Somaliland Commercial Law


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SOMALILAND DRAFT COMMERCIAL CODE

This Bill was prepared by the Ministry of Commerce, but has, as yet, not finished its legislative journey.

General Provisions

Provisions applicable to persons carrying on trade

Article 1: Scope of Application of Civil and Maritime Codes

1) Unless otherwise provided in this code, the provisions of the Civil Code shall apply to the status and activities of persons and business organizations carrying on a trade.

2) The relevant provisions of the Maritime Code shall apply to persons and business organizations carrying on maritime trade.

Article 2: Traders

Persons who professionally and for gain carry on any of the following activities shall be deemed to be traders:

a) Purchase of movables or immovable with a view to re-selling them either as they are or after alteration or adaptation;

b) Purchase of movables with a view of letting them for hive;

c) Warehousing and storage activities

d) Exploitation of mines, including prospecting for and working of mineral oils;

e) Exploitation of quarries not by handicraftsmen;

f) Exploitation of salt pans;

g) Conversion and adaptation of chattels, such as foodstuffs, raw materials or semi-finished products not by handicraftsmen;

h) Building, repairs, maintaining, cleaning, painting or dyeing movables not by handicraftsmen;

i) Embanking, leveling, trenching or draining carried out for a third party not by handicraftsmen

j) Carriage of goods or persons not by handicraftsmen;

k) Printing and engraving and works connected with photography or cinematography not by handicraftsmen;

l) Capturing, distributing and supplying water;

m) Producing, distributing and supplying electricity, gas, compressed air including heating and cooling;

n) Operating places of entertainment or radio or television stations;

o) Operating hotels, restaurants, bars, cafes, inns, hairdressing establishments not operated by handicraftsmen and public baths and toilets;

p) Publishing in whatever form, and in particular by means of printing, engraving, photography or recording;

q) Operating news and information services;

r) Operating travel and publicity agencies;

s) Operating business as an agent, broker, stock broker or commercial agent;

t) Operating a banking and money changing business, and

u) Operating an insurance business.

Article 3

1) The provisions of this code relating to traders shall not apply to handicraftsmen.

2) Handicraftsmen are persons who carry on an independent activity, who live mainly on their own manual work, who may carry on their activity with the assistance of members of their family and of not more than three employees or apprentices and who by such material only as is necessary for carrying out their activities, without setting up stocks.

3) Handicraftsmen may use mechanical power

4) Handicraftsmen are subject to the provision of any special law relating to their activities.

Article 4

Persons incapable under the civil code

Persons incapable under the civil code may not carry on any trade.

Article 5

Right to act as a trader, prohibitions and restrictions:

1) Subject to such prohibitions or lawful restrictions regarding unfair competition as may be prescribed, any person or business organization has the right to carry on any trade in accordance with the provisions regulating such trade. With the provisions regulating such trade.

2) Particular persons may be restricted or prevented from acting as traders or from carrying on a particular trade by legal provisions setting up prohibitions or incompatibilities.

3) Law in respect of particular trades may impose specific requirements as to age, qualifications, sex, nationality or license.

Article 6

Effect of Prohibitions and Restrictions

1) Persons who carry on a trade subject to prohibition or restriction or without having the prescribed qualifications shall be liable to the penalties provided by law.

2) Persons who carry on a trade subject to prohibition or restriction may not invoke the said prohibition or restriction to free themselves from liabilities incurred in carrying on a trade subject to prohibition or restriction. They may not hold themselves out to be traders to third parties but they shall be liable as though they were traders.

CHAPTER ONE

COMMERCIAL EMPLOYEES

Article 7

Definitions

1) Commercial employees are persons who are bound to a trader by a contract of employment and who assist the trader by doing work of a non-manual nature as a salesman, secretary, accountant, guardian, inspector or director.

2) Commercial employees are not traders.

Article 8: Labour Code Applicable

Without prejudice to the provisions of this code, the provisions of the labour code relating to contracts of employment shall apply to commercial employees.

Article 9: Agents

1) Commercial employees may act as agents by express or tacit agreement.

2) The revocation of the power of agency shall not result in the cancellation of the contract of employment.

Article 10

Powers of employees in charge of sales.

