Variant readings.-In Alabama the word "holder" and "said holder" are substituted for transferrer. But the use of "holder" in this connection is confusing; for by section 191 "holder" is defined to mean the payee or indorsee who is in possession of the instrument, and where the transfer is without indorsement neither the transferrer nor the transferee answers to this description Nor is the matter helped by the use of the archaic form "said." In Colorado the words "if omitted by mistake, accident or fraud" are added at the end of the first sentence. In Illinois and Missouri, the words "to have the indorsement of the transferrer" are struck out, and the following substituted therefor: "to enforce the instrument against one who signed for the accommodation of the transferer, and the right to have the indorsement of the transferer if omitted by accident or mistake." If this is to be taken literally. the right of the transferee to enforce the instrument against a prior party is limited to cases where such prior party has signed for the accommodation of the transferer. The reason for the change does not seem to be very clear. In Wisconsin the following is added at the end of the section: "When the indorsement was omitted by mistake, or there was an agreement to endorse made at the time of the transfer, the endorsement when made relates back to the time of transfer."

Effect of transfer without indorsement.-Under this section a negotiable instrument, payable to the order of a person named, may be effectually transferred by mere delivery, and the assignee takes the legal title, and may sue in his own name; but he takes subject to the defenses in favor of prior parties. Martz v. State Nat. Bank, 147 App. Div. (N. Y.) 250; Meuer v. Phoenix Nat. Bank, 42 Misc. (N. Y.) 341; Bank of Bromfield v. McKinley, 53 Colo. 279; Callahan v. Louisville Dry Goods Co., 140 Ky. 712; Forter's Admr. v. Metcalf, 144 Ky. 385; First Nat. Bank v. Stam, 186 Mo. App. 439; Sublette v. Brewington, 139 Mo. App. 410; Carter v. Butler, 264 Mo. 306; Keifer v. Talbert, 128 Minn. 519; Steinhilper v. Basnight, 153 N. C. 293; First Nat. Bank of Pomeroy v. McCullough, 50 Oregon 508; Landis v. White, 127 Tenn. 504; Ireland v. Scharpenberg, 54 Wash. 558; Smith v. Nelson, 212 Fed. Rep. 56. But under the statute, as well as under the law merchant, the indorsement is required to constitute the transferee a holder in due course. Mayers v. McRimmon, 140 N. C. 640, 642643. Thus, the purchaser of a certified check, payable to order,

who obtains title without the indorsement of the payee, holds it subject to all equities between the original parties, although he paid full consideration, without notice. Goshen National Bank v. Bingham, 118 N. Y. 349; Jenkinson v. Wilkinson, 110 N. C. 532. And an intention on the part of the payee and transferee to have the paper indorsed is not sufficient, at least in the absence of an express agreement to indorse. It is the act of indorsement, not the intention, which negotiates the instrument. Goshen National Bank v. Bingham, supra. Where a check, drawn to the order and in the hands of a bona fide holder for value, has at his request been certified by a bank, and is a valid obligation against the maker, and there are no equities between him and the bank, the holder can recover of the bank upon the check, although the maker had not indorsed it to him. Meuer v. Phoenix National Bank, 42 Misc. (N. Y.) 341.

Paper sold under execution.-Where a note has been attached and sold under execution, the purchaser may sue thereon without regard to whether the sheriff's indorsement to him was regular or irregular. Fishburn v. Lauderslausen, 50 Ore. 364.

Presumption of ownership.-In Callahan v. Louisville Dry Goods Co., 140 Ky. 714, it was said that, under the statute, no indorsement is necessary to invest the holder with the presumption of ownership, but possession alone presupposes ownership in due course. See also Roy v. Duff, 152 N. W. Rep. (Iowa) 606. But this appears to be a misapprehension of the effect of the section. The rule that possession is prima facie proof of ownership applies. only where the paper is drawn payable to bearer, or has become so payable because indorsed in blank; but where it is payable to order, proof of the indorsement of the payee, or of the indorsee to whom it has been indorsed specially, has always been required (Hathaway v. County of Delaware, 185 N. Y. 368); and certainly there is nothing in section 49 to change this rule of evidence. If the holder claims title under this section, then, instead of proving the indorsement of the payee as a part of his case, as he would ordinarily do, he should prove the special circumstances which bring the case within the section.

