Bills of Exchange Act (R.S.C., 1985, c. B-4)

Marginal note:Forgery

• 48 (1) Subject to this Act, where a signature on a bill is forged, or placed thereon without the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority.

• Marginal note:Ratification

  (2) Nothing in this section affects the ratification of an unauthorized signature not amounting to a forgery.

• Marginal note:Recovery of amount paid on forged cheque

  (3) Where a cheque payable to order is paid by the drawee on a forged endorsement out of the funds of the drawer, or is so paid and charged to his account, the drawer has no right of action against the drawee for the recovery of the amount so paid, nor any defence to any claim made by the drawee for the amount so paid, as the case may be, unless he gives notice in writing of the forgery to the drawee within one year after he has acquired notice of the forgery.

• Marginal note:Default of notice

  (4) In case of failure by the drawer to give notice of the forgery within the period referred to in subsection (3), the cheque shall be held to have been paid in due course with respect to every other party thereto or named therein, who has not previously instituted proceedings for the protection of his rights.