388 [8 C. J.] ship BILLS AND NOTES 63 will pass with the transfer of the note. [ 574] L. Transfer as Cutting Off Equities-1. Transfer by Indorsement, or by Delivery if Payable to Bearer. By the indorsement of a bill or a note, or by its delivery, if it is payable to bearer, the purchaser before maturity and for value takes it free from defenses between prior parties of which he had no notice, except as to certain defenses which can always be set up without regard to who is the holder.65 In other words, he is a holder in due course.66 64 Phelps v. Sargent, 69 Minn. 118, 71 NW 927; Harbord v. Cooper, 43 Minn. 466, 45 NW 860 (where the guaranty was contained in an earlier indorsement); Herrick v. Guarantors' Finance Co., 58 App. Div. 30, 68 NYS 560; Bunker v. Langs, 76 Hun 543, 28 NYS 210. [a] Although the guaranty was contained in a separate instrument attached to, or separate and transferred with, the note, the rule was applied. Herrick v. Guarantors' Finance Co., 58 App. Div. 30, 68 NYS Το same effect Harbord 560. Cooper, 43 Minn. 466, 45 NW 860 (where the guaranty was contained in an earlier indorsement). 63. V. Lichfield Union Guardians of Poor v. Greene, 1 H. & N. 884. 64. Ark.-Bothell v. Fletcher, 94 Ark. 100, 125 SW 645; Woodruff v. Webb, 32 Ark. 612. Bank v. Nat. Ida.-Southwest Baker, 23 Ida. 428, 130 P 799. Ill. Smith v. Western Trust, etc., Co., 150 Ill. A. 587; Howell v. Merchants Trust, etc., Co., 134 Ill. A. 467; Wilcox v. Tetherington, 103 Ill. A. 404; Mann v. Merchants' L. & T. Co., 100 Ill. A. 224 (where by virtue of a statute the indorsee obtains the instrument free from defenses other than fraud or circumvention in obtaining its execution); Piper v. HeadSee Sill v. Pate, 133 lee, 39 Ill. A. 93. Ill. A. 423. Ind.-Proctor v. Cole, 115 Ind. 15, 17 NE 189; Scotten v. Randolph, 96 Ind. 581; Proctor v. Baldwin, 82 Ind. 370; Judy v. Warne, (A.) 100 NE 483. Iowa.-Goodpaster v. Voris, 8 Iowa 334, 74 AmD 313. Mo.-Macy v. Kendall, 33 Mo. 164; Northwestern Sav. Bank v. International Bank, 90 Mo. A. 205. Bank v. State N. Y.-Citizens' Cowles, 39 Misc. 571, 80 NYS 598 86 NYS 38 [aff 89 App. Div. 281, (rev on other grounds 180 N. Y. 346, 73 NE 33, 105 AmSR 765)] (dishonored check). Tex.-Greneaux v. Wheeler, 6 Tex. 515. Eng.-Edwards v. Jones, 2 M. & W. 414, 150 Reprint 819. 65. See infra §§ 999-1066. 66. Ala.-Gookin v. Richardson, 11 67. Ala. 889, 46 AmD 232; Andrews v. McCoy, 8 Ala. 920, 42 AmD 669. Conn.-Simpson v. Hall, 47 Conn. 417. Me.-Haskell v. Mitchell, 53 Me. 468, 89 AmD 711; Calder v. Billington, 15 Me. 398. Mich.-Minor v. Bewick, 55 Mich. 491, 22 NW 12. Minn.-White v. Phelps, 14 Minn. 27, 100 AmD 190. Mo.-Patterson v. Cave, 61 Mo. 439: 68. U. S.-Thomson-Houston Elec- V. [§ 575] 2. Transfer by Assignment or by Delivery Where Paper Not Payable to Bearer. Where an instrument payable to order is negotiated by delivery without indorsement, or by a written or parol assignment not amounting to an indorsement, the holder acquires thereby only the same rights as would pass to the assignee of a bill or a note not negotiable, and he takes subject to all the defenses and equities to which the paper was subject in the In Texas, however, the hands of the transferor.68 67 Ark.-Tatum v. Kelley, 25 Ark. 209,, 94 AmD 717; Worthington v. Curd, 22 Ark. 277; Walker v. Johnson, 13 Ark. 522; Robinson v. Swigart, 13 Ark. 71; Smith v. Capers, 13 Ark. 9; Oldham v. Wallace, 4 Ark. 559. Cal.-Cooke v. Mesmer, 164 Cal. 332, 128 P 917; Hays v. Plummer, 126 Cal. 107, 58 P 447, 77 AmSR 153; Wright v. Levy, 12 Cal. 257. Colo.-Bromfield Bank v. McKinley, 53 Colo. 279, 125 P 493; Davis v. Johnson, 4 Colo. A. 545, 36 P 887. Conn.-Simpson v. Hall, 47 Conn. 417. Ga.-Benson v. Abbott, 95 Ga. 69, V. Ill. Centralia First Nat. Bank v. Strang, 72 Ill. 559; Fortier v. Darst, 31 II. 212; Bourdeaux v. Coquard, 47 Ill. A. 254; Rabberman v. Muehlhausen, 3 Ill. A. 326. 2 Ind.-Huntington First Nat. Bank v. Henry, 156 Ind. 1, 58 NE 1057; Foreman v. Beckwith, 73 Ind. 515; Johnson v. McCabe, 37 Ind. 535 (holding that want of consideration is a V. Armstrong, 585; Elliott good defense); Lewis v. Hathman, 7 Ind. Blackf. 198; Union Trust Co. v. Adams, 54 Ind. A. 166, 101 NE 741; Citizens' State Bank, 25 Toner v. Glick, 151 Ind. A. 29, 56 NE 731. Iowa.-Woodbury Iowa 648, 132 NW 67; Condon v. Barnum, 106 NW 514; Hecker v. Boylan, 126 Iowa 162, 101 NW 755; Franklin v. Twogood, 18 Iowa 515; Younker v. Martin, 18 Iowa 143. V. Kan. Calvin v. Sterritt, 41 Kan. 215, 21 P 103; Hatch v. Barrett, 34 Kan. 223, 8 P 129; Hadden v. Rodkey, 17 Kan. 429; McCrum v. Corby, 11 Kan. 464; Blood v. Northrup, 1 Kan. 28; Hale v. Hitchcock, 3 Kan. A. 23, 44 P 446. Ky. Harrigan v. Advance Thresher Co., 81 SW 261, 26 KyL 317; Powers v. Hambrick, 74 SW 660, 25 KyL 30; Wade v. Foster, 71 SW 443, 24 KyL 1292; Stokeley v. Buckler, 61 SW 460, 22 KyL 1740; Gray Tie, etc., Co. v. Farmers' Bank, 109 Ky.,694, 60 SW 537, 22 KyL 1333; Garrott v. Jaffray, 10 Bush 413; Prather v. Weissiger, 10 Bush 117; True v. Triplett, 4 Metc. 57; Lucas v. Ramsey, 11 KyL 7 KyL Poston V. Goddard, 902; 742. La.