■«j;i M J ^f<rvc/xui cO 0(^--6(y^ £2^ c< ^ UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY A TREATISE ON NEGOTIABLE INSTRUMENTS FOE COLORADO, CONNECTICUT, DISTRICT OP COLUMBIA, FLORIDA. IDAHO, IOWA. KENTUCKY, LOUISIANA, MASSACHUSETTS, MISSOURI, MONTANA. NEVADA. NEW HAMPSHIRE, NEW JERSEY. NEW MEXICO. NORTH CAROLINA. NORTH DAKOTA, OREGON, PENNSYLVANIA, TENNESSEE. UTAH, VIRGINIA, WASHINGTON, WEST VIRGINIA. WYOMING, ARIZONA, ILLINOIS, KANSAS. MARY- LAND, MICHIGAN, NEBRASKA, NEW YORK, OHIO, OKLAHOMA, RHODE ISLAND, WISCONSIN. By ARTHUR W. SELOVER, B. A., LL. M. SECOND EDITION By WILLIAM H. OPPENHEIMER. CHICAGO CALLAGHAN AND COMPANY 1913 Copyright, 1900, BY KEEFE-DAVIDSON LAV/ BOOK CO. Copyright, 1902, BY KEEFE-DAVIDSON CO. Copyright, 1910, BY THE KEEFE-DAVIDSON CO. PREFACE. The Uniform Negotiable Instrument Law is now in force in thirty-seven states and territories and in the District of Columbia, and has become such an important part of our commercial law as to warrant the publication of a general work on the subject. That this book might be of the most practical value to lawyers and others having occasion to refer to the Law, it has been deemed advisable to treat the subject analytically and to change con- siderably the arrangement as found in the Law and in the previous edition of this book. Also, there has been added in black letter type at the beginning of the treatment of each section the pro- vision of the act in question or as much of it as is treated in that particular part of the work. This arrangement, coupled with the various tables and copy of the original draft of the Law found in the Appendix, it is hoped will prove not only convenient but of great practical benefit. The Law has been before the courts in numerous cases and many important decisions have been rendered, and it is regretted that these have not been altogether uniform in their construction of the various provisions. Careful and systematic search has been made for all cases and it is believed that the present work contains all the published cases decided under the act up to March, 1910. While primarily it has been sought to treat the Uniform Nego- tiable Instrument Law and its interpretation and construction, still there has been incorporated in the book the important omitted general rules of the Law Merchant which are still in force, and reference has repeatedly been made to the Law Merchant as au lY PREFACE. aid to interpretation so as to show clearly the change made by the Law. It is hoped that this combination of the Law and the rules of the Law Merchant, as well as the combination of annotated act and textbook style of treatment, will afford a practical textbook on the subject of negotiable instruments in those states which have adopted the Uniform Negotiable Instrument Law. St. Paul, Minn., August, 26th, 1910. WM. H. OPPENHEIMER. TABLE OF CONTENTS. CHAPTER I. General Nature, Scope, and Application of the Negotiable Instruments Laws. Page § 1. Nature and Purpose 1 2. Title of Laws 3 3. Application of Laws 4 4. When Law Merchant Governs 7 5. Laws Repealed 8 CHAPTER II. Definitions and Special Provisions Relating to Bills, Notes and Checks, Page § 6. Promissory Notes • • • • 1'^ 7. Bills of Exchange .■ • H 8. (a) Inland Bills 13 (b) Foreign Bills 13 (c) Bills Drawn in Sets 14 9. Checks 14 10. General Definitions 16 CHAPTER III. Execution and Delivery. Page 11. Freedom of Consent 17 12. Necessity of Writing 18 13. Place and Time of Execution 19 14. Presumption of Date 19 15. Insertion of Date 20 V ^ TABLE OF CONTENTS. Page § 16. Date Given Presumed Correct 21 17. Exception — Bona Fide Holders 22 18. Antedating and Postdating 23 19. Incomplete Instruments 23 20. Completion Must be as Authorized 26 21. Signature — Necessity and Position 28 22. Form 29 23. Signature by Agent 30 24. Liability of Agent 31 25. Descriptive Words 32 26. Signature by "Procuration" 34 27. Delivery — Necessity 34 28. Sufficiency of Delivery 35 29. Presumptions 37 CHAPTER IV. Essentials of Negotiability. Page 30. In General 40 31. Substantial Compliance Sufficient 41 32. Matters Not Affecting Negotiability 41 1. Absence of Date 41 2. Seal 42 3. Failure to Specify Value 44 33. The Promise or Order 45 34. There Must be a Promise or Order to Pay 45 35. The Promise or Order Must be Unconditional 48 36. Unconditional Though Contains: 1. Reference to a Particular Fund or Account for Reim- bursement 50 2. Statement of the Transaction 50 37. Instruments Payable Out of Particular Fund _., 50 38. Sum Certain 54 39. Sum Payable is a Sum Certain Though Payable 54 1. With Interest 54 2. By Stated Instalments 54 3. By Stated Instalments with Default Provision 54 4. With Exchange 55 5. Collection Costs and Attorney's Fees 55 40. Provision for Taxes ^ 55 41. Must be Payable in Money 62 42. Certainty as to Time of Payment ^ 64 TABLE OF CONTENTS. yJI Page [43. Instruments Payable on Demand 65 44. Overdue Paper 65 45. Fixed or Determinable Future Time 67 46. Instrument Payable on Contingency 67 47. Fixed or Determinable Future Time — Prior Contingency 67 48. Words of Negotiability 71 49. Supplied by Indorsement _. 71 50. Instruments Payable to Order 72 51. Instruments Payable to Bearer 76 52. Certainty as to Parties 81 53. Designation of Drawee 83 54. Joint Drawees i... 84 55. Place of Payment 84 56. No Place of Payment Specified 85 57. Provisions Not Affecting Negotiability 86 1. Sale of Collateral; Conditional Sale Notes 86 2. Confession of Judgment 86 3. Waiving Statutory Rights 86 4. Option to Require Something in Lieu of Payment of Money 86 58. Illegal Provisions 86 CHAPTER V. Consideration. Page 59. Presumption of Consideration 92 60. Sufficiency of Consideration 94 61. Antecedent or Pre-existing Debt 94 62. Lienholders 95 63. Want or Failure of Consideration 99 64. Inadequacy of Consideration 99 65. Accommodation Paper 101 66. Liability of Accommodation Party to Holder for Value 101 CHAPTER VI. Construction and Operation. Page § 67. 1. Ambiguity as to Amount — Words Control Figures 106 2. Interest Clause 106 ■^ TABLE OF CONTENTS. Page 3. Undated Instruments ; 106 4. Conflict Between Written and Printed Portions 107 5. When Bill May be Treated as Promissory Note 107 6. Capacity in Which One Signs Uncertain 107 7. Joint and Several Liability 107 8. Memoranda on Instrum.ent 107 9. Several Instruments 107 § 68. Bill of Exchange Not an Assignment 113 69. Exception — Bill on Particular Fund 114 70. Check Not an Assignment 114 CHAPTER VII. Presentment of Bills of Exchange for Acceptance. Page § 71. When Necessary 117 72. When Excused 119 12). Must be Within Reasonable Time 120 74. Reasonable Hour; Business Day 120 75. Sunday or Holiday 120 76. Where Time is Insufificient 120 n . Place of Presentment 123 78. By Whom Made 124 79. To Whom Made — Drawee or His Agent 124 80. Bill Addressed to Two or More Drawees Not Partners 124 81. Drawee Dead 125 82. Bankruptcy or Insolvency of Drawee 125 83. Bills Drawn in Sets 126 84. Dishonor by Nonacceptance 127 85. Rights of Holder on Nonacceptance 127 86. Duties of Holder on Nonacceptance 127 87. Referee in Case of Need 128 CHAPTER VIII. Acceptance of Bills of Exchange. Page 88. Necessity 130 89. Nature 131 90. Revocation 131 91. Necessity of Writing and Signature of Drawee 132 92. Acceptance on Bill 132 tabll: of contei^ts. ix Page § 93. Acceptance on Separate Instrument 133 94. Implied Acceptance 135 95. Medium of Payment 138 96. Presumption of Consideration 139 97. Sufficiency of Consideration 139 98. Time of Acceptance 140 99. Insertion of Date 141 100. Insertion of Wrong Date 141 101. Date Prima Facie Correct 141 102. General and Qualified Acceptance 142 103. Qualified Acceptance 143 104. Right to General Acceptance 145 105. Incomplete and Overdue Paper 146 106. Bills Drawn in Sets 147 107. Acceptance on More Than One Part 147 108. Certification 143 109. Effect of Certification 148 110. Necessity of Writing 149 111. Certification by Drawer 149 112. Certification by Holder 149 113. Promise to Accept ISO CHTPTER IX. Acceptance of Bills of Exchange for Honor. Page § 114. When Permissible 153 lis. How Made 154 116. Construction of 154 117. Liability of Acceptor 154 118. Parties Liable to 155 119. Maturity of Bill Payable After Sight 156 CHAPTER X. Indorsement and Transfer. Page § 120. "Negotiability" and "Assignability" Distinguished 158 121. Effect of Distinction on Rights of Parties 158 1. Notice to Debtor 150 2. Equities and Defenses Available 159 X TABLE OF CONTEJNTS. Page 3. Suit in Name of Transferee 160 4. Presumption of Consideration 161 § 122. What Constitutes Negotiation 161 1. Bearer Paper 161 2. Order Paper 161 123. Transfer, Without Indorsement, of Order Paper .' 161 124. Negotiation by Delivery 163 125. Negotiation by Indorsement — Requisites 165 1. Where Written 165 2. Consideration 165 3. Delivery 165 4. Must Be of Entire Instrument 165 126. Wording of Indorsement 165 127. Name or Designation of Payee or Indorsee Erroneous 163 128. Kinds of Indorsement 169 129. Special Indorsements 169 130. Blank Indorsement Made Special 169 131. Blank Indorsement 171 132. Restrictive Indorsements 172 133. Rights of Restrictive Indorsee 174 134. Rights of Subsequent Indorsees 174 135. Qualified Indorsements 175 136. Conditional Indorsements 177 137. Indorsements— By Whom Made 178 138. Corporation or Infant 178 139. Joint Payees 179 140. By Agent 180 141. Indorsement in Representative Capacity 180 142. By Fiscal Officer 181 143. Date of Indorsement 183 144. Presumption 183 145. Place of Indorsement 183 146. Negotiation of Bills Drawn in Sets 184 147. Striking Out Indorsements 185 148. Termination of Negotiability 18') 149. Reissuance and Renegotiation 186 CHAPTER XI. Liabilities and Rights of Parties. Page § 150. In General 188 151. Of Maker , 189 (TABLE OP CONTENTS. xl Page t 152. Of Drawer 190 153. Of Acceptor 191 154. Of Indorser — Who Deemed an Indorser 195 155. Indorser of Paper Negotiable by Delivery 197 156. Irregular Indorsers 198 157. Bills in Sets 201 158. Warranties — Negotiation by Delivery or Qualified Indorse- ment 201 159. Persons in Whose Favor Warranty Exists 201 160. Public or Corporate Securities 202 161. Warranties — Indorser Without Qualification 203 162. Contract of General Indorser 203 163. Consecutive and Joint Indorsers 207 164. Special Indorsers 209 165. Indorsement by Broker or Agent 209 166. Rights of Holder 210 167. Bona Fide Holders 211 168. Presumptions and Burden of Proof 228 169. Defenses Available Against Bona Fide Holders 232 170. Incomplete Instruments 235 171. Presumption of Delivery 235 172. Bona Fide Holder May Enforce Payment to Full Amount 238 173. Holder Not in Due Course 240 174. Same — Deriving Title From Holder in Due Course 240 CHAPTER XII. Presentment for Payment. Page 175. When Necessary 243 176. Instrument Payable at a Special Place 243 177. Necessary to Charge Drawers and Indorsers 243 178. By Whom Made 246 179. To Whom Made 247 180. Party Primarily Liable Dead 247 181. Several Persons Primarily Liable 247 182. Time for Presentment 249 183. Instruments Payable at Bank 249 184. Day of Maturity Sunday or Holiday 249 185. Day of Maturity Saturday 249 186. Days of Grace 253 187. Determining Date of Maturity 254 188. Instruments Payable and Not Payable on Demand 254 xu TABLE OF CONTENTS. Pa?re 189. Checks 254 190. Excusable Delay 259 191. Presentment to Acceptor For Honor 254 192. Place for Presentment 261 193. Manner of Presentment 263 194. Dispensing With and Waiver of Presentment 264 195. Waiver of Protest Includes 264 196. Dishonor For Nonpayment 266 197. Rig-hts of Parties on Dishonor 267 198. Referees in Case of Need 267 CHAPTER XIII. Protest of Bills of Exchange. Page 199. Necessity 26R 200. Dishonor of Bill by Acceptor For Honor 268 201. Protest of Bill for Nonacceptance and Nonpayment 268 202. Nature and Sufficiency of Protest 270 203. By Whom Made 27"^ 204. Time of Making Protest— Extending Notes 273 205. Protest Before Maturity Where Acceptor is Insolvent 273 206. Protest of Bill Accepted For Honor 273 207. Place of Protest 275 208. Protest of Lost or Detained Bill 275 209. Waiver 276 210. Excuses For Failure or Delay to Protest 277 211. Damages Recoverable in Case of Protest 278 CHAPTER XIV. Notice of Dishonor. Page 212. Necessity 281 213. When Need Not be Given Drawer 282 214. When Need Not be Given Indorser 284 215. By Whom Given .; 285 216. May be Given by Agent 285 217. Notice Where Instrument is in Agent's Hands 285 218. Parties Protected — Notice Given by or on Behalf of Holder. 287 219. Same — Notice Given by or on Behalf of Party Entitled to Give Notice k-'j) 287 TABLi: OF COA'TENTS. xiii Page § 220. To Whom Given 288 221. When Parties Are Dead 288 222. When Parties Are Partners 288 223. Joint Parties Not Partners 288 224. Notice to Bankrupt or Insolvent 288 225. Form and Requisites 291 226. Sufficiency of Terms and Effect of Misdescription 292 227. How Given 293 228. By Mail 294 229. Time Within Which Notice Must Be Given 296 230. Parties Residing in the Same Place 296 231. Parties Residing in Different Places 297 232. Notice to Antecedent Party 298 233. Notice to Principal by Agent 299 234. Place Where Notice Must be Sent 299 235. Actual Receipt Sufficient 300 236. Dispensing With Notice 302 237. Instruments Dishonored by Nonacceptance 302 238. Waiver of Notice 303 239. Waiver of Protest 303 240. Parties Affected by Waiver 303 241. Excusable Delay 305 242. Effect of Omission to Give Notice 306 CHAPTER XV. Forgery and Alteration. Page § 243. Forged or Unauthorized Signature 307 244. Effect of Alteration 310 245. Bona Fide Holders 312 246. What Alterations Are Material 314 247. Same 315 248. Presumptions and Burden of Proof 317 CHAPTER XVI. Payment and Discharge. Page 249. Hovvr Instrument is Discharged 319 1. Payment to Holder 319 2. Cancellation 320 xiv TABLE OF CONTENTS. Page 3. Other Acts Discharging Simple Contracts for the Pay- ment of Money 320 4. Principal Debtor Becoming Holder 320 § 250. Instruments Payable at Bank 325 251. What Constitutes Payment 326 252. Instruments Drawn in Sets 328 253. Payment of Bills of Exchange for Honor — Who ]\Iay Make 329 254. Same — Attestation 329 255. Same — Declaration Before Payment for Honor 329 256. Same — Preference of Parties Offering to Paj"- for Honor .. 330 257. Same — Effect of Payment on Subsequent Parties 330 258. Same — Refusal of Holder to Receive Payment for Honor .. 330 259. Same— Rights of Payor for Honor 330 260. Discharge of Parties Secondarily Liable 332 261. Who is Primarily Liable 336 262. Renunciation 336 263. Effect of Payment by Parties Secondarily Liable 338 264. Presumptions 339 265. Renewal of Liability , 34J (QL ^ /fOJL - 4r^ 'y^'^/7 '^^^' ' ^ ^^ NEGOTIABLE INSTRUMENTS LAW CHAPTER I. GENERAL NATURE, SCOPE, AND APPLICATION OF THE NEGOTIABLE INSTRUMENTS LAWS. § \. Nature and Purpose. § 2. Title of Laws. § 3. Application of Laws. When Laws Take Eflfecit. § 4. When Law Merchant Governs. § 5. Laws Repealed. Nature and Purpose. § 1. The Negotiable Instruments Law is primarily a codifica- tion of the rules of the law merchant. The national conference of commissioners on uniform state laws, a body composed of commissioners from twenty-nine states and two territories, submitted to the various legislatures and to congress a draft for a uniform law governing negotiable instruments. This draft, which is in substance a codification of the principles of the common law governing negotiable in- struments,! has been adopted, with some modifications, in 1 Union Stock Yards Nat. Bank v. Bolan, 14 Idaho, 87, 93 Pac. 508, 125 Am. St. Rep. 146; Parsons v. Utica Cement Co. (Conn.) 73 Atl. 785; Mackintosh v. Gibbs (N. J. Law) 74 Atl. 708. Opp. — Sel. — 1 2 GENERAL NATURE AND SCOPE. § 1 thirty-seven states and in the District of Columbia.^ It is such a matter of common knowledge as to make it proper for the courts to take judicial notice of the fact that the act was en- acted because of an effort on the part of the bar of many, if not all, of the states of the union to bring about a uniform sys- tem of law respecting negotiable instruments.^ While as be- fore stated, it was the evident purpose and intent of the framers of the statute to incorporate into it the provisions of the common law,^ still there follows the usual embarrassment which all codifiers encounter in framing a statute to meet all possible cases.^ The statute was, however, enacted for the purpose of furnishing, in itself, a certain guide for the determina- tion of all questions covered thereby relating to commercial paper,^ and, therefore, so far as it speaks w-ithout ambiguity as | to any such question, reference to case law as it existed prior to , its enactment is unnecessary and apt to be misleading."^ It is ; not merely a codification of existing rules, but makes some quite material^ changes,^ and hence the language of the act is not to be ignored because in some respects a change in the law is effected.^° If, however, a provision is doubful or has a technical meaning, resort may be had to the previous law.^^ The character of the act as a complete codification of the law, justifies, at times, 2 For list of states in which the negotiable instruments laws have been adopted, see Appendix C. SRockfield V. First Nat. Bank, 11 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842; Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 111 Am. St. Rep. 717, 2 L. R. A. (N. S.) 299. 4 Gilpin V. Savage, 60 Misc. 60S, 112 N. Y. Supp. 802; Union Stock Yards Nat. Bank v. Bolan, 14 Idaho, 87, 93 Pac. 508, 125 Am. St. Rep. 146; Mayers v. McRimmon, 140 N. C. 640, 53 S. E. 447, 111 Am. St. Rep. 879. 5 Gilpin V. Savage, 60 Misc. 605, 112 N. Y. Supp. 802. 6 The act was intended to provide a complete and comprehensive law on the subject. Cellers v. Meachem, 49 Or. 186, 89 Pac. 426; First Nat. Bank v. Miller, 139 Wis. 126, 120 N. W. 820. 7, 8 Columbian Banking Co. v. Bowen, 134 Wis. 218, 114 N W. 451; Bank of England v. Vagliano Bros. [1891] App. Cas. 107, 145. 9 Columbian Banking Co. v. Bowen, 134 Wis. 218, 114 N. W. 451. 10 Vander Ploeg v. Van Zuuk, 135 Iowa, 350, 112 N. W. 807, 124 Am. St Rep. 275. 11 Bank of England v. Vagliano Bros. [1891] App. Cas. 107, 145. § 2 TITLE OF LAWS. 3 the application of the maxim "Expressio unius est exchisio al- terius."^- In construing provisions of the American act co])ied from the English Bills of Exchange Act, it has been said that, where previous decisions in the two countries are at variance, "it would seem not unreasonable to suppose that it was the intention of the framers of the American act" to have it "construed accord- ing to the law of this country rather than of England. "^^ Title of Laws. § 2. The act only deals with "negotiable" instruments. The general title of the act is "A general act relating to Ne- gotiable Instruments (being an act to establish a law uniform with the laws of other states on that subject)." This title has been held sufficient under a constitutional provision providing that no law shall embrace more than one subject to be expressed in the title.i* The negotiable instruments laws, as passed in the various states, have almost uniformly adopted the short title "Negotiable Instru- ments Law."^^ This title, when taken with the provisions that the words "bill" "note," and "instrument" shall mean, respectively, bill of ex- change, negotiable promissory note, and negotiable instrument,^^ excludes non-negotiable instruments.^'' Such instruments are 12 Cellers v. Meachem, 49 Or. 186, 89 Pac. 426. isjefifrey v. Rosenfeld, 179 Mass. 506, 61 N. E. 49. "Gilley v. Harrell, 118 Tenn. 115, 101 S. W. 424. 15 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., W. Va., Wyo. (§190); 111. (§189); Kan. (§1); Md. (§13); Mich. (§1); N. Y. (§1); Old. (art. 1); R. L (§1); Wis. (§1675). Arizona, Massachusetts, Nebraska, Ohio and Washington are the exceptions. 16, 17 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. J., N. M., N. C, N.D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§191); Ariz. (§3487); III. (§190); Kan. (§2;; Md. (§14); Mich. (§2); Neb. (§189); N. H. (§190); N. Y. (§2); Ohio (§3178); Okl. (art. 1); R. L (§2); Wis. (§675). Harvey v. Dimon, 36 4 GENERAL NATURE AND SCOPE. § 3 still governed by the rules of the common law, or by the statutes specially applicable to them. It will thus be seen that, as soon as non-negotiability is estab- lished by applying the tests laid down in the sections prescribing the proper form of negotiable instruments, that fact will preclude the application of any of the other sections of the negotiable in- struments laws to the instrument in question.^^ Application op Laws. § 3. The negotiable instruments laws have no retroactive eflfect. The negotiable instruments laws do not apply to instruments made and delivered prior to their passage,^^ though this is not necessarily true as to indorsements made on such instruments after the enactment of the statute.^^^ Had this provision been omitted, the courts doubtless would have construed the laws to be inapplicable to instruments delivered before their passage, under the general rule that a statute will not be given a retro- active effect.^'' To determine what constitutes a delivery prior to the passage of one of these laws, we must look to the definition of "delivery" given in such laws. It is there defined as a "transfer of posses- sion, actual or constructive, from one person to another, "^i Pa. Super. Ct. 82; Westberg v. Chicago Lumber & Coal Co., 117 Wis. 589, 94 N. W. 572. 18 But see Allison v. Hollembeak, 138 Iowa, 479, 114 N. W. 1059. 19 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§195); Ariz. (— ) ; 111. (§194); Kan. (§6); Md. (§18); Mich. (§2); Neb. (§194); N. H. (§194); N. Y. (§6); Ohio (§3178); Okl. (art. 1); R. L (§6); Wis. (§1675). Barden v. Hornthal (N. C.) 65 S. E. 513; Dorsey v. Wellman (Neb.) 122 N. W. 989. 19a Mackintosh v. Gibbs (N. J. Law) 74 Atl. 708. 20 Parkinson v. Brandenburgh, 35 Minn. 294, 28 N. W. 919, 59 Am. Rep. 326; Fife v. Oshkosh, 89 Wis. 540, 62 N. W. 541. 21 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo (§191); Ariz. (§3487); 111. (§190); Kan. (§2); Md. (§14); Mich. (§2); Neb. (§189); N. Y. (§2); N. H. (§190); Ohio (§3178); Okl. (art. 1); R. I. (§2); Wis. (§1675). §3 WHEN LAWS TAKE EFFECT. 5 Possession then by the payee, before the passage of one of these laws, would be prima facie evidence of delivery before that time.22 The effect of this provision has been considered by the courts in New York, where it has been held that the subsequent provision that notes payable to the order of the maker must be indorsed by him^^ does not apply to a note negotiated before the passage of the law,^* and that questions of demand and notice relating to an instrument protested before the passage of the law are not governed thereby.^^ There is some conflict as to whether the law applies to a renewal note given after the taking effect of the act, the original note having been given before that time.-" But by holding the act to apply to such notes, it is not thereby rendered unconstitutional as impairing the obligation of a con- tract.27 When laws take effect. The time for the negotiable instruments laws to take effect is, of course, different in the different states.^^ In some of the states the law takes effect from and after its passage, and in others it 22 Mahon's Adm'r v. Sawyer, 18 Ind. 73; Newcombe v. Fox, 1 App. Div. 389, 37 N. Y. Supp. 294; Kidder v. Horrobin, 72 N. Y. 159; Wood- ford V. Dorwin, 3 Vt. 82, 21 Am. Dec. 573; Mitchell v. Conlej. 8 Eng. (Ark.) 414. For a discussion of the question of delivery, see post, §§27-29 23 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Or., Okl., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§184) Ariz. (§3487); 111. (§183); Kan. (§191); Md. (§203); Mich. (§186); Neb. (§183); N. Y. (§320); Ohio (§3177 v); R. I. (§192); Wi.s. (§1684). 21 Odell V. Clyde, 23 Misc. 734, 53 N. Y. Supp. 61. 25 University Press v. Williams, 28 Misc. 52, 59 X. Y. Supp. 817. See, also, McMoran v. Lange, 25 App. Div. 11, 48 N. Y. Supp. 1000. 26 That it does. Walker v. Dunham, 135 Mo. App. 396, 115 S. W. 1086; Far Rockaway Bank v. Norton, 186 N. Y. 485, 79 N. E. 709. That it does not. People's Nat. Bank v. Schepflin, 73 N. J. I^tw, 29, 62 Atl. 333. 27 Old debt extinguished by renewal note. Walker v. Dunham, 135 Mo. App. 396, 115 S. W. 1086. 28 See Appendix C. 6 GENERAL NATURE AND SCOPE. § 3 takes effect on a specified day after, or on the expiration of a specified period after, passage.^^ "Where the law takes effect at a date different from the date of its passage, the question whi'her instruments executed and delivered between the time of the pass- age of the law and the time it took effect are governed thereby is important. In a case where a certain provision of a statute was to take effect in "April next," the court said that a statute must be "understood as beginning to speak at the moment it became a law, and not before. It must have the same construction as if passed on the day when it took effect ;"^° and Cooley, J., in a case involving a statute which, under the constitution of Michigan, took effect ninety days from the end of the session at which it was passed, the legislature not having otherwise directed, said: "When the legislature, for reasons satisfactory to them, de- cide to postpone the period for the statute to come into operation, to a later period, it is to be presumed, nothing appearing to the contrary, that in the particular case it was deemed important that more time be allowed for citizens to ascertain the proposed changes, and to become acquainted with their bearings. The time thus allowed is the reasonable time fixed by the legislature to bring knowledge of the law home to the parties interested, be- fore they are required to govern their actions by it." This case held that such a statute, between the time of its passage and the time it was to take effect, was not even notice to persons to be affected by it.^^ Under these decisions, and the general rule that an instrument is governed by the law in force at the time it was executed, it is clear that negotiable instruments executed and delivered between the passage of one of the negotiable instru- 29 See post, Appendix B. 30 Rice V. Ruddiman, 10 Mich. 125. See, also, Charless v. Lamberson, 1 Iowa, 435, 63 Am. Dec. 457, where a statute for the protection of home- steads, which made them liable for all debts contracted prior to its passage, was held to mean "prior to its taking effect," although that period was some time after its enactment. 31 Price V. Hopkin, 13 Mich. 318. See, also, People v. Johnston, 6 Cal, 674; Bond v. Dolby, 17 Neb. 491, 23 N. W. 351. §4 WHEN LAW MERCHANT GOVERNS. 7 ments laws and the time fixed for it to take effect are not gov- erned thereby.^2 When Law IMerchant Governs. S 4, The law merchant governs in cases not provided for. (^ C, £J ^ lu cases not provided for in the negotiable instruments laws,^ the rules of the law merchant govern.^^ Obviously, any prior' statute repealed by any one of the negotiable instruments laws is not included in the term "law merchant," as here used. The term, then, must be given its primal meaning, which is a code or system of rules arising out of the usages and customs of trade. The exigencies of trade required something more elastic thank a purely cash basis for business transactions. A credit basis which \ treated the evidence of indebtedness as an ordinary contract, and allowed a transferee no greater rights than his transferor, — in other words, saddled upon him all equities and defenses to which the contract was subject between the original parties, — would not tend to increase trade to any great extent; so a more extended credit system arose by custom among merchants, which allowed certain evidences of indebtedness to be transferred free from all prior equities, to persons who took in due course of business, with- out notice, and in good faith. Bills of exchange were always within the custom of merchants, and all dispute as to the status of promissory notes was settled by the statute (3 & 4 Anne, c. 9, § 1), which placed them on the same basis as bills of exchange.^* 32 Duerson's Adm'r v. Alsop, 27 Grat. (Va.) 229; Barlow v. Gregory, 31 Conn. 261; Cook v. Mutual Ins. Co., 53 Ala. 37. 33 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§196); Ariz. (§3491); 111. (§195); Kan. (§7); Md. (§19); Mich. (§2); Neb. (§194); N. Y. (§7); N. H. (§195); Ohio (§3178 e); Okl. (art. 1); R..I. (§7); Wis. (§1675). 3* This statute provided, inter alia, that "all notes in writing whereby any person shall promise to pay to any other person, his order, or unto bearer, any sum of money mentioned in the note, * * * shall be assignable or indorsable over in the same manner as inland bills of ex- change are according to the custom of merchants; * * * and that any person to whom such note is indorsed or assigned, or the money therein 8 GENERAL NATURE AND SCOPE. §5 The rules of the law merchant and the decisions of the English courts affecting them, together with the English statutes affirm- ing or modifying these rules and decisions, formed part of the system of law which the American colonies adopted after the Revolution, and are now generally considered as a part of the common law.^^ In cases governed by the laws of sister states, the court will not presume the negotiable instruments law in force in such state but will presume it to be the same as the common law of the forum previous to the enactment of the statute.^^ Laws Repealed. § 5. All prior inconsistent laws are repealed. In some of the states the negotiable instruments law has ex- pressly repealed a schedule of prior statutes relating to nego- tiable instruments, and in others it has repealed generally all in- consistent acts.^^ Where no express repeal is stated, prior incon- sistent and repugnant acts are repealed by implication.^s As mentioned ordered to be paid by indorsement thereon, may maintain his action for such sum of money either against the person who assigned the note, or against any of the persons who indorsed the same, in like manner as in cases of inland bills of exchange." It was repealed by the Bills of Exchange Act 1882 (45 & 46 Vict. c. 61). The provisions of the statute of Anne are, however, reaffirmed in the Bills of Exchange Act, §89, of which provides that, with the exceptions therein noted, the pro- visions of such Bills of Exchange Act touching bills of exchange shall apply also to promissory notes. 35 Cook v. Renick, 19 111. 598; Piatt v. Eads, 1 Blackf. (Ind.) 80; Board ComVs Bartholomew Co. v. Bright, 18 Ind. 93. The law merchant is presumed to be in force in the state until the contrary is shown. Hudson v. Matthews, 1 Morris (Iowa) 94. 36 Demelman v. Brazier, 193 Mass. 588, 79 N. E. 842. Common law pre- sumed to exist. Bank of Laddonia v. Bright-Coy Commission Co. (Mo. App.) 120 S. W. 648. 37 See table of repealed acts in Appendix. 38 People v. Palmer, 52 N. Y. 83; Wood v. Oakley, 11 Paige (N. Y.) 403; Grant County v. Sels, 5 Or. 243; Greeley v. City of Jacksonville, 17 Fla. 174; Wirt v. Stubblefield, 17 App. D. C. 283. §5 LAWS REPEALED. the negotiable instruments laws purport to revise and codify the rules and statutes relating to negotiable instruments, they repeal also all prior statutes on the subject, even though such statutes are not inconsistent with the provisions of the negotiable instru- ments laws.^^ The reason for this rule is that there is a reason- able inference that the legislature cannot be supposed to have in- tended that there should be two distinct enactments, embracing the same subject-matter, in force at the same time.*** The ques- tion is one of legislative intent, and, if the new legislation was intended as a substitute for the old, the old is repealed by impli- cation^i This rule is of general application, though the pro- visions of the prior statutes have not been embodied in the codi- lication>2 m. 39 Commonwealth v. Kelliher, 95 Mass. (12 Allen) 480; Cahall v. Citi zens' Mut. Bldg. Ass'n, 61 Ala. 232; Bartlet v. King, 12 Mass. 536, 7 Am Dec. 99; Wirt v. Stubblefield, 17 App. D. C. 283; Tilley v. Hanell, 118 Tenn. 115, 101 S. W. 424. 40 Commonwealth v. Kelliher, 94 Mass. (12 Allen) 480. *1 State V. Harris, 10 Iowa, 441; County Com'rs of Prince George's Co. V. Commissioners of Laurel, 51 Md. 457; Barker v. Bell, 46 Ala. 216. <2 Rutland v. Mendon, 18 Mass. (1 Pick.) 154; Pingree v. Snell, 42 Me. 53. CHAPTEH II. DEFINITIONS AND SPECIAL PROVISIONS RELATING TO BILLS, NOTES AND CHECKS. § 6. Promissory Notes. § 7. Bills of Exchange. § 8. (a) Inland Bills. (b) Foreign Bills. (c) Bills Drawn in Sets. § 9. Checks. § 10. General Definitions. Promissory Notes. § 6. A negotiable promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or de- terminable future time, a sum certain in money to order or to bearer. A "negotiable promissory note," as defined by the negotiable instruments laws, is "an unconditional promise made by one per- son to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money, to order or to bearer." ^ This definition embodies the elements of a negotiable instrument, as set forth in other sections.^ 1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., 2 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, Okl., Or., Pa., Tenn., Utah.'va., Wash., W. Va., Wyo. (§132); Ariz. (§3435); 111. (§131); Kan. (§139); Md. (§151); Mich. (§134); Neb. (§131); N. Y. (§200); Ohio (§3175-w); Okl. (119); R. I. (§140); Wis. (§1680-f). See, also, chapter IV. When bill may be treated as promissory note, see post, §67. 10 § 8 BILLS OF EXCHANGE. 11 Bills of Exchange. § 7. A bill of exchange is an unconditional order in writing ad- dressed by one person to another, signed by the person giving it, requiring the addressee to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. § 8. A bill of exchange may be either (a) An inland bill, or (b) A foreign bill, and (c) May be drawn in sets. The generally accepted form of a bill of exchange is embodied in the definition given in the negotiable instruments laws, viz.: "A bill of exchange is an unconditional order in writing, ad- dressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. "^ This definition is amply sustained by Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§184); Ariz. (§3487); 111. (§183); Kan. (§191); Md. (§203); Mich. (§186); Neb. (§183); N. Y. (§320); Ohio (§3177 v); R. I. (§192); Wis. (§1684). Edelman v. Rams, 58 Misc. 561, 109 N. Y. Supp. 816. Instrument within definition is negotiable though it contains the word "negotiable." Alex- ander & Co. V. Hazelrigg, 123 Ky. 677, 97 S. W. 353. When bill may be treated as promissory note, see post, §67. Judge Story's definition, "A promissory note is a written engagement by one person to pay another person therein named, absolutely and un- conditionally, a certain sum of money at a time specified therein," is quoted with approval in Cayuga County Nat. Bank v. Purdy, 56 Mich. 6, 22 N. W. 93, and Walker v. Thompson, 108 Mich. 686, 66 N. W. 584. See, also, cases cited in last mentioned case. 3 Neg. Insit. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. Tenn., Utah, Va., Wash., W. Va., Wyo. (§126); Ariz. (§3429); 111. (§125); Kan. (§ 12 DEFINITIONS AND SPECIAL PROVISIONS. § 8 the authorities,* and its different substantive elements, considered as essentials to negotiability, are discussed in a later chapter of this work.^ The terms "bill of exchange" and "draft" are in- terchangeable, but the latter term is used more generally to designate inland than foreign bills.^ Same — Several drawees. A bill of exchange "may be addressed to two or more drawees jointly, whether they are partners or not ; but not to two or more drawees in the alternative or in succession."''' This provision of the negotiable instruments laws seems to render a bill addresed to two or more drawees in the alternative or in succession not only non-negotiable but invalid. By another provision, instru- ments payable to the order of "one or some of several payees" are payable to order, and are negotiable.^ How the courts will 133); Md. (§145); Mich. (§128); Neb. (§125); N. Y. (§210); Ohio (§3175 q); R. I. (§134); Wis. (§1680). Cashier's check is a bill of exchange payable on demand. Singer Mfg. Co. V. Summers, 143 N. C. 102, 55 S. E. 522. Accepted sight draft, for the price of goods, with bill of lading attached, indorsed and negotiated by the payee, is governed by commercial law. Bank of Guntersville v. Jones Cotton Co. (Ala.) 46 So. 971. The word "or" before "determinable" was omitted in the law as first adopted in New York, but the omission was supplied by amendment. Laws 1898, c. 336, §25. 4 Kendall v. Galvin, 15 Me. 131, 32 Am. Dec. 141; Biesenthall v Williams, 62 Ky. (1 Duv.) 329, 85 Am. Dec. 629; Luff v. Pope, 5 Hill (N. Y.) 414; Newman v. Frost, 52 N. Y. 422; Henderson v. Pope, 39 Ga. 361; Rice v. Ragland, 29 Tenn. (10 Humph.) 545, S3 Am. Dec. 111. 5 See chapter IV. 6 Cole V. Dalton, 6 Daly (N. Y.) 484. 7 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§128); Ariz. (§3431); 111. (§127); Kan. (§135); Md. (§147); Mich. (§130); Neb. (§127); N. Y. (§212); Ohio (§3175 s;); R. I. (§136); Wis. (§1680 b). The words "or in succession" are not in the Wisconsin Negotiable Instruments Law. 8 See, also, post, §50, subd. 6, and notes. § 8 INLAND AND FOREIGN BILLS. 13 harmonize these apparently inconsistent provisions remains to be seen. Same — Inland and foreign bills. An inland bill is one which is, or on its face purports to be, both drawn and payable within the same state, and any other is a foreign bill.^ Thus, a bill drawn by one resident of a state upon another resident of the same state is an inland bill,^° and so is one drawn in one city of a state and payable in another city of the same state.^^ But a bill drawn in one state by a resident thereof, on a resident of another state, or country, and payable in the latter state, is a foreign bill.^- It will thus be seen that, in determining whether a bill is in- land or foreign, the various states of the Union are considered as foreign to each other. Neg. Inst. Laws Colo., Conn., D. C, F!a., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§8); Ariz. (§3311); 111. (§8); Kan. (§15); Md. (§27); Mich. (§10); Neb. (§8); N. Y. (§27); Ohio (§3171 a); R. I. (§16); Wis. (§1675-8). 9 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§129); Ariz. (§3432); 111. (§128); Kan. (§136); Md. (§ 148); Mich. (§ 131); Neb. (§ 128); N. Y. (§ 213); Ohio (§ 3175 t); R. I. (§137); Wis. (§1680-e). Bank of Laddonia v. Bright-Coy Commission Co. (Mo. App.) 120 S. W. 648. Damages allowable on protested foreign bill, see post, §211. 10 Kaskaskia Bridge Co. v. Shannon, 6 111. (1 Gilm.) 15. "Young V. Bennett, 70 Ky. (7 Bush) 474. 12 Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696, 28 Law. Ed. 866; Buckner v. Finley, 27 U. S. (2 Pet.) 586, 7 Law. Ed. 528; Joseph v. Salomon, 19 Fla. 623; Ticonic Bank v. Stackpole, 41 Me. 302; Commercial Bank of Kentucky v. Varnum, 49 N. Y. 269; Phoenix Bank v. Hussey, 29 Mass. (12 Pick.) 483; Ocean Nat. Bank v. Williams, 102 Mass. 141; Aborn v. Bosworth, 1 R. I. 401; Gardner v. Bank of Tennessee, 31 Tenn. (1 Swan) 420; Brown v. Ferguson, 4 Leigh (Va.) 37, 39, 24 Am. Dec. 707; Amsinck v. Rogers, 189 N. Y. 252, 82 N. E. 134, 121 Am. St. Rep. 858. 14 DEFINITIONS AND SPECIAL PROVISIONS. §9 Same — Bills in sets. It is customary to draw a foreign bill of exchange in a set of two or three, usually three. One of the set recites that it is the "first of exchange," and orders payment to be made if the "sec- ond and third (are) unpaid," another that it is the "second of exchange, first and third unpaid," and the third that it is the "third of exchange, first and second unpaid," ^^ If each part is thus numbered, and refers to the other parts, all the parts constitute one bilL^* Checks. § 9, A check is a bill of exchange drawn on a bank and payable on demand. The main distinguishing features of a check are that it is drawn on a bank and is payable on demand.^^ A check payable 13 Where eight blank acceptances, four of which were designated "First of exchange (second unpaid)," and four "second of exchange (first un- paid)," were sent to a correspondent, who filled the blanks, and nego- tiated them as separate bills, a purchaser of one of the bills was not charged with notice that it was one of a set by the presence of the words "Second of exchange, first unpaid," and the acceptor was liable. Bank of Pittsburg V. Neal. 63 U. S. (22 How.) 96, 16 Law. Ed. 323. Payment of bills drawn in sets, see post, §252. 14 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Qkl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§178); Ariz. (§3481); 111. (§177); Kan. (§185); Md. (§197); Mich. (§180); Neb. (§177); N. Y. ( 310); Ohio (§3177 o); R. I. (§186); Wis. (§1631-35). Durkin v. Cranston, 7 Johns. (N. Y.) 442; Miller v. Hacklej^ 5 Johns. (N. Y.) 375, 4 Am. Dec. 372. Making a check in duplicate, see post, § 9. 15 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 185) ; Ariz. (§ 3487) ; III. (§ 184); Kan. (§ 192); Md. (§ 204); Mich. (§ 181); Neb. (§ 184); N. Y. (§ 321) ; Ohio (§ 3177V) ; Okl. (§ 185) ; R. L (§ 193) ; Wis. (§ 1684-1). Cossel V. Regierer, 114 N. Y. Supp. 601; Blake v. Hamilton Dime Sav. Bank Co., 79 Ohio St. 189, 87 N. E. 73, 20 L. R. A. (N. S.) 290. § 9 CHECKS. 15 at a designated future time, or at a certain period after date, is a bill of exchange. The decisions on this point generally involve the question of right to days of grace. Though such days have been abolished by most of the negotiable instruments laws,^^ it is clear that an instrument payable otherwise than on demand is not properly a "check," within the meaning of the definition of such instrument in these laws.^^ Checks are defined by them as bills of exchange drawn on a bank and paj'able on demand, and the provisions relating to such bills are, with certain exceptions, made applicable to checks.^^ A check may be made in duplicate, Bill drawn on business house is not a check. Amsinck v. Rogers, 189 N. Y. 252, 82 N. E. 134, 121 Am. St. Rep. 858. Checks are negotiable instruments. Boswell v. Citizens' Sav. Bank, 123 Ky. 485, 29 Ky. Law Rep. 988, 96 S. W. 797; Morrison v. Bailey, 5 Ohio St. 13, 64 Am. Dec. 632. It is essential to a check that it be payable on demand. Harrison v. Nicollet Nat. Bank, 41 Minn. 488, 43 N. W. 336, 16 Am. St. Rep. 718, 5 L. R. A. 746. 16 Georgia Nat. Bank v. Henderson, 46 Ga. 487, 12 Am. Rep. 590; Mer- chants' Bank V. Woodruff, 6 Hill (N. Y.) 174; Hawley v. Jette, 10 Or. 31, 45 Am. Rep. 129; Brown v. Lusk, 12 Tenn. (4 Yerg.) 210; Harrison v. Nicollet Nat. Bank, 41 Minn. 488, 43 N. W. 336, 16 Am. St. Rep. 718, 5 L. R. A. 746. Contra, see Way v. Towle, 155 Mass. 374, 29 N. E. 506; Andrew v. Blachly, 11 Ohio St. 89; Westminster Bank v. Wheaton, 4 R. I. 30. 1" Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§85); Ariz. (§3388); Neb., 111. (§85); Kan. (§92); Md. (§104); Mich. (§87); Neb. (§85); N. Y. (§145); Ohio (§3174c); R. I. (§93); Wis. (§§1678-15). 18 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, low^a, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah., Va., Wash., W. Va., Wyo. (§185); Ariz. (§3487); 111. (§184); Kan. (§192); Md. (§204); Mich. (§187); Neb. (§184); N. Y. (§321); Ohio (§3177-v); R. L (§193); Wis. (§1684-1). Wedge Mines Co. v. Denver Nat. Bank, 19 Colo. App. 182, 11 Pac. 873; Cassel v. Regierer, 114 N. Y. Supp. 601. This is declaratory of the law in some of the states. Laird v. State, 61 Md. 309; Henshaw v. Root, 60 Ind. 220; Planters' Bank v. Merritt, 54 Tenn. (7 Heisk.) 177; Purscll v. Alle- mong, 22 Grat. (Va.) 739. See, also, Rogers v. Durant, 140 U. S. 298, 35 Law. Ed. 482. 16 DEFINITIONS AND SPECIAL PROVISIONS. § 10 like a foreign bill of exchange/^ but is not a foreign bill, though drawn by a bank in one state on a bank in another state.^" § 10. General definitions. The negotiable instruments laws provide that in construing the various provisions of the act the following words shall be deemed to have the defined meaning, unless the context of the act other- wise requires.^^ "Acceptance" means an acceptance completed by delivery or notification, "Action" includes counterclaim and set-off. "Bank" includes any person or association of persons carry- ing on the business of banking, whether incorporated or not. "Bearer" means the person in possession of a bill or note which is payable to bearer. "Bill" means bill of exchange, and "note" means negotiable promissory note. "Delivery" means transfer of possession, actual or construc- tive, from one person to another. "Holder" means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof. "Indorsement" means an indorsement completed by delivery. "Instrument" means negotiable instrument. "Issue" means the first delivery of the instrument, complete in form, to a person who takes it as a holder. "Person" includes a body of persons, whether incorporated or not. "Value" means valuable consideration. "Written" includes printed, and "writing" includes print. 19 Merchants' Nat. Bank v. Ritzniger, 118 111. 484, 8 N. E. 834. 20 Merchants' Nat. Bank v. Ritzniger, 118 111. 484, 8 N. E. 834. 21 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W, Va., Wyo. (§191); Ariz., (§3487); 111. (§190); Kan. (§2); Md. (§14); Mich. (§2); Neb. (§189); N. H. (§190); N. Y. (§2); Ohio (§3178); Okl. (art. 1); R. I. (§2); Wis. (§1675). CHAPTER m. EXECUTION AND DELIVERY. § 11. Freedom of Consent. § 12. Necessity of Writing. § 13. Place and Time of Execution. § 14. Presumption of Date. § 15. Insertion of Date. § 16. Date Given Presumed Correct. § 17. Exception. — Bona Fide Holders. § 18. Antedating and Postdating. § 19. Incomplete Instruments. § 20. Completion Must be as Authorized. Exception. — Bona Fide Holders. § 21. Signature — Necessity and Position. § 22. Form. § 23. Signature by Agent. § 24. Liability of Agent. § 25. Descriptive Words. § 26. Signature by "Procuration." § 27. Delivery — Necessity. § 28. Sufficiency of Delivery. Conditional Delivery. § 29. Presumptions. Freedom of Consent. § 11. Like other contracts, the execution of a negotiable instru- ment must be unattended by fraud, duress, incapacity, or other vitiating elements. Every negotiable instrument is a contract and as such its ex- 17 Opp.— Sel.— 2 18 EXECUTION AND DELIVERY. § 12 eeution must be unattended by fraud,^ duress,^ or incapacity on the part of the maker, drawer, indorser, or other person assum- ing liabilities pn the instrument.^ The general rules of contracts govern this phase of a negotiable instrument.^ Necessity of Writing. § 12. The instrument must be in writing. A negotiable instrument must, of course, be in writing.^ While it is not safe to write a bill or note in pencil because of the danger of erasures and alterations, one written in pencil is valid and negotiable,^ at least so long as it is legible^ It is not necessary, however, that the instrument be written out in either ink or pen- cil, for printed forms of bills and notes have come into such com- mon use that the negotiable instruments laws have recognized the custom by providing that ''writing" shall include print.^ 1 One who signs a note cannot set up a defense that he did not read the fine print on its face. Bank of Morgan City v. Herwig, 121 La. 513, 46 So. 611. 2Rueping Leather Co. v. Watke, 135 Wis. 616, 116 N. W. 174. 3 Bade v. Feay, 63 W. Va. 166, 61 S. E. 348. * There being no necessity for it, the negotiable instruments act makes no general provision as to fraud, etc. General works should be con- sulted. 5 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§1); Ariz. (§3304); 111. (§1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1). 6 Reed v. Roark, 14 Tex. 329, 65 Am. Dec. 127. An indorsement may be written in pencil. Brown v. Butchers' & Drovers' Bank, 6 Hill (N. Y.) 443, 41 Am. Dec. 755; Closson v. Stearns, 4 Vt. 11, 23 Am. Dec. 245. 7 Reed v. Roark, 14 Tex. 329, 65 Am. Dec. 127. 8 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. J.. N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§191); Ariz. (§3487); 111. (§190); Kan. (§2); § 14: PLACE AND TIME OE EXECUTION. 19 Place and Time of Execution. § 13. A negotiable instrument need not specify the place where it is drawn nor its date. In accordance with the common law the negotiable instruments act provides that the validity and negotiable character of an in- strument are not affected by its failure to specify the place where it is drawn.^ Neither at common law/" nor under the negotiable instruments law,^^ is dating the bill or note essential to its valid- ity. This refers merely to the form of the instrument and not to the materiality of the true date.^^ § 14. Not being dated, the instrument will be considered dated as of the time it was issued. If the instrument is not dated, it will be considered to be Md. (§14); Mich. (§2); Neb. (§189); N. H. (§190); N. Y. (§2); Ohio (§3178); Okl. (art. 1); R. I. (§2); Wis. (§1675). See, also, Farmers' Bank of Kentucky v. Ewing, 78 Ky. 2<A, 39 Am. Rep. 231; Zimmerman v. Rote, 75 Pa. 188. 9 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§6); Ariz. (§3309); '11. (§6); Kan. (§13); Md. (§25); Mich. (§8); Neb. (§6); N. Y. (§25), Ohio (§3171e); R. L (§14); Wis. (§1675-6). 10 Michigan Ins. Co. v. Estate of Leavenworth, 30 Vt. TI; Sparran v. Neeley, 91 Pa. 17; Archer v. Claflin, 31 111. 306; Husbrook v. Wilder, 1 Pin. (Wis.) 645. A defective date, consisting merely of the fiarures "1887," does not invalidate an order. Weld v. Eliot Five Cent Sav. Bank, 158 Mass. 339, 33 N. E. 519. 11 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., T^'jin., Utah, Va., Wash., W. Va., Wyo. (§6); Ariz. (§3309); 111. (§6); Kan. (§13); Md. (§25); Mich. (§8); Neb. (§6); N. Y. (§25); Ohio (§3171e); R. I. (§14); Wis. (§1675-6). Error to dismiss complaint on note for failure to give date of latter; motion to make pleading more definite might lie. Church v. Stevens, 56 Misc. 572, 107 N. Y Supp. 310. 12 See post, insertion of date, §17; alteration of instruments, §246. 20 EXECUTION AND DELIVERY. § 15 dated as of the time when it was issued,^^ that is, as of the time when it is first delivered, complete in form, to a person who takes it as a holder,^* Insertion of Date. § 15. Being undated and payable at a fixed period after date, any holder may insert the true date and the instrument is payable accordingly. Any holder of an instrument payable at a fixed period after date, but not dated, may insert therein the true date of its issu- anee.^5 This section should be construed in connection with the provision providing that an incomplete instrument must be filled up strictly in accordance with the authority given in order that 13 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§17); Ariz. (§3320); 111. (§17); Kan. (§24); Md. (§36); Mich. (§19); Neb. (§17); N. Y. (§36); Ohio (§3171P); R. L (§25); Wis. (§1675-17). 1* Ncg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. J., N. M., N. C, N. D., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§191); Ariz. (§3487); 111. (§190); Kan. (§2); Md. (§14); Mich. (§2); Neb. (§189); N. H. (§190); N. Y. (§2); Ohio (§3178); Okl. (art. 1); R. I. (§2); Wis. (§1765). 15 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§13); Ariz. (§3316); 111. (§13); Kan. (§20); Md. (§32); Mich. (§15); Neb. (§13); N. Y. (§32); Ohio (§3171L); R. I. (§21); Wis. (§1675-13). The payee of a note delivered with the place for the date left blank has no implied authority to antedate the instrument. Goodman v. Simonds, 19 Mo. 106; Emmons v. Meeker, 55 Ind. 321. Where the month is given, the holder may fill the blank for the day of the month with any date within the month. Page v. Morrell, 3 Keyes (N. Y.) 117, 3 App. Dec. 433. For authority to insert date on accommodation paper, see Androscoggin Bank v. Kimball, 64 Mass. (10 Cush.) 373; Mitche'.l v. Culver, 7 Cow. (N. Y.) 336. Authority to fill blanks, see post, §§19, 20, Inserting date of acceptance, see post, chapter VIII, §§§ 99, 100. § 17 PRESUMPTIONS AS TO DATE. 21 it may be enforced against any person who became a party to it prior to its completion/^ and, as so construed, apparently does not abrogate the common-law rule that an insertion of the wrong date is a material alteration avoiding the instrument as between the parties.^^ Presumptions. § 16. The instrument being dated, the date given is prima facie the true date. § 17. Exception. — The presumption is conclusive as against a subsequent holder in due course. "Where the instrument is dated, the date given is prima facie the true date of the making or drawing of the instrument,^^ and the burden of proof to show a mistake in the date of a note in suit is on the def endant.^^ As stated, this presumption is not conclusive, 16 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Monit, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§14); Ariz. (§3317); 111. (§14); Kan. (§21); Md. (§33); Mich. (§16); Neb. (§14); N. Y. (§33); Ohio (§3171m); R. I. (§22); Wis. (§1675-14). i^If a date prior to the delivery of the instrument is inserted in a note payable two years for date, it avoids the note. English v. Benemaii, 5 Pike (Ark.) 377. See, also, post, chapter XV, §246, holding change of date a material alteration. iSNeg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§11); Ariz. (§3314); 111. (§11); Kan. (§18); Md. (§30); Mich. (§13); Neb. (§11); N. Y. (§30); Ohio (§3171j); R. I. (§19); Wis. (§1675-11). See, also, Bayley v. Taber, 6 Mass. 451; Cowing v. Altman, 71 N. Y. 435, 27 Am. Rep. 70; Kinsely v. Sampson, 100 111. 573. i9Towles V. Williams, 2 Rich. Law (S.C.) 562. Thus, where a statute made certain notes void if issued after a certain day, nq,tes dated before that day are presumed to have been issued before that time, and the burden is on the defendant to show otherwise. Bayley v. Taber, 6 Mass. 451, 22 EXECUTION AND DELIVERY. § 17 and may be rebutted by parol or extrinsic evidence showing that the date given is not the true date,^° on the theory that the date is only descriptive,^^ but the mistake, to be available, should be pleaded.22 Exception; bona fide holders. Ordinarily, the true date must be inserted,^^ but the insertion of a vi^rong date does not avoid the instrument in the hands of a subsequent holder in due course, but as to him the date so inserted will be regarded as the true date.-* By rendering this presump- tion conclusive without qualification, or, in other words, by con- clusively presuming prejudice in the case of a bona fide holder, the negotiable instruments act has apparently changed and strengthened the common-law rule allowing the mistake to be corrected, except as to an innocent indorsee or purchaser who would be prejudiced by the correction.^s 20 Bank of Cumberland v. Mayberry, 43 Me. 198. Parol evidence is admissible to show a mistake in date as between the original parties. Biggs V. Piper, 86 Tenn. 589, 8 S. W. 851; Drake v. Rogers, 32 Me. 524; Barlow v. Buckingham, 68 Iowa, 169, 26 N. W. 58. See, also. Cowing v. Altman, 71 N. Y. 435, 27 Am. Rep. 70. Parol evidence is admissible also when the date is ambiguous or illegible. Fenderson v. Owen, 54 Me. 'i12, 92 Am. Dec. 551. In an action by a bank on a note in the hand- writing of the bank's cashier, it may be shown that he was not in the employ of the bank until after the date of the note. Hauerwas v. Goodloe, 101 Ala. 162, 13 So. 567. A note dated "1888" may be shown to have been executed in 1882. Barlow v. Buckingham, 68 Iowa, 169, 26 N. W. 58. 21 Dean v. DeLezardi, 2 Cushm. (Miss.) 424. 22Almich V. Downey, 45 Minn. 460, 48 N. W. 197. 23 Miles V. Major, 25 Ky. (2 J. J. Marsh) 153. 2* Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., N. H., N. J., N. M., N. C, N. D. Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§13); Ariz. (§3316); 111. (§13); Kan. (§20); Md. (§32); Mich. (§15); Neb. (§13); N. Y. (§32); Ohio (§3171L); R. I. (§21); Wis. (§1675-13). 25Almich V. Downey. 45 Minn. 460, 48 N. W. 197. §1D INCOMPLETE INSTRUMENTS. 23 Antedating and Postdating. § 18. Antedating or postdating an instrument does not affect its validity unless done lor an illegal or fraudulent purpose. The instrument is not invalid for the reason only that it is antedated or postdated, provided this is not for an illegal or fraudulent purpose.^^ An antedated or postdated instrument may, of course, be negotiated after or before the date given,^^ and any one to whom such an instrument is delivered acquires title thereto as of the date of delivery .^^ One prejudiced by the antedating or postdating may show the actual time of delivery, and the instru- ment will be given effect from that time.^^ An instrument ante- dated to evade the law is invalid^*^ as to all persons having notice.^^ Incomplete Instruments. § 19. A person in possession, after delivery, of an incomplete instrument, has prima facie authority to complete it: (a) By filling up blanks therein if it is wanting in any material particular; (b) By filling up a paper signed in blank with the in- tent that it should be converted into a negotiable instrument. 26 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§12); Ariz. (§3315); 111. (§12); Kan. (§19); Md. (§31); Mich. (§14); Neb. (§12); N. Y. (§31); Ohio (§3171K); R. I. (§20); Wis. (§1675-12). Brewster v. McCardel, 8 Wend. (N. Y.) 478; Gray v. Wood, 2 Har. & J. (Md.) 328; Ohio Life Ins. & Trust Co. v. Winn, 4 Md. Ch. 253; Richter v. Selin, 8 Serg. & R. (Pa.) 425. 27 Brewster v. McCardle, 8 Wend. (N. Y.) 478; Pasmore v. North, 13 East, 517. 28 Same sections of negotiable instruments laws as last above cited. 29 Baldwin v. Freydendall, 10 111. App. (10 Bradw.) 106. 30 Williams' Ex'rs v. Williams, 15 N. J. Law, 255, where an attempt was made to evade the usury laws; Bayley v. Taber, 5 ]\Iass. 286, 4 Am. Dsc. 57, where a note was antedated to avoid a statute prohibiting the issuance of such notes after a certain date. 31 Serle v. Norton, 9 Mees & W. 309. 24 EXECUTION AND DELIVERY. § 19 The implied authority to complete an incomplete instrument is conditional upon there having been a previous, valid delivery of the instrument ; for where an incomplete instrument has not been delivered it will not, if completed and negotiated, without author- ity, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery.^^ Filling blanks. Prima facie authority is conferred on the person in possession of a negotiable instrument, to fill up the blanks therein if the in- strument is wanting in any material particular.^^ While the authority is not limited to the filling of such blanks as are necessary to complete the instrument,^* still the authority must be exercised according to the intended purpose and use of the instrument,^^ and depends upon the real authority which the signer in fact gave in the matter,^^ and it follows that the prima facie authority by the act may be met and overcome by evidence of what authority was in fact given.^'? In applying these rules it 32 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§15); Ariz. (§3318), 111. (§15); Kan. (§22); Md. (§34); Mich. (§17); Ariz. (§15); N. Y. (§34); Ohio (§3171n); R. I. a23); Wis. (§1675-15). Massachusetts National Bank v. Snow, 187 Mass. 159, 72 N. E. 959. 33 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa Ky., La,, Mass., Mo., Mont, Nev., N. H., N. J.. N. M., N. C. N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§14); Ariz. (§3317); 111. (§14); Kan. (§21); Md. (§33); Mich. (§16); Ariz. (§14); N. Y. (^33); Ohio (§3171m); R. I. (§22); Wis. (§1675-14). Authority is merely prima facie. Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. 34 Johnston v. Hoover, 139 Iowa, 143, 117 N. W. 277. "Material" is not synonymous with "necessary" so as to restrict the right to fill in an omission essential to the completion of the instrument, but includes all omitted matter usually found in such instruments. Id. 35 First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. Does not authorize erasure of written or printed part and insertion of something else, though when signed instrument is a mere skeleton of a note. Id. 36 Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 64o, 97 Am. St. Rep. 426. 37 Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. § 19 FILLING BLANKS. 25 has been held that the holder of a negotiable instrument may in- sert his own name in a blank space left for the name of the payee,^ and may fill a blank left for the time,^^ or the place*" of payment, or for the amount payable.*^ Paper signed in blank. Where a blank paper is signed and delivered by the signer with intent that it shall be converted into a negotiable instrument, a holder has prima facie authority to fill it up as such for any amount.*^ 38 Boyd V. McCann, 10 Md. 118; Thompson v. Rathbun, 18 Or. 202, 22 Pac. 837. So of a note entirely blank. See Mitchell v. Culver, 7 Cow. (N. Y.) 336. At common law, where the maker of a check did not designate a payee, unless it was issued by him, no one else had authority to complete the instrument by writing in the name of a payee. Reed v. Mattapan Deposit & Trust Co., 198 Mass. 306, 84 N. E. 469. 39 McGrath v. Clark, 56 N. Y. 34, 15 Am. Rep. 372; Johns v. Harrison, 20 Ind. 317. 40Redlich v. Doll, 54 N. Y. 234, 13 Am. Rep. 573; Winter v. Pool, 104 Ala. 580, 16 So. 543. 4iAs to authority to add interest clause or fill up blanks left for interest clause, see Hcopes v. Collingwood, 10 Colo. 107, 13 Pac. 909, 3 Am. St. Rep. 565; First Nat. Bank v. Carson, 60 Mich. 432, 27 N. W. 657; McGrath v. Clark, 56 N. Y. 34, 15 Am. Rep. 372; Farmers' Nat. Bank v. Thomas, 79 Hun, 595, 29 N. Y. Supp. 837; Weyerhauser v. Dun, 100 N. Y. 150, 2 N. E. 274. *2Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§14); Ariz. (§3317); Ill.(§14); Kan. (§21); Md. (§33); Mich. (§16); Ariz. (§14); N. Y. (§33); Ohio (§3171m); R. I. (§22); Wis. (§1675-14). In the Wisconsin negotiable instruments law the words "prima facie" are left out, and the statute reads: "A signature on a blank paper de- livered by the person making the signature, in order that the paper may be converted into a negotiable instrument, operates 'as an authority' to fill it up as such for any amount." In the negotiable instruments law as first adopted in New York, the words "prima facie" were printed in italics, but this was changed by amendments, doubtless on the theory that, by the use of italics, such words were unduly emphasized. Laws 1898, c. 336, § 4. A check properly signed and complete on its face is presumed to have been complete when delivered. Hensel v. Chicago, St. P., M. & O. R. Co., 57 Minn. 88, 47 Am. St. Rep. 576. 26 EXECUTION AND DELIVERY. § 20 § 20. In order, however, that any such instrument when com- pleted may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. Exception. — As to a holder in due course to whom it is negotiated after completion. Authority to fill in blanks may be either express or such as the law implies from the possession of an incomplete instrument, Tu either case the exercise of the authority must be in strict accord- ance with the authority given*^ and must be exercised witliin a reasonable time** in order to render it enforcible against one who became a party to the paper before its completion. In determin- ing what is a "reasonable time" or an "unreasonable time" re- gard is to be had to the nature of the instrument, the usage of trade or business, if any, with respect to the instrument, and the facts of the particular case.f^ Implied authority to fill in blanks goes no further than authorizing the insertion of that which is necessary to make the obligation speak according to its intended 43 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§14); Ariz. (§3317); 111. (§14); Kan. (§21); Md. (§33); Mich. (§16); Neb. (§14); N. Y. (§33); Ohio (§3l71m); R. I. (§22); Wis. (§1675-14). Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. Authority to fill a blank left for the amount in a draft which is limited to a fixed sum does not authorize the insertion of a larger amount on payment of an additional consideration. Clower v. Wynn, 59 Ga. 246. 4* Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§14); Ariz. (§3317); 111. (§14); Kan. (§21); Md. (§33); Mich. (§16); Neb. (§14); N. Y. (§33); Ohio (§3171m); R. I. (§22); Wis. (§1675-14). 45Xeg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§193); Ariz. (§3489); 111. (§192); Kan. (§4); Md. (§16); Mich. (§2); Neb. (§191); N. Y. (§4); Ohio (§3178b); R. L (§4); Wis. (§1675). § 20 FILLING BLANKS. 27 purpose and use,^^ and in no case does it authorize a material alteration in the original terms of the paper.*'' The authority should be construed in the light of the purpose of the instru- ment*^ and with reference to other parts of it.*^ Holders in due course. If, however, after completion, such instrument is negotiated to a holder in due course, it is valid and effectual for all pur- poses in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time.^" *6 First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. *7 First Nat. Bank v. Gridley, 112 App. Div. 398, 98 N. Y. Supp. 445; First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. Does not authorize erasure of written or printed part and insertion of something else, though when signed instrument is a mere skeleton of a note. First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. Where one indorsed printed form of note in which the date, amount, and time of payment were all blank, held the maker was not authorized to change place of payment as printed on form. Id. 48 Authority given by a surety, on signing a note, and delivering it to the principal, to fill up a blank left for the amount with the amount of the debt, empowers the creditor to fill the blank with the true amount of the debt, regardless of the representations of the principal to the surety as to the amount. Eichelberger v. Old Nat. Bank, 103 Ind. 401. 3 N. E. 127. *5>If there is an indication on the instrument of the am.ount-for which it is to be made payable, as where the intended amount is expressed in figures on the margin, such figures limit the amount to be inserted in the blank in the body of the instrument. Hall v. Bank of the Common- wealth. .33 Ky. (3 Dana) 258. 5" Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tcnn., Utah, Va., W^ash., W. Va.. Wyo. (§ 14); Ariz. (§ 3317); III. (§ 14); Kan. (§ 21); Md. (§ 33); Mich. (§ 16); Neb. (§ 14); N. Y. (§ 33); Ohio (§ 3171m); R. L (§ 22); Wis. (§ 1675-14). Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. See post, chapter XI, § 170. 28 EXECUTION AND DELIVERY. § 21 Signature — Necessity and Position. § 21. An instrument to be negotiable must be signed by the maker or drawer, but the position of the signature is im- material if it is clear that it was placed on the paper in the capacity of maker or drawer. A negotiable instrument must be signed by the maker or drawer.^i As the act, however, merely requires that the instru- ment be "signed," the position of the signature is immaterial, it being sufficient if it appears in any part of the instrument.^^ How- ever, as a corollary to the provision that where the signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is now deemed an indorser,^^ the position of the signature must be such as to clearly indicate that it was placed upon the paper in the capacity of maker or drawer.^* "This provision, by its very terms, applies only to a case of doubt arising out of the location of the signature upon the instrument. Names are sometimes placed at the side, on the end, or across the face of the instrument, and thus a doubt arises as to whether the signer intended to be bound as a maker or an indorser, or perhaps as a guarantor, and to solve these doubts the section in question was evidently framed. It was to 51 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., \. C, N. D., Okl.. Or., Pa., Tenn., Utah, Va.. Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); MJ. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y, ($ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1). See, also, May v. Miller, 27 Ala. 515. 62 Lincoln v. Hinzey, 51 111. 435. 53 See post, chapter XII, §154. 5* Taylor v. Dobbins, 1 Strange, 399; Quin v. Sterne, 26 Ga. 223. 71 Am. Dec. 204; Lincoln v. Hinzey, 51 111. 435; Lampkin v. State, 105 Ala. 1, 16 So. 575. Applying this rule, an acommodation party signing note on its face before delivery has been held a comaker, though word "surety" was prefixed t'O his name. Edmonston v. Ascough, 43 Colo. 55, 95 Pac. 313. § 22 SIGNATURE. 2§ settle a doubt fairly arising from the ambiguous location of the name, and applies to no other, "^^ and hence does not apply where the doubt is as to whether the party intended to sign in an individual or in a representative capacity as maker,^^ and this holds true though the paper is in the hands of a bona fide holder." The ambiguity being as to whether one, signing as a maker, in- tended to do so in a representative or individual capacity, the doubt may be removed by parol and extrinsic evidonce.^^ Same — Form. § 22. No particular form is necessary and one signing in a trade or assumed name will be liable to the same extent as if he signed his own name. It is much the safer practice for the maker or drawer to sign his name in full, but a signature by means of initials,^^ or by an abbreviation of the name of the maker,^*^ by the use of figures,*^^ or by a mark, is sufficient, if intended as a signature.^^ Q^g sign- 55 Germania Nat. Bank v. Mariner, 129 Wis. 544, 109 N. W. 574. 56 Where a note read: "Four months after date the N. W. S. W. promise to pay," and was signed "The N. W. S. W., E. R. S. Treas. J. W. M.," held J. W. M.'s liability was that of maker, the doubt being as to whether he acted as a representative or as an individual, and hence the statute did not apply. Germania Nat. Bank v. Mariner, 129 Wis. 544, 109 N. W. 574. 57Germania Nat. Bank v. Mariner, 129 Wis. 544, 109 N. W. 574. 58 Germania Nat. Bank v. Mariner, 129 Wis. 544, 109 N. W. 574. 69 Palmer v. Stephens, 1 Denio (N. Y.) 471. 60 See Kemp v. McCormick, 1 Mont. 420. 61 Brown v. Butcher's & Drovers' Bank, 6 Hill (N. Y.) 433, 41 Am. Dec. 755. 62 Gervais v. Baird, 2 Brev. (S. C.) 37; Willoughby v. Moulton, 47 N. H. 205; Shank v. Butsch, 28 Ind. 19; Handyside v. Cameron, 21 111. 588, 74 Am. Dec. 119; Hilborn v. Alford, 22 Gal. 482; McGowan v. Collins (Ala.) 46 So. 228; Jackson v. Tribble (Ala.) 47 So. 319. so EXECUTION AND DELIVERY. § 23 ing in a trade or assumed name is liable to the same extent as if he had signed in his own name.^^ Signature by Agent. § 23. The signature of any party may be made by a duly author- ized agent. No particular form of appointment is neces- sary for this purpose ; and the authority of the agent may be established as in other cases of agency. But to be liable on the instrument the principal should be disclosed. The signature of any party to a negotiable instrument may be made by a duly authorized agent.^* To be binding upon the prin- cipal the execution of the instrument must be within the apparent scope of the agent's authority .^^ No particular form of appoint- ment is necessary, and the authority of the agent may be estab- lished as in other cases of agency.^® 63 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. Tenn, Utah, Va., Wash., W. Va., Wyo. (§ 18); Ariz. (§ 3321); 111. (§ 18); Kan. (§ 25); Md. (§ 2,7); Mich. (§ 20); Neb. (§ 18); N. Y. (§ Z7); Ohio (§ 3171q); R. I. (§ 26); Wis. (§ 1675-18). Jewett V. Whalen, 11 Wis. 124, 129. 6* Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§19); Ariz. (§3322); 111. (§ 19); Kan. (§ 26); Md. (§ 38); Mich. (§ 21); Neb. (§ 19); N. Y. (§ 38); Ohio (§ 3171 R); R. I. (§ 27); Wis. (§ 1675-19). 65 One taking a note signed in partnership name, knowing it to have been signed by one of the partners outside the scope of his agency and the partnership business, cannot recover against the partnership or non- signing partners. King v. Mecklenburg, 43 Colo. 316, 95 Pac. 951. 66 Same sections negotiable instruments laws last above cited. See Conroe v. Case, 74 Wis. 85, 41 N. W. 1064. As to ratification of un- authorized signature, see Bartlett v. Tucker, 104 Mass. 336, 6 Am. Rep. 240; Howard v. Duncan, 3 Lans. (N. Y.) 174; Paul v. Berry, 78 111. 158; First Nat. Bank v. Badger Lumber Co., 54 Mo. App. 327; Bell v. Waudby, 4 Wash. 743; Ballston Spa Bank v. Marine Bank, 16 Wis. 120. § 24 SIGNATURE BY AGENT. 31 Undisclosed principal. In accordance with the rule that persons dealing with negotiable instruments are presumed to take them on the credit of the parties whose names appear upon them and that a person not a party cannot be charged upon proof that the ostensible party- signed or indorsed as his agent,^'^ the negotiable instruments act has provided that no person is liable on an instrument whose signature does not appear thereon.^^ Liability op Agent. § 24. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized. Where the instrument shows either in the body thereof, or by means of words added after the signature, that it was signed for or on behalf of a principal, or in a representative capacity, the signer is not personally liable if he was duly authorized.^^ The undoubted effect of this section is to render one signing for or on behalf of a principal, or in a representative capacity, person- ally liable on the instrument if he acts without authority,'^*^ and 67 Briggs V. Partridge, 64 N. Y. 363, 21 Am. Rep. 617. 68 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 18); Ariz. (§ 3321); 111. (§ 18); Kan. (§ 25); Md. (§ 37); Mich. (§ 20); Neb. (§ 18); N. Y. (§ 37); Ohio (§ 3l71q); R. I. (§ 26); Wis. (§ 1675-18). Brown v. Parker, 89 Mass. (7 Allen) 337; Bolles v. Walton, 2 E. D. Smith (N. Y.) 164; Pentz v. Stanton, 10 Wend. (N. Y.) 271, 25 Am. Dec. 558. Firm on whom a draft is drawn by one of its commercial travelers is not liable thereon until acceptance. Seattle Shoe Co. v. Packard, 43 Wash. 527, 86 Pac. 845, 117 Am. St. Rep. 1064. 69 Neg. Inst. Laws. Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 20); Ariz. (§ 3323); 111. (§ 20); Kan. (§ 27); Md. (§ 39); Mich. (§ 22); Neb. (§ 20); N. Y. (§ 39); Ohio (§ 3171s); R. I. (§ 28); Wis. (§ 1675-20). 70 Frankland v. Johnson, 147 111. 520, 35 N. E. 480, 37 Am. St. Rep. 234. Where the instrument recites a promise by the principal to pay, and is 32 EXECUTION AND DELIVERY. § 25 thus changes the law as it generally existed in this country prior to the enactment of the statute.'''^ Under the law as it previously existed, the only cause of action against one acting as an agent without authority was for damages upon an implied warranty of authority, and this cause of action, not being upon the instrument, did not pass with the transfer of the latter unless specifically as- signed. This provision of the statute would seem to render any such assignment unnecessary and to allow any holder of the in- strument to sue the agent upon it. § 25. But the mere addition of words describing him as an agent, or as filling a representative character, without dis- closing his principal, does not exempt him from personal liability. The mere addition of words describing the signer as an agent, or as acting in a representative capacity, without disclosing his principal, will not relieve the signer from personal liability'^^ ^g signed by one as agent, proof that the ostensible agent had no authority to sign will render him personally liable. Id. Where the note recited that the "Western Seaman's Friend Society agrees to pay," and was signed "B. Frankland, Gen. Supt.," the signer was held to a personal liability, it appearing that he had no authority to bind the society, and that it was the intention of the parties that he be personally liable. In the original draft submitted to the conference of commissioners on uni- formity of laws, the portion of the section under consideration reads as follows: "Where a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument." This is the rule under the English act and under the decisions of some states prior to the adoption of the Negotiable Instruments Act. Miller v. Reynolds, 92 Hun, 400, 36 N. Y. Supp. 660. The addition of the phrase "if he was duly authorized" would seem to leave the construction placed on the section in the text the only possible one. 71 Miller v. Reynolds, 92 Hun, 400, 36 N. Y. Supp. 660. 72 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 20); Ariz. (§ 3323); 111. (§ 20); Kan. (§ 27); Md. (§ 39); Mich. (§ 22); Neb. (§ 20); N. Y. (§ 39); Ohio (§ 3171s); R. I. (§ 28); Wis. (§ 1675-20). §25 SIGNATURE BY AGENT. Z^ to innocent purchasers for value.'^ But the statute is not to be taken as changing the common law rule permitting the considera- tion and the conditions under which the instrument was delivered to be shown as between the original parties and those having notice of the facts relied upon as constituting a defense/^ and hence, as between the original parties, it is not necessary that the signer's representative capacity appear upon the face of the note."5 It follows that the effect of this section is limited to put- ting the payee of the note in possession of the knowledge that in its execution and delivery no personal liability was intended to be assumed by the makers,'^ and where tlie payee knows the maker is acting as an agent or trustee, the maker is not required to relieve himself of personal liability, to repeat to him in writing or orally information he already possesses.'''' In accordance with the rule stated, the word "agent," or a similar word, not dis- closing the nature of the agency, or the name of the principal, added after the signature, is merely descriptio personae, and the signer is personally liable."^ But if the principal is plainly dis- Addition of word "trustee" descriptio personae. Bank v. Looney, 99 Tenn. 278, 42 S. W. 149, 38 L. R. A. 837, 63 Am. St. Rep. 830. So held where signer's name was followed by the word "Secy." Daniel v. Glidden, 38 Wash. 556, 80 Pac. 811. 73 Megowan v. Peterson, 173 N. Y. 1, 65 N. E. 738. 74Alegowan v. Peterson, 173 N. Y. 1, 65 N. E. 738. As between the parties, parol contemporaneous agreement conditioning delivery is ad- missible. Paulson V. Boyd, 137 Wis. 241, 118 N. W. 841. 75 Megowan v. Peterson, 173 N. Y. 1, 65 N. E. 738. 76 Kerby v. Ruegamer, 107 App. Div. 491, 95 N. Y. Supp. 408. 77Kerby v. Ruegamer, 107 A-^p. Div. 491, 95 N. Y. Supp. 408. 78 Pease v. Pease, 35 Conn. 131, 95 Am. Dec. 225; Bedford Commercial Ins. Co. V. Covell, 49 Mass. (8 Mete.) 442; San Bernardino Nat. Bank v. Anderson (Cal.) 32 Pac. 168; Brunswick-Balke-Collender Co. v. Boutell, 45 Minn. 21, '47 N. W. 261; Pentz v. Stanton, 10 Wend. (N. Y.) 271, 25 Am. Dec. 558; Cortland Wagon Co. v. Lynch, 82 Hun (N. Y.) 173, 31 N. Y. Supp. 325; Casco Nat. Bank v. Clark, 139 N. Y. 307, 34 N. E. 908, 36 Am. St. Rep. 705; Lons v. Miller, 6 Grat. (Va.) 427, 52 Am. Dec. 129; Bickford v. First Nat. Bank, 42 111. 238, 89 Am. Dec. 436. The ad- dition of the word "executor" or "administrator," or the character "adm'r" or "adm'x," to the signature, does not relieve the signer from personal liability. Jenkins v. Phillips, 58 N. Y. Supp. 788; Boyd v. John- Opp.— Sel.— 3 34 EXECUTION AND DELIVERY. § 26 closed in the body of the instrument, one signing in a represent- ative capacity, or as agent, is not personally liable,™ though the signature has no words indicating agency .^"^ Signature by "Procuration." § 26. A signature by "procuration" operates as notice that the authority of the agent is limited. A signature by "procuration" operates as notice that the authority of the agent is limited; and the principal is bound only in case the agent, in so signing, acted within the actual scope of his authority ,^^ except as to bona fide holders.^ Delivery — Necessity. § 27. Every contract in a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. The contract evidenced by a negotiable instrument is not eom- ston, 89 Tenn. 284, 14 S. W. 804; Tassey v. Church, 4 Watts & S. (Pa.) 346; White v. Thompson, 79 Me. 207, 9 Atl. 118; Hosteller v. Hoke, 17 Kan. 81; Morehead Banking Co. v. Moorehead, 116 N. C. 410, 21 S. E. 190. 79 Whitney v. Inhabitants of Stow, 111 Mass. 368; Haskell v. Cornish, 13 Cal. 45; Little v. Bailey, 87 111. 239. In Vliet v. Simanton, 63 N. J. Law, 458, 43 Atl. 73S, persons signing as "trustees" a note which recited that "the trustees of M. Grange, No. 114," promise to pay, were held per- sonally liable. To the same effect, see Day v. Ramsdell, 90 Iowa, 731, 52 N. W. 208, 57 N. W. 630. soChipman v. Foster, 119 Mass. 189. 81 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D.. Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 21); Ariz. (§3324); 111. (§ 21); Kan. (§ 28); Md. (§ 40); Mich. (§ 23); Neb. (§ 21); N. Y. (§ 40); Ohio (§ 3171 t); R. I. (§ 29); Wis. (§ 1675-21). This provision was taken verbatim from the English "Bills of Ex- change Act 1882" (45 & 46 Vict. c. 61), § 25. See North River Bank v. Aymar, 3 Hill (N. Y.) 262; Bryant v. La Banque [18931 App. Cas. 170. 82 Bryant v. La Banque [1893] App. Cas. 170, 180. § 2S DELIVERY. 35 plete, and is revocable until delivery of the instrument for the purpose of giving effect thereto.^^ Delivery means the transfer of possession, actual or constructive, from one person to another.^* So, if the maker destroy the instrument after signature, but be- fore delivery, no recovery can be had thereon by the payee as upon a lost instrument.®^ But this provision does not render a note delivered to the payee and indorsed in blank, and thereafter stolen by the maker and sold to a bona fide holder, incomplete.®^ Sufficiency of Delivery. § 28. As against all parties, except a holder in due course, a delivery, to be effectual, must be made by or under the authority of the person making, drawing, accepting, or indorsing, and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. As against all parties except a bona fide holder, a delivery, to 83 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., ^^ C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 16"); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Xeb. (§ 16); N. Y. (§ 35); Ohio (§ 3171 o); R. I. (§ 24); Wis. (§ 1675-16). Polhemus v. Prudential Realty Corp., 74 N. J. Law, 570, 67 Atl. 303; Wells Fargo & Co. v. Vansickle, 64 Fed. 944; Palmer v. Poor, 121 Ind. 135. 22 N. E. 984. 6 L. R. A. 469; Devries & Co. v. Shumate, 53 Md. 211; Cowing V. Altman, 71 N. Y. 435, 27 Am. Rep. 70; Chipmant v. Tucker, 38 Wis. 43, 20 Am. Rep. 1; Roberts v. McGrath, 38 Wis. 52; Wright v. Smith, 81 Va. Ill; Hoit v. Mclntire, 50 Minn. 466, 52 N. W. 918. Bill of exchange paj-able to the order of the drawer does not come into exist- ence as such until it is delivered, as well as indorsed, by the payee. Stouffer V. Curtis, 198 Mass. 560, 85 N. E. 180. 84 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo.. Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 191); Ariz. (§ 3487); 111. (§ 190); Kan. (§ 2); Md. (§14); Mich. (§ 2); Neb. (§ 189); N. Y. (§ 2); Ohio il 3178); R. I. (§ 2); Wis. (§ 1675). 85 Sheehan v. Crosby, 58 Ind. 205. 86 Massachusetts Nat. Bank v. Snow, 187 Mass. 159, 72 .NT. E. 959. 36 EXECUTION AND DELIVERY. § 28 be effectual, must be made by or under the authority of the per- son making, drawing, accepting, or indorsing.^^ An instrument taken by the payee without the maker's consent is ineffectual for want of delivery .^^ Nor can a recovery be had where a delivery was obtained by force or fraud.^^ A delivery to the payee in a sealed envelope,^'' or by mailing the instrument to him,^^ is suf- ficient, and a sufficient constructive delivery takes place where the instrument is left in a place accessible to the payee.^^ After an instrument signed and delivered in blank has been completed, it relates back to the time of the original delivery, and a second delivery is not necessary .^^ Conditional delivery. As against all parties except a bona fide holder, the delivery may be shown to be conditional, and for a specific purpose, and not for the purpose of transferring the property in the instru- ment,^* and the fact that such condition rests in a parol agree- 87 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 16); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Neb. (§ 16); N. Y. (§ 35); Ohio (§ 3171 o); R. I. (§ 24); Wis. (§ 1675-16). 88 Hatton V. Jones, 78 Ind. 466; Roberts v. McGrath, 38 V/is. 52; Dodd V. Dunne, 71 Wis. 578, 11 N. W. 430. 89Burson v. Huntington, 21 Mich. 415, 4 Am. Rep. 497. 90 Worth V. Case, 42 N. Y. 362. 91 Barrett v. Dodge, 16 R. I. 740, 19 Atl. 530. 27 Am. St. Rep. Ill; Kirk- man V. Bank of America, 42 Tenn. (2 Cold.) 397. 92 Norton v. Norton, 1 N. Y. Supp. 552; Babcock v. Benson, 58 Hun, 601, 11 N. Y. Supp. 455. 93 Davidson v. Lanier, 71 U. S. (4 Wall.) 447. 94 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va.. Wash.. W. Va., Wyo. (§ 16); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Neb. (§ 16); N. Y. C§ 35); Ohio (§ 3171 o); R. I. (§ 24); Wis. (§ 1675-16). Hodge V Smith, 130 Wis. 326, 110 N. W. 192; Hill v. Hall, 191 Mass. 253, n N. E. 831. See, also, Burke v. Dulaney, 153 U. S. 228. 38 Law. Ed. 698; Zimmerman v. Adee, 126 Ind. 15, 25 N. E. 828; Devries v. Shumate, § 29 DELIVERY. 37 ment contemporaneous with delivery does not prevent its being proven.^5 -pj^g condition and its nonfulfillment being shown, the contract has no binding validity .^^ Same — Presumptions. § 29. Nonpossession may raise a presumption of delivery. Where the instrument is no longer in possession of a party whose signature appears thereon, a valid and intentional de- livery by him is presumed until the contrary is proved,^'^ and possession by the payee or a party other than the signer is prima facie evidence of delivery ,^8 and ownership,^^ \^fi^i possession by a 53 Md. 211; Watkins v. Bowers, 119 Mass. 383; Bernhard v. Brunner, 17 N. Y. Super. Ct. (4 Bosw.) 528; Bookstaver v. Jayne, 60 N. Y. 146; Gar- field Nat. Bank v. Colwell, 57 Hun, 169, 10 N. Y. Supp. 864; French v. Wallack, 12 N. Y. St. Rep. 159, 62 Am. Dec. 152; Bank of Benson v. Jones, 147 N. C. 419, 61 S. E. 193. But see Mead v. Nat. Bank of Pawling, 89 Hun, 102, 34 N. Y. Supp. 1054. 05 Hill V. Hall, 191 Mass. 253, 77 N. E. 831; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192. Proof of such condition does not violate the rule that a written instrument cannot be varied by a contemporaneous parol agreement. Hodge v. Smith, 130 Wis. 326, 110 N. W. 192. 96 Hodge V. Smith, 130 Wis. 326, 110 N. W. 192. 97 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 16); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Neb. (§ 16); N. Y. (§ 35); Ohio (§ 3171 o); R. L (§ 24); Wis. (§ 1675-16). 98 Bellows V. Folsom, 27 N. Y. Super. Ct. (4 Rob.) 43; Garrigus v. Home, Frontier & Foreign Missionary Soc, 3 Ind. App. 91, 28 N. E. 1009, 50 Am. St. Rep. 262. In a suit upon a promissory note, where the plain- tiff has possession of the note, produces it upon the trial, and it is re- ceived in evidence, such facts make a prima facie case of delivery of the note. Gandy v. Bissell's Estate, 81 Neb. 102, 115 N. W. 571. 99 The presumption of ownership arising from possession by the orig- inal payee is not affected by the fact that the note bears the blank in- dorsement of such payee. Home Sav. Bank v. Stewart, 78 Neb. 624, 110 N. W. 947, See, also, Lowell v. Bickford, 201 Mass. 543, 88 N. E. L 38 EXECUTION AND DELIVERY. § 29 sister of the payee is not sufficient to raise the presumption.i«» This presumption from possession by the payee may be rebutted by evidence that the delivery was on a contingency which had not happened.^°^ 100 Gordon v. Adams, 127 111. 223, 19 N. E. 557. 101 Hurt V. Ford (Mo.) 36 S. W. 671. CHAPTER IV. ESSENTIALS OF NEGOTIABILITY. § 30. In General. § 31. Substantial Compliance Sufficient. § 32. Matters Not Affecting Negotiability. 1. Absence of Date. 2. Seal. 3. Failure to Specify Value. Exception. — Requirement that Nature of the Consideration be Stated. § 33. The Promise or Order. § 34. There Must be a Promise or Order to Pay. Warehouse Receipts and Bills of Lading. Certificates of Deposit. Receivers' Certificates. Banks' Pass Books. § 35. The Promise or Order Must be Unconditional. § 36. Unconditional though contains : 1. Reference to a Particular Fund or Account for Reimbursement. 2. Statement of the Transaction. § 37. Instruments Payable Out of Particular Fund. Municipal Warrants and Orders. § 38. Sum Certain. § 39. Sum Payable is a Sum Certain Though Payable. 1. With Interest. 2. By Stated Instalments. 3. By Stated Instalments with Default Provision. 4. With Exchange. 5. Collection Costs and Attorney's Fees. § 40. Provision for Taxes. § 41. Must be Payable in Money. § 42. Certainty as to Time of Payment. § 43. Instruments Payable on Demand. § 44. Overdue Paper. § 45. Fixed or Determinable Future Time. 39 40 ESSENTIALS OF NEGOTIABILITY. §30 § 46. Instrument Payable on Contingency. § 47. Fixed or Determinable Future Time — Prior Contingency. § 48. Words of Negotiability. § 49. Supplied by Indorsement. § 50. Instruments Payable to Order. § 5L Instruments Payable to Bearer. § 52. Certainty as to Parties. § 53. Designation of Drawee. § 54. Joint Drawees. § 55. Place of Payment. § 56. No Place of Payment Specified. § 57. Provisions Not Affecting Negotiability. 1. Sale of Collateral; Conditional Sale Notes. 2. Confession of Judgment. 3. Waiving Statutory Rights. 4. Option to Require Something in Lieu of Payment of Money. § 58. Illegal Provisions. >. In General. ^ / (d jOO <U^f. § 30. An instrument to be negotiable must conform to the fol- lowing requirements:^ 1. It must be in writing and signed by the maker or drawer ; 2. Must contain an unconditional promise or order to pay a sum certain in money ; 3. Must be payable on demand, or at a fixed or determin- able future time; 4. Must be payable to order or to bearer ; and 5. Where the instrument is addresed to a drawee, he must be named or otherwise indicated therein with reason- able certainty. There are certain essentials of negotiability, such as a writ- ten instrument, and a signature by the maker or drawer, which are primarily essentials to the valid execution of the instru- ment, and such questions are considered in the chapter on "Exe- 1 Neg. Inst. Laws Colo., Conn., D. C, Fla.. Idaho. Iowa. Ky., La., Mass., Mo., Mont., N. H., N. ].. N. M , N C, M. D. Ok!., <ji.. Pa.. Tenn.. Utah, Va., Wash.. W. Va., Wyo. (§ 1): Anz. (§ 3304.. Til. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); .N'eb. (§ 1); N. \. (§ 20), Ohio (§ 3171): R. I. (§ 9); Wis. (§ 1675-1). § 32 DATE. 41 cution and Delivery," because more properly falling under that heading.2 § 31. Substantial compliance with the requirements of the ne- gotiable instruments law is sufficient. "While the negotiable instruments law provides that an instru- ment to be negotiable "must conform" to certain specific re- quirements,^ a strict following of the language of the law is not required, but any terms are sufficient which clearly indicate an intention to conform to the statutory requirements.* § 32. The negotiabihty of an instrument is not affected by the fact: 1. That it is not dated; or 2. That it bears a seal; or 3. That it does not specify the value given or that any value was given. Exception.— But nothing herein alters or repeals any statute requiring, in certain cases, the nature of the consideration to be stated in the instrument. Date. As heretofore stated, the validity of the instrument is not af- fected by the fact that it is not dated,^ and the same rule applies 2 See ante, chapter III. 3Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§9); Wis. (§ 1675-1). 4Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 10); Ariz. (§ 3313); 111. (§ 10); Kan. (§ 17); Md. (§ 29); Mich. (§ 12); Neb. (§ 10); N. Y. (§ 29); Ohio (§ 3171 i); R. I. (§ 18); Wis. (§ 1675-10). 5 See ante, chapter III. Execution and Delivery, § 13. 42 ESSENTIALS OF NEGOTIABILITY. §32 to its negotiable character.^ Not being dated, it will be consid- ered to be dated as of the time it was issuedJ Seal. The old common-law rule that a seal placed on an instrument renders it a specialty, and hence non-negotiable, is still in force, except as modified or abolished by statute.^ Corporate paper is an exception to the general rule, and is not rendered non-nego- tiable at common law by the presence of the corporate seal,^ the 6 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); III. (§ 6); Kan. (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25); Ohio (§ 3171 e); R. L (§ 14); Wis. (§ 1675-6). Church V. Stevens, 56 Misc. 572, 107 N. Y. Supp. 310. 7 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17).; Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). See ante, chapter IV. Execution and Delivery, § 14. 8 Rawson v. Davidson, 49 Mich. 607, 14 N. W. 565; Lewis v. Wilson, 5 Blackf. (Ind.) 370; Brown v. Jordahl, 32 Minn. 135, 19 N. W. 650, 50 Am. Rep. 560. But see Laws Minn. 1899, c. 86, abolishing private seals, and providing that the addition of such a seal shall not affect the char- acter of an instrument in any respect. 9 Corporate bonds, see American Nat. Bank v. American Wood-Paper Co., 19 R. I. 149, 32 Atl. 305; Evertson v. National Bank of Newport, 66 N. Y. 14. Interest coupons detached from negotiable bonds are negotiable. In- ternational Imp. Fund Trustees v. Lewis, 34 Fla. 424, 16 So. 325, 43 Am. St Rep. 209, 26 L. R. A. 743; Evertson v. National Bank of Newport, 66 N. Y. 14; Nashville v. First Nat Bank, 60 Tenn. (1 Baxt) 402. Corpo- rate notes, see Jackson v. Myers, 43 Md. 452, where there was a printed representation of the corporate seal on the face of the note; Chase Nat. Bank v. Faurot 72 Hun, 373, 25 N. Y. Supp. 447; Id., 149 N. Y. 532, 44 N. E. 164, and Weeks v. Esler, 143 N. Y. 374, 38 N. E. 377, in which sealed corporate notes were held negotiable, in the absence of any show- ing that the parties intended to affix seals; Mackey v. St. Mary's Church, 15 R. I. 121, 23 Atl. 108, 2 Am. St Rep. 881, where a corporate note, sealed, but not with the corporate seal, was held negotiable. The New § 32 SEAL. 43 theory being, generally, that the affixing of the corporate seal is a necessary part of the execution of the instrument.^° The com- mon-law rule has been abolished by the negotiable instruments law by an express provision that an instrument is negotiable though it bears a seal.^^ It follows that, where the negotiable instruments laws are in force, the distinction and refinements made by the courts in de- termining what constitutes a seal ^^ are useless learning, so far as the question of negotiability is concerned. York negotiable instruments law (§ 332) provides that the owner or holder of any corporate municipal bond or obligation issued and payable within the state, but not registered, may make such bond or obligation, or the interest coupon accompanying it, non-negotiable by subscribing his name to a statement indorsed thereon, that such bond, obligation, or coupon is his property. 10 But see Union Bank v. Ridgely, 1 Har. & G. (Md.) 324 (413); Bank of Columbia v. Patterson, 11 U. S. (7 Cranch) 305, 3 Law. Ed. 540. 11 Neg. Inst. Laws Colo., Conn., D. C, Fla., Maho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); 111. (§ 6); Kan. (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25); Ohio (§ 3171 e); R. L (§ 14); Wis. (§ 1675-6). Addition of seal to maker's signature does not afifect negotiable char- acter of note. Arnd v. Heckert, 108 Md. 300, 70 Atl. 416; St. Paul's Epis- copal Church V. Fields, 81 Conn. 670, 72 Atl. 144. Of the states that have adopted the negotiable instruments law, the following previously had statutes making sealed instruments negotiable: Colo., Fla., 111., Kan., Mass., Nev., N. C, Ohio, Tenn. Pate v. Brown, 85 N. C. 166. But see Borden v. Southerland, 70 N. C. 528; Spense v. Tap- scott, 93 N. C. 246. In the following sealed instruments were formerly assignable merely, subject to defense: Md. (Pub. Gen. Laws, art. 8, §§ 3, 9), Va. (Code, § 2860), Wis. (Sanb. & B. Ann. St. §§ 2605, 2606), D. C. (Comp. St. c. 6, § 3). The negotiable instr^fments law changes the rule in Oregon. See D. M. Osborne & Co. v. Hubbard, 20 Or. 318, 11 L. R. A. 833. But not in New York. Chase Nat. Bank v. Faurot, 149 N. Y. 532. 44 N. E. 164. 12 Clegg V. Lemessurier, 15 Grat. (Va.) 108; Andrews v. Herriot, 4 Cow. (N. Y.) 508; Bates v. Boston & N. Y. Cent. R. Co., 92 Mass. (10 Allen) 251; Duncan v. Duncan, 1 Watts (Pa.) 322; D. M. Osborne & Co. v. Hub- bard, 20 Or. 318, 11 L. R. A. 833. In Minnesota an instrument, otherwise a negotiable promissory note, but having the word "Seal" in brackets opposite the name of the maker, 44 ESSENTIALS OF NEGOTIABILITY. §32 Failure to specify value. The negotiability of an instrument is not affected by the fact that it does not specify the value given, or that any value was given.i^ This rule is merely a specific application of the general rule that a consideration for a negotiable instrument is pre- sumed,^* and is declaratory of the law, for, in the absence of stat- ute, it has been uniformly held that the words "value received," or their equivalent, are not necessary to negotiability.^^ Exception. The negotiable instruments law provides that nothing in the section relating to setting out the consideration shall repeal any statute requiring the nature of the consideration to be stated in the instrument.^^ These provisions refer to such statutes as that of Wisconsin, which provides that notes taken by any fire insur- ance company for the issuance of a policy shall have written in the body thereof the words "given in payment for a policy of insurance, and, if transferred before or after maturity, shall re- main subject to all defenses;"^'' and the statute of New York, which requires notes given for a patent right to contain the words "given for a patent right," and one given for the purpose was held to be a sealed instrument, and not negotiable, though there was no reference to the seal in the body of the note. Brown v. Jordahl, 32 Minn. 135, 19 N. W. 650, 50 Am. Rep. 560. 13 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); 111. (§ 6); Kan. (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25); Ohio (§ 3171 e); R. I. (§ 14); Wis. (§ 1675-6). 14 See post, § 59. 15 Archer v. Claflin, 31 111. 306; Benjamin v. Tillman, 2 McLean, 213, Fed. Cas. No. 1,304; Coursin v. Ledlie's Adm'r, 31 Pa. 506. 16 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa, Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); 111. (§ 6); Kan. (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-7). 17 Rev. St. 1878, § 1944. This section was not repealed by the negotiable instruments law. § 34 t»ROMISE OR ORDER. 45 of speculation in farm products to state that it is "given for a speculative consideration." ^^ At one time there was considerable doubt as to the constitutionality of a statute requiring notes given for patent rights to recite that fact, but such statutes are now generally considered as constitutional.^^ The Promise or Order. § 33. . The instrument must contain: 1. A promise or order; 2. Unconditional in terms; 3. To pay a sum certain. § 34. There must be a promise or order to pay. Both at common law and under the negotiable instruments act -^ there must be a promise or order to pay. AVhat consti- tutes a "promise" sufficient to make an instrument a promissory note has been a freciuent subject of judicial investigation. In the absence of statute, it has generally been held that an acknowl- edgment of indebtedness, either in the form of a duebill or an "I. 0. U., " does not contain a sufficient promise, and in fact is not a new obligation, but merely new evidence of the old debt.-^ Where a writing contains nothing more than a bare acknowledg- ment of a debt, it does not, in legal construction, import an ex- 18 Negotiable Inst. Law, §§ 330, 331. 19 New V. Walker, 108 Ind. 365, 9 N. E. 386, 58 Am. Rep. 40; Herdic V. Roessler, 109 N. Y. 127, 16 N. E. 198. A similar statute was held un- constitutional in Minnesota as an attempt to regulate the sale of patent rights granted pursuant to acts of congress. Crittenden v. White, 23 Minn. 24, 23 Am. Rep. 676. 20Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675). 21 Gray v. Bowden, 40 Mass. (23 Pick.) 282; Gay v. Rooke, 151 Mass. 115, 23 N. E. 835, 21 Am. St. Rep. 434; Pepoon v. Stagg & Co., 1 Nott & McC. (S. C.) 102; Currier v. Lockwood, 40 Conn. 349, 16 Am. Rep. 40. 46 ESSENTIALS OF NEGOTIABILITY. § 34 press promise to pay.^ The doctrine of implied promise lias, however, been applied to sustain the negotiability of instruments of this nature.22 So it has been held that an instrument reciting "good to R. C, or order, for thirty dollars borrowed money," contained a sufficient promise, and was negotiable.^* Also that one in the words "due A on corn, $525," was negotiable.-^ A promise to be "accountable" is equivalent to a promise to pay,^ but a mere statement that "I owe the estate of W." a certain sum is not a negotiable, promissory note.^^ The sufficiency of the "order" in a bill of exchange is governed by similar principles, and a direction to "please let the bearer have $50. I will arrange it with you this noon," was held to be a bill of exchange, and not a mere covenant.-^ But a direction to "credit A., or bearer, $30, and I w411 pay you," does not constitute a good bill.^* Same — Warehouse receipts and bills of lading. Warehouse receipts and bills of lading are usually treated as quasi negotiable instruments, on the ground that they do not contain' a sufficiently definite promise, and are not payable in money .^"^ In some states receipts issued by certain warehouse and storage companies are still negotiable, for the statute giving them 22 Smith V. Allen. 5 Day (Conn.) 337. 23 Anderson v. Pearce, 36 Ark. 293, 38 Am. Rep. 39; Lee v. Balcom, 9 Colo. 126, 11 Pac. 74; Smith v. Allen, 5 Day (Conn.) 2,Z7; Harrow v. Dugan, 36 Ky. (6 Dana) 341. 2* Franklin v. March, 6 N. H. 364, 25 Am. Dec. 462. But see Brown v. Oilman, 13 Mass. 158. 25Jaquin v. Warren, 40 III. 459. 26 Morris v. Lee, 1 Strange, 629. 27 Bowles V. Lambert, 54 111. 237. 28 Biesenthall v. Williams, 62 Ky. (1 Duv.) 329, 85 Am. Dec. 629. The word "please," or words of similar import, do not affect the nego- tiability of the bill. Wheatley v. Strobe, 12 Cal. 92, 73 Am. Dec. 522; Jar- vis v. Wilson, 46 Conn. 90, 33 Am. Rep. 18; Biesenthall v. Williams, 62 Ky. (1 Duv.) 329, 85 Am. Dec. 629; Mehlberg v. Tisher, 24 Wis. 607, 29 Wooley V. Sergeant, 8 N. J. Law, 262, 14 Am. Dec. 419. 30 But see Canadian Bank of Commerce v. McCrea, 106 111. 28L § 34 PROMISE OR ORDER. 47 negotiability ^^ was not repealed by the negotiable instruments laws. In "Wisconsin warehouse receipts, bills of lading, and rail- road receipts, are negotiable, unless the words "not negotiable" are plainly written, printed, or stamped on the face of the in- strument.32 Same — Certificates of deposit. A certificate of deposit payable to the order of the depositor is negotiable,^^ and its negotiability is not affected by the fact that a demand is necessary before an action can be maintained on it.^* One not containing a promise to pay is not negotiable, as it is nothing more than a receipt for the money deposited.^^ g^^ ^ certificate of deposit payable to the order of a named person at six months, with interest, is a negotiable, promissory note.^^ Same — Receivers' certificates. A receiver's certificate is not negotiable since it lacks several of the essentia] elements of negotiability.^'' One which contains 31 Laws N. Y. 1858, c. 336, § 6 (Laws 1872, c. 881, § 6; 2 Rev. St. 1875 p. 230, § 6). See Hanover Nat. Bank v. American Dock & Trust Co., 148 N. Y. 612, 43 N. E. 72, 51 Am. St. Rep. 721. citing 143 N. Y. 559; Corn Exchange Bank v. American Dock & Trust Co., 149 N. Y. 174, 43 N. E. 915. The instruments are transferable without indorsement. Mechanics' Bank of Canada v. Union R. & Transp. Co., 69 N. Y. 373. Scheuermann v. Monarch Fruit Co. (La.) 48 So. 647. 32 Rev. St. 1878, §§ 1676, 4194, 4425. The negotiable instruments law (§ 1675-1, subd. 5) has specially saved these sections from repeal. 33 Birch V. Fisher, 51 Mich. 36. 16 N. W. 220; First Nat. Bank of Rapid City V. Security Nat. Bank, 34 Neb. 71. 51 N. W. 305, 33 Am. St. Rep 618, 15 L. R. A. 386; Pardee v. Fish, 60 N. Y. 265; Baker v. Leland, 9 App. Div. 365, 41 N. Y Supp. 399; Maxwell v. Agnew, 21 Fla. 154; John son v. Henderson, 76 N. C 227; Lindsey v. McClelland, 18 Wis. 481, 86 Am. Dec. 786. Effect of provision .for return of certificate, see § 35. s* Pardee v. Fish, 60 N Y. 265, 19 Am. Rep. 176. SSHotchkiss V. Mosher, 48 N. Y 482. 36 Bank of Orleans v. Merrill, 2 Hiil (X. Y.) 295; Beardsley v. Webber, 104 ^lich. 88, 62 N. W. 173. 37 Turner v. Peona & S. R. Co.. 95 HI. 134. is ESSENTIALS OF NEGOTIABILITY. § 35 no express promise to pay, but merely acknowledges an indebted- ness, payable out of a particular fund, is not negotiable ;^^ nor is one which, on its face, recites that it was issued under a special order of court.^^ Same — Bank pass books. A pass book issued by a savings bank is not a negotiable instru- ment,*'^ though a by-law of the bank, assented to by depositors, provides that the pass books shall be transferable to order.^^ An order signed by a depositor, directing payment to a third person, does not make the books negotiable,^^ and an assignee of the book cannot sue thereon in his own name.*^ On the same theory, an order on a savings bank which recites that the pass book must accompany the order is not negotiable.^* §,35. The promise or order to pay must be unconditional. Both under the negotiable instruments law,*^ and at common law,*^ the instrument to be negotiable must be payable uncondition- 38 Union Trust Co. v. Chicago & L. H. R. Co., 7 Fed. 513. 39 Montreal Bank v. Chicago, C. & W. R. Co., 48 Iowa, 518. *o Smith V. Brooklyn Sav. Bank, 101 N. Y. 58, 4 N. E. 123, 54 Am. Rep. 653. "Witte V. Vincenot, 43 Cal. 325. *2 McCaskill v. Connecticut Sav. Bank, 60 Conn. 300, 22 Atl. 568, 25 Am. St. Rep. 323, 13 L. R. A. 737. 43 Howard v. Windham County Sav. Bank, 40 Vt. 597. 44 White V. Cushing, 88 Me. 339, 34 Atl. 164, 51 Am. St. Rep. 402, 32 L. R. A. 590. 45 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Qkl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); Md. (§ 20); Mich! (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. L (§ 9); Wis. (§ 1675-1). Knights & Ladies of Security v. Hibernian Banking Ass'n, 137 111. App. 175. Instrument directing drawee to pay "upon acceptance" a stated amount is not negotiable. Berenson v. London & Lancashire Fire Ins. Co., 201 Mass. 172, S7 N. E 687 46 Carnahan v. Pell, 4 Colo. 190; Jennings v. First Nat. Bank, 13 Colo. 417, 22 Pac. 777, 16 Am. St. Rep. 210; First Nat. Bank of Webster v. Alton, §35 UNCONDITIONAL ORDER. 49 ally. Tt is not in the rule but in the application of it that the courts differ. In applying the rule it has been held that an order directing payment out of any money the drawee might obtain in a certain suit,^" and a promise to pay, provided a railroad be built to a certain place by a certain time,^^ are not negotiable. Where payment is contingent on whether the payee, before ma- turity, shall pay a certain mortgage, the instrument is not ne- gotiable.^^ As to the effect of a provision for payment "on re- turn" of the instrument or of other instruments, there is a con- flict of opinion,5o though in a recent case, under the act, such a provision was held to render the instrument non-negotiable.^^ 60 Conn. 402, 22 Atl. 1010; Coolidge v. Ruggles, 15 Mass. 387; Grant v. Wood, 78 Mass. (12 Gray) 220; Cook v. Satterlee, 6 Cow. (N. Y.) 108, 16 Am. Dec. 432; Shelton v. Bruce, 17 Tenn. (9 Yerg.) 24; First Nat. Bank of Stillwater v. Larsen, 60 Wis. 206, 19 N. W. 67, 50 Am. Rep. 365. ^7 Waters v. Carleton, 4 Port. (Ala.) 205. 48 Eldred v. Malloy, 2 Colo. 320, 25 Am. Rep. 752. 49 Hays V. Gwin, 19 Ind. 19. 50 Certificates of deposit providing for payment on return of the cer- tificates are negotiable. Fellspoint Sav. Inst. v. Weedon, 18 Md. 320, 81 Am. Dec. 603; Kirkwood v. Exchange Nat. Bank, 40 Neb. 497, 58 N. W. 1135; Bellows Falls Bank v. Rutland County Bank, 40 Vt. 377. But, contra, see O'Neill v. Bradford, 1 Pin. (Wis.) 390, 42 Am. Dec. 574; Leb- anon Bank v. Mangan, 28 Pa. 452; Patterson v. Poindexter, 6 vVatts & S. (Pa.) 227, 40 Am. Dec. 554. A receipt providing for payment on its return is negotiable. Frank v. Wessels, 64 N. Y. 155. A note providing that it shall be surrendered to the maker on payment of the note to the payee is not negotiable. Hubbard v. Moseley, 11 Mass. (11 Gray) 170, 71 Am. Dec. 698. Nor is a note given for stock which pro- vides for payment on surrender of the stock. Van Zandt v. Hopkins, 151 111. 248, 37 N. E. 845. Nor is an instrument negotiable, payment of which is conditioned on the return of the maker's guarantee of a certain note. Smilie v. Stevens, 39 Vt. 315. 51 A so-called draft, payable "on presentation of certificate No. 32,004, issued by K. & L. of S. to J. K., properly released," is not a negotiable in- strument. Knights & Ladies of Security v. Hibernian Banking Ass'n, 137 111. App. 175. Compare with Van Zandt v. Hopkins, 151 111. 248, 17 N. E. 845. Opp.— Sel.— 4 50 ESSENTIALS OF NEGOTIABILITY. § 36 § 36. An unqualified order or promise to pay is unconditional, though coupled with: 1. An indication of a particular fund out of which re- imbursement is to be made, or a particular account to be debited with the amount ; or 2. A statement of the transaction which gives rise to the instrument. § 37. But an order or promise to pay out of a particular fund is not unconditional. Reference to particular fund or account for reimbursement. Following the common law, the negotiable instruments act pro- vides that an indication of a particular fund, out of which re- imbursement is to be made, or a particular account which is to be debited with the amount, does not render an instrument condi- tional,^' a distinction, clear in the law but confused in the ap- plication, being here made between those cases wherein there is an indication of the fund to which the payor or drawee is ts look for reimbursement and those cases where there is an express or implied direction to pay the instrument out of a particular fund.^3 jn applying this rule the courts have held that the tact that the instrument contains a direction to "charge" the amount against specified property,^* or to "charge" a certain accouut,^^ 52Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Dr.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 3); Ariz. (§ 3306); 111. (§ 3); Kan. (§ 10); Md. (§ 2Z); Mich. (§ 5); Neb. (§ 3); N. Y. (§ 22); Ohio (§ 3171 b); R. L (§ 11); Wis. (§ 1675-3). Merely declaratory of common law. First Nat. Bank v. Lightner, 74 Kan. 736, 88 Pac. 59, 118 Am. St. Rep. 353, 8 L. R. A. (N. S.) 231. Receiver's certificates not negotiable, see ante, § 34. 53 See post, § 37. First Nat. Bank v. Lightner, 74 Kan. 736, 88 Pac. 59, 118 Am. St. Rep. 353, 8 L. R. A. (N. S.) 231. 54 Order to "pay to A. $40, and charge same against whatever amount may be due me for my share of fish," caught on a certain schooner. Red- man V. Adams, 51 Me. 429. Direction to "charge the amount against me, and (sic) of my mother's estate." Schmittler v. Simon, 101 N. Y 554, 5 N. E. 452, 54 Am. Rep. 737. 55 Direction to "charge my salary account." Shaver v. Western Union Tel. Co., 57 N. Y. 459. §37 STATEMENT OF TRANSACTION. 51 or that it is "payable out of" property of the drawer or maker," or that it is "on account of " a certain contract," does not render it non-negotiable. In a recent Alabama case, a stipulation in a note that "the makers and indorsers of this note * * * authorize said bank to appropriate on this note, whether due or not, at any time at its option, without notice or legal proceedings, any money which they, or any one or more of them, may have jointly or severally in said bank, on deposit or otherwise," was held not to destroy negotiability.^ Statement of transaction. Though it is not necessary to state that there was a consid- eration for an instrument in order to render it negotiable, one which contains a statement of the particular transaction giving rise to the instrument is not thereby rendered non-negotiable.^^ Thus, a promise to pay a stated sum for the privilege of placing 56 On the same theory, a promise to pay "out of any property I may possess." Chickering v. Greenleaf, 60 N. H. 51. An indorsement made by the maker of a note on the back of the in- strument that he is the owner of a stated amount of real and personal property does not destroy negotiability. Hudson v. Emmons, 107 Mich. 549, 65 N. W. 542. Instrument made payable "out of my share of the grain." Corbett v. Clark, 45 Wis. 403, 30 Am. Rep. 763. 57 Words "on account of contract between you and Snyder Planing Mill Company" held not a direction to charge a particular fund, but merely indicates the fund to which the drawee is to look for reimburse- ment. First Nat. Bank v. Lightner, 74 Kan. 736, 88 Pac. 59, 118 Am. St. Rep. 353, 8 L. R. A. (N. S.) 231. 58 Louisville Banking Co. v. Gray, 123 Ala. 251, 26 So. 205. 69 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.. Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 3); Ariz. (§ 3306); 111. (§ 3); Kan. (§ 10); Md. (§ 22); Mich. (§ 5); Neb. (§ 3); N. Y. (§ 22); Ohio (§ 3171 e); R. .L (§ 11); Wis. (§ 1675-3). Newton Wagon Co. v. Dier, 10 Neb. 284; Hereth v. Meyer, 33 Ind. 511; Doherty v. Perry, 38 Ind. 15; Bank of Sherman v. Apperson & Co., 4 Fed. 25; First Nat. Bank of Salisbury v. Michael, 96 N. C. 53, 1 S E 855. Conditional sale note not negotiable, see post, § 57. 52 ESSENTIALS OF NEGOTIABILITY. § 37 advertising signs in street ears ^° is negotiable; and a statement that the note was given for insurance,^^ or for personal prop- erty,62 or for rent,^^ does not destroy its negotiability. Instruments payable out of particular fund. An instrument payable out of a particular fund is conditional, and is not negotiable.^* The distinction here made by the decis- ions and by the negotiable instruments laM^s, between instruments payable out of a particular fund and instruments merely referring ito such fund for reimbursement, is close, but is logically sound. It is clear that an instrument payable out of a particular fund is not payable "in any event," but depends for payment on the existence of such a fund, and its sufficiency at the time fixed for payment. While the courts cannot disregard this requirement, that is, that an instrument to be negotiable must not be made payable out of a particular fund or be issued otherwise than upon the general credit of the maker,^^ still it rests with them to say what facts satisfy this requirement, and they refrain from giving these provisions such a literal or impractical interpretation as will work unexpected and undesirable results.*^^ Viewing the rule from this standpoint it has been held that bonds of a joint stock association which stipulate that no shareholder shall be personally liable as partner or otherwise on them, but that they eoSiegel v. Chicago Trust & Sav. Bank, 131 111. 569, 23 N. E. 417, 19 Am. St. Rep. 51, 7 L. R. A. 537. See, also. Chase v. Senn, 13 N. Y. Supp. 266. 61 American Ins. Co. v. Callahan, 75 Ind. 168; Kirk v. Dodge County Mut. Ins. Co., 39 Wis. 138, 20 Am. Rep. 39; Union Ins. Co. v. Greenleaf, 64 Me. 123; Taylor v. Curry, 109 Mass. 36, 12 Am. Rep. 661. 62 Collins V. Bradbury, 64 Me. Zl . See, also, Preston v. Whitney, 23 Mich. 260. Conditional sale note not negotiable, see post, § 57. 63 Buchanan v. Wren, 10 Tex. Civ. App. 560, 30 S. W. 1077. 64 Same sections of negotiable instruments laws as last above cited. See, also. Tradesmen's Nat. Bank of Philadelphia v. Green, 57 Md. 602; Harriman v. Sanborn, 43 N. H. 128; Parker v. Syracuse, 31 N. Y. 376; Cook v. Satterlee, 6 Cow. (N. Y.) 108, 16 Am. Dec. 432. 