(5nrn?U ICaui ^rlyool IGibtary Cornell University Library KF 957.A4J66 Elements of the law of negotiable contra 3 1924 018 854 061 Cornell University Library The original of tliis book is in tlie Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018854061 ELEMENTS OF THE LAW OF Negotiable Contracts BY ELIAS FINLEY JOHNSON, B. S., LL. M., CO- AUTHOR OF Illustrated Cases on Bills and Notes; Editor of the Third Edition of Bliss on Code Pleading; Professor of Law in THE Department of Law of the Uni- versity of Michigan. PUBLISHED BY GEOEGE WAHR, ANN ABBOB, MICH., 1898. The Inland Press, Ann Arbor, Mich. PREFACE. The cases here collected and annotated, have been selected by the undersigned, primarily for the use of students in his classes. To make a wise selection of cases from the large number that are to be found upon a particular subject is a most difficult task. The question, which is the most important case upon a given subject, is one upon which opinions will necessarily differ. It has been attempted here to select, as far as possible, the very earliest cases upon the particular subject, so that the student would thereby be able to get at the reason of the rule without reference to any statu- tory provisions. Attention is called to the latest cases, however, in the foot notes. Several years of experienoe), as an instructor has taught the undersigned that the best method oi^iSipressing a principle upon the mind of the student is to show him a practical application of it. To remember abstract propositions, without knowing their application, is indeed difficult for the average student. But when the primary principle is once associated, in his mind, with par- ticular facts, illustrating its application, it is more easily retained and more rapidly applied to analogous cases. It is deemed advisable that the student in the law should be required, during his course, to master, in connection with each general branch of the law, a few well-selected cases which are illustrative of the philosophy of that subject. To require each student to do this in the larger law schools has been found to be impracticable, owing to the lack of a sufficient number of copies of individual cases. The only solution of this difficulty seems to be to place in the hands of each student a volume containing the desired cases. In the table of cases will be found many leading cases printed in black type. E. F. J. University of Michigan, Department of Law, Ann Arbor, Oct. ist, i8g8. TABLE OF CONTENTS. CHAPTER I. History, Nature and Purposes of Negotiable Contracts.. 21 Section i. Biography and Original of Bills and Notes. 21 a. Negotiability, when first allowed 23 b. Promissory notes, when first used. ... 24 c. Lord Holt's objection to the nogotia- bility of notes 25 d. The Statute of Anne, its purpose 26 Section 2. Nature and Purposes of Bills and Notes. ... 32 a. Common law contracts and negotiable contracts distinguished 38 b. They are representatives of money. .. 41 n CHAPTER H. Bibliography of Negotiable Contracts 44 Section. 3. Text Books and Cases 44 CHAPTER HI. Enumeration and Definition of Negotiable Contracts 46 Section 6. Negotiable Contracts Enumerated 46 Section 7. Quasi-Negotiable Contracts Enumerated... 46 Section 8. Bills of Exchange 46 a. Defined 46 b. Must be written 47n c. May be written in pen or pencil 47n d. Form required 50n e. Must not be under seal 50 f. Kinds of 51 g. Parties to, enumerated and defined .. . 5in Section 9. Promissory Notes 52 a. Defined S2n b. Must be written S2n c. May be written in pen or pencil 52n d. Form required S2n e. Parties to, enumerated 53 i TABLE OF CONTENTS. Section 9. — Continued. f. Parties defined 53 Section 10. Other Negotiable and Quasi-Negotiable Contracts 53 CHAPTER IV. Section 11. Essentials Generally 54 a. A bill must contain an order 54 b. A note must contain a promise 54 c. The order and the promise must be absolute and unconditional 54 d. The order and the promise must be for the payment of money 54 e. The order and the promise must be for the payment of a certain amount of money 54 f. The order and the promise must be to pay at some time certain 54 g. They must be in writing 54 h. They must be signed 54 i. The parties must be definite and cer- tain 54 j. The contract must be delivered 54 Section 12. A Bill of Exchange JMust Contain an Order 1 by One Person to Another 54 a. What will constitute an order. ...... 55 Section 13. A Promissory Note Must Contain an Ex- press Promise to Pay 59 a. What will constitute a promise 65 — The English cases 65 — The American cases 67 - — Equivalent expressions for "prom- ise" 69, 71 b. Due bills 73 c. Promise to give 73 Section 14. The Promise and the Order Must be Abso- I lute and Unconditional 74 a. Payment must not depend upon a con- dition -7Q b. The reason for the rule 79 c. The bill or note will be good if the condition is sure to happen 79 d. Bills and notes payable at the conven- ience of parties are sustained 80 TABLE OF CONTENTS. VU Section 14. — Continued. e. Conditions may be imposed by an in- dorsement -. . 81 {. Inconsistent conditions will be disre- garded 81 g. A condition which changes the time of payment does not destroy a bill or note 81 h. Conditions to be binding must appear upon the contract 82 Section 15. The Order and the Promise Must be for the Payment of Money only 83 a. The general rule 84 b. May be payable in merchandise if at the option of the payee 84 — Statutory provisions 84 c. The reason for the rule 85 d. Money defined 85 e. Equivalent words and phrases for money 86 f. Contracts payable in bank bills or cur- rency 87 g. An order to pay in "Bills of Ex- change" is not an order to pay in money 87 h. The payment may be in the money of any country 87 i. The money must not be payable out of a particular fund 88 j. The amount may be charged to a par- ticular fund 88 k. The payment must not be of money and an act 89 Section 16. The Order and the Promise Must be for the Payment of a Certain Amount of Money 90 a. Provision for the payment of attor- ney's fees 9^ — The rule in different States 91 b. Statutory provisions 9^ c. Payment of an amount certain with exchange 93 d. The amount should be expressly stated 94 Jj TABLE OF CONTENTS. Section i6. — Continued. e. When is the amount certain 94 — The general rule 94 Section 17. The Order and the Promise Must be to Pay at Some Time Certain 95 a. The exact time need not be stated 102 b. Lost notes, when due 103 c. Notes payable on demand, when due.. 103 d. Payable in installments 103 e. Days of grace 104 — What instrument entitled to 104 Where grace is allowed, when must payment be demanded 104 —Checks not entitled to 104 — May be dispensed with 104 f. Where a negotiable contract falls due on a holiday, when due 105 — When grace is allowed 105 — When grace is not allowed 105 g. What days are holidays 105 h. The rule where no time is stated 105 i. Where interest is provided for 105 j. Where contract is payable "on or be- fore" a da}' named 106 k. Where time of payment depends upon an event sure to pass 106 1. Time, computation of 107 — The general rule 107 — When measured from a day 107 — When measured from an act 107 — When runs for days 107 — When runs for months 107 Section 18. The Parties Must be Certain and Definite. . 109 a. Parties, how designated 109 1. To bills of exchange 109 — Original log — Subsequent log 2. To promissory notes no — Original no — Subsequent no 3. To checks no b. Certainty as to, how promoted 117 c. Exceptions 117 d. The general rules 118 TABLE OF CONTENTS. IX Section i8. — Continued. f. Parties may be described 119 h. Capacity of parties 121 a. Generally 121 b. Of infants 121 1. For necessaires 121 2. For torts 122 3. As payees 122 4. As endorsers 122-123 5. Ratification of 123 6. Joint note of, and adult 124 7. Joint note of, as partner 124 c. Lunatics 124, 133 1. The general rule 124 2. Effect of lunacy upon these con- tracts 124 d. Married women 124 1. The general rule 124 2. The statutory rule 124, 126 3. Liability of husband for ante-nup- tial contracts 125 4. Exceptions to the general rule. . 125 e. Partners 126 1. The general rule 126 2. The form of signature 127 f. Corporations . . .' 127 1. The general rule 127 2. May not become accommodation parties 128 3. Power to indorse 128 4. The form of contract 129 5. Authority of agents of 129 g. Public corporations 129 — Power to execute negotiable con- tracts 129 h. Municipal corporations 130 — Power to make negotiable con- tracts 130 i. Executors and administrators 131 1. Power to make nogatiable con- tracts 131 2. Power to indorse negotiable con- tracts 131 3. Liability of 131 X TABLE OF CONTENTS. Section 18. — Continued. f. Agents ^32 1. Power to make negotiable con- tracts 132 2. Authority of 132 3. Joint agents 13^ 4. Signature of 132 k. Guardians 133 — Tlie general rule 133 1. Drunkards 133 Section 19. Negotiable Contracts Must be Delivered... 135 a. The general rule 143 b. The necessity for 143 c. Delivery 150 1. Defined 150 2. Kinds of 150 3. Sufficiency of 150 4. Conditional 151 5. When made 154 6. i\lay be compelled 152 7. Presumption as to time of 152 8. In escrow 152 9. On Sunday 154 a. The common law rule 154 b. The statutory rule 154 Section 20. Negotiable Contracts Alust be Signed 155 a. What constitutes a signature. 160 b. By whom may it be made 161 c. The form of 161 1. May be written 161 2. May be printed 161 d. By two or more parties 161 — The nature of their liability 161 e. By agent 162 CHAPTER V Non-essentials of Negotiable Contracts 163 Section 21. Negotiable Contract Need Not be Dated... 163 a. When delivered without sum or date, right of holder 164 b. Efifect of dating on Sunday 165 c. Where placed 165 d. Ante-dating 165 TABLE OF CONTENTS. XI Section 21.- — Continued. e. Post-dating 165 f. Mistake as to the date 166 Section 22. Negotiable Contract Need Not Contain a Statement of Consideration 167 a. Consideration presumed 167 b. The general rule 167 c. The use of tlie phrase "value received" 168 d. Effect of a failure of consideration. . . 168 e. What consideration is sufficient*. 169 1. Love and affection not 169 2. Money consideration 170 3. Consideration other than money. . . 170 4. Pre-existing debt as a consideration 172 Section 23. Negotiable Contracts Need Not Stipulate a place of payment 173 a. Presumption of 173 b. Place of payment may be in the alter- native 173 Section 24. Negotiable Contracts Need Not Contain the Indicia of Negotiability 175 CHAPTER VI. Acceptance 178 Section 25. The Drawer of a Bill of Exchange is Not Liable Thereon Until He Has Ac- cepted the same 178 a. Acceptance defined 180, 182 b. The drawee may become an indorser 181 c. The form of an acceptance 182 1. May be by parol 182 2. May be in writing 182 3. May be of a bill not yet drawn 182 4. May be by telegram 183 5. May be implied 183 a. By a detention of the bill 183 b. By a destruction of the bill 183 6. A promise to accept may be an ac- ceptance 184 7. The acceptance may be upon the bill or upon a separate piece of paper. . 184 8. It need not be dated 184 9. Need not be accepted when drawer and drawee are the same party. . . . 184 TABLE OF CONTENTS. Section 26. An Section 25. — Continued. c. Ttie form of an acceptance. 10. By statute acceptance must be writ- ten 185 d. The general method of acceptance. . . 185 e. What bills must be presented for. . . . 185 f. The liability of the drawer 185 g. The varieties of acceptances 186 1. Absolute 186 2. Conditional 186 3. Implied 186 4. Local 187 5. Partial 187 6. Virtual 187 h. Effect of a conditional acceptance. . . . 186 When excused 187 Acceptance Should Be Absolute and Identical With the Tenor of the Bill. A Partial, Conditional or Qualified Acceptance Will Render the Parties to Such an Aceptance Liable According to the Terms of Their Acceptance 188 a. The payee or holder may refuse a par- tial or conditional acceptance 195 b. Antecedent parties are discharged by a qualified or conditional accept- ance unless they give their consent 195 An Acceptance Must be by the Drawee. A Stranger Does Not Become an Ac- ceptor by the Acceptance of a Bill of Exchange 196 a. If the name of the drawee is left blank the acceptance may be by a stran- ger 199 b. Acceptance by a member of a firm binds the firm 199 c. Joint drawees should all accept 199 d. Acceptance may be by an agent 199 An Acceptance is Incomplete Until a Deliv- ery, Either Actual or Constructive, and May be Revoked 200 a. The early rule 206 Section 27. Section 28. TABLE OF CONTENTS. XIU Section 28. — Continued. b. The acceptance is irrevocable after de- livery 206 Section 29. An Acceptance May be Eitiier by Parol or in Writing; Before or After the Bill is Drawn, and Before or After Ma- turity 207 Section 30. A Bill of Exchange When Dishonored, May be Accepted for Honor or Supra Protest. An Acceptor Supra Pro- test is Not Liable Until the Bill Has Been Presented to the Original Drawee for Payment at Maturity and Again Protested 222 a. The nature of the liability of an ac- ceptor for honor 224 b. The contract of an acceptor for honor. 227 c. For whom may an acceptance supra protest be made 227 d. To whom is he liable 227 Section 31. The Drawee, by Accepting a Bill, Thereby Admits the Genuineness of the Drawer's Signature and is There- after Estopped from Denpng the Same 228 a. The drawee must know the handwrit- ing of the drawer 231 b. The drawee not presumed to know the handwriting in the body of the bill. 231 c. The warranties or admissions 232 Section 32. The Drawee, by Accepting a Bill, is not Thereby Estopped from Showing, Subsequently, That the Body of the Bill Has Been Altered 233 Section 33. The Drawee, by Accepting a Bill, Thereby Admits or Warrants That the Payee Has Capacity to Indorse, but Does Not Admit His Indorsement. 240 TABLE OF CONTENTS. CHAPTER VII. Methods of Transferring Commercial Contracts 248 Section 34. General Methods of Transfer 248 Section 35. Assignment Defined 248 Section 36. The Common Law Rule Abrogated 249 Section 37. The Interest Received by an Assignee 249 — Non-negotaible contracts trans- ferred by assignment 250 Section 38. Assignment 251 a. The action by whom 251 b. The rule at common law 251 c. The requirements in case of an assign- ment 251 — Notice must be given 252 Section 39. An Assignee Takes Suljject to Equities 252 Section 40. What is Meant by '■Equities"Which May be Interposed Against an Assignee. . 253 Section 41. What Equities May be Interposed 254 CHAPTER VIII. Indorsement 255 Section 42. An Indorsement ]\Iust be in Writing and Upon the Commercial Contract In- dorsed 255 a. Indorsement defined 255 b. The mode of indorsement 256 c. To whom may they be indorsed 257 d. The indorsement must be of the entire instrument 2^7 e. When is an indorsement necessary. . . 257 f. Efifect of a transfer without an indorse- ment 258 g. Indorsement explained by parol evi- dence, when 2;8 h. Presumption as to the time of 260 i- Presumption as to the place of 261 Section 43. An Indorsement Can Only be Made by the Payee or Subsequent Holder. An Indorsement by a Stranger to the Bill or Note is Irregular or An- omalous 264 a. Indorsement by joint payees .' 273 TABLE OF CONTENTS. XV Section 43. — Continued. b. By whom may the indorsement be made 273 c. Irregular or anomalous indorsement defined 275 Section 44. No Particular Form is Required for an In- dorsement. It is sufficient if it is Made, Either With an Intention to Transfer the Contract Upon Which it is Written or to Strengthen the Security and to Transfer the Con- tract 276 a. Form of the indorsement 276 b. An allonge defined 277 Section 45. An Indorsement is not Complete until a De- livery of the Contract upon which it is Made 278 Section 46. An Indorser Contracts to Pay the Bill or Note According to its Tenor, if Upon Presentment to and Demand Upon (and Protest when Neces- sary), the Parties Who Are Primar- ily Liable, Payment is Refused, He is Duly Notified of Such Refusal . . 282 a. Interest payable annually, is when due 284 b. The indorser's contract 286 c. Presentment, demand and notice is necessary to charge an indorser with the payment of installments of principal and interest 287 d. When do the statutes of limitations begin to run against annual interest 288 e. The amount for which an indorser is liable 293 1. They are liable for attorney's fees. . 293 2. They are not liable to contribution. 293 3. They are liable for the full amount due 294 f. The consideration of indorser's con- tract 294 Section 47. The Negotiability of a Commercial Contract Cannot Be Restrained, After an In- dorsement in Blank by the Payee, by an Indorsement in Full or Spe- cial 295 xyj TABLE OF CONTENTS. Section 47 — Continued. a. Kinds of indorsements 295 1. Blank indorsement, defined 295 2. Indorsement in full or special, de- fined 296 3. Conditional indorsement, defined.. 297 4. Restrictive indorsement, defined . . . 297 a. To an agent 298 b. To a trustee 298 5. An absolute indorsement, defined.. 298 6. Indorsement without recourse, de- fined 298 a. Warranties of 299 7. Accommodation indorsement, de- fined 299 8. An irregular or anomalous indorse- ment, defined 275 b. General effect of an indorsement 301 Section 48. A Special Indorser is Liable Only to Subse- quent Indorsees Who Make Their Title Through His Special In- dorsee. Subsequent Indorsee May Strike Out the Special Indorsement and Recover Against Prior Indors- ers 304 a. An indorsement in blank may be changed to a special indorsement. . 308 CHAPTER IX. Warranties or Admissions of Indorsers 310 Section 49. An Indorser Warrants or Admits that the Bill or Note is Just Such a Contract as it Purports to Be; That it is in Every Way a Valid, Subsisting, Genuine Contract 310 a. Warranties or admissions of an in- dorser TJO 1. That the contract is in every way valid ; 310 2. That the parties thereto are compe- tent 310 3. That he has lawful title 310 4- That he has a right to transfer it. . . 310 TABLE OF CONTENTS. XVU Section 49. — Continued. a. Warranties or admissions of an in- dorser. 5. That the contract is just what it pur- ports to be 310 6. That the parties are able and will pay 310 b. Effect of a forged indorsement 312 c. Effect of an indorsement after maturity 312 CHAPTER X. Warranties or Admissions of an Indorser "Without Re- course" 314 (322) Section 50. An Indorser "Without Recourse'' Warrants or admits: a. That he is a lawful holder of the instru- ment 314 b. That he has a just and lawful title to same 314 c. That the contract is valid 314 d. That he has a right to transfer it 314 e. The contract of a transferrer. . . .316 (323) f. The warranties of a transferrer. .319 (323) g. An indorsement "without recourse" does not destroy the negotiability of the contract 322 CHAPTER XL Warranties or Admissions of a Transferrer of a Commercicil Contract Without Indorsement... 323(327) Section 51. The Transferrer, of a Commercial Contract, Payable to Bearer, Without In- dorsement, Impliedly Warrants or Admits : a. That he is a lawful holder of the con- tract 323 b. That he has the title to the same 323 c. That the contract is valid 323 d. That he has a right to transfer it 323 e. That it is just such a contract as it purports to be 323 See also 327 jjyiii TABLE OF CONTENTS. Section 51. — Continued. f. Transfer by delivery simply 328 g. Indorsement of a non-negotiable in- strument 329 h. Indorsement, statute of limitations. . . 329 i. Indorsement after payment 330 j. Payment before maturity 330 k. Mistake in an indorsement. . 331 1. Indorser's right to fill up a blank in- dorsement 331 m. The holder's right to strike out an in- dorsement 331 n. The indorsement must not be partial 332 o. When may an indorsement be made . . 332 p. The law of what place governs an in- dorsement 333 CHAPTER XII. Protest 336 Section 52. The "Certificate of Protest'' Should Show: a. A copy of the instrument, or should set it out according to its legal ef- fect 2>2>7 b. That presentment and demand were made 337 c. The time and place of presentment and demand ^T^y d. The parties by and to whom present- ment and demand were made 337 e. The answer, if any, given to the de- mand; or that no answer was given; or that the party could not be found; or the facts which excuse presentment and demand 337 f. That notice of dishonor had been given ,,27 g. The signature and seal of the notary. . 337 h. Why must presentment be made ..'... 350 1. The law of what place governs the liability of the parties 356 j. The purpose of protest 361 k. Protest defined ^ ' ^ .55 1. In what cases necessary 356 TABLE OF CONTENTS. XIX Section 52. — Continued. m. When to be made 366 n. Where made 367 o. By whom made 367 p. What the certificate must show 367 1. A copy of the contract or a fair de- scription of it 367 2. The fact of presentment for accept- ance or payment 367 3. The time and place of presentment and demand 367 4. The fact of dishonor with the reason therefor 367 5. The fact of protest 367 6. That notice of dishonor had been sent or given together with the time of such notice 367 7. The signature of the notary 367 8. The seal of the notary 367 q. The form of the certificate of protest. . 368 r. The form of notice of protest 369 s. Protest when dispensed with 369 t. Protest for better security 369 CHAPTER XIII. Presentment and Demand 370 Section 53. In an Action by an Indorsee Versus an In- dorser the Former Must Show Pre- sentment and Demand, or Due Dil- igence to Get the Money, at the Maturity, from the Person Who is Primarily Liable Upon the Con- tract 370 a. The liability of drawer and indorser, compared 375 b. Promissory notes and bills of ex- change, compared 377 c. The duty of an indorsee 377 d. Presentment for acceptance — when necessary 379 I . Where the bill is payable after sight or where it is necessary to fix the maturity of the contract 379 C TABLE OF CONTENTS. Section 53. — Continued. d. Presentment for acceptance — when necessary. 2. Where it is made necessary by the terms of the contract 379 e. Presentment for acceptance -— how made 379 1. By or on behalf of the holder (for- eign bills by a notary) 379 2. At the place named, if there be one, or at the place of business or resi- dence of the drawee 379 3. Within a reasonable time after exe- cution and delivery and within business or reasonable hours 379 4. To the drawee or some person au- thorized to act lor him 379 f. Presentment for acceptance excused, when 380 1. When the drawee is dead 380 2. When he has absconded 380 3. When he is a fictitious person 380 4. When he has no capacity to con- tract 380 5. When the presentment is irregular, but acceptance is refused upon some other ground 380 6. Where after reasonable diligence it cannot be made 380 g. Presentment for acceptance may be delayed 380 h. Rights of holder when acceptance is refused — may sue immediately 380 i. Effect of acceptance 380 j. Presentment for payment — when nec- essary 281 1. Of drawers ^81 2. Of indorsers 381 3. Of acceptors for honor 381 k. Presentment of checks— necessity of.. 381 1. Presentment for payment— how made 381 I. By or on behalf of the holder (if a foreign bill, by a notary) 381 TABLE OF CONTENTS. Xxi Section 53. — Continued. 1. Presentment for payment — how made 2. At the place named if there be one, or at the place of business or residence of the drawee or maker 384 3. On the day the contract legally ma- tures 381 4. At a reasonable hour of that day. . . 381 5. To the person who is primarily lia- ble on the contract or to some one who is authorized to act for him. . 381 6. By exhibiting the bill to the person from whom payment is demanded. 381 a. Where there are several drawees not partners 382 b. Where there are several drawees who are partners 382 c. Where the drawee or maker is dead 382 m. Presentment, for payment — when ex- cused 382 1. Where the latter has no right to expect or believe that the contract will be honored 382 2. Where the contract was made for his accommodation 382 3. Where after reasonable diligence it cannot be made 382 4. Where the drawee or maker is a fictitious person 382 5. Where it is expressly waived by the parties 382 n. Presentment for payment — may be delayed when 383 1. Where the holder is too ill to make the presentment himself or to ap- point some one to do it for him. . . . 383 2. Where the contract is lost 383 3. Where the mail miscarries 383 4. Where, by reason of war or pesti- lence presentment cannot be made promptly 383 ^^j. TABLE OK CONTENTS. Section 53.— Continued. m. Presentment for payment — when excused. 5. Where the death of the holder oc- curs before maturity and before the appointment of a personal repre- sentative 383 6. (ienerally whenever the delay is' caused b)- circumstances beyond the control of the holder and not imputable to his negligence 383 o. Presentment for payment — effect 383 CHAPTER XIV Defenses to Commercial Contracts 384 Section 54. A Material Alteration in the Terms of a Com- mercial Contract is a Real Defense and Alay Be Interposed Against Every Holder 384 a. The general classes of defenses 398 1. Real 398 2. Personal 398 b. A real defense, defined 398 1. Incapacity of the parties such as in- fancy, coverature, insanity 398 2. Illegality of the contract, as where it contravenes 398 a. The statute 398 b. The common law 398 c. Public policy — such as usury, etc. 398 3. Where by the acts of the parties the contract has either been cancelled, or altered in a material way 398 4. Want of delivery 398 c. A personal defense — defined 398 d. Material alteration — defined 399 e. Material alteration — effect of 400 f. Material alteration by a stranger ef- fect of 401 g. Material alterations— illustrations of.. 401 1. Changing a joint to a joint and sev- eral contract .qj 2. Changing the date or time oV pay- "lent 401 TABLE OF CONTENTS. Section 54. — Cont R- 3 4- 5 6 7 inucd. Material alterations — illustrations of. Changing the place of payment. . . . 401 Changing the rate of interest 401 Adding interest when it did not draw interest 401 Substituting a new payee 401 Adding a seal 402 Adding a subscribing witness 402 Adding or removing a signature. . . 402 10. Adding words of negotiability when it was not negotiable 402 11. Adding a special consideration after "value received" 402 12. Adding a place of paynjent where none is named 402 13. Changing a material memorandum. 402 14. Changing the medium of payment. 402 1. Immaterial alterations — illustrations.. 402 Changing a bill payable to "A" or bearer, to "A" or order or bearer. . 402 Changing an indorsement in blank into a special indorsement 402 Adding the legal rate of interest where the note reads "with interest" simply 402 CHAPTER XV. Defenses, Alteration, NegHgence 403 Section 55. Whenever the Maker of a Co.mmercial Con- tract, by His Own Carelessness or Negligence, Executes and Delivers it so that Material Alterations May be Made, in a. Way Which Does Not Excite the Suspicion of Care- ful and Prudent Business Men, He Will Be Held Liable Thereon to Any Bona Fide Holder. Negli- gence, However, is a Question of Fact 403 a. Alterations — negligence of maker. . . . 407 ^^iy TABLE OF CONTENTS. CHAPTER XVI. Defenses, Fraud •••••;• -••,•••••• \ "^"^ Section 56. Fraud May Be Either a Real or Personal Defense. It May Always Be Inter- posed Between Immediate Parties, and if it Caused the Parties to Enter Into the Contractural Relations Under a Misapprehension of the Real Nature of the Contract, with the Exercise of Due Diligence, then it is a Rcs^, Defense and May Be In- terposed Against Anj Holder 409 a. Fraud — personal defense, generally. .. 416 b. Fraud — "Bohemian Oats" notes 416 c. Fraud — rights of bona fide holder. . . . 417 d. Fraud — statutory provisions relating to 417 e. Where the delivery of the contract is obtained through fraud 418 f. Notes obtained in blank and wrong- fully filled up 419 CHAPTER XVII. Defenses, Illegality 420 Section 57. A Want or Failure of Consideration in a Commercial Contract is a Personal Defense and Avoids the Contract Only Pro Tanto. Illegality of Con- sideration is Usually a Real De- fense and Avoids the Contract in Toto. Where a Part of the Consid- eration is Legal and a Part is Il- legal, the Whole Contract is Void. 420 a. Illegality — when it exists 427 b. Illegality — burden of proof, when stat- ute does not make void 427 c. Illegality — effect of payment 428 d. Effect of illegality upon the contract, when once renewed 428 e. What contracts are tainted with ille- gality 428 I. Those made with alien enemies and in aid of rebellion -28 TABLE OF CONTENTS. XXV Section 57. — Continued. e. What contracts are tainted with ille- gality. 2. Bribery contracts 428 3. Lobbying contracts 428 4. Wagering contracts 428 5. Compounding of crimes 429 6. Contracts in restraint of trade 429 7. Contracts for the procurement of marriage and divorce 429 8. Contracts in restraint of marriage. . 429 9. Contracts in relation to offenses against morality and religion 429 ID. Usury 429 f. Illegality — usury 429 CHAPTER XVIII. Defenses, Infancy 430 Section 58. Minors May Always Plead Infancy in Bar of Actions Upon Their Commercial Contracts Unless the Same Werq Executed and Delivered for: a. Necessaries 430 b. In satisfaction of a tort 430 c. Incapacity — infants' — liability for nec- essaries and torts 430 d. Incapacity — coverature 430 e. Incapacity of bankrupts 431 f. Incapacity of persons under guradian- ship 431 g. Incapacity of persons who execute commercial contracts while intoxi- cated 431 CHAPTER XIX. Bona Fide Holder— Who Is? 434 Section 59. A Holder of Negotiable Paper, Who Takes it Before Maturity, for a Valuable Consideration, in the Usual Course of Trade, and Without Knowledge of Facts Which Impeach Its Va- lidity Between Antecedent Parties, Holds it by a Good Title, and May Maintain an Action Upon the Same 434 ;vi TABLE OF CONTENTS. Section 59. — Continued, a. Purchaser for value without notice de- fined 441 1. Before maturity 441 2. For a valuable consideration 441 3. In the due course of business 441 4. Without notice of its dishonor or of facts which impeach its validity. . . 441 b. Purchaser before maturity 441 I. Exception 442 c. Bill or note payable on demand or at sight — when overdue 442 d. Bill or note payable in installments, either of principle or interest — when over due 443 e. Bill or note, not matured until expira- tion of the day when it is legally due 443 f. Purchaser for a valuable consideration 444 g. Valuable consideration defined 444 1. The surrendering of negotiable se- curities 444 2. Giving one's signature to a negotia- ble paper 444 3. Releasing an existing debt (upon this question there is much con- flict of authority) 444 4. An agreement to forbear 444 5. Holding as collateral security 444 h. Purchaser in the due course of busi- ness defined 444 i. Purchaser "without notice'' — kinds of notice — actual and constructive — defined 445 j. Notice to agent — effect of 446 k. N( tice of equilies — when the rule does not apply 446 1. Transfer of bill or note, pavable "To order" without indorsement 446 TABLE OF CONTENTS. CHAPTER XX. Checks and Bills of Exchange Distinguished 448 Section 60. A Check is a Written Order or Request, Addressed to a Bank or to Persons Carrying on the Business of Bank- ing, by a Party Having Money in Their Hands, Requesting Them to Pay on Presentment to Another Person, or to Bearer, or Order, a Certain Sum of Money Specified in the Instrument 448 a. Bills of exchange and checks distin- guished 449 b. Check — defined 450 c. Check — form of 450 d. Check — presentment and demand. . . . 450 e. Effect of a delay in presentment 450 f. Memorandum checks — defined 451 g. Checks — certification of — effect upon drawer's liability 452 h. Check- — payment upon unauthorized indorsement 453 i. Check — liability of banker for failure to honor 453 j. Coupon bonds — defined 453 k. Coupon — defined 454 CHAPTER XXI. Quasi-Negotiable Contracts 45^ Section 61. Quasi-Negotiable Contracts Enumerated and Defined 456 a. United States Treasury notes — defined 457 b. Bank notes — defined 457 c. Gold and silver certificates 459 d. Bills of lading — defined 459 e. Warehouse receipt — defined 460 f. Receiver's certificate — defined 461 g. Certificates of stock — defined 461 h. Due bill— defined 462 TABLE OF CONTENTS. CHAPTER XXII. Conflict of Laws 463 Section 62. Where a Negotiable Contract is Executed and Delivered at One Place to be Performed at Another and the Rate of Interest is Different at the Two Places, the Parties May Stipulate with Reference to the Laws of Which. Place Shall Govern 463 CHAPTER XXIII. Sureties or the Contract of Suretyship 471 Section 63. The Contract of Suretyship or of Surety Cor- responds in Many Respects with that of Guaranty, but Many Im- portant Differences Exist, Which Should Be Carefully Noted 471 a. Surety defined 471 b. Form of the contract 471 c. Consideration of 471 d. Negotiability of 472 e. Grace 472 f. Presentment, demand, notice of dis- honor — necessity for 472 g. Liability of sureties: 1. He is liable for the amount of the contract 472 2. He is liable \vith the principal and at the same time 472 3. He is liable alone and independently of the principal 472 4. He may be sued before the principal 472 5. He is liable without presentment and demand, unless those steps are required by the terms of the con- tract 472 h. Surety's Hability— how discharged... 472 i. Rights of surety 474 I. He may commence proceedings in chancery to compel creditors to sue the principal obligor 474 TABLE OF CONTENTS. XXIX Section 63.^ — Continued. i. Rights of surity. 2. He may go into chancery and com- pel the creditor to sue by indem- nifying liim 474 3. He may pay the debt himself and bring an action against the princi- pal obligee 474 4. If there are co-sureties after he has paid the debt he may sue them for contribution 474 5. If he compromises with the creditor, he may recover that amount only of the debtor 474 6. If he pays the debt in a depreciated currency, he may recover its actual value only 474 CHAPTER XXIV. Guarantor, or Contract of Guaranty 475 Section 64. The Contract of Guaranty Differs in Some Important Respects from the Con- tract of Surety, and it is not easy to Define it in Any Brief and Com- prehensive Formula 475 a. The contract of guaranty 475 b. Form required 475 c. Consideration for 475 d. Negotiability of 476 e. Grace 476 f. Kinds of guarantees 476 g. Presentment, demand, notice of dis- honr — necessity for 476 h. Liability of a guarantor 477 i. Liability of guarantor — how dis- charged 477 j. Rights of guarantor 477 CHAPTER XXV. General Provisions 4^1 Section 65. Short Title 481 Section 66. Definition and Meaning of Terms 481 Section 67. Person Primarily Liable on Instrument 482 XXX TABLE OF CONTENTS. Section 68. Reasonable Time, What Constitutes 482 Section 69. Time, How Computed: When Last Day Falls on a Holiday 482 Section 70. Application of Chapter 482 Section 71. Law Merchant; When Governs 483 CHAPTER XXVL Form and Interpretation 484 Section 72. Form of Negotiable Instrument 484 1. It must be in writing and signed by the maker or drawer 484 2. Must contain an unconditional prom- ise or order to pay a sum certain in money , 484 3. Must be payable on demand, or at a fixed or determinable future time. 484 4. Must be payable to order or to bearer 484 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty 484 Section 73. Certainty as to Sum; What Constitutes... 484 Section 74. When Promise is Unconditional 485 Section 75. Determinable Future Time ; What Consti- tutes 48s Section 76. Additional Provisions Not Afifecting Nego- tiability 486 Section jy. Omissions, Seal, Particular ]Money 486 Section 78. When Payable on Demand 487 Section 79. When Payable to Order 487 Section 80. When Payable to Bearer 487 Section 81. Terms, When Sufficient 488 Section 82. Date, Presumption as to 488 Section 83. Ante-Dated and Post-Dated 488 Section 84. When Date May be Inserted 489 Section 85. Blanks, When May be Filled 489 Section 86. Incomplete instrument Not Delivered 490 Section 87. Delivery; Wlien Effected; When Presumed 490 Section 88. Construction Where Instrument is Ambig- uous 490 Section 89. Liability of Persons Signing in Trade or Assumed Name 491 Section 90. Signature by Agent ; Authority How Shown 491 TABLE OF CONTENTS. Xxxi Section 91. Liability of Person Signing as Agent, etc.. . 492 Section 92. Signature by Procuration ; Effect of Section 93. Effect of Indorsement by Infant or Corpora- tion 4g2 Section 94. Forged Signatures ; Effect of 493 CHAPTER XXVII. Section 95. Prespmption of Consideration 494 Section 96. Consideration, What Constitutes 494 Section 97. What Constitutes Holder for Value 494 Section 98. When Lien on Instruments Constitutes Holder for Value 495 Section 99. Effect of Want of Consideration 495 Section 100. Liability of Accommodation Indorser.... 495 CHAPTER XXVIII. Negotiation 496 Section loi. What Constitutes Negotiation 496 Section 102. Indorsement ; How Made 496 Section 103. Indorsement Must be of Entire Instrument 496 Section 104. Kinds of Indorsement 497 Section 105. Special Indorsement; Indorsement in Blank 497 Section 106. Blank Indorsement; How Changed to Spe- cial Indorsement 497 Section 107. When Indorsement Restrictive 497 Section 108. Effect of Restrictive Indorsement; Rights of Indorsee 498 Section 109. Qualified Indorsement 498 Section 1 10. Conditional Indorsement 498 Section iii. Indorsement of Instrument Payable to Bearer 499 Section 112. Indorsement Where Payable to Two or More Persons 499 Section 113. Effect of Instrument Drawn or Indorsed to a Person as Cashier 499 Section 114. Indorsement Where Name is Misspelled, et cetera 499 Section 115. Indorsement in Representative Capacity.. 500 Section 116. Time of Indorsement; Presumption 500 Section 117. Place of Indorsement; Presumption 500 Section 118. Continuation of Negotiable Character 500 Section 119. Striking Out Indorsement 500 XXxii TABLE OF CONTENTS. Section 120. Transfer Without Indorsqtnent; Effect of. . 501 Section 121. When Prior Party May Negotiate Instru- ment 501 CHAPTER XXIX. Rights of Holders 502 Section 122. Right of Holder to Sue ; Payment 502 Section 123. What Constitutes a Holder in Due Course. 502 Section 124. When Person Not Deemed Holder in Due Course 502 Section 125. Notice Before Full Amount Paid 503 Section 126. When Title Defective 503 Section 127. What Constitutes Notice of Defect 503 Section 128. Rights of Holder in Due Course 503 Section 129. When Subject to Original Defenses 504 Section 130. Who Deemed Holder in Due Course 504 CHAPTER XXX. Liabilities of Parties 505 Section 131. Liability of Maker 505 Section 132. Liability of Drawer 505 Section 133. Liability of Acceptor 505 Section 134. When Person Deemed Indorser 506 Section 135. Liability of Irregular Indorser 506 Section 136. Warranty Where Negotiation by Delivery, et cetera 506 Section 137. Liability of General Indorser 507 Section 138. Liability of Indorser Where Paper Nego- tiable by Delivery 507 Section 139. Order in Which Indorsers Are Liable. . . . 5^7 Section 140. Liability of Agent or Broker 508 CHAPTER XXXI. Presentment for Payment 5^9 Section 141. Effect of Want of Demand on Principal Debtor 509 Section 142. Presentment Where Instrument is Not Payable on Demand 509 Section 143. What Constitutes a Sufficient Presentment $0) Section izi4. Place of Presentment 51° Section 145. Instrument Must be Exhibited 510 Section 146. Presentment Where Instrument Payable at Bank 510 TABLE OF CONTENTS. XXxiii Section 147. Presentment Where Principal Debtor is Dead 511 Section 148. Presentment to Persons Liable as Partners 511 Section 149. Presentment to Joint Debtors 511 Section 150. When Presentment Not Required to Charge Drawer 5^^^ Section 151. Where Presentment Not Required to Charge Indorser 512 Section 152. Where Delay in Making Presentment is Excused 5 '2 Section 153. When Presentment May Be Dispensed With 512 Section 154. When Instrument Dishonored by Non-pay- ment 5^2 Section 155. Liability of Person Secondarily Liable, When- Instrument Dishonored ... 513 Section 156. Time of Maturity Si3 Section 157. Time ; How Computed 5^3 Section 158. Rule Where Instrument Payable at Bank. . 513 Section 159. What Constitutes Payment in Due Course. 514 CHAPTER XXXII. Notice of Dishonor S^S Section 160. To Whom Notice, of Dishonor Must be Given S^S Section 161. By Whom Given 5i5 Section 162. Notice Given by Agent 5 15 Section 163. Effect of Notice Given on Behalf of Holder 515 Section 164. Effect Where Notice is Given by Party En- titled Thereto 51*5 Section 165. When Agent May Give Notice 516 Section 166. When Notice Sufficient S^o Section 167. Form of Notice S^o Section 168. To Whom Notice May be Given 51? Section 169. Notice Where Party is Dead 5^7 Section 170. Notice to Partners S^7 Section 171. Notice to Persons Jointly Liable 5 '7 Section 172. Notice to Bankrupt •••••.•'■ ^ ^ Section 173. Time Within Which Notice Must be Given 518 Section 174. Where Parties Reside in Same Place 518 Section 175 Where Parties Reside in Different Places. 518 Section 176 When Sender Deemed to Have Given Due Notice 5^9 TABLE OF CONTENTS. Section 177. Section 178. Section 179. Section 180. Section 181. Section 182. Section 183. Section 184. Section 185. Section 186. Section 187. Section 188. Section 189, Deposit in Postoffice ; What Constitutes. . . 519 Notice to Subsequent Party; Time of. ... . 519 Where Notice Must be Sent 519 Waiver of Notice 520 Whom Afifected by Waiver 520 Waiver of Protest 520 When Notice is Dispensed With 521 Delay in Giving Notice; How Excused. . . . 521 When Notice Need Not be Given to Drawer 521 When Notice Need Not be Given to In- dorser 521 Notice of Non-payment Where Acceptance Refused 522 Effect of Omission to Give Notice of Non- acceptance 522 When Protest Need Not be Made ; When Must be Made 522 CHAPTER XXXHI. Discharge of Negotiable Instruments 523 Section 190 Section 191 Section 192, Section Section Section Section 193 194 195 196, Instrument ; How Discharged 523 When Persons Secondarily Liable on, Dis- charged 523 Right of Party Who Discharges Instru- ment 524 Renunciation by Holder 5^4 Cancellation ; Unintentional ; Burden of Proof 524 Alteration of Instrument ; Effect of 525 What Constitutes a Material Alteration . . 525 CHAPTER XXXIV. Bills of Exchange; Form and Interpretation 526 Section 197. Bills of Exchange Defined 526 Section 198. Bill Not an Assignment of Funds in Hands of Drawee 5^6 Section 199. Bill Addressed to More Than One Drawee 526 Section 200. Inland and Foreign Bills of Exchange. . . . 526 Section 201. When Bill May be Treated as Promissory Note 527 Section 202. Drawee in Case of Need 527 TABLE OF CONTENTS. XXXV CHAPTER XXXV. Acceptance of Bills of Exchange C28 Section 203. Acceptance; How Made, et cetera 528 Section 204. Holder Entitled to Acceptance on Face of Bill 528 Section 205. Acceptance by Separate Instrument 528 Section 206. Promise to Accept, When Equivalent to Acceptance 528 Section 207. Time Allowed Drawee to Accept 529 Section 208. Liability of Drawee Retaining- or Destroy- ing Bill 529 Section 209. Acceptance of Incomplete Bill 529 Section 210. Kinds of Acceptances 530 Section 211. What Constitutes a General Acceptance. . 530 Section 212. Qualified Acceptance 530 Section 213. Rights of Parties as to Qualified Accept- ance 530 CHAPTER XXXVI Presentment of Bills of Exchange for Acceptance 532 Section 214. When Presentment for Acceptance Must be Made 532 Section 215. When Failure to Present Releases Drawer and Indorser 532 Section 216. Presentment ; How Made 532 Section 217. On What Days Presentment May be Made 533 Section 218. Presentment Where Time is Insufficient. . 533 Section 219. Where Presentment is Excused 533 Section 220. When Dishonored by Non-Acceptance. . . 534 Section 221. Duty of Holder Where Bill Not Accepted. 534 Section 222. Rights of Holder Where Bill Not Accepted 534 CHAPTER XXXVII. Protest of Bills of Exchange 535 Section 223. In What Cases Protest Necessary 535 Section 224. Protest; How Made 535 Section 225. Protest ; by Whom Made 535 Section 226. Protest ; When to be Made 536 Section 227. Protest ; Where Made 53^ Section 228. Protest Both for Non-Acceptance and Non- payment 53^ XXXVl TABLE OF CONTENTS. Section 229. Protest Before Maturity Where Acceptor Insolvent 536 Section 230. When Protest Dispensed With 537 Section 231. Protest Where Bill is Lost, etc 537 CHAPTER XXXVIII. Acceptance of Bills of Exchange for Honor 538 Section 232. When Bills jMay Be Accepted for Honor. . 538 Section 233. Acceptance for Honor ; How Made 538 Section 234. When Deemed to Be an Acceptance for Honor of the Drawer 538 Section 235. Liability of Acceptor for Honor 539 Section 236. Agreement of Acceptor for Honor 539 Section 237. Maturity of Bill Payable After Sight; Ac- cepted for Honor 539 Section 238. Protest of Bill Accepted for Plonor, et cetera 539 Section 239. Presentment for Payment to Acceptor for Honor ; Flow Made 540 Section 240. When Delay in Making Presentment is Ex- cused 540 Section 241. Dishonor of Bill b)- Acceptor for Honor. . . 540 CHAPTER XXXIX. Payment of Bills of Exchange for Honor 541 Section 242. Who May Make Payment for Honor 541 Section 243. Payment for Honor ; How Made 54^ Section 244. Declaration Before Payment for Honor. . . 541 Section 245, Preference of Parties Offering to Pay for Honor 54^ Section 246. Effect on .Subsequent Parties Where Bill Is Paid for Honor 542 Section 247. Where Plolder Refuses to Receive Payment Supra Protest 54-2 Section 248. Rights of Payer for Honor 542 CHAPTER XL. Bills in a Set _ 543 Section 249. Bills in Sets Constitute One Bill 543 Section 250. Rights of Holders Where Different Parts Are Negotiated 543 TABLE OF CONTENTS. XXXvii Section 251. Liability of Holder Who Indorses Two or More Parts of a Set to Different Persons 543 Section 252. Acceptance of Bills Drawn in Sets 544 Section 253. Payment by Acceptor of Bills Drawn in Sets 544 Section 254. Effect of Discharging One of a Set 544 CHAPTER XLI. Promissory Notes and Checks 545 Section 255. Promissory Notes Defined 545 Section 256. Check Defined 545 Section 257. Within What Time a Check Must Be Pre- sented 545 Section 258. Certification of Check ; Effect of 546 Section 259. Effect Where the Holder of Check Procures it to be Certified: 546 Section 260. When Check Operates as an Assignment. . 546 CHAPTER XLH. Notes Given for Patent Rights and for a Speculative Consid- eration 547 Section 261. Negotiable Instrument Given for Patent Rights 547 Section 262. Negotiable Instrument for a Speculative Consideration 547 Section 263. How Negotiable Bonds Are Made Non- Negotiable 548 CHAPTER XLIII. Laws Repealed ; When to Take Effect 549 Section 264. Law Repealed 549 Section 265. When to Take Effect 549 CHAPTER XLIV. Preliminary 55° Section 266. Short Title 55° Section 267. Interpretation of Terms 55° TABLE OF CONTENTS. CHAPTER XLV. Bills of Exchange — Form and Interpretation 552 Section 268. Bill of Exchange Defined 552 Section 269. Inland and Foreign Bills ■ . . . 552 Section 270. Effect Where DifTerent Parties to Bill are the Same Person 553 Section 271. Address to Drawee 553 Section 272. Certainty Required as to Payee 553 Section 273. What Bills are Negotiable 554 Section 274. Sums Payable 554 Section 275. Bill Payable on Demand 555 Section 276. Bill Payable at a Future Time 555 Section 277. Omission of Date in Bill Payable After Date 556 Section 278. Ante-Dating and Post-Dating 556 Section 279. Computation of Time of Payment 55^ Section 280. Case of Need 557 Section 281. Optional Stipulations by Drawer or In- dorser 558 Section 282. Definition and Requisites of Acceptance. . 558 Section 283. Time for Acceptance 558 Section 284. General and Qualified Acceptances 559 Section 285. Inchoate Instruments 559 Section 286. Delivery 560 CHAPTER XLVI. Capacity and Authority of Parties 561 Section 287. Capacity of Parties 561 Section 288. Signature Essential to Liability 561 Section 289. Forged or Unauthorized Signature 561 Section 290. Procuration Signatures 562 Section 291. Persons Signing as Agent or in Represen- tative Capacity 562 CHAPTER XLVII. The Consideration for a Bill 563 Section 292. Value and Holder for Value 563 Section 293. Accommodation Bill or Party 563 Section 294. Holder in Due Course 564 Section 295. Presumption of Value and Good Faith. . . . 564 TABLE OF CONTENTS. XXXIX CHAPTER XLVIII. Negotiation of Bills 565 Section 296. Negotiation of Bill 565 Section 297. Requisites of a Valid Indorsement 565 Section 298. Conditional Indorsement 566 Section 299. Indorsement in Blank and Special Indorse- ment 566 Section 300. Restrictive Indorsement 567 Section 301. Negotiation of Overdue or Dishonored Bill 567 Section 302. Negotiation of Bill to Party Already Lia- ble Thereon 568 Section 303. Rights of the Holder 568 CHAPTER XLIX. General Duties of the Holder 569 Section 304. When Presentment for Acceptance is Nec- essary 569 Section 305. Time for Presenting Bill Payable After Sight 569 Section 306. Rules as to Presentment for Acceptance and Excuses for Non-Presentment 570 Section 307. Non-Acceptance 57^ Section 308. Dishonor by Non-Acceptance and Its Con- sequences 571 Section 309. Duties as to Qualified Acceptances 571 Section 310. Rules as to Presentment for Payment 572 Section 311. Excuses for Delay or Non-Presentment for Payment 573 Section 312. Dishonor by Non-Payment 574 Section 313. Notice of Dishonor and Effect of Non- Notice 574 Section 314. Rules as to Notice of Dishonor 575 Section 315. Excuses for Non-Notice and Delay 597 Section 316. Noting or Protest of Bill 578 Section 317. Duties of Holder as Regards Drawee or Acceptor 579 CHAPTER L. Liabilities of Parties S^i Section 318. Funds in hands of Drawee 3»i Section 319. Liability of Acceptor 581 Section 320. Liability of Drawer or Indorser 582 XL TABLE OF CONTENTS. Section 321. Stranger Signing Bill Liable as Indorser. . 582 Section 322. Measure of Damages Against Parties to Dishonored Bill 583 Section 323. Transferrer by Delivery and Transferree. . 583 CHAPTER LI. Discharge of Bill 5^5 Section 324. Payment in Due Course 585 Section 325. Banker Paying Demand Draft Whereon Lrdorsement is Forged 585 Section 326. Acceptor the Holder at Maturity 586 Section 327. Express Waiver 586 Section 328. Cancellation 586 Section 329. Alteration of Bill 587 CHAPTER LH. Acceptance and Payment for Honor 588 Section 330. Acceptance for Honor Supra Protest 588 Section 330. Liability of Acceptor for Honor 588 Section ^,^^,2. Presentment to .Vcctptor for Honor 589 Section 333. Payment for Honor Supra Protest 589 CHAPTER LHL Lost Listruments 591 Section 334. Holder's Right to Duplicate of Lost Bill. . . 591 Section 335. Action on Lost Bill 591 CHAPTER LIV. Bill in a Set 592 Section 336. Rules as to Sets 592 CHAPTER LV. Conflict of Laws 593 Section 337. Rules Where Laws Conflict 593 CHAPTER LVI. Cheques on a Banker 595 Section 338. Cheque Defined 595 Section 339. Presentment of Cheque for Payment 595 Section 340. Revocation of Banker's Authority 596 TABLE OF CONTENTS. XLl CHAPTER LVIl. Crossed Cheques Section 341. General and Special Crossings Defined Section 342. Crossing by Drawer or After Issue Section 343. Crossing a .Material Part of Cheque Section 344. Duties of Banker as to Crossed Cheques . . Section 345. Protection to Banker Where Cheque is Crossed Section 346. Effect of Crossing on Holder 599 Section 347. Protection to Collecting Banker 599 597 597 597 598 598 599 CHAPTER LVni. Promissory Notes 5oo Section 348 Section 349 Section 350, Section 351 Section 352 Section 353 Section 354 Promissory Note Defined 600 Delivery Necessary 600 Joint and Several Notes 600 Note Payable on Demand 601 Presentment of Note for Payment 601 Liability of Maker 602 Application of Part 11. to Notes 602 Supplementary Section 355. Section 356. Section 357. Section 358. Section 359. Section 360. Section 361. Section 362. Section 363. Section 364. Section 365. CHAPTER LIX. 603 Good Faith 603 Signature 603 Computation of Time 603 When Noting Equivalent to Protest 604 Protest When Notary Not Accessible .... 604 Dividend Warrants May be Crossed 604 Repeal 605 Savings 605 Saving of Summary Diligence in Scotland. 606 Construction With Other Acts, Etc 606 Parol Evidence in Judicial Proceedings in Scotland 606 ELEMENTS OF NEGOTIABLE CONTRACTS. CHAPTER I. History, Nature and Purposes of Negotiable Contracts. SECTION 1. BIOGRAPHY AND ORIGINAL OF BILLS AND NOTES- GOODWIN V. ROBARTS.i In the Exchequer Chamber, July 7, 1875. [Reported in Law Reports 10 Court of Ex. yd, Jan. 28, 18 j§; also Law Reports 10 Court of Ex. Chamber, 337, July 7, i8y$, also in the House of Lords i App. Cas. 476, May 12, 13, 18, rg; June I, i8'j6.'\ CoCKBURN, Chief Justice, said: "Bills of exchange are known to be of comparative modern origin, having been first brought into use, so far as it is at present known, by the Flor- entines in the twelfth, and by the Venetians about the thirteenth century^ The use of them gradually found its way into 'This case is cited in Wood's Byles on Bills and Notes, 133, 173, 182, 272; Benjamin's Chalmers, Bills, Notes, and Checks, 14, 66, 67, 122; Ames on Bills and Notes, 783; Tiedeman on Com- mercial Paper, 473; Norton on Bills and Notes, 2, 14, 16; John- son's Cases on Bills and Notes, 3. '^ Chancellor Kent, in his learned commentaries, in speaking of the history of bills of exchange says: "In 1394, the City of Bar- celona, by ordinance, regulated the acceptance of bills of exchange; and the use of them is said to have been introduced into Western Europe by the Lombard merchants, in the thirteenth century. Bills of exchange are mentioned in a passage of the Jurist Baldus of the 2 2 GOODWIN V. ROBARTS. [CHAP. I, France, and, still later, and but slowly, into England. We find it stated in a law tract by Mr. Macleod, entitled ' Specimen of a Digest of the Law of Bills of Exchange,' printed, we be- lieve, as a report to the government, but which, from its research and ability, deserves to be produced in a form calcu- lated to insure a wider circulation, that Richard Malynes, a London merchant, who published a work called the " Les Mercatoria," in 1622, and who gives a full account of these bills as used by the merchants of Amsterdam, Hamburg, and other places, expressly states that such bills were not used in England. There is reason to think, however, that this is a mistake. Mr. Macleod shows that promissory notes, payable to bearer, or to a man and his assigns, were known in the time of Edward IV. Indeed, as early as the statute of 3 Rich. II., date of 1328. (Hallam's introduction to the Literature of Europe, Vol. I, p. 68.) M. Boucher received from M, Legon Deflaix, a native of India, a memoir, showing that bills of exchange were known in India from the most high antiquity. But the ordinance of Barcelona is, perhaps, the earliest authentic document in the middle ages, of the establishment and general currency of bills of exchange. (Consultat de la Mer, par Boucher, tom. i, pp. 614, 620.) The first bank of exchange and deposit in Europe was established at Barcelona in 1401, and it was made to accommodate foreigners as well as citizens. I. Prescott's Ferdinand and Isabella, Int. p. 112, M. Merlin says, that the edict of Louis XI. of 1462, is the earliest French edict on the subject; and he attributes the invention of bills of exchange to the Jews, when they retired from France to Lombardy. The Italians, and merchants of Amsterdam, first established the use of them in France. (Repertoire de juris- prudence, tit. Lettre et billet de Change, sec. 2.) In England, reference was made, in the statute of 5 Rich. II., ch. 2, to the drawing of foreign bills. This was in the year 1381." (See Hal- lam's Middle Ages, Vol. 4, Ft. 2, ch. 9, p. 255, and note, Am. edit., 1S21. See also Cobbet on Pawns, pp. 3, 12.) See also Hallam, Introduct. to Literature of Europe, Xo\. i, ch. i, § 55, note (a), p. 40 of Paris edition, where he states on the authority of Beekman, that the earliest recorded bills of exchange are in a passage of the Jurist Baldus, and bear the date of 1328. Baldus (as cited in a Dissertation of Mr. Bergson, in the Revue Etrangere et Franc, by Foelix, 1843, pp. 203, 204, 206,) gives the forms of bills of exchange drawn in A. D. 1381 and 1385. (Baldus, Consil. edit. Brixcensis, Pars, i, Consil. 53; Id. Pars. 3, Consil. 298. See also the forms in Scaccia de Cambio, § i, Quest. 5, pp. no to 127; Id., pp. 508 to 514; post, § 26, n. 3.) SEC. I.J GOODWIN V. ROBARTS. 23 ch. 3, bills of exchange are referred to as a means of convey- ing money out of the realm, though not as a process in use among English merchants. But the fact that a London mer- chant, writing expressly on the law merchant, was unaware of the use of the bills of exchange in this country, shows that that use at the time he wrote must have been limited. Accord- ing to Professor Story, who herein is, no doubt, perfectly right, "the introduction and use of bills of exchange," as indeed it was everywhere else, "seems to have been founded on the mere practice of merchants, and gradually to have acquired the force of a custom." With the development of English commerce the use of these most convenient instruments of commercial traffic would, of course, increase; yet, according to Mr. Chitty, the earliest case on the subject to be found in the English books is that of Martin v. Boure, (1603)' in the first James I. Up to this time the practice of making these bills negotiable by indorsement had been unknown, and the earlier bills are found to be made payable to a man and his as- signs, though in some instances to bearer. Negotiability — When First Allowed. — But about this period — that is to say, at the close of the sixteenth or the com- mencement of the seventeenth century — the practice of making bills payable to order, and transferring them by indorse- ment, took its rise. Hartmann, in a very learned work on bills of e.Kchange, recently published in Germany, states that the first known mention of the indorsement of these instruments -occurs in the Neapolitan Pragmatica of 1607. Slavery, cited by Mons. Nouguier, in his work, " De Lettres des Change," had assigned to it a later date, namely, 1620. From its obvious convenience this practice speedily came into general use, and, as part of the general custom of merchants, received the sanction of our courts. At first the use of bills of exchange seemed to have been confined to foreign bills between English and foreign merchants. It was afterwards extended to domes- tic bills between traders, and finally to bills of all persons, whether traders or not.^ ^Cro. Jac, 6 (1603). -' Chitty Bills (8th ed.) 13. 24 GOODWIN V. ROBARTS. [CHAP. I, Promissory Notes— When First Used.-In the mean- time promissory notes had also come into use, differing herem from bills of exchange: That they were not drawn upon a third party, but contained a simple promise to pay by the maker, resting, therefore upon the security of the maker alone. They were at first made payable to bearer, but when the practice of making bills of exchange payable to order, and making them transferable by indorsement, had once become established, the practice of making promissory notes payable to order, and of transferring them by indorsement, as had been done with bills of exchange, speedily prevailed. And for some time the courts of law acted upon the usage with reference to promissory notes, as well as with reference to bills of exchange. In 1680, in the case of Shelden v. Hentley,' an action was brought on a note under seal by which the defendant promised to pay to bearer £100, and it was objected that the note was void because not payable to a specific person. But it was said by the court: "Traditio facit chartam loqui, and by the delivery he (the maker) expounds the person before meant; as when a merchant promises to pay to the bearer of the note, any one that brings the note shall be paid." Jones, J., said that "it was the custom of merchants that made that good." In Bromwich v. Loyd,^ the plaintiff declared upon the custom of merchants in London on a note for money payable on demand, and recovered; and Treby, C. J., said that dzHs of cxcliangc were originally betzveen foreigners and mer- chants trading with the English. Afterwards, when such bills came to be more frequent, then they were allowed between merchants trading in England, and afterwards between any traders whatsoever, and tiow between any persons, whether trading or not ; and therefore the plaintiff need not allege any custom, for now those bills were of that general use that upon an indebitatus assumpsit they m.ay be given in evidence upon the trial." To which Powell, J., added: " On indebita- tus assumpsit for money received to the use of the plaintiff ' 2 Show., 160. 2 2 Lutw., 1582. SEC. I.J GOODWIN V. ROBARTS. 25 the bill may be left to the jury to determine whether it was given for value received." In Williams v. Williams,' where the plaintiff brought his action as indorsee against the payee and indorser of a promissory note, declaring on the custom of merchants, it was objected on error that, the note having been made in London, the custom, if any, should have been laid as the custom of London. It was answered ''that this cus- tom of merchants was part of the common law, and the court would take notice of it ex -officio; and therefore it was need- less to set forth the custom specially in the declaration, but it was sufficient to say that such a person • secundum usum et consuetudinem mercatorum,' drew the bill." And the plaintiff had judgment. Holt's Objection to the Negotiability of Promissory Notes — Thus far the practice of merchants, traders and oth- ers of treating promissory notes, whether payable to bearer or order, on the same footing as bills of exchange, had received the sanction of the courts, but. Holt having become chief jus- tice, a somewhat unseemly conflict arose between him and the merchants as to the negotiability of promissory notes, whether payable to order or to bearer; thechief justice taking what must now be admitted to have been a narrow-minded view of the matter, setting his face strongly against the negotiability of these instruments,^ contrary, as we are told by authority, to the opinion of Westminster Hall, and in a series of suc- cessive cases persisting in holding them not negotiable by in- dorsement or delivery. ' Carth., 269. ''Lord Holt, C. J., refused to allow the privilege of negotia- bility to promissory notes. He said in the case of Buller v. Crips (6 Mod. Rep. 29), " I rememberwhen actions upon inland bills of exchange did first begin; and they were laid a particular custom between London and Bristol and it was an action against the acceptor. The defendant's counsel would put them to prove the custom, at which Hale, C. J., who tried it, laughed and said ' they had a hopeful case of it' And in my Lord North's time it was said that the custom in that case was part of the common law of Eng- land, and these actions since became frequent, as the trade of the nation did increase, and all the difference between foreign bills and inland bills is that foreign hills must be protested before a notary 26 GOODWIN V. ROBARTS. [CHAP. I, The Statute of 3 and 4 Anne, c. g— Its Purpose.— The inconvenience to trade arising therefrom led to the pass- ing of the statute of 3 and 4 Anne, c. 9,' whereby promis- sory notes were made capable of being assigned by indorsement, or made payable to bearer, and such assignment was thus ren- dered valid beyond dispute or difficulty. It is obvious from the preamble of the statute, which merely recites that "it had public before the drawer can be charged, but inland bills need not be protested." Lord Holt said of pro?nissory notes that they were a ' ' new sort of specialty, unknown to the common law and in- vented in Lombard street.'' He continued, " to allow such contract to carry any lien with it were to turn a piece of paper, which is, in law, but evidence of a parole contract, into a specialty." 5 Mod. Rep. 13; I Salk. 24; 2 Salk. 442; Buller v. Crips, 6 Mod. Rep. 30. 'Its most important provisions were as follows: "Whereas, it hath been held that notes in writing, signed by the party who makes the same, whereby such party promises to pay unto any other per- son, or his order, any sum therein mentioned, are not assignable or indorsable over, within the custom of merchants, to any other person; and that the person to whom the sum of money mentioned in such note is payable cannot maintain an action by the custom of merchants, against the person who first made and signed the same; and that any person to whom such note shall be assigned, indorsed, or made payable, could not, within the said custom of merchants, maintain any action upon such note against the person who first drew and signed the same: Therefore, to the extent to encourage trade and commerce, which will be much advanced if such notes shall have the same effect as inland bills of exchange, and shall be negotiated in like manner, be it enacted, that all notes in writing whereby any person shall promise to pay to any other person, his order, or unto bearer, any sum of money mentioned in the note shall be taken and construed to be payable to anv such person to whom the same shall be payable; and also every such note shall be assignable or indorsable over in the same manner as inland bills of exchange are according to the custom of merchants; and that the person to whom such sum of money is payable may maintain an action for the same as he might do upon an inland bill of exchange made, or drawn, according to the custom of merchants; and that any person to whom such note is indorsed, or assigned, or the money therein mentioned ordered to be paid by indorsement there- on, may maintain his action for such sum of money either against the person who signed the note, or against any of the persons that indorsed the same, in like manner as in cases of inland bills of ex- change." SEC. I.J GOODWIN V. ROBRATS. 27 been held that such notes were not within the custom of mer- chants," that these decisions were not acceptable to the pro- fession or the country. Nor can there be much doubt that by the usage prevalent amongst merchants these notes had been treated as securities negotiable by the customary method of assignment, as much as bills of exchange, properly so-called. The statute of Anne may, indeed, practically speaking, be looked upon as a declaratory statute, confirming the decisions prior to the time of Lord Holt. We now arrive at an epoch when a new form of security for money, namely, goldsmiths' or bankers' notes, came into general use. Holding them to be part of the currency of the country as cash. Lord Mansfield and the court of king's bench had no difficulty in holding in Miller v. Race,^ that the prop- erty in such a note passes, like that in cash, by delivery, and that a party taking it bona fide, and for value, is consequently entitled to hold it against a former owner from whom it has been stolen. In like manner it was held, in Collins v. Martin,'^ that where bills indorsed in blank had been deposited with a banker, to be received when due, and the latter had pledged them with another banker as security for a loan, the owner could not bring trover to recover them from the holder. Both these decisions, of course, proceeded on the ground that the property in the bank note payable to bearer passed by deliv- ery, that in the bill of exchange by indorsement in blank, pro- vided the acquisition had been made bona fide. A similar question arose in Wookey v. 'Pole,^ in respect of an exchequer bill, notoriously a security of modern growth. These securities being made in favor of blank or order, con- tained this clause, " if the blank is not filled up, the bill will be paid to bearer. " Such an exchequer bill having been placed, without the blank being filled up, in the hands of the plaintiff's agent, had been deposited by him with the defendants, on a bona fide advance of money. It was held by three judges of 'i Burrows, 452 (1758). ''i Bos. & P., 648 (1797)- ^Barn. & Aid., i (1818). 28 GOODWIN V. ROBARTS. [CHAP. I, the queen's bench — (Bayley, J., dissentiente) — that an exche- quer bill was a negotiable security, and judgment was there- fore given for the defendants. The judgment of Holroyd, J., goes fully into the subject, pointing out the distinction between money and instruments which are the representatives of money and other forms of property. " The courts," he says, have considered these instruments either promises or orders for the payment of money, or instruments entitling the holder to a sum of money, as being appendages to money, and fol- lowing the nature of their principal." After referring to the authorities, he proceeds: "These authorities show that not only money itself may pass, and the right to it may arise, by currency alone, but, further, that these mercantile instruments, which entitle the bearer of them to money, may also pass, and the right to them may arise, in like manner, by currency or delivery. These decisions proceed upon the nature of the property {i. e., money) to which such instruments gives the right, and which is in itself current, and the effect of the in- struments, which either give to their holders, merely as such, a right to receive the money, or specify them as the persons entitled to receive it. Checks — History of — Another very remarkable instance of the efficacy of usage is to be found in much more recent times. It is notorious that, with the exception of the Bank of England, the system of banking has recently undergone an entire change. Instead of the banker issuing his own notes in return for the money of the customer deposited with him, he gives credit in account to the depositor, and leaves it to the latter to draw upon him, to bearer or order, by what is now called a "check." Upon this state of things the general course of dealing between bankers and their customers has attached incidents previously unknown, and these, by the de- cisions of the courts, have become fixed law. Thus, while an ordinary drawee, although in possession of funds of the drawer, is not bound to accept, unless by his own agreement or con- sent, the banker, if he has funds, is bound to pay on presen- tation of a check on demand. Even admission of funds is not sufficient to bind an ordinary drawee, while it is sufficient with a banker; and the money deposited with a banker is not SEC. I.J GOODWIN W. ROBARTS. 29 only money lent, but the banker is bound to repay it when ■called for by the draft of the customer. See Pott v. Clegg} Besides this, a custom has grown up among bankers them- selves of marking checks as good for the purposes of clearance by which they become bound to one another. Though not immediately to the present purpose, bills of lading may also be referred to as an instance of how general mercantile usage may give effect to a writing which without it would not have had that effect at common law. It is from, mercantile usage, as proved in evidence, and ratified by judicial decision in the great case of Lickbarrow v. Mason\ that the efficacy of bills of lading to pass the property in goods is derived. It thus appears that all these instruments, which are said to have derived their negotiability from the law merchant, had their origin, and that at no very remote period, in mercantile usage," and were adopted into the law by our courts as being ' 16 Maes. & W., 321. ^ 2 Term. R., 63. " It is true that the law merchant is sometimes spoken of as a fixed body of law, forming part of the common law, and, as it were, coeval with it. But as a matter of legal history, this view is altogether incorrect. The law merchant thus spoken of with ref- erence to bills of exchange and other negotiable securities, though forming part of the general body of the lex mercatoria, is of com- paratively recent origin. It is neither more nor less than the ■usages of merchants and traders in the different departments of trade, ratified by the decisions of courts of law, which, upon such usages being proved before them, have adopted them as settled law, with a view to the interests of trade and the public conve- nience, the court proceeding herein on the well-known principle •of law that, with reference to transactions in the different depart- ments of trade, courts of law, in giving effects to the contracts and dealings of the parties, will assume that the latter have dealt with one another on the footing of any custom or usage prevailing gen- erally in the particular department. By this process, what before was usage only, unsanctioned by legal decision, has become en- _grafted upon, or incorporated into, the common law, and may thus be said to form part of it. " When a general usage has been judic- ially ascertained and established," says Lord Campbell, in Brandao V. Barnett, 12 Clark & F., at p. 805, "it becomes a part of the law merchant, which courts of justice are bound to know and recognize." The true origin and history of bills of exchange and negoti- 30 GOODWIN V. ROBARTS. [CHAP. I, in conformity with the usages of trade; of which, if it were able instruments like the origin and history of all our law, based upon custom, is enveloped in no small degree of obscurity. The exchange of commodity for commodity or what is known as barter and trade must have existed among all nations from the earliest dawn of the formation of men into communities from their \ery necessities. During these early days there could be no exchange of goods or trade in commodities except where two persons should meet, each having a certain product which was desired by the other. There was no necessity for purchases, made for the purpose of sup- plying the future demand. And it was not until the merchants conceived the idea of having a medium of exchange, some product having an intrinsic value, and of great durability, that we had properly what is known as a sale of commodities as distinguished from barter and trade. It is asserted that commercial contracts were known to anti- quity and practiced by the Romans. Chancellor Kent seems to think that they were also known among the Greeks, and cites a passage found in one of the pleadings of Isocrates, showing that bills of exchange were sometimes resorted to at Athens as a safe expedient to shift funds from one country to another. In an interesting forensic argument which Isocrates puts into the mouth of a son of Sopseus, the Governor of Province of Pon- tus, in that suit against Passion, an Athenian banker, for the gross- est breach of trust, it is said that the son, wishing to receive a large sum of money from his father, applied to Stratocles, who was about to sail from Athens to Pontus, to leave his money and take a draft upon his father for the amount. This, said the orator, was deemed a great advantage, to the young man, for it saved him the risk of remittances from Pontus, over a sea covered with Lacedaemonian pirates; it is added that Stratocles was so cautious as to take secur- ity from Passion, for the money advanced upon the bills, and to whom he might have recourse if the Governor of Pontus should not honor the draft, and the young Pontian should fail. After full investigation, we have great reason to doubt whether the use of bills of exchange or promissory notes for the purposes to which they are now applied was known to antiquity. The near- est approach seems to be a custom which prevailed at Rome, where one paid money to another, to be paid by the other at another place. This contract is frequently referred to in the pandeets, but it may be doubted whether these contracts were those of our modern bills of exchange. They were simply contracts or man- dates for the exchange of money in different places. Certainly the peculiar distinguishing quality of our modern bills of exchange, their negotiable character, does not appear to have been known to the ancients or to have found its way into the general transactions of their commercial intercourse. This at SEC. I.] GOODWIN Z/. ROB ARTS. 3 I needed, a further confirmation might be found in the fact that least is the opinion of many of the modern authors who have dis- cussed these features of these contracts. Pothier, a French au- thor, says: "There is not a single vestige of our contracts to be found in the Roman law." Mr. Bell, an early writer upon this subject, says: "That as a branch of practical jurisprudence, or as a circulating medium in trade, bills of exchange were unknown to the Romans." Sir William Blackstone in remarking upon the subject of bills of exchange, says that, "This method is said to have been brought into general use by the Jews and Lombards, when banished for their usury and other vices, in order the more easily to draw their effects out of France and England into those countries in which they had chosen to reside. But the invention of it was a little earlier, for the Jews were banished out of Guinne in 1287, and out of England in 1290; and in 1236 the use of paper credit was introduced into the Mugul Empire in China." 2 Black. Com. 467. " Other nations," says Mr. Chitty, " had attributed the inven- tion of these commercial contracts to the Florentines. When being driven out of their country, by the faction of the Gebelings, they established themselves at Lyons and other towns in order to with- draw their effects secretly and to escape the confiscation of them by their enemies." Mr. Chitty further says, "That it seems extremely doubtful at what period, or by whom bills of exchange were first invented." Each of these various accounts of the origin and history of bills of exchange has been supported by some and rejected by other authors as wholly unsatisfactory and uncertain. Certain it is, that bills of exchange were used in many of the commercial states bordering on the Mediterranean as early as the 14th century, although it is probable that the forms thereof were different, and had not then settled down into one model or uniform instrument, like that in use in our days. But while similar instru- ments to our bills of exchange were in quite common use in the 14th century, they were used much earlier. Weber in his work on the history of these customs, published in 18 lo, states positively that such instruments were in use at Venice in 1171; and a law of Venice in 1272 clearly recognizes these documents. While we find a statute of Marseilles, that once great commercial metropolis of the Mediterranean, dated 1253, which presents evident traces of them, and a transaction of this description is attested by a docu- ment of 1256. There has been found several copies of these documents, dated early in the isth century, which correspond in form almost exactly with the forms in common use to-day. One is still extant, dated April 28th, 1405, drawn bya merchant in Bruges upon a mercantile company in Barcelona. The introduction and the use of bills of exchange in England 32 MILLER V. RACE. [CHAP. I, according to the old form of declaring on bills of exchange, the declaration always was founded on the customs of mer- chants. SECTION 2. NATURE AND PURPOSES OF BILLS AND NOTES. MILLER V RACE.! In the King's Bench, January 31, 1758. S^Reported by I. Burrows, 452. ] Form of Action. — It was an action of trover against the defendant, upon a bank-note, for the payment of twenty-one pounds ten shillings to one William Finney or bearer on demand. The cause came on to be tried before Lord Mansfield, at seems to have been founded upon a mere practice of merchants and gradually to have acquired the force, at first of a custom, and subsequently of a binding code of rules or laws. Mr. Chitty says, " That the earliest case on the subject to be found in the English reports is that of Martin v. Boure (Cro. Jac. 6)." We have good authority for saying that these instruments were m use in England as early as 1307; for in that year King Edward I. ordered certain money collected there for the Pope, not to be sent to him in coin but by way of e.xchange. But whatever may be said about the time of the origin of bills of exchange, it is certainly true that their origin may be assigned to the general necessities and customs of the widely extended busi- ness intercourse of the commercial nations which inhabited the shores of the Mediterranean at a very early period in history. In France there is an ordinance of Louis XI. as early as 1462 which permits all persons to give out and remit their money by bills of exchange in the business of merchants in whatever country it may be, except England. It has been said that the law of bills and notes or of commercial contracts has mainly grown up since Lord Mansfield came upon the bench; and we owe more to his labor on this subject than to any other one judicial mind, although vast and valuable productions have been made on the subject by numerous learned justices who have succeeded him. ' This case is cited in Chitty on Bills, 196, 216, 241, 258, 260, 523; Story on Bills of Exchange, 62, 188, 207, 416; Tiedeman on Commercial Paper, i, 289, 464; Wood's Byles on Bills and Notes, 50, 84, 577; Daniel on Negotiable Instruments, 771, 1503, 1672, 1687; Randolph on Commercial Paper, 9, 481, 543; Ames on Bills and Notes, 400; Norton on Bills and Notes, iii, 199. SEC. 2. J MILLER V. RACE. 33 the sitting in Trinity term last at Guildhall, London, and upon the trial, it appeared that William Finney, being possessed of this bank-note on the nth of December, 1756, sent it by the general post, under cover, directed to one Bernard Odenharty, at Chipping Norton, in Oxfordshire; that on the same night, the mail was robbed and the bank-note in question (among other notes) taken and carried away by the robber; that this bank-note on the I2th of the same December, came into the hands and possession of the plaintiff, for a full and valuable consideration, and in the usual course and way of his business, and without any notice or knowledge of this bank-note being taken out of the mail. It was admitted and agreed, that in the common and known course of trade, bank-notes are paid by and received of the holder or possessor of them, as cash; and that in the usual way of negotiating bank-notes, they pass from one per- son to another as cash, by delivery only, [when payable to bearer] and without any further inquiry or evidence of title, than what arises from the possession. It appeared that Mr. Finney, having notice of this robbery, on the 13th of Decem- ber, applied to the Bank of England "to stop the payment of this note," which was ordered accordingly, upon Mr. Finney's, entering into proper security "to indemnify the bank." Some little time after this, the plaintiff applied to the bank for the payment of this note; and for that purpose de- livered the note to the defendant, zvho is a clerk in the bank, but he refused either to pay the note or to re-deliver it to the plaintiff. Upon which this action was brought. The jury found a verdict for the plaintiff, and the sum of twenty-one pounds ten shillings damages, subject, neverthe- less, to the opinion of this court upon this question: ''Whether under the circumstances of the case, the plaintiff had a suffi- cient property in this bank-note to entitle him to recover in the present action ?" Argument of Counsel for Defendant. — Sir Richard Lloyd, for the defendant. The present action is brought not for the money due upon the note, but for the note itself, the paper, the evidence of the debt. So that the right to the money is not the present ques- 34 MILLER V. RACE. [CHAP. I, tion, the note is only an evidence of the moneys being due to him as bearer. The note must either come to the plaintiff by assignment, or must be considered as if the bank gave a fresh, separate, and distinct note to each bearer. Now, the plaintiff can have no right by the assignment of a robber. And the bank can- not be considered as giving a new note to each bearer; though each bearer may be considered as having obtained from the bank a new promise. I do not say whether the bank can or cannot stop pay- ment; that is another question. But the note is only an instrument of recovery. Now this note, or these goods (as I may call it), was the property of Mr. Finney, who paid in the money; he is the real owner. It is like a medal which might entitle a man to the payment of money, or to any other advantage. And it is by Mr. Finney's authority and request, that Mr. Race de- tained it. It may be objected, "that this note is to be considered as cash in the usual course of trade." But still, the course of trade is not at all affected by the present question, about the right of the note. A different species of action must be brought for the note, from wliat must be brought against the bank for the money. And this man has elected to bring trover for the note itself, as owner of the note; and not to bring his action against the bank for the money. In which action of trover, property cannot be proved in the plaintifl, for a special proprietor can have no right against the true owner. The cases that may affect the present, are Anonymous,' coram Holt, C. J. at nisi prius at Guildhall. There Ld. C. J. Holt held, " That the right owner of a bank-note, who lost it, might have trover against a stranger who found it; but not against the person to whom the finder transferred it for a valuable consideration, by reason of the course of trade, which creates a property in the assignee or bearer,"^ in which case ' I Salk., 126. 2 1 Ld. Raym., 738, s. c, in which case the note was paid away in the course of trade; but this remains in the man's hands, SEC. 2. J MILLER V. RACE. 35 the note was paid away in the course of trade; but this remains in the man's hands, and is not come into the course of trade. Ford V. Hopkins/ per Holt, C. J., at nisi prius at Guildhall. " If bank-notes, exchequer-notes, or million lottery tickets, or the like, are stolen or lost, the owner has such an interest or property in them, as to bring an action, into whatsoever hands they are come, money or cash is not to be distinguished; but these notes or bills are distinguishable, and cannot be reckoned as cash; and they have distinct marks and numbers on them." Therefore the true owner may seize these notes wherever he finds them, if not passed away in the course of trade. H. In Middlesex, coram Pratt, C. J., Armory v. Dela- mirie ^ — A chimney-sweeper's boy found a jewel. It was ruled "that the finder has such a property as will enable him to keep it against all but the rightful owner, and consequently may maintain trover. This note is just like any other piece of property, until passed away in the course of trade. And here the defendant acted as agent to the true owner. Argument of Counsel for Plaintiff. — Mr. Williams contra for the plaintiff. The holder of the bank note, upon a valuable consider- ation, (and without notice of existing defenses and before ma- turity) has a right to it, even against the true owner. 1. The circulation of these notes vests a property in the holder, who comes to the possession of them, upon a valuable consideration (and without notice of defenses). 2. This is of vast consequence to trade and commerce, and they would be greatly incommoded if it were otherwise. 3. This falls within the reason of the sale in market- overt, and ought to be determined upon the same principle. and is not come in the course of trade. In this case the transferee went to the bank and got a new bill in his own name. However, the case turned upon his having the note for a valuable consider- ation. ' H. 12 W., I Salk, 283, 284 ^ I Strange 505 (8 Geo. I. ) 36 MILLER V. RACE. [CHAP. I,. First. He put several cases where the usage, course, and convenience of trade made the law, and sometimes even against an act of parliament.' Secondly. This paper credit has been always, and with great reason, favored and encouraged.^ The usage of these notes is, "that they pass by delivery only (when payable to bearer); and are considered as current cash; and the possession always carries with it the property." A particular mischief is rather to be permitted than a gen- eral inconvenience incurred. And Mr. Finney who was rob- bed of this note, was guilty of some laches in not preventing it. Upon Sir Richard Lloyd's argument, a holder of a note might suffer the loss of it, for want of title against a true owner; even if there was a chasm in the transfer of it through one only out of 500 hands. Thirdly. This is to be considered upon the same footing as a sale in market-overt. *"A sale in market-overt binds those that had right." But it is objected by Sir Richard, " that there is a substantial difference between a right to the note, and a right to the money." But I say the right to the money will attach to it a right to the paper. Our right is not by assignment, but by law, by the usage and custom of trade. I do not contend that the robber, or even the finder of a note, has a right to the note; but after circulation, the holder upon a valuable consideration has a right. We have a property in this note; and have recovered the value against the with-holder of it. It is not material what action we could have brought against the bank. Then he answered Sir Richard Lloyd's Cases, and agreed that the true owner might pursue his property, where it came into the hands of another, without a valuable consideration, or ' Stanley v. Ayles, per Hale, C. J. at Guildhall. 3 Keb. 444J 2 Strange 1000. Lumley v. Palmer, i Salk. 23, where a parol- acceptance of a bill of exchange was holden sufficient against the acceptor. '' Feny v. Fowler, at al., 2 Strange 946. ' I Salk. 126 is in point. ■* 2 Inst. 713. SEC. 2.] MILLER V. RACE. 37 not in the course of trade: which is all that Ld. C. J. Holt said in i Salk. 284. As in I Strange 505, he agreed that the finder has the property against all but the rightful owner, not against him. Replication of Counsel for Defendant.