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without having sufficient cause to believe 1 that any defect existed in the title of the person from whom he derived his

title. • Payment 10. “Payment in due course' means payment” in accordance in due course.'

with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the

amount therein mentioned 3. Inland in- 11. A promissory note, bill of exchange or cheque drawn or strument.

made in British India, and made payable in, or drawn upon any person resident * in, British India shall be deemed to be an

inland instrument 5. Foreign in- 12. Any such instrument not so drawn, made or made paystrument. able shall be deemed to be a foreign instrument. • Negoti. 13. A negotiable instrument' means a promissory note, able in strument.'

bill of exchange or cheque expressed to be payable to a specified person or his order, or to the order of a specified person, or to the bearer thereof, or to a specified person or the bearer

thereof. Negotia- 14. When a promissory note, bill of exchange or cheque

is tion.

transferred ? to any person, so as to constitute that person the

holder thereof, the instrument is said to be negotiated. Indorse- 15. When the maker or holder 8 of a negotiable instrument

ment.

· Mere negligence in taking a bill seems immaterial. Such, forinstance, as an erasure or other irregularity patent on the face of the instrument. If a man take honestly an instrument made or become payable to bearer he has a good title to it, with whatever degree of negligence he may have acted, unless his gross negligence induce the jury to find fraud, Byles on Bills, 14th ed., 187, 188.

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drawn in Calcutta on a merchant residing in Bombay, accepted payable in London ; 3. a bill drawn in Calcutta upon a merchant in London, but payable in Bombay, Chalmers,

As to protesting foreign bills and notes, see secs. 104, 134.

? by indorsement or delivery, secs. 46-48.

* Here, as in secs. 20, 46, 48, 49. and 78, holder' (notwithstanding sec. 8) seems to mean a de facto holder, i. e. payee, indorsee, or bearer (as the case may be), who is in possession of the instrument, whether he be entitled to receive the amount due thereon, or not. bility incurred by a person who is

's of money

9 See secs. 78 and 82 (c).

• Cf. the definition of residence in Code of Civil Procedure, sec, 17.

According to this definition the following would be inland bills: 1. à bill drawn in Calcutta on Bombay, but indorsed in Egypt; 2.

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signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto?, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the 'indorser 32

16. If the indorser signs 1 his name only, the indorsement Indorseis said to be in blank, and if he adds a direction to pay the blank and amount mentioned in the instrument to, or to the order of, 'in full.' a specified person, the indorsement is said to be in full ; 'Indorsee.' and the person so specified is called the 'indorsee' of the instrument.

17. Where an instrument may be construed either as a pro- Ambigumissory note or bill of exchange, the holder may at his election ous in

struments. treat it as either, and the instrument shall be thenceforward treated accordingly.

18. If the amount undertaken or ordered to be paid is Where stated differently in figures and in words, the amount stated amount is

stated in words shall be the amount undertaken or ordered to be differently

in figures paid.

and words. 19. A promissory note or bill of exchange, in which no Instrutime for payment is specified, and a cheques, are payable on payable on demand.

demand. 20. Where one person signs 1 and delivers 6 to another a Inchoate

stamped paper stamped in accordance with the law relating to negoti

instruable instruments then in force in British India, and either inents. wholly blank or having written thereon an incomplete negotiable instrument?, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, not party to a bill or note and who pose elsewhere than on the back, Act backs it with his signature, see Erp. XIII of 1886, sec. 6. Yates, 2 De Gex & J. 191; Steele * That a bill indorsed in blank is v. McKinlay, L. R. 5 App. Ca. 754. payable to bearer, see sec, 54. i See note 2, p. 675.

5 Sec. 6. 2 commonly called an allonge.

6 Baxendale v. Bennet, L. R., 3 3 Notwithstanding this section, the

Q. B. D. 525. holder of a Government security shall ? A bill expressed to be payable not be said to indorse it, or to be after date' is incomplete' if the called its indorser, if when he signs date be omitted, or if the acceptance it for the purpose of negotiation he be undated. inscribes his signature for that pur. & See the first note on sec. 15.

