without indorsing it, the transfer vests in the transferee such title as the transferer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferer. But for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made. § 80. 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. (As amended by chap. 336 of 1898, § 9-) ARTICLE V. RIGHTS OF HOLDER. SECTION 90. Right of holder to sue; payment. 91. What constitutes a holder in due course. 92. When person not deemed holder in due course. 94. When title defective. 95. What constitutes notice of defect. 8 90. 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. § 91. What constitutes a holder in due course.—A holder in due course is a holder who has taken the instrument under the following conditions: 1. That it is complete and regular upon its face; 2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; 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. 892. When person not deemed holder in due course.-Where an instrument payable on demand is negotiated an unreasonable Rights of Holder. $$ 93-98 length of time after its issue, the holder is not deemed a holder in due course. § 93. Notice before full amount paid.—Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the amount theretofore paid by him. § 94. When title defective. The title of a person who negotiates an instrument is defective within the meaning of this act when he obtained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud. § 95. What constitutes notice of defect.--To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. § 96. 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 available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon. 897. 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. 98. Who deemed holder in due course.-Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as 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 defective title. SS 110-114 Article VI. ARTICLE VI. LIABILITIES OF PARTIES. SECTION 110. Liability of maker, 111. Liability of drawer. 112. Liability of acceptor. 113. When person deemed indorser. 114. Liability of irregular indorser. 115. Warranty; where negotiation by delivery, et cetera. 116. Liability of general indorsers. 117. Liability of indorser where paper negotiable by delivery. 119. Liability of agent or broker. § 110. Liability of maker. The maker of a negotiable 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. § 11. 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 and paid, or both, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder. § 112. Liability of acceptor.-The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance; and admits : I. 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. § 113. When person deemed indorser.-A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. 8 114. Liability of irregular indorser.-Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser in accordance with the following rules: 1. If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties. 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. § 115. Warranty where negotiation by delivery, et cetera. -Every person negotiating an instrument by delivery or by a qualified indorsement, warrants: I. That the instrument is genuine and in all respects what it purports to be; 2. That he has a good title to it; 3. That all prior parties had capacity to contract; 4. That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless. 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 negotiating public or corporate securities, other than bills and notes. § 116. Liability of general indorser.-Every indorser who indorses without qualification, warrants to all subsequent holders in due course : I. The matter 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 indorsement valid and subsisting. And in addition, he engages that on due presentment, it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. § 117. Liability of indorser where paper negotiable by dclivery.-Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser. § 118. Order in which indorsers are liable.-As respects one another, indorsers are liable prima facie in the order in which they indorse; but evidence is admissible to show that as between or among themselves they have agreed otherwise. Joint payees or joint indorsees who indorse are deemed to indorse jointly and severally. § 119. Liability of agent or broker. Where a broker or other agent negotiates an instrument without indorsement, he incurs. all the liabilities prescribed by section one hundred and fifteen of this act, unless he discloses the name of his principal, and the fact that he is acting only as agent. (As amended by chap. 336 of 1898, § 10.) ARTICLE VII. PRESENTMEnt for PayMENT. SECTION 130. Effect of want of demand on principal debtor. 133. Place of presentment. 134. Instrument must be exhibited. 135. Presentment where instrument payable at bank. 136. Presentment where principal debtor is dead. 137. Presentment to persons liable as partners. 138. Presentment to joint debtors. 139. When presentment not required to charge the drawer. 140. When presentment not required to charge the indorser. 141. When delay in making presentment is excused. 142. When presentment may be dispensed with. 143. When instrument dishonored by non-payment. 144. Liability of person secondarily liable, when instrument dis honored. 145. Time of maturity. 146. Time; how computed. 147. Rule where instrument payable at bank. 148. What constitutes payment in due course. § 130. Effect of want of demand on principal debtor.— Presentment for payment is not necessary in order to charge the person primarily liable on the instrument; 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, and has funds there available for that purpose, 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. (As amended by chap. 336 of 1898, § 11.) |