xt75hq3rv58z https://exploreuk.uky.edu/dips/xt75hq3rv58z/data/mets.xml Miller, John Cochran, 1866- 1915  books b98-60-43710930 English Baldwin Law Book, : Louisville, Ky. : Contact the Special Collections Research Center for information regarding rights and use of this collection. Negotiable instruments Kentucky. Kentucky negotiable instruments law  : annotated / by John C. Miller. text Kentucky negotiable instruments law  : annotated / by John C. Miller. 1915 2002 true xt75hq3rv58z section xt75hq3rv58z 



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    The Kentucky

Negotiable Instruments



         JOHN C. MILLER
             OF THE

          LOUISVILLE, KY.


          Copyright 1915

          .411 rizhts reserved





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   In 1878 Judge Chalmers published his Digest
of the English law relative to bills of exchange.
Two years thereafter the Institute of Bankers
and the Associated Chambers of Commerce in-
structed him to prepare a bill on the subject.
This he did. His aim, to use his own words, was
"to reproduce as exactly as possible the existing
law, whether it seems good, bad, or indifferent
in its effects." This act was passed by the Brit-
ish Parliament in 1882 and was entitled the "Bills
of Exchange Act." RlIcognizing the necessity of
uniformity in these matters in this country, at
a meeting of the National Conference of State
Boards of Commissioners for Promoting U ni-
formity of Legislation held in August, 1895, a
committee was appointed who drafted a bill
codifying the laws of negotiable instruments.
This codification was submitted to the conference
at its annual meeting in 1896 and was adopted.
This draft was entitled "The Negotiable Instru-
rments Law."
   This draft has been adopted with a few modi-



fications by the following States, Territories and
Districts:  Alabama, Arizona, Colorado, Con-
necticut, District of Columbia, Florida, Hawaii,
Idaho, Illinois, Iowa, Kansas, Kentucky, Louis-
iana, Maryland, Massachusetts, Michigan, Mis-
souri Montana, Nebraska, New Jersey, New
Mexico, New York, North Carolina, North Dakota,
Ohio, Oregon, Pennsylvania, Rhode Island, Ten-
nessee, Utah, Virginia, Washington, West Vir-
ginia, W17isconsin and Wyoming.
   The act as originally prepared with certain
changes has been adopted by this State. Section
19 originally read "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 agencies."
For this was substituted by the Kentucky Legis-
lature the following: "The signature of any
party may be made by an agent duly authorized
in writing."
   Sections 95 and 96 in the original draft read
as follows: Section 95. "A written notice need
not be signed, and an insufficient written notice
may be supplemented and validated by verbal
communication. A misdescription of the instru-
ment does not vitiate the notice unless the party
to whom the notice is given is in fact mislead




thereby." Section 96 was, "A notice may be in
writing or merely oral and may be given in any
terms which sufficiently identify the instrument
and indicate that it has been dishonored by non-
acceptance or non-payment. It may in all cases
be given by delivering it personally or through the
mail." As adopted by this State these sections
read as follows: Section 95. "A written notice
need be signed, and an insufficient written notice
may be supplemented and validated by a written
communication. A misdescription of the instru-
ment does not vitiate unless the party to whom
the notice is given is in fact mislead thereby."
Section 96 as adopted reads: "The notice may be
in writing, and may be given in any terms which
sufficiently identify the instrument and indicate
that it has been dishonored by non-acceptance or
non-payment. It may in all cases be given by
delivering it personally or through the mail."
Under these sections it has been held by the Court
of Appeals that a notice must be in writing and
signed. See notes to these sections.
   Down to and including Section 189 this State
has adopted the original draft, with certain modi-
fications, and with the same number as to sec-
tions. It omitted Section 190 which gave a title to
the act, for the reason that that title was found
in the caption. Sections 190, 191, 192, 193 and




