Commercial Code > BOOK IV 2

TITLE II. COMMERCIAL INSTRUMENTS

Chapter 1. General Provisions

Art. 732. - Definitions.

1. Commercial instruments are negotiable instruments setting out an entitlement consisting in the payment of a sum of money.

2. Bills of exchange, promissory notes, cheques, travellers cheques and warehouse goods deposit certificates shall be deemed to be commercial instruments under this Code.

3. 'I1he provisions of Art. 2813-2824 of the Civil Code shall apply to warehouse goods deposit certificates.

Art. 733. - Legal capacity.

Any person having contractual capacity may bind himself by commercial instrument.

Art. 734. - Signature.

1. Declarations made by commercial instruments shall bear the signature of the person making them.

2. Nevertheless, signature may be apposed by a handwritten mark or by mechanical process such as a stamp.

3. When a physical person is unable to sign, his consent shall be evidenced by an authentic declaration on the instrument.

Chapter 2. Bills of Exchange

Section 1. Establishment and form of bills of exchange

Art. 735. - Requirements.

A bill of exchange shall contain:

a. the term "bill of exchange" inserted in the body of the instrument and expressed m the language employed in drawing up the instrument;

b. an unconditional order to pay a sum certain in money;

c. the name of the person who is to pay (drawee);

d. the time of payment;

e. the place of payment;

f. the name of the person to whom or to whose order payment is to be made or an indication that it shall be payable to bearer;

g. the date when and place where the bill is issued;

h. the signature of the person who issues the bill (drewer).

Art. 736. - Requirements absent.

Where any of the requirements provided in Art. 735 is absent the instrument shall not be valid 'as a bill of exchange, except in the cases specified in sub-art. (a), (b) and (c) hereunder,:

a. a bill of exchange in which the time of payment is not specified shall be deemed to be payable at sight;

b. unless otherwise expressly specified, the place mentioned beside the name of the drawee shall be deemed to be the place of payment, and at the same time the place of the domicile of the drawee;

c. a bill of exchange which does not mention the place of its issue shall be deemed to have been drawn in the place mentioned beside the name of the drawer.

Art. 737. - Special cases.

1. A bill of exchange may be drawn payable to drawer's order.

2. It may be drawn on the drawer himself.

3. It may be drawn for account of a third person.

Art. 738. - Domiciled bill.

A bill of exchange may be payable at the domicile of a third party, either in the locality where the drawee, has his domicile or in another locality.

Art. 739. - Stipulation as to interest.

1. In a bill of exchange payable at sight or at a fixed period after sight, payment of interest may be provided. A provision as to interest inserted in any other hill of exchange shall be of no effect.

2. The provision for interest shall be of no effect unless the rate is specified ,

3. Interest shall run from the dale of the hill of exchange, unless some other dale is specified.

Art. 740. - Discrepancy in the sum payable.

1. Where the sum payable by a bill of exchange is expressed both in words and figures and there is a discrepancy, the sum expressed in words shall prevail.

2. Where the sum payable by a bill of exchange is expressed more than once in words or more than once in figures and there is a discrepancy, the smaller sum shall prevail.

Art. 741. - Signature of persons incapable of binding themselves.

If a hill of exchange bears signatures of persons incapable of binding themselves by a bill of exchange, forged signatures, signatures of fictitious persons or signatures which for any other reason cannot bind the persons who signed the bill of exchange or on whose behalf it was signed, the obligations of the other persons who have signed it shall be valid.

Art. 742. - Signature without power to act.

Whosoever signs a bill of exchange on behalf of person for whom the had no power to act shall be bound himself as a party to the bill and, if he pays, shall have the same rights as the person for whom he purported to act. The same rule shall apply to an agent who exceeded his powers.

Art. 743. - Liability of drawer.

The drawer guarantees both acceptance and payment. He may release himself from guaranteeing acceptance. Any provision by which he releases himself from the guarantee .of payment shall be of no effect.

Art. 744. - Bill of exchange in blank.

If a bill of exchange, which was incomplete when issued, has been completed otherwise than in accordance with the agreements entered into, the non-observance of such agreements may not be set up against the holder unless he has acquired the bill of exchange in bad faith or, in acquiring it, has committed a fault.

Art. 745. - Ante or post dated bill of exchange.

1. A bill of exchange shall not be null and void far the sole reason that it has been antedated or postdated, provided that there is no fraud or illegality.

2. A person to wham an instrument so dated is delivered is deemed to have acquired it at the date of delivery.

Section 2. Negotiation of bills of exchange

Art. 746. - Negotiability.

1. A bill of exchange to bearer may be transferred by simple delivery of the instrument.

2. Any other bi1l of exchange, even if not expressly drawn to order, may be transferred by endorsement. When the drawer has inserted in a bill of exchange the words "not to order" or similar words, the instrument can only be transferred according to the form, and with the effects, of an ordinary assignment.

