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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. 4. S. 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.
5. S. 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
(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 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. 6. S. 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.
OF PRESENTMENT FOR ACCEPTANCE.
1. Always desirable, sometimes neccessary-notice of refusal.
2. Presentment to whom and by whom.
3. When excused.
4. Dishonor by non-acceptance.
1. Every bill should be presented by the holder for acceptance without delay, for if the bill be accepted, he has the acceptor's security; and if the acceptance be refused then the prior parties become immediately liable.
For this purpose, in the event of refusal, notice of non-acceptance, i. e. of dishonor, should at once be given.
Though presentment for acceptance is always desirable, and though upon non-acceptance prior parties are always chargeable, yet it is only in case of certain bills that such presentment is absolutely necessary, in order to render liable those who are already parties to the bill.
Where a bill is payable after sight presentment for acceptance is necessary in order to fix the maturity of the instrument, and, 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. (B. of Exch. Act, sec. 38.)
But where the holder of a bill such as last mentioned has not time, with reasonable diligence, to present for acceptance before presenting for payment, the delay is excused and does not discharge the drawer and indorsers. (See ibid.)
When a bill payable after sight is negociated, the holder must either present it for acceptance or negociate it within a reasonable time, otherwise the drawer and indorsers prior to him are discharged.
2. To be duly presented for acceptance, a bill should be presented by, or on behalf of the holder, to the drawee or to some person authorized to accept or refuse acceptance on his behalf, at a reasonable hour, on a business day, and before the bill is overdue.
When the bill is addressed to two or more drawees, not partners, presentment must be made to them all; but, if one has authority to act for the rest, presentment may be made to him only.
Where the drawee is dead, presentment may be made to his personal representative.
Where the drawee is bankrupt, presentment may be made to him or to his trustee.
Where authorized by agreement or usage, a presentment through the post-office is sufficient.
3. Presentment for acceptance is excused, and a bill may be treated as dishonored by non-acceptance; (1) where the drawee is dead or bankrupt, or is a fictitious person or a person without capacity to contract; (2) where, after the exercise of reasonable diligence, presentment cannot be effected; and (3) where, although the presentment has been irregular, acceptance has been refused on some other ground. But the holder's belief, however well founded, that the bill will be dishonored is no excuse for not presenting it.
4. If, on presentment for acceptance, the drawee does not accept the bill within the customary time-usually twenty-four hours-the holder must treat the bill as dishonored if he intends to have recourse against the drawer and indorsers.
A bill is dishonored not only by not being accepted after presentment, but by not being accepted where presentment is excused.
Upon dishonor, the holder may have immediate recourse to the drawer and indorsers, without presentment, for payment.
In the latter part of this chapter, the language of the Bills of Exchange Act, s. 38-43, has been followed as near as possible.
As to a bill being dishonored by being accepted in a qualified instead of a general form, see ante, chap. vi.
OF PRESENTMENT FOR PAYMENT OF BILLS AND NOTES.
1. Object and necessity of
2. How to be made.
3. Generally unnecessary in order to charge acceptor or maker.
4. Presentment of bills payable at sight, how excused.
5. Day of Presentment.
6. By and to whom.
7. At what place.
8. Several acceptors. Acceptor dead.
9. Presentment through post.
10. Presentment at particular place, when necessary to charge acceptor or maker.
11. W re no due day is named.
12. Days of grace.
13. Hours and time of presentment.
14. Rule does not generally apply to Note payable on demand.
15. Drawee's Bankruptcy, &c., no excuse.
1. There are plain differences between presentment for acceptance and presentment for payment, both in their objects and their natures. Until presentment for acceptance, the holder of an unaccepted draft has no aeceptor liable to him at all whereas, when the bill is once accepted and the acceptance be a general one, the acceptor is and remains liable without any presentment for payment at all. Again, speaking generally, presentment for acceptance is personal, for the acceptor, or his agent, must write his name across the bill; while presentment for payment is local, because, wherever the money is, it can
be paid and the bill handed over. Further, presentment for acceptance is uncertain as to time, for it can be at any time the drawer chooses, down to maturity, whereas presentment for payment, if made at all, has to be made at maturity.
2. When the holder of a bill or note presents it for payment, he should exhibit the document to the person from whom he demands payment, and, upon payment being made, must forthwith deliver it up to the party paying it.
3. It is not in general necessary, in order to charge the acceptor or maker of a bill or note, that it should be presented to him for payment when due or at any time after. An action may at once be brought without either protest or notice of dishonor or even demand of payment.
[But a bill or note, payable at or after sight, must be presented in order to charge the acceptor or maker. And a bill accepted payable at a particular place and there only, and a note made in the body of it payable at a particular place, must be presented at that place in order to charge the acceptor or maker. (See s. 10.)]
The consequence of a bill or note being not duly presented for payment to the acceptor or maker is, that all the antecedent parties will be discharged from their liability, whether on the instrument or on the consideration for which it was given.
The rules relating to presentment for payment will therefore require attention.
4. When a bill is drawn payable "at sight" demand," which is the same thing, presentment for payment and presentment for acceptance are identical, at all events as to time, and the one and the other are, generally speaking, excused by the bill being in circulation. Subject to this excuse, the rule is that a bill payable "at sight" or "on demand," must, in order to hold the drawer liable, be presented within a reasonable time after its issue, and in order to hold the indorser liable, within a reasonable time after the indorsement.
5. When a bill which. is accepted generally is not payable on demand, then in order to hold the drawer and indorsers liable, it must be presented on the day when it falls due.
6. Every presentment for payment must be made by or on behalf of the holder, at a reasonable time on a