Page:United States Statutes at Large Volume 76A.djvu/343

–247– -247(2) the existence of the payee and his then capacity to indorse. § 4384. When person deemed indorser A person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor, is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. § 4385. Liability of irregular indorser Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser, in accordance with the following rules: (1) If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties. (2) If the instrument is payable to the order of the maker or drawer, or is payable to bearer, he is liable to all parties subsequent to the maker or drawer. (3) If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee. § 4386. Warranty on negotiation by delivery or by qualified indorsement A person negotiating an instrument by delivery or by a qualified indorsement, warrants: (1) that the instrument is genuine and in all respects what it purports to be; (2) that he has a good title to it; (3) that all prior parties had capacity to contract; (4) that he has no knowledge of any fact which would impair the validity of the instrument or render it valueless. But when the negotiation is by delivery only, the warranty does not extend in favor of a holder other than the immediate transferee. Paragraph (3) of this section does not apply to persons negotiating public or corporation securities, other than bills and notes. § 4387. Liability of general indorser An indorser who indorses without qualification, warrants to all subsequent holders in due course: (1) the matters and things specified by paragraphs (1), (2), and (3) of section 4386 of this title; and (2) that the instrument is at the time of his indorsement valid and subsisting. And, in addition, he engages that on due presentment it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. § 4388. Liability of indorser when paper negotiable by delivery Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser. § 4389. Order of indorsers* liability As respects one another indorsers are liable prima facie in the order in which they indorse; but evidence is admissible to show that as between or among themselves they have agreed otherwise. Joint payees or joint indorsees who indorse are deemed to indorse jointly and severally. § 4390. Liability of agent or broker Where a broker or other agent negotiates an instrument without indorsement he incurs all the liabilities prescribed by section 4386 of

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