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Bank's relation to depositors.-The ordinary relation between a bank and its current depositors is that of debtor and creditor. The deposit is a loan, and the payment by the bank on account of customer is a repayment of the loan. Where a bank holds the note of a depositor who dies insolvent, it may deduct from the deposits the whole amount of such note. 2 A. 563.

Notice to a director as to where the proceeds of note discounted were to go was notice to the bank. 2 A. 367. Knowledge of the president is knowledge of the bank, and his absence is no excuse for bank's failure to act upon such knowledge. 6 A. 543.

An officer of incorporated bank, receiving deposits when the bank is insolvent, is individually liable for such deposits. 89 Mo. 51. Likewise a private banker. See Sec. 4585.

An action will lie against a director for damages for loss sustained by reason of his fraudulent dealing with the bank. 6 A. 338.

Assignment of note by president of bank without authority of directors is a voidable act which may be ratified. 73 A. 271. A deed signed by vice-president of a bank is prima facie valid, but want of authority to sign same may be shown to impeach such deed. 145 Mo. 418. Official salaries must be fixed by by-law or resolution made a matter of record. 36 A. 333. The existence of more directors than the charter allows does not invalidate their acts, the stockholders alone having the right to complain. 39 A. 453.

The directors are liable to bank or its receiver for loss accruing from loan to one person of more than one-fourth of its capital stock. 107 Mo. 577: 107 Mo. 594. Where a loan is made in excess of 25 per cent of its capital stock, the loan is valid and enforcible at least to the limit of 25 per cent. 120 Mo. 127. The directors are bound to know all that is done by the bank beyond the merest routine, and when, by the exercise of ordinary business care, they could have known that more than one-fourth of capital stock was loaned to one insolvent person or company, they became liable for losses growing out of such illegal loan, in an action at law by the bank while it is a going concern, or by the assignee after assignment, or, in action in equity, by the stockholders, in the event of the refusal of the assignee to bring suit. 148 Mo. 380; 183 Mo. 552.

Liability of sureries on bonds.-Recitals in bond that cashier has been appointed by board is conclusive on sureties. An increase of capital stock will not discharge sureties. 88 Mo. 160; s. c. 13 A. 313. Unless bond itself limits liabilities of suretis for a fixed period, and cashier continues in office without reappointment or re-election, sureties will be liable so long as he holds the position. 72 Mo. 597. Where teller is made cashier, and continues to act as teller, this does not release sureties on bond as cashier. 9 A. 578.

Cashier's powers. He cannot bind bank by permitting the application by an employe to his own use of the funds of the bank. 86 Mo. 260. Cashier has no power to discharge surety on note. 63 Mo. 24. Cashier cannot certify checks or issue certificates of deposits to himself. 84 Mo. 304. He cannot deal in real estate for bank. 18 A. 665.

If cashier acts for himself and in his own interest adversely to that of bank, the latter is not bound by his uncommunicated knowledge. 78 A. 463. But if he acts for bank within scope of his authority, his knowledge is imputed to bank. 89 A. 511. It is not negligence for cashier to leave door of vault open while leaving the bank for a few minutes, the assistant cashier who opened such vault being present. 204 Mo. 455. Cashier of private bank may sell and assign its sureties. 132 A. 354. A bank officer receiving deposits when he knows bank is insolvent is liable to depositor at suit of such depositor. 89 Mo. 51. When depositors assign their claims against officers to assignee, they part with their legal title to such claims, and cannot control suit thereon. 169 Mo. 400.

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788. Requirements of negotiable instruments. 789. Sum payable.