-Pavey v. Stauffer, 45 La. Ann. 353, 12 S 512, 19 LRA 716. Me.-Allen v. Perry, 68 Me. 232; Haskell v. Mitchell, 53 Me. 468, 89 AmD 711; Savage v. King, 17 Me. 301; Calder v. Billington, 15 Me. 398. Mass.-Jones v. Witter, 13 Mass. 304. 56 SW 1080, 79 AmSR 515; Weber v. son v. Cave, 61 Mo. 439; Hill v. McOrten, 91 Mo. 677, 4 SW 271; PatterPherson, 15 Mo. 204, 55 AmD 142; Mont.-Cornish v. Woolverton, 32 Barton v. Rector, 7 Mo. 524. Mont. 456, 81 P 4, 108 AmSR 598; Sathre v. Rolfe, 31 Mont. 85, 77 P 431. Nebr.-Fassler v. Streit, 92 Nebr. 786, 139 NW 628 (holding that, while an assignment on the back of a mortgage or on a separate paper may be to transfer the equitable effective title to the notes secured, it is not a the maker to available commercial indorsement cutting off defenses against the original payee); Sackett v. Montgomery, 57 Nebr. 424, 77 NW 1083, 73 AmSR 522; Gaylord v. Nebraska Sav., etc., Bank, 54 Nebr. 104, 74 NW 415, 69 AmSR 705; Doll v. Nebr. 639, 28 NW Hollenbeck, 19 286. Nev.-Haydon v. Nicoletti, 18 Nev. 290, 3 P 473. N. H.-Boody v. Bartlett, 42 N. H. 558. N. Y.-Goshen Nat. Bank v. Bingham, 118 N. Y. 349, 23 NE 180, 28 NYSt 702, 16 AmSR 765, 7 LRA 595; Freund v. Importers', etc., Nat. Bank, 76 N. Y. 352; Martz v. North Tonawanda State Nat. Bank, 147 App. Div. 250, 131 NYS 1045; Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 NYS 83 [aff 42 Misc. 341, 86 NYS 701, and aff 183 N. Y. 511 mem, 78 NE 1100 mem]; Pitkin v. Clayton, 41 App. Div. 363, 58 NYS 483; Hedges v. Sealy, 9 Barb. 214; Smith v. Hedges, 89 Misc. 183, 152 NYS 95; McCarville v. Lynch, 14 Misc. 174, 35 NYS 383. N. C.-Elgin City Banking Co. v. McEachern, 163 N. C. 333, 79 SE 680; Woods v. Finley, 153 N. C. 497, 69 SE 502; Steinhilper v. Basnight, 153 N. C. 293, 69 SE 220; Johnston County Sav. Bank v. Scroggin Drug Co., 152 N. C. 142, 67 SE 253, 136 AmSR 821, 50 LRANS 581; Keel v. East Carolina Stone, etc., Co., 143 N. C. 429, 55 SE 826; Bresee v. Crumpton, 121 N. C. 122, 28 SE 351; Griffin v. Hasty, 94 N. C. 438; Spence v. Tapscott, 93 N. C. 246; Havens v. Potts, 86 N. C. 31; Miller v. Tharel, 75 N. C. 148; McMinn v. Freeman, 68 N. C. 341. N. D.-Massachusetts L. & T. Co. v. Twitchell, 7 N. D. 440, 75 NW 786. Oh.-Osborn v. Kistler, 35 Oh. St. 99; Kyle v. Thompson, 11 Oh. St. 616. Okl.-Gault v. Kane, 44 Okl. 763, 145 P 1128. Or.-Witt v. Campbell-Lakin Segar Co., 66 Or. 144, 134 P 316; Pomery First Nat. Bank v. McCullough, 50 Or. 508, 93 P 366, 126 AmSR 758, 17 LRANS 1105 and note; Moore v. Miller, 6 Or. 254, 25 AmR 518. Pa.-Losee v. Bissell, 76 Pa. 459. S. C.-Stevenson v. Bethea, 68 S. C. 246, 47 SE 71. Mich.-Minor v. Bewick, 55 Mich. 491, 22 NW 12; Spinning v. Sullivan, 48 Mich. 5, 11 NW 758; Matteson v. See Morris, 40 Mich. 52; Gibson v. Mil48 See McConnell, V. ler, 29 Mich. 355, 18 AmR 98. also Bilderback Richards, 61 Mich. 345, 12 NW 195. Minn.-Fredin 63 NW 1031; Pease Minn. 490, Rush, 2 Minn. 107. V. V. Miss.-Kennedy v. Jones, 29 S 819 (defense that note was procured by fraud); Meggett v. Baum, 57 Miss. 22. Mo.-Bishop v. Chase, 156 Mo. 158, Tenn.-Smith v. Lurry, Cooke 325. Utah.-Lebcher V. Ackiss, 107 Bennington, 52 later cases, developments rule is otherwise by statute.69 However, in all states, if the defenses arise subsequently to notice of the transfer, the transferee takes free from such defenses.70 By the certification of a negotiable check, properly negotiated, the depository of the fund checked upon becomes liable to the owner of the certified paper, and is bound to have in readiness the money to meet it, from the fund drawn upon. When the check is not negotiable, or has not been indorsed, but has by assignment come into the hands of a lawful owner who has a right to enforce it against the maker, the effect is the same."1 The Negotiable Instruments Law expressly provides that, 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.72 It follows that, under such provision, a transferee without indorsement, where the paper is payable to order, takes subject to defenses good against the transferor,73 precisely the same as under the law merchant; and Wash. 417, 100 P 846; Huntington v. Lombard, 22 Wash. 202, 60 P 414. Wis.-Galusha V. Sherman, 105 Wis. 263, 81 NW 495, 47 LRA 417; Terry v. Allis, 16 Wis. 478. V. Eng.-Edge v. Bumford, 31 Beav. 247, 54 Reprint 1133; Whistler Forster, 14 C. B. 248, 108 ECL 248, 143 Reprint 441, 4 ERC 322. Can. MacArthur v. MacDowell, 23 Can, S. C. 571. Sask. Heon v. Bonnet, 14 WestLR 534. [a] The only assignment which will cut off the equities of the maker of a note is one made in conformity with the statute and passing the legal title. Peck v. Bligh, 37 Ill. 317. [b] Written assignment of negotiable notes.