65Hibbs v. Brown, 190 N. Y. 167, 82 N. E. 1108. 66Hibbs V. Brown, 190 N. Y. 167, 82 N. E. 1108. § 37 PARTICULAR FUND. 53 shall be payable solely out of certain securing trust assets or out of other assets of the association, are negotiable.^" So, also, that an instrument payable out of "the growing substance" of the drawer,^^ or out of "money in his hands belonging to rae,"^^ are not negotiable, nor are instruments payable out of the pro- ceeds of a sale of certain named property,'^ nor an order in the form: "Please pay to the order of W. $600, — the same to be the last $600 due me on my contract, — and charge the same to my account. "^1 But a note payable on a certain day, "or before, if made out of the sale" of specified property, is negotiable," since it is payable absolutely on the day fixed, if not paid before. Same — Municipal warrants and orders. Municipal warrants and orders are not negotiable.'^^ If not made payable out of a particular fund, they are sometimes treated as negotiable,'^* but are not considered as commercial paper in the strict sense of the term."^ Where, however, a municipal war- rant is payable out of "any funds belonging to the city, not be- fore specially appropriated," and is chargeable to the "general city funds," it is negotiable.'^^ By the negotiable instruments law of Wisconsin, no order drawn on or accepted by the treasurer of iiny county, town, city, village, or school district, is negotiable, 67Hibbs V. Brown, 190 N. Y. 167, 82 N. E. 1108. esjosselyn v. Lacier, 10 Mod. 294. 69Averett's Adm'r v. Booker, 15 Grat. (Va.) 165, 76 Am. Dec. 203. 70 Virginia v. Turner, 1 Cranch, C. C. 261, Fed. Cas. No. 16,970; De Forest v. Frary, 6 Cow. (N. Y.) 151; Lowery v. Steward, 25 N. Y. 239, 82 Am. Dec. 346; Jackson v. Tilghman, 1 Miles (Pa.) 31. 71 Woodward v. Smith, 104 Wis. 365, 80 N. W. 440. 72 Walker v. Woollen, 54 Ind. 164, 23 Am. Rep. 639; Noll v. Smith, 64 Ind. 511, 31 Am. Rep. 131; Charlton v. Reid, 61 Iowa, 166, 16 N. W. 64, 47 Am. Rep. 808; Kiskadden v. Allen, 7 Colo. 206, 3 Pac. 221. 73 Stanton v. Shipley, 27 Fed. 498; Read v. Buffalo, 67 Barb. (N. Y.) 526; Goose River Bank v. Willow Lake School Tp., 1 N. D. 26, 44 N. W. 1002. 74 See Floyd County Com'rs v. Day, 19 Ind. 450; Brownlee v. Madison County Com'rs, 81 Ind. 186. 75 Furgerson v. Staples, 82 Me. 159, 19 Atl. 158, 17 Am. St. Re^. 470 7G Bull V. Sims, 23 N. Y. 570. 54 ESSENTIALS OF NEGOTIABILITY. § 38 no matter in what form it is drawn, unless it is expressly made negotiable by law.''"^ In some cases negotiability is denied to municipal warrants and orders on the ground that municipal offi- cers are not authorized to execute negotiable instruments.'^^ The nature of municipal warrants is well stated in Mayor v. Ray as follows: "Vouchers for money due, certificates of indebtedness for services rendered or for property furnished for the uses of the city, orders or drafts drawn by one city officer upon another, or any other device of the kind used for liquidating the amounts legitimately due to public creditors, are, of course, necessary in- struments for carrying on the machinery of municipal adminis- tration, and for anticipating the collection of taxes. But to in- vest such documents with the character and incidents of con?.- mercial paper, so as to render them in the hands of bona fide holders, absolute obligations to pay, however irregularly or fraud- ulently issued, is an abuse of their true character and purpose. It has the effect of converting a municipal organization into a trading company, and puts it in the power of corrupt officials to involve a political community in irretrievable bankruptcy." ^^ § 38. The promise or order raust be to pay a sum certain. § 39. The sum payable is a sum certain within the meaning of the law, although it is to be paid: 1. With interest; or 2. By stated instalments; or 3. By stated instalments, with a provision that upon de- fault in payment of any instalment or of interest the whole shall become due ; or ?lf Negotiable Inst. Law, § 1675-1, subd. 5. 78 Dana v. San Francisco, 19 Cal. 490 (county scrip or warrants) ; Camp V. Knox Co., 71 Tenn. (3 Lea) 199; People v. Supervisors, 11 Cal. 170, where it was held that a county auditor cannot give to a county warrant "the form and qualities" of a bill of exchange. 79 Mayor v. Ray, 86 U. S. (19 Wall.) 468, 22 Law. Ed. 164. See, also, Police Jury v. Britton, 82 U. S. (15 Wall.) 566, 21 Law. Ed. 251; State v. Cook, 43 Neb. 318, 61 N. W. 693. §40 SUM CERTAIN. 55 4. With exchange, whether at a fixed rate or at the cur- rent rate ; or 5. With costs of collection or an attorney's fee, in case payment shall not be made at maturity. § 40. But a provision for the payment of taxes or charges ren- ders the sum payable uncertain. An instrument, to be negotiable, must contain a promise or order to pay a sum ''certain."^'* This provision is elucidated by another stating when the sum payable is a sum certain within the meaning of the act.^^ Provision for interest. The provision of the negotiable instruments act that the sum payable is a sum certain, although it is to be paid with interest,^^ is in accordance with the common law. It is usual to provide for payment of interest in promissory notes, and there is no reason why the notes should not still be negotiable if the provisions for interest state a fixed rate for a definite time. A provision for payment of interest on interest to maturity ,^^ or even for usurious interest,^* does not render a note non-negotiable. But a note pay- so Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.. Or.. Pa., Tenn.. Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1). A note payable to an insurance company for "$271.25, with such addi- tional premium as may arise on policy No. 50, issued at the Calais agency," is not negotiable. Dodge v. Emerson, 34 Me 96. See, also, Cushman v. Haynes, Zl Mass. (20 Pick.) 132. An order to pay $300 or what may be due on a specified savings bank book is not negotiable. National Sav. Bank v. Cable, 73 Conn. 568, 48 Atl. 428. 81 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 2); Ariz. (§ 3305); III. (§ 2); Kan. (§ 9).; Md. (§ 21); Mich. (§ 4); Neb. (§ 2); N Y. (§ 21); Ohio (§ 3171a); R. I. (§ 9); Wis. (§ 1675-1). 8- Subdivision 1, section negotiable instruments laws last cited. 83 Gilmore v. Hirst, 56 Kan. 626, 44 Pac. 603. 84 Goodin V. Buhler, 57 Mo. App. 63. 56 ESSENTIALS OF NEGOTIABILITY. §40 able "with interest the same as savings banks pay"^^ jg ^ot nego- tiable; nor is one which is payable on or before two years, witli interest at a fixed rate, but which provides that it shall not draw interest if paid within one year.^^ A note providing for a fixed rate of interest if it is paid at maturity, but at a greater rate if not so paid, is negotiable.^'' Instrument payable in instalments. An instrument otherwise negotiable is not rendered non-nego- tiable by a provision for payment in s-tated or definite instal- ments.^^ It has even been held that a promise to pay a certain sum to a corporation in such instalments as its directors may re- quire is negotiable,^^ on the theory that the instalments are in such case payable on demand. But a promise to pay "at such times and in such articles as the payee may need for her sup- port" is not negotiable.^" 85 Whitwell V. Winslow, 124 Mass. 343. 86 Lamb v. Storey, 45 Mich. 488, 8 N. W. 87. s^Towne v. Rice, 122 Mass. 67; Crump v. Berdan, 97 Mich. 293, 56 N. W. 559, 37 Am. St. Rep. 345; HoUinshead v. John Stuart & Co., 8 N. D. 35, n N. W. 89, 42 L. R. A. 659, and cases cited. In Minnesota the provision for additional interest after maturity is re- jected as a penalty. Smith v. Crane, 33 Minn. 144, 22 N. W. 633, 53 Am. Rep. 20. Also in South Dakota. Merrill v. Hurley, 6 S. D. 592, 62 N. W. 958, 55 Am. St. Rep. 859, distinguishing Hegeler v. Comstock, 1 S. D. 138, 45 N. W. 331, 8 L. R. A. 393. See, also, De Hass v. Roberts, 59 Fed. 853. A stipulation on the margin of a note that it is to be "discounted at 12 per cent, if paid before maturity" renders the note uncertain as to the amount payable and destroys negotiability. Naticmal Bank of Commerce V. Feeney, 12 S D. 156, 80 N. W. 186, 76 Am. St. Rep. 594, 46 L. R. A. 732. 88 Subdivision 2, sections negotiable instruments laws last cited. See, also, Van Buskirk v. Day, 32 111. 260; Ewer v. Meyrick, 55 Mass. (1 Cush.) 16; Wright v. Irwin, ZZ Mich. 32; Chase v. Behrman, 10 Daly (N. Y.) 344; Chase v. Senn, 13 N. Y. Supp. 266. But see Chase v. Kel- logg, 13 N. Y. Supp. 351. 8« White V. Smith, 11 111. 351, 20 Am. Rep. 251. See, also. President, etc, of Goshen & Minisink Turnpike Road v. Hurtin, 9 Jol'ns (N. Y.) 217. 6 Am. Dec. 211; Washington County Mut. Ins to. v. Miller, 26 Vt 11. aoCorbitt V Stonemetz, 15 Wis. 170, 186. §40 SUM CERTAIN. 57. Same — Efifect of provision that def^iilt shrJl hu.'-tsn maturity". Where an instrument is otherwise negotiable, it is not rendered non-negotiable by a provision for payment by stated instalments, with a further provision that, on default in payment of any in- stalment, or of interest, the whole shall become due.^^ This pro- vision is illustrated by a case in which it was held that the nego- tiability of a note which Avas one of a series, and referred to a contract, was not destroyed by a provision in the contract that the whole series should become payable at the option of the payee on default in payment of any one of the notes.'^ But a provision that the whole amount shall become due whenever the payee deems himself insecure ^^ renders a note non-negotiable. So, also, it has been held that a note payable in instalments is made non- negotiable by a provision that the whole amount shall become due on default of any payment, and that the holder could collect the same, with ten per cent for expenses, or could sell the property for which the note was given, and that, if there was any defi- ciency after sale, the maker would pay it on demand.^* Under this provision it has also been held that a note for a specified sum and payable at a certain future date is negotiable, though it pro- vides that the holder may declare the whole amount due on de- 91 Subdivision 3, same sections of negotiable instruments laws as last above cited. Hollinshead v. John Stuart & Co., 8 N. D. 35, 11 N. W. 89, 42 L. R. A. 659, citing Chicago R. Equipment Co. v. Merchants' Bank, 136 U. S. 268, 34 Law. Ed. 349; Merrill v. Hurley, 6 S. D. 592, 62 N. W. 958, 55 Am. St. Rep. 859; Wilson v. Campbell, 110 Mich. 580, 68 N. W. 278, 35 L. R. A. 544; Ernst v. Steckman, 74 Pa. 13, 15 Am. Rep. 542; Cisne v. Chidester, 85 111. 523; Walker v. Woollen, 54 Ind. 164, 23 Am. Rep. 639; De Hass v. Roberts, 59 Fed. 853. 92 Markey v. Corey, 108 Mich. 184, 66 N. W. 493, 62 Am. St. Rep. 698, Z(i L. R. A. 117. 93 Smith V. Marland, 59 Iowa, 645, 13 N. W. 852; First Nat. Bank v. Bynum, 84 N. C. 24, 37 Am. Rep. 604. Contra, see Heard v. Dubuque County Bank, 8 Neb.' 10, 30 Am. Rep. 811. 94 W. W. Kimball Co. v. Mellon, 80 Wis. 133, 48 N. W. 1100. 58 ESSENTIALS OF NEGOTIABILITY. §40 fault in payment of any instalment of interest or failure to com- ply with any of the conditions of a securing mortgage.®* Provision for exchang'e. The negotiable instruments laws have taken a stand appar- ently against the weight of authority by providing that the sum payable is certain, though the instrument is payable ''with ex- change, whether at a fixed rate or at the current rate."^^ In- struments with such provisions have heretofore, in most jurisdic- tions, been considered as non-negotiable.^'^ In the definitions of a promissory note or bill of exchange, it is generally, if not al- ways, stated that the amount necessary to discharge it must be ascertainable from the face of the paper itself, without having to refer to any extrinsic evidence. Construing this definition lit- erally, it must be admitted that the instruments sanctioned by the statute do not strictly fall within it, for, of course, extrinsic evidence must be resorted to in order to ascertain the rate of ex- 95 Thorp V. Windeman, 123 Wis. 149, 101 N. W. 417, 107 Am. St. Rep. 1003. See, also, Stark v. Olson, 44 Neb. 646, 63 N. W. Z7\ Merrill v. Hur- ley, 6 S. D. 592, 62 N. W. 958, 55 Am. St. Rep. 859; Phelps v. Sargent, 69 Minn. 118, 71 N. W. 927; American Nat. Bank v. American Wood- Paper Co., 19 R. I. 149, 32 Atl. 305, 61 Am. St. Rep. 746, 29 L. R. A. 103. See, also, cases cited in note 91, supra. 96 Subdivision 4, sections of negotiable instruments law last above cited. The negotiable instruments laws change the rule m D. C, Iowa, N. C, Wis. See Russell v. Russell, 8 D. C. (1 McArthur) 263; First Nat. Bank V. Bynum, 84 N. C. 24; Morgan v. Edwards, 53 Wis. 599, 11 N. W. 21, 40 Am. Rep. 365; First Nat. Bank of Stillwa-ter v. Larsen, 60 Wis. 206, 19 N. W. 67, 40 Am. Rep. 781; Peterson v. Stoughton State Bank, 78 Wis. 113, 47 N. W. 368; Culbertson v. Nelson, 93 Iowa, 187, 61 N. W. 854, 27 L. R. A. 222. 97 Windsor Sav. Bank v. McMahon, 38 Fed. 283, 3 L. R. A. 192; Hughitt V. Johnson, 28 Fed. 865; Culbertson v. Nelson, 93 Iowa, 187, 57 Am. St. Rep. 266, 27 L. R. A. 222; Read v. McNulty, 12 Rich. Law (S. C.) 445. Provision is for "exchange and costs of collection." Second Nat. Bank of Aurora v. Basuier, 12 C. C. A. 517, 65 Fed. 58; Nicely v. Commercial Bank, 15 Ind. App. 563, 44 N. E. 563. For exchange on a place different from the place of payment. Read v. McNulty, 12 Rich. Law (S. C.) 445; Flagg v. School Dist. No. 70, 4 N. D. 30, 58 N. W. 499, 25 L. R. A. 363. But an instrument payable at the place where it is drawn is negotiable, §40 SUM CERTAIN. 59 change at a given time between Uxo places.^^ However, the rea- son and purpose of the rule that the sum to be paid must be cer- tain is that the parties to the instrument may know the amount necessary to discharge it, without investigating facts not within the general knowledge of every one, and which may be subject to more or less uncertainty, or more or less under the influence or control of one or another of the parties to the instrument. The provision for the payment of the current rate of exchange be- tween the place of payment and some other place is not within the reason of this rule, or subject to the evils or inconveniences which it was designed to prevent. "While the rate of exchange is not always the same, and while it is technically true that resort must be had to extrinsic evidence to ascertain what it is, yet the current rate of exchange between two places at a particular date is a matter of common commercial knowledge, or at least easily ascertainable by any one, so that the parties can always, without difficulty, ascertain the exact amount necessary to discharge the paper. It would seem, therefore, that within the spirit of the rule requiring precision in the amount to be paid, a provision for the payment of the current rate of exchange in addition to the prin- cipal amount named does not introduce such an element of un- certainty as deprives the instrument of the essential qualities of a promissory note.^^ Provision for costs or attorneys' fees. Negotiability is not destroyed by a provision in the instru- ment for payment of costs of collection or an attorney's fee in case payment shall not be made at maturity.'"". The courts in though it provides for exchange, the provision in such case being nuga- tory. Hill V. Todd, 29 111. 101; Christian County Bank v. Goode, 44 Mo. App 129; Orr v. Hopkins, 3 N. M. 45. 1 Pac. 181. 98 Hastings v. Thompson, 54 Minn. 1S4, 55 N. W. 968, 40 Ana. St. Rep. 315, 21 L. R. A. 178. 99 Hastings v. Thompson, 54 Minn. 184, 55 N. W. 968, 40 Am. St. Rep. 315, 21 L. R. A. 178. 100 Subdivision 5, same sections of negotiable instruments laws as last above cited. McCornick v. Swem [Utah] 102 Pac. 626; Pirst Xa.L Bank v. Miller, 139 Wis. 126, 120 N. W. 820. 60 ESSENTIALS OF NEGOTIABILITY. - § -10 the various states have been nearly evenly divided on the ques- tion of the negotiability of instruments with such provisions. If the weight of authority can be said to be one way, it probably leans toward the rule as stated here.^°^ The federal courts have uniformly held that provisions for costs of collection and attor- neys' fees do not destroy negotiability.^"^ Where the provision for an attorney's fee is void as a provision for a penal ty,^°^ or is 101 That such instruments are negotiable has been decided in the fol- lowing cases: Louisville Banking Co. v. Gray, 123 Ala. 251, 26 So. 205, 82 Am. St. Rep. 120; First Nat. Bank v. Slaughter, 98 Ala. 602, 14 So. 545, 39 Am. St. Rep. 88; Stapleton v. Louisville Banking Co., 95 Ga. 802, 23 S. E. 81; Jones v. Crawford, 107 Ga. 318, 33 S. E. 51, 45 L. R. A. 105; Dorsey v. Wolfif, 142 111. 589, 32 N. E. 495, 34 Am. St. Rep. 99, 18 L. R. A. 428; Proctor v. Baldwin, 82 Ind. 370; Shenandoah Nat. Bank v. Marsh, 89 Iowa, 273, 56 N. W. 458, 48 Am. St. Rep. 381; Gilmore v. Hirst, 56 Kan. 626, 44 Pac. 603; Clifton v. Bank of Aberdeen, 75 Miss. 929, 23 So. 394; Benn v. Kutzschau, 24 Or. 28, 32 Pac. 763; Oppenheimer v. Farm- ers' & Merchants' Bank, 97 Tenn. 19, 36 S. W. 705, 56 Am. St. Rep. 778, 33 L. R. A. 767; Second Nat. Bank v. Anglin, 6 Wash. 403, 33 Pac. 1056; Salisbury v. Stewart, 15 Utah, 308, 49 Pac. Ill, 62 Am. St. Rep. 934; Stadler v. First Nat. Bank, 22 Mont. 190, 56 Pac. 111. 74 Am. St. Rep. 600. That such instruments are not negotiable has been decided in the follow- ing cases: Adams v. Seaman, 82 Cal. 636, 23 Pac. 53, 7 L. R. A. 224. in which the provision considered was for a five per cent, fee on the accrued principal and interest in case of suit; Maryland Fertilizing & Mfg. Co. V. Newman. 60 Md. 584, 45 Am, Rep. 750; Cayuga County Nat. Bank v. Purdy, 56 Mich. 6. 22 N. W. 93; Altman v. Rittershofer, 68 Mich. 287, 36 N. \V 74, 13 .\m. St. Rep. .341; Jones v. Radatz, 27 Minn. 240, 6 N. W. 800; First N'ar. Bank v. Gay, 71 Mo. 627; First Nat. Bank v. Bynum, 84 N. C. 24, TH Am. Rep. 604; First Nat. Bank of Decorali v. Laughlin. 4 N. D. 391. 61 N. W. 473; Johnston v. Specr, 92 Pa. 227, Z1 Am. Rep. 675; First Nat. Bank of Stillwater v. Larsen, 60 Wis, 206, 19 N. W. 67, 50 Am. Rep. 365; Peter.son v. Stoughlon State Bank, 78 Wis. 113. 47 N. W. 368. It will he seen from the above decisions that the negotiable in- struments laws have affirmed the rule previously in force in Oregon. Ten- nessee, Washington, and Utah; but has changed the rule previously m force in Maryland, N'orth Carolina, North Dakota, Pennsylvania and Wis- consin. 102 Wilson Sewing Mach. Co. v. Moreno, 7 Fed. 806; Adams v. Adding- ton. 16 Fed. 89; Srhlesinger v. Arliue, 31 P'ed. 648; Farmers" Nat. Bank v. Sutton Mfg. Co., 3 C. C. A. 1, 52 Fed. 19t, 17 L. R. A. 595. 103 Boozer v. Anderson, 42 Ark. 167; Bullock v. Taylor, 3*9 Mich. 137. ^40 S'^^'^l fi^^^^ CERTAIN. 61 forbidden by statute/"* it does not destroy negotiability. The negotiable instruments law of North Carolina provides that noth- ing in the act shall allow enforcement of the provision for costs of collection or attorneys' fees, though the provision does not affect negotiability.i°5 -phe reason why the ordinary provision for an attorney's fee does not destroy negotiability is given by Magruder, J., in Dorsey v. Wolff, as follows: "The promise to pay the attorney's fee is a promise to do something after the note matures. It does not affect the character of the note before or up to the time of its maturity, either as to certainty in the amount to be paid, or fixedness in the date of payment, or defi- niteness in the description of the person to whom the payment is to be made."^°^ The court in this case states, however, that a provision for attorneys' fees so worded as to render the amount payable at maturity uncertain would destroy negotiability. The same reason is given in a leading Iowa case, where the court said: "When they (the notes in suit) matured, no inquiry was necessary to be made as to facts not apparent on the face of the notes, in order to fix the amount due. Recovery could have been liad upon the notes themselves, without other evidence. The agreement for the payment of attorneys' fees in no sense in- creased the amount of money payable when the notes fell due, and we are unable to see that it rendered tliat amount uncertain in the least degree." '^^ 33 Am. Rep. 356; Rixy v. Pearre, 89 Va. 113, IS S. E. 498. But see Ne- gotiable Inst. Law Va. (§ 2, subd. 5). 104 Chandler v. Kennedy, 8 S. D. 56, 65 N. W. 439, the statute involved being Laws 1889, c. 16, § 1. Conditional agreements for attorneys' fees are void in Indiana (Rev. St. 1881, § 5518), but unconditional stipulations for such fees are valid. Garver v. Pontious, 66 Ind. 191; Tuley v. McClung, 67 Ind. 10; Harvey V. Baldwin, 124 Ind. 59, 24 N. E. 347, 26 N. E. 222. The Indiana statute does render void an agreement to pay attorneys' fees on the implied con- dition that they shall be payable only in case of dishonor. Farmers' Nat. Bank v. Sutton Mfg. Co., 52 Fed. 191, 17 L. R. A. 595. 105 Negotiable Inst. Law, § 197. 106 Dorsey v. Wolff, 142 111. 589, 32 N. E. 395, 34 Am. St. Rep. 99, 15 L. R. A. 428. 107 Sperry v. Horr, 32 Iowa, 184. 62 ESSENTIALS OF NEGOTIABILITY. §40 Provision for payment of tsi^res or charges. The negotiable instruments laws do not expressly provide for instruments containing provisions for payment of taxes or char- ges; but, under the law merchant, which is to control in cases not provided for,^"® such provisions render an instrument non- negotiable.^°^ Thus, where a provision in a note was for the pay- ment of all taxes and charges that might be levied on the note, or on a mortgage which it secured, or on the principal or interest money, the instrument Vvas not negotiable.^^° Also, where a note referred to a mortgage which required payment of all taxes and assessments before the.y became delinquent, in default of which the note should become immediately due and payable, the note was not negotiable,^^^ though it has been held that where the maker of a note, negotiable on its face, executed at the same time a deed of trust to secure it, a covenant in such deed that, on default in payment of taxes by the grantor, the grantee might pay them, in which case the amount thereof should be added to the debt, the provision as to taxes did not render the amount un- certain.^12 § 41. The instrument must be payable in money, though it is immaterial that it designates the particular kind of cur- rent money in which payment is to be made. The requirement of the negotiable instruments laws that the promise shall be to pay a sum certain in "money" ^^^ is declara- tory of the law.i^* 108 See ante, § 4. 109 Walker v. Thompson, 108 Mich. 686, 66 N. W. 584; Carmody v. Crane, 110 Mich. 508, 68 N. W. 268; Howell v. Todd, Fed. Cas. No. 6,783. iioFarquhar v. Fidelity Ins. Co., Fed. Cas. No. 4,676. 111 Wistrand v. Parker, 7 Kan. App. 562, 52 Pac. 59. 112 Frost V. Fisher, 13 Colo. App. 322, 58 Pac. 872. 113 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304) ;J11. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1). 11* Hodsres V. Clinton, 1 N. C. 19; Fry v. Rousseau, 3 McLean, 106, Fed Cas. No. 5,141. §41 PAYABLE IN MONEY. 63 Instruments may be payable in particular kind of current money. The negotiable character of an instrument is not affected by the fact that it designates a particular kind of current money in which payment is to be made.^^^ Thus, an instrument is payable in money if payable in "pounds sterling," ^^^ or in "cash notes, "^^^ or in "gold dollars, "^^^ or in "Mex. silv. dollars;""^ but is not payable in money if payable in "bank stock, "^^^ or in "current bank notes," ^-' or in "current funds," ^^2 or in " cur- rency. "^^^ A note payable at New York "in New York funds, or their equivalent," is not negotiable because "the term 'New York funds,' it is presumed, may embrace stocks, bank notes, specie, and every description of currency which is used in com- mercial transactions."^-* But a note payable in "bank notes 116 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev.. N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); 111. (§ 6); Kan. (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25j; O'hio (§ 3171 e); R. I. (§ 14); Wis. (§ 1675-6). 116 King V- Hamilton, 12 Fed. 478. 117 See Ward v. Lattimer, 2 Tex. 245. lis Chrysler v. Renois, 43 N. Y. 209. 119 Hogue V. Williamson, 85 Tex. 553, 34 Am. St. Rep. 823, 20 L. R. A. 481. 120 Markley v. Rhodes, 59 Iowa, 57, 12 N. W. 775. 121 Little V. Phenix Bank, 7 Hill (N. Y.) 359; State v. Carpenting, 32 N. C. (10 Ired. Law) 58; Wolfe v. Tyler, 48 Tenn. (1 Heisk.) 313. So of a noite payable in "bank bills.'" Jones v. Fales, 4 Mass. 245; Childress V. Stnart, 7 Tenn. (Peck.) 276; Deberr}' v. Darnell, 13 Tenn. (5 Yerg.) 451, where an instrument payable in "North Carolina bank notes'" was held negotiable. 122 Jo.hnson v. Henderson. 76 N. C. 227; Lindsey v. McClelland. 18 Wis. 481. 506, 86 Am. Dec. 786; Wright v. Hart, 44 Pa. 454. Contra, see Bull v. Bank of Kasson, 123 U. S. 105, 31 Law. Ed. 97. Parol evidence is admissible to show that the parties intended to pay in money. Haddock v. Woods, 46 Iowa, 433. An instrument payable in "current funds" rnay be shown by evidence of custom to be payable in money. American Immigrant Co. v. Clark, 47 Iowa, 671. i23Ruidskoff V. Barrett, 11 Iowa, 172. Contra, see Butler v. Paine. 8 Minn. (Gil. 284) 324. 124 Hasbrook v. Palmer, 2 McLean, 10, Fed. Cas. No. 6.188, criticising Keith V. Jones, 9 Johns. (N. Y.) 120, and Judah t. Harris, 19 Johns. (N. Y.) 144. 64 ESSENTIALS OF NEGOTIABILITY, §41 current in the city of New York" has been held negotiable ; ^^ so, also, a note payable in "York State bills or specie." ^^e j^. struments payable in foreign money have been held negotiabie,^^" but one payable in New York "in Canada money" has been held non-negotiable.^2s Instruments payable in services or merchandise — Instruments payable in alterna,tive. Instruments payable in services,^^^ or in merchandise,^^° or in the alternative in money or merchandise, ^^^ or in money or bank stock,i^2 are not negotiable. Same — Warehouse receipts, ^/^i^ • f ^ Cp / An exception to the rule that' instruments payable in merchan- dise are not negotiable is found in the case of warehouse reeeii^ts which are negotiable in some states.^^^ Certainty as to Time of Payment. § 42. The instrument must be payable i^^i 1. On demand; or 2. At a fixed or determinable future time. 135 Keith V. Jones, 9 Johns. (N. Y.) 120. 126 Judah V. Harris, 19 Johns. (N. Y.) 144. 127 Sec Singer v. Stimpson, 8 Mass. 260. 12S Thompson v. Sloan, 23 Wend. (N. Y.) 71, 35 Am. Dec. 546. 129 Ransom v. Jones, 2 111. 291; Prather v. McEvoy, 8 Mo. 661; Quimby V. Meruitt, 30 Tenn. (11 Humph.) 439. isopeddicord v. Whittam, 9 Iowa, 471; Gushee v. Eddy, 77 Mass. (11 Gray) 502, 71 Am. Dec. 728; Coyle's Ex'r v. Satterwhite's Adm'r, 20 Ky. (4 T. B. Mon.) 124; Tibbets v. Gerrish, 25 N. H. 41, 57 Am. Dec. 30.7; Brown v. Richardson, 20 N. Y. 472; Rhodes v. Lindly, 3 Ohio, 51. 131 Thompson v. Gaylord, 3 N. C. 326; Looney v. Pinckston, 1 Tenn. 383: Lawrence v. Dougherty, 13 Tenn. (5 Yerg.) 435. i32 Alexander v. Oaks, 19 N. C. (2 Dev. & B. Law) 513. 133 See ante, § 34. 134 N eg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N C, N. D., Oki., Or., §4-1 TIME OF PAYMENT. 65 Instruments Payable on Demand. § 43. An instrument is payable on demand: 1. Where it is expressed to be payable on demand, or at sight, or on presentation; 2. In which no time for payment is expressed. § 44. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting or indorsing it, payable on demand. Instruments payable on demand, at sight, or on presentation. Instruments payable on demand, at sight, or on presentation, are payable on demand.^^^ A note is payable on demand when made payable at the maker's "convenience," ^^^ or ''at any time called for," ^37 or "on demand, with interest after four months, "^^^ or when made payable on the "first day of March," without nam- ing the year,^39 qj. when made payable "on demand, with interest within six months from date," '^° The majority of the negotiable instruments laws place "demand" and "at sight" paper on the same basis, and in those states where days of grace have been Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. f§ 1); Kan. (§ 8); Md. (§ 20); Mic^h. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1), 135 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 7); Ariz. (§ 3310); 111. (§ 7); Kan. (§ 14); Md. (§ 26); Mich. (§ 9); Neb. (§ 7); N. Y. (§ 26); Ohio (§ 3171 f); R. I. (§ IS); Wis. (§ 1675-7). 136 Colgate V. Buckingham, 39 Barb. (N. Y.) 177, where the instrument was payable at "such time or times as the directors required." Smithers V. Junker, 41 Fed. 101, 7 L. R. A. 264; Gaytes v. Hibbard, 5 Biss. 99, Fed. Cas. No. 5,287. 137 Bowman v. McChesney, 22 Grat. (Va.) 609. 138 Newman v. Kittelle, 30 Mass. (13 Pick.) 418. 139 Collins V. Trotter, 81 Mo. 275. iwjilson V. Hill, 70 Mass. (4 Gray) 316. See, also, Gove v. Downer, 59 Vt. 139, 7 Atl. 463. Opp. — Sel. — 5 66 ESSENTIALS OF NEGOTIABILITY. §44 abolished there is no practical difference between instruments payable on demand and those payable at sight.^" Instruments not stating time of payment. Instruments failing to state a time for payment are payable on demand. This is the rule of the law merchant '^^ and of the nego- tiable instruments laws.^^^ "Where no time of payment is given, parol evidence is admissible to show a contemporaneous oral agreement fixing the time."* Instruments issued, accepted, or indorsed when overdue. Where an instrument is issued, accepted, or indorsed when overdue, it is as regards the person so issuing, accepting, or in- dorsing, payable on demand."^ As to an indorsement after the paper is overdue, the rule here stated is the one in force in the federal "^ and in most of the state ^*'' courts. The indorsement after maturity is considered as the making of a new instrument •1« See post, § 186. i42Keyes v. Fenstermaker, 24 Cal. 329; Bacon v. Page, 1 Conn. 404; Green v. Drebilbis, 1 G. Greene (Iowa) 552; Porter v. Porter, 51 Me. 376; Herrick v. Bennet, 8 Johns. (N. Y.) 374; Ervin v. Brooks, 111 N. C. 358, 16 S. E. 240; Dodd v. Denny, 6 Or. 156; Messmore v. Morrison, 172 Pa. 300; Husbrook v. Wilder, 1 Pin. (Wis.) 643. 1*3 Subdivision 2, same sections of negotiable instruments laws as last above cited. McLeod v. Hunter, 29 Misc. 558, 61 N. Y. Supp. 73. 144 Horner v. Horner, 145 Pa. 258, 23 Atl. 441; Ross v. Espy, 66 Pa. 481, S Am. Rep. 394. 145 Same subdivision and sections of nego^tiable instruments laws as last above cited. 146 Cox's Adm'r v. Jones, 2 Cranch, C. C. 370, Fed. Gas. No. 3,303; Stewart v. French, 2 Cranch, C. C. 300, Fed. Gas. No. 13,427. 147 Branch Bank at Montgomery v. Gafifney, 9 Ala. 153; Jones v. Rob- inson, 11 Ark. 504, 54 Am. Dec. 212; Levy v. Drew, 14 Ark. 334; Beer v. Clifton, 98 Cal. 323, 32 Pac. 204, 35 Am. St. Rep. 172, 20 L. R. A. 327; Bishop v. Dexter, 2 Conn. 419; Graul v. Strutzel, 53 Iowa, 712, 6 N. W. 119, 36 Am. Rep. 250; Goodwin v. Davenport, 47 Me. 112, 74 Am. Dec. 478; Colt V. Barnard, 35 Mass. (18 Pick.) 260, 29 Am. Dec. 584; Van Hoesen v. Van Alstyne, 3 Wend. (N. Y.) 75, 79; Leavitt v. Putnam, 3 N. Y. Super. Ct. (1 Sandf.) 199; Bassenhorst v. Wilby, 45 Ohio St. 333, 13 § 47 TIME OF PAYMENT. 67 payable on deraand.^^^ But it has been held that, where an in- strument has been transferred after dislionor, the original de- mand on the maker and notice to the indorser inure to the benefit of subsequent holders, and they need not make demand or give notice anew.^*^ Payable at a Fixed or Determinable Future Time. § 45. An instrument is payable at a determinable future time, which is expressed to be payable : 1. At a fixed period after date or sight; or 2. On or before a fixed or determinable future time speci- fied therein; or 3. On or at a fixed period after the occurrence of a speci- fied event, which is certain to happen though the time of happening be uncertain. § 46. An instrument payable upon a contingency is not nego- tiable, and the happening of the event does not cure the defect. § 47. But an instrument payable at a fixed period after date or sight is negotiable, though it be payable before then on a contingency. Instruments payable at fixed period after date or sight. An instrument is payable at a fixed or determinable future time which is expressed to be payable at a fixed period after date or sight.^5° I'nder the law merchant, an instrument payable ''six N. E. 75; Smith v. Caro, 9 Or. 278; Tyler v. Young, 30 Pa. 143; Ro'ison V. Carroll. 90 Tenn. 90, 16 S. W. 66, 12 L. R. A. 724; Corwith v. Mor- rison, 1 Pin. (Wis.) 498. ]*8 Bishop V. Dexter, 2 Conn. 419; Coleman v. Dunlap, 18 S. C. 591; Moore V. Alexander, 63 A pp. Div. 100, 71 N. Y. Supp. 420. 149 French v. Jarvis, 29 Conn. 347. 150 ]S[eg. Inst. T.aws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., T.a., Mass., Mo., Mont., Nev., N. II., N. J., N. M., N. C. N. D., Ok'l.. Or., Pa., Tenn., Utah, Va.. Wash., W. Va., Wyo. (§ 4); Ariz. (§ 3307^; 111. 68 ESSENTIALS OF NEGOTIABILITY. §47 after date" is not so uncertain as to be void/^^ nor is one payable ** twenty-four after date,"^^^ and, under the nego- tiable instruments law, such instruments would be negotiable if there is anything on them from which the period of time intended can be ascertained. In accordance with this it has been held, under the act, that words ''Due Oct. 1" at the end of a bill should be construed to mean payable October 1st, and the bill be deemed payable at a fixed time and negotiable.^^^ A bill payable five days "after sight" is payable five days after acceptance, and not five days after presentment.^^* Provision for extension of time of payment. There is a conflict among the authorities as to whether, under the negotiable instruments act, a provision whereby all parties waive notice of an extension of time for payment renders the note non-negotiable or not.^^^ In the North Dakota case cited the note provided that "the makers and indorsers herein * * * consent that the time of payment may be extended without no- tice." The note was, by its terms, payable on or before the first of October, 1903. The court says: "To us it is clear that it has the same effect as though the note read 'on the 1st day of October, 1903, or thereafter on demand,' in which case there (§ 4): Kan. (§ 11); Md. (§ 23); Mich. (§ 6); Neb. (§ 4); N. Y. (§ 23); Ohio (§ 3171 c); R. I. (§ 12); Wis. (§ 1675-4). 151 Nichols V. Frothingham, 45 Me. 220, 71 Am. Dec. 539. See, also, Weems v. Parker, 60 111. App. 167, where it was held that "ninety after date" means 90 days after date. 152 Conner v. Routh, 7 How. (Miss.) 176, 40 Am. Dec. 59. i53Torpey v. Tebo, 184 Mass. 307, 68 N. E. 223 154 Mitchell V. Degrand, 1 Mason, 176, Fed. Cas. No. 9,661. 155 That it does. Union Stock Yard Nat. Bank v. Bolan, 14 Idaho, 87. 93 Pac. 508, 125 Am. St. Rep. 146. That it does not. Note being payable on or before a day named. First Nat. Bank v. Buttery (N. D.) 116 N. W, 341. The note contammg an un- qualified agreement on the part of the maker to pay on a certain date, its negotiability is not destroyed bj' a provision providing that sureties consent to an extension of the time of payment without notice Farmer, Thompson & Helseli v. Bank of Graettinger, 130 Iowa, 469, 107 N. W. 170 (not under negotiable instruments law). §47 TIME OF PAYMENT. 69 would be no question of its negotiability. * * * Tliis pro- vision seems to us to have been inserted to protect the holder against any release of indorsers or others, by an extension with- out their assent, and the word 'makers' is evidently included to prevent any misunderstanding or misconstruction of the contract or failure to distinguish between makers, indorsers, sureties, and any other parties who might be or become liable thereon under certain contingencies as makers. This phrase does not express an agreement to extend time, but leaves the matter of extension optional with the holder, and not obligatory upon him, and the note on its face fixes the time when it becomes due. In this respect it must be distinguished from a provision to the effect that the time of payment shall be extended indefinitely, in which case the uncertainty of the time renders the instrument non- negotiable. " ^^^ Instruments payable "on or before" a fixed or determinable fu- ture time specified therein. Paper payable "on or before" a fixed date is payable on such date, and is negotiable under both the law merchant ^^"^ and the negotiable instruments laws.^^^ The same rule applies to paper payable "on or by the first of March, ' ' ^^9 or simply " by a certain date." 160 Instruments payable on or at a fixed period after event certain. Instruments payable on or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time 156 First Nat. Bank v. Buttery (N. D.) 116 N. W. 341. For case deal- ing with "indefinite extension," see Woodbury v. Roberts, 59 Iowa, 348, 13 N. W. 312, 44 Am. Rep. 685. 157 Mattison v. Marks, 31 Mich. 421, 18 Am. Rep. 197; First Nat. Bank of Springfield v. Skeen, 101 Mo. 683, 14 S. W. 732, 11 L. R. A. 748; Jordan V. Tate, 19 Ohio St. 586. 15S Subdivision 2, same sections of negotiable instruments laws as last above cited. See Lowell Trust Co. v. Pratt, 183 Mass. 379, 67 N. E. 363. 159 See Massie v. Belford, 68 111. 290. 160 Preston v. Dunham, 52 Ala. 217. 70 ESSENTIALS OF NEGOTIABILITY. §47 of happening be uncertain, are sufficiently certain as to time.^^^ The death of the maker of the note being certain to take place, a note promising to pay a certain sum, "to be allowed at my de- cease, "^^2 ig negotiable, and so is one payable "60 days after my death; "1^2 ^Iso one payable "on demand after my decease." ^^* But instruments payable when the person shall become of age,^^^ or be elected to a certain office,^^^ or when a certain estate shall be settled up,^^'' are not negotiable. Instruments payable on contingency. Instruments payable on a contingency are not certain, and hence are not negotiable, and the happening of the contingency does not cure the defect. ^^^ Instruments of this kind are illus- trated by the last three illustrations used in the preceding sec- tion, and the happening of the contingency in any of those cases, i. e., the becoming of age, or the election to the office, or the set- tling up of the estate, would not cure the defect, or render the instrument negotiable from that time.^^^ Instruments payable at fixed period after date or sight, though payable before then on a contingency. It has been a recognized rule that instruments payable at a fixed period after date or sight, though payable before then on 161 Subdivision 3, same sections of negotiable instruments laws as last above cited. 162 Martin v. Stone, 67 N. H. 367, 29 Atl. 845. 163 Crider v. Shelby, 95 Fed. 212. 16-t Bristol V. Warner, 19 Conn. 7. See, also, Carnwright v. Gray, 127 N. Y. 92, 27 N. E. 835, 24 Am. St. Rep. 424, 12 L. R. A. 845; Hegeman v. Moon, 131 N. Y. 462, 30 N. E. 487. 165 Kelley v. Hemniingway, 13 III. 604, 56 Am. Dec. 474, distinguishing Goss V. Nelson, 1 Burrows, 227. 166 Cooper V. Brewster, 1 Minn. (Gil. 73) 94. 167 Husband v. Epling, 81 111. 172, 25 Am. Rep. 273. 168 Same subdivisions and sections of negotiable instruments laws as last above cited. 169 Kelley v. Hemm.ingway, 13 111. 604, 56 Am. Dec. 474. See, also, Chi- cago Railway Equipment Co. v. Merchants' Bank, 136 U. S. 268, 34 Law. Ed. 349. §49 WORDS OF NEGOTIABILITY. 71 a contingency, are sufficiently certain to be negotiable. Thus, one payable on a fixed day, "or when he completes" a certain build- ing, is negotiable^'** Also an instrument payable at a fixed time after date, "or before, if realized out of the sale" of certain property.^''^^ The Wisconsin negotiable instruments law specially provides for instruments of this class and makes them negotia- ble.^''^ No express provision for them is made in the negotiable instruments law as adopted in the other states. Necessity of Words of Negotiability. § 48. An instrument to be negotiable must be payable to "or- der" or "bearer" or contain words of like import. ,r^^ . § 49. Qualification. — The indicia of neg-otiability may be added by indorsement so as to render the instrument negotiable from that time. It is a fixed rule of the law merchant that an instrument, to be negotiable, must be payable to order or to bearer, or contain words of like iraport,^"^ and the negotiable instruments laws have adopted the rule.^'''* Under this rule it is clear that an instrument 170 Stevens v. Blunt, 7 Mass. 240. See, also, Goodloe v. Taylor, 10 N. C. (3 Hawks) 458. 171 Walker v. Woollen, 64 Ind. 164; Noll v. Smith, 64 Ind. 511, 31 Am. Rep. 131; Charlton v. Reed, 61 Iowa, 166, 16 N. W. 64, 47 Am. Rep. 808. Bitt see Stultz v. Silva, 119 Mass. 137, where an instrument promising to pay a certain sum in a year and a half, "or sooner, at the option of the mortgagor," was held to be non-negotiable. 172 Negotiable Inst. Law, § 1675-4, subd. 4. Mortgage note for a speci- fied sum and payable on a certain future date is negotiable, though it provides that on default in interest or failure to comply with any of the conditions of the mortgage then the entire principal should, at the option of the mortgagee, become due and payable. Thorp v. Windeman, 123 Wis. 149, 101 N. W. 417, 107 Am. St. Rep. 1053. 173 Backus V. Danforth, 10 Conn. 297; Yingling v. Kohlhass, 18 Md. 148; Maule v. Crawford, 14 Hun (N. Y.) 193; Albright v. Griffm, 78 Ind. 182; Carruth v. Walker, 8 Wis. 103. 17* Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., 72 ESSENTIALS OF NEGOTIABILITY. §49 payable to a named payee "only" is not negotiable/'''^ nor is one payable to named payees ' ' or their collector. ' ' ^'^ A bill of ex- change not containing the words "order or bearer," though not negotiable, is valid.^^^ Negotiable words may be supplied by indorsement. "Where an instrument is non-negotiable for lack of the words "order" or "bearer," an indorsement supplying the words makes the instrument negotiable from that time.^^^ "What Instruments Payable To Order. § 50. The instrument is payable to order when it is drawn pay- able to the order of a specified person or to him or his order. It may be drawn to the order of ; 1 A payee who is not maker, drawer or drawee; or 2. The drawer or maker; But a note drawn to the maker's own order is not negotiable until indorsed by him; Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§§ 1, 184); Ariz. (§§ 3304, 3487); 111. (§§ 1, 183); Kan. (§§ 8, 191); Md. (§§ 20, 203); Mich (§§ 3, 186); Neb. (§§ 1, 173); N. Y (§§ 20, 320); Ohio (§§ 3171, 3177 u); R. I. (§§ 9, 192); Wis. (§§ 1675-1, 1684). Gilley v. Harrell, 118 Tenn. 115, 101 S, W. 424; Westberg v. Chicago Lumber & Coal Co., 117 Wis. 589, 94 N. W. 572. This changes the rule in Colorado (see Rev. St. c. 1084, and Tliackaray v. Hanson, 1 Colo. 365), and in North Carolina (see Code, § 41). In North Carolina ri'he section reads "Must be payable to a specified person or bearer'' The 'Aords "specified person" would seem to add nothing to the section because m- cluded in Negotiable Inst. Act, § 1. See post, § 50. Bonds payable to bearer held negotiable instruments. Parsons v. Ulica Cement Mfg. Co., 80 Conn 58, 66 Atl. 1024 175 Hackney v. Jones, 22 Tenn. (3 Humph.) 612. See, also, Backus v. Danforth, 10 Conn. 297 176 Noxon V. Smith, 127 Mass. 485. 177 Mehlberg v. Tisher, 24 Wis. 607. 178 Carruth v. Walker, 8 Wis. 103; Brenzer v. Wightman, 7 Watts & S. (Pa.) 264; Bay v. Freazer, 1 Bay (S. C.) 66. §50 INSTRUMENTS PAYABLE TO ORDER. 73 3. The drawee; or 4. Two or more payees jointly; or 5. One or some of several payees ; or 6. The holcier of an cfFice for the time being. Instruments payable to the order of payee who is not maker or drawer. An instrument is paj'able to order when it is drawn payable to the order of a specified person, or to him or his order.^^^ It may be drawn payable to the order of a payee who is not the maker or drawer or drawee.^^° Instruments payable to the order of maker or drawer. The negotiable instruments laws provide that an instrument payable to the order of the drawer or maker is payable to order.^^^ This rule, when taken with the rule that a note payable to the order of the maker is not complete until indorsed by him,^^'^ chan- ges the law, for heretofore instruments payable to the order of 179 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 8); Ariz. (§ 3311); 111. (§ 8); Kan. (§ 15); Md. (§ 27); Mich. (§ 10); Neb. (§ 8); N. Y. (§ 27); Ohio (§ 3171 g); R. I. (§ 16); Wis. (§ 1675-8). 180 Subdivision 1, same sections of negotiable instruments laws as last above cited. 181 Subdivision 2, same sections of negotiable instruments laws as last above cited. 182 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va.. Wyo. (§ 184); Ariz. (§ 3487); 111. (§ 183); Kan. (§ 191); Md. (§ 203); Mich. (§ 186); Neb. (§ 183); N. Y. (§ 320); Ohio (§ 3177 v); R. I. (§ 192); Wis. (§ 1684). A note payable to the order of the maker is not valid until after nego- tiation. Roach V. Sanborn Land Co., 135 Wis. 354, 115 N. W. 1102; Murphy v. Schooh, 135 111. App. 550; Sherman v. Goodwin (Ariz.) 89 Pac. 517. 74 ESSENTIALS OF NEGOTIABILITY. §50 the maker were payable to bearer ^^^ ^nd passed by delivery .^s* Under the negotiable instruments act, delivery by the payee, as well as indorsement by him, is essential to the valid existence of such instrument.^^ Instruments payable to the order of drawee. Instruments payable to the order of the drawee are now ex- pressly made payable "to order" and are negotiable.^^^ Instruments payable to the order of two or more payees jointly. Instruments payable to the order of two or more payees jointly are payable to order,^^^ provided the payees are all named or oth- erwise indicated with reasonable certainty .^^^ e 183 Irving Nat. Bank v. Alley, 79 N. Y. 536; Bank of Winona v. Wofford, 71 Miss. 711, 14 So. 262; Main v. Hilton, 54 Cal. 110. As against th maker, such instruments are by statutes in the following states made equivalent to instruments payable to bearer: Cal.' (Civ. Code, §§ 8101, 8102); Minn. (Gen. St. 1894, § 2236). Statutes of like import in the following states are repealed by the Ne- gotiable Instruments Laws: Idaho (Rev. St. § 3446); Mich. (How. Am. St. § 1580); Mo. (Rev. St. § 735); Or. (Ann. Laws, §§ 3188, 3191); Nev. (Gen. St. § 4885); N. Y. (Rev. St. pt. 2, c. 4, tit. 2, § 5) ; N. D. (Rev. Code, §§ 4864, 4865); Wis. (Sanb. & B. Ann. St. § 1579); Wyo. (Laiws 1888, c. 70, art. 2, § 13). In some states the rule as to the necessity of the maker's indorsement on an instrument payable to his order is the same as that established by the negotiable instruments laws. Lea v. Branch Bank at Mobile, 8 Port. (Ala.) 119; Lapeyre v. Weeks, 28 La. Ann. 664; Heywood v. Wingate, 14 N. H. 7Z. 1S4 Bank of Lassen County v. Sherrer, 108 Cal. 513, 41 Pac. 415; O'Conor V. Clarke (Cal.) 44 Pac. 482; Irving Nat. Bank v. Alley, 79 N. Y. 536; Jones V. Shapera, 6 C. C. A. 423, 57 Fed. 457; Thompson v. Perrine, 106 U. S. 589, 27 Law. Ed. 298. i85Stouffer V. Curtis, 198 Mass. 560, 85 N. E. 180; Sherman v. Goodwin (Ariz.) 89 Pac. 517. 186 Cited in note 179, ante. 187 Subdivision 4, same sections of negotiable instruments laws as last above cited. An instrument payable to "steamboat J and owners" has been held negotiable. Moore v. Anderson, 8 Ind. 18. See, also. Wood V. Wood, 16 N. J. Law, 428. 188 A note payable to a named payee "et al." is not negotiable.' Gordon § 50 INSTRUMENTS PAYABLE TO ORDER. 75 Instruments payable to the order of one or some of several payees. Instruments payable to the order of one or some of several payees have heretofore been considered non-negotiable, e. g., a note payable to "A. or B.,"^^^ or one payable to named payees "or their collector ;" i^° but now, under the negotiable instru- ments laws, such instruments are seemingly made negotiable.^^^ Instruments payable to the order of the holder of an ofl&ce. An instrument payable to the order of the holder of an office for the time being is now payable "to order" and is negotiable.^^ An instrument expressly payable to a trustee has hitherto been deemed non-negotiable. Thus it has been held that a note pay- able to a trustee or his order, and afterwards sold by him to a bank, was not "commercial paper," and that, as between the bank and the cestui que trust, the former was charged with notice that the transfer was in fraud of the trust.^^^ In New York, however, an instrument payable to the trustees of a corporation, "or their successors in office, or order," is negotiable.^''^ Notes payable to sheriffs, which show that they were given for the price of prop- erty sold at a judicial sale, carry on their face notice that such V. Anderson, 83 Iowa, 224, 49 N. W. 86, 32 Am. St. Rep. 302, 12 L. R. A. 483. 189 Carpenter v. Farnsworth, 106 Mass. 561, 8 Am. Rep. 360; Musselman V. Oakes, 19 111. 81, 68 Am. Dec. 583. 190 Noxon V. Smith, 127 Mass. 485. 191 Subdivision 5, same sections of negotiable instruments laws as last above cited. See ante, § 8, and post, § 54, which deal with the provision which provides that a bill of exchange may be addressed to "two or more drawees jointly * * * but not to two or more drawees in the alter- native or in succession." 192 Subdivision 6, same sections of negotiable instruments laws as last above cited. 193 Third Nat. Bank v. Lange, 51 Md. 138, 34 Am. Rep. 304. See, also, MrMasters v. Dunbar, 2 La. Ann. 577, in which it was held, following Nicholson v. Chapman, 1 La. Ann. 223, that a note payable on its face to the order of a tutor of minors carries notice that the obligation be- longs to the mipors. 19* Davis V. Garr. 2 Seld. (N. Y.) 124. 76 ESSENTIALS OF NEGOTIABILITY. §51 officers took in their official capacity /^^ but the mere word "Sher- iff" or the designation "Shff."' does not show that the money was payable to the sheriff in such capacity .1^'' The rule as here stated accords with that of the law merchant. In England, however, the rule has been changed so that "a bill is payable to order which is expressed to be so payable, or which is expresed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be trans- ferable. " i'^7 "What Instruments Payable To Bearer. § 51. The instrument is payable to bearer: 1. When it is expressed to be so payable; or 2. Where it is payable to a person named therein or bear- er; or 3. When it is payable to the order of a fictitious or non- existing person, and such fact was knovTn to the per- son making it so payable ; or 4. When the name of the payee does not purport to be the name of any person; or J 5. When the only or last indorsement is an indorsement in blank. Instruments expressly payable to bearer. It seems axiomatic to state that instruments expressly made payable to bearer, or to a person named therflin, "or bearer. ' are payable to bearer, yet the negotiable instruments laws, to he ex- plicit, enumerate instruments so payable as bearer paper.^°^ i95Ranney v. Brooks, 20 Mo. 105; Renshaw v. Wills, 38 Mo. 201, 196 Powell V. Morrison, 35 Mo. 244; Fletcher v. Schaumburg, 41 Mo. 50 197 Bills of Exchange Act. 198 Ne-g. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky,, La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 9); Ariz. (§ 3312): 111. (§ 9); Kan. (§ 16); Md. (§ 28); Mich. (§ 11); Neb. (§ 9); N. Y. (§ 28); Ohio r§ 3171 h); R. I. (§ 17); Wis. (§ 1675-9). § 51 INSTRUMENTS PAYABLE TO BEARER. 77 Instruments payable to fictitious or nonexistent persons. Bills or notes made payable to the order of a fictitious or non- existent person, if such fact was known to the person making it so payable, are payable to bearer.^^ Notes payable to fictitious persons have generally been treated as payable to bearer,-''° and the negotiable instruments laws, by using the word "instru- ment," include bills of exchange. Hitherto a bill payable to the order of a fictitious person could not be treated as payable to bearer unless the fact that the paj'ee was fictitious was known to the acceptor as well as to the drawer.-*'^ The doctrine that a check or bill made payable to a fictitious person is payable to bearer, and negotiable without indorsement, if the fictitious char- acter of the payee was known to the parties, originated in Eng- land; and in each of the cases holding the doctrine the decision was based on the fact that the acceptor knew, at the time of his acceptance, that the instrument was payable to a fictitious per- gQj2_202 ^^ common law the rule was uniformly based upon the law of estoppel and applied only against the parties who at the time they became liable on the bill or note were cognizant of the fictitious character of the supposed payee.^°^ And this is prac- tically the rule adopted by the negotiable instruments law of this A note payable to a certain person, or "holder," etc., is payable to bearer. Putnam v. Crymes, 1 McMul. (S. C.) 9, 36 Am. Dec. 250. Cer- tificates of deposit payable on return of certificate properly indorsed. Kavanagh v. Bank of America, 239 111. 404, 88 N. E. 171. 199 Subdivision 3, same sections of negotiable instruments laws as last above cited. 200 Same subdivisions and sections of negotiable instruments laws as las.t above cited. Lane v. Kreckle, 22 Iowa, 399; Anderson v. Dundee State Bank, 20 N. Y. Supp. 511; Forbes v. Espy, 21 Ohio St. 474. And see Earns worth v. Drake, 11 Ind. lOL 201 Hunter v. Blodgett, 2 Yeates (Pa.) 480. But see 1 Daniel, Nego- tiable Inst., p. 118. 202Tatlock V. Harris, 3 Term. R. 174, 180; Vere v. Lewis, 3 Term. R. 182; Minet v. Gibson, 3 Term. R. 481; Gibson v. Minet, 1 H. Bl. 569; Gib- son V. Hunter, 2 H. Bl. 187. 203Vagliona Bros. v. Bank of England, 22, Q. B. Div. 260. 78 ESSENTIALS OF NEGOTIABTLTTY. § 51 country .20* If the drawer or maker of an instrument does not know that the payee is a fictitious or nonexistent person, and does not intend to make the paper payable to such person, paper payable to the order of such person cannot be treated as payable to bearer, for the intention of the maker or drawer is the test,205 204Shipman v. Bank of State of New York, 126 N. Y. 318, 27 N. E. 371, 22 Am. St. Rep. 821, 12 L. R. A. 791; Armstrong v. Pomeroy Nat. Bank, 46 Ohio St. 512, 22 N. E. 866, 15 Am. St. Rep. 655, 6 L. R. A. 625; Boles V. Harding, 201 Mass. 103, 87 N. E. 481; Harmon v. Old Detroit Nat. Bank, 153 Mich. 1\ 15 Det. Leg. N. 376, 116 N. W. 617, 126 Am. St. Rep. 467, 17 L. R. A. (N. S.) 514; Chism v. First Nat. Bank, 96 Tenn. 641, 36 S. W. 387, 54 Am. St. Rep. 863, 32 L. R. A. 778; Murphy v. Metropolitan Nat. Bank, 191 Mass. 159, 11 N. E. 693, 114 Am. St. Rep. 595; Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26, 85 N. E. 829, afg. 51 Misc. 103, 100 N. Y. Supp. 740, and 118 App. Div. 907, 103 N. Y. Supp. 1141; Phillip V. Mercantile Nat. Bank, 140 N. Y. 556, 35 N. E. 982, 23 L. R. A. 584, 37 Am. St. Rep. 596; Snyder v. Corn Exch. Nat. Bank, 221 Pa. 599, 70 Atl. 876. 205Shipman v. Bank of the State of New York, 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821; Armstrong v. Pomeroy Xat. Bank, 46 Ohio St. 512, 22 N. E. 866, 6 L. R. A. 625, 15 Am. St. Rep. 655; Boles' V. Harding, 201 Mass. 103, 87 N. E. 481; Harmon v. Old Detroit Nat. Bank, 153 Mich. 73, 116 N. W. 617, 126 Am. St. Rep. 467, 17 L. R. A. (N. S.) 514; Chism v. First Nat. Bank, 96 Tenn. 641, 36 S. W. 387, 32 L. R. A. 778, 54 Am. St. Rep. 863; Murphy v. Metropolitan Nat. Bank, 191 Mass. 159, 11 N. E. 693, 114 Am. St. Rep. 595; Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26, 85 N. E. 829, afg. 51 Misc. 103, 100 N. Y. Supp. 740, and 118 App. Div. 907, 103 N. Y. Supp. 1141. Applying the test of intention of the maker, it has also been held that the paper was not payable to bearer where a member of a firm signed a large number of checks, relying on the false statements of an employe, the names of the payees being in some instances fictitious and in others the names of existing persons having no relation to the paper. Shipman v. Bank of State of New York, 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821. Thus, where plaintiff was induced by fraud to purchase a note by the pretended agent of a fictitious person, and gave to such agent therefor a check payable to such fictitious person, and the agent indorsed the check with the name of the fictitious payee and his own name, and it was paid to him by the bank on which it was drawn, it was held that plaintiff, having been ignorant of the fictitious character of the payee, and not having been negligent, could recover the amount of the check from the bank. Armstrong v. Pomeroy Nat. Bank, 46 Ohio St. 512, IS Am. St. Rep. 655. §51 INSTRUMENTS PAYABLE TO BEARER. 79 and this intention must necessarily arise from knowledge and exist as an affirmative fact in the mind of the maker at the time of de- livery of the paper.-'^^ The English bills of exchange act provides that "where the payee is a fictitious or nonexisting person, the bill may be treated as payable to bearer. "207 This provision is not to be regarded as controlled by the state of the law at the time of its enact- ment,208 and not being a codification of such law is deemed, by its provisions, to have swept away estoppel, and with it the con- trolling importance of knowledge and intention, as an element in determining whether a payee is fictitious.-°^ The term "fictitious," as construed by the courts, does not nec- essarily mean that the name of the payee represents a nonexist- ing person, but rather that it represents a person whom the maker knows has no interest in the paper, or, in other words, is ^206 Drawer of draft. Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26, 85 N. E. 829, afg. 51 Misc. 103, 100 N. Y. Supp. 740, and 118 App. Div. 987, 103 N. Y. Supp. 1141. 207 Bills of Exchange Act 1882, 45 and 46 Vict. c. 61, § 7, subd. 3. . 208 Bank of England v. Vagliano Bros. [1891] App. Cas. 107, rvg. 23 Q. B. Div. 243. 209 In England, since the Bills of Exchange Act of 1882 (St. 45 & 46 Vict. c. 61, § 7, subd. 3), proof of knowledge by the maker who issues the instrument that the payee is fictitious or nonexistent is not required. A lawful holder may treat the instrument as payable to bearer, when- ever it appears thaf the nam.e of the payee is inserted merely as a pre- tense, without any intention that payment should be made in conformity with the promise, whether the name be that of an existing or a non- existing person. Bank of England v. Vagliano Bros. [1891] App. Cas. 107, 153; Glutton v. Attenborough [1897] App. Cas. 90. Plaintiffs' clerk induced them by fraud to draw checks in favor of a nonexistent person for pretended services by such person, and thereafter forged the indorse- ment of such person and negotiated the checks to defendant, a bona fide holder, to whom they were paid by plaintiff. It was held that the payee was a "fictitious and nonexisting" person, within the meaning of the above subdivision, though plaintiffs supposed, at the time the checks were drawn, that he was a real person, and that, the paper being payable to bearer, plaintiff's could not recover against defendant in an action for money paid under a mistake of fact. Clutton v. Attenborough [1895] 2 Q. B. Div. 306, afd. Id. 707. 80 ESSENTIALS OF NEGOTIABILITY. § 51 fictitious so far as the paper is concerned.^^" Thus, where a clerk of a firm of bankers forged a large number of bills of exchange purporting to be drawn on the firm of bankers by one of its for- eign correspondents, and payable to another well known firm, and the bankers accepted them, they were held within the statute and payable to bearer.^^^ Also the same rule was applied where one forged an administrator's name to checks payable to beneficiaries and calling for amounts larger than the latter were entitled to.212 The rule adopted by the American negotiable instruments act might appear inconsiyteht with the provisions which declare the making or drawing of an instrument to constitute an admission of the existence of the payee and his then capacity to indorse, were it not that this admi::;sion apparently goes merely to the ex- istence and capacity of the payee and does not diispense with proof of actual indorsement. Instruments in which payee is not a "person." When the name of the payee does not purport to be the name of any person, as in case of instruments drawn payable to an " es- tate, '^^^ or to "expenses," or to "bills payable, "^i* or to "cash," the paper is payable to bearer.^^s 210 Bank of England v. Vagliano Bros. [1891] App. Cas. 107, rvg. 23 Q. B. Div. 243, 22 Q. B. Div. 103; Shipman v. Bank of State of New York, 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821; Trust Co. of America v. Hamilton Bank, 127 App. Div. 515, 112 N. Y. Supp. 84; Phillips V. Mercantile Nat. Bank, 140 N. Y. 556, 35 N. E. 982, 23 L. R. A. 584, 37 Am. St. Rep. 596; Snyder v. Corn Exch. Nat. Bank, 221 Pa. 599, 70 Atl. 876. 211 Bank of England v. Vagliano Bros. [1891] App. Cas. 107, rvg. 23 Q. B. Div. 243, 22 Q. B. Div. 103. 212 Trust Co. of America v. Hamilton Bank, 127 App. Div. 515, 112 N. Y. Supp. 84. 213 Scott V. Parker, 5 N. Y. Supp. 753; Lewinsohn v. Kent, 33 N. Y. Supp. 826. 2i4WilIets v. Phoenix Bank, 9 N. Y. Super. Ct. (2 Duer) 121. 215 Subdivision 4, same sections of negotiable instruments laws as last above cited. § 52 CERTAINTY AS TO PARTIES. 81 Instruments indorsed in blank. Another class of instruments payable to bearer is composed of instruments indorsed in blank. This is true in case the only- indorsement is in blank, and also in case only the last indorse- ment is in blank.^iG If the maker of a note wrongfully obtains possession of it after its indorsement in blank by the payee, he becomes the bearer within the meaning of the act.^^^ Certainty as To Parties. § 52. Where instrument is payable to order, the payee must be named or otherwise indicated therein with reasonable certainty. Where the instrument is payable to order, the payee must be named or otherwise indicated with reasonable certainty .^^^ This requirement is not new.^^^ The designation is sufficient if the 216 Subdivision 5, same sections of negotiable instruments laws as last above cited. Notes indorsed in blank are payable to bearer. Massachu- setts Nat. Bank v. Snow, 187 Mass. 159, 72 N. E. 959; Wedge Mines Co. V. Denver Nat. Bank, 19 Colo. App. 182, 73 Pac. 873. A note payable to the order of the maker becomes payable to bearer on indorsement in blank by the maker and may be transferred by delivery. Roach v. San- born Land Co., 135 Wis. 354, 115 N. W. 1102. See, also, Curtis v. Sprague, 51 Cal. 239; Morris v. Preston, 93 111. 215; McDonald v. Bailey, 14 Me. 101; Mitchell v. Hyde, 12 How. Pr. (N. Y.) 460; Greneaux v. Wheeler, 6 Tex. 515; French v. Barney, 23 N. C. (1 Ired. Law) 219. 217 Massachusetts Nat. Bank v. Snow, 187 Mass. 159, 72 N. E. 959. 218 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 8); Ariz. (§ 3311); 111. (§ 8); Kan. (§ 15); Md. (§ 27); Mich. (§ 10); Neb. (§ 8); N. Y. (§ 27); Ohio (§ 3171 g); R. I. (§ 16); Wis. (§ 1675-8). An instrument purporting to be a check which is payable "to the order of, on sight," no payee being named, and no space being left for a name, is not a check. Mcintosh v. Lytle, 26 Minn. 336, 3 N. W. 983, 37 Am. Rep. 410. 219 Tittle v. Thomas, 30 Miss. 122, 64 Am. Dec. 154; Moody v. Threlkeld, 13 Ga. 55; Evertson v. Nat. Bank of Newport, 66 N. Y. 14, 23 Am. Rep. 9. Opp.— Sel.— 6 82 ESSENTIALS OF NEGOTIABILITY. § 52 payee, though not named, can be readily ascertained from the in- strument.220 "Where a note is made payable to the order of the person who shall thereafter indorse it,22i the designation is suf- ficient, and so is one payable to ''the heirs" of a certain person ;222 but one payable to the "estate" of a deceased person does not sufficiently designate the payee,-^ nor does one payable to named payees "et al."22* An instrument in the form, "Good for one hundred and twenty-six dollars on demand," is not negotiable because no payee is named, but "is nothing more than a mem- orandum between the parties to it, to operate as a promise to pay money, as a receipt for money, or as proof of a sum of money to be accounted for, according to the evidence offered, to show the intention of both parties when it is made." ^^ Same — Place for payee 's name blank. The rule that the payee must be named or indicated with reasonable certainty would seem to do away with the doctrine that, where the place for the payee's name is blank, the instru- ment is payable to bearer and is negotiable,^^^ especially since this kind of paper is not enumerated with tbe instruments made payable to bearor.227 Under the English Bills of Exchange Act 1882 (45 & 46 Vict. c. 61, § 7), providing that, where a bill is not pay- 220 Culver V. Marks, 122 Ind. 554, 23 N. E. 1068, 17 Am. St. Rep. 377, 7 L. R. A. 489. 221 United States v. White, 2 Hill (N. Y.) 59, 37 Am. Dec. 374. See, also, Rich v. Starbuck, 51 Ind. 87. 222 Cox V. Belthoover, 11 Mo. 142, 47 Am. Dec. 145. See, also, Bacon v. Fitch, 1 Root (Conn.) 181. 223 Lyon V. Marshall, 11 Barb. (N. Y.) 241; Wayman v. Torreyson, 4 Nev. 124, holding that the payee must be in esse at the time the instru- ment takes effect. 224 Gordon v. Anderson, 83 Iowa, 224, 49 N. W. 86, 32 Am. St. Rep. 302, 12 L. R. A. 483. 225 Brown v. Gilman, 13 Mass. 158. 226Dinsmore v. Duncan, 57 N. Y. 573, 15 Am. Rep. 534; Prewitt v. Chap- man, 6 Ala. 86. 227 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 9); Ariz. (§ 3312); 111. §53 CERTAINTY AS TO PARTIES. 8.T able to bearer, "the payee must be named, or otherwise indicated therein Avith reasonable certainty," when construed with the provision defining a bill (section 3) as it is defined in the nego- tiable instruments laws, and the provision that a bill may be drawn payable to, or to the order of, the drawer (section 5), an instrument payable to " order," there being no "or" before "order," means payable to "my order" that is, to the order of the drawer, and, after indorsement by the drawer, is a valid bill of exchange, though the blank is never filled.^^ Same — Parol evidence of mistake. If there was a mistake in the name of the payee, or the instru- ment is ambiguous in that particular, parol evidence is admissible to show the true intent of the parties.^^^ This rule applies both where the mistake is in the spelling-^*^ and where the instrument is made out in the name of one not intended as payee.-^^ § 53. Where the instrument is addressed to a drawee, he must be named or otherwise indicated with reasonable cer- tainty. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty .'^^- This rule is declaratory of the law merehant.^^^ Where a bill does (§ 9); Kan. (§ 16); Md. (§ 28); Mich. (§ 11); Neb. (§ 9); N. Y. (§ 28); Ohio (§ 31711); R. I. (§ 17); Wis. (§ 1675-9). 22S Chamberlain v. Young [1893] 2 Q. B. Div. 206. 229 Medway Cotton Manufactory v. Adams, 10 Mass. 360; Leaphardt v. Sloan, 5 Blackf. (Ind.) 278. 230 Williams v. Baker, 67 111. 238; Jacobs v. Benson, 39 Me. 132, 63 Am. Dec. 609. 231 Hall V. Tufts, 35 Mass. (18 Pick.) 455. See, also, New York African Soc. V. Varick, 13 Johns. (N. Y.) 38. 232 Neg. Insf. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1). 233 See Watrous v. Halbrook, 39 Tex. 572; Prewitt v. Chapman, 6 Ala. 86. 84 ESSENTIALS OF NEGOTIABILITY. §54 not name any drawee, it has been held that it will be considered as drawn by the drawer on himself.^'* § 54. A bill may be addressed to two or more drawees jointly, whether they are partners or not, but not to two or more drawees in the alternative or in succession. A bill of exchange "may be addressed to two or more drawees jointly, whether they are partners or not ; but not to two or more drawees in the alternative or in succession." -^^ This provision of the negotiable instruments laws seems to render a bill ad- dressed to two or more drawees in the alternative or in succession not only non-negotiable but invalid. By another provision, in- struments payable to the order of "one or some of several payees" are payable to order and are negotiable.-^^ IIow the courts will harmonize these apparently inconsistent provisions remains to be seen. Certainty as to Place of Payment. § 55. It is not necessary to the validity of a negotiable instru- ment that it should state the place where it is payable. 234 Funk V. Babbitt, 156 III. 408, 41 N. E. 166. 235 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 128); Ariz. (§ 3431); 111. r§ 127); Kan. (§ 135); Md. (§ 147); Mich. (§ 130); Neb. (§ 127); N. Y. (§ 212); Ohio (§ 3175 s); R. L (§ 136); Wis. (§ 1680 b). The words ''or in succession" are not in the Wisconsin Negotiable In- struments Law. The word "or" before "determinable" was omitted in the law as first adopted in Nev/ York, but the omission was supplied by amendment. Laws 1898, c. 336, § 25. 236 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Alont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 8); Ariz. (§ 3311); 111. (§ 8); Kan. (§ 15); Md. (§ 27); Mich. (§ 10); Neb. (§ 8); N. Y. (§ 27); Ohio (§ 3171a); R. I. (§ 16); Wis. (§ 1675-8). See, also, post, § 50, and notes. § 56 PLACE OF PAYiMENT. 85 S 56. Where no place of payment is specified and no address is given, the instrument is payable at the usual or last known place of business or residence of the person to make pay- ment or at any place he can be found. Certainty as to place of payment. It is not necessary to the validity or negotiability of an in- strument that it sliould state the place where it is p.iyahle."^^^ Thi.s alters the rule in those states Avlicro an instrnraent is not negotiable unless it is payable at a bank or a banking hoiisc-^^ Place not stated — Instrument payable at residence or place of business. "Where a place of payment is named, the instrument is payable there ;22^ but if no place of payment is named, the instrument is payable at the usual place of business or the residence ol the pcr- 237 N eg. Inst. Laws Colo., Conn., D. C, F\a., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., On, Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); 111. (§ 6); Kan. (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25); Ohio (§ 3171 e); R. I. (§ 14); Wis. (§ 1675-6). See, also, Bank of America v. Woodworth, 18 Johns. (N. Y.) 315; Bank of Newberry v. Richards, 35 Vt. 381. 238 Alabama (Code, §§ 1765, 2594); Indiana (Horner's Rev. St. 1881, § 5506); Kentucky (St. § 483); West Virginia (Code, c. 99, § 7). The Virgina statute (Code, § 2849, Code, 1873, c. 141, § 7) was repealed by the negotiable instruments law. Where the statutory requirement is that the instrument be made payable at a particular bank within the state, it is not negotiable if made payable at a bank in another state. See Bank of Marietta v. Pindall, 2 Rand. (Va.) 465. See preceding note as to repeal of statute on which this decision was based. Nor if made pay- able at "either of the banking houses" in a certain city in the state. Free- man's Bank v. Ruckman, 16 Grat. (Va.) 126. See, also, Smith v. Rob- inson, 11 Ala. 270. 239 For consitruction of various instruments, where the place of pay- ment given was ambiguous, see Miller v. Powers, 16 Ind. 410; Lane v. Union Nat. Bank, 3 Ind. App. 299, 29 N. E. 613; Hazard v. Spencer, 17 R. I. 561, 23 Atl. 729. ^6 ESSENTIALS OF NEGOTIABILITY. § 57 ?on who is to make payment, or at any place where such peraun can be found.-^° Additional Provisions Not Affecting Negotiability. § 57. The negotiable character of an instrument otherwise is not affected by a provision which : 1. Authorizes the sale of collateral securities in case the instrument be not paid at maturity; But conditional sale notes are usually deemed non- negotiable ; 2. Authorizes a confession of judgment if the instru- ment be not paid at maturity; 3. Waives the benefit of any law intended for the ad- vantage or protection of the obligor; or 4. Gives the holder an election to require something to be done in lieu of payment of money; But an instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. § 58. But nothing herein validates any provision or stipulation otherwise illegal. Provision for sale of collateral securities. The negotiable character of an instrument otherwise negotiable is not affected by a provision which authorizes the sale of col- lateral securities if the instrument be not paid at maturity."" So, 240 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 72,); Ariz. (§ 3376); 111. (§ 7?>); Kan. (§ 80); Md. (§ 92); Mich. (§ 75); Neb. (§ 73); N. Y. (§ L33); Ohio (§ 3173 r); R. I. (§ 81); Wis. (§ 1678-3). Place of presentment where no place is -stated, see post, § 192. 2*1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., §58 SALE Ul<" COLLATERAL SECURITIES. 87 a recital that tlie inakor has deposited certain cortincates ns col- lateral does not destroy negotiability ,2*- nor a recital that, on non- payment, the holder may sell the collateral and apply the pro- ceeds to "payment and necessary charges."-'^ But a contract in an instrument for the payment of money, that the payee m;iy sell certain warehouse receipts given as collateral, and, if they depreci- ate in value, may sell them before the instrument would other- wise become due, in which case the proceeds, less expenses, shall be applied in payment or part payment of tlie debt, and that any deficiency shall become due forthwith, renders the instrument non- negotiable, the court saying: "We find that such alternative con- tract introduces two elements of uncertainty in the instruments, to- wit, in the sum payable in case any sum become due before the time first specified in the instrument, and in the time when the same shall so become due." ^^^ Under the corresponding provision of the English Bills of Exchange Act 1882 (45 & 46 Vict. c. 61, § 83, f^ubd. 3), that a note "is not invalid by reason only that it contains also a pledge of collateral security, with authority to sell or dis- pose thereof," it has been held that a note containing more than is there referred to is not a promissory note, and that hence a note providing for payment of a sum certain in instalments, de- fault in payment of any one instalment to mature the whole, and Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 5); Ariz. (§ 3308); 111. (§ 5); Kan. (§ 12); Md. (§ 24); Mich. (§ 7); Neb. (§ 5); N. Y. (§ 24); Ohio (§.3171d); R. I. (§ 13); Wis. (§1675-5). See, also, Arnold v. Rock River Val. R. Co., 14 N. Y. Super. Ct. (5 Duer) 207; National Bank v. Gary, 18 S. C. 282; Perry v. Bigelow, 128 Mass. 129, 25 Am. Rep. 40; Bank of Carroll v. Taylor, 67 Iowa, 572, 25 N. W. 810; Gravert v. Goothard, 81 Neb. 99, 115 N. W. 559. 242 Towne v. Rice, 122 Mass. 67. 243 Valley Nat. Bank of Chambersburg v. Crowell, 148 Pa. 284, 23 Atl. 1068, 33 Am. St. Rep. 824. Notes which are themselves given as collateral security are not nego- liable. American Nat. Bank v. Sprague, 14 R. I. 410; Haskell v. Lambert, 82 Mass. 592; Costelo v. Crowell, 127 Mass. 293, 34 Am. Rep. 367. 244 Continental Nat. Bank v. Wells, 73 Wis. 332, 41 N. W. 409, citing Morgan v. Edwards, 53 Wis. 599, 11 N. W. 21, 40 Am. Rep. 781; First .Mat. Bank v. Larsen, 60 Wis. 206, 19 N. W.-67, 50 Am. Rep. 365; Cushman V. Haynes, 37 Mass. (20 Pick.) 132. bS ESSENTIALS OF NEGOTIABILITY. § 58 containing the clause, "No time given to, or security taken from, or composition or arrangements entered into, with either party hereto, shall prejudice the rights of the holder to proceed against any other party," is not a promissory note, and cannot be de- clared on as such by an indorsee.^^^ Conditional sale notes — Not negotiable. A provision in a note, otherwise negotiable, that the title to the property for which it was given shall remain in the vendor until the note is paid, has generally been held not to destroy negotia- bility;-*^ but the rule is otherwise in some of the states.^*"^ In New York it has already been decided that such a note is not negotiable under the negotiable instruments laws.^*^ The reason for treating a conditional sale note as non-negotiable is stated by Cornell, J., in Third Nat. Bank v. Armstrong as follows: *'If, prior to any default on the part of the defendant (maker), the company (payee) had retaken possession of the property, and disposed of it, so that, upon the maturity of the defendant's ob- ligation, an observance of the condition on its part had become impossible, there can be no doubt that, under such circumstances, no action could have been maintained on his promise. "^^^ Judgment notes — Neg-otiable. A provision in a note authorizing a confession of judgment thereon if it is not paid at maturity, or a warrant or power of 245 Kirkwood v. Smith [1895] 1 Q. B. Div. 582. 246 Chicago R. Equip. Co. v. Merchants' Nat. Bank, 136 U. S. 268, 34 Law. Ed. 349; First Nat. Bank of Montgomery v. Slaughter, 98 Ala. 602, 14 So. 545, 39 Am. St. Rep. 88; Mott v. Havana Nat. Bank, 22 Hun (N. Y.) 354; W. W. Kimball Co. v. Mellon, 80 Wis. 133, 48 N. W. 1100; Choate V. Stevens, 116 Mich. 28, 74 N. W. 289, 43 L. R. A. 277, changing rule in Michigan. See Wright v. Traver, 73 Mich. 493, 41 N. W. 517, 3 L. R. A. 50. 247 South Bend Iron Works v. Paddock, 37 Kan. 510; Third Nat. Bank V. Armstrong, 25 Minn. 530; Stevens v. Johnson, 28 Minn. 172, 9 N. W. 677. 248 Third Nat. Bank of Buffalo v. Spring, 28 Misc. 9, 59 N. Y. Supp. 794. 249 Third Nat. Bank v. Armstrong, 25 Minn. 530. §58 WAIVING STATUTORY RIGHTS. 89 attorney to confess judgment attached to the note, makes the in- strument what is commonly called a "judgment note," but does not affect its negotiability.^so It seems, however, that the war- rant of attorney must authorize a confession of judgment in favor of the "holder" or the "legal holder," or the instrument will not be negotiable.^^i The provision should be definite, and neither a note payable in ninety days, containing a power of at- torney to confess judgment "at any time hereafter, " ^^e nor one containing a power of attorney to enter judgment on it at any time after its date, whether due or not,^^^ are negotiable. An illegal provision for a confession of judgment does not render a note non-negotiable.^^* Instruments waiving statutory rights — Negotiable. The negotiability of an instrument otherwise negotiable is not destroyed by a provision which waives the benefit of any law intended for the advantage or protection of the obligor.-^^ -phis provision of the negotiable instruments laws relates to instru- ments which contain a waiver of the -benefit of appraisement, stay, exemption, or homestead laws. The theory upon which the negotiability of instruments of this nature rests is that such provisions do not in any way clog negotiation, but rather expe- 250 N eg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.. Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 5); Ariz. (§ 3308): 111. (§ 5); Kan. (§ 12); Md. (§ 24); Mich. (§ 7); Neb. (§ 5); N. Y (^ 24); Ohio (§ 3171 d); R. I (§ 13); Wis. (§ 1675-5). See, also, Kemp v. Klaus, 8 Neb. 24; Osborn v. Hawlev, 19 Ohio, 130. Contra, see Sweeney v. Thuckstun, 11 Pa. 131. 251 Ream v. Merchants' Nat. Bank, 2 Ohio Cir Ct. R. 43. 252 Richards v. Barlow, 140 Mass. 218, 6 N. E. 68. 253 Time of payment depends upon the whim or caprice of the holder and is absolutely uncertain. Wisconsin Yearly Meeting of Freewill Bap- tists V. Bahle, 1J5 Wis. 289, 91 N. W. 678 254Tolman v. Janson, 106 Iowa, 455, 76 N. W 732. 255 Subdivision 3, same sections of negotiable instruments laws as last above cited. See, also, Schlesinger v. Arlinc, 31 Fed. 648; Hughitt v. Johnson, 28 Fed. 865; Lyon v. Martin, 31 Kan. 411. 90 ESSENTIALS OF NEGOTIABILITY. § 58 dite it by giving additional value to the instruments.^^^ A waiver of statutory requirements as to notice of protest and diligence in bringing suit also falls within this section.^s^ But nothing herein is to be deemed as validating any provision or stipulation other- wise illegal. In Wisconsin the effect of this section is specifically limited by providing that nothing therein shall authorize a waiver of exemptions from execution ; ^^ and in North Carolina the negotiable instruments law provides that nothing in the law shall authorize the enforcement of a stipulation waiving exemp- tions, though the mention of such a stipulation in an instrument shall not affect its negotiability .^^^ Instruments giving holder election to require something to be done in lieu of payment in money. A provision of this nature does not destroy negotiability.^^" The point is illustrated by cases in which the holder was author- ized to take corporate stock"^^^ or merchandise 2^2 in lieu of money. Instruments with a provision of this kind must be distinguished carefully from the instruments heretofore considered, wherein the option is in favor of the maker, allowing him to pay in the alternative. 256 Zimmerman v. Anderson, 67 Pa. 421. 5 Am. Rep. 447. But see Over- ton V. Tyler. 3 Pa. 346. 45 Am. Dec. 645. 257 See Hegeler v. Comstock, 1 S. D. 138, 45 N. W. 331. 8 L. R A. 393, where the provision w^as that the endorsers, signers, and guarantors sev- erally waive presentment, protest, notice, and diligence in bringing suit, but where the note was held non-negotiable for uncertainty as to the amount payable, and for containing contracts other than for the pay- menr of money in violation of Comp. Laws, § 4462. 258 Negotiable Inst. Law, § 1675-5, subd. 5, 259 Negotiable Inst. Law, § 197. 260 Subdivision 4. same sections of negotiable instruments laws as last above cited. 261 Hodges V. Shuler. 22 N. Y. 114. 262 Hosstatter v. Wilson, 36 Barb. (^N. Y.^ 307. § 58 MEDIUM OF PAYMENT. 91 Instruments promising to Co something in addition to payment of money. An instrument which contains an order or promise to do any act in addition to payment of money is not negotiable.^^^ Thus, an instrument which, in addition to a promise to pay money for the hire of a slave, promised to furnish the slave witli clothinjj, is not negotiable.'^^* But an order written under a note as fol- lows: "Levi Mason, Esq.: Please pay the above note, and hold it against me in our settlement," is a good bill of exchange, as "the retaining of the note as a voucher is no more the perform- ance of another act beside the payment of the money than the re- taining the order itself for the same purpose. "^65 263 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo, (§ 5); Ariz. (§ 3308); 111. (§ 5); Kan. (§ 12); Md. (§ 24); Mich. (§ 7); Neb. (§ 5); N. Y. (§ 24); Ohio (§ 3171 d); R. I. (§ 13); Wis. (§ 1675-5). Kimpton v. Studebaker Bros. Co., 14 Idaho, 552, 94 Pac. 1039, 125 Am. St. Rep. 185. 264 Havens v. Potts, 86 N. C. 31. See, also, Austin v. Burns, 16 Barb. (N. Y.) 643. 265 Leonard v. Mason, 1 Wend. (N. Y.) S2Z CHAPTER V. CONSIDERATION. § 59. Presumption of Consideration. § 60. Sufliciency of Consideration. § 61. Antecedent or Pre-existing Debt. § 62. Lienholders. § 63. Want or Failure of Consideration. § 64. Inadequacy of Consideration. § 65. Accommodation Paper. § 66. Liability of Accommodation Party to Holder for Value. Presumption of Consideration. § 59. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every per- son whose signature appears thereon to have become a party thereto for value. Consideration is presumed. One of the most important differences between negotiable and non-negotiable instruments is that a consideration for the former is presumed/ while the consideration for the latter must be 1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 24); Ariz. (§ 3327); 111. (§ 24); Kan. (§ 31); Md. (§ 43); Mich. (§ 26); Neb. (§ 24); N. Y. (§ 50); Ohio (§ 3171 w); R. L (§ 32); Wis. (§ 1675-50). Bank of Monticello v. Dooly, 113 Wis. 590, 89 N. W. 490; Hickok v. Bunting, 92 App. Div. 167, 86 N. Y. Supp. 1059; Dawson v. Wombles, 123 Mo. App. 340, 100 S. W. 547; Lassos v. McCarty, 47 Or. 474, 84 Pac. 76; Black V. First Nat. Bank, 96 Md. 399, 54 Atl. 88; Gilpin v. Savage, 60 Misc. 605, 112 N. Y. Supp. 802; Munsey v. Dempsey, 60 Misc. 317, 113 N. Y. Supp. 271; Zimbleman v. Finnegan (Iowa) 118 N. W. 312. Bank can 92 §59 CONSIDERATION PRESUMED. $3 proved.^ Under this rule, every person whose signature appears on a negotiable instrument is presumed to have become a party thereto for value.^ There is a presumption not only tliat a nego- tiable instrument was based on a consideration, but that it was presume that check deposited with it was issued for value. Faile v. Craw- ford, 34 App. Div. 278, 54 N. Y. Supp. 264. Burden of proving lack of consideration is on defendant. Joveshof v. Rockey, 58 Misc. 559, 109 N. Y. Supp. 818; Culbertson v. Salinger (Iowa) 117 N. W. 6. It has already been held in New York under these sections that a bank cannot presume that a check deposited with it was issued for value. Riverside Bank v. Woodhaven Junction Land Co., 34 App. Div. 266, 54 N. Y. Supp. 266. See, also, cases cited in note 4, infra. On shifting of the burden of proof, see Perley v. Perley, 144 Mass. 104, 10 N. E. 726. Consideration for indorsement or transfer, see post, § 125. Purchase for value, essential of purchase in due course, see post, § 167. 2 Bristol V. Warner, 19 Conn. 7; Courtney v. Doyle, 92 Mass. (10 Allen) 122; Averett's Adm'r v. Booker, 15 Grat. (Va.) 163, 76 Am. Dec. 203. The doctrine heretofore in force in New York as shown by the de- cisions in Carnwright v. Gray, 127 N. Y. 92, 27 N. E. 835, 24 Am. St. Rep. 424, 12 L. R. A. 845; Kimball v. Huntington, 10 Wend. (N. Y.) 675, 25 Am. Dec. 590, and President, etc., of Goshen & M. Turnpike Road v. Hur- tin, 9 Johns. (N. Y.) 217, 6 Am. Dec. 273, that a consideration for a non- negotiable instrument is presumed, is now nullified by the provisions of the negotiable instruments law. In Colorado the rule as to consideration for a transfer of a non-nego- tiable instrument has not been changed by the negotiable instruments law, for it was already the rule in that state that a transferee of a non- negotiable note takes only the rights of the prior holder, and any de- fense good against such holder is good against him. Mulligan v. Smith, 13 Colo. App. 231, 57 Pac. 731. Want of consideration may be shown in an action on a non-ncg^tiable instrument, though the consideration is mentioned in the instrument itself as executed, for such admission is in the nature of a receipt and is only prima facie evidence of consideration. Mulligan v. Smith, 13 Colo. App. 231, 57 Pac. 731. 3 Same sections of negotiable instruments laws as last above cited. Bank of Monticello v. Dooly, 113 Wis. 590, 89 N. W. 490; Hickok v. Bunting, 92 App. Div. 167, 86 N. Y. Supp. 1059; Lynchburg Milling Co. V. National Exch. Bk. (Va.) 64 S. E. 980. See ante, note 1. 94 CONSIDERATION. § 60 based on a sufficient consideration,^ and this presumption applies alike to instruments expressing "value received"^ and to those not expressing a consideration.^ It is also presumed that the con- sideration was legal/ and a maker denying liability or defending on the ground of the illegality of the consideration has the bur- den of showing such illegality.^ The presumption of consideration is not conclusive and may be rebutted,^ but the rebutting evi- dence, to be effectual, must show an actual want of considera- tion.io Sufficiency of Consideration. § 60. Value is any consideration sufficient to support a simple contract. § 61. An antecedent or pre-existing debt constitutes value, and is deemed such whether the instrument is payable on de- mand or at a future time. 4 Younglove v. Cunningham (Cal.) 43 Pac. 755; Perot v. Cooper, 17 Colo. 80, 28 Pac. 391, 31 Am. St. Rep. 258; Bristol v. Warner, 19 Conn 7; Lines v. Smith, 4 Fla. 47; Whitney v. Clary, 145 Mass. 156, 13 N. E. 393; Hegeman v. Moon, 131 N. Y. 462, 30 N. E. 487; Carnwright v. Gray, 127 N. Y. 92, 27 N. E. 835, 24 Am. St. Rep. 424, 12 L. R. A. 845; Campbell V. McCormac, 90 N. C. 491; Wilson v. Wilson, 26 Or. 315, 38 Pac. 189; First Nat. Bank v. Foote, 12 Utah, 157. 42 Pac. 205; Du Pont v. Beck, 81 Ind. 271; Perley v. Perley, 144 Mass. 104, 10 N. E. 726; Nichols & Shep- ard Co. v. Dedrick, 61 Minn. 513, 63 N. W. 1110; Conmey v. Macfarlane, 97 Pa. 361. SQamewell v. Mosely, 11 Mass. (11 Gray) 173; Howell v. Wright, 41 Hun (N. Y.) 167; Stronach v. Bledsoe, 85 N. C. 473. '^ See cases cited in note 4, supra. Statement of consideration not necessary to negotiability, see ante, § 32. 7 Cundifif v. Campbell, 40 Tex. 142. sWyman v. Fiske, 85 Mass. (3 Allen) 238, 80 Am. Dec. 66; Brigham v. Potter, 80 Mass. (14 Gray) 522; Pixley v. Boynton, 79 111. 351; Hapgood V. Needham, 59 Me. 442. 9 Carrol v. Peters, 1 McGloin (La.) 88. 10 Black River Sav. Bank v. Edwards. 1(i Mass. (10 Gray) ZZ1 ; White V. Davis, 62 Hun, 622, 17 N. Y. Supp. 548. §62 SUFFICIENCY OF CONSIDERATION. 95 § 62. V7here the holder has a lien on the instrument, arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien. Sufficiency of consideration. It is a general rule that any consideration which will support any other simple contract will sustain a negotiable instrument.^^ Thus, money or services/^ scrip for corporate stock,^^ agreeing to the change of collateral securities,^* a waiver of legal rights,^^ qj. a forbearance to enforce such rights,^^ constitutes a sufficient con- sideration for a negotiable instrument. So, also, the undertaking 11 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 25); Ariz. (§ 3328); 111. C§ 25); Kan. (§ 32); Md. (§ 44); Mich. (§ 27); Neb. (§ 25); N. Y. (§ 51); Ohio (§ 3171 x); R. I. (§ 33); Wis. (§ 1675-51). Matlock V. Scheuerman (Or.) 93 Pac. 823. Consideration for indorsememt or transfer, see post, § 125. Purchase for value, essential to character as holder in due course, see post, § 167. 12 Miller V. McKenzie, 95 N. Y. 575, 47 Am. Rep. 85; Ould v. Myers, 23 Grat. (Va.) 383. 13 Scrip for shares of stock in an existing corporation form a sufficient consideration. Avon Springs Sanitarium Co. v. Kellogg, 125 App. Div. 51, 109 N. Y. Supp. 153. But subscription to stock before company is incorporated is not a valid consideration. Id. 14VOSS V. Chamberlain (Iowa) 117 N. W. 269. 15 Sykes v. Lafferry, 27 Ark. 407; Byington v. Simpson, 134 Mass. 145; Montgomery v. Morris, 32 Ga. 173. Release of indorser on a forged in- strument constitutes "value." Jennings v. Law, 199 Mass. 124, 85 N. E. 157. 16 Hindert v. Schneider, 4 111. App. 203; Austell v. Rice, 5 Ga. 472; Rob- inson V. Gould, 65 Mass. (11 Cush.) 55; Mechanics' & Farmers' Bank v. Wixson, 42 N. Y. 438. Agreement to forbear suit on an existing indebt- edness. Milius V. Kauffmann, 104 App. Div. 442, 93 N. Y. Supp. 669. Ac- ceptance of note' paj^able in the future, for goods sold and delivered, op- erates as a forbearance of the right to sue until the. maturity of the note.i J. H. Mohlman Co. v. McKane, 60 App. Div. 546, 69 N. Y. Supp. 1046. One surrendering old note and accepting new note held a holder for value. Van Norden Trust Co. v. Rosenberg, 62 Misc. 285, 114 N. Y. Supp. 1025. 96 CONSIDERATION. §62 and obligation of a remote indorsee who takes the paper as col- lateral security to make presentment for payment and give no- tice of nonpayment constitutes a sufficient consideration for the transfer.^'' The consideration, however, must not be affected with illegality,^^ for, where part of the consideration for a note is illegal, the entire promise fails.^^ AVhile generally a consideration passing to one of several joint makers will sustain the instrument as against the others,^^ still the difference between a solvent and an insolvent signer of a note is a valuable consideration to an- other who signs, relying on the financial responsibility of those who join as makers.^^ On the theory that mutual promises sustain each other, one promissory note is a sufficient consideration for another given for it,-- and a bill of exchange is a sufficient consideration for a note given in exchange,-^ and a check is a sufficient consideration for a bilL^* Antecedent or pre-existing debt; lien holders. Taking a negotiable instrument for an antecedent or pre-exist- ing debt involves a forbearance on the part of the creditor, and such a debt constitutes value, both for instruments payable on 17 In re Hopper-Morgan Co., 154 Fed. 249. 18 Where agent o^ seller receives commission of latter, a note executed by the buyer representing an additional bonus or commission on the sale is, unless expressly agreed to, without consideration and voidable. Shelton Implement Co. v. Schieck, 81 Neb. 826, 116 N. W. 951. 19 First Nat. Bank of El Paso v. Miller, 235 111. 135, 85 N. E. 312. 20 McAfee v. Glen Mary Coal & Coke Co., 97 Ala. 709, 11 So. 881; West- phal V. Nevills, 92 Cal. 545, 28 Pac. 678; Isaack v. Porter, 9 Ky. (2 A. K. Marsh.) 452; Hoxie v. Hodges, 1 Or. 251; Rutland v. Brister, 53 Miss. 683. 21 City Deposit Bank v. Green, 138 Iowa, 156, 115 N. W. 893. 22 Rice V. Grange, 131 N. Y. 149, 30 N. E. 46, afg. 60 Hun, 583, 14 N. Y. Supp. 911; Wilson v. Denton, 82 Tex. 531, 27 Am. St. Rep. 908; Higginson V. Gray, 47 Mass. (6 Mete.) 212; Dockray v. Dunn, 37 Me. 442. 23 Newman v. Frost, 52 N. Y. 422. 24 Mayer v. Heidelbach, 4 N. Y. Supp. 529; Matlock v. Scheuerman (Or.) 93 Pac. 823. § 62 ANTECEDENT OR PRE-EXISTING DEBT. 97 demand and those payable at a future time.-^ The provision of the negotiable instruments laws that an antecedent or pre-exist- ing debt constitutes value follov^'s the rule in force in the federal eourts,26 and the rule previously in force in some of the states,27 but changes the rule in others.^^ In deciding cases under this sec- tion, the courts have reached different conclusions as to the effect of the act upon existing law. Some of the New York courts hold that it makes no change in the law as it previously existed in that state, and that in order that an antecedent debt may constitute value, the antecedent debt must have been canceled and dis- charged on the acceptance of the instrument or the time of pay- 25Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 25); Ariz. (§ 3328); 111. (§ 25); Kan. (§ 32); Md. (§ 44); Mich. (§ 27); Neb. (§ 25); N. Y. (§ 51); Ohio (§ 3171 x); R. L (§ 33); Wis. (§ 1675-51). Voss V. Chamberlain (Iowa) 117 N. W. 269; Boston Steel & Iron Co. V. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426; Milius v. Kauff- mann, 104 App. Div. 442, 93 N. Y. Supp. 669; Mundlin v. Appelbaum, 62 Misc. 300, 114 N. Y. Supp. 908; Bigelow Co. v. Automatic Gas Producer Co., 56 Misc. 389, 107 N. Y. Supp. 894; Manufacturing Co. v. Summers, 143 N. C. 102, 55 S. E. 522; Hermann's Ex'r v. Gregory (Ky.) 115 S.'W. 809; In re Hopper-Morgan Co., 154 Fed. 249; J. H. Mohlman Co. v. Mc- Kane, 60 App. Div. 546, 69 N. Y. Supp. 1046; Lowell v. Bickford, 201 Mass. 543, 88 N. E. 1. Notes given for a pre-existing indebtedness on considera- tion that the maker^a commercial firm, be allowed to sell its stock to pay creditors, and that the payee furnisli it new stock, held for a valuable con- sideration. Richardson v Wren (Ariz.) 95 Pac. 124. 26 Railroad Co. v. National Bank, 102 U. S. 14, 26 Law. Ed. 61; Swift V. Tyson, 41 U. S. (16 Pet.) 1, 10 Law. Ed. 166. 27 Roberts v. Hall, 37 Conn. 205, 9 Am. Rep. 308; Leach v. Lewis, 8 D. C. (1 McArthur) 112; Cecil Bank v. Heald, 25 Md. 562; Maitland v. Citi- zens' Nat. Bank, 40 Md. 540, 17 Am. Rep. 620; Wooley v. Cobb, 165 Mass. 503, 43 N. E. 497; Reddick v. Jones, 28 N. C. (6 Ired. Law) 107, 44 Am. Dec. 68; Dunham v. Peterson, 5 N. D. 414, 57 Am. St. Rep. 556, 36 L. R. A. 232; Red River Valley Nat. Bank v. North Star Boot & Shoe Co., 8 N. D. 432, 79 N. W. 880; Knox v. Clifford, 38 Wis. 651; Wilkie v. Chandon, 1 Wash. 355. 28 Coddington v. Bay, 20 Johns. (N. Y.) 637, 11 Am. Dec. 342; Comstock V. Hier, 7i N. Y. 269, 29 Am. Rep. 142; Benjamin v. Rogers, 126 N. Y. 60, 26 N. E. 970; King v. Doolittle, 38 Tenn. (1 Head) 77; Ferress v. Tavel, 87 Tenn. 386, 11 S. W. 93, 3 L. R. A. 414. Opp. — Sel. — 7 98 CONSIDERATION. § G2 ment extended.^^ That recovery on the instrument might extin- guish the claim is not sufficient, there being nothing to show that in case of failure to recover the debt would still be extinguished.^ The rule as here laid down is believed to be erroneous and to arise from a failure to consider those sections of the act which provide that ''where a holder has a lien on the instrument, aris- ing either from contract or by implication of law, he is deemed a holder for value, to the extent of his lien, "^^ and, in some cases, that value is any consideration sufficient to support a simple con- tract.^- The true rule, under the negotiable instruments act, would seem to be that a person holding a note as collateral se- turitj' for a pre-existing debt is a holder for value to the extent of the amount due him.^^ Of course this rule limits the amount of the recovery to the amount of the debt secured,^'* except where the instrument is in the hands of a bona fide holder,^^ in which 29 Harris v. Fowler, 59 Misc. 523, 110 N. Y. Supp. 987; Sutherland v. Mead, 80 App. Div. 103, 80 N. Y. Supp. 504. Note to secure pre-existing debt not enforcible against accommodation indorser unless taken in pay- ment of debt or time of payment thereof extended. Roseman v. Ma- hony, 86 App. Div. Zll , 83 N. Y. Supp. 749. The holder of the note must give up the debt wholly or qualifiedly in order to constitute considera- tion. Id. 30 Harris v. Fowler, 59 Misc. 523, 110 N. Y. Supp. 987; Commercial Nat. Bank v. Citizens' State Bank, 132 Iowa, 706, 109 N. W. 198. 31 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 27); Ariz. (§ 3330); III. (§ 27); Kan. (§ 34); Md. (§ 46); Mich. (§ 29); Neb. (§ 27); N. Y. (§ 53); Ohio (§ 3171 z); R. I. (§ 35); Wis. (§ 1675-53). 32 In re Hopper-Morgan Co., 154 Fed. 249. See ante, § 60. 33 Brooks V. Sullivan, 129 N. C. 190, 39 S. E. 822; Graham v. Smith (Mich.) 15 Det. Leg. N. 923, 118 N. W. 726; Brewster v. Shrader, 26 Misc. 480, 57 N. Y. Supp. 606. This view of the law changes the rule in all of these states. 34 Hatcher v. Independence Nat. Bank, 79 Ga. 547, 5 S. E. Ill; Handy V. Sibley, 46 Ohio St. 9, 17 N. E. 329; Winship v. Merchants' Nat. Bank, 42 Ark. 22. The rule applies to accommodation paper. Continental Nat. Bank v. Bell, 125 N. Y. 38, 25 N. E. 1070; Handy v. Sibley, 46 Ohio St. 9, 17 N. E. 329. 35 See In re Hopper-Morgan Co., 154 Fed. 249. See, also, post, chapter XL § G4 WANT OF CONSIDERATION. . 99 case there would seem to be a liability to account for the surplus to the debtor.^^ Effect of Want or Failure of Consideration. § 63. Absence or failure of consideration is a matter of defense as against any person not a holder in due course, and par- tial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise. § 64. In the absence of fraud, mere inadequacy of consideration is no defense. Effect of want or failure of consideration. Under the negotiable instruments act, as well as under the law merchant, want ^"^ or failure ^^ may be shown as between the orig- inal parties or against one not a bona fide holder.^^ Under the 36 Camden Nat. Bank v. Fries-Breslin Co, 214 Pa. 395, 63 Atl. 1022. 87 Litchfield Bank v. Peck, 29 Conn. 384; Radcliffe v. Biles, 94 Ga. 480, 20 S. E. 359; Beall v. Pearre, 12 Md. 550; Hill v. Buckminister, 22 Mass. (5 Pick.) 391; Slade v. Halstead, 7 Cow. (N. Y.) 322; Southerland v. W'hitaker, 50 N. C. (5 Jones Law) 5; Knowles v. Knowles, 128 111. 110, 21 Nu E. 196. 38 Hawks V. Truesdell, 94 Mass. (12 Allen) 564; Bookstaver v. Jayne, 60 N. Y. 146; Washburn v. Picot, 14 N. C. (3 Dev.) 390, 24 Am. Dec. 266. 39 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 28); Ariz. (§ 3331); 111. (§ 28); Kan. (§ 35); Md. (§ 47); Mich. (§ 30); Neb. (§ 28); N. Y. (§ 54); Ohio (§ 3172); R. I. (§ 36); Wis. (§ 1675-54). Battemen v. Butcher, 95 App. Div. 213, 88 N. Y. Supp. 685; Weiss V. Rieser, 62 Misc. 292, 114 N. Y. Supp. 983; City Deposit Bank v. Green, 138 Iowa, 156, 115 N. W. 893; St. Paul's Episcopal Church v. Fields, 81 Conn. 670, 72 Atl. 145. The act makes no change in the rule that parol evidence is admissible to show want of consideration and the like. People's Nat. Bank v. Schepflin, 72, N. J. Law, 29, 62 Atl. 333. In a suit between maker and payee on a purchase-money note, the maker may defeat or limit the amount of recovery thereon by proving, in the one case, 100 CONSIDERATION. § 64 law merchant, a partial failure may be shown as a defense pro tanto, if it is of a definite or liquidated amount of the whole con- sideration.*° The negotiable instruments laws, by providing that the absence or failure of consideration is matter of defense as against any person not a holder in due course, and that a partial failure of consideration is a defense pro tanto, "whether the fail- ure is an ascertained and liquidated amount or otherwise," *i have advanced somewhat beyond the rule of the law merchant. In this connection it must be remembered that, since a person who obtains possession of an instrument improperly or irregularly, for example, one who obtains possession of an instrument payable on demand which has been negotiated an unreasonable time after its issuance, is not a holder in due course,^^ the defense of want or a total unexcused nonperformance on the part of the vendor of his con- tract to deliver the property, or loss, on the part of the vendee, of the benefit of the contract, occasioned by want of title in the vendor, and, in the other, refusal of the vendee to accept the property, and notice of his intention not to do so, given before the title passed; all on the theory of failure of consideration in whole or in part. Acme Food Co. v. Older (W. Va.) 61 S. E. 235. A promissory note given to a near relative by a person in declining years, by way of compensation or reward for services rendered and to be rendered, is so much in the nature of a testamentary disposition of the property that ordinarily the maker's estimate of the value of the serv- ices will not be disturbed on the ground of disparity between the actual value thereof and the amount of the note. Bade v. Feay, 63 W. Va. 166, 61 S. E, 348. That such a note so given calls for a larger sum 'than the services were probably worth does not invalidate it on the ground of fraud or failure of consideration. Id. 40Pulsifer v. Hotchkiss, 12 Conn. 234; Allen v. Bank of U. S., 20 N. J. Law, 620; Payne v. Cutler, 13 Wend. (N. Y.) 60S. In some cases it has been held that a partial unliquidated failure of consideration may be shown as between the original parties, in mitigation of damages. Davis v. Wait, 12 Or. 425, 8 Pac. 356; Christy v. Ogle, 33 111. 295. And see Beall V. Pearre, 12 Md. 550. ^1 Same sections negotiable instruments law as last above cited. This aflirms the rule existing in Oregon. Davis v. Wait, 12 Or. 425. See, also, Edwards v. Porter, 42 Tenn. (2 Cold.) 42. It changes the rule in North Carolina. See Evans v. Williamson, 79 N. C. 86; Washburn V. Picot, 3 Dev. (N. C.) 390. 42 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La.. § 66 ACCOMMODATION PAPER. 101 failure of consideration is good as against him. A note wholly without consideration is not evidence of any indebtedness be- tween the original parties/^ but equity will not grant relief on the ground of a want of consideration, unless there is danger that the instrument may be held outstanding until evidence of want of consideration cannot be produced in an action at law.** The right to set up the defense of want or failure of consideration may be lost by acts or omissions amounting in law to a waiver or to an estoppel.*^ Inadequacy of consideration. Mere inadequacy of consideration, without fraud, is no de- fense,*^ unless the inadequacy is so great as to be itself a badge of fraud.*7 Accommodation Paper. § 65. An accommodation party is one who has signed the in- strument as maker, drawer, acceptor or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. § 66. An accommodation party is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accom- modation party. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Ok!., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 53); Ariz. (§ 3356); 111' (§ 53); Kan. (§ 60); Md. (§ 11); Mich. (§ 55); Neb. (§ 53); N. Y (§ 92); Ohio (§ 3172y); R. I. (§ 61); Wis. (§ 1676-23). 43 Hildeburn v. Curran, 65 Pa. 59. 44 Metler's Adm'rs v. Metier, 18 N. J. Eq. 270. 45 McCreary v. Parsons, 31 Kan. 447; Howard v. Palmer, 64 Me 86; Edison General Elec. Co. v. Blount, 96 Ga. 272, 23 S. E. 306; Morrill v. Prescott, 64 N.' H. 505, 15 Atl. 123; Horton v. Arnold, 18 Wis. 223. See, also, Longmire v. Fain, 89 Tenn. 393, 18 S. W. 70. 46 Lewis V. Woodfolk, 61 Tenn. (2 Baxt.) 25; Boggs v. Wann 58 Fed 681. 47 Jones V. Degge, 84 Va. 685, 5 S. E. 799. 102 CONSIDERATION. § 66 Accommodation paper. An accommodation bill or note within the law merchant is one made, accepted, or indorsed without consideration, to enable the payee or holder to obtain money or credit on the strength of the name of the maker, acceptor, or indorser.*^ The negotiable in- struments laws define accommodation paper in practically the same language,*^ and hence a consideration moving to accommo- dation maker is necessary to uphold his promise.^'^ "Whether a signature was placed on negotiable paper for the purpose of ac- commodation must be determined ordinarily from the circum- stances of each particular case,^^ and parol evidence is admissible to show both the accommodation character of the signature and *8 Pollard V. Hufif, 44 Neb. 892, 63 N. W. 58; Jefiferson County v. Burl- ington & M. R. Co., 66 Iowa, 385, 16 N. W. 561, 23 N. W. 899, citing 1 Daniel, Negotiable Inst. § 189. Credit given maker of note is a suffi- cient consideration to bind accommodation indorser. Bank of Morgan City V. Herwig, 121 La. 513, 46 So. 611. Where notes were indorsed as an accommodation and accepted by the payee to secure a debt, the notes ire not taken out of the category of ordinary commercial paper. Id. *9Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 29); Ariz. (§ 3332); 111. '§29); Kan. (§ 36); Md. (§ 48); Mich. (§ 31); Neb. (§ 29); N. Y. (§ 55); Ohio (§ 3172 a); R. I. (§ 37); Wis. (§ 1675-55). In the negotiable instruments law as first adopted in New York the Iieadline to this section read, "Liability of accommodation indorser," but the word "indorser" was changed to "party" by amendment. Laws 1898, c. 336, § 22. 50 Marling v. Jones, 138 Wis. 82, 119 N. W. 931. 51 The following recent cases decide whether certain paper was or was not accommodation paper: Messmore v. Meyer, 56 N. J. Law, 31, 27 Atl. 938; Capital City State Bank v. Des Moines Cotton-Mill Co., 84 Iowa, 561, 51 N. W. 33; Lockwood v. Twitchell, 146 Mass. 623, 16 N. E. 728; Adams v. Kennedy, 175 Pa. 160. Indorsements in the following cases were held to be for accommo- dation: National Bank of Commerce v. Atkinson, 55 Fed. 465; Aetna Nat. Bank v. Charter Oak Life Ins. Co., 50 Conn. 167; Robertson v. Row- cll, 158 Mass. 94, 32 N. E. 898, 35 Am. St. Rep. 466; Fox v. Rural Home Co., 90 Hun, 365, 25 N. Y. Supp. 896; Newbold v. Boraef, 155 Pa. 227, 26 Atl. 305. § 66 ACCOMMODATION PAPER. 103 the party accommodated,^"^ but the rule must be carefully ap- plied so as not to defeat the purpose and effect of written in- struments, and such parol contract must be established by clear, precise and indubitable evidence.^^ Irregular signatures may be presumed to be accommodation in character.^* A note made to enable the payee to raise money on the credit of the signer's name will not be presumed to be accommodation paper, if the maker was indebted to the payee on open accoimt, in an amount equal to the face of the note.^s Nor does the making and deliver- ing of one note in exchange for another constitute either of the instruments accommodation paper, though the exchange was mut- ually convenient to the parties.^^ The original payee of paper ex- ecuted for his benefit and accommodation cannot recover thereon 52 Indorser. Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499, 85 N. E. 682, afg. 118 App. Div. 412, 103 N. Y. Supp. 584. This is not al- tered by the fact that § 114 does not expressly state that, if the indorser signed for the accommodation of the acceptor, he is liable to all parties subsequent to the acceptor. Id. 53 Lebanon Nat. Bank v. Long, 220 Pa. 556, 69 Atl. 1033. 54 Where a note is taken from the payee in payment of a debt due from him, indorsed by a third person, the indorsement is prima facie an ac- commodation indorsement, and the person who takes it is chargeable with knowledge that the indorsement is an accommodation indorsement. Brill Co. V. Norton & Tanton St. R. Co., 189 Mass. 431, 75 N. E. 1090, 2 L. R. A. (N. S.) 525. Where the maker presents for discount paper payable to his own order, and indorsed by another, the latter is presumed to be an accommodation indorser. Stall v. Catskill Bank, 18 Wend. (N. Y.) 466; Erwin v. Shaffer, 9 Ohio St. 43, 72 Am. Dec. 613; Overton v. Hardin, 46 Tenn. (6 Cold.) 375. See, also, further, on the question of presumption and burden of proof. Clay City Nat. Bank v. Halsey, 17 C. C. A. 222, 70 Fed. 567; First Nat. Bank v. Alton, 60 Conn. 402, 22 Atl. 1010; Conselyea v. Swift, 103 N. Y. 604, 9 N. E. 489; National Bank v. Bradley, 117 N. C. 526, 23 S. E. 455; Murphy v. Gumaer, 12 Colo. App. 951, 55 Pac. 951. Where the party primarily liable on a note or draft presents the same for discount with the name of the indorser or drawer thereon, the transaction on its face shows that the indorser or drawer is a mere accommodation party, and the party receiving such paper is chargeable with notice of its accommodation character. Cook v. Amer- ican Tubing & Webbing Co., 28 R. I. 41, 65 Atl. 641, 9 L. R. A. (N. S.) 193. 55 Long V. Gieriet, 57 Minn. 278, 59 N. W. 194. 104 CONSIDERATION. § G6 against the accommodation maker, ^^ for accommodation paper has no validity until it has been discounted or has passed into the hands of a holder for value.^^ Until such discounting or transfer takes place, the maker may withdraw from and rescind his en- gagement,^^ but an accommodation maker compelled to pay the note may sue the accommodated parties to recover the amount paid and interest,^*' though, it should be noted, such suit is not one based on the note.^^ An accommodation party is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party ,^^ but this rule does not obtain when the accommodation party has no 56 Farber v. National Forge & I. Co., 140 Ind. 54, 39 N. E. 249; Wil- liams V. Banks, 11 Md. 198; Whittier v. Eager, 83 Mass. (1 Allen) 499; Rice V. Grange, 131 N. Y. 149, 30 N. E. 46. See, also, supra, note 22. 57 More V. Maddock, 33 Mo. 575; Coghlin v. May, 17 Cal. 515. 58 Second Nat. Bank v. Howe, 40 Minn. 390, 42 N. W. 200, 12 Am. St. Rep. 744; Tufts v. Shepherd, 49 Me. 312; Macy v. Kendall, 33 Mo. 164; Smith's Ex'rs v. Wyckoff, 3 Sandf. Ch. (N. Y.) 77. 59 Second Nat. Bank v. Howe, 40 Minn. 390, 42 N. W. 200, 12 Am. St. Rep. 744; Downes v. Richardson, 5 Barn. & Aid. 674; Whitworth v. Ad- ams, 5 Rand. (Va.) 342; Berkeley v. Tinsley, 88 Va. 1001, 14 S. E. 842. 60 Morgan v. Thompson, 72 N. J. Law, 244, 62 Atl. 410. 61 Morgan v. Thompson, 72 N. J. Law, 244, 62 Atl. 410. 62 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 29); Ariz. (§ 3332); 111. (§ 29); Kan. (§ 36); Md. (§ 48); Mich. (§ 31); Neb. (§ 29); N. Y. (§ 55); Ohio (§ 3172 a); R. L (§ 37); Wis. (§ 1675-55). White V. Savage, 48 Or. 604, 87 Pac. 1040; Wolstenholme v. Smith, 34 Utah, 300, 97 Pac. 329; Citizens' Nat. Bank v. Lilienthal, 40 App. Div. 609, 57 N. Y. Supp. 567; Packard v. Windholz, 88 App. Div. 365, 84 N. Y. Supp. 666; Lowell v. Bickford, 201 Mass. 543, 88 N. E. 1. The fact that an indorsee for value knew that the note was an accommodation note be- tween the original parties is not a defense to an action by him on the noite. Black v. First Nat. Bank, 96 Md. 399, 54 Atl. 88. This accords with law merchant. Hodges v. Nash, 43 111. App. 638; Tourtelot v. Reed, 62 Minn. 384, 64 N. W. 928; Maitland v. Citizens' Nat. Bank, 40 Md. 540, 17 Am. Rep. 620; Holland Trust Co. v. Waddell, 75 Hun, 104, 26 N. Y. Supp. 980. / §66 ACCOMMODATION PAPER. 105 authority to enter into such an agreement,^^ and in the latter case the burden is on the holder to prove that he is a holder for value and without knowledge of the accommodation character of such party's signature.^* It should be noted that the liability of the accommodation party, as here stated, is not limited to a "holder in due course," but is to a "holder for value, "^^ and this rule has been applied to accommodation paper shown to have been ap- propriated by the accommodated party to some purpose other than that for which it was given.^^ The act is not deemed to change pre-existing laws as to whom may become accommodation parties.^'' As a general rule cor- porations cannot become accommodation indorsers.^^ 63 Manufacturing corporation. National Bank of Newport v. Snyder Mfg. Co., 117 App. Div. 370, 102 N. Y. Supp. 478; Brill Co. v. Norton & Tanton St. R. Co., 189 Mass. 431, 75 N. E. 1090, 2 L. R. A. (N. S.) 525. 64 National Bank of Newport v. Snyder Mfg. Co., 117 App. Div. 370, 102 N. Y. Supp. 478. 65Mersick v. Alderman, 11 Conn. 634, 60 Atl. 109; Marling v. Jones, 138 Wis. 82, 119 N. W. 931. Rule applied in favor of one taking demand note as collateral for pre-existing debt. Lowell v. Bickford, 201 Mass. 543, 88 N. E. 1. 66 Mersick v. Alderman, 11 Conn. 634, 60 Atl. 109. 67 The act does not change the statutory law of New Jersey rendering invalid a promissory note executed by a married woman for the accom- modation of another. People's National Bank v. Schepflin, 1Z N. J. Law, 29, 62 Atl. 333. Married woman may become bound as accommodation indorser of note, made by partnership of which husband was a member and business manager and payable to her husband. Case does not seem to be lim.ited to particular facts. This accords with former rule in state. Middleborough Nat. Bank v. Cole, 191 Mass. 168, 11 N. E. 781. 68 Fox V. Rural Home Co., 90 Hun, 365, 35 N. Y. Supp. 896; Aetna Nat. Bank v. Charter Oak Life Ins. Co., 50 Conn. 167; Hall v. Auburn Turn- pike Co., 27 Cal. 255, 87 Am. Dec. 75. Manufacturing corporation has no power to become accommodation indorser. National Bank of New- port V. Snyder Mfg. Co., 117 App. Div. 370, 102 N. Y. Supp. 327. A cor- poration organized to make tubing or webbing has no power to issue ac- com.modation paper. Cook v. American Tubing & Webbing Co., 28 R. I. 41, 65 Atl. 641, 9 L. R. A. (N. SJ 193. CHAPTER VI. CONSTRUCTION AND OPERATION. 67. 1. Ambiguity as to Amount — Words Control Figures. 2. Interest Clause. 3. Undated Instruments. 4. Conflict Between Written and Printed Portions. 5. When Bill May be Treated as Promissory Note. 6. Capacity in Which One Signs Uncertain. 7. Joint and Several Liability. 8. Memoranda on Instrument. 9. Several Instruments. 68. Bill of Exchange Not an Assignment. 69. Exception: — Bill on Particular Fund. 70. Check Not an Assignment. In General. 67. Where the language of the instrument is ambiguous, or there are omissions therein, the following rules of con- struction apply: 1. Where the sum payable is expressed in words and also in figures and there is a discrepancy between the two, the sum denoted by the words is the sura payable; but if the words are ambiguous or uncer- tain, reference may be had to the figures to fix the amount ; 2. Where the instrument provides for the payment of interest, without specifying the date from which in- terest is to run, the interest runs from the date of the instrument, and if the instrument is undated, from the issue thereof; 3. "Where the instrument is not dated, it will be consid- ered to be dated, as of the time it was issued; 106 § 67 AMOUNT AMBIGUOUS. 107 4. Where there is a conflict between the written and printed provisions of the instrument, the written pro- visions prevail; 5. Where the drawer and drawee are the same person, or where the drav/ee is a fictitious person, or a per- son not having capacity to contract, or where the Instrument is so ambiguous that there is doubt, whether it is a bill or note, the holder may treat it as either at his option. 