Pursuant to article 74 (6) of the Constitution and with reference to article 7 of the Law on Presidium of the Peoples Assembly of the Federative Peoples Republic of Yugoslavia, the Presiding Board of the Presidium of the Peoples Assembly of the Federative Peoples Republic of Yugoslavia hereby proclaims the Law on Bills of Exchange passed by the Federal Council and the Peoples Council of the Peoples Assembly of the Federative Peoples Republic of Yugoslavia, which reads as follows:
LAW ON BILLS OF EXCHANGE
Issuing and Types of Drawn Bills of Exchange
A drawn bill of exchange contains:
1) a designation that it is a bill, written on the document itself, in the language in which the bill itself is written;
2) unconditional instructions to pay out a certain amount of money;
3) name of the party obliged to pay (drawee);
4) designation of maturity;
5) place where payment is to be executed;
6) name of the receiving party or party upon whose order payment is to be executed (payee);
7) designation of the date and place of issuing the bill of exchange;
8) signature of the issuing party (drawer).
Documents lacking any of the elements stated in the article above shall not be regarded as drawn bills of exchange, except in cases defined in the paragraphs below.
Drawn bills of exchange with no designation of maturity shall be regarded as sight bills of exchange.
Unless otherwise specifically stated, the place next to the name of the drawee shall be regarded as the place of payment and the drawees permanent address.
Drawn bills of exchange with no designation of the place of issue shall be regarded as issued in the place next to the drawers signature.
Drawn bills of exchange may be payable by order of the drawer.
They may also be drawn (traced) to the drawer.
They may be issued (traced) for the account of a third party.
Drawn bills of exchange may be payable in a place of a third party, in a place of residence of the drawee or in any other place (domicile drawn bill of exchange).
In a sight drawn bill or in a drawn bill payable after a certain period following sight, the drawer may define that it shall bear interest. In any other type of bills of exchange, such an interest bearing provision shall be deemed not written.
The interest rate must be designated on the bill; otherwise, the interest provision shall be deemed not written.
Interest starts accruing on the date of issuance of the bill, unless it is otherwise specified.
When an amount in a bill written in both letters and numbers, the amount in letters shall prevail in case of inconsistency.
In case of an amount on a bill written several times in letters, or several times in numbers, the lowest amount shall apply.
Even if a bill of exchange includes signatures of parties unable to undertake such obligations, or false signatures or signatures of non-existent parties, or the signatures are for any other reason not binding on the parties that have signed the bill of exchange or on whose behalf it has been signed, the obligations of the other signatories are valid.
Any party that has signed a bill of exchange as a representative of another party, even if not authorized to do so, shall be held personally bound under the bill of exchange, and if the party has paid against the bill, it is entitled to the same rights as the allegedly represented party would have. The same also applies in case of representatives who have exceeded their authorization.
The drawer undertakes responsibility for acceptance and payment of the bill of exchange.
The drawer may be freed of the responsibility to accept the bill, and any provision by which the drawer frees himself of the responsibility for payment shall be regarded as never written.
Any bill of exchange, even if not explicitly traced by order, may be transferred by endorsement.
A bill of exchange in which the drawer has included the words not by order or any other expression with the same meaning, may only be transferred in the format and by the act of simple assignment (cession).
A bill of exchange may also be endorsed to the drawee himself, regardless of whether the drawee accepts it or not, to the drawer or to any other liable party. These parties may also endorse it to third parties.
Endorsements have to be unconditional. Any condition included in a bill shall be regarded as never written.
Partial endorsements are null and void.
Bearer endorsements shall be regarded as blank endorsements.
Endorsements have to be written on the bill of exchange or on the attachment to it and signed by the endorser.
Endorsements do not have to designate the beneficiary, and may consist only of the signature of the endorser (blank endorsements). In the latter case, the endorsement has to be written on the back or the attachment to the bill, in order to be valid.
All rights conferred in the bill of exchange are transferred with the endorsement.
In case of a blank endorsement, the bill holder may:
1) fill in the blank endorsement with his own name or with the name of any other party;
2) endorse the bill further as blank or to the name of any other party;
3) simply surrender the bill to a third party, not filling in the blank endorsement or including new endorsement.
The endorser undertakes responsibility for acceptance and payment of the bill of exchange, unless otherwise indicated in the endorsement.
The drawer may forbid any further endorsing of the bill; in such a case, the drawer is not accountable to any parties to which the bill is further endorsed.
The holder of the bill is deemed its rightful owner, provided that the holder is able to prove such ownership with an uninterrupted series of endorsements. This also applies in cases when the last endorsement is blank (article 11 paragraph 3 of this Law). As regards proving, deleted endorsements are deemed non-existing. In case when another endorsement follows a blank endorsement, it shall be deemed that the signatory of that other endorsement has acquired the bill blank by endorsement.
If, for any reason, a person has been deprived of a bill of exchange, the holder who has proven the right to it in the manner defined in the previous paragraph shall not be obliged to surrender the bill, unless the bill was acquired malevolently or with significant negligence.
Parties against which orders have been issued to fulfill their obligations under the bill have no right to claims against the bill holder based on their personal relations with the drawer or with a previous holder, unless the current holder knowingly acted at the cost of the debtor in the acquisition of the bill.
In case of a bill incomplete at the time of its issuance, additionally filled in contrary to the existing consent, violations of such a consent may not be claimed against the holder, unless the latter acquired the bill malevolently or with significant negligence.
In case an endorsement includes a note stating value for security, for collection, as a proxy or any other note with the meaning of an order, the bill holder may exercise all rights emerging from it, but may endorse it only as an assignment of a proxy.
In such a case, parties with liability under the bill may only raise such claims against the bill holder as those that may be raised against the endorser.
Orders included in the endorsement of paragraph 1 of this article (endorsementproxy) do not cease upon death or working inability of the issuer of the order.
In case an endorsement consists of a note stating value for security, value for collateral or any other note with the meaning of pledging collateral, the bill holder may exercise all rights emerging therefrom, but may endorse it only as an assignment of proxy.
In such a case, parties with liability under the bill have no right to claims against the bill holder based on their personal relations with the drawer or with a previous holder, unless the current holder knowingly acted at the cost of the debtor in the acquisition of the bill.