-The rule applies to the case of a transfer of negotiable notes by a written assignment, either on the notes or in a separate instrument, without indorsement. Hull v. Planters', etc., Bank, 6 Ala. 761; Hatch v. Barrett, 34 Kan. 223, 8 P 129; Spinning v. Sullivan, 48 Mich. 5, 11 NW 758. [c] The fact that the drawee had paid other drafts transferred without indorsement did not preclude him from making any defense to the draft sued on which he might have made against the payee. Gray Tie, etc., Co. v. Farmers' Bank, 109 Ky. 694, 60 SW 537, 22 KyL 1333. [d] Transfer to principal without indorsement of note payable to agent. -A principal who, for a valuable consideration, takes from his agent, without indorsement by the agent, a note payable to the agent as "trustee" takes the same subject to all equitable defenses. Thomson-Houston Electric Co. v. Capitol Electric Co., 56 Fed. 849. as the transferee is not a holder in due course,' 76 [576] 3. Transfer after Maturity. It is universally held that the effect of a transfer which is made after the maturity of the paper is to subject the indorsee to all defenses existing between the original parties to the paper at the time of such transfer, so far as such defenses are available against his indorser." The transferee takes subthe assignment.'" Marling v. FitzGerald, 138 Wis. 93, 101, 120 NW 388, 131 AmSR 1003, 23 LRANS 177. fer may be made without indorse- 70. Ala.-Lewis v. Faber, 65 Alą. Ind.-Proctor v. Cole, 104 Ind. 373, Ky.-Daviess v. Newton, 5 J. J. La.-Pavey v. Stauffer, 45 La. Ann. 398. Mass.-Jones v. Witter, 13 Mass. 304. Minn.-Linn v. Rugg, 19 Minn. 181. N. H.-Clark v. Whitaker, 50 N. H. 474, 9 AmR 286; Southard v. Porter, 43 N. H. 379. N. Y.-Wheeler v. Wheeler, 9 Cow. Va.-Isaac Eberly Co. v. Gibson, 107 Eng.-Whistler v. Forster, 14 C. B. Set-offs see infra §§ 1062-1065. [a] Release of maker by payee before notice of the assignment bars an action by the assignee against the maker. Lowrey v. Danforth, 95 Mo. A. 441, 69 SW 39. 69. Prouty v. Musquiz, (Tex. Civ. [b] Commencement of suit may be A.) 94 Tex. 87, 58 SW 721, 996 [rev | notice. Smith v. Blatchford, 2 Ind. on other grounds 59 SW 568]. 184, 52 AmD 504. 71. Freund v. Importers', etc., Nat. Bank, 76 N. Y. 357 [quot Meuer v. Phenix Nat. Bank, 42 Misc. 341, 344, 86 NYS 701 (aff 94 App. Div. 331, 88 NYS 83, and aff 183 N. Y. 511 mem, 78 NE 1100 mem)]. 72. Marling V. FitzGerald, 138 Wis. 93, 120 NW 388, 131 AmSR 1003, 23 LRANS 177. 73. Sublette V. Brewington, 139 Mo. A. 410, 122 SW 1150; Gault v. Kane, 44 Okl. 763, 145 P 1128; Landis v. White Bros., 127 Tenn. 504, 152 SW 1031. [a] The Negotiable Instruments Law does not alter the law as to what constitutes a valid and binding transfer of negotiable paper between the indorser and the indorsee, so far as the rights of innocent purchasers are concerned. Justice V. Stonecipher, 188 Ill. A. 370 [aff 267 Ill. 448, 108 NE 722]. Commercial 74. Manufacturers' Co. v. Blitz, 131 App. Div. 17, 115 NYS 402; Woods v. Finley, 153 N., C. 497, 69 SE 502. [a] Under the Negotiable Instruments Law 8 30, a purchaser of a note payable to a company, but indorsed only by an individual who was alleged to be the sole owner of the company, was not a holder in due course. Shenandoah First Nat. Bank v. Kelgord, 91 Nebr. 178, 135 NW 548. 75. Marling v. FitzGerald, 138 Wis. 93, 120 NW 388, 131 AmSR 1003, 23 LRANS 177 and note. 76. That purchaser of note after maturity does not take subject to equities existing between the maker and any intermediate holder see infra § 1004. 11 L. ed. 1031; Andrews v. Pond, 13 Pet. 65, 10 L. ed. 61; Ferree v. New York Security, etc., Co., 74 Fed. 769, 21 CCA 83; Gwathney v. McLane, 11 F. Cas. No. 5,882, 3 McLean 371. See also Vermilye v. Adams Express Co., 21 Wall, 138, 22 L. ed. 609. 77. U. S.-Texas v. White, 10 Wall. 68, 19 L. ed. 839; Foley v. Smith, 6 [a] "Under our law it matters not [c] Latent defenses or equities.- Wall. 492, 18 L. ed. 931 (Louisiana how a negotiable note has been as- "The rule that a negotiable instru-case); Smyth v. Strader, 4 How. 404, signed. (1) Though the transfer be ment in the hands of an assignee for not evidenced by a writing it is value and without notice of defenses placed upon the same footing as a as between the original parties is transfer by indorsement. Word v. subject, nevertheless, to such deEllwood, 90 Tex. 130, 37 SW 414. If fenses, has relation to such equities transferred without notice of any or defenses as existed at the time of defenses as against the transferer the transfer, not to latent defenses it is subject to none." National Bank or equities which possibly may at of Commerce v. Kenney, 98 Tex. 293, some future time exist. As said in 299, 83 SW 368 [rev 35 Tex. Civ. A. Bush v. Cushman, 27 N. J. Eq. 131: 434, 80 SW 555]. (2) "It is true that It does not embrace 'equities or deunder our statutes (Rev. Stat. of fenses springing from defaults, or 1895, art. 307) the rules of the law even fraud of the assignor, committed merchant with respect to the trans- subsequent to the assignment, and fer of negotiable paper are not in all which had no existence, and were respects applicable to us. Such trans-simply possibilities, at the time of Ala.-Battle v. Weems, 44 Ala. 105; Carroll v. Malone, 28 Ala. 521; Glasscock v. Smith, 25 Ala. 474; Kirksey v. Bates, 1 Ala. 303; Robertson v. Breedlove, 7 Port. 541; Teague v. Russell, 2 Stew. 420. Ark.