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(Subscription by various debtors)
1. Order instruments can be subscribed by more than one debtor.
2. In the absence of a clause to the contrary in the instrument, the various
debtors are jointly and severally liable towards the creditor, who can initiate
proceedings against them individually or collectively, without obligation to
observe the order in which they became liable.
3. The fact that the creditor exercises his right against one of the liable
parties does not prevent him from exercising his right against the others, even
if subsequent to the former.
(Identification of creditor)
1. A creditor shall be indicated by his name or, if it provides sufficient
identification, by reference to a capacity.
2. In case of indication of the beneficiary by reference to a capacity, his
signature as endorser shall be accompanied by the indication of his capacity.
(Methods of transfer)
1. The transfer of order instruments is done by means of endorsement and
depends on the delivery of the instrument to the endorsee; delivery shall be
made in the terms prescribed for bearer instruments.
2. Order instruments can also be transferred by an ordinary assignment of
credits, in which case they produce the effects specific to such assignment.
3. In the case of assignment, the transfer of the credit requires delivery of
the instrument, in accordance with paragraph 1.
(Form of endorsement)
1. Endorsement shall be written on the instrument or in an attached slip
(attachment), in which the instrument is fully transcribed or sufficiently
identified by other means, and must be signed by the endorser.
2. An endorsement is valid even if it fails to indicate the endorsee or
consists merely of the signature of the endorser, but, in the latter case, it
must be written on the back of the instrument or in any of the pages of the
3. An endorsement to bearer has the same effect as a blank endorsement.
4. An endorsement to a specified person, but containing the indication 'or to
bearer' or equivalent shall be considered an endorsement to bearer; the
endorsement can then only be transformed by the bearer into a nominal
endorsement, by deleting the clause 'to bearer' or equivalent, if such bearer is
the person indicated beside such clause.
(Conditional or partial endorsement)
1. Any condition attached to an endorsement shall be considered not written.
2. A partial endorsement shall be void; the mention of some payees or
endorsees so that each of them is authorized to demand a part of the credit is
prohibited; however, there can be various creditors, provided that they exercise
jointly the rights arising from the instrument or that one of them, having
possession of the instrument, demands the performance on behalf of all.
(Effects of endorsement)
1. Endorsement transfers all rights arising from an instrument, including, if
not otherwise provided, the personal or real guarantees not mentioned in the
2. A bond, even in the case of order instruments for which the law allows the
'aval', follows its respective rules.
(Possibility for a bearer not formally legitimized to demand performance)
1. If an order instrument is transferred, by endorsement, by a true holder
who is not formally legitimized, the endorsement is not void, but the transferee
needs to obtain his formal legitimation for the effects that depend upon it in
accordance with the law.
2. Unless the law provides to the contrary, a bearer who is not formally
legitimized can demand payment from the debtor, by proving that lack of formal
legitimation does not imply lack of the substantive right arising from the
1. A blank endorsement formally legitimizes the bearer of the instrument,
provided that such endorsement is in the proper place in the chain of
2. Whoever acquires an order instrument by means of blank endorsement has the
legal position that an acquirer would have under a complete endorsement.
3. The bearer of an instrument endorsed in blank can:
a) fill in the blank space in the last endorsement, from which he takes his
legitimacy, either with his own name or with the name of another person, and
with the other normal elements of an endorsement, only being allowed to add
other statements to these mentions if they reduce the obligation of the
b) re-endorse the instrument, in blank or in favor of another person, without
filling the previous endorsement in his favor;
c) forward the instrument to a third party, without endorsing it and without
filling in the blank space, while such space has not been filled or a full
endorsement has not been made; in the latter case, the transfer of the
instrument depends upon the requirements to which the endorsement is subject,
with the exception of the declaration of endorsement in the instrument.
4. The bearer of an order instrument endorsed in blank can assign the credit
arising from the instrument, according to the general rules on the assignment of
credits derived from order instruments.
(Liability of endorser)
Except if the law or a clause mentioned in the instrument do not provide to
the contrary, an endorser is not liable in case the issuer of the instrument
does not perform the obligation.
(Legitimation of bearer)
1. If he is not himself the payee of the instrument, the bearer of an order
instrument has legitimacy to exercise the right indicated in it, provided that
he justifies his right by an uninterrupted series of endorsements, even if the
last is blank.
2. For this purpose, cancelled endorsements shall be considered not written.
3. If a blank endorsement is followed by another endorsement, it is presumed
that the signatory of the latter acquired the instrument by blank endorsement.
4. Only a person holding the substantive right can cancel the endorsements
that it may be necessary to cancel in order to obtain his formal legitimation,
under this article, to the extent that this does not prejudice the rights of
third parties, and notwithstanding any legal provisions to the contrary.
5. The series of endorsements must arise from the instrument itself, taking
into account both the text and the general usage of trade.
6. The chain of legitimation is not interrupted by fictitious names or
7. The acquirer of an order instrument by means other than endorsement can,
by a judicial decision declaring his right as holder, obtain the legitimation
arising from endorsement.
1. The assignee of an order instrument cannot use to his advantage the
protection granted to good faith endorsees regarding acquisition in good faith
and impossibility to invoke the defenses valid against previous bearers.
2. The assignee can endorse the instrument; the endorsee can make use of the
protection mentioned in the previous paragraph if the assignee has acquired the
right he transferred, and if the other legal requirements are met; the debtor
releases himself, by paying to the endorsee under the terms of article 1076, if
the assignee has acquired the right that he transferred, and if the other legal
requirements are met.
