test of bill.

51.-(1.) Where an inland bill has been dishonoured it may, Noting of proif the holder think fit, be noted for non-acceptance or nonpayment, as the case may be; but it shall not be necessary to note or protest any such bill in order to preserve the recourse against the drawer or indorser.

(2.) Where a foreign bill, appearing on the face of it to be such, has been dishonoured by non-acceptance, it must be duly protested for non-acceptance, and where such a bill, which has not been previously dishonoured by non-acceptance, is dishonoured by non-payment it must be duly protested for nonpayment. If it be not so protested the drawer and indorsers are discharged. Where a bill does not appear on the face of it to be a foreign bill, protest thereof in case of dishonour is unnecessary. (3.) A bill which has been protested for non-acceptance may be subsequently protested for non-payment.

(4.) Subject to the provisions of this Act, when a bill is noted or protested, it must be noted on the day of its dishonour. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.

(5.) Where the acceptor of a bill becomes bankrupt or insolvent or suspends payment before it matures, the holder may cause the bill to be protested for better security against the drawer and indorsers.

(6.) A bill must be protested at the place where it is dis-
honoured: Provided that—
(a.) When a bill is presented through the post-office, and

returned by post dishonoured, it may be protested at the
place to which it is returned and on the day of its return
if received during business hours, and if not received
during business hours, then not later than the next
business day :

(b.) When a bill drawn payable at the place of business
or residence of some person other than the drawee, has
been dishonoured by non-acceptance, it must be pro-
tested for non-payment at the place where it is expressed
to be payable, and no further presentment for payment
to, or demand on, the drawee is necessary.

(7.) A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify—

(a.) The person at whose request the bill is protested:
(b.) The place and date of protest, the cause or reason for pro-

testing the bill, the demand made, and the answer given,

if any, or the fact that the drawee or acceptor could not
be found.

(8.) Where a bill is lost or destroyed, or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof.

Duties of holder as regards drawee or acceptor.

Funds in hands of drawee.

Liability of acceptor.

(9.) Protest is dispensed with by any circumstance which would dispense with notice of dishonour. Delay in noting or protesting is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate the bill must be noted or protested with reasonable diligence.

52. (1.) When a bill is accepted generally, presentment for payment is not necessary in order to render the acceptor liable.

(2.) When by the terms of a qualified acceptance presentment for payment is required, the acceptor, in the absence of an express stipulation to that effect, is not discharged by the omission to present the bill for payment on the day that it matures.

(3.) In order to render the acceptor of a bill liable it is not necessary to protest it, or that notice of dishonour should be given to him.

(4.) Where the holder of a bill presents it for payment, he shall exhibit the bill to the person from whom he demands payment, and when a bill is paid the holder shall forthwith deliver it up to the party paying it.

Liabilities of Parties.

53. (1.) A bill, of itself, does not operate as an assigment of funds in the hands of the drawee available for the payment thereof, 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.

(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. 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 :
(a.) The existence of the drawer, the genuineness of his
signature, and his capacity and authority to draw
the bill;

(b.) In the case of a bill payable to drawer's order, the then
capacity 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 indorsement.

Liability of

dorser.

55. (1.) The drawer of a bill by drawing it(a.) Engages that on due presentment it shall be accepted drawer or inand 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, pro-
vided 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 subse-
quent indorsee that the bill was at the time of his in-
dorsement a valid and subsisting bill, and that he had
then a good title thereto.

56. Where a person signs a bill otherwise than as drawer or Stranger signacceptor, he thereby incurs the liabilities of an indorser to a

holder in due course.

ing bill.

damages

bill.

57. Where a bill is dishonoured, the measure of damages, which Measure of shall be deemed to be liquidated damages, shall be as follows: against parties (1.) The holder may recover from any party liable on the to dishonoured bill, and the drawer who has been compelled to pay the bill may recover from the acceptor, and an indorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior indorser

(a.) The amount of the bill:

(b.) Interest thereon from the time of presentment for pay-
ment if the bill is payable on demand, and from the
maturity of the bill in any other case:

(c.) The expenses of noting, or, when protest is necessary,
and the protest has been extended, the expenses of
protest.

(2.) In the case of a bill which has been dishonoured abroad,
in lieu of the above damages, the holder may recover
from the drawer or an indorser, and the drawer or an
indorser who has been compelled to pay the bill may
recover from any party liable to him, the amount of
the re-exchange with interest thereon until the time of
payment.

Transfer by delivery.

Payment in due

course

Banker paying demand draft whereon indorsement is forged.

Acceptor the holder at maturity.

(3.) Where by this Act interest may be recovered as damages such interest may, if justice require it, be withheld wholly or in part, and where a bill is expressed to be payable with interest at a given rate, interest as damages may or may not be given at the same rate as interest proper.

58.-(1.) Where the holder of a bill payable to bearer negotiates it by delivery without indorsing it, he is called a "transferor by delivery.'

(2.) A transferor by delivery is not liable on the instrument. (3.) A transferor by delivery who negotiates a bill thereby warrants to his immediate transferee being a holder for value that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless.

Discharge of Bill.

59.—(1.) A bill is discharged by payment in due course by or on behalf of the drawee or acceptor.

"Payment in due course" means payment made at or after the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective.

(2.) Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged; but (a.) Where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not re-issue the bill. (b.) Where a bill is paid by an indorser, or where a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent indorsements, and again negotiate the bill.

(3.) Where an accommodation bill is paid in due course by the party accommodated the bill is discharged.

60. When a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority.

61. When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged.

62.-(1.) When the holder of a bill at or after its maturity Express absolutely and unconditionally renounces his rights against the waiver. acceptor, the bill is discharged.

The renunciation must be in writing, unless the bill is delivered up to the acceptor.

(2.) The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity; but nothing in this section shall affect the rights of a holder in due course without notice of the renunciation.

63.—(1.) Where a bill is intentionally cancelled by the holder Cancellation. or his agent, and the cancellation is apparent thereon, the bill is discharged.

(2.) In like manner any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged.

(3.) A cancellation made unintentionally, or under a mistake, or without the authority of the holder is inoperative; but where a bill or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority.

bill.

64.-(1.) Where a bill or acceptance is materially altered Alteration of without the assent of all parties liable on the bill, the bill is avoided except as against a party who has himself made, authorised, or assented to the alteration, and subsequent indorsers. Provided that,

Where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenor.

(2.) In particular the following alterations are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor's assent.

Acceptance and Payment for Honour.

honour suprà

protest.

65. (1.) Where a bill of exchange has been protested for Acceptance for dishonour by non-acceptance, or protested for better security, and is not overdue, any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill suprà protest, for the honour of any party liable thereon, or for the honour of the person for whose account the bill is drawn.