1) The employee in charge of the sales in a store shall be deemed to have power of agency for the purpose of selling or receiving goods, which come within the normal business activities of stores of such nature.

2) He may demand that goods sold by him be paid to him, unless payment is to be made to a special account.

3) The employee may not demand payment outside the store unless so expressly authorized or unless he produces a receipt signed by the trader.

Article 11: Managers

Definition

1) A manager is a person who has been authorized, expressly or tacitly to carryout acts of management and to sign in the name of the trader.

2) A manager is not a trader.

Article 12: Publicity

1) Where a manager has been appointed, the trader shall cause an entry to be made in the commercial register.

2) The manager shall have power to act by virtue of his appointment, notwithstanding that the provisions of sub-article (1) have not been complied with.

Article 13: Power of Manager

1) In his relations with third parties, the manager shall be deemed to have full power to carry out all acts of management connected with the exercise of the trade, including the power to sign a negotiable instrument.

2) Unless expressly authorized to do so, he may not sell or pledge immovable property, nor may he sell, hire or pledge a business.

Article 14: Commercial Representatives

1) A commercial representative is a person, not domiciled at the place where the head office of the business is situate and bound to a trader by a contract of employment, who is entrusted by the trader with visiting clients in a specified area and offering to them goods and services in the name and on behalf of the trader.

2) Unless otherwise agreed, contracts entered into by a commercial representatives shall become effective without confirmation by the trader.

3) Commercial representatives are not traders.

Article 15: Commercial Agents

Definitions

1) A commercial agent is a person or business organization, not bound to a trader by a contract of employment and carrying out independent activities, who is entrusted by a trader with representing him permanently in a specified area and dealing or making agreements in the name and on behalf of the trader.

2) Unless otherwise provided in the agency agreement, contracts entered into by a commercial agent shall become effective without confirmation by the trader.

3) A commercial agent normally acts as agent and may act as broker.

Article 16: Commercial Brokers

Definition

1) A commercial broker is a person or business organization who, independently, professionally and for gain, brings parties together for the purpose of their entering into an agreement such as a contract of sale, lease, insurance or carriage.

2) A commercial broker is a trader, regardless of the parties he brings together and of the nature and object of the contract for the completion of which he acts as an intermediary.

Article 17: Notice to Parties

1) Unless customary or otherwise agreed, a commercial broker shall, where the parties have agreed to enter into a contract, inform both parties of the terms of the proposed contract.

2) Unless otherwise agreed, the proposed contract shall not become effective unless it is confirmed by both parties.

Article 18: Commission Agents

Definition

1) A commission agent is a person or business organization who, independently, professionally and for gain, undertakes to buy or to sell in his name, but on behalf of the principal, goods, movables or any other thing of a similar nature, or to enter in his name but on behalf of the principal into a contract of carriage of goods.

2) A commission agent is a trader, regardless of the parties and of the nature and object of the contract.

Article 19: Commercial Register

The commercial register shall be kept in Hargeisa by the department of commerce of the ministry of commerce

Article 20: Official Commercial Bulletin

1) All principal or subsidiary entries and all complementary entries, alterations or deletions shall be published in the official commercial bulletin

2) The department of commerce of the ministry of commerce shall issue the official commercial bulletin.

Article 21: Requirements to Issue Commercial License

The following documents are required prior the issuance of commercial license by the ministry of commerce:

a) Application to obtain a license

b) Statement of registration signed by the attorney-general

c) Articles of association,

d) Fixed asset

e) Bank balance of 5,000,00 SL shillings (Deposit)

f) Police testimony

g) Tax clearance certificate

h) Membership registration of chamber of commerce.

Article 22: Prohibition

No person shall engage in any commercial activity unless registered in the commercial register.

Article 23: Effective Date of Registration

Registration shall be effective from the date of entry of the commercial register.

Article 24: Cancellation of Registration

1) The ministry of commerce shall decide to cancel the registration after being aware of the fact that either the business person has ceased to operate his business or there is a lawful decision prohibiting him to carry on his business.

2) Any registered person may apply for the registration to be cancelled within two months from his ceasing to carry on trade.

3) The heirs of a deceased trader shall apply for the registration to be cancelled within two months from the death.

4) Where the heirs carry on the trade under joint ownership, they shall apply for a new registration to be entered.

