Chapter 46. NEGOTIABLE INSTRUMENTS.

§1. Form of Negotiable Instrument.—An instrument to be negotiable must conform to the following requirements:

(a) It must be in writing and signed by the maker or drawer;

(b) Must contain an unconditional promise or order to pay a sum certain in money;

(c) Must be payable on demand, or a fixed or determinable future time;

(d) Must be payable to order or to bearer; and

(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.(1907, c. 81, §1; Code 1923, c. 98A, §1; N. I. L., §1.)

§2. When Sum Payable is a Sum Certain.—The sum payable is a sum certain within the meaning of this chapter, although it is to be paid:

(a) With interest; or

(b) By stated installments; or

(c) By stated installments, with a provision that upon default in payment of any installment or of interest the whole shall become due ; or

(d) With exchange, whether at a fixed rate or at the current rate; or

(e) With cost of collection or an attorney’s fee in case payment shall not be made at maturity.(1907, c. 81, §2; Code 1923, c. 98A, §2; N.I.L., §2.)

§3. When Order or Promise is Unconditional.—An unqualified order or promise to pay is unconditional within the meaning of this chapter though coupled with:

(a) An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or

(b) A statement of the transaction which gives rise to the instrument.

But an order or promise to pay out of a particular fund is not unconditional.(1907, c. 81, §3; Code 1923, c. 98A, §3; N.I.L., §3.)

§4. Determinable Future Time; What Constitutes.—An instrument is payable at a determinable future time within the meaning of this chapter, which is expressed to be payable

(a) At a fixed period after date or sight; or

(b) On or before a fixed or determinable future time specified therein; or

(c) On or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening be uncertain.

An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect.(1907, c. 81, §4; Code 1923, c. 98A, §4; N.I.L., §4.)

§5. Provisions Not Affecting Negotiability.—An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which;

(a) Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or

(b) Authorizes a confession of judgment if the instrument be not paid at maturity; or

(c) Waives the benefit of any law intended for the advantage or protection of the obligor; or

(d) Gives the holder an election to require something to be done in lieu of payment of money.

But nothing in this section shall validate any proviso or stipulation otherwise illegal.(1907, c. 81, §5; Code 1923, c. 98A, §5; N.I.L., §5.)

§6. Facts Not Affecting Validity or Negotiability.—The validity and negotiable character of an instrument are not affected by the fact that:

(a) It is not dated ; or

(b) Does not specify the value given, or that any value has been given therefor; or

(c) Does not specify the place where it is drawn or the place where it is payable; or

(d) Bears a seal; or

(e) 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.(1907, c. 81, §6; Code 1923, c. 98A, §6; N.I.L., §6.)

§7. When Payable on Demand.—An instrument is payable on demand:

(a) Where it is expressed to be payable on demand, or at sight, or on presentation; or

(b) 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.(1907, c. 81, §7; Code 1923, c. 98A, §7; N.I.L., §7.)

§8. 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:

(a) A payee who is not maker, drawer or drawee; or

(b) The drawer or maker; or

(c) The drawee; or

(d) Two or more payees jointly; or

(e) One or more of several payees; or

f) 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.(1907, c. 81, §8; Code 1923, c. 98A, §8; N.I.L., §8.)

§9. When Payable to Bearer.—The instrument is payable to bearer:

(a) When it is expressed to be so payable;

(b) When it is payable to a person named therein or bearer; or

(c) 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

(d) When the name of the payee does not pur port to be the name of any person; or

(e) When the only or last indorsement is an indorsement in blank.(1907, c. 81, §9; Code 1923, c. 98A, §9; N.I.L., §9.)

§10. What Terms Sufficient.—The negotiable instrument need not follow the language of this chapter, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof.(1907, c. 81, §10; Code 1923, c. 98A, §10; N.I.L., §10.)

§11. Date; Presumption as to.—When the instrument or an acceptance or 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.(1907, c. 81, §11; Code 1923, c. 98A, §11; N.I.L., §11.)

§12. Antedated or 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.(1907. c. 81. §12; Code 1923, c. 98A. §12; N.I.L., §12.)

§13. 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; 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.(1907, c. 81, §13; Code 1923, c. 98A, §13; N.I.L., §13.)

§14. 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 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 or 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.(1907, c. 81, §14; Code 1923, c. 98A, §14; N.I.L., §14.)

§15. 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.(1907, c. 81, §15; Code 1923, c. 98A, §15; N.I.L., §15.)

§16. 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.(1907, c. 81, §16; Code 1923, c. 98A, §16; N. I. L., §16.)

§17. Construction Where Instrument is Ambiguous.—Where the language of the instrument is ambiguous or there are omissions therein, the following rules of construction apply:

(a) Where the sum payable is expressed in words and also in figures and there is a dis crepancy 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;

(b) 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;

(c) Where the instrument is not dated, it will be considered to be dated as of the time it was issued;

(d) Where there is a conflict between the written and printed provisions of the instrument, the written provisions prevail

(e) Where the instrument is so ambiguous that there is doubt whether it is a bill or a note, the holder may treat it as either at his election;

(f) 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;

(g) 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.(1907, c. 81, §17; Code 1923, c. 98A, §17; N.I.L., §17.)

§18. Only Persons Signing Liable; 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 as sumed name will be liable to the same extent as if he had signed in his own name.(1907, c. 81, §18; Code 1923, c. 98A, §18; N.I.L., §18.)

§19. 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.(1907, c. 81, §19; Code 1923, c. 98A, §19; N.I.L., §19.)

§20. 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 the 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.(1907, c. 81, §20; Code 1923, c. 98A, §20; N.I.L., §20.)

§21. Signature by Procuration; Effect of.—A signature by procuration operates as notice that the agent has but 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.(1907, c. 81, §21; Code 1923, c. 98A, §21; N.I.L., §21.)

§22. Indorsement by Corporation or Infant.—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.(1907, c. 81, §22; Code 1923, c. 98A, §22; N.I.L., §22.)

§23. Signature Forged or Made Without Authority; Effect of.—Where 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.(1907, c. 81, §23; Code 1923, c. 98A, §23; N.I.L., §23.)

§1. 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.(1907, c. 81, §24; Code 1923, c. 98A, §24; N.I.L., §24.)

§2. What is Value; Antecedent Debt.—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.(1907, c. 81, §25; Code 1923, c. 98A, §25; N.I.L., §25.)

§3. Value Given by Prior Holder.—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.(1907, c. 81, §26; Code 1923, c. 98A, §26; N.I.L., §26.)

§4. Lienor a Holder for Value; to What Extent.—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.(1907, c. 81, §27; Code 1923, c. 98A, §27; N.I.L., §27.)

§5. Effect of Want of Consideration.—Absence or failure of consideration is a 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 a liquidated amount or otherwise.(1907, c. 81, §28; Code 1923, c. 98A, §28; N.I.L., §28.)

