Bills and Notes § 363. A drawer of a draft, ordinarily standing towards subsequent parties as a general indorser, may, by appropriate words appearing on the paper or by agreement dehors the instrument as to person affeeted with notice, retain the right to arrest payment and likewise restrict his obligation. Murchison National Bank v. Dunn Oil Mills Co., 150 N.、C. 718, 64 S. E. 885.

379. Liability of acceptor. The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance; and admits (1) existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument; and (2) the existence of the payee and his then capacity to indorse.

C. S., s. 3043; Rev., s. 2211; 1899, c. 733, s. 62.

Bills and Notes § 85. The draft having been accepted, the drawee became primarily liable.-National Bank of Asheville v. Bradley, 117 N. C. 526, 23 S. E. 455.

Banks § 125. A drawee bank is presumed to know the genuineness of the signatures of its depositors, and when it accepts a forged check from another of its depositors and places it to his credit, it is considered as a payment of the check which without anything further appearing, cannot be withdrawn; but where such other depositor is aware of the fact of forgery, indorses the check, and it is accordingly credited to him without knowledge of such facts on the part of the bank, the bank may return the cheek to such depositor and rightfully charge his account therewith, without reference to any fraudulent intent on his part.-Woodward v. The Savings & Trust Co., 178 N. C. 184, 100 S. E. 304.

380. 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.

C. S., s. 3044; Rev., s. 2212; 1899, c. 733, s. 63.

Bills and Notes § 337. In order to show a proper negotiation of a commercial instrument payable to order, so as to shut off equities and defenses existing between the original parties, it must be endorsed by the holder or by some one for him duly authorized, by writing the name of the holder on the instrument itself, usually on the back thereof, or on some paper physically attached thereto at the time of the indorsement was made.Critcher v. Ballard, 180 N. C. 111, 104 S. E. 134.

Bills and Notes § 271. One placing his signature on the back of a negotiable paper is deemed an indorser thereof, and under the express terms of the statute should clearly indicate by appropriate words his intention to be bound in some other capacity," when such exists, in order for him to avail himself thereof as a defense in an action brought by a holder in due course. The Meyers Co. v. Battle, 170 N. C. 168, 86 S. E. 1034.

Evidence § 423.-Parol evidence is inadmissible to show that defendant, who had indorsed a note by writing his name across the back, signed as an original promisor.-Ibid.

Bills and Notes § 396. One indorsing a note in blank before delivery

without indicating his intention to be bound otherwise, is an "indorser," who, not being given notice of nonpayment and dishonor, is discharged.— J. W. Perry Co. v. Taylor Bros., 148 N. C. 362, 62 S. E. 423.

Bills and Notes § 281. Where a payee or regular indorsee of a note writes his name on the back, the law, as between him and a bona fide holder for value and without notice, implies that he intended to assume the liability of an indorser.-Sykes v. Everett, 167 N. C. 600, 83 S. E. 585.

Bills and Notes § 281. An indorser undertakes to pay if the debtor does not, after due notice of dishonor.-Ibid.

381. 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.

C. S., s. 3045; Rev., s. 2213; 1899, c. 733, s. 64.

Bills and Notes § 396. One indorsing a note in blank before delivery without indicating his intention to be bound otherwise, is an "indorser, who, not being given notice of nonpayment and dishonor, is discharged.J. W. Perry Co. v. Taylor Bros., 148 N. C. 362, 62 S. E. 423.

382. Warranty, where negotiation by delivery. Every 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 extends in favor of no holder other than the immediate transferee. The provisions of subdivision three of this section do not apply to persons negotiating public or corporate securities other than bills and notes.

C. S., s. 3046; Rev., s. 2214; 1899, c. 733, s. 65.

383. Liability of general indorser. Every indorser who endorsed without qualification warrants to all subsequent holders in due course (1) the matters and things mentioned in subdivisions one, two and three of the next preceding section; and (2) that the instrument is at the time of this 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.

