such depositor shall notify the bank that the check so paid was forged or raised.

Origin of the section. This section was added by Laws of New York, 1904, ch. 287. It does not seem to be germane to the Negotiable Instruments Law, and would more properly have been enacted as an amendment to the Banking Law. Similar statutes, but varying in their terms, have been enacted in Wisconsin, California, South Dakota, Michigan, Washington, Oregon, New Jersey, Iowa, Montana, North Carolina, North Dakota, Wyoming, Idaho, Kansas, Maine, Minnesota, Ohio, Oregon, Louisiana, Massachusetts and Rhode Island, but not as amendments to the Negotiable Instruments Law.

Pleading section as defense.-This section establishes a general rule of substantive law, and is available as a defense though not specially pleaded. Shattuck v. Guardian Trust Co., 204 N. Y. 200.

ARTICLE XVIII.*

NOTES GIVEN FOR PATENT RIGHTS AND FOR A SPECULATIVE CONSIDERATION.

Section 330. Negotiable instruments given for patent

rights.

331. Negotiable instruments given for a specu

lative consideration.

332. How negotiable bonds are made non-negoti

able.

§ 330. Negotiable instruments given for patent rights. -A promissory note or other negotiable instrument, the consideration of which consists wholly or partly of the right to make, use or sell any invention claimed or represented by the vendor at the time of sale to be patented, must contain the words "given for a patent right" prominently and legibly written or printed on the face of such note or instrument above the signature thereto; and such note or instrument in the hands of any purchaser or holder is subject to the same defenses as in the hands of the original holder; but this section does not apply to a negotiable instrument given solely for the purchase price or the use of a patented article.

Source of the section. This section is taken without change from Laws N. Y. 1877, ch. 65, section 1. Similar statutes exist in other States. See Laws of Pa. 1872, 60.

Constitutionality of section.-This section is not in contravention of the Constitution of the United States and the Acts of Congress which secure to a patentee for a limited time "the full and exclusive right and liberty of making, using and vending to others to be used" his invention or discovery. Herdie v. Roessler, 109

This article appears only in the New York and Ohio acts.

N. Y. 127; Tod v. Wick, 36 Ohio St. 370; Haskell v. Jones, 86 Pa. St. 173; Shires v. Commonwealth, 120 Pa. St. 368; Breckhill v. Randall, 102 Ind. 528; New v. Walker, 108 Ind. 365.

Where statement not omitted.-If the note does not contain the statement required by this section it is unenforcible between the parties; but, if negotiable paper, it is valid in the hands of a holder in due course. New v. Walker, 108 Ind. 365; Kniss v. Holbrook, 16 Ind. App. 229; Harmon v. Hagerty, 88 Tenn. 705. If the holder had knowledge of the facts the paper is void in his hands, though he paid value for it, and acquired it before maturity. Benton v. Sakyto, 84 Neb. 808.

§ 331. Negotiable instrument for a speculative consideration. If the consideration of a promissory note or other negotiable instrument consists in whole or in part of the purchase price of any farm product, at a price greater by at least four times than the fair market value of the same product at the time, in the locality, or of the membership and rights in an association, company or combination to produce or sell any farm product at a fictitious rate, or of a contract or bond to purchase or sell any farm product at a price greater by four times than the market value of the same product at the time in the locality, the words, "given for a speculative consideration," or other words clearly showing the nature of the consideration, must be prominently and legibly written or printed on the face of such note or instrument above the signature thereof; and such note or instrument, in the hands of any purchaser or holder, is subject to the same defenses as in the hands of the original owner or holder.

Source of section. This section was taken without change from Laws N. Y. 1874, ch. 262, section 1.

Other statutes requiring statement of condemnation.-It has become quite the custom for the States to pass laws requiring notes given in various transactions to disclose the nature of the con

sideration, and one State legislature has gone so far as to require that this part of the contract shall be written in red ink. In construing one of these stautes, the Supreme Court of Wisconsin has said: "The sales of lightning rods, patent rights, and stallions, were evidently considered by the Legislature as transactions, presenting quite similar opportunities and inducements for overreaching by fraudulent methods, and so it was determined that they might well be controlled by the same restrictive provisions; but there is absolutely no indication either in the law itself or in the nature of things that the restriction upon the free sale of stallions or lightning rods was considered in any way dependent upon or compensated by the restriction upon the sale of patent rights. It is not claimed that such a restriction upon the freedom of sales of stallions is unreasonable or unwarranted. The records of this. court in recent years seem to show that such transactions present peculiarly seductive opportunities for misrepresentation and fraud even surpassing those presented by the traditional horse trade." Quiggle v. Herman, 131 Wis. 379. For other cases construing similar statutes, see note to section 57.

-

§ 332. How negotiable bonds are made non-negotiable. The owner or holder of any corporate or municipal bond or obligation (except such as are designated to circulate as money, payable to bearer), heretofore or hereafter issued in and payable in this State, but not registered in pursuance of any State law, may make such bond or obligation, or the interest coupon accompanying the same, non-negotiable, by subscribing his name to a statement indorsed thereon that such bond, obligation or coupon is his property; and thereon the principal sum therein mentioned is payable only to such owner or holder, or his legal representatives or assigns, unless such bond, obligation or coupon be transferred by indorsement in blank, or payable to bearer, or to order, with the addition of the assignor's place of residence.

Source of section. This section was taken without change from Laws N. Y. 1871, ch. 81; Laws N. Y. 1873, ch. 595.

ARTICLE XIX.*

LAWS REPEALED; WHEN TO TAKE EFFECT.

Section 340. Laws repealed.

341. When to take effect.

§ 340. Laws repealed. Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed.

Variant readings.—In most of the states this section reads: "All acts and parts of acts inconsistent with this act are hereby repealed." In some of the states the section is omitted.

§ 341. When to take effect. This chapter shall take effect on the first day of October, eighteen hundred and ninety-seven.

Variant readings.-The date mentioned in the section varies, of course, in the different states. In some states the section is omitted. In Arkansas the section reads: "This Act shall not affect any instrument or written contract now in existence, or coming into existence before it takes effect."

The sections in this article are printed as they appear in the New York Statute.