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Art. 3

Form and Interpretation.

88 37-42

§ 37. Liability of person signing in trade or assumed name. 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.

Formerly L. 1897, ch. 612, § 37. § 38. Signature by agent; authority; how shown. The signature of any party may be made by a duly authorized agent. 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.

Formerly L. 1897, ch. 612, § 38. § 39. Liability of person signing as agent. 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.

Formerly L. 1897, ch. 612, § 39. § 40. Signature by procuration; effect of. nature by “procuration " operates as notice that the agent hos 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.

Formerly L. 1897, ch. 612, $ 40. 8 41. Effect of indorsement by infant or corporation. The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity the corporation or infant may incur no liability thercon.

Formerly L. 1897, ch. 612, 8 41. § 42. Forged signature; effect of. Where a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or 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.

Formerly L. 1897, ch. 612, 42.

A sig

88 50-55

Consideration.

Art. 4

ARTICLE 4

Consideration
Section 50. Presumption of consideration.

51. What constitutes consideration.
52. What constitutes holder for value.
53. When lien on instrument constitutes holder for value.
54. Effect of want of consideration.

55. Liability of accommodation party. § 50. Presumption of consideration. 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.

Formerly L. 1897, ch. 612, $ 50. § 51. What constitutes consideration. Value is any consideration sufficient to support a simple contract. cedent or pre-existing debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time.

Formerly L. 1897, ch. 612, $ 51. 8 52. What constitutes holder for value. 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.

Formerly L. 1897, ch. 612, $ 52. § 53. When lien on instrument constitutes holder for value. 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.

Formerly L. 1897, ch. 612, $ 53, as am'd by L. 1898, ch. 336, § 5. $ 54. Effect of want of consideration. 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.

Formerly L. 1897, ch. 612, $ 54. 8 55. Liability of accommodation party. 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,

Art. 5

Negotiation.

88 60, 61

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

Formerly L. 1897, ch. 612, § 55, as am'd by L. 1898, ch. 336, $ 23.

ARTICLE 5

Negotiation
Section 60. What constitutes negotiation.

61. Indorsement; how made.
62. Indorsement must be of entire instrument.
63. Kinds of indorsement.
64. Special indorsement; indorsement in blank.
65. Blank indorsement; how changed to special indorse-

ment.
66. When indorsement restrictive.
67. Effect of restrictive indorsement; rights of indorsee.
68. Qualified indorsement.
69. Conditional indorsement.
70. Indorsement of instrument payable to bearer.
71. Indorsement where payable to two or more persons.
72. Effect of instrument drawn or indorsed to a person

as cashier.
73. Indorsement where name is wrongly designated or

misspelled.
74. Indorsement in representative capacity.
75. Time of indorsement; presumption.
76. Place of indorsement; presumption.
77. Continuation of negotiable character.
78. Striking out indorsement.
79. Transfer without indorsement; effect of.

80. When prior party may negotiate instrument. $ 60. What constitutes negotiation. 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.

Formerly L. 1897, ch. 612, § 60. 8 61. Indorsement; how made. 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.

Formerly L. 1897, ch. 612, § 61.

$$ 62-67

Negotiation.

Art. 5

§ 62. Indorsement must be of entire instrument. 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.

Formerly L. 1897, ch. 612, $ 62. 8 63. Kinds of indorsement. An indorsement may be either special or in blank; and it may also be either restrictive or qualified, or conditional.

Formerly L. 1897, ch. 612, $ 63. § 64. Special indorsement; indorsement in blank. 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.

Formerly L. 1897, ch. 612, $ 64. § 65. Blank indorsement; how changed to special indorsement. 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.

Formerly L. 1897, ch. 612, § 65. 8 66. When indorsement restrictive. An indorsement is restrictive, which either:

1. Prohibits the further negotiation of the instrument; or 2. Constitutes the indorsee the agent of the indorser; or

3. Vests the title in the indorsee in trust for or to the use of some other person.

But the mere absence of words implying power to negotiate does not make an indorsement restrictive.

Formerly L. 1897, ch. 612, § 66. § 67. Effect of restrictive indorsement; rights of indorsee. A restrictive indorsement confers upon the indorsee the right:

1. To receive payment of the instrument; 2. To bring any tien thrreon that the indorser could bring;

3. To transfer his rights as such dorsee, where the form of the indorsement authorizes him to do so.

Art. 5

Negotiation.

$$ 68-73

But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement.

Formerly L. 1897, ch. 612, $ 67, as am'd by L. 1898, ch. 336, $ 7. § 68. Qualified indorsement. A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words “ without recourse” or any words of similar import. Such an indorsement does not impair the negotiable character of the instrument.

Formerly L. 1897, ch. 612, $ 68, as am'd by L. 1898, ch. 336, § 8. 3 69. Conditional indorsement. Where 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.

Formerly L. 1897, ch. 612, $ 69. $ 70. 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.

Formerly L. 1897, ch. 612, § 70. 8 71. 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.

Formerly L. 1897, ch. 612, 8 71. $72. Effect of instrument drawn or indorsed to a person as cashier. Where an instrument is drawn or indorsed to a person as

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.

Formerly L. 1897, ch. 612, 8 72. $ 73. Indorsement where name is wrongly designated or misspelled. Where the name of a payee or indorsee is wrongly designated or misspelled, he may indorse the

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