790. Conditional and unconditional promises to pay.

791. Instrument payable upon a contingency not negotiable.

792. Instrument containing promise to do any act in addition to payment not negotiable.

793. Validity of instrument not affected, how. 794. Payment on demand, when. 795. Payable to order, when.

796. Payable to bearer, when.

797. Terms, when sufficient.


834. Holder may strike out any indorsement unnecessary to his title.

835. Transfer vests in transferee, when. 836. Instruments when negotiated back. 837. Holder may sue.

838. Holder in due course.

839. Holder when not in due course. 840. Effect of notice of infirmity. 841. Title, when defective.

842. What constitutes notice of infirmity. 843. Holder in due course may enforce pay


844. Holders, other than in due course.
845. Burden of proof on holder when defective
title is shown.

798. Date, when deemed prima facie to be 846. Liability of maker.

799. Antedating or postdating.

800. Effect of inserting date in instrument undated.

801. Prima facie authority to fill blanks. 802. Uncompleted instruments, when invalid. 803. Instruments incomplete until delivered. 804. Rules of construction.

805. One who signs in trade or assumed name, when liable.

806. When agents may sign.
807. Agents, when not liable.
808. Signature by "procuration."

809. Indorsement or assignment by corporation or infant, effect of.

810. Forged signatures not binding. 811. Prima facie evidence of consideration. 812. Value, what constitutes.

813. Holder deemed for value, when.

814. Holder with lien deemed a holder for value.

815. Failure of consideration a defense, when. 816. "Accommodation party" defined. 817. Instrument, when negotiated. 818. Indorsement, where written and when sufficient.

819. Indorsement must be of entire instru


820. Special and blank indorsements.

821. Holder may convert blank into special indorsement.

822. Indorsements, when restrictive.

823. Rights conferred by restrictive indorsement.

824. Qualified indorsements. 825. Conditional indorsements.

826. Extent of special indorser's liability. 827. When payable to two or more payees, all must indorse.

828. Indorsed to "cashier," to whom payable. 829. Name of payee wrongly spelled. 830. Indorsement in representative capacity. 831. Effect of date after maturity. 832. Place of indorsement.

847. I iability of drawer. 848. The acceptor. 849. Indorser's liability. 850. Persons signing in blank before delivery. 851. Liability of persons negotiating. 852. Indorsers without qualification. 853. Indorsement of instruments negotiable by delivery.

854. Indorsers when liable in the order in which they indorse.

855. Liability of brokers.

856. Presentment for payment.

857. Presentment must be made, when. 858. Presentment for payment, to be made by whom, how.

859. Id. Where presented.

860. Id. Instrument must be exhibited. 861. Id. Presented during banking hours. 862. Party primarily liable deceased, presentment to whom.

863. Persons liable as partners, presentment made to whom.

864. When presentment to be made to all persons liable.

865. Presentment for payment not required, when.

866. When not required to charge an endorser. 867. Delay, when excused.

868. Presentment for payment dispensed with, when.

869. Instrument dishonored by nonpayment. when.

870. Right of recourse accrues to holder. 871. Days of grace-instruments falling due

on Sunday or Saturday, when presented. 872. Time of payment, how determined. 873. Instrument payable at bank, equivalent to order on bank.

874. Payment made in due course, when. 875. Notice of dishonor to be given. 876. Notice given by whom. 877. May be given by agent. 878. Notice by holder inures for benefit of all. 879. Notice by party entitled to give notice.

833. Negotiable until restrictively indorsed. 880. Instrument dishonored in hands of agent.


881. Written notice need not be signed. 882. Notice may be in writing or oral. 883. May be given to party or agent.

884. When party is dead, notice to be given
to personal representative.

885. Notice to one partner is notice to firm.
886. Notice to joint parties.
887. Notice to bankrupt.

888. Notice to be given, when.

889. Notice to residents, given when and

890. Notice to persons in different places.
891. Notice through postoffice sufficient.
892. When deemed deposited in postoffice.
893. Notice to antecedent parties.
894. Must be notified at given address.
895. Notice of dishonor may be waived.
896. Waiver, when binding.

Sec. 787. Title of chapter. the negotiable instrument law.


