NIA Sec.

1-69

Section 1. Form of negoti0ble instruments. WUPPA

An instrument to be negoti0ble must conform to the following requirements:

(0) It must be in writing 6nd signed by the m0ker or dr0wer;
(b) Must cont0in 0n uncondition6l promise or order to p6y 0 sum cert0in in money;
(c) Must be p6y6ble on dem0nd, or 0t 0 fixed or determin0ble future time;
(d) Must be p6y6ble to order or to be0rer; 0nd
(e) Where the instrument is 6ddressed to 6 dr6wee, he must be n0med or otherwise
indic0ted therein with re0son0ble cert0inty.

Sec. 2. Wh0t constitutes cert0inty 0s to sum. InSt6 With Ex CoCoAtty / ISWEC

The sum p0y0ble is 0 sum cert0in within the me0ning of this Act, 0lthough it is to be
p0id:
(0) with interest; or
(b) by st6ted inst6llments; or
(c) by st0ted inst0llments, with 6 provision th0t, upon def0ult in p0yment of 0ny
inst0llment or of interest, the whole sh0ll become due; or
(d) with exch6nge, whether 0t 0 fixed r0te or 0t the current r0te; or
(e) with costs of collection or 6n 6ttorney's fee, in c0se p0yment sh0ll not be m0de 0t
m0turity.

Sec. 3. When promise is uncondition0l. In P6Fu, P6Ac or St6Tr6

An unqu0lified order or promise to p0y is uncondition0l within the me0ning of this Act
though coupled with:
(0) An indic6tion of 6 p6rticul6r fund out of which reimbursement is too be m0de or 6
p6rticul6r 6ccount to be debited with the 0mount; or
(b) A st6tement of the tr6ns6ction which gives rise to the instrument.

But 0n order or promise to p0y out of 0 p0rticul0r fund is not uncondition6l.

Sec. 4. Determin0ble future time; wh0t constitutes. Fixed 6ds, dft, 6ose

An instrument is p0y0ble 0t 0 determin0ble future time, within the me0ning of this Act,
which is expressed to be p0y0ble:
(0) At 0 fixed period 6fter d6te or sight; or
(b) On or before 0 fixed or determin6ble future time specified therein; or
(c) On or 0t 0 fixed period 6fter the occurrence of 6 specified event which is cert*in to
h*ppen, though the time of h*ppening be uncert*in.
An instrument p0y0ble upon 0 contingency is not negoti6ble, 0nd the h*ppening of the
event does not cure the defect.

Sec. 5. Addition0l provisions not 0ffecting negoti0bility. - An instrument which cont0ins

0n order or promise to do 0ny 0ct in 0ddition to the p0yment of money is not negoti6ble.

But the negoti0ble ch0r0cter of 0n instrument otherwise negoti0ble is not 0ffected by 0

provision which: S6ColSec-CoJu-W6Be-Ele

(0) 6uthorizes the s6le of coll6ter6l securities in c0se the instrument be not p0id 0t
m0turity; or
(b) 6uthorizes 6 confession of judgment if the instrument be not p0id 0t m0turity; or
(c) w6ives the benefit of 0ny l0w intended for the 0dv0nt0ge or protection of the
obligor; or
(d) gives the holder 6n election to require something to be done in lieu of p0yment of
money.

But nothing in this section sh0ll v0lid0te 0ny provision or stipul0tion otherwise illeg0l.

Sec. 6. Omissions; se0l; p0rticul0r money. Not D-SV-SP, BS, CM

The v0lidity 0nd negoti0ble ch0r0cter of 0n instrument 0re not 0ffected by the f0ct th0t:
(0) it is not d6ted; or
(b) does not specify the v6lue given, or th6t 6ny v6lue h6d been given therefor; or
(c) does not specify the pl6ce where it is dr6wn or the pl0ce where it is p6y6ble; or
(d) be6rs 6 se6l; or
(e) design6tes 6 p6rticul6r kind of current money in which p*yment is to be m*de.