3. In the case mentioned in the previous paragraph, if one of the
endorsements is substantially void, in special falsified, the legitimation of
the subsequent bearers of the instrument is not affected by such fact; such
legitimation depends on articles 1074 to 1076, depending on the effect at issue.
(Assignment to endorsee)
If the credit arising from an order instrument or the credit derived from the
underlying legal relation is assigned to whom the instrument is or was endorsed,
the endorsee can use the stronger protection that endorsement assures to him,
regarding the impossibility to invoke defenses, unless it should be understood
that it was intended to exclude such protection.
Partial assignment of the credit arising from an order instrument shall be
void; paragraph 2 of article 1105 shall apply.
(Endorsement for collection or in procuration)
1. If an endorsement contains the indication 'value to collect', 'for
collection', 'by procuration', or any other that implies a mere mandate for
collection, the endorsee can exercise all the rights arising from the
instrument, but can only endorse it in his capacity of representative.
2. The issuer can only invoke against an endorsee in procuration the defenses
that can be invoked against the endorser; the endorser is not liable towards
endorsees, even if it is an instrument in which such liability exists in the
case of a full endorsement.
3. The effect of the endorsement in procuration is not extinguished by the
death or supervening lack of legal capacity of the endorser.
4. The rules of the mandate contract are applicable to the endorsement in
procuration, insofar as they are not excluded by the law or by other
determinations to the contrary.
5. If the endorser revokes the mandate for collection and the debtor, knowing
such fact, pays to the endorsee, he releases himself, without prejudice however
to the obligation to compensate the endorser, under general rules.
1. If an endorsement contains the indication 'value in guarantee', 'value in
pledge', or any another implying the creation of a pledge, the endorsee can
exercise all rights arising from the instrument, but an endorsement made by him
has only the effect of an endorsement in mandate.
2. The indication of the pledge must be recognizably connected with the
endorsement and subscribed by the endorser; the pledge right implies the
delivery of the instrument and an agreement concerning the pledge.
3. The issuer cannot invoke against the endorsee any defenses based on his
personal relations with the endorser, unless the endorsee, on receiving the
instrument, acted knowingly to the detriment of the issuer.
4. The endorser is liable for payment of the instrument, to the extent of the
debt secured by the pledge, if the instrument is of a type in which the
liability of the endorser exists.
5. The internal relation between endorser and endorsee shall be regulated by
the general rules on the pledge of credits.
1. It is possible to subscribe an order instrument leaving blank one or some
of its essential elements.
2. If the instrument is later filled in contrary to the filling agreement,
the breach of such agreement cannot be invoked against the bearer, unless the
latter has acquired the instrument in bad faith or with gross negligence.
3. In a similar way, the subscriber cannot invoke breach of a filling
agreement against a bearer who acquired and filled in a blank instrument in good
faith and without gross negligence.
(Liability of debtor)
1. If an instrument is abusively filled in, the subscriber is liable towards
the first acquirer, in accordance with the rules of negotiable instruments and
to the extent of the filling agreement, provided that the purpose is a reduction
of what was written in the instrument and not a replacement of what is mentioned
in it by a different substance; in the case in which a maturity which takes
place after what had been agreed was written in the instrument, the subscriber
can perform on the written date, if this represents an advantage to him.
2. The debtor is liable towards any subsequent acquirer of an instrument
abusively filled in, even if in bad faith, at least in the same manner as
towards the first acquirer, unless he has any personal defense against such
acquirer, according to general rules.
(Right to add clauses)
1. An instrument is blank, and paragraph 2 of article 1116 applies, if the
payee of the instrument is allowed to add permissible clauses, whether clauses
related to essential elements, the lack of which is provided for by the law, or
clauses on optional elements.
2. If an indication has been left open without the purpose to be later filled
in, its filling in has effects in relation to third parties, unless the
requirement of paragraph 2 of article 1116 occurs.
1. If an instrument lacks an essential element, the lack of which the law
does not provide for, and the subscriber did not want to grant to the payee the
right to fill it, the instrument shall be void.
2. If the payee fills it, the filling in shall be treated as falsification;
but, in relation to good faith third parties, the instrument so filled is valid
in accordance with paragraph 2 of article 1116.
An instrument can be partly filled; the right to fill in the rest can be
(Transfer of right to fill in)
1. The right to fill in is transferred by means of the transfer of the rights
over the incomplete instrument and also by means of endorsement or, if the
instrument does not yet indicate the name of the payee, also by means of
agreement and delivery of the instrument.
2. The right to fill in cannot be separately transferred.
3. Whoever acquires, in an executive procedure, a blank instrument must comply
with the filling agreement.
(Obligation to fill in)
1. If an essential element that is not provided for by the law is lacking,
the bearer of a blank instrument has to fill it before claiming the credit.
2. The instrument can be filled even if, at the date of filling, the
subscriber has died or has lost legal capacity or has become bankrupt or
insolvent, as well as if a representative who subscribed it no longer has powers
(Prohibition of payment)
1. In cases of total or partial destruction, loss, or theft of an order
instrument, the bearer can request the court to prohibit the debtor from paying,
and authorize him it to deposit the amount of the instrument, upon maturity,
indicating the place of the deposit.
