BILLS AND NOTES-REACQUISITION AND REISSUE BY A PRIOR PARTY-LIABILITY OF INTERMEDIATE INDORSER TO SUBSEQUENT HOLDER IN DUE COURSE

The payee of a negotiable note indorsed to X, who later indorsed back to the payee, who before maturity indorsed to a holder in due course. All indorsements were special. On default, the holder brought suit to enforce the secondary liability of the payee and X, the intermediate indorser. Both defendants appealed from a judgment for the holder.

Held, reversed as to X. The reacquisition of a note by a payee terminates the contractual liability of an intermediate indorser as to a holder subsequent to the payee. Denniston's Admr. v. Jackson, 304 Ky. 261, 200 S.W. (2d) 477 (1947).