-Lay v. Wallace, 106 Ark. 458, 153 SW 601; Sorrells v. McHenry, 38 Ark. 127. ject to the equities of all who appear or are known Cal. San José Ranch Co. v. San José Land, etc., Co., 132 Cal. 582, 64 P 1097; Chase v. Whitmore, 68 Cal. 545, 9 P 942; Templeton v. Poole, 59 Cal. 286; Hayward v. Stearns, 39 Cal. 58; Elgin v. Hill, 27 Cal. 372; Sherman v. Rollberg, 11 Cal. 38; Fuller v. Hutchings, 10 Cal. 523, 70 AmD 746; Vinton v. Crowe, 4 Cal. 309; Folsom v. Bartlett, 2 Cal. 163. Conn.-Clark v. Sigourney, 17 Conn. 511; Robinson v. Lyman, 10 Conn. 10, 25 AmD 52. Ga.-Harrell v. Broxton, 78 Ga. 129, 3 SE 5; Burton v. Wynne, 55 Ga. 615; Staley v. Matheny, 30 Ga, 937; Carter v. Christie, 30 Ga. 813; Thomas v. Kinsey, 8 Ga. 421; Smith v. Lloyd, T. U. P. Charlt. 253. Ida.-Lewiston First Nat. Bank v. Williams, 2 Ida. (Hasb.) 618, 23 P 552. Ill. Towner v. McClelland, 110 Ill. 542; Bissell v. Curran, 69 Ill. 20; Cramer V. Willetts, 61 Ill. 481; Reichert v. Koerner, 54 111, 306; Lock v. Fulford, 52 Ill. 166; Rogers v. Gallagher, 49 Ill. 182, 95 AmD 583 and note; Stafford v. Fargo, 35 Ill. 481; Lord v. Favorite, 29 Ill. 149; Cooper v. Nock, 27 Ill. 301; McLain v. Lohr, 25 Ill. 507; Griffin v. Ketchum, 18 Ill. 392; Capps v. Gorham, 14 Ill. 198; Bryan v. Primm, 1 Ill. 59; Babcock v. Henkle, 117 Ill. A. 640; McCaffrey v. Dustin, 43 Ill. A. 34; Bradley v. Linn, 19 11. A. 322. Compare Naef v. Potter, 226 Ill. 628, 80 NE 1084, 11 LRANS 1034 (as to accommodation paper). Ind.-Merrell v. Springer, 123 Ind. 485, 24 NE 258, 8 LRA 61; Kastner v. Pibilinski, 96 Ind. 229; Gregg v. Union County Nat. Bank, 87 Ind. 238; Scott v. Kokomo First Nat. Bank, 71 Ind. 445; Green v. Louthain, 49 Ind. 139. Iowa. Fidelity L. & T. Co. v. Hogan, 94 Iowa 303, 62 NW 740; Duncan v. Finn, 79 Iowa 658, 44 NW 888; Wood v. McKean, 64 Iowa 16, 19 NW 817; Hedge v. Gibson, 58 Iowa 656, 12 NW 713; Clute v. Frasier, 58 Iowa 268, 12 NW 327; Tuttle v. Bonar, 49 Iowa 696; Schuster v. Marden, 34 Iowa 181; Stannus v. Stannus, 30 Iowa 448; Hayward v. Munger, 14 Iowa 516; Kurz v. Holbrook, 13 Iowa 562; Bates v. Kemp, 12 Iowa 99. Kan.-Eggan v. Briggs, 23 Kan. 710. La.-Thiel v. Butker, 125 La. 473, 51 S 500, 28 LRANS 1065; Sagory v. Metropolitan Bank, 42 La. Ann. 627, 7 S 633; Metropolitan Bank v. Bouny, 42 La. Ann. 439, 7 S 586; Stern v. Germania Nat. Bank, 34 La. Ann. 1119; Henderson v. Case, 31 La. Ann. 215; Halsey v. Lange, 28 La. Ann. 248; Davis v. Bradley, 26 La. Ann. 555; Gribble v. Haynes, 22 La. Ann. 141; Crosby v. Tucker, 21 La. Ann. 512; Butler V. Murison, 18 La. Ann. 363; Marcal v. Melliet, 18 La. Ann. 223; Williams v. Benton, 10 La. Ann. 158; Sawyer V. Hoovey, 5 La. Ann. 153; Ford v. Dosson, 1 Rob. 39; Shipmans v. Archinard, 19 La. 471; Stetson v. Stackhouse, 18 La. 119; Lapice v. Clifton, 17 La. 152; Burroughs v. Nettles, 7 La. 113; Turcas v. Rogers, 3 Mart. N. S. 699; Herriman v. Mulhollan, 1 Mart. N. S. 605. Me.-Woodman v. Boothby, 66 Me. 389; Cummings v. Little, 45 Me. 183; Sprague v. Graham, 29 Me. 160; Wing v. Dunn, 24 Me. 128; Burnham V. Tucker, 18 Me. 179; Hatch v. Dennis, 10 Me. 244; Tucker v. Smith, 4 Me. 415. Md.-Herrick v. Swomley, 56 Md. 439; Clarke v. Dederick, 31 Md. 148. Mass.-Creech v. Byron, 115 Mass. 324; Vinton v. King, 4 Allen 562; Fish v. French, 15 Gray 520; Bond v. Fitzpatrick, 4 Gray 89, 8 Gray 536; Mackay v. Holland, 4 Metc. 69; Howard v. Ames, 3 Metc. 308; American Bank v. Jenness, 2 Metc. 288: Stevens v. Bruce, 21 Pick. 193; Thompson V. to have had an Minn.-St. Paul First Nat. Bank v. Miss.-Money v. Ricketts, 62 Miss. Mo.-Booher v. Allen, 153 Mo. 613, 55 SW 238; Turner v. Hoyle, 95 Mo. 337, 8 SW 157; Julian v. Calkins, 85 Mo. 202; McCoy v. Green, 83 Mo. 626; Ford v. Phillips, 83 Mo. 523; Munday v. Clements, 58 Mo. 577; Kellogg v. Schnaake, 56 Mo. 136; Farris v. Catlett, 32 Mo. 469; Wheeler v. Barret, 20 Mo. 573; Shipp v. Stacker, 8 Mo. 145; Lane v. Hyder, 163 Mo. A. 688, 147 SW 514. Nebr.-Roberson v. Reiter, 38 Nebr. 198, 56 NW 877; Rapid City First Nat Bank v. Security Nat. Bank, 34 Nebr. 71, 51 NW 305, 33 AmSR 618, 15 LRA 386; Edney v. Willis, 23 Nebr. 56, 36 NW 300; Davis v. Neligh, 7 Nebr. 78; Kittle v. De Lamater, 3 Nebr. 325. N. H.-Hardy v. Waddell, 58 N. H. N. J.-Little v. Cooper, 11 N. J. N. M.-Lee v. Field, 9 N. M. 435, 54 N. Y.-Northampton Nat. Bank v. interest in such paper before its Moore v. Stadden, Wright 88. Okl.-Roe v. Fleming, 32 Okl. 259, 122 P 496. Pa.-Marsh v. Marshall, 53 Pa. 396; Bower v. Hastings, 36 Pa. 285: Hill v. Kroft, 29 Pa. 186; Clay v. Cottrell, 18 Pa. 408; Lancaster Bank v. Woodward, 18 Pa. 357, 57 AmD 618; Reakert v. Sanford, 5 Watts & S. 164; McCullough v. Houston, 1 Dall. 441, 1 L. ed. 214. R. I.-Bacon v. Harris, 15 R. L 599, 10 A 647. S. C.-Gibson v. Hutchins, 43 S. C. 287, 21 SE 250; Cain v. Spann, 26 S. C. L. 258; McNeill v. McDonald, 19 S. C. L. 1. S. D.-Ormsby v. Hale, 15 S. D. 206, 88 NW 101. 4. Tenn.-Click v. Gillespie, 4 Hayw. Tex.-Burnett V. Atteberry, 105 Tex. 119, 145 SW 582; Walker v. Wilson, 79 Tex. 185, 14 SW 798, 15 SW 402; Preston v. Breedlove, 36 Tex. 96; Goodson v. Johnson, 35 Tex. 622; Diamond v. Harris, 33 Tex. 634; Conney v. Dandridge, (Civ. A.) 158 SW 178; Branch v. Traylor, (Civ. A.) 36 SW 592; Huddleston v. Kempner, 3 Tex. Civ. A. 252, 22 SW 871; Bennett v. Carsner, 1 Tex. A. Civ. Cas. § 618. Utah.