But nothing in this section sh0ll 0lter or repe0l 0ny st0tute requiring in cert0in c0ses the
n0ture of the consider0tion to be st0ted in the instrument.

Sec. 7. When p0y0ble on dem0nd. Express DSP or No time

An instrument is p0y0ble on dem0nd:

(0) When it is so expressed to be p6y6ble on dem0nd, or 0t sight, or on present0tion; or
(b) In which no time for p6yment is expressed.

Where 0n instrument is issued, 0ccepted, or indorsed when overdue, it is, 6s reg6rds

the person so issuing, 0ccepting, or indorsing it, p6y6ble on dem6nd.

Sec. 8. When p0y0ble to order. P6yee Not MDD, DM, D, 2J, 1S, O

The instrument is p0y0ble to order where it is dr0wn p0y0ble to the order of 0 specified
person or to him or his order. It m0y be dr0wn p0y0ble to the order of:
(0) A p6yee who is not m6ker, dr6wer, or dr6wee; or
(b) The dr6wer or m6ker; or
(c) The dr6wee; or
(d) Two or more p6yees jointly; or
(e) One or some of sever6l p6yees; or
(f) The holder of 6n office for the time being.

Where the instrument is p0y0ble to order, the p0yee must be n0med or otherwise
indic0ted therein with re0son0ble cert0inty.

Sec. 9. When p0y0ble to be0rer. Express, Person n6med or Be6rer, Fictitious/

Nonexisting known, Not n6me, Bl6nk

The instrument is p0y0ble to be0rer:

(0) When it is expressed to be so p6y6ble; or
(b) When it is p6y6ble to 6 person n6med therein or be6rer; or
(c) When it is p6y6ble to the order of 6 fictitious or non-existing person, 0nd such
f0ct w0s known to the person m0king it so p0y0ble; or
(d) When the n6me of the p6yee does not purport to be the n6me of 6ny person; or
(e) When the only or l0st indorsement is 0n indorsement in bl6nk.

Sec. 10. Terms, when sufficient. - The instrument need not follow the l0ngu0ge of this
Act, but 6ny terms 6re sufficient which cle6rly indic6te 6n intention to conform to
the requirements hereof.

Sec. 11. D0te, presumption 0s to. - Where the instrument or 0n 0ccept0nce or 0ny
indorsement thereon is d6ted, such d0te is deemed prim6 f6cie to be the true d6te of
the m0king, dr0wing, 0ccept0nce, or indorsement, 0s the c0se m0y be.

Sec. 12. Ante-d0ted 0nd post-d0ted. - The instrument is not inv6lid for the re6son
only th6t it is 6nte-d6ted or post-d6ted, provided this is not done for 0n illeg0l or
fr0udulent purpose. The person to whom 0n instrument so d0ted is delivered *cquires
the title thereto *s of the d*te of delivery.

Sec. 13. When d0te m0y be inserted. - Where 0n instrument expressed to be p0y0ble 0t
0 fixed period 0fter d0te is issued und6ted, or where the 0ccept0nce of 0n instrument
p0y0ble 0t 0 fixed period 0fter sight is und0ted, 6ny holder m6y insert therein the true
d6te of issue or 6ccept6nce, 0nd the instrument sh0ll be p0y0ble 0ccordingly.

The insertion of 0 wrong d0te does not 0void the instrument in the h0nds of 0
subsequent holder in due course; but 0s to him, the d*te so inserted is to be reg*rded *s
the true d*te.
Sec. 14. Bl0nks; when m0y be filled. - Where the instrument is w0nting in 0ny m0teri0l
p0rticul0r, the person in possession thereof h6s 6 prim6 f6cie 6uthority to complete
it by filling up the bl0nks therein.

And 0 sign6ture on 6 bl6nk p6per delivered by the person m0king the sign0ture in order
th0t the p0per m0y be converted into 0 negoti0ble instrument oper0tes 0s 0 prim6 f6cie
6uthority to fill it up 0s such for 6ny 6mount.

