1H3G3EEE??*, I L A W 119 FULTON ST i> QJnrndl IGaui ^rijnnl Hibrary Cornell University Library KF 956.A43C89 1916 The Negotiable instruments la w, from the 3 1924 018 859 037 The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018859037 THE NEGOTIABLE INSTRUMENTS LAW From thb Draft prepared for the Commissioners on Uniformiti of Laws, and Enacted in Alabama, Alaska, Arizona, Arkansas Colorado, Connecticut, Delaware, District of Colombia Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Ne- braska, New Hampshire, Nevada, New Jer- sey, New Mexico, New York, North Carolina, North Dakota, Ohio, Okla- homa, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia. Washington, West Virginia, Wisconsin and Wyoming, THE FULL TEXT OF THE LAW AS ENACTED, WITH COPIOUS ANNOTATIONS. BY JOHN J.^AWFORD, Or the New York bar, BY WHOM THE STATUTE WAS DRAWN. FOURTH EDITION. NEW YORK: BAKER. VOORHIS AND COMPANY. 1918. $3^8631 COPTBIQHT, 1897, By JOHN J. CRAWFORD. COPTBIQHT, 1902, By JOHN J. CRAWFORD. Copyright, 1908, Bt JOHN J. CRAWFORD. Copyright, 1916, By JOHN J. CRAWFORD. PREFACE TO FOURTH EDITION. Since the third edition of this book was published in 1908 the Negotiable Instruments Law has been en- acted in Alaska, Arkansas, Delaware, Indiana, Minne- sota, New Hampshire, Oklahoma, South Carolina, South Dakota and Vermont, so that it is now in force throughout the United States, except in California, Georgia, Maine, Mississippi and Texas. Within the same time there have been a great many decisions un- der the Act, some of which are of great importance. These are cited in the notes appended to the various sections. The draftsman's original notes, as they ap- peared in the draft submitted to the commissioners on Uniform Laws, and which were intended to indicate the authority for the different provisions of the stat- ute, have been retained, and appear, for the most part, under the headings " Rule at Common Law " or ' ' Source of the Section. ' ' The English cases constru- ing the Bills of Exchange Act are not cited, for the rea- son that, so far as they are important, the language which the English courts were called upon to construe, differs materially from that in the Negotiable Instru- ments Law, and any attempt to conform to those deci- sions would tend to defeat, rather than to insure, a uni- form construction of the American statute. That this would be the effect will appear more clearly from the following statement taken from an address de- livered by the late Lyman D. Brewster, who was for a number of years President of the Conference of Com- missioners on Uniform Laws, and who was also a mem- ber of the sub-committee under whose direction the statute was prepared: " The framers of the English [iii] JUL 31 1939 IV PREFACE TO FOURTH EDITION. Act had followed the form of the Continental Codes, especially the French Commercial Code and the Ger- man Bills of Exchange Act; that is to say, they dealt primarily with bills of exchange, and then applied those provisions, so far as they were applicable, to promis- sory notes, adding provisions which were peculiar to the latter class of instruments. The draftsman of the American Act deemed this form unsuitable to American conditions, where the use of bills of exchange is not so extensive as it is in Europe, and where most of the cases relate to other kinds of negotiable instruments; and he adopted a form of his own, which grouped to- gether the provisions applicable to all kinds of negoti- able instruments, and then collected, under separate articles, the provisions specially affecting the different classes. * * * This departure from the Continen- tal form, together with the introduction of many state- ments of the law based entirely upon the American cases, required a considerable divergence from the English Act, and perhaps the resemblance between the English and American statutes is not so great as be- tween the English statute and the German Bills of Ex- change Act." From this it will be obvious that uni- formity can be secured only by a close attention to the language of the Act, and to the decisions thereunder; and that a resort to cases in which another statute was construed would be very much like adopting the prac- tice which formerly obtained in will cases, when the courts were too much disposed to determine the mean- ing of one will by what had been decided with respect to another will. But it is equally obvious that if uni- formity is to be had, the courts of each State must notice the decisions made in other States; and as will be seen by a reference to the cases cited on pages 3, 4 PREFACE TO FOUETH EDITION. V and 5, the necessity for this has been generally recog- nized. In the draft as originally prepared, and as submitted by the commissioners to the legislatures of the States, the act was divided into four titles as follows: 1. Negotiable Instruments in General; 2. Bills of Ex- change; 3. Promissory Notes and Checks, and 4. Gen- eral Provisions; and this arrangement has been pre- served in many of the States. But in other States, as for example in New York, the titles were omitted, and this, of course, necessitated a renumbering of the articles. In some States, where the act has been car- ried into a revision of the statutes, the articles have been dispensed with. The sequence of the sections is the same in all of the States, except that in some States, as in New York, the general provisions have been placed at the beginning, while in most of the States these sections are put at the end. The section numbers vary greatly, but the number of any section as it is in any State, can be readily found by referring to the table of corresponding sections on pagexiii. Under the heading " variant readings " the changes made in the statute in the different States are indicated. These, it will be observed, are not important, except in the States of Illinois and Wisconsin. JOHN J. CRAWFORD. 30 Broad Street, New York, December 1st, 1915. PREFACE TO THIRD EDITION. Since the second edition of this book was published in 1902, the Negotiable Instruments Law has been en- acted in the following States, viz. : Alabama, Arizona, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, Ohio, West Virginia and Wyom- ing. In all but one of these, the language of the Act is the same as that in the New York statute, except in a few minor and unimportant particulars. The Illinois statute, however, contains some provisions materially different. These consist mainly of proposed amend- ments submitted to the Commissioners on Uniformity of Laws at their annual meeting in 1900, but which the Commissioners, by a unanimous vote, after a full re- port from a committee appointed to consider the sub- ject, rejected as undesirable. In the six years that have elapsed since the publication of the second edi- tion, the statute has been applied or construed in more than two hundred cases. All of these are cited in the present edition. The number of the sections vary in the different States, and for convenience of reference a table of corresponding sections has been added. JOHN J. CRAWFORD. 30 Broad Street, New York, June 10, 1908. [vii] PREFACE TO SECOND EDITION. When the first edition of this book was published, the Negotiable Instruments Law had been passed in four States, viz. : New York, Connecticut, Florida and Colorado. In the four years which have elapsed since then it has been enacted in Massachusetts, Ehode Island, Pennsylvania, Maryland, Virginia, North Caro- lina, Tennessee, Wisconsin, North Dakota, Utah, Ore- gon and Washington, and has also been adopted by Congress as the law of the District of Columbia. In most instances the law has. been passed in the form proposed by the Commissioners on Uniformity of Laws; but in several States a few minor changes have been made. These are indicated in the notes to this edition. I have also endeavored to point out the changes made by the law in the different States, and have added to the notes citations to the decisions in all the States where the statute is now in force. It is somewhat notable that so few cases have arisen under the Act. The reported cases number only about a half dozen in all; and in most of these the court was re- quired only to apply the act, and not to construe it. Perhaps nothing could better demonstrate that the practical working of the law has been satisfactory. As in the previous edition, the text is that of the New York Act. For the information of the profession oat- side of New York it may be stated that the hiatus in the section numbers does not indicate the omission of any sections, but is in accordance with the plan adopted in all the " General Laws " of this State. JOHN J. CRAWFORD. 30 Broad Street, New York, February 1, 1902. [ix] PREFACE TO FIRST EDITION. In 1895 the Conference of Commissioners on Uni- formity of Laws, which met that year in Detroit, in- structed the Committee on Commercial Law to have prepared a codification of the law relating to bills and notes. The matter was referred to a sub-committee consisting of Lyman D. Brewster of Connecticut, Henry C. Wilcox of New York and Frank Bergen of New Jersey; and I was employed by the sub-committee to draw the proposed law. When completed, the draft, with my notes, was submitted to the sub-committee, who printed it and sent copies to each member of the conference, and also to many prominent lawyers and law professors, and to several English judges and law- yers, with an invitation for suggestions and criticisms. The draft was submitted to the conference which met at Saratoga in August, 1896; and the Commissioners who were in attendance, being twenty-seen in all, and representing fourteen different States, went over it section by section, and made some amendments therein, most of wbich were such changes in the exist- ing law as I had not felt at liberty to incorporate into the original draft. The draft as thus amended was adopted by the conference; and in such form it has been submitted to the legislatures of many of the States. It has been passed and has become a law in New York, Connecticut, Colorado and Florida. I am informed that the Commissioners on Uniformity of Laws will make special effort to have it adopted in many other States at the next session of their legisla- tures. [xi] jdi PREFACE TO FIRST EDITION. The text of the law as printed in this edition is that of the New York statute. This is precisely the same as that of the draft published by the Commissioners on Uniformity of Laws, and the statute as passed in Connecticut, Colorado and Florida, except that the sec- tion numbers have been changed, and section headings introduced, to conform the statute to the plan adopted by the Commissioners of Statutory Revision in their revision of the General Laws, and three sections, viz., 330, 331 and 332, relating to special matters heretofore embodied in other New York statutes, have been added. In the course of the passage of the bill through the New York Legislature a number of errors were made in the engrossing and were not detected until too late to be corrected. I have indicated these by asterisks and foot-notes. Probably none of them are of such a character as to effect the meaning, since they are so obviously mistakes. In submitting this edition of the statute to the pub- lic, I embrace this my first opportunity to publicly ex- press my appreciation of the unvarying courtesy and consideration shown me by the Commissioners on Uni- formity of Laws, and especially by those composing the sub-committee having the preparation of the biU in charge. JOHN J. CRAWFORD. 30 Broad Street, New York, July 8, 1897. TABLE OF CORRESPONDING SECTIONS.^ Com- ■ mis- m oners' Ala. Ariz. Col. Conn. Fla. Ida. 111. Ind. Kan. Draft 1 4958 3304 5051 4171 2935 3458 1 9089a 5247 2 4959 3305 5052 4172 2936 3459 2 9089b 5248 3 4960 3306 5053 4173 2937 3460 3 9089c 5249 4 4961 3307 5054 4174 /2938\ \2939/ 3461 4 9089d 5250 5 4962 3308 5055 4175 2939 3462 5 9089e 5251 6 4963 3309 5056 4176 2940 3463 6 9089f 5252 7 4964 3310 5057 4177 2941 3464 7 9089g 5253 8 4965 3311 5058 4178 2942 3465 8 9089h 5254 9 4966 3312 5059 4179 2943 3466 9 9089i 5255 10 4967 3313 5060 4180 2944 3467 10 9089j 5256 11 4968 3314 5061 4181 2945 ■ 3468 11 9089k 5257 12 4969 3315 50C2 4182 2946 3469 12 90891 5258 13 4970 3316 5063 4183 2947 3470 13 9089m 5259 14 4971 3317 5064 4184 2948 3471 14 9089n 52C0 15 4972 3318 5065 4185 2949 3472 15 9089o 5261 16 4973 3319 5066 4186 2950 3473 16 9089p 5262 17 4974 3320 5067 4187 2951 3474 17 9089q 5263 18 4975 3321 5068 4188 2952 3475 18 9089r 5264 19 4976 3322 5069 4189 2953 3476 19 9089s 5265 20 4977 3323 5070 4190 2954 3477 20 9089t 5266 21 4978 3324 5071 4191 2955 3478 21 9089u 5267 22 4979 2325 5072 4192 2956 3479 22 9089v 5268 23 4980 2326 5073 4193 2957 3480 23 9089w 5269 24 4981 2327 5074 4194 2958 3481 24 9089x 5270 25 4982 2328 5075 4195 2959 3482 25 90S9y 5271 26 4982 2329 5076 4196 2960 3483 26 9089z 5272 27 4982 2330 5077 4197 2961 3484 27 9089al 5273 28 4983 3331 5078 4198 2962 3485 28 9089b 1 5274 29 4984 3332 5079 4199 2963 3486 29 9089c 1 5275 30 4985 3333 5080 4200 2064 3487 30 9089dl 5276 31 4986 3334 5081 4201 2965 3488 31 9089el 5277 32 4987 3335 5082 4202 2966 3489 32 9089fl 5278 33 4988 3336 5083 4203 2967 3490 33 9089fU 5279 34 4989 3337 5084 4204 2968 3491 34 90S9hl 5280 35 4990 3338 5085 4205 2969 3492 35 9089il 5281 36 4991 3339 50S6 4206 2970 3493 36 9089j 1 5282 37 4992 3340 5087 4207 2971 3494 37 9089kl 5283 38 4993 3341 5088 4208 2972 3495 38 908911 5284 89 4994 3342 5089 4209 2973 3496 39 9089ml 5285 40 4995 3343 5090 4210 2974 3497 40 9089nl 5286 41 4996 3344 5091 4211 2975 3498 41 9089ol 5287 42 4997 3345 5092 4212 2976 3499 42 9089pl 5288 43 4998 3346 5093 4213 2977 3500 43 9089ql 5289 For the numbers in other States, see pages xvii-xx and xxi-xxi». [xiii] XIV TABLE OF CORRESPONDING SECTIONS.* Com- a mis- sioners' Draft Ala. Ariz. Col. Conn . Fla. Ida. 111. Ind. Kan. 44 49S3 3347 5094 4214 2978 3501 44 9089rl 5290 45 5000 3348 4215 2979 3502 45 9089sl 5291 46 5001 3349 5096 4216 2979 3503 46 9089tl 5292 47 5002 3350 5097 4217 2980 3504 47 9089ul 5293 48 5003 3351 5098 4218 2981 3505 48 9089vl 5294 49 5004 3352 5099 4219 2982 3506 49 9089wl 5295 50 5005 3353 51C0 4220 2983 3507 50 9089x1 5296 51 5006 3354 5101 4221 2984 3508 51 9089yl 5297 52 5007 3355 5102 4222 2985 3509 52 9089zl 5298 53 5008 3356 5103 4223 2986 3510 53 90S9a2 5299 54 5009 3357 5104 4224 2987 3511 54 9089b2 5300 65 5010 3358 5105 4225 2988 3512 55 9089e2 5301 56 5011 3359 5106 4226 2989 3513 56 9089d2 5302 57 5012 3360 5107 4227 2990 3514 57 9089e2 5303 58 5013 3361 5108 4228 2991 3515 58 9089f2 5304 69 5014 3362 5109 4229 2992 3516 59 9089g2 5305 60 5015 3363 5110 4230 2993 3517 60 9089h2 5306 61 5016 3364 5111 4231 2994 3518 61 9089i2 5307 62 5017 3365 5112 4232 2995 3519 62 9089J2 5308 63 5018 3366 5113 4233 2996 3520 63 9089k2 5309 64 5019 3367 5114 4234 2997 3521 64 908912 5310 65 5020 3368 5115 4235 2998 3522 65 9089m2 5311 66 5021 3369 5116 4236 2999 3523 66 9089n2 5312 67 5022 3370 5117 4237 3000 3524 67 90S9o2 5313 68 5023 3371 5118 4238 3001 3525 68 9089p2 5314 69 5024 3372 5119 4239 3002 3526 69 9089q2 5315 70 5025 3373 5120 4240 3003 3527 70 9089r2 5316 71 5026 3374 5121 4241 3004 3528 71 9089s2 5317 72 5027 3375 5122 4242 3005 3529 72 9089t2 5318 73 5028 3376 5123 4243 3006 3530 73 9089u2 5319 74 5029 3377 5124 4244 3007 3531 74 9089v2 5320 75 5030 3378 5125 4245 3008 3532 75 9089w2 5321 76 5031 3379 5126 4246 3009 3533 76 9089x2 5322 77 5032 3380 5127 4247 3010 3534 77 9089y2 5323 78 5033 3381 5128 4248 3011 3535 78 9089z2 5324 79 5034 3382 5129 4249 3012 3536 79 9089a3 5325 80 5035 3383 5130 4250 3012 3537 80 9089b3 5326 81 5036 3384 5131 4251 3013 3538 81 9089c3 5327 82 5037 3385 5132 4252 3014 3539 82 9089d3 5328 83 5038 3386 5133 4253 3015 3540 83 9089e3 5329 84 5038 3387 5134 4254 3016 3541 84 9089f3 5330 85 5039 3388 5135 4255 3017 3542 85 9089g3 5331 86 5040 3389 5136 4256 3017 3543 86 9089h3 5332 87 5041 3390 5137 4257 3018 3544 9089i3 5333 88 5042 3391 5138 4258 3019 3545 *87 9089] 3 5334 89 5043 3392 5139 4259 3020 3546 88 9089k3 5335 90 5044 3393 5140 4260 3021 3547 89 908913 5336 91 5045 3394 5141 4261 3022 3548 90 9089m3 5337 92 5046 3395 5142 4262 3023 3549 91 9089n3 5338 93 5046 3396 5143 4263 3024 3550 92 9089o3 5339 94 5047 3397 5144 4264 3025 3551 93 9089p3 ' 5340 •For the nui iibers ii l other States, see pa ges xvi i-xx a nd xxi-xj uv. TABLE OP CORRESPONDING SECTIONS. XV Com- i ; ; ~ 3 mis- sioners' Draft Ala. Ariz. Col. Conn Fla. Ida. 111. Ind. Kan. 95 5048 3398 5145 4265 3026 3652 94 9089q3 9089r3 5341 96 5048 3399 5146 4263 3027 3553 95 5342 97 5049 3400 5147 4267 3027 3554 96 9089s3 5343 98 5050 3401 5148 4268 3028 3555 97 9089t3 5344 99 5051 3402 5149 4269 3029 3556 98 9089u3 5345 100 5052 3403 5150 4270 3029 3557 99 9089v3 5346 101 5053 3404 5151 4271 3030 3558 100 9089w3 5347 102 5054 3405 5152 4272 3031 3559 101 9089x3 5348 103 5055 3406 5153 4273 3031 3560 102 9089y3 5349 104 5056 3407 5154 4274 3032 3561 103 9089z3 5350 105 5057 3408 5155 4275 3033 3562 104 9089a4 5351 106 5057 3409 5153 4276 3033 3563 105 9089b4 5352 107 5058 3410 5157 4277 3034 3564 106 9089c4 5353 108 5059 3411 5158 4278 3035 3565 107 9089d4 5354 109 5060 3412 5159 4279 3036 3566 108 9089e4 5355 110 5060 3413 5160 4280 3036 3567 109 9089f4 5356 111 5060 3414 5161 4281 3036 3568 110 9089g4 5357 112 5061 3415 5162 4282 3037 3569 111 9089h4 5358 113 5062 3416 5163 4283 3038 3570 112 9089i4 5359 114 5063 3417 5164 4284 3039 3571 113 9089 j 4 5360 115 5064 3418 5165 4285 3039 3572 114 9089k4 5361 116 5065 3419 5166 4286 3039 3573 115 908914 5362 117 5066 3420 5167 4287 3040 3574 116 9089m4 5363 118 5067 3421 5168 4288 3041 3575 117 9089n4 5364 119 5068 3422 5169 4289 3042 3576 118 9089o4 5365 120 5069 3423 5170 4290 3042 3577 119 9089p4 5366 121 5070 3424 5171 4291 3043 3578 120 9089q4 5367 122 5071 3425 5172 4292 3044 3579 121 9089r4 5368 123 5072 3426 5173 4293 3045 3580 122 9089s4 5369 124 5073 3427 5174 4294 3046 3581 123 9089t4 5370 125 5074 3428 5175 4295 3046 3582 124 9089u4 5371 126 5075 3429 5176 4296 3047 3583 125 9089v4 5372 127 5076 3430 5177 4297 3047 3584 126 9089w4 5373 128 5077 3431 5178 4298 3047 3585 127 9089x4 5374 129 5078 3432 5179 4299 3048 3586 128 9089y4 5375 130 5079 3433 5180 4300 3049 3587 129 9089z4 5376 131 5080 3434 5181 4301 3050 3588 130 9089a5 5377 132 5081 3435 5182 4302 3051 3589 131 9089b5 5378 133 5082 3436 5183 4303 3051 3590 132 9089c5 5379 134 5083 3437 5184 4304 3051 3591 133 9089d5 5380 135 5084 3438 5185 4305 3052 3592 134 9089e5 5381 136 5085 3439 5186 4306 3053 3593 135 9089f5 5382 137 5086 3440 5187 4307' 3054 3594 136 9089e;5 5383 138 5087 3441 5188 4308 3055 3595 9089h5 5384 139 5088 3442 5189 4309 3056 3596 i38' 9089i5 5385 140 5089 3443 5190 4310 3056 3597 139 9089j 5 5386 141 5090 3444 5191 4311 3056 3598 140 9089k5 5387 142 5091 3445 5192 4312 3057 3599 141 908915 5388 143 5092 3446 5193 4313 3058 3600 142 9089m5 5389 144 5093 3447 5194 4314 3059 3601 143 9089n5 5390 145 5094 3448 5195 4315 3060 3602 144 9085o5 5391 146 5095 3449 5196 4316 ' 3061 3603 145 9089p5 5392 For the numbers in other States, see pages xvii-xx and xxi-xxiv. XVI TABLE OF CORRESPONDING SECTIONS.* Com- mis- Ala. Ariz. Col. Conn. Fla. Ida. El. Ind. Kan. sioners' Draft 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 5095 5095 5097 5098 5099 5100 5101 5102 3450 3451 3452 3453 3454 3455 3456 5197 5198 5199 5200 5201 5203 5204 4317 4318 4319 4320 4321 4322 4323 3062 3062 3063 3063 3064 3065 3066 3604 3605 3606 3607 3608 3609 3610 146 147 148 149 150 151 152 9089q5 9089r5 9089s5 9089t5 9089u5 9089v5 9089w5 5393 5394 5395 5396 5397 5398 5399 3457 5205 4324 3066 3611 153 9089x5 5400 5103 3458 5206 4325 3067 3612 154 9089y5 5401 5104 3459 5207 4326 3067 3613 155 9089z5 5402 5105 3460 5208 4327 3068 3614 156 9089a6 5403 5106 3461 5209 4328 3069 3615 157 90S9b6 5404 5107 3462 5210 4329 3070 3616 158 9089c6 5405 5108 3463 5211 4330 3071 3617 159 9089d6 5406 5109 3464 5212 4331 3073 3618 160 9089e6 5407 5110 3465 5213 4332 3074 3619 161 9089f6 5408 5111 3466 5214 4333 3075 3620 162 9089g6 5409 5112 3467 5215 4334 3076 3621 163 9089h6 5410 5113 3468 5216 4335 3076 3622 164 9089i6 5411 166 167 168 169 5114 3469 5217 4336 3077 3623 165 9089J6 5412 5115 3470 5218 4337 3078 3624 166 9089k6 5413 5116 3471 5219 4338 3079 3625 167 908916 5414 5117 3472 5220 4339 3080 3626 168 9089m6 5415 170 5118 3473 5221 4340 3081 3627 169 9089n6 5416 171 5119 3474 5221 4341 3082 3628 170 9089o6 5417 172 5120 3475 5222 4342 3082 3629 171 9089p6 5418 173 5120 3476 5223 4343 3083 3630 172 9089q6 5419 174 5121 3477 5224 4344 3084 3631 173 9089r6 4920 175 5122 3478 5225 4345 3085 3632 174 9089s6 4921 176 5123 3479 5226 4346 3086 3633 175 9089t6 5422 177 5124 3480 5227 4347 3086 3634 176 9089u6 5423 178 5125 3481 5228 4348 3087 3635 177 9089v6 5424 179 5126 3482 5229 4349 3088 3636 178 9089w6 5425 180 5127 3483 5230 4350 3089 3637 179 9089x6 5426 181 5128 3484 5231 4351 3090 3638 180 9089y6 5427 182 5129 3485 5232 4352 3091 3639 181 9089z6 5428 183 5130 3486 5233 4353 3092 3640 182 9089a7 5429 184 5031 3487 5234 4354 3093 3641 183 9089b7 5430 185 5032 3487 5235 4355 3094 3642 184 9089c7 5431 186 5033 3487 5236 4356 3095 3643 185 9089d7 5432 187 5034 3487 5237 4357 3096 3644 186 9089e7 5433 188 5035 3487 5238 4358 3097 3645 187 9089f7 5434 189 5036 3487 5239 4359 3098 3646 188 9089g7 5435 190 5037 5240 2934 3647 189 9089h7 5436 191 5038 3487 5241 4i70 2934 3648 190 9089i7 5437 192 5039 3488 5242 4170 2934 3649 191 9089j 7 5438 193 5040 3489 5243 4170 2934 3650 192 9089k7 5439 194 5041 3490 5244 4170 2934 3651 193 908917 5440 195 5042 5245 4170 3652 194 9089m7 5441 196 5043 349i 5246 4170 2934 3653 195 9089n7 5442 197 .... .... .... 196 198 ' For tte numbers in other States, see pages xvii-xx and xxi-xxi?. TABLE OF CORRESPONDING SECTIONS.* XV13 Com- mis- sioners' Md. Mass. Mich. Minn. Mon. Neb. N.H. N. Y. N. C. Draft 1 20 18 3 5813 5849 1 1 20 2151 2 21 19 4 5814 5850 2 2 21 2152 3 22 20 5 5815 5851 3 3 22 2153 4 23 21 6 5816 5852 4 4 23 2154 5 24 22 7 5817 5853 5 5 24 2155 6 25 23 8 5818 5854 6 6 25 2156 7 26 24 9 5819 5855 7 7 26 2157 8 27 25 10 5820 5856 8 8 27 2158 9 28 26 11 5821 5857 9 9 28 2159 10 29 27 12 5822 5858 10 10 29 2160 11 30 28 13 5823 5859 11 11 30 2161 12 31 29 14 5824 5860 12 12 31 2162 13 32 30 15 5825 5861 13 13 32 2163 14 33 31 16 5826 5862 14 14 33 2164 15 34 32 17 5827 5863 15 15 34 2165 16 35 33 18 5828 5864 16 16 35 2166 17 36 34 19 5829 5865 17 17 36 2341 18 37 35 20 5830 5866 18 18 37 2167 19 38 36 21 5831 5867 19 19 38 2168 20 39 37 22 5832 5868 20 20 39 2169 21 40 38 23 5833 5869 21 2.1 40 2170 22 41 39 24 5834 5870 22 22 41 2180 23 42 40 25 5835 5871 23 23 42 2171 24 43 41 26 5836 5872 24 24 50 2172 25 44 42 27 5837 5873 25 25 51 2173 26 45 43 28 5838 5874 26 26 52 2174 27 46 44 29 5839 5875 27 27 53 2175 28 47 45 30 5840 5876 28 28 54 2176 29 48 46 31 5841 5877 29 29 55 2177 30 49 47 32 5842 5878 30 30 60 2178 31 50 48 33 5843 5879 31 31 61 2179 32 51 49 34 5844 5880 32 32 62 2181 33 52 50 35 5845 5881 33 33 63 2182 34 53 51 36 5846 5882 34 34 64 2183 35 54 52 37 5847 5883 35 35 65 2184 36 55 53 38 5848 5884 36 36 66 2185 37 56 54 39 5849 5885 37 37 67 2186 38 57 55 40 5850 5886 38 38 68 2187 39 58 56 41 5851 5887 39 39 69 2188 40 59 57 42 5852 5888 40 40 70 2189 41 60 58 43 5853 5889 41 41 71 2190 42 61 59 44 5854 5890 42 42 72 2191 43 62 60 45 5855 5891 43 43 73 2192 44 63 61 46 5856 5892 44 44 74 2193 45 64 62 47 5857 5893 45 45 75 2194 46 65 63 48 5858 5894 46 46 76 2195 47 66 64 49 5859 5895 47 47 77 2196 48 67 65 50 5860 5896 48 48 78 2197 49 68 66 51 5861 5897 49 49 79 2198 50 69 67 52 5862 5898 50 50 80 2199 • For the numbers in other States, see pages xiii-xvi and xxi-Htiv. XV111 TABLE OP CORRESPONDING SECTIONS. 1 Com- | — i mis- sioners' Md. Mass. Mich. Minn Mon. Neb. N. H. N. Y. N. C. Draft 51 70 68 53 5863 5899 51 51 90 2200 52 71 69 54 5864 5900 52 52 91 2201 53 72 70 55 5865 5901 53 53 92 2202 54 73 71 56 5866 5902 54 54 93 2203 55 74 72 57 5867 5903 55 55 94 2204 56 75 73 58 5868 5904 56 56 95 2205 57 76 74 59 5869 5905 57 57 96 2206 58 77 75 60 5870 5906 58 58 97 2207 59 78 76 61 5871 5907 59 59 98 2208 60 79 77 62 5872 5908 60 60 110 2209 61 80 78 63 5873 5909 61 61 111 2210 62 81 79 64 5X74 5910 62 62 112 2211 63 82 80 65 5S75 5911 63 63 113 2212 64 83 81 66 5876 5912 64 64 114 2213 65 84 82 67 5877 5913 65 65 115 2214 66 85 83 68 5878 5914 66 66 116 2215 67 86 84 69 5879 5915 67 67 117 2216 68 87 85 70 5880 5916 68 68 118 2217 69 88 86 71 5881 5917 69 69 119 2218 70 89 87 72 5882 5918 70 70 130 2219 71 90 88 73 5883 5919 71 71 131 2220 72 91 89 74 5884 5920 72 72 132 2221 73 92 90 75 5885 5921 73 73 133 2222 74 93 91 76 5886 5922 74 74 134 2223 75 94 92 77 5887 5923 75 75 135 2224 76 95 93 78 5888 5924 76 76 136 2225 77 96 94 79 5889 5925 77 77 137 2226 78 97 95 80 5890 5926 78 78 138 2227 79 98 96 81 5891 5927 79 79 139 2228 80 99 97 82 5892 5928 80 80 140 2229 81 100 98 83 5893 5929 81 81 141 2230 82 101 99 84 5894 5930 82 82 142 2231 83 102 100 85 5895 5931 83 83 143 2232 84 103 101 86 5896 5932 84 84 144 2233 85 104 102 87 5897 5933 85 85 145 2234 86 105 103 88 5898 5934 86 86 146 2236 87 106 104 89 5899 5935 87 147 2237 88 107 105 90 5900 5936 "87 88 148 2238 89 108 106 91 5901 5937 88 89 160 2239 90 109 107 92 5902 5938 89 90 161 2240 91 110 108 93 5903 5939 90 91 162 2241 92 111 109 94 5904 5940 91 92 163 2242 93 112 110 95 5905 5941 92 93 164 2243 94 113 111 96 5906 5942 93 94 165 2244 95 114 112 97 5907 5943 94 95 166 2245 96 115 113 98 5908 5944 95 96 167 2248 97 116 114 99 5909 5945 96 97 168 2247 98 117 115 100 5910 5946 97 98 169 2248 99 118 116 101 5911 5947 98 99 170 2249 100 1 119 117 102 5912 5948 99 100 171 2250 * *or the nui nbers h l other States, see pa ges xiii -xvi ar d xxi-j udv. TABLE OF CORRESPONDING SECTIONS. XIX Com- mis- sioners' Md. Mass. Mich. Minn. Mon. Neb. N. H. N. Y. N. C. Draft 101 120 118 103 5913 5949 100 101 172 2251 102 121 119 104 5914 5950 101 102 172 2252 103 122 120 105 5915 5951 102 103 174 2253 104 123 121 106 5916 5952 103 104 175 2254 •105 124 122 107 5917 5953 104 105 176 3255 106 125 123 108 5918 5954 105 106 177 2256 107 126 124 109 5919 5955 106 107 178 2257 108 127 125 110 5920 5956 107 108 179 2258 109 128 126 111 5921 5957 108 109 180 2259 110 129 127 112 5922 5958 109 110 181 2260 111 130 128 113 5923 5959 110 111 182 2261 112 131 129 114 5924 5960 111 112 183 2262 113 132 130 115 5925 5961 112 113 184 2263 114 133 131 116 5926 5962 113 114 185 2264 115 134 132 117 5927 5963 114 115 186 2265 116 135 133 118 5928 5964 115 116 187 2266 117 136 134 119 5929 5965 116 117 188 2267 118 137 135 120 5930 5966 117 118 189 2268 119 138 136 121 5931 5967 118 119 200 2269 120 139 137 122 5932 5968 119 120 201 2270 121 140 138 123 5933 5969 120 121 202 2271 122 141 139 124 5934 5970 121 122 203 2272 123 142 140 125 5935 5971 122 123 204 2273 124 143 141 126 5936 5972 123 124 205 2274 125 144 142 127 5937 5973 124 125 206 2275 126 145 143 128 5938 5974 125 126 210 2276 127 146 144 129 5939 5975 126 127 211 2277 128 147 145 130 5940 5976 127 128 212 2278 129 148 146 131 5941 5977 128 129 213 2279 130 149 147 132 5942 5978 129 130 214 2280 131 150 148 133 5943 5979 130 131 215 2281 132 151 149 134 5944 5980 131 132 220 2282 133 152 150 135 5945 5981 132 133 221 2283 134 153 151 136 5946 5982 133 134 222 2284 135 154 152 137 5947 5983 134 135 223 2285 136 155 153 138 5948 5984 135 136 224 2286 137 156 154 139 5949 5985 136 137 225 2287 138 157 155 140 5950 5986 137 138 226 2288 139 158 156 141 5951 5987 138 139 227 2289 140 159 157 142 5952 5988 139 140 228 2290 141 160 158 143 5953 5989 140 141 229 2291 142 161 159 144 5954 5990 141 142 230 2292 143 162 160 145 5955 5991 142 143 240 2293 144 163 161 146 5956 5992 143 144 241 2294 145 164 162 147 5957 5993 144 145 242 2295 146 165 163 148 5958 5994 145 146 243 2296 147 166 164 149 5959 5995 146 147 244 2297 148 167 165 150 5960 5996 147 148 245 2298 149 168 166 151 5961 5997 148 149 246 2299 For the numbers in other States, see pages xiii-xvi and xxi-xxiv. TABLE OF CORRESPONDING SECTIONS. Com- mis- Bioners' Md. Mass. Mich. Minn Mon. Neb. N.H. N. Y. N.C. Draft 150 169 167 152 5962 5998 149 150 247 2300 151 170 168 153 5963 5999 150 151 248 2301 152 171 169 154 5964 6000 151 152 260 2302 153 172 170 155 5965 6001 152 153 261 2303 154 173 171 156 5966 6002 153 154 262 2304 155 174 172 157 5967 6003 154 155 263 2305 156 175 173 158 5968 6004 155 156 264 2306 157 176 174 159 5969 6005 156 157 265 2307 158 177 175 160 5970 6006 157 158 266 2308 159 178 176 161 5971 6007 158 159 267 2309 160 179 177 162 5972 6008 159 160 268 2310 161 180 178 163 5973 6009 160 161 280 2311 162 181 179 164 5974 6010 161 162 281 2312 163 182 180 165 5975 6011 162 163 282 2313 164 183 181 166 5976 6012 163 164 283 2314 165 184 182 167 5977 6013 164 165 284 2315 166 185 183 168 5978 6014 165 166 285 2316 167 186 184 169 5979 6015 166 167 286 2317 168 187 185 170 5980 6016 167 168 287 2318 169 188 186 171 5981 6017 168 169 288 2319 170 189 187 172 5982 6018 169 170 289 2320 171 190 188 173 5983 6019 170 171 300 2321 172 191 189 174 5984 6020 171 172 301 2322 173 192 190 175 5985 6021 172 173 302 2323 174 193 191 176 5986 6022 173 174 303 2324 175 194 192 177 5987 6023 174 175 304 2325 176 195 193 178 ■5988 6024 ■175 176 305 2326 2327 177 196 194 179 5989 6025 176 177 306 178 197 195 180 5990 6026 177 178 310 2328 2329 179 198 196 181 5991 6027 178 179 311 180 199 197 182 5992 6028 179 180 312 2330 2331 181 200 198 183 5993 6029 180 181 313 182 201 199 184 5994 6030 181 182 314 2332 2333 2334 2335 2336 2337 2338 2339 183 202 200 185 5995 6031 182 183 315 184 203 201 186 5996 6032 183 184 320 185 204 202 187 5997 6033 184 185 321 186 205 203 188 5998 6034 185 186 322 187 206 204 189 5999 6035 186 187 323 188 207 205 190 6000 6036 187 188 324 189 190 208 13 206 191 1 6001 6002 6037 5842 188 189 325 1 2 3 4 5 6 7 191 192 193 194 14 15 16 17 '207 208 209 210 2 2 2 2 6003 6004 6005 6006 5843 5844 5845 5846 i89 190 191 192 190 191 192 193 2340 2342 2343 195 196 197 198 • 17 — 18 19 19 211 212 2 2 6007 6008 6009 5847 5848 193 194 197 194 195 196 2345 2344 *i,~ 198 196 .... see pages xiii-xvi and xxi-xxir. TABLE OF CORRESPONDING SECTIONS.* XXI Com- mis- sioners' N.D. Okla. Ohio Ore. R.I. S.D Tenn. Utah Wis. Draft 1 1 6886 4044 3171 5834 7 1 1553 1675- 1 2 6887 4045 3171a 5835 8 2 2 1554 1675- 2 3 6888 4046 3171b 5836 9 3 3 1555 1675- 3 4 6889 4047 3171c 5837 10 4 4 1556 1675- 4 5 6890 4048 3171d 5838 11 5 5 1557 1675- 5 6 6891 4049 3171e 5839 12 6 6 1558 1675- 6 7 6892 4050 3171f 5840 13 7 7 1559 1675- 7 8 6893 4051 3171g 5841 14 8 8 1560 1675- 8 9 6894 4052 3171h 5842 15 9 9 1561 1675- 9 10 6895 4053 3171i 5843 16 10 10 1562 1675-10 11 6896 4054 3171] 5844 17 11 11 1563 1675-11 12 6897 4055 3171k 5845 18 12 12 1564 1675-12 13 6898 4056 31711 5846 19 13 13 1565 1675-13 14 6899 4057 3171m 5847 20 14 14 1566 1675-14 15 6900 4058 3171n 5848 21 15 15 1567 1675-15 16 6901 4059 3171o 5849 22 16 16 1568 1675-16 17 6902 4060 3171p 5850 23 17 17 1569 1675-17 18 6903 4061 3171q 5851 24 18 18 1570 1675-18 19 6904 4062 3171r 5852 25 19 19 1571 1675-19 20 6905 4063 3171s 5853 26 20 20 1572 1675-20 21 6906 4084 3171t 5854 27 21 21 1573 1675-21 22 6907 4065 3171u 5855 28 22 22 1574 1675-22 23 6908 4066 3171v 5856 29 23 23 1575 1675-23 24 6909 4067 3171w 5857 30 24 24 1576 1675-50 25 6910 4068 3171x 5858 31 25 25 1577 1675-51 26 6911 4069 3171y 5859 32 2d 26 1578 1675-52 27 6912 4070 3171z 5860 33 27 27 1579 1675-53 28 6913 4071 3172 5861 34 28 28 1580 1675-54 29 6914 4072 3172a 5862 35 29 29 1581 1675-55 30 6915 4073 3172b 5863 36 30 30 1582 1676 31 6916 4074 3172c 5864 37 31 31 1583 1676- 1 32 6917 4075 3172d 5865 38 32 32 1584 1676- 2 33 6918 4076 3172e 5866 39 33 33 1585 1676- 3 34 6919 4077 3172f 5867 40 34 34 1586 1676- 4 35 6920 4078 3172g 5868 41 35 35 1587 1676- 5 36 6921 4079 3172h 5869 42 36 36 1588 1676- 6 37 6922 4080 3172i 5870 43 37 37 1589 1676- 7 38 6923 4081 3172J 5S71 44 38 38 1590 1676- 8 39 6924 4082 3172k 5872 45 39 39 1591 1676- 9 40 6925 4083 31721 5873 46 40 40 1592 1676-10 41 6926 4084 3172m 5874 47 41 41 1593 1676-11 42 6927 4085 3172n 5875 48 42 42 1594 1676-12 43 6928 4086 3172o 5876 49 43 43 1595 1676-13 44 6929 4087 3172p 5877 50 44 44 1596 1676-14 45 6930 4088 3172q 5878 51 45 45 1597 1676-15 46 6931 4089 3172r 5879 52 46 46 1598 1676-16 47 6932 4090 3172a 5880 53 47 47 1599 1676-17 48 6933 4091 3172t 5881 54 48 48 1600 1676-18 49 6934 4092 3172u 5882 55 49 49 1601 1676-19 50 6935 4093 3172v 5883 56 50 50 1602 1676-20 * For the numbers in other States, see pages xiii-xvi, xvii-xx and xxiv, XX11 TABLE OF CORRESPONDING SECTIONS. Com- mis- sioners' N.D. Okla. Ohio Ore. R.I. S. D. Term. Utah Wis. Draft 51 6936 4094 3172w 5884 57 51 51 1603 1676-21 52 6937 4095 3172x 5885 58 52 52 1604 1676-22 53 6938 4096 3172y 5886 59 53 53 1605 1676-23 54 6939 4097 3172z 5887 60 54 54 1606 1676-24 55 6940 4098 3173 5888 61 55 55 1607 1676-25 56 6941 4099 3173a 5S89 62 56 56 1608 1676-26 57 6942 4100 3173b 5890 63 57 57 1609 1676-27 5S 6943 4101 3173c 5S91 64 58 58 1610 1676-28 5',) 6944 4102 3173d 5892 65 59 59 1611 1676-29 60 6945 4103 3173e 5893 66 60 60 1612 1677 61 6946 4104 3173f 5S94 67 61 61 1613 1677- 1 62 6947 4105 3173g 5895 68 62 62 1614 1677- 2 63 6948 4106 3173h 5890 69 63 63 1615 1677- 3 64 6949 4107 3173i 5897 70 64 64 1616 1677- 4 65 6950 4108 3173J 5S98 71 65 65 1617 1677- 5 66 6951 4109 3173k 5899 72 66 66 1618 1677- 6 67 6952 4110 31731 5900 73 67 67 1619 1677- 7 68 6953 4111 3173m 5901 74 68 68 1620 1677- 8 69 6954 4112 3173n 5902 75 69 69 1621 1677- 9 70 6955 4113 3173o 5903 76 70 70 1622 1678 71 6956 4114 3173p 5904 77 71 71 1623 1678- 1 72 6957 4115 3173q 5905 78 72 72 1624 1678- 2 73 6958 4116 3173r 5906 79 73 73 1625 1678- 3 74 6959 4117 3173s 5907 80 74 74 1626 1678- 4 75 6960 4118 3173t 5908 81 75 75 1627 1678- 5 76 6961 4119 3173u 5909 82 76 76 1628 1678- C 77 6962 4120 3173v 5910 83 77 77 1629 1678- 7 78 6963 4121 3173w 5911 84 78 78 1630 167S- S 79 6964 4122 3173x 5912 85 79 79 1631 1678- 9 80 6965 4123 3173y 5913 86 80 80 1632 1678-10 81 6966 4124 3173z 5914 87 81 81 1633 1678-11 82 6967 4125 3174 5915 88 82 82 1634 1678-12 83 6968 4126 3174a 5916 89 83 83 1635 1678-13 84 6969 4127 3174b 5917 90 84 84 1636 1678-14 85 6970 4128 3174o 5918 91 85 85 1637 1678-15 86 6971 4129 3174d 5919 92 86 86 1638 1678-16 87 6972 4130 3174e 5920 93 87 1639 1678-17 88 6973 4131 3174f 5921 94 87 88 1640 1678-18 89 6974 4132 3174g 5922 95 88 89 1641 1678-19 90 6975 4133 3174h 5923 96 89 90 1642 1678-20 91 6976 4134 3174i 5924 97 90 91 1643 1678-21 92 6977 4135 3174J 5925 98 91 92 1644 1678-22 93 6978 4136 3174k 5926 99 92 93 1645 1678-23 94 6979 4137 31741 5927 100 93 94 1646 1678-24 95 6980 4138 3174m 5928 101 94 95 1647 1678-25 96 6981 4139 3174n 5929 102 95 96 1648 1678-26 97 6982 4140 3174o 5930 103 96 97 1649 1678-27 98 99 100 6983 4141 3174p 5931 104 97 98 1650 1678-28 6984 4142 3174q 5932 105 98 99 1651 1678-29 6985 4143 3174r 5933 106 99 100 1652 1678-30 * For the numbers in other States, see pages xiii-xvi, xvii~xx and sxiv. TABLE OF CORRESPONDING SECTIONS.* XXlli Com- mis- sioners' N.D. Okla. Ohio Ore. R.I. S. D. Term. Utah Wis. Draft 101 6986 4144 3174s 5934 107 100 101 1653 1678-31 102 6987 4145 3174t 5935 108 101 102 1654 1678-32 103 6988 4146 3174u 5936 109 102 103 1655 1678-33 104 6989 4147 3174v 5937 110 103 104 1656 1678-34 105 6990 4148 3174w 5938 111 104 105 1657 1678-35 106 6991 4149 3174x 5939 112 105 106 1658 1678-36 107 6992 4150 3174y 5940 113 106 107 1659 1678-37 108 6993 4151 3174z 5941 114 107 108 1660 1678-38 109 6994 4152 3175 5942 115 108 109 1661 1678-39 110 6995 4153 3175a 5943 116 109 110 1662 1678-40 111 6996 4154 3175b 5944 117 110 111 1663 1678-41 112 6997 4155 3175c 5945 118 111 112 1664 1678-42 113 6998 4156 3175d 5946 119 112 113 1665 1678-43 114 6999 4157 3175e 5947 120 113 114 1665x 1678-44 115 7000 4158 3175f 5948 121 114 115 1665x 1 1678-45 116 7001 4159 3175g 5949 122 115 116 1665x 2 1678-46 117 7002 4160 3175h 5950 123 116 117 1665x 3 1678-47 118 7003 4161 3175i 5951 124 117 118 1665x 4 1678-48 119 7004 4162 3175j 5952 125 118 119 1665x 5 1679 120 7005 4163 3175k 5953 126 119 120 1665x 6 1679- 1 121 7006 4164 31751 5954 127 120 121 1665x 7 1679- 2 122 7007 4165 3275m 5955 128 121 122 1665x 8 1679- 3 123 7008 41S6 3175n 5956 129 122 123 1665x 9 1679- 4 124 7009 4167 3175o 5957 130 123 124 1665x10 1679- 5 125 7010 4168 3175p 5958 131 124 125 1665x11 1679- 6 126 7011 4169 3175q 5959 132 125 126 1665x12 1680 127 7012 4170 3175r 5960 133 126 127 1665x13 1680-a 128 7013 4171 3175s 5961 134 127 128 1665x14 1680-b 129 7014 4172 3175t 5962 135 128 129 1665x15 1680-c 130 7015 4173 3175u 5963 136 129 130 1665x16 1680-d 131 7016 4174 3175v 5964 137 130 131 1665x17 1680-e 132 7017 4175 3175w 5965 138 131 132 1665x18 1680-f 133 7018 4176 3175x 5966 139 132 133 1665x19 1689-g 134 7019 4177 3175y 5967 140 133 134 1665x20 1680-h 135 7020 4178 3175z 5968 141 134 135 1665x21 1680-i 136 7021 4179 3176 5969 142 135 136 1665x22 1680-j 137 7022 4180 3176a 5970 143 137 1665x23 1680-k 138 7023 4181 3176b 5971 144 i36 138 1665x24 1680-1 139 7024 4182 3176c 5972 145 137 139 1665x25 1680-m 140 7025 4183 3176d 5973 146 138 140 1665x26 1680-n 141 7026 4184 3176e 5974 147 139 141 1665x27 1680-O 142 7027 4185 3176f 5975 148 140 142 1665x28 1680-p 143 7028 4186 3176g 5976 149 141 143 1665x29 1681 144 7029 4187 3176h 5977 150 142 144 1665x30 1681- 1 145 7030 4188 3170i 5978 151 143 145 1665x31 1681- 2 146 7031 4189 3176] 5979 152 144 146 1665x32 1681- 3 147 7032 4190 3176k 5980 153 145 147 1665x33 1681- 4 148 7033 4191 31761 5981 154 146 148 1665x34 1681- 5 149 7033a 4192 3176m 5982 155 147 149 1665x35 1681- 6 * For the numbers in other States, see pages xiii-xvi, xvii-xx and xxiv. XXIV TAPLE OF CORRESPONDING SECTIONS. Com- mia- Boners' N. D. Okla. Ohio Ore. R.I. S. D. renn. Utah Wis. Draft 150 151 152 153 154 155 156 157 158 159 7034 4193 3176n 5983 156 148 150 1665x36 1681- 7 7035 4194 3176o 5984 157 149 151 1665x37 1681- 8 7036 4195 3176p 5985 158 150 152 1665x38 1681- 9 7037 4196 3176q 5986 159 151 153 1665x39 1681-10 7038 4197 3176r 5987 160 152 154 1665x40 1681-11 7039 4198 3176s 5988 161 153 155 1665x41 1681-12 7040 4199 3176t 5989 162 154 156 1665x42 1681-13 7041 4200 3176u 5990 163 155 157 1665x43 1681-14 7042 4201 3176v 5991 164 156 158 1665x44 1681-15 7043 4202 3176w 5992 165 157 159 1665x45 1681-16 160 161 7044 4203 3176x 5993 166 158 160 1665x46 1681-17 7045 4204 3176y 5994 167 159 161 1665x47 1681-18 162 163 7046 4205 3176z 5995 168 160 162 1665x48 1681-19 7047 4206 3177 5996 169 161 163 1665x49 1681-20 164 7048 4207 3177a 5997 170 162 164 1665x50 1681-21 165 7049 4208 3177b 5998 171 163 165 1665x51 1681-22 166 7050 4209 3177c 5999 172 164 166 1665x52,1681-23 167 7051 4210 3177d 6000 173 165 167 1665x5:i 1681-24 168 7052 4211 3177e 6001 174 166 168 1665x5411681-25 169 7053 4212 3177f 6002 175 167 169 1665x55;i681-26 170 7054 4213 3177g 6003 176 168 170 1665x56:1681-27 171 7055 4214 3177h 6004 177 169 171 1665x5711681-28 172 7056 4215 3177i 6005 178 170 172 1665x58 1681-29 173 7057 4216 3177] 6006 179 171 173 1665x591681-30 171 7058 4217 3177k 6007 180 172 174 1665x60 1681-31 175 7059 4218 31771 6008 181 173 175 1665x61 1681-32 176 7060 4219 3177m 6009 182 174 176 1665x62 1681-33 177 7061 4220 3177n 6010 183 175 177 1665x63 1681-34 178 7062 4221 3177o 6011 184 176 178 1665x64 1681-35 179 7063 4222 3177p 6012 185 177 179 1665x65 1681-36 ISO 7064 4223 3177q 6013 186 178 180 1665x66 1681-37 181 7065 4224 3177r 6014 187 179 181 1665x67|16Sl-38 182 7066 4225 3177s 6015 iss 180 182 1665x68:1681-39 183 7067 4226 3177t 6016 189 181 183 1665x69 1681-40 184 7068 4227 3177u 6017 190 182 184 1665x70 1684 185 7069 4228 3177v 6018 191 183 185 1665x71 1684- 1 186 7070 4229 3177w 6019 192 184 186 1665x72 1684- 2 187 7071 4230 3177x 6020 193 185 187 1665x73 1684- 3 188 7072 4231 3177y 6021 194 186 188 1665x74 1684- 4 189 7073 4232 3177z 6022 195 187 189 1665x75 1684- 5 190 7074 4233 6023 188 1665x76 191 7075 4234 317S 6023 "i 189 . . . 1665x77 1675 192 7076 4235 3178a 6023 2 190 . • • 1665x78 1675 193 7077 4236 3178b 6023 3 191 . . • 1665x79 1675 194 7078 4237 3178c 6023 4 192 1665x8C 1675 195 7079 4238 3178d 6024 5 193 1665x81 1675 196 7080 4239 3178e 6025 6 194 1665x82 1675 197 196 * * . 1684- 7 198 . * For the numbers in other States, see pages xiii-xvi. xvii-xx, and xxiv. Note.— In Alaska Arkansas, Delaware. Hawaii, Iowa, Louisiana. Nevada, New Jersey, New Mexico, Pennsylvania. Rhode Island. Vermont, Virginia, West VI r- ginia and Wyoming, the numbers are the same as in the commissioners' draft. In Kentucky the act has been includes in Carroll's Kentucky Statutes under the gen- eral heading of section 3750b, but the original numbers, which are the same as io the commissioners' draft are preserved. TABLE OF CASES. FAOI! Abbott v. Le Prevost, 166 App. Div. 40 70 Aekley School District v. Hall, 113 U. S. 135 20 Acme Coal Company v. Northup Nat. Bank, 146 Pac. Rep. 593 . 48 Adair v. Lenox, 15 Ore. 489 88, 114, 163 Adams v. Wright, 14 Wis. 408 177, 234 v. Hackensaek, 44 N. J. L. 638 162 Aebi v. Bank of Evansville, 124 Wis. 73, 81 185, 250 Aetna National Bank v. Charter Oak Life Ins. Co. 50 Conn . . 167 701 v. Fourth National Bank, 46 N. Y. 82. . . 161 Aiken v. Marine Bank, 16 Wis. 679 170 Albany County Bank v. Peoples' Ice Co., 92 App. Div. 47. .97, 100 Albert v. Hoffman, 64 Misc. 87 31, 35 Albertson v. Laughlin, 173 Pa. St. 525 20 Albrecht v. Atrimpler, 7 Pa. St. 476 66 Alexander & Co. v. Hazelrigg, 123 Ky. 677 109, 246 Alger v. Scott, 54 N. Y. 14 213 Allen v. Corn Exchange Bank, 87 App. Div. 335 84 v. Rightmere, 20 Johns. 365 167 v. Suydam, 17 Wend. 368 227 American Bank v. Jenness, 2 Mete. 288 100 Bank v. McComb, 105 Va. 473 95 Exchange National Bank v. American Hotel. Victoria Co., 103 App. Div. 372 173 Exchange National Bank v. New York Belting, etc., Co., 148 N. Y. 698 103, 106 Nat. Bank v. Fountain, 148 N. C. 590 116 Nat. Bank v. Halsell, 43 Okla. 126 15 Nat. Bank v. Junk Bros., 94 Tenn. 634 176 Nat. Bank v. Hill, 85 S. E. Rep. 209 65 Nat. Bank v. Lundy, 21 N. D. 167 103 Nat. Bank v. Nat. Fertilizer Co., 125 Tenn. 328. .173, 184 Savings v. Helgersen, 64 Wash. 54 109 Trust Co. v. Canevin, 184 Fed. Rep. 657 5 Amsinck v. Rogers, 189 N. Y. 252, 103 App. Div. 428. .141, 214, 192 Anderson v. First Nat. Bank of Charleston, 144 Iowa, 251 145 Andrews v. German Nat. Bank, 9 Heisk 211 253 v. Sibley, 220 Mass. 10 208 fxxvl XXVI TABLE OF CASES. PAGE Androscoggin Bank v. Kimball, 10 Cush. 373 38 Angle v. Insurance Co., 92 U. S. 330 210 Anglo-So. Amer. Bank v. Nat. City Bank, 161 App. Div. 268. . 251 252 Annville National Bank v. Kettering, 106 Pa. St. 531, 534. .185, 186 Anthony v. Balentine, 130 Mass. 119 66 Archuleta v. Johnston, 53 Colo. 393 151, 182 Arlington Nat. Bank v. Bennett, 214 Mass. 352 198 Armour v. McMiehael, 36 N. J. Law 92 61 Armstrong v. American Exchange Nat. Bank, 133 U. S. 433 ... 96 214 v. Bank, 46 Ohio St. 412 32 v. National Bank of Boyertown, 90 Ky. 431 79 v. Thurston, 11 Md. 148 155 Arnd v. Aylesworth, 145 Iowa, 185 103, 116 v. Heekert, 108 Md. 300 28 v. Sjoblom, 131 Wis. 642 Ill Arnold v. Dresser, 8 Allen, 435 153 v. Rock River Valley Union R. R. Co., 5 Duer, 207 24 Aronson v. Nurenberg, 218 Mass. 376 133 Artisans' Bank v. Backus, 36 N. Y. 106 176 Asbury v. Taube, 151 Ky. 142 100, 116, 250 , Assets Realization Co. v. Mercantile Nat. Bank, 167 App. Div. 757 202 Attorney-General v. Continental Life Insurance Co., 71 N. Y. 325 254 Aukland v. Arnold (Wis.) , 111 N. W. Rep. 212 102 Aurora State Bank v. Hayes-Eames Elevator Co., 88 Neb. 187 74, 203 Austin v. First Nat. Bank, 150 Ky. 133 96 Ayer v. Hutchins, 4 Mass. 370 97, 100 Aymar v. Beers, 7 Cow. 705 7 Bachelor v. Priest, 12 Pick. 399 227 Backus v. Danforth, 10 Conn. 297 12 Bacon v. Burnham, 37 N. Y. 614 126 v. Hanna, 137 N. Y. 379 188 v. Page, 1 Conn. 405 29 Baer v. Hoffman, 150 App. Div. 473 157 v. Leppert, 12 Hun, 516 188 Bailey v. Southwestern R. R. Bank, 11 Tla. 266 199, 213 Baker v. Denning, 8 Adol & Ellis, 94 12 Baldwin v. Daly, 41 Wash. 416 205 TABLE OF CASES. XXVH PAGE Baldwin's Bank v. Smith, 215 N. Y. 76 162 Baltimore & Ohio Railroad Co. v. First National Bank of Alex- andria, 102 Va. 753 4, 245 Ballen v. Bank of Krenlin, 37 Okla. 12 217 Bamford v. Boynton, 200 Mass. 560 134 Bank v. Busby, 120 Tenn. 652 191 v. Carter, 88 Tenn. 279 254 v. Dibbrell, 91 Tenn. 301 170, 252 v. Looney, 99 Tenn. 278 53, 117 v. Millard, 10 Wall. 152 254 v. Patton, 109 111. 479 254 v. Pierce, 137 N. Y. 444 194 v. Price, 52 Iowa, 530 29 v. Schuler, 120 U. S. 511 254 v. Simpson, 90 N. C. 469 200 Bank of Alexandria v. Swann, 9 Peters, 33 176 America v. Senior, 11 E. I. 376 89 America v. Waydell, 187 N. Y. 115 63, 79, 98 British North America v. Ellis, 6 Sawyer, 98 87 Bromfleld v. Mckinley, 53 Colo. 279 90 Columbia v. Lawrence, 1 Peters, 578 173, 179, 182 Commerce v. Mechanics Nat. Bank, 148 Mo. App. 1 . . 120 Cooper stown v. Woods, 28 N. Y. 545 171 England v. Vagliano (1891), App. Cas. 107 32 Genesee v. Patehin Bank, 13 N. Y. 309 69, 85 Gresham v. Walsh, 157 Pac. Rep. 534 66 Houston v. Day, 145 Mo. App. 410 28, 36, 39, 95 Jamaica v. Jefferson, 92 Tenn. 537 125, 135 LaCrosse v. Michel, 152 Wis. 88 201 Metropolis v. First National Bank of Jersey City, 19 Fed. Rep. 658 79 Michigan v. Ely, 17 Wend. 508 219 Monangahela Valley v. Weston, 172 N. Y. 259 104 Montgomery County v. Walker, 9 S. & R. 229 68 Monticello v. Dooly, 113 Wis. 590 60 Montpelier v. Montpelier Lumber Co., 16 Idaho 730. 187 Morgantown v. Hay, 143 N. C. 326 220 Neelyville v. Lee, 92 Mo. App. 185 16 Ohio Valley v. Lockwood, 132 W. Va. 392 210 Polk v. Wood, 189 Mo. App. 62 117 Port Jefferson v. Darling, 91 Hun, 236 174, 184 Rome v. Village of Rome, 19 N. Y. 20 27 Sampson v. Hatcher, 151 N. C. 359 81, 104, 107 SXviii TABLE OF CASES. PAGE Bank of St. Albans v. Farmers' and Mechanics' Bank, 10 Vt. 141 120 Syracuse v. Hollister, 17 N. Y. 46 150 the State v. Muskingum Bank, 29 N. Y. 619 85 United States v. Bank of Georgia, 10 Wheat. 333. . . 120 v. Bierne, 1 Gratt. 234 134 v. Carneal, 2 Peters, 543 172, 183 v. United States, 2 How. U. S. 745.. 232 Utica v. Ives, 17 Wend. 501 199 v. Smith, 18 Johns. 230 150 Bankers' Iowa State Bank v. Mason Hand Lathe Co., 121 Iowa, 570 68, 71 Barclay v. Weaver, 19 Pa. St. 396 157 Bardsley v. Washington Mill Co., 54 Wash. 553 140, 148 Baring v. Clark, 19 Pick. 220 194, 238 Barker v. Parker, 6 Pick. 80 156 Barkley v. Muller, 164 App. Div. 351 77 Barry v. Crowley, 4 Gill, (Md.) 194 233, 234 Bartlett v. Isbell, 31 Conn. 297 133, 188 v. Robinson, 39 N. Y. 187 182 Baruch v. Buckley, 167 App. Div. 113 103 Bass v. Inhabitants of Wellesley, 192 Mass. 526 194 Bassonhorst v. Wilby, 45 Ohio St. 336 29 Batchelder v. White, 80 Va. 103 209 Bateman v. Joseph, 2 Camp. 461 187 Batterman v. Dutcher, 95 App. Div. 213 66 Baumeister v. Kuntz, 53 Fla. 340 4, 156, 157, 186 Baumgardner v. Reeves, 35 Pa. St. 250 147 Baxendale v. Bennett, L. R. 3 Q. B. Div. 525 41 Baxter v. Little, 6 Met. 7 114 Bay v. Church, 15 Conn. 129 192 Bealls v. Peck, 12 Barb. 245 175 Beard v. Dedolph, 29 Wis. 136 92 Beauregard v. Knowlton, 156 Mass. 395 153 Beckwith v. Angell, 6 Conn. 317 78 Bedford Bank v. Aeoarn, 125 Ind. 582 161 Beem v. Farrell, 135 Iowa, 670 56 Belch v. Roberts, 177 Swrep. 1062 154 Belden v. Hann, 61 Iowa, 42 78 v. Lamb, 17 Conn. 451 154 Bell v. Alexander, 21 Gratt. 1 250 v. Hagerstown Bank, 7 Gill, 216 173, 177, 179 Bell-Knox Coal Co. v. Gregory, 152 Ky. 413 187 TABLE OF OASES. XXIX PAGE Belmont Dairy v. Thrasher, 124 Md. 320 54 Belmont v. Hoge, 35 N. Y. 65 103 Bemis v. McKenzie, 13 Fla. 553 29 Bender v. Bahr Trucking Co., 144 App. Div. 742 127 Benedict v. Kress, 97 App. Div. 65 60 v. Schmieg, 13 Wash. 476 153 Benjamin v. Rogers, 126 N. Y. 60 71 Benn v. Kutzschan, 24 Ore. 28 15, 132 Bennett v. McGaughy, 4 Miss. 192 84 Bensonhurst v. Wilby, 45 Ohio St. 340 155 Benton v. Sikyta, 84 Neb. 808 65, 75, 257 Berenson v. London Ins. Co., 201 Mass. 172 22 Berg v. Abbott, 83 Pa. St. 177 151 Berkley v. Tinsley, 88 Va. 1001, 1004 69 Berry v. Robinson, 9 Johns. 121 29, 88 Biegler v. Merchants' Loan and Trust Co., 62 111. App. 560. . . 24 Bigge v. Piper, 86 Tenn. 589 27 Bigley's Admr. v. Cluff, 16 Gratt. 284, 291, 292 183 Binghamton Phar. v. First Nat. Bank, 131 Tenn. 711 162 Bird v. Kay, 40 App. Div. 533 124 Birrell v. Dickerson, 64 Conn. 61 112 Bisbing v. Graham, 14 Pa. St. 4 82 Bishop v. Chase, 156 Mo. 158 76 v. Dexter, 2 Conn. 419 29 Black v. First National Bank of Westminster, 96 Md. 399. .71, 114 v. Ridgway, 131 Mass. 80 67 Blackman v. Lehman, 63 Ala. 547 31, 75, 134 v. Nearing, 43 Conn. 60 151 Blaine v. Bourne, 11 R. I. 119 79 Blair v. Wilson, 28 Grat. 170 247 Blakeslee v. Hewett, 16 Wis. 341 146 Blenderman v. Price, 50 N. J. Law, 296 196 Block v. Bell, 1 M. & R. 149 49 Board of Education v. Fonda, 77 N. Y. 350, 362 199 Boehm v. Sterling, 7 T. R. 423, 430 96 Boetcher v. Colorado National Bank, 15 Colo. 16 254 Bogarth v. Breedlove, 39 Tex. 561 210 Bond v. Farnham, 5 Mass. 170 156, 185 v. Storrs, 13 Conn. 416 140 Born v. First National Bank, 123 Ind. 78. 253 Borough of Montvale v. Peoples Bank, 74 N. J. L. 464 3, 45 Boston Bank v. Hodges, 9 Pick. 420. 151 Boston Steel & Iron Co. v. Steuer, 183 Mass. 140 40. 96 XXX TABLE OP CASES. PAGI Boswell v. Citizens Savings Bank, 123 Ky. 485 248 Bothell v. Schweister, 84 Neb. 271 219 Bowen v. Newell, 8 N. Y. 100; 13 N. Y. 390 248 Bowles v. Harding, 20 Mass. 103 33 Boyd v. Bank of Toledo, 32 Ohio St. 526 156 v. McCann, 10 Md. 118 38, 114 v. Orton, 16 Wis. 495 175 Boyd's Admr. v. City Savings Bank, 15 Gratt. 501 173, 175 Brackett v. Mountford, 11 Me. 115 211 Bradley Engrav. Co. v. Heyburn, 56 Wash. 628 113, 72, 119 Brady v. Brady, 110 Md. 656 118 Brailsford v. Williams, 15 Md. 151 168 Brainerd v. N. Y. & H. R. R. Co., 25 N. Y. 496 27 Bramhall v. Atlantic National Bank, 36 N. J. Law, 243 112 Brandt v. Mickle, 26 Md. 436 156 Bray v. Hadwen, 5 Maule & Sel. 68 181 Breekhill v. Randall, 102 Ind. 528 257 Breed v. Hillhouse, 7 Conn. 523 167 Breneman v. Furniss, 90 Pa. St. 1S6 66, 135 Breuner v. New Universal Fertilizer Co., 218 Mass. 300 64 Brewster v. Arnold, 1 Wis. 264 171, 186 v. McCardle, 8 Wend, 478 35, 95 v. Sehrader, 26 Misc. (N. Y.) 480 63 Bridgeport City Bank v. The Empire Stone Dressing Co., 30 Barb. 421 69 Bridgeport City Bank v. Welsh, 29 Conn. 475 61 Bridgewater v. Spies, 130 N. W. Rep. Iowa, 928 30 Briggs v. Partridge, 64 N. Y. 363 51 Bright v. Offleld, 81 Wash. 442 13, 14, 16, 18, 21, 23 Brill v. Jefferson Bank, 159 App. Div. 461 170 v. Turtle, 81 N. Y. 454, 457 213 Co. v. Norton & Taunton St. Ry. Co., 189 Mass. 431 69 Brinden v. Muskegon Sav. B£.nk, 140 N. W. Rep. 549 24 Bringman v. Von Glahn, 71 App. Div. 537 60, 66 Bristol v. Warner, 19 Conn. 7 21, 27, 245 Broadway Nat. Bank v. Hefferman, 220 Mass. 247 207, 209 Broadway Trust Co. v. Manheimer, 47 Misc. 465 Ill Broekway v. Allen, 17 Wend. 40 224 Broderiek & B. R. Co. v. McGrath, 81 Mise. 199 63, 117 Brooks v. Sullivan, 129 N. C. 190 61, 63, 64 Brown v. Bank of Abington, 85 Va. 95 173 v. Brown, 91 Misc. 220 4 96 v. Butchers' and Drovers' Bank, 6 Hill, 443 11, 12, 33 TABLE OF CASES. XXXI PAGK Brown v. Citizens Bank, 185 Ala. 221 115 v. Cow Creek Sheep Co., 21 Wyo. 1 18 v. Curtiss, 2 N. Y. 225 167 v. Davis, 3 T. R. 80 96 v. Hull, 33 Gratt. 23 29, 87, 88 v. Maffey, 15 East, 222 156 v. Marmaduke, 248 Pa. St. 247 206 Browne v. Philadelphia Bank, 6 S. & R. 484 233 Brownell v. Winnie, 29 N. Y. 400 210 Bryant v. Eastman, 7 Cush. Ill 86 v. La Banque du Peuple (1893), App. Cas. 170 55 v. Taylor, 19 Minn. 396 186 Buchanan v. Wren, 30 S. W. Rep. 1077 20 Buck v. Freehold Bank, 37 N. J. Law, 307 158 Buckner v. Finley, 2 Peters, 586 214 Builders Lime & Cement Co. v. Weimer, 151 N. W. Rep. 100. . . 207 Building & Eng. Co. v. Northern Bank, 206 N. Y. 400 72 Bull v. Bank of Kasson, 123 U. S. 105 247 Burgess v. Vreeland, 4 Zab. 71 178 Burgettstown National Bank v. Nill, 213 Pa. St. 456 157 Burner v. New Universal Fertilizer Co., 218 Mass. 300 65 Burr v. Beckler, 264 111. 230 44 Burrows v. Klunk, 70 Md. 451 40 Burroughs v. Moss, 10 Barn. & Cress. 558 113 Burson v. Huntington, 21 Mich. 416 44, 46 Burwell v. Gaylord, 119 Minn. 426 133 Bush v. Gilmore, 45 App. Div. (N. Y.) 89 139 Buzzell v. Tobin, 201 Mass. 1 45 Cabot Bank v. Morton, 4 Gray, 156 137 v. Warner, 92 Mass. 522 169 Cady v. Bradshaw, 116 N. Y. 188 156 Callahan v. Kentucky Bank, 82 Ky. 231 176 v. Louisville Dry Goods Co., 140 Ky. 712. .90, 91, 94, 116 Camley v. Dunn, 167 N. C. 32 247 Camden National Bank v. Fries-Breslin Co., 214 Pa. St. 395. . 65 Campbell v. Fourth Nat. Bank, 137 Ky. 555 116 v. French, 6 T. R. 200 191 Canajoharie National Bank v. Diefendorf, 123 N. Y. 191. .103, 115 Canal Bank v. Bank of Albany, 1 Hill, 287 ]28 Cantrell v. Davidson, 180 Mo. App. 410 194 Caras v. Thalmann, 138 App. Div. 297 242, 244 Carnegie Trust Co. v. First Nat. Bank, 213 N. Y. 301 252 Carnwright v. Gray, 127 N. Y. 92 21, 30, 245 XXxii TABLE OF CASES. PAGE Carpenter v. National Bank of the Republic, 106 Pa. St. 170. . 68 .Carr v. Leferre, 27 Pa. St. 413 12 Carroll v. Sweet, 128 N. Y. 19 249 Carsey v. Swan, 150 Ky. 473 16 Carter v. Burley, 9 N. H. 558 233 v. Butler, 264 Mo. 306 60, 66, 75, 90 v. Wolf, 1 Heisk, 674 53 Cary v. White, 52 N. Y. 138 61, 198, 199 Case v. Bridger, 133 La. 754 ' 195 v. Bevet, 15 Mich. 82 221 Casco National Bank v. Clark, 139 N. Y. 307 53 Casper v. Kuhne, 159 App. Div. 389 244 Cayuga County Bank v. Bennett, 5 Hill, 236 175 v. Hunt, 2 Hill, 635 152, 177 v. Warden, 1 N. Y. 413 171 v. Warden, 6 N. Y. 19 170, 172 Cecil Bank v. Farmers' Bank, 22 Md. 148 79 Cedar Rapids Nat. Bank v. Bashara, 39 Okla. 482 87 Cellers v. Meachem, 49 Ore. 186 119 Central Bank v. The Empire Stone Dressing Co., 26 Barb. 23, 69 National Bank v. Cobb, 184 Mass. 328 58 v. Dreydoppel, 134 Pa. St. 499 126 v. Stoddard, 83 Conn. 332 180 R. R. Co. v. The First National Bank of Lynchburg, 73 Ga. 384 79 Trust Co. v. Smurr, 191 111. App. 613 70 Century Bank v. Breitbart, 89 Misc. 308 4, 182 Chadsey v. Guion, 97 N. Y. 333 48 Champion v. Gordon, 70 Pa. St. 474 248 Chandler v. Drew, 6 N. H. 469 114 v. Hedrick, 187 Mo. App. 664 46 Chamoine v. Fowler, 3 Wend. 173 168 Chapman v. Keene, 3 Adol. & Ellis, 193 168 v. White, 6 N. Y. 412 242 Charles v. Dennis, 42 Wis. 56 133 Chase National Bank v. Faurot, 149 N. Y. 532 27 Chateau Tr. & Banking Co. v. Smith, 133 Ky. 418 113 Cheeney v. Libby, 134 U. S. 68 162 Cheever v. Pittsburgh, Shenango & Lake Erie R. R. Co., 150 N. Y. 59 103 Chelsea Exchange Bank v. First U. P. Church, 89 Misc. 616.54, 86 Chemical National Bank v. Kellogg, 183 N. Y. 92.... 87, 105, 111 Cherokee Nat. Bank v Union Trust Co., 33 Okla. 342 4, ]21 TABLE OP CASES. XXxiil PAGE Chestnut v. Chestnut, 104 Va. 539 39 Chicago, etc., R. E. Co. v. West, 37 Ind. 211 189 Railway Equipment Co. v. Merchants' National Bank, 136 U. S. 268 17 Chicopee Bank v. Chapin, 8 Mete. 40 65 Chipman v. Tucker, 38 Wis. 43 45 Chouteau v. Webster, 6 Mete. 1 183 Christian v. Keene, 80 Va. 369 122 Church v. Clark, 21 Pick. 309 151 v. Howard, 17 Hun, 5 216 v. Stevens, 107 N. Y. Supp. 310 27 v. Stevens, 56 Misc. 572 140 Chyrsler v. Griswold, 43 N. Y. 209 28 Cincinnati H. & D. R. R. Co. v. Metropolitan National Bank, 54 Ohio St. 60 254 Cincinnati Oyster & Fish Co. v. National Lafayette Bank, 51 Ohio St. 106 253 Citizens' Bank v. Crittenden Record Press, 150 Ky. 634 109 v. First National Bank, 135 Iowa, 605 144, 167 Central Nat. Bank v. New Amsterdam Nat. Bank, 128 App. Div. 554 150 Citizens' Bank v. Lay, 80 Va. 436 151, 202 National Bank v. Richmond, 121 Mass. 110 207 v. Williams, 174 Pa. St. 66 206 Citizens' State Bank v. Cowles, 180 N. Y. 340 98 89 App. Div. 281 97, 104 City Bank of Sherman v. Weiss, 68 Tex. 332 79 Deposit Bank v. Green, 130 Iowa, 384 97, 98 of Adrian v. Citizens' Central Nat. Bank, 180 Mich. 171, 108 Clapp v. Rice, 13 Gray, 403. 134, 135 Clark v. Cock, 4 Bast, 72 217 v. Seabright, 135 Pa. St. 173 102 v. Sigourney, 17 Conn. 520 74 v. Pierce, 215 Mass. 552 28 Clayton Site Co. v. Clayton Drug Co., 147 Pac. Rep. 460.213, 217 Clemens v. Staunton Co., 61 Wash. 419 215 Cline v. Miller, 8 Md. 274 67, 225 Clutton v. Attenborough (1895), 2 Q. B. 707 32 Coddington v. Bay, 20 Johns. 637 61, 63 v. Davis, 1 N. Y. 186 186 Coffin v. Tevis, 164 App. Div. 314 303 Cogswell v. Hayden, 5 Ore.' 22 126 Cole Banking Co. v. Sinclair, 34 Utah, 454 117 XXXIV TABLE OF CASES. PAGE v. dishing, 8 Pick. 48 197 v. Harrison, 167 App. Div. 336 106 Coleman v. Carpenter, 9 Pa. St. 178 176 Collins v. Gilbert, 94 U. S. 753 115 Colonial National Bank v. Duerr, 108 App. Div. 215 207, 209 Co)*- v. Noble, 5 Mass. 167 168, 181 Columbia Distilling Co. v. Keen, 151 App. Div. 128 209 Knickerbocker Trust Co. v. Miller, 156 App. Div. 810, 150 v. Miller, 215 N. T. 191.. 195 Columbian Banking Co. v. Bowen, 134 Wis. 218. . .4, 144, 150, 250 Comer v. Dufour, 95 Ga. 376 249 Commercial Bank of Kentucky v. Varnum, 49 N. Y. 269.214, 231 234 & Farmers' Nat. Bank v. First Nat. Bank, 30 Md. 11 120 National Bank v. Armstrong, 148 U. S. 50 79 v. Cititzens' State Bank, 132 Iowa, 706 62 v. Hamilton National Bank, 42 Fed. Rep. 880 79 v. Henninger, 105 Pa. St. 496 161 v. Hughes, 17 Wend. 94 161 v. Simpson, 90 N. C. 469 200 Security Co. v. Jack, 29 N. D. 67 106 v. Zimmerman, 185 N. Y. 210... 7, 141 142, 143 v. Citizens* State Bank, 132 Iowa, 706 92 Commonwealth v. Am. Life Ins. Co., 167 Pa. St. 586 213 Comstock v. Buckley, 141 Wis. 228 195 v. Hier, 73 N. Y. 269 61 Conant v. Johnston, 165 Mass. 450 115 Condon v. Pearce, 43 Md. 83 131 Congress Brewing Co. v. Habenieht, 83 App. Div. 141 185 Connors v. Taylor, 13 Wis. 224 125 Conover v. Stillwell, 34 N. J. Law, 54 61 Corrugating Co. v. Taylor, 95 Kans. 562 220 Consolidation National Bank v. Kirkland, 99 App. Div. 121.97, 98 Continental Life Insurance Co. v. Barber, 50 Conn. 567 186 v. Townsend, 87 N. Y. 8 97 v. Tradesmen's National Bank 36 App. Div. 112 121 TABLE OF CASES. XXXV PAGE Cook v. American Tubing and Webbing Co. (E J.), 65 Atl. Rep. 641 116 v. Baldwin, 126 Mass. 317 217 v. Foraker, 193 Pa. St. 461 179 v. Litchfield, 9 N. Y. 279 172 v. Warren, 88 N. Y. 37 187 Cooke v. State National Bank, 52 N. Y. 96 251 Coolidge v. Brigham, 5 Mete. 68 128 v. Ruggles, 15 Mass. 387 21 Corbett v. Fetzer, 47 Neb. 269 81 Corlies v. Howe, 11 Gray, 125 66 Corn Exchange Bank v. American Dock & Trust Co., 149 N. Y. 174 12 Coruth v. Walker, 8 Wis. 252 233 Costello v. Crowell, 127 Mass. 293 25 Coster v. Thomason, 19 Ala. 717 175 Cottrell v. Watkins, 89 Va. 801 69, 96, 203 Couch v. Waring, 9 Conn. 261 197 Coulter v. Richmond, 59 N. Y. 478 126 County of Beaver v. Armstrong, 44 Pa. St. 63 12 Cover v. Meyers, 75 Md. 406 114, 133 Covert v. Rhodes, 48 Ohio St. 66 254 Cowan v. Ramsey, 15 Ariz. 533 200 Cowee v. Cornell, 75 N. Y. 91 66 Cowing v. Altman, 71 N. Y. 441 35 Cowles v. Harts, 3 Conn. 522 81 v. Horton, 3 Conn. 523 172 v. Peck, 55 Conn. 251 158 Cowton v. Wickersham, 54 Pa. St. 302 121 Cox & Sons Co. v. Northampton Brewing Co., 245 Pa. St. 418. 70 Cox v. Citizens' State Bank, 73 Kans. 789 250 v. National Bank, 100 U. S. 713 140 Crandall v. Rollins, 83 App. Div. 618 54 Craig v. Pala Alto Stock Farm, 16 Idaho, 701 76, 80, 85, 114 Crawford v. Millspaugh, 13 Johns. 87 199 v. Roberts, 8 Ore. 324 195 v. West Side Bank, 100 N. Y. 50, 56 209 Credit Company v. Howe Machine Co., 54 Conn. 357 103 Crim v. Starkweather, 88 N. Y. 339 146 Critchlow v. Parry, 2 Camp. 182 131 Critten v. Chemical Nat. Bank, 171 N. Y. 219 40 Croft's Appeal, 42 Conn. 154 103 Curtis v. Davidfwn, 215 N. Y. 395 113, 133, 158 XXXVi TABLE OF CASES. PAGE Cromwell v. County of Sac, 96 U. S. 60 112 v. Hynson, 2 Camp. 596 146 Crosby v. Roub, 16 Wis. 616 75 Crout v. DeWolf, 1 R. I. 393 58 Crowley v. Barry, 4 Gill. 194 152 Cruger v. Armstrong, 3 Johns. 5 247 Culbertson v. Nelson, 93 Iowa, 187 14 Culver v. Reno Real Estate Company, 91 Pa. St. 367 70 Cumberland Bank v. Hann, 3 Harr. 222 88, 114 Cummmings v. Kohn, 12 Mo. App. 585 80 Cunningham v. Scott, 90 Hun, 410 103 Curran v. Witter, 68 Wis. 16 246 Cuyler v. Stevens, 4 Wend. 566 171 Dalrymple v. Hillenbrand, 62 N. Y. 5 131 Daniel v. Glidden, 38 Wash. 556 53 Dann v. Norris, 24 Conn. 337 74 Dart v. Sherwood, 7 Wis. 523 50 Darwin v. Rippey, 63 N. C. 318 210 Davenport v. Palmer, 152 App. Div. 761 252, 253 Davis v. Clark, 85 N. J. L. 696 103 v. First Nat. Bank, 62 So. Rep. 261 34 v. First Nat. Bank of Blakley, 68 So. Rep. 261 75 v. Garr, 6 N. Y. 124 31 v. McCall, 176 Mo. App. 198 16 v. Miller, 14 Gratt. 1 96, 114, 202 v. Old Colony Railroad Company, 131 Mass. 258 69 v. Schmidt, 126 Wis. 461 153 v. Wait, 12 Oregon, 425 67 Sewing Machine Co. v. Best, 105 N. Y. 59 41 Dawson v. Wombles, 123 Mo. App. 340 60 Day v. Ridgway, 17 Pa. St. 303 133 Deahy v. Choquet (R. I.), 67 Atl. Rep. 421 126 Debedian v. Gala, 64 Md. 262 35 Deering v. Creighton, 19 Ore. 118 126 De Houst v. Lewis, 128 App. Div. 131 249, 250 DeGroat v. Focht, 37 Okla. 267 22 De la Torre v. Barclay, 1 Stark. 308 191 DeLaVergne v. Globe Printing Co., 148 Pac. Rep. 922 150 Delaware County Trust Co. v. Title Ins. Co., 199 Pa. St. 17 200 Demelman v. Brazier, 193 Mass. 458 4, 192 Denninger v. Miller, 7 App. Div. 409 174 Denniston v. Stewart, 17 How. (U. S.) 606 231 TABLE OP OASES. XXXVU PAGE Deposit Bank of Georgetown v. Payette National Bank, 90 Ky. 10 121 Derham v. Donohue, 155 Fed. Rep. 385 171, 172 Des Moines Savings Bank v. Arthur, 163 Iowa, 205 21 Dewees v. Middle States Coal & Iron Co., 248 Pa. St. 202 140 De Witt v. Walton, 9 N. Y. 574 51 Deyo v. Thompson, 53 App. Div. (N. Y.) 12 245 Dickens v. Beal, 10 Pet. 572 153 v. Hall, 87 Pa. St. 379, 380 183 Dier v. Bank, 129 Tenn. 89 199 Dietrich v. Boylie, 23 La. Ann. 767 15 Dillenbeek v. Bygert, 97 N. Y. 303 203 Dillon v. Bron, 150 Pac. Rep. 553 154 Dominion Trust Co. v. Hildner, 243 Pa. St. 253 140 Dinsmore v. Duncan, 57 N. Y. 573 27 Dodd v. Denny, 6 Oregon, 156 29 v. Jette, 10 Oregon, 31 247 Dodson v. Taylor, 56 N. J. Law, 11 172, 174 Dolph v. Rice, 18 Wis. 397 248 ' Dorsey v. Wellman, 85 Neb. 262 8 v. Wolff, 142 111. 589 15 Dotson v. Owsley, 141 Ky. 452 8 Doubleday v. Kress, 50 N. Y. 410 146 Dounes v. Church, 13 Peters, 205 243 Downey v. O'Keefe, 26 R. I. 571 4 Draper v. Clemens, 7 Mo. 52 149 Dresser v. Missouri, etc., R. R. Construction Co., 93 U. S. 95 . . 101 Drew v. Towle, 7 Frost, 412 67 Drum v. Drum, 133 Mass. 566 208 Du Bosque v. Munroe, 168 App. Div. 821 59 Ducket v. Von Lillienthal, 11 Wis. 56 233, 234 Dull v. Bricker, 76 Pa. St. 255 219 Dunbar Box & L. Co. v. Martin, 53 Misc. 312 55 Dunbrow v. Gelb, 72 Misc. 400 209 DuPont de Numour Powder Co. v. Rooney, 63 Misc. 344 183 Durkin v. Cranston, 7 Johns. 442 242 Dye v. Scott, 35 Ohio St. 194 186 Dykman v. Northridge, 1 App. Div. 26 150, 235 Easterly v. Barber, 66 N. Y. 433 134,135 Eaton v. Libbey, 165 Mass, 218 61 v. McMahon, 42 Wis. 484 133,155 Eckert v. Cameron, 7 Wright, 120 194 XXXV111 TABLE OF CASES. PAOB Edelen v. White, 6 Bush. 408 135 Edelman v. Rams, 58 Misc. 561 247 Edgerton v. Edgerton, 8 Conn. 6 27 Edis v. Bury, 6 Barn. & Cress. 433 49 Egbert v. Hanson, 34 Misc. 597 134 Eilbert v. Finkbeiner, 68 Pa. St. 243 126 Eisenberg v. Lef kowitz, 142 App. Div. 570 115 Electric Mfg. Co. v. Hodge, 181 Mo. App. 232 190 Elgin City Banking Co. v. Hall, 108 S. W. Rep. 1068.62, 81, 97, 98 Elias v. Whitney, 50 Misc. 326 95 Elk Valley Coal Co. v. Third Nat. Bank, 157 Ky. 617 64, 65 Ellicott v. Martin, 6 Md. 509 93, 115 Elliot v. Chestnut, 30 Md. 562 38 Ellis v. Ins. Co., 4 Ohio St. 628 121 Elmore County Bank v. Avaunt, 66 So. Rep. 509 98 Emanuel v. Misicki, 149 N. Y. Supp. 905 110 Emm v. Carroll, 1 Yerger, 144 53 Ensign v. Fogg, 177 Mich. 317 98, 210, 123, 206 Epler v. Funk, 8 Pa. St. 468 81 Equitable Trust Co. v. Taylor, 146 App. Div. 424 18 Ernst v. Steckman, 74 Pa. St. 13 20 Espy v. Bank of Cincinnati, 18 Wall. 620 247 Estate of Chismore, 166 Iowa, 217 12, 52 Etting v. Schuykill Bank, 2 Pa. St. 355 172, 181 Evans v. Freeman, 142 N. C. 61 76 Ewing v. Citizens' Nat. Bank, 162 Ky. 551 218 Exchange Bank v. Robinson, 185 Mo. App. 582 40 Ex Parte Barclay, 7 Ves. 597 168 Goldberg v. Lewis, 76 So. Rep. 839 4, 96 Moline, 19 Ves. 216 176 Fair v. Howard, 6 Nev. 304 61 Faircloth-Byrd Merc. Co. v. Adkinson, 167 Ala. 344 217 Fairfield Nat. Bank v. Hammer, 95 Atl. Rep. 31,207 96 Falkill National Bank v. Sleight, 1 App. Div. 189 199 Fall River Union Bank v. Willard, 5 Metclf. 216 149 Fancourt v. Thome, 9 Q. B. 312 23 Farmers' Bank v. Ewing, 78 Ky. 264 180 Bank v. First Nat. Bank, 164 Ky. 548 103 Bank v. Sprigg, 11 Md. 390 197 etc., Bank v. Troy City Bank, 1 Dough. 457 85 and Mechanics' Bank v. Butchers' and Drovers' Bank, 16 N. Y. 125 69 TABLE OF CASES. XXXIX PAGE Fanners' and Mechanics' Bank v. Empire Stone Dressing Co., 5 Bosw. 275 69, 251 and Merchants' Bank v. Bank of Rutherford, 115 Tenn. 64 83, 131 Loan & Trust Co. v. Planck, 152 N. W. Rep 390. .. . 13 Nat. Bapk v. Farmers' Bank of Maysville, 15D Ky. 141 120 National Bank v. Venner, 192 Mass. 531 140 Farnsworth v. Allen, 4 Gray, 453 146 v. Burdick, 94 Kans. 749 ' 76 Farquhar Co. v. Higham, 16 N. D. 106 5, 127 Far Rockaway Bank v. Norton, 186 N. Y. 484 126 Fassler v. Streit, 92 Neb. 786 8 Fassin v. Hubbard, 55 N. Y. 465 81, 174 Feigenspan v. McDonnell, 201 Mass. 341 175 Felt v. Bush, 41 Utah, 467 64 Ferguson v. Netter, 141 App. Div. 274 66 Fidelity Trust Co. v. Ellen, 163 N. C. 545 116 v. Whitehead, 165 N. C. 74 116 Field v. Nickerson, 13 Mass. 131 100 Fifth "Ward Savings Bank v. First National Bank, 48 N. J. Law, 513 103 Fifth Nat. Bank v. McCrory, 177 S. W. Rep. 1058 05 Finch v. Calkins, 183 Mich. 298 151, 88 Finley v. Smith, 177 S. W. Rep. 262 24, 52 Filton v. The Miller Brewing Co., 38 N. Y., St. Rep. 602 69 First Bank of Notasulga v. Jones, 156 App. Div. 277 132 Nat. Bank v. Baker, 163 App. Div. 72 141, 185 v. Buckhannon Bank, 80 Ind. 475 249 v. Bynum, 84 N. C. 24 15 v. Bank of Cottage Grove, 59 Ore. 388 120 v. Bertoli, 88 Vt. 421 8 v. Bickel, 143 Ky. 757 123, 76 v. Clark, 61 Md. 400 220 v. Falkenham, 94 Cal. 141 186 v. Fleitmann, 168 App. Div. 75 16 v. Gray, 63 Mo. 38 15 v. Gridley, 112 App. Div. 398 84, 131, 208, 210 v. Hall, 44 N. Y. 395 85 v. Harris, 7 Wash. 139 199, 203 v. Home Ins. Co., 16 N. M. 66 215 v. Larsen, 60 Wis. 206 15 v. Lewis, 57 Colo. 125 13 Xl TABLE OF CASES. PAGE First Nat. Bank v. Maxfield, 83 Me. 576 203 v. Meyer, 152 N. W. Rep. 657 5, 119, 200 v. Michael, 96 N. C. 53 17 v. Miller, 139 Wis. 126 4, 16 v. Moore, 148 Fed. Kep. 953 115 v. Muskogee Pipe Lime Co., 40 Okla. 603.218, 220 v. Northwestern National Bank, 152 111. 296 252 v. Peltz, 176 Pa. St. 513 197 v. Ricker, 71 111. 439 121 v. Bobbins, 168 N. C. 473 48 v. Scoggins, 41 Okla. 719 210 v. Schreiner, 110 Pa. St. 188 186 v. Stallo, 160 App. Div. 702 46, 59, 93 v. Stam, 186 Mo. App. 436 16, 90 v. Starr Watch Case Co., 153 N. W. Rep. 722 179 v. Tustin, 246 Pa. 151 187 v. Wallis„ 150 N. Y. 455 53 v. Whitman, 94 U. S. 343 254 v. Williams, 164 Ky. 143 166 v. Wood, 71 N. Y. 405 158 of Champlain v. Woods, 128 N. Y. 35 114 Danvers v. First National Bank of Sa- lem, 151 Mass. 280 121 Elgin v. Russell, 124 Tenn. 618 22, 26 Hutchinson v. Lightner, 74 Kans. 736 . 17 Louisville v. Bickel, 154 Ky. 11 166 Murfreesboro v. First Nat. Bank of Nashville, 154 S. W. Rep. 965.218, 221, 227 Omaha v: Whitmore, 177 Fed. Rep. 397 222, 227 Pomeroy v. Buttery, 17 N. D. 326. .22 85 90 Portland v. Linn County National Bank, 30 Oregon, 296 249 Union Mills v. Clark, 134 N. Y. 368. . 254 Wilkesboro v. Barnum, 160 Fed. Rep. 245 41 Wymore v. Miller, 43 Neb. 791 249 First State Bank v. Williams, 164 Ky. 143 4, 119, 200, 208 Firth v. Thrush, 8 Barn. & Cress, 387 174 Fisher v. Fisher, 98 Mass. 303 61, 65 Fishburn v. Lauderslausen, 50 Ore. 364 91 TABLE OF CASES. xli PAGE Fisher v. 'Hanlon, 93 Neb. 529 21 Fitchburg Bank v. Greenwood, 2 Allen 434 81 Fitzgerald v. Booker, 96 Mo. 661 61 Flagg v. School District, 4 N. D. 30 14 Florence Mills Co. v. Brown, 124 U. S. 385 254 Florence Oil Co. v. First National Bank, 38 Colo. 119 140 Foland v. Boyd, 23 Pa. St. 476 175 Folger v. Chase, 18 Pick. 63 75, 85 Fonner v. Smith, 31 Neb. 107 254 Fonseca v. Hartman, 84 N. Y. Supp. 131 183, 187 Ford v. Mitchell, 15 Wis. 304 28 Forest v. Safety Banking & Trust Co., 174 Fed. Rep. 345 246 Foster's Adm'r v. Metcalf, 144 Ky. 385 90 Foster v. Hill, 36 N. H. 526 84 Fourth National Bank v. Henschuk, 25 Mo. 207... 152, 175 Fourth Nat. Bank v. Snead, 216 Mass. 521 123, 126 Street National Bank v. Yardley, 165 U. S. 634 254 Fowler Paper Co. v. Great Jones S. B. Co., 183 111. App. 310. . 146 Fox v. Rural Home Co., 90 Hun, 365 70 Frampton v. Coulson, 1 Wils. 33 139 France v, Schiro, 136 La. 842 66 Frank v. Lillienfeld, 33 Gratt. 377 38, 103 Franklin Bank v. Roberts, 168 N. C. 473 62 v. Lynch, 52 Md. 270 220 v. Twogood, Iowa, 515 76 Frazee v. Phoenix Nat. Bank, 161 Ky. 175 142, 166 Frazer v. D'Quiller, 2 Pa. St. 200 12 Frederick v. Spokane Grain Co., 47 Wash. 85 217 Freeman v. Boynton, 7 Mass. 483 149 Freeman's Bank v. National Tube Works, 151 Mass 413 79 Freese v. Brownell, 35 N. J. Law, 285 87 French v. Bank of Columbia, 4 Cranch, 141 190 v. Jarvis, 29 Conn. 347 202 v. Turner, 15 Ind. 59 76 Fridenberg v. Robinson, 14 Fla. 130 199 Friend v. Wilkinson, 9 Gratt. 31 179 Frits v. Kirchdorfer, 136 Ky. 643 119 Fuller v. Green, 64 Wis. 159 211 Fulton v. MacCracken, 18 Md. 528 232 Fund v. Lewis, 34 Fla. 424 242 Gahren v. Parkersburg Nat. Bank, 157 Ky. 266 151 Galbraith v. Shepard, 43 Wash. 698 140, 157, 167 Garland v. Salem Bank, 9 Mass. 408 185 Slii TABLE OF CASES. PAGI Garnett v. Woodcock, 1 Starkie, 475 150 Garrard v. Hadden, 67 Pa. St. 82 40 v. Lewis, L. R. 10 Q. B. Div. 30 39, 47 Garvin v. Wiswell, 83 111. 218 75, 134 Gates v. Beecher, 60 N. T. 518 147, 152, 175 City Bank v. Schmidt, 167 Mo. App. 153 8 Gawkins v. De Loraine, 3 Wills, 207 19 Gawtry v. Doane, 48 Barb. 148 184 Gaylord v. Van Loan, 15 Wend. 308 29 Geary v. Physic, 5 Barn & Cress. 234 11 Gennis v. Weighley, 114 Pa. St. 194 197 Georgia National Bank v. Henderson, 46 Ga. 496 248 German- American Bank v. Cunningham, 97 App. Div. 244. .103, 115 v. Mills, 99 App. Div. 312 7, 142, 143 v. Millwan, 31 Misc. 87 151 v. Niagara Cycle Co., 13 App. Div. 450 158, 199 v. Wright, 148 Pac. Rep. 769 64 State Bank v. Lyons, 127 Minn. 390 64 National Bank v. Forman, 138 Pa. St. 474 161 George v. Bacon, 138 App. Div. 208 135 Germania National Bank v. Mariner, 129 Wis. 544 49 v. Tooke, 101 N Y. 442 219 Gettysburg National Bank v. Chisholm, 169 Pa. St. 564. .206, 207 209 Giffert v. West, 37 Wis. 115 128 Gifford v. Hardell, 88 Wis. 538 249 Gilbert v. Adams, 146 App. Div. 864 21 Gill v. Palmer, 29 Conn. 57 171 Gilley v. Harrell, 118 Tenn. 115 '. 13 Gilmore v. Wilbur, 12 Pick. 124. : 7 Gilpin v. Savage, 201 N. Y. 167 149 Giovanovich v. Citizens' Bank, 26 La. Ann. 15 61 Glaser v. Rounds, 16 R. I. 235 184 Gleason v. Hamilton, 138 N. Y. 353 ... 207 v. Thayer, 87 Conn. 248 5, 80, 167, 181, 187 Glennan v. Rochester Trust & S. D. Co., 209 N. Y. 12 250 Glidden v. Chamberlain, 167 Mass. 486 87, 131 Gloucester Bank v. Worcester, 10 Pick. 528 197 Goldman v. Goldberger, 208 Fed. Rep. 877 135 Good v. Martin, 95 U. S. 93 125 Goodner v. Maynard, 7 Allen, 456 200, 202 Gcmdnow v. Warren, 122 Mass. 82 175 TABLE OF CASES. xliii PAGB Goolrick v. Wallace, 154 Ky. 596 81 Gordon v. Levine, 194 Mass. 418 Ill, 145, 250 Goshen National Bank v. Bingham, 118 N. Y. 349 91 Gosling v. Griffin, 85 Tenn. 737 164 Goss v. Nelson, 1 Burr. 226 22 Gould v. Eager, 17 Mass. 615 202 Gonpy v. Harden, 7 Taunt. 397 227 Gowan v. Jackson, 20 Johns. 176 „ . . . 227 Gowdey v. Robbins, 3 App. Div. 353 206 Graham v. Smith, 155 Mich. 65 64 County State Bank v. Northwestern Land Co., 28 N. D. 479 52 Grand Bank v. Blanchard, 23 Pick. 305 150 Grange v. Reigh, 93 Wis. 552 249 Grant v. Fleming, 46 Pa. St. 140 81 v. Wood, 12 Gray, 220 21 Gray's Admr. v. Bank of Kentucky, 29 Pa. St. 365 102 Grayson County Bank v. Elbert, 143 Ky. 753 170, 174 Grebe v. Swords, 28 N. D. 330 116 Green v. Gunsten, 154 Wis. 69 Ill Greenfield Savings Bank v. Stowell, 123 Mass. 196 40 Greenwich Bank v. De Groot, 7 Hun, 210 188 Gregg v. Bean, 69 Vt. 22 249 Griffin v. Erskine, 131 Iowa, 444 85 Griffiths v. Kellogg, 39 Wis. 290 45 v. Shipley, 74 Md. 591 115 Grissom v. Commercial Bank, 87 Tenn. 350 161 Greer v. Orchard, 175 Mo. App. 494 99 Griswold v. Davis, 125 Tenn. 229 162 Guano Company v. Marks, 135 N. C. 59 194 Guarantee Co. v. Craig, 155 Pa. St. 343 ' 197 Guerrant v. Guerrant, 7 Va. Law Reg. 637 42 Guild v. Goldsmith, 9 Fla. 212 142, 143 Gunston v. Heat and Power Co., 181 Pa. St. 327 121 Hacket v. First Nat. Bank, 114 Ky. 193 40 Haddock, Blanchard & Co., Inc. v. Haddock, 192 N. Y. 499. 126 127, 136 Hagerty v. Phillips, 83 Me. 336. . . ; 135 Hagey v. Hill, 75 Pa. St. 108 200 Hague v. Davis, 8 Gratt. 4 134 Haines v. Dubois, 29 N. J. Law, 259 74 v. Merrill, 56 N. J. Law, 312 115 Hale v. Danforth, 46 Wis. 554 135, 156 Xliv TABLE OF CASES. PAGB Halifax v. Lyle, 3 Welsby, H. & G. 446 121 Hall v. Auburn Turnpike Co., 27 Cal. 256 69 v. Cordell, 142 U. S. 116 217 v. Crane, 213 Mass. 326 186 v. Toby, 110 Pa. St. 318 29, 76 Hallen v. Davis, 59 Iowa, 444 39 Halliday v. Hart, 30 N. Y. 474 199 v. McDougall, 20 Wend. 81 231, 233 Haly v. Brown, 5 Pa. St. 178, 182 181, 182, 188, 189 Ham v. Merritt, 150 Ky. 11 104 Hamilton v. Dief enderf er, 21 Wyo. 66 60 v. Hamilton, 127 App. Div. 871 246 Hampton v. Miller, 78 Conn. 267 142 Hanna v. McGrory, 141 Pac. Eep. 996 18, 193, 200, 217 Hanover National Bank v. American Dock & Trust Co., 148 N. Y. 612 12 Hansborough v. Gray, 3 Gratt. 340 140 Harger v. Wilson, 63 Barb. 237 112 Harker v. Anderson, 21 Wend. 373 247 Harmon v. Haggerty, 88 Tenn. 705 257 Hardon v. Dixon, 77 App. Div. 241 151 Harris v. Clark, 3 N. Y. 93 213, 247 v. Johnson, 89 Conn. 128 104, 116 v. The Bank of Jacksonville, 20 Fla. 501, 512 206 Harrison v. Ruscoe, 15 L. H. Exch. 110; 15 M. & W. 231. . . . 168 v. Nicollet National Bank, 41 Minn. 488 247, 248 Harrold v. Kays, 64 Mich. 439 61 Hart v. Stickney, 41 Wis. 630 97 Hartford Bank v. Stedman, 3 Conn. 494 188 v. Greenwich Bank, 215 N. Y. 726 33 Hartington Nat. Bank v. Breslin, 88 Neb. 47 4, 39 Hartley v. Carboy, 150 Pa. St. 52 207 Haskell v. Boardman, 8 Allen, 38 185 v. Brown, 65 111. 29 76 v. Jones. 86 Pa. St. 173 257 Hastings v. Thompson, 54 Minn. 184 14 Hathaway v. County of Delaware, 185 N. Y. 374 76, 91, 94 Hawkins v. Young (Iowa), 114 N. W. Rep. 1041 117 Hawley v. Jette, 10 Oregon, 31 , 155 Hayden v. Speakman, 150 Pac. Rep. 292 163 Hayes v. Werner, 45 Conn. 252 142 Haynes v. Birks, 3 Bor. & Pul. 599 168 Heard v. Dubuque Bank, 8 Neb. 10 15 TABLE OF CASES. Xlv PAGE Hegeman v. Moon, 131 N. Y. 462 21 Heise v. Bumpass, 40 Ark. 547 49 Heist v. Hart, 73 Pa. St. 28,6 75 Henderson v. Thornton, 37 Miss. 448 122 Henry Christian Building and Loan Association v. Walton, 187 Pa. St. 201 58 Hentz v. Nat. City Bank, 159 App. Div. 743 251, 254 Herdic v. Roessler, 109 N. Y. 127 256 Hereth v. Meyer, 33 Ind. 511 18 Herker v. Anderson, 21 Wend. 372 248 Herman v. Comles, 119 Md. 41 66 Hermann Lumber Co. v. Djurstrom, 74 Misc. 93 170 Herrick v. Whitney, 15 Johns. 240 128 v. Wolverton, 41 N. Y. 581 ... -. 141 Heuertematte v. Morris, 101 N. Y. 63 63, 122 Hewins v. Cargill, 67 Me. 554 554 Hibbs v. Brown, 190 N. Y. 167 19 Hibernia Bank v. Lacomb, 84 N. Y. 367 140, 246 Hibernia Bank & Trust Co. v. Dresser, 132 La. 532. .21, 22, 24, 123 Hibles v. Guaraglia, 75 N. J. L. 168 126 Hickok v. Bunting, 92 App. Div. 167 60 Hilborn v. Pennsylvania Cement Co., 145 App. Div. 442 12 Hill v. Buchanan, 71 N. J. Law, 301 202 v. Dillon, 176 Mo. App. 192 116 v. Farrell, 3 Greenleaf, 233 188 v. Hall, 191 Mass. 253 45 Hills v. Place, 48 N. Y. 520 139, 140 Hickley v. Merchants' National Bank, 131 Mass. 147 117 Hinsdale v. Miles, 5 Conn. 331 236 Hobbs v. Straine, 149 Mass. 212 187 Hodge v. Wallace, 129 Wis. 84 14 v. Smith, 130 Wis. 326 43, 45, 102, 116 Hodgens v. Jennings, 148 App. Div. 879 124, 136 Hodges v. Shuler, 22 N. Y. 114 26, 171 Hodgins v. Northwestern Finance Co., 148 Pac. Rep. 717 72 Hoffman v. Planters' National Bank, 99 Va. 480 210 Holbrook v. Burt, 22 Pick. 555 7 Holcomb v. Wyckoff, 35 N. J. Law, 38 112 Holdsworth v. Hunter, 10 C. & B. 449 243 Holmes v. Roe, 62 Mich. 109 249 v. Trumper, 22 Mich. 427 40 v. West, 17 Cal. 623 29 Holliday State Bank v. Hoffman, 85 Kas. 71 4, 21, 24 xlvi TABLE OF CASES. PAGE Hollowell v. Curry, 41 Pa. St. 322 150 Holtz v. Boppe, 37 N. Y. 634 147 Holzbog v. Bakrow, 156 Ky. 161 66, 109 Home Insurance Company v. Green, 19 N. Y. 518 172 National Bank v. Newton, 8 Bradwell, 563 161 Savings Bank v. Stewart (Neb.), 110 N. W. Eep. 947. . 164 Homer v. Wallis, 11 Mass. 310 211 Hook v. Pratt, 78 N. Y. 371 79 Hopkins v. Commercial Bank, 64 Fla. 310 123 Hopkinson v. Foster, L. R. 18 Eq. 74 247, 254 Horan v. Mason, 141 App. Div. 89 115 Hornstein v. Cifuno, 86 Neb. 103 48 Horowitz v. Wollowitz, 59 Misc. 520 Ill, 132 Hotchkiss v. First National Bank, 21 Wall. 354 115 v. Fitzgerald Patent, etc., Co., 41 W. Va. 357 61 House v. Vinton Bank, 43 Ohio St. 346 176 Houser v. Fayssoux, 168 N. C. 1 166 Howard v. Boorman, 17 Wis. 459 70 v. Ives, 1 Hill, 263 181 Howe v. Merrill, 15 Cush. 88 134 Howland v. Adrian, 29 N. J. Law, 41 171 v. Carson, 15 Pa. St. 453 220 Hubbard v. Gurney, 64 N. Y. 450 199 v. Matthews, 54 N. Y. 43 175 Huff v. Wagner, 63 Barb. 230 112 Huffuker v. National Bank, 12 Bush. 293 233 Hughes v. Large, 2 Pa. St. 103 114 Humphreys v. Sutcliffe, 192 Pa. St. 336 151 Hungerford v. O'Brien, 37 Minn. 306 167 Hunter v. Allen, 127 App. Div. 572 39, 95 v. Harris, 63 Ore. 505 119, 135, 200 v. Van Bomhurst, 1 Md. 504 172 Hutchinson v. Boggs & Kirk, 28 Pa. St. 294 115 Hutchison v. Cruteher, 98 Tenn. 421 151 Industrial Bank of Chicago v. Bower, 165 111. 70 249 Trust Title and Savings Co. v. Weakley, 103 Ala. 458 249 Ingalls v. Lee, 9 Barb. 647 87 Ingersoll v. Martin, 58 Md. 67 66 In re Bishops' Estate, 195 Pa. St. 85 199 McCord, 174 Fed. Rep. 72 134 Moritz Estate, 239 Pa. St. 375 200 Philpott's Estate, 151 N. W. Rep. 825 95, 142 Young's Estate, 234 Pa. St. 287 129, 132 TABLE OF CASES. xlvii PAGK Insurance Company v. Wilson, 29 W. Va. 543 140 Interboro Brewing Co. v. Doyle, 165 App. Div. 646 103, 115 Interstate Finance Co. v. Schroder, 74 W. Va. 67 66 Iowa State Bank v. Claypool, 91 Kans. 251 38 Ireland v. Floyd, 42 Okla. 609 76 v. Scharpenberg, 54 Wash. 558 90 v. Shore, 91 Kans. 326 16, 117 Iron City Nat. Bank v. Ft. Pitt. Nat. Bank, 159 Pa. St. 46. . . 121 City National Bank v. Eafferty, 207 Pa. St. 238 50 Clad Mfg. Co. v. Sackin, 129 App. Div. 555 147 Isnard v. Torres, 10 La. Ann. 23 40 Ivory v. Bank of the State, 36 Mo. 475 248 Izzo v. Ludington, 79 App. Div. 272 217 Jackson v. Myers, 43 Md. 452 27 v. Richards, 2 Caines, 343 155 Jacobus v. Jamestown, Mantel Co., 211 N. Y. 154, 149 A. D. 356 69, 70, 96 James v. Brown, 11 Ohio, 601 29 Jameson v. Swinton, 2 Taunt. 224 181 Jamieson v. McFarland, 43 Wash. 153 57 Jarnigan v. Stratton, 95 Tenn. 619 175 Jarvis v. Manhattan Beach Co., 148 N. Y. 652 103 v. St. Croix Manufacturing Co., 23 Me. 287 179 v. Wilson, 46 Conn. 91 219 Jefferson Bank v. Chapman, 122 Tenn. 415 104, 107, 112 Jeffrey v. Rosenfeld, 179 Mass. 506 207 Jenkins v. Schnaub, 14 Wis. 1 61 v. White, 147 Pa. St. 303 185 Jenkinson v. Wilkinson, 110 N. C. 532 91 Jennings v. Wall, 217 Mass. 278 72 Jensen v. Wilself, 36 Nev. 37 132, 246 Jerman v. Edwards, 29 App. Cases, D. C. 535 89 Jett v. Standafer, 143 Ky. 787 56 Johnson v. Brown, 154 Mass. 105 180, 233 v. Buffalo Center State Bank (Iowa), 112 N. W. Rep. 165 85 v. Clark, 39 N. Y. 216 220 v. Lassiter, 155 N. C. 47 3, 34 v. Mitchell, 50 Tex. 212 83 v. Ramsey, 43 N. J. Law, 279 135 Johnston v. Hoover, 139 Iowa, 143 38 Jones v. Council Bluffs Branch, etc., 34 111. 313 217 v. Darch, 4 Price, 300 121 Xlviii TABLE OF CASES. PAGE Jones v. Home Furnishing Co., 9 App. Div. 103 119 v. Roberts, 191 Pa. St. 152 185 v. Rodetz, 27 Minn. 240 IE Jordan v. Grover, 99 Cal. 194 115 v. Tate, 19 Ohio St. 586 20 Marsh Co. v. Nat. Shawmut Bank, 201 Mass. 307 33 Joseph v. Solomon, 19 Fla. 623 214, 231 Josephson v. Gens, 85 Misc. 372 204 Joy v. Diefendorf, 130 N. Y. 6 115, 116 Joyce v. Realm Insurance Company, L. R. 7 Q. B. 580 48 Judah v. Harris, 19 Johns. 144 28 Jump v. Sparling, 218 Mass. 324 54, 55 Jurgens v. Wichmann, 124 App. Div. (N. Y.) 531 177, 181, 183 Justice v. Stonecipher, 267 111. 448 116 Kaschner v. Conklin, 40 Conn. 81 203 Keenan v. Blue, 240 111. 177 33 Keene v. Behan, 40 Wash. 505 101, 116 Keifer v. Talbert, 128 Minn. 519 90 Keith v. Jones, 9 Johns. 120 28 Kelley v. Brown, 5 Gray, 108 185 v. Whitney, 45 Wis. 110 35 Kelly v. Burroughs, 102 N. Y. 93 134, 203 Kennedy v. Broderick, 216 Fed. Rep. 137 25 Kenworthy v. Sawyer, 125 Mass. 28 200, 203 Kerby v. Ruegamer, 107 App. Div. 491 54 Kerr v. Anderson (N. D.), Ill N. W. Rep. 614 115 v. Smith, 156 App. Div. 807 12 Keyes v. Feustomacher, 24 Cal. 329 29 Kilcresse v. White, 6 Fla. 45 114 Kilgore v. Bulkley, 14 Conn. 362 170 Kimball v. Bryan, 56 Iowa, 632 153 Kimpton v. Studebaker, 14 Idaho, 552 19 King v. Bellamy, 82 Kans. 301 [ 89 v. Bowling Green Trust Co., 145 App. Div. 398 63 v. Doane, 139 U. S. 166 115 v. Holmes, 11 Pa. St. 456 148 Kingsley v. Sampson, 100 111. 54 48 Kinney v. Kruse, 28 Wis. 183 101 114 117 Kinsley v. Robinson, 21 Pick. 327 153 Kipp v. Smith, 137 Wis. 234 ................ 106 Kirschner v. Conklin, 40 Conn. 77 134 Kiskadden v. Allen, 7 Colo. 206 20 Klar v. Kostiuk, 65 Misc. 199 .110 TABLE OF CASES. xllX PAGtf Klauber v. Biggerstoff, 47 Wis. 551 28 Kniss v. Holbrook, 16 Ind. App. 229 257 Knox v. Eden Musee American Co., 148 N. Y. 454 103 Knoxville Nat. Bank v. Clark, 51 Iowa, 264 40 Koehning v. Muemminghofl, 61 Mo. 403 29 Kohn v. Consolidated Butter and Egg Co., 30 Misc. (N. Y.) 725 127 Konig v. Bayard, 1 Pet. 250 240 Korkemas v. Macsoud, 131 App. Div. 728 194, 195 Kraemer v. Schnitzer, 109 N. E. Rep. 695 38, 40 Kunkel v. Spooner, 9 Md. 462 94 Kushner v. Abbott, 156 Iowa, 598 109 Ladd v. Franklin, 37 Conn. 64 103 Lake Shore National Bank v. Butler Colliery Co., 51 Hun, 63 . . 174 Lambert v. Pack, 1 Salk. 127 131 Land, etc., Co. v. Northwestern Nat. Bank, 196 Pa. St. 230 57 Landis v. White, 127 Tenn. 504 90 Lane v. Hydes, 163 Mo. App. 688 200 v. Stacy, 8 Allen, 41 136 Lankofsky v. Raymond, 217 Mass. 98 147 Lassas v. McCarty, 47 Ore. 474 59, 112 Laubach v. Pursell, 35 N. J. Law, 434 203 Lawrence v. Miller, 16 N. Y. 235 168, 185 Lawson v. First National Bank, 102 S. W. Rep. 324 109 Lazier v. Horan, 55 Iowa, 77 140 Leask v. Dew, 102 App. Div. 529 204 Leather Manufacturers' Nat. Bank v. Morgan, 117 U. S. 96. . 58 Leavitt v. Putnam, 1 Sandf. 199 29 3 N. Y. 494 79 Leavitt v. Thurston, 38 Utah, 351 81, 107, 116 Legg v. Vinal, 165 Mass. 555 192,234 Lehigh Valley Coal v. West Depere Agr. Works, 63 Wis. 45. . 70 Leidy v. Tammany, 9 Watts, 353 143 Lenheim v. Wilmarding, 55 Pa. St. 73 68 Lenox v. Roberts, 2 Wheat, 373 176 Leonard v. Draper, 187 Mass. 536 127, 131 Lehrenkrauss v. Bonnell, 199 N. Y. 240 62 Levy v. Arons, 81 Misc. 165 207 v. Bank of U. S., 4 Dallas, 234 120 v. Ford, 41 La. Ann, 873 61 Lewis v. Brehme, 33 Md. 412 184 Lewisohn v. The Kent and Stanley Co., 87 Hun, 257 33 Lewiston Trust Co. v. Shackford, 213 Mass. 432 116 1 TABLE OF CASES. PAOR Lewy v. Wilkenson, 135 La. 105 123, 160 Liberty Trust Co. v. Tilton, 217 Mass. 462 42, 96 Libby v. Mekelborg, 28 Minn. 38 29 Lichtner v. Roach, 95 Atl. Rep. 62 5, 123 Life Insurance Company v. Pendleton, 112 U. S. 696. .153, 190, 214 Light v. Kingsbury, 50 Mo. 331 , 29 Lill v. Gleason, 92 Kans. 254 203 Lindeman's Exr. v. Guildin, 34 Pa. St. 54 175 Lindsay v. Price, 33 Tex. 280 77 Lindsey v. McClelland, 18 Wis. 481 28, 145 Lines v. Smith, 4 Fla. 47 38 Liniek v. Nutting, 140 App. Div. 265 43, 108 Linn v. Horton, 17 Wis. 150 169, 181 Littauer v. Goldman, 72 N. Y. 506 128, 129 Lloyd v. Oliver, 18 Q. B. 471 49 v. Osborne, 92 Wis. 93 249 v. Sigourney, 5 Bing. 252; 3 M. P. 229 79 Lockwood v. Crawford, 18 Conn. 361 140, 149, 185,199 Logan v. Ogden, 101 Tenn. 392 125 Loizeaux v. Frender, 123 Wis. 193 163 Lomax v. Picot, 2 Rand. 260 82 Lombard v. Byrne, 194 Mass. 236 60 Long v. Rhawn, 75 Pa. St. 128 114 v. Shafer, 185 Mo. App. 641 96 Longmont Nat. Bank v. Lonkenon, 53 Colo. 489 22 Lookout Bank v. Aull, 93 Tenn. 645 85 Lord v. Ocean Bank, 20 Pa. St. 384 68, 118 Losee v. Bissell, 76 Pa. St. 459, 462 95 v. Durkin, 7 J. R. 70 106 Loux v. Fox, 171 Pa. St. 68 249 Low v. Howard, 10 Cush. 159 184, 185 11 Cush. 268 185 Lowell v. Biekford, 201 Mass. 543 64, 94 v. Steward, 25 N. Y. 239 19 Trust Co. v. Pratt, 183 Mass. 379 183 Luckenbach v. McDonald, 184 Fed. Rep. 184, 164 Fed. Rep. 296, 95 C. C. A. 604 154, 191 Lust Co. v. Markel, 179 Fed. Rep. 764 64 Lynchburg Milling Co. v. Nat. Exch. Bank, 109 Va. 639 60 Lyon v. Ewings, 17 Wis. 61 32 v. Phillips, 106 Pa. St. 57 58 Lyons v. Union Exch. Nat. Bank, 150 App. Div. 493 252, 253 MacDonald v. Whitfield, L. R. 8 App. Cas. 733 135 TABLE OF CASES. PAGE Mackay v. St. Mary's Church, 15 R. I. 121 27 Mackintosh v. Gibbs, 81 N. J. L. 37 8 Macleod v. Luce, 2 Stra. 762 17 Madden v. Gaston, 137 App. Div. 294 38 Madison Sq. Bank v. Pierce, 137 N. Y. 444 82 Magee v. Lovell, L. R. 9 C. P. 107 48 Maginn v. Dollar Savings Bank, 131 Pa. St. 362 254 Magoon v. Reber, 76 Wis. 392 106 Maitland v. Citizens' National Bank, 40 Md. 540 61 Mandeville v. Welsh, 5 Wheat. 286 213 Mankey v. Hoyt, 27 S. D. 561 214 Manufacturers', etc., Bank v. Love, 13 App. Div. 561 51 Manufacturers Commercial Co. v. Blitz, 131 App. Div. 17 35 Mannussier v. Wright, 158 111. App. 219 39 Marine National Bank v. National City Bank, 59 N. Y. 67 120 Market and Pulton National Bank v. Sargent, 85 Me. 349 115 Markey v. Casey, 108 Mich. 184 14, 81 Marks v. Boone, 24 Fla. 177 167, 177 v. Munson, 149 Pac. Rep. 440 76 Marling v. Fitzgerald, 138 Wis. 93 114 v. Jones, 138 Wis. 2 '. 