ART. 13] HOLDER IN DUE COURSE. 337

CHAPTER V—Rights of Holder.

70. The holder of negotiable instrument may sue thereon in
his own name; and payment to him in due course discharges
the instrument.

71. A holder in due course is a holder who has taken the
instrument under the following conditions:

1. That it is complete and regular on its face.

2. That he became the holder of it before it was overdue,
and without notice that it had been previously dishonored, if
such was the fact.

3. That he took it in good faith and for value.

4. That at the time it was negotiated to him he had no notice
of any infirmity in the instrument or defect in the title of the
person negotiating it.

72. Where an instrument payable on demand is negotiated
an unreasonable length of time after its issue, the holder is not
deemed a holder in due course.

73. Where the transferee receives notice of any infirmity in
the instrument or defect in the title of the person negotiating
the same before he has paid the full amount agreed to be paid
therefor, he will be deemed a holder in due course only to the
extent of the amount theretofore paid by him.

74. The title of a person who negotiates on instrument is
defective within the meaning of this act, when he obtained the
instrument, or any signature thereto, by fraud, duress, or force
and fear, or other unlawful means, or for an illegal considera-
tion, or when he negotiates it in breach of faith, or under such
circumstances as amounts to a fraud.

75. To constitute notice of an infirmity in the instrument or
defect in the title of the person negotiating the same, the person
to whom it is negotiated much have had actual knowledge of
the infirmity or defect, or knowledge of such facts that his
action in taking the instrument amounted to bad faith.

Valley Savings Bank v. Mercer, 97 Md. 479 and 461.

76. A holder in due course holds the instrument free from
any defect of title of prior parties, and free from defenses
available to prior parties among themselves, and may enforce
payment of the instrument for the full amount thereof against
all parties liable thereon.
22