PART IIBills of Exchange (continued)
Capacity and Authority of Parties (continued)
Marginal note:Recovery of amount paid on forged endorsement
49 (1) Where a bill bearing a forged or an unauthorized endorsement is paid in good faith and in the ordinary course of business by or on behalf of the drawee or acceptor, the person by whom or on whose behalf the payment is made has the right to recover the amount paid from the person to whom it was paid or from any endorser who has endorsed the bill subsequent to the forged or unauthorized endorsement if notice of the endorsement being a forged or an unauthorized endorsement is given to each such subsequent endorser within the time and in the manner mentioned in this section.
Marginal note:Rights against prior endorsers
(2) Any person or endorser from whom an amount has been recovered under subsection (1) has the like right of recovery against any prior endorser subsequent to the forged or unauthorized endorsement.
Marginal note:Notice of forgery
(3) The notice referred to in subsection (1) shall be given within a reasonable time after the person seeking to recover the amount has acquired notice that the endorsement is forged or unauthorized, and may be given in the same manner, and if sent by post may be addressed in the same way as notice of protest or dishonour of a bill may be given or addressed under this Act.
- R.S., c. B-5, s. 50
Marginal note:Procuration signatures
50 A signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is bound by such signature only if the agent in so signing was acting within the actual limits of his authority.
- R.S., c. B-5, s. 51
Marginal note:Signing in representative capacity
51 (1) Where a person signs a bill as drawer, endorser or acceptor and adds words to his signature indicating that he has signed 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.
Marginal note:Rule for determining capacity
(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.
- R.S., c. B-5, s. 52
Marginal note:Valuable consideration
52 (1) Valuable consideration for a bill may be constituted by
(a) any consideration sufficient to support a simple contract; or
(b) an antecedent debt or liability.
Marginal note:Form of bill
(2) An antecedent debt or liability is deemed valuable consideration, whether the bill is payable on demand or at a future time.
- R.S., c. B-5, s. 53
Marginal note:Holder for value
53 (1) 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 that time.
Marginal note:In case of lien
(2) 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.
- R.S., c. B-5, s. 54
Marginal note:Accommodation bill
54 (1) An accommodation party to a bill is a person who has signed a bill as drawer, acceptor or endorser, without receiving value therefor, and for the purpose of lending his name to some other person.
Marginal note:Liability of party
(2) An accommodation party is liable on a bill to a holder for value, and it is immaterial whether, when that holder took the bill, he knew that party to be an accommodation party or not.
- R.S., c. B-5, s. 55
Holder in Due Course
Marginal note:Holder in due course
55 (1) A holder in due course 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; and
(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.
Marginal note:Title defective
(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, or under such circumstances as amount to a fraud.
- R.S., c. B-5, s. 56
Marginal note:Right of subsequent holder
56 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.
- R.S., c. B-5, s. 57
Marginal note:Presumption of value
57 (1) Every party whose signature appears on a bill is, in the absence of evidence to the contrary, deemed to have become a party thereto for value.
Marginal note:Presumed holder in due course
(2) Every holder of a bill is, in the absence of evidence to the contrary, 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 that he is the holder in due course is on him, unless and until he proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill by some other holder in due course.
- R.S., c. B-5, s. 58
Marginal note:Usurious consideration
58 No bill, although given for a usurious consideration or on a usurious contract, is void in the hands of a holder, unless the holder had at the time of its transfer to him actual knowledge that it was originally given for a usurious consideration or on a usurious contract.
- R.S., c. B-5, s. 59
Marginal note:By transfer
59 (1) A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill.
Marginal note:By delivery
(2) A bill payable to bearer is negotiated by delivery.
Marginal note:By endorsement
(3) A bill payable to order is negotiated by the endorsement of the holder.
- R.S., c. B-5, s. 60
Marginal note:Without endorsement
60 (1) Where the holder of a bill payable to his order transfers it for value without endorsing it, the transfer gives the transferee such title as the transferor had in the bill, and the transferee in addition acquires the right to have the endorsement of the transferor.
Marginal note:Representative capacity
(2) Where any person is under obligation to endorse a bill in a representative capacity, he may endorse the bill in such terms as to negative personal liability.
- R.S., c. B-5, s. 61
61 (1) An endorsement in order to operate as a negotiation must be
(a) written on the bill itself and be signed by the endorser; and
(b) an endorsement of the entire bill.
(2) An endorsement written on an allonge, or on a copy of a bill issued or negotiated in a country where copies are recognized, is deemed to be written on the bill itself.
