MARVIN MANDEL, Governor

173

holder in due coarse acting in good faith

(i) To the maker of a note; or

(ii) To the drawer of a draft whether or not
the drawer is also the drawee; or

(iii) To the acceptor of a draft with respect
to an alteration made prior to the acceptance if the
holder in due coarse took the draft after the acceptance,
even though the acceptance provided "payable as
originally drawn" or equivalent terms; or

(iv) To the acceptor of a draft with respect
to an alteration made after the acceptance,

(2)   Any person who transfers an instrument and
receives consideration warrants to his transferee and if
the transfer is by indorsement to any subsequent holder
who takes the instrument in good faith that

(a)    Re has a good title to the instrument or
is authorized to   obtain payment or acceptance on behalf
of one who has a   good title and the transfer is otherwise
rightful; and

(b)   All signatures are genuine or authorized;
and

(c)    The instrument has not been materially
altered; and

(d)   No defense of any party is good against
him; and

(e)    He has no knowledge of any insolvency
proceeding instituted with respect to the maker or
acceptor or the drawer of an unaccepted instrument.

(3)     By transferring "without recourse" the
transferor limits the obligation stated in subsection (2)
(d) to a warranty that he has no knowledge of such a
defense.

(4)   A selling agent or broker who does not disclose
the fact that he is acting only as such gives the
warranties provided in this section, but if he makes such
disclosure warrants only his good faith and authority.

3-418. Finality of payment or acceptance.

Except for recovery of bank payments as provided in
the (subtitle] TITLE on bank deposits and collections
([subtitle] TITLE 4) and except for liability for breach