Any act of endorsing after the date of maturity shall cause the same effect as endorsing prior to that date. However, endorsements placed after the bill is protested on grounds of default or after expiration of the deadline for protesting the bill, shall only cause an effect of a simple assignment.
Until such time as it is proved to the contrary, any undated endorsement shall be regarded as executed prior to the expiration of the deadline for protesting the bill.
Owners of drawn bills of exchange, as well as parties acting solely as holders, may, until maturity, submit it to the drawee for accepting at the place of residence of the latter.
In any drawn bill of exchange, the drawer may include an order for acceptance thereof, stipulating a deadline therefor.
Drawers may also forbid that the bill of exchange be submitted for acceptance, except when it is a drawn bill of exchange payable in a place of a third party or in a place of residence different from that of the drawee, or when it is a drawn bill of exchange payable after a certain period following sight.
Drawers may also order that the bill of exchange be not submitted for acceptance prior to expiration of the certain period of time.
Any endorser also has the right to order submission of drawn bills of exchange for acceptance, with or without stipulating a deadline, except in cases when it includes an order by the drawer against its being submitted for acceptance.
Drawn bills of exchange payable after a certain period following sight may be submitted for acceptance within one year following the date of issuance.
Drawers may prolong or shorten the above deadline.
Endorsers may shorten the above deadlines.
Drawees may require that the bill of exchange be resubmitted to them the next day following the first submission for acceptance. Parties concerned may claim that such a requirement has not been fulfilled only in cases when the requirement is recorded in the protest.
Holders of bills are not obliged to leave the bill submitted for acceptance with the drawee.
Acceptance is written on the bill itself. It is expressed with the wording I acknowledge, received, accepted, or with any other word with the same meaning; the acceptance is signed by the drawee. The signature of the drawee itself is also regarded as acceptance, when it is placed on the face of the bill.
In case of a drawn bill of exchange payable after a certain period following sight, or when, on bases of an order, it is to be submitted for acceptance within a certain time period, the acceptance shall be dated on the date of giving acceptance, unless the owner of the bill requires that it be dated on the date he has submitted it for acceptance. In case of no acceptance date, the owner of the bill, in order to maintain his rights to recourse against the endorsers and the drawer, has to identify such a failure by protesting the bill.
Acceptance shall be unconditional, but the drawee may limit it to a certain portion of the amount stated on the bill.
Any other deviation from the elements of the bill in the acceptance shall be regarded as equal to refusal of acceptance. The acceptant, however, is still accountable as per his acceptance.
When the drawee has designated on the bill a place of payment different from the place of residence of the drawee, not stating a person with whom the payment is to be executed, then the drawee may designate such a person when accepting the bill. Otherwise, it shall be regarded that the acceptant has undertaken an obligation to pay himself at the place of payment.
In case of a bill payable in the place of residence of the drawee, the latter may, when accepting the bill, designate the address of the place where payment is to be executed.
By accepting the bill, the drawee undertakes an obligation to pay for it by maturity.
In case the bill is not paid for, its owner, even it is the drawer, has a right under it to a direct legal action against the acceptant for everything that may be required as per articles 47 and 48 herein.
It shall be regarded that the drawee has refused to accept the bill if he has erased the written acceptance prior to returning the bill. Unless proved otherwise, it shall be regarded that the acceptance has been erased prior to returning of the bill.
If, however, the drawee had notified the owner of the bill or a signatory in writing that he has accepted the bill, then he shall be obliged towards them as under the content of the given acceptance.
Payment of a bill of exchange in whole or in part may be secured by an aval (a bill guarantee).
Such a security may be granted by a third party or even by a signatory of the bill.
Aval is issued by placing it on the bill or on the attachment to it, signed by the issuing party.
Aval is expressed by the words per aval, as a guarantor, as an order, or by any other word with the same meaning.
The signature of the person on the bill is sufficient for issuing an aval, unless it is the signature of the drawer or drawee.
The aval shall clearly state whose benefit it is issued to. Otherwise, it shall be regarded as issued to the benefit of the drawer.
The aval issuer shall have the same responsibility as the party guaranteed for.
The aval issuers obligation stands even if the obligation guaranteed is null and void for any reason other than a formal deficiency.
Having paid out the bill, the aval issuer is entitled to rights under the bill against the party guaranteed for, as well as against parties responsible towards him under the bill (right to recourse).
Bills of exchange may be issued as:
sight bills of exchange;
payable after a time period;
payable after a certain time period following its issuance;
payable on a certain date.
Bills of exchange with maturity defined in a manner different than any of the above, as well as bills of exchange with more than one maturity date, shall be regarded null and void.
Sight bills of exchange are payable upon submission. It has to be submitted for payment within one year following the issuance date. The drawee may prolong or shorten this deadline. Endorsers may shorten this deadline.
The drawer may order that a sight bill of exchange is not to be submitted for payment before the designated deadline. In such a case, the deadline for submission commences following such a deadline.
Maturity of bills payable after a time period is calculated either according to the date of acceptance or the date of protesting.
In case of no protest, as regards the acceptant, it shall be deemed that an undated acceptance has been dated on the last day of the deadline for submission of the acceptance.
Bills of exchange payable after one or more months following the date of issuance or sight, mature on the adequate date in the month when payment is due. If the relevant month has no adequate day, the bill matures on the last day of the same month.
Bills of exchange payable after one or more whole months and a half month following the date of issuance or sight, whole months are calculated first.
If maturity falls at the beginning, the middle (mid January, mid February etc.) or the end of a month, then these terms mean the first, fifteenth or last day of the month.
The expressions eight days or fifteen days mean not one or two weeks, but full eight or fifteen days.
The expression half a month means fifteen days.
In case of a bill payable at a certain date in a place in which the calendar differs from the calendar in the place of issuance, maturity shall be calculated in accordance with the calendar of the place of payment.
In case of a bill payable after a certain time period following its issuance is drawn from one place to another and when the two places have different calendars, the date of issuance is adopted to the day adequate to the calendar in the place of payment and maturity is calculated on the basis of this.
Deadlines for submission of bills are calculated in accordance with the paragraph above.
These provisions do not apply in case a provision in or fundamental elements of the bill show a different intention.
