Transfer of a negotiable instrument as collateral security for a contemporaneous debt, is a transfer for value.1 One who takes a note as collateral security remains a holder for value, although he has extended the time of the original indebtedness.2 In some jurisdictions, an indorsee for collateral security is a bona fide holder only to the amount of his claim against his debtor.3 If a defense exists which can be interposed against any but a bona fide holder, he can recover only the amount of his claim,4 and if such debt is paid he ceases at once to be a bona fide holder,5 nor can the original holder claim any protection because the instrument has once been pledged as collateral.6

1 United States. Bank v. Mfg. Co., 52 Fed. 98, 18 L. R. A. 201.

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

Illinois. Justice v. Stonecipher, 267 111. 448, 108 N. E. 722.

Iowa. Des Moines National Bank v. Chisholm, 71 Ia. 675, 33 N. W. 234.

Kentucky. Citizens' Bank v. Waddy, 126 Ky. 169, 103 S. W. 249 [sub nomine, Citizens' Bank v. Weakley, 11 L. R. A. (N.S.) 598]; Harrison v. Nichol-son-Foley Co., 179 Ky: 513, 200 S. W. 929.

Minnesota. St. Paul Gaslight Co. v Sandstone, 73 Minn. 225, 75 N. W. 1050.

Mississippi. First National Bank v. John McGrath & Sons Co,. 1ll Miss. 872, 72 So. 701.

Nebraska. Connecticut, etc., Co. v. Fletcher, 61 Neb. 166, 85 N. W. 59; Connecticut, etc., Co. v. Trumbo (Neb.) 90 N. W. 216.

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

South Carolina. Union National Bank v. Cook, - S. Car. - , 96 S. E. 484.

Utah. Interstate Trust Co. v. Head-lund, - Utah. - , 171 Pac. 515.

Vermont. Noyes v. Landon, 59 Vt. 569, 10 Atl. 342.

Virginia. Colona v. Parksley National Bank, 120 Va. 812, 92 S. E. 979.

Washington. Citizens' Bank & Trust Co. v. Limpright, 93 Wash. 361, 160 Pac. 1046.

Wisconsin. Bowman v. Van Keuren, 29 Wis. 209, 9 Am. Rep. 554.

This is the rule under the Negotiable Instruments Law. Burnham Loan & Investment Co. v. Sethman, - Colo. - , 171 Pac. 884; Harrison v. Nicholson-Foley Co., 179 Ky. 513, 200 S. W. 929; First National Bank v. John McGrath & Sons Co., 1ll Miss. 872, 72 So. 701; Interstate Trust Co. v. Headlund, - Utah - , 171 Pac. 515.

2 First National Bank v. John McGrath & Sons Co., 1ll Miss. 872, 72 So. 701.

3 Crewdson v. Shultz, 254 Fed. 24.

See Sec. 2367.

4 United States. Crewdson v. Shultz, 254 Fed. 24.

Georgia. Linderman v. Atkins, 143 Ga. 366, 85 S. E. 101.

Massachusetts. Paika v. Perry, 225 Mass. 563, 114 N. E. 830.

Minnesota. St. Paul National Bank v. Cannon, 46 Minn. 95, 24 Am. St. Rep. 189, 48 N. W. 526.

Missouri. Crawford v. Spencer, 92 Mo. 498, 1 Am. St. Rep. 745, 4 S. W. 713.

Washington. Citizens' Bank & Trust Co. v. Limpright, 93 Wash. 361, 160 Pac. 1046.

5 First National Bank v. Mann, 94 Tenn. 17, 27 Am. St. Rep. 565, 27 L. R. A. 565, 27 S. W. 1015.

6 Booher v. Allen, 153 Mo. 613, 55 S. W. 238

Whether collateral security for an antecedent debt constitutes "value," is a question on which authorities are in conflict, some courts holding that it. is,7 others that it is not.8 The fact that the United States supreme court has taken this view and that it is very important to secure uniformity on commercial matters through the United States, has driven some state courts to adopt this view in spite of personal opinions in favor of the theory that a transfer of collateral security for a pre-existing debt is not a consideration.9 If any right of value is surrendered by the party taking the collateral security,10 as where in consideration of such collateral he agrees upon an extension of time,11 or surrenders other collateral,12 or surrenders other collateral and gives an extension of time,13he is a holder for value. The fact that a bank examiner has been induced to regard a gratuitous negotiable instrument as a part of the assets of the bank, prevents the maker thereof from setting up the defense of want of consideration after the bank has passed into the hands of a receiver.14

7 United States. Swift v. Tyson, 41 U. S. (16 Pet.) 1, 10 L. ed. 865 (a case arising in New York, in which the United States supreme court refused to follow the New York rule); Hamilton v. Fowler, 09 Fed. 18, 40 C. C. A. 47.