§6. Accommodation Party; Definition; Liability.—An accommodation party is one who has signed the instrument as maker, drawer, acceptor or indorser, without receiving value there for, 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, notwith standing such holder, at the time of taking the instrument, knew him to be only an accommodation party.(1907, c. 81, §29; Code 1923, c. 98A, §29; N.I.L., §29.)

§1. What Constitutes Negotiation.—An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer it is negotiated by delivery; if payable to order it is negotiated by the in dorsement of the holder, completed by delivery.(1907, c. 81, §30; Code 1923, c. 98A, §30; N.I.L., §30.)

§2. Indorsement; How Made.—The indorsement must be written on the instrument itself or upon a paper attached thereto. The signature of the indorser, without additional words, is a sufficient indorsement.(1907, c. 81, §31; Code 1923, c. 98A, §31; N.I.L., §31.)

§3. Indorsement Must be of Entire Instrument.—The indorsement must be an indorsement of the entire instrument. An indorsement which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument. But where the instrument has been paid in part, it may be indorsed as to the residue.(1907, c. 81, §32; Code 1923, c. 98A, §32; N.I.L., §32.)

§4. Kinds of Indorsement.—An indorsement may be either in blank or special; and it may also be either restrictive or qualified, or conditional.(1907, c. 81, §33; Code 1923, c. 98A, §33; N.I.L., §33.)

§5. Special Indorsement; Indorsement in Blank.—A special indorsement specifies the person to whom or to whose order the instrument is to be payable; and the indorsement of such in indorsee is necessary to the further negotiation of the instrument. An indorsement in blank does not specify any indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery.(1907, c. 81, §34; Code 1923, c. 98A, §34; N.I.L., §34.)

§6. Converting Blank Indorsement Into Special Indorsement.—The holder may convert a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement.(1907, c. 81, §35; Code 1923, c. 98A, §35; N.I.L., §35.)

§7. Restrictive Indorsements.—An indorsement is restrictive, which either:

(a) Prohibits the further negotiation of the instrument; or

(b) Constitutes the indorsee the agent of the indorser; or

(c) Vests the title in the indorsee in trust for or to the use of some other person.

But the mere absence of words implying power to negotiate does not make an indorsement restrictive.(1907, c. 81, §36; Code 1923, c. 98A, §36; N.I.L., §36.)

§8. Effect of Restrictive Indorsement; Rights of Indorsee.—A restrictive indorsement confers upon the indorsee the right:

(a) To receive payment of the instrument;

(b) To bring any action thereon that the indorser could bring;

(c) To transfer his rights as such indorsee, where the form of the indorsement authorizes him to do so. But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement.(1907, c. 81, §37; Code 1923, c. 98A, §37; N.I.L., §37.)

§9. Qualified Indorsement.—A qualified indorsement constitutes the indorser a mere assign or of the title to the instrument. It may be made by adding to the indorser’s signature the words “without recourse” or any words of similar import. Such an indorsement does not impair the negotiable character of the instrument.(1907, c. 81, §38; Code 1923, c. 98A, §38; N.I.L., §38.)

§10. Conditional Indorsement.—Where an indorsement is conditional, a party required to pay the instrument may disregard the condition, and make a payment to the indorsee or his transferee, whether the condition has been fulfilled or not. But any person to whom an instrument so indorsed is negotiated will hold the same, or proceeds thereof, subject to the rights of the person indorsing conditionally.(1907, c. 81, §39; Code 1923, c. 98A, §39; N.I.L., §39.)

§11. Indorsement of Instrument Payable to Two or More Persons.—Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others.(1907, c. 81, §41; Code 1923, c. 98A, §41; N.I.L., §41.)

§12. Instrument Payable to “Cashier” or Other Fiscal Officer.—Where an instrument is drawn or indorsed to a person, as “cashier” or other fiscal officer of a bank or corporation, it is deemed prima facie to be payable to the bank or corporation of which he is such officer; and may be negotiated by either the indorsement of the bank or corporation, or the indorsement of the officer.(1907, c. 81, §42; Code 1923, c. 98A, §42; N.I.L., §42.)

§13. Indorsement Where Name is Misspelled, Etc.—Where the name of the payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described, adding, if he think fit, his proper signature.(1907, c. 81, §43; Code 1923, c. 98A, §43; N.I.L., §43.)

§14. Indorsement in Representative Capacity.—Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability.(1907, c. 81, §44; Code 1923, c. 98A, §44; N.I.L., §44.)

§15. Time of Indorsement; Presumption.—Except where an indorsement bears date after the maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue.(1907, c. 81, §45; Code 1923, c. 98A, §45; N.I.L., §45.)

§16. Place of Indorsement; Presumption.—Except where the contrary appears, every indorsement is presumed prima facie to have been made at the place where the instrument is dated.(1907, c. 81, §46; Code 1923, c. 98A, §46; N.I.L., §46.)

§17. Continuation of Negotiable Character.—An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise.(1907, c. 81, §47; Code 1923, c. 98A, §47; N.I.L., §47.)

§18. Striking Out Indorsement; Effect.—The holder 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.(1907, c. 81, §48; Code 1923, c. 98A, §48; N.I.L., §48.)

§19. Transfers Without Indorsement; Effect of.—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. 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.(1907, c. 81, §49; Code 1923, c. 98A, §49; N.I.L., §49.)

§20. 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 chapter, 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.(1907, c. 81, §50; Code 1923, c. 98A. §50; N.I.L., §50.)

§1. Right of Holder to Sue; Payment.—The holder of a negotiable instrument may sue there on in his own name; and payment to him in due course discharges the instrument.(1907, c. 81, §51; Code 1923, c. 98A, §51; N.I.L., §51.)

§2. What Constitutes a Holder in Due Course.—A holder in due course is a holder, including a payee, who has taken the instrument under the following conditions:

(a ) That the instrument is complete and regular upon its face;

(b ) 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;

(c ) That he took it in good faith and for value;

(d ) That at the time it was negotiated to him he had no notice of any infirmity in the instru ment or defect in the title of the person negotiating it.(1907, c. 81, §52; Code 1923, c. 98A, §52; N.I.L., §52.)

§3. Instrument Payable on Demand; Negotiation After Unreasonable Time.—Where an instrument payable on demand is negotiated an unreasonable length of time after its issue, the holder is not deemed a holder in due course.(1907, c. 81, §53; Code 1923, c. 98A, §53; N. I. L., §53.)

§4. Notice Before Full Amount Paid.—Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the amount theretofore paid by him.(1907, c. 81, §54; Code 1923, c. 98A, §54; N.I.L., §54.)

§5. When Title Defective.—The title of a person who negotiates an instrument is defective within the meaning of this chapter when he obtained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for any illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud.(1907, c. 81, §55; Code 1923, c. 98A, §55; N.I.L., §55.)

