Bills of Exchange Act (R.S.C., 1985, c. B-4)

Marginal note:When notary not accessible

122 Where a dishonoured bill is authorized or required to be protested and the services of a notary cannot be obtained at the place where the bill is dishonoured, any justice of the peace resident in the place may present and protest the bill and give all necessary notices and has all the necessary powers of a notary with respect thereto.

Marginal note:Expense

• 123 (1) The expense of noting and protesting any bill and the postages thereby incurred shall be allowed and paid to the holder in addition to any interest thereon.

• Marginal note:Notaries’ fees

  (2) Notaries may charge the fees in each province allowed them.

Marginal note:Forms

• 124 (1) The Forms in the schedule may be used in noting or protesting any bill and in giving notice thereof.

• Marginal note:Annexing copy or original of bill

  (2) A copy of the bill and endorsement may be included in the Forms, or the original bill may be annexed and the necessary changes in that behalf made in the Forms.

Marginal note:How notice of protest given

125 Notice of the protest of any bill payable in Canada is sufficiently given and is sufficient and deemed to have been duly given and served, if given during the day on which protest has been made or on the next following juridical or business day, to the same parties and in the same manner and addressed in the same way as is provided by this Part for notice of dishonour.

Liabilities of Parties

Marginal note:Equitable assignment

126 A bill, of itself, does not operate as an assignment of funds in the hands of the drawee available for the payment thereof, and the drawee of a bill who does not accept as required by this Act is not liable on the instrument.

Marginal note:Engagement by acceptance

127 The acceptor of a bill by accepting it engages that he will pay it according to the tenor of his acceptance.

Marginal note:Estoppel

128 The acceptor of a bill by accepting it is precluded from denying to a holder in due course

• (a) the existence of the drawer, the genuineness of his signature and his capacity and authority to draw the bill;

• (b) in the case of a bill payable to drawer’s order, the then capacity of the drawer to endorse, but not the genuineness or validity of his endorsement; or

• (c) in the case of a bill payable to the order of a third person, the existence of the payee and his then capacity to endorse, but not the genuineness or validity of his endorsement.

Marginal note:Drawer

129 The drawer of a bill by drawing it

• (a) engages that on due presentment it shall be accepted and paid according to its tenor, and that if it is dishonoured he will compensate the holder or any endorser who is compelled to pay it, if the requisite proceedings on dishonour are duly taken; and

• (b) is precluded from denying to a holder in due course the existence of the payee and his then capacity to endorse.

Marginal note:Liability by signature

130 No person is liable as drawer, endorser or acceptor of a bill who has not signed it as such, but when a person signs a bill otherwise than as a drawer or acceptor, he thereby incurs the liabilities of an endorser to a holder in due course and is subject to all the provisions of this Act respecting endorsers.

Marginal note:Trade-name or assumed name

• 131 (1) Where a person signs a bill in a trade-name or assumed name, he is liable thereon as if he had signed it in his own name.

• Marginal note:Firm name

  (2) The signature of the name of a firm is equivalent to the signature, by the person so signing, of the names of all persons liable as partners in that firm.

Marginal note:Endorser

132 The endorser of a bill by endorsing it, subject to the effect of any express stipulation authorized by this Act,

• (a) engages that on due presentment it shall be accepted and paid according to its tenor, and that if it is dishonoured he will compensate the holder or a subsequent endorser who is compelled to pay it, if the requisite proceedings on dishonour are duly taken;

• (b) is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer’s signature and all previous endorsements; and

• (c) is precluded from denying to his immediate or a subsequent endorsee that the bill was, at the time of his endorsement, a valid and subsisting bill, and that he had then a good title thereto.

Marginal note:Measure of damages

133 Where a bill is dishonoured, the measure of damages, which shall be deemed to be liquidated damages, are

• (a) the amount of the bill;

• (b) interest thereon from the time of presentment for payment, if the bill is payable on demand, and from the maturity of the bill in any other case; and

• (c) the expenses of noting and protesting.

Marginal note:Recovery of damages

134 In the case of a bill that has been dishonoured, the holder may recover from any party liable on the bill, the drawer who has been compelled to pay the bill may recover from the acceptor, and an endorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior endorser, the damages prescribed in section 133.

Marginal note:Re-exchange and interest

135 In the case of a bill that has been dishonoured abroad, in addition to the damages prescribed in section 133, the holder may recover from the drawer or any endorser, and the drawer or an endorser who has been compelled to pay the bill may recover from any party liable to him, the amount of the re-exchange with interest thereon until the time of payment.