— Sir Richard Lloyd in reply: I agree that the holder of the note has a special property; but it does not follow that he can maintain trover for it against the true owner. This is not only without, but against the consent of the owner. Supposing this note to be a sort of mercantile cash; yet it has an ear-mark by which it may be distinguished; therefore trover will lie for it. And so is the case of Ford v. Hopkins. ' And you may recover a thing stolen from a merchant, as well as a thing stolen from another man. And this note is a mere piece of paper; it may be as well stopped, as any other sort of mercantile cash (as, for instance, a policy which has been stolen). And this has not been passed away in trade but remains in the hands of the true owner. And therefore, it does not signify in what manner they are passed away, when they are passed away; for this was not passed away. Here, the true owner, or his servant (which is the same thing), de- tains it. And, surely robbery does not divest the property. This is not like goods sold in market-overt; nor does it pass in the way of a market-overt; nor is it within the reason of a market-overt. Suppose it was a watch stolen; the owner may seize it (though he finds it in a market-overt), before it is sold there. But there is no market-overt for bank-notes. I deny the holder's (merely as holder) having a right to the note, against the true owner; and 1 deny that the posses- sion gives a right to the note. Upon this argument on Friday last, Ld. Mansfield said, that Sir Richard Lloyd had argued it so ingeniously, that (though he had no doubt about the matter), it might be pro- per to look into the cases he had cited in order to give a pro- per answer to them, and therefore the court deferred giving 'i Salk., 283. 2 38 MILLER V. RACE. [CHAP. I, their opinion to this day. But at the same time Ld. Mans- field said he would not wish to have it understood in the city that the court had any doubts about the point. Decision of Court. — Lord Mansfield now delivered the resolution of the Court. After stating the case at large, he declared, that at the trial he had no sort of doubt, but that this action was well brought, and would lie against the defendant in the present case; upon the general course of business, and from the con- sequences to trade and commerce, which would be much in- commoded by a contrary determination. Negotiable Contracts — Common Law Contracts — Goods — Distinguished. — It has been very ingeniously argued by Sir Richard Lloyd for the defendant. But the whole fal- lacy of the argument turns upon comparing bank-notes to what they do not resemble, and what they ought not to be compared to; viz., to goods, or to securities, or documents for debts. Now, they are not goods, not securities, nor documents for debts, nor are so esteemed, but are treated as money, as cash, in the ordinary course and transaction of business, by the general consent of mankind; which gives them the credit and currency of money, to all intents and purposes. They are as much money as guineas themselves are; or any other current coin, that is used in common payments as money or cash. They pass by a will, which bequeaths all the testator's money or cash, and are never considered as securities for money but as money itself. Upon Ld. Ailesbury's ' will, 900 pounds in bank-notes was considered as cash. On payment of them, whenever a receipt is required, the receipts are al- ways given as for money, not as for securities or notes. So, on bankruptcies, they cannot be followed as identical and distinguishable from money; but are always considered as money or cash. 'Tis pity that reporters sometimes catch at quaint ex- pressions that may happen to be dropped at the bar or bench; ' Papham, at al., v. Bathurst, at al., Ambl. 68, Nov., 1748. SEC. 2. J MILLER V. RACE. 35, and mistake their meaning. It has been quaintly said, ''that the reason why money cannot be followed is because it has no ear-marks ;'" but this is not true. The true reason is, upon account of the currency of it. It cannot be recovered after it has passed in currency. So in case of money stolen, the true owner cannot recover it, after it has been paid away fairly and honestly upon a valuable and bona fide consideration; but before money has passed into currency, an action may be brought for the money itself. There was a case in i G, i, at the sittings, Thomas v. Whip, before Ld. Mansfield, which was an action upon assumpsit, by an administrator against the defendant, for money had and received to his use. The de- fendant was nurse to the intestate during his sickness; and being alone, conveyed away the money. And Ld. Mansfield held that the action lay. Now this must be esteemed a find- ing at least. Apply this to the case of a bank-note. An action may he against the finder, it is true (and it is not at all denied) ; but not after it had been paid away in currency. And this point has been determined even in the infancy of bank-notes. And Ld. C. J. Holt there says, that it is " by reason of the course of trade, which creates a property in the (assignee or) bearer." (And "the bearer" is a more proper expression than assignee. ) Here an inn-keeper took it, bona fide, in his business from a person who made the appearance of a gentleman. Here is no pretense or suspicion of collusion with the robber; for this matter was strictly inquired and examined into at the trial; and is so stated in the case, " that he took it for full and valuable consideration, in the usual course of business." In- deed, if there had been any collusion, or any circumstances of unfair dealing the case had been much otherwise. If it had been a note for 1,000 pounds it might have been suspicious; but it was a small note for twenty-one pounds ten shillings only, and money given in exchange for it. Another case cited was a loose note^ ruled by Ld. C. J. ' I Salk., 126. 10 Williams, 3. '' I Ld. Raym., 738. 40 MILLER V. RACE. [CHAP. I, Holt at Guildhall, in 1698; which proves nothing for the de- fendant's side of the question, but it is exactly agreeable to what is laid down by my Ld. C. J. Holt in the case I have just mentioned. The action did not lie against the assignee (indorsee) of the bank-note; because he had it for valuable consideration. In that case he had it from the person who found it, but the action did not lie against him, because he took it in the course of currency; and therefore, it could not be followed in his hands. It never shall be followed into the hands of a per- son who bona fide took it in the course of currency, and in the way of his business. The case of Ford v. Hopkins was also cited, which was in Hil. 12 W. 3, coram Holt C. J. at nisi prius, at Guildhall and was an action of trover for million lottery tickets. But this must be a very incorrect report of that case; it is impos- sible that it can be a true representation of what Ld. C. J. Holt said. It represents him as speaking of bank-notes, ex- chequer-notes and million lottery tickets as like to each other. Now, no two things can be more unlike each other than a lot- tery ticket and a bank-note. Lottery tickets are identical and specific; specific actions lie for them. They may prove ex- tremely unequal in value; one may be a prize; another a blank. Land is not more specific than lottery tickets are. It is there said, "that the delivery of the plaintiff's tickets to the defend- ant, as that case was, was no change of property." And most clearly it was no change of property. So far the case is right. But it is here urged as a proof " that the true owner may fol- low a stolen bank-note into what hands soever it shall come." Now the whole of that case turns upon the throwing in bank-notes as being like to lottery tickets. But Ld. C. J. Holt could never say "that an action would lie against the person who, for a valuable considera- tion, had received a bank-note which had been stolen or lost and bona fide paid to him;" even though the action was brought by the true owner, because he had determined other- wise, but two years before, and because bank-notes are not like lottery tickets, but money. The person who took down this case, certainly misunder- SEC. 2.] MILLER V. RACE. 41 stood Ld. C. J. Holt, or mistook his reasons. For this rea- soning would prove (if it were true, as the reporter represents it), that if a man paid to a goldsmith 500 pounds in bank- notes, the goldsmith could never pay them away. A bank-note is constantly and universally, both at home and abroad, treated as money, as cash; and paid and received as cash, and it is necessary, for the purposes of commerce, that their currency should be established and secured. There was a case in the Court of Chancery (Walmefly v. Child, nth December, 1749) on some of Mr. Child's notes, payable to the person to whom they were given, or bearer. The notes had been lost or destroyed many years. Mr. Child was ready to pay them to the widow and administratrix of the person to whom they were made payable upon her giving bond, with two responsible sureties (as is the custom in such cases), to indemnify him against the bearer, if the notes should be found and ever demanded. The administratrix brought a bill, which was dismissed, because she either could not, or would not, give the security required. No dispute ought to be made with the bearer of a cash-note, in regard to Fuller, Chief Justice of the Supreme Court of the United States, in the case of Friedlander at al. v. Texas and Pacific R. R. Co. (130 U. S., 416), said that " Bills of exchange and promissory notes are representatives of money, circulating in the commercial world as such, and it is essential to enable them to perform their peculiar function that he who purchases them should not be bound to look beyond the instrument, that his right to enforce them should not be defeated by anything short of bad faith on his part." It is certainly true that these commercial papers — bills of exchange, promissory notes, checks, etc. — do in a large measure answer the purpose of money in the business world. The character of nego- tiability which has been given them has enabled them to take the place of the actual use of money, and their use as representatives of money, has made them indispensable in the transactions of the daily business of to-day. "Bills of exchange were probably the first instruments for the payment of money that were accorded the negotiable quality, though promissory notes, being simpler in form, were doubtless used as evidences of debt before bills of exchange came in vogue amongst merchants. Certainly these two securities were recognized as negotiable instruments before any other paper representatives of money or property passed currently from hand to hand in like manner as money; and from them, as fruitful parents, have sprung 42 MILLER V. RACE. [CHAP. I, commerce, and for the sake of the credit of these notes; though it may be both reasonable and customary to stay the payment till inquiry can be made, whether the bearer of the note came by it fairly or not. Lord Mansfield declared that the court were all of the all the varieties of negotiabilities now known." Dan. on Neg. Inst. Sec. 2. The existence of these commercial contracts were caused by the necessities of commerce and trade between different nations. So long as all trade was a mere exchange of commodities, neither money nor a representative of money was necessary. It was not long, however, before the necessities of commerce demanded some- thing of real value — of money — for the conveniences of trade. Instead of a simple exchange of one commodity for another it be- came customary to exchange commodities for something having a representative value which was called money. At first the precious metals were used in bulk as the bases for the measurements of the value of products; later the value of a certain quantity of these metals was fixed by a stamp of the sovereign. This for a long time answered the purposes of commerce. But in the course of time — in the gradual development and extension of commerce be- tween different nations — it was found that the transfer of these precious metals, became not only burdensome and expensive, but there was great danger of losing the same, by robbery and other- wise, in their transfer from one country to another, by the rude methods of transporting them in vogue. The great necessity for something which represented money and which could be thus trans- ferred with less expense and less hazard, was felt and supplied by the ingenious merchants of that day in the form of the various commercial contracts which in one form or another have been adopted and improved from time to time by the commercial world. It is highly necessary for the purposes and conveniences of commerce that the negotiability of commercial contracts should be established and protected. Mr. Joseph Chitty in speaking of the general utility of bills of exchange said, "A bill of exchange is a security originally in- vented amongst merchants in different countries and kingdoms, for the more easy and safe remittance of money, or rather for the pur- pose of avoiding the necessity of transmitting money itself, from the one to the other, and has since been extended to commercial transactions within the same kingdom." Chitty on Bills, 4. In the origin of bills of exchange, their principal utility was the safe transfer of property from one place to another; but since the great increase of commerce, they have become the evidence of valuable property, and in a great measure equivalent to specie, en- SEC. 2.] MILLER V. RACE. 43 same opinion for the plaintiff; and that Mr. Just. Wilmot concurred. Rule. — That the postea be delivered to the plaintiff. larging the capital stock of wealth in circulation, and thereby facili- tating and increasing the trade and commerce of the country. Gibson v. Minet, i Hen. Bla., 6i8. Sir William Blackstone in speaking of the purposes of these instruments puts the following instance: "If A. live in Jamaica, and owe B., who lives in England, looO;^, now if C. be going from England to Jamaica, he may advance B. this iooo;£, and take a bill of exchange, drawn by B. in England upon A. in Jamaica, and receive it when he comes thither: Thus B. receives his debt at any distance of place by transferring it to C, who car- ries over his money in paper credit, without the risk of robbery or loss." 2 Bla. Comm., 466, 467. CHAPTER II. Bibliography of Negotiable Contracts. SECTION 3. TEXT BOOKS AND CASES. The subject of negotiable contracts has been discussed by many text writers. Among them may be mentioned the fol- lowing: — Ames on Bills and Notes; Bayley on Bills; Bateman on Commercial Paper (i860); Beauves, Lex. Merc. — Bills of Exchange (1720); Benjamin's Chalmers on Bills, Notes and Checks; Bigelow on Bills and Notes; Bigelow's Cases on Bills and Notes; Bryant and Stratton's Commercial Paper; Byles on Bills and Notes; Chalmers on Bills, Notes and Checks; Chitty on Bills of Exchange; Cunningham on Bills of Exchange; Daniel on Negotiable Instruments (2 vol.); Edwards on Bills and Promissory Notes (1857); Hartman on Bills of Exchange; Hough's Article in Vol. 2, American and English Ency- clopedia of Law; Huffcut's Negotiable Instruments (1898); Hulteau on Bills; Johnson on Bills and Notes (1898); Johnson's Cases on Bills and Notes; Kyd on Bills; Malynes Lex. Mercatoria (1622); Marius on Bills and Notes (1670); Norton on Bills and Notes; Paige's Cases on Commercial Paper; SEC. 5.] BIBLIOGRAPHY. 45 Parsons on Bills and Notes (1870); Pomeroy's Smith's Mercantile Law; Pothier de Exchange; Randolph on Commercial Paper (3 vol.); Scrutten's Elements of Mercantile Law (1891); Sharswood's Bayley on Bills; Smith's Mercantile Law; Story on Promissory Notes; Story on Bills of Exchange (1843); Tiedeman on Commercial Paper; Wood's Byles on Bills and Notes. SECTION 4. Among the books which are most useful to the practi- tioner, engaged in the active practice of the law may be men- tioned Daniel on Negotiable Instruments in 2 vols. (4th ed.) (1891); Randolph on Commercial Paper in 3 vols, (isted. ) (1888); Tiedeman on Commercial Paper (ist ed.) (1889); Ames on Bills and Notes in 2 vols. (1881) (discussion of leading cases). These authors have each discussed the funda- mental principles of the law of commercial contracts and have cited numerous illustrations, thereby rendering their texts valuable to the practitioner. SECTION 5. Among the texts which are valuable for class room pur- poses may be mentioned Chalmers (Benjamin's ed. ); Byles on Bills and Notes (Wood's 8th ed. ); Norton on Bills and Notes (2nd ed.); Bigelow on Bills and Notes (ist ed.); and Ames on Bills and Notes; Tiedeman on Commercial Paper and Huffcut on Negotiable Instruments (1898). CHAPTER III. Enumeration and Definition of Negotiable Contracts. SECTION 6. NEGOTIABLE CONTRACTS— ENUMERATED. The following instruments have been generally held to be negotiable: Bills of exchange, Promissory Notes, Checks, Certificates of Deposit, Bank Bills, Bank-notes, United States Treasury Notes, Exchequer Bills, Government Bonds, Receipts for Bonds to be issued, Bonds of Private Corpora- tions, Coupon Bonds, Coupons, Gold Certificates, and Silver Certificates. SECTION 7. QUASI-NEGOTIABLE CONTRACTS— ENUMERATED. The following contracts may be considered Quasi-nego- tiable contracts: Bills of Lading, Warehouse Receipts, Due Bills, Letters of Credit, Bank Pass Books, and Receiver's Certificates. SECTION 8. BILL OF EXCHANGE— DEFINED. 1 By an Act of Parliament in 1882, known as the "English Bills of Exchange Act," a bill of exchange was defined to be "An unconditional order in writing, addressed by one person ^Many definitions have been given for bills of exchange. Black- stone defined a bill of exchange to be "An open letter of request from one man to another, designating him to pay a sum named therein to a third person on his account." 2 Com., 466. Chitty says "It is defined to be an open letter of request from, and order by one person on another to pay a sum of money therein mentioned to a third person on his account." Chitty on Bills, i. Parsons on Bills says, "A written order for the payment of money." i Parsons on Bills and Notes, 52. Judge Byles defines a bill to be "An unconditional written SEC. 8.] ENUMERATION AND DEFINITION. 47 to another, signed by the person giving it, requiring the per- son to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer." A bill of exchange is an unconditional tvritten^ order by one order from A to B directing B to pay C a sum certain of money named therein.'' Byles on Bills and Notes, i. Judge Kent defines a bill to be "A written order or request by one person to another for the payment of money at a specified time absolutely and at all events." 3 Kent Com., 74. 'Must be ^V^itten. — Chitty says, "A bill of exchange being an open letter of request by one person to another to pay money, it follows that it must be in writing." Chitty on Bills, 126. Story on bills of exchange says, "It must be in writing and should be signed by the drawer, or by some person duly author- ized in his name and on his behalf." Story on Bills, 33. Concerning this requisite of a bill of exchange, there cer- tainly can be no controversy; an unwritten note would be a contradiction in terms. This requisite applies to all negotiable instruments. A verbal or oral promise, however valid and bind- ing in law, can never be considered a negotiable contract. This proposition is obvious upon the slightest consideration. May be ^A^ritten in Pencil or Ink. — In the case of Geary v. Physic, S B. & C, 234 (11 E. C. L., 442), (1826), the plaintiff brought an action of assumpsit as endorsee against the defendant as maker of a promissory note for the sum of thirty pounds payable two months after, to the order of one Folder, and indorsed by him, (Folder), to one Kemo, who subse- quently endorsed the note to the plaintiff. At the trial before Abbott C. J., at the London sittings, after Hilary term, 1825, it appeared that the indorsement by Kemp, to the plaintiff was in pencil, and it was thereupon objected that the plaintiff could not recover; an indorsement in pencil not being such an indorsement as the law and custom of merchants recognizes to be sufficient to pass the interest in a bill of exchange, and promissory notes being by the statute 3 and 4 Ann, c. 9 s. i, assignable or indorsable in the same manner as unpaid bills of exchange are according to the custom of merchants. The Ld. Chief Justice thought it sufficient, and directed the jury to find a verdict for the plaintiff, reserving liberty to the defendant's counsel to move to enter a non-suit, if the court should be of opinion that the indorsement of the prom- issory note in pencil, was not a good and valid indorsement. F. Pollock, in last Easter term, obtained a rule nisi to enter a non- suit. He contended, first, that a writing in pencil, was not a writing recognized at common law; and he cited Co. Litt., 229 a, where Ld. Coke, speaking of a deed, said, "Here it is to be 48 ENUMERATION AND DEFINITION. [cHAP. 3, person upon another to pay to some third person or his order understood, that it ought to be in parchment or in paper. For if a writing be made upon a piece of wood, or upon a piece of linen, or on the bark of a tree, or on a stone, or the like, etc., and the same be sealed or delivered, yet is it no deed, for a deed must be written either in parchment or paper, as before is said; for the writing upon these is least subject to alteration or corruption." For the same reasons a writing ought to be made with materials least subject to alteration or corruption. Now, writing made with a pencil is easily altered or obliterated, and therefore, for the rea- sons given by Ld. Coke, where the law requires a contract to be in writing, it ought to be made with materials the least subject to alteration. Secondly, he contended, that it was not a writing according to the custom and usage of merchants. In point of practice bills of exchange were generally written in ink and it lay upon the plaintiff in this case to show by evidence that this was a writing according to the custom of merchants. Thesiger now showed cause. First. The passage cited from Co. Litt.,229, a., regards only the materials upon which, not with which, a deed must be written; and even assuming that a deed written in pencil might not be good, it does not, therefore, follow that a bill of exchange so written may not be so. Deeds are more solemn instruments, are intended permanently to go along with the inher- itance, but bills of exchange are made to continue in force for a very short period. Letters and words traced on paper by a pencil, constitute a writing in the ordinary acceptation of that term. In Jeffryv. Walton, i Stark, 267, a memorandum entered in pencil upon a card was received as evidence of an agreement; and in Rymes V. Clarkson, i Phil., 22. Sir John NichoU was of opinion that a will written by a testator with a pencil would be valid, provided that the court could be satisfied that he intended so to execute his will. In Green v. Skipworth, i Phil., 53, a disposition made by a testator in pencil was carried into effect, and in Dickenson v. Dikenson, 2 Phil., 173, alterations in pencil in a regularly executed will were admitted to probate. Sir John NichoU said, "There was no doubt that in point of law they must be considered as equally valid as if made in ink, provided the deceased intended them to take effect." Now, there can be no question as to the in- tention here. For here Kemp, not only wrote his name on the note in pencil, but he passed it from his hand to another, thereby clearly showing that he intended to transfer the property in the note. The authorities, therefore, show that this indorsement in pencil is an indorsement in writing within the legal meaning of that term. Secondly. It is an indorsement in writing within the legal meaning of that term. It is an indorsement in writing within the usage and custom of merchants. That usage requires that the in- dorsement should be in writing; it refers to the act to be done, and SEC. 8.] ENUMERATION AND DEFINITION. 49 or bearer, a certain sum of money therein named. These not to the particular mode or the materials with which it is to be done. The argument addressed to the court on the part of the de- fendant goes to confound the usage with the practice. If the usage requires not only that the indorsement should be in writing, but that it should be written in a particular mode, it will be a matter of inquiry whether the color of the ink, or the species of paper on which the bill is written, be such as is required by the custom. F. Pollock, contra. The passage from Co. Litt. was cited to show that where the law required a contract to be in writing, it required that it should be written on materials which were the least subject to alteration; and from thence it was inferred that the law, for the same reason, would require that it should be written with materials having the same quality, general convenience certainly requiring that negotiable instruments should be written with mate- rials more durable than pencil. It lay upon the plaintiff to show that such a writing was a writing within the custom of mer- chants, and that he has not done. Suppose the indorsement upon the paper had been scratched with a pen, or with the inverted end of a pencil, would that have been a writing according to the cus- tom of merchants ? Abbott, C. J. There is no authority for saying that where the law requires a contract to be in writing, that writing must be in ink. The passage cited from Ld. Coke, shows that a deed must be writ- ten on paper or parchment, but it does not show that it must be written in ink. That being so, I am of opinion that an indorsement on a bill of exchange may be by a writing in pencil. There is not any danger that our decision will induce individuals to adopt such a mode of writing in preference to that in general use. The imper- fection of this mode of writing, its being so subject to obliteration, and the impossibility of proving it when it is obliterated, will pre- vent it being generally adopted. There being no authority to show that a contract which the law requires to be in writing should be written in any particular mode, or with any specific material, and the law of merchants requiring only that an indorsement of bills of exchange should be in writing, without specifying the manner with which the writing is to be made, I am of opinion that the in- dorsement in this case was a sufficient indorsement in writing within the meaning of the law of merchants, and that the property in the bill passed by it to the plaintiff. Bailey, J. / think that a writing in pencil is a writing within the meaning of that term at common law and that it is a writing within the custom of merchants. I cannot see any reason why, when the law requires a contract to be in writing, that contract shall be void if it be written in pencil. If the character of the handwriting were thereby wholly destroyed, so as to be incapable of proof, there might be something in the objection; but it is not thereby destroyed, for, when the writing is in pencil, proof of the 50 ENUMERATION AND DEFINITION. [CHAP. 3, instruments have been defined in some jurisdictions by statute. character of the handwriting may still be given. I think, therefore, that this is a valid writing at common law, and also that it is an indorsement according to the usage and custom of merchants; for that usage only requires that the indorsement should be in writing, and not that the writing should be made with any specific material. Holroyd, J., concurred. Rule. — Discharged. A note in pencil is valid while it is legible. Neither will it amount to a material alteration of a negotiable contract to trace the writing in pencil with ink. Reed v. Roark, 14 Tex., 329 (1855); Chitty on Bills, 126, 127, 184, n. Form Required. — Judge Bailey in the case of Green v. Davies said "That no particular form of words is necessary to constitute a negotiable contract."' 4 B. & C, 235. (10 E. C. L-, SS7-) The following have been held sufficient as to form: giooo.oo. Ann Arbor, Mich., May 8, 1898. Six months after date of this first of exchange (second and third unpaid) pay to the order of E. F. one thousand dollars, value received. Charles E. Hiscock. To Rothschild Bros., London, Eng. ^1000.00. Ann Arbor, Mich., May 8, 1898. Ten days after sight, pay to Mr. A., or order, one thousand dollars, value received. Charles E. Hiscock, To Mr. John Wanamaker, Philadelphia, Pa. Must Not be Under Seal. — The definition of a negoti- able contract is that it is "an open letter," for the payment of money. By the phrase "open letter" is meant that it must not be under seal. " If a seal be affixed to a paper, in the ordinary form of a note, its character as such is destroyed; and this rule applies to corporations as well as individuals." Daniel on Negotiable Instruments, § 32; Rawson v. Davison, 49 Mich., 607; Clark v. Farmer's Manuf. Co., 15 Wend., 256; Weeks v. Esler, 143 N. Y., 374; Brown v. Jordhal, 32 Minn., 13s; Osborn V. Kistler, 35 Ohio st., 99; Osborne v. Hubbard, 20 Oregon, 318; Muse v. Dantzler, 85 Ala., 359; Mason v. Frick, 105 Pa. St., 162. In Anderson v. Bullock, 4 Munf., 442, the following was held to be a promissory note, and the scroll annexed as a seal to be mere surplusage: 12,361.81. Richmond, October 10, 1801. "On or before the first day of February next, we bind our- selves, our heirs, executors, or administrators, to pay Thomas and SEC. 8.j ENUMERATION AND DEFINITION. 5 1 For a collection of the various definitions of promissory notes, Amos Ladd, or order, two thousand, three hundred and sixty-one dollars and eighty-one cents. "Austin & Anderson, (L. S.)" 14 Cent., L. J., 317; Story on Bills, § 62; Helper v. Alden, 3 Minn., 332; Tiedeman on Commercial Paper, § 32. In many jurisdictions the quality of negotiability has been conferred upon sealed commercial instruments. (See statutes of your state). This has been done in the following states: Ohio, Massachusetts, Colorado, Dakota, Florida, Georgia, Illinois, Kan- sas, Tennessee, Nebraska, and North Carolina. Kinds of Bills. — Bills of exchange are either foreign or inland. They are said to be foreign when they are drawn in one country and made payable in another. If a bill is drawn in one of the states of the Union and is payable in another it is a foreign bill. The states of the Union are in this respect foreign to each other. An inland bill of exchange is one which, is both drawn and made payable in the same country. A bill is not necessarily foreign because the parties to it reside in different countries. Neither is it an inland bill because the parties to it reside in the same state or country, for, if the bill actually be drawn in one state by parties of the state and made payable to parties within the state, but payable in another state or county, it is a foreign bill. There is no necessary difference in the form between inland and foreign bills; but there are certain rules controlling foreign bills which do not apply to inland bills. For instance, a foreign bill must be protested while inland bills need not be. Ld. Holt in the case of Boroughs v. Perkins (Holt's Rep., 121, Trinity term, 2 Ann.), said: "In inland as well as foreign bills of exchange, the person to whom it is paya- ble must give convenient notice of non-payment to the drawer;, for if by his delay, the drawer receives prejudice, the plaintiff shall not recover. A protest on a foreign bill was part of its constitu- tion; and on inland bills, a protest is necessary by this statute, but was not at common law. Yet the statute doth not take away the- plaintiff's action for want of a protest, nor does it make it a bar thereto; but this statute seems to take place only in case there be- no protest to deprive the plaintiff of damages or interest, and to- give the drawer a remedy against him for damages, if a protest be not made." Foreign bills are usually drawn in sets or copies, usually three and sometimes more; and these sets or copies are called in law a "set of exchange" and constitutes but one bill. Parties to Bills of Exchange — Enumerated and Defined. — The parties to a bill of exchange are denominated as the drawer, the drawee, payee, acceptor, holders, indorsees, and transferees. The person who makes or draws the bill is the drawer; the person upon whom it is drawn and who is expected to accept and pay the 52 ENUMERATION AND DEFINITION. [CHAP. 3, bills of exchange and other negotiable contracts the student is referred to Randolph on Commercial Paper. SECTION 9. PROMISSORY NOTES DEFINED.i A promissory note is an unconditional written promise by one person to pay to another or to his order, or bearer, a cer- tain sum of money therein named. A promissory note is defined by the English bills of ex- change Act Sec. 83 to be "An unconditional promise in same is the drawee; the person in whose favor it is drawn is the payee. Subsequent parties may be denominated as holders, indorsers, indorsees, or transferees, according to the nature of the transaction, and their particular liability will be discussed under the head of Transfer by Indorsement. When the drawee accepts the bill he is called the acceptor. ^ Other Definitions. — Blackstone defines a promissory note to be "A plain and direct engagement in writing to pay a sum specified at a time therein limited, to a person therein named, or sometimes to his order or often to the bearer at large." 2 Com., 467. Judge Kent adopts Bailey's definition, which is, " A written promise by one person to another for the payment of money abso- lutely, at a specified time, and at all events." 3 Kent. Com., 74. Judge Byles says, that a promissory note is, "An absolute promise in writing, signed but not sealed, to pay a certain specified sum at a time therein limited or on demand or at sight, to a person therein named or designated, or to his order, or to the bearer." Byles on Bills and Notes, 5. Judge Story said. " It is a written engagement by one person to pay another person therein named absolutely and uncondition- ally a certain sura of money at a time specified therein." Story on Bills and Notes, § i. In California, the statute defines a promissory note to be, " An instrument negotiable in form whereby the signer promises to pay a specified sum of money." Cal. Civ. Code, § 3244. Must be in Writing.— A promissory note like a . bill of exchange cannot exist in parol. It must be reduced to writing; but must not be under seal unless permitted by a statutory pro- vision in the particular jurisdiction. It way be written upon parchment or paper and with pen or pencil. See cases cited in the note to § 8 upon this question. Form Required. — No particular phraseology or form is required for promissory notes, so long as they contain all the SEC. 10. J ENUMERATION AND DEFINITION. S3 writing made by one person to another, signed by the maker, engaging to pay, on demand, or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person, or to bearer." SECTION 10. OTHER NEGOTIABLE AND QUASI-NEGOTIABLE CONTRACTS. The negotiable as well as the quasi-negotiable contracts enumerated in Sections 1 and 2 of this chapter, and not de- fined in this chapter, will be defined and discussed in chapters devoted to those particular subjects. essential elements of a negotiable contract. They may be written or printed. The following have been held to be sufficient in form: J500.00. Ann Arbor, Mich., May 8, 1898. One year after date I promise to pay to E. F. or order, five hundred dollars at the Ann Arbor Savings Bank of Ann Arbor, for value received, with interest. Charles E. Hiscock. ^500.00. Ann Arbor, Mich., May 6, 1898. On demand, we promise to pay to the order of E. F., five hundred dollars, value received, with interest after maturity. Charles E. Hiscock, John R. Miner. gioo.oo. Ann Arbor, Mich., May 8, 1898. Thirty days after date we, or either of us, promise to pay the bearer one hundred dollars. Charles E. Hiscock, John R. Miner. The first of these examples is known as a several note; the secend as a joint note, and the third as a joint and several note. Parties to a Promissory Note — Enumerated and De- fined. — The parties' to a promissory note are designated as maker, payee, indorsee, holders, indorsers, transferers and transferees. The first two parties might be called original parties and the others subse- quent parties. The one who gives the note and who is primarily liable thereon is called the maker. The person to whom the note is to be paid in the first instance is called the payee. Whether a party is an indorser, indorsee, transferer, or transferee, depends altogether upon the nature of his contract, which relations will be discussed under the head of "Transfer by Indorsement." CHAPTER IV. Essentials of Negotiable Contracts. SECTION 11. ESSENTIALS— GENERALLY. 1. A bill of exchange must contain an order. 2. A promissory note must contain a promise. 3. The order and the promise must be absolute and unconditional. 4. The order and the promise must be for the payment of money. 5. The order and the promise must be for the payment of a certain sum of money. 6. The order and the promise must be to pay at some time certain. 7. They must be in writing. 8. They must be signed by the parties giving them. 9. The parties must be definite and certain. 10. The contract must be delivered. SECTION 12. A BILL OF EXCHANGE MUST CONTAIN AN ORDER BY ONE PERSON TO ANOTHER. RUFF V WEBB.i In the King's Bench; Easter Term, 34 George III., May 24, 1794. {Reported in i Espinasse I2J; star p. I2g. j Form of Action. — Assumpsit for work and labor, with the common counts. Plea of the general issue. 'This case is cited in Daniel on Nag. Inst., 35; Tiedeman on Com. Paper, 23; Benjamin's Chalmers, Bills, Notes and Checks 10, 56; Norton on B. &. N., 29; Randolph on Commercial Paper, 105; Story on Bills of Ex., 33; Chitty on Bills, 118, 128, 129, 130, 154; Wood's Byles on B. & N., 31, 147. SEC. 12.] RUFF V. WEBB. 55 The action was brought to recover the amount of wages due by the defendant to the plaintiff. The plaintiff had been servant to the defendant, and on his discharging him from his service, had given him a draft for the amount of his wages on an unstamped slip of paper, in the following words: "Mr. Nelson will much oblige Mr. Webb, by paying J. Ruff, or order, twenty guineas on his account." This draft the plaintiff had taken, but it did not appear What Will Constitute an Order. — Every bill of exchange must contain an imperative order or a direction to pay; but this order may be expressed in polite, civil language. Any form of words implying a right on the part of the drawer of the bill to demand payment will be sufficient. No particular word or words are essential to constitute the order or direction; the word or words used, however, must be in the nature of a demand or a right, and not the mere asking of a favor. The following expressions have been held to be a sufficient order or direction: "Please pay, John Jones"; "Please let the bearer have 150.00; I will arrange it with you this forenoon. " In the case of Rex v. Ellor, i Leech 323, the following instru- ment: "Messrs Songer, — Please send 10 pounds by the bearer, as I am so ill I cannot wait upon you. Elizabeth Wery." was held not to contain an order. The court said, "This appears to be a mere letter, rather requesting the loan of money than ordering the payment of it. The terms of it do not import any- thing compulsory on the part of the drawee to pay it; and, in the case of Mary Mitchell, it was determined, by nine judges against one, that the order was not within the meaning of the act; because the direction of it was not positive, and the terms of it did not import that the party giving it had a right to the goods ordered." In Russell v. Powell, 14 M. & W., 418, the following instru- ment: "To THE Executors of T. H., deceased: We do hereby authorize and require you to pay to Mr. George Powell, or his order, the sum of 250 pounds, being the amount directed by the order of the 29th of July last, to be paid to our order. We are, Gentlemen, Your very obedient servants, John Mynn." was held not to contain an order to pay but a mere warrrant for the payment of money. A similar ruling is found in the cases of Hamilton v. Spottiswoode, 4 Exch., 200; Willoughby's Case i Leech, 95. In the case of Hoyt v. Lynch, 2 Sandf., 328, the following 56 RUFF V. WEBB. [CHAP. 4, that he had ever demanded payment of it from Mr. Nelson, to whom it was addressed. It was given in evidence on the part of the defendant, that he hved in the country, and kept cash with Mr. Nelson in London, and that he paid all his bills in that manner, by drafts on Nelson; that the plaintiff knew that circumstance and took the draft without any objection; and that if he had applied to Nelson, it would have been paid. This evidence was relied on as a discharge, and bar to the action. statement attached to an ordinary statement of account was held to be a good bill of exchange: " WlLLIAMSBURGH, DeC. 16, 1847. "Mr. J. Lynch, — Please pay the above bill — being the amount for tinning your house on South Sixth Street — and charge the same to our account; and much oblige, Yours, Smith & Woglom." In the case of Wheatley v. Strobe, 12 Cal., 92, upon the fol- lowing instrument: "Sac City, July 18, 1857. "Mr. Strobe: Please pay the bearer of these lines two hun- dred and thirty-six dollars, and charge the same to my account. E. D. Wheatley." Justice Field, now of the Supreme Court of the U. S., said: "No further particulars than these are essential to constitute a bill of exchange. The insertion of the word "please" does not alter the character of the instrument. This is the usual term of civility and does not necessarily imply that a favor is asked." In Woolley v. Sergeant, 8 N. J. L., 323, the following instru- ment: "Mr. David Sergeant, please to credit John Woolley, or bearer, thirty dollars, and I will pay you by the tenth day of April next, and you will oblige your friend, John Miller " was held not to be a good bill of exchange. Ford J. said: "The instrument is neither a bill of exchange nor a promissory note, for it does not require payment; but only the giving of credit on a book account." In Spurgin v. McPheeters, 42 Ind., 527, the following instru- ment was held to possess all the characteristics of a bill of exchange; "Mr. B.— Sir, Please pay to A. or order the sum of one hundred and nineteen dollars on said bill of i^-in. lumber, and oblige the firm of C. & Co. B." In the case of Little v. Slackford, i Mood. & Malk., 171, Ld. Tenderton held the following not to be a bill of exchange: SEC. 12. J RUFF V. WEBB. 57 Argument of Counsel for Plaintiff. — Shepherd for the plaintiff contended, that the only mode by which this could operate as a bar to the action, was by taking the draft in question as a bill of exchange; in which case, under Stat. 3 and 4 Ann. c. 9, 7, it is declared that if any person "Mr. Little: — Please to let the bearer have seven pounds and place it to my account, and you will oblige, Your humble servant, J. Slackford." An instrument in writing by which A. directs B. to pay C. or bearer $400, and take up A.'s note of that amount, is not a bill of exchange. Cook v. Satterlee, 6 Cow., 108. Chitty on Bills, 159. Language of civility merely ought not to be permitted to change the nature and character of these instruments; but the lan- guage used must necessarily import the asking of a favor coupled with the right to demand a compliance therewith. To illustrate the words of civility, "Please to pay" in an order by a man on his banker, who had money of the drawer in his hands, can certainly be construed to be an order to pay absolutely. Whatever lan- guage used, in order to be a good order to pay money, it must amount to an absolute, unconditional order to pay. If the pay- ment is made to depend upon any contingency whatever, the instrument will not be a negotiable contract. The following are not good bills of exchange: "Please pay when you collect, etc." "Pay when a certain ship arrives, etc"; "Pay when a railroad is constructed to a certain point"; "Pay on the return of this note"; "Pay out of the rents and profits received from my farm"; "Pay out of the growing crops " See following cases: Coolidge v. Ruggles, 15 Mass., 387; Palmer V. Pratt, 2 Bing., 185; Blackman v. Lehman, 63 Ala., 547; Morice v. Lee, 8 Mod. Rep., 363; Masonv. Metcalf, 8 Baxt., 440; Roberts v. Peake, i Burr., 323; Powell v. Grey, 6 Grey, 340; Gillilan v. Myers, 31 111., 525; Crawford v. Cully, Wright (Ohio), 453; Kinney V. Lee, 10 Texas, 155; Averett v. Booker, 15 Gratt (Va.), 163; DeForest V. Frary, 6 Cow., 151. The general rule is that the payment must be ordered, but under certain circumstances a request may amount to an order. Morris v. Lea, Ld. Raym., 1397; Brown v. Harraden, 4 T. R., 149; Ruff V. Webb, supra. But the order or request to pay must be a matter of right and not of favor. Little v. Slackford, i Mood. & Malk., 171. The word " Pay" is not absolutely indispensable, for the word " Deliver" will be sufficient. Morris v. Lea, supra. No stereotyped form of words is necessary to constitute a note or bill; and, if it be doubtful for which of the two a particular in- strument was intended, it may be treated as either. Block v. Bell, I M. & Rob., 149; Edis v. Bury, 6 B. & C, 433- 58 RUFF V. WEBB. [CHAP. 4, shall accept a bill of exchange, in satisfaction of a debt, the same shall be deemed a full and sufficient discharge, if the person so accepting such bill for his debt shall not take his due course by endeavoring to get the same ac- cepted and paid, and making his protest for non-acceptance But a note must in legal effect, contain a promise; and a bill, an order for the payment of money. The simple acknowledgement of a debt, such as, " I. O. U." is not a promissory note; nor does an entreaty addressed to a drawee to pay a certain sum amount to a bill of exchange. This rule is now changed by statute in some of the states. The theory is, in the case of a bill, that the drawer has funds deposited with the drawee which he may demand as a matter of right and not as favor. Hence, if it appears from the tenor of the instrument that the drawer has no right to order the money paid, it is no bill of exchange. Norton on Bills and Notes, 29. But mere language of courtesy will not deprive the instrument of its commercial character. Judge story says: " The language is not to be too closely scanned; nor is it, because it has politeness now generally introduced into commercial contracts and transac- tions, to be presumed to ask a favor, and not demand a right. The true rule would seem therefore, to be, to hold the mere drawing of a bill to be the demand of a right and not the asking of a favor, in all cases, where the language is susceptible of two interpretations; and to deem it favor only, when the language used repeals, in an unequivocal manner, the notion, that it is claimed as a right." Story on Bills, 45. In Bissenthall v. Williams, i Duval, 329, a Kentucky court held the following instrument to be sufficient to constitute a bill of ex- change: " Please let the bearer have ;?5o.oo; I will arrange it with you this afternoon," and signed, " Yours, most obedient." At the trial the plaintiff in the case insisted that the instrument was not a bill of exchange, but a covenant, and was barred only by the lapse of fifteen years. As a basis for his contention, he re- lied upon the concluding words: "I will arrange it with you this afternoon," as well as upon the general tone of courtesy and sup- plication which pervaded the instrument. He further contended that an intention to make the instrument a bill would have been manifested by employing some usual phrase to that effect, such as, "And place to my account." But the court overruled the conten- tion and sustained the instrument as a bill on the principle stated by Bouvier that: "It is usual, when the drawer of a bill is debtor to the drawee, to insert in the bill these words: ' and put it to my account '; but where the drawee is debtor to the drawer, then he inserts these words: ' and put it to your account'; but it is alto- gether unnecessary to insert any of these words." SEC. 13. J CURRIER V. LOCKWOOD. 59 or non-payment; but he contended, that in point of substance it was not a bill of exchange, but a mere request to pay money, not accepted by Nelson, or such as coald put the plaintiff into any better situation with respect to his demand. But if it was taken as a bill of exchange, then it could not be given as evidence at all, as it was not stamped. Argument of Counsel for Defendant. — It was answered by the defendant's counsel, that the plaintiff's having ac- cepted the draft as payment, was a waiver of every objection to it, and that he was therefore bound by it, and could not recur to the demand for wages. Decision of Court. — Lord Kenyon said he was of opinion that the paper offered in evidence was a bill of exchange; that it was an order by one person to another to pay money to the plaintiff or his order, which was in point of form a bill of exchange; that as such it could not be given in evidence, without being legally stamped; and as the only mode in which it could operate as a discharge of the plaintiff's demand was, as stated by the plaintiff's counsel, that the plaintiff in point of law was therefore entitled to recover. SECTION 13. A PROMISSORY NOTE MUST CONTAIN AN EXPRESS PROMISE TO PAY. CURRIER V. LOCKWOOD.i In the Suprkme Court, Connecticut, October, 1873. {Reported in 40 Connecticut, S49-^ Form of Action. — An action in assumpsit upon a writ- ten instrument described as a note, with the common counts; brought originally before a justice of the peace and appealed to the Court of Common Pleas of Fairfield county, and tried in that court, upon the general issue, closed to the court. 'This case is cited in Wood's Byles on B. & N., 45; Daniel on Negotiable Instruments, 36, 39, 899; Randolph on Commercial Paper, 106; Norton on Bills and Notes, 32, 34; Bigelow on B. & N., 11; Benjamin's Chalmers' Bills, Notes and Checks, 278; Ames on'sills and Notes, 21; Tiedeman on Commercial Paper, 23. '6o CURRIER V. LOCKWOOD. [CHAP. 4, with notice that the action was barred by the statute of limi- tations. The suit was brought June i, 1872. The Facts. — In the special counts the plaintiff averred "that the defendant, in and by a certain writing or note, under his hand by him well executed, dated the 22d day of January, 1863, promised the plaintiffs to pay to them for value received, the sum of seventeen dollars and fourteen cents, as by the said writing or note ready in court to be shown appears." Upon the trial the plaintiffs offered in court the following writing: "$17.14. Bridgeport, Jan. 22d, 1863. " Due Currier & Barker seventeen dollars and fourteen cents, value received. Frederick Lockwood." At the time the note was given the plaintiffs were part- ners under the name of Currier & Barker. To this evidence the defendant objected, upon the ground that there was a fatal variance between the evidence offered and the special count in the declaration, and the court ex- cluded the same as evidence to prove the special count, but admitted it to prove an indebtedness under the common counts. It was proved that sometime within three years before the bringing of the suit, Barker, one of the plaintiffs, met the defendant in the street, and reminded him of the note, and that the defendant said, " I will give you a ton of coal for it," and no reply being made, passed along on his way. It was further proved that, about the time the suit was brought, the defendant came into Barker's store and said to him, " Have you that note .?" or "Where is that note .?" and " I wish to settle it," or words to that effect, and that Barker told him that the note was in Mr. Steven's hands and he could settle with him, and that the defendant replied, " The note is outlawed and good for nothing, and you can go ahead if you want to." It was further proved that the note was given for cloth- ing purchased of the plaintiffs by the defendant, which had not been paid for. SEC. 13. J CURRIER V. LOCKWOOD. 61 Claim of Plaintiffs in Court Below The plaintiffs ■claimed, first, as a matter of law, that the writing was a promissory note, not negotiable under the statute, and was not barred until seventeen years from its date; also, second, that the facts proved an acknowledgment of the debt, and a new promise, which took it out of the statute of limitations. Claim of Defendant in Court Below The defendant claimed adversely to each of these claims. Holding of the Court Below — The court ruled adversely to the claims of the plaintiffs, and held that the debt was bar- red by the statute of limitations, and rendered judgment for the defendant to recover his costs. Claim of Plaintiffs in Supreme Court The plaintiffs moved for a new trial, Thompson in support of the motion, contended. First. That there is no variance. The writing imports a ' ' promise to pay " and it is set forth according to its legal effect.' The acknowledgment of indebtedness implies a prom- ise to pay, and constitutes it a promissory note.'' If the instru- ment is a " note not negotiable," it is not barred by the stat- ute of limitations, such notes running seventeen years. Secondly. But if within the statutes which limits it to six years, yet it is taken out of the statutes by the acknowl- edgments of the debt made by the defendant within six years of the bringing of the suit. He admitted that it was justly due when he said, " I will give you a ton of coal for it." He afterwards went to settle it, asked for the note, and not until •directed to settle with the agent did he say that it was out- lawed, and even in declaring it to be outlawed he does not say that he shall refuse to pay it on that account.' 'Smith V. Allen, 5 Day (Conn.), 337, where the note read as follows: "Due A. B. one hundred dollars, on demand."; Edwards on Bills, 131; I Am. Lead. Cas. (sth ed.), 383. ^ Cummings V. Freeman, 2 Humph., 143; Marrigan v. Page, id., 247; Fleming V. Burge, 6 Ala., 373; Brenzer v. Wightman, 7 Watts & Serg., 264; Brewer v. Brewer, 6 Ga., 588; Lowe v. Mur- phy, 9 id., 341; Johnson v. Johnson, Minor (Ala.), 263; Harrow V. Dugan, 6 Dana., 341; Kilgore v. Bulkley, 14 Conn., 383. ^Lord V. Harvey, 3 Conn., 372; DeForest v. Hunt, Sid., 184; Austin V. Bostwick, 9 id., 501; Lee v. Wyse, 35 id., 384. 62 CURRIER V. LOCKWOOD. [CHAP. 4, Claim of Defendant in Supreme Court — Lockwood, contra for defendent said: First. "A note must contain a legal promise for the certain payment of a certain sum.' An acknowledgment of a debt is not a promissory note.^ The note must contain and must express the promise of the debtor to pay the money."* Secondly. "The statute of hmitations applies. Our courts have never adopted the expedient which has prevailed to some exextent in other states, of taking cases out of the statute upon some doubtful or equivocal acknowledgment, but have always held that the party must have intended to relin- guish its protection, or that its provisions must be applied.* An admission that the note was unpaid, accompanied by the claim that it was "outlawed," is not sufficient to remove the bar of the statute.^ An offer to pay a certain sum in satis- faction of a larger one, will not remove the bar of the statute, even as it regards the sum actually offered, unless the offer is accepted when made."'* Decision of the Court. — The first question in this case is whether the writing sued upon is a promissory note within the meaning of those words in the statute of limitations. The statute is as follows: "No action shall be brought on any bond or writing obligatory, contract under seal, or promissory note not negotiable, but within seventeen years next after an action shall accrue." The instrument sued upon is as follows: ' I Parsons on Notes and Bills, 23, 24; Story on Prom. Notes, § 14; Bouvier's Law Diet., Due Bill, Promissory Note, and I. O. U. ^i Parsons on Notes and Bills, 25; Byles on Bills, 11, 28; Smith V. Allen, 5 Day, 340; Beeching v. Westbrook, 8 Mees. & Wels., 412; Melanotte v. Teasdale, 13 id., 216; Bowles v. Lam- bert, 54 111., 237. '' I Parsons on Notes and Bills, 25. * Hart's Appeal from Probate, 32 Conn., 539. ^Sanford v. Clark, 29 Conn., 460. 'Bell V. Morrison, i Peters, 531; Smith v. Eastman, 3 Cush., 355; Mumford v. Freeman, 8 Met., 432; Brush v. Barnard, 8 Johns, 407; McLellan v. Albee, 5 Shepley, 184; i Smith Lead. Cas. (H. & W. Notes), part 2d, p. 876. SEC. 13. J CURRIER &. LOCKWOOD. 63 "$i7-i4- "Bridgeport, Jan. 22d, 1863. "Due Currier & Barker seventeen dollars and fourteen cents, value received. Frederick Lockwood. Promissory notes not negotiable are by the statute above recited put upon the footing of specialties in regard to the period of limitation, and for most other purposes such notes have been regarded as specialties in Connecticut. The instrument however to which this distinction has been attached is the simple express promise to pay money in the stereotyped form familiar to all. The writing given in evidence in this case is a due bill and nothing more. Such acknowledgments of debts are common and pass under the name of due bills. They are informal memoranda, sometimes here as in England in the form of "I. O. U." They are not the promissory notes which are classed with specialties in the statute of lim- itations. The law implies indeed a promise to pay from such acknowledgments, but the promise is simply implied and not expressed. It is well said by Smith, J., in Smith v. Allen,' ' ' Where a writing contains nothing more than a bare acknowl- edgment of a debt, it does not in a legal construction import an express promise to pay ; but where a. zvriting itnports not only the acknowledgment of a debt but an agreement to pay it, this amounts to an express contract." In that case the words ''on demand" v^ere held to import and to be an express promise to pay. That case adopts the correct principle, namely, that to constitute a promissory note there must be an express as contra-distinguished from an implied promise. The words "on demand" are here wanting. The words ' ' value received, " which are in the writing signed by the defendant, cannot be regarded as equivalent to the words "on demand." The case of Smith v. Allen went to the extreme limit in holding the writing then given to be a promisory note, and we do not feel at liberty to go further in that direction than the court then went. The writing then not being a promissory note, the plain- tiff's action is barred by the six years clause of the statute, unless revived by a new promise to pay. 'S Day (Conn), 337. 64 CURRIER V. LOCKWOOD. [CHAP. 4, The offer of the defendant to give a ton of coal for the note was not accepted. It was a mere offer of compromise, and clearly no acknowledgment to take the case out of the statute. The conversation between the parties, recited in the motion, taken together as one transaction, was held by the Court of Common Pleas not to be sufficient evidence of a new promise. The result of the interview was a refusal to pay. The opening of the conversation on the part of the defendant would seem to admit the justice of the plaintiff's demand. The expression of a wish "/(? settle the note" would seem to imply that it was justly due; but the word ''settle^' is some- what equivocal, and taking the whole interview together, we think the Court of Common Pleas made no mistake in law in deciding as it did. A new trial is not advised. In this opinion Park and Carpenter, Js., concurred. Foster, J. That the paper before us is more correctly described as a due bill, than as a promissory note, is unques- tionable. That it would be regarded among business men, in the daily transactions of life, as conferring the same rights, and imposing the same liabilities, as a promissory note, seems to me equally unquestionable. It was so regarded by the parties to it; it was so treated and so spoken of whenever it was alluded to. This is manifest from the record; "The defendant came into the store of said Barker (one of the plaintiffs), and said to him: ' Have you that note }' or 'Where is that note.'' and that he 'wished to settle it.' Barker told him 'the note was in Mr. Steven's hands, etc.'" Any writing importing a debt, and an obligation to pay it, especially if it contains the words ' ^for value received, " is, in the popular judgment, a note. This instrument is clearly of that char- acter. It was clearly the intent of the parties so to make it, and it is evident that they supposed they had so made it. To hold otherwise would seem to be contrary to the understand- ing and intent of the parties. But it is claimed that this instrument is not, in law, a promissory note, and that the legislature, in passing the stat- utes of limitation, could never have intended to put such contracts on a footing with specialties. SEC. 1 3. J CURRIER V. LOCKWOOD. 65. Now if we examine the various works on bills of exchange and promissory notes, we do not find that the learned authors of those treatises agree upon any exact and precise definition of a promissory note. Chitty, Bayley, Byles, Story, and Parsons, however, all agree that no particular words are necessary to make a bill or note. "It is sufficient if a note amount to an absolute promise to pay money."' Chancellor Kent, following substantially Mr. Justice Bayley, says, '-A note is a written promise, by one person to another, for the payment of money, at a specified time, and at all events. "^ Judge Parsons says, "A promissory note is, in its simplest form, only a written promise."^ These definitions imply that a note must contain an express promise to pay. And Mr. Justice Story says: "But it seems that, to constitute a good promissory note, there must be an express promise upon the face of the instrument to pay the money ; for a mere promise implied by law, founded upon an acknowledged indebtment, will not be sufficient."* Courts of the highest authority, however, both in England and in this country, hold otherwise; nor are all the text-writers so to be understood. ' ' No precise words of contract are necessary in a promissory note, provided they amount, in legal effect, to a promise to pay."^ What 'Words and Phrases are Equivalent to the W^ord "Promise." — It is settled that a note need not contain the words ' promise to pay, ' if there are other words of equivalent import."'* What words are of "equivalent import," and are sufficient to raise a pronjise to pay, has occasioned much dis- cussion. "The distinction between the cases on this point," says Mr. Justice Story, in a note on the section above quoted, "is extremely nice, not to say sometimes very unsatisfactory." English Cases. ^ — As long ago as 1795, C. J. Eyre, sitting •■ Chitty on Bills, 428. '3 Com., 74. ' I Parsons on Notes and Bills, 14. ■'Story on Prom. Notes, 14. ^ Byles on Bills, 8. " I Parsons on Notes and Bills, 24. 66 CURRIER V. LOCKWOOD. [CHAP. 4, at Nisi Prius, held an "/. O. U. eight guineas" to be merely an acknowledgment of a debt, and neither a promissory note nor a receipt.' In 1800, in the case of Guy v. Harris," Ld. Eldon, whose authority is certainly not inferior to that of C. J. Eyre, held a similar paper to be a promissory note, and ruled it out when offered in evidence, because it had not a stamp. "I owe my father ^^470. Jas. Israel:" — This paper was offered in evidence before Ld. Ellenborough, and he said: " I enter- tain some doubts whether this paper ought not to have been stamped as a promissory note, but on authority of Fisher v. Leslie,' I will receive it in evidence, though unstamped."* // a time be named for payment, these instruments are differ- ently construed.^ In Brooks v. Elkins, "I. O. U. ;£'20, to be paid on the 22d inst.," was held to be either a promissory note, or an agreement for the payment o{ £10 and upwards, and in either case required a stamp. "/. O. U. £Sj, to be paid May Sth,'' was held to be a good promissory note.* The cases are numerous where an instrument has been held to be a good note without an express promise to pay. " I do acknowledge myself to be indebted to A. in ;^iO, to be paid on demand for value received." On demurrer to the declaration, the court, after solemn argument, held that this was a good note within the statute.' In the case of Morris v. Lee,' the words were, "I promise to be accountable to J. S., or order, for ^50, value received by me," and it was held a good promissory note. The court say they "will take the word accountable as much as if it had been pay. " They also notice the words value received. Fortescue, J. said, "This 'Fisher v. Leslie, i Esp. , 425. "Reported in Chitty on Bills, 526. ' I Esp., 245. ^Israel v. Israel, i Camp., 499. Childers v. Boulnois, Dow. & Ry., Nis Prius cases, 8, decided by C. J. Abbot, is to the same effect. See also Tompkins v. Ashby, 6 Barn. & Cres., 541; 9 Dow. & Ry., 543; I Mees. & Wels., 32; S. C. '2 Mees. & Wels., 74. 'Waithman v. Elzee, i Car. & Kirw., 35. ' Cashborne v. Dutton, i Selwyn, Nisi Prius, 320. 'i Esp., 426. SEC. 13.] CURRIER V. LOCKWOOD. 67 is a debt, being for value received, and said on account."' S. C. American Cases — Turning to tiie American cases, we find in our own court the case of Smith v. Allen. ^ This was brought on a paper in these words: " Due John Allen $94.91, on demand." The declaration counted on a promissory note, and alleged a promise to pay in the usual form, setting out the note in the declaration. The defendants demurred, and the Superior Court held the declaration sufficient. On writ of error brought, the Court of Errors sustained the decision. Here was manifestly no express promise to pay; but the court held that there was one implied, and so sustained the claim of the plaintiff. The difference between this and the case at bar is very slight. This contains the words ' ' on de- mand" that at bar the words '■^ value received." The one by its terms is due on demand, and the promise to pay is, there- fore, implied by law, the other is, in legal effect, due on de- mand, and it is difficult to see a good reason why the law does not as readily imply a promise to pay such a debt, as one due on demand by its own terms. Besides a valuable considera- tion is expressed in the case at bar by the words " value re- ceived," while none is expressed in the case of Smith v. Allen. Since the case of Edgerton v. Edgerton,' and the case of Bristol V. Warner,* it is quite clear that, by the law of this state, a promissory note, not negotiable, and not purporting on its face to be for value received, does not imply a consider- ation. Smith v. Allen and the case at bar, are alike in omit- ting the words, " or order," and "or bearer," and so are alike non-negotiable. Such notes however are regarded as within the statute of 3 and 4 Anne.' Passing from this decision in our own court to the courts of New York, where we are accustomed to find questions of mercantile and commercial law as ably discussed and as Intel- 's Mod., 362; I Strange, 629; 2 Ld. Raym., 1396. '5 Day, 337- ^8 Conn., 6. * 19 Conn., 7. ^ Smith V. Kendall, 6 T. R., 123. 68 CURRIER V. LOCKWOOD. [CHAP. 4, ligently decided as in any of our sister states, we find the case of Russell V. Whipple.' The suit was on this paper, "Due S., or bearer, $io." This differs from the case at bar in add- ing the words ''or bearer" and omits the words "value received." The court says it was a promissory note, and that the case was too plain for argument. In Kimball v. Huntington, ^ this paper, "Due R. $325, payable on demand," was held admissible in evidence as a promissory note. Judge Nelson says: "The acknowledgment of indebtedness, on its face, implies a promise to pay the plaintiffs, and the payment by its terms is to be in money, absolutely, on demand." In Luqueer v. Prosser,^ Judge Cowan says: '' If there be in legal effect an absolute promise that money shall be paid, all the rest is a dispute about words. * * * The whole inquiry is, does the paper ifnport an engagem.ent that money shall be paid, absolutely ? If it do, no matter by what words, it is a good note." In Sackett vs. Spencer,* this paper, ." Due S. or bearer, $340, for value received with interest, " the court says " is a good promissory note, and if it specifies no time of payment, it is, in legal effect, payable immediately, and without grace." In Franklin v. March," the Supreme Court of New Hamp- shire held this paper, " Good to R. C. or order, for $30, bor- rowed money," to be a good promissory note. In addition to the cases above cited, the following are very strong authorities to sustain the claim that this is a prom- issory note.* In Johnson v. Johnson,' the court say: "The ' 2 Cow., 536- ' 10 Wend., 675. ^i Hill, 259. * 29 Barb., 180. ^6 N. Hamp., 364. " Cummings v. Freeman, 2 Humph., (Tenn.) 143, where the note read " Due J. F. ^200 — borrowed Oct. 21"; Harrow v. Du- gan, 6 Dana, 341; Flemming v. Surge, 6 Ala., 373; Finney v. Shirley, 7 Mo., 42; McGowan v. West, id., 569; Lome v. Mur- phy, 9, Geo., 338. 'i Ala., 263. Promissory notes must contain a specific promise to pay. The SEC. 13. J CURRIER V. LOCKWOOD. 69 acknowledgment of a debt, due for a valuable consideration, clearly implies a promise to pay it on request." promise must be expressed or implied. No precise words of con- tract are necessary, provided they amount, in legal effect to a promise to pay. Byles on Bills, 8; Gordon v. Rundlett, 28 N. H., 435. A mere acknowledgment of indebtedness is not sufficient to consti- tute a promise. The Following Expressions have been held to Amount to Promises: "Due C. or order"; "due C. on the first day of May"; "due C. or bearer"; " good to bearer "; "due A. B. on demand"; "I acknowledge myself indebted to C. to be paid on demand". .The words "on demand " and "to be paid on day " and "or order", " or bearer " have been thought in them- selves to show that the debtor intended to do more than merely state the balance due on account. These words clearly recognize an obligation and a promise to pay. Where a writing contained nothing more than a bare acknowledgment of a debt, it does not, in legal construction, import an express promise to pay; but where a writing imports not only the acknowledgment of a debt, but also an agreement to pay it, this amounts to an express contract. Smith V. Allen, .5 Day, 337; Russell v. Whipple, 2 Cow., 536; Currier v. Lockwood, supra. A mere promise implied by law, founded on an acknowledged indebtedness will not be sufficient. Brown v. Gilman, 13 Mass., 158. In order to constitute a good promissory note there should be an express promise on the face of the instrument to pay the money. While the promise need not be expressed in any particu- lar form of words, the language used must be such that the written undertaking to pay, may fairly be deduced therefrom. Gay v. Rooke, 151 Mass., 115. Therefore the following instrument, "I. O. U., E. A. Gay, the sum of seventeen dollars for value received. (Signed) John R. Rooke," is an acknowledgment of a debt by the maker, but not a promissory note. Gray v. Bowden, 23 Pick., 282; Gay V. Rooke, 151 Mass., 115; Almy v. Winslow, 126 Mass., 342. Some of the states, however, have by statute extended the law of bills and promissory notes to all instruments in writing whereby any person acknowledges any sum of money to be due to any other person. Rev. Sts. Ind., Sec. 5501; Rev. Sts. 111., C. 98, Sec. 3; Code, Iowa, Sec. 2085; Gen'l Laws, Colo., no. Sec. 90; see also statutes of Idaho, Indiana and Mississippi. Upon the subject of this requisite, it must be said that there is great confusion and quite a conflict of authority. The general rule as stated above is undoubtedly true, but there are some cases which hold to the contrary. In some states it has been held that mere statements of indebt- edness are promissory notes. Thus: 7° CURRIER V. LOCKWOOD. [CHAP. 4, The record discloses the fact that the paper before us was given for the purchase of clothing, and that the price of it has never been paid. Our statute of limitation bars all right "^525 Due G. S. Warren, on corn, five hundred and twenty-five dol- lars. J. Jacquin." Held to be a negotiable promissory note. Jacquin v. Warren, 40 111., 459. Again: Due B. ^150. 00. A". Held to be a note. Brady v. Chandler, 31 Mo., 28. Many cases have held that the addition of such words as, "on demand", "payable on demand", "to be paid", etc., were suffi- cient to convert due bills into notes. The principle may be best illustrated by citing and condensing a few cases: " $500.00. Rome, September 10, 1846. Due the Memphis Branch R. R. and Steamboat Co., of Geor- gia, five hundred dollars payable on demand. D. R. Mitchell." Held to be a good promissory note. 17 Ga., 574. " I do acknowledge myself to be indebted to A. in 500 pounds, to be paid on demand ior value received. B." Held to be a note. The words "to be paid on demand" being held to amount to a promise to pay. Cashburne v. Dalton, P. on B. & N., 8th edit, 371. In Brooks v. Elkins, 2 M & W., 74, the following instrument was held to require a stamp: "nth October, 1831. "I. O. U. 20 pounds to be paid on the 22nd instant. W. Brooks." " I have received the imperfect books which together with the cash overpaid on the settlement of your account amounts to 80 pounds, which sum I will pay in two years." Held to be a note. Wheatly v. Williams, i M. & W., 533. A few cases showing a negative construction will further illus- trate the principle: "I have received the sum of 20 pounds which I borrowed from you and I have to be accountable for the said sum with inter- est." Held to be a.nagreemejit but not a note. Horn v. Redfearne, 4 Bing. N. C, 433. The phrase "to be accountable " is not an equivalent. "I. O. U. 45 pounds 13 shillings which I borrowed of Mrs. Melanotte, and to pay her 5^ till paid. Robert Teasdale." Held, not to be a note. Melanotte v. Teasdale, 13 M. & ^\L, 216. "Memorandum. Mr. Sibree has this day deposited with me SEC. 1 3. J CURRIER V. LOCKWOOD. 7 I of action upon it, unless it is recognized as a promissory note. 60 to recognize it will in my opinion do much less violence to law, than will be done to justice if we permit this defendant 500 pounds on the sale of 10300 pound 3% Spanish, to be returned on demand. James S. Tripp." Held, not to be a note. Sibree v. Tripp, 15 M. & W., 23. "nth September, 1839. " I undertake to pay to Mr. Robert Jarvis the sum of 6 pounds 4 shillings for a suit of clothes ordered by Daniel Page. S. W. WiLKINS." Held to be 2i guarantee, and not a note. Jarvis v. Wilkins, 7 M. & W., 410. In the above case Baron Parke said that had "supplied " been inserted instead of " ordered " it would have been a good note. "At twelve months after date, I promise to pay R. & Co., 500 pounds to be held by them as collateral security for moneys now owing them by J. M., which they may be unable to receive on realizing the securites they now hold and others which may be placed in their hands by him." Held not to be a note. Robbins v. May, 11 Ad. & E., 213. It will thus be seen that it is by no means essential that the word "promise" be inserted in a writing to make it a promissory note. If, in fair legal intendment, it amounts to a "promise " to pay, courts will regard it as sufficient. In accordance with this doc- trine, certificates of deposit have been held to be notes, the necessary promise being inferred from the nature of the instrument. Miller V. Austin, 13 How., 218. And, if these certificates be payable to "A." or "Bearer," they are considered negotiable promissory notes payable to the holder. Maxwell v. Agnew, 21 Fla., riS4- See also, "receipts" for money when containing a promise of re-payment are promissory notes and are negotiable, Green v. Davies, 4 B. & C, 235. This is also true of receipts for money to be "returned when called for." Woodfalk v. Leslie, 2 Nott & McC, 585. But otherwise, when the receipt is merely for money " held subject to order." Roman v. Terna, 40 Tex., 306. Or when the receipt is for money " to be accounted for," it does not amount to a note. Tomkins v. Ashby, 6 B. & C, 541. What Words will Import a Promise to Pay.— The contract need not contain the words "promise to pay"; there are other words of equivalent meaning. It has been held that wherever there is an acknowledgment of a debt together with the use of any of the following words, the contract (if the other essentials appear) will be a good negotiable instrument: "On de- mand "• "value received "; " to be paid on May 5 "; "I promise to be 'accountable 'on demand"; " or order "; "or bearer"; "to 72 CURRIER V. LOCKWOOD. [CHAP. 4, thus to escape the payment of an honest debt for the neces- saries of Hfe. be paid"; " John Mason, 14th Feb., 1836, borrowed of Mary, his sister, the sum of 14 pounds in cash, as per loan, in promise of pay- ment, for which I am truly thankful," (Ellis v. Mason, 7 DowL, 598). In some jurisdictions the word "due " has been held to import a a promise to pay. Jacquin v. Warren, 40 111., 459; Lee v. Balcora, 9 Colo., 216; 11 Pac. Rep., 74; Anderson v. Pearce, 36 Ark., 293; Brady v. Chandler, 31 Mo., 28. See statutes of your state. See upon the principal propositions. Green v. Davis, 4 B. & C, 239; Wheatley V. Williams, i M. & W., 533; Casborne v. But- ton, Selwyn's Nisi Prius, 329; Kimball v. Huntington, 10 Wend., 67s; Block V. Bell, i M. &R., 149; Israel v. Israel, i Camp., 499; Brooks V. Elkins, 2 M. & W., 74; Waithman v. Elsee, i C. & K., 35; Dullea V. Emery, 2 Cr. & D. C. C, 506; Ellis v. Mason, 7 Bowling, 598; White v. North, 3 Exch. Rep., 689 (18 L. J. Rep. [N. S.] Exch., 316); Shrivell v. Payne; 8 Bowling, P. C, 441; Forward v. Thompson, 12 Upper Canada, Q. B. Rep., 103; Rob- inson V. Bland, 2 Burr., 1077; Dickenson v. Teague, 23 L. T. Rep., 65; Ball v. Allen, 15 Mass., 433; Gordon v. Rundlett, 28 N. H., 435; Smith v. Allen, 5 Bay (Conn.), 337; Russell v. Whip- ple, 2 Corv. (N. Y.), 536; Carver V. Hayes, 47 Me., 257; Bacon V. Bicknell, 17 Wis., 523; Huyck v. Meador, 24 Ark., 191; Frank- lin v. March, 6 N. H., 364; Bank of Orleans v. Merrill, &c., 2 Hill(N. Y.), 29s; Miller v. Austen, 13 How., 218; Poorman v. Mills, 35 Call., 118; Blood v. Northrup, i Kans., 28; Howe v. Hartness, 11 Ohio St., 449; Gate v. Patterson, 25 Mich., 191; Tripp v. Curtenius; 36 Mich., 494; Hunt v. Bivine, 37 111., 137; Lafayette Bank v. Ringell, 51 Ind., 393. Due Bills. — In some jurisdictions an ordinary due-bill such as: "due A"; "I. O. U.", have been held to be good promissory notes. Jacquin v. Warren, 40 111, 459; Lee v. Balcon, 9 Colo., 216; Fleming V. Burge, 6 Ala., 373; Brady v. Chandler, 31 Mo., 28; St. Louis R. R. Co. v. Camden Bk., 47 Ark., 545. This, however, is clearly against the weight of authority. Cur- rier v. Lockwood, 40 Conn., 348; Fisher v. Leslie, i Esp., 425; Guy v. Harris (1800), Chitty on Bills, 426; Israel v. Israel, i Gamp., 493; Gay v. Rooke, 23 N. E. Rep. (Mass.), 835; Brooks V. Elkins, 2 M. & W., 74; Payne v. Jenkins, 4 Car. & P., 335; Smith V. Smith, i F. & F., 539; Gould v. Courbs, i C. B., 543; Bowles V. Lambert, 54 111., 237 (1870); Carson v. Lucas, 13 B. Mon., 213 (1852); Garland V. Scott, 15 La. An., 143. In order to amount to a promissory note the words used must at least be words from which a promise to pay money can be im- plied. Price V. Jones, 105 Md., 543; Strickland v. Holbrook, 7 s Cal., 268. SEC. 13.] CURRIER V. LOCKWOOD. 73 I would admit the paper offered in evidence in support of the first count in the declaration. In this opinion Phelps J., concurred. An I. O. U. which does not contain any promise to pay is generally held not to constitute a promissory note, but is a mere evidence of an account stated. Gray v. Bowden, 23 Pick., 282; Almey v. Winslow, 126 Mass., 342; Fisher v. Leslie, i Esp., 425. Israel vs. Israel, i Camp. 499; Carnwright v. Gray, 127 N. Y., 93- It has recently been held in New York that a written state- ment that a certain amount of money is due a payee therein named, followed by the signature of the maker of the statement, implies that the money is due from the maker and is an acknowl- edgment of indebtedness. The acknowledgment of the indebted- ness, and that it is due, implies a promise to pay it on demand. Hageman v. Moon, 131 N. Y., 462. An instrument merely acknowledging a deposit, cannot be regarded as a promissory note. There must be some word or statement raising a promise to pay. Kilgore v. Bulkley, 14 Conn., 363, 383; Patterson v. Poindexter, 6 Watts & Serg., 227; Sibree v. Tripp, IS M. & W., 23. In Tomkins v. Ashby, (6 B. & C, 541) (i M. & M., 32) it was held that the following memorandum, " Mr. T. has left in my hands 200 pounds" was not a promissory note. See also Payne v. Jenkins, 4 Car. & P., 335; Children v. Boulnois, Dow. & Ry., 8; Little v. Slackford, M. & M., 171. Neither will the written acknowledgment, on the back of a con- tract, acknowledging it to be due, signed by the promissor, create a promise to pay the sum named in the contract. Gray v. Bow- den, 23 Pick., 282; Almey v. Winslow, 126 Mass., 342; Daggett v. Daggett, 124 Mass., 149; Biskup v. Oberle, 6 Mo. App., 583. Promise to Give. — Where the words used in a negotiable contract import a promise "to give" simply a certain sum of money they will not create a promissory note. Caviness v. Rushton, loi Ind., 500; Johnston v. Griest, 85 Ind., 503; Williams v. Forbes, 114 111., 167; Kirkpatrick v. Taylor, 43 111., 207; Pratt v. Trustees, 93 Ill-> 475- 74 PEARSON V. GARRETT. [CHAP. 4, SECTION 14. THE ORDER IN A BILL AND THE PROMISE IN A NOTE MUST BE ABSOLUTE AND UNCONDITIONAL. PEARSON V. GARRETT,! In the King's Bench, Trinity Term, 5 Will & Mary, 1694. \_Reported in 4 Modern Rep. 242.^ Form of Action John Pearson complains of John Gar- rett, being in the custody of the marshal, &c. , for that, to wit, Whereas the city of London is an ancient city; and also whereas in the same city; to wit, at the parish of St. Mary le Bow, in the ward of Cheap, there is and hath been, from time immemorial, an ancient and laudable custom, approved and used in the same, between merchants and other persons inhab- iting in the same city, namely, that if any person inhabiting in the said city shall make any bill or note in writing subscribed under his hand, and by the same bill or note he should prom- ise to pay any person any sum of money at any time or any times in the same bill or note mentioned, such person who made the same bill or note, by the same promise and consideration aforesaid, among merchants and other persons aforesaid, so as aforesaid used and approved, is bound to pay the same sum of money in the same bill or note mentioned to the same persons to whom promise of payment thereof by the same bill or note was made to pay the same at the time or times in and by the same bill and note for payment thereof is denoted, according to his promise aforesaid. And whereas, on the 21st day of October, in the fourth year of the reign of the Lord William and the Lady Mary, the now king and queen of England, &c. , at London aforesaid, to wit, in the parish of St. Mary le Bow, in the ward of Cheap aforesaid, the same John Garrett was a 'This case is cited in Chitty on Bills, 12, 135, 517; Story on Bills of Exchange, 46; Wood's Byles on Bills & Notes, 168; Ben- jamin's Chalmers on Bills, Notes and Checks, 27; Daniel on Ne- gotiable Instruments, 41; Tiedeman on Commercial Paper, 25; Randolph on Commercial Paper, 153; Norton on B. & N., 38; Ames on B. & N., 30 n. SEC. 14.] PEARSON V. GARRETT. 75 person residing in the city of London aforesaid, and so there residing on the same 21st day of October, in the fourth year aforesaid, in the parish and ward aforesaid, by a certain note in writing, subscribed with his own proper hand, promised to pay to the said John Pearson, or his assigns, sixty pounds within two months next after the aforesaid John Garrett should be lawfully married to one Elizabeth Petty, that is to say, fifty pounds thereof for himself, the aforesaid John Pearson, and ten pounds thereof for his wife. And the same John Pearson in fact saith, that the aforesaid John Garrett afterwards, to wit, on the 28th day of February, on the fifth year of the reign of the said lord the now king and lady the now queen, at London aforesaid, in the parish and ward aforesaid, to the said Elizabeth Petty was lawfully married; by which, and by force of the custom aforesaid, the aforesaid John Garrett be- came bound to pay to the said John Pearson the said sixty pounds, according to his promise aforesaid; and thereupon in consideration of the premises, the aforesaid John Garrett, then and there, to wit, on the 28th day of February, in the fifth year aforesaid, at London aforesaid, in the parish and ward aforesaid, undertook, and faithfully promised the said John Pearson, then and there, that he the said John Garrett the aforesaid sixty pounds to the said John Pearson, within two months next after the marriage aforesaid had, well and truly to pay and satisfy. Nevertheless the afore- said John Garrett, not regarding his promise and under- taking aforesaid, but contriving and fraudulently intending the said John Pearson in this behalf craftily and subtilely to de- ceive and defraud, the said sixty pounds, or any part thereof, to the said John Pearson hath not yet paid, although to do it the said John Garrett afterwards, to wit, on the 2d day of May, in the fifth year aforesaid, at London aforesaid, in the parish and ward aforesaid, by the same John Pearson was re- quired; but the same John Garrett to pay him the same, or him for the same hitherto in any wise to satisfy, hath alto- gether refused, and yet doth refuse. Therefore the said John Pearson says, that he is thereby injured, and hath received damage to the value of one hundered pounds. And therefore he produces the suit, &c. ■J 6 PEARSON Zl. GARRETT. [CHAP. 4, Form of Defense. — To this declaration the defendant demurred, and the plaintiff joined in demurrer. The action was brought upon a note for the payment of sixty guineas when the plaintiff should marry such a person, &c., in which the plaintiff declared, as upon a bill of exchange, setting forth the custom of merchants, &c.' The exceptions taken were, viz., ist, that the plaintiff does not aver that he was a merchant, or 2d, that the note was made secundum consuetudinem mercatorum; and 3d, neither has he laid any consideration. This is not such a custom amongst merchants of which this Court is obliged to take notice as part of the law of the land; for in truth there is no such custom; it is only an agree- ment founded upon a brokage, and therefore cannot be within the custom of merchants; neither was there ever yet any pre- cedents to pay money upon such a collateral contingency. It is no more than a voluntary note given with a present consid- eration; and if such should be allowed to be within the custom of merchants, then everything which is given without a con- sideration may be as well within the custom, which would quite change the law.^ Reply of Plaintiff. — The question is, Whether this custom be good or not .'' It is sufficiently alleged in the declaration; it is not laid to be inter mercatores only, but inter alias personas residentes, &c.; and if such a custom can be good, then it is admitted to be so by the demurrer. Dr. Witherly's son brought the like action upon a note; and he was a gentleman, and no trading merchant, but traveling into France, and had judgment, which was affirmed in the exchequer chamber.* No ' An action brought by the payee of a contract (as a negotia- ble contract), by which the drawer or maker promises to pay a cer- tain sum of money within two months after the drawer or maker shall have married cannot be sustained; for such a contract is not within the custom of merchants, i Salk., 129; i Strange, 674; 2 Bl. Com., 446; 3 Burrows, 1637, 1670; 2 Ld. Raymond, 757. ^8 Mod., 265, 307, 362; 10 Mod., 286, 294; II Mod., 180; 12 Mod., 15, 36, 380. 'i Ld. Ray, 175, 281, 744, 759, 1481. 'Sarsfield v. Witherley, i Show., 125; Comb., 45; 2 Ventris., 292; Holt, 123. SEC. 14.] PEARSON V. GARRETT. 77 reason can be offered why such a note should not bind as well as a bond, since the consideration for which it was given was very just, for it is lawful for one man to help another to a wife. The Decision. — If the note had been given by way of com- merce it had been good, but to pay money upon such a con- tingency cannot be called trading, and therefore not within the custom of merchants. Judgment was given for the defendant.' ' By 3 & 4 Ann. c. 9 it is provided that, "All notes in writing signed by any person, whereby such person shall promise to pay to any other person, or his order or unto bearer, any sum of money mentioned in such note, shall be taken and construed to be due and payable to the person to whom the' same is made payable, and shall be assignable or indorsable over in the same manner as inland bills of exchange are or may be according to the custom of merchants; and the person to whom such money is, by such note, made payable, may maintain an action for the same as upon an inland bill of exchange, drawn according to the custom of mer- chants, against the person who signed the same; and the person to whom such note is indorsed may maintain his action for the money, either against the drawer or any of the indorsees, as in cases of inland bills of exchange." This act being for the benefit of com- merce, is to be liberally construed, 3 Wilf. i; but no notes are within the benefit of it, unless they would, as bills of exchange, have been within the custom of merchants. Martin v. Chauntry, 2 Stra., 271; Bull., N. P., 273; Joscelyne v. Lassere, Fort., 281; Jenny v. Hale, 8 Mod., 265; Jefferies v. Austin, i Stra., 674; Kyd on Bills of Exchange, n 'o 37> ^'^^ see Beardsley v. Baldwyn, 2 Stra., 1 15 1, in point. Payment Must Not Depend Upon a Contingency.