§6. What Constitutes Notice of Defect.—To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith.(1907, c. 81, §56; Code 1923, c. 98A, §56; N.I.L., §56.)

§7. Rights of Holder in Due Course.—A holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses available to prior parties among themselves and may enforce payment of the instrument for the full amount thereof against all parties liable thereon.(1907, c. 81, §57; Code 1923, c. 98A, §57; N. I. L., §57.)

§8. When Subject to Original Defense.—In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were nonnegotiable. But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality af fecting the instrument, or had not previously been a holder with notice and subject to the defense of such fraud or illegality, has all the rights of such holder in due course in respect to all parties liable to the latter.(1907, c. 81, §58; Code 1923, c. 98A, §58; N.I.L., §58.)

§9. Presumption as to Holder in Due Course; Burden of Proof.—Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course. But the last mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.(1907, c. 81, §59; Code 1923, c. 98A, §59; N.I.L., §59.)

§1. Liability of Maker.—The maker of a negotiable instrument by making it engages that he will pay it according to its tenor, and admits the existence of the payee and his then capacity to indorse.(1907, c. 81, §60; Code 1923, c. 98A, §60; N.I.L., §60.)

§2. Liability of Drawer.—The drawer by drawing the instrument admits the existence of the payee and his then capacity to indorse; and engages that on due presentment of the instrument it will be accepted or paid, or both, according to its tenor, and that, if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder.(1907, c. 81, §61; Code 1923, c. 98A, §61; N.I.L., §61.)

§3. Liability of Acceptor.—The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance; and admits:

(a) The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument; and

(b) The existence of the payee and his then capacity to indorse.(1907, c. 81, §62; Code Code 1923, c. 98A, §63; N.I.L., §63.)

§4. When Person Deemed Indorser.—A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor, is deemed to be an indorser, unless he clearly in dicates by appropriate words his intention to be bound in some other capacity.(1907, c. 81, §63; Code 1923, c. 98A, §63; N.I.L., §63.)

§5. Liability of Irregular Indorser.—Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser, in accordance with the following rules:

(a) If the instrument is a note or bill pay able to the order of a third person, or an accepted bill payable to the order of the drawer, he is liable to the payee and to all subsequent parties;

(b) If the instrument is a note or unaccepted bill payable to the order of the maker or drawer, or is payable to bearer, he is liable to all parties subsequent to the maker or drawer;

(c) If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee.(1907, c. 81, §64; Code 1923, c. 98A, §64; N.I.L., §64.)

§6. Warranty Where Negotiation by Delivery or Qualified Indorsement.—Every person negotiating an instrument by delivery or by a qualified indorsement warrants:

(a) That the instrument is genuine and in all respects what it purports to be;

(b) That he has a good title to it;

(c) That all prior parties had capacity to contract;

(d) That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless.

But when the negotiation is by delivery only, the warranty extends in favor of no holder other than the immediate transferee. The provisions of subdivision (c) of this section do not apply to persons negotiating public or corporate securities, other than bills and notes.(1907, c. 81, §65; Code 1923, c. 98A, §65; N.I.L., §65.)

§7. Liability of General Indorser.—Every indorser, except an accommodation indorser, who indorses without qualification, warrants to all subsequent holders in due course:

(a) The matters and things mentioned in subdivisions (a), (b), (c) and (d) of the next preceding section; and

(b) That the instrument is at the time of his indorsement valid and subsisting.

And, in addition, every indorser engages that on due presentment, it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it.(1907, c. 81, §66; Code 1923, c. 98A, §66; N.I.L., §66.)

§8. Liability of Indorser Where Paper Negotiable by Delivery.—Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser.(1907, c. 81, §67; Code 1923, c. 98A, §67; N.I.L., §67.)

§9. Order in Which Indorsers are Liable.—As respects one another, indorsers are liable prima facie in the order in which they indorse, except that accommodation or irregular indorsers, indorsing for the same party, are prima facie equally liable; but in any case evidence is admissible to show that as between or among themselves they have agreed otherwise. All parties jointly bound on a negotiable instrument are deemed to be jointly and severally liable.(1907, c. 81, §68; Code 1923, c. 98A, §68, N.I.L., §68.)

§10. Liability of Agent or Broker.—Where a broker or other agent negotiates an instrument without indorsement, he incurs all the liabilities prescribed by section six of this article, unless he discloses the name of his principal, and the fact that he is acting only as agent.(1907, c. 81, §69; Code 1923, c. 98A, §69; N.I.L., §69.)

§1. Presentment; When Necessary; Effect of Failure.—Presentment for payment is not necessary in order to charge the person primarily liable on the instrument. But except as herein otherwise provided, presentment for payment is necessary in order to charge the drawer and indorsers. The statute of limitations shall not begin to run against the holder of a certificate of deposit or a bank note until after presentment and demand for payment.(1907, c. 81, §70; Code 1923, c. 98A, §70; N.I.L., §70.)

§2. Presentment Where Not Payable on Demand; Where Payable on Demand.—Where the instrument is not payable on demand, presentment must be made on the day it falls due. Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof.(1907, c. 81, §71; Code 1923, c. 98A, §71; N.I.L., §71.)

§3. What Constitutes Sufficient Presentment.—Presentment for payment, to be sufficient, must be made:

(a) By the holder or by some person authorized to receive payment on his behalf;

(b) At a reasonable hour on a business day;

(c) At a proper place as herein defined;

(d) To the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where the present ment is made.

If the party primarily liable be a corporation, to the president, treasurer, cashier, secretary or manager, or, if neither is present, to any person found at the place where presentment is made.(1907, c. 81, §72; Code 1923, c. 98A, §72; N.I.L., §72.)

§4. Place of Presentment.—Presentment for payment is made at the proper place:

(a) Where a place of payment is specified in the instrument and it is there presented;

(b) Where no place of payment is specified but the address of the person to make payment is given in the instrument and it is there presented;

(c) Where no place of payment is specified and no address is given and the instrument is presented at the usual place of business or residence of the person to make payment;

(d) In any other case, if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence.(1907, c. 81, §73; Code 1923, c. 98A, §73; N.I.L., §73.)

§5. Exhibition of Instrument Presented.—The instrument must be exhibited to the person from whom payment is demanded, and when it is paid must be delivered up to the party paying it.(1907, c. 81, §74; Code 1923, c. 98A, §74; N.I.L., §74.)

§6. Presentment When Instrument Payable at Bank.—Where the instrument is payable at a bank, presentment for payment must be made during banking hours, unless the person to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient.(1907, c. 81, §75; Code 1923, c. 98A, §75; N.I.L., §75.)

§7. Presentment When Person Primarily Liable is Dead.—Where the person primarily liable on the instrument is dead, and no place of payment is specified, presentment for payment must be made to his personal representative if such there be, and if with the exercise of reasonable diligence he can be found.(1907, c. 81, §76; Code 1923, c. 98A, §76; N.I.L., §76.)