Bills of exchange payable on a certain date or after a period of time following its issuance or sight, shall be submitted for payment either on the payment date itself or on one of the two business days immediately after the payment date.
Whenever a bill is submitted with a clearance institution, it is regarded as submitted for payment.
Upon payment, the drawee may require that the holder surrenders the bill, along with a certification of payment on the bill itself.
Owners of a bill may not refuse a partial payment.
In case of partial payment, the drawee may require that such a payment be recorded on the bill and that he be issued a payment receipt.
Owners of bills may not be forced to receive payment before maturity.
Drawees who pay out bills before maturity do so at their own risk and possible damage.
Whoever pays out a bill by maturity is fully freed of the obligation, unless they have done so with evil intention or significant negligence. Such parties have the obligation to check the legal validity of the order of endorsements, but not the endorsers signatures.
In case of a bill payable in a currency not accepted in the place of payment, the amount on the bill may be paid out in the currency acceptable at the place of payment and at the value valid on the payment date. If the debtor is in delay, the owner of the bill may, at his own choice, request that the bill is paid out in the local currency at the valid rate, either on maturity or on the date of payment.
Value of foreign currencies shall be calculated as customary in the place of payment, but the drawer may order that the sum payable shall be calculated at the rate stated on the bill.
These provisions do not apply when the drawer has ordered to have the payment executed exactly in the currency designated on the bill (provision of effective payment in foreign currency).
The provisions in paragraphs 2 and 3 of this article shall apply unless contrary to the existing currency regulation.
In case of an amount denominated in a currency with the same name but different value in the country of issuance and the country of payment, it shall be regarded that the currency of the place of payment was taken into account.
In case of a failure to submit a bill for payment within the deadline prescribed in article 37 herein, each debtor shall be authorized to present the amount of the bill for payment with the relevant court or, in case of non such court, with the local peoples council, at the cost, risk and damage of the owner of the bill.
Recourse Against Non-acceptance and Default
Owners of bills may demand recourse from endorsers, drawers and other obligated parties:
in case of partial or complete default;
and before maturity:
1) if acceptance is refused, either in part or in whole;
2) if, prior to or following acceptance, a liquidation procedure has been initiated against the drawee, or if the latter ceases payment even if such ceasing was not ordered by court, or if the sale of the drawees property proves insufficient;
3) in case of a liquidation procedure initiated against a drawer of a bill not submissive for acceptance.
Any partial or complete refusal of acceptance as well as partial or complete refusal to pay has to be stated in a public document (protest on the basis of refusal to accept or default).
Protests against refusal of acceptance has to be submitted within deadlines for submission for acceptance. If, in the case defined in paragraph 1 of article 23 herein, a bill is submitted for the first time on the last day of the deadline, a protest may be raised on the next day as well.
Protests against default under a bill payable on a certain date or after a period of time following the issuance date or following sight, must be raised on one of the two business days immediately after the date of payment. In case of a bill payable on sight, protest must be raised in accordance with the previous paragraph on protesting a bill for refusal of acceptance.
Whenever a protest is raised on grounds of refusal of acceptance, it is not required that the bill be submitted for payment nor is it required that a protest be raised on grounds of default on payment.
If prior to or after acceptance the drawer ceases the payment or if the sale of the drawers property proves insufficient, the owner of the bill may demand recourse only after submitting the bill to the drawer for payment and after raising a protest.
In case of a bankruptcy procedure initiated over the drawees property prior to or after acceptance, as well as in a case of a bankruptcy procedure initiated over the property of a drawer related to a bill that may not be submitted for acceptance, the owner of the bill may demand recourse only after submitting a court order for commencement of a bankruptcy procedure.
Owners of bill shall notify their endorsers and drawers for any refusal of acceptance or payment, within four business days following the date of protesting or following the date of submission of the bill, if the latter includes a provision free of expenses. In case of a protest replaced in accordance with article 77 herein, the deadline shall be calculated from the date of entering the announcement of refusal onto the register of protests.
Any endorser shall, within two business days following the date of receipt of the report, notify the previous endorser of any such report, stating the names and addresses of those who submitted the previous reports, going all the way back to the drawer.
Whenever a report is given to an endorser in terms of the previous paragraphs, the same report shall also be submitted to the aval issuer of any such endorsers, within the deadline valid for the latter.
In case any of the endorsers fails to designate his address or designates it unclearly, it shall be sufficient to send the report to the previous endorser.
Reports may be given in any form, even by simple returning of the bill.
Parties submitting the report shall prove that it was done within t he prescribed deadline. A timely action shall also be regarded mailing of a letter containing the report within the prescribed deadline.
Parties failing to submit a report within the above stated deadlines, do not lose their rights under the bill, but shall be held liable up to the amount on the bill for protection as a result of such a failure.
Any drawer, endorser or aval issuer may, by a provision free of expenses, without protest or any other adequate provision, written and signed on the bill, free its owner from the obligation to raise a protest against refusal of acceptance or payment, when demanding recourse.
Such a provision does not free the owner of the bill neither from the obligation to submit the bill within the prescribed deadlines nor from the obligation to submit a report in a timely fashion.
Provisions written by the drawer applies to all endorsers; provisions written by the endorser or aval issuer applies only to those who accept them. If a bill owner raises a protest contrary to the provision written by the drawer, he will bear the protesting costs. In case of a provision by an endorser or aval issuer, protesting costs may be collected from any endorser.
All those who have drawn, accepted, endorsed or guaranteed a bill are jointly responsible to the owner of the bill.
Owners of bills have the right to act against all parties mentioned in the above paragraph, against individuals, against more than one of them or against all of them together; in doing so, owners of bill are not obliged to stick to the order in which the above parties undertook obligations.
The same right is enjoyed by any signatory of the bill who has purchased it.
Demands against one of the obliged parties do not prevent action against the others, even if they come after the party first acted against.
Bill owners may require the following from the party they demand recourse from:
1) an amount for which the bill was not accepted or paid, as well as interest if included in the bill;
2) interest at a rate of 6% accruing from the date of maturity;
3) protesting costs, costs for reports submitted and other costs.
In case of a demand for recourse before maturity, the amount on the bill is discounted. The discount is determined on the basis of the official discount rate (the discount rate of the National Bank of the Federative Peoples Republic of Yugoslavia) valid on the date of recourse in the place of residence of the bill owner.