-Lebcher V. Lambert, 23 Utah 1, 63 P 628. Vt.-Miller v. Bingham, 29 Vt. 82; Bowen v. Thrall, 28 Vt. 382; Loomis v. Wainwright, 21 Vt. 520; Sargeant V. Sargeant, 18 Vt. 371; Foot v. Ketchum, 15 Vt. 258, 40 AmD 678; Britton v. Bishop, 11 Vt. 70. Va.-Cussen v. Brandt, 97 Va. 1, 32 SE 791, 75 AmSR 762 and note; Cottrell v. Watkins, 89 Va. 801, 17 SE 328, 37 AmSR 897, 19 LRA 754; Arents v. Com., 18 Gratt. (59 Va.) 750; Davis v. Miller, 14 Gratt. (55 Va.) 1. Wash.-Reardan V. Cockrell, 54 Wash. 400, 103 P 457, 50 LRANS 87; Huntington v. Lombard, 22 Wash. 202, 60 P 414; Gordon v. Decker, 19 Wash. 188, 52 P 856 (holding that the maker of a note, as against an assignee, after maturity, may interpose an equity in his favor against the original payee, although he has reduced the equity to judgment). W. Va.-Smith v. Lawson, 18 W. Va. 212, 41 AmR 688. Wis.-Dunbar v. Harnesberger, 12 Wis. 373. Eng. Rothschild v. Corney. 9 B. & C. 388, 17 ECL 178, 109 Reprint 144; Deuters v. Townsend, 5 B. & S. 613, 117 ECL 613, 122 Reprint 960; Tinson v. Francis, 1 Campb. 19; Crossley v. Ham, 13 East 498, 104 Reprint 464; Cripps v. Davis, 12 M. & W. 159, 152 Reprint 1152; Bounsall v. Harrison, 1 M. & W. 611, 150 Reprint 579; Lee v. Zagury, 8 Taunt. 114, 4 ECL 66, 129 Reprint 326; Brown v. Turner, 7 T. R. 630, 101 Reprint 1169. Can.-Young v. MacNider, 25 Can. S. C. 272; MacArthur v. MacDowall, 23 Can, S. C. 571; Ferguson v. Stewart, 2 CanLJ 116. Ont.-Merchants Bank v. Thompson, 23 Ont. L. 502, 18 OntWR 582; Britton v. Fisher, 26 U. C. Q. B. 338; West v. MacInnes, 23 U. C. Q. B. 357. 26. Que.-Duguay v. Sénécal, 1 LCLJ [a] Illustrations.—(1) Want of consideration is a good defense to an action on a note by one who took it N. C.-Sykes v. Everett, 167 N. C. after maturity. Freittenberg v. Ru600, 83 SE 585; Griffin v. Hasty, 94 bel, 123 Iowa 154, 98 NW 624. (2) N. C. 438; Howell v. McCracken, 87 Where the maker of a note gave his N. C. 399; Capell v. Long, 84 N. C. attorney money to pay it at maturity, 17; Baucom v. Smith, 66 N. C. 537; and the attorney paid it, and with Little v. Dunlap, 44 N. C. 40; Mostel-out authority sold it to another, after ler v. Bost, 42 N. C. 39; Turner v. maturity, and extended the time of Beggarly, 33 N. C. 331; Haywood v. payment for a year, the purchaser McNair, 19 N. C. 283. thereof acquired merely the rights of a transferee, which were no greater than those of the attorney, and, as the attorney had no rights against the maker, the purchaser could assert none. Thiel v. Butker, Oh.-Kernohan v. Durham, 48 Oh. St. 1. 26 NE 982, 12 LRA 41; Osborn v. McClelland, 43 Oh. St. 284, 1 NE 644; Baker v. Kinsey, 41 Oh. St. 403; Peck v. Beckwith, 10 Oh. St. 497; 79 transfer.78 This does not include, however, defenses growing out of distinct transactions," nor equities that may arise after the transfer.80 [§ 577] 4. Nonnegotiable Paper. Nonnegotiable 125 La. 473, 51 S 500, 28 LRANS 1065. [b] The maker and indorser of a note payable to his own order is entitled to make the same defense against a holder who receives it overdue which he could make if it had been payable to and indorsed by a third person. Potter v. Tyler, 2 Metc. (Mass.) 58. [c] Equitable defenses.-A bond of indemnity against loss, executed by a third person to an accommodation maker of the note, is an equitable, and not a legal, defense, and is not properly pleadable or shown in evidence in an action at law on the note under the common-law system, brought by the holder who acquired the paper when it was overdue, from the obligor. Lee v. Field, 9 N. M. 435, 54 P 873. [d] Limitation of rule.-While an assignee of a mortgage note, after maturity, takes it subject to existing equities between the maker and the payee or to any inherent disqualifications, he is not, in the absence of notice, charged with equities subsisting between the maker and an intermediate indorser. Reardan v. Cockrell, 54 Wash. 400, 103 P 457, 50 LRANS 87. 78. Zeis v. Potter, 105 Fed. 671, 44 CCA 665. 79. 291. Gemmell v. Hueben, 71 Mo. A. 80. Conn. Stedman v. Jillson, 10 Conn. 55; Robinson v. Lyman, 10 Conn. 30, 25 AmD 52. Iowa. Whittaker v. Kuhn, 52 Iowa 315, 3 NW 127. Mass.-Baxter v. Little, 6 Metc. 7, 39 AmD 707. Miss.-Black v. McMurtry, Walk. 459. Va.-Davis v. Miller, 14 Gratt. (55 Va.) 1. [a] This is true, although (1) arising under an earlier agreement (Fields v. Stunston, 1 Coldw. (Tenn.) 40), (2) and prior to notice of the transfer (Baxter v. Little, 6 Metc. (Mass.) 7, 39 AmD 707; Davis v. Miller, 14 Gratt. (55 Va.) 1). 81. U. S.-Klots Throwing Co. v. Manufacturers' Commercial Co., 179 Fed. 813, 103 CCA 305, 30 LRANS 40; Bradley v. Trammel, 3 F. Cas. No. 1,788a, Hempst. 164; Lawrence v. U. S., 8 Ct. Cl. 252. Ala.-Smith v. Pettus, 1 Stew. & P. 107. Ark.-Oldham v. Wallace, 4 Ark. 559. Cal.-Union Collection Co. v. Buckman, 150 Cal. 159, 88 P 708, 119 AmSR 164, 9 LRANS 568, 11 AnnCas 609; San José Ranch Co. v. San José Land, etc., Co., 132 Cal. 582. 