§8. Presentment to Persons Liable as Partners.—Where the persons primarily liable on the instrument are liable as partners, and no place of payment is specified, presentment for payment may be made to any one of them, even though there has been a dissolution of the firm.(1907, c. 81, §77; Code 1923, c. 98A, §77; N.I.L., §77.)

§9. Presentment to Joint Debtors.—Where there are several persons, not partners, primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all.(1907, c. 81, §78; Code 1923, c. 98A, §78; N.I.L., §78.)

§10. Presentment Not Required to Charge Drawer.—Presentment for payment is not required in order to charge the drawer where he has no right to expect or require that the drawee or acceptor will pay the instrument.(1907, c 81, §79; Code 1923, c. 98A, §79; N.I.L., §79.)

§11. Presentment Not Required to Charge Indorser.—Presentment for payment is not required in order to charge an indorser where the instrument was made or accepted for his accommodation.(1907, c. 81, §80; Code 1923, c. 98A, §80; N.I.L., §80.)

§12. When Delay in Making Presentment is Excused.—Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, mis conduct or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence.(1907, c. 81, §81; Code 1923, c. 98A, §81; N.I.L., §81.)

§13. When Presentment Dispensed With.—Presentment for payment is dispensed with:

(a) Where after the exercise of reasonable diligence presentment as required by this chapter can not be made;

(b) Where the drawee is a fictitious person;

(c) By waiver of presentment, express or implied.(1907, c. 81, §82; Code 1923, c. 98A, §82; N.I.L., §82.)

§14. When Instrument Dishonored by Nonpayment.—The instrument is dishonored by nonpayment when:

(a) It is duly presented for payment and payment is refused or can not be obtained; or

(b) Presentment is excused and the instrument is overdue and unpaid.(1907, c. 81, §83; Code 1923, c. 98A, §83; N.I.L., §83.)

§15. Liability of Person Secondarily Liable When Instrument Dishonored.—Subject to the provisions of this chapter, when the instrument is dishonored by nonpayment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder.(1907, c. 81, §84; Code 1923, c. 98A, §84; N.I.L., §84.)

§16. Time of Maturity.—Every negotiable instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday, or a holiday, the instrument is payable on the next succeeding business day. Instruments falling due on Saturday are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, he presented for payment before twelve o’clock noon on Saturday when that entire day is not a holiday.(1907, c. 81, §85; Code 1923, c. 98A, §85; N.I.L., §85.)

§17. How Time Computed.—Where the instrument is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and by including the date of payment.(1907, c. 81, §86; Code 1923, c. 98A, §86; N.I.L., §86.)

§18. Instrument Payable at Bank; Effect Of.—Where the instrument is made payable at a bank it is not equivalent to an order to the bank to pay the same for the account of the principal debtor thereon.(1907, c. 81, §87 ; Code 1923, c. 98A, §87; N.I.L., §87.)

§19. What is Payment in Due Course.—Payment is made in due course when it is made at or after maturity of the instrument to the holder thereof in good faith and without notice that his title is defective.(1907, c. 81, §88; Code 1923, c. 98A, §88; N.I.L., §88.)

§1. To Whom Notice of Dishonor Given.—Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged.(1907, c. 81, §89; Code 1923, c. 98A, §89; N.I.L., §89.)

§2. By Whom Notice Given.—The notice may be given by or on behalf of the holder, or by or on behalf of any party to the instrument who might be compelled to pay it to the holder, and who, upon taking it up, would have a right to reimbursement from the party to whom the notice is given.(1907, c. 81, §90; Code 1923, c. 98A, §90; N.I.L., §90.)

§3. Form of Notice by Agent.—Notice of dishonor may be given by an agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not.(1907, c. 81, §91; Code 1923, c. 98A, §91; N.I.L., §91.)

§4. Effect of Notice Given on Behalf of Holder.—Where notice is given by or on behalf of the holder, it inures to the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given.(1907, c. 81, §92; Code 1923, c. 98A, §92; N.I.L., §92.)

§5. Effect Where Notice is Given by Party Entitled Thereto.—Where notice is given by or on behalf of a party entitled to give notice, it inures to the benefit of the holder and all parties subsequent to the party to whom notice is given.(1907, c. 81, §93; Code 1923, c. 98A, §93; N.I.L., §93.)

§6. When Agent May Give Notice.—Where the instrument has been dishonored in the hands of an agent, he may either himself give notice to the parties liable thereon, or he may give notice to his principal. If he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal, upon the receipt of such notice, has himself the same time for giving notice as if the agent had been an independent holder.(1907, c. 81, §94; Code 1923, c. 98A, §94; N.I.L., §94.)

§7. When Notice Sufficient.—A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby.(1907, c. 81, §95; Code 1923, c. 98A, §95; N.I.L., §95.)

§8. Form of Notice.—The notice may be in writing or merely oral and may be given in any terms which sufficiently identify the instrument and indicate that it has been dishonored by nonacceptance or nonpayment. It may in all cases be given by delivering it personally or through the mails.(1907, c. 81, §96; Code 1923, c. 98A, §96; N.I.L., §96.)

§9. To Whom Notice May be Given.—Notice of dishonor may be given either to the party himself or to his agent in that behalf.(1907, c. 81, §97; Code 1923, c. 98A, §97; N.I.L., §97.)

§10. Notice When Party is Dead.—When any party is dead, and his death is known to the party giving the notice, the notice must be given to a personal representative, if there be one, and if with reasonable diligence he can be found. If there be no personal representative, notice may be sent to the last residence or last place of business of the deceased.(1907, c. 81, §98; Code 1923, c. 98A, §98; N.I.L., §98.)

§11. Notice to Partners.—Where the parties to be notified are partners, notice to any one partner is notice to the firm, even though there has been a dissolution.(1907, c. 81, §99; Code 1923, c. 98A, §99; N.I.L., §99.)

§12. Notice to Persons Jointly Liable.—Notice to joint parties who are not partners must be given to each of them, unless one of them has authority to receive such notice for the others.(1907, c. 81, §100; Code 1923, c. 98A, §100; N.I.L., §100.)

§13. Notice to Bankrupt.—Where a party has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, notice may be given either to the party himself or to his trustee or assignee.(1907, c. 81, §101; Code 1923, c. 98A, §101; N.I.L., §101.)

§14. Time Within Which Notice to be Given.—Notice may be given as soon as the instrument is dishonored, and, unless delay is excused as hereinafter provided, must be given within the times fixed by this chapter.(1907, c. 81, §102; Code 1923, c. 98A, §102; N.I.L., §102.)

§15. Where Parties Reside in Same Place.—Where the person giving and the person to receive notice reside in the same place, notice must be given within the following times:

(a) If given at the place of business of the person to receive notice, it must be given before the close of business hours on the day following;

(b) If given at his residence, it must be given before the usual hours of rest on the following day;

(c) If sent by mail, it must be deposited in the post office in time to reach him in the usual course on the day following.(1907, c. 81, §103; Code 1923, c. 98A, §103; N.I.L., §103.)