5) Where the joint ownership is dissolved the entry made under sub-article (4) shall be cancelled and the person to whom the business is assigned shall apply for a new registration.

6) Where a business organization is dissolved and wound-up, the liquidators shall apply for the registration of the business organization in the commercial register to be cancelled. The business organization shall have no legal personality after cancellation has been published in the official commercial bulletin.

7) The business person whose registration is cancelled shall get upon his request a certificate of cancellation of registration on payment of the fee prescribed by the regulations.

Article 25: Issuance of Substitute Commercial License

Any person whose commercial license is lost or damaged may apply in writing to the ministry of commerce to obtain a substitute commercial license upon payment of the fee prescribed by the regulations.

Article 26: Registration of Trade Names

Trade names shall be registered with commercial license.

CHAPTER TWO

PARTNERSHIP

Article 27

Definition

1) Partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

2) A partnership can not be formed with more than ten persons in banking and twenty persons in other types of business.

A partnership with persons exceeding the above limits must be registered under a companies Act.

Article 28: Contributions

1) Each partner shall make a contribution, which may be in money, debts, other property or skill.

2) Unless otherwise agreed, contributions shall be equal and of the nature and extent required for carrying out the purposes of the partnership.

Article 29: Partners

Any person who has the capacity to enter into a contract can be a partner.

Article 30: Joint Ownership

1) The provisions of this chapter shall not apply to joint ownership, where several persons for reasons outside their control hold property.

2) Joint owners may agree to create a partnership for the management of the property jointly owned.

Article 31: The Partnership Agreement

The partners shall draw up the partnership agreement. It shall contain:

1) The name, address and nationality of each partner

2) The firm-name,

3) The head office and branches, if any;

4) The nature of business;

5) Place of business and the business address;

6) Duration of the partnership and the mode of dissolution;

7) The amount of capital to be contributed by each partner,

8) The share of profits to be taken by each partner;

9) The mode of management.

10) The powers of the partners;

11) Term on which a partner can retire;

12) Expulsion of partners; and

13) Introduction of new partners.

Article 32: Registration of Partnerships

1) The registration of a partnership is not compulsory but optional;

2) Where a partnership is to be registered, the following statement must be released to the commercial registrar, without prejudice article 21 of the commercial code:

a) The firm-name;

b) The place or principle place of business of the firm;

c) The branch names, if any;

d) The date when each partner joined the firm;

e) The names in full and permanent addresses of the partners,

f) The duration of the firm.

3) The statement, mentioned under sub-article (2) of this article must be signed and verified by all the partners or their agents specially authorized on this behalf.

4) Unregistered firms cannot file suits or claim set-off.

Article 33: Modification of the Agreement

1) The partnership agreement may be varied only with the consent of all the partners.

2) The partnership agreement may contain a clause providing for the variation of a particular clause with the consent of the majority of the partners.

Article 34: Majority

1) Where the law or the partnership agreement provides that a decision may be taken by a majority of the partners, the majority means a majority of the individual partners.

2) The partnership agreement may provide that the majority shall be calculated on a majority holding in the partnership.

Article 35: Rights and Duties of Partners

1) Partners are bound to carry on the business of the firm to be greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner or his legal representative.

2) Every partner shall indemnity the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

3) A partner is not entitled to receive remuneration for taking part in the conduct of business;

Article 36: Management of a Firm

Subject to any agreement to the contrary, the following rules apply as regards the management of a firm:

a) Every partner has a right to take part in the conduct of the business;

b) Every partner is bound to attend diligently to his duties in the conduct of the business;

c) Any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right so express his opinion before the matter is decided but no change may be made in the nature of the business without the consent of all the partners; and

d) Every partner has a right to have access so and to inspect and copy any of the books of the firm.

Article 37: Profit Sharing

1) The partners shall share all profits, which by their nature are partnership profits.

2) Unless otherwise agreed, every partner may require that the profits be distributed immediately after approval of the management report.

Article 38: Manner of Distributing Profits and Losses

1) Unless otherwise agreed, every partner shall have an equal share in the profits and losses, irrespective of his contribution.

2) If the agreement specifies either the share in the profits or the share in the losses, this provision shall apply equally to the share of profits and losses.

