Part Ⅱ Obligations
Chapter II Particular Kinds Of Obligations
Section 21 - Securities Payable To Bearer
A security payable to bearer is securities by which the bearer may claim from the maker a prestation according to the tenor thereof.
The maker of a security payable to bearer is bound to make the prestation to the person who presents it. However, he shall not make such prestation if he knows that the bearer is not entitled to dispose of the securities, or if he has been notified of the loss, stolen or destruction of the same.
The maker is released from his obligation if he has performed according to the provisions of the preceding paragraph, even if the bearer was not entitled to dispose of the securities.
If, after the bearer has notified the maker of the loss, stealing, or destruction of the security payable to bearer, the bearer does not present the proof of the application for public summons within five days, the notification loses its effect.
In the proceedings by public summons prescribed in the preceding paragraph, if the bearer does not present the proof of the commencement of the litigation to the maker within ten days after the court has notified him that report of rights from the third person, the same rule shall be applied.
The maker of a security payable to bearer is bound by it towards bona fide bearers, even if it has been lost, or stolen by him, or has otherwise passed into circulation without his consent.
A security payable to bearer does not lose its effect, even if the securities is issued after the maker has died or has lost his capacity to make juridical acts.
The maker of a security payable to bearer may only take the defenses which result from the voidance of the securities itself, or for its tenor, or from his legal relationship with bearer as valid defenses against the bearer. However if the bearer acquires the securities in bad faith, the maker may also take the defenses against the former bearer as valid defenses against the bearer.
The bearer of a security payable to bearer is bound to surrender the securities to the maker on his requesting performance.
When the maker has, in accordance with the previsions of the preceding paragraph, received back the said securities, he acquires the ownership of same, even if the bearer was not entitled to dispose of it.
If a security payable to bearer is damaged or defaced in such a way as to be no more fit for circulation, but its essential contents and distinctive marks are still recognizable, the bearer is entitled to request the maker to issue a new security payable to bearer on surrender of the old one.
The costs of replacement are to be borne by the bearer, except in the case of banknotes or other currency notes, where the costs are to be borne by the maker.
In case a security payable to bearer has been lost, stolen or destroyed, the court may, on the application of the bearer, declare the securities invalid by means of proceedings by public summons.
In the case provided for in the preceding paragraph, the maker is bound to give the bearer such information concerning the obligation as may be necessary for proceedings by public summons, and to supply him with whatever evidence that is necessary.
When a period for the presentation of a security payable to bearer has been fixed, if the court has, on the application of a person taking proceedings by public summons, ordered the stoppage of payment by the maker, the period of presentation is suspended.
The suspension provided for in the preceding paragraph runs from the time of the application for the aforementioned order, and ends on the termination of the proceedings by public summons.
When the maker of a security payable to bearer has been notified of the loss, theft or destruction of for interest, annuity or dividends, if such securities are not presented for payment before the expiration of the period of prescription provided by law for periodical payments, the bearer who made the notification is entitled to claim from the maker the payment of the interest, annuity or dividends accruing to the said securities. However, this claim shall be extinguished by prescription after one year from the date of expiration of the prescription period.
If, before the expiration of the prescription period, the securities are presented for payment by a third party, the maker shall notify the third party that payment has been stopped and shall defer payment until such third party and the person making the notification have come to an agreement, or until the case has been decided by a non-appeasable judgment of the court.
The provisions of the last sentence of paragraph I, Article 720, and of Article 725 do not apply to security payable to bearer which bear no interest but are payable at sight, except securities for interest, annuity and dividends.