2. The provisions concerning identical prohibition in the case of bearer
instruments are extensive, in the applicable part, to the prohibition of
3. Despite the fact that the bearer of an instrument has given notice to the
debtor of the destruction, loss, or theft of the instrument, a payment made
later by the debtor to the detainer of the instrument releases the debtor,
provided that he did not act willfully or with gross negligence.
1. In the cases mentioned in paragraph 1 of the previous article, the
instrument can be annulled.
2. Annulment proceedings can be initiated even if the detainer of the
instrument is known, in which case it shall be done without the procedural
phases and formalities that are not requisite.
3. Annulment proceedings can be initiated by whoever has legitimacy to
exercise the right embodied in the instrument, whether or not he is the holder
of such right.
4. A depositary, a representative, and similar persons can initiate annulment
proceedings, proving their interest in it and the legitimacy of the person for
the account of whom the action is initiated.
Deterioration is regulated by the provisions applicable to bearer instruments
for such case.
(Legitimation of bearer)
The bearer of a nominative instrument is legitimized to exercise the right
mentioned in the instrument by an entry in his favor contained in the instrument
and in the register of the issuer.
1. For the transfer of nominative instruments to produce effect against the
issuer and other third parties, either the name of the acquirer shall be added
both in the instrument and in the register of the issuer, or a new instrument in
his name shall be delivered to the acquirer and such delivery entered in the
2. Entries in the instrument and the register shall be made by the issuer and
under his responsibility.
3. If the registration or the delivery of a new instrument is required by the
transferor, he must prove his identity and capacity of disposal by means of a
4. If the registration or the delivery of a new instrument is required by the
buyer, he must present the instrument and prove his right.
5. The issuer, if he practices the acts necessary for transfer under this
article, does not incur in any liability, unless he acted with negligence.
1. If the law does not prohibit it, nominative instruments can be transferred
2. Endorsement must indicate the endorsee and be dated and signed by the
endorser; if the instrument is not completely paid, the endorsement must also be
signed by the endorsee.
3. Transfer of an instrument by endorsement only produces effect in relation
to the issuer with the entry in his register.
4. An endorsee who demonstrates that he is the holder of an instrument as a
consequence of a continuous succession of endorsements can demand such
(Applicability of paragraph 1 of article 1103)
Paragraph 1 of article 1103 is applicable to the transfer of nominative
(Liens and charges over credit)
1. Liens and charges over the credit only produce effect in relation to the
issuer and third parties if written in the instrument and in the register.
2. Paragraphs 3 and 4 of article 1127 are applicable to such writing.
The usufructuary of a credit mentioned in a nominative instrument can demand
an instrument distinct from that of the owner.
The provisions on pledge of order instruments are extensive to the pledge of
nominative instruments, in the applicable part.
(Destruction, loss, or theft)
1. The provisions of the preceding Chapter on destruction, loss, or theft of
order instruments are extensive, in the applicable part, to the destruction,
loss, or theft of nominative instruments; annulment can be requested either by
the person in whose name the instrument is registered, or by the endorsee.
2. In case of nominative shares, the petitioner for annulment can, during the
period of opposition, exercise the rights arising from the shares, posting a
bail if necessary.
NEGOTIABLE INSTRUMENTS IN SPECIAL
BILL OF EXCHANGE
ISSUE AND FORM OF BILL OF EXCHANGE
(Requirements of bill of exchange)
A bill of exchange contains:
a) the term 'bill of exchange' inserted in the text of the instrument and
expressed in the language employed in drawing up the instrument;
b) an unconditional order to pay an exact sum of money;
c) the name of the person who is to pay (drawee);
d) an indication of the time of payment;
e) an indication of the place where payment is to be made;
f) the name of the person to whom or to whose order payment is to be made;
g) an indication of the date on which and the place where the bill is issued;
h) the signature of the person who issues the bill (drawer).
(Lack of any requirement)
1. An instrument in which any of the requirements mentioned in the preceding
article is lacking is invalid as a bill of exchange, except in the cases
specified in the following paragraphs.
2. A bill of exchange in which the time of payment is not specified shall be
deemed to be payable on sight.
3. In the absence of a special indication, the place specified beside the
name of the drawee is deemed to be the place of payment, and at the same time
the place of domicile of the drawee.
4. A bill of exchange which does not mention the place of its issue is deemed
to have been drawn in the place mentioned beside the name of the drawer.
(Types of draw)
A bill of exchange can be drawn:
a) payable to drawer's order;
b) on the drawer himself;
c) by order and for the account of a third party.
(Payment at domicile of third party)
A bill of exchange can be payable at the domicile of a third party, either in
the locality where the drawee has his domicile, or in another locality.
(Stipulation of interest)
1. If a bill of exchange is payable on sight, or at a fixed period after
sight, the drawer can stipulate that the sum payable shall bear interest. In any
other type of bill of exchange this stipulation shall be deemed not to be
2. The rate of interest must be specified in the bill; in default of such
specification, the stipulation shall be deemed not to be written.
3. Interest runs from the date of the bill of exchange, if no other date is
(Discrepancy in indication of sum payable)
1. If the sum payable by a bill of exchange is expressed in words and also in
figures, and there is a discrepancy between the two, the sum denoted by the
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 between the
various amounts, the smaller sum prevails.
(Independence of valid signatures)
If a bill 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 could not bind the persons who
signed the bill of exchange, or on whose behalf it was signed, the obligations
of the other persons who signed it do not cease to be valid for such reason.
