Editor's notes.

- In light of the similarity of the provisions, decisions under former Code 1895, § 3705, former Ga. L. 1924, p. 126, §§ 31 and 52, former Code 1933, §§ 14-401, 14-402, 14-403, 14-412, and 14-420, and former Code Section 11-3-202 are included in the annotations for this section.

"Holder" transferee.

- Only a negotiation, not an assignment, can make a transferee a "holder" of a negotiable instrument. Bank of Danielsville v. Seagraves, 167 Ga. App. 135, 305 S.E.2d 790 (1983) (decided under former Code Section11-3-202).

Payee alone is capable of negotiating instrument payable to a named payee or order, and until payee has done so it is not in circulation. Davis v. National City Bank, 46 Ga. App. 194, 167 S.E. 191 (1932) (decided under former Code 1933, § 14-401).

Note in possession of payee is presumed to be owned by payee. Willoughby v. Newman, 46 Ga. App. 377, 167 S.E. 783 (1933) (decided under former Code 1933, § 14-401).

Intermediary in possession of note payable to order of another.

- Intermediary in possession of note payable to order of some other person, although the intermediary might have an equity therein, is incapable of negotiating it, even to payee designated by instrument. Davis v. National City Bank, 46 Ga. App. 194, 167 S.E. 191 (1932) (decided under former Code 1933, § 14-401).

Bank as holder of instrument.

- Even if payee does not personally endorse instrument, a bank is holder of that instrument as long as it was issued to the bank. Pazol v. Citizens Nat'l Bank, 110 Ga. App. 319, 138 S.E.2d 442 (1964) (decided under former Code Section11-3-202).

Cited in Gerber & Gerber, P.C. v. Regions Bank, 266 Ga. App. 8, 596 S.E.2d 174 (2004).

Essential in case of order paper.

- Delivery is an essential element of negotiation in the case of order paper. Bank of Danielsville v. Seagraves, 167 Ga. App. 135, 305 S.E.2d 790 (1983) (decided under former Code Section11-3-202).

Only bearer paper is negotiated by mere delivery.

- The only note which can be negotiated by mere delivery is one expressly made payable, or which has become payable, to bearer. Davis v. National City Bank, 46 Ga. App. 194, 167 S.E. 191 (1932) (decided under former Code 1933, § 14-401).

Sufficiency of constructive delivery.

- Where there is no actual delivery of order paper, constructive delivery may be sufficient to effect negotiation where there is delivery of a written assignment without delivery of the negotiable instrument and it is the clear intent of the parties to effect such delivery and to transfer title to the negotiable instrument. Bank of Danielsville v. Seagraves, 167 Ga. App. 135, 305 S.E.2d 790 (1983) (decided under former Code Section11-3-202).

Purpose of former endorsement requirements.

- Purpose of former Code 1933, § 14-403, requiring endorsement of the entire instrument or the residue, was to prevent payee or payees from varying or enlarging contract initially made by maker of instrument. When a maker executed a negotiable instrument payable to one payee or more, jointly, the maker was subjected to one lawsuit, and if the payee in instrument transferred it to two or more endorsees severally, such endorsement subjected maker to two or more suits to which the maker had not been liable at time executed instrument. Hodson v. Scoggins, 102 Ga. App. 44, 115 S.E.2d 715 (1960) (decided under former Code 1933, §§ 14-403 and 14-412).

Idea of endorsement has no relevance while note remains in hands of payee.

- Idea of endorsement or negotiation is not only excluded while note remains in hands of payee, but such is equally true prior to time it reaches payee's hands by delivery. Davis v. National City Bank, 46 Ga. App. 194, 167 S.E. 191 (1932) (decided under former Code 1933, § 14-401).

Where there are but two original parties to promissory note, maker and payee, so long as note remains in hands of payee, the idea of endorsement is excluded. Willoughby v. Newman, 46 Ga. App. 377, 167 S.E. 783 (1933) (decided under former Code 1933, § 14-401).

Endorsement required to be holder in due course of order paper.

- To be holder in due course of note payable to named payee or order requires payee's endorsement. Fourth Nat'l Bank v. Lattimore, 168 Ga. 547, 148 S.E. 396 (1929) (decided under former Ga. L. 1924, p. 126, § 52).

Instrument payable to order can only be negotiated by endorsement. Roswell Bank v. Citizens & S. De Kalb Bank, 104 Ga. App. 291, 121 S.E.2d 706 (1961) (decided under former Code 1933, § 14-401).

Transfer of order paper on consideration of love and affection.

- Legal title to note, payable to order, does not pass to transferee for consideration of love and affection only, except by endorsement on instrument or on paper attached to it. Moore v. Moore, 35 Ga. App. 39, 131 S.E. 922 (1926) (decided under former Ga. L. 1924, p. 126, § 31).

Endorsement in corporate name, without more.

