Nego 10 Wettlaufer vs Baxter (1910) Doctrine: The usual form of a negotaible instrument is a provision for payment to order or bearer.

. Indorsement of a note in blank does not convert a non-negotiable instrument to a negotiable one. Facts: Baxter wrote his name on the blank of the note and discounted it with Wettlaufer. The note contained the following: January 15, 1906, after date we promise to pay Baster 250 USD at Buffalo, NY. The note was dishonored upon presentment. Due notice was sent to Baxter. Wettlaufer then sued Baxter. Arguments of the parties: Argument of Baxter: note was not a negotiable instrument. Artgument of Wettlaufer: note may not have been a negotiable instrument but has been converted into a negotiable note by Baxters indorsement. Hence, the liability of the parties must be governed by the negotiable instruments act. Issue/s: 1. WON the note was a negotiable instrument. NO. 2. (If answer to #1 is no) WON the signing of Baxter of his name at the backof the note and selling and delivering it before maturity to Wettlaufer converted it into a negotiable one. NO. Held/Ratio: 1. Note was not a negotiable instrument. Section 1 states that an instrument to be negotiable must conform to the following requirements: (4) must be payable to the order of a specified person or bearer. The usual form of a negotaible instrument is a provision for payment to order or bearer. These or similar words are in general necessary to its negotiability and are often required by the statute, but a note which is non-negotiable for want of such words is still a valid note and may be declared as such. Without such words of negotiability, purchasers take the bill/note subject to all defenses which were availabe between the original parties. This note which was payable to Baxter alone and did not contain the words to order or bearer was not a negotiable instrument. 2. Even if Baxter indorsed the note in blank (ie. Signed his name on the back of it without any other words), he did not convert the note into a negotiable one. Section 9 which states that the instrument is payable to bearer when the only or last indorsement is an indorsement in blank does not mean that an indorsement in blank converts a non-negotiable note on its fact and by its terms into a negotiable one. The provision is merely intended to describe/desginate the conditions under which a note negotiable on its face might become payable to bearer Digested by: Cari Mangalindan (A2015)