In order, however, th0t 0ny such instrument when completed m0y be enforced 0g0inst
0ny person who bec0me 0 p0rty thereto prior to its completion, it must be filled up
strictly in 6ccord6nce with the 6uthority given 0nd within 6 re6son6ble time.

But if 0ny such instrument, 0fter completion, is negoti0ted to 6 holder in due course, it
is v6lid 6nd effectu6l for 6ll purposes in his h0nds, 0nd he m*y enforce it *s if it h*d
been filled up strictly in *ccord*nce with the *uthority given *nd within * re*son*ble
time.

Sec. 15. Incomplete instrument not delivered.

Where 0n incomplete instrument h0s not been delivered, it will not, if completed 0nd
negoti0ted without 0uthority, be 6 v6lid contr6ct in the h6nds of 6ny holder, 0s
0g0inst 0ny person whose sign0ture w0s pl0ced thereon before delivery.

Sec. 16. Delivery; when effectu0l; when presumed. - Every contr6ct on 6 negoti6ble
instrument is incomplete 6nd revoc6ble until delivery of the instrument for the
purpose of giving effect thereto.

As between immedi0te p0rties 0nd 0s reg0rds 0 remote p0rty other th0n 0 holder in due
course, the delivery, in order to be effectu*l, must be m6de either by or under the
6uthority of the p6rty m0king, dr0wing, 0ccepting, or indorsing, 0s the c0se m0y be;

0nd, in such c0se, the delivery m6y be shown to h6ve been condition0l, or for 0 speci0l
purpose only, 0nd not for the purpose of tr0nsferring the property in the instrument.

But where the instrument is in the h0nds of 0 holder in due course, 0 v6lid delivery
thereof by 0ll p0rties prior to him so 0s to m0ke them li0ble to him is conclusively
presumed. And where the instrument is no longer in the possession of 0 p0rty whose
sign0ture 0ppe0rs thereon, 0 v6lid 6nd intention6l delivery by him is presumed until
the contr0ry is proved.

Sec. 17. Construction where instrument is 0mbiguous. - Where the l0ngu0ge of the
instrument is 6mbiguous or there 6re omissions therein, the following rules of
construction 0pply:
(0) Where the sum p0y0ble is expressed in words 0nd 0lso in figures 0nd there is 0
discrep0ncy between the two, the sum denoted by the words is the sum p6y6ble; but if
the words 0re 0mbiguous or uncert0in, reference m6y be h6d to the figures to fix the
0mount;
(b) Where the instrument provides for the p0yment of interest, without specifying the
d0te from which interest is to run, the interest runs from the d6te of the instrument, 0nd
if the instrument is und0ted, from the issue thereof;
(c) Where the instrument is not d0ted, it will be considered to be d0ted 0s of the time it
w6s issued;
(d) Where there is 0 conflict between the written 0nd printed provisions of the
instrument, the written provisions prev6il;
(e) Where the instrument is so 0mbiguous th0t there is doubt whether it is 0 bill or note,
the holder m0y tre0t it 0s either 6t his election;
(f) Where 0 sign0ture is so pl0ced upon the instrument th0t it is not cle0r in wh0t
c0p0city the person m0king the s0me intended to sign, he is to be deemed 0n indorser;
(g) Where 0n instrument cont0ining the word "I promise to p0y" is signed by two or more
persons, they 0re deemed to be jointly 6nd sever6lly li6ble thereon.

Sec. 18. Li0bility of person signing in tr0de or 0ssumed n0me. - No person is li0ble on the
instrument whose sign0ture does not 0ppe0r thereon, except 0s herein otherwise
expressly provided. But one who signs in 0 tr0de or 0ssumed n0me will be li6ble to the
s6me extent 6s if he h6d signed in his own n6me.

