Nova Scotia affirming the judgment for the plaintiff at the trial.
The defendant, to secure a debt due by one Holmes. to the plaintiff, wrote his name across the back of a promissory note made by Holmes in favour of the plaintiff who afterwards wrote his name under that of defendant.
The note was protested and an action brought against defendant as an indorser. The courts below held him liable.
Finlay Macdonald K.C. for the appellant. The plaintiff is not a holder in due course as the same is defined by section 56 of the "Bills of Exchange Act."
BRODEUR J.-This case is concluded by the decision of this court in Robinson v. Mann (6).
By section 131 of the "Bills of Exchange Act," it is provided that when a person signs a bill otherwise than as a drawer or acceptor, he thereby incurs the liabilities of an indorser to a holder in due course and is subject to all the provisions of the Act respecting indorsers.
This section contains an important addition to the corresponding section of the Imperial Act and it would not be advisable then to follow the British decisions.
In the case of Ayr American Plough Co. v. Wallace (1), decided in 1892 on a promissory note made before the above addition, Sir Henry Strong stated that J. if the case were under the new law the defendant would have been held liable.
This dictum was followed in the Province of Quebec where the doctrine had always exist&d.
(Pothier, Trait6 du change, no. 132, art. 2311.C.C.) and also in some other provinces.
1892 Balcolm v. Phinney (2).
1894 Watson v. Harvey (3).
1895 Fraser v. McLeod (4).
1897 Pegg v. Howlett (5).
The question, as I said before, was finally settled by this court in .1901 in the case of Robinson v. Mann (6), where it was held that the Molsons Bank were holders in due course of a note made payable to their order and which the defendant had indorsed above them and that his indorsement was a form of liability which the "Bills of Exchange Act" had adopted. I do not see any reason why this decision which has been followed should be changed.
The appeal fails and should be dismissed with costs.
J.-The point to be decided in this case is a very simple one.
The appellant signed his name across the back of a promissory note whereby one Holmes promised to pay to the respondent $500.00 twelve months after date with interest at 8% per annum as well after as before maturity. He claims to have thus signed the note as security for Holmes.
He now contends that he is not liable as an indorser of the note.
Section 131 of the "Bills of Exchange Act" (R.S.C., ch. 119), which applies to both bills of exchange and promissory notes, states that
In Robinson v. Mann a similar case, it was said by this court, under the authority of section 56 of the "Bills of Exchange Act," 1890, now section 131, that a person who indorses a promissory note not indorsed by the payee may be liable as an indorser to the latter.
The fact that the payee, Scott, when he placed the note in the hands of the Royal Bank for collection, also indorsed the note, and he did so under the signature of the appellant, does not take the case out of the operation of section 131, and I cannot follow the argument of the appellant when he says that the respondent was not a holder in due course, for he clearly was one as the word is defined by section 56. Robinson v. Mann(1), is conclusive authority that the payee can hold as an indorser a person who signs the bill or note otherwise than as a drawer or acceptor. The appeal should be dismissed with costs. Appeal dismissed with costs.
Statutes and regulations cited
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Unresolved citations
- section 56