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That an express covenant to pay the amount of the bills would merge them, and it is the same in effect here, whatever might have been intended.

As to damages: that the bills are drawn and accepted in Upper Canada, and though payable in London, are payable generally under the statute; the words "only, and not elsewhere," not having been inserted in the bills. Wherefore they are not drawn upon Poore at any place in Europe, for they were drawn upon him at Cobourg in Upper Canada, where they were accepted, and might or ought to have been. presented to him for payment.

He seemed to concede that the plaintiffs would be 'entitled to four per cent. damages; but how so, if the bills were merged or not due when the action was brought?

MACAULAY, C. J.-The first question is whether the indenture supports the second and third pleas by shewing that the plaintiffs did agree to give time to Winans, as alleged. If not, then, secondly-whether the damages ought to be reduced to the extent of ten per cent. or any less sum; ten per cent. as upon protested foreign bills on London under the statute in that behalf, being included in the verdict.

It appears to me that the pleas do not rely upon the indenture of mortgage as discharging one defendant more than the other, nor upon its constituting a merger or release of the bills, but upon its amounting to a contract or agreement on the plaintiff's part to give time to Winans to retire the bills, &c.

No authority was cited to shew that as an accommodation acceptor Poore would be discharged if the plaintiffs did give time to Winans as alleged, and several cases seem against it. There was nothing to prevent Poore taking up the bills at maturity or paying them off at any time-Byles on Bills 180 and note (f), Fentum v. Pocock (5 Taunt 192), Price v. Edmunds (10 B. & C. 578), Harrison v. Courtauld (3 B. & Ad. 36), Nichols v. Norris (3 B. & Ad. 41).

It is to be observed that the parties to the mortgage do not include all the plaintiffs, nor both the defendants, who are sued in this action on different grounds of liability, but one of each-that is, Mitchell and Winans.

If the indenture of mortgage did amount to an agreement binding on the plaintiffs to give twelve months' time to Winans to take up the bills &c., the sufficiency of the second and third pleas as a bar in point of law is not now the question; but what is the legal construction and effect of the mortgage in relation to, and as in fact establishing the agreement to give time alleged in those pleas?

It is not contended that if Mitchell, one of the plaintiffs, agreed to give time as alleged it does not bind all the plaintiffs, in whose behalf he acted; at all events it bound him, one of the plaintiffs. The agreement then seems to be, that though not directly expressed the mortgage does impliedly contain an agreement by Mitchell to give Winans twelve months' time to redeem the bills &c., on the ground, among others, that being an indenture inter partes, its words are those of both parties, and that inasmuch as Winans' covenant is to perform all the provisions, agreements and stipulations in the proviso set forth, he covenanted to pay off the several bills within twelve months from the date of the indenture, whence it must be inferred, from the plaintiff Mitchell accepting such a covenant in connexion with the rest of the instrument, that he agreed to grant twelve months to make such payments, and in short, extended the time for payment of each bill respectively until the expiration of twelve months from the 2nd January 1855. If they did not become merged in the covenant quoad Winans, it may be proper to consider how far the indenture does amount to such an agreement as the pleas allege to inquire whether it released or merged the bills; for if not, it must then remain the only question whether independently thereof it extended the time of payment for each bill due or not due as subsisting securities, or whether it constitutes a collateral security only, without affecting the terms of the original securities, viz-the bills of exchange declared upon, or the plaintiffs' remedy thereunder as holders,-Byles on Bills, 176-8. I do not think it released or merged the bills. It certainly did not release Winans therefrom; nor could it have intended to merge them, because the very terms of the proviso are that Winans should retire them and pay all damages &c., within twelve months from date.

Moreover, it recites that he had agreed to make that security to secure them, not to absorb or supersede them. It seems to me therefore to amount only to a collateral security.—Byles on Bills, 182-4. Drake v. Mitchell (3 East. 251), Solly v. Forbes (2 B. & B. 38), Twopenny v. Young (3 B. & C. 208), Bell v. Banks (3 M. & G. 258), Weston v. Foster (2 Bing. N. S. 693), Holmes v. Bell (3 M. & G. 220), Emes v. Widdowson (4 C. & P. 151), are much in point. King v. Hoare (13 M. & W. 494-6), Thimbleby v. Barron (3 M. & W. 210), Ford & Beech (11 Q. B. 852-869, S. C. 12 Jur. 310), Gibbons v. Voiullon (8 C. B. 485, S. C. 11 Ju. 66), Belshaw v. Bush (17 Ju. 57, S. C. 14 Eng. Rept. 269), Squire v. Ford (15 Ju. 619, S. C. 5 Eng. Rep. 32), Henderson v. Stobart (5 Ex. Rep.), Lyth v. Ault (7 Ex. Rep. 669), Allenby v. Dalton (5 L. J. O. S. Q. B. 312), Andell v. Baker (15 Q. B. 20), Matthewson v. Brouse (1 U. C. R. 272), Murray v. Miller (1 U. C. R. 353), Bank B. N. A. v. Jones et al. (8 U. C. Q. B. R. 86), Bank U. C. v. Sherwood (8 U. C. Q. B. R. 116), Owen v. Homan (15 Ju. 339, S. C. 3 Eng. Rep. 112-126.) These cases, though not all equally, shew, I think, that this was a collateral security only, and not a merger of the bills as substituted in their place, nor is a merger or a release pleaded.