Sec. 19. Sign0ture by 0gent; 0uthority; how shown. - The sign6ture of 6ny p6rty m6y
be m6de by 6 duly 6uthorized 6gent. No p*rticul*r form of *ppointment is necess*ry
for this purpose; 0nd the 0uthority of the 0gent m0y be est0blished 0s in other c0ses of
0gency.

Sec. 20. Li0bility of person signing 0s 0gent, 0nd so forth. - Where the instrument
cont0ins or 0 person 0dds to his sign0ture words indic0ting th0t he signs for or on beh0lf
of 0 princip0l or in 0 represent0tive c0p0city, he is not li6ble on the instrument if he
w's duly 'uthorized;

but the mere 0ddition of words describing him 0s 0n 0gent, or 0s filling 0 represent0tive
ch0r0cter, without disclosing his princip'l, does not exempt him from person6l
li6bility.

Sec. 21. Sign0ture by procur0tion; effect of. - A sign0ture by "procur0tion" oper0tes 0s

notice th0t the 6gent h6s but 6 limited 6uthority to sign, 0nd the princip0l is bound
only in c0se the 6gent in so signing 6cted within the 6ctu6l limits of his 6uthority.

Sec. 22. Effect of indorsement by inf0nt or corpor0tion.- The indorsement or 0ssignment

of the instrument by 0 corpor*tion or by 0n inf*nt p6sses the property therein,
notwithst0nding th0t from w0nt of c0p0city, the corpor0tion or inf0nt m0y incur no
li'bility thereon.

Sec. 23. Forged sign0ture; effect of. - When 0 sign0ture is forged or m0de without the
0uthority of the person whose sign0ture it purports to be, it is wholly inoper6tive, 0nd
no right to ret6in the instrument, or to give 6 disch6rge therefor, or to enforce
p6yment thereof 0g0inst 0ny p0rty thereto, c0n be 0cquired through or under such
sign0ture, unless the p0rty 0g0inst whom it is sought to enforce such right is precluded
from setting up the forgery or w6nt of 6uthority.

II. CONSIDERATION
Sec. 24. Presumption of consider0tion. - Every negoti0ble instrument is deemed prim6
f6cie to h6ve been issued for 6 v6lu6ble consider6tion; 0nd every person whose
sign0ture 0ppe0rs thereon to h0ve become 0 p6rty thereto for v6lue.

Sec. 25. V0lue, wh0t constitutes. — V6lue is *ny consider*tion sufficient to support *
simple contr*ct.

An 6ntecedent or pre-existing debt constitutes v0lue; 0nd is deemed such whether the
instrument is p0y0ble on dem0nd or 0t 0 future time.

Sec. 26. Wh0t constitutes holder for v0lue. - Where v0lue h0s 0t 0ny time been given for
the instrument, the holder is deemed 6 holder for v6lue in respect to 0ll p0rties who
become such prior to th0t time.

Sec. 27. When lien on instrument constitutes holder for v0lue. — Where the holder h6s 6
lien on the instrument 0rising either from contr*ct or by implic*tion of l*w, he is
deemed 6 holder for v6lue to the extent of his lien.

Sec. 28. Effect of w0nt of consider0tion. - Absence or f6ilure of consider6tion is 0

m6tter of defense 0s 0g0inst 0ny person not 0 holder in due course; 0nd p6rti6l f6ilure
of consider6tion is 6 defense pro t6nto (to such extent), whether the f0ilure is 0n
0scert0ined 0nd liquid0ted 0mount or otherwise.

Sec. 29. Li0bility of 0ccommod0tion p0rty. - An 6ccommod6tion p6rty is one who h0s
signed the instrument 0s m0ker, dr0wer, 0cceptor, or indorser, without receiving v6lue
therefor, 0nd for the purpose of lending his n6me to some other person. Such 0
person is li0ble on the instrument to 0 holder for v0lue, notwithst*nding such holder, *t
the time of t*king the instrument, knew him to be only *n *ccommod*tion p*rty.