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upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount : provided that no person other than a holder in due course shall recover from the person de livering the instrument anything in excess of the amount in

tended by him to be paid thereunder. •At sight.' 21. In a promissory note or bill of exchange the expressions

at sight' and 'on presentment'i mean on demand. The sentment." • After expression after sight' means, in a promissory note, after sight.

presentment for sight, and, in a bill of exchange, after acceptance, or noting for non-acceptance, or protest for non

acceptance ? Maturity.' 22. The maturity of a promissory note or bill of exchange

is the date at which it falls due. Days of Every promissory note or bill of exchange which is not esgrace.

pressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is

expressed to be payable?. Calcu- 23. In calculating the date at which a promissory note or lating maturity

bill of exchange, made payable a stated number of months of bill

after date or after sight, or after a certain event, is at matuor note payable rity, the period stated shall be held to terminate on the day so many

of the month which corresponds with the day on which the months after date instrument is dated, or presented for acceptance or sight, or or sight.

noted for non-acceptance, or protested for non-acceptance, or the event happens, or, where the instrument is a bill of exchange made payable a stated number of months after sight and has been accepted for honour, with the day on which it was so accepted. If the month in which the period would terminate has no corresponding day, the period shall be held to terminate on the last day of such month 3.

Illustrations. (a) A negotiable instrument, dated 29th January, 1878, is made

34 & 35 Vic. c. 74, sec, 2. which it is expressed to be payable. 2 Unless the bill otherwise pro- 3 Month here means calendar vides, a bill drawn payable' without month, Act I of 1868, sec. 2, cl. (4), grace' would mature on the day on supra, p. 487

1

payable at one month after date. The instrument is at maturity on the third day after the 28th February, 1878.

(6) A negotiable instrument, dated 30th August, 1878, is made payable three months after date. The instrument is at maturity on the 3rd December, 1878.

(c) A promissory note or bill of exchange, dated 31st August, 1878, is made payable three months after date. The instrument is at maturity on the 3rd December, 1878.

24. In calculating the date at which a promissory note or Calcubill of exchange made payable a certain number of days after lating

maturity date or after sight or after a certain event is at maturity, the of bill day of the date, or of presentment for acceptance or sight, or payable so of protest for non-acceptance, or on which the event happens, many days shall be excluded.

or sight. 25. When the day on which a promissory note or bill of When exchange is at maturity is a public holiday, the instrument

day of

maturity shall be deemed to be due on the next preceding business day. is a holi

day. Explanation.—The expression public holiday' includes Sundays: New-Year's day, Christmas day: if either of such days falls on a Sunday, the next following Monday: GoodFriday; and any other day declared by the Local Government, by notification in the official Gazette, to be a public holiday.

after date

CHAPTER III.

PARTIES TO NOTES, BILLS AND CHEQUES.

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26. Every person capable of contracting, according to the law to which he is subject, may bind himself and be bound by the making, drawing, acceptance, indorsement, delivery and negotiation of a promissory note, bill of exchange or cheque.

A minor may draw, indorse, deliver and negotiate such instruments so as to bind all parties except himself ?.

Nothing herein contained shall be deemed to empower a corporation to make, indorse or accept such instruments except in cases in which, under the law for the time being in force, they are so empowered 3.

27. Every person capable of binding himself, or of being bound, as mentioned in section twenty-six, may so bind himself or be bound by a duly authorized agent acting in his name 4.

A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or indorsing bills of exchange so as to bind his principal.

An authority to draw bills of exchange does not of itself import an authority to indorse.

28. An agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he

Liability of agent signing

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1 This includes corporations, Act I found in Act VI of 1882, secs. 63, of 1868, sec. 2, supra, p. 487.

72.

As to the official liquidator's Compare the Contract Act, sec. power to make bills, etc., ibid. sec. IT, supra, p. 552.

If the drawee of 184, cl. (f). a bill of exchange be a minor or other- A person taking a bill signed by wise incapable to contract, the holder an agent' by procuration' (per proc.) may at his option treat the instrument should require the production of the either as a bill or a promissory note. authority which the agent purports to

* See In re Peruvian Railways Co., exercise, Attwood v. Munnings, 7 R. L. R. 2 Ch. Ap. 617. Rules as to & C. 278, 283. per Bayley J., and bills etc. made by companies will be other cases in Byles, 41.

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