Parties who have purchased a bill may demand from the parties responsible to them the following:
1) the entire amount paid;
2) 6% interest on this amount, accruing from the date of payment;
3) costs incurred.
Liable parties against whom recourse is or may be demanded shall, upon payment of the entire amount, request a receipt of the bill along with the protest and the receipt on which payment is confirmed.
Any endorser who has purchased a bill may erase their endorsement and the endorsement of all subsequent endorsers.
In case of a recourse due to partial acceptance, the party that has paid the amount not accepted, may demand that any such payment be recorded on the bill and that a receipt be issued on that amount. The bill owner shall, in addition, issue a copy of the bill with a confirmation of originality, as well as a protest for further recourse.
Unless agreed otherwise, any party with the right to recourse may collect on the basis of a new bill, drawn as a sight bill against any of the parties liable to them and payable in the place of their residence (return bill).
In addition to the amounts stated in article 47 and 48 herein, a return bill also includes commission and charge on a return bill.
In case of a return bill drawn by the owner, the amount of the bill is determined at a rate of a sight bill drawn from the place of payment of the original bill to the place of residence of the liable party to which it is drawn. In case of a return bill drawn by the endorser, the amount of the bill is determined at a rate of a sight bill drawn from the place of residence of the drawer of the return bill to the place of residence of the liable party.
Upon expiration of the following deadlines,
- for submission of sight bills or bills payable after a certain period following sight,
- for raising a protest against refusal of acceptance or default,
- for submission of a bill containing the provision free of expenses,
the owner of the bill loses all the rights towards the endorsers, drawer and other liable parties, with the exception of the acceptant.
In case of a failure to submit a bill within the deadline prescribed by the drawer, the bill owner loses the right to recourse against both default and refusal of acceptance, unless the content of the provision states that the drawer only wanted to free himself of the acceptance responsibility.
In case of a deadline set in an endorsement, then it may be used only by the endorser who wrote the endorsement.
In case a bill may not be submitted or a protest may not be raised within the deadlines prescribed due to insurmountable obstacles (regulations of a state or another force majeure), then any such deadlines shall be extended.
In case of a force majeure, a bill owner shall immediately notify the endorser and shall record any such notification on the bill or the attachment to it, dating and signing it; any other cases shall be subject to the provisions of article 41 herein.
When a force majeure ceases, the bill owner may immediately submit the bill for acceptance or payment and, if necessary, raise a protest.
In case of a force majeure lasting more than thirty days following maturity for recourse, it is not necessary to submit or protest the bill.
In case of a sight bill or a bill payable after a certain period following sight, the thirty days deadline starts on the date on which the bill owner notifies the endorser of the case of a force majeure, even if this was done before the deadlines for submission expire; in case of bills payable after a certain period following sight, the thirty days deadline is extended for the time passed following sight as defined on the bill.
Obstacles of purely personal nature for the bill owner or for the party entrusted by the bill owner with submission of or protesting the bill, shall not constitute cases of force majeure.
1. Common Provisions
Drawers, endorsers or aval issuers may designate on the bill a person to accept or execute payment as needed (an intervening party).
Intervening parties may, as prescribed here below, accept or pay out the bill on behalf of any liable party against which recourse may be demanded.
Intervening parties may a third party and even the drawee or any other party liable under the bill, with the exception of the acceptant.
Intervening parties shall, within two business days, notify of the intervention the party on whose behalf it was done. If they miss this deadline, intervening parties shall be held liable for up to the amount on the bill for any damage incurred as a result of such missed deadline.
2. Accepting by Intervention
Accepting by intervention may be done whenever the bill owner is authorized prior to maturity to demand recourse against a bill submissive for acceptance.
In case of a bill on which a person is assigned to accept it as needed or to execute payment under it as needed in the place of payment, the owner of such a bill may not exercise before maturity the right to recourse against those who included such an assignment or against any subsequent endorsers, except in cases when the owner submitted the bill to the assignee and protested the bill because of a refusal of the assignee to accept it.
In other cases, the bill owner may refuse an acceptance by intervention. If he allows it, however, he loses any recourse he is entitled to before maturity from the party the acceptance is given to, as well as from any subsequent endorsers.
Acceptance by intervention is recorded on the bill; it is signed by the intervening party. The acceptance states the party acceptance is given to; otherwise, it shall be regarded that acceptance is given to the drawer.
Whenever accepting a bill, the intervening party is responsible to its owner and to any endorsers following the debtor on whose behalf intervention was done in accordance with the responsibility of the debtor.
Even if a bill is accepted by intervention, the party on whose behalf it was intervened, as well as parties liable to the former may, upon payment of the amount defined in article 47 herein, demand that the owner surrenders the bill along with the protest, if there was sufficient space, as well as along with the receipt confirming the payment.
3. Payment by Intervention
Payment may be executed by intervention in all cases in which the bill owner has acquired the right to recourse at or before maturity.
Payment by intervention includes the entire amount that would otherwise have to be settled by the party on whose behalf it was intervened.
Payment by intervention shall be executed not later than the last day on which a protest may be raised for default.
In case of a bill accepted by intervening parties with a place of residence in the place of payment, or in case of a bill containing a designation of parties with a place of residence in the place of payment and are authorized to execute payment if needed, the bill owner shall submit the bill to all such parties and, if necessary, raise a protest for default not later than on the day following the last day on which a protest may be raised.
If no protest is raised by the above date, the following parties are freed of the responsibility: the party designating the address or on whose behalf the bill was accepted by intervention, as well as any subsequent endorsers.
Bill owners who refuse a payment by intervention lose their right to recourse from those who would be freed by such a payment.
Any payment by intervention shall be confirmed by a settlement statement written on the bill and including the party on whose behalf payment was done. In case no such party is designated, it shall be regarded that payment was done on behalf of the drawer.
The bill and the protest, if raised, are surrendered to the payer by intervention.
Payers by intervention acquire rights emerging from the bill towards the party on whose behalf it was paid for, as well as towards parties liable to the latter under the bill. Nevertheless, the payer by intervention may not endorse the bill further.
Endorsers following the liable party on whose behalf payment was done are freed of responsibility.
