Ibid.

1897.

Where payable on demand.

Instrument payable to order.

1. Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or

2.

Authorizes a confession of judgment if the instrument 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 provision or stipulation otherwise illegal.

SEC. 6. 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.

SEC. 7. 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.

SEC. 8. 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

The drawer or maker; or

2.

Two or more payees jointly; or

5.

Payee must be named.

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.

SEC. 9. The instrument is payable to bearer:

1.

Payable to bearer.

2.

When it is expressed to be so payable; or

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-ex

isting 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 indorsement in blank.

SEC. 10. The instrument need not follow the language of this act, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof.

1897.

Not required to follow the

language of this act.

ment.

SEC. 11. Where the instrument or an acceptance or any indorsement thereon is dated, such date is deemed prima facie Date of instruto be the true date of the making, drawing, acceptance or indorsement as the case may be.

SEC. 12. 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 instrument so dated is delivered acquires the title thereto as of the date of delivery.

Ante-dated or post-dated ini valid when

strument not

not done for i'legal or fraudulent purpose.

Undated instrument.

wanting in ma

terial particu

SEC. 13. Where an instrument 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 undated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be payable accordingly. The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due Wrong date. course; but as to him, the date so inserted is to be regarded as the true date. SEC 14. Where the instrument is wanting in any material particular, the person in possession thereof has a prima Instrument facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person mak- lars. ing 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 Requirements any such instrument when completed, may be enforced to enforce inagainst any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes When valid in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time.

strument.

and effectual.

Incomplete

SEC. 15. Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without instrument not authority, be a valid contract in the hands of any holder, as

valid.

1897.

When incomplete and reVocable.

Ambiguous lan

against any person whose signature was placed thereon before delivery.

SEC. 16. Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a holder in due course, a valid 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 possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.

SEC. 17. Where the language of the instrument is am guage and omi- biguous, or there are omissions therein, the following rules o construction apply:

sions in instru

ment.

Ibid.

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, references 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 considered 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 provisions prevail;

5. Where the instrument is so ambiguous that there is doubt whether it is a bill or note, the holder may treat it as either at his election;

6. Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is 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.

SEC. 18. No person is liable on the instrument whose Who not liable. 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.

1897.

agent.

SEC. 19. The signature of any party may be made by a duly authorized agent. No particular form of appointment is Signature of necessary for this purpose; and the authority of the agent may be established as in other cases of agency.

SEC. 20. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal does not exempt him from personal liability.

Signing instru

ment on behalf

of principal.

SEC. 21. A signature by "procuration" operates as notice that the agent has but a limited authority to sign, and the Procuration. principal is bound only in case the agent in so signing acted within the actual limits of his authority.

Indorsement by

SEC. 22. The indorsement or assignment of the instrument by a corporation or by an infant passes the property corporation or therein, notwithstanding that from want of capacity the corporation or infant may incur no liability thereon.

infant.

ture.

SEC. 23. Where a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, Forged signaor to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party, against whom it is sought to enforce such right, is precluded from setting up the forgery or want of authority.

ARTICLE II.

Consideration.

SEC. 24. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value.

tutes value.

SEC. 25. Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt con- What constistitutes value; and is deemed such whether the instrument is payable on demand or at a future time.

Where value

SEC. 26. Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect has been given. to all parties who became such prior to that time.

SEC. 27. Where the holder has a lien on the instrument,

Lien on instru

arising either from contract or by implication of law, he is ment. deemed a holder for value to the extent of his lien.

1897.

Failure of consideration.

Accommoda

tion party.

When negotiated.

Indorsement.

Signature.

Indorsement

must be of the entire instrument.

Special, restrictive or qualified

indorsements.

Special indorsement.

Indorsement in blank.

SEC. 28. Absence or failure of consideration is matter of defense as against any person not a holder in due course; and partial failure of consideration is a defense pro tanto whether the failure is an ascertained and liquidated amount or otherwise.

SEC. 29. 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, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.

ARTICLE III.

Negotiation.

SEC. 30. An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer it is negotiated by delivery; if payable to order it is negotiated by the indorsement of the holder completed by delivery.

SEC. 31. 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.

SEC. 32. The indorsement must be an indorsement of the entire instrument. An indorsement, which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument. But where the instrument has been paid in part, it may be indorsed as to the residue.

SEC. 33. An indorsement may be either special or in blank; and it may also be either restrictive or qualified, or conditional.

SEC. 34. 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 indorsement in blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery.

SEC. 35. The holder may convert a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement.