The place of indorsement is important in fixing the rights of the parties. The indorsement is a new contract and the rights and liabilities of the indorser are fixed by the law of the place where the indorsement is made and completed. Piner v. Clary, 17 B. Mon. 645; Short & Co. v. Trabue & Co., 4 Met. 299; Carlisle v. Chambers, 4 Bush 268; Hyatt v. Bank of Kentucky, 8 Bush 193; Wettlaufer v. Baxter, 137 Ky. 362, 125 S. W. 741.

But the contract of indorsement is not completed until delivery. The law of the place of delivery governs even though the physical act of writing be done elsewhere. Goddin v. Shipley, 7 B. Mon. 575; Young v. Harris, 14 B. Mon. 447; Hyatt v. Bank of Kentucky supra.

But while the indorser may not be liable by reason of the law of the place where the indorsement is made, yet his indorsement does not change the character of the paper nor affect its legality as between the other parties, and is effective to transfer the title. Carlisle v. Chambers supra and Hyatt v. Bank of Kentucky supra. The holder of a note valid in the state where it was made, but which would be void in Kentucky, can enforce its collection in this State against the maker even through an assignment made in this State. Arnett v. Pinson, 108 S. W. 852, 33 K. L. R. 36.

§ 47. Negotiability-When Ended.-"An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed (Secs. 36, 37) or discharged by payment or otherwise (Secs. 119-125 inclusive)."

§ 48. Striking Out Indorsement.-"The owner may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument."

See Bell v. Morehead, 3 A. K. Mar. 158; Tuggle v. Adams, 3 A. K. Mar. 429; Long, etc., v. Bank of Cynthiana, 1 Litt. 290; Clark v. Schwing, 1 Dana 333; Hawkins, etc., v. Armstrong, 6 Dana 128; Bank of Tennessee v. Smith, 9 B. Mon. 609. But may not the holder sue in his own name without striking out subsequent indorsements? See Section 51.

§ 49. Transfer Without IndorsementEffect. "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 transferrer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferrer (Sec. 65). But for the

purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made."

See Gray Tie & Lumber Co. v. Farmers' Bank, 109 Ky. 694, 60 S. W. 537, 22 K. L. R. 1333. In the case of Callahan v. Louisville Dry Goods Co., 140 Ky. 712, 131 S. W. 995, the petition of appellee, alleging that it was the successor of payee corporation and was the owner and holder of the note, was held good on demurrer, though the note had not been indorsed to it. But the Court was in error in the dictum that appellee was a holder in due course. See Section 52 and case of Foster's Admr. v. Metcalf, 144 Ky. 385, 138 S. W. 314.

§ 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 (Secs. 47,48); but he is not entitled to enforce payment thereof against any intervening party to whom he was personally liable."

See note to Section 119.

ARTICLE IV.

RIGHTS OF HOLDER.

Section 51. Right of holder to sue and receive

52.

53.

54.

payments.

Holder in due course; definition.

On demand; negotiation; time.

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 defenses.

59. Holder deemed a holder in due

course.

§ 51. Right of Holder to Sue and Receive Payments.-"The holder of a negotiable instrument may sue thereon in his own name, and payment to him in due course (Sec. 88) discharges the instrument."

Cited in Choteau Trust & Banking Co. v. Smith, 133 Ky. 418, 118 S. W. 279; Callahan v. Louisville Dry Goods Co., 140 Ky. 712, 131 S. W. 995.

See notes to Sections 48 and 49.

§ 52. Holder in Due Course-Definition. "A holder in due course is a holder who has

taken the instrument under the following conditions:

(1) "That the instrument is complete and regular upon its face.

(2) "That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact.

(3) "That he took it in good faith and for value (Secs. 24, 25, 26).

(4) "That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it (Secs. 54, 56).”

Cases Decided Prior to Passage of Negotiable Instruments Act.

Complete and regular: Woolfolk v. Bank of America, 10 Bush 504.

Holder before maturity: Theobold v. Hare, 8 B. Mon. 39; Greenwell v. Haydon, 78 Ky. 332; Lester & Co. v. Given, 8 Bush 357; Woolfolk v. Bank of America supra; Clark v. Tanner, 100 Ky. 275, 38 S. W. 11, 19 K. L. R. 590.

Value: See note to Section 25.

Notice and good faith: See note to Section 56.

Cases involving Negotiable Instruments Act.