§16. Where Parties Reside in Different Places.—Where the person giving and the person to receive notice reside in different places, the notice must be given within the following times:

(a) If sent by mail, it must be deposited in the post office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day, by the next mail thereafter;

(b) If given otherwise than through the post office, then within the time that notice would have been received in due course of mail, if it had been deposited in the post office within the time specified in the last subdivision.(1907, c. 81, §104; Code 1923, c. 98A, §104; N.I.L., §104.)

§17. Miscarriage in Mails; Notice Deemed to Have Been Given.—Where notice of dishonor is duly addressed and deposited in the post office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails.(1907, c. 81, §105; Code 1923, c. 98A, §105; N.I.L., §105.)

§18. Deposit in Post Office; What Constitutes.—Notice is deemed to have been deposited in the post office when deposited in any branch post office or in any letter box under the control of the post office department.(1907, c. 81, §106; Code 1923, c. 98A, §106; N.I.L., §106.)

§19. Notice to Antecedent Parties.—Where a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving notice to antecedent parties that the holder has after the dishonor.(1907, c. 81, §107; Code 1923, c. 98A, §107; N.I.L., §107.)

§20. Where Notice Must be Sent.—Where a party has added an address to his signature, notice of dishonor must be sent to that address; but if he has not given such address, then the notice must be sent as follows:

(a) Either to the post office nearest to his place of residence, or to the post office where he is accustomed to receive his letters; or

(b) If he live in one place, and have his place of business in another, notice may be sent to either place; or

(c) If he is sojourning in another place, notice may be sent to the place where he is sojourning.

But where the notice is actually received by the party within the time specified in this chapter, it will be sufficient, though not sent in accordance with the requirements of this section.(1907, c. 81, §108; Code 1923, c. 98A, §108; N.I.L., §108.)

§21. Waiver of Notice.—Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied.(1907, c. 81, §109; Code 1923, c. 98A, §109; N.I.L., §109.)

§22. Parties Affected by Waiver.—Where the waiver is embodied in the instrument itself, it is binding upon all parties; but where it is written above the signature of an indorser it binds him only.(1907, c. 81, §110; Code 1923, c. 98A, §110; N.I.L., §110.)

§23. Waiver of Protest.—A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver not only of a formal protest, but also of a presentment and notice of dishonor.(1907, c. 81, §111; Code 1923, c. 98A, §111; N.I.L., §111.)

§24. When Notice is Dispensed With.—Notice of dishonor is dispensed with when, after the exercise of reasonable diligence, it can not be given to or does not reach the parties sought to be charged.(1907, c. 81, §112; Code 1923, c. 98A, §112; N.I.L., §112.)

§25. When Delay in Giving Notice Excused.—Delay in giving notice of dishonor is excused when the delay is caused by circumstances beyond the control of the holder, or other person entitled to give notice, and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, notice must be given with reasonable diligence.(1907, c. 81, §113; Code 1923, c. 98A, §113; N.I.L., §113.)

§26. When Notice to Drawer Not Required.—Notice of dishonor is not required to be given to the drawer in either of the following cases:

(a) Where the drawer and the drawee are the same person;

(b) Where the drawee is a fictitious person or a person not having capacity to contract;

(c) Where the drawer is the person to whom the instrument is presented for payment;

(d) Where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument;

(e) Where the drawer has countermanded payment.(1907, c. 81, §114; Code 1923, c. 98A, §114; N.I.L., §114.)

§27. When Notice to Indorser Not Required.—Notice of dishonor is not required to be given to an indorser in either of the following cases:

(a) Where the drawee is a fictitious person or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the instrument;

(b) Where the indorser is the person to whom the instrument is presented for payment;

(c) Where the instrument was made or accepted for his accommodation.(1907, c. 81, §115; Code 1923, c. 98A, §115; N.I.L., §115.)

§28. Notice of Nonpayment Where Acceptance Refused.—Where due notice of dishonor by nonacceptance has been given, notice of a subsequent dishonor by nonpayment is not necessary, unless in the meantime the instrument has been accepted.(1907, c. 81, §116; Code 1923, c. 98A, §116; N.I.L., §116.)

§29. Omission to Give Notice of Nonacceptance.—An omission to give notice of dishonor by nonacceptance does not prejudice the rights of a holder in due course subsequent to the omission.(1907, c. 81, §117; Code 1923, c. 98A, §117; N.I.L., §117.)

§30. When Protest Need Not be Made; When Must be Made; Certificate of Protest as Evidence.—Where any negotiable instrument has been dishonored it may be protested for nonacceptance, or nonpayment, as the case may be; but protest is not required except in the case of foreign bills of exchange. Where protest of any negotiable instrument is made, the certificate of protest shall be prima facie evidence of what is stated therein or on the foot or on the back thereof in relation to the presentment, dishonor and notice thereof.(1907, c. 81, §118; Code 1923, c. 98A, §118; N.I.L., §118.)

§1. How Instrument Discharged.—A negotiable instrument is discharged:

(a) By payment in due course by or on behalf of the person primarily liable;

(b) By payment in due course by the party accommodated, where the instrument is made or accepted for accommodation;

(c) By the intentional cancellation thereof by the holder;

(d) When the person primarily liable becomes the holder of the instrument at or after maturity in his own right.(1907, c. 81, §119; Code 1923, c. 98A, §119; N.I.L., §119.)

§2. When a Party Discharged.—A party to a negotiable instrument is discharged:

(a) By an act which discharges the instrument;

(b) By the intentional cancellation of his signature by the holder;

(c) By a valid tender of payment made by a prior party.

(d) This section does not include the rules governing the discharge of a surety or party secondarily liable because of such secondary liability.(1907, c. 81, §120; Code 1923, c. 98A, §120; N. I. L., §120.)

§3. Payment by Party Secondarily Liable; Effect of.—When the instrument is paid by a party secondarily liable thereon, it is not discharged; but the party so paying it is remitted to his former rights as regards all prior parties, and he may strike out his own and all subsequent indorsements, and again negotiate the instrument, except:

(a) Where it is payable to the order of a third person, and has been paid by the drawer; and

(b) Where it was made or accepted for accommodation, and has been paid by the party accommodated.(1907, c. 81, §121; Code 1923, c. 98A, §121; N.I.L., §121.)

§4. Renunciation by Holder.—The holder may expressly renounce his rights against any party to the instrument before, at, or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon.(1907, c. 81, §122; Code 1923, c. 98A, §122; N.I.L., §122.)

§5. Cancellation; Burden of Proof.—A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where an instrument or any signature thereon appears to have been canceled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally or under a mistake or without authority.(1907, c. 81, §123; Code 1923, c. 98A, §123; N.I.L., §123.)

