This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 46.— We send advice of a bill we hold for collection, with form of power of attorney enabling us to accept the same on behalf of the drawees, to the latter, a trading company in a neighbouring town. This they returned, signed " E. . . . Trading Company, per J. E. Smith." We see their cheques on another bank frequently, and they are signed in this way and honoured by the bank. We accept for the drawees under this power.
Are we responsible to the owners of the bill for the validity of this acceptance, and assuming that Smith has a power of attorney from the trading company, is the above transaction a lawful delegation of his authority?
Answer.—We think you are responsible to the owners of the bill for the validity of this acceptance.
As regards the second point, the attorney cannot so delegate his authority, unless the effect of the power of attorney, taken in connection with the position of the attorney, and the nature of the business carried on, gives him power to do so.