BSA Section 123 — Estoppel of acceptor of bill of exchange, bailee or licensee

Summary

No acceptor of a bill of exchange is allowed to deny that the person who drew the bill had the authority to draw it or to endorse it. Similarly, no bailee (a person who has been given goods for safekeeping or another purpose) or licensee (a person given permission to use something) is allowed to deny that the person who gave them the goods or permission had the authority to do so at the time the bailment or licence began.

Explanation 1 clarifies that the acceptor of a bill of exchange may still deny that the bill was actually drawn by the person it appears to have been drawn by.

Explanation 2 clarifies that if a bailee delivers the bailed goods to someone other than the bailor, the bailee may prove that this other person had a right to the goods as against the bailor.

Official Text

No acceptor of a bill of exchange shall be permitted to deny that the drawer had authority to draw such bill or to endorse it; nor shall any bailee or licensee be permitted to deny that his bailor or licensor had, at the time when the bailment or licence commenced, authority to make such bailment or grant such licence.

Explanation 1.—The acceptor of a bill of exchange may deny that the bill was really drawn by the person by whom it purports to have been drawn.

Explanation 2.—If a bailee delivers the goods bailed to a person other than the bailor, he may prove that such person had a right to them as against the bailor.

Old <-> New Code Mapping

• IEA §117 — Estoppel of acceptor of bill of exchange, bailee or licensee