194 of our Act are the same as Sections 191, 192,
193, 194 and 195 of the original draft.
   Our Act omits Section 196 of the original
draft, which is as follows: "In any case not pro-
vided for in this act the rules of the law merchant
shall govern." WVe suppose this was omitted for
the reason that this would have been the law
without it.
   Sections 197 and 198 of the original draft
enumerated what laws were repealed and when
the law should take effect. What laws are re-
pealed are stated in Section 195 of our Act, which
provides that all laws that are "inconsistent with
this act are hereby repealed." Our Statute was
approved by the Governor on March 25, 1904,
and under Section 55 of our State Constitution
became a law on June 13, 1904.
   As we have stated, the English Bills of Ex-
change Act was nothing more nor less than
a codification of the law merchant with all its
good and bad effects. So the Negotiable Instru-
ments Law as prepared by its authors followed
in the same line and was only a codification.
These views have been adopted by the Court of
Appeals of this State. In the case of Wettlaufer
v. Baxter, 137 Ky. 362, 125 S. W. 741, the Court
of Appeals said: "The negotiable instrument act
is not a new law. It is with few exceptions merely




the codification of old laws that were in force and
effect by virtue of judicial pronouncement or
legislative enactment, and generally uniform. In
many of the States, including our own, there was
very little statutory law on the subject of bills
and notes previous to the passage of this act.
Some of these statutes were not uniform, nor
indeed were the opinions of the courts altogether
in harmony. And so, to remove the confusion and
uncertainty that was caused in commercial affairs
by the lack of uniformity in legislative enactments
and harmony in judicial opinions, a committee of
gentlemen learned in the commercial law pre-
pared the negotiable instrument act, not with a
view of making any radical changes in the law
as generally understood and administered, but to
remove the doubt as well as conflict that had in
some instances come into existence from differ-
ence in statutory laws as well as court opinions.
The result of their labors was the present act,
which has become the law in a large majority of
the States. And looking to the intention of the
law and the purpose of its preparation and en-
actment, if there is doubt about the meaning of
any of its provisions, and that doubt can be solved
by a reference to the law merchant as it was there-
tofore administered, this law should be looked to,
and the act if practicable given such a construc-




tion as will make it harmonize with the general
principles of commercial law in force before its
enactment." And again, in Campbell v. Fourth
Nat. Bank, 137 Ky. 555, 126 S. W. 114, the court
says: "The negotiable instrument act is in the
main merely a codification of the common law
rules on the subjects to which it relates. It was
intended principally to simplify the matter by
declaring the rule as established by the weight
of authority. There are a few innovations in
the law merchant as before settled by the courts.
Where it lays down a new rule, it controls; but,
where its language is consistent with the rule pre-
viously recognized, it should be construed as sim-
ply declaratory of the law as it was before the
adoption of the act." To the same effect see
Mechanics & Farmers' Savings Bank v. Katter-
john, 137 Ky. 427, 125 S. W. 1071; Williams v.
Paintsville Nat. Bank, 143 Ky. 781, 137 S. W. 535;
First Nat. Bank v. Bickel, 143 Ky. 754, 137 S. W.
   In Young v. Exchange Bank, 152 Ky. 293,
153 S. W. 444, this act was applied to a draft
drawn, indorsed and accepted before the passage
of this act. In that case it was held that this act
was but a codification of the law merchant and
should be applied to a draft drawn before its
passage where our Court of Appeals had not




passed upon the question. In other words, this
act was but a statement of the law as the Court
of Appeals would have decided the law to be
without the act.
    From this history of the law and these deci-
sions may be deduced three rules; first, the great
and controlling factor in the construction of this
act is that it is a codification of the law as it
existed previous to its adoption. Second, that
the purpose of this act was to establish uniformity
of rule in the various States of this Union. Third,
where a new rule is stated it obtains.
   The first result of these rules is the fact that
since this act is a codification of the law mer-
chant it does not control the construction or en-
forcement of the rights and liabilities of parties
to any contract which is not under the terms of
this act a negotiable instrument. Eades v. Muhlen-
berg County Savings Bank, 157 Ky. 416, 163 S.
W. 494.
   The next result is that where this act does not
establish a new rule and is only a codification of
the law as it previously existed, the decisions of
our Court of Appeals are the best evidence in this.
State of what the law means. A thorough under-
standing of these decisions is therefore essential
to a proper construction of the act.
   It is obvious that the uniformity sought by




