Report No. 11
82 Section 29.-
No change is proposed in section 29.
83. There is no section in the Act which defines the liability of the bearer who negotiates an instrument. In the case of an instrument payable to bearer, he can negotiate it by mere delivery. He is not an indorser, and therefore he does not become liable under the instrument by reason of the negotiation. As section 58 of the English Act says, he is only a transferor by delivery and is not liable on the instrument as his name does not appear on it. His only liability is that he warrants by his negotiation that he has the right to transfer the instrument and that at the time of the transfer he was not aware of any fact which renders it valueless, and no more. We think it is necessary to engraft a provision so defining the liability of a bearer who negotiates an instrument payable to bearer and we have, accordingly, added a section1 on the lines of section 58 of the English Act.
1. Section 68, App I.