Arkansas. Exchange National Bank v. Coe, 94 Ark. 387, 31 L. R. A. (N.S.) 287, 127 S. W. 453; Miles v. Dodson, 102 Ark. 422, 50 L. R. A. (N.S.) 83, 144 S. W. 908.

California. Sackett v. Johnson, 54 Cal. 107; Pezzoni v. Greenwell, - Cal. - , 174 Pac. 60.

Georgia. Linderman v. Atkins, 143 Ga. 366, 85 S. E. 101.

Illinois. Bank v. Adam, 138 111. 483, 28 N. E. 955.

Kansas. National Bank v. Dakin, 54 Kan. 656, 45 Am. St. Rep. 299, 39 Pac. 180; Birket v. Elward, 68 Kan. 295, 104 Am. St. Rep. 405, 64 L. R. A. 568, 74 Pac. 1100.

Massachusetts. Fisher v. Fisher, 98 Mass. 303.

Minnesota. Rosemond v. Graham, 54 Minn. 323, 40 Am. St. Rep. 336, 56 N. W. 38; Snelling State Bank v. Clasen, 132 Minn. 404, 157 N. W. 643; Bank v. Beecher, 133 Minn. 81, 157 N. W. 1070.

Montana. Yellowstone National Bank v. Gagnon, 19 Mont. 402, 61 Am. St. Rep. 520, 44 L. R. A. 243, 48 Pac. 762.

Oklahoma. Ricks v. Johnson, - Okla. - , 162 Pac. 476.

Tennessee. First National Bank v. Stockell, 92 Tenn. 252, 20 L. R. A. 605, 21 S. W. 523.

West Virginia. Mercantile Bank v. Boggs, 48 W. Va. 289, 37 S. E. 587.

Washington. German-American Bank v. Wright, 85 Wash. 460, 148 Pac. 769.

See also Voss v. Chamberlain, 139 la. 369, 19 L. R. A. (N.S.) 106, 117 N. W. 269. See, Antecedent Debt as Consideration Under Negotiable Instruments Law, by Amasa M. Eaton, 23 Yale Law Journal, 293.

This is the rule under the Negotiable Instruments Law. Davies v. Simpson, - Ala. - , 79 So. 48; Vogler v. Manson, - Ala. - , 76 So. 117; German-American Bank v. Wright, 85 Wash. 460, 148 Pac. 769.

8 Iowa. Galbraith v. McLaughlin, 91 Ia. 399, 59 N. W. 338; Cable v. Buchanan, 109 Ia. 661, 80 N. W. 1066.

Kentucky. May v. Quimby. 66 Ky. (3 Bush.) 96.

Maine. Smith v. Bibber, 82 Me. 34, 17 Am. St. Rep. 464, 19 Atl. 89.

Mississippi. First National Bank v. Strauss, 66 Miss. 479, 14 Am. St. Rep. 579, 6 So. 232.

Michigan. Maynard v. Davis, 127 Mich. 571, 86 N. W. 1051.

Missouri. Loewen v. Forsee, 137 Mo. 29, 5!) Am. St. Rep. 489, 38 S. W 712.

New York. United States National Bank v. Ewing, 121 N. Y. 506, 27 Am. St. Rep. 615, 30 N. E. 501; Coddington v. Bay, 20 Johns. (N. Y.) 637, 11 Am. Dec. 342. (The leading case on this point.)

North Carolina. Brooks v. Sullivan, 129 N. Car. 190, 39 S. E. 822.

North Dakota. Porter v. Andrus, 10 N. D. 558, 88 N. W. 567.