this act will be statutory. The courts of the va-
rious States will construe it according to the light
that they have; and one State wrill not yield to
the construction given it by another State except
to the extent that the rule of reason may prevail.
Therefore, under this rule decisions of our Court
of Appeals on the construction of this act will
determine what the law is in this State.
   Even the statement that where a new rule is
introduced it must prevail is not so very im-
portant when we remember that this act is a
codification. No rule in the act as originally
written was absolutely new. Such rules are new
only in certain jurisdictions. They once obtained
in a majority of th, States and were introduced
into the act for the sole purpose of uniformity.
Take for instance the question of the law of
checks. The law once in this State was that a
check was nothing more nor less than a bill of
exchange. To this general rule exceptions were
afterwards made by the courts. The Legislature
merely restored the law to what it once was.
Or, take the most radical change that has been
made in Kentucky by the act (Section 184) which
has made all promissory notes, which possess the
essentials laid down by Section 1, negotiable.
Even this, while making a new rule as to promis-
sory notes, has introduced no new element in the




law of this State with regard to negotiable instru-
   From the beginning our Court of Appeals
grasped with clear understanding the principles
governing a bill of exchange. Both our Courts
and Legislature refused to extend these principles
to ordinary promissory notes. Unless such notes
were discounted by banks whose private charters
raised them to the footing of a bill of exchange or
under the act of 1865, now Section 483 of the
Kentucky Statutes, they remained with but little
difference mere contracts for the payment of
money. But under this act a promissory note
possessing the elements of negotiability is just
as negotiable as a bill of exchange. The only
difference is that one is an order and the other
a promise. When once launched on their com-
mercial journey they have the same character-
istics and under the same conditions reach the
same end. They are upon the same footing. Or
to use technical language, a negotiable promissory
note is now, at its inception, on the footing of a
bill of exchange. The act even at this vital point
introduces no new rule, but only enlarges the class
to which this rule applies.
   So that under all these rules the practicioner
must, in the first instance, rely upon the opinions
of our own court of last resort. Before the pass-




age of this act we had over one hundred and ten
years of judicial construction of the law mer-
chant. And since its passage ten years of judicial
construction of this act.
   My single purpose in the preparation of this
book has been to set forth as best I could the law
merchant as it exists in Kentucky. No attempt
has been made to go outside our State for deci-
sions. I believe that in the decisions of our Court
of Appeals will at least be found a foundation,
and in many cases, the whole structure of the law.
   In conclusion the author wishes to acknowl-
edge his obligations to the work of Mr. Charles M.
Lindsay, whose annotations to this act were pub-
lished in 1904 and have been found most valuable.
                        JOHN C. MILLER.
   January 1, 1915.




   The sections of this Act have been cross-ref-
erenced not by annotation but by inserting after
the word or phrase the number of the section to
which it is desired to attract the reader's attention.
For instance, in Subsection 1 of Section 1 after
the word "writing" have been inserted the figures
190, which refer the reader to Section 190 where
it is declared that the word "written" includes the
word "printed."


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                ARTICLE I.


Section 1. Requirements of a negotiable instru-
       2. Sum payable must be certain.
       3. When an order or promise is uncon-
       4. What is a determinable future time
       5. Provisions affecting negotiability.
       6. Negotiable character, when not af-
       7. When payable on demand.
       8. When payable to order.
       9. When payable to bearer.
       10. Sufficient terms.
       11. Date, Presumption.
       12. Antedated or post-dated-effect of.
       13. When holder may insert true date.
       14. When blanks may be filled.


15. Incomplete instruments.
16. Delivery.
17. Ambiguous instruments-how    con-
18. Liability where signature does not
       appear; trade or a s s u m e d
19. Signature by agent.
20. Liability of person signing as agent.
21. Signature by procuration.
22. Indorsement or assignment by infant
       or a corporation, lacking capacity.
23. Forged or unauthorized signature.


