§ 57.

Transferor by delivery and transferee.

which he ought to have received, and to plus the foresad charges, Byles, p. 429.

There may be no course of exchange between the placeof drawing, and the place of payment, in which case the re:xchange is ascertained by combining the exchange of the plce of payment upon a third place, and of that third place upn the place of drawing. If the place of drawing have no exchage with any other place, and be not near any other place wth which there is an exchange of bills, there is no re-exchange, ad the holder can only claim the sum in bill from the drawr, De Fastet v. Barring, 11 East. 265, Chitty on Bills, p. 44

The holder of a dishonoured bill is not bound to drw upon the drawer in the first place. He can draw up ay prior indorser for the amount of the exchange, and ne indorser if he pay, can draw for the amount he has paid, us the discount, so as to recoup himself, or any prior indorsern a different place, who will in the same manner increase he amount of the re-exchange until the drawer is reached, ho thus has to pay the accumulated exchanges between allhe different places where the several indorsers reside.

In order to entitle the holder to his claim for re-exchang it is not necessary that he draw a bill for the amount, buhe cannot in that case claim for the amount of the stamp nd brokerage, Chitty on Bills, p. 438. Re-exchange in sme countries is a fixed percentage, and a drawer who has pai such percentage, may recover the amount from an accept who has dishonoured a bill by non-payment, in re Gener South American Company, 7 Chan. Div. 637.

58. (1.) Where the holder (a) of a bill payable bearer (b) negotiates it by delivery (c) without indor ing it, (d) he is called a "transferor by delivery."

(2.) A transferor by delivery is not liable on t instrument (e).

(3.) A transferor by delivery who negotiates a thereby warrants to his immediate transferee bein holder for value that the bill is what it purports

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 (f).

(a.) Vide § 2.

(b.) A blank indorsed bill is payable to bearer, vide § 34.
(c.) Vide § 21 and 31 (2).

(d.) A holder of a bill payable to bearer who indorses it
incurs all the liabilities and is entitled to the rights of an
indorser of a bill payable to order, vide § 31.

(e.) Recourse on the bill cannot be taken against a transferor for delivery either by ordinary action on the bill or by summary diligence. He does not engage that the bill will be accepted or paid, or that he will compensate the holder in the event of the bill being dishonoured.

(f) The transferor is, however, liable in an ordinary action at the instance of his immediate transferee being a holder for value, vide § 27 (that is a person who has given value for it, even though he be not a holder in due course), to compensate him (1) if the bill is not what it purports to bee.g., if the signatures thereto be forged or non-authorised; (2) if he had no right to it-e.g., if he be a finder or a thief; (3) if at the time of transfer he knew any fact that renders the bill valueless-e.g., that the acceptor has absconded, or has become bankrupt or stopped payment, or that the bill has been materially altered. In Gompertz v. Bartlett, 23 L. J., C. P. 65 the defendant transferred for value to the plaintiff a bill payable to bearer without endorsing it. The bill purported to be drawn in Sierra Leone, and to be accepted in London. In point of fact it was both drawn and accepted in London, and being unstamped was rejected in the sequestration of the acceptor as null under the Stamp Act then in force. It was held that the defendant, though not a party to the fraudulent misdescription, was liable to the plaintiff in the price paid for the bill, on the ground that the bill did not correspond to the description under which it was sold.

§ 58.

$ 59.

Payment in due course.

Discharge of Bill.

59. (1.) A bill is discharged (a) by payment in due course by or on behalf of the drawee or acceptor.

"Payment in due course" (b) means payment made at or after the maturity of the bill (c) to the holder (d) thereof in good faith (e) and without notice that his title to the bill is defective (ƒ).

(2.) Subject to the provisions hereinafter contained (g), 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 re-issue the bill (h).

(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 (i).

(3.) Where an accommodation bill is paid in due course by the party accommodated the bill is discharged (j).

