39. (1) As between immediate parties and as regards a remote party, other than a holder in due course, the delivery of a bill

(a) in order to be effectual must be made either by or under the authority of the party drawing, accepting or endorsing, as the case may be; or

(b) may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the bill.

(2) Where the bill is in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him, so as to make them liable to him, is conclusively presumed.

R.S., c. B-5, s. 40.