Section 617.-ATTORNEY FEES.-A note may be made providing that, in the event of the holder commencing suit to collect it, the maker will pay an attorney fee to the payee. Such a note is negotiable. The session of the Legislature of 1905 adopted an amendment to the Civil Code, providing that a negotiable note may provide for the payment of attorney's fees and costs of suit, in case suit be brought to collect the note, and the note will still be negotiable. (Amendment to Section 3088, Civil Code, approved March 10, 1905.)

Section 618.-WHEN NOTE IS OUTLAWED.—In California a note is outlawed if it is allowed to run more than four years after it becomes due. For instance, if a note is made payable one year after date, it will not outlaw for five years; the holder may commence a suit on the note after the expiration of the one year; but he may wait, and commence the suit at any time within four years after the note by its terms becomes due. The same rule of course applies to a note made payable at any other term. The note remains good for four years after it is due. After four years from the date when the note becomes due, in a suit upon the note, the maker or other person liable to pay it can set up as a defense that it is outlawed. And if in fact the holder has waited more than four years after the note has become due, before commencing a suit upon it, the note will be outlawed, and cannot be collected if such defense is made.

Code of Civil Procedure, Section 337.

Section 619.-APPARENT MATURITY OF NOTE. -The apparent maturity of a promissory note, payable at sight or demand, is as follows: If it bears interest, one year after its date; or, if it does not bear interest, six months after its date. Therefore, if an interest-bearing note is made, reading, "For value received I promise to pay," etc., it matures one year after its date. If the holder presents the note

for payment within one year from its date, he has four years from the time when he demands payment in which to sue upon the note. If he does not demand payment until after one year from its date, the four years will not begin at the time when he demands payment, but will begin one year after the date of the note. Where a promissory note is payable at a certain time after sight or demand, such time is to be added to the periods mentioned.

What has been said above applies only to promissory notes in which the time of maturity does not appear upon the face of the note, that is, where the time when the note becomes due is not stated.

Civil Code, Sections 3135, 3136.

Section 620.-WHEN OUTLAWED NOTE IS RENEWED. A note is renewed by the promise of the maker to pay the sum due. But the promise must be in writing, in all cases, or the note will not be renewed. There must be a written acknowledgment of the debt and an unconditional promise to pay it, in order to revive it, after a note is outlawed. The acknowledgment and promise are not required to be in any particular form. It may be indorsed on the note; it may be by letters written by the maker to the creditor; or it may be by writing, in the form of a contract, to revive and keep alive the note. But in whatever form the writing is, whether by indorsement, or letter, or formal contract, the written promise must be signed by the debtor and made to the creditor. If the maker of the note admits, after it is outlawed, to a third person that he owes the money, the note will still remain outlawed. The law is that the acknowledgment of an outlawed debt and the new promise to pay it, must be made to the creditor himself, and must be in writing, signed by the debtor. The payment of interest will not revive an outlawed note, unless such payment is accompanied by a written acknowledgment of the principal debt and a promise to pay it. A part payment of the amount of a note, after it has become

outlawed, will not revive the whole debt without a written acknowledgment. A letter from the maker of the note to the creditor, after it is outlawed, expressing a desire to pay it, will revive the debt and create a new promise to pay. The holder of the note may then sue to collect the amount due, at any time within four years after the new promise was made. The effect of the new promise to pay is to extend the obligation of the debtor four years longer. If one only of several joint makers of a note, after it is outlawed, signs a written acknowledgment and promise to pay the debt, he binds himself alone. He cannot bind anybody but himself, and if the creditor wants the obligation extended as to all the joint makers of the note, he must get the signatures of all.

Code of Civil Procedure, Section 360.

Section 621.-INDORSEMENT OF NEGOTIABLE NOTE. A negotiable note, if payable "to order," passes from one person to another by indorsement. This indorse

ment must be in writing. One who agrees to indorse a negotiable note is bound to write his signature upon the back of the note, if there is sufficient space on the back for that purpose. But it sometimes happens that the holder of a note has written on the back acknowledgments of money paid, or that many previous indorsers have signed their names, and in this manner the entire back of the note is covered, and there is no more room for any further writing upon it. The law of California provides, that when this happens, the holder may pin or paste on a piece of paper sufficient for his own and subsequent indorsements. Such addition to the original note thus becomes incorporated as a part of it. A note with the name of the holder written by him on the back, or, if there is no room on the back, on a piece of paper pinned or pasted to the note, passes the legal title in the debt to the person to whom the note is delivered.

Civil Code, Sections 3108, 3109, 3110.

Section 622.-KINDS OF INDORSEMENTS.-There are two kinds of indorsements; one is called a general indorsement, and the other is called a special indorsement.

Section 623.-GENERAL INDORSEMENT.-A general indorsement is one where the name of the indorser is written on the back of the note, without writing the name of any indorsee. The note may then be delivered to anybody. The indorsement is general, because not made to any one in particular. Therefore the title to the note passes to any person to whom it is delivered, is payable to the bearer, and may be indorsed and transferred by the bearer.

Section 624.-SPECIAL INDORSEMENT.-A special indorsement is where the holder writes his name on the back of the note, and also writes the name of the indorsee, thus specifying a particular person to whom payment is to be made. A note thus indorsed cannot be indorsed again and passed on by anybody but the indorsee whose name is written on the back of the note.

Civil Code, Sections 3112, 3113.

Section 625.-INDORSER OF NON-NEGOTIABLE NOTE. One who writes his name upon the back of a nonnegotiable promissory note, to give it credit, is a guarantor, and is liable prima facie for the payment of the note upon default of the maker.

Where a corporation has received the money obtained on a promissory note, upon which its name appears as an indorser, it cannot thereafter question the authority of its officers to make such indorsement. (Decided by the California District Court of Appeals, in the case of Tilden vs. Goldy Machine Co., which decision is printed in California Appellate Decisions, Volume 7, page 323.)

Section 626.-ASSIGNMENT OF NOTE NOT NEGOTIABLE. The difference between a note which is negotiable, and a note which is not negotiable, has been explained.

A note which is not negotiable, for any reason, may nevertheless be transferred, by assignment. There is no particular form of assignment. The following words written on the back of a non-negotiable note are sufficient to assign the note from the holder to another person: "I hereby assign the within note to John Smith.

"James Green."”

It has also been held by the courts that a non-negotiable note may be legally assigned by the mere endorsement of the name of the holder and a delivery of the note to another person.

Section 627.-LIABILITY OF INDORSERS.-Every indorser of a negotiable note, unless his indorsement is qualified in some way, by his indorsement warrants to every subsequent holder thereof that the note is in all respects what it purports to be; that he has a good title to it; that the signatures of all prior parties are genuine; and that if the note is dishonored the indorser, upon notice of the dishonor being given him, will pay the amount due on the note, with interest, to the indorsee or other holder. Any number of indorsements may be made of a promissory note, and the last indorsee may look to all of the indorsers for his money, and he will have the same rights against every one of the indorsers as he has against the particular holder who indorsed the note to him. Sometimes a note, which has been indorsed by a prior indorser, comes back again to him by re-indorsement in the course of business, when he will thereby become reinstated in his original rights in the note; but he will have no claim upon any of the indorsers whose names appear on the note subsequent to his own. The indorsement of a note amounts to a contract on the part of the indorser, unless he qualifies his indorsement, that he will pay the indorsee, or other holder, the amount due, upon receiving notice of the dishonor of the note.

Civil Code, Sections 3116, 3120.