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

Marginal note:Protest for better security

115 Where the acceptor of a bill suspends payment before it matures, the holder may cause the bill to be protested for better security against the drawer and endorsers.

Marginal note:Acceptance for honour

• 116 (1) Where a dishonoured bill has been accepted for honour under protest or contains a reference in case of need, it must be protested for non-payment before it is presented for payment to the acceptor for honour, or referee in case of need.

• Marginal note:Protest for non-payment

  (2) When a bill is dishonoured by the acceptor for honour, it must be protested for non-payment by him.

Marginal note:Noting equivalent to protest

117 For the purposes of this Act, where a bill is required to be protested within a specified time or before some further proceeding is taken, it is sufficient that the bill has been noted for protest before the expiration of the specified time or the taking of the proceeding.

Marginal note:Protest on day of dishonour

• 118 (1) Subject to this Act, when a bill is protested, the protest must be made or noted on the day of its dishonour.

• Marginal note:Extending protest

  (2) When a bill has been duly noted, the formal protest may be extended thereafter at any time as of the date of the noting.

Marginal note:Protest on copy or particulars

119 Where a bill is lost or destroyed, or is wrongly or accidentally detained from the person entitled to hold it, or is accidentally retained in a place other than where payable, protest may be made on a copy or written particulars thereof.

Marginal note:Place of protest

• 120 (1) A bill must be protested at the place where it is dishonoured, or at some other place in Canada situated within five miles of the place of presentment and dishonour of the bill.

• Marginal note:Where bill returned by post

  (2) When a bill is presented through the post office and returned by post dishonoured, it may be protested at the place to which it is returned, not later than on the day of its return or the next juridical day.

• Marginal note:Time of protest

  (3) Every protest for dishonour, either for non-acceptance or non-payment, may be made on the day of the dishonour, and in case of non-acceptance at any time after non-acceptance, and in case of non-payment at any time after three o’clock in the afternoon, local time.

Marginal note:Contents of protest

121 A protest must contain a copy of the bill, or the original bill may be annexed thereto, must be signed by the notary making it and must specify

• (a) the person at whose request the bill is protested;

• (b) the place and date of protest;

• (c) the cause or reason for protest; and

• (d) the demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found.

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.