C. S., s. 3047; Rev., s. 2215; 1899, c. 733, s. 66.

Bills and Notes § 375.-The principle that a note for a gambling debt cannot be collected does not extend to suits by an innocent indorsee for value and holder in due course, against the indorser on his contract of indorsement, which is by virtue of above section, a contract independent of the instrument on which it appears, and guarantees that the note is a valid and subsisting obligation.-Wachovia Bank & Trust Co. v. Crafton, 181 N. C. 404, 107 S. E. 316.

Bills and Notes § 280. When Young endorsed the note, although past due, to plaintiff, he warranted that it was genuine-that he had a good title to it; that he had no knowledge of any fact which would impair its validity or render it valueless, and that on presentment it would be paid. Hence, his title to the note and his right to demand all securities which Young held are clear.-Smith v. Godwin, 145 N. C. 242, 58 S. E. 1089.

Bills and Notes § 296. The provisions made as to warranties which prevail in case of unqualified indorsements refer to lawful transactions, and do not relate to transactions coming within the meaning of our usury laws. -Sedbury v. Duffy, 158 N. C. 432, 74 S. E. 355.

Bills and Notes § 280. A parol agreement made between an indorser of a negotiable instrument in blank and his transferee may be shown between the immediate parties to the transaction by parol evidence, and is not objectionable as a contradiction of the liability of an indorser implied by law, except as to subsequent holders in due course without notice.-Sykes v. Everett, 167 N. C. 600, 83 S. E. 585.

Bills and Notes § 281. Where the payee (whether original or by a pre vious indorsement) of a note assigns or transfers it by indorsement, he be comes simply an indorser and liable as a surety, unless by the terms of the assignment he limits his liability.-Davidson v. Powell, 114 N. C. 575, 19 S. E. 601.

Bills and Notes § 305. In an action upon an indorsement of a note with the agreement that the indorsee should exhaust the collateral before recourse to the indorser, where there was no allegation or proof that the indorser made any false representation as to the time within which the collateral might be realized, his remark as to the time held immaterial.-Sykes v. Everett, 167 N. C. 600, 83 S. E. 585.

NOTE: Sometimes a person or corporation may become liable because of representations made and not by indorsement.

An officer of defendant railroad company was authorized by its directors to sell certain bonds which had been issued to it by a town to aid in the construction of its road, and pursuant to such authority sold them to the president of plaintiff bank acting on its behalf.. Prior to and during the negotiations, such officer expressly stated in writing to the purchaser that the bonds were valid and had been so adjudged by a court of the state, and the purchase was made in reliance on such representation. The bonds were in fact void for want of power in the town to issue them, and were subsequently so adjudged. Held, that the statement of their validity made as an inducement to the sale was an express warranty that they had a valid legal existence as securities which was binding on defendant, and that plaintiff was entitled to recover from defendant thereon the consideration paid

therefor.-Union Bank of Richmond v. Oxford & C. L. R. Co., 74 C. C. A. 323, 143 Fed. 193. In this case, the Supreme Court of the United States denied a petition for writ of certiorari, 206 U. S. 565, 51 L. Ed. 1191.

384. Liability of indorser, where paper negotiable by delivery. Where a person places his indorsement on an instrument negotiable by delivery he incurs all the liabilities of an indorser. C. S. s. 3048; Rev. s. 2216; 1899, c. 733, s. 67.

385. Order in which indorsers are liable. 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 indorsers who indorse are deemed to indorse jointly and severally.

C. S., s. 3049; Rev., s. 2217; 1899, c. 733, s. 68.

Bills and Notes § 306. A payee who has been compelled to pay a note on his indorsement cannot enforce reimbursement from a subsequent indorser.-Lynch v. Loftin, 153 N. C. 270, 69 S. E. 143.

