Where the drawer or an indorser of a bill has received a bankruptcy declaration, what can a drawee who accepted or paid without knowing of it do with the resulting claim?
General information · Not legal advice
Material to check
In a practice file of this kind we read the bill itself, to see who the drawer and indorsers are and whether each received a bankruptcy declaration, the declaration and the proof of service showing when it was made, the drawee's own records kept at the moment of acceptance or payment, and the paper evidencing the payment or acceptance.
These are types of material to look for, not evidence already verified by PRO SE.
Where readings differ
One reading gives the drawee a defined position: where the drawer or an indorser has received the bankruptcy declaration and the drawee or reserve drawee did not know of it and accepted or paid, the drawee may, over the claim arising from that acceptance or payment, exercise its rights as a bankruptcy creditor, so it files in the bankruptcy and shares with the other creditors.
Another reading stresses that the condition is the absence of knowledge at the moment of acceptance or payment, so the provision gives no such right to a drawee who did know, and it does not say what follows from payment made by a drawee who knew, leaving that to the rest of the bankruptcy rules.
Your judgment
How can the file show whether the drawee lacked knowledge at the moment it accepted or paid, rather than at some later date?
PRO SE does not make this decision or keep a case record on this public site.When to reconsider
We look at this again if the provision is amended to change whose knowledge counts or what follows where the drawee knew, or if a court decision decides when the drawee's knowledge is tested.