'Payment in due course.' Inland instrument. Foreign in without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. 10. 'Payment in due course' means payment in accordance 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. 11. A promissory note, bill of exchange or cheque drawn or 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. 12. Any such instrument not so drawn, made or made paystrument. able shall be deemed to be a foreign instrument 6. 13. A negotiable instrument' means a promissory note, 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. 14. When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiated. 8 15. When the maker or holder of a negotiable instrument 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 2, 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 3.' ment 'in blank' and ' in full.' 16. If the indorser signs1 his name only, the indorsement Indorseis said to be in blank,' and if he adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person, the indorsement is said to be in full;' 'Indorsee.' and the person so specified is called the indorsee' of the instrument. struments. 17. Where an instrument may be construed either as a pro- Ambigumissory note or bill of exchange, the holder may at his election ous intreat it as either, and the instrument shall be thenceforward treated accordingly. stated 18. If the amount undertaken or ordered to be paid is Where stated differently in figures and in words, the amount stated amount is in words shall be the amount undertaken or ordered to be differently paid. 6 in figures and words. no Instru ments payable on demand. 19. A promissory note or bill of exchange, in which time for payment is specified, and a cheque, are payable on demand. 20. Where one person signs1 and delivers 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 ments. 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 2 3 commonly called an allonge. Notwithstanding this section, the holder of a Government security shall not be said to indorse it, or to be called its indorser, if when he signs it for the purpose of negotiation he inscribes his signature for that pur pose elsewhere than on the back, Act That a bill indorsed in blank is Baxendale v. Bennet, L. R., 3 A bill expressed to be payable See the first note on sec. 15. 'At sight.' • On presentment.' 'After sight.' 'Maturity.' Days of grace. Calculating maturity of bill or note payable so many months after date or sight. 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 delivering the instrument anything in excess of the amount intended by him to be paid thereunder. 21. In a promissory note or bill of exchange the expressions 'at sight' and 'on presentment' mean on demand. The expression after sight' means, in a promissory note, after presentment for sight, and, in a bill of exchange, after acceptance, or noting for non-acceptance, or protest for nonacceptance 2. 22. The maturity of a promissory note or bill of exchange is the date at which it falls due. Every promissory note or bill of exchange which is not expressed 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 payable2. 23. In calculating the date at which a promissory note or bill of exchange, made payable a stated number of months after date or after sight, or after a certain event, is at maturity, the period stated shall be held to terminate on the day of the month which corresponds with the day on which the instrument is dated, or presented for acceptance or sight, or 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 1 34 & 35 Vic. c. 74, sec. 2. 2 Unless the bill otherwise provides, a bill drawn payable without grace' would mature on the day on which it is expressed to be payable. 3 Month here means calendar month, Act I of 1868, sec. 2, cl. (4), supra, p. 487. payable at one month after date. The instrument is at maturity on the third day after the 28th February, 1878. (b) 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. lating 24. In calculating the date at which a promissory note or Calcu bill of exchange made payable a certain number of days after 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. 6 or note after date or sight. day of is a holi day. 25. When the day on which a promissory note or bill of When exchange is at maturity is a public holiday, the instrument maturity shall be deemed to be due on the next preceding business 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. Capacity to make &c. promissory notes, &c. Minor. Agency. Liability of agent signing. CHAPTER III. PARTIES TO NOTES, BILLS AND CHEQUES. 26. Every person1 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 2. 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 1 This includes corporations, Act I of 1868, sec. 2, supra, p. 487. 2 Compare the Contract Act, sec. II, supra, p. 552. If the drawee of a bill of exchange be a minor or otherwise incapable to contract, the holder may at his option treat the instrument either as a bill or a promissory note. 3 See In re Peruvian Railways Co., L. R. 2 Ch. Ap. 617. Rules as to bills etc. made by companies will be found in Act VI of 1882, secs. 65, A person taking a bill signed by an agent by procuration' (per proc.) should require the production of the authority which the agent purports to exercise, Attwood v. Munnings, 7 B. & C. 278, 283, per Bayley J., and other cases in Byles, 41. |