ing 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 if omitted by mistake, accident or fraud. 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. back. Sec. 50. Where an instrument is negotiated 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. ARTICLE IV. Rights of the Holder. Sec. 51. The holder of a negotiable instrument Holder may may sue thereon in his own name; and payment to sue. him in due course discharges the instrument. Sec. 52. A holder in due course is a holder who Who is holder has taken the instrument under the following condi- in due course. tions: 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. Sec. 53. Where an instrument payable on de- when not mand is negotiated an unreasonable length of time holder in due after its issue, the holder is not deemed a holder in due course. course. to equity. Sec. 54. Where the transferee receives notice of Holder subject any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid Void notes. Notice of infirmity. Title of holder in due course. Title of others than holder in due course. Every holder prima facie holder in due course. the full amount agreed to be paid therefor, he will be Sec. 55. The title of a person who negotiates an Sec. 56. To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. Sec. 57. 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. Sec. 58. In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable. 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. Sec. 59. 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. ARTICLE V. Liabilities of Parties. maker. Sec. 60. The maker of a negotiable instrument Liability of 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. Sec. 61. The drawer by drawing the instru-Same. ment admits the existence of the payee and his then capacity to indorse; and engages that on due presentment the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any indorser who may be compelled to pay it. But the drawer may insert in the instru- liability. ment an express stipulation negativining [negativing] or limiting his own liability to the holder.. May limit Sec. 62. The acceptor by accepting the instru- Payee accepts ment engages that he will pay it according to the limitations. tenor of his acceptance; and admits: 1. The existence of the drawer, the genuine- Admissions of ness of his signature, and his capacity and authority payee. to draw the instrument; and 2. The existence of the payee and his then ca- Same. pacity to indorse. Sec. 63. A person placing his signature upon who is an instrument otherwise than as maker, drawer or indorser. acceptor is deemed to be an indorser unless he clearly indicates by appropriate words his intention to be bound in some other capacity. Sec. 64. Where a person, not otherwise party same. 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 Effect of indorsement. Same. Same. Same. 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. Sec. 65. Every person negotiating an instrument by delivery or by a qualified indorsement, warrants: 1. That the instrument is genuine and in all respects what it purports to be; 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 sub-division three of this section do not apply to persons negotiating public or corporate securities, other than bills and notes. Sec. 66. Every indorser who indorses without qualification, warrants to all subsequent 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 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. Sec. 67. Where a person places his indorse- Liability of ment on an instrument negotiable by delivery he in- indorser. curs all the liabilities of an indorser. Sec. 68. As respects one another, indorsers are Same. 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. Sec. 69. Where a broker or other agent nego- Liability of tiates an instrument without indorsement, he incurs broker. all the liabilities prescribed by Section 65 of this Act, unless he discloses the name of his principal, and the fact that he is acting only as agent. ARTICLE VI. Presentment for Payment. Sec. 70. Presentment for payment is not neces- Notice and sary in order to charge the person primarily liable demand. 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, 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. Sec. 71. Where the instrument is not payable same. 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 reasonable time after the last negotiation thereof. Sec. 72. Presentment for payment, to be sufficient, must be made: 1. By the holder, or by some person authorized to receive payment on his behalf; How demand must be made. |