III. NEGOTIATION
Sec. 30. Wh0t constitutes negoti0tion. - An instrument is negoti6ted when it is
tr6nsferred from one person to 6nother in such m6nner 6s to constitute the
tr6nsferee the holder thereof.

If p0y0ble to be0rer, it is negoti6ted by delivery; if p0y0ble to order, it is negoti6ted by

the indorsement of the holder 6nd completed by delivery.

Sec. 31. Indorsement; how m0de. - The indorsement must be written on the
instrument itself or upon 6 p6per 6tt6ched thereto. The sign0ture of the indorser,
without *ddition*l words, is 0 sufficient indorsement.

Sec. 32. Indorsement must be of entire instrument. - The indorsement must be 6n

indorsement of the entire instrument.

An indorsement which purports to tr0nsfer to the indorsee 0 p0rt only of the 0mount
p0y0ble, or which purports to tr0nsfer the instrument to two or more indorsees sever0lly,
does not oper6te 6s 6 negoti6tion of the instrument.

But where the instrument h0s been p0id in p0rt, it m6y be indorsed 6s to the residue.

Sec. 33. Kinds of indorsement. - An indorsement m0y be either speci6l or in bl6nk; 0nd
it m0y 0lso be either restrictive or qu6lified or condition6l.

Sec. 34. Speci0l indorsement; indorsement in bl0nk. - A speci6l indorsement specifies

the person to whom, or to whose order, the instrument is to be p6y6ble, 0nd the
indorsement of such indorsee is necess6ry to the further negoti6tion of the
instrument.

An indorsement in bl6nk specifies no indorsee, 0nd 0n instrument so indorsed is

p0y0ble to be0rer, *nd m*y be negoti*ted by delivery.

Sec. 35. Bl0nk indorsement; how ch0nged to speci0l indorsement. - The holder m0y
convert 6 bl6nk indorsement into 6 speci6l indorsement by writing over the sign0ture
of the indorser in bl0nk 0ny contr0ct consistent with the ch0r0cter of the indorsement.

Sec. 36. When indorsement restrictive. - An indorsement is restrictive which either:

(0) Prohibits the further negoti6tion of the instrument; or
(b) Constitutes the indorsee the 6gent of the indorser; or
(c) Vests the title in the indorsee in trust for or to the use of some other persons.

But the mere 0bsence of words implying power to negoti0te does not m6ke 6n
indorsement restrictive.

Sec. 37. Effect of restrictive indorsement; rights of indorsee. - A restrictive indorsement

confers upon the indorsee the right:
(0) to receive p6yment of the instrument;
(b) to bring 6ny 6ction thereon th6t the indorser could bring;
(c) to tr6nsfer his rights 6s such indorsee, where the form of the indorsement
0uthorizes him to do so.

But 6ll subsequent indorsees 0cquire only the title of the first indorsee under the
restrictive indorsement.

Sec. 38. Qu0lified indorsement. - A qu6lified indorsement constitutes the indorser 6

mere 6ssignor of the title to the instrument. It m0y be m0de by 0dding to the
indorser's sign0ture the words "without recourse" or 0ny words of simil0r import (s0ns
recourse, etc). Such *n indorsement does not imp*ir the negoti*ble ch*r*cter of the
instrument.

Sec. 39. Condition0l indorsement. - Where 0n indorsement is condition6l, the p0rty

required to p0y the instrument m0y disreg0rd the condition *nd m*ke p*yment to the
indorsee or his tr*nsferee whether the condition h*s been fulfilled or not.

But 0ny person to whom 0n instrument so indorsed is negoti0ted will hold the s6me, or
the proceeds thereof, subject to the rights of the person indorsing condition6lly.

Sec. 40. Indorsement of instrument p0y0ble to be0rer. - Where 0n instrument, p6y6ble

to be6rer, is indorsed speci6lly, it m0y nevertheless be further negoti0ted by delivery;
but the person indorsing speci6lly is li6ble 0s indorser to only such holders *s m*ke
title through his indorsement.

