$ 22

Bill payable to order

when.

When

payable to

order.

22. A bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable. 53 V., c.

33, s. 8 (4). Imp. Act, ibid.

The second clause of this sub-section made an important change in the law. See Ward v. Quebec Bank, Q. R. 3 Q. B. 122 (1894). Before 1890 in Canada a bill or note payable to a particular person by name and not to his order or to bearer was not negotiable: Harvey v. Bank of Hamilton, 16 S. C. Can. 714 (1888). Jones v. Whitty, 9 L. C. R. 191 (1859); Banque du Peuple v. Ethier, 1 R. L. 47 (1869); McCorkill v. Barrabé, M. L. R. 1 S. C. 319 (1885); Mallette v. Sutcliffe, Q. R. 5 S. C. 430 (1894); West v. Bown, 3 U. C. Q. B. 290 (1846).

Such a note was not a negotiable instrument in England before the Act of 1882, which adopted the law of Scotland in this respect for the United Kingdom: Plimley v. Westley, ? Bing. N. C. 251 (1835). Such is still the law in nearly all the United States, including those States which have adopted the Negotiable Instruments Law: Daniel, §105; Randolph, § 174; Neg. Inst. Law, §§ 20, 27.

As to the assignment or transfer of non-negotiable bills, or what is a sufficient indication of an intention that a bill should not be transferable, see the notes to section 21 (1). Under the old law if a bill originally negotiable were indorsed to a particular person and not to his order, it would still be negotiable by him: Moore v. Manning, Comyns, 311 (1719); C. C. Art. 2288.

2. Where a bill, either originally or by endorseperson or ment, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order, at his option. 53 V., c. 33, s. 8 (5). Imp. Act, s. 8 (5).

A bill payable to a person "or his order or "to the order" of a person means the same thing, and in either case

he can demand payment without indorsing it: Myers v. Wilkins, 6 U. C. Q. B. 421 (1849). If required he must, however, give a receipt for the money. A note payable "to A. or order on account of B." is payable to A. or to his order and not to B.: Newton v. Allen and Moir v. Allen, 2 Rev. de Lég. 29 (1817); Clark v. Esson, 2 Rev. de Lég. 30 (1820).

23. A bill is payable on demand,

$ 22

Payable

on demand

(a) which is expressed to be payable on demand, when. or on presentation; or,

(b) in which no time for payment is expressed. 53 V., c. 33, s. 10 (1). Imp. Act, ibid.

Clause (a) differs from the Imperial Act which has the words" or at sight" after "demand." If this section stood alone it might be inferred that bills payable "at sight" were meant to be included as being payable "on presentation," and therefore not entitled to three days of grace under section 42. But sections 44, 45 and 75 show that bills payable at sight were not meant to be included among those payable on demand.

By section 17 every bill is payable either on demand or at a determinable future time. The Imperial Act enumerates in section 10 the five classes of bills which are payable on demand within the meaning of that Act, viz.:

(1) Those expressed to be payable on demand;

(2) Or at sight;

(3) Or on presentation;

(4) Those with no date expressed; and

(5) Those accepted or indorsed after maturity.

In section 11 it enumerates the four classes of those At a

payable at a determinable future time, viz.:

(1) Those payable at a fixed period after date;

(2) Or after sight;

(3) On the occurrence of a specified event certain to hap

pen; and

(4) At a fixed period after the happening of such event.

future time.

$ 23

Days of grace.

Those in section 11 are entitled to days of grace, those in section 10 are not. For a long time it was a doubtful point in England whether bills payable at sight or on presentation were entitled to days of grace. It was finally settled by the Courts that they were. But by 34 & 35 Vict. c. 74, after stating the doubts that had arisen on the subject, it was enacted that bills and notes payable at sight or on presentation should be payable on demand and have no days of grace. This provision was reproduced in the Imperial Bills of Exchange Act.

In Canada, before the Act of 1890, bills payable at sight were entitled to days of grace. The bill as introduced into Parliament proposed to assimilate our law to that of England in this respect. The House of Commons, however, decided not to make the change, and the words "or at sight" were struck out of the clause (a): Commons Debates, 1890, p. 108. Apparently, however, by an oversight they were not then inserted in section 11; so that the enumeration in these two sections, which was meant to be exhaustive and to include all bills that meet the conditions of section 3 (now s. 17) did not, in the Act as passed in 1890, include bills payable at sight under either head. This was remedied by the Act of 1891, which included them among those payable at a determinable future time, and so entitled to grace.

