THE CENTURY BOOK OF FACTS. 



lawful money. (4) That the promise be with- 

 out conditions. (5) That it contain the words 

 " order "or " bearer," or other words show- 

 ing the intention to make it negotiable. 



Indorsement : A note is indorsed when any- 

 thing relating to it is written upon the back. 

 The writer of the name is called the indorser, 

 and the person for whose benefit it is written 

 is the indorsee. 



There are five kinds of indorsements : (1) 

 In full. (2) In blank. (3) Conditional. (4) 

 Qualified. (5) Restrictive. 



1 . In full : When the name of the indorsee 

 is mentioned, when none but he can demand 

 payment. If he wishes to transfer it he must 

 add his own indorsement in writing. This is 

 the usual form and shows through what hands 

 it passes. 



2. In blank: Indorsement in blank consists 

 of the indorser's name alone. It is then pay- 

 able to bearer, and is transferred by simple 

 delivery from hand to hand. The indorser in 

 full or in blank is obligated to any subsequent 

 holder if the maker does not pay it, and the in- 

 dorser is given due notice of such failure. 



3. Conditional: When the payment is made 

 conditional upon some uncertain event. 



4. Qualified: When the usual form is de- 

 parted from and the indorser restrains, limits, 

 or enlarges his liability as such. 



An indorsement ' < without recourse to me ' ' 

 transfers the title and releases the indorser 

 from any liability. The exact words used do 

 not matter if they show the intention to avoid 

 responsibility. 



When acting for another party the words 

 "agent," "attorney," or their equivalent 

 will release, if added to the indorsement, the 

 said agent from personal responsibility. 



5. Restrictive: When the indorsement re- 

 strains the negotiability to some certain person 

 as, " Pay to John Doe only," or " Pay John 

 Doe for my account." 



Transfer. An indorsement to bearer is trans- 

 ferred by delivery ; or, if indorsed in blank, it 

 can be done in the same way by the indorsee, 

 though drawn payable to order. 



1 . Before maturity an innocent purchaser can 

 enforce the collection of a note, even if it be 

 found to have been lost, stolen, or obtained 

 by fraud. Five things are necessary : (1) 

 That he obtained it in good faith. (2) That 

 he was not aware of any defect in the title of 

 the one from whom he obtained it. (3) That 

 it be negotiable. (4) That it was obtained 

 for value. (5) That it was obtained before 

 maturity. Should he be aware of any defect in 

 the title at the time of obtaining it, he takes 

 it subject to any defense that could be legally 

 brought against it at first. 



2. After maturity : A note may still be nego 

 tiable, but the purchaser now takes it subject 

 to any defense originally existing. 



Demand. No demand is necessary to hold 

 the maker. For the purpose of holding those 

 conditionally liable, a demand must be made 

 first on those primarily liable. 



1 . Notes should be presented for payment 

 by the holder or his authorized agent. 



2. Demand should be made on the maker, or, 

 in his absence, on his authorized agent. 



3. To hold indorser, the demand must be 

 made on the very day of maturity, no sooner, 

 no later. 



4. If no place of payment is specified in the 

 note, it must be presented at the residence or 

 place of business of the maker, and during 

 regular business hours. A personal demand is 

 not necessary when the place of payment is 

 specified. It is sufficient if the note be sent 

 there in due time. 



Law of Place When given in one State 



and payable in another, it will be governed by 

 the laws of the State where payable, in the 

 matter of interest, if the rate is not men- 

 tioned. The "law merchant" is, that the 

 maker is bound by the laws of the place where 

 made ; the indorser by the law where indorsed ; 

 demand, days of grace, etc., by the laws where 

 payable. 



Payment. Possession is presumptive evi- 

 dence of title on paper drawn or indorsed, pay- 

 able to bearer, and payment may be made to 

 the one presenting it. Before paying, the 

 maker should be careful that any indorsements 

 are genuine, and that the title is properly 

 transferred. Payment by an indorser satisfies 

 only so far as the subsequent indorsers are 

 concerned, for the note is not discharged until 

 paid by the maker. After an indorser has paid 

 a dishonored note, he may put it in circulation 

 again. 



The holder takes his title from the frst in- 

 dorser if made in blank or is a general in- 

 dorsement, and the maker is protected in 

 making payment to him. 



Non-payment. If the only parties con- 

 cerned are the original ones, demand need not 

 be made at maturity. The whole object of 

 demand, protest, and notice of non-payment 

 is to hold the indorsers or others conditionally 

 liable. 



Protest A protest is a formal statement 



made by a notary public, giving a copy or 

 description of the note, stating that pay- 

 ment has been demanded and refused, giving 

 reason of refusal, if any, and the purpose 

 and object of the protest. The protest must 

 be made by the notary personally, and duly 

 signed and sealed. 