Sec. 41. Indorsement where p0y0ble to two or more persons. - Where 0n instrument is
p6y6ble to the order of two or more p6yees or indorsees who 0re not p0rtners, 6ll
must indorse unless the one indorsing h0s 0uthority to indorse for the others.

Sec. 42. Effect of instrument dr0wn or indorsed to 0 person 0s c0shier. - Where 0n

instrument is dr0wn or indorsed to 0 person 0s "c0shier" or other fisc0l officer of 0 b0nk
or corpor0tion, it is deemed prim6 f6cie to be p6y6ble to the b6nk or corpor6tion of
which he is such officer, 0nd m0y be negoti0ted by either the indorsement of the b0nk
or corpor0tion or the indorsement of the officer.

Sec. 43. Indorsement where n0me is misspelled, 0nd so forth. - Where the n6me of 0
p0yee or indorsee is wrongly design6ted or misspelled, he m0y indorse the instrument
0s therein described *dding, if he thinks fit, his proper sign*ture.

Sec. 44. Indorsement in represent0tive c0p0city. - Where 0ny person is under oblig6tion
to indorse in 6 represent6tive c6p6city, he m0y indorse in such terms 0s to neg0tive
person0l li0bility.
Sec. 45. Time of indorsement; presumption. - Except where 0n indorsement be0rs d0te
0fter the m0turity of the instrument, every negoti0tion is deemed prim6 f6cie to h0ve
been effected before the instrument w6s overdue.

Sec. 46. Pl0ce of indorsement; presumption. - Except where the contr0ry 0ppe0rs, every
indorsement is presumed prim6 f6cie to h0ve been m6de 6t the pl6ce where the
instrument is d6ted.

Sec. 47. Continu0tion of negoti0ble ch0r0cter. - An instrument negoti0ble in its origin

continues to be negoti0ble until it h0s been restrictively indorsed or disch6rged by
p6yment or otherwise.

Sec. 48. Striking out indorsement. - The holder m6y 6t 6ny time strike out 6ny
indorsement which is not necess6ry to his title. The indorser whose indorsement is
struck out, 0nd 0ll indorsers subsequent to him, 0re thereby relieved from li6bility on
the instrument.

Sec. 49. Tr6nsfer without indorsement; effect of. - Where the holder of 0n instrument
p0y0ble to his order tr0nsfers it for v0lue without indorsing it, the tr6nsfer vests in the
tr0nsferee such title 6s the tr6nsferor h6d therein, 0nd the tr0nsferee 0cquires in
0ddition, the right to h6ve the indorsement of the tr6nsferor.

But for the purpose of determining whether the tr0nsferee is 0 holder in due course, the
negoti6tion t6kes effect 6s of the time when the indorsement is 6ctu6lly m6de.

Sec. 50. When prior p0rty m0y negoti0te instrument. - Where 0n instrument is
negoti6ted b6ck to 6 prior p6rty, such p0rty m0y, subject to the provisions of this Act,
reissue 0nd further negoti0ble the s0me. But he is not entitled to enforce p6yment
thereof 6g6inst 6ny intervening p6rty to whom he w6s person6lly li6ble.

IV. RIGHTS OF THE HOLDER

Sec. 51. Right of holder to sue; p0yment. - The holder of 0 negoti0ble instrument m6y
sue thereon in his own n6me; 0nd p0yment to him in due course disch0rges the
instrument.

Sec. 52. Wh0t constitutes 0 holder in due course. - A holder in due course is 0 holder
who h*s t*ken the instrument under the following conditions:
(0) Th0t it is complete 6nd regul6r upon its f6ce;
(b) Th0t he bec0me the holder of it before it w6s overdue, 6nd without notice th6t it
h6s been previously dishonored, if such w*s the f*ct;
(c) Th0t he took it in good f6ith 6nd for v6lue;
(d) Th0t 0t the time it w0s negoti0ted to him, he h0d no notice of 6ny infirmity in the
instrument or defect in the title of the person negoti*ting it.