             THE KENTUCKY


      1. Requirements of a Negotiable In-
  strument.-"An instrument to be negotiated
  must conform to the following requirements:
     (1) "It must be in writing (Sec. 190) and
  signed (Sec. 19) by the maker or drawer.
     (2) "Must contain an unconditional (Sec.
  3) promise or order to pay a sum certain
  (Sec. 2) in money (Sec. 6, Sub. 5).
     (3) "Musti be payable on demand (Sec. 7)
  or at a fixed or determinable future time
  (Sec. 4).
     (4) "Must be payable to the order of a
  specified person (Secs. 8, 190) or to bearer
  (Sec. 9); and
     (5) "Where the instrument is addressed
  to a drawee, he must be named or otherwise
  indicated therein with reasonable certainty."

  See note to Section 184 on the question of what
is negotiability.



    In the original draft the word negotiable was

    Signed. "When the law requires any writing
to be signed by a party thereto, it shall not be
deemed to be signed unless the signature be sub-
scribed at the end of such writing."  (Ky. Stats.,
Sec. 468).
   The signature may be by mark unattested.
Hinkle v. Dodge, 7 K. L. R. 526; Staples v.
Bedford Loan & Deposit Bank, 98 Ky. 451, 33 S.
XV. 403, 17 K. L. R. 1035.
   In the Staples case it is said "the words 'James
X Staples' do not constitute the signature of the
appellant, but the cross mark or sign is that sig-
   But it seems to have been held that an unat-
tested signature by mark does not have the same
evidential effect as a signature in writing.
Chadwell's Adm'r. v. Chadwell, 98 Ky. 643,
33 S. W. 1118, 17 K. L. R. 1207; Vanover v.
Murphy's Adm'r., 15 S. W. 61, 12 K. L. R. 733.
   This applies even where there is no plea of non
est factum. Chadwell's Adm'r. v. Chadwell supra.
   "No person shall be bound as the surety of an-
other by the act of an agent, unless the authority




of the agent is in writing, signed by the principal;
or, if the principal does not write his name, then
by his sign or mark made in the presence of at
least one creditable attesting witness." (Kentucky
Statute, Section 482). Ragan v. Chenault, 78 Ky.
546; Billington v. Commonwealth, 79 Ky. 400).
    Section 482 applies to signature to power of
attorney and not to signature to original obliga-
tion. See Staples case supra and Measles v.
Morton, 93 Ky. 50, 18 S. W. 1028, 13 K. -L. R.
958 It is not surety's signature even though made
by his agent in his presence. Billington case
supra.  Nor   can such signature be ratified
verbally. Ragan case supra. But such signature
can be ratified by writing, Riggan v. Crain, 86
Ky. 249, 5 S. W. 561, 9 K. L. R. 528; or signer
may be estopped to deny it, Rudd v. Matthews, 79
Ky. 479; Union Central Life Insurance Co. v.
Johnson, 76 S. W. 335, 25 K. L. R. 682.
   Money. "Bills, drafts or checks, payable in
bank notes or currency, or other funds, whereso-
ever drawn or payable, shall be deemed negotia-
ble, and treated in all respects as if drawn for
money, except as to the value of the currency
in which they are payable." (Ky. Statutes 478).
   It will be observed that this statute does not
in terms include promissory notes. Whether or
not this act which makes a promissory note ne-





gotiable in the same manner as a bill of exchange
would bring such notes within the perview of
Section 478 is a question that has not been passed
upon by the Court of Appeals.
   For different kinds of money see Piner v.
Clary, 17 B. M1on. 663; Morrison v. Tate, 1 Met.
569; Johnson v. Vickers, 1 Duv. 267; Smith's
Adm'r. v. Dillon's Adm'r., 2 Duv. 153; Glass v.
Pullen, 6 Bush 351.
   An order in the form of a bill of exchange
but payable in merchandise is not a bill of ex-
change. Coyle's Extx. v. Satterwhite's Adm'r.,
4 T. B. Mon. 124; May v. Landsdown, 6 J. M. 165.
   Payable to the order of a specified person or
bearer. The use or nonuse of these words dis-
tinguishes a negotiable instrument from one which
is merely assignable. In the case of Wettlaufer
v. Baxter, 137 Ky. 362, 125 S. W. 741, it is said:
"It will thus be seen that it was uniformly held
that, in order to make a note or bill negotiable,
the words 'to order' or 'to bearer' or equivalent
words, must be used in the body of the note. It
will be kept in mind, however, that the absence
of these words does not affect the validity of a
note or render it nontransferable or nonassign-
able. Their only effect is to make the instrument
negotiable and thereby cut off defenses that the
maker or either of the parties to the paper might


