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.

§ 63. 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.1

§ 64. A holder in due course holds the instrument free from any defect of title of prior parties and free from defences available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon.

§ 65. In the hands of any holder other than a holder in due course a negotiable instrument is subject to the same defences 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.

§ 66. 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 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 VI.

LIABILITY OF PARTIES.

§ 67. 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.

§ 68. 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 ac1 The statutes may differ here. See ante, pp. 233–237.

·cepted and1 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.

§ 69. The acceptor, by accepting the instrument, engages that he will pay it according to the tenor of his acceptance, and admits:

1. 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. § 70. 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.

§ 71. 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.

§ 72. 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 trans

1 Sic. The word of course should be or.

:

feree. The provisions of subdivision three of this section do not apply to persons negotiating public or corporate securities other than bills and notes.

1

§ 73. Every indorser who indorses without qualification warrants to all subsequent holders in due course:

1. The matters and things 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.

§ 74. Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser.

§ 75. 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.

§ 76. Where a broker or other agent negotiates an instrument without indorsement, he incurs all the liabilities prescribed by section seventy-two of this Act, 2 unless he discloses the name of his principal and the fact that he is acting only as agent.

ARTICLE VII.

PRESENTMENT FOR PAYMENT.

§ 77. Presentment for payment is not necessary in order to charge the person primarily liable on the instrument; but if the

This seems to include agents indorsing only in collection, e. g. a collecting bank, overturning the distinction in United States v. American Bank, 70 Fed. Rep. 232. See National Park Bank v. Seaboard Bank, 114 N. Y. 28. See Amendment, 1898, ch. 336, § 10.

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.

§ 78. Where the instrument is not payable 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.

§ 79. Presentment for payment, to be sufficient, must be made: 1. By the holder, or by some person authorized to receive payment on his behalf;

2. At a reasonable hour on a business day;

3. At a proper place as herein defined;

4. To the person primarily liable on the instrument, or if he 18 absent or inaccessible to any person found at the place where the presentment is made.

§ 80. Presentment for payment is made at the proper place: 1. Where a place of payment is specified in the instrument, and it is there presented;

2. Where no place of payment is specified, but the address of the person to make payment is given in the instrument, and it is there presented;

3. Where no place of payment is specified, and no address is given, and the instrument is presented at the usual place of business or residence of the person to make payment."

4. In any other case if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence.

§ 81. The instrument must be exhibited to the person from

1 The words 'and . . . purpose' are not in the New York Statute as at first passed, but are inserted by Amendment, 1898, chap. 336, § 11. The Colorado Statute does not contain the words.

2 As to preference of the place of business, see ante, p. 110.

Amendment, 1898, chap. 336, § 12.

whom payment is demanded, and when it is paid must be delivered up to the party paying it.'

§ 82. Where the instrument is payable at a bank, presentment for payment must be made during banking hours, unless the person to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient.

§ 83. Where the person primarily liable on the instrument is dead, and no place of payment is specified, presentment for payment must be made to his personal representative, if such there be, and if with the exercise of reasonable diligence he can be found.

§ 84. Where the persons primarily liable on the instrument are liable as partners, and no place of payment is specified, presentment for payment may be made to any one of them even though there has been a dissolution of the firm.

§ 85. Where there are several persons not partners, primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all.

§ 86. Presentment for payment is not required in order to charge the drawer where he has no right to expect or require that the drawee or acceptor will pay the instrument.

§ 87. Presentment for payment is not required in order to charge an indorser where the instrument was made or accepted for his accommodation, and he has no reason to expect that the instrument will be paid if presented.

§ 88. Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence.

§ 89. Presentment for payment may be dispensed with: 1. Where after the exercise of reasonable diligence presentment as required by this Act cannot be made;

2. Where the drawee is a fictitious person;

3. By waiver of presentment, express or implied.

1 But suppose he does not require it, and that it is not delivered up? See ante, p. 273.