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Laws of Macau |
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ORDER INSTRUMENTS
(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 attached slip.
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 instrument.
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 instrument.
(Blank endorsement)
1. A blank endorsement formally legitimizes the bearer of the instrument, provided that such endorsement is in the proper place in the chain of endorsements.
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 endorser;
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 falsified subscriptions.
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.
(Assignment)
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)
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.
(Pledge)
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.
(Blank instruments)
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.
(Void instrument)
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.
(Partial filling)
An instrument can be partly filled; the right to fill in the rest can be transferred.
(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 of representation.
(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 payment.
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.
(Annulment)
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)
Deterioration is regulated by the provisions applicable to bearer instruments for such case.
NOMINATIVE INSTRUMENTS
(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.
(Transfer)
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 register.
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 notarized document.
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.
(Endorsement)
1. If the law does not prohibit it, nominative instruments can be transferred by endorsement.
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 registration.
(Applicability of paragraph 1 of article 1103)
Paragraph 1 of article 1103 is applicable to the transfer of nominative instruments.
(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.
(Usufruct)
The usufructuary of a credit mentioned in a nominative instrument can demand an instrument distinct from that of the owner.
(Pledge)
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 written.
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 specified.
(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 powers.
(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 negligence.
ENDORSEMENT
(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 person;
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 endorsing it.
(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 legal incapacity.
(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 protest.
ACCEPTANCE
(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 acceptance.
(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 made.
(Obligations of acceptor)
1. By accepting, a drawee undertakes to pay the bill of exchange at its maturity.
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.
'AVAL'
Article 1163
(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.
MATURITY
(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 are void.
(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 such month.
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 payment.
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.
PAYMENT
(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 of payment.
(Deposit)
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 attempted;
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 preceding endorser.
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 exchange.
(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 become bound.
3. The same right is held by any signatory of the bill of exchange who has paid it.
4. Proceedings against one of the liable parties do not prevent proceedings against the others, even those parties subsequent to the party first proceeded against.
(Rights of holder against person proceeded against)
1. A holder can recover from the person against whom he exercises his right of recourse:
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 he paid;
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.
INTERVENTION
GENERAL PROVISIONS
(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 exchange.
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 maturity.
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 such party.
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 drawer.
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 to him.
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 demand;
b) that acceptance or payment could not be obtained on another of the parts.
COPIES
(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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