§6. Alteration of Instrument; Effect of.—Where a negotiable instrument is materially altered by the holder or by some one acting with the authority or consent of the holder, without the assent of all parties liable thereon, it is voided except as against the party who has himself made, authorized or assented to the alteration and subsequent indorsers. But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof according to its original tenor.(1907, c. 81, §124; Code 1923, c. 98A, §124; N.I.L., §124.)

§7. What Constitutes a Material Alteration.—Any alteration which changes:

(a) The date;

(b) The sum payable, either for principal or interest;

(c) The time or place of payment;

(d) The number or the relations of the parties;

(e) The medium or currency in which payment is to be made;

Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration.(1907, c. 81, §125; Code 1923, c. 98A, §125; N.I.L., §125.)

§1. Bill of Exchange Defined.—A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.(1907, c. 81, §126; Code 1923, c. 98A, §126; N.I.L., §126.)

§2. Bill Not Assignment of Funds in Hands of Drawee.—A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same.(1907, c. 81, §127; Code 1923, c. 98A, §127; N.I.L., §127.)

§3. Bill Addressed to More Than One Drawee.—A bill may be addressed to two or more drawees jointly, whether they are partners or not; but not to two or more drawees in the alternative or in succession.(1907, c. 81, §128; Code 1923, c. 98A, §128; N.I.L., §128.)

§4. Inland and Foreign Bills of Exchange.—An inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within this State. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.(1907, c. 81, §129; Code 1923, c. 98A, §129; N.I.L., §129.)

§5. When Bill May be Treated as Promissory Note.—Wherein a bill drawer and drawee are the same person, or where the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or a promissory note.(1907, c. 81, §130; Code 1923, c. 98A, §130; N.I.L., §130.)

§6. Referee in Case of Need.—The drawer of a bill and any indorser may insert thereon the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonored by nonacceptance or nonpayment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not, as he may see fit.(1907, c. 81, §131; Code 1923, c. 98A, §131; N.I.L., §131.)

§1. Acceptance; How Made; Form of.—The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money.(1907, c. 81, §132; Code 1923, c. 98A, §132; N.I.L., §132.)

§2. Written Acceptance on Bill May be Required.—The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill, and, if such request is refused, may treat the bill as dishonored.(1907, c. 81, §133; Code 1923, c. 98A, §133; N.I.L., §133.)

§3. Acceptance by Separate Instrument.—When an acceptance is written on a paper other than the bill itself, it does not bind the acceptor except in favor of a person who, on the faith thereof, receives the bill for value.(1907, c. 81, §134; Code 1923, c. 98A, §134; N.I.L., §134.)

§4. Promise to Accept; When Equivalent to Acceptance.—An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who, upon the faith thereof, receives the bill for value.(1907, c. 81, §135; Code 1923, c. 98A, §135; N.I.L., §135.)

§5. Time Allowed Drawee to Accept.—The drawee is allowed twenty-four hours after presentment in which to decide whether or not he will accept the bill; but the acceptance, if given, dates as of the day of presentation.(1907, c. 81, §136; Code 1923, c. 98A, §136; N.I.L., §136.)

§6. Liability of Drawee Retaining or Destroying Bill.—Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses after the expiration of twenty-four hours after such delivery or such longer period as the holder shall allow, to return the bill, accepted or nonaccepted, to the holder, he will be deemed to have converted the same and shall be liable in damages for the amount of the bill.(1907, c. 81, §137; Code 1923, c. 98A, §137; N.I.L., §137.)

§7. Acceptance of Bill Incomplete, Overdue, or Dishonored.—A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has been dishonored by previous refusal to accept, or by nonpayment. But when a bill payable after sight is dishonored by nonacceptance and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment.(1907, c. 81, §138; Code 1923, c. 98A, §138; N.I.L., §138.)

§8. Kinds of Acceptance.—An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect of the bill as drawn.(1907, c. 81, §139; Code 1923, c. 98A, §139: N.I.L., §139.)

§9. Acceptance to Pay at Particular Place.—An acceptance to pay at a particular place is a general acceptance unless it expressly states that the bill is to be paid there only and not elsewhere.(1907, c. 81, §140; Code 1923, c. 98A, §140; N.I.L., §140.)

§10. Qualified Acceptance.—An acceptance is qualified, which is:

(a) Conditional, that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated;

(b) Partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn;

(c) Local, that is to say, an acceptance to pay only at a particular place;

(d) Qualified as to time;

(e) The acceptance of some one or more of the drawees, but not of all.(1907, c. 81, §141; Code 1923, c. 98A, §141; N.I.L., 141.)

§11. Rights of Parties as to Qualified Acceptance.—The holder may refuse to take a qualified acceptance, and, if he does not obtain an unqualified acceptance, he may treat the bill as dishonored by nonacceptance. Where a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill, unless they have expressly or impliedly authorized the holder to take a qualified acceptance, or subsequently assent thereto. When the drawer or an indorser receives notice of a qualified acceptance, he must within a reasonable time express his dissent to the holder, or he will be deemed to have assented thereto.(1907, c. 81, §142; Code 1923, c. 98A, §142; N.I.L., §142.)

§1. When Presentment for Acceptance Must be Made.—Presentment for acceptance must be made:

(a) Where the bill is payable after sight, or in any other case where presentment for acceptance is necessary in order to fix the maturity of the instrument; or

(b) Where the bill expressly stipulates that it shall be presented for acceptance; or

(c) Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee.

In no other case is presentment for acceptance necessary in order to render any party to the bill liable.(1907, c. 81, §143; Code 1923, c. 98A, §143; N.I.L., §143.)

§2. When Failure to Present Releases Drawer and Indorser.—Except as herein otherwise provided, the holder of a bill which is required by the next preceding section to be presented for acceptance must either present it for acceptance or negotiate it within a reasonable time. If he fail to do so, the drawer and all indorsers are discharged.(1907, c. 81, §144; Code 1923, c. 98A, §144; N.I.L., §144.)

§3. Presentment; How Made.—Presentment for acceptance must be made by or on behalf of the holder at a reasonable hour, on a business day, and before the bill is overdue, to the drawee or some person authorized to accept or refuse acceptance on his behalf; and

(a) Where a bill is addressed to two or more drawees who are not partners, presentment must be made to them all, unless one has authority to accept or refuse acceptance for all, in which case presentment may be made to him only;

(b) Where the drawee is dead, presentment may be made to his personal representative;

(c) Where the drawee has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, presentment may be made to him or to his trustee or assignee.(1907, c. 81, §145; Code 1923, c. 98A, §145; N.I.L., §145.)

§4. Days on Which Presentment May be Made.—A bill may be presented for acceptance on any day on which negotiable instruments may be presented for payment under the provisions of sections three and sixteen, article six of this chapter. When Saturday is not otherwise a holiday, presentment for acceptance may be made before twelve o’clock noon on that day.(1907, c. 81, §146; Code 1923, c. 98A, §146; N.I.L., §146.)

