This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 9.— An acceptance held by Bank A is payable at Bank B. Being unpaid at close of business on the date of maturity Bank A hands the bill to a notary for protest. The notary delays presentation until 4.30 p.m. and finds the officers of Bank B have left for the day, the payee having in the meantime provided for the payment of the bill. Can the notary protest the bill; or, if he merely " notes" it, can he collect the usual notarial fee ? What would be the proper course for the banks to take under such circumstances?
Answer.—This question raises some important points, regarding which we have thought it well to get a memorandum from the Counsel of the Association, which is appended hereto.
The effect of the view which Mr. Lash takes in the case put by our correspondent is as follows:
The notary under the circumstances mentioned could not be said to have made a presentation at all, and the protest must therefore be made on the strength of the presentation which we assume was made earlier in the day by Bank A at Bank B. It is not necessary that the presentation should be made by the notary, although it is clearly an advantage that he should make it, as that simplifies the proof in case of dispute afterwards. Of course, if a notary presents a bill after banking hours and finds someone who is authorized to pay or refuse payment, such a presentation is valid notwithstanding the hour.
As regards noting, if the notary notes the bill instead of protesting it, he is entitled to whatever is the usual fee for noting and sending out the notices of dishonour, but we do not see that this has any bearing on the question as to the effect of the delay in presentation.
Time within which Presentation for Payment must be Made.
(Opinion of Counsel.)
The question as to the time during the day of maturity when a bill must be presented for payment does not appear to have come up for decision in Ontario.
The cases in England on the subject are all old ones. The section of the English Bills of Exchange Act now sets the question at rest there, as it declares that presentment must be made " at a reasonable hour on a business day " at a proper place, etc. The corresponding section of the Canadian Bills of Exchange Act is as follows:
" 45. (a) Where the bill is not payable on demand, presentment must be made on the day it falls due.
(c) Presentment must be made by the holder or by some person authorized to receive payment on his behalf, at the proper place, as hereinafter defined, either to the person designated by the bill as payer, or to his representative or some person authorized to pay or refuse payment on his behalf, if, with the exercise of reasonable diligence, such person can there be found."
The section relating to the presentment for acceptance is as follows:
"41. (a) The presentment must be made by or on behalf of the holder to the drawee or to some person authorized to accept or refuse acceptance, on his behalf, at a reasonable hour on a business day, and before the bill is overdue."
It will be observed that this section contains the words " at a reasonable hour on a business day." The absence of these words in section 45, and the statement in that section that presentment for payment must be made on the day the bill falls due leaves the question open for argument—the argument being that, as nothing is said as to the time of the day for presentation for payment, the holder has the whole day for presentment.
We think, however, that inasmuch as section 45 requires presentment to be made at the proper place either to the person designated by the bill as payer, or some person authorized to pay or refuse payment on his behalf, if with the exercise of reasonable diligence such person could there be found, presentment for payment must be made at a reasonable hour, otherwise it could not be said that reasonable diligence had been exercised to find the proper person at the proper place to whom the bill could be presented.
In Parker v. Gordon, 7 East, 385 (A.D.) 1806, Lord Ellenborough said:
"If a party choose to take an acceptance payable at an appointed place, it is to be presumed that he will inform himself of the proper time for receiving payment at such place, and he must apply accordingly."
In this case the bill was made payable at a banker's, and it was not presented until after six o'clock, p.m., when the bank was shut and the clerks gone away.
In the same case LeBlanc, J., said:
" If a party will take an acceptance in this manner, payable at a banker's, he must present it at a proper time, according to the known method of conducting business, otherwise the greatest inconvenience would ensue."
A New York case, Utica v. Smith, 18 Johns, X. Y. 230, is instructive. In that case a note was payable at the Mechanics' Bank, New York City, and was presented at 3.15 p.m. The bank closed at three o'clock, but it was customary for clerks to remain after that hour during which notes were presented and paid or refused. The court said, "though the presentment was out of banking hours, it is sufficient if there was a person at the bank authorized to give the holder an answer."
The result of a number of American cases is given in the American and English Encyclopędia of Laws, 2nd edition, vol. IV., page 370, as follows:
" Where a bill or note is payable at a bank, it must be presented for payment before the usual hour of closing the banking house."
We think these authorities would be followed in Canada.
Section 8 of chapter 17 of the Acts of 1891, amending the Act of 1890, declares that the rules of the common law of England, including the Law Merchant, save in so far as they are inconsistent with the express provisions of the said Act, as amended, shall apply.
The English cases referred to show what the rule of the common law of England on the subject was, and we think it cannot be said that such rule is inconsistent with the express provisions of the Act. On the contrary, we think it consistent with it.