' I


 1, 2       LAW OF KENTUCKY               29

have and make against the holder in due course
if the note was negotiable."
     The words payable to order are synonymous
with the words payable and negotiable. McCor-
mack v. Clarkson, 7 Bush 519.
   A note payable "to D. L. or order negotiable
and payable at M. N. Bank" is a negotiable in-
strument. Alexander & Co. v. Hazelrigg, 123
Ky. 677, 97 S. W. 353.
   See Jett v. Standafer, 143 Ky. 787, 137, S.
W. 513.

      2. Sum Payable Must Be Certain.-
  "The sum payable is a sum certain within
  the meaning of this act, although it is to be
     (1) "With interest; or
     (2) "By stated installments; or
     (3) "By stated installments, with a provi-
  sion that upon default of payment of any
  installment, the whole shall become due; or
     (4) "With exchange, whether at a fixed
  rate or at the current rate; or
     (5) "With costs of collection or an attor-
  ney's fee, in case payment shall not be made
  at maturity."

  Installments. Robertson v. Commercial Se-
curity Co., 152 Ky. 336, 153 S. W. 450.
   Attorney's Fee. While the provision in a note


30         NEGOTIABLE INSTRUMENTS         2, 3

providing for the collection of an attorney's fee
does not render a note non-negotiable, yet in this
State such a provision is deemed contrary to public
policy and void. Thomasson v. Townsend, 10 Push
114; Gaar v. Louisville Banking Co., 11 Bush.
189; Rilling v. Thompson, 12 Bush 310; Wither-
spoon  v. Musselman, 14 Bush     214; Pryse
v. Peoples B. L. & S. Ass'n., 19 K. L. R. 752, 41
S. W. 514; Kentucky Trust Co. v. Third Nat'l
Bank, 106 Ky. 22, 20 K. L. R. 1797, 50 S. W.
43; Southern Warehouse & Transfer Co. v. Me-
chanic's Trust Co., 56 S. W. 162, 21 K. L. R. 1734;
Fidelity Trust & Safety Vault Co. vs. Ryan, 109
Ky. 240, 58 S. W. 610, 22 K. L. R. 734.
   Even though such a fee is recoverable under
the law of the State where a note is payable, it
cannot be recovered in this State, because such a
provision is contrary to the public policy of this
State. Carsey & Co. v. Swan & James, 150 Ky.
473, 150 S. WV. 534.

      3. When An Order or Promise Is Un-
 conditional.-"An unqualified order or prom-
 ise to pay is unconditional within the meaning
 of this act, though coupled with it:
     (1) "An indication of a particular fund,
 out of which reimbursement is to be made, or
 a particular account to be debited with the
 amount; or



      (2) "A  statement of the transaction
  which gives rise to the instrument.
     "But an order or promise to pay out of a
  particular fund is not unconditional."

  A mere indication of a fund out of reimburse-
ment may be made or an account to be debited
does not make order or promise conditional.
Bank of Kentucky v. Sanders, 3 A. K. Mar. 184;
Early v. McCart, 2 Dana 414; Biesenthall v. Wil-
liams, 2 Duv. 329. Nor does the fact that the
obligation is secured by a lien. Duncan v. Louis-
ville, 13 Bush 278; McCarty v. Louisville Banking
Co., 100 Ky. 4, 37 S. W. 144, 18 K. L. R. 569;
Hargis v. Louisville Trust Co., 30 S. W. 877, 17
K. L. R. 218. But an order or promise to pay out
of a fund is conditional. Nichols' Adm'r. v. Davis,
1 Bibb 490; Mershon v. Withers, 1 Bibb 503;
Curle v. Beers, 3 J. J. Mon. 170; Carlisle v. Du-
bree, 3 J. J. Mon. 542; Strader v. Bachelor, S B.
Mon. 168. The rule is: "It is an essential quality
of a good bill that it attach to itself the personal
responsibility of the drawer, and be not drawn
on the credit of any particular fund." Nichols v.
Davis supra. Of course the same rule applies to
a promissory note, in which case the maker must
be personally liable and not a particular fund.
Or to put it in other words, does the note oi bill