67, 71, 72 v. Nommensen, 127 Wis. 363 94, 163 Marsh v. Marshall, 53 Pa. St. 396 96 Marshall v. Burnby, 25 Fla. 619 224 v. Sonneman, 216 Pa. St. 65 170 Martz v. State Nat. Bank, 147 App. Div. 250 84, 90 Martin v. Bank, 94 Tenn. 176 61 L. Hall Co. v. Todd, 139 N. Y. Supp. Ill 63 v. Ingersoll, 8 Pick. 1 189 v. Stone, 67 N. H. 367 21 Maryland Fertilizing Co. v. Newman, 60 Md. 584 15 Mason v. Frick, 105 Pa. St. 162 27 v. Kilcourse, 71 N. J. Law, 472 233 v. Noonan, 7 Wis. 609 87 Maspero v. Pedesclaux, 22 La. Ann. 227 175 Massachusetts Bank v. Oliver, 10 Cush. 557 174 National Bank v. Snow, 187 Mass. 159.34, 45, 107 209 Matlock v. Scheuerman, 51 Ore. 49 100, 105, 116 Matteson v. Moulton, 79 N. Y. 627 222 Mattison v. Marks, 31 Mich. 421 20 Maule v. Crawford, 14 Hun, 193. . , 30 Maurice v. Fowler, 78 Misc. 357 62, 63 lii TABLE OF CASES. PAGE Maxwell v. Agnew, 21 Fla. 154 246 Mayer v. Jadis, 1 M. & Rob. 247 89 Mayers v. McKimmon, 140 N. C. 640 76, 90 McAdam v. Grand Forks Mer. Co., 24 N. D. 645 100 McBride v. Farmers' Bank, 26 N. Y. 450 61 v. El. Nat. Bank, 138 App. Div. 346 192 McCarty v. Roots, 21 How. (U. S.) 432 134 McCarthy v. Kapreta, 24 N. D. 395 5 McCaughey v. Smith, 27 N. Y. 39 220 McClanathan v. Davis, 149 111. App. 654 21 McConeghy v. Kirk, 68 Pa. St. 200 131 McCormick v. Shea, 50 Misc. 592 205 v. Swem, 36 Utah, 6 16 McDaniel v. Pressler, 3 Wash. 636 80 McDonald v. Luckenbach, 170 Fed. Rep. 434 122, 123 v. Magruder, 3 Peters, 470 134 McFarland v. Sikes, 54 Conn. 250 45 McKim v. King, 58 Md. 502 96, 100 McKnight v. Parsons, 136 Iowa 390 97, 115, 116 McLaughlin v. Doops, 84 Wash. 442 106 McLeod v. Hunter, 29 Misc. 558 29, 59 McMurray v. McMurray, 258 Mo. 405 115 McNamara v. Jose, 28 Wash. 461 104, 112 McPherrin v. Little, 36 Okla. 510 97 McSherry v. Brooks, 46 Md. 103 88 McWherter v. Jackson, 10 Humph. 208 53 Mead v. Engs, 5 Cow. 303 181 Mechanics' Amer. Nat. Bank v. Coleman, 204 Fed. Rep. 24.. 16 Bank v. Charddavoyne, 69 N. J. L. 256 98 v. Griswold, 7 Wend. 165 156 v. Merchants' Bank, 6 Mete. 13 150 v. Stratton, 2 Keyes, 365 34 and Traders' Bank v. Seitz, 150 Pa. St. 632 161 Megowan v. Peterson, 173 N. Y. 1 53 Mehlenger v. Harriman, 185 Mass. 245 62, 99 Melton v. Brown, 25 Fla. 461 125 v. Pensecola Bank & Tr. Co., 190 Fed. Rep. 126; 111 C. C. A. 166, 210 64 Mercantile Bank v. Busby, 120 Tenn. 652 123, 126 Nat. Bank v. Silverman, 148 App. Div. 1 56 Mercer County v. Hackett, 1 Wall. 83 27 v. Lancaster, 5 Pa. St. 160 182 Merchants ' Bank v. Birch, 17 Johns. 24 174, 175 TABLE OP CASES. liii PAGE Merchants' Bank v. Griswold, 72 N. Y. 472 219, 220 v. Santa Maria, 162 App. Div. 248 18, 97, 98 of Canada v. Brown, 86 App. Div. 599 175 Nat. Bank v. Haverhill Iron Works, 159 Mass. 158 115 Nat. Bank v. Vranson, 165 N. C. 344 107 Meredith v. Dibrell, 127 Tenn. 287 200 v. Gallaudet, 120 N. Y. 298 129, 137 Merritt v. Jackson, 181 Mass. 67 142 v. Toddy 23 N. Y. 28 141 M. S. Banke v. Pierce, 137 N. Y. 444 194 Mersick v. Alderman, 77 Conn. 634 65 Merz v. Kaiser, 20 La. Ann. 379 89 Messmore v. Morrison, 172 Pa. St. 300 29 Metzger v. Sigall, 82 Wash. 80 80 Meuer v. Phenix National Bank, 42 Misc. 341 90, 91 94 App. Div. 331 252 Meyer v. Beardsley, 29 N. J. Law, 236 216 v. Richards, 163 U. S. 385 128, 129 Meyers v. Standart, 11 Ohio St. 29 223 M. Groh's Sons Co. v. Schneider, 34 Misc. 195 116 Middleborough National Bank v. Cole, 191 Mass. 168 69 Middleton v. Griffith, 57 N. J. Law, 442 74 Milled v. Morton, 114 Va. 610 97 Miller v. Dell Rio Mining Co., 25 Idaho, 83 203 v. Gilleland, 19 Pa. St. 119 210 v. Hannibal & St. Jo. R. R. Co., 90 N. Y. 430 48 v. Kyle, 85 Ohio St. 186 16 v. Kreiter, 76 Pa. St. 78 194 v. Marks, 148 Pac. Rep. 412 99 v. Norton, 114 Va. 610 62 v. Reynolds, 92 Hun, 400 53 v. Thompson, 4 M. & G. 260 212 Mills v. Bank of U. S. 11 Wheat. 431 171, 172 Mingns v. Condit, 23 N. J. Eq. 313 61 Minir v. Crawford, L. R. 2 Scotch Appeals, 456 200 Minturn v. Fisher, 4 Cal. 36 248 Mitchell v. Baldwin, 88 App. Div. 265 115 v. Culver, 7 Cow. 336 36 v. Fuller, 15 Pa. St. 268 83 Moggridge v. Jones, 14 East. 485 67 Mohlman Co. v. McKane, 60 App. Div. 546 189 Monson v. Drakely, 40 Conn. 559 50 liv TAtfLE OF CASES. PAQS Montgomery v. Crossthwait, 90 Ala. 553 15 v. Sehwald, 177 Mo. App. 75 195 County Bank v. Marsh, 7 N. Y. 481 183 Montrose Savings Bank v. Claussen, 137 Iowa, 73 98 Monument Nat. Bank v. Globe Works, 101 Mass. 57 69 Moore v. Alexander, 63 App. Div. 100 185 v. Baird, 30 Pa. 136 112 v. Hardcastle, 11 Md. 486 182 Moorhead v. Gilmore, 77 Pa. St. 118 103 Moreland's Assignee v. Citizens' Savings Bank, 97 Ky. 211.. 235 Morford v. The Farmers' Bank of Saratoga County, 26 Barb. 568 69 Morgan v. Edwards, 53 Wis. 599 15 v. Thompson, 72 N. J. Law, 244 135 Morris v. Cude, 57 Tex. 337 89 Canal, etc., Co. v. Fisher, 9 N. J. Eq. 699 27 County Brick Co. v. Austin, 79 N. J. L. 273 62, 68 Morrison v. Bailey, 5 Ohio St. 13 248 Lumber Co. v. Lookout Mt. Hotel Co., 92 Tenn. 6 135 Moritz Estate, In Re, 239 Pa. St. 375 200 Morse v. Huntington, 40 Vt. 488 200 Morton v. Naylor, 1 Hill 583 19 v. N. A. & Selma Ry. Co., 79 Ala. 590 103 Moskowitz v. Deutsch, 46 Misc. 603 207, 209, 250 Mott v. Havana National Bank, 22 Hun, 354 18 Mountenegro-Riehm Co. v. 111. Trust Co., 164 Ky. 608 103 Moyer & Brother's Appeal, 87 Pa. 129 156 Mudd v. Harper, 1 Md. 110 29 Muir v. Edelen, 156 Ky. 212 116 Muller v. Kling, 149 App. Div. 176, 181 219, 220 Munger v. Shannon, 61 N. Y. 251 17, 19, 213 Munn v. Burch, 25 111. 35 254 Munroe v. Stanley, 220 Mass. 438 207 Murchison Nat. Bank v. Dunn Oil Mills, 150 N. C. 718.. 62, 79 Murray v. Judah, 6 Cow. 484 247 v. Lardner, 2 Wall. 110 103, 115 Murphy v. Estate of Skinner, 160 Wis. 554 60, 76 v. Panter, 62 Ore. 522 119 Musson v. Lake, 4 How. 262 149 Muth v. Dolfleld, 43 Md. 466 27 Myers v. Chesley, 177 S. W. Rep. 326 55 Myrick v. Merritt, 22 Fla. 335 224 Nailor v. Bowie, 3 Md. 251 148 TABLE OF CASES. lv PAGE Nash v. De Freville (1900), 2 Q. B. 72 195 National Bank v. Nat. Bank of Commonwealth, 139 Mass. 513 251 v. Cade, 73 Mich. 449 182 v. Shaw, 79 Me. 376 180 v. Sutton Manufacturing Co., 6 U. S. App. 312 15 of America v. National Bank of Illinois, 164- HL 503 254 of Aurora v. Basuier, 65 Fed. Eep. 58 14 of Commerce v. Armbruster, 42 Okla. 656 98 v. Atkinson, 55 Fed. Rep. 465, 27 U. S. App. 88 69 of Commerce v. Farmers' & Merchants' Bank, 87 Neb. 843 74 of Commerce v. Pick, 13 N. D. 74 Ill v. Morris, 156 Mo. App. 51 64 Newberg v. Wentworth, 218 Mass. 30 18 of Newport v. Snyder Manufacturing Co., 117 App. Div. 370 .- . .69, 70 of North America v. Bangs, 106 Mass. 441 121 of Phoenixville v. Buckwalter, 214 Pa. St. 289. 118 of Republic v. Young, 41 N. J. Eq. 531 103 of Rolla v. First Nat. Bank of Salem, 141 Mo. App. 719 120 of Washington v. Texas, 20 Wall. 72 88 Butchers' and Drovers' Bank v. Hubbell, 117 N. Y. 384 79 Citizens' Bank v. Toplitz, 81 App. Div. 593, 178 N. Y. 466 200 Exchange Bank v. Cumberland Lumber Co., 100 Tenn. 479 125 Exchange Bank v. Hartford P. & E. R. Co., 8 R. I. 375 12, 27 Exchange Bank v. Lester, 194 N. Y. 461 40, 208 Exchange Bank v. Lubrano, 68 Atl. Rep. 944... 123, 132 246 National Park Bank v. German- American M. W. & S. Co., 116 N. Y. 281 70, 105 v. Kelling Karel Co., 189 111. App. 375. 99 v. Koehler, 204 N. Y. 174 198 v. Ninth National Bank, 46 N. Y. 77 120 v. Seaboard National Bank, 114 N. Y. 28. 130 v. Sitta, 127 App. Div. 624 63, 226 National Revere Bank v. Morse, 163 Mass. 381 61, 102, 115 Ivi TABLE OF CASES. PAQE National Savings Bank v. Cable, 73 Conn. 568 19 Ulster County Bank v. Madden, 114 N. Y. 280 209 Union Bank v. Todd, 132 Pa. St. 312 62 Neal v. Wilson, 213 Mass. 336 71 Nelson v. Cowing, 6 Hill, 333 96 v. First National Bank, 69 Fed. Rep. 798 234 29 U. S. App. 554 172 v. Nelson Bennett Co., 31 Wash. 116 .... 217 New v. Walker, 108 Ind. 365 257 Newcombe v. Fox, 1 App. Div. 389 46, 93 New Haven Mfg. Co. v. New Haven Pulp and Board Co., 76 Conn. 126 89 Newell v. Gregg, 51 Barb. 253 97 Newhall v. Clark, 3 Cush. 376 224 Newman v. King, 54 Ohio St. 273 209 v. Newman, 160 App. Div. 331 71 New York & N. H. E. R. Co. v. Schuyler, 34 N. Y. 30 220 N. Y. Produce Exch. Bank v. Twelfth Ward Bank, 135 A. D. 52. 132 Nevins v. Moore, 221 Mo. 331 184 v. Townsend, 6 Conn. 7 100 Niagara Bank v. Fairman Co., 31 Barb. 403 222, 223 Niblock v. Sprague, 200 N. Y. 390 45 Nichols v. Ruggles, 76 Me. 27 17 Night & Bay Bank v. Rosenbaum, 177 S. W. Rep. 693 200 Nightingale v. Meginnis, 34 N. J. Law, 461 199 Noble v. Beeman-Spaulding Co., 65 Ore. 93 72, 122, 135 Nolan Bros. Lumber Co. v. Dudley Lumber Co., 128 Tenn. 11. . 203 Norman v. McCarthy, 56 Colo. 290 45 Northampton National Bank v. Kidder, 106 N. Y. 221 117 North Atchinson Bank v. Garretson, 51 Fed. Rep. 167 218, 220 Northfield National Bank v. Arndt, 132 Wis. 383 98 Northwestern Coal Co. v. Bowman, 69 Iowa, 150 7, 182, 247 National Bank v. Bank of Commerce, 107 Mo. 402 79 Norton v. Ellam, 2 M. & W. 461 139 Norwich Bank v. Hyde, 13 Conn. 281 39, 47 O'Bannon Co. v. Curran, 129 App. Div. 90 156 Ocean National Bank v. Fant, 50 N. Y. 474, 476 149 v. Williams, 102 Mass. 141 234 'Connor v. Mechanics ' Bank, 124 N. Y. 324 254 Oil Well Supply Co. v. MacMurphy, 119 Minn. 500 218 Oeser v. Behrend, 89 Misc. 391 110 TABLE OF CASES. lvii PAGE Ofenstein v. Bryan, 20 App. Cases D. C. 1 206 Ogelsby v. Bank of New York, 114 Va. 663 16 Oleon v. Eosenbloom, 247 Pa. St. 250 25 Olry v. Miller, 74 Conn. 304 143 Oppenheimer v. Farmers' and Mechanics' Bank, 97 Tenn. 19 15, 112 Oppikof er v. Murphy, 146 App. Div. 581 110 Orange County Trust Co. v. Miller, 149 App. Div. 292 247 Oriental Bank v. Gallo, 112 App. Div. 360 131 Orr v. South Amboy Terra Cotta Co., 113 App. Div. 103 105 Osborne v. Hubbard, 20 Ore. 318 27 Ostenberg v. Kanka, 95 Neb. 314 116 Otis v. Cullum, 92 U. S. 448 129 Overton v. Tyler, 3 Pa. St. 346 25 Ovrick v. Colston, 7 Gratt. 189 38 Owens v. Blackburn, 161 App. Div. 827 12, 59, 246 Owensboro Savings Bank v. Haynes, 143 Ky. 534 186 Oxford Bank v. Davis, 4 Cush. 188 227 Oxnard v. Varnum, 111 Pa. St. 193 148 Packard v. Dunfee, 119 App. Div. 599 132 v. Wendholz, 88 App. Div. 365; 180 N. Y. 549 131 Page v. Monell, 3 Abb. Ct. App. Dec. 433 36 Paige v. Ford, 65 Ore. 540 23, 31, 81, 107 Paine v. Central Vermont E. R. Co., 118 U. S. 152 142 v. Edsell, 19 Pa. St. 178. 174, 206 Pardee v. Fish, 60 N. Y. 265. 141 Parker v. City of Syracuse, 31 N. Y. 376 19 v. Gordon, 7 East. 387 150 v. Kellogg, 158 Mass. 90 148 v. Stroud, 98 N. Y. 379 140, 141 Parks v. Smith, 155 Mass. 26, 33 185 Parr v. City Trust Co., 95 Md. 291 156 Parry v. Taylor, 148 N. C. 362 166 Passmore v. North, 13 East. 517 35 Passut v. Heubner, 81 Misc. 249 31 Patch v. Washburn, 82 Mass. 82 135 Paterson v. Fowler, 162 App. Div. 21. 115 Patterson v. Todd, 18 Pa. St. 420 29, 88 Pavenstedt v. N. Y. Life Ins. Co., 203 N. Y. 91 232 Payne v. Zell, 98 Va. 294 64 Payson v. Whitcomb, 15 Pick. 212 139 Peach v. Bligh, 37 111. 317 76 Pearce v. Langflt, 101 Pa. St. 507 180 Iviii TABLE OF CASES. PAGE Peason v. Garrett, 4 Mod. 242 21 Pensecola State Bank v. Melton, 210 Fed. Rep. 57 209 People's Bank v. Brooke, 31 Md. 7 233 v. Franklin Bank, 88 Tenn. 299 121 v. Keech, 26 Md. 521 151 People's Nat. Bank v. Rice, 149 App. Div. 18 119, 133 v. Schepflin, 73 N. J. Law, 29 69 v. Taylor, 149 Pac. Rep. 763 34 v. Miller, 152 N. W. Rep. 257. . . .98, 101, 116 State Bank v. Rryden, 91 Kans. 216 195 Savings Bank v. Bates, 120 U. S. 556 61 Perez v. Bank of Key West, 36 Fla. 467 194 Perry v. Bigelow, 128 Mass. 129 24 v. Kruger, 45 App. Div. 187 174 Pettyjohn v. Nat. Exch. Bank, 101 Va. Ill 58 Phelan v. Moss, 67 Pa. St. 59 , 103 Phelps v. Stocking, 21 Neb. 444 177 v. Vischer, 50 N. Y. 69 126 v. Webber, 84 N. J. L. 630 54 Phillips v. Astberg, 2 Taunt. 206 146 v. Dippo, 93 Iowa, 35 186 v. Eldridge, 221 Mass. 103 106, 116 v. Preston, 5 How. (U. S.) 278 135 Philpotts Estate, In re, 151 N. W. Rep. 825 95, 142 Phenix Nat. Bank v. Hanlon, 183 Mo. App. 243 198 Phoenix Bank v. Hussey, 12 Pick. 483 214, 231 Insurance Co. v. Allen, 11 Mich. 30 227 Pickle v. People 's National Bank, 88 Tenn. 380 254 Pier v. Heinrichsoffen, 67 Mo. 163 154, 179 Pierce v. Indseth, 106 U. S. 546 233 v. State Nat. Bank, 215 Mass. 18 251 v. Struthers, 27 Pa. St. 249 148 Pine v. Smith, 11 Gray, 38 97 Piner v. Brittain, 165 N. C. 401 66 Piper v. Neylon, 88 Neb. 253 116 Pitts v. Jones, 9 Fla. 519 190 Pitzer v. McCune, 152 111. App. 145 16 Place v. Mcllvain, 38 N. Y. 960 190 Planters' Bank v. Evans, 36 Tex. 592 189 v. Keese, 7 Heish, 200 247 Piatt v. The Sauk County Bank, 17 Wis. 222 28 Plover Savings Bank v. Moodie, 135 Iowa, 685 144, 250 Poole v. Tolleson, 1 McCord, 200 29, 88 TABLE OF CASES. lis PAGE Pope v. Lumber Company, 162 N. C. 206 19 Porter v. Judson, 1 Gray, 175 233 v. Porter, 51 Me. 376 29 Potts v. Crudup, 150 Pac. Rep. 170 16 Power v. Mitchell, 7 Wis. 159 155, 157 Pratt v. Rounds, 160 Ky. 358 103 Prescott Bank v. Coverly, 7 Gray, 216 7, 131 National Bank v. Butler, 157 Mass. 548 131 Preston v. Mann, 25 Conn. 127 89 Price v. Jones, 105 Ind. 544 21 v. Neal, 3 Burrows, 1354 120 Pulsifer v. Hitchkiss, 12 Conn. 234 67 Purcell v. Allemong, 22 Gratt, 739 250 Quiggle v. Herman, 131 Wis. 379 Ill, 258 Quimby v. Varnum, 190 Mass. 211 202 Quincy Mutual Fire Ins. Co. v. Inter. Trust Co., 217 Mass. 370. 86 Quinn v. Hoord, 43 Vt. 375 6] Railroad Company v. National Bank, 102 U. S. 14 61 Raleigh County Bank v. Poteet, 74 W. Va. 511 16, 109 Rambo v. First Nat. State Bank of Argentine, 88 Kans. 257. . 25 213, 217, 253 Rand v. Dovey, 83 Pa. St. 281 89 v. Reynolds, 2 Gratt. 171 182 Randolph Nat. Bank v. Hornblower, 160 Mass. 401 253 Ranger v. Cory, 1 Mete. 369 100 Raymond v. Sellick, 10 Conn. 485 29, 61 Redlich v. Doll, 54 N. Y. 238 36, 41 Redman v. Adams, 51 Me. 433 17 Reed v. Spear, 107 App. Div. 144 152 v. Wilson, 41 N. J. Law, 29 150 Regester's Sons Co. v. Reed, 185 Mass. 226 116 Regina Flour Mill Co. v. Holmes, 156 Mass. 11 80 Reier v. Straus, 54 Md. 278 234 Reilly v. Daly, 159 Pa. St. 605 213 Reincke v. Wright, 93 Wis. 368 155 Reinhart v. Schall, 69 Md. 352 135, 202 Reynolds v. Appleman, 41 Md. 615 233 v. Vint, 73 Ore. 528 3 Rice v. Grange, 131 N. Y. 149 67 v. Rice, 43 App. Div. 458 21 Rickets v. Pendleton, 14 Md. 320 148, 192, 234 Richards v. Market Exch. Bank, 81 Ohio St. 348 119 Riddle v. Bank of Montreal, 145 App. Div. 207 214, 247 lx TABLE OF CASES. PAQg Ridgeley Bank v. Patton, 109 HI. 484 247 Riehl v. Austin, 155 App. Div. 207 189, 198 Riker v. Sprague Manufacturing Co., 14 R. I. 402 20 Roach v. Ostler, 1 Man. & Ry. 120 189 v. Woodaal, 91 Tenn. 206 55, 61 Roberts v. Hall, 37 Conn. 205 61 v. Hawkins, 70 Mich. 566 167 v. McGrath, 38 Wis. 52. 45 v. Parish, 17 Oregon, 583 32 v. Snow, 28 Neb. 425 29 Robertson v. Breedlone, 7 Porter, 541 114 v. Kensington, 4 Taunt. 30 82 Robins v. Lair, 31 Iowa, 9 61 Robinson v. Ames, 20 Johns. 146 227 v. Barnett, 19 Fk. 670 184 v. Lymon, 10 Conn. 31 114 Robson v. Bennett, 2 Taunt. 388 168 Rock County National Bank v. Hollister, 21 Minn. 385 SO Rockfield v. First National Bank of Springfield 4, 126 Rockville National Bank v. Citizen's Gas Light Co., 72 Conn. 576 61 v. Holt, 58 Conn. 526 200 Rogers v. Durrant, 140 U. S. 298 247 v. Sipley, 35 N. J. Law, 86 71 v. Vosburgh, 87 N. Y. 228 209 Rogerson v. Ladbroke, 1 Bing. 93 250 Rome v. Young, 2 Brod. & Bing. 165; 2 Bligh. 391 224 Rosemon v. Mahoney, 86 App. Div. 377 63 Roseville State Bank v. Heslet, 84 Kans. 315 22 Rose v. Bedell, 5 Duer, 462 190 v. Hurd, 71 N. Y. 14, 18 184 Rosson v. Carroll, 90 Tenn. 90 233, 234 Rouse v. "Wooten, 140 N. C. 557 7 Rouvant v. San Antonio National Bank, 63 Tex. 610 121 Rowland v. Fowler, 47 Conn. 349 112 Roy v. Duff, 152 N. W. Rep. 606 91, 94 Ruff v. Webb, 1 Esp. 129 212 Rumball v. Ball, 10 Md. 38 139 Russ v. Sadler, 197 Pa. St. 51 134 Russell v. Langstaffe, 2 Doug. 514 37 Ryhiner v. Feickert, 92 111. 305 84 Sabine v. Paine, 166 App. Div. 9 110, 132, 246 Salen v. Bank of the State of New York, 110 App. Div 636 56 TABLE OF CASES. lxi PAGE Salmon v. Hopkins, 61 Conn. 47 86 Salt Springs National Bank v. Burton, 58 N. Y. 430 146, 150 Sanderson v. Sanderson, 20 Fla. 292 178 Sargent v. Southgate, 5 Pick. 312 97 Sasscer v. Farmers' Bank, 4 Md. 409 171, 179 v. Stone, 10 Md. 98 348 Saunderson v. Piper, 5 Bing. N. C. 425 47 Saylor v. Bushong, 100 Pa. St. 27 254 Sayre v. Leonard, 57 Colo. 116 45 Schaeffer v. Fowler, 111 Pa. St. 451 61 v. Marsh, 90 Misc. 307 45, 107 Schierl v. Baumel, 75 Wis. 75 184 Schlesinger v. Gilhooly, 189 N. Y. 1 110 v. Kelly, 114 App. Div. 546 110, 111 v. Lehmaier, 191 N. Y. 69 110 v. Schultz, 110 App. Div. 356 143 Schmidt v. Bank of Commerce, 234 U. S. 64 5, 102 v. Pegg, 172 Michigan, 160 80, 81 Schulthers v. Sellers, 223 Pa. St. 506 116 Schmittler v. Simon, 101 N. Y. 554 16, 86, 132 Schreyer v. Hawkes, 22 Ohio St. 308 39, 47 Schroeder v. Turner, 68 Md. 506 125 Schwartzman v. Post, 94 App. Div. 474 195 Scotland County Nat. Bank v. Hohn, 146 Mo. App. 699 74 v. O'Connel, 23 Mo. App. 165.. 40 Scott v. Pilkington, 15 Abh. Pr. 280 220 Scudder v. Union National Bank, 91 U. S. 406 217, 219 Seaboard Nat. Bank v. Bank of Amer. 193 N. Y. 26 33, 56 Seager v. Drayton, 218 Mass. 571 66 Seaman v. Muir, 144 Pac. Rep. 121 74 Seaton v. Scoville, 18 Kans, 433 16, 181 Seattle Shoe Co. v. Packard, 43 Wash. 527 51 Second Nat. Bank v. Anglin, 6 Wash. 403 15 v. Graham, 246 Pa. St. 256 197 v. Hoffman, 229 Pa. St. 429 116 v. Morgan, 165 Pa. St. 199 103 v. Smith, 118 Wis. 18 171 Sedgwick v. McKim, 53 N. Y. 307 41 Seldner v. Mount Jackson National Bank, 66 Md. 488... 156, 175 Self v. King, 28 Tex. 552 29 Seltzer v. Deal, 135 N. C. 428 103, 105 Serle v. Norton, 9 M. & W. 309 36 Shattuck v. Guardian Trust Co., 204 N. Y. 200 255 Ixii TABLE OF CASES. ?AOE Shaw v. Camp, 160 111. 425 21 v. Knox, 98 Mass. 214 134 v. Pratt, 22 Pick. 305 195 Shawmut National Bank v. Manson, 168 Mass. 425 61, 97 Shea v. Vahey, 215 Mass. 80 136, 167, 181 Shedd v. Brett, 1 Pick. 401 146, 171, 179 Shelburne Falls National Bank v. Townsley, 102 Mass. 177. . 181 107 Mass. 444.. 182 Sheldon v. Benham, 4 Hill, 129 173 v. Heaton, 88 Hun, 535 29 Shenandoah National Bank v. Marsh, 89 Iowa, 273 15 Shepard v. Chamberlain, 8 Bray, 225 150 v. Hauson, 9 N. D. 249 94 v. Hawley, 1 Conn. 367 175 Sherer v. Easton Bank, 33 Pa. St. 134 175, 233 Sherman v. Ecker, 59 Mise. 216 192 v. Goodwin (Ariz.), 89 Pac. Rep. 517 246 Shipman v. Bank of the State of New York, 126 N. Y. 318 32 Shires v. Commonwealth, 120 Pa. St. 368 257 Shoemaker v. Mechanics' Bank, 59 Pa. St. 79 180 Shoenberger's Executor v. Lancaster Savings Institution, 28 Pa. St. 459 174 Shover v. Western Union Telegraph Co., 57 N. Y. 459 219 Shutts v. Fingar, 100 N. Y. 539 141, 197 Sice v. Cunningham, 1 Cowen, 397 100 Siebeneck v. Anchor Savings Bank, 111 Pa. St. 187 199, 200 Siegel v. Dubinsky, 50 Misc. 681 177, 187 Sieger v. Second National Bank, 132 Pa. St. 307 191 Simpson v. Davis, 119 Mass. 269 206 Simus v. Larkin, 19 Wis. 390 183 Singer Manufacturing Co. v. Summers, 143 N. C. 102 100, 116 144, 248, 250 Skilbeck v. Garbett, 7 Q. B. 846 180 Slack v. Kirk, 67 Pa. St. 380 135 Slagel v. Rusts' Admr., 4 Gratt. 274 135 Sloan v. The Union Banking Co., 67 Pa. St. 470 106 Slocum v. Lizzardi, 21 La. Ann. 355 175 Smalley v. Wright, 40 N. J. Law, 471 175 Smathers v. Foxaway Hotel Co., 162 N. C. 346 64, 117, 346 Smith v. Bayer, 46 Ore. 143 80, 94 v. Caro, 9 Oregon, 278 29, 87, 133 v. Clarke, Peake, 225 83 v. Dunham, 8 Pick. 246 211 TABLE OF CASES. lxiii PAGE Smithv. Ellis, 29 Me. 422 20 v. Erwin, 77 N. Y. 466 '..'..'.'. 199 v. Fisher, 24 Pa. St. 222 \ '., 155 v. Hill, 6 Wis. 154 173 v. James, 20 Wend. 192 249 v. Kendall, 6 T. R. 123 30 v. Lounsdale, 6 Oregon, 78 184, 185 v. Maddox Rucker Banking Co., 135 Ga. 151 36 v. Marsack, 6 C. B. 486 122 v. Melton, 133 Mass. 369 228 v. Nelson, 212 Fed. Rep. 56 5, 90 v. Pickham, 8 Tex. Civ. App. 326 186 v. Poillon, 87 N. Y. 590 178 v. Rockwell, 2 Hill, 482 149 v. Shippey, 182 Pa. St. 24 77 v. Smith, 1 R. I. 388 47 v. State Bank, 104 N. Y. Supp. 750 71, 207 v. Whiting, 9 Mass. 334 104 Sneel v. Prescott, 1 Atk. 245 79 Snyder v. Corn Exch. Nat. Bank, 221 Pa. 599 33 Solomon v. Hopkins, 61 Conn. 47 50 Southern Loan Co. v. Morris, 2 Pa. St. 175 131 Southwest Nat. Bank v. Baker, 23 Idaho, 428 106 Spann v. Baltzell, 1 Fla. 301 233, 170 Spear v. Pratt, 2 Hill, 582 217 Spencer v. Carstarphen, 15 Colo. 445 74 v. Drake, 84 App. Div. 272 143 v. Sloan, 108 Ind. 183 61 Spies v. National City Bank, 174 N. Y. 222 195 Spoffard v. Norton, 126 Mass. 333 80 Sprague v. Fletcher, 8 Oregon, 367 187 Spurgeon v. Smiths, 114 Ind. 453 197 St. Charles Savings Bank v. Edwards, 243 Mo. 553 96 St. Lawrence Nat. Bank v. Watkins, 153 App. Div. 551. . .254, 247 St. L. & S. F. Ry. Co. v. Johnston, 133 U. S. 566 254 St. Paul's Church v. Fields, 81 Conn. 670 28 Stansbury v. Emberg, 128 Tenn. 104 162 Standard Trust Co. v. Commercial Nat. Bank, 167 N. C. 260. . 116 Stanton v. Blossom, 14 Mass. 116 168 Stapleton v. Louisville Banking Co., 95 Ga. 802 15 Stark v. Olsen, 44 Neb. 646 15 State Bank of La Crosse v. Michel, 152 Wis. 88 201" of Beaver Co. v. Bradstreet, 89 Neb. 186 224 Ixiv TABLE OF CASES. PAGE State Bank v. Cumberland, 168 N. C. 608 121 of Halstead v. Bilstad, 162 Iowa, 433 4 of New York Nat. Bank v. Kennedy, 145 App. Div. 669. 149 Staylor v. Ball, 24 Md. 183 188 Steadman v. Jilman, 10 Conn. 56 114 Steekel v. Steckel, 28 Pa. St. 233 99 Stein v. Empire Trust Co., 148 App. Div. 850 56 v. Yglesias, 1 Crom. Mees. & Ros. 565 114 Sleinhilper v. Basnight, 153 N. C. 293 9 Stephens v. Monongahela National Bank, 88 Pa. St. 157. . . .62, 68 Stephenson v. Dickson, 24 Pa. St. 148 178, 192 Sterry v. Robinson, 1 Day, 11 (Conn.) 230 Stevens v. Brice, 21 Pick. 193 100 Stewart v. Eden, 2 Cai. 121 197 v. Kennett, 2 Camp. 177 168 v. Preston, 1 Fla. 10 81 Stitzel v. Miller, 157 111. App. 390 22 Stoddard v. Kimball, 6 Cushing, 469 65 Stone v. Sargent, 220 Mass. 445 39, 207 Storrffer v. Curtis, 198 Mass. 560 45 Stotts v. Fairfield, 163 Iowa, 726 116 Strickland v. Henry, 66 App. Div. 23 110 Struthers v. Blake, 30 Pa. St. 139 148, 181 Stuber v. Schack, 83 111. 192 199 Sturges v. Chicago Fourth National Bank, 75 HI. 595 214 Sublette v. Brewington, 139 Mo. App. 410 90 Sullivan v. German National Bank, 18 Colo. App. 99 Ill v. Knauth, 161 App. Div. 148 58 v. Langley, 120 Mass. 437 115 Sulsbacker v. Bank of Charlestown, 86 Tenn. 201 147, 229 Summers v. Barrett, 65 Iowa, 292 158 Summer v. Bowen, 2 Wis. 524 234 v. Kimball, 2 Wis. 524 192 Sumwalt v. Rigeley, 20 Md. 107 53 Sussex Bank v. Baldwin, 2 Harr. 487 (N. J.) 146, 171 Sutherland v. Mead, 80 App. Div. 103 63 Suydam v. Combs, 3 Green (N. J.) 133 122 Swan v. Carawan, 168 N. C. 472 194 Swanby v. Northern State Bank, 150 Wis. 572 85 Sweeney v. Thickstum, 77 Pa. St. 131 25 Sweeny v. Easter, 1 Wall. 173 79 Swengle v. Wells, 7 Ore. 222 164 Sweringen v. Sewickley Dairy Co., 198 Pa. St. 68 140 TABLE OP CASES. lxV PAGE Swift v. Smith, 102 U. S. 442 103 v. Tyson, 16 Pet. 1 61 Sylvester v. Crohan, 138 N. Y. 494 140 Bleckley Co. v. Alewine, 48 S. C. 308 15 Talcott v. Cogswell, 3 Day, 512 134 Tanner v. Hall, 1 Pa. St. 417 71 Tapee v. Varley, 184 Mo. App. 470 99 Tate v. Hilbert, 2 Ves. Jun. 112 250 v. Sullivan, 30 Md. 464 188, 192 Tatum v. Commercial Bank, 185 Ala. 249 66, 98 Taunton Bank v. Richardson, 5 Pick. 436 157 Taylor v. Croker, 4 Esp. 187 121 Terbell v. Jones, 15 Wis. 253 233 Terry v. Bissell, 26 Conn. 41 37, 58 Third National Bank v. Bowman, 50 App. Div. 66 18 Thompson v. Commercial Bank, 3 Caldio, 49 150, 214 v. Farmers State Bank, 140 N. W. Rep. 877 149 v. Ketcham, 8 Johns. 146 29 Thornton v. Appleton, 29 Me. 298 211 v. Wynn, 12 Wheat. 183 184 Thorp v. Mindeman, 123 Wis. 149 4, 21, 76, 82 Thorpe v. White, 188 Mass. 333 207 Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83 213, 254 Thurston v. McKenn, 6 Mass. 428 100 Tibby Bros. Glass Co. v. Farmers' & Manufacturers' Bank of Sharpsburg, 220 Pa. 1 253 Tibby Bros. Glass Co. v. Farmers' and Mechanics' Bank, 220 Pa. St. 1 254 Tidmarsh v. Grover, 1 Maule & S. 735 210 Timble v. Garfield Nat. Bank, 121 App. Div. 870 208 Times Sq. Auto Co. v. Rutherford Nat. Bank, 47 N. J. Law, 649 251 Tindale v. Brown, 1 Term Rep. 167 168 Tinsdale Lumber Co. v. Piquet, 153 App. Div. 266 22 Tischlo v. Shurman, 49 Misc. 257 103 Title Guarantee & Trust Co. v. Haven, 196 N. Y. 487 120 Tobey v. Lenning, 14 Pa. St. 483 170 Tod v. Wick, 36 Ohio St. 370 257 Todd v. Neal 's Administrator, 49 Ala. 273 235 v. Shelburne, 8 Hun, 512 112 Tolman v. American National Bank, 22 R. I. 462 57 Tombeckbe Bank v. Stratton, 7 Wend. 429 197 Tomlinson Carriage Co. v. Kinsella, 31 Conn. 273 7 Lxvi TABLE OF CASES. PAGB Toole v. Craft, 193 Mass. 110 4, 157, 185 Torbet v. Montague, 38 Colo. 325 78, 133, 156 Torpey v. Tebo, 184 Mass. 307 12, 20, 246 Torrey v. Frost, 40 Me. 74 190 Tower v. Stanley, 220 Mass. 429 39, 207 Town v. Rice, 122 Mass. 67 24 of Solon v. Williamsburgh Savings Bank, 114 N. Y. 122 206, 207 Townsley v. Sumrall, 2 Pet. 170 233 Trader v. Chicester, 41 Ark. 242 15 Traders' National Bank v. Jones, 104 App. Div. 433 168 v. Rogers, 167 Mass. 315 58 Trego v. Cunningham Estate, 267 111. 367, 448 96, 135 Trickey v. Larne, 6 M. & W. 278 67 Triphonoft v. Sweeney, 65 Ore. 209 35, 107 Troy City Bank v. Lanman, 19 N. Y. 477 223 Trust Co. of America v. Hamilton Bank, 127 App. Div. 515 ... 33 Trustees of American Bank v. McComb, 105 Va. 473 5 the I. I. Fund v. Lewis, 34 Fla. 424 163 Tullis v. McClary, 128 Iowa, 493 96 Turnbull v. Maddux, 68 Md. 579 184 Turner v. Kimble, 37 Okla. '92 249 Tuscumbia, etc., R. R. Co. v. Rhodes, 8 Ala. 206 114 Twelfth Ward Bank v. Brooks, 63 App. Div. 220 202 Twentieth St. Bank v. Jacobs, 74 W. Va. 528 109 Tyler v. Young, 30 Pa. St. 143 143 Tyson v. Joyner, 139 N. C. 69 94 Ulster County Bank v. McFarlan, 5 Hill, 432 219 Union Bank v. Fowlkes, 2 Sneed, 556 214 v. Deshel, 139 App. Div. 217 180 v. Sullivan, 214 N. Y. 332 ', 132, 136 v. Willis, 8 Mete. 504 153 National Bank v. Franklin Nat. Bank, 249 Pa. 375. .121, 222 Stock Yards v. Bolan, 14 Idaho, 87 22 Trust Co. v. McCrum, 145 App. Div. 409 39, 199 v. McGinty, 212 Mass. 205 3 United States v. American Exchange National Bank, 70 Fed. Rep. 232 130 v. Hodge, 6 How. 279 (U. S.) 199 v. White, 2 Hill, 59 31 National Bank v. Ewing, 131 N. Y. 506 71 University Press v. Williams, 48 App. Div. (N. Y.) 190 188 Valley Savings Bank v. Mercer, 97 Md. 458 103 TABLE OF CASES. lxvii PAGE Vanarsdale v. Hax, 107 Fed. Rep. 878 89 Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142 217 Vanderford v. Farmers' and Mechanics' National Bank, 105 Md. 164 119, 200 Vander Ploeg v. Van Zuuk, 135 Iowa, 350 4, 41, 96 Van Duzer v. Howe, 21 N. Y. 531 41 Van Hoosen v. Van Alstyne, 9 Wend. 75 29, 88 Van Slyke v. Rooks, 181 Mick. 88 103, 106 Vathir v. Zane, 6 Gratt. 246 115 Vinton v. King, 4 Allen, 562 97 Voris v. Schoonover, 91 Kans. 530 30, 99 Vosburgh v. Diefendorf, 119 N. Y. 357 103 Voss v. Chamberlain, 139 Iowa, 569 64 Wadhams v. Portland, etc., Ry. Co., 37 Wash. 86 217, 218 Wagman v. Hoag, 14 Barb. 233 200 Wagner v. Kenner, 2 Rob. 120 36 Wahlig v. The Standard Pump Manufacturing Co., 25 N. Y. St. Rep. 864 69 Walker v. Bank of State of New York, 13 Barb. 636 223, 225 v. Dunham, 135 Mo. App. 396 8, 126 Wall v. HaUenbeck, 19 Neb. 639 76 Wallabout Bank v. Peyton, 123 App. Div. 727 98, 103 Wallace v. Agry, 4 Mason, 333 227 v. Crilly, 46 Wis. 577 147 v. McConnell, 13 Peters, 136 140, 224 Walsh v. Blatchley, 6 Wis. 422 224, 242, 243 v. Dart, 12 Wis. 635 29 v. Dort, 23 Wis. 334 222 Walstenholme v. Smith, 34 Utah, 300 119 Ward v. Allen, 2 Mete. 53 217 v. City Trust Co., 192 N. Y. 61 71 v. Tyler, 52 Pa. St. 393 80 Waring v. Betts, 90 Va. 46 146, 149, 150 Watervliet Bank v. White, 1 Denio, 608 85 Watson v. Russell, 3 B. & S. 34; 5 B. & S. 968 96 v. Wyman, 161 Mass. 96, 99 163 Waxberg v. Stappler, 83 Misc 78 Way v. Butterworth, 108 Mass. 509 151 Weaver v. Barden, 49 N. Y. 286 61 Weber v. Orton, 91 Mo. 680 93, 146 Wedge Mines Co. v. Denver National Bank, 19 Colo. App. 182. 248 Weeks v. Esler, 143 N. Y. 374 27 v. Parsons, 179 Mass. 570 135 lxviii TABLE OF CASES. FADE Weems v. Farmers' Bank, 15 Md. 231 192, 234 Wells v. Duffy, 69 Wash. 310 104 Welsh v. B. C. Taylor Manufacturing Co., 82 111. 581 153 v. Sage, 47 N. Y. 143 103 West Branch Bank v. Fulner, 3 Pa. St. 399 190 Westberg v. Chicago L. & C. Co., 117 Wis. 589 12, 222 Western Wheeled Scraper Co. v. Sadilek, 50 Neb. 105 249 Westfall v. Farwell, 13 Wis. 504, 509 173 Westminster Bank v. Wheaton, 4 R. I. 30 248 West River Bank v. Taylor, 34 N. Y. 128 168, 169, 197 Wetlaufer v. Baxter, 137 Ky. 362 34 Weyerhauser v. Dunn, 100 N. Y. 150 211 Weyman v. Yeomans, 84 111. 403 210 Wheeler v. Field, 6 Mete. 290 155 v. Guild, 20 Pick. 545, 553 163 v. Warner, 47 N. Y. 519 141 v. Webster, 1 E. D. Smith, 1 217 Whitcomb v. Nat. Exch. Bank, 123 Md. 612 195, 205 White v. Camp, 1 Fla. 94 87 v. Savage, 48 Oregon, 604 71 Whitehead v. Walker, 10 Mees. & Welsb. 696 114 Whitford v. Burckmeyer, 1 Gil. 127 183 Whiten v. Hayden, 9 Allen, 408 53, 80 Whitesides v. Northern Bank, 10 Bush. 501 210 Whitney v. Clary, 145 Mass. 156 61 v. Collins, 15 R. I. 44 141, 185 v. Elliot Nat. Bank, 137 Mass. 351 17 v. National Bank of Potsdam, 45 N. Y. 303 128 Whitaker v. Morrison, 1 Fla. 25 184, 185 Whittle v. Fond du Lac National Bank, 26 S. W. Rep. 1106. . . 14 Whitwell v. Brigham, 19 Pick. 117 122, 176 v. Johnson, 17 Mass. 499 178 Wilbour v. Hawkins, 94 Atl. Rep. 856 71, 96 Wilkie v. Chandon, 1 Wash. 355 187 Wilkens v. Usher, 123 Ky. 696 65 Willett v. Phoenix Bank, 2 Duer. 121 34 Williams v. Bank of United States, 2 Peters, 96 183 v. Banks, 11 Md. 198 69 v. Drexel, 14 Md. 566 121 v. Holt, 170 Mass. 351 93 v. Huntington, 68 Md. 590 104, 112, 115 v. Moseley, 2 Fla. 304 28 v. Paintsville Nat. Bank, 143 Ky. 786 181, 182 v. Winans, 2 Gr. 239 (N. J.) 219 TABLE OF CASES. lxiX PAGE Williamsport Gas Co. v. Pinkerton, 95 Pa. St. 62 143 Willis v. Finley, 173 Pa. St. 28 249 v. Green, 5 Hill, 232 84, 153, 175 v. Wilson, 3 Oregon, 308 210 Wilson v. Hendee, (N. J.) 74 N. J. L. 640 126, 127, 135 v. Lazier, 11 Gratt. 477 66, 115 v. Metropolitan Elevated Ry. Co., 120 N. Y. 145 105 v. Peck, 66 Misc. 179 172, 180, 183 v. Powers, 130 Mass. 127 199 v. Senier, 14 Wis. 380 154 v. Tolson, 79 Ga. 137 80 Winans v. Davis, 3 Harr. 276 (N. J.) 178 Windham Bank v. Norton, 22 Conn. 213 154, 179 Windsor Cement Co. v. Thompson, 86 Conn. 511 3, 4 Wintermute v. Torrent, 83 Mich. 555 80 Wirt v. Stubblefield, 7 App. Cas. D. C. 283 108 Wisconsin Yearly Meeting of Freewill Baptists v. Babler, 115 Wis. 289 22, 26 Wise v. Charlton, 4 A. & E. 486 23 Wisner v. First National Bank, 220 Pa. St. 21 222, 227 Witherow v. Slaybach, 158 N. Y. 649 135 Wittich v. First Nat. Bank of Pensacola, 20 Fla. 843 248 Wolf v. Hostetter, 182 Pa. St. 292 154 Wolstenholme v. Smith, 34 Utah, 300 200 Woman v. Frost, 52 N. Y. 422 67 Wood v. Repold, 3 Harris & J. 125 134 v. Robinson, 22 N. Y. 567 61 v. Sheldon, 42 N. J. Law, 425 129 v. Shelley, 196 Mass. 114 206 v. Steele, 6 Wall. 80 207, 209 v. Wood, 16 N. J. Law, 428 84 Woodman v. Thurston, 8 Cush. 157 186 Woods v. Fainley, 153 N. C. 497 247 v. Neeld, 44 Pa. St. 86 182 v. North, 84 Pa. St. 407 15 Son Co. v. Sehaefer, 173 Mass. 443 75 Woolenweber v. Ketterlin, 17 Pa. St. 389 190 Wooley v. Cobb, 165 Mass. 503 75 Worthington v. Cowles, 12 Mass. 30 137 Worley v. Johnson, 60 Fla. 295 156 Wright v. Hart's Admr., 44 Pa. St. 454 28 v. Irwin, 33 Mich. 32 14 v. Vermont Ins. Co., 164 Mass. 302 139 IXX TABLE OF CASES. PAGE Wyckoff v. Runyon, 33 N. J. Law, 107 67 Yenney v. Central City Bank, 44 Neb. 402 94 Yocum v. Smith, 63 111. 321 40 Yonkers Nat. Bank v. Mitchell, 156 App. Div. 318 246 Young v. Durgin, 15 Gray, 264 183 v. Grote, 4 Bing. 253 40 v. Shriner, 80 Pa. St. 463 114 Young's Estate, In re, 234 Pa. St. 287 129, 132 Zimmerman v. Anderson, 67 Pa. St. 421 26 v. Bote, 75 Pa. St. 188 26 Zollner v. Moffltt, 222 Pa. St. 544 173, 179, 234 THE NEGOTIABLE INSTRUMENTS LAW. THE LAW HAS BEEN ENACTED IN THE FOLLOWING STATES AND TERRITORIES: Alabama.— Laws of 1907, p. 660; Code 1907, ch. 115, H, p. 1063; Laws of 1909, p. 126. Alaska.— Laws of 1913, ch. 64. Arizona.— Rev. Stat. 1901, title 49; Laws of 1913, ch. 67; Rev. Stat. 1913, title 36. Arkansas. — Laws of 1913, ch. 81. Colorado.— Laws of 1897, ch. 64; Rev. Stat. 1908, ch. XCV; Mills' Anno. Stat. 1912, II, p. 2213. Connecticut.— Laws of 1897, ch. 74; Gen. Stat. 1902, ch. 234, p. 1028. Delaware. — Laws of 1911, eh. 191. District of Columbia. — Laws of 1899 (U. S. Stats, at Large), ch. 47; Code 1901, ch. XLVI; Ford's Anno. Code, 1910, p. 350. Florida.— Laws of 1897, ch. 4524; Gen. Stat. 1906, p. 1147; Comp. Laws 1914, II, p. 1550. Hawaii.— Laws of 1907, Act 89; Rev. Laws 1915, ch. 196, p. 1289. Idaho.— Laws of 1903, p. 380; Rev. Codes, 1908, I, p. 1326. Illinois.— Laws of 1907, p. 403; Hurd's Rev. Stat. 1913, ch. 98, p. 1670. Indiana.— Laws of 1913, ch. 63; Burns' Anno. Stat. 1914, TV, p. 557. Iowa.— Laws of 1902, ch. 130; Code Supp. 1913, tit. XV,ch.3-A, p. 1272. Kansas.— Laws of 1905, ch. 310; Gen. Stat. 1909, ch. 84 Kentucky.— Laws of 1904, ch. 102; Carroll's Stat. 1915, p. 1903. Louisiana. — Laws of 1904, Act 64. Maryland.— Laws of 1898, ch. 119; Pub. Gen. Laws 1904, art. 13; Pub. Gen. Laws 1911, art. 13. Massachusetts. — Laws of 1898, ch. 533 ; Rev. Laws of 1899, ch. 130; Rev. Laws, 1902, ch. 73; Laws of 1910, ch. 417. Michigan.— Public Acts 1905, No. 265; Howell's Stat. 1913, II, p. 1240. Minnesota.— Laws of 1913, ch. 272. Missouri.— Laws of 1905, p. 243; Rev. Stat. 1909, ch. 86. Montana. — Laws 1903, ch. 121; Rev. Civil Code, 1907, p. 1593. Nebraska.— Laws of 1905, ch. 83; Rev. Stat. 1913, ch. 54. [lxxi] IXXii ENACTMENTS IN STATES AND TERRITORIES. Nevada.— Laws of 1907, ch. 62; Kev. Laws, 1912, I, p. 769. New Hampshire. — Laws of 1909, ch. 123 ; Pub. Stat. Supp. 1913, p. 463. New Jersey.— Laws of 1902, ch. 184; Comp. Stat. 1911, p. 3734. New Mexico. — Laws of 1907, ch. 83. New York.— Laws of 1897, ch. 612; Laws 1909, ch. 43; Consol. Laws 1909, ch. 38. North Carolina.— Laws of 1899, ch. 733 ; Rev. 1905, ch. 54. North Dakota.— Laws of 1899, ch. 113; Comp. Laws, 1913, ch. 103, p. 1622. Ohio.— Laws of 1902, p. 162; Gen. Code, 1910, p. 1717. Oklahoma.— Laws of 1909, ch. 24; Rev. Laws, 1910, ch. 49, p. 1059. Oregon.— Laws of 1899, p. 18; Lord's Laws, 1910, tit. XL, III, p. 2126. Pennsylvania.— Laws of 1901, p. 194, No. 162; Laws of 1909, p. 260, No. 169. Rhode Island.— Laws of 1899, ch. 674; Gen. Laws, 1909, tit. XIX, ch. 200. South Carolina.— Laws of 1914, ch. 396. South Dakota.— Laws of 1913, ch. 279; Comp. Laws, 1913, II, p. 298. Tennessee.— Laws of 1899, eh. 94; Code Supp. 1903, ${ 3505- 3516. Utah.— Laws of 1899, ch. 83; Comp. Laws, 1907, tit. 53, p. 629. Vermont.— Laws of 1912, No. 99. Virginia.— Laws of 1898, ch. 866; Laws of 1906, ch. 219; Code, 1904, ch. 133a, H, p. 1455. Washington.— Laws of 1899, ch. 149; Rem. & Ball. Codes & Stats. 1909, H, p. 120. West Virginia.— Acts of 1907, ch. 81; Code Anno. 1913, n, p. 1894. Wisconsin.— Laws of 1899, ch. 386; Stat. 1913, p. 1180. Wyoming.— Laws of 1905, ch. 43; Comp. Stat. 1910, ch. 210. THE NEGOTIABLE INSTRUMENTS LAW THE NEGOTIABLE INSTRUMENTS LAW A general act relating to Negotiable Instruments (being an act to establish a law uniform with the laws of other States on that subject.)* Article I. General provisions. (§§ 190-196.) II. Form and interpretation of negotiable instruments. (§§ 1-23.) m. Consideration. (§§ 24-29.) IV. Negotiation. (§§ 30-50.) V. Eights of holder. (§§ 51-59.) VI. Liabilities of parties. (§§ 60-69.) VII. Presentment for payment. (§§ 70-88.) VHI. Notice of dishonor. (§§ 89-118.) IX. Discharge of negotiable instruments. (M 119-125.) X. Bills of exchange; form and interpre- tation. (§§ 126-131.) XI. Acceptance. (§§ 132-142.) XII. Presentment for acceptance. (§§ 143- 151.) XIII. Protest. (§§ 152-160.) XIV. Acceptance for honor. (§§ 161-170.) XV. Payment for honor. (§§ 171-177.) XVI. Bills in a set. (§§ 178-183.) XVH. Promissory notes and checks. (§<§. 184- 189.) XVIII. Notes given for patent rights and for a speculative, consideration. XIX. Laws repealed; when to take effect. • This is the General Title proposed by the Commissioners on Uni fonnity of Laws, and used in many of the States. It has been held sufficiently comprehensive under a constitutional provision providing that no law shall embrace more than one subject to be expressed in th« title. Gilley v. Harrell, 118 Tenn. 115. 2 THE NEGOTIABLE INSTEUJIEXTS LAW. ARTICLE L Geneeal Pbovisions.* Section 190. Short title. 191. Definitions and meaning of terms. 192. Primary and secondary liability. 193. Eeasonable time — What constitutes. 194. When time for doing act falls on Sunday or a holiday. 195. Instruments made prior to Act. 196. Cases not provided for in Act. Section 190. Short title. — This act shall be known as the negotiable instruments law. Variant readings. — In some states the words " may be cited " are substituted for " shall be known." In Arizona, Connecticut, District of Columbia, Kentucky, Massachusetts, Nebraska, New Hampshire, North Carolina, Ohio, Rhode Island, and Wisconsin the section is omitted. In some States the word " uniform " is inserted before the word " negotiable." Application of the statute — Non-negotiable paper. — The law is eonflned to negotiable instruments. No attempt is made to deal with instruments which are non-negotiable; and they are not gov- erned by the statute. In determining whether the rules of the statute will apply to any particular instrument, it is first neces- sary to ascertain whether such instrument is negotiable, according to the terms of the statute. In many instances the rules will be the same for instruments of either kind; but that is not because instruments which are non-negotiable are governed by the statute, but because the statute is a codification of common-law ruleB which before its adoption applied equally to both classes of in- struments. In other words, a negotiable instrument is governed by the statute and a non-negotiable instrument by the rules of the common law, though frequently these rules will be the same. For example, if a note drawn payable at a bank contains terms * In most of the States these general provisions are put at the erd. GENERAL PROVISIONS. 3 which render it non-negotiable, the provision of section 147, that " 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," would not apply; but the case would be governed by the rule of the common law, which is the same as the statutory rule in some of the States, but different in others. This distinction must be carefully borne in mind, or much con- fusion will result. See Windsor Cement Co. v. Thompson, 86 Conn. 511 ; Reynolds v. Vint, 73 Ore. 528 ; Johnson v. Lassiter, 155 N. C. 47. Municipal Bonds. — The statute applies to municipal bonds. Borough of Montvale v. Peoples' Bank, 74 N. J. L. 464. Construction of the law. — For several years some of the court9 were disposed to give the statute a narrow construction, and to limit the effect of the language whenever a literal reading would change the law of the State; and these courts, in construing the statute, treated it as if it were of purely local origin and con- cern. But the courts now very generally recognize that, as the law was different in the different States, an act intended to be uniform in all the States, must necessarily have changed local rules; and the tendency of late years has been to apply the lan- guage of the act according to its natural import, without regard to whether or not the effect would be to change the law of the state. Thus, the Supreme Court of Massachusetts, after observ- ing that "it is matter of common knowledge that the Negotiable Instruments Act was adopted for the purpose of codifying the law upon the subject of negotiable instruments, and making it uniform throughout the country," said: "The language of the Act is to be construed with reference to the object to be attained. Its words are to be given their natural and common meaning, and the prevailing principles of statutory interpretation are to be applied. Care should be taken to adhere as closely as possible to the obvious meaning of (he act without resort to that which had theretofore been the law of this commonwealth, unless nec- essary to dissipate obscurity or doubt, especially in instances where there is a difference in the law of the different states." Union Trust Co. v. McGinty, 212 Mass. 205. So, the Supreme Court of Wisconsin has said : ' ' Such statute was enacted for the purpose of furnishing, in itself, a certain guide for the determi- 4 THE NEGOTIABLE INSTRUMENTS LAW. nation of all questions covered thereby relating to commercial paper, and, therefore, so far as it speaks without ambiguity as to any such question, reference to case law as it existed prior to the enactment is unnecessary and is liable to be misleading. The negotiable instruments law is not merely a legislative codification of judicial rules previously existing in this state, making that written law which was before unwritten. It is, so far as it goes, an incorporation into written law of the common law of the state, so to speak, the law merchant generally as recognized here, with such changes or modifications and additions as to make a system harmonizing, so far as practicable, with that prevailing in other states. That it contains some quite material changes in previous rules, governing commercial paper we have had occasion heretofore to point out." Columbian Banking Co. v. Bowen, 134 Wis 218. So, in a late case, the Court of Appeals of Kentucky said: "The Negotiable Instruments Act was adopted by the several states for the purpose of establishing uniformity in the law regu- lating negotiable instruments. Where the act speaks, it controls and its meaning should be ascertained by interpreting the lan- guage used, and not by assuming that the common law on the subject should remain unaltered." First State Bank v. Williams, 164 Ky. 143. And so, the Supreme Court of Iowa has said that in construing the statute the court is to keep in mind that the primary object in adopting it was to establish a uniform law. And in a late case in New York it was said: " When the question arises under one of the uniform statutes relating to commercial paper which the courts of this state have not yet passed upon, it is the duty of trial courts, in the interest of a real uniformity in the application of such statutes, to adopt and follow the inter- pretations thereof made by the courts of other states. ' ' Brown v. Brown, 91 Misc. 220. To the same effect, see also Century Bank v. Breitbart, 89 Id. 308. See also State Bank of Halstad v. Bilstad, 162 Iowa, 433; Rockfield v. First Nat. Bank of Springfield, 77 Ohio St. 311; Downey v. O'Keefe, 26 R. I. 571; Thorpe v. White, 188 Mass. 333; Toole v. Crafts, 193 Mass. 110; Hartington Nat. Bank v. Breslin, 88 Neb. 47; Ex parte Goldberg & Lewis, 67 So. Rep. (Ala.) 839; Windsor Cement Co. v. Thompson, 86 Conn. 511; B. & 0. R. R. Co. v. First Nat. Bank, 102 Va. 753; Vander Ploeg v. Van Zuuk, 35 Iowa, 350 ; Holliday State Bank v. Hoffman, 85 Kans. 71; First Nat. Bank v. Miller, 139 Wis. 126; Cherokee Nat. Bank v. Union Trust Co., 33 Okla. 342 ; Baumeister v. Kuntz, GENERAL PROVISIONS. 5 53 Fla. 340; Farquhar Co. v. Higham, 16 N. D. 106; McCarthy v. Kepreta, 24 N. D. 395; Lightner v. Roach, 95 Atl. Rep. (Md.) 62; First Nat. Bank v. Meyer, 152 N. "W. Rep. (N. D.) 657; Trustees of Am. Bank v. McComb, 105 Va. 473; Payne v. Zell, 98 Va. 249; American Trust Co. v. Canevin, 184 Fed. Rep. 657. And as the statute was adopted for the purpose of producing uniformity, the courts, in construing it, seek to aid that purpose. See cases cited above. Enactment in other states — Judicial notice. — But though the courts in construing the act take cognizance of the fact that it has been adopted in other states, yet, in a case arising under the laws of another state, the court will not take judicial notice that it has been enacted in that state; but, in the absence of evidence upon the subject, will presume that the law of such state is the same as the common law before the enactment. Demelman v. Brazier, 193 Mass. 589. Hence, the adoption of the statute in the state where the cause of action arose must, where the action is brought in another state, be proved as a fact. But see Gleason v. Thayer, 87 Conn. 248, 251. Rule in Federal court. — While doubt has sometimes been ex- pressed as to how far the Federal courts would be bound by the statute, the question appears to be simple enough upon principle. A man making, or drawing, or indorsing a negotiable instrument does so with respect to the law as it exists at the time. If there is no statute on the subject, then the contract is made with refer- ence to the law merchant, and as to what this law is the Federal courts are not bound by the decisions of the State courts. But where the law under which the parties contract is statutory, then it is the statute, and not the law merchant, by which the contract is to be governed; and the Federal court in such case has not to determine what the law is, but has merely to apply the statute. Hence, it has been held that though the Federal court is not bound to follow the view expressed by the highest court of the state as to any rule of the law merchant, yet where the state has en- acted the Negotiable Instruments Law, and its provisions are ap- plicable, the Federal court is bound to give effect to the statute. Smith v. Nelson Land & Cattle Co., 212 Fed. Rep. 56. And in Schmidt v. Bank of Commerce, 234 U. S. 64, the Supreme Court appears to have assumed that the statute would apply. 6 THE NEGOTIABLE INSTRUMENTS LAW. § 191. Definitions and meaning of terms. — In this act, unless the context otherwise requires: "Acceptance " means an acceptance completed by delivery or notification. "Action " includes counter-claim and set-off. " Bank " includes any person or association of per- sons carrying on the business of banking, whether in- corporated 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 constructive, 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 in- corporated or not. " Value " means valuable consideration. " Written " includes printed, and " writing" in- cludes print. § 192. Primary and secondary liability. — The per- son "primarily" liable on an instrument is the person who by the terms of the instrument is absolutely re- quired to pay the same. All other parties are " sec- ondarily " liable. Variant readings. — In Kansas the last sentence of this section is omitted. GENERAL PROVISIONS. 7 Construction of section. — This section is to be construed in con- nection with section 18, which provides that "no person is liable 'an the instrument whose signature does not appear thereon;" and also with section 127, which provides that ' ' the drawee is not liable on the bill unless and until he accepts the same;" and with section 189, which provides that ' ' the bank is not liable to the holder unless and until it accepts or certifies the check." These are not, by the terms of the instrument, absolutely required to pay the same until such acceptance or certification. In Rouse v. Wooten (140 N. C. 557, 558), it was said: "A surety comes squarely within the defini- tion of a person whose liability is primary, for he is by the terms of the instrument absolutely required to pay the same." But ob- viously this would not be so in the case of one signing as " guaran- tor," since he is liable only where there is default by the party whose obligation he has guaranteed. Accommodation maker. — The question whether a party is " primarily " or " secondarily " liable is to be determined by his relation to the paper itself, and not by his agreement with some other party; and hence the maker is " primarily " liable, even though he has signed for the accommodation of the indorser. See note to section 120, and cases there cited. § 193. Reasonable time — what constitutes. — In de- termining what is a " reasonable time " or an " un- reasonable time," regard is to be had to the nature of the instrument, the usage of trade or business (if any) with respect to such instruments, and the facts of the particular case. Whether question one of law or fact. — Where the facts are doubtful or disputed, the question of reasonable time is a mixed question of law and fact But when the facts are clear and un- disputed, the question is one of law for the court. Commercial Nat. Bank v. Zimmerman, 185 N. T. 310; German Am. Bank v. Mills, 99 App. Div. (N. T.) 312; Prescott Bank v. Coverly, 7 Gray, 217; Gilmore v. Wilbur, 12 Pick. 124; Holbrook v. Burt, 22 Pick. 555 ; Northwestern Coal Co. v. Bowman, 69 Iowa, 153 ; Aymar v. Beers, 7 Cow. 705; Tomlinson Carriage Co. v. Kinsella, 31 Conn. 273. See note to section 131. 8 THE NEGOTIABLE INSTRUMENTS LAW. § 194. When time for doing act falls on Sunday or holiday. — 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. Variant readings. — In North Carolina this section ia omitted. Origin of section.— This section was adapted from sections 26 and 27 of the New York Statutory Construction Law. § 195. Instruments made prior to act. — The provi- sions of this act do not apply to negotiable instruments made and delivered prior to the passage hereof. Variant readings. — This section is omitted in Arizona and Florida. In Minnesota the following is added at the end of the section: " Nor shall they be construed as modifying, repealing or superseding any of the terms and provisions of section 2747, Revised Laws, 1905." In South Dakota the section reads: "Noth- ing in this Act contained shall be construed as in any manner re- pealing chapters 128, 140 and 141 of the Laws of 1905, and chap- ter 74 of the Laws of 1907." Time when statute took effect. — As to when the act took effect in the different states, see Walker v. Dunham, 135 Mo. App. 396; Gate City Bank v. Schmidt, 168 Mo. App. 153; First Nat. Bank v. Bertoli, 88 Vt. 421; Dorsey v. Wellman, 85 Neb. 262; Dotson v. Owsley, 141 Ky. 452; Fassler v. Streit, 92 Neb. 786. Paper made before, and indorsed after, act took effect. — Where paper was made and delivered prior to the adoption of the act, the liability of indorsers thereon is to be determined by the law as it existed then, though such indorsements were made after the date on which the act was to go into effect. Mackintosh v. Gibbs, 81 N. J. L. 37; Gate City Nat. Bank v. Schmidt, 168 Mo. App. 153. § 196. Cases not provided for in act. — In any case not provided for in this act the rules of the law mer- chant shall govern. GENERAL PROVISIONS. 9 Variant readings. — In many of the states the section reads: " The rules of law and equity, including the law merchant." But just what this means might be difficult to determine. Of course, if the statute does not apply, the rules of law and equity must govern. But what rules? The Law Merchant is a distinct branch of law, and under it certain rules have grown up ; and, hence, when we speak of the rules of the law merchant, we convey the idea of a definite set of rules. But when we speak of " the rules of law and equity including the law merchant," we mean — if we mean anything at all — the whole body of the law, and the vagueness of the statement obscures and confuses. For a lucid exposition of this subject, see the report of the Committee on Uniformity of Judicial Decisions in Cases arising under Uniform Laws. Pro- ceedings Twenty-Fourth Conference (1914), p. 244. Prior statutes. — It is to be observed that the rules governing in such cases are not those which existed by virtue of a statute. In most of the states all prior statutes upon the subject of bills and notes are repealed; and where a case arises which is not pro- vided for in the Negotiable Instruments Law, it is not to be deter- mined by resort to any .of the former statutes, but by reference to the rules of the law merchant. In a few of the states, however, certain statutes are expressly excepted from the effect of the repeal- ing clause. These are indicated in the notes. 10 THE NEGOTIABLE INSTRUMENTS LAW. ARTICLE II. Form and Interpretation Section 1. Bequirements in general. 2. When sum payable is certain. 3. When promise is unconditional. 4. Determinable future time; what consti- tutes. 5. Provisions which do not impair negotia- bility. 6. Matters not affecting validity, etc. 7. When payable on demand. 8. When payable to order. 9. When payable to bearer. 10. What terms sufficient. 11. Presumption as to date. 12. Ante-dated and post-dated. 13. When date may be inserted. 14. Filling blanks — rights of holder. 15. Incomplete instrument not delivered. 16. Necessity for delivery — presumption. 17. Construction where instrument is ambig- uous. 18. Only person signing liable — trade name. 19. Signature by agent — authority — how shown. 20. Signature on behalf of principal. 21. Signature by procuration — effect of. 22. Indorsement by infant or corporation. 23. Forged signature inoperative — estoppel. FORM AND INTERPRETATION. 11 § 1. Requirements to which instrument must con- form. — An instrument to be negotiable must conform to the following 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 de- terminable future time; 4. Must be payable to order, or to bearer ; and 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty. Variant readings. — In Arizona, Idaho, Iowa, Kentucky, North Carolina and Wyoming subdivision four reads as follows: " Must be payable to the order of a specified person or bearer." But the words " specified person " are surplusage, since by section 8 this is declared to be the effect of the term "order." In Wis- consin a provision is added to subdivision five as follows: "But no order drawn upon or accepted by the treasurer of any county, town, city, village or school district, whether drawn by any of- ficer thereof or any other person, and no obligation nor instru- ment made by any such corporation, or any officer thereof, un- less expressly authorized by law to be made negotiable, shall be, or shall be deemed to be, negotiable according to the custom of merchants, in whatever form they may be drawn or made. Ware- house receipts, bills of lading and railroad receipts upon the face of which the words ' not negotiable ' shall not be plainly written, printed or stamped, shall be negotiable as provided in section 1676 of the Wisconsin Statutes of 1878, and in sections 4194 and 4425 of these statutes, as the same have been construed by the Su- preme Court." Form of writing. — It is not necessary that the instrument or any of the signatures thereto should be in ink ; but the writing may be in pencil. Geary v. Physic, 5 Barn. & Cress. 234; Brown v. Butchers' & Drovers' Bank, 6 Hill 443. And one may become a party to the paper by any mark or designation he chooses to adopt, 12 THE NEGOTIABLE INSTRUMENTS LAW. provided it be used as a substitution for his name, and he intend to bind himself. Baker v. Dening, 8 Adol. & Ellis, 94; Brown v. Butchers' & Drovers' Bank (supra). In the case last cited the in- dorsement was made with a lead pencil, and in figures thus, " 1, 2, 8," no name being written; and it was held that, the jury having found that the figures were made by B as a substitution for his proper name, intending to be bound thereby, he was liable. Proof of signature. — The signature may be proven by the tes- timony of one who saw it placed there, or by the testimony of those who are familiar with the handwriting of the person whose signature it purports to be, or who have seen him write and know his signature, or it may be proven by the testimony of ex- perts, by comparison, or by comparison by the jury, with writing proved to be genuine. In re Estate of Chismore, 166 Iowa, 217. Instruments payable otherwise than in money. — The rule of the law merchant that the instrument must be payable in money, pre- vailed in most of the states. But in some states — as, for example, in Georgia — certain instruments are declared by statute to be nego- tiable, though they provide that payment is to be made in goods or merchandise. See also section 6, subdivision 5. In New York warehouse receipts issued by certain corporations are declared to be negotiable. See Hanover Nat. Bank v. American Dock and Trust Co., 148 N. Y. 612 ; Corn Exchange Bank v. Same, 149 N. Y. 174. The act does not repeal these statutes. An instrument which, by its true construction is an unconditional order to pay a certain sum of money at a fixed future time, to the payee or order, is a bill of exchange under the terms of the statute. Torpey v. Tebo, 184 Mass. 307. Instruments not payable to order or bearer. — By the law mer- chant an instrument payable to a particular person and not to his order or to bearer was not negotiable. Backus v. Danforth, 10 Conn. 297. As to bonds payable to bearer and coupons, see Carr v. Leferre, 27 Pa. St. 413; County of Beaver v. Armstrong, 44 Pa. St. 63; Nat. Exchange Bank v. Hartford, etc., R. R. Co., 8 R. I. 375. As to Treasury notes, see Prazer v. D'Quillers, 2 Pa. St. 200. See section 9. An instrument which is not payable to order or bearer is not within the terms of the statute. Owen v. Blackburn, 161 App. Div. (N. Y.) 827; Kerr v. Smith, 156 Id. 807; Hilborn v. Pennsylvania Cement Co., 145 Id. 422; Westberg v. FORM AND INTERPRETATION. 13 Chicago L. & C. Co., 117 Wis. 589. In Tennessee the Act has re- pealed Shannon's Code, § 3506, providing that every note, whether payable to order or not, shall be negotiable in the same manner as promissory notes. Gilley v. Harrell, 118 Tenn. 115. Uncertainty as to amount. — The negotiable character of a note is destroyed by a provision therein reciting that if the maker allow the taxes or any other public rates and assessments on the mortgaged property to become delinquent, or in case any taxes or assessments shall be levied against the holder on account of the note, then the whole amount secured shall become due and pay- able and the mortgagee may at once proceed to collect the note and foreclose the mortgage given to secure the same, since there is an implication that the maker of the note is charged with the payment of the taxes, etc., the amount of which is uncertain. Bright v. Offield, 81 Wash. 442. But a promissory note is not rendered non-negotiable by the insertion of the following provi- sion: "A discount of 6 per cent, will be allowed if paid in full within fifteen days from date." Farmers' Loan & Trust Co. v. Planck, 152 N. W. Rep. (Neb.) 390. See note to section 2. Words " without defalcation."— The words " without defalca- tion," sometimes used in notes and bills, add nothing whatever to the force and effect of the instrument, either before or after matu- rity, and are mere surplusage. First Nat. Bank v. Lewis, 57 Colo. 125, 131. In this case the court said: "These words are nothing more than a relic of pronounced antiquity in the law, a mere remnant of common-law forms, and wholly without meaning in the light of modern usage under the practically uniform provi- sions of the Negotiable Instruments Law now in force in this and many other states." § 2. When sum payable is a sum certain. — The sum payable is a sum certain within the meaning of this act, although it is to be paid: 1. With interest; or 2. By stated instalments; or 3. By stated instalments, with a provision that upon default in payment of any instalment or of interest the whole shall become due; or li THE NEGOTIABLE INSTRUMENTS LAW. 4. With exchange, whether at a fixed rate or at the current rate; or 5. With costs of collection or an attorney's fee, in case payment shall not be made at maturity. Variant readings. — In Idaho, Iowa, North Carolina and Wyom- ing, the words " or of interest " in subdivision three are omitted. In Nebraska a proviso is added to subdivision five as follows: "Provided, that nothing herein contained shall be construed to authorize any court to include in any judgment on an instrument made in this state any sum for attorney's fees or other costs not allowable in other cases." In North Carolina an additional sec- tion is added as follows: " Nothing in this chapter shall au- thorize the enforcement of an authorization to confess 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 chapter; but the mention of such provision in such instrument shall not affect the other terms of such instruments or the negotiability thereof." Revisal of 1905, section 2346. In South Dakota the following is substituted for subdivision five: " Provided, that nothing herein contained shall be construed to authorize any court to include in any judg- ment or an instrument made in this state any sum for attorney's fees, or other costs not now taxable by law." Payment by installments. — Promissory notes are not infre- quently made payable in this way, and the negotiable character of a note so payable was well established. Markey v. Casey, 108 Mich. 184; Wright v. Irwin, 33 Mich. 32. In this case the note was for $1500, to be paid twenty per cent, a month from the 1st of July, 1871. For cases arising under subdivision three, see Hodge v. Wallace, 129 Wis. 84; Bright v. Offield, 81 Wash. 442. Payment of exchange. — The rule prescribed in the statute is that adopted by most of the courts which had passed upon this point. See Second National Bank of Aurora v. Basuier, 65 Fed. Rep. 58; Hastings v. Thompson, 54 Minn. 184; Flagg v. School District, 4 N. D. 30; Whittle v. Fond du Lac National Bank (Tex.), 26 S. W. Rep. 1106. Contra, Culbertson v. Nelson, 93 Iowa, 187. Stipulation for Attorney's Fees.— On the question whether a stipulation for an attorney's fee rendered the paper non-negoti- FORM AND INTERPRETATION. 15 able, there was much conflict in the decisions. The rule adopted in the Act is the one sustained by the weight of authority. It is supported by National Bank v. Sutton Mfg. Co., 6 U. S. App. 312, 331; Oppenheimer v. Farmers' and Merchants' Bank, 97 Tenn. 19; Montgomery v. Crossthwait, 90 Ala. 553; Trader v. Chichester, 41 Ark. 242; Stapleton v. Louisville Banking Co., 95 Ga. 802; Dorsey v. Wolff, 142 111. 589; Stoneman v. Pyle, 35 'Ind. 103; Shenandoah Nat. Bank v. Marsh, 89 Iowa 173; Benn v. Kutzschan, 24 Oregon 28; Seaton v. Scoville, 18 Kans. 433; Dietrich v. Boylie, 23 La. Ann. 767; Second National Bank v. Anglin, 6 Wash. 403; Heard v. Dubuque Bank, 8 Neb. 10; Stark v. Olsen, 44 Neb. 646. The courts which adopted this rule took the view that so long as the amount payable is certain up to the time of maturity and dishonor, it is not essential that after that time, when the instrument has become non-negotiable for other reasons, the certainty as to the amount should continue. In the Tennessee case above cited the court said: " Upon a careful review of the authorities, we can perceive no reason why a note otherwise imbued with all the attributes of negotiability is rendered non-negotiable by a stipulation which is entirely inoper- ative until after the maturity of the note and its dishonor by the maker. The amount to be paid is certain during the currency of the note as a negotiable instrument, and it only becomes uncertain after it ceases to be negotiable by the default of the maker in its payment. It is eminently just that the creditor who has incurred an expense in the collection of the debt should be reimbursed by the debtor by whom the action was rendered necessary, and the expense entailed." The statute has changed the law in Mary- land (Maryland Fertilizing Co. v. Newman, 60 Md. 584) ; North Carolina (First National Bank v. Bynum, 84 N. C. 24) ; Pennsyl- vania (Woods v. North, 84 Pa. St. 407) ; Oklahoma (American Nat. Bank v. Halsell, 43 Okl. 126). See also Jones v. Rodetz, 27 Minn. 240; First Nat. Bank v. Gay, 63 Mo. 38; First Nat. Bank v. Larsen, 60 Wis. 206; Morgan v. Edwards, 53 Wis. 599; Sylves- ter Bleckley Co. v. Alewine, 48 S. C. 308. The question does not appear to have been passed upon by the New York courts. Where amount of attorney's fee not fixed. — Under this section it is not necessary that the amount of the attorney's fee should be named; but a stipulation for a reasonable attorney's fee is within 16 THE NEGOTIABLE INSTRUMENTS LAW. the meaning of subdivision five. Potts v. Crudup, 150 Pac. Rep (Okl.) 170; MeCormick v. Swem, 36 Utah, 6. Same subject — Effect of the statute. — In the previous editions of this work, the view was expressed that as the statute does not declare that a stipulation for an attorney's fee shall be valia, but merely that it shall not render the paper non-negotiable, no change has been made in the law in those states where such stipulations were held to be void as against public policy; and this view has been since adopted in Ohio and West Virginia. Miller v. Kyle, 85 Ohio St. 186; Raleigh County Bank v. Poteet, 74 W. Va. 511. Where such a stipulation is valid under the law of the state where the instrument is made and is payable, it will be en- forced in an action brought in New York. First Nat. Bank v. Fleitmann, 168 App. Div. (N. Y.) 75. For cases in which subdivi- sion five has been applied, see Oglesby v. Bank of New York, 114 Va. 663; First National Bank v. Miller, 139 Wis. 126; Carsey v. Swan, 150 Ky. 473; Davis v. McCall, 176 Mo. App. 198; Bank of Neelyville v. Lee, 182 Mo. App. 185; First Nat. Bank v. Stain, 186 Mo. App. 439; Pityer v. McCune, 152 111. App. 145; Bright v. Offield, 81 Wash. 442; Mechanics' Amer. Nat. Bank v. Cole- man, 204 Fed. Eep. 24 § 3. When promise is unconditional. — An unquali- fied 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 reimbursement 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. But an order or promise to pay out of a particular fund is not unconditional. Indication of Particular Fund. — The mere mention of a fund in a draft does not necessarily deprive it of the character of com- mercial paper, but it must further appear, in order to have such effect, that it contains either an express or implied direction to pay it therefrom, and not otherwise. Schmittler v. Simon, 101 FORM AND INTERPRETATION. 17 N. Y. 554, 560. In the case cited, a draft drawn upon an ex- ecutor contained the words, " and charge the amount against me and of my mother's estat-." It was held that the reference to the estate was not a direction to pay out of it, but that the estate was referred to simply as a means of reimbursement. So, in Macleod v. Luce, 2 Stra. 762; 2 Ld. Raym. 1481, where the instru- ment contained the words, " as my quarterly half -pay to be due from 24th of June to 27th of September next, by advance," the court said, ' ' The mention of the half -pay is only by way of direc- tion how he shall reimburse himself, but the money is still to be advanced on the credit of the person;" and the court accordingly held the instrument to be a bill of exchange. Likewise, in Red- man v. Adams. 51 Me. 433, where the drawer added, " and charge the same against whatever amount may be due me for my share of fish," it was held that these words were a mere indication of the means of reimbursement, and did not destroy the negotiable character of the draft. And a similar ruling was made in Whit- ney v. Eliot National Bank 137 Mass. 351, where the directions were, " charge the same to account of 250 bbls. meal ex-schooner 'Aurora Borealis ' ". See also Nichols v. Ruggles, 76 Me. 27. The test is whether the drawee is confined to the particular fund, or whether, though a specified fund is mentioned, he could have the power to charge the bill up to the general account of the drawer, if the designated fund should turn out to be insufficient. Munger v. Shannon, 61 N. Y. 251, 255. A draft in the following form: " Pay to the order of the First National Bank of Hutch- inson, Kansas, $1,500 on account of contract between you and the Snyder Plaining Mill Company " was held negotiable, the words " on account of," etc., being deemed an indication of the fund to which the drawee was to look for reimbursement, and not a direction to charge a particular fund. First Nat. Bank of Hutch- inson v. Lightner, 74 Kan. 736. Statement of transaction. — An example of a statement of this sort is a note expressed to be in payment of certain tracts of land. First Nat. Bank of Michael, 96 N. C. 53. But the most frequent in- stances are notes given in payment of the purchase price of goods and chattels. Thus, in Chicago Railway Equipment Co. v. Mer- chants' Nat. Bank, 136 U. S. 268, it was held that the negotiable character of a promissory note was not affected by a provision that it was given with others in payment for certain cars, the title to 2 18 THE NEGOTIABLE INSTRUMENTS LAW. which should remain in the payee until all the notes of the series should be paid. The court said " The transaction is, in legal effect, what it would have been if the maker, who purchased the cars, had given a mortgage back to the payee, securing the notes on the property until they were all fully paid. The agreement, oy which the vendor retains the title and by which the notes are secured on the cars, is collateral to the notes, and does not affect their negotiability. It does not qualify the promise to pay at the time fixed, any more than would be done by an agreement of the same kind, embodied in a separate instrument in the form of a mortgage." So, in Mott v. Havana Nat. Bank, 22 Hun, 354, a like ruling was made with respect to a provision in a note that it was to be " in part payment for a portable engine, which engine shall be and remain the property of the owner of this note until the amount hereby secured is paid. ' ' So, where there was a simi- lar recital as to the title of a piano, for the price of which the note was given. Third Nat. Bank v. Bowman, 50 App. Div. (N. Y.) 66. And so, where there was a recital in the note that it was " given in consideration of a certain patent right." Hereth v. Meyer, 33 Ind. 511. Again, it has been held that the words " as per terms of contract " written after the words " value received " on the fact of a promissory note by the maker before its delivery, do not destroy the negotiability of the note or make its payment to a holder in due course conditional upon the performance of the contract intended to be referred to by the maker. National Bank of Newbury v. Wentworth, 218 Mass. 30. So, in a late case in New York, it was held that a note in the following form was nego- tiable: " I shall pay to the order of the American Hoist & Der- rick Co., on the 30th day of August, 1911, in the city of New York, the sum of two thousand three hundred and forty ($2,340) dollars currency, for amount if the second installment agreed on of a crane of their manufacture purchased on this date, according to the specifications of their representative Mr. H. S. Johannsen." Merchants' Bank v. Santa Maria Sugar Co., 162 App. Div. 248. So, where a check contained the words ' ' This check may not be paid unless object for which drawn is stated," and the further words "For Wilkes," it was held that these words did not de- stroy its negotiable character. Brown v. Cow Creek Sheep Co., 21 Wyo. 1. See also Equitable Trust Co. v. Taylor, 146 App. Div. 424; Bright v. Offleld, 81 Wash. 442; Hanna v. McGrory, 141 Pac. Rep. (N. Mex.) 996. But where the recitals in the note FORM AND INTERPRETATION. 19 make it dependent upon the terms of a contract referred to therein it is non-negotiable. Pope v. Lumber Co., 162 N. C. 206. See also Kimpton v. Studebaker, 14 Idaho, 552. Payment out of a particular fund. — An order on a savings bank, " Pay C, or order, three hundred dollars, or what may be due on my deposit book No. E, page 632," is payable out of a par- ticular fund, and therefore not negotiable under the statute. Na- tional Savings Bank v. Cable, 73 Conn. 568. See also, Lowery v. Steward, 25 N. Y. 239; Munger v. Shannon, 61 N. Y. 251: Parker v. City of Syracuse, 31 N. Y. 376; Morton v. Naylor, 1 Hill, 583; Gawken v. De Loraine, 3 Wils. 207. In the New York case first cited the order was: "Please pay to the order of Archibald H. Lowery the sum of $500 on account of twenty-four bales of cotton shipped to you as per bill of lading, by steamer Colorado, inclosed to you in letter." It was held that this was not a bill of ex- change, requiring acceptance to bind the drawers, but a specific draft or order upon a particular fund. The language of the statute payable "out of a particular fund" is the equivalent of the expression found in many of the cases "drawn on the general credit of the drawer." Hibbs v. Brown, 190 N. Y. 167, 175. A clause in the trust securing payment of an issue of bonds pro- vided that, "No present or future shareholder, officer, manager or trustee of the Express Company shall be personally liable as part- ner or otherwise in respect to this bond or the coupons appertain- ing thereto, but the same shall be payable solely out of the assets assigned and transferred to the said Express Company or out of other assets of the Express Company:" — Held, that while a joint stock association differs from a corporation and is like a partner- ship in respect to the individual liability of its members, the asso- ciation issuing the bonds must be regarded as a joint, quasi cor- porate entity; that the bonds having been issued in its name, upon its general credit and binding all -its assets, complied with the requirements for a negotiable instrument, even though the prac- tically unimportant individual liability of members was excluded; that such exclusion did not constitute the general assets, out of which the bonds were payable, a particular fund within the mean- ing of this section. Id. § 4. Determinable future time — What constitutes. — An instrument is payable at a determinable future 20 THE NEGOTIABLE INSTRUMENTS LAW. time, within the meaning of this act, 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 specified therein; or 3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect. Variant reading. — In Wisconsin the following is interpolated before the last sentence : "4. At a fixed period after date or sight though payable before then on a contingency." Mode of Indicating Maturity. — The time of maturity may be indicated in any way that shows the intent. Thus a draft was drawn as follows: " Mr. Wm. Tebo. Will please pay to R. J. Torpey or order two hundred and fifty dollars and charge to my account. Due Oct. 1. John Ryan:" — Held, that the words " due Oct. 1," were to be construed as payable October 1, and hence that the instrument was negotiable. Torpey v . Tebo. 184 Mass. 307. Instrument payable on or before a specified date. — In such a case the legal rights of a holder are clear and certain; the note is due at a time fixed, and it is not due before. The option of the maker, if exercised, would be a payment in advance of the legal liability to pay, and nothing more. See Mattison v. Marks, 31 Mich. 421; Smith v. Ellis, 29 Me. 422; Buchanan v. Wren (Tex.), 30 S. W. Rep. 1077; Riker v. Sprague Mfg. Co., 14 R. I. 402; Kis- kadden v. Allen, 7 Colorado 206; Jordan v. Tate, 19 Ohio St. 586; Albertson v. Laughlin, 173 Pa. St. 525. Thus, where the note was made payable twelve months after date, or before, if the money was made out of the sale of a machine, it was held to be nego- tiable. Ernst v. Steckman, 74 Pa. St. 13. So, in Ackley School District v. Hall, 113 U. S. 135, 140, it was held that municipal bonds, issued under a statute providing that they should be pay- FORM AND INTERPRETATION. 21 able at the pleasure of the district at any time before due, were negotiable. The court said: " By their terms, tney were pay- able at a time which must certainly arrive; the holder could not exact payment before the day fixed in the bonds; the debtor in- curred no legal liability for nonpayment until that day passed." So, where a promissory note is secured by a mortgage the reser- vation in the mortgage of an option to the mortgagor to pay a part of the amount due at any time he may elect before maturity, does not destroy the negotiability of the note. Fisher v. O'Hanlon, 93 Neb. 529. So, a provision in a note that it shall become due at the option of the holder in ease of nonpayment of taxes and assessments on property mortgaged to secure the note, does not render the note non-negotiable, when considered only with reference to the time of payment, and without regard to the amount thereof. Bright v. Offield, 81 Wash. 442. Des Moines Sav. Bank v. Arthur, 163 Iowa 205. But compare Holi- day State Bank v. Hoffman, 85 Kans. 71; Hibernia Bank & Trust Co. v. Dresser, 132 La. 532. For a case applying the Wisconsin statute, see Thorpe v. Mindeman, 123 Wis. 149. Event which is certain to happen. — Thus, a note payable a cer- tain number of days after the death of the maker, or upon demand after the death of the maker, is a good promissory note, because the event is sure to happen. Carnwright v. Gray, 127 N. Y. 92; Hegeman v. Moon, 131 N. Y. 462 ; Gilbert v. Adams, 146 App. Div. (N. Y.) 864. See, also, Shaw v. Camp, 160 111. 425; Martin v. Stone, 67 N. H. 367; Price v. Jones, 105 Ind. 544; Bristol v. War- ner, 19 Conn. 74. So, a note payable at a specified time after the death of a life tenant. McClenathan v. Davis, 149 111. App. 654. But an instrument payable when, or in so many days after, "A shall become of age," would not be negotiable, because it is un- certain whether A will live so long. Goss v. Nelson, 1 Burr, 226; Eice v. Rice, 43 App. Div. (N. Y.) 458. So, a note payable " when A shall marry," Peason v. Garrett, 4 Med. 242; or when a certain ship shall arrive. Coolidge v. Buggies, 15 Mass. 387; Grant v. Wood, 12 Gray, 220. Stipulation for extension. — As to whether the negotiable char- acter of the paper is destroyed by a stipulation to the effect that the indorsers consent that the time of payment may be extended, the courts are not agreed. On the one hand, it is held that such a stipulation makes the time of payment uncertain. Roseville 22 THE NEGOTIABLE INSTRUMENTS LAW. State Bank v. Heslet, 84 Kans. 315; Union Stock Yards Nat. Bank v. Bolan, 14 Idaho, 87. On the other hand, it is held that as such a stipulation neither confers upon the maker the right to demand an extension, nor imposes upon the payee or indorsee any duty to grant one, it cannot have such effect. Longmont Nat. Bank v. Lonkonen, 53 Colo. 489; Farmer v. Bank of Greattinger, 130 Iowa, 469; De Groat v. Focht, 37 Okla. 267; First Nat. Bank of Pomeroy v. Buttery, 17 N. D. 326; Stitzel v. Miller, 157 111. App. 390. Stipulation for confession of judgment. — Where a note con- tains a provision to the effect that the holder may enter judgment thereon at any time whether due or not, it is non-negotiable, since the time of payment may depend upon the whim or caprice of the holder, and is wholly uncertain. First Nat. Bank of Elgin v. Russell, 124 Tenn. 618; Wisconsin Yearly Meeting v. Babler, 115 Wis. 289. Instrument payable upon a contingency. — A draft addressed to a fire insurance company and drawn by its special agent required a trust company to pay the amount thereof to the order of the payee " upon acceptance :" Held, that the words " upon accept- ance " imposed a condition which rendered the draft non-nego- liable. Berenson v. London, etc., Ins. Co., 201 Mass. 172. See also, Hibernia Bank & Trust Co. v. Dresser, 132 La. 532; Tisdale Lum- ber Co. v. Piquet, 153 App. Div. (N. Y.) 266. Happening of contingency. — Thus, where an instrument is made payable when a certain person shall become of age, the fact that he actually attains his majority does not make the instrument negotiable. Goss v. Nelson, 1 Burr, 226. § 5. Provisions which do not impair negotiability. — An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. 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 instrument be not paid at maturity; or FORM AND INTERPRETATION. 23 2. Authorizes a confession of judgment if the instru- ment be not paid at maturity; or 3. Waives the benefit of any law intended for the advantage 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 nothing in this section shall validate any pro- vision or stipulation otherwise illegal. Variant readings. — In Illinois the words " if the instrument be not paid at maturity," in subdivision two, are omitted. In Ken- tucky subdivision three is omitted. In Illinois and Wisconsin the words " or authorize the waiver of exemptions from execution," are added at the end of the section. Mortgage notes. — Notes secured by mortgage are often non- negotiable because they incorporate by reference provisions of the mortgage requiring something to be done in addition to the pay- ment of money. Thus, a provision in the note that if the maker shall do any act whereby the value of the mortgaged property shall be impaired, the whole amount shall become due and pay- able and the mortgagee may proceed to collect the debt and fore- close the mortgage, destroys the negotiability of the note, since it is in effect an undertaking to prevent the doing of certain things in addition to the payment of money, and the provision being similar to a condition authorizing the holder to declare the note due at any time he may deem the debt unsecured. Bright v. Offield, 81 Wash. 443. But a provision in the mortgage that the mortgagor shall pay the taxes assessed against the note and mortgage does not affect the negotiable character of the note. Page v. Ford, 85 Oregon, 450. Collateral notes. — Notes of this sort are often non-negotiable because ot some provisions therein in regard to the time of pay- ment, or because of provisions requiring something to be done in addition to the payment of money. But a statement that col- lateral security has been deposited for the performance of the promise contained in the note is a recital only which does not affect its negotiability. Wise v. Charlton, 4 A. & E. 486; Fan- court v. Thome, 9 Q. B. 312, And a provision merely authorizing 24 THE NEGOTIABLE INSTRUMENTS LAW. the sale of the collateral, if the note be dishonored, does not have this effect. Perry v. Bigelow, 128 Mass. 129; Towne v. Rice, 123 Mass. 67; Biegler v. Merchants' Loan & Trust Co., 62 111. App. 560; Arnold v. Eock River Valley Union R. R. Co., 5 Duer, 207. So, a stipulation in a note payable on demand, giving the bank power to sell the collateral before the maturity of the note, in the event of the securities depreciating in value, does not qualify the effect of the promise to pay ' ' on demand. ' ' Brinden v. Muskegon Savings Bank, 140 N. W. Rep. (Mich.) 549. A statement, how- ever, that the note is "given as collateral security with agree- ment" destroys its negotiable character. Costello v. Crowell, 127 Mass. 293. Provision for deposit of additional collateral. — As to the effect of the usual provision, that in case of a depreciation in the value of the securities, the maker shall deposit additional securities, and that in default of such deposit, the principal sum shall become due and payable, the courts are not agreed. In Kansas and Loui- sana it has been held that such a stipulation destroys the negotia- ble character of the instrument. Holiday State Bank v. Hoffman, 85 Kans. 71; Hibernia Bank & Trust Co. v. Dresser, 132 La. 532. But the Court of Appeals of Kentucky in a late case held the contrary. Finley v. Smith, 165 Ky. 445. In this case the court said: " It is quite usual to pledge collateral as security for the payment of a negotiable note, and we do not think that any nar- row construction of the law should be adopted that would have the effect of impairing the value of this kind of security or that would deny to the holder the right to insist that if the value of the col- lateral deposited should become impaired the maker must strengthen it or else precipitate the maturity of the paper. This condition in the note is merely supplementary to the fixed and con- trolling promises, and is really nothing more than additional se- curity for the payment of the instrument. It is not, strictly speak- ing, ' an order or promise to do an act in addition to the payment of money,' but is rather an order or promise to do an act that will better secure the promise to pay the money stipulated at the time fixed in the note. If this condition or promise would disturb the negotiability of commercial paper, the effect would necessarily be to lessen the value of collateral as security, because holders of pa- per would not be disposed to accept collateral, much of which has a fluctuating value, if they were denied the right to insist that its FORM AND INTERPRETATION. 25 value should be maintained in an amount sufficient to serve the pur- pose for which it was accepted." In Kennedy v. Broderick, 216 Fed. Eep. 137; 132 C. C. A. 381, the defendant executed a note containing over his signature an absolute promise to pay a specific sum 90 days after date at a specific bank waiving demand, protest and notice of nonpayment, and declaring that certain securities de- livered to the payee had been pledged as collateral security. At the left of the signature was a provision that the collateral was of the market value of $5,500; that if the collateral depreciated, the payee might demand additional security or mature the note at once, and that any assignment of the note should carry all the rights to the collateral and that the payee or assignee might sell the collateral at public or private sale : Held, that such provision seemed to be a separate contract of pledge, and though written on the note, did not detract from its negotiability. Collateral note — Eights of indorsee. — A collateral note con- tained a provision as follows: "Having deposited herewith as collateral security for payment of this or any other liability or liabilities of to the holder hereof now due or to become due:" Held, that the security might be applied to the payment of an indebtedness due from the maker to an indorsee. Oleon v. Kosenbloom, 247 Pa. St. 250. The court said: "The term 'holder' as applied to negotiable paper, has always had the well-recognized legal meaning of the payee or indorsee of it, entitled to receive the sum for which it calls. With us the term is now statutory and it means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof. The covenant which made available the property pledged, as security for liabilities of the maker to any person who might become a holder for value before maturity of the notes, may have tended to facilitate the nego- tiation of the paper and the plaintiffs had the advantage of that fact." Id. Judgment notes. — Subdivision two was inserted in the act to meet the requirements in some of the states where judgment notes are in use. Such notes are not known in New York. In Penn- sylvania it was held that the warrant of attorney rendered the note non-negotiable. Overton v. Tyler, 3 Pa. St. 346; Sweeney v. Thickstum, 77 Pa. St. 131. A note which authorizes a confes- sion of judgment at any time after its date, whether due or not, ut not negotiable under the statute; for as the time of payment 26 THE NEGOTIABLE INSTRUMENTS LAW. will thus depend upon the whim or caprice of the holder, it is absolutely uncertain. Wisconsin Yearly Meeting of Freewill Baptists v. Babler, 115 Wis. 289; First Nat. Bank of Elgin v. Russell, 124 Tenn. 618. Waiver of Exemptions. — In some of the states it is a common practice to insert in promissory notes a waiver of the benefits of homestead and exemption laws, and this provision of the act is designed to meet such cases. See Zimmerman v. Anderson, 67 Pa. St. 421; Zimmerman v. Rote, 75 Pa. St. 188. Holder's right of election. — An illustration of this case is the right of the holder to elect to take stock of a corporation in lieu of payment in money. Hodges v. Shuler, 22 N. Y. 114. As the obligation of the maker is to pay in money, and as the payment in stock is not optional with him, the note is not within the rule that a negotiable instrument must not be payable in the alterna- tive. — Id. Saving clause. — The object of the last sentence of this section is to prevent any inference of an intent to validate any agree- ment or stipulation mentioned in the section, where, by any stat- ute or settled policy of the state, the same would be illegal. § 6. Matters which do not affect validity, etc., of instrument. — The validity and negotiable character of an instrument are not affected by the fact that: 1. It is not dated; or 2. Does not specify the value given, or that any value has been given therefor; or 3. Does not specify the place where it is drawn or the place where it is payable; or 4. Bears a seal; or 5. Designates a particular kind of current money in which payment is to be made. But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument. FORM AND INTERPRETATION. 