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the person whose signature it purports to be, the forged or unauthorised signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority.

Provided that nothing in this section shall affect the ratification of an unauthorised signature, not amounting to a forgery.

25. A signature by procuration operates as notice that the Procuration agent has but a limited authority to sign, and the principal is signatures. only bound by such signature if the agent in so signing was acting within the actual limits of his authority.

as agent or in

26.—(1.) Where a person signs a bill as drawer, indorser, or Persons signing acceptor, and adds words to his signature, indicating that he signs representative for or on behalf of a principal, or in a representative character, capacity, he is not personally liable thereon, but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability.

(2.) In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted.

The Consideration for a Bill.

for value.

27.—(1.) Valuable consideration for a bill may be constituted Value and holder by

(a.) Any consideration sufficient to support a simple con

tract;

(b.) An antecedent debt or liability.

Such a debt or liability is deemed valuable consideration whether the bill is payable on demand or at a future time.

(2.) Where value has at any time been given for a bill the holder is deemed to be a holder for value as regards the acceptor and all parties to the bill who became parties prior to such time.

(3.) Where the holder of a bill has a lien on it, arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien.

bill or party.

28.-(1.) An accommodation party to a bill is a person who has Accommodation signed a bill as drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person.

(2.) An accommodation party is liable on the bill to a holder for value; and it is immaterial whether, when such holder took

Holder in due

course.

Presumption of

the bill, he knew such party to be an accomodation party or

not.

29.-(1.) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions; namely,

(a.) That he became the holder of it before it was overdue, and without notice that it had been previously dishonoured, if such was the fact:

(b.) That he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it.

(2.) In particular the title of a person who negotiates a bill is defective within the meaning of this Act when he obtained the bill, or the acceptance thereof, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud.

(3.) A holder (whether for value or not), who derives his title to a bill through a holder in due course, and who is not himself a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder.

30. (1.) Every party whose signature appears on a bill is value and good prima facie deemed to have become a party thereto for value. (2.) Every holder of a bill is prima facie deemed to be a holder in due course; but if in an action on a bill it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill.

Negotiation of bill.

Negotiation of Bills.

31.—(1.) A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill.

(2.) A bill payable to bearer is negotiated by delivery.

(3.) A bill payable to order is negotiated by the indorsement of the holder completed by delivery.

(4.) Where the holder of a bill payable to his order transfers it for value without indorsing it, the transfer gives the transferee such title as the transferor had in the bill, and the transferee in addition acquires the right to have the indorsement of the transferor.

(5.) Where any person is under obligation to indorse a bill

in a representative capacity, he may indorse the bill in such terms as to negative personal liability.

32. An indorsement in order to operate as a negotiation must Requisites of a comply with the following conditions, namely:

(1.) It must be written on the bill itself and be signed by the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient.

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An indorsement written on an allonge, or on a
bill issued or negotiated in a country where "copies
are recognised, is deemed to be written on the bill
itself.

(2.) It must be an indorsement of the entire bill. A partial

indorsement, that is to say, an indorsement which
purports to transfer to the indorsee a part only of the
amount payable, or which purports to transfer the bill
to two or more indorsees severally, does not operate
as a negotiation of the bill.

(3.) Where a bill is payable to the order of two or more
payees or indorsees who are not partners, all must
indorse, unless the one indorsing has authority to

indorse for the others.

(4.) Where, in a bill payable to order, the payee or indorsee is wrongly designated, or his name is mis-spelt, he may indorse the bill as therein described, adding, if he think fit, his proper signature.

(5.) Where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved.

(6.) An indorsement may be made in blank or special. It

may also contain terms making it restrictive.

valid indorse

ment.

33. Where a bill purports to be indorsed conditionally the Conditional incondition may be disregarded by the payer, and payment to the dorsement.

indorsee is valid whether the condition has been fulfilled or not.

34.—(1.) An indorsement in blank specifies no indorsee, and Indorsement in

a bill so indorsed becomes payable to bearer.

blank and special indorse

(2.) A special indorsement specifies the person to whom, or ment. to whose order, the bill is to be payable.

(3.) The provisions of this Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement.

(4.) When a bill has been 'ndorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person.

35.—(1.) An indorsement is restrictive which prohibits the Restrictive infurther negotiation of the bill or which expresses that it is a

dorsement.

Negotiation of overdue or dishonoured bill.

Negotiation of bill to party already liable thereon.

Rights of the holder.

mere authority to deal with the bill as thereby directed and not a transfer of the ownership thereof, as, for example, if a bill be indorsed "Pay D. only," or "Pay D. for the account of X.," or "Pay D. or order for collection."

(2.) A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorises him to do so.

(3.) Where a restrictive indorsement authorises further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement.

36. (1.) Where a bill is negotiable in its origin it continues to be negotiable until it has been (a) restrictively indorsed or (b) discharged by payment or otherwise.

(2.) Where an overdue bill is negotiated, it can only be negotiated subject to any defect of title affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title than that which the person from whom he took it had.

(3.) A bill payable on demand is deemed to be overdue within the meaning and for the purposes of this section, when it appears on the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact.

(4.) Except where an indorsement bears date after the maturity of the bill, every negotiation is primâ facie deemed to have been effected before the bill was overdue.

(5.) Where a bill which is not overdue has been dishonoured any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of dishonour, but nothing in this sub-section shall affect the rights of a holder in due course.

37. Where a bill is negotiated back to the drawer, or to a prior indorser or to the acceptor, such party may, subject to the provisions of this Act, re-issue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable.

38. The rights and powers of the holder of a bill are as follows:

(1.) He may sue on the bill in his own name:
(2.) Where he is a holder in due course, he holds the bill free

from any defect of title of prior parties, as well as from
mere personal defences available to prior parties among
themselves, and may enforce payment against all parties
liable on the bill:

(3.) Where his title is defective (a) if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and (b) if he obtains payment of the bill the person who pays him in due course gets a valid discharge for the bill.

General duties of the Holder.

39.-(1.) Where a bill is payable after sight, presentment for When presentacceptance is necessary in order to fix the maturity of the instru- ment for accept

ment.

(2.) Where a bill expressly stipulates that it shall be presented for acceptance, or where a bill is drawn payable elsewhere than at the residence or place of business of the drawee, it must be presented for acceptance before it can be presented for pay

ment.

(3.) In no other case is presentment for acceptance necessary in order to render liable any party to the bill.

(4.) Where the holder of a bill, drawn payable elsewhere than at the place of business or residence of the drawee, has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused, and does not discharge the drawer and indorsers.

ance is necessary.

40.-(1.) Subject to the provisions of this Act, when a bill Time for prepayable after sight is negotiated, the holder must either present able at sight. senting bill payit for acceptance or negotiate it within a reasonable time.

(2.) If he do not do so, the drawer and all indorsers prior to

that holder are discharged.

(3.) In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case.

sentment for acceptance, and

presentment.

41.-(1.) A bill is duly presented for acceptance which is Rules as to prepresented in accordance with the following rules: (a.) The presentment must be made by or on behalf of the excuses for nonholder to the drawee or to some person authorised to accept or refuse acceptance on his behalf at a reasonable hour on a business day and before the bill is overdue:

(b.) Where a bill is addressed to two or more drawees, who are not partners, presentment must be made to them all, unless one has authority to accept for all, then presentment may be made to him only:

(c.) Where the drawee is dead presentment may be made to his personal representative:

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