It is to be assumed that in most of the foregoing cases the debts or securities in question were due and payable, and rights of action therefore had vested in the creditors; whereas here only the bill mentioned in the first count was due and payable, and the others declared on were still running; whether any others existed, due or outstanding to which the indenture refers, we are not informed. But as respects intention, if it be clear that the right of action vested in the plaintiffs under the first bill was not put an end to, and would not be extinguished or suspended, even by an explicit collateral undertaking to give time, it shews that it was not intended to alter or suspend the rights of the plaintiffs in relation to the bills not yet due, but that the object was collateral security.

Then, on the other point, the argument in effect is, that by the indenture the plaintiffs extended the time for paying the

bills, including those over due, as well as those not then due. As to those overdue, it is clear such an agreement would not be a good legal bar. And as to those coming due, it is not so agreed unless by implication.

In Emes v. Widdowson, 4 C. & P. 151-assumpsit on two bills of exchange, drawer against acceptor-it does not appear whether both or either were due when the arrangement relied upon was made, in consequence of which the ' defendant assigned property as a security for certain sums then due, and also for all future demands. There was a power of sale in the assignment, but it was not to be executed until after six months' notice, which notice had not been given. The defence proceeded on the ground that the personal remedy was suspended. Tindal, C. J., was of the opinion that such an assignment could only be considered as collateral security, and that the personal remedy was not suspended, as there was not any clause to that effect in the deed. It does not appear whether there was a covenant to pay; and one question here is, whether there is a covenant to that effect in the present indenture.

Byles on Bills, 172-175; King v. Gillett (7 M. & W. 55), Thimbleby v. Barron (3 M. & W. 210), Goss v. Lord Nugent (5 B. & Adol. 58), Foster v. Dawber (6 Ex. R. 840-851), are material upon the nature and effect of subsequent agreements to prolong the time for the performance of executory contracts before breach,-6 Ex. R. 851-2, and American note at the end. But a distinction is taken between executory and executed contracts; and bills of exchange and promissory notes are spoken of as evincing executed contracts on the part of the drawee, payee or holder, and as requiring a new consideration to render an undertaking to extend the time binding as an agreement, even collaterally. So far as consideration is material, there is ample in the present case as between Winans and Mitchell. It does not therefore depend upon that point.-Story on Promissory Notes, secs. 413, 414, 416; Story on Bills, sec. 427; Pring v. Clarkson (1 B. & C. 14, S. C. 2 D. & R. 78), Gould v. Robson (8 East. 576), Bedford v. Deakin (2 B. & A. 210, S. C. 2 Star. N. P. C. 178)

2 B

VOL. V.

Badnall v. Samuel (3 Price 521), Thomas v. Courtney (1 B. & A. 1), Philpot v. Briant (4 Bing. 7179, 21.)

Here the plaintiff Mitchell did expressly agree in the indenture, not to forbear twelve months upon the bills, but that until default, and the expiration of three months' notice, Winans should retain and keep possession of the leasehold lands, tenements, &c., transferred by the indenture of the 2nd January 1855. There is not a word about delay in prosecuting the bills; he did not agree to surrender or forbear proceedings on the bills, and the plaintiffs still hold them. One argument in favor of an implied undertaking to give time &c. is, that the effect of the mortgage was to tie up the property mortgaged, thereby abridging Winans' means of paying, and placing his assets beyond the reach of an execution; unless, as being the mortgagee of a chattel real, the mortgagor's right of redemption might be sold under the 12 Vic. ch. 73-a step that would be quite inconsistent with the terms of the mortgage before default, and which might be taken within the year, if plaintiffs can recover in this action.

There are also the terms of the second proviso in the indenture to be borne in mind, importing that the plaintiffs were to take up the bills if outstanding, or lose the benefit of the mortgage security except pro tanto.

I have not overlooked those weighty considerations. But it may be asked, whether, if not paid at maturity, it was necessary for the plaintiffs (if holders) to present them for payment, or to give notice of nonpayment, to Winans. It was probable Winans could not object to the want of notice, had it been omitted, on the ground that in the indenture he admits the want of assets in the acceptor's hands and his inability to supply funds, and so of presentment for payment. -Terry v. Parker (6 A. & E. 502), Byles on Bills 160. Still the consideration is, whether the bills were dishonored when presented, or would be so, even if not presented; and if so, whether a right of action vested thereon in the plaintiffs as holders. That may be tested by supposing this action had been deferred till the twelve months had expired: Could the plaintiffs then have sued and recovered on the bills, or was Poore discharged, and their only remedy against Winans on his covenant? This seems to refer it back to the test whether

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