Fraud in the inducement,1 constructive fraud,2 duress,3 ultra vires, where the contract might under some facts be within the power of the corporation, but under the facts of the particular case is not;4 want of authority in the agent indorsing the instrument if under the circumstances apparent he might have had power to indorse;5 the date of execution;6that delivery was conditional only,7 as that the instrument, though delivered, was not to go into effect until signed by additional securities;9that the instrument was authorized only for a purpose different from that to which it has been applied;9 want of consideration;10 indorsement in blank by a prior holder for collection;11 illegality,12 such as usury,13 gambling;14 that the note was given by way of compounding a felony;15 that the note was given to an unlicensed physician for professional services;16or that it was given for stock which was sold without complying with statutory requirements;17 or was given to a foreign corporation which has not complied with the law authorizing it to do business in that state;18 or that it was given in violation of a statute which required the consideration to appear in detail on its face;19 fraud against the creditors of the maker;20 that the taking of the note is obtaining a preference under the bankruptcy act;21 or discharge, as by failure of consideration,22 or partial failure of consideration;23 payment;24 discharge by novation between the original parties;25 or by substitution of other notes for the originals;26 or a contract by a prior holder with the maker, giving an extension of time which would release sureties as to such holder;27 or a contract as to collateral securities,28 or set-off,29 are defenses, none of which can be interposed as against a bona fide holder for value. So if a negotiable instrument payable in legal effect to bearer is stolen after delivery, it is valid in the hands of a bona fide holder.30

3 Section 57 of the Negotiable Instruments Law.

1 United States. Swift v. Tyson, 41 U. S. (16 Pet.) 1, 10 L. ed. 865; Chilton v. Gratton, 82 Fed. 873.

Arizona. Phoenix Safety Investment Co. v. Michaels, - Ariz. - , 176 Pac. 587.

Arkansas. Conqueror Trust Co. v. Reves Drug Co., 118 Ark. 222, 176 S. W. 119.

Connecticut. Rowland v. Fowler, 47 Conn. 347.

District of Columbia. Thompson v. Franklin National Bank, 45 D. C. App. 218.

Georgia. Walters v. Palmer, 110 Ga. 776, 36 S. E. 79.

Illinois. Taft v. Myerscough, 92 111. App. 560.

Indiana. Brickley v. Edwards, 131 Ind. 3, 30 N. E. 708.

Iowa. Shenandoah National Bank v. Marsh, 89 Ia. 273, 48 Am. St. Rep. 381, 56 N. W. 458; Gray v. Bricker, 182 Ia. 816, 166 N. W. 284.

Louisiana. McCowen v. Barnett, 136 La. 994, 68 So. 102.

Massachusetts. Potter v. Belden, 105 Mass. 11; Paika v. Perry, 225 Mass. 563, 114 N. E. 830.

Michigan. First National Bank v. Houseknecht, 121 Mich. 313, 80 N. W.

13.

Missouri. Fitzgerald v. Barker, 96 Mo. 661, 9 Am. St. Rep. 375, 10 S. W. 45, s. c, 85 Mo. 13, 70 Mo. 685.

New York. First National Bank v. Bank, 170 N. Y. 88, 62 N. E. 1089.

Oklahoma. First National Bank v.

Walker, 39 Okla. 620, 50 L. R. A. (N.S.) 1115, 136 Pac. 408.

Oregon. Everding v. Toft, 82 Or. 1, 150 Pac. 757, 160 Pac. 1160.

South Carolina. McLaughlin v. Braddy, 63 S. Car. 433, 90 Am. St. Rep. 681, 41 S. E. 523; Edens v. Gibson. 100 S. Car. 353, 84 S- E. 1005; Farmers' & Mechanics' Bank v. Whitehead, 105 S. Car. 100, 89 S. E. 657.

Tennessee. Tradesmen's National Bank v. Looney, 99 Tenn. 278, 63 Am. St. Rep. 830, 38 L. R. A. 837, 42 S. W. 149.

2 National City Bank v. Shelton Electric Co., 96 Wash. 74, 164 Pac. 933.

3 State v. Wegener, 180 Ia. 102, 162 N. W. 1040; Vinton v. King, 86 Mass. (4 All.) 562; Farmers', etc., Bank v. Butler, 48 Mich. 192, 12 N. W. 36; Keller v. Schmidt, 104 Wis. 596, 80 N. W. 935.

Contra, Palmer v. Poor, 121 Ind. 135, 6 L. R. A. 469, 22 N. E 984. (But in this case the evidence showed that there was no delivery, the note being forcibly taken from the maker by the payee.) Barry v. Assurance Society, 59 N. Y. 587.

Even a bona fide holder may be compelled to exhaust his remedies against one of two joint endorsers if the other was subjected to undue influence, before proceeding against such other. Bensel v. Anderson, 85 N. J. Eq. 391, 96 Atl. 910.

4 Credit Co. v. Machine Co.. 54 Conn. 357, 1 Am. St. Rep. 123. 8 Atl. 472; Thompson v. West, 59 Neb. 677, 49 L. R. A. 337, 82 N. W. 13.

5 Johnson v. Harrison, 177 Ind. 240, 39 L. R. A. (N.S.) 1207, 97 N. E. 930; Toms v. Jones, 127 N. Car. 464, 37 S. E. 480; Perry v. Oerman, 63 W. Va 566, 15 L. R. A. (N.S.) 310, 60 S. E. 604.

As to a bona fide holder, a bank is bound by a check, regularly certified, even if it proves to have been an overdraft. State v. Scarlett, 91 N. J. L. 200, 2 A. L. R. 83, 102 Atl. 160.

6 Gray, etc., Co. v. Bank, 109 Ky. 694, 60 S. W. 537.

7 Jefferson County Savings Bank v. Compton, 192 Ala. 16, 68 So. 261; Waukee Savings Bank v. Jones, 179 Ia. 261, 159 N. W. 691; German-American Bank v. Wright, 85 Wash. 460, 148 Pac. 769.

8 Benton County Savings Bank v. Boddicker, 105 Ia. 548, 67 Am. St. Rep. 310, 45 L. R. A. 321, 75 N. W. 632.

9 Rusmissell v. White Oak Stave Co., 80 W. Va. 400, 92 S. E. 672.

10 California. Siebe v. Machine Works, 86 Cal. 390, 25 Pac. 14.

Georgia. Parr v. Erickson, 115 Ga. 873, 42 S. E. 240.

Illinois. Martina v. Muhlke, 186 111. 327, 57 N. E. 954.

Iowa. Bankers', etc. Bank v. Lathe Co. (Ia.), 90 N. W. 612.

Kentucky. Gaertner v. Kraft, 164 Ky. 712, 176 S. W. 207.

Maryland. Williams v. Huntington, 68 Md. 590, 6 Am. St. Rep. 477, 13 Atl. 336.

Massachusetts. Produce Exchange Trust Co. v. Bieberbach, 176 Mass. 577, 58 N. E. 162.

Montana. First National Bank v. Barrett, 52 Mont. 359, 157 Pac. 951.

Pennsylvania. Ross v. Eyre, 260 Pa. St. 393, 103 Atl. 894.

Tennessee. Bearden v. Moses, 75 Tenn. (7 Lea) 459.

Utah. Salisbury v. Stewart, 15 Utah 308, 62 Am. St. Rep. 934, 49 Pac. 777.

Vermont. Parry v. Empire Granite & Quarry Co., 90 Vt. 231, 97 Atl. 985.

Washington. National City Bank v. Shelton Electric Co., 96 Wash. 74, 164 Pac. 933.

11 Coors v. Bank, 14 Colo. 202, 7 L. R. A. 845, 23 Pac. 328.

12 Sec, however, as to the effect of special statutory provisions. Sec. 2351.

13 United States. Hamilton v. Fowler, 99 Fed. 18, 40 C. C. A. 47.

Alabama. Vogler v. Manson, - Ala. - , 76 So. 117.

Kentucky. Newman v. Blades (Ky.), 54 S. W. 849.

