HOLDER FOR VALUE. A holder for value of a bill of exchange is defined by Section 27 of the Bills of Exchange Act, 1882 : " (2) Where value has at any time been given for a bill the holder is deemed to be a holder for value as regards the acceptor and all parties to the bill who became parties prior to such time.
" (3) Where the holder of a bill has a lien on it, arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien." By Section 30 :— " (I) Every party whose signature ap pears on a bill is prima' facie deemed to have become a party thereto for value." A holder for value is not liable upon a bill unless he has indorsed it, but he may sue on the bill in his own name.
The holder for value of a bill may be the payee who is in possession of it, or an in dorsee who is in possession of it, or the bearer of it.
Until value is given no party can sue upon a bill. If, for example, no value is given on a bill till it reaches the hands of a third indorser, none of the parties before that third indorser can sue upon the bill, but the third indorser, because he has given value, can sue all the prior parties. If that third indorser
transfers to a fourth person, without any value being given, that person cannot sue the third indorser, seeing he did not give value to the third indorser for the bill, but he can sue all the parties to the bill that the third indorser had the right to sue.
The holder of a bill payable to his order must indorse it. When the holder of a bill payable to bearer (see BEARER) negotiates it by delivery, without indorsing it, he is called a " transferor by delivery " and warrants to his immediate transferee that the bill is what it purports to be.
If the title of a holder for value is defective, as where the bill was obtained by fraud, duress, or force and fear, or for an illegal consideration, he cannot recover the amount from the person defrauded or otherwise. But a " holder in due course " can sue any party to the bill. No title, however, can be obtained through a forged signature. (See BILL OF EXCHANGE, CHEQUE, CONSIDERA TION FOR BILL OF EXCHANGE, HOLDER IN DUE COURSE.)