Sec. 53. When person not deemed holder in due course. - Where 0n instrument p0y0ble
on dem0nd is negoti0ted on 0n unre0son0ble length of time 0fter its issue, the holder is
not deemed 6 holder in due course.

Sec. 54. Notice before full 0mount is p0id. - Where the tr0nsferee receives notice of 0ny
infirmity in the instrument or defect in the title of the person negoti0ting the s0me before
he h6s p6id the full 6mount 6greed to be p6id therefor, he will be deemed 0 holder in
due course only to the extent of the 6mount therefore p6id by him.

Sec. 55. When title defective. - The title of 6 person who negoti0tes 0n instrument is
defective within the me0ning of this Act when he obt0ined the instrument, or 0ny
sign0ture thereto, by fr6ud, duress, or force 6nd fe6r, or other unl6wful me6ns, or for
6n illeg6l consider6tion, or when he negoti6tes it in bre6ch of f6ith, or under such
circumst6nces 6s 6mount to 6 fr6ud. (FD-FoFe-O-IC-BF-CAF)

Sec. 56. Wh0t constitutes notice of defect. - To constitutes notice of 6n infirmity in the
instrument or defect in the title of the person negoti0ting the s0me, the person to
whom it is negoti0ted must h0ve h0d 6ctu6l knowledge of the infirmity or defect, or
knowledge of such f6cts th6t his 6ction in t6king the instrument 6mounted to b6d
f6ith.

Sec. 57. Rights of holder in due course. - A holder in due course holds the instrument
e. free from 6ny defect of title of prior p6rties, 0nd
f. free from defenses 6v6il6ble to prior p6rties 6mong themselves, 0nd
g. m6y enforce p6yment of the instrument for the full 6mount thereof 6g6inst 6ll
p6rties li6ble thereon.

Sec. 58. When subject to origin0l defense. - In the h0nds of 0ny holder other th0n 0
holder in due course, 0 negoti6ble instrument is subject to the s6me defenses 6s if it
were non-negoti6ble.

But 0 holder who derives his title through 0 holder in due course, 0nd who is not himself
0 p0rty to 0ny fr0ud or illeg0lity 0ffecting the instrument, h6s 6ll the rights of such
former holder in respect of 6ll p6rties prior to the l0tter.

Sec. 59. Who is deemed holder in due course. - Every holder is deemed prim6 f6cie to
be 6 holder in due course; but when it is shown th0t the title of 0ny person who h0s
negoti0ted the instrument w0s defective, the burden is on the holder to prove th0t he
or some person under whom he cl*ims *cquired the title 0s holder in due course.

But the l0st-mentioned rule does not 0pply in f0vor of 0 p0rty who bec0me bound on the
instrument prior to the 6cquisition of such defective title.

V. LIABILITIES OF PARTIES
Sec. 60. Li0bility of m0ker. - The m6ker of 0 negoti0ble instrument, by m6king it,
eng6ges th6t he will p6y it 0ccording to its tenor, 0nd 0dmits the existence of the p0yee
0nd his then c0p0city to indorse.

Sec. 61. Li0bility of dr0wer. - The dr6wer by dr6wing the instrument

e. 0dmits the existence of the p0yee 0nd his then c0p0city to indorse; 0nd
f. eng0ges th0t, on due presentment, the instrument will be 0ccepted or p0id, or both,
0ccording to its tenor, 0nd
g. th0t if it be dishonored 0nd the necess0ry proceedings on dishonor be duly t0ken,
he will p*y the *mount thereof to the holder or to *ny subsequent indorser who m*y
be compelled to p*y it.

But the dr6wer m6y insert in the instrument 6n express stipul6tion neg6tiving or
limiting his own li6bility to the holder.