New York. Schlesinger v. Gilhooly, 189 N. Y. 1, 81 N. E. 619.

Virginia. Lynchburg National Bank v. Scott, 91 Va. 652, 50 Am. St. Rep. 800. 29 L. R. A. 827, 22 S. E. 487.

Washington. Haynes v. Gay, 37 Wash. 230. 79 Pac. 794.

14 Wirt v. Stubblefield. 17 D. C. App. 283; Whitman v. Fournier, - Mass. - , 125 N. E. 303.

«

15 American National Bank v. Madison, 144 Ky. 152, 38 L. R. A. (N.S.) 597, 137 S. W. 1070.

16 Citizens' State Bank v. Nore, 67 Neb. 69, 60 L. R. A. 737, 93 N. W. 160.

17 Evans Co. v. Bryson, 146 Ga. 278, 91 S. E. 71.

18 Commercial National Bank v. Jordan, 71 Fla. 566, 71 So. 760; First National Bank v. Utterback, 177 Ky. 76, L. R. A. 1918B, 838, 197 S. W. 534; Finseth v. Scherer, 138 Minn. 355, 165 N. W. 124; National Bank v. Pick, 13 N. D. 74, 99 N. W. 63.

19 As where it was given for lightning rods. Arnd v. Sjoblom, 131 Wis. 642, 10 L. R. A. (N.S.) 842, 111 N. W. 666.

20 Holmes v. Gardner, 50 O. S. 167, 20 L. R. A. 329, 33 N. E. 644.

21 Thompson v. Franklin National Bank, 45 D. C. App. 218.

22 Alabama. King v. Bank, 127 Ala. 266, 28 So. 658.

Colorado. Burnham Loan & Investment Co. v. Sethman, - Colo. - , 171 Pac. 884.

Georgia. English-American, etc., Co. v. Hiers, 112 Ga. 823, 38 S. E. 103.

Mississippi. Huddleston v. McMillan, 112 Miss. 168, 72 So. 892.

Missouri. First National Bank v. Skeen, 101 Mo. 683, 11 L. R. A. 748, 14 S. W. 732.

New York. Mayer v. Heidelbach, 123 N. Y. 332, 9 L. R. A. 850, 25 N. E. 416.

North Carolina. American National Bank v. Hill, 169 N. Car. 235, 85 S. E 209.

Oklahoma. Conqueror Trust Co. v. Simmon, - Okla. - , 162 Pac. 1098; Producers' National Bank v. Elrodk, - Okla. - , L. R. A. 1918F, 1016, 173 Pac. 659.

Oregon. Clarinda Trust & Savings Bank v. Doty, 83 Or. 214, 163 Pac. 418.

South Carolina. Iowa City State Bank v. Hoefer, 101 S. Car. 207, 85 S. E. 406.

South Dakota. Coleman v. Valentin, 39 S. D. 323, 164 N. W. 67.

Texas. Brannin v. Richardson, 108 Tex. 112, 185 S. W. 562.

Vermont. Parry v. Empire Granite & Quarry Co., 90 Vt. 231, 97 Atl. 985; City Savings & Trust Co. v. Peck, - Vt. - , 103 Atl. 1020.

Virginia. Payne v. Zell. 98 Va. 294, 36 S. E. 379.

Washington. Fisk Rubber Co. v. Pinkcy, 100 Wash. 220, 170 Pac. 581.

West Virginia. Mason v. Shaffer, 82 W. Va. 632, 96 S. E. 1023.

23 Deming Investment Co. v. Shannon, - Okla. - , 162 Pac. 471.

24 Arkansas. Calhoun v. Ainsworth, 118 Ark. 316, L. R. A. 1915E, 395, 176 S. W. 316; Hamilton National Bank v. Emigh, 127 Ark. 545, 192 S. W. 913; Manley Carriage Co. v. Fowler. 128 Ark. 299, 194 S. W. 708.

Illinois. Hunter v. Clarke. 184 111. 158, 75 Am. St. Rep. 160, 56 N E. 297.