Marginal note:Partial endorsement
(3) A partial endorsement, that is to say, an endorsement that purports to transfer to the endorsee a part only of the amount payable, or that purports to transfer the bill to two or more endorsees severally, does not operate as a negotiation of the bill.
- R.S., c. B-5, s. 62
Marginal note:Signature sufficient
62 (1) The simple signature of the endorser on a bill, without additional words, is a sufficient endorsement.
Marginal note:Two or more payees
(2) Where a bill is payable to the order of two or more payees or endorsees who are not partners, all must endorse, unless the one endorsing has authority to endorse for the others.
- R.S., c. B-5, s. 63
Marginal note:Misspelling payee’s name
63 Where, in a bill payable to order, the payee or endorsee is wrongly designated or his name is misspelt, he may endorse the bill as therein described, adding his proper signature, or he may endorse by his proper signature.
- R.S., c. B-5, s. 64
Marginal note:Presumption as to order of endorsement
64 Where there are two or more endorsements on a bill, each endorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved.
- R.S., c. B-5, s. 65
Marginal note:Disregarding condition
65 Where a bill purports to be endorsed conditionally, the condition may be disregarded by the payer, and payment to the endorsee is valid, whether the condition has been fulfilled or not.
- R.S., c. B-5, s. 66
66 (1) An endorsement may be made in blank or special.
Marginal note:In blank
(2) An endorsement in blank specifies no endorsee, and a bill so endorsed becomes payable to bearer.
(3) A special endorsement specifies the person to whom, or to whose order, the bill is to be payable.
Marginal note:Application of Act
(4) The provisions of this Act relating to a payee apply, with such modifications as the circumstances require, to an endorsee under a special endorsement.
Marginal note:Conversion of blank endorsement
(5) Where a bill has been endorsed in blank, any holder may convert the blank endorsement into a special endorsement by writing above the endorser’s signature a direction to pay the bill to or to the order of himself or some other person.
- R.S., c. B-5, s. 67
Marginal note:Restrictive endorsement
67 (1) An endorsement may contain terms making it restrictive.
(2) An endorsement is restrictive that prohibits the further negotiation of the bill, or that expresses that it is a mere authority to deal with the bill as thereby directed, and not a transfer of the ownership thereof, as, for example, if a bill is endorsed “Pay ... only”, or “Pay ... for the account of ...”, or “Pay ..., or order, for collection”.
Marginal note:Rights of endorsee
(3) A restrictive endorsement gives the endorsee the right to receive payment of the bill and to sue any party thereto that his endorser could have sued, but gives him no power to transfer his rights as endorsee unless it expressly authorizes him to do so.
Marginal note:If further transfer is authorized
(4) Where a restrictive endorsement authorizes further transfer, all subsequent endorsees take the bill with the same rights and subject to the same liabilities as the first endorsee under the restrictive endorsement.
- R.S., c. B-5, s. 68
Marginal note:When negotiability ceases
68 Where a bill is negotiable in its origin, it continues to be negotiable until it has been
(a) restrictively endorsed; or
(b) discharged by payment or otherwise.
- R.S., c. B-5, s. 69
Marginal note:Overdue bill
69 (1) Where an overdue bill is negotiated, it can be negotiated only subject to any defect of title affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title than the person from whom he took it had.
Marginal note:When demand bill overdue
(2) A bill payable on demand is deemed to be overdue, within the meaning and for the purposes of this section, when it appears on the face of it to have been in circulation for an unreasonable length of time.
(3) What is an unreasonable length of time for the purpose of subsection (2) is a question of fact.
- R.S., c. B-5, s. 70
70 Except where an endorsement bears date after the maturity of the bill, every negotiation is, in the absence of evidence to the contrary, deemed to have been effected before the bill was overdue.
- R.S., c. B-5, s. 71
Marginal note:Taking bill with notice of dishonour
71 Where a bill that 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 section affects the rights of a holder in due course.
- R.S., c. B-5, s. 72
Marginal note:Reissue of bill
72 Where a bill is negotiated back to the drawer, to a prior endorser or to the acceptor, that party may, subject to this Act, reissue and further negotiate the bill, but he is not entitled to enforce the payment of the bill against any intervening party to whom he was previously liable.
- R.S., c. B-5, s. 73
Rights and Powers of Holder
Marginal note:Rights and powers of holder
73 The rights and powers of the holder of a bill are as follows:
(a) he may sue on the bill in his own name;
(b) 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;
(c) where his title is defective, if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill; and
(d) where his title is defective, if he obtains payment of the bill, the person who pays him in due course gets a valid discharge for the bill.
- R.S., c. B-5, s. 74
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