— The order and the promise contained in commercial contracts must be simple, certain, unconditional and not subject to any con- tingencies. And hence, the general rule is, that a negotiable contract must not be limited in payment to particular circumstances and events, which cannot be known to the holder of such instruments , in the general course of its negotiations; and if the contract wants upon its face this essential quality, or character of certainty, the defect is fatal It is then nothing more than a common law obli- gation. Carlos v. Fancourt, 5 Term R. 482; Dawkes v. Earl of Dolovaine, 2 Wm. Black., 782; Citizens Nat. Bk. v. Piollet, 126 Pa. St., 194; Chandler v. Carey, 64 Mich., 237; Siegel v. Bank, 131 111., 569; Culbertson v. Nelson, 61 N. W. Rep., 854. An order or promise to pay out of a particular fund will render the instrument conditional. If however the order or promise simply indicates a fund out of which reimbursement may be had, it is not 78 PEARSON V. GARRETT. [CHAP. 4, conditional. Worden v. Dodge, 4 Denio, 159; Richardson v. Carpenter, 46 N. Y., 660; Hunger v. Shannon, 61 N. Y., 251; Cota V. Buck, 7 Mete. (Mass.), 588; Miller v. Poage, 56 la., 96; Schmittler v. Simon, loi N. Y., 554. Therefore, a promise to pay "out of my father's estate;" "oroutof the growing substance;" "or on the return of this certificate;" "or in one and one-half years at my option;" or "a promise to pay with a right to extend the time of payment," or " with an understanding that the contract will be renewed at maturity," have been held not to be good com- mercial contracts on account of conditions. So also will a prom- ise to pay, "out of rents" or "out of A's money when he shall receive it," or "on the sale of certain property or produce" or "out of a certain fund," or "on account of freight" or "when the drawer shall come of age" or "thirty days after the ship 'A', shall arrive," be bad for uncertainty. Palmer v. Pratt, 2 Bing. R., 185; Colehan v. Cooke, Willes R. , 393; Jenny v. Earle, 2 Ld. Raymond, 1361; Goss v. Nelson, i Bun. R., 226; Banbury v. Lisset. 2 Strange R., 1211; De Forrest v. Frary, 6 Cow. (N. Y.), 151; Ferris v. Bond, 4 Barn. & Aid. 679; Beardsley v. Baldwyn, 7 Mod, R., 417 (reported also in 2 Strange, ir5i); Willis, R., 399, (where the promise was to pay, "when the drawer shall marry," which was held to be conditional and therefore bad). Pearson v. Garrett, 4 Mod. Rep., 242; Brooks v. Hargreaves, 21 Mich.; 255; Chandler V. Carey, 64 Mich., 238; Gushing v. Field, 70 Me., 50; Costello V. Crowell, 127 Mass., 293; Woodburry v. Roberts, 59 la., 348; ("when the estate of 'M' is settled up,") Husband v. Eqling, 81 111., 772; Jennings v. Bank, 22 Pac. Rep., 777. In some jurisdictions it has been held, that, where payment was a certain time after sight, or when realized, it was upon condition and therefore bad. Alexander v. Thomas, 16 Adol. & Ellis, 333; 16 Q. B., 333; Charlton v. Reed, 61 Iowa; 166. See also the following cases upon the general proposition; Blackman v. Lehman, 63 Ala., 547; Power v. Ward, 6 Gray, 175; Stults v. Silva, 119 Mass., 137; Worth v. Case, 42 N. Y., 363; Fleury v. Tufts, 25 111. App., loi; Blake v. Coleman, 22 Wis., 396; White V. Gushing, 88 Me., 339. If the bill or note contains, in addition to the order or prom- ise to pay money, an order or promise to do an act it will not be sustained as a negotiable instrument. Davies v. Wilkinson, 10 Aid. & EL, 98; Killam v. Schoeps, 26 Kans., 310; Cook vs. Sat- terlee, 6 Con., 108; Leonard v. Mason, i Wend., 522; Valley Nat. Bk. V. Crowell, 148 P. St., 284; Osborn v. Hawley, 19 Ohio, 130; First Nat. Bk. v. Slaughter, 98 Ala., 602; Hodges v. Shuler, 22 N. Y., 114. The instrument may, however, contain a statement showing the facts out which the transaction arose without becoming conditional. Siegel of v. Chicago &c. Bank, 131 111., 569; Stevens v. Blunt, 7 Mass., 240; Davis v. McCready, 17 N. Y., 320. SEC. 1 4. J PEARSON V. GARRETT. 79 The Reason for the Rule. — Judge Story has well stated the reason for this essential of bills and notes, to be " that it would greatly perplex the commercial transactions of mankind, and diminish and narrow their credit, circulation, and negotiabil- ity, if paper securities of this kind were issued out into the world, encumbered with conditions and contingencies; and if the persons to whom they are offered in negotiation, were obliged to inquire, when these uncertain events would probably be reduced to cer- tainty, and whether the conditions would be performed or not." Story on Bills of Exchange, Sec. 46; Jenny v. Earle, 2 Ld. Ray- mond, 1361; Colehan v. Cooke, Willes, Rep., 393; Goss v. Nel- son, I Burr., R., 226; Dankes v. Earl, etc., 2 W. Black., 782; DeForest v. Frary, 6 Cow. (N. Y.), 151; Banbury v. Lisset, 2 Strange, 12 11. In Clarke v. Perceval, 2 B. and Ad. 660, the instrument was in the following form: ";^i2oo. "Warrington, 4th March, 1824. On demand, we promise to pay Mr. George Clark, or order. Twelve hundred pounds, for value received, in stock, ale, brewing vessels, etc., this being intended to stand against the undersigned Mary Perceval as a setoff for the sum left me in my father's will above my sister Anne's share. Thomas Perceval, Mary Perceval." (Witness) William Hall. The court of King's Bench held that the twelve hundred pounds was not payable at all events and the instrument was, there- fore, not a promissory note. The Bill or Note will be Sustained if the Condition is Sure to Happen. — A negotiable contract may be made payable upon some condition or the happening of some event, if the con- dition or the event is sure to come to pass. Thus a promise to pay "ten days after the death of A" will be sustained, for that event is sure to happen. Roffey v. Greenwell, 10 Al. & E., 222; Price V. Taylor, 5 Hurl. & N., 540; Protection Insurance Co. v. Bill, 31 Conn., 204; Goss v. Nelson, i Burr, 228. In the case of Andrews v. Franklin, the promise was "to pay within two months after the ship 'Swallow' is paid off." This was supported on the ground that the paying off of the ship is a thing of a public nature and will therefore come to pass, i Strange, 24 (1717); Evans v. Underwood, i Wils, 262; Beardsley v. Baldwin, 7 Mod., 417, 419. If the time of payment must surely come, though the particular day is not mentioned, nor perhaps ascertainable at the inception of the contract, the note or bill is good and negotiable. Thus notes payable a certain time after a man's death, have been held good; for it is certain that every man must die. Bristol v. Warner, 19 Conn., 7; Conn. v. Thornton, 46 Ala., 588. "As soon as realized" and "to be paid during the coming 8o PEARSON V. GARRETT. [CHAP. 4, season" occurring in the same note and read together have been held not a condition, as payment must be due before the close of harvest. Cota v. Buck, 7 Mete, 588. Notes Payable at the " Convenience " of the Maker are Payable W^ithin a Resonable Time.— In the cases, we find in- stances of notes containing statements of the time of payment which, if taken literally, would enable the maker to refuse payment forever. In these instances, the courts have held the notes to be due a reasonable time after their date. Works v. Hershey, 35 la., 340; Crooker v. Holmes, 65 Me., 195. In the 35 la., 340, the promissory note was in the following form: ' ' On demand after date, I promise to pay to the order of Niks Brooks $2,^12.81 payable at Cincinnati when convenient." Held, that the maker was bound to pay within a reasonable time after the date of the note. In discussing the construction of the note. Beck, C. J., said: "The words 'payable at Cincinnati, when convenient,' cannot be construed to nullify the other words of the instrument, viz., '■On demand, I promise to pay.' If any force be given to them it will be that the maker bound himself within a reasonable time to pay the amount, after the date of the note. " In the 65 Me., 195, the language of the court was: "Where the maker of a note promises to pay a certain sum when he shall sell the place he lives on, the debt is absolute, though its payment may be postponed; it is the duty of the maker to sell within a rea- sonable time, that he may discharge his indebtedness; he cannot avoid liability by putting it out of his power to perform his contract." In De Wolfe v. French (51 Me., 420), it was held, that where a debt is due absolutely, and the happening of a future event is fixed upon as a convenient time of payment merely, and the future event does not happen as contemplated, the law implies a promise to pay within a reasonable time. In Sears v. Wright (24 Me., 278), this rule was followed where the note was payable "from the avails of the logs bought of M. M., when there is a sale made." In Smithers v. Junckers (41 Fed. Rep., loi), Gresham, J., held the following to be a good promissory note and payable within a reasonable time: ''Chicago, III., Nov. i, 1883. ''For value received I promise to pay to S. F. Smithers two thousand and forty-eight and 2^-100 dollars, payable at my conven- ience, and upon this express condition, that I am to be sole judge of such convenience and time of payment. A. Junkers." The same rule was applied in the case of Lewis v. Tipton, 10 Ohio St., 88, where the promise was to pay "when I can make it SEC. 14. J PEARSON V. GARRETT. 8 1 convenient." Edwards on Bills of Exchange and Promissory Notes, 154, note 4, Capron v. Capron, 44 Vt., 410. Conditions may be Imposed by an Indorsement. — A negotiable contract, absolute in form, may be made condi- tional by an indorsement made before delivery. In the case of Barnard et al. v. Gushing et al. (4 Mete, 230), the contract was an absolute promise to pay with the indorsement " We agree not to compel payment for the amount of this note, but to receive the same when convenient for the promissor to pay it." It was held that no action could be maintained upon this promise. See also Hartley V. Wilkinson, 4 Camp., 127; 4 M. & S., 25. Inconsistent Conditions will be Disregarded. — Bayley in his work on Bills cites a case (2 Atk., 32) where the note read, "Borrowed of J. S. 50 pounds, which I promise never to pay." The court rejected the word "never" and held the promissor liable. A note payable "when payor and payee mutually agree" is payable in a reasonable time. Page v. Cook, June 21, 189s (Mass.); 41 Northeastern Rep., 115. In the case of Ubsdell V. Cunningham (22 Mo., 124), the promise was "as soon as col- lected from my accounts at P.", and it was held to be an absolute promise to pay. A "promise to pay if my brother does not" upon a contin- gency will not be supported. Appleby v. Biddolph, 8 Mod., 303 (T717). A promise to pay "at four years after date, if I am then living, otherwise this bill to be null and void, is payable upon a contingency and not a good negotiable contract. Braham v. Bubb, Chitty on Bills of Exchange 87 (1826); Gillilan v. Myers, 31 III, 525; Eldrhd v. Mallory, 2 Colo., 320; Hays v. Gwin, 19 Ind., 19. "I promise to pay or cause to be paid," is not good, Lovell V. Hill, 6 C. & P., 238; Shenton v. James, 5 Q. B. Rep., 199; Jarvis v. Wilkins, 7 M. & W., 410; Munger v. Shannon, 61 N. Y., 251; McGee v. Larramore, 50 Mo., 425; Blake v. Coleman, 22 Wis., 415. A Condition which Changes the Time of Payment Does Not Destroy the Bill or Note.— It is no objection to a note payable at a certain date that it permits payment before maturity. Thus a note at twelve months "or sooner if made out of a certain sale" is good. Mahoney v. Fitzpatrick, 133 Mass., 134; Ernst V. Steckman, 74 Pa. St., 13; Walker v. Woolen, 54 Ind., 164; Woolen v. Ulrich, 64 Ind., 120; Palmer v. Hammer, 10 Kan., 464; Helmer v. Krolick, 36 Mich., 371. If it is made payable absolutely at some time certain uncon- ditionally, it will be sustained, even though by some possibility it may be paid sooner. To illustrate in the note as follows: "Ann Arbor, Mich., May 24, i8g8. "Six months after date I promise to pay John Doe or order, one hundred dollars, for value received, or as soon as T can sell my property. Richard Roe. 82 PEARSON V. GARRETT. [CHAP. 4, There is an absolute promise to pay at a time certain, but may- be paid at an earlier date. The fact that it may be paid before the time stated does not make the promise conditional. Ernst v. Steckman, 74 Pa. St., 13; Charlton v. Reed, 61 la., 166; Palmer v. Hammer, 10 Kans., 464; Woolen v. Ulrich, 64 Ind., 120. Nor does it invalidate the note, if it recites that on payment, the payee shall sell a machine to the maker. Hawley v. Bingham, 6 Or., 76. Nor does a reservation in the note of a right to pay in United States bonds invalidate the instrument as a negotiable security. Dinsmore v. Duncan, 57 N. Y., 573. The words, "payable on the return of this certificate," in- serted in the document, if a condition at all, constitutes a lawful one, being merely a demand for the surrender of the evidence of indebtedness. Smilie v. Stevens, 38 Ver., 316. Conditions, to be Binding, must appear upon the Bill or Note. — Conditions to effect negotiability must appear on the face of the written instrument, and when not so appearing, cannot be proven by parole. Jones v. Shaw, 67 Mo., 667; contra 4 Mete. 230 supra. In discussing this question, a Texas court laid down the fol- lowing proposition: — "Where a bill, payable at a certain day is presented for acceptance and dishonored, the payee may sue the drawer at once; and a plea by the latter setting up an oral agree- ment made previous to or contemporaneous with the drawing of the bill, that the drawer should not be liable to pay the amount of the bill until the time stipulated, is bad; for the reason that it pro- poses to vary by oral evidence the legal effect of a contract in writing." During the American civil war, notes were frequently given payable a certain time "after peace," or the "ratification of peace" between the United States and the Confederate States. In some states, these obligations have been held actionable upon the cessation of hostilities; while in others they have been declared invalid as being conditioned upon the success of insurrection. Brewster v. Williams, 2 S. Car., 455; Knight v. McReynolds, 37 Tex., 204. A note or bill payable out of a particular fund is not payable at all events and unconditionally, inasmuch as the fund may prove deficient Atkins v. Marks, i Cow., 6gi. There is an exception, however, in case the person having possession of the fund drawn upon accept the bill so drawn. This establishes the negotiability of the instrument at once, and, as between drawer and payee it operates even before acceptance as an equitable assignment of the fund it refers to. Am. & Eng. Encyo., 320. SEC. 15. J RHODES V. LINDLEY. 83, SECTION 15. THE ORDER IN A BILL AND THE PROMISE IN A NOTE. MUST BE FOR THE PAYMENT OF MONEY ONLY. RHODES V. LINDLEY. 1 In the Suprkme Court of Ohio, December, 1827. [Reported in j Ohio, 5/. ] Form of Action — This was an action of assumpsit, upon a note of hand given by the defendant, to Hezekiah Rhodes or bearer, promising to pay fifty dollars, at a day sub- sequent, "in good merchantable whisky, at trade price." The declaration set forth, in terms, an assignment and deliv- ery of the note to the plaintiff, and claimed to recover as bearer. Form of Defense The defendant demurred, and assigned as a cause of demurrer, that the note was not nego- tiable. The court of common pleas in Trumbull county gave judgment for the plaintff, and the defendant obtained this writ of error, which was adjourned here for final decision. Decision — At the common law, this paper was not assign- able; neither is it assignable under our statute. The plaintiff admits this; but claims to recover, on the ground, that being made payable to bearer, any person, who is the actual bona fide owner, may maintain the action as bearer. Were it a note for money, this position would be a correct one. But that doctrine has never been applied to executory contracts for the delivery of property, or for the performance of any partic- ular act. The case of Geddings v. Byington,' decided upon the cir- cuit, at Ashtabula, is supposed to have settled this doctrine differently. This inference is deduced, not from the point de- 'This case is cited in Daniel on Negotiable Instruments, 55;, Tiedeman on Commercial Paper, 29; Norton on Bills and Notes, 49. See also 14 Am. Dec, at 422, where the case is reported with extended notes. ^ 2 Ohio, 228. 84 RHODES V. LINDLEY. [CHAP. 4, cided, but from some remarks of the judge in giving the opinion. These were only intended to apply to a note for the payment of money, made payable to a payee or bearer. It General Rule. — It is the first and principal requisite that commercial contracts must be for the payment of money only, and such payment must be absolute and not contingent, either as to amount, event, fund or person; and if they are made payable in anything else, such as merchandise or other property susceptible of loss or variation in value, they will not be good commercial con- tracts, but of course will be sustained as common law contracts. Chitty on Bills, 153; ("ook v. Satterlee, 6 Cow., 108; Worden v. Dodge, 4 Denio, 159; Archer v. Claflin, 31 111., 306; Tibbits v. Gerrish, 25 N. H. , 41; Horton v. Arnold, 17 Wis., 139. Exception. — May be Payable in Merchandise if at the Option of the Payee. — Neither will the contract be sustained as a commercial contract if it is payable in money oj- merchandise in the alternative, unless the option of accepting the money or mer- chandise is exclusively in the holder. Dan. on Negot. Inst., Sec. 55; Norton on Bills and Notes, Sec. 23; Auerbach v. Pritchett, 858 Alar. 451; Hosstatterv. Wilson, 36 BarL, 307; McClellan v. Coffins, 93 Ind., 456; Hodges v. Shuler, 22 N. Y., 114. Exception. — Statutory Provisions. — By statute in some of the states; however, contracts to pay in property, to order, or to bearer, are made negotiable. Prather v. McEvoy, 8 Mo., 661; Hyland v. Blodgett, 9 Oregon, 166; Spears v. Bond, 79 Mo., 470; Weil V. Tyler, 38 Mo., 545; Rev. Stat, of Mo. (1879), Sec. 663; McClellan v. Coffin, 93 Ind., 456. In Spears v. Bond, supra, the contract was as follows and was held to be a good prommissory note under the statute: "May 28, i8(pj, ' ' Eighteem months after date, we, or either of i/s, promise to pay to the bearer the sum of 20, 000 feet of good salable lutnber, for value received of him. J. W. Fox, his Riley XBond." mark. According to the weight of authority a "promise to pay," in goods and chatties, is nothing more than a special contract for the delivery of particular articles, and such contracts are not negotiable. Clark v. King, 2 Mass., 524; Auerbach v. Pritchett, 58 Ala., 451; Quinby V. Merritt, 11 Humph., 439; Roberts v. Smith, 58 Vt., 494 (where the'promise was to pay "an ounce of gold," and held not to be good); Jones v. State, 40 Ark., 347; Arnold v. Rock River Co., 5 Duer., 207; Gordon V. Rundlett, 29 N. H., 435; Sachett v. Pal- mer, 25 Barb, 179; Dilley v. Van Wie, 6 Wis., 209; Palmer v. Ward, 6 Gray, 340; McCartney v. Smalley, n Iowa, 85; Wright v. Hart, 45 Pa. St., 454; Phoenix Ins. Co. v. Allen, 11 Mich., 501; Marine Bank v. Rushmore, 28 111., 463; Henschel v. Mahler, 3 SEC. 15. J RHODES V. LINDLEY. 85 was only to that point that the attention of the court was directed in argument. The negotiable character of the note was not made a subject of inquiry by either party. The Denio., 428; Martin v. Chauntry, 2 Strange, 1271; Digberty v. Darnel, 5 Yerger, 451; Jerome v. Whitney, 7 Johnson, 321; Has- brook V. Palmer, 2 McLean, 10; Butler v. Paine, 8 Minn., 324; Irwin V. Lowry, 14 Pet., 293; Lieber v. Goodrich, 5 Cow., 186; Shamokin Bank v. Street, 16 Ohio St., i; Ellison v. Collinridge, 9 C. B., 570; Judah v. Harris, 19 Johns., 144; Pardee v. Fish, 60 N. Y., 265; Huse V. Hamblen, 29 la., 501; Lafayette Bank v. Ringel, 51 Ind., 393; Chrysler v. Renois, at al., 43 N. Y., 209; Thompson V. Sloan, 23 Wend., 71. It is now well established that a Bill or Note, although possess- ing every other requisite of a negotiable instrument, is bad, if the order ox promise be for labor or merchandise, and not for money. The Reason for the Rule. — This requisite springs from the necessities of commercial intercourse. Money is the one standard of value, established by the law, recognized by the courts and demanded by the exigencies of trade and commerce. "All other commodities may rise and fall in value; but in theory, at least, money always measures this rise and fall, and remains the same." If the promise be to pay in wheat or corn, it is impossible to determine from an inspection of the instrument on any given day, what its value will be on the succeeding day. This uncertainty and hazard necessarily destroy its negotiability. Such an instru- ment would obviously be unfitted for a circulating medium. For this reason, "a note payable in neat cattle," and a promise to pay "in a good horse, to be worth ^80.00, and goods out of a store amounting to ^20.00," are each non-negotiable. Jerome v. Whit- ney, 7 Johns, 322; Thomas v. Roosa, 7 Johns, 461. Money Defined. — The meaning of "money" as applied to negotiable instruments has been defined by the Acts of Congress known as the "Legal Tender Acts." Whatever is legal tender is money. The legal tender qualities of the money ordered or prom- ised at the place of payment of the bill or note determine whether the medium of payment specified is really legal tender or not. This test is not fixed and universal, however, "When by the statute of Victoria, ' Canada Bills ' were made legal tender, the court of Upper Canada said: 'It may be that a person can make a promissory note payable in a particular coin, as in gold or silver, because they are respectively money and specie; but I think he cannot make it payable in "Canada Bills," because they are not money or specie. They have no intrinsic value as coin has; they represent only, and are signs of value. Money itself is a commodity; it is not a sign; it is the thing signified.'" Gray v. Worden, U. C. Q. B., 535; Norton on Bills and Notes, 51. To the general rule, however, there seems to be at least an 5 86 RHODES V. LINDLEY. [CHAP. 4, plaintiff in error claimed a reversal, on the ground that the right of the original payee did not appear, by the declaration, to have passed to the holder, by assignment, delivery, or apparent exception. A bill or note made payable in money of a foreign denomination is still negotiable. This arises from inter- national recognition of standard or bullion value in moneys. Our courts, "Under the statutes of the United States, will take judicial notice of the fact that the value of foreign coin, as expressed in the money of account in the United States, shall be that of the pure metal of such coin of standard value; and that the value of the standard coin of the various nations of the world in circulation is estimated annually by the directors of the mint and proclaimed on the first day of January by the Secretary of the Treasury. These foreign denominations, therefore, can always be paid in our own coin of equivalent value to which it is always reduced on a recovery." 2 Chitty Bills (Am. edit.), 615-616. Deberry v. Dar- nell, s Yerg., 451. When action is brought upon a bill or note, however, it is necessary to prove the value of the sum expressed in our own money, as the courts can construe the instrument payable in no other. Thompson v. Sloan, 23 Wend., 71; Bayley on Bills, 23. Equivalent \Vords and Phrases for Money. — Descrip- tive terms prefaced to the word "money" have been held not to vitiate the instrument containing them. 21 Tex., 466; 38 Tex., 214, In the first of these cases the descriptive words were, "other good cash notes"; in the second, "in good, solvent cash note." In each case the court held that the descriptive words did not vitiate the instrument. The words "current funds" and "currency" have been held to mean "money"; but the question is in dispute. Among others, the following cases hold the affirmative: Emi- grant Company v. Clarke, 47 la., 671; White v. Richmond, 16 Ohio, 5; Wood V. Price, 46 111., 435. To the contrary: Nat. Bank v. Ringel, 51 Ind., 393; Johnson V. Henderson, 76 N. Car., 227; Haddock v. Woods, 46 la., 433. The rule under consideration forbids a promise to perform other acts in addition to the payment of money. The leading authority on this point is Martin v. Chauntry, 2 Strange, 1271. The language of the note was, "to deliver up horses and a wharf, and to pay money." This was held not to be a note within the Statute of Anne. Prof. Ames very clearly and concisely states the objections to such an instrument: " One could be indorsed, the other would have to be assigned. In some jurisdictions, the action could be brought by the indorsee in his own name, but as assignee, he could only sue in the name of his assignor. In the case of the negotiable instrument being in the hands of a bona fide holder, no SEC. 15.] RHODES V. LINDLEY. 87 otherwise, and that ground being considered sufficient for the purpose, the judgment was reversed without further examina- tion. In this case, the direct question is presented, whether defense of fraud or latent equity would avail; in the case of holder as assignee, all would avail." Contracts Payable in Bank Bills or Currency. — When we say that commercial contracts must be paid in "money," we mean that they must be paid in something which is tenderable for debt. Rev. St. U. S., Sees. 3584, 3590. Many expressions have been used which have been held to mean an order or promise to pay "money," such as the following: "in current funds of the State of Ohio"; "current bank notes of Cincinnati"; "currency of this place"; "in funds current in the City of New York"; "in current Ohio bank notes"; "current money of Ala- bama"; "in good current money of this state." Sweetland v. Creigh, 15 Ohio, 118; White v. Richmond, 16 Ohio, 5; Lacy v. Holbrook, 4 Ala., i8. When the medium is expressed to be "good current money" or "current money," it is not objectionable, as legal tender money is intended. See also Burton v. Brooks, 25 Ark., 215; Black v. Ward, 27 Mich., 191; Frank v. Wessels, 64 N. Y., 155; Warren v. Brown, 64 N. Car., 381; Swift v. Whitney, 20 111., 144; Phelps v. Town, 14 Mich., 374; Pardee v. Fish, 60 N. Y., 265; Sweetland V. Creigh, 15 Ohio, 118; White v. Richmond, 16 Ohio, 5; Howe V. Hartness, 11 Ohio St., 449; Jones v. Fales, 4 Mass., 245; Bull v. Kasson, 123 U. S., 112; Haddock v. Woods, 46 la., 435; Klauber V. Biggerstaff, 47 Wis., 551. An Order or Promise to Pay in "Bills of Exchange " is not a Promise to Pay Money.— In the case of First Nat. Bk. of Brooklyn v. Slette 69 N. W. Rep., 1148, (Minn.), the promise was to pay "by New York or Chicago exchange," and the court said: "The holder of this instrument cannot demand in payment thereof dollars in money; for the maker is not bound to dis- charge his obligation, except by means of inland bills of exchange on New York or Chicago. Nor can the maker tender in payment dollars in money; for the promise is to make payment by inland bills, which he must purchase in the market. The instru- ment, then, is not payable in money, and is, therefore, not a promissory note within the law merchant." Easton v. Hyde, 13 Minn., 90; Jones v. Fales, 4 Mass., 245; Irvine v. Lowry, 14 Pet., 293; First Nat. Bk., &c., v. Greenville Nat. Bk., 84 Tex., 40. Must be Payable in Money, but may be in the Money of any Country. — While commercial contracts must be payable in money, it is not necessary that the money should be that current in the place of payment, or where the bill is drawn; it may be in the money of any country whatever. Story on Bills, Sec. 43; Dan. on Negot. Inst., Sec. 58. But when the contract is to be paid in the money of a foreign country, the specific denominations of the 88 RHODES V. LINDLEY. [CHAP. 4, such a contract as this can be so transferred as to authorize a third person to maintain a suit in his own name. Our unani- mous opinion is that no such right can be transferred- The money should be given so that the court may be able to ascertain its equivalent value. Dan. on Negot. Inst., Sec. 58. In Black v. Ward, Campbell, J., said: "A note payable in Canada currency means no more and no less than that it is pay- able in Canada money at the Canada standard, and that it is governed as to the amount it calls for by the same rules as if it had been made in Canada, and payable in so many dollars without con- taining any further directions." 27 Mich., 193; 15 Am. R., 162. In New York, however, a note payable in "Canada money" was held not negotiable. In Thompson v. Sloan, Cowan, J., said: "A promissory note must, in order to be negotiable, be payable in money only, in current specie; or at least in what he can judicially notice as equivalent to money." 23 Wend., 71; 35 Am. D., 546. In this case, however, the court intimates that if the note had been made payable in pounds, shillings and pence, the exact amount might have been ascertained and been expressed in dollars and cents and would have been negotiable. Thompson v. Sloan, 23 Wend. The decision of Thompson v. Sloan was made in 1840, at a time when the " dollar" was not a denomination of the lawful money of Canada. But at the time when the case of Black v. Ward arose, this had been changed and the denomination of Can- ada money corresponded with that of the United States. Upon this theory these cases may be reconciled. The opinion of Cowan clearly indicates that if the money named in the note had been a denomination of Canada money, so that its equivalent could have been ascertained, his conclusion would have been different. A note payable in Mexican silver dollars has been held to be a good promissory note. The fact that a note is payable in the money of a foreign country does not destroy its negotiability nor divest it of any of the attributes of a promissory note; the recovery, however, must be limited thereon to its value in American money. Hogue V. Williamson, 85 Tex., 553; Am. St. R., 823. So also a nego- tiable contract may be payable in either gold or silver coin. Strickland v. Holbrooke, 75 Cal., 268. The Amount Must not be Payable out of a Particular Fund. — Commercial contracts must not be made payable out of a particular fund. For that would make their payment depending upon the existence or supply of the fund, and therefore conditional. Worden V. Dodge, 4 Denio., 159; Richardson v. Carpenter, 46 N. Y., 661; Ehricks v. De Mill, 75 N. Y., 370; Turner v. P. & S. Ry. Co., 95 111., 134; Corbet V. Clarke, 45 Wis., 403. The Amount May be Charged to a Particular Fund.— If, however, the amount to be paid is to be credited to some particular fund; or if the person who is to pay the amount is SEC. 2.] RHODES V. LINDLEY. 89 judgment must be reversed, and judgment be given for the defendant. referred to some fund from which he may reimburse himself, the contract will be sustained. Spurgin v. McPheeters, 42 Ind., 527; Hunger V. Shannon, 61 N. Y., 258; Macleod v. Luce, 2 Strange, 762; Turner V. P. & S. Ry. Co., 95 111., 133; Brill v. Tuttle, 81 N. Y., 457; Union Trust Co. v. Chicago & R. R. Co., 7 Fed. R., 513; Kelly V. Brookland, 4 Hill, 263. It Must not be for the Payment of Money and an Act. — The bill or note must be for the payment of money only. If it contains an order or promise to pay money, and also to do some other act, this will destroy it as a negotiable contract. In the case of Martin V. Chauntry (2 Strange, 1271), the order was "to pay money at a particular day and to deliver up a horse and a wharf," and it was held not to be a negotiable contract. In Cook v. Sat- terlee (6 Cow., 108), the order was "to pay money and take up a certain outstanding note " which was held bad. See also Ayrey v. Fearnsides, 4 M. & W., 168; Gillilan v. Myers, 31 111., 525; Fletcher v. Thompson, 55, N. H., 208; "Wright v. Travers, 73 Mich., 484; Wise V. Charlton, 4 A. & E., 786; Follett v. Moore, 4 Ex., 416; Davies v. Wilkinson, 10 A. & E., 98; Overton v. Tyler, 4 Barr, 346; Arnold v. The Rock River Ry. Co. v. Smith, 5 Duer, 207; Hodges v. Shuler, 22 N. Y., 114; Owen v. Barnum, 7 111., 461; Hosstatter V. Wilson, 36 Barb., 307; Cate v. Patter- son, 25 Mich., 191; Preston V. Whitney, 23 Mich., 260; Zimmer- man V. Anderson, 67 Pa. St. 421; Fancourt v. Thome, 9 A. & E. (58, E. C. L.), 312. -90 SMITH V. NIGHTINGALE. [CHAP. 4, SECTION 16. THE ORDER AND THE PROMISE MUST BE FOR THE PAY MENT OF A CERTAIN AMOUNT OF MONEY. SMITH V. NIGHTINGALE. 1 In the King's Bench, at Nisi Prius (Trinity Term), June ii, 1818. ^Reported in 2 Starkie, 375, also in j English Common Law Reports 45 ■2- This was an action by the plaintiffs in right of the wife, as administratrix of James Easthng. Form of Action. — The declaration contained a count upon a promissory note alleged to have been made by the defendant, on the I2th of October, 1807, for the payment of 64 1 to James Eastling, payable three months after the date: 'This case is cited in Story on Bills of Ex., Sec. 42; Chitty on Bills, 133, 145, 160; Tiedeman on Negotiable Paper, 28; Dan- iel on Negotiable Instruments, 53; Randolph on Commercial Pa- per, 134, 320; Wood's Byles on B. & N., 136; Norton on Bills & N., 55; Ames on B. & N., 73; Benjamin's Chalmers Bills, Notes and Checks, 17. By the rule that the amount must be certain is meant that the instrument must specify exactly the amount of money intended to be paid. The rule of construction is, however: "Id cerium est quod cerium reddi protest." Indefiniteness or uncertainty will not vitiate the instrument if a simple mathematical calculation will reduce it to certainty. The leading case upon the subject is Smith v. Nightingale, supra In this case, the writing purported to pay 65 pounds "and also all other sums which may be due." Lord Ellenborough de- clared that the promise was neither definite, single, nor distinct; that reference must be had to books before the amount specified could be ascertained, and for this reason was void as a note. For the reasons above stated, the courts have held that in all such cases as a promise to pay 13 pounds "and all fines according to rule" ; "whatever sums you may collect"; or "the demands of a sick club," the instrument must be denied negotiability. This result does not follow, however, when the instrument contains such terms as "with interest," "with current exchange," etc. Johnson V. Frisbie, 15 Mich., 286. Not only must commercial contracts be made payable in money, but the amount to be paid must be certain and stated in the body of the contract. If the amount can be ascertained upon the face of the contract, it will be sufficient; but if reference must be made to other papers or accounts in order to ascertain the SEC. l6. ] SMITH V. NIGHTINGALE. 9! the declaration contained also the money counts, and a count upon an account stated. It appeared that Eastling had been employed by the de- fendant as a servant in husbandry, and that the defendant having in his hands monies belonging to James Eastling, gave amount, the contract will not be sustained as a commercial con- tract. Consequently a note which promises to pay without naming the amount, but where the amount is given in the margin, the same will be sustained. Strickland v. Holbrooke, 75 Cal., 269. If the note provides for a specified sum of money, and also for the payment of something else, the value of which is not ascer- tained: but depends upon extrinsic evidence, it will not be sus- tained. Lowe V. Bliss, 24 111., 168; Houghton v. Francis, 29 111., 244; Laird v. Warren, 92 111., 204. Provision for the Payment of Attorney's Fees. — The fact that it contains a provision for the payment of interest without naming the amount of interest will not render it uncertain in amount, for the legal rate will be collected. Upon the question whether a condition to pay "collection or attorney's fee" in addition to the amount named affects the negotiability of these contracts or not, there is much conflict of authority. Some of the states have sustained the negotiability of these instruments; others have held that the condition destroys the negotiability of the instrument; while still others have held that the stipulation renders the contract void. A careful examination of all the authorities, especially of the more recent decisions, will show that the weight of authority is found in favor of the doctrine that the negotiability of a commercial contract is in no way affected by a stipulation for the payment of reasonable collection or attorney's fee. In the following states commercial contracts are sustained where such stipulation is added: Oregon, Arkansas, Mississippi, Minnesota, Iowa, Louisiana, Kansas, Illinois, Dakota, Nebraska, as well as by the courts of the United States. Benn v. Kutzschan, 24 Or., 28; 32 Pac. R., 763; Overton v. Mathews, 35 Ark., 147; Meacham V. Pinson, 60 Miss., 226; Hamilton Gin Co. v. Sinker, 74 Tex., 52; Dietrich v. Bayhi, 23 La. An., 767; Harris Mnfg. Co. v. Anfinson, 31 Minn., 182; Schlesinger v. Arline, 31 Federal Rep., 648; Farmers' Nat. Bk. v. Sutton & Co., Fed. R., 191; Sperry v. Horr, 32 Iowa, 184; Seaton v. Scoville, 18 Kan., 433; Hurd v. Dubuque Bk., 8 Neb., 10. The attention of the student is called to the case of Bowie v. Hall, i L. R. A., 546; also 69 Md., 433. In the following states the contracts containing such stipula- tions have been sustained but are not negotiable. They may be enforced as common law contracts. Pennsylvania, Missouri, North Carolina, Minnesota, Wisconsin, California and Maryland. They are denied negotiability upon the ground that the amount to be paid is uncertain. Johnson v, Speer, 92 Pa. St., 227; First 92 SMITH V. NIGHTINGALE. [CHAP. 4, him the following promise in writing, upon which the first count in the declaration was founded: ''October, 12, i8oy. ' ' I promise to pay to James Eastling, my head carter, the sum of 6§l, with lawful interest for the same, three months after date, and also all other sums which may be dua to him. " Contention of Defendant. —On the part of the defend- ant it was objected, that this instrument could not be consid- Nat. Bk. V. Gay, 63 Mo., 33; First Nat. Bk. v. Bynum, 84 N. Carolina, 24; Jones v. Raditz, 27 Minn., 240; Savings Bank v. Strother, 28 S. C, 504; Adams v. Seaman, 82 CaL, 637; First Nat. Bk. V. Larsen, 60 Wis., 211; Maryland & Co. v. Newman, 60 Md., 584; 4S Am. R., 750. While in the following cases the courts have held that such stipulations are absolutely void: Bullock v. Taylor, 39 Mich., 138; Myer V. Hart, 40 Mich., 517; Wright v. Travers, 73 Mich., 494; Altman V. Rellershofer, 68 Mich., 287; Tinsley v. Hoskins, in N. C, 340; Gaar V. Louisville Banking Co., 11 Bush (Ky.), 182; Kemp V. Claus, 8 Neb., 24; State v. Taylor, 10 Ohio, 378; Walker V. Woolen, 54 Ind., 163; Maynard v. Mier, 85 Ind., 317. Statutory Provisions. — In Indiana it has been provided by statute "that any and all agreements to pay attorney's fee depending upon any condition therein set forth and made part of any bill of exchange acceptance, draft, promissory note or other written evidence of indebtedness are hereby declared illegal and void." It has been held, however, that if the amount of fees are stipulated and unconditional, that the stipulation would be sustained. Maxwell v. Morehart, 66 Ind., 301. Mr. Daniel, in his valuable work on Negotiable Instruments, says: "It seems paradoxical to hold that instruments evidently framed as bills and notes are not negotiable during their currency, because when they cease to be current they contain a stipulation to defray the expense of collection." So far from tending to check the circulation of these contracts, such a provision, it would seem in business circles, adds to its value, and thus renders it more available for commercial purposes. Stapleton v. Louisville Bank- ing Co., 95 Georgia, 802; Montgomery v. Crossthwait, go Ala., 553; 24 Am. St. Rep., 832. There are at least four distinct holdings by our courts upon the effect of astipulation to pay "collections or attorney fees ": ist. That the stipulation is valid and enforceable (i Daniel Neg. Inst, 4th ed. sec. 62, Montgomery v. Crossthwait, 90 Ala., SS3i 24 Am. St. Rep., 832; Benn v. Kutzschan, 24 Oregon, 28; Dorsey v. Wolf, 142 111., 589); SEC. 16.] SMITH V. NIGHTINGALE. 93 ered as a promissory note, since it was not made for the payment of any certain sum, and that it could not be given in evidence under the count upon an account stated, since it was an agreement, and for a larger sum than 20I., and ought to be stamped. Contention of Plaintiff. — The plaintiff, contended that it was certain to the extent of 6^1. and therefore that to that extent the plaintiff was entitled to consider it as a promissory note; but that, at all events, it was evidence of an account 2nd, That the stipulation is valid, but such instruments are not negotiable — simply common law contracts, (Johnson v. Spear, 92 Pa. St., 227; First Nat. Bk. v. Larsen, 60 Wis., 206; Bowie v. Hall, 69 Md., 434; Bank v. Wheeler, 75 111., 546; Adams v. Sea- man, 82 Cal., 637); 3d, That the stipulation is void, and therefore does not affect the contract (Gaar v. Louisville Bk. Co., 11 Bush (Ky. ), 182; Gilmore v. Hirst, 56 Kans., 626); and 4th, Where such stipulation renders the transaction usurious, and therefore subject to the operation of the statutes against usury (Dow v. Updike, 11 Neb., 95; 7 N. W. Ref., 185; State v. Tay- lor, 10 Ohio, 378). Payment of an Amount Certain "with Exchange." — Some of the courts have held, where the negotiable contract provides for the payment of "current exchange," that the addition of these words destroys the negotiable character of the contract. Read v. McNulty, 12 Rich., 445; Lowe v. Bliss, 24 III, 168; Hill v. Todd, 29 III, 103; Clanser V. Stone, 29 111., 116, where these words were treated as surplusage. Bank v. Strother, 28 S. C, 504. While the above rule seems to have the best reason to support it, the weight of authority in this country seems to be in favor of supporting these contracts as negotiable instruments. Smith v. Kendall, 9 Mich., 241; Bullock v. Taylor, 39 Mich., 137; Legett V. Jones, 10 Wis., 34; Hill v. Todd, supra; Saxton v. Stevenson, 23 Up. Can. C. P., 503; Sperry V. Horr, 32 Iowa, 184; Hastings V. Thompson, 54 Minn., 184; 55 N. W. Rep., 968; Johnson's Cases on B. & N., 33; Morgan v. Edwards, 53 Wis., 599; 11 N. W. Rep., 21. In the case of Hastings v. Thompson, supra, Mit- chell, J., in discussing this rule, said: "We have found no English cases directlv in point, and none bearing on the question, except Pollard V. Harries (3 Bos. & P., 33s), where such an instrument (one payable "with current exchange") was declared on as a promissory note. We have been unable to find that the supreme court of the U. S., or either Massachusetts, New York or Penn- sylvania, have ever passed upon the question. Now, we think we are safe in saying, and justified in taking notice of the fact, that if -94 SMITH V. NIGHTINGALE. [CHAP. 4, Stated, and that no stamp was essential to a mere acknow- ledgment of a debt. Decision. — Lord Ellenborough was of opinion, that the instrument was too indefinite to be considered as a promissory note: it contained a promise to pay interest for a sum not specified, and not otherwise ascertained than by reference to defendant's books; and that since the whole constituted one entire promise, it could not be divided into parts. He also held, that since the instrument contained an agreement to pay the money, it could not be received in evidence as an acknowl- edgment without a stamp. The plaintiff was non-suited. bankers or other business men accustomed to dealing in commer- cial paper were asked whether such an instrument is a promissory note, and whether they would deal with it as such, the answer would, in almost every instance, be unhesitatingly in the affirma- tive." Tied, on Com. Paper, Sec. 28a; Rand. Com. Paper, Sec. 200; Churchman v. Martin, 54 Ind., 380; Dodge v. Emerson, 34 Me., 96; Smith v. Marland, 59 la., 645. The Amount Should be Expressly Stated. -The amount to be paid should be stated with great caution in the body of the instrument. It is sometimes expressed also in figures, in the upper left hand corner of the contract, as well as in the body, for greater caution. If the sum in figures, on the superscription, differs from the sum written in the body of the instrument, the latter will con- trol, and parol evidence is not admissible for the purpose of showing that the sum intended was not that stated in words in the body of the instrument, but was stated in figures in the margin. Sanderson v. Piper, 5 Bing. , 425; Norwich Bank v. Hyde, 13 Conn., 281, 282; Master v. Miller, 4 Term R., 320. The Amount, When Certain. — The General Rule. — The amount of the contract is certain even though it is to be paid (i) with interest, or (2) by installments, or (Cooke v. Horn, 29 Law Times, 369; Riker v. Sprague Manufacturing Co., 14 R. I., 402), (3) with a provision that upon default in payment of any installment or interest the whole shall become due, or (Riker v. Sprague Manufacturing Co., supra; Carlon v. Kenealy, 12 Mes. & Wei, 139; Oridge v. Sherborne, 11 M. & W., 374; Chicago Ry. Co. V. Merchants' Bk., 136 U. S., 268; Wilson v. Campbell, 68 N. W. Rep., 278), (4) with exchange, or (Hastings v. Thompson, 54 Minn., 184; Tiedeman Com. Paper, Sec. 28a; Daniel Neg. Inst., Sec. 54), (5) with costs of collection or attorney's fees (see cases supra). ^SEC. 17.] COLEHAN V. COOKE. 95 SECTION 17. THE ORDER AND THE PROMISE MUST BE TO PAY AT SOME TIME CERTAIN. COLEHAN V. COOKE.i In the Common Pleas, Hilary Term (16 Geo. 2), Feb. ioth, 1742. [Reported tit Willes's Reports, jpj.] Form of Action. — T/ie first count is on a promissory note dated 27th of May 1732, whereby the defendant prom- ised to pay to Henry Delany or order 150 guineas ten days after the death of his father John Cooke for value received; which note after the death of the father (which is laid to be the 2d of April 1741) was duly indorsed by Delany to the plaintiff. The second count is on a promissory note dated the 15th of July 1732, whereby the defendant promised to pay to Henry Delany or order six weeks after the death of his father 50 guineas for value received; the like indorsement laid after the death of the father as before. The third count is for money had and received etc., 250/.; but this is out of the case. The damage is laid at 300/. ; and a general verdict for the plaintiff on both notes. Contention of Defendant. — It was insisted {a)^ on for the defendant in arrest of judgment that these notes are not within the stat. 3 and 4 Anne c. 9;" and if not that they are not indorsable, or assignable, and consequently that the plain- tiff who brings this action as indorsee cannot recover at law. To show that these notes are not within the statute a great many things were said on the argument of the case, and a great many cases and authorities cited both out of the com- ' This case is cited in Story on Bills of Exchange, 46, 47; Chitty on Bills, 128, 135, 136, 137, 144, 150, 517, 520; Daniel on Negotiable Instruments, 46; Wood's Byles on Bills and Notes, 146, 170; Tiedeman on Negotiable paper, 25; Ames on Bills and Notes, ^2)! Benjamin's Chalmers, Bills Notes and Checks, 26, 28, 65, 276; Randolph on Commercial Paper, 146; Norton on Bills and Notes, 39 "This case was several times argued. ^ A promissory note payable to A. or order after the death of B. is assignable under the stat. 3 and 4 An. cr 9; and consequently ,the indorsee may maintain an action upon it against the maker. 96 COLEHAN V. COOKE. [CHAP. 4^ men and civil law books. But I think that all the objections- that were made may be reduced to these two general posi- tions: — 1st. That the act of Parliament only intended to put promissory notes on the same footing as bills of exchange; and that therefore, if bills of exchange drawn in this manner would not be good and consequently not assignable, it follows that notes drawn in this manner are not made indorsable or assignable by the statute. 2nd. That the act was made for the advancement of trade ane commerce, and consequently was intended to extend only to such notes as are in their nature negotiable, and that these notes are not so. Before I consider these objections, I will state the words of the act of parliament on which the question must depend, 3 and 4 An. c. 9, entitled ''An act for giving like remedy on promissory notes as is now used on bills of exchange, and' for the better payment of inland bills of exchange. " ' ' Where- as it hath been held that notes in writing signed by the party who makes the same, whereby such person promises to pay to any other person or his order any sum of money therein mentioned, are not assignable or indorsable over within the custom of merchants, and that any person to whom such note shall be assigned, indorsed or made payable could not within the said custom maintain any action on such note against the person who first drew and signed the same, there- fore to the intent to encourage trade and commerce which will be much advanced if such notes shall have the same effect as inland bills of exchange and shall be negotiated in like manner, be it enacted that all notes in writing which shall after, etc., be made and signed by any person or persons, etc., whereby such person or persons do or shall promise to pay to any other person or persons, etc. , his, her or their order or unto the bearer any sum of money mentioned in such note shall be taken and construed by virtue thereof due and pay- able to any such person or persons, etc. , to whom the same is made payable, and also every such note shall be assign- able or indorsable over in the same manner as inland bills of exchange are or may be according to the cus- SEC. I 7. J COLEHAN V. COOKE. 97 torn of merchants; and that the person or persons, etc., to whom the sum of money is made payable by such note shall and may maintain an action for the same in such manner as he, she or they may do upon any inland bill of ■exchange, etc., and that the person or persons, etc., to whom such note is indorsed or assigned, or the money there- in mentioned ordered to be paid by indorsement thereon, shall and may maintain his, her or their action for such money either against the person or persons who signed such note, or against any of the persons who indorsed the same, in like manner as in case of inland bills of exchange." The title of the act seems to refer to bills of exchange, and they are likewise referred to in the preamble, and the remedy is to be the same.' But in the description of the notes which are to be made assignable there is no reference to bills of ex- change; but the words are very general, and I never understood that the plain words of an enacting clause are to be restrained by the title or preamble of an act.^ It has indeed been often said, and I think very rightly, that if the words of an act of parliament be doubtful, it may be proper to have recourse to the preamble to find out the meaning of the legislature: but where the words of the enacting part are plain and express, I do not think that they ought to be restrained by the preamble; for the preamble may only recite some particular mischiefs which have happened, but the enacting clause may not only ' It was taken for granted in Tindal v. Brown, i D. and E., 167; 2 D. and E., 186; both in the court of King's Bench and in the Exchequer Chamber, and solemnly decided in the cases of Brown v. Harraden, ib. 4 vol., 148, and Smith v. Kendal, ib. 6 vol. 123 (in which the dictum of Denison J. in Dexlaux v. Hood, Bull N. P., 274, and the determination of May v. Cooper, Fost., 376, to the contrary were over-ruled), that three days' grace are allowed on a promissory note (though it be a note payable to A. without ad- ding "or to his order, or to bearer." Smith v. Kendal, 6 D. and E., 123. ) as well as on a bill of exchange, by reason of the stat. 3 and 4 An. c, 9, which puts them both on the same footing in all respects. ^ Vid Copeman V. Gallant, i P. Wms., 320; Mace v. Cadell, Cowp., 232; Pattison v. Bankes; ib., 543; Cox v. Liotard, H. 24 Geo. Dougl., 167, n. (55), oct. ed.; and Bradley v. Clarke, per Buller J. 5 D. and E., 201. 98 COLEHAN V. COOKE. [CHAP. 4,- be calculated to prevent these mischiefs but others also of a like nature. Now the words of the enacting part of this act are plain and clear and very general; and in order to bring a note within the description of that clause, it is only necessary, 1st, That the note should be in writing; 2d, That it should be made and signed by the person promising to pay; and 3rd, That there be an express promise to pay to another or his order or bearer. But as to the time of payment, the act is silent, nor is there any particular form prescribed. And therefore, as to the first objection, that if a bill of exchange had been drawn in this manner it would not have been good; supposing it to be true, I do not think that it fol- lows that these promissory notes may not be within the gen- eral words of the statute, if they answer all the descriptions therein contained. However for argument's sake I will sup- pose that this consequence would hold; but we do not think that a bill of exchange drawn in this manner would be bad. Upon this head it would be but mispending time to run over all the passages which have been cited out of the civil law books in relation to bills of exchange, because I put a question to the counsel which will, I think, determine this point, whether there is any limited time mentioned in any of the books be- yond which if bills of exchange are made payable they are not good, and it was agreed by the counsel that they could find no such rule, and I am sure I can find none. But if a bill of exchange be made payable at never so distant a day, if it be a day that must come, it is no objection to the bill. There is but one passage in the books wherein any notion to the con- trary is so much as hinted at; and that is in Scacchius de com- merciis, where it is said that it had been formerly an objec- tion against a bill of exchange, as contrary to the nature of it, that it was made payable at the end of seven months: but by his making use of the word formerly, it is plain that in his opinion the law was then held to be otherwise. If therefore the distance of time would not have made a bill of exchange bad if drawn in this manner, since it is drawn at a time that which must come, the only other objection that was made on this head was that in all bille of exchangs there must be a SEC. 17.] COLEHAN V. COOKE. 99, par pro pari, which there cannot be in this case, because the value cannot be ascertained. But I shall show plainly that the value may be ascertained, when I come to the objection that these are not negotiable notes. Having answered the objections against these notes con- sidering them on the same footing as bills of exchange, I come now to the second objection, arising from the words and intent of the statute. And first I think that they are plainly within the words. They are made in writing; they are signed by the person promising to pay, and there is an express promise to pay to another or his order; and as no time of pay- ment is mentioned in the statute, the distance of time is no objection within the words of the act. Let us see therefore in the next place whether any objec- tion arises against them from the design and intent of the act; though I think it would be pretty hard to construe a note to be not within the intent of an act when it is manifestly within the words of it, and the words of the act are plain and express. When the words of an act are doubtful and uncer- tain, it is proper to inquire what was the intent of the legis- lature: but it is very dangerous for judges to launch out too far in searching into the intent of the legislature, when they have expressed themselves in plain and clear words. How- ever we think that these notes are within the intent as well as the words of the act. And to show that they are so, I will here take notice of all the cases which were cited to the contrary, and will show that they all stand on a different footing and are plainly distinguishable from the present. For they are all of them cases where either the fund out of which the payment was to be made is uncertain, or the time of payment is un- certain and might or might not ever happen: whereas in the- present case there is no pretence that the fund is uncertain, and the time of payment must come, because the father after whose death they are made payable must die one time or other. The case of Pearson v. Garrett,' was thus; the de- fendant gave a note to pay 60 guineas when he married B. , and judgment was given for the defendant, because it was ■ 4 Mod. 242 and Comb. 227. lOO COLEHAN V. COOKE. [CHAP. 4, uncertain whether he would ever marry her or not, so the time of payment might never come. In the case of Jocelyn V. Le Serre,' the bill was drawn on Jocelyn to pay so much every -month out of his growing subsistence ; how long that would last no one could tell, or whether it would be sufficient for that purpose: and therefore the bill was holden not to be good, because the fund was uncertain. In the case of Smith V. Boheme,^ the promise in the note was to pay jol. or sur- sender a person therein named: if therefore he surrendered the person, there was no promise to pay anything, and there- fore the note was uncertain and not negotiable. In the case of Appleby v. Biddulph," a promise to pay if his brother did not pay by such a time; held not to be within the statute, because it was uncertain whether the drawer of the note would ever be liable to pay or not. In the case of Jenny v. Herle,* a promise to pay such a sum out of the income of the Devonshire mines, held not a promise within the statute, be- cause it was uncertain whether the fund would be sufficient to pay it. So in the case of Barnsley v. Baldwyn, 14 Geo. 2 B. R. ,'the promise was, as in the case of Peason v. Garrett, to pay such a sum on marriage ; and held not to be within the statute for the same reason. And as these notes are plainly not within the intent of the statute because not nego- tiable ab initio, so when the words themselves come to be considered they are not within the words of it, because the statute only extends to such notes where there is an absolute promise to pay and not a promise depending on a contin- gency, and where the money at the time of the giving of the note becomes due and payable by virtue thereof {so are the words of the statute), and not where it becomes due and pay- able by virtue of a subsequent contingency which may perhaps never happen, and then the money will never become payable 'Reported in 10 Mod. 294, and 316; and cited in 2 Ld. Raym. 1362, and in 8 Mod. 364. ^Cited in 2 Ld. Rayin. 1362. ' Cited in 8 Mod. 363. * Reported in 2 Ld. Raym. 1361. ^ Since reported in 7 Mod. 417 oct. ed., and in 2 Str. 1151, by the name of Beardesley v. Baldwin. SEC. 17. J COLEHAN V. COOKE. lOi at all. And it can be said that there is a promise to pay money, or that money becomes due and payable by virtue of a note, when unless such subsequent contingency happen the drawer of the note does not promise to pay anything at all,' But the present notes, and those cases where such notes have been holden to be within the statute, do not depend on any such contingency; but there is a certain promise to pay at the time of the giving of the notes, and the money by virtue thereof will certainly become due and payable one time or other, though it is uncertain when that time will come. The bills therefore of exchange commonly called Billce nundi- nales were always holden to be good, because though these fairs were not always holden at a certain time, yet it was certain that they would be held. The case of Andrews V. Franklyn,^ depends on the same reason; for there the note ''Nzs to pay suck a^sum two months after such a ship was paid off; and held good, because the ship would certainly be paid off one time or other. The case of Lewis v. Ord, was exactly the like case, and determined on the same rea- son. As to the same objection that these are not negotiable notes, because the value of them cannot be ascertained, the argument is not founded on fact, because the value of a life when the age of a person is known is as well settled as can be: and there are many printed books in which these calcula- tions are made. But if it were otherwise, the life of a man may be insured, and by that the value will be ascertained. And the same answer will serve to the objection which I be- fore mentioned against such bills of exchange. There was another objection taken, that the drawer might have died before his father, and then these notes would have been of no value: but there is plainly nothing in this objection, for the same may be said of any note payable at a ' But there may be a conditional acceptance of a bill of ex- change. Smith V. Abbot, 2 Str. 115 2; Julian v. Shobrooke, 2 Wilf. 9; Pierson v. Dunlop, Cowp. 574; and Sproat v. Matthews, I D. and E. 182. ^ I Str. 24. 'T. 8 and 9 G. 2 B. R.; Cunningh. Bills of Exchange 113. I02 COLEHAN V. COOKE. [CHAP. 4, distant time, that the drawer may die, worth nothing before the note becomes payable. We do not think that the averment of the death of the father before the indorsement makes any alteration, because we are of opinion that if the notes were not within the statute ab initio, they shall not be made so by any subsequent con- tingency. But for the reasons aforesaid we are of opinion (and so was the Ld. C. J. Baron Parker) that the plaintiff is entitled to his judgment,' and therefore the rule for arresting the judgment must be discharged."' ' This judgment was afterwards affirmed in the Court of King's Bench on a writ of error. 2 Str., 1217. ^ See the following cases, in which the notes or bills of ex- change (for they are both on the same footing) were holden not to be good notes or bills, because they were payable out of a particu- lar fund or on a contingency: Banbury v. Lissett, 2 Str., 1211; Dawkes v. Ld. Deloraine, 2 Bl. Rep., 782; 3 Wils., 207; Roberts V. Peake, i Burr., 323; Kingston v. Long, M. 25 G., 3 B. R. Bay- ley's Bills of Exchange, 71; and Carlos v. Fancourt, 5 D. & E., 482. In these, the notes were holden to be good, because they were payable at all events: Burchell v. Burchell, 2 Ld. Raym., 1545; Evans v. Underwood, i Wils., 262; Poplewell v. Wilson, i Str., 264; Chadwick v. Allen, ib., 607; Goss v. Nelson, i Burr, 226; and Haussoullier v. Hartsinck, 7 D. and E., 733. The Exact Time Need Not be Stated. —It is not neces- sary that the instrument state upon its face the exact time in days, months and years; but it certainly loses its negotiable character, if it is impossible to extract from the note any statement of the time of its maturity. A case upon this subject is found in the First National Bank v. Beyman (84 N. Car., 125). In this case the note stated that payment might be demanded " at any time they (the payees) may deem this note insecure, even before the maturity of the same." But it seldom happens that the courts find difficulty in apply- ing this rule; for the most general and indefinite expression will be so construed as to sustain the note or bill. Thus "at sight," "on demand," means on showing and demanding payment of the in- strument Dixon V. Nuttall, 6 C. & P., 320. "By Nov. I " means on that date. Preston v. Dunham, 52 Ala., 217. So literally is this rule construed that if absolutely nothing is said as to the maturity it is by legal construction payable on de- mand, and valid as a demand note. Salinas v. Wright, 11 Tex., 572; Porterv. Porter, 51 Me., 376; Pindar v. Barlow, 31 Ver., 529' SEC. 17.] COLEHAN V. COOKE. IO3 Lost Notes — When Due. — A lost note is presumed to have been payable on demand. Tucker v. Tucker, 119 Mass., 79. But a post dated note silent as to maturity is not due until the date day. Mohawk Bank v. Broderick, 10 Wend., 304. If the time of payment is expressed, it must be pleaded and proved; failure to do so is a fatal variance. McCrary v. New- berry, 25 111., 496. Notes Payable on Demand. — When Due. — Bills and notes payable "on demand," are due immediately without grace, unless the rule has been changed by statute. Palmer v. Palmer, 36 Mich., 487; Wheeler V. Wilson, 47 N. Y., 519. "When called for," "on request," "at such time as A. may need for her support," have been held by the courts to be equiva- lent to "on demand." Bilderbeck v. Burlingame, 27 111., 338; Rowland v. Edmonds, 24 N. Y., 307; Corbett v. Stonemetz, 15 Wis., 187. In a few cases, phrases seeming to give the debtor an option as to paying at all have been similarly construed. Thus "when both parties have agreed," "when canvenient," "when my cir- cumstances will admit," have all been held to be equivalent to "on demand after the expiration of a reasonable time." Ramot v. Schotenfels, 15 la., 457; Works v. Hershey, 35 la., 340; Salinas V. Wright, II Tex., 572. It is not necessary to express the time of payment by date; a reference to any event, (as death), certain to occur, is enough. Conn v. Thornton, 46 Ala., 587. Marriage, however, is insufficient as to date or time of pay- ment, being too uncertain. Beardsley v. Baldwin, 2 Stra., 1151. And the same is true of a person coming of age, for he may die a minor. Goss v. Nelson, i Burr, 226. Payment by installments does not invalidate a note; and a pro- viso that the whole note shall fall due upon the maker's failure to pay a single installment is valid. German Mut. Ins. Co. v. Franck, 22 Ind., 364. Payable in Installments. — A negotiable contract may be payable in installments, and the fact that it contains a provision whereby the whole amount shall become due and payable on fail- ure of payment of one installment, does not render the time of payment uncertain. Carlton v. Kenealy, 12 M. & W., 139; Oridge v. Sherborne, 11 M. & W. 374; Miller v. Biddle, 13 Law Times, R. (N. S.) 334; Marrett v. Eq. Ins. Co., 54 Me., 537; Wright v. Irwin, 33 Mich., 32; White v. Smith, 77 111., 351; Crossmore v. Page, 73 Cal., 213; Palmer v. Ward, 6 Gray 340 The time of payment of each installment must be fixed and certain. Moffat v. Edwards, i Car. & M., 16. A note paya- ble in installments is overdue, when the first installment is overdue and unpaid, so that a purchaser thereafter may be charged with equities. Hart v. Stickney, 41 Wis. 630; Vinton v. King, 4 Allen, I04 COLEHAN V. COOKE. [CHAP. 4, 562; Field V. Tibbetts, 57 Me., 359. The fact that interest simply is overdue and unpaid, is not sufficient to charge a purchaser thereafter with existing equities. Kelly v. Whitney, 45 Wis., no; National Bank v. Kirby, 108 Mass., 497; Cromwell v. County of Sac, 96 U. S., — ; Railway Co. v. Sprague, 103 U. S., 762; Mc- Lane v. Sacramento, etc., Ry. Co., 66 Cal., 606; see notes to 30 Am. Rep., 702, 703. Days of Grace. — Days of grace are a certain number of days, generally three, allowed to the maker or acceptor of a bill, draft, or note, in which to make payment, after the expiration of the time expressed in the contract itself. These days were originally granted as a matter of favor to the debtor, but it finally became an established custom among merchants, and was given the force of law by the courts and in some cases by statute, so that they are now, in many jurisdictions, demandable as of right. The number of these days varies in different jurisdictions, from three in the different States in the Union, Great Britain and Ireland to thirty in Genoa. Days of grace have been abolished in many of the States. See statutes of your State. Wiffen v. Roberts, i Esp., 261; for a history of "days of grace,'' seek Trask v. Martin, i E. D. Smith, 506. What Instruments are Entitled to Grace? — Days of grace are allowed upon both promissory notes and bills of ex- change. It may be stated that they are allowed upon all instu- ments (unless abolished by statute) except those payable " on demand." They are allowed upon the contract whether it be pay- able on a certain event, at a certain day, at a certain mumber of days, weeks, months or years after date, or after or at sight. If the contract is payable in installments, each installment is entitled to grace. Brown v. Harraden, 4 Tenn. Rep., 148; Griffin v. Goff, 12 Johns, 423; Fridge v. Sherborne, 11 M. & W., 374; JVIacloon v. Smith, 49 Wis., 20c; 5 N. W. Rep., 336. Where Grace is Allowed. — When Must Payment be Demanded. — Where grace is allowed, demand of payment before the last day of grace would be premature; but in order to bind per- sons whose liability is conditional, the demand must be made on the last day of grace. Donegan v. Wood, 49 Ala., 242; Pratt v. Eads, I Blackf. (Ind.), 82; Bussard v. Levering, 6 Wheaton, 102. Pro- test may and should be made on the last day of grace; but an action upon the contract cannot be commenced on the last day of grace, for the reason that the debtor has all of that day (during business hours) upon which to make payment. Estes v. Tower, 102 Mass., 65; Gordon v. Parmelee, 15 Gray, 413. Checks Not Entitled to Grace. — Checks are not entitled to grace for the reason that they are payable "on demand." An- drews et al. V. Blacklyet al., 11 Ohio St., 89; Morrison v. Bailey, 5 Ohio St., 13; Champion v. Gordon, 70 Pa. St., 476; Wood River Bank V. First National Bank, 36 Neb., 744; 55 N. W. Rep. 239. SEC. 17.] COLEHAN V. COOKE. I05 Grace May Be Dispensed With. — The parties may, by a stipulation in the contract, dispense with "grace." Perkins v. Bank, 21 Pick., 483; Duruford v. Patterson, 7 Marh. (La.), 460; Bell V. First N. Bank, iii U. S., 382. Where a Negotiable Contract Falls Due on a Holiday — When Should Payment be Demanded? — Where a negotia- ble contract matures on a holiday, if it is entitled to grace, it is legally due on the day next preceeding and if that is also a legal holiday then on the next preceeding; but if it is not entitled to grace, then it is legally due on the day next subsequent. To illus- trate: If a promissory note, payable "at sight or a certain time after date," falls due (last day of grace) on a Sunday, it is due and payable on the Saturday next preceding, and if that is also a legal holiday, then on Friday; but if it is payable "on demand" and it- falls due on a Sunday, it is not legally due until the Monday fol- lowing. Hirshfield v. Fort Worth Nat. Bank, 83 Tex., 452; i8 S. W. Rep., 743; Avery v. Stewart, 2 Conn., 69; 7 Am. Dec, 250; Salter V. Burt, 20 Wend., 205; Barrett v. Allen, 10 Ohio, 426; Kuntz V. Temple, 48 Mo., 75; Morris v. Richards, 45 Law T. R., 210. W^hat Days are Holidays? — The question of what are legal "holidays" is one to which reference must be had to the statutes and decisions of the various states for answer. The fol- lowing days are almost universally regarded as holidays: Christ- mas, New Year's Day, Labor Day, the 4th of July, the 2 2d of February, and the days observed according to religious customs or usages. Within the past few years many of the states have provided by statute that each Saturday afternoon shall constitute a legal holiday. Where no Time is Stated.— Commercial contracts are usually made payable at a specified time after date, or after sight or at sight. If no time for payment is specified, they are payable immediately upon demand. Convers v. Johnson, 146 Mass., 22; Dan. on Negot. Inst, Sec. 88; Bank v. Price, 52 la., 570; Jones V. Brown, 11 Ohio St., 601; Palmer v. Palmer, 36 Mich., 487; Keyes v. Fenstermaker, 24 Col., 329; Libbey v. Mikeborg, 28 Minn., 38; Wheeler v. Warner, 47 N. Y., 519; Jackett v. Spencer; 29 Barb., 180; Meador v. Dollar Savings Bank, 56 Ga., 605; In re King's Estate, 94 Mich., 411, 425; 54 N. W. Rep., 178; Hitch- ings v. Edmands, 133 Mass., 338; Ferms v. Gay, 146 Mass 118; 15 N. E. Rep., 87; McMullen v. Rafferty, 89 N. Y., 456; Hall v. Toby, no Pa. St., 318. . , i, . Where Interest is Provided for.— The fact that the note provides for the payment of interest where no time of payment is stated, does not raise a presumption that it was not to be paid im- mediately. Norton v. EUam, 2 M. & W., 461; Barrough v. White, 4 B. &C., 327; 3 L- J- ReP" K. B., 227; Hanes v. Kerrison, 2 Taunton, 323; Mitchell v. Easton, 37 Minn., 335; Schreiber v. Io6 COLEHAN V. COOKE. [CHAP. 4, Richmond, 73 Wis., 12; Wilks v. Robinson, 3 Rich. (S. C), 102; Wheeler v. Warner, 47 N. Y., 519; Hill v. Henry, 17 Ohio St., 9; Dunkle v. Nichols, loi Ind., 474. Payable "On or Before " a Day Named.— A negotiable contract payable " on or before" a day named is certain as to the time of payment. It is true that the maker may pay sooner if he shall choose; but this option if exercised would make the payment be- fore the legal liability to pay arises and nothing more. If a time of payment is fixed once certain, it is no objection that by some possibility it may be paid and discharged sooner. Mattison v. Marks, 31 Mich., 421; Smith v. Ellis. 29 Me., 422; Jordon v. Tate, 19 Ohio St., 586; Cisue v. Chidester, 85 111., 523; Noll v. Smith, 64 Ind., 511; Ernst v. Steckman, 74 Pa. St., 13; Conn v. Thornton, 46 Ala., 587 (where the promise was "One day after date, I promise to pay, or at my death," etc.); Stevens v. Blunt, 7 Mass., 240; Capron V. Capron, 44 Vt., 410; White v. Smith, 77 111., 351; Stillwell V. Craig, 58 Mo., 24; Stalls v. Silva, 119 Mass., 137; Cota V. Buck, 7 Mete, 588; Brooks v. Hargreaves, 21 ]\Iich., 254- Time of Payment Depending Upon an Event Certain to Pass. — They may be payable at some uncertain time, for in- stance upon the happening of some event, providing that event is sure to happen. They may be made payable after the death of a particular person; for that event is sure to happen. But to make them payable when a particular person arrives at his majority, or when he marries, would be bad on the ground of uncertainty of time, for the reason that either event may never happen. They may be made payable, however, at the " convenience '' of the maker; or when the payor and payee mutually agree; or at the convenience of the maker upon the express condition that he is to be sole judge of what shall be a convenient time. Page v. Cooke, 164 Mass., 116; Smithers V. Junker, 41 Fed. R., loi; Capron v. Capron, 44 Vt., 412; Crooker v. Holmes, 65 Me., 195; Works v. Hershey, 35 la., 340; Lewis v. Tippon, 10 Ohio St., 88; Garrigus v. Hone & Society, 3 Ind. App., 91; Carnwright v. Gray, 127 N. Y., 92. It has been held that a promise to pay " After my death, date, etc," is certain as to time and becomes due at once after the death of the maker. Shaw v. Camp, 160 111., 425. A note payable " twenty-four " after date, etc., is not void for uncertainty of time, nor a note on demand; but payable some time after date. Such a note is evidently payable at some time after the date, either days, months or years. In a case like the above where the time of payment has been omitted by mistake, the holder may insert the time intended. Coles v. Hulme, 15 Com. L. R., 300; Waugh v. Russell, i Marshall, where the word "hundred" was supplied by the holder where it had been omitted by mistake, to render the amount certain; Loyd v. Lord, i Bro. Par. Cas., 379, where the name of one of the parties was supplied; Boyd v. Broth- SEC. 17.] COLEHAN V. COOKE. I07 erson, lo Wend., 93, where a note which was intended to be for " eight hundred dollars," the words "hundreds "and "dollars" were omitted, and consequently the holder inserted these words; Conner V. Routh, 12 How. (N. Y.), 176. Time — Computation of. — In computing the time when a commercial contract which is payable after date, or so many days "after sight" or demand, or after a particular event, the day of the date is always excluded. Avery v. Stewart, 2 Conn., 69. To illustrate: A note dated Jan. ist, due thirty days after date, allow- ing grace, would fall due Feb. 3d. By excluding the ist day of January, the day of its date, it would be " nominally due" on the 31st day of January, that being the thirtieth day, and ''legally due" three days thereafter, or the 3d day of February. If a note is dated Feb. ist, due in thirty days after date, excluding the day of the date it would be nominally due the 3d day of March, and legally due the 6th day of March. In a leap year, however, the same note would be legally due on March sth. When a commer- cial contract is to run for a certain number of days, the actual number of days are counted, excluding the day of the date. If the contract is made payable a month or a certain number of months after date, the time is computed by counting from the day of the date to the corresponding day of the month in which the contract matures. To illustrate: If a note is dated Jan. ist, due one month after date, it is nominally due on Feb. ist, and legally due due on Feb. 4th. And, if a note should be dated on the 29th of February in a leap year, due one month after date, it would be nominally due on the 29th of March and legally due on the 1st day of April. Seaton v. Hinneman, 50 la., 395; Roehner v. Knicker- bocker Ins. Co., 63 N. Y., 160; Story on Bills, sec. 330; Story on Notes, see 213a; Ogden v. Saunders, 12 Wheaton, 213; Bayley on Bills, ch. 7; Chitty on Bills, ch. 9; Fisher v. State Bank, 7 Black., 610; Ammidown V. Woodman, 31 Me., 580; Ripley v. Greenleaf, 2 Verm., 129; Coleman v. Sayer, i Barn., 303; Taylor v. Jacoby, 2 Pa. St., 495. If a note is dated on the 31st day of July, due in one month, it will be nominally due Aug. 31st; but if it is dated Aug. 31st, due in thirty days, it will be dominally due on Sept. 30th. Wag- ner V. Kenner, 2 Robinson (La.), 120; Wood v. Mullen, 3 Robin- son (La.), 299. If a bill is payable five days after sight and is accepted on the ist day of the month, it is legally due the 9th. Mitchell v. Degrand, i Mason, 176. Time — How Computed when Measured from an Act.-- Some of the courts have held that when a computation of time is to be made from an act to be done, the day in which the act is done must be included. Rex v. Adderley, 2 Doug., 463, 464. But this rule has been rejected in the later cases. Lester v. Garland, 15 Ves., 248. Io8 COLEHAN V. COOKE. [CHAP. 4, So that now the day of the date as well as the act is excluded. Bemis V. Leonard, ii8 Mass., 502; Webb v. Fairmaner, 3 M. & W. , 473, where the earlier cases are critically reviewed. It may be stated as a general rule that where a power may be exercised up to and including a certain day of the month and that day is Sunday, it may be exercised on the following Monday. Street v. United States, 133 U. S., 299; Sands v. Lyon, 18 Conn., 18. And this is the general rule also in the performance of all common law contracts. Salter v. Burt, 20 AVend., 205; Avery v. Stewart, 2 Conn., 69; Hammond v. American Mut. life Ins. Co., 10 Gray, 307, where the payment of a premium on an insurance policy which fell due on Sunday was permitted to be made on Monday. When the time to file a pleading expires on a Sunday the same may be done on the next day. Cox v. Bunn, 6 Johnson, 326; Borst V. Griffin, 5 Wend., 84. If, however, the time within which an act is to be performed is fixed by statute, the general weight of authority is, that if the last day falls on Sunday, the time cannot be extended and the act must be performed on the day before. Caupfield v. Cook, 92 Mich., 626; Simonson v. Uurffy, 50 Mich., 81; Harrison v. Sager, 27 Mich., 476, where it is held that a justice of the peace could not render judgment on the fifth day after the trial where the statute required that the judgment should be rendered within four days, the fourth being Sunday; Brown v. Vailes, 14 L. R. A. 120. SEC. 18.] MCCALL V. TAYLOR. SECTION 18. 109 THE PARTIES* TO A NEGOTIABLE CONTRACT MUST BE CERTAIN AND DEFINITE. McCALL V. TAYLOR.' In the Common Pleas, May 26, 1865. {^Reported in ig Com7non Bench, 301; 11^ Eng. C. L., joi, also in J 4 Law Journal {N. S.) Common Law, 365 ; 34 Law Jour- nal {O. S.)365.-\ Form of Action. — This was an action upon an instru- ment in the following form, which was declared on as a bill of exchange and also as a prommissory note: ' ' £300. 00. \_No date.'\ ' ' Four months ajter date, pay to my order the sum of Three hundred pounds, for vahie received. ' ' To Captain Taylor, \^No drawei-'s name. J ' ' Ship Jasper. " Across this document was written, in the handwriting of the defendant, the words "Accepted, William Taylor.'" There was also a count for goods sold and delivered, and the ordinary pleas. The cause was tried before Byles, J., at the sittings at ' This case is cited in Wood's Byles on Bills and Notes, pp. 156, i62j Daniel on Negotiable Instruments, sec. 92; Benjamin's Chalmers Bills, Notes and Checks, p. 4; Norton on Bills and Notes, p. 60; Tiedeman on Commercial Paper, sec. 34; Edwards on Commercial Paper, pp. 62, 290. *Parties to Bills of Exchange — How Designated. — The parties to a bill of exchange may be divided into: — [a) Original, and {b) Subsequent. The original parties are: — (a) The drawer who executes and delivers the instrument. {b) The drawee, the person upon whom the order is given, -and who is expected finally to pay the money called for therein. (c) The payee, the person to whom the order is delivered and in whose favor it is executed. These three persons so designated may be the same person in fact, that is, a bill may be drawn by a party upon himself pay- able to himself. no MC CALL V. TAYLOR. [CHAP. 4, Guild-hall after the last Hilary Term. The plaintiff was a ship-chandler and provision-merchant. The defendant was the captain (and it was suggested owner also) of the ship Jasper. It appeared that the plaintiff had, in September, 1862, pursuant to orders received through one Milne, the ship's broker, delivered goods to the amount of 299/. 19.?. id. on board that vessel for San Francisco, and had received in payment a bill at six months accepted by one Bailey, which bill was not paid at maturity; and that the instrument de- clared on was given to the plaintiff by Wilne about six months afterwards. It also appeared that Bailey had been debited for the goods in the plaintiff's books, and that an invoice had been delivered charging Bailey as the debtor. There was no The subsequent parties are: — (a) The acceptor who is the drawee after acceptance; (i^) Endorsers or subsequent transferers. ((t) Endorsees or subsequent transferees or holders. The holder is the person who has possession of the instru- ment, and who by the law merchant is entitled to the payment of the bill. Of course a bill may be drawn by two or more persons made payable to two or more persons and directed to two or more per- sons. They may also be payable to a person or to his order or to bearer. Parties to Promissory Notes — How Designated. — The parties to a promissory note maybe divided into two classes: — (a) Original. (i^) Subsequent. The original parties to a promissory note are: — («) The maker, or the person who executes and delivers the contract. (3) The payee or the person to whom the contract is exe- cuted and delivered and made payable. The subsequent parties are: (a) Endorsers or transferers. \b) Tranferees or holders. Parties to Checks — How Designated. — The parties to checks are designated exactly as the parties to bills of exchange, viz. : drawers, payees, and drawees. Cheeks are not usually pre- sented for acceptance, therefore there is no acceptor, but checks being negotiable instruments there may be endorsers and endors- ees. The nature and liability of the respective parties to these various instruments will be discussed in the subsequent sections of this work. SEC. 18.] MC CALL V. TAYLOR. Ill evidence whatever to show that the defendant had any inter- est in the goods. Contention of Plaintiff.— The learned Judge intimating a pretty strong opinion that the instrument in question was not a bill of exchange, it was submitted by the plaintiff that it was a promissory note, for which reliance was placed on Cruchley v. Clarence.' Contention of Defendant. — On the part of the defend- ant it was insisted that the instrument declared on was not a bill of exchange, being wanting in that which is essential to constitute a bill of exchange, viz., a drawer and a payee; and, further, that it was not either in form or in substance a prom- issory note — referring to Stoessiger v. The South Eastern Railway Company.^ Upon the count for goods sold and delivered, the learned Judge left it to the jury to say upon whose credit the goods were delivered on board the Jasper — that of the defendant, or of Bailey — reserving for the court the question whether the instrument could properly be declared on either as a bill of exchange or as a promissory note. The jury returned a ver- dict for the defendant.'' Hannen, in Easter term last, pursuant to the leave reserved, obtained a rule nisi to enter a verdict for the plain- tiff, on the ground that the document declared on was a promissory note. He referred to Cruchley v. Clarence,* and Armfield v. Allport.^ He submitted, that, though informal, ' 2 Maule & Selw. 90 (1813). '■^3 Ellis & B. 549 (E. C. L. R vol. 77); 23 Law J. Q. B., 293. ^ In the course of the discussion at the trial, the learned Judge adverted to a case in this court, the name of which he could not at the moment remember. It was probably Brown v. De Winton, 6C. B., 336 (E. C. L. R. vol 60). It was there held, that, although no precise form of words is necessary to constitute a promissory note, still it ought to have all the essentials of a contract. Thus, a note payable to the maker's own order, is not per se a negotiable instrument within the 3 & 4 Anne, c. 9, s. i; a payee must be expressly named, or must appear by necessary implication. But, when a note in that form is indorsed in blank, and put in circu- lation by the maker, it becomes in effect payable to the bearer. *2 Maude & Selw. 90. (1813). ^27 Law J. Exch. 42. ■112 MC CALL V. TAYLOR. [CHAP. 4, it might, like a document drawn in favor of a fictitious payee, be treated as a promissory note payable to bearer. Argument of Counsel for Defendant. — The goods for which the instrument was given were not delivered to the ■defendant, but to another person, and the plaintiff's jour- nal and ledger, and also the invoice delivered of the goods, all show that the defendant was not the person to be charged: there is no reason, therefore, why the court should ■exercise any astuteness in favor of the plaintiff. The simple question is, zvhetlier the instrument amounts to a promissory note. It is submitted that it clearly does not. So far as it professes anything, it professes to be a bill of exchange wanting the name of a drawer. It is addressed to the defendant, and is accepted by him. The words "pay to my order " cannot mean the order of the defendant. In truth, it is an incomplete bill of exchange, and nothing else. The defend- ant does not promise to pay any sum on the demand of any person, or at any particular time; and there is no endorsement. [Willes, J. — The document seems sufficiently to explain itself. It is an authority to some person to put his name to it as drawer. No one has done so. It is therefore not a complete •instrument. Byles, J. — My strong impression at the trial was, that it was neither a bill of exchange nor a note, but I thought it better to reserve the point.] Stoessiger v. The Great Eastern Railway Company' is precisel)- in point. There, a parcel de- livered to a railway company for carriage contained 9/. io.f. in cash and an instrument bearing a bill of exchange stamp, in the following terms, " Tlirre months after date pay to vie the sum of ill. los. , value received. To Mr. Cruttenden" etc.: and written across it was an acceptance by Mr. Cruttenden. The parcel was addressed to Goold, a creditor of Cruttenden; and the intention was that Goold should put his name to the instrument as drawer. In the course of transmission the parcel was opened, and the instrument and what it contained were abstracted. In an action against the company for the loss, it was held ' 3 Ellis h B. 549 (E. C. L. R. vol. 77); 23 Law J. Q. B., 293- S^*^- iS.J MC CALL V. TAYLOR. 1 13 that the instrument was a "writing," and not a "bill, note, or security for money," within the meaning of the Carriers Act;' but that it could not be considered of value, so as under that section to exempt the company from their common-law liabity as carriers. Ld. Campbell, in giving judgment, says: "I am clearly of opinion that it is not a bill of exchange, for it has neither drawer nor payee; and it is not a promissory note, because it does not contain a promise to pay any one, and it is entirely inconsistent with Cruttenden's intention that any person who got possession of it should put his name to it as drawer." The rest of the court agree that the instrument was neither a bill nor a note: and Erie, J., says, "This was an instrument in an imperfect state." It is uttery impossible to distinguish that from the present case. Argument of Counsel for Plaintiff. — Though imperfect as a bill of exchange, this instrument may well have effect given to it as a promissory note, as it must have been intended by the party to be, viz., an engagement to pay the amount to a bona fide holder on demand. The plain- tiff might have put his name to it as drawer; and, if he had done so, the defendant would have had no answer. That is clear from Cruchley v. Clarance,^ Crutchley v. Mann,'' and numerous other cases. It is the same thing (as LeBlanc, J., observes in the former case), as if the defendant (the acceptor) had made the bill payable to bearer. [Byles, J. — "What was wanting in Cruchley v. Clar- ance is present here; the marginal note is equivocal.] The name of the person sued is there: and it is held that he gives authority to any one who is a bona fide holder, to fill up the blank. "As the defendant has chosen," says Ld. Ellenbor- ough, "to send the bill into the world in this form, the world ought not to be "deceived by his acts. The defendant, by leaving the blank, undertook to be answerable for it when filled up in the shape of a bill." It is upon the same princi- ple that a bill drawn in favor of a fictitious payee may be ' II G. 4 & I W. 4, c. 68, s. I. ^2 Maule & Selw. 90 (1890). "5 Taunt. 529 (E. C. L. R. vol. i); i Marsh. 29 fE. C. L.. vol. 4). 