6. Where a signature is so placed upon the instrument that it is not clear in Vv'hat capacity the person mak- ing the same intended to sign, he is to be deemed an indorser; 7. Where an instrument containing the words "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon; 8. Memoranda on the instrument if made at or before delivery and are material to the contract are part of the instrument ; 9. Several instruments executed at or about the same time and as parts of the same transaction may be construed together. Ambiguity as to amount — Words control figures. The general rule for construction of contracts, that words con- trol figures in case of a discrepancy, applies to negotiable instru- ments.^ Thus, where marginal figures and the written words ex- pressing the amount differ, evidence that the bill was negotiated 1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). See, also, Poorman v. Mills, 39 Cal. 345, 2 Am. Rep. 451; National Bank of Rockville v. Second Nat. Bank, 69 Ind. 479. 108 CONSTRUCTION AND OPERATION. § 67 for the amount expressed in the figures is not admissible. ^ If, however, the words are ambiguous and the figures certain, refer- ence may be had to the figures to fix the amount.^ Thus, where the place for the amount in the body of an instrument in the form of a note is blank, but the word "dollars" follows the blank, and the figures "$147.70" appear in the margin, the figures "should be taken as the amount which the obligor intended to obligate himself to pay, and the obligation enforced accord- ingly."* Interest clause. If a negotiable instrument provides for interest, but fails to specify the date from which the interest shall run, interest runs from the date of the instrument, if it is dated, and, if it is not dated, from the time of its issuance.^ The latter part of the rule is a logical outcome of the rule that an undated instrument takes date from the time of its issuance.^ Where a note secured by mortgage is ambiguous as to the time from which interest is to 2 Smith V. Smith, 1 R. I. 398, 53 Am. Dec. 652. 3 Subdivision 1, same sections of the negotiable instruments laws as last above cited. So, too, where the words are illegible (Riley v. Dickens, 19 111. 29), or where there are no words expressing the amount (Wittey v. Michigan Mut. Life Ins. Co., 123 Ind. 411, 24 N. E. 141, 18 Am. St. Rep. 327, 8 L.- R. A. 365), or the words are misspelled (Burnham v. Allen, 67 Mass. [1 Gray] 496). Option of holder to treat ambiguous instrument as bill or note, see post, subd. 5. 4 Wittey V. Michigan Mut. Life Ins. Co., 123 Ind. 411, 24 N. E. 141, 18 Am. St. Rep. 327, 8 L. R. A. 365. 5 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 117); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). This is declaratory of the law. See Salazar v. Taylor, 18 Colo. 538, 33 Pac. 369; Cambell P. P. & M. Co. v. Jones, 79 Ala. 475; Smith v. Gdod- lett, 92 Tenn. 230, 21 S. W. 106; Miller v. Cavanaugh, 99 Ky. 377, 35 S. W. 920, 59 Am. St. Rep. 463. 6 See ante, § 14. § 67 WRITTEN AND PRINTED PARTS. 109 run, the uncertainty is removed by definite terms in the mort- gage.'^ A note payable on demand draws interest from date.^ So, also, a note not expressing any time of payment." It is often the case that the word "interest" is not used, but the instrument will be construed to be interest-bearing if it is clear from an in- spection of it that such was the intent of the parties. Thus, the words "at six per cent" mean interest at the rate of six per cent,^° and the words "at 10 per cent" indicate that the instru- ment is interest-bearing.^^ The word "use" is equivalent to "in- terest," ^^ and the expression "Int. @ 6'^° p. a." indicates that the instrument bears interest at the rate of six per cent per an- num.^2 Undated — Deemed dated as of date of issuance. As has been shown a negotiable instrument need not be dated ;^^ not being dated it will be considered dated as of the time it was issued.^^ Conflict between writing and printing — Writing controls. Another general rule governing contracts, which applies to ne- gotiable instruments, is that, in case of a conflict between the writ- 7 Stanton v. Caffee, 58 Wis. 261, 16 N. W. 601; Prichard v. Miller, 86 Ala. SOO, 5 So. 784. 8 Packer v. Roberts, 40 111. App. 613; Gaylord v. Van Loan, 15 Wend. (N. Y.) 308. But see Hunter v. Wood, 54 Ala. 71. 9 Collier v. Gray, 1 Tenn. (1 Overt.) 110; Husbrook v. Wilder, 1 Pin. (Wis.) 643. lODurant v. Murdock, 3 App. D. C. 114. 11 Thompson v. HoaglahJ, 65 111. 310. i2Cisne v. Chidester, 85 111. 523; McCIellan v. Morris, Kirby (Conn) 145. iSBelford v. Beatty, 145 111. 414, 34 N. E. 254, afg. 46 111. App. 539. 1* See ante, chapter III, § 13. 15 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§' 3320); III' (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). See ante, chapter III, § 14. 110 CONSTRUCTION AND OPERATION. § 67 ten and the printed portions of an instrument, the written pro- visions prevail.^^ When bill may be treated as promissory note. Where the drawer and the drawee is the same person, that is, where the drawer drawls on himself, the holder may, at his op- tion, treat the instrument as a bill or as a note.^'^ This rule is well illustrated where the instrument was in the form: "350.00, Bloomington, 111,, April 23, 1891. Thirty days after date, pay to the order of E. D. Babbitt three hundred and fifty dollars, for value received. Funk & Lackey;" and the court said: "The firm drew bills, but did not address them to any third person or persons, and it is therefore to be regarded that they were, in legal effect, addressed to themselves, as drawees, and the signature of the film to the several bills bound the firm both as drawers and acceptors;" and that, "the drawers and drawees being the same, the bills are in legal effect promissory notes, and may be treated as such, or as bills, at the holder's option. "^^ He has this option also in case the drawee is a fictitious person, or one without capacity to contract,^^ and in case the instrument 16 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). 17 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 130); Ariz. (§ 3433); 111. (§ 129); Kan. (§ 137); Md. (§ 149); Mich. (§ 132); Neb. (§ 129); N. Y. (§ 214); Ohio (§ 3175 v); R. I. (§ 138); Wis. (§ 1680-D). This is also the rule of the law merchant. See Wardens, etc., of St. James Church v. Moore, 1 Ind. 289; Hasey v. White Pidgeon Beet-Sugar Co., 1 Doug. (Mich.) 193; McCandlish v. Cruger, 2 Bay (S. C.) 377. See, also. Commonwealth v. Butterick, 100 Mass. 12; Burnheisel v. Field, 17 Ind. 609. 18 Funk V. Babbitt, 156 111. 408, 41 N. E. 166. 19 Same sections of the negotiable instruments laws as last above cited. See, also, Cork v. Bacon, 45 Wis. 192, 30 Am. Rep. 712, where it was §67 JOINT AND SEVERAL LIABILITY. Ill is so ambiguous that there is doubt Avhether it is a bill or a note."° Capacity uncertain — Deemed an indorser. Subject to the qualifications imposed by another section,^! where it is not clear in what capacity one signing an instrument in- tended to sign, he is deemed an indorser.^- Parties — Joint and several liability. Where two or more persons sign an instrument containing the words "I promise to pay," they are jointly and severally liable. This is the rule of the law merchant -^ and of the negotiable in- held that erasing part of the name of a bank on a check and writing in the name of another bank did not make the latter a fictitious drawee. 20Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. L (§ 25); Wis. (§ 1675-17). For liability of drawer of instrument in form of note, but addressed to and accepted by, a third person, see Funk v. Babbitt, 156 111. 408, 41 N. E. 166. 2iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 63); Ariz. (§ 3366); 111. (§ 63); Kan. (§ 70); Md. (§ 82); Mich. (§ 65); Neb. (§63); N. Y. (§ 113); Ohio (§ 3173 h); R. I. (§ 71); Wis. (§ 1677-3). 22 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). Spencer v. Alki Point Transp. Co., 53 Wash. 77, 101 Pac. 509; Bank of Montpelier v. Montpelier Lumber Co. (Idaho) 102 Pac. 685. For full discussion of these sections and of cases, see post, chapter XI, § 154. 23 Monson v. Drakeley, 40 Conn. 552, 16 Am. Rep. 74; Hemmenway v. Stone, 7 Mass. 58, 5 Am. Dec. 27; Partridge v. Colby, 19 Barb. (N. Y.) ?.4R- ^-h,^ckle v. Templeton, 65 Vt. 205, 25 Atl. 1095; Dill v. White, 52 Wis. 456. 112 CONSTRUCTION AND OPERATION. § 67 struments laws.-^ Such expressions as "I or we promise to pay," ^5 or *'We or either of us promise to pay,"26 also create a joint and several liability in case more than one sign. A note signed by two, and containing the words "We promise to pay," is the simplest illustration of an instrument creating merely a joint lia- bility.27 Memoranda made before delivery are part of contract. Memoranda on the face or back of the instrument, whether signed or not, if made at the time of delivery and material to the contract, are part of the instrument, and parol evidence is ad- missible to show the circumstances under which they were made. This is a generally accepted rule of the law merchant,^^ and has been expressly incorporated into the negotiable instruments law in ■Wisconsin,29 and impliedly into that of other states by the section providing that in any case not provided for in the act the rules of the law merchant shall govern.^o Several instruments may be construed together. The Wisconsin negotiable instruments law has expressly added another general rule of construction not expressly found in the 24Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. I. (§ 25); Wis. (§ 1675-17). 25 Harris v. Coleman & A. White Lead Co., 58 111. App. 366. 26 Pogue V. Clark, 25 111. 295. But see Harvey v. Irvine, 11 Iowa, 82. 27 Barnett v. Juday, 38 Ind. 86. 28 Van Zandt v. Hopkins, 151 111. 248, 37 N. E. 845; Specht v. Berndorf, 56 Neb. 553, 76 N. W. 1059, 42 L. R. A. 429; Seymour v. Farquhar, 93 Ala. 292, 8 So. 466; Franklin Sav Inst. v. Reed, 125 Mass. 365; Barnard v. Cushing, 45 Mass. (4 Mete.) 230, 38 Am. Dec. 362; Blake v. Coleman, 22 Wis. 415, 99 Am. Dec. 53. But see Howry v. Eppinger, 34 Mich. 30. 29 Section 1675-10. soNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 196); Ariz. (§ 3491); 111. (§ 195); Kan. (§ 7); Md. (§ 19); Mich. (§ 2); Neb. (§ 194); N. Y. (§ 7); Ohio (§ 3178 e); R. I. (§ 7); Wis. (§ 1675). § 63 BILL AS AN ASSIGNMENT. 113 law as adopted in other states, though impliedly incorporated therein by the provision making the rules of the law merchant controlling in cases unprovided for.^i It is to the effect that where several writings are executed at or about the same time, as parts of the same transaction, intended to accomplish the same object, they may be construed together as one instrument as to all parties having notice thereof.^ Under this rule, as to one not a bona fide holder, a contemporaneous written agreement may be shown to be part of the contract.^^ A note and the mortgage se- curing it are to be construed together as one instrument.^* Effect of an Instrument as an Assignment. § 68. A bill of exchange of itself does not operate as an assign- ment of the funds in the hands of the drawer available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same, 31 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.,' Or.,' Pa., Tenn.. Utah, Va., Wash., W. Va., Wyo. (§ 196); Ariz. (§ 3491); 111'. (§ 195); Kan. (§ 7); Md. (§ 19); Mich. (§ 2); Neb. (§ 194); N. Y. (§ 7); Ohio (§ 3178 e); R. I. (§ 7); Wis. (§ 1675). 82 Wis., subd. 8, § 1675-17. Parts of bill drawn in a set form one bill. See § 14. 83 Wood V. Ridgeville College, 114 Ind. 320, 16 N. E. 619; Montgomery V. Hunt, 93 Ga. 438, 21 S. E. 59; Carrington v. Waflf, 112 N. C. ^^115, 16 S. E. 1008; Traders' Nat. Bank v. Smith (Tex. Civ. App.) 22 S. W. 1056; Reed v. Cassatt, 153 Pa. 156, 25 Atl. 1074. But see Coffin v. Grand Rap- ids Hydraulic Co., 136 N. Y. 655, 32 N. E. 1076. A contemporary written agreement between the maker and the payee, given as part of the consideration of the note, and modifying the time of payment, may be shown as between the maker and a holder with no- tice of the agreement; as, where the note was payable 13 months after date, and the written agreement was that it was not to be payable until the payee sold, or caused to be sold, certain goods for the maker. Jacobs V. Mitchell, 46 Ohio St. 601, 22 N. E. 768. 34 Brownlee v. Arnold, 60 Mo. 79; Muzzy v. Knight, 8 Kan. 456. Opp. — Sel. — 8 114 CONSTRUCTION AND OPERATION. § 69 § 69. Exception. — A bill drawn on or payable out of a par- ticular fund may operate as an equitable assignment in toto or pro tanto. § 70. A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the same. Negotiable bill does not operate as assignment — Bill or order on particular fund does so operate. A negotiable bill of exchange does not of itself operate as an assignment of funds in the hands of the drawee, and the drawee is not liable thereon until he accepts it.^^ If, however, a bill is drawn on a particular fund,^^ it operates as an equitable assign- ment ^'' in toto or pro tanto, as the case may be, and the same rule applies to an order payable out of a particular fund.^^ If 35Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ki^, La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 127); Ariz. (§ 3430); 111. (§ 126); Kan. (§ 134); Md. (§ 146); Mich. (§ 129); Neb. (§ 126); N. Y. (§ 211); Ohio (§ 3175 r); R. I. (§ 135); Wis. (§ 1680 a). Bosworth V. Jacksonville Nat. Bank, 64 Fed. 615; Meldrum v. Hender- son, 7 Colo. App. 256, 43 Pac. 148; Exchange Bank v. Sutton Bank, 78 Md. 577, 28 Atl. 563; Whitney v. Eliot Nat. Bank, 137 Mass. 351, 50 Am. Rep. 316; Lynch v. First Nat. Bank, 107 N. Y. 179, 13 N. E. 775, 1 Am. St. Rep. 803; Holbrook v. Payne, 151 Mass. 383, 24 N. E. 210, 21 Am. St. Rep. 456. But see Howell v. Boyd Mfg. Co., 116 N. C. 806, 22 S. E. 5. 36 Bills of this kind are not negotiable. See ante, §§ 36, 2>1 . S7Kahnweiler v. Anderson, 78 N. C. 133; Robbins v. Bacon, 3 Me. 346; Ballou V. Boland, 14 Hun (N. Y.) 355. But see Grammel v. Carmer, 55 Mich, 201, 21 N. W. 418, 54 Am. Rep. 363. 38 Lewis V. Berry, 64 Barb. (N. Y.) 593; Lawrence Nat. Bank v. Ko- walsky, 105 Cal. 41, 38 Pac. 517; Central Nat. Bank v. Spratlen, 7 Colo. App. 430, 43 Pac. 1048; Lee v. Robinson, 15 R. I. 369; Shenandoath Val. R. Co. V. Miller, 80 Va. 821. Also where order was against specific account for work, labor and ma- terial. Brill V. Tuttle, 81 N. Y. 454, 37 Am. Rep. 515; City of Seattle v, Liberman, 9 Wash. 276; Chistmas v. Russell, 81 U. S. (14 Wall.) 69, 84, 20 Law. Ed. 762; McDaniel v. Maxwell, 21 Or. 202, 27 Pac. 952, 28 Am. St. Rep. 740. §70 CHECK AS AN ASSIGNMENT. 115 the order docs not designate the fund, an equitable assignment takes place if it is designated by a subsequent parol agreement.^' Under this provision of the negotiable instruments law (that a draft does not operate as an assi2:nmcnt of the fund), when con- strued with a law providing that in an action against a savings bank by a depositor the bank must pay the fund into court if it is claimed by a third person,^" and that a defendant against whom an action on contract or to recover a chattel is brought may have a person who demands the same thing substituted as defendant,*^ a savings bank sued on a draft cannot pay the amount into court and have a claimant of the fund substituted as defendant, because the action is not by a depositor, within the meaning of the stat- ute, nor is it on a contract with the bank, nor is it one to recover a chattel.*2 Check does not operate as assignment. The same rule which applies to bills of exchange in general also applies to cheeks, and a check of itself does not operate as an assignment of any part of the funds to the credit of the drawer in the bank, and the bank is not liable to the holder unless it ac- cepts or certifies the check.*^ This rule of the negotiable instru- ments laws follows the weight of authority,** but changes the law 39 McDaniel v. Maxwell, 21 Or. 202, 27 Pac. 952, 28 Am. St. Rep. 740. Effect of acceptance of bill, see post, chapter VIII. 40 Laws N. Y. 1892, c. 689, § 115. 41 Code N. Y. § 820. 42 Master v. Bowery Sav. Bank, 63 N. Y. Supp. 964. 43 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 189); Ariz. (§ 3487); 111. (§ 188); Kan. (§ 196); Md. (§ 208); Mich. (§ 191); Neb. (§ 188); N. Y. (§ 325); Ohio (§ 3177 z); R. I. (§ 197); Wi-s. (§ 1684-5). Van Buskirk v. State Bank, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182; Baltimore & Ohio R. Co. v. First Nat. Bank, 102 Va. 753, 47 S. E. 837; Libby Bros. Glass Co. v. Farmers' & Mechanics' Bank, 220 Pa. 1, 69 Atl. 280; Boswell v. Citizens' Sav. Bank, 123 Ky. 485, 29 Ky. Law Rep. 988, 96 S. W. 717. Applies to check payable to order and transferred by delivery. Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83. 44 Georgia Seed Co. v. Talmadge & Co., 96 Ga. 254, 22 S. E. 1001; Colorado Nat. Bank v. Boettcher, 5 Colo. 185, 40 Am. Re^ 142: Ex- 116 CONSTRUCTION AND OPERATION. §70 in some of the states.'*^ As between the drawer and the payee or his transferee, it has heretofore been generally held that a check operates as an equitable assignment/^ and the above rule of the negotiable instruments laws undoubtedly means that, as against the bank, a check does not operate as an equitable as- signment. "Where, however, money has been deposited in a bank for the benefit of the person who afterwards becomes payee of a -check thereon, and the bank has notice of his rights, the check operates as an equitable assignment to him.*''' change Bank v. Sutton Bank, 78 Md. 577, 28 Atl. 563, 23 L. R. A. 173; Bank of Antigo v. Union Trust Co., 149 III. 343, 36 N. E. 948, 34 L. R. A. 611; Carr v. National Security Bank, 107 Mass. 45; First Nat. Bank V. Clark, 134 N. Y. 368, 32 N. E. 38, 17 L. R. A. 580; Akin v. Jones, 93 Tenn. 353, 27 S. W. 669, 42 Am. St. Rep. 921, 25 L. R. A. 523. 45 See Hawes v. Blackwell, 107 N. C. 196, 12 S. E. 245, 22 Am. St. Rep. 870; Bell v. Alexander, 21 Grat. (Va.) 1. In several of the states the rule is different from that of the nego- tiable instruments laws. See Springfield Marine & Fire Ins. Co. v. Peck, 102 111. 265; Farmers' Bank & T. Co. v. Newland, 97 Ky. 464, 31 S. W. 38; Morrison v. McCartney, 30 Mo. 183. 46 Deener v. Brown, 8 D. C. (1 MacArthur) 350; Hawes v. Blackwell, 107 N. C. 196, 12 S. E. 245, 22 Am. St. Rep. 870; Pease v. Landauer, 63 Wis. 20, 22 N. W. 847, 53 Am. Rep. 247. 47Van Allen v. American Nat. Bank, 3 Lans. (N. Y.) 517; Hemphill V. Yerkes, 132 Pa. 545, 19 Atl. 342, 19 Am. St. Rep. 607. CHAPTER VII. PRESENTMENT OF BILLS OF EXCHANGE FOR ACCEPTANCE. § 71. When Necessary. § 72. When Excused. § 73. Must be Within Reasonable Time. § 74. Reasonable Hour; Business Day. § 75. Sunday or Holiday. § 76. Where Time is Insufficient. § 77. Place of Presentment. § 78. By Whom Made. § 79. To Whom Made — Drawee or His Agent. § 80. Bill Addressed to Two or More Drawees Not Partners. § 81. Drawee Dead. § 82. Bankruptcy or Insolvency of Drawee. § 83. Bills Drawn in Sets. § 84. Dishonor by Nonacceptance. § 85. Rights of Holder on Nonacceptance. § 86. Duties of Holder on Nonacceptance. § 87. Referee in Case of Need. When Necessary. § 71. Presentment for acceptance must be made: 1. Where the bill is payable after sight, or in any other case where presentment for acceptance is necessary in order to fix the maturity of the instrument; or 2. "Where the bill expressly stipulates that it shall be pre- sented for acceptance; or 3. Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee. In no other case is presentment for acceptance necessary in order to render any party to the bill liable. Necessity of presentment for acceptance. Where a bill is payable after sight, it must be presented for acceptance in order to fix the time of maturity, and, in all cases 117 118 PRESENTMENT FOR ACCEPTANCE. § 71 where the time of maturity can be fixed only by presentment, a presentment must be made.^ Bills payable at sight fall within the operation of this rule,^ but bills payable on demand or at a cer- tain period after date do not fall within the rule, and it is not necessary to present them for acceptance.^ A check, being a bill payable on demand,* need not be presented for acceptance ^ unless it contains an express stipulation to that effect,^ but may, of course, be presented for certification, which is equivalent to ac- ceptance.'^ Presentment for acceptance is necessary in case the bill is payable elsewhere than at the residence or place of business of the drawee,^ and in case the bill itself expressly stipulates that it shall be presented for acceptance.^ 1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo.. Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 143); Ariz. (§ 3446); 111. (§ 142); Kan. (§ 150); Md. (§ 162); Mich. (§ 145); Neb. (§ 142); N. Y. (§ 240); Ohio (§ 3176 g); R. I. (§ 151); Wis. (§ 1681). Austin V. Rodman, 1 Hawks (N. C.) 194, 9 Am. Dec. 630; Commer- cial Bank v. Perry, 10 Rob. (La.) 61, 43 Am. Dec. 168. 2Austin V. Rodman, 1 Hawks (N. C.) 194, 9 Am. Dec. 630; Hart v. Smith, 15 Ala. 807, 50 Am. Dec. 161; Montelius v. Charles, 76 111. 303; Allen v. Suydam, 20 Wend. (N. Y.) 321, 32 Am. Dec. 555; Bumont v. Pope, 7 Blackf. (Ind.) 367. STownsley v. Sumrall, 27 U. S. (2 Pet.) 170, 178, 7 Law. Ed. 68; Fall River Union Bank v. Willard, 46 Mass. (5 Mete.) 216; Sweet v. Switt, 65 Mich, 90, 31 N. W. 767; House v. Adams, 48 Pa. 261; Van Buskirk V. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. But see Allen v. Suydam, 20 Wend. (N. Y.) 321. 4 See ante, § 9. 6 Lester v. Given, 71 Ky. (8 Bush.) 357; Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. Indeed, strictly speaking, there is no such thing as acceptance of a check in the ordinary sense of the term. Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. «Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. VVan Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, S3 Pac. 778, 117 Am. St. Rep. 182. See post, §§ 108-112. 8 Subdivision 3, same sections of negotiable instruments laws as last above cited. 9 Subdivision 2, same sections of negotiable instruments laws as last above cited. §72 WHEN EXCUSED. 119 The occasions stated iii the act as requiring presentment for acceptance are to be deemed exclusive, for it is expressly pro- vided that "in no other case is presentment for acceptance neces- sary in order to render any party to the bill liable." ^° When Excused. § 72. Presentment for acceptance is excused and a bill may be treated as dishonored by nonacceptance in either of the following cases: 1. Where the drawee is dead, or has absconded, or is a fictitious person, or a person not having capacity to contract by bill; 2. Where, after the exercise of reasonable diligence, pre- sentment cannot be made; 3. Where, although presentment has been irregular, ac- ceptance has been refused on some other ground. Presentment for acceptance is excused, and the bill may be treated as dishonored for nonacceptance where the drawee is dead, or has absconded, or is a fictitious person, or a person with- out capacity to execute the bill, or where, after the exercise of reasonable diligence, presentment cannot be made, or where the presentment was irregular, but acceptance was refused on other grounds.^^ Dispensing with payment in the case of the drawee's death settles a question upon which the authorities previously lONeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 143) ; Ariz. (§ 3446) ; 111. (§ 142); Kan. (§ 150); Md. (§ 162); Mich. (§ 145); Neb. (§ 142); N. Y. (§ 240); Ohio (§ 3176 g); R. I. (§ 151); Wis. (§ 1681). 11 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 148); Ariz. (§ 3451); 111. (§ 147); Kan. (§ 155); Md. (§ 167); Mich. (§ ISO); Neb. (§ 147); N. Y. (.§ 245); Ohio (§ 31761); R. I. (§ 156); Wis. (§ 1681-5). 120 PRESENTMENT FOR ACCEPTANCE. §73 were not in accord.^^ Presentment is not necessary to charge one who, before the bill was drawn, promised unconditionally, in writ- ing, to accept it.^3 Time For Presentment. § 73. Except as herein otherwise stated, the holder of a bill re- quiring presentment for acceptance must either present it for acceptance or negotiate it within a reasonable time. If he fail to do so, the drawer and all indorsers are dis- charged. § 74, Presentment for acceptance must be made at a reasonable hour, on a business day, and before the bill is overdue. § 75. Where the time for presentment falls on Sunday or a holi- day, the act may be done on the next succeeding secular or business day. When Saturday is not otherwise a holi- day, presentment may be made before twelve o'clock noon on that day. § 76. Where the holder of a bill drawn payable elsewhere than at the place of business or the residence of the drawee ^ has not time with the exercise of reasonable diligence to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused and does not discharge the draw- ers and indorsers. Holder must present or negotiate within reasonable time. The holder of any bill which must be presented for acceptance must either present it or negotiate it within a reasonable time; 12 See 1 Daniels, Negotiable Inst. (5th Ed.) p. 471, § 458. iswhilden v. Merchants' & Planters' Nat. Bank, 64 Ala. 1, 38 Am. Rep. 1. § 76 TIME FOR PRESENTATION. 121 otherwise, the drawee and all indorsers will be discharged. ^^ Though it has been held that, when a bill is made payable at a fixed time after its date, presentment for acceptance before that time is not necessary in order to charge the drawer or indorsers, it may be presented for acceptance at any time.^^ AVhat consti- tutes a reasonable time depends upon the nature of the instrument, the usages of trade, and the circumstances of the case.^^ A bill payable four months from date was presented for acceptance within a reasonable time where presented some five weeks before maturity ;^'^ and presentment of a bill draw^n in Georgia, payable in New York sixty days after sight, within two months and a half after the bill was drawn, was within a reasonable time.^^ A for- eign bill which is payable a certain number of days after sight need not be sent directly to the drawee for acceptance, but may be sent in the manner sanctioned by the customs of trade existing at the time, and, if such is the custom, may be sent to a broker in another country for negotiation, and presentment will be in 1* Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 144); Ariz. (§ 3447); 111. (§ 143); Kan. (§ 151); Md. (§ 163); Mich. (§ 146); Neb. (§ 143); N. Y. (§ 241); Ohio (§ 3176 h); R. I. (§ 152); Wis. (§ 1681-1). 15 National Park Bank v. Laitta, 127 App. Div. 624, 111 N. Y. Supp. 927. 16 Neg. Inst. Laws Colo., Conn., D. C. Fla., Idaho, Iowa, Ky., La.,' Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 193); Ariz. (§ 3489); 111. (§ 192); Kan. (§ 4); Md. (§ 16); Mich. (§ 2); Neb. (§ 191); N. Y. (§ 4); Ohio (§ 3178b); R. I. (§ 4); Wis. (§ 1675). Fugitt V. Nixon, 44 Mo. 295; Smith v. Janes, 20 Wend. (N. Y.) 192, 32 Am. Dec. 527; Wallace v. Agry, 5 Mason, 118, Fed. Cas. No. 17,097. i7Bachellor v. Priest, 29 Mass. (12 Pick.) 399. 18 Robinson v. Ames, 20 Johns. (N. Y.) 146, 11 Am. Dec. 259. But see Phoenix Ins. Co. v. Allen, 11 Mich. 501, 83 Am. Dec. 756, where a delay of 21 days was held unreasonable, and Aymar v. Beers, 7 Cow. (N. Y.) 705, 17 Am. Dec. 538, where a delay of 29 days was excusable because of distance and the illness of the payee. Delay in the mails is not chargeable to a holder who has sent bill for acceptance within a proper time. Walsh v. Blatchley, 6 Wis. 413. See, also, generally, on subject of reasonable time, Prescott Bank v. Caverly, 73 Mass. (7 Gray) 217, 66 Am. Dec. 473; Gowen v. Jackson, 20 Johns. (N. Y.) 176. 122 PRESENTMENT FOR ACCEPTANCE. § Hi time if made in the usual course of trade and not unreasonably delayed.i^ An indorser for the accommodation of the drawer is not discharged by the fact that presentment is not made until maturity, where the bill was negotiated by the drawer under an agreement, to which the indorser was not privy, that the bill should not be presented until that time.^o The drawer may waive presentment to the drawee by notifying the drawee not to pay .21 A waiver of acceptance by the drawer puts him in the same po- sition as if the bill had been presented and acceptance refused,"^ Reasonable hour; business day. Presentment for acceptance must be made before the bill is overdue, at a reasonable hour on a business day.^^ The rules gov- erning presentment for payment govern presentment for accept- ance in this respect.2* But presentment, two days before ma- turity, of an unaccepted sight draft indorsed, "Accepted. Pay- able at P. & M. Bank," is conclusively presumed to be a present- ment for acceptance, and not a presentment for payment.^s When the day for presentment falls upon Sunday, or a holi- day, the instrument is payable on the next succeeding business 19 Wallace v. Agry, 4 Mason, 336, Fed. Cas. No. 17,096. See, also, on effect of custom and usage, Jordan v. Wheeler, 20 Tex. 698. 20 Fall River Union Bank v. Willard, 46 Mass. (5 Mete.) 261. 21 Neederer v. Barber, Fed. Cas. No. 10,079. 22 Carson's Adm'rs v. Russell, 26 Tex. 452. 23 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 145); Ariz. (§ 3448); 111. (§ 144); Kan. (§ 152); Md. (§ 164); Mich. (§ 147); Neb. (§ 144); N. Y. (§ 242); Ohio (§ 3176-1); R. I. (§ 153); Wis. (§ 1681-2). The rule in Dana v. Sawyer, 22 Me. 244, 39 Am. Dec. 574, that a pre- sentment for payment at or about midnight is not at a reasonable hour, would doubtless apply by analogy to a presentment for acceptance. 21 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 146); Ariz. (§ 3449); 111. (§ 145); Kan. (§ 153); Md. (§ 165); Mich. (§ 148); Neb. (§ 145); N. Y. (§ 243); Ohio (§ 3176 j); R. I. (§ 154); Wis. (§ 1681-3). See post, chapter XII, Presentment for Payment, § 182. 25 Burrus v. Life Ins. Co., 124 N. C. 9, 32 S. E. 323. §V7 PLACE OF PRESENTMENT. 123 day.-'' Where Saturday is not otherwise a holiday, presentment may be made before twelve o'clock on that day.'^^ Rule where time is insufficient. If a holder of a bill drawn payable elsewhere than at the place of business or the residence of the drawee has not time, with the exercise of reasonable diligence, to present the bill for ac- ceptance before presenting it for payment on the day of its ma- turity, the delay caused by presenting tlie bill for acceptance be- fore presenting it for payment is excused, and does not discharge the drawers and indorsers.-^ Place of Presentment. § 77. If a place of payment is named in the bill, presentment must be made there. If a bill is one which requires a presentment for acceptance, and indicates a place where such presentment is to be made, a pre- sentment should, of course, be made at that place. If a place of payment is named in the bill, presentment for acceptance may be made there.^^ It must be remembered, however, that, other feat- 26 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 85); Ariz. (§ 3388); 111. (§ 85); Kan. (§ 92); Md. (§ 14); Mich. (§ 87); Neb. (§ 85); N. Y. (§ 145); Ohio (§ 3174 c); R. I. (§ 93); Wis. (§ 1678-15). 27 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 146); Ariz. (§ 3449); 111. (§ 145); Kan. (§ 153); Md. (§ 165); Mich. (§ 148); Neb. (§ 145); N. Y. (§ 243); Ohio (§ 3176 j); R. I. (§ 154); Wis. (§ 1681-3). 28 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 147); Ariz. (§ 3450); 111'. (§ 146); Kan. (§ 154); Md. (§ 166); Mich. (§ 149); Neb. (§ 146); N. Y. (§ 244); Ohio (§ 3176 k); R. I. (§ 155); Wis. (§ 1681-4). 29 Wolfe V. Jewett, 5 La. 614. The charter of Greater New York (§§ 1499-1504, inclusive) provides that, whenever the board of health shall publicly designate any part of 124 PRESENTMENT FOR ACCEPTANCE. § 73 ures requiring presentment being absent, presentment for accept- ance is no longer necessary if the bill is drawn payable at the res- idence or place of business of the drawee.^^ By Whom Presentment Must Be Made. § 78. Presentment must be made by or on behalf of the holder. Presentment for acceptance must be made by the holder or by one duly authorized to present the bill on his behalf.^^ It may be, and usually is, made by a notary on behalf of the holder.^^ To "Whom Presentment Must Be Made. § 79. Presentment must be made to the drawee or some person authorized to accept or refuse acceptance on his behalf. § 80. Where a bill is addressed to two or more drawees who are not partners, presentment must be made to them all un- less one has authority to accept or refuse acceptance for all, in which case presentment may be made to him only. the city as the seat of a contagious or infectious disease, persons or firms doing business within the infected district shall designate in a reg- ister, to be kept by the city clerk, a place outside of the said district, but within the city, at which presentment of bills and notes may be made. If no registry is made, presentment may be made to the city clerk, and notice of protest served by depositing it in one of the post offices in said city. 30 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 143); Ariz. (§ 3446); 111. (§ 142); Kan. (§ 150); Md. (§ 162); Mich. (§ 145); Neb. (§ 142); N. Y. (§ 240); Ohio (§ 3176 g); R. I. (§ 151); Wis. (§ 1681). 31 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 145); Ariz. (§ 3448); 111. (§ 144); Kan. (§ 152); Md. (§ 164); Mich. (§ 147); Neb. (§ 144); N. Y. (§ 242); Ohio (§ 31761); R. I. (§ 153); Wis. (§ 1681-2). 32 Wiseman v. Chiappella, 64 U. S. (23 How.) 368, 16 Law. Ed. 597; Whaley v. Houston, 12 La. Ann. 585; Stainback v. Bank of Virginia, 11 Grat. (Va.) 260. § 82 TO WHOM MADE. 125 § 81. Where the drav/ee is dead, presentment may be made to his personal representatives. § 82. Where the drawee has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of creditors, presentment may be made to him or to his trus- tee or assignee. To v»/^hom presentment rnupt be made — Urawee or his a^ent. It is a general rule that presentment for acceptance must be made to the drawee or to some person authorized to accept or re- fuse acceptance on his behalf.^^ If possible, presentment should be made to the drawee personally.^* Same — Bill addressed to two or more drawees not partners. If a bill is addressed to two or more drawees who are partners, presentment to one of them is, of course, sufficient ;2^ but, if such drawees are not partners, presentment must be made to them all, 33 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.', Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 145); Ariz. (§ 3448); 111'. (§ 144); Kan. (§ 152); Md. (§ 164); Mich. (§ 147); Neb. (§ 144); N. Y. (§ 242); Ohio (§ 3176 i); R. I. (§ 153); Wis. (§ 1681-2). In some of the negotiable instruments laws these sections required pre- sentment to be made to the "drawer," but the obvious error was cor- rected in the Rhode Island law (§ 153), and by amendment in New York (Laws 1898, c. 336, § 30). Cheek v. Roper, 5 Esp. 175. 34 Wiseman v. Chiappella, 64 U. S. (23 How.) 368, 16 Law. Ed. 397; Sharpe v. Drew, 9 Ind. 281. But presentment to a clerk of the drawee at his office, the drawee be- ing absent, is sufficient. Whaley v. Houston, 12 La. Ann. 585; Stain- back V. Bank of Virginia, 11 Grat. (Va.) 260. The mere absence of the drawee of a bill payable after date, when called on for acceptance, is not a refusal to accept. Bank of Wash- ington V. Triplett, 26 U. S. (1 Pet.) 25, 7 Law. Ed. 433. See, also. Bank of Red Oak v. Orvis, 42 Iowa, 691. 35 Mt. Pleasant Branch of State Bank v. McLeran, 26 Iowa, 306, 1 Am Rep. 273. 126 PRESENTMENT FOR ACCEPTANCE. § «-; unless one has authority to accept or to refuse acceptance for all, in which case presentment to him is sufficient.^^ Same — Drawee dead. If the drawee is dead, presentment may be made to his per- sonal representative,^^ but, though advisable for purposes of pro- test, it is not necessary to make presentment in such case.^^ Same — Bankruptcy or insolvency of drav/ee. Analogous to the rule that notice of dishonor may be given to the assignee of an insolvent party to commercial paper ^9 is the rule that, if the drawee is a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, presentment for ac- ceptance may be made to him or his trustees or assignees.*^ It will be seen that the rule is in the alternative, and presentment to either will be good. Bills Drawn In Sets. § 83. "Where a bill is drawn in a set, presentment of any one part for acceptance is sufficient. A bill being drawn in a set, presentment of any one part for 36 Subdivision 1, same sections of negotiable instruments laws as last above cited. 37 Subdivision 2, same sections of negotiable instruments laws as last above cited. 38Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 148); Ariz. (§ 3451); 111. (§ 147); Kan. (§ 155); Md. (§ 167); Mich. (§ ISO); Neb. (§ 147); N. Y. (§ 245); Ohio (§ 31761); R. L (§ 156); Wis. (§ 1681-5). 39Callahan v. Bank of Kentucky, 82 Ky. 231; American Nat. Bank v. Junk Bros. Lumber & Mfg. Co., 94 Tenn. 624, 30 S. W. 753, 28 L. R. A. 492. But see House v. Vinton Nat. Bank, 43 Ohio St. 346, 1 N. E. 129, 54 Am. Rep. 813. *o Subdivision 3, same sections of negotiable instruments laws as last above cited. § 86 DISHONOR. 127 acceptance is sufficient,*^ and it will not be presumed that the drawee will accept more than one part.*^ NON ACCEPTANCE. § 84. A bill is dishonored by nonacceptance : 1. When it is duly presented for acceptance and such an acceptance as is prescribed is refused or cannot be obtained; or 2. When presentment for acceptance is excused and the bill is not accepted. If a bill is duly presented for acceptance, and acceptance is re- fused or cannot be obtained, the bill is dishonored for nonaccept- ance.*^ It is also dishonored when presentment for acceptance is excused, for the reasons heretofore given, and the bill is not ac- cepted.** Rights and Duties of Holder. § 85. When, a bill is dishonored by nonacceptance, an immediate right of recourse against the drawers and indorsers ac- crues to the holder and no presentment for payment is necessary. § 86. But this right is lost if, after the bill has been duly pre- sented for acceptance, and has not been accepted within the prescribed time, the holder does not treat the bill as dishonored by nonacceptance. "Where a bill is dishonored by nonacceptance, the holder has an immediate right of recourse against the drawers and indorsers « Walsh V. Blatchley, 6 Wis. 413. 42 Commercial Bank v. Routh, 7 La. Ann. 128. 43 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 149); Ariz. (§ 3452); 111. (§ 148); Kan. (§ 156); Md. (§ 168); Mich. (§ 151); Neb. (§ 148); N. Y. (§ 246); Ohio (§ 3176 m); R. I. (§ 157); Wis. (§ 1681-6). 44 Same sections of negotiable instruments laws as last above cited. 128 PRESENTMENT FOR ACCEPTANCE. § 87 without presenting the bill for payment,^^ j^^^^ t^jg right is lost if, after tlie bill has been duly presented for acceptance, and has not been accepted within the prescribed time, the holder does not treat the bill as dishonored by nonacceptance, and protest it ac- cordingly.^s The liability of the drawers and indorsers being once fixed by a proper protest for nonacceptance, coupled with a proper notice, the right to recover against them is complete.*'^ Referee in Case op Need. § 87. The drawer and any indorser of a bill may insert thereon the name of a person to whom the holder may resort in case the bill is dishonored by nonacceptance. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit. The drawer or any indorser may insert in a bill of exchange the name of the person to whom the holder may resort in case of need, that is, if the bill is dishonored for nonacceptance or non- payment.*^ It is optional with the holder to resort to this referee *5 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 150); Ariz. (§ 3453); 111. (§ 149); Kan. (§ 157); Md. (§ 169); Mich. (§ 152); Neb. (§ 149); N. Y. (§ 247); Ohio (§ 3176m); R. I. (§ 158); Wis. (§ 1681-7). *6 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 151); Ariz. (§ 3454); 111. (§ 150); Kan. (§ 158); Md. (§ 170); Mich. (§ 153); Neb. (§ 150); N. Y. (§ 248); Ohio (§ 3176 o); R. L (§ 159); Wis. (§ 1681-8). *7 Wallace v. Agry, 4 Mason, 336, Fed. Cas. No. 17,096; Pendleton v. Knickerbocker Life Ins. Co., 5 Fed. 238; Sterry v. Robinson, 1 Day (Conn.) 11; Pecquet v. Mager, 7 La. 418; Lenox v. Cook, 8 Mass. 460; Plato V. Reynolds, 27 N. Y. 586; Carson v. Russell, 26 Tex. 452. 48 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 131); Ariz. (§ 3434); 111. (§ 130); Kan. (§ 138); Md. (§ 150); Mich. (§ 133); Neb. (§ 130); N. Y. (§ 215); Ohio (§ 3175 v); R. L (§ 139); Wis. (§ 1680-E). §87 REFEREE IN CASE OF NEED. 129 in case of need/^ but if the holder does resort to such referee, and the latter pays, he has recourse against the drawer for the full amount.^o A drawee in "case of need" of a draft for the price of goods, who pays the draft, has a special property in the goods, though ownership remains in the consignor. Basche v. Philips, 155 Pa. St. 103. By amendment in New York, the word "drawee" in the headline of the original law was changed to "referee." Laws 1898, c. 336, § 24. Payment of bills of exchange supra protest or for honor, see post, § 253. *9Same sections of the negotiable instruments laws as last above cited. This seems to change the law. See 1 Daniel, Negotiable Inst., § 111. 60 Chit. Bills, 186; Story, Bills, § 65. Opp. — PM. — 9 CHAPTER VIII. ACCEPTANCE OF BILLS OF EXCHANGE. § 88. Necessity. § 89. Nature. § 90. Revocation. § 91. Necessity of Writing and Signature of Drawee. § 92. Acceptance on Bill. § 93. Acceptance on Separate Instrument. § 94. Implied Acceptance. § 95. Medium of Payment. § 96. Presumption of Consideraition. § 97. Sufficiency of Consideration. § 98. Time of Acceptance. § 99. Insertion of Date. § 100. Insertion of Wrong Date. * § 101. Date Prima Facie Correct. § 102. General and Qualified Acceptance. § 103. Qualified Acceptance. § 104. Right to General Acceptance. § 105. Incomplete and Overdue Paper. § 106. Bills Drawn in Sets. § 107. Acceptance on More Than One Part. § 108. Certification. § 109. Effect of Certification. § 110. Necessity of Writing. § 111. Certification by Drawer. § 112. Certification by Holder. § 113. Promise to Accept. Necessity. § 88. The drawee is not liable on a bill or a check unless and until he accepts it, or promises to accept it. The rule that the drawee is not liable on a bill unless and until he accepts it ^ is a logical outcome of the rule that a bill does not, iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., 130 ^ 90 NATURE. 131 of itself, operate as an assignment of funds in the hands of the drawee.^ Before acceptance, there is no liability on the part of the drawee, because there is no privity of contract between him and any of the other parties to the bill, and he is a stranger to the transaction.^ Nature < — Revocation. § 89. The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer and means an acceptance completed by delivery or notification. § 90. An acceptance may be revoked before delivery of the ac- cepted bill. A contract relation between the drawee and the other parties to a bill is first effected by the acceptance of the bill by the drawee, as that is the signification of his assent to the order of Pa., Tenn., Utah, Va, Wash., W. Va., Wyo. (§ 127); Ariz. (§ 3430); 111. (§ 126); Kan. (§ 134); Md. (§ 146); Mich. (§ 129); Neb. (§ 126); N. Y. (§ 211); Ohio (§ 3175 r); R. I. (§ 135); Wis. (§ 1680 a). Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182; Luflf v. Pope, 5 Hill (N. Y.) 413; Seattle Shoe Co. V. Packard, 43 Wash. 427, 86 Pac. 845; Baltimore & Ohio R. Co. v. First Nat. Bank, 102 Va. 753, 47 S. E. 837. 2 See ante, §§ 68-70. 3 Colorado Bank v. Boettcher, 5 Colo. 185, 40 Am. Rep. 142; Luff v. Pope, 5 Hill (N. Y.) 413; Bailey v. Southwestern Railroad Bank, 11 Fla. 266; Bullard v. Randall, 67 Mass. (1 Gray) 605, 61 Am. Dec. 433; Kimball V. Donald, 20 Mo. 577, 64 Am. Dec. 209; Hankin v. Squires, 5 Biss. 186, Fed. Cas. No. 6,025; Northumberland Bank v. AlcMichael, 106 Pa. 460, 51 Am. Rep. 529; Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182; Seattle Shoe Co. v. Packard, 43 Wash. 527, 86 Pac. 845; Baltimore & Ohio R. Co. v. First Nat. Bank, 102 Va. 753, 47 S. E. 837. The same is true of an order. Woodruff v. Hensel, 5 Colo. App. 103, 37 Pac. 948; Weinstock v. Bellwood, 75 Ky. (12 Bush.) 139; Reilly v. Daly, 159 Pa. 605, 28 Atl. 493. But see Gurnee v. Hutton, 63 Hun, 197, 17 N. Y. Supp. 667, and Brem v. Covington, 104 N. C. 589, 10 S. E. 706, 132 ACCEPTANCE OF BILLS. §91 the drawer.* To be binding, however, an acceptance must be com- pleted by delivery or notification.^ If an acceptance is dated, the date given is prima facie the true date of the acceptance.^ An acceptance may be revoked before the delivery of the ac- cepted bill ; '^ but a drawee cannot revoke his acceptance, on dis- covering the insolvency of the drawer, after haA'ing indorsed his acceptance on the bill and redelivered it to the agent of the holder, though he has no funds of .the drawer in his hands.^ Necessity op "Writing. § 91. Under most of the negotiable instruments acts the accept- ance must be in writing and signed by the drawee. § 92. The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill, and, if such request is refused, may treat the bill as dis- honored. where orders were held to be equitable assignments, and the drawers to be liable without acceptance. * Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 132); Ariz. (§ 3435); 111. (§ 131); Kan. (§ 139); Md. (§ 151); Mich. (§ 134); Neb. (§ 131); N. Y. (§ 220); Ohio (§ 317Sw); R. L (§ 140); Wis. (§ 1680 f). 5 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N.. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 191); Ariz. (§ 3487); 111. (§ 190); Kan. (§ 2); Md. (§ 14); Mich. (§ 2); Neb. (§ 189); N. Y. (§ 2); Ohio (§ 3178); R. I.(§ 2); Wis. (§ 1675). 6 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 11); Ariz. (§ 3314); 111. (§ 11); Kan. (§ 18); Md. (§ 30); Mich. (§ 13); Neb. (§ 11); N. Y. (§ 30); Ohio (§ 3171 j); R. I. (§ 19); Wis. (§ 1675-11). 7 Cox V. Troy, 5 Barn. & Aid. 474. 8 Trent Tile Co. v. Ft. Dearborn Nat. Bank, 54 N. J. Law, 33, 23 Atl. 423, distinguishing Cox v. Troy, 5 Barn. & Aid. 474. § 93 NECESSITY OF WRITING. 133 § 93. An acceptance on a separate instrnment is binding only in favor of one to whom it is shown and who, on the faith thereof, receives the bill for value. Must be in writing and signed by drawee. An oral acceptance of a bill is good, in the absence of a statute requiring a written one.^ But in the states that have adopted the negotiable instruments law,^° and in some other states, the ac- 9Heitschmidt v. McAlpin, 59 III. App. 231; Spurgeon v. Swaih, 13 Ind. App. 188, 41 N. E. 397; Pierce v. Kittredge, 115 Mass. 374; Spaulding v. Andrews, 48 Pa. 411. An oral acceptance is not within the statute of frauds. Walton v. Man- deville (Iowa) 5 N. W. 776. On a rehearing of the case last cited (56 Iowa, 597, 9 N. W. 913, 41 Am. Rep. 123), it was held that, if the drawee has no funds of the drawer on hand, his oral acceptance is within the statute, as a promise to pay the debt of another. To same effect see Pike V. Irwin, 1 Sandf. (N.Y.) 14; Manley v. Geagan, 105 Mass. 445. Oral promise to accept, see post, § 113. lONeg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 132); Ariz. (§ 3435); 111. (§ 131); Kan. (§ 139); Md. (§ 151); Mich. (§ 134); Neb. (§ 131); N. Y. (§ 220); Ohio (§ 3175 w); R. I. (§ 140); Wis. (§ 1680 f). Seattle Shoe Co. v. Packard, 43 Wash. 527, 86 Pac. 845, 117 Am. St. Rep. 1064; Baltimore & O. R. Co. v. First Nat. Bank, 102 Va. 753, 47 S. E. 837; National Park Bank v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927. Complaint must allege written acceptance. Wadhams v. Portland, V. & Y. R. Co., n Wash. 86, 79 Pac. 597. The negotiable in- struments laws adopted in some of the states provide that the acceptance musit be signed by the "drawer." This palpable error is corrected in the Rhode Island law (§ 140), and by amendment in New York (Laws 1898, c. 336, § 27). Previously an oral acceptance was good in Connecticut (Jarvis v. Wil- son, 46 Conn. 901, 33 Am. Rep. 18); Illinois (Edward Hines Lumber Co. V. Anderson, 141 111. App. 527); Massachusetts (Pierce v. Kittredge, 115 Mass. 374); New York, prior to Rev. St. pt. 2, c. 4, tit. 2, § 6 (Leonard v. Mason, 1 Wend. [N. Y.] 522; Ontario Bank v. Worthington, 12 Wend. [N. Y.] 593, and Johnson v. Clark, 39 N. Y. 216); and North Carolina (Short V. Blount, 99 N. C. 49, 5 S. E. 190). The negotiable instruments law affirms the rule previously existing in Alabama (Code, §§ 2101, 2102); Michigan (How. Ann. St. § 1583); Missouri (Rev. St. 1889, § 719. See Haeberle v. O'Day, 61 Mo. App. 134 ACCEPTANCE OF BILLS. § 93 eeptance must be in writing and signed by the drawee,^ As no contrary provision for the acceptance of a promise to pay a check has been made, this provision is deemed to apply to checks.^^ In considering this section the distinction between an action founded on the instrument as an accepted bill or check, and one founded on a breach of a promise to accept, should be kept in mind.^^ The best form of a general acceptance consists of the word "Ac- cepted" written across the face of the bill, followed by the sig- nature of the drawee, but the signature alone is a sufficient writ- ten acceptance,^* and other words than the word "Accepted" will suffice if the intention is to accept the bill.^^ The New York court, in holding that there is a sufficient acceptance where the drawee writes his name across the face of the bill, states that ' ' any words written by the drawee on a bill, not putting a direct negative upon its request, as 'Accepted,' 'Presented,' 'Seen,' the day of the month, or a direction to a third person to pay it, is prima facie a complete acceptance by the law merchant. "^^ Same — Acceptance on face of bill or on separate instrument. The holder, on presenting a bill for acceptance, may require that the acceptance be written on the bill, and may treat the bill 390) ; Oregon (Hill's Ann. Laws, § 3194; Erickson v. Inman, Poulson & Co., 34 Or. 44, 54 Pac. 949); Pennsylvania (Act May 10, 1881, P. L. 17). But in Pennsylvania the acceptor only could take advantage of the stat- ute. Ulrich v. Howner, 156 Pa. 414, 27 Atl. 243. 11 California (Civ. Code, § 3193); Maine (Rev. St. c. 32, § 10). 12 Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. Response of drawee bank over telephone that check was good held insufficient. Id. iSBoyce v. Edwards, 29 U. S. (4 Pet.) Ill, 7 Law. Ed. 22; Henrietta Nat. Bank v. State Nat. Bank, 80 Tex. 648, 16 S. W. 321, 26 Am. St. Rep. 773. i^Fowler v. Gate City Nat. Bank, 88 Ga. 29, 13 S. E. 831; Kaufman v. Barringer, 20 La. Ann. 419; Mechanics' Bank v. Yager, 62 Miss. 529; Wheeler v. Webster, 1 E. D. Smith (N. Y.) 1; Spear v. Pratt, 2 Hill (N. Y.) 582, 38 Am. Dec. 600. 15 Spear v. Pratt, 2 Hill (N. Y.) 582, 38 Am. Dec. 600; Vanstrum v. Liljengren, 37 Minn. 191, 33 N. W. 555; Cortelyou v. Maben, 22 Neb. 697, 36 N. W. 159, 3 Am. St. Rep. 284. 16 Spear v. Pratt, 2 Hill (N. Y.) 582, 38 Am. Dec. 600. § 94 IMPLIED ACCEPTANCE. I35 as dishonored if this is refused.^^ This section is not confined to sight bills, but seems to be applicable to all bills of exchangers An acceptance written on a paper other than the bill itself binds the acceptor only in favor of one to whom it is shown, and who, on the faith thereof, receives the bill for value.^^ Implied Acceptance. § 94. Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after the delivery, or within such other period as the holder may allow, to return the bill accepted or nonac- cepted to the holder, he will be deemed to have accepted the same. An exception to the rule that the acceptance must be in writing and signed by the drawee is found in the rule that, if a drawee to whom a bill is delivered for acceptance destroys it, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or not accepted, he will be deemed to have accepted it.^o Under 17 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La.. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 133); Ariz. (§ 3436); 111! (§ 132); Kan. (§ 140); Md. (§ 152); Mich. (§ 135); Neb. (§ 132); N. Y. (§ 221); Ohio (§ 3175x); R. I. (§ 141); Wis. (§ 1680g). 18 National Park Bank v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927. 19 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La.. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.,' Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 134); Ariz. (§ 3437); 111! (§ 133); Kan. (§ 141); Md. (§ 153); Mich. (§ 136); Neb. (§ 133); N. Y. (§ 222); Ohio (§ 3175 y); R. I. (§ 142); Wis. (§ 1680 h). See, also, Fairchild v. Feltman, 32 Hun (N. Y.) 398. Acceptance may be made by telegraph. In re Armstrong, 41 Fed. 381; Garrettson v. North Atchison Bank, 39 Fed. 163, 7 L. R. A. 428; Hen- rietta Nat. Bank v. State Nat. Bank, 80 Tex. 648, 16 S. W. 321, 26 Am. St. Rep. m. 20 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho. Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 137); Ariz. (§ 3440); 111. 136 ACCEPTANCE OF BILLS. § 94 the great weight of authority as it existed prior to the negotiable instruments law, mere retention of a bill could not amount to an implied acceptance, in the absence of contract or settled course of dealing between the parties to the contrary. This rule is that of the negotiable instruments law, and under it some affirmative tortious act on the part of the drawee is required, and a mere retention of the instrument beyond the proper time will not amount to an acceptance.^^ In speaking of this general question the "Wisconsin supreme court has, in a case dealing with a non- negotiable bill of exchange, used the following language: "Upon the question of law as to when implied or constructive accept- ance takes place, the authorities are reasonably clear and approx- imately unanimous. Upon delivery for acceptance, the drawee is not bound to act at once. He has a right to a reasonable time — usually twenty-four hours — to ascertain the state of accounts be- tween himself and the drawer, and until expiration of that time the holder has no right to demand an answer, nor without categorical answer, to deem the bill either accepted or dishonored ; not ac- cepted, because of the right of the drawee to consider before he binds himself; not dishonored because both drawer and drawee have the right that their paper be not discredited during such period of investigation. After the expiration of that reasonable time the holder has a right to know whether the drawee assumes (§ 136); Kan. (§ 144); Md. (§ 156); Mich. (§ 139); Neb. (§ 136); N. Y. (§ 225); Ohio (§ 3176 a); R.L (§ 145); Wis. (§ 1680 k). 21 This construction of the rule is expressly recognized by the nego- tiable instruments law as adopted in Wisconsin. Negotiable Inst. Law, § 1680 k. Colorado Nat. Bank v. Boettcher, 5 Colo. 185, 40 Am. Rep. 142; Hol- brook V. Payne, 151 Mass. 383, 24 N. E. 210, 21 Am. St. Rep. 456; Short V. Blount, 99 N. C. 49, 5 S. E. 190; Matteson v. Moulton, 79 N. Y. 627. This decision was based on 1 Rev. St. N. Y. p. 769, § 11, which is identical with the rule of the negotiable instruments laws given in the text. The Missouri statute (Rev. St. § 724) is the same, and has been construed m the same way. Dickenson v. Marsh, 57 Mo. App. 566. See Austin v. Papanti, 197 Mass. 584, 83 N. E. 1088, where one turned an order over to the drawee who had funds to pay the same, and the court held there was no acceptance, saying "that he could have accepted the order if he had chosen and that he had money enough to pay is not enough." § 94 IMPLIED ACCEPTANCE. Vol liability to him by acceptiug, and, if not, lie has a right to a re- turn of the document, so that he may protest or otherwise proceed to preserve his rights against the drawer. The concensus of au- thority is, however, that the duty rests on the holder to demand either acceptance or return of the bill, and that mere inaction on the part of the drawee has no effect. After the expiration of this time for investigation, the drawee may by retention of the bill, accompanied by other circumstances, become bound as an acceptor ; not, however, by mere retention. There seem to be two classes of conduct recognized by the authorities as charging the drawee — one purely contractual, as where the retention is ac- companied by such custom, promise or notification as to warrant the holder to the knowledge of the drawee, in understanding that the retention declares acceptance ; the other, where the conduct of the drawee is substantially tortious, and amounts to a conver- sion of the bill. This is the phase of conduct whicli our negotiable instruments law has undertaken to define and limit as refusal (not mere neglect) to return the bill or destruction of it; reiterating the common-law rule that mere retention of the bill is not ac- ceptance. The doctrine of constructive acceptance is based on the general principles of estoppel. If the conduct of the drawee will prejudice the existing rights of the holder, unless it means acceptance, and the drawee has knowledge of such fact, he is estopped to deny the only purpose which could render his con- duct innocuous; namely, the acceptance of the bill. This under- lying principle suggests the reasons for many of the limitations upon the implication of acceptance from conduct; as, for example, that such implication arises only when the bill is presented for acceptance, and that no one but the holder (payee or indorsee) can make such technical presentment. Only when the drawee knows that acceptance is expected would he suppose that his con- duct can lead to a belief that he does accept. Only when the pre- sentment is by the holder, whose conduct and rights must be af- fected by acceptance or refusal, is the drawee charged by the strict lules of the law merchant with notice that his conduct may so injuriously affect the person delivering the bill to him. "22 In 22 Westbcrg V. Chicago Lumber & Coal Co, 117 Wis. 589, 94 N. W. 572 138 ACCEPTANCE OF BILLS. § 95 apparent contradiction to the plain import of the words of the statute, some courts have held that, under the statute, a mere re- tention is sufficient to constitute acceptance.^^ In one of these the following language is used: "It is apparent, we think, that in the enactment of this section, the legislature regarded the presentation for acceptance as a demand for acceptance, which, when the bill is retained by the drawee, implies a demand for its return within the time specified, and that, therefore, the neglect or failure to return is a refusal to return the bill." ^^ Both of the cases cited as holding contrary to what is believed to be the cor- rect view were cases of checks and might, perhaps, be justified on the theory that retention is contrary to a settled business cus- tom and hence an acceptance; but to hold bare retention an ac- ceptance is believed erroneous. But a retention of the instrument, coupled with a written statment by the drawee, in a letter to the payee, that it "will be disposed of in some way or other when I am there," amounts to an acceptance.^^ Medium of Payment. § S5. The acceptance must not provide that the drawee will per- form his promise by any other means than the payment of money. Inasmuch as the negotiable instruments law requires a bill of exchange to pay a sum certain in money,^^ the subsequent pro- vision that the acceptance of the bill must not express that the drawee will perform his promise by any other means than the payment of money^'^ is only logical. 23Wisner v. First Nat. Bank, 220 Pa. 121, 68 Atl. 955; State Bank v. Weiss, 46 Misc. 93, 91 N. Y. Supp. 276. 24Wisner v. First Nat. Bank, 220 Pa. 121, 68 Atl. 955. 25 Hough V. Loring, 41 Mass. (24 Pick.) 254. 26 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 126); Ariz. (§ 3429); 111. (§ 125); Kan. (§ 133); Md. (§ 145); Mich. (§ 128); Neb. (§ 125); N. Y. (§ 210); Ohio (§ 3175q); R. L (§ 134); Wis. (§ 1680). 27 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., § 97 CONSIDERATION PRESUMED. 139 Consideration. § 96. An acceptance is presumed to have been based on a val- uable consideration. § 97. Value is any consideration sufficient to support a simple contract, including an antecedent or precedent debt. Consideration for acceptance. It is presumed that an acceptance was based on a sufficient and valuable consideration,^^ for the acceptance, of itself, operates as an admission that the drawee has funds of the drawer in his hands.29 This presumption may be rebutted by evidence as to the relations and dealings of the parties.^^ Value is any consid- eration sufficient to support a simple contract. A present existing debt of the drawee to the drawer is a sufficient consideration for an acceptance by the former,^! and so is a debt due from the Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 132); Ariz. (§ 3435); 111. (§ 131); Kan. (§ 139); Md. (§ 151); Mich. (§ 134); Neb. (§ 131); N. Y. (§ 220); Ohio (§ 3175 w); R. I. (§ 140); Wis. (§ 1680 f). 28 Mechanics' Bank v. Livingston, 33 Barb. (N. Y.) 458; National Park Bank v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 24); Ariz. (§ 3327); 111. (§ 24); Kan. (§ 31); Md. (§ 43); Mich. (§26); Neb. (§ 24); N. Y. (§ 50); Ohio (§ 3171 w); R. I. (§ 32); Wis. (§ 1675-50). 29 State Bank v. Clark, 1 Hawks (N. C.) 36; Gillilan v. Myers, 31 111. 525; Kendall v. Galvin, 15 Me. 131, 32 Am. Dec. 141; Byrd v. Bertrand, 2 Eng. (Ark.) 321; Alvord v. Baker, 9 Wend. (N. Y.) 323; Richardson v'. Carpenter, 46 N. Y. 660; Raborg v. Peyton, 15 U. S. (2 Wheat.) 385, 4 Law. Ed. 144. 30 Parks V. Nichols, 20 111. App. 143; Hidden v. Waldo, 55 N. Y. 295. 31 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 25); Ariz. (§ 3328); 111. (§ 25); Kan. (§ 32); Md. (§ 44); Mich. (§ 27); Neb. (§ 25); N. Y. (§ 51); Ohio (§ 3171 x); R. I. (§ 33); Wis. (§ 1675-51). First Nat. Bank v. Snell, 32 Iowa, 167; Fisher v. Beckwith, 19 Vt. 31 46 Am. Dec. 174. 140 ACCEPTANCE OF BILLS. § 98 drawee to a third person.32 A shipment of merchandise by the debtor to the drawee is a sufficient consideration for an accept- ance by the latter of an order in favor of the creditor for the proceeds of the goods,^^ and the transfer to the acceptor of a bill of lading is a sufficient consideration for his acceptance, though the cargo covered by the bill was practically worthless.^* Serv- ices rendered by plaintiff at the request of defendant, in procur- ing the withdrawal of a contractor's objections to plaintiff's ac- count for materials furnished for a building on which defendant was loaning money, is a sufficient consideration for an acceptance by defendant of an order from the contractor for the value of such materials; 35 and forbearance to file a mechanic's lien against a building belonging to the drawer is a sufficient consideration for an acceptance by the drawee.=^^ As between the payee and the ac- ceptor, the acceptor cannot set up a want of consideration,^^ and one of several joint acceptors cannot defeat a recovery as to him- self by showing that his acceptance was for accommodation, and was made after the others had accepted.^^ Time of Acceptance. § 98. The drawee is allowed twenty-four hours after presentment in which to decide whether or not he*will accept the bill; but the acceptance, if given, dates as of the date of presen- tation. What constitutes a reasonable time after presentment for the drawee to decide on acceptance or not is now definitely fixed by 32 Arnold v. Sprague, 34 Vt. 402. 33 Olds Wagon-Works v. Coombs, 124 Ind. 62, 24 N. E. 589. 34 Kelly V. Lynch, 22 Cal. 661. 35 Nesbit V. Bendheim, 15 N. Y. Supp. 300. 36 Flanagan v. Mitchell, 16 Daly, 223, 10 N. Y. Supp. 234. 37Townsley v. Sumrall, 27 U. S. (2 Pet.) 170, 7 Law. Ed. 68; Iselin v. Chemical Nat. Bank, 16 Misc. 437, 40 N. Y. Supp. 388; Grant v. Ellicott, 7 Wend. (N. Y.) 227; Meyer v. Beardsley, 30 N. J. Law, 236. ssMcNabb v. Tally, 27 La. Ann. 640. § 101 INSERTION OF DATE. 141 the negotiable instruments laws at twenty-four hours.^^ The ac- ceptance, when given, dates as of the day of presentment.**^ § 99. Where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may in- sert therein the true date of issue or acceptance and the instrument will be payable accordingly. § 100. The insertion of a wrong date does not avoid the instru- ment in the hands of a holder in due course. § 101. Where an acceptance is dated, such date is deemed prima facie correct. Insertion of date. By express enactment, where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the in- strument will be payable accordingly.*! The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course ; but, as to him, the date so inserted is to be regarded as the true date.*^ The language of the act would seem to warrant the construction that the rule would be otherwise as 39 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 136) ; Ariz. (§ 3439) ; 111. (§ 135); Kan. (§ 143); Md. (§ 155); Mich. (§ 138); Neb. (§ 135); N. Y. (§ 224); Ohio (§ 3176); R. I. (§ 144); Wis. (§ 1680 j). Heretofore in Massachusetts and Rhode Island the drawee had until two o'clock of the day following presentment for acceptance. Pub. St. Mass. 1882, c. 77, § 17; Gen. St. R. I. c. 166, § 5. *o Same sections of negotiable instruments laws as last above cited. *i Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, 'Va., Wash., W. Va., Wyo. (§ 13); Ariz. (§ 3316); 111 (§ 13); Kan. (§ 20); Md. (§ 32); Mich. (§ 15); Neb. (§ 13); N. Y. (§ 32); Ohio (§ 31711); R. I. (§ 21); Wis. (§ 1675-13). *2 Same sections of negotiable instruments laws as last above cited. 142 ACCEPTANCE OF BILLS. § 102 to one becoming a party prior to the completion of the instru- ment.*^ Date prima facie correct. By the express provisions of the act when an acceptance is dated, such date is prima facie deemed the true date of the ac- ceptance.** General and Qualified Acceptance. § 102. An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms va- ries the effect of the bill as drawn. An acceptance of the order of the drawer without qualification, and according to the tenor of the bill, is a general acceptance.*^ 43 Same sections negotiable instruments laws last above cited, con- strued with Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§§ 14, 124, 125); Ariz. (§§ 3317, 3427, 3428); 111. (§§14, 123, 124); Kan. (§§ 21, 131, 132); Md. (§§ 33, 143, 144); Mich. (§§16, 126, 127); Neb. (§§ 14, 123, 124); N. Y. (§§ 33, 205, 206); Ohio (§§3171 m, 3175 o, 3175 p); R. I. (§§ 22, 132, 133); Wis. (§§ 1675-14, 1679-5, 1679-6). But see Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 6); Ariz. (§ 3309); 111. (§ 6); Kan (§ 13); Md. (§ 25); Mich. (§ 8); Neb. (§ 6); N. Y. (§ 25); Ohio (§ 3171 e); R. I. (§ 14); Wis. (§ 1675-6). 4* Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 11); Ariz. (§ 3314); 111. (§ 11); Kan. (§ 18); Md. (§ 30); Mich. (§ 13); Neb. (§ 11); N. Y. (§ 30); Ohio (§ 3171 j); R. I. (§ 19); Wis. (§ 1675-11). See, also, ante, chapter III, § 16. 45 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 139); Ariz. (§ 3442); 111. (§ 138); Kan. (§ 146); Md. (§ 158); Mich. (§ 141); Neb. (§ 138); N. Y. (§ 227); Ohio (§ 3176c); R. I. (§ 147); Wis. (§ 1680m). Acceptance qualified in form construed to be general, see post, ^ 103. § 103 QUALIFIED ACCEPTANCE. 143 Any acceptance which varies the effect of the bill as drawn is a qualified acceptance.^^ Qualified Acceptance. § 103. An acceptance is qualified which is: 1. Conditional, that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated; 2. Partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn; 3. Local, that is to say, an acceptance to pay only at a particular place; Qualification. — But an acceptance to pay at a par- ticular place is a general acceptance, unless it ex- pressly states that the bill is to be paid there only and not elsewhere; 4. Qualified as to time; 5. The acceptance of some one or more of the drawees, but not of all. The most common form of qualified acceptance is the condi- tional acceptance, which makes payment by the acceptor depend- 46 Same sections of negotiable instruments laws last above cited. The provisions of the English Bills of Exchange Act 1882 (45 and 46 Vict. c. 61, § 19) are the same as those of the negotiable instruments laws, and un- der them it has been held that where a bill was drawn by L. D. F. pay- able "to the order of L. D. F.," and the drawees struck out the word ''order," and accepted "in favor of L. D. F. only, payable at the Alliance Bank, London," the acceptance did not vary the effect of the bill as drawn, and hence was not a qualified acceptance, but was a general ac- ceptance. The court in this case said that the words "accepted in favor of L. D. F." indicated an acceptance "of a bill of which F. is the drawer or payee," and that the mercantile effect of the bill was not altered by adding the word "only," as it indicated merely "that the acceptance is of a bill of which F. is the only drawer." Decroix, Verley et Cie v. Meyer & Co., 25 Q. B. Div. 343. 144 ACCEPTANCE OF BILLS. § 103 ent on the fulfillment of a condition therein stated.*^ An accept- ance is conditional if it is to pay ''according to contract," ^^ or on the completion of a building according to contract/'' or to pay when in funds^^o or out of a particular fund.^i The condition mast be espressed.52 Sometimes an acceptance expressly conditional in form is not such in fact, but is an absolute, unqualified ec- ceptance.53 The condition may be subsequently waived by the ac- ceptor,^^ Under the negotiable instruments acts, an acceptance to pay part only of the sum named in the bill,^^ or one which is speeific- 47Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 141); Ariz. (§ 3444); 111. (§ 140); Kan. (§ 148); Md. (§ 160); Mich. (§ 143); Neb. (§ 140); N. Y. (§ 229); Ohio (§ 3176 e); R. I. (§ 149); Wis. (§ 1680 o). Conditional promise to accept, see ante, § 113. 48 Haseltine v. Dnnbar, 62 Wis. 162, 22 N. W. 165. 49Newhall v. Clark, 57 Mass. (3 Cush.) 376, 50 Am. Dec. 741; Somers V. Thayer, 115 Mass. 163; Greene v. Duncan, Z7 S. C. 239, 15 S. E. 956. But see Hughes v. Fisher, 10 Colo. 383, 15 Pac. 702. 50 Campbell v. Pettengill, 7 Me. 126, 20 Am. Dec. 349; Hunt v. Williams, IS R. I. 595, 10 Atl. 645; Owen v. Iglandor, 44 Tenn. (4 Cold.) 15; Law- rence V. Phipps, 67 Plun, 61, 22 N. Y. Supp. 16. Acceptance when "in funds" means cash funds. Campbell v. Petten- gill, 7 Me. 126, 20 Am. Dec. 349. The acceptor is liable when the money is placed to his credit, though he has not actually received it. Wallace v. Douglas, 116 N. C. 659, 21 S. E. 387. He must pay out of the first funds of the drawer that he re- ceives. Wintermute v. Post, 24 N. J. Law, 420; Perry v. Harrington, 43 Mass. (2 Mete.) 368. 5iFlanagan v. Mitchell, 16 Daly, 223, 10 N. Y. Supp. 23.4. See, also, Rob- inson V. Gray, 17 Misc. 341, 39 N. Y. Supp. 1066; Hazelton Mercantile Co. V. Union Imp. Co., 143 Pa. 573, 22 Atl. 906. 52 Cofifman v. Campbell, 87 111. 98; Haines v. Nance, 52 111. App. 406. 53 Cowan V. Hallack, 9 Colo. 572, 13 Pac. 700; Brabazon v. Seymiour, 42 Conn. 551, where a conditional acceptance was held to become absolute on fulfillment of the condition. 54 Hough V. Loring, 41 Mass. (24 Pick.) 254. The acceptor cannot, after defeating the condition by his own acts, set it up as a defense to an action on the acceptance. Risley v. Smith, 64 N. Y. 576; Herter v. Goss & Edsall Co., 57 N. J. Law, 42, 30 Atl. 252. 55 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., §104 QUALIFIED ACCEPTANCE. 145 ally qualified or limited as to time,^^ or an acceptance by one or more of several drawees, less than all," are qualified acceptances, as is an acceptance to pay only at a particular place.^^ The vital word in this last clause is "only," for whatever may have been the rule heretofore, it is now provided by the negotiable instru- ments laws that an acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only, and not elsewhere.^^ § 104. The holder may refuse to take a qualilied acceptance, and if he does not obtain an unqualified acceptance may treat the bill as dishonored by nonacceptance. Where a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill, unless they have expressly or impliedly authorized the holder to take a qualified acceptance, or subsequently assent thereto. When the drawer or indorser receives notice of a quali- fied acceptance, he must, within a reasonable time, ex- Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 141); Ariz. (§ 3444); 111. (§ 140); Kan. (§ 148); Md. (§ 160); Mich. (§ 143); Neb. (§140); N. Y. (§ 229); Ohio (§ 3176 e); R. I. (§ 149); Wis. (§ 1680 o). Phillips V. Frost, 29 Me. V. But see Peterson v. Hubbard, 28 Mich. 197. 56 Subdivision 4, same sections of negotiable instruments laws as last above cited. Vanstrum v. Liljengren, 37 Minn. 191, 33 N. W. 555. 67 Subdivision 5, same sections of negotiable instruments laws 3« last above cited. 58 Subdivision 3, same sections of negotiable instruments law^s as las-i above cited. Wallace v. McConnell, 38 U. S. (13 Pet.) 136, 10 Law. Ed. 95; Bank of U. S. v. Smith, 24 U. S. (11 Wheat.) 172, 6 Law. Ed. 443. 59Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah; Va., Wash., W. Va., W^o. (§ 140); Ariz. (§ 3443); 111. (§ 139); Kan. (§ 147); Md. (§ 159); Mich. (§ 142); Neb. (§ 139); N. Y. (§ 228); Ohio (§ 3176 d); R. I. (§ 148); Wis. (§ 1680 n). Except as qualified by statutory enactment, the English rule was dif- ferent. Rome v. Young, 2 Brod. & B. 165. Opp. — Sel. — 10 146 ACCEPTANCE OF BILLb. § 105 press his dissent to the holder, or he will be deemed to have assented thereto. The holder has a right to a general "unqualified acceptance by the drawee, and may refuse to take a qualified acceptance, and may treat the bill as dishonored by nonacceptance if he does not obtain an unqualified acceptance.^° Unless the drawer and in- dorsers have expressly or impliedly authorized or subsequently assented to the taking of a qualified acceptance, they are dis- charged from liability in case one is taken f^ but, if a drawer or indorser is notified of a qualified acceptance, he must express his dissent to the holder within a reasonable time, or he will be deemed to have assented to such acceptance.^^ In determining what is a "reasonable time," regard is to be had to the nature of the instrument, the usage of trade or business, if any, and the facts of the particular case.^^ Incomplete, Overdue Paper and Bn.LS Drawn in Sets. § 105. A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or v/hen it is over- due, or after it has been dishonored by a previous refusal to accept, or by nonpayment. But when a bill payable after sight is dishonored by nonacceptance and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment. A bill may be accepted before it is signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has eoNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 142); Ariz. (§ 3445); 111. (§ 141); Kan. (§ 149); Md. (§ 161); Mich. (§ 144); Neb. (§ 141); N. Y. (§ 230); Ohio (§ 3176 f); R. I. (§ ISO); Wis. (§ 1680 p). Shakelford v. Hooker, 54 Miss. 716. 61 Same sections of negotiable instruments laws as last above cited. 62 Same sections of negotiable instruments laws as last above cited. 63Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., § 107 BILLS IN SETS. 147 been dishonored, by a refusal to accept or pay.^^ This is in ac- cordance with the common law.^^ But when a bill payable after sight is dishonored by nonacceptance, and the drawee subse- quently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment.^^ § 106. When a bill is drawn in sets, the acceptance may be written on any part and it must be written on one part only. § 107. If the drawee accepts more than one part and such ac- cepted parts are negotiated to different holders in due course, he is liable on every such part as if it were a separate bill. Where a bill is made out in a set, the acceptance may be written on any part, but must be written on one part only.^'' But if the drawee accept more than one part, and they are thereafter nego- tiated to different holders in due course, the drawee is liable on each part accepted, as on a separate bill.^^ Where the first and Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or , Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 193); Ariz. (§ 3489); 111. (§ 192); Kan. (§ 4); Md. (§ 16); Mich. (§ 2); Neb. (§ 191); N. Y. (§ 4); Ohio (§ 3178 b); R. I. (§ 4); Wis. (§ 1675). 6"! Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 138); Ariz. (§ 3441); 111. (§ 137); Kan. (§ 145); Md. (§ 157); Mich. (§ 140); Neb. (§ 137); N. Y. (§ 226); Ohio (§ 3176B); R. I. (§ 146); Wis. (§ 1680 L). 65 Harvey v. Cane, 34 Law T. (N. S.) 64; Spalding v. Andrews. 48 Pa. 413; Grant v. Shaw, 16 Mass. 344. 66 Same sections of negotiable instruments laws as last above cited. ^'< >Ieg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 181); Ariz. (§ 3484); 111. (§ 180); Kan. (§ 188); Md. (§ 200); Mich. (§ 183); Neb. (§ 180); N. Y. (§ 313); Ohio (§ 3177 r); R. I. (§ 189); Wis. (§ 1681-38). 68 Same sections of negotiable instruments laws as last above cited. See, also, Bank of Pittsburgh v. Neal, 63 U. S. (22 How.) 96, 16 Law. Ed. 248. 148 ACCEPTANCE OF BILLS. § lOS second of a set are accepted, the drawer is liable on both, if he authorized or ratified the negotiation, and there was no collusion between the acceptor and the holders.^^ Certification, § 108. A bank is not liable to the holder of a check unless and until it accepts or certifies it. As a logical outcome of the rule that a check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank,"*^ the negotiable instruments laws provide that the bank is not liable to the holder unless and until it accepts or certifies the check.'^^ § 109. Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance. The certification of a check by the bank on which it is drawn is equivalent to an aeceptance,"^ and, in general, gives rise to tlie same rights and liabilities.''^ 69 Wright V. McFall, 8 La. Ann. 120. 70 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 189); Ariz. (§ 3487); 111. (§ 188); Kan. (§ 196); Md. (§ 208); Mich. (§ 191); Neb. (§ 188); N. Y. (§ 325); Ohio (§ 3177 z); R. I. (§ 197); Wis. (§ 1684-5). 71 Same sections negotiable instruments laws last above cited. Balti- more & O. R. Co. V. First Nat. Bank, 102 Va. 753, 47 S. E. 837; Van Bus- kirk V. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. " Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okla., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 187); Ariz. (§ 3487); 111'. (§ 186) ; Kan. (§ 194) ; Md. (§ 206) ; Mich. (§ 189) ; Neb. (§ 186) ; N. Y (§ 323); Ohio (§ 3177 x) ; R. I. (§ 195); Wis. (§ 1684-3). First Nat. Bank v. Currie, 147 Mich. 72, 13 Det. Leg. N. 965, 110 N. W. 499, 118 Am. St. Rep. 537, 9 L. R. A. (N. S.) 698. Admits genuineness of maker's signature. Adam v. Manufacturers' & Traders' Nat. Bank 63 Misc. 403, 116 N. Y. Supp. 595. i " See post, chapter XI, § 153. § 112 CERTIFICATION. U«J § 110. The certification must be in writing signed by the bark. While at common law au oral certification or acceptance was good,"'' the rule has been changed by the negotialjle instruments law which requires all acceptances to be in writing and signed by the drawee.'^^ Effect of Certification as a Release from Liability. § 111. Where the drawer procures the certification of a checlr, he still remains liable thereon. § 112. Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon. Certification — By drawer. Where the drawer of a check procures its certification by tlie bank, he still remains liable;'''^ and the same rule applies if the 74 Farmers' & Merchants' Bank v. Dunbier, 32 Neb. 487, 49 N. W. 376. An oral promise to pay by a drawee bank, in which the drawer has no funds, is within the statute of frauds. Morse v. Massachusetts Nat. Bank, Fed. Cas. No. 9,857. See, also, cases cited in note 8 of this chapter. A promise by telegraph to pay a check is a good certification. Hen- rietta Nat. Bank v. State Nat. Bank, 80 Tex. 648, 16 S. W. 321, 26 Am. St. Rep. 773; Wells v. Western Union Tel. Co. (Iowa) 123 N. W. 371. 75 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 132); Ariz. (§ 3435); 111. (§ 131); Kan. (§ 139); Md. (§ 151); Mich. (§ 134); Neb. (§ 131); N. Y. (§ 220); Ohio (§ 3175w); R. I. (§ 140); Wis. (§ 1680f). Oral acceptance cannot be enforced. Telephone response that check was good. Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. See ante, this chapter, § 91. 76 Minot V. Russ, 156 Mass. 458, 31 N. E. 489, 32 Am. St. Rep. 472, 16 L. R. A. 510; Times Square Automobile Co. v. Rutherford Nat. Bank (N. J. Err. & App.) 11 All. 479. See, also, Rounds v. Smith, 42 111. 245; Brown v. Leckie, 43 111. 497; First Nat. Bank v. Whitman, 94 U. S. 343, 29 Law. Ed. 229; Metropolitan Nat. Bank v. Jones, 137 111. 417, 27 N. E. 533; Larsen v. Breenc, 12 Colo. 150 ACCEPTANCE OF BILLS. § 113 certification is made before delivery to the payee though at the latter 's request.'^^ Same — By holder. But, where the holder obtains the certification, the drawer and all prior indorsers are discharged from liability.'''^ Such certifica- tion creates a new contract between the holder and the drawee/^ and the holder may sue the party certifying.^o Promise to Accept. § 113. An vinconditional promise in writing to accept a bill be- fore it is drawn is deemed an actual acceptance in favor of every person who, upon the faith thereof, receives the bill for value. An unconditional written promise to accept a bill before it is drawn operates as an acceptance in favor of every person who, 480; Andrews v. German Nat. Bank, 56 Tenn. (9 Heisk.) 211, 24 Am. Rep. 300; Oyster & Fish Co. v. National Lafayette Bank, 51 Ohio St. 106, 36 N. E. 833. 77 Born v. First Nat. Bank, 123 Ind. 78, 24 N. E. 173, 18 Am. St. Rep. 312, 7 L. R. A. 442. 78 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa Ky., La.. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 188); Ariz. (§ 3487); 111. (§ 187); Kan. (§ 195); Md. (§ 207); Mich. (§ 190); Neb. (§ 187); N. Y. (§ 324); Ohio (§ 3177 y); R. L (§ 196); Wis. (§ 1684-4). Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83; First Nat. Bank of Jersey City v. Leach, 52 N. Y. 350, 11 Am. Rep. 708; Thom- son V. Bank of British North America, 82 N. Y. 1; Girard Bank v. Bank of Pennsylvania Tp., 39 Pa. 92, 80 Am. Dec. 507; First Nat. Bank v. Cur- rie, 147 Mich. 72, 13 Det. Leg. N. 965, 110 N. W. 499, 118 Am. St. Rep. 537, 9 L. R. A. (N. S.) 698; Times Square Automobile Co. v. Rutherford Nat. Bank (N. J. Err. & App.) 73 Atl. 479. 79 First Nat. Bank v. Currie, 147 Mich. 72, 13 Det. Leg. N. 965, 110 N. W. 499, 11*8 Am. St. Rep. 537, 9 L. R. A. (N. S.) 698; Times Square Auto- mobile Co. V. Rutherford (N. J. Err. & App.) Ti Atl. 479. 80 Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83. § 113 PROMISE TO ACCEPT. 151 on the faith thereof, receives the bill for valuc.^^ In the lan- guage of Chief Justice j\Iarsliall: "The prevailing inducement for considering a promise to accept or an acceptance is that credit is thereby given to the bill,"^- and this credit may be as well imparted to the bill before its date as afterwards.^^ To constitute the promise an acceptance, the bill must have been taken on the faith thereof.^* The fact that it is so taken constitutes a sufficient consideration for the promise to accept.^^ 81 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 135); Ariz. (§ 3438); 111. (§ 134); Kan. (§ 142); Md. (§ 154); Mich (§ 137); Neb. (§ 134); N. Y. (§ 223); Ohio (§ 3175 z); R. I. (§ 143); Wis. (§ 1680 i). As to what constitutes a promise to accept, see North Atchison Bank V. Garretson, 2 C. C. A. 145, 51 Fed. 168; First Nat. Bank v. Clark, 61 Md. 400, 48 Am. Rep. 114; Burke v. Utah Nat. Bank, 47 Neb. 247, 66 N. W. 295; Merchants' Nat. Bank of Canada v. Griswold, 72 N. Y. 472, 28 Am. Rep. 159; Union Bank v. Shea, 57 Minn. 180, 58 N. W. 985. Under the Missouri statute (Rev. St. § 535), which is the same as the negotiable instruments laws on this point, it has been held that a letter from the drawer to the acceptor directing him to send a renewal, and draw on the writer at sight for the amount of the first bill at maturity, operated as an actual acceptance of the sight draft. Adoue v. Fox, 30 Mo. App. 98. See, also, Valle v. Cerre, 36 Mo. 575, 88 Am. Dec. 161. Heretofore an oral promise to accept was good. Kelley v. Greenough, 9 Wash. 659, 38 Pac. 158; Williams v. Winans, 14 N. J. Law, 339. 82 Coolidge V. Payson, 15 U. S. (2 Wheat.) 66, 4 Law. Ed. 185. The court adds: "This court is of opinion that a letter written within a rea- sonable time before or after the date of a bill of exchange, describing it in terms not to be mistaken, and promising to accept it, is, if shown to the person who afterwards takes the bill on the credit of the letter, a virtual acceptance binding the person who makes the promise." Id. S3 Coolidge v. Payson, 15 U. S. (2 Wheat.) 66, 4 Law. Ed. 185. See, also, Steman v. Harrison, 42 Pa. 49. 8* Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 135); Ariz. (§ 3438); 111. (§ 134); Kan. (§ 142); Md. (§ 154); Mich. (§ 137); Neb. (§ 134); N. Y. (§ 223); Ohio (§ 3175 z); R. I. (§ 143); Wis. (§ 1680 i). Bank of Morganton v. Hay, 143 N. C. 326, 55 S. E. 811. 85 Pillans V. Van Mierof, 3 Burrows, 1669. 152 ACCEPTANCE OF BILLS. § 113 The promise to accept must be unconditional.^ A written promise to pay a draft "for stock" is not conditional,^'^ nor is a promise to accept "on the terms you propose ;"^^ but a promise to accept drafts against "particularly described shipments" is conditional,^^ and so is a promise to accept an order if the order is not revoked.^*^ To operate as an acceptance, the promise to accept a bill must describe the bill sufficiently for identification,'-^^ and one who promises in advance to accept a bill of exchange is bound upon such promise only in case the bill in its terms conforms to the terms of his offer.^^ Thus, a telegraphic offer to accept and pay a draft of $2,000 is not an acceptance of a draft for that amount "with exchange on New York." ^^ 86 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 135); Ariz. (§ 3438); 111. (§ 134); Kan. (§ 142); Md. (§ 154); Mich. (§ 137); Neb. (§ 134); N. Y. (§ 223); Ohio (§ 3175 z); R. L (§ 143); Wis. (§ 1680 j). 87 Coffman v. Campbell, 87 111. 98. 88 Parker v. Greele, 2 Wend. (N. Y.) 545. 89 Germania Nat. Bank v. Taaks, 101 N. Y. 442, 5 N. E. 76. 90 Shaver v. W. U. Tel. Co., 57 N. Y. 459. sinister County Bank v. McFarlan, 3 Denio (N. Y.) 553; First Nat. Bank v. Clark, 61 Md. 400, 48 Am. Rep. 114; Boyce v.' Edwards, 29 U. S. (4 Pet.) Ill, 7 Law. Ed. 22. 92 Lindley v. First Nat. Bank, 76 Iowa, 629, 41 N. W. 381, 14 Am. St. Rep. 254, 2 L. R. A. 709; Brinkman v. Hunter, 73 Mo. 172, 39 Am. Rep. 492; Ulster County Bank v. McFarlan, 5 Hill (N. Y.) 432; Gates v. Parker, 43 Me. 544; Murdock v. Mills, 52 Mass. (1 Mete.) 5. 93 Lindley v. First Nat. Bank, 76 Iowa, 629, 41 N. W. 381, 14 Am. St. Rep. 254, 2 L. R. A. 709. CHAPTER IX. ACCEPTANCE OF BILLS OF EXCHANGE FOR HONOR. § 114. When Permissible. § 115. How Made. § 116. Construction of. § 117. Liability of Acceptor. § 118. Parties Liable to. § 119. Maturity of Bill Payable After Sight. When Permissible. § 114. Any person not already liable on a protested bill of ex- change may, before its maturity and with the consent of the holder, accept the bill, wholly or partially, for the honor of any person for whose account the bill is drawn. Where a bill of exchange has been protested for dishonor by nonaeceptance, or protested for better security, and is not over- due, any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon or for the honor of the person for whose account the bill is drawn. ^ The acceptance for honor may be for part only of the sum for which the bill is drawn ; and, where there has been an acceptance for honor for one party, there may be a further acceptance by a 1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wa.sh., W. Va., Wyo. (§ 161); Ariz. (§ 3464); 111. (§ 160); Kan. ($.168); Md. (§180); Mich. (§ 163); Neb. (§ 160); N. Y. (§ 280) ; Ohio (§ 3176 y) ; R. I. (§ 169) ; Wis. (§ 1681-18). The word "for" between the words "person" and "whose" was omitted from the original draft of the law as adopted in New York, but was sup- plied by amendment. Laws 1898, c. 336, § 28. 153 154 ACCEPTANCE FOR HONOR. §115 diflFerent person for the honor of another party .2 An acceptance for honor may be made at the instance of and under the guaranty of the drawee.^ How Made. § 115. An acceptance for honor must be in writing, and signed by the acceptor, and indicate its character. An acceptance for honor supra protest must be in writing, and indicate that it is an acceptance for honor, and must be signed by the acceptor for iionor.* The acceptor should be particular to state for whose honor he accepts.^ Construction of. § 116. Unless such intent is expressly negatived, the acceptance is deemed for the honor of the drawer. Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer.^ Liability of Acceptor. § 117. The acceptor for honor by acceptance engages that he will on due presentment pay the bill according to the terms of 2 Same sections of negotiable instruments laws as last above cited. 3Konig V. Bayard, 26 U. S. (1 Pet.) 250, 7 Law. Ed. 558. * Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 162); Ariz. (§ 3465); 111. (§ 161); Kan. (§ 169); Md. (§ 181); Mich. (§ 164); Neb. (§ 161); N. Y. (§ 281); Ohio (§ 3176z); R. I. (§ 170); Wis. (§ 1681-19). 5 1 Daniel's Negotiable Inst. (5th Ed.) p. 520, § 523. 6 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 163); Ariz. (§ 3466); 111. (§ 162); Kan. (§ 170); Md. (§ 182); Mich. (§ 165); Neb. (§ 162); N. Y. '§ 282); Ohio (§ 3177); R. I. (§ 171); Wis. (§ 1681-20). § 118 ACCEPTOR'S LIABILITY. 155 the acceptance, provided it shall not have been paid by the drawee, and provided, also, that it shall have been duly presented for payment and protested for nonpay- ment and notice of dishonor given him. The above is practically the language of the negotiable instru- ments laws which read as follows : ' ' The acceptor for honor by such acceptance engages that he will on due presentment pay the bill according to the terms of his acceptance, provided it shall not have been paid by the drawee, and provided, also, that it shall have been duly presented for payment and protested for nonpayment, and notice of dishonor given to him."'' It will thus be seen that the liability of an acceptor for honor is conditional and more analogous to that of an indorser than of an ordinary acceptor. § 118. The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted. Under the express provisions of the negotiable instruments laws, the acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted,^ and upon payment may be relegated to the rights of the party for whose honor he accepts as against prior parties.® '' Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 165) ; Ariz. (§ 3468) ; 111. (§ 164) ; Kan. (§ 172) ; Md. (§ 184) ; Mich. (§ 167) ; Neb. (§ 164) ; N. Y. (§ 284) ; Ohio (§ 3177 b) ; R. I. (§ 173) ; Wis. (§ 1681-22). 8 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J.. N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 164); Ariz. (§ 3467); III (§ 163) ; Kan. (§ 171) ; Md. (§ 183) ; Mich. "(§ 166) ; Neb. (§ 163) ; N. Y. (§ 283) ; Ohio (§ 3177 a) ; R. I. (§ 172) ; Wis. (§ 1681-21). 9 Acceptor of honor of first indorser may require the holder to indorse the bill to such acceptor. Freeman v. Perot, Fed. Cas. No. 5,087. 156 ACCEPTANCE FOR HONOR. § UU ]\Iaturity op Bill Payable After Sight. § 119. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for nonpayment. "Where a bill payable after sight is accepted for honor, its ma- turity is calculated from the date of the noting for nonaccept- ance, and not from the date of the acceptance for honor.^" 10 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 166) ; Ariz. (§ 3469) ; 111. (§ 165); Kan. (§ 173); Md. (§ 185); Mich. (§ 168); Neb. (§ 165); N. Y. (§ 285); Ohio (§ 3177 c); R. I. (§ 174); Wis. (§ 1681-23). CHAPTER X. INDORSEMENT AND TRANSFER. § 120. "Negotiability" and "Assignability" Distinguished. § 121. Effect of Distinction on Rights of Parties. 1. Notice to Debtor. 2. Equities and Defenses Available. 3. Suit in Name of Transferee. 4. Presumption of Consideration. § 122. What Constitutes Nego'tiation. 1. Bearer Paper. 2. Order Paper. § 123. Transfer, Without Indorsement, of Order Paper. § 124. Negotiation by Delivery. § 125. Negotiation by Indorsement — Requisites. 1. Where Written. 2. Consideration. 3. Delivery. 4. Must Be of Entire Instrument. § 126. Wording of Indorsement. § 127. Name or Designation of Payee or Indorsee Erroneous. § 128. Kinds of Indorsement. § 129. Special Indorsements. Instruments Payable to Bearer Specially Indorsed. § 130. Blank Indorsement Made Special. § 131. Blank Indorsement. § 132. Restrictive Indorsements. § 133. Rights of Restrictive Indorsee. § 134. Rights of Subsequent Indorsees. § 135. Qualified Indorsements. § 136. Conditional Indorsements. § 137. Indorsements — By Whom Made. § 138. Corporation or Infant. § 139. Joint Payees. § 140. By Agent. § 141. Indorsement in Representative Capacity. § 142. By Fiscal Officer. § 143. Date of Indorsement. 157 158 INDORSEMENT AND TRANSFER. § 120 § 144. Presumption. § 145. Place of In-dorsemeiot. § 146. Negotiation of Bills Drawn in Sets. § 147. Striking Out Indorsements. § 148. Termination of Negotiability. § 149. Reissuance and Renegotiation. Distinction Between "Negotiability" and "Assignability." § 120. Generally speaking, all contracts are assignable ; only those are negotiable, hov/ever, which conform to the require- ments of this act. The first great difference between these terms is one of scope, the term "assignability" being much the broader term. Gen- erally speaking, any contract, whether executory ^ or executed,^ is assignable, if it is not of a purely personal nature,^ and is not based on personal trust and confidence ; * but the only contracts that are negotiable are those complying with the requirements of the negotiable instruments act.^ § 121. The distinction between "negotiability" and "assign- ability" is largely important as it affects the rights of the parties in the following particulars: 1. Necessity of notice to debtor; 2. Equities and defenses available between the parties iLa Rue v. Groezinger, 84 Cal. 281, 24 Pac. 42, 18 Am. St. Rep. 179 Macomber v. Parker, 31 Mass. (14 Pick.) 497; Rochester Lantern Co. v Stiles & Parker Press Co., 135 N. Y. 209, 31 N. E. 1018. 2 Byar's Garnishees v. Grififin, 31 Miss. 603; Smith v. Hubbard, 85 Tenn 306, 2 S. W. 569. 3 Wheeler v. Whann Co., 64 Fed. 664; Fitch v. Brockmon, 3 Cal. 348; Edison v. Babka, 111 Mich. 235, 69 N. W. 499; Nixon v. Zuricalday, 2 Misc. 541, 24 N. Y. Supp. 121. 4 Arkansas Valley Smelting Co. v. Belden Min. Co., 127 U. S. 379, 32 Law. Ed. 246. But see Rice v. Gibbs, 33 Neb. 460, 50 N. W. 436; Jenkins V. Columbia Land & Imp. Co., 13 Wash. 502, 43 Pac. 328. 6 See ante, chapter IV, Essentials of Negotiability. §121 RIGHTS OF PARTIES. 150 3. The right of the transferee to sue on the instrument in his own name ; 4. Presumption of consideration. Notice to debtor. Another distinguishing feature is found in the fact that a com- plete binding transfer of a negotiable instrument may take place without notice to the debtor; while a transfer of a non-negotiable chose in action is ineffectual as against the debtor without notice to him.^ Equities and defenses available. Furthermore, an assignee of a non-negotiable chose in action acquires only the title and rights of his assignor,^ and takes at least subject to all equities and defenses available between the original parties, and in many jurisdictions to all equities and de- fenses ; ® while a bona fide transferee of a negotiable instrument may acquire a better title than that of his transferror,^ and takes 6 Adams v. Leavens, 20 Conn. 1Z\ Merchants' & Mechanics' Bank v. Hewitt, 3 Iowa, 93, 66 Am. Dec. 49; Robinson v. Marshall, 11 Md. 251; Nichols V. Hooper, 61 Vt. 295, 17 Atl. 134. The weight of authority', however, seems to be to the contrary. See Jones v. Lowery Banking Co. 104 Ala. 252, 16 So. 11; Thayer v. Daniels, 113 Mass. 129; Allyn v. Allyn, 154 Mass. 570, 28 N. E. 779; Lewis v. Bush, 30 Minn. 244, 15 N. W. 113^ Board of Education v. Duparquet, 50 N. J. Eq. 234, 24 Atl. 922; Richard- son V. Ainsworth, 20 How. Prac. 521; Callanan v. Edwards, 32 N. Y. 483. 7 Beecher v. Buckingham, 18 Conn. 110, 44 Am. Dec. 580; Jack v. Davis 29 Ga. 219; Shufeldt v. Gillilan, 124 111. 460, 16 N. E. 879; Wagner v! Winter, 122 Ind. 57, 23 N. E. 754; Davis v. Bechstein, 69 N. Y. 440, 25 Am. Rep. 218; Mulligan v. Smith, 13 Colo. App. 231, 57 Pac. 731; Se'lig- man v. Ten Eyck's Estate, 49 Mich. 104, 13 N. W. 111. 8 Commercial Nat. Bank v. Burch, 141 111. 519, 31 N. E. 420, IZ Am. St. Rep. 331; Stewart v. Wilson, 35 Ky. (5 Dana) 50; Hampson v. Owens, 55 Md. 583; Ayres v. Campbell,_ 9 Iowa, 213, 74 Am. Dec. 346; Blyden- burgh V. Thayer, 1 Abb. Dec. (N. Y.) 156, 34 How. Prac. 88. e United States v. Read, 2 Cranch, C. C. 159, Fed. Cas. No. 16,125; Sin- clair V. Piercy, 28 Ky. (5 J. J. Marsh) 63; Wheeler v. Guild, 37 Mass. (20 Pick.) 545, 32 Am. Dec. 231; Commercial Nat. Bank v. Burch, 141 111 519, 31 N. E. 420, 33 Am. St. Rep. 331. 160 INDORSEMENT AND TRANSFER. § 121 free from all prior equities and defenses/" except such defenses as forgery ^^ and want of capacity in the maker or drawer/^ which go to the very essence of the contract. The rights of bona fide holders are considered later in a subsequent chapter. Suit in name of transferee. Closely related to the last-named distinction is another which existed when an assignee of a non-negotiable chose in action could not sue at law in his own name, but could sue only in the name of his assignor.^2 This rule has long since been abolished, and now an assignee of a non-negotiable, as well as the transferee of a negotiable, instrument, may sue at law or in equity in his own name.^* The negotiable instruments laws give this right to the ■'holder," 1-5 who is defined to be ''the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof." ^^ As 10 See post, § 167. 11 Mersman v. Werges, 3 Fed. 378; Camp v. Carpenter, 52 Mich. 375, 18 .\. W. 113; Butler v. Cams, 37 Wis. 61. See, also, post, § 167. 12 See post, § 167. 13 Pollard V. Somerset Mut. Fire Ins. Co., 42 Me. 221; Leighton v. Pres- ton, 9 Gill. (Md.) 201; Amherst Academy v. Cowls, 23 Mass. (6 Pick.) i27, 17 Am. Dec. 387. 14 Fuller V. Arnold, 98 Cal. 522; Young v. Kelly, 3 App. D. C. 296; City of Carlyle v. Carlyle W., L. & P. Co., 140 111. 445, 29 N. E. 556. At the ;ommon law a chose in action could not be transferred or assigned so that the transferee or assignee could maintain an action thereon in his own name. By the law merchant or the custom of merchants, however, bills of exchange could be transferred or assigned, and the assignee could sue the drawer or acceptor in his own name. Oakdale Mfg. Co. v. Clarke [R. I.] 69 Atl. 681. 15 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 51); Ariz. (§ 3354); 111. § 51); Kan. (§ 58); Md. (§ 70); Mich. (§ 53); Neb. (§ 51); N. Y. (§ 90); Dhio (§ 3172 w); R. L (§ 59); Wis. (§ 1676-21. Smith V. Bayer, 46 Or. 143, 79 Pac. 497, 114 Am. St. Rep. 858. Under "he negotiable instruments laws, the right to sue includes the right to interpose a set-off or counterclaim. 16 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., .nLiss., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., § 123 WHAT CONSTITUTES NEGOTIATION. 161 was said in a well considered case on this point: "Any one in possession of a note indorsed in blank is prima facie the holder, and may sue upon it, until his right is disproved. It is no de- fense to an action on such paper that the property in it is in an- other, and not in plaintiff. All that is required of the plaintiff, in the first instance, is to present the note; its possession being prima facie evidence of his ownership of the note and his right to sue. It is only after the defendant has adduced evidence that the note was obtained by undue means, such as fraud, duress, theft, or the like, that the plaintiff is called upon to offer other facts in support of his title." ^^ Presumption of consideration. The last important distinction between the terms "negotiabil- ity" and "assignability" is that a consideration for a negotiable instrument is presumed; while the consideration of a non-nego- tiable instrument must be proved.^^ What Constitutes Negotiation. § 122. An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof: 1. If payable to bearer it is negotiated by delivery; 2. If payable to order it is negotiated by the indorse- ment of the holder completed by delivery. § 123. Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferror had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferror. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 191); Ariz. (§ 3487); 111. (§ 190); Kan. (§ 2); Md. (§ 14); Mich. (§ 2); Neb. (§ 189); N. Y. (§ 2); Ohio (§ 3178); R. I. (§ 2); Wis. (§ 1675). 17 Mumford v. Weaver, 18 R. I. 801, 31 Atl. 1. 18 See ante, chapter V, Consideration. Opp. — Sel. — 11 162 INDORSEMENT AND TRANSFER. § 123 What constitutes negotiation — Indorsement or delivery. An instrument is said to be negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder thereof. ^^ "Holder" means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof.^" Following this definition, and the common law, though instruments payable to bearer ^i and those payable to order 22 are each negotiable, the former are negotiated by delivery.^^ while the latter are negotiated by indorsement of the holder completed by delivery.2* Transfer, without indorsement, of instrument payable to order. "Where the holder of an instrument payable to his order trans- fers it for value without indorsing it, the transfer vests in the transferee such title as the transferror had therein, and the trans- feree acquires in addition the right to have the indorsement of 19 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 30); Ariz. (§ 3333); 111. (§ 30); Kan. (§ 37); Md. (§ 49); Mich. (§ 32); Neb. (§ 30); N. Y. (§ 60); Ohio (§ 3172 b); R. I. (§ 38); Wis. <§ 1676). 20 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 191); Ariz. (§ 3487); 111. (§ 190); Kan. (§ 2); Md. (§ 14); Mich. (§ 2); Neb. (§ 189); N. Y. (§ 2); Ohio (§ 3178); R. I. (§ 2); Wis. (§ 1675). 21 See ante, § 51. 22 See ante, § 50. 23 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 30); Ariz. (§ 3333); 111. (§ 30); Kan. (§ 37); Md. (§ 49); Mich. (§ 32); Neb. (§ 30); N. Y. (§ 60); Ohio (§ 3172 b); R. L (§ 38); Wis. (§ 1676). Voss V. Chamberlain, 139 Iowa, 569, 117 N. W. 269. 24 Same sections of negotiable instruments laws as last above cited. A check payable to the order of the payee and not indorsed by him is not negotiable. Hellerman v. Schantz, 112 N. Y. Supp. 1094; Sublette y. Brewington (Mo. App.) 122 S. W. 1150. Delivery essential, see post, § 125; what constitutes, presumption, etc., see ante, chapter III. § 124 NEGOTIATION BY DELIVERY. 163 the transferror.25 A transferee under such a transfer takes sub- ject to existing equities.^*^ But in order to determine whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made.^'^ Where the indorsement was omitted by mistake, or there was an agree- ment to indorse, made at the time of the transfer, the indorse- ment, when made, relates back to the time of the transfer.^s By Delivery. § 124. "Delivery" means transfer of possession, actual or con- structive, from one person to another. As has been stated, every contract on a negotiable instrument is incomplete and irrevocable until the delivery of the instrument 25 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 49); Ariz. (§ 3352); 111. (§ 49); Kan. (§ 56); Md. (§ 68); Mich. (§ 51); Neb. (§ 49); N. Y. (§ 79); Ohio (§ 3172 v); R. I. (§ 57); Wis. (§ 1676-19). Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83. A transferee by delivery without indorsement takes only an equit.ible interest. Freeman v. Perry, 22 Conn. 617; Pavey v. Stauffer, 45 La. Ann. 353, 12 So. 512, 19 L. R. A. 716; Jenkins v. Wilkinson, 113 N. C. 532, 18 S. E. 696. There is an implied warranty that an instrument has not been paid on a sale thereof for its face value. French v. Turner, 15 Ind. 59; Daskam V. Ullman, 74 Wis. 474, 43 N. W. 321. See, also, Meriden Nat. Bank v. Gallaudet, 120 N. Y. 298, 24 N. E. 994. See, also, Whistler v. Forster, 14 C. B. (N. S.) 248, Bigelow Lead. Cas. Ti. 26 Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83; Id., 42 Misc. 341, 86 N. Y. Supp. 701; Terry v. Allis, 16 Wis. 504; Goshen Nat. Bank v. Bingham, 118 N. Y. 349, 23 N. E. 180, 16 Am. St. Rep. 765, 7 L. R. A. 595. 27 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Alass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 49); Ariz. (§ 3352); 111. (§ 49); Kan. (§ 56); Md. (§ 68); Mich. (§ 51); Neb. (§ 49); N. Y. (§ 79); Ohio (§ 3172 v); R. I. (§ 57); Wis. (§ 1676-19). 28 Negotiable Inst. Laws Wis. (§ 1676-19). This provision is not found in the negotiable instruments laws as 164 INDORSEMENT AND TRANSFER. § 124 for the purpose of giving effect thereto.^^ The negotiable instru- ments laws define "delivery" to mean the "transfer of posses- sion, actual or constructive, from one person to another," ^o This definition must be construed so as to embody the rule just stated. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be ef- fectual, must be made either by or under the authority of the party making, drawing, accepting or indorsing, as the case may be ; ^^ and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument/''- But where the instrument is in the hands of a holder in due course, a valid de- livery thereof by all parties prior to him, so as to make them liable to him, is conclusively presumed.^^ And where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is shown.^* ndopted in the other states, but the rule stated would probably be en- forced. 2!^ Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 16); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Neb. (§ 16); N. Y. (§ 35); Ohio (§ 3171 o); R. I. (§ 24); Wis. (§; 1675-16). See ante, chapter III, § 27. 30 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Fa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 191); Ariz. (§ 3487); 111. (§ 190); Kan. (§ 2); Md. (§ 14); Mich. (§ 2); Neb. (§ 189); N. Y. (§ 2); Ohio (§ 3178); R. I. (§ 2); Wis. (§ 1675). 31 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 16); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Neb. (§ 16)); N. Y. (§ 35); Ohio (§ 3171 o); R. I. (§ 24); Wis. (§ 1675-16). 32 Same sections of negotiable instruments laws last above cited. 33 Same sections negotiable instruments laws last above cited. 34 Same sections negotiable instruments laws last above cited. § 127 NEGOTIATION BY INDORSEMENT. 165 By Indorsement — Requisites, § 125. To be effectual the indorsement: 1. Must be written on the instrument itself or upon a paper attached thereto; 2. Must be supported by a consideration, though the general rule presuming a consideration applies; 3. Must be completed by delivery; 4. Must be of the entire instrument. § 126. The signature of the indorser, v/ithout additional words, is a sufficient indorsement. § 127. Where the name of the payee or indorsee is wi'ongly des- ignated or misspelled, he may indorse the instrument as therein described, adding, if he think fit, his proper sig- nature. Where written. An indorsement must be written on the instrument itself or on a paper attached thereto.^^ An indorsement is usually and properly written on the back of the instrument,^*' but, if intended as an indorsement, may be written on any part of the instru- ment.^'^ The propriety of an indorsement on an attached paper or "allonge" is well established.^^ Stamping an indorsement on the 35 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 31); Ariz. (§ 3334); 111. (§ 31); Kan. (§ 38); Md. (§ 50); Mich. (§ 33); Neb. (§ 31); N. Y. (§ 61); Ohio (§ 3172 c); R. I. (§ 39); Wis. (§ 1676-1). It must be in writing. Third Nat. Bank v. Clark, 23 Minn. 263. 36 Marion & M. Gravel Road Co. v. Kessinger, 66 Ind. 549. 37 Richards" V. Warring, 39 Barb. (N. Y.) 42; Haines v. Dubois, 30 N. J. Law, 259; Arnot's Adm'r v. Symonds, 85 Pa. St. 99, 27 Am. Rep. 630; Shain v. Sullivan, 106 Cal. 208, 39 Pac. 606. 38Fountain v. Bookstaver, 141 111. 461, 31 N. E. 17; Folger v. Chase, 35 Mass. (18 Pick.) 63; Crosby v. Roub, 16 Wis. 616, 84 Am. Dec. 720. 166 INDORSEMENT AND TRANSFER. § 127 back of the instrnment with a rubber stamp is sufficient if made by one having authority and with intent to indorse,^^ but such in- dorsement does not prove itself.*" Consideration. The rule that a consideration for a negotiable instrument is pre- sumed ^^ extends to a transfer of the instrument, and a consid- eration for an indorsement is presumed.*^ A consideration for an assignment of a negotiable instrument is also presumed,*^ Since an antecedent or pre-existing debt constitutes value within the meaning of the negotiable instrument laws/^ such a debt is a suf- ficient consideration for an indorsement or an assignment of a negotiable instrument.*^ Delivery. Under the rules of the common law and the negotiable instru- It is not necessary that it be physically impossible to place the in- dorsement on the instrument itself in order to sustain one placed on an allonge. Crosby v. Roub, 16 Wis. 616, 84 Am. Dec. 720. The indorsement cannot be made on a separate unattached paper. Traders' Deposit Bank v. Chiles, 14 Ky. Law Rep. 617. A mortgage not attached to the note is not an allonge. Doll v. Hollenbeck, 19 Neb. 639, 28 N. W. 286. But see Crosby v. Roub, 16 Wis. 616, 84 Am. Dec. 720, where it was held that a recital in a railroad mortgage bond that the railroad company transferred the note and mortgage to a certain person was a sufficient indorsement of the note to such person. S9Mayers v. McRinnmon, 140 N. C. 640, 53 S. E. 447, 111 Am. St. Rep. 879. 40 Mayers v. McRinnmon, 140 N. C. 640, S3 S. E. 447, 111 Am. St. Rep. 879. 41 See ante, § 59. 42 Gwyn V. Lee, 1 Md. Ch. 445; Connerly v. Planters' & Merchants' Ins. Co., 66 Ala. 432; Pratt v. Adams, 7 Paige (N. Y.) 615; Owens v. Snell, 29 Or. 483, 44 Pac. 827. See, further, on question of consideration for indorsement, Bucklen v. Johnson, 19 Ind. App. 406, 49 N. E. 612; Fred- erick V. Winans, 51 Wis. 472, 8 N. W. 301. 43 Grimes v. McAninch, 9 Ind. 278. 44See ante, § 61. 45 See Rogers v. Gallagher, 49 111. 182, 95 Am. Dec. 583. Consideration as affecting bona fide holders, see post, § 167. §127 NEGOTIATION BY INDORSEMENT. 167 ments acts, a delivery is essential to complete a transfer by de- livery.*^ Must be of entire instrument. An indorsement must be of the entire instrument; and one which purports to transfer a part only of the amount payable, or to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument.*'^ The same rule applies to an attempted assignment of part,*^ but an instru- 46 A delivery is necessary to complete a transfer by indorsement. Spencer v. Carstarphen. IS Colo. 445; Middleton v. Griffith, 57 N. J. Law, 442, 31 Atl. 405, 51 Am. St. Rep. 617; Howe v. Ould, 28 Grat. (Va.) 1; Clark V. Sigourney, 17 Conn. 511, where the payee died after having placed his name on the back of the note, but before delivery to the in- tended transferee, and it was held that there was no indorsement. Under the definition of "indorsement," as given in the negotiable in- struments laws, a delivery is essential to a complete indorsement. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§§ 191, 16 30); Ariz. (§§ 3487, 3319, 3338;; 111. (§§ 190, 16, 30); Kan. (§§ 2, 23, 37); Md. (§§ 14, 35, 49); Mich. (§§ 189, 18, 32); Neb. (§§ 2, 16, 30,); N. Y. (§§ 2, 35, 60); Ohio (§§ 3178, 3171 o, 3172 b); R. I. (§§ 2, 24, 38); Wis. (§§ 1675, 1675-16, 1676). 47 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 32); Ariz. (§ 3335); 111. (§ 32); Kan. (§ 39); Md. (§ 51); Mich. (§ 34); Neb. (§ 32); N. Y. (§ 62); Ohio (§ 3172 d); R. I. (§ 40); Wis. (§ 1676-2). That an indorsement of part does not pass title, see Frank v. Kaigler, 36 Tex. 305; Bibb v. Skinner, 5 Ky. (2 Bibb) 57; Hughes v. Kiddell, 2 Bay (S. C.) 324. Heretofore, an indorsement to two persons transferred a half interest to each. Herring v. Woodhull, 29 111. 92; Flint v. Flint, 88 Mass. (6 Allen) 34, 83 Am. Dec. 615. 4S Martin v. Hayes, 1 Busb. (N. C.) 423; Lindsay v. Price, 33 Tex. 280; Douglass V. Wilkeson, 6 Wend. (N. Y.) 637. But see Cole v. Tuck, 108 Ala. 227, 19 So. 377, where it was held that a payee who indorses for a limited amount cannot be held liable for attorneys' fees in addition to such amount. 168 INDORSEMENT AND TRANSFER. § 127 ment which has been paid in part may be indorsed as to the residue>9 Wording of indorsement. The signature of the indorser without other words is a suf- ficient indorsement,^'' as is such siguature coupled with a written guaranty of payment and a waiver of demand and notice, or an indorsement in the following language : ^^ "For value received I hereby sell, transfer and assign the within note and the coupons thereto attached without recourse.'^ ^^ Where the name of the payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described, adding, if he think fit, his proper signature.^^ 49 Same sections of negotiable instruments laws as last above cited. See Barnett v. Spencer, 4 Blackf. (Ind.) 206; Bledsoe v. Fisher, 5 Ky. (2 Bibb) 471. soNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 31); Ariz. (§ 3334); 111. (§ 31); Kan. (§ 38); Md. (§ 50); Mich. (§ 33); Neb. (§ 31); N. Y. (§ 61); Ohio (§ 3172 c); R. I. (§ 39); Wis. (§ 1676-1). This signature may be in pencil. Brown v. Butchers' & Drovers' Bank, 6 Hill (N. Y.) 443, 41 Am. Dec. 755; Closson v. Stearns, 4 Vt. 11, 23 Am. Dec. 245; Cooper v. Bailey, 52 Me. 230. The characters "1, 2, 8" in pencil form a sufficient indorsement. Brown v. Butchers' & Drovers' Bank, 6 Hill (N. Y.) 443, 41 Am. Dec. 755. See, also. Finch v. De Forest, 16 Conn. 445. 51 Buck v. Davenport. Sav. Bank, 29 Neb. 407, 45 N. W. 776, 26 Am. St. Rep. 392; Phelps v. Church, 65 Mich. 231, 32 N. W. 30. 52 Thorp V. Mindeman, 123 Wis. 149, 101 N. W. 417, 107 Am. St. Rep. 1003. 53 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 43); Ariz. (§ 3346); 111. (§ 43); Kan. (§ 50); Md. (§ 62); Mich. (§ 45); Neb. (§ 43); N. Y. (§ 62); Ohio (§ 3172 o); R, I. (§ 51); Wis. (§ 1676-14). §130 SPECIAL INDORSEMENTS. 169 Kinds and Effect Of Indorsements. § 128. An indorsement may be either special, or in blank, and it may also be either restrictive or qualified, or condi- tional. Special. § 129. A special indorsement specifies the person to whom, or to whose order, the instrument is to be payable, and the indorsement of such indorsee is necessary to the further negotiation of the instrument. Exception. — Where an instrument payable to bearer is indorsed specially, it may nevertheless be further negotiated by delivery. § 130. The holder may convert a blank indorsement into a special indorsement by writing over the signature of the in- dorser in blank any contract consistent with the char- acter of the indorsement. An indorsement may be special ; ^* that is, it may specify the person to whom or to whose order the instrument is to be pay- able.^ A special indorsement, as thus defined, is the same as what is commonly called an indorsement in fuU.^^ The indorse- 51 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 33); Ariz. (§ 3336); III. (§ 33); Kan. (§ 40); Md. (§ 52); Mich. (§ 35); Neb. (§ 33); N. Y. (§ 63); Ohio (§ 3172 e); R. I. (§ 41); Wis. (§ 1676-3). 