-Bills and Notes § 306. In a suit by the payee of a note to recover from a subsequent indorser the amount of a judgment obtained against the payee as an indorser, a change in the prima facie order of liability of indorsers is not shown by allegation of a contract between the maker and such subséquent indorser whereby the note was to be discharged, in the absence of a showing that the maker executed the contract on his part.-Ibid.

Bills and Notes § 306. If the maker of a note by performing an agreement with a subsequent indorser discharged and paid the note, the payment inured to the benefit of the payee, as affecting his liability as indorser, and such indorser would be required to account to the payee for the consideration received.-Ibid.

Bills and Notes § 308. One who obtains possession of negotiable paper, after indorsing it, is restored to his original position, and cannot hold intermediate parties who could look to him. It is equally true that one who derives possession of the paper from him, with notice of this fact, cannot hold such intermediate indorsers liable; and when such indorsements are in blank, oral testimony is admissible to show the relation in which they stand.-Adrian v. McCaskill, 103 N. C. 182, 9 S. E. 284.

386. Liability of agent or broker. Where a broker or other agent negotiates an instrument without indorsement he incurs all the liabilities prescribed by section three thousand and forty-six (herein 383), unless he discloses the name of his principal and the fact that he is acting only as agent.

C. S., s. 3050; Rev., s. 2218; 1899, c. 733, s. 69.

ART. 7. PRESENTMENT FOR PAYMENT.

387. Effect of want of demand on principal debtor. Presentment for payment is not necessary in order to charge the person primarily liable on the instrument; but if the instrument is by

its terms payable at a special place, and he is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender of payment upon his part. But, except as herein otherwise provided, presentment for payment is necessary in order to charge the drawer and indorsers.

C. S., s. 3051; Rev., s. 2219; 1899, c. 733, s. 70.

Bills and Notes § 403. Presentment and demand at the bank at which a note is payable is necessary to charge an indorser, except where the maker has no funds at the bank to meet it.-Meyers Co. v. Battle, 170 N. C. 168, 86 S. E. 1034.

Bills and Notes § 403.

The holder of a check cannot sue the drawer thereon till it has been presented to the drawer, and payment refused.Commercial Nat. Bank v. First Nat. Bank, 118 N. C. 783, 24 S. E. 524.

Bills and Notes § 403. An indorsement on a note renders the indorser liable as a surety; and no demand on the maker, or notice to the indorser of such demand, is necessary to bind him.-First Nat. Bank v. Eureka Lumber Co., 123 N. C. 24, 31 S. E. 348.

Bills and Notes § 403. Where, on trial of an action, a material fact was whether a draft had been presented to plaintiff for acceptance and payment and it appeared that plaintiff, having received notice that a draft had been drawn on him by defendant, applied at the bank where he usually received drafts but the defendant's draft had not been received and plaintiff testified that he was employed at a cotton gin; that his duties were outside the office and that he had no desk there but that his place of business was at his residence and that the draft had never been presented to him; while the bank collector testified that he took the draft to the gin for acceptance three times, left a printed notice and notified plaintiff's son. Held, that whether the draft had been duly presented was a question for the jury.-Burruss v. Life Ins. Co. of Va., 121 N. C. 62, 28 S. E. 62; J. W. Perry Co. v. Taylor Bros., 148 N. C. 362, 62 S. E. 423.

388. Presentment, where the instrument is not payable on demand. Where the instrument is not payable on demand, presentment must be made on the day it falls due. Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof.

C. S., s. 3052; Rev., s. 2220; 1899, c. 733, s. 71.

389. What constitutes a sufficient presentment. Presentment for payment to be sufficient must be made (1) by the holder or by some person authorized to receive payment on his behalf; (2) at a reasonable hour on a business day; (3) at a proper place as herein defined; (4) to the person primarily liable on the instrument, or, if he is absent or inaccessible, to any person found at the place where the presentment is made.

C. S., s. 3053; Rev., s. 2221; 1899, c. 733, s. 72.