114 MCCALL V. TAYLOR. [CHAP. 4, declared on as a bill payable to bearer. In Fielder v. Mar- shall,' an instrument purporting on the face of it to be a bill of exchange drawn by A. , payable to the plaintiff or order, was accepted by B., and handed to the plaintiff in satisfaction of a claim for rent due to her from A. In the place where the direction to the drawee is usually found, the name and address of the payee were inserted. The whole instrument (except the drawer's name) was in the handwriting of B. It was held that the payee was entitled to recover upon it as a promissory note of B. [Byles, J. — The address in the corner was treated as no address at all. The instrument could not be a bill of exchange. It could only be Marshall's promissory note. The court construed it so as to give effect to the obvi- ous intention of the parties. Montague Smith, J. — There were both maker and payee named there.] There cannot be any difference in principle between a blank left for the name of a drawer, and a blank for the payee, or, which is the same thing, a fictitious payee. Erie, C. J., in that case says: "It appears to me that the right way to deal with it is this, to treat the direction to 'Mrs. Emma Fielder' at the foot of the bill as a mere informal repetition of the words in the body of it, 'pay to Mrs. Emma Fielder.' The effect of so con- structing it is, that the defendant, who accepts the bill, thereby promises to pay the amount at maturity to Emma Fielder. Feeling that we are at liberty so to construe the instrument, I have much satisfaction in giving effect to what must have been the intention of the parties, by holding that the plaintiff is entitled to recover." In the course of the argument, Willes, J., referred to a case of Miller v. Thompson,^ where it was held that an instrument in the form of a bill of exchange, drawn upon a joint-stock bank by the manager of one of its branch banks, by order of the directors, might be declared upon as a promisory note; Tindal, C. J., in giving judgment, says: "It appears that the directors for whom the instrument in question purports to be drawn by their manager, are mem- bers of the company whose name and character are presented '9 C. B. N. S. 606 (E. C. L. R. vol. 99). ^3 M. & G. 576 (E. C. L. R. vol. 42), 4 Scott N. R. 204. SEC. l8.] MC CALL V. TAYLOR. I15 on the face of it, and that the company is not a corporation, but a mere private association. We must, therefore, look upon it as an instrument drawn by one of several members of a firm, purporting that the sum therein mentioned shall be paid by the firm at a given time and place. In effect it is a promissory note, and nothing else. To constitute a bill of exchange, it is essential that there should be two parties, a drawer, and a person upon whom the bill is drawn.' I am- clearly of opinion that this is a promissory note." And the learned Judge (Willes, J.) adds, "If there be sufficient on the face of the instrument to indicate a promise to pay, it is a promissory note. In Peto v. Reynolds,^ the plaintiff's agent at Cameroons, in Africa, drew an instrument in the form of a bill of exchange; but addressed to no one; across which the defendant's agent wrote an acceptance in the defendant's name, and delivered the bill to the plaintiff's agent, for value received. In an action on the bill, the plaintiff attempted to prove that the bill was presented to the defendant, when he promised to pay it. It being doubtful, however, from the evi- dence, whether the defendant had made an absolute or merely a conditional promise to pay the bill, the court, in granting a new trial; though disposed to think that the instrument was not a bill of exchange, declined to give an express opinion on the point; but it was held by Parke, B., Alderson, B. , and Martin, B., that if the instrument was not a bill of exchange, it was clearly a promissory note, if there was evidence of an absolute promise to pay it. In Armfield v. Allport," the cir- cumstances were very similar to those of the present case. It was there held that an instrument drawn in the form of a bill payable to bearer, even if accepted in blank, and after- wards filled up by the drawer, may be declared on by the endorsee as a promissory note made by the drawer and en- ' And a person to whom the money is to be paid. ^9 Exch. 410. '27 Law, J., Exch. 42. Il6 MC CALL V. TAYLOR. [CHAP. 4, dorsed by the drawee.' In Byles on Bills,Mt is said: "If the bill be not made payable either to any payee in particular, or to the drawer's order, or to bearer in general, it would seem, according to the opinion of the majority of the judges,' to be payable to bearer; but, according to the opinion of Eyre, C. J., in the same case, it is mere waste paper": and reference is made to Rex v. Randall,' where a bill "payable to or order" was held 7iot to be a bill of exchange, because there was no payee; and to Rex v. Richards,^ where the prisoner drew a bill upon the treasurer of the navy "payable to or order," and signed it in the name of a navy surgeon, and it was held, that, to constitute an order for the payment of money, there must be some payee, and that a direction "to pay to or order was not sufficient." Decision of Court. — I am of opinion that this rule should be discharged. The instrument in question is declared upon as a bill of exchange, and also as a promissory note. It was in this form, '^ Four inontlis after date, pay to my order the sum of three hundred pounds, for value re- ceived,'' and it was addressed to the defendant, but it had no date and no draivers name. Across it was written an accept- ance by the defendant. The question is, whether the holder of this document has a right to declare on it either as a bill of exchange or as a promissory note. It is clearly not a bill of exchange, and in form it is not a promissory note. If I could be clearly satis- fied that I should be giving effect to the intention of the parties by holding this instrument to be a promissory note, I would endeavor so to construe it. But I am aware of no 'It is not easy to discoverer what was decided by this case. In a considered judgment, the Ld. Chief Baron is reported to have said: "A man who writes his name across a stamped paper as acceptor, there being a direction to him upon the paper, is liable; he gives his authority to anybody to draw upon him when it may be convenient to do so, or when the person to whom the paper is given may think it advisable to apply it for this purpose." ^'Sth edit. 73. 'In Minetv. Gibson, i A. Bl. 608. 'Rnss C. C. 185. '^R. & R. C. C. 193. SEC. l8.J MC CALL Z/. TAYLOR. II7 case, and the industry of the learned counsel has discovered none, which warrants us in holding this to be either the one or the other. It is an inchoate and imperfect instrument. If the holder had authority to make it a complete instrument either as a bill or a note, he was at liberty to do so; but, if he had no such authority, he might if he attempted to do so '3 Ellis & B. S49 (E. C. L. R. vol. 77); 23 Law J., Q. B. 293. The meaning of the word "parties" in reference to negotiable instruments is used in a more restricted sense than when relating to "parties" to an ordinary contract. In the latter case, "par- ties" are those who in a strict legal sense are affected by the oper- ation of the contract; in the former case, "parties" as the courts usually designate them are those whose names appear on the face or back of the instrument. "A person is made a party by his signing, his signature or some other written emblem upon the instrument that he intends to be bound by the instrument. A sig- nature in pencil, a signature made by another person, but attested by a mark, an indorsement upon the back of the note in form of '7, 2, 8,' made with the intention of indorsing, or such evidences of intention. The question is whether the signer intended to bind himself or not." Norton on Bills and Notes, 38. Brayley v. Kelley, 25 Minn., 160. Certainty as to Parties is Promoted by Two Facts: — (i) That the instrument bears upon its face means of identi- fying the parties to it; (2) That these parties are capable of exact ascertainment. The absence of either or both of these requirements renders the instrument non-negotiable. Chief Baron Eyre, in Gibson v. Minet, declared: "If I put in writing these words: 'I promise to pay 500 pounds on demand, value received' without saying to whom it is waste paper. If I direct another to pay 500 pounds at some day after date, for value received, without saying to whom, it is waste paper." This is necessary to the negotiability of the instrument. For, under the law merchant, a negotiable instrument must show upon its face by inspection who the parties are, except when made pay- able to bearer. This then is the general rule, that without a maker or drawer, a drawee or a payee the instrument is non negotiable. Exception in the Case of the Drawee.— The following exceptions may be noted in the case of the drawee: (i) If the drawee can be otherwise sufficiently identified from the bill it is sufficient. (2) An unaddressed bill accepted or a bill accepted where the drawer and acceptor are one and the same person, probably is Il8 MCCALL V. TAYLOR. [CHAP. 4, render himself liable to a charge of forgery. The case of Stoessiger v. The South Eastern Railway Company' seems to me to be precisely in point, without going into any of the other cases. Nothing is clearer to my mind than that, in the ordinary case of an acceptance with the drawer's name in blank, it is important, in order to constitute a contract, that to be treated as a promissory note, and is negotiable. Norton on Bills and Notes, 57. The Common Rules Concerning the Nomination of Payees may be Stated as Follows: — (i) The payee of an instrument, except one payable to .bearer, must be a person in being, natural or legal, and ascer- tained, at the time of issue. (2) Where the payee and maker or drawer are the same per- son, the instrument is not issued until after its indorsement and delivery by the maker. (3) The payee may be a fictitious or non-existing person, but the instrument is then construed as payable to bearer, and title thereto is made by estoppel." Norton on Bills and Notes; 57. The parties to commercial contracts must be particularly des- scribed and must be a person or persons who are capable of being ascertained at the time the instrument is made. Chitty on Bills, 156. But the parties may be made certain without inserting their names; for that is certain which may be rendered certain; and if the payee be so certainly described or referred to as to be easily ascertained by allegations and proofs the contract will be sustained. Adams v. King, 16 111., 169. The following contracts have been held to be sufficient as to parties: " Pay to bills payable, " (signed) E. F. ; "I promise to pay to you," (signed) X. Chalmers on Bills and Notes, 7; "Pay to the administrators of Abner Chase, deceased," (signed) C. D. Adams v. King, 16 111., i6g; or a promise to pay to "A or heirs," (signed) H. B. Knight v. Jones, 21 Mich. 161. Where a note reads, "We promise to pay to the order of myself, etc.," extrinsic evidence is competent to show which of the two obligors was intended as the payee. Jenkins v. Bass, 88 Ky., 397. In the case of Stoessiger v. The Southeastern Ry. Co. supra, (23 Law J. [N. S. ] [Q. B.] 293), the following instrument; " Three vionths after date pay to me the sum of eleven pounds, ten shillings, value received. " To Mr. Cruttenden, Jeweller." "\_Not signed.l " "Accepted, Cruttenden." Was held not to be a negotiable contract. Ld. Campbell, C. J., said: "I am clearly of opinion, that it is not a bill of exchange, for it has neither drawer nor payee; and it is not a promissory note. SEC. 18.] MC CALL V. TAYLOR. Ilg it should be known who is to be the drawer. It may have been important here that the instrument should be filled up as a bill drawn by the owner of the ship or the broker upon the captain. And it may be that the plaintiff had no authority to add his name as the drawer. But, whatever may have been the particular circumstances under which this document was because it does not contain a promise to pay any one, and it is entirely inconsistent with Cruttenden's intention that any person who got possession of it should put his name to it as drawer." Schultz V. Astley, 2 Bing., 544; 5 Law J. Rep. (N. S.) C. P., 130; Miller v. Race, i Burr. 452; Petilton v. Lorden, 86 111., 361; Gray V. Milner, 8 Taunton, 739; Shuttleworth v. Stephens, I Camp. R., 407; Harvey v. Kay, 9 B. and C, 364; Edis v. Bury, 6 B. and C, 433; Tevis v. Young, i Mete. (Ky.), 197; Allan v. Mawson, 4 Camp, 1:5. In the case of Brown v. Oilman, 13 Mass., 158, the follow- ing instrument was held not to be a good promissory note for the reason that all the parties were not certain: "Boston, 15th May, 1810. " Good for one hundred and twenty-six dollars on demand. " Gilman &r Hoyi." In this case Parker, C. J., said, "It is not a negotiable prom- issory note. It is not a note payable to bearer. Its legal effect is nothing more than that of a memorandum between the parties to it, to operate as a promise to pay money; as a receipt for money; or as proof of a sum of money to be accounted for, according to the real intention of the parties." See also, Adams v. King, i6- 111., 169; Carpenter v. Farnsworth, 106 Mass., 561; Yates v. Nash, 29 L. J., C. P., 306; 8 C. B., 581 (98 E. C. L. Rep.) It Is Sufficient to Describe the Parties. — It is sufficient if the parties are particularly described. They need not be named. Storm V. Sterling, 3 E. and B., 832 (77 E. C. L. R.); Cowie v. Stirling, 6 E. and B., 333 (88 E. C. L. R. ) If a note gets into the hands of a wrong payee, of the same name, he cannot acquire a title thereto; and if he indorses it he will be guilty of forgery. Mead v. Young, 4 Term, R. 28; Foster V. Shattuck, 2 N. H. , 446. So also if a note is given to one in a name different from his own, he may declare upon it and prove- that he was the person intended. Patterson v. Graves, 5 Blackf. (Ind. ), 593; Jester V. Hopper, 8 Eng. (Ark.), 43. If the name- is misspelled, parole evidence is admissable to show who was in- tended. Willis V. Barrett, 2 Stark., 29 (3 E. C. L. R.). A note- payable to B. orC. will be bad for uncertainty of parties. Blanck- enhagen v. Blundell, 2 B. and AL, 417. Where the father and son have the same name.it will be intended payable to the father I20 MC CALL V. TAYLOR. [CHAP. 4, given, I act upon the case I have referred to. As it stands, the thing is inchoate and incomplete, and affords no founda- tion for the holder to sue upon it. Willes, J. — I am entirely of the same opinion. Byles, J. — I am of the same opinion. I thought at the trial, and still think, that the instrument in question could not until the contrary is shown. Sweeting v. Barrett, i Stark, io6. A note may be payable to "the trustees of A's will" and parol evidence is admisrible to show who the trustees are. Adams v. King, i6 111., 169; Megginson v. Harper, 2 C. and M., 322. So also may a negotiable contract "be payable to the administrator of A's estate." Moody v. Threlkeld, 13 Ga., 56. The following is a good negotiable contract; "On demand I promise to pay 'A.,' 'B.' and 'C.,' or to their order, or the major part of them, the sum of 100 pounds." Watson v. Evans, 32 D. J. R. Exch., 137. If the name be left blank, a bona fide holder may fill it up with his own name. Crutchly v. Mann, 5 Taunton, 529. In Grant v. Vaughn, the contract was payable to "ship Fortune or bearer," and it was held to be a good negotiable contract payable to "bearer" simply. 3 Burr., 1516. In the case of Knight v. Jones, 21 Mich., 161, the court held the following instrument to be a promissory note. ''Detroit, Oct. 7, 1867. " I promise to pay to Mary Kfiight or heirs, the sum making four hundred and fifty dollars, on the first day of January, 1868. ' ' William Jones. " See also, Armstrong v. Harshman, 61 Ind., 52; Sittig v. Birke- stack, 38 Md., 158. Where a negotiable contract is issued in blank without the name of the payee there is an authority to a bona fide holder to insert a name. Cruchley v. Clarence, 2 M. and S., 90; Crutchly v. Mann, 5 Taunton, 529; Atwood v. Griffin, 2 C. & P., 368; Rich v. Starbuck, 51 Ind., 87. A promise "to pay to the order of the indorser's name," etc., was supported. 2 Hill, (N. Y. ), 154; Kayser v. Hall, 85 III., 511; 118 Mass., 439. A promise "to pay to the trustees of the Wesleyan Chapel, Harrogate, or their treasurer for the time being," etc., was held good. Holmes V. Jaques, i Q. B. L. R., 376; Storm v. Stirling, 3 E. and B., 842; 23 L. J. R. (Q. B.), 301; Harlow v. Roswell, 15 111., 56; Watson, etc. v. Evans, i Hurl, and C, 662; 7 E. and B., 234; Adams v. King, 16 111., 169; Moore v. Anderson, 8 Ind., 18; Rob- ertson V. Sheward, i M. & G., 511; Megginson v. Harper, 2 Cr. and M., 322. In Bowles v. Lambetr, 54 111., 237, a note payable "to the estate of A.," was also held good. Tittle v. Thomas, 30 Miss., 122; Lyon V. Marshall, 11 Barb., 241. SEC. l8.J MC CALL V. TAYLOR. 121 be declared on as either a bill of exchange or a promissory note. It is not like a bill accepted iri blank. Montague Smith, J. — I also think this case is not dis- tinguishable from Stoessiger v. The South Eastern Railway Parties — Capacity of, to make Negotiable Contracts. — The general principles which govern the capacity of parties to common law contracts control in their application to the law of commercial contracts. Want of capacity says Mr. Randolph in his valuable work on commercial paper may be either natural, legal or political, according as it proceeds from mental unfitness or from the requirements of local or public law. Examples of natural capacity are found in idiots, lunatics and all persons of unsound mind or insufficient understanding. Among those who are legally incapable may be mentioned infants, married women and corporations so far as their power is restricted by law. Among those who are politically incapable may be mentioned alien ene- mies and to a certain extent public officers and State and munici- pal governments. Infants — Capacity of. — Persons under twenty-one years of age are minors, or infants, and contracts made by them may be void, when they are clearly to the infant's disadvantage, or void- able which may or may not be to his advantage according to the circumstances, or they may be valid if entered into for the neces- sities of the infant or in satisfaction for his torts. The distinction between void and voidable contracts of infants is practically obso- lete; so that now all the contracts of an infant, which are not in themselves illegal are voidable only and may be ratified. Chancellor Kent in his Commentaries says, " it is held that a negotiable note given by an infant, even for necessities, is void, and his acceptance of a bill of exchange is void; and a bond with a penalty though given for necessities is void. It must be admitted, however, that the tendency of modern decisions is in favor of a reasonableness and policy of a very liberal extension of the rule, and that the acts and contracts of infants should be deemed voidable only, and subject to their election, when they become of age, either to affirm or disallow them. If their con- tracts were absolutely void it would follow as a consequence that the contracts could have no legal effect whatever. 2 Kent. Comm. Lect. 31; Harner v. Dipple, 31 O. St., 72. Liability of Infant for Necessaries. — The rule is well settled that an infant may bind himself by a negotiable contract fer necessaries. Bradley v. Pratt, 23 Vt, 378. He can not, however, bind himself for necessaries when he has a parent or guardian who supplies his wants unless he has authority from such guardian or parent to purchase them and bind himself for them. King v. Cole, Holt's Rep., 360; Coan v. 122 MC CALL V. TAYLOR. [CHAP. 4, Company supra. There, upon an instrument precisely simi- lar to this, except that there it was dated, Ld. Campbell says: "It is not a bill of exchange; there is neither drawer nor payee. Nor is it a promissory note to pay any one who might happen to be bearer; that Cruttenden should become liable Boroles, ib., 358; Thompson v. Leach, ib., 357; 3 Mod. R., 301; 3 Salk., 196; Angell v. McClellan, 16 Mass., 228; Rundell v. Keeler, 7 Watts, 237. If an infant borrows money for necessar- ies and gives his note for the same he is not liable on such note unless he applies the money accordingly. 3 Salk., 196. Liability of Infant for Torts. — Infants are liable for their torts and injuries of a private nature, and for wrongs committed by them the same as adults. If the tort be committed by force the infant is liable at any age; for in case of civil injuries, with force, the intention is not regarded. Tift v. Tift, 4 Denio, 175; Bradley v. Pratt, 23 Vt., 378. The law makes him liable for his tort, and if he elects to settle or liquidate such liability by giving his promissory note or other commercial contract, we see no reason why he should not be held liable in an action upon the note, to the same extent that he would be if the action had been brought upon the cause of action which formed the consideration for the note. The com- mercial contracts having been given in settlement of a claim for which the infant was liable and no fraud or imposition having been practiced in obtaining it the plea of infancy is certainly not avail- able to defeat it. Infant as Payee. — An infant, says Mr. Daniel, may un- doubtedly be the payee of a bill or note, and may sue upon and enforce it, since it can not be but for his benefit if the considera- tion thereof does not move from himself, but from some third person, or if it be for a debt justly due to him. But whether or not an infant can personally receive payment is a different ques- tion. As a general rule, payment should be made to his guardian, and if it be made to the infant personally, and is thereby dissi- pated and lost, the payor would not be discharged. Story on Bills, Sec. 85; Dan. on Negot. Inst., Sec. 227; Phillips v. Paget, 2 Ark., 80. Infant as Indorser. — An infant may also become the in- dorser of a commercial contract made payable to him or order and thereby pass the legal and equitable title so as to enable the endorsee to recover against prior parties. This is upon the theory that the prior parties by undertaking to pay to an infant or his order are estopped to deny his capacity to order payment to be made to the endorsee. Story on Bills, Sec. 85; Hardy v. Waters, 38 Me., 450; Dan. on Negot. Inst., Sec. 227. "It would be ab- surd to allow one who has made a promise to pay one who is an SEC. 18.] MC CALL V. TAYLOR. I23 generally to the bearer, was quite contrary to his intention." So here, I think we should be going entirely against the inten- tion of the defendant if we were to hold him liable upon this instrument as upon a promissory note payable to bearer. infant, or his order, to refuse to pay the money to whom the infant has ordered it to be paid, in direct violation of his promise." Nightingale v. Withington, 15 Mass., 272. Liability of Infant Upon His Indorsement. — An infant, as an indorser is no more liable than as maker or acceptor of com- mercial contracts. While his indorsement operates to transfer the title to the contract he is not liable thereon. He may indeed dis- affirm the contract of indorsement and intercept the payment to the endorsee. Or he may by giving notice to the anticedent par- ties of his avoidance of the contract of indorsement furnish them with a valid defense against the claim of the endorsee. But until he does avoid the indorsement it is to be deemed, as to such anticedent parties, a good and valid transfer. Story on Notes, Sec. 80. Infants' Liability — Ratification. ^Since the commercial contract of an infant is not absolutely void but voidable only, he may ratify it after reaching full age, when he will be bound to pay the instrument according to its term. For by ratification he vali- dates the contract and it becomes the same as if it had been exe- cuted and delivered by an adult. The ratification enures to the benefit of all subsequent parties or holders. No particular form of words is necessary to a ratification. A mere recognition of the existence of the debt or contract is suffi- cient. The following statements have been held to amount to a ratification by the infant after reaching full age: " I will pay the note as soon as I can make it, but not this year; all that is justly your due shall be paid; I owe you and will pay you when I return; I will remit in a short time." The promise to pay the contract to amount to a ratification must be direct and certain and must be made to the party with whom he contracted or his authorized agent; if made to a third person it will not be sufficient. Mere part payment by the infant, before maturity, will not of itself amount to a ratification by the infant after reaching his majority. Smith V. Mayo, 9 Mass., 62; Robbins v. Eaton, 10 N. H., 561. In many of the states statutes have been enacted which pro- vide that no action shall be maintained whereby to charge any person, upon any promise made after full age; to pay any debt contracted during infancy, or upon any ratification after full age, of any promise or simple contract made during infancy, unless such promise or ratification shall be made by some writing signed by the parties to be charged therewith. 124 jMC CALL V. TAYLOR. [CHAP. 4, Rule. Discharg^ed. Joint Note of an Infant and Adult. — If an infant executes a negotiable contract jointly with an adult, the latter will be bound by his contract and suit may be brought against the adult alone. Taylor V. Dansby, 42 Mich., 84; Reading v. Beardsley, 41 Mich., 123; Burgess v. Merrill, 4 Taunton, 468; Slocum v. Hooker, 12 Barb., 563. Joint Note of Infant Partner. — The same rule applies to infant partners. And the fact that an infant remains in the firm after he reaches his majority does not necessarily ratify his con- tracts. Crabtree v. May, i B. Men., 289; Bush v. Linthicum, 59 Md. 344; Adams v. Beal, 67 Md., 53; Osburn v. Farr, 42 Mich., 134; Continental Bank v. Strauss, 137 N. Y., 148, 553; Mehlhop V. Rea, 90 Iowa, 30; 57 N. W. Rep., 650; Bixler v. Kresge, 169 Pa. St., 405; 47 Am. St. Rep., 920; Shirk v. Shultz, 113 Ind., 571. His interest in the partnership property remains liable, however, to the partnership debts. Lovell v. Beauchamp, 19 Appeal Cases (L. R.), 607; In re Howes, 3 Q. B., 628; In re Taylor, 8 D. M. and G., 254; Ex parte, Adam, i V. and B., 494; Ex parte Blain, 12 Ch. D., 522; Ex parte Henderson, 4 Ves., 163; Shirk v. Shultz, supra; Yates v. Lyon, 61 N. Y., 344, Pelletier v. Conture, 148 Mass., 269. Neither can the adult members of the firm repudiate these contracts upon the ground of infancy, for by admitting the infant to the firm they have thereby made him their agent. Adams v. Beal, 67 Md., 53; Am. St. Rep., 379; Sparman v. Keim, 83 N. Y., 245. Lunatics— Capacity to Contract — Effect of Insanity. — It may be stated as a general rule, that where contracts are made with imbeciles or lunatics in ignorance of their weaknesses and no advantage is taken of them and the acts are in good faith in every respect, they are valid and binding upon the lunatic. Molton v. Cameroux, 4 Exch., 17; 2 Exch., 4S9; Beverley's Case, 4 Rep., T26; Freed v. Brown, 55 Ind., 310; Edwards v. Davenport, 20 Fed. Rep., 756; Stewart v. Lispenard, 26 Wend., 299; West v. Russell, 48 Mich., 74; Searle v. Galbraith, 73 III., 269; Moore v. Hershey, 90 Pa. St., 196; N. N. Ins. Co. v. Blakenship, 97 Ind., 535; Scanlon V. Cobb, 85 111., 296. Contra see Seavers v. Phelps, 11 Pick., 304; Fitzgerald v. Reed, 9 S. and M. (Miss.), 94; Anglo-California Bank V. Aures, 27 Fed. Rep., 727. If, however, the lunatic has been put under guardianship his contracts are void. Ingraham v. Bla- duin, 9 N. Y., 45; Runnells v. Gerner, 80 Mo., 477; Mansfield v. Felton, 13 Pick., 206; Lynch v. Dodge, 130 Mass., 458. Capacity of Married Women to make Negotiable Con- tracts. — At common law the contracts of married women were void; and this rule exists yet except so far as removal by statute. In some of the states, by statute she may contract as dLfeme sole, in others only as to her sole and separate property, while in others the common law rule is still in force. See statutes of your state; SEC. l8.J MC CALL V. TAYLOR. 125 also Mason v. Morgan, 2 A. E., 30; Haly v. Lane, 2 Atk., 181; Lloyd V. Lee, i Strange, 94. In those states which permit her to bind her separate estate by contracts, the contract must show in some way that it was her intention at the time the contract was executed and delivered. Yale v. Dederer, 22 N. Y., 450; McVey V. Cantrell, 70 N. Y., 295; Second Nat. Bank v. Miller, 60 N. Y., 639; Kenton Ins. Co. v. McCIellan, 43 Mich., 564; Todd v. Ames, 60 Barb., 862; Wolf v. Van Metre, 23 Iowa 397. If these contracts are executed with a married woman as principal with a surety, the surety will alone be liable. At common law, where a man mar- ried a woman, who was a party to a bill, or note, he became res- ponsible for such contracts, i Black. Com., 443; Schonler's Do- mestic Rel. 69. She is not estopped by her own representation that she is a feme sole. Kemworth v. Sawyer, 125 Mass., 29; Waterbury v. Andrews, 67 Mich., 282 and cases there cited. Neither is she liable upon her promise made by her after her husband's death to pay a bill or note which she executed during his life time unless upon some new and good consideration. Phil- lips V. Wicks, 36 N. Y., 254; Hetherington v. Nixon, 46 Ala. 297. A married woman may, however, be the agent for her husband and as such bind him by a note signed in her own name. Abbott V. McKinley, 2 Miles (Pa.), 220. Liability of Husband for the Ante- Nuptial Com- mercial Contracts of the \Ai''ife. — If a woman executes and delivers a commercial contract while single, and before the same is paid marries, the husband becomes liable for the payment there- of. This liability of the husband, however, terminates with the expiration of the coverature. If the husband dies before proceed- ings are instituted upon such contracts the wife alone will be liable. Byles on Bills and Notes, 66. If a commercial contract was given to a single woman and she married the property vested in her husband and he alone could indorse it at common law. At common law a note made payable to a married woman is in law a note to the husband and becomes instantly his property; and her indorsement transfers no property in the note unless the indorsement was made with the husband's knowledge and consent. Savage v. King, 17 Me., 301; Holland v. Moody, 12 Ind., 170; Stevens v. Beals, 10 Cush. (Mass.), 291; Miller V. Delamaker, 12 Wend., 433; Mason v. Morgan, 2 Ad. & Ellis, 30 (29 E. C. L, R.); Prestwick v. Marshall, 7 Bing., 565 (20 E. C. L. R.). Liability of Wife— Exceptions to the General Rule.— "There are certain exceptional circumstances under which the contracts of a married woman may be binding upon her: (i) when husband is an alien enemy or civilly dead; (2) when wife has a separate estate; (3) when wife is a sole trader by special custom or statute; (4) when wife purchases necessaries; (s) when husband 126 MC CALL Z'. TAYLOR. [CHAP. 4, adopts her name as binding on him; (6) when wife is agent of hus- band." Dan. on Negot. Inst. Sec. 244. If the husband is an alien enemy, he is prevented by law from coming to the aid of his wife; it is therefore necessary for her own maintenance and support to be permitted to make contracts. So also a married woman may become liable upon her contracts when in the execution thereof she intended to charge her sole and sepa- rate estate. In these cases, however, it is necessary that her con- tracts be entered into with reference to, and in the credit of, her separate estate. There must be an intention upon her part to make her separate estate liable. Some of the courts have held that this intention must be expressed in the contract itself; while others have held upon the contrary that it is sufficient if the inten- tion can be implied. Williams v. Urnston, 35 Ohio St., 296; (See Levi V. Earle, 30 Ohio St., 147); Frank v. Lilienfield, 33 Gratt., 349; McVey v. Cantrell, 70 N. Y., 295; Conlin v. Cantrell, 64 N. Y., 219. In many of the states there are statutes empowering married women to engage in business upon their sole and separate accounts, and when so empowered they may execute and deliver and render themselves individually liable upon their commercial contracts. Canden v. Mulen, 29 Cal., 566; Wieman v. Anderson, 42 Pa. St., 311; Mudge V. Bullock, 83 111., 22. Married Women— ^Right to Contract — Statutory Rules. — By statute in many of the states the common law rule concern- ing the right of a married woman to contract has been abrogated; so that now the wife may enter into any engagement or transaction which she might if unmarried. Capacity of Partners to Bind the Firm upon Commer- cial Contracts. — It may be stated as a general proposition that each partner (except secret or dormant partners) has implied power to bind the firm. This authority is implied from the very nature and object of a partnership. It springs from the mutual agency of the co-partners for each other. This implied authority, however, depends largely upon the general character and purposes or objects of the partnership. If the partnership is a trading part- nership the borrowing of money becomes an ordinary incident of the trading and each partner has an implied authority to bind the firm by making, drawing, endorsing or accepting in its name a commercial contract for partnership purposes. This is true whether he signs the name of the firm, or his own name. Living- ston V. Roosevelt, 4 Johnson, 251; Gayno v. Samuel, 14 Ohio, 592. A partner has no right to bind his co-partners by a commer cial contract except in a partnership transaction. If, however, the partnership is not a trading firm one partner has no implied au- thority to bind the firm by making, drawing, endorsing or accept- ing commercial contracts. The reason therefor being that the power of each individual of a partnership to make such contract in SEC. l8.] MC CALL Z). TAYLOR. 127 behalf of non-trading firms can only exist by virtue of the consent of all the partners. Pease v. Cole, 53 Conn., 53; Walker v. Walker, 66 Vt, 285; Horn v. City Bank, 33 Kan., 518; Lee v. Bank, 45 Kan., 8. Upon these principles a member of a law firm cannot bind the partnership by a promissory note or other commercial contract without the consent of all the members of the firm; neither can one of the firm of practicing physicians bind it except for the neces- saries of their profession. Dan. on Negot. Inst. Sec. 358; Tiede- man on Com. Paper, Sec. 97; Pease v. Cole, 53 Conn., 53; Bays v. Conner, 105 Ind., 415; Levi v. Lathan, 15 Neb., 509; Dowling v. National Bank, 145 U. S., 512; Crossthwait v. Ross, i Humph (Tenn.), 23. Partners— Form of the Signature of the Firm.— It is a strict rule that the name of the firm in the making, drawing, endorsing or accepting of commercial contracts, must be used, otherwise an action cannot be maintained against the firm; if, however, there is an immaterial variance the firm will be bound by the signature. But the firm will not be bound if the variance is material. It has been held that if the style of the firm was " John Burton," the firm will not be bound on a note signed by, "John Burton & Co." Kirk V. Burton, 9 M. & W., 284; Tiedeman on Com. Paper, Sec. 103. When the firm name is signed by a member of the firm to a commercial contract it may be done by using the name of the partnership simply or the use of the partnership name per the partner. Thus the signature may be either "John Smith & Co." or "John Smith & Co." by John Smith. No special formality is required; but it must appear on the face of the paper that the contract is the obligation of the firm. So also have these con- tracts which read "I promise," and signed by one of the firm for the rest as A. B. for A. B. & Co. been held to bind the whole firm and not the signing parties singly. Doty v. Bates, 11 Johns, 544- Capacity of a Corporation to Make Negotiable Con- tracts.— Corporations as a general rule have only such powers as are expressly conferred upon them by their charters and such im- plied powers as are necessary to the full and complete enjoyment of their express power. In order, therefore, to determine whether a corporation has authority to execute and deliver commercial con- tracts, an examination of its express powers— of its corporate charter must be made. If express authority, therefore, can not be found in its charter, then the inquiry arises is this power neces- sarily implied from the express powers or from the general nature or character of the institution. Dartmouth College Case, 4 Wheaton, 636. According to the English rule all trading and banking corpor- ations may execute and deliver commercial contracts without express authority so to do, because such acts are necessary to the MC CALL V. TAYLOR. [CHAP. 4, very object of their existence. Broughton v. Manchester, Water Wks., 3 B. 7. Aid., 1. In the United States it may be regarded as settled that the power of corporations to become parties to commercial contracts, is co-extensive with their power to contract debts. Whenever a corporation is authorized to contract a debt it may execute a nego- tiable contract to pay it. Every corporation, therefore, may become a party to commercial contracts for some purposes if it has the power to contract debts. A religious corporation which may need fuel for its rooms may give its note for the same. Par- sons on Bills and Notes, 164, 165; Catron v. I. & Society, 46 Iowa, 108; Dan. on Negot. Inst., Sec. 381. A corporation, in order to obtain its legitimate and corpor- ate objects, may deal precisely, through its agents and officers, as an individual may who seeks to accomplish the same ends. Moss V. Averill, 10 N. Y., 447, 449. Where a corporation has power to purchase property or pro- cure money on a loan in the course of its business, the seller or lender may exact, and the purchaser or borrower must have the power to give, assurances which do not fall within the prohibitions, express or implied, of some statute. Curtis v. Leavitt, 15 N. Y., 66; Olcott V. Tioga R'y Co., 40 Barb., 179; Monument Nat. Bk. V. Globe Works, loi Mass., 57. Corporations Not Allowed to Become Accommoda- tion Parties. — Unless the corporation, however, has been ex- pressly authorized to become a party to commercial contracts it has not the power to bind itself upon accommodation paper; for an accommodation paper cannot be considered to be issued in the regular course of the corporation. But if the contract reaches the hands of an innocent endorsee the common law rule of nego- tiable paper applies, viz.: that the endorsee takes the paper free from the equitable defenses existing against it. So also will the corporation be liable upon its commercial contract in the hands of bona fide holders where the amount issued by the corporation is in excess of the amount authorized. Ellsworth v. St. Louis R'y Co., 98 N. Y., 553; National Bank v. Wells, 79 N Y., 498; National Park Bank v. German Am. & Security Co., 5 L. Rep. A, 673. It may be stated as a general rule that when a corporation has power under any circumstance to issue negotiable securities, the bona fide holder has a right to presume that they were issued under the circumstances which gave them the requisite authority. Lex- ington V. Butler, 81 U. S., 14- Corporations — Power to Indorse Commercial Con- tracts.— Corporations, says Daniel in his work on Commercial Paper, having a right to receive bills or notes in payment of debts, have the implied right to indorse them, or to dispose of them by assignment without indorsement as may suit their purposes. Mar- vine v. Hymers, 12 N. Y., 223; Hardy v. Merriweather, 14 Ind., SEC. l8.J MC CALL V. TAYLOR. 129 203; Dan. on Negot. Inst., Sec. 385. And if authorized to bor- row money they may borrow a bill or a note and indorse it or jn it. Corporations — Form of Their Contract. — As a general rule, a corporation can only contract by a writing under its com- mon seal. But to this rule there are certain exceptions: (i) Where the contract is executed; (2) Where the acts done are of daily necessities to the corporation, or are too insignificant to be worth the trouble of affixing the common seal; (3) Where the corpora- tion as a head, as a mayor, or a dean, who may give command which a party may obey without the sanction of a common seal; (4) Where the acts to be done must be done immediately and it would be impossible to wait for the formality of attaching the common seal; (5) Where the corporation is incorporated for the purposes of trade the very object of these institutions requires that they should exercise the right to execute and deliver commer- cial contracts which if executed and delivered under seal would destroy their very object, "negotiability." Warren v. Lynch, 5 Johnson, 339; East London & Co. v. Bailey et al., 4 Bing., 283; 13 E. C. L. R., 435; Story on Bills, Sec. 62; Tiedeman on Com- Paper, Sec. 117. Corporations — Authority of Agents. — Corporations can only act through their agents and therefore the power to appoint agents is necessarily implied. Usually the charter or by-laws of corporation provide or indicate the officers or agents of the cor- poration who shall have authority to bind the corporation in con- tract. In such cases contracts executed and delivered by other officers or agents purporting to bind the corporation would bear upon their face evidence of irregularity and be notice to all. Therefore every purchaser or holder of a promissory note of a corporation takes it at the peril of the officers' lack of authority to execute and deliver that particular contract. Davis v. Rock- ingham & Co., 89 Va., 290. The corporation may be estopped to deny the authority of its officers or agents to execute and de- liverer promissory notes after they have received and used the proceeds. Corporations — Public— Power to Execute Commercial Contracts. — Unless there is some restriction in the organic law there is no doubt that both the state and federal governments may through the proper agents become parties to any specie of com- mercial contract. Miller, J., said "the authority to issue bills of exchange not being one expressly given by statute, can only^ arise as an incident to the exercise of some other power. When it be- comes the duty of any officer to pay money at a distant point, he may do so by a bill of exchange, because that is the usual and ap- propriate mode of doing it so when an officer or agent of the gov- ernment at a distance, is entitled to money here, the person hold- ing the funds may pay his drafts. And, whenever, in conducting 13° MC CALL V. TAYLOR. [CHAP. 4, any of the fiscal affairs of the government, the drawing of a bill of exchange is the appropriate means of doing that which the depart- ment, or officer has a right to do, then he can draw and bind the government in so doing. But the obligation resting upon him to perform that duty, and his right and authority to effect such an object is always open to inquiry; and if they be found wanting, or if they be forbidden by express statute then the draft or acceptance is not binding on the government. Floyd Acceptances, 7 Wall. 679. Corporations — Municipal or Public — Power to Execute and Deliver Commercial Contracts. — The term public or municipal corporation is here used to include counties, townships, cities, towns and incorporated villages as well as school districts, parishes, and police districts. These corporations differ only in the relative quantity of powers conferred by the state government. As a general rule the state in creating these public corporations, either under general or special laws, defines and determines their power. And it is a well settled rule of construction of grants by the legislature to corporations, whether public or private, that only such powers and rights can be exercised under them as are clearly comprehended within the words of the act, or derived therefrom by necessary implication, regard being had to the objects of the grant. Minturn v. Ladue, 23 Howard 435. Upon the question whether a municipal or public corporation may become a party to a com- mercial contract through its lawful agents, there is much conflict in the authorities. It has been the subject of much discussion by text writers and of numerous decisions by the legal tribunals of the country. There is a marked distinction between the powers of private and public corporations in their powers to execute and de- liver commercial contracts. As has been stated the right of private or trading corporations to issue commercial contracts or other evi- dences of indebtedness, unless restrained by their charters or the law of the land, may be conceded. Private corporations are or- ganized for the purposes of trade and business, and the borrowing of money and the issuing of obligations therefor may be necessary to carry the very object of the corporation into effect. The objects of municipal corporations are very different. The ends and ob- jects of municipal corporations are the comfort, protection and well-being of the people found within their geographical limits. In the case of the City of Williamsport v. The Common Wealth, Paxon, J., in discussing the rights of municipal corporations to borrow money and issue commercial contracts says, " taken in its broad sense, the power to borrow money and issue bonds therefor cannot be said to be among the implied powers of municipal cor- porations. For general purposes he continues such power does not exist, for the reason that it is not necessary for the objects for which it was created. Thus it has never been contended that a municipality may borrow money and issue bonds or notes for ob- SEC. l8.] MC CALL Z). TAYLOR. I31 jects having no necessary relations to the performance of munici- pal duties. To admit such a principle would be destructive of such organizations, and place the tax-payers of a city at the mercy of the first band of plunderers who should happen to obtain the temporary control of its affairs." 84 Pa. St., 487, 494. Judge Dillon says in his valuable work on Municipal Corporations that "we regard as a like unsound and dangerous that a public or muni- cipal corporation possesses the implied power to borrow money for its ordinary purposes, and as incidental to that, the power to issue commercial securities. The cases on this subject are conflicting, but the tendency is to the view above indicated."' Whether it is a wise policy or not certainly the legislature in creating municipaL corporations may grant them full power and authority to execute and deliver commercial contracts. This power, however, has seldom ever been granted. Parties — Executors and Administrators. — The rule is well settled that the executors or administrators have no power to bind the estate of the decedent by making, drawing, endorsing or accepting commercial contracts. King v. Thom, i Term R., 489; Austin V. Munro, 47 N. Y., 360; Kessler v. Hall, 64 N. C, 60; Cornthwaite v. Nat. Bank, 57 Ind., 268; Rittenhouse v. Ammer- man, 64 Mo., 197. If, however, the executor or administrator does execute and deliver a commercial contract he thereby makes him- self personally liable even though it is stated in the most explicit manner to have been executed and delivered in his representative capacity. Edwards on Bills, Sec. 79; Christian v. Moris, 50 Ala., 586; Wisdom V. Becker, 52 111., 346; Kirkman v. Benham, 28 Ala., 501. Parties — Power of Personal Representatives to Trans- fer by Endorsement or Assignment. — While the personal re- presentatives of deceased persons may not bind the estate of his decedent, yet he may transfer negotiable contracts belonging to the estate by either an endorsement or assignment. In case, how- ever, such instruments are dishonored the personal representative is personally bound in such transfer unless he has expressly exemp- ted himself from liability by the terms of the transfer. Edwards on Bills, 248; Foster v. Fuller, 6 Mass., 58. Where there are two or more executors or administrators any one of whom may trans- fer negotiable contracts, (unless by the terms of their trust forbid- den), which were executed and delivered to the decedent during his life time. Dwight v. Newell, 15 111., 333; Wheeler v. Wheeler, 9, Cow., 34. It has been held, however, where the negotiable con- tract was made payable to the executors or administrators, that they must all join in the endorsement or assignment; Smith v. Whiting, 9 Mass. 334. But the better opinion seems to recognize no such distinction and in both cases an endorsement or assign- ment by the one representative is considered as effectual as that of all. Bogert v. Hertell-, 4 Hill, 492; Danielon Negot, Inst. Sec. 266. 132 MC CALL V. TAYLOR. [CHAP. 4, Parties— Agents— Capacity of to Make Negotiable Contracts. — It may be stated as a general rule that whatever a man may do by himself he may do by his agent. Combe's Case 9 Rep. 75. An agency is a mere ministerial office, therefore in- fants, married women, persons attainted, out-lawed, aliens and others, though incapable of contracting on their own account, so as to bind themselves, may become agents. Chitty on Bills, 36. Parties — Agents — Authority of. — Agents may be appointed either verbally or by a writing, or by subsequent ratification. The authority of an agent to transfer commercial contracts may be con- ferred by any one of these methods whether the principal be an in- dividual or a corporation. Trudy v. Farrar, 32 Me. 225; Handy- side v. Cameron, 21 111. 588. No particular form of appointment is necessary to enable an agent to execute and deliver a commercial contract so as to charge his principal. He may be specially ap- pointed for this purpose or may derive his power from some im- plied authority. It has been held that a verbal authority from the principal to his agent to transact all his business confers the power to assign and transfer negotiable paper. The authority of the agent, however, must always depend upon the construction of the words used in his appointment. Bailey v. Rawley, i Swan (Tenn.) 205; Rossiter v. Rossiter, 8 Wend. 494; Ward v. The Bank of Ky. 7 Mon. (Ky.) 93. The authority of an agent will be presumed to continue till due notice of its revocation has been given. The agent, of course cannot delegate his authority unless specially au- thorized so to do. Combe's Case 9 Rep. 75; Breuster v. Hobart, 15 Pick. 302; Lord v. Hall, 9 L. J., C. P., 147; 8 C. B. 627 (65 E. C. L. R.) Parties — Joint Agents. — It is a general rule of the common law, that where an authority is given to two or more persons to do an act, the act is valid to bind the principal only when all of them concur in doing it; for the authority is construed strictly and the power is understood to be joint and not several unless words of severality are used. Story on Agency, Sec. 42; Hartford Fire Ins. Co. V. Wilcox, 57 111. 180; Union Bank v. Beirne, i Grat. 226, 234, 539- Parties — Agents — Signatures of. — It may be stated as a general rule that no one is bound upon a commercial contract who is not expressly a party to it. Therefore, the agent should be very explicit in his signature in order to make his principal liable and not himself. The signature of the agent followed by the word " agent" as follows, A. B., Agent, of C. D. is not sufficient to bind the principal and the agent alone is liable. Such a suffix is deemed to be a mere descriptio persona and does not constitute any no- tice of the agency to the holder or endorsee. Collins v. The Buck- eye Ins. Co., 17 Ohio St. 215; Williams v. Robbins, 16 Gray 77; Kenyon v. Williams, 19 Ind. 45; Bishop v. Rowe, 71 Me. 263; Bartlett v. Tucker, 104 Mass. 338. The following have been held SEC. l8.J MC CALL W. TAYLOR. 133 to be sufficient signatures by the agent to bind the principal: " A. B. by his agent C. D., or A. B. by C. D., or C. D. agent for A. B." Story on Agency, Sec. 274, 278; Long v. Colburne, 11 Mass. 97; Haight V. Naylor, 5 Daily 219. The rule that no person is liable upon a commercial contract unless his name, in some way, is disclosed upon the face thereof has been modified so that when the person signing his name with the word "Agent " added, is, in fact the agent of the principal, and the writing is executed in the course of the business of such agency, the principal is bound. Green v. Skeel, 2 Hun. 486; Larned v. Johnson, 9 Allen 419. Parties — Guardians — Trustees — Power to Make Nego- tiable Contracts. — Guardians and trustees have no power to bind the estate which they represent by commercial contracts. If, there- fore, they execute and deliver commercial contracts in such capacity they will be personally liable even though they sign themselves as "Guardians or Trustees." Dan. on Com. Inst., Sec. 271; Story on Notes, Sec. 63. If a guardian or trustee as such takes a com- mercial contract payable to him or to his order that he may trans- fer the title to the same by endorsement or assignment; but in case of default of payment he of course will be personally liable. Thornton v. Rankin, 19 Mo. 193; Shaw v. Spencer, 100 Mass. 382; Strong V. Straus, 40 Ohio St. 87. Parties — Drunkards — Power to Make Negotiable Con- tracts. — It is a general rule at common law that a contract made by a person in a state of intoxication may be subsequently avoided by him, but if confirmed is binding on him. Anson on Contracts, 150. In order, however, that a drunken person may avoid his contract on account of intoxication it must appear that he did not understand the effect and consequence of his contract. Bush v. Breinig, 113 Pa. St. 310. It has also been held that a party to a contract cannot avoid it on account of intoxication unless another party to it uses means to induce such intoxication. Smith v. Wil- liamson, 30 Pac. R. Parties— Lunatics — Insane Persons — Power to Make Negotiable Contracts. — A contract of a lunatic or an insane person is voidable at his option if it can be shown that at the time of making the contract he was absolutely incapable of under- standing what he was doing and that the other party knew of his condition. Molton v. Camroux, 4 Exch., R. 19; Mutual Life Ins. Co. V. Hunt, 79 N. Y., 541; Dehrens v. McKenzie, 23 Iowa, 333; Wilder v. Weakly, 34 Ind., 181; Shoulters v. Allen, 51 Mich., 530. It has been held, however, that the "fairness of the defendant's conduct cannot supply the plaintiff's want of capacity." Many courts have held that where the insane person receives no benefit whatever under the contract, the contract cannot be enforced against him, and if executed he may recover whatever of value he partedwith, notwithstanding the other party to the contract may have acted in good faith without knowledge of the infirmity. Seavers 134 MC CALL V. TAYLOR. [CHAP. 4, V. Phelps, II Pick., 304; Van Patton v. Beals, 46 Iowa, 63; Wier- bach V. ist. Nat. Bank, 97 Pa. St., 543; Moore v. Hershey, 90 Pa. St., 196; N. W. Mutual Ins. Co. v. Blankenship, 94 Ind., 535. Mere weakness of mind, however, not amounting to imbe- cility or insanity is no ground of defense provided no fraud has been practiced on the party. Dan: on Negot. Inst., Sec. 211; Stewart v. Lispenard, 26 Wend., 299. SEC. 19. J BURSON V. HUNTINGTON. 135 SECTION 19. A NEGOTIABLE CONTRACT MUST BE DELIVERED. BURSON V. HUNTINGTON.i In the Supreme Court, Michigan, Oct. iith, 1870. \_Reported in 21 Mich., 41 j; 4 American Dec, 4^7. J This cause was brought into the Circuit Court for the County of Kalamazoo by appeal from the judgment of a Justice of the Peace, in an action in which Walter S. Hunt- ington was plaintiff, and John W. Burson defendant. Form of the Action. — ^The justice's transcript states that the plaintiff declared verbally on the common count in as- sumpsit and upon a promissory note, which was filed at the time of declaring, and of which the following is a copy, viz. : "Schoolcraft, Mick., Apr. 12th, 1866. ''Ninety days from date, for value received, T promise to pay A . N. Goldwood, or order, one hundred and twelve dollars, and fifty cents, zuith interest. John W. Burson." Indorsed on the back, 'M. N. Goldwood." Form of the Defense. — The defendant filed an affidavit denying the delivery of the note, and also a plea and notice in writing. The defendant, in the affidavit filed, with his plea and notice, deposed "that the written instrument, declared on in this cause by said plaintiff, was never delivered by this defend- ant, to the said A. N. Goldwood, mentioned in said written instrument, nor to any other person for the said A. N. Gold- wood, or 'any other person, and that this defendant never authorized any other person to deliver the written instrument 'This case is cited in Tiedeman on Commercial Paper, 282; Edwards on Commercial Paper, 326, 328, 331, 335; Daniel on Negotiable Instruments, 122, 838; Wood's Byles on Bills and Notes, 254; Norton on Bills and Notes, 70, 250; Bigelow's Cases on B. and N., 227; Bigelow on B. and N., 176, 178, 227; Benja- min's Chalmers on Bills, Notes and Checks, 59, 62. 136 BURSON V. HUNTINGTON. [CHAP. 4, for him, (this defendant), to the said A. N. Goldwood, or to any other person; and defendant further says that this depon- ent never placed any United States internal revenue stamps upon said written instrument, and never authorized any other person to do so for him, or to cancel the same; that said- written instrument was taken from the house of this defend- ant, in this defendant's absence from the same, by the said A. N. Goldwood, without the knowledge or consent of the deponent at the time." On the trial before the justice, the jury found a verdict for the defendant, and the plaintiff appealed. On the part of the defense in the Circuit Court, it was shown that Ellen Burson had been sworn as a witness before the justice, and that she had since died; " That Goldwood came to the house of defendant and told defendant he had come to finish up that matter. They sat down, and Gold- wood wrote this note. Defendant signed it. Goldwood said he wanted security or a signer. Defendant said he would go out and see his uncle. His uncle was at the barn at the time. Defendant laid the note on the table, and told plaintiff not to touch it until he came back. Defendant went out of the house to the barn, and before he returned, Goldwood picked up the note and started out doors with it. She told Goldwood to let the note be on the table until defendant came back. Gold- wood said he was going to take the note, or proposed to have it, or something to that effect, and went off with it. He started towards Kalamazoo. She said there was no stamp on the note at the time Goldwood took it away." The counsel for the defendant then asked the court to charge the jury: 1st. That if they find that A. N. Goldwood, the payee named in the note, took this note after it was drawn and signed by defendant, without the knowledge, and against the will and consent of the defendant, and before the defendant had delivered the note to any person, the note thus obtained would be void in the hands of said Goldwood. 2d. That such note would be void in the hands of any subsequent holder, deriving possession of the same from said Goldwood, whether for value or not. SEC. 19.] BURSON V. HUNTINGTON. 137 3d. If the jury shall find that the plaintiff had notice of the means and manner used by A. N. Goldwood, as above stated, in getting possession of the note at the time he indor- sed and delivered it to the plaintiff, the plaintiff could not be considered an innocent holder of the note. 4th. That whether the plaintiff in this cause had such notice, or not, is a question of fact to be found by the jury from all the testimony in the case. That the fact of the plain- tiff having such notice need not be proved by positive testi- mony, but may be proved by circumstances. 5th. That this note in suit, if drawn and signed by the defendant, and if not afterwards delivered by him or by his authority to some other person, has no legal existence, and is therefore void. And thereupon the Court charged the jury as follows: The present is an action of assumpsit, brought to recover the principal and interest moneys claimed to be due upon a negotiable promissory note. The plaintiff claims to be the holder of said note by purchase. The action is brougnt in the form prescribed by statute. The declaration consists of the common counts, with a copy of the note appended. The de- fendant having failed to deny the execution of the note on oath or by affidavit duly filed, it becomes unnecessary for the plaintiff to prove such execution on the trial of the case. By offering the note in evidence, then proving it to have been in- dorsed and delivered to him, the plaintiff in such case makes out a prima facie case for its recovery. The real questions raised upon this trial are those stated in the defense set up, and had reference almost solely to the doctrine of our commercial law and the rights of the parties interested in negotiable or commercial paper. As between first parties to such paper, as maker, payee, the right of de- fense is generally as ample in range, as the facts which would invalidate the contract or claim; as, for instance, illegality, fraud, want or failure of consideration or any unwarrantable means for obtaining it. A like rule prevails in an action be- tween the maker and a subsequent indorser, or holder, coming into possession or ownership after the note has matured, and become due and payable by its terms. 138 BURSON V. HUNTINGTON. [CHAP. 4, The same rule governs also as between the maker and holder by purchase before maturity and for value, but with no- tice of existing infirmities in the paper, or its surroundings, which would invalidate the same, as, for instance, that the note had been given upon the sale and purchase of intoxica- ting liquor in this state. But when the action is between the maker and bona fide holder for value of negotiable paper, purchased before its ma- turity and without notice that the same is different, such holder is not subject to equities that may exist between first parties. The law commercial protects such holder from the defenses which might be set up, as between the parties. In general terms facts going to impeach or invalidate the paper cannot be resorted to on the defense. The rule itself is one of commercial necessity in order to impart confidence and steady value to this class of papers in commercial and business transactions. The counsel for defendant has presented to the court a series of seven requests to charge the jury, and to which the court will now direct your attention. As to the first request, the court declines to charge as requested, but modifies the request to charge (in this form provisionally) that if a party negligently allows his negotiable note to get into circulation, or if after it has passed from his possession he either acknowl- edged or by silence acquiesced in a claim of its validity, by the holder; to which refusal to charge as requested, and also to said modification of the request, the counsel for defendant excepted. As to the second request, the court declines to charge as requested; to which refusal to charge as requested in said second request, the counsel for defendant excepted. As to the third request, the court charges you as request- ed, with the addition, that if they also find that Goldwood obtained the note by unlawful means of which the plaintiff had notice, then the plaintiff cannot be considered an inno- cent holder of the note. To the charge contained in the addition made by the court to the request, counsel for defend- ant excepted. As to the fourth request, the court charges as requested. SEC. 19.] BURSON V. HUNTINGTON. 135 As to the fifth request, the court charges that such note would be invalid in a suit between the original parties, but in the hands of an innocent holder for value before maturity and without notice, the rule would be subject to the qualifications and limitations already expressed in this charge. To the refusal of the court to charge as stated in this request, and to the charge as given by the court in relation thereto, counsel for defendant excepted. The jury found a verdict for the plaintiff, and judgment being entered thereon, the defendant brings the cause into this court by writ of error. The Claim of the Plaintiff.— That the court erred: 1st. In refusing to charge the jury that, if this note was never delivered by the maker, or some person authorized by him, to any other person, but was fraudulently or stealthily taken from the possession of the maker and in his absence by the payee, the note in the hands of the latter would be void.' 2d. In refusing to charge the jury that such note in the hands of any other person deriving title from such payee would be void whether he gave value for it or not.^ 3d. In refusing to charge the jury that, if they shall find that the note in question upon its face showed, at the time the plaintiff received it of Goldwood, or during the time Goldwood had the note, and plaintiff saw the same, that it was not properly executed and was invalid under the laws of the United States, for the want of a proper stamp, then the plaintiff cannot be considered as a bona fide holder, though he may have given value for the note.^ 4th. In refusing to charge the jury that if the note bears upon its face an illegal stamping by the payee therein named, and did so bear such illegal stamping at the time it was in- dorsed to and obtained by the plaintiff, this fact alone should have been sufficient to put the plaintiff on inquiry as to its 'Story on Bills, §§ 185, 187, 203: i Cow. T. 209; 4 Green. /, 28; 8 Vt, 94. ^3 Caines, 217; 9 Johns, 295; 12 Do., 306. 'Int. R. L., June 30, '64, § 158; 3 Parsons on Cent., 313; Peak, 173; 4 B. and C, 235; 6 D. and R., 306; 3 Camp., 103. 140 BURSON V. HUNTINGTON. [CHAP. 4, validity when he obtained it, and if he failed to do this he cannot be deemed an innocent purchaser for value.' The Claim of Defendant. — The other question, as to the delivery of the note, had been long since settled. A par- tial or total want, or failure, or illegality of consideration, or even fraud or a defect or infirmity of title, in the per- son from whom he received it, is no defense to the title or bar to a recovery by a holder for value without notice before maturity.^ A note is not void in the hands of an indorsee except in the instances where a statute makes it so; and if transferred before due to a bona fide holder, it cannot be shown that it has never been delivered. By making the note, and leaving where |^it is liable to be stolen or otherwise fraudulently put in circulation, he has enabled the fraudulent holder to impose upon the public; and if an innocent person must suffer, it should be that one who, by his acts, has enabled the third person to commit the fraud. ^ Decision. — The defendant below having appeared before the justice and pleaded to the plaintiff's declaration, and twice obtained adjournments of this cause, it was too late, on the trial of the appeal in the circuit, to make any objection for want of proper service of the summons. After joining issue upon the merits, it was immaterial whether there had, in fact, ever been a summons issued. There was no error, therefore, in overruling the defend- ant's objection to the introduction of evidence upon this ground. The note declared upon was filed with the justice at the time of declaring; and by the statute,* the plaintiff was there- fore entitled to read the note in evidence without proving its execution, unless defendant denied its "execution on oath" at the time of pleading. 'Story on Notes, § 197; 12 Johns., 310; 3 Kent Com., 103; 4 Mass., 370; 6 Pick., 258; 14 Pick., 268; i Doug., 413; 4 Hill, 442. 'Story on Bills, § t88; Bostwick v. Dodge, i Doug., 413; Outhwite V. Porter, 13 Mich., 533; Vinton v. Peck, 14 Mich., 287. nVoodhull V. Holmes, 10 Johns. R., 231; Vallet v. Parker, 6 Wend., 615; Rockwell V. Charles, 2 Hill, 499. *Comp. L., § 3767. SEC. 19. J BURSON V. HUNTINGTON. I41 Defendant pleaded the general issue, with a notice that he would prove that the note was obtained from him by fraud and without consideration, and other facts substantially the same as set forth in his affidavit made and filed with the plea and notice. This affidavit simply denied the delivery of the note by the defendant, or any other person on his behalf, to the payee or any other person for him, or that defendant ever placed any stamp upon it or authorized any other person to do so, or to cancel such stamp, and stated that the paper was taken from deponent's house, in his absence from the same, by the payee, without the knowledge or consent of deponent. It is unnecessary to determine here whether the execu- tion of the note under this statute would include its delivery as a part of the execution; since, granting the affirmative, the signature certainly constitutes a part of its execution, and the affidavit being special, — not denying the execution generally, but merely the delivery and the affixing and canceling of the stamp, — admits, by a very clear implication, his signature to the instrument, and clearly indicates that he intends to con- test only the delivery, the stamping and canceling of the stamp, and not his signature; otherwise, he would have de- nied the execution generally and brought himself within the language of the statute. The plaintiff, therefore, was not bound to prove such portion of the execution as was not de- nied, but admitted, viz. : the signature of the defendant. The case upon the trial stood in all respects as if the sig- nature of the defendant had been admitted in open court. And this admission is to have at least as full effect as the clearest proof of such signature. Now proof of such signature, together with the fact that the note is in the hands of, and produced by, the plaintiff (the indorsement being proved as it was here), furnishes strong presumptive evidence of delivery by the maker to the payee; and this is, in fact, all the proof ordinarily given by the plain- tiff of such delivery when the execution of the note is denied. It establishes 2. prima facie case upon this point; and it is for the defendant, if he contests the fact of delivery, to sustain his denial by proof. The indorsement by the payee having been proved, there 142 BURSON V. HUNTINGTON. [CHAP. 4, was, therefore, no error in allowing the note to be read in evidence. We think the court erred in striking out the testimony of the witness, Fletcher, showing what the sister of the defend- ant testified to on the trial of this cause before the justice, she having since died. The ground upon which this was stricken out seems to have been, because the witness did not recollect the precise words of the former testimony, though he stated that he recollected and gave the substance. We think the ob- jection, under such circumstances, untenable, and that the evidence was admissible.' An additional ground of objection was stated, viz. : that plaintiff was shown to be a bona fide holder of the note; but the court could not have stricken out the evidence on this ground, as there was some evidence of cir- cumstances tending to show he was not such bona fide holder, and the court left this question to the jury. But this note was indorsed by Goldwood, the payee, to the plaintiff, before maturity, for a valuable consideration, and, as plaintiff claims, in good faith and without notice of a want of delivery or of consideration, or any other circumstance tending to invalidate it in the hands of Goldwood; and his evi- dence tended to show this, though there was evidence of some circumstances tending to show that he had notice of the cir- cumstances under which the paper had been obtained. There was also evidence on the part of the defendant, strongly tending to show that the note never was delivered by the defendant, but that Goldwood, to whose order it was drawn, was endeavoring to sell to the defendant a patent right, or the right of certain territory under it, and that the parties had so far progressed towards the making of an ar- rangement to this end, that it was understood and verbally agreed that Goldwood was to give him a deed of certain ter- ritory, upon defendant's executing to him a note for the amount, with some other person signing it as surety. That the parties being in the defendant's house, and defendant's sister being present, Goldwood wrote this note, and defendant signed it; but as a surety was to be obtained, he laid the note on the ' See I Greenl. Ev. Sec. 165, and authorities cited. SEC. 19. J BURSON V. HUNTINGTON. 143 table and went out to find his uncle for that purpose, telling Goldwood, as he went out, not to touch it till he came back; but that while defendant was gone, Goldwood picked up the paper and started out doors with it; that defendant's sister then told him to let the note be on the table till defendant should come back, to which Goldwood replied he was going to have the note, and went off with it, without giving any deed of territory or anything else for it. That the note, at this time, was not stamped, and defendant never stamped or authorized it to be stamped; that some four days after, Gold- wood wrote to defendant requesting him to come immediately to Kalamazoo "and sign stamp on the note," and saying if defendant was not there by Tuesday evening "I shall con- sider that you refuse your signature, and shall act accord- ingly." The evidence also tended to show that defendant called upon Goldwood about that time, while the latter had the note, and demanded it, accusing him of stealing it, to which Goldwood replied, " Never mind, we can fix that up," and said he was ready to do as he had agreed, and wanted de- fendant to get another signer, and he would give him a deed of territory; but defendant said he did not want the deed, but wanted the note. Goldwood refused to return the note, or to give a deed till he got another signer. These facts, if found by the jury, would show, not only that, the note was never delivered to the payee, and that it therefore never had a legal existence as a note between the ■original parties, but that there was yet no completed or bind- ing agreement of any kind, and was not to be until defend- ant should choose to get a surety on the note, and the payee should give him a deed of territory. Until thus completed, the defendant had a right to retract. The General Rule as to the Necessity of a Delivery. — As a general rule, a negotiable promissory note, like any other written contract, has no legal inception or valid existence, as such, until it has been delived in accordance with the purpose and intent of the parties.' 'See Edwards on B. and N., 175, and authorities cited, and i Pars, on B. and N., 48 and 49, and cases cited and see Thomas v, Watkins, 16 Wis., 549; Mahon v. Sawyer, 18 Ind., 73; Carter v. 144 BURSON V. HUNTINGTON. [CHAP. 4, Delivery is an essential part of the making or execution of the note, and it takes effect only from delivery (for most purposes); and if this be subsequent to the date, it takes effect from the delivery and not from the date.' This is cer- tainly true as between the original parties. But negotiable paper differs from ordinary written con- tracts in this respect: that even a wrongful holder, between whom and the maker or indorser the note or indorsement would not be valid, may yet transfer to an innocent party, who takes it in good faith, without notice and for value, a good title as against the maker or indorser. And the ques- tion in the present case is, how far this principle will dispense with delivery by the maker. When a note payable to bearer, which has once become operative by delivery, has been lost or stolen from the owner, and has subsequently come to the hands of a bona fide holder for value, the latter may recover against the maker, and all indorsers on the paper when in the hands of the loser; and the loser must sustain the loss.^ In such a case there was a complete legal instrument ; the maker is clearly liable to pay it to some one; and the question is only to whom. But in the case before us, where the note had never been delivered, and therefore had no legal inception or existence as a note, the question is whether he is liable to pay at all, even to an innocent holder for value. The wrongful act of a thief or a trespasser may deprive the holder of his property in a note which has once become a note, or property, by delivery, and may transfer the title to an innocent purchaser for value. But a note in the hands of McClintock, 29 Mo., 464; Walker v. Ebert, 29 Wis., 94; Hills- dale College V. Thomas, 40 Wis., 6,1; Purviance v. Jones, 120 Ind., 162; Worth v. Case, 42 N. Y., 362; Contra, see Kinyon v. Wohlford, 17 Minn., 239; Shipley v. Carrol, 45 111., 285 (stolen note); Gould v. Seger, 5 Duer. (N. Y.), 268; Cooke v. U. S., 91 U. S., 389. ' I Pars., ubi supra. ^In the case of Burson v. Huntington, however, the note had never as yet received any vitality as a contract, for the reason that all the requisites necessary to give it an existence had not yet been complied with. SEC. 19. J BURSON V. HUNTINGTON. I45 the maker before delivery is not property, nor the subject of ownership, as such; it is, in law, but a blank piece of paper. Can the theft or wrongful seizure of this paper create a valid contract on the part of the maker against his will, where none existed before ? There is no principle of the law of contracts upon which this can be done, unless the facts of the case are such that, in justice and fairness, as between the maker and the innocent holder, the maker ought to be estopped to deny the making and delivery of the note. But it is urged that this case falls within the general principle which has become a maxim of law, that when one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss, must sustain it. This is a principle of manifest justice when con- fined within its proper limits. But the principle as a rule, has many exceptions; and the point of difficulty in its appli- cation consists in determining what acts or conduct of the party sought to be charged, can properly be said to have "enabled the third person to occasion the loss, " within the meaning of the rule. If I leave my horse in the stable, or in the pasture, I cannot properly be said to have enabled the thief to steal him, within the meaning of this rule, because he found it possible to steal him from that particular locality- And upon examination it will be found that this rule or max- im is mainly confined to cases where the party who is made to suffer the loss, has reposed a confidence in the third person whose acts have occasioned the loss, or in some other intermediate person whose acts or negligence have enabled such third person to occasion the loss; and that the party has been held responsible for the acts of those in whom he had trusted upon grounds analogous to those which govern the relation of principal and agent; that the party thus repos- ing confidence in another with respect to transactions, by which the rights of others may be affected, has, as to the persons to be thus affected, constituted the third person his agent in some sense, and having held him out as such, or trusted him with papers or indicia of ownership which have enabled him to appear to others as principal, as owner, or as possessed of certain powers, the person reposing this confi- 146 BURSON V. HUNTINGTON. [CHAP. 4,. dence is, as to those who have been deceived into parting^ with property or incurring obHgations on the faith of such appearances, to be held to the same extent as if the fact had accorded with such appearances. Hence, to confine ourselves to the question of delivery, the authorities in reference to lost or stolen notes which have become operative by delivery, have no bearing upon the ques- tion. If the maker or indorser, before delivery to the payee, leaves the note in the hands of a third person as an escrow, to be delivered upon certain conditions only, or voluntarily de- liver it to the payee, or (if payable to bearer) to any other person for a special purpose only, as to be taken to, or dis- counted by a particular bank, or to be carried to any particu- lar place or person, or to be used only in a certain way, or upon certain conditions not apparent upon the face of the paper, and the person to whom it is thus entrusted violate the confidence reposed in him, and put the note into circulation; this, thotigh not a valid delivery as to the original parties, must, as between a bona fide holder for value, and the maker or indorser, be treated as a delivery, rendering the note or indorsement valid in the hands of such bona fide holder ; or if the note be sent bj- mail, and get into the wrong hands; as the party intended to deliver to some one, and selects his own mode of delivery, he must be responsible for the result. These principles are too well settled to call for the citation of authorities, and manifestly it will make no difference in this respect, if the note or indorsement were signed in blank, if the maker or indorser part with the possession, or authorize a clerk or agent to do so, and it is done.' And when the maker or indorser has himself been de- ceived by the fraudulent acts or representations of the payee or others, and thereby induced to deliver or part with the note or indorsement, and the same is thus fraudulently ob- tained from him, he must, doubtless, as between him and an innocent holder for value, bear the consequences of his own '1 Parsons on Bills and Notes, 109 to 114, and cases cited, especially Putnam v. Sullivan, 4 Mass., 45, which was decided expressly upon the ground of the confidence reposed in the third person, as to the filling up, and in the clerks as to the delivery. SEC. 19. J BURSON V. HUNTINGTON. 147- credulity and want of caution. He has placed a confidence in another, and by putting the papers into his hands, has enabled him to appear as the owner, and to deceive others. Cases of this kind are numerous; but they have no bearing upon the wrongful taking from the maker, when he never vol- untarily parted with the instrument. Much confusion, how- ever, has arisen from the general language used in the books and sometimes by judges, in reference to cases where the maker has voluntarily parted with the possession, though induced to do so by fraud; when it is laid down as a general rule, that it is no defense for a maker, as against a bona fide- holder, to show that the note was wrongfully or fraudulently obtained, without attempting to distinguish between cases where the maker has actually and voluntarily parted with the possession of the note, and those where he has not. We do not assert that the general rule we are discussing — that "where one of two innocent parties must suffer," etc. — must be confined exclusively to cases where a confidence has- been placed in some other person (in reference to delivery), and abused. There may be cases where the culpable negli- gence or recklessness of the maker in allowing an undelivered note to get into circulation, might justly estop him from set- ting up non-delivery; as if he were knowingly to throw it into the street, or otherwise leave it accessible to the public, with no person present to guard against its abduction under circumstances when he might reasonably apprehend that it would be likely to be taken. Upon this principle the case of Ingham v. Primrose' was decided, where the acceptor tore the bill into halves (with the intention of canceling it) and threw it into the street, and the drawer picked them up in his presence, and afterwards pasted the two pieces together and put them into circulation.'^ ^7 C. B. (N. S.)., 82. ^See also by analogy Foster v. Mackinnon, Law Rep. 4 Com. B., 704. See also the cases where the execution and delivery were obtained through fraud and misrepresentation, Chapman v. Rose, 56 N. Y., 137; Page v. Krekey, 137 N. Y., 313; Clark v. Pease, 41: N. H., 414; Walker v. Ebert, 29 Wis., 194; De Camp v. Hanna,. 29 Ohio St., 467; Green v. Wilkie, 66 N. W. Rep., ^046; Puffer v. Smith, 22 Mich., 479. 148 BURSON V. HUNTINGTON. [CHAP. 4, But the case before us is one of a very different charac- ter. No actual delivery by the maker to anyone for any pur- pose. The evidence tends to show that when he left the room in his own house, the note being on the table, and his sister remaining there, he did not confide it to the custody of the payee, but told him not to take it, and no final agreement be- tween them had yet been made, and no consideration given. Under such circumstances he can no more be said to have trusted it to the payee's custody or confidence, than that he trusted his spoons or other household goods to his custody or confidence; and there was no more apparent reason to sup- pose he would take and carry off the one, than the other. The maker, therefore, cannot be held responsible for any negligence; there was nothing to prove negligence, unless he was bound to suspect, and treat as a knave, a thief or a crim- inal, the man who came to his house apparently on business, because he afterwards proved himself to be- such. This, we think, would be preposterous. We therefore, see no ground upon which the defendant could be held liable on a note thus obtained, even to a bo7ia fide holder for value. He was guilty of no more negligence than the plaintiff who took the paper, and the plaintiff shows no rights or equities superior to those of the defendant. Such, we think, must be the result upon principle. We have carefully examined the cases, English and American, and are satisfied there is no adjudged case in the English courts, so far as their reports have reached us, which would warrant a recovery in the present case. Some dicta may be found, the general language of which might sustain the liability of the maker; such as that of Alderson Baron in Marston v. Al- len,' cited by Duer. J., in Gould v. Segee,^ and that used by Williams J., in Ingham v. Primrose.'' But a reference to the cases will show that no such question was involved, and that these remarks were wholly outside of the case. '8 M. and W., 494. ^'S Duer. (N. Y. ), 260. "7 C. B. (N. S.), 82. S^C- '9j BURSON V. HUNTINGTON. I4Q On the Other hand, Hall v. Wilson,' contains a dictum fully sustaining the views we have taken. There are, however, two recent American cases, where the note or indorsement was obtained without delivery, under circumstances quite as wrongful as those in the present case, in one of which the maker, and in the other the indorser, was held liable to a bona fide holder for value: Shipley v. Carroll, et. al.,' (case of maker) and Gould v. Segee.' But in neither of these cases can we discover that the court discussed or con- sidered the real principle involved; and we have been unable to discover anything in the cases cited by the court to warrant the decision. It is possible that the case in Illinois may de- pend somewhat upon their statute, and the note being made as a mere matter of amusement, and the making not being justified by any legitimate pending business, the maker might perhaps justly be held responsible for a higher degree of diH- gence, and therefore more justly chargeable with negligence under the particular circumstances, than the maker in the present case. There is another case, Worcester Co. Bank v. Dorchester & Milton Bank,* where bank bills were stolen from the vault of the bank, which though signed and ready for use, had never been yet issued, and on which a bona fide holder for value was held entitled to recover. This, we are inclined to think, was correct. The court intimated a doubt whether the same rule should apply to bank bills as to ordinary promissory notes, and as to the latter, failed to make any distinction between the question of delivery and questions affecting the rights of the parties upon notes which have become effectual by deliv- ery. But we think bank bills which circulate universally as cash, passing from hand to hand perhaps a hundred times a day, without such inquiries as are usual in the cases of ordin- ary promissory notes of individuals, stand upon quite different grounds. And, considering the temptations to burglars and robbers, where large masses of bank bills are known to be ' 16 Barb., 548, 555. and 556. ^45 111-, 285. '5 Duer. (N. Y.), 266. *io Cush., 488. 15° BURSON V. HUNTINGTON. [CHAP. 4, kept, and the much greater facihty of passing them off to in- nocent parties, without detection or identification of the bills or the parties, and that the special business of banks is deal- ing in, and holding the custody of money and bank bills; it is not unreasonable to hold them to a much higher degree of Delivery Defined. — " Delivery, " says Mr. Daniel, "is the final step necessary to perfect the existence of any written con- tract; and, therefore, as long as a bill or note remains in the hands of the drawer or maker it is a nullity. And even though it be placed by the drawer or maker in the hands of his agent for de- livery, it is still undelivered as long as it remains in his hands, and may be recalled." Dan. on Negot. Inst., Sec. 63. Kinds of Delivery. — The delivery may be actual or con- structive; but it is essential to the validity of a commercial contract that it be delivered. Palmer v. Poor, 121 Ind., 138; McFarland V. Sikes, 54 Conn., 250. The mere act of signing a commercial contract, without deliv- ering it, does not make it the contract of the signer. Burrage v. Lloyd, I Exch. R., 32; Brind v. Hampston, i M. & W,, 365; Hill V. Wilson, 16 Barb., 548; Mahon v. Sawyer, 18 Ind., 73. No particular form of delivery, however, is required. Whether there was a delivery or not, must in a great measure depend upon the peculiar circumstances of each case. The question of deliv- ery is one of intention. The delivery is complete when there is an intention manifested on the part of the maker of the contract to make himself liable thereon. The intention always controls the determination of what constitutes a sufficient delivery. The inten- tion may be manifested by words or acts and in the most informal manner. The act of delivery is not necessarily a transfer of the possession of the instrument to the payee. It is any act of the maker, indicated by acts or words or both, which shows an inten- tion on his part to perfect the transaction. It may be to the maker or to some third person for his use and benefit. Thatcher v. St. Andrews Church, 37 Mich., 269; Woodward v. Campbell, 22 Conn., 459; Martin v. Flaharty, 13 Mont., 96; 32 Pac. R., 287; Hathaway v. Payne, 34 N, Y., 92; Newton v. Bealer, 41 Iowa, 334; Shults V. Shults, 158 111., 654, The delivery may be, upon condition, to an agent or in escrow. Delivery— Sufficiency of.