55 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 34); Ariz. (§ 3337); 111. (§ 34); Kan. (§-41); Md. (§ 53); Mich. (§ 36); Neb. (§ 34); N. Y. (§ 64); Ohio (§ 3172 b); R. I. (§ 42); Wis. (§ 1676-4). As to what is a special indorsement, see Rice v. Stearns, 3 Mass. 225, 3 Am. Dec. 129; Reamer v. Bell, 79 Pa. St. 292. 66Kilpatrick v. Heaton, 3 Brev. (S. C.) 92. 170 INDORSEMENT AND TRANSFER. §130 inent of the person to whom the instrument is specially indorsed is necessary to the further negotiation of the paper." Instruments payable to bearer, specially indorsed, pass by de- livery. Where an instrument payable to bearer is specially indorsed, it may nevertheless be negotiated by delivery.^s By expressly limiting the rule to instruments payable to bearer, the negotiable instruments act changes the rule existing in some jurisdictions, that where the first indorsement is in blank, the instrument is transferable by delivery, though there is a subsequent special or full indorsement.^^ The person so specially indorsing is liable as indorser to such holders only as make title through his indorse- ment.^*^ Blank indorsement made special. Under the negotiable instruments laws the holder may convert 57 Same sections of negotiable instruments laws as last above cited. Grimes v. Piersol, 25 Ind. 246. 58 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La.. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 40); Ariz. (§ 3343); 111. (§ 40); Kan. (§ 47); Md. (§ 59); Mich. (§ 42); Neb. (§ 40); N. Y. (§ 70); Ohio (§ 31721); R. I. (§ 48); Wis. (§ 1676-10). Such is the rule of the law merchant. Habersham v. Lehman, 63 Ga. 380; Johnson v. Mitchell, 50 Tex. ?12, 32 Am. Rep. 602; Watervliet Bank V. White, 1 Denio (N. Y.) 608; Mitchell v. Fuller, 15 Pa. St. 268, 53 Am. Dec. 594. A check payable to a certain named person or bearer need not be indorsed. Farmers' & Merchants' Bank v. Bank of Rutherford, 115 Tenn. 64, 88 S. W. 939, 112 Am. St. Rep. 817. 50 Mitchell V. Fuller, 15 Pa. St. 268, 53 Am. Dec. 594; Watervliet Bank V. White, 1 Denio (N. Y.) 608; Habersham v. Lehman, 63 Ga. 380. See Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 9); Ariz. (§ 3312); 111. (§ 9); Kan. (§ 1.6); Md. (§ 28); Alich. (§ 11); Neb. (§ 9); N. Y. (§ 28); Ohio (§ 3171b); R. I. (§ 17); Wis. (§ 1675-9). 60 Same sections of negotiable instruments laws as last above cited. §131 INDORSEMENTS IN BLANK. 171 a blank indorsement into a special or full indorsement by writing over the signature of the indorser any contract consistent with the character of the indorsement.^^ This rule authorizes the hold- er to fill up a blank indorsement with a special indorsement to himself,^2 and is applicable to an indorsement in blank without recourse.^^ It does not, however, authorize the holder to insert over the signature of the indorser, without his knowledge or con- sent, a special contract of guaranty .^^ Nor does it authorize the holder to write in a consideration for the indorsement,^ or a waiver of demand and notice,^^ or anything that will change the relation of the parties,^^ or the nature of the indorsement.^ In Blank. § 131. An indorsement in blank specifies no indorsee, and an in- strument so indorsed is payable to bearer, and may be negotiated by delivery. 61 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 35); Ariz. (§ 3338); 111' (§ 35); Kan. (§ 42); Md. (§ 54); Mich. (§ Z7); Neb. (§ 35); N. Y. (§ 65); Ohio (§ 3172 g); R. I. (§ 43); Wis. (§ 1676-5). As to right of holder to fill blank indorsement, see Condon v. Pearce, 43 Md. 83. 62 Lucas V. Byrne, 35 Md. 485; Lyon v. Ewings, 17 Wis. 63; Metcalf V. Yeaton, 51 Me. 198; Illinois Conference v. Plagge, 177 111. 431, 53 N. E. 76, 69 Am. St. Rep. 252. 63 Lyon V. Ewings, 17 Wis. 63. But see Catlin v. Jones, 1 Pin. (Wis.) 130. 61 Belden v. Hann, 61 Iowa, 42, 15 N. W. 591, where the guarantee was held to be void, and the indorser still entitled to notice of dishonor and protest. 65 Hood V. Robbins, 98 Ala. 484, 13 So. 574. 66Catlin V. Jones, 1 Pin. (Wis.) 130; Kimbro v. Lamb, 23 Tenn. (4 Humph.) 95, 40 Am. Dec. 628. 67 Comparree v. Brockway, 30 Tenn. (11 Humph.) 355; Morrison v. Smith, 13 Mo. 234, S3 Am. Dec. 145. 68 Christian County Bank v. Goode, 44 Mo. App. 129. 172 INDORSEMENT AND TRANSFER. § 132 Blank indorsement — Title passes by delivery. An indorsement may be in blank ; ^^ that is, it need not specify an indorsee."^ Instruments so indorsed are payable to bearer and pass by delivery .'^^ The legal effect of a blank indorsement can- not be varied by evidence of parol, contemporaneous agreements.^^ Restrictive — Form. § 132. An indorsement is restrictive which either: 1. Prohibits the further negotiation of the instrument; But the mere absence of words implying pov/er to negotiate does not make an indorsement restrictive; 2. Constitutes the indorsee the agent of the indorser ; 3. Vests the title in the indorsee in trust for or to the use of some other person. Restrictive indorsement — Preventing further negotiation. An indorsement may also be restrictive.'^^ It is restrictive if it 69 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 33); Ariz. (§ 3336); III. (§ 33); Kan. (§ 40); Md. (§ 52); Mich. (§ 35); Neb. (§ 33); N. Y. (§ 63); Ohio (§ 3172 e); R. I. (§41); Wis. (§ 1676-3). 70 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 34); Ariz. (§ 3337); 111. (§ 34); Kan. (§ 41); Md. (§ 53); Mich. (§ 36); Neb. (§ 34); N. Y. (§ 64); Ohio (§ 3172 b); R. I. (§ 42); Wis. (§ 1676-4). Voss V. Chamberlain, 139 Iowa, 569, 117 N. W. 269. ''I Same sections of negotiable instruments laws as last above cited. Voss V. Chamberlain, 139 Iowa, 569, 117 N. W. 269. 72Torbert v. Montague, 38 Colo. 325, 87 Pac. 1145. Parol evidence is not admissible to show that one who indorsed in blank was not to be Habit as indorser. Charles v. Denis, 42 Wis. 56, 24 Am. Rep. 383. 73 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 33); Ariz. (§ 3336); 111. (§ 33); Kan. (§ 40); Md. (§ 52); Mich. (§ 35); Neb. (§ 33); N. Y. (§ 63); Ohio (§ 3172 e); R. L (§ 41); Wis. (§ 1676-3). §132 RESTRICTIVE INDORSEMENTS. 173 prevents further negotiation of the instrument.'^* Thus, an in- dorsement to a named person "only" is restrictive,''^ and so is one to pay the money for any particular purpose."^ But the mere absence of the words "order" or "bearer," or other words im- plying power to negotiate, does not make an indorsement restrict- ive. 77 Same— Creating agency or trust. An indorsement is also restrictive if it makes the indorsee the agent of the indorser.'-s Under this rule fall indorsements for col- lection,''^ and it should be remembered, in this connection, that 74 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 36); Ariz. (§ 3339); 111. (§ 36); Kan. (§ 43); Md. (§ 55); Mich. (§ 38); Neb. (§ 36); N. Y. (§ 66); Ohio (§3172 b); R. I. (§ 44); Wis. (§ 1676-6). 75 Power V. Finnic, 4 Call (Va.) 411. 76 White V. National Bank, 102 U. S. 658, 26 Law. Ed. 250, where the indorsement "Pay to A. or order, for account of B," was held to make A. merely the agent of B. for the collection of the instrument. See, also, Hook V. Pratt, 78 N. Y. 371, 34 Am. Rep. 539. Indorsement for deposit, see Ditch v. Western Nat. Bank, 79 Md. 192, 29 Atl. n, 138, 47 Am. St. Rep. 375, 23 L. R. A. 164; Johnson v. Donnell, 90 N. Y. 1; Freeman v. Exchange Bank, 87 Ga. 45, 13 S. E. 160. Indorsements to "A, or order, for account B," see People's Bank v. Jefiferson County Sav. Bank, 106 Ala. 524, 17 So. 728, 54 Am. St. Rep. 5; Blaine v. Bourne, 11 R. I. 119, 23 Am. Rep. 429; Armour Bros. Banking Co. V. Riley County Bank, 30 Kan. 163, 91 Pac. 506. 77 Same sections of negotiable instruniients laws as lasft above cited. 78 Subdivision 2 of same sections of negotiable instruments laws as last above cited. 79 Smith V. Bayer, 46 Or. 143, 79 Pac. 497; Ward v. Smith, 74 U. S. (7 Wall.) 447, 19 Law. Ed. 207; Commercial Bank v. Armstrong, 148 U. S. 50, 37 Law. Ed. 363; Claflin v. Wilson, 51 Iowa, 15, 50 N. W. 578; Merchants' Nat. Bank v. Hanson, 33 Minn. 40, 21 N. W. 849, 53 Am. Rep. 5; National Butchers' & Drovers' Bank v. Hubbell, 117 N. Y. 384, 22 N. E. 1031, 15 Am. St. Rep. 515, 7 L. R. A. 852; Bowman v. First Nat. Bank, 9 Wash. 614, 38 Pac. 211, 43 Am. St. Rep. 870; Mechanics' Bank v. Valley Packing Co., 70 Mo. 643; Blakeslee v. Hewett, 76 Wis. 341, 44 N. W. 1105; People's Bank v. Jefferson County Sav. Bank, 106 Ala. 524, where the effect of canceling a restrictive indorsement for col- 174 INDORSEMENT AND TRANSFER. § 133 a bank or other agent for collection, on indorsing the instrument, becomes liable in all respects as a general indorser.^° An in- dorsement is also restrictive if it vests the title in the indorsee in trust for, or to the use of, some other person.^^ Restrictive — Rights of Indorsee. § 133. A restrictive indorsement confers upon the indorsee the right : 1. To receive payment of the instrument; 2. To bring any action thereon that the indorser could bring ; 3. To transfer his rights as such indorsee, where the form of the indorsement authorizes him to do so. § 134. But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement. Under a restrictive indorsement the indorsee may receive pay- ment of the instrument,^^ bring any action the indorser could lection, and placing an absolute indorsement on the paper, is consid- ered. An unrestricted indorsement, intended for collection, does not render the indorser liable to a subsequent holder under indorsements "for col- lection." Freeman's Nat. Bank v. National Tube-Works, 151 Mass. 413, 24 N. E. 779, 21 Am. St. Rep. 461, 8 L. R. A. 42. Where indorsement in blank is accompanied by a letter stating that the draft is for "collection and credit," the indorsement and letter should be read together, and, so read, render the indorsement restrictive. Bank of America v. Waydell, 187 N. Y. 115, 79 N. E. 857, afg. 103 App. Div. 25, 92 N. Y. Supp. 666. 80 See post, § 161. 81 Subdivision 3 of same sections of negotiable instruments laws as last above cited. Hook v. Pratt, 78 N. Y. 371, 34 Am. Rep. 539, where the indorsement was to "pay to the order of Mrs. Mary Hook * * * for the benefit of her son Charlie." 82 Payment to indorsee for collection is good. King v. Fleece, 54 Tenn. (7 Heisk.) 273; Padfield v. Green, 85 111. 529. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., §135 QUALIFIED INDORSEMENTS. 175 bring,^3 and transfer his rights as such indorsee where the form of the indorsement authorizes him to do so.^* A restrictive in- dorsee takes the paper subject to all equities that might have been asserted by the maker if it had not been indorsed,^^ and all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement.^^ Qualified. § 135. A qualified indorsement may be made by adding to the indorser's signature the w^ords "without recourse," or any words of similar import. Such an indorsement does not impair the negotiable character of the instrument and constitutes the indorser a mere assignor of the title to the instrument. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ Z7); Ariz. (§ 3340); 111. (§ 2,7); Kan. (§ 44); Md. (§ 56); Mich. (§ 59); Neb. (§ 2,7); N. Y. (§ 67); Ohio (§ 31721); R. I. (§ 45); Wis. (§ 1676-7). 83 Subdivision 2 of same sections of negotiable instruments laws as last above cited. Smith V. Bayer, 46 Or. 143, 79 Pac. 497, 114 Am. St. Rep. 858. An indorsee for collection may sue in his own name. McCallum v. Driggs, 35 Fla. 277; Wilson v. Tolson, 79 Ga. 137, 3 S. E. 900; Moore v. Hall, 48 Mich. 143, 11 N. W. 844; Roberts v. Parrish, 17 Or. 583, 22 Pac. 136; Cross v. Brown, 19 R. I. 220, 33 Atl. 147; King v. Fleece, 54 Tenn. (7 Heisk.) 273. But see Black v. Enterprise Ins. Co., 33 Ind. 223; Rock County Nat. Bank v. Hollister, 21 Minn. 385, where such indorsee was held not to be the "real party in interest." In Minnesota Thresher Mfg. Co. V. Heipler, 49 Minn. 395, 52 N. W. 33, it was held that the payee of a draft was the real party in interest, though there was an agreement between him and the drawer that he took it for collection. See, also, Eaton V. Alger, 47 N. Y. 345. 84 Subdivision 3 of same sections of negotiable instruments laws as last above cited. See Brook v. Vannest, 58 N. J. Law, 162, 22 Atl. 382. 85 Smith V. Bayer, 46 Or. 143, 79 Pac. 497, 114 Am. St. Rep. 858. Pay- ment to indorser after assignment a defense. Id. 86 Same subdivisions and sections of negotiable instruments laws as last above cited. 176 INDORSEMENT AND TRANSFER. § 135 An indorsement may be qualified.^^ An indorsement "without recourse, "S3 or in words of similar import,^^ is qualified. A qualified indorsement makes the indorser a mere assignor of the title to the instrument,^" but does not impair its negotiability.^^ In the absence of special contract, the obligations of a transferror of negotiable paper by an indorsement "without recourse" are "substantially the same as those of a transferror of such paper when payable to bearer by delivery merely. It is a clear and well settled doctrine that such a transfer does not make the party lia- ble as indorser. When he indorses 'vv'ithout recourse' * * * he ceases to be a party to the paper. He cannot be made liable Leary v. Blanchard, 48 Me. 269. Rights under indorsement for collection, see Bank of Metropolis v. First Nat. Bank, 19 Fed. 301; Central Railroad v. First Nat. Bank of Lynchburg, 73 Ga. 383; Claflin v. Wilson, 51 Iowa, 15, 50 N. W. 578. 87 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont-., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 33); Ariz. (§ 3336); 111. (§ 33); Kan. (§ 40); Md. (§ 52); Mich. (§ 35); Neb. (§ 33); N. Y. (§ 63); Ohio (§ 3172 e); R. I. (§ 41); Wis. (§ 1676-3). 88 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 38); Ariz. (§ 3341); 111. (§ 38); Kan. (§ 45); Md. (§ 57); Mich. (§ 40); Neb. (§ 38); N. Y. (§ 68); Ohio (§ 3172 i); R. I. (§ 46); Wis. (§ 1676-8). Doom V. Sherwin, 20 Colo. 234, 38 Pac. 56; Cross v. Hollister, 47 Kan. 652, 28 Pac. 693; Johnson v. Williard, 83 Wis. 420, 53 N. W. 776, 17 L. R. A. 564; President of Fitchburg Bank v. Greenwood, 84 Mass. (2 Al- len) 434; Hayden v. Strong, 23 Hun (N. Y.) 527. 89 Same sections of negotiable instruments laws as last above cited. See Markey v. Corey, 108 Mich. 184, 66 N. W. 493, 62 Am. St. Rep. 698, 36 L. R. A. 117. 90 Same sections of negotiable instruments laws as last above cited. Erotherton v. Street, 124 Ind. 599, 24 N. E. 1068. 91 Same sections of negotiable instruments laws as last above cited. Elgin City Banking Co. v. Hall [Tenn.] 108 S. W. 1068; Evans v. Free- man, 142 N. C. 61, 54 S. E. 847. Indorsement "for value received, I hereby sell, transfer, and assign the within note and the coupons thereto attached without recourse," does not impair negotiable character of in- strument. Thorp V. Mindeman, 123 Wis. 149, 101 N. W. 417, 107 Am." St. Rep. 1003. § 136 CONDITIONAL INDORSEMENTS. ]77 as a party to or upon the instrument." ^^ He still remains liable, hovrever, on the implied warranties which accompany a transfer of bearer paper by delivery .^^ As between successive indorsers it may be shown by parol to which the words "without recourse" apply.''* Conditional. § 136. Where an indorsement is conditional, a party required to pay the instrument may disregard the condition and make payment to the indorsee or his transferee, whether the condition has been fulfilled or not. But any person to whom an instrument so indorsed is negotiated will hold the same, or the proceeds thereof, subject to the rights of the person indorsing conditionally. An indorsement may also be conditional.^^ The person required to pay may disregard the condition, and pay to the indorsee or his transferee, whether the condition has been performed or not.^ But any person to whom an instrument so indorsed is negotiated 92 Watson V. Chesire, 18 Iowa, 202, 87 Am. Dec. 382. See, also, Rice V. Stearns, 3 Mass. 225, 3 Am. Dec. 129; Otis v. Cullum, 92 U. S. 447, 23 Law. Ed. 496; Hannum v. Richardson, 48 Vt. 508, 21 Am. Rep. 152; Drennan v. Bunn, 124 III. 175, 16 N. E. 100, 7 Am. St. Rep. 354; Palmer V. Courtney, 32 Neb. 773, 49 N. W. 754. 93 Watson V. Chesire, 18 Iowa, 202, 87 Am. Dec. 382. Indorsement "without recourse" does not avoid warranty of genuine- ness and title. Code Supp. § 3060-a65. State v. Corning State Sav. Bank, 139 Iowa, 388, 115 N. W. 937. For implied warranties, where negotiation is by delivery or qualified indorsement, see post, § 158. 94 Corbett v. Fetzer, 47 Neb. 269, 66 N. W. 417. 95 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 33); Ariz. (§ 3336); 111. (§ 33); Kan. (§ 40); Md (§ 52); Mich. (§ 35); Neb. (§ 33); N. Y. (§ 63); Ohio (§ 3172 e); R. I. (§ 41); Wis. (§ 1676-3). 96 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 39); Ariz. (§ 3342): It Opp. — Bel. — 12 178 INDORSEMENT AND TRANSFER. § 137 will hold the same, or the proceeds thereof, subject to the rights of the person indorsing conditionally.^^ By Whom Indorsed. In General. § 137. Generally the instrument must be indorsed by the per- son to whom it is payable or his duly authorized agent. § 138. The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity the cor- poration or infant may incur no liability thereon. In order to pass title to the instruument, the indorsement must be made by one legally interested in the paper ; that is, generally, by the payee or his duly authorized agent.^^ As a general rule executors have no power to bind the estate by contracts of indorse- ment.s9 While ordinarily the person transferring the paper must have capacity to contract,^°'' still, by the express provisions of the ne- gotiable instruments laws, the indorsement of an infant or cor- poration passes the property in the instrument, though, from (§ 39); Kan. (§ 46); Md. (§ 58); Mich. (§ 41); Neb. (§ 39); N. Y. (§ 69); Ohio (§ 3172 k); R. I. (§ 47); Wis. (§ 1676-9). This changes the old rule as it existed in England. See Robertson V. Kensington, 4 Taunt. 30, where the indorsement was to pay C, or order, "upon my name appearing in the Gazette as ensign in any regi- ment of the line between the 1st and 64th, if within two months from date," and it was held that a payment to a subsequent indorsee was made at the risk of the condition being unfulfilled. 87 Same sections of negotiable instruments laws as last above cited. 9S Chitty on Bills (13th Ed.) 197. 99 Packard v. Dunfee, 119 App. Div. 599, 104 N. Y. Supp. 140. 100 Nightingale v. Withington, 15 Mass. 272, 8 Am. Dec. 101; Hardy V. Waters. 38 Me. 450. § 139 WHO MUST INDORSE. 170 want of capacity the infant or corporation could incur no liability tliereon.^°i Joint Payees. § 139. Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must , indorse, unless the one indorsing has authority to indorse for the others. Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse unless the one indorsing has authority to indorse for the other.^'^^ 13^^ title will pass where one of two joint indorsees indorses to the other,i°3 Qj. where one of two joint payees indorses to a stranger, who in turn indorses to the other payee.^°* One partner may in- dorse for the firm,^05 ^nd all the partners may indorse to one of their number.^°^ 101 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 22); Ariz. (§ 3325); III! (§ 22); Kan. (§ 29); Md. (§ 41); Mich. (§ 24); Neb. (§ 22); N. Y. (§ 41); Ohio (§ 3171 v); R. I. (§ 30); Wis. (§ 1675-22). 102 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 41); Ariz. (§ 3344); 111'. (§ 41); Kan. (§ 48); Md. (§ 60); Mich. (§ 43); Neb. (§ 41); N. Y. r§ 71); Ohio (§ 3172 m); R. L (§ 49); Wis. (§ 1676-11). Allen V. Corn Exchange Bank, 87 App. Div. 335, 84 N. Y. Supp. 1001; Rhyner v. Feickert, 92 111. 305, 34 Am. Rep. 130; Foster v. Hill, 36 N. H. 526. Under this section, indorsement of all payees necessary to give good title to the transfereee. First Nat. Bank v. Gridley, 112 App Div 398, 98 N. Y. Supp. 445. 103 Logue v. Smith, Wright (Ohio) 10. 104 See McLeod v. Snyder, 110 Mo. 298, 19 S. W. 494. 105 Childress v. Emory, 21 U. S. (8 Wheat.) 642, 5 Law. Ed. 530. 106 Merrill v. Guthrie, 1 Pin. (Wis.) 435; Manegold v. Dulau 30 Wis S4L 180 INDORSEAIENT AND TRANSFER. § 14U By Agent. § 140. An indorsement may be made by a duly authorized agent. § 141. Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability. Indorsement by agent or in representative capacity. An indorsement may be made by an agent/*^'' and the authority of the agent may be in writing or by paroL^^^ While this author- ity may be implied, still it must ordinarily be expressly con- ferred.^"^ An authority to indorse, given by the payee of an or- der while competent, may be exercised by the person to whom it was given, after the payee has become incompetent.^^'^ Lawful possession of a negotiable instrument,^^^ or possession with au- thority to collect,^^^ confers a right to indorse. An unauthorized indorsement may be ratified,^^^ either by a failure to repudiate the indorsement after full knowledge of the facts,^^'* or by receiving 107 Northampton Bank v. Pepoon, 11 Mass. 288; Fountain v. Book- staver, 141 111. 461, 31 N. E. 17; Bettis v. Bristol, 56 Iowa, 41, 8 N. W. 808. E.inks au'tihorized to deal in commercial paper are bound by its indorse- ment or guaranty by their executwe officers. State v. Corning State Sav. Bank, 139 Iowa, 338, 115 N. W. 937. 108 Fountain v. Bookstaver, 141 111. 461, 31 N. E. 17; Bettis v. Bristol, 56 Iowa, 41, 8 N. W. 808; Cooper v. Bailey, 52 Me. 230. See, also, Sec- ond Nat. Bank v. Martin, 82 Iowa, 442, 48 N. W. 735; First Nat. Bank V. Loyhed, 28 Minn. 396, 10 N. W. 421. Authority of corporate officer to 'indorse paper payable to the corporation may be implied from pre- vious conduct and custom. Black v. First Nat. Bank, 96 Md. 399, 54 Atl. 88. Telegraphed authority "to indorse," what might be termed a re- newal note, held to include authority to waive demand, etc., the indorse- ment on the first note containing such a waiver. State Bank & Trust Co. of Los Angeles v. Evans, 198 Mass. 11, 84 N. E. 329. 109 Bank of Morganton v. Hay, 143 N. C. 326, 55 S. E. 811. no Mills V. American Express Co., 98 Mich. 154, 57 N. W. 97. 111 Andrews v. Bond, 16 Barb. (N. Y.) 633. 112 Willison V. Smith, 52 Mo. App. 133. 113 Lysle V. Beals, 27 La. Ann. 274. Ill Mayer v. Old, 57 Mo. App. 639. § 142 WHO MUST INDORSE. 181 the proceeds of the instruments;"^ but a mere acquiescence in an unauthorized sale of a note given to an agent for collection, with- out knowledge of the wrongful indorsement, does not amount to a ratification."^ "Where an instrument is so payable or indorsed tliat the payee or indorsee is under obligation to indorse in a rep- resentative capacity, he may indorse in such terms as will nega- tive personal liability,"'' By Fiscal Officer. § 142. "Where an instrument is drawn or indorsed to a person as "cashier" or other fiscal officer of a bank or corpo- ration, it is deemed prima facie to be payable to the ba,nk or corporation of which he is such officer, and may be negotiated by either the indorsement of the bank or cor- poration, or the indorsement of the officer. Where an instrument is drawn or indorsed to a person as "cash- ier" or other fiscal officer of a bank or corporation, it is deemed prima facie to be payable to such bank or corporation, and may be negotiated by either the indorsement of the bank or corpo- ration, or the indorsement of such officer,"^ and, as against a bona 115 Third Nat. Bank v. Butler Colliery Co., 59 Hun, 627, 14 N. Y. Supp. 21. But see Claflin v. Wilson, 51 Iowa, 15, 50 N. W. 578. iieSherrill v. Weisiger Clothing Co., 114 N. C. 436, 19 S. E. 365. ii7Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 44); Ariz. (§ 3347); 111. (§ 44); Kan. (§ 51); Md. (§ 63); Mich. (§ 46); Neb. (§ 44); N.-Y. (§ 74); Ohio (§ 3172 p); R. I. (§ 52); Wis. (§ 1676-14). Davis V. Peck, 54 Barb. (N. Y.) 425. Descriptio personae in indorsement, see Speelman v. Culbertson, 15 Ind. 441; Powell v. Morrison, 35 Mo. 244. A bank is bound by an indorsement, "Pay to order of A. J. A. Marine Bank by J. S. H., Pres't." Aiken v. Marine Bank, 16 Wis. 713. And a bank of which A. B. is cashier is bound by an indorsement, "A. B., Cas." Houghton V. First Nat. Bank, 26 Wis. 663, 7 Am. Rep. 107. 118 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 42); Ariz. (§ 3345); 111. 132 INDORSEMENT AND TRANSFER. § 142 fide purchaser, it would seem that this presumption is conclu- sive.1^9 This rule enlarges the previously existing rule that paper payable or indorsed to a cashier is payable to the bank,i2o by mak- ing paper payable or indorsed to "other fiscal officers" payable to the bank, and is undoubtedly based on the theory that the em- ployment of the qualifying word "cashier," or other designation of a fiscal office, appended to the name of a payee or indorsee of commercial paper, creates an ambiguity as to the real party in- tended, to explain which parol evidence is admissible to show who is the principal for whose benefit such agent received or accepted the promise to pay a stipulated sum of money.^^i Where, however, no official designation is added to the payee or indorsee's name, there being no uncertainty apparent from an in- spection of the paper, parol evidence is inadmissible to control or vary the terms of the writer.122 j^ indorsement of the name of a corporation, made by a duly authorized officer, is the indorse- ment of the corporation, though the agency does not appear.i^s (§ 42)- Kan. (§ 49); Md. (§ 61); Mich. (§ 44); Neb. (§ 42); N. Y. (§ 72); Ohio (§ 3172m); R. I. (§ SO); Wis. (§ 1676-12). Griffin V. Erskine, 131 Iowa, 444, 109 N. W. 13. 119 Held incompetent for bank to show that cashier was acting for own interest. Johnson v. Buffalo Center State Bank, 134 Iowa, 731, 112 N. W. 165. * 120 Watervliet Bank v. White, 1 Denio (N. Y.) 608; First Nat. Bank V. Hall, 44 N. Y. 395, 4 Am. Rep. 698; Farmers' & Mechanics' Bank v. Day, 13 Vt. 36. See, also, Dupont v. Mt. Pleasant Ferry Co., 9 Rich. Law (S. C.) 255 (indorsement to president of corporation); Sayers v. First Nat. Bank, 89 Ind. 230 (indorsement to trustee of university). 121 First Nat. Bank v. McCullough, 50 Or. 508, 93 Pac. 366, 126 Am. St. Rep. 758, 17 L. R. A. (N. S.) 1105. Under this section, in an action on a certificate of deposit payable to S, as cashier of a bank and indorsed by him as cashier, it is competent to show that S was the cashier of the bank and was acting in that capacity in transferring the certificate. Johnson v. Bufifalo Center State Bank, 134 Iowa, 731, 112 N. W. 165. i22First Nat. Bank v. McCullough, 50 Or. 508, 93 Pac. 366, 126 Am. St. Rep. 758, 17 L. R. A. (N. S.) 1105. 123 Second Nat. Bank v. Martin, 82 Iowa, 442, 48 N. W. 735. § 145 TIME OF INDORSEMENT. 183 Time and Place op Indorsement. § 143. Where an indorsement is dated, such date is deemed prima facie correct. § 144. Except where an indorsement bears date, after the ma- turity of an instrument, every negotiation is deemed prima facie to have been effected before the instrument wa^ overdue. § 145. Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated. Time of indorsement — Presumptions. An indorsement being dated, such date is deemed, prima facie, the true date thereof.^^i rp]jg indorsement being undated, it is presumed to have been made on the date of execution and deliv- ery of the note.125 Every indorsement is deemed prima facie to have been affected before the instrument was overdue, except, of course, where the instrument bears date later than the time of maturity of the instrument.^^^ 124 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.] Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 11); Ariz. (§ 3314)- 111' (§ 11); Kan. (§ 18); Md. (§ 30); Mich. (§ 13); Neb. (§ 11); N. Y. (§'30)- Ohio (§ 3171 j); R. I. (§ 19); Wis. (§ 1675-11). 125 Rodriguez v. Merriman, 133 111. App. 372; Grier v. Cabbie, 45 111. App. 405; Way v. Butterworth, 108 Mass. 509; Bradford v. Prescott, 85 Me. 482; Mason v. Noonan, 7 Wis. 510. In the absence of evidence to the contrary, indorsements are presumed to have been made at or about the date of the note. Rule applied to note payable to the order of the maker. Roach v. Sanborn Land Co 135 Wis. 354, 115 N. W. 1102. Variance between pleading and proof as to time of indorsement, see Canfield v. Mcllwaine, 32 Md. 94; Little v. Blunt, 33 Mass. (16 Pick) 359; Davis v. Miller, 14 Grat. (Va.) 1. 126 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.,' Or' Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 45) ; Ariz. (§ 3348) • 111' (§ 45); Kan. (§ 52); Md. (§ 64); Mich. (§ 47); Neb. (§ 45); N. Y (§' 75)'- Ohio (§ 3172 q); R. I. (§ 53); Wis. (§ 1676-15). 184 INDORSEMENT AND TRANSFER. § iiij Place of indorsement — Presumptions. Following the common-law riile,i27 every indorsement is pre- sumed to have been made at the place where the instrument is dated.128 Negotiation of Bills Drawn In Sets. § 146. V/here two or more parts of a set are negotiated to dif- ferent holders in due course, the holder whose title first accrues is as between such holders the true owner of the bill. But nothing herein affects the rights of a person who in due course accepts or pays the part first presented to him. Ordinarily the indorsement or transfer of one part of a bill drawn in a set is a transfer of the whole set,i29 i^^it, as between holders in due course of two or more parts of a set, the one whose title first accrues is the owner of the bill.^^" But this rule does not affect the rights of a person who in due course accepts or pays the part first presented to him.^^i 127 Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 111 Am. St. Rep. 717, 2 L. R. A. (N. S.) 299, afg. 87 App. Div. 633, 84 N. Y. Supp. 1121. 128 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 46); Ariz. (§ 3349); 111 (§ 46); Kan. (§ S3); Md. (§ 65); Mich. (§ 48); Neb. (§ 46); N. Y. (§ 76); Ohio (§ 3172 r); R. I. (§ 54); Wis. (§ 1676-16). Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 111 Am. St. Rep. 717, 2 L. R. A. (N. S.) 299. i29Walsh V. Blatchley, 6 Wis. 413, 422, 70 Am. Dec. 409. 130 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 179); Ariz. (§ 3482); lU. (§ 178); Kan. (§ 186); Md. (§ 198); Mich. (§ 181); Neb. (§ 178); N. Y. (§ 311); Ohio (§ 3177 p); R. I. (§ 187); Wis. (§ 1681-36). 131 Same sections of negotiable instruments laws as last above cited. §147. TERMINATION OF LIABILITY. 185 Striking Out Indorsements. § 147. The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the indorse- ment. It is a general rule that an indorser may strike out his own in- dorsement if the instrument is returned to him,i22 qj. indorsements subsequent to his own if he again becomes the holder.^ss tj^^ holder may also, at any time, strike out any indorsement which is not necessary to his title,^^! and in this connection the negotiable instruments laws follow the common-law rule.^^ An indorser 13'^ Sweet V. Garwood, 88 111. 407; Chautauqua County Bank v. Davis, 21 Wend. (N. Y.) 584. See, also, French v. Jarvis, 29 Conn. 347. issQiddings v. McCumber, 51 111. App. Z72>; Alcock v. McKain, 12 La. Ann. 614; Ritchie v. Moore, 5 Munf. (Va.) 388, 7 Am. Dec. 688. See, also, Bank of U. S. v. United States, 43 U. S. (2 How.) 711, 11 Law. Ed. 257. 134 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 48); Ariz. (§ 3351); 111. (§ 48); Kan. (§ 55); Md. (§ 67); Mich. (§ 50); Neb. (§ 48); N. Y. (§ 78); Ohio (§ 3172 t); R. I. (§ 56); W^is. (§ 1676-18). Where note indorsed to bank for collection and after protest is re- turned to the indorser, the latter may cancel his indorsement to the bank. New Haven Mfg. Co. v. New Haven Pulp & Board Co., 76 Conn. 126, 55 Atl. 604. Where one becomes the holder of a note by delivery under an indorsement in blank by the payee, he is entitled to strike out a sub- sequent indorsement under which he does not claim title, and it is im- material whether such indorsement is restrictive or not. Jerman v. Ed- wards, 29 App. D. C. 535. A blank indorsement may be struck out at the trial. Parks v. Brown, 16 111. 454; Hunter v. Hempstead, 1 Mo. 67, 13 Am. Dec. 468. Es- pecially if such indorsement is not declared on in the petition. Merg V. Kaiser, 20 La. Ann. 377; Hill v. Buddington, 8 Rob. (La.) 119. But in a suit by a holder against an indorser, plaintiff will not be al- lowed to strike out the name of any indorser prior to defendant. Curry V. Bank of Mobile, 8 Port. (Ala.) 360. 135 Jerman v. Edward, 29 App. D. C. 535. 186 INDORSEMENT AND TRANSFER. §148 whose indorsement is struck out, and all indorsers subsequent to him, are thereby diseharged.^^^ Termination op Negotiability. § 148. An instrument negotiable in its origin continues to be ne- gotiable until it has been restrictively indorsed or dis- charged by payment or otherwise. An instrument negotiable in its origin continues to be nego- tiable until it has been restrictively indorsed or has been dis- charged by payment or otherwise.^^^ This rule applies though the instrument is overdue,^^^ though of course, in such case, the rights and duties of the parties are different, the instrument becoming, so far as the indorser is concerned, in effect payable on demand.^^^ Reissuance and Renegotiation. § 149. Where an instrument is negotiated back to a prior party, such party may, subject to the provisions herein, reissue and further negotiate the same. But he is not entitled to enforce paj^ment thereof against any intervening party to whom he was personally liable. If an instrument is negotiated back to a prior party, such party may, subject to the other provisions of the negotiable instruments 136 Same sections of negotiable instruments laws as last above cited. 137 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or,, Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 47); Ariz. (§ 3350); [11. (§ 47); Kan. (§ 54); Md. (§ 66); Mich. (§ 49); Neb. (§ 47); N. Y. (§ 17) \ Ohio (§ 3172 s); R. I. (§ 55); Wis. (§ 1676-17). 138 National Bank of Washington v. Texas, 87 U. S. (20 Wall.) 72, 22 Law. Ed. 295; Moore v. Alexander, 63 App. Div. 100, 71 N. Y. Supp. 420. Within the meaning of garnishment statute, an overdue promissory note was held "negotiable." Oakdale Mfg. Co. v. Clarke [R. I.] 69 Atl. 681. 139 Patterson v. Todd, 18 Pa. 426, 57 Am. Dec. 622, 12 L. R. A. 727; Rosson V. Carroll, 90 Tenn. 90, 16 S. W. 66; Moore v. Alexander, 63 App. Div. 100, 71 N. Y. Supp. 420. See ante, chapter IV, § 44. §149 REISSUANCE AND RENEGOTIATION. 187 laws, reissue and further negotiate the same, but cannot enforce payment thereof against any intervening party to whom he was personally liable.^*" woNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 50); Ariz. (§ 3353); 111. (§ SO); Kan. (§ 57); Md. (§ 69); Mich. (§ 52); Neb. (§ 50); N. Y. (§ 80); Ohio (§ 3172 v); R. I. (§ 58); Wis. (§ 1676-20). See Scott v. First Nat. Bank, 71 Ind. 445; Montgomery & E. R. Co. v. Trebles, 44 Ala. 255. CHAPTER XI. LIABILITIES AND RIGHTS OF PARTIES. § 150. In General. § 151. Of Maker. § 152. Of Drawer. § 153. Of Acceptor. § 154. Of Indorser — Who Deemed an Indorser. § 155. Indorser of Paper Negotiable by Delivery. § 156. Irregular Indorsers. § 157. Bills in Sets. § 158. Warranties — Negotiation by Delivery or Qualified Indorsement. § 159. Persons in Whose Favor Warranty Exists. § 160. Public or Corporate Securities. § 161. Warranties — Indorser Without Qualification. § 162. Contract of General Indorser. § 163. Consecutive and Joint Indorsers. § 164. Special Indorsers. § 165. Indorsement by Broker or Agent. § 166. Rights of Holder. § 167. Bona Fide Holders. § 168. Presumptions and Burden of Proof. § 169. Defenses Available Against Bona Fide Holders. § 170. Incomplete Instruments. § 171. Presumption of Delivery. § 172. Bona Fide Holder May Enforce Payment to Full Amount. § 173. Holder Not in Due Course. § i74. Same — Deriving Title From Holder in Due Course. Liability in General. § 150. No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise ex- pressly provided. Persons dealing with negotiable paper are presumed to take it on the faith of the signatures thereon, and following this rule the negotiable instruments acts provide that, except for express 188 § 151 OF MAKER. ]g9 exceptions, no one is liable on an instrument unless his signature appears thereon.^ Liability Op ]\Taker. § 151. The maker of a negotiable instrument by making it en- gages that he will pay it according to its tenor, and ad- mits the existence of the payee and his then capacity to indorse. The liability of the maker of a negotiable instrument, based on the mere fact of its execution by him, is measured by the promise contained therein, which is that he will pay the instrument ac- cording to its tenor.2 By making the instrument he also admits the existence of the payee, and his then capacity to indorse.^ 1 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La.. Mass.. Mo., Mout., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 18); Ariz. (§ 3321); III. (§ 18); Kan. (§ 25); Md. (§ 37); Mich. (§ 20); Neb. (§ 18); N. Y. (§ 37); Ohio (§ 3171 q); R. L (§ 26); Wis. (§ 1675-18). Seattle Shoe Co. v. Packard, 43 Wash. 527, 86 Pac. 845, 117 Am. St. Rep. 1064. 2 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 60); Ariz. (§ 3363); 111. (§ 60); Kan. (§ 67); Md. (§ 79); Mich. .(§ 62); Neb. (§ 60); N. Y. (§ 110); Ohio (§ 3173 e); R. I. (§ 68); Wis. (§ 1677). A collateral agreement that the maker shall not be personally liable on the instrument according to its tenor is not a defense. Armstrong v. Scott, 36 Fed. 63; Hirsch v. Oliver, 91 Ga. 554, 18 S. E. 354; Hodgkins V. Moulton, 100 Mass. 309; Cumings v. Kent, 44 Ohio St. 92, 4 N. E. 710, 58 Am. Rep. 796; Reed v. Nicholson, 37 Mo. App. 646. But an agreement that a note signed by trustees of the school district shall be the note of the district is a good defense to an action against the trustees individually. Bingham v. Stewart, 14 Minn. 214. An agreement between the maker and the president of the payee bank that the maker shall not be liable is a good defense to an action by a receiver of the bank. Higgins V. Ridgway, 153 N. Y. 130, 47 N. E. 32. The question of the^liability of the maker to garnishment at the in- stance of a creditor of the payee, before maturity, is important. The rule is that, in the absence of a specific statute allowing it, the maker of 190 LIABILITIES AND RIGHTS § 152 Liability Of Drawer. § 152. By drawing the instrument the drawer admits the exist- ence of the payee and his then capacity to indorse, and engages that on due presentment the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount there- of to the holder, or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or lim- iting his own liability to the holder. The drawer also admits the existence of the payee, and his then capacity to indorse, and engages that, on due presentment, the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored, and the necessary steps on dis- honor duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it.* a negotiable note is not subject to garnishment at the instance of a cred- itor of the payee before maturity of the note, "because, if this be done, he is liable to be made to pay the same debt twice over; and we find no authority for holding that the rule is different when he executed the note with the knowledge that it is the purpose of the payee to place the fund beyond the reach of his creditors." Willis v. Heath, 75 Tex. 124, 12 S. W. 971, 16 Am. St. Rep. 876. Indorsee of note executed by ten persons cannot maintain joint action against all, the note providing that the liability of each was limited to one-tenth the amount of the note. National Bank v. Buckwalter, 214 Pa. 289, 63 Atl. 689. 3 Same sections of negotiable instruments laws as last above cited. Instruments payaible to the order of a fictitious person are payable to bearer. See ante, § 51. That defendants issued and delivered check "to an imposter who falsely claimed to represent an association of 'freight handlers' " is no defense as against a bona fide holder. Boles v. Hard- ing, 201 Mass. 103, 87 N. E. 481. 4 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 61); Ariz. (§ 3364); III'. §153 OF ACCEPTOR. 191 The drawer may, however, insert in the instrument a stipulation negativing or limiting his own liability to tlie holder,^ tlie tlieory being that an express stipulation of this kind conveys to the hold- er actual notice of the limitation of liability. By virtue of this provision an instrument may be drawn "without recourse" on the drawer. Liability of Acceptor. § 153. The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance, and admits: 1. The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument ; and 2. The existence of the payee and his then capacity to indorse. The drawee of a bill, who, as we have seen, is a mere stranger without liability before acceptance,^ becomes on acceptance a principal debtor,'^ and engages to pay the bill according to the (§ 61); Kan. (§ 68); Md. (§ 80); Mich. (§ 63); Neb. (§ 61); N. Y. (§ 111); Ohio (§ 3173 0; R. I. (§ 69); Wis. (§ 1677-1). The drawer is discharged where the payee transmits the draft by mail, and fails to discover its loss for six rnonths. Bank of Gilby v. Farns- v.orth, 7 N. D. 6, 72 N. W. 901, 38 L. R. A. 843. But a promise by the drawer to pay made with knowledge of the facts is a waiver of his right to such discharge. Id. 5 Same sections of negotiable instruments laws as last above cited. For various agreements qualifying or limiting the liability of the maker or drawer, see Collins v. Seay, 35 Ala. 347; King v. King, 69 Ind. 467; Montgomery v. Page, 29 Or. 320, 44 Pac. 689; Commercial Bank v. Hart, 10 Wash. 303, 38 Pac. 1114. 6 See ante, § 88. 7 Capital City Ins. Co. v. Quinn, 73 Ala. 558; Parmelee v. Williams, 72 Ga. 42; Trimble v. City Nat. Bank, 12 Ky. Law Rep. 909, IS S. W. 853; Green v. Goings, 7 Barb. (N. Y.) 652. A bill when accepted becomes similar to a promissory note, the acceptor being the promisor, and the drawer standing in the relation of an indorser. Haddock, Blanchard & Co. V. Haddock, 192 N. Y. 499, 85 N. E. 682,' a fg. 118 App. Div. 412, 103 192 LIABILITIES AND RIGHTS. § 153 tenor of the acceptance.^ By the acceptance the acceptor also ad- mits the existence of the drawer and the genuineness of his sig- nature,^ for it is incumbent upon the drawee of a bill to be satis- fied that th^ signature of the drawer is genuine, as he is presumed to know the drawer's handwriting; and, if the drawee accepts or pays the bill to which the drawer's name has been forged, he can neither repudiate the acceptance nor recover the money paid,^o even from the person to whom it was paid, the latter not being the forger, although the position of the parties to such per- son has not changed in any respect.^^ In such case the drawee can acquire no rights as against the person to whom payment was N. Y. Supp. 584. The acceptor of a bill of exchange becomes primarily- liable for its payment, and is to be considered the principal debtor; and this is true even if the acceptance was for the accommodation of the drawer, the acceptor having no funds of the drawer in his hands to pay- it. Huston V. Newgass, 234 111. 285, 84 N. E. 910. But see Canadian Bank of Commerce v. Coumbe, 47 Mich. 358, 11 N. W. 196, where it was held that a payee with notice that an acceptance was for accommo- dation cannot treat the acceptor as a principal debtor, but can treat him as a surety only. As a general rule an accommodation acceptor is con- sidered to be a surety as between himself and the drawer. Child v. Eureka Powder Works, 44 N. H. 354; In re Babcock, Fed. Cas. No. 696. 8 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 62); Ariz. (§ 3365); 111. (§ 62); Kan. (§ 69); Md. (§ 81); Mich. (§ 64); Neb. (§ 62); N. Y. (§ 112); Ohio (§ Z\72,g); R. L (§ 70); Wis. (§ 1677-2). Greene v. Duncan, 2,7 S. C. 239, 15 S. E. 956. Damages recoverable on protest of foreign bill, "see post, § 211. 9 Same sections of negotiable instruments laws as last aboVe cited. Price V. Neal, 3 Burrows, 1354; United States Bank v. Bank of Georgia, 33 U. S. (10 Wheat.) 2>2,Z, 6 Law. Ed. 334; White v. Continental Nat. Bank, 64 N. Y. 316, 21 Am. Rep. 612; Holt v. Ross, 54 N. Y. 472, 13 Am. Rep. 615; Star Fire Ins. Co. v. New Hampshire Nat. Bank, 60 N H. 442; Adam v. Manufacturers' & Traders' Nat. Bank, 63 Misc. 403, 116 N. Y. Supp. 595. 10 Title Guarantee & Trust Co. v. Haven, 126 App. Div. 802, 111 N. Y. Supp. 305. 11 Title Guarantee & Trust Co. v. Haven, 126 App. Div. 802, 111 N. Y. Supp. 305. § 153 OF ACCEPTOR. 103 made or any person interested in sustaining the paj'^nient as valid,^' nor can he be subrogated to the rights of any siu-li paity.'- lie also admits the drawer's capacity^* and authority ^^ ^q draw the instrument, the existence of the payee and his then capacity to indorse,^^ and the existence of funds of the drawer in his hands," The acceptor is liable as well to a holder who took before the ac- ceptance as to one who took after,^^ ^nd is not discharged by fail- ure of the holder to sue the drawer/^ or by a refusal of the holder to allow the acceptor to take up the bill a,t maturity .20 The ac- ceptor cannot show that his acceptance, absolute on its face, was in fact conditional,^^ nor can he show, as a^rainst the payee, a sub- sequent agreement between himself and the drawer modifying the terms of the acceptance."^ If the drawee accepts uncondi- tionally while in funds, he cannot show, as against the payee, that the drawer had previously assigned the funds, the payee having been ignorant of the assignment at the time he took the bill.-'^ If the drawee accepts, in his individual capacity, a bill drawn on 12 Title Guarantee & Trust Co. v. Haven, 126 App. Div. 802, 111 N. Y. Supp. 305. 13 Title Guarantee & Trust Co. v. Haven, 126 App. Div. 802, 111 N. Y. Supp. 305. 1* Same sections of negotiable instruments laws as last above cited. Acceptor of bill drawn by married woman is estopped to deny her competency. Cowton v. Wickersham, 54 Pa. 302. 15 Same sections of negotiable instruments laws as last above cited. ^6 Same sections of negotiable instruments laws as last above cited. 17 This provision is not in the negotiable instruments laws, but is a general rule of law. See cases cited in § 96, and Bradley v. McClellan, 11 Tenn. (3 Yerg.) 301; Jordan v. Tarkington, 15 N. C. (4 Dev.) 357. iSHeuertematte v. Morris, 101 N. Y. 63, 4 N. E. 1, 54 Am. Rep. 657; Iselin V. Chemical Nat. Bank, 16 Misc. 437, 40 N. Y. Supp. 388; Credit Co. V. Howe Mach. Co., 54 Conn. 357, 8 Atl. 472, 1 Am. St. Rep. 123; Arpin V. Owens, 140 Mass. 144, 3 N. E. 25. i9Diversy v, Moor, 22 111.^31, 74 Am. Dec. 157. 20 Williams v. Theodore, 34 La. Ann. 89. But see First Nat. Bank v. Day, 64 Iowa, 118, 19 N. W. 882, where the acceptor was held to be dis- charged by an agreement not to sue him. 21 Flournoy v. First Nat. Bank, 79 Ga. 810, 2 S. E. 547. 22 Mason v. Graff, 35 Pa. 448. 23 Tucker v. Welsh, 17 Mass. 160, 9 Am. Dec. 137. Opp. — Sel. — 13 394 LIABILITIES AND RIGHTS. §15^ him as agent or other representative, he becomes personally lia- ble ; 2^ but an acceptance, in a representative capacity, of a bill drawn on the drawee as an individual, negatives an intent to be- come personally liable, and is not a sufficient acceptance of the bill.2^ By this assent or acceptance the drawee undertakes to pay the bill at maturity ^^ in money .^^ By certifying a check on a deposit with it, a bank estops itself to deny the existence of the drawer, the genuineness of his sig- nature, and the sufficiency of funds to pay the check, and promises to pay it on demand.^^ The bank, by certifying a check, admits also the existence of the payee, and his then capac- 24 Arnold v. Sprague, 34 Vt. 402; Taber v. Cannon, 49 Mass. (8 Mete.) 456; Lallerstedt v. Griffin, 29 Ga. 708. 25 Walker v. Bank of State of New York, 13 Barb. (N. Y.) 636. Di- rectors of a corporation whose charter does not give authority to accept bills of exchange are personally liable on their acceptances purporting to be for the company. West London Commercial Bank v. Kitson, 13 Q. B. Div. 360. 26 Hoffman v. Bank of Milwaukee, 79 U. S. (12 Wall.) 181, 20 Law. Ed. 366. 2" Same sections of negotiable instruments laws as last above cited, and Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 1); Ariz. (§ 3304); 111. (§ 1); Kan. (§ 8); Md. (§ 20); Mich. (§ 3); Neb. (§ 1); N. Y. (§ 20); Ohio (§ 3171); R. I. (§ 9); Wis. (§ 1675-1). 28 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J , N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 62); Ariz. (§ 3365); 111. (§ 62); Kan. (§ 69); Md. (§ 81); Mich. (§ 64); Neb. (§ 62); N. Y. (§ 112); Ohio (§ 3173 g); R. I. (§ 70); Wis. (§ 1677-2). Marine Nat. Bank v. National City Bank, 59 N. Y. 67, 17 Am. Rep. 305; Willets v. Phoenix Bank, 9 N. Y. Super Ct. (2 Duer) 121. The certificate by a bank that a check is good is equivalent to acceptance, and raises an implication that it is drawn upon sufficient funds in the hands of the drawee, that they have been set apart for its satisfaction, and that they shall be so applied whenever the check is presented for pay- ment. Blake v. Hamilton Dime Sav. Bank Co., 79 Ohio St. 189, 87 N. E. 72,, 20 L. R. A. (N. S.) 290. The transfer of a certified check is an as- signment of money to meet it, and the bank making the certification is liable therefor to the holder. Id. § 154 OF INDORSEE. 195 ity to indorse the cheek,^^ but "does not admit the genuineness of the indorser's signature.^" Certification of a check operates as an assignment,^! and the object of certifying being to enable a holder to use the check as money, the drawer or indorser of a certified check cannot, after its delivery, revoke it or stop pay- ment upon it by notice to the drawee not to pay.^^ -q^i a bank is not liable on a check certified by it and payable to order, where it is cashed by another bank without the indorsement of the payee 33 Of Indorser — Who Deemed An Indorsee. § 154. A person placing his signature upon an instrument other wise than as maker, drav/er or acceptor, is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. Following the apparent general policy of the act to make irreg- ular parties indorsers, the negotiable instruments acts provide that where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is deemed an indorser.^* This rule applies only to cases of doubt arising out of the location of the signature on the in- strument, and does not apply where the doubt is as to whether 29 Same sections of negotiable instruments laws as last above cited. But see First Nat. Bank v. Northwestern Nat. Bank, 152 111. 296, 38 N. E. 739, 43 Am. St. Rep. 247, 26 L. R. A. 289. 30 First Nat. Bank v. Northwestern Nat. Bank, 152 111. 296, 38 N. E. 739, 43 Am. St. Rep. 247, 26 L. R. A. 289. siMeuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83. 32 Blake V. Hamilton Dime Sav. Bank Co., 79 Ohio St. 189, 87 N. E. 73, 20 L. R. A. (N. S.) 290. 33 Goshen Nat. Bank v. Bingham, 118 N. Y. 349, 23 N. E. 180, 16 Am. St. Rep. 765, T L. R. A. 595. 34 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 17); Ariz. (§ 3320); 111. (§ 17); Kan. (§ 24); Md. (§ 36); Mich. (§ 19); Neb. (§ 17); N. Y. (§ 36); Ohio (§ 3171 p); R. L (§ 25); Wis. (§ 1675-17). 196 LIABILITIES AND RIGHTS. § 154 the party intended to sign in an individual or in a representative capacity as maker.^^ Under this provision, if a bill is drawn to the order of the drawer, one who writes his name across the face of the instrument is an indorser, not an acceptor.^^ Consistent with and following the above mentioned rule, the negotiable instruments acts provide that one placing his signature on an instrument otherwise than as maker, drawer, or acceptor, is deemed to be an indorser, unless he clearly indicates by appropri- ate words his intention to be bound in some other capacity;^'' a party's status being fixed by this rule, parol evidence is not ad- missible to alter it.-'^^ It follows that persons placing their sig- natures on the back of the note before delivery for the accom- modation of the maker are indorsers and cannot be held as joint 33 Germania Nat. Bank v. Mariner, 129 Wis. 544, 109 N. W. 574. 36 Walton V. Williams, 44 Ala. 347. 37 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. li., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 63); Ariz. (§ 3366); 111. (§ 63); Kan. (§ 70); Md. (§ 82); Mich. (§ 65); Neb. (§ 63); N. Y. (§ 113); Ohio (§ 3173 h); R. L (§ 71); Wis. (§ 1677-3). Walker v. Dunham, 135 Mo. 396, 115 S. W. 1086; Roessler v. Lan- caster, 130 App. Div. 1, 114 N. Y. Supp. 387; Rockfield v. First Nat. Bank, 11 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842; Downey v. O'Keefe, 26 R. I. 571, 59 Atl. 929; Thorpe v. White, 188 Mass. 333, 74 N. E. 592; Toole V. Crafts, 193 Mass. 110, 78 N. E. 775, 118 Am. St. Rep. 455; Far- qnhar v. Hieham, 16 N. D. 106, 112 N. W. 557; Gibbs v. Guaraglia, 75 N. J. Law, 168, 67 Atl. 81; Wilson v. Hendee, 74 N. J. Law, 640, 66 Atl 413; Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886; Far Rockaway Bank V. Norton, 186 N. Y. 484, 79 N. E. 709; Vander Ploeg v. Van Zuuk, 135 Iowa, 350, 112 N. W. 807, 124 Am. St. Rep. 275; Mercantile Bank v. Busby (Tenn.) 113 S. W. 390. This abrogates the old rule declared in some states (see Chaddock v. Vanness, 35 N. J. Law, 517, 10 Am. Rep. 256) that the signature of a third party upon the back of a negotiable instrument prior to its ,4elivery to the payee creates no implied or com- mercial contract whate'^er (Wilson v. Hendee, 74 N. J. Law, 640, 66 Atl. 413). A partner by individually indorsing a firm note becomes an indorser as well as maker. National Exch. Bank v. Lubrano (R. I.) 68 Atl. 944. Placing one's name on the back of a note prior to delivery. Bank of Montpelier v. Montpelier Lumber Co. (Idaho) 102 Pac. 685. Liability or irregular indorser, see post, § 156. 38Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886. § 155 OF INDORSER. 197 makers on the ground that the holder would not have taken the note without their signatures.^^ Following this rule, it has been held that the signing of a guaranty of payment, combined witii waiver of demand, notice and protest, constitues the signers ol' such an indorsement, who are payees of the note, indorsers and not guarantors,^"^ and that adding a guaranty subsequent to one's indorsement does not change or affect the character of the lat- ter.*^ Being indorsers, such persons are entitled to demand, pro- test and notice.*^ § 155. Where a person places his indorsement on an instrument negotiable by delivery, he incurs all the liabilities of an indorser. A person who places his indorsement on an instrument nego- tiable by delivery incurs all the liabilities of an indorser.^ This is true, of course, whether the indorsement is for accommodation or is placed on the instrument in ignorance of the fact that it is negotiable by delivery and that the indorsement is unnecessary. The rule holds also where the indorsement is coupled with a guar- anty of payment.** 39Deahy v. Choquet, 28 R. I. 338, 67 Atl. 421, 14 L. R. A. (N. S.) 847. 40Voss V. Chamberlain, 139 Iowa, 569, 117 N. W. 269. *i Elgin City Banking Co. v. Hall (Tenn.) 108 S. W. 1068. 42Rockfield v. First Nat. Bank, 11 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842; J. W. Perry Co. v. Taylor Bros., 148 N. C. 362, 62 S. E. 423. *3 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.! Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 67); Ariz. (§ 3370); III' (§ 67); Kan. (§ 74); Md. (§ 86); Mich. (§ 69); Neb. (§ 67); N. Y. (§ 117); Ohio (§ 3173 1); R. I. (§ 75); Wis. (§ 1677-7). Doom V. Sherwin, 20 Colo. 234, 38 Pac. 56; Tillman v. Allies, 5 Smedes & M. 373; Brush v. Reeves' Adm'rs, 3 Johns. (N. Y.) 439. « Leggett V. Raymond, 6 Hill (N. Y.) 639. 198 LIABILITIES AND RIGHTS- § 15ti. Same — Liability op Irregular Tndorseb. § 156. Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser in accordance with the follow- ing rules: 1. If the instrument is payable to the order of a third person, he is liable to the payee and to all subse- quent parties; 2. If the instrument is payable to the order of the maker or drawer, or is payable to bearer, he is liable to all parties subsequent to the maker or drawer ; 3. If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee. The courts differ widely as to the status and liability of a per- son not otherwise a party, who places his signature in blank on a negotiable instrument before delivery. The weight of authority has classed such a person as a joint maker,^^ but he has been held by some courts to he an indorser,*^ and by others to be a guar- ds Byers v. Tritch, 12 Colo. App. 377, 55 Pac. 622; Allen v. Brown, 124 Mass. 77; Gumz v. Giegling, 108 Mich. 295, 66 N. W. 48; Stein v. Pass- .nore, 25 Minn. 256; McCallum v. Driggs, 35 Fla. 277, 17 So. 407;Salis- bury V. First Nat. Bank, 37 Neb. 872, 56 N. W. 727, 40 Am. St. Rep. 527; .ackson Bank v. Irons, 18 R. I. 718, 30 Atl. 420. But see Moorman v. Wood, 117 Ind. 144, 19 N. E. 739. 46 Fisk V. Miller, 63 Gal. 367; Davis v. Barron, 13 Wis. 254. The status of such a signer has also been held to be that of a second indorser. Bogue V. Melick, 25 111. 91; Collins v. Everett, 4 Ga. 266; Baker v. Mar- tin, 3 Barb. (N. Y.) 634; Lester v. Paine, 39 Barb. (N. Y.) 616; Deering V. Creig-hton, 19 Or. 118, 24 Pac. 198, 20 Am. St. Rep. 800. But evidence was admissible to show that the indorsement was made for accommo- dation, in which case the status would be that of a first indorser. Coul- ter V. Richmond, 59 N. Y. 478. On the rights and liabilities of anomalous or irregular indorsers, see, also, Seabury v. Hungerford, 2 Hill (N. Y.) 80; Hall v. Newcomb, 7 Hill (N. Y.) 416, 42 Am. Dec. 82; Union Bank v. Willis, 49 Mass. (8 Mete.) 504, 22 S. W. 211, 36 Am. St. Rep. 100; Fes- senden v. Summers, 62 Cal. 484; Bank of Jamaica v. Jefferson, 92 Tenn. 537, 41 Am. Dec. 541. §156 OF IRREGULAR INDORSER. 199 antor,^ and by still others to be a mere surety.*^ The negotiable instruments laws settle the difficulty by providing that such a signer shall be liable as indorser according to the following rules : " (1) If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties."*^ " (2) If the instrument is payable to the order of the maker or drawer, or is payable to bearer, he is liable to all parties sub- sequent to the maker or drawer. ' ' ^ "(3) If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee. "^^ This section should be construed with the other sections of the act,^^ and when so construed is limited in its application to the lia- bility of the parties where the paper is with the public as a nego- 47 Portsmouth Sav. Bank v. Wilson, 5 App. D. C. 8; Varley v. Title Guarantee & Trust Co., 60 111. App. 565; Arnold v. Bryant, 71 Ky. (8 Bush) 668. 48Killian v. Ashley, 24 Ark. 511, 91 Am. Dec. 519; Rogers v. Gibbs, 24 La. Ann. 468. *9 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 64); Ariz. (§ 3367); 111. (§ 64); Kan. (§ 71); Md. (§ 83); Mich. (§ 66); Neb. (§ 64); N. Y. (§ 114); Ohio (§ 3173 i); R. I. (§ 72); Wis. (§ 1677-4). A. B. Farquhar Co. v. Higham, 16 N. D. 10, 112 N. W. 557; Guttman v. Abbott, 110 N. Y. Supp. 376. In a recent New York case it was held that where an action on a note was begun before the passage of the nego- tiable instruments law, the complaint alleging execution of the note by defendant, and its delivery, should have alleged that the note was in- dorsed to give credit to the maker, or as surety for him, as required by statute prior to the passage of the negotiable instruments laws, and that th-^ defect was not cured by section 114 of said law. McMoran v. Lange, 25 App. Div. 11, 48 N. Y. Supp. 1000. 50 Subdivision 2 of same sections of negotiable instruments laws as last above cited. 51 Subdivision 3 of same sections of negotiable instruments laws as last above cited. 52 Neg. Inst, Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 68): Ariz. (§ 3371); IlL (§ 68); Kan. (§ 75); Md. (§ 87); Mich. (§ 70); Neb. (§ 68); N. Y. (§ 118); Ohio (§ 3173 m); R. I. (§ 76); Wis. (§ 1677-8). 200 LIABILITIES AND RIGHTS. §156 tiable instrument,^^ and does not govern the rights of an indorser before delivery as against a maker of a bill,^* nor does it define the rights and liabilities of several irregular indorsers as between themselves.^5 This section changes the law in many of the states,^^ and has been held in New York to apply only to indorsement before de- livery .^'^ Actual ownership of commercial paper and use thereof by the owner are essential to sustain irregular indorsements.^^ As to indorsers signing for the accommodation of the maker be- fore indorsement by the payee, the defenses of invalidity and want of consideration are open in the same way as they would be in an action against the maker.^^ In cases arising under the third subdivision, parol evidence is admissible and necessary to estab- lish whether the indorser signed for the accommodation of the payee.^° 53 Haddock, Blanchard & Co. v. Haddock, 118 App. Div. 412, 103 N. Y. Supp. 584. 54 Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499, 85 N. E. 682, 19 L. R. A. (N. S.) 136, afg. 118 App. Div. 412, 103 N. Y. Supp. 584. See post, § 162. 55 Wilson V. Hendce, 74 N. J. Law, 640, 66 Atl. 413. See post, § 163. 56 Far Rockaway Bank v. Norton, 186 N. Y. 484, 79 N. E. 709, afg. 110 App. Div. 917, 96 N. Y. Supp. 1124; Roessler v. Lancaster, 130 App. Div. 1, 114 N. Y. Supp. 387. One who indorses negotiable paper in blank be- fore .delivery to give credit to the acceptor is deemed an indorser. Had- dock, Blanchard & Co. v. Haddock, 192 N. Y. 499, 85 N. E. 682, afg. 118 App. Div. 412, 103 N. Y. Supp. 584. This changes the New York rule that such a party is presumably a second indorser and not liable to the payee, though this presumption was rebuttable by parol evidence. Id. ; Gibbs V. Guaraglia, 75 N. J. Law, 168, 67 Atl. 81. A person who, being a stranger to a promissory note, places his name on the back by blank indorsement, is an indorser of the paper and cannot be held in any other capacity. Rockfield v. First Nat. Bank, 11 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842. 67 Kohn V. Consolidated Butter & Egg Co., 63 N. Y. Supp. 265. 58 Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26, 85 N. E. 829, afg. 51 Misc. 103, 100 N. Y. Supp. 740, and 118 App. Div. 907, 103 N. Y. Supp. 1141. 59 Leonard v. Draper, 187 Mass. 536, 73 N. E. 644. 60 Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499, 85 N. E. 682, afg. 118 App. Div. 412, 103 N. Y. Supp. 584; Mercantile Bank v. Busby (Tenn.) 113 S, W. 390. § 159 WARRANTIES. 301 Like other indorsers, the liability of an irregular indorser is contingent upon failure of the maker to pay, accompanied by due demand, notice and protest.^^ Bills in Sets. § 157. Where the holder of a set indorses two or more parts to different persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills. A holder who indorses two or more parts of a set to different persons is liable on each part, and, generally, every indorser sub- sequent to him is liable on the part he has himself indorsed, as if such part were a separate bill.^^ Warranties. § 158. Every person negotiating an instrument by delivery, or by a qualified indorsement, warrants : 1. That the instrument is genuine and in all respects what it purports to be; 2. That he has a good title to it; 3. That all prior parties had capacity to contract; 4. That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless. § 159. But when the negotiation is by delivery only, the war- ranty extends in favor of no holder other than the im- mediate transferee. 61 Guttman v. Abbott, 110 N. Y. Supp. 376; Rockfield v. First Nat. BanK- n Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842. 62 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.' Or.'. Pa., Tcnn., Utah, Va., Wash., W. Va., Wyo. (§ 180); Ariz. (§ 3483); 111' 202 LIABILITIES AND RIGHTS. § lUO § 160. The provisions of subdivision three do not apply to per- sons negotiating public or corporate securities other than bills and notes. Every person negotiating an instrument by delivery or by a qualified indorsement warrants that it is genuine and in all re- spects what it purports to be ;^^ that he has a good title to it;^* that all prior parties had capacity to contract^^ (this does not apply to persons negotiating public or corporate securities other than bills and notes) ; ^^ that he has no knowledge of any fact that would impair the validity of the instrument or render it value- (§ 179); Kan. (§ 187); Md. (§ 199); Mich. (§ 182); Neb. (§ 179); N. Y. (§ 312); Ohio (§ 3177 q); R. I. (§ 188); Wi^s. (§ 1681-37). 63 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 65); Ariz. (§ 3368); 111. (§ 65); Kan. (§ 72); Md. (§ 84); Mich. (§ 67); Neb. (§ 65); N. Y. (§ 115); Ohio (§ 3173 j); R. I. (§ 7Z); Wis. (§ 1677-5). Barton v. Trent, 40 Tenn. (3 Head) 167; Meyer v. Richards, 163 U. S. 385, 41 Law. Ed. 199; Littauer v. Goldman, 72 N. Y. 506, 28 Am. Rep. 171; Thompson v. McCullough, 31 Mo. 224, 77 Am. Dec. 644; Merriam V. Wolcott, 85 Mass. (3 Allen) 258, 80 Am. Dec. 69. Damages for breach of warranty, see Coolidge v. Brigham, 42 Mass. (1 Mete.) 547, 46 Mass. (5 Mete.) 68; Giflfert v. West, 33 Wis. 617. What instruments negotiable by delivery, see ante, §§ 123, 124. What is a quali- fied indorsement, see ante, § 135. Liability of indorser "without recourse," sec ante, §§ 132, 133. 64 Subdivision 2 of same sections of negotiable instruments laws as last above cited. Meriden Nat. Bank v. Gallaudet, 120 N. Y. 298, 24 N. E. 994, revers- ing 55 N. Y. Super. Ct. 233; Murray v. Judah, 6 Cow. (N. Y.) 484; Mer- riam V. Wolcott, 85 Mass. (3 Allen) 258, 80 Am. Dec. 69. 65 Subdivision 3 of same sections of negotiable instruments laws as last above cited. Glidden v. Chamberlin, 167 Mass. 486, 46 N. E. 103, 57 Am. St. Rep. 479; Lobdell v. Baker, 44 Mass. (3 Mete.) 469. 66 Subdivision 4 of same sections of negotiable instruments laws as last above cited. Otis V. Cullum, 92 U. S. 447, 23 Law. Ed. 496 (municipal bonds). § 162 INDORSER'S WARRANTIES. 203 less.^^ "Where the negotiation is by delivery, the warranty extends only to the immediate transferee.^^ § 161. Every indorser w^ho indorses without qualification war- rants to all subsequent holders in due course: 1. The matters and things mentioned in subdivisions one, two and three, of the next preceding section ; 2. That the instrument is at the time of his indorsement valid and subsisting. § 162. And, in addition, he engages that on due presentment it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any sub- sequent indorser who may be compelled to pay it. The warranties herein treated apply to "every indorser who indorses without qualification."^^ The word "every" as here used is a term of inclusion,''*^ and it embraces every party who, by pre- vious provisions, is classed as an indorser, unless his indorsement 67 Same subdivisions and sections of negotiable instruments laws as last above cited. ^ That one negotiating without delivery does not warrant the solvency of the maker, see Milliken v. Chapman, 75 Me. 306, 49 Am. Rep. 615; Burgess v. Chapin, 5 R. I. 225. But see Stewart v. Orvis, 47 How. Pr. (N. Y.) 518. Where the seller of a check knows the drawer to be insolvent, he cannot recover the price to be paid for the check. Browh v. Montgomery, 20 N. Y. 287, 75 Am. Dec. 404. 68 Same subdivision and sections of negotiable instruments laws as last above cited. 69Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La.. Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.. Or., Pa., Tenn., Utah", Va., Wash., W. Va., Wyo. (§ 66); Ariz. (§ 3369); 111. (§ 66); Kan. (§ 73); Md. (§ 85); Mich. (§ 68); Neb. (§ 66), N. Y. (§ 116); Olvr- (? 3173k); R. I. (§ 74); Wis. (§ 1677-6). First Nat. Bank, 77 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842. 204 LIABILITIES AND RIGHTS. § 162 has been qualified by appropriate words.'^^ It will thus be seen that one who indorses a negotiable instrument without qualifica- tion is liable as a general indorser, though it had been indorsed to him restrictively, i. e., for collection or deposit. The rule is very important, especially with reference to checks indorsed for collection, and subsequently indorsed without qualification by the bank or other collecting agent. It is very important, also, because it changes the law, the rule formerly being that the in- dorsement of a collecting bank does not imply a warranty that a prior indorsement is genuine.'^^ Following the law merchant the warranties only exist in favor of "subsequent holders in due course, "'^^ and hence an indorser does not warrant to the drawee the genuineness of the drawer's signature;''^ and following this rule it has been held that one who is both the maker and holder of a note indorsed in blank cannot sue the indorser on the note.''^ An indorser who indorses without qualification warrants to all subsequent holders in due course that the instrument is genuine 7iRockfield V. First Nat. Bank, 11 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842. 72 United States v. American Exch. Nat. Bank, 70 Fed. 232. The rule heretofore was that a collecting bank indorsing generally was not liable to the paying bank in case the check had been raised.- National Park Bank v. Seaboard Bank, 114 N. Y. 28, 28, 20 N. E. 632, "l Am. St. Rep. 612. See, also, La Farge v. Kneeland, 7 Cow. (N. Y.) 456; Mowatt v. McLelan, 1 Wend. (N. Y.) 173; Herrick v. Gallagher, 60 Barb. (N. Y.) 566, holding that, when a collecting bank acted merely as agent, it could not be required to repay, where it had paid the amount collected to its principal without notice. 73Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va,. Wyo. (§ 66); Ariz. (§ 3369); 111. (§ 66); Kan. (§ 73); Md. (§ 85); Mich. (§ 68); Neb. (§ 66); N. Y. (§ 116); Ohio (§ 3173 k); R. I. (§ 74); Wis. (§ 1677-6\ Bruck V. Lambeck, 63 Misc. 117, 118 N. Y. Supp. 494. 74 Farmers' & Merchants' Bank v. Bank of Rutherford, 115 Tenn. 64, 88 S. W. 939, 112 Am. St. Rep. 817. 75Abramowitz v. Abramowitz, 113 N. Y. Supp. 798. If an accommo- dation maker for indorser's benefit, proper remedy is an action for money paid. Id, § 162 INDORSER'S WARRANTIES. 205 and in all respects what it purports to be.'^^ This includes a war- ranty against fraud"" and forgery,'^^ that he has good title to it,^^ that all prior parties had capacity to contract,so that the instru- 76 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn.. Utah, Va., Wash., W. Va., Wyo. (§ 66); Ariz. (§ 3369); III. (§ 66); Kan. (§ 7Z); Md. (§ 85); Mich. (§ 68); Neb. (§ 66); N. Y. (§ 116); Ohio (§ 3173 k); R. I. (§ 74); Wis. (§ 1677-6). State V. Corning State Sav. Bank, 139 Iowa, 338, 115 N. W. 937; Crosby V. Wright, 70 Minn. 251, 73 N. W. 162. The indorser warrants the gen- uineness of the signature of the maker. Brown v. Ames, 59 Minn. 476, 61 N. W. 448; Condon v. Pearce, 43 Md. 83; First Nat. Bank v. North- western Nat. Bank, 40 111. App. 640; Turnbull v. Bowyer, 40 N. Y. 456, 100 Am. Dec. 523. 77 That the maker's signature was obtained by fraud is no defense to an indorser. Where note was part performance of a written contract to which indorser was not a party. Elliott v. Brady, 192 N. Y. 221, 85 N. E. 69, 127 Am. St. Rep. 898, 18 L. R. A. (N. S.) 600. 78Packard v. Windholz, 88 App. Div. 365, 84 N Y. Supp. 666, afd. 180 N. Y. 549, 7Z N. E. 1129. Accommodation indorser liable; former in- dorsement a forgery. Oriental Bank v. Gallo, 112 App. Div. 360, 98 N. Y. Supp. 561. Indorsement proving a forgery remote, subsequent indorsee need not let suit by holder against him go to judgment before paying; paying before judgment is not voluntary so as to release intervening in- dorsers. Id. An indorser of a forged paper is liable to a bona fide holder. Birmingham Nat. Bank v. Bradley, 103 Ala. 109, 15 So. 440; Len- non V. Grauer, 2 App. Div. 513, 38 N. Y. Supp. 22. See. also, National Bank of North America v. Bangs, 106 Mass. 441, 8 Am. Rep. 349; Turn- bull v. Bowyer, 40 N. Y. 456. Liability of indorser without recourse, see ante, §§ 132, 133. 79 Same sections of negotiable instruments laws as last above cited. State V. Corning State Sav. Bank, 139 Iowa, 338, 115 N. W. 937; Fur- gerson v. Staples, 82 Me. 159, 19-Atl. 158, 17 Am. St. Rep. 470. 80 Same sections of negotiable instruments laws as last above cited. Leonard v. Draper, 187 Mass. 536, 7Z N. E. 644. Warranty as to capacity of maker. Dalrymple v. Hillenbrand, 62 N. Y. 5, 20 Am. Rep. 438; Archer v. Shea, 14 Hun (N. Y.) 493; Kilgore v. Bulk-ley, 14 Conn. 362. Warranty as to capacity of prior indorser. Prescott Bank v. Caverly, 73 Mass. (7 Gray) 217; Ogden v. Blydenburgh, 1 Hilt. (N. Y.) 182. Un- der the negotiable instruments laws the indorsement or assignment of a negotiable instrument by a corporation or an infant passes the property therein, notwithstanding that from want of capacity the corporation or 206 LIABILITIES AND RIGHTS. § 162 ment is, at the time of his indorsement, valid and subsisting,^^ and hence cannot defend on ground that note was void because of usury in its inception.s2 rp^^g waranties provided by this section applj'' oeIv to the condition of the instrument when it left the indorser's hand and do not apply to subsequent alterations.^^ In addition to the above such an indorser engages that on due presentment the instrument shall be accepted and paid, or both, as the case may be, according to its tenor, and that if it be dis- honored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it,** though of course his infant may incur no liability thereon as indorsee or otherwise. Neg. Inst. Laws Colo., Conn., D. C, Fla., Ida'ho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., OkL, Ore., Pa., Tenn., Utah, Va., Wash., W. Va,. Wyo. (§ 22); Ariz. (§ 3325); 111. (§ 22); Kan. (§ 29); Md. (§ 41); Mich. (§ 24); Neb. (§ 22); N. Y. (§ 41); Ohio (§ .3171 v); R. L (§ 30); Wis. (§ 1675-22). To same effect see, as to indorsement or transfer by infant, Roach v. Woodall, 91 Tenn. 206, 18 S. W. 407, 30 Am. St. Rep. 883; Semple v. Morrison, 23 Ky. (7 T. B. Mon.) 298; and as to indorsement or transfer by copporation, Brown v. Donnell, 49 Me. 421, 77 Am. Dec. 266; Clark V. Farrington, 11 Wis. 321. 81 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev;,'N. H., N. J., N. M., N. C, N. D., OkL, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 66) ; Ariz. (§ 3369) ; 111. (§ 66) ; Kan. (§ 73) ; Md. (§ 85) ; Mich. (§ 68) ; Neb. (§ 66) ; N. Y. (§ 116) ; Ohio (§ 3173 K) ; R. L (§ 74) ; Wis. (§ 1677-6). Leonard v. Draper, 187 Mass. 536, 73 N. E. 644. Accommodation in- lorser. Packard v. Windholz, 88 App. Div. 365, 84 N. Y. Supp. 666, afd. !80 N. Y. 549, 73 N. E. 1129. 82 Horowitz V. WoWowitz, 59 Misc. 520, 110 N. Y. Supp. 972. 83 First Nat. Bank v. Gridley, 112 App. Div. 398, 98 N. Y. Supp. 445. 8* Same sections of negotiable instruments laws as last above cited. Ankeny v. Henry, 1 Idaho, 229, where the court used this language: "The undertaking of an indorser is conditional; that is, his promise is that he will pay, provided the payment shall first have been properly de- man^d of the maker, and due notice of his neglect or refusal shall have been given." State v. Corning State Sav. Bank, 139 Iowa, 338, 115 N. W. 937. The indorser contracts to pay the note at maturity if duly pre- sented for payment to the maker, and the indorser is thereafter duly no- tified of such presentment. A. B. Farquhar Co. v. Higham, 16 N. D. 106, 112 N. W. 557. See post, chapter XII, Preserrtment for Payment § 1G3 OF CONSECUTIVE INDORSEES. 207 rights in this matter may be waived, either expressly or im- pliedly .^s After default and notice the indorser's liability is still separate, independent and distinct from that of the maker, and hence a payment on account by the latter will not stop the run- ning of limitations as against the indorser.^^ The possession of a promissory note by an indorser, after its protest for nonpayment by the holder, is prima facie evidence tliat he has performed his contract of indorsement and has paid to the holder the amount due upon the note.^^ Consecutive And Joint Indorsees. § 163. As respects one another, indorsers are liable prima facie in the order in which they indorse; but evidence is ad- missible to show that as betv\^een or among themselves the3^ have agreed otherv/ise. Joint payees or joint in- dorsees who in'Jorse are deemed to indorse jointly and severally. As between themselves, indorsers are liable prima facie in the order in which they indorse ;^^ but parol ^^ evidence is admissible to show that as between or among themselves they have agreed 85 Toole V. Crafts, 193 Mass. 110, 78 N. E. 775. See post, chapter XII, § 194. 86 Mason v. Kilcourse, 71 N. J. Law, 472, 59 Atl. 21. 87 Hill V. Buchanan, 71 N. J. Law, 301, 60 Atl. 952. 88 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 68); Ariz. (§ 3371); 111. (§ 68); Kan. (§ 75); Md. (§ 87); Mich. (§ 70); Neb. (§ 68); N. Y. (§ 118); Ohio (§ 3173 m); R. I. (§ 76); Wis. (§ 1677-8). Morgan v. Thompson, 72 N. J. Law, 244, 62 Atl. 410; Coolidge v. Wig- gin, 62 Me. 568. See, also, Williams v. Merchants' Bank, 67 Tex. 606. 89 Maker of a bill payable to himself and indorsed by him is an in- dorser, and as between him and subsequent indorsers parol evidence is authorized to determine their liability. Haddock, Blanchard & Co. v Haddc-ck, 192 N. Y. 499, 85 N. E. 682, afg. 118 App. Div. 412, 103 N. Y. Supp. 584; Wilson v. Hendee, 74 N. J. Law, 640, 66 Atl. 413. 208 LIABILITIES AND RIGHTS. § 163 otherwise.^" This section is not inconsistent with that heretofore considered providing for the liability of an irregular indorser,*^ for as we have seen the two sections should be read together and so construed the latter section refers to the liability of the parties while the paper is with the public as a negotiable instrument ; while the one now being considered defines the rights of the indorsers as between themselves where the negotiable character if the instru- ment is unimportant.^ Under this rule it may be shown that the indorsers had agreed on a joint liability,^^ either as cosureties^* or otherwise, or that each should contril)ute equally.^^ Also, the rights and liabilities of an indorser before delivery as against a maker of the bill are to be determined under the section under consideration.^^ WSame sections of negotiable instruments laws as last above cited. Morgan v. Thompson, 72 N. J. Law, 244, 62 Atl. 410; Coolidge v. Wig- gin, 62 Me. 568. See, also, Cauthen v. Central Georgia Bank, 69 Ga. 733. 91 See ante, § 156. 92 Haddock, Blanchard & Co. v. Haddock, 118 App. Div. 412, 103 N. Y. Supp. 584; Wilson v. Hendee, 74 N. J. Law, 640, 66 Atl. 413. It fol- lows that an irregular indorser of drafts who indorses them in order to give credit to the acceptors under an agreement that he should be liable for goods furnished the acceptors is liable to the maker on his indorse- ment, when the acceptor fails to pay. Haddock, Blanchard & Co. v. Haddock, 118 App. Div. 412, 103 N. Y. Supp. 584. The former section (Neg. Inst. Laws N. Y., § 64) was never intended to create an incontestable liability against irregular indorsers. Haddock, Blanchard & Co. v. Had- dock, 192 N. Y. 499, 85 N. E. 682, afg. 118 App. Div. 412, 10,3 N. Y. Supp. 584. Nor does said section establish a rule as to the liability of an irreg- ular indorser conclusive on the parties to the instrument as between themselves, where the facts show a different intention. Id. See ante, § 156. 93 Phillips V. Preston, 46 U. S. (5 How.) 278, 12 Law. Ed. 396; Williams V. Smith, 48 Me. 135. 94Clapp V. Rice, 79 Mass. (13 Gray) 403, 74 Am. Dec. 639; Farwcll v. Ensign, 66 Mich. 600, 33 N. W. 734; Easterly v. Barber, 66 N. Y. 433; Love V. Wall, 8 N. C. (1 Hawks) 313. 95 Ross V. Espy, 66 Pa. 481, 5 Am. Rep. 394; Kiel v. Choate, 92 Wis. 517, 67 N. W. 431. 96 Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499, 85 N. E. 682. afg. 118 App. Div. 412, 103 N. Y. Supp. 584. §]65 INDORSEMENT BY AGENT. 200 Joint payees or indorsers. Joint payees or indorsees who indorse are deemed to indorse jointly and severally .^^ Heretofore they have been held to a joint liability only.^^ Special Indorsees. § 164. A person indorsing specially an instrument payable to bearer is liable as indorser to only such holders as make title through his indorsement. While a special indorsement of an instrument payable to bearer does not prevent further negotiation by delivery,^ still the person so indorsing is liable as an indorser only to such holders as make title through his indorsement.^"^ Indorsement by Broker or Agent, § 165. Where a broker or other agent negotiates an instrument without indorsement, he incurs all the liabilities of a transferror by delivery or by a qualified indorsement, unless he discloses the name of his principal and the fact that he is acting only as agent. A broker or other agent negotiating an instrument without in- dorsement incurs all the liabilities of a transferror by delivery or 97 Same sections of negotiable instruments laws as last above cited. 98 Lane v. Stacy, 90 Mass. (8 Allen) 41, holding that joint payees are joint and not successive indorsers, and that it makes no diflference whose name appears first. See, also. Woodward v. Severance. 89 Mass. (7 Allen) 340. For successive indorsers held to several liability, see Scott V. Doneghy, 56 Ky. (17 B. Mon.) 321; Racket v. Linares, 16 La. Ann. 204; Chalmers v. McMurdo, 5 Munf. (Va.) 252, 7 Am. Dec. 684; Slack V. Kirk, 67 Pa. 380, 5 Am. Rep. 438. 99 See ante, § 129. 100 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.' Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 40); Ariz. (§ 3343): 111' (§ 40); Kan (§ 47); Md. (§ 57); Mich. (§ 42); Neb. (§ 40); N. Y. (§ 70)- Ohio (§ 31721); R. I. (§ 48); Wis. (§ 1676-10). Opp — Sel — 14 210 LIABILITIES AND RIGHTS. § IGli by a qualified indorsement, unless he discloses the name of liia principal, and the fact that he is acting as agent.^°^ Rights of Holders. § 1C6. The holder of a negotiable instrument is prima facie the ov/ner and may sue thereon in his own name. The holder of a negotiable instrument is prima facie the owner thereof and may sue thereon in his own name, and this though there are subsequent indorsements on the note,^°^ and this rule is especially true of the payee.^^^ So, also, the holder of a negotiable instrument for the purposes of collection may, under this section, sue thereon in his own name, and payment to him in due course discharges the instrument and relieves the makers of it.^°^^ 101 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 69); Ariz. (§ 3372); 111. (§ 69); Kan. (§ 76); Md. (§ 88); Mich. (§ 71); Neb. (§ 69); N. Y. (| 119); O'hio (§ 3173 n); R. I. (§ 11^; Wis. (§ 1677-9). 102 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 51) ; Ariz. (§ 3354) ; 111. (§ 51) ; Kan. (§ 58) ; Md. (§ 70) ; Mich. (§ 53) ; Neb. (§ 51) ; N. Y. (§ 90) ; Ohio (§ 3172w) ; R. L (§ 59) ; Wis. (§ 1676-21). The legal title to a note which is indorsed to a bank for collection and after protest is returned to such indorser is in the latter, who has the right to cancel his indorsement to the bank and his failure to ex- ercise this right is immaterial, as his possession of the note is sufficient evidence of ownership of the note. New Haven Mfg. Co. v. New Haven Pulp & Board Co., 76 Conn. 126, 55 Atl. 604. 103 Boyd v. Beebe, 64 W. Va. 216, 61 S. E. 304. In an action on the iTote, production by the payee is suflTicient; need be no evidence he is holder. Williams v. Holt, 170 Mass. 351, 49 N. E. 654. In declaring on note in an action for debt it suffices, as to title, to aver that the de- fendant by it promised to pay the plaintiff the amount named in the note, no indorsement thereof being disclosed. Duty v. Sprinkle, 64 W. Va. 39, 60 S. E. 882. 103a Craig v. Palo Alto Stock Farm (Idaho) 102 Pac. 393. §167 HOLDERS IN DUE COURSE. 211 Bona Fide Holders. § 167. A holder in due course is a holder who has taken the in- strument under the following conditions: 1. That it is complete and regular upon its face; 2. That he became the holder of it before it was overdue, and without notice that it had been previously dis- honored, if such was the fact; Where an indorsement bears date after the maturity of the instrument, every negotiation is deemed prima facie to have been effected before the in- strument v;as overdue; Where an instrument payable on demand is nego- tiated an vnreasonable length of time after its issue, the holder is not deemed a holder in dv.e course; For the purpose of determining whether the trans- feree of an instrument payable to order and in- dorsed after transfer is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made; 3. That he took it in good faith; 4. That he took it for value; Where value has at any time been given for the in- strument, the holder is deemed a holder for value in respect to all parties who became such prior to that time; Every indorsement is deemed prima facie to have been based on a valuable consideration; Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value; Where the holder has a lien on the instrument, aris- ing either from contract or by implication of law, he is deemed a holder for value to the extent of his lien; 212 LIABILITIES AND RIGHTS. §167 5. That at the time it was neg-otiated to him he had no notice of any infirmity in the instrunient or de- fect in the title of the person negotiating it ; Where the transferee received notice of any infirm- ity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the ex- tent of the amount theretofore paid by him; The title of a person who negotiates an instrument is defective v/ithin the meaning of this act when he obtained the instrument, or any signature there- to, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud; To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom ii is negotiated must have had actual knowledge of the infirmity or de- fect, or knowledge of such facts that his action in taking the instrument amounted to bad faith; 6. That he took it in the usual or due course of business. Paper must be complete and regular on face. In considering the essential differences between negotiable and non-negotiable paper, we saw that it was one of the chief charac- teristics of a negotiable instrument that it is transferable to a holder who takes free from all prior equities affecting the paper.^°* In order that a holder may escape such equities, and become what 10* This is also expressly provided by the negotiable instruments laws. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 57); Ariz. (§ 3360); 111. (§ 57); Kan. (§ 64); Md. (§ 76); Mich. (§ 59); Neb. (§ 57); N. Y. (§ 96): Ohio (§ 3173 b); R. I. (§ 65); Wis. (§ 1676-27). § 167 BONA FIDE HOLDERS. 213 is termed a "bona fide" holder, or a "holder in due course," it is essential, first, that the paper he takes be complete and regular on its face.^°^ Thus, where corporate notes were signed by all the necessary corporate officers but the president, one taking them as collateral had actual notice of the iufiimity, and was not a bona fide liolder-^*^ The same rule applies to the purchaser of a check, payable to order, who obtains title without the indorse- ment of the payee. Such a purchaser takes "subject to all equities and defenses existing between the original parties, even though he has paid full consideration, without notice of the ex- istence of such equities and defenses. " ^°'^ If an instrument discloses usury,^*^ or any other substantive irregularity,^"^ the 105 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 52); Ariz. (§ 3355); 111. (§ 52); Kan. (§ 59); Md. (§ 71); Mich. (§ 54); Neb. (§ 52); N. Y. (§ 91); Ohio (§ 3172 x); R. L (§ 60); Wis. (§ 1676-22). Singer Mfg. Co. v. Summers, 143 N. C. 102, 55 S. E. 522. Is not bona fide holder where at time of receiving them they were blank as to amount, date and maturity. Hunter v. Allen, 127 App. Div. 572, 111 N. Y. Supp. 820. Request to delay presentment does not render trans- feree not bona fide holder. Matlock v. Scheuerman (Or.) 93 Pac. 823. Authority to fill blanks, see ante, §§ 19, 20. 106 Davis Sewing Mach. Co. v. Best, 105 N. Y. 59, 11 N. E. 146. 107 Goshen Nat. Bank v. Bingham, 118 N. Y. 349, 23 N. E. 180, 16 Am. St. Rep. 765, 7 L. R. A. 595 One who takes title to a prormissory note, payable to the order of a person therein named, merely by the transfer of the indebtedness con- tained in the assignment of the mortgage securing such note, is not entitled to the benefits of the law merchant as to such note, but holds it subject to the equities that would affect it in the hands of his as- signor. Galusha v. Sherman, 105 Wis. 263, 81 N. W. 495, 47 L. R. A. 417. lOSMetcalf v. Watkins, 1 Port. (Ala.) 57; Hamill v. Mason, 51 111. 488. But see Parker v. Plymell, 23 Kan. 402. i09Cronly v. Hall, 67 N. C. 9, 12 Am. Rep. 597; Stein v. Rheinstrom, 47 Minn. 476, 50 N. W. 827. But see Bank of Pittsburgh v. Neal, 63 U. S. (22 How.) 96, 16 Law. Ed. 248. Note made payable before recited date of note, see Miller v. Crayton, 3 Thomp. & C. 360. Instruments on their face non-negotiable, see Muse v. Dautzler, 85 Ala. 359, 5 So. 178; Robertson v. Cooper, 1 Ind. App. 78, 27 N. E. 104; First Nat. Bank v. Bynum, 84 N. C. 24, Zl Am. Rep. 604. See, also, Loomis v. Ruck, 56 N. Y. 462. 214 LIABILITIES AND RIGHTS §167 holder has actual notice of the infirmity, and is not a bona fide holder. Must take before maturity without notice of ajiy previous dis- honor. The holder, to be a holder in due course, must also become holder before the paper was overdue, and without notice that it had been previously dishonored, if such was the case.^^'^ There is some conflict as to whether, under this section, the payee is a holder in due course. It has been held that the words "holder in due course" should be construed as applicable only to one who takes the instrument by negotiation from another who is a holder,iii that is, one to whom, after completion and delivery, the instrument has been negotiated.i^^ This changes what has heretofore been regarded as settled law,^^^ an(j h^g^ apparently, iioSubdivision 2 of same sections of negotiable instruments laws as last above cited. Singer Mfg. Co. v. Summers, 143 N. C. 102, 55 S. E. 522; Hodge V. Wallace, 129 Wis. 84, 108 N. W. 212, 116 Am. St. Rep. 938. Indorsee after maturity takes subject to defenses. King v. Mecklenburg, 43 Colo. 316, 95 Pac. 951. See First Nat. Bank v. Scott County Com'rs, 14 Minn. 11, 100 Am. Dec. 194; Kernohan v. Durham, 48 Ohio St. 1, 26 N. E. 982, 12 L. R. A. 41. See, also, Hocking Valley Bank v. Barton, 72 Pa. 110. Overdue interest does not destroy bona fide character of purchase made before maturity of the principal. Kelly v. Whitney, 45 Wis. 110, 30 Am. Rep. 697. Indorsement after maturity of paper transferred before maturity, see Haskell v. Mitchell, 53 Me. 468, 89 Am. Dec. 711; Lan- caster Nat. Bank v. Taylor, 100 Mass. 18, 97 Am. Dec. 70. An indorsee of several notes, some past due, and others not, is a holder in due course of those not due. Boss v. Hewitt, 15 Wis. 285. But see Knott v. Tidyman, 86 Wis. 164, 56 N. W. 632. iiiVander Ploeg v. Van Zuuk, 135 Iowa, 350, 112 N. W. 807, 124 Am. St. Rep. 275. ii2Vander Ploeg v. Van Zuuk, 135 Iowa, 350, 112 N. W. 807, 124 Am. St. Rep. 275. Where defendants signed a note in blank and delivered it to a third party who filled in the blanks, making it payable to plain- tiff, and delivered it to him, plaintiff was not a holder in due course. Id. But see Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. 112 Chariton Plow Co. v. Davidson, 16 Neb. 374, 20 N. W. 256; John- ston Harvester Co. v. MacLean, 57 Wis. 258, 15 N. W. 177, 46 Am. Rep. 39. § 167 BONA FIDE HOLDERS. 215 not been followed in all states.^^* The rule as stated is in accord with the English view of the similar section in the English Bill of Exchange Act.^^^ Commercial paper is not overdue, within the meaning of this rule, if transferred on the day of maturity/^^ or, where grace is allowed, on the last day of grace.^^^ Every negotiation is deemed prima facie to have been effected before the instrument was overdue, unless the indorsement bears date after the maturity of the instrument.^^^ Where an instrument payable on demand is negotiated an un- reasonable length of time after its issue, the paper is overdue, and the holder is not a holder in due course.^^^ What is a reasonable time depends on the circumstances of the case.^-'^ A negotiation 114 Where payee took check of third person from debtor in payment of latter's debt. Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. 115 Bill of Exchange Act, § 20. Herdman v. Wheeler, 1 K. B. [1902] 361. See, also, Lewis v. Clay, 67 L. J. Q. B. 224. iieWallach v. Bader, 7 N. Y. St. Rep. 375. 117 Johnson v. Glover, 121 111. 238, 12 N. E. 257; Continental Nat. Bank V. Townsend, 87 N. Y. 8; Crosby v. Grant, 36 N. H. 273. But see Pine V. Smith, n Mass. (11 Gray) 38. 118 N eg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Ok)., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 45); Ariz. (§ 3348); 111. (§ 45); Kan. (§ 52); Md. (§ 64); Mich. (§ 47); Neb. (§ 45); N. Y. (§ 75); Ohio (§ 3172 q); R. I. (§ 53); Wis. (§ 1676-15). 119 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Ok)., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 53); Ariz. (§ 3356); 111. (§ 53); Kan. (§ 60); Md. (§ 72); Mich. (§ 55); Neb. (§ 53); N. Y. (§ 92); Ohio (§ 3172 x); R. L (§ 61); Wis. (§ 1676-23). Poorman v. Mills, 39 Cal. 345, 2 Am. Rep. 451; Stockbridge v. Damon, 22 Mass. (5 Pick.) 223. 120 Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 193); Ariz. (§ 3498); 111. (§ 192); Kan. •(§ 4); Md. (§ 16); Mich. (§ 2); Neb. (§ 191); N. Y. (§ 4); Ohio (§ 3178 b); R. I. (§ 4); Wis. (§ 1675). Next day sufficient. Matlock v. Scheuerman (Or.) 93 Pac. 823. Ne- gotiation of foreign drafts within 5 days held within a reasonable time. Singer Mfg. Co. v. Summer, 143 N. C. 102, 55 S. E. 522. 216 LIABILITIES AND RIGHTS. §167 of demand paper within seven days,^^ or twenty-three days,^22 qj. a month/"^3 or even two years ^^* from its issuance, has been held to be within a reasonable time. But on the other hand a negotiation three or four months/^s qj. eight months,^26 qj. ^ year ^^7 after date, has been held not to be within a reasonable time. In order to determine whether the transferee of an instrument payable to order and indorsed after transfer is a holder in due course, the negotiation takes effect of the time when the instru- ment is actually made.^^^ Must take in good faith. To be a holder in due course, one must also take in good faith.'^^s The words "good faith," in this connection, refer only to the 121 Thurston v. McKown, 6 Mass. 428. 122 Mitchell V. Catchings, 23 Fed. 710. 123 Ranger v. Cory, 42 Mass. (1 Mete.) 369. 124 Tomlinson Carriage Co. v. Kinsella, 31 Conn. 268. 125 Paine v. Central Vt. R. Co., 14 Fed. 269. See, also, Herrick v. Woolverton, 41 N. Y. 581, 1 Am. Rep. 461; Stevens v. Brice, 38 Mass. (21 Pick.) 193. i26Ayer v. Hutchins, 4 Mass. 370, 3 Am. Dec. 232; American Bank v Jenness, 43 Mass. (2 Mete.) 288. 127 Hemmenway v. Stone, 7 Mass. 58, 5 Am. Dec. 27. 128 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 49); Ariz. (§ 3353); III. (§ 49); Kan. (§ 56); Md. (§ 68); Mich. (§ 51); Neb. (§ 49); N. Y. (§ 79); Ohio C§ 3172 v); R. I. (§ 57); Wis. (§ 1676-19). 12^ Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn. Utah, Va., Wash., W. Va., Wyo. (§ 52); Ariz. (§ 3355); 111. (§ 52); Kan. (§ 59); Md. (§ 71); Mich. (§ 54); Neb. (§ 52); N. Y. (§ 91); Ohio (§ 3172 x); R. I. (§ 60); Wis. (§ 1676-22). Bank .of Houston v. Day (Mo. App.) 122 S. W. 756; Ward v. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. 50; Singer Mfg. Co. v. Summer, 143 N. C. 102, 55 S. E. 522; Weiss v. Rieser, 62 Misc. 292, 114 N. Y. Supp. 983. Note ob- tained by duress. Siegel v. Oehl, 110 N. Y. Supp. 916; Canajoharie Nat. Bank v. Diefendorf, 123 N. Y. 191, 25 N. E. 402, 10 L. R. A. 676; Noble V. Carey, 64 Hun, 635, 19 N. Y. Supp. 58; Winkelman v. Choteau, 78 111. 107; Merchants' Nat. Bank v. Hanson, 33 Minn. 40, 21 N. W. § 167 BONA FIDE HOLDERS. 217 good faith of the indorsee or transferee."" Bad faith in taking commercial paper does not necessarily involve furtive motives, but it exists where one has knowledge of facts putting him on inquiry/31 and by inquiry he could have discovered the real situation,"^ Neither the purchase of a. note at a discount,"^ nor an indorsement without recourse,"^ is sufficient to put the pur- chaser on inquiry. Bad faith on the part of a purchaser may be shown by evidence of gross negligence,"^ and, when once shown, subjects him to all defenses available between prior parties."^ Must take for vaJue. To be a holder in due course one must be a holder for value.^^ If value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who become 849, S3 Am. Rep. 5. A transfer in consideration of other negotiable paper is for value. Mickles v. Colvin, 4 Barb. (N. Y.) 304. But, contra, see Harrington v. Johnson, 7 Colo. App. 483, 44 Pac. 368; Bird v. Har- ville, 33 Ga. 459 (due bill). isoHaugan v. Sunwall, 60 Minn. 367, 62 N. W. 398; Helmer v. Krolick, 36 Mich. 37. 131 Ward V. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. SO; Royal Bank v. German-American Ins. Co., 58 Misc. 563, 109 N. Y. Supp. 822. Use of check payable to corporation to pay individual debt of officer held to put transferee on inquiry as to whether such use was authorized. Ward v. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. SO. 132 Ward v. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. SO. i33Lassas v. McCarty, 47 Or. 474, 84 Pac. 76. 13* Elgin City Banking Co. v. Hall (Tenn.) 108 S. W. 1068. 135 Drew v. Wheelihan, 75 Minn. 68, 77 N. W. 558. In this case, the question of bona fides was held to be a question for the jury. 136 Johnson v. Way, 27 Ohio St. 374. 137 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 52); Ariz. (§ 3355): 111 (§ 52); Kan. (§ 59); Md. (§ 71); Mich. (§ 54); Neb. (§ 52); N. Y. (§ 91); Ohio (§ 3172 x); R. I. (§ 60); Wis. (§ 1676-22). Siegel V. Oehl, 110 N. Y. Supp. 916; Singer Mfg. Co. v. Summer, 143 N. C. 102, 55 S. E. 522. Where check unsupported by a consideravion was delivered to third party as a loan, it was without consideration and 218 LIABILITIES AND RIGHTS. §167 such prior to that time.^^^ Thus, an indorsee for value before maturity is not affected by a failure of consideration for the in- dorsement to his immediate indorser by the original payee/^^ and, if a party becomes a bona fide holder for value of a bill before its acceptance, it is not essential to his right to enforce it agaiiist a subsequent acceptor that an additional consideration should pro- ceed from him to the drawee.^**^ We have seen that the original consideration for a negotiable instrument is prcsumed,^^^ and that a consideration for an in- dorsement is also presumed,^^^ and it follows, as of course, that a holder is presumed to have given value for the instrument,^*^ and this presumption is not repelled merely by proof that, as between the immediate parties, the paper was without consideration.^^* The rule of the negotiable instrument laws, that an antecedent or pre-existing debt constitutes value, applies as well to the transfer as to the original execution of a negotiable instrument.^*^ Under he not a holder in due course. Rosenthal v. Parsont, 110 N. Y. Supp. 223. Surrendering notes and claims on third persons and paying bal- ance in cash constitutes value. Bank v. Looney, 99 Tenn. 278, 42 S. W. 149, 63 Am. St. Rep. 830, 38 L. R. A. 837. 138 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 26); Ariz. (§ 3329); 111. (§ 26); Kan. (§ 33); Md. (§ 45); Mich. (§ 28); Neb. (§ 26); N. Y. (§ 52); Ohio (§ 3171 x); R. I. (§ 34); Wis. (§ 1675-52). A payee who, on receiving a note, paid the maker's indebtedness to a bank, is a holder for value. Hermann's Ex'r v. Gregory (Ky.) 115 S. W. 809. 139 Bookheim v. Alexander, 64 Hun, 458, 19 N. Y. Supp. 776; i^OHeurtematte v. Morris, 101 N. ■ Y. 63, 54 Am. Rep. 657; National Park Bank v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927. 141 See ante, § 59. Riverside Bank v. Woodhaven Junction Land Co., 34 App. Div. 359, 54 N. Y. Supp. 266. 142 See ante, § 125. 143 Owens v. Snell, 29 Or. 483; Page's Adm'rs v. Bank of Alexandria, 20 U. S. (7 Wheat.) 35, 5 Law. Ed. 209; Joveshof v. Rockney, 58 Misc. 559, 109 N. Y. Supp. 818. 144 See Joveshof v. Rockney, 58 Misc. 559, 109 N. Y. Supp. 818. 145 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 25); Ariz. (§ 3328); 111. § 167 BONA FIDE HOLDERS. 219 this provision the indorsee of a note taken as eollnteral for a pre- existing debt takes free from equities between the original parties,^^^' and a person taking a note before maturity without notice, "^ho credits the amount thereof on an antecedent debt due to him, is a bona fide holder.^*'^ Under the Wisconsin negotiable instruments laAvs, however, "the indorsement or delivery of ne- gotiable paper as collateral security for a pre-existing debt, with- out other consideration, and not in pursuance of an agreement at the time of delivery by the maker, does not constitute value.^''^ One taking negotiable paper in absolute payment of a pre-existing debt is a purchaser for value, though he did not pay the full face value of the instrument.^^^ In amplification of the rule that an antecedent or pre-existing debt constitutes value^'^*' is the rule that a holder having a lien on the instrument, arising either from contract or by implication of law, is a holder for value to the extent of his lien.^^^ While this rule limits the recovery by the (§ 25); Kan. (§ 32); Md. (§ 44); Mich. (§ 27); Neb. (§ 25); N. Y. (§ 51); Ohio (§ 3171 x); R. I. (§ 33); Wis. (§ 1675-51). In re Hopper-Morgan Co., 154 Fed. 249; Singer Mfg. Co. v. Summers, 143 N. C. 102, 55 S. E. 522; Hermann's Ex'r v. Gregory (Ky.) 115 S. W. 809; Murchison Nat. Bank v. Dunn Oil Mills Co., 150 N. C. 718, 64 S. E. 885 ; Rosemond v. Graham, 54 Minn. 324, 40 Am. St. Rep. 336 ; Gates V. National Bank, 100 U. S. 239, 25 Law. Ed. 580; Swift v. Tyson, 41 U. S. il^ Pet.) 1, 10 Law. Ed. 166. See ante, chapter V. Z' 1*6 Brewster v. Shrader, 26 Misc. 480, 57 N. Y. Supp. 606. The court ~7T~ in this case takes occasion to review at some length the history of the — ■ * ' — steps leading up to the adoption of the negotiable instruments laws.. In re Hopper-Morgan Co., 154 Fed. 249; Singer Mfg. Co. v. Summers, 143 N. C. 102, 55 S. E. 522. See, also, Whiteside v. First Nat. Bank (Tenn. Ch.) 47 S. W. 1108; Murphy v. Gumaer, 12 Colo. App. 472, 55 Pac. 951. 147 Rosenwald v. Goldstein, 27 Misc. 827, 57 N. Y. Supp. 224. 148 Negotiable Inst. Law, § 1675-51. 1*9 Heath v. Silverthorn Lead Mining & Smelting Co., 39 Wis. 146. 150 See ante, § 61. 151 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 27); Ariz. (§ 3330); 111. (§ 27); Kan. (§ 34); Md. (§ 46); Mich. (§ 29); Neb. (§ 27); N. Y. (§ 53); Ohio (§ 3171 z); R. L (§ 35); Wis. (§ 1675-53). One is entitled to protection as a bona fide holder for value who has taken the note as collateral security for future advances subsequently 220 LIABILITIES AND RIGHTS. §167 lienl' older himself to the amount of the debt secured/^^ [^ ^q^^ not limit tlic amount recoverable by a subsequent bona fide holder; but the latter, as will be seen later, may recover the face value of the instrument, though he paid less.^^^ Value may also be any consideration which will support a simple contract.15* A transferee taking collateral by way of sul^stitution for other collateral surrendered becomes a holder for value,i55 as does one whose right is based on an exchange of commercial paper.i^e But a holder for value delivering the note to his agent for a specific purpose does not ordinarily constitute a surrender of the lawful possession of the note as a holder for value.i" It follows that a bank to whom is forwarded a draft for collection only does not thereby become a holder for value,!^^ nor does the mere existence of an indebtedness of the payee to the bank constitute it holder for value, the draft being delivered to the payee for collection only.i^a An accommodation party is liable on the instrument to a holder for value, though such holder, at the time of taking the instru- ment, knew him to be only an accommodation party .^^^ This rule actually made. Black v. First Nat. Bank, 96 Md. 399, 54 Atl. 88. See, also, Brooks v. Sullivan, 129 N. C. 190, 39 S. E. 822. i52Messick v. Alderman, 77 Conn. 634, 60 Atl. 109; Hatcher v. Indepen- dence Nat. Bank, 79 Ga. 547, 5 S. E. Ill; Handy v. Sibley, 46 Ohio St. 9, 17 N. E. 329; Winship v. Merchants' Nat. Bank, 42 Ark. 22. The rule applies to accommodation paper. Continental Nat. Bank v. Bell, 125 N. Y. 38, 22 N. E. 1070; Handy v. Sibley, 46 Ohio St. 9. 153 See post, § 172, and cases cited. 154 Matlock V. Scheuerman (Or.) 93 Pac. 823. 155VOSS V. Chamberlain, 139 Iowa, 569, 117 N. W. 269. 156 Matlock V. Scheuerman (Or.) 93 Pac. 823. 157VOSS V. Cham.berlain, 139 Iowa, 569, 117 N. W. 269. 158 Bank of America v. Waydell, 187 N. Y. 115, 79 N. E. 857, afg. 103 App. Div. 25, 92 N. Y. Supp. 666. 159 Bank of America v. Waydell, 187 N. Y. 115, 79 N. E. 857, afg. 103 App. Div. 25, 92 N. Y. Supp. 666. 160 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont.. Nev., N. H., N. J., N. M„ N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 29); Ariz. (§ 3332); 111. (§ 29); Kan. (§ 36); Md. (§ 48); Mich. (§ 31); Neb. (§ 29); N. Y. (§ 55); Ohio (§ 3172 a); R. I. (§ 37); Wis. (§ 1675-55). § 167 BONA FIDE HOLDERS. 221 of the negotiable instruments laws is declaratory of the law mer- chants.^"^ The transfer of negotiable paper to a bank in consideration of credit upon its books, which credit is not absorbed by an antece- dent indebtedness, or exhausted by subsequent withdrawals is not a purchase in the ordinary sense of the term,^^- but the rule is otherwise where the credit to the seller of the note is given by the purchaser, not on its own books, but in a different, solvent bank/"3 or where the bank holds a note of the payee due on the day the instrument is received and pays the same by application of the discount,^^* or where it assumes a legal obligation to another on the faith of the credit,^^^ or allows the account upon which it was credited to become overdrawn, even though on subsequent dates, including the date of maturity of the note, the account had a balance exceeding the amount of the note.^"" So, too, where the Citizens' Nat. Bank v. Lillenthal, 40 App. Div. 609, 57 N. Y. Supp. 567; White V. Savage, 48 Or. 604, 87 Pac. 1040; Bank v. Looney, 99 Tenn. 278, 42 S. W. 149, 63 Am. St. Rep. 830, 38 L. R. A. 837. See ante, chapter V, § 65. 161 Hodges V. Nash, 43 111. App. 638; Tourtelot v. Reed, 62 Minn. 384. 64 N. W. 928; Maitland v. Citizens' Nat. Bank, 40 Md. 540, 17 Am. Rep. 620; Holland Trust Co. v. Waddell, 75 Hun, 104, 26 N. Y. Supp. 980. i62McNight V. Parsons, 136 Iowa, 390, 113 N. W. 858, 125 Am. St. Rep. 265; Albany County Bank v. People's Ice Co., 92 App. Div. 47, 86 N. Y. Supp. nZ; Consolidation Nat. Bank v. Kirkland, 99 App. Div. 121, 91 N. Y. Supp. 353. The law seems to be settled that, when a bank simply discounts a note and credits the amount thereof on the indorser's ac- count without paying to him any value for it, it is not enough to con- stitute such bank a prima facie purchaser for value of the note. Elgir City Banking Co. v. Hall (Tenn.) 108 S. W. 1068, citing Selover, p. 217 Mere creiliting to a depositor's account on the books of a bank, of the amount of a check drawn on another bank, where the depositor's account continues to be sufficient to pay the check in case it is dishonored, does not constitute the bank a holder in due course. Citizens' State Bank v. Cowles, 180 N. Y. 340, 73 N. E. 33, 105 Am. St. Rep. 765, rvg. 89 App. Div. 281, 86 N. Y. Supp. 38. True of a mere "conditional credit." Com- mercial Nat. Bank v. Citizens' State Bank, 132 Iowa, 706, 109 N. W. 198. i63Elgin City Banking Co. v. Hall (Tenn.) 108 S. W. 1068. 164 Wallabout Bank v. Peyton, 123 App. Div. 727, 108 N. Y. Supp. 42. 165 Montrose Sav. Bank v. Claussen, 137 Iowa, Ti, 114 N. W. 547. i66Northfield Nat. Bank v. Arndt, 132 Wis. 383, 112 N. W. 451; DreiU 222 LIABILITIES AND RIGHTS. §1G7 payee of a check on another bank indorses and deposits the same with his bank, receives credit of the amount as cash in his general account, to be checked against, with nothing to qualify the effect of such acts, the bank becomes the owner of the check and not a mere agent to collect the same for the payee.^^^ But where the avails of a discount are applied to an existing indebtedness, the bank must show an agreement that they should be applied in payment and extinguishment thereof.^^^ Must take without notice of infirmities or defects. A holder in due course must have taken without notice, at the time of the negotiation, of any infirmity in the instrument or defect in the title of the person negotiating it.^^^ If, however, the transferee receives notice of any such infirmity or defect be- fore he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the ling V. First Nat. Bank, 43 Kan. 197, 23 Pac. 94, 19 Am. St. Rep. 126, cit- ing Fox V. Bank of Kansas City, 30 Kan. 441, 1 Pac. 789, and Mann v. Nat. Bank, 30 Kan. 412, 1 Pac. 579. 16' Aebi V. Bank of Evansville, 124 Wis. 73, 102 N. W. 329, 109 Am. St. Rep. 925, 68 L. R. A. 964. 168 Consolidation Nat. Bank v. Kirkland, 99 App. Div. 121, 91 N. Y. Supp. 353. 163 N eg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 52); Ariz. (§ 3355); 111. (§ 52); Kan. (§ 59; Md. (§ 71); Mich. (§ 54); Neb. (§ 52); N. Y. (§ 91); Ohio (§ 3172 x); R. I. (§ 60); Wis. (§ 1676-22). First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245; Siegel v. Oehl, 110 N. Y. Supp. 916. Notice acquired after transfer does not affect bona fides. Hoge v. Lansing, 35 N. Y. 136; Richardson v. Monroe, 85 Iowa, 359, 52 N. W. 339, 39 Am. St. Rep. 301. As to notice acquired after transfer, but before consideration is paid, see Thompson v. Sioux Falls Nat. Bank, 150 U. S. 231, 37 Law. Ed. 1063. On rights of bona fide purchaser of stolen paper, see Whiteside v. First Nat. Bank (Tenn. Ch.) 47 S. W. 1108; Kuhns v. Gettysburg Nat. Bank, 68 Pa. 445; Dins- more V. Duncan, 57 N. Y. 573, 13 Am. Rep. 534; Hall v. Wilson, 16 Barb. (N. Y.) 548; Franklin Sav. Inst. v. Heinsman, 1 Mo. App. 336; Wheeler V. Guild, 37 Mass. (20 Pick.) 545, 32 Am. Dec. 231. § 167 BONA FIDE HOLDERS. 223 amount theretofore paid by him.^"° This latter section is merely declaratory of the law merchant.^'^^ When title of person negotiating is defective. The title of the person negotiating is defective, within the meaning of the act, if he obtained the instrument or any signature thereto by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under circumstances amounting to fraud.^~2 The "Wisconsin negotiable instruments law adds that the title of such person is absolutely void when such instrument or signature was so procured from a person who did not know the character of the instrument, and could not have obtained such knowledge by the use of ordinary care.^'^ As stated, the title of a person who 170 Neg. Inst. Laws Colo., Conn., D. C. Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 54); Ariz. (§ 3357); 111. (§ 54); Kan. (§ 61);'Md. (§ 73); Mich. (§ 56); Neb. (§ 54); N. Y. (§ 93); Ohio (§ 3172 z); R. I. (§ 62); Wis. (§ 1676-24). Bank of Morehead v. Hernig, 220 Pa. 224, 69 Atl. 679; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192; Hubbard v. Chapin, 84 Mass. (2 'Mien) 328; Dresser v. Missouri & I. R. Const. Co., 93 U. S. 92, 23 Law. Ed. 815. 171 Albany County Bank v. People's Ice Co., 92 App. Div. 47, 86 N. Y. Supp. 773. 172 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 55); Ariz. (§ 3358); 111. (§ 55); Kan. (§ 62); Md. (§ 74); Mi(A. (§ 57); Neb. (§ 55); N. Y. (§ 94); Ohio (§ 3173); R. I. (§ 63); Wis. (§ 1676-25). Bank of Morehead v. Hernig, 220 Pa. 224, 69 Atl. 679. Fraud. Packard v. Figliuolo, 114 N. Y. Supp. 753; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192; Brook v. Teague, 52 Kan. 119, 34 Pac. 347; Heist V. Hart, 73 Pa. 286. Usury. Keene v. Behan, 40 Wash. 505, 82 Pac. 884. 173 Negotiable Inst. Law, § 1676-25. Signature obtained by misrepre- sentation as to the nature of the instrument, without negligence on the part of the signer, does not create a valid obligation, even in the hands of a bona fide holder. Auten v. Gruner, 90 111. 300, 33 Am. Rep. 54; Green v. Wilkie, 98 Iowa, 74, 66 N. W. 1046, 60 Am. St. Rep. 184; Kala- mazoo Nat. Bank v. Clark, 52 Mo. App. 593; Griffiths v. Kellogg, 39 Wis. 290, 20 Am. Rep. 48; Willnrd v. Nelson, 35 Neb. 651, 53 N. W. 572, 224 LIABILITIES AND RIGHTS. §167 negotiates commercial paper is defective when he has obtained any signature thereto by fraud,^'''* and if the party so defrauded be relieved from liability thereon, then such fraud makes a paper voidable by all the other persons who signed it, though they did not participate in and were ignorant of such fraudulent conduct at the time they signed it.^^^ This conclusion is based on the ground that when several persons assume such an obligation, it is material and important that all who join as makers should share equally in bearing the burden of its payment, and if, through the fraud of the person holding it, such equality of bur- den is disturbed and increased as to some of the persons signing it, such fraud renders the title defective as to all of the persons who signed it,^^^ and it would seem that the express terms of the act would compel the result here reached. This being the ascer- tained meaning of the section proper, we proceed to consider and determine the meaning of the following and concluding clause in the Wisconsin act. In terms it expresses the rule of law recog- nized in those decisions, which, prior to its enactment, held that when a signature to a negotiable instrument is obtained by falsely and fraudulently misrepresenting its character, and the person signing it could not have obtained knowledge of the falsity and fraud, by the use of ordinary care, the title to the instrument is absolutely void as to such signer.^'^'^ The words of the statute, "the title of such person is absolutely void when such instrumenl. or signature was so procured from a person," through misrep- resenting its character and from one who was not guilty of a want of ordinary care, must be read in connection with the pre- ceding clause, declaring a person's title defective "when he ob- tains the instrument or any signature thereto" in the prohibited 37 Am. St. Rep. 455. Aliter, if signer was negligent. Boynton v. Mc- Daniel, 97 Ga. 400, 23 S. E. 824; Ward v. Johnson, 51 Minn. 480, 53 N. W. 766, 38 Am. St. Rep. 515; Chapman v. Rose, 56 N. Y. 137, 15 Am. Rep. 401. 174 See ante, note 172. 175 Hodge V. Smith, 130 Wis. 326, 110 N. W. 192. 176 Hodge V. Smith, 130 Wis. 326, 110 N. W. 192; Aukland v. Arnold, 131 Wis. 64, 111 N. W. 212. i77Aukland v. Arnold, 131 Wis. 64, 111 N. W. 212. § 167 BONA FIDE HOLDERS. 225 manner."^ These phases, in their connection, embody the idea that, if the instrument or any signature thereto is obtained in one of the prohibited ways covered by the first and second clauses, then the title to the instrument is, respectively, defective or abso- lutely void.1'9 Failure or vp-ant of consideration does not consti- tute a defective title.^^" What constitutes notice of defects. To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it was negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith.^^^ A mere sus- picion of infirmity will not constitute notice.^^^ That the maker i78Aukland v. Arnold, 131 Wis. 64, 111 N. W. 212. i79Hodge V. Smith, 130 Wis. 326, 110 N. W. 192; Aukland v. Arnold, 131 Wis. 64, 111 N. W. 212. Where note was signed by several makers, and th«e signature of one is obtained by fraudulent representations as to the character of the instrument, and he could not have obtained knowl- edge of its character by the use of ordinary care, the note was void as to all the makers. Aukland v. Arnold, 131 Wis. 64, 111 N. W. 212. 