comes within the exceptions in these sections. On the other hand, an accommodation party cannot claim that the holder shall discharge any duties towards him, which he would not be bound to discharge in the case of an ordinary bill. An accommodation acceptor is not discharged by the holder giving time to a co-acceptor, the real debtor, Lyon v. Butter, 7th Dec. 1841, 4 D. 178; nor by granting a discharge to an obligant on the bill, reserving the holder's rights against the other obligants, Lewis v. Anstruther, 17th Dec. 1852,15 D. 260.

$ 28.

course.

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

(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 (b) who negotiates (c) a bill is defective within the meaning of this Act when he obtained the bill, or the acceptance thereof, by fraud, (d) duress, or force and fear, (e) or other unlawful means, (f) or for an illegal consideration, (g) or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud (h).

(3.) A holder (i) (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. (j)

G

$ 29.

(a) A holder as defined in § 2 is a holder in due course only if—

(1.) The bill be complete and regular on the face of it, vide § 2. It must not be wanting at the time he takes it in any material particular, vide § 3, nor bear any sign of having been altered in a material particular, vide § 64. If, however, the alteration has been made with the assent of the parties to a bill or the alteration has been made in good faith merely for the purpose of correcting a mistake, the bill will be held to be complete and regular.

(2.) The holder takes it before maturity. Bills payable at a fixed date, or after date, or after sight, are due on the third day of grace after the term fixed by the bill, vide § 14. A bill payable on demand is overdue, when it appears on the face of it to have been in circulation for an unreasonable length of time, vide § 36 (3); as to cheques, vide § 74.

(3.) The holder has no notice that it has been dishonoured, either by non-acceptance or by non-payment. The notice need not be given to him by any party to the bill. It is sufficient if he know the fact of dishonour.

(4.) The holder takes it in good faith as defined in § 90. If the indorsee knows that his indorser is bound not to negotiate the bill, or that the acceptor has already paid it, he is not in good faith in taking it.

(5.) He has or is deemed to have given value for it, vide § 27 (2). The value may be any valuable consideration as defined by § 27, but need not be full value, Jones v. Gordon, 2 Appeal Cases, 616, 632. If the value is a debt for which the holder has a lien, he is only a holder for value to the extent of the debt, vide § 27 (3).

(6.) And has no notice of defect in the title of his indorser. Defect in title is defined in subsection (2), and does not include a title derived through a forged or unauthorised signature. Where a signature has been forged or adhibited without authority, no one can be a holder in due course, vide § 24. Section 60 only protects the banker upon whom a bill payable on demand is drawn. It is not necessary that the holder have notice of

the particular defect in title. If a man knowing that a bill is in the hands of a person who had no right to it, should happen to think that he has stolen it, when he has obtained it by false pretences, in such a case he takes it at his peril, Jones v. Gordon, 2 Appeal Cases, 616, 628.

(b.) Vide § 2.

(c.) Vide $ 31-38.

(d.) Fraud is a machination or contrivance to deceive, and obligations induced by it are voidable. There is in such obligations apparently consent and engagement, but not such as the party defrauding is allowed to rely on, Bell's Prin. 13. The fraud may consist in misrepresentation or in concealment of material circumstances. Thus in Smith v. Bank of Scotland, 14th January, 1829, 7 Sh. 244, the directors of a bank who were suspicious of the solvency of one of their agents, demanded additional security on the ground that some of his cautioners were dead, and concealed from the new surety, who was bound for past as well as future transactions, the real ground of their dissatisfaction. It was held that the bank having concealed material facts from the knowledge of the surety, which ought to have been communicated to him, could not enforce the bond. Fraud may also consist in the taking advantage of the intoxication of the granter, Couston v. Miller, 26th February, 1862, 24 D. 607; or of his imbecility, Home v. Hardy, 30th March, 1842, 4 D. 1184.

(e.) By the law of Scotland duress or force and fear annulled a contract even in a question with a holder in due course, but this clause assimilates the law of Scotland and that of England, so far as bills are concerned. The force and fear must be such as to overpower a mind of ordinary firmness, or such as, applied to a person of weaker age, sex, or condition, will produce the effect of overpowering violence on a firmer mind, Gelot v. Stewart, 4th March, 1870, 8 M. 649.

(f.) E.g., by theft.

(7.) Vide § 27, note (a).

(h.) A bill is negotiated in breach of faith, where it is.

$ 29.

$29.

Presumption of value and good faith.

placed in the hands of a person as trustee who delivers to a third party without authority, Thomson v. M'Lauchline, 18th November, 1823, 2 Sh. 497.

(i.) Vide § 2.

(j.) Vide §§ 20, 21 (2), 38, 54 (2), 55 (1 b), 55 (2 b), 56, 64, 88 (2).

30. (1.) Every party whose signature (a) appears on a bill is prima facie deemed to have become a party thereto for value (b).

(2.) Every holder (c) of a bill is primâ facie deemed to be a holder in due course (d); but if in an action (e) on a bill it is admitted or proved that the acceptance issue (c), or subsequent negotiation (e), of the bill is affected with fraud, duress, or force and fear, or illegality (ƒ) the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value (b) has in good faith (g) been given for the bill (h).

(a.) Vide §§ 3, 17, 20, 91.

(b.) Vide § 27. Value received, where drawer and payee are different, means value received from payee by drawer; where a bill is payable to drawer's order, it means that it is received from drawer by drawee. This presumption may be overcome by parole evidence, vide § 100.

(c.) Vide § 2.

(d.) Vide § 29. This presumption may be overcome by parole evidence, vide § 100.

(e.) Vide § 31-37.

(f.) Vide § 29.

(g.) Vide § 90.

(h.) This subsection comes in place of 19 & 20 Vict. cap.

$ 30.

If the holder prove

60, § 15, which is repealed by this Act.
that he gave value in good faith for the bill, it will be pre-
sumed that he took the bill before it was overdue, and
without notice of dishonour or of defect in the title of the
person who negotiated it.

Negotiation of Bills.

of bills.

31. (1.) A bill is negotiated when it is transferred Negotiation from one person (a) to another in such a manner as to constitute the transferee the holder (a) of the bill. (2.) A bill payable to bearer (b) is negotiated by delivery (c).

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

(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 endorsement of the transferor (d).

(5.) Where any person is under the obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to negative personal liability.

(a.) Vide § 2.

(b.) Vide § 8 (3), § 2. A bill payable to bearer may be negotiated by or on behalf of the owner of it, but it may also be negotiated by a person having no title to it, as a finder, or a thief, or a person who has obtained it by fraud or violence, and the person who takes it from a person having no title to it becomes the holder of it, and if he takes it under the conditions specified in § 29, he becomes a holder in due course, whose rights are defined in § 38.