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."

19. 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.1

20. Next may be considered the parties to such an instrument. In every contract there must be two or more parties who possess the legal ability to make, or who can be compelled to perform, their promises or undertakings; but some persons who make and indorse negotiable paper, though disabled from contracting generally, cannot defend on the ground of personal disability. The law has wisely limited the authority of a minor, and he cannot engage in trade, or give bonds, or make or indorse notes. If, therefore, he should become surety on a note, the contract must be confirmed after he has attained full age. A mere acknowledgment or part payment would not suffice. But, if he should give a

1Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value, and is deemed such whether the instrument is payable on demand or at a future time.

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 became such prior to that time.

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.

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

note for necessaries, there could be a recovery on this, or on the contract for them. Again, if he should indorse a note, the holder would acquire a good title against all the parties thereto except the minor himself.

21. At common law a married woman cannot sign notes, but this right has been conferred on her in most states by statute. Her authority to sign them differs somewhat in the various states, but, in general, it may be said that she possesses ample authority to sign for whatever may be needful in the transaction of business, in the purchase of property, in the payment of her debts, and, generally, for any purpose relating to her welfare.

22. Notes and other instruments are often made and taken by agents. "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." Numerous questions have arisen concerning their authority. Some of these have related to their general authority, while others, when this was lacking, to the conduct of their principals in ratifying or disapproving their conduct. Let us first consider the cases of an agent's authority to give notes. A clerk in a store has no authority to borrow money and draw bills in the name of the firm that employs him. An agent who is authorised to sell for cash cannot take promissory notes for the purchase money. But the cashier of an incorporated bank is the general executive officer to manage its concerns, and his official notes or indorsements are regarded as those of the corporation. The president of a bank has authority to accept security for a note in payment of a debt due to it, and also a new note in settlement of the

old one. Likewise, an insurance company is bound by the acts of its agent who accepts notes for the premium.

23. The cases in which an agent cannot be held personally will next be considered. An officer of a corporation who makes known his principal's name is not liable, even though he should give a note in his own. Obviously, he is not personally liable when he contracts on behalf, or in the name, of his principal, in performing the business of his agency. One of the most familiar applications of this principle is the drawing of a bill by an agent on his principal for a purchase made solely for the principal's benefit. For example, an agent who is authorised to purchase cotton has the right to draw on his principal in favour of the bank that advances the money to pay for it. Should an agent's act be disapproved the cotton must not be received, otherwise the principal must accept and pay the draft. Nor need the agent show his authority to make the purchase to the bank that cashes the draft. If he has the authority that is enough without showing the evidence of it.

24. As persons of unsound mind also give and indorse notes their liability must be considered. A person who has given his note and received the money thereon from a bank or other party not knowing his condition must pay unless a fraud was practised on him. He cannot be permitted to obtain the money of innocent parties and retain the same.

An accommodation maker or indorser of a note who receives no benefit therefrom and whose mind was not sound at the time of making or indorsing it, whether this was known at the time by other parties or not, is not

liable. But he is liable when his indorsement was a renewal of another given at a time when his mental soundness was unquestionable.

25. A person who takes advantages of the drunkenness of another, and procures his signature to a note, commits a fraud, and the transaction can be disregarded or confirmed. Whatever the rule may have been, now, if the fraud affects the individual interests of the parties merely, the transaction may be ratified. The note, though, must be based on a sufficient consideration and be free from any other legal defect.1 The contract of a habitual drunkard, after his legal condition has been ascertained, is void.

The defence of drunkenness cannot be interposed against the holder of a note for value who has taken it in good faith. Thus, M, when drunk, made a negotiable note that was bought by a bank for half its value. The bank was informed that it had been given for a patent hayfork, and required a guaranty for its payment. The bank was legally free from gross negligence in taking the note without making inquiry of the maker. Even gross negligence would not have defeated the bank's title without proof that it had taken it in bad faith, or with knowledge of the fraud.

26. A note or other negotiable instrument signed, "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." "Where an instrument containing the words, 'I

1 For example, it must not involve a crime that cannot be personally settled.

promise to pay' is signed by two or more persons they are deemed to be jointly and severally liable thereon.

"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."

"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 authorised; 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.1

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

27. One of the chief characteristics of a negotiable instrument is the mode of transferring it. This can be done by indorsement, whereby the same rights of ownership are conferred on the new holders as were enjoyed by the other. Additional rights also are acquired, as the indorser becomes conditionally liable for its payment, unless he is relieved by agreement. When a note is indorsed and discounted by a bank or individual, the ownership is transferred, and the payee has no further interest therein.

1"The signature of any party may be made by a duly authorised agent."