180 Holder need not first show himself a holder in due course, the bur- den of showing want of consideration and notice thereof by the in- dorsee being upon the maker. Cole Banking Co. v. Sinclair, 34 Utah, 459, 98 Pac. 411. 181 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 56); Ariz. (§ 3359); 111. (§ 56); Kan. (§ 63); Md. (§ 75); Mich. (§ 58); Neb. (§ 56); N. Y. (§ 95); Ohio (§ 3173 a); R. I. (§ 64); Wis. (§ 1676-26). Arnd v. Aylesworth (Iowa) 123 N. W. 1000. Statute does not relax former Nebraska rule. Benton v. Sikyta (Neb.) 122 N. W. 61. See Canajoharie Nat. Bank v. Diefendorf, 123 N. Y. 191, 25 N. E. 402, 10 L. R. A. 676; American Exch. Nat. Bank v. New York Belting & Packing Co., 148 N. Y. 698, 43 N. E. 168. 182 Valley Say. Bank v. Mercer, 97 Md. 458; Kelly v. Whitney, 45 Wis. 110, 30 Am. Rep. 697; Jennings v. Todd, 118 Mo. 296, 24 S. W. 148, 40 Am. St. Rep. 373; Second Nat. Bank v. Morgan, 165 Pa. St. 199, 30 Atl. 957, 44 Am. St. Rep. 652. Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 111 Am. St. Rep. 717, 2 L. R. A. (N. S.) 299; Wedge Mines Co. v. Denver Nat. Opp. — Sel. — 15 226 LIABILITIES AND RIGHTS. §167 of a note indorsed in blank by the payee is the bearer and dis- counts it does not render the bank a holder in bad faith, it having no actual knowledge.^^^ Bad faith, i. c., fraud, not merely sus- picious circumstances, must be brought home to a holder for value whose rights accrued before maturity in order to defeat his recovery on a negotiable note upon the ground of fraud in its inception or between the parties to it.^^* Gross negligence is evidence from which bad faith may be inferred, but it does not of itself constitute bad faith in the law.^^^ If the facts shown have any fair tendency to show bad faith, the question is one of fact.^^^ Bank, 19 Colo. App. 182, IZ Pac. 873 ; Kavanagh v. Bank of America, 239 111. 404, 88 N. E. 171 ; Jefferson Bank of St. Louis v. Chapman-White-Lyons Co. (Tenn.) 123 S. W. 641. It must be remembered that a holder in good faith and for value is not chargeable with mere inferences which might be drawn from the nature of the transaction. Johnson v. Buffalo Center State Bank, 134 Iowa, 731, 112 N. W. 165. That certificate of deposit bore 8 per cent, interest and that bank transferred it, instead of presenting it for payment, held insufficient to impute notice of defect to holder. Id. That the evi- dence only tends to show that the purchaser was put on inquiry is in- sufficient. Elgin City Banking Co. v. Hall (Tenn.) 108 S. W. 1068. But the fact that the maker of a note procures its discount for his own ben- efit is notice that the indorsement was merely for his accommodation. National Park Bank v. German Am. Mut. W. & S. Co., 116 N. Y. 281, 22 N. E. 567, 5 L. R. A. 673; Mechanics' Bank v. Barnes, 86 Mich. 632, 49 N. W. 475; National Park Bank v. Remsen, 43 Fed. 226. The fact that the payee of a note, made by a corporation, is a director of such cor- poration, is not notice to a transferee of any infirmity of the note, nor is it sufficient to put him on inquiry concerning the circumstances under which the note was issued. The rule applicable to notes made by offi- cers of a corporation to their own order and used to pay their individual obligations has no application to notes made by duly authorized officers payable to a director. Orr v. South Amboy Terra Cotta Co., 113 App. Div. 103, 98 N. Y. Supp. 1026. Indorsee of check not put on inquiry by nego- tiation before its date. Albert v. Hoffman, 64 Misc. 87, 117 N. Y. Supp. 1043. 183 Massachusetts Nat. Bank v. Snow, 187 Mass. 159, 72 N. E. 959. 184 Rice v. Barrington, 75 N. J. Law, 806, 70 Atl. 169. issKipp V. Smith, 137 Wis. 234, 118 N. W. 848. 186 McNight v. Parsons, 136 Iowa, 390, 113 N. W. 858; Matlock v. Scheu- erman (Or.) 9Z Pac. 823. § 167 BONA FIDE HOLDERS. 227 Notice to an a.G:ent is ordinarily considered notice to his princi- pal,^^^ and notice to a partner is notice to the firm.^^ Must take in due course of business. The uniform practice of merchants in transferring credits, rep- resented by commercial paper, has given rise to certain rules governing the method of transferring such paper, which method has come to constitute the ordinary or usual course of business, a departure from which is equivalent to a notice of equities, and subjects the negotiable instrument to defenses in the hands of a holder who has acquired a right thereto in any other manner,^^' It follows that in addition to the above essentials of a taking in due course, it is usually stated that to be a bona fide holder one must take in the usual or due course of business.^^^ Commercial 187 Merrill v. Packer, 80 Iowa, 542, 45 N. W. 1076; Knott v. Tidyman, 86 Wis. 164, 56 N. W. 632. Contra, see First Nat. Bank v. Babbidge, 160 Mass. 563, 36 N. E. 462 (notice to president of bank). See, also, Union Square Bank v. Hellerson, 90 Hun, 262, 35 N. Y. Supp. 871 (no- tice to attorney). Knowledge of the president of a bank is not notice to the bank unless he receives it in his official capacity. Merchants' Nat. Bank v. Clark, 139 N. Y. 314, 34 N. E. 910, 36 Am. St. Rep.. 710. Notice to cashier of bank notice to bank. Hunter v. Allen, 127 App. Div. 572, 111 N. Y. Supp. 820. issCalvert v. Dimon, 19 Colo. 17, 34 Pac. 170; Cunningham v. Wood- bridge, 76 Ga. 302; King v. Nichols, 138 Mass. 18. is^Transferee of note payable to order and transferred without in- dorsement takes subject to all equities existing in favor of maker. First Nat. Bank v. McCullough, 50 Or. 508, 93 Pac. 366, 126 Am. St. Rep. 758, 17 L. R. A. (N. S.) 1105. "If one purchases an accommodation note for cash and sells it to a bona fide purchaser in exchange for the purchaser's own note, the pur- chaser may be found to be a holder in due course." Mehlinger v. Har- riman, 185 Mass. 245, 70 N. E. 51. General surety for payee and guar- antor of a note redeeming the note from a transferee in pursuance to his general suretyship held not a purchaser in usual course of business. Rockefeller v, Ringle, 47 Kan. 515, 94 Pac. 810, 15 L. R. A. (N. S.) 111. iQ^'The Wisconsin negotiable instruments law expressly adds this requi- site (§ 1676-22, subd. 5). Siegel v. Oehl, 110 N. Y. Supp. 916. As to what constitutes a taking in due course of business, see Roberts V. Hall, 37 Conn. 205, 9 Am. Rep. 308; Stephens v. Olson, 62 Minn. 295, 64 N. W. 898, following Fredin v. Richards, 61 Minn. 490, 63 N. W 228 LIABILITIES AND RIGHTS. §163 paper may be said to be received in the usual course of business when there is an indorsement and delivery for value under such circumstances that a business man of ordinary intelligence and capacity would give his goods and credit for it when offered for the purpose for which the instrument was transferred.^^^ The negotiable instruments laws, however, consider one a bona fide purchaser when his purchase has the elements set out in the preceding four sections, as such elements, taken together, con- stitute a taking in due course of business. Presumptions and Burden of Proof. § 168. Every holder is deemed prima facie to be a holder in due course ; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course. Exception. — But the last mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title. Every holder is presumed to be a holder in due course.^^^ When it is shown, however, that the title of any person who has nego- 1031; Railway Equip. & Pub. Co. v. Lincoln Nat. Bank, 82 Hun, 8, 31 N. Y. Supp. 44; Canajoharie Nat. Bank. v. Diefendorf, 123 N. Y. 191, 25 N. E. 402, 10 L. R. A. 676; Burnham v. Merchants' Exch. Bank, 92 Wis. 277, 66 N. W. 510. 191 Matlock V. Scheuerman (Or.) 93 Pac. 823. 192 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 59); Ariz. (§ 3362); 111. (§ 59); Kan. (§ 66); Md. (§ 78); Mdch.(§ 61); Neb. (§ 59); N. Y. (§ 98); Ohio (§ 3173 d); R. I. (§ 67); Wis. (§ 1676-29). Benedict v. Kress, 97 App. Div. 65, 89 N. Y. Supp. 607; Wedge Mines Co. V. Denver Nat. Bank, 19 Colo. App. 182, 1Z Pac. 873; Evans v. Free- man, 142 N. C. 61, 54 S. E. 847; Cox v. Cline, 139 Iowa, 128, 117 N. W. § 168 BONA FIDE HOLDERS. 229 tiated the instrument was defective, the burden is on the holder to prove that he, or some one under whom he claims, acquired the title as a holder in due course.^^^ The purpose of the law in ex- acting inquiry under such circumstances is to see whether the apparent situation is the actual situation, or, in other words, to 48; Kerr v. Anderson, 16 N. D. 36, 111 N. W. 614; McCornick v. Swem (Utah) 102 Pac. 626; Champion Empire Min. Co. v. Bird, 7 Colo. App. 523, 44 Pac. 764; Farmers' Bank v. Brooke, 40 Md. 249; Hall v. First Nat. Bank, 133 111. 234, 24 N. E. 546; Estabrook v. Boyle, 83 Mass. (1 Allen) 412; Lang- ley V. Wadsworth, 99 N. Y. 61, 1 N. E. 106; Tredwcll v. Blount, 86 N. C. 33; Wayland University v. Boornian, 56 Wis. 657, 14 N. W. 819; Joy v. Diefen- dorf, 130 N. Y. 6, 28 N. E. 602, 27 Am. St. Rep. 484, holding that where the maker establishes fraud, plaintiff must prove that he is a bona fide holder. Presumption in favor of bona fide holder, that instrument was delivered, see ante, § 29. 193 Same sections of negotiable instruments laws as last above cited. Cook V. American Tubing & Webbing Co., 28 R. I. 41, 65 Atl. 641, 9 L. R. A. (N. S.) 193; Parsons v. Utica Cement Mfg. Co., 80 Conn. 58, 66 Atl. 1024; Bank of Morehead v. Hernig, 220 Pa. 224, 69 Atl. 679; Mitchell v. Baldwin, 88 App. Div. 265, 84 N. Y. Supp. 1043; German-American Bank v. Cunningham, 97 App. Div. 244, 89 N. Y. Supp. 836; Consoli- dation Nat. Bank v. Kirkland, 99 App. Div. 121, 91 N. Y. Supp. 353;Pack- ard v. Figlinolo, 114 N. Y. Supp. 753; J. Regester's Sons Co. v. Reed, 185 Mass. 226, 70 N. E. 53; Demelman v. Brazier, 198 Mass. 458, 84 N. E. 856; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192; Kerr v. Anderson, 16 N. D. 36, 111 N. W. 614; McNight v. Parsons, 136 Iowa, 390, 113 N. W. 858, 125 Am. St. Rep. 265; City Deposit Bank v. Green, 138 Iowa, 156, 115 N. W. 893; Cox v. Cline, 139 Iowa, 128, 117 N. W. 48; City Nat. Bank v. Jordan, 139 Iowa, 499, 117 N. W. 758; American Nat. Bank v. Fountain, 148 N. C. 590, 62 S. E. 738; Elgin City Banking Co. v. Hall (Tenn.) 108 S. W. 1068; Singer Mfg. Co. v. Summer, 143 N. C. 102, 55 S. E. 522; Chambers v. Falkner, 65 Ala. 448; Schulthers v. Sellers, 223 Pa. 513, 72 Atl. 887; Beck v. Mailer, 131 App. Div. 243, 115 N. Y. Supp. 596; Iowa Nat. Bank v. Carter (Iowa) 123 N. W. 237; Arnd v. Aylesworth (Iowa) 123 N. W. lOOO; Shirk v. Mitchell, 137 Ind. 185, 36 N. E. 850. The last case cited boJds that where the defense pleaded is a failure of consideration, or any other matter arising after the execution of the note, the transaction out of which the note arose being fair and lawful, the defendant has the onus of the issue to establish that the holder of the note took it with notice of the defense. Illegality of consideration being shown the burden is on the holder to show his bona fide character. Matlock v. Scheuerman (Or.) 93 Pac. 823. Usury. Keene v. Behan, 40 Wash. 505, 82 Pac. 884. Instruction that burden is on the holder to show "that some person under whom he claims acquired 230 LIABILITIES AND RIGHTS. § 168 learn whether facts exist to rebut the presumption.^^* The object is not to discover negative facts, or such as would not arouse sus- picion, but positive facts which would allay the suspicion already- aroused.^^^ The law, however, goes further than this in order to promote the transfer of commercial paper, for it is settled that if no inquiry is in fact made to dispel the presumption, but reason- able inquiry would have led to the discovery of facts which would have dispelled it, the purchaser of the paper is entitled to the benefit thereof the same as if he had learned them by proper in- vestigation.^^^ This benefit, however, carries with it the burden of responsibility for such unfavorable facts as reasonable inquiry would have discovered in relation to the defect that made inquiry necessary.i^^ The rule stated does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.^^^ The corresponding provision of the Eng- title in good faith" is (.rroneous. Hawkins v. Young, 137 Iowa, 281, 114 N. W. 1041. Proof that a full consideration was paid for the paper prima facia establishes that it was taken in due course. Hodge v. Smith, 130 Wis., 326, 110 N. W. 192. But where the evidence merely discloses a placing of the consideration to the credit of the seller on the books of the purchaser, the burden is on the latter to show that the debt was in fact paid. Id. Statute is declaratory of common law. Parsons v. Utica Cement Co. (Conn.) 73 Atl. 785. Fraud in procurement of note. Irelan-d v. Scharpenberg (Wash.) 103 Pac. 801. i9*Wajrd V. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. 50. This involves something more than the mere pre- sumption arising from an indorsement regular in form. O'Connor v. Klei- man (Iowa) 121 N. W. 1088. i95Wajrd V. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. 50. i^eWard v. City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. 50. 19' Ward v;-'City Trust Co., 192 N. Y. 61, 84 N. E. 585, rvg. 117 App. Div. 130, 102 N. Y. Supp. 50. i98Same sections of negotiable instruments laws as last above cited. Voss v. Chamberlain, 139 Iowa, 569, 117 N. W. 269. The result of this is that the defendant cannot overcome the presumption that the holder is one in due course by showing such a subsequent defect ; but the burden still remains §168 BONA FIDE HOLDERS. 231 lish Bills of Ehxchange Act of 1882 ^^^ is: "Every holder of a bill is prima facie deemed to be a holder in due course ; but if, in an action on a bill, it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill." This provision has been construed to mean that, when fraud is proved, the burden is on the holder to prove both a valuable consideration and a taking in good faith without notice of the fraud.200 In a suit by a subsequent holder, the proper method of pro- cedure is for the plaintiff to produce the note, prove the indorse- ments and the making of the note, and rest, thereby establishing a prima facie case and for the time being his own title and right to recover, and the defendant's liability .^"^^ The defendant should then be permitted to prove his defense ; ^^ and it is then necessary for the plaintiff to prove that he is a bona fide holder of the note for value before maturity .^^^ on him to show that the holder is not a holder in due course. Id. Fraud where note was negotiated in violation of agreement under which it was given. German American Bank v. Cunningham, 97 App. Div. 244, 89 N. Y. Supp. 836. 199 45 & 46 Vict. c. 61, § 30, subd. 2. 200Tatam v. Haslar, 23 Q. B. Div. 345. 20iSiegel v. Oehl, 110 N. Y. Supp. 916. While, as stated, every holder is deemed prima facie a holder in due course, still the uniform practice in suits by the indorsee against the maker is to aver that the plaintiff took the note before maturity and is a bona fide holder for value. Failing so to do, an answer averring that the note was taken after notice of the payee's defective title, and that little or no consideration passed, is suf- ficient to put the plaintiflf on proof of the bona fides of the transaction. Bank of Moorehead v. Hernig, 220 Pa. 224, 69 Atl. 679. 202Duress. Siegel v. Oehl, 110 N. Y. Supp. 916. 203Siegel V. Oehl, 110 N. Y. Supp. 916. 232 LIABILITIES AND RIGHTS. § 169 Defenses Available Against Holder in Due Course. § 169. A holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses available to prior parties among themselves. The rule that a holder in due course takes free from all equities existing between prior parties has already been considered, gen- erally, in treating of the essential differences between negotiable and non-negotiable paper, and is of such uniform application that it hardly requires the citation of any authorities to sustain it.^"* This rule is essentially one of public policy .^^^ While, except as is expressly provided in the act, an innocent holder may enforce payment for the full amount free from defenses available be-" tween the original parties,^^^ still it is advisable at this point to ex- amine more particularly into the scope of the term "equities," and to discover what legal defenses may be interposed against a holder in due course. It is clear that defects appearing on the face of the paper at the time of its transfer to the holder are not "equities" which he can escape ■,'^^'^ nor are matters which, though not apparent on the face of the paper, render the contract void ab initio, such as ille- gality of consideration in cases where, by statute, the illegality 204McFarland v. State Bank of Chase, 7 Kan. App. 722, 52 Pac. 110; Knight V. Tinney, 59 Neb. 274, 80 N. W. 912; Pettee v. Prout, 69 Mass. (3 Gray) 502, 63 Am. Dec. 778; Bostwick v. Dodge, 1 Doug. 413, 41 Am. Dec. 584; Chase Nat. Bank v. Faurot, 149 N. Y. 532, 44 N. E. 164, 35 L. R. A. 605; Genesee County Sav. Bank v. Kindt, 7 Wyo. 321, 51 Pac. 878; Little v. Dunlap, 44 N. C. (Busb. Law) 40. 205Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 111 Am. St. Rep. 717, 2 L. R. A. (N. S.) 299. 206May enforce payment of lightning rod note though it did not con- tain statement of such fact, as required by Laws 1903, p. 723, c. 438. Arnd V. Sjoblom, 131 Wis. 642, 111 N. W. 666. Insurance premium note given for Jess than full sum. Gray v. Boyle (Wash.) 104 Pac. 828. 207 See ante, § 167. § 169 BONA FIDE HOLDERS. 233 renders the contract void,-°^ incapacity of prior parties,^"^ and want of authority in the officers of a public corporation to execute negotiable instruments.^^" Ordinarily, however, matters not ap- parent on the face of the paper, such as unindorsed payments,^!! set-offs and counterclaims,^!^ mistake,-!^ fraud, ^* duress, ^^^ 208Aurora v. West, 22 Ind. 88, 85 Am. Dec. 413; Bayley v. Taber, S Mass. 286, 4 Am. Dec. 57; Glen v. Farmers' Bank, 70 N. C. 191; Union Nat. Bank v. Brown, 101 Ky. 354, 19 Ky. Law Rep. 540, 41 S. W. 273; International Bank v. Vankirk, 39 III. App. 23; Snoddy v. American Nat. Bank, 88 Tenn. 573, 13 S. W. 127, 17 Am. St. Rep. 918, 7 L. R. A. 705; Swinney v. Edwards, 8 Wyo. 54, 55 Pac. 306, 80 Am. St. Rep. 916. Stallion note. Quiggle v. Herman, 131 Wis. 379, 111 N. W. 479. Statute declaring gambling notes void unenforcible in hands of bona fide hold- ers. Alexander & Co. v. Hazelrigg 123 Ky., 677, 29 Ky. Law Rep. 1212, 97 S. W. 353. Rule is otherwise where illegality results from common law. Note based on gambling consideration good in hands of bona fide holder. Wirt V. Stubblefield, 17 App. D. C. 283. 209Anglo- California Bank v. Ames, 27 Fed. 727; Voreis v. Nussbaum, 131 Ind. 267, 31 N. E. 70, 16 L. R. A. 45; Johnson v. Sutherland, 39 Mich. 579; Baker v. Gregory, 28 Ala. 544, 65 Am. Dec. 366; Miller v. Finley, 26 Mich. 249, 12 Am. Rep. 306. Title passes under indorsement or assignment by corporation or in- fant notwithstanding want of capacity. See supra, note 80. 2iOEastman v. District Tp. of Lyon, 40 Iowa, 438; Halstead v. New York, 5 Barb. (N. Y.) 218; School Directors v. Fogleman, 76 111. 190. 211 Bank of University v. Tuck, 96 Ga. 456; Biggerstaff v. Marston, 161 Mass. 101, 36 N. E. 785; Harpending v. Gray, It Hun, 351, 27 N. Y. Supp. 762. See, also, Swope v. Ross, 40 Pa. 186, 80 Am. Dec. 567. 2i^Way V. Lamb, 15 Iowa, 79; United States Nat. Bank v. McNair, 116 N. C. 550, 21 S. E. 389; Carothers v. Richards, 17 Ky. Law Rep. 42, 30 S. W. 211; McGrath v. Pitkin, 26 Misc. 862, 56 N. Y. Supp. 398; Rob- inson V. Lyman, 10 Conn. 30, 25 Am. Dec. 52. 2i3Steadwell v. Morris, 61 Ga. 91; Huston v. Young, 33 Me. 85. 214 Alabama Nat. Bank v. Halsey, 109 Ala. 196, 19 So. 522 ; Holeman v. Hob- son, 27 Tenn. (8 Humph.) 127; Cristy v. Campau, 107 Mich. 172, 65 N. W. 12 (false representations) ; Grant v. Walsh, 145 N. Y. 302, 40 N. E. 209, 45 Am. St. Rep. 626; Ormsbee v. Howe, 54 Vt. 182, 41 Am. Rep. 841; Holcomb v. Wyckoff, 35- N. J. Law, 35, 10 Am. Rep. 219. So held where payee in- duced issuance of draft by impersonating another person of the same name. Jamieson & McFarland v. Herin, 43 Wash. 153, 86 Pac. 165. 2i5Morrill v. Nightingale, 93 Cal. 452, 28 Pac. 1068, 27 Am. St. Rep. 207; Clark v. Pease, 41 N. H. 414; Farmers' Bank of Grand Rapids v. Butler, 234 LIABILITIES AND RIGHTS. § 169 usury,2i8 and want of failure of consideration,2i7 are "equities" which cannot avail against a header in due course. The fact that there were defects or omissions in the execution of a negotiable instrument, which are not apparent on its face, is not available against a holder in due course. Thus, a collateral agreement in- tended to be incorporated, but not incorporated, in the instru- ment, is not a defense f'^^ nor can a mistake in date be shown against a holder in due course,^!^ though such a mistake may be 48 Mich. 192; 12 N. W. 36, distinguishing Gibbs v. Linabury, 22 Mich. 479, 7 Am. Rep. 675. But see First Nat. Bank v. Bryan, 62 Iowa, 42, 17 N. W. 165, where it was held that an innocent indorsee of a note se- cured by mortgage on a homestead could not enforce the mortgage as against the wife whose signature had been obtained by duress. 2i6Klar V. Kostink, 65 Misc. 199, 119 N. Y. Supp. 683. Promissory notes void for usury as between the original parties are nevertheless valid and en- forcible when discounted by a state bank for value before maturity in the due course of business, without notice of their usurious inception. Schles- inger v. Gilhooley, 189 N. Y. 1, 81 N. E. 619, afg. 116 App. Div. 914, 101 N. Y. Supp. 1143. 2i7Buzzell V. Tobin, 201 Mass. 1, 86 N. E. 923; Middletown Bank v. Jerome, 18 Conn. 443; First Nat. Bank v. Ruhl, 122 Ind. 279, 23 N. E. 766; Arthurs v. Hart, 58 U. S. (17 How.) 6, 15 Law. Ed. 338; Rand v. Panta- graph Co., 1 Colo. App. 270, 28 Pac. 661; Culver v. Hide & Leather Bank, 78 111. 625; Williams v. Cheney, 69 Mass. (3 Grey) 215; First Nat. Bank v. Skeen, 101 Mo. 683, 14 S. W. 732; Brookheim v. Alexander, 64 Hun, 458, 19 N. Y. Supp. 776; Hardie v. Wright, 83 Tex. 345, 18 S. W. 615; Rea v. McDonald, 68 Minn. 187, 71 N. W. 11; Kieth v. Fork, 105 Ga. 511, 31 S. E. 169; Merchants' & Planters' Bank v. Penland, 101 Tenn. 445, 47 S. W. 673; Davis v. Howell Cotton Co., 101 Ga. 128, 28 S. E. 612. Liability of accommodation party to holder for value, see ante, § 66. 2i8Hodges v. Nash, 141 111. 391, 31 N. E. 151; Yellow Medicine County Bank v. Tagley, 57 Minn. 391, 59 N. W. 486; Donovan v. Fox, 121 Mo. 236, 25 S. W. 915; Lewis v. Long, 102 N. C. 206, 9 S. E. 637, 11 Am. St. Rep. 725; Davy v. Kelley, 66 Wis. 452, 29 N. W. 232; Miller v. Ottaway, 81 Mich. 196, 45 N. W. 665, 21 Am. St. Rep. 513, 8 L. R. A. 428. 2i9Huston V. Young, 33 Me. 85. § 171 BONA FIDE HOLDERS. 235 shown in his favor.^^o Forgery and alteration as a defense against a holder in due course will be considered in a later chapter.^^i Same. § 170. If an incomplete instrument is completed in disregard of the authority given and after the lapse of a reason- able time is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in ac- cordance with the authority given and within a reason- able time. Exception. — Where an incomplete instrument has not been delivered it will not, if completed and nego- tiated, without authority, be a valid contract in the hands of any holder, as against any person whose sig- nature was placed therean before delivery. § 171. But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. If an instrument be signed and delivered in blank, with intent that it shall be converted into a negotiable instrument, and, after the blanks are filled and the instrument completed, it is nego- tiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it according to its terms, though it was not filled up within a reasonable time, or in accordance with the authority given.222 The reason for the rule 220Germania Bank v. Distler, 4 Hun (N. Y.) 633, afd. 64 N. Y. 642; Almich V. Downey, 45 Minn. 460, 48 N. W. 197; Jessup v. Dennison, 2 Disn. (Ohio) 150. 221 Chapter XV. 222Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D,. Okl., Ore., Pa.. Tenn., Utah, Va.. Wash., W. Va., Wyo. (§ 14); Ariz. ( §3317); 111. 236 LIABILITIES AND RIGHTS. § 171 is sometimes placed on the theory that the person to whom the instrument is delivered becomes the agent of the person signing, and a purchaser is not bound by limitations on the authority of the agent, not brought home to him; 223 and sometimes on the theory of estoppel.^^* As the statute applies only to a holder in due course to whom the instrument has been negotiated, it is deemed applicable only to one who takes the instrument by ne- gotiation from another who is a holder; 225 and hence a payee (§ 14); Kan. (§ 21); Md. (§ 33); Mich. (§ 16); Neb. (§ 14); N. Y. (§ 33); Ohio (§ 3171n); R. I. (§ 22); Wis. (§ 1675-14). Thus, where the place for the sum payable was left blank, but "$200" was written on the margin, a bona fide holder could fill the blank with any sum within that amount. Norwich Bank v. Hyde, 13 Conn. 279. Also, one who, with another, and for accommodation, signs a note having "$45" expressed in one corner, but having a blank for th€ amount in the body of the instrument, and authorizes the other maker to write "forty-five dollars" in the blank space, is liable to a bona fide holder for $450, in case the other maker fills out the blank with the words "four hundred and fifty," and adds a cipher to the "$45." Johnson Harvester Co. V. McLean, 57 Wis. 258, 15 N. W. 177, 46 Am. Rep. 39; Weidman v. Symes, 120 Mich. 657, 79 N. W. 894, 11 Am. St. Rep. 603. See, also, Snyder v. Van Doren, 46 Wis. 602, 1 N. W. 285, 32 Am. Rep. 739, and cases cited. The maker of a note blank as to the date, time of maturity, amount and name of the payee who entrusts it to another with verbal in- structions to buy personal property and fill in the name of the seller as payee and the amount of the purchase as the amount of the note, is liable to a bona fide holder where the person to whom the note was en- trusted violated his instructions, and used the note to procure a personal loan. Geddes v. Blackmore, 132 Ind. 551, 32 N. E. 567. An acceptor who delivers a blank acceptance to another with authority, to fill the blank is liable to a bona fide holder for the amount filled in, though it is greater than the amount authorized. Van Duser v. Howe, 21 N. Y. 531. 223Snyder v. Van Doren, 46 Wis. 602, 1 N. W. 285, 32 Am. Rep. 739; Androscoggin Bank v. Kimball, 64 Mass. (10 Cush.) 373; Bank v. Neal, 63 U. S. (22 How.) 107, 16 Law. Ed. 248; Goodman v. Simonds, 61 U. S. (20 How.) 361, 15 Law. Ed. 458. See, also, Orrick v. Carlston, 7 Grat. (Va.) 189. 224Redlich V. Doll, 54 N. Y. 234, 13 Am. Rep. 573. 225Herdman v. Wheeler, 1 K. B. [1902] 361; Vander Ploeg v. Van Zuuk, 135 Iowa, 350, 112 N. W. 807, 124 Am. St. Rep. 275. The decision of the court in this case is based upon a consideration of the definitions and applications of the terms "holder" and "holder in due course" as § 171 BONA FIDE HOLDERS. 237 to whom paper is delivered after an unauthorized completion is not within its protection,226 This changes what has been regarded as well settled law, namely, that one who intrusts an incomplete instrument to another to be completed by him is bound by an excessive or erroneous exercise of such authority as to any one who relies in good faith on the genuineness of such instrument.^^^ The wisdom of this change has been questioned upon the ground that it appears dangerous to cast any doubt upon a payee's right to recover when he has taken a bill or note complete and regular upon its face, honestly and for value.^^s If there was no delivery with intent that the instrument be thereafter negotiated, and no authority, expressed or implied, to fill up the blanks, a bona fide holder cannot enforce the instrument against the signer.^^^ This rule of the law merchant is also the rule of the negotiable in- struments laws.22° used in the negotiable instruments act, the conclusion of the court being that the latter term seems unquestionably to be used to indicate a person to whom after completion and delivery the instrument has been negotiated. A similar result has been reached by the English courts (Herdman v. Wheeler, 1 K. B. [1902] 361, where it was held that the word "issue" as defined in the act comprehends the excluded persons and that had the enacting body intended a different construction it would have made the section read "if such instrument after completion is issued or nego1:iated to a holder in due course." 226Vander Ploeg v. Van Zuuk, 135 Iowa, 350, 112 N. W. 807, 124 Am. St. Rep. 275. See, also, Guerrant v. Guerrant, 7 Va. Law Reg. 637. Com- pare Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646, 97 Am. St. Rep. 426. 227This rule has been held applicable in favor of the payee as well as a transferee of the instrument. Chariton Plow Co. v. Davidson, 16 Neb. 374, 20 N. W. 256; Johnson Harvester Co. v. McLean, 57 Wis. 258, 15 N. W. 177, 46 Am. Rep. 39; Fullerton v. Sturges, 4 Ohio St. 530; Davis v. Lee, 26 Miss. 505, 59 Am. Dec. 267. 228Herdman v. Wheeler, 1 K. B. [1902] 361. 229Ledwich v.. McKim, 53 N. Y. 307. But See Nance v. Lary, 5 Ala. 370. 230Neg. Inst. Laws Colo., Conn., D. C, FJa., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 15); Ariz. (§ 3318); 111. (§ 15); Kan. (§ 22); Md. (§ 34); Mich. (§ 17); Neb. (§ 15); N. Y. (§ 34); Ohio (§ 3171n); R. L (§ 23); Wis. (§ 1675-15). 238 LIABILITIES AND RIGHTS. § 172 Contrary to the former law of some states,^^! the negotiable in- struments act provides that where an instrument is in the hands of a holder in due course of business, a valid delivery by all prior parties is conclusively presumed. It will be observed that this presumption in favor of a bona fide holder is conclusive, and that want of delivery is no defense as against such a holder,^^^ but, as has been previously shown, this presumption does not obtain, as against one signing before delivery, as to an instrument which, having been incomplete and undelivered, was wrongfully and without authority completed, delivered and negotiated.^^^ § 172. A holder in due course may enforce payment of the in- strument for the full amount thereof as against all parties liable thereon. A holder in due course not only holds the instrument free from all prior equities and defenses, as shown in the preceding sections, but he may also enforce payment of the instrument for the full amount thereof against all parties liable thereon.^^* This rule allowing a recovery of the face value is, in effect, an amplification 23iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H. N. J., N. M., N. C, N. D., Okla., Ore., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 16); Ariz. (§ 3319); 111. (§ 16); Kan. (§ 23); Md. (§ 35); Mich. (§ 18); Neb. (§ 16); N. Y. (§ 35); Ohio (§ 3171 o); R. L (§ 24); Wis. (§ 1675-16). 232Clarke v. Johnson, 54 111. 296; McCormick v. Holmes, 41 Kan. 265, 21 Pac. 108; Kinyon v. Wohlford, 17 Minn. 239. Contra, see Palmer v. Poor, 121 Ind. 135, 22 N. E. 984, 6 L. R. A. 469; Cline v. Guthrie, 42 Ind. 227, 13 Am. Rep. 357; Buzzell v. Tobin, 201 Mass. 1, 86 N. E. 923. The conclusive presumption of delivery in favor of a bona fide holder exists as well when the note is taken frcm^ a thief as in any other case. Massachusetts Nat. Bank v. Snow, 187 Mass. 159, 72 N. E. 959. 233 See supra, this section. Massachusetts Nat. Bank v. Snow, 187 Mass. 159, 72 N. E. 959. 234Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N.C., N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 57); Ariz. (§ 3360); 111. (§ 57); Kan. (§ 64); Md. (§ 76); Mich. (§ 59); Neb., (§ 57); N. Y. (§ 96); Ohio (§ 3173B); R. L (§ 65); Wis. (§ 1676-27). Not limited to amount paid for note with interest. Jefferson Bank of St. Louis V. Chapman-White-Lyons Co. (Tenn.) 123 S. W. 641. § 172 BONA FIDE HOLDEliS. 239 of the rule that mere inadequacy of consideration does not sliow mala fides.^ss As between remote parties to a bill of exchange, as the payee or indorsee and the acceptor, in order to sustain the defense of no consideration, two considerations must at least come in question: First, that which the defendant received for his liability; and, secondly, that which the plaintiff gave for his title.2^*' An action between remote parties will not fail unless there be an absence or failure of both of Ihese considerations.^^^ The rules do not, however, cure void, usurious,^^ or gaming,239 transactions, or affect the doctrine that one who makes a loan on commercial paper, or takes it as security for a precedent debt, The Wisconsin negotiable instruments law adds (§ 1676-27): "Ex- cept as provided in sections 1944 and 1945 of these statutes (Rev. St. 1878), relating to insurance premiums, and also in cases where the title of the person negotiating such instrument is void under the pro- visions of section 1676-25 of this act." Section 1945 provides that notes or obligations given for premiums on fire insurance shall become void if the company becomes insolvent or bankrupt during the life of the policy, as far as the premium was unearned at the time of insolvency or bankruptcy. Section 1944 is considered in section 32, ante. Lassas v. McCarthy, 47 Or. 474, 84 Pac. 76. 235Scott V. Seelye, 27 La. Ann. 95; Forepaugh v. Baker (Pa.) 13 Atl. 465; Daniels v. Wilson, 21 Minn. 530. 236National Park Bank v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927. 237 National Park Bank v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927. Failure of consideration no defense against bona fide holder. Bank of Guntersville v. Joi>es Cotton Co. (Ala.) 46 So. 971. The breach of an executory agreement which forms the consideration for a note is no defense in whole or in part against an indorsee who took the note be- fore maturity, even if he had notice of the contract, unless he was in- formed of the breach before its purchase. Black v. First Nat. Bank, 96 Md. 399, 54 Atl. 88. 238Hart V. Adler, 109 Ala. 467, 19 So. 894; Claflin v. Boorum, 122 N. Y. 385, 25 N. E. 360; Ward v. Sugg, 113 N. C. 489, 18 S. E. 717, 24 L.R.A. 280. But see Lynchburg Nat. Bank v. Scott, 91 Va. 652, 22 S. E. 487, 50 Am. St. Rep. 860, 29 L. R. A. 827. 239Conklin v. Roberts, 36 Conn. 461; Harper v. Young, 112 Pa. 419, 3 Atl. 670; Traders' Bank v. ALsop, 64 Iowa, 97, 19 N. W. 863; Swinney v. Ed- wards, 8 Wyo. 54, 55 Pac. 306, 80 Am. St. Rep. 916. 240 LIABILITIES AND RIGHTS. §173 can recover only the amount loaned or secured.^*" It is doubtful, too, whether it will cure transactions in which the consideration is so grossly inadequate as to indicate fraud.^^i The rule affirms the doctrine of the federal courts,2*2 ^nd that of most of the state courts,2*3 but changes the rule in others.^** Holder Not in Due Course. § 173. In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable. § 174. But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter. Where a negotiable instrument comes into the hands of a holder who is not a holder in due course, it is subject, as against him, to the same defenses as if it were non-negotiable,^*^ and this rule applies also to accommodation paper.^*^ 240 Cromwell v. County of Sac, 96 U. S. 51, 60, 24 Law. Ed. 681; Kelly V. Ferguson, 46 How. Pr. (N. Y.) 411. 24iGould V. Stevens, 43 Vt. 125, 5 Am. Rep. 265; Hunt v. Sanford, 14 Tenn. (6 Yerg.) 387; De Witt v. Perkins, 22 Wis. 451, 99 Am. Dec. 68; Smith V. Jansen, 12 Neb. 125, 10 N. W. 537, 41 Am. Rep. 761. 242 Cromwell v. County of Sac, 96 U. S. 51, 60, 24 Law. Ed. 681. 243Sully V. Goldsmith, 32 Iowa, 397; United States Nat Bank v. McNair, 116 N. C. 550, 21 S. E. 389; Kitchen v. Loudenback, 48 Ohio St. 177, 26 N. E. 979, 29 Am. St. Rep. 540; Hobart v. Penny, 70 Me. 248. 244See Hufif v. Wagner, 63 Barb (N. Y.) 215, 230; Todd v. Shelbourne, 8 Hun (N. Y.) 512; Campbell v. Brown, 100 Tenn. 245, 48 S. W. 970. 245Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N.C., N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 58); Ariz. (§ 3361); 111. (§ 58); Kan. (§ 65); Md. (§ 11); Mich. (§ 60); Neb. (§ 58); N. Y. §(97); Ohio, (§ 3173C); R. I. (§ 66); Wis. (§ 1676-28). Weiss V. Rieser, 62 Misc. 292, 114 N. Y. Supp. 983. 2i6Marling v. Jones, 138 Wis. 82, 119 N. W. 931. § 174 HOLDERS NOT IN DUE COURSE. 241 Holder deriving title from holder in due course. An exception to the rule laid down in the last section is found in the further rule that a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect to all parties prior to the latter.^^^ But a payee who transfers a note to a bona fide holder, and after- wards repurchases it for a new consideration, is not a bona fide holder. In a case deciding this point the court said: "It cannot be very important to him [the innocent transferee from the paj^ee] that there is one person incapable of succeeding to his equities, and who consequently would not be likely to become a purchaser. If he may sell to all the rest of the community, the market value of his security is not likely to be affected by the circumstances that a single individual cannot compete for its pur- chase, especially when we consider that the nature of negotiable securities is such that their market value is very little influenced by competition.^*^ 247Same sections of negotiable instruments laws as last above cited. Miller V. Talcott, 54 N. Y. 114; Cheever v. Pittsburg, S. & L. E. R. Co., 150 N. Y. 59, 44 N. E. 701, 55 Am. St. Rep. 646, 34 L. R. A. 69; Glenn v. Farmers' Bank, 70 N. C. 191 ; O'Conor v. Clarke (Cal.) 44 Pac. 482; Wood v. Starling, 48 Mich. 592, 12 N. W. 866; Matson v. Alley, 141 111. 284; Koehler v. Dodge, 31 Neb. 328, 47 N. W. 913, 28 Am. St. Rep. 518; Jones v. Wiesen, 50 Neb. 243, 69 N. W. 762; Knight v. Tinney, 59 Neb. 274, 80 N. W. 912; McFarland v. State Bank of Chase, 7 Kan. App. 122, 52 Pac. 110; Bank of Sonoma County v. Gove, 63 Cal. 355, 49 Am. Rep. 92. 248Kost V. Bender, 25 Mich. 515. Opp. — Sel. — 16 CHAPTER XII. PRESENTMENT FOR PAYMENT. § 175. When Necessary. § 176. Instrument Payable at a Special Place. § 177. Necessary to Charge Drawers and Indorsers. § 178. By Whom Made. § 179. To Whom Made. § 180. Party Primarily Liable Dead. § 181. Several Persons Primarily Liable. § 182. Time for Presentment. § 183. Instruments Payable at Bank. § 184. Day of Maturity Sunday or Holiday. § 185. Day of Maturity Saturday. § 186. Days of Grace. § 187. Determining Date of Maturity. § 188. Instruments Payable and Not Payable on Demand. § 189. Checks. § 190. Excusable Delay. § 191. Presentment to Acceptor For Honor. § 192. Place For Presentment. § 193. Manner of Presentment. § 194. Dispensing With and Waiver of Presentment. § 195. Waiver of Protest Includes. § 196. Dishonor For Nonpayment. § 197. Rights of Parties on Dishonor. § 198. Referees in Case of Need. The law simply requires substantial compliance in reference to proper presentment for payment, and, where there has been such a compliance, will not strain to find grounds for releasing an indorser on omission to observe more technical rules not preju- dicing the indorser.i iGilpin V. Savage, 60 Misc. 605, 112 N. Y. Supp. 802. 242 § 177 NECESSITY. 243 When Necessary. § 175. Presentment for payment is not necessary in order to charge the person primarily liable on the instrument. § 176. If the instrument is, by its terms, payable at a special place, and the party primarily liable is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender of payment upon his part. § 177. As a general rule, presentment for payment is necessary in order to charge the drawer and indorsers. Exceptions. — Presentment for payment is not re- quired in order to charge the drawer where he has no right to expect or require that the drawee or acceptor will pay the instrument. Presentment for payment is not required in order to charge an indorser where the instrument was made or accepted for his accommodation and he has no reason to expect that the instrument will be paid if presented. Presentment for payment is not necessary to charge the person primarily liable on the instrument,^ that is, the person who by the 2 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N.C., N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 70); Ariz. (§ 3373); 111. (§ 70); Kan. (§ 11); Md. (§ 89); Mich. (§ 72); Neb. (§ 70); N. Y. (§ 130); Ohio (§ 3173 o); R. I. (§ 78); Wis. (§ 1678). Florence O. & R. Co. v. First Nat. Bank, 38 Colo. 119, 88 Pac. 182; Mclntyre v. Michigan State Ins. Co., 52 Mich. 188, 17 N. W. 781; Mosser V. Criswell, ISO Pa. 409, 24 Atl. 618; Wilkins >. McGuire, 2 App. D. C. 448; Wamsley v. Darragh, 14 Misc. 566, 35 N. Y. Supp. 1075; Cox v. National Bank, 100 U. S. 704, 713, 25 Law. Ed. 739. In determining who are primarily liable on an instrument, it must be remembered that no person is liable unless his name appears on the instrument. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 18); Ariz. (§ 3321); 111. (§ 18); Kan. (§ 25); Md. (§ Z1); Mich. (§ 20); Neb. (§ 18); N. Y. (§ 37); 244 PRESENTMENT FOR PAYMENT. §177 terms of the instrument is absolutely required to pay the same ; ^ but if the instrument is by its terms payable at a special place, and he is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender on his part.* Both under the statute, and by the weight of previous authority in this country, contrary to the law of England, where a note or bill of exchange is payable at a particular time and place, no de- mand or presentment at the place named is necessary in order to entitle the holder to maintain an action upon the note or bill against the maker or acceptor.^ The same rule applies to a note Ohio (§ 3171q) ; R. I. (§ 26); Wis. (§ 1676-18). That the drawee is not liable until he accepts. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§127); Ariz. (§ 3430); 111., (§ 126); Kan. (§ 134); Md. (§ 146); Mich. (§ 129); Neb. (§ 126); N. Y. (§ 211); Ohio (§ 3175-R); R. I. (§ 135); Wis. (§ 1680-a). And that a bank is not liable on a check v.ntil it accepts or certifies it. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 189); Ariz. (§ 3487); 111. (§ 188); Kan. (§ 196); Md. (§ 208); Mich. (§ 191); Neb. (§ 188); N. Y. (§ 325); Ohio (§ 3177z); R. I. (§ 197); Wis. (§ 1684-5). The acceptor is primarily liable and hence is not entitled to present- ment for payment. Hunt v. Johnson, 96 Ala. 130, 11 So. 387; James v. Ocoee Bank, 42 Tenn. (2 Cold.) 57; Steiner v. Jeffries, 118 Ala. 573, 24 So. 37. See post, chapter XVI, Payment and Discharge. SNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 192); Ariz.(§ 3488); 111. (§ 191 ; (§ 19); Kan. (§ 3); Md. (§ 15); Mich. (§ 2); Neb. (§ 190); N. Y. (§ 3); Ohio (§ 3178a); R. I. (§ 3); Wis. (§ 1675). *Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 70); Ariz. (§ 3373); 111. (§ 70); Kan. (§ m-, Md. (§ 89); Mich. (§ 72); Neb. (§ 70); N. Y. (§ 130); Ohio (§ 3173o); R. I. (§ 78); Wis. (§ 1678). This provision is not in the negotiable instruments law of Wisconsin. The negotiable instruments law of New York has been amended by inserting after the word "maturity" the clause, "and has funds there available for that purpose." Laws 1898, c. 336, § 11. Florence O. & R. Co. v. First Nat. Bank, 38 Colo. 119, 88 Pac. 182. SFarmers' Nat. Bank v. Venner, 192 Mass. 531, 78 N. E. 540. § 177 NECESSITY. 245 payable on demand at a particular place.^ But not being willing and able to pay it there at maturity, interest after maturity is recoverable though no demand was made.'' Presentment necessary to charge drawer ajid indorsers — Excep- tions. Presentment is necessary, however, to charge the drawer and indorsers,^ except that it is not required, in order to charge a drawer, if he has no right to expect or require that the drawee or acceptor will pay the instrument ; ^ nor is it necessary to charge CFarmers' Nat. Bank v. Venner, 192 Mass. 531, 78 N. E. 540. The court says: "No demand is necessary before suit, where a note is payable generally on demand, and as we have seen no demand is necessary when a note is payable on time at a particular place. It seems to us that the fact that both circumstances are found in the sam^ note cannot operate to change the rule and render a demand necessary when it would not otherwise be required." In an action on a note payable at a specified place, a demand need not be averred or proved, and, if the maker was ready and offered at the time and place to pay it, this 'is a matter of defense to be pleaded and proved by him. Florence O. & R. Co. v. First Nat. Bank, 38 Colo. 119, 88 Pac. 265. 7 Parsons v. Utica Cement Mfg. Co., 80 Conn. 58, 66 Atl. 1024. 8Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 70); Ariz. (§ 3373); 111. (§ 70); Kan. (§ 11); Md. (§ 89); Mich. (§ 72); Neb. (§ 70); N. Y. (§ 130); Ohio (§ 3173o); R. I. (§ 78); Wis. (§ 1678). Presbrey v. Thomas, 1 App. D. C. 171; Howard Bank v. Carson, 50 Md. 18; Seacord v. Miller, 13 N. Y. 55. Presentment is necessary to charge the drawer of a bill. Hoyt v. Seeley, 18 Conn. 353; Jaudon v Read, 32 How Pr. (N. Y.) 190; Grange v. Reigh, 93 Wis. 552, 67 N. W. 1130. It is also necessary to charge the drawer of a check. Daniels v. Kyle, 5 Ga. 245; Green v. Darling, 15 Me. 139; Gough v. Staats, 13 Wend. (N. Y.) 549; Kelly v. Brown, 71 Mass. (5 Gray) 108; Scott v. Meeker, 20 Hun (N. Y.) 161. Presentment of a non-negotiable instrument IS not necessary. White v. Low, 7 Barb. (N. Y.) 204; Smith v. Cromer, 66 Miss. 157, 5' So. 619. 9Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 79); Ariz. (§ 3382); 111. (§ 79); Kan. (§ 86); Md. (§ 98); Mich. (§ 81); Neb. (§ 79); N. Y. 246 PRESENTMENT FOR PAYMENT. § 178 an indorser where the instrument was made or accepted for his accommodation, and he has no reason to expect that the instru- ment will be paid if presented.^" By Whom Made. § 178. Presentment for payment to be sufficient must be made by the holder, or by some person authorized to receive pay- ment on his behalf. Presentment for payment must be made by the holder or by some person authorized to receive payment on his behalf.^^ It is not necessary that presentment be made by a notary ; ^^ but any person who has possession of the instrument at the time and place (§ 139); Ohio (§ 3173x); R. I. (§ 87); Wis. (§ 1678-9). Dickins v. Beal, 35 U. S. (10 Pet.) 572, 9 Law. Ed. 246; Rhett v. Poe, 43 U. S. (2 How.) 457, 11 Law. Ed. 167. Lack of funds in hands of drawee, see Howes v. Austin, 35 111. 396; Beauregard v. Knowlton, 156 Mass. 395, 31 N. E. 389; Franklin v. Vanderpool, 1 N. Y. Super. Ct. 78. Where the drawer obtains an acceptance and indorsement for his accommoda- tion and receives the proceeds of the bill, he is not entitled to present- ment for payment. Barbaroux v. Waters, 3 Mete. (Ky.) 304. lONeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 80); Ariz. (§ 3383); 111. (§ 80); Kan. (§ 87); Md. (§ 99); Mich. (§ 82); Neb. (§80); N. Y. (§ 140); Ohio (§ 3173y); R. I. (§ 88); Wis. (§ 1678-10). Luckenbach v. McDonald, 164 Fed. 296; Reid v. Morrison, 2 Watts & S. (Pa.) 401. iiNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 72); Ariz. (§ 3375); 111. (§ 72); Kan. (§ 79); Md. (§ 91); Mich. (§ 74); Neb. (§ 12); N. Y. (§ 132); Ohio (§ 3173q); R. I. (§ 80); Wis. (§ 1678-2). i2Cole V. Jessup, 10 N. Y. 96; Shed v. Brett, 18 Mass. (1 Pick.) 401; Sussex Bank v. Baldwin, 17 N. J. Law, 487, where the court said: "There is an impression current, in some degree, that a presentment of a note must be made by a notary, or at least on his behalf, and that he must protest it upon nonpayment before the indorser is liable. But this is not so. Any person may present at its maturity a promissory note of which he is put in possession." §181 TO WHOM MADE. 247 of payment is deemed prima facie to have authority and may present the instrument for payment.^^ To Whom Made. § 179. Presentment for payment must be made to the person pri- marily liable on the instrument, or if he is absent or in- accessible, to any person found at the place where the presentment is made. § 180. Where the person primarily liable on the instrument is dead, and no place of payment is specified, presentment for payment must be made to his personal representative, if such there be, and if, with the exercise of reasonable diligence, he can be found. § 181. Where there are several persons, not partners, primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all. Where the persons primarily liable on the instrument are liable as partners, and no place of payment is speci- fied, presentment for payment may be made to any one of them, even though there has been a dissolution of the firm. Presentment for payment must be made to the person primarily liable, or, if he is absent or inaccessible, to any person found at the place of presentment.^* Where the person primarily liable isCole V. Jessup, 10 N. Y. 96; Baer v. Leppert, 12 Hun (N. Y.) 516; Sussex Bank v. Baldwin, 17 N. J. Law, 487. But see Doubleday v. Kress, 50 N. Y. 410. One holding an instrument for collection is deemed a holder within the rule. Freeman's Bank v. Perkins, 18 Me. 292; Blakeslee V. Hewitt, 76 Wis. 341, 44 N. W. 1105. i^Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, V.a., Wash., W. Va., Wyo. (§ 72); Ariz. (§ 3375); 111. (§ 72); Kan. (§ 79); Md. (§ 91); Mich. (§ 74); Neb. (§ 72); N. Y. (§ 132); Ohio (§ 3173q); R. I. (§ 80); Wis. (§ 1678-2). The temporary absence of an indorser from his place of business does not excuse nonpresentment. Wilson v. Senier, 14 Wis. 411. See, 248 PRESENTMENT FOR PAYMENT. §181 is dead, and no place of payment is specified, presentment for payment may be made to his personal representative, if there be one, and he can be found after the exercise of reasonable dili- gence,^^ and presentment at a national bank in the hands of a receiver is sufficient.^^ If the persons primarily liable were part- ners, and no place of payment was specified, presentment for pay- ment may be made to any one of them,^''' even after a dissolution of the firm.^^ Where there are several persons, not partners, primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all.^^ This is the also, Granite Bank v. Ayers, 33 Mass. (16 Pick.) 392. Who is person pri- marily liable, see note 2, supra. iSNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 76); Ariz. (§ 3379); 111. (§ 76); Kan. (§ 83); Md. (§ 95); Mich. (§ 78); Neb. (§ 76); N. Y. (§ 136); Ohio (§ 3173v); R. L (§ 84); Wis. (§ 1678-6). Reed v. Spear, 107 App. Div. 144, 94 N. Y. Supp. 1007; Huff v. Ashcraft, 1 Disn. (Ohio) 277. Presentment on death of one of two partners who are makers, see note 18, infra. 16 Schlesinger v. Schultz, 110 App. Div. 356, 96 N. Y. Supp. 383. i^Mount Pleasant Branch of State Bank v. McLeran, 26 Iowa, 306; Hunter v. Hempstead, 1 Mo. 67. Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 77); Ariz. (§ 3380); 111. (§ 77); Kan. (§ 84); Md. (§ 96); Mich. (§ 79); Neb. (§ 77); N. Y. (§ 137); Ohio (§ 3173v); R. I. (§ 85); Wis. (§ 1678-7). isSame sections of negotiable instruments laws as last above cited. Barry v. Crowley, 4 Gill. (Md.) 194; First Nat. Bank v. Heuschen, 52 Mo. 207. After dissolution by bankruptcy, see Gates v. Beecher, 60 N. Y. 518. After dissolution by death of one partner, see Cayuga County Bank V. Hunt, 2 Hill (N. Y.) 635; Barlow v. Coggan, 1 Wash. T. 257. i9Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl.. Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 78); Ariz. (§ 3381); 111. (§ 78); Kan. (§ 85); Md. (§ 97); Mich. (§ 80); Neb. (§ 78); N. Y. (§ 138); Ohio (§ 3173v); R. I. (§ 86); Wis. (§ 1678-8). § 185 TIME. 249 rule in force in most of the states,^^ and has been applied where one or more of the makers were sureties.-^ Compliance with this latter rule proving impracticable, such presentment may be dis- pensed with under the rule allowing one so to do, where, after the exercise of reasonable diligence, presentment as required by the act cannot be made.^^ Time. § 182, Presentment for payment, to be sufficient, must be made at a reasonable hour on a business day. § 183. Where the instrument is payable at a bank, presentment for payment must be made during banking hours, unless the person to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is suf- ficient. § 184. When the day of maturity falls upon Sunday, or a holiday, the instrument is payable on the next succeeding business day. § 185. Instruments falling due on Saturday are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday. Presentment for payment must be made at a reasonable hour 20Bank of Red Oak v. Orvis, 40 Iowa, 332; Arnold v. Dresser, 90 Mass. (8 Allen) 435; Benedict v. Schmieg, 13 Wash. 476. 2iBritt V. Lawson, 15 Hun (N. Y.) 123. 22Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 82); Ariz. (§ 3385); 111. (§ 82); Kan. (§ 89): Md. (§ 101); Mich. (§ 84); Neb. (§ 82); N. Y. (§ 142); Ohio (§ 3174); R. I. (§ 90); Wis. (§ 1678-12). See post, § 194. 250 PRESENTMENT FOR PAYMENT. § 185 on a business day.^s What is a reasonable hour within this rule depends on cireumstances,^* and is to be determined by reference to the general custom at the place of the particular transaction in question.25 In case of a transaction occurring in a foreign juris- diction, the court cannot take judicial notice of what constitutes a reasonable hour on a business day.^^ It is a matter of proof, though a notarial certificate of the transaction, being regular so as to furnish prima facie proof that the paper was duly presented for payment, raises a presumption that the presentment was made at a proper time.^^ Instruments payable at bank. Where the instrument is payable at a bank, presentment must be made during banking hours, unless the person to make pay- ment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient.^s What constitutes banking hours is to 23Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 72); Ariz. (§ 3375); 111. (§ 72); Kan. (§ 79); Md. (§ 91); Mich. (§ 74); Neb. (§ 72); N. Y. (§ 132); Ohio (§ 3173q); R. I. (§ 80); Wis. (§ 1678-2). Cayuga County Bank v. Hunt, 2 Hill (N. Y.) 635. 21 A presentment at a bank after business hours on the day of maturity, but before the officers had left the bank, was sufficient. Allan v. Avery, 47 Me. 287. A presentment at 9 o'clock P. M., on the last day of grace, at the residence of the maker after he had retired, was sufficient. Farns- worth V. Allen, 70 Mass. (4 Gray) 453. 25Columbian Banking Co. v. Bowen, 134 Wis. 218, 114 N. W. 451. 26 Columbian Banking Co. v. Bowen, 134 Wis. 218, 114 N. W. 451. On the question whether a presentment, at 5:20 o'clock P. M., of a note payable at an office in an insurance building in Chicago, was made within business hours, evidence as to what were the ordinary business hours in that city was admissible. Clough v. Holden, 115 Mo. 336, 21 S. W. 1071. 27Columbian Banking Co. v. Bowen, 134 Wis. 218, 114 N. W. 451. 28 Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 75); Ariz. (§ 3378); 111. § 185 INSTRUMENTS PAYABLE AT BANK. 251 be determined by reference to the general custom at the place of the particular transaction in question,^^ and the court cannot take judicial notice of what constitutes the custom in foreign jurisdictions,^" but such custom is a matter of proof.^^ Present- ment a few minutes after the regular time for closing is sufficient if such is the custom of the bank ; ^^ but a presentment to an offi- cer of the bank out of business hours would not ordinarily be suf- ficient.22 (§ 75); Kan. (§ 82); Md. (§ 94); Mich. (§ 11); Neb. (§ 75); N. Y. (§ 135); Ohio (§ 3173t); R. I. (§ 83); Wis. (§ 1678-5). Matlock V. Scheuerman (Or.) 93 Pac. 823. See Allen v. Avery, 47 Me. 287. Since the maker of a note paj^able at a bank has up to the close of business hours to deposit money to meet it, presentment should be made at the time of closing. Church v. Clark, 38 Mass. (21 Pick.) 310; Harri- son V. Crowder, 14 Miss. (6 Smedes & M.) 464. Where the office hours of a bank ended at 4 o'clock P. M., and the indorser of a note payable there was ready to pay the same on the day of its maturity, and on that day sent the maker to the bank several times to see if the note was there and ascertain its amount, and the maker was informed that the note was not there, but the note was finally presented at the bank on that day by the holder, who obtained admittance at about 5 o'clock P. M., and demanded payment, which was refused because no funds had been furnished to meet the note, the indorser was held liable, the court stating that the circumstances did not take the case out of the general rule, and that "had the maker gone to the bank prepared to pay the note, and waited there for that purpose until the close of business hours, and then left, or had he placed funds in the bank and allowed them to re- main there until the close of business hours, and then withdrawn them in consequence of the nonpresentment of the note, we are of the opinion that a subsequent presentation would not have been sufficient to charge the indorser." Salt Springs Nat. Bank v. Burton, 58 N. Y. 430, citing Bank of Syracuse v. Hollister, 17 N. Y. 46; Shepherd v. Chamberlain, 74 Mass. (8 Gray) 225; Flint v. Rogers, 15 Me. 67; Allen v. Avery, 47 Me. 287. 29Columbian Banking Co. v. Bowen, 218 Wis. 4, 51, 114 N. W. 451. 30Columbian Banking Co. v. Bowen, 218 Wis. 4, 51, 114 N. W. 451. siColumbian Banking Co. v. Bowen, 218 Wis. 4, 51, 114 N. W. 451. 32Bank of Utica v. Smith, 18 Johns. (N. Y.) 230. See, also, Salt Springs Nat. Bank v. Burton, 58 N. Y. 430. 33S\van v. Hodges, 40 Tenn. (3 Head) 251. 252 PRESENTMENT FOR PAYMENT. §185 Day of maturity is Sunday or a holiday. AVhen the day of maturity falls on Sunday or a holiday, the in- strument IS payable on the next succeeding business day.^* This rule is an application of the general rule that where the day, or the last day, for doing any act required or permitted by the nego- tiable instruments laws, falls on Sunday or a holiday, the act may be done on the next succeeding secular or business day.^^ Day of maturity is Saturday. Instruments falling due on Saturday are to be presented for payment on the next succeeding business day, except that instru- ments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday .^^ This provision is not in 3*Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 85); Ariz. (§ 3388); 111. (§ 85); Kan. (§ 92); Md. (§ 104); Mich. (§ 87); Neb. (§ 85); N. Y. (§ 145); Ohio (§ 3174c); R. L (§ 93); Wis. (§ 1678-15). 35Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. V., Wyo. (§ 194); Ariz. (§ 3490); 111. (§ 193); Kan. (§ 5); Md. (§ 17); Mich. (§ 2); Neb. (§ 192); N. Y. (§ 5); Ohio (§ 3178c); R. I. (§ 5); Wis. (§ 1675). 36Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 85); Ariz. (§ 3388); 111. (§ 85); Kan. (§ 92); Md. (§ 104); Mich. (§ 87); Neb. (§ 85); N. Y. (§ 145); Ohio (§ 3174c); R. I. (§ 93); Wis. (§ 1678-15). This provision of the negotiable instruments law has been amended in New York by inserting after the words "instruments falling due" the words "or becoming payable." Laws 1898, c. 336, § 13. Saturday afternoon was made a half holiday in New York by Laws 1887, c. 289, § 1. See Sylvester v. Crohan, 138 N. Y. 494, 34 N. E. 273, where it was held that "a party whose duty it is to collect or present for payment a bill, note or draft which falls due on Saturday, is not chargeable with neglect or omission of duty because of failure to pre- sent it on that day, providing he does present it on Monday, or the next secular day, and then, on that daj^ gives notice of dishonor in case of nonpayment." § 186 DAYS OF GRACE. 253 the negotiable instmments law of "Wisconsin,^^ and in that state instruments falling due on Saturday are payable on that day. In the negotiable instruments law of Colorado is a provision that "instruments falling due on any day, in any place where any part of such day is a holiday, are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for pay- ment during reasonable hours of the part of such day which is not a holiday." ^ § 186. Every negotiable instrument is payable at the time fixed therein without grace. ^ a a j a (j ^ i^i ^ Most of the negotiable instruments laws contain the provision that "every negotiable instrument is payable at the time fixed therein without grace. "^^ But three daj's of grace are allowed on sight drafts by the negotiable instruments law of Rhode Island ; *° and on notes, acceptances, and sight drafts by the law as adopted in North Carolina ; *^ while the negotiable instruments act as first adopted in Massachusetts has already been amended so as to allow three days of grace on sight drafts.*^ Under the Eng- lish Bills of Exchange Acts 1882, providing that a bill is due and payable "on the last day of grace," the holder cannot begin, on the last day of grace, an action against the acceptor, who had re- fused payment on that day, as no cause of action arises until after the expiration of that day.^^ 37See Negotiable Inst. Law, § 1678-15. ssNegotiable Inst. Law, § 85. 39Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 85); Ariz. (§ 3388); 111. (§ 85); Kan. (§ 92); Md. (§ 104); Mich. (§ 87); Neb. (§ 85); N. Y. (§ 145); Ohio (§ 3174c); R. I. (§ 93); Wis. (§ 1678-15). *0Negotiable Inst. Law, § 93. "Negotiable Inst. Law, § 85. 42Act March 6, 1899. *345 & 46 Vict. c. 61, § 14, subd. 1. Kennedy v. Thomas [1894] 2 Q. B. 759. 254 PRESENTMENT FOR PAYMENT. §187 § 187. Where the instrument is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of paj'-ment is determined by excluding the day from which the time is to begin to run, and by including the date of payment. The instrument being payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and including the day of payment.** § 188. Where the instrument is not payable on demand, present- ment must be made on the day it falls due. Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof. § 189. A check must be presented for payment within a reason- able time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay. Instruments not payable on demand. Instruments not joayable on demand must be presented for pay- ment on the day they fall due.^^ Under this provision of the ne- 44Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 86); Ariz. (§ 3389); 111. (§ 86); Kan. (§ 93); Md. (§ 105); Mich. (§ 88); Neb. (§ 86); N. Y. (§ 146); Ohio (§ 3174d); R. I. (§ 94); Wis. (§ 1678-16). See New York Statutory Construction Law, §§ 26, 27. 45Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 71); Ariz. (§ 3374); 111. (§ 71); Kan. (§ 78); Md. (§ 90); Mich. (§ 72,); Neb. (§ 71); N. Y. (§ 131); Ohio (§ 3173p); R. L (§ 79); Wis. (§ 1678-1). Days of grace abolished, see ante, § 136. For time of maturity in general, see ante, § 135. § 189 DEMAND PAPER. 255 gotiable instruments laws it has been held that if notes in a series are payable at different times, and default in payment of the first is to mature the others immediately, the holders of others than the first have a reasonable time within which to present them after the dishonor of the first note.^^ Instruments payable on demand. The negotiable instruments laws have changed the rule, in sev- eral states,^''' as to the time for presentment of an instrument pay- able on demand, by providing that presentment of such instru- ment for payment must be made within a reasonable time after their issuance, except that, in case of a bill of exchange, pre- sentment for payment within a reasonable time after the last ne- gotiation is sufficient.*^ A note payable "on demand after date" <8Creteau v. Foote, 40 App. Div. 215, 57 N. Y. Supp. 1103. ^^Massachusetts, where demand notes have hitherto been overdue at the end of 60 days from date (St. 1839, c. 121, § 2. See Rice v. Wesson, 52 Mass. [11 Mete] 400); Connecticut, where they could be presented within four months (Gen. St. p. 405; Rhodes v. Seymour, 36 Conn. 1); and New York, where they were treated as good security for indefinite time (Merritt v. Todd, 23 N. Y. 28; Parker v. Stoud, 98 N. Y. 379, rvg. 31 Hun. [N. Y.] 578). In Vermont demand notes muust be presented within 60 days. Rev. Laws, § 2013. Verder's Ex'r v. Verder, 63 Vt. 38, 21 Atl. 611. *8Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 71); Ariz. (§ 3374); 111. (§71); Kan. (§78); Md. (§90); Mich. (^73); Neb. (§71); N. Y. (§ 131); Ohio (§ 3173p); R. I. (§ 79); Wis. (§ 1678-1). To hold indorser, presentment for payment must be made within a reasonable time. Aebi v. Bank of Evansville, 124 Wis. 73, 102 N. W. 329. As regards indorsers, presentment for payment is sufficient if made within a reasonable time after the last negotiation. Columbian Banking Co. v. Bowen, 134 Wis. 218, 114 N. W. 451; Plover Sav. Bank v. Moodie, 135 Iowa, 685, 110 N. W. 29. A failure to demand pay- ment of a demand note for two and one-half years, or to notify the in- dorsers, releases them. Home Sav. Bank v. Hosie, 119 Mich. 116, 77 N. W. 625. Effect of negotiation as extending time, see Rice v. Wesson, 52 Mass. (11 Mete.) 400; Union Bank v. Ezell, 29 Tenn. (10 Humph.) 385; Corwith V. Morrison, 1 Pin. (Wis.) 489. 256 PRESENTMENT FOR PAYMENT. §189 is a demand note and not one payable on a fixed day, hence need only be presented for payment within a reasonable time.*^ In considering what is a "reasonable time," regard is to be had to the usage of the trade, the nature of the instrument, and the facts of the particular case.^° The facts being disputed and the evi- dence conflicting, the question is a mixed one of law and fact to be decided by the jury under instructions from the court, but where the facts are not in dispute the question is one of law.^^ The burden being on the holder to prove due and timely pre- sentment, the fact that it was not so presented need not be spe- cially pleaded by the indorser.^^ The statutory requirement that a note payable on demand must be presented for payment within a reasonable time is in the nature of a statute of limitations,^^ and hence the burden is on one claiming it was not so presented to plead and prove such fact, and if he fails to do so he will be deemed to have waived the de- fense.^* Checks. A check, being a bill payable on demand,^^ is governed by the above rule, and must be presented for payment within a reason- able time after its issuance, or the drawer will be discharged from liability ■ thereon to the extent of the loss caused by the 49Schlesinger v. Schultz, 110 App. Div. 356, 96 N. Y. Supp. 383. 50Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 193); Ariz. (§ 3489); 111. (§ 192); Kan. (§ 4); Md. (§ 16); Mich. (§ 2); Neb. (§ 191); N. Y. (§ 4); Ohio (§ 3178B); R. I. (§ 4); Wis. (§ 1675). German American Bank v. Mills, 99 App. Div. 312, 91 N. Y. Supp. 142; Anderson v. First Nat. Bank (Iowa) 122 N. W. 918. siCommercial Nat. Bank v. Zimmerman, 185 N. Y. 210, 77 N. E. 1020; German American Bank v. Mills, 99 App. Div. 312, 91 N. Y. Supp. 142; Anderson v. First Nat. Bank (Iowa) 122 N. W. 918. 62Commercial Nat. Bank v. Zimmerman, 185 N. Y. 210, 77 N. E. 1020. 63German American Bank v. Mills, 99 App. Div. 312, 91 N. Y. Supp. 142. 54German American Bank v. Mills, 99 App. Div. 312, 91 N. Y. Supp. 142. 55See ante, § 9. Code Supp. 1902, § 3060-a 185. Plover Sav. Bank v. Moodie, 135 Iowa, 685, J 10 N. W. 29. § 189 CHECKS. 25t delay.^ It has long been a general rule that presentment of a check must be made within a reasonable time after its issuance.''' The negotiable instruments act provides generally that in determining what is a reasonable time or an unreasonable time, regard is to be had to the nature of the instrument, the usage of trade or business, if any, with respect to such instrument, and the facts of the particular case.^^ This, however, would not seem 6<5Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 186); Ariz. (§ 3487); 111. (§ 185); Kan. (§ 193); Md. (§ 205); Mich. (§ 188); Neb. (§ 185); N. Y. (§ 322); Ohio (§ 3177w); R. I. (§ 194); Wis. (§ 1684-2). Drawer of check must show special injury by delay in presentment. Emery v. Hobson, 62 Me. 578; Cowing v. Altman, 79 N. Y. 167; Little V. Phenix Bank, 2 Hill (N. Y.) 425. Also in case of failure to present for payment. Allen v. Kramer, 2 111. App. 205. But see Ford v. McClung, 5 W. Va. 156; First Nat. Bank v. Miller, 11 Neb. 500, 65 N. W. 1064, holding that the indorser need not show special injury. A payee who neglects to present a check within a reasonable time must stand any loss occasioned by his default. Greely v. Cascade County, 21 Mont. 580, 57 Pac. 274. Delay operates as a discharge only to extent of loss. Cox v. Citizens' State Bank, 73 Kan. 789, 85 Pac. 762; Dehoust v. Lewis, 128 App. Div. 131, 112 N. Y. Supp. 559; Kramer v. Grant, 60 Misc. 109, ill N. Y. Supp. 709; Gordon v. Levine, 194 Mass. 418, 80 N. E. 505; State Bank of Gothenburg v. Carroll, 81 Neb. 484, 116 N. W. 276. In the absence of a showing of loss, the mere fact of forwarding check direct to drawee instead of to collecting agent does not discharge indorser. Citizens' Bank V. First Nat. Bank, 135 Iowa, 605, 113 N. W. 481. As against an in- dorser, the fact that the holder sends the check or bill direct to the drawee bank for payment instead of selecting an ind penaent agent 'o make demand for payment is immaterial, the indorser having suffered no injury thereby. So held where check was not paid by drawee bank solely because the maker had stopped payment before demand was made. Plover Sav. Bank v. Moodie, 135 Iowa, 685, 110 N. W. 29. 57Bull v. First Nat. Bank, 14 Fed. 612; Woodruff v. Plant, 41 Conn. 344; Mohawk Bank v. Broderick, 10 Wend. (N. Y.) 304. 58Neg. Inst. .Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 193); Ariz. (§ 3489); 111. (§ 192); Kan. (§ 4); Md. (§ 16); Mich. (§ 2); Neb. (§ 191); N. Y. (§ 4) ; Ohio (§ 3178b) ; R. I. (§ 4) ; Wis. (§ 1675). Holder of check is required to present it for payment within a reason- Opp. — Sel. — 17 •l^^ PRESENTMENT FOR PAYMENT. §189 to lay down or establish any new rule. The nature of the instru- ment and the facts of the particular case have always been con- sidered in passing upon the question of reasonable or unreason- able time. One of the rules which has been established is, that where the draAver and drawee and the payee are all in the same city or town, a check, to be presented within a reasonable time, should be presented at some time before the close of banking hours on the day after it is issued, and that its circulation from hand to hand will not extend the time of presentment to the detri- ment of the drawer.59 jf they are not in the same place it is only necessary that the check be put in course of circulation within the time otherwise allowed by law.^^ Most of the cases, however, have been decided on their own peculiar facts,^! and in this con- nection the usage of banks relating to the presentation of checks able time after its issue, according to the usuages of 'business and the circumstances of the case. Citizens' Bank v. First Nat. Bank, 135 Iowa, 605, 113 N. W. 481; Plover Savings Bank v. Moodie, 135 Iowa, 685, 110 N. W. 29. 59Gordon v. Levine, 194 Mass. 418, 80 N. E. 505; Cox v. Citizens' State Bank, 13 Kan. 789, 85 Pac. 762; Matlock v. Scheuerman (Or.) 93 Piac. 823. Day following indorsement. First Nat. Bank v. Currie, 147 Mich. 72, 13 Det. Leg. N. 965, 110 N. W. 499. Construed to mean that the reasonable time ends with the next day after the date of the check, or of its delivery if subsequent to the date (Dehoust v. Lewis, 128 App. Div. 131, 112 N. Y. Supp. 559), and the fact that the payee indorsed the check to a third party does not extend the time as between the drawer and the payee (Id.). Presentment, or a forwarding for presentment, must be made within twenty-four hours after the issuance of the check. Mohawk Bank v. Broderick, 10 Wend. (N. Y.) 304; Smith v. Miller, 43 N. Y. 171; School- field v. Moon, 56 Tenn. (9 Heisk.) 171; First Nat Bank v. Alexander, 84 N. C. 30; Grange v. Reigh, 93 Wis. 552, 67 N. W. 1130. eoCox V. Citizens' State Bank, 7Z Kan. 789, 85 Pac. 762. 6iFor presentments held to have been made with reasonable diligence. See Woodrufif v. Plant, 41 Conn. 344; First Nat. Bank v. Buckhannon Bank, 80 Md. 475, 31 Atl. 302, 27 L. R. A. 332; Nebraska Nat. Bank v. Logan, 35 Neb. 182, 52 N. W. 808; Rosenthal v. Ehrlicher, 154 Pa. 396, 26 Atl. 435; Lloyd v. Osborne, 92 Wis. 93, 65 N. W. 859. For unreason- able delay in presentment, see Anderson v. Rodgers, 53 Kan. 542, 36 Pac. 1067, 27 L. R. A. 248; Anderson v. Gill, 79 Md. 312, 29 Atl. 527; Holmes v. Roe. 62 Mich. 199, 28 N. W. 864; Carroll v. Sweet, 9 Misc. 382, 30 N. Y. Supp. 204. ^ ;^90 EXCUSABLE DELAY. 259 eor payment is material and relevant,^^ independent of the knowl- edge or want of knowledge thereof on the part of a party indors- ing and negotiating the check or bill.^^ Tims, where checks were forwarded to various banks in accordance with the regular cus- tom and usage of the business, sufficient diligence was exercised to charge the indorser, though demand might have been more promptly made if other and extraordinary means had been re- sorted to.^* § 190. Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, presentment must be made with rea- sonable diligence. Delay in making presentment is excused when caused by cir- cumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence.^s When the cause of 62Plover Savings Bank v. Moodie, L35 Iowa, 685, 110 N. W. 29. «3Plover Savings Bank v. Moodie, 135 Iowa, 685, 110 N. W. 29. 64Plover Savings Bank v. Moodie, 135 Iowa, 685, 11€ N. W. 29. While in this case the checks were in effect practically negotiated to each suc- ceeding bank, and hence comes within the rule as to presentment after the last negotiation, still the opinion would lead one to believe that the same result would have been reached had the checks simply been for- warded the succeeding banks for collection. Id. Negligence of holder of check in presenting it for payment cannot be predicated on the fact that check was forwarded by mail instead of by messenger. Citizens Bank V. First Nat. Bank, 135 Iowa, 605, 113 N. W. 481. 65Neg Inst. Laws Colo., Conn., D. C. Fla.. Idaho, Iowa, Ky., La., Mass.. Mo., Mont., Nev., N. H., N. J., N. M.. N. C. K D. Okl Or Pa Tenn., Utah, Va., Wash.. W. Va., Wyo. (§ 81); Ariz. (§ 3384) ; 111. § 8 . Kan (§ 88); Md. (§ 100); Mich. (§ 83); Neb. {§ 81); N. Y. (§ 141); Ohio (§ 3173z); R. I. (§ 89); Wis. (§ 1678-11). Mistake of postal clerk, see Windham Bank v. Norton, 22 Conn. 21. Bad weather, see McDonald v. Mosher, 23 111. App. 206; Barker v. Parker, 33 Mass. (6 Pick.) 80. Death of holder, see Wilson v. Semer, 14 Wis 380. War. see Hardin v. Boyce, 59 Barb. (N. Y.) 425; Lane v. Bank of West Tennessee, 56 Tenn. (9 Heisk.) 419. 2G0 t>RESfiNTMENT FOR PAYMENT. §191 delay ceases to operate, presentment must be made with reason- able diligenee.^^ § 191. Presentment for payment to the acceptor for honor must be made as follows: 1. If it is to be presented in the place v/here the protest for nonpayment was made, it must be presented not later than the day following its maturity ; 2. If it is to be presented in some other place than the place where it was protested, then it must be for- warded within the time specified for giving notice of dishonor. Presentment for payment to the acceptor for honor must be made as follows : 1. If it is to be presented in the place where the protest for nonpayment was made, it must be presented not later than the day following its maturity .^'^ 2. If it is to be presented in some other place than the place where it was protested, then it must be forwarded within the time specified in the section dealing with the notice of dishonor.^ The provisions excusing delay in presentment apply where there is delay in making presentment to the acceptor for honor or ref- eree in case of need.^^ 66Same sections of negotiable instruments laws as last above cited. 67Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M.. N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 168); Ariz. (§ 3471); 111. (§ 167); Kan. (§ 175); Md. (§ 187); Mich. (§ 170); Neb. (§ 167); N. Y. (§ 287); Ohio (§ 3177-E); R. I. (§ 176); Wis. (§ 1681-25). ssSubdivision 2, same sections of negotiable instruments laws as last above cited. The section referred to in the text is § 104 for the negotiable instruments laws of Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., and Wyo., but should be section 112 of the Rhode Island law, section 123 of the Maryland law, section 175 of the New York law, and section 1678-34 of the Wisconsin law; Ariz. § 3407; 111. § 103; Kan. § 111; Mich. § 106; Neb. § 103; Ohio ^192 PLACE FOR PRESENTMENT. 261 Place. § IM. Presentment for payment is made at the proper place: 1. Where a place of payment is specified in the instru- ment and it is there presented; 2. Where no place of payment is specified but the ad- dress of the person to make payment is given in the instrument and it is there presented ; 3. Where no place of payment is specified and no ad- dress is given and the instrument is presented at the usual place of business or residence of the per- son to make payment; 4. In any other case if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence. Where a place of presentment is specified in the instrument, it must be presented for payment there.'^o The note being payable on demand at a bank and before presentation the bank goes into § 3174v. The law as first adopted in New York has been amended so that the reference is now section 175 of that law. Laws 1898, c. 336, § 18. The sections referred to are treated in § 231 of this work. 89Neg-. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 169); Ariz. (§ 3472); 111. (§ 168); Kan. (§ 176); Md. (§ 188); Mich. (§ 171); Neb. (§ 168); N. Y. (§ 288); Ohio (§ 3177f); R. I. (§ 177); Wis. (§ 1681-26). The section referred to in the text § 81 for the negotiable instruments laws of Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn.. Utah, Va., Wash., W. Va., and Wyo., but should be section 89 of the Rhode Island law, section 100 of the Maryland law, section 141 of the New York Law, and section 1678-11 of the Wisconsin law; Ariz. § 3384; 111. § 81; Kan. § 88; Mich. § 83; Neb. § 81; Ohio § 3173z. The law as first adopted in New York has been amended so that the reference is now to section 141 of that law. Laws 1898, c. 336, § 19. The sections referred to are treated in §§ 190, 191 of this work. 70Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C. N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 73); Ariz. (§ 3376); 111. (§ 73); 2t,2 PRESENTMENT FOR PAYMENT. §192 the hands of a receiver, presentation at the bank is proper,'^ but being a national bank, no demand for payment need be made on the receiver/2 Where a note is made payable at a designated branch office of a corporation, presentation at the corporation's principal office is insufficient.'^^ if no place of payment is desig- nated, but the address of the person to make payment is given in the instrument, it should be presented there.'^* If no place of payment is specified, and no address is given, the instrument should be presented at the place of business or residence of the person to make payment.'^^ In any other case presentment is suffi- Kan. (§ 80); Md. (§ 92); Mich. (§ 75); Neb. (§ 7Z); N. Y. (§ 133); Ohio (§ 3173r); R. I. (§ 81); Wis. (§ 1678-3). Bank of the State v. Bank of Cape Fear, 35 N. C. (13 Ired. Law) 75; Warren v. Briscoe, 12 La. 472; Tovvnsend v. Chas. H. Heer Dry Goods Co., 85 Mo. 503; Ferner v. Williams, 37 Barb. (N. Y.) 9; Arnold v. Dresser, 90 Mass. (8 Allen) 435; Apperson v. Bynum, 45 Tenn. (5 Cold.) 341; Bynum v. Apperson, 56 Tenn. (9 Heisk.) 632. In the absence of custom authorizing it, a presentment at the office of a loan and trust company in a particular city is not a sufificient presentment of a note payable at any "bank" in such city. Nash v. Brown, 165 Mass. 384, 43 N. E. 180. But see statutory definition of "bank" in note 32, chapter XV. Where the specified place of payment is the agency of a banking company in a particular city, a presentment there has been sustained, though the agency had been removed shortly before the presentment. Spann v. Batlzell, 1 Fla. 301, 46 Am. Dec. 346. So if the bank where a note is made pay- able fails before the maturity of the note, presentment at the old place of business is good. Central Bank v. Allen, 16 Me. 41. See, also, Rienke V. Wright, 93 Wis. 368, 67 N. W. 737; Adams v. Leiand, 30 N. Y. 309. On question of diligence in presentment at place designated, see Farns- worth V. Mullen, 164 Mass. 112, 41 N. E. 131. 7iSchlesinger v. Schultz, 110 App. Div. 356, 96 N. Y. Supp. 383. 72Schlesinger v. Schultz, 110 App. Div. 356, 96 N. Y. Supp. 383. 73 Iron Clad Mfg. Co. v. Sackin, 59 Misc. 281, 110 N. Y. Supp. 161. This changes the law in New York. See Brooks v. Higley, 11 Hun (N. Y.) 235. ^^Subdivision 2, same sections of negotiable instruments laws as last above cited. A holder who, within the knowledge of the maker, places the latter's address below his name on the note, is bound by a demand made at such place by a subsequent holder. Farnsworth v. Mullen, 164 Mass. 112, 41 N. E. 131. 75Subdivision 3, same sections of negotiable instruments laws as last above cited. § 193 MANNER OF PRESENTMENT. 283 cient if made to the person to make payment wherever ho can be found, or if made at his last known place of business or residence^* Manner. § 193. The instrument must be exhibited to the person from whom payment is demanded. To render a presentment for payment sufficient, the instrument must be exhibited to the person from whom payment is demand- ed.'^'^ This rule has been stated as follows: "No valid presentment and demand can be made by any person without having the note in his possession at the time, so that the maker may receive it in Estes V. Tower, 102 Mass. 65; Peoples' Nat. Bank v. Lutterloh, 95 N. C. 495 (no address given). Presentment at maker's place of business without inquiring for his residence is not sufficient. Talbot v. National Bank of the Commonwealth, 129 Mass. 67. Diligence where no place is specified, see Holtz v. Boppe, 37 N. Y. 634; Mason v. Prichard, 56 Tenn. (9 Heisk.) 793. ^eSubdivision 4, same sections of negotiable instruments laws as last above cited. Demand made on the maker w^hile on the street is good, if he has no place of business, and does not object to the place of demand. King v. Crowell, 61 Me. 244; Parker v. Kellogg, 158 Mass. 90, 32 N. E. 1038. Place of execution of instrument as proper place for presentment, see Wittkowski v. Smith, 84 N. C. 671; Hart v. Wills, 52 Iowa, 56, 2 N. W. 619. The maker is presumed to reside in the state where the note is ex- ecuted. Herrick v. Baldwin, 17 Minn. 209. 77Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va.. Wash., W. Va., Wyo. (§ 74); Ariz. (§ 3377); 111. (§ 74); Kan. (§ 81); Md. (§ 93); Mich. (§ 76); Neb. (§ 74); N. Y. (§ 134); Ohio (§ 3173s); R. L (§ 82); Wis. (§ 1678-4). Musson v. Lake, 45 U. S. (4 How.) 262, 11 Law. Ed. 103; Arnold v. Dresser, 90 Mass. (8 Allen) 435; Shaw v. Reed, 29 Mass. (12 Pick.) 132. But see Whitwell v. Johnson, 17 Mass. 449. Upon presentation and de- mand of payment, the maker can insist on the exhibition of the note as evidence of the holder's right to collect. Gilpin v. Savage, 60 Misc. 605, 112 N. Y. Supp. 802. Conditional refusal prior to a demand, accompanied by a production of tbe instrument, does not constitute dishonor. Citi- zen's Bank V. First Nat. Bank, 135 Iowa, 605, 113 N. W. -^81. 264 PRESENTMENT FOR PAYMENT. § 194 ease he pays the amount due, unless special circumstances, such as the loss of the note or its destruction, are shown to excuse its absence. "'^^ The right of such person to an actual exhibition or production of the instrument may be waived by failing to ask for it, and refusing payment on other grounds.'^^ Dispensing With and Waiver of Presentment. § 194. Presentment for payment is dispensed with: 1. Where after the exercise of reasonable diligence presentment as required by this act cannot be made ; 2. Where the drawee is a fictitious person; 3. By waiver of presentment, express or implied. § 195. A waiver of protest includes a waiver of presentment. Presentment for payment is dispensed with if, after the exer- cise of reasonable diligence, presentment cannot be made.^ This is the case where the person primarily liable cannot be found after diligent search.^^ So, also, if payment is stopped by the drawer, or his funds are withdrawn, presentment is not necessary 78Arnold v. Dresser, 90 Mass. (8 Allen) 435. 79Legg V. Vinal, 165 Mass. 555, 43 N. E. 518; Waring v. Betts, 90 Va. 46, 17 S. E. 739; King v. Crowell, 61 Me. 244; Lockwood v. Crawford, 18 Conn. 361; Gilpin v. Savage, 60 Misc. 605, 112 N. Y. Supp. 802. soNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 82); Ariz. (§ 3385); 111. (§ 82); Kan. (§ 89); Md. (§ 101); Mich. (§ 84); Neb. (§ 82); N. Y. (§ 142); Ohio (S 3174); R. I. (§ 90); Wis. (§ 1678-12). Waring v. Betts, 90 Va. 46, 17 S. E. 739. siGalpin v. Hard, 3 McCord (S. C.) 394; Adams v. Leland, 30 N. Y. 309; Ratcliff v. Planters' Bank, 34 Tenn. (2 Sneed) 425. But mere failure to find the maker of a note in the city where it was executed is not a good excuse. Haber v. Brown, 101 Cal. 445, 35 Pac. 1035. Nonresidence as excusing presentment, see Williams v. Bank of United States, 27 U. S. (2 Pet.) 96, 7 Law. Ed. 30; Moore v. Coflfield, 12 N. C. (1 Dev. Law) 247. §195 .WAIVER OF PRESENTMENT. 265 to charge him.^^ -q^i ^^q mere insolvency of the person primarily liable will not excuse presentment.^^ Presentment is also dis- pensed with where the drawee is a fictitious person.^ Presentment may also be waived,^^ and the waiver may be ex- press, by parol,^^ or writing,^" with full knowledge of the facts,^ or it may be implied,^^ and such waiver may consist of conduct,^ or of acts and declarations of the indorser, calculated to mislead the holder, put him off his guard, or induce him to forbear taking the necessary steps to charge such indorser.^^ Whether the acts and declarations have such effect is a question of fact.^^ The exceptions above noted are exclusive.'* 82Rhett V. Poe, 43 U. S. (2 How.) 457, 11 Law. Ed. 167; Purchase v. Mattison, 13 N. Y. Super. Ct. (6 Duer) 587. 83Lee Bank v. Spencer, 47 Mass. (6 Mete.) 308; Manning v. Lyon, 70 Hun, 345, 24 N. Y. Supp. 265; Bassenhorst v. Vilby, 45 Ohio St. 333, 13 N. E. 75; Cedar Falls Co. v. Wallace Brothers, 83 N. C. 225. ^Subdivision 2, same sections of negotiable instruments laws as last above cited. ^^Subdivision 3, same sections of negotiable instruments laws as last above cited. Robinson v. Bamett, 19 Fla. 670. See, also, Stanley v. McElrath, 86 Gal. 4'<9, 25 Pac. 16, 10 L. R. A. 545, where it was held that an indorser who waived notice of nonpayment after dishonor, and paid the note, could recover from the maker. sePorter v. Kemble, 53 Barb. (N. Y.) 467; Maples v. Traders' Deposit Bank, 15 Ky. Law Rep. 879. s^Portsmouth Sav. Bank v. Wilson, 5 App. D. C. 8; City Sav. Bank v. Hopson, 53 Conn. 453, 5 Atl. 601. sSAebi v. Bank of Evansville, 124 Wis. 73, 102 N. W. 329. 89Markland v. McDaniel, 51 Kan. 350, 20 L. R. A. 96; Cady v. Bradshaw, 116 N. Y. 188, 22 N. E. 371; Sieger v. Second Nat. B^nk, 132 Pa. 307, 19 Atl. 217; Torbert v. Montague, 3S Colo. 325, 87 Pac, 1145. 90Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886. eiTorbcrt v. Montague, 38 Colo. 325, 87 Pac. 1145. 92Torbert v. Montague, 38 Colo. 3.?5, 87 Pac. 1145. Implied waiver where indorser was president of corporation and participated in having latter adjudged a bankrupt. J. W. O'Bannon Co. v. Curran 129 App. Div. 90, 113 N. Y. Supp. 359. osMoore v. Alexander, 63 App. Div. 100, 71 N. Y. Supp. 420; J. W. O'Bannon Co. v. Curran, 129 App. Div. 90, 113 N. Y. Supp. 359. Alters New York rule that failure to present does not discharge in the absence 20b PRESENTMENT FOR PAYMENT. § 196 Waiver of protest. A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver not only of a formal protest, but also of presentment and notice of dishonor,^* and it has been held that a waiver of ''no- tice of protest" was a waiver of protest and consequently of de- mand and presentment.^* Dishonor. § 196. The instrument is dishonored by nonpayment when: 1. It is duly presented for payment and payment is re- fused or cannot be obtained; or 2. Presentment is excused and the instrument is over- due and unpaid. The instrument is dishonored by nonpayment if it is duly pre- sented for payrOsCnt, and payment is refused or cannot be ob- tained, or presentment is excused, and the instrument is overdue and unpaid.^^ of injury. J. W. O'Bannon Co. v. Curran, 129 App. Div. 90, 113 N. Y. Supp. 359. Lack of funds no defense. First Nat. Bank v. Currie, 147 Mich. 72, 13 Det. Leg. N. 965, 110 N. W. 499. 9^N-eg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 111); Ariz. (§ 3414); IIll. (§ 110); Kan. (§ 118); Md. (§ 130); Mich. (§ 113); Neb. (§ 110); N. Y. (§ 182); Ohio (§ 3175b); R. I. (§ 119); Wis. (§ 1678-41). Bank of Montpelier v. Montpelier Lumber Co. (Idaho) 102 Pac. 685. S5Parr v. City Trust, Safe Deposit & Surety Co., 95 Md. 291, 52 Atl. 512. 96Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 83); Ariz. (§ 3386); 111. (§ 83); Kan. (§ 90); Md. (§ 102); Mich. (§ 85); Neb. (§ 83); N. Y. (§ 143); Ohio (§ 3174a); R. L (§ 91); Wis. (§ 1678-13). § 198 REFEREE IN CASE OF NEED. 2G7 § 197. Subject to the provisions of the act, when the instrument is dishonored by nonpayment, an immediate right of re- course to all parties secondarily liable thereon accrues to the holder. Subject to the other provisions of the negotiable instruments laws as to the liability of persons secondarily liable when an in- strument is dishonored by nonpayment, an immediate right of recourse against all parties secondarily liable thereon accrues to the holder.97 § 198. The drawer of a bill and any indorser may insert therein the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonored for nonpayment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit. The drawer or indorser of a bill may insert therein a referee in case of need in case the bill is dishonored by nonpayment.^^ It is optional with the holder to resort to such referee,^ but if he does, and the latter pays, he has recourse against the drawer for the full amount.^*^ o^Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 84); Ariz. (§ 3387); 111. (§ 84); Kan. (§ 91); Md. (§ 103); Mich. (§ 86); Neb. (§ 84); N. Y. (§ 144); Ohio (§ 3174b); R. I. (§ 92); Wis. (§ 1678-14). Parties to negotiable instruments held to be guarantors and not indors- ers. See Glickauf v. Kaufmann, IZ 111. 378; Nelson v. Harrington, 82 Mass. (16 Gray ) 139; Harding v. Waters, 74 Tenn. (6 Lea) 324. But see Pollard V. Huff, 44 Neb. 892, 63 N. W. 58. Cosureties not guarantors, see Southerland v. Fremont, 107 N. C. 565, 12 S. E. 237. In case of a mere guaranty of collection, the holder must first pursue remedies against the principal debtor. Summers v. Barrett, 65 Iowa, 292, 21 N. W. 646; Pach V. Frink, 10 Iowa, 193. 98Neg. Inst. Lav/s Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont:, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 131): Ariz. (§ 3434); 111. (§ 130); Kan. (§ 138); Md. (§ 150); Mich. (§ 133); N«b. (§ 130); N. Y. (S 215); Ohio (§ 3175v); R. I. (§ 139); Wis. (§ 16.S0e). y^Same sections negotiable instruments laws last cited. lOOChit. Bills, 186; Story, Bills, § 65. CHAPTER XIII. PROTEST OF BILLS OF EXCHANGE. § 199. Necessity. § 200. Dishonor of Bill by Acceptor For Honor. § 201. Protest of Bill for Nonacceptance and Nonpayment. § 202. Nature and Sufficiency of Protest. § 203. By Whom Made. § 204. Time of Making Protest — Extending Notes. § 205. Protest Before Maturity Where Acceptor is Insolvent. § 206. Protest of Bill Accepted For Honor. § 207. Place of Protest. § 208. Protest of Lost or Detained Bill. § 209. Waiver. § 210. Excuses For Failure or Delay to Protest. § 211. Damages Recoverable in Case of Protest. Necessity. § 199. Where any negotiable instrument has been dishonored it may be protested for nonacceptance or nonpayment, as the case may be, but protest is not required except in the case of foreign bills of exchange appearing on their face to be such. Failure to protest such a foreign bill discharges the drawer and indorsers. § 200. When the bill is dishonored by the acceptor for honor, it must be protested for nonpayment by him. § 201. A bill which has been protested for nonacceptance may be subsequently protested for nonpayment. Foreign bills must be protested for nonacceptance or nonpay- ment. Where a foreign bill which shows on its face that it is snch is dishonored by nonacceptance, it must be duly protested for non- 268 §201 NECESSITY. 2Gt) aeceptanee; and it must be duly protested for nonpayment if it has been dishonored by nonpayment, and has not been previously dishonored for nonaceeptance.^/ Negotiable instruments other than foreign bills may be, but need not be, protested for non- acceptance or nonpayment.^ ■'But as the notarial certificate of protest is generally made p"rima facie evidence of the facts of dishonor and notice which it recites, it is often convenient to protest instruments which are not foreign bills. If a foreign bill is not protested as required by the above rules, the drawer and indorscrs are discharged.^ iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va.. Wash., W. Va., Wyo. (§ 152); Ariz. (§ 3455); 111. (§ 151); Kan. (§ 159); Md. (§ 17); Mich. (§ 154); Neb. (§ 151); N. Y. (§ 260); Ohio (§ 3176p); R. I. 160); Wis. (§ 1681-9). Amsinck v. Rogers, 189 N. Y. 252, 82 N. E. 134, 121 Am. St. Rep. 858. As to necessity of protesting dishonored foreign bill, see Commercial Bank v. Varnum, 3 Lans. (N. Y.) 86, 49 N. Y. 269; Gardner v. Bank of Ten- nessee, 31 Tenn. (1 Swan) 420; Joseph v. Salomon, 19Fla.623;Union Bank V. Hyde, 19 U. S. (6 Wheat.) 572, 5 Law. Ed. 169. A dishonored inland bill need not be protested. McCord v. Curlee, 59 111. 221; Townsend v. Auld, 8 Misc. 516, 28 N. Y. Supp. 746; Hubbard v. Troy, 24 N. C. (2 Ired.) 134; Shaw v. McNeill, 95 N. C. 535. A dishonored check n.eed not be protested. Wittich v. First Nat. Bank, 20 Fla. 843, 51 Am. Rep. 631; Henshaw v. Root, 60 Ind. 220; Wood River Bank v. First Nat. Bank, 36 Neb. 744, 55 N. W. 239. 2Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 118); Ariz. (§ 3421); 111. (§ 117); Kan. (§ 125); Md. (§ 137); Mich. (§ 120); Neb. (§ 117); N. Y. (§ 189); Ohio (§ 3175i); R. I. (§ 126); Wis. (§ 1678-48). Wisner v. First Nat. Bank, 220 Pa. 21, 68 Atl. 955. At common law and under the Massachusetts statute, no formal protest is needed to hold the indorsers; it is enough if there has been proper demand upon the maker, a refusal by bim to make payment, and seasonable notice of these facts given the indorser. Demelman v. Brazier, 198 Mass. 458, 84 N. E. 856. SN'Cg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 152); Ariz. (§ 3455); Til. (§ 151); Kan. (§ 159); Md. (§ 171); Mich. (§ 154); Neb. (§ 151); N. Y. (§ 260); Ohio (§ 3176p); R. I. (§ 160); Wis. (§ 1681-9). 2/U PROTEST OF BILLS OF EXCHANGE. § 202 Dishonor of bill by acceptor for honor. When the bill is dishonored by the acceptor for honor, it must be protested for nonpayment by him.* Protest both for nonacceptance and nonpayment. The fact that a bill has been protested for nonacceptance will not prevent a subsequent additional protest for nonpayment.^ Nature and Sufficiency of Protest. § 202. The protest must be annexed to the bill, or must contain a copy thereof, and must be under the hand and seal of the notary making it, and must specify ; 1. The time and place of presentment ; 2. The fact that presentment was made and the manner thereof ; 3. The cause or reason for protesting the bill; 4. The demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found. In its broadest sense, the word "protest" includes all the steps necessary to charge the indorsers.^ Technically, however, the *Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tcnn., Utah, Va., Wash., W. Va., Wyo. (§ 170); Ariz. (§ 3473); III. (§ 169); Kan. (§ 177); Md. (§ 189); Mich. (§ 172); Neb. (§ 169); N. Y. (§ 289); Ohio (§ 2177g); R. I. (§ 178); Wis. (§ 1681-27). 5Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tcnn., Utah, Va., Wash., W. Va., Wyo. (§ 157); Ariz. (§ 3460); 111. (§ 156); Kan. (§ 164); Md. (§ 176); Mich. (§ 159); Neb. (§ 156); N. Y. (§ 265); Ohio (§ 3176v); R. I. (§ 165); Wis. (§ 1681-14). cWhite V. Keith, 97 Ala. 668, 12 So. 611; Ayrault v. Pacific Bank, 47 N. Y. 570, 7 Am. Rep. 489; Wolford v. Andrews, 29 Minn. 250, 13 N. W. 167, 43 Am. Rep. 201; Townsend v. Lorain Bank, 2 Ohio St. 345; Sherman V. Ecker, 59 Misc. 216, 110 N. Y. Supp. 265, rvg. 58 Misc. 456, 109 N. Y. Supp. 678. § 202 SUFFICIENCY. 271 protest is a formal document annexed to the bill, or eontainint; a copy of the bill,^ under the hand and seaH of the notary mak- ing it, and specifying the time and place of presentment,^ the fact that presentment was made, and the manner thereof,^" the cause or reason for protesting the bill,^^ the demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found.^^ ^ notarial certificate of protest failing to show in what post office notice to indorser was deposited and to what post office it was sent has been held insufficient.^^ 7Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 153); Ariz. (§ 3456); 111. (§ 152); Kan. (§ 160); Md. (§ 172); Mich. (§ 155); Neb. (§ 152); N. Y. (§ 261); Ohio (§ 3176q); R. I. (§ 161); Wis. (§ 1681-10). See Colms v. Bank of Tennessee, 63 Tenn. (4 Baxt.) 422, where it was held that a failure to copy the instrument in the foniial protest was cured by prefixing a copy, and referring to such copy in the protest. See, also, Townsend v. Lorain Bank, 2 Ohio St. 345. sSame sections negotiable instruments laws last cited. See Jordon v. Long, 109 Ala. 414, 19 So. 843; Richards v. Boiler, 51 How. (N. Y.) 371, 6 Daly, 460. And see Bank of Cooperstown v. Woods, 28 N. Y. 561. ^Subdivision 1, same sections of negotiable instruments laws as last above cited. Gardner v. Bank of Tennessee, 31 Tenn. (1 Swan) 420; People's Bank V. Brooke, 31 Md. 7. See, also, Brooke v. Higby, 11 Hun (N. Y.) 235, in which it was held that the notarial certificate failed to show that the draft was presented at the place where it was made payable. lOSubdivision 2, same sections of negotiable instruments laws as last above cited. A protest which does not show presentation to the drawee is not admissible in evidence in an action against an indorser. Musson v. Lake, 45 U. S. (4 How.) 262, 11 Law. Ed. 103. ^Subdivision 3, same sections of negotiable instruments laws as last above cited. i2Subdivision 4, same sections of negotiable instruments laws as last above cited. iSMason v. Kilcourse, 71 N. J. Law, 472, 59 Atl. 21. 272 PROTEST OF BILLS OF EXCHANGE. § 203 Conclusiveness of certificate. A properly executed certificate of protest is, in most states, prima facie evidence of the facts therein recited,^* but may be contradicted by other evidence,^^ the question being for the jury.^^ By Whom Made. § 203. Protest may be made by: 1. A notary public; or 2. By any respectable resident of the place where the bill is dishonored in the presence of two or more credible witnesses. Protest of a bill may, of course, be made by a notary,^'^ and it is customary to have a notary make the protest, but it may also i*See Martin v. Brown, 75 Ala. 442; Ricketts v. Pendleton, 14 Md. 320; Legg V. Vinal, 165 Mass. 555, 43 N. E. 518; Bettis v. Schrieber, 31 Minn. 329, 17 N. W. 863; McAndrew v. Radway, 34 N. Y. 511; Rosson v. Carroll, 6 Pjckle, 90; Central Bank v. St. John, 17 Wis. 157. See, also, Sims v. Hundley, 47 U. S. (6 How.) 1, 12 Law. Ed. 580. Certificate of protest stating that indorser was duly notified of dishonor, the indorser has the burden of showing that he did not receive notice. Zollner v. Moffitt, 222 Pa. 644, 72 Atl. 285. i5Meise v. Newman, 76 Hun, 341, 27 N. Y. Supp. 708; Adams v. Wright, 14 Wis. 408; Demelman v. Brazier, 198 Mass. 458, 84 N. E. 856. iSDemelman v. Brazier, 198 Mass. 458, 84 N. E. 856. i7Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 154); Ariz. (§ 3457); 111. (§ 153); Kan. (§ 161); Md. (§ 173); Mich. (§ 156); Neb. (§ 153); N. Y. (§ 262); Ohio (§ 3176r); R. I. (§ 162); Wis. (§ 1681-11). Protest may be made by the notary's clerk, if that is the custom at the place of protest. Commercial Bank of Kentucky v. Varnum, 49 N. Y. 269; Munroe v. Woodruff, 17 Md. 159; Sussex Bank v. Baldwin, 17 N. J. Law, 487. In the absence of well defined custom, the notary's clerk or deputy cannot make the protest for hitn. Cribbs v. Adams, 19 Mass. (13 Grsy) 597; OnondaRa Bank v. Bates. 3 Hill CN. Y.) S3. § 206 TIME. 273 be made by any respectable resident of the place where the bill is dishonored, in the presence of two or more credible witucsses.^^ By the law merchant, a notarial protest need not be made in the presence of witnesses.^^ TiMB OP Protest. § 204. When a bill is protested, such protest must be made on the day of its dishonor, unless delay is excused. When the bill has been duly noted, the protest may be subse- quently extended as of the date of the noting. § 205. Where the acceptor has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, before the bill matures, the holder may cause the bill to be protested for better security against the drawer and indorsers. § 206. Where a dishonored bill has been accepted for honor supra protest, or contains a reference in case of need, it must be protested for nonpayment before it is presented for payment to the acceptor for honor or referee in case of need. Time of making protest — Extending notes. Protest must be made on the day the bill is dishonored, unless protest is excused.?" The notary need not, however, make out isSame sections of negotiable instruments laws as last above cited. This provision is taken from the English Bills of Exchange Act 1882 (§ 45). i9Bradford v. Cooper, 1 La. Ann. 325. 20Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 155); Ariz. (§ 3458); 111. (§ 154); Kan. (§ 162); Md. (§ 174); Mich. (§ 157); Neb. (§ 154); N. Y. .(§ 263); Ohio (§ 3176s); R. I. (§ 163); Wis. (§ 1681-12). Commercial Bank of Kentucky v. Barksdale, 36 Mo. 563. A certificate of protest made four and one-half years after protest is not proof of notice of dishonor. Boggs v. Branch Bank at Mobile, 10 Ala. 970. Opp. — Sel. — 18 274 PROTEST OF BILLS OF EXCHANGE. § 206 the formal protest at that time. He may make a note of the facts, and draw up or extend his formal protest afterwards.^^ The rule has been stated as follows: ''It seems to be clearly estab- lished by the general current of authority that the protest must he made on the same day with the presentment and demand, though a noting of the protest on the bill itself may be regarded as an incipient step toward a protest which may be completed afterwards, at any time, by drawing up the protest in form." 22 This formal protest or extension of the original noting takes date as of the date of the noting.^^ In order that delay may defeat recovery by a bona fide holder, tlie drawer must show that he suffered loss thereby.^* Protest before maturity where acceptor is insolvent. The holder of a bill may cause it to be protested before ma- turity for better security against the drawer and indorsers, if, before the maturity of the bill, the acceptor has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors.^^ Protest of bill accepted for honor. "Where a dishonored bill has been accepted for honor supra protest, or contains a reference in case of need, it must be pro- MBaHey v. Dozier, 47 U. S. (6 How.) 23, 12 Law. Ed. 587; First Nat. Bank v. Crittenden, 2 Thomp. & C. (N. Y.) 118. 22Comniercial Bank of Kentucky v. Barksdale, 36 Mo. 563. 23Same sections of negotiable instruments laws as last above cited. See Chatham Bank v. Allison, 15 Iowa, 357; Union Bank v. Holcomb, 24 Tenn. (5 Humph.) 583. 2<Cox V. Citizens' State Bank, 73 Kan. 789, 85 Pac. 762, 4 L. R. A. (N. S.) 347. 25Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wa^h., W. Va., Wyo. (§ 158); Ariz. (§ 3461); 111. (§ 157); Kan. (§ 165); Md. (§ 177); Mich. (§ 160); Neb. (§ 157); N. Y. (§ 266); Ohio (§ 3176v); R. I. (§ 166); Wis. (§ 1681-15). § 208 LOST OR DETAINED BILLS. 275 tested for nonpayment before it is presented for payment to the acceptor for honor or referee in case of need.^* Place op Protest. § 207. A bill must be protested at the place where it is dishon- ored, except that when a bill drawn payable at the place of business, or residence of some person other than the drawee, has been dishonored by nonacceptance, it must be protested for nonpayment at the place where it is ex- pressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary. Ordinarily, a bill must be protested at the place where it is dis- honored ; -' but where a bill is drawn payable at the place of busi- ness or residence of a person other than the drawee, and has been dishonored by nonacceptance, it must be protested for non- payment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary .2^ Protest of Lost or Detained Bill. § 208. Where a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof. Where a bill is lost or destroyed, or wrongly detained from 26Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 167); Ariz. (§ 3470); 111. (§ 166); Kan. (§ 174); Md. (§ 186); Mich. (§ 169); Neb. (§ 166); N. Y. (§ 286); Ohio (§ 3177d); R. L (§ 175); Wis. (§ 1681-24). 27Neg. Inst. Laws Colo., Conn., D. C. Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 156); Ariz. (§ 3459); 111. (§ 155); Kan. (§ 163); Md. (§ 175); Mich. (§ 158); Neb. (§ 155); N. Y. (§ 264); Ohio (§ 3176t); R. I. (§ 164); Wis. (§ 1681-13). 28Same sections of negotiable instruments laws as last above cited. 276 PROTEST OF BILLS OF EXCHANGE. § 209 the person entitled to hold it, protest may be made on a copy or written particulars thereof.^^ Waiver. § 209. Protest may be waived. Protest may be waived by the indorsers or other parties sec- ondarily liable,^" even after expiration of proper time for the protest to be made,^^ and a waiver of protest is deemed to be a waiver of presentment and notice of dishonor.^^ ^ j^g^ consid- 29Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 160); Ariz. (§ 3463); 111. (§ 159): Kan. (§ 167); Md. (§ 179); Mich. (§ 162); Neb. (§ 159); N. Y. (§ 268); Ohio (§ 3176x); R. I. (§ 168); Wis. (§ 1681-17). This is section 51, subd. 8, of the English Bills of Exchange Act 1882. See Hinsdale v. Miles, 5 Conn. 331, where it was held that presentment of copy of lost note and notice of dishonor was sufficient, and Scott v. Meeker, 20 Hun (N. Y.) 161, where it was held that the accidental destruction of a check by fire excused presentment for payment. As to the necessity of indemnity against subsequent presentation of lost paper by a bona fide holder, see McGregory v. McGregory, 107 Mass. 543, and Armstrong v. Lewis, 14 Minn. 406, where it was held that a receiver suing on a note must produce it, or prove it to have been lost or destroyed, and give bond accordingly. 30Mauney v. Coit, 80 N. C. 300. It may be waived by one partner. Seldner v. Mt. Jackson Nat. Bank, 66 Md. 488, 8 Atl. 262, 59 Am. Rep. 190. One becoming a partner to paper containing a waiver written in by the maker is bound thereby. Iowa Val. State Bank v. Sigstad, 96 Iowa, 491, 65 N. W. 407; Hoover v. McCormick, 84 Wis. 215, 54 N. W. 505. The last cited case also holds that, by waiving demand and notice, an indorser promises to pay absolutely if the maker does not. Indorsers waive protest of destroyed note by stating that payment will be made, after being informed of the destruction. Roch v. London, 24 Misc. 384, 53 N. Y. Supp. 261. siBurgettstown Nat. Bank v. Nill, 213 Pa. 456, 63 Atl. 186, 110 Am. St. Rep. 554, 3 L. R. A. (N. S.) 1079. 32Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn.. Utnh, Va., Wash., W. Va., Wyo. (§ 111); Ariz. (§ 3414); 111. §210 EXCUSABLE DELAY. 277 eration is not necessary for a waiver of protest,^' but the weight of authority requires that the waiver should be in writing.^* Excuses for Failure or Delay to Protest. § 210. Protest is dispensed with by any circumstances which would dispense with notice of dishonor. Delay in not- ing or protesting is excused when delay is caused by cir- cumstances beyond the control of the holder and not im- putable to his default, misconduct, or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence. It is a general rule that protest is dispensed with by any cir- cumstances which would dispense with notice of dishonor,^^ This rule applies to any delay caused by circumstances beyond the (§ 110); Kan. (§ 118); Md. (§ 130); Mich. (§ 113); Neb. (§ 110); N. Y. (§ 182); Ohio (§ 3175b); R. I. (§ 119); Wis. (§ 1678-41). The rule is also recognized in the following cases: Union Bank v. Hyde, 19 U. S. (6 Wheat.) 572, 5 Law. Ed. 169; Shaw v. McNeill, 95 N. C. 535; Wilkie v. Chandon, 1 Wash. 355; Johnson v. Parsons, 140 Mass. 173, 4 N. E. 196, where the words used were "hereby waive protest," and it did not appear that the protest was necessary to hold the indorser making the waiver. In Cooke v. Pomeroy, 65 Conn. 466, 32 Atl. 935, it was held that an indorser expressly waiving n-otice of protest was liable, though demand was not made on the maker, nor notice given, for 14 years after delivery of the note. ssRobinson v. Barnett, 19 Fla. 670, 45 Am. Rep. 24; Burgettstown Nat. Bank V. Nill, 213 Pa. 456, 63 Atl. 186, 110 Am. St. Rep. 554, 3 L. R. A. (N. S.) 1079. 34Farwell v. St. Paul Trust Co., 45 Minn. 495, 48 N. W. 326, 22 Am. St. Rep. 742, and cases cited. But see Boyd v. Cleveland, 21 Mass. (4 Pick.) 525. As to what expressions amount to express written waiver, see Savings Bank v. Fisher (Cal.) 41 Pac. 490; Portsmouth Sav. Bank v. Wilson, 5 App. D. C. 8. 35Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 159); Ariz. (§ 3462); 111. (§ 158); Kan. (§ 166); Md. (§ 178); Mich. (§ 161); Neb. (§ 158); N. Y. (§ 267); Ohio (§ 3176w); R. L (§ 167); Wis. (§ 1681-16). 278 PROTEST OF BILLS OF EXCHANGE. § 211 control of the holder, and not imputable to his default, miscon- duct, or negligence, but the bill must in every case be protested within a reasonable time after the cause of delay ceases to op- erate.^^ A state of war rendering protest impossible would ex- cuse a failure to protest,^''' but protest must be made within a reasonable time after the close of the war, and the resumption of commercial relations.^^ Protest is also excused if the drawer has instructed the drawee not to pay,^^ or, after issuing the bill or order, has withdrawn or intercepted the funds out of which it was to have been paid>*^ Damages Recoverable in Case of Protest. § 211. In some states damages are recoverable in case of protest. "While ordinarily protest fees are recoverable in a suit on the note on the common counts,*^ still the majority of the negotiable instruments laws do not provide for the damages recoverable in case of protest; but the "Wisconsin law provides that where any bill of exchange drawn or indorsed within the state, and payable without th-G limits of the United States, shall be duly protested for nonacceptance or nonpayment, the party liable for the contents of such bill shall, on due notice and demand thereof, pay the seSame sections of negotiable instruments laws as last above cited. For provisions of charter of Greater New York as to presentment and protest of commercial paper during an epidemic in city, see ante, chapter Vn, note 29. 37House V. Adams, 48 Pa. St. 261, 86 Am. Dec. 588. And see Peters V. Hobbs, 25 Ark. 67, 91 Am. Dec. 529; Bynum v. Apperson, 56 Tenn. (9 Heisk.) 632. But see United States v. Barker, Fed. Gas. No. 14,519. 38James v. Wade, 21 La. Ann. 548; Lane v. Bank of West Tennessee, 56 Tenn. (9 Heisk.) 419. 39Neederer v. Barber, Fed. Gas. No. 10,079; Manning v. Maroney, 87 Ala. 563, 6 So. 343, 13 Am. St. Rep. 67. See, also, Ghild v. Moore, 6 N. H. 93. 40See Rhett v. Poe, 43 U. S. (2 How.) 457, 11 Law. Ed. 167; Lilley V. Miller, 2 Nott & McG. (S. G.) 257. "First Nat. Bank of El Paso v. Miller, 235 111. 135, 85 N. E. 312. § 211 DAMAGES. 279 same at the current rate of exchange at the time of demand, and damages at the rate of five per cent upon the contents thereof, together with the interest on said contents, to be computed from the date of the protest, and that said amounts shall be in full of all damages, charges, and expenses.** The Wisconsin law further provides that if any bill of exchange drawn upon any person or corporation out of the state, but within some state or territory of the United States, shall be duly protested for nonacceptance or nonpayment, the drawer or indorser thereof, after due notice, ''shall pay said bill, with legal interest, according to its tenor, and five per cent damages, together with costs and charges of protest. ' ' *3 ^Negotiable Inst. Law, § 1682. *3Negotiable Inst. Law, § 1683. In the states, other than Wisconsin, that have adopted the negotiable instruments law, the matter of damages on protest is regulated by other statutes. Colorado, Mills Ann. St. §§ 241, 242; Connecticut, Gen. St. 1864; District of Columbia, Comp. St. c. 8, §§ 11, 13; Maryland, Pub. Gen. Laws, art. 13, §§ 1, 4; Massachusetts, Pub. St. c. 11, §§ 18, 20, 21; New York, 1 Rev. St. p. 770, §§ 18, 23; North Carolina, Code, § 48; North Dakota, Rev. Code, §§ 4956, 4957; Oregon, Hills Ann. Laws, §§ 3195, 3196; Rhode Island, Pub. St. c. 166, §§ 1, 3; Tennessee, Code, §§ 3512, 3513; Virginia, Code, § 2851. CHAPTER XIV. NOTICE OF DISHONOR. § 212. Necessity. § 213. When Need Not be Given Drawer. § 214. When Need Not be Given Indorser. § 215. By Whom Given. § 216. May be Given by Agent. § 217. Notice Where Instrument is in Agent's Hands. § 218. Parties Protected — Notice Given by or on Behalf of Holder. 5 219. Same — Notice Given by or on Behalf of Party Entitled to Give Notice. § 220. To Whom Given. § 221. When Parties Are Dead. i 222. When Parties are Partners. } 223. Joint Parties Not Partners. ^ 224. Notice to Bankrupt or Insolvent. ^ 225. Form and Requisites. 5 226. Sufficiency of Terms and Effect of Misdescription. 5 227. How Given. J 228. By Mail. a 229. Time Within Which Notice Must Be Given. § 230. Parties Residing in the Same Place. § 231. Parties Residing in Different Places. § 232. Notice to Antecedent Party. § 233. Notice to Principal by Agent. § 234. Place Where Notice Must be Sent. § 235. Actual Receipt Sufficient. § 236. Dispensing With Notice. ^ 237. Instruments Dishonored by NonacceptancCv § 238. Waiver of Notice. § 239. Waiver of Protest. § 240. Parties Affected by Waiver. § 241. Excusable Delay. § 242. Effect of Omission to Give Notice. 280 ^ 212 NECESSITY. 281 Necessity. § 212. Except as herein otherwise stated, when a negotiable in- strument has been dishonored by nonacceptance or non- payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged. As a general rule, where a negotiable instrument has been dis- honored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser,^ and any drawer or indorser to whom such notice is not given is discharged.^ The fact that the holder is excused from presenting the note for pay- ment does not relieve him from the duty of giving notice of dis- honor if he wishes to hold an indorser.^ The burden of proving that due notice was given is on the holder.* ' iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 89); Ariz. (§ 3392); 111. (§ 88); Kan. (§ 96); Md. (§ 108); Mich. (§ 91); Neb. (§ 88); N. Y. (§ 160); Ohio (§ 3174g); R. I. (§ 97); Wis. (§ 1678-19). Bank of Vergennes v. Cameron, 7 Barb. (N. Y.) 143; Long v. Stephen- son, 72 N. C. 569. 2Same sections of negotiable instruments laws as last above cited. ■ Allen V. Eldred, 50 Wis. 132, 6 N. W. 565; Smith v. Miller, 43 N. Y. 171, 3 Am. Rep. 690. Drawer. Bacigalupo v. Parrilli, 112 N. Y. Supp. 1040. Indorsers. Deahy v. Cloquet, 28 R. I. 338, 67 Atl. 421, 14 L. R. A. (N. S.) 847; Rockfield v. First Nat. Bank, 11 Ohio St. 311, 83 N. E. 392, 14 L. R. A. (N. S.) 842; J. W. Perry Co. v. Taylor Bros., 148 N. C. 362, 62 S. E. 423; Moore v. Alexander, 63 App. Div. 100, 71 N. Y. Supp. 420; Guttman v. Abbott, 110 N. Y. Supp. 376; Galbraith v. Shcpard, 43 Wash. 698, 86 Pac. 1113; First Nat. Bank v. Currie, 147 Mich. 72, 13 Det. Leg. N. 965, 110 N. W. 499, 118 Am. St. Rep. 537, 9 L. R. A. (N. S.) 1698; Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886. Complaint must allege notice or excuse. Ewald v. Faulhaber Stable Co., 55 Misc. 275, 105 N. Y. Supp. 114. SReed v. Spear, 107 App. Div. 144, 94 N. Y. Supp. 1007. 