This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 74.— May a cheque or bill, payable to a married woman residing in the Province of Quebec, whether she has, or has not, a marriage contract, be properly paid or negotiated on her endorsement alone, and without her husband's consent?
If the act of payment or negotiation took place outside of the Province of Quebec, would that make any difference in the position of the parties?
Answer.—We are aware of opinion that the provisions of the Bills of Exchange Act must govern with respect to the powers of a married woman in the matter of endorsing or negotiating cheques and bills of exchange, and wherever these differ from the Quebec law they must prevail.
So far as her capacity to incur liability as an endorser is concerned, the Act leaves the matter untouched. Section 22 makes " capacity to incur liability co-extensive with capacity to contract." If under the code she is not able to contract, her endorsement on a bill does not create any liability on her part as an endorser.
This does not, however, affect her power to endorse or negotiate a cheque or bill in such a way that the drawee may lawfully pay it, or the transferee become the lawful holder.
Under sections 54 and 55 of the Act, both the acceptor and the drawer are precluded from denying the capacity of a payee to endorse, and a subsequent endorser is precluded from denying the regularity of the previous endorsements. Under these sections, therefore, if a bank should accept a cheque payable to a married woman, it is bound to pay it on her own endorsement, for it is precluded from denying her capacity to endorse. If the bank is so bound it clearly has the right to charge the cheque when paid to the drawer's account, but apart from this the drawer also is precluded from denying the capacity of the payee to endorse.
Considering that a bank is bound to pay its customers' cheques according to their tenor, and that in making a cheque payable to a married woman, the drawer in effect declares (because of such preclusion) that the amount is to be paid to her notwithstanding any disability she may be under, we think that a bank in the Province of Quebec is not only not bound to require the husband's authorization, but might be liable to its customer for damages should it refuse his cheque because of the absence of such authorization only.
The question being a very important one, we thought it well to submit it to counsel in the Province of Quebec, from whom we received the following reply:
" I am of opinion that under the law of this Province "the wife may endorse so as to pass the title to a bill of "exchange, even though she does not make herself liable, "and that a plea of her incapacity could not be raised by " an endorser, drawer, or acceptor, as they are precluded " from doing so by the Bills of Exchange Act, sections 54 "and 55."
As regards the second part of the question, the effect of payment or negotiation outside of the Province of Quebec, we think that the relative rights of the parties would depend upon the law where the transaction took place. A married woman is under no disability that would call her endorsement into question in any Province other than Quebec.