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 dishonored, he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonor 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 dishonored, he will compensate the holder or a subsequent indorser who is compelled to pay it, provided that the requisite proceedings on dishonor 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.

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.

57. Where a bill is dishonored, the measure of damages, which shall be deemed to be liquidated damages, shall be as follows:

(1.) The holder may recover from any party liable on the 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 payment 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.

Liability of drawer or

indorser.

Stranger signing bill liable as indorser.

Measure of damages against parties to dishonored

bill.

Transferor by delivery and transferee.

Payment in due course.

(2.) In the case of a bill which has been dishonored 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.

(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.

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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.

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'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 reissue 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.

payee

dorsement is

60. When a bill payable to order on demand is drawn on a Banker paying banker, and the banker on whom it is drawn pays the bill in demand draft good faith and in the ordinary course of business, it is not in- whereon incumbent on the banker to show that the indorsement of the 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.

forged.

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

62. (1.) When the holder of a bill at or after its maturity Express waiver. absolutely and unconditionally renounces his rights against the 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 hol- Cancellation. der 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.

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 bill. 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.

Acceptance for honor suprà

protest.

Liability of acceptor for honor.

Presentment to acceptor for honor.

(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 Honor.

65. (1.) Where a bill of exchange has been protested for dishonor 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 honor of any party liable thereon, or for the honor of the person for whose account the bill is drawn.

(2.) A bill may be accepted for honor for part only of the sum for which it is drawn.

(3.) An acceptance for honor suprà protest in order to be valid must

(a.) be written on the bill, and indicate that it is an acceptance for honor:

(b.) be signed by the acceptor for honor.

(4.) Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer.

(5.) Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for nonacceptance, and not from the date of the acceptance for honor.

66. (1.) The acceptor for honor of a bill by excepting it engages that he will, on due presentment, pay the bill according to the tenor of his acceptance, if it is not paid by the drawee, provided it has been duly presented for payment, and protested for non-payment, and that he receives notice of these facts.

(2.) The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted.

67. (1.) Where a dishonored bill has been accepted for honor suprà protest, or contains a reference in case of need, it must be protested for non-payment, before it is presented for payment to the acceptor for honor, or referee in case of need.

(2.) Where the address of the acceptor for honor is in the same place where the bill is protested for non-payment, the bill must be presented to him not later than the day following its maturity; and where the address of the acceptor for honor is in some place other than the place where it was protested for

non-payment, the bill must be forwarded not later than the day following its maturity for presentment to him.

(3.) Delay in presentment or non-presentment is excused by any circumstance which would excuse delay in presentment for payment or non-presentment for payment.

(4.) When a bill of exchange is dishonored by the acceptor for honor it must be protested for non-payment by him.

68. (1.) Where a bill has been protested for non-payment, Payment for any person may intervene and pay it suprà protest for the honor suprà honor of any party liable thereon, or for the honor of the protest. person for whose account the bill is drawn.

(2.) Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will discharge most parties, to the bill shall have the preference.

(3.) Payment for honor suprà protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honor which may be appended to the pro

test or form an extension of it.

(4.) The notarial act of honor must be founded on a declaration made by the payer for honor, or his agent in that behalf, declaring his intention to pay the bill for honor, and for whose honor he pays.

(5.) Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged, but the payer for honor is subrogated for, and succeeds to both the rights and duties of, the holder as regards the party for whose honor he pays, and all parties liable to that party.

(6.) The payer for honor on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor is entitled to receive both the bill itself and the protest. If the holder do not on demand deliver them up, he shall be liable to the payer for honor in damages.

(7.) Where the holder of a bill refuses to receive payment suprà protest, he shall lose his right of recourse against any party who would have been discharged by such payment.

Lost Instruments.

69. Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer if required to indemnify him against all persons whatever in case the bill alleged to have been lost shall be found

Holder's right to duplicate of lost bill.