In case of more than one intervening parties offering payment, priority shall be given to the party thus freeing the largest number of liable parties. If, despite knowing this, the intervening party acts contrary to this, it loses the right to recourse from parties that would have been freed.
Copies and Transcripts
Drawn bills may be issued in two or more equal copies.
The above copies shall be marked with a current number; otherwise, each copy shall be regarded a separate bill.
Any owner of a bill which does not state it is drawn in one copy only, may request that another or more copies be issued to him at his own expense. For this, the owner has to address his endorser, who shall facilitate this by addressing the previous endorser and it is done so all the way back to the drawer. Endorsers shall repeat their endorsements on the new copies.
Payment for one of the monthly copies frees of the obligation under all other copies, even if the bill does not state that, by payment of one copy, the value of all other copies are annulled. The drawee remains responsible for any accepted copy not returned to him.
Endorsers who have distributed the copies to different parties, as well as all future endorsers are liable under all copies not returned and bearing their signature.
Parties who send a copy for acceptance shall state on all other copies the name of the person holding that copy. The latter shall return to the legal owner any other copies.
In case of refusal to do so, the legal owner of the other copy may demand recourse only when he determines by protesting that:
1) the copy sent for acceptance was not returned to him despite his request;
2) he was unable to receive acceptance or payment for no other copy.
Any bill owner may make transcripts of the bill.
The transcript shall contain the precisely rewritten original bill with the endorsements and all other provisions contained therein. The transcript must also state where it ends.
A transcript may be endorsed and guaranteed in the same manner and with the same effect as the original bill.
The transcript shall state the person holding the original bill. A transcript without such indication shall have no legal force or a force of a bill.
The person holding the original bill shall return the bill to the legal owner of the transcript. In case of refusal to do so, the owner of the transcript may demand recourse from the endorsers or guarantors of the transcript only after he determines upon a protest that the original bill was not returned to him at his request.
If the original document contains a provision following the last endorsement prior to issuing the transcript and stating as from this place on, the endorsement is only valid on the transcript, or any other provision with the same meaning, any following endorsement placed on the original bill shall be regarded null and void.
In case of a correction of the contents of a bill, parties who have signed the bill after the correction shall be liable as per the corrected content, while previous signatories shall be liable as per the original content.
Protests may be raised with district courts, within their jurisdiction.
Protests are dealt with in district courts by judges or court clerks delegated such powers by the court president.
The Minister of Justice of the Federative Peoples Republic of Yugoslavia, in coordination with the Minister of Post Offices, may issue instructions that protests may also be raised at post offices.
Whenever a protest is raised, the competent body, in terms of the order defined in article 106 herein, submits the bill to the party the protest is raised against and orders that party to carry on the action demanded.
If the party sought is not to be found at the business premises, if any, or at the place of residence in case of no business premises, or if it be found, but the demand may not be announced to him for whatever reason, the competent body is not responsible for repeating the protesting procedure.
It shall be deemed proven that the business premises or place of residence were not to be found only when it is recorded in the protest that the competent body made due inquiries with the local peoples council.
In case the competent body performed insufficient inquiry of the business premises or place of residence, the protest remains in force, but the competent body is not freed from liability for damage.
A protest shall contain:
1) transcript of the protested bill, as well as all statements or remarks thereon; in case of a protest raised against a bill issued in a foreign language, a translation shall also be submitted, with a verification of the protesting party.
2) Name or company name of the person at whose request and against whom protest is raised;
3) Statement of certification that the party sought failed to perform the action demanded on the basis of the bill or that the competent body was unable to locate the party sought at the business premises or place of residence or, despite having located the party sought, was unable to announce the demand;
4) Place, day, month, year and time of the successfully or unsuccessfully carried out protesting procedure;
5) Date of the protest, number under which it is entered onto the register of protests, official signature of the competent body, as well as a seal of the competent court.
The competent body shall mark as unclear any unreadable parts of the bill or transcript.
In case the party sought explains the refusal to perform the action demanded or in case the drawee submits a demand in accordance with article 23 (1) herein, this should also be recorded in the protest.
When more than one action is demanded on the basis of the same bill or when the same action is demanded from several parties, only one instead of several protests may be raised.
Any action not performed on the basis of which a bill is protested, may also be performed in the presence of the competent body (article 69 herein). A provision or instructions opposing this bears no value towards the party due to perform the action.
In case of payment of the debt stated on the bill, the competent body confirms such a payment and surrenders the bill to the person who carried out the payment.
If a debtor under a bill pays out a portion of the amount of the bill, this shall be recorded on the original bill and in the protest and a receipt shall be issued to the payer on the transcript of the protested bill.
If a party liable under a bill pays the amount of the bill, but refuses to pay the protesting costs, this shall be determined by the protest and the bill itself shall be returned to the payer. Compensation for the protesting costs is demanded on the basis of this protest.
The document of the protest shall immediately be submitted to the bill owner or to a party that submitted the bill for protesting on behalf of the bill owner.
The competent body shall register the entire content of the protests raised by order, date and number, in a separate register.
In case the drawer does not demand in the content of the bill that the protest be in the format of a public document, a protest on the basis of refusal of acceptance or default may, with a previous consent of the bill owner, be replaced with a statement written on the bill by the person from whom action is demanded (drawee, acceptant, person with whom the payment is to be executed, person at whose address payment is to be executed, or intervening party). The statement of the above named persons shall be dated, signed and entered onto the register of protests within the protesting deadline, and the competent body shall verify it on the bill or the attachment to it.
For any bills of up to 500 dinars inclusive, the Government of the Federative Peoples Republic of Yugoslavia may issue a decree to postulate that the competent body may, instead of the protest defined in paragraph 69 to 77 (1) herein, deliver the transcript of the bill to all parties liable under the bill by registered mail, with a note stating that the bill is protested. At a request, a statement of certification may be issued for this, which is registered in the register of protests within the deadline prescribed. In such a case, the report of article 44 herein is no longer required.
All legal demands under a bill against the acceptant expire in three years following maturity.
Legal demands of the bill owner under the bill against endorsers and the drawer expire in a year following the date of a timely raised protest or, if the bill includes a provision free of expenses, following maturity.
Legal demands of endorsers under the bill against each other and against the drawer expire in six month following the date when the endorser purchases the bill or when a court action is taken against the endorser.
