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Negotiation of bill to party already liable

thereon

Rights of the holder

When presentment for acceptance is necessary

Time for pre

Bills of Exchange

the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact.

(4) Except where an indorsement bears date after the maturity of the bill, every negotiation is prima facie deemed to have been effected before the bill was overdue.

(5) Where a bill which is not overdue has been dishonoured, any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of dishonour, but nothing in this sub-section shall affect the rights of a holder in due

course.

38. Where a bill is negotiated back to the drawer, or to a prior indorser, or to the acceptor, such party may, subject to the provisions of this Act, re-issue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable.

39. The rights and powers of the holder of a bill are as follows:

(1) He may sue on the bill in his own name:

(2) Where he is a holder in due course, he holds the bill free from any defect of title of prior parties, as well as from mere personal defences available to prior parties among themselves, and may enforce payment against all parties liable on the bill:

(8) Where his title is defective, (a) if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and (b) if he obtains payment of the bill, the person who pays him in due course gets a valid discharge for the bill.

GENERAL DUTIES OF THE HOLDER

40. (1) Where a bill is payable after sight, presentment for acceptance is necessary, in order to fix the maturity of the instrument.

(2) Where a bill expressly stipulates that it shall be presented for acceptance, or where a bill is drawn payable elsewhere than at the residence or place of business of the drawee, it must be presented for acceptance before it can be presented for payment.

(3) In no other case is presentment for acceptance necessary in order to render liable any party to the bill.

(4) Where the holder of a bill drawn payable elsewhere than at the place of business or residence of the drawee has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused and does not discharge the drawer and indorsers.

41. (1) Subject to the provisions of this Act, when a bill payable senting bill pay after sight is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time.

able after sight

Bills of Exchange

(2) If he do not do so, the drawer and all indorsers prior to that holder are discharged.

(3) In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case.

42. (1) A bill is duly presented for acceptance which is presented in accordance with the following rules:

(a) The presentment must be made by or on behalf of
the holder to the drawee, or to some person autho-
rised to accept or refuse acceptance on his behalf, at
a reasonable hour on a business day, and before
the bill is overdue.

(b) Where a bill is addressed to two or more drawees, who
are not partners, presentment must be made to
them all, unless one has authority to accept for all,
then presentment may be made to him only.
(c) Where the drawee is dead, presentment may be made
to his personal representative.

(d) Where the drawee is bankrupt, presentment may be
made to him or to his trustee.

(e) Where authorised by agreement or usage, a present-
ment through the post office is sufficient.

(2) Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non-acceptance

(a) Where the drawee is dead or insolvent, or is a ficti-
tious person, or a person not having capacity to
contract by bill;

(b) Where, after the exercise of reasonable diligence, such
presentment cannot be effected;

(c) Where, although the presentment has been irregular,
acceptance has been refused on some other ground.

(3) The fact that the holder has reason to believe that the bill,

on presentment, will be dishonoured, does not excuse presentment.

Rules as to pre

sentment for acceptance and

excuses for non

presentment

43. When a bill is duly presented for acceptance, and is not Non-acceptance accepted within the customary time, the person presenting it must treat it as dishonoured by non-acceptance. If he do not, the holder shall lose his right of recourse against the drawer and indorsers.

44. (1) A bill is dishonoured by non-acceptance

(a) When it is duly presented for acceptance, and such an
acceptance as is prescribed by this Act is refused
or cannot be obtained; or

(b) When presentment for acceptance is excused and the
bill is not accepted.

(2) Subject to the provisions of this Act, when a bill is dishonoured by non-acceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder, and no presentment for payment is necessary.

Dishonour by non-acceptance,

and its consequences

[graphic]

45. (1) The holder of a bill may refuse to take a qualified accept- Duties as to

Bills of Exchange

qualified acceptance, and if he does not obtain an unqualified acceptance may treat the bill as dishonoured by non-acceptance.

ances

Rules as to presentment for

payment

(2) Where a qualified acceptance is taken, and the drawer or an indorser has not expressly or impliedly authorised the holder to take a qualified acceptance, or does not subsequently assent thereto, such drawer or indorser is discharged from his liability on the bill. The provisions of this sub-section do not apply to a partial acceptance whereof due notice has been given. Where a foreign bill has been accepted as to part, it must be protested as to the balance.

(3) When the drawer or indorser of a bill receives notice of a qualified acceptance, and does not within a reasonable time express his dissent to the holder, he shall be deemed to have assented thereto.

46. Subject to the provisions of this Act, a bill must be duly presented for payment. If it be not so presented the drawer and indorsers shall be discharged.

A bill is duly presented for payment, which is presented in accordance with the following rules :

(1) Where the bill is not payable on demand, presentment must be made on the day it falls due.