(Representation without powers or with abuse of power)
Whoever puts his signature on a bill of exchange as representing a person
whom he in fact had no power to act on behalf of, is himself bound as a party to
the bill and, if he pays, has the same rights as the person for whom he
purported to act. The same rule applies to a representative who has exceeded his
(Liability of drawer)
1. A drawer guarantees both acceptance and payment of a bill of exchange.
2. The drawer can release himself from guaranteeing acceptance; every
stipulation by which he releases himself from the guarantee of payment is deemed
not to be written.
(Breach of agreement to complete bill)
If a bill of exchange, which was incomplete when issued, has been completed
not in accordance with the agreements entered into, the breach of such
agreements cannot be invoked against the holder unless he has acquired the bill
of exchange in bad faith or, in acquiring it, has been guilty of gross
(Methods of transfer)
1. Every bill of exchange, even if not expressly drawn to order, can be
transferred by means of endorsement.
2. If the drawer has inserted in a bill of exchange the words 'not to order' or
an equivalent expression, the instrument can only be transferred according to
the form, and with the effects of an ordinary assignment of credits.
3. A bill can be endorsed even in favor of the drawee, whether he has
accepted or not, or of the drawer, or of any other party to the bill. These
persons can re-endorse the bill of exchange.
(Types of endorsement)
1. An endorsement must be unconditional. Any condition to which it is made
subject is deemed not written.
2. A partial endorsement shall be void.
3. An endorsement to bearer is valid as a blank endorsement.
(Form of endorsement)
1. An endorsement must be written on the bill of exchange or on a slip
affixed to it (attachment). It must be signed by the endorser.
2. An endorsement can leave the beneficiary unspecified, or can consist
simply of the signature of the endorser (blank endorsement). In the latter case,
the endorsement, to be valid, must be written on the back of the bill of
exchange or on the slip attached to it.
(Effects of endorsement. Blank endorsement)
1. An endorsement transfers all the rights arising from a bill of exchange.
2. If an endorsement is blank, the holder can:
a) fill up the blank either with his own name or with the name of another
b) re-endorse the bill in blank, or to some other person;
c) transfer the bill to a third party without filling the blank, and without
(Liability of endorser)
1. In the absence of a stipulation to the contrary, an endorser guarantees
acceptance and payment of a bill of exchange.
2. The endorser can prohibit any further endorsement; in this case, he gives
no guarantee of payment to persons to whom the bill is subsequently endorsed.
(Requirements of legitimacy of holder)
1. The detainer of a bill of exchange is deemed to be its lawful holder if he
establishes his title through an uninterrupted series of endorsements, even if
the last endorsement is blank. In this connection, cancelled endorsements are
deemed not written. If a blank endorsement is followed by another endorsement,
the person who signed this last endorsement is deemed to have acquired the bill
by means of the blank endorsement.
2. If a person has been in any manner dispossessed of a bill of exchange, the
holder who establishes his right in the manner mentioned in the previous
paragraph is not bound to give up the bill unless he has acquired it in bad
faith, or unless in acquiring it he has been guilty of gross negligence.
(Defenses that cannot be invoked against a holder)
Persons sued on the basis of a bill of exchange cannot invoke against the
holder defenses founded 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.
(Endorsement in representation)
1. If an endorsement contains the statements 'value in collection', 'for
collection', 'in agency' or any other phrase implying a simple mandate, the
holder can exercise all rights arising from of the bill of exchange, but he can
only endorse it in his capacity of representative.
2. In this case, the parties liable can only invoke against the holder
defenses which could be invoked against the endorser.
3. The mandate contained in an endorsement by procuration is not extinguished
by reason of the death of the party giving the mandate, or by his supervening
(Endorsement in guarantee)
1. If an endorsement contains the statements 'value in security', 'value in
pledge', or any other statement implying a guarantee, the holder can exercise
all the rights arising from the bill of exchange, but an endorsement by him has
only the effects of an endorsement in procuration.
2. The liable parties cannot invoke against the holder defenses founded on
their personal relations with the endorser, unless the holder, in receiving the
bill, has knowingly acted to the detriment of the debtor.
(Endorsement after maturity)
1. An endorsement after maturity has the same effects as an endorsement
before maturity. However, an endorsement after protest for non-payment, or after
the expiry of the time limit fixed for drawing up the protest, operates only as
an ordinary assignment of credits.
2. Except if there is proof to the contrary, an undated endorsement is deemed
to have been made before the expiry of the time limit fixed for drawing up the
(Presentation for acceptance)
Until maturity, a bill of exchange can be presented to the drawee for
acceptance at his domicile, by the holder or even by a mere detainer.
(Stipulations relating to acceptance)
1. In any bill of exchange, the drawer can stipulate that it shall be
presented for acceptance with or without fixing a time limit.
2. Except in the case of a bill payable at the domicile of a third party, or
at a locality other than the domicile of the drawee, or, except in the case of a
bill drawn payable at a fixed period after sight, the drawer can prohibit
presentation for acceptance, in the bill itself.
3. The drawer can also stipulate that presentation for acceptance shall not
take place before a certain date.
4. Except if the drawer has prohibited acceptance, every endorser can
stipulate that the bill shall be presented for acceptance, with or without a
time limit for presentation.
(Time limit for presentation for acceptance)
1. Bills of exchange payable at a fixed period after sight must be presented
for acceptance within one year of their date.