Article 39: Reports

1) Where a partnership continues for more than one year, the partners may require a report on the management to be prepared at the end of each year.

2) Any provision in a partnership agreement for reports to be submitted at intervals exceeding twelve months shall be of no effect.

Article 40: Use of Partnership Property

1) Property, debts and rights brought into or acquired by the partnership shall belong to the partners in common under the terms of the partnership agreement.

2) No partner may use partnership property against the interests of the partnership or so as to prevent his co-partners from using such property in accordance with their rights.

Article 41: Relations of the Partnership with third Parties

1) Every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.

2) Where, by the wrong full act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefore to the same extent as the partner.

Article 42: Creditors of the Partnership

1) The creditors of the partnership may claim against partnership assets.

2) They may also claim against the personal property of the partners who shall, unless otherwise agreed, be jointly and severally liable to them for the obligations of the partnership. A partner who is sued on his personal property may require, as though he were a guarantor, that the creditor first distain the property of the partnership.

Article 43

A person who is a debtor of the partnership may not set-off a debt against one of the partners.

Article 44: Rights of In-coming Partners

A new partner can be introduced only with the consent of all the partners. The share of profits which a new partner is entitled to get is fixed at the fines he becomes a partner. He is liable for all the debts of the firm after the date of his admission but he is not responsible for any act of the firm done before he became a partner, unless otherwise agreed.

Article 45: Dissolution and Winding-up of Partnership

Definitions

1) Dissolution of a firm means the end of a firm by the break up of the relation of partnership between all the partners.

Article 46: Grounds for Dissolution

1) A partnership may be dissolved any time with the consent of all the partners of the firm.

2) A partnership shall be dissolved where one of the partners dies or is no longer able, under the law, to be a partner.

3) A partnership shall be dissolved where a partner is declared bankrupt.

4) The partnership may by agreement continue as between the remaining partners, or with the heirs or representatives of the deceased, in cable or bankrupt partner.

5) The happening of an event, which makes the business of the firm unlawful, may dissolve a partnership.

Article 47: Expulsion of a Partner

The court may order the expulsion of a partner for good cause and the partnership shall continue as between the remaining partners.

Article 48: Paying out Partner Leaving

1) Where a partner leaves a partnership and partnership continues as between the other partners, the rights of the partner who has left shall be settled in cash, on the basis of the value of his rights on the bay when he leaves the partnership.

2) A partner who leaves the partnership shall share in the profits and losses arising from dealings completed or outstanding on the day when he leaves.

3) He shall be liable to third parties for all dealings made prior to his leaving.

Article 49: Partnership for an Indefinite Period

1) Where a partnership is entered into for an undefined period or for the life of one of the partners, or where the power to dissolve on notice is provided in the agreement, every partner may bring about its dissolution by giving six months notice.

2) Notice to dissolve shall be given in good faith and not unreasonable.

3) Notice to dissolve shall be deemed to be unreasonable where the situation is not determined and the dissolution of the partnership should be postponed.

Article 50: Withdrawal of a Partner

Where a partner has given notice to dissolve under the proceeding article, his partners may prevent dissolution by paying out his share, and the partnership shall continue as between the other partners.

Article 51: Powers of Managers after Dissolution

1) The managers shall retain their powers on dissolution until they have made arrangements for the dissolution.

2) During dissolution, they may only exercise such powers as are necessary to complete the dissolution.

Article 52: Appointment of Liquidators

1) After dissolution, one or more liquidators, appointed under the partnership agreement or by all the partners, shall carry out the winding-up.

2) Failing the agreement of the partners, the court shall appoint liquidators.

Article 53: Duties and Responsibilities of Liquidators

1) Unless otherwise provided in the partnership agreement or by law, the liquidators shall have the same duties and responsibilities as managers.

2) The appointment of liquidators may be revoked by the decision of all the partners, or by the court at the request of one partner.

Article 54: Inventory

1) The managers shall hand-over to the liquidators the property of, and documents relating to, the partnership and render an account of their management up to the date of handing over.

2) The liquidators shall draw up an inventory of the assets and liabilities of the partnership.

Article 55: Power of the Liquidators

1) The liquidators shall take all steps necessary to complete the winding-up of the partnership.

2) The liquidators may sell the property of the partnership, represent the partnership in legal proceedings and may comprise or refer to arbitration any matters in issue.

