Bills of Exchange Act (R.S.C., 1985, c. B-4)

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.

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.

Negotiation

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.

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.

Marginal note:Endorsing

• 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.

• Marginal note:Allonge

  (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.

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.

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.

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.

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.

Marginal note:Endorsement

• 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.

• Marginal note:Special

  (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.

Marginal note:Restrictive endorsement

• 67 (1) An endorsement may contain terms making it restrictive.

• Marginal note:Idem

  (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.

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.

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.

• Marginal note:Time

  (3) What is an unreasonable length of time for the purpose of subsection (2) is a question of fact.

Marginal note:Presumption

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.

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.

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.

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.

Presentment for Acceptance

Marginal note:When presentment for acceptance necessary

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

• Marginal note:Express stipulation

  (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.

• Marginal note:Other cases

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

Marginal note:Presentment excused

75 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 endorsers.

Marginal note:Sight bill

• 76 (1) Subject to this Act, when a bill payable at sight or after sight is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time.

• Marginal note:If not presented

  (2) If the holder does not comply with the requirement of subsection (1), the drawer and all endorsers prior to that holder are discharged.

• Marginal note:Reasonable time

  (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.