Marginal note:Transferor by delivery

• 136 (1) Where the holder of a bill payable to bearer negotiates it by delivery without endorsing it, he is called a “transferor by delivery”.

• Marginal note:Liability of transferor

  (2) A transferor by delivery is not liable on the instrument.

Marginal note:Warranty by transferor

137 A transferor by delivery who negotiates a bill thereby warrants to his immediate transferee, being a holder for value, that

• (a) the bill is what it purports to be;

• (b) he has a right to transfer it; and

• (c) at the time of transfer, he is not aware of any fact that renders it valueless.

Discharge of Bill

Marginal note:Payment

• 138 (1) A bill is discharged by payment in due course by or on behalf of the drawee or acceptor.

• Marginal note:Payment in due course

  (2) Payment in due course means payment made at or after the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective.

• Marginal note:Accommodation bill

  (3) Where an accommodation bill is paid in due course by the party accommodated, the bill is discharged.

Marginal note:Payment by drawer or endorser

139 Subject to the provisions of section 138 with respect to an accommodation bill, when a bill is paid by the drawer or endorser, it is not discharged, but,

• (a) where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not reissue the bill; and

• (b) where a bill is paid by an endorser, or where a bill payable to drawer’s order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent endorsements and again negotiate the bill.

Marginal note:Acceptor holding at maturity

140 When the acceptor of a bill is or becomes the holder of it, at or after its maturity, in his own right, the bill is discharged.

Marginal note:Renouncing rights

• 141 (1) When the holder of a bill, at or after its maturity, absolutely and unconditionally renounces his rights against the acceptor, the bill is discharged.

• Marginal note:Against one party

  (2) The liabilities of any party to a bill may in like manner be renounced by the holder before, at or after its maturity.

• Marginal note:In writing

  (3) A renunciation must be in writing, unless the bill is delivered to the acceptor.

• Marginal note:Holder in due course

  (4) Nothing in this section affects the rights of a holder in due course without notice of renunciation.

Marginal note:Cancellation of bill

• 142 (1) Where a bill is intentionally cancelled by the holder or his agent and the cancellation is apparent thereon, the bill is discharged.

• Marginal note:Of any signature

  (2) In like manner, any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent.

• Marginal note:Discharge of endorser

  (3) In any case described in subsection (2), any endorser who would have had a right of recourse against the party whose signature is cancelled is also discharged.

Marginal note:Unintentional cancellation

143 A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative, but where a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority.

Marginal note:Alteration of bill

• 144 (1) Subject to subsection (2), where a bill or an acceptance is materially altered without the assent of all parties liable on the bill, the bill is voided, except as against a party who has himself made, authorized or assented to the alteration and subsequent endorsers.

• Marginal note:Right of holder in due course

  (2) Where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, the holder may avail himself of the bill as if it had not been altered and may enforce payment of it according to its original tenor.

Marginal note:Material alteration

145 In particular, any alteration

• (a) of the date,

• (b) of the sum payable,

• (c) of the time of payment,

• (d) of the place of payment, or

• (e) by the addition of a place of payment without the acceptor’s assent where a bill has been accepted generally,

is a material alteration.

Acceptance and Payment for Honour

Marginal note:Acceptance for honour under protest

146 Where a bill of exchange has been protested for dishonour by non-acceptance, or protested for better security, and is not overdue, any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill under protest for the honour of any party liable thereon or for the honour of the person for whose account the bill is drawn.

Marginal note:In part

147 A bill may be accepted for honour for part only of the sum for which it is drawn.

Marginal note:Deemed to be for honour of drawer

148 Where an acceptance for honour does not expressly state for whose honour it is made, it is deemed to be an acceptance for the honour of the drawer.

Marginal note:Maturity of after-sight bill

149 Where a bill payable after sight is accepted for honour, its maturity is calculated from the date of protesting for non-acceptance and not from the date of the acceptance for honour.

Marginal note:Requirements

150 An acceptance for honour under protest, in order to be valid, must be

• (a) written on the bill, and indicate that it is an acceptance for honour; and

• (b) signed by the acceptor for honour.

Marginal note:Liability of acceptor for honour

• 151 (1) The acceptor for honour of a bill by accepting it engages that he will, on due presentment, pay the bill according to the tenor of his acceptance, if it is not paid by the drawee, if it has been duly presented for payment and protested for non-payment and if he receives notice of those facts.

• Marginal note:Liability to holder and others

  (2) The acceptor for honour is liable to the holder and to all parties to the bill subsequent to the party for whose honour he has accepted.