guishment between the parties to the judgment. Hayling v. Mullhall, 2 W. Bl. 1235; as explained in English v. Darley, 2 B. & P. 62. So, the acceptor was liable at the suit of an indorsee, although judgment had been obtained against the acceptor on the bill at the suit of a subsequent indorsee, and he had been taken in execution on that judgment. Woodward v. Pell, L. R., 4 Q. B. 55. But, a composition with the acceptor, and the taking of a third person's note as a security for it, operates as a satisfaction of the bill. English v. Darley, supra; Lewis v. Jones, 4 B. & C. 506. Where the plaintiff paid money to A. for a bill accepted by a third party and indorsed in blank; the plaintiff intending to buy the bill and be the holder thereof, and A. believing he was paying the amount for the acceptor; the court held, that if the plaintiff did not make the payment in order to discharge the acceptor, nor by his expressions and conduct led A. so to suppose, he might recover on the bill. Lyon v. Maxwell, 18 L. T., N. S. 28; Ex. H. T. 1868. Where the first bill is "renewed" by a second, no action can be maintained during the currency of the latter. Kendrick v. Lomax, 2 C. & J. 405. But, where the plaintiff held a bill accepted by defendant, who, when it became due, asked for time, and three months afterwards gave plaintiff another bill for the same amount, plaintiff telling him at the same time that something was due for interest, and continuing to hold the first bill; and the second bill was paid after it became due; it was held that the plaintiff was entitled to sue on the first bill to recover the interest. Lumley v. Musgrave, 4 N. C. 9. Where one of three partners, after a dissolution of partnership, undertook, by deed, to pay a partnership debt on two bills of exchange drawn by them, and the owner consented to take the separate notes of the one partner for the amount, reserving his right against all three, and retaining possession of the original bills; it was held that, the separate notes having proved unproductive, he might resort to his remedy against the other partners, and that the taking of the separate notes, and afterwards renewing them several times successively, did not amount to satisfaction of the joint debt. Bedford v. Deakin, 2 B. & A. 210. So, where, on a bill of exchange being dishonoured, the acceptor transmitted a new bill for a larger amount to the payee, but had not any communication with him respecting the first; and the payee discounted the second bill with the holder of the first, which he received back as part of the amount, and afterwards, for a valuable consideration, indorsed it to the plaintiff; it was held that the second bill was merely a collateral security, and that the receipt of it by the payee did not exonerate the drawer of the first. Pring v. Clarkson, 1 B. & C. 14; see also Adams v. Bingley, 1 M. & W. 192.

The principle of sect. 59 (2), ante, p. 367, applies to a part payment, and to cases in which the bill is not strictly an accommodation bill; Cook v. Lister, 13 C. B., N. S. 543; 32 L. J., C. P. 121. But, where an accommodation acceptor pleaded payment by the drawer in an action by an indorsee, proof that the drawer had handed a forged acceptance to the indorsee for the purpose of retiring the outstanding bill, and that the indorsee, being his banker, had credited the drawer for the amount in his banking account, was held insufficient to prove payment, the forged acceptance being, in fact, no payment at all. Bell v. Buckley, 11 Exch. 631; 25 L. J., Ex. 163. Payment by drawer, who is also payee, to the plaintiff himself, his indorsee, is no answer to an action against the acceptor for value, if the bill was left in the plaintiff's hand, to sue on it as trustee for the drawer; Williams v. James, 15 Q. B. 498; 19 L. J., Q. B. 445; nor, if he sue against the will of the drawer; Jones v. Broadhurst, 9 C. B. 173. If the acceptor discount his own acceptance for the drawer, this is not payment so as to bar an action on the bill against the drawer by a bona fide indorsee for value, who has taken under an indorsement by the acceptor. Attenborough v. Mackenzie, 25 L. J.

Defences.-Payment.—Waiver.-Giving Time.

369

Ex. 224. "Retiring" a bill by acceptor is equivalent to payment, and stops the circulation; but retiring by an indorser only takes it out of circulation as regards himself, and he retains the same remedies as if he had paid his indorsee in due course. Elsam v. Denny, 15 C. B. 87; 23 L. J., C. P. 190.