Relation back.-An indorsement after notice of a defense does not relate back to the transfer, so as to cut off intervening rights and remedies. Meuer v. Phenix Nat. Bank, 42 Misc. (N. Y.)

341. But it has been held that the holder is protected against everything subsequent to delivery, the indorsement being deemed to relate back to the time of delivery as to any equity outside of the note itself. Beard v. Dedolph, 29 Wis. 136.

§ 50. When prior party may negotiate instrument. -Where an instrument is negotiated back to a prior party, such party may, subject to the provisions of this act, reissue and further negotiate the same. But he is not entitled to enforce payment thereof against any intervening party to whom he was personally liable.

ARTICLE V.

RIGHTS OF HOLDER.

Section 51. Right of holder to sue-payment.
52. What constitutes a holder in due course.
53. Instrument payable on demand-negotia-
tiation of-unreasonable time.

54. Notice before full amount paid.
55. When title defective.

56. What constitutes notice of defect.
57. Rights of holder in due course.
58. When subject to original defenses.
59. Presumption-Burden of proof.

§ 51. Right of holder to sue-Payment.-The holder of a negotiable instrument may sue thereon in his own name; and payment to him in due course discharges the instrument.

Pleading. A complaint in an action upon a promissory note which in substance alleges that on or about a certain date the defendant made his promissory note, whereby he promised to pay to the order of the plaintiff a certain sum of money, on a certain date, with interest, but that no part thereof has been paid, states a cause of action. First National Bank v. Stallo, 160 App. Div. (N. Y.) 702.

Evidence of title.-Where the plaintiff is the payee, the production of the paper is sufficient. Tullis v. McClary, 128 Iowa, 493; Williams v. Holt, 170 Mass. 351. And where the instrument is payable to bearer, or, if payable to order, is indorsed in blank, possession is sufficient evidence of title on which to maintain the action. Newcombe v. Fox, 1 App. Div. 389; Weber v. Orton, 91 Mo. 680. The court will never inquire whether he sues for himself or as trustee for another, nor into the right of possession, unless on an allegation of mala fides. Ellicott v. Martin, 6 Md. 509.

And the prima facie case made in favor of the plaintiff by his possession of the instrument can not, in the absence of mala fides, be rebutted by evidence that the title was in some other party. (Id.) See also Lowell v. Bickford, 201 Mass. 543. As a general rule, possession by the attorney for a party is possession by the party himself. Kunkel v. Spooner, 9 Md. 462. But, of course, the indorsement must be proved; for the mere possession by another than the payee, of an unindorsed negotiable note or bill not payable to bearer, is not prima facie evidence of ownership. Hathaway v. County of Delaware, 185 N. Y. 374; Shepard v. Hanson, 9 N. D. 249; Tyson v. Jayner, 139 N. C. 69. But see Callahan v. Louisville Dry Goods Company, 140 Ky. 712. In the case last cited the court said: "Reading these four sections together, it is evident that the holder of a note is deemed to be the holder in due course, that is, to have come lawfully into possession of it, and he may maintain an action on it in his own name. No indorsement is necessary to invest the holder with the presumption of ownership, but possession alone presupposes ownership in due course, and this presumption is indulged until overcome by proof supported by proper plea." See also Roy v. Duff, 152 N. W. Rep. (Iowa) 606. But see note to section 49.

Payments. The instrument can be satisfied only by payment to the owner at the time or to such owner's authorized agent. If the recipient of the money is not actually authorized the payment is ineffectual, unless induced by unambiguous direction from the owner or justified by actual possession of the note. Marling v. Mommensen, 127 Wis. 363. The maker of a note, in order to avail himself of the defense of payment before maturity, must show that the indorsee had prior notice of the payment. Yenney v. Central City Bank, 44 Neb. 402. But where the instrument is indorsed "for collection," the payment to the indorser after the transfer is a good defense, even against a claim of prior beneficial ownership by the indorsee. Smith v. Bayer, 46 Ore. 143.

§ 52. What constitutes a holder in due course.-A holder in due course is a holder who has taken the instrument under the following conditions:

1. That it is complete and regular upon its face; 2. That he became the holder of it before it was