§ 32. When date may be inserted. Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be payable accordingly.25 The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date.1 [NOTE. See Bills of Exchange Act, section 12. See note, section 7.] § 33. Blanks; when may be filled. Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. In order, however, that any such instrument, when completed, may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time.* [NOTE. See Bills of Exchange, section 20.] See § 206. § 34. Incomplete instrument not delivered. Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery. [NOTE.See Davis Machine Co. v. Best, 105 N. Y. 59, 67; Sedgwick v. McKim, 53 N. Y. 307, 313; Baxendale v. Bennett, L. R. 3 Q. B. 525; Daniel, §§ 841, 842a.] § 35 Delivery; when effectual; when presumed. Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party 25 See § 33. 1 Pages 163-168. Pages 163-168. 3 Pages 168-174. 4 Pages 174-192. making, drawing, accepting or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument." But where the instrument is in the hands of a holder in due course, a valid delivery 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. [NOTE. See Bills of Exchange Act, section 21.1 § 36. Construction where instrument is ambiguous. Where the language of the instrument is ambiguous, or there are omissions therein, the following rules of construction apply: 1. Where the sum payable is expressed in words and also in figures and there is a discrepancy between the two, the sum denoted by the words is the sum payable; but if the words are ambiguous or uncertain, references may be had to the figures to fix the amount; 7 2. Where the instrument provides for the payment of interest, without specifying the date from which interest is to run, the interest runs from the date of the instrument, and if the instrument is undated, from the issue thereof; 3. Where the instrument is not dated, it will be considered to be dated as of the time it was issued; ° 9 4. Where there is a conflict between the written and printed provisions of the instrument, the written provisions prevail; 10 5. Where the instrument is so ambiguous that there is doubt whether it is a bill or note, the holder may treat it as either at his election; 11 6. 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; 12 7. Where an instrument containing the words "I promise to pay is signed by two or more persons, they are deemed to be jointly and severally liable thereon.13 [NOTE. See Bills of Exchange Act, section 9.] § 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 5 Pages 151-152. Pages 152-158. See § 34. 7 Pages 192-194. Pages 194-195. 9 Page 195. §§ 25, 30-32. 10 Pages 195-196. 11 Page 196. 12 See §§ 113, 114. 13 Pages 196-197. [See Bills of Exchange Act, section 85.] 14 Pages 197-199. See § 72. 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. § 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. § 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; 15 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.10 [NOTE. See Bills of Exchange Act, section 26; Byles on Bills, 36; Daniel, §§ 298-302.] § 40. Signature by procuration; effect of. 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.17 [NOTE. See Bills of Exchange Act, section 25; Byles on Bills, 33; Daniel, § 280.] § 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 thereon.18 § 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.20 19 See Bills of Exchange Act, section 24.] ARTICLE IV. 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. 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.21 [NOTE. See Bills of Exchange Act, section 30.] § 51. What constitutes consideration. Value 22 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.23 § 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.24 [NOTE. See Bills of Exchange Act, section 27, subdivision (2)]. § 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.25 [NOTE. See Bills of Exchange Act, section 27.] § 54. Effect of want of consideration. 1 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.2 § 55. Liability of accommodation party. 3 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, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.* [NOTE. - See Bills of Exchange Act, section 28.] ARTICLE V. 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 indorsement. 67. Effect of restrictive indorsement; rights of indorsee. 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. 75. Time of indorsement; presumption. 25 Pages 252-253. Discount must be distinguished from pledge or deposit for security. A discounter or purchaser of the bill is a holder for full value. A pledgee is a trustee of the pledgor. If the pledgor could have sued on the instrument the pledgee may recover the whole amount, accounting to the pledgor for any surplus above the amount of the lien; otherwise he can recover only the Chalmers, p. 86. 2 Pages 253-254. An immediate party stands in the same relation as one who is not a holder in due course. See Chalmers, p. 95. 3 Pages 257-258. |