title is in effect the whole title, so that the holder to indorse. $1729. One who agrees to indorse a negotiable Agreement instrument is bound to write his signature upou the back of the instrument, if there is sufficient space thereon for that purpose. This provision is new. Though an indorsement upon the be made on paper. $1730. When there is not room for a signature When may upon the back of a negotiable instrument, a signa- separate ture equivalent to an indorsement thereof may be made upon a paper annexed thereto. Story on Notes, § 121; Folger v. Chase, 18 Pick., 63. S1731. An indorsement may be general or special. S1732. A general indorsement is one by which no indorsee is named. Kinds of indorsement. General in dorsement, what. S1733. A special indorsement specifies the indorsee. Special in S 1734. A negotiable instrument bearing a general indorsement cannot be afterwards specially indorsed; but any lawful holder may turn a general indorsement into a special one, by writing above it a direction for payment to a particular person.2 'Watervliet Bank v. White, 1 Denio, 608; see Mitchell v. Fuller, 15 Penn. St., 268; Walker v. Macdonald, 2 Exch., 527; Smith v. Clarke, 1 Esp. N. P., 180. 2 Crutchley v. Mann, 5 Taunt., 529. S1735. A special indorsement may, by express words for that purpose, but not otherwise, be so made as to render the instrument not negotiable. Leavitt v. Putnam, 3 N. Y., 494; Story on Notes, § 139. dorsement, what. General inhow made dorsement, special. Destruction tiability by of nego indorser. Implied warranty of indorser. Indorser, when liable to payee. S1736. Every indorser of a negotiable instrument warrants to every subsequent holder thereof, who is not liable thereon to him: 1. That it is in all respects what it purports to be;' 2. That he has a good title to it ;2 3. That the signatures of all prior parties are binding upon them ;3 4. That if the instrument is dishonored, the indorser will, upon notice thereof duly given to him,3 or without notice, where it is excused by law, pay so much of the same as the holder paid therefor, with interest; unless exonerated under the provisions of section 1786, 1824, or 1826. 1 McGregor v. Rhodes, 6 El. & Bl., 266. 6 Erwin v. Downs, 15 N. Y., 575; Troy City Bank v. Lauman, 19 id., 477. One who indorses an instrument, even after it is due, is not bound to pay it without a presentment to the principal debtor (St. John ". Roberts, 6 Bosw., 593). An indorser is bound to pay at once, after presentment, even where acceptance of a bill payable at a certain time after date is refused (Walker v. Bank of State of N. Y., 9 N. Y., 582). It is not a condition of an indorser's engagement that notice shall be given for his benefit to prior indorsers (Baker v. Morris, 25 Barb., 138). But he is discharged, if due notice is not given to him (Bryden v. Bryden, 11 Johns., 187). Suse v. Pompe, 8 C. B. [N. S.], 538. Cook v. Clark, 4 E. D. Smith, 213; Cram v. Hendricks, 7 Wend., 569, 642; Braman v. Hess, 13 Johns., 52; see Ingalls v. Lee, 9 Barb., 651. $1737. One who indorses a negotiable instrument before it is delivered to the payee, is liable to the payee thereon, as an indorser. This is the substance of the decision in Moore v. Cross, 19 N. Y., 227. But previous cases have so complicated the question that it is necessary to clear up the confusion by a positive rule. It has long been maintained that an indorser, before delivery to the payee, does not mean to be responsible to him, and though this doctrine is now overruled, yet the decision is put upon grounds that are needlessly technical. ment with course. S1738. An indorser may qualify his indorsement Indorse with the words, "without recourse," or equivalent out rewords; and upon such indorsement, he is responsible only to the same extent as in the case of a transfer without indorsement. Story on Notes, § 146; Rice v. Stearns, 3 Mass., 225; Upham v. Prince, 12 id., 14; Waite v. Foster, 33 Me., S1739. Except as otherwise prescribed by the last Id. section, an indorsement without recourse has the same effect as any other indorsement. Epler v. Funk, 8 Penn. St., 468. privy to S 1740. An indorsee of a negotiable instrument Indorsee has the same rights against every prior party thereto, contract. that he would have had if the contract had been made directly between them in the first instance. See