— While delivery, either actual or constructive, is essential to the validity of commercial contracts, yet it need not pass into the personal possession of the payee. If dehvery is made to a person for the benefit of the payee uncondi- tionally, such delivery is sufficient. Gordon v. Adam, 127 111., 223. It must appear by the act of the party that he intended to make the contract an enforcible obligation against himself accord- ing to its terms by surrendering control over it, and intentionally place it under the control of the payee or of some third person SEC. 19. J BURSON V. HUNTINGTON. 15 I care, and to make them absolutely responsible for their safe keeping. "We do not therefore regard this case as having any material bearing upon the case before us. for his use. Purviance v. Jones, 120 Ind., 162; Webber v. Chris- ten, 121 111., 91; Stone V. French, 37 Kang., 145. Delivery — Conditional. — A commercial contract may be delivered upon condition. And the maker will not be liable to the original parties or to those who take with notice of the condition, unless such conditions happen. If, however, the contract comes into the hands of a bona fide holder, he will be liable thereon whether the condition happens or not. Fisher v. Fisher, 98 Mass., 303; Whitmore v. Nickerson, 125 Mass., 496; Oilman v. New Orleans &, 72 Ala., 566. Where one signs a commercial contract upon the express con- dition that it shall be signed by others before delivery, he is not bound thereby unless such signatures are procured. German- American Nat. Bk. V. People's Gas & E. Co. (Minn. ), (1895), 65 N. W. R., 90; Ward v. Johnson, 57 Minn., 301; McCormick Har- vesting Mach. Co. v. Faulkner, 64 N. AV. R., 163; Ware v. Allen, 128 U. S., S90. Whether a commercial contract has ever been delivered or not upon a condition may always be proved in order to avoid its effect as between the original parties. Roberts v. McGrath, 38 Wis., 52; Cline v. Guthrie, 42 Ind., 227. If, however, the contract has actually been delivered and is complete upon its face and has been obtained without fraud, evi- dence of an oral agreement between the parties to it will not be received to contradict the obligation of the maker as stated in it. Chicago Cottage Organ Co. v. Swartzell, 60 Mo. App., 490; Hass- mann v. Holscher, 49 Mo., 87. If the condition imposed upon the delivery is meaning- less when read in connection with the rest of the note, it will have no effect. Cooper v. Chicago Cottage Organ Co., 58 111. App., 248. Delivery — When Made. — The delivery of a commercial contract must be made during the life-time of the maker; it fol- lows, therefore, that no delivery can be made after the death of the maker, by his executor or administrator. Clark v. Sigourney, 17 Conn., 511; Clark v. Boyd, 2 Ohio, 35. Neither can it be delivered by the maker's agent after death, as death revokes the agency. Turnan v. Temke, 84 111., 286; Bar- rows v. Barrows, 138 III, 654. If there be an unconditional delivery to a third per- son who holds as the agent of the payee, until after the death, of the maker it is a good delivery. The maker thereby lost con- trol of the note. Thompson v. Candor, 60 111., 244; Gordon v.. Adams, 127 111., 223. IS 2 BURSON Zl. HUNTINGTON. [CHAP. 4, We think the Circuit Court erred in refusing to charge upon this point, as requested by the defendant below. We do not think there was any error in refusing to charge that the want of a stamp on a note would be such circum- In every case where if a party places his commercial con- tract beyond his control he will be liable thereon without refer- ence to conditions imposed if it gets into the hands of a 3ena fide holder for value. Collins v. Gilbert, 94 U. S. &, 53; Redlich v. Dall, 54 N. Y., 234; Clarke V. Thayer, 105 Mass., 216; Kohn v. Watkins, 26 Kan., 691; 40 Am. R., 336. It has been held that where the maker is induced by false and fradulent representations to execute and deliver a commercial con- tract to a fictitious person or order, supposing him to be real, and delivers the same with instructions to deliver it to the payee on receiving a mortgage security, and the fraudulent receiver nego- tiates the bill to an innocent person, the maker is liable, Phillips V. ImThurn, 114 E. C. L. R., 694; Forbes v. Epsy, 21 Ohio St., 474; Kohn v. Watkins, supra. Delivery may be Compelled. — Where the payee has been induced to part with consideration or to advance money on the faith that a commercial contract has been delivered to a third per- son for his benefit, he is entitled to compel the delivery to be per- fected. Purviance v. Jones, 120 Ind., 162; t6 Am. St. R., 319. Delivery— Presumption as to the Time of. —In the ab- sence of any proof to the contrary, there is a presumption of law that a commercial contract was delivered on the day it was exe- cuted. Morgan v. Burrow, 16 So. R., 432. This presumption, however, may be rebutted by parol evi- dence showing that the contract was actually delivered on some other day. Lovejoy v. Whipple, 18 Vt., 379. Where, however, the contract is made payable at a certain time after date, the fact that it was not delivered at the time of its date will not be allowed to vary the time of maturity. Powell v. Watters, 8 Cow., 669; Tied, on Commercial Paper, sec. 34b. Delivery in Escrow.— Commercial contracts, like other contracts, may be delivered in escrow, which is a delivery to some third person to be delivered to the payee finally upon the perform- ance of some condition or conditions, when the title is to pass to the person for whom it is intended. A delivery in escrow to be good, the maker of the contract must part with the possession and divest himself of all power and dominion over it. Preutsman v. Baker, 30 Wis., 644; Lehigh Coal & Iron Co. v. West Superior Iron & Steel Co., 91 Wis., 122; Shults V. Shults, 159 111., 654; see also 37 Am. St. R., 259; 83 Am. Dec, 246; 6 L. R. A., 470; 7 L. R. A., 746; 11 Am. St. R., 313. In order that a writing may be in escrow, it must be placed in the hands of a third person to be delivered upon the happening of SEC. 19. j BURSON V. HUNTINGTON. 153 stance of suspicion as to put the indorsee upon inquiry in tak- ing the note. Under our decisions the note would be vaUd and could be enforced in our courts without a stamp. Some other minor questions were raised, but we do not think they will be likely to arise upon a new trial. a contingency. It must not be delivered into the hands of the payee. Webber v. Christen, 121 111., 91; Wright v. Shelby &, 16 B. mon., 4; Scott v. State Bank, 9 Ark., 36. If the contract is delivered to the payee, the delivery will be absolute notwithstanding conditions were imposed and the title passes to the payee. Fairbanks v. Metcalf, 8 Mass., 230; Jane v. Gregory, 42 111., 416. The maker will be liable thereon should the contract reach the hands of an innocent dona fide holder without the happening of the condition on which it was delivered. Vallett V. Parker, 6 Wend., 616; Fearing v. Clark, 16 Gray, 74; Graff v. Logue, 61 Iowa, 704. The delivery in escrow may be made to the payee if the con- dition is placed upon its face, and the maker thereof will not be liable thereon until the happening of such condition, even in the hands of a third person. Some cases have held, however, that where a contract was delivered in escrow and the custodian, with- out authority, delivers the same to the payee before the perform- ance of the conditions, that the maker is not liable thereon even to a bona fide holder. Chipman v. Tucker, 38 Wis., 43; Skaaraas v. Finnegan, 31 Minn., 48; Benton v. Martin, 52 N. Y., 574; Belle- ville Bank v. Borneman, 124 111., 205; Roberts v. Wood, 38 Wis., 60. Where one signs a negotiable contract upon condition that certain other persons shall sign it also and delivers it to the payee, he is not liable thereon unless such other signatures are procured unless the same shall get into the hands of a bona fide holder. German- American Nat. Bk. v. Peoples Gas & Co., 65 N. W. R. 90; Ward V. Johnson, 37 Minn., 30T. McCormick Harvesting Mach. Co. V. Faulkner, 64 N. W. R., 163. It has been held that a bona fide holder for value, without no- tice, is entitled to recover upon any commercial contract which he has received before it has become due, notwithstanding any defect or infirmative in the title of the person from whom he derived it; as, for example, even though such person may have acquired it by fraud or even by theft or by robbery. Kinyon v. Wohlford, 17 Minn., 239; Story on Promissory Notes, sec. 191; Goodman v. Simons, 20 How., 365; Wheeler v. Guild, 20 Pick., S45; Foy v. Blackstone, 31 111., 538. It is a general rule that the maker of a commercial contract which has not been delivered, is not liable thereon. If, however, through his negligence the contract gets into circulation and reaches the hands of a bona fide holder, he is liable upon the well 154 BURSON V. HUNTINGTON. [CHAP. 4, The judgment must be reversed with costs, and a new trial awarded. The other justices concurred. settled principle that where one of two innocent persons must suf- fer, the loss should fall upon him who put it in the power of the third person to cause such loss. Delivery on Sundays. — In the absence of a statutory pro- vision to the contrary, commercial contracts may be executed and delivered on Sunday. There was no rule at common law for- bidding it. O'Rourke v. O'Rourke, 43 Mich., 58; State Capital Bank v. Thompson, 42 N. H., 369; Mackalley's case, 9 Coke, 66b. In many of the states there are statutes which make contracts executed and delivered on Sunday void as between the original parties, but they are valid in the hands of bona fide holders. Stev- ens V. Wood, 127 Mass., 123; Sayre v. Wheeler, 31 Iowa, 112. If the note is executed on Sunday but not delivered until a week day it will be valid, ^^inton v. Peck, 14 Mich., 287; Conrad V. Kinzie, 105 Ind., 2S7; Hilton v. Houghton, 35 Me., 143. The maker may ratify a contract executed and delivered on Sunday. King v. Fleming, 72 111., 21. Parol evidence is admissible to show that the note was actu- ally delivered on a different day from its date. King v. Fleming, supra. The rule which controls in the execution and delivery of com- mercial contracts on Sundays applies also to contracts of endorse- ments. State Capital Bank v. Thompson, 42 N. H., 370. SEC. 20. J STOESSIGER V. SOUTHEASTERN RY. CO. 155 SECTION 20. A NEGOTIABLE CONTRACT MUST BE SIGNED. STOESSIGER v. THE SOUTHEASTERN RY. CO.' In the Court of Queen's Bench, Easter Term, April 21, 1854. {^Reported in 3 Ellis Ssf Blackburn {Q. £.), 5^9/ (77 £„g. Com. Law, 548); 23 Law Jr. Rep. {N. S.) {Com. Law), 2p3.] The Form of Action.— The declaration stated that de- fendants were proprietors of a railway, to wit, a railway from Strood in Kent to London, and were common carriers of goods and chattels for hire: and plaintiff caused to be deliv- ered to defendants, as such common carriers, a certain parcel and divers goods and chattels of plaintiff contained therein, to wit, certain papers and documents of small value, and the sum of 9/. io.f. in cash, to be safely and securely carried and conveyed for plaintiff by defendants from Strood upon the said railway, and upon and by other railways and convey- ances, and to be caused by defendants to be safely and secure- ly delivered for plaintiff to the consignee of the said parcel, to wit, one Gideon Goold, at a certain other place, to wit, Birmingham, for certain reasonable reward: yet defendants, not regarding their duty as such common carriers, but con- triving, etc., did not nor would safely or securely carry, etc., the parcel to Birmingham, nor there cause the same to be safely and securely delivered for plaintiff to the consignee, but, being such carriers, so carelessly and negligently con- ducted themselves in the premises that, by and through the carelessness, negligence, and improper conduct of defendants in that behalf, the said parcel was opened after the same had been delivered to defendants as aforesaid, and before the same was delivered to the consignee: and the said sum of gl. lOs. in cash, being part of the contents of the said parcel, was abstracted therefrom by some person or persons whose names or name are to plaintiff unknown: and the parcel and part 'This case is cited in Norton on Bills and Notes, 60; Daniel on Negotiable Instruments, 92; Tiedeman on Commercial Paper, 11; Randolph on Commercial Paper, 62, 290; Wood's Byles on Bills and Notes, 156. 156 STOESSIGER V. SOUTHEASTERN RY. CO. [CHAP. 4, only of the said goods and chattels contained therein, to wit, the said papers and documents of small value, were delivered to said consignee; and the residue of the goods and chattels contained in the parcel, to wit, the said sum of 9/. lOs. in cash, was never delivered to the consignee: whereby the said sum of 9/. lOf. was not safely or securely carried or conveyed, or caused to be delivered as aforesaid, but became and is wholly lost to plaintiff. Form of Defense. — That the said parcel, at the time of the said delivery thereof to and receipt by defendants of the same, contained property of a certain description, to wit, money and current coin of the realm, and a bill of exchange for the payment of money; and the value of the same ex- ceeded the sum of 10/.: and that the said parcel, with its said contents, was delivered to defendants, as common carri- ers of goods by land, to be by them conveyed and carried as in the declaration mentioned at a certain office or receiving- house of defendants for the receipt of goods to be carried by them, as such carriers as aforesaid. That, before and at the time when the said parcel with its said contents were so deliv- ered at the said office or receiving-house, defendants had caused to be affixed, and there was then affixed, according to the form of the statute in such case made and provided, in legible letters or characters, in a public and conspicuous part of the said office or receiving-house, a notice stating that a certain increased rate of charge therein mentioned was re- quired to be paid, over and above the ordinary rate of car- riage, for the safe conveyance of certain articles in the said notice mentioned; and among which money and bills of ex- change were included and stated. That the nature and value of the said contents of the said parcel were not declared by plaintiff or by the person who sent or delivered the said par- cel and its contents at the said office or receiving-house; nor was the said increased charge, nor any engagement to pay the same, accepted by the person receiving the same at the said office or receiving-house. Replication. — That the value of the said parcel, and its contents, did not exceed the sum of 10/. On the trial the following facts appeared: The plaintiff SEC. 20.] STOESSIGER V. SOUTHEASTERN RY. CO. 157 was a commercial traveller in the employment of Gideon Goold, named in the declaration, who resided at Birmingham. A person named Cruttenden, residing at Chatham, being in- debted to Goold to the amount of ii/. los. gave to the plaintiff at Chatham, to be by him transmitted to Goold, an instrument of which the following is a copy: " £11 : 10: o. "Birmingham, Sept., 18^2. ' ' Three months after date pay to my order the sum of eleven pounds and los., value received. [Across the face of this instrument was written " Accep- ted payable at Bank. G. Cruttenden. "] Goold was to complete this instrument, which was stamped with a two shilling bill stamp, by signing his own name as drawer. The plaintiff had no authority to draw or accept bills for Goold. He accordingly enclosed the docu- ment, together with gold and silver to the amount of 9/. loj. , on account of a private debt of his own to Goold, in a parcel, which he directed to Goold at Birmingham,.and delivered to defendants, at their station at Strood, to be carried; and which they received for that purpose. There was affixed, in a con- spicuous part of the office where the parcel was received, a notice, requiring an increased rate of charge, according to Stat. 1 1 G. 4 and i W. 4 c. 68, ss. i and 2, for the articles specified in sect. i. No notice of the value or contents of the parcel was given, nor any increased rate paid or agreed for. The cash was abstracted from the parcel, by some means which did not appear, before it reached Goold: the remainder of the contents came safely to hand. Claim of Defendant. — On this evidence, the counsel for the defendants contended that the parcel contained, within the meaning of the Carriers' Act, stat. 1 1 G. 4 & i W. 4 c. 68, s. I, gold or silver coin of the realm, and a bill, note, or security for payment of money, or writing, the value of the whole ex- ceeding 10/., and that, no notice of the value or contents hav- ing been given, or increased rate paid or contracted for, the defendants were not liable for the loss. Claim of Plaintiff. — The plaintiff's counsel contended that the document, being incomplete, was of no value as a 158 STOESSIGER V. SOUTHEASTERN RY. CO. [CHAP. 4, security or writing, and that therefore the parcel contained no articles, within the meaning of the statute, of the value of more than 9/. io.y. The learned Judge directed a verdict for the plaintiff for 9/. io.y. , reserving leave to move to enter the verdict for the defendant if the skeleton bill was an article within the Car- riers' act, and was of such a value as to make together with 9/. los. more than 10/. It was agreed that the jury were to be taken as finding, so far as it was a question for them, that the writing was of no value. The question is, whether this document was of any value as a bill or note, security or writing, within the meaning of the statute. It was not a bill of exchange; for there was no drawer. Nor was it a promissory note. In Petro v. Rey- nolds, 9 Exch. , 410, a person drew a bill of exchange without any direction; and another person accepted it in defendant's name, professing to do so as agent for defendant. The Court appeared disposed to consider that this was not a bill of ex- change, though, if the defendant ratified the promise to pay, it might be treated as his promissory note. But there the document, whether a bill or promissory note, was a promise by a person named, to pay to the order of another named: here Goold has not become a party in any way; nor is he named. There is neither drawer nor payee. The only name on the document is that of Cruttenden; and he does not en- gage to pay, except to the order of a person not named, and who has in fact made no order. Cruttenden can not have meant to pay the bearer generally. Nor does it fall under the head of "securities for payment of money." In Rex v. Hart,' a person signed a blank acceptance on a paper which had a six shilling stamp: it was afterwards taken away and filled up as a bill of exchange for 500/. Littledale, J. , Hol- land, B., and Bosanquet, J., held that this, at the time of such taking, was not a " bill, note, warrant, order, or other security whatsoever for money or for payment of money," within Stat. 7 & 8 G. , 4, c. 29, s. 5. Littledale, J., said that the instrument was " only in a sort of embryo state." [Ld. Campbell, C. J. — It is more like an authority for making a ' 6 C. & P., 106 (E. C. L. R., vol. 25). SEC. 20.] STOESSIGER V. SOUTHEASTERN RY. CO. 159 security than an actual security.] Further, if it is contended that this was a writing of the value of ill. los., the answer is that the value which is to bring the case within the statute must be a value existing at the time of the delivery to the carrier. But, as no one had the authority to complete the instrument besides Goold, the paper could never acquire any value till it reached Goold's hands, that is, till the duty of the carrier was over. The value at the time of the deliv- ery, was merely that of the paper; no value derived from the writing on it existed at that time. The supposed value is in the piece of paper plus the authority to do something to it which has not been done here. The piece of paper was sent by the carrier; the authority could not be sent: and neither of these elements apart from the other is sufficient to make the instrument of value. A similar reasoning was pursued in Rex V. Clark.' There are many oases in which a party to an incomplete instrument becomes liable upon the completion; Schultz V. Astley^ is an instance, and represents a class of cases. But the liability never arises, and consequently the value of the instrument never is created, unless the comple- tion is by an authorized party. Suppose this instrument to have been lost, no one except by means of forgery, or at least of some fraud, like that in Reginav. White,' could make it valuable. If Goold had died during the transit, could his executors have completed the instrument ? They could not. Whose name could "they sign .? If the carrier had lost the paper, could Goold have recovered the sum named in it by an action for damages against the carrier > He could not. And this shows that the object of the statute does not require the interpretation for which the defendants must contend; because, if the instrument be worthless, the carrier requires no protec- tion from the consequences of its loss. Decision.— Ld. Campbell, C. J. — I am of opinion that this rule ought to be discharged. The case of the defendants is clearly .untenable unless this paper can be brought within Sect. I of the Carriers' Act, ii G. 4 & i W. 4, c. 68. It 'Russ & R., 181. ''2 New Ca., 544. 'i Den. Cr. C., 208. l6o STOESSIGER V. SOUTHEASTERN RY. CO. [CHAP. 4, must be shown to be a bill, order, note, or security for pay- ment of money, or writing, of such value as to make up, with the 9/. loj-., more than lo/. It is not a bill of exchange; there is neither drawer nor payee. Nor is it a promissory note to pay any one who might happen to be the bearer; that Cruttenden should become hable generally to the bearer was quite contrary to his intention. Nor is it a security for money; for we must look at the time of the delivery to the carrier; and at that time nothing could be claimed on it. I think it is a writing; it would be very difficult to define a writing so as not to include this paper. Then the question is as to the value. If this writing possesses any value beyond that of the paper material, that value must be \\l. lOs. Now can it be What Constitutes a Signature — \A^ho are Liable upon Negotiable Paper. — It is necessary to the validity of all these commercial contracts that the name of the party who is liable thereon should appear upon the face of the instrument. No per- son is liable as a party to a commercial contract whose signature does not appear upon it. It does not matter upon what portion of the instrument the name of the person who is to become liable thereon appears, so long as it was added with the intention to be- come liable. It is usual to place the signature at the lower right hand corner. This is not important, however. The name need not necessarily appear if it be indicated who the party is. The full name should be given; but this is not necessary absolutely — the initials simply will be sufficient. And it has been held that any mark which the party uses to indicate the intention to bind himself will be as effectual as his name. So also a note which reads "I, A. B., promise to pay, etc.," is as good a commercial contract as if the note read "I promise to pay, etc.," subscribed by "A. B." Brown v. Butcher's Bank, 6 Hill, 443, where the fig- ures " I, 2, 8," were held to take the place of the signature of the parties. Taylor v. Dabbins, i Strange, 399, where it is held that "I, A. B.," will take the place of a signature if the contract is written by A. B. himself. Sanders v. Anderson, 21 Mo., 402, where it was held that a note signed "Steam Boat Ben Lee and owners" was a sufficient signature to bind the owners of the boat. Where the note is signed by some mark or initials simply, which the party uses to indicate his intention to bind himself, it should be witnessed. This is not absolutely necessary, however. Shank v. Butsch, 28 Ind., 19; Willoughby v. Moulton, 47 N. H., 205; Hilborn v. Alford, 22 Cal., 4S2; Flowers v. Billing, 45 Ala., 488. It frequently happens that a person carries on a business under an assumed or fictitious name in which case he will be liable SEC. 20.] STOESSIGER V. SOUTHEASTERN RY. CO. l6l said that the writing bore that value at the time of its deliv- ery to the carrier.' I do not see that it was of intrinsic value to any person. It empowered a particular individual to claim to that amount, by putting his name to it; but that had not been in fact done by the individual, Goold. I cannot agree that the executors of Goold could have made it valuable by putting to it his name, or their own, or any name whatever. Nor could any one have bestowed value on it, who, not being contemplated by Cruttenden, had found it. It is therefore in accordance with all the authorities, to hold that this writing was of no value at the time of delivery to the carrier. Wightman, J. — The question is whether that which be- yond all doubt was a writing was, at the time of its delivery to upon commercial contracts executed and dehvered in that name. Bartlett V. Tucker, 104 Mass., 336; Lockwood v. Coley, 22 Fed. Rep., 192. By Whom Made. — The signature, however, need not be made by the party himself provided it is made by some one hav- ing authority. Woodbury v. Woodbury, 47 N. H., 11. The authority to execute and deliver commercial contracts for another may be either express or implied. Right, etc., v. First Nat. Bk., 42 Mich., 461. Form of the Signature — It May be Written or Printed. — The signature may be written or printed; it may be in ink or in pencil. Pennington v. Baehr, 48 Cal. , 565; Brown v. Butcher's Bank, 6 Hill, 443; Geary v. Physic, 5 Barn. & Cress., 234; Reed v. Rorak, 14 Tex., 329. When the signature is printed the holder must show that that particular signature has been adopted by the maker of the coutract. Brown v. Butcher's, supra; Pennington v. Baehr, 48 Cal., 565. Signature by Two or More Persons — Nature of Their Liability. — Of course two or more persons may join in the execu- tion and delivery of commercial contracts, in which case their liability will be joint or joint and several depending altogether upon the language used in the contract. If two or more persons are named in the contract who are liable the presumption is that their liability is joint unless words of severance are used. John- son v. King, 20 Ala., 270. If the contract reads " we promise " and signed by two or more persons their liability is joint; but if the contract reads "I promise, etc.," signed by two or more per- sons, their liability is joint and several, and they may be sued jointly or severally. Maiden v. Webster, 30 Ind., 317; Bill v. White, 52 Wis., 169. If the note reads "We or either of us promise to pay," it will be joint and several. First Nat. Bk. v. Fowler, 36 Ohio St., 524. l62 STOESSIGER V. SOUTHEASTERN RY. CO. [CHAP. 4, the carrier, of a value exceeding lo/. The fallacy of the ar- gument lies in attempting to make the power of conferring the value at the end of the destined carriage the criterion of the value at the time of the delivery. I think the rule should be discharged. Erie, J. — I am of the same opinion. This being an im- perfect instrument, and not a complete bill, order, note, or security for money, but clearly a wjiting, we are not bound to say that, in point of law, it was of value. I use that express- ion, because it may be that, this being, except for the absence of the name of the drawer, an accepted bill of exchange, a jury may in a similar case find that the writing is of value; and I do not wish to preclude myself from considering whether such a finding might not be sustained. Rule. Discharged. Signature by Agent — His Liability. — An agent may have authority to execute and deliver negotiable contracts for his prin- cipal. If his signature is in the form "A." "agent," he alone is liable. He must use some word or words which are not designa- tio persona: simply, but which indicate that his act is for and on behalf of his principal, as "A" agent for "B" or "B" by "A," his agent, or "B" per "A" agent. Owen v. Van Uster, 20 L. J. Rep., 61; O'Kell v. Charles, 34 L. T. Rep., 422; Bartlett v. Tucker, 104 Mass., 336; White v. Madison, 26 N. Y., 117. It is undoubtedly well settled that, where an ordinary simple contract is signed by an agent in his own name, with the addition of the word " agent" thereto, the principal may be made liable thereon, whether his (the principal's), name appears on the paper or not. Story on Agency, Sec. 160 a. But for commercial rea- sons, a distinction is made, between ordinary contracts and nego- tiable paper. As to negotiable contracts, the agent must either sign the name of the principal to the contract, or at least it must appear on the face of the paper itself, in some way, that it was drawn for him, or the principal will not be bound. Edwards on Bills, 80; Andenton v. IShoup, 17 Ohio St., 125; Eastern R. R. Co. V. Benedict, 5 Gray, 561; Emly v. Lye, 15 East, 7; Becham v. Drake, 9 M. & W., 92; Dewitt v. Walton, 5 Seld. (N. Y. ), 571; Sparks v. Dispatch Transfer Co., 104 Mo., 531. Some courts have held where the commercial paper was signed by the officers of Banking Corporations as A. B., Cashier, or C. D., President, and where the name of the principal appears in the heading, that the principal was liable. Chipman v. Foster, 119 Mass., 198; Hitchcock v. Buchanan, 105 U. S., 416. CHAPTER V. Non-Essentials of Negotiable Contracts. SECTION 21. (i). NEGOTIABLE CONTRACTS NEED NOT BE DATED. DE LA COURTIER v. BELLAMY.i In the Court of King's Bench, Michaelmas Term, 36 Chas. II. (1683.) \Reported in 2 Showers 411. ] The Form of Action. — Action on the case on a bill of exchange from parts beyond the seas, payable at double usance from the date thereof: custom alleged accordingly; and the fact was alleged to be, that the party beyond the sea drew such a bill such a day, and the same was afterward presented to, and accepted by the defendant. And exception was taken, that the date of the bill was not set forth: And per totam Curiam held, it was well enough, and they would intend it dated at the time of drawing it. Jndq'ment for the plaintiff.^ ' This case is cited in Chitty on Bills, 148, 149, 563; Story on Bills of Exchange, 37; Wood's Byles on Bills and Notes, 142; Daniel on Negotiable Instruments, 66, 83; Tiedeman on Com- mercial Paper, 10; Randolph on Commercial Paper, 85, 88, 275, 342. ^ In an action on a foreign bill of exchange, if the date be omitted, the court will intend it dated at the time it is stated to have been drawn. In the case of Hague v. French, 3 B. & P., 173 (1802), it was argued that the action could not be sustained for the reason that the bill contained no date; the bill being payable at two months, without date, it was impossible to ascertain the time of payment. The court held that it might be intended that the date of the bill was the day of the drawing. The court in this case cited and approved the case of De la Courtier v. Bellamy. In the case of 164 DE LA COURTIER V. BELLAMY. [CHAP. S, Giles V. Bourne, 6 Maule & Selevin, 74 (1816), the case of Hague V. French, supra, was discussed and approved. See also Clark v. Sigourney, 17 Conn., 511; Woodford v. Dorwin, 3 Vt., 82; Mehl- berg V. Tisher, 24 Wis., 607; Seldonridge v. Connable, 32 Ind., 375. A Bill or Note Delivered Without Sum or Date. — Authority to fill Such Blanks. — "An indorsement on a blank note, without sum or date or time of payment, will bind the indor- ser for any sum, payable at any time, which the person, to whom the indorser intrusts it, chooses to insert." Mechanics and Farm- ers Bank V. Schuyler, 7 Cow. (N. Y. ), 337. " Such a note is a letter of credit for an indefinite sum: Russell v. Langstaffe, Dougl., 514; 5 Cranch, 151; 2 M. & S., 90; 4 Mass. Rep., 54, 5. If there is an implied discretionary authority in such case to fill all the blanks, it would seem to follow that such an author- ity must equally exist to supply one, if only one be left. Accord- ingly, if the amount be left blank, any sum may be inserted; if the time of payment, it may be fixed at the pleasure of the holder, and in the hands of a bona Jide indorsee the indorser cannot question the transaction, though the blanks may have been filled in a man- ner entirely different from the understanding and expectation of the indorser when he put his name upon the note." "In the case of M. & F. Bank v. Schuyler, supra, it is said that the note in this case was perfect without a date. It is true that the date is not essential to the validity of a bill or note; for •where they have no date the time, if necessary, may be inquired into, and will be computed from the day they were issued: 2 Ld. Raym., 1076; 2 Show, 422; Chitty on Bills, 78; 3 B. & P., 173; 2 John, 303; 13 East, 5. Nor is it necessary to the validity of a note that a time of payment should be expressed in it. If none be fixed it is payable on demand: Chitty on Bills, 79; 7 T. R., 427. But if a note is indorsed, perfect in every respect but the time of pay- ment, and that is left blank, can there be any question of the au- thority of the maker, if the note be redelivered to him, to insert any time of payment he may think proper before he puts it in cir- culation? Can the indorser, in such a case, protect himself from liability on the ground of an alteration of the note? If not, upon what principle can the insertion of the date, where that is left blank, be considered an alteration ? If it be conceded, as it must be, that the maker in this case had an implied authority to fill up the blank at all, the indorser, and not the innocent indorsee, must suffer the consequence of an abuse of that authority, if it has been abused. It is not, in judgment of law, an alteration of the note. The defendant must have contemplated the addition of the date before the note was to be passed, for it was payable at the Mech- anics' and Farmers' Bank. It is believed to be the invariable cus- tom of banks to discount paper without a date." Mechanics, etc.. Bank v. Schuyler, supra. SEC. 21.] DE LA COURTIER V. BELLAMY. 1 65 Parol evidence is admissible to show from what time an un- dated instrument was intended to operate. Davis v. Jones, 17 C. B., 625. It may also be shown that there was a mistake in the date. Drake v. Rogers, 32 Me., 524; Seldonridge v. Connable, 32 Ind., 37S; Almich v. Downey, 45 Minn., 460; Germania Bank v. Distler, 67 Barb., 333; McSparran v. Neely, 91 Pa. St., 17; Giles V. Bourne, 6 M. & S., 74. Effect of Dating on Sunday. — A negotiable contract signed and delivered on Sunday, but bearing date on another day, is valid in the hands of a bona fide holder. Love v. Wells, 25 Ind., 503; State Bank v. Thompson, 42 N. H., 376; Vinton v. Peck, 15 Mich., 287. If in fact it is dated on Sunday but actually 'delivered on another day, it will be sustained. Bank v. Mayberry, 48 Me., 198; King v. Fleming, 72 111., 21; Benson v. Drake, 55 Me., 556. At common law there was no rule forbidding the execu- tion and delivery of commercial contracts on Sunday. Date — ^Vhere Placed. — It is customary to place the time or the date on which commercial contracts are executed and de- livered at the upper right hand corner of the instrument. The date, however, is not essential to the validity of commercial con- tracts. Michigan Ins. Co. v. Leavenworth, 30 Vt., 11; McSpar- ran V. Neely, 91 Pa. St., 17; Mechanics, etc. Bank v. Schuyler, 7 Cow., 337; Mehlberg v. Fisher, 24 Wis., 607. Where there is no date, the time, if necessary, maybe inquired into and will be com- puted from the day they were issued. Mechanics, etc. Bank v. Schuyler, supra; Lean v. Lozardi, 27 Mich., 424. If the bill or note bears no date it will be considered as dated at the time it was made or at the time of its delivery. Seldonridge v. Connable, 32 Ind., 375. While the date is not essential to the validity of commercial contracts it may become a matter of importance. For instance where the note is payable " time after date," or where they draw interest from date; or where the statute of limitations is interposed as a defense. Ante-Dating and Post-Dating. — A commercial contract maybe ante-dated or post-dated and parol evidence is admissible to- show on what day such contract was actually delivered and it will take effect from that date; but such evidence will not be admitted, however, to invalidate the title of a bona fide holder. McSparran V. Neely, 91 Pa. St., 315; Knox v. Clifford, 38 Wis., 651; Frazier V. Troy. Printing Co., 24 Hun., 281; Almich v. Downey, 45 Minn., 460; I Parsons on B. & N., 49. If by reason of the ante-dating or post-dating the contract should appear to have been executed and delivered at a time when by reason of, the date, — coverature, in- fancy, — or anything by reason of that date the contract is invalid it may be shown by parol evidence in behalf of any of the parties,, that at the time of its actual date or delivery no such facts existed. Story on Notes, Sec. 48; Daniel on Negot. Inst., Sec. 85; Tied, on Com. Paper, Sec. 11. Post-dating or ante-dating will not be l66 DE LA COURTIER Z/. BELLAMY. [CHAP. 5, allowed when it is done for the purpose of evading rules of law which render contracts invalid. Bailey v. Taber, 5 Mass., 286; Dan. on Com. Inst., Sec. 85. Ante-dating or post-dating does not vitiate the paper. Burns v. Kohn & Furst; Brewster v. Mc- Cardel, 8 Wend., 479; Almich v. Downey, 45 Minn., 460. Mistake as to the Date. — Where a bill or note is intended to bear a date as of the time of its delivery, but by mistake another date is written on the face of the instrument, such mis- take may be corrected, by parol, unless innocent indorsees or purchasers would be prejudiced thereby. 2 Parsons Notes and Bills, 574; Brutt v. Picard, R. & M., 37. See Miliary. Gille- land, 19 Pa. St., 119, for the effect of such correction upon the rights and liabilities of sureties. SEC. 22. J POPLEWELL V. WILSON. 167 SECTION 22. (2). NEGOTIABLE CONTRACTS NEED NOT CONTAIN A STATEMENT OF CONSIDERATION. POPLEWELL V WILSON.i In the King's Bench, Hilary Teem (6 Geo.), 1719, \_Reported in I Strange, 265.] The Form of Action.— Error of a judgment in C. B., in case upon a promissory note entered into by A. to pay so much to B.for a debt due from C. to the said B. And it was objected, 'This case is reported in Wood's Byles on Bills and Notes, 154, 219, 223; Story on Bills, 63, 183; Edwards on Negotiable Paper, 276; Tiedeman on Negotiable Paper, 31, 152, 170; Daniel on Negotiable Instruments, 108, 186; Ames on Bills and Notes, 635. See also upon the principal proposition: — 2 Ld. Raym.', 1481; Garnet v. Clark, 11 Mod., 226; Smith v. Knox, 3 Espin- asse, 46; Buchanan v. Bank, 78 111., 500; Grant v. Ellicott, 7 Wend., 227; Brown V. Mott, 7 Johnson, 361; Brix v. Braham', i Bingham, 281; 2 Black. Com., 446. The General Rule — Consideration Presumed In Commercial Contracts.— It may be stated as a general rule that a bill of exchange or a promissory note imports a considera- tion whether it is negotiable or not. In the case of Carnwright v. Gray, 127 N. Y., 92, the following instrument was held to be a good negotiable contract without words of "negotiability" or a statement of "consideration": " Quarryville, Sept. 2, 187 1. " Thirty days after death, I promise to pay to Cornelius Carn- ■wright fifteen hundred dollars, with interest. Samuel P. Freligh." In this case the defendant moved to dismiss, upon the ground that no proof had been given that the instrument sued upon had any consideration. This motion was denied, and the court in- structed the jury that the instrument was a promissory note and therefore a consideration was imported, and that the burden rested upon the defendant to show that it was without a consideration. Downing v. Backinstoes, 3 Caines, 137; President v. Hurtin, 9 Johnson, 217; 6 Am. Dec, 273; Kimball v. Huntington, 10 Wend., 675; 25 Am. Dec, 590; Hatch v. Trayes, 11 Ad. & E., 702; Hall v. farmer, 5 Denio, 484; Siegel v. Chicago, etc. Savings Bank, 131 111., 569. In this last case the consideration was executory and was supported. 19 Am. St. Rep., 51; Davis v. McCready, 17 N. Y., 230; State Nat. Bank v. Cason, 39 La. Ann., 865; McGowen l68 POPLEWELL V. WILSON. [CHAP. 5, that this note not being for value received, it was not within V. West, 7 Mo., 569; 38 Am. Dec, 468; Chapman v. Remington, 80 Mich., 552; County, etc. v. Auckley, 9c Mo., 126. Where no consideration is recited, extrinsic evidence is ad- missible to show that there was a consideration between the original parties. Green v. Shepherd, 5 Allen, 589; Martin v. Stubbings, 126 111., 387; 9 Am. St. Rep , 620. See also, as between the orig- inal parties, may a different consideration be proved than that ex- pressed. Miller V. McKenzie, 95 N. Y., 575; Johnson v. Suther- land, 39 Mich., 579; Everhart v. Puckett, 73 Ind., 409. The Use of the Phrase "Value Received." — Necessity of. — The words for " value received " are almost universally in- serted in bills and notes, but it is in no wise necessary to do so. Dean v. Carruth, 108 Mass., 242; Grant v. DaCosta, 3 M. & S., 351; 4 Douglass, 427; Benjamin v. Fillman, 2 McLean (U. S. ), 213; Townsend V. Derby, 3 Mete. (Mass.), 363; Bourne v. Ward, 51 jMe., 191. There are some old cases which hold that words ex- pressing a consideration are as necessary in these contracts as they are in common law contracts. Cramlington v. Evans, i Showers, 5. As between the original parties the consideration may always be inquired into; and if it is shown that there was no consideration, or that it has failed, a recovery will be defeated. Rice v. How- land, 147 Mass., 407; Monson v. Tripp, 81 Me., 24; Cooper v. King, 73 Iowa, 136; Chenault v. Bush, 84 Ky., 528; Slade v. Hal- sted, 7 Cow., 322; Collis v. Emmett, i H. Blk., 313; Molloy v. Delves, 7 Bing., 428; 5 M. & P., 275; 4 C. & P., 492 (19 E. C. L.) And where the actual consideration between the original parties is less than the amount of the bill or note, no recovery can be had beyond the real consideration. Brown v. Mott, 7 Johns. (N. Y.), 361. A different rule obtains, however, where the instrument gets into the hands of an innocent third party. In this case the ques- tion of consideration between the original parties cannot be raised, provided he secured it before maturity, for value, in the due course of business and without knowledge of any equities existing against it. Effect of a Failure in the Consideration. — A want or fail- ure of consideration will, as between the original parties, or per- sons standing in no better situation, defeat a commercial contract in the same manner as other contracts, even though it is expressed to be for "value received;" Thatcher v. Densmore, 5 Mass., 299; Parish v. Stone, 14 Pick., 198; Stevens v. Mclntire, 14 Me., 14. In an action upon these contracts the onus probandi Hes on the de- fendant and the holder is not bound to prove that he gave value until the defendant has first made out a case showing: 1. That the plaintiff is not a bona fide holder; or 2. That there was fraud in the inception of the contract; or 3. That there was suspicion of fraud which would make him guilty of bad faith. Jennison v. Stafford, 1 Cush., 168, 170; Saw- SEC. 22. J POPLEWELL V. WILSON. 169 the statute, and prima facie the debt of another and is no consideration to raise a promise. yer V. Vaughn, 25 Me., 337, 339; Lewis v. Parker, 4 Ad. & EL, 838; Collins V. Martin, i B. & P., 651; Hayly v. Lane, 2 Atk., 182; Lickbarrow v. Mason, 2 T. R., 71; Ford v. Beech, 11 Adolph. & E., 854. ^Vhat Consideration will Support a Negotiable Con- tract. — Love and Affection not Sufficient. — As between the original parties the rule relating to consideration in common law contracts applies to negotiable contracts. A valuable consider- ation is necessary; a good consideration will not support these contracts. In an action upon the following note: ''Pleasant Valley, III., Oct., 2Sth, 1875. " Whereas, my niece, Lillie Williams, has performed for me personal services for a long period of time, for which I desire shall receive ample cojupensation from my estate, and feeling able at pres- ent to fully compensate her, T therefore and hereby acknowledge my- self indebted to her in the sum of $2, §00, with interest, but not to be due until my death, unless at my option. Deliliah Deeds." Scholfield, C. J., said: " A note executed without any other consideration than that of natural affection, or one without any valuable consideration, intended as a mere gift, cannot form the ground of recovery in an action at law. A gift is always revocable until it is executed; and a promissory note, intended purely as a gift, is but a promise to make a gift in the future. The gift is not executed until the note is paid. Kirkpatrick v. Taylor, 43 111., 207; Blanchard v. Williamson, 70 111., 647; Pratt v. Trustees, 93 III, 475. It is not pertinent for us here to inquire how slight. a valuable consideration would support this promise, for the appel- late court finds as a matter of fact that it is supported by no valu- able consideration, — that the promise is to make a gift only." Williams V. Forbes, 114 HI-, 167; 28 N. E. Rep., 463- A nego- tiable contract, executed and delivered as a gift to a son or other relation, is not sufficient to support it. Fisk v. Cox, 18 Johns, 145; Blogg V. Pinkers, r Ryan. & Mood., 125. While some cases have attempted to hold that this was a good consideration, [Tate V. Hilbert, 2 Ves. Jr., irr; Seton v. Seton, 2 Bro. Ch., 610; Daw- son v. Kearton, 25 L. J. Ch., r66], the rule seems well settled now that a promissory note is ineffectual to perfect a gift either ''inter vivos " or "causa mortis." Williams v. Forbes, supra; Fink v. Cox, 18 Johns., 145; Richardson V. Richardson, 148 111., 563; Shaw v. Camp, r6o 111., 425; Voorhees v. Combs, 33 N. J. L., 494; Pope v. Dodson, 58 111., 360, (gift inter vivos); Raymond v. Selhck, 10 Conn., 480, (gift causa mortis); Parish v. Stone, 14 Pick., 198; Sec- ond Nat. Bk. v. Williams, 13 Mich., 282. I70 POPLEWELL V. WILSON. [CHAP. 5, Decision. — But the court held it to be within the statute, In the case of Rice v. Rice, 68 Ala., 216, it was held that the "presumption of consideration" fails in a negotiable contract when it shows on its face that it was given for the purpose of a gift. Money Consideration — Consideration Other Than Money — Total or Martial Failure of Consideration. — There is a distinction between a money consideration and a valua- ble consideration other than money. In the latter the s light es/ consideration will support the promise to the full extent, while the former will only support the promise to the extent of the money forming the consideration. In the case of Sawyer v. McLough (46 Barb., 350), the action was brought to recover the amount of a note without date, but proved to have been given by Joseph Sawyer, the defendant's in- testate, in June or July, 1861. The note was in the following words and figures: "For value reicivcd, [promise to pay I. M. Sawyer, if livi/ia-^ if not, to his son Joseph Sawyer, fifteen hundred dollars, on the first of October, 1862. Joseph Sawyer." Upon the trial at the Ontario circuit, in May, 1865, the plain- tiff gave evidence tending to show the execution of the note by the testator, by proving the signature to be genuine, and by the testi- mony of Edward S. Gray, who testified that he was present and saw the testator sign the note, and deliver it to the plaintiff. He further testified that on the occasion of the execution of the note, the plaintiff handed the testator, his father, a roll of bills, who took it, and looked it over, and said it was all right, and then handed the plaintiff the note; that the witness did not count the roll of bills; that he saw the intestate count it; that there was nothing said as to the amount, and the witness had no knowledge as to the amount; that he did not see the denomination of any of the bills; that he saw the size of the roll; that it was rolled up; that he could not tell as to the amount; that the plaintiff handed it to the testator, and asked him if it was all right, and he said he believed it was. There was no evidence showing that the amount of the money paid or delivered by the plaintiff to the testator, on the occasion of giving the note, except what might be implied or inferred from the amount of the note, and the fact that the giving the note and the payment of the money were concurrent acts, and one and the same transaction. The theory of the defense was, " that if the money so handed to the testator was the only valuable consideration of the note, and of less amount than the note, the plaintiff could recover noth- ing beyond the amount of such money consideration." It was contended on the argument, in behalf of the defend- SEC. 22. J POPLEWELL V. WILSON. 17I being an absolute promise, and every way as negotiable as if ants, that there was a distinction between a valuable consideration other than money and a money consideration; that while in the former case the slightest consideration would support a promise to pay the largest amount, to the full extent of the promise, in the latter the consideration will support a promise only to the extent of the money forming the consideration; that this leaves the meas- ure of the value of a valuable consideration, other than money, for a promise to pay money, to the parties to the contract; but money, being the standard of value, is not subject to be changed by contract, and will support a promise to pay money, only to the amount of the consideration. It seems to me this is a correct statement of the law on the subject. Judge Story, in his treatise on promissory notes, states the law as follows: "The objection to a note may be, that there is a total want of consideration to support it; or that there is only a partial want of consideration. In the first case it goes to the entire validity of the note, and avoids it. In the latter case it affects the note with nulity, only pro tanto. The same rule ap- plies to cases where there was originally no want of consideration, but there has been a subseqent failure thereof, either in whole or in part. For a subsequent failure of the consideration is equally fatal with an original want of consideration, not indeed in all cases, but in many cases; at least where it is a matter capable of definite computation, and not mere unliquidated damages." Story, Prom. Notes, § 187. It was not necessary for the plaintiff to prove any considera- tion for the note, as it imported a sufficient consideration; and if it was inadequate or illegal for any reason, or had failed in whole or in part, it was incumbent upon the defendants to prove it. The testimony of the witness Gray did not tend to prove inadequacy of consideration, and there was no other evidence in the case which would authorize the jury in finding an inadequate considera- tion. Gray's testimony on that subject was given on cross-exam- ination, and was an attempt on the part of the defendants to prove such inadequacy, but which attempt was an entire failure. It proved that, when the note was made and delivered by the intes- tate to the plaintiff, the latter handed the former money, the amount of which the witness did not know; but, after the testator had counted it, he said it was all right; that the testator executed and delivered the note to the plaintiff was put beyond a doubt, and the testimony of Gray, as before stated, did not tend to prove that the money paid was less than the amount of the note. There was no evidence to contradict the testimony of Gray, and upon that, if believed, the legal presumption was that the money ad- vanced by the plaintiff was equal to the amount secured by the note; and until that presumption was rebutted, the jury would be bound so to find. 172 POPLEWELL V. WILSON. [CHAP. 5, it had been generally for value received. And the judgment was affirmed. Pre-existing Debt as a Consideration for a Commer- cial Contract. — The weight of authority now clearly supports the rule, that one who takes negotiable paper in payment of an antecedent or pre-existing debt, before maturity, and without notice, actual or otherwise, of any defects, thereby receives it in due course of business and becomes a holder for value. Swift v. Tyson, i6 Pet. (U. S.), i (1842); Poirier v. Norris, 2 E. & B. (75 E. C. L.), 89; Bank v. Gilliland, 23 Wend., 311 (1840); First Nat. Bk. V. McAllister, 46 Mich., 397; Merchants Ins. Co. v. Abbott, 131 Mass., 397; Evans v. Speer Hardware Co., 45 S. W. Rep., 370 (1898), (Ark.); Phcenix Ins. Co. v. Church, 81 N. Y., 225; Mix V. Nat. Bk., 91 111., 20; Bardsley v. Deep, 88 Pa. St., 420. The antecedent debt must, however, be cancelled by the bill or note when given and accepted. Mix v. Nat. Bank, supra; Carlisle V. Wishart, 11 Ohio St., 172. If the commercial con- tract is given as a conditional and not an absolute payment of the pre-existing debt then it will not be a good and valuable consider- ation. See the leading case contrary to this general doctrine. Bay V. Coddington, 5 Johnson's Ch., 54; Coddington v. Bay, 20 Johnson, 637. SEC. 23. J NON-ESSENTIALS. 173 SECTION 23 (c) NEGOTIABLE CONTRACTS NEED NOT STIPULATE A PLACE OF PAYMENT. There is no requirement that the place of payment of commercial contracts shall be expressly named upon its face. Mehlberg v. Tisher, 24 Wis., 607; Maiden Bk. v. Baldwin, 13 Gray (Mass.), 154. In the absence of a place of payment named there is a presumption that it is payable at the place of execution. The place of payment may also be in the alternative. Pollard v. Herries, 3 B. and P. (1791), 335. If no place of execution, however, is named there is a presump- tion that it is payable at the place of business or residence of the maker. McCruden v. Jonas, 173 Pa. St., 507. It has been held that if no particular place of payment is specified in a commercial contract, the law of the place where it is made determines, not only its construction, but also the obli- gation and duty it imposes upon the maker. Barrett v. Dodge, 16 R. I., 740; 37 Am. St. R., 777. In some of the states, however, the law of the place of payment and not the place of execution governs in its construction as well as the obligation and duty it imposes upon the maker. ' Dan. on Negot. Inst., Sec. 90 a. The contract may provide, however, whether it is to be construed by the laws of the state where made or by the rules of the place where it is to be executed. New England, etc. Co. v. McLaughlin, 87 Ga., i. If no place of payment is named in a note, the place of payment is understood to be where the maker resides; and if a bill, then at the place where the drawee resides. While there is no requirement that a "place" of execu- tion or performance shall be named in a commercial contract, yet it may become a question of a good deal of importance in the construction, interest, liability of parties, time and place of presentment for payment or acceptance, etc. These ques- tions will be discussed under their respective heads. 174 KENDALL ET AL. V. GALVIN. [CHAP. 5, SECTION 24. (d). A COMMERCIAL CONTRACT NEED NOT CONTAIN THE INDICIA OF NEGOTIABILITY. KENDALL ET AL. v. GALVIN.' In the Supreme Court, Maine, June, 1838. {_Reported in 15 Maine, 131. ] The Form of Action. — The action was assumpsit, on an account, charging the amount paid N. K. Seaton on the de- fendant's order. The declaration also contained the money counts. On the trial the plaintiffs offered in evidence a paper, of which the following is a copy: ''Messrs. Kendall & Kingsbury, Gents. — Please pay N. K. Seaton four hundred fifty-five dollars, thirty-six cents, and charge the same to my account. ' ' Calais, June 7, / 511- 196 DAVIS V. CLARKE. [CHAP. 6, SECTION 27. AN ACCEPTANCE MUST BE BY THE DRAWEE. A STRANGER DOES NOT BECOME AN ACCEPTOR BY THE ACCEPTANCE OF A BILL OF EXCHANGE. DAVIS V. CLARKE." In Court of Queen's Bench, 1S43. S^Reporied in 6 Adolphus 6-= Ellis, N. S., i6; 6 Queen's Bench, i6; 51 Eng., C. L., 75.] The Form of Action. — Assumpsit. The first count stated that "one John Hart," on the 8th day of March, 1838, " made his bill of exchange in writing and directed the same to the defendant, and thereby required the defendant to pay to him or his order lOO/. ," value received, at twelve months after date, which had elapsed before the commencement, etc. ; " and the defendant then accepted the said bill, and the said John Hart then indorsed the same to plaintiff;" averment of notice to defendant, promise by him to pay plaintiff, and that he did not pay. There was also a count on an account stated. The first plea denied the acceptance; the second the promise; the third alleged a discharge of the defendant by the Insolvent Debtor's Court. The replication joined issue on the first two pleas, and traversed the discharge alleged in the third; on which traverse issue was joined. On the trial, before Parke, B., at the Essex Summer as- sizes, 1843, a written paper, in the following terms, was given in evidence on behalf of the plaintiff. ' This case is cited in Story on Bills of Exchange, 35, 58, 121, 254; Daniel on Negotiable Instruments, 97, 98, 362, 485, 486; Wood's Byles on Bills and Notes, 158, 300; Tiedeman on Com- mercial Paper, 15, 219, 228; Bigelow on Bills and Notes, 37; Big- elow's Cases on Bills and Notes, 45; Paige's Illustrative Cases on Commercial Paper, 43; Benjamin's Chalmers, Bills, Notes and Checks, 48. SEC. 27. J DAVIS V. CLARKE. X97 " £100. '' London, 8th March, 1838. ' ' Twelve months after date pay to me or my order one hundred fotmds, value received. " To Mr. John Hart. John Hart." Across the face of this instrument was written the follow- ing: "Accepted. "H. J. Clarke. " paj'able at 319 Strand." This writing across the face was proved to be the defend- ant's handwriting. No other evidence being produced, the learned baron di- rected a non-suit. In Michaelmas term, 1843, Petersdorffl obtained a rule nisi for a new trial. The Claim of Defendant.— The defendant has not ac- cepted the dill described in the declaration: the instrument produced is indeed no bill of exchange. In Gray v. Mil- ner,^ where the instrument was not addressed to any one, but had only a place of payment added, and in other respects re- sembled the document here proved, the acceptor was held ha- ble, as having admitted himself, by the acceptance, to be the party pointed out by the place of payment. Here the drawer addresses himself; and the instrument more nearly resembles a promissory note. It may be that the defendant might have been sued as a surety. The Claim of Plaintiff. — This principle of Gray v. Mil- ner,'' applies. The defendant, by his acceptance, estops him- self from disputing his own character and the nature of the- instrument. In Polhill v. Walter,^ indeed, it was said that na one could be liable as acceptor, unless he were the person to- whom the bill was addressed, or an acceptor for honor. But the question of acceptance in this form was not then distinctly before the court. Here it may be contended that the defend- ant identifies himself as the person addressed under the name- of John Hart. The judge at nisi prius was requested, but re- fused, to allow an amendment, by calling the instrument a ' 8 Taunt., 739. 2 8 Taunt, 739. '3 B. & Ad., 114. 12 198 DAVIS V. CLARKE. [CHAP. 6, promissory note made by the defendant; the writing the name was a new making, according to the principle of Penny v. In- nes. ' The Decision.— There is no authority, either in the En- glish law or the general law merchant, for holding a party to be Hable as acceptor upon a bill addressed to another. We must take it on this instrument that the defendant is different from the party to whom it is addressed. Polhill v. Walter, ^ and Jackson v. Hudson^ are authorities showing that the de- fendant here cannot be sued as acceptor. In Jackson v. Hud- son, Lord Ellenborough treated an acceptance by a party not addressed as "contrary to the usage and custom of mer- chants." No previous case seems to be exactly like this. In Jackson v. Hudson,* there was one acceptance by the party to whom the bill was addressed, prior to the acceptance by the defendant. In Gray v. Milner, no* party was named in the address; and I must say that the decision in that case appears to me to go to the extremity of what is convenient. It may be considered as having been decided on the ground that the acceptance was not inconsistent with the address, so that the acceptor might be deemed to have admitted himself to be the party addressed. But here another person, the drawer him- self, is named in the address. I do not know that a party may not address a bill to himself, and accept, though the proceeding would be absurd enough. Then it is said that the defendant is estopped: but that cannot be supported where the instrument shows, on its face, that he cannot be the acceptor. The only question is, whether the defendant is such an acceptor as is described in the declaration; that is of a bill of exchange directed to him. No doubt this can be so only where he is the drawee; but here the bill is not addressed to ' I C. M. & R., 439; S. C, 5 Tyrwh., 107; he referred also to Jackson v. Hudson, 2 Camp., 447. ^3 B. & Ad., 114. ^ 2 Camp., 447. *2 Camp., 447. *8 Taunt., 739. SEC. 27.] DAVIS V. CLARKE. 199 the defendant at all. This is therefore not an acceptance within the custom of merchants. The safe course is to adhere to the mercantile rule that an acceptance can be made only by the party addressed, or for his honor. Here the last is not pretended; and the first can not be presumed. If the John Hart addressed is different from the John Hart who draws, there is still no acceptance; if the same, then the instrument is a promissory note and not a bill of exchange. Rule. Discharged.' ' May V. Kelly, 27 Ala., 497; Keenan v. Nash., 8 Minn., 409; Smith V. Lockridge, 8 Bush., 425. If the Name of the Drawee is Left Blank the Ac- ceptance May be by a Stranger. — It has been held, in cases where the name of the drawee is left blank, that a stranger to the bill may fill the blank with his own name and accept the bill. Gray v. Milner, 8 Taunton, 739; Wheeler v. Webster, i E. D. Smith, i; i Parson's B. & N., 289. An Acceptance by a Member of a Partnership Binds the Firm. — An acceptance by a member of a partnership of a bill drawn upon the firm will bind all. Mason v. Rumsey, i Camp., 384; Tolman v. Hannahan, 44 Wis., 133. But see contra Herman v. Nash, 8 Minn., 407. See also Rumsey v. Briggs, 139 N. Y., 323. Where a Bill is Drawn Upon Two or More Jointly All Should Accept. — Where a bill is drawn upon two or more, jointly, they must all join in the acceptance. If any of the joint parties refuse to accept the bill should be protested for non-accept- ance. If any of the joint parties do accept they will be bound. Smith V. Milton, 133 Mass., 369; Chitty on Bills, 73, 321. Acceptance May be by an Agent. — Of course an ac- ceptance may be by an agent if he has proper authority to act for his principal. Daniel Neg. Inst., 487; Byles on Bills and Notes, 113; Richards v. Barton, i Esp., 269; Sternan v. Harrison, 42 Pa. St., 49; Moeise v. Knapp, 30 Ga., 942; Goodrich v. DeFor- rest, 15 Johnson, 6. 200 COX ET AL. V. TROY [CHAP. 6, SECTION 28. AN ACCEPTANCE IS INCOMPLETE UNTIL DELIVERY, EITHER ACTUAL OR CONSTRUCTIVE, AND MAY BE REVOKED* COX ET AL. V. TROY.i In the King's Bench, Hilary Term, 1822. {Reported in 5 Barnwell 6^ Alderson, 4J4; 7 Eng. C. L., 260. j The Form of Action. — Assumpsit upon a bill of ex- change, for 938/., dated the 20th day of May, 1820, drawn by Stephen and James Roch, upon the defendant and W. T. Robarts, since deceased, by the names and firm of Messrs. W. T. Robarts & Co., London, payable 61 days after sight to Michael Murphy, and indorsed by him to the plaintiffs, and alleged to have been accepted by the defendant and W Tierney Robarts, payable at Messrs. Robarts, Curtis & Co. The first count stated these facts, and a presentment for pay- ment when due, and refusal to pay at Messrs. Robarts, Cur- tis & Co. The second count was on a general acceptance; and the third was special, stating that the bill was delivered to the defendant and W. T. Robarts, to determine within a reasonable time, whether or not they would accept the same: and that they promised to take due care of the same, and return the same without defacing or spoiling it, which they did not do, but returned the same bill in a defaced and in- jured state. The declaration also contained the usual money counts. Plea, general issue. The cause was tried at the sittings after Trinity term, 1821, before Abbott, C. J., when a verdict was found for the plaintiffs, subject to the following case: — *Dunavan v. Flynn, 118 Mass., 537; Trent Tile Co. v. Fort Dearborn, 54 N. J. L., 33; Fort Dearborn v. Carter, 152 Mass., 34; Jeune V. Ward, 2 Stark, 326; Lindsay v. Price, 33 Tex., 280! 'This case is cited in Daniel on Negotiable Instruments, 63, 490. 493; Wood's Byles on Bills and Notes, 253, 314; Story on Bills of Exchange, 252; Benjamin's Chalmers on Bills, Notes and Checks, 61; Chitty on Bills, 308, 243, 296; Tiedeman on Com- mercial Paper, 34, 221, 250; Ames on Bills and Notes, 209; Nor- ton on Bills and Notes, 70, 90, 95; Randolph on Commercial Paper, 88, 334. ' SEC. 28.] COX ET AL. V. TROY. 20I It was admitted on the trial, that the bill of exchange mentioned in the declaration was drawn by Messrs. T. & J. Roch on the defendant and W. T. Robarts, since deceased, as stated in the declaration, and that the same was duly indorsed to the plaintiffs by the payee. The plaintiffs in Lon- don received the bill from Cork, on the 24th of May, 1820; and on the same day their clerk, by their directions, left it for acceptance at the defendant's counting-house in Old Broad street, London, in the usual way. He did not call for it until Saturday, the 27th of May, upon which day one of the de- fendant's clerks delivered back the bill of exchange to him without any observations being made at the time. The words "24th May, 1820, at Messrs. Robarts, Curtis & Co." (signed) " W. T. Robarts & Co." were written upon the bill by the defendant, or some one authorized by him, whilst the same was in his custody: and the jury found by their verdict that the defendant and the said W. T. Robarts did accept the bill of exchange: but at the time the clerk re-delivered the bill of exchange to the clerk of the plaintiffs, the words " 24th May, 1820, at Messrs. Robarts, Curtis & Co., W. T. Robarts & Co.," were inked and written over, so as with great difficulty to be deciphered. The defendant did not offer any evidence to account for the obliteration of the acceptance. The bill itself was not obliterated, or any part of it rendered illegible. The Claim of Plaintiff. — In this case the acceptance, when once made, could not be revoked by the defendant. It is so laid down in Marius,' although that is only a loose dictum. But in MoUoy' it is said, that when a party has once subscribed, he can not afterwards blot out his name. And the Hamburg ordinance lays it down in general terms, that an acceptance once made can not be revoked. Trimmer v. Oddy, cited in Bentinck v. Dorrien,'' is an authority in point. There Ld. Kenyon was of opinion, that if a drawee deface the bill, that makes him liable as acceptor; and in Thornton v. Dick,* this point was expressly ruled by Ld. Ellenborough. 'p. 83. ^ Book 2, c. 10, s. 28. '6 East, 200; Chitty on Bills, 160, S. C. *4 Esp., 270. 202 COX ET AL. V. TROY. [CHAP. 6, It seems also to have been considered as the law in Bentinck V. Dorrien, and in Fernandey v. Glynn.' And it is treated as the law of France at the present day by Fardessus, a modern writer.' In Adams v. Lindsell,' the defendant was held to be bound by the plaintiff's acceptance of the contract, although not communicated to him. Here the jury have found that there was once an acceptance by the defendants, and that being so, they had no right afterwards to revoke it. Decision. — I am of opinion, that, in this case, the de- fendant is entitled to judgment. It is true, that the jury have found that he did accept the bill; but connecting that finding with the other facts of the case, it does not seem to me that it means more than that, at one period, the defendant, or some one in his behalf, did write an acceptance on it, and at that time was minded to accept it. The question will then be, whether having that intention at the time, and having written his acceptance, he was at liberty, on an alteration of circumstances, to erase those words before he delivered out the bill to the holder. Upon that question, there appears, in the books, to be some difference of opinion. In Bentinck v. Dorrien, Lawrence, J., says, "When the general question shall arise, it will be worth considering how that which is not communicated to the holder can be considered as an accep- tance, while it is yet in the hands of the drawee, and where ' I Camp., 426, n. 'The passage referred to is in the Cours de Droit Commercial, by J. M. Pardessus, Paris, 1814, part 2, tit. 4, chap. 4, sect. 4, s. i, p. 400. This writer, speaking of the effect of an acceptance, says: " EUe est irrevocable, et celui qui la donee ne serait pas libra de la rayer, meme du conseutement de celui sur la presentation duquel la lettre auroit 6te acceptee, parce que I'acceptation n'oblige pas simplement I'accepteur envers le porteur; qu'elle forme 6galement un contrat entre le tireur et I'accepteur." In the next paragraph, the same learned writer says: "Cependant comme le bonne foi doit etre avant tout considerde, et que la seule crainte de la fraude no doit pas empgcher des operations legitimes, le tire qui auroit trop precipitamment accept^, et voudroit revoquer son acceptation avant que la lettre qui en est revetue circuit, pourroit la rayer et assurer la date et I'existence de ce changment par un protet, ou par tout autre acte semblable, qui ne permettroit pas de croire que jamais la lettre ait circuit revetue de I'acceptation non rayee." '2 B. & A., 681. SEC. 28. J COX ET AL. V. TROY. 203 he obliterates it before any communication is made to the holder." That expression was used after the decision, in the cases of Thornton v. Dick and Trimmer v. Oddy. And at a later period, in Raper v. Birkbeck,' Ld. Ellenborough said, " I remember Pothier, in his treatise on bills of exchange, speaking of an acceptor who has put his signature to a bill, but has not parted with it, says, that before he does part with it, ^ il pent changer de volonte, et rayer son acceptation'; a fortiori, then a third person who cancels an acceptance by mistake, shall not be held thereby to make void the bill, but shall be at liberty to correct that mistake, in furtherance of the rights of the parties to the bill." The manner in which Ld. Ellenborough quotes the treatise of Pothier, seems to indicate that, at that time, he did not retain the opinion which he had delivered in the case of Thornton v. Dick. In a case like the present, which depends on the law-merchant, the opinions of learned lawyers and the practice of foreign and commercial nations, though they can not, strictly speaking, be quoted as authorities here, yet are entitled to very great weight and attention. When I find, therefore, that it is laid down in Pothier's treatise, that a party who has given an ac- ceptance may erase it before the bill goes out of his hand, it affords a strong argument in support of the view which I take of the question. I think the rule there laid down is far better than the one contended for by the plaintiff. I cannot per- ceive how the holder of a bill, or any antecedent party, is prejudiced by it; for it is to him the same thing, whether when the drawees give it back, they deliver it to him unac- cepted, or whether he finds that the drawees have withdrawn their acceptance, having at one time intended to accept it, but having subsequently changed their mind. Thinking, as I do, that no prejudice can arise to the holder, or any other parties to the bill, and that they are placed in precisely the same situation as if no acceptance was given, it seems to me, that it was competent for the acceptors to erase their accept- ance before they delivered out the bill, and therefore that the defendant is entitled to our judgment. ' 15 East, 20. 204 cox ET AL. V. TROY. [CHAP. 6, By the bill the drawer requires the drawee to come under an engagement to pay it when due. The question is, when the drawee comes under an engagement, whether by the act ■of writing something on the bill, or by the act of communica- ting what has been written to the holder, and I have no diffi- culty in saying, from principles of common sense, that it is not the mere act of writing on the bill, but the making a commu- nication of what is so written, that binds the acceptor; for the making the communication is a pledge by him to the party, and enables the holder to act upon it. But while it remains in the drawee's hands, it seems to me, the acceptance is not fully binding on the person who signed it, and he is at liberty to say, before he parts with it, "I have not yet entered into an engagement to accept." I think, that in this case the party was at liberty to can- cel his acceptance prior to the time when it was delivered back. In the old books there are dicta which import that an acceptance once made cannot be revoked. In some of them it is said, anything which amounts to an assent to pay the bill, whether in writing or otherwise, is in point of law an accept- ance; and I suppose it has been on that principle that the case of Thornton v. Dick was determined; but the two subsequent cases seem to show that Ld. Ellenborough had doubts as to his former opinion. In Fernandey v. Glynn, the cancelling of the check was with a view and under the idea that it would actually be paid, and in that case it was probably contended, either that the crossing or cancelling the bill amounted to ac- tual payment, so that an action tor money had and received would lie for the amount against the bankers, or that if not, yet it was to be considered in the nature of an acceptance. Ndw that case seems to me to apply strongly to the present; for there according to the usage, if a check was intended to be paid, but if not, nothing was done, but it was returned to the parties from whom it was received. And when the check in that case was cancelled, it was done with the intention of pay- ment, and not really by mistake. In consequence, however, of the large payments made in the course of the day on ac- count of the drawer, the bankers changed their intention; yet there the check was delivered back, and the original drawer ;SEC. 28. J COX ET AL. V. TROY. 205 ■only was considered bound to pay it. The opinion of Pothier, stated in Raper v. Birkbeck, is precise on this subject, and is far better authority than the passages cited from Marius. Where a man accepts a bill, and delivers it out accepted, he must remain irrevocably bound by it. In contract? made be- tween parties at a distance, if a man writes his acceptance, and sends it out of his hands, he can not revoke it afterwards. I am satisfied, however, that this is not a binding acceptance on the party, having been cancelled anterior to the time when the bill was delivered back. This is a question of the law-merchant, and it is desirable that that laA? should be the same in this as in every other commercial country. We ought to act according to the judg- ments of the courts in our own country, but in the absence of these authorities, we may with great advantage take into our consideration the opinions of learned writers on this point. There seems to be no authority in the English law, except the -case of Thornton v. Dick. I agree with Ld. C. J., that Ld. Ellenborough seems to have changed the opinion which he is reported to have delivered in that case. The passage in Mol- loy is probably applicable to the case where the bill has been delivered out, for it does not speak of cancellation, but revo- cation. But the authority of Pothier is expressly in point. That is as high as can be had, next to the decision of a court of justice in this country. It is extremely well known that he is a writer of acknowledged character; his writings have been constantly referred to by the courts, and he is spoken of with great praise by Sir William Jones, in his Law of Bailments, and his writings are considered by that author equal in point of luminous method, apposite examples, and a clear manly style, to the works of Littleton on the laws of this country. We can not, therefore, have a better guide than Pothier on this subject. As to the opinion of Pardessus, I should under- stand him as rather speaking of bills delivered out, accepted and not erased. That seems to me perfectly clear from the next passage, where he says that, though a man does accept a bill, still if he cancels that acceptance before he delivers it out, that is sufficient. But considering this as a question merely ■of common sense, and judging from analogy, is it not clear 206 cox ET AL. V. TROY. [CHAP. 6, that the party is not bound in such a case as this ? It may be said, that the defendants here ought to have shown that this was done by mistake. How is it possible to do that 1 The thing looks like a mistake. He may have written an accept- ance, and afterwards find when he has written it, that it is on the wrong paper; and not meaning to accept that bill, he does that which shows that it was his intention not to enter into such a contract. Nobody can be injured by it. When the bill goes back it is in as good a state as it came. The party is still placed in the same situation. It appears to me, there- fore, not only on authority, but on the principles of common sense, that the defendant was not bound by this as an accept- ance, and that our judgment ought to be in his favor. Judgment for the defendant.' 'See Wilde V. Sheridan, 21 L. J. Rep., 260, which Ames in his valuable work on Bills and Notes cites for a contrary doctrine;. I Ames on Bills & Notes, 214-218. The Early Rule. — It was earlier held that an acceptance without a delivery was irrevocable. Ld. Ellenborough, in the case of Thornton v. Dick (4 Esp., 270), (1803) said, " But the accept- ance having been proved to have taken place, he had no hesitation in saying that the act of acceptance was irrevocable; and that, if a party once accepted a bill of exchange, he had done the act, and could not retract. The moment the bill was accepted, he was bound, and the bill began to run; and the holder had a right to hold him to that liability which he had undertaken, and from which he, by his own act, could not discharge himself." In the case of Bentinck v. Dorrien (6 East, 199) (1805), where after acceptance and before delivery the acceptance was cancelled, Ld. Ellenborough said, "I was struck at first with consideration how far this might affect the right of third persons; but on further consideration, if this be an acceptance in law, notwithstanding the obliteration before delivery to the holder, it will still remain so as to such third persons." After Acceptance and Delivery it is Irrevocable. — When a bill of exchange is once accepted and delivered to the holder it then becomes a binding obligation according to its terms and is ir- revocable. It has been said that it cannot be revoked even with the consent of the holder, for the reason that the drawer and all prior parties have a vested interest in the contract. Chitty on Bills, 308; Thornton v. Dick, 4 Esp., 270; Tiedeman on Commer- cial Paper, 221. SEC. 29. J JOHNSON ET AL. V. COLLINS. SECTION 29. 207 AN ACCEPTANCE MAY BE EITHER BY PAROL (UNLESS OTHERWISE PROVIDED BY STATUTE) OR IN WRITING; BEFORE OR AFTER THE BILL IS DRAWN AND BEFORE OR AFTER MATURITY. JOHNSON ET AL. v. COLLINS.i In King's Bench, Nov. 25TH, 1800. \_Reported in i East, g8. ] The Form of Action.— The plaintiffs declared in the first count against the defendant as the acceptor of a bill of ex- change drawn by one Ruff, dated the 25 th of October, 1799; and directed to the defendant, whereby he was required two months after date to pay to the order of the drawer 23/. los. 6d., value received, which bill was afterwards indorsed by Ruff to one Jane Ruff, and by her to the plaintiffs. There were other general counts for money had and received, money paid, and upon an account stated. To which there was a plea of the general issue. At the trial before Le Blanc, J., at the last Worcester as- sizes, it appeared in evidence that Ruff, having furnished goods to the defendant to the amount of the bill, apphed to him for payment, when the defendant excused himself at that time, but said that if Ruff would draw on him a bill at two months from the 25th of October for the amount he should then have money and would pay it. Ruff afterwards drew the bill in question, dated 25th of October at two months, but it never was in fact presented to the defendant for his accept- ance; nor did he ever in fact accept it, otherwise than as is ' This case is cited in Wood's Byles on Bills and Notes, 302, 303; Norton on Bills and Notes, 93, 95, 98, loi; Ames on Bills and Notes, 171; Tiedeman on Commercial Paper, 5b, 220, 226; Benjamin's Chalmer's on Bills, Notes and Checks, 44; Daniel on Negotiable Instruments, 555, 558, 559. Note. — This case (Sec. 29) of Johnson v. Collings (i East, 98) (Eng), must be studied in connection with the case (Sec. 29a), of Coolidge v. Payson (2 Whea., 66); which latter case con- tains or lays down the present rule, where it has not been modi- fied by statute. 208 JOHNSON ET AL. V. COLLINS. [CHAP. 6, stated above in his promise to accept. It was said at the trial to be the practice at Bristol, where the defendant lived, not to accept bills or to have them presented for acceptance. Ruff, to whose own order it was made payable, having indor- sed the bill, afterwards passed it to the plaintiffs in discharge of an old debt; but no communication took place at the time between the plaintiffs and the defendant. After this and be- fore the bill became due Ruff became a bankrupt; and when the bill was due the plaintiffs presented it to the defendant for payment, who then declined it on account of Ruff's bankruptcy without an indemnity, admitting however that he owed the money either to Ruff or to Ruff's assignees. The learned judge was of opinion that a mere promise, such as this, to ac- cept a bill when it should be drawn, at least unless made to a third person, or accompanied at least with circumstances which might induce a third person to take the bill, (which was not the case here), did not amount to an acceptance, and therefore the plaintiffs were not entitled to recover on the first count. And that as there has been no communication be- tween these parties at the time, nor any consideration having passed as between them, there was no evidence to warrant a finding for the plaintiffs on either of the money counts: where- upon he directed a non-suit to be entered, with liberty to the plaintiffs to move to set aside and enter a verdict for the amount of their demand, if the court should be of opinion that they were entitled to recover on either of the counts. A rule nisi was accordingly obtained for this purpose on a former day. In support of the rule it was argued: — ist. A promise to accept a bill when drawn amounts in law to an acceptance. In Pillans and Rose v. Van Mierop and Hopkins (1765)' the plaintiffs having advanced money to one White upon the faith of a written assurance by letter from the defendants "that they would accept such bills as the plaintiffs should in a month's time draw upon them for 800/. upon the credit of White," the court after much deliberation held that whether it were an actual acceptance or a loan to White upon the credit of the defendants, it would equally bind the latter. '3 Burr., 1663 (1765). SEC. 29.] JOHNSON ET AL. V. COLLINS. 209 But Ld. Mansfield there said," "This amounts to the same thing as an acceptance. I will give the bill due honor is m effect accepting it. If a man agree that he will do the formal part, the law looks upon it, in the case of an acceptance of a bill, as if actually done." "An agreement to accept a bill to be drawn in future would, as it seems to me, by connection and relation bind on account of the antecedent relation. And I see no difference between its being before or after the bill was drawn."- "This agreement to honor the bill was a virt- ual acceptance of it.'"* Again, "A promise to accept is the- same as an actual acceptance." "The defendants have under- taken to honor the plaintiff's draft, therefore they are bound to pay it." The same doctrine was admitted in Mason v. Hunt (1779);* but that was a conditional acceptance, and the condition was afterwards broken. In Powell v. Monnier (1737)^ there was an assurance by letter that the bill should be accepted, which was holden sufficient to bind the drawee: but that was after the bill was drawn. 2dly. — Supposing this not to amount in law to an accept- ance, yet there is sufficient consideration to sustain a verdict for the plaintiffs on the money counts. The defendant owed Ruff this money; and his promise to honor the bill when drawn was an agreement to take as his creditor any person to whom Ruff should appoint the money to be paid. He then having by his indorsement appointed the money to be paid to the plaintiffs, it raises an assumpsit in law by the defendant to pay them so much. And the authority having been given by Ruff before his bankruptcy that event cannot vary the case. It was holden in Fenner v. Mears' that general indebi- tatus assumpsit would lie by the assignee of a respondentia bond against the obligor, who had before engaged by an in- dorsement on the bond to pay the same to any assignee: 'lb., 1669. ^Ib., 1673. nb., 1674. *Dougl., 297 (1779)- °i Atk., 611 (1737)- *2 Blak. Rep., 1269. Vide also Innes v. Dunlop, 8 Term Rep., 595, where the assignment of a Scotch bond was deemed a. good consideration to support an assumpsit here. 2IO JOHNSON ET AL. V. COLLINS. [CHAP. 6, though it was agreed that no action could have been main- tained on the bond itself by the assignee in his own name. It was there also admitted that if the obligor had paid the assignee, the former might have pleaded payment to an action on the bond brought by the obligee. And it was there consid- ered that the agreement amounted to a particular promise to the assignee whenever any such should be. It was said, that the contract was devised to operate upon subsequent assignments, and amounted to a declaration that upon such assignment the money borrowed should no longer be the money of A. but of B. his substitute. So here the agreement to accept amounts to a particular promise to the holder of the bill to whom it is negotiated to pay him the amount: it is money had and received to his use. Thus in Tatlock v. rfarris' a bill was accepted by the defendant paya- ble to the order of a fictitious person whose supposed indorse- ment was put upon it; so that being incapable of proof, no action could be maintained as upon the bill. But the court held that a bona fide indorsee for a valuable consideration might recover against the acceptor upon an impHed assumpsit for money paid and money had and received. Ld. Kenyon in giving judgment said, "it was an appropriation of so much money to be paid to the person who should become the holder of the bill." Again, in Israel v. Douglas^ A. being indebted to B. for brokerage, and B. to C. for money lent, B. gave an order to A. to pay C. the money due from A. to B., which order A. having accepted, a majority of the court held that C. might maintain an action against A. for money had and re- ceived. And Gould, J., expressly likened it to the case of a man having money due to another in his hands, which that other orders him to pay to a third person: and that there was no substantial difference, whether one in fact pays money to another for a third person, or whether he gives the other an order to pay over so much money, to which he assents: that in reason and sound law it was money had and received to the use of such third person. Wilson, J., who differed on ' 3 Term Rep., 174. ''■ I H. Blac, 239. SEC. 29.] JOHNSON ET AL. V. COLLINS. 211 that point, yet agreed that the action was maintainable on the count for the insimal computassent. There is this further reason for holding the defendant liable, because his conduct was calculated to deceive third persons and put them off their guard: for if there had been no such promise to pay, the plaintiffs would have resorted to Ruff at once, and not have deferred their application till after the bankruptcy when it was too late. Besides, there was a subsequent promise by the defendant to pay the bill to the plaintiffs if they would indemnify him against Ruff's assignees; and as the law will indemnify him that is the same thing. An Acceptance May be by Parole. — This is a question of great moment. It is much to be lamented that anything has been deemed to be an acceptance of a bill of exchange besides an express acceptance in writing; but I admit that the cases have gone beyond that line, and have determined that there may be a parole acceptance: that perhaps was going too far; but at any rate, the determinations have gone no further; and I am not disposed to carry them to the length now con- tended for, and to say that a promise to accept a bill before it is drawn is equally binding as if made afterwards. It is not generally true, that a promise to do a thing is the same thing in law as the actually doing it; it certainly is not so as applied to this case. This was a promise to accept a non-existing bill, which varies this case from all those which have been decided upon the same subject; and I know not by what law I can say that such a promise is binding as an ac- ceptance. The consequence is, that the plaintiffs cannot recover upon the count as upon an acceptance of a bill of exchange. As to the other ground, if we were to suffer the plaintiffs to recover on the general counts, we must say that a chose in action is assignable,' a doctrine to which I will never subscribe. I cannot, as at present advised, and upon the general view of it, agree with the case of Fenner v. Mears in Blak. Rep. The result of it, however, seems to be this, that the determination having been made according to equity and good conscience, the court would not disturb the verdict; 'Vide Forth v. Stanton, i Saund. Rep., 210, 211, and n. 2 by Serjt. Williams. JOHNSON ET AL. V. COLLINS. [CHAP. dy and I doubt whether the decision can be sustained on any other ground. The undertaking there indeed was in writings but I am not prepared to say that that makes any difference: though a distinction of that kind was much dwelt upon in another case as supplying a want of consideration:' but that has never been adopted since, and was afterwards expressly over-ruled in the case of Rann v. Hughes in the House of Lords." However, no question of that sort can arise here; and I am clearly satisfied that there is no evidence to support the promises laid in any of the counts. Grose, J., said, "It would be of most dangerous conse- quence to relax the rule of law to the extent here contended for. By the general rule a chose in action is not assignable, except by the custom of merchants. The assignment of a chose in action by a bill of exchange is founded on that law, and cannot be carried further than that will warrant it; and no authority has been cited to show that by the law merchant a mere promise to accept a bill to be drawn in future amounts to an actual acceptance of the bill when drawn. Then we have no authority to extend the rules which have been hitherto established. As to the general counts, if we were to permit the plaintiffs to recover on this evidence, it would be making all choses in action assignable, which cannot be contended for, and would throw the whole system into confusion." Le Blanc, J., said: In the case of Pierson v. Dunlop,^ Ld. Mansfield limited, and truly limited, the doctrine which had been before laid down in Pilans v. Van Mierop. He there says "It has been truly said as a general rule, that the mere answer of a merchant to the drawer of a bill, saying, He will duly honor it, is no acceptance; unless accompanied with circumstances which may induce a third person to take the bill by indorsement: but if there are any such circum- stances, it may amount to an acceptance, though the answer be contained in a letter to the drawer." Therefore, he ex- ' Vide the opinion of Wilmot, J., delivered in Pillans v. Van Mierop, 3 Burr., 1670, i. ■■=7 Term Rep., 350 n. [S. C, 4 Bro. Pari. Ca., 27, Toml. edit.] 