2. A drawer can shorten or extend this period.
3. These periods can be shortened by endorsers.
(Second presentation for acceptance)
1. A drawee can demand that a bill shall be presented to him a second time on
the day after the first presentation; interested parties are only allowed to
invoke non-compliance with this demand if it is mentioned in the protest.
2. The holder is not obliged to surrender to the drawee a bill presented for
(How to express acceptance)
1. Acceptance shall be written on the bill of exchange itself. It is
expressed by the word 'accepted' or any other equivalent; the acceptance shall
be signed by the drawee. The mere signature of the drawee on the face of the
bill constitutes an acceptance.
2. If a bill is payable at a certain time after sight, or if it must be
presented for acceptance within a certain time limit in accordance with a
special stipulation, such acceptance must be dated as of the day when the
acceptance is given, unless the holder requires that it be dated as of the day
of presentation. If it is undated, the holder, in order to preserve his right of
recourse against the endorsers and the drawer, must certify the omission by a
protest drawn up within the proper time.
(Types of acceptance)
1. An acceptance is unconditional, but the drawee can restrict it to part of
the sum payable.
2. Any other modification introduced by an acceptance in the text of a bill
of exchange is equivalent to a refusal to accept. However, the acceptor is bound
according to the terms of his acceptance.
(Place of payment)
1. If the drawer has indicated in the bill a place of payment other than the
domicile of the drawee, without specifying a third party at whose domicile
payment must be made, the drawee can name such third party at the time of
acceptance. In default of such indication, the acceptor is deemed to have
himself undertaken to pay at the place of payment mentioned in the bill.
2. If a bill is payable at the domicile of the drawee, the latter can in his
acceptance indicate another address in the same place where payment is to be
(Obligations of acceptor)
1. By accepting, a drawee undertakes to pay the bill of exchange at its
2. In default of payment, the holder, even if he is the drawer, has a right
of action arising from the bill of exchange against the acceptor, in relation to
all that can be demanded in accordance with articles 1181 and 1182.
(Cancellation of an acceptance already given)
1. Where a drawee who has accepted a bill has crossed it before returning the
bill, acceptance is deemed to be refused; unless there is proof to the contrary,
such cancellation is deemed to have taken place before the bill was returned.
2. However, if the drawee has notified to the holder, or to any party who has
signed the bill, his acceptance in writing, he is liable towards such parties
according to the terms of his acceptance.
(Function of 'aval')
1. Payment of a bill of exchange can be guaranteed by an 'aval' as to the
whole or part of its amount.
2. This guarantee can be given by a third party or even by a person who has
signed as a party to the bill.
(Form of 'aval')
1. An 'aval' shall be written either on the bill itself or on an attached slip.
2. It is expressed by the words 'good as aval' or by any other equivalent
formula; it is signed by the giver of the 'aval'.
3. It is deemed to be constituted by the mere signature of the giver of the
'aval' placed on the face of the bill, except in case of the signature of the
drawee or the drawer.
4. An 'aval' must specify for whose account it is given. In the absence of
indication, it is deemed to be given for the drawer.
(Responsibility of giver of 'aval')
1. The giver of an 'aval' is bound in the same manner as the person for whom
he has become guarantor.
2. His obligation is valid even if the liability which he has guaranteed is
void for any reason other than defect of form.
3. If the giver of 'aval' pays a bill of exchange, he is subrogated in the
rights arising from the bill of exchange against the person guaranteed, and
against those who are liable to the latter on basis of the bill of exchange.
(Types of maturity)
1. A bill of exchange can be drawn payable:
a) on sight;
b) at a fixed period after sight;
c) at a fixed period after date;
d) on a fixed date.
2. Bills of exchange with different maturities or maturing by installments
(Maturity of a bill of exchange payable on sight)
1. A sight bill of exchange is payable on presentation. It must be presented
for payment within a year of its date. The drawer can shorten or extend this
period. These periods can be shortened by the endorsers.
2. The drawer can stipulate that a bill of exchange payable on sight must not
be presented for payment before a named date. In this case, the period for
presentation begins from such date.
(Maturity of a bill of exchange payable at a fixed period after sight)
1. The maturity of a bill of exchange payable at a fixed period after sight
shall be determined either by the date of acceptance or by the date of protest.
2. In the absence of protest, an undated acceptance is deemed, in relation to
the acceptor, to have been given on the last day of the time limit for
presentation for acceptance.
(Maturity in other special cases)
1. If a bill of exchange is drawn at one or more months after date or after
sight, the bill matures on the corresponding date of the month when payment must
be made. If there is no corresponding date, the bill matures on the last day of
2. If a bill of exchange is drawn at one or more months and a half after date
or sight, entire months must first be calculated.
3. If maturity is fixed for the beginning, in the middle, or at the end of
the month, it is understood that the bill of exchange shall mature on the first,
15th, or last day of such month.
4. The expressions 'eight days' or 'fifteen days' indicate not one or two
weeks, but a period of eight or fifteen actual days.
5. The expression 'half-month' means a period of fifteen days.
(Maturity in case of different calendars)
1. If a bill of exchange is payable on a fixed day at a place where the
calendar is different from the calendar in the place of issue, the day of
maturity is deemed to be fixed according to the calendar of the place of
2. If a bill of exchange drawn between two places having different calendars
is payable at a fixed period after sight, the day of issue shall refer to the
corresponding day of the calendar of the date of maturity.
3. The time for presenting bills of exchange shall be calculated in
accordance with the rules of the previous paragraph.