3) The liquidators may not undertake new business in the name of partnership but may complete business already started.

Article 56: Mode of Settling Accounts after Dissolution

The settlement of accounts between partners upon dissolution is to take place in the manner provided for in the partnership agreement. Subject to such an agreement:

1) Losses are to be paid first out of profits, next out of capital, and, lastly, if necessary by the partners individually in the proportions in which they were entitled to share profits. Capital deficiency is to be treated as loss and is to be borne by the partners in proportion to the profit sharing ratio.

2) The assets of the firm including any sums contributed by the partners to make up deficiencies of capital, shall be applied in the following order:

a) In paying the debts of the firm to third parties,

b) In paying to each partner ratably what is due to him from the firm for advances as distinguished from capital;

c) In paying to each partner ratably what is due to him on account of capital; and

d) The residue, if any, shall be divided among the partners in the proportions in which they were entitled to share profits.

3) If a partner become insolvent or otherwise cannot pay his share of the contribution, the capital of the solvent partners cannot be returned in full. In this case, the solvent partners must share ratably the available assets.

Article 57: Sale of Goodwill after Dissolution

In settling the accounts of the partnership after dissolution, the goodwill shall, subject to contract between the partners, be included in the assets and it may be sold either separately or along with other property of the partnership.

Article 58: Rights of Buyer of Goodwill

The purchaser of the goodwill gets the exclusive rights to represent himself as carrying on the old business. He also gets the exclusive right to use the name of the old partnership.

CHAPTER THREE

NEGOTIABLE INSTRUMENTS

Article 59: Form of Negotiable Instruments

An instrument to be negotiable must conform to the following requirements:

a) It must be in writing and signed by the maker or drawer;

b) Must contain an unconditional promise or order to pay a sum certain in money;

c) Must be payable on demand;

d) Must be payable to bearer or to order; and

e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainly.

Article 60: Additional Provisions not affecting negotiability

An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not effected by a provision which

a) Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or

b) Authorizes a confession of judgment if the instrument be not paid at maturity; or

c) Waives the benefit of any law intended for the advantage or protection of the obliger; or

d) Gives the holder an election to require something to be done in lien of payment of money. But nothing in this article shall validate any provision or stipulation otherwise illegal.

Article 61: Omissions; Seal; Particular Money

The validity and negotiable character of an instrument are not affected by the fact that:

a) It is not dated; or

b) Doesn’t specify the value given, or that any value had be given thereof; or

c) Doesn’t specify the place where it is drawn or the place where it is payable; or

d) Bears a seal; or

e) Designates a particular kind of current money in which payment is to be made. But nothing in this article shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument.

Article 62: Instrument Payable on Demand

An instrument is payable on demand:

a) When it is so expressed to be payable on demand, or at sight, or on presentation,

b) In which no time for payment is expressed.

Where an instrument is issued; accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand.

Article 63: Instrument Payable to order

The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It maybe drawn payable to the order of:

a) A payee who is not maker, drawer, or drawee, or

b) The drawer or maker; or

c) The drawee; or

d) Two or more payees jointly; or

e) One or some of several payees; or

f) The holder of an office for the time being.

Where the instrument is payable to order, the payee must be named or otherwise indicated therein with reasonable certainly.

Article 64: Instrument Payable to Bearer

The instrument is payable to bearer:

a) When it is expressed to be so payable; or

b) When it is payable to a person named therein or bearer; or

c) When it is payable to the order of a fictitious or non existing person, and such fact was known to the person making it so payable; or

d) When the name of the payee doesn’t purport to be the name of any person; or

e) When the only or last endorsement is an endorsement in black.

Article 65: Ante-dated and Post-dated

The instrument is not valid for the reason only that it is ante-dated or post-dated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title there to as of the date of delivery.

Article 66: When Date may be Inserted

Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be payable accordingly. The insertion of a wrong date doesn’t avoid the instrument in the hands of a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date.

Article 67: Liability of Person Signing in Trade or Assumed Name

No person is liable on the instrument whose signature doesn’t appear thereon, except as herein otherwise expressly provided. But one who signs in a trade or assumed name will be liable to the same extent as if he had signed in his own name.

Article 68: Signature by Agent

A duly authorized agent may make the signature of any party. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agency.