897. Waiver, effect of.

898. Notice of dishonor dispensed with, when. 899. Delay, when excused.

900. Notice not required, when.

901. Notice to indorser not required, when. 902. Notice of subsequent dishonor not required, when.

903. Omission of notice not prejudicial, when. 904. Negotiable instrument dishonored may be protested.

905. Negotiable instruments, when discharged.
906. Persons secondarily liable, how dis-

907. Instrument not discharged, when.
908. Holder may renounce rights.
909. Cancellations, when inoperative.
910. Instruments materially altered.
911. What are material alterations.

This chapter will be known as (R. S. 1909, § 9971.)

Historical.-Prior to 1905 Laws (1905, p. 243) the statutory law on this subject was composed of Secs. 443 to 463, inclusive. R. S. 1899.

The act of 1905 was entitled "An act relating to negotiable instruments, to revise and codify the law concerning same, and to establish a law uniform with that of other states on the same subject." This act did not expressly repeal the old law, but contained at its end the following section:

Inconsistent acts repealed. All acts and parts of acts not consistent herewith are hereby repealed. (Laws 1905, p. 265.)

Under this section the following sections of 1899 revision were omitted from the revision in 1909: Sections 443, 444, 445, 446, 447, 448, 457, 460. In addition to these, section 459, Rev. Stat. 1899, which was Sec. 10175, Rev. Stat. 1909, was held to be repealed by implication in the case of Bank v. Ettenson's Estate, 172 A. 404, 158 S. W. 448, and is therefore omitted from this revision. Sections 461, 462, R. S. 1899, were repealed in 1909 (Laws 1909, p. 127). Sec. 463, Rev. Stat. 1899, which was Sec. 10176, Rev. Stat. 1909, is omitted as duplication.

The negotiable instrument act proper of 1905 covers sections 9971 to 10165, inclusive, of the Rev. Stat. of 1909, which are sections 787 to 985, Revision of 1919. Sections 10166 to 10174 of Rev. Stat. 1909, which are sections 986 to 994, 1919, are carried over from former statutory law.

There have been no amendments of any kind adopted in the ten-year period from 1909 to 1919 except four measures passed by the legislature of 1919. See Laws 1919, p. 605, and now known as sections 976, 977, 978 and 979.

Sec. 788. Requirements of negotiable instruments.-An instrument to be negotiable must conform to the following requirements: (1) It must be in writing and signed by the maker or drawer; (2) must contain an unconditional promise or order to pay a sum certain in money; (3) must be payable on demand, or at a fixed or determinable future time; (4) must be payable to order or to bearer; and, (5) where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty. (R. S. 1909, § 9972.)

Requisites in general.- -Where a corporate bond of an issue secured by a mortgage recites that reference is made to the mortgage for the rights of the holders, and the mortgage stipulated certain conditions before suit, held such bond does not meet the requirements of this section. St. Louis Coal Co. v. Mining Co., 194

A. 598, 186 S. W. 1152.

Under this section, and section 10155, a bank check is a negotiable instrument. An inland bill of exchange. Fisher v. Bagnell, 194 A. 581, 186 S. W. 1097; Nelson v. Diffenderffer, 178 A. 48, 163 S. W. 271.

The term "to execute," as applied to notes, includes signing and delivering. Morris v. Butler, 138 A. 378, 122 S. W. 377. See, also, Sublette v. Brewington, 139 A. 410, 122 S. W. 1150.

The term "negotiable," in its enlarged signification, applies to any written security which may be transferred by endorsement or delivery, so as to vest in the endorsee the legal title, with the right to maintain suit thereon in his own name. Odell & Frink v. Gray, 15 Mo. 337.

Sec. 789. Sum payable.-The sum payable is a sum certain within the meaning of this chapter, although it is to be paid: (1) With interest; or (2) by stated installments; or (3) by stated installments, with a provision that upon default in payment of any installment or of interest, 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 attorney's fee, in case payment shall not be made at maturity. (R. S. 1909, § 9973.)