On a defence of payment, neither the plaintiff nor the defendant is bound to produce the security; and where a plea stated, by way of introduction to an allegation of payment, that the note was given in lieu of a former one, and the plaintiff replied de injuria generally, it was held enough to show payment without proving the superfluous introductory statement. Shearm v. Burnard, 10 Ad. & E. 593. But, if on a special defence of satisfaction, it becomes necessary for the defendant to prove the bill or note, he cannot give secondary evidence of it without having given notice to produce it. Goodered v. Armour, 3 Q. B. 956.

By sect. 24, ante, p. 325, a person claiming under a forged indorsement cannot give a discharge for the bill, except under sect. 60, post, p. 371, in the case of a banker.

Voluntary discharge and waiver.] Sect. 61. "When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged."

Sect. 62. "(1.) When the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor, the bill is discharged.

The renunciation must be in writing, unless the bill is delivered up to the acceptor."

"(2.) The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity; but nothing in this section shall affect the rights of a holder in due course without notice of the renunciation."

Sect. 63. "(1.) Where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the bill is discharged." "(2.) In like manner any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged."

"(3.) A cancellation made unintentionally, or under a mistake, or without the authority of the holder is inoperative; but where a bill or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority."

The provision in sect. 62 (1), as to the renunciation being in writing is

new.

The renunciation must be unequivocal :-Thus, a declaration by the holder, that "he should look to the drawer for payment, and that he wanted no more of the acceptor than another debt not connected with the bill," will not be sufficient to discharge the acceptor; Parker v. Leigh, 2 Stark. 228; Adams v. Gregg, Id. 531.

Alteration of the position of the parties, giving time, &c.] Giving time to or releasing a principal discharges a surety, vide post, p. 434; and therefore giving time to the acceptor discharges the drawer and indorsers. English v. Darley, 2 B. & P. 61. So, giving time to any prior party discharges subsequent ones. Hall v. Cole, 4 Ad. & E. 577. This defence must be pleaded specially; so that the pleadings on the record sufficiently apprise the parties of the nature of the requisite proofs. There must be a binding agreement

VOL. I.

B B

founded on a good consideration, on which an action would lie, if broken. Moss v. Hall, 5 Exch. 46. Forbearance to sue the acceptor is not of itself equivalent to giving time. Walwyn v. St. Quintin, 1 B. & P. 652; English v. Darley, ante, p. 369; Price v. Kirkham, 3 H. & C. 437 ; 34 L. J., Ex. 35. An agreement between the plaintiff and a stranger to give time to the acceptor, will not discharge an indorser, unless the acceptor, the principal debtor, was party to the agreement. Lyon v. Holt, 5 M. & W. 250; Fraser v. Jordan, 8 E. & B. 303; 26 L. J., Q. B. 288. Taking a cognovit from the acceptor, after action brought, by which the time of obtaining judgment against him is not deferred, is not a giving of time. Jay v. Warren, 1 C. & P. 532; Lee v. Levy, 4 B. & C. 390.

It is a good equitable defence, that the defendant made the note jointly with A. as surety only for him, of which the plaintiff had notice at the time and that the plaintiff gave time to A. without the defendant's knowledge, Pooley v. Harradine, 7 E. & B. 431; 26 L. J., Q. B. 156; Taylor v. Burgess, 5 H. & N. 1; 29 L. J., Ex. 7; Greenough v. M'Cleland, 30 L. J., Q. B. 15, Ex. Ch.; even though, although the plaintiff knew the defendant was only surety, he did not agree, nor, did the defendant stipulate, that he should be treated by the plaintiff as surety only, or otherwise than as a maker of the note. S. C. So, in equity, giving time to the drawer or indorser of an accommodation acceptance, with notice that it is such, releases the acceptor; Bailey v. Edwards, 4 B. & S. 761; 34 L. J., Q. B. 41; Edwin v. Lancaster, 6 B. & S. 571. It is sufficient if the plaintiff knew the position of the defendant, before time is given, though he did not know it at the time of the contract. Oriental Financial Corporation v. Overend, Gurney, & Co., L. R., 7 Ch. 142; L. R., 7 H. L. 348.

