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1-- Form of negotiable instruments But the drawer may insert in the instrument an express

52-- What constitutes a holder in due course


60-- Liability of maker stipulation negativing or limiting his own liability to the
61-- Liability of drawer holder.
62-- Liability of acceptor
65- Warranty where negotiation by delivery andso forth ________________________________________________________
66-- Liability of general indorser _
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Sec. 62. Liability of acceptor.
Section 1. Form of negotiable instruments. The acceptor, by accepting the instrument, engages
An instrument to be negotiable must conform to the that he will pay it according to the tenor of his
following requirements: acceptance and admits:
(a) It must be in writing and signed by the maker or
drawer; (a) The existence of the drawer, the genuineness of his
signature, and his capacity and authority to draw the
(b) Must contain an unconditional promise or order to instrument; and
pay a sum certain in money;
(b) The existence of the payee and his then capacity to
(c) Must be payable on demand, or at a fixed or indorse.
determinable future time; Sec. 65. Warranty where negotiation by delivery
(d) Must be payable to order or to bearer; and and so forth.
Every person negotiating an instrument by delivery or
(e) Where the instrument is addressed to a drawee, he
by a qualified indorsement warrants:
must be named or otherwise indicated therein with
reasonable certainty.
(a) That the instrument is genuine and in all respects
what it purports to be;
Sec. 52. What constitutes a holder in due
course. (b) That he has a good title to it;

A holder in due course is a holder who has taken the (c) That all prior parties had capacity to contract;

instrument under the following conditions: (d) That he has no knowledge of any fact which would
impair the validity of the instrument or render it
(a) That it is complete and regular upon its face; valueless.
But when the negotiation is by delivery only, the
(b) That he became the holder of it before it was
overdue, and without notice that it has been previously warranty extends in favor of no holder other than the
dishonored, if such was the fact; immediate transferee.

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


The provisions of subdivision (c) of this section do not
(d) That at the time it was negotiated to him, he had no apply to a person negotiating public or corporation
notice of any infirmity in the instrument or defect in the securities other than bills and notes.
title of the person negotiating it.
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_Sec. 60. Liability of maker. _
Sec. 66. Liability of general indorser.
The maker of a negotiable instrument, by making it,
Every indorser who indorses without qualification,
engages that he will pay it according to its tenor, and
warrants to all subsequent holders in due course:
admits the existence of the payee and his then capacity (a) The matters and things mentioned in subdivisions
to indorse. (a), (b), and (c) of the next preceding section; and
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(b) That the instrument is, at the time of his
Sec. 61. Liability of drawer. indorsement, valid and subsisting;
The drawer by drawing the instrument admits the And, in addition, he engages that, on due presentment,
existence of the payee and his then capacity to indorse; it shall be accepted or paid, or both, as the case may
and engages that, on due presentment, be, according to its tenor, and that if it be dishonored
the instrument will be accepted or paid, or both, and the necessary proceedings on dishonor be duly
according to its tenor, and that if it be dishonored and taken, he will pay the amount thereof to the holder, or
the necessary proceedings on dishonor be duly taken, to any subsequent indorser who may be compelled to
he will pay the amount thereof to the holder or to any pay it.
subsequent indorser who may be compelled to pay it.