Last Updated on June 28, 2021 by LawEuro
German Civil Code (BGB) German law
Title 24
Bearer bond
Section 793
Rights under a bearer bond
(1) If a person has issued a document in which he promises payment to the bearer (bearer bond), then the holder may demand from him the act of performance in accordance with the promise, unless he is not entitled to dispose of the document. However, the issuer is also released by payment to a non-entitled bearer.
(2) The validity of the signature may be made dependent upon a provision included in the document requiring the observance of a specific form. For signature, a name signature produced by means of mechanical reproduction suffices.
Section 794
Liability of the issuer
(1) The issuer is obliged under a bearer bond even if it has been stolen from him or is lost or if it otherwise comes into circulation against his will.
(2) It has no bearing on the effectiveness of a bearer bond if the document is issued after the issuer has died or becomes incapable of contracting.
Section 795
(repealed)
Section 796
Objections of the issuer
The issuer may only raise against the bearer of the bond such objections as relate to the validity of the issuing or as follow from the document or as the issuer is directly entitled to in relation to the bearer.
Section 797
Duty to pay only in return for delivery
The issuer is only obliged to pay in return for delivery of the bearer bond. Upon delivery, he acquires ownership of the document even if the bearer is not entitled to make use of it.
Section 798
Replacement document
If a bearer bond is no longer suitable for circulation due to damage or disfigurement, then the bearer, as long as its essential contents and its distinguishing features can still be recognised with certainty, may demand from the issuer the issue of a new bearer bond in return for delivery of the damaged or disfigured one. He must himself bear and advance the costs.
Section 799
Declaration of invalidity
(1) A lost or destroyed bearer bond may, if the opposite is not specified in the document, be declared invalid by way of public notice procedure. Excepted from this are interest coupons, annuity coupons and profit share coupons as well as interest-free bearer bonds payable on sight.
(2) The issuer is obliged to provide the previous bearer, when requested, with information necessary for the public notice procedure or stoppage of payment and to issue the required certificates. The costs of the certificates must be borne and advanced by the previous bearer.
Section 800
Effect of the declaration of invalidity
If a bearer bond has been declared invalid, the party that obtained the exclusory order may, without prejudice to the authority to assert the claim under the document, demand issue of a new bearer bond instead of the invalidated one. He must himself bear and advance the costs.
Section 801
Extinction; limitation
(1) The claim under a bearer bond is extinguished at the end of thirty years after the occurrence of the time stipulated for payment if the document has not been presented to the issuer for redemption prior to the end of thirty years. If presentation occurs, then the claim is statute-barred in two years from the end of the submission period. Presentation is equivalent to judicial assertion of the claims under the document.
(2) For interest coupons, annuity coupons and profit share coupons, the period for presentation period is four years. The period of time commences at the close of the year in which the time stipulated for payment occurred.
(3) Duration and commencement of the presentation period may be determined differently by the issuer in the document.
Section 802
Stoppage of payment
The commencement and running of the period for presentation, and also limitation, are suspended for the benefit of the applicant by the stoppage of payment. Suspension commences upon the lodging of the application for stoppage of payment; it ends upon the completion of the public notice procedure and, if the stoppage of payment is ordered before the initiation of the procedure, even if, since the removal of the obstacle to initiation, six months have passed and the application was not made previously. The provisions of sections 206, 210 and 211 apply to this period with the necessary modifications.
Section 803
Interest coupons
(1) If interest coupons are issued for a bearer bond, then the coupons, unless they contain a stipulation to the contrary, remain in effect even if the main claim lapses or if the duty to pay interest is cancelled or modified.
(2) If such interest coupons are not returned when the main bearer bond is redeemed, then the issuer is entitled to retain the amount he is obliged to pay for the coupons under subsection (1).
Section 804
Loss of interest coupons or similar coupons
(1) If an interest coupon, annuity coupon or profit share coupon is lost or destroyed and if the previous bearer notifies the issuer of the loss prior to the end of the submission period, then the previous bearer may demand payment from the issuer after the period of time has ended. The claim is excluded if the lost coupon is presented to the issuer for redemption or if the claim from the coupons is asserted by court action, unless the presentation or assertion by court action occurs after the period of time has passed. The claim is statute-barred after four years.
(2) The claim referred to in subsection (1) can be excluded in the interest coupon, annuity coupon or profit share coupon.
Section 805
New interest coupons and annuity coupons
New interest coupons and annuity coupons for a bearer bond may not be issued to the bearer of the document authorising receipt of the coupons (renewal coupon) if the bearer of the bond has objected to the issuing. In this case, the coupons are to be delivered to the bearer of the bond if he presents the bond.
Section 806
Reregistration under name
The reregistration of a bearer bond as a bond registered in the name of a specified owner may only be done by the issuer. The issuer is not obliged to effect reregistration.
Section 807
Bearer tickets and stamps
If tickets, stamps or similar documents in which a creditor is not identified are issued by the issuer in circumstances from which it can be seen that the issuer intends to be obliged to an act of performance for the bearer, then the provisions of sections 793 (1) and 794, 796 and 797 apply with the necessary modifications.
Section 808
Registered securities with bearer clause
(1) If a document in which the creditor is named is issued with the stipulation that the act of performance promised in the document can be made to any bearer, then the debtor is released from obligation by performance to the bearer of the document. The bearer is not entitled to demand performance.
(2) The debtor is obliged to pay only in return for presentation of the document. If the document has been lost or destroyed, then if not otherwise provided, it may be declared invalid by way of public notice procedure. The provisions of section 802 on limitation apply.
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