CH. XVI. s. 2. Bills of Exchange (Act of 1882). S. 17.—(1) The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. (2) An acceptance is invalid unless it complies with the followDefinition and ing conditions, namely: requisites of acceptance. Inchoate instruments. Delivery. (a) It must be written on the bill and be signed by the drawee. The mere signature of the drawee without additional words is sufficient. (b) It must not express that the drawee will perform his promise by any other means than the payment of money. S. 20. (1) Where a simple signature on a blank stamped paper is delivered by the signer in order that it may be converted into a bill, it operates as a primâ facie authority to fill up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an indorser; and, in like manner, when a bill is wanting in any material particular, the person in possession of it has a primâ facie authority to fill up the omission in any way he thinks fit. (2) In order that any such instrument when completed may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given. Reasonable time for this purpose is a question of fact. Provided that if any such instrument after completion is negotiated to a holder in due course it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given. S. 21. (1) Every contract on a bill, whether it be the drawer's, the acceptor's, or an indorser's, is incomplete and revocable, until delivery of the instrument in order to give effect thereto. Provided that where an acceptance is written on a bill, and the drawee gives notice to or according to the directions of the person entitled to the bill that he has accepted it, the acceptance then becomes complete and irrevocable. (2) As between immediate parties, and as regards a remote party other than a holder in due course, the delivery— (a) in order to be effectual must be made either by or under the authority of the party drawing, accepting, or indorsing, as the case may be: (b) may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the bill. But if the bill be in the hands of a holder in due course a valid delivery of the bill by all parties prior to him so as to make them CH. XVI. s. 2. liable to him is conclusively presumed. (3) Where a bill is no longer in the possession of a party who has signed it as drawer, acceptor, or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved. Capacity and Authority of Parties. Bills of Exchange. S. 22.-(1) Capacity to incur liability as a party to a bill is Capacity of co-extensive with capacity to contract. Provided that nothing in this section shall enable a corporation to make itself liable as drawer, acceptor, or indorser of a bill unless it is competent to it so to do under the law for the time being in force relating to corporations. parties. [See Chaps. VII., VIII., IX.]' (2) Where a bill is drawn or indorsed by an infant, minor, or corporation having no capacity or power to incur liability on a bill, the drawing or indorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto. S. 23. No person is liable as drawer, indorser, or acceptor of a Signature bill who has not signed it as such (i). Provided that (1) Where a person signs a bill in a trade or assumed name, he is liable thereon as if he had signed it in his own name : (2) The signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm. essential to liability. unauthorised S. 24. Subject to the provisions of this Act, where a signature on Forged or a bill is forged or placed thereon without the authority of the person signature. 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 (j). Provided that nothing in this section shall affect the ratification of an unauthorised signature not amounting to a forgery. S. 25. A signature by procuration operates as notice that the Procuration agent has but a limited authority to sign, and the principal is only (i) In Foster v. Mackinnon (1869), L. R., 4 C. P. 704, an old man of feeble sight signing without negligence a document not believed by him to be a bill was held not liable thereon; and in Lewis v. Clay (1898), 67 L. J., Q. B. 224, a joint maker of a note, fraudulently induced by the other joint maker to sign it in the belief (without negligence) that he was merely witnessing the signature (j) See Vagliano v. Bank of England signatures. CH. XVI. s. 2. Person signing as agent or in representative capacity. Value and holder for value. Accommodation bill or party. Holder in due course. bound by such signature if the agent in so signing was acting within the actual limits of his authority. S. 26. (1) Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal, or in a representative character, 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. S. 27.-(1) Valuable consideration for a bill may be constituted by, (a) Any consideration sufficient to support a simple contract ; (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 (k). S. 28. (1) An accommodation party to a bill is a person who has 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 the bill, he knew such party to be an accommodation party or not. S. 29.-(1) A holder in due course (1) 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: (k) As to lien of solicitor for unpaid costs, see Redfern v. Rosenthal (1901), 85 L. T. 313. (1) The payee of a promissory note is not a holder in due course within this section, not being a person to whom, after its completion by and as between the immediate parties, the note has been negotiated: Lewis v. Clay (1898), 67 L. J., Q. B. 224. (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 (m), 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. CH. XVI. 8. 2. S. 30. (1) Every party whose signature appears on a bill is Presumption prima facie deemed to have become a party thereto for value. (2) Every holder of a bill is primâ 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 (n). [Sects. 31-38 relate to Negotiations of Bills; sects. 39-52 relate to General Duties of the Holder.] Liabilities of Parties. of value and good faith. hands of drawec. S. 53. (1) A bill, of itself, does not operate as an assignment Funds in of funds in the hands of the drawee available for the payment thereof (0), and the drawee of a bill who does not accept as required by this Act is not liable on the instrument. This sub-section shall not extend to Scotland. (m) But it has been held that in an action on a bill evidence of a contemporaneous oral agreement to renew if the drawer should be unable to meet it at maturity is inadmissible on the ground that parol evidence cannot be admitted to contradict a written document (as to which see p. 105, ante); New London Credit Syndicate v. Neale, [1898] 2 Q. B. 487, C. A. (n) When fraud is proved, the burden of proof is on the holder to prove both that value has been given and that it has been given in good faith without notice of the fraud. Tatam v. Haslar (1889), 23 Q. B. D. 345. (0) See Hopkinson v. Forster (1874), L. R., 19 Eq. 74, in which it was held that the payee of a cheque had no remedy In regard to cheques, the very im- CH. XVI. s. 2. Bills of Exchange (Act of 1882). Liability of acceptor. Liability of drawer or indorser. Stranger signing bill liable as indorser. (2) In Scotland, where the drawee of a bill has in his hands funds available for the payment thereof, the bill operates as an assignment of the sum for which it is drawn in favour of the holder, from the time when the bill is presented to the drawee. S. 54. The acceptor of a bill, by accepting it, (1) Engages that he will pay it according to the tenor of his acceptance: (2) Is precluded from denying to a holder in due course : (c) In the case of a bill payable to the order of a third person, ment. S. 55. (1) The drawer of a bill by drawing it (a) Engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonoured he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken : (b) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse. (2) The indorser of a bill by indorsing it— (a) Engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonoured he will compensate the holder or a subsequent indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken; (b) Is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer's signature and all previous indorsements; (c) Is precluded from denying to his immediate or a subsequent indorsee that the bill was at the time of his indorsement a valid and subsisting bill, and that he had then a good title thereto. S. 56. Where a person signs a bill otherwise than as drawer or acceptor, he thereby incurs the liabilities of an indorser to a holder in due course (p). (p) The Act has not altered the law as laid down by the House of Lords in Steele v. McKinlay (1880), 5 App. Cas. 754 ; Jenkins v. Coomber (1898), 78 L. T. 752. |