This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 59.— (1) Is a bank justified in paying an acceptance drawn " on demand " and accepted payable at the bank and dated a certain day—if same is presented two or three days after the date of its acceptance?
(2) Is a demand draft of the nature of a cheque after it is accepted, or does it become past due if not presented where it is payable, on the day the acceptance is dated?
Answer.— (1) We think a bank is justified in paying on behalf of a customer a demand bill which he has accepted payable at the bank, if presented two or three days after the date of his acceptance.
(2) We do not think a demand draft is of the nature of a cheque after its acceptance. Section 45 of the Bills of Exchange Act indicates that if not presented within " a reasonable time " it must be regarded as an overdue bill. We do not think that this would necessarily involve that the bank should refuse to pay it if presented after a reasonable time had elapsed, but it would be more prudent to ask instructions from its customer before doing so.
The same question might arise in the case of an overdue acceptance not payable on demand. The fact that it is overdue does not lessen the liability of the acceptor to pay, and we should suppose that the bank to which it was presented would be entitled to pay and charge the item to his account, but it would be the more prudent course to refer such bills to the acceptor first, as he might have some defence or offset available against an overdue bill.