27 Variant readings. — In Illinois subdivision five reads as follows: " Is payable in currency or current funds, or designates," etc. The Illinois statute also omits the last sentence of the section. Absence of date. — Church v. Stevens, 107 N. Y. Supp. 310. See section 17, which provides that "where the instrument is not dated, it will be considered to be dated as of the time it was is- sued. " As between the immediate parties parol evidence is ad- missible to show the true date of a misdated note. Bigge v. Piper, 86 Tenn. 589. Where value not stated. — This was the general rule at common law. Daniel on Negotiable Instruments, $ 108. But formerly in Connecticut a promissory note, not purporting on its face to be for value received did not import a consideration. Edgerton v. Edgerton, 8 Conn. 6; Bristol v. Warner, 19 Conn. 7. Presence of seal. — Prior to the statute the Court of Appeals of N8w York held that the commercial paper of a corporation did not lose the quality of negotiability by having attached thereto the corporate seal. Chase Nat. Bank v. Faurot, 149 N. Y. 532; Weeks v. Esler, 143 N. Y. 374. See also Mackay v. St. Mary's Church, 15 R. I. 121. The same rule had been applied to munici- pal bonds under seal. Bank of Rome v. Village of Rome, 19 N. Y. 20; Mercer County v. Hacket, 1 Wall. 83. And to the bonds of private corporations. Brainard v. N. Y. & H. R. R. Co., 25 N. Y. 496. So it was held that the negotiability of a United States treasury note was not restrained or affected by the fact that it was under the treasury seal. Dinsmore v. Duncan, 57 N. Y. 573. In Mercer County v. Hacket, supra, it was said by Justice Grier, speaking of bonds issued under seal: " But there is nothing im- moral or contrary to good policy in making them negotiable if ihe necessities of commerce require that they should be so. A mere technical dogma of the courts or the common law cannot prohibit the commercial world from inventing or issuing any species of security not known in the last century." See also Mason v. Frick, 105 Pa. St. 162 and cases cited; Morris Canal, etc. Co. v. Fisher, 9 N. J. Eq. 699; National Exchange BanK ▼. Sartford P. & F. R. Co., 8 R. I. 375; Jackson v. Myers, 43 Md. 452; Muth v. Dolfield, 43 Md. 466. Contra, Osborne v. Hubbard, 20 Oregon 318. The rule adopted in the act existed by statuxe in the following states: Colorado, Florida, Georgia, Illinois, 28 THE NEGOTIABLE INSTRUMENTS LAW. Kansas, Massachusetts, Nebraska, North Carolina, Ohio, and Ten- nessee. For cases arising under the statute see Clarke v. Pierce, 215 Mass. 552; St. Paul's Episcopal Church v. Fields, 81 Conn. 670 ; Bank of Houston v. Day, 145 Mo. App. 410 ; Arnd v. Heckert, 108 Md. 300. Particular kind of money. — Thus, a note payable in gold coin is negotiable. Chrysler v. Griswold, 43 N. Y. 209. So is a note payable " in bank notes current in the city of New York." Keith v. Jones, 9 Johns. 120. A note payable " in New York state bills or specie." Judah v. Harris, 19 Johns. 144. And a note payable " in current Florida funds." Williams v. Moseley, 2 Fla. 304. But see Wright v. Hart 's Admr., 44 Pa. St. 454, where it was held that a note payable " in current funds at Pittsburgh " was not negotiable. See also Ford v. Mitchell, 15 Wis. 304; Piatt v. The Sauk County Bank, 17 Wis. 222 ; Lindsey v. McClelland, 18 Wis. 481; Klauber v. Biggerstoff, 47 Wis. 551. Saving clause. — In a number of the states it is required that notes given in payment of patent rights shall have written on the face thereof " given for a patent right." So, there are statutes requiring that what are known as ' ' Bohemian oats ' ' notes shall state the nature of the consideration for which they were given. And so, there are statutes which require this in the case of notes given in payment for lightning rods or stallions, or notes given to " peddlers." The last sentence of the section is intended to pre- vent any repeal of such statutes. The New York statutes on the subject have been incorporated into the act. See pages 256-258. § 7. When payable on demand. — An instrument is payable on demand: 1. Where it is expressed to be payable on demand, or at sight, or on presentation; or 2. In which no time for payment is expressed. 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 at sight. — By the law merchant there are some distinctions between instruments payable on demand and FORM AND INTERPRETATION. 29 those payable at sight; as, for example, in the matter of days of grace. See Daniel on Negotiable Instruments, U 617-619, and au- thorities there cited. This was also the effect of former statutes in some of the states. Walsh v. Dart, 12 Wis. 635. The new statute abolishes all these distinctions. Where no time expressed. — As to instruments in which no time of payment is expressed the Act makes no change in the law. See Messmore v. Morrison, 172 Pa. St. 300; Hall v. Toby, 110 Pa. St. 318; James v. Brown, 11 Ohio St. 601; Holmes v. West, 17 Cal. 623; Porter v. Porter, 51 Me. 376; Keyes v. Fcustomaher, 24 Cal. 329; Bank v. Price, 52 Iowa 530; Libby v. Mekelborg, 28 Minn. 38; Eoberts v. Snow, 28 Neb. 425; Bacon v. Page, 1 Conn. 405; Raymond v. Sellick, 10 Conn. 485; Dodd v. Denny, 6 Oregon 156. Ajid the legal intendment that the instrument is payable on demand cannot be changed by parol proof. Roberts v. Snow, 28 Neb. 425 ; Thompson v. Ketcham, 8 Johns. 146 ; Sheldon v. Heaton, 88 Hun, 535; Gaylord v. Van Loan, 15 Wen. 308; McLeod v. Hun- ter, 29 Misc. N. Y. 558 (a case arising under the statute) ; Koehn- ing v. Muemminghoff, 61 Mo. 403; Self v. King, 28 Tex. 552. The words " on demand " may be added without avoiding tne instrument. Byles on Bills, 210. Overdue paper. — This rule was well established by numerous decisions. See Berry v. Robinson, 9 Johns. 121; Leavitt v. Put- nam, 1 Sandf. 199; Bassonhorst v. Wilby, 45 Ohio St. 336; Light v. Kingsbury, 50 Mo. 331; Smith v. Caro, 9 Oregon 280; Bemis v. McKenzie, 13 Fla. 553. It is commonly said that the indorse- ment of a bill or note which is overdue is equivalent to drawing a new instrument payable at sight. Bishop v. Dexter, 2 Conn. 419; Mudd v. Harper, 1 Md. 110. In such cases presentment for payment must be made and notice of dishonor given, as in other instances of instruments payable on demand. Berry v. Robin- son, 9 Johns. 121; Van Hoosen v. Van Alstyne, 9 Wend. 79; Poole v. Tolleson, 1 McCord, 200; Patterson v. Todd, 18 Pa. St. 420; Rosson v. Carroll, 90 Tenn. 90; Brown v. Hull, 33 Gratt. 23. Where a note, negotiated before due, is further negotiated after it has been dishonored, the holder takes the legal title, and can maintain a suit upon it in his own name, in the same manner aa if he had received it before it was due. French v. Jarvia, 29 Conn. 353. 30 THE NEGOTIABLE INSTRUMENTS LAVV. § 8. When payable to order. — The instrument is payable to order where 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: 1. A payee who is not maker, drawer or drawee; or 2. The drawer or maker; or 3. The drawee; or 4. Two or more payees jointly; or 5. One or some of several payees; or 6. The holder of an office for the time being. Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable certainty. Variant readings. — In Illinois after subdivision six a provision is inserted as follows: 7. "An instrument payable to the estate of a deceased person shall be deemed payable to the order of the administrator or executor of his estate." Paper payable to particular person without more. — By the rules of the law merchant an instrument payable to a specified person without the addition of the word " order," or other word of similar import, was not negotiable. Byles on Bills, p. 83; Smith v. Kendall 6 T. R. 123; Maule v. Crawford, 14 Hun, 193; Carnwright v. Gray, 127 N. Y. 92. The English Bills of Exchange Act provides that " a bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a par- ticular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable. ' ' But this change in the law was not deemed advantageous, and was not adopted. Note payable to the order of the maker. — Such a note is not complete until indorsed by the maker. See section 184. Indorsement in the alternative. — Under the statute a note pay- able to either of two payees may be transferred by the indorse- ment of either of them. Union Bank of Bridgewater v. Spies, 130 N. W. Rep. (Iowa) 928; Vorin v. Schoonover, 91 Kans. 530. So. tfOUM AND INTERPRETATION. 31 a note indorsed to two indorsees in the alternative may be trans- ferred by the indorsement of either. Page v. Ford, 65 Oregon 450. But it seems that in an action upoa a note payable to two persons in the alternative the interest is deemed joint, and both must join. Passut v. Heuvner, 81 Misc. (N. Y.) 249. Where payable to holder of office. — For example, a note pay- able to three persons as trustees of an incorporated association, or their successors in office, is negotiable. Davis v. Gore, 6 N. Y. 124. Designation of payee. — The payee need not be designated by name. If his identity can be ascertained with certainty, it is suf- ficient. United States v. White, 2 Hill, 59; Blaekman v. Lehman, 63 Ala. 547. § 9. When payable to bearer. — The instrument is payable to bearer: 1. When it is expressed to be so payable; or 2. When it is payable to a person named therein or bearer; or 3. When it is payable to the order of a fictitious or non-existing person, and such fact was known to the person making it so payable; or 4. When the name of the payee does not purport to be the name of any person; or 5. When the only or last indorsement is an indorse- ment in blank. Variant readings. — In Dlinois subdivision three reads as fol- lows: " When it is payable to the order of a person known by the drawer or maker to be fictitious or non-existent, or of a liv- ing person not intended to have any interest in it." This language is quite inaccurate. Intended by whom ? By the drawer or maker, or by someone else? Besides, an indorser as well as the maker or drawer, may make the instrument payable to a fictitious person, as, for example, where a check drawn to the order of A is in- dorsed by him to B, whom he knows to be fictitious. To such a case the Illinois statute would not apply, since, by its terms, it is limited to cases where the act is that of the maker or drawer. 32 THE NEGOTIABLE INSTRUMENTS LAW. In Illinois subdivision five reads as follows: " When although originally payable to order, it is indorsed in blank by the payee or a subsequent indorsee." This was the rule at common law. But it is not suited to modern conditions, and in England was changed by statute. In the every-day business of the banks it is very in- convenient. For example, if a man in New York should send a merchant in Chicago, his check drawn to the order of that mer- chant, and the latter should indorse the check in blank, and de- posit it in his bank, how would the Chicago bank safely remit that check to New York? Under the statute as it exists in all the other states, the matter is simple enough; for the Chicago bank has only to indorse the paper specially to its correspondent, and then the "last" indorsement not being in blank, the paper is no longer payable to bearer. But under the Illinois statute the check must continue to be payable to bearer merely because the payee has indorsed in blank. See note to section 40. Fictitious payee — Knowledge of maker. — Before the adoption of the statute it was well settled that an instrument drawn to the order of a fictitious person was not to be deemed payable to bearer, unless the fictitious character of the payee was known to the person making the instrument so payable. As said by the Court of Appeals of New York, in Shipman v. Bank of the State of New York, 126 N. Y. 318, " The maker's intention is the con- trolling consideration which determines the character of such paper. It cannot be treated as payable to bearer unless the maKer knows the payee to be fictitious, and actually intends to make the paper payable to a fictitious person." Hence, if the maker or drawer supposes the payee to be an actually existing person (as, for instance, where he is induced by fraud to draw the instrument to the order of a fictitious person whom he supposes to exist), the instrument will not be payable to bearer, and no person can ac- quire the title thereto by delivery. And where the instrument ia drawn payable at a bank, the bank cannot charge the same to the account of its customer, since the instrument is not in such case payable to bearer, and the indorsement is a forgery. Shipman v. Bank of the State of New York, supra; Armstrong v. Bank, 46 Ohio St. 412; Bank of England v. Vagliano [1891], App. Cas. 107. But see Clutton v. Attenborough [1895], 2 Q. B. 707. Same Subject — Effect of the statute. — Under the statute, as for- merly, it is only when the person making the instrument knew FORM AND INTERPRETATION. 33 that he was making it payable to a fictitious or nonexisting per- son and it can be treated as payable to bearer. Boles v. Harding, 201 Mass. 103; Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26. Hence, where a draft procured by the fraudulent act of an employee of a firm was made payable to an existing partner- ship and delivered to such employee, who then forged the indorse- ment of the partnership and deposited the draft to his own ac- count in another bank, it was held that the draft could not be treated as payable to a fictitious person. Seaboard Nat. Bank v. Bank of America, supra. And an instrument is not to be treated as payable to a fictitious payee merely because the drawer has been induced to draw the same by a fraudulent representation that he is indebted to the person named as payee. Jordan Marsh Co. v. National Shawmut Bank, 201 Mass. 397. Or by a fraudu- lent representation as to the identity of the payee. Boles v. Harding, 201 Mass. 103; Hartford v. Greenwich Bank, 215 N. Y, 726; S. C. 157 App. Div. 448. But though the instrument is drawn payable to the order of an existing person, yet if the person draw- ing it did not intend that it should be delivered to the ostensible payee or be indorsed by him, it is to be deemed drawn to the order of a fictitious person, and therefore payable to bearer. Sny- der v. Corn Exchange Nat. Bank, 221 Pa. 599; Trust Co. of Amer- ica v. Hamilton Bank, 127 App. Div. (N. Y.) 515. Where an in- dorsement signed by the payee is to a fictitious person or "bearer" the fictitious name may be stricken out, and suit may be main- tained on the note without the indorsement of such name; and this is true whether the payee knew, or did not know, his indorsee was a fictitious person. Keenan v. Blue, 240 111. 177. Instrument payable to estate of deceased person. — It has been held that a note made payable to the order of the estate of a de- ceased person is a promissory note with a fictitious payee, and that where it has been negotiated by the maker it is deemed as against him to be a note payable to bearer. Lewisohn v. The Kent & Stan- ley Co., 87 Hun, 257. But the correctness of this view seems very questionable. The ground of the rule is that, as the fictitious payee cannot indorse the instrument, the drawer or maker must have intended that it should be payable to bearer. But no such Intention can properly be ascribed where the instrument is drawn payable to the order of an estate; for the obvious intention is 3 34 THE NEGOTIABLE INSTRUMENTS LAW. that it shall be paid upon the order of the decedent's legal rep- resentatives, and that they shall indorse the paper. Checks are frequently drawn in this way, and it appears to be the understand- ing of the business community that they require the indorsement of the executor or administrator. Where name not that of a person. — Thus, checks are often drawn payable to " cash " or to " sundries." See Willets v. Phoenix Bank, 2 Duer, 121; Mechanics' Bank v. Stratton, 2 Keyes, 365. And subdivision 4 was intended to cover all such cases. Where last indorsement is blank. — Where a note payable to the maker is indorsed in blank and contains no other indorsement it is payable to bearer under this section. Davis v. First Nat. Bank of Blaksely, 62 So. Rep. (Ala.) 261; Peoples' Nat. Bank v. Taylor, 149 Pac. Bep. (Ariz.) 763. But an indorsement in blank on the back of a non-negotiable note does not render it negotiable under the statute. Johnson v. Lassiter, 155 N. C. 47; Wettlaufer v. Baxter, 137 Ky. 362. If the maker of a promissory note wrong- fully obtains possession of it after it has been indorsed in blank by the payee, he is the bearer within the meaning of the statute. Massachusetts National Bank v. Snow, 187 Mass. 159. § 10. What terms sufficient. — The instrument need not follow the language of this act, but any terms are sufficient which clearly indicate an intention to con- form to the requirements hereof. Variant readings. — In Alabama, Idaho, Iowa, North Carolina and Wyoming, the word " negotiable " is interpolated between the words " The " and " Instrument " at the beginning of the sec- tion. But as by section two the word " Instrument " is declared to mean " negotiable instrument " the interpolation is surplus- age. In Wisconsin the following is added at the end of the sec- tion: " Memoranda upon the face or back of the instrument, whether signed or not, material to the contract, if made at the time of the delivery, are part of the instrument, and parol evi- dence is admissible to show the circumstances under which they were made." But this is hardly germane to the general scheme of the act, which was confined intentionally to the substantive law peculiar to negotiable paper. FORM AND INTERPRETATION. 35 Foreign language — Mode of writing. — It may be written in a foreign language as well as in English. Debebian v. Gala, 64 Md. 262, 265. The writing may be in pencil as well as in ink. Brown v. Buetchers' Bank, 6 Hill, 443. As to the construction of ambigu- ous instruments, see section 17. § 11. Presumption as to date. — Where the instru- ment or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance or indorse- ment, as the case may be. Place of contract — Presumption. — A negotiable instrument is presumed to have been made where it is dated, and hence an ac- tion upon a note dated in the city of New York, must be deemed to be brought upon a contract made in the state of New York. Manufacturers' Commercial Co. v. Blitz, 131 App. Div. (N. Y.) 17. But evidence is admissible, as between the immediate parties, to show a mistake in the date. Cowing v. Altman, 71 N. Y. 441. If the date is an impossible one, the law will adopt the nearest day. Thus, if the date is written September 31st, the true date will be deemed to be September 30th. Wagner v. Kenner, 2 Rob. (La.) 120. § 12. Ante-dated and post-dated. — The instrument is not invalid for the reason only that it is ante-dated or post-dated, 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. Post-dated instrument. — The fact that a check is post-dated does not make it non-negotiable. Triphonoff v. Sweeney, 65 Ore- gon, 209. And it may be negotiated before the day of its date. Brewster v. McCardle, 8 Wend. 478; Pasmore v. North, 13 East 517. Nor does the negotiation of such a check before the day of its date put the indorsee upon notice. Triphonoff v. Sweeney, supra; Albert v. Hoffman, 64 Misc. (N. Y.) 87. The section con- templates instruments which are ante-dated or post-dated in ae- 36 THE NEGOTIABLE INSTRUMENTS LAW. eordance with a mutual agreement between the parties. Bank of Houston v. Day, 145 Mo. App. 410 Where a bank pays a post- dated cheek before the date thereof, and then dishonors other checks because the payment of the post-dated check has left in- sufficient funds for that purpose, it is liable to the depositor for a wrongful refusal to pay his checks. Smith v, Maddox-Rucker Banking Co., 135 Ga. 151. If for the purpose of evading the law, a false date is inserted in the instrument, it will be void as to all persons having notice. Serle v. Norton, 9 M. & W. 309. § 13. When date may be inserted. — Where an instru- ment expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an instrument payable at a fixed period after sight is un- dated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be pay- able 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 in- serted is to be regarded as the true date. Question of wrong date. — Where an undated note is issued, and an improper date is inserted therein by the payee, and it is there- after negotiated to an innocent third party such party may en- force the same, notwithstanding the improper date. Bank of Houston v. Day, 145 Mo. App. 410; Redlich v. Doll, 54 N. Y. 238; Page v. Monell, 3 Abb. Ct. App. Dec. 433; Mitchell v. Culver, 7 Cow. 336. But the provision that the insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course, implies that the insertion of a wrong date in an undated instrument by one having knowledge of the true date of issue would avoid the instrument as to him. Bank of Houston v. Day, supra. § 14. Filling blanks — rights of holder. — Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie author- ity to complete it by filling up the blanks therein. And FORM AND INTERPRETATION. 37 a signature on a blank paper delivered by the person making the signature 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. 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 au- thority given and within a reasonable time. But if any such instrument, after completion, 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 accordance with the au- thority given and within a reasonable time. Variant readings. — In Illinois the words " issued or " are in- serted between the words " is " and " negotiated " near the be- ginning of the last sentence. In Wisconsin the words " prior to negotiation " are inserted between the words " it " and " by " near the end of the first sentence; and the words " an authority " are substituted for " a prima facie authority " near the end of the second sentence. In South Dakota this section is struck out, and the following substituted therefor: "One who makes him- self a party to an instrument intended to be negotiable, but which is left wholly or partly in blank, for the purpose of filling afterwards, is liable upon the instrument to an indorsee thereof in due course, in whatever manner and at whatever time it may be filled, so long as it remains negotiable in form." Authority to complete the instrument. — The leading authority upon this point is Russell v. Langstaffe, 2 Doug. 514. In that case a person had indorsed his name on five copperplate checks, blank as to amounts, dates and times of payment, and the holder, Galley, filled them up as his own notes with different dates, amounts and times of payment. The indorser was held liable to the plaintiff, who had discounted them. Lord Mansfield said: " The indorse- ment on a blank note is a letter of credit for an indefinite sum. The defendant said ' Trust Galley for any amount, and I will be his security. ' It does not lie in his mouth to say the indorsement 38 THE NEGOTIABLE INSTRUMENTS LAW. was not regular." See also Ovrick v. Colston, 7 Gratt. 189; Frank v. Lillienfeld, 33 Gratt. 377; Boyd v. McCann, 10 Md. 118; Elliott v. Chestnut, 30 Md. 562; Androscoggin Bank v. Kimball, 10 Cush. 373. If the place for the name of the payee is left blank the holder may fill it up with his own name as payee. Boyd v. McCann, 10 Md. 118. What may be inserted. — But it will be noticed that the authority is only to complete the instrument, for while there is an authority to fill up blanks in order to make the instrument complete as such, there is no authority to insert a special agree- ment not essential to the completeness of the instrument. Weyer- hauser v. Dunn, 100 N. Y. 150. The authority given by this sec- tion to fill up the blanks is not confined, however, to such mat- ters as are barely sufficient to make the paper a complete negoti- able instrument, but extends to such other matters as are proper to, and are usually found in, such instruments. Thus, where a blank space was left after the word " at " in a printed form of promissory note, the addition of the words " Des Moines, Iowa," was held to have been authorized. Johnston v. Hoover, 139 Iowa, 143. So, where the space for the amount of the attorney's fee was left blank, and the parties contemplated that such amount as should be necessary should be filled in, it was held that the holder had authority to fill in the blank with a reasonable amount. Schnitzer v. Kramer, 268 111. 603. Necessity for delivery — Intention. — It is to be noticed that the authority to fill up a blank paper for any amount applies only where the paper has been delivered; and the delivery must have been with the intention that the paper should be converted into a negotiable instrument. Iowa State Bank v. Claypool, 91 Kans. 251. See next section. Burden of proof. — Under section 16, the production of the in- strument raises a presumption of a valid and intentional delivery, and under section 14 such delivery operates as ■prima facie au- thority to fill up the blanks; and hence the holder has not the burden of pro zing that the instrument was filled up in accordance with the authority given, but the party sought to be held liable must show the agreement and the violation of its terms. Madden v. Gaston, 137 App. Div. (N. Y.) 294. FORM AND INTERPRETATION. 39 Blank space with figures in margin.— Where the amount is stated in figures in the margin, and a blank space is left for the amount in the body of the instrument, it is not complete until the blank is filled up. Chestnut v. Chestnut, 104 Va. 539; Hallen v. Davis, 59 Iowa 444; Norwich Bank v. Hyde, 13 Conn. 281; Schreyer v. Hawkes, 22 Ohio St. 308, 315; Garrard v. Lewis, L. E. 10 Q. B. Div. 30. But in such case the amount cannot be filled in for a larger sum than that indicated by the figures. Norwich Bank v. Hyde, 13 Conn. 284. True date to be inserted.— Where a blank is left for the date, the date which the holder is authorized to insert is the true date, and where the holder with knowledge of the true date, inserts an untrue date, he is not a subsequent holder in due course. Bank of Houston v. Day, 145 Mo. App. 410. Where instrument negotiated prior to completion. — Where A delivered his note in an incomplete condition to B, and the latter transferred it in the same condition to C, and it was not completed in accordance with authority: Held, that C was not a holder in. due course and could not recover. Stone v. Sargent, 220 Mass. 445; Tower v. Stanley, Id. 429. So, where A signed a note in which a blank space was left for the name of the payee, and entrusted it to his co-maker to be used in buying a meat market, but the co-maker delivered the note to a bank, which inserted its own name as payee, it was held that the note was not enforcible against A. Hartington Nat. Bank v. Breslin, 88 Neb. 47. See also Union Trust Company v. McCrum, 145 App. Div. (N. Y.) 409; Mannussier v. Wright, 158 111. App. 219. So, where notes incomplete as to date, time of payment and amount were left with a bank, and were filled out from time to time by the cashier, it was held that the bank was not a holder in due course. Hunter v. Allen, 127 App. Div. (N. Y.) 572. So, where a woman delivered to her husband a cheek signed by her and made payable to a certain creditor, but with the amount left blank, instructing her husband to apply it in payment of her debt, and the husband delivered it to the creditor with the blank un- filled, to be used as a payment upon a debt of his own to the same creditor, and allowed the creditor with his consent to fill in the blank with a certain amount as such payment : Held, that the check was an incomplete instrument under this section, and that 40 THE NEGOTIABLE INSTRUMENTS LAW. in an action brought by the creditor against the woman for her indebtedness to him, alleged to be unpaid, she could introduce evi- dence to show that, by the authority actually given him, her hus- band had no right to treat the check as he did, or to apply it otherwise than in payment of her debt. Boston Steel & Iron Uo. v. Steuer, 183 Mass. 140. See also Exchange Bank v. Robinson, 185 Mo. App. 582; Kramer v. Schnitzer, 109 N. E. Rep. (111.) 695. Blank space left in completed instrument. — It is important not to confuse two different classes of instruments, viz. : (1) those in which obvious blanks are left at the time when they are made or indorsed, of such a character as manifestly to indicate that they are incomplete until such blanks shall be filled up, and (2) those which are apparently complete, and which can be regarded as con- taining blanks only because the written matter does not so fully occupy the entire paper as to preclude the insertion of additional words or figures, or both. The provision of the statute obviously applies only to instruments of the first class. As to instruments of the second class, the authorities are not agreed as to the lia- bility of a party issuing or negotiating an instrument so made out. In some cases it has been held that one who sends forth a check, note or bill filled out in such a manner as to invite an alteration in the amount may be held for the sum to which the paper has been raised. Garrard v. Hadden, 67 Pa. St. 82; Yocum v. Smith, 63 111. 321; Scotland Co. Nat. Bank v. O'Connel, 23 Mo. App. 165; Hacket v. First Nat. Bank of Louisville, 114 Ky. 193; Isnard v. Torres, 10 La. Ann. 103; Young v. Grote, 4 Bing. 253. But other courts have held that no liability on the part of a party to the paper can be predicated simply upon the fact that such spaces exist therein. Nat. Exchange Bank v. Lester, 194 N. Y. 461; Critten v. Chemical Nat. Bank, 171 N. Y. 219; Greenfield Savings Bank v. Stowell, 123 Mass. 196; Holmes v. Trumper, 22 Mich. 427; Knoxville Nat. Bank v. Clark, 51 Iowa 264; Burrows v. Klunk, 70 Md. 451. Liability to holder in due course. — If the instrument be used, or the blanks filled up contrary to the agreement or intention of the original parties, the maker is held to any bona fide holder for value, upon the principle that where one or two innocent parties must suffer by the fraud or wrong of a third person the one who put it in the power of such third person to commit the fraud or FOEM AND INTERPKETATION. 41 wrong must bear the loss. The liability of the maker in such case has also, sometimes, been placed upon the principle of estop- pel; he, having put his paper in circulation, and thus invited the public to receive it of any one having apparent title, is estopped to urge the actual defect of title against a bona fide holder. Ked- lich v. Doll, 54 N. Y. 234, 238. Where one makes and delivers a promissory note, perfect in form, except that a blank is left after the word " at " for the place of payment, there is an im- plied authority for any bona fide holder to fill the blank, and the insertion of a place of payment, and negotiation of the note, con- trary to the agreement of the original parties, does not avoid it in the hands of a bona fide holder for value. (Id.) So, one who intrusts another with his blank acceptance is liable to a holder for value, though filled up for a sum exceeding that limited by the acceptor. Van Duzer v. Howe, 21 N. Y. 531. Alterations. — The provision of the statute that in the hands of a holder in due course the instrument is valid and effectual for all purposes applies only where blanks are filled up, and not in cases where there have been alterations. Thus, where B, for the accom- modation of his brother, placed his indorsement on a printed form of promissory note, which contained the words " at the Second Na- tional Bank of Wilkes-Barre, Pa.," and the brother besides filling out the blanks, struck out the name of the Second National Bank and inserted the name of another bank, which discounted the note, it was held that, while the filling out of the blanks was impliedly authorized, the change of name of the bank where the instrument was to be payable was a material alteration and discharged the in- dorser. First Nat. Bank of Wilkes-Barre v. Barnum, 160 Fed. Kep. 245. Whether payee may be holder in due course. — In Vander Ploeg v. Van Zuuk, 135 Iowa, 350, the defendants placed their signatures on a blank printed form at the request of P, who was a partner of one of them in a mercantile business, on the representation that he might find it necessary to raise $150 or $200 for temporary use in the business. Afterwards . P, being indebted on his individual ac- count to the plaintiff, filled out the form for $2,000 payable to the order of the plaintiff, and delivered the same to the plaintiff with- out authority from the defendants: Held, that the plaintiff could not be deemed a holder in due course, since he was a party to the 42 THE NEGOTIABLE INSTRUMENTS LAW. original contract, and not a person to whom the paper had been negotiated. The court said : " It seems to us under these defini- tions and the application thereof the plaintiff was a holder of the note, but not a holder in due course. The latter term seems un- questionably to be used to indicate a person to whom after com- pletion and delivery the instrument has been negotiated. In an ordinary case [the payee] is the person with whom the contract is made, and his rights are not in general dependent on any peculiari- ties in the law of negotiable instruments. The peculiarities of that law distinguishing negotiable instruments from other contracts relate to a holder who has taken by negotiation, and not as an origi- nal party." But the contrary was held by the Supreme Court of Massachusetts in the late case of Liberty Trust Co. v. Tilton, 217 Mass. 462. In that case T signed a note to the order of the plaintiff with the amount left blank, and the defendant indorsed the note upon the representation and agreement of T that it should be filled out for $200 and no more. But T, in violation of his agreement, filled in the amount of $400, and delivered the note complete in form to the plaintiff, the payee, who took it in good faith and for value. It was held that the payee under these circumstances was a holder in due course. Compare Guerrant v. Guerrant, 7 Va. Law Reg. 639. See also note to section 52. § 15. Incomplete instrument not delivered. — 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. Variant readings. — In Wisconsin the word " negotiation " is substituted for " delivery " at the end of the section. Necessity for delivery — Stolen instrument. — A negotiable instru- ment must be complete and perfect when it is issved, or there must be authority reposed in some one afterward to supply any thing needed to make it perfect. Sedgwick v. McKim, 53 N. T. 307, 313 ; Davis Sewing Machine Co. v. Best, 105 N. T. 59, 67. And while the possession of such instrument is prima facie evidence of de- livery, yet if it appear that the instrument was never actually de- FOBM AND INTERPRETATION. 43 livered, there can be no recovery upon it, even when in the hands of an innocent holder. Linick v. Nutting, 140 App. Div. (N. Y.) 265. And mere negligence on the part of the person sought to be held liable will not be sufficient to entitle the holder to recover of him on the instrument. Baxendale v. Bennett, L. E. 3 Q. B. Div. 525. Thus, in the case last cited, where a blank acceptance which had been given to one person and returned by him was afterward stolen from the acceptor and another person filled in his own name and negotiated the bill, it was held that there could be no recovery on such acceptance even by a "bona, fide holder for value. Barn- well, L. J., said : " The defendant here has not voluntarily put into any one's hands the means, or part of the means, for committing a crime. But it is said that he had done so through negligence. I confess I think he has been negligent — that is to say, I think if he had had this paper from a third person as a bailee bound to keep it with ordinary care, he would not have done so. But then this negligence is not the proximate or effective cause of the fraud. A crime was necessary for its completion." The same rule was ap plied where a check signed in blank by the drawer was stolen and, after being filled out, was negotiated to a holder for value. Linick v. Nutting, 140 App. Div. (N. Y.) 265. Agreement that others shall sign. — Where a promissory note is delivered by the maker to the payee, upon a verbal agreement thai the instrument shall not take effect until other persons shall have signed, the paper will have no validity as between the original par- ties, unless so completed. Hodge v. Smith, 130 Wis. 326. If only part of such other signatures be obtained, the party first signing may defend on the ground that the instrument was never either completed or delivered, while the other parties may defend on the ground of fraud, even though they themselves signed uncondition- ally, for the reason that the paper never took effect as to the condi- tional maker. (Id.) See note to section 55. § 16. Necessity for delivery — presumption of — when effectual — when presumed. — Every contract on a negotiable instrument is incomplete and revoc- able until delivery of the instrument for the pur- pose of giving effect thereto. As between immediate parties, and as regards a remote party other than a 44 THE NEGOTIABLE INSTRUMENTS LAW. holder in due course, the delivery, in order to be ef- fectual, must be made either by or under the author- ity of the party making, drawing, accepting or in- dorsing, as the case may be; and in such case the de- livery may be shown to have been conditional, or for a special purpose only, and not for the purpose of trans- ferring the property in the instrument. 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. And where the instrument is no longer in the posses- sion of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved. Variant readings. — In North Carolina the words " accepting or," between the words " drawing " and " indorsing " in the sec- ond sentence are omitted. In Kansas the third sentence, which provides for a conclusive presumption of delivery in favor of a holder in due course, is omitted. In South Dakota the sentence beginning with the word ' ' But ' ' and ending with the word ' ' pre- sumed " is struck out, and the following substituted therefor: "An indorsee of a negotiable instrument in due course, acquires an absolute title thereto, so that it is valid in his hands, notwith- standing any provision of law making it generally void or void- able, and notwithstanding any defect in the title of the person from whom he acquired it." Necessity for delivery — Like other written contracts, a bill of exchange or promissory note has no legal inception or valid exist- ence as such until it has been delivered in accordance with the pur- pose and intent of the parties. Burson v. Huntington, 21 Mich. 416. And the paper takes effect from the time of its delivery, and not from its date, as until the maker parts with the possession and control of the instrument he may cancel it or dispose of it as he pleases. Burr v. Beekler, 264 111. 230. The provision in the first sentence of this section does not render incomplete a promissory note indorsed in blank by the payee and afterwards stolen from him by the maker and presented by the thief to a bank which dis- counts it in good faith, because such a note takes effect when de- FORM AND INTERPRETATION. 45 livered by the maker to the payee, and is made payable to bearer by the payee's indorsement in blank before the theft. Massachu- setts National Bank v. Snow, 187 Mass. 160. Instrument payable to order of drawer. — A paper purporting to be a bill of exchange payable to the order of the drawer, does not come into existence as a bill until it is delivered as well as in- dorsed by the drawer. Stouffer v. Curtis, 198 Mass. 560. Conditional delivery. — The rule was well established before the adoption of the. statute that a negotiable instrument may be de- livered upon a condition, the observance of which is essential to its validity as between the parties ; and parol evidence of such a con- dition was not deemed an attempt to vary or contradict the writ- ten contract. Niblock v. Sprague, 200 N. Y. 390 ; Hodge v. Smith, 130 Wis. 326; McFarland v. Sikes, 54 Conn. 250. And by the express language of section 16, this is the rule adopted in the statute. Sayre v. Leonard, 57 Colo. 116. Thus, as between the original parties, it can be shown by parol evidence that the note, although delivered, was only to become binding in case the maker should sell certain bonds placed in his hands as agent for sale. Hill v. Hall, 191 Mass. 253. Nor does the Negotiable Instruments Law or the Statute of Frauds require that a contract of condi- tional delivery shall be in writing. Norman v. McCarthy, 56 Colo. 290. Holder in due course. — When the instrument is in the hands of a holder in due course, then, under the express language of section 16, a valid delivery is conclusively presumed. Borough of Mont- vale v. Peoples' Bank, 74 N. J. L. 464; Schaeffer v. Marsh, 90 Misc. (N. Y.) 307. Thus, as against a holder in due course the drawer of a cheek cannot show that it was delivered by his clerk without his authority. Buzzell v. Tobin, 201 Mass. 1. In this respect the statute changes the law in some of the states. In some cases it was held that an instrument in the form of a nego- tiable promissory note, which had never been delivered by the alleged maker, had no legal existence as a note, and the party sought to be charged upon it might always, unless estopped by his own negligence, defend successfully against it, without re- gard to the time when, or the circumstances under which, it was acquired by the holder. Eoberts v. McGrath, 38 Wis. 52; Chipman v. Tucker, 38 Wis. 43; Griffiths v. Kellogg, 39 Wis. 290; 46 THE NEGOTIABLE INSTRUMENTS LAW. Burson v. Huntington, 21 Mich. 416. This change, like some others made by the Act, was to facilitate the circulation of com- mercial paper. The provision does not apply, however, in the case of an incomplete instrument completed and negotiated without authority. See section 15. Pleading delivery — Proof of title. — An allegation that a prom- issory note was made by the defendants is equivalent to an allega- tion and imports, not only that it was signed, but also that it was delivered to take effect as a negotiable instrument. First Nat. Bank v. Stallo, 160 App. Div. (N. Y.) 702. And an allegation that the note was made payable to the order of the plaintiff shows that the delivery was to him, and sufficiently shows his ownership. Id. Nor need the plaintiff allege that he has not parted with possession or title. Id. Possession of the instrument is prima facie evidence of title. Newcombe v. Fox, 1 App. Div. (N. T.) 389 ; Chandler v. Hedrick, 187 Mo. App. 664. § 17. Construction where instrument is ambiguous. — 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 two, the sum denoted by the words is the sum payable; but if the words are ambiguous or uncertain, refer- ence 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 interest 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 con- sidered to be dated as of the time it was issued; 4. Where there is a conflict between the written and printed provisions of the instrument, the written pro- visions prevail; 5. Where the instrument is so ambiguous that there FORM AND INTERPRETATION. 47 is doubt whether it is a bill or note, the holder may treat it as either at his election; 6. Where a signature is so placed upon the instru- ment that it is not clear in what capacity the person making 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. Variant readings.— The North Carolina subdivision two is omitted. In Wisconsin the following is added at the end of the section: " 8. Where several writings are executed at or about the same time, as parts of the same transaction, intended to ac- complish the same object, they may be construed as one and the same instrument as to all parties having notice thereof." No one will quarrel with this statement of a general legal proposi- tion; but why it should have been inserted in the Negotiable In- struments Law is not easy to discover. Marginal figures — Effect of. — The figures in the margin of a bill or note are regarded as simply a memorandum or abridgement for convenience or reference, and form no part of the instrument. Smith v. Smith, 1 E. I. 388 ; Norwich Bank v. Hyde, 13 Conn. 281 ; Schreyer v. Hawkes, 22 Ohio St. 308. Where the marginal figures of a bill were 245 1., but the words "two hundred pounds" were written in the body of the instrument, it was held to be for the lat- ter sum. Saunderson v. Piper, 5 Bing. N. C. 425. In Garrard v. Lewis (L. E. 10 Q. B. Div. 30, 32), Lord Justice Bowen, speaking of the import and effect of marginal figures at the head of a bill of exchange, said : " They do not seem in general to have been con- sidered among merchants as of the same effect and value as the mention of the sum contained in the body of the bill. The history of these marginal figures may perhaps be shortly summarized as follows : The first model of a bill of exchange preserved to us, and which dates from 1381, does not, I believe, possess them, though it does possess the nature or vocation with which merchants' bills used generally to commence, and which usually preceded the figures. 48 THE NEGOTIABLE INSTRUMENTS LAW. The marginal figure at the head of a bill was probably added at a very early date, in order that the amount of the bill might strike the eye immediately, and was in fact a note, index or summary of the contents of the bill which followed." Where rate of interest not specified. — Where a note read "with interest at the rate of — per cent, from until paid," it was held that the note drew interest at the legal rate from its date. Hornstein v. Cifuno, 86 Neb. 103. So, where the note read " with interest at per cent, per annum." Franklin Nat. Bank v. Roberts, 168 N. C. 473. The legal effect of not filling in the blank is the same as if there had been nothing written or printed after the word " interest." Id. Instrument not dated. — See Kingsley v. Sampson, 100 111. 54. As to the right of the holder to fill in the date, see section 14. Conflict between written and printed portions. — The rule de- clared in the statute is that which applies to contracts gener- ally. Chadsey v. Guion, 97 N. Y. 333. It applies where there is a conflict between provisions which are typewritten and those written by hand. Acme Coal Co. v. Northrup Nat. Bank, 146 Pac. Eep. (Wyo.) 593. In the case last cited there was a con- flict as to the rate of interest, the figure "7" being typewritten and the figure "8" written with pen and ink. The court said: "Had the figure '7' been printed in the blank as it was printed on the printing press, and the figure '8' written with pen and ink, the rule of the statute would unquestionably apply. The question here is: Is that portion of this note which is typewritten to be considered as printed or as written? When we consider what we consider to be the reason for the rule as laid down in the statute, and the connection with which the words 'written' and 'printed' were there used, we think the question is not dim- cult of solution. The printed form or blank is used for conven- ience and is prepared in advance of the final agreement between the parties; and when a conflicting provision is afterward inserted therein in writing, the natural and reasonable presumption is that the later and written provision expresses the true intent of the parties. ' ' But this rule does not permit of the rejection of any of the printed matter which by any reasonable construction may be reconciled with the written part. Miller v. Hannibal & St. Jo. B. R. Co., 90 N. Y. 430; Magee v. Lovell, L. R. 9 C. P. 107; Joyce v. Realm Ins. Co., L. R. 7 Q. B. 580. FOEM AND INTERPBETATION. 49 Uncertainty as to character of paper. — See Heise v. Bumpass, 40 Ark. 547. Where the instrument ran "On demand, I promise to pay A. B., or bearer, the sum of fifteen pounds, value re- ceived," and was addressed in the margin to one J. Bell, who wrote upon it, "Accepted, J. Bell," it was considered to be in effect the note of J. Bell, as it contained a promise to pay, al- though, in terms, it was an acceptance. Block v. Bell, 1 M. & R. 149. So, where the instrument was in the following form: " Lon- don, August 5, 1833. Three months after date I promise to pay Mr. John Bury or order forty-four pounds, eleven shillings, and five pence, value received, John Bury," and was addressed in the lower left-hand corner "J. B. Grutherot, 35 Montague Place, Bed- ford Place," and Grutherot 's name was written across the face as an acceptance, and Bury's name across the back as an indorse- ment, it was held that Bury might be held either as the drawer of the bill against Grutherot, or as the maker of the note, and therefore was bound without notice of dishonor. Edis v. Bury, 6 Barn. & Ores. 433. In another case the instrument ran: "Two months after date I promise to pay A. B. or order ninety-nine pounds, H. Oliver," and was addressed to J. E. Oliver and ac- cepted by him. The court said: "It is not unjust to presume that it was drawn in this form for the purpose of suing upon it either as a promissory note or as a bill of exchange." Lloyd v. Oliver, 18 Q. B. 471. Uncertainty as to capacity. — For example, if a person should write his name across the face of a note, he would, under sub- section six be deemed an indorser. There are some decisions which hold that in such case he would be deemed a joint maker. It is, perhaps, not very important which view is adopted, so that the rule upon the subject is fixed and certain. Throughout the act it has been the policy to make all irregular parties indorsers. See section 64. In Germania Nat. Bank v. Mariner, 129 Wis. 544, a note read: " 'Four months after date the Northwestern Straw Works promise to pay,' etc., and was signed 'The Northwestern Straw Works, E. R. Stillman, Treas.; John W. Mariner." Mari- ner was the secretary of the corporation, duly authorized to sign the note on its behalf: — Held, that the signature of Mariner waa not so placed on the instrument as to make it doubtful in what capacity he intended to sign, within the meaning of this section. The court said: "This provision, by its very terms, applies only 4 50 THE NEGOTIABLE INSTRUMENTS LAW. to a case of doubt arising out of the location of the signature upon the instrument. Names are sometimes placed at the side f 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 indorser, or perhaps as a guarantor, and to solve these doubts the section in question was evidently framed. It was to settle a doubt fairly arising from the ambiguous location of the name, and applies to no other. In the present case there is no doubt of this nature. The signature of Mr. Mariner is placed in the usual and proper, in fact the only proper, place for a maker. The doubt arising is not a doubt whether he intended to sign as maker, in- dorser, or guarantor, for it is clear from the location of the name that be did not intend to sign as indorser or guarantor, but sim- ply a doubt whether he intended to sign in an individual or in a representative capacity as maker. To say that, where it con- clusively appears from the instrument that the signer intended to sign as a maker, the statute is intended to make him an in- dorser, would be little short of ridiculous. The statute was passed to meet a case where it is doubtful from the instrument whether a man intended to become an indorser, not to make an indorser out of a person who, without doubt, intended to sign as a maker, either individually or as representative of another. We have no doubt, therefore, that this section has no application to the pres- ent case." Where two officers of a corporation indorsed on the company's demand note the following words: 'Tor value re- ceived, we hereby guarantee the prompt payment of this note,'' and followed the words with their signatures, they were held liable as sureties, and not as guarantors of the instrument. Iron City National Bank v. Eafferty, 207 Pa. St. 238. Two or more signing where note is in the singular.— See Monsoti v. Drakeley, 40 Conn. 559; Solomon v. Hopkins, 61 Conn. 47; Dart v. Sherwood, 7 Wis. 523. § 18. Only persons signing liable — trade or as- sumed name. — 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. FORM AND INTERPRETATION. 51 Variant readings. — In Wyoming the word " expressly " in the first sentence is omitted. Necessity for signature. — Persons dealing with negotiable in- struments are presumed to take them on the credit of the parties whose names appear upon them, and a person not a party cannot be charged upon proof that the ostensible party signed or indorsed as his agent. Manufacturers', etc., Bank v. Love, 13 App. Div. (N. Y.) 561; Briggs v. Partridge, 64 N. Y. 363. Under this sec- tion, a firm upon whom a draft is drawn by its commercial trav- eller is not liable thereon before acceptance by reason of any custom in previous years to honor such drafts. Seattle Shoe Co. v. Packard, 43 Wash. 527. Trade or assumed name. — A person may become a party to a bill or note by any mark or designation he chooses to adopt, pro- vided it be used as a substitute for his name and he intends to be bound by it. De Witt v. Walton, 9 N. Y. 571; Brown v. But- chers' & Drovers' Bank, 6 Hill, 443. In the case last cited, which was a suit against the defendant as indorser of a bill of exchange, the indorsement was made with a lead pencil in figures, thus," 1,2, 8." § 19. Signature by agent — authority — how shown. — 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. Variant readings. — In Kentucky the words " an agent duly au- thorized in writing " are substituted for " duly authorized agent." Speaking of this change, the Court of Appeals of that state said in a late case: " The reason for adopting the section that appears in the law in place of the proposed section [that is, proposed by the Commissioners on Uniform Laws] is not known; but that the present section is radically different in its meaning from the proposed section is manifest. The section as proposed simply contained the declaration in statutory form of an old and well recognized principle of the law of agency generally, as well as in the law of agency as applied to commercial paper, while the section as amended prescribes that the authority of the agent must 52 THE NEGOTIABLE INSTRUMENTS LAW. be in writing. * * * It may not have been a wise change to have made. It may in some instances work harm and injustice in the administration of the law, but if so, the remedy is with the legislature and not the courts." Finley v. Smith, 165 Ky. 445. Proof of agency. — This section permits proof of the ostensible authority of the agent to act for his principal. Grant County State Bank v. Northwestern Land Co., 28 N. D. 479. But what shall constitute sufficient proof of such ostensible authority is left to the common law. In re Estate of Chismore, 166 Iowa 217. § 20. Signature on behalf of principal — personal lia- bility — liability of person signing as agent, etc. — Where the instrument contains or a person adds to his signature words indicating that he signs for or on be- half of a principal, or in a representive capacity, he ia not liable on the instrument if he was duly authorized; 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 per- sonal liability. Variant readings. — In Virginia the words " without disclosing his principal " are interpolated after the words " representative capacity " and before the word " he." Liability of person signing without authority. — In the original draft submitted to the Conference of Commissioners on Uniform- ity of Laws this section read 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; but the mere addition of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability. In determining whether a signature is that of the principal or of the agent by whose hand it is written, that construction is to be adopted which is most favorable to the validity of the instrument." This is the English rule, and was the rule in New York prior to the statute. Under that rule a person signing for or on behalf of a principal was not liable on the instrument, notwithstanding he had no authority FORM AND INTERPRETATION. 53 to bind his principal. There was an implied warranty on his part that he possessed such authority, and if he did not, he be- came liable upon such warranty for the damages resulting from the breach. Miller v. Eeynolds, 92 Hun, 400. But no action could be maintained against him on the instrument, when by its terms it did not purport to bind him. And his liability upon the implied warranty did not accompany the transfer of the instru- ment, unless the claim founded upon the warranty was also as- signed to the person to whom the instrument was transferred. (Id.) The effect of the section, as it now stands, is, probably, to permit the holder to sue the agent on the instrument, if he was not duly authorized to sign the same on behalf of the prin- cipal. Words which are descriptio personae. — Thus, he is not relieved from liability by adding the descriptive term " trustee," Bank v. Looney, 99 Tenn. 278, or "administrator," or "guardian," Emm v. Carroll, 1 Yerger, 144; McWherter v. Jackson, 10 Humphrey, 208; Carter v. Wolf, 1 Heisk, 674, or " agent," Sumwalt v. Eigeley, 20 Md. 107, or "secretary," Daniel v.-Glidden, 38 Wash. 556. Where a negotiable promissory note has been given for the payment of a debt contracted by a corporation, and the language of the promise (Joes not disclose the corporate obligation, and the signatures to the paper are in the names of individuals, a holder, taking bona fide and without notice of the circumstances of its making, is entitled to hold the note as the personal undertaking of its signers, notwith- standing they affix to their names the title of an office. Such an affix will be regarded as descriptive of the persons, and not of the character of the liability. Unless the promise purports to be by the corporation, it is that of the persons who subscribe to it; and the fact of adding to their names an abbreviation of some official title has no legal signification as qualifying their obligation, and im- poses no obligation upon the corporation whose officers they may be. This rule is founded on the general principle that in a contract every material thing must be definitely expressed and not left to wmjeeture. Unless the language creates, or fairly implies, the un- dertaking of the corporation, or if the purpose is equivocal, the ob- ligation is that of its apparent makers. Casco National Bank v. Clark, 139 N. Y. 307, 310; First Nat. Bank v. Wallis, 150 N. Y. 455. In Megowan v. Peterson, 173 N. Y. 1, it was held that a trus- tee of an insolvent firm, for the benefit of creditors thereof, ap- 54 THE NEGOTIABLE INSTRUMENTS LAW. pointed by such firm and its creditors, is not personally liable un- der this section, upon a note signed by him as " trustee," but with- out disclosing his representative capacity upon the face of the note, where the payee is one of such creditors and the consideration for which the note was given was property purchased from the payee for the benefit of the trust estate. The court, speaking of this pro- vision of the statute, said : " We do not understand that the statute to which we have alluded was designed to change the common-law rule in this regard, which is to the effect that, as between the origi- nal parties and those having notice of the facts relied upon as con- stituting a defense, the consideration and the conditions under which thf note was delivered may be shown." See also Kerby v. Euegamer, 107 App. Div. (N. T.) 491 ; Orandall v. Rollins, 83 Id. 618; Jump v. Sparling, 218 Mass. 324. Signatures of corporate officers. — The cases in which this sec- tion has been applied have been mainly cases where the signatures were made by officers of corporations. Under the provisions of this section, which is merely a legislative declaration of the common law rule, an officer of a corporation, who, after the name of the cor- poration written or stamped as the maker of the note, signs his name without any qualification or description, or without adding his official title is prima facie personally responsible on the note. Bel- mont Dairy Co. v. Thrasher, 124 Md. 320. And the use of the form " we promise to pay," suggests that it was the intention that he was to be personally bound. (Id.) And if he signs his own name after that of the corporation merely to complete the signature of the cor- poration, and not with the intention of making himself personally liable, he must, in order to escape liability, make it appear that such was the understanding of the parties when the paper was issued. (Id.) Where the name of a religious corporation indorsed upon its promissory note was followed by the names of its president and treasurer, the words " finance committee " and the names of the persons constituting such committee, the indorsement was held to come within this section, and to negative any personal liability on the part of the individual signers. Chelsea Exchange Bank v. First U. P. Church, 89 Misc. (N. Y.) 616. Parol evidence to show representative character. — The statute does not abrogate the rule of evidence which permitted the person signing to show that it was not the intention of the parties that he should be personally bound. Phelps v. Weber, 84 N. J. Law 630; FORM AND INTERPRETATION. 55 Jump v. Sparling, 218 Mass. 324; Myers v. Chesley, 177 S. W. Rep. 326; Dunbar Box & L. Co. v. Martin, 53 Misc. (N. Y.) 312. § 21. Signature by procuration — effect of. — A sig- nature by " procuration " operates as notice that the agent has but a limited authority to sign, and the prin- cipal is bound only in case the agent in so signing acted within the actual limits of his authority. Variant reading. — In Illinois the word " only," after the word " bound," is omitted. Meaning of term per procuration. — The words "per procura- tion" have a special technical significance. They are an express intimation of a special and limited authority; and a person taking a bill so drawn, accepted, or indorsed, is bound to inquire into the extent of the authority. Byles on Bills, 33. But an indorsement by an agent " per pro " which is within the powers conferred upon him is binding upon his principal as against bona fide holders for value, though the agent abused his authority. Bryant v. La Banque du Peuple [1893], App Cases, 170. The term is seldom, if ever, used in this country. § 22. Indorsement by infant or corporation — effect of. — 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 corporation or infant may incur no liability thereon. Variant reading. — In North Carolina the words " or married woman " are inserted after the word " infant " in both places. Indorsement by corporation. — Thus, if a note should be drawn payable to the order of a corporation, and the corporation should indorse the same without consideration, such indorsement would pass the title to a subsequent holder with notice of the facts, though the corporation would not be liable to him as an indorser. See note to section 29. Indorsement by infant. — The statute changes the. law. See Roach v. Woodhall, 91 Tenn. 206. The change, like others, was made to facilitate the ready and safe transfer of commercial paper. 56 THE NEGOTIABLE INSTRUMENTS LAW. § 23. Forged signature inoperative — estoppel.— Where a signature is forged or made without the au- 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 en- force 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. Variant reading. — In Illinois the words " of the person whose signature it purports to be " are omitted. Unauthorized signature. — For cases applying the statute, see Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26; Mercantile Nat. Bank v. Silverman, 148 App. Div. (N. Y.) 1; Stein v. Empire Trust Co., Id. 850; Jett v. Standafer, 143 Ky. 787. Where some of the signatures are genuine. — But it does not fol- low from the provisions of this section that proof of one forged signature on a note must of necessity, and in all cases, be given effect to avoid the note in favor of those whose signatures thereto are found to be genuine. It is the forged or unauthorized signa- ture that is declared to be inoperative; and the inhibitory clause forbids recovery on the instrument as against any party where the right of recovery is predicated on such inoperative signature. Beem v. Farrell, 135 Iowa, 670. Diversion of paper by agent indorsing. — The agent of the plain- tiff who had power of attorney to receive and indorse checks for the plaintiff and to deposit them in certain banks, indorsed them with the name of the plaintiff, to whom they were payable, adding his own indorsement, and transferred them to certain stockbrokers with whom he was speculating, as margins on his personal transac- tions, the brokers having knowledge of the agency. Held, that the unauthorized diversion of the checks by the agent, after indorse- ment, did not make the original indorsement of the plaintiff's name a forgery under this section. Salen v. Bank of State of New York, 110 App. Div. (N. Y.) 636. Mistake as to identity of payee. — P, by fraudulently represent- ing himself to be H, obtained a check from T, payable to the order FOEM AND INTERPRETATION. 57 of H. At the time, T knew of the existence of H, and delivered the check to P supposing that he was H. P indorsed H's name on the check, and gave it to D, who collected the money thereon from the bank, which charged the same against the account of T. Held, that under this section the signature made by P transferred no in- terest, and that T could recover the amount from the bank. Tol- man v. American National Bank, 22 E. I. 462. Stiness, C. J. said : " We have referred to authorities because the defendant's counsel so earnestly and ably argued that the act did not alter the law-mer- chant that it seemed proper to show that the law in this respect, outside of the act, is in a very unsatisfactory state and that the act is right. We do not think that the act does alter the law as it was when, a few years ago, it seems to have been switched off on a fallacy in some places. One of the advantages of the act is in set- tling the question. Waiving the question of forgery, about which the cases we have cited differ, the signature in this case is clearly one ' made without the authority of the person whose signature it purports to be, 'and, therefore, it is ' wholly inoperative.' This be- ing so, the defendant cannot justify its action under it, there being no evidence of any conduct by the plaintiff to mislead the defend- ant and so to estop his present claim. As the case stood, the plain- tiff had ordered money paid to Haskell. The bank had not so paid it. The fact that the plaintiff had been imposed upon did not re- lieve the bank from its duty to see that the money was paid ac- cording to order." But where the instrument is intended for the person to whom it is delivered, his indorsement will pass a good title to a holder in due course, though he procured the same by falsely representing himself to be another person of the same name. Jamieson v. McFarland, 43 Wash. 153. The difference between the two cases is, that in the former, the drawer of the check or draft intends it for a particular person other than the one to whom he delivers it; in the latter case, the person to whom he delivers it is, in fact, the one for whom he intended it. Compare Land, etc. Co. v. Northwestern Nat. Bank, 196 Pa. St. 230. See note to section 9. Ratification — Estoppel. — Where the transaction is contrary to good faith and the fraud affects individual interests only, ratifi- cation is allowed; but where the fraud is of such a character as to involve a crime the adjustment of which is forbidden by public policy, the ratification of the act from which it springs is not permitted. Forgery does not admit of ratification. A forger does 58 THE NEGOTIABLE INSTRUMENTS LAW. not act on behalf of, nor profess to represent, the person whose handwriting he counterfeits; and the subsequent adoption of the instrument cannot supply the authority which the forger did not profess to have. Henry Christian Building and Loan Association v. Walton, 181 Pa. St. 201; Lyon v. Phillips, 106 Pa. St. 57. But cases sometimes arise where parties are estopped to dispute the genuineness of their signatures. Crout v. DeWolf, 1 R. I. 393. Thus, where a customer has been guilty of negligence in examin- ing the account and vouchers returned to him by his bank, he will not be permitted to dispute the account because some of the checks are forgeries. Leather Manufacturers' Nat. Bank v. Mor- gan, 117 U. S. 96. Where one whose name has been forged to a note has received no benefit from the forgery, and the forger was not his agent for any purpose, he is not bound, as a matter of legal duty, when the note is first shown to him, to repudiate or disclaim at once the genuineness of the signature. His failure to do so is evidence, in the nature of an admission, which may be considered as bearing upon the question whether he assumed tne signature as his own, but it is not conclusive. Traders' National Bank v. Rogers, 167 Mass. 315. As to what conduct will amount to an estoppel, see Terry v. Bissel, 26 Conn. 41; Pettyjohn v. Nat. Ex. Bank, 101 Va. 111. A married woman, to shield her husband, ratified a signature on a promissory note to a bank, purporting to be hers but forged by her husband. At maturity the note was sur- rendered to the husband on his giving in renewal a note similarly forged which was accepted in good faith by the bank. In an ac- tion by the bank on the first note, it was held, that the substitution and acceptance of the second forged note did not constitute a pay- ment, so as to bar an action on the note ratified by the defendant. Central National Bank v. Copp, 184 Mass. 328. Traveler's checks. — A banking company issuing traveler's checks, which are first signed by the payee, and are to be paid by the correspondent of the drawer when countersigned by the payee, is liable to the payee for the value of such a check lost or stolen, and paid by the drawer on the forged countersignature of the payee. Sullivan v. Knauth, 161 App. Div. (N. Y.) 148. CONSIDERATION. 59 AETIOLB III. Consideration. Section 24. Presumption of consideration. 25. What constitutes value. 26. Value given by prior holder. 27. Lienor as holder for value. 28. Failure of consideration. 29. Accommodation party — definition — liabil- ity. § 24. Presumption of consideration. — Every negoti- able 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. Importance of presumption. — In Lassas v. McCarty, 47 Ore. 474, it was said that the presumption of the statute that a prom- issory note was given for a sufficient consideration is of mucn importance in business transactions, and should not be lightly disregarded, in favor of those who have carelessly, or by being unduly confiding, set afloat commercial paper. Words " value received." — The words " value received," com- monly used in notes and bills, are surplusage in a negotiable instru- ment; for their omission does not in any way affect the legal im- port of the paper, or weaken the presumption that it was given for value. McLeod v. Hunter, 29 Misc. (N. Y.) 559. But in the case of a non-negotiable instrument, they are important, for they amount to an admission that the instrument was issued for a suf- ficient consideration. Owen v. Blackburn, 161 App. Div. (N. Y.) 827; Du Bosque v. Munroe, 168 Id. 821. Pleading — Burden of proof. — It is not necessary for the plain- tiff to allege that there was a consideration, since that is pre- sumed. First Nat. Bank v. Stallo, 160 App. Div. (N. Y.) 702. 60 THE NEGOTIABLE INSTRUMENTS LAW. And the production of the paper establishes prima facie that there was a consideration. Dawson v. Wombles, 123 Mo. App. 340; Bank of Monticello v. Dooly, 113 Wis. 590, 593; Hickok v. Bunting, 92 App. Div. (N. Y.) 167; Bringman v. Von Glahn, 71 Id. 537; Lynchburg Milling Co. v. Nat. Exchange Bank, 109 Va. 639; Carter v. Butler, 264 Mo. 306; Murphy v. Estate of Skinner, 160 Wis. 554; Hamilton v. Diefenderfer, 21 Wyo. 66. But when this presumption is met by proof tending to rebut it, then, on the question whether there was a consideration, the burden of proof is on the holder throughout the trial. Lombard v. Byrne, 194 Mass. 236, 238. As to the effect of a failure to deny that the paper was given for value, see Benedict v. Kress, 97 App. Div. (N. Y.) 65. § 25. What constitutes value — antecedent debt. — Value is any consideration sufficient to support a sim- ple contract. An antecedent or pre-existing debt con- stitutes value ; and is deemed such whether the instru- ment is payable on demand or at a future time. Variant readings. — In Illinois the second sentence reads as fol- lows: "An antecedent or pre-existing claim, whether for money or not, constitutes value where an instrument is taken either in satisfaction therefor or as security therefor, and is deemed such, whether the instrument is payable on demand or at a future time." In Wisconsin the words " discharged, extinguished or extended " are interpolated after the words " pre-existing debt;" and the following is added at the end of the section: " But the indorse- ment or delivery of negotiable paper as collateral security for a pre-existing debt, without other consideration, and not in pur- suance of an agreement at the time of delivery, by the maker, does not constitute value." Non-negotiable bills and notes. — While the statute applies only to instruments which are negotiable, yet by the law merchant a bill of exchange, though it lacks the words payable "to order" or to "bearer," which are essential to negotiability (see section 2) imports a consideration, and the statute has not altered this rule, since it provides that in any case not provided for in the act, , the law merchant shall goverr. (Section 196.) But as regards the presumption of consideration in the case of non-negotiable notes, CONSIDERATION. 61 the law of New York and some of the other states has been changed. See note to section 184. What constitutes value.— See Conover v. Stillwell, 34 N. J. Law, 54; Eaton v. Libbey, 165 Mass. 218; Whitney v. Clary, 145 Mass. 156; Shawmut Nat. Bank v. Manson, 168 Mass. 425; Ray- mond v. Sellick, 10 Conn. 480. Antecedent debt — Common-law rule. — The general rule is that where a conveyance is made or security taken, the consideration of which is an antecedent debt, the grantee or the person taking the security is not regarded as a purchaser for a valuable con- sideration. People's Savings Bank v. Bates, 120 U. S. 556, 565; Weaver v. Borden, 49 N. Y. 286; Cary v. White, 52 N. Y. 138; Wood v. Robinson, 22 N. Y. 567; Mingus v. Condit, 23 N. J. Eq. 313. But in the Supreme Court of the United States, and in many of the State courts, a distinction was made in favor of commer- cial paper, and the rule adopted that a bona fide holder taking a negotiable instrument in payment of, or as security for, an ante- cedent debt, is a holder for a valuable consideration entitled to protection against all the equities between the antecedent parties. Railroad Company v. National Bank, 102 U. S. 14; Swift v. Ty- son, 16 Pet. 1; National Revere Bank v. Morse, 163 Mass. 381; Rockville Nat. Bank v. Citizens' Gas Light Co., 72 Conn. 576; Roberts v. Hall, 37 Conn. 205; Bridgeport City Bank v. Welch, 29 Conn. 475; Harrold v. Kays, 64 Mich. 439; Fitzgerald v. Booker, 96 Mo. 661; Spencer v. Sloan, 108 Ind. 183; Quinn v. Hoord, 43 Vt. 375 ; Armour v. McMichael, 36 N. J. Law, 92 ; Fisher v. Fisher, 98 Mass. 303; Roberts v. Hall, 37 Conn. 205; Giovanovich v. Citi- zens' Bank, 26 La. Ann. 15; Maitland v. Citizens' Nat. Bank, 40 Md. 540; Robins v. Lair, 31 Iowa, 9; Hotchkiss v. Fitzgerald Patent, etc., Co., 41 W. Va. 357; Fair v. Howard, 6 Nev. 304: Levy v. Ford, 41 La. Ann. 873. This exception to the general rule was based upon considerations of commercial policy, and was peculiar to commercial paper. But prior to the adoption of the stat- ute, it was well settled in New York and several other states, that one who acquired commercial paper as collateral security for a pre-existing debt was not a holder for value. Comstock v. Hier, 73 N. Y. 269; McBride v. Farmers' Bank, 26 N. Y. 450; Codding- ton v. Bay, 20 Johns. 637; Schaeffer v. Fowler, 111 Pa. St. 451; Martin v. Bank, 94 Tenn. 176; Roach v. Wodall, 91 Tenn. 206; Jenkins v. Schnaub, 14 Wis. 1 ; Brooks v. Sullivan, 129 N. C. 19a 62 THE NEGOTIABLE INSTRUMENTS LAW. This rule produced many subtle refinements, and it would be impossible to reconcile all the decisions on the subject. See note to next section. For the former law in the case of accommodation paper pledged as security, see Stephen v. Monongahela National Bank, 88 Pa. St. 157; National Union Bank v. Todd, 132 Pa. St. 312. Draft purchased for antecedent debt.— Under this section a bank which acquires a draft by purchase from another bank for an ex- isting indebtedness is a holder for value. Murchison Nat. Bank v. Dunn Oil Mills, 150 N. C. 718, 719. Exchange of notes. — One promissory note is a good considera- tion for another given in exchange. Franklin Bank v. Roberts, 168 N. C. 473; Mehlinger v. Harriman, 185 Mass. 245. Promise to pay debt. — The promise to pay an already existing debt, or the actual payment thereof, is not " value " within the meaning of this section. Morris County Brick Co. v. Austin, 79 N. J. Law, 273. Giving credit. — Under this section a bank which merely gives a customer credit on its books for paper deposited does not become a holder for value, but in order to have this effect, the credit must be drawn upon. Commercial Nat. Bank v. Citizens' State Bank, 132 Iowa, 706; Miller v. Norton, 114 Va. 610; Elgin City Bank- ing Co. v. Hall, 119 Tenn. 548. See note to section 52. Accommodation paper. — A pre-existing debt, without extension or forbearance, is a sufficient consideration upon which to hold an accommodation party where there has been no restriction placed upon the use of the paper. Lehrenkrauss v. Bonnell, 199 N. Y. 240; Maurice v. Fowler, 78 Misc. (N. Y.) 357. § 26. Value given by prior holder. — Where 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 such prior to that time. Consideration for subsequent acceptance. — If a party becomes a horia fide holder for value of a bill before acceptance, it is not essential to his right to enforce it against a subsequent acceptor CONSIDERATION. ttf that an additional consideration should proceed from him to the drawee. The bill itself implies a representation by the drawer that the drawee is already in receipt of funds to pay, and his contract is that the drawee shall accept and pay according to the terms of the draft. The drawee can, of course, upon presentment refuse to accept, and in that event the only recourse of the holder is against the prior parties thereto; but in case the drawee does accept the bill, he becomes primarily liable for its payment, not only to the indorsees, but also to the drawer himself. Heuerte- matte v. Morris, 101 N. T. 70; National Park Bank v. Saitta, 127 App. Div. (N. Y.) 624. § 27. Lienor a holder for value — to what extent. — 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. Effect of the statute. — In New York for some time after the adoption of the statute, there was a tendency in the Appellate Divisions of the First and Second Departments to hold that the statute had not changed the rule which had prevailed in this state since the decision in Coddington v. Bay (20 Johns. 637), that one who had acquired commercial paper as collateral security for a pre-existing debt was not a holder for value. Sutherland v. Mead, 80 App. Div. (N. Y.) 103; Roseman v. Mahony, 86 App. Div. (N. Y.) 377; Bank of America v. Waydell, 103 App. Div. (N. Y.) 25, 33. But the later New York cases, without expressly overruling these decisions, have held that the statute established the rule which had prevailed in the Federal Courts, viz. : that the transfer of a bill or note as security for an antecedent debt is sufficient to constitute the transferee a holder for value. King v. Bowling Green Trust Co., 145 App. Div. 398, 402; Maurice v. Fowler, 78 Misc. Rep. 357; Martin L. Hall Co. v. Todd, 139 N. Y. Supp. Ill; Broderick & Bascom Rope Co. v. McGrath, 81 Misc. 199, 200. See also Brewster v. Shrader, 26 Misc. Rep. 480. In the case last cited, Judge Werner, now of the New York Court of Appeals, said: "The language of this section, when given its usual and- ordinary signification, ought to leave no room for doubt upon the subject. There is, however, such a universal disposition among lawyers to look for some hidden or subtle meaning in the (fi THE NEGOTIABLE INSTEUMENTS LAW. most simple language, that it has become quite the fashion to require the courts to construe statutes, which, to the average lay mind, seem to require no construction. If the language of the section under consideration were not obviously clear and unequi- vocal, and there were need of ascertaining the legislative intent in order to give proper effect to such language, the history of the subject, of the judicial decisions in England and the states of this country, and of the proceedings of the commission on uni- formity of laws, leave no possible doubt as to the purpose of this section." And after reviewing the history of the statute the learned judge continued: "It seems evident, therefore, from the history of this subject, as well as from the obvious purpose for which this statute was enacted, no less than from the language of the statute itself, that the New York rule, so called, has been modified so as to conform to the rule in England and in our Fed- eral court of last resort." And in all the other states where the question has arisen, the courts have held that the legislative in- tent to establish the federal rule is clear. Bruner v. New Uni- versal Fertilizer Co., 218 Mass. 300 ; Lowell v. Bickf ord, 201 Mass. 543; Voss v. Chamberlain, 139 Iowa, 569; Graham v. Smith, 155 Mich. 65; Elk Valley Coal Co. v. Third Nat. Bank, 157 Ky. 617; Brooks v. Sullivan, 129 N. C. 190; Payne v. Zell, 98 Va. 294; Felt v. Bush, 41 Utah, 467; German Amer. State Bank v. Lyons, 127 Minn. 390; National Bank of Commerce v. Morris, 156 Mo. App 51, 52; Smathers v. Toxaway Hotel Co., 162 N. C. 346; German- Am. Bank v. Wright, 148 Pac. Rep. (Wash.) 769; Melton v. Pen- sacola Bank & Trust Co., 190 Fed. Rep. 126, 111 C. C. A. 166; Lust Co. v. Markee, 179 Fed. 764. When the provisions of sec- tion twenty-seven are considered together with the provisions of section twenty-five the intent seems to be clear. The holder, who has taken the paper as collateral security, very plainly has a lien upon it, and, therefore, is within the terms of section twenty-seven. The only question then is, whether he must be excluded from the operation of this section merely because his lien was acquired for an antecedent indebtedness. But as the statute in another place expressly declares that " an antecedent or pre-existing debt con- stitutes value " (sec. 25) there is no warrant for reading any such exception into the section. Extent of lien.— Thus, a bank, having in its possession nego- tiable securities of its customer, would be, by virtue of its general CONSIDERATION. 65 lien, a holder for value to the extent of the balance due from each customer. So, any person to whom negotiable securities are pledged as collateral would be a holder for value to the extent of the amount due to him. Wilkins v. Usher, 123 Ky. 696; Fifth Nat. Bank v. McCrory, 177 S. W. Rep. (Mo. App.) 1058. But if such securities should be sold to pay such balance or debt, the purchaser, if a holder in due course within section 52, though he should pay less than their face value for them, could enforce them for the full amount thereof. See section 57. Right to sue.