legal ground
After the promulgation of Bill Law in China, with the rapid development of China's market economy, a large number of bills were produced and highly circulated, and bill disputes frequently occurred. Later, the Supreme People's Court passed a judicial interpretation that affected the bill industry, namely "Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Bill Disputes".
This judicial interpretation is the basis of the court judge's judgment and also constitutes a part of the negotiable instrument law. It supplements the law of negotiable instruments and clarifies its spirit. Among them, Article 2 and Article 14 of the judicial interpretation respectively have the following provisions: According to Article 10 of the Negotiable Instruments Law, if the bill debtor (that is, the drawer) brings a bill return lawsuit on the grounds that the basic relationship when the bill is not transferred is illegal, the two parties have no real trading relationship and creditor-debtor relationship, and the holder has paid the consideration but failed to pay it, the people's court shall accept it.
It should be noted that the situation here is when the bill is not transferred, but once the bill is transferred from the first-hand holder, the bill defense will be cut off.
The people's court will not support the bill debtor's defense against the holder of the bill endorsement on the grounds of the provisions of Articles 10 and 21 of the Bill Law.
Article 10 of the Law on Negotiable Instruments: The issuance, acquisition and transfer of negotiable instruments shall follow the principle of good faith, and have true trading relationship and creditor-debtor relationship. The acquisition of the bill must pay the consideration, that is, the corresponding price recognized by both parties of the bill should be paid.
Article 21 of the Negotiable Instruments Law: The drawer of a bill of exchange must have a true entrusted payment relationship with the drawee and have reliable funds to pay the amount of the bill. A bill of exchange without consideration shall not be issued to deceive banks or other parties to the bill. As long as the bill is transferred by the first-hand holder and a new holder is produced, at this time, the new holder can no longer be protected by the provisions on basic relations (real trade relations) and can not be supported by the people's court.