Once he draws a bill the drawer cannot in due course

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Once he draws a bill, the drawer cannot in duecourse deny to a holder the existence of thepayee and his capacity to indorse –s.55(1)(b)BEA. (seeYee Chow Fah v MultihorizonSdnBhd[1999]).ismk/BD30803/Topic545(2) The Drawee/AcceptorThe drawee is the person to whom the bill isaddressed. He isliable only when he signsthe bills as acceptor.Acceptance is complete when the bill isdelivered or when the person entitled to thebill has been notified of the acceptance by thedrawee.The acceptor in accepting a bill promises topay it according to its tenor –s.54(a) BEAismk/BD30803/Topic546(3) The IndorsersAn indorsement is usually effected by signingon the back of the bill.A person indorses a bill in order to transfer it.By indorsing, he promises that the bill whenpresented will be paid in accordance to itstenor and that if it is dishonoured, he willcompensate the holder or any subsequentindorses who has suffered loss.ismk/BD30803/Topic547(4) The Accommodation PartyAn accommodation party is a person whosigns a bill as drawer, acceptor or an indorserwithout receiving value for it.And he does so for the purpose of lending hisname to some other person– s.28(1) BEA.S.28(2)states that an accommodation party isliable on the bill to a holder for value.It doesnot matter whether when the holder took thebill he knew that such party was anaccommodation party or not.ismk/BD30803/Topic548434445464748
BD30803/Topic59(5) Fictitious & Non-ExistingPayeesIf the payee of a bill is fictitious or non-existing,the bill is treated as payable to bearer –s.7(3)BEA.It can be negotiated without the indorsement ofthe payee.**A fictitious payee is one whom the drawer namesas payee but who is not intended by the drawer toreceive payment on the bill. On the other hand, anon-existing payee is one whose non-existence thedrawer is unaware of and who is genuinelyintended by the drawer to receive payment.ismk/BD30803/Topic549INDORSEMENTS.34(1)– blank indorsementS.34(2)– special indorsementS.32(a)- the signature of the holder or of hisduly authorised agent is essential to thevalidity of indorsementS.32(b)– partial indorsement, does notoperate as negotiation of an instrumentS.32(d)- he may indorse the instrument asdescribed - he may add, if he thinks fit, hisproper signatureSeeArab Bank Ltd v Ross[1952] Court ofAppeal: the omission of the word companymade the indorsement irregularismk/BD30803/Topic550CONT.So, what is indorsement?National Bank v Paterson(1909) a SouthAfrican case attempts to define indorsement:“Every signature written on the back of suchinstrument is an indorsement”.Ordinary legal meaning is the signing of aname on the back of an instrument (intentionto take liabilities of an indorser).Last-named sense followed by delivery.

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Nature, Cheque, Negotiable instrument, BEA

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