'Cowp., 573. SEC. 29. J JOHNSON ET AL. V. COLLINS. 213 plains and limits his own rule which he had before delivered concerning such an acceptance, confining it to the case where credit is given by a third person upon the faith of such an assurance, on which he acts, and by which he is induced to take the bill. Ld. Kenyon, C. J., added, that he thought that the ad- mitting a promise to accept before the existence of the bill to operate as an actual acceptance of it afterwards, even with the qualification last mentioned, was carrying the doctrine of implied acceptances to the utmost verge of the law; and he doubted whether it did not even go beyond the proper bound- ary: though this case was not helped even by that opinion. Rule discharged Q). 'Vide Clark v. Cook, 4 East, 57; Wynne at al. v. Raikes et al, 5 East, 514; McEvers v. Mason et al. , 10 Johns. Rep., 207; Wilson V. Clements, 3 Mass. Rep., 9, etc. seq. : McKim v. Smith & Steene, i Hall's Amer. Law Journ., 486; Havens v. Griffin, Chip., 42. In Beawes' Lex Merc, 454, pi. 16, it is said, "If the pos- sessor (i. e. of a bill of exchange) hath neglected to demand acceptance before the drawer's failure, and the person to whom it is directed has advice thereof, he cannot be compelled to accept the draft, though previous to the knowledge of the drawer's mis- fortunes he had acquainted him with his intention to honor his bill, and even afterwards confesses that he should have done it, had it been presented and the acceptance demanded before the advice of the drawer's failure had reached him." And again, p. 466, pi. 112, "He that verbally or by letter has promised to accept any bills drawn on him for a third person's account, and he to whom the promise was made does in consequence thereof give the third person credit, relying on a punctual compliance; in this case, he that has engaged his word is obliged to fulfill it, or be answerable for all damages that shall proceed from a breach thereof, etc." 13 2 14 COOLIDGE ET AL. V. PAYSON ET AL. [CHAP. 6, SECTION 29a— Continued. COOLIDGE ET AT. v. PAYSON ET AL.' In the Supreme Court U. S., Feb., 1817. \_Reported in 2 Wheaion's Rep., 66; Condensed Reports U. S., vol. 4, P- JJ-] Decision. — (Mr. C. J. Marshall delivered the opinion of the court.) This suit was instituted by Payson & Co., as indorsers of a bill of exchange drawn by Cornthwaite & Gary, payable to the order of John Randall, against Coolidge & Co. as the acceptors. At the trial the holders of the bill on which the name of John Randall was indorsed, offered, for the purpose of prov- ing the indorsement, an affidavit made by one of the defend- ants in the cause, in order to obtain a continuance, in which he referred to the bill in terms which, they supposed, implied a knowledge on his part that the plaintiffs were the rightful owners. The defendants objected to the bill's going to the jury without further proof of the indorsement; but the court determined that it should go with the affidavit to the jury, who might be at liberty to infer from thence that the indorse- ment was made by Randall. To this opinion the counsel for the defendants in the Circuit Court excepted, and this court is divided on the question whether the exception ought to be sustained. On the trial it appeared that Coolidge & Co. held the proceeds of part of the cargo of the Hiram, claimed by Cornthwaite & Cary, which had been captured and libelled as 'This case is cited in Benjamin's Chalmers Bills, Notes and Checks; Norton on Bills and Notes, 97; Wood's Byles on Bills and Notes, 304, 308; Paige's Illustrative Cases on Commercial Paper, 60; Chitty on Bills, 284, 286; Daniel on Negotiable Instru- ments, 551, 560, 1799; Story on Bills of Exchange, 249, 462; Tiedeman on Commercial Paper, 220, 226, 500. See also the fol- lowing well discussed cases, Bank of Michigan v. Ely, 17 Wend. (N. Y.), 508 (1837); Exchange Bank v. Hubbard, 62 Fed. Rep., 112; Bank v. Recknagel, 109 N. Y., 482; Lindley v. First Nat. Bk., 76 la., 629; Exchange Bank v. Rice, 98 Mass., 288; Frank- lin Bk. V. Lynch, 52 Md., 270. SEC. 2ga.} COOLIDGE ET AL. Z). PAYSON ET AL. 2 15 lawful prize. The cargo had been acquitted in the District and Circuit Courts, but, from the sentence of acquittal, the captors had appealed to this court. Pending the appeal Cornthwaite & Cary transmitted to Coolidge & Co. a bond of indemnity, executed at Baltimore with scrolls in the place of seals, and drew on them for two thousand seven hundred dol- lars. This bill was also payable to the order of Randall, and indorsed by him to Payson & Co. It was presented to Cool- idge & Co., and protested for non-acceptance. After its protest Coolidge & Co. wrote to Cornthwaite & Cary a letter, in which, after acknowledging the receipt of a letter from them, with the bond of indemnity, they say, "This bond, comform- ably to our laws, is not executed as it ought to be; but it may be otherwise in your state. It will therefore be necessary to satisfy us that the scroll is usual and legal with you instead of a seal. We notice no seal to any of the signatures." " We shall write our friend Williams by this mail, andjwill state to him our ideas respecting the bond, which he will probably de- termine. If Mr. W. feels satisfied on this point, he will in- form you, and in that case your draft for two thousand dollars will be honored." On the same day Coolidge & Co. addressed a letter to Mr. Williams, in which, after referring to him the question respecting the legal obligation of the scroll, they say, "You know the object of the bond, and, of course, see' the propriety of our having one, not only legal, but signed -by sureties of unquestionable responsibility, respecting which we shall wholly rely on your judgment. You mention the last-'surety as being responsible; what think you of the others.'" In his answer to this letter, Williams says, " I am assured that the bond transmitted in my last isisufficient]for the pur- pose for which it was given, provided ^the partiesci possess the means; and of the last signer, I have nojhesitation in express- ing my firm belief of his being able to meet the whole amount himself. Of the principals I cannot speak with so much con- fidence, not being well acquainted with their resources. Un- der all circumstances, I should not feel -inclined to withhold from them any portion of the funds for which the bond was given." 2l5 COOLIDGE ET AL. V. PAYSON ET AL. [CHAP. 6, On the day on which this letter was written, Cornth- waite & Gary called on Williams, to inquire whether he had satisfied Coolidge & Co. respecting the bond. Williams stated the substance of the letter he had written, and read to him a part of it. One of the firm of Payson & Co. also called on him to make the same inquiry, to whom he gave the same information, and also read from his letter book the let- ter he had written. Two days after this, the bill in the declaration mentioned vv^as drawn by Cornthwaite & Cary, and paid to Payson & Co. in part of the protested bill of two thousand seven hundred dollars, by whom it was presented to Coolidge & Co. , who re- fused to accept it, on which it was protested, and this action brought by the holders. On this testimony, the counsel for the defendants insisted that the plaintiffs were not entitled to a verdict. The court, instructed the jury, that if they were satisfied that Williams, on the application of the plaintiffs, made after seeing the letter from Coolidge & Co. to Cornthwaite & Cary, did declare that he was satisfied with the bond referred to in that letter, as well with respect to its execution, as to the sufficiency of the obligors to pay the same; and that the plain- tiffs, upon the faith and credit of the said declaration, and also of the letter to Cornthwaite & Carv, and without having seen or known the contents -of the letter from Coolidge & Co. to Williams,, did receive and take the bill in the declaration mentioned, they were entitled to recover in the present action: and that it zvas no legal objection to snch recovery that the proTuise to accept the present bill was made to the drazvers thereof, previous to the existence of such bill, or that the bill had been taken in part payment of a pre-existing debt, or that the said Williams, in making the declarations aforesaid, did exceed the private instructions given to him by Coolido-e & Co. in their letter to him. To this charge the defendants excepted. A verdict was given for the plaintiffs, and judgment rendered thereon, which judgment is now before this court on a writ of error. The letter from Coolidge & Co. to Cornthwaite & Carey contains no reference to their letter to Williams which mio-ht SEC. 2ga.] COOLIDGE ET AL. V. PAYSON ET AL. 217 suggest the necessity of seeing that letter, or of obtaining in- formation respecting its contents. They refer Cornthwaite & Gary to WilHams, not for the instructions they had given him, but for his judgment and decision on the bond of indemnity. Under such circumstances, neither the drawers nor the hold- ers of the bill could be required to know, or could be affected by, the private instructions given to Williams. It was enough for them, after seeing the letter from Coolidge & Co. to Cornthwaite & Cary, to know that Williams was satisfied with the execution of the bond and the sufficiency of the ob- ligors, and had informed Coolidge & Co. that he was so satis- fied. This difficulty being removed, the question of law which arises from the charge given by the court to the jury is this: Does a promise to accept a bill amount to an acceptance to a person who has taken it on the credit of that promise, al- though the promise was made before the existence of the bill, and although it is drawn in favor of a person who takes it for a pre-existing debt? In the case of Pillans & Rose v. Van Mierop & Hopkins (1765),' the credit on which the bill was drawn was given be- fore the promise to accept was made, and the promise was made previous to the existence of the bill. Yet in that case, after two arguments, and much consideration, the Court of King's Bench (all the judges being present and concurring in opinion) considered the promise to accept as an acceptance. Between this case and that under consideration of the court, no essential distinction is perceived. But, it is con- tended,, that the authority of the case of Pillans & Rose v. Van Mierop & Hopkins is impaired by subsequent decisions. In the case of Pierson v. Dunlop et al. ,^the bill was drawn and presented before the conditional promise was made on which the suit was instituted. Although, in that case, the holder of the bill recovered as on an acceptance, it is supposed that the principles laid down by Ld. Mansfield, in delivering his opinion, contradict those laid down in Pillans & Rose v. Van Mierop & Hopkins. His lordship observes, "it has been '3 Burr., 1663 (1765). 'Cowp., 571. 2l8 COOLIDGE ET AL. V. PAYSON ET AL. [CHAP. 6, truly said, as a general rule, that the mere answer of a mer- chant to the drawer of a bill, saying, 'he will duly honor it,' is no acceptance, unless accompanied with circumstances which may induce a third person to take the bill by indorse- ment; but if there are any such circumstances, it may amount to an acceptance, though the answer be contained in a letter to the drawer." If the case of Pillans & Rose v. Van Mierop & Hopkins had been understood to lay down the broad principle that a naked promise to accept, amounts to an acceptance, the case of Pierson v. Dunlop, certainly narrows that principle so far as to require additional circumstances proving that the person on whom the bill was drawn, was bound by his promise, either because he had funds of the drawer in his hands, or because his letter had given credit to the bill, and induced a third person to take it. It has been argued, that those circumstances to which Ld. Mansfield alludes, must be apparent on the face of the letter. But the court can perceive no reason for this opinion. It is neither warranted by the words of Ld. Mansfield, nor by the circumstances of the case in which he used them. "The mere answer of a merchant to the drawer of a bill, saying: he will duly honor it, is no acceptance unless accompanied with circumstances," etc. The answer must be " accompanied vfith circumstances;" but it is not said that the answer must contain those circumstances. In the case of Pierson v. Dunlop, the answer did not contain such circumstances. They were not found in the letter, but were entirely extrinsic. Nor can the court perceive any reason for distinguishing between circum- stances which appear in the letter containing the promise, and those which are derived from other sources. The great motive for construing a promise to accept, as an acceptance, is, that it gives credit to the bill, and may induce a third person to take it. If the letter be not shown, its contents, whatever they may be, can give no credit to the bill; and if it be shown, an absolute promise to accept will give all the credit to the bill which a full confidence that it will be ac- cepted can give it. A conditional promise becomes absolute when the condition is performed. SEC. 29a.] COOLinGE ET AL. V. PAYSON ET AL. 2I9 In the case of Mason v. Hunt (1779)', Ld. Mansfield said, "there is no doubt but an agreement to accept may amount to an acceptance; and it may be couched in such words as to put a third person in a better condition than the drawee. If one man, to give credit to another, makes an absolute promise to accept his bill, the drawer, or any other person, may show such promise upon the exchange to get credit; and a third person, who should advance his money upon it, would have nothing to do with the equitable circum- stances which might subsist between the drawer and acceptor.'' What is it that "the drawer, or any other person, may show upon the exchange.'" It is the promise to accept — the naked promise. The motive to this promise need not, and cannot be examined. The promise itself, when shown, gives the credit; and the merchant who makes it is bound by it. The cases cited from Cowper^ and Douglass are, it is admitted, cases in which the bill is not taken for a pre-existing debt, but is purchased on the credit of the promise to accept. But in the case of Pillans v. Van Mierop, the credit was given before the promise was received or the bill drawn; and in all cases the person who receives such a bill in payment of a debt, will be prevented thereby from taking other means to obtain the money due to him. Any ingredient of fraud would, unquestionably, affect the whole transaction; but the mere circumstance, that the bill was taken for a pre-existing debt had not been thought sufficient to do away with the effect of a promise to accept. In the case of Johnson and another v. Collings (1800),^ Ld. Kenyon shows much dissatisfaction with the previous decisions on this subject; but it is not believed, that the judg- ment given in that case would, even in England, change the law as previously established. In the case of Johnson v. Collings, the promise to accept was in a letter to the drawer, and is not stated to have been shown to the indorser. Consequently, the bill does not ap- pear to have been taken on the credit of that promise. It ' I Doug., 296 (1779). '' Cowper, 571. ^ I East, 98 (1800). See Sec. 29 of this text. 2 20 COOLIDGE ET AL. V. PAYSON ET AL. [CHAP. 6, was a mere naked promise, unaccompanied witli circumstan- ces which might give credit to the bill. The counsel con- tended, that this naked promise amounted to an acceptance; but the court determined otherwise. In giving his opinion, Le Blanc, J., lays down the rule in the words used by Ld. Mansfield, in the case of Pierson v. Dunlop. Ld. Kenyon said, in that case, that "this was carrying the doctrine of implied acceptances to the utmost verge of the law; and he doubted whether it did not even go beynd it. In Clarke and others v. Cock,^ the judges again express their dissatisfaction with the law as established, and their regret that any other act than a written acceptance on the bill had ever been deemed an acceptance. Yet they do not under- take to overrule the decisions which they disapprove. On the contrary, in that case (Clarke v. Cock), they unanimously declared a letter to the drawer promising to accept the bill, which was shown to the person .who held it, and took it on the credit of that letter, to be a virtual acceptance. It is true, in the case of Clarke v. Cock, the bill was made before the promise was given, and the judges, in their opinions, use some expressions which indicate a distinction between bills drawn before and after the date of the promise; but no case has been decided on this distinction; and in Pillans & Rose v. Van Minerop & Hopkins, the letter was written before the bill was drawn. The court can perceive no substantial reason for this dis- tinction. The prevailing inducement for considering a promise to accept, as an acceptance, is that credit is thereby given to the bill. Now, this credit is given as entirely by a letter written before the date of the bill as by one written after- wards. It is of much importance to merchants that this question should be at rest. Upon a review of the cases which are re- ported, this court is of opinion, that a letter written within a reasonable time before or after the date of a bill of ex- change, describing it in terms not to be mistaken, and prom- ising to accept it, is, if shown to the person who afterwards U East, 57. SEC. 29a.] COOLIDGE ET AL. V. PAYSON ET AL. 221 takes the bill on the credit of the letter, a verbal acceptance binding the person who makes the promise. This is such a case. There is, therefore, no error in the judgment of the circuit court, and it is affirmed with costs. Judgment affirmed.' 'See the case of Boyce v. Edwards, 4 Peters, 121; Parsons v. Armor & Oakey, 3 Peters, 426; Townsley v. Sumrall, 2 Peters, 182. In order that a promise to accept a bill not yet drawn shall be binding upon the promissor the bill must be taken: I St, by the holder upon the faith of the promise; 2d, the bill when drawn must follow the terms of the promise; 3rd, the promise should describe the bill to be drawn; 4th, the bill must be drawn within a reasonable time; 5th, the promise must be unconditional; and, 6th, the promise should be in writing. (In some jurisdic- dons it must be in writing. ) HOARE ET AL. V. CAZENOVE ET AL. [CHAP. 6, SECTION 30. A BILL OF EXCHANGE WHEN DISHONORED MAY BE ACCEPTED FOR HONOR OR SUPRA PROTEST. SUCH ACCEPTOR IS NOT LIABLE THEREON UNTIL THE BILL HAS BEEN PRESENTED TO THE ORIGINAL DRAWEE FOR PAYMENT AT MATURITY AND AGAIN PROTESTED. HOARE ET AL. v. CAZENOVE ET AL.^ In the Court of King's Bench, Nov. 27TH, 1812. {^Reported in 16 East's Rep., jpi.] The Form of Action. — In an action by the indorsees of the bill of exchange hereinafter set forth against the acceptors, the declaration contained the usual averments, (the 1st count averring that the bill was presented for pay- ment to the drawees and refused, the 2d count omitting that averment,) and charged that the bill having been refused acceptance by the drawees, and being thereupon duly pro- tested for non-acceptance, the defendants, having notice thereof, accepted the bill for the honor of the first indorsers. The defendants pleaded the general issue; and at the trial before Ld. Ellenborcugh, Ch. J. (1811), a verdict was found for the plaintiffs for 816/., subject to the opinion of the court on the following case. The bill of exchange stated in the declaration was drawn by S. Hanbury at Hamburgh, on the 23d of July, 1810, upon Penn and Hanbury of London, in favor of Quevremont Balleydier & Co. , for 800/. sterling, at 130 days after date. It was specially indorsed by Quevremont Balleydier & Co., to Perier Freres; by them to F. Farmbacher, all of whom re- side abroad; by F. Farmbacher to Greffuhle, Freres & Co., who reside here; and by the latter to the plaintiffs, who are bankers in London. The first of the set of bills was trans- -This case is cited in Chitty on Bills, 347, 344, 345, 349, 350; Daniel on Negotiable Instruments, 521, 1527; Wood's Byles on Bills and Notes, 402, 404; Benjamin's Chalmers on Bills, Notes and Checks, 53, 181, 229; Story on Bills of Exchange, 121, 123, 125, 254, 256, 261, 344, 363, 396, 423; Norton on Bills and Notes, 149, 152; Tiedeman on Commercial Paper, 228, 310, 313; Ames on Bills and Notes (Vol. 2), 790. SEC. 30. J HOARE ET AL. V. CAZENOVE ET AL. 223, mitted, with the first special indorsement only, to the de- fendants, to procure acceptance: and they accordingly presented it for acceptance to Penn & Hanbury, who refused; whereupon the defendants caused a protest to be duly made for non-acceptance. The second of the set of bills was after- wards transmitted, indorsed so as to pass the property of Greffuhle, Freres & Co. , with a reference upon the face of the bill to the defendants in the case of need. Greffuhle, Freres & Co., applied to the defendants for the first bill, and to know if it had been accepted: upon which the defendants delivered the first bill to them with the following acceptance by themselves: " accepted under protest for the honor of the first indorsers." The bill became due on the 3d of December, 1 8 10, but was not presented to the drawees, Penn & Hanbury, for payment ; nor was it proved to have beeji protested for non-payment. The defendants refused to pay the bill, in con- sequence of orders from the first indorsers. If the plaintiffs were entitled to recover, the verdict was to stand; if not, a non-suit was to be entered. This case was argued in 181 1, and the court reserved it for further consideration. Decision.— Ld. Ellenborough, Ch. J., delivered the judgment. This was an action founded upon a set of bills of exchange for 800/., accepted by the defendants for the honor of the first indorsers. The set was drawn by Samuel Hanbury at Hamburgh, 23d July, 18 10, upon Penn & Hanbury of London, and was payable to Quevremont Balleydier&Co., at 1 30 days after date. The first of the set was transmitted to the defendants, that they might procure acceptance, but Penn & Hanbury refused to accept, and the defendants caused it to be protested for non-acceptance. The second of the set was indorsed to Greffuhle, Freres & Co. ; they applied it to the defendants for the first, and the defendants delivered to them the first, accepted by themselves, for the honor of the first indorsers, that is to say, Quevremont Balleydier & Co. The bill became due the 3d oi December, 18 10, but was not pre- sented to Penn & Hanbury, the drawees, for payment at maturity, nor protested for non-payment. In the first count it was stated, contrary to the fact, that it was presented to 224 HOARE ET AL. V. CAZENOVE ET AL. [CHAP. 6, the drawees for payment, and refused: in the second count this averment was wholly omitted. The defendants, (in con- sequence of orders from the first indorsers,) refused to pay it. The Nature of the Liability of an Acceptor for Honor.— The question, in this case, is, whether a presentment to the drawees, Penn & Hanbury, for payment at maturity, and a protest for non-payment by them, is, or is not essential as a previous requisite to the maintaining an action against these defendants, the acceptors for the honor of the first indorsers; and this depends upon the nature and obligation of an acceptance for the honor of the drawer or indorser. If an acceptance in these terms be an engagement by the person giving it, that he will pay the bill when it becomes due, and entitles the holder to look to him in the first instance, without a previous resort to any person, the plaintiffs are in that case entitled to recover upon their second count: but if such an acceptance be in its nature qualified, and amount to a col- lateral engagement only, z. e., an undertaking to pay if the original drawee, upon a presentment to him for payment, should persist in dishonoring this bill, and such dishonor by him should be notified, by protest, to the person who has accepted, for the honor of the indorser, then the necessary steps have not been taken upon this bill, and the plaintiffs cannot recover. And such, after much consideration, we are of opinion is the case. It is remarkable that no directly adjudged case upon this question is to be found; although the custom of merchants relative to this subject, is stated in the case of Brunetti v. Lewin,' in K. B., affirmed in error in the Exchequer Chamber, in favor of the original plaintiff, Brunetti. Lutwytch, in his report, says that he could not discover that any exception was taken to the validity of the custom, which he states as shortly this, "that if any merchant (for the honor of him to whom a foreign bill of exchange was first payable, and who had first indorsed the bill to another) shall pay the said bill to the last indorsee of it, t/ic bill being before then protested for non- payment, then the merchant to whom the bill was first pay- ' I Lutw., 896 (1781). SEC. 30. J HOARE ET AL. V. CAZENOVE ET AL. 225 able, and who first indorsed the bill, shall have an action against the merchant who first took upon himself the obliga- tion to pay the bill for the honor of the drawer (the bill having been first protested likewise for non-acceptance, for value of the bill and all charges)." Thus two protests, i. e. , for non-payment as well as non- acceptance were in this case held necessary by the custom of merchants. The immediate point argued in error appears to have been whether it was sufficienly shown, agreeably to the custom alleged, that payment was, in that case, in fact made to the last indorsee, so as to found the claim of the first indorser, to payment to be made by the acceptor for honor, with the terms of the custom; but it certainly was also open to the plaintiff in error, to have insisted upon the validity of any part of the custom alleged; of which custom the protest for non-payment previously to the payment to the indorsee, and the subsequent claim upon the acceptor for honor, was a material part. In that case the undertaking for the honor of the drawer was not in the form of an acceptance upon the bill, but of "a note in writing for the honor of the drawer to pay the bill upon return;" but this, "according to Pothier on Bills of Exchange,"' is a mode substituted by "recent usage in the place of a signature by the person giving the caution on the bill itself; " and though the mode be different, the effect is for all substantial purposes the same. Malyne, p. 273, in his 5th observation, says (speaking of the acceptor for the honor of the bill, whom he had just mentioned in his foregoing observation), " if this man at the time doth pay the said bill, because the party upon whom it was directed doth not, yet he is to first make, before he doth pay the same, a protest, with a declaration that he hath paid the same for the honor of the bill of exchange, whereby to re- ceive the money again of him that hath made the bill of ex- change. But it may be said that according to this position in Malyne, though a protest may be necessary to be made against the drawee by the acceptor for honor, to entitle him to recover against the party for whose honor he has accepted, yet that such protest for non-p ayment is not equally necessary ' 4 Des Avals. 226 HOARE ET AL. V. CAZENOVE ET AL. [CHAP. 6, to be made against the drawee, to enable any other holder to recover against the acceptor for honor himself. But the next observation, in same page of Malyne, lays down the obligation more generally, and as attaching upon every holder of a bill (whether accepted, or not accepted, in whose hands it remains unpaid, up to the time of the ap- pointed payment), the duty of making a protest for the non- payment of it. His words are these: " If a bill of exchange be accepted, and nevertheless not paid, and that it be not ac- cepted as aforesaid, and remaineth unpaid, then must you cause the notary to make a second protest (assuming that the bill had been already protested for non-acceptance) for the non payment of it." Pothier said: " When after a protest made for want of acceptance on the part of him upon whom the bill is drawn, a third person has intervened, and has accepted the bill for the honor of the drawer, or some indorser, all agree that at the expiration of the time of grace, the protest ought to be made not only to him upon whom the bill is drawn, and who has refused to accept it, but to the third person, who has ac- cepted it for honor." I am aware that Beawes in his Lex Mercatoria, p. 421 s. 43, says, " He that accepts a bill upon protest, puts himself absolutely in the stead of the first ac- ceptant, and is obliged to make the payment without any ex- ception, and the possessor (/. c. the holder) hath the same right and law against such an acceptor as he would have had against the first intended one, if he had accepted." The lit- eral sense of these words certainly seems to place this writer at variance with the authorities above cited; and if that were necessarily the case, one would not be disposed very readily to surrender the custom of merchants, as alleged on record, and not questioned in error in the case of Brunetti v. Lewin,' and the positions which are to be found in Malyne and Poth- ier (the latter, a most learned and eminent writer upon every subject connected with the law of contracts, and intimately acquainted with the law merchant in particular). The use and convenience, and, indeed, the necessity of a protest upon foreign bills of exchange, in order to prove, in ' I Lutw., 896. SEC. 30.] HOARE ET AL. V. CAZENOVE ET AL. 22? many cases, the regularity of the proceedings thereupon, is too obvious to warrant us in dispensing with such an instru- ment in any case where the custom of merchants, as reported in the authorities of law, appears to have required it. And, in- deed, the reason of the thing, as well as the strict law of the case, seems to render a second resort to the drawee proper, when the unaccepted bill still remains with the holder; for ef- fects often reach the drawee, who has refused acceptance in the first instance, out of which the bill may and would be sat- isfied, if presented to him again when the period of payment had arrived. And the drawer is entitled to the chance of benefit to arise from such second demand, or at any rate to the benefit of that evidence which the protest affords, that the demand has been made duly without effect, as far as such evidence may be available to him for purposes of ulterior re- sort. Upon the whole, therefore, we are of opinion that the postea must be delivered to the defendants.* * The Contract of an Acceptor Supra Protest. ^When a person accepts a bill for honor he thereby agrees that he will, on due presentment for payment at maturity, pay the bill according to the terms of his acceptance, provided it shall not have been paid by the drawee and provided further that it shall have been protested for non-payment and notice of dishonor duly given him. Schofield v. Bayard et. al., 3 Wend., 488; Baring v. Clark, 19 Pick., 220. Acceptance for Honor. — For Wliom Made. — Unless the acceptance for honor expressly states for whom it is made it is to be presumed to have been made for the honor of the drawer. Acceptor for Honor — To Whom Liable. — An acceptor for honor is liable to the holder and to all parties to the bill sub- sequent to the party for whose honor he has accepted it. Hoare v. Cazenove, 16 East, 391. 2 28 PRICE V. NEAL. [CHAP. 6, SECTION 31. THE DRAWEE, BY ACCEPTING A BILL, THEREBY ADMITS THE GENUINENESS OF THE DRAWER'S SIGNATURE AND IS THEREAFTER ESTOPPED FROM DENYING THE SAME.* PRICE V. NEAL.i In the King's Bench, Nov. i6th, 17G2. {^Reported in j Burrows, 1334.] The Form of Action. — This was an action upon the case brought by Price against Neal; wherein Price declares that the defendant Edward Neal was indebted to him in 80/. for money had and received to his the plaintiff's use; and damages were laid to 100/. The general issue was pleaded; and issue joined thereon. The Facts. — It was proved at the trial, that a bill was drawn as follows: "Leicester, 22 November, 1760. Six weeks after date pay Mr. Rogers Ruding or order forty pounds, value received for Mr. Thomas Ploughfor; as advised by, Sir, your humble servant Benjamin Sutton. To Mr. John Price in Bush-lane, Cannon-street, London; indorsed ' R. Ruding, Antony Topham, Hammond and Laroche. Received the contents, James Watson and Son: witness Edward Neal.'" *This question arose for the first time in 1733, ^^^ '^^ case of Jenys v. Fawler et al. (2 Strange, 946). This was an action by an indorsee against the acceptor. The defendant (acceptor) offered to prove that the bill was forged, by calling persons who were acquainted with the handwriting of the drawer, and who would swear that they did not believe it to be his hand. But the Chief Justice held that such evidence was not admissible, from the danger to negotiable contracts, and because a man might with de- sign write contrary to his usual method. He strongly intimated that even actual proof of forgery would not excuse the defendant against their own acceptance, which had given the bill credit to the indorsee (plaintiff). 'This case is also cited in Daniel on Negotiable Instruments, 533, 1225; Norton on Bills and Notes, 58, 143, 144, 313; Wood's Byles on Bills and Notes, 319, 493; Benjamin's Chalmers on Bills, Notes and Checks, 242; Story on Bills, 113, 262, 263, 411; Chitty on Bills of Exchange, 307, 261, 291, 361, 431, 504, 638; Tiede- man on Commercial Paper, 230. SEC. 31.] PRICE V. NEAL. 229 That this bill was indorsed to the defendant for a valu- able consideration; and notice of the bill left at the plaintiff's house, on the day it became due. Whereupon the plaintiff sent his servant to call on the defendant, to pay him the said sum of 40/. and take up the said bill: which was done accordingly. That another bill was drawn as follows: "Leicester, ist February, 1761. Sir, six weeks after date pay Mr. Rogers Ruding or order forty pounds, value received for Mr. Thomas Ploughfor; as advised by, Sir, your humble servant Benjamin Sutton. To Mr. John Price in Bush-lane, Cannon-street, London." That this bill was indorsed, "R. Ruding, Thomas Watson and Son. Witness for Smith, Right & Co." That the plaintiff accepted this bill, by writing on it, "accepted, John Price;" and that the plaintiff wrote on the back of it, "Messieurs Freame & Barclay, pray pay forty pounds for John Price." That this bill so accepted was indorsed to the defendant for a valuable consideration, and left at his bankers for pay- ment: and was paid by order of the plaintiff, and taken up. Both these bills were forged by one Lee, who has been since hanged for forgery. The defendant Neal acted innocently and bona fide, without the least privity or suspicion of the said forgeries or of either of them; and paid the whole value of those bills. The jury found a verdict for the plaintiff, and assessed damages 80/. and costs 40J. subject to the opinion of the court upon this question: — "Whether the plaintiff, under the circumstances of this case, can recover back, from the defendant, the money he paid on the said bills, or either of them." Claim of the Plaintiff. — The plaintiff argued that he ought to recover back the money, in this action; as it was paid by him by mistake only, upon the supposition "That these were true genuine bills;" and as he could never recover it against the drawer, because in fact no drawer exists; nor against the forger, because he is hanged. He owned that in a case at Guildhall, of Jenys v. Faw- 230 PRICE V. NEAL. [chap. 6, ler et al.' (an action by an indorsee of a bill of exchange brought against the acceptor), Ld. Raymond would not admit the defendants to prove it a forged bill, by calling persons acquainted with the hand of the drawer, to swear "That they believed it not to be so;" and he even strongly incHned, "That actual proof of forgery would not excuse the defend- ants against their own acceptance, which had given the bill a credit to the indorsee." But he urged, that in the case now before the court, the forgery of the bill does not rest in belief and opinion only; but has been actually proved, and the forger executed for it. Thus it stands even upon the accepted bill. But the plaintiff's case is much stronger upon the other bill which was not accepted. It is not stated, ''T\\-a.\ that \i\\\ ^-as accepted before it was negotiated;" on the contrary, the consideration for it was paid by the defendant, before the plaintiff had seen it. So that the defendant took it upon the credit of the in- dorsers, not upon the credit of the plaintiff; and therefore the reason, upon which Ld. Raymond grounds his inclination to be of opinion "That actual proof of forgery would be no ex- cuse," will not hold here-. Claim of Defendant. — The defendant argued that the plaintiff was not entitled to recover back this money from the defendant. He denied it to be a payment by mistake; and insisted that it was rather owing to the negligence of the plaintiff; who should have inquired and satisfied himself " Whether the bill was really drawn upon him by Sutton, or not." Here is no fraud in the defendant; who is stated " to have acted inno- cently and bona fide, without the least privity or suspicion of the forgery; and to have paid the whole value for the bills." (Ld. Mansfield stopped him from going on; saying that this was one of those cases that could never be made plainer by argument.) Decision. — It is an action upon the case, for money had and received to the plaintiff's use. In which action, the plain- tiff can not recover the money, unless it be against conscience ' 2 Strange, 946. See other cases upon same point; White v. . Continental Bk., 64 N. Y., 316; Ellis v. Ohio Ins. Co., 4 Ohio ., 628; Bank of U. S. v. Bank of Georgia,' 10 Wheat., 333; Peo- a R. R. Co. V. Neill, 66 111., 269. SEC. 3I-] PRICE ». NEAL. 23I in the defendant, to retain it: and great liberality is always allowed, in this sort of action. But it can never be thought unconscientious in the de- fendant, to retain this money, when he has once received it upon a bill of exchange indorsed to him for a fair and valuable consideration, which he has bona fide ^■saA, without the least privy or suspicion of any forgery. Here was no fraud; no wrong. It was incumbent upon the plaintiff, to be satisfied, "That the bill drawn upon him was the drawer s hand,'' before he accepted or paid it: but it was not incumbent upon the defendant, to inquire into it. Here was notice given by the defendant to the plaintiff of a bill drawn upon him: and he sends his servant to pay it and take it up. The other bill, he actually accepts: after which acceptance, the defendant innocently and bona fide discounts it. The plaintiff lies by, for a considerable time after he has paid these bills; and then found out " That they were forged;" and the forger comes to be hanged. He made no objection to them, at the time of paying them. Whatever neglect there was, was on his side. The defendant had actual en- couragement from the plaintiff himself, for negotiating the second bill, from the plaintiff's having without any scruple or hesitation paid the first: and he paid the whole value, bona fide. It is a misfortune which has happened without the de- fendant's fault or neglect. If there was no neglect in the plaintiff, yet there is no reason to throw off the loss from one The Drawee of a Bill or Check Must Know the Hand- •writing of the Drawer. — The rule is well settled that the drawee of a check is bound, at his peril, to know the handwriting of the drawer; and if he pays a check to which the signature of the drawer was forged, he must suffer the loss, as between himself and the drawer, or an innocent holder to whom he has made payment. As between himself and the drawer, he undertakes that he will pay- no checks, except such as have the genuine signature of the drawer,, which he assumes and is presumed to know. The drawee is presumed to know or to be acquainted with the signature of the drawer and will not be permitted to recover the money back from an innocent holder who is not presumed to know or to have such knowledge. Drawee not Presumed to be Acquainted with the Handwriting in the Body of a Bill or Check. — While the drawee is presumed to be acquainted with the handwriting of the 232 PRICE V. NEAL. [chap. 6, innocent man upon another innocent man: but, in this case, if there was any fault or negligence in any one, it certainly was in the plaintiff, and not in the defendant. Rule. — That the postea be delivered to the defendant. drawer, there is no presumption that he is acquainted with the handwriting in the body of the bill or check, in as much as these contracts are often filled up in the handwriting of persons other than the drawer. If the rule were otherwise, the drawee could never safely pay a check filled up in a handwriting that was new to him, until he had first satisfied himself by inquiry from the drawer, whether the contract had been properly filled up. Such a rule would greatly interfere and delay commercial transactions and would to a very large extent defeat the very purpose for which these contracts were created. The rule is, therefore, well settled, that if the drawee, in good faith, and without negligence, pay even to an innocent holder a bill or check, which has been fraudulently al- tered in its body, — in amount — after it left the hands of the drawer, he will, ordinarily, be entitled to recover back, from the persons to whom it was paid, the excess over the true amount of the check. In the Bank of Commerce v. Union Bank, 3 Const., 234, Ruggle, J., in discussing this specific question says: ". The payment of a bill of exchange by the drawee is ordinarily an admission of the draw- er's signature, which he is not, afterwards, at liberty to dispute. The drawee is supposed to know the handwriting of the drawer, who is usually his customer or correspondent. As between him, therefore, and an innocent holder, the payer (drawee), from his im- puted negligence, must bear the loss." To support this statement Ruggles, J., cites Price v. Neal, supra, and "\ Wilkinson v. Suteridge, I Strange, 648. See for a general discussion of these questions, U. S. Bank v. Bank of Georgia, 10 Wheaton, 333, 353; Canal Bank v. Albany Bank, i Hill, 287, 295; Redington v. Woods, 45 Cal., 406, 418; Holt v. Ross, 54 N. Y., 472, 475; Peoria Ry. Co. v. Neill, 16 III, 269, 270; McKIeroy v. Southern Bank, 14 La. An., 458;Jenys V. Fawler, 2 Strange, 946 (1732); Ellis v. Ohio life etc., Co., 4 Ohio St., 628; Goetz v. Bank, 119 U. S., 556. What the Drawee Warrants or Admits by Accepting a Bill— The General Rule.— It may be stated as a general rule that the drawee by his acceptances admits and is therefore estop- ped from denying: 1. The signature of the drawer. 2. That he has funds, in his hands, of the drawer with which to pay the bill. 3. That the drawer has capacity to draw, /. e., that the drawer is not an infant, a bankrupt, or a fictitious person; and 4- That the payee named in the bill has full capacity to in- dorse the bill. Hortsman V. Henshaw, 11 How., 177- Braith- waite V. Gardnier, 8 Q. B., 473; Taylor v. Croker, 4 Esp., i8q- Drayton v. Dale, 2 Barn. & C, 293. SEC. 32.] BANK OF COMMERCE V. UNION BANK. 233 SECTION 32. THE DRAWEE, BY ACCEPTING A BILL, IS NOT THEREBY ESTOPPED FROM SHOWING, SUBSEQUENTLY THAT THE BODY OF THE BILL HAS BEEN ALTERED. BANK OF COMMERCE v. UNION BANK.' In the Court of Appeals of New York, April, 1850. [^Reported in 3 Comstock, 230 ; 3 N. Y., 230. J The Form of Action.— The Bank of Commerce brought assumpsit in the Superior Court of the city of New York, against the Union Bank, to recover money paid by mistake. On the trial before Sanford, J., the case was this: On the 1 8th of December, 1847, the New Orleans Canal and Banking Company drew a draft on the Bank of Commerce in New York, payable to the order of "J. Durand,'' for one hundred and five dollars. After the draft was issued it was fraudulently altered in several respects, and among others, by the substitution of the word "thousand" for "hundred," and the name " Bonnett" instead of "Durand," so that it ap- peared to be a draft for one thousand and five (instead of one hundred and five) dollars, and payable to the order of J. Bonnet (instead of J. Durand). In this altered condition the Union Bank in New York received the draft from the State Bank of Charleston for collection, and credited the amount to that bank. The Bank of Commerce, on the draft being pre- sented by the Union Bank, paid it to the latter. Two days afterwards the Bank of Commerce received advices from the New Orleans Canal and Banking Company, and then ascer- tained the alterations in the draft. Thereupon the draft was returned to the Union Bank, and the money, which had been paid, demanded; but payment was refused. The evidence being closed, the court charged the jury ' This case is also cited in Daniel on Negotiable Instruments, 533; 349a, 540, 1361, 1362, 1384, 16543, 1651, 1659; Norton on Bills and Notes, 58, 143, 145, 148, 238; Story on Bills of Ex- change, 113, 264; Tiedeman on Commercial Paper, 230, 394, 399, 451; Benjamin's Chalmers on Bills, Notes and Checks, 215; Bige- low on Bills and Notes, 188. 234 BANK OF COMMERCE V. UNION BANK. [CHAP. 6, that if they were satisfied the draft had been altered in the manner before mentioned, after it was issued by the drawers, and that the plaintiffs paid the amount of it, as altered, by mistake, and without knowledge of or reason to suspect the alterations, they were entitled to recover the amount of money so paid. Also that the rule requiring a banker to know the handwriting of his customer, as to the signature to a check or draft, did not extend to the filling up of the body thereof; and that paying the draft in question under the circumstances was not of itself evidence of any negligence or want of due caution on the part of the plaintiffs. There was an exception to the charge and to the refusal of the court to charge certain propositions as requested. The plaintiffs had a verdict for $1,035.38, which the Superior Court refused to set aside, and after judgment the defendants appealed to this court. The Claim of Appellants. — The appellants claimed: — 1st. That there is no rule that the banker must know the handwriting of his customer as to his signature, but the rule is "that the banker shall take care that he do not pay away his customer's money without sufficient authority for that pur- pose; and if paid on a forged order, he must bear the loss, and it is immaterial whether the order was forged wholly or in part. It is the banker's duty to see that the check is genu- ine in all respects.' The attempt to establish the principle that a different degree of scrutiny is required in examining the body of a draft by the person on whom it is drawn, from that required in examining the signature of the drawer, is utterly fallacious and ought to be discountenanced. 2d. The second proposition laid down in the second division of the judge's charge, is "that paying the draft, under the circumstances, was not of itself evidence of any negli- gence or want of due caution on the part of the plaintiffs." This assumes that which it is the province of the jury to find. The jury were to judge of circumstances, and of negligence or no negligence.'' 'Hallv. Fuller, 5 Barn. & Cress., 750; Chitty on Bills, 288, ed. of 1839; see also Smith v. Mercer, 6 Taunt., 75. ^ Price v. Neal, 3 Burr., 1355. SEC. 32. J BANK OF COMMERCE V. UNION BANK. 235 3rd. The court erred in refusing to charge the jury, as requested, that the drawee of a draft is bound, before accept- ing or paying the same, to know its genuineness, and it is negligence in him not to inform himself whether the draft is genuine or not; and if he accepts or pays it (unless upon mis- representation), that is, an admission of its genuineness, which concludes him.' 4th. Even if there was no negligence on the part of the plaintiff — still, if there were none (and no fraud) on the part of the defendants, there is no reason why one innocent party should suffer rather than the other, and the law therefore leaves the parties in the same condition in which it found them.^ If, when the defendants presented the draft in ques- tion for payment, they held it in good fath, and for a valuable consideration; or if the party from whom they received it so held it, when he passed it to them, and if upon such presenta- tion the plaintiff's bank paid the amount of it to them, with- out being induced to do so by any fraud, deceit, or untrue representation of the defendants, this action could not be maintained. 5th. The only ground upon which the respondent claims a right to recover in this case, is that the amount of the altered draft was paid by mistake. That action can only be maintained where it is against conscience for the defendant to retain the money. Here there is no pretense that the appel- lants can not conscientiously retain the money, for they have paid out in good faith, and without fault, all that they claim of respondents.' The Claim of Respondents.— The respondents claimed: 'Price V. Neal, 3 Burr., 1355; Markle v. Hatfield, 2 John., 462, last paragraph in opinion of Kent, C. J.; Bass v. Kline, 4 Maule & Selwyn (opinion of Dampier, J.,), p. 15; Smith v. Mer- cer, 6 Taunt., 75; Story on Bills, § 113; U. S. Bank v. Bank of Georgia, 10 Wheat., 333. ^ Cases before cited, and Bank of Gloucester v. Salem Bank, 17 Mass., 33. 'See rule laid down by Ld. Mansfield in Price v. Neal, before cited; Brisbane v. Dacres, 5 Taunt, 142; Moses v. Macfarlan, 2 Burr., 1012. 236 BANK OF COMMERCE V. UNION BANK. [CHAP. 6, 1st. That where money is paid under mistake of facts it may be recovered back.' 2d. The Bank of Commerce paid the money through mistake of facts. The forged alterations in the amount of the draft being without their knowledge at the time they paid it, they are entitled to recover back the sum paid. The rule requiring a banker to know the signature of his customer to a check or draft, does not extend to the filling up of the body of the instrument.'' So where a party has procured payment of forged or altered paper without indorsing his name on it, yet he must pay back the money, although he may have paid it over to the party of whom he was the agent. ^ 3rd. The party paying has a right to recover his money as well where the forgery is that of the indorser's name, as where it is an alteration of the amount for which the bill was drawn. In this case the draft was assignable only by the in- dorsement of Durand, in whose favor it was drawn. It lacks that indorsement, and no title therefore ever passed either to the Charleston Bank or to the Union Bank.* 4th. There is an implied warranty in the transfer of every negotiable instrument that it is not forged — and the actual indorsement of this draft by the Union Bank, was an express averment, and a guaranty to the Bank of Commerce that it was not forged or altered. It was an assurance of its 'Chit, on Cent , Am. ed. of 1844, p. 626, and cases cited in notes; Chitty on Bills, Am. ed. of 1849, P- 425; 2 Smith's Lead. Cas., p. 237, Law Lib., vol. 28, new series, p. 269, and notes; Potter V. Everett, 2 Hall, 252; Mowatt v. Wright, i Wend., 355; Burr V. Veeder, 3 id. 412; Waite v. Leggett, 8 Cowen, 195; Union Bank v. U. S. Branch Bank, 3 Mass., 74; Garland v. Salem Bank, 9 id. 389; Lazell v. Miller, 15 id., 207. ^Chitty on Bills, ed. of 1849, p. 245, and cases cited; Jones v. Ryde, 5 Taunt., 488; Bruce v. Bruce, id. 495; Merchants' Bank of New York v. Exchange Bank of New Orleans, t6 Louis Rep., 457- '^ Fuller V. Smith, i C. & P., 197; S. C. Ryan & Moody, 49; Chitty on Bills, ed. of 1849, P- 245. *Chitty on Bills, ed. of 1849, p. 260, and cases cited; Smith V. Chester, i Term. Rep., 654; Dick et al. v. Leverich, 11 Louis. Rep., 573; Canal Bank v. Bank of Albany, i Hill, 287; Talbot v. Bank of Rochester, i id. 295; Coggill v. Am. Ex. Bank, I Comst., II. SEC. 32.] BANK OF COMMERCE V. UNION BANK. 237 genuineness in every respect, save the signature of the drawer. ' Decision. — The payment of a bill of exchange by the drawee is ordinarily an admission of the drawer's signature, which he is not afterwards, in a controversy between himself and the holder, at liberty to dispute; and therefore if the drawer's signature is on a subsequent day discovered to be a forgery, the drawee can not compel the holder to whom he paid the bill, to restore the money, unless the holder be in some way implicated in the fraud. ^ This rule is founded on the supposed negligence of the drawee in failing by an exam- ination of the signature, when the bill is presented, to detect the forgery and refuse payment. The drawee is supposed to know the handwriting of the drawer, n\\o is usually his cus- tomer or correspondent. A3 between him, therefore, and an innocent holder, the payer, from this imputed negligence, must bear the loss. In Price v. Neal, the plaintiff had paid to Neal, the holder, two bills of exchange, purporting to be drawn on him by Sutton, whose name was forged. On dis- covery of the forgery. Price brought his action against Neal, to recover back the money as paid by mistake. Ld. Mans- field in delivering the opinion of the court in favor of the de- fendant, said, "It was incumbent upon the plaintiff to be satisfied that the bill drawn upon him was the drawer's hand, before he accepted or paid it, but it was not imcumbent upon the defendant to inquire into it." " Whatever neglect there was, was on his side. It is a misfortune which has happened without the defendant's fault or neglect." In Wilkinson v. Lutwidge,'' Ld. C. J. Pratt was of opin- ion that ' ' acceptance was a sufficient acknowledgment of the drawer's handwriting on the part of the acceptor, who must be supposed to know the hand of his own correspondent." So the acceptance of a bill, whether general, or for honor, or 'Chitty on Bills, ed. of 1849, p. 245; Jones v. Ryde, 5 Taunt, 488; Wilkinson v. Johnson, 3 Barn & Cress., 428; Herrick v. Whitney, 15 John., 240; Harris v. Bradley, 7 Yerg., 310; Story on Bills of Exch., §§ no, 235. Trice V. Neal, 3 Bur., 1354- ' I Strange, 148. 238 BANK OF COMMERCE V. UNION BANK. [CHAP. 6, supra protest, after sight of the bill, admits the genuineness of the signature of the drawer; and consequently if the signature of the drawer turns out to be a forgery, the acceptance will nevertheless be binding and entitle a bona fide holder for value and without notice to recover thereon according to its tenor.' But it is plain that the reason on which the above rule is founded does not apply to a case where the forgery is not in counterfeiting the name of the drawer, but in altering the body of the bill. There is no ground for presuming the body of the bill to be in the drawer s handzvriting, or in any liand- ivriting known to the acceptor. In the present case, that part of the bill is in the handwriting of one of the clerks in the office of the Canal and Banking Company in New Orleans. The signature was in the name and hannwriting of the cash- ier. The signature is genuine. The forgery was committed by altering the date, number, amotmt and payee's name. No case goes the length of saying that the acceptor is presumed to know the handwriting of the body of the bill, or that he is better able than the indorsers to detect an alteration in it. The presumption that the drawee is acquainted with the drawer's signature, or able to ascertain whether it is genuine, is reasonable. In most cases it is in conformity with the fact. But to require the drawee to know the handwriting of the residue of the bill is unreasonable. It would, in most cases, be requiring an impossibility. Such a rule would be not only arbitrary and rigorous but unjust. The drawee would un- doubtedly be answerable for negligence in paying an altered bill, if the alteration were manifest on its face. Whether it was so or not, in this case, was properly submitted to the jury, who found that it was paid by mistake and without knowledge of or reason to suspect the fraudulent alterations. It would have been difficult to find otherwise upon the evi- dence, the bill having passed through the defendant's bank and the Charleston bank without suspicion. If the forgery had been in the name of the drawer, it might not perhaps have been incumbent on those banks to scrutinize the bill, be- cause they might have relied on the drawee's better knowledge ' Story on Bills, § 262. SEC. 32. J BANK OF COMMERCE V. UNION BANK. 239 ■of the hand; but the forgery being in the body of the bill, the plaintiffs were not more in fault than the defendants. The greater negligence in a case of this kind is chargeable on the party who received the bill from the perpetrator of the forgery. So far as respects the genuineness of the bill each indorsee receives it on the credit of the previous indorsers; and it was the interest and the duty, in the present case, of the Bank of Charleston to satisfy itselt that the bill was gen- uine, or that its immediate indorser was able to respond in case the bill should prove to be spurious. The party who fraudulently passed the bill can not avoid his liability to re- fund on the pretence of delay in detecting the forgery, or in giving notice of it; and if reasonable diligence is exercised in giving notice after the forgery comes to light, it is all that any of the parties can require.' In Smith v. Mercer,^ in Cocks v. Masterman,^ and in Price v. Neal,' the plaintiffs who paid the forged bills, being chargeable with a knowledge of the signature of the drawer (which was forged) were held to have paid it negligently and without due caution and examination, and on that ground it was that the defendants to whom they paid the money were held not Hable without immediate notice of the forgery. But in the present case no such negligence is imputable to the plaintiffs, the plaintiffs being no more capable of detecting the forged alteration by inspection of the bill, than either of the other parties. This action is not founded on the bill as an instrument containing the contract on which the suit is brought. The acceptor can never have recourse on the bill against the in- dorsers. But the plaintifis right of recovery rests on equitable grounds. In the Canal Bank v. The Bank of Albany, the principle was recognized that money paid by one party to an- other through mutual mistake of facts in respect to which both are equally bound to inquire, may be recovered back. The defendants here as in that case have obtained the money of ' Canal Bank v. The Bank of Albany, i Hill, 287, 292, 3. '6 Taunt., 76 (1814). ^9 Barn. & Cres., 902 (1827). *3 Burr., 1354 (1762). 240 MEAD V. YOUNG. [CHAP. 6, the plaintiffs without right and on the exhibition of a forged title as genuine, the forgery being unknown to both parties. The defendants ought not in conscience to retain the money, because it does not belong to them; and for the further reason that the defendants and the previous indorsers have, each, on the same principle, their remedy over against the party to whom they respectively paid the money, until the wrongdoer is finally made to pay. If that party should be irresponsible, or if he can not be found, the loss ought to fall on the party, who, without caution, took the bill from him. In cases where no negligence is imputable to the drawee in failing to detect the forgery, the want of notice within the ordinary time to charge the previous parties to the bill is ex- cused, provided notice of the forgery be given as soon as it is discovered. Judgment affirmed. SECTION 33. THE DRAWEE, BY ACCEPTING A BILL, THEREBY ADMITS OR WARRANTS THAT THE PAYEE HAS CAPACITY TO INDORSE, BUT DOES NOT ADMIT HIS INDORSEMENT.* MEAD V. YOUNG.' In the King's Bench, Nov. i8th, 1790. \_Reported in 4 Term. Rep., 28. '\ * In an action by the indorsee against the acceptor of a bill of exchange, drawn payable to "A. or order," it is competent to the defendant to give evidence that the person, who indorsed to the plaintiff, was not the real payee, though he be of the same name, and though there be no addition to the name of the payee on the bill. If a bill of exchange, payable to A. or order, get into the hands of another person of the same name as the payee, and such person, knowing that he was not the real person in whose favor it was drawn, indorse it, he is guilty of a forgery. ^This case is cited in Daniel on Negotiable Instruments, 692, 1345; Benjamin's Chalmers, Bills, Notes and Checks, 90; Wood's Byles on Bills and Notes, 148, 270; Chitty on Bills, 198, 156, 261, 391, 395, 641, 780, 784; Norton on Bills and Notes, 115, 243; Tiedeman on Commercial Paper, 266; Randolph on Commercial Paper, 251, 252. See also. Masters v. Miller, 4 Term Rep., 320; First Bank v. Burkham, 32 Mich., 328; Chambers v. Union Bank, 78 Pa. St., 205; McKleroy v. Southern Bank, 14 La. An., 458. SEC. 33. J MEAD V. YOUNG. 24I The Form of Action. — This was an action brought by the indorsee of a bill of exchange for 90/. against the ac- ceptor. The bill was drawn at Dunkirk by Christian on the defendant in London, payable "to Henry Davis, or order;'' and, having been put into the foreign mail inclosed in a letter from Christian, it got into the hands of another Henry Davis than the one in whose favor it was drawn. The defendant accepted the bill; and when Davis desired the plaintiff to dis- count it, the latter made application to the defendant to know whether or not it was his acceptance .' and, on receiving an answer in the affirmative, coupled with an assurance that it was a good bill, he discounted it, not knowing the H. Davis from whom he took it. There was no ground to impute any fraud to the plaintiff. On the trial before Ld. Kenyon, after the plaintiff had proved the defendant's handwriting, and the indorsement by Davis, the defendant offered evidence to show that the H. Davis, who indorsed to the plaintiff, was not the real H. Davis in whose favor the bill was drawn: but Ld. Kenyon being of opinion that such evidence was inadmissible, the plaintiff recovered a verdict. A rule having been obtained to show cause why a new trial should not be granted on this misdirection. The Claim of the Plaintiff. —Ld. Erskine for the plain- tiff argued that, it there had been any particular description of the payee on the bill, the plaintiff must have taken care that the person from whom he received it answered the whole of the description; but there was no description of, or addi- tion to, the H. Davis; there was nothing on the bill to lead either the acceptor or any third person to suspect that the H. Davis, who was in possession of the bill, was not the real payee. And, so far from the plaintiff's having incurred any charge of neglect, he seems to have taken more than ordinary caution in making inquiries of the acceptor before he dis- counted the bill. There is no pretense to impute either fraud or neglect to the plaintiff; he stands in the situation of an innocent purchaser for a valuable consideration. This case therefore falls within the common rule, that, where one of two innocent persons must suffer by the fraud of another, the loss must be borne by him who enabled the party to commit 242 MEAD V. YOUNG. [CHAP. 6, the fraud; and in this case that person is Christian, whO' ought to have described the payee more particularly. The Claim of Defendant. — In support of the rule it was argued that, a party, purchasing a bill of exchange, is, like the purchaser of any other species of property, bound to in- quire into the title of him from whom he buys. No person can derive title to this bill but he who claims under the real H. Davis: and it is indifferent whether the person indorsing the bill be or be not of the same name with the real payee; in neither case can any property be transferred but by him who has the title. If he bear the same name, prima facie indeed he may be presumed to be the same person, till the contrary be shown: but here the question was, whether evi- dence should not have been received to prove the contrary i* If such evidence be not admissible, it will follow that pay- ment to a person of the same name with a legatee would dis- charge the executor, or a payment by a debtor to any person who had the same name as his creditor: but that cannot be pretended. This bill was drawn in order to satisfy a debt due from Christian to the real H. Davis; and yet payment of this bill to the plaintiff can never be considered as a discharge of that debt, without the indorsement of that H. Davis. In all cases where a bill is drawn payable to A. B. or order, it is indispensably necessary to prove the handwriting of the payee, which was not in fact done in this instance. The necessity of this proof is apparent from the form of the declaration: which after alleging that the bill was drawn in favor of H. Davis, avers that the said H. Davis afterwards indorsed to the plaintiff. If the negligence of either of the parties be resorted to as a ground for the determination of this case, the plaintiff seems to have been guilty of the greatest negligence in taking a bill from a person whom he did not know, whereas the transaction, as far as Christian was concerned, was carried on in the ordinary course of business. There is also another ob- jection to the plaintiff's recovering, because he claims through a forgery: For the H. Davis, who received the bill inclosed in a letter from Christian, must have known that it was not intended tor him; and the circumstance of his bearing the same name with the payee would be no defence to him on a SEC. 33. J MEAD V. YOUNG. 243- prosecution for forgery, since he put a false signature to an instrument with intent to defraud. Decision.— The question here is, Whether the name of H. Davis, to whom the bill on the face of it was payable, shall or shall not convey a title to this plaintiff who gave a valuable consideration for it, and who discounted it with the name of H. Davis upon it, and with an assurance from the defendant that it was accepted by him.? If any fraud, or even neglect, could be imputed to the plaintiff, that would vary the case; but, circumstanced as these parties were, I think that, if the plaintiff cannot recover, it will put an insuperable clog on this species of property. I cannot distinguish this case on principle from that of Miller v. Race,' where the innocent holder of a note, which had been taken when the mail was robbed, was held entitled to recover; that indeed was a note payable to bearer, but still the same principle must govern both cases. In this case the fault originated with the drawer of the bill, in not describing more particularly the person to- whom he intended it should be paid. The plaintiff was not bound to send to Dunkirk to know whether the person, who had possession of the bill, was or was not the real H. Davis., There may indeed be some inconvenience the other way; but setting the inconvenience on the one side against that on the other, in my apprehension it would throw too great a burden on persons taking bills of exchange to require proof of an indorsee that the person from whom he received the bill was- the real payee. Such proof has never yet been required of an indorsee in such an action: and therefore I think that, as there was no fraud, or want of due diligence on the part of the plaintiff, he is entitled to recover; however, I give this, opinion with some diffidence, as my brothers have intimated that they are of a different opinion. Ashhurst, J., said, "This is a case of considerable import- ance; and I think that we ought to grant a new trial, that the parties may have an opportunity of putting the question on the record. The present inclination of my opinion is with the defendant. In order to derive a legal title to a bill of exchange, it is necessary to prove the hand-writing of the ' I Burr., 452 (1758). 244 MEAD V. YOUNG. [chap. 6, payee; and therefore though the bill may come by mistake into the hands of another person, though of the same name with the payee, yet his indorsement will not confer a title. Such an indorsement, if made with the knowledge that he is not the person to whom the bill was made payable, is in my opinion a forgery; and no title can be derived through the medium of a fraud or forgery. This is distinguishable from the case of Miller v. Race; for there the note was payable to bearer. In such cases the bearer, who purchases for a valu- able consideration, and without notice of any fraud, is entitled to receive the contents of the bill; and payment to him is a discharge to the drawer. But in this case the bill was drawn payable to H. Davis, or order; and though the name of H. Davis was indorsed on the bill, yet it was incumbent on the plaintiff, who claims through the payee, to be satisfied that that was the indorsement of the real payee." Duller, J., said, "As the bill in this case is of great value, the parties may put this question in a mode to be decided by the dernier resort. As at present advised, I entertain the same opinion as my Brother Ashhurst. If we were to inquire whether any laches were to be imputed to the plaintiff or the drawer, I rather think the plaintiff is more in fault than any other person, in advancing his money to H. Davis, who was a total stranger to him. But, without going into any such inquiry, I am of opinion that it is incumbent on a plaintiff, who sues on a bill of exchange, to prove the indorsement of the person to whom it is really payable. The general form of the declaration shows that it is so; for that is that, 'the said A. B. to whom, or to whose order, the payment of the said sum of money mentioned in the said bill was to be made, afterwards, etc., indorsed the said bill, his own proper hand- writing being thereto subscribed.' Now here it is clear that the indorsement was not made by the same H. Davis to whom the bill was made payable; and no indorsement by any other person will give any title whatever. Then, is there any thing in this case that estops the defendant from saying that the person who indorsed to him (plaintiff) was not the real payee.? JSIow the act of that person who indorsed, and who in so SEC. 33. j MEAD V. YOUNG. 245 doing was guilty of a forgery, cannot prevent an innocent person from showing the truth. ' ' Then it was argued that Christian was guilty of negli- gence, in not describing more particularly the payee; but I know of no authority which requires that to be done. This bill was drawn in the common form, payable 'to H. Davis or order;' and the drawer could not foresee that it would get into the possession of any other H. Davis. If any other stranger had received this bill, and indorsed it over to the plaintiff, it is not pretended that such indorsement would have conveyed any title to the bill, and it cannot make any differ- ence whether such stranger bear the same name with the real payee or not; for no person can give title to a bill but he to whom it is made payable. Independently of these reasons, I think that convenience requires that the determination should be in favor of the defendant. I have no difficulty in saying this H. Davis, knowing that the bill was not intended for him, was guilty of a forgery; for the circumstance of his bearing the same name with the payee cannot vary this case, since he was not the same person. Then if the plaintiff cannot recover on this bill, he will be induced to prosecute the forger; and that would be the case even if it had passed through several hands, because each indorser Vv'ould trace it up to the person from whom he received it, and at last it would come to him who had been guilty of the forgery: whereas if the plaintiff succeed in this action, he will have no inducement to prosecute for the forgery: the drawer, on whom the loss would in that case fall, might have no means of discovering the person who commit- ted the forgery, and thus he would probably escape punish- ment. As far, therefore, as convenience can have any effect, it weighs strongly with me to receive the evidence. But at all events the plaintiff cannot recover, since he derives his title under a forgery." Grose, J., said, " I am of opinion that it was competent to the defendant to show in evidence that the person, who indorsed to the plaintiff, was not the person named as the payee in this bill of exchange; and I form that opinion as well on the substance of the transaction as on the form of pleading in such cases. A bill of exchange is only a transfer of a chose 246 MEAD V. YOUNG. [CHAP. 6, in action according to the custom of merchants; it is an authority to one person to pay to another the sum which is due to the first, and it is generally directed to be paid to the payee or his order. When the person, on whom it is drawn, accepts, he only engages by the terms of his acceptance to pay the contents of the bill to the person named in it, or to his order. The general form of the declaration, which is to be found in some of the old entries, also agrees with this doc- trine, and points out what the law is. "I observe indeed that this declaration is not drawn in the usual form, for the words 'to whom or to whose order' are omitted; but still it is that the said H. Davis, that is the same H. Davis who is mentioned in the former part of the declaration as the payee, indorsed to the plaintiff. It clearly, therefore, appears that as no person can demand payment of a bill of exchange but the payee, or the person authorized by him, the acceptor only undertakes to pay to them, and cannot be compelled to pay to any other person. If he pay the amount of the bill to any other person, he pays it in his own wrong, and such payment does not discharge his debt to the drawer. If this decision will prove a clog on the circulation of bills of exchange, I think it will be less detrimental to the public, than permitting persons to recover through the medium of a forgery. And that this was a forgery cannot be doubted, if we consider the definition of it; which is, the false making of any instruine)it, indorsement, etc., with intent to defratid^ It makes no difference whether the person making this false indorsement was or was not of the same name with the payee, since he added the signature of H. Davis, with a view to defraud, and knowing that he was not the person for whom the bill was intended. I agree also with my Brother Duller, that this decision will be more convenient to the public; because then the plaintiff will prosecute the person, who in- dorsed to him, for the forgery. For these reasons I am of opinion that, as this bill of exchange was only payable to the payee or his order, it was competent to the defendant, the 'Vid. 2 Geo. 2 c, 25, S. i. SEC. 33.] MEAD V. YOUNG. 247 acceptor, to inquire whether the person under whom the plaintiff claims, was or was not the payee.'" Rule absolute. ' See the following cases for a further discussion of this general proposition: Robarts v. Tucker, i6 Q. B. (Ex. Ch. ), 560; Law- rence V. Russell, 77 Pa. St., 460; Graves v. American Bank, 17 N. Y., 205; Welsh V. Bank, 73 N. Y., 424; Gale v. Miller, 54 N. Y., 536; Arnold v. Check Bank, i L. R. C. P., 578; National Park Bank v. Ninth National Bank, 46 N. Y., 77; Braithwaite v. Gardiner, 8 Q. B., 473; Marine National Bk. v. National City Bk., 59 N. Y., 67; White v. Continental Bk., 64 N. Y., 316; Red- dington v. Woods, 45 Cal. , 406; Henertematte v. Morrie, 28 Hurr., 77. CHAPTER VII. Methods of Transferring Commercial Contracts. SECTION 34. General Methods of Transfer.— It may be said that there are but two general methods of transferring commercial con- tracts ;^^r.y2', by the act of the parties; and, second, by opera- tion of law. Under the first method might be mentioned three others, which constitute the most general methods: a. By assignment; b. By indorsehient; and c. By delivery simply. SECTION 35. Assignment Defined. — An assignment in the sense we have used it here means the act by which one person transfers to another his right, interest and property in bills of exchange, promissory notes, bonds and other commercial contracts. By an assignment of a commercial contract, the assignee gets the interest which the assignor hath. An assignment differs from an indorsement in this, that the assignee takes the rights of the assignor, whilethe indorsee (if he is a bona fide holder) gets all the rights represented by the terms of the contract. The assignee may not receive any rights whatever, depending altogether upon the right of the assignor; while the indorsee secures the rights represented by the terms of the contract without reference to the rights of the indorser. Negotiable contracts are transferred by indorsement. At common law the transfer of a chose in action or right to a thing not in possession was forbidden, as violating the rules against champerty and maintenance, and because the man could not sell a thing which he did not have. Such an S^C. 36. J METHODS OF TRANSFERRING. 249 assignment or transfer was considered as passing to another a mere right to recover in a suit at law, and as the ancient law abhorred litigation, it prevented the sale of possibilities or rights in action, and refused to recognize the title of the as- signee when he sought to recover in a suit at law. Coke. Lit. , 266a. SECTION 36. Common Law Rule Abrogated.— The stringent rule, of the common law courts, has long since been disregarded by the courts of equity and now in that court, assignments of choses in action, will be protected and enforced. In courts of equity the assignee is regarded as the true owner of the thing assigned (the chose in action) and is entitled to use it for his own purposes subject to equities, of course, if there are any. Experience has taught that the grave apprehension of the common law courts, that actions would be multiplied; that the rules against champerty and maintenance would be violated and that justice would be trodden under foot, if property in action should be transferred, has never been realized and the supposed difficulties are no longer entertained. Experience has not only taught the courts that no evil results from the assignment of things in action, negotiable contracts, etc. , but upon the contrary the permission to trans- fer these contracts (property in action), as well as property in possession has resulted in great public good and private con- venience. Thalheimer v. Brinckerhoff, 20 Johnson (N. Y.), 380; Bacon v. Bouham, 33 N. J., eq. , 614; Wright v. Wright, I Ves. R. , 411. SECTION 37. Interest Received by an Assignee. — An assignment, as applied to the transfer of negotiable contracts or negotiable paper, is the transfer of the interest or equities which the holder hath therein; while an indorsement, as will be explained later, is a transfer of the title in a negotiable contract by writ- 250 METHODS OF TRANSFERRING. [CHAP. 7, ing, on the back thereof. No particular or precise form of words are necessary to constitute an indorsement or an assign- ment. Row V. Dawson, i Vesey, 331. Any words which show an intention to transfer the title or interest will be sufficient. An assignment may be either by parol or in writing. McWilliams v. Webb, 32 Iowa, 577; Jordon v. Gillen, 44 U. S. St., 424; Noyes v. Brown, 33 Vt., 431- An indorsement must always be in writing. The same act may be either an assignment or an indorsement depending upon the nature of the contract transferred. For instance, if the particular contract is a negotiable one, then the writing of the name, merely, of the payee across the back of it, or across the face will be an indorsement; while the same act, upon a non-negotiable contract, one not containing the indicia of ne- gotiability, will amount to an assignment and will transfer the holder's interest therein only, and not the right represented by the terms of the contract. In all cases, however, whenever it appears upon the contract transferred, that it was the inten- tion of the parties to the agreement that the transaction was to have been an assignment, the courts will give their act that effect and protect the interest of the parties accordingly. Pass v. McCrea, 36 Miss., 143. Non-Negotiable Contracts Transferred by Assignment Only. — The only method of transferring non-negotiable con- tracts is by assignment; but negotiable contracts may be trans- ferred by assignment or by indorsement if the parties so intend. The transfer of a negotiable contract payable to the order of the payee, without indorsement in the first instance, by the original payee or holder, would be an assignment of that con- tract, and passes the equitable title only, and the person to whom it is thus transferred may be subjected to all the equities that attached to it in the hands of the transferer. Quigley v. Mexico So. Bank, 80 Mo., 295; Paris v. Wells, 68 Ga. , 604. The assignee stands in the shoes of the assignor and his right to recover upon the contracts assigned, is subject to the defenses which were available against the latter, even though he took the contract upon consideration and in good faith. SEC. 38.] METHODS OF TRANSFERRING. 251 Matteson v. Morris, 40 Mich., 55; Spinning v. Sullivan, 48 Mich., 8; Foreman v. Beckwith, 78 Ind., 575; Weber v. Or- ten, 91 Mo., 677; Calvin v. Sterrett, 41 Kan., 218. SECTION 38. Assignment — Action by Whom— The Rule at Com- mon Law — The Equity Rule.— At common law the trans- feree of these contracts, if he desired to sue upon them, was obliged to bring the action in the name of the assignor. In equity, however, a different rule prevailed and he was there permitted to sue in his own name. By statute, now, in all the states, the equity rule has been adopted so that the holder, the real party in interest, may maintain the action, upon such contracts, in his own name. Grand Gulf Bank v. Wood, 12 S. & M., 482. Wheeler v. Wheeler, 9 Cow., 34. The Requirements in Case of an Assignment. — There are certain duties imposed upon the assignee which are not imposed upon the indorsee or one who takes a negotiable instrument by indorsement. He is required to give notice, to the debtor (if he desires to protect himself) that he has be- come the holder of the particular contract. This notice should be given as soon as convenient in order that the assignee may be protected against possible equities which may arise after the transfer. The notice will not of course, relieve him from the offset, — equities and other defenses, — which might have been raised against him at the time of the transfer, and before the notice. Wood v. Brush, 72 Cal. , 224; Kinderly v. Jervis, 22 Beav., 31; Barrow v. Porter, 44 Vt., 587; Vanbus- kirk V. Hartford Fire Ins. Co., 14 Conn., 141. Upon the question of the necessity of giving notice to the debtor of the assignment of a chose in action there is much conflict in the authorities. In Clodfelter v. Cox, Mc- Kinney, J., says, "There is an irresistible conflict of author- ity upon this subject. The weight of American authority seems to be that the assignment of a chose in action is com- plete in itself, and vests a perfect title in the assignee as against third persons, without notice of assignment to the debtor. But the contrary of this is the settled doctrine of the English 252 METHODS OF TRANSFERRING. [CHAP. 7, as well as some of the courts of this country at the present day. The latter we consider as the more reasonabe and safe practical rule, and have accordingly held on more than one occasion, that the assignment of a chose in action is not com- plete, so as to vest the title absolutely in the assignee, until notice of assignment is given to the debtor; and this not only as regards the debtor, but likewise as to third persons. And, therefore, as between subsequent purchasers or assignees of a chose in action, he is entitled to preference who first gives notice to the debtor, although his assignment be subsequent to that of the other. To perfect the assignment not merely as against the debtor, but also as against creditors and subse- quent bona fide purchasers notice must be given." i Sneed (33 Tenn.), 339; Pickerring v. Ilfracomb R. R. Co., 3 Law Rep., C. P., 235; Thayer V. Daniels, 113 Mass., 131; Muir V. Schenck, 3 Hill, 230. Notice Must be Given by the Assignee or his Law- fully Authorized Agent. — The notice of assignment should be given by the assignee or his agent. Dale v. Kimpton, 46 Vt. , 76. SECTION 39. Assignee Takes Subject to Equities. — No rule is bet- ter settled than that the assignee of a chose in action takes it subject to all equities existing between the debtor and cred- itor. It is not necessary that the equities should exist at the inception of the debt or contract. It is sufficient if they exist prior to the assignment; for the reason that the rule is as applicable to one case as to the other; which is tnat the assignee has it in his power to protect himself against them by inquiring of the debtor before the assignment. Chancel- lor Kent, in Murray v. Sylburne, says ' ' the assignee can al- ways go to the debtor and ascertain what claims he may have against the bond or other chose in action, which he is about to purchase from the obligee." 2 Johnson's Ch., 441; York V. McNutt, 69 Am. Dec, 607; Polk v. Gallant, 34 Am. Dec, 410. SEC. 40.] METHODS OF TRANSFERRING. 253, SECTION 40. What is Meant by "Equities Which may be Inter- posed Against the Assignee."— What we mean by the phrase "equities which maybe interposed against an assignee" are all those defenses which existed between the original parties, and which grew out of some defect inherent in the contract itself, and which renders the contract invalid in whole or in part between the original parties, such as fraud, illegality or duress or where the consideration has failed or in case of pay- ment or accord and satisfaction. Against these equities an assignee cannot be a bona fide holder. Some of these de- fenses (equities) may and others may not be interposed against a bona fide indorsee. (See Post Chap, on Defenses). We have said that these "equities" relate to defenses existing between the "original parties." Upon the question whether the "equities" which exist between the "original parties" are the only ones which can be interposed, or whether all the equities which exist between the subsequent parties may be interposed as well, there is much conflict of authority. Theodore W. Dwight in discussing this rule said, "The rule is not simply that the assignee takes subject to the equities between the original parties though that is sound law. It goes farther than this, and declares that the purchaser of a chose in action must always abide the case of the person from whom he buys. The "reason of the rule," he continues, "is that the holder of a chose in action cannot alienate anything but the beneficial interest he possesses. It is a question of power or capacity to transfer to another, and this capacity is to be exactly measured by his own lights." Trustees of Union College V. Wheeler et. al., 6i N. Y., 88 at 105; Owen v. Evans, 134 N. Y., 514; Schafer v. Reilly, 60 N. Y., 61; In- graham V. Disborough, 47 N. Y., 421; Green v. Warnick, 64 N. Y. , 220; Davies v. Austen, i Veseyjr. , 247; Durton v. Benson, i P. Wm., 497; Barney v. Grover, 28 Vt. , 391; Jeffries v. Evans, 6 B. Mon., 119; Boardman v. Hayne, 29 la., 339; Hill V. Shields, 81 N. C, 250; Warner v. Whit- taker, 6 Mich., 133; Tinmes v. Shannon, 19 Iowa, 296; Robe- son v. Roberts, 20 Ind., 155; Summers v. Hutson, 48 Ind., 230; Watt V. Clark, 9 Pa. St., 399; Hill v. Caillone, i Ves, 254 METHODS OF TRANSFERRING. [CHAP. 7, Sr., 122; Norton V. Rose, 2 Wash. (Va. ), 233; Crosby v. Tan- ner, 40 Iowa, 136; Duke v. Clark, 58 Miss., 466; L. R., 5 Ch. App., 358; Sutherland V. Reeve, 151 111., 384; 38 N. E. Rep., 130; Commercial Nat. Bank v. Burch, Receiver, and Burch, Receiver V. Kalamazoo Paper Co. , 141 111., 519; The Mullanphy Sav. Bank v. Schopp et. al. v. Magloughhn, 133 111., 33; Stephens v. Weldon, 151 Pa. St., 520; Rice v. Hearn, 109 N. C, 150. This doctrine is disputed, see post section 41. SECTION 41. ■What Equities may be Interposed Between Parties — Latent Equities. — While it is no doubt the general rule that the assignee takes the contract burdened with all the equities against it there is an imposing line of authorities, which hold that the assignee takes the contract freed from all equities except those which existed between the original parties in its inception. Chancellor Kent, however, in a dissenting opinion in the case of Bebee v. Bank of New York, says "when it is said that an assignee of a chose in action takes it subject to all equity, it is meant only that the original debtor can make the same defence against the assignee that he could against the assignor; the rule has never received any other application.'' 