64 P 1097; Bouche v. Louttit, 104 Cal. 230, 37 P 902; James v. Yaeger, 86 Cal. 184, 24 P 1005; Graves v. Mono Lake Hydraulic Min Co., 81 Cal. 303, 22 P 665; Shakespear v. Smith, 77 Cal. 638, 20 P 294, 11 AmSR 327; McGarvey v. Hall, 23 Cal. 140; Mitchell v. Hackett, 14 Cal. 661; Dollar v. International Banking Corp., 13 Cal. A. 331, 109 P 499. Colo.-Mulligan v. Smith, 13 Colo. A. 231, 57 P 731. Conn.-Beecher v. Buckingham, 18 Conn. 110, 44 AmD 580; Backus v. Danforth, 10 Conn. 297; Lyon v. Summers, 7 Conn. 399. Fla.-Birmingham Trust, etc., Co. v. Jackson County Mill Co., 41 Fla. 498, 27 S 43; Reddish v. Ritchie, 17 Fla. 867. paper is subject to defenses existing against the payee, without regard to how it is transferred,81 unless the maker is estopped to set up his defense,82 or the right to insist on equities has been waived.88 Ga.-Mackin V. Blalock, 133 Ga. P 649; Cotton v. John Deere Plow 550, 66 SE 265, 134 AmSR 220; Shel- Co., 14 Okl. 605, 78 P 321. ley v. Baker, 125 Ga. 663, 54 SE 653; Ryals v. Johnson County Sav. Bank, 106 Ga. 525, 32 SE 645; Hamilton v. Grangers' L., etc., Ins. Co., 65 Ga. 750; Cohen v. Prater, 56 Ga. 203; Barrow v. Blasingame, 1 Ga. A. 358, 57 SE 926. Ida.-Kimpton v. Studebaker Bros. Co., 14 Ida. 552, 94 P 1039, 125 AmSR 185, 14 AnnCas 1126; Union Stock Yards Nat. Bank v. Bolan, 14 Ida. 87, 93 P 508, 125 AmSR 146. Ill-Haskell v. Brown, 65 Ill. 29; Barker v. Barth, 88 Ill. A. 23 [aff 192 Ill. 460, 61 NE 388]. Ind.-Rosenthal v. Rambo, 165 Ind. 584, 76 NE 404, 3 LRANS 678; Mettart v. Allen, 139 Ind. 644, 39 NE 239; Bostwick v. Bryant, 113 Ind. 448, 16 NE 378; Henry v. Gilliland, 103 Ind. 177, 2 NE 360; Lafayette Second Nat. Bank v. Brady, 96 Ind. 498; Hardy v. Brier, 91 Ind. 91; Reagan v. Burton, 67 Ind. 347; Herod v. Snyder, 48 Ind. 480; Summers v. Hutson, 48 Ind. 228; Woodward v. Mathews, 15 Ind. 339; Stoner v. Ellis, 6 Ind. 152; Van Fossen v. Kitchen, 5 Ind. 227; Petersburg First Nat. Bank v. Beach, 34 Ind. A. 80, 72 NE 287; Rosenthal v. Rambo, 28 Ind. A. 265, 62 NE 637; Midland Steel Co. v. Citizens' Nat. Bank, 26 Ind. A. 71, 59 NE 211; Merchants', etc., Sav. Bank v. Fraze, 9 Ind. A. 161, 36 NE 378, 53 AmSR 341. Iowa.-Warren v. Scott, 32 Iowa 22; Franklin v. Twogood, 18 Iowa 515. Kan.-Hutchins v. Stanley, 88 Kan. 739, 129 P 1180; City Nat. Bank v. Gunter, 67 Kan. 227, 72 P 842; South Bend Iron-Works v. Paddock, 37 Kan. 510, 15 P 574; Graham v. Wilson, 6 Kan. 489. Ky. Owsley v. Miller, 149 Ky. 600, 149 SW 935; Powers v. Hambrick, 74 SW 660, 25 KyL 30; Rogge v. Cassidy, 13 SW 716, 12 KyL 54. La.-Gray v. Thomas, 18 La. Ann. 412; Gilmore v. Destrehan, 10 Rob. 521. Md.-Steele v. Sellman, 79 Md. 1, 28 A 811. Mass.-Shoe, etc., Nat. Bank v. Wood, 142 Mass. 563, 8 NE 753 (failure of consideration); Stevens V. Parker, 5 Allen 333; Dyer v. Homer, 22 Pick. 253; Willis v. Twambly, 13 Mass. 204. Mo.-Thomson v. Roatcap, 27 Mo. 283; Smith v. Busby, 15 Mo. 388, 57 AmD 207; Maguire v. Conran, 8 Mo. 107; Maupin v. Smith, 7 Mo. 402; Chandler v. Calvert, 87 Mo. A. 368. Nebr.-Union Pac. R. Co. v. Buffalo County, 9 Nebr. 449, 4 NW 53; Dixon County School Dist. No. 2 v. Stough, 4 Nebr. 357. N. H.-Sanborn v. Little. 3 N. H. 539. N. J.-Smith v. Holzhauer, 67 N. J. L. 202, 50 A 683 (holding that the doctrine that negligence of the maker of negotiable paper in leaving blanks therein may in some cases be a bar to the defense of fraudulent alteration by the filling in of the blanks, when set up by a bona fide holder, has no application in a suit by the assignee of paper which is not negotiable). N. Y.-Allen v. Henry, 16 App. Div. 557, 44 NYS 956; Maule v. Crawford, 14 Hun 193; Chamberlain v. Gorham, 20 Johns. 144. N. C.-Thompson v. Osborne, 152 N. C. 408, 67 SE 1029; Havens v. Potts, 86 N. C. 31; New Windsor First Nat. Bank v. Bynum, 84 N. C. 24, 37 AmR 604. Okl.-Seibold v. Ruble, 41 Okl. 267, 137 P 696; Citizens' Bank v. Garnett, 21 Okl. 200, 95 P 755; Randall Co. v. Glendenning, 19 Okl. 475. 92 P 158; Dickerson v. Higgins, 15 Okl. 588, 82 Pa.-Wetter v. Kiley, 95 Pa. 461, 40 AmR 670; Miller v. Kreiter, 76 Pa. 78; White v. Heylman, 34 Pa. 142; Thompson v. McClelland, 29 Pa. 475; Bircleback v. Wilkins, 22 Pa. 26 (no proof of value paid); Edgar v. Kline, 6 Pa. 327; Howie v. Lewis, 14 Pa. Super. 232; Humboldt Safe-Deposit, etc., Co.'s Est., 3 Pa. Co. 621 (certificate of deposit). Philippine.-Koto Philippine 601. v. Kongko, 17 S. C.-Stevenson v. Bethea, 68 S. C. 246, 47 SE 71 (sealed note); Ellison v. McCullough, 31 S. C. L. 170; Williams v. Hart, 20 S. C. L. 483. S. D.-Searles v. Seipp, 6 S. D. 472, 61 NW 804. Tenn.-Gilley v. Harrell, 118 Tenn. 115, 101 SW 424; Wormley v. Lowry, 1 Humphr. 468. Tex. Sonnenthiel, v. Skinner, 67 Tex. 453, 3 SW 686; Boyd v. Tarrant, 14 Tex. 230; Ellis v. Hahn, 29 Tex. Civ. A. 395, 68 SW 336; Ablowich v. Greenville Nat. Bank, 22 Tex. Civ. A. 272, 54 SW 794 (statute). Vt.-Walker v. Sargeant, 14 Vt. 247; Safford Cotton, etc., Co. v. Hull, Brayt. 231; Wetmore v. Blush, Brayt. 55. Wis.