"Certainty as to amount of attorney fees."-A contract for an attorney's fee for collection on a note is valid and may be enforced. Prior to the present negotiable instrument law such a provision rendered a note not negotiable. Bank v. Lee, 182 A. 185, 168 S. W. 796. See, also, Davis McColl, 179 A. 198, 166 S. W. 1113, in which case there were both provisions for attorney fees and also for an extension of time for payment without notice. Both provisions failed to aeffct negotiability of note.

Provisions for the payment of exchange did not render amount uncertain. Bank v. Goode, 44 A. 129. Nor provisions for payment of interest. Id. Hope v. Barker, 112 Mo. 338, 20 S. W. 567.

Sec. 790. Conditional and unconditional promises to pay.An unqualified order or promise to pay is unconditional within the meaning of this chapter though coupled with: (1) An indication of a particular fund out of which reimbursements are 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 a promise to pay out of a particular fund is not unconditional. (R. S. 1909, § 9974.)

Notation on back of check "to be used as part renewal to the note" did not destroy its negotiability, but was the statement of the transaction which gave rise to the instrument under this section. Howard v. Bank, 198 A. 284, 200 S. W. 91. See, also, Crowe v. Harmon, 25 Mo. 417; Mense v. Osbern, 5 Mo. 544.

Sec. 791. Instrument, when payable-when not negotiable. -An instrument is payable at a determinable future time, within the meaning of this chapter, which is expressed to be payable: (1) At a fixed period after 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 certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect. (R. S. 1909, § 9975.)

Particular fund.—An instrument for the payment of money from a particular fund held not negotiable. McGee v. Larramore, 50 Mo. 425. Certainty as to time of payment not affected by use of terms on the above. Bank of Skeen, 101 Mo. 683, 14 S. W. 732.

Sec. 792. Instrument containing promise to do any act in addition to payment not negotiable. An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which: (1) Authorizes the sale of collateral securities 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) waives the benefit of any law intended for the advantage or protection of the obligor; or (4) gives the holder an election to require something to be done in lieu of payment of money. But nothing in this section shall validate any provision or stipulation otherwise illegal. (R. S. 1909, § 9976.)

Sec. 793. Validity of instrument not affected, how.-The validity and negotiable character of an instrument are not affected by the fact that: (1) It is not dated; or (2) does not specify the value given, 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; or (4) bears a seal; or (5) designates a particular kind of current money in which payment is to be made. 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. (R. S. 1909, § 9977.)

Operation in general.-In an action on a check it is sufficient to state that it was given in payment of an account stated and it is not necessary to allege how the indebtedness originally accrued. Nelson v. Diffenderffer, 178 A. 48, 163 S. W. 271. A check is a negotiable instrument and imports a consideration. Id. Where an undated note, payable four months after it was delivered to the holder on December 1, 1905, in payment of a note executed by the same parties maturing August 30, 1905, was dated by the agent of the holder December 30th, as the date of said note, without consent of indorsers of said note, held void as to said indorsers. Bank v. Day, 145 A. 410, 122 S. W. 756. As a necessity of statement in negotiable instrument that same was "for value received," prior to the act of 1905, see Lowry v. Danforth, 95 A. 441, 69 S. W. 39.

Sec. 794. Payment on demand, when.-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 expressed. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting or indorsing it, payable on demand. (R. S. 1909, § 9978.)

Payable on demand.--A bill indorsed after due becomes a new bill at sight, or, as expressed in our present statute, a note payable on demand. Hawkins v. Wiest, 167 A. 439, 151 S. W. 789. Where defendant, after obtaining judgment upon note against makers, takes possession of it and reissued it though after due, it became a new instrument payable on demand. Id.

As to effect, under prior law, of failure to fix time of payment, see Mason v. Patton, 1 Mo. 279; Collins v. Trotter, 81 Mo. 275; First Nat. Bank v. Hunt, 25 A. 179.

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