as acquiring title and guaranteeing its payment: Gaden v. Newfoundland Savings Bank, [1899] A. C. 281. Illu-trations. Presentment for payment. Measure of damage. 50. Defendant who was not a party to a cheque, at the request of the payee, wrote his name on the back of it, adding the words sans recours. It was held that under section 16 of the Bills of Exchange Act, he could thus negative his liability as an indorser: Wakefield v. Alexander, 17 T. L. R. 217 (1901). 51. A banker's draft nayable to order on demand, addressed by one branch of a bank to another branch of the same bank and not crossed, is not a cheque, not being addressed by one person to another. Brown v. National Bank, 18 T. L. R. 669 (1902); Capital and Counties Bank v. Gordon; London City Bank v. Gordon, [1903] A. C. 240. (The holder may treat it as a bill or note at his option: sec. 26). 52. A marked cheque is "cash" within the meaning of the land regulations of 1853: Russell v. Sealy, 2 N. Z. R. (A. C.) 498 (1874). 53. If the drawer of a cheque gets it accepted and then delivers it to the payee, the drawer is not discharged; and if the payee before delivery requests the drawer to send it to the bank and gets it accepted, the rule is the same: Randolph Bank v. Hornblower, 160 Mass. 401 (1894). 54. Where the holder procures certification of a cheque sent him which contained a statement that it was to be in full settlement, this is an acceptance of the cheque in full payment of the debt, although after certification the holder wrote declining to accept it in full payment: St. Regis Paper Co. v. Tonawanda Co., 107 App. Div. (N.Y.) 90 (1905); Dunn v. Whalen, 107 App. Div. 729 (1907). 166. Subject to the provisions of this Act,- The provisions of the Act to which this section is sub- $ 166 ject, are those in section 91 relating to excuses for nonpresentment and delay in presentment. As regards the drawer, the effect of not presenting a Not presenting. cheque for payment within a reasonable time differs from that relating to other bills payable on demand. In the case of the latter the drawer as well as the endorsers are wholly discharged by the failure to present it for payment within a reasonable time: sec. 85. This part of the Act relating to cheques does not modify the rule as, regards the endorsers; but the present section lays down a different rule as regards the drawer, who is only discharged to the extent to which he actually suffers damage by the delay, and otherwise is not discharged until relieved by prescription or the Statute of Limitations: Laws v. Rand, 3 C. B. N. S. 442 (1857). in Eng. land. Chalmers says, p. 250: "This section is new law. It New law was introduced in the Lords by Lord Bramwell to mitigate the rigour of the common law rule. At common law a mere omission to present a cheque for payment did not discharge. the drawer, until, at any rate, six years had elapsed, and in this respect the common law appears to be unaltered. But if a cheque was not presented within a reasonable time, as defined by the cases, and the drawer suffered actual damage by the delay, e.g., by the failure of the bank, the drawer was absolutely discharged, even though ultimately the bank might pay (say) fifteen shillings in the pound." The section was substantially the law of Quebec before the Act, the Code placing the indorsers in the same position:-" If the cheque be not presented for payment within a reasonable time, and the bank fail between the delivery of the cheque and such presentment, the drawer or indorser will be discharged to the extent of the loss he suffers thereby:" Art. 2352. also Re Oulton, 15 N. B. (2 Pugs.) 333 (1874). When the drawer or other person is thus discharged, the holder is a creditor of the bank to the extent of such discharge clause (b). The law as to the presentation of a cheque differs from that respecting a bill of exchange payable on demand. In suing on a cheque it is not necessary to allege or prove pre § 166 sentment within a reasonable time, or to protest for nonpayment. These are matters of defence. It is for the drawer to allege and prove damage: De Serres v. Euard, Q. R. 17 S. C. 199 (1899). Holder becomes creditor. Reasonable time. (b) The holder of such cheque, as to which such drawer or person is discharged, shall be a creditor, in lieu of such drawer or person, of such bank to the extent of such discharge, and entitled to recover the amount from it. 53 V., c. 33, s. 73 (c). Imp. Act, sec. 74 (2), (3). This is, to a certain extent, a modification of the rule in section 127, that a bill is not an assignment of funds in the hands of the drawee. In England it introduced partially the Scotch principle of sub-section 2 of section 53, and in Canada it recognizes in this particular case the principle laid down in Quebec in Marler v. Molsons Bank, 23 L. C. J. 293 (1879). These countries adopted it from the civil law. 2. In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade and of banks, and the facts of the particular case. 53 V., c. 33, s. 73 (b). Imp. Act, sec. 74 (2). The following are said to embody the rules as to what is a reasonable time for the presentment of cheques in England: 1. If the person who receives a cheque and the bank on whom it is drawn are in the same place, the cheques must, in the absence of special circumstances, be presented for payment on the day after it is received: Alexander v. Burchfield, 7 M. & Gr. 1061 (1842): Firth v. Brooks, 4 L. T. N. S. 467 (1861). 2. If the person who receives a cheque and the bank on whom it is drawn are in different places, the cheque must, in the absence of special circumstances, be forwarded for presentment on the day after it is received, and the agent to whom it is forwarded must, in like manner, present it or forward it on the day after he receives it: Hare v. Henty, 10 C. B. N. S. 65 (1861); Prideaux v. Criddle, L. R. 4 Q. B. 455 (1869); Heywood v. Pickering, L. R. 9 Q. B. 428 (1874). 3. In computing time, non-business days must be excluded. and when a cheque is crossed, any delay caused by presenting the cheque pursuant to the crossing is excused: sec. 91. These rules are substantially those that have been recognized in Canada. See Redpath v. Kolfage, 16 U. C. Q. B. 433 (1858); Owens v. Quebec Bank, 30 ibid. 382 (1870); Boyd v. Nasmith, 17 O. R. 40 (1888); Blackley v. McCabe, 16 Ont. A. R. 295 (1889); Sawyer v. Thomas, 18 Ont. A. R. 129 (1890); Marler v. Stewart, Cons. Que. Dig. 212 (1878); Campbell v. Riendeau, Q. R. 2 Q. B. 604 (1892). A cheque is deemed to be stale or overdue when it appears on its face to have been in circulation an unreasonable time: sec. 70. A bank is not justified in paying such a cheque without inquiry: Serle v. Norton, 2 M. & Rob. 401 (1841). Whether a cheque is presented within a reasonable time is a question for the jury. In this case they found the delay (4 days) to be unreasonable: Wheeler v. Young, 13 T. L. R. 468 (1877). As to what is a reasonable time where a cheque is drawn. on a bank that is understood to be likely to suspend payment, see Légaré v. Arcand, Q. R. 9 S. C. 122 (1895), where one day was held to be unreasonable, and Banque Jacques Cartier v. Corporation de Limoilou, where the same was held as to three days. It has been held that a delay of six days is not necessarily an unreasonable time: Rothschild v. Corney, B. & C. 388 (1829); and the same as to eight days: London and County Bank v. Groome, 8 Q. B. D. 288 (1891); and as to ten days; Bank of B. N. A. v. Warren, 12 O. W. R. 1157 (1908); but that two months is an unreasonable time: Serrell v. Derbyshire Ry. Co., 9 C. B. 811 (1850). Where the holder of a cheque presents it for acceptance instead of for payment, and the accepting bank fails, the drawer and indorsers are discharged: Boyd v. Nasmith, 17 O. R. 40 (1888); Légaré v. Arcand, Q. R. 9 S. C. 122 (1895); Banque Jacques Cartier v. Limoilou, Q. R. 17 S. C. 211 M'L.B E.A.-27 § 166 Reasonable time. |