1 Johnson, 529 at 572 (or 574 star pages); Livingston v. Dean, 2 Johns Ch. , 479; Murray v. Lylburn, 2 Johns Ch., 441; Ohio Life Ins. Co. v. Ross; 2 Md. Ch., 25, 39; Sleeper v. Chap- man, 121 Mass., 404; Bloomer v. Henderson, 8 Mich., 395; Bush V. Lathrop, 22 N. Y., 535; Pomeroy's Equity Jurispru- dence, Sees. 703-715; Bispham's Principles of Equity, 171. The defenses or equities, which arise between the subse- quent parties are contra-distinguished from those existing be- tween the original parties only, as latent equities. CHAPTER VIII. Indorsement.* SECTION 42. AN INDORSEMENT MUST BE IN WRITING AND UPON THE COMMERCIAL CONTRACT INDORSED. FRENCH V. TURNER, i In the Supreme Court of Indiana, November 27th, i860. \^Reported in zj Indiana, ^g. ] The Form of Action. — The first count states in sub- stance, that on Nevember 6, 1852, one John Bodle executed and delivered to Abel C. Pepper, a mortgage on certain land, therein described, to secure the payment of $1, 100, evidenced by ten promissory notes of that date, each for $110; one pay- able in a year from date, and one maturing each year there- ' This case is cited in Daniel on Negotiable Instruments, 689a, 690, 748a; Benjamin's Chalmers on Bills, Notes and Checks, 117, 125; Tiedeman on Commercial Paper, 247, 264, 305; Wood's Byles on Bills and Notes, 252; Norton on Bills and Notes, 108; Ames on Bills and Notes, (Vol. i) 228. See also Ryan v. May, 14 111., 49; Kuler V. Williams, 49 Ind., 504. * Indorsement — Defined. — An indorsement is the writing of the name of the holder upon a commercial contract with the intent (i) either to transfer the title thereto, or (2) to strengthen the security, or both, by which act he becomes conditionally liable for the payment of such contract. Daniel, in his valuable work on Negotiable Instruments, says, "Indorsing an instrument, in its literal sense, means writing one's name on the back thereof; and in its technical sense, it means writing one's name thereon with intent to incur the liability of a party who warrants the pay- ment of the instrument, provided it is duly presented to the prin- cipal at maturity, not paid by him, and such fact is duly notified to the indorser." Dan. on Negot. Inst, sec. 666; Higgins v. Bullock, 66 111., 37; Sigourney v. Clarke, 17 Conn., 519. 256 FRENCH V. TURNER. [cHAP. 8, after until they all become due, with interest payable annually. That in September, 1854, Pepper assigned and transferred the mortgage and notes, by indorsement on the mortgage, to the defendant. Turner. That Turner, in January, 1858, for value received, transferred the mortgage and notes to the plaintiff, by indorsement in writing on the mortgage. The mortgage and notes, together with the assignment, are set out. The The California Code says, "One who writes his name upon a negotiable instrument, otherwise than as a maker or acceptor, and delivers it with his name thereon to any other person, is called an indorser, and his act is called an indorsement." Sec. 3108 of the Civil Code. The fact that a guaranty is written on the back of a note above the signature of the payee, does not have the effect of preventing the signature from operating as an indorsement. Nat. Bank v. Galland, 45 Pac. Rep., 35. An indorsement in its technical sense applies only to negoti- able contracts. It is an independent contract from the con- tract upon which it is made and is equivalent to the drawing of a new bill upon the maker, drawee or acceptor as the case may be. It is an independent contract in the sense that its validity may be attacked independently from the original contract and in the same manner and under the same circumstances that any other contract may be attacked. At common law the indorser could not be sued in the same action with the original parties to the contract. This rule, however, is now changed so that the in- dorser and maker may be sued together. An indorsement must be supported also by a distinct consideration. An indorsement, or what would amount to an indorsement of a negotiable note, will be but an assignment when applied to a non-negotiable contract. Merchants Nat. Bank v. Gregg ( Mich. ), 64 N. W. Rep., 1052; Steere v. Trobilock et al., 66 N. Rep., 342. The Mode of Indorsement. — There is no required form for an indorsement. It is done by simply writing the indorser's name upon the back of the contract. It must be in writing and upon the instrument itself or upon a paper attached thereto. Folger V. Chase, 18 Pick., 63; French v. Turner, supra. The following statements have been held to be indorsements when written upon negotiable instruments: "I hereby assign all my right and title to Mr. . " Sears v. Lautz, 47 la., 658; "I assign the within note to Mrs. ." Sands v. Wood, i la., 263; 'T hereby transfer my right, title and interest of the within note to S. A. Y." Aniba v. Yeomans, 39 Mich., 171; "For value re- ceived, I hereby assign all interest in and to this note to Mr. ."" Stevens v. Hannan, 86 Mich., 307; 48 N. W. Rep., 551; Markey V. Carey, 108 Mich., 184; 66 N. W. Rep., 493; "For value re- SEC. 42. J FRENCH V. TURNER. 257 assignment from Turner to the plaintiff, on the mortgage, is as follows, viz. : ' ' For value received, I hereby assign the within mort- gage and notes, therein described, to John J. French. '' January 2, 1858. {Signed) Moses Turner." It is averred that the note which became due on Novem- ber 6, 1858, and the interest on the other not due, remain due ceived I hereby assign, transfer and set over to D. B. T. all my right, title and interest and claim in the within note." Hall v. Toby, no Pa. St., 318; Adams v. Blethen, 66 Me., 19; Hatch v. Barrett, 34 Kan., 230; 8 Pac. Rep., 129; Davidson v. Powell, 114 N. C, S7S. To Whom a Commercial Contract May be Indorsed. — A bill or note may be indorsed by the holder or owner to any one. And it does not matter whether the indorsee is laboring under any disabilities, such as infancy, lunacy, or coverature, or not. At common law, however, if a bill or note was indorsed to a married woman, it became the property of her husband. Story on Notes, sec. 126. But in case the wife should survive the husband then she may sue in her own name, provided the husband does not reduce the note to possession and secure the payment of the same. Negotiable contracts may also be indorsed or transferred to executors any administrators, trustees and agents, as such. If, however, the indorsement is made to the personal representatives it will operate as an indorsement to them personally. The same is true in the case of trustees. At common law the husband could not indorse a contract to his wife except as her agent. Dan. on Negot. Inst., sec. 686; Schmittler v. Simons, loi N. Y., 554; Pinney V. Adm'rs, 8 Wend., 500; Parsons on B. & N., vol. i, p. 161; Cornthwaite v. First Nat. Bk., 57 Ind., 268. If a commercial contract is indorsed to the agent of a private corporation as such, it will be regarded /rma/acz^ as an indorse- ment to the corporation. Dugan v. U. S., 3 Wheaton, 172; Fleck- ner v. Bank, 8 Wheat., 360. The Indorsement Must be of the Entire Instrument. — The indorsement must be an indorsement of the entire instru- ment. If, however, a part has been paid it may be indorsed as to the residue. Daniel on Negotiable Instruments, 668; Hawkins v. Cardy, i Ld. Ray., 360; Byles on Bills, 291. An indorsement which purports to transfer a part only of the amount payable, does not operate as a negotiation of the instrument. If a part of the note has been paid then of course the action may be an indorse- ment of the residue. Hughes v. Keddell, 2 Bay (S. Car. Rep.), 324. Indorsement — When Necessary. — It is well settled that commercial contracts payable "to order" cannot be negotiated in 258 FRENCH V. TURNER. [CHAP. 8, and unpaid. That, for the notes which matured before November 6, 1858, he foreclosed the mortgage, and the mort- gaged premises were sold for $600, being fifty dollars less than the amount of the judgment, interest and cost. That Bodle, at the time of the execution of the notes and mortgage, had no property subject to the execution except the mortgaged premises, nor did he have at the time of the maturity of any the first instance, except by the indorsement of the payee or holder or his legal representative so as to pass to the holder both the legal and equitable title. If, however, the note payable to order has been once indorsed in blank by the payee, it then be- comes payable to bearer and may be negotiated without in- dorsement, because it is then equivalent to a note payable to ■'bearer." The Effect of the Transfer of a Bill or Note Payable to Order Without Indorsement. — The transfer of a commer- cial contract payable to order without indorsement by the payee, is a mere assignment of the contract and the transferee may be subjected to all the equities existing under such contracts. Lan- caster v. Baltzell, 7 G. & J., 468; Smalley v. Wight, 44 Me., 442; Dubuc V. Voss, 19 La., Andrew, 210. In all other cases of commercial contracts than those payable to order, and where the indorsement is special or in full, they may be transferred without indorsement, if, however, other negotiable contracts than those payable to order are indorsed, the indorser incurs the same liability. While an indorser may limit his liabil- ity by the nature of his indorsement, he cannot restrain the nego- tiability of a commercial contract by his indorsement. Johnson V. Mitchell, 50 Tex., 212. Indorsement, May be Explained by Parol Evidence. — 'When. — The rule of evidence which provides that parol evidence is inadmissable to vary or contradict the terms of a written con- tract applies to commercial contracts in general, and to contracts of indorsements where they are regular and unambiguous. There- fore parol evidence will not be admitted for the purpose of varying the contract of indorsement unless the same is irregular and ambigu- ous. Martin v. Cole, 104 U. S., 30; Lewis v. Dunlap, 72 Mo., 174; Lee V. Pile, 37 Ind., 137; Charles v. Dennis, 42 Wis., 56; Fassen V. Hubbard, 55 N. Y., 465; Chaddock v. Vaness, 35 N. J. L., 517. While this is the weight of authority in the United States, some of the states have held to the contrary. In Pennsylvania it was ex- pressly held that parol evidence was admissable to control or vary the effect of the contract implied by law from an indorsement in blank, on the broad ground that the rule excluding such evidence applied only to express agreements; holding that the contract of indorsement is one implied by the law from the blank indorse- SEC. 42. J FRENCH V. TURNER. 259 of the notes. That he is still wholly and notoriously insol- vent, having no property subject to execution, and that an action against him would be unavailing, wherefore, etc. The second count alleges, that the defendant, professing to be the holder of the ten promissory notes (described in the first count), secured by the mortgage on, etc., for value re- ceived, sold the said ten promissory notes to the plaintiff, by ment. Ross v. Espy, 66 Pa. St., 481; 5 Am. R., 394; 2 Parsons B. & N., 519. The ground of these decisions is that a blank indorsement not filled out is not a written instrument and hence not entitled to its immunities, and not subjected to its restraints. And hence these decisions hold, that a blank indorsement may be orally proved to have been merely for the puspose of collection or as a renewal of a previous note. Harrison v. McKin, 18 Iowa, 485; Miner v. Robinson, 12 Am. D., 694. While it is the general rule that regular indorsements may not be varied by parol evidence, there are three apparent exceptions: (i) where there is a want or failure of consideration; (2) where the indorsee is a trustee; and (3) in the case of fraud. Daniel on Negot. Inst., Sec. 720; Hudson v. Wolcott, 39 Ohio St., 618; Abrahams v. Mitchell, 112 Pa. St., 232; Smith v. Carter, 25 Wis., 283; Kirkham v. Boston, 67 111., 599; Lewis v. Dunlap, 72 Mo., 178. In the case of Dye v. Scott, Gilmore, C. J., m speaking of the right to show by parol evidence a waiver of demand and notice of non-payment, said, "As between the indorser and indorsee we regard the blank indorsement as only prima facie evidence of a contract which the law presumes to arise therefrom if there was a contemporaneous agreement between the parties upon which the indorsement was made, both reason and justice require that as be- tween themselves, the actual and not the presumed contract should be enforced; and, as between them, oral testimony should be admissable to prove the contemporaneous contract. 35 Ohio St., 194; Lewis V. Long, 102 N. C, 206; Dan. on Negot. Inst., Sec. 1093; Parsons on Notes and Bills, 584; Farwell v. Ensign, 66 Mich., 600; Kulenkamp v. Groff, 71 Mich., 675. A different rule, however, has been laid down in several juris- dictions. There are decisions which hold that parol evidence show- ing that the indorsement was merely made to transfer the title is admissable, and amounts to an indorsement without recourse, where the paper is held by the indorsee, and has not been put in circula- tion. Rodney v. Wilson, 67 Mo., 123; Light v. Kingsbury, 50 Mo., 331; Charles v. Denis, 42 Wis., 56; Kern v. Von Phul, 7 Minn., 74; Campbell v. Robbins, 29 Ind., 271; Davis v. Breron, 94 U. S., 423; Breneman v. Furness, 90 Pa. St., 186. 26o FRENCH V. TURNER. [CHAP. 8, indorsement on the mortgage (as in the first count); and that before the said assignment, the defendant received full pay- ment and satisfaction of the first of said series of promissory notes, to-wit: the one payable on November 6, 1853, and all interest thereon, from the said Bodle, which interest at the time of the assignment amounted to $30, making, of principal and interest on the note, at the time of the assignment, $140, which the defendant refuses to pay. The third count alleges, that "the defendant professing to be the holder of the ten promissory notes and mortgage, and that the payment of the notes was secured by the mort- gage, induced the plaintiff to purchase the same for a valu- able consideration, fully equal to the principal sum mentioned in the notes and interest accrued thereon; and thereupon the defendant, in pursuance of said sale, by an instrument in writing indorsed on the said mortgage, assigned the notes and mortgage to the plaintiff. That at the same time the de- Indorsement — Presumption as to the Time Of. — Where an indorsement appears upon a commercial contract, without date, there is a presumption of law that it was indorsed on the day of its date, or at least before maturity. This presumption, however, may be rebutted by evidence showing when it was made in fact. Smith V. Nevlin, 89 111., 193; White v. Weaver, 41 III, 409; Mc- Dowell V. Goldsmith, 6 Md., 319; Rogers v. Wiley, 14 111., 65; Sanger v. Gary, i Mete, 369. And, if the defendant alleges that it was indorsed after it be- came due, the burden of proof is on him to show it. Hutchins v. Flintge, 2 Tex., 473; Jordon v. Downs, 9 Rob., 265. Every indorsement is presumed to be bona fide, and the bur- den of proof to the contrary is on the party denying the good faith of the transaction. Woodworth v. Huntoon, 40 111., 131. If the indorsee secures the contract before maturity and with- out notice, he holds such contract free of any equitable defenses which may have existed against it in the hands of prior holders, and the burden is upon the defendant to show that the indorsee had notice of equities between the original parties to the note, or of such circumstances as would lead to notice at the time of the indorsing. The indorsee, before maturity, takes the title of the indorser. If he is a bona fide purchaser without notice he may even take a better title than the indorser, in which case he might be able to recover even though the indorser could not. And inas- much as an indorser takes the title of the indorser, he may be able to recover even though he has knowledge of existing equities, providing the indorser was able to recover against existing equities. SEC. 42. j FRENCH V. TURNER. 261 fendant, by an instrument in writing, executed contemporane- ously with the assignment, covenanted and agreed with the plaintiff that the notes were secured by mortgage. And in consideration that the plaintiff would receive the notes with- out indorsement, the defendant then and there agreed by parol, and undertook and promised the plaintiff, that if he could not collect the same from Bodle, the defendant would pay the plaintiff the sum of money mentioned in the notes. The foreclosure of the mortgage; the insufficiency of the mortgaged premises to pay the debt; the insolvency of Bodle, and that the note due November 6, 1858, with the interest thereon, remains due and unpaid, are averred, substantially, as in the first count. Decision. — The first count is evidently based upon the supposition that the defendant is liable as an indorser of the notes. This, however, is not the case. In order to render him thus liable, the indorsement of the notes must have been made "thereon" (i R. S., 1852, p. 378), or perhaps, "on another paper annexed thereto (called in French, Allonge), The reason for this rule is that when the contract once comes into the hands of a bona fide holder without notice it is purged of all equities existing against it, and they may not be interposed again against one having notice even. The only limitation on this rule is that when it reaches the hands of the original parties again, the equities attach and may be interposed against them. Kost v. Ben- der, 25 Mich., 515; Woodworth v. Huntoon, 40 III, 141, where Walker, C. J., said, "A note tainted with fraud or other infirmity passing into the hands of an innocent purchaser, not chargeable with notice, for a valuable consideration (and before maturity), he acquires it purged of the defenses, and any other person acquir- ing it from him succeeds to his rights in the same condition he held them. A defense to the instrument in the hands of an orig- inal holder having been thus cut off is not revived by the note being again transferred." Judge Cooley, in discussing this ques- tion in the case of Kost v. Bender, supra, says, "But I am not aware that this rule has ever been applied to a purchaser by the original payee, nor can I perceive that it is essential to the protec- tion of the innocent indorsee that it should be." Indorsement— Presumption as to the Place.— Every indorsement is presumed to have been made, at the place where the instrument is dated. This presumption is but prima facie. Brook, Oliphant & Co. v. Vannest, 58 N. J. L., 162; Maxwell v. Vansant, 56 III, 58. 16 262 FRENCH V. TURNER. [CHAP. 8, which is sometimes necessary, when there are many succes- sive indorsements to be made."' The indorsement in question, made upon the mortgage, refers to the notes as being therein described, and is not upon the notes, or upon any paper attached to them. Such an assignment could not operate to transfer the legal title to the notes. It would convey an equitable title, authorizing the assignee, under our code, to sue thereon in his own name, but it does not place the assignor in the condition of a legal indcrser. By such an assignment, the assignor does not war- rant the solvency of the maker of the notes. It is no more effectual for that purpose than a parol assignment would be, an assignment made by the delivery of the notes. The case is analogous to the transfer of a bill payable to bearer, by delivery. "If it is payable to the bearer, then it maybe transferred by mere delivery. But, although it may be thus transferred by mere delivery, there is nothing in the law which prevents the payee of a bill, payable to himself or bearer, from transferring it, if he chooses, by indorsement. In such a case, he will incur the ordinary liability of an indorser, from which, in the case of a mere transfer by delivery, he is ordinarily exempt. On the transfer of a bill, payable to the bearer, by delivery only, without indorsement, the person making the transfer to be deemed a party to the bill; although he may in some cases incur a limited responsibility to the per- son to whom he immediately transfers it, founded upon par- ticular circumstances, as, for example, upon his express or implied guaranty of its genuineness, and his title thereto.^ The defendant not being liable upon the notes, as in- dorser thereof it follows, that the first count is bad, and the demurrer thereto was properly sustained. The second count we also deem defective. Admitting that the defendant impliedly warranted that the note thus transferred had not been paid to him, which would seem to be 'Story on Bills, § 204. See also Rex v. Bigg, i Strange, 18; Arnot V. Symonds, 85 Pa. St., 99; Moxon v. Pulling, 4 Camp., 50; Young V. Glover, 3 Jurist. (N. S.), 637; Badgley v. Votrain, 68 III, 25. ^ Story on Bills, § 200. SEC. 42. j FRENCH V. TURNER. 263 the case, still he is not Hable on the contract of assignment. The plaintiif could only sue to recover what he paid for the as- signment of the note, as for money paid upon a consideration that had failed. If property was given for the assignment, then he could only sue for the property, as for property sold and delivered; and if the assignment was for a prior debt, then the prior debt only could be sued for.' Here, the consideration paid for the assignment, and to be recovered, if any thing, is not set out. Nothing more is averred in this respect than that the assignment was made "for value received." In what the value was received, whether in money, and if so, how much, or property, or by way of satisfaction of a precedent debt, does not appear. There is, evidently, not enough stated to show what the plain- tiff paid, and, therefore not enough to show what he was en- titled to recover. The instrument in writing therein mentioned, executed contemporaneously with the assignment, by which, as is alleged, the defendant agreed that the notes were secured by mortgage, is not set out, and therefore the case stands as if the allegations in that respect were stricken out. The parol agreement made, as is alleged, contemporaneously with the written assignment, can not be admitted to vary or extend the effect of the assignment as written. The doctrine in this res- pect is stated in the case of McClure v. Jeffrey,'' as follows: " The rule is, that all oral negotiations or stipulations between the parties, which preceded or accompanied the execution of the instrument, are to be regarded as merged in it, and the latter is to be treated as the exclusive medium of ascertaining the agreement to which the contractors bound themselves." The demurrers, we think, were correctly sustained, and the judgment must be affirmed. The judgment is affirmed, with costs.' ' Story on Prom. Notes, §§ 117, 118 and notes. ''S Ind., 79. ' Upon the question, as to what constitutes an indorsement, the following authorities will be found to throw some light; 2 Bl. Com., 468, 469; Story on Notes, § 121; i Stranges R., 18, 19; Rex v. Bigg, 3 Peere William's R., 419; 11 Grattan's R., 830. UNION BANK V. WILLIS. [CHAP. 8, SECTION 43. AN INDORSEMENT CAN ONLY BE MADE BY THE PAYEE OR SUBSEQUENT HOLDER. AN INDORSEMENT BY A STRANGER TO THE BILL OR NOTE IS IRREGULAR OR ANOMALOUS. UNION BANK V. WILLIS.' In the Supreme Court of Massachusetts, October, 1844. \_Reported in 8 Metcalf, 504. ] The Form of Action. — Assumpsit by the indorsees against the indorser of a promissory note of the following tenor: '' August 8th, 184.J. ^' For value received, [promise Tilley Willis, to pay to him, or order, $350, in four rnonths from date. T. D. Thompson. " On the back was the name of " B. L. Mirick & Co.," and un- der that name was the name of the defendant, both indorse- ments being in blank. At the trial before the chief justice, the plaintiff's cashier testified that they discounted the note for Thompson, and that when it was discounted, the names stood on the note as they now do. There was no evidence that the note was presented to JMirick & Co. for payment; but there was evidence tending show that notice of dishonor was given to them, as indorsers, as well as to the defendant. The defendant contended that Mirick & Co. were to be considered as joint, or joint and several, promisors, and that the defendant was not responsible as indorser, without proof of presentment to them for payment. But it was ruled that they were not to be so considered as promisors, as that pre- ' This case is cited in Daniel on Negotiable Instruments, 455, S94> 7i3> 713a, 999a, 1757; Benjamin's Cfialmers on Bills, Notes and Checks, 169, 221; Bigelow on Bills and Notes, 34, 104, 105; Bigelow's Cases on Bills and Notes, 38; Norton on Bills and Notes, 137; Tiedeman on Commercial Paper, 157, 212, 270, 313, 336- SEC. 43. J UNION BANK V. WILLIS. 265 sentment of the note to them, and demand of payment of them, were necessary to charge the defendant. A verdict was returned for the plaintiffs, which is to be set aside, and a new trial granted, if the ruling was incorrect. Decision. — It is admitted that the note was not pre- sented for payment to Mirick & Co. ; and the question is, whether the omission to do it discharges the indorser. If the subject now brought before us were a new one, we shough hesitate in giving countenance to such an irregularity, as to hold that any person whose name is written on the back of a note should be chargeable as a promisor. We should say, that a name written on the paper, which name was not that of the payee, nor following his name on his having in- dorsed it, was either of no validity to bind such individual, because the contract intended to be entered into, if any, was incomplete or within the statute of frauds; or that he should be treated, by third parties, simply as a second indorser; leav- ing the payee and himself to settle their respective liabilities, according to their own agreement. But the validity of such contracts has been so long estab- lished, and the course of decisions, on the whole, so uniform, that we have now only to apply the law, as it has been pre- viously settled, in order to decide the present suit. The first case of this description, of which any mention is made in the reports, is that of Sumner v. Parsons, tried before this court in Lincoln county, July term, 1801. The facts were these: "Parsons wrote his name on a paper and gave it to John Brown, but there was no evidence of the intent, or of any connection in business between them. Brown made a note on the other side, payable to Jesse Sumner or order, on demand, with interest, and signed it, and thirty days after made a partial payment on it. Sumner then got a writing in these words over the name of Parsons: ' In consideration of the subsisting connection between me and my son-in-law, John Brown, I promise and engage to guaranty the payment of the contents of the within note, on demand.' And he sued Par- sons, declaring on the promise, specially stating it, and the note, but did not aver any demand on John Brown, or notice to Parsons. In two trials in the supreme judicial court, it 2 66 UNION BANK V. WILLIS. [CHAP. 8, was held that Parsons was liable, and that Sumner had a right to fill the indorsement so as to make Parsons a common indorser of the note, with the rights and obligations of such, or a guarantor, warrantor or surety, liable in the first instance, and in all events, as a joint and several promisor would be."' Mr. Dane, who cites it in his Abridgment,^ remarks, that " this case was carried as far as any case had gone, and on the review the court was not unanimous; and it has since been questioned"; and we have no doubt with good reason; for the holder of the paper, having himself set out the contract by the words written over the name of the defendant, should have been held by its terms, and the legal effect should have been given to the material word "guaranty." And in that view of the contract, the promise of Parsons was only to pay after a demand upon Brown for payment, and a refusal by him, and of which Parsons should have had notice. But the court must have construed the writing as constituting him an original promisor, and so bound, absolutely, without notice. And in our apprehension, the writing of the guaranty over the name of Parsons ought not to have been as an act obligatory on him; but he should have been treated, if held at all, as an in- dorser of the note, and, as such, subject to the liabilities, and entitled to the notice, of an indorser.^ The next case which came before the court was that of Josselyn v. Ames.* By the report, it appears that John Ames was indebted on a note to the plaintiff, who demanded secur- ity, and John offered his brother Oliver as surety, Vv'ho was accepted. John then made a note to Oliver, not negotiable, and Oliver put his name on the back in blank. The plaintiff received it and gave up his former note, and afterwards wrote over the defendant's name the same words as in Sumner v. Parsons, with this additional clause, "and in consideration of receiving from Elisha Josselyn a note of the said John of the ' Amer. Prec. Declarations, 113. ^Vol. I, 416, 417. "See Beckwith v. Angell, 6 Conn., 325, opinion of Hosmer, C.J. '3 Mass., 274. SEC. 43.] UNION BANK V. WILLIS. 267 same amount." The court held that the plaintiff could not recover in that action, but might cancel the words written, and substitute, ' ' for value received, I undertake to pay the money within mentioned to Elisha Josselyn," and upon such an indorsement, might maintain an action upon the facts reported. In what light the court held the defendant, does not dis- tinctly appear; but we presume as an original promisor, from the manner in which the case of Sumner v. Parsons is spoken of. "The guarantor in that case," they say, "was not the promisee, but a stranger, who warranted the payment to him. He cannot himself warrant to a third person payment of a note made payable to himself and not negotiable." The next reported case is that of Hunt v. Adams,' which was assumpsit on a note given by Chaplin to Bennet, under which the defendant wrote, ' ' / acknowledge myself holden as surety for the payment of the demand of the above note. Witness my hand. Barnabas Adams." This cause was much considered, and the court ruled that the defendant, Adams, was to be charged as a promisor, and that his holding himself as surety did not abridge or affect the plaintiff's rights, but only was evidence, as between the prom- isor and himself, that he had signed for his accommodation. Other cases between the same parties, on similar notes, after- wards arose, and were decided in the same manner.^ Immediately after, occurred the case of Carver v. War- ren.' That was on a note made by one Cobb to the plaintiff, and on the back of which the defendant wrote his name; and the plaintiff filled the indorsement, and declared upon it as his promise. The defendant demurred to the declaration, on the ground that this was but a promise to pay the debt of an- other, and was void for want of consideration. But the court held that, by the pleadings, each promised to pay the same '5 Mass., 358. '' 6 Mass., 519. ^5 Mass., 545. 268 UNION BANK V. WILLIS. [CHAP. 8, sum, and that the defendant's promise did not import any guaranty or collateral stipulation; and that if the defendant had indorsed as guarantor, and the present indorsement was filled up without his consent, or any authority from him, he should have pleaded the general issue, and on the trial he might have availed himself of this evidence. And so the plaintiff had judgment on the demurrer. The case of Hemmenway v. Stone, followed. There the note ran, " I promise to pay F. M. Stone or order," and was signed B. Chadwick; and below was signed by the defendant. The court held that it was a joint and several note, like the case of March v. Ward.^ The next case was White v. Rowland,' which was on a note payable by one Taber to the plaintiff, and on the back of it was written, " For value received, we jointly and severally undertake to pay the money, tvithin -mentioned, to the said William White. I. Coggeshall, Jr. Jno. H. Howland." The court held that this undertaking was within the principle settled in Hunt v. Adams, and was the same as if the party had signed his name on the face of it; and that he was well charged as a several original promisor. The case of Moies v. Bird,* which succeeded, is substan- tially like the present. A note was made to the plaintiff, and signed by Benjamin Bird, and the defendant signed his name in blank on the back of the note. The court say, the defend- ant "leaves it to the holder of the note to write anything over his name which might be considered not to be inconsistent with the nature of the transaction. The holder chooses to consider him as a surety, binding himself originally with the principal; and we think he has a right so to do. If he was a surety, then he may be sued as an original promisor." ' 7 Mass., 58. 'Peaks's Cas., 130; see also Bayley on Bills (2d Amer. ed.), 44. ' 9 Mass., 314. ' II Mass., 436. SEC. 43. J UNION BANK V. WILLIS. 269 In the case of Baker v. Briggs/ which was an action to recover the amount of a promissory note made by one Ryan to the plaintiff, the name of the defendant, Briggs, was writ- ten on the back of it, and the court say that, according to sev- eral decisions, it was right to declare against him as promisor, though he stood in the relation of surety to Ryan, who signed the note on the face of it. The case of Chaffee v. Jones ^ was assumpsit on a note signed by Israel A. Jones, as principal, and Eber Jones and E. Owen & Sens, as sureties, by which they jointly and sev- erally promised to pay the president, etc., of the Housatonic Bank, or their order; and the plaintiff put his name on the back of the note in blank. The plaintiff was called upon, af- ter the neglect of the makers, and he paid it to the bank. The court held that where one, not a promisor, nor indorser, puts his name on a note, meaning to make himself liable with the promisor, he is to be regarded as a joint promisor and surety. He is not liable as indorser, for the note is not ne- gotiated, nor a title made to it, through his indorsement; nor as guarantor, there being no distinct consideration; but he means to give security and validity to the note by his credit and promise, and it is immaterial, for this purpose, on what part of the note he places his name. So in Austin v. Boyd,* where the defendant's name was, in like manner, on the note, it was held that the party, by thus putting his name on the back, makes himself an original promisor. He intends by it to give credit to the note. The case of Samson v. Thornton* was assumpsit on a note made by Benjamin Russell to the plaintiff, and was in- dorsed by the defendant, Thornton; and the declaration charged him as an original promisor. The court there ruled that the defendant, not being the payee of the note, must be held to stand in the character of an original and joint promisor and surety. '8 Pick., 130. ^19 Pick., 260. " 24 Pick., 64. *3 Met., 275. 270 UNION BANK V. WILLIS. [CHAP. 8, The case of Richardson v. Lincoln' is of the same type. There the court held that the defendant, not being payee, but having put his name, in blank, on the note, must be consid- ered as an original promisor and surety, if he put it on simul- taneously with the promisor, as an original contractor.^ The same questions have arisen in New York, in various cases, and have been decided in a similar manner. They will be found cited in Story on Notes, §§ 59, 472-480, where the subject is fully discussed, and the authorities examined. To hold the party, however, as promisor, where the name alone is written, it must appear that he made the promise at the time when the note itself was made; otherwise, he may either not be chargeable at all, or be chargeable as surety or guarantor, according to the facts proved. ' But that the promise was made at the same time with the note, is a fact which is to be presumed when the note is in the hands of a bona fide holder, and nothing is shown to the contrary. And in the present case, the note was offered to the plaintiffs for discount, by the maker himself, with the names of Mirick & Co. and Willis on the back of it; showing it, therefore, to have been an original undertaking on their part. It was contended, in the argument, that Mirick & Co. were merely sureties, and that the plaintiffs had a right to treat them as such, and therefore were not bound to demand payment of them as makers, as a necessary step to enable them to charge the indorser; the relation of promisor, surety and guarantor being distinct. There is, unquestionably, a ■distinction between these several undertakings; and always so in regard to a mere guarantor. But as to the subsisting rela- tions between a principal and surety, they rarely affect the contract between the creditor and surety. A man may be equally a surety and an original promisor; as where the prom- ise is, I, A. B., as principal, and I, C. D., as surety, promise '5 Met., 201. ^See also Sumner v. Gay, 4 Pick., 311. ^Carvor v. Warren, 5 Mass., 545; Tenney v. Prince, 4 Pick., 385; Baker V. Briggs, 8 Pick., 130; Oxford Bank v. Haynes, 8 Pick., 423; Story on Notes, §§ 473, 474; Beckwith v. Angell, 6 Conn., 315. SEC. 43.] UNION BANK V. WILLIS. 27 1 to pay; or where the party signs, and adds to his name the word surety. This does not make him less a promisor. It only defines the relation between him and his co-promisor; and as promisor, the necessity of a presentment to him is not dispensed with, if the intention of the holder of the note is to charge the indorser. It is not for the holder of the note to choose in what character he will consider the party who has put his name on the note; but he must treat him as sustaining that legal relation which the facts establish. If he put his name on the note at the time it was made, like the case at bar, he is a promisor; if after the making of the paper, he is a surety or guarantor, according to the agreement upon which he gives his signature. The fixing of the relation of the party, when he enters into the contract, is necessary for the protec- tion of holders, and for guarding the rights of indorsers, whose liability is conditional. If it were held otherwise, I do not well see how such contracts could be supported against the objection of being void within the statute of frauds. And, as it is, I consider these engagements rather as exceptions to the statute, than in any other light, and as growing out of, or rather engrafted upon, the law merchant applicable to regu- larly drawn bills of exchange and promissory notes. Upon this view of the law, as drawn from the various cases, we consider Mirick & Co. to have been joint and several promisors with Thompson, and liable in like manner with him. The demand, in this case, was made on Thompson, the signer of the note, and notice was given to Mirick & Co. and to Willis, as indorsers; and it is now contended, by the plain- tiffs, that if it should be held that Mirick & Co. are joint and several promisors with Thompson, and not indorsers, then the demand on Thompson is, in law, a demand on them also; and such demand being proved, that the indorser, on due notice, will be bound. The precise question here presented, we believe, has not been decided in any reported case. If the joint and several promisors are to be considered in the light of partners, then a notice to one must be esteemed a notice to all, as partners are but one person in legal contemplation; each partner. 272 UNION BANK V. WILLIS. [CHAP. 8, acting in such capacity, being not only capable of performing what the whole can do, and of receiving that which belongs to^ all, but by such acts necessarily binding all the partners. It follows, therefore, as an incident to such joint relations, that all the partners are affected by the knowledge of one. But in respect to mere joint and several promisors on a note, there is not such absolute community of interest between them, nor such necessary connection with each other, as to constitute them partners. The relationship is confined to the present specific liability of a joint and several promise, and which can not be extended by the act of one, so that his conduct shall necessarily bind the other. As between themselves, one promisor may be a mere surety, and the other the debtor; one surety may have received security for lending his name, the other not. Or, if there are three joint and several promisors, two may be sureties, and the other the principal debtor, although the fact may not appear on the note. As the incidents, then, of a partnership do not attach to such a limited joint liability, there being neither a community of interests, nor joint participation of profit and loss, the lact of knowledge on the part of the whole, from the actual knowledge of one, does not follow as a presumption of law; and a demand upon one is not, therefore, in law, a demand upon the whole. If. then, the bringing home of knowledge to each, or proof of a demand upon each, is a fact necessary to be proved, in order to bind third persons, then such knowl- edge or such demand on each, must be proved as any other fact. A case arose in Connecticut, upon a note payable to two jointly, and by them indorsed in their individual names. One ground of defense was want of notice of non-payment; and notice was proved to have been given to one only. The court held, after a careful consideration of the case, that a notice to one laid no foundation for an action against both, as each payee must indorse it, in order to transfer the title. ' This case, we think, involves and settles a principle similar to the one arising in the case at bar. And the Supreme Court of the state of New York strongly incline to a like view of the ' Shepard v. Hawley, i Conn., 367. SEC. 43. j UNION BANK V. WILLIS. 273 law, in a case ' where it was not necessary to decide the point. And Judge Story, who carefully considers the subject, in his work on notes, is of the same opinion.'' To apply the law to the tacts as proved in the case before us: Thompson and Mirick & Co. stand in the relation of joint 'S Hill, 234. ^ Story on Notes, §§ 230, 255. Indorsement by Joint Payees. — If a commercial contract be made payable to several persons, not partners, or in case it be indorsed to several persons jointly, it can only be transferred, by indorsement, by a joint indorsement of them all. If, however, the joint payees are partners, then it may be transferred by any one of them. One of the joint payees may be authorized by the others to indorse for them. Ryhiner v. Feickert, 92 111., 305; Story on Promissory Notes, sec. 125; Dan. on Negot. Inst, sec. 701a. While a joint payee or indorsee may not transfer the title, legal or equitable, by his separate indorsement, he may, however, transfer his interest in the same; Ryhiner v. Feickert, supra; Dan. on Negot. Inst., supra; in which case the transferee would take an equitable title only in the instrument. When joint payees become joint indorsers, the right of contribution exists among them. Lane V. Stacy, 8 Allen (Mass.), 41 (1864). By Whom May the Indorsement be Made? — In case the contract can be transferred by indorsement, the general rule is that it may always be indorsed by the legal or lawful holder. It may also be indorsed by an infant or a person of unsound mind. A\'hen the indorsement is by an infant it will pass a good title to the paper; but the infant of course does not render himself liable thereon unless he desires so to be, or unless after reaching his majority he ratifies the contract. But the infant may indeed avoid his indorsement and intercept the payment to the indorsee, or by giving notice to the antecedent parties, of his avoidance, furnish to them a valid defense against the claim of the indorsee. But until he does so avoid it, the indorsement is to be deemed, in respect to such antecedent parties, as a good and valid transfer. Culver V. Leavy, 19 La. Ann., 202; Story on Bills and Notes, sec. 80; Daniel on Negot. Inst., sec. 228; Tied, on Com. Paper, sec. 49. The indorsement by an infant is voidable only and not void. Goodsell v. Meyers, 3 Wend., 479. It has been said that, where he receives full consideration for the transfer, his right to avoid his contract is suspended until he reaches his majority; and that he cannot disaffirm it then without returning or offering to return the consideration received. There is some doubt, however, about this being the rule. Medbury v. Watrous, 7 Hill, no; Dan. on Negot. Inst., sec. 229. 274 UNION BANK V. WILLIS. [CHAP. 8, and several promisors. Pa5'ment of the note was demanded of Thompson, but not of jNIirick & Co. The defendant is an indorser, Hable only upon legal notice of a demand upon the promisors and a refusal by them to pay the note; and we are In case of the death of the holder, the right in these con- tracts passes to his personal representatives — administrators or executors — and then must be indorsed by them. The personal rep- resentative cannot bind the estate which he represents by his indorsement. Curtis v. National Bank, 39 Ohio St., 579. Where there are several executors they must all indorse. Brown v. Salis- bury, r Glyn. i& Jam., 407; Tiedeman on Commercial Paper, 262. At common law the husband by reducing the wife's chose in action to possession became the lawful owner of them and must therefore transfer them by indorsement. Conner v. Martin, i Strange, 516; Miller v. Delameter, 12 Wend., 433. This rule has now been greatly modified in many of the states by statute, so that she now owns and controls her own estate just as though she were a, feme soule. A spendthrift or a person under guardianship can not contract, and therefore cannot pass title by an indorsement. Lynch v. Dodge, 130 Mass., 458. In case of bankruptcy all the property of the bankrupt passes to the assignee, and together with it the control, etc., and thereby the original holder loses the right to indorse. In such cases the assignee may indorse these contracts. Where these commercial contracts are made payable to a co- partnerships, any one of the firm may indorse it; but such indorse- ment must be in behalf of the partnership. Otherwise the member of the firm who indorses would be personally bound. If one of the firm dies, then the survivor may indorse in his own name. If the paper is payable to a corporation it must be indorsed by some agent of the corporation who has authority to bind the corpora- tion by contract, and then the indorsement must show that it is the act of the corporation, for otherwise the agent would be per- sonally bound. When a bill or note or other commercial contract is payable to two or more persons jointly and who are not part- ners, they must all join in the indorsement in order that the whole title may be passed. If one of them indorses alone, it passes his equitable interest only. The indorsee in this case could not main- tain an action on the paper. When, however, the paper is pay- able to either of two or more persons, then any one may pass the title by indorsement. Culver v. Leavy, 19 La. Ann., 202; Ryhiner V. Feickert, 92 111., 311. Of course one of joint parties may be authorized to indorse such contract. He may also indorse to the others, in which case the indorsement will carry with it all his interest. Russell v. Swan, 16 Mass., 314. SEC. 43.] UNION BANK V. WILLIS. 275 of opinion that he has a right to avail himself of this neglect to make demand on Mirick & Co. to discharge himself from his liability as indorser. Verdict set aside, and a new trial granted. Irregular or Anomalous Indorsement — Defined. — An irregular or anomalous indorsement is where a person who is not the payee, but a third party, places his name on the back of a commercial contract before the name of the payee or of the orig- inal party to the contract. It is the indorsement by a stranger before the delivery of a commercial contract. Where the payee of a commercial contract indorses it by placing his name on the back of the instrument, a contract of indorsement is created; and parol evidence is not admissible to change or vary the terms of his contract. Kingsland v. Koeppe, 137 111., 344: 28 N. E. R., 48; Good V. Martin, 95 U. S., 95; Blakeslee v. Hewitt, 76 Wis., 341 (44 N. W. Rep., 1105); Cady V. Shepherd, 12 Wis., 639; People's Bk. V. Jefferson, etc. Bk., 106 Ala., 624. The exact nature of the liability of one who, not being the payee, — a stranger, — writes his name across the back of a negotiable contract before delivery, is differently stated in the various jurisdictions. In some states he is held to be a guarantor; in some a joint maker; in others an in- dorser; in others as a co-surety; but in all of the states it is held that parol evidence may be admitted for the purpose of showing the intention of such signer at the making of such signature. In Indiana it is held that he is a co-security or joint maker if the contract is non-negotiable while if it is a negotiable contract the same act is held to be an indorsement and the party liable as an indorser. Some of the states have settled the nature of his lia- bility by statute. In Connecticut, New Jersey, Indiana, Wiscon- sin, Pennsylvania, New York, Maine and in the courts of the United States his liability is that of an indorser. Spencer v. AUerton, 60 Conn., 410; DePauw v. Bank, 126 Ind., 553; Chad- dock V. Vaness, 35 N. J. L., 517; Cady v. Shepherd, 12 Wis., 639; Smith v. Kessler, 44 Pa. St., 142; Lester v. Paine, 39 Barb., 616; Brown v. Butler, 99 Mass., 179; Sturtevant v. Randall, 53 Me., 149; Good v. Martin, 95 U. S., 95. He is held to be a grantor in Illinois, Kansas, California, and Nevada. Kingsland V. Koeppe, 137 111., 344; Fullerton v. Hill, 48 Kan., 558: Riggs v. Waldo; 2 Cal., 485. He is held to be a joint maker or co- security in Tennessee, Missouri, Maryland and Vermont, Michi- gan, Massachusetts, Maine, Colorado, Arkansas, Delaware, Min- nesota, Missouri, Ohio, Rhode Island, North Carolina, South Carolina, Texas, Maryland, New Hampshire, Vermont, Utah. Bank of Jamaica v. Jefferson, 92 Tenn., 537; First Nat. Bk. v. Payne, iii Mo., 291; Owings v. Baker, 54 Md., 82; Smith v. Long, 40 Mich., 555; Seymour v. Mickey, 15 Ohio St., 515. 276 BROWN V. butcher's, ETC., BANK. [CHAP. 8, SECTION 44. NO PARTICULAR FORM IS REQUIRED FOR AN INDORSE- MENT. IT IS SUFFICIENT IF IT IS MADE, EITHER WITH AN INTENTION TO TRANSFER THE CONTRACT UPON WHICH IT IS WRITTEN, OR TO STRENGTHEN THE SECURITY AND TO TRANSFER THE CONTRACT.* BROWN V. BUTCHER'S, ETC., BANK.i In the Supreme Court, New York, May, 1844. [Reported in 6 Hill, 443, 41 Am. Dec, 7SS-] On error from the Superior Court of the city of New York, where the Butchers and Drovers' Bank sued Brown as the indorser of a bill of exchange, and recovered judgment. The indorsement was made with a lead pencil, and in figures thus, "I. 2. 8. ," no name being written. Evidence was given strongly tending to show that the figures were in Brown's hand-writing, and that he meant they should bind him as in- 'This case is cited in Daniel on Negotiable Instruments, 74, 688a; Benjamin's Chalmers on Biils, Notes and Checks, 57; Nor- ton on Bills and Notes, 58, 108, 382; Tiedeman on Commercial Paper, 12, 265; Bigelow on Bills and Notes, 10, 25, 63; Bigelow's Cases on Bills and Notes, 77. See also 41 Am. Dec, 755, and cases cited. *Form of Indorsement. — No particular form is required so long as it is in writing and placed upon the contract to be trans- ferred. It is quite immaterial whether the indorsement be written on the back of the instrument or on the face. Young v. Glover, 3 Jurist (U. S.), 637; I Aures Cases on Bills and Notes, 228; Gor- man V. Ketchum, 33 Wis., 427; Chitty on Bills, 227; Haines v. Dubois, 30 N. J. L., 259; Rex v. Bigg, i Strange, 18; Shaw v. Sullivan, 106 Cal., 208; Quin v. Sterne, 26 Ga., 223; Arnot v. Symonds, 85 Pa. St., 99; Marion Gravel Road Co. v. Kessinger, 66 Ind., 553; Herring v. WoodhuU, 29 111., 92; Yarborough v. Bank of England, 16 East, 12; Gibson v. Powell, 6 How. (Miss.), 60; Moies V. Bird, 11 Mass., 436; Story on Promissory Notes, sec. 121 . The indorsement is generally written upon the back of the note and at the left-hand end thereof. In the case of Haines v. Dubois, supra, the payee wrote his name under that of the maker, and it was held to be a sufficient indorsement. SEC. 44. J BROWN V. butcher's ETC., BANK. 277 dorser; though it also appeared that he could write. The court below charged the jury that, if they believed the figures upon the bill were made by Brown, as a substitute for his proper name, intending thereby to bind himself as indorser, he was liable. The jury found a verdict for the plaintiffs be- low, on which judgment was rendered, and Brown thereupon brought error. An Allonge Defined. — The indorsement may also be written upon another paper if the same is attached to the contract, in which case it is called an " allonge." It may sometimes happen that in numerous transfers from hand to hand, the back of the paper is covered by endorsements. In such case the holder may tack on a piece of paper sufficient to bear his own and subsequent indorse- ments. This addition is called an "allonge." Young v. Glover, 3 Jurist (U. S. ), 637; French v. Turner, 15 Ind., S9j Cusley v. Roub, 16 Wis., 616; Folger v. Chase, 18 Pick (Mass.), 63; Helmer V. Com. Bank, 44 N. W. Rep., 482. The full name of the indorser should be written, and it is usual so to do; but the initials will be sufficient, as well as any mark or sign, instead of the name if made to represent it. Merchants Bank V. Spicer, 6 Wend., 443; Corgan v. Trew, 39 III, 31; Rogers v. Colt, 6 Hill, 322; Brown v. Butchers and Drovers Bank, 6 Hill 322; Johnson's Cases on Bills and Notes, 114. The indorsement may be made with pen or pencil, so long as the intention of the parties can be ascertained. Geary v. Physic, 5 Barn. & C, 234; Brown v. Butchers Bank, 6 Hill, 443; Closson V. Steans, 4 Vt., 11; 41 Am. Dec, 755. The following forms of expression have been held to consti- tute good indorsements when written across the instrument and properly signed: — "I, 2, 8;" "Pay the contents to A;" " Pay A;" " Pay A or order;" "Pay A or bearer;" "assign;" "sell and assign;" "Pay to the order of A;" "A;" "Pay A only;" "Pay A for the use of B;" " I hereby assign this draft and all benefit of the money secured thereby to B;" " I hereby assign all my right and title to the within note to B." Brown v. Butchers Bank, 6 Hill, 443; Ad- ams V. Blethen, 66 Me., 19; Sears v. Lantz, 47 la., 658; Vincent V. Horlock, I Camp., 442; Sands v. Wood, 21 Iowa, 263; Shelby V. Judd, 24 Kan., 166. " I hereby transfer my right and title to the within note to S. A. Yeoman," was held to be a good transfer of the contract in Michigan by assignment. Aniba v. Yeoman, 39 Mich., 171. The full name of the indorser should be given, but the initials will answer. No particular form is necessary. The following have also been held to constitute an indorsement: Just the name written across the back of note or bill; "Pay A. or order," or "bearer;" 278 BROMAGE ET AL. V. LLOYD ET AL. [CHAP. 8, Decision. — It has been expressly decided that an indorse- ment written in pencil is sufficient;' and also that it may be made by a mark.^ In a recent case it was held that a mark was a good signing within the statute of frauds; and the court refused to allow an inquiry into the fact whether the party could write, saying that would make no difference/ These cases fully sustain the ruling of the court below. They show, I think, that a person may become bound by any mark or designation he thinks proper to adopt, provided it be used as a substitute for his name, and he intend to bind him- self.* Judgment affirmed. SECTION 45. AN INDORSEMENT IS NOT COMPLETE UNTIL A DELIVERY OF THE CONTRACT UPON WHICH IT IS MADE. BROMAGE ET AL. :■. LLOYD ET AL.s In the Court of Exchequer, May, 1847. \_Reported in i Exchequer Hep., J 2.^ The Form of Action. — Assumpsit. The declaration "assign;" "sell and assign;" any form of words, with the signa- ture, which will indicate the intention of the indorser. It has been held that the indorsement need not be on the back of the instru- ment. Rex V. Bigg, I Strange, 18. It matters not where the sig- nature appears, so long as it shows what the nature of the liability is. Quin V. Sterne, 26 Ga., 223; Arnotv. Symonds, 85 Pa. St., 99. 'Geary v. Physic, 5 Barn. & Cress., 234. "George v. Surrey, i Mood. & Malk., 516. 'Baker v. Dening, 8 Adol. & Ellis, 94; and see Harrison v. Harrison, 8 Ves., 186; Addy v. Grix, id., 504. *See Rogers v. Coit, (ante. p. 322, 323). ^This case is cited in Daniel on Negotiable Contracts, 64, 267; Norton on Bills and Notes, 72, 135; Tiedeman on Commercial Paper, 34, 148; Benjamin's Chalmers on Bills, Notes and Checks, 59, 61; Wood's Byles on Bills and Notes, 115, 285; Ames on Bills and Notes, 289. See also, Clark v. Sigourney, 17 Conn., 511; Clark V. Boyd, 2 Ohio, 56; Taylor v. Surget, 21 N. Y., ti6; Mars- ton V. Allen, 8 Mees. & W., 494; Spencer v. Carstarphen, 15 Colo., 445 (1890); 24 Pac. Rep., 882; Laird V. Davidson, I24lnd.,4i2; Cooper V. Nock, 27 111., 301. SEC. 45. J BROMAGE ET AL. V. LLOYD ET AL. 279 Stated, that the defendants, on, etc., made their promissory note in writing, and thereby jointly and severally promised to pay one H. Lloyd Harries (since deceased) or order, ;£'300 on demand, and then delivered the said note to the said H. Lloyd Harries, who then indorsed the said promissory note, but with- out making any delivery thereof: and afterwards, to wit, on, etc. , the said H. Lloyd Harries died, having first made his last will and testament, in writing, duly executed and attested as by law required, and thereby appointed his then wife, to wit, one Jane Harries, executrix thereof, who, after the death of the said H. Lloyd Harries, to wit, on, etc., duly proved the said will and took upon herself the execution thereof, and be- came and was sole executrix thereof; and she, as such exe- cutrix, afterwards, to wit, on, etc. , for good and valid con- sideration to her, as such executrix as aforesaid, in that be- half, transferred the said note, so indorsed as aforesaid, to the plaintiffs, to wit, by delivery thereof to them by her as such executrix as aforesaid; of all which the defendants then had notice, and then, in consideration of the premises, promised to pay the amount of the same note to the plaintiffs, accord- ing to the tenor and effect thereof, and of the said indorse- ment and delivery. General demurrer, and joinder. The Claim of Defendant.— The plaintiffs have no title to sue on the note. An indorsement consists of two things, namely, (i) the writing on the note of the name of the party transferring it, and (2) of a delivery for the purpose of complet- ing such transfer.' In the present case, the testator wrote his name on the note, but did not deliver it; the executrix has delivered the note without indorsing it. The indorsement by the testator was a mere inchoate act which could not be ren- dered complete by the subsequent delivery of the executrix. In Rex V. Lambton,^ Wood, B., says, "It is clear that a spe- cial indorsement does not transfer the property in bills until they are delivered over." Suppose the testator has sealed a. ' Marston v. Allen, 8 M. & W., 494. '5 Price, 442. 28o BROMAGE ET AL. V. LLOYD ET AL. [CHAP. 8, bond, and died without delivering it, a delivery by his execu- trix would not render it the deed of the testator. In Adams V. Jones,' Ld. Denman, C. J., says, "A bill may be indorsed to a party in two ways, either by special indorsement, making it payable to that party, or by a blank indorsement, and de- livery to that party. In the latter way, at all events, if not in the former, the bill must be delivered to the party as in- dorsee, in order to constitute an indorsement to him." An indorsement of a bill by an executor, with delivery, will not bind the assets of the testator.^ A fortiori delivery, without indorsement, cannot do so. The Claim of Plaintiff. — First, upon general demurrer, there is a sufficient allegation of the transfer of the note. The declaration alleges that the executrix, for good and valid consideration to her as executrix, transferred the note so in- dorsed as the plaintiffs, to wit, by delivery thereof to them by her, as such executrix as aforesaid. That allegation is tanta- mount to a legal indorsement by the executrix. The promise alleged in the declaration is to pay according to the tenor and effect of the said indorsement. If a legal transfer can only be made by the party writing his name upon and delivering the note, then upon general demurrer, such must be taken to be the meaning of the word "transferred." The true con- struction of the declaration in this: that the executrix trans- ferred the note "being so indorsed as aforesaid;" that is, in- dorsed by another person. The videlicet does not control the operation of the word "transfer," or render material the mode in which it is alleged to have been made.^ A "trans- fer" may mean either an indorsement or assignment; which latter word is used in the statute 3 & 4 Anne, c. 9. If the defendant had pleaded by denying the transfer modo et forma, and that issue had been found against him, he could not after verdict have taken advantage of any ambiguity in the declara- tion. Secondly, even if it be taken on the face of the declara- tion that there was a mere writing of his name by the testator, '12 Adolph. & E., 459. ^Childs V. Monins, 2 Bred. & Bing., 460; E. C. L. R., 6. '^Hammondv. Colls, i C. B., 916. SEC. 45.] BROMAGE ET AL. V. LLOYD ET AL. 281 and a delivery by the executrix, such transfer would pass the property in the note, and entitle the plaintiffs to sue upon it. Where the testator has delivered a note without indorsement, an indorsement by his executor is equally valid as if made by himself.' That case only decides, that where a party delivers a note for a valuable consideration, without indorsement, he creates an equitable, not a legal title, and the holder, having an equitable right, is entitled to call on the executor of the party who delivered it to give a formal transfer. If a note is transferred without indorsement before bankruptcy, the holder may call on the bankrupt or his assignees to indorse it.^ There are many instances in which an executor may adopt and ratify the acts of his testator. A cognizance by a defendant, as bailiff of an executor, for rent due to the testator, is sup- posed by proof of a distress by him in the name of the testa- tor, and by his direction, but after his death; such distress, though made before probate, having been afterwards adopted and ratified by the executor." In that case Ld. Denman, C. J., said, " The law knows no interval between the testator's death and the vesting of the right in his representative." An executor is not in the situation of a mere agent, but his acts are identified with those of his testator. Decision. — This is an action on a promissory note, upon which a party has written his name, and after his death his executrix delivers the note to the plaintiffs without indorsing it; so that there is a writing of his name by the deceased, and a delivery by his executrix. Those acts will not constitute an indorsement of the note; the person to whom it is so delivered has no right to sue upon it. The promissory note, was made payable to the testator ''or order;" that means order in writing. The testator has written his name upon the note, but has given no order; the 'Watkins v. Maule, 2 Jac. & W., 237. 'Smith V. Pickering, Peake, N. P. C, 50; Arden v. Watkins, East., 317. ''Whitehead v. Taylor, 10 Adol. & E., 210. 282 HOTEL CO. V. BAILEY. [CHAP. 8, executrix has given an order, but not in writing. The two acts being bad, do not constitute one good act. The word "transfer" means indorsement and delivery. Judgment for the defendant.* SECTION 46. AN INDORSER CONTRACTS TO PAY THE BILL OR NOTE INDORSED ACCORDING TO ITS TENOR, IF, UPON PRE- SENTMENT TO AND DEMAND UPON (AND PROTEST WHEN NECESSARY), THE PARTIES WHO ARE PRIMAR- ILY LIABLE, PAYMENT IS REFUSED, HE IS DULY NOTI- FIED OF SUCH REFUSAL. HOTEL CO. V. BAILEY.i In the Supreme Court of Vermont, Mar., 1892. \Reported in 64 Vermont, i^i; 24 At I. Rep., ij6.] The Form of Action. — Special assumpsit for the annual interest due on five promissory notes indorsed by the defend- *An acceptance or indorsement of a bill or note is not com- plete without actual or constructive delivery; Cox v. Troy, 5 B. & Aid., 474; Brind v. Hampshire, t M. & W. 65; Marston v. Allen, 8 Id., 494; Belcher v. Campbell, 8 Q. B., i. And as between the original parties and subsequent holders with notice, evidence that the delivery was merely for safe keeping, will, it seems, sustain a traverse of the indorsement, Marston v. Allen, supra; although not as against a subsequent bona fide purchaser, Hayes v. Caulfield, 5 Q- B., 81. 'This case is cited in illustrative cases on Bills and Notes, 109. See also Allin v. Williams, 97 Cal., 403; 32 Pac, 441; First Nat. Bank v. Crabtree, 86 Iowa, 731; 52 N. W., 559; Bowman v. Hiller, 130 Mass., 153; Kenworthy v. Sawyer, 125 Mass., 28; Sjnker V. Fletcher, 61 Ind., 276; First Nat. Bank v. National M arine Bank, 20 Minn., 63 (Gil., 49). The indorser impliedly warrants that the paper is a valid obligation in every particular, that all the parties to said note were competent to contract; that he has a per- fect title to the paper; that the maker will pay it if properly pre- sented (Copp V. McDugall, 9 Mass., i; Erwin v. Downs, 15 N. Y., S7S; Prescott Bank v. Caverly, 7 Gray, 217); that the note is not usurious (Hazard v. Bank, 72 Ind., 130; Stewart v. Bramhall, 74 N. Y., 85.) To charge an indorser there must be a demand and notice. 1 Par., Bills and Notes, 3S3-3S6, 442, 443; Sto. Pr. Notes, s 135; 2 Aik., 264; Whitney v. Dean, 22 Vt., 561. SEC. 46. j HOTEL CO. V. BAILEY. 283 ant. Plea, the general issue. Judgment for the defendant. The plaintiff excepts. Decision. — It appears by the statement of facts that Geo. Doolittle and Mrs. E. J. Doolittle promised to pay the defend- ant, William P. Bailey, or order, five thousand dollars, as their five promissory notes should respectively become due, and the interest thereon annually. The notes are dated April I, 1886, are for $i,ooo each, and payable i6, 17, 18, 19 and 20 years from their date. The plaintiff, as the indorsee of the notes, seeks to re- cover of the defendant, as indorser, the first three years' in- terest upon them without demand of the makers and notice to the defendant of the makers' default of payment. The defendant's counsel contended, — ist, that the indor- ser cannot in any event be compelled to pay the interest as it annually falls due, that his conditional liability does not be- come absolute until the notes respectively mature, and then only after demand and notice. 2d. That if the interest is collectable of the indorser as it annually accrues it is after the usual measures have been taken to make him chargeable. The general rule of law relative to the respective liabili- ties of the maker and indorser of a promissory note is well de- fined. The promise of the maker is absolute to pay the note upon presentment at its maturity. The promise of the in- dorser is conditional that if, when duly presented, it is not paid by the maker, he, the indorser, will, upon due notice given him of the dishonor, pay the same to the indorsee or other holder. It seems clear that the indorser is not liable for the an- nual payment of the interest without performance of these conditions by the holder. If he were thus liable his relation to the note would be like that of a surety or a joint maker, and his promise, instead of being conditional, would be abso- lute as to the payment of the interest. This is contrary to the general statement of the law that his liability is conditional. The relation of principal does not exist between him and the maker. They are not co-principals. Their contracts are 284 HOTEL CO. V. BAILEY. [CHAP. 8, separate and they must be sued separately, at common law.' The maker has received the money of the payee and in consideration thereof promises (absolutely) to repay it accord- ing to the terms of the note, and if he fails to pay, his con- tract is broken and he is liable for the breach. The contract of the indorser is a new one, made upon a new consideration moving from the indorsee to himself. His undertaking is in the nature of a guaranty that the maker will pay the principal and interest according to the terms of the note. His liability is fixed upon the maker's default upon demand, and notice to him of such default. This new contract cannot be construed as an absolute one to pay the interest without default of or demand upon the maker. The promise cannot be absolute as to the payment of interest when it is clearly conditional as to the payment of the principal. Interest Payable Annually. — When due. — It is held that though the annual interest (interest payable annually) upon a promissory note may be collected of the maker as it falls due, it is not separated from the principal so that the re- covery of it is barred by the statute of limitations until the re- covery of the principal is thus barred.^ The holder of a note with interest payable annually loses no rights against the par- ties to it, whether makers or indorsers, by neglecting to de- mand interest, and he has the election to do so, or wait and collect it with the principal, for it is regarded as an incident of the principal.^ But it is so far an independent debt that he may maintain an action against the makers for it as it an- nually accrues, or allow it to accumulate and remain as a pari of the debt until tlie note matures.*' In the latter course the makers would be chargeable with interest upon each year's interest from the time it was due until final payment.* It was said, by the court in Talliaferro's Ex'rs. v. King's Admr," ' Randolph Com. Paper, s. 739. ^ Grafton Bank v. Doe et al., 19 Vt. , 463. 'National Bank of North America v. Kirby, 108 Mass., 497. * Catlin V. Lyman, 16 Vt., 44. * I Aik., 410; Austin v. Imus, 23 Vt., 286. '9 Dana, 331, (35 Am. Dec, 140.) SEC. 46. ] HOTEL CO. V. BAILEY. 285 ' ' The interest, by the terms of the covenant, is made payable at the end of each year, and is as much then demandable as if a specific sum equal to the amount of interest had been promised; and, in default of payment, as much entitles the plaintiff to demand interest upon the amount so due and un- paid. The fact that the amount so promised to be paid is described as interest accruing upon a larger sum, which is made payable at a future day, cannot the less entitle the plaintiff to demand interest upon the amount, in default of payment, as a just remuneration in damages for the detention or non-payment." It is true that at the maturity of the notes the defendant would be liable, as indorser, for both principal and interest, upon due demand and notice, although these measures had not been taken to make him chargeable as the interest fell due each year. Notice of the maker's default of payment of interest need not be given annually to the indorser in order to charge him with liability for interest when the note matures. This is so stated by the court in National Bank of North America v. Kirby, supra. In Howe v. Bradley,' it is held that when a note is made payable at some future period, with interest annually till its maturity and no demand is made for the annual interest as it becomes due, or if made, no notice thereof is given the indorser, if duly notified of the demand and non-payment when the note falls due, is liable for the whole amount due, both principal and interest; that the obli- gation imposed by the law upon the holder is only to demand payment and give the required notice when the bill or note becomes payable. It is not held in this country that interest is subject to protest and notice, according to the law mer- chant, in order to charge indorsers with it when the note ma- tures. The usual consequence of omission to notify the indorser of the maker's default, namely, the release of the indorser, would not follow the omission to give him annual notice of such default. A note is not dishonored by a fail- ure of the m.aker to pay interest.'' '19 Me., 31. ^ First National Bank v. County Commissioners, 14 Minn., 77 (100 Am. Dec, T96, note). 286 HOTEL CO. V. BAILEY. [CHAP. 8, The defendant's counsel argues that it would be incon- sistent to hold the indorser liable for interest, which is a mere increment of the principal, until his liability is established to pay the sum out of which the interest springs; that there may be defences to the note at its maturity which will release the maker and consequently the indorser, or that the indorser may then be released by neglect of demand and notice. On first impression it might seem inconsistent that the maker should be compelled to pay interest before his liability has been fixed to pay the principal, but that is his contract. It is also argued that the fact that the interest, when uncollected, is an incident of the debt so that as it annually falls due, de- mand and notice are not necessary in order to charge either the maker or the indorser with liability to pay it when the note matures, is ground for holding that the indorser is not liable for interest until he is made liable for the principal. The Indorser's Contract. — The question is whether the indorser, by the act of indorsement, promises to pay anything on the note till its maturity, at which time he clearly may be made liable for both principal and interest. The note bears upon its face an absolute promise by the maker to pay the principal when it becomes due and the interest thereon annually. His promise is two-fold. It is as absolute to pay the interest at the end of each year as to pay the principal at the end of the time specified. Now what is the nature of the contract which the indorser makes with the indorsee .'' His contract is not in writing, like that of the maker, but his name upon the note is evidence that he has received value for it, and also of an undertaking on his part that it shall be paid according to its tenor. When he indorses it and delivers it to the indorsee he directs the payment to be made to the latter, and in effect represents that the maker has promised to pay certain sums of money according to the terms of the note, that is, the principal at maturity and the interest annually; that if the maker fails to pay on demand, he, the indorser, will pay on due notice. His conditional promise is concur- rent with the absolute promise of the maker. His liability to pay interest and principal, as each respectively falls due, arises from his contract. It is his contract that he will make SEC. 46.] HOTEL CO. V. BAILEY. 287 payment whenever the maker is in default and he, the in- ■dorser, is duly notified thereof. It is true that interest is an incident, an increment of the principal, and that the holder may wait for it until his note matures and then collect it with the principal. He may, however, by the contract, collect it as it falls due, of the maker, and upon the latter's default, of the indorser. Presentment, Demand and Notice Necessary to Charge an Indorser with the Payment of Installments of Principal. — The courts of England have never recognized the American doctrine that interest is a mere incident, an outgrowth of the principal, and in many cases follows and is recoverable as such without an express contract. Until 37 Hen., 8, c. 9, it was unlawful to demand interest even upon a contract to pay it. Since the case of DeHavilland v. Bowerbank,' interest has been allowed in England upon express contracts therefor, and not otherwise. Where there is such a contract interest stands like the principal in respect to the rights and liabilities of an indorser.^ In Jennings v. Napanee Brush Co.,'* in a learned opinion by McDougall, J., it was held that where there was an express contract to pay interest annually or semi-annually , it was not different from a contract to pay an installment of the principal itself, and that notice to the in- dorser of the maker's default was necessary to charge the indorser with it. In that case the indorser was released from payment of the first two half-yearly installments of interest for want of demand and notice. While we adhere to the doctrine laid down in Grafton Bank v. Doe, et. al., supra, that interest is in general an in- cident of the debt, it is consistent to hold that where the in- dorser is himself a party to the original contract to pay inter- est annually, as in the case at bar, by his indorsement he guarantees the performance of that contract. Any other hold- ing would make the indorser liable for only a part of the maker's contract. ' I Camp., 50. ''Sedg. on Dam., 383; Selleck v. French, i Conn., 32, (6 Am. Dec, 189, note.) ''Reported in Canada Law Jour., Vol. 20, No. 19. 2 88 HOTEL CO. V. BAILEY. [CHAP. 8, The case of Codman v. The Vt. and Can. Railroad Co.,' has been brought to our attention. The trustees and mana- gers of the Vermont Central Railroad Co. and the Vt. and Can. Railroad Co., issued notes to the amount of $1,000,000 in sums of $1,000 each, payable to the defendant company, in twenty years from their date, with interest semi-annually on presentation of the interest coupons made payable to bearer and attached to the notes. On each note was this indorse- ment, signed by the treasurer of the defendant, under its seal: " For value received, the Vermont and Canada Railroad Com- pany hereby guarantee the payment of the within note, prin- cipal and interest, according to its tenor, and order the con- tents thereof to be paid to the bearer." The coupons were not indorsed. The notes were put on the market and the plaintiff purchased fifty of them, and subsequently, after due demand, notice and protest, brought this suit to recover the amount of two coupons on each of his notes, the notes them- selves not having matured. Without passing upon the ques- tion whether the guaranty was negotiable and available to the plaintiff, as a remote holder, Wheeler, J., among other ques- tions that arose in the case, decided that the indorsement was a contract of indorsement running to the bearer, and that demand, notice and protest fixed the liability of the indorser to pay the coupons, and gave judgment for plaintiff for the amount of the coupons. Statute of Limitations — Annual Interest. — The Su- preme Court of the United States has repeatedly held that the statute of limitations begins to run upon interest coupons payable annually or semi-annually, from the time they re- spectively mature, although they remain attached to the bonds which represent the principal debt.* Where the indorser is the payee of the note there would seem to be no difference in his liability in respect to interest whether the maker's promise to pay it is contained in the body of the note or in interest coupons not indorsed, the notes to which they are attached being indorsed, and the coupons being mentioned in the notes;, but it is unnecessary to decide that question here. '16 Blatch., 165. "Amy V. Dubuque, 98 U. S., 470. SEC. 46. J HOTEL CO. V. BAILEY. 289 Upon the facts found by the county court this action can- not be maintained for the reason that the plaintiff never fixed the defendant's Uability to pay the three years' accrued inter- est. It does not even appear that the makers refused pay- ment of it or that they were requested to pay it before this suit was brought; therefore nothing is due from the defendant to the plaintiff. Judgment affirmed. Ross, Ch. J., dissents. Ross, Ch. J. I concur in the disposal made of this case; and in most of the grounds and reasoning of the opin- ion. But I do not see my way clear to concur in holding, that an indorser upon a promissory note, payable on time, with the interest annually, can be made chargeable for the payment of the interest, before he can be, and is, charged with the payment of the principal. By placing his name on the back of the note as an indorser, without making any limita- tion upon his indorsement, he guarantees its payment, upon condition that the indorsee, when the time named in the note for its payment arrives, shall present it to the maker and demand its payment, and, if the maker fails to make payment, shall seasonably notify him of such failure. When this is done, the indorser promises to pay whatever of principal and interest, is then due upon the note. This condition attaches primarily to the principal of the note. I think it attaches to the interest only as it becomes a part of the principal. It seems to me to be illogical, and pressing the indorser's condi- tional undertaking beyond its proper scope and office, to hold that he can have his liability fixed to pay for the use, or legal rental of the principal, before his hability to pay the principal is fixed. Interest is legal damage, fixed usually by statute, for the detention and use of money. As soon as the money is due and payable, the law implies damage for its detention and use. It may also arise from the contract, for the detention and use of the principal before it is payable by the terms of the contract. When stipulated to be paid annually, it may be collected from the maker of the note at the end of each 290 HOTEL CO. V. BAILEY. [CHAP. 8, year, because such is his contract.' It is an incident, and out- growth from the principal. The promise to pay it, whether implied or expressed, is a dependent promise. It is attached to and arises from the promise to pay the principal. When the interest is stipulated to be paid annually, and before the principal is payable, the maker when sued for the annual in- terest, because his promise to pay it is dependent upon his promise to pay the interest, may set up any defence to the suit for recovering the annual interest, which he could if the suit were for the recovery of the principal, such as fraud in the inception of the note; or want or failure of consideration, or duress, or that his liability for the principal is conditional, the terms of which have not been complied with. If he defeats the action, it will estop the holder from recovering the principal when due, and vice versa. The opinion recognizes this intimate, attached and depen- dent relation of the promise to pay the interest annually to the promise to pay the principal, from which the interest springs. It recognizes that the statute of limitations does not begin to run on such promise to pay interest annually until the princi- pal falls due, in accordance with Grafton Bank v. Doe et al.^ This must be because, until severed by enforced collection or payment, interest is but an incident, and dependent of the principal. It also recognizes this relation in holding that the indorsee may allow the interest to accumulate, and may fix the indorser's liability to pay it, by a proper demand, de- fault and notice in regard to the principal when that falls due. That is because liability for the principal carries its dependen- cies. I concur in the holdings. They are supported by the decisions cited in the opinion. But they rest, and, in my judgment, can rest only on the basis that the promise to pay the interest annually, both for its consideration and enforce- ment is dependent upon the promise to pay the principal. The opinion also holds that the liability incurred by the in- dorsement is conditional, that that condition attaches to the 'Ross, Ch. J., has not kept in mind that the contract of an indorser is in the nature of a guaranty that the maker will do exactly what he promised to do. '19 Vt., 463. SEC. 46.] HOTEL CO. V. BAILEY. 29I entire note, and that the liabiHty of the indorser must be fixed by demand, default and notice, in regard to the interest payable from the maker yearly, as well as in regard to the principal. It then seems to conclude, that, because the in- dorsee can lawfully demand and collect of the maker, whose promise to pay the principal is absolute, upon his dependent, but yet absolute promise to pay the interest annually, he can by proper demand, default and notice, collect such annual interest of the indorser whose promise and liability to pay the principal is conditional, and cannot as- yet be made absolute, and whose promise to pay the annual interest, it has already held is dependent upon his promise to pay the principal, and therefore, in my judgment, takes the condition attached to his liability to pay the principal. It is at this point that I fail to follow the reasoning of my associates. Here they assume — as I think — and proceed upon the basis, that, the indorser's implied promise to pay the annual interest, is not dependent, but independent, like what it would be, if it were an install- ment of the principal. The holdings in the opinion, that the indorser's liability for the accrued annual interest may be made absolute by a proper demand, default and notice in regard to the principal when it falls due, and that it may also be made absolute by a proper demand, default and notice yearly, re- sult m holding that the maker's promise to pay the interest annually which he indorses, is both dependent upon, and in- dependent of, his promise to pay the principal. I do not think that it has this double and inconsistent character, but only the former. If it be independent, must not demand and default be made, and notice given yearly, or the indorser be- come discharged.? And if demand and default be made, and notice given annually, must not the statute of limitation begin to run from date of such demand.? I think so. The result of giving this double character to the promise to pay interest an- nually will lead, I think, to some difficult legal problems. If the note is to mature at the end of twenty years, and the payee holds it and allows the interest to accumulate for ten years, and then having indorsed it, sells it, the indorsee must wait for the accumulated interest until the note falls due, be- cause the maker's promise and the indorser's liability in regard 292 HOTEL CO. V. BAILEY. [CHAP. 8, to that interest is dependent upon tiie indorser's liability for the maker's promise to pay the principal, which is still condi- tional, and for that reason the indorser's liability to pay the accumulated interest is conditional, and will remain so until it is made absolute for the principal; but when the eleventh year's annual interest falls due, the indorsee may at once, by due demand, default and notice, fix the indorser's liability to pay that year's interest, and may enforce its payment by suit, while the indorser's liability for the payment of the principal from which the year's interest springs, cannot for years be made absolute and may never be. After the indorser's liabil- ity for the payment of the year's interest has thus become fixed by suit, on what legal principles governing res judicata, could the indorser defend, in a suit brought, without further demand, default and notice, at the maturity of the note, for the enforcement of the payment of the principal and the ten years accumulated interest.'' The only decision relied upon for the holding of my asso- ciates is from 6 Blatchford. I do not regard that in point. The guarantee was written instead of implied. The relation of the indorser to the obligation was exceptional, it having been given by its receivers and managers. The interest was expressed in separate coupons, which, for some purposes, are treated as independent obligations. The statute of limitations runs on them generally from their maturity.' In this respect they are unlike the promise in the note to pay the interest annually, as held in Grafton Bank v. Doe, et. al.^ I do not think that the indorsee has the election to fix the indorser's liability for, and recover of him annually such yearly interest, or to wait and fix it by proper demand, default and notice in regard to the principal. I think his liability can only become absolute for the payment of the incident or outgrowth of the debt, when it becomes absolute tor the payment of the prin- cipal from which that incident or outgrowth springs. The opinion on this branch of the case is made to rest upon the ground that the indorser's undertaking, on due demand and notice, is to make good to the indorsee any failure of the 'Amy V. Dubuque, 98 U. S., 470 (25 L. C. P. Co., 228. ) ^19 Vt., 463. SEC. 46. j HOTEL CO. V. BAILEY. 