questions on instrument law
Posted: Mon Jan 12, 2009 1:20 pm
Dear all,
I don't know whether it's applicable to post this issue here. But I cannot gain help elsewhere, hopefully you understand it.
"In China, many textbooks states such conclusions:
As per <Bill of Exchange Act 1882>, the right of holder is affected by defect of any holder prior
to him. If the endorsement is forged by prior holder, the subsequent holder’s right will be
affected. Whilst as per <Geneva Convention Providing a Uniform Law For Bills of Exchange
and Promissory Notes>, provided the holder can prove that the endorsement is subsequent, he
can enjoy full rights of the bill of exchange. So there lies in different treatment of forged
endorsement.
As per <Geneva Convention>, the risks of forged endorsement will be born by the one who lost the
bill of exchange. Once the payer effects payment, he can be discharged by payment. But as per <Bill
of Exchange Act 1882>, if the payer makes payment to the one who obtains the bill by illegal means (
say forged endorsement), the payer cannot be discharged by payment. He will face the risks of making payment again to the real holder.
I don't quite understand the above conclusion. Let’s us read the relative stipulations from < Bill of
Exchange Act, 1882>:
29 Holder in due course
(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:
(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.
(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 an illegal consideration, or when he negotiates it in breach of faith, or under such
circumstances as amount to a fraud.
(3)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.
To my personal view, I think there is contradiction between (1) and (3) of the above. Article 29 (1)
stipulates that a holder in due course should be the one who pays the value with good faith, but (3)
stipulates that a holder (whatever he has paid value or not) still enjoy the whole rights of a holder in
due course. That’s why I feel puzzled.
To my surprise, it's so hard to find someone who study in this field.
Anticipating your reply.
I don't know whether it's applicable to post this issue here. But I cannot gain help elsewhere, hopefully you understand it.
"In China, many textbooks states such conclusions:
As per <Bill of Exchange Act 1882>, the right of holder is affected by defect of any holder prior
to him. If the endorsement is forged by prior holder, the subsequent holder’s right will be
affected. Whilst as per <Geneva Convention Providing a Uniform Law For Bills of Exchange
and Promissory Notes>, provided the holder can prove that the endorsement is subsequent, he
can enjoy full rights of the bill of exchange. So there lies in different treatment of forged
endorsement.
As per <Geneva Convention>, the risks of forged endorsement will be born by the one who lost the
bill of exchange. Once the payer effects payment, he can be discharged by payment. But as per <Bill
of Exchange Act 1882>, if the payer makes payment to the one who obtains the bill by illegal means (
say forged endorsement), the payer cannot be discharged by payment. He will face the risks of making payment again to the real holder.
I don't quite understand the above conclusion. Let’s us read the relative stipulations from < Bill of
Exchange Act, 1882>:
29 Holder in due course
(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:
(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.
(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 an illegal consideration, or when he negotiates it in breach of faith, or under such
circumstances as amount to a fraud.
(3)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.
To my personal view, I think there is contradiction between (1) and (3) of the above. Article 29 (1)
stipulates that a holder in due course should be the one who pays the value with good faith, but (3)
stipulates that a holder (whatever he has paid value or not) still enjoy the whole rights of a holder in
due course. That’s why I feel puzzled.
To my surprise, it's so hard to find someone who study in this field.
Anticipating your reply.