If, however, the agreement for giving time to or releasing the principal is qualified by a reservation of remedies against the surety, the surety is not discharged. Bateson v. Gosling, L. R., 7 C. P. 9; Muir v. Crawford, L. R., 2 H. L. Sc. 456; and cases cited post, p. 435.

The indorser of a bill of exchange who has paid it at maturity is entitled to the benefit of any securities deposited to secure the payment thereof by prior parties thereto. Duncan v. N. & S. Wales Bank, 6 Ap. Ca. 1, D. P. Vide post, p. 435.

ACTION ON CHEQUES.

Statute.] The general provisions of the B. of Ex. Act, 1882, relating to cheques are as follows:

Sect. 73. "A cheque is a bill of exchange drawn on a banker," (vide sect. 2, ante, p. 318), "payable on demand."

"Except as otherwise provided in this Part," (i. e. Part III. comprising sects. 73 to 82), "the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque.”

These provisions of the Act will be found under appropriate headings, ante, pp. 318 to 369.

74. "Subject to the provisions of this Act—

(1.) Where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or the person on whose account it is drawn had the right at the time of such presentment as between him and the banker to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid."

Payee, bearer, or indorsee, against drawer.

371

"(2.) In determining what is a reasonable time regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case." "(3.) 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 banker to the extent of such discharge, and entitled to recover the amount from him.” Sect. 75. "The duty and authority of a banker to pay a cheque drawn on him by his customer are determined by

(1.) Countermand of payment:

(2.) Notice of the customer's death."

Sect. 60. "When a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee, or any subsequent indorsement, was made by, or under, the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority."

This section is somewhat wider in its terms than the stat. 16 & 17 Vict. c. 59, s. 19, which, however, extends " any draft or order drawn upon a banker for a sum of money payable to order on demand." It applies to bankers only. Halifax Union v. Wheelwright, L. R., 10 Ex. 183. An indorsement "per proc." or as agent" is within it. Charles v. Blackwell, 1 C. P. D. 548; 2 C. P. D. 151, C. A. It protects only the banker on whom the cheque is drawn, and the drawer may, in an action for money had and received, recover the amount of the cheque from any person who has obtained payment thereof, through a forged endorsement. Ogden v. Benas, L. R., 9 C. P. 513; Bobbett v. Pinkett, 1 Ex. D. 368. So, might the owner of a cheque; even against a banker, who had received the money for a customer. Arnold v. Cheque Bank, 1 C. P. D. 579. These cases, decided on 16 & 17 Vict. c. 59, s. 19, are applicable to the B. of Ex. Act, 1882, s. 60, supra. Now, however, where the cheque is crossed, sect. 82, post, p. 374, "a banker who has in good faith and without any negligence received payment for a customer." Matthiessen v. L. & County Bank, 5 C. P. D. 7, decided on 39 & 40 Vict. c. 81, s. 12.

There is now no restriction on the amount for which a cheque can be drawn; the stat. 23 & 24 Vict. c. 111, s. 19 is repealed by the B. of Ex. Act, 1882, s. 96.

It is not now illegal to post-date a cheque, whether payable to bearer or order; vide ante, p. 224; but a partner in a non-trading firm cannot bind his firm by drawing a post-dated cheque, in the name of the firm. Forster v. Mackreth, L. R., 2 Ex. 163. It may be mentioned that the drawer thereof is under no obligation for the benefit of a third person to stop its payment before it is due. Ex pte. Richdale, post, p. 372. As to a banker's Liability with respect to post-dated cheques, vide post, p. 373.

As to effect of taking an overdue cheque, see sect. 36 (2, 3), ante, p. 360. See also L. & County Bank v. Groome, 8 Q. B. D. 288.

Payee, bearer, or indorsee, against drawer.] The plaintiff may be put to prove the drawing and the presentment to, and non-payment by, the banker, and also notice to the drawer of the non-payment, unless the facts excuse such notice. The evidence necessary in support of the plaintiff's case will be gathered from what has been said under the head of Bills of exchange, ante, pp. 342, et seq.

