Home  /  Negotiable Instruments Act  /  Section 133

Section 133: Holder of first acquired part entitled to all

Negotiable Instruments Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1881
Section 132 All 148 Sections of Negotiable Instruments Act Section 134

Legal Commentary & Landmark Judgments: Section 133

Section 133 establishes the rule of priority among holders of different parts of a bill in a set, enacting that as between holders in due course of different parts, the holder who first acquired title to their part is entitled to the other parts and to receive money.

  • Priority of First Transferee: The person who first acquired title to a part of the bill is the true legal owner of the entire bill.
  • Protection for Paying Acceptor: The acceptor paying the part first presented in good faith is discharged, even if another part was negotiated earlier.
  • Liability of Fraudulent Indorser: An indorser who negotiates different parts to different persons for value is liable on every such part as an independent bill.
Key Landmark Precedents:
  • Pinard v. Klockmann (1863) 3 B & S 388: The leading precedent on priorities among competing holders of parts of a bill in a set in international finance.
  • Kearney v. West Granada Mining Co. (1856): Affirmed that the first lawful transferee has superior title to all other parts under Section 133.
Courtroom Practice & Strategic Litigation Guidance:

In documentary export collections, international banks must surrender all parts of the bill upon receiving payment. If an indorser fraudulently sold Part 1 to Bank A and Part 2 to Bank B, Section 133 holds the indorser separately liable to both banks for the full amount.

Section 132 All 148 Sections of Negotiable Instruments Act Section 134