This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 60.— A draft is drawn on
(1) John Smith or Joseph Brown.
(2) John Smith, or failing him, Joseph Brown.
Would not these, under section 6, sub-section 2, of the Bills of Exchange Act, be simply orders for the payment of money and not bills of exchange? What would be the holder's rights against the drawer and acceptor?
Answer.—Drafts in either of these forms would not be bills of exchange. The first is addressed to two drawees alternatively, and the second to two drawees in succession.
As to the right of the holder against the parties, we think that they would constitute on the part of the quasi acceptors a contract to pay the money, which could be enforced in the same way as other contracts are enforceable. As to the drawer, we do not see on what ground the holders could sue him unless they had an understanding with him apart from the order itself, which would make him liable. The rights and liabilities of the parties on these documents would be entirely outside the law respecting bills of exchange.