(2) Where the bill is payable on demand, then, subject to the provisions of this Act, presentment must be made within a reasonable time after its issue in order to render the drawer liable, and within a reasonable time after its indorsement in order to render the indorser liable.

In determining what is a reasonable time, regard shall be had to the nature of the bill, the usage of trade with regard to similar bills, and the facts of the particular case.

(3) Presentment must be made by the holder or by some person authorised to receive payment on his behalf at a reasonable hour on a business day, at the proper place as hereinafter defined, either to the person designated by the bill as payer, or to some person authorised to pay or refuse payment on his behalf, if with the exercise of reasonable diligence such person can there be found.

(4) A bill is presented at the proper place—

(a) Where a place of payment is specified in the bill and the bill is there presented.

(b) Where no place of payment is specified, but the address of the drawee or acceptor is given in the bill, and the bill is there presented.

(c) Where no place of payment is specified and no address given and the bill is presented at the drawee's or acceptor's place of business, if known, and if not, at his ordinary residence if known.

Bills of Exchange

(d) In any other case if presented to the drawee or
acceptor, wherever he can be found, or if presented
at his last known place of business or residence.
(5) Where a bill is presented at the proper place, and after
the exercise of reasonable diligence no person authorised
to pay or refuse payment can be found there, no further
presentment to the drawee or acceptor is required.

(6) Where a bill is drawn upon, or accepted by two or more
persons who are not partners, and no place of pay-
ment is specified, presentment must be made to them
all.

(7) Where the drawee or acceptor of a bill is dead, and no
place of payment is specified, presentment must be
made to a personal representative, if such there be,
and with the exercise of reasonable diligence he can be
found.

(8) Where authorised by agreement or usage, a presentment
through the post office is sufficient.

47. (1) Delay in making presentment for payment 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, presentment must be made with reasonable diligence.

(2) Presentment for payment is dispensed with

(a) Where, after the exercise of reasonable diligence, pre-
sentment as required by this Act cannot be effected.
The fact that the holder has reason to believe that the bill
will on presentment be dishonoured, does not dis-
pense with the necessity for presentment.

(b) Where the drawee is a fictitious person.

(c) As regards the drawer, where the drawee or acceptor
is not bound, as between himself and the drawer,
to accept or pay the bill, and the drawer has no
reason to believe that the bill would be paid if pre-
sented.

(d) As regards an indorser, where the bill was accepted
or made for the accommodation of that indorser,
and he has no reason to expect that the bill would
be paid if presented.

(e) By waiver of presentment, express or implied.

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48. (1) A bill is dishonoured by non-payment (a) when it is duly Dishonour by presented for payment and payment is refused or cannot be ob- non-payment tained, or (b) when presentment is excused and the bill is overdue and

unpaid.

(2) Subject to the provisions of this Act, when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer and indorsers accrues to the holder.

49. Subject to the provisions of this Act, when a bill has been Notice of disdishonoured by non-acceptance or by non-payment, notice of dishonour

[graphic]

honour and effect of non-notice

Rules as to notice

of dishonour

Bills of Exchange

must be given to the drawer and each indorser, and any drawer or indorser to whom such notice is not given is discharged: Provided that

(1) Where a bill is dishonoured by non-acceptance, and notice of dishonour is not given, the rights of a holder in due course subsequent to the omission shall not be prejudiced by the omission.

(2) Where a bill is dishonoured by non-acceptance, and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment unless the bill shall in the meantime have been accepted. 50. Notice of dishonour, in order to be valid and effectual, must be given in accordance with the following rules:

(1) The notice must be given by or on behalf of the holder, or by or on behalf of an indorser, who at the time of giving it is himself liable on the bill.

(2) Notice of dishonour may be given by an agent, either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not.

(8) Where the notice is given by or on behalf of the holder, it inures for the benefit of all subsequent holders and all prior indorsers who have a right of recourse against the party to whom it is given.

(4) Where notice is given by or on behalf of an indorser entitled to give notice as hereinbefore provided, it inures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given.

(5) The notice may be given in writing or by personal communication, and may be given in any terms which sufficiently identify the bill, and intimate that the bill has been dishonoured by non-acceptance or nonpayment.

(6) The return of a dishonoured bill to the drawer or an indorser is in point of form deemed a sufficient notice of dishonour.

(7) A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A misdescription of the bill shall not vitiate the notice unless the party to whom the notice is given is in fact misled thereby.

(8) Where notice of dishonour is required to be given to any person it may be given either to the party himself or to his agent in that behalf.

(9) Where the drawer or indorser is dead, and the party giving notice knows it, the notice must be given to a personal representative if such there be, and with the exercise of reasonable diligence he can be found.

(10) Where the drawer or indorser is insolvent, notice may be given either to the party himself or to the trustee.

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