(u.) A bill may be discharged—(1.) by payment, vide note (b); (2.) by renunciation or acceptilation, vide § 62; (3.) by novation. If a new bill by the same parties, or a bond or other security, be given for the bill, it is discharged, unless the new instrument be given merely by way of security, Twopenny v. Young, 3 B. and C. 208; Allan v. Allan, 1st March, 1831,

9 Sh. 529; Sandeman v. Thomson, 17th Nov. 1831, 10 Sh. 4. (4.) By delegation. If the holder of a bill take in payment bill or note-e.g., a banknote, the obligants in the original bill are released, even though the new bill or note is not paid on presentment, but he will have his right of recourse on the new bill against the person from whom he takes the new bill or note, subject to the conditions stated in § 55, if the latter be a party to it, but not otherwise, and will have no recourse against the transferor by delivery-e.g., of a bank note, vide § 58, Shepherd & Co. v. Bartholomew & Co., 11th June, 1868, 5 S., L. R. 595. If, however, the substituted bill or note is worthless, by being forged, or written on unstamped paper, or materially altered, the first bill will not be discharged. (5.) By compensation. This requires to be pleaded. The counter claim must be liquid, or capable of being instantly verified by writ or oath, Hannay & Sons' Trustee v. Armstrong Brothers, 2nd Feb. 1875, 2 R. 399; 4 R., H. L. 48; 2 Appeal Cases, 83. An acceptance, which is not yet due, cannot be pleaded except in bankruptcy against a claim on a bill, II. Bell's Com. 122-124, vide note on § 97 (1). (6.) By confusion, vide § 61. (7.) By cancellation of the bill. Where some of the signatures are cancelled, the bill is not discharged, vide § 63. The cancellation operates merely a discharge of the liabilities of the parties whose signatures are cancelled, but if the signature of the acceptor is cancelled, the claim of the holder against the other parties liable thereon, is extinguished by material alteration without assent of all parties liable on the bill, vide § 64. (8.) By prescription, vide note (b), § 100. Prescription extinguishes the bill, but does not discharge the debt in the bill.

The rules of the law of England, so far as not contained in note (b), § 100, will be found stated in Byles on Bills, pp. 222-244, 342-364, and Chitty on Bills, pp. 212-218, 369.

Discharge of an obligant in bankruptcy is not a discharge of the bill, but merely of the liability of the bankrupt.

(b.) The holder is not bound to accept a partial payment,

$ 59.

§ 59.

ascribe it to

unless the bill stipulates for payment by instalments, Ersk.
Inst. iii. 3, 1. Where a bill is paid, it is presumed, unless
the contrary be proved, that the payment was made by the
proper debtor, or if by another party that it was made with
his funds, Fairbairn v. Fairbairn, 18th March, 1868, 6 M.
640, but he may take a partial payment without losing his
recourse against the other parties liable on the bill, Hodgson
v. Bushley, 2nd Dec. 1882, Mor. 1609, 12th May, 1783,
2 Pat. Ap. 607; Gould v. Robson, 8 East. 576. Where an in-
definite payment is made, the creditor may
which bill he pleases, or to a bill in danger of prescribing, or
to the worst secured debt-e.g., to payment of an open account
instead of payment of a bill, but he cannot apply it to payment
of a disputed or illegal debt. A creditor who holds an adjudi-
cation over lands of the debtor, must apply an indefinite pay-
ment to extinction of the debt thus secured, because the debtor
in the debt thus secured, is liable to lose the adjudged lands if
he do not pay, Bell's Prin. 563. Where, however, there is an
account current between the parties, indefinite payments are
appropriated to payment of the debts due by the payer in
their order in the account, Lang v. Brown, 2nd Dec. 1859,
22 D. 113. Payment is presumed where the bill is in the
possession of the acceptor, but this yields to proof of non-
payment, Bell's Prin. 566. Payment may be proved by parole,
vide § 100.

(c.) Vide § 14. A bill payable on demand, vide § 10, may be paid at any time after issue.

(d.) Vide § 2. Payment may be made to an agent of the holder authorised to present for payment and give a discharge, vide § 45 (3).

(e.) Vide § 90.

(f.) Vide § 29 (2). Payment to a person in possession of a bill under a forged indorsement is not a payment in due course, because a person so in possession is not a holder in the sense of the Act, vide note (a) on § 24, but see § 60 for an exception in favour of bankers.