4. These rules do not apply if a clause in the bill or even the mere text of the
instrument indicate an intention to adopt different rules.
(Time limit for presentation for payment)
1. The holder of a bill of exchange payable on a fixed day or at a fixed
period after date or after sight must present the bill for payment either on the
day on which it is payable or on one of the two following business days.
2. Presentation of a bill of exchange at a clearing-house is equivalent to
presentation for payment.
(Rights of drawee who pays. Partial payment)
1. A drawee who pays a bill of exchange can demand that it shall be handed to
him, with a receipt.
2. The holder cannot refuse any partial payment.
3. In case of partial payment the drawee can demand that mention of such
payment shall be made on the bill, and that a receipt be given to him.
(Payment before and on maturity)
1. The holder of a bill of exchange cannot be compelled to receive its
payment before maturity.
2. A drawee who pays before maturity does so at his own risk.
3. Whoever pays on maturity is validly discharged, unless he has been guilty
of fraud or gross negligence. He is bound to verify the regularity of the series
of endorsements, but not the signature of the endorsers.
(Currency in which payment should be made)
1. If a bill of exchange is drawn payable in a currency which is not legal
tender in the place of payment, the sum payable can be paid in the currency of
the country, according to its value at the date of maturity. If the debtor is in
delay, the holder can, by his choice, demand that the amount of the bill be paid
in the currency of the country according to the rate on the day of maturity or
the day of payment.
2. The usage of the place of payment determines the value of foreign currency.
However, the drawer can stipulate that the sum payable shall be calculated
according to a rate set in the bill.
3. The previous rules shall not apply to the case in which the drawer has
stipulated that payment must be made in a certain specified currency (clause for
effective payment in foreign currency).
4. If the amount of the bill of exchange is specified in a currency having
the same denomination, but a different value in the country of issue and the
country of payment, reference is deemed to be made to the currency of the place
If a bill of exchange is not presented for payment within the time limit
fixed by article 1171, any debtor has the power to deposit the amount with the
competent authority at the expense and risk of the holder.
ACTION FOR NON-ACCEPTANCE AND NON-PAYMENT
(Against whom action for payment can be initiated)
1. If payment has not been made, a holder can exercise his right of recourse
against the endorsers, the drawer, and other liable parties, on maturity.
2. Even before maturity:
a) if there has been total or partial refusal of acceptance;
b) in case of the bankruptcy of the drawee, whether he has accepted or not,
or in the event of a suspension of payments on his part, even if not declared by
a judicial decision, or if an execution of his assets has been unsuccessfully
c) in the event of bankruptcy of the drawer of a non-acceptable bill.
(Protest for non-acceptance or non-payment)
1. Refusal of acceptance or of payment must be evidenced by a formal act
(protest for non-acceptance or non-payment).
2. Protest for non-acceptance must be made within the time limit set for
presentation for acceptance. In the case contemplated by paragraph 1 of article
1157, if the first presentation takes place on the last day of the time limit,
the protest can still be drawn up on the next day.
3. Protest for non-payment of a bill of exchange payable on a fixed day or at
a fixed period after date or after sight must be made on one of the two business
days following the day on which the bill is payable. In case of a bill payable
on sight, the protest must be drawn up under the conditions specified in the
previous paragraph for the drawing up of a protest for non-acceptance.
4. Protest for non-acceptance dispenses with presentation for payment and
protest for non-payment.
5. In case of suspension of payments by the drawee, whether he has accepted
or not, or if an execution of his assets has been unsuccessfully attempted, the
holder of the bill of exchange can only exercise his right of recourse after
presentation of the bill to the drawee for payment, and after the protest has
been drawn up.
6. If the drawee, whether he has accepted or not, is declared bankrupt, or in
case of declared bankruptcy of the drawer of a non-acceptable bill, the
presentation of the judicial decision declaring the bankruptcy shall suffice to
enable the holder to exercise his right of recourse.
(Notice of non-acceptance or non-payment)
1. A holder must give notice of non-acceptance or non-payment to his endorser
and to the drawer within the four business days which follow the day for protest
or the day for presentation, in case the bill of exchange contains the clause 'no
expenses'. Each endorser must, within the two business days following the
day on which he receives notice, notify his endorser of the notice he has
received, mentioning the names and addresses of those who have sent the previous
notices, and so on through the series until the drawer is reached. The periods
mentioned above run from the receipt of the preceding notice.
2. If, in conformity with the previous paragraph, notice is given to a person
who has signed a bill of exchange, the same notice must be given within the same
time limit to his giver of 'aval'.
3. In case an endorser either has not specified his address or has specified
it in an illegible manner, it is sufficient that notice should be given to the
4. A person who must give notice can give it in any form, even by merely
returning the bill of exchange.
5. Such person must prove that he has given notice within the time allowed.
This time limit shall be deemed as having been observed if a letter giving the
notice has been posted within the prescribed time.
6. A person who does not give notice within the time limit mentioned above
does not forfeit his rights; he is responsible for damage, if any, caused by his
negligence, but his liability shall not exceed the amount of the bill of
(Clause dispensing protest)
1. A drawer, an endorser, or a giver of 'aval' can, by means of the clause
'no expenses', 'no protest', or any other equivalent, release the holder from
having to draw up a protest of non-acceptance or non-payment in order to be
able to exercise his right of recourse.