- In suit by transferee of negotiable instrument, written endorsement thereon, bearing as signature only corporate name of payee, not accompanied by name of agent by whom affixed nor by corporate seal, is, nevertheless, sufficient proof of transfer, unless endorsement be specifically denied on oath. Sheffield v. Johnson County Sav. Bank, 2 Ga. App. 221, 58 S.E. 386 (1907) (decided under former Code 1895, § 3705).

An endorsement alone never constitutes negotiation, and an attempt to negotiate note payable to order by endorsement of holder is incomplete, so that if stopped there, without delivery, there is no negotiation and title remains in holder. Evans v. Luce, 190 Ga. 403, 9 S.E.2d 646 (1940) (decided under former Code 1933, § 14-401).

A writing and signature is necessary to formal endorsement of a negotiable instrument. Willoughby v. Newman, 46 Ga. App. 377, 167 S.E. 783 (1933) (decided under former Code 1933, § 14-402).

Recovery where payee's interest in note is specified.

- Where instrument is payable to order of three payees and it specifically states that interest of third payee is to be $1,000.00, endorsee of such third payee may maintain action for interest in the instrument without endorsement of other two payees and without joining them as parties. Hodson v. Scoggins, 102 Ga. App. 44, 115 S.E.2d 715 (1960) (decided under former Code 1933, §§ 14-403 and 14-412).

Transfer without endorsement.

- Where record shows that promissory note sued on was transferred for value by payee to plaintiff, but fails to show any endorsement, there was a transfer but no "negotiation" of instrument, and such transfer without endorsement does not preclude defendant from pleading, as against plaintiff transferee, any defenses which defendant could have set up against payee. Christie v. Bassford, 49 Ga. App. 94, 169 S.E. 687 (1933) (decided under former Ga. L. 1924, p. 126, § 49, subsequently codified as former Code 1933, § 14-420).

When attachment of endorsement allowed.

- A separate paper may be attached to bill or note for purpose of writing endorsements when there is no room on instrument itself. Tallahassee Bank & Trust Co. v. Raines, 125 Ga. App. 263, 187 S.E.2d 320 (1972) (decided under former Code Section11-3-202).

Extent to which paper must be affixed to instrument.

- To operate as an endorsement, a separate paper must be so firmly affixed to the instrument as to become an extension or part of it. Tallahassee Bank & Trust Co. v. Raines, 125 Ga. App. 263, 187 S.E.2d 320 (1972) (decided under former Code Section11-3-202).

A separate paper pinned or clipped to an instrument is an insufficient endorsement. Tallahassee Bank & Trust Co. v. Raines, 125 Ga. App. 263, 187 S.E.2d 320 (1972) (decided under former Code Section11-3-202).

Not true payee's signature.

- Check drawn to order of payee may not be negotiated without payee's endorsement. Unauthorized endorsement by forger does not operate as true payee's signature. Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977).

Transferee does not become holder.

- Negotiation is necessary to confer holder status upon check's transferee. Accordingly, transferee under forged endorsement does not become a holder. Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977) (decided under former Code Section 11-3-202).

Am. Jur. 2d.

- 11 Am. Jur. 2d, Banks and Financial Institutions, § 918. 11 Am. Jur. 2d, Bills and Notes, § 210 et seq. 12 Am. Jur. 2d, Bills and Notes, §§ 586, 630.

C.J.S.

- 10 C.J.S., Bills and Notes, §§ 147, 149.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 3-201.

ALR.

- Transfer of notes as carrying the original claim for which note was given, 11 A.L.R. 449.

Production of paper purporting to be endorsed in blank by payee or by a special endorsee, as prima facie evidence of plaintiff's title to the paper, 11 A.L.R. 952; 85 A.L.R. 304.

Reference to extrinsic agreements as affecting negotiability of bill or note, 14 A.L.R. 1126; 33 A.L.R. 1173; 37 A.L.R. 655; 61 A.L.R. 815; 104 A.L.R. 1378.

Estoppel of maker of nonnegotiable paper to set up against transferee defense good against payee, 17 A.L.R. 862.

Negotiability of instrument as affected by incompleteness of the attempt to fix due date, 19 A.L.R. 508.

Endorsement of bill or note in form of guaranty of payment, 21 A.L.R. 1375; 33 A.L.R. 97; 46 A.L.R. 1516.

Necessity of endorsement by all payees before maturity to make a transferee a bona fide holder, 25 A.L.R. 163.

Effect of endorsement and delivery of note to comakers, 51 A.L.R. 936.

Construction and application of provision of Negotiable Instruments Law in respect to endorsements which purport to transfer only part of amount payable, 63 A.L.R. 499.

Validity and effect of provision in contract that it shall be regarded as a negotiable instrument, 79 A.L.R. 33.

Necessity of notice of nonpayment of note or bill upon which corporation is primary obligor, in order to hold officer, director, or stockholder as endorser, 123 A.L.R. 1367.

Endorsement of negotiable instrument by writing not on instrument itself, 19 A.L.R.3d 1297.

Provision in draft or note directing payment "on acceptance" as affecting negotiability, 19 A.L.R.4th 1268.