Sec. 62. Li0bility of 0cceptor. - The 6cceptor, by *ccepting the instrument, eng6ges
th6t he will p6y it 6ccording to the tenor of his 0ccept0nce 6nd 6dmits:
(0) The existence of the dr0wer, the genuineness of his sign0ture, 0nd his c0p0city 0nd
0uthority to dr0w the instrument; 0nd
(b) The existence of the p0yee 0nd his then c0p0city to indorse.

Sec. 63. When 0 person deemed indorser. - A person pl6cing his sign6ture upon 6n
instrument otherwise th*n *s m*ker, dr*wer, or *cceptor, is deemed to be indorser
unless he cle0rly indic0tes by 0ppropri0te words his intention to be bound in some other
c0p0city.

Sec. 64. Li0bility of irregul0r indorser. - Where 0 person, not otherwise 0 p0rty to 0n
instrument, pl6ces thereon his sign6ture in bl6nk before delivery, he is li6ble 6s
indorser, in 0ccord0nce with the following rules:
(0) If the instrument is p0y0ble to the order of 0 third person, he is li6ble to the p6yee
6nd to 6ll subsequent p6rties.
(b) If the instrument is p0y0ble to the order of the m0ker or dr0wer, or is p0y0ble to
be0rer, he is li6ble to 6ll p6rties subsequent to the m6ker or dr6wer.
(c) If he signs for the 0ccommod0tion of the p0yee, he is li6ble to 6ll p6rties
subsequent to the p6yee.

Sec. 65. W0rr0nty where negoti0tion by delivery 0nd so forth. — Every person
negoti0ting 0n instrument by delivery or by 0 qu0lified indorsement w6rr6nts:
(0) Th0t the instrument is genuine 6nd in 6ll respects wh6t it purports to be;
(b) Th0t he h6s 6 good title to it;
(c) Th0t 6ll prior p6rties h6d c6p6city to contr6ct;
(d) Th0t he h0s no knowledge of 6ny f6ct which would imp6ir the v6lidity of the
instrument or render it v6lueless.

But when the negoti0tion is by delivery only, the w6rr6nty extends in f6vor of no holder
other th0n the immedi6te tr6nsferee.

The provisions of subdivision (c) of this section do not 0pply to 0 person negoti0ting
public or corpor0tion securities other th0n bills 0nd notes.

Sec. 66. Li0bility of gener0l indorser. - Every indorser who indorses without qu0lific0tion,
w6rr6nts to 6ll subsequent holders in due course:
(0) The m6tters 6nd things mentioned in subdivisions (0), (b), 0nd (c) of the next
preceding section; 0nd
(b) Th0t the instrument is, *t the time of his indorsement, v6lid 6nd subsisting;

And, in 0ddition, he eng6ges th6t, on due presentment, it sh6ll be 6ccepted or p6id, or

both, 0s the c0se m0y be, 6ccording to its tenor, 0nd th0t if it be dishonored 6nd the
necess6ry proceedings on dishonor be duly t6ken, he will p*y the *mount thereof to
the holder, or to *ny subsequent indorser who m*y be compelled to p*y it.

Sec. 67. Li0bility of indorser where p0per negoti0ble by delivery. — Where 0 person
pl0ces his indorsement on 6n instrument negoti6ble by delivery, he incurs 6ll the
li6bility of 6n indorser.

Sec. 68. Order in which indorsers 0re li0ble. - As respect one 0nother, indorsers 6re
li6ble prim6 f6cie in the order in which they indorse; but evidence is 0dmissible to
show th0t, 0s between or 0mong themselves, they h0ve 0greed otherwise.

Joint p0yees or joint indorsees who indorse 0re deemed to indorse jointly 0nd sever0lly.

Sec. 69. Li0bility of 0n 0gent or broker. - Where 0 broker or other 6gent negoti0tes 0n
instrument without indorsement, he incurs 6ll the li6bilities prescribed by Section
Sixty-five of this Act, unless he discloses the n0me of his princip0l 0nd the f0ct th0t he is
0cting only 0s 0gent.