§5. Delay Caused by Previous Presentment.—Where the holder of a bill drawn payable elsewhere than at the place of business or the residence of the drawee has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused and does not discharge the drawers and indorsers.(1907, c. 81, §147; Code 1923, c. 98A, §147; N.I.L., §147.)

§6. When Presentment is Excused.—Presentment for acceptance is excused and a bill may be treated as dishonored by nonacceptance, in either of the following cases:

(a) Where the drawee is dead, or has absconded, or is a fictitious person or a person not having capacity to contract by bill;

(b) Where, after the exercise of reasonable diligence, presentment can not be made;

(c) Where, although presentment has been irregular, acceptance has been refused on some other ground.(1907, c. 81, §148; Code 1923, c. 98A, §148; N.I.L., §148.)

§7. When Dishonored by Nonacceptance.—A bill is dishonored by nonacceptance:

(a) When it is duly presented for acceptance and such an acceptance as is prescribed by this chapter is refused or can not be obtained; or

(b) When a presentment for acceptance is excused and the bill is not accepted.(1907, c. 81, §149; Code 1923, c. 98A, §149; N.I.L., §149.)

§8. Duty of Holder Where Bill Not Accepted.—Where a bill is duly presented for acceptance and is not accepted within the prescribed time, the person presenting it must treat the bill as dishonored by nonacceptance, or he loses the right of recourse against the drawer and indorsers.(1907, c. 81, §150; Code 1923, c. 98A, §150; N.I.L., §150.)

§9. Rights of Holder Where Bill Not Accepted.—When a bill is dishonored by nonacceptance, an immediate right of recourse against the drawers and indorsers accrues to the holder, and no presentment for payment is necessary.(1907, c. 81, §151; Code 1923, c. 98A, §151; N.I.L., §151.)

§1. In What Cases Protest Necessary.—Where a foreign bill appearing on its face to be such is dishonored by nonacceptance, it must be duly protested for nonacceptance, and where such a bill which has not previously been dishonored by nonacceptance is dishonored by nonpayment, it must be duly protested for nonpayment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does not appear on its face to be a foreign bill, protest thereof, in case of dishonor, is unnecessary.(1907, c. 81, §152; Code 1923, c. 98A, §152; N.I.L., §152.)

§2. Protest; How Made.—The protest must be annexed to the bill, or must contain a copy thereof, and must be under the hand and seal of the notary making it and must specify:

(a) The time and place of presentment;

(b) The fact that presentment was made and the manner thereof;

(c) The cause or reason for protesting the bill;

(d) The demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found.(1907, c. 81, §153; Code 1923, c. 98A, §153; N.I.L., §153.)

§3. By Whom Protest Made.—Protest may be made by:

(a) A notary public; or

(b) By any respectable resident of the place where the bill is dishonored in the presence of two or more credible witnesses.(1907, c. 81, §154; Code 1923, c. 98A, §154; N.I.L., §154.)

§4. When Protest to be Made.—When a bill is protested, such protest must be made on the day of its dishonor, unless delay is excused as herein provided. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.(1907, c. 81, §155; Code 1923, c. 98A, §155; N.I.L., §155.)

§5. Where Protest to be Made.—A bill must be protested at the place where it is dishonored, except that when a bill drawn payable at the place of business or residence of some person other than the drawee has been dishonored by nonacceptance, it must be protested for nonpayment at the place where it is expressed to be payable; and no further presentment for payment to, or demand on, the drawee is necessary.(1907, c. 81, §156; Code 1923, c. 98A, §156; N.I.L., §156.)

§6. Protest Both for Nonaeceptance and for Nonpayment.—A bill which has been protested for nonacceptance may be subsequently protested for nonpayment.(1907, c. 81, §157; Code 1923, c. 98A, §157; N.I.L., §157.)

§7. Protest Before Maturity Where Accept or Insolvent.—Where the acceptor has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, before the bill matures, the holder may cause the bill to be protested for better security against the drawer and indorsers.(1907, c. 81, §158; Code 1923, c. 98A, §158; N.I.L., §158.)

§8. When Protest Dispensed With.—Protest is dispensed with by any circumstances which would dispense with notice of dishonor. Delay in noting or protesting is excused when delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence,(1907, c. 81, §159; Code 1923, c. 98A, §159; N.I.L., §159.)

§9. Protest Where Bill is Lost, Destroyed or Wrongly Detained.—Where a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof.(1907, c. 81, §160; Code 1923, c. 98A, §160; N.I.L., §160.)

§1. When Bill May be Accepted for Honor.—Where a bill of exchange has been protested for dishonor by nonacceptance, or protested for better security, and is not overdue, any person not being a party already liable thereon may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon or for the honor of the person for whose account the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn, and where there has been an acceptance for honor for one party, there may be a further acceptance by a different person for the honor of another party.(1907, c. 81, §161; Code 1923, c. 98A, §161; N.I.L., §161.)

§2. How Acceptance for Honor Made.—An acceptance for honor supra protest must be in writing and indicate that it is an acceptance for honor, and must be signed by the acceptor for honor.(1907, c. 81, §162; Code 1923, c. 98A, §162; N.I.L., §162.)

§3. When Deemed to be Acceptance for Honor of Drawer.—Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer.(1907, c. 81, §163; Code 1923, c. 98A, §163; N.I.L., §163.)

§4. Liability of Acceptor for Honor.—The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted.(1907, c. 81, §164; Code 1923, c. 98A, §164; N.I.L., §164.)

§5. Agreement of Acceptor for Honor.—The acceptor for honor by such acceptance engages that he will, on due presentment, pay the bill according to the terms of his acceptance, provided it shall not have been paid by the drawee, and provided also, that it shall have been duly presented for payment and protested for nonpayment and notice of dishonor given to him.(1907, c. 81, §165; Code 1923, c. 98A, §165; N.I.L., §165.)

§6. Maturity of Bill Payable After Sight and Accepted for Honor.—When a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for nonacceptance and not from the date of the acceptance for honor.(1907, c. 81, §166; Code 1923, c. 98A, §166; N.I.L., §166.)

§7. Protest of Bill Accepted for Honor, Etc.—Where a dishonored bill has been accepted for honor supra protest or contains a reference in case of need, it must be protested for nonpayment before it is presented for payment to the acceptor for honor or referee in case of need.(1907, c. 81, §167; Code 1923, c. 98A, §167; N.I.L., §167.)

§8. Presentment for Payment to Acceptor for Honor; How Made.—Presentment for payment to the acceptor for honor must be made as follows:

(a) If it is to be presented in the place where the protest for nonpayment was made, it must be presented not later than the day following its maturity;

(b) If it is to be presented in some other place than the place where it was protested, then it must be forwarded within the time specified in section sixteen, article seven of this chapter.(1907, c. 81, §168; Code 1923, c. 98A, §168; N.I.L., §168.)