Griswold v. Haven, 25 N. Y., 595; Polhill v. Walter, has rights S 1741. An indorser has all the rights of a guaran- Indorser tor, as defined by the chapter on GUARANTY IN of guaranGENERAL, and is exonerated from liability in like manner. Thus an extension of time granted to the principal debtor. S1742. One who indorses a negotiable instrument, at the request, and for the accommodation of another party to the instrument, has all the rights of a surety, as defined by the chapter on SURETYSHIP, and tor. Rights of tion accommoda indorser. Effect of want of con is exonerated in like manner, in respect to every one Bradford v. Corey, 5 Barb., 461; Ailsen v. Barkley, 2 S1743. The want of consideration for the undersideration. taking of a maker, acceptor, or indorser of a negotiable instrument, does not exonerate him from liability thereon to an indorsee in good faith for a consideration. Indorsee in due course, what. Seneca Co. Bank v. Neass, 3 N. Y., 442; 5 Denio, 329; Purchase v. Mattison, 6 Duer, 587; Ross v. Bedell, 5 id., 462; Robbins v. Richardson, 2 Bosw., 248. It is not necessary that a valuable consideration should be given by the indorsee (id). S1744. An indorsee in due course is one who, in good faith,' in the ordinary course of business, and for value, before its apparent maturity or presumptive dishonor, and without knowledge of its actual dishonor, acquires a negotiable instrument duly indorsed to him, or indorsed generally, or payable to the bearer. 1 Although it has been held in some cases that gross negligence deprives an indorsee of the protection otherwise afforded to him (Pringle v. Phillips, 5 Sandf., 157; Merriam v. Granite Bank, 8 Gray, 254; Gill v. Cubitt, 3 B. & C., 466; Down v. Halling, 4 id., 330; Roth v. Colvin, 32 Vt., 125; Smith v. Mech. & Farm. Bk., 6 La. Ann., 610); the contrary rule is now firmly settled in England, and good faith alone declared to be the test. Negligence may be evidence of bad faith, but it is not conclusive (Raphael v. Bank of England, 17 C. B., 161; Goodman v. Harvey, 4 Ad. & El., 870; Foster v. Pearson, 1 C., M. & R., 849; Crook v. Jadis, 5 B. & Ad., 909; Uther v. Rich, 10 Ad. & El., 784; Bank of Bengal v. Fagan, 7 Moore P. C., 72; Carlon v. Ireland, 5 E. & B., 771). This ruling is followed by the latest decisions in this state (Steinhart v. Boker, 34 Barb., 436; see Magee . Badger, 30 id., 246). See Meads v. Merchants' Bank, 25 N. Y., 143, 147; For a definition of "value," and "good faith," see Part This phrase is adopted to avoid much circumlocution. Anderson v. Busteed, 5 Duer, 485. S1745. An indorsee of a negotiable instrument, in due course, acquires an absolute title thereto, so that it is valid in his hands, notwithstanding any provision of law making it generally void or voidable,' and notwithstanding any defect in the title of the person from whom he acquired it.2 'This is an old rule as to bills void by the common law (Rockwell v. Charles, 2 Hill, 499; Norris v. Langley, 19 N. H., 423; Johnson v. Meeker, 1 Wis., 436; see Bank of Genesee v. Patchin Bank, 19 N. Y., 312); but it is otherwise as to bills void by statute (Vallett v. Parker, 6 Wend., 615; Rockwell v. Charles, 2 Hill, 499). The rule is established in England, by statute. This is too well settled to need a citation of authorities. Moreover, an indorsee in due course can give a perfect title to any person whether the latter acts in good faith or not. Thus, if A. obtains a promissory note by fraud, and indorses it to B. for value, B. acting in good faith, a perfect title to the note may be vested in A., notwithstanding his fraud, by a subsequent transfer from B. (Solomons v. Bank of England, 13 East, 135; Hascall v. Whitmore, 19 Me., 104; Thomas v. Newton, 2 Carr. & P., 606). For if an indorsee could not freely dispose of his property, selling it to whom he pleased, its value would be diminished in his hands. But if A. takes up the note as an indorser, upon its dishonor, he does not acquire a better title than he had at first (Devlin v. Brady, 32 Barb., 518). Rights of indorsee in due course. left blank. S1746. One who makes himself a party to an instru- Instrument ment intended to be negotiable, but which is left wholly or partly in blank, for the purpose of filling afterwards, is liable upon the instrument to an indorsee thereof in due course, in whatever manner |