BOOK IV NEGOTIABLE INSTRUMENTS AND BANKING TRANSACTIONS
TITLE I. GENERAL PROVISIONS
Art. 715. - Definitions.
1. A negotiable instrument is any document incorporating a right to an entitlement in such manner that it be not possible to enforce or transfer the right separately from the instrument.
2. The law recognises in particular as negotiable instrument commercial instruments, transferable securities, documents of title to goods.
Art. 716. - Obligations arising out of negotiable instruments.
1. The possessor of a negotiable has a right to the entitlement as expressed in the instrument against presentment of the said instrument to the debtor, on condition that he establishes that he is a lawful possessor in the manner provided by law.
2. The debtor shall only pay against delivery of the instrument.
3. Except in case of fraud or gross negligence on his part, the debtor shall be released by payment at maturity to the person to whom the instrument gives the capacity of creditor, notwithstanding that the said person is not the holder of the right.
Art. 717. - Defences.
1. The debtor may only set up against the holder of the instrument defences based on their personal relations, defences of form and those based on the text of the instrument.
2. He may set up defences based on falsification of signature, lack of capacity or power of representation at the time of issue of the instrument, or on the absence of the necessary conditions for bringing the proceedings.
3. The debtor may not set up against the holder of the instrument defences based on his personal relations with preceding holders, unless the holder, in acquiring the instrument, has knowingly acted to the detriment of the debtor.
Art. 718. - Holder in due course.
No claim for recovery may be made against a person who has acquired a negotiable instrument in due course, in accordance with the rules applying to negotiation.
Art. 719. - Forms of transfer.
According to the forms provided for their transfer, negotiable instruments may be to bearer, in a specified name or to order.
Art. 720. - Conversion of instruments.
1. Negotiable instruments to bearer may be converted into instruments in a specified name by the person issuing them, on the request and at the expense of the possessor.
2. Except where conversion is forbidden by law or expressly by the person issuing the instruments, instruments in a specified name may be converted into instruments to bearer, on the request and at the expense of the holder, the latter establishing his identity and his capacity in accordance with the provisions of Art. 723 (2).
Art. 721. - Instruments to bearer. Transfer and establishment of right by holder.
1. An instrument to bearer shall be transferred by delivery of the instrument.
2. The holder of an instrument to bearer establishes his right to the entitlement as expressed in the instrument by the sole fact of presentment of the said instrument.
Art. 722. - Instruments in a specified name Establishment of right by holder.
The holder of an instrument in a specified name establishes his right to the entitlement as expressed in the instrument by the fact of his designation as beneficiary therein and in the register held by the person issuing the said instrument.
Art. 723. - Instruments in a specified name. Transfer.
1. Instruments in a specified name may be transferred by the entry or the name of the transferee in the instrument and in the register held by the person issuing the said instrument. They may also be transferred by delivery of a new instrument in the name of the new holder. Such delivery shall be entered in the register.
2. A person requesting registration of an instrument in favour of another person, or delivery of a new instrument registered in the name of the latter shall establish his identity and his capacity to dispose thereof under the law. If any of these formalities is required by the transferee, the said transferee shall produce the instrument and establish his rights by deed drawn up by a public officer.
3. The person issuing the instrument shall be liable for making the necessary entries in the register and the instrument.
4. A person who issues and transfers an instrument under this Article shall be liable only for fault.
Art. 724. - instruments to order. Transfer and establishment of right by holder.
1. Instruments to order may be transferred by endorsement, followed by delivery of the instrument to the beneficiary under the transfer.
2. The holder of an instrument to order establishes his right to the entitlement as expressed in the instrument by an uninterrupted series of endorsements, even if the last endorsement is in blank. Cancelled endorsements shall be deemed not to be written. Where an endorsement in blank is followed by another endorsement, the signatory of this last endorsement shall be deemed to have acquired the instrument by the endorsement in blank.
Art. 725. - Forms of endorsement.
1. An endorsement shall be written on the instrument and signed by the endorser.
2. An endorsement not containing the name of the endorsee shall be valid.
3. An endorsement "to bearer" shall be equivalent to an endorsement in blank.
4. An endorsement shall be unconditional. Any condition to which it is made subject shall be of no effect.
5. A partial endorsement shall be null and void.
Art. 726. - Effect of endorsement.
1. An endorsement transfers all the rights arising out of the instrument.
2. If the endorsement is in blank, the holder may:
a. fill up the blank either with his own name or that of another person; or
b. re-endorse the instrument in blank or to another person; or
c. transfer the instrument to a third person, without filling up the blank and without endorsing it.
Art. 727. - Obligations of endorser.
Unless otherwise provided by law or by the instrument, the endorser shall not be liable where the person issuing the instrument fails to carry out his obligations.
Art. 728. - Endorsement for collection or by attorney.
1. Where the endorsement contains the words "value in collection," "for collection," "by attorney" or any other similar words implying agency, the holder may exercise all the rights arising out of the instrument, but he can only endorse it in his capacity as agent.
2. The person issuing the instrument may only set up against the agent such defences as could be set up against the principal.
3. The agency granted by power of attorney shall not terminate by reason of the death of the principal or his becoming legally incapable.
Art. 729. - Endorsement in pledge.
1. Where the endorsement contains the words "value in security" , "value in pledie" or any other similar words implying pledge, ,the holder may exercise all the rights arising out of the instrument, but his endorsement has the effects only of an endorsement by an agent.
2. The person issuing the instrument may only set up against the endorsee in pledge such defences as are based on his personal relations with the endorser, unless the endorsee, in receiving the instruments, knowingly acted to the detriment of the debtor.
Art. 730. - Assignment of instruments to order.
Acquisition of an instrument to order by means other than endorsement gives rise to the effects of an ordinary assignment only.
Art. 731. - Negotiable instruments damaged, destroyed, lost or stolen.
The procedure to be followed in the case of negotiable instruments damaged, destroyed, lost or stolen shall he prescribed.