§9. When Delay in Making Presentment is Excused.—The provisions of section twelve, article six of this chapter apply where there is delay in making presentment to the acceptor for honor or referee in case of need.(1907, c. 81, §169; Code 1923, c. 98A, §169; N.I.L., §169.)

§10. Dishonor of Bill by Acceptor for Honor.—When the bill is dishonored by the acceptor for honor it must be protested for nonpayment by him.(1907, c. 81, §170; Code 1923, c. 98A, §170; N.I.L., §170.)

§1. Who May Make Payment for Honor.—Where a bill has been protested for nonpayment, any person may intervene and pay it supra pro test for the honor of any person liable thereon or for the honor of the person for whose account it was drawn.(1907, c. 81, §171; Code 1923, c. 98A, §171;N.I.L., §171.)

§2. Payment for Honor to be Attested by Notary.—The payment for honor supra protest in order to operate as such and not as a mere voluntary payment must be attested by a no tarial act of honor which may be appended to the protest or form an extension to it.(1907, c. 81, §172; Code 1923, c. 98A, §172; N.I.L., §172.)

§3. Declaration Before Payment for Honor.—The notarial act of honor must be founded on a declaration made by the payer for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays.(1907, c. 81, §173; Code 1923, c. 98A, §173; N.I.L., §173.)

§4. Preference of Persons Offering to Pay for Honor.—Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will discharge most parties to the bill is to be given the preference.(1907, c. 81, §174; Code 1923, c. 98A, §174; N.I.L., §174.)

§5. Effect on Subsequent Parties Where Bill is Paid for Honor; Rights of Payer for Honor.—Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged, but the payer for honor is subrogated for, and succeeds to, both the rights and duties of the holder as regards the party for whose honor he pays and all parties liable to the latter.(1907, c. 81, §175; Code 1923, c. 98A, §175; N.I.L., §175.)

§6. Refusal of Holder to Receive Payment Supra Protest.—When the holder of a bill refuses to receive payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment.(1907, c. 81, §176; Code 1923, c. 98A, §176; N.I.L., §176.)

§7. Right of Payer for Honor to Receive Bill and Protest.—The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the protest.(1907, c. 81, §177; Code 1923, c. 98A, §177; N.I.L., §177.)

§1. Parts Constitute One Bill.—Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitutes one bill.(1907, c. 81, §178; Code 1923, c. 98A, §178; N.I.L., §178.)

§2. Rights of Holders Where Different Parts Are Negotiated.—Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is, as between such holders, the true owner of the bill. But nothing in this section affects the rights of a person who in due course accepts or pays the part first presented to him.(1907, c. 81, §179; Code 1923, c. 98A, §179; N.I.L., §179.)

§3. Liability of Holder Who Indorses Two or More Parts of a Set to Different Persons.—Where the holder of a set indorses two or more parts to different persons he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills.(1907, c. 81, §180; Code 1923, c. 98A, §180; N.I.L., §180.)

§4. Acceptance of Bills Drawn in Sets.—The acceptance may be written on any part and it must be written on one part only. If the drawee accepts more than one part, and such accepted parts are negotiated to different holders in due course, he is liable on every such part as if it were a separate bill.(1907, c. 81, §181; Code 1923, c. 98A, §181; N.I.L., §181.)

§5. Payment by Acceptor of Bill Drawn in Set.—When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon.(1907, c. 81, §182; Code 1923, c. 98A, §182; N.I.L., §182.)

§6. Effect of Discharging One of a Set.—Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged.(1907, c. 81, §183; Code 1923, c. 98A, §183; N.I.L., §183.)

§1. Promissory Note Defined.—A negotiable promissory note within the meaning of this chapter is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker’s own order, it is not complete until indorsed by him.(1907, c. 81, §184; Code 1923, c. 98A, §184; N.I.L., §184.)

§2. Check Defined.—A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this chapter, applicable to a bill of exchange payable on demand, apply to a check.(1907, c. 81, §185; Code 1923, c. 98A, §185; N.I.L., §185.)

§3. Within What Time a Check Must be Presented.—A check must be presented for payment within a reasonable time after its issue, or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay. Failure of the holder to give the drawer due notice of dishonor will discharge him from liability thereon only to the extent of the loss caused by the delay.(1907, c. 81, §186; Code 1923, c. 98A, §186; N.I.L., §186.)

§4. Certification of Check; Effect of.—Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance.(1907, c. 81, §187; Code 1923, c. 98A, §187; N.I.L., §187.)

§5. Effect Where Holder of Check Procures it to be Certified.—Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon.(1907, c. 81, §188; Code 1923, c. 98A, §188; N.I.L., §188.)

§6. When Check Operates as an Assignment.—A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check.(1907, c. 81, §189; Code 1923, c. 98A, §189; N.I.L., §189.)

§1. Definitions of Terms.—In this chapter unless the context otherwise requires:

“Acceptance” means an acceptance com pleted by delivery or notification.

“Action” includes counterclaim and set-off.

“Bank” includes any person or association of persons carrying on the business of banking, whether incorporated or not.

“Bearer” means the person in possession of a bill or note which is payable to bearer.

“Bill” means bill of exchange, and “note” means negotiable promissory note.

“Delivery” means transfer of possession, actual or constructive, from one person to another.

“Holder” means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof.

“Indorsement” means an indorsement completed by delivery.

“Instrument” means negotiable instrument.

“Issue” means the first delivery of the instrument, complete in form, to a person who takes it as a holder.

“Person” includes a body of persons, whether incorporated or not.

“Value” means valuable consideration.

“Written” includes printed, and “writing” includes print.(1907, c. 81, §191; Code 1923, c. 98A, §191; N.I.L., §191.)

§2. Person Primarily Liable.—The person “primarily” liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are “secondarily” liable.(1907, c. 81, §192; Code 1923, c. 98A, §192; N.I.L., §192.)

§3. Reasonable Time; What Constitutes.—In determining what is a “reasonable time” or an “unreasonable time,” regard is to be had to the nature of the instrument, the usage of trade or business, if any, with respect to such instruments, and the facts of the particular case.(1907, c. 81, §193; Code 1923, c. 98A, §193; N..I.L., §193.)

§4. How Time Computed When Last Day Falls on Holiday.—Where the day, or the last day, for doing an act herein required or permitted to be done falls on Sunday or on a holiday, the act may be done on the next succeeding secular or business day.(1907, c. 81, §194; Code 1923, c. 98A, §194; N.I.L., §194.)

§5. Cases Not Provided for in This Chapter.—In any case not provided for in this chapter the rules of law and equity including the law merchant shall govern.(1907, c. 81, §196; Code 1923, c. 98A, §196; N.I.L., §196.)