§ 59.

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 indefinite payment is made, the creditor may ascribe it to 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 adjudication over lands of the debtor, must apply an indefinite payment 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 nonpayment, 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.

(9.) Vide infra subsection 3.

$ 59.

(h.) "Paid" means paid at or after maturity. If a bill or note is negotiated back to the drawer before the maturity, he may re-issue and further negotiate it, vide § 37.

(i.) If he negotiate the bill without striking out his own and subsequent indorsements, no indorsee can have a claim against the indorsers subsequent to his first indorsement, who have been discharged by the payment by the prior indorser or drawer. No holder can in such a case be a holder in due course, vide § 29, and any defence which would be good against the drawer or indorser who has paid, will be good against his indorsee. The drawer or prior indorser can never recover on the bill from a subsequent indorsee, and therefore his indorsee having no greater right than he had, is also barred from suing them. Where a bill is negotiated back before its maturity to the drawer or prior indorser, the subsequent indorsers are not thereby discharged, and if he re-issue the bill before maturity they will be liable in recourse to the new indorsees, but not to the drawer or prior indorser who has reissued the bill, vide § 37.

(j) The person accommodated-e.g., the drawer- -consequently cannot re-issue the bill, and if he does, the bill will be open to objection by the other parties liable thereon. The holder in such a case cannot be a holder in due course, even though he has no notice that the drawer is the person accommodated, because he has become a holder after maturity of the bill, vide § 29. For the definition of accommodation party, vide § 28.

is Banker paying

demand draft

is whereon in

dorsement is

60. When a bill payable to order on demand (a) drawn on a banker, and the banker (b) on whom it drawn pays the bill in good faith (c) and in the ordi- forged. nary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it pur

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ports to be, and the banker is deemed to have paid the bill in due course (d), although such indorsement has been forged or made without authority (e).

(a.) Vide § 8, 10.

(b.) Vide § 2.

(c.) Vide § 90.

(d.) Vide § 59.

(e.) This Act does not repeal 16 & 17 Vict. c. 59, § 19, which provides "that any draft or order drawn upon a banker for a sum of money, payable to order, on demand, which shall when presented for payment, purport to be indorsed by the person to whom the same shall be drawn payable, shall be a sufficient authority to such banker to pay the amount of such draft, or order to the bearer thereof; and it shall not be incumbent on such banker to prove that such indorsement, or any subsequent indorsement was made by or under the direction or authority of the person to whom said draft or order was or is made payable, either by the drawer or any indorser thereof." It substantially repeats this provision, but emphasises the protection to the banker who pays a bill on a forged or non-authorised indorsement. On the said section it was decided in the case of Ogden v. Benas, L. R. 9, C. P. 513, that the protection only extended to the banker upon whom the cheque was drawn, and not to a banker who pays the cheque upon a forged indorsement. In that case the plaintiff sent a cheque to A. B., payable to his order. The cheque was brought to the defendants, who were bankers in Liverpool, by a respectable-looking man, who was wholly unknown to them. In order that through their agents in London they might obtain payment, they sent the cheque to London where it was paid by the bankers on whom it was drawn; the signature of A. B. was forged to it, and the bankers paying were protected by 16 & 17 Vict. c. 59, § 19. The plaintiff, the drawer of the cheque, then raised an action against the defendants, who pleaded the protection of the section, but it was held that the section was intended only to protect the banker upon

whom a cheque was drawn, and who was bound to know whether his customer's signature was genuine or not, but could not be supposed to know, and therefore ought not to be responsible for, the genuineness of the signatures of the payees of such cheques. But it was pointed out that the money received by the banker presenting for payment was money belonging to the plaintiff, which the defendants had no right to receive. It was also laid down that the fact that the defendants acted merely as agents for the presenter of the cheque with the forged indorsation could not alter the nature of the transaction, because they could have no greater right than their principals had, and had received the money to their own use. With this case the case of the Clydesdale Bank v. Royal Bank, 11th March, 1876, may be contrasted. The Royal Bank presented for a customer to the Clydesdale Bank a cheque to which the names of the drawer, a customer of the Clydesdale Bank, as well as of the indorser were forged. The Clydesdale Bank paid, and on discovering the forgery, could not avail themselves of this section, because the name of the drawer was forged, but endeavoured to recover the sum paid by them from the Royal Bank. It was held that the Royal acted merely as the forger's hand in presenting for payment, and were not bound to recoup the Clydesdale Bank for the sum erroneously paid by that bank in the belief that the signature of the drawer was genuine. In this case the Royal Bank did not receive the drawer's money, because his signature was forged and his money was not paid away by the Clydesdale Bank. The Royal Bank could therefore not be liable on the ground that they were receivers of the drawer's money. They were merely the innocent hand through which the forger received money from the person imposed upon—viz., the Clydesdale Bank-to whom they were under no obligation to restore money which they had not received to their own use but merely to hand to the forger, and there was no evidence of any negligence on their part.

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holder at

61. When the acceptor of a bill is or becomes the Acceptor the holder (a) of it at or after its maturity (b), in his own maturity. right (c), the bill is discharged (d).

§ 61.

Express

waiver.

(a.) Vide § 2.

(b.) Vide §§ 10 and 14.

(c.) Where the acceptor becomes the holder of a bill as executor of the payee, or as his trustee in bankruptcy, the bill is not discharged.

(d.) In this case the bill is extinguished confusione. In the case of ordinary obligations this would happen even if the debtor in the obligation became the creditor prior to the term of payment, but in order not to interfere with the negotiability of bills and notes, this result is not permitted to take place till the maturity of the bill. By § 37 the acceptor is expressly authorised to reissue a bill, which has been negotiated to him, under exception of the case provided in this section. This provision does not apply to an acceptor for honour, who on paying is subrogated for and succeeds to the rights and duties of the holder, as regards the party for whose honour he pays, and all parties liable to that party, vide § 68 (5). Bank notes also do not fall under the provisions of this section, but are re-issuable at any time, vide § 33 and 34 Vict. c. 97, § 46.

62. (1.) When the holder (a) of a bill at or after its maturity (b) absolutely and unconditionally renounces his rights against the acceptor the bill is discharged (c).

The renunciation must be in writing (d), unless the bill is delivered up to the acceptor.

(2.) The liabilities (e) of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity; but nothing in this section shall affect the rights of a holder in due course (ƒ) without notice of the renunciation (g).

(a.) Vide § 2.

(b.) Vide §§ 10 and 14.

(c.) The renunciation must be in writing and express une