4In the absence of proof of notice of dishonor given drawer, judgment for plaintiff cannot be sustained. Kuflick v. Glasser, 114 N. Y. Supp. 870. The indorser alleging in his answer that no notice of dishonor was given, the burden is on the holder to show that due notice was 282 NOTICE OF DISHONOR. §213 Same — Notice to guarantor or surety. As to the right of a guarantor to notice, it has been said, after a careful review of the authorities: "We conclude the rule to be that a guarantor (whose indorsement is not in blank), who is not a party to the note, is liable at the suit of the payee, with- out any proof of demand and notice of nonpayment, or use of diligence against the maker. If, however, in an action by the payee against the guarantor, the guarantor can show affirma- tively that he has sustained damages from the want of such no- tice or diligence, he has a right to make such showing as a de- fense pro tanto to the plaintiff's action. "^ The court in that case also deduces the following conclusion from the opinion of the court in an early case: "That, where the maker of a note is solvent at its maturity, notice of nonpayment should be given to the guarantor, and that the latter, under such circumstances, may avail himself of the want of notice of nonpayment; but it places the burden of proving solvency and of injury from want of notice upon the guarantor."^ In a case arising under the negotiable instruments act, a surety was held not discharged by failure to give him notice.'^ When Notice Need Not be Given Drawee. § 213. Notice of dishonor is not required to be given to the drawer in either of the following cases : given. Fuller Buggy Co. v. Waldron, 112 App. Div. 814, 99 N. Y. Supp. 561. sSabin v. Harris, 12 Iowa, 87. See, also, Heaton v. Hulbert, 3 Scam. (111.) 489. Where the guaranty of a note is absolute, no demand or exhaustion of the maker is required, nor any notice required of accept- ance or default. Elgin City Banking Co. v. Hall (Tenn.) 108 S. W. 1068. Whether the guaranty of a note stipulates that the maker will pay, or whether it stipulates that the guarantor will pay, the undertaking is absolute, whether the maker is solvent or not, and the guarantor may pay or see that it is paid. Id. 6Gibbs V. Cannon, 9 Serg. & R. (Pa.) 198, 11 Am. Dec. 699. 7Rouse V. Wooten, 140 N. C. 557, 53 S. E. 430, 111 Am. St. Rep. 875. §213 NECESSITY AS TO DRAWER. 283 1. When the drawer and drawee are the same person; 2. When the drawee is a fictitious person or a person not having capacity to contract; 3. When the drawer is the person to whom the instru- ment is presented for payment ; 4. Where the drawer has no right to expect or require that the drawee or acceptor will honor the instru- ment; 5. Where the drawer has countermanded payment. Notice of dishonor need not be given to the drawer in the fol- lowing cases: Where the drawer and the drawee is the same person ; ^ where the drawee is a fictitious person, or a person not having capacity to contract ; ^ where the drawer is the person to whom the instrument is presented for payment ; ^° where the drawer has no right to expect or require that the drawee or ac- ceptor will honor the instrument ; ^^ and where the drawer has countermanded payment.^^ 8Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 114); Ariz. (§ 3417); 111. (§ 113); Kan. (§ 121); Md. (§ 133); Mich. (§ 116); Neb. (§ 113); N. Y. (§ 185); Ohio (§ 3175e); R. I. (§ 122); Wis. (§ 1678-44). Fairchild v. Ogdensburgh, C. & R. Co., IS N. Y. 337, 69 Am. Dec. 606; Chicago, C. & L. R. Co. v. West, 37 Ind. 211. ^Subdivision 2 of same sections of negotiable instruments laws as last above cited. ^^Subdivision 3, same sections of negotiable instruments laws as last above cited. Adler v. Levinson, 65 Misc. 514, 120 N. Y. Supp. 67. ^Subdivision 4, same sections of negotiable instruments laws as last above cited. As where drawer has no funds in hands of drawee. Culver v. Marks, 122 Ind. 554, 23 N. E. 1068, 17 Am. St. Rep. Zll , 7 L. R. A. 489; Emery v. Hobson, 63 Me. 32; Rhett v. Poe, 43 U. S. (2 How.) 457; Cassel v. Regierer, 114 N. Y. Supp. 601. But see Life Ins. Co. v. Pendleton, 112 U. S. 708, 28 Law. Ed. 866, holding that presentment is necessary, even though tlie drawer has no funds in the hands of the drawee, if he has 284 NOTICE OF DISHONOR. § 2ii When Notice Need Not Be Given Indorsee. § 214. Notice of dishonor is not required to be given to an in- dorser in either of the following cases : 1. Where the drawee is a fictitious person or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the instrument ; 2. Where the indorser is the person to whom the in- strument is presented for payment; 3. Where the instrument was made or accepted for his accommodation. Similar rules apply to indorsers, and notice is not required to be given to an indorser if the drawee is a fictitious person, or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed ; ^^ nor is it required if the indorser is the person to whom the instrument is presented for payment,^* nor where the instrument was made or accepted for reason to believe that the bill will be accepted. As to the right of the drawer to notice of dishonor where the bill was accepted for his accom- modation, see McLaren v. Marine Bank of Georgia, 52 Ga. 131; Barbaroux V. Waters, 44 Mass. (3 Mete.) 304; Ross v. Bedell, 12 N. Y. Super Ct. (5 Duer) 462. An accommodation drawer is entitled to notice. Sherrod V. Rhodes, 5 Ala. 683; Merchants' Bank v. Easley, 44 Mo. 286, 100 Am. Dec. 287. i2Subdivision 5, same sections of negotiable instruments laws as last above cited. Jacks V. Darrin, 3 E. D. Smith (N. Y.) 557; Purchase v. Mattison, 13 N. Y. Super. Ct. (6 Duer) 587; Lilley v. Miller, 2 Nott & McC. (S. C.) 257. i3Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 115); Ariz. (§ 3418); 111. (§ 114); Kan. (§ 122); Md. (§ 134); Mich. (§ 117); Neb. (§ 114); N. Y. (§ 186); Ohio (§ 3175f); R. I. (§ 123); Wis. (§ 1678-45). i*Subdivision 2, same sections of negotiable instruments laws as last above cited. ^21/ BY WHOM GIVEN. 285 his accommodation.15 But an indorser who signs for the accom- modation of another party to the paper is entitled to notice." By Whom Given. § 215. The notice may be given by or on behalf of the holder, or by or on behalf of any party to the instrument who might be compelled to pay it to the holder, and who, upon taking it up, would have a right to reimbursement from the party to whom the notice is given. § 216. Notice of dishonor may be given by an a^ent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not. § 217. Where the instrument has been dishonored in the hands of an agent, he may either himself give notice to the par- ties liable thereon, or he may give notice to his principal. Notice of dishonor may be given b}^ or on behalf of the holder, or by or on behalf of any party to the instrument who might be compelled to pay it to the holder, and who, on taking it up, would have a right to reimbursement from the party to whom notice is In re Swift, 106 Fed. 65. See Hull v. Myers, 90 Ga. 674, 16 S. E. 653, holding that if the indorser has full control of the payer's business, and his relation to him is such that it is his duty to see that the note is provided for, he is not entitled to notice. isSubdivision 3, same sections of negotiable instruments laws as last above cited. Reid V. Morrison, 2 Watts & S. (Pa.) 401. leMercantile Bank v. Busby (Tenn.) 113 S. W. 390; French v. Bank of Columbia, 4 Cranch, 141; Perry v. Friend, 57 Ark. 437, 21 S. W. 1065; Apple V. Lesser, 93 Ga. 749, 21 S. E. 171; Sawyer v. Brownell, 13 R. I. 141, where the note was payable on demand, with interest. An accommo- dation indorser of a draft is entitled to notice of dishonor where, prior to his indorsement, the draft had been altered by changing the name of the payee, and raising the amount. Susquehanna Val. Bank v. Loomis, 85 N. Y. 207, 39 Am. Rep. 652. 286 NOTICE OF DISHONOR. §217 given.^'^ The object of requiring the notice to come from the holder is to enable him, as the person chiefly interested, to fix or waive the liabilities of the indorsers.^^ As a general rule, no- tice cannot be given by a total stranger,^^ though it may be given by a notary ^o or his clerk.^i Except where he is acting as the agent for a holder, the maker cannot give a valid notice of pro- test to an accommodation indorser.22 Notice is essential; mere knowledge by the indorser of nonpayment is not sufficient.^^ May be given by agent. Notice of dishonor may be given by an agent, either in his own, or in the name of any party entitled to give notice, whether that party be his principal or not.^* One who takes a note for i7Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 90); Ariz. (§ 3393); Ill.(§ 89); Kan. (§ 97); Md. (§ 109); Mich. (§ 92); Neb. (§ 89); N. Y. (§ 161); Ohio (§ 3174h); R. I. (§ 98); Wis. (§ 1678-20). Cromer v. Piatt, 37 Mich. 132, 26 Am. Rep. 503; Stanton v. Blossom, 14 Mass. 116; Staflford v. Yates, 18 Johns. (N. Y.) 327; Marshall v. Sonne- man, 216 Pa. 65, 64 Atl. 874. iSHarris v. Robinson, 45 U. S. (4 How.) 336, 11 Law. Ed. 133. i9Lawrance v. Miller, 16 N. Y. 235; Chanoine v. Fowler, 3 Wend. (N. Y.) 173; Brower v. Wooten, 4 N. C. 507. 20Burbank v. Beach, 15 Barb. (N. Y.) 326; Renick v. Robbins, 28 Mo. 339. But in giving such notice, a notary does not act in his official capacity, but merely as an agent. Bank of Linsborg v. Ober, 31 Kan. 559, 3 Pac. 324; Swayze v. Britton, 17 Kan. 625. 2iMunroe v. Woodrufif, 17 Md. 159; Cowperthwaite v. Sheffield, 3 N. Y. Super. Ct. 416. 22Traders' Nat. Bank v. Jones, 104 App. Div. 433, 93 N. Y. Supp. 768. 23Marshall v. Sonneman, 216 Pa. 65, 64 Atl. 874. 24Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 91); Ariz. (§ 3394); 111. (§90); Kan. (§ 98); Md. (§ 110); Mich. (§ 93); Neb. (§ 90); N. Y. (§ 162); Ohio (§ 3174J); R. L (§ 99); Wis. (§ 1678-21). Notice by notary as agent, see supra, note 20. Notice may be given in agent's name. Drexler v. McGlynn, 99 Cal. 143, 33 Pac. 773. Cashier of bank which is the holder may give notice. Bank of State of Missouri V. Vaughan, 36 Mo. 90. §219 BENEFIT OF. 287 collection is an agent for the purpose of giving notice,^ and the owner of a note who has placed it with another for collection is not obligated either to himself notify the indorser of dishonor of the note or to make inquiries as to where the indorser received his mail.26 If the instrument has been dishonored in the hands of an agent, he may either himself give notice to the parties there- on, or he may give notice to his principal.^^ § 218. Where notice is given by or on behalf of the holder, it inures for the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given. § 219. Where notice is given by or on behalf of a party entitled to give notice, it inures for the benefit of the holder and all parties subsequent to the party to whom notice is given. Where notice is given by or on behalf of the holder, it inures to the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given.^^ 25Mead v. Engs, 5 Cow. (N. Y.) 303; Burnham v. Webster, 19 Me. 232; Blakeslee v. Hewett, 76 Wis. 341, 44 N. W. 1105. Bank holding for collection may give notice of dishonor. Manchester Bank v. Fellows, 28 N. H. 302; Mead v. Engs, 5 Cow. (N. Y.) 303; Sheldon v. Benham, 4 Hill (N. Y.) 129, 40 Am. Dec. 271. 26Vogel V. Starr, 132 Mo. App. 430, 112 S. W. 27. 27Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 94); Ariz. (§ 3397); 111. (§ 93); Kan. (§ 101) ;Md. (§ 113); Mich. (§ 96); Neb. (§ 93); N. Y. (§ 165); Ohio (§ 3174e); R. I. (§ 102); Wis. (§ 1678-24). Bank of United States v. Goddard, 5 Mason, 366, Fed. Cas. No. 917; Foster v. McDonald, 3 Ala. 34; First Nat. Bank v. Smith, 132 Mass. 227; Bank of United States v. Davis, 2 Hill (N. Y.) 451; Hill v. Planters' Bank, 21 Tenn. (2 Humph.) 670. 28Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utnh. Va.. Wash., W. Va., Wyo. (§ 92); Ariz. (§ 3395); 111. (§ 91); 288 NOTICE OF DISHONOR. § 220 Where notice is given by or on behalf of a party entitled to give notice, it inures to the benefit of the holder and all parties sub- sequent to the party to whom notice is given.^^ iTo "Whom Given. § 220. Notice of dishonor may be given either to the party him- self or to his agent in that behalf. § 221. When any party is dead, and his death is known to the party giving notice, the notice must be given to a per- sonal representative, if there be one, and if with reason- able diligence he can be found. If there be no personal representative, notice may be sent to the last residence or last place of business of the deceased. § 222. Where the parties to be notified are partners, notice to any one partner is notice to the firm, even though there has been a dissolution. § 223. Notice to joint parties who are not partners must be given to each of them, unless one of them has authority to re- ceive such notice for the others. § 224. Where a party has been adjudged a bankrupt or an in- solvent, or has made an assignment for the benefit of creditors, notice may be given either to the party him- self or to his trustees or assignee. Kan. (§ 99); Md. (§ 111); Mich. (§ 94); Neb. (§ 91); N. Y. (§ 163); Ohio (§ 3174J); R. I. (§ 100); Wis. (§ 1678-22). Marr v. Johnson, 17 Tenn. (9 Yerg.) 1. 29Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 93); Ariz. (§ 3396); 111. (§ 92); Kan. (§ 100); Md. (§ 112); Mich. (§ 95); Neb. (§ 92); N. Y. (§ 164); Obio (§ 3174k); R. L (§ 101); Wis. (§ 1678-23). Union Bank v. Grimshaw, 8 La. 205; Brailsford v. Williams, 15 Md. L50, 74 Am. Dec. 559; Linn v. Horton, 17 Wis. 151. § 2_-4: TO WHOM GIVEN. 289 To whom notice given — Paity or agent. Notice of dishonor may be given either to the party l^imsclf or to his agent in that behalf.^" Same — Personal representative of deceased party. When any party to be notified is dead, and his death is known to tlie party giN'ing notice, the notice must be given to a personal representative of the deceased, if there be one, and if, with rea- sonable diligence, he can be found.^^ If there is no personal rep- 30Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 97); Ariz (§ 3400); 111. (§ 96); Kan. (§ 104); Md. (§ 116); Mich. (§ 99); Neb. (§ 96); N. Y. (§ 168); Ohio (§ 3174-0); R. I. (§ 105); Wis. (§ 1678-27). Fassin v. Hubbard, 55 N. Y. 465, where it was held that service on the liquidating agent of a firm was good. Death of the principal revoking agency, see note 31, infra. siNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 98); Ariz. (§ 3401); 111. (§ 97); Kan. (§ 105); Md. (§ 117); Mich. (§ 100); Neb. (§ 97); N. Y. (§ 169); Ohio (§ 3174p); R. I.' (§ 106); Wis. (§ 1678-28). Dodson V. Taylor, 56 N. J. Law, 11, 28 Atl. 316; Merchants' Bank v. Birch, 17 Johns. (N. Y.) 25, 8 Am. Dec. 367; Cayuga County Bank v. Bennett, 5 Hill (N. Y.) 236, where the holder, knowing the indorser to be dead, sent the notice by mail directed to the deceased. An ex- cutor named in the will, but yet not approved by the court, is a "personal representative," within the rule. Drexler v. McGlynn, 99 Cal. 143, 33 Pac. 773. The agency to receive notice is revoked by the death of the principal, and notice should thereafter be given to the personal representative. Brent v. Washington Bank, 2 Cranch C. C. 517, Fed. Cas. No. 1,834; Bank of Washington v. Pierson, 2 Cranch C. C. 685, Fed. Cas. No. 953. Notice to an executor after the appointment of a special administrator is not sufficient. Goodnow v. Warren, 122 Mass. 19, 23 Am. Rep. 289. A notice sent to the "estate of" a deceased indorser at his last residence was held sufficient in Bank of Port Jervis v. Darling, 91 Hun, 236, 36 N. Y. Supp. 153, and one addressed to the "legal representative" of a deceased indorser was also held sufficient in Pillow v. Hardeman, 22 Tenn. (3 Humph.) 538, 39 Am. Dec. 195. Where an indorser died before its maturity, a notice given two days after maturity to the executor is not sufficient to bind the estate. Deininger v. Miller, 7 App. Div. 409, 40 Opp. — Sel. — 19 290 NOTICE OF DISHONOR. ^§224 resentative, notice may be sent to the last residence or last place of business of the deceased.^^ Same — Notice to partner is notice to firm. "Where the parties to be notified are partners, notice to any one partner is notice to the firm, though the firm has been dissolved* Same — Joint parties not partners must each be notified. Notice to joint parties who are not partners must be given to each of them, unless one of them has authority to receive such no- tice for the others.^* N. Y. Supp. 195. Notice to one of several personal representatives is good. Beals v. Peck, 12 Barb. (N. Y.) 245. 32Same sections of negotiable instruments laws as last above cited. Dodson V. Taylor, 56 N. J. Law, 11, 28 Atl. 316. Mailing notice of dishonor to indorser, known to be dead, directed to a post office where he did not receive his mail while living, is insufficient. Merchants' Bank of Canada v. Brown, 86 App. Div. 599, 83 N. Y. Supp. 1037. 33Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D,, Okl, Or., Pa., Tenn., Utah. Va., Wash., W. Va., Wyo. (§ 99); Ariz (§ 3402); 111. (§ 98); Kan. (§ 106); Md. (§ 118); Mich. (§ 101); Neb. (§ 98); N. Y. (§ 170); Ohio (§ 3174q); R. I. (§ 107); Wis. (§ 1678-29). Coster V. Thomason, 19 Ala. 717; Magee v. Dunbar, 5 La. 711; Fourth Nat. Bank v. Altheimer, 91 Mo. 190, 3 S. W. 858; Hibbard v. Matthews, 54 N. Y. 43, 13 Am. Rep. 562. Notice to a cashier of a bank who was a- member of a firm, acquired in the course of the business of the bank, is notice to the firm. Citizens' Sav. Bank v. Hays, 96 Ky. 365, 29 S. W. 20. Notice to surviving partner is sufficient. Dabney v. Stidger, 12 Miss. (4 Smedes & M.) 749; Cocke v. Bank of Tennessee, 25 Tenn. (5 Humph.) 51. A notarial certificate to control which no evidence is ofifered furnishes sufficient proof of the maker's failure to pay the note at maturity, and of notice of dishonor to a partnership indorser, even if the partnership had been dissolved, and defendant partner not informed by his former partner of the protest. Feigenspan v. McDonnell, 201 Mass. 341, 87 N. E. 624. 34Neg. Inst. Laws Colo., Conn., D. C. Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 100); Ariz. (§ 3403); 111. §225 FORM AND REQUISITES. 291 Same — Notice to bankrupt or insolvent. Where a party to be notified has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, notice may be given either to such party himself, or to his trustee or assignee.^^ Form and Requisites, § 225. The notice may be in writing or merely oral, and may be given in any terms which sufficiently identify the in- strument, and indicate that it has been dishonored by nonacceptance or nonpayment. (§ 99); Kan. (§ 107); Md. (§ 119); Mich. (§ 102); Neb. (§ 99); N. Y. (§ 171); Ohio (§ 3174r); R. I. (§ 108); Wis. (§ 1678-30). Shepard v. Hawley, 1 Conn. 367, 6 Am. Dec. 244; State Bank v. Slaught- er, 7 Blackf. (Ind.) 132; Peoples' Bank v. Keech, 26 Md. 521, 90 Am. Dec. 118; Willis v. Green, 5 Hill (N. Y.) 232, 40 Am. Dec. 351. In Ken- tucky, notice to one joint indorser is notice to all. Dodge v. Bank of Kentucky, 9 Ky. (2 A. K. Marsh) 610; Higgins v. Morrison, 34 Ky. (4 Dana) 100. Notice to one of several successive indorsers is sufficient to bind him. City Nat. Bank v. Clinton County Nat. Bank, 49 Ohio St. 351, 30 N. E. 958. 35Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 101); Ariz. (§ 3404); 111. (§ 100); Kan. (§ 108); Md. (§ 120); Mich. (§ 103); Neb. (§ 100); N. Y. (§ 172); Ohio (§ 3174s); R. I. (§ 109); Wis. (§ 1678-31): Notice to assignee, see Callahan v. Bank of Kentucky, 82 Ky. 231; American Nat. Bank v. Junk Bros. Lumiber & Mfg. Co., 94 Tenn. 624, 30 S. W. 753, 28 L. R. A. 492. Notice to an indorser is sufficient, though he has assigned for the benefit of creditors. Donnell v. Louis County Sav. Bank,' 80 Mo. 165. In Ohio, notice to an indorser's assignee for creditors was not sufFicient. House v. Vinton Nat. Bank, 43 Ohio St. 346, 1 N. E. 129, 54 Am. Rep. 813. 292 NOTICE OF DISHONOR. §226 § 226. A written notice need not be signed, and an insiTfficient written notice may be supplemented and validated by ver- bal communication. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby. Notice of dishonor may be in writing, or merely oral,^^ and should be addressed to the person sought to be held.^^ A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication.^^ Mere knowledge of the facts is not equivalent to notice,^^ though such knowledge was acquired by the indorsers in their capacity as ad- ministrators of the estate of the drawer,*° Sufficiency of terms and effect of misdescription. Notice of dishonor may be given in any terms which sufficiently identify the instrument, and indicate that it has been dishonored by nonacceptance or nonpayment.*^ A misdescription of the in- 36Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 96); Ariz. (§ 3399); 111. (§ 95); Kan. (§ 103); Md. (§ 115); Mich. (§ 98); Neb. (§ 95); N. Y. (§ 167); Ohio (§ 3174n); R. L (§ 104); Wis. (§ 1678-26). Pierce v. Schraden, 55 Cal. 406; First Nat. Bank v. Hatch, 78 Mo. 13; Cuyler v. Stevens, 4 Wend. (N. Y.) 566; Second Nat. Bank v. Smith, 118 Wis. 18, 94 N. W. 664. 3VMarshall v. Sonneman, 216 Pa. 65, 64 Atl. 874. ssNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 95); Ariz (§ 3398); 111. (§ 94); Kan. (§ 102); Md. (§ 114); Mich. (§ 97); Neb. (§ 94); N. Y. (§ 166); Ohio (§ 3174m); R. I. (§ 103); Wis. (§ 1678-25). Formerly in New York an unsigned notice was invalid. Walmsley V. Acton, 44 Barb. (N. Y.) 312. Also in Tennessee. Peoples' Nat. ,Bank v. Dibrell, 91 Tenn. 301, 18 S. W. 626. A printed signature is good. Sussex Bank v. Baldwin, 17 N. J. Law, 487. 39Tindal v. Brown, 1 Term R. 167. 40Juniata Bank v. Hale, 16 Serg. & R. (Pa.) 157, 16 Am. Dec. 558. *iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. §227 HOW GIVEN. 293 strument in the notice docs not vitiate the notice unless the party to whom the notice is given is in fact misled thereby .*2 Hov7 Given. § 227. The notice may in all cases be given by delivering it per- sonally or through the mails. Tenn., Utah, Va., Wash., W. Va., Wyo (§ 96); Ariz. (§ 3399); 111. (§ 95); Kan. (§ 103); Md. (§ 115); Mich. (§ 98); Neb. (§ 95); N. Y. (§ 167); Ohio (§ 3174n); R. I. (§ 104); Wis. (§ 1678-26). Second Nat. Bank v. Smith, 118 Wis. 18, 94 N. W. 664; Kilgore V. Buckley, 14 Conn. 362; Spann v. Baltzell, 1 Fla. 301, 46 Am. Dec. 346; Sasscer v. Farmers' Bank, 4 Md. 409; Ross v. Planters' Bank, 24 Tenn. (5 Humph.) 335. As to the sufficiency of the recital of the date, see Brown v. Jones, 125 Ind. 375, 25 N. E. 452, 21 Am. St. Rep. 227; Artisans' Bank v. Backus, 36 N. Y. 100. The name of the maker or draw- er must be properly given in the notice. Home Ins. Co. v. Green, 19 N. Y. 518, 75 Am. Dec. 361. But see Gill v. Palmer, 29 Conn. 54. For illegible name, see McGeorge v. Chapman, 45 N. J. Law, 395. A mistake in the recital of the time of payment of the instrument is not fatal. Gates v. Beecher, 60 N. Y. 518, 19 Am. Rep. 207; Bank of Cooperstown v. Woods, 28 N. Y. 561. Nor is a mistake in the recital of the amount payable. Bank of Alexandria v. Swann, 34 U. S. (9 Pet.) 33, 9 Law. Ed. 40; Cayuga County Bank v. Warden, 1 N. Y. 413, where a note for $600 was de- scribed as one for $300. A notice to an indorser of one of a series of corporate notes, numbered differently, is not defective for a failure to state the number of the note. Hodges v. Shuler, 22 N. Y. 114. The notice mu&t show that the instrument was presented for payment or acceptance, and was dishonored. Armstrong v. Thurston, 11 Md. 148; Dole v. Gold, S Barb. (N. Y.) 490. For notices held sufficient in this respect, see Cook V. Litchfield, 9 N. Y. 279; Reynolds v. Appleman, 41 Md. 615; Clark v. Eldridge, 54 Mass. (13 Mete.) 96. For notices held insufficient in this respect, see Arnold v. Kinloch, 50 Barb. (N. Y.) 44; Winn v. Alden, 4 Denio (N. Y.) 163; Page v. Gilbert, 60 Me. 485. Notice containing copy of note and declaring that payment has been demanded and refused held sufficient. Zollner v. Moffitt, 222 Pa. 644, 72 Atl. 285. 42Neg. Inst. Laws Colo., Conn., D. C, Fla,, Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 95); Ariz. (§ 3398); 111. (§ 94); Kan. (§ 102); Md. (§ 114); Mich. (§ 97); Neb. (§ 94); N. Y. (§ 166); Ohio (§ 3174mj; R. I. (§ 103); Wis. (§ 1678-25). 294 NOTICE OF DISHONOR. § 228 § 228. Where notice of dishonor is duly addressed and depos- ited in the post office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails. Notice is deemed to have been deposited in the post office when deposited in any branch post office or in any letter box under the control of the post office department. Notice of dishonor may in all cases be given by delivering it personally, or through the mails.*^ Personal service being relied upon, the evidence must show either actual personal service or an ordinarily intelligent, diligent effort to make personal service upon the indorser, either at his place of business during business hours, or at his residence if he has no place of business; but if he be absent, it is not necessary to call a second time, and the notice may in that event be left with any one found in charge, or if there be no one in charge, or no one there, then the giving of the notice is deemed to be waived.^* Personal service is not required, but constructive service will suffice where reasonable dil- igence is exercised to make it in the manner best adapted to con- vey actual notice. ^^ Formerly, in most of the states that have adopted the negotiable instruments laws, notice could not be sent by mail where the parties resided in the same tow^n or city.*^ See Kilg^ore v. Bulkley, 14 Conn. 362, and other cases cited in note 41, supra. 43Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 96); Ariz. (§ 3399); 111. (§ 95); Kan. (§ 103); Md. (§ 115); Mich. (§ 98); Neb. (§ 95); N. Y. (§ 167); Ohio (§ 3174n); R. I. (§ 104); Wis. (§ 1678-26). Zollner v. Moffitt, 222 Pa. 644, 72 Atl. 285. •I'lAmerican Exchange Nat. Bank v. American Hotel Victoria Co., 103 App. Div. 372, 92 N. Y. Supp. 1006. 45Vogel V. Starr, 132 Mo. App. 430, 112 S. W. 27. 46Shepard v. Hall, 1 Conn. 329; Morton v. Cammack, 11 D. C. (4 Mc- Arthur) 22; Bell v. Hagerstown Bank, 7 Gill (Md.) 216; Peirce v. Pendar, 46 Mass. (5 Mete.) 352; Sheldon v. Benham, 4 Hill (N. Y.) 129, 40 Am. Dec. 271; Costin v. Rankin, 48 N. C. (3 Jones Law) 387; Davis v. Bank of Tennessee, 36 Tenn. (4 Sneed) 390; Smith v. Hill, 6 Wis. 154. In Wisconsin, service could be made by mail if the distance was more than §228 BY MAIL. 295 Sender of notice not chargeable with miscarriage of mails. Whfere notice of dishonor is properly addressed and deposited in the post office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails.^''' What constitutes deposit of notice in post office. Notice of dishonor is deemed to have been deposited in the post office when deposited in any branch post office, or in any letter box under the control of the post office department.^^ A liberal construction of this rule renders a delivery of a duly addresed and stamped letter containing a notice to a regular letter carrier a sufficient posting of the notice.*^ But a deposit of the letter containing the notice in a private letter box is not sufficient.^" two miles. Rev. St. 1858, c. 12, § 5. Westfall v. Farwell, 13 Wis. 504. But see Rev. St. § 176. In New York (Laws 1857, c. 416) and Virginia (Code, § 2858), service could be made by mail between parties residing in the same city. 47Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 105); Ariz. (§ 3408); 111. (§ 104); Kan. (§ 112); Md. (§ 124); Mich. (§ 107); Neb. (§ 104); N. Y. (§ 176); Ohio (§ 3174w); R. L (§ 113); Wis. (§ 1678-35). Knott v. Venable, 42 Ala. 186; Dickens v. Beal, 35 U. S. (10 Pet.) 572, 9 Law. Ed. 246; Mt. Vernon Bank v. Holden, 2 R. I. 467. Notice deemed given when properly addressed and deposited in post office, though not received. Zollner v. Moffitt, 222 Pa. 644, 72 Atl. 285. Sending to directory address not sufficient diligence, see note 72, infra. *SNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§106); Ariz. (§ 3409); 111. (§ 105); Kan. (§ 113); Md. (§ 125); Mich. (§ 108); Neb. (§ 105); N. Y. (§ 177); Ohio (§ 3l74x); R. I. (§ 114); Wis. (§ 1678-36). This is the rule in Casco Nat. Bank v. Shaw, 79 Me. 376, 10 Atl. 67, 1 Am. St. Rep. .319; Greenwich Bank v. DeGroot, 7 Hun (N. .Y.) 210; Wood V. Callaghan, 61 Mich. 402, 28 N. W. 162, 1 Am. St. Rep. 597; Johnson v. Brown, 154 Mass. 105, 27 N. E. 994. 49Wynen v. Schavert, 6 Daly, 558, 55 How. Pr. (N. Y.) 156; Pearce v. Langfit, 101 Pa. 507, 47 Am. Rep. 111. eoTownsend v. Auld, 10 Misc. 343, 31 N. Y. Supp. 29. 296 NOTICE OF DISHONOR. ^ Zlid Time Within "Which Notice Must Be Given. § 229. Notice may be given as soon as the instrument is dishon- ored, and unless delay is excused as hereinafter provided, must be given within the times hereinafter specified. Notice of dishonor may be given as soon as the instrument is dishonored,^^ and must be given within the times fixed by the ne- gotiable instruments laws,^^ as shown in the next succeeding sec- tions, unless the delay is excused for the causes hereinafter set forth, § 230. Where the person giving and the person to receive notice reside in the same place, notice must be given within the following times: 1. If given at the place of business of the person to re- ceive notice, it must be given before the close of busi- ness hours on the day follov/ing; 2. If given at his residence, it must be given before the usual hours of rest on the day following ; 3. If sent by mail, it must be deposited in the post of- fice in time to reach him in the usual course on the day following. Where the person and the person to receive notice reside in the same place, notice of dishonor, if given at the place of busi- ness of the person to receive notice, must be given before the close BiNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 102); Ariz. (§ 3405); 111. (§ 101); Kan. (§ 109); Md. (§ 121); Mich. (§ 104); Neb. (§ 101); N. Y. (§ 173); Ohio (§ 3174t); R. L (§ 110); Wis. (§ 1678-32). As to premature notice where days of grace are allowed, see Guignon v. Union Trust Co., 156 111. 135, 40 N. E. 556, 47 Am. St. Rep. 186; Thorn- burg V. Emmons, 23 W. Va. 325; Pierce v. Cate, 66 Mass. (12 Cush.) 190, 59 Am. Dec. 176. 62Same sections of negotiable instruments laws as last above cited. §231 TIME FOR GIVING. 297 of business hours on the day following dishonor.^^ If gh'cn at his residence, it must be given before the usual hours of rest on the day following dishonor.^-* The negotiable instruments laws as adopted in Rhode Island provides that, in such case, notice must be given before ten o'clock in the evening of the day following dishonor.55 jf ^q-^^ \^y mail, the notice must be deposited in the post oflSce in time to reach the person to be notified, in the usual course, on the day following dishonor.^^ / § 231. Where the person giving and the person to receive notice reside in different places, the notice must be given within the following times: 1. If sent by mail, it must be deposited in the post of- fice in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day, by the next mail thereafter; 2. If given otherwise than through the post office, then within the time that notice would have been received in due course of mail, if it had been deposited in the post office within the time specified in the last subdivision. "Where the person giving, and the person to receive, notice of dishonor, reside in different places, the notice, if sent by mail, 53Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 103); Ariz. (§ 3406); 111. (§ 102); Kan. (§ 110); Md. (§ 122); Mich. (§ 105); Neb. (§ 102); N. Y (§ 174); Ohio (§ 3174v); R. I. (§ 111); Wis. (§ 1678-33). Adams v. Wright, 14 Wis. 408; Citizens' Bank v. First Nat. Bank, 135 Iowa, 605, 113 N. W. 481. siSubdivision 2, same sections of negotiable instruments laws as last above cited. • See Hallowell v. Currj^ 41 Pa. 322. Formerly, in Wisconsin, at a "rea- sonable hour." Adams v. Wright, 14 Wis. 408. 55Negotiable Inst. Law, § 111. 56Subdivision 3, same sections of negotiable instruments laws as last above cited. 298 NOTICE OF DISHONOR. §232 must be deposited in the post office in time to go by mail the day following the day of dishonor, or, if there be no mail, at a con- venient hour on that day, by the next mail thereafter." When given otherwise than through the post office, notice must be given within the time that notice would have been received in due course of mail, if it had been deposited in the post office within the time specified in the last preceding paragraph.^^ § 232. Where a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving no- tice to antecedent parties that the holder has after the dishonor. A party receiving notice of dishonor, he has, after receipt there- of, the same time for giving notice to antecedent parties that the holder has after dishonor.^^ Walters v. Brown, 15 Md. 285, 74 Am. Dec. 566; Shoemaker v. Mechan- ics Bank, 59 Pa. 79, 98 Am. Dec. 315. What constitutes deposit in post office, see ante, § 228. 57Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 104); Ariz. (§ 3407); 111. (§ 103); Kan. (§ 111); Md. (§ 123); Mich. (§ 106); Neb. (§ 103); N. Y. (§ 175); Ohio (§ 3174v); R. I. (§ 112); Wis. (§ 1678-34). Smith V. Poillon, 87 N. Y. 590, 41 Am. Rep. 402, afg. 23 Hun (N. Y.) 528; Sussex Bank v. Baldwin, 17 N. J. Law, 487; Lenox v. Roberts, 15 U. S. (2 Wheat.) 373, 4 Law. Ed. 264; Lawson v. Farmers' Bank of Salem, 1 Ohio St. 206; First Nat. Bank v. Miller, 139 Wis. 126, 120 N. W. 820. ssSubdivision 2, same sections of negotiable instruments laws as last above cited. 59Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont, Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 107); Ariz. (§ 3410); 111. (§ 106); Kan. (§ 114); Md. (§ 126); Mich. (§ 109); Neb. (§ 106); N. Y. (§ 178); Ohio (§ 3174y); R. I. (§ 115); Wis. (§ 1678-37). See Jurgens v. Wichmann, 124 App. Div. 531, 108 N. Y. Supp. 881 ; Farmer V. Rand, 16 Me. 453; National Bank v. Bradley, 117 N. C. 526, 23 S. E. 455; Shelburne Falls Nat. Bank v. Townsley, 102 Mass. 177, 3 Am. Rep. 445. See, also, First Nat. Bank v. Farneman, 93 Iowa, 161, 61 N. W. 424. For effect of intermediate agency for collection, on time required for notice to successive obligors, see Slack v. Longshaw, 8 Ky. Law Rep. §234 PLACE SENT. 299 § 233. Where the instrument has been dishonored in the hands of an agent, and, if he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal upon the receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder. The instrument being dishonored in the hands of an agent, if the latter gives notice to his principal he must do so within the time required if he were the holder, and the principal, on receipt of such notice, has himself the same time for giving notice as if the agent had been an independent holder.^^ This provision is identical with the provisions of the English Bills of Exchange Act, under which it has been held that where one branch of a country bank sent a customer's bill to a London bank for presentment, and, on the day after dishonor, the London bank sent notice by post to a branch of the country bank other than the branch from which it received the bill, but on the next day, on discovering the mistake, telegraphed notice to such branch, the notice was suf- ficient to bind an indorser.^^ Place Where Notice Must Be Sent. § 234. Where a party has added an address to his signature, no- tice of dishonor must be sent to that address ; but if he has not given such address, then the notice must be sent as follows: 166; Warren v. Gillman, 17 Me. 360; McNeil v. Wyatt, 22 Tenn. (3 Humph.) 125. 60Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 94); Ariz. (§ 3397); 111. (§ 93); Kan. (§ 101); Md. (§ 113); Mich. (§ 96); Neb. (§ 93); N. Y. (§ 165); Ohio (§ 3174-1); R. L (§ 102); Wis. (§ 1678-24). eiAct 1882 (45 & 46 Vict. c. 61, § 49, subd. 13). Fielding & Co. v. Corry [1898] 1 Q. B. 268. 300 NOTICE OF DISHONOR. § 235 1. Either to the post office nearest to his place of res- idence, or to the post office where he is accustomed to receive his letters ; or 2. If he live in one place, and have his place of business in another, notice may be sent to either place ; or 3. If he is sojourning in another place, notice may be sent to the place where he is sojourning. § 235. But where the notice is actually received by the party within the time specified in this act, it will be sufficient, though not sent in accordance with the requirements of this section. "Where a party has added an address to his signature, notice of dishonor must be sent to that address ; ^^ but if he has not given such address, then notice must be sent cither to the post office nearest to his place of residence, or to the one where he is accus- tomed to receive his letters.*"^ When the indorser lives in the 62Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl, Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 108); Ariz. (§ 3411); 111. (§ 107); Kan. (§ 115); Md. (§ 127); Mich. (§ 110); Neb. (§ 107); N. Y. (§ 179); Ohio (§ 3174z); R. I. (§ 116); Wis. (§ 1678-38). Farmers' & Merchants' Bank v. Battle, 23 Tenn. (4 Humph.) 86. But see Davenport v. Gilbert, 17 N. Y. Super. Ct. (4 Bosw.) 532, 19 N. Y. Super. Ct. (6 Bosw.) 179, and Bartlett v. Robinson, 39 N. Y. 187, where addressing a letter generally to the indorser in the "City of New York" was not sufficient, the address under the signature of the indorser having been more definite. 63Same subdivision and sections of negotiable instruments laws as last above cited. Jones V. Lewis, 8 Watts & S. (Pa.) 14; Mohlman v. McKane, 60 App. Div. 546, 69 N. Y. Supp. 1046. Service of notice of dishonor is not shown by the mere testimony of the notary that, not knowing the address of the indorser, he enclosed the notice of dishonor to a subsequent indorser with postage for forwarding the same to the prior indorser, the latter testifying that he never received it. Fuller Buggy Co. v. Waldron, 112 App. Div. 814, 99 N. Y. Supp. 561. Knowing city wheie indorser resided held insufificient to send notice addressed to indorser care of maker. E. _§235 PLACE SENT. 301 country and his post ofSce address is not known to the holder, it is the duty of the latter to make reasonable inquiries in the town or city where the bill is payable, and, in default of more specific information, to address the notice to the nearest post office.^* But the holder is not justified, in all eases, in sending the notice to the nearest post office. He must act in good faith always and with reasonable diligence to learn the place where the indorser receives his mail, and, learning it, must send the notice there, re- gardless of whether it be the nearest post office.^^ If tbe person to be notified live in one place, and have his place of busi:iess in another, notice may be sent to either.^^ If such per.'son is staying, or, as the negotiable instruments laws express it, is "sojourning," in a place other than his customary place of residence or business, the notice may be sent to such place.^'^ But the stability of residence required under the law relating to tax- ation and the settlement of paupers is not necessary when as- certaining the abode of an indorser for the pui-pose of giving no- tice to liim by mail of the dishonor of commercial paper.^^ Actual receipt is sufficient,^^^ I. Dupont de Nemour Powder Co. v. Rooney, 63 IMisc. 344, 117 N. Y. Supp. 220. eiVogel V. Starr, 132 Mo. App. 430, 112 S. W. 27. 65Vogel V. Starr, 132 Mo. App. 430, 112 S. W. 27. Where notary made inquiries of several persons, etc., and sent notice to wrong town, held notice was sufficient. Id. 66Subdivision 2, same sections of negotiable instruments laws as last above cited. Bank of Columbia v. Lawrence, 26 U. S. (1 Pet.) 578, 7 Law. Ed. 707; Simms V. Larkin, 19 Wis. 390; Phillips v. Alderson, 24 Tenn. (5 Humph.) 403. ^^Subdivision 3, same sections of negotiable instruments laws as last above cited. Williams v. Bank of United States, 27 U. S. (2 Pet.) 96, 7 Law. Ed. 30. But see Wachusett Nat. Bank v. Fairbrother, 148 Mass. 181, 19 N. E. 345, 12 Am. St. Rep. 530. esLowell Trust Co. v. Pratt, 183 Mass. 379, 67 N. E. 363. 68aSame section negotiable instruments laws as last above cited. 302 NOTICE OF DISHONOR. §236 Dispensing With, Waiver of and Excuses for Delay in Giving Notice. § 236. Notice of dishonor is dispensed with when, after the ex- ercise of reasonable diligence, it cannot be given to or does not reach the parties sought to be charged. § 237. Where due notice of dishonor by nonacceptance has been given, notice of a subsequent dishonor by nonpayment is not necessary, unless in the meantime the instrument has been accepted. As the general rule of the law merchant and of the negotiable instruments act requires notice, the failure to give notice is dis- pensed with only in the cases enumerated therein,^^ and the bur- den is on the party claiming under the negotiable instrument to excuse the failure to give notice within the provisions of this section.'^o Notice of dishonor may be dispensed with when, after the exercise of reasonable diligence, it cannot be given to, or does not reach, the parties sought to be charged.'''^ What constitutes "reasonable diligence" is a question to be decided on the facts of each case.''^ But there being no controversy over the material facts, the question whether a notary exercised reasonable dili- 69Cassell V. Regierer, 114 N. Y. Supp. 601. 70Cassell v. Regierer, 114 N. Y. Supp. 601. The mere fact of dishonor is not of itself sufficient to dispense with the requirement of notice. Id. '^iNeg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 112); Ariz. (§ 3415); 111. (§ 111); Kan. (§ 119); Md. (§ 131); Mich. (§ 114); Neb. (§ 111); N. Y. (§ 183); Ohio (§ 3175c); R. I. (§ 120); Wis. (§ 1678-42). 720n the question of reasonable diligence, see Gawtry v. Doane, 51 N. Y. 84; Bank of Utica v. Bender, 21 Wend. (N. Y.) 643, 34 Am. Dec. 281; Shepard v. Citizens' Ins. Co., 8 Mo. 272. Looking for name in city directory, without other inquiry, is not reasonable diligence. Cumming V. Roderick, 28 App. Div. 253, 51 N. Y. Supp. 1053; Bacon v. Hanna, 137 N. Y. 379, 33 N. E. 303, 20 L. R. A. 495, afg. 17 N. Y. Supp. 430; Lawrence v. Miller, 16 N. Y. 235; Baer v. Leppert, 12 Hun (N. Y.) 516. A state of war excuses notice if sufficient to prevent the conduct §240 WAIVER OF. 303 gence in giving a notice of dishonor to an indorscr is a question of law.'^ The fact that the principal obligor is dead does not re- lieve the holder from the duty to give notice to the indorserJ* Notice of dishonor by nonpayment is also dispensed with where due notice of a prior dishonor by nonacceptance has been given, unless in the meantime the instrument has been accepted.'^^ § 238. Notice of dishonor may be waived, either before the time of giving notice has ajrrived, or after the omission to give due notice, and the waiver may be express or im- plied. § 239. A waiver of protest is deemed to be a waiver of notice of dishonor. § 240. Where the waiver is embodied in the instrument itself, it is binding upon all parties ; but where it is written above the signature of an indorser, it binds him only. Notice of dishonor may be waived '^^ either before the time for giving notice has arrived, or after the omission to give due no- of business through the mails. Morgan v. Bank of Louisville, 67 Ky. (4 Bush) 82; House v. Adams, 48 Pa., 261, 86 Am. Dec. 588. 73Vogel V. Starr, 132 Mo. App. 430, 112 S. W. 27. 74Reed v. Spear, 107 App. Div. 144, 94 N. Y. Supp. 1007. 75Neg. Inst. Laws Colo., Conn., D. C., Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 116); Ariz. (§ 3419); 111. (§ 115); Kan. (§ 123); Md. (§ 135); Mich. (§ 118); Neb. (§ 115); N. Y. (§ 187); Ohio (§ 3175g); R. I. (§ 124); Wis. (§ 1678-46). ''SNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 109); Ariz. (§ 3412); 111. (§ 108); Kan. .(§ 116); Md. (§ 128); Mich. (§ 111); Neb. (§ 108); N. Y. (§ 180); Ohio (§ 3175); R. I. (§ 117); Wis. (§ 1678-39). Toole V. Crafts, 193 Mass. 110, 78 N. E. 775, 118 Am. St. Rep. 455. Ex- pressly or impliedly. Torbert v. Montague, 38 Colo. 325, 87 Pac. 1145; Stanley v. McElrath, 86 Cal. 449, 25 Pac. 16, 10 L. R. A. 545. See, also, Robinson v. Barnett, 19 Fla. 670, 45 Am. Rep. 24. ;j04 NOTICE OF DISHONOR. § 240 tice,'^'^ and the waiver may be express or implied,'''^ for the statute has not changed the law respecting waiver,'^^ and having knowledge of the facts, ignorance, in the absence of fraud, of their legal effect, as releasing him from liability, does not save him from the consequences of the waiver.^'' A promise to pay made by an indorser after dishonor, and with knowledge that he had been released by a failure to give him no- tice of dishonor, is a waiver of such notice.^^ A waiver of protest is deemed to be a waiver of notice of dishonor.^^ Parties affected.. Where the waiver is embodied in the instrument, it is binding 'i"'Same sections of negotiable instruments laws as last above cited. Barclay v. Weaver, 19 Pa. 396, 57 Am. Dec. 661. ''SSame sections of negotiable instruments laws as last above cited. Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886. Indorser giving check For dishonored note held to waive failure to give notice. Weil v. Corn Exchange Bank, 63 Misc. 300, 116 N. Y. Supp. 665. An express waiver may be by parol. Porter v. Kemball, 53 Barb. (N. Y.) 467; Worden v. Mitchell, 7 Wis. 161. For cases on implied waiver, see Markland v. McDaniel, 51 Kan. 350, 32 Pac. 1114, 20 L. R. A. 96; Seiger v. Second Nat. Bank, 132 Pa. 307, 19 Atl. 217. Implied waiver v/here indorser was president of corporation and participated in having latter adjudged a bankrupt. W. O'Bannon Co. v. Cur ran, 113 N. Y. Supp. 359. Taking security or indemnity sufficient to cover liability as im- plied waiver, see Brandt v. Mickle, 28 Md. 436; Durham v. Price, 13 Tenn. (5 Yerg.) 300, 26 Am. Dec. 267; Secord v. Miller, 13 N. Y. 55; Whittier V. Collins, IS R. I. 44, 23 Atl. 39; Denny v. Palmer, 27 N. C. (5 Ired.) 610; Wilson V. Senier, 14 Wis. 380; Armstrong v. Chadwick, 127 Mass. 156. 79First Nat. Bank v. Gridley, 112 App. Div. 398, 98 N. Y. Supp. 445. soToole V. Crafts, 193 Mass. 110, 78 N. E. 775, 118 Am. St. Rep. 455. siHobbs V. Straine, 149 Mass. 212, 21 N. E. 365. 82Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 111); Ariz. (§ 3414); 111. (§ 110); Kan. (§ 118); Md. (§ 130); Mich. (§ 113); Neb. (§ 110); N. Y. (§ 182); Ohio (§ 3175b); R. L (§ 119); Wis. (§ 1678-41). Bank of Montpelier v. Montpelier Lumber Co. (Idaho) 102 Pac. 685. §241 EXCUSABLE DELAY. 305 on all parties; ^3 jj^^ where it is written above the signature of an indorser, it binds him only.^* § 241. Delay in giving notice of dishonor is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, notice must be given with reasonable diligence. Delay in giving notice of dishonor is excused when caused by circumstances beyond the control of the holder, and not imput- able to his default, misconduct or negligence.^^ When the cause of delay ceases to operate, notice must be given with reasonable diiig-ence.^^ 83Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 110); Ariz. (§ 3413); 111. (§ 109); Kan. (§ 117); Md. (§ 129); Mich. (§ 1121); Neb. (§ 109); N. Y. (§ 181); Ohio (§ 3175a); R. I. (§ 118); Wis. (§ 1678-40). Iowa Val. State Bank v. Sigstad, 96 Iowa, 491, 65 N. W. 407; Bryant v. Merchants' Bank, 71 Ky. (8 Bush) 43. 8*Same sections of negotiable- instruments laws as last above cited. Central Bank v. Davis, 36 Mass. (19 Pick.") 373. But, contra, see Parsh- ley V. Heath, 69 Me. 90, 31 Am. Rep 246. A waiver printed on the back of the instrument binds the payee indorsing on another part of the in- strument. Farmers' Bank v. Ewing, 78 Ky. 264, 39 Am Rep. 231. 85Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 113); Ariz (§ 3416); 111. (§ 112); Kan. (§ 120); Md. (§ 132); Mich. (§ 115); Neb. (§ 112); N. Y. (§ 184); Ohio (§ 3175o); R. I. (§ 121); Wis. (§ 1678-43). An ambiguous signature by an indorser, causing notice to be improper- ly addressed, is an excuse for a delay of several days. Manufacturers' & Traders' Bank v. Hazard, 30 N. Y. 226. Existence of malignant disease is an excuse for delay. Hanauer v. Anderson, 84 Tenn. (16 Lea) 340; Tunno v. Lague, 2 Johns. Cas. (N. Y.) 1, 1 Am. Dec. 14. War is also an excuse. See cases cited in note 72, infra. 86Same sections of negotiable instruments laws as last above cited. Harden v. Boyce, 59 Barb. (N. Y.) 425; Farmers' Bank of Virginia v. Gummell, 26 Grat. (Va.) 131; Bank of Old Dominion v. McVeigh, 29 Grat. (Va.) 546. Opp. — SeL— 20 306 NOTICE OF DISHONOR. § 242 Effect of Omission to Give Notice. § 242. An omission to give notice of dishonor by nonacceptance does not prejudice the rights of a holder in due course subsequent to the omission. An omission to give notice of dishonor by nonacceptance does no prejudice the rights of a holder in due course subsequent to the omission.^'^ The Wisconsin negotiable instruments law adds to this rule a proviso that it shall not be construed to revive any liability discharged by such omission.^^ 87Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 117); Ariz. (§ 3420); 111. (§ 116); Kan. (§ 124); Md. (§ 136); Mich. (§ 119); Neb. (§ 116); N. Y. (§ 188); Ohio (§ 3175h); R. I. (§ 125); Wis. (§ 1678-47). 88 Negotiable Inst. Law, § 1678-47. CHAPTER XV. FORGERY AND ALTERATION. § 243. Forged or Unauthorized Signature. § 244. Effect of Alteration. § 245. Bona Fide Holders. § 246. What Alterations Are Material. § 247. Same. § 248. Presumptions and Burden of Proof. Forged or Unauthorized Signature, § 243. Where a signature is forged or made without the author- ity of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party, against whom it is sought to enforce such right, is precluded from setting up the forgery or want of authority. "Where a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge there- for, or to enforce payment thereof, against any party thereto, can be acquired through or under such signature, unless the party against whom enforcement is sought is precluded from setting up the forgery or want of authority.^ It is the forged or unau- thorized signature that is declared to be inoperative, and the in- iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 23); Ariz. (§ 3326); 111. (§ 23); Kan. (§ 30); Md. (§ 42); Mich. (§ 25); Neb. (§ 23); N. Y. (§ 42); Ohio (§ 3171v); R. L (§ 31); Wis. (§ 1675-23). 307 303 FORGERY AND ALTERATION. § 2io hibitory clause forbids recovery on the instrument as against any party where the right of recovery is predicated on such inop- erative signature. Stated in another Avay, the forged or unau- thorized signature cannot be made the basis of any right against any party to the instrument on which such signature appears,^ The fact that signatures to notes are forged does not preclude an action on the indorsements and guaranties of the notes, the statutory provision being inaplicable as the actions are not brought on the notes.^ That no rights can be acquired by a bona tide or other holder, under a forged signature as against the per- son whose name is forged, in tlie absence of an estoppel or of an adoption of the signature, is a settled rule of law.^ If the payee named in a check is a fictitious person, the indorsement of such name thereon by the person cashing the same is a forgery.^ An indorsement made by one falsely representing himself to be the payee transfers no title, though paper was delivered to him by maker under the impression that he was in reality the party named as payee,^ but this would not be true, especially against a bona fide holder, if such person, though falsely representing his identity, is the person for whom the instrument was in fact in- 2Been v. Farrell, 135 Iowa, 670, 113 N. W. 509. A bank which has collected a draft "from the drawee upon which the payee's indorsement is forged cannot retain the money as it had no title to the draft. Sea- board Nat. Bank v. Bank of America, 193 N. Y. 26, 85 N. E. 829, afg 51 Misc. 103, 100 N. Y. Supp. 740, and 118 App. Div. 907, 103 N. Y. Supp. 1141. 3State V. Corning State Sav. Bank, 139 Iowa, 338, 115 N. W. 937. *Mersman v. Werges, 3 Fed. 378; Miers v. Coates, 57 111. App. 216; Buitler V. Cams, 37 Wis. 61. See, also. Booth v. Powers, 56 N. Y. 22; Camp V. Carpenter, 52 Mich. 375, 18 N. W. 113. A person whose name was forged as an indorser is not liable as such to a bona fide holder. Citi- zens' State Bank v. Adams, 91 Ind. 280; Rowe v. Putnam, 131 Mass. 281; Roach V. Woodall, 91 Tenn. 206, 18 S. W. 407, 30 Am. St. Rep. 883; Terry v. Allis, 16 Wis. 478, 504, 20 Wis. 32, 35. ^Harmon v. Old Detroit Nat. Bank, lS3 Mich. 73, 15 Det. Leg. N. 376, . 116 N. W. 617, 126 Am. St. Rep. 467, 17 L. R. A. (N. S.) 514. 6Tolman v. American Nat. Bank, 22 R. I. 462, 48 Atl. 480, 84 Am. St. Rep. 850, 55 L. R. A. 877. 7Jamieson & McFarland v. Heim, 43 Wash. 153, 86 Pac. 165. § 2i3 FORGERY. 300 tended."^ The unautliorized diversion, by an agent, of checks after indorsement, does not make such indorsement a forgery .^ Logically, a forged signature is not capable of ratification, but may be adopted by the person whose name was used. The word ''ratification" is used, however, in the decisions, and it has been held that a ratification may take place, though there was no agency or facts creating an estoppel in pais,^ and no new consid- eration.io Eatification or adoption of the signature may take place where the proceeds of the instrument are used with knowl- edge of the forgery ,11 or where the person whose name was forged accepts a conveyance or deed of trust as security or indemnity ; ^ but mere silence is not sufficient.!^ One who signs as surety below the signature of other ostensible sureties cannot show as against a bona fide holder that the prior signatures were forged ;i* nor can one who negotiates an instru- ment by delivery or by qualified indorsement set up forgery against his immediate transferee, for, by thus negotiating it, he warrants that it is genuine ; ^^ nor can an acceptor set up forgery sSalem v. Bank of State of New York, 110 App. Div. 636, 97 N. Y. Supp. 361. OGreenfield Bank v. Crafts, 86 Mass. (4 Allen) 447; Wellington v. Jackson, 121 Mass. 157. A ratification of a forged signature is binding. Central Nat. Bank v. Copp, 184 Mass. 328, 68 N. E. 334. lOHoward v. Duncan, 3 Lans. (N. Y.) 174. But see criticism of holding in Hood v. Nichols, 3 Alb. Law J. 331, 1 Wkly. Law Bui. 227, and Work- man V. Wright, 33 Ohio St. 405, 3rAm. Rep. 546, in which it was held that a forged note is void ab initio and incapable of ratification. iiBallston Spa Bank v. Marine Bank, 16 Wis. 120. i2Fitzpatrick v. School Com'rs, 26 Tenn. (7 Humph.) 224, 46 Am. Dec. 76; Jones v. Hamlet, 34 Tenn. (2 Sneed) 256; Bell v. Waudby, 4 Wash. 743. isCalifornia Bank v. Sayre, 85 Cal. 102, 24 Pac. 713; DeLand v. Dixon Nat. Bank, 111 111. 323. Especially where the party sought to be charged did not know of the unauthorized use of his name until after maturity of the instrument. Walters v. Munroe, 17 Md. 150. And see Traders' Nat. Bank v. Rogers, 167 Mass. 315, 45 N. E. 923, 57 Am. St. Rep. 458, 36 L. R. A. 539. i4Selser v. Brock, 3 Ohio St. 303. iSNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 65); Ariz. (§ 3368); 111. (§ 65); 310 FORGERY AND ALTFRATION. § 24'1 because, by his acceptance, he admits the existence of the drawer and the genuineness of his signature.^^ An estoppel may be cre- ated by negligence," or by admitting that the signature is gen- uine,^^ or by such admission, coupled with a promise to pay, whereby the holder is induced to abandon his remedy against other parties,!^ or by a representation to a prospective purchaser that he may safely buy the instrument-^" Effect of Alterations. § 244. Where a negotiable instrument is materially altered with- out the assent of all parties liable thereto, it is avoided, except as against a pajrty who has himself made, author- ized or assented to the alteration, and subsequent in- dorsers. Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided except as against a party who has himself made, authorized, or consented to the Kan. (§ 72); Md. (§ 84); Mich. (§ 67); Neb. (§ 65); N. Y. (§ 115); Ohio (§ 3173J); R. I. (§ 73); Wis. (§ 1674-5). Libtauer v. Goldman, 72 N. Y. 506, 28 Am. Rep. 171. And see Coolidge V. Brigham, 46 Mass. (5 Mete.) 68. i6Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 62); Ariz. (§ 3365); 111. (§ 62); Kan. (§ 69); Md. (§81); Alich. (§ 64); Neb. (§ 62); N. Y. (§ 112); Ohio (§ 3173g); R. I. (§ 70); Wis. (§ 1677-2). United States Bank v. Bank of Georgia, 23 U. S. (10 Wheat.) 333, 6 Law. Ed. 423; Marine Nat. Bank v. National City Bank, 59 N. Y. 67, 17 Am. Rep. 305. i7Leather Manufacturers' Bank v. Morgan, 117 U. S. 96, 29 Law. Ed. 811. See, also. Woodruff v. Munroe, 33 Md. 146; Wilson v. Law, 112 N. Y. 536, 20 N. E. 399. But an innocent transferee is not chargeable with the negligence of his transferror in failing to make proper inquiry. First Nat. Bank of Marshalltown v. Marshalltown State Bank, 107 Iowa, 327, n N. W. 1045, 44 L. R. A. 131. iSHefner v. Vandolah, 62 111. 483, 14 Am. Rep. 106. WHefner v. Dawson, 63 111. 403, 14 Am. Rep. 123. 20Crout V. De Wolf, 1 R. I. 393. § 244 ALTERATIONS. 311 alteration, and subsequent indorsers.^i It would seem that this authority may be implied.22 The consent may be by an agent.^^ "While, as between the parties, the authority implied of law to fill in blanks does not aiithorize material alterations in the orig- inal terms of the notes,^^ still, the section under consideration pur- ports to lay down a general rule as to the alteration of instru- ments. It does not purport to cover a case where a blank has been negligently left or only partly filled and the instrument changed by filling in the blank.^s jn g^ch case the party negli- gently so making or negotiating the instrument is liable to an innocent holder.^^ According to the weight of authority in this country, a material alteration by a stranger, or a spoilation of it, as it is termed, will not avoid the note. The contrary has, how- ever, been adopted in England,^^ and will likely be adhered to under the Bills of Exchange Act.^^ Whether, therefore, this sec- tion which is copied from the English act ^'-^ should receive the same construction as that placed upon it, or likely to be placed upon it, in England, is a matter for serious consideration. In this connection it would seem not unreasonable to suppose that it was the intention of the framers of the American act that it 2iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.. Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 124); Ariz. (§ 3427); 111. (§ 123); Kan. (§ 131); Md. (§ 143); Mich. (§ 126); Neb. (§ 123); N. Y. (§ 205); Ohio (§ 3175o); R. I. (§ 132); Wis. (§ 1679-5). See Taddiken v. Cantrell, 69 N. Y. 597, 25 Am. Rep. 253; Stewart v. First Nat. Bank, 40 Mich. 348. 22First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. 23Luckenbach v. McDonald, 164 Fed. 296. 24'Where one indorsed printed form of a note in which the date, amount, and time of payment were all blank, held the maker was not authorized to change face as printed on form. First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. 25National Exchange Bank v. Lester, 119 App. Div. 786, 104 N. Y. Supp. 418; Johnston v. Hoover, 139 Iowa, 143, 117 N. W. 277. 26Raised check. National Exchange Bank v. Lester, 119 App. Div. 786, 104 N. Y. Supp. 418. 27Davidson v. Cooper, 11 Mees & W. 778, 13 Mees & W. 343. 28Chalmers' Bills of Exchange (5th Ed.) 213, 214. 29Bills of Exchange Act, § 64, St. 45 & 46 Vict. c. 61 312 FORGERY Ai\D ALTERATION. § 245 should De construed according to the law of this country ratlier than that of England.3° It is no defense to material alterations in printed portions of a note to say that they are in the hand- writing of the maker, the same as the rest of the written parts, dispelling suspicion and thereby doing away with the necessity of inquiry .2^ Rights of Bona Fide Holders. § 245. But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof accord- ing to its original tenor. "Where an instrument has been materially altered, and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof according to its original tenor.^^ This provision of the negotiable instruments laws changes the 30Jeffrey v. Rosenfeld, 179 Mass. 506, 61 N. E. 49. In Jeffrey v. Rosen- feld, 179 Mass. 506, 61 N. E. 49, the following language is used: "We should hestitate to say that the efifeot of § 124 is not only to avoid the note in case of a material alteration, but to cancel the date for which it was given, and to deprive a party of the benefit of any security that he may have taken." Enforced against indorser according to original tenor; maker made alteration in note at request of payee after indorse- ment; plaintiff a subsequent holder. Colonial Nat. Bank v. Duerr, 108 App. Div. 215, 95 N. Y. Supp. 810. SiFirst Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. 32Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 124); Ariz. (§ 3427); 111. (§ 123); Kan. (§ 131); Md. (§ 143); Mich. (§ 126); Neb. (§ 123); N. Y. (§ 205); Ohio (§ 3175o); R. I. (§ 132); Wis. (§ 1679-5). Thorpe v. White, 188 Mass. 333, 74 N. E. 592; Bothell v. Schweitzer (Neb.) 120 N. W. 1129. §245 BONA FIDE HOLDERS. 313 la\v,33 and is only applicable in favor of a holder in due course,^^ and does not apply where note had no iuception,^^ or where the alteration is such as to make it impossible to enforce it accord- ing to its original tenor.3<5 The question of negligence on the part of the maker is often important, and it has been held that the maker cannot defend against a bona fide holder, where he had left sufficient space to permit of an alteration without defacing the instrumcnt.2^ On this point, an instructive case has been decided under the corresponding provisions of the English Bills of Exchange Act, which are identical with the provisions of the negotiable instruments law just considered in this section, and in the first paragraph of the preceding section. The action was brought by a bona fide holder against the acceptor of a bill which, when accepted, was for £500, but which, after acceptance and be- fore indorsement, had been raised by the drawer to £3,500. It 33See Gettysburg Nat. Bank v. Chisholm, 169 Pa. 564, 32 Atl. 730, 47 Am. St. Rep. 929; Seebold v. Tatlie, 76 Minn. 131, 78 N. W. 967; Walsh V. Hunt, 120 Cal. 46, 52 Pac. 115. In a well considered Massachusetts case, decided before the negotiable instruments law was passed in that state, it was held that where the maker of a note, after it had been in- dorsed for his accommodation, raised the amount from $500 to $2,000, and discounted the note for the latter sum with the plaintiff bank, the indorser was discharged, and was not liable to the bank even for the original amount of the note. Citizens' Nat. Bank v. Richmond, 121 Mass. 110. • 34First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. 245. 35First Nat. Bank v. Gridley, 112 App. Div. 398, 98 N. Y. Supp. 445. 36Name of one of several payees changed after only defendant payee had' indorsed note. First Nat. Bank v. Gridlej^ 112 App. Div. 398, 98 N. Y. Supp. 445. 37Holmes v. Bank of Ft. Gaines, 120 Ala. 493, 24 So. 959; Weidman V. Symes, 120 Mich. 657, 79 N. W. 894, V Am. St. Rep. 603; Garrard v. Haddan, 67 Pa. 83, 5 Am. Rep. 412; Visher v. Webster, 13 Cal. 58; Scot- land County Bank v. O'Connel, 23 Mo. App. 165; Burch v. Daniel, 101 Ga. 228, 28 S. E. 622. In a recent case where the amount of the note was increased, it was held that an accommodation indorser was not liable for the increased amount to a bona fide holder, though spaces on the note rendered the alteration easy, the note being complete at the time of the indorsement. National Exchange Bank v. Lester, 194 N. Y. 461, 87 N. E. 779, rvg. 119 App. Div. 786, 104 N. Y. Supp. 418. 314 FORGERY AND ALTERATION. §246 appeared that at the time of acceptance the figures 500, preceded by the sign "£," were in the left hand corner of the bill, but that there was space enough between the sign and the figures for the insertion of another figure, and that in the body of the bill there was sufficient blank space before the written words ''five hundred pounds" for the insertion of the words "three thousand," and that there was a stamp on the bill larger than was necessary for a 500-pound bill. The court held that the acceptor was not neg- ligent, as he was not bound to anticipate that the bill would fall into the hands of a felonious person, who might fill the spaces, and that, presupposing negligence on the part of the acceptor, no estoppel arose as against him because the felonious act of the forger intervened between such negligence and the indorsement to the holder.2s It is gross negligence to sign an instrument hav- ing an important clause affecting the signer's liability written in pencil, and, in case the clause is erased, it has been held that a bona fide holder may recover on the instrument as it was when he received it.^^ Under the negotiable instruments laws, the hold- er in this case would be permitted to recover only according to the original tenor of the instrument. An alteration by detach- ing a part of the instrument which had been so executed that it could be detached without injury to the remainder of the instru- ment is no defense against a bona fide holder.*^ What Alterations are Material.. § 246. Any alteration which changes : 1. The date; 2. The sum payable, either for principal or interest; 3845 & 46 Vict. c. 61, § 64. Scholfield v. Earl of Londesborough [1895] 1 Q. B. 536. See, also, Blakey v. Johnson, 76 Ky. (13 Bush) 197, 26 Am. Rep. 254. 39Harvey v. Smith, 55 111. 224. 40Elliott V. Levings, 54 111. 213; Woolen v. Ulrich, 64 Ind. 120; Zim- merman V. Rote, 75 Pa. 188; Brown v. Reed, 79 Pa. 370, 21 Am. Rep. 75. But see Scoiield v. Ford, 56 Iowa, 370, citing Benedict v. Cowden, § 247 MATERIAL ALTERATIONS. Slf, 3. The time or place of payment ; 4. The number or the relations of the parties; 5. The medium of currency in which payment is to be made. § 247. Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration. Any alteration is material which changes the date,^^ the sum payable either for principal or interest/- the time or place of payment/^ the number or relation of the parties/* and the medium 49 N. Y. 396, 10 Am. Rep. 382, where the authorities are collected and discussed. 4iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 125); Ariz. (§ 3428); 111. (§ 124); Kan. (§ 132); Md. (§ 144); Mich. (§ 127); Neb. (§ 124); N. Y. (§ 206); Ohio (§ 3175p); R. I. (§ 133); Wis. (§ 1679-6). McCormick Harvesting Mach. Co. v. Lauber, 7 Kan. App. 730, 52 Pac. 577; McMillan v. Hefiferlin, 18 Mont. 385, 45 Pac. 548; Low v. Mer- rill, 1 Pin. (Wis.) 340; Wyman v. Yeomans, 84 111. 403; Inglish v. Bren- eman, 5 Ark. Zll , 41 Am. Dec. 96; Britton v. Dierker, 46 Mo. 591, 2 Am. Rep. 553. An innocent change of date made by the payee, from August 11th to August 12th, though material, did not destroy "the legal efficacy of the note, and recovery may be had upon it when restored." Wallace V. Tice, 32 Or. 283, 51 Pac. 733. 42Same section of negotiable instruments laws as last above cited. National Park Bank v. Ninth Nat. Bank, 55 Barb. (N. Y.) 87; Batchel- der v. White, 80 Va. 103; Wade v. Withington, 83 Mass. (1 Allen) 561; Aetna Nat. Bank v. Winchester, 43 Conn. 391; Walsh v. Hunt, 120 Cal. 46, 52 Pac. 115, 39 L. R. A. 697. Alterations as to interest, see Little Rock Trust Co. v. Martin, 57 Ark. 277, 21 S. W. 468; Hurlbut v. Hall, 39 Neb. 889, 58 N. W. 538; Lewis v. Shepherd, 12 D. C. (1 Mackey) 46; Lamar v. Brown, 56 Ala. 157; Heath v. Blake, 28 S. C. 406, 5 S. E. 842; Harsh v. Kleepef, 28 Ohio St. 200, and cases cited. Words "with interest at 8 % per annum after due until paid" added. Colonial National Bank v. Duerr, 108 App. Div. 215, 95 N. Y. Supp. 810. 43Same sections negotiable instruments laws last above cited. Time of payment, see Seebold v. Tatlie, 76 Minn. 131, 78 N. W. 967. Place of payment, see Adair v. Egland, 58 Iowa, 314, 12 N. W. 211; 316 FORGERY AND ALTERATION. §247 or currency in which payment is to be made/^ or which adds a place of payment, where no place of payment is specified,*^ or makes any other change or addition which alters the effect of the instrument.*'' A memorandum or indorsement written on the back of a promissory note at the time of its expiration which limits its consideration, affects its operation, and was intended to be a part of the contract, must be regarded as a substantive part of the note.'*^ How strict the courts are with regard to the ques- tion of materiality is shown by the following case: "If paid at maturity, the note, as executed, bore no interest, but, as altered, 8 per cent, per annum from the 1st of November, 1889, until the dth of the same month. The difference is slight, but the maxim Troy City Bank v. Louman, 19 N. Y. 477; First Nat. Bank of Wilkes- Barre v. Barnum, 160 Fed. 245. 44Same sections of negotiable instruments laws as last above cited. Change of name of payee. Hoffman v. Planters' Nat. Bank, 99 Va. 480, 39 S. E. 134; Mersman v. Werges, 112 U. S. 139, 28 Law. Ed. 641; Chappell V. Spencer, 23 Barb. (N. Y.) 584. The erasure of the name of the payee and the substitution of another name is a material alteration. Erickson v. First Nat. Bank, 44 Neb. 622, 62 N. W. 1078, 48 Am. St. Rep. 753, 28 L. R. A. 577. Changing the word "order" to "bearer" is a material alteration. Belknap v. National Bank of North America, 100 Mass. 376, 97 Am. Dec. 105; Union Nat. Bank v. Roberts, 45 Wis. 373. See, also, McDaniel v. Whitsett, 96 Tenm. 10, 33 S. W. 567. 45Same sections of negotiable instruments laws as last above cited. Church V. Howard, 17 Hun (N. Y.) 5; Darwin v. Rippey, 63 N. C. 318; Wills V. Wilson, 3 Or. 308. ^^Same sections negotiable instruments laws last cited. Sturges V. Williams, 9 Ohio St. 443, 75 Am. Dec. 473; Southwark Bank V. Gross, 35 Pa. 8o. 47Same sections of negotiable instruments laws as last above cited. The erasure of an agreement to pay costs of collection and attorney's fees is a material alteration. First Nat. Bank v. Laughlin, 4 N. D. 391, 61 N. W. 473. Tracing over in ink what was previously written in pencil is not an alteration. Reed v. Roark, 14 Tex. 329, 65 Am. Dec. 127. Altera- tion lessening indorsements of payment held material. Kurth v. Farm- ers' & Merchants' State Bank, 11 Kan. 475, 94 Pac. 798, 127 Am. St. Rep. 428, 15 L. R. A. (N. S.) 612. 48Kurth v. Farmers' & Merchants' State Bank, 11 Kan. 475, 94 Pac. 798, 127 Am. St. Rep. 428, IS L. R. A. (N. S.) 612. §248 BURDEN OF PROOF. 317 *De minimis non curat lex' does not apply to cases like this."*^ Under the general rule that an alteration, to be material, "must in some way affect the legal rights of the parties as they were ex- pressed before the change was made," it has been held that two alterations by which a note, originally payable to a bank, and sign- ed by two persons as makers, and two as sureties, was first chang- ed by adding, under the signature of the makers, the signature of a third person, who had intended to sign as an indorser, and was again changed by making it payable to such third person, and simultaneously adding his indorsement to the bank, and a guaranty- by him of paj^ment of the note, are immaterial on the ground that the rights and duties of the bank and the makers were precisely the same after as before the changes.^"^ Presumption and Burden of Proof. § 248. By the weight of authority, an apparent alteration is presumed to have been made at or before delivery and the burden of proving a fraudulent alteration is on the party alleging it. The decisions are not in harmony on the questions of the pre- sumptions and burden of proof in case of the alteration of a ne- gotiable instrument; but the weight of authority favors the rule that an apparent alteration will be presumed to have been made at or before delivery, and, consequently, to be a part of the agree- ment of the parties.^^ Hence, the burden of proving a fraudu- lent alteration after delivery is on the party alleging it.^^ Mere 49Little Rock Trust Co. v. Martin, 57 Ark. 277, 21 S. W. 468. soRyan V. First Nat. Bank of Springfield, 148 111. 349, 35 N. E. 1120. CiParamore v. Lindsey, 63 Mo. 63; Stillwell v. Patton, 108 Mo. 352, 18 S. W. 1075; Corcoran v. Doll, 32 Cal. 82; Franklin v. Baker, 48 Ohio St. 296, 27 N. e; 550, 29 Am. St. Rep. 547. See, also, Odell v. Gallup, 62 Iowa, 253, 17 N. W. 502; Simpson v. Davis, 119 Mass. 269; Page v. Danaher, 43 Wis. 221; Byers v. Tritch, 12 Colo. App. 377, 55 Pac. 622; Ward V. Cheney, 117 Ala. 238, 22 So. 996. 52Farmers' Loan & Trust Co. v. Olson, 92 Iowa, 770, 61 N. W. 199; Putnam v. Clark, 33 N. J. Eq. 338. 318 FORGERY AND ALTERATION. §248 interlineations do not raise a presumption of fraudulent altera- tion ;53 j2or does the fact that defendant's signature had been apparently erased or cancelled, or rewritten over a cancellation, relieve plaintiff of the burden of proving, after a general tra- verse, that defendant's signature was on the instrument at the time of its delivery.^^ Material alterations being shown, however, the burden is on plaintiff suing on a note to show that they were made innocently, by a stranger, or for a proper purpose,^^ or that they were made with the authority or consent of the defendant,^^ or that they were ratified.^'' 53Maldaner v. Smith, 101 Wis. 30, 78 N. W. 140; Cox v. Palmer, 3 Fed. 16. eiBaxter v. Camp, 71 Conn. 245, 41 Atl. 803, 71 Am. St. Rep. 169, 42 L. R. A. 514. 65Maguire v. Eichmeier, 119 Iowa, 301, 80 N. W. 395, and cases cited. See, also, Davis v. Crawford (Tex. Civ. App.) 53 S. W. 384. 56Emerson v. Opp, 9 Ind. App. 581, 34 N. E. 840, 37 N. E. 24; Glover V. Gentry, 104 Ala. 222, 16 So. 38; Shroeder v. Webster, 88 Iowa, 627, 55 N. W. 569. 67Sneed v. Sabinal Min. & Mill. Co., 20 C. C. A. 230, 73 Fed. 925. CHAPTER XVI. PAYMENT AND DISCHARGE. § 249. How Instrument is Discharged. 1. Payment to Holder. 2. Cancellation. 3. Other Acts Discharging Simple Contracts for the Payment of Money. 4. Principal Debtor Becoming Holder. § 250. Instruments Payable at Bank. § 251. What Constitutes Payment. § 252. Instruments Drawn in Sets. ^ 253. Payment of Bills of Exchange for Honor — Who May Make. § 254. Same — Attestation. § 255. Same — Declaration Before Payment for Honor. § 256. Same — Preference of Parties Offering to Pay for Honor. § 257. Same — Effect of Payment on Subsequent Parties. § 258. Same — Refusal of Holder to Receive Payment for Honor. § 259. Same — Rights of Payer for Honor. § 260. Discharge of Parties Secondarily Liable. § 261. Who is Primarily Liable. § 262. Renunciation. § 263. Effect of Pa3'ment by Parties Secondarily Liable. § 264. Presumptions. § 265. Renewal of Liability. How Instrument Discharged. § 249. A negotiable instrument is discharged: 1. By payment made to the holder of the instrument in due course by or on behalf of the principal debtor, or by the party accommodated, where the instrument is made or accepted for accommodation. Payment is made in due course when it is made at or after 319 320 PAYMENT AND DISCHARGE. §249 the maturity of the instrument to the holder thereof in good faith and without notice that his title is defective. 2. By the intentional cancellation thereof by the holder; a cancellation made unintentionally, or under a mis- take, or without the authority of the holder, is in- operative ; but where an instrument or any signature thereon appears to have been canceled, the burden of proof lies on the party who alleges that the can- cellation was made unintentionally, or under a mis- take, or without authority; 3. By any other act which will discharge a simple con- tract for the payment of money ; 4. When the principal debtor becomes the holder of the instrument at or after maturity in his own right. This section deals with discharge of instrument and hence of the discharge of all parties.^ Under the familiar maxim that the express mention of one thing implies the exclusion of another, the five methods of discharge herein specified are deemed ex- clusive,2 A negotiable instrument is discharged by payment in due course by or on behalf of the principal debtor,^ or by the party accommo- dated, where the instrument is made or accepted for accommo- 1 Wolstenholme v. Smith, 34 Utah, 300, 97 Pac. 329. 2Vanderford v. Farmers' & Mechanics' Nat. Bank, 105 Md. 164, 66 Atl. 47, 10 L. R. A. (N. S.) 129. 3Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., M'o., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Old., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 119); Ariz. (§ 3422); 111. (§ 118); Kan. (§ 126); Md. (§ 138); Mich. (§ 121); Neb. (§ 118); N. Y. (§ 200); Ohio (§ 317SJ); R. L (§ 127); Wis. (§ 1679). American Bank v. Jenness, 43 Mass. (2 Mete.) 288. See, also, Chris- man's Adm'x V. Harman, 29 Grat. (Va.) 494, 26 Am. Rep. 387. Payment by indorser not on behalf of principal debtor does not discharge. Twelfth Ward Bank v. Brooks, 63 App. Div. 220, 71 N. Y. Supp. 388. § 249 PAYMENT. 321 dation.* An aeeoptnr is a principal debtor witliin the above rule, and a payment by him extinguishes the debt.^ But where bills are drawn vii letters of credit, instead of actual funds in the hands of the acceptor, the drawer is the principal debtor, and is liable to the acceptor for his advances.'^ If the acceptor, after the bill has been paid, again puts it in circulation, and is sued thereon, he cannot set up the payment.'^ Though payment by an accommo- dation acceptor discharges the instrument, it is still evidence in his hands to charge the real debtor.^ Payment by or on behalf of the maker will also discharge the instrument,^ and a payment by one of two joint makers satifies the debt,^° though the instru- ment was formally assigned to the payor.^^ Payment to holder. Payment in due course to the holder of a negotiable instrument operates as a discharge of the instrument.^^ Payment is made in ^^Subdivision 2, same sections of negotiable instruments laws as last above cited. Borland v. Phillips, 3 Ala. 719, where a payment by an accommoda- tion indorser was held not to be a purchase, but to be an extinguishment of the note. See, also, Roland v. Smith, 49 Conn. 404. SBrunswick Bank v. Sewall, 34 Me. 202; Saluan v. Relf, 4 La. Ann. 575; Whitwell v. Brigham, 36 Mass. (19 Pick.) 117. ^Turner v. Browder, 68 Ky. (5 Bush ) 216. 7Hinton v. Bank of Columbus, 9 Port. (Ala.) 463. spirst Nat. Bank v. Maxfield, 83 Me. 576, 22 Atl. 479. 9American Bank v. Jcnness, 43 Mass. (2 Mete.) 288; Chrisman's Adm'x V. Harman, 29 Grat. (Va.) 494, 26 Am. Rep. 387. lOGillett V. Sweat, 6 111. 475; Hopkins v. Farwell, 32 N. H. 425; Stevens V. Hannan, 88 Mich. 13, 49 N. W. 874, afg. 86 Mich. 305, 48 N. W. 951, 24 Am. St. Rep. 125. iiSwem V. Newell, 19 Colo. 397, 35 Pac. 734; Gordon v. Wansey, 21 Cal. 77; Kneeland v. Miles (Tex. Civ. App.) 24 S. W. 1113; Stevens v. Hannan, 88 Mich. 13, 49 N. W. 874, afg. 86 Mich. 305, 48 N. W. 951, 24 Am. St. Rep. 125. i2Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa.. Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 51); Ariz. (§ 3354); 111. Opp.— Sel.— 21 322 PAYMENT AND DISCHARGE. §249 due course when it is made at or after maturity to the holder, in good faith, and, without notice that his title is defective.^^ The negotiability being established, there results the rule that the debtor's duty is to pay to the person who owns the note at the time of payment, or to an agent of such owner actually authorized to receive payment, and that no payment to any other person can be of any effect unless made in actual reliance upon the actual possession of the note, or upon words or acts of the owner so unambiguously declaring the authority of such other person to receive such particular payment as to estop the owner from denying such authority.^* This rule applies generally to all negotiable paper, independently of the existence of any mort- gage or other security .^^ Possession of the instrument is ordinarily (§ 51); Kan. (§ 58); Md. (§ 70); Mich. (§ 53); Neb. (§ 51); N. Y. (§ 90); Ohio (§ 3172w); R. I. (§ 59); Wis. (§ 1676-21). Ellsworth V. Fogg, 35 Vt. 355; Greve v. Schweitzer, 36 Wis. 554. i3Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 88); Ariz. (§ 3391); 111. (§ 87); Kan. (§ 95); Md. (§ 107); Mich. (§ 90); Neb. (§ 87); N. Y. (§ 148); Ohio (§ 31740; R- I- (§ 96); Wis. (§ 1678-18). On the maturity of a note, the maker has an absolute right to pay and thus relieve himself from the payment of further interest; and if, without further agreement, he neglects to pay it when due, he still has the right to pay it at any subsequent time. Lahn v. Koep, 139 Iowa, 349, lis N. W. 877. i^The maker of a negotiable promissory note can satisfy it only by payment to the owner at the time, or to such owner's duly authorized agent. If the recipient of money is not actually authorized, the payment is ineffectual, unless induced by unambiguous direction from the owner or justified by actual possession of the note. Marling v. Nommensen, 127 Wis. 363, 106 N. W. 844, 115 Am. St. Rep. 1017, 5 L. R. A. (N. S.) 412. The owner, by clothing another with the indicia of ownership and osten- sible authority to contract with the maker of the note for the discharge thereof, may become estopped to deny the authority of such person to act in the premises. Home Savings Bank v. Stewart, 78 Neb. 624, 110 N. W. 947. iSMarling v. Nommensen, 127 Wis. 363, 106 N. W. 844, 115 Am. St. Rep. 1017, 5 L. R. A. (N. S.) 412. § 249 CANCELLATION. 323 prima facie evidence of the right to receive paj-ment,'"' and is generally regarded the sole adequate evidence of apparent author- ity to collect upon which the debtor has any right to rely, or can, without negligence, do so. Commercial paper has always been favored in the law, not less for the ultimate benefit of the giver than of the holder, and the rule just referred to is in line with that policy. It is so simple, and, once understood, furnishes so easy and sure a means for both debtor and owner to protect themselves against unauthorized acts of others that it ought not to be weak- ened or confused. The holder can always be safe by retaining the instrument in his possession ; the debtor, by refusing payment without actual presentation. It is justified in application to ne- gotiable paper as distinguished from other property by the very dominant purpose of easy and probable transfer at any moment, so that what may be true as to ownership of such paper at one moment is likely to have changed by another. Of the probabil- ity of such change, the negotiability of the instrument is a con- tinual warning.^'^ But possession by one person does not author- ize payment to him if there is a formal assignment to another on the back of the note.^^ A payment to the original payee after the instrument has been properly indorsed or transferred will not extinguish it,^^ unless the payment is shown to have been made by the authority or with the consent of the holder, or to have been subsequently accepted or ratified by him.^o By cancellation of instrument — Intent. A negotiable instrument is discharged by the intentional can- isPaulman v. Claycomb, 75 Ind. 64; Cothran v. Collins, 29 How. Pr. (N. Y.) 113. i7Loizeaux v. Fremder, 123 Wis. 193, 101 N. W. 423. ispier V. Bullis, 48 Wis. 429, 4 N. W. 381. A stranger who pays a note at maturity to the holder is presumed to have paid it, and not to have purchased it. Lee v. Field, 9 N. M. 435, 54 Pac. 873. i9Wilkinson v. Sargent, 9 Iowa, 521; Harpending v. Gray, Id Hun, 351, 27 N. Y. Supp. 762; Perry v. Bray, 68 Ga. 293. 20City Bank v. Taylor, 60 Iowa, 66, 14 N. W. 128; Enright v. Bcau- mond, 68 Vt. 249, 35 Atl. 57. 324 PAYMENT AND DISCHARGE. §249 cellation thereof by the holder ;2i jj^t a cancellation made unin- tentionally, or by mistake, or without authority of the holder, is inoperative.^^ Where an instrument or any signature thereon appears to have been canceled, the burden of proof rests on the party who alleges that the cancellation was made unintentionally, or by mistake, or without authority .^^ Application of rules governing contracts. In addition to the above modes of discharging negotiable in- struments, it is a general rule that they are discharged by any act which will discharge any simple contract for the payment of money .2* But an agreement binding on the holder to extend the time of payment does not discharge the instrument nor parties primarily liable.^s , Where principal debtor becomes holder. A negotiable instrument is discharged when the principal debt- or becomes the holder thereof, at or after maturity in his own right.^^ The words in his own right merely exclude the case of 2iNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Aliass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 119); Ariz. (§ 3422); 111. (§ 118); Kan. (§ 126); Md. (§ 138); Mich. (§ 121); Neb. (§ 118); N. Y. (§ 200); Ohio (§ 3175j); R. L (§ 127); Wis. (§ 1679). Larkin v. Hardinbrook, 90 N. Y. 333, 43 Am. Rep. 176 and cases cited. 22Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mfass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 123); Ariz. (§ 3426); 111. (§ 122); Kan. (§ 130); Md. (§ 142); Mich. (§ 125); Neb. (§ 122); N. Y. (§ 204); Ohio (§ 317Sn); R. I. (§ 131); Wis. (§ 1679-4). 23Same sections of negotiable instruments laws as last above cited. 24Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 119); Ariz. (§ 3422); 111. (§ 118); Kan. (§ 126); Md. (§ 138); Mich. (§ 121); Neb. (§ 118); N. Y. (§ 200); Ohio (§ 317SJ); R. I. (§ 127); Wis. (§ 1679). 25Accommodation maker. Wolstenholme v. Smith, 34 Utah, 300, 97 Pac. 329. 26Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., §250 PAPER PAYABLE AT BANK. 325 the maker acquiring the note in a purelj^ representative onpnc- ity.^" Under this rule an assignment of the instrument to one joint maker extinguishes it,-^ and so does an indorsement to the ac- ceptor or maker ;2s^ but a purchase by the maker as agent for a third person does not ordinarily extinguish the instrument.^'' Where the holder surrenders the note to the maker on part pay- ment and promise to pay the balance, he cannot subsequeully maintain an action against the maker on the note to recover the balance thereof.^^ Instruments Payable At Bank. § 250. Where the instrument is made payable at a bank, it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon. Where the instrument is made payable at a bank, it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon.^^ Where the instrument is made pay- Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§119); Ariz. (§ 3422); 111. (§ 118); Kan. (§ 126); Md. (§ 138); Mich. (§ 121); Neb. (§ 118); N. Y. (§ 200); Ohio (§ 3175J); R. I. (§ 127); Wis. (§ 1679). 27Schwartzman v. Post, 94 App. Div. 474, 84 N. Y. Supp. 922, 87 N. Y. Supp. 872. 28See Stevens v. Hannan, 88 Mich. 13, 49 N. W. 874; Kneeland v. Miles (Tex. Civ. App.) 24 S. W. 1113. 29Beede v. Real Estate Bank, Pike (Ark.) 546; Long v. Bank of Cyn- thiana. 11 Ky. (1 Litt.) 290, 13 Am. Dec. 234. 30Bowman v. St. Louis Times, 87 Mo. 191; Dubois v. Stoncr, 11 III. App. 403. But contra, see Cason v. Heath, 86 Ga. 438, 12 S. E. 678; White V. Fisher, 62 111. 258; Eastman v. Plumer, 32 N. H. 238. 3iSchwartzman v. Post, 94 App. Div. 474, 84 N. Y. Supp. 922, 87 N. Y. Supp. 872. 32Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, low^a, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 87); Ariz. (§ 3390); Kan. (§ 94); Md. (§ 106); Mich. (§ 89); N. Y. (§ 147); Ohio (§ 3174e); R. I. (§ 95); Wis. (§ 1678-17). 326 PAYMENT AND DISCHARGE. §251 able at a bank, and is left there for collection, the bank is en- titled to receive payment as agent of the payee or holder ; ^^ but if the instrument, though payable at a bank, is not left there for collection, payment to the bank does not satisfy it, because the bank, in receiving the money in such case, acts only as agent of the maker or payor.^* What Constitutes Payment. § 251. In the absence of an agreement to the contrary, pay- ment must be made in money. Since the contract in a negotiable instrument is to pay money, it is not performed — that is, the instrument is not paid — by turn- ing over to the creditor anything but money, unless there was an agreement to accept other property in payment.^^ Accounts and credits in favor of the debtor do not constitute payment unless there was an agreement to that effect ; ^^ but Bedford Bank v. Acoam, 125 Ind. 584, 25 N. E. 713, 21 Am. St. Rep. 258, 9 L. R. A. 560, where the court held that the law would imply author- ity from the depositor by reason of his making the instrument negotiable and payable at the bank. A "bank," within the meaning of the negotiable instruments laws, includes " any person or association of persons carry- ing on the business of banking, whether incorporated or not." Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 191); Ariz. (§ 3487); 111. (§ 190); Kan. (§ 2); Md. (§ 14); Mich. (§ 2); Neb. (§ 189); N. Y. (§ 2); Ohio ^§ 3178); R. I. (§ 2); Wis. (§ 1675). 33Smith V. Essex County Bank, 22 Barb. (N. Y.) 627; Ward v. Smith, 74 U. S. (7 Wall.) 447, 19 Law. Ed. 207; Lazier v. Horan, 55 Iowa, 75, 7 N. W. 457, 39 Am. Rep. 167. But see Sutherland v. First Nat. Bank, 31 Mich. 230. 34St. Paul Nat. Bank v. Cannon, 46 Minn. 95, 48 N. W. 526, 24 Am. St. Rep. 189; First Nat. Bank v. Chilson, 45 Neb. 257, 63 N. W. 362; Hill v. Place, 36 How. Pr. 26, 5 Abb. Pr. (N. Y.) 18. 35Graydon v. Patterson, 13 Iowa, 256, 81 Am. Dec. 432; Heath v. Silver- thorn Lead M. & S. Co., 39 Wis. 146. sC'Rugland v. Thomson, 48 Minn. 539, 51 N. W. 604; Bettison v. Jen- nings, 6 Eng. 116. § 251 PAYMENT. 327 where, by agreement of the persons, any balance found due on a settlement between tAvo of them is to be credited on a noto executed by them to the third, such balance, when found, oper- ates as a payment.^^ The mere acceptance of collateral security does not operate as a payment ; ^s but a payment and satisfaction of the security operates as a payment of the instrument secured.^' So, also, an agreement to rely on the security may amount to a paj^ment, as where a bank at which a note secured by chattel mortgage was payable agreed that it would look to the mort- gaged property alone, it released the maker, if at the date of the agreement such property was sufficient to pay the note, though it had depreciated in value at the time the mortgage was fore- closed.*^ Other notes, whether renewals or not, do not operate as payment unless it is so agreed,*^ and the same rule applies to checks or drafts taken by the payee or holder.*^ The intention- of the parties governs in this class of cases, and, if the new instru- ment was intended as payment, it will so operate, though the old 37Vawter v. Griffin, 40 Ind. 593. 38Hook V. White, 36 Cal. 299; Mohawk Bank v. Van Home, 7 Wend. (N. Y.) 117; Averill v. Loucks, 6 Barb. (N. Y.) 470; Sterling v. Marietta & S. Trading Co., 11 Serg. & R. (Pa.) 179. 39Gilliam v. Davis, 7 Wash. 332, 35 Pac. 39; Sampson v. Fox, 109 Ala. 662, 19 So. 896, 55 Am. St. Rep. 950; Bodley v. Anderson, 2 111. App. 450; Kent V. May, 13 Mich. 38. 40First Nat. Bank v. Watkins, 154 Mass. 385, 28 N. E. 275. "Chisholm V. Williams, 128 111. 115, 21 N. E. 215; Moses v. Trice, 21 Grat. (Va.) 556, 8 Am. Rep. 609; Boston Nat. Bank v. Jose, 10 Wash. 185, 38 Pac. 1026; Holland Trust Co. v. Waddell, 75 Hun, 104, 26 N. Y. Supp. 980; Hadden v. Dooley, 92 Fed. 274; Savings Bank of San Diego County V. Central Market Co., 122 Cal. 28, 54 Pac. 273; First Nat. Bank V, Gridley, 112 App. Div. 398, 98 N. Y. Supp. 445. Acceptance of a forged renewal note does not constitute a payment of the first note. Central Nat. Bank v. Copp, 184 Mass. 328, 68 N. E. 334. 42Burkhalter v. Second Nat. Bank, 42 N. Y. 538, 40 How. Pr. (N. Y.) 324; Western .Brass Mfg. Co. v. Maverick, 4 Tex. Civ. App. 535, 23 S. W. 728; Hamill v. German Nat. Bank, 13 Colo. 203, 22 Pac. 438. A bank re- ceiving a draft for collection must collect it in money, and, if it takes a check of the debtor instead, it does so at its peril. National Bank of Com- merce v. American Exchange Bank, 151 Mo. 320, 52 S. W. 265, 14 Am. St. Rep. 527. 328 PAYMENT AND DISCHARGE. § 252 instrument was not surrendered ,**3 1,1^1 -^yin not so operate if it is worthless or invalid.^* While ordinarily a check given in sat- isfaction of a debt is merely deemed a provisional payment, still such payment becomes absolute when the creditor, or his agent, indorses the creditor's name on the check and negotiates it.*^ Merely placing the consideration to the credit of the seller upon the books of the purchaser does not constitute payment.*^ Instruments Drawn in Sets. § 252. Where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged. Exception. — When the acceptor of a bill drawn in a set pays it without requiring the part bearing his ac- cept-^nce to be delivered up to him, and that part at maturity is outstanding in the hands of a holder m due course, he is liable to the holder thereon. It is a general rule that payment of any one part of a set oper- ates as a payment and discharge of the whole set.*^ The aceptor 43Woodbridge v. Skinner, 15 Conn. 306; French v. French, 84 Iowa, 655, 51 N. W. 145, 15 L. R. A. 300; First Nat. Bank v. Getz, 96 Iowa, 139, 64 N. W. 799. The rule seems to be different in New York. See East River Bank v. Butterworth, 45 Barb. (N. Y.) 476; Schmidt v. Livingston, 16 Misc. 554, 38 N. Y. Supp. 746. 44Lovinger v. First Nat. Bank, 81 Ind. 354; Ramsdell v. Soule, 29 Mass. (12 Pick.) 126; Hughes v. Wheeler, 8 Cow. (N. Y.) 77. The surrender of a genuine note in exchange for an instrument purporting to be a renewal note but which is in fact a forgery does not extinguish the surrender note, which, although not to be found, still can be sued upon by the holder thus forced to give it up. Bass v. Wellesley, 192 Mass. 526, 76 N. E. 543. 45Kramer v. Grant, 60 Misc. 109, 111 N. Y. Supp. 709. 46See Hodge v. Smith, 130 Wis. 326, 110 N. W. 192. 47Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 183); Ariz. (§ 3486); 111. (§ 182); Kan. (§ 190); Md. (§ 202); Mich. (§ 185); Neb. (§ 182); N. Y. (§ 315); Ohio (§ 3177t); R. I. (§ 191); Wis. (§ 1681-40). §255 PAYMENT FOR HONOR. 329 of a bill drawn in a set should, on payment of the part bearing his acceptanee, require such part to be surrendered to him. If he pays without requiring such surrender, he is liable, notwith- standing the payment, to a holder in due course.^^ Payment op Bills of Exchange for Honor. § 253. Where a bill has been protested for nonpayment, any per- son may intervene and pay it supra protest for the honor of any person liable thereon or for the honor of the per- son for whose account it was drawn. § 254. The payment for honor supra protest in order to operate as such and not as a mere voluntary payment must be attested by a notarial act of honor which may be append- ed to the protest or form an extension to it. § 255. The notarial act of honor must be founded on a declara- tion made by the payor for honor, or by his agent in that behalf, declaring his intention to pay the bill for honor and for whose honor he pays. Durkin v. Cranston, 7 Johns. (N. Y.) 442; Ingraham v. Gibbs, 2 Dall. (Pa.) 134; Downes v. Church, 38 U. S. (13 Pet.) 205, 10 Law. Ed. 124. *8Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 182); Ariz. (§ 3485); 111. (§ 181); Kan. (§ 189); Md. (§ 201); Mich. (§ 184); Neb. (§ 181); N. Y. (§ 314); Ohio (§ 3177s); R. I. (§ 190); Wis. (§ 1681-39). See Holden v. Davis, 57 Miss. 769. In this case two bills, while for the same amount, were not intended as duplicates of each other, but together represented the whole amount intended to be paid. One was accepted, the other was not, but the acceptor paid the unaccepted bill by mistake, and was sued on the accepted bill. Held that the payment of the unaccepted bill was neither a defense nor a good set-off. When the instrument is paid it must be delivered up to the person paying it. Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 74); Ariz. (§ 3377); 111. (§ 741; Kan. (§ 81); Md. (§ 93); Mich. (§ 76); Neb. (§ 74); N. Y. (§ 134); Ohio (§ 3173s); R. I. (§ 82); Wis. (§ 1678-4). 330 PAYMENT AND DISCHARGE. §256 § 256. Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will discharge most parties to the bill is to be given the preference. § 257. Where a bill has been paid for honor, all parties subse- quent to the party for whose honor it is paid are dis- charged, but the payer for honor is subrogated for, and succeeds to, both the rights and duties of the holder as regards the party for whose honor he pays and all parties liable to the latter. § 258. Where the holder of a bill refuses to receive payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment. § 259. The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the protest. Payment of bills of exchange for honor — Who may make. A bill being protested for nonpayment, any person may inter- vene and pay it supra protest for the honor of any person liable thereon, or for the honor of the person for whose account it was drawn.*^ Same — Attestation. In order to be effective as such and not merely to operate as a voluntary payment, a payment for honor supra protest must be *9Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 171); Ariz. (§ 3474); 111. (§ 170); Kan. (§ 178); Md. (§ 190); Mich. (§ 173); Neb. (§ 170); N. Y. (§ 300); Ohio(§ 3177h); R. I. (§ 179); Wis. (§ 1681-28). Konig V. Bayard, 26 U. S. (1 Pet.) 250, 7 Law. Ed. 558. Payment for honor cannot be made before protest. Baring v. Clark, 36 Mass. (19 Pick.) 220; Gazzam v. Armstrong, 33 Ky. (3 Dana) 554. §259 PAYMENT FOR HONOR. 3;U attested by a notarial act of honor, which may be appended to the protest, or form an extension to it.^° Same — Declaration before payment for honor. It is essential that the notarial act of honor be founded on a declaration made by the payer for honor, or by his agent in that behalf, declaring his intention to pay the bill for honor, and for whose honor he pays.^^ Same — Preference of parties offering to pay for honor. Two or more persons offering to pay a bill for the honor of different persons, the person whose payment will discharge most parties to the bill is to be given the preference.^^ Same — Effect of payment on subsequent parties. A bill having been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged, but the payer . is subrogated for, and succeeds to, both the rights and duties of the holder as regards the party for whose honor he pays, and all parties liable to the latter.^^ soNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 172); Ariz. (§ 3475); 111. (§ 171); Kan. (§ 179); Md. (§ 191); Mich. (§ 174); Neb. (§ 171); N. Y. (§ 301); Ohio (§ 3177i); R. L (§ 180); Wis. (§ 1681-29). See Gazzam v. Armstrong, 33 Ky. (3 Dana) 554. siNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah; Va., Wash., W. Va., Wyo. (§ 173); Ariz. (§ 3476); 111. (§ 172); Kan. (§ 180); Md. (§ 192); Mich. (§ 175); Neb. (§ 172); N. Y. (§ 302); Ohio (§ 3177J); R. I. (§ 181); Wis. (§ 1681-30). See Gazzam v. Armstrong, 33 Ky. (3 Dana) 554. 52Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 174); Ariz. (§ 3477); 111 (§ 173); Kan. (§ 181); Md. (§ 193); Mich. (§ 176); Neb. (§ 173); N. Y. (§ 303); Ohio (§ 3177k); R. I. (§ 182); Wis. (§ 1681-31). ssNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., 332 PAYMENT AND DISCHARGE. §260 Same — Refusal of holder to receive payment for honor. The holder refusing payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment.^* Same — Rights of payer for honor. The payer for honor, on payment to the holder of the amount of the bill, and the notarial expenses incident to its dishonor, is en- titled to receive both the bill itself and the protest.^^ Discharge of Parties Secondarily Liable. § 260. A person secondarily liable on the instrument is dis- charged : 1. By any act which discharges the instrument; 2. By the intentional cancellation of his signature by the holder; Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo.' (§ 175); Ariz. (§ 3478); 111. (§ 174); Kan. (§ 182); Md. (§ 194); Mich. (§ 177); Neb. (§ 174); N. Y. (§ 304); Ohi'o (§ 31771); R. I. (§ 183); Wis. (§ 1681-32). See McDowell v. Cook, 14 Miss. (6 Smedes & M.) 420, 45 Am. Dec. 289. 54Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 176); Ariz. (§ 3479); 111. (§ 175); Kan. (§ 183); Md. (§ 195); Mich. (§ 178); Neb. (§ 175); N. Y. (§ 305); Ohio (§ 3177m); R. I. (§ 184); Wis. (§ 1681-33). 55Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 177); Ariz. (§ 3480); 111. (§ 176); Kan. (§ 184); Md. (§ 196); Mich. (§ 179); Neb. (§ 176); N. Y. (§ 306); Ohio (§ 3177n); R. I. (§ 185); Wis. (§ 1681-34). As to the right of the payer for honor to reimbursement, see Grosvenor V. Stone, 25 Mass. (8 Pick.) 79; Leake v. Burgess, 13 La. Ann. 156. A voluntary payment without request does not give a right to reimburse- ment. Willis V. Hobs'on, 37 Me. 403. §260 DISCHARGE OF SECONDARY PARTIES. 333 3. By the discharge of a prior party; 4. By a valid tender of payment made by a prior party; 5. By a release of the principal debtor unless the holder's right of recourse against the party secondarily liable is expressly reserved; 6. By an agreement binding upon the holder to extend the time of payment, or to postpone the holder's right to enforce the instrument, unless made with the assent of the party secondarily liable, or unless the right of recourse against such party is expressly reserved ; 7. In soma states by misapplication of securities or funds applicable to debt. The methods of discharge stated are exclusive.^^ A person sec- ondarily liable on the instrument is discharged by any act which discharges the instrument itself.^^ He is also discharged by the in- tentional cancellation of his signature by the holder,^^ by the dis- charge of a prior party,^^ or by a valid tender of payment made seVanderford v. Farmers' & Mechanics' Nat. Bank, 105 Md. 164, 66 Atl. 47, 10 L. R. A. (N. S.) 129. 57Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J.,; N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 120); Ariz. (§ 3423); 111. (§ 119); Kan. (§ 127); xMd. (§ 139); Mich. (§ 122); Neb. (§ 119); N. Y. (§ 201); Ohio (§ 3175k); R. L (§ 128); Wis. (§ 1679-1). ssSubdivision 2, same sections of negotiable instruments laws as last above cited. See ante, § 249. S^Subdivisiion 3, same sections of negotiable instruments laws as last above cited. Spies V. National City Bank, 174 N. Y. 222, 66 N. E. 736, 61 L. R. A. 193. Discharge of maker discharges indorser. Shutts v. Fingar, 100 N. Y. 539, 3 N. E. 588; Union Nat. Bank v. Grant, 48 La. Ann. 18, 18 So. 705. Discharge of indorser releases subsequent indorser. State of New York Nat. Bank v. Coykendall, 58 Hun (N. Y.) 205, 12 N. Y. Supp. 334, S3 Am. Rep. 231; Plankington v. Gorman, 93 Wis. 560, 67 N. W. 1128. 334 PAYMENT AND DISCHARGE. §260 by a prior party.^^ A release of the principal debtor discharges a party secondarily liable, unless the holder's right of recourse against the party secondarily liable is expressly reserved.^^ By agreement extending time of payment, or postponing right to enforce instrument. A party secondarily liable is also discharged by any agreement, binding on the holder, to extend the time of payment, or to post- pone the holder's right to enforce the instrument, unless the right of recourse against such party is expressly reserved.^^ A pro- vision in a note payable on or before a date named, seeking to evade this clause and providing that the makers and indorsers consent that the time of payment may be extended without notice, does not render the note non-negotiable.^^ Mere delay will not discharge a person secondarily liable. There must be a valid agreement to extend the time or vary the contract.^* and this agreement must be supported by a new consideration.^^ If, how- ever, the liability of a party secondarily liable has become fixed, he will not be discharged by a subsequent extension of time given soSubdivision 4, same secti'ons of negotiable instruments laws as last above cited. 6iSubdivision 5, same sections of negotiable instruments laws as last above cited. Ziegfried v. Stein, 117 N. Y. Supp. 900. See Ludwig v. Iglehart, 43 Md. 39; Gloucester Bank v. Worcester, 27 Mass. (10 Pick.) 527; Eldrege v. Chacon, Crabbe, 296. 62Subdivision 6, same sections of negotiable instruments laws as last above cited. First Nat. Bank v. Lineberger, 83 N. C. 454, 35 Am. Rep. 582; Place v. Mcllvan, 1 Daly, 266, 38 N. Y. 96, 97 Am. Dec. m; Stein v. Steindler, 1 Misc. 414, 20 N. Y. Supp. 839; Commercial Bank of Lexington v. Wood, 56 Mo. App. 214. Where holder of note agreed with maker not to press the suit commenced thereon while certain monthly payments should con- tinue to be made, indorsers were held discharged. Deahy v. Choquet, 28 R. I. 338, 67 Atl. 421. 63First Nat. Bank v. Buttery (N. D.) 116 N. W. 341. 64Way v. Dunham, 166 Mass. 263, 44 N. E. 220; Smith v. Erwin, 11 N. Y. 466. 65Friedenberg v. Robinson, 14 Fla. 130. Part payment is not sufficient consideration. Manchester v. Van Brunt, 2 Misc. 228, 22 N. Y. Supp. 362 § 260 DISCHARGE OF SECONDARY PARTIES. 335 to the maker.*''' The negotiable instruments law as adopted in "Wisconsin has additional provisions, negativing a discharge by such agreements if they were made with the assent of the person secondarily liable, or if he has been fully indemnified.^'^ By misapplication of securities or funds applicable to debt. Another addition has been made by the Wisconsin negotiable instruments law by the provision that a person secondarily liable is discharged "by giving up or applying to other purposes col- lateral securit}^ applicable to the debt, or, there being in the holder's hands, or within his control, the means of complete or partial satisfaction, the same are applied to other purposes."^ In this class of cases, "the original contract is not changed in terms between any of the parties, but a collateral indemnity, held in trust by the creditor, and upon which the surety has a right to rely, has been destroyed, and he is presumed to have suffered loss by the surrender of the security. The creditor, having misapplied the trust fund, and acted in bad faith toward the surety, must be held to have released the surety in equity, or, rather, to be estopped from looking to him for payment, by reason of his bad faith in discharging his duty to the trust fund held for their common security. "^^ 66State Bank v. Wilson, 12 N. C. (1 Dev.) 484; Pequet v. Dimitry, 3 La. 385. 67Negotiable Inst. Law, § 1679-1. esNegotiable Inst. Law, § 1679-1, subd. 4a. Haslett V. Ehrick, 1 Nott & McC. (S. C.) 116; Union Nat. Bank v. Cooley, 27 La. Ann. 202. In order to discharge the indorser, collateral security released by the holder must be valid security. Id. Equity will not relieve an indorser who has not used diligence to protect himself against the loss of security by prior parties. Mahone v. Central Bank, 17 Ga. 111. See, also. Brown v. Nichols, 123 Ind. 492, 24 N. E. 339; Kirkpatrick v. Hawk, 80 111. 122. fl»Rogers v. School Trustees, 46 111. 428. 336 PAYMENT AND DISCHARGE. § 2(>1 "Who Primarily Liable. § 261. The person "primarily" liable on an instrument is the person who by the terms of the instrument is absolutely required to pay same. All other parties are "second- arily" liable. Under the terms of the act, all who are absolutely required to pay the instrument are primarily liable thereon ;'^° this includes an accommodation maker''^ and a surety .'^^ Renunciation. § 262. The holder may expressly renounce his rights against any party to the instrument before, at, or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A re- 70Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 192); Ariz. (§ 3488); 111. (§ 191); Kan. (§ 3); Md. (§ IS); Mich. (§ 2); Neb. (§ 190); N. Y. (§ 3); Ohio (§ 3178a); R. L (§ 3); Wis. (§ 1675). ^iVanderford v. Farmers' & Mechanics' Nat. Bank, 115 Md. 164, 66 Atl. 47, 10 L. R. A. (N. S.) 129; National Citizens' Bank v. Toplitz, 81 App. Div. 593, 81 N. Y. Supp. 422; Cellers v. Meachem, 49 Or. 186, 89 Pac. 426. In this case the court bases its decision in the following rea- soning: Since the act makes an accommodation maker primarily liable, and "in one section designates how negotiable instruments may be dis- charged, but contains no provision whereby a person primarily liable can be released, except by payment, etc., and in the section following speci- fies the manner in which persons secondarily liable may be relieved of responsibility on such instrument, it follows that the immunities indicated were intended to exclude all exceptions not contained therein under the familiar maxim 'Expressio unius est exclusio alterius.' " Cellers v. .Meachem, 49 Or. 186, 89 Pac. 426. 72Rouse V. WootQn, 140 N. C. 557, 53 S. E. 430, 111 Am. St. Rep. 875. |2i62 RENUNCIATION. 337 nunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon. The holder may expressly renounce his rights against any party to the instrument before, at, or after its maturity .'^ An absolute and unconditional renunciation of his right against the principal debtor, made at or after the maturity of the instrument, dis- charges it, but a renunciation does not affect the rights of a holder in due course without notice.*^* The first relates to the party ; the second to the instrument,'^^ and the two are perfectly consistent."^ A renunciation must be in writing, unless the instrument is deliv- ered up to the person primarily liable thereon.'^^ The correspond- ing provision of the English Bills of Exchange Act 1882 is to the same effect. It has been held under this subdivision that a parol renunciation by the holder of all rights under a promissory note is inoperative unless the note is delivered up to the "maker" or "acceptor," and that a devisee of the maker is not within the terra "maker," though an executor or administrator of the maker might be included in the term.'^^ 'SNeg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or.,.Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 122); Ariz. (§ 3425); 111. (§ 121); Kan. (§ 129); Md. (§ 141); Mich. (§ 124); Neb. (§ 121); N. Y. (§ 203); Ohio (§ 3175-m); R. I. (§ 130); Wis. (§ 1679-3). 74Same sections of negotiable instruments laws as last above cited. 75Leask v. Dew, 102 App. Div. 529, 92 N. Y. Supp. 891. 76Remarks to contrary, in Leask v. Dew, 102 App. Div. 529, 92 N. Y. Supp. 891, are believed erroneous. 77Same sections of negotiable instruments laws as last above cited. Baldwin v. Daly, 41 Wash. 416, 83 Pac. 724. Paper, found after payee's death, stating he wished note canceled, or if that was illegal his heirs should be notified of his orders, held not a renunciation. Leask v. Dew, 102 App. Div. 529, 92 N. Y. Supp. 891. Three hours before a payee's death the nurse in attendance upon him wrote the following note at his dictation: "30th August, 1889. It is by Mr. George's dying wish that the cheque (sic) for £2,000 money lent to Mrs. Francis be destroyed as soon as found." Held not a sufficient renunciation to discharge the note. In re George, 44 Ch. Div. 627. 78 45 & 46 Vict. c. 61, § 62, subd. 1. Edwards v. Walters [1896] 2 Ch. 157. Opp.— Sel.^ 22 338 PAYMENT AND DISCHARGE. § 26C* Effect of Payment by Party Secondarily Liable. § 263. Where the instrument is paid by a party secondarily liable thereon, it is not discharged; but the party so paying it is remitted to his former rights as regards all prior parties, and he may strike oat his own and all subsequent indorsements, and again negotiate the in- strument, except; 1. Where it is payable to the order of a third person, and has been paid by the drawer; and 2. Where it was made or accepted for accommodation, and has been paid by the party accommodated. Payment by person secondarily liable does not discharge instru- ment. Where the instrument is paid to a party secondarily liable thereon, it is not discharged; but the party so paying it is re- mitted to his former rights as regards all prior parlies,'^^ except where the instrument is payable to the order of a third person and has been paid by the drawer,^" or where it has been made or accepted for accommodation, and has been paid by the party accommodated.^^ This section is intended to apply where the per- 79Neg. Inst. Laws Colo., Conn., D. C, Fla., Idaho, Iowa, Ky., La., Mass., Mo., Mont., Nev., N. H., N. J., N. M., N. C, N. D., Okl., Or., Pa., Tenn., Utah, Va., Wash., W. Va., Wyo. (§ 121); Ariz. (§ 3424); 111. (§ 120); Kan. (§ 128); Md. (§ 146); Mich. (§ 123); Neb. (§ 120); N. Y. (§ 202); Ohio (§ 3175-L); R. I. (§ 129); Wis. (§ 1679-2). French v. Jarvis, 29 Conn. 347; Eaton v. Carey, 27 Mass. (10 Pick.) 211; Stevens v. Hannan, 88 Mich. 13, 49 N. W. 874, afg. 86 Mich. 305, 48 N. W. 951, 24 Am. St. Rep. 125; Havens v. Huntington, 1 Cow. (N. Y.) 387; Davis V. Miller, 14 Grat. (Va.) 1. SOSame sections negotiable instruments laws last cited. Payment by indorser discharges his own liability and that of all sub- sequent indorsers. Keazer v. Colebrook Nat. Bank (N. H.) IZ Atl. 170. SlSame sections negotiable instruments laws last cited. Marling v. Jones, 138 Wis. 82, 119 N. W. 931. § 264 PRESUMPTIONS. 339 eon secondarily liable can trace his title on the face of the note, and its indorsements through the prior parties whom he seeks to hold.^2 Subsequent indorsement must be held to mean subsequent in point of liability .^^ A payment by an indorser does not ex- tinguish the holder's rights against the maker, — for, as between the maker and the indorser, the transaction is a purchase and not a payment.^'* Same — Striking out indorsements, and issuing instrument. On payment by a party secondarily liable, he may strike out his own and all subsequent indorsements and again negotiate, except, where it is payable to the order of a third person, and has been paid by the drawer, and where it was made or accepted for ac- commodation, and has been paid by the party accommodated.^^ Presumptions. § 264. An outstanding instrument is prima facie presumed a subsisting obligation. The presumption that outstanding instrument in the hands of the original payee is a subsisting undischarged obligation, while 82Quimby v. Varnum, 190 Mass. 211, 76 N. E. 671. 83Quimby v. Varnum, 190 Mass. 211, 76 N. E. 671. Thus, where an in- dorser before delivery paid the note and the payee before delivering it to him struck out his indorsement, held he could not renegotiate the note. Id. Has action against maker but not on note. Id. 84Madison Square Bank v. Pierce, 137 N. Y. 444, 33 N. E. 557, 33 Am. St. Rep. 751, 20 L. R. A. 335, afg. 62 Hun, 493, 17 N. Y. Supp. 270. 85Same sections of negotiable instruments laws as last above cited. Payment by an indorser leaves the instrument still negotiable as to prior parties. French v. Jarvis, 29 Conn. 347; Eaton v. Carey, 27 Mass. (10 Pick.) 211; Davis v. Miller, 14 Grat. (Va.) 1. Reissuance by accommo- dation indorser after payment by him, see Kirksey v. Bates, 1 Ala. 303. Right of contribution between accommodation indorsers on payment by one or more of their number, see Kelly v. Burrough. 102 N. Y. 93, 6 N. E. 109; Hull v. Myers, 90 Ga. 674, 16 S. E. 653; Hagerthy v. Phillips, 83 Me. 336, 22 Atl. 223; Newcomb v. Gibson, 127 Mass. 393. 340 PAYMENT AND DISCHARGE. § 265 very strong, is not conclusive,^ and where it is met by opposing presumptions arising out of the fact of the case, the question of payment becomes one of fact.