But nothing in this section shall validate any provision or stipulation otherwise illegal. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1533. In effect July 31, 1917. § 3087. OMISSIONS; SEAL; PARTICULAR MONEY. The validity and negotiable character of an instrument are not affected by the fact that 1. It is not dated; or 2. Does not specify the value given, or that any value has been given therefor; or 3. Does not specify the place where it is drawn or the place where it is payable; or Bears a seal; or 4. 5. Designates a particular kind of current money in which payment is to be made. But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument. History: p. 1534. Enactment approved June 1, 1917, Stats, and Amdts. 1917, § 3088. WHEN PAYABLE ON DEMAND. An instrument is payable on demand 1. Where it is expressed to be payable on demand, or at sight, or on presentation; or 2. In which no time for payment is expressed. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand. 1. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1534. In effect July 31, 1917. Negotiability of several instruments.— There is no essential difference. between a bond which on its face is payable to bearer and a promissory note as to the question of negotiability, and when a bond is dependent upon a mortgage it is subject to all equitable defenses against a holder with notice.-Kohn v. Sacramento Elec., G. & R. Co., 168 Cal. 1, 141 Pac. 626. 2. Where a note is secured by a contemporary mortgage on land, both instruments having been executed as a part of one transaction, the note, whether negotiable in form or not, is non-negotiable in fact if taken with notice of the existence of the mortgage.-Metropolis Trust & Sav. Bank v. Monnier, 169 Cal. 592, 147 Pac. 265. § 3089. WHEN PAYABLE TO ORDER. The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It may be drawn payable to the order of 1. A payee who is not maker, drawer, or drawee; or 2. The drawer or maker; or 3. The drawee; or 5. One or some of several payees; or 6. The holder of an office for the time being. Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable certainty. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1534. In effect July 31, 1917. § 3090. WHEN PAYABLE TO BEARER. The instrument is payable to bearer 1. When it is expressed to be so payable; or 2. When it is payable to a person named therein or bearer; or 3. When it is payable to the order of a fictitious or nonexisting person, and such fact was known to the person making it so payable; or 4. When the name of the payee does not purport to be the name of any person; or 5. When the only or last indorsement is an indorsement in blank. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1534. In effect July 31, 1917. § 3091. TERMS WHEN SUFFICIENT. The instrument need not follow the language of this act, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof. History: Enactment approved June 1, 1917, Stats, and Amdts. 1917, p. 1534. In effect July 31, 1917. §3092. DATE, PRESUMPTION AS TO. Where the instrument or an acceptance of any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance, or indorsement as the case may be. § 3093. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1534. In effect July 31, 1917. ANTEDATED AND POSTDATED. The instrument is not invalid for the reason only that it is antedated or postdated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. 1. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1535. In effect July 31, 1917. What destroys negotiability. — Where the negotiable instrument does contain other contract than that permitted in this article the court can not treat the bonds as negotiable despite the existence of a custom to so regard similar bonds. That the officer of the corporation issuing the bonds be lieved them negotiable does not alter their terms.-Kohn v. Sacramento Electric, Gas & R. Co., 168 Cal. 1, 141 Pac. 626. 2. A note which is an inseparable part of a contract which requires certain acts of the payee is not negotiable.-Harrison v. Turner, 27 Cal. App. 423, 150 Pac. 395. Where an instrument ex § 3094. WHEN DATE MAY BE INSERTED. pressed 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 or [of] issue or acceptance, and the instrument shall be payable accordingly. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1535. In effect July 31, 1917. § 3095. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1535. In effect July 31, 1917. Where an § 3096. INCOMPLETE INSTRUMENT NOT DELIVERED. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1535. In effect July 31, 1917. § 3097. 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 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1535. In effect July 31, 1917. § 3098. 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, reference may be had to the figures to fix the amount; 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; 4. Where there is a conflict between the written and printed provisions of the instrument, the written provisions prevail; 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; 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; 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1536. In effect July 31, 1917. § 3099. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1536. In effect July 31, 1917. The § 3100. SIGNATURE BY AGENT; AUTHORITY; HOW SHOWN. 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. History: p. 1536. Enactment approved June 1, 1917, Stats. and Amdts. 1917, § 3101. LIABILITY OF PERSON SIGNING AS AGENT, ETC. 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. History: Enactment approved June 1, 1917, Stats, and Amdts. 1917, p. 1536. In effect July 31, 1917. § 3102. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1536. In effect July 31, 1917. § 3103. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1536. In effect July 31, 1917. § 3104. FORGED SIGNATURE; EFFECT OF. When a signature is forged or made without the 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1536. In effect July 31, 1917. ARTICLE II. CONSIDERATION. $3105. Presumption of consideration. § 3106. Consideration, what constitutes. § 3107. What constitutes holder for value. § 3108. When lien on instrument constitutes holder for value. § 3109. Effect of want [or failure] of consideration. § 3110. Liability of accommodation party. § 3105. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1537. In effect July 31, 1917. § 3106. CONSIDERATION, WHAT CONSTITUTES. Value is any consideration sufficient to support a simple contract. An antecedent or preexisting debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time. History: p. 1537. Enactment approved June 1, 1917, Stats. and Amdts. 1917, § 3107. 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 become such prior to that time. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1537. In effect July 31, 1917. § 3108. 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. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1537. In effect July 31, 1917. 1. Indorsement, sufficiency of. -An indorsement is not ineffective because the words "demand, notice and protest waived" are written above it.-Rucker v. Carpenter, 29 Cal. App. 678, 157 Pac. 524. 2. An indorsement by the payee of a promissory note in the following manner: "May 22, 1913. Demand, notice and protest waived. J. R. Pentuff," followed by an in dorsement with rubber stamp as follows: "Pay to the order of any Bank, Banker or Trust Co., prior indorsements guaranteed, Nov. 11, 1913, the Arlington National Bank, 69-424, of Rosslyn, Va., G. T. Merchant, Cashier," constitutes a sufficient indorsement to pass title to the holder.-Rucker v. Carpenter, 29 Cal. App. 678, 157 Pac. 524. § 3109. EFFECT OF WANT [OR FAILURE] OF CONSIDERATION. Absence or failure of consideration is matter of defense as against any person not a holder in due course; and partial failure or [of] consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1537. In effect July 31, 1917. § 3110. 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, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party. History: Enactment approved June 1, 1917, Stats. and Amdts. 1917, p. 1537. In effect July 31, 1917. |