2. Such clause does not release the holder from presenting the bill within
the prescribed time, or from the notices he has to give. The burden of proving
the non-observance of the time limits falls upon the person who seeks to invoke
it against the holder.
3. If the clause is written by the drawer, it produces its effect in relation
to all persons who have signed the bill of exchange; if it is written by an
endorser or a giver or 'aval', it produces its effect only in relation to such
endorser or giver of 'aval'. If, in spite of the clause written by the drawer,
the holder has the protest drawn up, he must bear its expenses. If the clause
emanates from an endorser or a giver of 'aval', the expenses of the protest, if
one is drawn up, can be recovered from the persons who have signed the bill.
(Joint and several liability of signatories)
1. All drawers, acceptors, endorsers, or guarantors by 'aval' on a bill of
exchange are jointly and severally liable towards the holder.
2. The holder has a right of recourse against all such persons, individually
or collectively, without being required to observe the order in which they have
3. The same right is held by any signatory of the bill of exchange who has
4. Proceedings against one of the liable parties do not prevent proceedings
against the others, even those parties subsequent to the party first proceeded
(Rights of holder against person proceeded against)
1. A holder can recover from the person against whom he exercises his right
a) the amount of the non-accepted or unpaid bill of exchange, with interest
if so stipulated;
b) interest at the rate of 6%, from the date of maturity;
c) expenses of protest and of notices given, as well as other expenses.
2. If the right of recourse is exercised before maturity, the amount of the
bill shall be subject to a discount. This discount shall be calculated according
to the official rate of discount (bank-rate) applicable on the date on which
recourse is exercised at the place of domicile of the holder.
[Portuguese version as amended by Law no.
6/2000, of April 27]
(Rights of who has paid)
A person who pays a bill of exchange can recover from his guarantors:
a) the entire sum he has paid;
b) interest on such sum, calculated at the rate of 6%, from the day on which
c) any expenses made.
[Portuguese version as amended by Law no.
6/2000, of April 27]
(Return of bill of exchange and elimination of endorsements)
1. Any liable party against whom a right of recourse has been or can be
exercised, can demand, provided that he pays it, that the bill of exchange be
given up to him with the protest and a receipt.
2. Any endorser who has paid a bill of exchange can cross his own endorsement
and those of subsequent endorsers.
(Total payment in case of partial acceptance)
In the case of exercise of the right of recourse after a partial acceptance,
the person who pays the sum in respect of which the bill of exchange has not
been accepted can demand that this payment shall be mentioned on the bill and
that he shall be given a receipt for it. The holder must also give him a
certified copy of the bill and the protest, in order to enable subsequent
recourse to be exercised.
(Right of redraft)
1. Any person who has a right to recourse can, in the absence of a
stipulation to the contrary, reimburse himself by means of a new bill (redraft)
to be drawn on sight on one of the parties liable to him and payable at the
domicile of such party.
2. A redraft shall include, in addition to the sums mentioned in articles
1181 and 1182, brokerage and the cost of stamping the redraft.
3. If the redraft is drawn by the holder, the sum payable shall be set
according to the rate for a sight bill, drawn at the place where the original
bill was payable upon the party liable at the place of his domicile. If the
redraft is drawn by an endorser, the sum payable shall be set according to the
rate for a sight bill drawn at the place where the drawer of the redraft is
domiciled upon the place of domicile of the liable party.
(Extinction of right of recourse against signatories other than an acceptor)
1. After the expiry of the time limits set:
a) for the presentation of a bill of exchange drawn on sight or at a fixed
period after sight;
b) for drawing up the protest for non-acceptance or non-payment;
c) for presentation for payment in the case of the stipulation 'no expenses'; the holder loses his rights of recourse against the endorsers, against the
drawer, and against other liable parties, with the exception of the acceptor.
2. In default of presentation for acceptance within the time limit stipulated
by the drawer, the holder loses his right of recourse for non-payment, as well
as for non-acceptance, unless it arises from the terms of the stipulation that
the drawer only intended to release himself from the guarantee of acceptance.
3. If the stipulation of a time limit for presentation is contained in an
endorsement, only the endorser can avail himself of it.
(Extension of time limits due to force majeure)
1. If the presentation of a bill of exchange, or the drawing up of a protest
within the prescribed time limits, is prevented by an insurmountable cause
(legal provisions declared by any State or other case of force majeure), these
time limits shall be extended.
2. A holder shall immediately give notice of the case of force majeure to his
endorser and specify this notice, which he must date and sign, on the bill or on
an attached slip; in other respects the provisions of article 1178 shall apply.
3. Provided that the case of force majeure has ceased, the holder must
without delay present the bill of exchange for acceptance or payment and, if
there is cause for such, draw up a protest.
4. If the case of force majeure continues after 30 days from maturity,
recourse can be exercised without the need for presentation or protest.
5. In case of bills of exchange drawn on sight or at a fixed period after
sight, the time limit of 30 days shall run from the date on which the holder,
even before the expiry of the time limit for presentation, has given notice of
the case of force majeure to his endorser; in the case of bills of exchange
drawn at a certain period after sight, the time limit of 30 days shall be added to
the period after sight specified in the bill of exchange.
6. Facts which are purely personal to the holder or to the person whom he has
entrusted with the presentation of the bill, or drawing up the bill, or drawing
up the protest, are not deemed to constitute force majeure.
(Types of intervention)
1. A drawer, an endorser, or a person giving an 'aval', can specify a person
who is to accept or pay in case of need.