32         NEGOTIABLE INSTRUMENTS       g 3, 4, 5

carry the personal liability of the maker or drawer
or only the liability of a particular fund
   Of course a statement in the instrument of an
illegal transaction would be notice thereof to
every holder.

      4. What Is a Determinable Future
  Time.-"An instrument is payable at a de-
  terminable future time, within the meaning of
  this act, which is expressed to be payable:
      (1) "At a fixed period af ter date or
  sight; or
      (2) "On or before a fixed or determinable
  future time specified therein; or
      (3) "On or at a fixed period after the
  occurrence of a specified event, which is cer-
  tain to happen, though the time of happen-
  ing be uncertain.
     "An instrument payable upon a contin-
  gency is not negotiable, and the happening
  of the event does not cure the defect."

  An instrument payable on a contingency is not
negotiable. Nichols v. Davis, 1 Bibb 490; Strader
v. Bachelor, 8 B. Mon. 168; Early v. McCart, 2
Dana 414.

      5. Provisions Affecting Negotiabil-
 ity.-"An instrument which contains an or-
 der or promise to do an act in addition to the
 payment of money is not negotiable; but the


  negotiable character of an instrument other-
  wise negotiable is not affected by a provision
      (1) "Authorizes the sale of collateral se-
  curities in case the instrument be not paid
  at maturity; or
      (2) "Authorizes a confession of judgment
  if the instrument be not paid at maturity; or
      (3) "Gives the holder an election to re-
  quire something to be done in lieu of pay-
  ment of money.
      "But nothing in this section shall validate
  any provision or stipulation otherwise il-

  As to vendor's and mortgage liens see note to
Section 3.
   While an authority to confess judgment, given
before an action is instituted, is void in Kentucky
(Ky. Stat. 416), yet such a provision in an instru-
ment neither makes the instrument void, nor, by
the very words of the above section, makes it
non-negotiable. And here it may be said that
this act, where it merely states that any particular
provision in an instrument shall not affect its ne-
gotiability, does not make that valid which other-
wise is illegal; nor on the other hand does a law,
which makes certain contracts void, affect the
negotiability of an instrument otherwise complete






and legal, except where it is denounced by a
statute as void. See note to Section 57.

      6. Negotiable Character, When Not
  Affected.-"The validity and negotiable char-
  acter of an instrument are not affected by the
  fact that:
     (1) "It is not dated (Sees. 13, 14, 17) ; or
     (2) "Does not specify the value given
  (Sees. 24, 190), or that any value has been
  given therefor; or
     (3) "Does not specify the place where
  it is drawn or the place where it is payable
  (Sees. 13, 14) ; or
     (4) "Bears a seal; or
     (5) "Designates a particular kind of cur-
  rent money in which payment is to be made
  (Sec. 1, Sub. 2).
     "But nothing in this section shall alter
  or repeal any statute requiring in certain
  cases the nature of the consideration to be
  stated in the instrument."

  T ue date is a material but not an essential
part of a negotiable paper. Stout v. Cloud, 5 Litt.
20a. As to particular kind of money, se(, Hord v.
Miller, 2 Duv. 103; Ledford v. Smith, 6 Bush 129;
Glass v. Pullen, 6 Bush 346; Murray v. Meagher,
8 Bush 574.
   As to statement of consideration, see note to
Section 57 on "Peddlers' Notes."

