This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 505.— Referring to the previous answer, will you be kind enough to give a somewhat fuller opinion in this matter, as it is one which is continually cropping up. You say, '' The only question involved is whether you have failed in your duty as collecting agent, to such an extent as to bring yourself under liability to the owner of the bill." Is it established by usage in Ontario, that presentment will be made of such bills, by sending the usual notice and power of attorney through the mails, and that if a reply is not received in (say) five days they will be treated as dishonoured? Would this bring it under the provisions of section 43 (b) of Bills of Exchange Act? In brief, is presentment of such bills excused by usage in Ontario? If the bill itself is sent through the mails (as seems to be meant by the Act), where there is a daily mail between the places, when do the two days (sec. 42) start to run— from the date of mailing by the bank, or the probable receipt by the drawee—that protest may be made under sec. 51, sub-sec. 8, if necessary ?
Answer.—It seems to us that there is no practice recognized in Ontario, '' authorized by agreement or usage " in the words of the statute, respecting the presentment of bill through the post office, by which, of course, is meant the sending of the actual bill itself to the drawee. It is clear that a good many difficulties might arise if a bill were so sent, and unless it was done with the express or implied sanction of the owner of the bill, the collecting bank would, we think, be taking a very unreasonable risk.
The other practice referred to and which now prevails very generally, of sending a notice containing a blank power of attorney to accept, might be regarded by the courts as an established usage governing the conditions on which a collecting bank receives unaccepted bills drawn on persons whom it can only reach by mail. We would not like, however, to express an opinion as to this. Unless the collecting bank could successfully argue that the arrangement between itself and the owner of the bill in question was within these lines, by reason of express agreement, or by implication from the course of business between them, then the collecting bank would be responsible for the results of the non-presentation of the item.
There is no question involved here of presentment being excused. If there is anything in the argument at all the collecting bank's defence is that the bill was not sent to it for presentation in the ordinary way, but on the understanding that it would endeavour to procure acceptance by means of the notice and power of attorney, and having made that effort its duty was fully accomplished.
As regards the bearing of sec. 43 on the case of a bill sent direct by mail to the drawee, notice of dishonour must be given if the bill is not accepted within two days after the day on which it reached him. There would no doubt be a good deal of practical difficulty in keeping within the law on
As regards the bearing of sec. 42 on the case of a bill this point if bills were sent direct by mail; that is one of the difficulties to which we had reference in the remarks made above.