an indorsement is conditional, a party required to pay the instrument may disregard the condition, and make payment 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.

§ 1153. Other kinds of indorsement.

Section 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. 13

Section 41. [INDORSEMENT WHERE PAYABLE TO TWO OR MORE PERSONS.] Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others.

It

This section follows the previously existing rule.14 would seem, however, that either payee or indorsee could discharge the instrument, though unable to negotiate it.15 The section does not cover the case of an instrument payable to "A or B," but only the case of joint payees. 16

Section 42. [EFFECT OF INSTRUMENT DRAWN OR INDORSED TO A PERSON AS CASHIER.] Where an in

13 In the Illinois Act instead of the words "payable to bearer," are the words "originally payable to or indorsed specially to bearer." See the criticism of the section in 26 Harv. L. Rev. 493, 500. It is probably applicable only to instruments which on their face are expressed to be payable to bearer, though section 9 (5) classifies instruments indorsed in blank as also payable to bearer. See Crawford,

N. I. L. (4th ed.) 83.

14 Foster v. Hill, 36 N. H. 526. See Allen v. Corn Exchange Bank, 87 N. Y. App. Div. 335, 84 N. Y. S. 1001. Under the statute see First Nat. Bank v. Gridley, 112 N. Y. App. D. 398, 98 N. Y. S. 445; Martz v. State Nat. Bank, 147 N. Y. App. Div. 250, 131 N. Y. S. 1045.

15 See supra, § 343.

16 Union Bank v. Spies, 151 Iowa, 178, 130 N. W. 928. See Sec. 8 (5) of the Act, supra, § 1139, also § 325.

strument is drawn or indorsed to a person as "C Cashier" or other fiscal officer 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 indorsement of the officer. 17

This section is an illustration of the principle that the actual owner of an instrument may negotiate it though not named by his legal name in the instrument. The converse of the section is equally true; that is, a bill or note payable to, or indorsed to a corporation may be indorsed by a fiscal officer if acting within his authority, in his own name with the addition of his official title; 18 and though the signature as maker or drawer of a negotiable instrument by an officer of a corporation in his own name with the addition of his official title creates no presumption that the instrument was the obligation of the corporation, this may be shown.19

Section 43.-[INDORSEMENT WHERE NAME IS MISSPELLED, ETC.] 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. 20

Section 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.21

21

§ 1154. Time and place of indorsement, etc.

Section 45. [TIME OF INDORSEMENT; PRESUMP TION.] Except where an indorsement bears date after the

17 Johnson v. Buffalo Bank, 134 Iowa, 731, 112 N. W. 165; Eades v. Muhlenberg County Sav. Bank, 157 Ky. 416, 163 S. W. 494; Quincy Mutual Fire Ins. Co. v. International Trust Co., 217 Mass. 370, 104 N. E. 845, 1915 B. L. R. A. 725. Cf. First Nat. Bank v. McCullough, 50 Oreg. 508, 93 Pac. 366,

17 L. R. A. (N. S.) 1105, 126 Am. St. 758.

18 See supra, § 1149.

19 See supra, §§ 298-301, 1144.
20 See supra, § 1149.

21 Chelsea Exchange Bank v. First &c. Church, 152 N. Y. S. 201, 89 N. Y. Misc. 616.

maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue.22

Section 46. [PLACE OF INDORSEMENT; PRESUMPTION.] Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated.

Though a note is presumed to have been made where it is dated, evidence of a different actual place of making is admissible, 23 unless this would invalidate the instrument; in which case the signer is estopped to deny the truth of the representation contained in the instrument.24

OF NEGOTIABLE

Section 47. [CONTINUATION CHARACTER.] An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise.

Under this section a bill or note is negotiable after maturity,25 but the right of one who then purchases will be limited by the fact that he is not a holder in due course. He will succeed to the legal title of his transferor, but will be subject to all defences which were good against the latter.26

Section 48.-[STRIKING OUT INDORSEMENT.] The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument. 27

22 See German-American Bank v. Cunningham, 97 N. Y. App. D. 244, 89 N. Y. S. 836; Cedar Rapids Nat. Bank v. Bashara, 39 Okla. 482, 135 Pac. 1051.