^'' Eenewal of Liability. § 265. After discharge, a renewal of liability, by an indorser, must be by a new contract. An indorser having been entirely discharged from liability, any renewal of his liability must be by a new contract.s^ It follows that the giving of a new check or note after the loss or distruc- tion of a former one is of itself alone ambiguous and may evince intent to enter into new relations, or merely supply evidence of those already existing, according to the surrounding circum- stances.^^ 86In re McMichan's Estate, 220 Pa. 187, 69 Atl. 596. 87In re McMichan's Estate, 220. Pa. 187, 69 Atl. 596. Presumption held rebutted where subsequent to its date the payee had in his hands the means of payment which he made no attempt to apply but paid over without deduction. Id. ssAebi V. Bank of Evansville, 124 Wis. 7Z, 102 N. W. 329, 109 Am. St. Rep. 925, 68 L. R. A. 964. 89Aebi V. Bank of Evansville, 124 Wis. IZ, 102 N. W. 329, 109 Am. St. Rep. 925, 68 L. R. A. 964. Where new check was dated back to date of lost one and marked "duplicate," held not a new contract. Id. APPENDIX A. ORIGINAL DRAFT OF THE NEGOTIABLE INSTRUMENT LAW AS SUBMITTED TO THE VARIOUS STATE LEGISLATURES AND TO CONGRESS. The section numbers given are those of the Original Draft and are the numbers used in the law as adopted in Alabama, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Iowa, Kentucky, Louisiana, Massachusetts, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Utah, Virginia, "Washington, West Virginia and Wyoming. The section numbers of the law as adopted in Arizona, Illinois, Kansas, Maryland, Michigan, Nebraska, New Hampshire, New York, Ohio, Rhode Island and Wisconsin differ from those here- with given and may be found by consulting Appendix "B" where references are given from all the sections as found in the Original Draft to the corresponding sections in the law as adopted in the states just mentioned. The numbers in brackets at the end of the various sections or part of the act as here printed refer to the pages of this' work where the subject-matter of the section in question is considered. 341 TITLE I. NEGOTIABLE INSTRUMENTS IN GENERAL. ARTICLE I. FORM AND INTERPRETATION. § 1. Be it enacted, etc., An instrument to be negotiable must conform to the following requirements [41] : — 1. It must be in writing and signed by the maker or drawer [18, 28, 40] ; 2. Must contain an unconditional promise or order to pay a sum certain in money [45, 48, 55, 62, 194] ; 3. Must be payable on demand, or at a fixed or determinable future time [64] ; 4. Must be payable to order or to bearer [71] ; and, 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable cer- tainty [83]. § 2. The sum payable is a sum certain within the meaning of this act, although it is to be paid [55] : — 1. "With interest [55] ; or 2. By stated instalments [56] ; or 3. By stated instruments, with a provision that upon default in payment of any instalment or of interest, the whole shall become due [57] ; or 342 APPENDIX. 343 4. With exchange, whether at a fixed rate or at the current rate [58] ; or 5. With costs of collection or an attorney's fee, in case payment shall not be made at maturity [59]. § 3. An unqualified order or promise to pay is unconditional within the meaning of this act, though coupled with : — 1. An indication of a particular fund out of which reimburse- ment is to be made, or a particular account to be debited with the amount [50] ; or 2. A statement of the transaction which gives rise to the instru- ment [51,52]. But an order or promise to pay out of a particular fund is not unconditional [52]. § 4. An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable : — 1. At a fixed period after date or sight [67] ; or 2. On or before a fixed or determinable future time specified therein [69] ; or 3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of hap- pening be uncertain [70]. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect [70]. § 5. An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable [91]. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which : — 1. Authorizes the sale of collateral securities in case the instru- ment be not paid at maturity [86] ; or 2. Authorizes a confession of judgment if the instrument be not paid at maturity [89] ; or 3. Waives the benefit of any law intended for the advantage or protection of the obligator [89] ; or 4. Gives the holder an election to require something to be done in lieu of payment of money [90]. But nothing in this section shall validate any provision or stipula- tion otherwise illegal [90]. 344 NEGOTIABLE INSTRUMENTS LAW. § 6. The validity and negotiable character of an instrument are not affected by the fact that [142] :— 1. It is not dated [19, 42] ; or 2. Does not specify the value given, or that any value has been given therefor [44] ; or '.i. Does not specify the place where it is drawn or the place where it is payable [19, 85] ; or 4. Bears a seal [43] ; or 5. Designates a particular kind of current money in which pay- ment is to be made [63]. But nothing in this section shall alter or repeal any statute re- quiring in certain cases the nature of the consideration to be stated in the instrument [44]. § 7. An instrument is payable on demand : — 1. Where it is expressed to be payable on demand, or at sight, or on presentation [65] ; or 2. In which no time for payment is expressed [66]. Where an instrument is issued, accepted, or indorsed when over- due, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand [66]. § 8, The instrument is payable to order when it is drawn pay- able to the order of a specified person or to him or his erder [73]. - It may be drawn payable to the order of: — 1. A payee who is not maker, drawer, or drawee [73] ; or 2. The drawer or maker [73] ; or 3. The drawee [74] ; or 4. Two or more payees jointly [74] ; or 5. One or some of several payees [12, 13, 75, 84] ; or 6. The holder of an office for the time being [75]. Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable cer- tainty [81]. § 9. The instrument is payable to bearer [76, 82] : — 1. When it is expressed to be so payable [76] ; or 2. When it is payable to a person named therein or bearer [76] ; or 3. When it is payable to the order of a fictitious or nonexisting APPENDIX. 345 person, and such fact was known to the person making it so payable [77] ; or 4. When the name of the payee does not purport to be the name of any person [SO] ; or 5. When the only or last indorsement is an indorsement in blank [81,170]. § 10. The instrument need not follow the language of this act but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof [41]. § 11, Where the instrument or an acceptance or any indorse- ment thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance, or indorsement as the case may be [21, 132, 142, 183]. § 12. The instrument is not invalid for the reason only that it is antedated or postdated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instru- ment so dated is delivered acquires the title thereto as of the date of delivery [23]. § 13. Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an instrument paj^able at a fixed period after sight is undated, any holder may insert therein the true date of issue or accept nee, and the instrument shall be payable accordingly [20, 141]. The in- sertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course, but, as to him, the date so inserted is to be regarded as the true date [22, 141]. § 14. Where the instrument is wanting in any material parti- cular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein [24]. And a signa- ture on a blank paper delivered by the person making the signa- ture in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount [25] . In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time [21, 26, 142]. But if any such instrument, after completion, 346 NEGOTIABLE INSTRUMENTS LAW. is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been ftlled up strictly in accordance with the authority given and with- in a reasonable time [27, 235]. § 15. Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery [24, 237]. § 16. Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto [35, 163, 167]. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accept- ing, or indorsing, as the case may be [36, 164], and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument [36, 164]. But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed [164]. And where the instrument is no longer in the possession of a party whose signature appears there- on, a valid and intentional delivery by him is presumed until the contrary is proved [37, 164, 238]. § 17. Where the language of the instrument is ambiguous, or there are omissions therein, the following rules of construction apply :— 1. Where the sum payable is expressed in words and also in figures and there is a discrepancy between the tAvo, the sura denoted by the words is the sum payable ; but if the words are ambiguous or uncertain, references may be had to the figures to fix the amount [107] ; 2. Where the instrument provides for the payment of interest, without specifying the date from which interest is to run, the interest runs from the date of the instrument, and if the instrument is undated, from the issue thereof [108] ; 3. Where the instrument is not dated, it will be considered to be dated, as of the time it was issued [20, 42, 109] ; APPENDIX. 347 4. Where there is a conflict between the written and printed pro- visions of the instrument, the written provisions prevail [110] ; 5. Where the instrument is so ambiguous that there is doubt whether it is a bill or note, the holder may treat it as either at his election [111] ; 6. Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same in- tended to sign, he is to be deemed an indorser [111, 195] ; 7. Where an instrument containing the words "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon [111, 112], § 18. No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise expressly provided. But one who signs in a trade or assumed name will be liable to the same extent as if he had signed in his own name [30,31,189,243]. § 19. The signature of any party may be made by a duly au- thorized agent. No particular form of appointment is necessary for this purpose ; and the authority of the agent may be established as in other cases of agency [30]. § 20. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized [31] ; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, does not exempt him from personal liability [32]. § 21. A signature by "procuration" operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority [34]. § 22. The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwith- standing that from want of capacity the corporation or infant may incur no liability thereon [179, 205]. § 23. Where a signature is forged or made without the au- 348 NEGOTIABLE INSTRUMENTS LAW. thority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signa- ture, unless the party, against whom it is sought to enforce such right, is precluded from setting up the forgery or want of authority [307]. AETICLE II. CONSIDERATION. § 24. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value [92, 93, 139]. § 25. Value is any consideration sufficient to support a simple contract [95]. An antecedent or pre-existing debt constitutes value, and is deemed such whether the instrument is payable on demand or at a future time [95, 139, 219]. § 26. Where value has at any time been given for the instru- ment, the holder is deemed a holder for value in respect to all parties who became such prior to that time [218]. § 27, Where the holder has a lien on the instrument, arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien [98, 219]. § 28. Absence or failure of consideration is matter of defense as against any person not a holder in due course ; and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise [99, 100]. § 29. An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, without re- ceiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party [102,104,220]. APPENDIX. 349 ARTICLE III. NEGOTIATION. § 30. An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the trans- feree the holder thereof [1G2]. If payable to bearer it is nego- tiated by deliver}^; if payable to order it is negotiated by the indorsement of the holder completed by delivery [162, 167]. § 31. The indorsement must be written on the instrument itself or upon a paper attached thereto [165]. The signature of the indorser, without additional words, is a sufficient indorsement [168]. § 32. The indorsement must be an indorsement of the entire instrument [167]. An indorsement, which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument [167]. But where the instrument has been paid in part, it may be indorsed as to the residue [168]. § 33. An indorsement may be either special [169] or in blank [172] ; and it may also be either restrictive [172] or qualified [176], or conditional [177]. § 34. A special indorsement specifies the person to whom, or to whose order, the instrument is to be payable [169] ; and the indorsement of such indorsee is necessary to the further negotia- tion of the instrument [170]. An indorsement in blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery [172]. § 35. The holder may convert a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract consistent with the character of the indorse- ment [171]. § 36. An indorsement is restrictive, which either : — 1. Prohibits the further negotiation of the instrument [173] ; or 2. Constitutes the indorsee the agent of the indorser [173] ; or 350 NEGOTIABLE INSTRUMENTS LAW. 3. Vests the title in the indorsee in trust for or to the use of some other person [174]. But the mere absence of words implying power to negotiate does not make an indorsement restrictive [173]. § 37. A restrictive indorsement confers upon the indorsee the right : — 1. To receive payment of the instrument [174] ; 2. To bring any action thereon that the indorser could bring [175] ; 3. To transfer his rights as such indorsee, where the form of the indorsement authorizes him to do so [175]. But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement [175]. § 38. A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument [176]. It may be made by adding to the indorser 's signature the words "without recourse" or any words of similar import [176]. Such an indorsement does not impair the negotiable character of the instrument [176]. § 39. Where an indorsement is conditional, a party required to pay the instrument may disregard the condition, and make payment to the indorsee or his transferee, whether the condition has been fulfilled or not [177]. But any person to whom an instrument so indorsed is negotiated will hold the same, or the proceeds thereof, subject to the rights of the person indorsing conditionally [178]. § 40. Where an instrument, payable to bearer, is indorsed specially, it may nevertheless be further negotiated by delivery [170], but the person indorsing specially is liable as indorser to only such holders as make title through his indorsement [170, 209]. § 41. Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others [179]. § 42. Where an instrument is drawn or indorsed to a person as "Cashier" or other fiscal officer of a bank or corporation, it is deemed prima facie to be payable to the bank or corporation of APPENDIX. 351 which he is such officer; and may be negotiated by either the indorsement of the bank or corporation, or the indorsement of the officer [181]. § 43. AVhere the name of a payee or indorsee is wrongly desig- nated or misspelled, he may indorsee the instrument as therein described, adding, if he think fit, his proper signature [168]. § 44. Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability [181]. § 45. Except where an indorsement bears date after the maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue [183, 215]. § 46. Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated [184]. § 47. An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise [186]. § 48. The holder may at any time strike out any indorsement which is not necessary to his title [185]. The indorser whose in- dorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument [186]. § 49. Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferror had therein, and the transferee acquires, in addition, the right to have the indorse- ment of the transferror [162] . But for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made [163,216]. § 50. Where an instrument is negotiated back to a prior party, such party may, subject to the provisions of this act, reissue and further negotiate the same. But he is not entitled to enforce pay- ment thereof against any intervening party to whom he was personally liable [187]. 352 NEGOTIABLE INSTRUMENTS LAW. ARTICLE IV. RIGHTS OF HOLDER. § 51. The holder of a negotiable instrument may sue thereon in his own name [210] ; and payment to him in due course dis- charges the instrument [160, 321]. § 52. A holder in due course is a holder who has taken the instrument under the following conditions : — 1. That it is complete and regular upon its face [213] ; 2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact [214] ; 3. That he took it in good faith [216] and for value [217]. 4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it [222]. § 53. Where an instrument payable on demand is negotiated an unreasonable length of time after its issue, the holder is not deemed a holder in due course [100, 215]. § 54. Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid there- for, he will be deemed a holder in due course only to the extent of the amount theretofore paid by him [223]. § 55. The title of a person who negotiates an instrument is defective within the meaning of this act when he obtained the in- strument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circum- stances as amount to a fraud [223]. § 56. To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith [225]. APPENDIX. 353 § 57. A holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses avail- able to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon [212, 238]. § 58. In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable [240]. But a holder v^ho derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter [241]. § 59. Every holder is deemed prima facie to be a holder in due course [228] ; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course [229]. But the last mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title [230]. ARTICLE V. LIABILITIES OF PARTIES. § 60. The maker of a negotiable instrument by making it en- gages that he will pay it according to its tenor, and admits the existence of the payee and his capacity to endorse [189, 190]. § 61. The drawer by drawing the instrument admits the ex- istence of the payee and his then capacity to indorse; and engages that on due presentment the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder [190, 191]. Opp— Sel.— 23 354 NEGOTIABLE INSTRUMENTS LAW. § 62. The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance [192, 194] ; and admits : — 1. The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument [192, 193, 194, 310] ; and 2. The existence of the payee and his then capacity to indorse [193, 195]. § 63. A person placing his signature upon an instrument other- wise than as maker, drawer or acceptor, is deemed to be an in- dorser, unless he clearly indicates by appropriate words his in- tention to be bound in some other capacity [111, 196]. § 64. Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser in accordance with the following rules : — 1. If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties [199] ; 2. If the instrument is payable to the order of the maker or drawer, or is payable to bearer, he is liablie to all parties subsequent to the maker or drawer [199] ; 3. If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee [199]. § 65. Every person negotiating an instrument by delivery or by a qualified indorsement, warrants : — 1. That the instrument is genuine and in all respects what it purports to be [202, 309] ; 2. That he has a good title to it [202] ; 3. That all prior parties had capacity to contract [202] ; 4. That he has no knowledge of any fact which would impair the validity of the instrument to render it valueless [203]. But when the negotiation is by delivery only, the warranty ex- tends in favor of no holder other than the immediate trans- feree [203]. The provisions of subdivision three of this section do nof apply to persons negotiating public or corporate securities other than bills and notes [202]. APPENDIX. 355 § 66. Every indorser who indorses without qnalifieation [20,3] warrants to all subsequent holders, in due course [204] : — 1. The matters and things mentioned in subdivisions one, two and three of the next preceding section [205] ; and 2. That the instrument is at the time of his indorsement valid and subsisting [206]. And, in addition, he engages that on due presentment, it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it [206]. § 67. Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser [197]. § 68. As respects one another, indorsers are liable prima facie in the order in which they indorse [207] ; but evidence is admissible to show that as between or among themselves they have agreed otherwise [208]. Joint payees or joint indorsees who indorse are deemed to indorse jointly and severally [199, 209]. § 69. Where a broker or other .agent negotiates an instrument without indorsement, he incurs all the liabilities prescribed by section sixty-five of this act, unless he discloses the name of his principal, and the fact that he is acting only as agent [210] . AETICLE VL PRESENTMENT FOR PAYMENT. § 70. Presentment for payment is not necessary in order to charge the person primarily liable on the instrument [243] ; but if the instrument is, by its terms, payable at a special place, and he is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender of payment upon his part [244]. But except as herein provided, presentment for paj'ment is necessary in order to charge the drawer and indorsers [245]. 356 NEGOTIABLE INSTRUMENTS LAW. § 71. "Where the instrument is not payable on demand, present- ment must be made on the day it falls due [254]. Where it is payable on demand, presentment must be made within a reason- able time after its issue, except that, in the case of a bill of ex- change, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof [255]. § 72. Presentment for payment, to be sufficient, must be made : — 1. By the holder, or by some person authorized to receive pay- ment on his behalf [246] ; 2. At a reasonable hour on a business day [250] ; 3. At a proper place as herein defined [261] ; 4. To the person primarily liable on the instrument, or if he is absent or inaccesible to any person found at the place where the presentment is made [247]. § 73. Presentment for payment is made at the proper place : — 1. ^V'here a place of payment is specified in the instrument and it is there presented [261] ; 2. Where no place of payment is specified, but the address of the person to make payment is given in the instrument and it is there presented [262] ; 3. Where no place of payment is specified and no address is given and the instrument is presented at the usual place of business or residence of the person to make payment [86, 262] ; 4. In any other case if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence [263]. § 74. The instrument must be exhibited to the person from whom payment is demanded, and when it is paid must be delivered up to the party paying it [263, 329]. § 75. Where the instrument is payable at a bank, presentment for payment must be made during banking hours, unless the per- son to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient [250]. APPENDIX. 357 § 76. Where the person primarily liable on the instrument is dead, and no place of payment is specified, presentment for pay- ment must be made to his personal representative, if such there be, and if, with the exercise of reasonable diligence, he can be found [2-lS]. § 77. Where the persons primarily liable on the instrument are liable as partners, and no place of payment is specified, present- ment for payment may be made to any one of them, even though there has been a dissolution of the firm [248]. § 78. Where there are several persons, not partners, primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all [24"8]. § 79. Presentment for payment is not required in order to charge the drawer where he has no right to expect or require that the drawee or acceptor will pay the instrument [245]. § 80. Presentment for payment is not required in order to charge an indorser where the instrument was made or accepted for his accommodation and he has no reason to expect that the instru- ment will be paid if presented [246]. § 81. Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct or neg- ligence [259]. When the cause of delay ceases to operate, pre- sentment must be made with reasonable diligence [260]. § 82. Presentment for payment is dispensed with : — 1. Where after the exercise of reasonable diligence presentment as required by this act cannot be made [249, 264] ; 2. Where the drawee is a fictitious person [265] ; 3. By waiver of presentment, express or implied [265]. § 83. The instrument is dishonored by nonpayment when: — 1. It is duly presented for payment and payment is refused or cannot be obtained [266] ; or 2. Presentment is excused and the instrument is overdue and un- paid [266]. § 84. Subject to the provisions of this act, when the instrument is dishonored by nonpayment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder [267]. 358 NEGOTIABLE INSTRUMENTS LAW. § 85. Every negotiable instrument is payable at the time fixed therein without grace [253] . When the day of maturity falls upon Sunday, or a holiday, the instrument is payable on the next suc- ceeding business day [252], Instruments falling due on Saturday are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday [15, 123, 252]. § 86. Where the instrument is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and by including the date of payment [254]. § 87. Where the instrument is made payable at a bank it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon [325]. § 88. Payment is made in due course when it is made at or after the maturity of the instrument to the holder thereof in good faith and without notice that his title is defective [322], ARTICLE VII. NOTICE OF DISHONOR. § 89. Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each in- dorser, and any drawer or indorser to whom such notice is not given is discharged [281]. § 90. The notice may be given by or on behalf of the holder, or by or on behalf of any party to the instrument who might be com- pelled to pay it to the holder, and who, upon taking it up, would have a right to reimbursement from the party to whom the notice is given [285, 286]. APPENDIX. 359 § 91. Notice of dishonor may be given by an agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not [286]. § 92. Where notifee is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given [287]. § 93. Where notice is given by or on behalf of a party entitled to give notice, it enures for the benefit of the holder and all parties subsequent to the party to whom notice is given [288]. § 94. Where the instrument has been dishonored in the hands of an agent, he may either himself give notice to the parties liable thereon, or he may give notice to his principal [287]. If he give notice to his principal, he must do so within the same time as if he were the holder, and the principal upon the receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder [299]. § 95. A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal com- munication [292]. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby [293]. § 96, The notice may be in writing or merely oral and may be given in any terms which sufficiently identify the instrument, and indicate that it has been dishonored by nonacceptance or nonpay- ment [2«)2]. It may in all cases be given by delivering it per- sonally or through the mails [294]. § 97. Notice of dishonor may be given either to the party him- self or to his agent in that behalf [289]. § 98. When any party is dead, and his death is known to the party giving notice, the notice must be given to a personal repre- sentative, if there be one, and if with reasonable diligence he can be found [289]. If there be no personal representative, notice may be sent to the last residence or last place of business of the deceased. [290]. § 99. Where the parties to be notified are partners, notice to any one partner is notice to the firm, even though there has been a dissolution [290]. 360 NEGOTIABLE INSTRUMENTS LAW. § 100. Notice to joint parties who are not partners must be given to each of them, unless one of them has authority to receive such notice for the others [290]. § 101. Where a party has been adjudged a bankrupt or an in- solvent, or has made an assignment for the benefit of creditors, notice may be given either to the party himself or to his trustees or assignee [291]. § 102. Notice may be given as soon as the instrument is dis- honored; and unless delay is excused as hereinafter provided, must be given within the times fixed by this act [296], § 103. Where the person giving and the person to receive notice reside in the same place, notice must be given within the following times : — 1. If given at the place of business of the person to receive notice, it must be given before the close of business hours on the day following [297] ; 2. If given at his residence, it must be given before the usual hours of rest on the day following [297] ; 3. If sent by mail, it must be deposited in the post office in time to reach him in the usual course on the day following [297]. § 104. Where the person giving and the person to receive notice reside in different places, the notice must be given within the following times : — 1. If sent by mail, it must be deposited in the post office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day, by the next mail thereafter [298] ; 2. If given otherwise than through the post office, then within the time that notice would have been received in due course of mail, if it had been deposited in the post office within the time specified in the last subdivision [298]. § 105. AVhere notice of dishonor is duly addressed and depos- ited in the post office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails [295]. § 106. Notice is deemed to have been deposited in the post office when deposited in any branch post office or in any letter box under the control of the post office department [295]. APPENDIX. 361 § 107. Where a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving notice to ante- cedent parties that the holder has after the dishonor [298]. § 108. Where a party has added an address to his signature, notice of dishonor must be sent to that address [300] ; but if he has not given such address, then the notice must be sent as fol- lows : — 1. Either to the post office nearest to his place of residence, or to the post office where he is accustomed to receive his letters [300] ; or 2. If he live in one place, and have his place of business in an- other, notice may be sent to either place [301] ; or 3. If he is sojourning in another place, notice may be sent to the place where he is sojourning [301]. But where the notice is actually received by the party within the time specified in this act, it will be sufficient, though not sent in accordance with the requirements of this section [300]. § 109. Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give duo notice and the waiver may be express or implied [303, 304]. § 110. Where the waiver is embodied in the instrument itself, it is binding upon all parties; but where it is written above the signature of an indorser, it binds him only [305]. § 111. A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver not only of a formal protest, but also of presentment and notice of dishonor [266, 276, 304]. § 112. Notice of dishonor is dispensed with when, after the exercise of reasonable diligence, it cannot be given to or does not reach the parties sought to be charged [302]. § 113. Delay in giving notice of dishonor is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct or negligence [305]. When the cause of delay ceases to operate, notice must be given with reasonable diligence [305] . 362 NEGOTIABLE INSTRUMENTS LAW. § 114, Notice of dishonor is not required to be given to the drawer in either of the following cases : — 1. "When the drawer and drawee are the same person [283] ; 2. When the drawee is a fictitious person or a person not having capacity to contract [283] ; 3. When the drawer is the person to whom the instrument is presented for payment [283] ; 4. Where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument [283] ; 5. Where the drawer has countermanded payment [283]. § 115. Notice of dishonor is not required to be given to an in- dorser in either of the following cases : — 1. Where the drawee is a fictitious person or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the instrument [284] ; 2. Where the indorser is the person to whom the instrument is presented for payment [284] ; 3. Where the instrument was made or accepted for his accommo- dation [285]. § 116. Where due notice of dishonor by nonacceptance has been given, notice of a subsequent dishonor by nonpayment is not necessary, unless in the meantime the instrument has been ac- cepted [303]. § 117. An omission to give notice of dishonor by nonacceptance does not prejudice the rights of a holder in due course subsequent to the omission [306], § 118. AVhere any negotiable instrument has been dishonored it may be protested for nonacceptance or nonpayment, as the case may be ; but protest is not required except in the case of foreign bills of exchange [269]. ARTICLE VIII. DISCHARGE OF NEGOTIABLE INSTRUMENTS. § 119. A negotiable instrument is discharged : — 1. By payment in due course by or on behalf of the principal debtor [320] ; APPENDIX. 36r5 2. By payment in due course by the party accommodated, where the instrument is made or accepted for accommodation [321] ; 3. By the intentional cancellation thereof by the holder [324] ; 4. By any other act which will discharge a simple contract far the payment of money [324] ; 5. When the principal debtor becomes the holder of the instru- ment at or after maturity in his own right [324]. § 120. A person secondarily liable on the instrument is dis- charged : — 1. By an act which discharges the instrument [333] ; 2. By the intentional cancellation of his signature by the holder [333] ; 3. By the discharge of a prior party [333] ; 4. By a valid tender of payment made by a prior party [334] ; 5. By a release of the principal debtor unless the holder's right of recourse against the party secondarily liable is expressly reserved [334] ; 6. By an agreement binding upon the holder to extend the time of payment, or to postpone the holder's right to enforce the instrument, unless made with the assent of the party sec- ondarily liable, or unless the right of recourse against such party is expressly reserved [334]. § 121. Where the instrument is paid by a party secondarily liable thereon, it is not discharged ; but the party so paying it is remitted to his former rights as regards all prior parties [338], and he may strike out his own and all subsequent indorsements, and again negotiate the instrument [339], except: — 1. Where it is payable to the order of a third person, and has been paid by the drawer [338] ; and 2. Where it was made or accepted for accommodation, and has been paid by the party accommodated [338]. § 122. The holder may expressly renounce his rights against any party to the instrument, before, at or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the 364 NEGOTIABLE INSTRUMENTS LAW. rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon [337]. § 123. A cancellation made unintentionally, or under a mis- take, or without the authority of the holder, is inoperative; but v/here an instrument or any signature thereon appears to have been canceled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mis- take or without authority [324]. § 124. Where a negotiable instrument is materially altered without the assent of all parties liable thereto, it is avoided, ex- cept as against a party who has himself made, authorized or as- sented to the alteration, and subsequent indorsers [142, 311]. But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof according to its original tenor [312]. § 125. Any alteration which changes [142] : — 1. The date [315] ; 2. The sum payable, either for principal or interest [315] ; 3. The time or place of payment [315] ; 4. The number or the relations of the parties [315] ; 5. The medium of currency in which payment is to be made [316] ; Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material altera- tion [316]. TITLE II. BILLS OF EXCHANGE. ARTICLE I. FORM AND INTERPRETATION. § 126. A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving APPENDIX. 365 it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer [11, 138]. § 127. A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the payment there- of, and the drawee is not liable on the bill unless and until he accepts the same [114, 130, 244]. § 128. A bill may be adressed to two or more drawees jointly, whether they are partners or not ; but not to two or more drawees in the alternative or in succession [12, 84]. § 129. An inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within this state. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill [13]. § 130. Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or a promissory note [110]. § 131. The drawer of a bill and any indorser may insert there- on the name of a person to whom the holder may resort in case of need, that is to say in case the bill is dishonored by nonac- ceptance or nonpayment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit [128, 129, 267]. ARTICLE II. ACCEPTANCE. § 132. The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer [132]. The ac- ceptance must be in writing and signed by the drawee [133, 149]. It must not express that the drawee will perform his promise by any other means than the payment of money [11, 138]. § 133. The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill and, if such request is refused, may treat the bill as dishonored [135]. 366 NEGOTIABLE INSTRUMENTS LAW. § 134. "Where an acceptance is written on a paper other than the bill itself, it does not bind the acceptor except in favor of a person to whom it is shown and who, on the faith thereof, receives the bill for value [135]. § 135. An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who, upon the faith thereof, receives the bill for value [151, 152]. § 136. The drawee is allowed twenty-four hours after pre- sentment in which to decide whether or not he will accept the bill ; but the acceptance if given dates as of the day of presentation [141]. § 137. Where a drawee to whom a bill is delivered for ac- ceptance destroys the same, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or nonaccepted to the holder, he will be deemed to have accepted the same [135]. § 138. A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has been dishonored by a previous refusal to accept, or by nonpayment [147]. But when a bill payable after sight is dis- honored by nonacceptance and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment [147]. § 139. An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer [142]. A qualified acceptance in express terms varies the effect of the bill as drawn [143]. § 140. An acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only and not elsewhere [145]. § 141. An acceptance is qualified which is: — 1. Conditional, that is to say, which makes payment by the ac- ceptor dependent on the fulfillment of a condition therein stated [144] ; APPENDIX. 367 2. Partial, that is to say, an acceptance to pay part of the amount for which the bill is drawn [144] ; 3. Local, that is to say, an acceptance to pay only at a particular place [145] ; 4. Qualified as to time [145] ; 5. The acceptance of some one or more of the drawees, but not of all [145]. § 142. The holder may refuse to take a qualified acceptance, and if he does not obtain an unqualified acceptance he may treat the bill as dishonored by nonacceptance [146]. AVhere a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill, unless they have expressly or impliedly authorized the holder to take a qualified acceptance, or subse- quently assent thereto [146]. When the drawer or an indorser receives notice of a qualified acceptance, he must, within a rea- sonable time, express his dissent to the holder, or he will be deem- ed to have assented thereto [146], ARTICLE III. PRESENTMENT FOR ACCEPTANCE. § 143. Presentment for acceptance must be made : — 1. Where the bill is payable after sight, or in any other case, where presentment for acceptance is necessary in order to fix the maturity of the instrument [118] ; or 2. Where the bill expressly stipulates that it shall be presented for acceptance [118] ; or 3. Where the bill is drawn payable elsewhere than at the resi- dence or place of business of the drawee [118, 124]. In no other case is presentment for acceptance necessary in order to render any party to the bill liable [118]. § 144. Except as herein otherwise provided, the holder of a bill which is required by the next preceding section to be present- ed for acceptance must either present it for acceptance or nego- tiate it within a reasonable time. If he fail to do so, the drawer and all indorsers are discharged [121]. 368 NEGOTIABLE INSTRUMENTS LAW. § 145. Presentment for acceptance must be made by or on behalf of the holder [124] at a reasonable hour, on a business day and before the bill is overdue, to the drawee or some person au- thorized to accept or refuse acceptance on his behalf [122, 125] ; and: 1. Where a bill is addressed to two or more drawees who are not partners, presentment must be made to them all unless one has authority to accept or refuse acceptance for all, in which case presentment may be made to him only [126] ; 2. "Where the drawee is dead, presentment may be made to his personal representative [126] ; 3. Where the drawee has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of creditors, presentment may be made to him or to his trustee or assignee [126], § 146. A bill may be presented for acceptance on any day on which negotiable instruments may be presented for payment under the provisions of sections seventy-two and eightj^-five of this act [122]. When Saturday is not otherwise a holiday, present- ment for acceptance may be made before twelve o'clock noon, on that day [123]. § 147. Where the holder of a bill drawn payable elsewhere than at the place of business or the residence of the drawee has not time with the exercise of reasonable diligence to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused and does not dis- charge the drawers and indorsers [123]. § 148. Presentment for acceptance is excused and a bill may be treated as dishonored by nonacceptance in either of the follow- ing cases : — 1. Where the drawee is dead, or has absconded, or is a fictitious person or a person not having capacity to contract by bill [119] ; 2. Where, after the exercise of reasonable diligence, present- ment cannot be made [119] ; APPENDIX. 3G9 3. "Where, although presentment has been irregular, acceptance has been refused on some other ground [119]. § 149. A bill is dishonored by nonaeceptance : — 1. When it is duly presented for acceptance and such an ac- ceptance as is prescribed by this act is refused or cannot be obtained [127] ; or 2. "When presentment for acceptance is excused and the bill i.' not accepted [127]. § 150. Where a bill is duly presented for acceptance and is nol accepted Avithin the prescribed time, the person presenting i+ must treat the bill as dishonored by nonaeceptance or he loses the right of recourse against the drawer and indorsers [128]. § 151. When a bill is dishonored by nonaeceptance, an im- mediate right of recourse against the drawers and indorsers accrues to the holder and no presentment for payment is nec- essary [128]. ARTICLE IV. PROTEST. § 152. Where a foreign bill appearing on its face to be such is dishonored by nonaeceptance, it Diust be duly protested for non- acceptance, and where such a bill has not previously been dis- honored by nonaeceptance is dishonored by nonpayment, it rau.-;t be duly protested for nonpayment [269]. If it is not so protested, the drawer and indorsers are aischarged [269]. Where a bill does not appear on its face to be a foreign bill, protest thereof iu case of dishonor is unnecessary [128]. § 153. The protest must be annexed to the bill, or must contain a copy thereof, and must be under the hand and seal of the notary making it [271], and must specify: — 1. The time and place of presentment [271] ; 2. The fact that presentment was made and the manner thereof [271] ; 3. The cause or reason for protesting the bill [271] ; Opp.-Sel— 24 370 NEGOTIABLE INSTRUMENTS LAW. 4. The demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found [271]. § 154. Protest may be made by : — 1. A notary public [272] ; or 2. By any respectable resident of the place where the bill is dis- honored, in the presence of two or more credible witnesses [273]. § 155. "When a bill is protested, such protest must be made on the day of its dishonor, unless delay is excused as herein pro- vided [273]. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting [274]. § 156. A bill must be protested at the place where it is dis- honored, except that when a bill drawn payable at the place of business, or residence of some person other than the- drawee, has been dishonored by nonacceptance, it must be protested for non- payment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary [275]. § 157. A bill which has been protested for nonacceptance may be subsequently protested for nonpayment [270]. § 158. Where the acceptor has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of cre- ditors, before the bill matures, the holder may cause the bill to be protested for better security against the drawer and indorsers [274]. § 159. Protest is dispensed with by any circumstances which would dispense with notice of dishonor [277]. Delay in noting or protesting is excused when delay is caused by circumstances be- yond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable dili- gence [278]. § 160. Where a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof [276]. APPENDIX. 371 ARTICLE V. ACCEPTANCE FOR HONOR. § 161. Where a bill of exchange has been protested for dis- honor b}' nonacceptance or protested for better security and is not overdue, any person not being a party already liable thereon may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon or for the honor of the person for whose account the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn; and where there has been an acceptance fur honor for one party, there may be a further acceptance by a different person for the honor of another party [153]. § 162. An acceptance for honor supra protest must be in writing and indicate that it is an acceptance for honor, and must be signed by the acceptor for honor [154]. § 163. Wl. 3rc an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer [154]. § 164. The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted [155]. § 165. The acceptor for honor by such acceptance engages that he will on due presentment pay the bill according to the terms of his acceptance, provided it shall not have been paid by the drawee, and provided also that it shall have been duly presented for payment and protested for nonpayment and notice of dis- honor given to him [155]. § 166. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non- acceptance and not from the date of the acceptance for honor [156]. § 167. Where a dishonored bill has been accepted for honor supra protest or contains a reference in case of need, it must be protested for nonpayment before it is presented for payment to the acceptor for honor or referee in case of need [275]. 372 NEGOTIABLE INSTRUMENTS LAW. § 168. Presentment for payment to the acceptor for honor must be made as follows : — 1. If it is to be presented in the place where the protest for nonpayment was made, it must be presented not later than the day following its maturity [260] ; 2. If it is to be presented in some other place than the place where it was protested, then it must be forwarded within the time specified in section one hundred and four [260] . § 169. The provisions of section eighty-one apply where there is delay in making presentment to the acceptor for hoi-or or referee in case of need [260]. § 170. When the bill is dishonored by the acceptor for honor it must be protested for nonpayment by him [270]. ARTICLE VL PAYMENT FOR HONOR. § 171. Where a bill has been protested for nonpayment, any person may intervene and pay it supra protest for the honor of any person liable thereon or for the honor of the person for whose account it was drawn [330]. § 172. The payment for honor supra protest in order to operate as such and not as a mere voluntary payment must be attested by a notarial act of honor which may be appended to the protest or form an extension to it [331]. § 173. The notarial act of honor must be founded on a declara- tion made by the payer for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays [331]. § 174. Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will dis- charge most parties to the bill is to be given the preference [331]. § 175. Where a bill has been paid for honor, all parties sub- sequent to the party for whose honor it is paid are discharged, but the payer for honor is subrogated for, and succeeds to, both APPENDIX. ■ 373 the rights and duties of the holder as regards the party for whose honor he pays and all parties liable to the latter [331]. § 176. Where the holder of a bill refuses to receive payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment [332]. § 177. The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the protest [332]. ARTICLE VII. BILLS IN A SET. § 178. Where a bill is drawn in a set, eacli part of the set being numbered and containing a reference to the other parts, the whole of the parts constitutes one bill [14]. § 179. Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is as between such holders the true owner of the bill [184]. But nothing in this section affects the rights of a person who in due course accepts or pays the part first presented to him [184]. § 180, Where the holder of a set indorses two or more parts to different persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills [201]. § 181. The acceptance may be written on any part and it must be written on one part only [147]. If the drawee accepts more than one part, and such accepted parts are negotiated to different holders in due course, he is liable on every such part as if it were a separate bill [147]. § 182. When the acceptor of a bill drawn in a set pays it with- out requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon [329]. 374 NEGOTIABLE INSTRUMENTS LAW. § 183. Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or other- wise, the whole bill is discharged [328]. TITLE III. PROMISSORY NOTES AND CHECKS. ARTICLE L § 184. A negotiable promissory note within the meaning of this act is an unconditional promise in writing made by one person to another signed by the maker engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker's own order, it is not complete until indorsed by him [5, 10, 71, 73]. § 185. A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check [14, 15]. § 186. A check must be presented for payment within a rea- sonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay [257]. § 187. Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance [148]. § 188. Where the holder of a check procures it to be accepted or certified, the draAver and all indorsers are discharged from liability thereon [150]. § 189. A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check [115, 148, 244].. APPENDIX. 375 TITLE IV. GENERAL PROVISIONS. ARTICLE L § 190. This act shall be known as the Negotiable Instruments Law [3]. § 191. In this act unless the context otherwise requires : — "Acceptance" means an acceptance completed by delivery or notification [16, 132]. "Action" includes counterclaim and set-off [16]. "Bank" includes any person or association of persons carrying: on the business of banking, whether incorporated or not [16, 326]. "Bearer" means the person in possession of a bill or note which is payable to bearer [16]. "Bill" means bill of exchange, and "note" means negotiable promissory note [16]. "Delivery" means transfer of possession, actual or constructive, from one person to another [4, 16, 35, 164] . "Holder" means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof [16, 160, 162]. "Indorsement" means an indorsement completed by delivery [16, 167]. "Instrument" means negotiable instrument [16]. "Issue" means the first delivery of the instrument, complete in form, to a person who takes it as a holder [16, 20]. "Person" includes a body of persons, whether incorporated or not [16]. "Value" means valuable consideration [16]. "Written" . includes printed, and "writing" includes print [16,18]. § 192. The person "primarily" liable on an instrument is the person who by the terms of the instrument is absolutely required to pay same. All other parties are "secondarily" liable [244, 336]. 376 NEGOTIABLE INSTRUMENTS LAW. § 193. In determining what is a "reasonable time" or an "un- reasonable time," regard is to be had to the nature of the instru- ment, the usage of trade or business (if any) with respect to such instruments, and the facts of the particular case [26, 121, 14G, 215, 256, 257]. § 194. "Where the day, or the last day, for doing any act herein required or permitted to be done, falls on Sunday or on a holiday, the act may be done on the next succeeding secular or business day [252]. § 195. The provisions of this act do not apply to negotiable instruments made and delivered prior to the passage hereof [4]. § 196. In any case not provided for in this act, the rules of the law merchant shall govern [7, 112, 113]. § 197. Of the laws enumerated in the schedules hereto annex- ed, that portion specified in the last column is repealed [See Appendix "D"]. § 198. This chapter shall take effect on [See Appendix "C"]. APPENDIX B. TABLE TO FURTHER FACILITATE THE FINDING OF PAR- ALLEL SECTIONS OF THE NEGOTIABLE INSTRUMENTS LAWS. The section numbers in the Original Draft of the Negotiable Instruments Law are the numbers used in the law as adopted in Alabama, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Iowa, Kentucky, Louisiana, Massachusetts, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Penn- sylvania, Tennessee, Utah, Virginia, Washington, West Virginia, and Wyoming. In the states of Arizona, Illinois, Kansas, Maryland, Michigan, Nebraska, New York, Ohio, Rhode Island and Wisconsin, the section numbers of the law as adopted have been changed from that as found in the Original Draft. The table below is for the purpose of facilitating the finding of the corresponding sections either in the Original Draft, and hence in the states which have adopted the section numbers of the Original Draft, or in those other states where the numbers have been changed. Having the proper section in the Original Draft the table here given renders it easy to find the parallel sections in the other states, and vice versa. Also by referring from the section number of the Original Draft to the corresponding sec- tion number in the Act as given in Appendix "A," the place where that section is treated in this work may be found. 377 373 NEGOTIABLE INSTRUMENTS LAW. Original Draft Ariz. 111. Kan. Md. Mich. Neb. N. Y. Ohio R. I. Wis. § 1 §3304 § 1 § 8 § 20 § 3 § 1 § 20 § 3171 § 9 § 1675—1 2 3305 2 9 21 4 2 21 3171a 10 1675—2 3 3306 3 10 22 5 3 22 3171b 11 1675—3 4 3307 4 11 23 6 4 23 3171c 12 167.5—4 5 3308 5 12 24 7 5 24 317 Id 13 167,5—5 6 3309 6 13 25 8 6 25 3171e 14 1675—6 7 3310 7 14 26 9 7 26 317 If 15 1675—7 8 3311 8 15 27 10 8 27 3171g 16 1675—8 9 3312 9 16 28 11 9 28 317111 17 1675—9 10 3313 10 17 29 12 10 29 31711 17 1675—10 11 3314 11 18 30 13 11 30 3171J 19 1675—11 12 3;J15 12 19 31 14 12 31 3171k 20 1675—12 13 3316 13 20 32 15 13 32 31711 21 1675—13 14 3317 14 21 33 16 14 33 3171in 22 1675—14 15 3318 15 '>2 34 17 15 34 317111 23 167.5—15 16 3319 16 23 35 18 16 35 31710 24 1075—16 17 3320 17 24 36 19 17 36 3171p 25 1675—17 18 3321 18 25 37 20 18 37 3171q 26 1675—18 19 3322 19 26 38 21 19 38 3171r 27 1675—19 20 3323 20 27 39 22 20 39 3171s 28 1675—20 21 3324 21 28 40 23 21 40 3171t 29 1675—21 22 3325 22 29 41 24 22 41 3171U 30 1675—22 23 3326 23 30 42 25 23 42 3171V 31 1675—23 24 3327 24 31 43 26 24 50 3171W 32 1675—53 25 3328 25 32 44 27 25 51 3171X 33 1675—51 26 3329 26 33 45 28 26 52 3171y 34 1675—52 27 3330 27 34 46 29 27 53 3171Z 35 1675—53 28 3331 28 35 47 30 28 54 3172 36 1675—54 29 3332 29 36 48 31 29 55 3172a 37 1675 — 55 30 3333 30 37 49 32 30 60 3172b 38 1676 31 3334 31 38 50 33 31 61 3172c 39 1676—1 32 3335 32 39 51 34 32 62 3172(i 40 1670—2 33 3336 33 40 52 35 33 m 3172e 41 107&— 3 34 3337 34 41 53 36 34 64 3172f 42 1676—4 35 3338 35 42 54 37 35 65 3172g 43 1676—5 36 3339 36 43 55 38 36 66 3172h 44 1676—6 37 3340 37 44 56 39 37 67 31721 45 1676—7 38 3341 38 45 57 40 38 68 3172J 46 1676—8 39 3342 39 46 58 41 39 69 3172k 47 1676—9 40 .3343 40 47 59 42 40 70 31721 48 1676—10 41 3344 41 48 60 43 41 71 3172m 49 1676—11 42 3345 '12 49 61 44 42 72 8172n 50 1676—12 43 3346 43 50 62 45 43 73 3172o 51 1676—13 44 3347 44 51 63 46 44 74 3172p 52 1676—14 45 3348 45 52 64 47 45 75 3172q 53 1676—15 46 3349 46 53 65 48 46 76 3172r 54 1676—16 47 3350 47 54 66 49 47 77 3172s 55 1676—17 48 3351 48 55 67 50 48 78 3172t 56 1676—18 49 3352 49 56 68 51 49 79 3172U 57 167&— 19 50 3353 50 57 69 52 50 80 3172V 58 1676—20 51 3354 51 58 70 53 51 90 3172w 59 1676—21 52 3355 52 59 71 54 52 91 3172X 00 1076—22 53 3356 53 60 72 55 53 92 3172y 61 1676—23 54 3357 54 61 73 56 54 93 3172Z 62 1676—24 55 3358 55 62 74 57 55 94 3173 63 1676—25 56 3359 56 63 75 58 56 95 3173a 64 1676—26 57 3360 57 64 76 59 57 96 3173b 65 1676—2? 58 3361 58 65 77 60 58 97 3173e 66 1676—28 59 3362 59 66 78 61 59 98 3173(1 67 1676—29 60 3363 60 67 79 62 60 110 3173e 68 1677 61 3364 61 68 80 63 61 111 3173f 69 1677—1 62 3365 62 69 81 64 62 112 3173g 70 1677—2 63 3366 03 70 82 65 63 113 3173h 71 1677—3 64 3367 64 71 83 66 64 114 31731 72 1677—4 65 3368 65 72 84 67 65 115 3173J 73 1677—5 66 3369 66 73 85 68 66 116 3173k 74 1677—6 67 3370 67 74 86 69 67 117 31731 75 1677—7 68 3371 68 75 87 70 68 118 3 17;; in 76 1677—8 69 3372 60 76 88 71 69 119 3173n 77 1677—9 APPENDIX. 379 OriBinal Draft Ariz. 111. Kan. Md. Mich. Neb. N. V. Ohio S 70 § 3373 § 70 § 77 § 89 § 72 § 70 §130 § 31730 §78 § 1678 71 3374 71 78 90 73 71 131 317.5P 79 1678—1 72 3375 72 79 91 74 72 132 31T3q 80 1678—2 73 3376 73 80 92 75 73 133 3173r 81 1678—3 74 3377 74 81 93 76 74 134 3173s 82 1678—4 75 3378 75 82 94 77 75 135 3173t 8:5 1078- 5 76 3379 76 83 95 78 76 136 3173U 84 1078—6 77 3380 77 84 96 79 77 137 3173V 85 1678—7 78 3381 78 85 97 80 78 138 3173W 86 1678—8 79 3382 79 86 98 81 79 139 317:;x 87 1678—9 80 3383 80 87 99 82 80 140 3173.V 88 ](i78— 10 81 3384 81 88 100 83 81 141 3173Z S9 1678-11 82 3385 82 89 101 84 82 142 3174 90 1678—12 83 3386 83 90 102 85 83 143 3174a 91 1678-13 84 3387 84 91 103 86 84 144 3174b 92 1678—14 85 3388 85 92 104 87 85 145 3174c 93 1678—15 86 3389 86 93 105 88 86 146 3174d 94 1678—16 87 3390 94 106 89 147 3174e 95 1678—17 88 3391 87 95 107 90 87 148 3174f 96 1678—18 89 3392 88 96 108 91 88 160 3174? 97 1678—19 90 3393 89 97 109 92 89 161 3174J1 98 1678—20 91 3394 90 98 110 93 90 102 31741 99 1678—21 92 3395 91 99 111 94 91 163 3174J 100 1678—22 93 3396 92 100 112 95 92 164 3174k 101 1678—23 94 3397 93 101 113 96 93 165 31741 102 1678—24 95 3398 94 102 114 97 94 166 3174m 103 1678—25 96 3399 95 103 115 98 95 167 3174U 104 107S— 2<> 97 3400 96 104 116 99 96 168 31740 105 1678—27 98 3401 97 105 117 100 97 169 3174p 106 1678—28 99 3402 98 106 118 101 98 170 3174q 107 1678—29 100 3403 99 107 119 102 99 171 31741- 108 1678—30 101 3404 100 108 120 103 100 172 3174s 109 1678—31 102 3405 101 109 121 104 101 173 3174t 110 1678—32 103 3406 102 110 122 105 102 174 3174U 111 1678—33 104 3407 103 111 123 106 103 175 3174V 112 1678—34 105 3408 104 112 124 107 104 176 3174W 113 1678—35 106 3409 105 113 125 108 105 177 3174X 114 1678—36 107 3410 106 114 126 109 106 178 3174y 115 1678—37 108 3411 107 115 127 110 107 179 3174Z 116 1678—38 109 3412 108 116 128 111 108 180 3175 177 1678—39 110 3413 109 117 129 112 109 181 3175a 118 1678—40 111 3414 110 118 130 113 110 182 3175b 119 1678—41 112 3415 111 119 131 114 111 183 3175c 120 1678—42 113 3416 112 120 132 115 112 183 3175c 121 1678—42 114 3417 113 121 133 116 113 185 3175e 122 1678-^4 115 3418 114 122 134 117 114 186 317.5f 123 1678—45 116 3419 115 123 135 118 115 187 3175g 124 1678—46 117 3420 116 124 136 119 116 188 3175h 125 1678--t7 118 3421 117 125- 137 120 117 189 31751 126 1678—48 119 3422 118 126 138 121 118 200 3174J 127 1679 120 3423 119 127 139 122 119 201 3175k 128 1679—1 121 3424 120 128 140 123 120 202 31751 129 1679—2 JOO 3425 121 129 141 124 121 203 3175m 130 1679—3 123 3426 l'>2 130 142 125 122 204 3175n 131 1670 — 4 124 3427 123 131 143 126 123 205 3175o 1.32 1679-5 125 3428 124 132 144 127 124 206 3175p 1.33 1679—6 126 3429 125 133 145 128 125 210 3175q 134 1680 127 3430 126 134 146 129 126 211 31751- 135 16S0-A 128 3431 127 135 147 1.30 127 212 3175s 136 16S0-B' 129 3432 128 136 14S 131 128 213 3175t 1.37 16S0-C ' 130 8433 129 137 149 132 120 214 3175U 138 lt^s()-D 131 3434 130 138 150 1.33 130 215 3175V 1.39 16.S0-F3 132 34.35 131 139 151 134 131 220 3175W 140 16S0-F 133 3436 132 140 152 1.35 1.32 221 3175X 141 lO'^orr 134 3437 133 141 153 136 133 222 3175V 142 lOsii-lI 135 3438 134 142 154 137 134 003 ai75z 143 16S0-I 136 3439 135 143 155 138 135 224 3176 144 ir,so-.T 137 3440 136 144 156 139 136 224 3176.1 145 16SO-K 138 3441 137 145 1.57 140 137 225 3176h 146 1680-L 380 NEGOTIABLE INSTRUMENTS LAW. Original Draft Ariz Kan. Md. Neb. N. Y Ohio § 139 § 3442 §138 §146 §158 §141 §138 §226 140 3443 139 147 159 142 139 227 141 3444 140 148 100 143 140 228 142 3445 141 149 101 144 141 229 143 3446 142 150 162 145 142 240 144 3447 143 151 163 146 143 241 145 3448 144 152 164 147 144 242 146 3449 145 153 165 148 145 243 147 3450 146 154 166 149 146 244 148 3451 147 155 167 150 147 245 149 3452 148 156 168 151 148 246 150 3453 149 157 169 152 149 247 151 3454 150 158 170 153 150 248 152 3455 151 159 171 154 151 260 153 3456 152 160 172 155 152 261 154 3457 153 161 173 156 153 262 155 3458 154 162 174 157 154 263 156 3459 155 163 175 158 155 264 157 3460 156 164 176 159 156 2<35 158 3461 157 165 177 160 157 266 159 3462 158 166 173 161 158 267 160 3463 159 167 179 162 159 268 161 3464 160 168 180 163 100 280 162 3465 161 169 181 164 161 281 163 3466 162 170 182 165 162 282 164 3407 163 171 183 166 163 283 165 3408 164 172 184 167 164 284 166 3469 165 173 185 168 165 285 167 3470 166 174 186 169 166 286 168 3471 167 175 187 170 167 287 169 3472 168 176 188 171 168 288 170 3473 169 177 189 172 169 289 171 3474 170 178 190 173 170 300 172 3475 171 179 191 174 171 301 173 3476 172 180 192 175 172 302 174 3477 173 181 193 176 173 303 175 3478 174 182 194 177 174 304 176 3479 175 183 195 178 175 305 177 3480 176 184 196 179 176 306 178 348 L 177 185 197 ISO 177 310 179 3482 178 186 196 181 178 311 180 3483 179 187 199 182 179 312 181 3484 180 188 200 183 180 313 182 3485 181 ISO 201 184 181 314 183 3486 182 190 202 185 182 315 184 3487 183 191 203 186 183 320 185 3487 184 192 204 187 184 321 186 3487 185 193 205 188 185 322 187 3487 186 194 206 189 186 323 188 3487 187 195 207 190 187 324 189 3487 188 196 208 191 188 325 190 189 1 13 1 1 191 3487 190 2 14 9 189 o 192 3488 191 3 15 2 190 3 193 3489 192 4 16 2 101 4 194 3490 193 5 17 2 192 5 195 194 6 18 2 193 6 196 3491 195 7 19 2 194 7 3176c 3176d 3176e 3176f 3176g 317611 31761 3176J 3176k 31701 3176m 3176n 31760 3176p 8176q 3176r 3176s 3176t 3176u 3176V 3176 .v 3176X 3176y 3176Z 3177 3177a 3177b 3177c 3177d S177e 3177f 3177^ 317711 31771 3177J 3177k 31771 3177m 3177n 31770 3177p 3177q 3177r 3177s 3177t 3177U 3177V 3177W 3177X 3177y 3177Z 3178 3178a 3178b 3178c 3178(1 3178e §147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 :191 192 193 194 195 196 197 1 2 3 4 1680-M 1680- N' 1680-Ot 1680-P< 1681 1681—1 1681—2 1681—3 1681—4 1681—5 1681- 6 1681-7 1681—8 1681—9 1631-10 1081—11 1681—12 1681—13 1681—14 1681—15 16S1— 16 16S1— 17 1631—18 1681—19 1681—20 1681—21 16S1— 22 1681—23 1681—24 7681—25 1681—26 1681-27 1681—28 l&Sl— 29 1081—30 1681—31 1681—32 1681-33 1681-34 1681—35 1681—36 1681—37 1681—38 1681-39 1681—40 1684 1684—1 1684—2 1684—3 1684—4 lO'il— 5 1675 1675 1675 1675 1675 1675 1675 APPENDIX. C WHERE THE VARIOUS LAAVS ARE FOUND AND WHEN THEY TAKE EFFECT. Alabama, — Code of 1907, page 1063. In effect January 1, 1908. Arizona,— R. S. 1901, Title XLIX. In effect September 1, 1901. Colorado,— Laws of 1897, ch. 64. Approved April 20th, 1897. Connecticut, — Laws of 1897, ch. 74. Approved April 5, 1897. District of Columbia,— Laws of 1899 (U. S. Stats.) ch. 47. lu effect April 3, 1899. Florida,— Laws of 1897, ch. 4524. Approved June 1, 1897. Hawaii,— Laws of 1907, Act 89. In effect April 20, 1907. Idaho,— Laws of 1903, page 380. In effect March 10, 1903. Illinois, — Laws of 1907, page 403. Approved June 5, 1907. Iowa,— Laws 1902, ch. 130. Approved April 12, 1902. Kansas, — Laws of 1905, ch. 310. In effect June 8, 1905. Kentucky,— Acts 1904, ch. 102. Approved March 24, 1904. Louisiana, — Laws of 1904, Act 64. Approved June 29, 1904. Maryland,— Laws of 1898, ch. 119. Approved March 29, 1898. Massachusetts, — Laws of 1898, ch. 533. In effect January 1, 1899. Massachusetts,— Laws of 1899, ch. 130. In effect March 6, 1899. Michigan, — Public Acts 1905, page 389. Approved June 16, 1905. Missouri, — Laws of 1905, page 243. Approved April 10, 1905. Montana,— Laws of 1903, ch. 121. In effect March 7, 1903. Nebraska,— Laws of 1905, ch. 83. In effect August 1, 1905. Nevada,— Laws of 1907, ch. 62. In effect May 1, 1907. New Hampshire, — Laws of 1909, ch. 123. Approved January 1, 1910. New Jersey, — Laws of 1902, ch. 184. Approved April 4, 1902. New Mexico,— Laws of 1907, ch. 83. Approved March 21, 1907. 381 382 NEGOTIABLE INSTRUMENTS LAW. New York,— Laws of 1897, ch. 612. Became a law May 19, 1897. New York,— Laws of 1898, ch. 336. Became a law April 20, 1898. North Carolina,— Laws of 1899, ch. 733. In effect March 8, 1899 North Dakota,— Laws of 1899, ch. 113. Approved March 7, 1899. Oklahoma,— Laws of 1909, ch. 24. Approved March 20, 1909. Ohio, — Laws of 1902, page 162. In effect January 1, 1903. Oregon, — Laws of 1899, page 18. Approved February 16, 1899. Pennsylvania, — Laws of 1901, page 194. In effect September 2, 1901. Ehode Island,— Laws of 1899, ch. 674. In effect July 1, 1899. Tennessee,— Laws of 1899, ch. 94. In effect May 16, 1899. Utah,— Laws of 1899, ch. 83. In effect July 1, 1899. Virginia,— Laws of 1897-8, ch. 866. Approved March 3, 1898. Washington,— Laws of 1899, ch. 149. In effect March 22, 1899. West Virginia,- Acts of 1907, ch. 81. In effect January 1, 1908. Wisconsin,— Laws of 1899, ch. 356. In effect May 15, 1899. Wyoming, — Laws of 1905, ch. 43. In effect February 15, 1905. APPENDIX D. Schedule of Statutes Repealed by the Various Negotiable Instru- ments Laws. ALABAMA, statute contains no statement of express repeals. ARIZONA, statute contains no statement of express repeals. COLORADO, Laws 1897, c. 64, repeals (§ 197) sections 101 to 115 inclusive, and sections 1630, 2463, 2464 and 2465 of the General Statutes of 1883, and all other inconsistent acts or parts of acts. CONNECTICUT, Laws 1897, c. LXXIV, repeals (§ 197) sections 1858, 1859, 1860 and 1863 of the General Statutes. DISTRICT OF COLUMBIA, U. S. Statutes at Large 1897-99, e. 47, repeals (§ 190) all inconsistent laws. FLORIDA, Laws 1897, c. 4524, No. 10, repeals (§ 190) aU con- flicting laws or parts of laws. IDA.HO, section 197 repeals of the laws enumerated in the schedules thereto annexed that portion specified in the last column (schedule is omitted in the laws as published). ILLINOIS, section 196 repeals section 1268 of an act entitled "An Act to Revise the Laws in Relation to Promissory Notes, Bonds, Due Bills, and other Instruments in "Writing." Approved March 18, 1874. In force July 1st, 1874, and sections 10 and 11 of an act entitled "An Act to Provide for the Appointment, Qualification and Duties of Notary Publics and Certifying their Official Acts." Approved April 5, 1872. In force July 1, 1872. IOWA, section 197 repeals the following enumerated sections of Title 15, Chapter 3 of the Code ; sections 3043, 3045, 3049, 3050, 3051, 3052, 3054 and 3055. 383 384 NEGOTIABLE INSTRUMENTS LAW. KANSAS, section 199 repeals sections 540-557 A of Dassler's General Statutes of 1901, and all acts and parts of acts in con- flict herewith. KENTUCKY, section 195 repeals all laws inconsistent with the act. LOUISIANA, statute contains no express repeal. MARYLAND, Laws 1898, c. 119. No express repeals. MASSACHUSETTS, Acts and Resolves 1898, c. 533, repeals (§ 197) all inconsistent acts and parts of acts. MICHIGAN, section 192 repeals all acts and parts of acts in- consistent with the foregoing provisions of the act. MISSOURI, section 197 repeals all acts and parts of acts incon- sistent herewith. MONTANA, section 197 repeals all acts and parts of acts in con- flict herewith. NEBRASKA, section 197 repeals the original chapter of the Com- piled Statutes of Nebraska for 1903. NEVADA, section 197 repeals all acts or parts of acts inconsistent with or repugnant to the provisions of the act. NEW HAMPSHIRE, section 196 repeals all acts and parts of acts inconsistent with the act. NEW JERSEY, section 197 repeals of the laws enumerated in the schedules thereto annexed that portion specified in the last column (schedule is omitted in the laws as published). NEW MEXICO, section 197 repeals all acts and parts of acts in conflict herewith and all acts relative to negotiable instruments. NEW YORK, Laws 1897, c. 612 (Amendments, Laws 1898, c. 361), repeals (Schedule following section 341) : R. S., pt. II., Ch. 4, tit. II AH Bills and notes. Laws 1835 141 All Notice of protest; how given. 1857 416 All Commercial paper. 1865 309 All Protest of foreign bills, etc. 1870 438 All Negotiability of corporate bonds; how limited. 1871 84 All Negotiable bonds; how made non- negotiable. 1873 595 All Negotiable bonds; how made ne- gotiable. 1877 65 1,3. Negotiable instruments given for patent rights. APPENDIX. 385 1887 461 All Effect of holidays upon payment of commercial paper. 1888 229 All One hundredth anniversary of the inauguration of George Washing- ton. 1891 262 1. Negotiable instruments given on a speculative censideration. 1894 607 All Days of grace abolished. NORTH CAROLINA, Pub. Laws 1899, c. 733, repeals (§ 197) all laws and parts of laws in conflict with the provisions of this act. The same section also provides: "That nothing in this act shall authorize the enforcement of an authorization to confes? judgment or a waiver of homestead and personal property exemptions or a provision to pay counsel fees for collection incorporated in any of the instruments mentioned in this act; but the mention of such provisions in such instrument shall not affect the other terms of such instruments or the negotiability thereof, the laws now in force with regard to days of grace shall remain in force and shall not be repealed by this act." NORTH DAKOTA, Laws 1899, c. 113. No express repeals. OHIO, section 3178 c, subdivision 2, repeals the original sections 3171, 3172, 3173, and 3174, and original sections 3175, 3176, and 3177, as amended March 12, 1896 (92 Ohio Laws 61-62), and original section 3178 of the Revised Statutes of Ohio. OKLAHOMA, section 190 repeals all acts and parts of acts in conflict herewith. OREGON, Laws 1899, p. 18, repeals (§ 193) all inconsistent acts or parts of acts. PENNSYLVANIA, section 197 repeals all acts and parts of acts inconsistent herewith. RHODE ISLAND, Laws 1899, c. 623, p. 24, repeals (§ 8) sections 4, 5, 7 and 9 of Chapter 166 of the General Laws. TENNESSEE, Laws 1899, c. 94. No express repeals. UTAH, Laws 1899, c. 83, repeals (§ 197) title 46 Revised Statutes 1898, being sections 1553 to 1665 inclusive, and all other con- flicting acts. yiRGINIA, Acts Assem. 1897-98, c. 866, repeals (§ 197) all con- flicting acts and parts of acts. This section also provides that Opp. — Sel. — 25 386 NEGOTIABLE INSTRUMENTS LAW. "Of the laws enumerated in the schedules hereto annexed, that portion specified in the last column is repealed," but no schedule is annexed and the act is defective in this respect. WASHINGTON, Laws 1899, c. CXLIX, repeals (§ 197) all incon- sistent acts and parts of acts. WEST VIRGINIA, in section 197 it is provided that section 9 of Chapter 99 of the Code of West Virginia and all acts and parts of acts in conflict herewith are hereby, to that extent, repealed. WISCONSIN, Laws 1899, c. 356, repeals (2 immediately following section 1684-6) all inconsistent acts. This section also repeals sections 176, 1675, 1677, 1678, 1679, 1680, 1681, 1682, 1683, 1684, of the Revised Statutes of 1878. Sections 1676, 1944, 1945, 4143, 4194, 4425, and 4458, are not affected by the act, being expressly saved from repeal. Sections 1944 and 1945 just referred to are considered on pages 44 and 239 of this work, and sections 1676, 4194 and 4425 are con- sidered on page 47 of this work. Section "4133" as it is printed in the act is probably a mis- take, the section meant being 4193 which provides: "In all actions brought on promissory notes, or bills of exchange, by the indorsee, the possession of the note shall be presumptive evidence that the same was indorsed by the persons by whom it purports to be indorsed." Section 4458 provides that "Any person who shall fraudulent- ly affix to any instrument or writing purporting to be a note, draft, or other evidence of debt issued by any corporation, a fictitious or pretended signature, purporting to be the r:ignature of an officer or agent of such corporation, with intent to pass the same as true, it shall be deemed a forgery, though no such person may ever have been an officer or agent of such corpora- tion, nor such corporation ever have existed. ' ' WYOMING, section 197 repeals all acts and parts of acts in con- flict with the provisions of this act. TABLE OF CASES. References are to Pages. A. A. B. Farquhar Co. v. Higham, 196, 199, 206. Aborn v. Bosworth, 13. Abramowitz v. Abramowitz, 204. Acme Food Co. v. Older, 100. Adair v. Egland, 315. Adam v. Manufacturers' & Traders' Nat. Bank, 148, 192. Adams v. Addington, 60. V. Kennedy, 102. V. Leavens, 159. V. Leland, 262, 264. V. Seaman, 60. V. Wright, 272, 297. Adler v. Levinson, 283. Adoue V. Fox, 151. Aebi V. Bank of Evansville, 222, 255, 265, 340. Aetna Nat. Bank v. Charter Oak Life Ins. Co., 102, 105. V. Winchester, 315. Aiken v. Marine Bank, 181. Akin V. Jones, 116. Alabama Nat. Bank v. Halsey, 233. Albany County Bank v. People's Ice Co., 221, 223. Albert v. Hoffman, 226. Albright v. Griffin, 71. Alcock V. McKain, 185. Alexander v. Oaks, 64. Alexander & Co. v. Hazelrigg, 11, 233. Allen V. Avery, 250, 251. V. Bank of U. S., 100. Allen V. Brown, 198. V. Corn Exchange Bank, 179. V. Eldred, 281. V. Kramer, 257. V. Suydam, 118. Allison V. Hollembeak, 4. Allyn V. Allyn, 159. Almich V. Downey, 22, 235. Altman v. Rittershofer, 60. Alvord V. Baker, 139. American Bank v. Jenness, 216, 320, 321. American Exchange Nat. Bank v. American Hotel Victoria Co., 294. V. N&w York Belting & Pack- ing Co., 225. American Immigrant Co. v. Clark, 63. American Ins. Co. v. Callahan, 52. American Nat. Bank v. American Wood-Paper Co., 42, 58. V. Fountain, 229. V. Junk Bros. Lumber & Mfg. Co., 126, 291. V. Sprague, 87. Amherst Academy v. Cowls, 160. Amsinck v. Rogers, 13, 15, 269. Anderson v. Dundee State Bank, 77. V. First Nat. Bank, 256. V. Gill, 258. v. Pearce, 46. v. Rodgers, 258. Andrew v. Blachly, IS. 387 388 TABLE OF CASES. References Andrews v. Bond, 180. V. German Nat. Bank, ISO. V. Herriot, 43. Androscoggin Bank v. Kimball, 20, 236. Anglo-California Bank v. Ames, 233. Ankeny v. Henry, 206. Apperson v. Bynum, 262. Apple V. Lesser, 285. Arbuckle v. Templeton, 111. Archer v. Claflin, 19, 44. V. Shea, 205. Arkansas Valley Smelting Co. v. Belden Min. Co., 158. Armour Bros. Banking Co. v. Riley County Bank, 173. Armstrong, In re, 135. .\rmstrong v. Chadwick, 304. V. Lewis, 276. V. Pomeroy Nat. Bank, 78. V. Scott, 189. V. Thurston, 293. vrnd V. Aylesworth, 225, 229. V. Heckert, 43. V. Sjoblom, 232. Arnold v. Bryant, 199. V. Dresser, 249, 262, 263, 264. V. Kinloch, 293. V. Rock River Val. R. Co., 87. V. Sprague, 140, 149. Arnot's Adm'r v. Symonds, 165. Arpin v. Owens, 193. Arthurs v. Hart, 234. Artisans' Bank v. Backus, 293, Aukland v. Arnold, 224, 225. Aurora v. West, 233. Austell V. Rice, 95. Austin V. Burns, 91. V. Papanti, 136. V. Rodman, 118. Auten V. Gruner, 223. Averett's Adm'r v. Booker, S3, 93. Averill v. Loucks, 327. are to Pages. Avon Springs Sanitarium Co. v. Kellogg, 95. Ayer v. Hutchins, 216. Aymar v. Beers, 121. Ayrault v. Pacific Bank, 270. Ayres v. Campbell, 159. B. Babcock, In re, 192. Babcock v. Benson, 36. Bachellor v. Priest, 121. Bacigalupo v. Parrilli, 281. Backus v. Danforth, 71, 72, Bacon v. Fitch, 82. v. Hanna, 302. V. Page, 66. Bade v. Feay, 18, 100. Baer v. Leppert, 247, 302. Bailey v. Dozier, 274. V. Southwestern Railroad Bank, 131. Baker v. Gregory, 233, V. Leland, 47. V. Martin, 198. Baldwin v. Daly, 337. V. Freydendall, 23. Ballou V. Boland, 114. Ballston Spa Bank v. Marine Bank,, 30, 309. Baltimore & Ohio R. Co. v. First Nat. Bank, 115, 131, 133, 148. Bank v. Looney, 33, 218, 221. V. Neal, 236. Bank of Alexandria v. Swann, 293. Bank of America v. Waydell, 174, 220. v. Woodworth, 85. Bank of Antigo v. Union Trust Co., 116. Bank of Benson v. Jones, Z7. Bank of Carroll v. Taylor, 87. Bank of Columbia v. Lawrence, 301. TABLE OF CASES. 389 Bank of Columbia v. Patterson, 43. Bank of Cooperstown v. Woods, 271, 293. Bank of Cumberland v. Maybcrry, 22. Bank of England v. Vagliano Bros., 2, 79, 80. Bank of Gilby v. Farnsworth, 191. Bank of Guntersville v. Jones Cot- ton Co., 12, 239. Bank of Houston v. Day, 216. Bank of. Jamaica v. Jefferson, 198. Bank of Laddonia v. Bright-Coy Commission Co., 8, 13. Bank of Lassen County v. Sherrer, 74. Bank of Linsborg v. Ober, 286. Bank of Marietta v. Pindall, 85. Bank of Metropolis v. First Nat. Bank, 176. Bank of Monticello v. Dooly, 92, 93. Bank of Montpelier v. Montpelier Lumber Co., Ill, 196, 266, 304. Bank of Morgan City v. Herwig, 18, 102. Bank of Morganton v. Hay, 151, 180. Bank of Morehead v. Hernig, 223, 229, 231. Bank of Newberry v. Richards, 85. Bank of Old Dominion v. Mc- Veigh, 305. Bank of Orleans v. Merrill, 47. Bank of Pittsburgh v. Neal, 14, 147, 213. Bank of Port Jervis v. Darling, 289. Bank of Red Oak v. Orvis, 125, 249. Bank of Sherman v. Apperson & Co., 51. Bank of Sonoma County v. Gove, 241. Bank of the State v. Bank of Cape Fear, 262, are to Pages. Bank of State of Missouri v. Vaughan, 286. Bank of Syracuse v. Hollister, 251. Bank of United States v. Davis, 287. V. Goddard, 287. V. Smith, 145, 185. Bank of University v. Tuck, 233. Bank of Utica v. Bender, 302. v. Smith, 251. Bank of Vergennes v. Cameron, 281. Bank of Washington v. Pierson, 289. v. Triplett, 125. Bank of Winona v. Wofford, 74. Barbaroux v. Waters, 246, 284. Barclay v. Weaver, 304. Barden v. Hornthal, 4. Baring v. Clark, 330. Barker v. Bell, 9. V. Parker, 259. Barlov^r v. Buckingham, 22. V. Coggan, 248. v. Gregory, 7. Barnard v. Gushing, 112. Barnett v. Juday, 112. V. Spencer, 168. Barrett v. Dodge, 36. Barry v. Crowley, 248. Bartlet v. King, 9. Bartlett v. Robinson, 300. V. Tucker, 30. Barton v. Trent, 202. Basche v. Philips, 129. Bass v. Wellesley, 328. Bassenhorst v. Wilby, 66, 265. Batchelder v. White, 315. Bates v. Boston & N. Y. Cent. R. Co., 43. Battemen v. Butcher, 99. Raumeister v. Kuntz, 196, 265, 281, 304. Baxter v. Camp, 318. 390 TABLE OF CASES. References Bay V. Freazier, 72. Bayley v. Taber, 21, 23, 233. Beall V. Pearre, 99, 100. Beals V. Peck, 290. Beardsley v. Webber, 47. Beauregard v. Knowlton, 246. Beck V. Mailer, 229. Bedford Bank v. Acoam, 326. Bedford Commercial Ins. Co. v. Covell, 33. Beecher v. Buckingham, 159. Beede v. Real Estate Bank, 325. Been v. Farrell, 308. Beer v. Clifton, 66. Belden v. Hann, 171. Belford v. Beatty, 109. Belknap v. National Bank of North America, 316. Bell V. Alexander, 116. V. Hagerstown Bank, 294. V. Waudby, 30, 309. Bellows V. Folsom, 37. Bellows Falls Bank v. Rutland County Bank, 49. Benedict v. Cowden, 314. V. Kress, 228. V. Schmieg, 249 . Benjamin v. Rogers, 97. V. Tillman, 44. Benn v. Kutzschau, 60. Benton v. Sikyta, 225. Berenson v. London & Lancashire Fire Ins. Co., 48. Berkeley v. Tinsley, 104. Bernhard v. Brunner, 37. Bettis V. Bristol, 180. V. Schrieber, 272. Bettison v. Jennings, 326. Bibb V. Skinner, 167. Bickford v. First Nat. Bank, 33. Biesenthall v. Williams, 12, 46. Bigelow Co. V. Automatic Gas Pro- ducer Co., 97. Biggerstaff v. Marston, 233. are to Pages. Biggs V. Piper, 22. Bingham v. Stewart, 189. Birch V. Fisher, 47. Bird V. Harville, 217. Birmingham Nat. Bank v. Bradley, 205. Bishop V. Dexter, 66, 67. Black V. Enterprise Ins. Co., 175. V. First Nat. Bank, 92, 104, 180, 220, 239. Black River Sav. Bank v. Edwards, 94. Blaine v. Bourne, 173. Blake v. Coleman, 112. V. Hamilton Dime Sav. Bank Co., 14, 194, 195. Blakeslee v. Hewett, 173, 247, 287. Blakey v. Johnson, 314. Bledsoe v. Fisher, 168. Blydenburgh v. Thayer, 159. Board of Com'rs Bartholomew County v. Bright, 8. Board of Education v. Duparquet, 159. Bodley v. Anderson, 327. Boggs v. Branch Bank at Mobile, 273. V. Wann, 101. Bogue v. Melick, 198. Boles V. Harding, 78, 190. Bolles v. Walton, 31. Bond v. Dolby, 6. Bookheim v. Alexander, 218. Bookstaver v. Jayne, 37, 99. Booth v. Powers, 308. Boozer v. Anderson, 60. Borden v. Southerland, 43. Borland v. PhilHps, 321. Born v. First Nat. Bank, 150. Boss V. Hewitt, 214. Boston Nat. Bank v. Jose, 327. Boston Steel & Iron Co. v. Steuer, 24, 26, 27, 97, 214, 215, 237. Bostwick V. Dodge, 232. TABLE OF CASES. 391 References Boswell V. Citizens' Sav. Bank, 15, 115. Bosworth V. Jacksonville Nat. Bank, 114. Bothell V. Schweitzer, 312. Bowles V. Lambert, 46. Bowman v. First Nat. Bank, 173. V. McChesney, 65. V. St. Louis Times, 325. Boyce v. Edwards, 134, 152. Boyd V. Beebe, 210. V. Cleveland, 277. V. Johnston, 33. V. McCann, 25. Boynton v. McDaniel, 224. Brabazon v. Seymour, 144. Bradford v. Cooper, 273. V. Prescott, 183. Bradley v. McClellan, 193. Brailsford v. Williams, 288. Branch Bank at Montgomery v. Gaflfney, 66. Brandt v. Mickle, 304. Brem v. Covington, 131. Brent v. Washington Bank, 289. Brenzer v. Wightman, 72. Brewster v. McCardle, 23. V. Shrader, 98, 219. Briggs V. Partridge, 31. Brigham v. Potter, 94. Brill V. Tuttle, 114. Brill Co. V. Norton & Tanton St. R. Co., 103, 105. Brinkman v. Hunter, 152. Bristol V. Warner, 70, 93, 94. Britt V. Lawson, 249. Britton v. Dierker, 315. Brook V. Teague, 223. • V. Vannest, 175. Brookheim v. Alexander, 234. Brooks v. Higby, 262, 271. V. Sullivan, 98, 220. Brotherton v. Street, 176. Brewer v. Wooten, 286. are to Pages. Brown v. Ames, 205. v. Butchers' & Drovers' Bank, 18, 29, 168. V. Donnell, 206. V. Ferguson, 13. V. Oilman, 46, 82. v. Jones, 293. V. Jordahl, 42, 44. V. Leckie, 149. V. Lusk, 15. V. Montgomery, 203. V. Nichols, 335. V. Parker, 31. V. Reed, 314. v. Richardson, 64. Brownlee v. Arnold, 113. V. Madison County Com'rs, 53. Bruck V. Lambeck, 204. Brunswick-Balke-Collender Co. v. Boutell, 33. Brunswick Bank v. Sewall, 321. Brush V. Reeves' Adm'rs, 197. Bryant v. La Banque, 34. v. Merchants' Bank, 305. Buchanan v. Wren, 52. Buck V. Davenport Sav. Bank, 168. Bucklen v. Johnson, 166. Buckner v. Finley, 13. Bull V. Bank of Kasson, 63. v. First Nat. Bank, 257. V. Sims, 53. Bullard v. Randall, 131. Bullock V. Taylor, 60. Bumont v. Pope, 118. Burbank v. Beach, 286, Burch V. Daniel, 313. Burgess v. Chapin, 203. Burgettstown Nat. Bank v. Nil!, 276, 277. Burke v. Dulaney, 36. V. Utah Nat. Bank, 151. Burkhalter v. Second Nat. Bank, 327. 392 TABLE OF CASES. References are to Pages. Burnham v. Allen, 108. V. Merchants' Exch. Bank, 228. V. Webster, 287. Burnheisel v. Field, 110. Burrus v. Life Ins. Co., 122. Burson v. Huntington, 36. Butler V. Cams, 160, 308. V. Paine, 63. Buzzell V. Tobin, 234, 238. Byar's Garnishees v. Griffin, 158. Byers v. Tritch, 198, 317. Byington v. Simpson, 95. Bynum v. Apperson, 262, 278. Byrd v. Bertrand, 139. Cady V. Bradshaw, 265. Cahall V. Citizens' Mut. Bldg. Ass'n, 9. California Bank v. Sayre, 309. Callahan v. Bank of Kentucky, 126, 291. Callanan v. Edwards, 159. Calvert v. Dimon, 227. Cambell P. P. & M. Co. v. Jones, 108. Camden Nat. Bank v. Fries-Breslin Co., 99. Camp V. Carpenter, 160, 308. V. Knox Co., 54. Campbell v. Brown, 240. V. McCormac, 94. V. Pettengill, 144. Canadian Bank of Commerce v. Coumibe, 192. V. McCrea, 46. Canajoharie Nat. Bank v. Diefen- dorf, 216, 225, 228. Canfield v. Mcllwaine, 183. Capital City Ins. Co. v. Quinn, 191. Capital City State Bank v. Des Moines Cotton-Mill Co., 102. Carmody v. Crane, 62. Carnhan v. Pell, 48. Carnwright v. Gray, 70, 93, 94. Carothers v. Richards, 233. Carpenter v. Farnsworth, 75. Carr v. National Security Bank, 116. Carrington v. Waff, 113. Carrol v. Peters, 94. Carroll v. Sweet, 258. Carruth v. Walker, 71, 72. Carson's Adm'rs v. Russell, 122, 128. Casco Nat. Bank v. Clark, 33. V. Shaw, 295. Cason V. Heath, 325. Cassell V. Regierer, IS, 283, 302. Catlin V. Jones, 171. Cauthen v. Central Georgia Bank, 208. Cayuga County Bank v. Bennett, 289. V. Hunt, 248, 250. V. Warden, 293. Cayuga County Nat. Bank v. Purdy, 11, 60. Cecil Bank v. Heald, 97. Cedar Falls Co. v. Wallace Bro- thers, 265. Cellers v. Meachem, 2, 3, 336. Central Bank v. Allen, 262. V. Davis, 305. V. St. John, 272. Central Nat. Bank v. Copp, 309, 327. V. Spratlen, 114. Central Railroad v. First Nat. Bank of Lynchburg, 176. Chaddock v. Vanness, 196. Chalmers v. McMurdo, 209. Chamberlain v. Young, 83. Chambers v. Falkner, 229. Champion Empire Min. Co. V. Bird, 229. Chandler v. Kennedy, 61. TABLE OF CASES. 393 References Chanoine v. Fowler, 286. Chapman v. Rose, 224. Chappell V. Spencer, 316. Chariton Plow Co. v. Davidson, 214, 237. Charles v. Denis, 172. Charless v. Lamberson, 6. Charlton v. Reed, 53, 71, Chase v. Behrman, 56. V. Kellogg, 56. V. Senn, 52, 56. Chase Nat. Bank v. Faurot, 42, 43, 232. Chatham Bank v. Allison, 274. Chautauqua County Bank v. Davis, 185. Cheek v. Roper, 125. Cheever v. Pittsburg, S. & L. E. R. Co., 241. Chemical Nat. Bank v. Kellogg, 2, 184, 225, 232. Chicago, C. & L. R. Co. v. West, 283. Chicago R. Equipment Co. v. Mer- chants' Bank, 57, 70, 88. Chickering v. Greenleaf, 51. Child v. Eureka Powder Works, 192. V. Moore, 278. Childress v. Emory, 179. v. Stuart, 63. Chipman v. Foster, 34. Chipmant v. Tucker, 35. Chisholm v. Williams, 327. Chism V. First Nat. Bank, 78. Chistmas v. Russell, 114. Choate V. Stevens, 88. Chrisman's Adm'x v. Harman, 320, 321. Christian County Bank v. Goode, 59, 171. Christy v. Ogle, 100. Chrysler v. Renois, 63. are to Pages. Church V. Clark, 251. V. Howard, 316. V. Stevens, 19, 42. Cisne v. Chidester, 57, 109. Citizens' Bank v. First Nat. Bank, 257, 258, 259, 263, 297. Citizens' Nat. Bank v. Lilienthal, 104, 221. V. Richmond, 313. Citizens' Sav. Bank v. Hays, 290. Citizens' State Bank v. Adams, 308. V. Cowles, 221. City of Carlyle v. Carlyle W., L. & P. Co., 160. City of Seattle v. Liberman, 114. City Bank v. Taylor, 323. City Deposit Bank v. Green, 96, 99, 229. City Nat. Bank v. Clinton County Nat. Bank, 291. V. Jordan, 229. City Sav. Bank v. Hopson, 265. Claflin V. Boorum, 239. V. Wilson, 173, 176, 181. Clapp V. Rice, 208. Clark V. Eldridge, 293. V. Farrington, 206. V. Pease, 233. V. Sigourney, 167. Clarke v. Johnson, 238. Clay City Nat. Bank v. Halsey, 103. Clegg V. Lemessurier, 43. Clifton V. Bank of Aberdeen, 60. Cline V. Guthrie, 238. Closson V. Stearns, 18, 168. Clough V. Holden, 250. Clower V. Wynn, 26. Glutton V. Attenborough, 79. Cocke V. Bank of Tennessee, 290. Coddington v. Bay, 97. Coffin v. Grand Rapids Hydraulic Co., 113. Coflfman v. CampLell, 144, 152. Coghlin V. May, 104. 39^ TABLE OF CASES. References Cole V. Dalton, 12. V. Jessup, 246, 247. V. Tuck, 167. Cole Banking Co. v. Sinclair, 225. Coleman v. Dunlap, 67. Colgate V. Buckingham, 65. Collier v. Gray, 109. Collins V. Bradbury, 52. V. Everett, 198. V. Seay, 191. V. Trotter, 65. Colms V. Bank of Tennessee, 271. Colonial Nat. Bank v. Duerr, 312, 315. Colorado Nat. Bank v. Boettcher, 115, 131, 136. Colt V. Barnard, 66. Columbian Banking Co. v. Bowen, 2, 250, 251, 255. Commercial Bank v. Armstrong, 173. V. Hart, 191. V. Perry, 118. V. Routh, 127. Commercial Bank of Kentucky v. Barksdale, 273, 274. V. Varnum, 13, 269, 272. Commercial Bank of Lexington v. Wood, 334. Commercial Nat. Bank v. Burch, 159. V. Citizens' State Bank, 98, 221. V. Zimmerman, 256. Commonwealth v. Butterick, 110. V. Kelliher, 9. Comparree v. Brockway, 171. Comstock V. Hier, 97. Condon v. Pearce, 171, 205. Conklin v. Roberts, 239. Conmey v. Macfarlane, 94. Conner v. Routh, 68. Connerly v. Planters' & Merchants' Ins. Co., 166, are to Pages. Cowing V. Altman, 21, 22, 35, 257. Cowperthwaite v. Sheffield, 286. Conroe v. Case, 30. Conselyea v. Swift, 103. Consolidation Nat. Bank v. Kirk- land, 221, 222, 229. Continental Nat. Bank v Bell, 98, 220. V. Townsend, 215. V. Wells, 87. Cook V. American Tubing & Web- bing Co., 103, 105, 229. V. Litchfield, 293. V. Mutual Ins. Co., 7. V. Renick, 8. V. Satterlee, 49, 52. Cooke V. Pomeroy, 277. Coolidge V. Brigham, 202, 310. V. Payson, 151. V. Ruggles, 49. V. Wiggin, 207, 208. Cooper V. Bailey, 168, 180. V. Brewster, 70. Corbett v. Clark, 51. V. Fetzer, 177. Corbitt V. Stonemetz, 56. Corcoran v. Doll, 317. Cork V. Bacon, 110. Corn Exchange Bank v. American Dock & Trust Co., 47. Cortelyou v. Maben, 134. Cortland Wagon Co. v. Lynch, 33. Corwith V. Morrison, 67, 255. Cossel V. Regierer, 14. Costelo V. Crowell, 87. Coster V. Thomason, 290. Costin V. Rankin, 294. Cothran v. Collins, 323. Coulter V. Richmond, 198. County Com'rs of Prince George's County V. Com'rs of Laurel, 9. Coursin v. Ledlie's Adm'r, 44. Courtney v. Doyle, 93. Cowan V. Hallack, 144. TABLE OF CASES. 39.3 References Covvton V. Wickersham, 193. Cox V. Belthoover, 82. V. Citizens' State Bank, 257, 258, 274. V. Cline, 228, 229. V. National Bank, 243. V. Palmer, 318. V. Troy, 132. Cox's Adm'r v. Jones, 66. Coyle's Ex'r v. Satterwhite's Adm'r, 64. Craig V. Palo Alto Stock Farm, 210. Credit Co. v. Howe Mach. Co., 193. Creteau v. Foote, 255. Cribbs v. Adams, 272. Crider v. Shelby, 70. Cristy v. Campau, 233. Crittenden v. White, 45. Cromer v. Piatt, 286. Cromwell v. County of Sac, 240. Cronly v. Hall, 213. Crosby v. Grant, 215. V. Roub, 165, 166. V. Wright, 205. Cross V. Brown, 175. V. Hollister, 176. Crout V. De Wolf, 310. Crump V. Berdan, 56. Culbertson v. Nelson, 58. V. Salinger, 93. Culver V. Hide & Leather Bank, 234. V. Marks, 82, 283. Cumings v. Kent, 189. Cumming v. Roderick, 302. Cundiflf V. Campbell, 94. Cunningham v. Woodbridge, 227. Currier v. Lockwood, 45. Curry v. Bank of Mobile, 185. Curtis V. Sprague, 81. Cushman v. Haynes, 55, 87. Cuyler v. Stevens, 292. are to Pages. D. Dalrymple v. Hillenbrand, 205. Dana v. San Francisco, 54. V. Sawyer, 122. Daniel v. Glidden, 33. Daniels v. Kyle, 245. V. Wilson, 239. Darwin v. Rippey, 316. Daskam v. Ullman, 163. Davenport v. Gilbert, 300. Davidson v. Cooper, 311. V. Lanier, 36. Davis V. Bank of Tennessee, 294. V. Barron, 198. V. Bechstein, 159. V. Crawford, 318. V. Garr, 75. V. Howell Cotton Co., 234. V. Lee, 237. V. Miller, 183, 338, 339. V. Peck, 181. V. Wait, 100. Davis Sewing Mach. Co. v. Best, 213. Davy V. Kelle}^ 234. Dawson v. Wombles, 92. Day V. Ramsdell, 34. Deahy v. Choquet, 197, 281, 334. Dean v. DeLezardi, 22. Deberry v. Darnell, 63. Decroix, Verley et Cie v. Meyer & Co., 143. Deener v. Brown, 116. Deering v. Creighton, 198. DeForest v. Frary, 53. De Hass v. Roberts, 56, 57. Dehoust V. Lewis, 257, 258. Deininger v. Miller, 289. DeLand v. Dixon Nat. Bank, 309. Demelman v. Brr.zier, 8, 229, 269, 272. Denny v. Palmer, 304. Devries & Co. v. Shumate, 35, 36. 396 TABLE OF CASES. References DeWitt V. Perkins, 240. Dickens v. Beal, 295. Dickenson v. Marsh, 136. I^ickins v. Beal, 246. Dill V. White, 111. Dinsmore v. Duncan, 82, 222. Ditch V. Western Nat. Bank, 173. Diversy v. Moor, 193. D. M. Osborn & Co. v. Hubbard, 43. Dockray v. Dunn, 96. Dodd V. Denny, 66. V. Dunne, 36. Dodge V. Bank of Kentucky, 291. V. Emerson, 55. Dodson V. Taylor, 289, 290. Doherty v. Perry, 51. Dole V. Gold, 293. Doll V. Hollenbeck, 166. Donnell v. Louis County Sav. Bank, 291. Donovan v. Fox, 234. Doom V. Sherwin, 176, 197. Dorsey v. Wellman, 4. V. Wolff, 60, 61. Doubleday v. Kress, 247. Douglass V. Wilkenson, 167. Downes v. Church, 329. V. Richardson, 104. Downey v. O'Keefe, 196. Drake v. Rogers, 22. Dreilling v. First Nat. Bank, 221. Drennan v. Bunn, 177. Dresser v. Missouri & L R. Const. Co.. 223. Drew V. Wheelihan, 217. Drexler'v. McGlynn, 286, 289. Dubois V. Stoner, 325. Duerson's Adm'r v. Alsop, 7. Duncan v. Duncan, 43. Dunham v. Peterson, 97. DuPont V. Beck, 94. Dupont V. Mt. Pleasant Ferry Co., 182. are to Pages. Dupont de Nemour Powder Co., E. I. V. Rooney, 301. Durant v. Murdock, 109. Durham v. Price, 304. Durkin v. Cranston, 14, 329. Duty V. Sprinkle, 210. E. Easterly v. Barber, 208. Eastman v. District Tp. of Lyon, 233. V. Plumer, 325. East River Bank v. Butterworth, 328. Eaton V. Alger, 175. V. Carey, 338, 339. Edelman v. Rams, 11. Edison v. Babka, 158. Edison General Elec. Co. v. Blount, 101. Edmonston v. Ascough, 28. Edward Hines Lumber Co. v. An- derson, 133. Edwards v. Porter, 100. V. Walters, 337. Eicelberger v. Old Nat. Bank, 27. E. L Dupont de Nemour Powder Co. V. Rooney, 301. Eldred v. Malloy, 49. Eldrege v. Chacon, 334. Elgin City Banking Co. v. Hall, 176, 197, 217, 221, 226, 229, 282. Elliott V. Brady, 205. V. Levings, 314. Ellsworth v. Fogg, 322. Emerson v. Opp, 318. Emery v. Hobson, 257, 283. Emmons v. Meeker, 20. English v. Beneman, 21. Enright v. Beaumond, 323. Erickson v. First Nat. Bank, 316. v. Inman, Poulson & Co., 134. Ernst v. Steckman, 57. TABLE OF CASES. 397 References Ervin v. Brooks, 66. Ervvin v. Shaffer, 103. Estabrook v. Boyle, 229. Estes V. Tower, 263. Evans v. Freeman, 176, 228. V. Williamson, 100. Evertson v. Nat. Bank of Newport, 42, 81. Ewald V. Foulhaber Stable Co., 281. Ewer V. Meyrick, 56. Exchange Bank v. Sutton Bank, 114, 116. Faile v. Crawford, 93. Fairchild v. Feltman, 135. V. Ogdensburgh, C. & R. Co., 283. Fall River Union Bank v. Willard, 118, 122. Farber v. National Forge & I. Co., 104. Farmer v. Bank of Graettinger, 68. V. Rand, 298. Farmers' Bank v. B.ooke, 229. Farmers' Bank of Grand Rapids v. Butler, 233. Farmers' Bank of Kentucky v. Ew- ing, 19, 305. Farmers' Bank of Virginia v. Gum- mell, 305. Farmers' Bank & T. Co. v. New- land, 116. Farmers' Loan & Trust Co. v. Ol- son, 317. Farmers' Nat. Bank v. Sutton Mfg. Co., 60, 61. V. Thomas, 25, V. Venner, 244, 245. Farmers' & Mechanics' Bank v. Day, 182. Farmers' & Merchants' Bank v. Bank of Rutherford, 170, 204. are to Pages. Farmers' & Merchants' Bank v. Battle, 300. V. Dunbier, 149. Farnsworth v. Allen, 250. V. Drake, 77. V. Mullen, 262. Farquhar v. Fidelity Ins. Co., 62. Farquhar Co., A. B. v. Higham, 196, 199, 206. Far Rockaway Bank v. Norton, 5, 196, 200. Farwell v. Ensign, 208. V. St. Paul Trust Co., 277. Fassin v. Hubbard, 289. Feigenspan v. McDonnell, 290. Fellspoint Sav. Inst. v. Weedon, 49. Fenderson v. Owen, 22. Ferner v. Williams, 262. Fcrress v. Tavel, 97. Fessenden v. Summers, 198. Fielding & Co. v. Corry, 299. Fife V. Oshkosh, 4. Finch V. De Forest, 168. First Nat. Bank v. Alexander, 258. V. Alton, 48, 103. V. Babbidge, 227. V. Badger Lumber Co., 30. V. Bryan, 234. V. Buckhannon Bank, 258. V. Buttery, 68, 69, 334. V. Bynum, 57, 58, 60, 213. V. Carson, 25. V. Chilson, 326. V.Clark, 116, 151, 152. V. Crittenden, 274. V. Currie, 148, 150, 258, 266, 281. V. Day, 193. V. Farneman, 298. V. Foote, 94. V. Gay, 60. V. Getz, 328. V. Gridley, 27, 179, 206, 304, 313, 327. V. Hall, 182. V. Hatch, 292. 398 TABLE OF CASES. References First Nat. Bank v. Heuschen, 248. V. Larsen, 49, 58, 60, 87. , V. Laughlin, 316. V. Lightner, 50, 51. V. Lineberger, 334. V. Loyhed, 180. V. McCullough, 182, 227. V. Maxfield, 321. V. Miller, 2, 59, 257, 298. V. Northwestern Nat. Bank, 195, 205. V. Ruhl, 234. V. Scott County Com'rs, 214. V. Slaughter, 60, 88. V. Smith, 287. V. Snell, 139. V. Watkins, 327. V. Whitman, 149. First Nat. Bank of Decorah v. Laughlin, 60. First Nat. Bank of El Paso v. Mil- ler, 96, 278. First Nat. Bank of Jersey City v. Leach, 150. First Nat. Bank of Marshalltown v. Marshalltown State Bank, 310. First Nat. Bank of Rapid City v. Security Nat. Bank, 47. First Nat. Bank of Salisbury v. Michael, 51. First Nat. Bank of Springfield v. Skeen, 69, 234. First Nat. Bank of Wilkes-Barre v. Barnum, 24, 27, 222, 311, 312, 313, 316. Fisher v. Beckwith, 139. Fisk V. Miller, 198. Fitch V. Brockmon, 158. Fitzpatrick v. School Com'rs, 309. Flagg V. School Dist. No. 70, 58. Flanagan v. Mitchell, 140, 144. Fletcher v. Schaumburg, 76. Flint V. Flint, 167. V. Rogers, 251. are to Pages. Florence Oil & Refining Co. v. First Nat. Bank, 243, 244, 245. Flournoy v. First Nat. Bank, 193, Floyd County Com'rs v. Day, 53. Folger V. Chase, 165. Forbes v. Espy, ^^ . Ford V. McClung, 257. Forepaugh v. McClung, 257. Foster v. Hill, 179. V. McDonald, 287. Fountain v. Bookstaver, 165, 180. Fourth Nat. Bank v. Altheimer, 290. Fowler v. Gate City Nat. Bank, 134. Fox V. Bank of Kansas City, 222. V. Rural Home Co., 102, 105. Frank v. Kaigler, 167. V. Wessels, 49. Frankland v. Johnson, 31. Franklin v. Baker, 317. V. March, 46. V. Vanderpool, 246. Franklin Sav. Inst. v. Heinsman, 222. V. Reed, 112. Frederick v. Winans, 166. Fredin v. Richards, 227. Freeman v. Exchange Bank, 173. V. Perot, 155. V. Perry, 163. Freeman's Bank v. Perkins, 247. V. Ruckman, 85. Freeman's Nat. Bank v. National Tube-Works, 174. French v. Bank of Columbia, 285. V. Barney, 81. V. French, 328. V. Jarvis, 67, 185, 338, 339. V. Turner, 163. V. Wallack, 37. Friedenberg v. Robinson, 334, Frost V. Fisher, 62. Fry V. Rousseau, 62. Fugitt V. Nixon, 121. Fuller V. Arnold, 160. TABLE OF CASES. 390 References Fuller Buggy Co. v. Waldron, 282, 300. Fullerton v. Sturges, 237. Funk V. Babbitt, 84, 110, 111. Furgerson v. Staples, 53, 205. G. Galbraith v. Shepard, 281. Galpin v. Hard, 264. Galusha v. Sherman, 213. Gamewell v. Mosely, 94. Gandy v. Bissell's Estate, Zl . Gardner v. Bank of Tennessee, 13, 269,271. Garfield Nat. Bank v. Colwell, 37. Garrard v. Haddan, 313. Garrettson v. North Atchison Bank, 135. Garrigus v. Home, Frontier & For- eign Missionary Soc, 2)1 . Garver v. Pontious, 61. Gates V. Beecher, 248, 293. V. Parker, 152. Gawtry v. Doane, 302. Gay V. Rooke, 45. Gaylord v. Van Loan, 109. Gaytes v. Hibbard, 65. Gazzam v. Armstrong, 330, 331. Geddes v. Blackmore, 236. Genesee County Sav. Bank v. Kindt, 232. George, In re, 337. Georgia Nat. Bank v. Henderson, IS. Georgia Seed Co. v. Talmadge & Co., 115. German-American . Bank v. Cun- ningham, 229, 231. V. Mills, 256. Germania Bank v. Distler, 235. Germania Nat. Bank v. Mariner, 29, 196. V. Taaks, 152. tre to Pages. Gervais v. Baird, 29. Gf^t'-'-'^burg Nat. Bank v. Chisholm, 313. Gibos V. Cannon, 282. V. Guaraglia, 196, 200. V. Linabury, 234. Gibson v. Hunter, 11. V. Minet, 11. Giddings v. McCumber, 185. Giffert v. West, 202. Gill V. Palmer, 293. Gillett V. Sweat, 321. Gilley v Harrell, 3, 72. Gilliam v. Davis, 327. Gillilan v. Myers, 139. Gilmore v. Hirst, 55, 60. Gilpin V. Savage, 2, 92, 242, 263, 264. Girard Bank v. Bank of Pennsylva- nia Tp., 150. Glenn v. Farmers' Bank, 233, 241. Glickauf v. Kaufmann, 267. Glidden v. Chamberlin, 202. Gloucester Bank v. Worcester, 334. Glover v. Gentry, 318. Goodin v. Buhler, 55. Goodloe V. Taylor, 71. Goodman v. Simonds, 20, 236. Goodnow v. Warren, 289. Goodwin v. Davenport, 66. Goose River Bank v. Willow Lake School Tp., 53. Gordon v. Adams, 38. V. Anderson, 74, 82. V. Levine, 257, 258. V. Wansey, 321. Goshen Nat. Bank v. Bingham, 163, 195,213. Goss V. Nelson, 70. Gough V. Staats, 245. Gould V. Stevens, 240. Gove V. Downer, 65. Gowcn V. Jackson, i21. Graham v. Smith, 98. 400 TABLE OF CASES. References Grammel v. Carmer, 114. Grange v. Reigh, 245, 258. Granite Bank v. Ayers, 248. Grant v. Ellicott, 140. V. Shaw, 147. V. Walsh, 233. V. Wood, 49. Grant County v. Sels, 8. Graul V. Strutzel, 66. Gravert v. Goothard, 87. Gray v. Bowden, 45. V. Boyle, 232. V. Wood, 23. Graydon v. Patterson, 326. Greeley v. City of Jacksonville, 8. Greely v. Cascade County, 257. Green v. Darling, 245. V. Drebilbis, 66. V. Goings, 191. V. Wilkie, 223. Greene v. Duncan, 144, 192. Greenfield Bank v. Crafts, 309. Greenwich Bank v. DeGroot, 295. Greneaux v. Wheeler, 81. Greve v. Schweitzer, 322. Grier v. Cabbie, 183. Griffin v. Erskine, 182. Griffiths V. Kellogg, 223. Grimes v. McAninch, 166. V. Piersol, 170. Grosvenor v. Stone, 332. Guerrant v. Guerrant, 237. Guignon v. Union Trust Co., 296. Gumz V. Giegling, 198. Gurnee v. Hutton, 131. Gushee v. Eddy, 64. Guttman v. Abbott, 199, 201, 281. Gwyn V. Lee, 166. H. Haber v. Brown, 264. Habersham v. Lehman, 170. Hacket v. Linares, 209. are to Pages. Hackney v. Jones, 72, Hadden v. Dooley, 327. Haddock v. Woods, 63. Haddock, Blanchard & Co. v. Had- dock, 103, 191, 200, 207, 208. Haeberle v. O'Day, 133. Hagerthy v. Phillips, 339. Haines v. Dubois, 165. V. Nance, 144. Hall V. Auburn Turnpike Co., 105. V. Bank of the Commonwealth, 27. V. First Nat. Bank, 229. V. Newcomb, 198. V. Tufts, 83. V. Wilson, 222. Hallowell v. Curry, 297. Halstead v. New York, 233. Hamill v. German Nat. Bank, 327. V. Mason, 213. Hampson v. Owens, 159. Hanauer v. Anderson, 305. Handy v. Sibley, 98, 220. Handyside v. Cameron, 29. Hankin v. Squires, 131. Hannurn v. Richardson, 177. Hanover Nat. Bank v. American Dock & Trust Co., 47. Hapgood V. Needham, 94. Harden v. Boyce, 259, 305. Hardie v. Wright, 234. Harding v. Waters, 267. Hardy v. Waters, 178. Harmon v. Old Detroit Nat. Bank, 7S, 308. Harpending v. Gray, 233, 323. Harper v. Young, 239. Harriman v. Sanborn, 52. Harrington v. Johnson, 217. Harris v. Coleman & A.White Lead Co., 112. V. Fowler, 98. V. Robinson, 286. TABLE OF CASES. 4U1 References are to Papes. Harrison v. Crowder, 251. V. Nicollet Nat. Bank, 15. Harrow v. Dugan, 46. Harsh v. Kleeper, 315. Hart V. Adler, 239. V.Smith, 118. V. Wills, 263. Harvey v. Baldwin, 61. V. Cane, 147. V. Dimon, 3. V. Irvine, 112. V. Smith, 314. Hasbrook v. Palmer, 63. Haseltine v. Dunbar, 144. Hasey v. White Pidgeon Beet-Su- gar Co., 110. Haskell v. Cornish, 34. v. Lambert, 87. v. Mitchell, 214. Haslett v. Ehrick, 335. Hastings v. Thompson, 59. Hatcher v. Independence Nat. Bank, 98, 220. Hatton V. Jones, 36. Haueiwas v. Goodloe, 22. Haugan v. Sunwall, 217. Havens v. Huntington, 338. V. Potts, 91. Hawes v. Blackwell, 116. Hawkins v. Young, 230. Hawks V. Truesdell, 99. Hawley v. Jette, IS. Hayden v. Strong, 176. Hays V. Gwin, 49. Hazard v. Spencer, 85. Hazelton Mercantile Co. v. Union Imp. Co., 144. Heard v. Dubuque County Bank, 57. Heath v. Blake, 315. v. Silverthorn Lead Mining & Smelting Co., 219, 326. Heaton v. Hulbert, 282. Opp. — Sel. — 26 Hefner v. Dawson, 310. v. Vandolah, 310. Hegeler v. Comstock, 56, 90. Hegeman v. Moon, 70, 94. Heist V. Hart, 223. Heitschmidt v. McAlpin, 133. Hellernian v. Schantz, 162. Helmer v. Krolick, 217. Hemmenway v. Stone, 111, 216. Hemphill v. Yerkes, 116. Henderson v. Pope, 12. Henrietta Nat. Bank v. State Nat. Bank, 134, 135, 149. Hensel v. Chicago, St. P., M. & O. R. Co., 25. Henshaw v. Root, 15, 269. Herdic v. Roessler, 45. Herdman v. Wheeler, 215, 236, 237. Hereth v. Meyer, 51. Hermann's Ex'r v. Gregory, 97, 218, 219. Herrick v. Baldwin, 263. V. Bennet, 66. v. Gallagher, 204. V. Woolverton, 216. Herring v. Woodhull, 167. Herter v. Goss & Edsall Co., 144. Heuertematte v. Morris, 193, 218. Heywood v. Wingate, 74. Hibbard v. Matthews, 290. Hibbs V. Brown, 52, 53. Hickok V. Bunting, 92, 93. Hidden v. Waldo, 139. Higgins V. Morrison, 291. V. Ridgway, 189. Higginson v. Gray, 96. Hilborn v. Alford, 29. Hildeburn v. Curran, 101. Hill v. Buchanan, 207. v. Buckminister, 99. v. Buddington, 185. v. Hall, 36, 37. V. Place, 326. 402 TABLE OF CASES. References Hill V. Planters' Bank, 287. V. Todd, 59. Hindert v. Schneider, 95. Hinsdale v. Miles, 276. Hinton V. Bank of Columbus, 321. Hirsch v. Oliver, 189. Hobart v. Penny, 240. Hobbs V. Straine, 304. Hocking Valley Bank v. Barton, 214. Hodge V. Smith, 36, 11, 223, 224, 225, 229, 230, 328. V. Wallace, 214. Hodges V. Clinton, 62. V. Nash, 104, 221, 234. V. Shuler, 90, 293. Hodgkins v. Moulton, 189. Hoffman v. Bank of Milwaukee, 194. V. Planters' Nat. Bank, 316. Hoge V. Lansing, 222. Hogue V. Williamson, 63. Hoit V. Mclntire, 35. Holbrook v. Payne, 114, 136. Holcomb V. Wyckoff, 233. Holden v. Davis, 329. Holeman v. Hobson, 233. Holland Trust Co. v. Waddell, 104, 221, 327. Hollinshead v. John Stuart & Co., 56, 57. Holmes v. Bank of Ft. Gaines, 313. V. Roe, 258. Holt V. Ross, 192. Holtz V. Boppe, 263. Home Ins. Co. v. Green, 293. Home Sav. Bank v. Hosie, 255. V. Stewart, 37, 322. Hood V. Nichols, 309. V. Robbins, 171. Hook V. Pratt, 173, 174. V. White, 327. Hoopes V. CoUingwood, 25. Hoover v. McCormick, 276. are to Pages. Hopkins v. Farwell, 321. Hopper-Morgan Co., In re, 96, 97; 98, 219. Horner v. Horner, 66. Horowitz v. Wollowitz, 206. Horton v. Arnold, 101. Hosstatter v. Wilson, 90. Hosteller v. Hoke, 34. Hotchkiss v. Mosher, 47. Hough v. Loring, 138, 144. Houghton V. First Nat. Bank, 181. House V. Adams, 118, 278, 303. V. Vinton Nat. Bank, 126, 291. Howard v. Duncan, 30, 309. V. Palmer, 101. v. Windham County Sav. Bank, 48. Howard Bank v. Carson, 245. Howe V. Ould, 167. Howell V. Boyd Mfg. Co., 114. V.Todd, 621. V. Wright, 94. Howes V. Austin, 246. Howry V. Eppinger, 112. Hoxie V. Hodges, 96. Hoyt V. Seeley, 245. Hubbard v. Chapin, 223. V. Moseley, 49. V. Troy, 269. Hudson V. Emmons, 51. V. Matthews, 8. Huff V. Ashcraft, 248. V. Wagner, 240. Hughes V. Fisher, 144. V. Kiddell, 167. V. Wheeler, 328. Hughitt V. Johnson, 58, 89. Hull V. Myers, 285, 339. Hunt V. Johnson, 244. V. Sanford, 240. V. Williams, 144. Hunter v. Allen. 213, 227. V. Blodgett, n. V. Hempstead, 185, 248. TABLE OF CASES. 403 References Hunter v. Wood, 109. Hurlburt v. Hall, 315. Hurt V. Ford, 38. Husband v. Epling, 70. Husbrook v. Wilder, 19, 66, 109. Huston V. Newgass, 192. V. Young, 233, 234. Illinois Conference v. Plagge, 171. Inglish V. Breneman, 315. Ingraham v. Gibbs, 329. International Bank v. Vankirk, 233. International Imp. Fund Trustees V. Lewis, 42. Iowa Nat. Bank v. Carter, 229. Iowa Val. State Bank v. Sigstad, 276, 305. Ireland v. Schaipenberg, 230. Iron Clad Mfg. Co. v. Sackin, 262. Irving Nat. Bank v. Alley, 74. Isaack v. Porter, 96. Iselin V. Chemical Nat. Bank, 140, 193. J. Jack V. Davis, 159. Jacks V. Rarrin, 284. Jackson v. Myers, 42. V. Tilghman, 53. V. Tribble, 29. Jackson Bank v. Irons, 198. Jacobs V. Benson, 83. V. Mitchell, 113. James v. Ocoee Bank, 244. V. Wade, 278. Jamieson & McFarland v. Heim, 233, 308. Jaquin v. Warren, 46. Jarvis v. Wilson, 46, 133. Jaudon v. Read, 245. Jefferson Bank of St. Louis v. Chap- man-White-Lyons Co., 226, 238. are to Pages. Jefferson County v. Burlington & M. R. Co., 102. Jeffrey v. Rosenfeld, 3, 312. Jenkins v. Columbia Land & Imp. Co., 158. v. Phillips, 33. v. Wilkinson, 163. Jennings v. First Nat. Bank, 48. v. Law, 95. v. Todd, 225. Jerman v. Edwards, 185. Jessup v. Dennison, 235. Jewett V. Whalen, 30. J. H. Mohlman Co. v. McKane, 95, 97, 300. Jilson v. Hill, 65. Johns V. Harrison, 25. Johnson v. Brown, 295. V. Buffalo Center State Bank, 182, 226. V. Clark, 133. V. Donnell, 173. v. Glover, 215. V. Henderson, 47, 63. V. Mitchell, 170. V. Parsons, 277. V. Sutherland, 233. V. Way, 217. V. Williard, 176. Johnston v. Hoover, 24, 311. V. Speer, 60. Johnston Harvester Co, v. Mac- Lean, 214, 236, 237. Jones V. Crawford, 60. V. Degge, 101. V. Fales, 63. V. Hamlet, 309. V. Lewis, 300. V. Lowery Banking Co., 159. V. Radatz, 60. V. Robinson, 66. V. Shapera, 74. V. Wiesen, 241. 4o4 TABLE OF CASES. Jordan v. Tarkington, 193. V. Tate, 69. V. Wheeler, 122. Jordon v. Long, 271. Joseph V. Salomon, 13, 269. Josselyn v. Lacier, 53. Joveshof V. Rockey, 93, 218. Joy V. Diefendorf, 229. J. Regester's Sons Co. v. Reed, 229. Judah V. Harris, 63, 64. Juniata Bank v. Hale, 292. Jurgens v. Wichmann, 298. J. W. O'Bannon Co. v. Curran, 265. J. W. Perry Co. v. Taylor Bros., 197. K. Kahnweiler v. Anderson, 114. Kalamazoo Nat. Bank v. Clark, 223. Kaskaskia Bridge Co. v. Shannon, 13. Kaufman v. Barringer, 134. Kavanagh v. Bank of America, 11, lid. Keazer v. Colebrook Nat. Bank, 338. Keene v. Behan, 223, 229. Keith V. Jones, 63, 64. Kelley v. Greenough, 151. V. Hemmingway, 70. Kelly V. Brown, 245. V. Burrough, 339. V. Ferguson, 240. ' V. Lynch, 140. V. Whitney, 214, 225. Kemp V. Klaus, 89. V. McCormick, 29. Kendall v. Galvin, 12, 139. Kennedy v. Thomas, 253. Kent V. May, 327. Kerby v. Ruegamer, 33. Kernohan v. Durham, 214. Kerr v. Anderson, 229. are to Pages. Keyes v. Fenstermaker, 66. Kidder v. Horrobin, 5. Kiel V. Choate, 208. Kieth V. Fork, 234. Kilgore V. Bulkley, 205, 293, 294. Killian v. Ashley, 199. Kilpatrick v. Heaton, 169. Kimball v. Donald, 131. V. Huntington, 93. Kimball Co., W. W. v. Mellon, 57, 88. Kimbro v. Lamb, 171. Kimpton v. Studebaker Bros. Co , 91. King V. Crowell, 263, 264. V. Doolittle, 97. V. Fleece, 174, 175. V. Hamilton, 63. V. King, 191. V. Mecklenburg, 30, 214. V. Nichols, 227. Kinsely v. Sampson, 21. Kinyon v. Wohlford, 238. Kipp V. Smith, 226. Kirk V. Dodge County Mut. Ins. Co., 52. Kirkman v. Bank of America, 36. Kirkpatrick v. Hawk, 335. Kirksey v. Bates, 339. Kirkwood v. Exchange Nat. Bank, 49. V. Smith, 88. Kiskadden v. Allen, 53. Kitchen v. Loudenback, 240. Klar V. Kostink, 234. Kneeland v. Miles, 321, 325. Knickerbocker Life Ins. Co. v. Pen- dleton, 13. Knight V. Tinney, 232, 241. Knights & Ladies of Security v. Hi- bernian Banking Ass'n, 48, 49. Knott V. Tidyman, 214, 227. V. Venable, 295. I TABLE OF CASES. m> References Knowles v. Knowles, 99. Knox V. Clifford, 97. Koehler v. Dodge, 241. Kohn V. Consolidated Butter & Egg Co., 200. Konig V. Bayard, 154, 330. Kost V. Bender, 241. Kramer v. Grant, 257, 328. Kuflick V. Glasser, 281. Kuhns V. Gettysburg Nat. Bank, 222. Kurth V. Farmers' & Merchants' State Bank, 316. L. La Farge v. Kneeland, 204. Lahn v. Koep, 322. Laird v. State, 15. Lallerstedt v. Griffin, 194. Lamar v. Brown, 315. Lamb v. Storey, 56. Lampkin v. State, 28. Lancaster Nat. Bank v. Taylor, 214. Lane v. Bank of West Tennessee, 259, 278. V. Kreckle, 77. V. Stacy, 209. V. Union Nat. Bank, 85. Langley v. Wadsworth, 229. Lapeyre v. Weeks, 74. Larkin v. Hardinbrook, 324. Larsen v. Breene, 149. La Rue v. Groezinger, 158. Lassas v. McCarty, 92, 217, 239. Lawrence v. Dougherty, 64. V. Miller, 286, 302. V. Phipps, 144. Lawrence Nat. Bank v. Kowalsky, 114. Lawson v. Farmers' Bank of Salem, 298. Lazier v. Horan, 326. Lea V. Branch Bank at Mobile, 74. are to Pages. Leach v. Lewis, 97. Leake v. Burgess, 332. Leaphardt v. Sloan, 83. Leary v. Blanchard, 176. Leask v. Dew, 337. Leather Manufacturers' Bank v. Morgan, 310. Leavitt v. Putnam, 66. Lebanon Bank v. Mangan, 49. Lebanon Nat. Bank v. Long, 103. Ledwich v. McKim, 237. Lee V. Balcom, 46. V. Field, 323. V. Robinson, 114. Lee Bank v. Spencer, 265. Legg V. Vinal, 264, 272. Leggett V. Raymond, 197. Leighton v. Preston, 160. Lennon v. Grauer, 205. Lenox v. Cook, 128. V. Roberts, 298. Leonard v. Draper, 200, 205, 206. V. Mason, 91, 133. Lester v. Given, 118. V. Paine, 198. Levy V. Drew, 66. Lewinsohn v. Kent, 80. Lewis V. Berry, 114. V. Bush, 159. v. Clay, 215. V. Long, 234. V. Shepherd, 315. V. Wilson, 42. V. Woodfolk, 101. Libby Bros. Glass Co. v. Farmers' & Mechanics' Bank, 115. Life Ins. Co. v. Pendleton, 283. Lilley v. Miller, 278, 284. Lincoln v. Hinzey, 28. Lindley v. First Nat. Bank, 152. Lindsay v. Price, 167. Lindsey v. McClelland, 47, 63. Lines v. Smith, 94. Linn v. Horton, 288. 406 TABLE OF CASES. References Litchfield Bank v. Peck, 99. Littauer v. Goldman, 202, 310. Little V. Bailey, 34. V. Blunt, 183. V. Dunlap, 232. V. Phenix Bank, 63, 257. Little Rock Trust Co. v. Martin, 315, 317. Lloyd V. Osborne, 258. Lobdell V. Baker, 202. Lockwood V. Crawford, 264. V. Twitchell, 102. Logue V. Smith, 179. Loizeaux v. Fremder, 323. Long V. Bank of Cynthiana, 325. V. Gieriet, 103. V. Stephenson, 281. Longmire v. Fain, 101. Lons V. Miller, 33. Loomis V. Ruck, 213. Looney v. Pinckston, 64. Louisville Banking Co. v. Gray, 51, 60. Love V. Wall, 208. Lovinger v. First Nat. Bank, 328. Lowr V. Merrill, 315. Lowell V. Bickford, 37, 97, 104, 105. Lowell Trust Co. v. Pratt, 69, 301. Lowery v. Steward, 53. Lucas V. Byrne, 171. Luckenbach v. McDonald, 246, 311. Ludwig V. Iglehart, 334. Luflf V. Pope, 12, 131. Lynch v. First Nat. Bank, 114. Lynchburg Milling Co. v. National Exch. Bank, 93. Lynchburg Nat. Bank v. Scott, 239. Lyon V. Ewings, 171. v. Marshall, 82. V. Martin, 89. Lysle V. Beals, 180. M. McAfee v. Glen Mary Coal & Coke Co., 96. are to Pages. McAndrew v. Radway, 272. McCallum v. Driggs, 175, 198. McCandlish v. Cruger, 110. McCaskill v. Connecticut Sav. Bank, 48. McClellan v. Morris, 109. McCord V. Curlee, 269. McCormick v. Holmes, 238. McCormick Harvesting Mach. Co. v. Lauber, 315. McCornick v. Swem, 59, 229. McCreary v. Parsons, 101. McDaniel v. Maxwell, 114, 115, V. Whitsett, 316. McDonald v. Bailey, 81. V. Mosher, 259. McDowell v. Cook, 332. McFarland v. State Bank of Chase, 232, 241. McGeorge v. Chapman, 293. McGowan v. Collins, 29. McGrath v. Clark, 25. v. Pitkin, 233. McGregory v. McGregory, 276. Mcintosh v. Lytle, 81. Mclntyre v. Michigan State Ins. Co., 243. Mackey v. St. Mary's Church, 42. Mackintosh v. Gibbs, 1, 4. McLaren v. Marine Bank of Geor- gia, 284. McLeod V. Hunter, 66. v. Snyder, 179. McMasters v. Dunbar, 75. McMichan's Estate, In re, 340. McMillan v. Hefiferlin, 315. McMoran v. Lange, 5, 199. McNabb v. Tally, 140. McNeil v. Wyatt, 299. McNight V. Parsons, 221, 226, 229. Macomber v. Parker, 158. Macy v. Kendall, 104. Madison Square Bank v. Pierce, 339. Magee v. Dunbar, 290. TABLE OF CASES. 407 References Maguire v. Eichmeier, 318. Mahone v. Central Bank, 335. Mahon's Adm'r v. Sawyer, 5. Main v. Hilton, 74. Maitland v. Citizens' Nat. Bank, 97, 104, 221. Maldaner v. Smith, 318. Manchester v. Van Brunt, 334. Manchester Bank v. Fellows, 287. Manegold v. Dulau, 179. Manley v. Geagan, 133. Mann v. Nat. Bank, 222. Manning v. Lyon, 265. V. Maroney, 278. Manufacturers' & Traders' Bank v. Hazard, 305. Manufacturing Co. v. Summers, 97. Maples V. Traders' Deposit Bank, 265. Marine Nat. Bank v. National City Bank, 194, 310. Marion & M. Gravel Road Co. v. Kessinger, 165. Markey v. Corey, 57, 176. Markland v. McDaniel, 265, 304. Markley v. Rhodes, 63. Marling v. Jones, 102, 105, 240, 338. V. Nommensen, 322. Marr v. Johnson, 288. Marshall v. Sonneman, 286, 292. Martin v. Brown, 272. V. Hayes, 167. V. Stone, 70. Maryland Fertilizing & Mfg. Co. v. Newman, 60. Mason v. Graff, 193. V. Kilcourse, 207, 271. V. Noonan, 183. V. Prichard, 263. Massachusetts Nat. Bank v. Snow, 24, 35, 81, 226, 238. Massie v. Belford, 69. Master v. Bowery Sav. Bank, 115. are to Pages. Matlock V. Schueuerman, 95. 