Article 69: Liability of Person Signing as Agent

Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, doesn’t exempt him from personal liability.

Article 70: Signature by Procreation

A signature by “Procreation” operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority.

Article 71: Effect of Endorsement by Infant or Corporation

The Endorsement or assignment of the instrument by a corporation or by an infant passes the property therein, not with standing the from want of capacity, the corporation or infant may incur no liability thereon.

Article 72: Forged Signature

When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, an no right to retain the instrument, or to give a discharge therefore, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.

I. CONSIDERATION

Article 73: Presumption of Consideration

Every negotiable instrument is deemed prima facial to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value.

Article 74: Value

Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time.

II. NEGOTIATION

Article 75: What Constitutes Negotiation

An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer, it is negotiated by delivery; if payable to order, it is negotiated by the endorsement of the holder and completed by delivery.

Article 76: Endorsement

The endorsement must be written on the instrument itself or upon a paper attached thereto. The signature of the endorser, without additional words, is a sufficient endorsement.

Article 77: Endorsement must be of entire Instrument

The endorsement must be and endorsement of the entire instrument. An endorsement, which purports to transfer to the endorsee a part only of the amount payable, or which purports to transfer the instrument to two or more endorsees severally, doesn’t operate as a negotiation of the instrument. But where the instrument has been paid in part, it may be endorsed as to the residue.

Article 78: Kinds of Endorsement

An endorsement may either be written or in blank.

Article 79: Written Endorsement, Endorsement in Blank

Written endorsement specifies the person to whom, or to whose order, the instrument is to be payable, and the endorsement of such endorsee is necessary to the further negotiation of the instrument. An endorsement in blank specifies no endorsee, and an instrument so endorsed is payable to bearer, and may be negotiated by delivery.

Article 80: Blank Endorsement

The holder may convert a blank endorsement into a written endorsement by writing over the signature of the endorser in blank any contract consistent with the character of the endorsement.

Article 81: Endorsement of Instrument Payable to Bearer

Where an instrument, payable to bearer, is endorsed in writing, it may nevertheless be further negotiated by delivery; but the person endorsing in writing is liable as endorser to only such holders as make title through his endorsement.

Article 82: Endorsement where Payable to two or more Persons

Where an instrument is payable to the order of two or more payees or endorsees who are not partners, all must endorse unless the one endorsing has authority to endorse for the others.

Article 83: Time of Endorsement

Except where an endorsement bears date after the maturity of the instrument, every negotiation is deemed prima facia to have been effected before the instrument was overdue.

Article 84: Place of Endorsement

Except where the contrary appears, every endorsement is presumed prima facia to have been made at the place where the instrument is dated.

Article 85: Transfer without Endorsement

Where the holder of an instrument payable to his order transfers it for value without endorsing it, the transfer vests in the transferee such little as the transferor had therein, and the transferor acquires in addition, the right to have the endorsement of the transferor. But for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the endorsement is actually made.

III. RIGHTS OF THE HOLDER

Article 86: Right to Sue

The holder of a negotiable instrument may sue thereon in his own name; and payment to him in due course discharges the instrument.

Article 87: Holder in due Course

A holder in due course is a holder who has taken the instrument under the following conditions:

a) That it is complete and regular upon its face;

b) That he became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact;

c) That he took it in good faith and for value;

d) That at the time it was negotiated to him, he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.

Article 88: Notice before full Amount is paid

Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefore, he will be deemed a holder in due course only to the extent of the amount therefore paid by him.

Article 89: When Title Defective

The title of a person who negotiates an instrument is defective when he obtained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud.

IV. RIGHTS OF THE HOLDER

Article 90: Liability of Maker

The maker of a negotiable instrument, by making it, engages that he will pay it according to it’s tenor, and admits the existence of the payee and his capacity to indorse.

Article 91: Liability of Drawer

The drawer by drawing the instrument admits the existence of the payee and his capacity to indorse; and engages that, on due presentment, the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negating or limiting his own liability to the holder.

Article 92: Liability of Acceptor

The acceptor by accepting the instrument, engages that he will pay it according to the tenor of his acceptance and admits:

a) The existence of the drawer, the geniuses of his signature, and his capacity and authority to draw the instrument; and