— Under sections 27 and 51 a person who holds a note or bill as collateral security may sue thereon. Mersick v. Alderman, 77 Conn. 634; American Nat. Bank v. Hill, 85 S. E. Rep. (N. C.) 209. Amount of recovery. — Ordinarily the pledgee is entitled to re- cover the full amount due on the instrument, with liability to ac- count for the surplus to the pledgor. Camden Nat. Bank v. Fries- Breslin Co., 214 Pa. St. 395. But if the pledgor could not recover upon the instrument, then the extent of the recovery will be lim- ited to the amount of the debt due to the pledgee. Benton v. Likyta, 84 Neb. 808; Elk Valley Coal Co. v. Third Nat. Bank, 157 Ky. 617. See also Stoddard v. Kimball, 6 Cush. 469; Fisher v. Fisher, 98 Mass. 303; Chicopee Bank v. Chapin, 8 Mete. 40. The principle upon which the rule is founded is that, in such case, the pledgee would hold the surplus for the pledgor, and as the pa- per in the hands of the pledgor is void, all that ought to be re- covered by the pledgee is the amount due h^a. Burner v. New Universal Fertilizer Co., 218 Mass. 300. Where principal debt not due. — The fact that the principal obli- gation was not due at the time of bringing the suit is no defense; for the pledgee has the right to enforce the collection of a col- lateral note, even though the principal debt is not yet due. Eli Valley Coal Co. v. Third Nat. Bank, 157 Ky. 617. § 28. Failure of consideration — partial failure. — Absence or failure of consideration is matter of de- fense 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 liqui- dated amount or otherwise. 5 66 THE NEGOTIABLE INSTRUMENTS LAW. Where plaintiff not holder in due course. — As against any person not a holder in due course, while the paper itself is prima facie evidence of the consideration, the question of consideration is al- ways open; and it is competent for the defendant to show by parol that there was no sufficient consideration, or that the considera- tion has failed. Hermann v. Combs, 119 Md. 41; Tatum v. Com- mercial Bank, 185 Ala. 249; Batterman v. Dutcher, 95 App. Div. (N. Y.) 213; Ferguson v. Netter, 141 Id. 274; Cowee v. Cornell, 75 N. Y. 91, 98; Anthony v. Valentine, 130 Mass. 119; Ingersoll v. Martin, 58 Md. 67; Corlies v. Howe, 11 Gray, 125; Brenneman v. Furniss, 90 Pa. St. 186. But under the express terms of the statute failure of consideration is not a defense as against a holder in due course. Franz v. Schiro, 136 La. 842; Interstate Finance Co. v. Schroder, 74 W. Va. 67. Burden of proof. — Under the statute, the burden of proving failure of consideration is on the party alleging it. Piner v. Brit- tain, 165 N. C. 401; Bank of Gresham v. Walch, 157 Pac. Eep. (Ore.) 534; Bringman v. Von Glahn, 71 App. Div. (N. Y.) 537; Carter v. Butler, 264 Mo. 306, 330. And this was the rule prior to the adoption of the statute. Jennison v. Stafford, 1 Cush. 168. Total failure of consideration does not impose upon an innocent holder the burden of proving that he gave value for the paper. Wilson v. Lazier, 11 Gratt. 477 ; Albrecht v. Atrimpler, 7 Pa. St. 476. Negotiability. — The failure of consideration does not affect the negotiability of the instrument. Dingman v. Amsink, 77 Pa. St. 114. Eenewal. — If at the maturity of a negotiable promissory note which was without consideration, the maker makes a partial pay- ment thereon and gives a new note for the balance, the new note is without consideration,) and no action can be maintained thereon by the payee against the maker. Seager v. Drayton, 218 Mass. 571. Estoppel.— The maker of a note who induces another to pur- chase it from the payee, assuring him that it is valid and will L>< paid, cannot set up the illegality of the consideration! against the assignee. Holzbog v. Bakrow, 156 Ky. 161. Where instrument is past due. — The mere fact that an accom- modation note was transferred by the party accommodated after CONSIDERATION. 67 due to a holder for value, does not permit the maker to defeat re- covery upon the ground that the note was for accommodation and without consideration moving to him. Marling v. Jones, 138 Wis. 82, 90. Exchange of notes. — Upon an exchange of promissory notes, each note is a valid consideration for the other, and is fully avail- able in the hands of the holder; and the fact that one of the notes is not paid at maturity does not sustain a defense of failure of con- sideration in an action upon the other. Eice v. Grange, 131 N. Y. 149; Woman v. Frost, 52 N. Y. 422. Partial failure of consideration. — See Black v. Rigway, 131 Mass. 80; Cline v. Miller, 8 Md. 274; Davis v. Wait, 12 Oregon, 425. Unliquidated claims. — The rule, both in this country and in England, has been that whenever the defendant is entitled to go into the question of consideration he may set up the partial, as well as the total, want of consideration. Daniel on Negotiable Instruments, § 210. But it has been held in some cases that the part alleged to have failed must be distinct and definite, for only a total failure or the failure or a specific and ascertained part can be availed of by way of defense; and in the case of an unliquidated claim the party must resort to his cross action. Pulsifer v. Hotchkiss, 12 Conn. 234; Drew v. Towle, 7 Fost. 412; Moggridge v. Jones, 14 East. 485; Trickey v. Lame, 6 M. & W. 278. In other cases it is held that the defendant may recoup his damages though they be un- liquidated. Davis v. Wait, 12 Oregon, 425; Wyckhoff v. Eunyon, 33 N. J. Law, 107. As to what is necessary to constitute one a holder in due course, see sections 53-57. By what law governed. — The right to interpose the defense of want of consideration is governed by the lex loci. Herdic v. Eoes- sler, 109 N. Y. 127, 133. § 29. Accommodation party — definition — liability. — An accommodation party is one who has signed the instrument as maker, drawer, acceptor or indorser, without receiving 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, not- 68 THE NEGOTIABLE INSTRUMENTS LAW. withstanding such holder at the time of taking the in- strument knew him to be only an accommodation party. Variant reading. — In Illinois the words " without receiving value therefor, and," after the word " indorser " are omitted, and the following is added at the end of the section : ' ' And in case a transfer after maturity was intended by the accommodating party notwithstanding such holder acquired title after maturity." Meaning of terms. — The words "without receiving value there- for" in section fifty-five refer to the instrument itself, and not to the loan of the name by way of accommodation. Morris County Brick Co. v. Austin, 79 N. J. Law, 273. Basis of the rule. — An accommodation note, in the strict sense, is a loan of the maker's credit, without instructions as to the man- ner of its use. Lenheim v. Wilmarding, 55 Pa. St. 73; Bankers' Iowa State Bank v. Mason Hand Lathe Co., 121 Iowa, 570, 572. He cannot set up as a defense that it was given without consideration ; for this would defeat the very purpose for which it was made. Car- penter v. National Bank of the Republic, 106 Pa. St. 170, 172. In respect to third persons, the law considers him in the character he has assumed, and will not permit him to allege that the paper to which he gave his name was an imposition, nor to gainsay its reality by proof that it was a fiction. It shall be taken pro veritate that he was the maker, for de veritate that was the very thing he was intended to be. Bank of Montgomery County v. Walker, 9 S. & E. 229; Stephen v. Monongahela National Bank, 88 Pa. St. 157, 162-3. And this is the rule though the note be pledged merely as collateral security for the debt of the payee. Lord v. Ocean Bank, 20 Pa. St 384. Bight to retract. — An accommodation indorser has the right to retract his indorsement at any time before the paper is negotiated. His consent to be indorser is necessary to make him such. He can- not be compelled to indorse whether he will or no; and as the in- strument is a mere blank piece of paper until it passes into other hands for valuable consideration, it follows that he has the same right to retract the indorsement already made as he had to refuse his indorsement in the first instance; that is, his indorsement and his continuing to be so are alike Voluntary until rights arise by the CONSIDERATION. 69 negotiation to third parties. Berkely v. Tinsley, 88 Vt. 1001, 1004. And the purchaser of an accommodation note, after its maturity, gets no better nor greater right to enforce it against the maker or indorsee than if it were ordinary negotiable paper given for value. Cottrell v. Watkins, 89 Va. 801. Exchange of notes. — A mutual exchange of notes will amount to a sufficient consideration, so that the notes will not be regarded as accommodation paper. Williams v. Banks, 11 Md. 198; Eice v. Grange, 131 N. Y. 149; Woman v. Frost, 52 N. T. 422. Married woman as accommodation party. — The statute does not change the law of New Jersey so as to validate the contract of a married woman obligating her as surety for her husband or to pay the debt of another person. People's Nat. Bank v. Schepflin, 73 N. J. Law, 29, 38. In Massachusetts, on the other hand, since the Negotiable Instruments Act, as well as before, if a married woman indorses for accommodation the note of a partnership of which her husband is a member payable to him and indorsed also by him, she is liable on her contract of indorsement to a bank to which her husband acting for the partnership negotiates the note. Middle- borough National Bank v. Cole, 191 Mass. 168. Corporations as accommodation parties. — The provision of the statute does not apply to corporations, which, as a general rule, are without power to bind themselves as accommodation parties. A national bank has no such power, National Bank of Commerce v. Atkinson, 55 Fed. Rep. 465, 27 U. S. App. 88; nor has a state bank, The Bank of Genesee v. The Patchin Bank, 13 N. Y. 309; Farmers' & Mechanics' Bank v. Butchers' & Drovers' Bank, 16 N. Y. 125, 128; Morford v. The Farmers' Bank of Saratoga County, 26 Barb. 568; nor a manufacturing corporation, Jacobus v. James- town Mantel Co., 211 N. Y. 154; The Central Bank v. The Empire Stone Dressing Co., 26 Barb. 23; The Bridgeport City Bank v. The Empire Stone Dressing Co., 30 Barb. 421; The Farmers' & Mechanics' Bank v. The Empire Stone Dressing Co., 4 Bosw. 275; Wahlig v. The Standard Pump Manufacturing Co., 25 N. Y. St. Rep. 864; Filon v. The Miller Brewing Co., 38 N. Y. St. Rep. 602; National Bank of Newport v. Snyder Manufacturing Co., 117 App. Div. (N. Y.) 371; Monument National Bank v. Globe Works, 101 Mass. 57; nor a railroad company, Davis v. Old Colony Railroad Company, 131 Mass. 258; J. G. Brill Co. v. Norton & Taunton St 10 THE NEGOTIABLE INSTRUMENTS LAW. Ry. Co., 189 Mass. 431; nor a warehousing and security company, The National Park Bank v. G. A. M. W. & S. Co., 116 N. Y. 281; nor a life insurance company, Aetna National Bank v. Charter Oak Life Insurance Company, 50 Conn. 167; nor a turnpike company, Hall v. Auburn Turnpike Co., 27 Cal. 256 ; nor an oil company, Culver v. Reno Real Estate Company, 91 Penn. St. 367. No cor- porations organized under the statutes of New York are authorized to bind the property of their shareholders by accommodation indorse- ments. Fox v. Rural Home Co., 90 Hun, 365, 367. But a cor- poration having a general power to issue negotiable paper, and to indorse the same for its own benefit in the course of its business, will be liable on its accommodation indorsement when the, paper passes into the hands of a bona fide holder for value before matur- ity, without notice of the character of the indorsement. Cox & Sons Co. v. Northampton Brewing Co., 245 Pa. St. 418; Central Trust Co. v. Smurr & Kamen Co., 191 111. App. 613. And a corporation, having either express or implied power to issue negoti- able paper, is presumed to act within the scope of such power ; and hence there is a presumption in favor of the validity of negotiable paper issued by it. Id. See also Howard v. Boorman, 17 Wis. 459 ; Lehigh Valley Coal Co. v. West Depere Agr. Works, 63 Wis. 45. When, in an action upon a promissory note, it is shown without dispute that the defendant, a manufacturing corporation, made a note for the accommodation of the payee, another corporation, and that the notes were renewed from time to time by the payee, which always paid the discount, the defendant is entitled to a rul- ing that the paper is accommodation paper within the terms of the statute, and it is error to submit that question to the jury. Nat. Bank of Newport v. Snyder Manufacturing Co., 117 App. Div. (N. Y.) 370. Burden of proof where corporation sought to be held. — On proof that the corporation became a party to the paper for accommoda- tion, the holder has the burden of showing that he became such holder for value, and without notice that the corporation was an accommodation party. Abbot v. LePrevost, 166 App. Div. (N. Y.) 40; Jacobus v. Jamestown Mantel Co., 211 N. Y. 154. Notice where paper negotiated for officer's benefit. — Where an officer of a corporation who has executed a note on behalf of the corporation negotiates the same for his individual benefit, the CONSIDERATION. * 71 holder is put upon inquiry. Ward v. City Trust Co., 192 N. Y. 61. And the fact that another officer joins in the execution of the pa- per does not relieve the holder from the duty of making inquiry. Newman v. Newman, 160 App. Div. (N. Y.) 331. Partner indorsing for accommodation. — An indorsement by a partner of his separate accommodation note with the name of hia firm is a sufficient indication of the nature of the transaction to make it the duty of the bank which discounts it to inquire into hi« authority to use the firm name for the occasion, unless there are circumstances from which the authority can be implied. Tanner v. Hall, 1 Pa. St. 417. Bight to impose conditions. — The statute does not change the rule that an accommodation party has the right to determine for himself what use shall be made of the instrument which he signs. He may impose material or immaterial conditions and terms, and no person can enforce the instrument against him who takes it in violation of such terms and conditions and with notice thereof. Benjamin v. Eogers, 126 N. Y. 60. Thus, where the defendant in- dorsed a note upon the condition that it should not be negotiated in New York, assigning as a reason that he did not wish to be sued upon it in the state, it was held that, while the restriction did not seem to be material, yet the diversion was a defense to the indorser as against one who was not a holder for value. United States Nat. Bank v. Ewing, 131 N. Y. 506. But see Eogers v. Sipley, 35 N. J. Law, 86. Knowledge of holder that paper was for accommodation. — For cases in which this provision of the statute has been applied, see Packard v. Windholz, 88 App. Div. (N. Y.) 365; Smith v. State Bank, 104 N. Y. Supp. 750; Black v. First Nat. Bank of West- minster, 96 Md. 399; White v. Savage, 48 Oregon, 604; Bankers' Iowa State Bank v. Mason Lathe Co., 121 Iowa, 570; Neal v. Wil- son, 213 Mass. 336; Marling v. Jones, 138 Wis. 82; Wilborn v. Hawkins, 49 Atl. Rep. (R. I.) 855. Debt of third person. — The statute has not changed the rule of the common law that where one, for the accommodation of a debtor and without consideration, gives his note or check to the creditor of the debtor in payment of, or as security for, the debt due from the debtor to the creditor, he is liable to the creditor on the note or check. Neal v. Wilson, 213 Mass. 336. Where one gives a check 72 THE NEGOTIABLE INSTRUMENTS LAW. to a bank to make good the overdraft of another person, the bank may sue on such check, though it was given at the solicitation of the cashier. Id. * Paper past due. — The mere fact that an accommodation note was transferred by the party accommodated after due, to a holder for value does not permit the accommodation maker to defeat re- covery at the suit of a holder for value merely upon the ground that the note was accommodation paper, and without consideration moving to the maker. Marling v. Jones, 138 Wis, 82. Order of liability. — Accommodation parties to ordinary com- mercial paper are liable to each other in succession as their names appear upon the instrument, unless they specially agree that they are to be bound jointly and not severally, in which case they are entitled to contribution as among themselves. Noble v. Breeman Spaulding Co., 65 Oregon, 93. The liability of an accommodation maker and an accommodation guarantor is successive and not con- current, the liability of such maker being primary and the liability of such guarantor secondary. Id. The fact that the accommoda- tion guarantor knew when he executed the guaranty that certain of the makers were accommodation parties, did not, in the absence of a special agreement, make his and their liability concurrent in- stead of successive. Id. See also Bradley Engineering, etc. Co. v. Heyburn, 56 Wash. 628. Where co-maker under disability. — An accommodation maker is liable, although his co-maker, for whose accommodation he signed, successfully pleads his infancy as a defense. Hodgins v. North- western Finance Co., 148 Pac. Rep. (Okl.) 717. Set-off. — The statute has not changed the rule that the indorser of a promissory note made as an accommodation for him and held by a bank which becomes insolvent before the note matures, may elect to have such notes become due and payable at once and set-off against it the amount of his deposit with the bank. Building & Engineering Co. v. Northern Bank, 206 N. T. 400. Bight to subrogation. — As to the right of an accommodation maker to subrogation, see Jennings v. Wall, 217 Mass. 278. NEGOTIATION. 73 ARTICLE IV. Negotiation. Section 30. What constitutes negotiation. 31. How indorsement made. 32. Indorsement must be of entire instrument 33. Kinds of indorsement. 34. Special indorsement — indorsement in blank. 35. Converting blank indorsement into spe- cial indorsement. 36. When indorsement restrictive. 37. Effect of restrictive indorsement — rights of indorsee. 38. Qualified indorsement. 39. Conditional indorsement. 40. Indorsement of instrument payable to bearer. 41. Indorsement where payable to' two or more persons. 42. Instrument payable to cashier — To fiscal officer of corporation. 43. Mistake in name of payee — form of in- dorsement. 44. Indorsement in representative capacity. 45. Presumption as to time of. 46. Presumption as to place of. 47. Continuation of negotiable character. 48. Striking out indorsement. 49. Transfer without indorsement — effect of. 50. When prior party may negotiate instru- ment. § 30. What constitutes negotiation.— An instrument is negotiated when it is transferred from one person 74 THE NEGOTIABLE INSTRUMENTS LAW. to another in such manner as to constitute the trans- feree the holder thereof. If payable to bearer it is negotiated by delivery; if payable to order it is nego- tiated by the indorsement of the holder completed by delivery. Meaning of term negotiate. — Respecting the meaning of the word " negotiated " as used in this section, the Supreme Court of Nebraska said in a late case : " Negotiation means the act by which a bill of exchange or promissory note is put into circulation by be- ing passed by one of the original parties to another person. If A gives B a check on C bank, and B presents the check at the counter of C, no negotiation is necessary or had. He simply demands and receives payment ; but if B goes to D store and buys a bill of goods and tenders the indorsed check in payment, he negotiates the check. The difference is clear and well defined. The presentation by de- fendant of the check in controversy for payment, was not a ' nega- tiation ' of the check within the meaning of the statute quoted. Nor do we think that the payment by a bank of a check drawn upon it, constitutes such bank a ' holder ' within the meaning of the statute." Aurora State Bank v. Hayes Eames Elevator Co., 88 Neb. 187, 190. See also National Bank of Commerce v. Farmers' & Mer- chants' Bank, 87 Neb. 843; Scotland Co. Nat. Bank v. Hohn, 146 Mo. App. 699. Where, after the sale of a traction com- pany's property, the purchasers deposited notes for the price with a bank, and a cashier's check was issued payable to the secretary of the traction company, by whom it was indorsed to a trustee, who indorsed it in blank, and left it in the custody of the bank with the notes : Held, that the cashier's check was not negotiated within the meaning of this section. Seaman v. Muir, 144 Pac. Rep. (Ore.) 121. Place of indorsement. — An indorsement is usually written on the back of the instrument, but the place is not essential. If the payee write his name on any part of the instrument, with the in- tention of indorsing it, that is a sufficient indorsement. Haines v. Dubois, 29 N. J. Law, 259. See section 17, subd. 6. Necessity for delivery. — The indorsement alone without delivery conveys no title. Dann v. Norris, 24 Conn. 337; Clark v. Sigour- ney, 17 Conn. 520 ; Middleton v. Griffith, 57 N. J". Law, 442 ; Spen- cer v. Carstarphen, 15 Colo. 445. NEGOTIATION. 75 Agreement not to negotiate. — A parol agreement, although en- tered into at the time of making negotiable paper, that the payee will not negotiate it and will renew it, etc., is inadmissible to vary the effect of the paper. Benton v. Sikyta, 84 Neb. 808; Heist v. Hart, 73 Pa. St. 286. So, it has been held that evidence of an oral agreement that payment was not to be called for until certain paint- ings of the maker had been sold is an attempt to vary the written contract. Wooley v. Cobb, 165 Mass. 503. See Woods Son Co. v. Schaefer, 173 Mass. 443. Paper payable to person named or bearer. — By former statutes in some states, notes made payable to a person named therein or bearer must have been indorsed to pass the legal title. Garvin v. Wiswell, 83 111. 218 ; Blackman v. Lehman, 63 Ala. 547. The stat- ute has changed the law in those states. See Davis v. First Nat. Bank of Blakeley, 68 So. Rep. (Ala.) 261. Transfer otherwise than by indorsement. — It was not intended by this section to prescribe an exclusive mode by which the in- strument may be transferred; but merely to prescribe a mode by which the transfer can be made so as to protect the transferee against infirmities in the instrument or defects in the title of the transferrer. Carter v. Butler, 264 Mo. 306. Hence, where a note is indorsed specially to a bank it may be sued upon by a person to whom it has been assigned by a deed of assignment. Id. § 31. How indorsement made. — The indorsement must be written on the instrument itself or upon a paper attached thereto. The signature of the indorser, without additional words, is a sufficient indorsement. Variant readings. — In Illinois the following is added at the end of the section: "And the addition of words of assignment or of guaranty shall not negative the additional effect of the signature as an indorsement unless otherwise expressly stated." Rale at common law. — The rule as commonly stated was that where there is not room on the bill, the indorsement may be on an allonge. But it is not necessary that there should be a physical impossibility of writing the indorsement on the instrument itself; it may be on an allonge, whenever the necessity or convenience of the parties requires it. See Folger v. Chase, 18 Pick. 63 ; Crosby v. 76 THE NEGOTIABLE INSTRUMENTS LAW. Roub, 16 Wis. 616; French v. Turner, 15 Ind. 50. Besides, any such statement of the rule would give rise to a question of fact which might be determined variously. But see Bishop v. Chase, 156 Mo. 158; Franklin v. Twogood, 18 Iowa, 515; Peach v. Bligh, 37 111. 317; Haskell v. Brown, 65 111. 29; Wall v. Hollenbeck, 19 Neb. 639. For a case applying the statute, see First Nat. Bank v. Bickel, 143 Ky. 757. Signature without more — Assignment. — The signature of the in- dorser without more is the customary and mercantile form of in- dorsement. But an indorsement of a promissory note as follows: " For value received, I hereby assign, transfer and set over to B all my right, title, interest and claim in the within note," has been held to pass a legal title to the same, and not to destroy its nego- tiability. Hall v. Toby, 110 Pa. St. 318, see also Thorp v. Minde- man, 123 Wis. 149. So, where the transfer was in the following form: " I Hear By assine this note over to E. H. Farnsworth, this the Nov. 1st, 1910." Farnsworth v. Burdick, 94 Kans. 749. But see Craig v. Palo Alto Stock Farm, 16 Idaho, 701. The words " for value received I hereby guarantee payment of the within note and waive demand and notice of protest on same when due " written on the back of a note by the payee, do not constitute an indorsement and transfer in due course, but constitute a mere guaranty of payment. Ireland v. Floyd, 42 Okla. 609. Endorsement by stamp. — The name of the drawee stamped on the back of a draft with a rubber stamp, by one having authority to do so, and with intent to indorse it, is a valid indorsement, but does not prove itself. Mayers v. McRimmon, 140 N. C. 640. And the transferee, having possession under such an indorsement, is deemed prima facie a holder in due course. Evans v. Freeman, 142 N. C. 61. Burden of proof as to signature. — Under the statute, as at com- mon law, the holder has the burden of proving the genuineness of each indorsement necessary to his title. Hathaway v. County of Delaware, 185 N. Y. 374; Marks v. Munson, 149 Pac. Rep. (Colo.) 440. But in some states the possession of the instrument is, by other statutes, made presumptive evidence of the genuineness of the signatures thereon. See, for example, Murphy v. Skinner's Es- tate, 160 Wis. 554. NEGOTIATION. T7 § 32. Indorsement must be of entire instrument. — The indorsement must be an indorsement of the entire instrument. An indorsement which purports to trans- fer 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 nego- tiation of the instrument. But where the instrument has been paid in part, it may be indorsed as to the resi- due. Transfer of part interest. — J'or example, where a note for $500 was indorsed, " Pay to L four hundred dollars out of this note," it was held L could not recover from the maker. Lindsay v. Price, 33 Tex. 282. Where the plaintiff alleged in his complaint that the payee had indorsed to the plaintiff a one-half interest in the note, it was held that the complaint failed to state a cause of action at law. Barkley v. Muller, 164 App. Div. (N. Y.) 35. Partial payment. — The indorsement of a partial payment on the instrument does not render it non-negotiable. Smith v. Shippey, 182 Pa. St. 24. § 33. Kinds of indorsement. — An indorsement may be either special or in blank; and it may also be either restrictive or qualified, or conditional. § 34. Special indorsement — indorsement in blank. — 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. An indorse- ment in blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery. Variant readings. — In Wyoming the word " made " is inserted between the words " be " and " payable." In Massachusetts the words " does not specify any indorsee " are substituted for the words ' ' specifies no indorsee. ' ' 78 THE NEGOTIABLE INSTRUMENTS LAW. Parol evidence.— The legal effect of an indorsement in blank may not be varied by parol. Torbert v. Montague, 38 Colo. 325. § 35. Converting blank indorsement into special in- dorsement. — The holder may convert a blank indorse- ment into a special indorsement by writing over the signature of the indorser in blank any contract con- sistent with the character of the indorsement. Rule at common law. — The section makes no change in the law. See Beckwith v. Angell, 6 Conn. 317. Special indorsement — Guaranty. — Thus, he might write over the blank indorsement a special indorsement to himself, or to some other person. But he could not write over it a contract of guar- anty; for the effect of this would be to deprive the indorser of his right to notice in case of non-payment. Belden v. Hann, 61 Iowa, 42. Such a contract would be inconsistent with the character of the indorsement. § 36. When indorsement restrictive. — An indorse- ment is restrictive, which either: 1. Prohibits the further negotiation of the instru- ment; or 2. Constitutes the indorsee the agent of the indorser; or 3. Vests the title in the indorsee in trust for or to the use of some other person. But the mere absence of words implying power to negotiate does not make an indorsement restrictive. Variant readings. — In Montana the word " future " is substi- tuted for " further " in subdivision one. This is doubtless an error in engrossing, and not an intentional change. Restriction upon further negotiation. — "Pay Bank of A only" would be such an indorsement as is meant in subdivision one of this section. Indorsement for collection.— The most frequent instance of this is the indorsement "for collection." Such indorsement does not NEGOTIATION. 79 transfer the title to the indorsee, but constitutes him merely an agent to present the paper, and receive payment thereof for the ac- count of the owner. Commercial National Bank v. Armstrong, 148 U. S. 50; National Butchers' and Drovers' Bank v. Hubbell, 117 N. Y. 384; Armstrong v. National Bank of Boyrtown, 90 Ky. 481; Freeman's Bank v. National Tube Works, 151 Mass. 413 ; Sweeney v. Easter, 1 Wall. 173; Commercial National Bank v. Hamilton National Bank, 42 Fed. Eep. 880; City Bank of Sherman v. Weiss, 68 Tex. 332 ; Central E. E. Co. v. First National Bank of Lynch- burg, 73 Ga. 384; Bank of Metropolis v. First National Bank of Jersey City, 19 Fed. Eep. 658; Blaine v. Bourne, 11 E. I. 119; Cecil Bank v. Farmers' Bank, 22 Md. 148 ; Northwestern National Bank v. Bank of Commerce, 107 Mo. 402; Murchison Nat. Bank v. Dunn Oil Mills, 150 N. C. 718. Where an indorsement in blank is accompanied by a letter stating that the draft is for " collection and credit," the indorsement and letter must be read together, and the effect is to make the indorsement restrictive, and the same in character as if the contents of the letter had been incorporated in the indorsement. Bank of America v. Waydell, 187 N. Y. 115. As to the liability of an indorser to whom the instrument has been indorsed "for collection," see note to section 66. Title in trust. — See Lloyd v. Sigourney, 5 Bing. 252, 3 M. & P. 229; Sneel v. Prescott, 1 Atk. 245. Illustration: Pay A for account of B. In such case the title passes to A; but the indorse- ment is restrictive to the extent that it gives notice that the in- strument cannot be negotiated by A for his own debt, or for his own benefit. Hook v. Pratt, 78 N. Y. 371, 375. Omission of words "to order" in indorsement. — Thus, if the instrument is drawn to the order of A, his indorsement " Pay to B " does not restrict the further negotiation of the instrument, though the words " or order " are not included in the indorsement. See Leavitt v. Putnam, 3 N. Y. 494. § 37. Effect of restrictive indorsement — rights of indorsee. — 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; 80 THE NEGOTIABLE INSTRUMENTS LAW. 3. To transfer his rights as such indorsee, where the form of the indorsement authorizes him to do so. But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement. Variant readings. — In Illinois the following changes are made: At the end of subdivision two, the following is added: " Except in the case of a restrictive indorsement specified in section 36, sub-section 2, any action against the indorser or any prior party that a special indorsee would be entitled to bring. ' ' In subdivision three the word " instrument " is substituted for the words " his rights as such indorsee;" and at the end of the section the fol- lowing is added: " specified in section 36, sub-section 1, and as against the principal or cestui que trust only the title of the first indorsee under the restrictive indorsements specified in section 36 and sub-sections 2 and 3 respectively." Action by indorsee.— Statute applied in Smith v. Bayer, 46 Ore. 143; Schmidt v. Pegg, 172 Mich. 160; Craig v. Palo Alto Stock Farm, 16 Idaho, 701. See also Gleason v. Thayer, 87 Conn. 248. Paper indorsed for collection. — The statute enables a bank to sue in its own name on paper indorsed to it "for collection." Metzger v. Sigall, 83 Wash. 80. As to whether this could be done before the statute there was some conflict in the authori- ties. The right is sustained by Wilson v. Tolson, 79 Ga. 137; Cummings v. Kohn, 12 Mo. App. 585; Wintermute v. Torrent, 83 Mich. 555; Regina Flour Mill Co. v. Holmes, 156 Mass. 11; Spofford v. Norton, 126 Mass. 333; Whiten v. Hayden, 9 Allen, 408 ; Roberts v. Parrish, 17 Oregon, 583 ; McDaniel v. Pressler, 3 Wash. 636; Ward v. Tyler, 52 Pa. St. 393. But in Rock County National Bank v. Hollister, 21 Minn. 385, it was held that the pro- visions of the Code requiring the action to be brought in the name of the real party in interest would prevent an indorsee to whom the instrument was indorsed " for collection " from maintaining the action. Equities of prior parties. — The restrictive indorsee takes the paper subject to all equities that might have been asserted by the principal obligor had it not been indorsed. Smith v. Bayer, 46 Oregon, 143. NEGOTIATION. 81 § 38. Qualified indorsement. — A qualified indorse- ment constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser 's signature the words "without recourse" or any words of similar import. Such an indorsement does not impair the negotiable character of the instru- ment. How qualified indorsement made. — See Grant v. Fleming, 46 Pa. St. 140; Cowles v. Harts, 3 Conn. 522. But the words em- ployed must clearly indicate that the indorser intends to disclaim liability. Fassin v. Hubbard, 55 N. Y. 470. Hence, where the payee wrote above his signature an assignment in the following form, " I hereby assign the within note to ," Held, that this did not relieve him from liability as indorser. Markey v. Casey, 108 Mich. 184. An indorsement " without recourse and without warranty of any character," is a qualified indorsement within the meaning of this section. Schmidt v. Pegg, 1Y2 Mich. 160. Parol evidence. — The words "without recourse" following the name of the first, and preceding the name of a second, indorser may, as between them, be shown by parol evidence to apply to the former instead of to the latter. Corbett v. Fetzer, 47 Neb. 269; Goolrick v. Wallace, 154 Ky. 596. And this although the second indorsee took it without knowing that the limitation was applicable to the first indorser. Fitchburg Bank v. Greenwood, 2 Allen, 434. Effect as to negotiability. — A qualified indorsement in no re- spects affects the negotiability of the instrument, but simply quali- fies the duties, obligations and responsibilities of the indorser re- sulting from the general principles of the law. Stewart v. Pres- ton, 1 Fla. 10, 22. And whatever interest would pass by a general or full indorsement will pass by a qualified indorsement. Stewart v. Preston, 1 Fla. 10, 22; Epler v. Funk, 8 Pa. St. 468. The pro- vision of this section, that a restrictive indorsement does not im- pair the negotiable character of the instrument, applied in Elgin City Banking Co. v. Hall, 119 Tenn. 548; Leavitt v. Thurston, 38 Utah, 351; Page v. Ford, 65 Oregon, 450; Bank of Sampson v. Hatcher, 151 N. C. 359. 6 82 THE NEGOTIABLE INSTRUMENTS LAW. Indorsement in blank. — If the indorsement is in blank, without recourse, any subsequent holder is authorized to fill up the blank with his own name as indorsee. Lyon v. Ewings, 17 Wis. 61. Equities of prior parties.- — A qualified indorsement is not such a departure from the usual course of business as to put the trans- feree on inquiry as to the equities between the original parties, Bisbing v. Graham, 14 Pa. St. 14; Lomax v. Picot, 2 Eand, 260. And this is so, though the words without recourse are added to an indorsement in the following form : " For value received I hereby sell, transfer and assign the within note. ' ' Thorp v. Mindeman, 123 Wis. 140 (a case arising under the statute). See note to section 56. § 39. Conditional indorsement. — Where an indorse- ment is conditional, a party required to pay the in- strument may disregard the condition and make pay- ment 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. Rule at common law. — The first sentence is the same as section 33 of the English Bills of Exchange Act with a slight modifica- tion. In his note to that section Judge Chalmers says: "This section alters the law. It was formerly held that if a bill was indorsed conditionally, the acceptor paid it at his peril if the condition was not fulfilled. This was hard on him. If he dishon- ored the bill he might be liable to damages, and yet it might be impossible for him to find out if the conditions had been ful- filled." See Daniel on Neg. Inst., sections 697, 698a. There ap- pear to be no American cases upon the subject; and the only English case is Robertson v. Kensington, 4 Taunt. 30. Title to paper or proceeds. — The rule adopted in the last sen- tence of this section is somewhat analogous to that which gives to an indorser who has paid a note in part an equitable right pro tanto in the proceeds, where the holder afterward collects the whole amount of the note from the maker. See Madison Square Bank v. Pierce, 137 N. Y. 444. NEGOTIATION. 83 § 40. Indorsement of instrument payable to bearer. — Where an instrument, payable to bearer, is indorsed specially, it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as indorser to only such holders as make title through his indorsement. Variant readings. — In Illinois the section reads: "Where an instrument originally payable to and indorsed specially to bearer is subsequently indorsed specially, it may," etc. But there seems to be some confusion here; for by the express provision of section 34, a "special" indorsement "specifies the person to whom, or to whose order the instrument is payable," and under the act, as under the Law Merchant, there can be no such thing as an instru- ment " indorsed specially to bearer." Bole of the law merchant. — This section makes no change in the law. See Johnson v. Mitchell, 50 Tex. 212; Smith v. Clarke, Peake, 225; Mitchell v. Fuller, 15 Pa. St. 268; Daniel on Neg. Inst., sections 663a, 696. Instrument payable to specified person or bearer. — A check payable to a certain named person, or bearer, need not be in- dorsed, nor need the holder thereof be identified; and a bank paying such check without identification of the holder is not negligent, though the bank, in compliance with its custom, re- quired it to be indorsed. Farmers & Merchants' Bank v. Bank of Rutherford, 115 Tenn. 64. Reason for the rule. — The rule adopted in this section may be inconvenient in practice at times, as, for example, when paper ■drawn payable to bearer is sent through the mail. But to permit the holder to make the instrument payable to a specified person, or to his order, would be to allow him to vary the contract of the acceptor or maker. Thus, if A makes his note payable to B or bearer, he does not assume the obligation of seeing that the instru- ment is properly indorsed ; and upon no rational legal theory should it be in the power of the holder to impose upon him a duty which, by the express terms of his contract, he refused to take upon him- self. Where paper is indorsed in blank. — The section cannot apply where the paper is originally made payable to order and indorsed 84 THE NEGOTIABLE INSTRUMENTS LAW. in blank; for by section 9 a note or bill which, upon its face, is payable to order, becomes payable to bearer only when the last indorsement is in blank; and hence, when a blank indorsement is followed by a special indorsement the instrument is not within the terms of section 9. Thus, if a check drawn to the order of A is indorsed in blank by the payee, and delivered to B, and B indorses it to the order of C, it is not payable to bearer, for the reason that the last indorsement, which by section 9 is made the test, is a special indorsement. The reason for making a distinc- tion in this respect between instruments originally drawn payable to bearer and instruments which have become so payable because indorsed in blank is obvious. In the one case, the maker or drawer has expressly provided that the instrument shall be payable to bearer, and it cannot be made payable to order without modifying these terms. But where, upon its face, it is payable to order, a transferee, taking under a blank indorsement, does not, by indors- ing it specially, change its tenor as originally drawn. § 41. Indorsement where payable to two or more per- sons. — Where an instrument is payable to the order of two or more payees or indorsees who are not part- ners, all must indorse, unless the one indorsing has authority to indorse for the others. Variant readings. — In Wisconsin the word " joint " is inter- polated after the word " or " and before the word " indorsees." Rule at common law. — This section makes no change in the law. The settled rule of the law merchant was that co-payees, not partners, must each indorse, in order to negotiate the paper. Willis v. Green, 5 Hill. 233; Foster v. Hill, 36 N. H. 526; Bennett v. McGaughy, 4 Miss. 192; Wood v. Wood, 16 N. J. L. 428; Smith v. Whiting, 9 Mass. 334; Ryhiner v. Feickert, 92 111. 305; Allen v. Corn Exchange Bank, 87 App. Div. (N. Y.) 335. For cases arising under the statute, see First Nat. Bank v. Gridley, 112 App. Div. (N. Y.) 398; Martz v. State Nat. Bank, 147 App. Div. (N. Y.) 250. § 42. Instrument payable to cashier — to fiscal offi- cer of corporation. — Where an instrument is drawn or NEGOTIATION. 85 indorsed to a person as "cashier" or other fiscal of- ficer of a bank or corporation, it is deemed prima facie to be payable to the bank or corporation of which he is such officer; and may be negotiated by either the indorsement of the bank or corporation, or the indorse- ment of the officer. Variant reading. — In South Dakota the words "the indorse- ment of " before the words " the bank or corporation " near the end of the section are omitted. Indorsement to cashier. — It is common practice for banks to indorse in this way paper remitted for collection. The rule adopted in the act, so far as it relates to indorsements to cashiers of banks, was well established. See Bank of the State v. Mus- kingum Bank, 29 N. Y. 619; First Nat. Bank v. Hall, 44 N. Y. 395; Bank of Genesee v. Patchin Bank, 19 N. Y. 312; Folger v. Chase, 18 Pick. 63; Farmers', etc., Bank v. Troy City Bank, 1 Dough. (Mich.) 457; Watervliet Bank v. "White, 1 Denio, 608; Lookout Bank v. Aull, 93 Tenn. 645. Under this section it is competent in an action on a certificate of deposit made payable to S as cashier of a bank, and indorsed by him as cashier, to show that he was the cashier of such bank, and was acting in that capacity in transferring the certificate. Johnson v. Buffalo Center State Bank, 134 Iowa, 731. And it is not competent for the bank, for the purpose of showing that the bank was not bound by this act, to prove that S was making use of his official title and authority in his individual interest. (Id.) The provisions of this section do not apply where the cashier's individual name is used without the title of his office. First Nat. Bank of Pomeroy v. MeCullough, 50 Oregon, 508. And the mere posses- sion by a bank of notes payable to its cashier in his individual name does not enable it to maintain an action thereon against the maker. Swanby v. Northern State Bank, 150 Wis. 572. For cases applying the statute, see Griffin v. Erskine, 131 Iowa, 444, 450-451; Craig v. Palo Alto Stock Farm, 16 Idaho, 701. Fiscal officers of other corporations. — The commissioners deemed it wise to extend the rule to all fiscal officers of corporations. Under this provision an indorsement to the treasurer of a savings bank would make the paper payable to the bank. So of an in- 86 THE NEGOTIABLE INSTKUMENTS LAW. dorsement to the treasurer or secretary of a trust company. A check payable to the order of "Treas. of Town of Farmingham" is in legal effect payable to the town. Quincy Mut. Tire Ins. Co. v. International Trust Co., 217 Mass. 370. § 43. Mistake in name of payee — form of indorse- ment. — Where the name of a payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described, adding, if he think fit, his proper signature. Name assumed in business. — Thus, one who, while carrying on business on his own account in the name of a company which has been incorporated, but not organized, receives in payment of a debt contracted with him in such business a promissory note payable to the order of the corporation, may transfer the note by indorsing it in his own name. Bryant v. Eastman, 7 Cush. 111. Conversely, a man will be bound by paper made by him in the name he adopts in his business. Salmon v. Hopkins, 61 Conn. 47. § 44. Indorsement in representative capacity.— Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability. When personal liability negatived. — For a case applying the statute, see Chelsea Exchange Bank v. First U. P. Church, 89 Misc. (N. Y.) 616. In this case persons who indorsed as the financial committee of a church were held not to be bound personally. Indorsement by personal representatives. — As to the liability of executors and administrators who accept or indorse, see Schmittler v. Simon, 101 N. Y. 554. § 45. Presumption as to time of .—Except where an indorsement bears date after the maturity of the in- strument every negotiation is deemed prima facie to have been effected before the instrument was overdue, NEGOTIATION. 87 Rule at common law — Burden of proof. — The rule adopted in this section prevailed at common law. See Mason v. Noonan, 7 Wis. 609. If the defendant alleges that the paper was indorsed after it was due, the burden of proof is on him to show it. White v. Camp, 1 Fla. 94. This rule is important because that, in order to constitute one a holder in due course, he must have taken the instrument before it was overdue. See section 52. The indorse- ment of an overdue note cannot relate back to the date of the note; as a new and independent contract, it takes effect from the time it is made, and must be determined by the laws then in force and the circumstances then existing. Brown v. Hull, 33 Gratt. 23, 30. Tor a case applying the statute, see Cedar Eapids Nat. Bank v. Basharii, 39 Okla. 482. § 46. Presumption as to place of. — Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated. Importance of presumption — Illustrations. — As an indorsement is not merely a transfer of the instrument, but is a new and sub- stantive contract embodying in itself all the terms of the instru- ment, the place where it was made often becomes of importance. See Ingalls v. Lee, 9 Barb. 647; Brown v. Hull, 33 Gratt, 27, 29; Smith v. Caro, 9 Oregon 278; Bank of British N. Am. v. Ellis, 6 Sawyer, 98; Freese v. Brownell, 35 N. J. Law, 285. For example, an indorsement in Massachusetts of a note executed and payable in New York is a Massachusetts contract and governed by the law of that state. Glidden v. Chamberlin, 167 Mass. 486. An in- dorsement in blank of a promissory note dated and payable in the State of New York is presumed, both at common law and under the statute, to have been made here, and one discounting the note in good faith is entitled to rely upon that presumption. Chemical Nat. Bank v. Kellogg, 183 N. Y. 92. Where a married woman, at •her residence in New Jersey, indorsed in blank, for her husband's benefit, his promissory note, dated and payable in New York, where it was discounted in good faith, without notice that the in- dorser was a non-resident, or that the indorsement was made in another state: Held, that she was estopped to deny that her in- dorsement was a New York contract, and from claiming that it was a New Jersey contract. (Id.) 88 THE NEGOTIABLE INSTRUMENTS LAW. Place where note made. — In the absence of evidence to the contrary a note is presumed to have been made at the place where it bears date. Finch v. Calkins, 183 Mich. 298. § 47. Continuation of negotiable character. — An in- strument negotiable in its origin continues to be nego- tiable until it has been restrictively indorsed or dis- charged by payment or otherwise. Rule at common law. — This section does not change the law. See Cumberland Bank v. Hann, 3 Harr. (N. J.) 222. The law was perfectly well settled that a note or bill negotiable in form is negotiable as well after as before it becomes due. National Bank of Washington v. Texas, 20 Wall. 72 ; McSherry v. Brooks, 46 Md. 103, 118 ; French v. Jarvis, 29 Conn. 347 ; Adair v. Lenox, 15 Ore- gon, 489. Rights and liabilities of the parties. — But the rights, duties aad obligations of the parties are by no means the same. The instru- ment becomes, according to legal effect, payable on demand, so far as the indorser is concerned; and presentment for payment must be made within a reasonable time, and due notice of dishonor given to the indorser. Brown v. Hull, 33 Gratt. 23, 28; Berry v. Robinson, 9 Johns. 121; Van Hoosen v. Van Alstyne, 3 Wend. 79; Poole v. Tolleson, 1 McCord, 200; Patterson v. Todd, 18 Pa. St. 426; Rosson v. Carroll, 90 Tenn. 90. But if the paper was pre- sented at maturity and notice of dishonor given to prior parties, it is not necessary that the indorsee after maturity should again present the paper and give them notice of dishonor; for the origi- nal demand and notice were to the benefit of all subsequent hold- ers. French v. Jarvis, 29 Conn. 347. As to the discharge of nego- tiable instruments, see sections 119-125. § 48. Striking out indorsement. — The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorse- ment is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instru- ment. NEGOTIATION. 89 Variant reading. — In Kentucky the word " owner " is substi- tuted for " holder." If this is not merely an error in engrossing, the reason for the change would be difficult to understand. For while " holder " has a clear and well-defined meaning, when used with respect to commercial paper, the word " owner," when so used, is one of those inexact terms which cause confusion. Rule at common law. — This section is declaratory of the law as it existed prior to the enactment of the statute. Jerman v. Ed- wards, 29 App. Cases D. C. 535. Where paper has been indorsed in blank. — The holder may strike out all intervening indorsements, and aver that the first blank in- dorser indorsed immediately to himself. New Haven Mfg. Co. v. New Haven Pulp & Board Co., 76 Conn. 126, 131-132; Byles on Bills, 149; Preston v. Mann, 25 Conn. 127; Bank of America v. Senior, 11 R. I. 376. Striking out indorsements at trial. — Intervening indorsements may be struck out at the trial, and after the plaintiff has finished his case. Ensign v. Fogg, 177 Mich. 317; Mayer v. Jadis, 1 M. & Rob. 247. See also Morris v. Cude, 57 Tex. 337; Rand v. Dovey, 83 Pa. St. 281; Merz v. Kaiser, 20 La. Ann. 379; Vanarsdale v. Hax, 107 Fed. Rep. 878. And it is immaterial that an intermediate indorsement is restrictive. Jerman v. Edwards, 29 App. Cases D. C. 535. Presumption of ownership. — The erasure of intermediate in- dorsements does not destroy the presumption that the person in possession of paper indorsed in blank is the holder thereof. King v. Bellamy, 82 Kans. 301. § 49. Transfer without indorsement — Effect of. — 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 transferrer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferrer. But for the purpose of determining whether the trans- feree is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made. 90 THE NEGOTIABLE INSTRUMENTS LAW. Variant readings. — In Alabama the word "holder" and "said holder" are substituted for transferrer. But the use of "holder'' in this connection is confusing; for by section 191 " holder "is defined to mean the payee or indorsee who is in possession of the instrument, and where the transfer is without indorsement neither the transferrer nor the transferee answers to this description Nor is the matter helped by the use of the archaic form "said." In Colorado the words "if omitted by mistake, accident or fraud'' are added at the end of the first sentence. In Illinois and Mis- souri, the words "to have the indorsement of the transferrer" are struck out, and the following substituted therefor : " to enforce the instrument against one who signed for the accommodation of the transferer, and the right to have the indorsement of the transferer if omitted by accident or mistake." If this is to be taken literally, the right of the transferee to enforce the instrument against 2 prior party is limited to cases where such prior party has signed for the accommodation of the transferer. The reason for the change does not seem to be very clear. In Wisconsin the following is added at the end of the section: "When the indorsement was omitted by mistake, or there was an agreement to endorse made at the time of the transfer, the endorsement when made relates back to the time of transfer." Effect of transfer without indorsement. — Under this section a negotiable instrument, payable to the order of a person named, may be effectually transferred by mere delivery, and the assignee takes the legal title, and may sue in his own name; but he takes subject to the defenses in favor of prior parties. Martz v. State Nat. Bank, 147 App. Div. (N. Y.) 250; Meuer v. Phoenix Nat. Bank, 42 Misc. (N. Y.) 341; Bank of Bromfield v. McKinley, 53 Colo. 279; Callahan v. Louisville Dry Goods Co., 140 Ky. 712; Forter's Admr. v. Metcalf, 144 Ky. 385; First Nat. Bank v. Stam, 186 Mo. App. 439; Sublette v. Brewington, 139 Mo. App. 410; Carter v. Butler, 264 Mo. 306; Keifer v. Talbert, 128 Minn. 519; Steinhilper v. Basnight, 153 N. C. 293; First Nat. Bank of Pomeroy v. Mc- Cullough, 50 Oregon 508; Landis v. White, 127 Tenn. 504; Ire- land v. Seharpenberg, 54 Wash. 558; Smith v. Nelson, 212 Fed. Rep. 56. But under the statute, as well as under the law mer- chant, the indorsement is required to constitute the transferee a holder in due course. Mayers v. McRimmon, 140 N. C. 640, 642- 643. Thus, the purchaser of a certified check, payable to order, NEGOTIATION. 91 who obtains title without the indorsement of the payee, holds it Bubject to all equities between the original parties, although he paid full consideration, without notice. Goshen National Bank v. Bingham, 118 N. Y. 349; Jenkinson v. Wilkinson, 110 N. C. 532. And an intention on the part of the payee and transferee to have the paper indorsed is not sufficient, at least in the absence of an express agreement to indorse. It is the act of indorsement, not the intention, which negotiates the instrument. Goshen National Bank v. Bingham, supra. Where a check, drawn to the order and in the hands of a bona fide holder for value, has at his request been certified by a bank, and is a valid obligation against the maker, and there are no equities between him and the bank, the holder can recover of the bank upon the check, although the maker had not indorsed it to him. Meuer v. Phoenix National Bank, 42 Misc. (N. Y.) 341. Paper sold under execution. — Where a note has been attached and sold under execution, the purchaser may sue thereon without regard to whether the sheriff's indorsement to him was regular or irregular. Fishburn v. Lauderslausen, 50 Ore. 364. Presumption of ownership. — In Callahan v. Louisville Dry Goods Co., 140 Ky. 714, it was said that, under the statute, no indorse- ment is necessary to invest the holder with the presumption of ownership, but possession alone presupposes ownership in due course. See also Roy v. Duff, 152 N. W. Eep. (Iowa) 606. But this appears to be a misapprehension of the effect of the section. The rule that ppssession is prima facie proof of ownership applies only where the paper is drawn payable to bearer, or has become so payable because indorsed in blank; but where it is payable to order, proof of the indorsement of the payee, or of the indorsee to whom it has been indorsed specially, has always been required (Hathaway v. County of Delaware, 185 N. Y. 368) ; and certainly there is nothing in section 49 to change this rule of evidence. If the holder claims title under this section, then, instead of proving the indorsement of the payee as a part of his case, as he would ordinarily do, he should prove the special circumstances which bring the case within the section. Relation back. — An indorsement after notice of a defense does not relate back to the transfer, so as to cut off intervening rights and remedies. Meuer v. Phenix Nat. Bank, 42 Misc. (N. Y.) 92 THE NEGOTIABLE INSTRUMENTS LAW. 341. But it has been held that the holder is protected against everything subsequent to delivery, the indorsement being deemed to relate back to the time of delivery as to any equity outside of the note itself. Beard v. Dedolph, 29 Wis. 136. § 50. When prior party may negotiate instrument. — 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 payment thereof against any intervening party to whom he was personally liable. See note to section 121. RIGHTS OF HOLDER. 93 ARTICLE V. Rights of Holder. Section 51. Eight of holder to sue — payment. 52. What constitutes a holder in due course. 53. Instrument payable on demand — negotia- tiation of — unreasonable time. 54. Notice before full amount paid. 55. When title defective. 56. What constitutes notice of defect. 57. Rights of holder in due course. 58. When subject to original defenses. 59. Presumption — Burden of proof. § 51. Right of holder to sue — Payment. — The holder of a negotiable instrument may sue thereon in his own name; and payment to him in due course discharges the instrument. Pleading. — A complaint in an action upon a promissory note which in substance alleges that on or about a certain date the de- fendant made his promissory note, whereby he promised to pay to the order of the plaintiff a certain sum of money, on a certain date, with interest, but that no part thereof has been paid, states a cause of action. First National Bank v. Stallo, 160 App. Div. (N. Y.) 702. Evidence of title. — Where the plaintiff is the payee, the pro- duction of the paper is sufficient. Tullis v. McClary, 128 Iowa, 493; Williams v. Holt, 170 Mass. 351. And where the instrument is payable to bearer, or, if payable to order, is indorsed in blank, possession is sufficient evidence of title on which to maintain the action. Newcombe v. Fox, 1 App. Div. 389; Weber v. Orton, 91 Mo. 680. The court will never inquire whether he sues for him- self or as trustee for another, nor into the right of possession, unless on an allegation of mala fides. Ellicott v. Martin, 6 Md. 509. 94 THE NEGOTIABLE INSTRUMENTS LAW. And the prima facie case made in favor of the plaintiff by his pos- session of the instrument can not, in the absence of mala fides, be rebutted by evidence that the title was in some other party. (Id.) See also Lowell v. Bickford, 201 Mass. 543. As a general rule, possession by the attorney for a party is possession by the party himself. Kunkel v. Spooner, 9 Md. 462. But, of course, the in- dorsement must be proved; for the mere possession by another than the payee, of an unindorsed negotiable note or bill not pay- able to bearer, is not prima facie evidence of ownership. Hatha- way v. County of Delaware, 185 N. Y. 374; Shepard v. Hanson, 9 N. D. 249; Tyson v. Jayner, 139 N. C. 69. But see Callahan y. Louisville Dry Goods Company, 140 Ky. 712. In the ease last cited the court said : ' ' Reading these four sections together, it is evident that the holder of a note is deemed to be the holder in due course, that is, to have come lawfully into possession of it, and he may maintain an action on it in his own name. No indorsement is necessary to invest the holder with the presumption of owner- ship, but possession alone presupposes ownership in due course, and this presumption is indulged until overcome by proof sup- ported by proper plea." See also Eoy v. Duff, 152 N. W. Rep. (Iowa) 606. But see note to section 49. Payments. — The instrument can be satisfied only by payment to the owner at the time or to such owner's authorized agent. If the recipient of the 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. Mommensen, 127 Wis. 363. The maker of a note, in order to avail himself of the defense of payment before maturity, must show that the indorsee had prior notice of the payment. Yenney v. Central City Bank, 44 Neb. 402. But where the instrument is indorsed "for collection," the payment to the indorser after the transfer is a good defense, even against a claim of prior beneficial ownership by the indorsee. Smith v. Bayer, 46 Ore. 143. § 52. What constitutes a holder in due course.— 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 RIGHTS OP HOLDER. 95 overdue, and without notice that it had been previously dishonored, if such was the fact; 3. That he took it in good faith and for value ; 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. Variant reading. — In Wisconsin the following is added ftt the end of the section: " 5. That he took it in the usual course of business." This phrase, though often used by judges and law- yers, was always obscure, and for that reason, its omission from the statute by the draftsman was approved by all the Commission- ers on Uniform Laws. Incomplete or irregular instrument. — Under this section, a bank discounting notes blank as to date, amount and maturity, is not a holder in due course. Hunter v. Allen, 127 App. Div. (N. Y.) 572. Where a note recited that it was payable in " Four ." Held, that the holder of the note was not a ' ' holder in due course ' ' for it was not complete and regular on its face. In re Philpott's Es- tate, 151 N. W. Rep. (Iowa) 825. See also Bank of Houston v. Day, 145 Mo. App. 410. So, where it was plainly apparent that the date had been changed. Elias v. Whitney, 50 Misc. (N. T.) 326. But where a note was partly printed and partly written, and the words " payable with interest " were in the same handwriting as the other written portions of the note, except the maker 's name, and were not interlined, but written on a blank space after the words " Value received," it was held that the note was to be regarded as complete and regular on its face. American Bank v. McComb, 105 Va. 473. To determine the character of an indorsee as a bona fide holder for value without notice, the point of time at which he parts with his money is the important fact. If the paper was then on its face irregular — out of the usual course of business — the effect of that knowledge on the indorsee could not be pre- vented by subsequently putting it in a regular shape. Losee v. Bissell, 76 Pa. St. 459, 462. As to incomplete instruments, and the authority to fill up blanks therein, see section 14. Post-dated instruments. — The fact that the instrument is post- dated affords no cause of suspicion so as to put the transferee on inquiry. Brewster v. McCardel, 8 Wend. 478. 96 THE NEGOTIABLE INSTRUMENTS LAW. Payee as holder in due course. — At common law the payee may be a holder in due course. See Watson v. Russell, 3 B. & S. 34; 5 B. & S. 968; Nelson v. Cowing, 6 Hill, 333, 339. Thus, the holder of a draft drawn by a bank on its correspondent may be deemed a holder in due course, though he is named therein as payee. Armstrong v. American Exchange National Bank, 133 U. S. 433. Whether the statute has changed this rule, the courts are not agreed. In New York, Massachusetts and Alabama it has been held that there is nothing in the statute which precludes the payee from being such a holder. Brown v. Brown, 91 Misc. (N. Y.) 220; Liberty Trust Co. v. Tilton, 217 Mass. 462; Boston Steel & Iron Co. v. Steuer, 183 Mass. 140; Ex parte Goldberg, 67 So. Eep. (Ala.) 839, 843. See also Wilbour v. Hawkins, 94 Atl. (R. I.) 856. But in Iowa and Missouri the courts have held that the delivery of the paper to the payee is not a " negotiation " thereof, and hence not within the terms of this section. Vander Ploeg v. Van Zuuk, 135 Iowa, 350; Long v. Shafer, 185 Mo. App. 641, 648; St. Charles Sav. Bank v. Edwards, 243 Mo. 553. See note to section 14. Overdue paper. — Where commercial paper is acquired after it is overdue, it becomes under this section, and section 58, subject to the same defenses as if it were non-negotiable. Jacobus v. James- town Mantel Co., 149 App. Div. (N. Y.) 356; Austen v. First Nat. Bank, 150 Ky. 113; Fairfield Nat. Bank v. Hammer, 95 Atl. Rep. (Conn.) 31. And this was the rule at common law. McKim v. King, 58 Md. 502; Marsh v. Marshall, 53 Pa. St. 396; Davis v. Miller, 14 Gratt. 1; Cottrell v. Watkins, 89 Va. 801. At one time it was doubted whether the mere fact that a negotiable note was overdue at the time of the transfer was in itself suf- ficient to affect the title of the holder, and whether it was not necessary that there should be something on the face of the paper besides the day of payment to show that it had been actually dis- honored. This doubt was expressed by Lord Kenyon in Brown v. Davies, 3 T. R. 80, decided in 1789; but Ashurst and Buller, J., were of opinion that the mere fact of its being overdue at the time of the transfer was sufficient to affect the title, and that one taking a note under such circumstances takes it upon the credit of the transferrer. Subsequently in Boehm v. Sterling, 7 T. R. 423-430, Lord Kenyon gave his assent to the rule thus laid down, and it has never since been questioned. But see Trego v. Cunning- ham's Estate, 267 111. 448. BIGHTS OF HOLDER. 97 Where interest ia overdue. — A promissory note matures when, by its terms, the principal becomes due; and one who pur- chases it in good faith, for value, before maturity, is within the protection of the law merchant, although interest is overdue at the time of such purchase. Kelley v. Whitney, 45 Wis. 110. But the fact that interest is due and unpaid is a material circumstance bearing on the question of whether the purchaser acquired the note in good faith and without notice of prior equities or infirmities in the title. McPherrin v. Little, 36 Oklahoma, 510. See also Hart v. Stickney, 41 Wis. 630 ; Newell v. Gregg, 51 Barb. 253. Where installment overdue. — A note payable by installments ia overdue when the first installment is overdue and unpaid, and one who takes it afterward takes it subject to all equities between the original parties. Vinton v. King, 4 Allen, 562. When paper deemed overdue. — A transfer upon the day of ma- turity is before the instrument is overdue ; for the principal debtor has the whole of that day in which to pay. Continental Nat. Bank v. Townsend, 87 N. Y. 8. But see Sargent v. Southgate, 5 Pick. 312; Ayer v. Hutchins, 4 Mass, 370; Pine v. Smith, 11 Gray, 38. A check deposited with a bank on the day of its date can not be con- sidered as overdue when so deposited. Shawmut National Bank v. Manson, 168 Mass. 425. A check dated in a suburb of New York city, June 1, 1900, was sent in the course cf business to the state of Kansas, where it arrived on June 8, 1900, and was pur- chased by a Kansas bank in good faith and for value. — Held that the check was not overdue to such an extent as to put the bank upon inquiry or raise any presumption that it knew of any defense existing between the original parties. Citizens' State Bank v. Cowles, 89 App. Div. (N. Y.) 281, reversed on other grounds in 180 N. Y. 340. Payment of value—Discount by bank. — Under this section, it ia not sufficient to constitute a bank a holder in due course that it has discounted the paper and placed the proceeds to the credit of its customer. Albany County Bank v. People's lee Co., 92 App. Div. (N. Y.) 47; Consolidation Nat. Bank v. Kirkland, 99 Id. 121; Merchants Bank v. Santa Maria Sugar Co., 162 Id. 248 ; Milled v. Morton, 114 Va. 610; City Deposit Bank v. Green, 130 Iowa, 384 j McKnight v. Parsons, 136 Iowa, 390; Elgin City Banking Co. V. 1 98 THE NEGOTIABLE INSTRUMENTS LAV,". Hall, 119 Tenn. 548; Tatum v. Commercial Bank, 185 Ala. 294 And merely crediting to a depositor's account the amount of a check drawn upon another bank, where the account continues to be sufficient to pay the check in case it is dishonored, does not make the bank a holder of the check in due course within this section. Citizens' State Bank v. Cowles, 180 N. Y. 346. So, where the credit given by the bank is only provisional, Commer- cial Nat. Bank v. Citizens' State Bank, 132 Iowa 706, 708; Peoples State Bank v. Miller, 152 N. W. Rep. (Mich.) 257, or the paper is received for collection only. Bank of America v. Waydell, 187 N. Y. 115. But where the sum deposited has subsequently been checked out, the bank becomes a holder for value, although the customer by subsequent deposits has maintained a balance in excess of the amount of the note ; for in such case the rule obtains that where a payment is made upon general account, with no direc- tion as to its application, the law applies it to the oldest items; that is, the first debits are to be charged against the first credits. Merchants Bank v. Santa Maria Sugar Co., 162 App. Div. (N. Y.) 248, 249. See also Northfield Nat. Bank v. Arndt, 132 Wis. 383. And if the bank incurs a liability by reason of the deposit, as where it obligates itself to honor a cheek, it is a holder for value. Montrose Savings Bank v. Claussen, 137 Iowa, 73; Nat. Bank of Commerce v. Armbruster, 42 Okl. 656 ; Elmore Co. Bank v. A vaunt, 66 So. Rep. (Ala.) 509. So, if the depositor was indebted to the bank, and the proceeds of the discount are applied to the payment of this indebtedness. City Deposit Bank v. Green, 130 Iowa, 384; Wallabout Bank v. Peyton, 123 App. Div. (N. Y.) 727; Mechanics Bank v. Chardavoyne, 69 N. J. L. 256. Or the bank discounting the paper obtains credit for its customer with another bank for the amount of the proceeds. Elgin City Banking Co. v. Hall, 119 Tcnn. 548. But where the avails of a discount are applied to aD existing indebtedness, the bank must show that there was an agree- ment that they should be applied in payment and extinguishment thereof. Consolidation Nat. Bank v. Kirkland, 99 App. Div. (N. Y.) 121. If a bank purchases a note prior to its maturity, and the seller neglects to draw out the proceeds credited to him, the bank, in the absence of notice, would have the right to pay out such pro- ceeds to che seller even after maturity of the note, and this being done in good faith and without notice of defects, would constitute the bank a holder in due course. National Bank of Commerce v. Armbruster, 42 Okla. 656, 661. Where a bank pays for a draft RIGHTS OF HOLDER. 99 with bill of lading attached, by giving credit to the checking ac- count of the drawer, its position after acceptance by the drawee is that of a holder in due course, whether or not the drawer had checks against the deposit at the time of the drawee's acceptance. Tapee v. Varley, 184 Mo. App. 470. Bills negotiated before acceptance. — Where one becomes a holder for value of a bill before acceptance he is deemed a holder in due course as against a subsequent acceptor without any new consideration proceeding from him to the drawee. Nat. Park Bank v. Saitta, 127 App. Div. (N. Y.) 624; Mt. Vernon Nat. Bank v. Kelling-Karel Co., 189 111. App. 375. Notice before presentment of check given in payment. — Where the purchaser of a negotiable instrument gives his check in pay- ment in good faith he will be deemed a holder in due course, though he learns of some infirmity in the paper before the check is actu- ally paid by the bank. Miller v. Marks, 148 Pac. Rep. (Utah) 412. Paper payable in the alternative.— Where a promissory note payable to the order of A or B is indorsed by A only to one who takes it in good faith for value and without any notice of infirmity in the instrument or defect in the title, the indorsee is a holder in due course under this section. Voris v. Schoonover, 91 Kas. 530. Gift of Instrument. — The gift of a neogtiable instrument will not make the donee a holder in due course. Greer v. Orchard, 175 Mo. App. 494. Accommodation Paper. — If one purchases an accommodation note for cash, and sells it to a "bona fide purchaser in exchange for the purchaser's note, the latter may be a holder in due course within the meaning of the statute. Mehlinger v. Harriman, 185 Mass. 245. Where the payee gives a written direction at the foot of the note, " credit the drawer," and the note is afterward dis- counted by a bank, or found in the possession of any person not a party to the original transaction, the presumption is that the holder is a holder for value, and that the drawer received the pro- ceeds according to the directions so given. Steckel v. Steckel, 28 Pa. St. 233, 235. As to what will constitute value, see section 25. Prima facie value is presumed. Section 24. Notice. — As to what is necessary to constitute notice, see sec- tion 56. 100 THE NEGOTIABLE INSTRUMENTS LAW. § 53. Instrument payable on demand — negotiation at unreasonable time. — 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. What is a reasonable time. — Under this section it has been held that a check issued on a certain date, and bearing that date and negotiated at noon of the following day, was not overdue so as to carry to an indorsee notice of its illegality or previous dishonor. Matlock v. Scheuerman, 51 Ore. 49. So, of a check drawn on Saturday and negotiated on the following Monday. Asbury v. Laube, 151 Ky. 142. So, a cashier's check issued May 18th, and indorsed five daj's later, was held to have been negotiated within a reasonable time. Singer Manufacturing Co. v. Summers, 143 N. C. 102. But a note payable on demand purchased more than a year after its date was held to have been overdue. McAdam v. Grand Forks Mercantile Co., 24 N. D. 645. As to what is reasonable time will depend upon the facts of the particular case. See page 7. No absolute measure can be fixed. A day or two, Field v. Nicker- son, 13 Mass. 131, 137; seven days, Thurston v. McKenn, 6 Mass. 428, and even a month, Ranger v. Cory, 1 Mete. 369, is not too long, while eight months, American Bank v. Jennes, 2 Mete. 288; Ayres v. Hutchins, 4 Mass. 370; Nevins v. Townsend, 6 Conn. 7; three months and a half, Stevens v. Brice, 21 Pick. 193; and even two months and a half, Losoe v. Durkin, 7 Johns. 70; Sice v. Cunning- ham, 1 Cowen, 397, 404, have been deemed sufficient to discredit a note. See note to sec. 71. Coupons — Coupons payable to bearer are, when overdue, sub- ject to equities; they are not in this respect like bank notes. McKim v. King, 58 Md. 502. § 54. Notice before full amount paid. — Where the transferee receives notice of any infirmity in the instru- ment 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 extent of the amount theretofore paid by him. '5?/ mi N- 11 RIGHTS OF HOLDER. 101 Common Law Rule — Reason of. — This section is merely declara- tory of the law as it existed before the enactment of the statute. Albany County Bank v. People's Ice Co., 92 App. Div. (N. Y.) 47. The case falls within the general rule that the portion of an un- performed contract which is completed after notice of a fraud is not within the principle which protects a bona fide purchaser. Dreser v. Missouri, etc., R. R. Construction Co., 93 U. S. 93. § 55. When title defective. — The title of a person who negotiates an instrument is defective within the meaning of this act when he obtains the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consid- eration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud. Variant readings. — In Wisconsin the following is added at the end of the section: " and the title of such person is absolutely void when such instrument or signature was so procured from a person who did not know the nature of the instrument and could not have obtained such knowledge by the use of ordinary care." Renewal Notes — Usury. — Under this section the title of a per- son negotiating a note is defective where the only consideration was usury on a former note between the same parties. Keene v. Behan, 40 Wash. 505. Paper obtained by misrepresentation. — Where brokers employed to purchase stock represented that they had acquired the stock, and received a check, though they had not in fact done so, their title was defective within the meaning of this section. People's State Bank v. Miller, 152 N. W. Rep. (Mich.) 527. Where fraud does not affect party. — The fraud in putting the paper into circulation must be a fraud against the defendant. Kinney v. Kruse, 28 Wis. 189. Thus, the fact that one who held possession of a note for the payee put it in circulation in fraud of his rights is no defense in a suit by the holder against the maker. Id. And where the fraud consists in the misapplication of the proceeds received for the paper it will not affect the paper in the hands of the holder, as he is not in any manner bound to look to 102 THE NEGOTIABLE INSTRUMENTS LAW. their application, nor responsible for the misappropriation of them. Gray's Admr. v. Bank of Kentucky, 29 Pa. St. 365. There is no distinction between obtaining a note by fraud and fraudu- lently putting it in circulation. National Reserve Bank v. Morse, 163 Mass. 381, 385. Where only part of signatures are obtained by fraud. — Under this section where a note is made by several persons, and the signatures of some of the makers are obtained by fraud, the paper is voidable by all the others, though they were not themselves deceived; for 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 payment, and if, through the fraud of the payee, such equality of burden is disturbed, and the burden increased as to some of the persons signing the paper, such fraud renders the title defective as to all. Schmidt v. Bank of Commerce, 234 U. S. 64; Hodge v. Smith, 130 Wis. 326; Aukland v. Arnold, 131 Wis. 64. § 56. What constitutes notice of defect. — To consti- tute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the per- son 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. Rule at common law. — The rule adopted in the statute is that which was established by the great weight of authority. In num- erous well-considered cases it was held that the holder is not bound at his peril to be on the alert for circumstances which might possibly excite the suspicion of wary vigilance; he does not owe to the party who put the paper afloat the duty of active inquiry in order to avert the imputation of bad faith. The rights of the holder are to be determined by the simple test of honesty and good faith, and not by a speculative issue as to Kis diligence or negligence. The holder's right cannot be defeated without proof of actual notice of the defect in title, or bad faith on his part evidenced by circumstances. Though he may have been negligent in taking the paper, and omitted precautions which a prudent man would havo RIGHTS OF HOLDER. 103 taken, nevertheless, unless he acted mala fide, his title, according to settled doctrines, will prevail. Valley Savings Bank v. Mercer, 97 Md. 458, 479; Cheever v. Pittsburgh, Shenango & Lake Erie R. R. Co., 150 N. Y. 59, 65; American Exchange National Bank v. New York Belting, etc., Co., 148 N. Y. 705; Knox v. Eden Musee Am. Co., 148 N. Y. 454; Canajoharie National Bank v. Diefendorf, 123 N. Y. 202; Vosburgh v. Diefendorf, 119 N. Y. 357; Jarvis v. Manhattan Beach Co., 148 N. Y. 652; Murray v. Lardner, 2 Wall. 110; Swift v. Smith, 102 U. S. 442; Belmont v. Hoge, 35 N. Y. 65; Welsh v. Sage, 47 N. Y. 143; Nat. Bank of Republic v. Young, 41 N. J. Eq. 531; Fifth Ward Sav. Bank v. First Nat. Bank, 48 N. J. Law. 513; Credit Company v. Howe Machine Co., 54 Conn. 357; Ladd v. Franklin, 37 Conn. 64; Croft's Appeal, 42 Conn. 154; Morton v. N. A. & Selma Ry. Co., 79 Ala. 590; Phelan v. Moss, 67 Pa. St. 59; Moorehead v. Gilmore, 77 Pa. St. 118; Second National Bank v. Morgan, 165 Pa. St. 199; Frank v. Lilienfeld, 33 Gratt. 377. Application of the section. — For cases applying this section see Interboro Brewing Co. v. Doyle, 165 App. Div. (N. Y.) 646; Coffin v. Tevis, 164 Id. 314; Wallabout Bank v. Peyton, 123 Id. 727; Ger- man-American Bank v. Cunningham, 97 Id. 244; Van Slyke v. Rooks, 181 Mich. 88; Pratt v. Rounds, 160 Ky. 358; Farmers' Bank v. First Nat. Bank, 164 Ky. 548; Moutenegro-Riehm Co. v. Illinois Trust Co., Id. 608; Davis v. Clark, 85 N. J. L. 696; Arnd v. Ayles- worth, 145 Iowa, 185 ; American Nat. Bank v. Lundy, 21 N. D. 167. Opportunity for inquiry. — As the transferee is not bound to make inquiry, the fact that the transferrer lives near him is not material. Seltzer v. Deal, 135 N. C. 428. Financial condition of maker. — The fact that the holder may have known of the maker's impecunious circumstances is not enough to put him upon inquiry; for one to whom the paper is offered has a right to rely upon an indorser's responsibility, even though he knows that the maker is in poor circumstances. Baruch v. Buckley, 167 App. Div. (N. Y.) 113. Payment of value. — The payment of value is a circumstance to be taken into account, with other facts, in determining the good faith of the purchaser, but it is not conclusive. Cunningham v. Scott, 90 Hun, 410, 411; Tisehler v. Schurman, 49 Misc. (N. Y.) 257. 1U4 THE NEGOTIABLE INSTRUMENTS LAW. Purchasing paper at a discount. — Under this section the mere fact that the holder has taken the paper at a large discount is not sufficient, standing alone, to deprive him of his claim to be a holder in due course. Ham v. Merritt, 150 Ky. 11; Wells v. Duffy, 69 Wash. 310; McNamara v. Jose, 28 Wash. 4G1. But where the dis- count is very large, that circumstance may be considered in con- nection with other facts in determining the question of the pur- chaser's good faith. Williams v. Huntington, 68 Md. 590; Sabine v. Paine, 166 App. Div. (N. Y.) 10; Harris v. Johnson, 89 Conn. 128. Rate of interest. — A bank is not chargeable with bad faith be- cause it discounted notes at seven per cent, per annum when the legal rate of interest is but six per cent. Bank of Monongahela Valley v. Weston, 172 N. Y. 259. Purchase of check by bank. — The fact that a bank purchases a check, instead of receiving it on deposit for collection, is not such a deviation from the usual course of business as will justify a conclusion of bad faith on its part. Citizens State Bank v. Cowles, 89 App. Div. (N. Y.) 281. Statement of consideration. — The fact that the nature of the consideration is stated upon the face of the paper is not notice of any defect of title. Bank of Sampson v. Hatcher, 151 N. C. 359. Paper made by corporation. — Where a corporation is authorized to execute notes, a negotiable note executed and issued by it for an ultra vires purpose is not void in the hands of an innocent purchaser for value before maturity, even though the purpose for which the note was executed was in violation of the public policy of the state. Jefferson Bank v. Chapman, 122 Tenn. 415, 416. Paper indorsed to corporation. — The provisions of this section apply to all classes of persons, artificial as well as natural. Cox & Sons Co. v. Northampton Brewing Co. 245 Pa. St. 418. Paper of corporation received from officer. — One who receives the notes of a corporation from one of its officers in payment of, or as security for, a personal debt of such officer does so at his peril. Prima facie the act is unlawful, and unless actually au- thorized, the purchaser will be deemed to have taken them with EIGHTS OF HOLDER. 105 notice of the rights of the corporation. Wilson v. Metropolitan Ry. Co., 120 N. Y. 145, 150. And where the maker of a note, which is payable to his order, and purports to be indorsed by a corporation, procures it to be discounted for his own benefit, this of itself, if unexplained, is notice that the indorsement is not made in the usual course of business, but is for the accommodation of the maker. National Park Bank v. German-American Mutual Warehousing and Security Company, 116 N. Y. 281. But the mere fact that the payee of a promissory note, made by a corpora- tion, is a director of such corporation, is not notice to a transferee of any infirmity in the paper, nor is it sufficient to put him upon inquiry concerning the circumstances under which it was issued; and the rule applicable to notes made by officers of a corporation to their own order and used to pay their individual obligations, has no application to notes made by duly authorized officers pay- able to a director. Orr v. South Amboy Terra Cotta Co., 113 App. Div. (N. Y.) 103. Request to delay presentment. — The fact that the payee on transferring a check stated that the drawer had asked that it be held for a few days before presentment does not charge the holder with notice. Matlock v. Scheuerman, 51 Ore. 49. Business reputation of transferor. — The fact that the trans- feree may know that the person from whom he receives the paper is "crooked" in business matters does not affect his title or make it his duty to inquire about the paper. Setzer v. Deal, 135 N. C. 428. In the case last cited, the court said: "It would be almost impossible for the business of banking to be carried on if it was incumbent on bank officers, whenever negotiable paper was offered for discount or sale, to inquire into whether any of the parties to be charged were crooked in their business methods." Place of contract — Estoppel. — Where a married woman, for her husband's accommodation, indorsed a note dated and payable in New York, it was held that she was estopped from showing, as against a New York bank which had discounted the paper in good faith, that the indorsement had been made in New Jersey, where her contract was void. Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 96. Conflicting instructions. — For a case where a judgment was re- versed because the trial judge coupled with the rule of the statute 106 THE NEGOTIABLE INSTRUMENTS LAW. a statement that the notice would be sufficient if it would put a reasonably prudent man upon inquiry. See Smathers v. Hotel Co., 162 N. C. 346. Negligence as evidence of bad faith. — By the great weight of modern authority, gross negligence is evidence from which bad faith may be inferred, but it does not of itself constitute bad faith as a matter of law. That is a question for the jury after consideration of all the evidence. Kipp v. Smith, 137 Wis. 234, 238. Weight of evidence. — Where the testimony as to the holder's guod faith is undisputed it is the duty of the court to so charge the jury. Van Slyke v. Rooks, 181 Mich. 88. As to when evi- dence is not sufficient to support a verdict against the holder, see Cole v. Harrison, 167 App. Div. (N. Y.) 336; Southwest Nat. Bank v. Baker, 23 Idaho, 428; McLaughlin v. Dopps, 84 Wash. 442; Commercial Security Co. v. Jack, 29 N. D. 67. For the rule in Massachusetts, see Phillips v. Eldridge, 221 Mass. 103. Signature obtained by duress. — Commercial paper executed un- der duress is void, even though there may be some consideration to support it. Magoon v. Reber, 76 Wis. 392. Paper received from note broker. — The mere fact that the holder for value of a promissory note made by a third party receives it from a person engaged in the note-brokerage business, as collateral security for a loan to such broker, is not sufficient to raise a doubt as to the authority of the broker to so deal with the note. Amer- ican Ex. Nat. Bank v. New York Belting and Packing Company, 148 N. Y. 698. And a bank has a right to assume, as to notes offered to it, whether for discount or as collateral security, by a customer who has an account with it, and who is in the habit of borrowing money from it, that the customer is acting in good faith and within his lawful rights; and the fact that the customer is engaged in the business of note-brokerage is not enough to deprive the bank of the right to indulge in such assumption. Id. The fraudulent misappropriation by the broker of the proceeds of dis- count is not sufficient to put the holder to the proof of his hom fides. Sloan v. The Union Banking Company, 67 Pa. St. 470. Indorsement without recourse. — As under section thirty-six a qualified indorsement, that is to say, an indorsement without re- course to the indorser, does not impair the negotiable character RIGHTS OP HOLDER. 107 of the instrument, it may not be regarded as evidence of any in- firmity in the instrument or defect in the title of the person nego- tiating the same. Leavitt v. Thurston, 38 Utah, 351; Page v. Ford, 65 Ore. 450; Bank of Sampson v. Hatcher, 151 N. C. 359. But upon the question of good faith, the fact that the indorsement was in this form may be considered in connection with the other circumstances of the case. Merchants Nat. Bank v. Vranson, 165 N. C. 344. Post-dated instrument. — The negotiation of a post-dated check before the day of its date does not put the indorsee upon notice. Triphonoff v. Sweeney, 65 Ore. 209; Albert v. Hoffman, 64 Misc. (N. Y.) 87. See section 12. § 57. Rights of holder in due course. — 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 en- force payment of the instrument for the full amount thereof against all parties liable thereon. Variant readings. — In Illinois, after the word " themselves," the following is interpolated: " except the defect and the defense specified in § 10 of an Act entitled 'An Act to revise the law in relation to promissory notes, bonds, due-bills and other instru- ments in writing,' approved March 18, 1874, in force July 1, 1874, and except the defect and defense specified in J 5 131 and 136 of an Act to revise the law in relation to criminal jurisprudence, ap- proved March 27, 1874, in force July 1, 1874, known as §§ 131 and 136 of chapter 38 of the Revised Statutes of Illinois." In Wiscon- sin the following is added at the end of the section: " except as provided in $ 5 1944 and 1945 of these statutes, relating to in- surance premiums, and also in cases where the title of the person negotiating such instrument is void under the provision of §§ 1676- 25 of this act." Stolen securities. — Under this section, a holder in due course of a promissory note or cheek payable to bearer can acquire a good title thereto from one who has stolen it. Massachusetts Nat. Bank v. Snow, 187 Mass. 160; Jefferson Bank v. Chapman, 122 Tenn. 415; Schaeffer v. Marsh, 90 Misc. (N. Y.) 307. And this rule 108 THE NEGOTIABLE INSTRUMENTS LAW. applies to negotiable bonds payable to bearer. City of Adrian v. Whitney Central Bank, 180 Mich. 171, 179. But this section is to be read in connection with section 15; and if the instrument is injomplete when stolen, it is not valid in the hands of any holder. Linick v. Nutting, 140 App. Div. (N. Y.) 265; Schaeffer v. Marsh, supra. Paper made in violation of statute. — One of the most important questions that has arisen under the Act is whether a holder in due course may recover upon paper void as between the immediate parties because given in violation of some statute, as, for example, where the instrument is given for a gambling debt, or is tainted with usury. A leading case upon the subject is Wirt v. Stubble- field, 17 App. Cas. D. C. 283. In that case it was held that under the Negotiable Instruments Law a hona fide holder may enforce a promissory note against the maker, even though the note was given for a gambling debt, and that this statute has repealed the stat- utes of 16 Car. 2 Ch. 7 and 9 Anne, Ch. 14, which were in force in the District of Columbia. In the course of the opinion it was said by Alvey, C. J. : " We know, moreover, that the great and leading object of the act, not only with Congress, but with the large number of the principal commercial states of the Union that have adopted it, has been to establish a uniform system of law to govern negotiable instruments wherever they might circulate or be negotiated. It was not only uniformity of rules and principles that was designed, but to embody in a codified form as fully as possible, all the law upon the subject, to avoid conflict of decisions, and the effect of mere local laws and usages that have heretofore prevailed. The great object sought to be accomplished by the enactment of the statute, was to free the negotiable instrument, as far as possible, from all latent or local infirmities that would otherwise inhere in it to the prejudice and disappointment of in- nocent holders as against all the parties to the instrument pro- fessedly bound thereby. This clearly could not be effected so long as the instrument was rendered absolutely null and void by local statute, as against the original maker or acceptor, as is the case by the operation, indeed, by the express provision, of the Statutes of Charles and Anne. Same subject — Rule in Kentucky and West Virginia. — But, on the other band, it has been held in Kentucky and West Virginia that this section applies only to paper that might have. been oblig- EIGHTS OF HOLDEB. 109 atory between the parties to it, and that hence a holder in due course cannot recover where the note is void for usury, or has been given for a gambling debt, or in violation of the statute re- specting " peddlers' notes." Alexander v. Hazelrigg, 123 Ky. 677; Lawson v. First Nat. Bank, 102 S. W. Kep. (Ky.) 324; Citizens' Bank v. Crittenden Eecord Press, 150 Ky. 634; Holzbog v. Bakrow, 156 Ky. 161; Kaleigh County Bank v. Poteet, 74 W. Va. 511; Twentieth Street Bank v. Jacobs, 74 W. Va. 528. In the case first cited, the court said: "It has been the policy of this state to suppress gambling, and the statutes making gaming contracts void were founded upon what the legis- lature has for many years deemed to be sound public policy. It is not conceivable that the general assembly, in the passage of the act of 1904 for the protection of innocent holders of negotiable instruments, intended to or did repeal section 1955, Ky. St. 1903, which declares all gaming contracts void. In our opinion, the disappointment now and then of an innocent holder of a nego- tiable instrument would not be as hurtful and injurious to the best interests of the state as the removal of the ban from gaming contracts." And in the other Kentucky case cited it was said: "The negotiable instruments statute is a most comprehensive piece of legislation. It goes into minutest detail in dealing with the subjects embraced by it. The whole scope of it is shown to be the dealing with commercial paper, so as to protect inno- cent purchasers of such against mere defenses available as be- tween the original parties. It gives such paper currency, free from original defenses. But it applies only to paper that might have been obligatory between the parties. But, where the parties were never bound because the law made the note void, as con- trary to public policy as expressed in the statutes, the negotiable instruments act does not apply, and ought not to. The preven- tion of crime is of more importance than the fostering of com- merce. The later act should be read in view of its purpose, and not as intending to repeal other statutes passed in the exercise of the police power of the state to suppress crime and fraud." Compare Kushner v. Abbott, 156 Iowa, 598; American Savings Bank v. Helgersen, 64 Wash. 54; Gray v. Boyle, 55 Id. 598. Same subject — Rule in New York. — In New York there has been no decision upon the point by the Court of Appeals, and the de- cisions of the lower courts are conflicting. In the late case of 110 THE NEGOTIABLE INSTRUMENTS LAW. Sabine v. Paine, 166 App. Div. 9, the Appellate Division for the Second Department held that, notwithstanding the provision of sec don 96 of the Negotiable Instruments Law, the rule still obtains that a negotiable instrument which is void in its inception be- cause of usury is invalid as against the maker even in the hands of a holder in due course. See also Strickland v. Henry, 66 App. Div. 23; Oppikofer v. Murphy, 146 App. Div. 581. But the con- trary has been held by the Appellate Term for the First Depart- ment. Klar v. Kostiuk, 65 Misc. 199; Emanuel v. Misicki, 149 N. Y. Supp. 905; Oeser v. Behrend, 89 Misc. 391. In the ease last cited Shearn, J., said: "I do not argee that this decision prac- tically writes the inhibition against usury from the statutes, but rather with Mr. Justice Laughlin, in Schlesinger v. Kelly, 114 App. Div. 546, where he said : ' The usury laws remain in full force, but to facilitate the free circulation of negotiable paper by pro- tecting holders thereof in due course for value in their right to enforce the same, the usury laws are to that extent superseded by the provisions of section 96 of the Negotiable Instrument Law.' And in Schlesinger v. Lehmaier (191 N. Y. 69) the Court of Ap- peals held that the provisions of the State Banking Law on the subject of usury are to be construed in connection with section 96 of the Negotiable Instruments Law, and that a bank which had purchased paper infected with usury, could not recover on the same without showing that it became a holder in due course. The court said: "It pertains to negotiable instruments, and should be construed in connection with the other legislation upon the same subject. In the Negotiable Instruments Law it is espressly provided that a holder, who becomes such before maturity in good faith and for value without notice of any infirmity, holds the same 'free from any defect of title of prior parties and free from de- fenses available to prior parties among themselves, and may en- force the payment of the instrument for the full amount thereof against all parties liable thereon.' Here we have the legislative intent expressed in clear and unmistakable language. It estab- lishes a just and proper rule, which protects the bank in making purchases of commercial paper in good faith before maturity, for value and without notice of infirmity. But where it purchases with actual knowledge of the infirmity or defect or knowledge of such facts that its action in taking the instrument amounted to bad faith, it is not protected." See also Schlesinger v. Gilhooly, EIGHTS OF HOLDER. Ill 189 N. Y. 1, 34; Schelsinger v. Kelly, 114 App. Div. (N. Y.) 546, 552-555; Broadway Trust Co. v. Manheimer, 47 Misc. (N. Y.) 465. Reason for conflicting opinions. — The subject is one, perhaps, upon which the courts will never agree ; for they will construe the section with reference to the policy of their respective states. In some states, the requirements of commerce will be the controlling consideration; in others, the protection of the weak and the ignor- ant. The modern view is admirably expressed in Chemical Nat. Bank v. Kellogg (183 N. Y. 92), where it was said by Vann, J.: "The business of the country is done so largely by means of com- mercial paper that the interests of commerce require that a prom- issory note, fair on its face, should be as negotiable as a govern- ment bond. Every restriction upon the circulation of negotiable paper is an injury to the state, for it tends to derange trade and hinder the transaction of business." And it is plain that if a negotiable instrument is to be void in the hands of a holder in due course, because it was given for a usurious loan, or for a gambling debt, or to a "peddler," or for the price of a stallion, or for a lightning rod, not merely that instrument alone is affected, but a doubt is cast upon all commercial paper originat- ing in that community. For other cases applying local statutes, see Quiggle v. Herman, 131 Wis. 379 (note given for a stallion), Arndt v. Sjoblom, 131 Wis. 642 (note given for lightning-rods), National Bank of Commerce v. Pick, 13 N. D. 74 (note given to foreign corporation having no state license), Sullivan v. German Nat. Bank, 18 Colo. App. 99 (certificate of deposit transferred for gambling debt), Gordon v. Levine, 194 Mass. 418 (note made ou Sunday). Drunkenness as a defense. — In Wisconsin this section has been so changed that a holder in due course takes no title where the note was absolutely void in its inception because of the intoxica- tion of the maker, destroying the rational faculties of the mind. Green v. Gunsten, 154 Wis. 69. Defense of usury by indorser.— Under the statute an indorser cannot, as against a holder in due course, set up the defense that the instrument is void for usury in its inception ; for the obligation of the indorser is a separate and independent contract. Horowitz V. Wollowitz, 59 Miss. (N. Y.) 520. 112 THE NEGOTIABLE INSTRUMENTS LAW. Amount of recovery. — The rule adopted in the statute is that of the Supreme Court of the United States. Cromwell v. County of Sae, 96 U. S. 51, 60. There was considerable conflict in the deci- sions of the State courts. In the case cited the Supreme Court said : "We are of opinion that a purchaser of a negotiable security be- fore maturity, in cases where he is not personally chargeable with fraud, is entitled to recover its full amount against its maker, though he may have paid less than its par value, whatever may have been its original infirmity. We are aware of numerous de- cisions in conflict with this view of the law; but we think the sounder rule, and the one in consonance with the common under- standing and usage of commerce, is that the purchaser, at what- ever price, takes the benefit of the entire obligation of the maker. Public securities and those of private corporations are constantly fluctuating in price in the market, one day being above par and the next below it, and often passing within short periods from one-half of their nominal to their full value. Indeed, all sales of such securities are made with reference to prices current in the market, and not with reference to their par value. It would in- troduce, therefore, inconceivable confusion if bona fide purchasers in the market were restricted in their claims upon such securities to the sums they had paid for them. This rule in no respect im- pinges upon the doctrine that one who makes a loan upon such paper, or takes it as collateral security for a precedent debt, may be limited in his recovery to the amount advanced or secured." See also Birrell v. Dickerson, 64 Conn. 61; Rowland v. Fowler, 47 Conn. 349; Williams v. Huntington, 68 Md. 590; Moore v. Baird, 30 Pa. 136. The statute changes the rule in New York. Harger v. Wilson, 63 Barb. 237; Huff v. Wagner, 63 Barb. 230; Todd v. Shelbourne, 8 Hun, 512. See also Holcomb v. Wyckoff, 35 N. J. Law 38; Bramhall v. Atlantic National Bank, 36 N. J. Law 243; Oppenheimer v. Farmers' and Mechanics' Bank, 97 Tenn. 19. Under this section, a bona fide purchaser of a note and mortgage, is not limited to a recovery of the amount paid therefor, but is entitled to enforce the same for the full amount due thereon, even though the execution of the note was induced by fraud, and it was bought at a heavy discount. Lassas v. McCarty, 47 Ore. 474; Mc- Namara v. Jose, 28 Wash. 461. Or though the note was without consideration and invalid as between the maker and the payee. Jefferson Bank v. Chapman, 122 Tenn. 416. As to amount of re- covery where the instrument is taken as collateral security, see BIGHTS OF HOLDEB. 113 section 27. For cases where the purchaser has paid only part of the amount agreed to be paid before receiving notice, see section 54. Bight of election as to parties to sue. — Though the statute confers upon the holder the right to enforce payment against all the parties liable upon the instrument, he has a right of election as to whom he will sue, and the party sued cannot complain that other parties equally liable are not sued. Chateau Trust & Banking Co. v. Smith, 133 Ky. 418; Curtis v. Davidson, 215 N. Y. 395. § 58. When subject to original defenses. — 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. 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. Variant readings. — In Illinois and Wisconsin the word "duress" is interpolated after the word " fraud " in the second sentence. In Alabama, the words " has all the rights of such latter " are substituted for all after the word " instrument " in the second sentence. In North Dakota the word " holder " is substituted for " latter " at the end of the section. In Illinois and Wiscon- sin, the words " such holder " are substituted for " latter." Evidence contradicting writing. — Under this section a party can- not interpose a defense which denies the tenor of the note or bill. Bradley Engineering Co. v. Heyburn, 56 Wash. 628. What defenses may be interposed. — It was not deemed expedient to make provision as to what equities the transferee will be sub- ject to; for the matter may be affected by the statutes of the vari- ous states relating to set-off and counter-claim. In an act designed to be uniform in the various states, no more could be done than fix the rights of holders in due course. On the question whether only such equities may be asserted as attach to the paper, or whether equities arising out of collateral matters may also be asserted, the decisions are conflicting. In England it was decided in Burroughs v. Moss, 8 114 THE NEGOTIABLE INSTRUMENTS LAW. 10 E*rn. & Cress. 558, that the indorsee of an overdue bill is liable to such equities only as attach on the bill or note itself, and not to claims arising out of collateral matters, such as a general set-off is. This is a leading case, and has since been uniformly followed in that country. Stein v. Tglesias, 1 Crom. Mees. & Eos. 565; Whitehead v. Walker, 10 Mees. & Welsb. 696. See also Hughes v. Large, 2 Pa. St. 103; Long v. Rhawn, 75 Pa. St. 128; Young v. Shriner, 80 Pa. St. 463 ; Davis v. Miller, 14 Gratt. 1 ; Kilcrease v. White, 6 Fla. 45; Cumberland Bank v. Haun, 3 Harrison, 223; Chandler v. Drew, 6 N. H. 469; Robertson v. Breedlone, 7 Porter, 541; Tuscumbia, etc., R. R. Co. v. Rhodes, 8 Ala. 206-224; Robin- son v. Lymon, 10 Conn. 31; Steadman v. Jilman, Id. 56; Adair v. Lenox, 15 Oregon, 489. Under the statute the defenses available against the holder are only such as exist ft the time of the as- sigment. Marling v. FitzGerald, 138 Wis. 93. Thus, a person to whom the instrument is transferred as a gift takes it subject to all equities then existing between the original parties, but not subject to those which arise thereafter. First Nat. Bank of Champlain v. Wood, 128 N. Y. 35; Baxter v. Little, 6 Met. 7. For a case applying this section, see Craig v. Palo Alto Stock Farm, 16 Idaho, 701. Person claiming under holder in due course. — Whenever nego- tiable paper has passed into the hands of a party unaffected by previous infirmities its character as an available security is estab- lished, and its holder can transfer it to others with the like immun- ity. Cover v. Myers, 75 Md. 406; Black v. First National Bank of Westminster, 96 Md. 399. The principle is, that the promise being good to the prior indorsee or holder, free from objection on the ground of fraudulent or illegal consideration, he has the power of transferring it to others, with the same immunity, as an incident to the legal right which he had acquired in the instrument. Kinney v. Kruse, 28 Wis. 183, 190-191. See also Boyd v. McCann, 10 Md. 118. Thus, if A gives to B his note, and C becomes the holder thereof in due course, any subsequent holder could stand on C's title and enforce the note against A, though before taking the same he had notice of a defense which A had to the note as against B. But if, in the case supposed, the note should be indorsed by C to D, and by the latter to E, and by him to F, under circumstances which would give D a defense as a party thereto, then if F had notice of the equities of both A and D he could enforce the note against A, EIGHTS OF HOLDEE. 115 but not against D. For cases applying this provision of the section, see McMurray v. McMurray, 258 Mo. 405, 417; Horan v. Mason, 141 App. Div. (N. T.) 89. § 59. Presumption — burden of proof — exception. — 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 defec- tive, the burden is on the holder to prove that he Or some person under whom he claims acquired the title as a holder in due course. 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 de- fective title. Common-law rule. — The rule adopted in the statute is the one which prevailed in New York and many other states. Oanajoharie National Bank v. Dief endorf, 123 N. Y. 191 ; Joy v. Diefendorf, 130 N. Y. 6; Jordan v. Grover, 99 Cal. 194; Market and Fulton Nat Bank v. Sargent, 85 Me. 349; Haines v. Merrill, 56 N. J. Law, 312 ; Sullivan v. Langley, 120 Mass. 437 ; Merchants' National Bank v. Haverhill Iron Works, 159 Mass. 158; Oonant v. Johnston, 165 Mass. 450, 452; National Eevere Bank v. Morse, 163 Mass. 381, 385; Williams v. Huntington, 68 Md. 590; Griffith v. Shipley, 74 Md. 591; Ellicott v. Martin, 6 Md. 509; Hutchinson v. Boggs & Kirk, 28 Pa. St. 294; Wilson v. Lazier, 11 Gratt. 477; Vathir v. Zane, 6 Gratt. 246. The rule which obtained in the Federal Courts imposed upon the defendant the burden of proving bad faith. First Nat. Bank v. Moore, 148 Fed. Eep. 953, 957; Murray v. Lardner, 2 Wall. 110; Hotchkiss v. National Bank, 21 Wall. 354; Collins v. Gilbert, 94 U. S. 753 ; King v. Doane, 139 U. S. 166. Burden of proof. — Under this section it is not necessary for the holder to offer in the first instance any proof that he is a holder in due course. Kerr v. Anderson, 16 N. D. 36; Bruce v. Citizens' Bank, 185 Ala. 221. But when it is shown that the title of a prior holder was defective the burden shifts to the plaintiff. Interboro Brewing Co. v. Doyle, 165 App. Div. (N. Y.) 646; Peterson v. Fowler, 162 Id. 21; Eisenberg v. Lefkowitz, 142 Id. 570; German- American Bank v. Cunningham, 97 Id. 244; Mitchell v Baldwin, 116 THE NEGOTIABLE INSTRUMENTS LAW. 88 Id. 265, 269; Waxberg v. Stappler, 83 Misc. (N. T.) 78; Jus- tice v. Stoneciper, 267 111. 448; Arnd v. Aylesworth, 145 Iowa, 185; McKnight v. Parsons, 136 Iowa, 390; Ireland v. Shore, 91 Kans. 326; Campbell v. Fourth Nat. Bank, 137 Ky. 555; Callahan v. Louisville Dry Goods Co., 140 Ky. 714; Asbury v. Taube, 151 Ky. 142; Muir v. Edelen, 156 Ky. 212; Lewiston Trust & S. D. Co. v. Shackford, 213 Mass. 432; Regester's Sons Co. v. Reed, 185 Mass. 226, 227; Phillips v. Eldridge, 221 Mass. 103; Harris v. Johnson, 89 Conn. 128; People's State Bank v. Miller, 152 N. W. Rep. (Mich.) 257; Hill v. Dillon, 176 Mo. App. 192, 198; Ostenberg v. Kanka, 95 Neb. 314, 316; Piper v. Neylon, 88 Neb. 253; Fidelity Trust Co. v. Ellen, 163 N. C. 45; American Nat. Bank v. Fountain, 148 N. C. 590; Fidelity Trust Co. v. White- head, 165 N. C. 74; Singer Mfg. Co. v. Summers, 143 N. C. 102; Standard Trust Co. v. Commercial Nat. Bank, 167 N. C. 260; Schulthers v. Sellers, 223 Pa. St. 516; Second Nat. Bank v. Hoff- man, 229 Pa. St. 429; Cook v. Am. Tubing & Webbing Co., 28 R. I. 41; Leavitt v. Thurston, 38 Utah, 351; Keene v. Behan, 40 Wash. 505; Hodge v. Smith, 130 Wis. 326; Grebe v. Swords, 28 N. D. 330; Stotts v. Fairfield, 163 Iowa, 726; City of Adrian v. Whitney Central Nat. Bank, 180 Mich. 171. And the statute re- quires the holder to show affirmatively the facts constituting good faith on his part. Keene v. Behan, 40 Wash. 505. See also other cases cited above. And where the plaintiff seeks to establish this by his own testimony, the credibility of such testimony, though it is undisputed, is for the jury. Joy v. Diefendorf, 130 N. Y. 6. Inference as to good or bad faith. — Where an inference may be drawn from the surrounding circumstances that on the one hand tends to discredit plaintiff's testimony as to his lack of knowledge concerning the infirmity in the paper and his good faith in taking it, and on the other hand tends to establish his good faith, the question is for the jury. Matlock v. Scheuerman, 51 Ore. 49; Mc- Knight v. Parsons, 136 Iowa, 390; M. Groh's Son's Co. v. Sch- neider, 34 Misc. (N. Y.) 195. In Massachusetts, the rule is well settled that when testimony warranting a finding that the plain- tiff was a holder in due course of a note originating in fraud is given by witnesses called by the plaintiff, a verdict cannot be directed for the plaintiff as a matter of law. Phillips v. Eldridge, 221 Mass. 103. BIGHTS OF HOLDEB. 117 Testimony as to good faith. — The holder may testify that he acted in good faith. Smathers v. Taxaway Hotel Co., 167 N. C. 474. Presumption when paper is stolen. — Where negotiable securities have been stolen and negotiated, the burden is upon the holder to show that he is himself a holder in due course, or that he claims under such a holder; and there is no presumption that the thief negotiated the securities before they became due. Northampton Nat. Bank v. Kidder, 106 N. Y. 221; Hinckley v. Merchants' Nat Bank, 131 Mass. 147. Where payee is described as trustee. — That the payee is de- scribed as " trustee " does not let in defenses against a bona fide holder for value. Bank v. Looney, 99 Tenn. 278. Instruction limiting proof. — Under this section an instruction that the burden is on the holder to show " that some person under whom he claims acquired the title in good faith," is erroneous. Hawkins v. Young, 127 Iowa, 281. Failure of consideration. — The provision of this section which imposes upon the holder the burden of proof does not apply where the defense is failure of consideration, since section fifty-five, which defines a defective title, does not include such a case. Bank of Polk v. Wood, 189 Mo. App. 62, 67; Broderick & Bascom Rope Co. v. McGrath, 81 Misc. (N. Y.) 199; Cole Banking Co. v. Sin- clair, 34 Utah, 454. Breach of warranty.— So, such provision does not apply where the defense is breach of warranty. Ireland v. Shore, 91 Kans. 326, 329. Where fraud is subsequent to liability. — The last sentence is necessary to qualify the general statement. If A issues his note to B, and C gets possession of it and fraudulently negotiates it to D, the fraud of C in nowise affects A, and is no defense to him when sued on the instrument by D. Thus, it has been held that the fact that one who held possession of a note for the payee puts it in circulation in fraud of his rights is no defense in a suit by the holder against the maker; nor does it change the burden of proof, so as to require the plaintiff to show in the first instance that he is a bona fide holder for value. Kinney v. Kruse, 28 Wis. 183. 118 THE NEGOTIABLE INSTEUMENTS LAW. AETICLE VI. Liability of Parties. Section 60. Liability of maker. 61. Liability of drawer. 62. Liability of acceptor. 63. When person deemed indorser. 64. Liability of irregular indorser. 65. Warranty where negotiation by delivery or qualified indorsement. 66. Liability of general indorser. 67. Liability of indorser where paper negoti- able by delivery. 68. Order in which indorsers are liable. 69. Liability of agent or broker. § 60. Liability of maker. — The maker of a negoti- able instrument by making it engages that he will pay it according to its tenor, and admits the existence of the payee and his then capacity to indorse. Where there is more than one maker. — When a promissory note is executed by two persons jointly and severally the presumption is that the debt was created for their equal benefit, and the burden of proving that one of the makers signed the note as surety for the other is upon the party alleging it. Brady v. Brady, 110 Md. 656. But a joint action cannot be maintained against all the makers, where the note on its face states that the liability of each is limited to a proportional part of the amount. National Bank of Phoenix- ville v. Buckwalter, 214 Pa. St. 289. Where note secured by collateral. — The fact that the holder had other collateral securities for the same debt more than sufficient to cover it, from which, however, the debt had not been realized, is not a ground of defense on the part of the maker. Lord v. Ocean Bank, 20 Pa. St. 384. LIABILITY OF PARTIES. 119 Where payment secured by indorser. — The fact that the in- dorser has deposited with the holder security for the payment of the note is no defense to the maker in an action by the holder. People's Nat. Bank v. Eice, 149 App. Div. (N. Y.) 18. Liability of accommodation maker. — Under the statute the maker of a promissory note is " primarily liable " thereon, though he signs only for accommodation. Vanderford v. Farmers', etc., Nat. Bank, 105 Md. 164; Kichards v. Market Exchange Bank, 81 Ohio St. 348; First State Bank v. Williams, 164 Ky. 143; Fritts v. Kirchdorfer, 136 Ky. 643; Murphy v. Panter, 62 Ore. 522; Hun- ter v. Harris, 63 Ore. 505; Cellers v. Meachem, 49 Ore. 186; Wal- stenholme v. Smith, 34 Utah, 300; Bradley Engineering, etc., Co v. Heyburn, 56 Wash. 628; First Nat. Bank v. Meyer, 152 N. W Rep. (N. D.) 657. See note to section 120. Existence of payee. — Where the name of the payee is a tradi or assumed name, and the instrument is issued for value, the maker is estopped from setting up that the instrument is payable to a fictitious payee, if by such averment the instrument would be de feated. Jones v. Home Furnishing Co., 9 App. Div. (N. Y.) 103 § 61. Liability of drawer. — The drawer by drawing the instrument 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 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. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder. Variant readings. — In Colorado and Illinois, the word " subse- quent " near the end of the first sentence is omitted. In North Carolina, through what was doubtless an error in engrossing, the word " negotiating " is substituted for " negativing," near the end of the section. In New York, through an error in engrossing, the word "and" has been substituted for "or" between the words "accepted" and "paid." 120 THE NEGOTIABLE INSTRUMENTS LAW. § 62. Liability of acceptor. — The acceptor by ac- cepting the instrument engages that he will pay it ac- cording 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. Variant readings. — In Kentucky and Missouri the word " then " in subdivision two is omitted. Drawer's signature — Rule at common law. — Ever since the deci- sion in Price v. Neal, 3 Burrows, 1354, it has been a settled rule of commercial law that the drawee is presumed to know the signatnre of the drawer ; and if he pays a bill to which the drawer 's name has been forged he is bound by the act and cannot recover the money. The law proceeds upon the theory that the drawee must know the signature of his correspondent much better than the holder can, and that, therefore, the holder may cast upon him the entire respon- sibility of determining as to the genuineness of the instrument If he fails to discover the forgery the law imputes to him negli- gence, and although he has made the payment under a mistake, and parts with his money without receiving the supposed equivalent, and although the holder has obtained the money without considera- tion, still the drawee cannot be relieved from the consequences of his neglect at the expense of the holder, and the latter may retain the money in equity and good conscience. See Bank of U. S. v. Bank of Georgia, 10 Wheat. 333; Marine Nat. Bank v. Nat. City Bank, 59 N. T. 67 ; Nat. Park Bank v. Ninth Nat. Bank, 46 N. Y. 77; Bank of St. Albans v. Mechanics' Bank, 10 Vt. 141; Commer- cial & Farmers' Nat. Bank v. First Nat. Bank, 30 Md. 11; Levy v. Bank of the United States, 4 Dallas, 234; S. C. 1 Binney, 27. Same subject — Rule under the statute. — The rule laid down in Price v. Neal (supra), has been adopted in the statute. Title Guarantee & Trust Co. v. Haven, 196 N. T. 487, 492; Nat. Bank of Rolla v. First Nat. Bank of Salem, 141 Mo. App. 71S>; Bank of Commerce v. Mechanics' Nat. Bank, 148 Mo. App. 1; Farmers' Nat. Bank of Augusta v. Farmers', etc., Bank of Maysville, 159 Ky. 141; First Nat. Bank v. Bank of Cottage Grove, 53 Ore. 388; UABILITI OF PABTIBS. 121 Cherokee Nat. Bank v. Union Trust Co., 33 Okla. 342; State Bank v. Cumberland S. & G. Co., 168 N. C. 605. Rule in Pennsylvania. — In Pennsylvania this matter is regulated by the statute of 1849, which was not repealed by the Negotiable Instruments Law. Union Nat. Bank v. Franklin Nat. Bank, 249 Pa. 375. The effect of that statute and the cases upon the sub- ject is that the mere acceptance or payment of forged paper is not of itself a bar to the recovery of the money by the party paying, nor is such party absolutely bound to discover and give notice of the forgery on the very day of payment. All that he need do in any case is to give ample notice promptly according to the circumstances and the usage of the business, and unless the position of the party receiving the money has been altered for the worse in the meantime the date of the notice is not material. Iron City Nat. Bank v. Port Pitt Nat. Bank, 159 Pa. St. 46, 52. Rule in other states. — For other cases on this subject, see People's Bank v. Franklin Bank, 88 Tenn. 299; First Nat. Bank of Danvers v. First Nat. Bank of Salem, 151 Mass. 280 ; Nat. Bank of North America v. Bangs, 160 Mass. 441; Ellis v. Insurance Com- pany, 4 Ohio St. 268; First Nat. Bank v. Kicker, 71 HI. 439; Rouvant v. San Antonio Nat. Bank, 63 Tex. 610 ; Deposit Bank of Georgetown v. Fayette Nat. Bank, 90 Ky. 10. Indorsement of payee, etc. — Acceptance admits the signature of the drawer, but is no proof or admission of the indorsement by the payee, whether the bill be payable to the drawer's own order or to the order of another person. Williams v. Drexel, 14 Md. 566. And the drawee is not presumed to know the handwriting in the body of the instrument. Continental Nat. Bank v. Tradesman's Bank, 36 App. Div. (N. Y.) 112; Gunston v. Heat and Power Co., 181 Pa. St. 327. Capacity of drawer. — Thus, if the bill is drawn by a corpora- tion, the acceptor cannot set up as a defense that it was without legal capacity to draw the bill. Halifax v. Lyle, 3 Welsby, H. & G. 446. So, if the bill is drawn by an infant, Jones v. Darch, 4 Price, 300; Taylor v. Croker, 4 Esp. 187; or a married woman, Cowton v. Wickersham, 54 Pa. St. 302. Authority to draw. — The delivery of a bill or check by one per- son to another for value implies a representation on the part of 122 THE NEGOTIABLE INSTRUMENTS LAW. the drawer that the drawee is in funds for its payment, and the subsequent acceptance of such check or bill constitutes an admis- sion of the truth of the representation, which the drawer is not allowed to retract. By such acceptance the drawee admits the truth of the representation, and having obtained a suspension of the holder's remedies against the drawer, and an extension of credit by his admission, he is not afterward at liberty to controvert the fact as against a holder in due course. Heuertematte v. Mor- ris, 101 N. Y. 63, 70. Acceptance for accommodation. — If the acceptance be for the drawer's accommodation the acceptor does not thereby become entitled to sue the drawer upon the bill; but when he has paid the bill, and not before, he may recover back the amount from the drawer in an action for money had and received. Christian v. Keen, 80 Va. 369, 377. See also Whitwell v. Brigham, 19 Pick. 117; Henderson v. Thornton, 37 Miss. 448; Suydam v. Combs, 3 Green (N. J.) 133. Capacity of payee to indorse. — Thus, the acceptor would not be permitted to show that the payee at the time of the acceptance was a lunatic. Smith v. Marsack, 6 C. B. 486. § 63. When person deemed indorser. — A person plac- ing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indor- ser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. Indication of intention to be bound otherwise. — The intention to be bound in some capacity other than as indorser must be indicated by appropriate language used for that purpose; and such intention may not be inferred from conduct, or from lan- guage that is equivocal. McDonald v. Luckenbach, 170 Fed. Rep. 434, 95 C. C. A. 604, 607. But where one wrote upon the back of a note the words "I hereby guarantee payment of the within note," it was held that he had by the appropriate word "guar- antee" indicated his intention not to be bound as indorser. Noble v. Beeman, Spaulding Co., 65 Oregon, 93. So, where the person signing bound himself to pay the amount at maturity "without condition," he was held not to be an indorser. Hibernia Bank LIABILITY OF PARTIES. 123 & Trust Co. v. Dresser, 132 La. 532. For a case applying this section, see Lewy v. Wilkinson, 135 La. 105. Officers of corporation indorsing. — Under this section the fact that persons who sign their names in blank upon a note given by a corporation are officers of the corporation, and execute the note in its behalf, does not enlarge their individual liability, and bind them otherwise than as indorsers. McDonald v. Luckenbach, 170 Ted. Rep. 434. Partner indorsing individually. — Under this section a partner, by individually indorsing a firm note, adds to his liability as maker a several and distinct liability as indorser. Nat. Exchange Bank v. Lubrano, 29 R. I. 64; Fourth Nat. Bank v. Mead, 216 Mass. 521. See note to section 64. Parol evidence to vary status. — Under this section parol evidence is not admissible to show that one who signed as an indorser in- tended to be bound as a maker, since this would be to vary the legal effect of the written instrument. First Nat. Bank v. Bickel, 143 Ky. 754 ; Hopkins v. Commercial Bank, 64 Fla. 310 ; Baumeister v. Kuntz, 53 Fla. 340; Ensign v. Flagg, 177 Mich. 317. In a late case in Maryland the Court of Appeals of that state said : ' ' Since the enactment of the negotiable instruments act by the different states, the questions raised by the preceding sections have received much judicial consideration, although they have not been raised directly in this court. We have made a diligent search through the many state reports, and have found an absolute unanimity of opin- ion. Everywhere it has been held that the words of section S2 are to be taken in their literal sense. That is, if a person places his name on an instrument other than as a maker, drawer, or acceptor, he is only to be held to the obligations of an indorser, unless he adds words to indicate otherwise. The act does not merely raise a presumption that he is an indorser, but his status to the instru- ment is fixed by it, and cannot be changed by parol proof." Lichtner v. Roach, 95 Atl. Rep. (Md.) 62. But in a case in Ten- nessee, however (Mercantile Bank v. Busby, 120 Tenn. 652), parol evidence was admitted to show that certain stockholders of a cor- poration, who had placed their signatures on the back of a promis- sory note made by another stockholder, intended to bind them- selves as joint makers, and were liable though not given notice of dishonor. But this seems to be a confusion of legal principles. To 124 THE NEGOTIABLE INSTRUMENTS LAW. show the agreement between persons who are only secondarily lia- ble, as authorized by section 68, does not contradict the writing itself; but to show that a party who appears upon the paper as an indorser, and, therefore, liable secondarily, is in fact a maker and liable primarily, certainly varies the legal effect of the instrument. The nature and extent of the contract is implied by law from the fact that the name of the indorser is written across the back of the bill or note (see Sec. 63) ; and the contract arising from a signa- ture so placed is as well settled as though the terms thereof had been written out above the signature; and parol evidence is just as inadmissible in regard to this contract as in regard to any other contract in writing. Bird v. Kay, 40 App. Div. (N. T.) 533, 537; Hodgens v. Jennings, 148 Id. 879, 881. § 64. Liability of irregular indorser. — Where a per- son, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he ia 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 sub- sequent 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. Variant readings. — In Illinois the following changes are made: For subdivision one, the following is substituted: " If the in- strument is a note or bill, payable to the order of a third person, or an accepted bill, payable to the order of the drawer, he is liable to the payee and to all subsequent parties;" and for subdivision two, the following: " If the instrument is a note or unaccepted bill 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. ' ' Reason for rule adopted in statute.— This section is intended to cover irregular indorsements. On this subject the decisions LIABILITY OP PABTIE3. 125 were very conflicting. In some jurisdictions a person placing his signature on the back of a note before the payee has indorsed was deemed a joint maker. Good v. Martin, 95 U. S. 93; National Exchange Bank v. Cumberland Lumber Co., 100 Tenn. 479; Logan v. Ogden, 101 Tenn. 392; Bank of Jamaica v. Jefferson, 92 Tenn. 537; Melton v. Brown, 25 Fla. 461; Schroeder v. Turner, 68 Md. 506. In other jurisdictions he was regarded as a guarantor. In still others he was considered an indorser. And tltose courts which held him to be an indorser differed as to whether he was a first or second indorser. The rule adopted in the statute is embodied in part in section 3117 of the Civil Code of California, which reads: "One who indorses a negotiable instrument before it is delivered to the payee is liable to the payee thereon, as an in- dorser." The California rule was adopted because it is conducive to certainty, and because it appears to accord more nearly with what must have been the intention of the parties. "When a plain man puts his signature on the back of a negotiable instrument he ordinarily understands that he is becoming liable as an indorser; and if he puts it there before the instrument is delivered, he usually does so for the purpose of giving the maker or drawer credit with the payee or other person to whom it is negotiated. The following observation in Connors v. Taylor (13 Wis. 224, 229), seems to embody much practical good sense: "Obviously, a person indorsing a note before delivery thereof to the payee intends rendering himself liable to the payee in some character and upon some ground. He must intend and design to secure its payment and give credit to the paper by placing his name upon it, even in the hands of the payee." In many of the cases the reasoning was highly technical, and the decisions were based upon considerations which, in all probability, never entered the heads of the parties themselves. The California Code makes no pro- vision for a case where the instrument is drawn to the order of the maker or drawer. This is covered by subdivision 2, above. Subdivision 3 was added to provide for a case where, the payee being unable to enforce payment, there might be a question whether the indorser would be liable to a person claiming under the payee. Changes made by the statute. — In New York prior to the stat- ute a person indorsing in blank before delivery to the payee was f rima facie deemed to be a second indorser, and hence not liable 126 THE NEGOTIABLE INSTRUMENTS LAW. to the payee, who was supposed to be the first indorser. Bacon v. Burnham, 37 N. Y. 614; Phelps v. Vischer, 50 N. Y. 69. The same rule prevailed in Pennsylvania. Eilbert v. Finkbeiner, 68 Pa. St. 243; Central Nat. Bank v. Dreydoppel, 134 Pa. St. 499. And in Oregon. Deering v. Creighton, 19 Oregon, 118; Cogswell v. Hayden, 5 Oregon, 22. But as the paper itself furnished only prima facie evidence of this intention, it was competent to rebut the presumption by parol proof that the indorsement was made to give the maker credit with the payee. Coulter v. Richmond, 59 N. Y. 478. The statute has changed the law in New York, New Jersey, Pennsylvania, Rhode Island, Ohio, Missouri, and other states. Far Rockaway Bank v. Norton, 186 N. Y. 484; Haddock, Blanchard & Co., Inc., v. Haddock, 192 N. Y. 499; Wil- son v. Hendee, 74 N. J. L. 640; Hibbs v. Guaraglia, 75 N. J. L. 168; Rockfield v. First Nat. Bank of Springfield, 77 Ohio St. 311; Deahy v. Choquet, 28 R. I. 338; Walker v. Dunham, 135 Mo. App. 396; American Trust Co. v. Canevin, 184 Fed. Rep. 657. And now, where it is sought to hold an irregular indorser, demand and notice of dishonor must be shown as in other instances. See cases cited above. Partner indorsing individually. — The words of this section, "not otherwise a party," do not change the rule that a partner indorsing individually is a party different from the partnership and incurs a double liability arising from the two distinct con- tracts by which he has bound himself. Fourth Nat. Bank v. Mead, 216 Mass. 521. In this case it was said: "The act is designed in part as a codification for the practical use of business men. It ought to be interpreted so as to be a help, and not a hindrance, to the easy ascertainment of the rights and liabilities of the several parties to commercial paper. To this end the words in section 81, 'a person, not otherwise a party,' must refer to one who appears and can be recognized from that which is written within the four corners of the instrument as a 'party.' Partnerships often assume a style or designation which affords no clue to those who are its members. It might not infrequently be a hardship to compel the holder of firm paper which bears an indorsement made before delivery to ascertain at his peril whether the person making such indorsement was 'otherwise a party to the instru- ment' through being one of the partnership' which was maker " LIABILITY OF PAETIES. 1^1 Accommodation indorser. — Under this section an indorser who has signed for the accommodation of the maker before the paper was indorsed by the payee, may defend upon the ground of invalid- ity or want of consideration in the same way that the maker could do, if the action were against him. Leonard v. Draper, 187 Mass. 536. Parol evidence. — This section does not, however, fix the rights of the various indorsers as between themselves; the latter liability is governed by section 68 under which evidence is admissible to show an agreement as to the order in which they shall be liable. Haddock, Blanchard & Co., Inc., v. Haddock, 192 N. Y. 499; S. C. 118 App. Div. 412; Kohn v. Consolidated Butter & Egg Co., 30 Misc. (N. T.) 725; Wilson v. Hendee, 74 N. J. L. 640. But as the statute declares the liability to be that of an indorser, the holder is not permitted to show that the party so signing meant to bind himself as guarantor. Farquhar Co. v. Highman, 16 N. D. 106. See note to sec. 68. Pleading — Burden of proof. — Where the holder seeks to hold a party liable under this section he must allege and prove that the paper was so indorsed before its delivery, and the burden of proof as to this fact is upon him. Bender v. Bahr Trucking Co., 144 App. Div. (N. Y.) 742. ILLUSTRATIONS. Note made by A payable to order of B, indorsed by C, and after- ward delivered to B. C is liable as indorser to B. Note made by A payable to order of himself, indorsed by B, and afterward delivered to C. B is liable as indorser to C. Note made by A to order of B, indorsed by C before B, but for accommodation of B, and discounted by Bank of X. C is liable as indorser to Bank of X and not to B. § 65. Warranty where negotiation by delivery or qualified indorsement. — 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 tc it; 3. That all prior parties had capacity to contract; 128 THE NEGOTIABLE INSTRUMENTS LAW. 4. That he has no knowledge of any fact which would impair the validity of the instrument or render it value- less. But when the negotiation is by delivery only, the warranty extends in favor of no holder other than the immediate transferee. The provisions of subdivision three of this section do not apply to persons nego- tiating public or corporate securities, other than bills and notes. Express warranty. — This section refers, of course, only to the implied warranty. An express warranty may be so framed as to exclude all other warranties which would otherwise be implied by law. Giffert v. West, 37 Wis. 115. Warranty of genuineness. — See Littauer v. Goldman, 72 N. Y. 606; Whitney v. National Bank of Potsdam, 45 N. T. 303; Her- rick v. Whitney, 15 Johns. 240; Canal Bank v. Bank of Albany, 1 Hill, 287; Coolidge v. Brigham, 5 Mete. 68. But if at the time of the transfer he expressly decline to warrant the genuineness of the instrument no such warranty will be implied. Bell v. Dagg, 60 N. T. 528. But a general refusal to guarantee will not of itself exclude the implied warranty of genuineness. (Id.) The sale and transfer, for a full and fair price, of a note past due, indorsed in blank by the person to whose order it is payable, implies a warranty by the vendor that such indorsement is valid. Giffert v. West, 37 Wis. 115. See next section. Warranty that instrument is valid. — It will be noted that the warranty mentioned in the next section, that the instrument is valid, is omitted from this section. The inference from such omis- sion is, that a person negotiating commercial paper by delivery merely, or by a qualified indorsement, does not warrant that it is an enforceable contract, as, for example, that it is not void for usury. This was the New York rule (Littauer v. Goldman, 72 N. Y. 506), and while it has been criticized and disapproved by the Supreme Court of the United States (Meyer v. Eichards, 163 TJ. S. 385), it seems to be the more convenient rule in practice. The contrary rule would often work great hardship, and would make the busi* ness of dealing in commercial paper extremely hazardous. A LIABILITY OF FAETIES. 129 broker, for example, buying and selling notes and bills, may assure himself that an instrument is genuine, and that the parties had capacity to contract, but he could not always know the circum- stances under which the paper was made. On the other hand, the New York rule, which is conceived to be the rule of the statute, does no injury to the purchaser; for if he desires a warranty, he has only to exact it, or to require the indorsement of the seller. See sec. 67. Warranty of title. — See Meriden National Bank v. Gallaudet, 120 N. T. 298, 303. Capacity of prior parties. — See Littauer v. Goldman, 72 N. Y. 606, 509. Under this section there is a warranty that the maker had power to contract, although the holder knew wheD he took the paper that the maker was a married woman. In re Young's Estate, 234 Pa. St. 287. Knowledge of fact affecting validity of paper. — Thus, if he has knowledge that the paper is void for usury, he will be liable to the purchaser. Littauer v. Goldman, 72 N. Y. 506. But in such case scienter must be alleged and proved. (Id.j Compare Meyer v. Richards, 163 U. S. 385; Wood v. Sheldon, 42 N. J. Law, 425. Public or corporate securities. — Seo Otis v Cullum, 92 U. S. 488. This was an action against the vendor of municipal bonds payable to bearer, which were afterward declared void because the legislature had no power to pass the acts under which they werp issued. It was held that no recovery could be had in the absence of an express warranty. The application of the rule of commercial paper in such cases would work great hardship and much public inconvenience. § 66. Liability of general indorser. — Every indorsei who indorses without qualification, warrants to all sub- sequent holders in due course: 1. The matters and things mentioned in subdivisions one, two and three of the next preceding section; and 2. That the instrument is at the time of his indorse- ment valid and subsisting. And, in addition, he engages that on due present- n 130 THE NEGOTIABLE INSTEUMENTS LAW. ment, it shall be accepted or paid, or both, as the caw? 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 thf holder, or to any subsequent indorser who may be com- pelled to pay it. Variant readings. — In Illinois the following changes are made: The words " not an accommodating party " are interpolated after " every indorser " at the beginning of the section; the word " four " is substituted for " three " in the first subdivision; and the words " every indorser " for " he " near the beginning of the last paragraph. Where paper is indorsed restrictively. — As this and the pre- ceding section include the case of every indorser, the warranty as to genuineness will apply to one to whom the paper has been in- dorsed restrictively, as for example, where the indorsement is " for collection." This undoubtedly changes the law ; for the former rule was that the indorsement of a bank to which paper had been in- dorsed " for collection " did not import a guaranty of the genuine- ness of all prior indorsements, but only of the agent's relation to the principal as stated upon the face of the paper; and it was held that, in such a case, the collecting bank was not liable after it had paid the proceeds to its principal, though a prior indorsement was a forgery. United States v. American Exchange Nat. Bank, TO Fed. Eep. 232 ; Nat. Park Bank v. Seaboard Nat. Bank, 114 N. Y. 28. But this rule was exceedingly inconvenient in practice, and hence it was deemed expedient to make every indorser a warrantor of genuineness. There is no hardship in this rule, for each indorser has a right of recourse against all prior parties. The former rule, however, introduced such an element of uncertainty that the clear- ing-house associations throughout the country adopted rules to ob- viate its effects, and the bankers sent letters to their customers re- questing that they discontinue the use of the indorsement " for de- posit," " for collection," etc. In this, as in several other instances where the law was changed, the needs of the business community were deemed of more importance than technical principles. To whom warranty runs. — Under this section, as under the rule of the law merchant, the warranty is in favor of subsequent holder$ LIABILITY OF PARTIES. 131 only, and since the adoption of the statute, as well as before, the in- dorser does not warrant to the drawee that the signature of the drawer is genuine. Farmers' and Merchants' Bank v. Bank of Rutherford, 115 Tenn. 64, 70-71. Thus, if a check purporting to be drawn by A should be indorsed by B and cashed by C, the in- dorsement of B would be a warranty in favor of C, but not in favor of the bank on which the check is drawn. Warranty as to genuineness, title, etc. — See Leonard v. Draper, 187 Mass. 536. The warranty as to genuineness, title and capacity of prior parties (See sec. 65), applies even though the party is an ac- commodation indorser, and the fact was known to the holder when he took the instrument. Packard v. Windholz, 88 App. Div. (N. Y.) 365, aff'd 180 N. Y. 549; Oriental Bank v. Gallo, 112 App. Div. 360. The provision of the statute refers to the condition of the in- strument on leaving the hands of the indorser, and hence, if the paper should be altered after that time, and before delivery, there is no warranty. First Nat. Bank v. Gridley, 112 App. Div. (N. Y.) 398. Thus, where a note payable to the order of several payees jointly, was indorsed by one of them, and forwarded by mail to the maker, who, before negotiating the instrument, erased the word " jointly," and struck out the name of one of the payees, and in- serted his own in place thereof, it was held that the indorser was not liable. (Id.) The indorsement of a promissory note is a guar- anty by the indorser to the indorsee that the prior indorsements on the note and the signature of the payor are genuine, and made by parties authorized to pass the title. McConegby v. Kirk, 68 Pa. St. 200; Condon v. Pearce, 43 Md. 83; Lambert v. Pack, 1 Salk. 127; Critchlow v. Parry, 2 Camp. 182; Prescott Bank v. Caverly, 7 Gray, 216, 220. Thus, one who indorses a promissory note, purport- ing to be executed by a firm, thereby impliedly contracts that the note was made by the firm in whose name it is executed, and he cannot dispute the fact in an action upon the indorsement. Dal- rymple v. Hillenbrand, 62 N. Y. 5. And a second indorser can- not dispute the legal capacity of the payee to indorse on the ground that she was a married woman. Prescott Bank v. Caverly, 7 Gray, 216, 217. So, one indorsing the note of a corporation admits its capacity to execute the note. Glidden v. Chamberlin, 167 Mass- 486. But see Southern Loan Co. v. Morris, 2 Pa. St. 175. Warranty of validity. — Thus, the indorser may not set up as a defense that the instrument was made on the Lord's day. Prescott 132 THE NEGOTIABLE INSTRUMENTS LAW. Nat. Bank v. Butler, 157 Mass. 548. Or that it is void as to the maker for usury. Horowitz v. Wollowitz, 59 Misc. (N. Y.) 520. But where the indorser is also the maker, and the contract is void under some statute, as, for example, where it is usurious, the war- ranty can be no stronger than the contract itself. Sabine v. Paine, 166 App. Div. (N. Y.) 9, 12. Certificate of deposit. — This section applies to one who indorses in blank a certificate of deposit; and if the paper is dishonored owing to the insolvency of the bank he can be held as indorser. Jensen v. Wilslef, 36 Nev. 37. Guaranty of indorsements. — The words "indorsements guaran- teed " placed upon the back of a check is equivalent to a guaranty of the genuineness of the whole of the instrument, including the indorsements, excepting only the signature of the drawer. N. Y. Produce Exchange Bank v. Twelfth Ward Bank, 135 App. Div. 52. Where note stipulates for attorney's fee. — An indorser of a promissory note which contains a stipulation for a reasonable at- torney's fee in case of suit is as much liable for the attorney's fee as for the principal of the note. Benn v. Kutzsehan, 24 Ore. 28. See section 2. Individual indorsement of partner. — Under the statute a part- ner who indorses a note made by the firm adds to his liability as maker a further liability as indorser. Nat. Exchange Bank v. Lubrano, 29 R. I. 64; Fourth Nat. Bank v. Mead, 215 Mass. 521. Indorsement by executors. — Executors have no power to bind the estate of the testator by the contract of indorsement. Packard v. Dunfee, 119 App. Div. (N. Y.) 599; Schmittler v. Simon, 101 N. Y. 554. See also Union Bank v. Sullivan, 214 N. Y. 332, where the indorsement was made by one of several executors. Holder's knowledge of infirmity. — As the new contract evi- denced by the indorsement is not dependent upon the validity of the note, the holder may hold the indorser upon his warranty, even though he knew when he took the note that it was not enforceable against the maker, as, for example, when the note was made by a corporation and was ultra vires; Eirst Bank of Notasulga v. Jones, 156 App. Div. (N. Y.) 277; or was made by a married woman. In re Young's Estate, 234 Pa. St. 287. LIABILITY OP PARTIES. 133 Requiring holder to sue maker. — The indorser has no right to require the holder to sue the maker or drawer under the penalty of the indorser being discharged in case of non-compliance. Day v. Eidgway, 17 Pa. St. 303. See also Curtis v. Davidson, 215 N. Y. 395. Nor is the holder bound to anticipate and make pro- vision for a breach of the contract. Bartlett v. Isbell, 31 Conn. 297. Parol evidence. — Parol evidence of an agreement which would vary the legal liability of the indorser under his indorsement is in- admissible. Smith v. Caro, 9 Ore. 278; Eaton v. McMahon, 42 Wis. 484. And while there has been some conflict in the decisions, the sounder doctrine puts all indorsements on substantially the same footing. The contract by a blank indorsement is fixed by law, and should not be rendered uncertain by parol, any more than when written out in full. Charles v. Denis, 42 Wis. 56, 58; Torbert v. Montague, 38 Colo. 325. This is the rule adopted in the statute, which makes the indorser's obligation absolute. Thus, the holder may not show by parol that the liability of an indorsing payee is that of a maker. Burwell v. Gaylord, 119 Minn. 426. And one who indorses without qualification will not be permitted to show an oral agreement, made at the time, that such indorsement was to be without recourse to him. Aronson v. Nurenberg, 218 Mass. 376. See section 68 and note. Holder's right to choose whom he will sue. — The indorser has no right to require the holder to sue the maker or drawer. Day v. Eidgway, 17 Pa. St. 303. And, on the other hand, the maker may not defend upon the ground that as between the indorser and the holder the note has been secured or paid. People's Nat. Bank v. Eice, 149 App. Div. (N. Y.) 18. § 67. Liability of indorser where paper negotiable by delivery. — Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser. Kule at common law. — This section makes no change in the law. Cover v. Meyers, 75 Md. 406. Holder's right of election. — The holder of paper payable to bearer and indorsed may sue upon it as bearer or indorser at his 134 THE NEGOTIABLE INSTRUMENTS LAW. election. Daniel on Negotiable Instruments, section 663a; 3 Kent's Comm. 44. Negotiation of paper so indorsed. — Formerly in some states a note payable to a designated payee or bearer could not be negotiated except by the indorsement of such person. See Garvin v. Wiswell, 83 111. 218 ; Blackman v. Lehman, 63 Ala. 547. But by section 40 of the Negotiable Instruments Law an instrument payable to bearer and indorsed specially may be further negotiated by delivery. § 68. Order in which indorsers are liable. — As re- spects one another indorsers are liable prima facie in the order in which they indorse; but evidence is ad- missible to show that as between or among themselves they have agreed otherwise. Joint payees or joint in- dorsees who indorse are deemed to indorse jointly and severally. Variant readings. — In Illinois, for the last sentence of the sec- tion, the following is substituted : ' ' All parties jointly liable on a negotiable instrument are deemed to be jointly and severally liable." Accommodation indorsers. — This rule is general, and applies to accommodation indorsers as well as to others. Such indorsements import, not a joint, but a several and successive, liability, each in- dorser being responsible to all who succeed him. Easterly v. Bar- ber, 66 N. Y. 433; Kelly v. Burroughs, 102 N. Y. 93; Egbert v. Hanson, 34 Misc. 597; McCarty v. Eoots, 21 How. (U. S.) 432; Bank of U. S. v. Beirne, 1 Gratt. 234; Hague v. Davis, 8 Gratt. 4; Shaw v. Knox, 98 Mass. 214; McDonald v. Magruder, 3 Peters, 470 ; Wood v. Kepold, 3 Harris & J. 125 ; Clapp v. Eice, 13 Gray, 403 ; Howe v. Merrill, 15 Gush. 88 ; Talcott v. Cogswell, 3 Day, 512 ; Kirschner v. Conklin, 40 Conn. 77, 81 ; Wolf v. Hostetter, 182 Pa. St. 292; Russ v. Sadler, 197 Pa. St. 51; Bamford v. Boynton, 200 Mass. 560. The mere fact, then, that indorsers are accommo- dation parties and known to one another to be such does not overcome the prima facie presumption, but for this purpose it is necessary to show a special agreement. In re McCord, 174 Fed. Rep. 72. LIABILITY OF PARTIES. 135 Proof of special agreement.— See Morrison Lumber Co. v. Look- out Mt. Hotel Co., 92 Tenn. 6; Bank of Jamaica v. Jefferson, 92 Tenn. 537; Reinhart v. Schall, 69 Md. 352; Hale v. Danforth, 46 Wis. 554 ; Witherow v. Slaybach, 158 N. Y. 649 ; Patch v. Washburn, 82 Mass. 82; Breneman v. Furniss, 90 Pa. St. 186. Evidence to show an agreement for a joint liability; Easterly v. Barber, 66 V. Y. 433; Phillips v. Preston, 5 How. (U. S.) 278; Edelen v. White, 6 Bush. 408; contra, Johnson v. Ramsay, 43 N. J. Law, 279. Evi- dence to show contract that one was to be prior indorser. Slack v. Kirk, 67 Pa. St. 380; Reinhart v. Schall, 69 Md. 352; Slagel v. Rust, 4 Gratt. 274. For a case where relief given in equity where order of indorsers changed on renewal of note without consent of one; see Slagel v. Rusts' Admr., 4 Gratt. 274. The statute has changed the law in New Jersey. Morgan v. Thompson, 72 N. J. L, 244, 246. Agreement inferred from circumstances. — To overcome the prima facie presumption created by this section it is not necessary that there shall be proof of an actual formal contract in so many words; but it is sufficient if, taking all the circumstances into ac- count, the nature of the liability appears, which as between them- selves the indorsers intended to assume. Weeks v. Parsons, 179 Mass. 570, 575 ; Clapp v. Rice, 13 Gray, 403 ; Hagerthy v. Phillips, 83 Me. 336; MacDonald v. Whitfield, L. R. 8 App. Cas. 733. Thus, where the members of a stranded theatrical company indorsed a note for the purpose of raising money to enable them to get home, and all were equally benefitted, a prior indorser who had been compelled to pay the note was held to be entitled to contribution from the other indorsers. George v. Bacon, 138 App. Div. (N. Y.) 208. So, where the stockholders of a corporation indorsed a note to enable the corporation to continue in business, it was held that they were, as among themselves, equally liable, though there was no proof of an agreement to that effect. Trego v. Cunningham's Es- tate, 267 111. 367. Parol evidence. — Under this section the agreement of the in- dorsers as to their liability respecting one another may be shown by parol. Wilson v. Hendee, 74 N. J. L. 640; Hunter v. Harris, 63 Ore. 505; Noble v. Breemen-Spaulding Co., 65 Ore. 93; Gold- man v. Goldberger, 208 Fed. Rep. 877. Thus, in an action brought by one indorser of a note against one of the two other indorsers, the defendant was allowed to show that the indorsements were for ac- 136 THE NEGOTIABLE INSTRUMENTS LAW. eommodation, and that by an oral agreement among the indorsers his liability was in no event to exceed one-third of the amount at any time due on the note. Shea v. Vahey, 215 Mass. 80. See also Union Bank v. Sullivan, 214 N. Y. 332. And the rule which per- mits the receipt of parol evidence to determine the question of lia- bility as between those who are secondarily liable applies to the drawer of a bill. Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499. In the case last cited the court said: "As we have seen, upon the acceptance of the bill the acceptor becomes the prin- cipal debtor and the one primarily liable to pay the amount of the bill, and all other parties to the instrument, including the maker and indorser, are secondarily liable. We are of the opinion that the maker [drawer] of the bill is in legal effect and within the intention of this section an indorser, and that as between the plaintiff and the defendant, parol evidence is authorized to determine the liability as between them." Joint payee indorsing. — This provision changes the law. Prior to the statute joint payees who indorsed were liable only jointly. Lane v. Stacy, 8 Allen, 41 ; Daniel on Negotiable Instruments, sec- tion 704. Suit against one joint indorser. — Under this section, an action lies against one joint indorser without joining the others. Hod- gens v. Jennings, 148 App. Div. (N. Y.) 879. § 69. Liability of agent or broker. — Where a broker or other agent negotiates an instrument without in- dorsement, 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. Variant readings. — In Illinois a new section is interpolated at this place as 69a. " Whenever any bill of exchange drawn or in- dorsed within this state and payable without this state, is duly protested for non-acceptance or non-payment, the drawer or in- dorser thereof, due notice being given of such non-acceptance or non-payment, shall pay such bill at the current rate of exchange and with legal interest from the time such bill ought to have been paid until paid, together with the costs and charges of protest, LIABILITY OF PAfiTIES. 137 and on bills payable in the United States in case suit has to be brought thereon and on bills payable without the United States with or without suit, five per cent, damages in addition." Rule at Common law. — See Meriden National Bank v. Gallaudet, 120 N. Y. 289; Cabot Bank v. Morton, 4 Gray, 156; Worthington v. Cowles. 12 Mass, 30. 138 THE NEGOTIABLE INSTRUMENTS LAW. AETICLE VII. Presentment for Payment. Section 70. When presentment necessary — effect of failure to present. 71. Where not payable on demand — where payable on demand. 72. What constitutes a sufficient presentment. 73. Place of presentment. 74. Instrument must be exhibited. 75. Presentment where instrument payable at bank. 76. Where person primarily liable is dead. 77. Presentment to persons liable as partners. 78. Presentment to joint debtors. 79. When presentment not required to charge the drawer. 80. When presentment not required to charge the indorser. 81. When delay in making presentment is ex- cused. 82. When presentment may be dispensed with. 83. When instrument dishonored by non-pay- ment. 84. Right of recourse to parties secondarily liable. 85. Time of maturity. 86. How time computed. 87. Instrument payable at bank — effect of. 88. What constitutes payment in due course. PRESENTMENT FOE PAYMENT. 139 § 70. When presentment necessary — effect of failure to present. — Presentment for payment is not necessary in order to charge the person primarily liable on the in- strument; 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. But except as herein otherwise provided, presentment for payment is necessary in order to charge the drawer and indorsers. Variant readings. — In Illinois the words "except in case of bank notes" are interpolated after the words "primarily liable" on the instrument." In Wisconsin all after the words " primarily liable " in the first sentence to the end of that sentence are omit- ted. In the New York Statute the words "and nas funds there available for that purpose ' ' after the word ' ' maturity ' ' in the first sentence, were interpolated by Laws N. Y. 1898, chap. 336. They seem to be superfluous. It is difficult to see how a man can be able to pay, unless he has the funds with which to make pay- ment. Besides, if taken literally, they impose a condition not deemed necessary by the courts. If, for example, the "special place ' ' where the paper is payable is the office of the maker or ac- ceptor, this provision requires that he have the funds there, and it would not be enough that he have them in bank. The interpola- tion is not only at variance with the decisions on the subject, but is contrary to good sense, and to the practice of the business world. The change was made without the knowledge of the Com- missioners on Uniformity of Laws. It affords a good illustration of the absurdities likely to result from legislative "tinkering." The same change has been made in Kansas and Ohio. Liability of maker or acceptor. — The rule was well established that presentment was not necessary to charge the maker or ac- ceptor. See Wright v. Vermont Ins. Co., 164 Mass. 302; Payson v. Whitcomb, 15 Pick. 212; Howard v. Boorman, 17 Wis. 459 Rumball v. Ball, 10 Md. 38; Frampton v. Coulson, 1 Wils. 33 Norton v. Ellam, 2 M. & W. 461; Hills v. Place, 48 N. Y. 520 Bush v. Gilmore, 45 App. Div. (N. Y.) 89. And this was so though the paper was by its terms payable "upon demand," for these 140 THE NEGOTIABLE INSTRUMENTS LAW. words do not make the demand a condition precedent to a right of action, but import that the debt is due and demandable imme- diately, or at least that the commencement of a suit therefor 13 a sufficient demand. Dominion Trust Co. v. Hildner, 243 Pa. St. 253; Swearingen v. Sewickky Dairy Co., 198 Pa. St. 68; Church v. Stevens, 56 Misc. (N. Y.) 572. The rule is general, and applies tnough the maker has made the note for accommodation and this is known to the holder. Hansborough v. Gray, 3 Gratt. 340. For cases arising under the statute, see Farmers' Nat. Bank v. Ven- ner, 192 Mass. 531, 534; Florence Oil Co. v. First Nat. Bank, 38 Colo. 119; Dewees v. Middle States Coal & Iron Co., 248 Pa. St. 202. Paper payable at a particular place. — The rule adopted gener- ally in the United States was that where a note is made payable at a particular bank or other place, or a bill of exchange is drawn or accepted payable in like manner, it is not necessary in order to recover of the maker or acceptor to aver or prove presentment or demand of payment at such place on the day the instrument became due or afterward. The only consequence of a failure to make such presentment is that the maker or acceptor, if he was ready at the time and place to make the payment, may plead the matter in bar of damages and costs. Hills v. Place, 48 N. Y. 520, 523; Parker v. Stroud, 98 N. Y. 379, 384; Cox v. National Bank, 100 U. S. 713; Wallace v. McConnell, 13 Peters, 136; La- zier v. Horan, 55 Iowa, 77; Insurance Company v. Wilson, 29 W. Va. 543; Lockwood v. Crawford, 18 Conn. 361; Bond v. Storrs, 13 Conn. 416. Where holder has election. — Where, by the terms of the instru- ment, the holder has the option to declare the principal sum due upon default in the payment of interest he must prove present- ment and notice in order to hold an indorser. Galbraith v. Shep- ardfi 43 Wash. 698. See also Bardsley v. Washington Mill Co, 54 Wash. 553. Place of contract. — Where a draft is drawn in another state, by one residing there, upon a person residing in New York, any legal question in reference to presentation and demand for pay- ment is to be determined by the laws of New York. Sylvester v. Crohan, 138 N. Y. 494; Hibernia Bank v. Lacomb, 84 N. Y. 367. As to presentment of a bill drawn in New York upon a PRESENTMENT FOE PAYMENT. 141 person doing business in a foreign country, see Amsinck v. Rog- ers, 189 N. Y. 252. Where indorser holds security. — The fact that the indorser holds security to indemnify him against loss upon his indorse- ment does not dispense with the necessity for presentment for payment and notice of dishonor. First Nat. Bank of Binghamton v. Baker, 163 App. Div. (N. Y.) 72; Whitney v. Collins, 15 R. L 44. § 71. Where not payable on demand — where payable on demand. — Where the instrument is not payable on demand, presentment 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 reason- able time after the last negotiation thereof. Variant readings. — In Nebraska all after the -word " issue " in the second sentence is omitted. In Vermont the words " its issue in order to charge the drawer " are substituted for the words " last negotiation thereof." Changes made by the statute. — This section changed the law of New York, which prior to the statute was, that a promissory note payable on demand with interest was a continuing security, on which an indorser remained liable until an actual demand, and the holder was not chargeable with neglect for omitting to make such demand within any particular time. Merritt v. Todd, 23 N. Y. 28; Pardee v. Fish, 60 N. Y. 265; Herrick v. Wolverton, 41 N. Y. 581; Wheeler v. Warner, 47 N. Y. 519; Crim v. Stark- weather, 88 N. Y. 339; Parker v. Stroud, 98 N. Y. 379, 385; Shutta v. Fingar, 100 N. Y. 541. The object intended to be accomplished by the statute was to do away with the distinction between notes, or bills, payable on demand, which , Merritt v. Todd had created, and to leave the question of their reasonable presentment for pay- ment, in order to charge the parties to them, as one for the de- termination of the court upon the facts. Commercial Nat. Bank v. Zimmerman, 185 N. Y. 310. In Connecticut, prior to the Nego- tiable Instruments Law, promissory notes payable on demand were 142 THE NEGOTIABLE INSTRUMENTS LAW. required to be presented within four months. Connecticut Gen. eral Statutes, p. 405. But the later statute restores the rale of the common law as it formerly existed in that state. Hampton v. Miller, 78 Conn. 267, 271-272. A similar rule prevailed in Min- nesota (Minnesota statutes [1891], section 2104). In Massachu- setts and Vermont demand notes were overdue in sixty days. Merritt v. Jackson, 181 Mass. 67; Paine v. Central Vermont E. R. Co., 118 U. S. 152. As to a note payable on demand, "with interest semi-annually," see Hayes v. Werner, 45 Conn. 252. Reasonable time — What is.— One of the most difficult questions presented for the decision of a court is, what shall be deemed a reasonable time within which to demand payment of the maker of a note payable on demand, in order to charge the indorser. It depends upon so many circumstances to determine what is a rea- sonable time in a particular case, that one decision goes but little way in establishing a precedent for another. Seavor v. Lincoln,. 21 Pick. 267. If the facts are disputed and the testimony con- flicting, the question is a mixed one of law and fact, to be de- cided by the jury, under the instructions of the court, but where- the facts are not in dispute the question is one of law. Commer- cial Nat. Bank v. Zimmerman, 185 N. Y. 310; German Am. Bank v. Mills, 99 App. Div. (N. Y.) 312; In re Philpott's Estate, 151 N. W. Rep. (Iowa) 825; Guild v. Goldsmith, 9 Fla. 212. Decisions under the statute. — Under this section it has been held that a note payable on demand should be treated as due four- months after its date. Frazee v. Phoenix Nat. Bank, 161 Ky. 175. The court said: "The question is under the terms and the spirit of the act, when should there have been a presentment for pay- ment and notice of dishonor. It is a matter of common knowledge that in the banks of central Kentucky commercial paper is rarely permitted to run longer than four months without renewal. It may be said to be a custom or usage of trade that such paper is ordinarily payable within that time, and being the usage of trade, this note should have been treated as due at least on the 20th day of December, 1908." In Massachusetts it is held, under this sec- tion, that in the absence of any evidence to show a usage of trade- or business to the contrary, a demand note must be presented within sixty days in order to hold an indorser. Merritt v. Jack- Bon, 181 Mass. 67. PRESENTMENT FOE PAYMENT. 14$ Paper overdue. — As by section 7 an instrument negotiated when overdue is payable on demand, the requirement of section 71 is applicable in such cases. In theory paper indorsed when overdue is equivalent to a bill of exchange drawn on the party primarily liable, payable at sight. In this theory the necessity of demand and notice is an essential element; not notice on a given day, as in the case of a maturing note, possible in that case, but impossible in the other, for the day appointed by the former maker and the new acceptor has passed; but notice after the holder has had reasonable time to make the demand on the maker, and has employed that time with diligence. Tyler v. Young, 30 Pa. St. 143, 144; Leidy v. Tammany, 9 Watts, 353; Guild v. Gold- smith, 9 Fla. 212. Request of indorser. — A note, presented in accordance with the request or assent of the indorser, is, as to him, presented in a reasonable time. Oley v. Miller, 74 Conn. 304, 308. On demand after date. — A note payable "on demand after date" is a demand note, and not one payable on a fixed day, and hence, it need only be presented for payment within a rea- sonable time. Schlesinger v. Schultz, 110 App. Div. (N. Y.) 356. Demand with tender. — Where a note is payable "on demand and upon security given," the making of a demand accompanied by a tender of the securities is not a condition precedent to the maintenance of an action to recover upon the note, but it is suf- ficient for the plaintiff to produce and tender the note and the securities upon the trial. Spencer v. Drake, 84 App. Div. (N. Y.) 272. As to corporate bonds and coupons, see Williamsport Gas Co. v. Pinkerton, 95 Pa. St. 62. Pleading. — The defense that the paper was not presented within a reasonable time after its issue need not be specially pleaded by an indorser; for, since the obligation of the indorser is condi- tional upon all the steps having been taken by the holder which the statute has prescribed as to presentment and as to notice of non-payment, the burden is on the holder to prove due and timely presentment. Commercial Nat. Bank v. Zimmerman, 185 N. Y. 210. The case last cited overrules German Am. Bank v. Mills, 99 App. Div. (N. Y.) 312, 315, where it was held that this section of the Negotiable Instruments Law creates a statute of limita- 144 THE NEGOTIABLE INSTBUMENTS LAW. tions which must be pleaded. For other cases applying the stat- ute, see Schlesinger v. Schultz, 110 App. Div. (N. Y.) 356; Citi- zens' Bank v. First Nat. Bank, 135 Iowa, 685. Eule where check is negotiated. — The provision of this section, that in the case of a bill presentment may be made within a rea- sonable time after the last negotiation thereof, applies to the in- dorser of a check. Columbian Banking Co. v. Bowen, 134 Wis. 218. In the case cited the court said: " Keeping in mind that the dis- charge from liability above referred to because of unreasonable de- lay after the issuance of a check in presenting it for payment, is of the drawer only, and that this action is against the payee who indorsed the instrument in question without qualification and put it in circulation, we turn to section 1678-1, which provides, as to a bill of exchange payable on demand, which from the foregoing obviously includes a check or draft on a bank of the character of the one in question, 'presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof.' From the foregoing it seems plain that, as regards the payee of such an instrument as we have here, who puts the same in circulation with his unqualii'ed indorsement thereon, and all subsequent parties thereto so indorsing the same, presentment for payment is sufficient, as regards their liability, if made within a reasonable time after the last negotiation. A bill of exchange payable on demand, regardless of its character, put in circulation, so long as its circulating character is preserved may be outstand- ing without impairing the liability of indorsers thereof. Formerly, the length of time within which a bill of exchange might circulate without impairing such liability was more or less uncertain, rendering it very difficult to determine any one case by the de- cision in another. That difficulty was removed, so far as prac- ticable, by the provision that only the time need be considered intervening between the last negotiation and the presentment. That is recognized as a radical change in the law as it formerly existed." See also Singer Manufacturing Co. v. Summers, 143 N. C. 103; Citizens' Nat. Bank v. First Nat. Bank, 135 Iowa, 605; Plover Savings Bank v. Moodie, 135 Iowa, 685. In the case last cited it was said: "The checks were negotiated by the appellee to the Des Moines Savings Bank, and under the statute already quoted (Code Supp. 1902, $§ 3060a-71), reasonable time for pre- sentation and demand is to be reckoned from the last negotiation PRESENTMENT FOE PAYMENT. 