This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 30.— What is the smallest portion of a Canadian bill that must remain to entitle the holder to its redemption at face value?
Answer.—Theoretically, if a person, without having any portion of a bank bill, can prove conclusively that he is the owner of the bill, and that it has been destroyed, he is entitled to have it redeemed in full, on giving indemnity. In this respect he is in the same position as the owner of a lost promissory note of the ordinary kind. There is, however, this serious practical difference in dealing with lost or destroyed bank notes, that while indemnity can be given for an ordinary note, because it can be easily identified, no indemnity is practicable for a lost note, for the obvious reason that identification would be impossible.
We think that the principle followed by banks in redeeming mutilated notes is to pay them in full if satisfactory evidence of the destruction of the missing part is forthcoming. If not, and if the missing part is an important portion of the bill, it is difficult to see what claim the holder has.