3. The bill may be endorsed even in favour of the drawee, whether he has accepted it or not, or of the drawer, or of any other party to the bill.

4. These persons may re-endorse the bill.

Art. 747. - Elements of endorsement.

1. An endorsement shall be unconditional. Any condition to which it is made subject shall be of no effect.

2. A partial endorsement shall be null and void.

3. An endorsement "to bearer" is equivalent to an endorsement in blank.

Art. 748. - Forms of endorsement.

1. An endorsement shall be written' on the bill of exchange or on a slip affixed thereto (allonge). It shall be signed by the endorser.

2. The endorsement may leave the beneficiary unspecified or may consist simply of the signature of the endorser (endorsement in blank). In the latter case, the endorsement to be valid shall be written on the back of the bill of exchange or on the slip affixed thereto (allonge).

Art. 749. - Effects of endorsement.

1. An endorsement transfers all the rights arising out of a bill of exchange.

2. If the instrument is in blank, the holder may:

a. fill up the blank either with his own name or with the name of some other person;

b. re-endorse the bill in blank, or to some other person;

c. transfer the bill to a third person without filling up the blank and wil1hout endorsing it.

Art. 750. - Guarantee.

1. In the absence of any provision to the contrary, the endorser guarantees both acceptance and payment.

2. He may prohibit any further endorsement; in this case he gives no guarantee to the persons to whom the bill is subsequently endorsed.

Art. 751. - Establishment of title by holder.

1. The possessor of a bill of exchange shall be deemed to be the lawful holder if he establishes his title to the bill through an uninterrupted series of endorsements, even if the last endorsement is in blank. Cancelled endorsements shall he deemed not to be written. Where an endorsement in blank is followed by another endorsement, the person who signed this last endorsement shall be deemed to have acquired the bill by the endorsement in blank.

2. Where a person has been dispossessed of a hill of exchange, in any manner whatsoever, the holder who establishes his right thereto as provided in sub-art. (1) shall not be bound to give up the bill unless he has acquired it in bad faith or unless in acquiring it he has committed a fault.

Art. 752. - Defences.

Persons sued on a bill of exchange cannot set up against the holder defences based on their personal relations with the drawer or with previous holders, unless the !holder, in acquiring the bill, has knowingly acted to the detriment of the debtor.

Art. 753. - Endorsement by attorney.

1. Where an endorsement contains the words "value in collection," "for collection," "by attorney" or any other similar words implying agency, the holder may exercise all the rights arising out of the bill of exchange, but he can only endorse it in his capacity as agent.

2. The parties liable can only set up against the agent defences which could be set up against the principal.

3. The agency granted by power of attorney shall not terminate by reason of the death of the principal or his becoming legally incapable.

Art. 754. - Endorsement in pledge.

1. Where an endorsement contains the words "value in security," "value in pledge" or any other similar words implying a pledge, the holder may exercise all the rights arising out of the bill of exchange, but an endorsement by him has the effects only of an endorsement by an agent.

2. The persons sued on the bill may not set up against the holder defences based on their personal relations with the endorser unless the holder, in acquiring the bill, has knowingly acted to the detriment of the debtor.

Art. 755. - Endorsement after maturity or after protest.

1. An endorsement after maturity shall have the same effect as an endorsement before maturity. An endorsement after protest for nonpayment, or after the expiration of the limit of time fixed for drawing up vile protest, shall operate only as an ordinary assignment.

2. Unless the contrary is proved, an endorsement without date shall be deemed to have been written on the bill before the expiration of the limit of time fixed for drawing up the protest.

3. Where a refusal to pay has been evidenced by a declaration of the drawee in accordance with Art. 781 (2), an endorsement without date shall be deemed to have been made before the protest.

Art. 756. - Presumption as to the place of endorsement.

Unless the contrary is proved, an endorsement shall be deemed to have been written on the bill at the place where the endorsement is dated.

Section 3. Acceptance

Art. 757. - Presentment for acceptance.

Until maturity a bill of exchange may be presented to the drawee for acceptance at his domicile, either by the holder or by a person who is merely in possession of the bill.

Art. 758. - Order or prohibition as to presentment.

1. In any bill of exchange the drawer may stipulate that it be presented for acceptance with or without fixing a limit of time for presentment.

2. Except in the case of a bill payable at the address of a third party or in a locality other than that of the domicile of the drawee or of a bill drawn payable at a fixed period after sight, the drawer may prohibit presentment for acceptance.

3. He may also stipulate that presentment for acceptance shall not take place before a fixed date.

4. Unless the drawer has prohibited acceptance, every endorser may stipulate that the bill shall be presented for acceptance with or without fixing a limit of time for presentment.

Art. 759. - Obligation to pres

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