The term

66

on presentation" has not been in common use in Canada. On demand" has been the ordinary expression used when the bill was to be paid on presentation, and "at sight" when it was to be paid three days later. These particular words, however, need not be used; any other words that convey the same idea would serve equally well. "Presentation" is used in section 11, as synonymous with presentment."

In the United States as a rule days of grace were formerly allowed on bills payable at sight: 1 Daniel, § 617. In those States which have adopted the Negotiable Instruments Law there are no days of grace on any bill or note: § 145. In France a bill payable at sight is payable on presentation: Code de Com. Art. 130.

2. Where a bill is accepted or endorsed when it § 23 is overdue, it shall, as regards the acceptor who so Endorsed accepts, or any endorser who so endorses it, be when overdeemed a bill payable on demand. 53 V., c.

33, s. 10 (2). Imp. Act, ibid.

A time bill or note is overdue after the expiration of the last day of grace: Leftley v. Mills, 4 T. R. 170 (1797); a demand bill when it appears on its face to have been in circulation for an unreasonable length of time: sec. 70 (2); a less stringent rule is applied to a demand note: sec. 182.

"Before this enactment the English law on the subject dealt with was very obscure; but it had been held in the United States that where a bill was indorsed after maturity, the indorser was entitled to have it presented for payment, and to receive notice of dishonor in the event of non-payment, within a reasonable time": Chalmers, p. 30. In Upper Canada the same principle had been laid down in Davis v. Dunn, 6 U. C. Q. B. 327 (1849). As to the United States, see Patterson v. Todd, 18 Penn. St. 426 (1852); Goodwin v. Davenport, 47 Me. 112 (1860); Light v. Kingsbury, 50 Mo. 331 (1872); Eisenlord v. Dillenbeck, 15 Hun (N.Y.) 23 (1878); Bull v. First Nat. Bank, 14 Fed. Rep. 613 (1883); Bassenhorst v. Wilby, 45 Ohio St. 336 (1887); GermanAmerican Nat. Bank v. Atwater, 165 N. Y. 36 (1900); also Daniel, § 611, and Randolph, §§ 596 and 671 and cases there cited.

due.

able future

24. A bill is payable at a determinable future Determintime, within the meaning of this Act, which is ex- time. pressed to be payable,

(a) at sight or at a fixed period after date or sight; Sight. (b) on or at a fixed period after the occurrence of Specified a specified event which is certain to happen, event. though the time of happening is uncertain. V., c. 33, s. 11; 54-55 V., c. 17, s. 1. Imp. Act, s. 11 (1) and (2).

53

(a) This clause in the Act of 1890 was copied from the Imperial Act without change and read, "At a fixed period

M'L.B.E. A.-6

able future time.

§ 24 after date or sight." As mentioned in the notes under section 23, sight bills in England are payable on demand. The CanDetermin- adian Parliament refused to abolish the days of grace on these bills, and they were struck out of section 10 (now s. 23), but were not then inserted in this section, so that they did not appear in either list. The first section of the amending Act of 1891 placed them in the first clause of the present section.

As to when bills payable at a determinable future time fall due, see section 42. In the case of acceptance for honour, see section 150.

It is not necessary to use either the word "date" or "sight" to bring a bill within the provisions of clause (a) of this section.

The following are examples of bills and notes that have been held to be valid as coming within the rule laid down in this sub-section :

1. An instrument payable 17 months after date without interest or 41 months after date with interest, as falling due at the later date: Hogg v. Marsh, 5 U. C. Q. B. 319 (1849). 2. A promise to pay on a specified date, with a proviso that if the maker should sooner sell certain lands, the note should be payable on demand: Elliott v. Beech, 3 Man. 213 (1886). A note payable on a day named with the addition that if the payees considered the note insecure they have power to declare it due and payable at any time: Massey Mfg. Co. v. Perrin, 8 Man. 457 (1892). A promise to pay 12 months after notice: Clayton v. Gosling, 5 B. & C. 360 (1826); or on six months' notice: Walker v. Roberts, Car. & M. 590 (1842); or two months after demand in writing: Price v. Taylor, 5 H. & N. 540 (1860); or upon notification of 30 days in any newspaper: Protection Ins. Co. v. Bill, 31 Conn. 534 (1863).

"Certain to Happen."-Most of the instances of valid notes under this head are those payable at or after the death of some person.

The following are illustrations:

1." Six weeks after the death of my father": Cooke v. Colehan, 3 Str. 1217 (1745); "one year after my death"; Roffey v.