This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A holder, to be a bona fide holder, must take the instrument before maturity. If he takes after maturity he gets no better title than that of his indorser as against defenses which the maker may interpose and which arise out of the instrument itself.1 The fact that the maker left the instrument in the hands of the payee after it was paid at maturity, and the fact that the payee altered the instrument as to the date and time of payment, so that it appears on its face that it is not yet due, does not make the subsequent indorsee for value and without notice a bona fide holder.2 One who acquires overdue interest coupons on a municipal bond is not a holder for value.3 A note indorsed over on the second day of grace is indorsed before maturity.4 A note is not due before the time fixed in the body of the note for the payment of the principal, although a memorandum on the margin shows that partial payments will be made before the date of maturity and before the date of the transfer of such instrument,5since such notation gives to the maker the right to pay such instrument at maturity or to make such partial payments before maturity.6 The fact that the transferor has acted in some respects as the agent of the maker, does not protect a transferee after maturity from the defense of payment.7 An extension of time indorsed on a note prolongs maturity.8 The fact that a note contains a provision for an extension of time upon payment of part of the principal at maturity, does not operate as such an extension that a transfer of such note after the period of maturity named therein is to be regarded in effect as a transfer before maturity,9 especially if such payments have not been made.10 A provision that failure to pay a note of a series when it is due operates automatically to make the remaining notes due, is to be given such effect as against one who knows of such provision; and he can not be a bona fide purchaser of another note in such series, even if by the terms of such note it is not yet due.11 By the express provisions of General Code, Section 4287, of the Civil Code of Georgia of 1910, knowledge that one of a series of notes is due and unpaid prevents the transferee of another note of such series from being a bona fide holder thereof, even if such note is not yet due by its terms.12
Ohio. Roxborough v. Messick, 6 0. S. 448, 67 Am. Dec. 346; Renzor v. Hatch, 7 O. S. 248 (obiter, as the note was held valid as between the original parties); Cleveland v. Bank, 16 O. S. 236, 88 Am. Dec. 445.
Pennsylvania. Altoona, etc., Bank v. Dunn, 151 Pa. St. 228, 31 Am. St. Rep. 742, 25 Atl. 80.
Tennessee. Bank v. Johnston, 105 Tenn. 521, 59 S. W. 131; Badger Machinery Company v. United States Bank ft Trust Co., 166 Wis. 18 [sub nomine, Badger Machinery Co. v. Columbia County Electric Light ft Power Co., 163 N. W. 188].
9 Birket v. Elward, 68 Kan. 295, 104 Am. St. Rep. 405, 64 L. R. A. 568, 74 Pac. 1100.
10 California. Payne v. Bensley, 8 Cal. 260, 68 Am. Dec. 318. '
Illinois. Zollman v. Jackson Trust ft Savings Bank, 238 111. 290, 32 L. R. A. (N.S.) 858, 87 N. E. 297.
Iowa. Ruddick v. Lloyd, 15 Ia. 441, 83 Am. Dec. 423; Voss v. Chamberlain, 139 Ia. 569, 19 L. R. A. (N.S.) 106, 117 N. W. 269.
New York. American Exchange National Bank v. N. Y. Packing Co., 148 N. Y. 698, 43 N. E. 16
Oklahoma. Farmers' National Bank v. McCall, 25 Okla. 600, 26 L. R. A. (N.S.) 217, 106 Pac. 866.
11 Alabama. Louisville Banking Co. v. Howard, 123 Ala. 380, 82 Am. St. Rep. 126, 26 So. 207.
Missouri. Crawford v. Spencer, 92 Mo. 498, 1 Am. St. Rep. 745, 4 S. W. 713.
Ohio. First National Bank v. Fowler, 36 O. S. 524, 38 Am. Rep. 610.
Oklahoma. Farmers' National Bank v. McCall, 25 Okla. 600, 26 L. R. A. (N.S.)-217, 106 Pac. 866.
Wisconsin. Shaffer v. Peavey, 161 Wis. 149, 152 N. W. 829
12 Zollman v. Jackson Trust ft Savings Bank, 238 111. 290, 32 L. R. A. (N.S.) 858, 87 N. E. 297; Voss v. Chamberlain, 139 Ia. 569, 19 L. R. A. (N.S.) 106, 117 N. W. 269; American Exchange National Bank v. Packing Co., 148 N. Y. 698, 43 N. E. 168.
13 Kingsland v. Pryor, 33 O. S. 19. 14 Lyons v. Benney, 230 Pa. St. 117, 34 L. R. A (N.S.) 105. 79 Atl. 250.
1 United States. Morgan v. United States, 113 U. S. 476, 28 L. ed. 1044.
Alabama. Marshall v. Shift, 130 Ala. 645, 30 So. 335.
Arkansas. Calhoun v. Ainsworth, 118 Ark. 316, L. R. A. 1915E, 395, 176 S. W. 316.
California. Risley v. Gray, 98 Cal. 40, 32 Pac. 884.
Connecticut. Fairfield County National Bank v. Hammer, 89 Conn. 592, L. R. A. 1918E, 163, 95 Atl. 31.
Florida. Tucker v. Fouts, - Fla. - , L. R. A. 1917F, 916, 76 So. 130.
Georgia. Harrell v. Banking Co., 1ll Ga. 846, 36 S. E. 460; Railway Postal Clerks' Investment Association v. Wells, 147 Ga. 377, 94 S. E. 228.
Iowa. State Trust Co. v. Turner, 111 Ia. 664, 53 L. R. A. 136, 82 N. W. 1029; Freittenburg v. Rubel, 123 Ia. 154, 98 N. W. 624.
Kansas. Security State Bank v. Clarke, 99 Kan. 18, 160 Pac. 1149.
Kentucky. Bank v. Pennsylvania & Kentucky Fire Brick Co., 175 Ky. 192, L. R. A. 1918E, 165, 194 S. W. 110; Ohio Valley Banking & Trust Co. v. Great Southern Fire Insurance Co., 176 Ky. 694, 197 S. W. 399.
Missouri. Loewen v. Forsee, 137 Mo. 29, 59 Am. St. Rep. 489, 38 S. W. 712; Bacon v. Reichardt, - Mo. - , 208 S. W. 24.
Montana. Northwestern Improvement Co. v. Rhoades, - Mont. - , 158 Pac. 832.
Nebraska. Koehler v. Dodge, 31 Neb. 328, 28 Am. St. Rep. 518, 47 N. W. 913; First National Bank v. Bank, 34 Neb. 71, 33 Am. St. Rep. 618, 15 L. R. A. 386, 51 N. W. 305.
Tennessee. Easley v. East Tennessee National Bank, 138 Tenn. 369, L. R. A. 1918C, 689, 198 S. W. 66.
Washington. Hanson v. Roesch, 104 Wash. 257, 176 Pac. 349.
Wisconsin. Union Investment Co. v. Epley, 164 Wis. 438, 160 N. W. 175.
See also, Rockefeller v. Ringle, 77 Kan. 515, 15 L. R. A. (N.S.) 737, 94 Pac. 810.