Article 8p. 8

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

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.

SECTION 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 a

prima facie authority to fill it up as such for any amount.

In

order,

however,

that

any

such

instrument when

completed may be enforced against any person who

became a party thereto prior to its completion, it must be

filled up strictly in accordance with the authority given

and within a reasonable time. But if any such instrument,

after completion, is negotiated to a holder in due course,

it is valid and effectual for all purposes in his hands, and

he may enforce it as if it had been filled up strictly in

accordance

with

the

authority

given

and

within

a

reasonable time.

SECTION 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.

SECTION 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. cdrp

SECTION

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 discrepancy between the two, the

sum denoted by the words is the sum payable; but if the

words are ambiguous or uncertain, reference may be had

to the figures to fix the amount;

(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 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 word "I promise

to pay" is signed by two or more persons, they are

deemed to be jointly and severally liable thereon. cdasia

SECTION 18. Liability of Person Signing in Trade or

Assumed Name . — No person is liable on the instrument

whose signature does not appear thereon, except as

herein otherwise expressly provided. But one who signs

in a trade or assumed name will be liable to the same

extent as if he had signed in his own name.

SECTION 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.

SECTION 20. Liability of Person Signing as Agent , and So

Forth . — Where the instrument contains or a person adds

to his signature words indicating that he signs for or on

behalf of a principal, or in a representative capacity, he is

not liable on the instrument if he was duly authorized;

but the mere addition of words describing him as an

agent, or as filling a representative character, without

disclosing

his principal, does not exempt him from

personal liability.

SECTION 21. Signature by Procuration ; Effect of . — A

signature by "procuration" operates as notice that the

agent has but a limited authority to sign, and the

principal is bound only in case the agent in so signing

acted within the actual limits of his authority.

SECTION

22. Effect

of

Indorsement

by

Infant

or

Corporation .— The indorsement or assignment of the

instrument by a corporation or by an infant passes the

property therein, notwithstanding that from want of

capacity the corporation or infant may incur no liability

thereon.

SECTION 23. Forged Signature ; Effect of . — When a

signature is forged or made without the authority of the

person whose signature it purports to be, it is wholly

inoperative, and no right to retain the instrument, or to

give a discharge therefor, or to enforce payment thereof

against any party thereto, can be acquired through or

under such signature, unless the party against whom it is

sought to enforce such right is precluded from setting up

the forgery or want of authority.

CHAPTER II Consideration

SECTION 24. 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.

SECTION 25. Value , What Constitutes . — Value is any

consideration sufficient to support a simple contract. An

antecedent or pre-existing debt constitutes value; and is

deemed such whether the instrument is payable on

demand or at a future time.

SECTION

26. What

Constitutes

Holder

for Value . —

Where

value

has

at

any

time

been

given

for

the

instrument, the holder is deemed a holder for value in

respect to all parties who became such prior to that time.

SECTION

27. When

Lien

on

Instrument

Constitutes

Holder for Value . — Where the holder has a lien on the

instrument, arising either from contract or by implication

of law, he is deemed a holder for value to the extent of his

lien.

SECTION 28. Effect of Want of Consideration . — Absence

or failure of consideration is 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

liquidated

amount or

otherwise.

SECTION 29. Liability of Accommodation Party . — An

accommodation

party

is

one

who

has

signed

the

instrument

as

maker,

drawer,

acceptor,

or

indorser,

without receiving value therefor, and for the purpose of

© Compiled by RGL

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