Expiry is interrupted by bringing charges at court. The following have the same effect as charges: submission of a claim under a bill during a bankruptcy procedure, submission of a claim under a bill during litigation, demand for protection, notification from the party charges are brought against to the preceding party of a recourse demand submitted against the defendant, proposal for sale of property submitted by the state loan company in accordance with article 26 (2) of the Law on Regulation and Functioning of the Loan System, as well as notification thereof, distributed by the state loan company to parties liable for recourse. The notification is announced through court or directly in a registered letter and in such a case the date of mailing the letter shall be regarded as the date of announcement.
An interrupted expiry continues to be in force in case:
1) charges are brought and in case of submission of a claim under a bill during litigation, from the date of the last proceedings, provided that the proceedings do not continue in either case;
2) submission of a claim in a bankruptcy proceedings, following the end of the proceedings and in case the claim submitted during bankruptcy proceedings is contested, following the date of contesting;
3) a demand for protection and notification of charges brought, following the end of the litigation.
If, in the course of the three last months prior to the expiration of the expiry deadline, the creditor, as a result of interruption in the work of the courts or due to military service in a state of war or because of a force majeure (article 53 herein), was prevented from exercising his rights under the bill, days of expiry are not counted. They are also not counted during a bankruptcy procedure over the property of the creditor. When these two obstacles cease to exist, expiry may not come into force before thirty days, in case it would have come into force during that period.
In case a person unable to participate in a litigation has no representative at any moment during the last three months of the expiry deadline, expiry against that person may not come into force before a period of three months from the moment that person becomes able to participate in a litigation or gets a representative. This also applies in cases when the legal representative loses the ability to participate in a litigation or in case of a conflict of interests between the representative and the person unable to participate in a litigation with regard to charges brought or possibly brought.
Expiry of a claim under a bill that constitutes a part of an heritage or that is to be born by a heritage, may not come into force six months following the death of the deceased.
Interruption and cancellation of expiry have effect only towards the party in relation with which the reason for interruption or cancellation occurred.
Reasons for interruption or cancellation of expiry of a foreign right have effect in terms of this Law only if appropriate to the reasons stated in the article above.
Illegal Acquisition of Wealth
The drawer, acceptant and endorsers, whose liabilities under a bill have ceased due to expiry or because of failure to perform acts prescribed for the maintenance of rights under a bill, are responsible to the bill owner in the case of illegal acquisition of wealth at his expense. Other parties liable under a bill are freed from this responsibility.
A compensation demand based on responsibility for illegal acquisition of wealth may also be realized on the bases of a court decision for amortization of an expired bill.
Responsibility for illegal acquisition of wealth expires in three years; all other aspects of such expiry are subject to provisions in the commercial or civil laws.
Right to Collateral and Holding Assets
When, for the purpose of securing a demand under a bill and on the bases of a written statement, a bill owner receives as collateral a movable asset and when the debtor is in default of an obligation under that bill, the former has the right to settle without bringing charges against the debtor.
In this context, the bill owner may:
1) require, on the bases of a bill and a document for collateral, from a court competent either for himself or for the debtor to sell the collateral; the court orders public sale without hearing the debtor; this does not free the bill owner of the responsibility for potential abuse of the collateral right;
2) collect against the pledged bill and settle from the acquired funds; or hold on to the pledge up to the amount of the claim.
All of the above rights are enjoyed by the bill owner even in case of a bankruptcy of the debtor.
Both in the case of a realized or intended sale or holding of the pledged bill, the bill owner shall, without delay if possible, notify the debtor, as well as the pledging party, if the latter be a third party.
In case the bill owner settles the claim in full, he shall return the original bill to the pledging party or into the bankruptcy estate, along with any amount exceeding the claim. Any partial settlement shall be recorded on the bill.
By becoming entitled to a right to bring charges or to recourse, the bill owner also becomes entitled to holding onto the debtors funds, movable property and securities that came into the possession of the bill owner in a legal manner or that the bill owner may dispose of. The bill owner may not, however, exercise the right of holding the debtors assets in case the debtor or a third party informed the bill owner when upon or prior to delivery of the bill that the relevant assets are pledged for a specific purpose.
The bill owner may exercise the right of holding the debtors assets even before the claim matures, in case of bankruptcy of the debtor or in case the sale of the debtors assets proves unsuccessful or in case the debtor is a trader who ceased all payments. In such cases, the right of holding the assets is not prevented even by a notification of the special purpose of the pledge, provided that the relevant assets came into possession of the bill owner or the bill owner acquired a right to freely dispose of them prior to the occurrence of the above mentioned obstacles or prior to the bill owners becoming aware of them.
The bill owner shall, without delay if possible, notify the debtor of the exercise of the right of holding the assets.
Unless otherwise agreed between the bill owner and the debtor, the right of holding the assets is terminated upon satisfactory provision of security for the debt in funds or in securities.
The right of holding the assets has the same effect as the right to collateral of article 86 herein. Upon written consent of the debtor or on the bases of an order of a court competent for the bill owner or the debtor, the bill owner may:
1) use the assets held for settlement of the claim;
2) use the assets held in the manner defined in article 86 herein.
In case of a lost bill, the owner may propose to the court with jurisdiction in the place of payment to amortize the bill.
The proposal shall state the main content of the lost bill and evidence that the proposing party was in possession of the bill or was entitled to certain rights under it.
In case the court decides the data submitted are sufficient, it shall publish an advertisement to state the main content of the bill, inviting those in possession of the bill to present it to the court within 60 days; otherwise, the court shall declare the bill null and void following the deadline.
The advertisement shall be published once in the Official Gazette of the Federative Peoples Republic of Yugoslavia.
In case of a bill already matured for payment, the deadline for presentation of the bill starts after the advertisement date, and if maturity comes on a later date, the deadline starts following maturity. In case of a sight bill or a bill payable after a certain period following sight, the deadline for submission of which is not expired, the deadline for presentation at court of the lost bill starts following the last date for submission.
The court shall notify the proposing party and all parties mentioned in the bill of the advertisement.
In order to keep the right to recourse against a drawer of a unaccepted bill, as well as against a drawer who placed a ban on submission of a bill for acceptance, the party proposing amortization of the bill shall raise a protest in the defined place and within the deadline for raising a protest against refusal of acceptance or default, by submitting the main content of the lost bill. The protest is a replacement of a submission for acceptance or payment and raising adequate protests. Compensation for costs of such a protest may not be required.
