CHAPTER VI

FORGED, STOLEN AND LOST BILLS

 

Section 1006.- The forgery of a signature on a bill does not affect the validity of the other signatures.

 

Section 1007.- Where a bill or acceptance is materially altered without the assent of all parties liable on the bill, the bill is avoided, exceptas against a party who has himself made, authorised, or assented to the alteration, and subsequent indorsers.

Provided that where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a lawful holder, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenor.

In particular the following alterations are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor’s assent.

 

Section 1008.- Subject to the provisions of this Code, where a signature on a bill is forged or placed thereon without authority of the person whose signature it purports to be, the forged or unauthorised signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority.

Provided that nothing in this section shall affect the ratification of an unauthorised signature not amounting to a forgery.

 

Section 1009.- When a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays the bill in good faith, without negligence and in the ordinary 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 purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority.

 

Section 1010.- The holder of a bill which is lost or stolen must, as soon as he knows of the loss or theft, notify in writing the maker, the drawee, the referee in case of need, the acceptor for honour and the giver of aval, if any, to refuse payment of the bill.

 

Section 1011.- Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer if required to indemnify him against all persons whatever in case the bill alleged to have been lost shall be found again.

If the drawer on request as aforesaid refuses to give such duplicate bill, he may be compelled to do so.