-Woodward v. Smith, 104 Wis. 365, 80 NW 440 (holding that the indorsee of a nonnegotiable instrument takes it subject to the defense of a failure of consideration in nonfulfillment of a contract for which it was the consideration). See Harvey v. Hamilton Bank, 16 Can. S. C. 714. [a] Illustration-An order for the payment of money, a nonnegotiable chose in action, without consideration, as between the drawer and the payee, because of fraudulent representations on which it was given, is taken by its indorsee with the equities charged against it in the hands of the payee, unless the drawer is estopped to set up such equities. San Francisco First Nat. Bank v. Golden, 19 Cal. A. 501, 126 P 498. [b] The defenses are usually confined (1), to those existing against the original debtor (Fairchild v. Brown, 11 Conn. 26; Downey v. Tharp, 63 Pa. 322), (2) and do not as a rule include defenses between intermediate parties (Goldthwaite v. National Bank, 67 Ala. 549), (3) although it is held that defenses which the maker might set up against plaintiff's assignor are generally available against plaintiff (Russell v. Redding, 50 Ala. 448; Hill v. McPherson, 15 Mo. 204, 55 AmD 142; Billings v. Atchison, 15 Mo. 68). Nonnegotiable note as subject to defenses in hands of innocent purchaser before maturity see infra § 1005. 82. Wiggin v. Damrell, 4 N. H. 69 (where a purchaser has taken the note on the strength of the maker's promise to pay it). See also infra § 1007. [a] "We recognize the just rule laid down in Mandeville v. Union Bank, 9 Cranch (U. S.) 9, 3 L. ed. 639, that the bank which becomes the indorsee of and discounts a nonnegotiable note made to a third person, containing the declaration that it is negotiable at the bank which discounts it, takes the instrument discharged of any setoff between the maker and payee." Stadler v. First Nat. Bank, 22 Mont. 190, 205, 56 P 111, 74 AmSR 582. 83. Howie v. Lewis, 14 Pa. Super. 232 (holding that the addition to a judgment note of the words, "this note shall be subject to the same rules governing commercial paper as to equities," while it does not make So equities against nonnegotiable notes in the hands of an assignee, acquired by the promisor against him, while he had them, are available as against a subsequent assignee.84 11 88 86 the rules as to warranties; but the Negotiable Instruments Law enumerates the warranties, where an instrument is negotiated "by delivery or by a qualified indorsement," and then in a succeeding section enumerates those which exist where there is an indorsement without qualification," several of the warranties being common to both classes.91 In regard to the first class, it is also expressly provided that, where a broker or other agent negotiates an instrument without indorsement, he incurs all the statutory liabilities as warrantee, unless he discloses the name of his principal and the fact that he is acting only as agent.92 A maker's indorsement of a note is a mere warranty of his own contract and lends no strength thereto.93 If the instrument is nonnegotiable, the question as to implied warranties is governed, at least for the most part, by the general rules relating to assignments of choses in action.94 Defenses arising after transfer. However, this applies only to defenses arising before notice of the transfer;85 and hence it is necessary, if the transferee desires to protect himself against subsequent dealings between the maker and the transferor, or against equities accruing after the transfer, to give notice of the transfer to the maker.s [578] M. Implied Warranties-1. General Rules.87 One who transfers a bill or a note impliedly warrants certain things and is liable for breach of warranty in a proper case. This liability is wholly independent from any liability as indorser and exists, although the instrument is indorsed "without recourse, except as to the solvency of the parties.89 Some early decisions held that, if the transfer was merely by delivery, without indorsement, there was no implied warranty;90 but such decisions have been either expressly or impliedly overruled. However, whether a particular warranty exists may depend on the mode of transfer, although few of the decisions distinguish between them in stating the note negotiable paper, is a waiv-| transactions. Sedbury v. Duffy, 158 | (holding that the purchaser may er by the maker of the right to in- N. C. 432, 74 SE 355. quire into the adequacy of the consideration, or the fairness of the original transaction, and invests a purchaser for value with a counter equity superior to that residing in the maker of the note). 84. Marshall v. Porter, 71 W. Va. 330, 76 SE 653. [579] 2. When No Warranty. The warranty implied in an indorsement is not absolute, but stands or falls with the indorsement,95 and in any case an implied warranty may be expressly excluded, as by the terms of an express warranty.97 It will not be inferred, however, that a transferee took the [b] The effect of the provision of the Negotiable Instruments Law that every unqualified indorsement warrants a genuineness of the instrument, the title of the indorser, and that all prior parties had capacity to contract is to shut off all such defenses. In re Young, 234 Pa. 85. Ala.