On the bases of a court order for amortization, the proposing party may, unless otherwise agreed and following maturity of the lost bill, require that the acceptant or, in the case of the previous paragraph the drawer hand over the amount on the bill to the competent government body, in accordance with article 41 herein. Such a requirement shall be refused if the party demanded to hand over the amount successfully prove that the proposing party had not right to demand amortization.
In case a bill is not submitted within the deadline set in the advertisement, the court shall declare the lost bill amortized and shall notify the acceptant or the drawer of an unaccepted bill or the drawer who banned submission of the bill for acceptance, informing that the amount of the bill may be paid out to the proposing party. The court notifies the proposing party and all parties mentioned in the bill of the amortization.
No rights related to a bill may not be exercised on the bases of an amortized bill.
On the bases of a decision on amortization, the proposing party may exercise all rights under the bill against the acceptant or, in the case defined in paragraph 1 of article 91 herein, against the drawer, as if possessing a non-amortized bill. The above liable parties, however, shall not be obliged to pay out the bill if they are able to successfully prove that the proposing party acquired a decision on amortization on no legal grounds.
If the party in possession of a bill for which amortization is required does appear in court within the deadline in the advertisement, the court shall cancel the procedure, on the bases of the presented bill and after hearing all parties concerned.
Conflicts of Laws
The ability of a person to undertake obligations under a bill is determined by the law of that persons country of domicile. If that law refers to a law of another country, then the laws of that country apply.
A person who, under the law of the previous paragraph is regarded unable to undertake obligations under a bill, is still legally bound if that person places a signature in a country under the laws of which is regarded able to enter into relations under a bill.
The form in which obligations under a bill are undertaken is determined in the laws on whose territory such obligations are undertaken.
As an exception to the above paragraph:
1) in case obligations under a bill are not in accordance with the form defined in the previous paragraph, but under the laws of a certain country do represent evidence of an obligation undertaken at a later point in time, the fact that earlier obligations are in an incorrect form do not influence the validity of any such later obligations;
2) obligations under a bill between our citizens undertaken abroad, if in accordance with the provisions in this Law, are valid even if they are not in accordance with the laws of the country in which they are undertaken.
The form and deadline for protesting, as well as for all other acts required for the exercise or maintenance of rights under a bill are determined in the laws of a country in which the protest is to be raised or the other acts are to be performed.
The effects of obligations of an acceptant of a drawn bill and an issuer of an own bill are determined in the law applicable in the place where these documents are payable.
Effects caused by obligations of the other parties liable under a bill are determined in the laws of the country on the territory of which signatures are placed to witness the acceptance of such obligations.
Deadlines for exercise of rights to recourse with regard to all signatories of a bill are determined by the laws applicable in the place of issuance.
Laws applicable in the place of issuance are also the bases for determining whether a bill owner has a right to the claim which is the reason for issuance of the bill.
The issue whether acceptance may be limited to one portion of the amount of the bill or whether the bill owner is obliged to accept a partial payment, is determined in accordance with the laws of the country in which the drawn bill is payable.
The same laws apply in the dealing with the issue of partial payment of own bills.
The law of the country in which a bill is payable determines measures to be undertaken in case of theft or loss of a bill.
Obligations under a bill may be undertaken by any person able to undertake such obligations under the civil or commercial laws.
Illiterate persons or a person not able to write undertakes an obligation under a bill by placing a fingerprint on the bill or the attachment to it, verified in court. Seals and signatures with Jewish letters are regarded as fingerprints.
An obligation under a bill may be undertaken on behalf of an illiterate person only on the bases of a proxy, issued by that person and verified in court. This does not affect the provisions on signing under a trade company.
In a court verification, the clerk shall include: a statement that he personally or through witnesses summoned knows the person wishing to undertake an obligation under a bill or to issue a proxy, a statement that the person was acquainted with the contents of the statement by which that person undertakes an obligation under a bill or issues a proxy, as well as a statement by that person confirming that the above is done in a free will. The verification shall have an official reference number, seal and signature of the clerk.
Signatures of blind individuals on a bill shall be regarded valid only if verified in court in the manner prescribed in the previous article. This also applies to proxies issued for the purpose of undertaking an obligation under a bill.
In case a bill matures on an official holiday, its payment may be requested only on the next business day. In the same manner, all other acts related to a bill, and in particular submission for acceptance or protesting, may be performed on a business day only.
In case any of the above acts has to be performed within a set deadline, the last day of which falls on an official holiday, the deadline is extended until the first business day immediately after the expiration of the deadline. Holidays falling within the deadline period are taken into account when calculating the deadline.
Days on which a deadline commences are neither included in the legally prescribed deadlines nor in deadlines specified in a bill.
No beginning days, both legally or court determined, are allowed.
Submission of a bill for acceptance or payment and all other acts to be performed under this Law for the purpose of exercising or maintaining rights under a bill, shall be undertaken at business premises and within hours defined as business hours by the competent authorities. If the business premises of the person sought are not to be found or no business premises are stated on the bill, then that person shall be sought at the place of residence.
In the case defined in article 26 (2) herein, the bill is submitted for payment at the business premises or with a person designated by the drawee.
Upon consent of the person in relation with whom acts are performed, those acts may also be performed out of the business premises, place of residence or business hours.
An own bill includes:
1) a designation that it is a bill, included in the text of the bill in the language in which it is construed;
2) unconditional acceptance to pay the amount written;
3) designation of maturity;
4) a place where payment is to be executed;
5) name of the party to which or by the order of which payment is to be executed;
6) designation of the date and place of issuance of the own bill;
7) signature of the issuing party (issuer).
Any document not including at least one of the elements listed in the previous article shall not be regarded as an own bill, except in the cases stated below.
An own bill with no designation of maturity shall be regarded as a sight bill.
If not specifically stated otherwise, the place designated on the bill shall be regarded as the place of payment and at the same time as the place of residence of the issuer.
An own bill with no designation of the place of issuance shall be regarded as issued in the place next to the name of the issuer.
