Page:United States Statutes at Large Volume 47 Part 1.djvu/1338

 1314 72d C ONGRESS. SESS. II. CH. 128. F EBRUARY 27, 1933 . CROSS REFERENCES Notice before full amount paid, see section 1453. When person not deemed a holder in due course, see section 1452. W ho deemed a holder in due course, see section 1458. Not holder in due SEC. 1452. NOT HOL DER IN DU E COURSE .-here an i nst rum ent pa y- wn rsee able on demand is negotiated an unreasonable length of time after its issue, the holder is not deemed a holder in due course. CROSS REFERENCES Ante, p.1313. Notice before full amount paid, see section 1453 . Who deemed a holder in due course, see sections 1451 and 1458. Notice before full SEC. 1453 . NOTICE BEFORE F ULL AMOUNT PAID .-Where the transferee amo unt raid, receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the amount theretofore paid by him. CROSS REFERENCES Rights of holder in due course, see section 1456. Ante, p.1313. Who deemed a holder in due course, see sections 1451 and 1458. Who not deemed a holder in due course, see section 1452 . When t itle defective. SEC. 1454 . WH EN TITL E DEFECTIVE.-The title of a person who negotiates an instrument is defective within the meaning of chapters p A3iee, p 1307; post, 66 to 69 of this code, when he obtained the i nstrument, or an y signa- ture thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of f aith, or under s uch circumstanc es as amount to a fraud. Notice of defect. SEC. 1455 . NOTICE OF DEFECT.-TO constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the sam e, the per son to wh om it is nego tia ted mu st have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. Rights of holder in due cour se. 1456. RIGHTS of HOLDER IN DUE COURSE .--A holder in d ue. course holds the instrument free from any de fect of title of prior parties, and free from defenses available to prior parties among themselves, an d may enforce p ayment of the in strument for the full amount thereof against all part ies liable thereo n. Ante, p. 1813. Defense against h old. er not in due course. Who deemed holder in due course. CROSS REFEnswoEs Notice b efore fu ll amount paid, See s ection 1 45 3. Who deemed holder in due course, see sections 1451 and 1458. Who not deemed a holder in due course, see section 1452 . SEC. 1457. WHEN SUBJECT TO ORIGINAL .--In the hands of any holder other than a holder in due course,- a negotiable instrument is subject to the same defenses as if it were nonnegotiable. But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all pa rtie s prior to the la tter. SEC. - 1458. WHO DEEMED HOLDER IN DUE COURSE .-Every holder is deemed prima facie to be a holder - in due course ; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course. But the last-mentioned rule does not apply in favor of a