Bills, Notes and Cheques

a mortgage this covers the coupon and interest on it if not paid on presentation at maturity. Neither the mortgage security nor the informal nature of the coupons prevents their being negotiable instruments: 2 Daniel, supra; Venables v. Baring, [1892] 3 Ch. 527.

Company Shares or Stock.-Where certificates are issued to represent such shares or stock they have not been generally recognized in England as being negotiable. See Swan v. N. B. Australasian Co., 2 H. & C. 175 (1863); France v. Clark, 26 Ch. D. 257 (1884); London County Bank v. River Plate Bank, 20 Q. B. D. 232 (1887); Sheffield v. London Joint Stock Bank, 13 App. Cas. 333 (1888); Williams v. Cady, 15 App. Cas. 267 (1890).

The same rule has obtained in Ontario. Even when a certificate contains the clause "Transferable only on the surrender of this certificate," a transferee of the certificate has no title against a subsequent transferee without surrender of the certificate, who in good faith has his transfer first recorded in the books of the company: Smith v. Walkerville Co., 23 Ont. A. R. 95 (1896).

Where, however, the owner signs a blank assignment on the certificate a bona fide holder for value may be able to acquire rights against such owner: Smith v. Rogers, 30 0. R. 256 (1899).

In the United States they are not considered to be negotiable; but are said to be "quasi-negotiable" or assignable, being generally subject to certain restrictions in the charter or by-laws of the company. See 2 Daniel, §§ 1708, 1709.

In Rumball v. Metropolitan Bank, supra, however, scrip certificates for shares in favor of bearer were held on the authority of Goodwin v. Robarts, 1 App. Cas. 476 (1876), to be negotiable instruments transferable by mere delivery. In Webb v. Alexandria Water Co., 21 T. L. R. 572 (1905), it was held on the authority of the last named case, that share warrants in favor of bearer under sections 27, 28, and 29 of the Companies Act, 1867, were negotiable.

Bank Deposit Receipts. The instruments of this character which were in question in the earlier Canadian cases had not the words "bearer" or "order," and it was held that the holder could not recover in his own name. See Mander v. Royal Canadian Bank, 20 U. C. C. P. 125 (1869); Bank of Montreal v. Little, 17 Grant, 313 (1870); Lee v. Bank of B. N. A., 30 U. C. C. P. 255 (1879). These cases were followed by Maclennan, J.A., in Armour v. Imperial Bank, 15 C. L. T. (Ont.) 391 (1895). In Voyer v. Richer, 13 L. C. J. 213 (1869), the Quebec Courts held that even where the receipt was payable to order is was not negotiable. In the Privy Council, L. R. 5 P. C. 461 (1874), it was said there was "high authority in favor of considering it to be negotiable," but the case was decided on another ground. In Re Central Bank, 17 O. R. 574 (1889), it was held that the bank which had issued such a receipt payable to order was estopped from denying its negotiable character.

The omission of the words order or bearer and making a receipt to the depositor without words prohibiting transfer would not alone be sufficient to prevent its being negotiable: sec. 22. Printing "Not negotiable" distinctly on the face of the instrument is sufficient: Re Commercial Bank, 11 Man. 494 (1897). If a bank gives a receipt with a promise to pay, that meets the requirements of the definition of a promissory note in section 176, it would be held liable as on a negotiable note or on the ground of estoppel, as a bank may make a negotiable note: R. S. C. c. 1, s. 30; Bills of Exchange Act, sec. 47. Indeed every bill, draft, or dividend warrant which it issues upon itself or one of its branches may be treated as a promissory note: sec. 26.

When such receipts are not negotiable they do not pass by delivery or endorsement; but may be assigned or transferred in accordance with the provincial law.

Deposit receipts are said not to be negotiable in England: Hart on Banking, p. 537; Paget, 2nd ed., p. 30. It appears, however, from the cases cited in support of this doctrine, that the instruments in question were marked "Not transferable," and one of them was not even for a sum certain: In re Dillon, 44 Ch. D. 70 (1890); In re Griffin,

[1899] 1 Ch. 408. Another difficulty there is that stated by Paget, namely, that to issue a receipt payable to bearer on demand, would probably be an infringement of the Bank Charter Act-something that does not exist under our Act.

Such instruments have been treated as negotiable in the United States, except in Pennsylvania, where, since its adoption of the Negotiable Instruments Law, the general rule would be followed.

Letters of Credit.-A letter of credit is an open letter of request whereby one person (usually a merchant or banker) requests some other person or persons to advance moneys or give credit to a third person named therein, for a certain amount, and promises that he will repay the same to the person advancing the same, or accept bills drawn upon himself, for the like amount.

They are not negotiable instruments: Orr v. Union Bank, 1 Macq. H. L., at p. 523 (1854); British Linen Co. v. Caledonia Ins. Co., 4 Macq. 107 (1861); Union Bank of Canada v. Cole, 47 L. J. C. P. 100 (1877). The Provincial Secretary of Quebec wrote a letter to a government contractor that money would be voted at the ensuing session on his contract, which would be paid to any person to whom he might indorse the letter. He indorsed the letter to a bank for advances on his contract, and the money was voted by the Legislature. It was held by the Supreme Court of Canada that this "letter of credit" was not a negotiable instrument under the Bills of Exchange Act or the Bank Act, and that the bank could not recover upon it from the Government: Jacques Cartier Bank v. The Queen, 25 S. C. Can. 84 (1895).

A telegram, " May draw to extent of $500 if necessary," is an open letter of credit and is not affected by a private arrangement that the draft of the party addressed was to be accompanied by bills of lading and a policy of insurance when this was not expressed on the face of the letter of credit: Merchants' Bank v. Winter, Nfld. Rep. 1898, p. 30.

A circular note is a letter of credit on which the person in whose favor it is granted carries with him a letter

M'L. B-E.A.-30

containing the signature to be shown to the correspondents of the bank to whom the note may be presented. This is called a letter of indication. Where the circular notes were lost, indemnity was ordered, as it was not enough to tender the letter of indication alone: Conflans Stone Quarry Co. v. Parker, L. R. 3 C. P. 1.

A Post Office Money Order is not a negotiable instrument: Fine Art Society v. Union Bank, 17 Q. B. D. at p. 713 (1886).

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19 the above bill was, by me, presented for acceptance

to E. F., the drawee, personally (or, at his residence, office or usual place of business), in the city (town or village) of and I received for answer. 66

The said bill is therefore noted for non-acceptance.