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Who Are Holders for

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WHO ARE HOLDERS FOR VALUE? If value has at any time been given for a bill, the holder of it is a holder for value as regards the acceptor and all parties prior to such time; thus, B owes C $5o. In order to pay C, A draws at B's request a bill on B for $5o in favor of C. C is a holder for value and can sue A, though A has received no value. (Benj.'s Chalmers, B. N. & Checks, Art. 83.) So it will not matter to the holder that value was given to a person who never signed the instrument, or whose signature has been struck out. Thus a note may be made to an indi vidual for a debt due to a company of which the individual is an agent (Lomas v. Bradshaw, 19 L. J. C. P., 273); or to a public officer for a debt due the State (Hunter v. Field, 20 Ohio, 340). So where the note has been indorsed in blank without value, and the indorsee indorses to another for value, the holder may sue all the parties. (Brum mel v. Enders, 18 Gratt., 905.) A person must receive a bill in payment of a debt due him if he is to be considered a holder for value of a bill of his debtor's. The holder of a bill who receives it from a holder for value, but does not himself give value for it, has all the rights of a holder for value against all parties to the bill except the person from whom he receives it. (Frederick v. Winans, 51 Wis., 472; Rickle v. Dow, 39 Mich., 91.) But a holder for value may or may not be a holder for value without notice and in good faith, and if it can be shown that he is not a holder in good faith and without notice, this will sometimes defeat his (Ethridge v. Gallagher, 55 Miss., 464.) A holder having a lien on a bill, as a banker or broker, arising either by agreement or by implica tion of law, is held to be a holder for value to the extent of the sum for which he has a lien. And the holder of a bill taken as collateral security is a holder for value where the debt was created at the time of the transfer, or where taken for a pre-exist ing debt and there is an express or implied agree ment to extend the time of payment of such debt, or other like consideration. (Logan v Smith, 62 Mo., 455; Moore v. Ryder, 65 N. Y., 438; Stotts v. Byers, 17 Ia., 303.) The courts are divided where a note is taken for a pre-existing debt and no other consideration appears, some holding that the party is a holder for value because of his responsibility as a party to the instrument. (Swift v. Tyson, i6 Pet. i; Comstock v. Hier, 73 N. Y., 269.) Others deny this, but regard him as a holder for value as against the claim that the paper was given for accommodation. (Cummings v. Boyd, 83 Pa. St., 376.) A bill will be presumed to have been negotiated for value and not to have been pledged or given as collateral security, but this presumption may be disproved. (Trustees v. Hill, 12 Ia., 462.)

value, holder, bill and debt