59. Instrument acquired
after dishonour or when overdue.- The holder of a
negotiable instrument, who has acquired it after dishonour,
whether by non-acceptance or non-payment, with notice thereof,
or after maturity, has only, as against the other parties,
the rights thereon of his transferor:
Accommodation note or bill: Provided that any person who,
in good faith and for consideration, becomes the holder, after
maturity, of a promissory note or bill of exchange made, drawn
or accepted without consideration, for the purpose of enabling
some party thereto to raise money thereon, may recover the
amount of the note or bill from any prior party.
Illustration
The acceptor of a bill of exchange, when he accepted it,
deposited with the drawer certain goods as a collateral security
for the payment of the bill, with power to the drawer to sell
the goods and apply the proceeds in discharge of the bill
if it were not paid at maturity. The bill not having been
paid at maturity, the drawer sold the goods and retained the
proceeds, but endorsed the bill to A. A’s title is subject
to the same objection as the drawer’s title.
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