145 of the paper. Checks are an almost universal substitute for money. They pass from hand to hand, bank to bank, and city to city, and within reasonable limits, it may be said that no matter how long they remain outstanding, so long as one nego- tiation promptly follows another and the checks are in fact in circulation the statute requires us to hold that the indorser is not legally prejudiced by the consequent delay in their presenta- tion for payment." Negotiation to payee's agent. — Where the payee negotiates the check to his own agent the failure of the agent to present the check is the payee's own neglect. Gordon v. Levine, 194 Mass. 418. Certificate of deposit. — This section is applicable to a certificate of deposit payable upon demand, and presentment of such a cer- tificate within a reasonable time after its issue must be made in order to charge an indorser thereon. Anderson v. First Nat. Bank of Charlton, 144 Iowa, 251. But in the case of a certificate of deposit there is much reason for saying that the parties do not contemplate an immediate demand of payment, and hence an indorsee may not be held to the same degree of diligence in presenting it for payment as the law requires in other cases. Lindsel v. McClellan, 18 Wis. 481. Discharge of drawer by delay. — As respects discharge of the drawer by delay in making presentment, see section 186 and note. § 72. What constitutes a sufficient presentment. — Presentment for payment, to be sufficient, must be made: 1. By the bolder, or by some person authorized to receive payment on bis behalf; 2. At a reasonable hour on a business day; 3. At a proper place as herein defined; 4. To the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where the presentment is made. Evidence of authority to make presentment. — The mere posses- sion of a negotiable instrument which is payable to the order of 10 146 THE NEGOTIABLE INSTRUMENTS LAW. the payee, and is indorsed by him in blank, or of a negotiable instrument payable to bearer, is in itself sufficient evidence of the right to present it and to demand payment thereof. Weber v. Orton, 91 Mo. 680; Sussex Bank v. Baldwin, 2 Harr. (N. J.) 487; Shedd v. Brett, 1 Pick. 401. And payment to such person will always be valid, unless he is known to the payer to have acquired possession wrongfully. Daniel on Negotiable Instruments, section 574. There is no need of a power of attorney or written instru- ment to constitute one an agent for this purpose. Shedd v. Brett, 1 Pick. 401. But the mere possession of an instrument payable to order and not indorsed by the payee is not alone sufficient evi- dence of the authority of an assumed agent to receive payment. Doubleday v. Kress, 50 N. Y. 410. Where a bank holding a note for collection sends it for the same purpose to the bank where it is payable, the latter is authorized to demand payment and give notice of dishonor. Blakeslee v. Hewitt, 16 Wis. 341. Time of day. — Except in cases where the instrument is payable at a bank, the holder has the whole day in which to present the same, the only limitation being that he must present it at a rea- sonable hour, and this may depend upon the circumstances of the case. Salt Springs National Bank v. Burton, 58 N. Y. 430; Farns- worth v. Allen, 4 Gray, 453; Barclay v. Bailey, 2 Camp. 527; Wil- kins v. Jadis, 2 B. & Ad. 188. As late as nine o'clock in the evening has been held to be a reasonable hour. Farnsworth v. Allen, 4 Gray, 453. But it is only when presentment is at the residence that the time is extended into the hours of rest. If it is payable at the place of business it must be presented during those business hours when such places are customarily open, or, at least, while some one is there competent to give an answer. Waring v. Betts, 90 Va. 46, 53. As to when instruments payable at bank must be presented, see section 75. Presentment by bank. — Presentment by a bank having the paper for collection is sufficient. Fowler Paper Co. v. Bert Jones S. B. Co., 183 111. App. 310. Place of presentment. — As to what is a proper place, see next section. Presentment to person on premises.- -As to this, see Cromwell v. Hynson, 2 Camp. 596; Phillips v. Astberg, 2 Taunt. 206. PUESENTMENT KOE PAYMENT. 147 § 73. Place of presentment. — Presentment for pay- ment is made at the proper place: 1. Where a place of payment is specified in the in- strument and it is there presented; 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; 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; 4. In any other case if presented to the person to make payment wherever he can be found, or if pre- sented at his last known place of business or residence. Address of indorser. — For a case applying this section, sen Lankofsky v. Raymond, 217 Mass. 98. Paper payable at 'branch bank. — The words in this section "a place of payment" do not mean an individual, a corporation or an institution, but the place itself; and hence, where paper is made payable at one of several branches maintained by a bank or trust company in the same city or county, it must be presented at that branch, and presentment at the main office will not be sufficient to charge an indorser. Iron Clad Mfg. Co. v. Sackin, 129 App. Div. (N. Y.) 555. Where no place of payment is indicated. — See Gates v. Beecher, 60 N. Y. 518, 522; Holtz v. Boppe, 37 N. Y. 634. A presentment at the maker's usual place of business during business hours, there being no one there to answer, is a sufficient demand to charge the indorser; for the maker is bound to have a suitable person there to answer inquiries, and pay his notes, if there de- manded. Baumgardner v. Reeves, 35 Pa. St. 250; Wallace v. Crilly, 46 Wis. 577. And presentment at such place is sufficient, though it be closed, there being no explanation furnished as to why it is closed. Sulsbacker v. Bank of Charleston, 86 Tenn. 201. If however, the party has abandoned his place of business at the maturity of the paper, but has a residence or other place of business in the city, which could be ascertained by reasonable in- 148 THE NEGOTIABLE INSTRUMENTS LAW. quiry, a presentment at the former place of business would not be sufficient. (Id.) The making and dating of a promissory note at a particular place is not equivalent to making it payable tkere, nor does it supersede the necessity for presentment and demand at the residence or place of business of the maker if it be known, or if by due diligence in making inquiry it could be ascertained. Oxnard v. Varnum, 111 Pa. St. 193. But where a bill of exchange is addressed to the drawee at a particular house, and the same is accepted generally by him, the address indicates the place where it is to be presented for payment, and a presentment there is suf- ficient as against the drawee and indorsers. Pierce v. Struthers, 27 Pa. St. 249, 254; Struthers v. Blake et al., 30 Pa. St. 139. Where a note is dated at a particular place, and no other place is designated as that of its negotiation and payment, the presump- tion is that the maker resides where the note is dated, and that he contemplates payment at that place. Sasscer v. Stone, 10 Md. 98; Ricketts v. Pendleton, 14 Md. 320; Nailor v. Bowie, 3 Md. 251; Clark v. Seabright, 135 Pa. St. 173. But this is pre- sumption only, and if he resides elsewhere within the state when the note falls due, and this is known to the holder, demand must oe made at the maker's residence or place of business. Sasscer v. Stone, 10 Md. 98. When the maker does not reside, and has no place of business, in the state where the note is payable, no demand upon him is necessary in order to charge the indorser. Ricketts v. Pendleton, 14 Md. 320. And if the maker absconds, this will generally excuse the demand; but if he changes his resi- dence within the same jurisdiction, the holder must endeavor to find it and make demand there. Nailor v. Bowie, 3 Md. 251. But where the maker or acceptor waives presentment at his place of business or residence, presentment elsewhere may be sufficient. King v. Holmes, 11 Pa. St. 456; Parker v. Kellogg, 158 Mass. 90. For a case applying the statute, see Bardsley v. Washington Mill Co., 54 Wash. 553. Where person to make payment has removed. — If the maker leaves the state subsequent to the making of the note, present- ment at his former place of business or residence is sufficient Nailor v. Bowie, 3 Md. 251. § 74. Instrument must be exhibited. — The instru- ment must be exhibited to the person from whom pay- PRESENTMENT FOR PAYMENT. 149 ment is demanded, and when it is paid must be de- livered up to the party paying it. Rule at common law. — This section makes no change in the law. See Ocean Nat. Bank v. Fant, 50 N. T. 474, 476 ; Smith v. Rock- well, 2 Hill, 482; Musson v. Lake, 4 How. 262; Freeman v. Boyn- ton, 7 Mass. 483; Draper v. Clemens, 7 Mo. 52. Reason for the rule. — This is requisite in order that the drawer or acceptor may be able to judge (1) of the genuineness of the in- strument; (2) of the right of the holder to receive payment; and (3) that he may immediately reclaim possession upon paying the amount. Waring v. Betts, 90 Va. 46, 51. Where payment refused. — Demand of payment without actual exhibition of the note is sufficient to bind the indorser where the maker does not demand to see the note, but refuses payment on other grounds. Legg v. Viman, 165 Mass. 555; Waring v. Betts, 90 Va. 46; Lockwood v. Crawford, 18 Conn. 361; Fall River Union Bank v. Willard, 5 Metcalf, 216. Tender of collateral security. — Where the note is secured by collaterals the maker is entitled to require that they be delivered with the note ; and if he insists upon it, they must be tendered with the note or the demand of payment will not be sufficient. Ocean Nat. Bank v. Fant, 50 N. Y. 474. Certificate of deposit. — The usual words in a certificate of de- posit by which it is made payable ' ' upon the return of this certifi- cate properly indorsed," add nothing to its provisions, since there is always an implied obligation that the paper will be returned upon payment. Thompson v. Farmers' Bank, 140 N. W. Rep. (Iowa) 877. Demand over telephone. — As presentment must be made by ac- tual exhibition of the paper, or at least, by some clear indication that the paper is at hand ready to be delivered, a demand over the telephone at the place specified in the instrument is not sufficient. Gilpin v. Savage, 201 N. Y. 167. Request for payment. — An informal request for the payment of a demand note, not intended as a formal presentment, is insuffici- ent. State of N. Y. Nat. Bank v. Kennedy, 145 App. Div. (N. Y.) 669. 150 THE NEGOTIABLE INSTRUMENTS LAW. § 75. Presentment where instrument payable at bank. — 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 sufficient. Variant readings. — In Nebraska all after the words " banking hours " is omitted. Rule at common law. — This section makes no change in the law. See Salt Springs National Bank v. Burton, 58 N. Y. 430; Bank of Syracuse v. Hollister, 17 N. Y. 46 ; Bank of Utica v. Smith, 18 Johns. 230; Parker v. Gordon, 7 East. 387; Garnett v. Woodcock, 1 Starkie, 475 ; Eeed v. Wilson, 41 N. J. Law, 29 ; Waring v. Betts, 90 Va. 46; Shepard v. Chamberlain, 8 Gray, 225. What are banking hours. — What will constitute banking hours within the meaning of the statute has reference to the general cus- tom of the place where the transaction occurs. Columbian Bank- ing Co. v. Bowen, 134 Wis. 218. Thus, where presentment was made to a Chicago bank between three and six o'clock in the after- noon, and it appeared that the business day of the bank continued after the close of clearing-house transactions, so as to enable banks holding paper for collection to present those items which had been refused payment through the clearings, it was held that the pre- sentment satisfied the requirements of the statute. To the same effect, see also Citizens' Central Bank v. New Amsterdam Nat. Bank, 128 App. Div. (N. Y.) 554; Columbia-Knickerbocker Trust Co. v. Miller, 156 Id. 810; s. c. 215 N. Y. 191. Where paper is lodged with bank. — When a note is made pay- able at a bank, it is a sufficient presentment, if the note is actually in the bank at maturity ready to be delivered upon payment. De La Vergne v. Globe Printing Co., 148 Pac. Rep. (Colo.) 922; Dky- man v. Northridge, 1 App. Div. (N. Y.) 26; Hollowell v. Curry, 41 Pa. St. 322. Bank custom. — As to bank customs, see Grand Bank v. Blanch- urd, 23 Pick. 305, 306; Mechanics' Bank v. Merchants' Bank, 6 Mete. 13, 24; Boston Bank v. Hodges, 9 Pick. 420; People's Bank PRESENTMENT FOR PAYMENT. 151 y. Keech, 26 Md. 521. But now that the statute prescribes the rules as to presentment, these matters can no longer be governed by custom; certainly not, if the custom conflicts with the statute. Where bank has been closed. — Under the statute, paper payable at a bank may be presented there though the bank is closed and in the hands of a receiver, and a demand upon the receiver person- ally is not necessary. Schlesinger v. Schultz, 110 App. Div. (N. Y.) 356. See also Berg v. Abbott, 83 Pa. St. 177. But compare Hutchison v. Crutcher, 98 Tenn. 421, where it was held that, when a national bank has been placed in the hands of a receiver, paper payable at the bank should be presented at the office of the receiver. See section 73, subdivision 1. How presentment made. — Where a note is made payable at bank it is sufficient that it be presented there during banking hours, and it need not remain at the bank during all of the day of ma- turity. Archuleta v. Johnston, 53 Colo. 393. But compare Ger- man-Am. Bank v. Millman, 31 Misc. (N. Y.) 87. Where name of bank not clearly specified. — Where a note dated at a particular place is payable at " The First National Bank," the place of payment is the First National Bank of that place, and presentment should be made there. Finch v. Calkins, 183 Mich. 298. But it has been held that the office of a private banker is not a bank within the terms of a note made payable at "any bank in Boston." Way v. Butterworth, 108 Mass. 509. When suit may be commenced. — The authorities are not agreed upon the point as to the precise time when suit may be brought on a dishonored note payable at a bank, some holding that it cannot be brought until the day after its dishonor, others that it may be brought at any time after the expiration of business hours on the day it is payable, and others still that it may be commenced as soon as payment is refused on that day. Citizens' Bank v. Lay, 80 Va. 436, 440; Church v. Clark, 21 Pick. 309; Blackman v. Nearing, 43 Conn. 60; Humphreys v. Sutcliffe, 192 Pa. St. 336; Hardon v. Dixon, 77 App. Div. (N. Y.) 241. Kentucky statute. — The Negotiable Instruments Law repealed the former Kentucky statute which provided that a note to be nego- tiable should be payable and negotiable at a bank in the state. Gahren v. Parkersburg Nat. Bank, 157 Ky. 266. 152 THE NEGOTIABLE INSTRUMENTS LAW. § 76. Where person primarily liable is dead.— Where the person primarily liable on the instrument is dead, and no place of payment is specified, present- ment for payment must be made to his personal repre- sentative if such there be, and if, with the exercise of reasonable diligence, he can be found. Proof of death. — But there must be competent and legal proof of his death, and that the party upon whom the demand was made was such representative; the statement of these facts in the pro- test is not prima facie proof thereof. Weems v. Farmers' Bank, 15 Md. 231. Evidence as to reasonable diligence. — As to what evidence will justify a finding that the holder could not, with reasonable diligence, make presentment to the administrator of the deceased maker. See Eeed v. Spear, 107 App. Div. (N. T.) 144. Necessity for giving notice. — The fact that the holder is ex- cused from making presentment under this section does not relieve him from the duty of giving notice of dishonor to the indorser. Reed v. Spear, 107 App. Div. (N. Y.) 144. § 77. Presentment to persons liable as partners. — 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. Rule at common law. — This section makes no change in the law. See Gates v. Beecher, 60 1ST. Y. 518; Cayuga County Bank v. Hunt, 2 Hill, 635; Crowley v. Barry, 4 Gill, 194; Fourth Nat. Bank v. Henschuk, 52 Mo. 207. § 78. Presentment to joint debtors. — 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. PRESENTMENT FOE PAYMENT. 153 Variant readings. — In North Carolina the word " parties " ifl substituted for "partners." This is evidently an error in en- grossing. Rule at common law. — This section does not change the law. See Gates v. Beecher, 60 N. Y. 518, 523 ; Union Bank v. Willis, 8 Mete. 504; Arnold v. Dresser, 8 Allen, 435; Willis v. Green, 5 Hill, 232; Benedict v. Schmieg, 13 Wash. 476. Where presentment to all is impracticable. — In some cases pre- sentment to all the parties primarily liable will be impracticable, but such cases are covered by section 82. Suits where liability is joint and several. — The holder of a joint and several note may sue one maker alone upon one cause of action arising out of the note, and all makers generally upon another such cause of action. Davis v. Schmidt, 126 Wis. 461. § 79. When presentment not required to charge the drawer. — 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. Expectation that paper will be paid. — Presentment is not dis- pensed with merely because the drawer has no funds in the hands of the drawee. Life Insurance Company v. Pendleton, 112 U. S. 708; Dickens v. Beal, 10 Pet. 572; Welch v. B. C. Taylor Mfg. Co., 82 HI. 581; Kimball v. Bryan, 56 Iowa, 632; Kingsley v. Eob- inson, 21 Pick. 327. It is sufficient if the drawer had a reasonable expectation that the bill would be paid; or if there was an agree- ment between him and the drawee that the latter should accept, or a course of dealing between them by which the drawee was accus- tomed to accept without reference to the state of the mutual ac- count. See cases cited above. Presentment of a check is excused where the making of the check was a fraud upon the part of the drawer, he having no funds in the bank, and no ground for a rea- sonable expectation that it would be paid. Beaureguard v. Knowl- ton, 156 Mass. 395, 396. § 80. When presentment not required to charge the indorser. — Presentment for payment is not required m 154 THE NEGOTIABLE INSTRUMENTS LAW. 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. Variant readings. — In Illinois the words " and he has no reason to expect that the instrument will be paid if presented " are omitted. Where indorser promises to pay. — Thus, where the note is made for the accommodation of the indorser, and he promises the maker to " take care of it," presentment and notice of dishonor are not necessary. Dillon v. Bron, 150 Pac. Eep. (Kans.) 553. See also Belch v. Roberts, 177 S. W. Rep. (Mo. App.) 1062; Luckenbach v. McDonald, 184 Fed. Rep. 184 § 81. When delay in making presentment is excused. — 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. Rule at common law. — This section makes no change in the law. See Windham Bank v. Norton, 22 Conn. 213; Pier v. Heinrich- soffen, 67 Mo. 163. In these cases the delay was caused by mis- carriage in the mail. See section 105. Sickness as an excuse. — Sickness of the holder of the note is not an excuse for the failure to present it at the proper time, un- less it was not only sudden, but so severe as not only to prevent him from making the presentment and giving notice of non-pay- ment himself, but from employing another person to do it; and then it must be shown that the proper steps were taken as soon as the disability was removed. Wilson v. Senier, 14 Wis. 380. Question of law or fact. — Where the facts are not disputed the question of due diligence is one of law for the court; but if there is a dispute as to the facts, the question is for the jury. Belden v. Lamb, 17 Conn. 451. PRESENTMENT FOE PAYMENT. 155 § 82. When presentment may bs dispensed with. — 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 ficitious person; 3. By waiver of presentment express or implied. Reasonable diligence — Burden of proof. — The burden is upon the holder to show that due diligence was used. Eaton v. McMahon, 42 Wis. 484. Duty to inform notary. — It is the duty of a holder to give the notary information as to the residence of the drawer and indorser; and if this is unknown to the holder, he must inquire of those whose names are upon the note or bill as to the residence which he does not know. If there are none such, he must use due dili- gence to ascertain them. It will not do for the holder to put the note or bill in the hands of the notary at the place where it was drawn without furnishing him any information as to the residence of the maker, or that of the indorser, and then for the notary, without inquiry from him, to return the note without demand or notice. The holder is, of all persons, the one most likely to know the place of residence of those to whom he looks for payment, and due diligence requires that he should give the information to his agent, whom he employs to make demand from the maker and give notice to the indorser; or, if he neglects to do so, that the agent should inquire of him where the parties reside. Smith v. Fisher, 24 Pa. St. 222. Question of law or fact. — When the facts are undisputed, the question of diligence is for the court. Smith v. Fisher, 24 Pa. St. 222 ; Wheeler v. Field, 6 Mete. 290. Insolvency of maker or acceptor. — Presentment is not dispensed with by the insolvency of the maker or acceptor. Eeincke v. Wright, 93 Wis. 368; Hawley v. Jette, 10 Oregon, 31; Bensonhurst v. Wilby, 45 Ohio St. 340; Jackson v. Richards, 2 Caines, 343; Arm- strong v. Thurston, 11 Md. 148. Waiver. — The waiver may be made either during the currency of the note or after its maturity. Power v. Mitchell, 7 Wis. 161. And evidence of contemporaneous facts and circumstances, at the 156 THE NEGOTIABLE INSTRUMENTS LAW. time of the transaction, may be shown in evidence, in order to as- certain whether or not a waiver was intended. Baumeister v. Kuntz, 53 Fla. 340. The waiver may be made either verbally or in writ- ing. Smith v. Lownsdale, 6 Oregon, 78. Nor is it necessary that the waiver should be direct and positive. It may result from im- plication and usage, or from any understanding between the par- ties which is of a character to satisfy the mind that a waiver is in- tended. Cady v. Bradshaw, 116 N. T. 188, 191. The waiver must be clearly established, however, and will not be inferred from doubt- ful or equivocal acts or language. Boss v. Hurd, 71 N. T. 14; Worley v. Johnson, 60 Fla. 295. But any language is sufficient, which is calculated to induce the holder to forbear taking the neces- sary steps to charge the indorser. Torbert v. Montague, 38 Colo. 325 ; Moyer & Brothers' Appeal, 87 Fa. 129 ; Boyd v. Bank of Toledo, 32 Ohio St. 526; Worley v. Johnson, 60 Fla. 295. Where the in- dorser requests the holder to extend the time of payment and prom- ises to let his name remain on the instrument, this will amount to a waiver of presentment and notice of non-payment. Cady v. Brad- shaw, 116 N. T. 188, 191, 192. So, a telegram sent to the collect- ing bank requesting it to pay the note and save protest and draw, in reply to an inquiry made of the firm by such bank, is a suffici- ent waiver. Seldner v. Mount Jackson National Bank, 66 Md. 488. So, where an indorser admits his liability at the time of tie maturity of the note and accompanies such admission with an offer to " arrange the matter " with the holders, and thereafter by his conduct shows that he regards himself as liable, and asks for indul- gence. Moyer & Brothers' Appeal, 87 Pa. St. 129. So, where a note a short time before the day of its maturity, is presented to an indorser, and the latter then promises that if the note is suffered to run he will pay it whenever payment is called for. Hale v. Dan- forth, 46 Wis. 554. So, where, in response to inquiry by the holder, the indorser told him that it would be of no use to call upon the maker. Barker v. Parker, 6 Pick. 80. And so, where the president of a corporation who was an indorser upon its note participated in the act which made it impossible for the corporation to pay. O'Bannon Co. v. Curran, 129 App. Div. (N. Y.) 96. As to waiver where the maker has transferred all his property to the indorsee, see Brandt v. Mickle, 26 Md. 436; Mechanics' Bank v. Griswold, 7 Wend. 165 ; Moore v. Alexander, 63 App. Div. (N. T.) 100 ; Brown v. Maffey, 15 East. 222 ; Bond v. Farnham, 5 Mass. 170. For cases construing waivers see Parr v. City Trust Company, 95 Md. 291, PRESENTMENT FOE PAYMENT. 157 800-301; Toole v. Crafts, 193 Mass. 110; Baumeister v. Kuntz, 53 Fla.340. Statute of Frauds. — An agreement to waive demaiid and notice is not within the statute of frauds; it is not a new contract, but only a waiver, absolutely or in part, of a condition precedent to lia- bility. Taunton Bank v. Eichardson, 5 Pick. 436; Barclay v. Weaver, 19 Pa. St. 396; Power v. Mitchell, 7 Wis. 159, 166. Consideration. — From the nature of the indorser's contract no new consideration is required to support the waiver given before or after the maturity of the paper. Burgettstown Nat. Bank v. Nill, 213 Pa. St. 456. Pleading. — The facts constituting the waiver must be specifically pleaded. Galbraith v. Shepard, 43 Wash. 698. And proof of waiver may not be given under an allegation of due presentment. Baer v. Hoffman, 150 App. Div. (N. Y.) 473. Necessity for waiver of presentment. — As the indorser is liable Only upon two distinct conditions, viz. : (1) That due presentment be made and (2) that due notice of dishonor be given, a waiver of the one is not a waiver of the other. Hall v. Crane, 213 Mass. 326; Berkshire Bank v. Jones, 6 Mass. 524; Low v. Howard, 11 Cush. 268, 270; Baer v. Hoffman, 150 App. Div. (N. Y.) 473. But see section 111. § 83. When instrument dishonored by non-payment. ■ — The instrument is dishonored by non-payment when: 1. It is duly presented for payment and payment is refused or cannot be obtained; or 2. Presentment is excused and the instrument is overdue and unpaid. § 84. Right of recourse to parties secondarily liable. — Subject to the provisions of this act, when the in- strument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon, accrues to the holder. Nature of liability. — When the indorser's liability has bean fixed by demand and notice of dishonor, he becomes an independ- 158 THE NEGOTIABLE INSTRUMENTS LAW. ent and principal debtor, and does not stand in the position of a mere surety. Curtis v. Davidson, 215 N. Y. 395; German- Ameri- can Bank v. Niagara Cycle Co., 13 App. Div. (N. Y.) 450; First Nat. Bank v. Wood, 71 N. Y. 405, 411. Where paper secured by collaterals. — Though the holder has re- ceived collateral from the maker, the law implies no contract to proceed on the collaterals before suing the indorser. Buck v. Freehold Bank, 37 N. J. Law, 307. Conditional guaranties. — The section does not change the law as to conditional guaranties, as, for example, a guaranty of the collectibility of the instrument, in which case there is no right of recourse against the guarantor until the holder has first made proper effort to collect from the principal debtor, for in such case the terms of the express contract exclude the idea of an intention to incur the liability prescribed by the statute. Cowles v. Peck, 55 Conn. 251; Summers v. Barrett, 65 Iowa, 292. § 85. Time of maturity. — Every negotiable instru- ment is payable at tbe time fixed therein without grace. When the day of maturity falls upon Sunday, or a holi- day, the instrument is payable on the next succeeding business day. Instruments falling due or becoming payable on Saturday are to be presented for payment on the next succeeding business day, except that in- struments 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. Variant readings. — In Rhode Island the words " except sight drafts " are interpolated after the words " every negotiable in- strument." In New Hampshire, at the end of the first sentence, the following is added : ' ' except that three days of grace shall be allowed upon a draft or bill of exchange made payable within this commonwealth at sight, unless there is an express stipula- tion to the contrary. " In Colorado the last sentence reads : "In- struments 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 PRESENTMENT FOR PAYMENT, 159 succeeding business day, except that instruments payable on de- mand may, at the option of the holder, be presented for payment during reasonable hours on the part of such day which is not a holiday." In Arizona, Kentucky and Wisconsin, the third sent- ence is omitted, and in Vermont all of the third sentence down to the words " instrument payable on demand." In Iowa a section has been added to the statute as follows: "A demand made on any one of the three days following the day of maturity of the instrument, except on Sunday or a holiday, shall be as effectual as though made on the day on which demand may be made under the provisions of this act, and the provisions of this act as to notice of non-payment, non-acceptance, and as to protest shall be ap- plicable with reference to such demand as though the demand were made in accordance with the terms of this act; but the pro- visions of this section shall not be construed as authorizing de- mand on any day after the third day from that on which the in- strument falls due according to its face." In Massachusetts the section has been amended to read as follows: " Every negotiable instrument is payable at the time fixed therein without grace, ex- cept that three days of grace shall be allowed upon a draft or bill of exchange made payable within this commonwealth at sight, un- less there is an express stipulation to the contrary. Where the day of maturity falls upon a Saturday, Sunday or a holiday, the instrument is payable on the next succeeding business day which is not a Saturday. 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; provided, however, that no person receiving any check, draft, bill of exchange or promissory note payable on demand, shall be deemed guilty of any neglect or omission of duty, or incur any liability, for not presenting for payment or acceptance or collec- tion such check, draft, bill of exchange or promissory note on a Saturday; provided also, that the same shall be duly presented for payment or acceptance or collection on the next succeeding business day." (Acts, 1910, ch. 417.) In North Carolina the fol- lowing section is inserted: "All bills of exchange payable within the state, at sight, in which there is an express stipulation to that effect, and not otherwise, shall be entitled to days of grace as the same are allowed by the customs of merchants in foreign bills of exchange payable at the expiration of a certain period after date on sight; provided, that no days of grace shall be allowed on any 11)0 THE NEGOTIABLE INSTBUMENTS LAW. bill of exchange, promissory note or draft payable on demand." In Arkansas, Florida, Indiana, Kansas, Maryland, Michigan, Min- nesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Utah, Virginia and Washington the words " or becom- ing payable " have been interpolated after the words " Instru- ments falling due " in the third sentence. In the draft of the statute published by the Commissioners on Uniform State Laws, the following note is appended to this section: " The words in brackets [or becoming payable] have been inserted for the sake of clearness. They are found in the New York, Missouri and Virginia Acts. This section having twice used the word ' payable ' then uses the words ' falling due.' This has raised doubts in the minds of some where Friday is a legal holiday and paper matures on Friday. These words are inserted to remove any possible doubt. In Crawford on Negotiable Instruments (3d Ed. 1908), 110-1, it is argued that there is no doubt, and that it is unneces- sary to insert these words. Properly interpreted, there is no neces- sity for inserting these words, but as legislation is cheaper than litigation, it is thought wise for those states, which have not yet enacted this Act to insert these words." In Massachusetts and New Hampshire the words interpolated are, " or payable." § 86. How time computed. — 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. Origin of the section. — This section was adapted from sections 26 and 27 of the New York Statutory Construction Law. Computation of time. — A note dated November 8th and payable 12 months after date, matures on November 8th of the following year, and a presentment on November 9th is not timely. Lewy v. Winkelson, 135 La. 105. § 87. Instrument payable at bank — effect of.— Where the instrument is made payable at a bank it ia PRESEN1MENT FOR PAYMENT. 161 equivalent to an order to the bank to pay the same for the account of the principal debtor thereon. Variant readings.— In Illinois, Nebraska and South Dakota, this section is omitted. In Missouri, by an amendment made in 1909, the following was added at the end of the section: " But where the instrument is made payable at a fixed or determinable future time, the order to the bank is limited to the day of ma- turity only." In Minnesota the word " not " is interpolated, so that the section reads " shall not be equivalent," etc. Rule at common law. — Prior to the statute there was some con- flict in the decisions as to the authority of a bank to pay a note or acceptance made payable there. The rule adopted in the stat- ute was sustained by the weight of authority; and is also the rule which is most convenient in practice. It is supported by the fol- lowing decisions: Aetna Nat. Bank v. Fourth Nat. Bank, 46 N. Y. 82; Commercial Bank v. Hughes, 17 Wend. 94; Commercial Nat. Bank v. Henninger, 105 Pa. St. 496 ; Bedford Bank v. Acoarn, 125 Ind. 582; Home Nat. Bank v. Newton, 8 Bradwell. 563; contra: Grissom v. Commercial Bank, 87 Tenn. 350. In Penn- sylvania it was held that where a bank is the holder of a note payable at the banking house, and upon its maturity the maker has a cash deposit in such bank exceeding the amount of the note, which deposit is not specially applicable to a particular purpose, the bank is bound to charge up the amount of the note against the deposit. In such cases the note is in effect a draft on the bank in favor of the holder, and in discharge of the indorser. German National Bank v. Foreman, 138 Pa. St. 474, 479; Com- mercial National Bank v. Henninger, 105 Pa. 496. But it way also held in that state that while a bank which has discounted a promissory note may appropriate to the payment of the noto funds in its hands belonging to any party to the note, when pay- ment is not made at the time and place named, yet it is not bound to do so as to any party except the makers. Mechanics' and Traders' Bank v. Seitz, 150 Pa. St. 632. Where paper is not lodged with bank. — Where a note is made payable at a bank the maker may tender payment at the bank, and thus avoid default and stop the running of interest; but, if the paper is not lodged there, the fact that it is payable there does 11 162 ^HB NEGOTIABLE INSTRUMENTS LAW. not make the bank the agent of the holder to receive payment Stansbury v. Emberg, 128 Tenn. 104; Griswold v. Davis, 126 Tenn. 229. The statute has not changed the law in this respect. Cheney v. Libby, 134 U. S. 68; Hills v. Place, 48 N. Y. 520; Adams v. Hackensaek, 44 N. J. L. 638. Difference between note and check. — This section was intended to settle the vexed question of the bank's authority, without spe- cific directions, to pay the notes and acceptance of its customers made payable at the bank, and it was not meant to assimilate such notes and acceptance to checks in such way as to impose upon the holder the duty of presenting them as required by sec- tion 186; but as regards the maker or acceptor the provision of section 70 applies, that presentment for payment is not neces- sary in order to charge the person primarily liable on the instru- ment. Binghamton Pharmacy v. First Nat. Bank, 131 Tenn. 711. Hence, the maker cannot defend upon the ground that the holder's neglect to present the paper resulted in loss to the maker. Id. But in Baldwin's Bank v. Smith, 215 N. Y. 76, Miller, J., who wrote the prevailing opinion, said: "It is incumbent on the holder of the paper to secure payment, and loss resulting from his neglect should fall upon him, not on the drawer, who has no further duty to perform. I am unable to perceive why the same reason does not hold good in the case of a note payable at a bank where the maker has funds to meet it at maturity, especially since such a note is by statute made the equivalent of a check. To the extent that he has appropriated his credit, he is not called upon to look after it, but discharges his duty by keeping his account good. None of the cases in this jurisdiction holding that the maker of a note payable at a bank is not exonerated by the holder's failure to present it for payment involved the question of a loss resulting from such failure. I find nothing in any of them except the dictum in the Indtg case to the effect that the loss in such case falls on the maker." A ruling upon this point, however, was not necessary to the decision of the case, and the observations quoted may be regarded as a mere dictum. § 88. What constitutes payment in due course.— Payment is made in due course when it is made at or after the maturity of the instrument to the holdpr thereof in good faith and without notice that his title is defective. PRESENTMENT FOR PAYMENT. 163 Payment before maturity. — Payment before the day is a de- fense which binds only the party receiving payment and those who stand in his shoes. Watson v. Wyman, 161 Mass. 96, 99. Authority to receive payment — Possession of paper. — It is the duty of the maker or acceptor to require a production of the paper before paying the same and possession is generally the only adequate evidence upon which he has any right to rely. Loizeaux v. Fremder, 123 Wis. 193; Hayden v. Speakman, 150 Pac. Rep. (N. M.) 292; Adair v. Lenox, 15 Oregon, 489. The rule is that if a bill or note be paid at maturity in full, by the ac- ceptor or maker, or other party liable to a person having a legal title in himself by indorsement, and having the custody and pos- session of the bill ready to surrender, and the party paying has no notice of any defect of title or authority to receive, the pay- ment will be good. But if upon such payment the holder has not the actual possession of the paper ready to be delivered, and does not in fact surrender it, but gives a receipt or other evidence of the payment, and it turns out that the party thus receiving had not a good right and lawful authority to receive and collect the money, but that another person has such right, the payment will not discharge the party paying, but will be a payment in his own wrong. Wheeler v. Guild, 20 Pick, 545, 553; Trustees of the I. I. Funds v. Lewis, 34 Fla. 424, 428. Concerning this rule, the Su- preme Court of Wisconsin said in a recent case: " 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 weakened or confused. The holder can always be safe by retaining the instrument in his pos- session; the debtor, by refusing payment without actual presenta- tion. It is justified in application to negotiable paper distinctively 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 on one day is likely to have changed on the next. Of the probability of such change the negotiability of the instrument is a continual warning." Loizeaux v. Fremder, 123 Wis. 193, 198. Such rule applies generally to all negotiable paper independently of the existence of any mortgage or other security. Marling v. Nommensen, 127 Wis. 363. Payment made to the original holder, after indorsement and delivery of the paper even as collateral security, is no defense to a suit on tbe note by 164 THE NEGOTIABLE INSTRUMENTS LAW. the indorsee, although the payment was made by the maker with- out notice or knowledge of the transfer. Gosling v. Griffin, 85 Term. 737. But while a person not in the actual possession of ne- gotiable paper is presumed from that fact alone to have no au- thority to receive payment thereon, yet such presumption may be rebutted and overcome by evidence showing actual authority. Swengle v. Wells, 7 Ore. 222. The original payee of a negotiable note in possession thereof, is presumed to be the owner, and has ostensible authority to receive payment, although the note bears the blank indorsement of such payee. Home Savings Bank v. Stewart, 78 Neb. 624. NOTICE OF DISHONOR. 165 AETICLE VIII. Notice of Dishonor. Section 89. To whom notice of dishonor must be given. 90. By whom given. 91. Notice given by agent. 92. Effect of notice given on behalf of holder. 93. Effect where notice is given by party en- titled thereto. 94. When agent may give notice. 95. When notice sufficient. 96. Form of notice. 97. To whom notice may be given. 98. Notice where party is dead. 99. Notice to partners. 100. Notice to other joint parties. 101. Notice to bankrupt. 102. Time within which notice to be given. 103. Where parties reside in same place. 104. Where parties reside in different places. 105. Miscarriage in mails — notice deemed to have been given. 106. Deposit in post-office — what constitutes. 107. Notice to antecedent parties — time of. 108. Where notice must be sent. 109. Waiver of notice. 110. Parties affected by waiver. 111. Waiver of protest. 112. When notice dispensed with. 113. When delay in giving notice is excused. 114. When notice need not be given to drawer. 115. When notice need not be given to indorser. 166 THE NEGOTIABLE INSTRUMENTS LAW. Section 116. Where notice of non-acceptance has been given. 117. Omission to give notice of non-accept- ance — subsequent holder. 118. Protest authorized in all cases of dis- honor — when required. § 89. To whom notice of dishonor must be given. — Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indor- ser to whom such notice is not given is discharged. Accommodation indorser. — Under the statute an accommoda- tion indorser is entitled to notice of dishonor the same as any other indorser. Perry v. Taylor, 148 N. C. 362; Houser v. Fays- soux, 168 N. C. 1. Accommodation maker. — The fact that the note was made for accommodation does not entitle the maker to notice of dishonor. First Nat. Bank v. Williams, 164 Ky. 143. Where persons signing on back of paper are joint makers. — If persons whose signatures appear on the back of the paper became parties under an agreement that they are to be equally liable as joint makers, they are not entitled to notice of dishonor. Mercan- tile Bank v. Busby, 120 Tenn. 652. But see note to section 68. Officers and directors indorsing for accommodation. — That ac- commodation indorsers of a note made by a corporation are direc- tors of the corporation and constitute a majority of the board does not dispense with the necessity for giving them notice of dishonor. Houser v. Fayssoux, 168 N. C. 1. Where officer of discounting bank is indorser. — Where an officer of a bank is an indorser upon paper held by the bank he is entitled to notice of dishonor, and the failure to give him notice will be a good defense to him when sued upon the paper, unless it was his duty as such officer to give notice of dishonor on behalf of the bank. First Nat. Bank of Louisville v. Bickel, 154 Ky. 11; Frazee v. Phoenix Nat. Bank, 161 Ky. 175. NOTICE OF DISHONOR. 167 Duty of collecting bank. — A bank holding for collection a note which has been dishonored is required to give notice to only its own principal, and he in turn to give notice to his principal, and so on down the line of indorsers. Gleason v. Thayer, 87 Conn. 790; Shea v. Vahey, 215 Mass. 80. Burden of proof. — The burden of proving that due notice was given is on the holder. Marks v. Boone, 24 Fla. 177. Where holder has election. — Where a note gives the holder an option to declare the whole sum due upon default in the payment of interest, he must allege and prove presentment and notice of dishonor in order that he may hold an . indorser. Galbraith v. Shepard, 43 Wash. 698. Anticipating dishonor. — The cashier of a bank, when informed of an outstanding check, after it had been placed in the mails for transmission to the drawee for payment, stated to the cashier of the bank remitting the check that it would be paid if the drawer had sufficient funds when the check was received, otherwise not: Held, that such information did not constitute a dishonor of the check, so as to require the holder to give notice to the indorser before payment had, in fact, been refused on the receipt of the check by the drawee. Citizens' Bank v. First Nat. Bank, 135 Iowa, 605. Guarantors. — The rule as to notice does not apply to guaran- tors. Brown v. Curtiss, 2 N. Y. 225; Allen v. Rightmere, 20 Johns. 365; Breed v. Hillhouse, 7 Conn. 523; Roberts v. Haw- kins, 70 Mich. 566; Hungerford v. O'Brien, 37 Minn. 306. And proceedings against the maker are necessary only where there is a guaranty of collection. Brown v. Curtiss, supra. § 90. By whom given. — 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. Who may give notice. — It was once held that no party could give a valid notice unless he was the holder at the time. Tindal 168 THE NEGOTIABLE INSTRUMENTS LAW. v. Brown, 1 Term Rep. 167. But this doctrine, after having been followed in other cases (Ex parte Barclay, 7 Ves. 597; Stewart v. Kennett, 2 Camp. 177), was expressly overruled in the case of Chapman v. Keane (3 Adol. & Ellis, 193), in which most of the previous decisions were reviewed. But notice by a stranger is not sufficient. Lawrence v. Miller, 16 N. Y. 235, 237; Chanoine v. Fowler, 3 Wend. 173; Brailsford v. Williams, 15 Md. 151. And a party who has been discharged by laches, and cannot in any event bring an action on the instrument, is deemed a stranger for this purpose. Harrison v. Ruscoe, 15 L. J. Exch. 110; 15 M. & W. 231. A drawee who refuses acceptance cannot give notice. Stan- ton v. Blossom, 14 Mass. 116. § 91. Notice given by agent. — 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. Bank as agent of holder. — Banks as agents for collection have authority to receive and transmit notices on behalf of the owners of the paper. West River Bank v. Taylor, 34 N. Y. 128, 130; Colt v. Noble, 5 Mass. 167; Haynes v. Birks, 3 Bor. & Pul. 599; Robson v. Bennett, 2 Taunt. 388. Notary as agent. — An agent in giving notice represents and acts on behalf of his principal, and this, though he may be a notary and act in his official character. Lawrence v. Miller, 16 N. Y. 235, 238. Maker as agent of holder. — While, of course, the maker cannot give notice in his own behalf, he may do so as agent of the holder. Traders' Nat. Bank v. Jones, 104 App. Div. (N. Y.) 433. In the case cited a firm executed two promissory notes payable to the order of a member of the firm, which notes were first indorsed by J. and then by the firm, and were delivered before maturity to the plaintiff bank. The notes not being paid at maturity, notice of protest was served upon the firm, and with it, under separate cover, addressed to J in care of the firm, was a notice of protest directed to J, which the firm were requested to forward to him; and the other member of the firm immediately mailed such notice to J. Held, that while J was presumptively an accommodation in- dorser for the firm, and while the firm could not, therefore, in NOTICE OF DISHQNOE. 169 their own behalf, give him a valid notice of protest, they could do so on behalf of the bank, and as its agents. Notice on behalf of wrong person. — A notice made out by a notary public and signed by mistake with the name of the maker of the note instead of with his own name, without the authority of the maker, is insufficient. Cabot Bank v. Warner, 92 Mass. 522. § 92. Effect of notice given on behalf of holder. — Where notice 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. Duty of holder. — But the holder is not bound to give notice to any one but his immediate indorser. West River Bank v. Taylor, 34 N. Y. 128, 131; Linn v. Horton, 17 Wis. 150, 153. § 93. Effect where notice is given by party entitled thereto. — Where notice is given by or on behalf of a party entitled to give ndtice, it enures for the bene- fit of the holder and all parties subsequent to the party to whom notice is given. § 94. When agent may give notice. — Where the in- strument 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. 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 in- dependent holder. Undue delay by agent. — If the agent has failed to give notice to bis principal in due time, the latter is cut off, though he may thereafter use due diligence in communicating notice to antecedent parties. Eosson v. Carroll, 90 Tenn. 90. 170 THE NEGOTIABLE INSTRUMENTS LAW. Duty of bank receiving paper for collection. — Under this sec- tion, a bank which holds paper for collection, properly discharges its duty to its customer by giving him notice of dishonor in time to enable him to give notice to prior parties. Brill v. Jefferson Bank, 159 App. Div. (N. Y.) 461. § 95. When notice sufficient. — A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communica- tion. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby. Variant readings. — In Kentucky the word " not " after the word " need " is omitted; and the word " written " substituted for " verbal;" and the words " the notice " after the word " vitiate " in the last sentence, are omitted. In North Carolina, also the words " the notice " are omitted. Where notice not signed. — See Bank v. Dibrell, 91 Tenn. 301; Spann v. Baltzell, 1 Fla. 301; Kilgpre v. Bulkley, 14 Conn. 362; Tobey v. Lenning, 14 Pa. St. 483. Misdescription of instrument. — See Grayson County Bank v. Elbert, 143 Ky. 753; Aiken v. Marine Bank, 16 Wis. 679. Where the instrument is misdescribed, the fact that there is no other in- strument to which the notice could be applied may be shown by extrinsic evidence. Cayuga County Bank v. Worden, 6 N. Y. 19. But a notice of protest signed by a notary public, and personally delivered by him to the indorser is not sufficient to charge the latter, where it appears that the notice was addressed to another person than the indorser, and stated that the holder looked to such person for the payment of the note. Marshall v. Sonneman, 216 Pa. St. 65. See also Hermann Lumber Co. v. Bjurstrom, 74 Misc. (N. Y.) 93. § 96. Form of notice. — 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 non-acceptance or non-pay- NOTICE OF DISHONOR. 171 ment. It may in all cases be given by delivering it personally or through the mails. Variant readings.— In Kentucky the words " or mere!" oral " are omitted. Form of the notice. — As respects the form of the notice, this section makes no change in the law. See Second National Bank v. Smith, 118 Wis. 18; Sasser v. Farmers' Bank, 4 Md. 409; Brew- ster v. Arnold, 1 Wis. 264. A notice which omits an essential feature of the note, or misdescribes it, is an imperfect one, but not necessarily invalid. It is invalid only where it fails to give that particular information which it would have given but for its particular imperfection; and even in case the notice in itself bo defective, if, from evidence aliunde of the attendant circumstances, it is apparent that the indorser was not deceived or misled as to the identity of the dishonored instrument, he will be charged. Hodges v. Schuler, 22 N. Y. 114; Artisans' Bank v. Backus, 36 N. Y. 106; Gill v. Palmer, 29 Conn. 57; Howland v. Adrian, 29 N. J. Law, 48; Derham v. Donohue, 155 Fed. Rep. 385. To make the notice defective the variance must be such as that, under the cir- cumstances of the case, it conveys no sufficient knowledge to the indorser of the identity of the particular instrument which has been dishonored. Cayuga County Bank v. Worden, 1 N. Y. 413, 417; Mills v. Bank of U. S., 11 Wheat. 431; Bank of Alexandria v. Swaim, 9 Peters, 33. The notice is not necessarily defective because it is silent as to the date and time of payment, Youngs v. Lee, 12 N. Y. 551, or fails to state that demand of payment was made, Mills v. Bank of U. S., 11 Wheat. 431, or does not state at whose request it is given, nor who is the owner of the note. Shed v. Brett, 1 Pick. 401. The term "protested" when contained in a notice, with the statement that the holder looks to the indorser for indemnity, fairly and necessarily implies that the note or bill has been dishonored. Brewster v. Arnold, 1 Wis. 264. A note is well described when its maker, payee, date, amount and time of payment are stated. A printed notice is sufficient, Cuyler v. Stevens, 4 Wend. 566; Bank of Cooperstown v. Woods, 28 N. Y. 545, and the signature of the notary need not be in writing, but may be printed. Bank of Cooperstown v. Woods, 28 N. Y. 561; Sussex Bank v. Baldwin, 2 Harr. (N. J.), 487. But a notice which is barely enough to put the indorser upon inquiry is not sufficient. 172 THE NEGOTIABLE INSTRUMENTS LAW. Cook v. Litchfield, 9 N. Y. 279, 281. It must reasonably apprise the party of the particular paper upon which he is sought to be charged. Home Insurance Co. v. Greene, 19 N. Y. 518; Dodson v. Taylor, 56 N. J. Law, 11. In the New York case cited the name of the maker was left blank, and it was held that the notice was not sufficient. Notice that a note is unpaid would not necessarily imply that it is dishonored, because the note might remain unpaid, while in fact it may never have been presented to the maker for payment. Hunter v. Van Bomhorst, 1 Md. 504, 510. But such notice might be good if the note is payable at a bank. Id. If the notice indicates that the paper was presented before due, it is not sufficient. Etting v. Schuylkill Bank, 2 Pa. St. 355. The state- ment that the holder looks for payment to the party to whom notice is sent is not necessary; for this is implied from the fact of giving notice, Bank of U. S. v. Carneal, 2 Peters, 543; Mills v. Bank of U. S., 11 Wheat. 431, 436 ; Nelson v. First Nat. Bank, 29 U. S. App. 554; 69 Fed. Rep. 798, 801; 16 C. C. A. 425; Cowles v. Horton, 3 Conn. 523. A certificate of deposit dated January 25, 1904, and due January 25, 1905, was duly presented for payment, and payment refused on January 25, 1905; and thereupon a notice of presentment, demand, and dishonor was sent to, and received by, the indorser. The notice was dated January 25, 1904, when it should have been dated January 25, 1905, and it stated that the demand and dishonor were on the day of the date of the notice, that the certificate was dated January 25, 1905, when it was dated January 25, 1904, and it omitted to recite this clause which was in the certificate, "No interest after six months." — Held, that the notice sufficiently identified the certificate and no- tified the indorser of due presentment, demand and dishonor. Derham v. Donohue, 155 Fed. Rep. 385. See also Wilson v. Peck, 66 Misc. (N. Y.) 179. Question of law or fact. — Where there is no dispute as to the facts, the question of the sufficiency of the notice is a question of law for the court. Cayuga County Bank v. Worden, 6 N. Y. 19. Personal service. — The provision of this section respecting per- sonal service did not change the rule as it previously existed. Where personal service is 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 NOTICE OF DISHONOE. 1T6 Jiave no place of business; but if he be absent, it is not necessary to call a second time, and the notice may, in that avent, be left with any one found in charge, or if there be no one in charge, or no one there, then the giving of notice is deemed to be waived. American Exchange National Bank v. American Hotel Victoria Co., 103 App. Div. (N. Y.) 372, 374. Service by mail. — The rule of the commercial law was well set- tled that if the parties resided in the same place the notice must be personal; that is, must be given to the individual or left at bis domicile or place of business. Sheldon v. Benham, 4 Hill, 129; Brown v. Bank of Abingdon, 85 Va. 95; Boyd's Admr. v. City Savings Bank, 15 Gratt. 501, 505; Bell v. Hagerstown Bank, 7 Gill, 216; Westfall v. Farwell, 13 Wis. 504, 509. But the courts were inclined to restrict the general rule, and established many exceptions to it. Bank of Columbia v. Lawrence, 1 Peters, 578. In the notes to 1 American Lead. Cas. (402) it is said: "It is obvious that the rule requiring personal notice where the parties reside in the same place, has lost its reasonable force and exists only by authority. Instead of undermining it by exceptions that conflict with it in principle and render the subject embarrassing in practice, it would be much better to declare that the rule itself has become obsolete and is abolished." But it cannot properly be said that the rule had become obsolete, having been recognized and acted on in many recent as well as older cases, and having in no case been denied or disregarded. It was, therefore, too firmly established to be abolished by the courts. See Boyd's Admr. v. City Savings Bank, 15 Gratt. 501, 505. In New York, service by mail in such cases was authorized by Laws 1857, Chap. 416. For the construction of the former statute of Wisconsin, see Smith v. Hill, 6 Wis. 154; Westfall v. Farwell, 13 Wis. 504. Notice over telephone. — As under this section, the notice may be "in writing or merely oral," a notice given over the tele- phone may be sufficient. American Nat. Bank v. Nat. Fertilizer Co., 125 Tenn. 328. Certificate of notary. — Where the notary's certificate contains the statement that the indorsers were " duly notified " an indor- ser, to meet the evidence furnished by the certificate, must show that he received no notice, either personally or through the mails. Zollner v. Moffitt, 222 Pa. St. 544. 174 THE NEGOTIABLE INSTRUMENTS LAW. Kentucky statute. — In Kentucky this section and section 95 were amended so as to require that the notice shall be in writing. Grayson County Bank v. Elbert, 143 Ky. 753. As the rule en- acted in the other states was well established by numerous de- cisions, the reason for destroying uniformity, by making this change in the existing law, is difficult to discover. § 97. To whom notice may be given. — Notice of dis- honor may be given either to the party himself or to his agent in that behalf. Notice to agent. — See Fassin v. Hubbard, 55 N. T. 465, 471; Lake Shore National Bank v. Butler Colliery Co., 51 Hun, 63, 68. In Firth v. Thrush, 8 Barn. & Cress. 387, the opinion was expressed that authority to indorse negotiable paper carried with it author- ity to receive notice of its dishonor. And in Persons v. Kruger, 45 App. Div. 187, it was held that a notice of protest may be served upon an agent of the payee and indorser, where the agent has au- thority to make and indorse paper, and has authority to act and has acted as the general agent of the payee in the conduct of his business, and has had full charge of the acts and dealings with the bank at which the paper was discounted and the management of the paper. A notice of non-payment sent to the indorser inclosed under seal and delivered by the messenger to one in the employ- ment of the indorser, with directions not to open it, is insufficient. Paine v. Edsell, 19 Pa. St. 178. § 98. Notice where party is dead. — 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 dili- gence he can be fonnd. If there be no personal repre- sentative, notice may be sent to the last residence or last place of business of the deceased. Notice to personal representative. — See Denninger v. Miller, 7 App. Div. (N. Y.) 409; Bank of Port Jefferson v. Darling, 91 Hun, 236; Shoenberger 's Executor v. Lancaster Savings Institution, 28 Pa. St. 459; Dodson v. Taylor, 56 N. J. Law, 11; Massachusetts Bank v. Oliver, 10 Cush. 557; Merchants' Bank v. Birch, 17 Johns. NOTICE OF DISHONOR. 175 24. See also Boyd's Admr. v. City Savings Bank, 15 Gratt. 501; Smalley v. Wright, 40 N. J. Law, 471; Goodnow v. Warren, 122 Mass. 82; Bealls v. Peck, 12 Barb. 245; Cayuga Co. Bank v. Ben- nett, 5 Hill, 236; Maspero v. Pedesclaux, 22 La. Ann. 227. Notice to last residence, etc., of deceased. — See Goodnow v. War- ren, 122 Mass. 82; Merchants' Bank v. Birch, 17 Johns. 25 Linde- man's Exr. v. Guildin, 34 Pa. St. 54. The mailing of notice of dishonor to an indorser known to be dead, directed to a post office known to be one at which he had not received his mail while liv- ing, is not a good notice of dishonor. Merchants' Bank of Canada • v. Brown, 86 App. Div. (N. Y.) 599. § 99. Notice to partners. — 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. Notice to one partner. — See Hubbard v. Matthews, 54 N. Y. 43, 50; Coster v. Thomason, 19 Ala. 717; Slocomb v. Lizardi, 21 La. Ann. 355; Fourth Nat. Bank v. Henschuh, 52 Mo. 207; Seldner v. Mount Jackson Nat. Bank, 66 Md. 488. But where partners give a promissory note with one of them as maker and the other as in- dorser, the latter is not liable on his indorsement unless he be duly notified of the dishonor of the note. Foland v. Boyd, 23 Pa. St. 476. § 100. Notice to other joint parties. — 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. Rule of common law.— This section does not change the law. See Shepard v. Hawley, 1 Conn. 367; Boyd v. Orton, 16 Wis. 495. For the distinction between parties who are partners and joint partners, see Gates v. Beecher, 60 N. Y. 518, 526. See also Willis v. Green, 5 Hill, 232. But see Sherer v. Easton Bank, 33 Pa. St. 134; Jarnigan v. Stratton, 95 Tenn. 619. For a case applying the statute, see Feigenspan v. McDonnell, 201 Mass. 341. § 101. Notice to bankrupt. — Where a party has been adjudged a bankrupt or an insolvent, or has made an 176 THE NEGOTIABLE INSTRUMENTS LAW. assignment for the benefit of creditors, notice may be given either to the party himself or to his trustee o? assignee. Rule at common law. — In Callahan v. Kentucky Bank, 82 Ky. 231, it was decided that where the indorser had made a voluntary assignment for the benefit of creditors, notice to the assignee would bind the indorser and his estate. And a similar rule was adopted by the Supreme Court of Tennessee in American Nat. Bank v. Junk Bros., 94 Tenn. 634. On the other hand, the Su- preme Court of Ohio, in House v. Vinton, 43 Ohio St., 346, by a majority opinion, declined to adopt this rule, making a distinction between an assignee under a voluntary general assignment and an assignee in bankruptcy. In this latter case, however, there is a strong dissenting opinion by two of the judges of that court, in which the soundness of the rule as announced by the Kentucky court is earnestly insisted upon. § 102. Time within which notice to be given. — No- tice 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. Hour at which notice may be sent. — The holder need not wait until the close of business hours, but may send notice at once. Bank of Alexandria v. Swan, 9 Peters, 33; Lenox v. Roberts, 2 Wheat. 373; Ex parte Moline, 19 Ves. 216; Whitwell v. Brigham,19 Pick. 117; Coleman v. Carpenter, 9 Pa. St. 178. § 103. Where parties reside in same place. — 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; 2. If given at his residence, it must be given before the usual hours of rest on the day following; NOTICE OF DISHONOR. 177 3. If sent by mail, it must be deposited in the post- office in time to reach, him in usual course on the day following. Variant readings. — In Rhode Island, subdivision two reads as follows: " If given at his residence, it must be given before ten o'clock in the evening of the day following." Notice to place of business. — See Adams v. Wright, 14 Wis. 408; Cayuga County Bank v. Hunt, 2 Hill, 236; Marks v. Boone, 24 Fla. 177; Bell v. Hagerstown Bank, 7 Gill, 216; Daniel on Neg. Insts., section 1038. The notice must follow upon the first de- mand. Rosson v. Carroll, 90 Tenn. 90. Notice at residence. — See Phelps v. Stocking, 21 Neb. 444; Darb- ishire v. Parker, 6 East. 8. While service at the place of business must be during business hours, service at the residence is not so regulated. It will be sufficient if made during any of the hours when members of household are attending to their ordinary af- fairs. Adams v. Wright, 14 Wis. 408. If the service is properly made at the place of business or residence, it is immaterial that the party to be notified did not in fact receive the notice. Adams v. Wright, 14 Wis. 408. Notice by mail. — For a case applying this provision of the sec- tion, see. Seigel v. Dubinsky, 56 Misc. (N. Y.) 681. Notice by telegraph. — Notice of the dishonor of a bank check given by telegraph on the second day following the deposit of the check for collection, and immediately after the depositor received notice of such dishonor is good; for under sections 103 and 104 the bank has until the day following to give notice of the dis- honor, and by section 107 the depositor has until the day follow- ing receipt of notice to notify antecedent parties. Jurgens v. Wichmann, 124 App. Div. (N. Y.) 531. § 104. Where parties reside in different places.— 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 12 173 THE NEGOTIABLE INSTEUMENTS LAW. 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 re- ceived in due course of mail, if it had been deposited in the post-office within the time specified in the last subdivision. Variant readings. — In Kansas, Nebraska and Ohio, the words " in next preceding paragraph of this section " are substituted for the words " last subdivision." By what mail to be sent. — Sanderson v. Sanderson, 20 Fla. 292; Rosson v. Carroll, 90 Tenn. 90; Stephenson v. Dickson, 24 Pa. St. 148; Whitwell v. Johnson, 17 Mass. 449. In Smith v. Poillon, 87 N. Y. 590, 597, Earl, J., said: "From a careful examination of all these authorities and many others, it is clear that the law is not precisely settled. It ap- pears that at first it was supposed to be necessary that notice of dishonor should be given by the next post after dishonor, on the same day, if there was one. That rule was found inconveniently stringent, and then it was held that when the par- ties lived in different places, between which there was a mail, the notice could be posted the next day after the dishonor or notice of dishonor. Some of the authorities hold that the party required to give the notice may have the whole of the next day. Some of them hold that when there are several mails on the next day, it is sufficient to send the notice by any post of that day. Other authorities lay down the rule, in general terms, that the notice must be posted by the first practical and convenient mail of the next day; and that rule seems to be supported by the most authority in this state. What is a practical and convenient mail depends upon circumstances. It may be controlled by the usages of business and the customs of the people at the place of mailing, and the condition, situation and business engagements of the per- son required to give the notice. The rule should have a reason- able application in every case, and whether sufficient diligence has been used to mail the notice, the facts being undisputed, is a question of law." But see Burgess v. Vreeland, 4 Zab. (N. J.) 71; Winans v. Davis, 3 Harr. (N. J.) 276. Where the notice has not arrived at as early a date as in the regular course of the mail NOTICE OF DISHONOR. 179 it might have come, if started at the proper time, the onus is upon the plaintiff to prove that it was put in the mail at the proper time. Friend v. Wilkinson, 9 Gratt. 31. Where notice not sent by mail. — See Bank of Columbia v. Law- rence, 1 Peters, 578; Jarvis v. St. Croix Mfg. Co., 23 Me. 287. § 105. Miscarriage in mails — notice deemed to have been given. — Where notice of dishonor is duly ad- dressed and deposited in the post-office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails. Rule at common law. — This section makes no change in the law. See Windham Bank v. Norton, 22 Conn. 213; Pier v. Heinrichsof- fen, 67 Mo. 163; Bell v. Hagerstown Bank, 7 Gill. 216; Sasscer v. Farmers' Bank, 4 Md. 409; Cook v. Foraker, 193 Pa. St. 461. In Shed v. Brett, 1 Pick. 401, 410, it was said: "The mail being estab- lished by standing laws of the Government for the purpose princi- pally of facilitating the transmission of mercantile correspondence, it being by far the most usual conveyance of letters and generally the most sure as to time, and safe in every other respect, all men who deal in mercantile paper are presumed to assent, and even expect, that such information as they may want will be communi- cated in this way. And thus the post-office becomes their agent; and if it happens to fail from any unexpected cause, he who made the right use of it by placing his letter there properly di- rected has done all his duty, and the consequences must fall upon him who has to receive." For cases applying this section, see Zoll- ner v. Moffitt, 222 Pa. St. 644; First Nat. Bank v. Star Watch Case Co., 153 N. W. Rep. (Mich.) 722. Insufficient postage. — If undue delay in giving the notice is caused by insufficient postage, the notice is not good. First Nat. Bank v. Miller, 139 Wis. 126. Thus, the notice was held to be in- effective where it was deposited with insufficient postage in the post-office after ordinary business hours and the close of mail on the business day succeeding dishonor, and was not again sent out with sufficient postage until five days after its return by the postal authorities. Id. 180 THE NEGOTIABLE INSTRUMENTS LAW. § 106. Deposit in post-office — what constitutes. — 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 depart- ment. Rule at common law. — The practice authorized by this section was approved in a number of cases. See Nat. Bank v. Shaw, 79 Me. 376; Pearce v. Langfit, 101 Pa. St. 507; Johnson v. Brown, 154 Mass. 105 ; Skilbeck v. Garbett, 7 Q. B. 846. In some cases it had been held that delivery to a letter carrier was sufficient. Pearce v. Langfit, 101 Pa. St. 507; Shoemaker v. Mechanics' Bank, 59 Pa. St. 79. But it was not deemed wise to adopt this rule in the statute. Proof of deposit in post-office. — The fact that the notice was deposited with the post-office may be proved like other facts, by either direct or circumstantial evidence. It may be shown by the testimony of the person who deposited it, or by proof of facts from which it may be reasonably inferred that it was so deposited. Central National Bank v. Stoddard, 83 Conn. 332. In an action against an indorser, evidence tending to show that he did not re- ceive notice of dishonor is competent upon the question as to whether notice was ever mailed to him, and the exclusion of such evidence is error. Union Bank v. Deshel, 139 App. Div. (N. Y.) 217. Presumption as to delivery. — A notice placed in a mail chute under the control of the post-office department in the city of New York on the day of protest and postmarked the following day at noon will be presumed, in the absence of evidence to the contrary, to have been delivered before the close of business on that day, as required by section 103. Wilson v. Peck, 66 Mise. (N. Y.) 179. § 107. Notice to antecedent parties — time of. — Where a party receives notice of dishonor, he has, af- ter the receipt of such notice, the same time for giving notice to antecedent parties that the holder has after the dishonor. NOTICE OF DISHONOR. 181 Rule at common law. — This section does not change the law. Bee Howland v. Adrian, 29 N. J. Law, 41; Howard v. Ives, 1 Hill, 263; Jameson v. Swinton, 2 Taunt. 224; Shelburne Falls Na- tional Bank v. Townsley, 102 Mass. 177; Seaton v. Scovill, 18 Kans. 435; Haly v. Brown, 5 Pa. St. 178; Etting v. Schuylkill Bank, 2 Pa. St. 355; Struthers v. Blake, 30 Pa. St. 139; Bray v. Hadwen, 5 Maule & Sel. 68; Linn v. Horton, 17 Wis. 150. Notice to immediate indorser. — If the holder of an indorsed bill or note chooses to rely upon the responsibility of his immediate indorser, there is no necessity for his giving notice to any previous party; and if such notice be properly given in time, by the other parties, it will enure to the benefit of the holder and he may re- cover thereon against any of them. Thus, if the holder notifies the sixth indorser, and he the fifth, and so on to the first, the latter will be liable to all the parties. And it is no objection to such notice that it is not in fact received by the first or any prior in- dorser, as soon as if it had been transmitted directly by the holder or notary, provided it has been seasonably sent by each indorser as he received it. Colt v. Noble, 5 Mass. 167; Mead v. Engs, 5 Cow. 303; Howard v. Ives, 1 Hill, 263. Degree of diligence required. — The same degree of diligence must be exercised on the part of the indorser in forwarding notice as is required of the holder. Ordinary diligence must be used in both cases. He is not bound to forward notice on the very day upon wliich he receives it, but may wait until the next. See cases above cited. See also Williams v. Paintsville Nat. Bank, 143 Ky. 786. The holder of a check indorsed and deposited the same in his bank for collection on July 28th. On July 29th, he was notified by the bank that the check had been dishonored, and on July 30th, he notified the payee by telegraph: Held, that the notice was in due time under this section. Jurgens v. Wichmann, 124 App. Div. (N. Y.) 531. Bank holding paper for collection. — A bank holding for collec- tion a note which has been dishonored, is required to give notice to only its own principal, and he in turn to give notice to his prin- cipal, and so on down the line of indorsers. Gleason v. Thayer, 87 Conn. 248; Shea v. Vahey, 215 Mass. 80. Where indorser is liable for only part of debt. — The application of this section is not confined to those who are antecedent in 182 THE NEGOTIABLE INSTRUMENTS LAW. liability as to the whole of the debt, but it applies as to all who are antecedent as to any part of it. Williams v. Paintsville Nat. Bank, 143 Ky. 786. § 108. Where notice must be sent. — Where a party has added an address to his signature, notice of dis- honor must be sent to that address; but if he has not given such address, then the notice must be sent as follows : 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 ; 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. 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 re- quirements of this section. Where address is added to signature. — See Bartlett v. Robinson, 39 N. Y. 187. In this ease the indorsement was in the following form: "Chas. Robinson, 214 E. 18th Street." The notice of dis- honor sent through the post-office was addressed ' ' Chas. Robinson, Esq., City of New York," and was not received by the indorser. Held, that he was discharged. For cases applying the statute, see Archuleta v. Johnston, 53 Colo. 393; Century Bank v. Breit- bart, 89 Misc. (N. Y.) 308. Nearest post-office. — See Bank of Columbia v. Lawrence, 1 Peters, 578; National Bank v. Cade, 73 Mich. 449; Northwestern Coal Co. v. Bowman, 69 Iowa 150; Mercer v. Lancaster, 5 Pa. St. 160; Woods v. Neeld, 44 Pa. St. 86; Haly v. Brown, 5 Pa. St. 178; Rand v. Reynolds, 2 Gratt, 171. But if sufficient inquiries have been made, and information received on which the holder has a right to rely, a mistake as to the nearest or usual post-office does not release the indorser. Moore v. Hardcastle, 11 Md. 486. For a NOTICE OF DISHONOR. 183 case where the indorser received his mail at two post-offices, see Shelburne Falls Nat. Bank v. Townsley, 107 Mass. 444. A notice addressed to the indorser at "New York" is insufficient where there is no evidence that he lived, ever had lived, or was sojourn- ing in New York, and no inquiry was made to ascertain whether such was the fact. Fonseca v. Hartman, 84 N. Y. Supp. 131. See also Dupont de Nemour Powder Co. v. Rooney, 63 Misc. (N. Y.) 344. Where place of residence and business are different. — Bank of U. S. v. Carneal, 2 Peters, 549; Williams v. Bank of U. S., 2 Peters, 96; Montgomery Co. Bank v. Marsh, 7 N. Y. 481. The rule that notice might be served at the place of business, as well as at the residence, was not changed by the former statute of Wisconsin, Laws 1861, Ch. 79. Simus v. Larkin, 19 Wis. 390. Place of sojourn. — Chouteau v. Webster, 6 Mete. 1; Young v. Durgin, 15 Gray, 264; Bigley's Adm'r v. Cluff, 16 Gratt. 284, 291- 292. The stability of residence acquired under laws relating to taxation and the settlement of paupers is not necessary when ascertaining the abode of an indorser for the purpose of giving him notice of dishonor by mail. He may have a residence for this purpose at two places at the same time, and, in such case, notice to him at either place will be sufficient. Lowell Trust Company v. Pratt, 183 Mass. 379, 381. Where notice is misdirected. — A notice addressed on its face, by mistake, to the maker instead of the indorsee, but inclosed in an envelope properly addressed to the indorsee, and received by him, is sufficient. Wilson v. Peck, 66 Misc. (N. Y.) 179. Where notice is actually received. — Although the residence or place of business is the usual and proper place for giving notice, it will be good if actually given anywhere. Dickens v. Hall, 87 Pa. St. 379, 380. If the party to be charged receives the notice in due time he cannot object to the means employed. Terbell v. Jones, 15 Wis. 235; Whitford v. Burckmeyer, 1 Gill, 127. But if the holder employs other means than the mail he does so at his own risk. Id. Notice sent by telegraph, for example, would be sufficient if actually received, and an omission to post the notice in due season might be corrected iii this way. Jurgens v. Wick- man, 124 App. Div. (N. Y.) 531. Or in such case, notice might be Lb4 THE NEGOTIABLE INSTRUMENTS LAW. fiven by telephone. American Nat. Bank v. Fertilizer Co., 125 lenn. 328. § 109. Waiver of notice. — Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied. Rule at common law. — The statute has not changed the law respecting waiver. First Nat. Bank v. Gridley, 112 App. Div. (N. T.) 398 ; Eobinson v. Barnett, 19 Fla. 670. It was well settled that if an indorser with full knowledge of the laches of the holder in neglecting to protest a bill or note, unequivocally assents to con- tinue his liability, or to be responsible, as though due protest had been made, he is held to have waived the right to object, and will Btand in the same position as if he had been regularly charged by presentment, demand and notice. How assent established. — The assent must be clearly established, and will not be inferred from doubtful or equivocal acts or lan- guage. It has been frequently held that a promise by the indorser to pay the note or bill, after he has been discharged by the failure to protest it, will bind the indorser, provided he had full knowledge of the laches when the promise was made. A promise made under those circumstances affords the clearest evidence that the indorser does not intend to take advantage of the laches of the holder; and the law, without any new consideration moving between the par- ties, gives effect to the promise. The assent of the indorser to be bound, notwithstanding he has not been duly charged, may be es- tablished by any transaction between him and the holder, which clearly indicates this purpose and intention. Ross v. Hurd, 71 N. Y. 14, 18 ; Turnbull v. Maddux, 68 Md. 579 ; Lewis v. Brehme, 33 Md. 412 ; Bank v. Dibbrell, 91 Term. 301 ; Low v. Howard, 10 Cush. 159; Smith v. Lownsdale, 6 Oregon, 78; Whittaker v. Morrison, 1 Fk. 25. Knowledge of facts. — It must appear that the indorser had knowledge of the fact that the holder was in default. Thornton v. Wynn, 12 Wheat. 183; Hunter v. Hook, 64 Barb. 469; Nevins v. Moore, 221 Mo. 331; Gawtry v. Doane, 48 Barb. 148; Schierl v. Baumel, 75 Wis. 75; Glaser v. Roundo, 16 R. I. 235; Aebi v. Bank NOTICE OF DISHONOR. 185 of Evansville, 124 Wis. 13, 81. And in Massachusetts it is held that knowledge on the part of an indorser that demand upon the maker has not been made is material, and must be proved, notwith- standing the fact that he knew that the note had not been paid, and that notice of non-payment had not been given, and was aware that he was discharged from all liability. Parks v. Smith, 155 Mass. 26, 33 ; Garland v. Salem Bank, 9 Mass. 408 ; Low v. Howard, 10 Cush. 159; S. 0., 11 Cush. 268; Kelley v. Brown, 5 Gray, 108. Mistake of law. — But where the indorser is fully apprised of the facts, he is bound by the waiver, though made in ignorance of its legal effect. Toole v. Crafts, 193 Mass. 110. Implied waiver. — See Jenkins v. White, 147 Pa. St. 303. Evidence of waiver. — A waiver will not be presumed without the most satisfactory proof. Lockwood v. Crawford, 18 Conn. 374. But it is not essential that the waiver be in writing. When the fact is established by competent evidence, a parol waiver is as valid and binding as a written one. The only difference is in the character of the proof. Annville National Bank v. Kettering, 106 Pa. St. 531, 534. Part payment by indorser. — A part payment of a note by an indorser, not explained or qualified by any accompanying circum- stances, will be held to be sufficient evidence of waiver of notice. Whittaker v. Morrison, 1 Fla. 25. Where indorser has taken security. — The fact that the indorser holds security to indemnify him against loss upon his indorsement does not dispense with the necessity for notice. First Nat. Bank of Binghampton v. Baker, 163 App. Div. (N. T.) 72 ; Moore v. Alex- ander, 63 Id. 100 ; Whitney v. Collins, 15 E. I. 44. But see Brown v. Maffey, 15 East. 222; Bond v. Farnham, 5 Mass. 170; Haskell v. Boardman, 8 Allen, 38 ; Smith v. Lownsdale, 6 Ore. 78. Question for jury. — As to when question of waiver is for the jury, see Valley Nat. Bank v. TJhler, 191 Pa. St. 365 ; Jones v. Rob- erts, 191 Pa. St. 152. Pleading. — The facts constituting the waiver must be alleged in the pleading. Congress Brewing Co. v. Habenicht, 83 App. Div. (N. Y.) 141. 186 THE NEGOTIABLE INSTRUMENTS LAW. When demand is waived. — As the conditions upon which an in- dorser is liable, viz., (1) that there shall be demand upon the party primarily liable, and (2) that if the paper be dishonored due notice be given to the indorser, are distinct and independent of each other, a waiver of demand is not a waiver of notice of dishonor. Hall v. Crane, 213 Mass. 326. But see Baumeister v. Kuntz, 53 Fla. 340; Dye v. Scott, 35 Ohio St. 194. § 110. Parties affected by waiver. — 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. Waiver in body of instrument. — See Phillips v. Dippo, 93 Iowa, 35 ; Smith v. Pickham, 8 Tex. Civ. App. 326 ; Bryant v Merchants' Bank, 8 Bush. 43; Lowry v. Steele, 27 Ind. 168; Farmers' Bank of Kentucky v. Ewing, 78 Ky. 264; Bryant v. Taylor, 19 Minn. 396. A waiver inserted in the body of the paper becomes a part of the con- tract of the indorser as well as of the maker. Owensboro Savings Bank v. Haynes, 143 Ky. 534. Waiver written above signature. — Woodman v. Thurston, 8 Cush. 157 ; Farmers' Bank v. Ewing, 78 Ky. 264. § 111. 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. Reason for the rule. — While in a strict and technical sense the term protest when used in reference to commercial paper means only the formal declaration drawn up and signed by a notary, yet in a popular sense, and as used among men of business, it includes all the steps necessary to charge an indorser; and in waiving pro- test an indorser is supposed to use in it this sense. Coddington v. Davis, 1 N. Y. 186, 189-190 ; Annville Nat. Bank v. Kettering, 106 Pa. St. 531; First Nat. Bank v. Schreiner, 110 Pa. St. 188; Con- tinent Life Ins. Co. v. Barber, 50 Conn. 567 ; First Nat. Bank v. Falkenham, 94 Cal. 141 ; Brewster v. Arnold, 1 Wis. 264 ; Wilkie v. NOTICE OF DISHONOR. 187 Chandon, 1 Wash. 355. For cases applying this section, see Bell- Knox Coal Co. v. Gregory, 152 Ky. 413; Bank of Montpelier v. Montpelier Lumber Co., 16 Idaho, 730. Extent of waiver. — But the waiver will not be extended beyond the fair import of the terms; and hence, a waiver of "notice of protest " will not be deemed a waiver of demand. Sprague v. Fletcher, 8 Oregon, 367. Pleading. — In construing a pleading a more technical rule will be applied, and an allegation that the instrument was duly protested will not be held to comprehend an averment that notice of dis- honor was given to the indorser. Cook v. Warren, 88 N. Y. 37. Contra, Gleason v. Thayer, 87 Conn. 248. And it has been held that an averment in an affidavit of defense that the note sued on was not protested, or notice of protest given, is not sufficient, for the note may have been presented and notice of nonpayment given without any formal protest having been made. First Nat. Bank v. Tustin, 246 Pa. 151. § 112. When notice is dispensed with. — Notice of dis- honor 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. Where principal obligor is dead. — The fact that the holder is excused from making presentment for payment under section 76 because the principal obligor is dead, does not relieve him from the duty of giving notice of dishonor to the indorser. Reed v. Spear, 107 App. Div. (N. T.) 144. Reasonable diligence. — See Hobbs v. Straine, 149 Mass. 212; Staylor v. Ball, 24 Md. 183; Eeed v. Spear, 107 App. Div. (N. Y.) 144 ; Fonseca v. Hartman, 84 N. Y. Supp. 131 ; Siegel v. Dubinsky, 56 Misc. (N. Y.) 681. Reasonable diligence is all that is required. The law does not exact every possible exertion which might have been made to effect notice of the dishonor of the paper. Bank of Port Jefferson v. Darling, 91 Hun, 236. But, as said by Lord Ellen- borough, the holder cannot allow himself to remain " in a state of passive and contented ignorance." Bateman v. Joseph, 2 Campb. 461. What is reasonable diligence will depend upon the circum- stances of each case. What would be sufficient in one case might 188 THE NEGOTIABLE INSTRUMENTS LAW. fall short in another. Howland v. Adrian, 29 N. J. Law, 41. And any mode of inquiry will be sufficient which under the circum- stances of the case evinces reasonable diligence. Hartford Bank ▼. Stedman, 3 Conn. 494. Raliance upon directory. — But bare reliance upon a directory is not sufficient. Bacon v. Hanna, 137 N. Y. 379, 382. In the case last cited, the court said : " Merely looking into a directory is not enough. The sources of error in that process are too many and too great. Such books are accurate enough in a general way, and con- venient as an aid or assistance, but they are private ventures, created by irresponsible parties, and depending upon information gathered as cheaply as possible and by unknown agents. Their help may be invoked, but, as was said in Lawrence v. Miller, 16 N. Y. 235, their error may excuse the notary, but will not charge the defendant. Merely consulting them should not be deemed ' the best informa- tion obtainable by diligent inquiry.' " Greenwich Bank v. De- Groot, 7 Hun, 210; Baer v. Leppert, 12 Hun, 516." Duty to apply for information. — If the holder is ignorant of the address he should apply to the other parties to the instrument for information. University Press v. Williams, 48 App. Div. (N. T.) 190. Duty to inform notary — Duty of notary to inquire. — When a notary is employed, it is the duty of the bolder to inform him of the indorser's place of residence; and if this be omitted, the notary ought to apply to all the parties to the instrument for information, and especially to the holder himself. Hill v. Farrell, 3 Greenleaf, 233 ; Haly v. Brown, 5 Pa. St. 178, 182 ; Tate v. Sullivan, 30 Md. 464; Staylor v. Ball & Williams, 24 Md. 183. Agent for collection. — But as the duty to give notice, and there- fore the duty of due diligence to discover the residence of the in- dorser, arises subsequently to the dishonor of the note, it is not an element of due diligence that the owner should previously have communicated his knowledge of the indorser's residence to the holder for collection. Bartlett v. Isbell, 31 Conn. 297. Change of residence — Presumption. — Where it does not appear that the residence of the indorser has been changed previously to the time of sending the notice, it will be presumed that there has NOTICE OF DISHONOS. 