96, 213, 215, 220, 226, 228, 229. 251, 258. Matson v. Alley, 241. Matteson v. Moulton, 136. Mattison v. Marks, 69. Maule V. Crawford, 71. Mauney v. Coit, 276. Maxwell v. Agnew, 47. May V. Miller, 28. Mayer v. Heidelbach, 96. V. Old, 180. Mayers v. McRimmon, 2, 166. Mayor v. Ray, 54. Mead v. Engs, 287. V. Nat. Bank of Pawling, 37. Mechanics' Bank v. Barnes, 226. V. Livingston, 139. V. Valley Packing Co., 173. V. Yager, 134. Mechanics' Bank of Canada v. Un- ion R. & Transp. Co., 47. Mechanics' & Farmers' Bank v. Wixson, 95. Medway Cotton Manufactory v. Adams, 83. Megowan v. Peterson, 33. Mehlberg v. Tisher, 46, 12. Mehlinger v. Harriman, 227. Meise v. Newman, 272. Meldrum v. Henderson, 114. Mercantile Bank v. Busby, 196, 285. Merchants' Bank v. Birch, 289. v. Easley, 284. V. Woodruff, 15. Merchants' Bank of Canada v. Brown, 290. Merchants' Nat. Bank v. Clark, 227. V. Hanson, 173, 216. V. Ritzniger, 16. Merchants' Nat. Bank of Canada v. Griswold, 151. Merchanf?' ^' Mechanics' Bank v. Hewitt, 159. I 408 TABLE OF CASES. References Merchants' & Planters' Bank v. Penland, 234. Merg V. Kaiser, 185. Meriden Nat. Bank v. Gallaudet, 163, 202. Merriam v. Wolcott, 202. Merrill v. Guthrie, 179. V. Hurley, 56, 57, 58. V. Packer, 227. Merritt v. Todd, 255. Mersick v. Alderman, 105. Mersman v. Werges, 160, 308, 316. Messick v. Alderman, 220. Messmore v. Meyer, 102. V. Morrison, 66. Metcalf V. Watkins, 213. V. Yeaton, 171. Metler's Adm'rs v. Metier, 101. Metropolitan Nat. Bank v. Jones, 149. Meuer v. Phenix Nat. Bank, 115, 150, 163, 195. Meyer v. Beardsley, 140. V. Richards, 202. Michigan Ins. Co. v. Estate of Leav- enworth, 19. Mickles v. Colvin, 217. Middleborough Nat. Bank v. Cole, 105. Middleton v. Griffith, 167. Middletown Bank v. Jerome, 234. Miers v. Coates, 308. Miles V. Major, 22. Milins V. Kauffmann, 95, 97. Miller v. Cavanaugh, 108. V. Crayton, 213. V. Finley, 233. V. Hackley, 14. V. McKenzie, 95. V. Ottaway, 234. V. Powers, 85. V. Reynolds, 32. V. Talcott, 241. Milliken v. Chapman, 203. are to Pages. Mills V. American Exp. Co., 180. Minet v. Gibson, 11 . Minnesota Thresher Mfg. Co. v. Heipler, 175. Minot V. Russ, 149. Mitchell V. Baldwin, 229. V. Catchings, 216. V. Conley, 5. V. Culver, 20, 25. V. Degrand, 68. V. Fuller, 170. V. Hyde, 81. Mohawk Bank v. Broderick, 257, 258. v. Van Home, 327. Mohlman Co., J. H. v. McKane, 95, 91, 300. Monson v. Drakeley, 111. Montelius v. Charles, 118. Montgomery v. Hunt, 113. V. Morris, 95. v. Page, 191. Montgomery & E. R. Co. v. Tre- bles, 187. Montreal Bank v. Chicago, C. & W. R. Co., 48. Montrose Sav. Bank v. Claussen, 221. Moody V. Threlkeld, 81. Moore v. Alexander, 67, 186, 265, 281. V. Anderson, 74. V. Coffield, 264. V. Hall, 175. Moorman v. Wood, 198. More v. Maddock, 104. Morehead Banking Co. v. More- head, 34. Morgan v. Bank of Louisville, 303. V. .Edwards, 58, 87. V.Thompson, 104, 207, 208. Morrill v. Nightingale, 233. V. Prescott, 101. TABLE OF CASES. 409 References Morris v. Lee, 46. V. Preston, 8L Morrison. V. Bailey, 15. V. McCartney, 116. V.Smith, 171. Morse v. Massachusetts Nat. Bank, 149. Morton V. Cammack, 294. Moses V. Trice, 327. Mosser v. Criswell, 243. Mott V. Havana Nat. Bank, 88. Mt. Pleasant Branch of State Bank V. McLeran, 125, 248. Mt. Vernon Bank v. Holden, 295. Mowatt V. McLelan, 204. Mulligan v. Smith, 93, 159. Mumford v. Weaver, 161. Mundlin v. Appelbaum, 97. Munroe v. Woodruff, 272, 286. Munsey v. Dempsey, 92. Murchison Nat. Bank v. Dunn Oil Mills Co., 219. Murdock v. Mills, 152. Murphy v. Gumaer, 103, 219. V. Metropolitan Nat. Bank, 78. v. Schoch, 73. Murray v. Judah, 202. Muse V. Dautzler, 213. Musselman v. Oakes, 75. Musson V. Lake, 263, 271. Muzzy V. Knight, 113. N. Nance v. Lary, 237. Nash V. Brown, 262. Nashville v. First Nat. Bank, 42. National Bank v. Bradley, 103, 298. V. Buckwalter, 190. V. Gary, 87. National Bank of Commerce v. American Exchange Bank, 327. v. Atkinson, 102. V. Feeney, 56. are to Pages. National Bank of Newport v. Sny- der Mfg. Co., 105. National Bank of North America v. Bangs, 205. National Bank of Rockville v. Sec- ond Nat. Bank, 107. National Bank of Washington v. Texas, 186. National Butchers' & Drovers' Bank v. Hubbell, 173. National Citizens' Bank v. Toplitz, 335. National Exchange Bank v. Lester, 311,313. V. Lubrano, 196. National Park Bank v. German Am. Mut. W. & S. Co., 226. V. Ninth Nat. Bank, 315. v. Remsen, 226. V. Saitta, 121, 133, 135, 139, 218, 239. V. Seaboard Bank, 204. National Sav. Bank v. Cable, 55. Nebraska Nat. Bank v. Logan, 258. Neederer v. Barber, 122, 278. Nelson v. Harrington, 267. Nesbit V. Bendheim, 140. New V. Walker, 45. Newbold v. Boraef, 102. Newcomb v. Gibson, 339. Newcombe v. Fo.x, 5. Newhall v. Clark, 144. New Haven Mfg. Co. v. New Ha- ven Pulp & Board Co., 185, 210. Newman v. Frost, 12, 96. V. Kittelle, 65. Newton Wagon Co. v. Dier, 51. New York African Soc. v. Varick, 83. Nicely v. Commercial Bank, 58. Nichols V. Frothingham, 68. V. Hooper, 159. 410 TABLE OF CASES. Nichols & Shepard Co. v. Dedrick, 94. Nicholson v. Chapman, 75. Nightingale v. Withington, 178. Nixon V. Zuricalday, 158. Noble V. Carey, 216. Noll V. Smith, 53, 71. Northampton Bank v. Pepoon, 180. North Atchison Bank v. Garretson, 151. Northfield Nat. Bank v. Arndt, 221. North River Bank v. Aymar, 34. Northumberland Bank v. McMich- ael, 131. Norton v: Norton, 36. Norwich Bank v. Hyde, 236. Noxon V. Smith, 72, 75. Oakdale Mfg. Co. v. Clarke, 160, 186. Oates V. National Bank, 219. O'Bannon Co., J. W. v. Curran, 265, 304. Ocean Nat. Bank v. Williams, 13. O'Connor v. Kleiman, 230. O'Conor v. Clarke, 74, 241. Odell V. Clyde, 5. V. Gallup, 317. Ogden V. Blydenburgh, 205. Ohio Life Ins. & Trust Co. v. Winn, 23. Olds Wagon-Works v. Coombs, 140. O'Neill V. Bradford, 49. Onondaga Bank v. Bates, 272. Ontario Bank v. Worthington, 133. Oppenheimer v. Farmers' & Mer- chants' Bank, 60. Oriental Bank v. Gallo, 205. Ormsbee v. Howe, 233. are to Pages. Orr V. Hopkins, 59. V. South Amboy Terra Cotta Co., 226. Orrick v. Carlston, 236. Osborn v. Hawley, 89. Osborne & Co., D. M. v. Hubbard, 43. Otis V. Cullum, 177, 202. Ould V. Myers, 95. Overton v. Hardin, 103. V. Tyler, 90. Owen V. Iglandor, 144. Owens V. Snell, 166, 218. Oyster & Fish Co. v. National La- fayette Bank, 150. P. Pach V. Frink, 267. Packard v. Dunfee, 178. V. Figliuolo, 223, 229. V. Windholz, 104, 205, 206. Packner v. Roberts, 109. Padfield v. Green, 174. Page V. Danaher, 317. v. Gilbert, 293. V. Morrell, 20. Page's Adm'rs v. Bank of Alexan- dria, 218. Paine v. Central Vt. R. Co., 216. Palmer v. Courtney, 177. V. Poor, 35, 238. V. Stephens, 29. Paramore v. Lindsey, 317. Pardee v. Fish, 47. Parker v. Greele, 152. v. Kellogg, 263. v. Plymell, 213. v. Stoud, 255. V. Syracuse, 52. Parkinson v. Brandenburgh, 4. Parks V. Brown, 185. V.Nichols, 139. Parmelee v. Williams, 191. TABLE OF CASES. 41 References Parr v. City Trust, Safe Deposit & Surety Co., 266. Parshley v. Heath, 305. Parsons v. Utica Cement Co., 1, 72, 230. V. Utica Cement Mfg. Co., 229, 245. Partridge v. Colby, 111. Pasmore v. North, 23. Pate V. Brown, 43. Patterson v. Poindexter, 49. V.Todd, 186. Paul V. Berry, 30. Paulman v. Claycomb, 323. Paulson V. Boyd, 33. Pavey v. StaufTer, 163. Payne v. Cutler, 100. Pearce v. Langfit, 295. Pease v. Landauer, 116. V. Pease, 33. Pecquet v. Mager, 128. Peddicord v. Whittam, 64. Peirce v. Pendar, 294. Pendleton v. Knickerbocker Life Ins. Co., 128. Pentz V. Stanton, 31, 33. People V. Johnston, 6. V. Palmer, 8. V. Supervisors, 54. People's Bank v. Brooke, 271. V. Jefiferson County Sav. Bank, 173. V. Keech, 291. People's Nat. Bank v. Dibrell, 292. V. Lutterloh, 263. V. Schepflin, 5, 99, 105. Pepoon V. Stagg & Co., 45. Pequet v. Dimitry, 335. Perley v. Perley, 93, 94. Perot V. Cooper, 94. Perry v. Bigelow, 87. V. Bray, 323. V. Friend, 285. V. Harrington, 144. are to Pages. Perry Co., J. W. v. Taylor Bros., 197, 281. Peters v. Hobbs, 278. Peterson v. Hubbard, 145. V. Stoughton State Bank, 58, 60. Pettee v. Prout, 232. Phelps V. Church, 168. V. Sargent, 58. Phillips V. Alderson, 301. V. Frost, 145. V. Mercantile Nat. Bank, 78, 80. V. Preston, 208. Phoenix Bank v. Hussey, 13. Phoenix Ins. Co. v. Allen, 121. Pier V. Bullis, 323. Pierce v. Cate, 296. V. Kittredge, 133. V. Schraden, 292. Pike V. Irwin, 133. Pillans V. Van Mierof, 151. Pillow V. Hardeman, 289. Pine V. Smith, 215. Pingree v. Snell, 9. Pixley V. Boynton, 94. Place V. Mcllvan, 334. Plankington v. Gorman, 333. Planters' Bank v. Merritt, 15. Plato V. Reynolds, 128. Piatt V. Eads, 8. Plover Sav. Bank v. Moodie, 255, 256, 257. 258. 259. Pogue V. Clark, 112. Polhemus v. Prudential Realtr Corp., 35. Police Jury v. Britton, 54. Pollard v. Huflf, 102, 267. V. Somerset Mut. Fire Ins. Co., 160. Poorman v. Mills, 107, 215. Porter v. Kemball, 265, 304. v. Porter, 66. Portsmouth Sav. Bank v. Wilson, 199, 265, 277. Powell v. Morrison, 76, 181. 412 TABLE OF CASES. References are to Pages. Power V. Finnic; 173. Prather v. McEvoy, 64. Pratt V. Adams, 166. Presbrey v. Thomas, 245. Prescott Bank v. Caverly, 121, 205. President of Fitchburg Bank v. Greenwood, 176. President, etc., of Goshen & Mini- sink Turnpike Road v. Hurtin, 56, 93. Preston v. Dunham, 69. V. Whitney, 52. Prewitt V. Chapman, 82, 83. Price V. Hopkin, 6. V. Neal, 192. Prichard v. Miller, 109. Proctor V. Baldwin, 60. Pulsifer v. Hotchkiss, 100. Purchase v. Mattison, 265, 284. Pursell V. Allemong, IS. Putnam v. Clark, 317. V. Crymes, IT . Q. Quiggle V. Herman, 233. Quimby v. Meruitt, 64. V. Varnum, 339. Quin V. Sterne, 28. R. Raborg v. Peyton, 139. Radcliffe v. Biles, 99. Railroad Co. v. National Bank, 97. Railway Equip. & Pub. Co. v. Lin- coln Nat. Bank, 228. Ramsdell v. Soule, 328. Rand v. Pantagraph Co., 234. Ranger v. Cory, 216. Ranney v. Brooks, 76. Ransom v. Jones, 64. Ratclifif V. Planters' Bank, 264. Rawson v. Davidson, 42. Rea V. McDonald, 234. Read v. Buffalo, 53. V. McNulty, 58. Ream v. Merchants' Nat. Bank, 89. Reamer v. Bell, 169. Reddick v. Jones, 97. Redlich V. Doll, 25, 236. Redman v. Adams, 50. Red River Valley Nat. Bank v. North Star Boot & Shoe Co., 97. Reed v. Cassatt, 113. V. Mattapan Deposit & Trust Co., 25. V. Nicholson, 189. V. Roark, 18, 316. V. Spear, 248, 281, 303. Regester's Sons Co., J. v. Reed, 229. Reid v. Morrison, 246, 285. Reilly v. Daly, 131. Renick v. Robbins, 286. Renshaw v. Wills, Id. Reynolds v. Appleman, 293. Rhett v. Poe, 246, 265, 278, 283. Rhodes v. Lindly, 64. v. Seymour, 255. Rhyner v. Feickert, 179. Rice V. Barrington, 226. V. Gibbs, 158. V. Grange, 96, 104. V. Ragland, 12. V. Ruddiman, 6. V. Stearns, 169, 177. V. Wesson, 255. Rich V. Starbuck, 82. Richards v. Barlow, 89. V. Boiler, 271. v. Warring, 165. Richardson v. Ainsworth, 159. V. Carpenter, 139. V. Monroe, 222. V. Wren, 97. Richter v. Selin, 23. Ricketts v. Pendleton, 272. Rienke v. Wright, 262. TABLE OF CASES. 4ia References Riley v. Dickens, 108. Risley v. Smith, 144. Ritchie v. Moore, 185. Riverside Bank v. Woodhaven Junc- tion Land Co., 93, 218. Rixy V. Pearre, 61. Roach V. Sanborn Land Co., 73, 81, 183. V. Woodall, 206, 308. Robbins v. Bacon, 114. Roberts v. Hall, 97, 227. V. McGrath, 35, 36. V. Parrish, 175. Robertson v. Cooper, 213. V. Kensington, 178. V. Rowell, 102. Robinson v. Ames, 121. V. Barnett, 265, 277, 303. V. Gould, 95. V. Gray, 144. V. Lyman, 233. V. Marshall, 159. Roch V. London, 276. Rochester Lantern Co. v. Press Co., 158. Rock County Nat. Bank v. Hollis- ter, 175. Rockefeller v. Ringle, 227. Rockfield v. First Nat. Bank, 2, 196, 197, 200, 201, 203, 204, 281. Rodriguez v. Merriman, 183. Roessler v. Lancaster, 196, 200. Rogers v. Durant, 15. V. Gallagher, 166. V. Gibbs, 199. V. School Trustees, 335. Roland v. Smith, 321. Rome V. Young, 145. Roseman v. Mahony, 98. Rosemond v. Graham, 219. Rosenthal v. Ehrlicher, 258. V. Parsont, 218. Rosenwald v. Goldstein, 219. Ross V. Bedell, 284. are to Pages. Ross V. Espy, 66, 208. V. Planters' Bank, 293. Rosson V. Carroll, 67, 186, 272. Rounds V. Smith, 149. Rouse V. Wooten, 282, 336. Rowe V. Putnam, 308. Royal Bank v. Geiman-American Ins. Co., 217. Rueping Leather Co. v. Watke, 18. Rugland v. Thomson, 326. Ruidskoff V. Barrett, 63. Russell V. Russell, 58. Rutland v. Brister, 96. V. ]\Iendon, 9. Ryan v. First Nat. Bank of Spring- field, 317. Sabin v. Harris, 282. St. Paul Nat. Bank v. Cannon, 326. St. Paul's Episcopal Church v. Fields, 43, 99. Salazar v. Taylor, 108. Salem v. Bank of State of New York, 309. Salisbury v. First Nat. Bank, 198. V. Stewart, 60. Salt Springs Nat. Bank v. Burton, 251. Saluan v. Relf, 321. Sampson v. Fox, 327. San Bernardino Nat. Bank v. An- derson, 33. Sasscer v. Farmers' Bank, 293. Savings Bank v. Fisher, 277. Savings Bank of San Diego County V. Central Market Co., 327. Sawyer v. Brownell, 285. Sayers v. First Nat. Bank, 182. Scheuermann v. Monarch ^ruit Co., 47. Schlesinger v. Arline, 60, 89. V. Gilhooley, 234. V. Schultz, 248. 256, 262. 414 TABLE OF CASES. References Schmidt v. Livingston, 328. Schmittler v. Simon, 50. Scholfield V. Earl of Londesbor- ough, 314. School Directors v. Fogleman, 233. Schoolfield v. Moon, 258. Schwartzman v. Post, 325. Schulthers v. Sellers, 229. Scofield V. Ford, 314. Scotland County Bank v. O'Connel, 313. Scott V. Doneghy, 209. V. First Nat. Bank, 187. V. Meeker, 245, 276. V. Parker, 80. V. Seelye, 239. Seaboard Nat. Bank v. Bank of Am- erica, 78, 79, 200, 308. Seabury v. Hungerford, 198. Seacord v. Miller, 245. Seattle Shoe Co. v. Packard, 31, 131, 133, 189. Second Nat. Bank v. Anglin, 60. V. Howe, 104. V. Martin, 180, 182. V. Morgan, 225. V. Smith, 292, 293. Second Nat. Bank of Aurora v. Ba- siuer, 58. Secord v. Miller, 304. Seebold v. TatUe, 313, 315. Seiger v. Second Nat. Bank, 304. Seldner v. Mt. Jackson Nat. Bank, 276. Selikman v. Ten Eyck's Estate, 159. Selser v. Brock, 309. Semple v. Morrison, 206. Serle v. Norton, 23. Seymour v. Farquhar, 112. Shain v. Sullivan, 165. Shakelford v. Hooker, 146. Shank v. Butsch, 29. 213, 214, 215, 216, 217, 219, 229. are to Pages. Shaver v. Western Union Tel. Co., 50, 152. Shaw V. McNeill, 269, 277. V. Reed, 263. Shed V. Brett, 246. Sheehan v. Crosby, 35. Shelburne Falls Nat. Bank v. Townsley, 298. Sheldon v. Benham, 287, 294. Shelton v. Bruce, 49. Shelton Implement Co. v. Schieck, 96. Shenandoah Nat. Bank v. Marsh, 60. Shenandoah Val. R. Co. v. Miller, 114. Shepard v. Citizens' Ins. Co., 302. V. Hall, 294. V. Hawley, 291. Shepherd v. Chamberlain, 251. Sherman v. Ecker, 270. V. Goodwin, 73, 74. Sherrill v. Weisinger Clothing Co., 181. Sherrod v. Rhodes, 284. Shipman v. Bank of State of New York, 78, 80. Shirk V. Mitchell, 229. Shoemaker v. Mechanics' Bank, 298. Short V. Blount, 133, 136. Shroeder v. Webster, 318. Shufeldt V. Gillilau, 159. Shutts V. Fingar, 333. Siegel V. Chicago Trust & Sav. Bank, 52. V. Oehl, 216, 217, 222, 227, 231. Sieger v. Second Nat. Bank, 265. Simms v. Larkin, 301. Simpson v. Davis, 317. Sims v. Hundley, 272. Sinclair v. Piercy, 159. Singer Mfg. Co. v. Summers, 12, Singer v. Stimpson, 64. I Sharpe v. Drew, 125. TABLE OF CASES. 415 References Slack V. Kirk, 209. V. LongshaAv, 298. Slade V. Halstead, 99. Smilie v. Stevens, 49. Smith V. Allen, 46. V. Bayer, 160, 173, 175. V. Brooklyn Sav. Bank, 48. V. Caro, 67. V. Crane, 56. V. Cromer, 245. V. Erwin, 334. V. Essex County Bank, 326. V. Godlett, 108. V. Hill, 294. V. Hubbard, 158. V. Janes, 121. V. Jansen, 240. V. Marland, 57. V. Miller, 258, 281. V. Poillon, 298. V. Robinson, 85. V. Smith, 108. Smith's Ex'rs v. Wyckoff, 104. Smitheers v. Junker, 65. Sneed v. Sabinal Min. & Mill. Co., 318. Snoddy v. American Nat. Bank, 233. Snyder v. Corn Exch. Nat. Bank, 78, 80. V. Van Doren, 236. Somers v. Thayer, 144. South Bend Iron Works v. Pad- dock, 88. Southerland v. Fremont, 267. V. Whitaker, 99. Southwark Bank v. Gross, 316. Spann v. Baltzell, 262, 293. Sparran v. Neeley, 19. Spaulding v. Andrews, 133, 147. Spear v. Pratt, 134. Specht V. Berndorf, 112. Speelman v. Culbertson, 181. Spencer v. Alki Point Transp. Co., 111. V. Carstarphen, 167. are to Pages. ' Spense v. Tapscott, 43. Sperry v. Horr, 61. Spies V. National City ij'ank, 333. Springfield Marine & Fire Ins. Co. V. Peck, 116. Spurgeon v. Swain, 133. Stadler v. First Nat. Bank, 60. Stafford v. Yates, 286. Stainback v. Bank of Virginia, 124, 125. Stall V. Catskill Bank, 103. Stanley v. McElrath, 265, 303. Stanton v. Blossom, 286. V. Caffee, 109. V. Shipley, 53. Stapleton v. Louisville Banking Co., 60. Star Fire Ins. Co. v. New Hamp- shire Nat. Bank, 192. Stark V. Olson, 58. State V. Carpenting, 63. V. Cook, 54. V. Corning State Sav. Bank, 177, 180, 205, 206, 308. V. Harris, 9. State Bank v. Clark, 139. V. Slaughter, 291. V. Weiss, 138. v. Wilson, 335. State Bank of Gothenburg v. Car- roll, 257. State Bank & Trust Co. v. Evans, 180. State of New York Nat. Bank v. Coykendall, 333. Steadwell v. Monis, 233. Stein v. Passmore, 198. V. Rheinstrom, 213. v. Steindler, 334. Steiner v. JeflFries, 244. Steman v. Harrison, 151. Stephens v. Olson, 227. Sterling v. Marietta & S. Trading Co., 327. Sterry v. Robinson, 128. 416 TABLE OF CASES. References Stevens v. Blunt, 71. V. Brice, 216. V. Hannan, 321, 325, 338. V. Johnson, 88. Stewart v. First Nat. Bank, 311. V. French, 66. V. Orvis, 203. V.Wilson, 159. Stillwell V. Patton, 317. Stockbridge v. Damon, 215. Stouffer v. Curtis, 35, 74. Stronach v. Bledsoe, 94. Stultz v. Silva, 71. Sturges V. Williams, 316. Sublette v. Brewington, 162. Sully V. Goldsmith, 240. Summers v. Barrett, 267. Susquehanna Val. Bank v. Loomis, 285. Sussex Bank v. Baldwin, 246, 247, 272, 292, 298. Sutherland v. First Nat. Bank, 326. V. Mead, 98. Swan V. Hodges, 251. Swayze v. Britton, 286. Sweeney v. Thuckstun, 89. Sweet V. Garwood, 185. V.Swift, 118. Swem V. Newell, 321. Swift, In re, 285. Swift V. Tyson, 97, 219. Swiney v. Edwards, 233, 239. Swope V. Ross, 233. Sykes v. LafTerry, 95. Sylvester v. Crohan, 252. Taber v. Cannon, 194. Taddiken v. Cantrell, 311. Talbot V. National Bank of the Commonwealth, 263. Tassey v. Church, 34. Tatam v. Haslar, 231. are to Pages. Tatlock V. Harris, 77. Taylor v. Curry, 52. V. Dobbins, 28. Terry v. Allis, 163, 308. Thackaray v. Hanson, 72. Thayer v. Daniels, 159. Third Nat. Bank v. Armstrong, 88. V. Butler Colliery Co., 181. V. Clark, 165. V. Lange, 75. Third Nat. Bank of Buffalo v. Spring, 88. Thompson v. Gaylord, 64. V. Hoagland, 109. V. McCullough, 202. V. Perrine, 74. V. Rathbun, 25. V. Sioux Falls Nat. Bank, 222. V. Sloan, 64. Thomson v. Bank of British North America, 150. Thornburg v. Emmons, 296. Thorp V. Mindeman, 58, 71, 168, 176. Thorpe v. White, 196, 312. Thurston v. McKown, 216. Tibbets v. Gerrish, 64. Ticonic Bank v. Stackpole, 13. Tilley v. Hanell, 9. Tillman v. Ailles, 197. Times Square Automobile Co. v. Rutherford Nat. Bank, 149, 150. Tindal v. Brown, 292. Title Guarantee & Trust Co. v. Ha- ven, 192, 193. Tittle V. Thomas, 81. Todd V. Shelbourne, 240. Tolman v. American Nat. Bank, 308. V. Janson, 89. Tomlinson Carriage Co. v. Kinsella, 216. Toole V. Crafts, 196. 2^7 ■• Torbert v. Montague, 172, 265, 303, TABLE OF CASES. 417 References Torpey v. Tebo, 68. Tourtelot v. Reed, 104, 221. Towles V. Williams, 21. Towne v. Rice, 56, 87. Townsend v. Auld, 269, 295. V. Chas. H. Heer Dry Goods Co., 262. V. Lorain Bank, 270, 271. Townsley v. Sumrall, 118, 140. Traders' Bank v. Alsop, 239. Traders' Deposit Bank v. Chiles, 166. Traders' Nat. Bank v. Jones, 286. V. Rogers, 309. V. Smith, 113. Tradesmen's Nat. Bank of Phila- delphia V. Green, 52. Tredwell v. Blount, 229. Trent Tile Co. v. Ft. Dearborn Nat. Bank, 132. Trimble v. City Nat. Bank, 191. Troy City Bank v. Louman, 316. Trust Co. of America v. Hamilton Bank, 80. Tucker v. Welsh, 193. Tufts V. Shepherd, 104. Tuley V. McClung, 61. Tunno v. Lague, 305. TurnbuU v. Bowyer, 205. Turner v. Browder, 321. V. Peoria & S. R. Co., 47. Twelfth Ward Bank v. Brooks, 320. Tyler v. Young, 67. U. Ulrich V. Howner, 134. Ulster County Bank v. McFarlan, 152. Union Bank v. Ezell, 255. V. Grimshaw, 288. V. Holcomb, 274. V. Hyde, 269, 277. V. Ridgely, 43 are to Pages. Union Bank v. Shea, 151. V. Willis, 198. Union Ins. Co. v. Greenleaf, 52. Union Nat. Bank v. Brown, 233. V. Cooley, 335. V. Grant, 333. V. Roberts, 316. Union Square Bank v. Helerson, 227. Union Stock Yards Nat. Bank v. Bolan, 1, 2, 68. Union Trust Co. v. Chicago & L. H. R. Co., 48. United States v. American Exch. Nat. Bank, 204. V. Barker, 278. V. Read, 159. V. White, 82. United States Bank v. Bank of Georgia, 192, 310. United States Nat. Bank v. McNair, 233, 240. University Press v. Williams, 5. Vagliona Bros. v. Bank of England, n. Valle V. Cerre, 151. Valley Nat. Bank of Chambersburg V. Crowell, 87. Valley Sav. Bank v. Mercer, 225. Van Allen v. American Nat. Bank, 116. Van Buskirk v. Day, 56. V. State Bank, 115, 118, 131, 134, 148, 149. Vanderford v. Farmers' & Mechan- ics' Nat. Bank, 320, 333, 336. Vander Ploeg v. Van Zuuk, 2, 196, 214, 236, 237. Van Duser v. Howe, 236. Van Hoesen v. Van Alstyne, 66. Opp.— Sel. — 27 418 TABLE OF CASES. References Van Norden Trust Co. v. Rosen- berg, 95. Vanstrum v. Liliengren, 134, 145. Van Zandt v. Hopkins, 49, 112. Varley v. Title Guarantee & Trust Co., 199. Vawter v. Griffin, 327. Verder's Ex'r v. Verder, 255. Vere v. Lewis, 11 . Virginia v. Turner, 53. Visher v. Webster, 313. Vliet V. Simanton, 34. Vogel V. Starr, 287, 294. 301, 303. Voreis v. Nussbaum, 233. Voss V. Chamberlain, 95, 97, 162, 172, 197, 220, 230. W. Wachusett Nat. Bank v. Fairbroth- er, 301. Wade V. Withington, 315. Wadhams v. Portland, V. & Y. R. Co., 133. Wagner v. Winter, 159. Walker v. Bank of State of New York, 194. V. Dunham, 5, 196. V.Thompson, 11, 62. V. Woollen, 53, 57, 71. Wallabout Bank v. Peyton, 221 . Wallace v. Agry, 121, 122, 128. V. Douglas, 144. V. McConnell, 145. V. Tice, 315. Wallach v. Bader, 215. Walmsley v. Acton, 292. Walsh V. Blatchley, 121, 127, 184. V. Hunt, 313, 315. Walters v. Brown, 298. V. Munroe, 309. Walton V. Mandeville, 133. V. Williams, 196. Wamsley v. Darragh, 243. are to Pages. Ward V. Cheney, 317. V. City Trust Co., 216, 217, 230. V. Johnson, 224. V. Lattimer, 63. V. Smith, 173, 326. V. Sugg, 239. Wardens, etc., of St. James Church V. Moore, 110. Waring v. Betts, 264. Warren v. Briscoe, 262. V. Gillman, 299. Washburn v. Picot, 99, 100. Washington County Mut. Ins. Co. V. Miller, 56. Waters v. Carleton, 49. Watervliet Bank v. White, 170, 182. Watkins v. Bowers, Zl . W^trous V. Halbrook, 83. Watson V. Chesire, 177. Way V. Butterworth, 183. V. Dunham, 334. V. Lamb, 233. V. Towle, 15. Wayland University v. Boorman, 229. Wayman v. Torreyson, 82. Wedge Mines Co. v. Denver Nat. Bank, 15, 81, 225, 228. Weeks v. Esler, 42. Weems v. Parker, 68. Weidman v. Symes, 236, 313. Weil V. Corn Exchange Bank, 304. Weinstock v. Bellwood, 131. Weiss V. Rieser, 99, 216, 240. Weld V. Eliot Five Cent Sav. Bank, 19. Wellington v. Jackson, 309. Wells V. Western Union Tel. Co., 149. Wells, Fargo & Co. v. Vansickle, 35. Westberg v. Chicago Lumber & Coal Co., 4, 72, 137. Western Brass Mfg. Co. v. Maver- ick, 327. TABLE OF CASES. 419 References Westfall V. Farwell, 295. West London Commercial Bank v. Kitson, 194. Westminster Bank v. Wlieaton, 15. Westphal v. Nevills, 96. Weyerhauser v. Dun, 25. Whaley v. Houston, 124, 125. Wheatley v. StroLe, 46. Wheeler v. Guild, 159, 222. V. Webster, 134. V. Whann Co., 158. Whilden v. Merchants' & Planters' Nat. Bank, 120. Whistler v. Forster, 163. White V. Continental Nat. Bank, 192. V. Cushing, 48. V. Davis, 94. V. Fisher, 325. V. Keith, 270. V. Low, 245. V. National Bank, 173. V. Savage, 104, 221, V. Smith, 56. V. Thompson, 34. Whiteside v. First Nat. Bank, 219, 222. Whitney v. Clary, 94. V. Eliot Nat. Bank, 114. V. Inhabitants of Stow, 34. Whittier v. Collins, 304. V. Eager, 104. Whitwell V. Brigham, 321. v. Johnson, 263. V. Winslow, 56. Whitworth v. Adams, 104. Wilkie v. Chandon, 97, 277. Wilkins v. McGuire, 243. Wilkinson v. Sargent, 323. Willard v. Nelson, 223. Willets V. Phoenix Bank, 80, 194. Williams v. Baker, 83. V. Bank of United States, 264, 301. are to Pages. Williams v. Banks, 104, V. Cheney, 234. V. Holt, 210. v. Merchants' Bank, 207. V. Smith, 208. v. Theodore, 193. V. Winans, 151. Williams' Ex'rs v. Williams, 23. Willis v. Green, 291. V. Heath, 190. V. Hobson, 332. Willison V. Smith, 180. Willoughby v. Moulton, 29. Wills V. Wilson, 316. Wilson V. Campbell, 57. V. Denton, 96. V. Hendee, 196, 200, 207, 208. V. Law, 310. V. Senier, 247, 259, 304. V. Tolson, 175. V. Wilson, 94. Wilson Sewing Mach. Co. v. Mo- reno, 60. Windham Bank v. Norton, 259. Windsor Sav. Bank v. McMahon, 58. Winkelman v. Choteau, 216. Winn v. Alden, 293. Winship v. Merchants' Nat. Bank, 98, 220. Winter v. Pool, 25. Wintermute v. Post, 144. Wirt V. Stubblefield, 8, 9, 233. Wisconsin Yearly Meeting of Free- will Baptists V. Bahle, 89. Wiseman v. Chiappella, 124, 125. Wisner v. First Nat. Bank, 138, 269. Wistrand v. Parker, 62. Witte V. Vincenot, 48. Wittey V. Michigan Mut. Life Ins. Co., 108. Wittich V. First Nat. Bank, 269. Wittkowski v. Smith. 263. W. O'Bannon Co. v. Curran, 304. 420 TABLE OF CASES. References Wolfe V. Jewett, 123. V. Tyler, 63. Wolford V. Andrews, 270. Wolstenholme v. Smith, 104, 320, 324. Wood V. Callaghan, 295. V. Oakley, 8. V. Ridgeville College, 113. V. Starling, 241. V. Wood, 74. Woodbridge v. Skinner, 328. Woodbury v. Roberts, 69. Woodford v. Dorwin, 5. Wood River Bank v. First Nat. Bank, 269. Woodrufif V. Hensel, 131. V. Munroe, 310. V. Plant, 257, 258. Woodward v. Severance, 209. V. Smith, 53. Woolen V. Ulrich, 314. Wooley V. Cobb, 97. V. Sergeant, 46. Worden v. Mitchell, 304. Workman v. Wright, 309. Worth V. Case, 36. Wright V. Hart, 63. are to Pages. Wright v. Irwin, 56. V. McFall, 148. V. Smith, 35. V. Traver, 88. W. W. Kimball Co. v. Mellon, 57, 88. Wyman v. Fiske, 94. V. Yeomans, 315. Wynen v. Schavert, 295. Y. Yellow Medicine County Bank v. Tagley, 234. Yingling v. Kohlhass, 71. Young V. Bennett, 13. V. Kelly, 160. Younglove v. Cunningham, 94. Z. Ziegfried v. Stein, 334. Zimbleman v. Finnegan, 92, Zimmerman v. Adee, 36. V. Anderson, 90. v. Rote, 19, 314. ZoUner v. Moffitt, 272, 293, 294, 295. INDEX. A. References are to Pagpg. ABBREVIATION, of maker's name is sufficient signature, 29. ABSCONDING DRAWEE, presentment for acceptance excused, .119. ABSENCE, of drawee not a refusal to accept, 125. ACCEPTANCE, nature and form, 131. definition, 16. in writing signed by drawee, 132. revocation, 131. on face of bill or on separate instrument, 134. necessary to charge drawee, 130. consideration for, 139. not necessary to holder taking for value before acceptance, 218. promise to accept is equivalent to, 150. before bill is drawn, ISO. within 24 hours after presentment, 135, 140. implied, 135. of incomplete, overdue or dishonored bill, 146. general, unqualified, 142. to pay at particular place is general, 145. qualified, 143. conditional, 143. waiver of conditions in, 144. certification of checks, 148. in blank, liability of acceptor to bona fide holder, 235. for honor, 153-156. when permissible, 153. must be in writing, 154. construction of, 154. liabilities of acceptor for honor, 154, 155. maturity of bill payable after sight, 156. bill payable five days after sight is payable five days after acceptance, 68. knowledge of acceptor that payee was fictitious, 71 . instruments accepted when overdue are payable on demand, 146. presentment for, 117-129. 421 422 INDEX. References are to ACCEPTANCE (continued)— acceptor not entitled to presentment for payment, 244. absence of drawee not a refusal to accept, 125. dishonor by nonacceptance, 127. protest for nonacceptance, 270. acceptor insolvent, protest before maturity, 274. liability of acceptor, 191. acceptor is primarily liable, 244. of several parts of bill in a set, 126, 147. three days of grace on acceptance, in North Carolina, 253. action against acceptor on last day of grace is premature, 253. acceptor negotiating bill is estopped to set up payment, 321. acceptor not discharged by failure of holder to sue drawer, 193. ACCEPTOR. See Acceptance. ACCOMMODATION PAPER, defined, 101-105. discount procured by maker is notice that indorsement was for accommodation, 226. authority of holder to insert date on, 20. acceptance for accommodation, 140. acceptor as surety, 104. right of drawer to notice of dishonor, 281. presentment for payment not necessary to charge drawer or in- dorser of instrument made or accepted for his accommodation, 245, 246. accommodation drawer entitled to notice, 284. accommodation indorser entitled to notice, 285. payee cannot recover ajra-nsL accommodation maker, 103, 104. third person signing in blank before delivery for accommodation of payee is liable to all parties subsequent to payee, 198-201. signer for accommodation is liable to bona fide holder with know- ledge of nature of paper, 104, 105. payment by party accommodated discharges instrument, 320. reissuance, 339. contribution between accommodation indorsers on payment by one, 339. indorser held not discharged by delay in presentment for acceptance, 120-122. parol evidence to show character, 102. ACCOUNT, reference to particular account for reimbursement does not destroy negotiability, 50. indorsements for, restrictive, 172. as payment, 326. INDEX. 423 Referencps are to Pages. ACKNOWLEDGMENT, not a sufficient promise to pay, 45. ACT, title of negotiable instrument law, 3. title sufficient, constitutionality, 3. ACT OF GOD, bad weather as excuse for delay in presenting for pay- ment, 259. ACTION, definition, 16. against acceptor on last day of grace is premature, 253. by restrictive indorsee, 174. by transferee in own name, 160. ADMINISTRATORS, personal liability on negotiable paper, 33. ADMISSION, of genuineness of forged signature, 307-310. ADOPTION, of forged or unauthorized signature, 307-310. AFTER SIGHT, instruments payable at fixed period after sight are certain as to time, 67. bills payable after sight must be presented for acceptance, 117. AGENCY, created by delivery of instrument signed in blank, 235-238. signature by agent, 30. signature by "procuration," 34. liability of, 31. notice to agent as notice to principal, 227. for presentment for acceptance, 124, 125. for payment, 246, 247. acceptance in representative capacity, 194. to give notice of dishonor, 286-287. to receive notice of dishonor, 289. indorsement by agent, ISO. indorsement creating is restrictive, 172. restrictive indorsement followed by unqualified indorsement by in- dorsee renders latter liable as general indorser, 204. negotiation by agent without indorsement, 209, 210. undisclosed, liability of agent negotiating without indorsement, 209, 210. personal liability as affected by manner of signing, 31-34. ALLONGE, indorsement on, 165. ALTERATION OF INSTRUMENTS, holder has prima facie authority to fill blanks, 24-27. materiality and effect, 312-317. ALTERNATIVE, instruments payable in money or goods, not •aego- tiable, 64. 424 INDEX. References are to Pages. ALTERNATION (continued)— instruments payable to one or some of several payees, negotiable, 84. bill cannot be addressed to two or more drawees in alternative, 84. provision for sale of collaterals in alternative destroys negotiability, 87. provision in note for maturing whole debt on default of instalment, 57. AMBIGUITY, ambiguous instrument may be treated either as bill or note, 110. words control figures, 107. AMOUNT PAYABLE, holder may fill blank, 25. bona fide holder, 235-237. instrument signed and delivered in blank may be filled up for any amount, 25. certainty, 54-62. provision for interest, 55. certain, though payable with exchange or attorneys' fees, 59-61. may be payable in instalments, 56. rendered uncertain by alternative provision for sale of collaterals, 87. by provision for discount if payment is made before maturity, 56. provision for payment of taxes, 62. words control figures, 107. acceptance to pay only part is qualified, 143. indorsement must be of entire sum, 167. change of is material alteration, 315. holder in due course may recover full amount, 238. mistake in notice of dishonor, 293. ANOMALOUS INDORSERS, 198. ANTECEDENT DEBT, sufficient consideration for negotiable in- strument, 96. consideration for acceptance, 139. for indorsement or transfer, 166. ANTECEDENT PARTIES, time of giving notice of dishonor to, 298. ANTEDATING, does not afifect validity, 23. holder cannot antedate, 20. APPLICATION, of negotiable instruments laws to negotiable instru- ments only, 3. no retroactive efifect, 4. APPRAISEMENT LAWS, negotiability not destroyed by provision for waiver of benefits, 89. ASSENT, of drawee by acceptance, 131, 132. of drawer or indorser to qualified acceptance, 131, 132. INDEX. 425 References are to Pages. ASSIGNMENT, "assignability" and "negotiability" distinguished, 158. contracts capable of, 158. of part of sum payable, not a negotiation, 167. of negotiable instrument, consideration presumed, 161. of bank pass-book, 48. bill does not operate as assignment of funds, 113. when drawn on particular fund does, 114. checks do not operate as, 115. of funds by drawee, cannot be shown after acceptance, 193. to joint maker extinguishes instrument, 325. by drawee, presentment for acceptance may be made to drawee or assignee, 126. ASSUMED NAME, as signature, 29. AT SIGHT, instruments so payable are payable on demand, 65. bills payable at sight must be presented for acceptance, 117. three days of grace on sight drafts in certain states, 253. ATTESTATION, of payment for honor, 330. of protest need not made by notary, 272, 273. ATTORNEYS' FEES, provision for payment of, does not destroy nego- tiability, 59. AUTHORITY, to fill blanks, 23-27. of agent to sign, 30. of municipal officers to execute negotiable instruments, 53. to indorse in representative capacity, 181. B. BANK, definition of, 16. check always drawn on, 14. cannot presume that check was issued for value, 93. not liable on check until acceptance or certification, 148. estoppel by certification of check, 148. as indorsee for collection, on subsequently indorsing without qualifi- cation, is liable as general indorser, 204. indorsement by or to cashier, 181. savings bank sued on draft claimed by third person cannot deposit amount in court pending suit, 115. discounting paper as purchaser for value, 221, 222. instrument payable at, 85. time of presentment for payment, 249. payment by or to bank, 325. BANK BOOKS, not negotiable, 48. 4261 INDEX. References are to Pages. BANK NOTES, instruments payable in negotiability, 63. BANKRUPTCY, notice of dishonor may be given to assignee or trustee, 291. presentment for acceptance, affected by, 126. BEARER, definition, 16. instrument must be payable to order or bearer, 71, 72. what instuments payable to, 76, 81. instruments expressly so payable, 76. instruments payable to order of fictitious or nonexistent persons, 77-80. instruments in which payee is not a person, 80. instruments indorsed in blank, 81. instrument payable to order of maker is not payable to bearer, 73. paper is negotiable by delivery, 163. if specially indorsed, 170. third person signing bearer paper in blank before delivery is liable to all parties subsequent to maker or drawer, 198-201. BILL, definition, 16. BILL OF EXCHANGE, definition, 11 designation as draft, 12. means negotiable bill, 3. within law merchant, 7. several drawees, 12. inland and foreign, 13. check as inland bill, 16. inserting name of referee in case of need, 128. sufficiency of order in bill, 45. must be payable to "order" or to "bearer," 71. negotiability of order with provision to charge to "my account" under certain contract, 55. as consideration for note, 96. checks as consideration for, 96. bill in a set, 14. presentment for acceptance, 126. acceptance, 147. negotiation, 184. construction of instrument, covenant or bill of exchange, 45, 46. instrument held not to promise anything in addition to payment of money, 91. instrument held to be good bill, though blank as to name of payee, 82. as promissory note, 110. not an assignment of funds, 113. INDEX. • 427 References are to Pages. BILLS OF EXCHANGE (continued)— presentment for acceptance, 117-129. acceptance, 130-152. before signed by drawer, 146. for honor, 153-156. varying eflfect of bill is qualified, 143. description in promise to accept, 150. presentment for payment, 242. three days of grace on sight drafts in some states, 253. payable five days after sight is payable five days after acceptance, 68. protest, 268-281. payment for honor, 329-332. as payment, 326-328. BILLS OF EXCHANGE, ACT 1882, repeal of statute 3 and 4 Anne, c. 9, § 1, 7. BILLS OF LADING, negotiability, 46. BILLS PAYABLE, instruments payable to, are payable to bearer, 80. BLANKS, holder has prima facie authority to fill, 19-27. delivery essential, 24. holder may fill in date of acceptance, 141. instruments signed and delivered in blank, 25. rights of bona fide holders, 26. for name of payee, certainty in designation of payee, 82, 83. signature in blank by third person, before delivery, 198. indorsement in blank, 171. may be made special, 170. may be filled by holder, 24. instrument is payable to bearer, 82. BONA FIDE HOLDERS, 211-239. paper must be complete and regular on face, 212. must take in good faith, 216. must take before maturity, 214. must take for value, 217-222. must take without notice, 222. transferror's title defective, 223. notice of defect, 225. must take in due course of business, 227. purchasers of demand paper, 215, 216. purchaser of paper payable to order must obtain indorsement of payee, 213. of instrument signed and delivered in blank, 235. holder deriving title through holder in due course. 241. 428 INDEX. References are to Pages. BONA FIDE HOLDERS (continued)— payee repurchasing instrument is not, 241. presumption and burden of proof, 228-231. as to date of instrument, 21. as to delivery, 238. of parts of bill in a set, liability of acceptor of more than one part, 147. rights under altered instruments, 310-314. may recover against accommodation party, 220. may recover full amount of instruments, 238. notice from irregularities on face of paper, 212. recital "second of exchange, first unpaid," 14. defenses available against, 232. incomplete instruments, 26, 27. unindorsed payments no defense against, 233. fraud and duress no defense against, 233. failure of consideration no defense against, 234. omission to give notice of dishonor no defense, 306. renunciation no defense, 337. no recovery on forged instrument, 307-310. BONDS, seal does not destroy negotiability, 42. indemnity against presentation of lost paper, 276. BROKER, liability on negotiation without indorsement, 209. BURDEN OF PROOF. See Evidence. BUSINESS HOURS, presentment for acceptance must be made at a reasonable time, 122. time of presentment for payment, 249. of instrument payable at bank, 250. c. CANCELLATION, discharge by, 323. of persons secondarily liable, 333. CAPACITY, of drawer, admitted by acceptance, 193. of payee to indorse, admitted by acceptance, 193. admitted by certificate, 194, 195. admitted by maker or drawer, 189, 190. incapacity of drawee, instrument may be treated as bill or note, 110. presentment for acceptance excused, 119. notice of dishonor excused, 282, 283. incapacity of prior parties, rights of bona fide holders, 233. INDEX. 429 References are to Pages. CAPACITY (continued)— warranty of, under general indorsement, 203. under transfer by delivery or qualified indorsement, 205. CASH, instruments payable to, are payable to bearer, 80. CASH NOTES, instrument payable in, is payable in money, 63. CASHIER, indorsement by or to, 181. may give notice of dishonor, 286. CERTAINTY, drawee must be named or indicated with, 83. payee must be named or indicated with, 81-83. in sum payable, 54-62. instruments payable with exchange are sufficiently certain, 58. instruments payable with interest, 55. instruments payable in instalments, 56. default provisions, 57. instruments providing for payment of attorneys' fees and costs are sufficiently certain, 59. instruments providing for payment of taxes and charges are not cer- tain, 62. destroyed by alternative contract for sale of collaterals, 87. as to place of payment, 84-86. as to time of payment, 64-67. instruments payable "on or before" are certain as to time, 69. instruments payable on contingency not negotiable, 70. as to time from which interest runs, 108, 109. CERTIFICATE, of protest, conclusiveness, 272. receivers' certificates not negotiable, 47. of deposit, 47. CERTIFICATION, of checks, 148-150. presentment of check for, 118. CHANGES IN THE LAW, seal does not destroy negotiability, 42, 43. provision for exchange does not destroy negotiability, 58. provision for payment of costs of collection or attorneys' fees does not destroy negotiability, 59-61. instruments payable to order of holder of an office are negotiable, 75, 76. conditional sale note not negotiable, 88. instrument payable to order of maker must be indorsed by him, 73. consideration for non-negotiable instrument must be proved, 93. antecedent or pre-existing debt sufficient consideration, 96. partial want or failure of consideration is good defense, though an unliquidated amount of whole consideration, 99. 430 INDEX. References are to Pages. CHANGES IN THE LAW (continued) — one signing as agent without authority or without disclosing principal is liable on the instrument, 31, 32. negotiable bill or check does not operate as assignment of funds, 113. check not an assignment and bank not liable until certification, 115. acceptance must be in writing, 132. promise to accept must be in writing, ISO. drawee must accept within 24 hours after presentment, 140, 141. acceptance to pay at particular place is general, 145. person, not otherwise a party, signing in blank before delivery is an indorser and liable to payee, 197. indorsement of cashier or "other fiscal officer" is indorsement of bank or corporation, 181. indorser without qualification of instrument indorsed to him res- trictively for collection or deposit is liable as general indorser, 204. joint payees or indorsees who indorse, deemed to indorse jointly and severally, 209. blank indorsement may be made special, 170. person required to pay may disregard condition in indorsement, 177. transfer of sum payable to two or more indorsees severally is not a negotiation, 167. time of presentment for payment, of instruments payable on de- mand, 255. instruments payable at sight are payable on demand, 65, 66. days of grace abolished, 253. notice of dishonor may be sent by mail in all cases, 294. notice of dishonor need not be signed, 292. holder in due course may recover full amount, 238. holder in due course may enforce altered instrument according to its original tenor, 312-314. CHARGES, provision for payment of taxes and charges renders amount uncertain, 62. CHECKS, definition, 14. instrument not naming a payee is not a check, 81. bank cannot presume that check was issued for value, 93. as consideration for bill, 96. not an assignment of funds, 115. presentment for acceptance or certification, 117-129. certification, 148-150. payable to order, transferee without indorsement of payee not a holder in due course, 213. need not be protested, 269. INDEX. 431 References are to Pages. CHECKS (continued)— presentment for payment necessary to charge drawer, 243. time of presentment for paj^ment, 249. as payment, 326-328. CHOSE IN ACTION, non-negotiable, distinguished from negotiable instrument, 158-161. CITIES, municipal warrants and orders, not negotiable, 53. CLERK, of drawee, presentment for acceptance may be made to, 124. of notary, protest by, 272, 273. CODIFICATION, of laws relating to negotiable instruments, 1. as repeal of prior statutes on same subject, 8. COLLATERAL AGREEMENTS, memoranda made before delivery are part of contract, 112. affecting liability of maker or drawer, 189. fixing time of payment, parol evidence, 66. not a defense against bona fide holder, 234. COLLATERAL SECURITIES, provision for sale of, does not destroy negotiability, 86-88. alternative contract for sale of, destroys negotiability, 87. acceptance of, not a payment, 327. misapplied, persons secondarily liable are discharged, 335. indorsement as collateral, holding for value, 219, 220. COLLECTION, provision for payment of costs of, does not destroy negotiability, 59-61. agency for authorizes indorsement, 180. indorsements for, are restrictive, 172, 173. indorsee for, may receive payment, 174. may sue in his own name, 174, 175. indorsement of collecting bank does not imply warranty of prior in- dorsement, 204. indorsement in blank after indorsement for collection is general in- dorsement, 204. agent for may give notice of dishonor, 286, 287. agency for, effect on time required for notice to successive obligors, 299. holder for, may present for payment, 247. agent for, is entitled to receive payment, 326. guaranty of, holder must first exhaust remedies against principal debtor, 267. bank must collect draft in money, 327. COMMISSIONERS, on uniform state laws. 1. 432 INDEX. References are to Pages. COMMON LAW, governs non-negotiable instruments, 3, 4. act a codification of, 1. rule that seal destroys negotiability abolished by negotiable instru- ments laws, 42, 43. statutes and decisions affecting law merchant, 7, 8. oral certification of check good at, 149. COMPETENCY, indorsement of infant or corporation passes title, 178. COMPUTATION, of time of maturity, 254. CONDITIONAL, agreements for attorneys' fees, effect on negotiability, 59-6L sales, notes not negotiable, 88. « delivery, 36. acceptance, 143. cannot be shown by parol, 133, 134, 193. promise to accept, 150. ' indorsement, 177. CONFESSION OF JUDGMENT, provision for, does not destroy ne- gotiability, 88. CONFLICT OF LAWS, instrument governed by law in force at time of its execution, 4. what law governs instrument executed and delivered between passage of law and time it took effect, 6. presumption law of sister state, 8. CONSENT, freedom of necessary, 17. CONSECUTIVE INDORSEES, parol evidence to show to which "with- out recourse" applies, 207. general indorsement warranting capacity of prior indorsers, 203. indorsement of collecting bank does not imply warranty of prior indorsement, 204. notice to one binds him, 291. acceptance for honor of first indorser, 155. CONSIDERATION, statement not necessary to negotiability, 44. statement in instrument does not destroy negotiability, 44, 5L is presumed, 92-94. presumption of sufficiency, 94. presumption of legality, 94. burden of proving illegality, 94. illegality, rights of bona fide holder, 233, 234. antecedent or pre-existing debt sufficient, 96. services, 95. waiver of legal rights, 95. INDEX. 433 References are to Pages. CONSIDERATION (continued)— one negotiable instrument sufficient consideration for another, 96. for note for patent right, must appear in note, 44. for acceptance, 139. not necessary to title of holder taking for value before accept- ance, 218. for promise to accept, 151. for indorsement or transfer, 161, 166. holder cannot insert, 171. presumption, 161. purchase for value, 217-222. presumption and burden of proof, 228-231. for agreement to extend time, 334. for waiver of protest, 276, 277. accommodation paper, 101. corporations cannot become accommodation parties, 105. want or failure, 99. equitable relief, 101. estoppel to set up, 101. failure of, not a defense against bona fide holder, 232. inadequacy no defense, 101. CONSTITUTIONAL LAW, sufficiency of title, 3. application of laws, 5. constitutionality of statute requiring note for patent right to so state, 45. CONSTRUCTION, of negotiable instruments, in general, 2, 3. resort to previous rules, 2. of negotiable instrument laws, substantial compliance sufficient, 41 what instruments paj'able to order, 72-76. what instruments payable to bearer, 76-81. instrument with blank space for name of payee construed to be payable to order of maker, 82. what instruments payable on demand, 65-67. of instruments payable at fixed period after date or sight, 70. paper payable "on or before" specified date is payable on that date, 69. "ninety after date" means 90 days after date, 68. of bill drawn in a set, 14. several signers under "I promise to pay" are jointly and severally liable. 111. "I or we promise to pay" creates joint and several liability. 111. "We or either of us promise to pay" creates joint and several liability, 111. Opp. — Sel.— 28 434 INDEX. References are to Pages. CONSTRUCTION (continued)— when bill may be treated as note, 110. of provision as to place of payment, 85. CONSTRUCTIVE DELIVERY, instrument left in place accessible to payee, 36. CONTEMPORANEOUS AGREEMENTS, construed as part of con- tract, 112. fixing time of payment, 66. CONTINGENCY, instruments payable on, not negotiable, 70. CONTRACTS, what constitutes promise to accept, 150. capacity of prior parties warranted by general indorsement, 203. drawee without capacity, notice of dishonor excused, 283, 284. negotiability of order charging payment to amount due under certain contract, 50, 51. alternative contract for sale of collateral destroys negotiability, 86-88. acceptance depending on completion of, is qualified, 143, 144. rules as to consideration applied to negotiable instruments, 94. rules of construction applied to negotiable instruments, 107. rules governing discharge applied to negotiable instruments, 324. CONTRIBUTION, agreement between consecutive indorsers, 207, 208. between accommodation indorsers on payment by one, 339. COPY, of lost instrument, protest may be made on, 275. CORPORATIONS, corporate paper is negotiable, though sealed, 43. bonds are negotiable, 42, 43. instrument payable to trustees of corporation "or their successors in office, or order," is negotiable, 75, 76. directors personally liable on acceptances purporting to be for cor- poration not authorized to accept, 194. indorsements by or to officers, 180, 181. transferee of note without indorsement of president, not a holder in due course, 213. COSTS, instruments providing for payment of, negotiability, 59. erasure of agreement to pay is material alteration, 316. COUNTERCLAIM, holder of negotiable instrument may interpose, 160. no defense against bona fide holder, 232. COUNTY ORDERS, not negotiable, 53. COUPONS, detached from negotiable bonds are negotiable, 42. COVENANT, construction of instrument, covenant or bill of exchange, 45. CREDITS, as payment, 326. INDEX. 435 References are to Pa pes. CURRENCY, instrument payable in, negotiability, 63. CURRENT FUNDS, instruments payable in, not negotiable, 63. CURRENT MONEY, instruments may be payable in particular kind of money, 63. CUSTOM, affecting time of presentment for acceptance, 120-122. affecting manner of sending bill for acceptance, 121. evidence of, to show instrument payable in current funds to be pay-^ able in money, 63. CUSTOM OF MERCHANTS. See Law Merchant. D. DAMAGES, for breach of warranty of genuineness, 201. from want of notice, defense by guarantor, 282. on protest of foreign bill, 278, 279. DATE, not necessary to validity or negotiability, 19, 41. presumed as of date of issue, 19. date presumed correct, 21. holders in due course, 21. defective, does not invalidate order, 19. antedating, 23. postdating, 23. parol evidence where date is ambiguous or illegible, 22. may be inserted by holder, 20. filling blanks, 20. from which interest runs, 108. of acceptance, 141. takes date from presentment, 141. recital in notice of dishonor, 293. change of, is material alteration, 21. instruments payable at fixed period after is certain as to time, 67. mistake in, burden of proof, 21. may be shown by parol, 22. cannot be shown against bona fide holder, 234. laws take effect, 5. DAYS OF GRACE, time of maturity, 253. DEATH, instrument payable at death is negotiable, 70. of drawee, presentment for acceptance may be made to personal representative, 126. of drawee, presentment for acceptance excused, 119. of holder, excuse for delay in presentment for payment, 119. 436 INDEX. References are to Pages. DEATH (continued)— of member of firm primarily liable, presentment for payment to sur- vivor, 247. of person primarily liable, presentment for payment to personal rep- resentative, 247. of principal, revoking agency to receive notice of dishonor, 289. of party to receive notice, service on personal representative, 289. DECLARATION, before payment for honor, 320. DEFAULT, provision hastening maturity of instrument payable in in- stalments, does not destroy negotiability, 57. DEFENSES, want or failure of consideration, 99. want of consideration no defense to acceptor against payee, 140. by guarantor, want of notice of dishonor, 282. available against bona fide holder, 232. DEFINITIONS, promissory note, 10. acceptance, 16. action, 16. bank, 16. bearer, 16. bill, 16. bill of exchange, 11. check, 14. delivery, 16. inland and foreign bills, 13. indorsement, 16. instrument, 16. issue, 16. holder, 16. person, 16. person primarily liable, 336. value, 16. written, 16. DELAY, in presentment for acceptance, 121. in presentment for payment, when excusable, 259. protest, 277. in enforcing payment does not discharge persons secondarily liable, 334. DELIVERY, definition, 4, 16, 35. essential to completion of contract, 34, 35. of instrument before passace of nr-r^tv-'Me instrument law, 4. possession prima facie evidence of, 37, 38. suf&ciency, 35, 36. INDEX. 437 References are to Pages. DELIVERY (continued)— by mail, 36. corulitional, 36, 37. of acceptance, 132. negotiation by, 163. implied warranties, 201. essential to transfer by indorsement, 166. indorsement of paper negotiable by delivery, 197. instruments payable to bearer, specially indorsed, pass by delivery, 170. want of, as defense against bona fide holder, 232-235. presumptions, 37, 38. presumed in favor of holder in due course, 235. instrument signed and delivered in blank relates back to time of original delivery, 36. title by, under indorsement in blank, 171, 172. title to antedated or postdated instrument dates from, 23. DEMAND, instrument must be payable on, or at fixed or determinable future time, 64. on instrument executed before passage of law, not governed thereby, 4. what instruments payable on, 65, 66. instrument payable at maker's convenience is payable on, 65. instrumicnt payable "at any time called for" is payable on, 65. instrument payable on the "first day of March," no year expressel, is payable on, 65. instruments not stating time of payment are payable on, 66. instruments issued, accepted or indorsed when overdue are payable on, 66. check always payable on, 15. note payable in instalments construed to be payable on, 56. inures to subsequent holders of dishonored paper, 67. note payable on, draws interest from date, 108. bills payable on, need not be presented for acceptance, 117, 118. paper negotiated unreasonable time after issuance, purchaser not holder in due course, 215. time for presentment for payment of instruments payable on, 254-259. DE MINIMIS, maxim does not apply to alterations, 316, 317. DEPOSIT, certificates of are negotiable, 47. indorsement for, restrictive, 172. DEPOSIT IN COURT, savings bank sued on draft claimed by third per- son cannot deposit fund in court pending suit, 115. DESCRIPTIO PERSONALE, words denoting agency, 32, 33. in indorsement, 181. i38 INDEX. References are to Pages. DESCRIPTION, of bill in promise to accept, 150. DESTRUCTION, of instrument before delivery, 35. of bill by drawee, implied acceptance, 135. of check, excuse for presentment for payment, 276. DETENTION, of bill by drawee, implied acceptance, 135. protest of detained bill, 275, 276. DETERMINABLE FUTURE TIME, certainty as to time of payment, a. DILIGENCE, in presenting for payment at place designated, 262. as an excuse for failure to present for acceptance, 119. in giving notice of dishonor, 302. DIRECTORS, personally liable on acceptances purporting to be for cor- poration not authorized to accept, 194. DIRECTORY, sending notice to directory address not sufficient dili- gence, 302. DISABILITY, indorsement by infant or corporation passes title, 178. DISCHARGE, of drawer by negligence of payee, 191. of drawer or indorser by want of notice of dishonor, 281. of drawer and indorsers by failure to protest, 269. of drawer of check by delay in presenting for payment, 243, 259. of indorser releases subsequent indorsers, ZZZ. of prior party discharges person secondarily liable, 334. of indorser whose name is struck out and all subsequent indorsers, 185. by renunciation, 336. by cancellation, 323, 333. by payment, 320. DISCOUNT, provision for discount if note be paid before maturity destroys negotiability, 56. of accommodation paper, 104. procured by maker is notice that indorsement was for accommoda- tion, 226. discounting bank as purchaser for value, 221. DISHONOR, by nonacceptance, 127. bill dishonored if drawee refuses to put acceptance on face bill, 134. acceptance of dishonored bill, 146. by acceptor for honor, bill must be protested, 274. recital in notice necessary, 292, 293. notice of, 281-307. by nonpayment, 266. provision to pay made after, waiver of notice of dishonor, 304. INDEX. 439 References are to Pages. DISSOLUTION, of firm primarily liable, presentmenf for payment, 248. DRAFT. Same as Bill of Exchange, 12. DRAWEE, must be named or indicated with certainty, 83. bill may be addressed to several jointly, 12. bill cannot be addressed to two or more drawees in alternative or in succession, 12. in case of need, insertion of name in bill, 128. instruments payable to order of are payable to order, 74. presentment for acceptance must be made to, 125. discharge by failure to present for acceptance in time, 121. not liable until acceptance, 130. must accept within 24 hours after presentment, 140. absence not a refusal to accept, 125. implied acceptance by retaining or destroying bill, 135. by accepting admits that he is in funds, 191. by accepting undertakes to pay at maturity, 191. must sign acceptance, 132. name written on bill is sufficient acceptance, 132. revocation of acceptance, 131. bill does not operate as assignment of funds, 113. bankruptcy, presentment for acceptance may be made to bankrupt or to trustee, 126. acceptance by one of several is qualified, 143. acceptance of more than one part of bill in a set, 147. acceptance for honor at instance of, 154. same person as drawer, holder may treat bill as note, 110. without capacity to contract, instrument may be treated as bill or note, 110. presentment for acceptance excused, 119. fictitious, instrument may be treated as note or bill, 110. presentment for acceptance excused, 119. presentment for payment excused, 265. dead, personal representative may receive presentment for accept- ance, 126. death, excuses presentment for acceptance, 119. DRAWER, signature of, 28. right to insert name of referee in case of need, 128. instruments payable to order of, are payable to order, 73. instrument with blank space for name of payee construed to be payable to order of maker, 82. existence admitted by acceptance, 191. waiver of presentment for acceptance, 122. 440 INDEX. References are to Pages. DRAWER (continued)— entitled to notice of dishonor, 281. when notice need not be given to, 282, 283. same person as drawee, holder may treat bill as note, 110. notice of dishonor not necessary, 282, 283. acceptance for honor of, 153. presentment for payment is necessary to charge, 243. liability of, in general, 190. join and several liability of several drawers, 111. liability to referee in case of need, 128. discharged when payee sends draft by mail, and fails to discover loss for six months, 191. recourse by holder against, in case of nonacceptance, 127, 128. of check discharged by delay in presentment, 256-259. discharged by certification procured by holder, 150. liability on separate parts of bill in a set, 147. discharged by qualified acceptance, 146. discharged by failure to protest, 268, 269. DUEBILL, not negotiable, 45. DUE COURSE, what constitutes, 211. holders in, 211-240. DUPLICATE, check made in, not a bill, 16. DURESS, right of bona fide holder, 233. in procuring execution, 18. E. ELECTION, of holder to require something in lieu of money, 90. of holder to treat bill as note, 110. EPIDEMIC, provision in charter of Greater New York for presentment and protest in case of epidemic in city, 123, 124. EQUITABLE ASSIGNMENT, bill or check does not operate as, 113- 116. effect of order, 113-115. EQUITIES, available against assignee of non-negotiable instrument, 159. what are, rights of bona fide holders, 211-240. EQUITY, relief on ground of want of consideration, 99, 100. relief denied to indorser not diligent in protecting himself against loss of security by prior parties, 335. ESSENTIALS OF NEGOTIABILITY. See Negotiability. INDEX, 441 References are to Pages. ESTATE, instrument payable to, does not sufficiently designate payee, 82. is payable to bearer, 80. notice sent to "estate of" a certain person not sufficient, 289. ESTOPPEL, to set up want or failure of consideration, 99. to question instrument signed and delivered in blank, 235-237. to deny forged or unauthorized signature, 309. EVIDENCE, of authority of agent to sign, 31. of delivery before passage of negotiable instrument law, 5. of custom, to show instrument payable in current funds to be pay- able in money, 63. of consideration, 92-94. of gross negligence of holder is evidence of bad faith, 217. certificate of protest, conclusive evidence of facts recited, 272. judicial notice, purpose of act, 2. presumption that law merchant is in force, 7. presumption as to legislative intent in postponing time for statute to go into effect, 4. presumption as to date, 19. date of acceptance prima facie true date, 142. presumption of delivery, 37, 38. before passage of law, 5. in favor of bona fide holder, 228. presumption of consideration, 92-94. for acceptance, 139. for indorsement of transfer, 161, 166. in favor of holder, 218. rebuttal, 92-94. presumption that signature was not for accommodation, 103. presumption as to time and place of indorsement, 183. presumption that holder took in due course, 228. no presumption that drawee will accept more than one part of bill m set, 126. presumption of payment rather than purchase, 323. presumption and burden of proof as to alterations, 317, 318. presumption held conclusive that certain presentment was for ac- ceptance not payment, 122. burden of proof, as to mistake in date, 19. consideration, 92. cancellation, 324. holding in due course, 228. 442 INDEX. References are to Pages. EVIDENCE (continued)— parol, as to memoranda made before delivery, 112. to show accommodation character, 102. as to mistake in name of payee, 83. to explain ambiguous or illegible date, 22. to show mistake in date, 21, 22. to negative liability of indorser in blank, 170. to show that intent was to pay in money, 62. to fix time of payment where none is stated, 66. showing application of words "without recourse" to, some of several successive indorsers, 177. showing order of liability of consecutive indorsers, 207. EXCHANGE, provision for, does not destroy negotiability, 58. promise to accept bill not an acceptance of bill "with exchange," 150. EXCHANGE, BILL OF. See Bill of Exchange. EXCHANGE OF PAPER, consideration, 96. not accommodation paper, 103. EXECUTION, of negotiable instruments, 17-34. matters necessary to valid execution also necessary to negotiability, 40. seal as part of proper execution of corporate paper, 42, 43. defective, as defense against bona fide holder, 232-235. place of, as proper place for presentment for payment, 263. waiver of exemption or stay laws does not destroy negotiability, 89. EXECUTORS, personal liability on notes, 31. "executor" added to signature does not relieve signer from personal liability, 32, 33. may receive notice of dishonor, 289. EXEMPTION LAWS, negotiability not destroyed by provision for waiver of benefits, 89. EXHIBITION, of instrument on presentment for payment, 263, 264. EXPENSES, instruments payable to, are payable to bearer, 80. EXTENSION, discharges persons secondarily liable, 334. FAILURE OF CONSIDERATION, 99-101. FALSE REPRESENTATIONS, not a defense against bona fide holder, 232-235. FARM PRODUCTS, note for speculation in, must so state, 44, 45. INDEX. 443 References are to Pagres. FEES, of attorneys, provision for payment of does not destroy nego- tiability, 59-61. FICTITIOUS PERSON, drawee, instrument may be treated as bill or note, 110. presentment for acceptance excused, 119. notice of dishonor excused, 283, 284. instruments payable to order of fictitious payee are payable to bearer, 77-80. FIGURES, on margin, control amount to be inserted in blank, 27, controlled by words in body of instrument, 107. used as signature, 29. FILLING BLANKS, prima facie authority of holder, 23-27. for name of payee, 25. time and place of payment, 25. amount payable, 25. paper signed in blank, 25. rights of holders in due course, 27. FIRST OF EXCHANGE, bill drawn in a set, 14. FISCAL OFFICERS, of corporations may indorse for it, 181, 182. FORBEARANCE, as consideration for negotiable instrument, 94, 95. for acceptance, 139. FOREIGN BILLS, definition, 13. check drawn by bank in one state on bank in another, not a foreign bill, 13. designation as drafts, 12. m.ust be protested, 268, 269. damages on protest, 278, 279. FOREIGN MONEY, instruments payable in, negotiability, 63. FORGERY, 2. acceptor cannot set up, 307-310. last of several sureties cannot set up forgery of names of prior sure- ties, 307-310. of name of maker, liability of general indorser, under warranty of genuineness, 205. FORM, of signature of maker or drawer, 29. of negotiable instrument, 40-90. of acceptance, 131. conformity of bill with promise to accept, 150. of indorsement, 168. completeness and regularity essential to holding in due course, 212. 444 INDEX. References are to Pages. FORM (continued)— of notice of dishonor, 291, 292. of protest, 270-272. FRAUD, in obtaining delivery avoids instrument, 36. defect in title of person negotiating, 223-225. in procuring execution, 18. FRAUDS, STATUTE OF, oral acceptances, 132. oral promise to pay check, 149. FUND, instruments payable out of particular fund, not negotiable, 52. drawee v/ithout funds, notice to drawer excused, 283. G. GAMING, rule that bona fide holder may recover full amount does not cure gaming transactions, 238. GARNISHMENT, of maker before maturity, 189, 190. GENERAL INDORSER, liability of, 203. GENUINENESS, warranty under transfer by delivery or qualified in- dorsement, 202. GOLD, instruments payable in are negotiable, 63. GOOD FAITH, essential to holding in due course, 216. as affecting notice, 225. inadequacy of consideration does not show mala fides, 238. burden of proof, 228. GRACE, days of, 253. purchase on last day of, is purchase before maturity, 215. GUARANTY, signers held to be guarantors, not indorsers, 195-198. by drawee, of acceptance for honor, 154. for collection, holder must exhaust remedies against principal debtor, 267. holder cannot add contract of, 170. with indorsement of paper negotiable by delivery, liability as gen- eral indorser, 197. notice of dishonor to guarantor, 282. H. HEIRS, instrument payable to "the heirs" of certain person to sufficiently certain as to payees, 82. HOLDER, definition, 16. prima facie authority to fill blanks, 24-27. INDEX. i45 References are to Pages. HOLDER (continued)— may insert date, 20. of acceptance, 141. instrument payable to certain person "or holder" is payable to bearer, 77. judgment note should authorize confession of judgment in favor of "holder," 88. option to treat bill as note, 110. to require something in lieu of money, does not destroy negotia- bility, 90. to resort to referee in case of need, 128. entitled to acceptance on face of- bill, 133. entitled to unqualified acceptance, 145. proper person to present for acceptance, 125. must present for acceptance or negotiate within reasonable time, 120 rights and duties on dishonor for nonacceptance, 127, 128. may convert blank indorsement mto special indorsement, 170. may strike out unnecessary indorsements, 185. cannot insert anything changing nature of indorsement, 170. in due course, 210-239. presumption, 228. presumption as to date of instrument in hands of, 22. of bill drawn in set, liability of acceptor on more than one part, 147. with lien is holder for value, 219. deriving title from holder in due course, is holder in due course, 241. certification of check procured by, discharges drawer and prior ir^- dorsers, 149. must present for payment, 246. must give notice of dishonor, 285-288. recourse against persons secondarily liable, 267. payment to, 320. refusal to receive payment for honor, 332. HOLDER IN DUE COURSE. See Bona Fide Plolders. HOLIDAY, day of maturity, presentment on next business day, 252. HOMESTEAD LAWS, negotiability not destroyed by provision waiv- ing benefits, 89. HONOR, acceptance for, 153-156. payment for, 329-332. I. IDENTIFICATION, of bill in promise to accept, 150. of instrument in notice of dishonor, 292, 293. 446 INDEX. References are to Pages. ILLEGAL PROVISIONS, do not destroy negotiability, 90. IMPLIED PROMISE, sustaining negotiability of acknowledgments, 45. IMPLIED REPEAL, of statutes by negotiable instruments laws, 8, 9. IMPLIED WAIVER, of presentment for payment, 264, 265. of notice of dishonor, 303. IMPLIED WARRANTIES, of nonpayment on sale of instrument, 163. on negotiation by delivery or qualified indorsement, 201. liability of indorser without recourse, 176. INCAPACITY, to execute, 18. INCOMPLETE INSTRUMENTS, 23-27. INDEMNITY, against presentation of lost paper by bona fide holder, 276. against effect of forgery, ratification, 307-310. to person secondarily liable defeats discharge by extension to princi- pal debtor, 335. INDORSEMENT, 158-186. definition, 16. negotiation by, 165. signature of indorser sufficient indorsement, 168. status of person signing in doubtful capacity, 195-198. may be in pencil, 18. must be of entire instrument, 167. delivery essential, 166. capacity of payee to indorse, admitted by acceptance, 191-195. maker or drawer admits capacity of payee to indorse, 189, 190. by corporation or infant passes title, 178. not necessary to transfer of warehouse receipts, 46. negotiable words may be supplied by, 72. of statement of property owned by maker does not destroy nego- tiability, 51. maker must indorse instrument payable to his order, 73. after maturity as creating new instrument, 66, 67. for accommodation, 101. of certified check, 195. joint payees or indorsees must all indorse, 179. by agent or in representative capacity, 180, 181. by or to cashier or other fiscal officer, 181. ratification, 180, 181. time and place, 183, 184. transfer without, of instrument payable to order, 162. omitted by mistake, when made relates back to time of transfer, 162. INDEX. 447 References are to Pagea. INDORSEMENT (continued)— unnecessary, of paper negotiable by delivery, 163. notice to purchasers of infirmities and defects, 222. right of indorser to insert name of referee in case of need, 128. of note paj'able to order of maker, 7Z. striking out and reissuing instrument, 185, 186. general, warrants title in indorser, 203. in blank, 171. instrument is payable to bearer, 76-81. striking out, 185. made special, 170. special, of instrument payable to bearer, 170. indorsee must indorse, 169, 170. restrictive, 172-174. qualified, 175. implied warranties, 201. without recourse, 175. parol evidence applying term to some of several endorsers, 177. conditional, 177. irregular, liability of indorser, 198. consecutive indorsers, 207. acceptance for honor of first indorser, 153. instruments indorsed when overdue are payable on demand, 65, 67. holder cannot change, 170. liability of indorsers, 195-209. presentment for payment necessary to change indorsers, 243. indorser entitled to notice of dishonor, 281, 282. when notice need not be given to indorser, 284, 285. when indorser bound by written waiver of notice of dishonor, 304. joint indorsees deemed to indorse jointly and severally, 207. warranties under general indorsement, 203-207. warranty of capacity of prior indorsers, 203-207. liability of indorsers on separate parts of bills in a set, 201. holder has right of recourse against indorsers on dishonor for non- acceptance, 127. discharge of indorsers by certification procured by subsequent holder, 150. discharge of indorser by qualified acceptance, 146. discharge of indorser by want of timely presentment for acceptance, 120, 121. indorser held not discharged by delay in presenting for acceptance, 120-122. indorsers discharged by failure to protest, 268, 269. 448 INDEX. References are to Pageg. INDORSEMENT (continued)— discharge of indorser releases subsequent indorsers, 333. discharge of indorser whose name is struck out, 185. after maturity of paper transferred before maturity, holding in due course, 214-216. forged, no recovery by bona fide holder, 307-310. to acceptor or maker discharges instrument, 324. of note payable to order of maker, provision does not apply to note negotiated before passage of law, 5. made after passage of act, application to, 4. INFANTS, indorsement by, passes title, 178. INITIALS, signature by is sufficient, 29. INLAND BILLS, definition, 13. designation as drafts, 12. need not be protested, 268, 269. INSOLVENCY, of drawee, presentment for acceptance may be made to insolvent or to his trustee or assignee, 126. protest before maturity where acceptor is insolvent, 274. of person primarily liable does not excuse presentment, 265. of party to receive notice, service on assignee or trustee, 291. INSTALMENTS, instruments payable in are negotiable, 56. INSIRUAIENT, means negotiable instrument, 16. INSURANCE, notes for fire insurance must state consideration in Wis- consin, 44. premium notes negotiable, 52. premium note for payment of' "such additional premium as may arise" on certain policy, not negotiable, 55. INTEREST, filling blanks for, 25. provision for does not destroy negotiability, 55, 56. provision that default shall mature principal debt does not destroy negotiability, 57. coupons detached from negotiable bonds are negotiable, 42. construction of interest clause, 108. overdue, does not destroy bona fide character of purchase, 214. as damages on protest of foreign bill, 278, 279. alteration of, is material, 314-316. INTERLINEATIONS, not presumed to be alterations, 317, 318. 'T. O. U.," not negotiable, 45. IRREGULAR INDORSER, who is, 178. 179. INDEX. 449 Sefcrencee pre to Pages. ISSUE. See, also, Delivery, definition, 16. instruments issued when overdue are payable on demand, 65-67. J. JOINT PARTIES, 111, 112. bill may be addressed to joint drawees, 12. instruments payable to two or more payees jointly are payable to order, 74. consideration passing to one or several joint makers is sufficient, 96. "We promise to pay" creates joint liability, 111, 112. presentment for acceptance of bill addressed to two or more drawees, 125. joint payees or indorsees must all indorse, 179. agreement of consecutive indorsers for joint liability, 207. must each be notified of dishonor unless partners, 290. payment by one joint maker discharges debt, 321. joint and several liability. 111, 112. JUDGMENT NOTES, negotiable, 88. JUDICIAL NOTICE, purpose of act, 2. JUDICIAL SALE, notes for purchase money, negotiability, 75, 70. K. KNOWLEDGE, of dishonor, is not notice, 292. of president of bank, when notice to bank, 227. L. LARCENY, bona fide purchasers of stolen paper, 222. LAW MERCHANT, presumed to be in force, 8. as part of common law, 8. bills of exchange were always within, 7. governs in cases not covered by negotiable instruments laws, 7. act a codification of, 1. what is, 7. LEGISLATURE, postponing time for statute to take effect, presump- tions, 5-7. LETTER, containing promise to accept is an acceptance, 151. Opp.— Sel.— 29 450 INDEX. References are to Pages. LETTER BOX, deposit of notice of dishonor in, 295. LIEN, on instrument, lienholder as holder for value, 219. LOST INSTRUMENT, protest on copy, 275. M. MAIL, posting is a delivery, 36. delay in mails excusing failure to make timely presentment for ac- ceptance, 12L service of notice of protest in case of epidemic in New York City, 123, 124. notice of dishonor by, 294, 295. miscarriage of notice of dishonor, sender not chargeable, 295. MAKER, status of person, not otherwise a party, placing signature on paper before delivery, 198-201. signature of, 28. position as indicating character, 28. ambiguous location of name, 29. representative or individual capacity, 29. must indorse instrument drawn payable to his order, 73. instruments payable to order of, are payable to order, 72. consideration passing to one of several joint makers is sufficient, 96. genuineness of signature warranted by general indorsement, 203-207. capacity warranted by general indorsement, 203-207. presumed to reside in state where note was executed, 263. liability of, 189. joint and several liability of several makers. 111. for accommodation not liable to original payee, 103, 104. MARGINAL FIGURES, control amount to be inserted in blank, 27. MARGINAL STIPULATIONS, for discounts if note be paid before maturity, destroys negotiability, 56. MARK, as signature, 29. MARRIED WOMEN, acceptor of bill drawn by, estopped to deny com- petency, 193. MATURITY, time of, 254. provision that default in payment of instalment shall mature whole debt, instrument negotiable, 57. instruments issued, accepted or indorsed when overdue are payable on demand, 66. presentment for acceptance necessary to fix, 117, 118. time of presentment for acceptance, 120-123. INDEX. 451 References are to Pag^es. MATURITY (continued)— presentment for acceptance must be made before, 122. acceptance of overdue bill, 146. of bill payable after sight and accepted for honor, 156. holder in due course must take before, 214. when paper overdue, 214. protest before, where acceptor is insolvent, 274. instruments not payable on demand must be presented for payment at, 254. MEMORANDA, made before delivery are part of contract, 112. MERCHANDISE, instruments payable in, not negotiable, 64. option of holder to require payment in does not destroy negotia- bility, 90. consideration for acceptance, 139. MEXICAN MONEY, instruments payable in are negotiable, 63. MISTAKE, in date, 21, 22. burden of proof, 21. must be pleaded, 22. in name of payee, parol evidence, 83. omitted indorsement, when made relates back to time of transfer, 163. not a defense against bona fide holder, 232-235. of postal clerk, excuse for delay in presentment for payment, 259. in notice of dishonor, recitals as to time of payment and amount pay- able, 292, 293. cancellation by, inoperative, 323. MONEY, negotiable instrument must be payable in, 62-64. instruments may be payable in particular kind of current money, 63. instruments payable in foreign money, negotiability, 63. promise in addition to payment of money destroys negotiability, 91. acceptor agrees to pay in, 131. parol evidence of intent to pay in, 63. what constitutes payment, 326. MORTGAGE, note conditioned on payment of mortgage, not negotiable, 48, 49. and note, ofte instrument, 113. not attached to note is not an "allonge," 166. MUNICIPAL BONDS, how made non-negotiable, 53. MUNICIPAL WARRANTS AND ORDERS, not negotiable, 53. MUTUAL PROMISES, consideration for each other, 96. 452 INDEX. References are to Pages. N. NAME, must appear on instrument or no liability attaches, 188, 189. form of signature, 29. signature in trade or assumed name, 29, 30. of payee must be certain, 81. parol evidence of mistake, 83. of drawee, 83. sufficient acceptance, 134. of referee in case of need may be inserted in bill, 128. holder may insert his name in blank for payee, 25. holder may sue in his own name, 160. of maker or drawer must be properly given in notice of dishonor, 293. NEGLIGENCE, as bad faith on part of purchaser, 217. creating estoppel to deny forged signature, 307-310. permitting alteration, estoppel, 311, 313. NEGOTIABILITY, essentials of, 39-91. substantial compliance sufficient, 41. assignability distinguished, 158. necessity of written instrument, 40. date not essential, 41. failure to specify value, 44. nature of consideration stated, 44. the promise or order to pay, 45. surplusage does not affect, 59-61. sealed instruments are negotiable, 42. not affected by particular statement of consideration, 44, 51. statement of transaction, 52. signature essential, 40. necessity of words of negotiation, 71. instruments payable to named payee "only," not negotiable, 72. instruments payable to named payees "or their collector," not ne- gotiable, 72. words of negotiation may be supplied by indorsement, 12. what instruments payable to order, 72-76. order of payee, not maker or drawer, IZ. order of maker or drawer, Ti. order of drawee, 74. two or more payees, jointly, 74. instrument payable to "steamboat J and owners," negotiable, 74. instrument payable to named payee "et al.," not negotiable, 74. INDEX. 453 References are to Pages. NEGOTIABILITY (continued)— instruments payable to order of one or some of several payees, ne- gotiable, 75. payable to holder of office, 75. what instruments payable to bearer, 76-83. expressly so payable, 76. fictitious persons, 77-80. payee not a "person," 80. paper indorsed in blank, 81. certainty as to parties, 81-84. payee must be named with certainty, 81. payee's name blank, 82. drawee must be named with certainty, 83. bill addressed to two or more drawees in alternative or in succession not negotiable, 84. certainty as to sum payable, 54-62. interest provision, 55. instrument providing for interest "the same as savings banks pay" is not negotiable, 56. instrument payable on or before two years without interest if paid in one year, not negotiable, 56. instruments payable in instalments are negotiable, 56. instrument payable "at such times and in such articles as the payee may need for her support," not negotiable, 56. instrument payable to corporation in such instalments as directors may requiie, negotiable, 56. instruments payable in instalments are negotiable, provision that default shall mature whole debt, 57. instrument subject to discount, if paid before maturity, not negoti- able, 56. provision for exchange does not destroy, 58. instruments providing for payment of costs of collection, 59. instruments providing for payment of attorneys' fees, negotiable, 59. instruments providing for payment of taxes and charges render amount payable uncertain, 62. certainty as to time of payment, 64-67. instruments not stating time of payment, 66. instruments payable at fixed time after date or sight are certain as to time, 67. provision for extension of time, 68. instruments payable "on or before," are negotiable, 69. instruments payable on demand, at sight or on presentation, 65. overdue paper, 66. 4:54 INDEX. References are to Pages, NEGOTIABILITY (continued)— instruments payable on or at a fixed period after event certain, 69. instruments payable on contingency, 70. certainty as to time of payment, instrument payable at fixed time "or when he completes" building, negotiable, 70, 71. certainty as to time of payment, instrument payable at fixed time is negotiable, 70, 71. certainty as to place of payment, 84-86. rule place not stated, 85. promise or order must be to pay money, 62. payable in services or merchandise, not negotiable, 64. instruments promising to do something in addition to payment of money, not negotiable, 91. instruments giving holder option to require something in lieu of money, are negotiable, 90. continues until restrictive indorsement or discharge, 186. absence of negotiable words does not make indorsement restrictive, 173. unconditional nature of promise or order, 48-54. instruments payable on their return or on return of other instru- ments, 49. of note for stock with provision for return of stock on payment, 49. instrument payable on payment of certain mortgage, 49. provision for sale of collateral does not destroy, 86-88 alternative contract for sale of collateral destroys, 87. conditional sale notes, not negotiable, 88. instruments waiving statutory rights, 89. judgment notes, negotiable, 88-89. reference to particular fund for reimbursement does not destroy ne- gotiability, 50. instruments payable out of particular fund, 52. instrument payable out of "the growing substance" of the drawer, not negotiable, 53. instruments payable out of "money in his hands, belonging to me," not negotiable, 53. instruments payable out of proceeds of sale of goods, not negotiable, 53. of order charging payment to account under a certain contract, 53. of note payable on a certain day "or before if made out of the sale" of specified property, 53. of bank pass books, 48. of receivers' certificates, 47. of bills of lading, 46. INDEX. 455 References are to Pages. NEGOTIABILITY (continued)— of certificates of deposit, 47. of warehouse receipts, 46, 64. of -instruments given as collateral, 86. instruments waiving statutory rights, 89. city warrants or orders, 53. village warrants or orders, S3. county warrants or orders, 53. municipal warrants and orders, 53. school district orders, 53. NEGOTIABLE INSTRUMENTS, only included, 3. NEGOTIABLE INSTRUMENTS LAWS, title of, 3. as codification, 1. no retroactive eflfect, 4. application to renewal notes, 5. when take effect, 5. ' repeal of prior statutes, 8. cover negotiable instruments only, 3. NEGOTIATION, 158-187. what constitutes, 161. of bills drawn in sets, 184. by prior party, 186. holder must negotiate or present for acceptance within reasonable time, 120. prevented by restrictive indorsement, 186. by delivery or qualified indorsement, implied warranties, 201. prevented by restrictive indorsement, 186. of demand paper, purchase before maturity, 215. when title of person negotiating is defective, 223. presentment of bill for payment within reasonable time after last negotiation, 255. defenses available against holder in due course, 232. NEW YORK FUNDS, instrument payable in such funds "or their equivalent," not negotiable, 63. NONEXISTENT PERSONS, instruments payable to order of are pay- able to bearer, 77. NON-NEGOTIABLE INSTRUMENTS, not covered by negotiable in- struments laws, 3. consideration must be proved, 92-94. presentment for payment not necessary, 245. NONRESIDENCE, excusing presentment for payment, 264. 456 INDEX. References are to Pages. NOTARY PUBLIC, may make presentment for acceptance on behalf of holder, 124. presentment for payment need not be made by notary, 246. may give notice of dishonor, 285, 286. may make protest, 272, 273. NOTE, definition, 16. NOTES. See Promissory Notes. NOTICE, efifect of statute after passage but before it takes effect, 6, to debtor, of assignment of debt, 159. of acceptance, 132. of nonpayment, inures to benefit of subsequent holders of dishonored paper, 67. to drawee not to pay, waiver of presentment for acceptance, 122. absence as essential of holding in due course, 214-217, 222-227. to purchasers, what constitutes, 214-217, 222-227. irregularities on face of paper as actual notice to purchaser, 212-214. holder in due course must take without notice of previous dishonor, 214. acquired after transfer does not afifect bona fides, 222. of limited authority of agent from signature by procuration, 34. to purchaser from recital that bill is "second of exchange, first un- paid," 14. purchaser not a holder in due course, 214. of protest, service in New York City in case of epidemic. See 12;^ 124. NOTICE OF DISHONOR, form and requisites, 291, 292. may be personal or by mail, 293-295, by whom given, 285-287. by agent, 286. to whom given, 288-291. when inures to benefit of subsequent holders, 304. to bankrupt or insolvent, 291. parties dead, 289. partners, 290. joint parties not partners, 290. when notice need not be given to drawer, 282. when notice need not be given to indorser, 284. time within which notice must be given, 296-298i. premature notice, 296. excuse for delay, 305. dispensing with notice, 302. waiver of, 303. INDEX. 457 References are to Pages. NOTICE OF DISHONOR (continued)— effect of omission to give, 306. place where notice must be sent, 299. what constitutes deposit in post office, 295. actual receipt sufficient, 300. suflficienc> of terms, 292. NOTING, protest, 273. NUMBER, of parts of bill draiwn in set, 14. of drawees, 12. o. OFFICER, instruments payable to order of, negotiable, 75. OPTION, to declare whole debt due on failure to pay instalment does not destroy negotiability, 57. to declare instrument payable before stated time, effect on negotia- bility, 70. of payer to reimburse himself out of particular fund, effect on ne- gotiability, 50. of holder to require something in lieu of money, 90. of maker to pay in money or goods, destroys negotiability, 64. • of holder to treat bill as promissory note, 110. to present demand instrument before noon on Saturday, 252. of holder to resort to referee in case of need, 128, 267. ON OR BEFORE, instruments so payable are certain as to time and negotiable, 64. instrument payable on or before two years without interest if paid in one year, not negotiable, 56. ORAL ACCEPTANCE, insufficient, 132. oral promise to accept, not binding, 150. ORAL NOTICE, of dishonor, 291, 292. ORDER, definition of bill of exchange, 11. instrument payable at bank is an order on bank to pay for account of debtor, 325. sufficiency of order in bill, 45. unconditional, 48-54. on savings bank, to be accompanied by pass book, not negotiable, 48. instrument must be payable to order or to bearer, 71. what instruments payable to, 72-76. instruments payable to order of maker or drawer, 73. 458 INDEX. References are to Pages. ORDER (continued)— instruments payable to order of drawee, 74. instruments payable to order of two or more payees jointly are pay- able to order, 74. instruments payable to one or some of several payees, 75. instruments payable to order of holder of office, negotiable, 75. instruments payable to order of fictitious or nonexistent persons are payable to bearer, 77-80. instrument payable to order of person who should thereafter indorse it is sufficiently certain as to payee, 82. must be for payment of money, 62. acceptance necessary to charge drawee, 130, 131. instruments payable to, negotiable by indorsement, 162. third person signing in blank before delivery, paper payable to order of third person, is liable to payee and all subsequent parties, 198. purchaser of paper payable to, without indorsement of payee, is not holder in due course, 213. changing word "order" to "bearer" is material alteration, 314-316. municipal orders not negotiable, 53. school district orders not negotiable, S3. certificates of deposit, 47. P. PAROL, evidence. See Evidence. to show accommodation character, 102. waiver of presentment for payment, 264, 265. waiver of notice of dishonor, 303. PARTIAL FAILURE, of consideration, 100. PARTICULAR FUND, reference to, for reimbursement, does not des- troy negotiability, 50. instrument payable out of, not negotiable, 52. municipal warrants and orders payable out of, not negotiable, 53. bill or order on, operates as assignment, 123. PARTIES, certainty, 81-83. designation of payee, 81. designation of draw^ee, 83. joint and several liability, 111. joint payees or indorsees who indorse deemed to indorse jointly and severally 209. to action against savings bank on draft, substitution of claimant of fund as defendant, 115. INDEX. 450 References are to Pages. PARTIES— Cont'd. change in number or relation, material alteration, 314-316. PARTNERSHIP, presentment to one partner for acceptance, sufficient, 125. one partner may indorse for firm, 179. presentment to partner for payment, 248. notice to one partner is notice to firm, 227. notice of dishonor, 290. , partner may waive protest, 276. PASSAGE, negotiable instruments laws not applicable to instruments made before their passage, 4. "prior to its passage" in a statute construed to mean "prior to its taking eflfect," 4, 5. PATENTS, patent right note must state consideration, 44. PAYEE, instrument in possession of, before passage of negotiable in- struments law, presumed to have been delivered before that time, 5. must be named or indicated with reasonable certainty, 81. instrument payable to named payers "et al," is not sufficiently cer- tain as to payees, 82. place for payee's name blank, certainty in designation, 82. instruments payable to "one or some" of several payees negotiable, 12, 75. instruments payable to two or more payees jointly, negotiable, 74. instruments payable to "one or same" of several payees negotiable, 12, 75. instruments payable to order of negotiable, 72). filling in name, 25. instrument payable to order of person who shall thereafter indorse it is sufficiently certain as to the payee, 82. fictitious, instruments payable to order of are payable to bearer, 77-80. existence admitted by acceptance, 192. of check, existence admitted by certification, 194. existence admitted by maker or drawer, 189, 190. joint payees must all indorse, 189, 190. joint payees deemed to indorse jointly and severally, 209. of paper payable to order, indorsement necessary to holding in due course, 213. failure to present check, liability for loss, 256, 257. illness excusing delay in presentment for acceptance, 121, cannot recover against accommodation maker, 103, 104. may recover of third person signing in blank before delivery, 198-201. 460 INDEX. References are to Pages. PAYEE (continued)— repurchasing paper is not bona fide holder, 241. substitution of another as payee, material alteration, 314-316. payment to, after transfer, does not discharge instrument, 323. PAYMENT, 319-340. what constitutes, 326. purchase or, 323. time of, certainty in instrument, 64-71. time not stated, instruments payable on demand, 66. overdue paper, 66. bill payable five days after sight is payable five days after accept- ance, 67. provision for extension of time of payment, 68. instruments payable "on or before" are certain as to time, 68. instruments payable on or at fixed period after event certain are negotiable, 69, 70. paper payable "on or by" certain date is payable on that date, 69. instruments payable on a contingency, 70. holder may fill blank, 25. certainty, 64-71. place of, holder may fill blank, 25. is place for presentment for acceptance, 123. to indorsee under restrictive indorsement, 174. to indorsee under conditional indorsement, 177. implied warranty of nonpayment on sale of instrument, 163. acceptor agrees to pay at maturity in money, 191. agreement of acceptor for honor, 153-156. agreement of general indorser, 203. taking in payment of antecedent debt is a taking for value, 218, 219. unindorsed payments no defense against bona fide holder, 233. presentment for, 242-267. change in medium of, is material alteration, 314-316. alteration of time or place of, is material, 314-316. for honor, 329-332. stopped by drawer, presentment for payment excused, 264i. notice of dishonor excused, 283. excuse for failure to protest, 261, 277, 278. dishonor for nonpayment, 266. protest for nonpayment, 268-279. of bill drawn in a set, 328. by or to bank when instrument payable there, 325. of draft by referee in case of need, 267. by principal debtor or party accommodated, 321. INDEX. 461 References are to Pa^es. PAYMENT (continued)— by person secondarily liable does not discharge instrument, 338. prior party to whom instrument is negotiated back cannot enforce payment against persons to whom he was liable, 186, 187. striking out indorsements and reissuing paper, 185-186. part payment not a consideration for an extension of time, 334, 335. indorsement as to residue, 167. PENALTY, provision for additional interest after maturity, 56. void provisions for attorneys' fees do not destroy negotiability, 6U, 61. PEXCIL, instrument written in, valid and negotiable, 18. indorsement in, 168. alteration of instrument in, 314. PERSON, definition, 16. fictitious or nonexistent payee, paper is payable to bearer, 77-80. instruments where payee is not a person, payable to bearer, 80. PERSONAL LIABILITY, of acceptor in representative capacity, 193, 194. under indorsement in representative capacity, 180, 181. PERSONAL REPRESENTATIVE, of deceased drawee, may recerve presentment for acceptance, 126. of person primarily liable, presentment for payment to, 247. service of notice of dishonor on, 289. PERSON PRIMARILY LIABLE. See Primary Liability. PERSON SECONDARILY LIABLE. See Secondary Liability. PLACE, where drawn need not be stated, 19. of presentment for acceptance, 123. of presentment in case of epidemic in New York City, 123, 124. acceptance to pay at particular place is general, 145. of indorsement, 184. of presentment for payment, 261-263. branch office, 262. place of business, 262. of payment, holder may fill blank, 25. certainty, 64. not specified, place of presentment, 262. alteration is material, 314-316. where notice of dishonor must be sent, 299. of making protest, 275. PLEADING, mistake in date must be pleaded, 22. 462 INDEX. References are to Pagea PLEDGE, provision for sale of collateral does not destroy negotiability, 86. alternative provision for sale of collateral destroys negotiability, 87. POSITION, of signature of maker or drawer, 28, 29. POSSESSION, by payee prima facie evidence of delivery, 5, 37, 38. confers prima facie authority to fill blanks, 24. to indorse, 180. to present for payment, 246, 247. to receive payment, 321-323. POSTDATING, 23. POST OFFICE, delay in mails excusing w^ant of timely presentment for acceptance, 121. service of notice of protest in New York City, in case of epidemic, 123, 124. deposit of notice of dishonor in, what constitutes, 294, 295. POUNDS STERLING, instrument payable in, is payable in money, 63. POWER OF ATTORNEY, to confess judgment does not destroy nego- tiability, 88. PRE-EXISTING DEBT, sufficient consideration for negotiable instru- ment, 96. consideration for acceptance, 139. consideration for indorsement or transfer, 161. PREFERENCE, of parties offering to pay for honor, 331. PREMATURE ACTION, begun on last day of grace, 253. PREMIUM NOTES, negotiability, 44. PRESENTATION, instruments payable on, are payable on demand, 65. PRESENTMENT, for acceptance, 117-129. necessary in case of bills drawn "after sight" or "at sight," 117. not necessary in case of demand paper, 117. bills in sets, 126. holder must present or negotiate within reasonable time, 120. by whom made, 124. to whom made, 125. bill addressed to two or more drawees not partners, 125. time of, 120-123. rule where time is insufficient, 123. place of, 123. dishonor by nonacceptance, 127. gives date to subsequent acceptance, 141. necessary recital in notice of dishonor, 293. INDEX. 463 References are to Pagea. PRESENTMENT (continued)— or payment, construction, 122. when excused, 119. waiver, 122. for payment, 243-267. when necessary, 243. by whom made, 246. to whom made, 247. to acceptor for honor, 260. instruments not payable on demand, 254-256. at office of trust company not a presentment at a bank, 262. branch office, 262. at bank after business hours, 251. instrument must be exhibited, 263. when dispensed with, 264, 265. waiver, 265, 266. or for acceptance, construction, 122. necessary recital in notice of dishonor, 292. necessary showing in formal protest, 270-272. PRESUMPTIONS. See Evidence. PRIMARY LIABILITY, of acceptor, 191-195. presentment for payment to person primarily liable, 247. presentment for payment not necessary to charge person primarily liable, 243. discharge of instrument where principal debtor becomes holder, 324. payment to acceptor as person primarily liable discharges instru- ment, 321. PRINCIPAL AND AGENCY. See Agency. PRINCIPAL AND SURETY, relation of drawer and accommoda- tion acceptor, 192. PRINT, included in "written," 16, 18. PRINTING, printed forms of negotiable instruments sufficient, 18. written words control, 109. signature in, to notice of dishonor, is good, 292. PROCURATION, signature by, notice of limited authority of agent, 34. PROMISE, contained in negotiable instrument, 45. the promise of the drawer or maker, 189, 190. implied promise to pay, 46. "good to R. C, or order, for thirty dollars," is a sufficient promise, 46. "due A on corn, $525" is a sufficient promise to pay, 46. 464 INDEX. References are to Pages. PROMISE (continued)— to be "accountable," equivalent to promise to pay, 46. "I owe the estate of W" is not a sufficient promise to pay, 46. in certificate of deposit makes it negotiable, 47. must be unconditional and unrestricted, 48-54. must be to pay money, 62. to accept, equivalent to acceptance, 150-152. to accept, made before bill w^as drawn excuses presentment for ac- ceptance, 120. PROMISSORY NOTES, definition of, 10. brought within law merchant by statute of 3 and 4 Anne, 7. corporate notes negotiable, 42. certificate of deposit construed as note, 47. promise to pay provided a railroad be built by certain time, not negotiable, 49. provision for surrender of note on payment, negotiability, 49. given as collateral, negotiability, 86-88. instrument with conditional provision for payment in instalments, not negotiable, 86-88. judgment notes, negotiable, 88. one note consideration for another, 96. when bill may be treated as, 110. three days of grace on, in North Carolina, 253. as payment, 327. PROOF. See Evidence. PROPERTY, instruments payable in property other than money, not negotiable, 64. PROTEST, form and contents, 270-272. time of making, 273. place of making, 275. after dishonor for nonacceptance, 128. for nonacceptance and for nonpayment, 268-269. waiver in instrument does not destroy negotiability, 90. service of notice in New York City in case of epidemic, 123, 124. acceptance supra protest, 153-156. of bill accepted for honor, 274. of bill dishonored by acceptor for honor, 270. damages, 278, 279. of lost or detained bill, 275. waiver of, 276, 277. payment supra protest for honor, 329-332. PUBLIC OFFICER, instruments payable to order of, negotiable, 75, 1^. INDEX. 465 Beferences are to Pagea. Q. QUALIFIED ACCEPTANCE, 143. QUALIFIED INDORSEMENT, 175. warranties by, 201. R. RAILROAD RECEIPTS, not negotiable, 47. RATIFICATION, of unauthorized signature of agent, 30. of forged or unauthorized signature, 307-310. of unauthorized indorsement, 180. of alterations, burden of proof, 318. REAL PARTY IN INTEREST, indorsee for collection is, 175. REASONABLE DILIGENCE, in giving notice of dishonor, 302. REASONABLE TIME, for presentment for acceptance, 120. for acceptance after presentment, 140. for negotiation of demand paper, 215. presentment for payment, 249. REBUTTAL, of presumptions as to date, 21, 22. Qif presumption of consideration, 92-94. of presumption of consideration for acceptance, 139. of presumption of delivery from possession by payee, 37, 38. RECEIPT, certificate of deposit not containing a promise to pay is a receipt, not negotiable, 47. negotiable though providing for payment on their return, 49. negotiability of railroad receipts, 46. of warehouse receipts, 46. RECEIVERS' CERTIFICATES, not negotiable, 47. REFEREE IN CASE OF NEED, insertion of name in bill, 128. on payment of bill has special property in goods for which it was drawn, 128, 129. REGISTRATION, how unregistered municipal bond made non-nego- tiable, 42, 43. REIMBURSEMENT, reference to particular fund for, does not destroy negotiability, 50. of payer for honor, 332. REISSUANCE, by prior party, 186. after payment by person secondarily liable, 339. Opp. — Sel. — 30 i66 INDEX. References are to Pages. RELEASE, of principal debtor, releases person secondarily liable, 334. REMEDY AT LAW, precluding relief in equity for want of considera- tion, lOL RENEWAL NOTES, application of law to, 5. RENT, note showing consideration, negotiable, 52. RENUNCIATION, discharge by, 336. REPEAL, of statute of 3 and 4 Anne, c. 9, § 1, by Bills of Exchange Act 1882, 7, 8. of prior statutes by negotiable instruments laws, 8. statutes requiring consideration to be stated, not repealed by nego- tiable instruments laws, 44. of Virginia statute requiring instrument to be payable at bank, 85. REPRESENTATIVE CAPACITY, indorsement in, 180. signature in, 31-34. RESCISSION, by accommodation party before paper is discounted, 104. RESIDENCE, instrument not stating place of payment, payable at resi- dence of person to make payment, 85, 86. time for sending notice of dishonor when parties reside in same city, 296, 297. time of giving notice of dishonor where parties live in different cities, 297, 298. place to send notice of dishonor, 299. resident of place of dishonor may make protest, 272, 273. RESTRICTIVE INDORSEMENT, 172. unqualified indorsement by indorsee under, is general indorsement, 204. RETROACTIVE EFFECT, negatived in negotiable instruments laws, 4. renewal notes, 5. RETURN, instruments payable on their return or return of other instru- ments, negotiability, 49. REVOCATION, of negotiable instrument before delivery, 35. by accommodation party before paper is discounted, 104. of acceptance before delivery, 131. promise to accept order if it is not revoked is conditional, 152. s. SALE, ngeotiability of notes for price at judicial sale, 75, 76. of goods, instruments payable out of proceeds not negotiable, 53. INDEX. 467 References are to Pages. SALE (continued) — of collateral, provision for does not destroy negotiability, 86. conditional sale notes, not negotiable, 88. SATURDAY, presentment for acceptance on, 122. day of maturity, presentment for payment, 252. SAVINGS BANKS, pass books not negotiable, 48. sued on draft claimed by third person cannot deposit funds in court pending suit, 115. SCHOOL DISTRICT, orders not negotiable, 53. SCOPE OF ACT, negotiable instruments only, 3. SCRIP, county, not negotiable, 53. SEAL, does not destroy negotiability, 42. SECOND OF EXCHANGE, bill drawn in a set, 14. SECONDARY LIABILITY, liability after dishonor of persons sec- ondarily liable, 267. payment by person secondarily liable does not discharge instrument 338. discharge of persons secondarily liable, 332. SECURITIES, provision for sale of collateral does not destroy nego- tiability, 86. release of, releases person secondarily liable, 335. SERVICES, instruments payable in, not negotiable, 64. consideration for negotiable instrument, 94. for acceptance, 139. SET-OFF, holder of negotiable instrument may interpose, 160. no defense against bona fide holder, 233. SETS, bills of exchange drawn in sets, 14. presentment for acceptance, of bill drawn in a set, 126. acceptance of bill drawn in, 147. payment of bill drawn in, 328. SEVERAL INSTRUMENTS, construed together, 112. SEVERAL LIABILITY, of joint payees or indorsees who indorse, 207, SHERIFF, instruments payable to, negotiability, 75, 76. SHORT TITLE, of negotiable instruments laws, 3. SIGHT, instruments payable at sight are payable on demand, 65, 67. instruments payable at fixed period after sight are certain as to time, 67. SIGHT DRAFTS, three days of grace allowed in Massachusetts, North 468 INDEX. References are to Pages. SIGHT DRAFTS (continued)— Carolina and Rhode Island, 253. SIGNATURE, of maker or drawer is necessary, 28. position of, 28. form of, 29. to instrument in blank, 25. by agent, 30, 31. liability of agent, 31. admitted by acceptance, 192. cannot be questioned by bank certifying check, 194. of drawee to acceptance, 132. of acceptor for honor, 154. of indorser sufficient indorsement, 168. ratification of unauthorized signature, 30. of maker, general indorser warrants genuineness, 205. to notice of dishonor not necessary, 292. forged or unauthorized, 307-310. by "procuration," 34. SILENCE, not a ratification of forged signature, 309. SILVER, instruments payable in are negotiable, 63. SPECIAL INDORSEMENT, indorsee must indorse, 169, 170. SPECIALTY, sealed instrument is negotiable, 42, 43. SPECIE, note payable in, negotiable, 64. SPECULATION, notes for speculative consideration must so state, 45. SPELLING, of name of payee, parol evidence of mistake, 83. STATEMENT, of consideration in instrument, 44. of transaction, 51. STATES, are foreign to each other in construing bill as inland or foreign, 13. STATUTE OF FRAUDS. See Frauds, Statute of. STATUTES, when take effect, 5, 6. 3 and 4 Anne, extending law merchant to notes, 7, 8. English, affecting law merchant are part of common law, 8. repealed by negotiable instruments laws are not part of the law merchant, 8, 9. STAY LAWS, negotiability not destroyed by provision for waiver of benefits, 89. STIPULATION, negativing liability of drawer, 191. INDEX. 469 i.eferences are to Pages. STOCK, instruments payable in, not negotiable, 63. instruments payable in money or stock, not negotiable, 64. option of holder to require payment in, does not destroy negotia- bility, 90. note for, effect on negotiability, of provision for surrender of stock on payment, 49. STOLEN PAPER, 35. bona fide purchasers, 222. STRIKING, indorsements, 185. SUBSTANTIAL COMPLIANCE, with provisions of negotiable instru- ments laws, 4L SUCCESSION, bill cannot be addressed to two or more drawees in succession, 12. SUCCESSIVE INDORSERS, 207. SUCCESSORS, instrument payable to trustees "or their successors, or order" is negotiable, 75. SUM PAYABLE. See Amount Payable. SUNDAY, day of maturity, presentment for payment on next business day, 252. SUPRA PROTEST, acceptance, 153-156. SURETIES, status of consecutive indorsers under mutual agreement, 207. SURRENDER, of instrument, on payment, 329. SURVIVING PARTNER, notice to, sufficient, 290. T. TAXES, provision for payment of, renders amount payable uncertain, 62. TELEGRAPH, acceptance by, 135. certification of check by, 149. TEMPORARY RESIDENCE, notice of dishonor may be sent to, 30L TENDER, willingness and ability to pay, when equivalent to, 244. by prior-party discharges person secondarily liable, 333, 334. THEFT, bona fide purchasers of stolen paper, 222. THIRD OF EXCHANGE, bill drawn in a set, 14. TIME, when negotiable instrument laws take effect, 5, 6. uncertainty in judgment note destroys negotiability, 88. -170 INDEX. References are to Pages. TIME (continued) — what instruments payable at fixed or determinable future time, 67. check payable at future time is bill of exchange, 14, IS. of maturity, 252-254. maturity fixed by presentment for acceptance, 117, 118. for giving notice of dishonor, 296-299. from which interest runs, 108. reasonable, for negotiation of demand paper, 215. computation of, 254. for presentment for acceptance, 120, 123. reasonable time for acceptance after presentment, 98. of acceptance, qualified, 143. of presentment for payment, 249-254. to accept for honor, 260. of indorsement, 183. of protest, 273. of payment, certainty, 64. uncertainty created by alternative provision for sale of collat- erals, 85-88. instruments payable on contigency, not negotiable, 70. instruments payable on and at fixed period after event certain, 69, 70. paper payable "on or before" or "on or by," a certain date is payable on that date, 69. bill payable five days after sight is payable five days after ac- ceptance, 68. holder may fill blank for time of payment, 25. parol evidence, 66. not stated, instruments payable on demand, 66. what instruments payable on demand, 65-67. recital in notice of dishonor, 291-292. alteration is material, 315. TITLE, of negotiable instrument laws, 3. to antedated or postdated instrument dates from delivery, 23. reservation in note for price of goods destroys negotiability, 88. by delivery, 163. passes by delivery under indorsement in blank, 162. under transfer of negotiable instrument, 158-161. does not pass under indorsement of part of sum payable, 167. under restrictive indorsement, 174. under indorsement from one joint indorsee to another, 179. to bill in a set, as between holders of separate parts, 184. INDEX. 471 References are to Pages. TITLE (continued) — under transfer without indorsement, of instrument payable to order, 162. warranty of, by general indorsement, 203. under transfer by delivery or qualified indorsement, 201. passes by indorsement or assignment of corporation or infant, 178. t)ona fide holder must take without notice of defects, 222. of person negotiating, when defective, 223. under assignment of non-negotiable instrument, 159, 160. TOWN ORDERS, not negotiable, 53. TRADE NAME, as signature, 29. TRANSACTION, statement of in note, 51. TRANSFER, 158-187. to two or more indorsers severally, not a negotiation, 167. of warehouse receipts without indorsement, 47. TRANSFEREE, may sue in his own name, 160. TRUST, indorsement creating is restrictive, 172-174. TRUSTEES, personal liability on note, 32-34. instrument payable to order of, negotiability, 75. for insolvent of bankrupt drawee may receive presentment for ac- ceptance, 126. u. UNCONDITIONAL PROMISE, in negotiable instrument, 48. UNDISCLOSED AGENCY, to fill blanks in instrument signed and de- livered in blank, rights of bona fide holders, 235-238. liability of agent negotiating without indorsement, 209. UNIFORMITY, purpose of negotiable instrument laws, 1, 2. USAGE, affecting time of presentment for acceptance, 121. USE, construed to mean interest, 109. USURY, purchaser of paper disclosing, not holder in due course, 213. rule that bona fide holder may recover full amount does not cure void usurious transactions, 239. provision for, does not destroy negotiability, 55. V. VALUE. See Consideration, definition, 16. 472 INDEX. References are to Pages. VALUE RECEIVED, consideration presumed, 92. not necessary to negotiability, 44. VARIANCE, between pleading and proof as to time of indorsement, 183. VILLAGE ORDERS, not negotiable, 53. VOUCHERS, municipal, not negotiable, S3. w. WAIVER, of benefits of law for protection of obligor does not destroy negotiability, 89. of notice, provision for does not destroy negotiability, 89. of legal rights, consideration for negotiable instruments, 95. of right to set up want or failure of consideration, lOL of condition in acceptance, 144. of demand and notice, holder cannot insert, 171. of presentment for payment, 264-266. of right to exhibition of instrument on presentment for payment, 264. of presentment, waiver of protest deemed to be, 266. of notice of dishonor, 303, 304. of protest, 276, 277. by drawer of right to discharge, 191. WANT OF CONSIDERATION, 99. may be shown in action on non-negotiable instrument, 99. evidence rebutting presumption of consideration, 92-94. acceptor cannot set up, as against payee, 140. accommodation paper, 101. WAR, excuse for delay in presentment for payment, 259. excusing notice of dishonor, 302. excusing failure to protest, 277, 278. WAREHOUSE RECEIPTS, negotiability, 46, 64. WARRANT, to confess judgment does not destroy negotiability, 88. municipal warrants not negotiable, 53. WARRANTIES, by general indorsement, 203. implied, under indorsement without recourse, 177. under negotiation by delivery or qualified indorsement, 201. WITHDRAWAL, of funds by drawer, excuse for nonpresentment for payment, 264. excuse for failure to protest, 278. INDEX. 473 RefeKDces are to Pages. WITHOUT RECOURSE, stipulation negativing drawer's liability, 191. indorsement, 175-177. holder may fill blank indorsement with his own name, 171. WITNESS, to protest not made by notary, 273. WORDS OF NEGOTIATION, necessity of words "order" or "bearer,' 71. WRITING, negotiable instrument must be in, 18. includes print, 16, 18. controls print in case of discrepancy, 109. acceptance must be in, 132. certification of check must be in, 149. acceptance for honor must be in, 154. indorsement must be in, 165. authority to indorse may be in writing or by parol, 180. notice of dishonor may be oral, 292 waiver of protest should be in, 277. renunciation must be in, 323. WRITTEN, includes print, 16, 18. UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 888 11 3 ■WP u':H!^HH!;ill|mi»UHiHntJ?HPiimmff!fm1^