2. A bill of exchange can, under the conditions following, be accepted or
paid by a person who intervenes for the honor of any debtor against whom there
is a right of recourse.
3. The intervenor can be a third party, or even the drawee, or, except the
acceptor, a party already liable on the bill of exchange.
4. The person intervening is bound to give, within two business days, notice
of his intervention to the party for whom he has intervened. If this time limit
is not respected, the intervenor is responsible for any damage arising from his
negligence, but the compensation shall not exceed the amount of the bill of
ACCEPTANCE BY INTERVENTION
(Cases of acceptance by intervention. Consequences of naming an intervenor)
1. Acceptance by intervention can take place in all cases in which the holder
of a bill of exchange which can be accepted has a right of recourse before
2. If a bill of exchange indicates a person who is designated to accept or
pay it in case of need at the place of payment, the holder cannot exercise his
right of recourse before maturity against the one who named such person and
against subsequent signatories, unless he has presented the bill of exchange to
the designated person and, if acceptance has been refused by the latter, a
protest has been drawn up.
3. In other cases of intervention the holder can refuse an acceptance by
intervention. However, if he allows it, he loses his right of recourse before
maturity against the person on whose behalf such acceptance was given and
against subsequent signatories.
(How to draw up acceptance by intervention)
Acceptance by intervention shall be mentioned on the bill of exchange and
signed by the intervenor. It shall mention the person for whose honor it has
been given; in the absence of such mention, the acceptance is deemed to have
been given for the drawer.
(Position of acceptor by intervention)
1. An acceptor by intervention is liable to the holder and to the endorsers
subsequent to the party for whose honor he intervened, in the same manner as
2. Notwithstanding an acceptance by intervention, the party for whose honor
it has been given and his guarantors can require the holder, in exchange for
payment of the sum mentioned in article 1181, to deliver the bill, the protest,
and, if issued, a receipted account.
PAYMENT BY INTERVENTION
(Cases of payment by intervention)
1. Payment by intervention can take place in all cases in which, either at
maturity or before maturity, the holder has a right of recourse on the bill.
2. Payment must include the whole amount payable by the party for whose honor
the intervention was made.
3. Payment must be made at the latest on the day following the last day
allowed for drawing up a protest for non-payment.
(Presentation to intervenors and protest)
1. If a bill of exchange has been accepted by intervenors who are domiciled
in the place of payment, or if persons domiciled there have been named to pay in
case of need, the holder must present the bill to all such persons and, if
necessary, have a protest for non-payment drawn up at latest on the day
following the last day allowed for drawing up the protest.
2. In lack of protest within such time limit, the party who has named the
person to pay in case of need, or for whose account the bill has been accepted,
and the subsequent endorsers, shall be released.
(Effect of refusal of payment by intervention)
A holder who refuses payment by intervention loses his right of recourse
against any persons who would have been discharged.
(Evidence of payment by intervention)
1. Payment by intervention must be verified by a receipt given on the bill of
exchange, mentioning the person for whose honor payment has been made. In lack
of such mention, payment is deemed to have been made for the honor of the
2. The bill of exchange and the protest, if any, must be handed to the person
paying by intervention.
(Rights of intervenor who pays. Preference among intervenors)
1. A person paying by intervention shall be subrogated in the rights arising
from the bill of exchange against the party for whose honor he has paid, and
against persons who are liable to the latter on the basis of the bill of
exchange. However, he cannot re-endorse the bill of exchange.
2. Endorsers subsequent to the party for whose honor payment has been made
shall be discharged.
3. If various persons are willing to pay by intervention, the person whose
payment releases a greater number of persons has preference. Any person who,
with knowledge of the facts, intervenes in a manner contrary to this rule, loses
his right of recourse against those who would have been discharged.
PARTS OF A SET AND COPIES
PARTS OF A SET
(Draw in various parts)
1. A bill of exchange can be drawn in a set of two or more identical parts.
2. The parts must be numbered in the body of the instrument itself; in lack
of such, each part shall be considered as a separate bill of exchange.
3. The holder of a bill which does not specify that it has been drawn as a
single bill can, at his own expense, require delivery of the other parts. For
this purpose, the holder must approach his immediate endorser, so that he may
assist him in proceeding against his own endorser, and so on in the series until
the drawer is reached. The endorsers are obliged to reproduce their endorsements
on the new parts of a set.
(Effect of payment of one part)
1. Payment made on one part of a set operates as a discharge, even if there
is no stipulation that such payment shall annul the effect of the other parts.
However, the drawee is liable for each accepted part which has not been returned
2. An endorser who has transferred parts of a set to various persons, and
also subsequent endorsers, shall be liable for all the parts bearing their
signature which have not been returned.
(Consequence of sending one part for acceptance)
1. A party who has sent one part for acceptance must indicate on the other
parts the name of the person in whose hands the part is. Such person is obliged
to hand it to the lawful holder of another part.
2. If he refuses to do so, the holder can only exercise his right of recourse
after he has had a protest drawn up, specifying:
a) that the part sent for acceptance has not been returned to him on his
b) that acceptance or payment could not be obtained on another of the parts.
(Right to make copies)
1. A holder of a bill of exchange has the right to make copies of it.
2. A copy must reproduce the original exactly, with the endorsements and all
other indications to be found in it. It must specify where the copy ends.
3. A copy can be endorsed and guaranteed by 'aval' in the same manner and
with the same effects as the original.
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