23 Finch v. Calkins, 183 Mich. 298, 149 N. W. 1037.

24 Chemical Nat. Bank v. Kellogg, 183 N. Y. 92, 75 N. E. 1103, 2 L. R. A. (N. S.) 299, 111 Am. St. 717.

25 Barnes v. Carr, 65 Fla. 87, 61 So.

184; Oakdale Mfg. Co. v. Clarke, 29 R. I. 192, 69 Atl. 681.

26 Ohio Valley &c. Co. v. Great Southern F. Ins. Co., (Ky. 1917), 197 S. W. 399.

27 See New Haven Mfg. Co. v. New Haven Pulp Co., 76 Conn. 126, 55 Atl. 604; Jerman v. Edwards, 29 Dist. Col. App. 535; Howell v. Commercial Nat. Bank, 40 App. D. C. 370; Ensign #. Fogg, 177 Mich. 317, 143 N. W. 82;

§ 1155. Transfer of negotiable instrument distinguished from negotiation.

Section 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 transferor had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferor. 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. 28

The effect of this section is to give the transferee the rights of an assignee of a tangible non-negotiable chose in action who has power to sue in his own name. 29 But he is not a holder in due course.3

30

§ 1156. Reissue.

Section 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

Mackintosh v. Gibbs, 79 N. J. L. 40, 74 Atl. 708.

28 In the Illinois and Missouri Acts, after the word "right," the first sentence continues as follows: "to enforce the instrument against one who signed for the accommodation of his transferor, and the right to have the indorsement of the transferor, if omitted by accident or mistake. But for the purpose," etc. In the Colorado Act, at the end of the first sentence, there is added, "if omitted by mistake, accident or fraud." In the Wisconsin Act, at the end of the section, there is added: "When the indorsement was omitted by mistake, or there was an agreement to indorse made at the time of the transfer, the indorsement, when made, relates back to the time of the transfer."

29 Smith v. Nelson Land & Cattle Co., 212 Fed. 56, 128 C. C. A. 512; Bromfield Bank v. McKinley, 53 Col. 279, 125 Pac. 493; Goodsell v. McElroy Bros. Co., 86 Conn. 402, 85 Atl. 509; Foster's Admr. v. Metcalfe, 144 Ky. 385, 138 S. W. 314; Kiefer v. Tolbert, 128 Minn. 519, 151 N. W. 529; Carter v. Butler, 264 Mo. 306, 174 S. W. 399; Martz v. State Nat. Bank, 147 N. Y. App. Div. 250, 131 N. Y. S. 1045. But see Myers v. Petty, 153 N. C. 462, 69 S. E. 417; Elgin City Banking Co. v. McEachern, 163 N. C. 333, 79 S. E. 680.

30 Foster's Adm. v. Metcalfe, 144 Ky. 385, 138 S. W. 314; Manufacturers' &c. Co. v. Blitz, 131 N. Y. App. D. 17, 115 N. Y. S. 402; Landis v. White, 127 Tenn. 504, 152 S. W. 1031.

not entitled to enforce payment thereof against any intervening party to whom he was personally liable.31

§ 1157. Who is a holder in due course.

ARTICLE IV

RIGHTS OF THE HOLDER

Section 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.32

Section 52.-[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; 33

(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; 34

(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.35

31 See Quimby v. Varnum, 190 Mass. 211, 76 N. E. 671. The words "subject to the provisions of this Act" probably refer to Section 121. That section relates exclusively to payment at or after maturity. Though by the terms of the last sentence there can be no recovery against a party whose obligation intervenes between the two acquisitions of the instrument of the prior party, it may happen by negotiation of the instrument to a subsequent holder in due course that the intervening party may become liable.

32 "Holder" includes one who holds as security, and such a holder may enforce the instrument, Melton v. Pensacola Bank, 190 Fed. 126, 111 C. C. A. 166, as may a holder for

collection with no personal interest. Craig v. Palo Alto Stock Farm, 16 Idaho, 701, 102 Pac. 393; Harrison v. Pearcy, 174 Ky. 485, 192 S. W. 513. But see Third Nat. Bank v. Exum, 163 N. C. 199, 79 S. E. 498.

33 As to incomplete instruments, see supra, §§ 1140, 1141.

34 The last clause of this subsection refers to two cases: first, that of demand paper which has previously been presented and dishonored, though the purchaser had no reason to suppose so; and, second, to a time bill of exchange which has previously been presented for acceptance and acceptance refused. As to when an instrument is overdue, see infra, §§ 1170-1176.

35 In the Wisconsin Act there is the