Report No. 11
109. Section 59.-
The two paragraphs of section 59 deal with two different matters. They have, accordingly, been placed under two separate sections.
What is meant by the words 'rights of his transferor' in the first part is that the holder who acquires an instrument after dishonour or after maturity, acquires the instrument 'subject to the equities to which his transferor was subject at the time of acquisition by such holder'. We have added these words, by way of abundant caution, to make the meaning clear.1
The second part, which is at present in the nature of a Proviso is, in fact, a substantive provision as to the rights of a person who becomes the holder of an accommodation instrument, after maturity. No change is proposed in this provision.2
1. Section 49, ibid.
2. Section 50, ibid.