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Presumption of value and good faith.
Negotiation of bill.
Requisites of valid indorsement.
No. 3.] THE ORDINANCES OF HONGKONG : [A.D. 1885.
(6.) 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 Ordinance when he obtained the bill, or the acceptance thereof, by fraud, duress, or force and fear, or other unlawful means, or for 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.
30.--(1.) Every party whose signature appears on a bill is primâ facie deemed to have become a party thereto for value.
(2.) Every holder of a bill is primâ facie 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 is shifted unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill.
Negotiation of Bill.
31.--(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.
(2.) A bill payable to bearer is negotiated by delivery.
(3.) A bill payable to order is negotiated by the indorsement of the holder completed by delivery.
(4.) Where the holder of a bill payable to his order transfers it for value without indorsing 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 indorsement of the transferor.
(5.) Where any person is under obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to negative personal liability.
32. An indorsement in order to operate as a negotiation must comply with the following conditions, namely.-
(1.) it must be written on the bill itself and be signed by the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient. An indorsement written on an allonge, or on a copy of a bill issued or negotiated in a country where copies are recognised, is also valid.
(2.) it must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorsement which purports to transfer to the indorsee a part only of the amount payable, does not operate as a negotiation of the bill.
(3.) where a bill is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others.
(4.) where a bill is payable to the order of a holder, and he indorses it, his indorsement must be in the same name, or the signature may be that of his authorised agent.
(5.) where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved.
(6.) an indorsement may be made in blank, or it may contain a specific direction to pay to a named person.
33. When a bill is negotiable in its origin, it continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise, or until it has been overdue for such a length of time as to make it doubtful whether it is still current.
34.--(1.) where a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person.
(2.) A special indorsement specifies the person to whom or to whose order the bill is to be payable, and the indorsement of such indorsee is necessary to further negotiate the bill.
(3.) The holder may, if he thinks fit, indorse the bill in blank again, and it may be further negotiated.
(4.) Where a holder of a bill payable to his order transfers it for value without indorsing 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 indorsement of the transferor.
35.--(1.) where a bill is negotiated back to a prior party, that party may re-issue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable.
(2.) A re-acquiring holder is remitted to his former rights and position, and may sue all parties prior to him, unless it is otherwise provided by this Ordinance.
(6.) When a bill is dishonoured, the holder may...