189 been no change of residence up to that time. Mohlman Co. v. Me- Kane, 60 App. Div. 546 (a case arising under the statute). When question of law. — Where the facts are undisputed the question of due diligence in seeking to give notice of dishonor is for the court. Haly v. Brown, 5 Pa. St. 178. § 113. When delay in giving notice is excused. — 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, miscon- duct or negligence. When the cause of delay ceases to operate, notice must be given with reasonable dili- gence. Illustration. — For example, in Martin v. Ingersoll, 8 Pick. 1, the delay was caused by the fact that during the Christmas holi- days vessels were not allowed to clear from Havana: Held, that during the continuance of the holidays it was not necessary to write a notice of the dishonor of a bill. § 114. When notice need not be given to drawer. — Notice of dishonor is not required to be given to the drawer in either of the following cases : 1. Where the drawer and drawee are the same per- son; 2. Where the drawee is a fictitious person or a per- son not having capacity to contract; 3. Where the drawer is the person to whom the in- strument is presented for payment; 4. Where the drawer has no right to expect or re- quire that the drawee or acceptor will honor the in- strument; 5. Where the drawer has countermanded payment. Where drawer and drawee are the same person. — Sae Roach v. Ostler, 1 Man. & Ry. 120; Planters' Bank v. Evans, 36 Tex. 592; Chicago, etc., R. R. Co. v. West, 37 Ind. 211. When the drawer and the drawee are the same in contemplation of law, the rule ap- plicable to such draft is, that in legal operation it is regarded as a 190 THE NEGOTIABLE INSTRUMENTS LAW. promissory note, payable on demand, and the maker thereof is not entitled to notice. Bailey v. Southwestern R. E. Bank, 11 Fla. 266. Notice is not required to render a firm liable where all the members of the firm are members of the house which drew the bilL West Branch Bank v. Fulner, 3 Pa. St. 399. Right to expect paper to be honored. — Life Insurance Company v. Pendleton, 112 U. S. 708 ; Wollenweber v. Ketterlinn, 17 Pa. St. 389. Although the drawer has no funds in the hands of the drawee, yet if he has a right to expect to have funds there to meet the bill, or if he has a right to expect the bill to be accepted by the drawee in consequence of an agreement or an arrangement with him, or if upon taking up the bill he would be entitled to sue the drawee or any other party to the bill, then in every such case he is entitled to strict notice of dishonor. Pitts v. Jones, 9 Fla. 519. § 115. When notice need not be given to indorser. — Notice of dishonor is not required to be given to an indorser in either of the following cases: 1. Where the drawee is a fictitious person or a per- son not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the in- strument ; 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. Where drawee is a fictitious person. — See note to section 9. Where instrument is presented to indorser. — For cases applying the statute, see Electric Mfg. Co. v. Hodge, 181 Mo. App. 232; In re Swift, 106 Fed. Eep. 65. Paper made or accepted for indorser's accommodation. — See French v. Bank of Columbia, 4 Cranch, 141; Eoss v. Bedell, 5 Duer, 462; Blenderman v. Price, 50 N. J. L. 296; Torrey v. Frost, 40 Me. 74. Where one, as indorser, procures the note of another to be discounted by a bank for his credit, and at the time the discount is effected makes a distinct promise to the bank to pay the note at maturity, his liability is absolute, not conditional, and protest and NOTICE OP DISHONOR. 191 notice of non-payment are unnecessary. Sieger v. Second National Bank, 132 Pa. St. 307. So, where a number of stockholders indorse before delivery, a note made for the benefit of the corporation, the note may be regarded as made for their accommodation, so that notice of dishonor is excused under that provision of the Negotiable Instruments Law, which dispenses with notice where the instrument was made or accepted for the indorsers' accommodation. Mercan- tile Bank v. Busby, 120 Tenn. 652. Defendants were respectively president and secretary of a corporation and also directors and large stockholders. The corporation had no assets whatever from which it could realize money, but was engaged in the execution of two contracts, which defendants regarded as valuable. For the purpose of continuing with performance of the contracts, they borrowed money from plaintiff's testator, giving a note which they signed on behalf of the corporation, and which with another director, they also indorsed individually. When the note matured, the company had no money with which to pay it, as defendants, its executive of- ficers knew : Held, that under this section, the holder was not re- quired to present the note to the company for payment, or to give the defendants notice of dishonor. Luckenbach v. McDonald, 164 Fed. Rep. 296, 95 C. C. A. 604, § 116. Where notice of non-acceptance has been given. — Where due notice of dishonor by non-accept- ance has been given, notice of a subsequent dishonor by non-payment is not necessary, unless in the mean- time the instrument has been accepted. See De la Torre v. Barclay, 1 Stark, 308; Campbell v. French, 6 T. R. 200. § 117. Omission to give notice of non-acceptance — subsequent holder. — An omission to give notice of dis- honor by non-acceptance does not prejudice the rights of a holder in due course subsequent to the omission. Variant readings. — In Wisconsin the following is added at the end of the section: " but this shall not be construed to relieve any liability discharged by such omission." This amendment is harm- less; but the necessity for it would be difficult to discover. 192 THE NEGOTIABLE INSTRUMENTS LAW. § 118. Protest authorized in all cases of dishonor — when required. — Where any negotiable instrument has been dishonored it may be protested for non-ac- ceptance or non-payment, as the case may be; but pro- test is not required, except in the case of foreign bills of exchange. Variant readings. — In Vermont the following is added at the end of the section : ' ' but this provision shall not be held to dis- pense with demand and notice of dishonor as provided by §§ 71 and 90." Rule at common law. — This section makes no change in the law. See Bay v. Church, 15 Conn. 129; Legg v. Vinal, 165 Mass. 555; Tate v. Sullivan, 30 Md. 464; Weems v. Farmers' Bank, 15 Md. 231; Eicketts v. Pendleton, 14 Md. 320; Sumner v. Kimball, 2 Wis. 524; Stephenson v. Dickson, 24 Pa. St. 148. Under this section the drawer of a foreign bill is discharged unless the bill be protested. Amsinck v. Eogers, 189 N. Y. 252; S. C, 103 App. Div. 428. Certificate of notary. — While protest is not necessary, except in case of foreign bills, it is very convenient in all cases, because it affords the easiest and most certain method of proving the fact of dishonor and the notice to the indorsers. The statutes of nearly all, if not all, of the states make the certificate of the notary prima facie evidence of these facts. Under the statute of Pennsylvania, making the certificate of a notary public evidence of the facts therein contained, a notary's certificate that he had protested a note, and notified the endorsers of the presentation, demand and refusal, is prima facie evidence that notice was given in com- pliance with the requirements of the Negotiable Instruments Law. Scott v. Brown, 240 Pa. St. 328. Foreign bills. — As to what are foreign bills, see section 129. For other provisions relative to protest, see sections 152-160. Protest of notes not required. — Statute applied in Demelman t. Brazier, 198 Mass. 458; Sherman v. Ecker, 59 Misc. (N. Y.) 216 ; McBride v. Illinois Nat. Bank, 138 App. Div. (N. Y.) 346. DISCHAEGE OF NEGOTIABLE INSTRUMENTS. 193 ARTICLE IX. Discharge of Negotiable Instruments, Section 119. How instrument discharged. 120. When person secondarily liable is dis- charged. 121. Payment by person secondarily liable- effect of. 122. Renunciation by holder. 123. Unintentional cancellation. 124. Alteration of instrument — effect of. 125. What constitutes a material alteration. § 119. How instrument discharged. — A negotiable instrument is discharged: 1. By payment in due course by or on behalf of the principal debtor; 2. By payment in due course by the party accommo- dated, where the instrument is made or accepted for accommodation ; 3. By the intentional cancellation thereof by the holder; 4. By any other act which will discharge a simple contract for the payment of money; 5. When the principal debtor becomes the holder of the instrument at or after maturity in his own right. Variant readings. — In Illinois subdivision four is omitted. Stamping paper "paid." — The mere fact that the payee stamps the word "paid" upon the paper does not constitute payment. Hanna v. McCrory, 141 Pac. Rep. (N. Mex.) 996. 13 194 THE NEGOTIABLE INSTRUMENTS LAW, Forged paper. — As to the effect of payment made by a drawee where the drawer's signature is forged, see note to section 62. Payment by stranger. — When one who is not a party to the paper pays his money for it, and " takes it up," the presumption is that he has bought it, and not paid it on?. Cantrell v. Davidson, 180 Mo. App. 410. Possession as evidence of payment. — The possession of a bill of exchange by the acceptor after it has been in circulation is prima facie evidence that it has been paid by him. Baring v. Clark, 19 Pick. 220. So the possession of a promissory note by the maker. First Nat. Bank v. Harris, 7 Wash. 139; Perez v. Bank of Key West, 36 Fla. 407. But see Miller v. Kreiter, 76 Pa. St. 75 ; Eckert v. Cameron, 7 Wright, 120; Korkemas v. Macksoud, 131 App. Div. (N. Y.) 728. Where renewal note is a forgery. — The surrender of a genuine note of a town in exchange for an instrument purporting to be a renewal note forged by the treasurer of the town does not extinguish the surrendered note, which, although not to be found, can be sued upon by the holder. Bass v. Inhabitants of Wellesley, 192 Mass. 526'. BurdeD of proof. — Where the defendant admits the execution of a note, the burden of showing payment is on him. Guano Com- pany v. Marks, 135 N. C. 59; Swan v. Carawan, 168 N. C. 472. Payment by indorser. — A payment made to the holder of a promissory note by an indorser, not as agent for the maker, but simply in discharge of his obligation as indorser, where the note wag executed by the maker for value, does not enure to the benefit of the latter, and in an action upon the note he is liable for the whole amount thereof, notwithstanding the payment. Madison Square Bank v. Pierce, 137 N. T. 444. In the case cited it was said : "' To the extent of the money paid, the indorser becomes equitably en- titled to be substituted to the rights and remedies of the holder, and becomes, pro tanto, the beneficial owner of the debt; so that the maker's obligation to pay the note in full, at first due the holder solely in his own right, becomes, after the part payment by the in dorser, still wholly due to the holder, but partly in his own right and partly as trustee for the indorser. A court of law cannot split the note into parts, and must act upon the legal interest and owner- UNCHARGE Otf NEGOTIABLE INSTRUMENTS. 195 •hip." For cases where payment made by person secondarily liable, see section 121. Accommodation paper. — Where a note is made for the accom- modation of one of the makers, and is paid by him, it is dis- charged as to the other makers. Comstock v. Buckley, 141 Wis. 228. Cancellation by holder. — Under this section, when the payee of a note tears it up, with the intention of destroying and cancelling it, this is a discharge of the note. Montgomery v. Schwald, 177 Mo. App. 75. Release of a joint party. — Thus, under subdivision four, the re lease of one joint maker will operate to discharge the others. Caso v. Bridger, 133 La. 754. See also Crawford v. Roberts, 8 Orejr. 324. But to have this effect, the release must be under seal. Shaw v. Pratt, 22 Pick. 305. Meaning of term in his own right. — The words " in his own right " in subdivision five, merely exclude such a case as that of a maker acquiring the instrument in a purely representative ca- pacity. Schwartzman v. Post, 94 App. Div. (N. Y.) 474. If he should become the holder in a representative capacity, for ex- ample, as executor, the instrument would not be discharged. Nash v. DeFreville (1900), 2 Q. B. 72. And where the paper has been taken up by an indorser, the mere fact that it has come intu the possession of the maker in some unexplained way does not operate as a discharge. Korkemas v. Macksoud, 131 App. Div. (N. Y.) 728. Nor is it discharged when the maker acquired the paper as agent for another. Peoples State Bank v. Dryden, 91 Kans. 216. Evidence. — This section points out and designates the acts which discharge the contract, but it does not prescribe the char- acter of proof by which those acts are to be established. Whit- comb v. Nat. Exchange Bank, 123 Md. 613. Payment through clearing-house. — On this subject, see Columbia- Knickerbocker Trust Co. v. Miller, 215 N. Y. 191. § 120. When person secondarily liable is discharged. — A person secondarily liable on the instrument is dis- charged : 196 THE NEGOTIABLE INSTRUMENTS LAW. 1. By any act which discharges the instrument; 2. By the intentional cancellation of his signature by the holder; 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 any 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 re- served. Variant readings. — In all states except New York and Mary- land, the words "unless made with the assent of the party secon- darily liable, or" appear after the word "instrument" in subdivi- sion six. The omission appears to have been merely an error in engrossing. In Illinois the following changes are made: Subdivi- sion three is omitted; at the end of subdivision five the following is added: "or unless the principal debtor be an accommodating party;" and subdivision six reads: "By an agreement in favor of the principal debtor 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 prior or subsequent of the party secondarily liable or unless the right of recourse against such party is expressly reserved, or unless the principal debtor be an accommodating party." In Missouri the words "except when such discharge is had in bankruptcy proceedings," are added at the of subdivision three. In "Wisconsin the words "or unless he is fully indemnified" are added at the end of the section; and a new subdivision, numbered 4a, is interpolated, as follows: "By giving up or applying to other purposes collateral security ap- plicable to the debt, or, there being in the holder's hands or within his contTol the means of complete or partial satisfaction, the same are applied to other purposes." Discharge of prior party. — It is a general rule that whatever discharges the maker or acceptor discharges the drawer and in- DISCHARGE OP NEGOTIABLE INSTRUMENTS. 197 dorser, who axe sureties, for the contract which they undertook to assume thus passes out of existence by the act of the benefi- ciary. And whatever discharges a prior indorser discharges all subsequent indorsers, for the reason that he stood between them and the holder, and on making payment each one could have had recourse against him, but from which his discharge precludes them. The contracts of the parties are said to be like the links of a pendant chain; if the holder dissolves the first, every link falls with it. Shutts v. Fingar, 100 N. Y. 539; Spies v. Nat. City Bank, 174 N. Y. 222; Couch v. Waring, 9 Conn. 261; Gennis v. Weighley, 114 Pa. St. 194. But this rule, of course, does not apply where a prior party has been discharged by the laches of the intermediate indorser; for the holder need give notice only to his immediate indorser. West River Bank v. Taylor, 34 N. Y. 128, 131. And after the responsibility of an indorser has been fixed no act or dealing of the holder with the maker will discharge the indorser, except it be such an act as will defeat, impair or delay the right of the indorser, on paying the note, to recover against the maker. Farmers ' Bank v. Sprigg, 11 Md. 390. Where the holder of a note, with several indorsers in blank, sues the maker and writes over the name of the first indorser an order to pay to himself, the holder, but without striking out the names of the subsequent indorsers, he does not thereby discharge them, and therefore one of them who pays the amount of the note to the holder may sue any of the prior parties. Cole v. Cushing, 8 Pick. 48. An indorser is discharged where the holder has al- lowed the statute of limitations to run against the maker. Shutts v. Fingar, 100 N. Y. 539. Tender of payment by prior party. — See Spurgeon v. Smiths, 114 Ind. 453. Security given by prior party.— The giving of a judgment or other security by the maker or a prior indorser does not discharge a subsequent indorser. First Nat. Bank v. Peltz, 176 Pa. St 513; Guarantee Co. v. Craig, 155 Pa, St. 343. Eelease of principal debtor. — By an express reservation of the holder's rights against the drawer or indorsers, their rights against the maker or acceptor are reserved by implication. Glou- cester Bank v. Worcester, 10 Pick. 528; Tombeckbe Bank v. Strat- ton, 7 Wend. 429; Stewart v. Eden, 2 Cai. 121; Second Nat. Bank v. Graham, 246 Pa. St. 256. 198 THE NEGOTIABLE INSTRUMENTS LAW. Where extension requested by indorser. — Subdivision five refers to the unconditional discharge of the principal debtor, and has no application where the release is given by the holder at the request of the party secondarily liable. Arlington Nat. Bank v. Bennett, 214 Mass. 352. And oral evidence is admissible to prove that an unequivocal sealed instrument, which contains no reservation of a right of recourse against the indorser, was executed and delivered at the request of the indorser, and upon his promise to remain responsible. Id. Necessity for express reservation of right of recourse. — As the statute requires the right of recourse against the party secondarily liable to be "expressly reserved" the reservation of such right cannot be implied from the acts and conduct of the parties. Phenix National Bank v. Hanlon, 183 Mo. App. 243. Extending time of payment — Reason for the rule. — The rule has long been recognized that an indorser or surety is entitled to have the engagement of the principal debtor preserved without varia- tion in its terms, and that his assent to any change therein is essential to the continuance of his obligation. The reason of the rule is that his right must not be affected upon the maturity of the indebtednes to make payment and, by subrogation to the cred- itor's place, to at once proceed against the principal debtor to enforce repayment. Therefore it is that any agreement of the creditor, which operates to extend the time of payment of the original debt and supends the right to immediate action, is held to discharge the non-assenting indorser, or surety; for the law will presume injury to him thereby. The creditor may arrange with his debtor in any way which does not result in effecting either of these results. He may take, as collateral to the old note, new security, or other notes, and, if time is not given to the debtor, the indorser, or surety, will not be discharged. To prevent such a result, the agreement must expressly reserve all the remedies of the creditor against the indorser, or surety; in which case the latter will be in a position to pay immediately, and then to pro- ceed against the principal debtor. Nat. Park Bank v. Koehler, 204 N. Y. 174, 179-180; Riehl v. Austin, 155 App. Div. (N. Y.) 207. What extension will operate as a discharge. — Any extension, no matter how short, by a valid agreement, will discharge the in- DISCHARGE OF NEGOTIABLE INSTRUMENTS. 199 dorser or surety. Cary v. White, 52 N. Y. 138; Nightingale v. Meginnis, 34 N. J. Law, 461; Siebeneck v. Anchor Savings Bank, 111 Pa. St. 187; In re Bishop 'a Estate, 195 Pa. St. 85; Frieden- berg v. Kobinson, 14 Fla. 130. But there must be an enforceable agreement to this effect, either expressed or implied. Ordinarily the taking of a new note from the debtor, payable at a future day, suspends the right of action upon the original demand until the maturity of the new note, and hence discharges a non-assent- ing surety. Union Trust Co. v. McCrum, 145 App. Div. (N. Y.) 409; Hubbard v. Gurney, 64 N. Y. 450; Place v. Mcllvain, 38 N. Y. 960; Fridenberg v. Robinson, 14 Fla. 130. But when the new security is payable on demand no presumption of an agree- ment arises. Board of Education v. Fonda, 77 N. Y. 350, 362. And where new security is taken merely as collateral, the fact that the collateral may not be enforceable until a definite time in the future does not operate to extend the time of payment of the principal debt, or suspend the right to sue on the original security. Falkill National Bank v. Sleight, 1 App. Div. (N. Y.) 189, 191; United States v. Hodge, 6 How. (U. S.) 279. Mere indulgence to the maker or acceptor will not discharge a drawer or indorser; there must be an agreement to extend the time of payment binding upon the holder. Smith v. Erwin, 77 N. Y. 466; Bank of Utica v. Ives, 17 Wend. 501; Crawford v. Millspaugh, 13 Johns. 87; Lockwood v. Crawford, 18 Conn. 376; Friedenberg v. Robinson, 14 Fla. 130. And for this purpose the contract must be supported by a valid consideration. Cary v. White, 52 N. Y. 138. A part payment by the maker is not such a consideration, Halliday v. Hart, 30 N- Y. 474; nor is an agreement to pay inter- est, since it is merely a promise to do what the party is already bound to do. Wilson v. Powers, 130 Mass. 127; Stuber v. Schack, 83 111. 192. Extending time to plead. — An indorser is not discharged by ex- tending the maker's time to answer. German- Am. Bank v. Nia- gara Cycle Co., 13 App. Div. (N. Y.) 450. Where right of recourse is reserved. — Under subdivision six of this section, a surety on a note is not discharged by the taking of a renewal note where the extension is given with an express reservation of the right of recourse against the surety. Dier v. Bank, 129 Tenn. 89. But though renewal notes are taken under an express agreement between the maker and holder that the 200 THE NEGOTIABLE INSTRUMENTS LAW. indorser shall not be discharged, yet if subsequent renewals are made without such an agreement, the indorsers are discharged. In re Moritz Estate, 239 Pa. St. 375. Same subject — Reason for the rule. — Inasmuch as the reserva- tion of rights against the surety becomes a consideration of the contract for extension entered into with the debtor, the latter impliedly agrees that the surety may have all his original rights preserved against him as principal debtor; and while the creditor cannot bring suit against the principal pending the extension, the surety, if he pays the debt, may sue the principal at once therefor. The surety's contract is not changed, and there is no equitable reason to justify his discharge. Meredith v. Dibrell, 127 Tenn. 287. For the rule at common law, which is the same as that under the statute, see Wagman v. Hoag, 14 Barb. 233, 239; Rockville National Bank v. Holt, 58 Conn. 526; Commercial Nat. Bank v. Simpson, 90 N. C. 469; Minir v. Crawford, L. R. 2 Scotch Appeals, 456; Kenworthy v. Sawyer, 125 Mass. 28; Morse v. Huntington, 40 Vt. 488; Hagey v. Hill, 75 Pa. St. 108. Burden of proof. — The burden of showing that the indorser assented to the extension of time is on the party seeking to charge him. Siebeneck v. Anchor Savings Bank, 111 Pa. St. 187. Accommodation maker. — In the previous editions of this work, the author expressed the opinion that, under the statute, an ac- commodation maker will not be discharged by an extension of time granted to the indorser, for the reason that a maker, even for accommodation, is, by virtue of section 192, primarily liable upon the instrument. And this view has been adopted by the courts of Maryland, Missouri, Kentucky, Oregon, Washington, Utah, North Dakota and Arizona. Vanderford v. Farmers' & Me- chanics' Nat. Bank, 105 Md. 164; First State Bank v. Williams, 164 Ky. 143; Lane v. Hydes, 163 Mo. App. 688; Night & Day Bank v. Rosenbaum, 177 S. W. Rep. (Mo. App.) 693; Hunter v. Harris, 56 Wash. 628; Wolstenholme v. Smith, 34 Utah, 300; First Nat. Bank v. Meyer, 152 N. W. Rep. (N. D.) 657; Cowan v. Ramsay, 15 Ariz. 533. A similar view was taken in New York bv the Ap- pellate Division, First Department, in National Citizens' Bank 7. Toplitz (81 App. Div. 593), which, however, was affirmed in the Court of Appeals on other grounds (178 N. Y. 466). See also Delaware County Trust Co. v. Title Ins. Co., 199 Pa. St. 17. DISCHARGE OF NEGOTIABLE INSTRUMENTS. 201 Same subject — Reason for the change. — The reason for the ehange mentioned above will be apparent. The rule which re- quired the holder to treat an accommodation maker as a mere surety was often a trap for the unwary; for where an indorser ap- plies, for an extension, it will not always occur to the holder, even when he is a business man of intelligence and experience, that the consent of the maker is required. Nor does the rule adopted in the statute do any injustice to the maker. When a man signs a note as the principal obligor, he cannot complain if he is treated as being in fact what he appears to be upon the face of the pa- per. If he wishes to be dealt with as a surety, he should sign as indorser or guarantor, so as to indicate that that is the obligation he meant to assume. Indeed, the rule that an extension of time granted to the principal discharges the surety, without proof of any loss or injury to him, is based upon considerations that are theoretical, rather than practical; and when this rule is applied in favor of one who, upon the face of a negotiable instrument, has assumed a primary liability, gross injustice is likely to result. Surrendering collateral — Wisconsin statute. — Under the provi- sions of the Wisconsin act, that "a person secondairly liable on the instrument is discharged * * * by giving up or applying to other purposes collateral security applicable to the debt," the surety is discharged only to an extent corresponding with the value of the security given up or applied to other purposes. State Bank of La Crosse v. Michel, 152 Wis. 88. This provision does not appear in the law as enacted in the other states. As in the case of some other local amendments, it seems to have been ill- considered and inaccurately expressed. § 121. Payment by party secondarily liable — effect of. — Where the instrument is paid by a party secon- darily liable thereon, it is not discharge ; but the party so paying it is remitted to his former rights as regards all prior parties, and he may strike out his own and all subsequent indorsements, and again negotiate the instrument, except: 1. Where it is payable to the order of a third person, and has been paid by the drawer; and 202 THE NEGOTIABLE INSTRUMENTS LAW. 2. Where it was made or accepted for accommoda- tion, and has been paid by the party accommodated. Situation of indorser who has taken up the paper. — Where an indorser takes up the instrument, after it has been dishonored, by paying the amount of it to the holder, the transaction is in effect a repurchase of the paper, and not a payment of it, and the indorser becomes vested again with all the rights which he formerly had against prior parties. Assets Realization Co. v. Mercantile Nat. Bank, 167 App. Div. (N. Y.) 757; French v. Jar- vis, 29 Conn. 347. And the paper retains its negotiable charac- ter. Gould v. Eager, 17 Mass. 615; Davis v. Miller, 14 Gratt. 1. And although in the case of accommodation paper, the indorsee may not pay actual value at the time of his indorsement, yet if he pays the instrument, and gets possession of it, he is deemed a holder, Reinhart v. Schall, 69 Md. 352. Where party paying would have no cause of action. — The ap- plication of this section is necessarily limited to cases where the person secondarily liable can trace his title through the prior parties to the party whom he seeks to hold. If, when remitted to his former rights, he would have no cause of action against any party to the paper, payment by him discharges the instrument. Quimby v. Varnum, 190 Mass. 211. Payment by second indorser. — Where payment is made by the second indorser, the case is within the provisions of this section. Twelfth Ward Bank v. Brooks, 63 App. Div. (N. Y.) 220. Possession of paper as evidence. — Possession of the paper by an indorser, after its protest for non-payment, is prima facie evi- dence that he has performed his contract of indorsement, and has paid to the holder the amount due. Hill v. Buchanan, 71 N. J. L. 301. See section 119. Striking out indorsements. — It is necessary to strike out all subsequent indorsements; for after the paper has once been paid it cannot be negotiated again if such negotiation would make any of the parties liable who would otherwise be discharged. Goodner v. Maynard, 7 Allen, 456 ; Citizens ' Bank v. Say, 80 Va. 436. And by putting the note in circulation again the liability of subsequent parties is not revived. Davis v. Miller, 14 Gratt. 1. DISCHARGE OF NEGOTIABLE INSTRUMENTS. 203 Payment by drawee. — Payment by a bank of a check drawn npo» it, in the usual course, and in the absence of fraud, or mis- take of fact, extinguishes the instrument, and the bank by there- after putting it in circulation cannot create a liability thereunder against the maker or prior indorser. Aurora State Bank v. Hayea- Eames Elevator Co., 88 Neb. 187. Eight of set-off. — This section does not preclude an indorser of a note who has paid the same upon the insolvency of the maker from claiming a set-off against one to whom the maker had as- signed a debt due from the indorser. Nolan Bros. Lumber Co. v. Dudley Lumber Co., 128 Tenn. 11. Who entitled to again negotiate paper. — The words "remitted to his former rights," as used in this section, apply only to a party secondarily liable who has himself been connected with the title to the instrument. Lill v. Gleason, 92 Kas. 254. See also Miller v. Del Eio Mining Co., 25 Idaho, 83. Note in hands of maker. — A note coming into the hands of the maker under such circumstances as to raise a presumption of its payment cannot be pledged by him as collateral so as to bind a surety, although the note may not have matured at the time of its reissue. First National Bank v. Harris, 7 "Wash. 139. Accommodation paper. — Where the instrument is paid by an accommodation acceptor it is discharged, and becomes commercially dead, but is evidence -in the hands of the payer to charge the real debtor. Cottrell v. Watkins, 89 Va. 801; First Nat. Bank v. Max- field, 83 Me. 576. So, where one of several accommodation mak- ers pays the note, it remains in his hands evidence of his right to contribution from his co-sureties. This right may be assigned by him, and the delivery of the note by him to a third person for a valuable consideration raises a presumption of an intention to pass this right to the transferee. Dillenbeck v. Bygert, 97 N. Y. 303. Where an accommodation indorser for the payee has paid the note he may recover the amount of an accommodation maker. Laubach v. Pursell, 35 N. J. Law, 434. And where a second indor- ser of a note has paid and taken it up he becomes a holder for value, and may maintain an action to recover the amount thereof of the first indorser, although both are accommodation indorsers. Kelly v. Burroughs, 102 N. Y. 93. See also Kaschner v. Conklin, 40 Conn. 81. But where the instrument was made for the accom- 204 THE NEGOTIABLE INSTRUMENTS LAW. modation of the indorser, payment by him discharges it. Joseph* son v. Gens, 85 Misc. (N. Y.) 372. See section 68. § 122. Renunciation by holder. — The holder may expressly renounce his rights against any party to the instrument, before, at or after its maturity. An abso- lute and unconditional renunciation of his rights against the principal debtor made at or after the ma- turity of the instrument discharges the instrument. But a renunciation does not affect the 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. Parties primarily and secondarily liable. — In Leask v. Dew, 102 App. Div. (N. Y.) 529, 534, it was said by Hatch, J. : " There is some obscurity in the provisions of our statute. In its first sentence it provides for the renunciation of the rights of the holder against any party to the instrument which may be made before, at or after its maturity. In the second sentence it provides for an absolute and unconditional renunciation of the rights of the holder against the principal debtor at or after the maturity of the instrument, which discharges the instrument. The first relates to the party; the sec- ond to the instrument. It is somewhat difficult to see how there could be an absolute discharge of a party to an instrument with- out discharging the instrument as an obligation so far as he is con- cerned. We do not clearly perceive why this distinction should have been made.'' But upon reflection, it will be seen that the dis- tinction is indispensable. If the party in whose favor the renuncia- tion is made is only secondarily liable, then only he and parties sub- sequent to him are discharged, and the instrument still remains in force as to prior parties. See section 120, subdivision 3. But when the holder renounces his rights against the person primarily liable, then the instrument itself is discharged. The learned judge writing as above-mentioned evidently had in mind the facts of the case be- fore the court, where the maker was the only party to the paper, and he thus failed to note the situation which will arise where there are a number of indorsers. Thus, if a bill drawn by A and accepted by B, should be indorsed by C and D, a renunciation in favor of D DISCHARGE OF NEGOTIABLE INSTRUMENTS. 205 would discharge him only, and a renunciation in favor of C would discharge only C and D ; but a renunciation in favor of B, the ac- ceptor, would discharge the instrument. Necessity for writing. — Unless the instrument be delivered up the renunciation can be proved only by the holder's written declara- tion. Whitcomb v. Nat. Exchange Bank, 123 Md. 612 ; Baldwin v. Daly, 41 Wash. 416. After a testator's death, there was found among his papers, inclosed in an envelope, a promissory note pay- able to him and an instrument signed by him and addressed to his executors stating, " Gentlemen : The enclosed note I wish to be cancelled in case of my death, and if the law does not allow it, I wish you to notify my heirs that it is my wish and orders :" Held, that this was not a renunciation within the statute. Leask v. Dew, 102 App. Div. (N. Y.) 529. Consideration. — The term "renunciation" as used in this sec- tion describes the act of surrendering a right of claim without recompense, but it can be applied with equal propriety to the re- linquishment of a demand upon an agreement supported by a con- sideration. Whitcomb v. Nat. Exchange Bank, 123 Md. 612. § 123. Unintentional cancellation — burden of proof. — A cancellation made unintentionally, or under a mis- take, or without authority of the holder, is inopera- tive ; 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 cancellation was made unintentionally, or under a mistake or without authority. Burden of proof. — Upon the trial, the signature of the indorser appeared to have been cancelled, and the plaintiff claimed that it was cancelled without authority : Held, that, under the statute, the burden of showing this was on the plaintiff. McCormick v. Shea, 50 Misc. (N. T.) 592. § 124. Alteration of instrument — effect of. — Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, 206 THE NEGOTIABLE INSTRUMENTS LAW. except as against a party who has himself made, au- thorized or assented to the alteration and subsequent indorsers. 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. Variant readings. — In Illinois the words " fraudulently altered by the holder " are substituted for " materially altered." In Wisconsin the words ' ' orally or in writing ' ' are interpolated after the words " authorized or assented." In South Dakota the words " by the holder " are interpolated after the word " altered." Burden of proof. — The burden of explaining an apparent al- teration is upon the party producing the paper. Gowdey v. Rob- bins, 3 App. Div. 353; Ofenstein v. Bryan, 20 App. Cas. D. C. 1; Town of Solon v. Williamsburgh Savings Bank, 114 N. Y. 122, 135; Simpson v. Davis, 119 Mass. 269; Gettysburg National Bank v. Chisolm, 169 Pa. St. 564; Citizen's Nat. Bank v. Williams, 174 Pa. St. 66 ; Paine v. Edsell, 19 Pa. St. 178. If the paper appears to have been altered he must explain this appearance; but if, on the other hand, however material in fact the alteration may be, there is upon the face of the paper no evidence or mark raising a suspicion thereof, the holder is not called upon to make an explana- tion or to introduce any testimony until the alteration has been shown by sufficient evidence outside of the paper. Harris v. The Bank of Jacksonville, 20 Fla. 501, 512. And where there is noth- ing on the face of the paper and no other evidence to indicate an alteration, there is no question to be submitted to the jury. Brown v. Marmaduke, 248 Pa. St. 247. But see Ensign v. Fogg, 177 Mich. 317, where it was held that if there is nothing suspicious upon the face of the paper beyond the fact that an erasure is manifest, the presumption is that any alteration appearing thereon was made before the execution of the instrument. In Massachu- setts when a note or bill is offered which appears to have been altered, the practice is for the presiding judge to determine, upon inspection of the paper and in view of the state of the evidence at the time, whether further proof in explanation of the altera- tion shall be required before the instrument is admitted. Wood v. Shelley, 196 Mass. 114. DISCHARGE OF NEGOTIABLE INSTRUMENTS. 207 Recovery according to original tenor. — The provision authoriz- ing a recovery by a holder in due course according to the original tenor of the instrument changes the law in some states. Prior to the statute the rule in many jurisdictions was that where the alter- ation was made without the consent of the party sought to be charged there could be no recovery even by an innocent holder for value, and even though he sought to recover on the instrument as it was before the alteration. Gettysburg Nat. Bank v. Chisolm, 169 Pa. St. 564; Hartley v. Carboy, 150 Pa. St. 23; Wood v. Steele, 6 WalL 80; Citizen's Nat. Bank v. Richmond, 121 Mass. 110; Tower v. Stanley, 220 Mass. 429. In the case first cited it was said: " In the present case, the alteration was not probably made by an agent of the payee, and it was entirely without the knowledge and consent of the defendant, who was the maker of the note. Of course, the payee could not recover on the note for any amount, be- cause it was an altered instrument, and is avoided altogether by public policy. Certainly he could riot restore life to it by passing it over to an indorsee." But compare Gleason v. Hamilton, 138 N. Y. 353; Town of Solon v. Williamsburgh Savings Bank, 114 N. T. 122, 134. For cases applying this provision of the statute, see Colonial Nat. Bank v. Duerr, 108 App. Div. (N. Y.) 215; Moskowitz v. Deutsch, 46 Misc. (N. Y.) 602; Thorpe v. White, 188 Mass. 333; Broadway Nat. Bank v. Heffernan, 220 Mass. 247; Stone v. Sargent, Id. 245; Munroe v. Stanley, Id. 438; Jeffrey v. Rosenfeld, 179 Mass. 506; Levy v. Arons, 81 Misc. (N. Y.) 165. See also Builders' Lime & Cement Co. v. Weimer, 151 N. W. Rep. (Iowa) 100. Same subject — Paper overdue. — The provision authorizing a re- covery according to the original tenor of the instrument has no application to paper transferred when past due, since the holder in such case is not a holder in due course. Fairfield Nat. Bank v. Hammer, 95 Atl. Rep. (Conn.) 31. Raised check. — Where a bank has paid a raised check, an ac- commodation indorser may be held for the difference between the check as originally drawn and the amount to which it was raised. Smith v. State Bank, 104 N. Y. Supp. 750. Alteration in name of payee.— The provision authorizing a re- covery according to the original tenor of the instrument can have no application where the alteration is in the name of the payee. 208 THE NEGOTIABLE INSTRUMENTS LAW. First Nat. Bank v. Girdley, 112 App. Div. (N. Y.) 398; Andrews v. Sibley, 220 Mass. 10. Difference between filling in blanks and alteration. — Where th« paper has been delivered with the amount blank, it is no defense against a bona fide holder for value for the maker to show that the authority has been exceeded in filling such blank, and a greater amount written than was intended. But if the instrument was complete without blanks, at the time of its delivery, the fraudulent increase of the amount by taking advantage of a space left without such intention will constitute a material alteration. In the latter case, under section 124, payment may be enforced according to the original tenor of the instrument. Nat. Exchange Bank v. Lester, 194 N. T. 461. The difference between the two cases is well illus- trated by the case of First Nat. Bank of Wilkes Barre v. Barnum, 160 Fed. Rep. 245. There B, for the accommodation of his brother, placed his indorsement on a printed form of promissory note, which contained the words " at the Second National Bank of Wilkes Barre, Pa.," and the brother, besides filling out the blanks, struck out the name of the second National Bank, and inserted the name of an- other bank, which discounted the note: Held, that while the filing out of the blanks was impliedly authorized, the change of the name of the bank where the instrument was to be payable was a material alteration and discharged the indorser. Where blank spaces are left in paper. — There is no obligation resting upon the maker or drawer to so prepare the paper that no one can successfully tamper with it; and he is not rendered liable for an increased sum by the fact that blank spaces were left before the words and figures specifying the amount so as to invite altera- tion. Nat. Exchange Bank v. Lester, 194 N. Y. 461. Compare Timble v. Garfield Nat. Bank, 121 App. Div. (N. Y.) 870. See also note to section 14. Pleading. — In cases of mere spoliation, where the original tenor was apparent upon inspection, it has been held sufficient to declare on the instrument in such form, and upon the spoliation being shown, there is no variance between the allegation and the proof. Brum v. Drum, 133 Mass. 566. A similar rule would now seem to apply where there was proof that the plaintiff was not a party to the alteration. Whether the holder of a note originally stated to be payable " with interest," no rate being named, and altered by the DISCHARGE OF NEGOTIABLE INSTRUMENTS. 209 insertion of the words " seven per cent.," must declare on the note as it was before the alteration in order to recover interest upon it at six per cent., quaere. Massachusetts National Bank v. Snow, 187 Mass. 160. § 125. What constitutes a material alteration. — Any alteration which changes: 1. The date; 2. The sum payable, either for principal or interest; 3. The time or place of payment; 4. The number or the relations of the parties; 5. The medium or currency in which payment is to be made; Or which adds a place of payment where no place of payment is specified, or any other change or addi- tion which alters the effect of the instrument in any respect, is a material alteration. Alteration in date. — See National Ulster County Bank v. Mad- den, 114 N. Y. 280; Crawford v. "West Side Bank, 100 N. T. 50, 56; Moskowitz v. Deutsh, 46 Misc. (N. T.) 603; Wood v. Steele, 6 Wall. 80; Newman v. King, 54 Ohio St. 273; Pensecola State Bank v. Melton, 210 Fed. Kep. 57. Amount of principal. — See Batchelder v. White, 80 Va. 103. The alteration is material, though the amount is lessened, as where $500 was changed to $400. Hewins v. Cargill, 67 Me. 554. Rate of interest. — Adding the words "with interest at six per cent." is a material alteration. Broadway Nat. Bank v. Heffernan, 220 Mass. 247; Columbia Distilling Co. v. Rech, 151 App. Div. (N. Y.) 128; Gettysburg Nat. Bank v. Chisolm, 169 Pa. St. 564. So, the addition of the words " with interest at eight per cent, per annum after due until paid." Colonial Nat. Bank v. Duerr, 108 App. Div. (N. Y.) 215. Or merely the words "with interest." Dnnbrow v. Gelb, 72 Misc. (N. Y.) 400. Time of payment. — Changing the date of maturity from May 15, 1907, to May 15, 1908, is a material alteration. Pensecola State Bank v. Melton, 210 Fed. Rep. 57. See also Rogers v. Bosburgh, 14 210 THE NEGOTIABLE INSTRUMENTS LAW. 87 N. Y. 208; Weyman v. Teomans, 84 HI. 403; Miller v. Gilleland, 19 Pa. St. 119. Place of payment. — See Tidmarsh v. Grover, 1 Maule & S. 735; Bank of Ohio Valley v. Lockwood, 13 W. Va. 392. A note was made upon a printed blank in which the People's Bank of " S " was named as the place of payment. After the note was signed, the name People's Bank was struck out and the name First National Bank of " S " written in, the latter having been organized as suc- cessor to the People's Bank and which continued business in the same banking house: Held, that the alteration was not material. Melton v. Pensacola Bank & Trust Co., 190 Fed. Eep. 126, 111 C. C. A. 166. Change in parties. — Changing the name of the payee. First Nat. Bank v. Gridley, 112 App. Div. (N. Y.) 398; Hoffman v. Planter's Bank, 99 Va. 480. The indorsement of a third person on the back of a note underneath the signature of the payee, is conclusively presumed to be that of a subsequent indorser, and not that of a joint maker or surety, and hence it may not be re- garded as a material alteration. Ensign v. Fogg, 177 Mich. 317. In McCaughey v. Smith, 27 N. Y. 39, and Brownell v. Winnie, 29 N. Y. 400, it was held that the addition of another name as maker, where there was but one, was not a material alteration, the additional maker being regarded as a guarantor. The statute has probably changed this rule. As to medium of payment. — Thus, adding to a note the words " in gold coin " is a material alteration. Wills v. Wilson, 3 Oregon, 308. See also Angle v. Insurance Co., 92 IT. S. 330; Church v. Howard, 17 Hun, 5; Darwin v. Eippey, 63 N. C. 318; Bogarth v. Breedlove, 39 Tex. 561. Adding place of payment. — See Whitesides v. Northern Bank, 10 Bush, 501. Striking out stipulation. — Where the paper contains a stipula- tion which renders it non-negotiable, the striking out of such stipu- lation is a material alteration, since it changes the instrument from a non-negotiable to a negotiable instrument. Fanners' Bank v. Scoggins, 41 Okla. 719. Where paper payable to order is changed to bearer. — A change in a note payable to order by striking out the words " or order " and DISCHARGE OF NEGOTIABLE INSTRUMENTS. 211 inserting after the name of the payee the words " or bearer " is a ma- terial alteration. Builder's Lime & Cement Co. v. Weimer, 151 N. W. Rep. (Iowa) 100. Addition of special agreement. — See Weyerhauser v. Dun, 100 N. Y. 150. Adding name of attesting witness. — In some states it has been held that the addition of the name of an attesting witness is a ma- terial alteration. Smith v. Dunham, 8 Pick. 246; Homer v. Wal- lis, 11 Mass. 310; Thornton v. Appleton, 29 Me. 298; Brackett v. Mountfort, 11 Me. 115. But in those states the attestation extends the liability of the maker under the statute of limitations, and so changes to some extent the nature of the contract and enlarges its obligations. In other states where such addition would not have this effect the alteration would not be material. Fuller v. Green, 64 Wis. 169. 212 THE NEGOTIABLE INSTRUMENTS LAW. ARTICLE X. Bills of Exchange; Form and Interpretation. Section 126. Bill of exchange denned. 127. Bill not an assignment of funds in hands of drawee. 128. Bill addressed to more than one drawee. 129. Inland and foreign bills of exchange. 130. When bill may be treated as promissory note. 131. Referee in case of need. § 126. Bill of exchange defined. — A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, re- quiring 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. Essentials of a bill. — The definition given by Justice Byles, which has often been cited, is "A bill of exchange is an uncondi- tional written order from A to B directing B to pay C a sum cer- tain of money therein named." Byles on Bills, 1. But the objec- tion to this definition is that it omits all reference to the negotiable character of the instrument. It is essential that the drawer should require, and not merely request, payment; but if the language im- ports a direction to pay, it is sufficient, though the direction is ex- pressed in words of civility, as for example, where the terms were " Mr. Nelson will much oblige Mr. Webb by paying J. Buff or or- der, twenty guineas on his account." Ruff v. Webb, 1 Esp. 129. Formerly it seems to have been essential to the validity of a bill of exchange that it should be drawn in one place and payable in an- other. See note of Mr. Sergeant Manning to Miller v. Thompson, 4 M. & G. 260. BILLS OF EXCHANGE; FORM AND INTERPRETATION. 21iJ § 127. Bill not an assignment of funds in hands of drawee. — A bill of itself does not operate as an assign- ment of the funds in the hands of the drawee available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same. Bole at common law. — This section does not change the law. See Harris v. Clark, 3 N. T. 93; Mandeville v. Welch, 5 Wheat. 286; Brill v. Tuttle, 81 1ST. T. 454; Alger v. Scott, 54 N. Y. 14; Munger v. Shannon, 61 N. Y. 251; Commonwealth v. Am. Life Ins. Co., 167 Pa. St. 586; Eeilly v. Daly, 159 Pa. St. 605; Bailey v. Southwestern R. B. Bank, 11 Fla. 266 ; Eambo v. First State Bank, 88 Kan. 257. For a case applying this section, see Clayton Town Site Co. v. Clayton Drug Co., 147 Pac. Eep. (N. M.) 460. As to checks, see section 189 and note. When order amounts to an assignment. — When, for a valuable consideration from the payee, the order is drawn upon a third per- son and made payable out of a particular fund, then due or to be- come due, from him to the drawer, the delivery of the order to the payee operates as an assignment pro tanto of the fund, and the drawee is bound, after notice of such assignment, to apply the fund, as it accrues, to the payment of the order and to no other purpose, and the payee may, by action, compel such application. Brill v. Tuttle, 81 N". Y. 454, 457. Assignment by implication. — An intention to make an assign- ment of the funds in the hands of the drawee may be inferred from the circumstances attending the delivery of the draft and the con- duct of the parties. Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83. § 128. Bill addressed to more than one drawee. — 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. Variant readings. — In Wisconsin the words " or in succession " at the end of the section are omitted. '£L± THE NEGOTIABLE INSTRUMENTS LAW. § 129. Inland and foreign bills of exchange.— 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 tbe contrary appears on the face of the bill, the holder may treat it as an inland bill. Rule at common law. — It had long been settled by authority that a bill drawn in one state and addressed to the drawee in an- other state is a foreign bill. Commercial Bank of Kentucky v. Varnum, 49 N. Y. 269; Life Insurance Company v. Pendleton, 112 U. S. 696; Armstrong v. American Ex. National Bank, 133 U. S. 433; Buckner v. Finley, 2 Peters, 586; Joseph v. Solomon, 19 Fir. 623; Phoenix Bank v. Hussey, 12 Pick. 483; Thompson v. Com mercial Bank, 3 Caldw. 49; Union Bank v. Fowlkes, 2 Sneed, 55C Foreign bill under the statute. — Under this section a bill ad dressed by a firm doing business in New York to a firm doin;_ business in Visnna is a foreign bill. Amsinck v. Rogers, 180 N. Y. 252; Casper v. Kuhne, 159 App. Div. 389. So, a check datec in one state, and drawn upon a bank in another state, is a foreign bill. Mankey v. Hoyt, 27 S. D. 561. Cause of action — Locality of. — Where payment of a demand bill of exchange, drawn on a New York bank, is refused, a cause oi action arises in this state in favor of the holder against the drawer. Riddle v. Bank of Montreal, 145 App. Div. (N. Y.) 207. § 130. When bill may be treated as promissory note. — Where in a bill the 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. Variant readings. — In Wisconsin the words " or a person," be- fore the words " not having capacity to contract," are omitted. Bill drawn by agent upon his principal. — A draft drawn by an agent upon his principal by authority of the latter, is equivalent to a draft drawn by the principal and may be treated as a promissory BILLS OF EXCHANGE; FORM AND INTERPRETATION. 215 note under this section. First Nat. Bank v. Home Ins. Co., 16 N. M. 66; Clemens v. Staunton Co., 61 Wash. 419. § 131. Referee in case of need. — The drawer of a bill and any indorser may insert thereon 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 non- acceptance or non-payment. 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 heed or not as he may see fit. Variant reading. — By an error in engrossing, the word "thereon" is substituted for therein. How referee indicated. — The usual form is "In case of need, apply to Messrs. C. and D, at E." Chitty on Bilk, 165. 216 THE NEGOTIABLE INSTRUMENTS LAW. ARTICLE XL Acceptance op Bills of Exchange. Section 132. Acceptance — how made — form of. 133. Holder entitled to acceptance on face of bill. 134. Acceptance by separate instrument. 135. Promise to accept — when equivalent to acceptance. 136. Time allowed drawee to accept. 137. Liability of drawee retaining or destroy- ing bill. 138. Where bill incomplete, etc. 139. Kinds of acceptances. 140. Acceptance to pay at particular place. 141. Qualified acceptance. 142. Eights of parties as to qualified accept- ance. § 132. Acceptance — how made — form of. — The ac- ceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. Tt must not express that the drawee will perform his promise by any other means than the payment of money. Nature of contract. — The acceptance is a response to the direc- tion contained in the bill, and the language of the bill anj the acceptance are but parts of one entire contract in writing. Meyer v. Beardsley, 29 N. J. Law, 236. But this contract is regarded aa a new contract. Superior City v. Ripley, 138 U. S. 93. How acceptance made. — The usual mode of making an accept- ance is by writing the word "accepted," and subscribing the drawee's name. Bylea on Bills, 190. But the drawee's signature ACCEPTANCE OF BILLS OF EXCHANGE. 217 alone is sufficient. Spear v. Pratt, 2 Hill, 582; Wheeler v. Web- ster, 1 E. D. Smith, 1. Acceptance on bill. — The English Bills of Exchange Act, follow- ing previous English statutes (1 and 2 George IV., C. 78; 19 and 20 Victoria, C. 78) requires that the acceptance be written on the bill. The American statutes do not generally require this (see 1 Rev. Stat., N. Y., 768, section 6; Laws of Pa., 1881, 17); and such a requirement would sometimes work inconvenience. Thus, it has been held that a bank can accept a check by telegraph, and such an acceptance has been deemed to be within the terms of a statute requiring acceptances to be in writing; but to re- quire the acceptance to be on the instrument itself would preclude the giving of an acceptance by telegraph either by a bank or by any other drawee. See next section. Oral acceptance. — At common law an oral acceptance was suf- ficient. Scudder v. Union Bank, 91 U. S. 406; Hall v. Cordell, 142 U. S. 116; Jones v. Council Bluffs Branch, etc., 34 111. 313; Sturges v. Chicago Fourth Nat. Back, 75 111. 595 ; Ward v. Allen, 2 Mete. 53; Cook v. Baldwin, 120 Mass. 317. The introduction of this doctrine, however, was often regretted. In Clark v. Coch, 4 East. 72, Lawrence, J., said: "It would have been much better doctrine if it had been originally determined that nothing else should amount to an acceptance than a written acceptance on the bill itself." Necessity for written acceptance. — The provision of this section that the acceptance must be in writing applied in Izzo v. Luding- ton, 79 App. Div. (N. Y.) 272; Faircloth-Byrd Mer. Co. v. Adkin- son, 167 Ala. 344; Hanna v. McCrory, 141 Pac. Rep. (N. M.) 998; Nelson v. Nelson Bennett Co., 31 Wash. 116; Wadhams v. Port- land Elc. Ry. Co., 37 Wash. 86; Frederick v. Spokane Grain Co., 47 Wash. 85; Clayton Town Site Co. v. Clayton Drug Co., 147 Pac. Rep. (N. M.) 460. Promise to pay check. — As the statute requires all acceptances to be in writing, a bank cannot be held upon the oral promise of one of its officers to pay a check. Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142; Rambo v. First State Bank of Argen- tine, 88 Kan. 257; Hanna v. McCrory, 141 Pac. Rep. (N. M.) 998- Ballen v. Bank of Krenlin, 37 Okla. 112. Thus, where the 218 THE NEGOTIABLE INSTRUMENTS LAW. payee of a check visited the bank on which the check was drawn and was assured that the drawer had sufficient funds on deposit, and that if the check were deposited in the payee's bank it would be honored, and the drawer withdrew his entire deposit before the check was presented: Meld, that under this section the bank was not liable. Ewing v. Citizens' Nat. Bank, 162 Ky. 551. Acceptance by telegraph. — H. sent a telegram to M. reading "Will you wire me that you will honor draft for $300," and M. telegraphed back, ' ' I will : ' ' Held, that this was a sufficient acceptance under the statute. Oil Well Supply Co. v. MacMur- phy, 119 Minn. 500. See also First Nat. Bank v. Muskogee Pipe Line Co., 40 Okla. 603; North Atchison Bank v. Garretson, 51 Fed. Eep. 167. Delivery. — The acceptance is incomplete until delivery or noti- fication. First Nat. Bank of Murfreesboro v. First Nat. Bank of Nashville, 154 S. W. Rep. (Tenn.) 965. Pleading. — As the statute requires the acceptance to be in writ- ing, the fact that it was so given must be pleaded. Wadhams v. Portland, etc., Ry. Co., 37 Wash. 86. § 133. Holder entitled to acceptance on face of bill. — The holder of a bill presenting the same for accept- ance may require that the acceptance be written on the bill and, if such request is refused, may treat the bill as dishonored. Source of section. — See 1 Rev. Stat., N. Y., section 9. § 134. Acceptance by separate instrument. — 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. Variant readings. — In Illinois the words " to whom it is shown and," after the word "person" and before the word "who," are omitted. Source of section. — See 1 Rev. Stat.. N. Y.. 768. section 7. ACCEPTANCE OF BILLS OF EXCHANGE. 219 Where paper is attached to draft. — A written agreement modi- fying the terms of an accepted bill and securely attached thereto is a part thereof and cannot be lawfully detached therefrom with- out the maker's consent. Bothell v. Schweister, 84 Neb. 271. Letter accompanying bill. — Since the acceptance need not be on the instrument itself, a letter accompanying the bill may be used to qualify or limit an acceptance indorsed on the bill. Lehnhard v. Sidway, 160 Mo. App. 83. But, of course, an innocent holder would not be affected by anything contained in the letter. § 135. Promise to accept — when equivalent to ac- ceptance. — An unconditional promise in writing to ac- cept 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. Variant readings. — In Illinois the words "or after " are in- terpolated after the word " before." Source of section. — See 1 Eev. Stat., N. Y., 768, section 8. The section is merely declaratory of the common law. Muller v. Kling, 149 App. Div. (N. Y.) 176. Oral promise to accept. — The requirement that the promise shall be in writing is wholly statutory. At common law an oral promise was sufficient. Dull v. Bricker, 76 Pa. St. 255; Scudder v. Union Nat. Bank, 91 U. S. 406; Williams v. Cinans, 2 Gr. (N. J.) 239; Jarvis v. Wilson, 46 Conn. 91. Nature of the promise. — The promise must be unconditional. Germania National Bank v. Tooke, 101 N. Y. 442 ; Shover v. West- ern Union Telegraph Co., 57 N. Y. 459, 463. But restrictions as to the time or amount do not prevent the promise from being treated as unconditional and absolute as to drafts within the limitation. Bank of Michigan v. Ely, 17 Wend. 508; Ulster Co. Bank v. Mc- Farlan, 5 Hill, 432. And an authority given to an agent to draw from time to time, as may be necessary in the purchase of goods, or as he may need funds, operates simply as an instruction to the agent, and does not, as to persons dealing with him in good faith, constitute a condition. Merchants' Bank v. Griswold, 72 N. Y. 472; Bank of Michigan v. Ely, 17 Wend. 508. As to what will 220 THE NEGOTIABLE INSTBTJMENTS LAW. amount to a promise to accept, see Bank of Morganton v. Hay, 143 N. C. 326. Representation of agent. — The party dealing with the agent may rely upon his representation, express or implied, that the draft is in the business of the principal, or that the funds are needed, and he is protected, although it turns out that the representation is false. N. T. & N. H. E. E. Co. v. Schuyler, 34 N. Y. 30; Mer- chants' Bank v. Griswold, 72 N. Y. 472. Variance. — Where one has agreed to accept a draft for a cer- tain sum, he cannot refuse payment because the draft, when pre- sented, includes the words " with exchange," no place of exchange being named and the draft being payable at the residence of the drawee, and the evidence failing to show that exchange was sought to be charged or collected. First National Bank v. Muskogee Pipe Line Co., 40 Okla. 603. Promise by telegraph. — A promise to accept given by telegraph satisfies the requirement that the promise shall be in writing. John- son v. Clark, 39 N. Y. 216; North Atchison Bank v. Garretson, 51 Fed. Eep. 167 ; Franklin Bank v. Lynch, 52 Md. 270. As to coun- termanding by telegraph an offer to accept, see First Nat. Bank v. Clark, 61 Md. 400. Reliance upon promise. — The holder must acquire the bill on the faith of the promise to accept. Howland v. Carson, 15 Pa. St. 453. Where promise is conditional. — An agreement to accept is still but an agreement, and if it is conditional, and a third person takes the bill knowing of the conditions, he takes subject to such con- ditions. Muller v. Kling, 149 App. Div. (N. T.) 176, 181; Cor- rugating Co. v. Taylor, 95 Kans. 562. In the case first cited the court said: "To be sure, the Negotiable Instruments Law only covers the case of an unconditional promise to accept, doubtless because, in general, conditions attached to commercial paper de- prive it of the attribute of negotiability, though an acceptance of a bill may be conditional." By what law governed. — A promise to accept is governed by the law of the state where it is made, notwithstanding it is to be per- formed elsewhere. Scott v. Pilkington, 15 Abb. Pr. 280. ACCEPTANCE OF BILLS Off EXCHANGE. 221 § 136. Time allowed drawee to accept. — 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 day of pre- sentation. Reason for the rule. — When the bill is presented, it is reason- able that the drawee should be allowed some time to deliberate whether he will accept or not ; and by the rule of the law merchant he was entitled to demand twenty-four hours for this purpose, and the holder was justified in leaving the bill with him for that period. Byles on Bills, 182. See also Case v. Burt, 15 Mich. 82. See next section. By the former statute of Massachusetts, the drawee had until two o'clock on the day following. (Public Stat- utes, 1882, ch. 77, section 17.) Check presented for acceptance. — Where a check is presented for acceptance the bank may, if it sees fit, demand twenty-four hours in which to decide whether to accept or not. First Nat. Bank of Murfreesboro v. First Nat. Bank of Nashville, 154 S. W. Rep. (Tenn.) 965. In the case cited the court appears to confuse the case of a check presented for payment with the case of a pre- sentment for acceptance. Date of acceptance. — The provision that the acceptance is to date as of the day of presentation conforms to what was the common practice; but there were no judicial decisions upon the point. § 137. Liability of drawee retaining or destroying bill. — Where a drawee to whom a bill is delivered for acceptance 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 ac- cepted or non-accepted to the holder, he will be deemed to have accepted the same. Variant readings. — In Illinois and South Dakota this section ia omitted. In Wisconsin the following is added at the end of the section: " Mere retention of the bill is not acceptance." In Pennsylvania the section has been amended by the addition of a 222 THE NEGOTIABLE INSTRUMENTS LAW. proviso as follows: " Provided, that the mere retention of such bill by the drawee, unless its return has been demanded, will not amount to an acceptance ; and provided further that the provisions of this section shall not apply to checks." Laws 1909, No. 169. See note below. Mere omission to return bill. — This section was taken without change from a New York statute which had been in force for many years. 1 Rev. Stat., N. Y., 769, section 11. This statute had been construed by the Court of Appeals, which held that the refusal spoken of meant an affirmative act, and that a mere omission to return, where there was no demand, was not a "refusal" within the meaning of the statute. Matteson v. Moulton, 79 N. Y. 627. See also Westberg v. Chicago Lumber & Coal Co.. 117 Wis. 589. And this seems to be the plain import of the langauge used. But the Supreme Court of Pennsylvania, construing the section, held that mere neglect to return the paper may constitute such a re- fusal. Wisner v. First Nat. Bank, 220 Pa. St. 21. In this case cer- tain checks were forwarded to the drawee bank for collection, and the drawer not having sufficient funds on deposit to pay them, the bank delivered them for protest to a notary public, who held them without protesting them, or giving notice of dishonor, and in this way the checks were retained for more than two days after their delivery to the bank: — Held, that such retention of the checks by the bank was an acceptance within this section. But it is difficult to see how the statute could apply to such a state of facts. It refers only to cases where the paper is presented for acceptance; and where checks are remitted to the drawee bank, the obvious purpose is to present them for payment, and not mere acceptance. What the holder desires in such a case, is that the bank shall remit the money, not that it shall return the check with its acceptance placed thereon. The decision of the Supreme Court of Pennsylvania referred to above led to the amendment of 1909; and now in that state all acceptances of checks must be in writing, and retention by the drawee cannot, in the case of a check, amount to an acceptance. Union Nat. Bank v. Franklin Nat. Bank, 249 Pa. St. 375. See note "Variant Readings" above. Non-negotiable paper. — This section has no application where the bill is non-negotiable. First Nat. Bank of Omaha v. Whitmore, 177 Fed. Rep. 397. ACCEPTANCE OF BILLS OF EXCHANGE. 223 § 138. Where bill incomplete or has been dishonored. — 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 previ- ous refusal to accept, or by non-payment. But when a bill payable after sight is dishonored by non-accept- ance and the drawee subsequently accepts it, the hol- der, in the absence of any different agreement, is enti- tled to have the bill accepted as of the date of the first presentment. Variant readings. — In South Dakota the word " payable " is in- terpolated between the words " bill " and " accepted " near the end of the section. This is probably an error in engrossing. § 139. Kinds of acceptances. — 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 varies the effect of the bill as drawn. Place of payment. — Where a bill is addressed to the drawee in one place, and is accepted payable in another, this is a material variation. Walker v. Bank of State of N. Y., 13 Barb. 636; Ni- agara Bank v. Fairman Co., 31 Barb. 403. But a bill addressed generally to a drawee in a city may be accepted payable at a particular bank in that city. Troy City Bank v. Lanman, 19 N. Y. 477; Meyers v. Standart, 11 Ohio St. 29. And a bill so accepted is equivalent to a check. See section 87. § 140. Acceptance to pay at particular place. — An acceptance to pay at a particular place is a general ac- ceptance, unless it expressly states that the bill is to be paid there only and not elsewhere. Acceptance payable at a particular place. — Before the enact- ment of the 1 and 2 George IV., c. 78, it was a point much dis- i&4 THE NEGOTIABLE INSTRUMENTS LAW. puted whether, if a bill payable generally was accepted payable at a particular place, such an acceptance was a qualified one. Byles on Bills, 194. The House of Lords finally held that an acceptance payable at a particular place was a qualified accept- ance, rendering it necessary, in an action against the acceptor, to aver and prove presentment at such place. Rome v. Young, 2 Brod. & Bing. 165, 2 Bligh, 391. This led to the passage of the statute above mentioned, called Sergeant Onslow's act, which pro- vided that an acceptance payable at a particular place should be deemed a general acceptance unless expressed to be payable there "only and not otherwise or elsewhere." In the United States the weight of authority has been contrary to the decision of the House of Lords, and in favor of the rule as stated in this section. Wal- lace v. McConnell, 13 Peters, 136. See also note to section 70. § 141. Qualified acceptance. — An acceptance is quali- fied, which is: 1. Conditional, that is to say, which makes payment by the acceptor dependent on the fulfillment of a condi- tion 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; 4. Qualified as to time; 5. The acceptance of some one or more of the draw- ees, but not of all. Where payment is made to depend upon condition. — Such an ac- ceptance does not become due until the happening of the contin- gency upon which the bill is accepted. Brockway v. Allen, 17 Wend. 40; Newhall v. Clark, 3 Cush. 376; Myrick v. Merritt, 22 Fla. 335 ; Marshall v. Burnby, 25 Ma. 619. A telegram in the following form "Will pay McMillan's draft on me two fifty for horses," is not a conditional acceptance and the bank cashing the same may hold the acceptor though the money was applied by the drawer to another purpose. State Bank of Beaver County v. Bradstreet, 89 Neb. 186. ACCEPTANCE OF BILLS OF EXCHANGE. 225 § 142. Rights of parties as to qualified acceptance. — 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 non-acceptance. Where a qualified acceptance is taken the drawer and indorsers are discharged from liability on the bill, un- less they have expressly or impliedly authorized the holder to take a qualified acceptance, or subesquently assent thereto. When the drawer or an indorser re- ceives notice of a qualified' acceptance he must, within a reasonable time, express his dissent to the holder, or he will be deemed to have assented thereto. Liability where qualified acceptance taken. — But if the holder receives such an acceptance he can claim payment only according to the condition or qualification. Cline v. Miller, 8 Md. 274. Duty of collecting agent. — An agent for collection, as, for ex- ample, a bank, has no authority to receive anything short of an explicit and unqualified acceptance. "Walker v. New York Staw Bank, 9 N. Y. 582. 15 226 THE NEGOTIABLE INSTRUMENTS LAW. ARTICLE XII. Presentment for Acceptance. Section 143. When presentment for acceptance must be made. 144. When failure to present releases drawer and indorser. 145. Requirements as to presentment. 146. On what days presentment may be made. 147. Delay caused by previous presentment. 148. When presentment is excused. 149. When dishonored by non-acceptance. 150. Duty of holder where bill not accepted. 151. Rights of holder where bill not accepted. § 143. When presentment for acceptance must be made. — Presentment for acceptance must be made: 1. Where the bill is payable after sight, or in any other case, where presentment for acceptance is neces- sary in order to fix the maturity of the instrument; or 2. Where the bill expressly stipulates that it shall be presented 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 nec- essary in order to render any party to the bill liable. Where bill is payable at a day certain. — Though the statute does not require that a bill payable at a day certain or at a fixed time after its date shall be presented for acceptance, yet the holder has the right to so present it, and if acceptance be refused, may treat the bill as dishonored. Nat. Park Bank v. Saitta, 127 App. Div. (N. Y.) 624. And where a bank receives such a bill for collec- tion, its duty is to present the bill for acceptance without delay. For it is to the owner's interest that the bill should be so accepted, as only by accepting it does the drawee become bound to pay it,, PRESENTMENT FOE ACCEPTANCE. 227 and until such acceptance the owner has for his debtor only the drawer, and the step is one which a prudent man of business, ordinarily careful of his own interests, would take for his pro- tection. Allen v. Suydam, 17 Wend. 368; Nat. Park Bank v. Saitta, 127 App. Div. (N. Y.) 624. A bill payable at a fixed period from its date may be presented for acceptance at any time. Bachellor v. Priest, 12 Pick. 399; Oxford Bank v. Davis, 4 Cush. 188. When presentment for payment and not acceptance. — See First Nat. Bank of Omaha v. Whitmore, 177 Fed. Rep. 397. But com- pare Wisner v. First Nat. Bank, 220 Pa. St. 21 ; First Nat. Bank of Murfreesboro v. First Nat. Bank of Nashville, 154 S. W. Rep. (Tenn.) 965. § 144. When failure to present releases drawer and indorser. — Except as herein otherwise provided, the holder of a bill which is required by the next preceding section to be presented for acceptance must either pre- sent if for acceptance or negotiate it within a reason- able time. If he fails to do so, the drawer and all in- dorsers are discharged. Rule at common law. — This section does not change the law. See Robinson v. Ames, 20 Johns. 146; Gowan v. Jackson, 20 Johns. 176; Wallace v. Agry, 4 Mason, 333; Prescott Bank v. Coverly, 7 Gray, 217; Walsh v. Dort, 23 Wis. 334; Phoenix Ins. Co. v. Allen, 11 Mich. 30; Goupy v. Harden, 7 Taunt. 397. Delay in the mail. — A delay of the mail is a sufficient excuse for the omission to immediately present a bill for acceptance; and a presentation immediately after its reception is in time to charge the indorser. Walsh v. Blatchley, 6 Wis. 422. § 145. Requirements as to presentment. — Present- ment for acceptance must be made by or on behalf of the holder at a reasonable hour, on a business day, and before the bill is overdue, to the drawee or some per- son authorized to accept or refuse acceptance on his behalf; and 228 THE NEGOTIABLE INSTRUMENTS LAW. 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; 2. Where the drawee is dead, presentment may be made to his personal representative; 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. Variant reading. — In the New York Statute, by an error in engrossing, the word "his," before the word "behalf" has been omitted. Where bill addressed to two or more. — See Byles on Bills, 182. Authority of agent to accept. — The holder may require the pro- duction by the agent of a clear and explicit authority from his principal to accept in his name, and without its production may treat the bill as dishonored. " Daniel on Negotiable Instruments, section 487. Where one of the drawees accepts. — But if one of the drawees accepts he will be bound by his acceptance. Smith v. Melton, 133 Mass. 369. Where drawee is dead. — Presentment in such case is not neces- sary. See section 148. But as it will be convenient in most in- stances to have the bill duly protested, it is well to have some one designated to whom presentment can be made. § 146. On what days presentment may be made. — 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 eighty-five of this act. When Saturday is not PRESENTMENT FOR ACCEPTANCE. 229 otherwise a holiday, presentment for acceptance may be made before twelve o'clock noon on that day. Variant readings. — In Arizona, Kentucky and Wisconsin the last sentence is omitted; and in Colorado the last sentence reads: " When any day is in part a holiday, presentment for acceptance may be made during reasonable hours of the part of such day which is not a holiday." In North Carolina the word " other- wise " after the words " when Saturday is not " are omitted. § 147. Delay caused by previous presentment. — 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 drawers and indorsers. § 148. When presentment is excused. — Presentment for acceptance is excused and a bill may be treated as dishonored by non-acceptance 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, presentment cannot be made; 3. Where, although presentment has been irregular, acceptance has been refused on some other ground. Where drawee is dead. — Prior to the statute there was some doubt as to the proper course in this case. See Daniel on Nego- tiable Instruments, section 1178. Due diligence. — As to what will constitute due diligence, see Sulsbacker v. Bank of Charleston, 86 Tenn. 201. 230 THE NEGOTIABLE INSTRUMENTS LAW. § 149. When dishonored by non-acceptance. — A bill is dishonored by non-acceptance: 1. When it is duly presented for acceptance, and such an acceptance as is prescribed by this act is re- fused or cannot be obtained; or 2. When presentment for acceptance is excused and the bill is not accepted. § 150. Duty of holder where bill not accepted. — Where a bill is duly presented for acceptance and is not accepted within the prescribed time, the person presenting it must treat the bill as dishonored by non- acceptance or he loses the right of recourse against the drawer and indorsers. § 151. Eights of holder where bill not accepted. — When a bill is dishonored by non-acceptance, an im- mediate right of recourse against the drawers and in- dorsers accrues to the holder, and no presentment for payment is necessary. See Sterry v. Robinson, 1 Day (Conn.), U. PROTEST OF BILLS OF EXCHANGE. ^31 ARTICLE XIII. Protest. Section 152. In what cases protest necessary. 153. How protest made. 154. By whom protest made. 155. On what day to be made. 156. Where to be made. 157. Protest both for non-acceptance and non- payment. 158. Protest before maturity where acceptor insolvent. 159. When protest dispensed with. 160. Where bill lost, destroyed or wrongly de- tained. § 152. In what cases protest necessary. — Where a foreign bill appearing on its face to be such is dis- honored by non-acceptance, it must be duly protested for non-acceptance, and where such a bill which has not previously been dishonored by non-acceptance is dishonored by non-payment, it must be duly protested for non-payment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does not appear on its face to be a foreign bill, protest thereof in case of dishonor is unnecessary. Necessity for protest. — See Commercial Bank v. Varnum, 49 N. Y. 269, 275; Halliday v. McDougall, 20 Wend. 81; Dennistoun v. Stewart, 17 How. (U. S.) 606; Phoenix Bank v. Hussey, 12 Pick. 483. Protest is indispensable, and the proof cannot be sup- plied in any other way. Joseph v. Solomon, 19 Fla. 623. There are several reasons why protest is required in such cases: (1) for the sake of uniformity in international transactions; (2) be- cause it affords satisfactory evidence of dishonor to the drawer, who, from his residence abroad, might experience a difficulty in '£62 ±aii NEGOTIABLE INSTRUMENTS LAW. making inquiries on the subject and be compelled to rely on the representations of the holder; (3) because, as foreign courts give credit to the acts of a public functionary, the protest affords the most satisfactory evidence to charge an antecedent party. Byles, 256. Foreign and inland bills. — As to the distinction between foreign and inland bills, see section 129. As to protest of inland bills and promissory notes, see section 118. Foreign bill — Measure of damage. — The damages recoverable by the payee of a negotiable foreign bill of exchange protested for non-payment against the drawer may be deemed to be made up as follows: (1) The face of the bill; (2) interest thereon; (3) pro- test fees; (4) re-exchange, i. e., the additional expense of procur- ing a new bill for the same amount payable in the same place on the day of dishonor; or a percentage in lieu of such re-exchange in jurisdictions where it is prescribed by statute. Pavenstedt v. N. Y. Life Insurance Co., 203 N. Y. 91; Bank of United States v. United States, 2 How. (U. S.) 745, 764. § 153. How protest made. — The protest must be an- nexed 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. Annexing certificate to bill. — See Fulton v. MacCracken, 18 Md. 528. Signature of notary. — The signature of the notary may be printed. Bank of Cooperstown v. Woods, 28 N. Y. 561; Fulton v. MacCracken, 18 Md. 528. Seal of notary. — See Donegan v. Wood, 49 Ala. 242. In other cases it has been held that the official signature is all that is PROTEST. 233 required. Huffuker v. National Bank, 12 Bush. 293. When the court can perceive that a seal is attached thereto the protest is sufficiently authenticated; neither the seal nor the signature of the notary need be proved. Barry v. Crowly, 4 Gill (Md.) 194. Time of presentment. — In the case of a note, the statement in a notarial certificate that it was presented on a certain day is not conclusive upon the parties, but evidence is admissible to show that presentment was also made on another day. Reynolds v. Appleman, 41 Md. 615. Insufficient certificate. — A certificate of a notary which states that he presented a note for payment at a certain town and demanded payment, which was refused, but did not state to whom or at what place in the town it was presented, does not show such a presentation to the maker as will bind the indorser. Duckert v. Von Lilienthal, 11 Wis. 56. Certificate as evidence. — The notarial certificate of protest is competent, without further proof. This has often been so held in respect to foreign bills. Porter v. Judson, 1 Gray, 175; Pierce v. Indseth, 106 U. S. 546; Browne v. Philadelphia Bank, 6 S. & B. 484; Coruth v. Walker, 8 Wis. 252. For this purpose the different States of the Union are deemed foreign to each other, so that the notarial certificate of protest under seal is good on mere pro- duction. Townsley v. Sumrall, 2 Pet. 170; Halliday v. McDougall, 20 Wend. 81; Carter v. Burley, 9 N. H. 558, 566; Johnson v. Brown, 154 Mass. 105, 106. The certificate is evidence of the facts therein set forth, although the notary, when examined, has no recollection of them. Rossom v. Carroll, 90 Tenn. 90; Sherer v. Easton Bank, 33 Pa. St. 134. And the entries of a deceased notary in his register are admissible. Spann v. Baltzell, 1 Fla. 301; Por- ter v. Judson, 1 Gray, 175. When a notary has neglected to keep a record of the notice which he has served on the non-payment of a note, his oral testimony is admissible to prove its contents. Ter- bell v. Jones, 15 Wis. 253. Where the protest is exclusively relied upon to prove the necessary facts to fix liability upon the parties to be affected, it must contain sufficient averments to show that everything requisite has been done on the part of the holder, or his agent, to authorize the demand upon the indorser. People's Bank v. Brooke, 31 Md. 7. For a case where the protest was in- sufficient, see Maaon v. Kilcourse, 71 N. J. Law, 472, 473-474. 234 THE NEGOTIABLE INSTRUMENTS LAW. Of what facts certificate is evidence. — The statement in the cer- tificate that notice of dishonor has heen given is received as evi- dence of that fact. Barry v. Crowley, 4 Gill (Md.) 194; Rosson v. Carroll, 90 Term. 90; Legg v. Vinal, 165 Mass. 555; Zollner v. Mof- fitt, 226 Pa. St. 39. But the notary's certificate is not evidence of other collateral or independent facts it may contain, especially when such facts are not necessarily within the personal knowledge of the notary, or are of such a character as could not be estab- lished by his testimony if he were produced as a witness. Weems v. Farmers' Bank, 15 Md. 231. Thus, the statement that the party on whom the demand was made was " one of the administrators " of the acceptor, does not establish the facts of the death of the acceptor, and of the granting of letters of administration on his estate to such party. (Id.) So the words " after diligent search and inquiry to ascertain his whereabouts " are not admissible as evidence of such " diligent search and inquiry " having been made; for this is a conclusion of law which the notary could not legally draw or establish by his own testimony. Reier v. Strauss, 54 Md. 278. See also Ricketts v. Pendleton, 14 Md. 320; Duckert v. Von Lilienthal, 11 Wis. 56; Sumner v. Bowen, 2 Wis. 524; Adams v. Wright, 14 Wis. 408. § 154. By whom protest made. — 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. Variant readings. — In Washington the word " responsible " is substituted for " respectable " in the second subdivision. Ncessity for personal demand. — It would seem that, in the ab- sence of any custom or usage on the subject, the presentment and demand must be made by the notary in person. Commercial Bank v. Varnum, 49 N. Y. 269, 275; Ocean Nat. Bank v. Williams, 102 Mass. 141. Where notary is officer of bank owning paper. — A notary who is an officer of a bank may legally protest paper belonging to the bank. Nelson v. First National Bank, 69 Fed. Rep. 798; 29 U. S. PROTEST. 