Unless contrary to its nature, an own bill is subject to the following provisions of this Law:
regarding endorsement (articles 10 19)
regarding maturity (articles 32 36);
regarding payment (articles 37 41);
regarding recourse for default (articles 42-49, 51 53);
regarding intervention (articles 54, 58-62);
regarding transcripts (articles 66 & 67);
regarding corrections on a bill (article 68);
regarding protests (article 69 - 77);
regarding expiry (articles 78 84);
regarding illegal acquisition of wealth, right to collateral and holding of assets (articles 85 89)
regarding amortization (articles 90 93);
regarding conflicts of laws (articles 94 100);
regarding general orders (articles 101 106).
Own bills are also subject to the provisions regulating bills payable at a third party or in a place of residence different than that of the drawee (articles 4 and 26), provisions on defining the sum to be paid (article 6), validity of the signature on a bill containing signatures mentioned in article 7, validity of the signature of a person operating without an authorization or beyond the authorization (article 8), as well as on additional execution (article 16 (2)).
Own bills are also subject to provisions regulating avals (articles 29 31). In the case defined in article 31, last paragraph, if the aval does not state who it is issued to, it shall be regarded as issued to the issuer of an own bill.
Issuers of own bills are responsible in the same manner as acceptants of drawn bills.
Own bills payable at a certain time following sight shall be submitted with the issuer for sight within deadlines as defined in article 22 herein. The issuer confirms the sight by a dated signature on the bill itself and the deadline following sight starts after this date. In case the issuer refuses to confirm sight, such a refusal shall be stated in a protest (article 24 herein) and the deadline following sight starts after the date of the protest.
Interim and Final Provisions
The court under the jurisdiction of which is the place of payment shall be competent for all disputes based on charges brought by a bill owner against the signatories on the bill.
If, on the bases of the document defined in article 26 item 2 of the Law on Organization and Functioning of the Loan System or on the bases of a court decision or a payment order issued in relation to a bill against certain signatories, a signatory further pays (buys out the bill), then such a document, court decision or payment order in accordance with which the relevant signatory acted, along with the confirmation and the receipt of payment, as well as along with the protest if protest was to be raised, an enforcement order is sufficient for the exercise of the rights to recourse of such a signatory against all the parties liable to him under the bill and included in the same document, court decision or payment order.
As an exception to article 2 of the Law on Invalidity of Legal Regulations Enacted Prior to April 6, 1941 and During Occupation (Official Gazette of the Federative Peoples Republic of Yugoslavia No. 86 of 25 Oct., 1946), bills issued prior to the enactment of this Law are subject to provisions in the Law on Bills of Exchange of 29 November 1928.
The same Law applies in dealing with the form and effect of statements on bills placed following the enactment of this Law on bills issued prior to that. This also applies to acts required for the maintaining of rights under a bill.
The Government of the Federative Peoples Republic of Yugoslavia shall define by a decree the days regarded as holidays in terms of this Law.
Depending on the seriousness of the circumstances and in accordance with the provisions in article 53 herein, the Government of the Federative Peoples Republic of Yugoslavia shall define by a decree adequate protection for parties liable for recourse under a bill by extension of deadlines for payment of bills and the like, whenever a foreign state issues regulations to prevent the exercise or maintenance of rights under such bills.
The Minister of Finance of the federative Peoples Republic of Yugoslavia shall define the institutions to be regarded as clearance institutions in terms of article 37 herein, as well as the commission in terms of article 51 (2) in this Law.
This Law comes into force on the date of its publication in the Official Gazette of the Federative Peoples Republic of Yugoslavia.
Decree No. 653
12 December 1946
Presiding Board of the Presidium of the Peoples Assembly of the Federative Peoples Republic of Yugoslavia
Mile Perunicic Dr. Ivan Ribar
CHANGES IN THE LAW ON BILLS OF EXCHANGE
In the Law on Bills of Exchange (Official Gazette of the Federative Peoples Republic of Macedonia No. 16/65 and 54/70), the word municipal is replaced by the word first instance regular.
In article 47 (a), item 2 is amended and states:
2) penalty interest calculated in accordance with the federal law regulating the penalty interest rate.
Item 2 in article 48 is amended and states:
2) the penalty interest on that amount at the discount rate determined on a monthly bases by the National Bank of Yugoslavia, calculating from the date of payment.
Paragraph 1 in article 69 is amended to state:
Protests are raised with the court with local jurisdiction for the person protest is raised against.
The words With municipal courts in paragraph 2 are replaced by With the court.
The words The State Secretary of Justice, in co-ordination with the State Secretary of Traffic and Communication in paragraph 3 are replaced by: The official in charge of the federal administrative body in charge of judicial affairs, in co-ordination with the official in charge of the federal administrative body in charge of traffic and communication,.
In article 71 (1) (5), the words of the inheritance are deleted.
The words Federal Secretary of Justice in article 76 (2) are replaced by: The official in charge of the federal administrative body in charge of judicial affairs.
In article 77 (2), the number 500 is replaced by the number 1,000.000.
In article 85 (3), the words Law on Expiry of Claims are replaced by: the Law on Obligations.
This Law comes into effect on the eighth day following its publication in the Official Gazette of the Socialist Federative Republic of Yugoslavia.
ON ENACTMENT OF THE LAW ON CHANGES IN THE LAW ON BILLS OF EXCHANGE
Enactment is hereby declared of the Law on Changes in the Law on Bills of Exchange, adopted by the Federal Assembly, at the session of the Council of Peoples dated 27 November 1970 and at the session of the Social and Political Council dated 25 November 1970.
28 November 1970
J. B. Tito.
CHANGES IN THE LAW ON BILLS OF EXCHANGE
In the Law on Bills of Exchange (Official Gazette of the Federative Peoples Republic of Yugoslavia No.104/46 and the Official Gazette of the Socialist Federative Republic of Yugoslavia No. 16/65), the words provisions of the Law on Expiry of claims in article 101 are replaced by the words provisions in the civil or commercial legislation.
This Law comes into effect on the next day following its publication in the Official Gazette of the Socialist Federal Republic of Yugoslavia.
THE TRANSLATION OF THE ABOVE TEXT IS FOR DESCRIPTIVE PURPOSES ONLY AND MAY NOT BE USED AS A BASES FOR ANY LEGAL ACTION.