A banker who has carried to the credit of his customer's account the amount of a cheque handed to him for that purpose becomes a holder thereof for value, and may sue the drawer thereon, whether the account

is overdrawn; Currie v. Misa, L. R., 10 Ex. 153, Ex. Ch.; affirmed, on another ground, in D. P., 1 Ap. Ca. 554; M'Lean v. Clydesdale Banking Co., W. N. 1883, p. 184, D. P. ; or not; Ex pte. Richdale, 19 Ch. D. 409, C. A.

Sect. 45 (2), ante, p. 344, provides that presentment must be within a reasonable time after issue, having regard to the usage of trade and particular circumstances.

As between holder and drawer mere delay in presenting for payment, short of six years, is no answer, unless the defendant has been prejudiced by it; as by the failure of the bank after the drawing of the cheque. Robinson v. Hauksford, 9 Q. B. 52; Laws v. Rand, 3 C. B., N. S. 442; 27 L. J., C. P. 76. In which case the drawer is released from liability; sect. 74 (1), ante, p. 370. The reasonable time under sects. 74 (1, 2), ante, pp. 370, 371, for presentation in order to avoid this risk, is the day following the day of receipt. Moule v. Brown, 4 N. C. 266; Alexander v. Burchfield, 7 M. & Gr. 1061. But, if the holder of the cheque does not live in the same place with the drawee, he may send it to his banker or other agent by the post of the next day after he received it, and the agent should present it not later than the day after he received it; Rickford v. Ridge, 2 Camp. 537; Hare v. Henty, 10 C. B., N. S. 65; 30 L. J., C. P. 302; Prideaux v. Criddle, L. R., 4 Q. B. 455 and this holds good as between banker and customer; S. CC.; Bailey v. Bodenham, 16 C. B., N. S. 288; 33 L. J., C. P. 252.

Pre

The process of presenting cheques through the banker's clearing house, is described in the special verdict, in Warwick v. Rogers, 5 M. & Gr. 340, 348. Such presentment has been held to be good, vide ante, p. 346. sentment of a cheque to a banker through the post is a proper mode of presentment. Heywood v. Pickering, L. R., 9 Q. B. 428, following Prideaux v. Criddle, L. R., 4 Q. B. 455, 461. If so presented and the banker delay to return the cheque, or to remit the money, any loss thereby occasioned will, as between the holder and the drawer, fall on the latter. Heywood v. Pickering, supra.

By sect. 50 (2) (c), (4), ante, p. 353, notice of dishonour is excused where the banker is as between himself and the drawer under no obligation to pay the cheque, or (5), where the drawer has countermanded payment. See Carer v. Duckworth, L. R., 4 Ex. 313.

A person taking a cheque payable to order, but without indorsement, has no better title than the person from whom he took it, although he took it bona fide and without notice; and he is affected by that person's fraud, of which he had notice before he obtained a formal indorsement. Whistler v. Forster, 14 C. B., N. S. 248; 32 L. J., C. P. 161. See sect. 31, ante, p. 336, and sect. 29, ante, p. 322.

Indorsee against Indorser.] Where the cheque has been indorsed, and the indorser is sued by the holder, the plaintiff is bound to show due diligence in endeavouring to obtain payment, and giving notice of non-payment to the defendant. By sect. 45 (2), ante, p. 344, the cheque must be presented within a reasonable time or the indorser will be discharged. As to reasonable time, see Moule v. Brown, supra; and cases cited, ante, p. 344.

By sect. 56, "where a person signs a bill otherwise than as drawer or acceptor, he thereby incurs the liabilities of an indorser to a holder in due course." As to a holder in due course, see sect. 29, ante, p. 322.

66

Banker's liability on cheques.] Although by sect. 53 (1), ante, p. 323, a bill of itself does not operate as an assignment of funds in the hands of the drawer available for payment thereof, and the drawee of a bill who does not accept as required by this Act, is not liable" thereon, yet there is an implied contract by a banker with his customer to cash cheques within a