-Carroll V. Malone, 28 287, 83 A 201. Ala. 521. Ga.-Guerry v. Perryman, 6 Ga. 119. Ind. Abshire v. Corey, 113 Ind. 484, 15 NE 685; Bostwick v. Bryant, 113 Ind. 448, 16 NE 378; Sharts v. Awalt, 73 Ind. 304; Hoffman v. Zollinger, 39 Ind. 461; Sample v. Lamb, 3 Ind. 180; Wells v. Teall, 5 Blackf. 306. Iowa.-Sayre v. Wheeler, 31 Iowa 112. La.-Kugler v. Taylor, 19 La. Ann. 100. Mass.-Dyer v. Homer, 22 Pick. 253. Miss. Kershaw V. Merchants' Bank, 7 How. 386, 40 AmD 70; Northern Bank v. Kyle, 7 How. 360. Pa.-White v. Heylman, 34 Pa. 142. [a] Illustration.-A purchaser of a nonnegotiable note is unaffected by an agreement, made without his knowledge or consent, changing the original contract under which note was given, after notice of the assignment to the maker. Rosenthal v. Rambo, 28 Ind. A. 265, 62 NE 637. the 86. Cox v. Westfield Bank, 18 Ind. A. 248, 47 NE 841. See generally Assignments § 95. 87. When limitations begin to run against action on implied warranty see Limitations of Actions [25 Cyc 1101]. 88. Watson v. Chesire, 18 Iowa 202, 87 AmD 382 and note (where the question was discussed at length by Judge Dillon). See also supra § 550. 89. See infra § 586. 90. Baxter v. Duren, 29 Me. 434, 50 AmD 602; Fisher v. Rieman, 12 Md. 497; Ellis v. Wild, 6 Mass. 321. Jensen. v. Wilslef, 36 Nev. 37, 132 P 16, AnnCas1914D 1220; Hamilton v. Diefenderfer, 21 Wyo. 266, 131 P 37, 38, 133 P 1081. 91. 96 agree to "take his chances"). See also Moore v. Worthington, 2 Duv. (Ky.) 307, 308 (where the court said: "If it be asserted that, on the face of the note, it appears to be payable to a disbursing officer, and, therefore, not obligatory on the government until indorsed by him, it may be replied that this was as patent to Moore as to Worthington, and as [c] An action for the cancellation both must be presumed to know the of a note, based on the fact that the law, that this rebuts the presumpcashier's checks received for it were tion or implied warranty that Worthworthless, is not based on a breachington was to refund the consideraof warranty in the negotiation of the tion unless it was a legal obligation checks, so as to bring it within Acts on the government"). 29th Gen. Assembly p 87 c 130 § 65, fixing the warranties on the negotiation of an instrument. Dille v. White, 132 Iowa 327, 109 NW 909, 10 LRANS 510. [d] General statutes.-A seller's warranty, under Rev. Codes (1905) § 5428, providing that one who sells an instrument purporting to bind another warrants the instrument to be what it purports to be, and that he has no knowledge of facts which tend to prove it worthless, is not the warranty of an indorser, but the warranty of a vendor, and is a warranty that is personal to the vendee and does not run with the paper. McAdam v. Grand Forks Mercantile Co., 24 N. D. 645, 140 NW 725, 47 LRANS 246. This "The contract of sale or transfer, to say nothing of payment, may be made in such form, or under such circumstances, as to exclude the warranty of genuineness, which would be otherwise implied by law. has been held by repeated decisions. Ross v. Terry, 63 N. Y. 613; Bell v. Dagg, 60 N. Y. 528." Strauss v. Hensey, 7 App. (D. C.) 289, 293, 36 LRA 92 and note. [a] The implication may be negatived by the express provisions of the instrument, as for payment in particular notes which proved to be worthless. Dakin v. Anderson, 18 Ind. 52. [b] An implied warranty is subject to the statute of limitation running from the date of the indorsement. Blethen v. Lovering, 58 Me. 437. [e] The indorsement by a corporation, ultra vires of a promissory note, nevertheless passes the prop- 97. Bell v. Dagg, 60 N. Y. 528 [rev erty therein, and the want of power 2 Thomps. & C. 623]; Baldwin v. Van of the corporation to indorse is no Deusen, 37 N. Y. 487 (holding that defense to a subsequent indorser who, a warranty that a note sold is the by his indorsement, warrants the gen- genuine note of a person named, "and uineness of the paper, his own prop-not further or otherwise," is not erty therein, and the capacity of all the preceding parties to contract. Willard v. Crook, 21 App. (D. C.) 237. 92. See statutory provisions. 93. Sabine v. Paine, 166 App. Div. See Assignments §§ 155-160. [a] The warranties referred to in Negotiable Instruments Law do not refer to the usurious discount of the check). notes, but refer only to lawful 96. Beal v. Roberts, 13 Mass. 525 broken by the fact that such person was an infant and negatives any further warranty in respect to it). [a] Construction of express warranty.-New York Produce Exch. Bank v. Twelfth Ward Bank, 135 App. Div. 52, 119 NYS 988. [b] A verbal agreement for a warranty is not waived by subsequent acceptance of the note without a written warranty. Cardell v. McNiel, 21 N. Y. 336. [c] Liability for breach.-Where a holder of a note which in its body stated that it was for seventy-five dollars, while the figures in the margin were seven thousand five hundred dollars, represented that the note was for seven thousand five hundred |