Holder means any person entitled in his own name to the possession of the negotiable instruments and to recover or receive the amount due thereon from the parties thereto. A holder must, therefore, have the possession of the instrument and also the right to recover the money in his own name. Thus, a person who though in possession of the instrument but has no right to recover the money due thereon is not a holder.
The position of a holder of a bill is important for a number of reasons. No person other than a holder can sue upon a negotiable instrument. With certain exceptions, the holder is entitled to negotiate it.