 5, 6




      7. When Payable on Demand.-"An
  instrument is payable on demand:
     (1) "Where it is expressed to be payable
  on demand, or at sight, or on presentation; or
     (2) "in which no time for payment is ex-
     "Where an instrument is issued, accepted
  or endorsed when overdue, it is, as regards
  the person so issuing, accepting or endorsing
  it, payable on demand (Sec. 45)."
  This abolishes former distinctions between
paper payable at sight and on demand.

      S. When Payable to Order.-"The in-
  strument is payable to order where it is
  drawn payable to the order of a specified per-
  son or to him or to his order. It may be drawn
  payable to the order of:
     (1) "A payee who is not maker, drawer,
  or drawee; or
     (2) "The drawer or maker; or
     (3) "The drawee; or
     (4) "Two or more payees jointly (Sec.
 41); or
       (5) "One or some of several payees; or
     (6) "The holder of an office for the time
     "Where the instrument is payable to or-
 der, the payee must be named or otherwise
 indicated therein with reasonable certainty."

 Payable to or der of one or several payces.


 7, 8



Such notes are now not payable on a contingency
within the meaning of this act.
    This section is cited in Wettlaufer v. Baxter,
137 Ky. 362, 125 S. W. 741.

       9. When Payable to Bearer.-"The in-
  strument is payable to bearer:
      (1) "When it is expressed to be so pay-
  able; or
      (2) "When it is payable to a person
  named therein or bearer; or
      (3) "When it is payable to the order of
  a fictitious or non-existing person, and such
  fact was known to the person making it so
  payable; or
      (4) "When the name of the payee does
  not purport to be the name of any person; or
      (5) "When the only or last endorsement
  is an endorsement in blank (Sec. 34)."
  Notice the words in Subsection 5 only or last.

  One who indorses a note payable neither to
order nor bearer, does not incur any liability as
indorser, arising under this Act.  (Wettlaufer
v. Baxter, 137 Ky. 362, 125 S. W. 741).
   Where the last indorsement on a lost note
was in blank, it is necessary that the plaintiff
execute bond required by Section 7 of the Civil
Code. Hoyland v. National Bank of Middles-
borough, 137 Ky. 682, 126 S. W. 356; but where

 8, 9



 9,10,11,12,13  LAW OF KENTUCKY

it is payable to order and not indorsed in blank,
no such bond is required. Foster's Adm'r. v.
Metcalfe, 144 Ky. 385; 138 S. W. 314.

      10. Sufficient Terms.-"The negotiable
  instrument need not follow the language of
  this Act, but any terms are sufficient which
  clearly indicate an iJAt ntion to conform to
  the requirements thereof (Sec. 17)."

      11. Date, Presumption.-"When the
  instrument or an acceptance or any indorse-
  ment thereon is dated, such date is deemed
  prima facie to be the true date of the making,
  drawing, acceptance or indorsement, as the
  case may be (Sec. 45)."

      12. Antedated or Post-Dated-Effect
 Of.-"The instrument is not invalid for the
 reason only that it is ante-dated or post-
 dated, provided this is not done for an ille-
 gal or fraudulent purpose. The person to
 whom an instrument so dated is delivered,
 acquires the title thereto as of the date of

     13. When Holder May Insert True
 Date.-"When1 an instrument expressed to
 be payable at a fixed period after date is
 issued undated or where the acceptance of
 an instrument payable at a fixed period after
 sight is undated, any holder may insert there-




in 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 sub-
sequent holder in due course; but as to him,
the date so inserted is to be regarded as the
true date (Sec. 14)."

    14. When Blanks May Be Filled.-
"Where the instrument is wanting in any
material particular, the person in possession
thereof has a prima facie authority to com-
plete it by filling up the blanks therein. And
a signature on a blank paper delivered (Secs.
15 and 16) by the person making the signa-
ture in order that the paper may be con-
verted 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 en-
forced against any person who became a party
thereto prior to its completion, it must be
filled up strictly in accordance with the au-
thority given and within reasonable time.
But if any such instrument, after completion,
is negotiable 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 au-
thority given and within a reasonable time."

In the original draft the word "negotiated