Section 55Part 2 — Bills of Exchange
Liability of drawer or indorser
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The drawer of a bill by drawing it —
engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonoured the drawer will compensate the holder, or any indorser who is compelled to pay it, if the requisite proceedings on dishonour are duly taken; and
is precluded from denying to a holder in due course the existence of a payee, and the payee’s then capacity to indorse.
The indorser of a bill by indorsing it —
engages that, on due presentment, it shall be accepted and paid according to its tenor, and that if it be dishonoured the indorser will compensate the holder, or a subsequent indorser who is compelled to pay it, if the requisite proceedings on dishonour are duly taken;
is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer’s signature, and all previous indorsements; and
is precluded from denying to the indorser’s immediate or a subsequent indorsee that the bill was, at the time of the indorser’s indorsement, a valid and subsisting bill, and that the indorser had then a good title thereto.