1

of any party to the bill. This case was on a foreign bill and therefore as we have seen (ante, Sec. 104) a protest was necessary, but with reference to inland bills, a note would be sufficient for it ordinarily takes the place of a protest with respect to such bills, and it has been held that a bill noted for protest is to be deemed protested, but, that when a bill is accepted or paid for honor, although the extension of the protest need not be made before the acceptance, or payment, the declaration must be formally made before the notary and precede the act of acceptance or payment.2 It will be observed that in all the sections in this chapter, notes and protests are put on the same footing, (see ante, Sec. 21.)

for honor.

114. Any person so paying is entitled to all the Right of payer rights, in respect of the bill, of the holder at the time of such payment, and may recover from the party for whose honor he pays all sums so paid, with interest thereon and with all expenses properly incurred in making such payment.

Under English law, the payer for honor, while entitled to the rights of the holder, to whom he pays, has also imposed upon him the duties, of such holder, and is therefore bound to give notice of dishonor and when necessary, protest the bill.3 He is entitled to take advantage of any notice of dishonor, of which the person for whom he made the payment could have availed himself; as to the amount he may recover, (see post, Sec. 117.)

of need.

115. Where a drawee in case of need is named Drawee in case in a bill of exchange, or in any indorsement thereon, the bill is not dishonored until it has been dishonored by such drawee.

116. A drawee in case of need may accept and pay the bill of exchange without previous protest. See ante, Sec. 7.

Vandewall v. Tyrrell, Moo. & M. 87.

2 Geralopulo v. Wieler, 10 C. B. 690; S. C. 20 L. J. (C. P.) 105.

3 Goodhall v. Polhill, 1 C. B.
233; S. C. 14 L. J. (C. P.) 146.

Ib. ; see also ex-parte Swan
L. R. 6 Eq. 344.

Acceptance and payment without protest.

Rules as to compensation.

CHAPTER XII.

OF COMPENSATION.

117. The compensation payable in case of dishonor of a promissory note, bill of exchange or cheque, by any party liable to the holder or any indorsee, shall (except in cases provided for by the Code of Civil Procedure, Sec. 532)' be determined by the following rules :

(a) the holder is entitled to the amount due upon the instrument, together with the expenses properly incurred in presenting, noting and protesting it;

(b) when the person charged resides at a place different from that at which the instrument was payable, the holder is entitled to receive such sum at the current rate of exchange between the two places;

(c) and indorser who, being liable, has paid the amount due on the same is entitled to the amount

so paid with interest at six per centum per annum

from the date of payment until tender or realization thereof, together with all expenses caused by the dishonor and payment;

(d) when the person charged and such indorser reside at different places, the indorser is entitled to receive such sum at the current rate of exchange between the two places;

• See Appendix.

(e) the party entitled to compensation may draw a bill upon the party liable to compensate him, payable at sight or on demand, for the amount due to him, together with all expenses properly incurred by him. Such bill must be accompanied by the instrument dishonored and the protest thereof (if any). If such bill is dishonored, the party dishonoring the same is liable to make compensation thereof in the same manner as in the case of the original bill.

(a). The amount due upon the instrument, will have to be determined with reference to Secs. 79 and 80, with regard to interest.

(b). This clause relates to what is known to English Law as re-exchange, and the law with regard to it has been recently thus laid down, "If an ordinary bill of exchange is drawn in one country, upon persons in another and distant country, "the holder who has contracted for the transfer of funds from "the one country to the other, almost necessarily sustains damage "by the dishonor of the bill. He must take other means to "put himself in funds in the country where the bill was payable. "Hence the right to re-exchange which is the measure of "those damages.' And in another case,, Malins, V. C., said: "I think the principle is established, that where a bill is dishonored, the drawer is entitled to recover from the acceptor, not only the amount of the bill and interest, but also such reasonable amount of expenses, as may have been caused by the dishonor, including the expenses of re-exchange," (see ante, Sec. 30.)

(e). The bill to be drawn referred to in this clause, is called a "retraite or 're-draft," and the effect of it is, to put into the pocket of the holder at the proper time and place, the exact sum which he should have received from the acceptor of the original bill.3

1 Willans v. Ayers, 3 App. Cas. at p. 146.

• General South American Co. in re, 7 Ch. D. at p. 646; see Prehn v. Royal Bk. of Liverpool, L. R. 5 Ex. 92; Francis v. Rucker,

Amb. 671; Walker V. Hamilton, 1 D. F. & J. 602.

3 Suse v. Pompe, 8 C. B. at p. 166; S. C. 30 L. J. (C. P.) 75; De Tastet v. Baring, 11 East, 265.

Presumptions as to negotiable instruments;

of considera

tion;

as to date;

as to time of acceptance;

as to time of transfer ;

as to order of indorsemenst;

as to stamp ;

that holder is a holder in due course.

CHAPTER XIII.

SPECIAL RULES OF EVIDENCE.

118. Until the contrary is proved, the following presumptions shall be made:

(a) that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;

(b) that every negotiable instrument bearing a date was made or drawn on such date;'

(c) that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) that every transfer of a negotiable instrument was made before its maturity;*

(e) that the indorsements appearing upon a nego

tiable instrument were made in the order in which they appear thereon ;

(f) that a lost promissory note, bill of exchange or cheque was duly stamped;"

(g) that the holder of a negotiable instrument is a holder in due course: provided that, where the in

1 Anderson v. Weston, 6 Bing. N. C. 296.

2 Lewis v. Parker, 4 Ad. & E. 238; S. C. 6 N. & M. 294;

Parkin v. Moon, 7 C. & P. 408;
Cripps v. Davis, 12 M. & W. 159.
3 Marine Insurance Co. V.
Haviside, L. R. 5 H. L. 625.

strument has been obtained from its lawful owner or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burthen of proving that the holder is a holder in due course lies upon him.

This section must be read with Secs. 4 and 3 of the Evidence Act, which lay down the law as to presumptions.

(a). The presumption here as to the consideration for a negotiable instrument is absolute, and goes beyond that provided for in Sec. 114 of the Evidence Act under which, (ill. c.), the Court may presume, that a bill of exchange accepted or indorsed, was accepted or indorsed for good consideration.

Debt may be maintained on a promissory note by the payee against the maker, and on a bill of exchange by the drawer being also payee, against the acceptor, though the instrument do not express that it is for value received, or for any consideration. Lord Denman, C. J., said, "Those words, (for value received) express only what the law must imply in each case from the nature of the instrument, and the relation of the parties apparent upon it, and it therefore makes no difference, whether they be, or be not inserted.1

2

The following observations of Lord Blackburn bear on this clause and clause (g): "I take it to be perfectly clear, that "when a bill of exchange is on the face of it a good bill, and "there is nothing on the face of it to show the contrary, it "prima facie imports value. Primâ facie, a bill of exchange is a good bill of exchange, and it is necessary to show the con"" trary, but then I think it is clear both upon the authorities, "and also, as it seems to me, upon good sense, that when it is "shown that a bill of exchange was a fraudulent one, or an illegal one, or a stolen one, in any of those cases it being "known that the person who holds it was a party to that fraud, "to that illegality, or to that theft, and therefore could not "sue upon it himself, the presumption is so strong that he would

702.

Hatch v. Trayes, 11 A. & E.

2 Jones v. Gordon, 2 App. Cas. at p. 627.