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CH. XVI. s. 2. S. 17.-(1) The acceptance of a bill is the signification by the Bills of

drawee of his assent to the order of the drawer. Exchange (Act of 1882). (2) An acceptance is invalid unless it complies with the followDefinition and ing conditions, namely: requisites of

(a) It must be written on the bill and be signed by the drawee. acceptance.

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. Inchoate in

S. 20.-(1) Where a simple signature on a blank stamped paper struments.

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. Delivery. 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.

Bills of liable to him is conclusively presumed.

Exchange. (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.

essential to

Capacity and Authority of Parties. S. 22.-(1) Capacity to incur liability as a party to a bill is Capacity of

parties. co-extensive with capacity to contract. Provided that nothing in this section shall enable a corporation (See Chaps.

VII., VIII., to make itself liable as drawer, acceptor, or indorser of a bill unless ix.] it is competent to it so to do under the law for the time being in force relating to corporations.

(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

liability. (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. S. 24. Subject to the provisions of this Act, where a signature on Forged or

unauthorised 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

signatures. 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 of such joint maker, was held by Lord Russell, C.J., following Foster v. Mackinnon, as not being affected by the Bills of Exchange Act, 1882, not to be liable to a payee for value.

(j) See Vagliano v. Bank of England (1889), 23 Q. B. D. 243, C. A.

CH. XVI. s. 2. bound by such signature if the agent in so signing was acting

Bills of within the actual limits of his authority. Exchange (Act of 1882). S. 26.-(1) Where a person signs a bill as drawer, indorser, or Person sign

acceptor, and adds words to his signature, indicating that he signs ing as agent for or on behalf of a principal, or in a representative character, he or in representative

is not personally liable thereon; but the mere addition to his capacity. signature of words describing him as an agent, or as filling &

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. Value and S. 27.-(1) Valuable consideration for a bill may be constituted holder for value. by,

(a) Any consideration sufficient to support a simple contract;
(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 (k). Accommoda- S. 28.-(1) An accommodation party to a bill is a person who tion bill or party.

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.

Holder in due course.

(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 CH. XVI. s. 2.

Bills of at the time the bill was negotiated to him he had no notice

Exchange. 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. S. 30.-(1) Every party whose signature appears on a bill is Presumption

of value and primâ facie deemed to have become a party thereto for value.

good faith. (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. S. 53.-(1) A bill, of itself, does not operate as an assignment Funds in

hands of of funds in the hands of the drawee available for the payment drawec. 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
against a banker for dishonouring it;
Schroeder v. Central Bank of London
(1876), 34 L. T. 735 ; In the matter of
Brown (1843), 2 Story, U. S. Reps. 519.

In regard to cheques, the very important result follows that, although the drawer may mean to transfer his whole balance to a payee, yet if he overdraw by however slight an amount the banker may dishonour the cheque ; e.g., if A. owes B. 95l, and gives him a cheque for that amount in payment, yet if A.'s balance at the bank be only 941., the banker is not only not A.'s agent to satisfy B.'s claim as far as A.'s funds will go, but is justified in disregarding B.'s claim altogether.

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CH. XVI. s. 2. (2) In Scotland, where the drawee of a bill has in his hands

Bills of funds available for the payment thereof, the bill operates as an Exchange (Act of 1882). 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. Liability of S. 54. The acceptor of a bill, by accepting it,acceptor.

(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 :
(a) The existence of the drawer, the genuineness of his signa-

ture, and his capacity and authority to draw the bill:
(b) In the case of a bill payable to drawer's order, the then capa-

city of the drawer to indorse, but not the genuineness or

validity of his indorsement : (c) In the case of a bill payable to the order of a third person,

the existence of the payee and his then capacity to indorse, but not the genuineness or validity of his indorse

ment. Liability of S. 55.-(1) The drawer of a bill by drawing itdrawer or indorser.

(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 proceed-

ings 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.
Stranger S. 56. Where a person signs a bill otherwise than as drawer
signing bill
liable as in.

or acceptor, he thereby incurs the liabilities of an indorser to dorser. a holder in due course (p).

(v) 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.

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