235 App. 554. And though he is also a stockholder in the bank. More- land's Assignee v. Citizens' Savings Bank, 97 Ky. 211. And it has been held that the cashier of a bank who is a notary may legally protest his own note which has been discounted by the bank. Dykman v. Northridge, 1 App. Div. (N. Y.) 26. Protest by resident.— See Todd v. Neal's Administrator, 49 Ala. 273. § 155. On what day to be made.— When a bill is protested, such protest must be made on the day of its dishonor, unless delay is excused as herein provided. "When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting. Noting. — The protest should be commenced, at least (and such an incipient protest is called noting), on the day on which accept- ance or payment is refused; but it may be drawn up and com- pleted at any time before the commencement of the suit, or even before or during the trial, and ante-dated accordingly. Byles on Bills, 257. § 156. Where to be made. — A bill must be protested at the place where it is dishonored, except that when a bill drawn payable at the place of business or resi- dence of some person other than the drawee, has been dishonored by non-acceptance, 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. Place of protest. — See Daniel on Neg. Inst., section 935; Byles on Bills, 257. Further presentment for payment. — See 3 William IV. Ch. 98; Daniel on Neg. Inst., section 935; Byles on Bills, 258. § 157. Protest both for non-acceptance and non-pay- ment. — A bill which has been protested for non ac- ceptance may be subsequently protested for non-pay- ment. 236 THE NEGOTIABLE INSTRUMENTS LAW. § 158. Protest before maturity where acceptor insol- vent. — Where the acceptor has been adjudged a bank- rupt 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. § 159. When protest dispensed with. — Protest is dis- pensed with by any circumstances which would dis- pense with notice of dishonor. Delay in noting or protesting is excused when delay is caused by circum- stances 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. § 160. Where bill is lost, or destroyed, or wrongly detained. — 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. Protest on copy of bill. — See Hinsdale v. Miles, 5 Conn. 331. Where bill is lost. — Loss of the instrument does not excuse de- mand and protest. Daniel on Negotiable Instruments, section 1464. See also section 148. ACCEPTANCE OF BILLS OF EXCHANGE FOE HONOB. 237 AKTICLE XIV. Acceptance fob Honoe. Section 161. When bill may be accepted for honor. 162. How acceptance for honor made. 163. When deemed to be an acceptance for honor of the drawer. 164. Liability of acceptor for honor. 165. Agreement of acceptor for honor. 166. Maturity of bill payable after sight ac- cepted for honor. 167. Protest required where bill accepted for honor. 168. Presentment for payment to acceptor for honor — how made. 169. When delay in making presentment is excused. 170. Dishonor of bill by acceptor for honor. § 161. When bill may be accepted for honor. — Where a bill of exchange has been protested for dishonor by non-acceptance or protested for better security, and is not overdue, any person not being a party already li- able thereon may, with the consent of the holder, inter- vene and accept the bill supra protest for the honor of any party liable thereon, or for the honor of the per- son for whose account the bill is drawn. The accept- ance 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 different person for the honor of another party. See Byles on Bills, 262-266. 238 THE NEGOTIABLE INSTRUMENTS LAW. § 162. How acceptance for honor made. — An accept- ance 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. § 163. When deemed to be an acceptance for 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. § 164. Liability of acceptor for honor. — 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. Necessity for presentment to drawee. — The acceptor for the honor of the drawer cannot maintain an action thereon against him without proof of its presentment to the drawee and non- acceptance or non-payment by him, and notice thereof to thp drawer. Baring v. Clark, 19 Pick. 220. § 165. Agreement of acceptor for honor. — The ac- ceptor 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 pro- tested for non-payment and notice of dishonor given to him. § 166. Maturity of bill payable after sight and ac- cepted for honor. — 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. § 167. Protest required where bill accepted for honor. — Where a dishonored bill has been accepted for honor ACCEPTANCE OF BILLS OF EXCHANGE FOR HONOR. 239 supra protest or contains a reference in case of need, it must be protested for non-payment before it is pre- sented for payment to the acceptor for honor or referee in case of need. § 168. Presentment for payment to acceptor for honor — how made. — 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 pro- test for non-payment 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 in section one hun- dred and four. Variant readings. — In North Carolina the words " in this chap- ter specified " are substituted for the number of the section. The number, of course, varies in the different states. In the commis- sioners' draft it was 104; and this is the number in many of the states. Time of presentment. — Doubts having arisen as to the day when the bill should be again presented to the acceptor for honor, or referee in ease of need, for payment, the 6 and 7 Will. 4, c. 58, enacted that it should not be necessary to present, or in case the acceptor for honor or referee live at a distance, to forward for presentment, till the day following that on which the bill becomes due. Byles on Bills, 263. § 169. When delay in making presentment is ex- cused. — The provisions of section eighty-one apply where there is delay in making presentment to the acceptor for honor or referee in case of need. § 170. Dishonor of bill by acceptor for honor. — When the bill is dishonored by the acceptor for honor it must be protested for non-payment by him. 240 THE NEGOTIABLE INSTRUMENTS LAW. AETIOLE XV. Payment fob Honor. Section 171. Who may make payment for honor. 172. Payment to be attested by notary. 173. Declaration before payment for honor. 174. Preference of parties offering to pay for honor. 175. Effect of payment — subsequent parties — rights of payer for honor. 176. Where holder refuses to receive payment supra protest. 177. Payer entitled to bill and protest. § 171. Who may make payment for honor. — Where a bill has been protested for non-payment, 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. See Byles on Bills, 267-269; Daniel on Neg. Inst., section 1254. § 172. Payment to be attested by notary. — The pay- ment 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 ap- pended to the protest or form an extension to it. Rule at common law. — See Byles on Bills, 267; Daniel on Neg. Inst., section 1258. ■payment by stranger. — A stranger to the drawer and indorser of a non-accepted bill may intervene supra protest to pay the same for the honor of the indorser or drawer. Konig v. Bayard, 1 Pet. 250. And it is no objection to this intervention that it has been PAYMENT OF BILLS OF EXCHANGE FOE HONOB. 241 done at the request and under the guarantee of the drawer who had refused acceptance or payment. § 173. Declaration before payment for honor. — The notarial act of honor must 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. § 174. Preference of parties offering to pay for honor. — 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. § 175. Effect of payment — subsequent parties — rights of payee for honor. — Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged, 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. See Daniel on Neg. Inst., section 1255. § 176. Where holder refuses to receive payment supra protest. — 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 dis- charged by such payment. § 177. Payer entitled to bill and protest. — The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dis- honor, is entitled to receive both the bill itself and the protest. 16 242 THE NEGOTIABLE INSTRUMENTS LAW. ARTICLE XVI. Bills in a Set. Section 178. All the parts constitute one bill. 179. Eights of holders where different parts are negotiated. 180. Liability of holder who indorses two or more parts of a set to different persons. 181. Acceptance of bills drawn in sets. 182. Payment by acceptor of bills drawn in sets. 183. Effect of discharging one of a set. § 178. All the parts constitute one bill. — Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitute one bill. See Byles on Bills, 387; Daniel on Neg. Inst., section 113; Dur- kin v. Cranston, 7 Johns. 442. It is immaterial that the payee received only the second part of the bill, as all the parts constitute one bill. Caras v. Thalmann, 138 App. Div. (N. Y.) 297. § 179. Rights of holders where different parts are negotiated. — Where two or more parts of a set are ne- gotiated to different holders in due course, the holder whose title first accrues is as between such holders the true owner of the bill. But nothing in this section affects the rights of a person who in due course accepts or pays the part first presented to him. See Byles on Bills, 389 ; Walsh v. Blatchley, 6 Wis. 422. § 180. Liability of holder who indorses two or more parts of a set to different persons. — Where the holder BILLS IN A SET. 243 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 him- self indorsed, as if such parts were separate bills. See Holdsworth v. Hunter, 10 C. B. 449; Byles on Bills, 389. § 181. Acceptance of bills drawn in sets. — The accept- ance may be written on any part, and it must be written on one part only. 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. See Holdsworth v. Hunter, 10 C. B. 449; Byles on Bills, 389. Either of the set may be presented for acceptance, and if not accepted a right of action arises, upon due notice, against the in- dorser. Dounes & Co. v. Church, 13 Peters, 205; Walsh v. Blatch- ley, 6 Wis. 422, 425. § 182. Payment by acceptor of bills drawn in sets.— 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 out- standing in the hands of a holder in due course, he is liable to the holder thereon. See Byles on Bills, 389. § 183. Effect of discharging one of a set. — 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. Variant readings. — In Wisconsin two sections, under the head- ing Damages on Bills, are inserted at this place, as follows : ' ' Sec- tion 1682. Whenever any bill of exchange drawn or indorsed within this state and payable without the limits of the United States shall be duly protested for non-acceptance or non-payment 244 THE NEGOTIABLE INSTRUMENTS LAW. the party liable for the contents of such bill shall, on due notice, and demand thereof, pay the same at the current rate of exchange at the time of the demand and damages at the rate of five per cent, upon the contents thereof, together with interest on the said contents, to be computed from the date of the protest; and said amount of contents, damages and interest shall be in full of all damages, charges and expenses. Section 1683. If any bill of exchange drawn upon any person or corporation out of this state, but within some state or territory of the United States, for the payment of money shall be duly presented for acceptance or pay- ment and protested for non-acceptance or non-payment the drawer or indorser thereof, due notice being given of such non-acceptance or non-payment, shall pay said bill with legal interest according to its tenor and five per cent, damages, together with costs and charges of protest." Rule at common law. — This section does not change the law. See Byles on Bills, 388. Discharge of drawee. — Where the drawee is discharged the whole bill is discharged. Caras v. Thalmann, 138 App. Div. (N. Y.) 297. So, where one of the set is discharged. Casper v. Kuhne, 169 App. Div. (N. Y.) 389, 393. PROMISSORY NOTES AND CHECKS. 245 ARTICLE XVII. Promissory Notes and Checks. Section 184. Promissory note defined. 185. Check defined. 186. Within what time a check must be pre- sented. 187. Certification of check — effect of. 188. Effect where holder of check procures it to be certified. 189. Check does not operate as an assignment. § 184. Promissory note defined. — A negotiable prom- issory note within the meaning of this act is an un- conditional promise in writing made by one person to another, signed by the maker, engaging to pay on de- mand, 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. Non-negotiable notes — Presumption as to consideration. — This section makes a change in the law of New York as regards the presumption of consideration in the case of non-negotiable notes. The terms of the former New York statute included a note payable to a person named therein without words of negotiability. Carn- wright v. Gray, 127 N. Y. 92. But as that statute has been re- pealed, and as the provisions of the Negiotiable Instruments Law apply only to negotiable promissory notes, it is now necessary to prove consideration in actions upon non-negotiable notes. Deyo v. Thompson, 53 App. Div. (N. Y.) 12; St. Lawrence Nat. Bank v. Watkins, 153 Id. 551. The rules on the subject have differed in the different States. See Daniel on Negotiable Instruments, section 163. In Connecticut the act has made no change in the law; for the rule in that State has been that a non-negotiable note does not import a consideration. Bristol v. Warner, 19 Conn. 17. 246 THE NEGOTIABLE INSTRUMENTS LAW. Eecital ' ' value received ' ' in non-negotiable note. — The recital " value received " in the body of a non-negotiable note is an admission that the instrument was issued for a sufficient considera- tion. Owens v. Blackburn, 161 App. Div. (N. Y.) 827 ; Hamilton v. Hamilton, 127 Id. 871. Certificate of deposit — Coupons. — A certificate of deposit in the ordinary form is a negotiable promissory note within the meaning of this section. Forrest v. Safety Banking & Trust Co., 174 Fed. Rep. 345. See also Jensen v. Wilself, 36 Nev. 37; Curran v. Witter, 68 Wis. 16; Maxwell v. Agnew, 21 Fla. 154. And so are coupons payable to bearer. Trustees of the I. I. Fund v. Lewis, 34 Fla. 424. Where note is drawn to maker's own order. — Under the statute, a maker indorsing a note payable to his own order incurs a sepa- rate and distinct liability as indorser, and may be sued as such. National Exchange Bank v. Lubrano, 29 R. I. 64. But if the note is wholly void, as, for example, where it has been given to secure an usurious loan, the maker's indorsement adds nothing to the strength of the paper, since he is only warranting his own con- tract. Sabine v. Paine, 166 App. Div. (N. Y.) 9. For other cases applying this provision of the section, see Sherman v. Goodwin, 12 Ariz. 42; Alexander v. Hazelrigg, 123 Ky. 677; Hibernia Bank & Trust Co. v. Dresser, 132 La. 532. Party indorsing before maker. — Under this section it is no de- fense to an indorser of a note drawn to the order of the maker that he signed his name on the back of the paper before it was indorsed by the maker. Yonkers National Bank v. Mitchell, 156 App. Div. (N. Y.) 318. Former law in New York.— The former statute of New York provided that "notes made payable to the order of the maker thereof » * * shall if negotiated by the maker, have the same effect, and be of the same validity, as against the maker and all persons having knowledge of the facts as if payable to bearer," and hence the indorsement of the maker was not required. 1 Rev. Stat. 768. See Irving Nat. Bank v. Alley, 79 N. Y. 536. Oral conditions. — The maker will not be allowed to prove an oral condition that would defeat, or contradict the terms of, the note, as, for example, that he was not to pay it unless he should receive the amount from another person. Torpey v. Tebo, 184 PROMISSORY NOTES AND CHECKS. 247 Mass. 307. Or that it was to be paid by installments. Cauley v. Dunn, 167 N. C. 32. Or that certain moneys were to be credited on it. Orange Co. Trust Co. v. Miller, 149 App. Div. (N. Y.) 292. So, one maker of a joint and several note may not prove an oral agreement that each maker should be liable for a proportionate part. Woods v. Finley, 153 N. C. 497. See also Pitt v. Little, 58 "Wash. 355. Nor may the maker show that he was to be liable as indorser. Lumbermen's Nat. Bank v. Campbell, 61 Ore. 123. But an agreement to renew is a collateral agreement, which does not contradict the note. Keith v. Eadway, 221 Mass. 515. Pleading. — In an action upon a promissory note payable to the order of the maker, it is necessary to allege that the note was indorsed by the maker. Edelman v. Rams, 58 Misc. (N. Y.) 561. An allegation in a complaint in an action upon a non-negotiable note that the instrument was executed and delivered for a " valu- able consideration " is a statement of fact, and not a conclusio; of law. St. Lawrence Nat. Bank v. Watkins, 153 App. Div. 551 See note to section 24. § 185. Check defined. — A check is a hill of exchange drawn on a hank 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. When check payable upon demand. — Unless a specific date of payment is mentioned, the check is payable upon demand under section 7. Riddle v. Bank of Montreal, 145 App. Div. (N. Y.) 207. Distinguishing characteristic. — One of the characteristics which distinguish a check from a bill of exchange is that a check is always drawn on a bank or banker. Harris v. Clark, 3 N. Y. 93, 115; In the Matter of Brown, 2 Story's Rep. 502. See also Bull v. Bank of Kasson, 123 U. S. 105; Rogers v. Durant, 140 U. S. 298; Espy v. Bank of Cincinnati, 18 Wall. 620; Merchants' Bank v. State Bank, 10 Wall. 604; Chapman v. White, 6 N. Y. 412; Harker v. Anderson, 21 Wend. 373; Murray v. Judah, 6 Cow. 484; Cruger v. Armstrong, 3 Johns. 5; Ridgeley Bank v. Patton, 109 111. 484; Harrison v. Nicollet Nat. Bank, 41 Minn. 489; Northwestern Coal Co. v. Bowman, 69 Iowa, 152; Planters' Bank v. Keese, 7 Heisk. 200; Blair v. Wilson, 28 Gratt. 170; Dodd v. Jette, 10 Oregon, 31; Hopkinson v. Forster, L. R. 18 Eq. 74. For cases applying the 248 THE NEGOTIABLE INSTRUMENTS LAW. statute, see Wedge Mines Co. v. Denver Nat. Bank, 19 Colo. App, 182; Boswell v. Citizens' Savings Bank, 123 Ky. 485. Cashier's Checks. — Under the statute cashier's checks, whether certified or otherwise, are classed with bills of exchange payable on demand. Singer Mfg. Co. v. Summers, 143 N. C. 103. Draft not payable immediately. — There has been some conflict in the decisions as to whether a draft upon a bank not payable immediately was a check or bill of exchange. The latter view was adopted in New York. Bowen v. Newell, 8 N. Y. 190; 13 N. Y. 390. To the same effect also are the following cases: Ivory v. Bank of the State, 36 Mo. 475; Harrison v. Nicollet National Bank, 41 Minn. 488; Georgia National Bank v. Henderson, 46 Ga. 496; Min- turn v. Fisher, 4 Cal. 36; Morrison v. Bailey, 5 Ohio St. 13. Oora- tra: Champion v. Gordon, 70 Pa. St. 474; Westminster Bank v. Wheaton, 4 R. I. 30; In re Brown, 2 Story, 502. In all of these cases the particular question presented was whether the instru- ment was entitled to grace. But now that grace has been abol- ished the distinction is of little, if any, practical importance. Necessity for presentment and notice. — Presentment and notice of dishonor are necessary in order that the holder may recover of the drawer. Herker v. Anderson, 21 Wend. 372; Dolph v. Rice, 18 Wis. 397. But unless the check answers the description of a foreign bill protest is not required. Wittich v. First Nat. Bank of Pensacola, 20 Fla. 843. See section 118, § 186. Within what time a check must be presented. — A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay. Variant readings. — In Illinois, after the words " reasonable time after its issue " the following is interpolated: " and notice of dishonor as provided for in the case of bills of exchange." Bights of indorsers. — It will be noted that this section applies only to the drawer. The rights of indorsers are governed by section 71. See note to that section. As the drawer can sustain a loss only by the failure of the bank, this section will apply only PROMISSORY NOTES AND CHECKS. $249 in such cases; but delay in presentment may result in loss to an indorser by the insolvency of the drawer or the withdrawal of the deposit. Where drawer is not damaged by delay. — The holder's laches in presenting a check for payment constitutes no defense in an action against the drawer unless he is damaged by the delay, and then only to the extent of his loss. A check purports to be made upon a deposit to meet it, and presupposes funds of the drawer in the hands of the drawee. But if the drawer has no such funds at the time of drawing his check, or subsequently withdraws them, he commits a fraud upon the payee, and can suffer no loss or damage from the holder's delay in respect to presentment or notice. In such case he is liable and cannot insist upon a formal demand or notice of non-payment. First National Bank of Port- land v. Linn County National Bank, 30 Oregon 296; Industrial Bank of Chicago v. Bowes, 165 111. 70. Rule as respects indorsers. — But while as between the holder and drawer of a check, presentment may be made at any time, and delay in presentment does not discharge the drawer, unless loss has resulted to him, a different rule obtains as between holder and indorser. The holder, on accepting the check, assumes the obligation to present the same for payment within the time pre- scribed by law, and if payment is refused to give notice of non- payment. A failure to do this discharges the indorser from liability as such irrespective of any question of loss or injury. Carroll v. Sweet, 128 N. Y. 19; Smith v. Janes, 20 Wend. 192. What is a reasonable time. — The general rule is that the reason- able time allowed for presentment ends with the next day after the delivery of the check. Dehoust v. Lewis, 128 App. Div. (N. Y.) 131; Smith v. Janes, 20 Wend. 192; Carroll v. Sweet, 128 N. Y. 19, 22 ; Turner v. Kimble, 37 Okla. 92. For instances of unreason- able delay see Industrial Trust Title and Savings Co. v. Weakley, 103 Ala. 458; Gifford v. Hardell, 88 Wis. 538; First National Bank of Wymore v. Miller, 43 Neb. 791; Comer v. Dufour, 95 Ga. 376; Grange v. Reigh, 93 Wis. 552; Western Wheeled Scraper Co. v. Sadilek, 50 Neb. 105; Gregg v. Beane, 69 Vt. 22; Holmes v. Roe, 62 Mich. 199. For instances of presentment in due time, see Loux v. Fox, 171 Pa. St. 68; Willis v. Finley, 173 Pa. St. 28; First Nat. Bank v. Buckhannon Bank, 80 Md. 475; Lloyd v. Osborne, 92 Wis. 250 THE NEGOTIABLE INSTRUMENTS LAW. 93; Bell v. Alexander, 21 Gratt. 1; Purcell v. Ellemong, 22 Gratt. 739. For cases applying this section of the statute, see Gordon v. Levine, 194 Mass. 418, 421; Aebi v. Bank of Evansville, 124 Wis. 73, 77; Citizens' Bank v. First Nat. Bank, 135 Iowa, 605; Cox v. Citizens' State Bank, 73 Kans. 789; Moskowitz v. Deutsch, 46 Misc. (N. Y.) 603; Singer Manufacturing Co. v. Summers, 143 N. C. 103; Asbury v. Taube, 151 Ky. 142. Where check is negotiated. — The fact that the payee indorses the check to a third person does not extend the time for present- ment as between the drawer and the payee. Dehoust v. Lewis, 128 App. Div. (N. Y.) 131. But as respects an indorser, section 71 applies, and presentmc-nt for payment will be sufficient if made within a reasonable time after the last negotiation thereof. Columbian Banking Co. v. Bowen, 134 Wis. 218; Plover Savings Bank v. Moodie, 135 Iowa, 685. See note to section 71. The reason for this distinction is obvious. The drawer intends that the check shall be presented to the bank for payment promptly, and presentment ought not to be delayed at his risk. But when the payee, instead of presenting the check for payment, nego- tiates it and puts it into circulation, he cannot complain if delay results from his own act. Death of drawer. — The payment of a check made by a bank after the death of the depositor, but before the bank has received knowledge of that fact, is a valid payment, and the bank is not liable for the amount to the personal representative of the de- positor. Glennan v. Rochester Trust & S. D. Co., 209 N. Y. 12; Rogerson v. Ladbroke, 1 Bing. 93 ; Tate v. Hilbert, 2 Ves. Jim. 112. The original draft of the Negotiable Instruments Law submitted to the commissioners contained a provision (which was taken from the statute of Massachusetts) as follows: "The death of the drawer does not operate as a revocation of the authority to pay a check, if the check is presented for payment within ten days from the date thereof." But it was thought by the conference of com- missioners that this would be objected to in some of the States because of the effect it might have on the estates of decedents. Payment through Clearing House. — The payment of a Clearing House balance is not a payment of any particular check, and does not become so until the time within which the check may be returned has expired. Hentz v. Nat. City Bank, 159 App. Div. PROMISSORY NOTES AND CHECKS. 251 (N. Y.) 743; Merchants' Nat. Bank v. Nat. Bank of the Com- monwealth, 139 Mass. 513. And while the adjustment of balances by the clearing-house constitutes a sort of tentative or provisional payment, that adjustment occurs without an opportunity to the members to examine the items, and regardless of whether the checks are good; and, therefore, the question of payment is not, and cannot be, ultimately decided until the bank upon which the check is drawn has had an opportunity to examine the checks at its banking house. Columbia-Knickerbocker Trust Co. v. Mil- ler, 215 N. Y. 191. Certificate of deposit. — As to the time within which a certificate of deposit should be presented for payment, see Pierce v. State Nat. Bank, 215 Mass. 18. § 187. Certification of check — effect of. — Where a check is certified by the bank on which it is drawn the certification is equivalent to an acceptance. Rule at common law. — This section makes no change in the law. See Merchants' Bank v. State Bank, 10 Wall. 604; Cooke v. State Nat. Bank, 52 N. Y. 96; Farmers * and Mechanics' Bank v. Butchers' and Drovers' Bank, 16 N. Y. 125. Effect of certification. — Where a bank certifies a check at the request of the payee, the effect is the same as though the funds had been paid out to him and deposited to his own credit, and hence the bank may not refuse to pay the check upon the ground that it was procured from the drawer by fraud. Times Square Auto. Co. v. Eutherford Nat. Bank, 77 N. J. L. 649. But where the certification is not made at the instance of the payee, or of a holder in due course, but at the instance of one who has induced the negotiation of the instrument by fraud, and who has not been authorized to represent the payee, it is not binding upon the payee. Anglo-South Am. Bank v. Nat. City Bank, 161 App. Div. (N. Y.) 268. When certification become effective. — When the certification is made at the instance of the drawer, it does not become effective until the delivery of the check to the payee. Anglo-South Am- Bank v. Nat. City Bank, 161 App. Div. (N. Y.) 268, 274. 252 THE NEGOTIABLE INSTRUMENTS LAW. Necessity for writing. — Section 132 applies to an acceptance by a bank as well as by any other drawee, and hence it must be in writing; and an action cannot be maintained against the bank on an oral promise to pay. See note to section 132, and cases there cited. Signature of indorser. — The certification does not admit the genuineness of the indorser 's signature. First Nat. Bank v. Northwestern Nat. Bank, 152 111. 296. Check delivered without indorsement of payee. — Where a check delivered without the indorsement of the payee is afterwards cer- tified by the bank, the holder may recover of the bank, though he is unable to obtain the indorsement of the payee. Meuer v. Phenix Nat. Bank, 94 App. Div. (N. Y.) 331. Drawer's right of set-off. — Where the bank has certified a check it may not refuse to pay the same in order that the drawer may enforce a right of set-off against the payee. Carnegie Trust Co. v. First Nat. Bank, 213 N. Y. 301. § 188. Effect where the holder of check procures it to be certified. — Where the holder of a check procures it to be accepted or certified the drawer and all indorsers are discharged from liability thereon. Reason for the rule. — When the holder, instead of insisting upon immediate payment, has the check certified, he, in effect, causes the funds to be withdrawn from the control of the depositor, and leaves them with the bank for his own accommodation; and it would be unjust that the money should be left in the bank at the risk of the drawer. Davenport v. Palmer, 152 App. Div. (N. Y.) 761; Lyons v. Union Exchange Nat. Bank, 150 Id. 493; Bank v. Carter, 88 Tenn. 279. The effect of the certification in such case is to create a new contract between the holder and drawee. Anglo- South Amer. Bank v. Nat. City Bank, 161 App. Div. (N. Y.) 268, 275. Where drawer has check certified. — But where the drawer causes the check to be certified before delivery, the same reason does not exist for holding him discharged from liability; and in such case PROMISSORY NOTIiS AND CHECKS. 253 the certification operates merely as an assurance that the check in genuine, and the certifying bank becomes bound with the drawer. Davenport v. Palmer, 152 App. Div. (N. Y.) 761, 763; Born v. First Nat. Bank, 123 Ind. 78; Cincinnati Oyster & Fish Co. v. Nat. Lafayette Bank, 51 Ohio St. 106; Andrews v. German Nat. Bank, 9 Eeisk. 211. See also cases cited above. And this is so though the drawer has the check certified at the request of the payee. Randolph Nat. Bank v. Hornblower, 160 Mass. 401. Where bank taking check as deposit has it certified. — This sec- tion applies where a bank, which has taken its customer's check on another bank and given him credit therefor, has the check certified by the drawee. Lyons v. Union Exchange Nat. Bank, 150 App. Div. (N. Y.) 403. Where name of payee changed in certified check. — An attorney of a mortgagee stated to the mortgagor that a certified check would be received in payment of the mortgage, and when a certified check was offered in payment, demanded that it should be made payable to himself as well as to the mortgagee, which was done, and the change noted on the books of the bank : Held, that the case was not within this section, and that the drawer was not discharged. Davenport v. Palmer, 152 App. Div. (N. Y.) 761. Where bank has cashed check. — Whore a bank has cashed a check upon a forged indorsement, the payee cannot maintain an action against such bank to recover the money collected by it upon the check. Tibby Bros. Glass Co. v. Farmers & Mfgrs. Bank of Sharpsburg, 220 Pa. 1. Suit in equity. — A bank is not liable on equitable grounds to the holder for the amount of an unaccepted check which it has refused to pay though the holder acquired the check on the oral representation of the bank that the drawer had funds on deposit to meet the check, and that the check was good, and that the holder might safely take it in payment for goods sold the drawer. Rambo v. First Nat. State Bank of Argentine, 88 Kans. 257. § 189. Check does not operate as an assignment. — A check of itself does not operate as an assignment of 254 THE NEGOTIABLE INSTRUMENTS LAW. any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, un- less and until it accepts or certifies the check. Rule at common law. — Prior to the statute there was consid- erable conflict in the authorities. The rule adopted in the act is supported by the weight of authority. See Bank v. Millard, 10 Wall. 152; Bank v. Schuyler, 120 U. S. 511; Florence Mills Co. v. Brown, 124 U. S. 385; First Nat. Bank v. Whitman, 94 U. S. 343, 344; St. L. & S. F. Ry. Co. v. Johnston, 133 U. S. 566; Attorney- General v. Continental Life Insurance Co., 71 N. Y. 325, 330 ; First Nat. Bank of Union Mills v. Clark, 134 N. Y. 368; O'Connor v. Mechanics' Bank, 124 N. Y. 324; Maginn v. Dollar Savings Bank, 131 Pa. St. 362; Saylor v. Bushong, 100 Pa. St. 27; Covert v. Rhodes, 48 Ohio St. 66; Cincinnati H. & D. R. R. Co. v. Metro- politan Nat. Bank, 54 Ohio St. 60; Pickle v. People's Nat. Bank, 88 Tenn. 380; Boetcher v. Colorado Nat. Bank, 15 Col. 16; Hop- kinson v. Foster, L. R. 18 Bq. 74. Contra, Fonner v. Smith, 31 Neb. 107; Munn v. Burch, 25 111. 35; Bank v. Patton, 109 111. 479, 485; Nat. Bank of America v. Nat. Bank of 111., 164 111. 503. Assignment by agreement. — But while the mere making and de- livery of a check in the ordinary course of business does not operate as an assignment of the fund, it is yet competent for the parties to create such an assignment by a clear agreement or understanding, oral or otherwise, in addition to the giving of the check, that such shall be the effect of the transaction. Fourth Street National Bank v. Yardley, 165 U. S. 634; Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83, 88. Application of the statute. — For cases applying this section, see Hentz v. Nat. City Bank, 159 App. Div. (N. Y.) 743; Rambo v. First State Bank of Argentine, 88 Kans. 257; Baltimore & Ohio R. R. Co. v. First Nat. Bank, 102 Va. 753; Van Buskirk v. State Bank, 35 Colo. 69 ; Tilby Bros. Glass Co. v. Farmers & Mechanics ' Bank, 220 Pa. St. 1. § 326. Recovery of forged check. — No bank shall bq liable to a depositor for the payment by it of a forged or raised check, unless within one year after the re- turn to the depositor of the voucher of such payment, PROMISSORY NOTES AND CHECKS. 255 such depositor shall notify the bank that the check so paid was forged or raised. Origin of the section. — This section was added by Laws of New York, 1904, eh. 287. It does not seem to be germane to the Nego- tiable Instruments Law, and would more properly have been en- acted as an amendment to the Banking Law. Similar statutes, but varying in their terms, have been enacted in Wisconsin, California, South Dakota, Michigan, Washington, Oregon, New Jersey, Iowa. Montana, North Carolina, North Dakota, Wyoming, Idaho, Kan- sas, Maine, Minnesota, Ohio, Oregon, Louisiana, Massachusetts and Ehode Island, but not as amendments to the Negotiable Instru- ments Law. Pleading section as defense. — This section establishes a general rule of substantive law, and is available as a defense though not specially pleaded. Shattuck v. Guardian Trust Co., 204 N. Y. 200. 256 THE NEGOTIABLE INSTRUMENTS LAW. ARTICLE XVIII.* Notes Given for Patent Rights and for a Specuia- tive Consideration. Section 330. Negotiable instruments given for patent rights. 331. Negotiable instruments given for a specu- lative consideration. 332. How negotiable bonds are made non-negoti- able. § 330. Negotiable instruments given for patent rights. — A promissory note or other negotiable instrument, the consideration of which consists wholly or partly of the right to make, use or sell any invention claimed or represented by the vendor at the time of sale to be patented, must contain the words "given for a patent right" prominently and legibly written or printed on the face of such note or instrument above the signa- ture thereto ; and such note or instrument in the hands of any purchaser or holder is subject to the same de- fenses as in the hands of the original holder; but this section does not apply to a negotiable instrument given solely for the purchase price or the use of a patented article. Source of the section. — This section is taken without change from Laws N. Y. 1877, ch. 65, section 1. Similar statutes exist in other States. See Laws of Pa. 1872, 60. Constitutionality of section. — This section is not in contraven- tion of the Constitution of the United States and the Acts of Con- gress which secure to a patentee for a limited time "the full and exclusive right and liberty of making, using and vending to other* to be used" his invention or discovery. Herdie v. Eoessler, 109 •This article appears only in the New York and Ohio acts. NOTES GIVEN FOR PATENT RIGHTS. 257 N. Y. 127; Tod v. Wick, 36 Ohio St. 370; Haskell v. Jones, 86 Pa. St. 173; Shires v. Commonwealth, 120 Pa. St. 368; Breckhill v. Randall, 102 Ind. 528; New v. Walker, 108 Ind. 365. Where statement not omitted. — If the note does not contain the statement required by this section it is unenforcible between the parties; but, if negotiable paper, it is valid in the hands of a holder in due course. New v. Walker, 108 Ind. 365; Kniss v. Hol- brook, 16 Ind. App. 229; Harmon v. Hagerty, 88 Tenn. 705. If the holder had knowledge of the facts the paper is void in his hands, though he paid value for it, and acquired it before maturity. Benton v. Sakyto, 84 Neb. 808. § 331. Negotiable instrument for a speculative con- sideration. — If the consideration of a promissory note or other negotiable instrument consists in whole or in part of the purchase price of any farm product, at a price greater by at least four times than the fair market value of the same product at the time, in the locality, or of the membership and rights in an association, company or combination to produce or sell any farm product at a fictitious rate, or of a contract or bond to purchase or sell any farm product at a price greater by four times than the market value of the same pro- duct at the time in the locality, the words, "given for a speculative consideration," or other words clearly showing the nature of the consideration, must be prom- inently and legibly written or printed on the face of such note or instrument above the signature thereof; and such note or instrument, in the hands of any pur- chaser or holder, is subject to the same defenses as in the hands of the original owner or holder. Source of section. — This section was taken without change from Laws N. Y. 1874, ch. 262, section 1. Other statutes requiring statement of condemnation. — It has be- come quite the custom for the States to pass laws requiring notes given in various transactiona to disclose the nature of the con- 37 268 THE NEGOTIABLE INSTRUMENTS LAW. sideration, and one State legislature has gone so far as to require that this part of the contract shall be written in red ink. In con- struing one of these stautes, the Supreme Court of Wisconsin has said: "The sales of lightning rods, patent rights, and stallions, were evidently considered by the Legislature as transactions, pre- senting quite similar opportunities and inducements for overreach- ing by fraudulent methods, and so it was determined that they might well be controlled by the same restrictive provisions; but there is absolutely no indication either in the law itself or in the nature of things that the restriction upon the free sale of stallions or lightning rods was considered in any way dependent upon 01 compensated by the restriction upon the sale of patent rights. It is not claimed that such a restriction upon the freedom of sales of stallions is unreasonable or unwarranted. The records of this court in recent years seem to show that such transactions present peculiarly seductive opportunities for misrepresentation and fraud even surpassing those presented by the traditional horse trade." Quiggle v. Herman, 131 Wis. 379. For other cases construing similar statutes, see note to section 57. § 332. How negotiable bonds are made non-negoti- able. — The owner or holder of any corporate or muni- cipal bond or obligation (except such as are designated to circulate as money, payable to bearer), heretofore or hereafter issued in and payable in this State, bu1 not registered in pursuance of any State law, may make such bond or obligation, or the interest coupor- accompanying the same, non-negotiable, by subscrib- ing his name to a statement indorsed thereon that such bond, obligation or coupon is his property; and thereon the principal sum therein mentioned is payable only to such owner or holder, or his legal representatives or assigns, unless such bond, obligation or coupon be transferred by indorsement in blank, or payable to bearer, or to order, with the addition of the assignor's place of residence. Source of section. — This section was taken without change from Laws N. Y. 1871, ch. 81; Laws N. Y. 1873, ch. 595. laws repealed; when to take effect. 259 AETICLE XTX* Laws Repealed; When to Take Effect. Section 340. Laws repealed. 341. When to take effect § 340. Laws repealed.— Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed. Variant readings. — In most of the states this section reads: "All acts and parts of acts inconsistent ■with this act are hereby repealed." In some of the states the section is omitted. ' § 341. When to take effect. — This chapter shall take effect on the first day of October, eighteen hundred and ninety-seven. Variant readings. — The date mentioned in the section varies, of eonrse, in the different states. In some states the section is omitted. In Arkansas the section reads: " This Act shall not affect any instrument or written contract now in existence, or eoming into existence before it takes effect." * The sections in this article are printed as they appear in the New York Statute. 260 THE NEGOTIABLE INSTRUMENTS LAW. SCHEDULE OF LAWS KEPEALED.* Eevised Statutes. Sections. R. S., pt. II, ch. 4, tit, II All Laws of Chapter. Sections. 1778 33 .... All. 1794 48 All. 1801 44 All. 1819 34 All. 1823 216 All. 1826 17 All. 1828 20 15, 1 30 (2d meet.) 1828 20 1, 11 51, 272, 393, 460 (2d moM., 1835 141 All. 1857 416 All. 1865 309 All. 1870 438 All. . 1871 84 AIL 1873 595 All. 1877 65 1,3. 1887 461 All. 1888...... 229 AIL 1891 262 1. 1894 607 All. 1897 612 AH. 1897 613 2, 8. 1898 336 AIL 1904 287 Ail. •This schedule comprises only the New York statutes. INDEX. (The references are to pages.) ACCEPTANCE, meaning of term, 6. what it is, 216. must be in writing, 216, 217. must be signed, 216. must be for payment in money, 216. is new contract, 216. form of, 216. signature of drawee sufficient, 216, 217. promise to pay cheJj, 217. holder may require it to be on face of bill, 21S. by separate instrument, 218. when acceptance on separate instrument binds acceptor, 218. by telegraph, 218. promise to accept deemed acceptance, 219. promise to accept not affected by instruction to agent, 219. promise to accept must be unconditional, 219. at common law oral promise was sufficient, 219. by what law promise to accept governed, 220. conditional promise to accept, 220. time allowed drawee in which to accept, 221. when retention of bill amounts to acceptance, 22L where bill incomplete, 223. where bill overdue, 223. after bill dishonored, 223. date of acceptance, 223. kinds of acceptance, 223. what constitutes general acceptance, 223, 224. qualified acceptance, 224. conditional, 224. local, 224. partial, 224. agent cannot take qualified acceptance, 225. [261] 262 INDEX. (The references lire to pages.) ACCEPTANCE— Continued. duty of holder where bill dishonored uy non-acceptance, 230. rights of holder when bill not accepted, 230. when bill dishonored by vvon-acceptance, 230. what bills must be protested for non-acceptance, 231, 232. of bills in set, 243. ACCEPTANCE FOR HONOR, when bill may be accepted for honor, 237. how made, 237. for part of sum, 237. for different parties, 238. when acceptance does not state for whose honor made, 238. agreement of acceptor for honor, 238. liability of acceptor for honor, 238. maturity of bill payable after sight accepted for honor, 238. how presentment for payment made to acceptor for honor, 239. dishonor of bill accepted for honor, 239. when delay in making presentment excused, 239. ACCEPTOR, by accepting admits existence of drawer, 120. admits genuineness of drawer's signature, 120. admits drawer's capacity to draw, 120. admits authority to draw, 120, 121. admits capacity of corporation to draw bill, 121. admits capacity of married woman, 121. admits capacity of infant, 121. may not show that drawer is a lunatic, 122. not presumed to know signature of indorser, 121. not presumed to know handwriting in body of bill, 121. liability of acceptor, 121, 122. admits capacity of payee to indorse, 122. for accommodation not liable to drawee, 122. demand for payment not necessary in order te charge, 139, 140. when acceptor insolvent bill may be protested for better security, 236. ACCEPTOR FOR HONOR, liability of acceptor for honor, 238. agreement of acceptor for honor, 238. INDEX. 263 (The references are to pages.) ACCOMMODATION PAPER, notes mutually exchanged are not, 69. payment of by party accommodated discharges paper, 193-195. ACCOMMODATION PARTIES, liability of, 67-72. accommodation maker is primarily liable, 7. exchange of notes, 69. married women as, 69. right to retract, 69. right to impose conditions, 71. discharge of by diversion of instrument, 7L corporations as, 69-71. knowledge of holder that paper for accomodation, 7L partner indorsing for accommodation, 71. order of liability, 72, 134. right to subrogation, 72. maker is primarily liable, 119. acceptor for accommodation not liable to drawer, 122. rights of on payment of instrument, 203. ACTION, meaning of, 6. restrictive indorsement confers right to bring, 79. holder may bring, 93. AGENT, signature by, 51. authority of, 51. how authority shown, 51. liability of person signing as agent, 52. liability of where signature unauthorized, 52. words which are descriptio personae, 53. delay of in making presentment, 145. may give notice of dishonor, 168. notice of dishonor may be given to, 174. cannot take qualified acceptance, 225. duty of to present bill for acceptance, 226, 227. holder may require production of agent's authority to ac- cept, 228. ALTERATION, effect of, 205-209. holder in due course may enforce instrument according to original tenor, 205, 206, 207. what constitutes a material alteration, 209-211. burden of explaining, 206. difference between and filling in blanks, 208. 264 INDEX. (The references axe to pages.) ALTERATION— Continued. pleading in case of, 208. as to rate of interest, 209. as to date, 209. as to sum payable, 209. as to time of payment, 209. as to place of payment, 209, 210. as to number of parties, 209, 210. as to relation of parties, 209. as to medium of payment, 209, 210. addition of place of payment, 209, 210. other changes, 209. striking out stipulation, 210. where paper payable to order is made payable to bearer, 210. adding name of attesting witness, 211. addition of special agreement, 211. AMBIGUOUS INSTRUMENT, construction of, 45-50. where two or more sign in the singular, 50. AMOUNT, uncertainty as to, 13. ANTECEDENT DEBT, constitutes value, 60, 62, 63, 64. ANTEDATED, instrument not invalid because, 35. ASSIGNMENT, bill is not, 213. when bill may amount to, 213. check is not, 253. when check may amount to, 254. ASSUMED NAME, persons signing in, 50, 51. ATTORNEY'S FEE, provision for, 14, 15, 16. where amount not fixed, 15. warranty respecting, 132. BANK, meaning of, 6. when bank discounting paper holder for value, 97-99. cannot recover payment made on forged signature of drawer, 120. instrument payable at equivalent to order to pay, 160. presentment of instrument payable at, 150, 151. hours for making presentment, 150. bank custom, 150. where bank is closed, 151. where name of bank not clearly specified, 151. INDEX. 265 (The references are to pages.) BANK— Continued. what will be considered a bank, 151. when suit may be commenced upon paper payable at, 151. when bank not agent to receive payment, 161. duty of as to notice of dishonor, 167. as agent of holder, 168. need give notice of dishonor only to its customer, 170, 181. bank paying check cannot re-issue, 203. duty of to present bill for acceptance, 226, 227. liability of on certified check, 251, 252. not liable on check unless it accepts or certifies the same, 253, 254. BANK NOTES, note payable in, 28. BEARER, meaning of term, 6. instrument must be payable to or order, 11, 12. when instrument payable to, 31-34. instrument payable to person named or bearer, 3L instrument payable to fictitious person, 31, 32. when payee not name of any person, 3L when inaoised in blank, 31-34. instrument payable to cash is payable to, 34. instrument payable to sundries is payable to, 34. instrument payable to estate, 33. indorsement of instrument payable to, 83, 133. former rule in some States, 134. BILL, meaning of term, 6. BILLS IN A SET constitute one bill, 242. rights of holder where different parts are negotiated, 242. liability of indorser, 242. acceptance of, 243. payment of, 243. effect of discharging one of a set, 243, 244. BILL OF EXCHANGE, term " bill " means bill of exchange, 6. ambiguous instrument may be considered either bill or note, 47. definition of, 212. essentials of, 212. is not an assignment, 212. where drawer and drawee are same person, 214. may be addressed to two or more drawees, 213. but not to two or more in the alternative, 213. 266 INDEX. (The references are to pages.) BILL OF EXCHANGE— Continued. inland bill, what constitutes, 214. foreign bill, what constitutes, 214. when bill may be treated as promissory note, 214. when bill may amount to an asignment, 213. referee in case of need, 215. BLANKS, when may be fdled, 36-42. when improperly filled, 36, 42, 308. presumption as to authority, 37, 38. burden of proof, 38. intention of party delivering paper, 38. necessity for delivery, 38. no authority to fill where instrument has not been deliv- ered, 38. what may be inserted, 38. blank space with figures in margin, 39. true date to be inserted, 39. where instrument negotiated prior to completion, 39. liability to holder in due course, 40. space left in completed instrument, 40. alterations, 41. whether payee may be holder in due course, 4L difference between filling in and alteration, 208. BOHEMIAN OATS NOTES, provisions as to, 28. BONDS, act applies to municipal bonds, 3. liability of person negotiating, 128, 129. how made non-negotiable, 258. BROKER, liability of, 136. BURDEN OF PROOF, where title of prior party was defective, 115-117. as to notice of dishonor, 167. is on person alleging payment, 194. to show that indorser assented to extension, 200. CANCELLATION discharges instrument, 193, 194. unintentional cancellation, 205. effect of, 205. burden of proof, 205. CAPACITY, acceptance admits capacity of drawer to draw bill, 120, 121. warranty of where negotiation by delivery, 127-129. warranty of by general indorser, 129-131. INDEX. 267 (The references are to pages.) " CASH," instrument payable to, 34. CASHIER, instrument payable to, 84, 85. not disqualified to act as notary, 235. may protest his own note, 235. CERTAINTY, where event is certain to happen, 21. CERTIFICATE OF DEPOSIT, warranty by indorser, 132. payable on demand must be presented within reasonable time, 145. CERTIFICATION, effect of, 251-253. equivalent to acceptance, 251. where holder has check certified, 252. where drawer has check certified, 252, 253. CHECK defined, 247, 248. delay in presentment where check is negotiated, 144. time allowed bank to accept, 221. difference between check and bill, 247, 248. presentment and notice of dishonor necessary, 248. within what time must be presented, 248-251. effect of delay, 248-251. certification of, 251, 252. is not assignment, 253, 254. agreement for assignment by, 254. CLEARING HOUSE, payment through, 250. COLLATERAL NOTES, 2, 3, 24, 25. COLLATERAL SECURITIES, provision for sale of, 22. that holder has is no defense to maker, 118. that indorser has deposited is no defense to maker, 119. must be tendered with instrument, 149. holder receiving collaterals not required to proceed upon before suing indorser, 158. surrender of discharges indorser, 201. " COLLECTION," indorsement for, 78, 79. effect of, 78, 79. liability of indorser, 130. CONDITIONAL INDORSEMENT, party paying may disregard condition, 82. indorsee holds subjects to rights of indorser, 82. CONFESSION OF JUDGMENT, provision for, 23, 25, 26. CONFLICT OF LAWS, by what laws demand of payment de- termined, 140. by what law validity of promise to accept determined, 220. bill payable in foreign country, 140. 268 INDEX. (The references are to pages.) CONSIDERATION, presumption as to, 59. statement of nature of, 26. what constitutes, 60. antecedent debt, is, 60-62; 63-64. non-negotiable instrument, 60. absence or failure of, 65-67. partial failure of, 65-67. accommodation parties, 67-72. presumption as to in case of non-negotiable note, 59, 245, 246. failure of consideration does not require proof of good faith, 117. none necessary to support waiver, 157. instrument given for speculative consideration, 257. requirement that consideration be stated, 111, 257-258. CONTINGENCY, instrument payable on is not negotiable, 20-22. CORPORATION included in word " person," 6. liability of officers signing, 54. as an accommodation party, 69-71. delivery of paper of by officer for personal debt, 70-7L acceptor admits capacity of to draw, 121. officer of indorsing, 123. COSTS OF COLLECTION, provision for, 14. CURRENT MONEY, designation of particular kind of, 26, 28. DATE, absence of does not affect validity of instrument, 26. presumption as to date, 27, 35-46. evidence to show mistake as to date, 35. instrument presumed to be made where dated, 35. instrument may be ante-dated, 35. may be post-dated, 35. when date may be inserted, 36-48. insertion of wrong date, 36. alteration of date, 209. from what date law takes effect, 259. DAYS OE GRACE, abolished, 158. rule not uniform, 158-160. DEFENSES, when instrument subject to, 113-115. nature of, 115, 116. who liable to, 113-117. DEFINITIONS, meaning of terms used in act, 6. INDEX. 269 (The references are to pages.) DELAY, when delay in presenting for payment is excused, 106, 154. In giving notice of dishonor, 189. in presenting check, 144, 248-251. DELIVERY, meaning of term, 6. of incomplete instrument, 42. contract revocable until delivery, 43. must be authorized, 43, 44. presumption as to delivery, 43, 44. necessary to convey title, 43, 44. conditional delivery, 44, 45. presumed in favor of holder in due course, 44, 45. instrument payable to order of drawer, 45. upon condition, 45. pleading delivery, 46. possession is prima facie proof of, 46. is negotiation of instrument payable to bearer, 74. necessary to make indorsement complete, 74. of bill or check implies representation tlu., drawee is in funds, 121, 122. warranty where negotiation by delivery, 127-129. DEMAND, INSTRUMENT PAYABLE ON, instrument must be payable on demand or at determinable future time, 11. instrument expressed to be payable on, 28. payable at sight, 28. payable on presentation, 28. when no time expressed, 28, 29. instrument issued, etc., when overdue is payable on de- mand, 28, 29. distinction between and instruments payable on demand and at sight, 28, 29. when words, " on demand " may be added, 29. legal intendment cannot be changed by patrol, 29. instrument payable on demand negotiated an unreason- able time after its issue, 92. overdue bill is payable on, 29. when instrument payable on demand must be presented, 141-145. DETERMINABLE FUTURE TIME, instrument must be pay- able at, 11. what is, 19. 270 INDEX. (The references are to pages.) DETERMINABLE FUTURE TIME— Continued. fixed period after date or sight is, 20. on or before fixed time is, 20. on or after event certain to happen is, 20. DISCHARGE OF INSTRUMENT by payment on behalf of prin- cipal debtor, 193. where principal debtor becomes holder after maturity, 193. by cancellation, 193. by other act, 193. by payment by party accommodated, 193, 194. of one part of a bill drawn in a set, 174. DISCHARGE OF PARTY SECONDARILY LIABLE by discharge of instrument, 195, 196. by cancellation of signature, 196. by discharge of prior party, 196. by tender by prior party, 196, 197. by release of principal debtor, 196-198. reservation of rights against surety, 196-198. extension of time, when will discharge, 196, 198-201. mere indulgence will not discharge, 198. where holder allows statute of limitations to run against principal debtor, 197. extending time to plead will not discharge, 199. accommodation maker not discharged by extension granted indorser, 200, 201. DISCOUNTING PAPER, when bank holder for value, 62, 97-99. DISHONOR, when instrument dishonored by non-payment, 157. DRAWEE must be named or indicated in instrument, 11. not liable until acceptance, 213. bill may be addressed to two or more, 213. but not to two or more in the alternative, 213. time allowed in which to accept, 221. retaining or destroying bill is liable as acceptor, 221, 222. DRAWER, instrument payable to order of, 45. engagement of by drawing bill, 119. admission of, 119. liability of, 119. may negative liability, 119. existence of admitted by acceptor, 120. when presentment not necessary to charge, 153. INDEX. 271 (The references are to pages.) DRAWER— Continued. right of recourse to, 157. notice of dishonor must be given to, 166. ■when notice of dishonor need not be given to, 185. when released by failure to present bill for acceptance, 227. liability of where bill dishonored by non-acceptance, 230. when protest necessary in order to charge, 231. of check discharged if holder has check certified, 252, 253. DRUNKENNESS, as a defense, 111. DUE DILIGENCE, when question of law, 154, 155, 189. when question of fact, 154. what will constitute, 155, 187-189, 248-251. DURESS, instrument or signature obtained by, 101. ELECTION, right of, 23, 26. ESTATE, instrument payable to, 33. EXCHANGE, provision for, 14. EXECUTORS, indorsement by, 132. EXEMPTIONS, waiver of 26, EXHIBITION OP INSTRUMENT, when necessary, 103, 112. when excused, 149. payment without, 163, 164. EXTENSION, stipulation for, 21. FEDERAL COURT, how far bound by statute, 15. FICTITIOUS PAYEE, when drawer estopped to allege that payee is, 119. FICTITIOUS PERSON, when instrument payable to order of is payable to bearer, 31, 32, 33. whether instrument payable to order of estate is, 33, 34. paper issued to one fraudulently impersonating another, 56-57. when maker estopped to allege that payee is, 119. presentment for payment not required where drawee is fictitious person, 155. FIGURES, where there is a discrepancy between words and figures, 46. effect of, 46, 47. FISCAL OFFICER, instrument payable to, 84, 85. FOREIGN LANGUAGE, instrument may be written in, 35. 272 INDEX. (The references are to pages.) FOKEIGN BILL, what is, 214. FORGED SIGNATURE confers no right, 56. when party estopped to allege forgery, 57, 58. on travelers checks, 58. FRAUD, instrument or signature obtained by, 101, 102, 117. where fraud is subsequent to liability, 117. GAMBLING DEBT, note given for, 108, 109. GENUINENESS, warranty of where negotiations by delivery, 127. warranty of where negotiation by qualified indorsement, 127. when warranty of not implied, 128. warranty of by general indorser, 129. acceptor admits signature of drawer, 120, 121. acceptance does not admit signature of indorser, 121. nor handwriting in body of instrument, 121. GOLD COIN, note payable in, 28. GOODS AND MERCHANDISE, instruments payable in, 12. GUARANTOR, when person becomes such, 122. when proceedings against principal are necessary, 167. not entitled to notice of dishonor, 167. GUARANTY, conditional guaranty, 158. HOLDER, meaning of term, 6. may sue in his own name, 93. may receive payment, 93, 94. may sue any party, 113, 133. rights of where bill dishonored by non-acceptance, 230. duty of where bill not accepted, 230. refusal to receive payment for honor, 241. by having check certified discharges drawer and indorsers, 252, 253. of checks cannot recover of bank on check until it ac- cepts or certifies the same, 253, 254. HOLDER FOR VALUE, what constitutes, 60-63. person having lien is, 63-65. when bank discounting note is, 97-99. BOLDER IN DUE COURSE, what constitutes, 94-99. who is not, 94-99. incomplete or irregular instrument, 95. post-dated instrument, 95. INDEX. 273 (The references axe to pages.) HOLDER IN DUE COURSE— Continued. payee as, 96. overdue paper, 96. where interest is overdue, 97. where instalment overdue, 97. when paper deemed overdue, 97. in case of instrument payable on demand, 100. where full amount has not been paid before notice, 100, 101. what constitutes notice of equities, 102-107. holds instrument free from equities, 107-113. may recover full face value, 107-112. where paper made in violation of statute, 108-111. drunkness as a defense, 111. rights of . person claiming under holder in due course, 113, 114. when burden on holder to prove that he took instrument in due course, 115-117. iiolder may testify that he acted in good faith, 117. HOLDER OF OFFICE, instrument payable to order of, 31. HOLIDAY, when day for doing act falls on, 8. instrument falling due on, 158-160. ILLEGAL STIPULATIONS, not validated, 23. INCOMPLETE INSTRUMENT, filling blanks, 36-42. not delivered, 42. where instrument is stolen, 42. agreement that others shall sign, 43. acceptance of, 223. ENDORSER, where character not clear signer is presumed to be an indorser, 47-49, 50. usury not a defense to, 111. deposit of collateral securities by, 119. when person deemed such, 122. may not be shown to be maker, 123. parol evidence to vary liability of, 123-133. irregular indorser, 124-127. partner indorsing firm note, 126, 132. admits capacity of prior party, 12P. liability of general indorser, 129-133. liability where paper indorsed restrictively, 130. 274 INDEX. (The references are to pages.) ENDORSER— Continued. to whom warranty runs, 130. warranty as to genuineness, 131. of validity, 131. as to title, 131. holders knowledge of infirmity, 132. where note stipulates for attorneys fees, 132. has no right to require suit against maker, 133. liability of where paper negotiable by delivery, 133. order in which indorsers liable, 134-136. presentment necessary in order to charge, 139, 248, 249. when presentment for payment not necessary to charge, 153. right of recourse to, 157, 158. not a mere surety after dishonor, 157, 158. liability where collaterals have been received, 158. holder not required to proceed on collaterals in order to charge indorsers, 158. notice of dishonor must be given to, 166. when notice of dishonor need not be given to, 190. what will discharge, 142-145, 195-201. payment by does not discharge maker, 194. possession of paper is evidence of payment, 202. payment by second indorser, 202. where released by failure to present bill for acceptance, 227. liability of where bill dishonored by non-acceptance, 230. in what case protest necessary in order to charge, 231. liability of where he indorses different parts of a set, 242, 243. of check discharged by delay to present, 248, 249. ENDORSEMENT, meaning of term, 6. of instrument payable in the alternative, 30. instrument indorsed in blank payable to bearer, 31. instrument payable to order of drawer^ 45. by infant, 55. by corporation, 55. where written, 75. required for negotiation of instrument payable to order, 75, 76. must be completed by delivery, 74. INDEX. 275 (The references are to pages.) INDORSEMENT— Continued. must be on instrument, 75. or on an allonge, 75, 76. burden of proof as to signature, 76. by stamp, 76. signature alone sufficient, 76. must be of entire instrument, 77. kinds of, 77. special indorsement, 77. indorsement in blank, 77. how special indorsement converted to blank indorsement, 78. when restrictive, 78, 79. restrictive indorsement prohibiting further negotiation, 78, 79. restrictive indorsement constituting indorsee mere agent, 78, 79. restrictive indorsement vesting title in trust, 78, 79. effect of indorsement " for collection," 78, 79. restrictvie indorsement authorizes indorsee to receive pay- ment, 79. restrictive indorsement authorizes indorsee to bring ac- tion, 79. restrictive indorsement authorizes indorsee to transfer his rights as indorsee, 80. effect of qualified indorsement, 81, 82. qualified indorsement does not impair negotiable charac- ter of the instrument, 81. qualified indorsement does not throw suspicion on paper, 81. conditional indorsement, 82. of instrument payable to bearer, 83. where instrument payable to two or more, 84. by cashier, 85. by fiscal officer, 85, 86. where name misspelled, 86. where payee or indorsee wrongly designated. Sfl. in representative capacity, 86. presumption as to place of, 87. presumption as to time of, 86, 87. striking out indorsement, 88, 89. 276 INDEX. (The references are to pages.) INDORSEMENT— Continued. effect of striking out indorsement, 88, 89, when may be done, 88, 89. transfer without indorsement, 89-92. rights of transferee, 89, 90, 91. prior equities, 91, 92. warranty where negotiation by qualified indorsement, 128, 129. warranty of title in case of qualified indorsement, 128, 129. warranty by general indorsement, 129-133-. indorsement by executors, 132. INFANT, indorsement by, 55. acceptor admits capacity to draw, 121. INLAND BILL, what is, 214. INSOLVENCY, does not excuse presentment, 155. INSTALLMENTS, instruments payable in, 13, 14. INSTRUMENT, meaning of term, 6. INTEREST, where instrument does not specify date from which interest to run, 46-48. does not make sum uncertain, 13. ISSUE, meaning of term, 6. JOINT DEBTORS, presentment to, 152. JOINT PARTIES, two or more persons signing " I promise t« pay," 47. joint payees indorsing, 136. suit against joint indorser, 136. JUDICIAL NOTICE, enactment in other states, 5. JUDGMENT NOTES, 23-25. LAW MERCHANT, when governs, 8. LIABILITY, no one liable whose signature not on instrument, 32. of person signing as agent, 52-55. of maker, 118. of drawer, 119. of acceptor, 120-122. ot irregular indorser, 124-127. where paper negotiated by delivery only, 127-129. where paper negotiated by qualified indorsement. 127-129. of general indorser, 129-133. INDEX. 277 (The references are to pages.) LIABILITY— Continued. of indorser where paper negotiable by delivery, 134. order in which indorsers liable, 134. of agent or broker, 136, 137. LIFiN, person having is holder for value, 63-65. extent of recovery by holder having lien, 64, 65. holder having a lien may sue on instrument, 65. holder may recover on instrument though, principal debt not due, 65. LIGHTNING EODS, notes given for, 111. LUNATIC, acceptor cannot show drawer a lunatic, 122. MAIL, miscarriage in, does not invalidate notice of dishonor, 179. MAKER, note payable after death of, 21. indorser may not be shown to be, 123. instrument payable to order of, 30, 245, 246. liability of, 118. admission of, 118. demand of payment not necessary to charge, 139. liability to holder where part payment made by indorser, 194. MARGINAL FIGURES, effect of, 47. MARRIED WOMAN, acceptor admits capacity of to draw bill 121. liability of on commercial paper, 87, 105. MATURITY, option to pay before, 20, 21. mode of indicating, 20. time of, 158-160. MONEY, instrument payable in particular kind of, 28. MORTGAGE NOTES, 23. MUNICIPAL BONDS, statute applies to, 3. NEGOTIABLE INSTRUMENTS, law is confined to, 2, 3. " instrument " means negotiable instrument, 6. must contain unconditional promise, 11. must be for payment of sum certain, 11. must be for payment of money only, 11. must be in writing, 11. must be signed by maker or drawer, 11. 278 INDEX. (The references are to pages.) NEGOTIABLE INSTRUMENTS— Continued. must be payable on demand or at determinable future time, 11. must be payable to order or bearer, 11. form of, 11. statement of transaction does not affect negotiable char- acter, 16. indication of particular fund does not render non-nego- tiable, 16. order to pay out of particular fund not negotiable, 16-19. instrument payable on contingency not negotiable, 20-22. provision for sale of collateral, 22, 23-25. provision for confession of judgment, 23-25. waiver of benefits of law, 23. option to require something in lieu of payment in money, 23-26. instrument payable when certain person shall become of age, 21. omissions not affecting, 26-28. not dated, 26. not specifying value given, 26. not specifying place where drawn, 26. not specifying place where payable, 26. bearing seal, 26. provisions as to collaterals, 22, 23-25. designation of particular kind of current money, 26-28. instrument continues negotiable until discharged or re- strictively indorsed, 88. NEGOTIABLE INSTRUMENTS LAW, short title, 2. construction of, 3. when to take effect, 259. to what instruments it applies, 2, 3. judicial notice of, 5. must be proved, 5. NEGOTIATION of post-dated instruments, 35, 36, 107. rules governing, 73-93. what constitutes negotiation, 73-75. of instrument payable to bearer, 74. of instrument payable to order, 74, 75. when prior party may negotiate, 92. INDEX. 279 (The references are to pages.) NEGOTIATION— Continued. of paper payable to bearer and indorsed specially, 134. party secondarily liable paying instrument may again negotiate it, 202-204. ■when drawer and indorsers released by delay in nego- tiating bill, 227. bill must be negotiated within reasonable time, payable on demand, 141-145, 227. of bills in sets, 242. NEW YORK STATE BILLS, note payable in, 28. NON-NEGOTIABLE INSTRUMENT, presumption as to considera- tion, 60. NOTARY PUBLIC, may make protest, 234. not disqualified because officer of bank, 234. presentment must be by notary in person, 234. certificate of as evidence, 233, 234. NOTE, meaning of term, 6. NOTICE OF DISHONOR, where instrument issued or negotiated when overdue, 29. waiver of presentment not sufficient, 157. need not be given to maker for accommodation, 160. to whom must be given, 166. rules governing, 165, 192. must be given to indorser, 166. must be given to drawer, 166. to officers of corporation indorsing for accommodation, 166. where indorser is officer of bank, 166. need not be given to guarantor, 167. by whom may be given, 167, 168. notice by stranger not sufficient, 168. party discharged cannot give, 168. drawee who refuses acceptance cannot give, 168. notice by agent, 168, 169. bank as agent may give, 168. maker as agent of holder, 168. notary acts as agent of holder, 168. to whose benefit notice enures, 169-181. holder required to give notice only to his immediate in- dorser, 169. notice given on behalf of wrong person, 169. when misdescription does not vitiate, 170. 280 INDEX. (The references are to pages.) KOTICE OF DISHONOR^Continued. when notice sufficient, 170. notice need not be signed, 170. omission of date and time of payment, 171. printing notice, 171. signature of notary, 171. form of notice, 170-172. when notice defective, 171-172. may be delivered personally, 172. may be sent by mail, 173. effect of notary's certificate, 173. notice over telephone, 173. when sufficiency of notice question of law, 172. may be given to agent, 174. in Kentucky written notice required, 174. who deemed agent to receive, 174. where party dead, 174, 175. to partners, 174. to joint parties not partners, 175. to bankrupt, 175, 176. to assignor for creditors, 175, 176. may be given as soon as instrument dishonored, 176. where parties reside in same place, 176, 177. where parties reside in different places, 177-179. by what mail to be sent, 178. where not sent by mail, 179. miscarriage in mails does not impair validity of notice, 179. when notice deemed deposited in post-office, 180. miscarriage caused by insufficient postage, 180. presumption as to delivery, 180. proof of deposit in post-office, 180. time in which indorser to give notice to prior parties, 180. bank need give only to its customer, 181. degree of diligence required, 181. where indorser liable for only part of debt, 181. where notice to be sent, 182-184. when party adds address to signature, 182. where party has not given address, 182. where he lives in one place and has office in another, 182, 183. INDEX. 281 (The references are to pages.) NOTICE OF DISHONOR,— Continued. where he is sojourning in another place, 182, 183. notice actually received is sufficient, 182. waiver, 184. waiver of before dishonor, 184. waiver of after dishonor, 184. what will constitute waiver, 184. evidence of waiver, 185. waiver embodied in instrument, 186. waiver written over signature, 186. waiver of protest, what it includes, 186, 187. when notice dispensed with, 187-189. when cannot be given after reasonable diligence, 187. what will constitute reasonable diligence, 188, 189. when delay excused, 189. reliance upon directory, 188. duty to inform notary, 188. where pricipal obligor is dead, 188. when notice need not be given to drawer, 189. duty to apply for information, 189. when question of diligence one of law, 189. when notice need not be given to indorser, 190. when instrument has been previously dishonored by non- acceptance, 191. effect of omission to give notice of dishonor by non- acceptance, 188. NOTICE OF EQUITIES, what constitutes, 102-107. See " Promissory Note." NOTICE, where transferee receives notice before payment in full for instrument, 100. NOTING, 235. OMISSIONS, what omissions do not affect validity or negotiable character of instrument, 26-28. ON OR BEFORE SPECIFIED DATE, instrument so payable, 20. OPTION, to pay before maturity, 20-21. of holder to require something in lieu of payment in money, 26. of holder to declare note due, 23, 24, 26. ORDER, instrument must be payable to, or bearer, 11, 12, 30. instrument payable to particular person without more, 27. 282 INDEX. (The references are to pages.) ORDER— Continued. instrument payable to, 30. instrument payable to order of drawer, 30. instrument payable to order of maker, 30. instrument payable to order of drawee, 30. instrument payable to order of two or more payees, 30. instrument payable to order of one of several payees, 30. instrument payable to order of holder of office, 30. payee must be named or indicated, 30. OVERDUE INSTRUMENT is as regards parties issuing or nego- tiating it payable on demand, 28, 29. PAROL EVIDENCE, to show date, 27. to vary status of person signing instrument, 123. as to agreement among indorsers, 127, 135, 136. to show order in which indorsers liable, 127. to vary liability of indorser, 133. to show order in which indorsers are liable, 136. to show liability of drawer, 136. PARTICULAR FUND, payment out of, 19. PARTNERS, indorsing individually, 123. indorsing firm note, 126, 132. presentment to, 152. notice of dishonor to, 175. PATENT RIGHTS, negotiable instruments given for, 256. PAYEES, two or more, 30. one of several, 30. when name not the name of any person, 30. how payee may be designated, 31. as holder in due course, 41, 42, 96. acceptance admits existence of, 120. acceptance admits capacity to indorse, 120, 122. acceptance does not admit signature of, 121. PAYMENT, instrument must be for payment in money, 11. instrument payable in merchandise, 12. option to require something in lieu of payment in money,, 23-26. what constitutes payment in due course, 162-164. authority to receive, 163. by principal debtor, 193. by party accommodated, 193. by stranger, 194. INDEX. 283 (The references are to pages.) PAYMENT— Continued. effect of payment by indorser, 194. by one of the makers discharges instrument, 195. through clearing-house, 195. by party secondarily liable, 202, 204. what bills must be protested for non-payment, 231. bill protested for non-acceptance may be protested tot non-payment, 235. . of bills in a set, 243. PAYMENT FOE HONOR, who may make, 240. how made, 240. preference of parties offering to pay for honor, 241. effect on subsequent parties, 241. where holder refuses to receive payment, 241. effect of, 241. declaration before payment, 241. rights of payer for honor, 241. " PEDDLER'S NOTE," consideration required to be stated in, 109-111. PENCIL, writing may be in, 11. PERSON, meaning of term, 6. PERSON PRIMARILY LIABLE, who is, 6. demand of payment not necessary to charge, 139. accommodation maker is, 200, 201. PERSON SECONDARILY LIABLE, who is, 6. right of recourse to, 157. PLACE, failure to specify place where drawn does not affect negotiable character, 26. presumption as to place of indorsement, 87. of presentment, what is proper place, 147, 148. where payable at a branch bank, 147. alteration as to place, 209, 210. PLEADING, presentment in reasonable time, 143, 144. in case of irregular indorser, 127. that paper not presented within reasonable time, 144. waiver of presentment, 157. in case of alteration, 208. defense to action for payment of forged check, 255. POST-DATED INSTRUMENT, negotiation of, 35. instrument not invalid because post-dated, 35. is negotiable, 35. 284 INDEX. (The references are to pages.) POST-OFFICE, what constitutes deposit in, 180. deposit in post-office box, 180. PRE-EXISTING DEBT constitutes value, 60, 61, 62, 63, 64. PEE3ENTATION, instrument payable on is payable on demand, 28. PRESENTMENT FOR ACCEPTANCE, in what cases necessary, 226. where bill payable after sight, 226. where required to fix maturity, 226. not necessary where payable at day certain or at fixed time after date, 226. right of holder to present bill for acceptance, 226. where bill expressly stipulates for, 226. where bill not payable at drawee's place of business or residence, 226. when drawer and indorsers released, 227. duty of agent to present bill for acceptance, 226. how presentment made, 227. must be by or on behalf of holder, 227. must be at reasonable hour, 227. must be on business day, 227. before bill is due, 227. must be to drawee or some person authorized to act for him, 228. where there are two or more payees not partners, 228. where drawee is dead, 228. where drawee is bankrupt or insolvent, 228. on what days may be made, 228. where time insufficient, 229. when excused, 229. excused where drawee dead, 229. excused where drawee has absconded, 229. excused where drawee is fictitious person, 229. excused where drawee has not capacity to contract, 229. excused when cannot be made after reasonable diligence, 229. PRESENTMENT FOR PAYMENT, of instrument issued or nego- tiated when overdue, 29. necessary in order to charge drawer or indorsers, 139. not necessary to charge party primarily liable, 139. where instrument payable on demand, 141-145. INDEX. 285 (The references are to pages.) PRESENTMENT TOR PAYMENT— Continued, by what laws determined, 140. what constitutes sufficient presentment, 145, 146. must be made on day of maturity, 141. holder has entire day in which to make, 146. place of presentment, 147, 148. where principal debtor dead, 152. where maker or acceptor has abandoned place of busi- ness, 148. where instrument payable at bank, 150, 151. collaterals must be tendered with instrument, 149. instrument must be exihibited, 148. what will excuse exhibition, 149. where persons primarily liable are partners, 152. to joint parties who are not partners, 152. when not required to charge indorser, 130. when not required to charge drawer, 130. when delay excused, 154. waiver of, 153, 155, 156. what will amount to waiver, 155, 156. where drawee is fictitious person, 155. effect of failure where instrument payable at a particu- lar place, 140. necessity for where holder has election, 140. where indorser holds security, 141. where no place of payment indicated, 147. where person to make payment has removed, 148. demand over telephone, 149. informal request, 149. to persons liable as partners, 152. when dispensed with, 155-157. waiver of notice of dishonor not sufficient, 157. computation of time, 160. instrument falling due on Sunday, 158-160. instrument falling due on holiday, 158-160. instrument falling due on Saturday, 158-160. not necessary where bill has been dishonored by non- acceptance, 230. how made to acceptor for honor, 239. within what time check must be presented, 248-251. effect of delay, 248-251. 286 INDEX. (The references are to pages.) PRIMARILY LIABLE, meaning of term, 6, 7. PRINCIPAL not liable unless his signature appears on instru- ment, 51. PRINTED PROVISIONS, written provisions prevail over, 46-48. " PROCURATION," signature by, 40. PROMISSORY NOTE, meaning of term, 6. note given for purchase price of goods, 17, 18. payable on or after death of maker, 21. payable in gold coin, 28. in bank bills, 28. in New York State bills, 28. in Florida funds, 28. in specie, 28. given for patent right, 28. " Bohemian oats " notes, 28. ambiguous instrument may be considered bill or note, 47. non-negotiable notes, 2, 59, 60, 61. given for a stallion, 111, 258. given for lightning rods, 111, 258. peddler's note, 111. usurious notes, 108-111. given for gambling debt, 108-111. when bill may be treated as, 214. drawn to maker's own order, 245, 246. defined, 245. PROTEST, what waiver of includes, 186. construction of term, 184. construction of term in pleading, 187. may be made in case of dishonor of any instrument, 192. not required except in case of foreign bills, 192, 231. necessary in case of foreign bills, 192, 231. unnecessary unless bill appears on its face to be a foreign bill, 231. how made, 232, 233. must be annexed to bill, 232. must be under hand of notary, 232. must be under seal of notary, 232 when to be made, 235. must specify time and place of presentment, 232. mast specify fact that presentment was made, 232. INDEX. 287 (The references are to pages.) PROTEST— Continued. cause for protesting the bill, 232. demand made and answer given, 232. manner of presentment, 232. may be made by notary public, 234. may be made by resident, 234. presentment must be by notary himself, 234 where made, 235. when dispensed with, 236. for better security, 236. both for non-acceptance and non-payment, 236. extending protest, 235. before maturity where acceptor insolvent, 236. where bill is lost, 236. of bill accepted for honor, 239. REASONABLE DILIGENCE. See Due Diligence. REASONABLE HOUR, what is, 146. REASONABLE TIMS, what constitutes, 7. when question of law, 7. when question of fact, 7. in case of instrument payable on demand, 100. instrument payable on demand must be presented within, 142-145. where check is negotiated, 144. for presentment of check, 248, 249, 250. REFEREE IN CASE OF NEED, 215. RENUNCIATION, effect of, 204. how made, 204. REPEAL, laws repealed, 259. REPRESENTATIVE CAPACITY, person indorsing in may nega- tive personal liability, 86. SATURDAY, instrument falling due on, 158-160. SEAL does not affect negotiable character, 26, 27. of corporation, 26, 27. SECONDARILY LIABLE, meaning of term, 6, 7. SHORT TITLE of negotiable instruments law, 2. SIGHT, instrument payable at sight is payable on demand, 28, 29. 288 INDEX. (The references are to pages.) SIGNATURE, no person liable whose signature does not appear on the instrument, 50, 51. proof of, 12. where two or more sign in the singular, 50. by agent, 51. in trade or assumed name, 51. by " procuration," 55. forged signature, 56. acceptance admits genuineness of drawer's signature, 120. SPECIE, note payable in, 28. STALLIONS, notes given for, 111, 258. STATEMENT OF TRANSACTION, effect of, 16, 17. STATUTES, prior repealed, 9. STOLEN INSTRUMENT, where incomplete, 42. holder in due course may recover on, 107. presumption where instrument is stolen, 117. STRIKING OUT INDORSEMENT, effect of, 78, 79. when may be done, 78, 79. SUM CERTAIN, what is, 13. SUNDAY, when day for doing act falls on, 5. instrument falling due on, 158-160. " SUNDRIES/' instrument payable to, 34. TELEPHONE, demand of payment over, 149. TENDER, ability and willingness at place of payment equal to, 139. TERMS, when sufficient, 34. TIME, how computed, 160. when statute to take effect, 8, 259. of indorsement, 86, 87. TITLE, short title of act, 2. possession is proof of, 46. when defective, 101, 102. burden of proof where title of prior party defective, 116. warranty of where negotiation by delivery, 127-12i>. warranty of where negotiation by qualified indorsement, 127-129. warranty of by general indorser, 129-131. TRADE NAME, persons signing it, 51. TRAVELER'S CHECKS, forged indorsement, 58. INDEX. 289 (The references are to pages.) DNCONDITIONAL PROMISE OR ORDER, what is, 16, 17. order to pay out of particular fund is not, 16, 17. UNIFORMITY, statute construed so as to produce, 3-5. USAGE, regard to be had to in determining question of reason- able time, 7. bank custom, 150, 151. USURY, no implied warranty that note is not void for usury, 128, 129. note given for usurious loan, 108-111. VALUE, meaning of term, 6. failure to specify does not affect negotiable character of instrument, 26, 27. what constitutes, 60-62. pre-existing debt is, 60-62. what constitutes holder for value, 62, 63. lien on instrument, constitutes, 63-65. discount by bank, 97. WAIVER of benefits of law by obligor, 23. of presentment for payment, 155-157. what will amount to waiver of presentment for payment, 155, 156. pleading waiver, 167. of notice of dishonor, 184, 185. when embodied in instrument, 186. when written above signature, 186. of protest, what it includes, 186, 187. extent of, 187. WARRANTY, where negotiation by delivery, 128, 129. breach of does not require proof of good faith, 117. express warranty, 128. where negotiation by qualified indorsement, 128, 129. of genuineness, 128-131. of validity, 128. in case of instrument indorsed " for collection," 128, 129. no implied warranty that note is not void for usury, 128, 129. no implied warranty of capacity to contract on sale of municipal bonds, 128, 129. when warranty of genuineness not implied, 128. 290 INDEX. (The references are to pages.) WARRANTY— Continued. of capacity of prior parties where negotiation by delivery or qualified indorsement, 129. general indorser warrants, that instrument is genuine, 129- 133. in case of public or corporate securities, 129. general indorser warrants, that instrument is what it pur- ports to be, 129-133. that he has a good title, 129- 133. that prior parties had capac- ity to contract, 129-133. that instrument is valid and subsisting, 129-133. to whom warranty runs, 130. in case of certificate of deposit, 132. knowledge of holder, 132. " WITHOUT DEFALCATION," words have no force, 13. " WITHOUT RECOURSE," effect of term. 81. does not impair negotiable character, 81. is not evidence of any defect of title, 106, 107. WRITING may be in pencil, 11. negotiable instrument must be in, 11. WRITTEN, what included in term, 6. WRITTEN PROVISIONS prevail over printed, 40.