293 maker to perform the contract, and, in that the maker has promised to pay the interest at the end of each year, the in- dorser has Hkewise so undertaken upon proper demand and notice. But his implied contract being conditional in regard to the payment of the principal I think is conditional also to any incident or outgrowth of the principal, so long as it is conditional in regard to the payment of the principal, and The Amount for which Indorsers are Liable. — (a). They are Liable for a Deficiency on Notes Secured by a Mortgage. — An indorser of a promissory note, secured by a mortgage given by the maker, is liable for any deficiency resulting after a sale of the mortgaged premises under a judgment of foreclosure against the mortgagor, providing the requirements of presentment, demand, and notice of dishonor were complied with. Allin v. Williams, 97 Cal., 403; 32 Pac. Rep., 441 {U). They are Liable for Attorney's Fees. — An indorser, by his contract of indorsement, promises, among other things, that he will discharge the note according to its tenor, upon due pre- sentment, demand, and notice of dishonor. Therefore an indorser of a bill or note which contains a stipulation for "reasonable attor- ney fees" "or collection fees" in case of suit, is as much liable for these amounts as he is for the principal of the bill or note. Benn v. Kutzschan, 24 Oregon, 28; 32 Pac. Rep., 763. (c). They are not Liable to. Each Other — There is no Con- tribution. — Each indorser guarantees the payment of the contract (unless otherwise stipulated in the indorsement) to every subse- quent holder of the instrument. Each subsequent holder may recover the full amount due upon the contract from any one of the prior indorsers. No prior indorser can insist or compel a subse- quent indorser to contribute to the payment of the contract, unless otherwise stipulated. There is no contribution between indorsers as a general rule in the absence of a special agreement. Young v. Ball, 9 Watts. (Pa.), 139 (1839); Core v. Wilson, 40 Ind., 206; Shaw v. Knox, 98 Mass., 214; Bishop v. Hayward, 4 Term., 470 (1791); Penny V. Innes, i C. M. & R.. 4395 Easterly v. Barber, 66 N. Y., 443; Barrey v. Ranson, 12 N. Y., 462; Phillips v. Pres- ton, 5 Howard, 278; Givens v. Merchants' Bank, 85 III, 443; Hale V. Danforth, 46 Wis., 555. If, however, a subsequent indorsee holds collateral security from the maker and a prior indorser is called upon to pay the con- tract, he (prior indorser) may compel an appropriation of the col- lateral security to the payment of the instrument. In such case a trust is created in favor of the prior indorsers as well as the holder, to have the fund applied in the payment of the note. Price v. Trusdell, 28 N. J. E. R., 200. The indorsement may be joint, in which case, of course, con- is 294 HOTEL CO. V. BAILEY. [CHAP. 8, that he only becomes absolutely bound to pay the interest at the end of each year, when he becomes bound absolutely to pay the principal. When so bound for the payment of the principal, then this obligation to pay the interest at the end of each year attaches, in respect both to the interest then accrued and the interest which may thereafter accrue. I would modify the opinion in the particular indicated. tribution may be enforced. Lane v. Stacey, 8 Allen (Mass.), 41. (d). They are Liable for the Full Amount due tlpon the Bill or Note. — It may be stated generally that an indorser is liable for the full amount of the contract, including interest, protest fees and all costs of collection, i Daniel on Neg. Inst., sees. 766-768; Merritt v. Benton, 10 Wend., 116; Simpson v. Griffin, 9 Johns., 131; National Bk., etc. v. Green, 33 la., 140; Durant v. Bunta, 3 Dutch (N. J.), 623, 635; 2 Parsons on N. & B., 428; March v. Barnet, 114, Cal., 375. (e). Where Indorsee has Paid Less than Amount of Bill or Note — For what Sum is the Indorser Liable? — There is much con- flict in the authorities upon the question of how much may an indorsee recover of an indorser when the former has paid less than the full amount for the bill or note, i Daniel on Neg. Inst., sees. 766-768; National Bank, etc. v. Green, 33 la., 140. If the trans- action was in good faith, we think the weight of authority permits the indorsee to recover the full amount of the contract. National Bk., etc. V. Green, supra; 2 Parsons, N. & B., 428; Bissell v. Dickerson, 64 Conn., 61; Cromwell v. County of Sac, 96 U. S., 51, 60; R. R. Co. V. Schutte, 103 U. S., 118. The Consideration of the Indorser's Contract.— It is a well recognized rule of law that every binding contract must be supported by a consideration, and the contract of indorsement is no exception to this rule. But in the case of commercial contracts the consideration is presumed; this presumption, however, as be- tween the original parties may be rebutted. Dan. on Negot. Inst, sees. 174, 679. What is a sufficient consideration to support contracts in gen- eral is sufficient to support contracts of indorsements. Swift v. Tyson, 16 Pet., i; Pond v. Waterloo, 50 Iowa, 695; Bradsley v. Delp, 88 Pa. St., 420; Collier v. Mahan, 21 Ind., no. The rule is well settled that in order to charge an indorser, presentment and demand for payment, of the maker (or the facts which excuse such presentment and demand), and notice of dis- honor, must be proven by the plaintiff. Ankeny v. Henry, i Idaho, 229; Ballingalls v. Gloster, 3 East., 481; Story on Bills, 224, 255; Wood's Byles, 255. SEC. 47. j SMITH V. CLARKE. 295 SECTION 47. THE NEGOTIABILITY OF A COMMERCIAL CONTRACT CAN- NOT BE RESTRAINED, AFTER AN INDORSEMENT IN BLANK BY THE PAYEE, BY AN INDORSEMENT IN FULL OR SPECIAL.* SMITH V. CLARKE.i In the Court of King's Bench, 1794. [Reported in i Espinasse, 181 ; Peake, 22^. ] The Form of Action.— Assumpsit against the defendant as acceptor of a bill of exchange. The bill was drawn in favor of Lisle & Co. and they had indorsed it to Surtees, Burden & Co. , who had indorsed it to one Jackson: the first indorsement was general (in blank), but 'This case is cited in Benjamin's Chalmers on Bills, Notes and Checks, 128; Story on Bills of Exchange, 207; Chitty on Bills, 228, 230; Wood's Byles on Bills and Notes, 251; Norton on Bills and Notes, 113, 117, 197; Daniel on Negotiable Instruments, 696. See also Walker v. McDonald, 2 Exch., 527; Johnson v. Mitchell, 50 Tex., 212. * Where a bill is by the payee indorsed in blank, a subsequent indorsee shall not by any special indorsement restrain its general negotiability, so far as to make it necessary to prove the hand- writing of such special indorsee, where the action is by a subse- quent bona fide holder. Where a bill or note is made payable to the "order" of the payee and indorsed in "blank" by him, it is then the same as if it had been made payable to "bearer" origin- ally. But even though the instrument is made payable to "bearer" a particular subsequent indorser may, by a special or restrictive indorsement, limit his liability, because each indorsement is a new contract and the parties to it are liable only according to its terms. Curtis V. Sprague, 51 Cal., 239; Humphreyville v. Culver, 73 III, 485; Bank of, etc. v. Sherer, 108, Cal., 513; Beal v. Glen. Elect. Co., 38 N. Y., 527. Indorsement— Kinds or Varieties of — Enumerated. — Contracts of indorsement have assumed numerous forms, and the primary liability of an indorser depends upon the form or kind of his indorsement. The indorsement maybe (i) in blank, (2) in full or special, (3) implied or conditional, (4) restrictive, (5) absolute, (6) without recourse, (7) for accommodation, (8) irregular or anomalous. Blank Indorsement — Defined. — Where the payee or holder of a commercial contract writes his name across the back of such 296 SMITH V. CLARKE. [CHAP. 8, the indorsement to Jackson by Surtees, Burden & Co. was a special one, viz., " Pay the contents to J. Jackson, or order.' Jackson was the receiver-general of one of the northern counties, and kept an account with Muir, Atkinson & Co. instrument without any additions or explanations it is called an indorsement in blank, and the contract thereafter is the same as one payable to bearer; it may be transferred by delivery, and its possession vi prima facie evidence of ownership. Palmer v. Nassau Bank, 78 111., 380; Morris v. Preston, 93 III, 215; Belden v. Hann, 61 Iowa, 41. It has been held that the holder can fill up the blank indorse- ment and make it an indorsement in full, making it payable to him- self, to his own or to another's order. He may change it into any contract not inconsistent with the character of indorsement in blank, but he may not enlarge the liability of the indorser in blank by writing over it a waiver of any of his rights. The indorsement in blank may be either before or after the complete execution and delivery of a commercial contract. Central Bank v. Davis, 19 Pick., 376; Hance v. Miller, 21 111., 636; Scott v. Calpin, 139 Mass., 529, where it was held that the indorsee might write over the blank indorsement " I guarantee payment of the within note." Contra. Belden v. Hann, supra. Indorsement in Full or Special — Defined. — An indorse- ment in full, which is sometimes called a special indorsement, is where the indorser directs that the contract shall be paid to some "particular person or his order." To illustrate: " Pay to B or order," (signed) A; "Pay to B," (signed) A. It has been held that there is no distinction between the indorsements "Pay to B or order," and " Pay to B "; and the phrase "or order" makes no change in the special indorsement. In case of a special in- dorsement of a commercial contract, to enable any subsequent party to recover thereon he must be able to make his title through the special indorsee. Therefore it must appear that the contract has been re-indorsed by the special indorsee, or that he (special indorsee ) has received satisfaction. The mere possession of a commercial contract which has been indorsed in full and which has not been indorsed by the special indorsee is not sufficient evi- dence of the holder's right of action thereon. The special in- dorsee in his transfer of the contract may use any of the regular forms of indorsement he desires; and if he uses a blank indorse- ment, the contract thereby becomes transferable by mere delivery. Mitchell V. Fuller, 15 Pa. St., 268; Johnson v. Mitchell, 50 Tex., 212; Reamer V. Bell, 79 Pa. St., 292; Morris v. Preston, 93 111., 215. In case there are several indorsements in blank, the holder may strike out any one or change them to some other form of in- dorsement, so long as he does not affect his own title or increase SEC. 47. J SMITH V. CLARKE. 297 This bill had been sent among others to Muir, Atkinson Co., desiring them to get it discounted anywhere, provided it did not come to the Bank of England; but there was no evidence of any indorsement by Jackson on it. the liability of indorsers. He may not, however, strike out a spe- cial indorsement and insert his own name, for the reason that he thereby destroys his own title. Johnson v. Mitchell, 50 Tex., 212, where Gould, J., said, "The rule is well settled that if a bill be once indorsed in blank, although afterwards indorsed in full, it will still, as against the drawer, the payee, the acceptor, the blank in- dorser, and all indorsers before him, be payable to bearer, though as against the special indorser himself, title must be made through his indorsee." The holder of a contract which has been indorsed in blank may change it to one in full and make the contract thereby pay- able to some particular person. Johnson v. Mitchell, 50 Tex., 212; Hance v. Miller, 21 111., 636. Conditional Indorsement — Defined. — An indorser may .impose some condition upon his liability in the contract of in- dorsement and he would not be liable thereon if such condition is broken or unfulfilled. And if the party who is primarily liable upon the principal contract pays the amount to such conditional indorsee before the performance of the condition, this fact will not preclude a recovery for the full amount by the conditional in- dorser in an action against him. The party who is primarily liable upon a commercial contract is bound to take notice of conditions imposed or annexed to indorsements thereon. Dan. on Negot. Inst., Sec. 697; Robertson V. Kensington, 4 Taunt, 30. These conditions may be either precedent or subsequent. To illustrate: An indorsement "Pay to A if he arrives at twenty-one years of age," or "if he is living when it becomes due," is an in- dorsement upon a condition precedent; and if the maker of such contract should pay to such indorsee before the happening of such condition, he might again be called upon to pay the contract to the conditional indorser. This is true whether the condition be precedent or subsequent. An example of an indorsement upon a condition subsequent would be, "Pay to A unless before payment I give you notice to the contrary." Robertson v. Kensington, supra; Story on Bills, Sec. 217; Chitty on Bills, ch. 6, p. 268. Restrictive Indorsement— Defined.— An indorser may not only impose conditions upon his liability as an indorser, but he may restrict the further negotiability of the instrument, in which case the indorsement is called restrictive. To illustrate: "Pay to A only " (signed) B; or "Pay to A for the use of B "; or "Pay to A for my use"; or "for collection"; or "for collection and immediate returns"; or "credit my account"; are examples of restrictive indorsements. An examination of the various re- 298 SMITH V. CLARKE. [CHAP. 8, Muir, Atkinson & Co. discounted it with the plaintiffs, who were their bankers. Muir & Atkinson became bankrupts, and soon after Jack- son also became a bankrupt; and this defense was in fact by strictive indorsements will show that they may be divided into two classes: (i) where they are indorsed for the use of the indorser, or to an agent; and ( 2 ) where they are indorsed for the use and benefit of some third person, or to a trustee. In the first of these cases, or in a restrictive indorsement to an agent, the indorser still retains the title to the contract; while in the second the title passes from the indorser to the trustee upon condition. In either case, however, the restrictive indorsee has no authority to indorse the contract to another — he is only authorized to collect the amount due upon said contract and apply it according to the terms of the indorsement. The terms, annexed to a restrictive indorsement, are notice to all subsequent holders of the nature thereof. Neither does the indorser incur any liability to the indorsee in a restrictive indorsement. Nat. Butchers' Bk. v. Hubbell, 117 N. Y., 384; Manf. Nat. Bk. v. Contanentile, 148 Mass., 553; First Nat. Bk. v. First Nat. Bk., 76 Ind., 561; Briggs v. Central Nat. Bk., 80 N. Y., 182; ^tna Ins. Co. v. Alton City Bk., 25 111., 243; Dan. on Negot. Inst., Sec. 698; Johnson v. Donnell, 90 N. Y., i; White V. Miner's Nat. Bk., 102 U. S., 658; Hook v. Pratt, 78 N. Y., 371; Leavitt v. Putman, 3 Coms., 499; People's Bank v. Jefferson Co., etc., Bk., 106 Ala., 624 (17 So. Rep., 728); Freeman's Nat. Bk. V. National Tube Works, 151 Mass., 413; 24 N. E. Rep., 779; 21 Ans. St. Rep., 461; Bank v. Weiss, 67 Texas, 331; Blakes- lee v. Hewitt, 76 Wis., 341; 44 N. W. Rep., 1105. An indorse- ment for "collection" is not a contract of indorsement, but the creation of a power, the indorsee being a mere agent or trustee to receive the money for the use of another. Freeman v. Exchange Bk., 87 Ga., 4S; i Daniel on Neg. Inst., Sec. 698. See Hook v. Pratt, 78 N. Y., 371, for a full discussion of the nature of a strictive indorsement; Edie v. East India Co., 2 Burr., 1221; Sig- ourney v. Lloyd, 8 B. & C, 622; Fennings v. Brown, 9 Mees & W., 496; Brook, Oliphant & Co. v. Vannest, 58 N. J. L., 162; Commercial Bk. v. Armstrong, 148 U. S., 50; Butcher's, etc. Bk. v. Hubbell, 117 N. Y., 384; Power v. Finnic, 4 Call (Va.), 411. An Absolute Indorsement — Defined. — An absolute or unconditional indorsement is one by which the indorser makes himself liable, binds himself to pay the contract in case the maker or the party who is primarily liable thereon does not, subject to the condition, however, of presentment, demand, protest (when necessary) and notice. Indorsement Without Recourse — Defined. — There is still another method by which an indorser may limit his liability in the contract of indorsement. It is by an indorsement "sans SEC. 47. J SMITH V. CLARKE. 299 his assignees, on the ground that the indorsement to Jackson being special, that it restrained the farther negotiability of the bill and defeated the plaintiff's right to recover, unless Jackson's indorsement was proved. recours," or "without recourse," or by adding the words "at the owner's own risk," or by using any term or phrase which indicates that he does not intend to incur liability as an indorser. Such an indorsement has the effect of transferring the title of the instru- ment to the indorsee without rendering the indorsee personally responsible on the contract. An indorser without recourse assumes the same liability that a transferer does without indorsement, of a commercial contract payable to bearer, being released from all liabity for the dishonor of the bill based upon the incapacity or refusal of the maker to pay. He is not, however, released from all liability. He impliably warrants: 1. That the original parties had capacity to execute and deliver such a contract; 2. That they did execute and deliver the particular con- tract; 3. That there is no illegality or defense existing between the original parties which can be interposed to defeat the payment of a contract; 4. That he has a good title to the instrument. In short, an indorser without recourse warrants that the con- tract is a valid, subsisting contract; but does not warrant that the original makers will pay, or that they are solvent. Dumont v. Williamson, 18 Ohio St., 515; Chitty on Bills, 247; Watson v. Chesire, 18 Iowa, 202; Bourdon v. Collar, 26 Mich., 410; Rieman V. Fisher, 4 Am. Law Reg., 433; Allen v. Pegran, 16 Iowa, 163; Challiss V. McCrum, 22 Kan., 157; Drenian v. Bung, 124 111., 175. Accommodation Indorsement.— Defined. — An accommo- dation maker or indorser of a commercial contract is one who has signed or executed and delivered a commercial contract without consideration and for the purpose of giving his name to some other person as a means of credit. As to third persons, the liability of an accommodation party to a commercial contract, whether maker, drawer, acceptor or indorser, is the same as that of corresponding parties receiving valuable consideration; but between the accom- modation party and the accommodated party there is no such lia- bility, and one who draws, makes, accepts or indorses a commer- cial contract for the accommodation of another is not liable to him in any capacity. Miller v. Larned, 103 111., 562. As to third parties who take the contract before maturity, an accommodation party is liable according to the terms of his con- tract, whether it be that of maker, drawer, acceptor or indorser; and it makes no difference whether the holder or third person took 300 SMITH V. CLARKE. [CHAP. 8, The Claim of the Plaintiff.— For the plaintiff it was contended, that the first indorsement being general, that the bill thereby acquired a general negotiabihty; nor could it by any subsequent indorsement be restrained; and that how the note with knowledge that the parties were accommodating par- ties, or not, providing that they are otherwise bona fide holders. I Parsons on Notes and Bills, 183, 226; Nat. Bk. v. Grant, 71 Me., 374; Winters v. Home Ins. Co., 30 Iowa, 172; Miller v. Lar- ned, supra; Seyfert v. Edison, 45 N. J. L., 393; Norfolk Nat. Bk. V. Griffin, 107 N. C, 173. It has been held also that an accommodation party is liable according to the terms of his contract to a holder or indorsee, in good faith, as collateral security for an antecedent debt or in pay- ment of a pre-existing or concurrent debt of such holder or indor- see. Miller v. Larned, supra; Pitts v. Fogelsing, 37 Ohio St., 676; Altoona Bk. v. Dunn, 151 Pa. St., 228. There may be successive accommodation indorsers upon the same contract, and in which case they will be liable to each other according to the priority of their indorsement. Accommodation indorsers are not co-sureties in the absence of an agreement to that effect, therefore, contribution does not lie between them. A subse- quent accommodation indorser who pays the note may recover the full amount of a prior indorser and not merely a contribution as in case of co-sureties. Moody v. Findley, 43 Ala., 167; DePauw v. Bank, 126 Ind., 553; Esterly v. Barber, 66 N. Y., 433; Shaw v. Knox, 98 Mass., 214; McGurk v. Huggett, 56 Mich., 187; Kelly v. Burroughs, 102 N. Y., 93. Some of the courts have held, however, in the case of accom- modation indorsers, that they are considered as co-sureties where there is no special agreement to the contrary, and that subsequent indorsers cannot recover more than a contributive share against a previous indorser. Douglas v. Waddle, i Ohio, 413; 13 Am. D., 630; Barnett v. Young, 29 Ohio St., 11; Pitkin v. Flanagan, 23 Vt., 160. It has been held that an accommodation party to a commer- cial contract is not liable thereon if it has been fraudulently di- verted from the purpose for which it was intended to a person who has knowledge of such diversion, even if he pays value for it and acquires it before maturity. Grocer's Bk. v. Penfield, 69 N. Y., 502; 25 Am. R., 231; Daggett v. Whiting, 35 Conn., 366; Fetters V. Muncie Nat. Bk., 34 Ind., 251; 7 Am. R., 225. Diversion cannot be shown, however, ^gKWi.'s.X'a.bona fide holder for value without notice. Clark v. Thayer, T05 Mass., 2t6; Frank V. Quast, 86 Conn., 649; Jackson v. First Nat. Bk., 42 N. J. L., 177; Meeker V. Shanks, 112 Ind., 207. The rule that equities may be interposed against the purchaser after maturity applies to an accommodation contract; and some of SEC. 47.] SMITH V. CLARKE. 301 many names soever appeared on the back of the bill, or how- ever many special indorsements such as the present, that the bona fide holder might strike out the names of all the inter- the courts have held that the paper as an accommodation paper of itself constitutes an equity under such circumstances. This, how- ever, is contrary to the weight of authority. An accommodation indorser is liable under the same conditions and to the same extent as a regular indorser. Agents, Corporations and Partners Cannot Execute and Deliver Accommodation Commercial Contracts Without Express Authority. — There is some question whether an agent, a corporation, or a partner may execute and deliver an accommo- dation commercial contract without express authority. It has been held that a general power given to an agent to make or in- dorse commercial contracts will not warrant the agent in execu- ting and delivering or indorsing contracts for accommodation. German Nat. Bk., v. Studley, i Mo. App., 260; Gulick v. Grover, 33 N. J. L., 463; 97 Am. D., 728. A corporation has only such powers, as a general rule, as are expressly given it or necessarily implied from the nature and char- acter of its business. It has been held that the indorsement of commercial contracts for accommodation by a corporation is not a necessary incident to the business of a corporation. If, there- fore, a corporation is not expressly authorized to execute and de- liver a commercial contract for accommodation and it does so, the corporation is not liable thereon. Nat. Bk. v. Wells, 79 N. Y., 498; Smead v. Indianapolis, etc., 11 Ind., 105. As a general rule one partner cannot without express or im- plied authority bind the firm in the execution and delivery of an accommodation contract. Sweetzer v. French, 2 Gushing, 309; 48 Am. D., 666; Bank of Ft. Madison v. Alden, 129 U. S., 372; Heffron v. Hanford, 40 Mich., 305. And in case a partner does execute and deliver an accommo- dation commercial contract, the burden is on the holder to show that such partner was expressly authorized to bind the firm. Sweet- zer V. French, supra; Nat. Security Bk. v. McDonald, 127 Mass., 82; see a general discussion of the rights and liabilities of accom- modation parties, 31 Am. St. R., 742, 757. General Effect of an Indorsement.— The indorser by placing his name upon the instrument enters into a contract with the indorsee, which is a complete contract independent of the con- tract of any other party to the paper, and requires all the essen- tial elements of a contract. He thereby engages that the com- mercial contract upon which his endorsement is placed will be paid when due according to the tenor therof, upon due present- ment and demand by the parties to that contract; and if not, then by himself on receiving due notice of their failure. The contract 302 SMITH V. CLARKE. [CHAP. 8, mediate indorsers, and prove only the first indorsement in order to entitle him to recover. The Claim of the Defendant. — The counsel for the defense insisted, that its negotiability could at any time be restrained; and cited Ancher v. Bank of England' as deciding the point; but they further pressed, as a general question, the propriety of admitting special indorsements, for the purpose of greater security in the remitting of bills of exchange by of an indorser of a commercial contract is the same as that of a drawer of a bill of exchange or other commercial contract. The purpose of an indorsement is usually two-fold: (i) to transfer the title to the instrument; (2) or to strengthen the security. The liability of a indorser, outside of the warranties which he makes, must always depend upon the kind of indorsement. The first indorser is responsible to every holder and subsequent indorser who has been compelled to pay the amount of the note, upon due presentment, demand and notice. McKnight v. Wheeler, 6 Hill, 492; Maine Trust Co. v. Butler, 45, Minn., 506; Ankeny v. Henry, I Idaho, 229; Rhodes v. Jenkins, 184, Col., 449; Aymarv. Shel- don, 12 Wend., 438. If the commercial contract is overdue, the indorsement is equivalent to drawing a new contract payable at sight, upon which the indorser is liable upon proof of a demand upon the maker within a reasonable time, and immediate notice of the default. Colt. v. Barnard, 18 Pick., 260; 29 Am. D., 584; Leavitt v. Put- man, 3 N. Y., 494; 53 Am. D., 322. Some of the courts have held that an indorsement upon an over-due commercial contract is an original and unconditional en- gagement to pay the same, without presentment, demand and notice. Brown v. Davies, 3 T. R., 80; Jordan v. Hurst, 12 Pa. St., 269. The mere indorsement of the name of the payee or holder on a negotiable contract is ineffectual to pass the title thereto without delivery. The term "indorsement" implies a delivery. If the contract is payable to "bearer," it may be transferred by delivery without indorsement. This is true also when it is payable to " or- der, " after being indorsed in blank. Spencer v. Carstarthen, 15 Col., 445; 24 Pac. R., 882; Loyd v, Howard, 152 B., 995; Mars- ton V. Allen, 8 Mees & W., 454; Ross v. Smith, 19 Tex., 171; Smalley v. Wight, 44 Me., 442. The promise of the indorser is conditional and his liability depends upon due presentment, demand, protest (when necessary) and notice. Mt. Mansfield Hotel Co. v. Bailey, 64 Vt., 151; 24 24 Atl. R., 136. ' Doug., 615. SEC. 47.] SMITH V. CLARKE. 303 post; to which the restriction contended for would greatly contribute. The counsel for the plaintiff admitted that the payee might restrain the negotiability of a bill by a special indorse- ment; but contended that it was confined to him, and did not ■extend to any subsequent indorser; and that uhe case cited of Ancher v. Bank of England established that point as to the payee only. Decision.— Ld. Kenyon ruled with the plaintiffs. He said that the doctrine contended for by the defendant's coun- sel was not supported by any case; that it would clog the cir- culation of bills of exchange if by indorsements of this sort, where there might be several, the holder was obliged to prove the handwriting of the several indorsers; that a bill being payable generally to a payee or his order, when he to whose order only it was payable, by a blank indorsement, sent it into the world, that he meant it should have a general circula- tion. That any person to whose hands it came bona fide, by proving the handwriting of the payee, entitled him to sue,' that as this gave him a legal title, he might strike out the names of all the intermediate indorsers, whether the indorse- ments to them were special or not." The plaintiff had a verdict. 'Vide Moor v. Manning, Com., 311; Acheson v. Fountain, I Stra., 557; Morris v. Foreman, i Dal., 193. ^Chaters v. Bell at al., post, vol. 4, p. 210. After a special indorsement by the payee, a subsequent indorser may again make the bill negotiable from him. Holmes v. Hooper, Bay, 158. Had this action been brought by any indorsee subsequent to the special indorsee against this special indorser, then it would have been necessary for him to prove the handwriting of the spe- cial indorsee. But as to any party prior to the special indorser, the maker, drawer, acceptor, payee and all prior indorsers, it is sufficient for him to prove the indorsement of the person to whose "order" the contract was made payable. 304 MITCHELL V. FULLER. [CHAP. 8, SECTION 48. A SPECIAL INDORSER IS LIABLE ONLY TO SUBSEQUENT INDORSEES WHO MAKE THEIR TITLE THROUGH HIS SPECIAL INDORSEE. SUBSEQUENT INDORSEES MAY STRIKE OUT THE SPECIAL INDORSEMENT AND RE- COVER AGAINST PRIOR INDORSERS.* MITCHELL u. FULLER.i In the Supreme Court of Pa., Dec, 1850. [Reported in 15 Pa. St., 268.] The Form of Action. — This was a suit brought by Mar- tha Ann Fuller, executrix, etc., of Horace Fuller, deceased, against Matthew Pope Mitchell and Benjamin N. Wynkoop, upon the following drafts: — " S79P-OI. ''New York, April jotA, 184.6. " Sixty days after date, pay to the order of ourselves, seven hundred and ninety-nine dollars and one cent, value re- ceived, which place to account of Sands, Fuller & Co.'' ' ' To Messrs. Mitchell &■ Wynkoop. ' ' (Accepted by) Mitchell & Wynkoop. " ' ' (Indorsed) Sands, Fuller & Co. " * According to the elementary authorities, a bill or note pay- able to order and indorsed in blank, so long as the indorsement continues blank, "is in effect payable to bearer." Chit. Bills (nth ed.), 227; 3 Kent, Comm. (9th Ec), side p. 89; Story, Bills. § 60; 2 Pars. Notes and Bills, p. 19, note w; Edw. Bills and Notes, 131, 269; I Daniel Neg. Inst., § 693; Greneaux v. Wheeler, 6Tex., 522; Weathered v. Smith, 9 Tex., 625; Whithed v. McAdams, 18 Tex., 553; Ross V. Smith, 19 Tex., 172. Ld. Mansfield said, in Peacock v. Rhodes: "I see no differ- ence between a note indorsed in blank and one payable to bearer;" and Chancellor Kent said in Conroy v. Warren: "A note indor- sed in blank and one payable to bearer are of the same nature. They both go by delivery, and possession passes property in both cases." 2 Doug., 636; 3 Johns Cas., 263. So " a note payable to the maker's order becomes, in legal effect, when indorsed in blank, ' This case is cited in Norton on Bills and Notes, 113, 117; Illustrative Cases on Bills and Notes, 130. See also Burnap v. Cook, 32 111., 168 contra. Johnson v. Mitchell, 50 Tex., 212; Smith v. Clarke, 1 Esp., 180. SEC. 48.] MITCHELL V. FULLER. 305 " $744-77 ■ ''New York, April 30th, 184.6. ' ' Ninety days after date, pay to the order of ourselves, seven hundred and forty-four dollars and seventy-seven cents, value received, which place to account of Sands, Fuller & Co.'' ' ' To Messrs. Mitchell & Wynkoop. ' ' (Accepted by) Mitchell &■ Wynkoop. " ' ' (Indorsed) Sands, Fuller &■ Co. " To which the following affidavit of defence was filed: — That the bills upon which said suit is brought, are both specially indorsed to J. B. Trevor, Esq., cashier, or order. And that the writing filed in the above case, as a copy of the said bills, is not a true copy thereof, as will appear on the production of the said bills, and as defendant is informed and believes, and expects to prove. The original drafts were as the copies set forth in the paper-book of plaintiff in error, but with the following addi- tional indorsement: " Pay to J. B. Trevor, Esq., cash, or order, (in red ink) Hammond & Co." a note payable to bearer." Byles Bills, p. 68, c. 7; Brown v. De- Winton, 6 Man. G. & S., 336. The rule is well settled that "if a bill be once indorsed in blank, though afterwards indorsed in full, it was still, against the drawer, the payee, the acceptor, the blank indorser, and all in- dorsers before him, be payable to bearer, though as against the special indorser himself title must be made through his indorsee." Byles Bills (sth ed. ), 109, cited by Pollock in 2 Exch. infra.; Chit. Bills, 228, 230a; 3 Kent, Coram., side p. go; Story, Prom. Notes, § 139; 2 Pars. Notes and Bills, 19, 26; Walker v. McDon- ald, 2 Exch., S31, citing Smith v. Clarke, i Peake, 295, and i Esp., 180; Mitchell v. Fuller, 15 Pa. St., 270; Huie v. Bailey, 16 La., 213; Little v. O'Brien, 9 Mass., 423; Dugan v. U. S., 3 Wheat., 172; Edw. Bills and Notes, 275, citing Dollfus v. Frosch, I Denio, 367; Savannah Nat. Bank v. JHaskins, loi Mass., 370. It may be objected that the safe transmission, by mail, or otherwise, of notes and bills payable to bearer requires a different rule. The answer is — First, that such a consideration will not jus- tify a departure by the courts from established principles and pre- cedents; second, that what is known as a "restrictive "indorsement stops the currency of negotiable paper. Chit. Bills, 232; Story Prom. Notes, § 142 et. seq. ; 2 Pars. Notes and Bills, 21; i Dan- iel Neg. Inst, § 698. 306 MITCHELL V. FULLER. [CHAP. 8, The name of Hammond & Co. was erased before the notes were placed in the hands of counsel. The case was then one of an indorsement in blank by the payees, and a special indorsement by a subsequent holder to J, B. Trevor, Esq., cashier, or order. There was no indorsement by Trevor. "November 24, 1849, on motion, and upon inspection of the originals of the copies filed, judgment is granted by the court for plaintiff, for want of a sufficient affidavit of defence." The Claim of Defendant. — The defendant made the fol- lowing claims: 1. The court entered judgment for the plaintiff below, notwithstanding an affidavit of defence had been filed. 2. The court entered judgment against the defendants, although the affidavit of defence filed set forth a full defence. The Claim of Plaintiff.— The plaintiff claimed that the affidavit of defence alleges that the bills are specially indorsed to J. B. Trevor, Esq., cashier, or order, and, in case of spe- cial indorsement, to enable any one but the special indorsee to recover on the bill, it must appear either that it is re- indorsed by the special indorsee, or that he has received satis- faction.' That there would be no use in a special indorse- ment if any holder could maintain the action without showing title in himself.^ Such an indorsement cannot be stricken out by the plaintiff.^ The only exception to the rule is where the plaintiff is the drawer or a prior indorser. Where such an one comes again into possession of the bill, such possession is prima facie evidence of ownership.* Decision. — In the case of a special indorsement of a bill of exchange or promissory note to enable any one but the special indorsee to recover on the bill, it must appear either that it is reindorsed or re-assigned by the special indorsee, or that he has received satisfaction. The mere possession of the note or bill of exchange by the indorser who had indorsed it '2 Dal., 144; I Yeates, 94; 12 Ser. & R., 43. ' 7 Cranch, 159. 'i Peter's C. C. Rep., 171. *3 Wheat., 183. SEC. 48.] MITCHELL V. FULLER. 307 to another, is not sufficient evidence of his right of action against his indorser, without a re-assignment or receipt from the last indorsee.' But this rule obtains only when the note is specially indorsed by the payee, or made payable specially by the maker, for when the note or bill is indorsed in blank, the rule is otherwise. A blank indorsement makes the bill transferable by mere delivery. When the first indorsement is in blank, the bill or note as against the payee, drawer, or ac- ceptor, is afterwards assignable by mere delivery, notwith- standing it may have subsequent indorsements in full; because a subsequent holder by delivery may declare and recover, as the indorsee of the payee, and strike out all the subsequent indorsements, whether special or not.^ In Smith v. Clarke,^ a bill was indorsed in blank by the payee, and after some other indorsements, indorsed to Jack- son or order; Jackson never indorsed the bill, but a recovery was had by a subsequent holder who had stricken out all the indorsements but the first. Ld. Kenyon gives the reason for the decision. He said the doctrine contended for by the de- fendant's counsel was not supported by any case, and that it would clog the circulation of bills of exchange, if, by indorse- ment of this sort, where there might be several, the holder was obliged to prove the hand-writing of the several indorsers; that a bill being payable generally to a payee or his order, when he, to whose order only it was payable, by a blank in- dorsement, sent it into the world, that he meant it should have a general circulation, and any person into whose hands it came, bona fide, by proving the hand- writing of the payee, entitled himself to sue; that as this gave him a title, he might strike out the names of all the intermediate indorsers, whether the indorsements to them were special or not. Thus the distinction is clearly taken; this case falls with- in the latter class. Since Smith v. Clarke, the law has been 'This is ruled in Gorgerat v. McCarty, 2 Dal., 144; i Yeates, 94; Zeigler v. Geary, 12 Ser. & R., 43; 7 Cranch, 159; and in Craig V. Brown, i Peter's C. C. Rep., 174; Reamer v. Bell, 79 Pa. St., 292; Lawrence v. Fussell, 77 Pa. St., 460. '■'Chitty on Bills, 175-6, 5th edition. *i Esp. Rep., 180; S. C. Peake's Rep., 225. 3o8 MITCHELL V. FULLER. [CHAP. 8, considered settled, and it would be dangerous now to disturb it. I know of no case where it has been even questioned. The latter class seems to be the rule, the former for special reasons, is the exception. It has always been the policy of the courts, accommodating themselves to the wishes of the mercantile world, to promote the free, unconstrained circula- tion of commercial paper; and hence it is they have adopted the rule that the holder may maintain suit in his own name, by striking out the special indorsements. The presumption, and it is a fair one, is that he is a boita fide holder for value, or a trustee or agent for collection. The rule, however, is re- laxed in favor of the maker of a note, who may make it pay- able in full, by inserting the name in whose favor it is made, as drawee of a bill of exchange or payee of a note, who may indorse it specially for purposes of transmission and for safety, and so far to clog its circulation. Beyond this, the courts have wisely decided, they are not at liberty to go. When the note is once indorsed in blank, subsequent holders cannot control its circulation. These principles are fully sustained by the authorities. After an indorsement in blank by the payee or subsequent indorser, it is competent for the holder of the bill or note to make himself the immediate indorsee, and to claim by the blank indorsement.' And where a person fairly and without fraud becomes possessed of a negotiable note, indorsed in blank, it has been held that he may maintain an action thereon, although it has not been legally transferred to him.^ An Indorsement in Blank may be Changed to a Spe- cial Indorsement. — So, where a promissory note, payable to order, is indorsed in blank, the holder has a right to fill it up with any name he pleases, and the person whose name is in- serted will be deemed the legal owner; and if in fact the in- dorsement in blank was intended as a transfer for the benefit of another person, yet he would be considered as a trustee, 'Taylor v. Binney, 7 Mass., 481; Mullen v. French, 9 Watts, 96. H^ittle V. O'Brien, 9 Mass., 423; Bowman v. Wood, 15 Mass., 534- SEC. 48.] MITCHELL V. FULLER. 309 suing for the benefit of the person having the legal interest.' This view of the case, so fully sustained by authority, is an answer to the other exception. The holder having stricken out the indorsements, the record contains a true copy of the note on which suit is brought. Judgment affirmed. 'Lovell V. Evertson, ii Johns. R., 52; 11 Ser. & R., 179, Sterling v. Marietta Co.; Curtis v. Sprague, 51 Cal., 239; Middle- ton v. Griffith, 57 N. J. L., 442; Barney v. Steiner Bros., 108 Ala., III. CHAPTER IX. \A^arranties or Admission of Indorsers.* SECTION 49. AN INDORSER WARRANTS OR ADMITS THAT THE BILL OR NOTE IS JUST SUCH A CONTRACT AS IT APPEARS TO BE; THAT IT IS IN EVERY WAY A VALID, SUBSIST- ING, GENUINE CONTRACT. EX. PARTE CLARKE. 1 In the High Court of Chancery, March, 1791. \_Reported in 3 Brown's Chancery Cases, 2j8.'\ The Form of Action. — Petition to be admitted a cred- itor, in respect to certain bills indorsed by the bankrupt to the petitioner. The bills were made to fictitious payees. But 'This case is cited in Chalmers' Bills, Notes and Checks, 222; Chitty on Bills and Notes, 158, 705. See also Heylyn v. Adam- son, 2 Burr., 669; McGregor v. Rhodes, 25 L. J. Q. B., 318; Sel- ser V. Brock, 3 Ohio St., 302; Canal Bank v. Bank, i Hill., 287; Turner V. Keller; 66 N. Y., 66; Watson v. Chesire, 18 la., 202. * Warranties or Admissions of Indorser. — Every in- dorser of whatever kind, as well as every transferer without indorsement (where the title can be transferred without indorse- ment), makes certain warranties or admissions, which he is estopped from denying. A regular indorser in full or in blank warrants: 1. That the contract is in every way genuine; 2. That the prior parties thereto are competent; 3. That he has a lawful title to the instrument; 4. That he has a right to transfer the title to the same; 5. That the contract is in every way just such a contract as it purports to be and that the parties are liable thereon according to the terms of their apparent contract; and 6. That the parties who are primarily liable thereon are able to pay and will pay at maturity upon presentment and demand. SEC. 49.] EX. PARTE CLARKE. 3II it was said, that that circumstance was of no consequence against the indorser. Decision. — It is clear that, as against the indorser, it does not signify what the bill is. The indorsee may come The foregoing warranties or admissions are made by every indorser without recourse, as well as by those who transfer com- mercial contracts without indorsement, except the last (6th). Therefore, if, in the case of an indorsement without recourse, or transfer by delivery simply, it should turn out that the original contract was a forgery, or that the original parties thereto were not liable by reason of incapacity for any reason, or that they had been discharged lawfully, or that the contract was invalid by reason of the statute or the common law or public policy, such indorser or transferer would be liable thereon by reason of a breach of his warranty or admission. Story on bills, no, 235; Rhodes v. Jenkins, 18 Col., 49; Willis v. French, 84 Me., 593; 30 Am. St. R., 416; Frank v. Lanier, 91 N. Y., 112; Harris v. Brad- ley, 7 Yerg (Tenn.), 310; Erwin v. Downs, 15 N. Y., 575; Bow- man V. Hiller, 130 Mass., 153; Fish v. First Nat. Bk., 42 Mich., 203; Merriden Bk. v. Gallaudet, 120 N. Y., 298; Selser v. Brock, 3 Ohio St., 302; Dumont v. Williamson, 18 Ohio St., 515; 98 Am. D., 186; TurnbuU v. Bowyer, 40 N. Y., 456; Cover v. Meyers, 75 Md., 406; Redington v. Woods, 45 Cal., 406; Aldrich v. Jack- son, 5 R. I., 218. In the transfer of commercial contracts on account of their general purpose the maxim of caveat emptor does not apply. Du- mont V. Williamson, supra. An indorser admits all prior indorsements to have been duly made. It is said the indorser warrants the title and genuineness, of the paper he transfers, and that when sued he cannot deny the existence, legality, or validity of the contract which his indorse- ment put in circulation, for the purpose of defeating his own liability. Edwards on Bills and Notes, 289, 291; Fish v. First Nat. Bank, 42 Mich., 203. This is strictly right. Parties dealing in such paper are not expected to be familiar with the signatures of the several indorsers. If satisfied that the last indorsement is genuine, they are not re- quired to look beyond in the absence of such facts as would im- pute to them bad faith in case they did not. A person has no right to indorse paper, thereby making it negotiable, and offer it or permit it to be offered in the usual course of business, unless satisfied that the signatures previously appearing thereon are genu- ine. Mills V. Barney, 22 Cal., 240; Merriden v. Gallaudet, 120 N. Y., 298; 4 Ohio St., 628. The holder of a bill or note has nothing to do with the pre- ceding indorsements, and whether genuine or not his immediate indorser is liable to him. The last indorsement is, in fact, a. 312 EX. PARTE CLARKE. [CHAP. 9, against the indorser, though the bill is a mere nullity in other respects. It is the indorser's business to see what he can guaranty of the preceding indorsements, and admits the hand- writing of drawer and prior indorser, although the bill be forged. Chitty on Bills, 197-8; 3 Kent Com., 60; 2 Salk., 127. Forged Indorsement — Effect of. — If an indorsement is forged by one lawfully in possession of a commercial contract which cannot be transferred without indorsement, and he transfers it, so indorsed, to an innocent purchaser for value, the latter does not acquire any title thereto. Roach v. Woodall, 91 Tenn., 206; Foltier v. Schroeder, 19 La. Ann., 17; Roberts v. Tucker, 16 Q. B., 560. The holder of a commercial contract payable to bearer or indorsed in blank may recover upon the same, providing he took it innocently, in the due course of trade, for a valuable considera- tion and before maturity, even though the transferer had stolen or found the same. If, however, it becomes necessary for the finder or the thief, in order to transfer the contract, to forge the indorse- ment of the original parties, then the indorsee takes no title what- ever against the original parties. Story on Promissory Notes, 381-383; Roach V. Woodall, supra; Miller v. Race. The original parties, however, to the contract maybe estopped in certain cases from setting up that the indorsement was a forgery. Benjamin's Chalmers B. & N., 92. Effect of Indorsement After Maturity. — Liability of the Indorser. — When a negotiable contract is indorsed after maturity, presentment and demand must be made within a reason- able time, and notice, in case acceptance or payment is refused, must be given to the indorser in order to charge him. The indorser cannot be held liable without presentment, demand and notice, unless these conditions are excused or waived. Indorsitig a com- mercial contract after maturity is equivalent to making a new con- tract payable on de7nand. Dan. on Negot. Inst., 611, Beer v. Clifton, 98 Cal., 323; Goodwin v. Davenport, 47 Me., 112; Graul V. Strutzel, 53 Iowa, 712; Bassenhorst v. Wilby, 45 Ohio St., 336. There is no precise time where a note payable on demand is deemed to be dishonored. As a general rule it is due within a reasonable time after its date, and what is a reasonable time is a question of fact. Goodwin v. Davenport, supra; Field v. Nicker- son, 13 Mass., 131; Leavitt v. Putman, 53 Am. D., 322. In Vermont the indorsee must prove demand and notice within sixty days of the indorsement to him in order to charge his in- dorser. Verder V. Verder, 63 Vt., 38. In Michigan, a commercial contract payable on demand is payable at once and without demand, so that the statute of limi- tations begins to run from its delivery. Palmer v. Palmer, 36 Mich., 487; In re. King's Estate, 94 Mich., 411, 425; Fenno v. SEC. 49. J EX. PARTE CLARKE. 313 make of the bill, but he, by his indorsement, is certainly liable to the indorsee.' Gay, 146 Mass., ii8; McMullen v. Rafferty, 89 N. Y., 456. The fact that a commercial contract has matured does not destroy its negotiability. Bassenhorst v. Wilby, 45 Ohio St., 333 j 13 N. E. R., 75; Leavitt v. Putman, 3 N. Y., 494. ' So it has since been determined, that in action against in- dorser, it is not necessary to prove any indorsement on the bill prior to that of the defendant. Critchlow v. Parry, 1 Campb., 182. It had long before been decided, that in an action against the indorser, the handwriting of the drawer need not be proved. Lambert v. Pack, i Salk., 127; Lambert v. Oakes, S. C, i Ld. Rayra., 443. The present was one of the numerous cases which arose in the bankruptcies of Livesay & Co. and Gibson & Co., a succinct ac- count of which will be found in the note to the case of Bennett v. Farnell, 2 Campb., 130, 180. CHAPTER X. Warrants or Admissions of an Indorser " Without Recourse." SECTION 50. AN INDORSER "WITHOUT RECOURSE" WARRANTS, OR ADMITS: (i) THAT HE IS A LAWFUL HOLDER OF THE CONTRACT; (2) THAT HE HAS A JUST AND LAWFUL TITLE TO THE SAME; (3) THAT THE CONTRACT IS IN EVERY WAY A VALID, SUBSISTING OBLIGATION; (4) THAT HE HAS A RIGHT TO TRANSFER IT. DUMONT -u. WILLIAMSON.! In the Supreme Court of Ohio, Dec, 1869. [Reported in 18 Ohio St., 515; 5 Am. Law Reg. {N. S. ), 330; g8 Am. Dec, i86.'\ The original action in this case was brought by the plaintiff in error, who states in his petition "that Henry Essman, on the 12th of May, i860, at Cincinnati, made his promissory note in writing of that date, and thereby promised to pay to the order of William Wolff five hundred dollars, for value received, in four months after the date thereof, and which said promissory note purports to be indorsed on the back thereof by Wm. Wolff, which said note afterward came to the ' This case is cited in Benjamin's Chalmers Bills, Notes and Checks, 129, 222; Tiedeman on Commercial Paper, 260; Daniel on Negotiable Instruments, 670; Norton on Bills and Notes, 119, 167; Wood's Byles on Bills and Notes, 256. See also Watson v. Chesire, 18 Iowa, 202; 87 Am. D., 382; Goupy v. Harden, 7 Taun- ton, 159, 163; 2 Marsh, 454; Gurney v. Wormsley, 28 Eng. L. & Eq., 256; 4 Ell. & Bl., 132; Gompertz v. Bartlett, 24 Eng. L. & Eq., 156; Baxter v. Duren, 29 Me., 434; Terry v. Bissel, 26 Conn., 23. Judge Redfield's review of the decision of the court below in this case, vol. 5, p. 356, April mumber 5 of American Law Register; Wheeler v. Miller, et al., 2 Handy, 149; Ellis and Morton v. O. L. Ins. & Tr. Co., 4 Ohio St., 628. SEC. 50.] DUMONT V. WILLIAMSON. 315 hands of the defendant, who afterward then and there indor- sed and deUvered the same to the plaintiff, but without re- course on him. The plaintiff avers that the defendant did thereby warrant that the indorsement on the back thereof was the signature of William Wolff, and was made by him, whereas in truth and in fact said signature on the back of said note was not made by said William Wolff, but was and is a forgery, and by reason thereof said note was wholly worthless, and of no value, the said Henry Essman, the maker thereof, being wholly insolvent." The petition proceeds to allege due demand and notice of non-payment at maturity, and asks judgment for the amount of the note, with interest. A copy of the note is attached to the petition, which, with the indorsement thereon, corresponds with the state- ments of the petition. To this petition the defendant demurred, and the case was thereupon reserved from special term for the opinion of the judges in general term upon the questions of law arising on the demurrer. By the judgment of the court in general term the demurrer was sustained, and the plaintiff not desir- ing to amend his petition, it was thereupon dismissed, and judgment rendered against plaintiff for costs. The plaintiff here asks a reversal of this judgment on the ground of error in the Superior Court in sustaining the demur- rer to his petition. There is no statement in the petition of the circumstan- ces under which the note in this case was transferred to the plaintiff, or the consideration paid therefor, but it is to be presumed that it was so transferred for a valuable consider- ation. If the fact be otherwise, this is a matter of defense, to be set up by answer. There is no averment of fraud, or that the defendant had knowledge at the time of the transfer, of any defect in the note, which he concealed. The question therefore arises, whether upon the sale and transfer of a promissory note by indorsement, " without recourse," the vendor impliedly war- rants that the signatures of the prior parties whose names ap- pear thereon are genuine. 2l6 DUMONT V. WILLIAMSON. [CHAP. lO, Whilst the words "without recourse," accompanying an indorsement, clearly indicate that the party making the trans- fer does not intend to assume the position of an unconditional indorser, or to incur any liability if the note is not paid at maturity, upon due demand, or even if all the parties to the paper should prove to be wholly insolvent, we think they can not be construed as importing more than this. At least they do not divest such indorser of his character as a vendor of the note, nor exempt him from the liabilities arising from a sale and transfer by delivery, where the note is capable of being thus transferred. In such case, then, is there no implied warranty on the part of the vendor that the note is not forged.? That it is in fact what it purports on its face to be.' On this question the language of the text-books, in this country at least, is nearly, if not quite, uniform. The Contract of a Transferrer, Simply, of a Commer- cial Contract. — Justice Story, in his Commentary on Promis- sory Notes,' speaking of the liabilities of a party who transfers a note by delivery only, says: "/« the first place he warrants by implication, unless otherwise agreed, that he is a lawful holder, and has a just and valid title to the instrument, and a right to transfer it by delivery ; for this is implied as an obligation of good faith. In the next place, he warrants, in like manner, that the instrument is genuine, and not forged or fictitious." To this the editor of the fourth edition of the work, published in 1856, adds in brackets: ["that it is of the kind and description it purports on its face to be; unless where the note is sold, as other goods and effects, by delivery merely, without indorsement, in which case it has been de- cided that the law respecting the sale of goods is applicable, and that there is no implied warranty ;"] referring in the notes to the cases of Baxter v. Duren,^ Ellis v. Wild,' and other authorities, also to conflicting decisions. This new matter was added to the text after Justice Story's death, as is shown by the brackets, and was evidently intended only as a state- ment of the authorities bearing on the question. The excep- '§ 118. ''29 Maine R., 434. '6 Mass. R., 321. SEC. 50. J DUMONT V. WILLIAMSON. 317 tion stated to the general rule as laid down by Judge Story can not, therefore, claim the sanction of his name. The law is similarly stated in Parson on Notes and Bills,' where it is said to be " well settled that the vendor without indorsement [the transferrer] warrants that the paper is of the kind and description that it purports to be. " In a note on page 38, the case of Baxter v. Duren, supra, is referred to, where it was held that one who sells and transfers a prom- issory note by delivery is not liable on an implied warranty of its genuineness, if he sold the same as property, and not in payment of a debt previously existing or then created, and if he did not know of the forgery. But it was said in that case that if the note was transferred by delivery merely, in pay- ment of a debt due, or for goods then purchased, or by way of discount for money then loaned, there would in such case be an implied warranty of the genuineness of the paper. " But," adds the learned author, ' ' this distinction does not seem to be well founded." And again, at page 589 of the same vol- ume, the principle is broadly stated " that any transferrer of a note or bill transferable by delivery, warrants that it is no forgery. If it turns out that the name of one of the parties is forged, and the bill becomes valueless, the vendor, though no party to the bill, becomes liable to the vendee as upon a fail- ure of consideration." He then proceeds to state, without further comment, the distinction which was taken in the case of Baxter v. Duren, supra, and of which has previously disap- proved. So, in Edwards on Bills and Promissory Notes, page 291, it is said: "The party assuming to transfer a negotiable instrument thereby asserts it to be genuine, and is bound ta make his assertion good." And on page 289: " Though the indorser transfers the note upon condition that it is to be col- lected at the risk of the indorsee, he is nevertheless responsi- ble if the note proves to be a forgery.^ In England, it seems to be well settled, by the latest decisions on the subject, that the vendor of a bill of exchange 'Vol. 2, pages 37, 39. ^Shaver v. Ehle, 16 Johns. R., 201, and 20 N. Y. R., 226. 3l8 DUMONT V. WILLIAMSON. [CHAP. lO, is responsible for its genuineness. Thus, in Gompertz v. Bartlett, decided in 1853, it was held by the Court of Queen's Bench that the vendor of a bill of exchange impliedly war- rants that it is of the kind and description that it purports on the face of it to be.' And in Gurney and others v. Womers- ley/ decided in 1854 by the same court, it was held that the vendor of a bill of exchange, though no party to the bill, is responsible for its genuineness ; and if it turns out that the name of one of the parties is forged, and the bill becomes valueless, he is liable to the vendee, as upon a failure of con- sideration. Both these cases were decided on the same prin- ciple which is applied in sales of personal property generally, that the vendor impliedly warrants that the article sold is of the kind and description which it imports and is understood by the parties to be. In the case of Baxter v. Duren,^ supra, it was held that one who sells a promissory note, by delivery, upon which the names of indorsers have been forged, is not liable upon an implied promise to refund the money received therefor, if he sold the same as property, and not in payment of a precedent debt, and did not know of the forgery. The same doctrine was held in the case of Ellis v. Wild,^ where the same distinction was made between the sale of the note and its transfer in payment of a debt. But the doctrine is no longer maintained in that commonwealth.* In the last of these cases, Ellis v. Wild and Baxter v. Duren are both considered, and, for what seems to us good reasons, disap- proved; and it is held that there is no valid reason for the distinction taken in those cases. In Aldrich v. Jackson," the doctrine is expressly stated '24 Eng. Iv. and E. Rep., 156; 23 L. J. Ex., 65; see also Challis V. McCrum, 22 Kan., 157; Bell v. Dagg, 60 N. Y., 528; Bell V. Cafferty, 21 Ind., 411. ^24L. J., Q. B., 46. ''29 Me., 434. * 6 Mass., 321. '^ Cabot Bank v. Morton, 4 Gray, 156; Lobdell v. Baker, i Met., 193; Merriam v. Wolcott, 3 Allen, 258. "5 R. I., 218. SEC. SO. J DUMONT V. WILLIAMSON. 3I9 that "the vendor of a bill or note, by the very act of sale, impliedly warrants the genuineness of the signatures of the previous parties to it." The same doctrine is held in Terry v. Bissel,' and in Thrall v. Newell.^ And the principle upon which these decisions rest has its foundation, as we think, in reason and justice. ' 26 Conn., 23. ^ 19 Vt., 202. An unqualified indorsement is the assumption of a conditional liability. The indorser becomes a new drawer, and is liable on the •default of the drawee. "Without recourse," does away with this <:onditional liability. It leave the indorsement simply as a trans- fer of title, and the indorser liable only as vendor; yet it leaves him a vendor, and divests him of none of the liabilities of a ven- ■dor. It makes the transaction the equivalent of a delivery of paper payable to bearer, and transferable by delivery. (Hannum V. Richardson, 48 Vt., 508.) The Warranties of Tranferrer. — Independent of any matter of indorsement, what implied warranty is there in the transfer by delivery simply of a promissory note ? Two things are clear under the authorities: ist, that there is an implied war- ranty of the genuineness of the signatures; and 2nd, that there is no warranty of the solvency of the parties. It is unnecessary to more than refer to a few of the authorities upon these proposi- tions: Byles on Bills, pp. 123, 125, and cases in notes; Jones v. Ryde, S Taunt., 488; Gurney v. Womersley, 4 El. & BL, 132; ■Gompertz v. Bartlett, 24 Eng. Law & Eq., 156; Terry v. Bissell, 26 Conn., 23; Merriam v. Wolcott, 3 Allen, 259; Aldrich v. Jack- son, S R. I., 218; Lobdell v. Baker, 3 Mete, 469; i Addison on Cont, p. 152; Ellis V. Wild, 6 Mass., 321; Eagle Bank v. Smith, S Conn., 71; Shaver V. Ehle, 16 Johns., 201; Dumont v. William- son, 18 Ohio St., 515; 2 Parsons on Notes and Bills, ch. 2, § 2. A reference to some of the leading cases will throw light upon this question. In Thrall v. Newell, 19 Vt, 203, it appeared that one of the makers of a note was insane. The vendor made a written assign- ment, in which was a description of the note, and the court con- strued this as an express warranty that the instrument was the legal obligation of the apparent makers, and one of them being incap- able of contracting, gave judgment against the vendor on account of this breach for the amount received by him. While the judg- ment of the court is rested upon the fact of an express warranty, the judge who writes the opinion expresses his individual convic- tion that the same result would follow on a mere transfer without any express warranty, and quotes approvingly an extract from 320 DUMONT V. WILLIAMSON. [CHAP. lO, In the sale what purports to be a 'promissory note, it is not the material substance of the paper and ink for which the consideration is understood by the parties to be paid, but it is the chose in action of which the note purports to be the evi- dence, that is the real subject of negotiation and transfer. But if the note is forged, if no such chose in action exists, if the vendor neither owns nor parts with anything of the kind. Rand's edition of Long on Sales, that "there is an implied war- ranty in every sale that the thing sold is that for which it is sold." In Lobdell v. Baker, 3 Mete, 469, it appeared that the owner of a note procured the indorsement of a minor, and then put the paper in circulation. He was held liable to a subsequent holder. Ch. J. Shaw, delivering the opinion of the court, said: •'Whoever takes a negotiable security is understood to ascer- tain for himself the ability of the contracting parties, but he has a right to believe, without inquiring, that he has the legal obligation of the contracting parties appearing on the bill or note. Unex- plained, the purchaser of such a note has a right to believe, upon the faith of the security itself, that it is indorsed by one capable of binding himself by the contract which an indorsement by law imports." In Hannum v. Richardson, 48 Vt., 508, a note was given for liquor sold in violation of law, and was by statute void. Defend- ant knowing its invalidity, transferred it by an indorsement with- out recourse, and was held liable to his vendee. In Delaware Bank v. Jarvis, 20 N. Y., 226, a usurious note was sold, and the vendor was adjudged liable, not merely for the money received by him, but also the costs paid by his vendee in a suit against the makers of the note. In the opinion, Mr. Justice Comstock uses this language: "The authorities state the doctrine in general terms that the vendor of a chose in action, in the absence of express stipulation, impliedly warrants its legal soundness and validity. In peculiar circumstances and relations, the law may not impute to him an en- gagement of this sort. But if there are exceptions, they certainly do not exist where the invalidity of the debt or security sold arises out of the vendor's own dealing with or relation to it. In this case, the defendant held a promissory note which was void, because he had himself taken it in violation of the statutes of usury. When he sold the note to the plaintiffs and received the cash therefor, by that very act he affirmed in judgment of law that the instrument was unattained so far at least as he had been connected with its origin." In Young v. Cole, 3 Bingham (N. C), 724, certain bonds were sold as Guatemala bonds, which turned out afterward to be lack- ing the requisite seal, and the vendor, though ignorant of the de- SEC. 50. j DUMONT V. WILLIAMSON. 32 I it is difficult to see any just ground upon which he can be allowed to retain the purchase money. He has undertaken to sell what he did not own, and that which in fact has no exist- ence. The maxim of caveat emptor is inapplicable to such a case. The present case, however, is much stronger. It is not a case of sale by delivery merely, but by indorsement, quali- fied, it is true, so as to exclude the liabilities consequent feet and innocent of wrong, was compelled to refund the money. The thing in fact sold was not the thing supposed and intended to be sold. In Gompertz v. Bartlett, 24 Eng. Law and Eq., 156, the plain- tiff discounted for the defendant an unstamped bill, purporting on its face to have been a foreign bill, drawn at Sierra Leone and ac- cepted in London, but which was in fact drawn in London. If actually a foreign bill, it required no stamp, and was valid; but being an inland bill, it required a stamp to make it a valid bill in a court of law. The acceptance was genuine, and the acceptor had previously paid similar bills. But the acceptor becoming bank- rupt, the commissioner refused to allow it against his estate be- cause not stamped. Thereupon the plaintiff, who had sold the bill, and had been compelled to take it up, brought his action to recover the price he had paid for it, and the action was sustained. Ld. Campbell, before whom the case had been tried, and who then held adversely to the plaintiff, said: "I then thought that the rule caveat emptor applied; but after hearing the argument and the authorities cited, I think the action is maintainable, and upon this ground: that the article sold did not answer the description under which it was sold. If it had been a foreign bill, and there had been any secret defect, the risk would have been that of the purchaser; but here it must be taken that the bill was sold as and for that which it purported to be. On the face of the bill it purporting to be drawn at Sierra Leone, and it was sold as answering the description of that which on its face it purported to be. That amounted to a warranty that it really was of that description." In Ticonic Bank v. Smiley, 27 Me., 225, an overdue note was transferred with this indorsement, "Indorser not holden; " yet it was decided that the indorser was liable to his vendee for any pay- ment made on the note before the transfer, or any set-off existing against it of which the note gave no indication and the vendor no information. In Snyder v. Reno, 38 Iowa, 329, it was held that there is an implied warranty that there has been no material alteration in the paper since its execution. The court says: " We have no doubt that there is an implied warranty of the transferrer that there is no 32 2 DUMONT V. WILLIAMSON. [CHAP. lO, thereon under the commercial law. Still, the defendant is a party to the note, he has sold and transferred it as such, and he is bound to make his representation good. On this ques- tion we know of no conflict in the authorities. The judgment of the court below must then be reversed, the demurrer to the plaintiff's petition overruled, and a proce- dendo awarded. defect in the instrument, as well as that the signature of the maker is genuine." See also, Blethen v. Lovering, 58 Me., 437; Ogden v. Blydenburgh, i Hilton, 182; Fake v. Smith, 2 Abb. (N. Y.), App., 76; 2 Parsons on Notes and Bills, eh. 2, § 2, and cases in notes; Terry v. Bissell, 26 Conn., 23; i Daniel on Neg. Instruments, § 670. The Contract of an Indorser " Without Recourse." — "When the indorsement is without recourse, the indorser specially declines to assume any responsibility as a party to the bill or note; but by the very act of transferring it, he engages that it is what it purports to be — the valid obligation of those whose names are upon it. He is like a drawer who draws without recourse but who is never less liable if he draws upon a fictitious party, or one with- out funds. And, therefore, the holder may recover against the in- dorser without recourse, (i) if any of the prior signatures were not genuine; or, (2) if the note was invalid between the original par- ties, because of the want, or illegality of, the consideration; or, (3) if any prior party was incompetent; or, (4) the indorser was without title." For a further discussion of this rule see Watson v. Chesire, 18 Iowa, 202; Hailey v. Falconer, 32 Ala., 536; Rice v. Stearns, 3 Mass., 225; Ticonic Bank v. Smiley, 27 Me., 225. If an indorsement is intended to be "without recourse" that fact should be indicated; for it is a well settled rule of law that an unqualified indorsement, in full or in blank, cannot be varied by parol as against a subsequent bona fide holder. Daniel on Nego- tiable Instruments, 699, 719; Dale v. Gear, 38 Conn., 15; 9 Am. Dec, 353; Hill V. Shields, 8i N. C, 250; 31 Am. Rep., 499; Martin v. Cole, 104 U. S., 30; Charles v. Denis, 42 Wis., 56; 24 Am. Rep., 383; Lee v. Pile, 37 Ind., 107, no; Rodney v. Wilson, 67 Mo., 123. An Indorsement "\A^ithout Recourse" Does not Im- pair the Negotiable Quality of Commercial Contracts. — An indorsement "without recourse" does not impair the nego- tiable quality of commercial contracts. Neither does it put a sub- sequent purchaser upon inquiry concerning defenses which might be set up by prior parties. Borden v. Clark, 26 Mich., 410; Rice V. Stearns, 3 Mass., 225; Stevenson v. O'Neal, 71 111., 314; Bis- bing V. Graham, 14 Pa. St., 14; Gompertz v. Bartlett, 24Eng. L. &Eq., 156. CHAPTER XI. Warranties or Admissions of a Transferrer of a Commer- cial Contract Without Indorsement. SECTION 51. THE TRANSFERRER OF A COMMERCIAL CONTRACT, PAY- ABLE TO BEARER, WITHOUT INDORSEMENT, IM- PLIEDLY WARRANTS OR ADMITS: (i) THAT HE IS A LAWFUL HOLDER OF THE CONTRACT; (2) THAT HE HAS A JUST AND LEGAL TITLE TO THE SAME; (3) THAT THE CONTRACT IS IN EVERY WAY A VALID, SUBSIST- ING OBLIGATION; (4) THAT HE HAS A RIGHT TO TRANS- FER IT; (5) THAT IT IS THE KIND AND DESCRIPTION OF A CONTRACT THAT IT PURPORTS TO BE. GOMPERTZ V. BARTLETT.' In the Court of Queen's Bench, Nov. 14, 1853. [Reported in 24 English Law and Equity, 1^6; 2j Law J. Rep^ (N. S. ), Q. B., 65; 18 fur., 266; 2 Ellis &- Blackburn, 849.] The Form of Action.— Action for money payable by the defendant to the plaintiff, and for money received by the de- fendant for the use of the plaintiff. Plea of the general issue. On the trial, before Ld. Campbell, C. J., at the sittings in London after Trinity term last, it appeared that the plain- tiff and the defendant had for the previous six or eight months considerable dealings together in respect of the discounting of bills of exchange; and in January last the defendant produced to the plaintiff, for the purpose of being discounted, an un- stamped bill, purporting on the face of it to have been a for- eign bill drawn at Sierra Leone, and accepted in London, but 'This case is cited in Wood's Byles on Bills and Notes, 268, 568; Benjamin's Chalmers Bills, Notes and Checks, 227. See also Webb v. O'Dell, 49 N. Y., 583; Bell v. Dagg, 60 N. Y., 528; Mur- ray V. Judah, 6 Cowen, 483; Brown v. McNamara, 20 N. Y., 287. 324 GOMPERTZ V. BARTLETT. [CHAP. II, which it appeared was, in fact, drawn in London. The de- fendant then stated to the plaintiff that he believed the bill to be perfectly good, and that it would be paid at maturity; that he would not put his own name upon it, but that the plaintiff might take the bill and make inquiries about it and that if he approved of it he, the defendant, would pay a liberal discount upon its being taken without his name. The plaintiff took the bill, and upon inquiry was informed that the parties to it were respectable, and he thereupon paid the defendant the amount of the bill, less 85/. discount. The plaintiff after- wards indorsed the bill to a person named Rogers, for the full amount, less 5/. per cent, discount. The bill was afterwards dishonored, the acceptor becoming bankrupt, the plaintiff was compelled to repay the amount he had received from Rogers. Bills of the same kind had before been paid by the acceptor, and an endeavor was made to prove under the bankruptcy of the acceptor for the amount of the bill, but the commissioner refused to allow it, as the bill was not stamped. Upon these facts, the learned judge was of opinion that the action could not be maintained, and the plaintiff was non-suited, leave being reserved to move to set aside the non-suit, and to enter a verdict for the plaintiff for 8 15/. The Claim of the Plaintiff.— The plaintiff contended that the bill was a perfect bill of exchange, though unstamped. The acceptor was in the habit of paying bills such as these. The mere fact that his bankruptcy prevented him paying it, cannot entitle the plaintiff to recover back the money he paid for it. There has been no failure of consideration. There is no implied warranty that the bill was drawn at any particular place, or that it did not require a stamp, or that it was more a bill of exchange than it purported to be on its face, or that it was of a merchantable character. In Parkinson V. Lee,' it was held that there was no warranty that hops sold by sample were of a merchantable quality, and there was no more warranty of the bill in this case. The principle of caveat emptor clearly applies.' Here the plaintiff had the bill ' 2 East, 314. 'Co. Lit., 102, a. Bree v. Holbech, Dougl., 630; Chandelor •V. Lopus, Cro. Jac, 4, and Taylor v. Bullen, 5 Exch. Rep., 779. SEC. 51.] GOMPERTZ V. BARTLETT. 325 to inspect. He took it away, and made such inquiries about it as he pleased. He had every power of ascertaining the truth. [Wightman, J., put this question: "How can you dis- tinguish this from the case of a forged bill.? There is an im- plied warranty that the instrument is genuine, though there is none that the parties are solvent." Byles on Bills, 266. J It has never been held as a part of a definition of a bill of exchange that it should be drawn upon a proper stamp. This bill is a genuine bill and might have been enforced abroad. If a horse sold without a warranty die, the day after the purchase, of a latent defect existing before the sale, the loss falls on the purchaser. Jones v. Ryde' is distinguishable, for a forged bill is no bill at all. Chapman v. Speller' is much in point to show that the plaintiff cannot recover this money back; this is like the case of Baglehole v. Walters," and Pickering v. Dowson.* There was no representation whatever made at the sale of the bill, which distinguishes this case from Bridge v. Wain.^ At most, it was but a sale of what purported to be a foreign bill. Wilson v. Vysar. * The remedy here, if at all, was by a special action, and the plaintiff cannot sue for the whole price, upon the ground of failure of consideration. Kempson v. Saunders' may be relied on by the other side, but that case rests upon the ground that the shares sold were not saleable at all. The Claim of the Defendant. — The question is, whether a vendor of that which purports to be a valid security is not liable if it turns out upon some latent defect to be invalid. The authorities that have been cited do not apply. Here the bill of exchange sold was not of the description which it pur- ported to be when sold. It does not confer the rights and powers which it purported to give. The sale and purchase '5 Taunt., 488. '14 Q. B. Rep., 621. '3 Camp., 154. *4 Taunt., 779. ^i Stark, 504. % Taunt., 288. '4 Bing., 5. 20 326 GOMPERTZ V. BARTLETT. [CHAP. II, was of a bill of exchange of value and capable of being en- forced. In Young v. Cole/ where bonds were sold as Guate- mala bonds, and it turned out that they had not been sealed at the time required to render the estate liable, it was held that they could not be considered as Guatemala bonds, and that the vendor was bound to refund the purchase money. So, here, in point of law, this cannot be considered as a bill of exchange. It purported to be a foreign bill, and apparently did not require a stamp, and the defendant impliedly repre- sented it to be a foreign bill. In Addison on Contracts, ° the law is correctly stated to be, that if a man goes into the money market with a bill or note and gets it discounted, and it is not the bill or note of the parties whose names appear upon it, the money received in exchange for it cannot lawfully be retained, and that de- clining to indorse the bill does not rid the party negotiating it from the liability which attaches to him for putting off an in- strument as of a certain description which turns out not to be such as it is represented. The case of Jones v. Ryde" is not distinguishable from the present, and the decisions on the cases of forged signatures apply strongly to this case. Decision. — Ld. Campbell, C. J., said, "At the trial I entertained an opinion adverse to the plaintiff. I was struck with the consideration that this was the case of a mere sale, and that the vendor had title in the thing sold, and knew nothing of any secret defect when he sold. And it was diffi- cult to say that the bill was of no value at the time of the sale, because at that time there was no strong reason for sup- posing that it would have been paid if the acceptor had not been insolvent, and even now payment might perhaps be en- forced in a foreign country. I then thought that the rule of caveat emptor applied; but after hearing the argument and the authorities cited, I think the action is maintainable, and upon this gronnd, that the article sold did not ansiver the description nnder which it was sold. If it had been a foreign bill and there had been any secret defect, the risk would have 'sBing., (N. C), 724. 'Vol. I, p. 152. ■'5 Taunt., 488. SEC. 5 I.J GOMPERTZ V. BARTLETT. 327 been that of the purchaser; but here it must be taken that the bill was sold as and for that which it purported to be. On the face of the bill it purported to be drawn at Sierra Leone, and it was sold as answering the description of that which on its face it purported to be. That amounted to a warranty that it really was of that description. It is" not a foreign bill, but was drawn in London, and payment of it could not be en- forced here. This is not the case of a sale of goods answer- ing the description of the goods sold, and a secret defect in the goods; but it is the case of a thing which is not what it professed to be when sold, and upon this ground I think the money must be taken to have been paid upon a mistake of fact, the bill not answering the description of that sold. The passage quoted from Addison on Contracts very clearly, I think, lays down the law on this subject, and both Jones V. Ryde' and Young v. Cole'' are authorities in support 'S Taunt., 488. ^3 Bing. (N. C), 724- ^A^arranties or Admissions of a Transferrer. — While the transferrer cannot be held liable to a subsequent transferree either upon the instrument or the consideration, he may be liable upon his warranties or admissions. The transferrer, while he does not warrant the solvency of the prior parties, he does warrant: 1. That the contract, in every respect, is a genuine one; 2. That he has a good title to the same; 3. That the parties to the instrument were competent to con- tract; 4. That the contract is not forged or fictitious; 5. That the contract is just what it purports to be. Merriam V. Wolcott, 3 Allen, 258 (1861); Gurney v. Womersley, 4 El. & Bl., 123; Shaver v. Eale, 16 John., 201; Bell v. Dagg, 60 N. Y., 528; Wilder v. Cowles, 100 Mass., 487; Swanzey v. Parker, 50 Pa. St., 441; Lobdell v. Baker, 3 Metcalf, 469 (1842); Bayard v. Shunk, I W. & S. (Pa.), 92; Erwin v. Down, 15 N. Y., 575; Tiedeman on Com. Paper, 244; Thrall v. Baker, 4 Metcalf, 193. Some cases hold, however, that where a commercial contract is transferred or exchanged without indorsement, that no such warranties or admissions are implied. Batzer v. Ruren, 29 Me., 434; Fisher v. Rieman, 12 Md., 497; Ellis v. Wild, 6 Mass., 321. It has been held that the transferrer also warrants that he has. no knowledge at the time of the transfer of any defenses or facts, which will defeat the enforcement of the contract. The suppres- sion of the truth is a fraud and he is liable. Wood's Byles on B. & N., 269; Camidge v. Allenby, 6 B. & C, 373 (1827); 60 E. C. 328 GOMPERTZ V BARTLETT. [CHAP. II, of the action. In principle the case is the same as if the ven- dor had professed to sell a bar of gold, which turned out to be mere dross colored and disguised. I am, therefore, of opin- ion, that the law implies to a promise on the part of the vendor L. R.; Fenn v. Harrison, 3 T. R., 759 (1790); Delaware Bk. v. Jer- vis, 20 N. Y., 228 (1859); Bridge v. Batchelder, 9 Allen, 394 (1864). The rule as to what defenses may be interposed against the holder of negotiable contracts applies to a transferree. Equities may be interposed against him if he is not a bona fide holder. Transfer by Delivery Simply. — When a commercial con- tract is payable to bearer it may be transferred so that the holder or transferree would take both the equitable and legal title, by de- livery simply without indorsement. This is true of a commercial contract payable to order, also, after it has been once indorsed in blank, for the reason that a note payable to order and indorsed in blank is equivalent to a commercial contract payable to bearer. Lamb v. Matthews, 41 Vt., 42 (1868); Holcomb v. Beach, 112 Mass., 450; Curtis v. Sprague, 51 Cal., 239 (1876); O'Keefe v. First Nat. Bk., 49 Kan., 347; Russ v. Smith, 19 Tex., 171; 70 Am. Dec, 327. The transferrer by a mere delivery of a commercial contract, payable to bearer without indorsement, incurs no liability on the instrument to the transferree; that is, he is not liable upon the consideration for the transfer. He is only liable upon his war- ranties or admissions. The transferree can never look to the transferrer for payment, if the contract is a valid subsisting one. Wood's Byles on B. & N., 265; Benjamin's Chalmers on B. & N., 226; Roberts v. Haskill, 20 111., 59, where Canton, C. J., says, "By receiving and passing the note while under a blank indorse- ment, and without putting his name to it, he (transferrer) assumed no responsibility in relation to it. The moment he parted with it he became as much a stranger to it as if he had never held it. Had the party to whom he passed it wished him to assume any responsibility in relation to it, he should have required his indorse- ment upon it. By taking it without such indorsement he waived any such guaranty and agreed to take it upon the sole reponsibil- ity of the names already on the note." In case the contract is payable to a particular person or to his order, and is transferred without indorsement, the transferree takes but an equitable title and has the rights of an assignee only. In Illinois, however, it is held that where a negotiable con- tract is payable to a particular person or bearer it cannot be trans- ferred by mere delivery, so as to vest the legal title in the trans- ferree; so that the word "bearer" in such a note is surplusage in that state. Hilborn v. Artus, 3 Scam., 344; Roosa v. Crist, 17 111., 450. SEC. SI.j GOMPERTZ V. BARTLETT. 329 to repay the purchase money, and that the action is well brought. Coleridge, J. — This is the case of a mere sale, and where there is a sale of goods without a warranty the vendor is not Indorsement of a Non-Negotiable Instrument.— An indorsement upon a non-negotiable contract does no more than to transfer the equitable interest therein with the right to recover the money due thereon. It amounts to a mere assignment of the con- tract. It is not an unusual way of transferring non-negotiable contracts for the holder to write his name across the back thereof, but such act imports no legal liability on the part of the indorser to pay the amount of the claim in case of failure by the debtor. To hold otherwise would be giving to the apparent indorsement the same character and effect of an indorsement and to subject the maker of it to the liability of an indorser of a commercial contract. Story v. Lamb, 62 Mich., 525. Indorsement — Statute of Limitations. — At cornmon law when a cause of action once accrues, an action might be brought upon it at any time subsequently. The action was never barred by reason of a mere lapse of time; and it was not untill after the middle of the thirteenth century when by statute the time within which an action must be brought was limited. These statutes at first limited the time within which an action pertaining to real property should be brought. Early in the seventeenth century similar statutes wer.e enacted applying to actions concerning per- sonal property. Now all the states have statutes limiting the time within which actions may be brought. The statutes of limitation do not destroy the debt, they simply bar the remedy. In order for the defendant to secure the advantage of these statutes he must specially plead them. In some jurisdictions, however, under proper circumstances the advantages under the statutes of limita- tions may be taken by demurrer. The statutory period within which an action must be brought commences to run from the time an action accrues. To illustrate: a commercial contract is nominally due upon the first day of the month, but if grace is allowed it is not legally due until the fourth day of the month, and no action can be brought upon the fourth, for the reason that the maker has the entire day in which to pay the same; therefor.e no action can be brought until the fifth, at which time the statute of limitations begins to run. If the contract is payable on demand, the statute of limita- tions does not begin to run until a demand is made, but it does run from that time, for the reason that an action accrues immedi- ately. If the contract is payable a certain time after demand, then of course that period must elapse before the statutes begin to run. In some jurisdictions, however, where the commercial contract is payable on demand it is payable at once and without demand; 330 GOMPERTZ V. BARTLETT. [CHAP. II, bound to see that the thing he sells possesses either the qual- ity or value supposed at the time of the sale. But a vendee is entitled to have a thing of the kind and description which the thing professes to be at the time of the sale. Here, in and in such juristictions the statutes run from its delivery, for the reason that an action may be brought at once without a demand. Palmer v. Palmer, 36 Mich., 487; in re. King's estate, 94 Mich., 411, 425; 54 N. W. R., 178; Hitchings v. Edmands, 113 Mass., 338; Fenno v. Gay, 146 Mass., 118; 15 N. D. R., 87; McMullen V. Rafferty, 89 N. Y., 456; Jones v. Nicholl, 82 Cal., 32; Massie V. Byrd, 87 Ala., 681; and this is true whether the note be payable with or without interest. Wenman v. The Mohawk Co., 13 Wend., 267; Wheeler v. Warner, 47 N. Y., 519; 7 Am. R., 478. If the contract is payable at sight it becomes due at sight, and the statute of limitations runs from that date. If the contract becomes due upon the happening of some event, the statute of limitations begins to run from such event. If the contract is in- dorsed or transferred after maturity, the indorsement is equivalent to the drawing of a new contract payable on demand, and an action may be brought immediately thereon. If there is a breach in any of the warranties made by an indorser, an action may be brought against him immediately, even before the maturity of the principal contract. Blethen v. Lovering, 58 Me., 437 (1870); .Turnbull v. Bowyer, 40 N. Y., 456 (1869); Graham v. Robertson, 79 Ga., 72. If an action is barred by reason of the statute of limitations, no action can be maintained upon the collateral security given for the payment of the debt. When the action on the principal con- tract is barred an action on the security is also barred. Schmucker V. Sibert, 18 Kan., 104; Grattan v. Wiggins, 23 Cal., 16; Wood v. Goodfellow, 43 Cal., 185; Pollock v. Maison, 41 111., 516; Medley v. Elliott, 62 111., 532; Day v. Baldwin, 34 la., 380. Indorsement After Payment — Effect of. — Maturity of a commercial contract does not destroy its negotiability; but who- ever takes it after maturity, as a general rule, takes it with notice of existing equities. Therefore, if the holder of a negotiable con- tract should negotiate the same after maturity and after payment, he could not thereby render the makers liable thereon. He would be liable only upon the warranties of an indorser. Payment Before Maturity — Liability of Maker. — A different condition would arise where the maker should pay a com- mercial contract before maturity and permit the payee to negotiate it thereafter before maturity. In such a case, if a contract should come into the hand of a bona fide holder, he (maker) might be called upon to pay the contract a second time. Morley v. Culver- well, 7 Mess. & W., 174. Payment before maturity by the maker of a commercial con- SEC. 5 I.J GOMPERTZ V. BARTLETT. 33 1 the absence of all fraud, both parties thought they were deal- ing about a foreign bill, which on the face of it this bill pur- ported to be, and it turns out not to be a bill of that kind and description, and therefore [because it is unstamped it is] of no tract to the holder thereof, if not followed by a surrender of the same, will not protect him. Wheeler v. Guild, 20 Pick., 545; Mil- ler V. Race, i Burr., 452; Kingman v. Pierce, 17 Mass., 247; Bleaden v. Charles, 7 Bing., 246. Indorsement — Mistake in. — A mistake in the indorsement will not necessarily render it void. If the name of the special indorsee is misspelled, he may indorse it by spelling his name properly. Leonard v. Wilson, 2 C. & M., 589; Wood's Byles on B. & N., 152. Indorser's Right to Fill Up a Blank Indorsement. — The holder of a commercial contract indorsed in blank can convert it into an indorsement in full in his own favor by super- scribing the necessary words. He may also change the blank indorsement into one in full in the same way, making it payable to a stranger. In case there are several blank indorsements, the holder may fill up any one of them, making it an indorsement in full, or he may make his title through all of them. He may, in short, so long as he does not increase the liability of any of the parties t5 the instrument, change any or all blank indorsements to indorsements in full to himself or strangers. He may fill up a blank indorsement, by a superscription, with any contract con- sistent with the character of that indorsement. Bank of Utica v. Smith, 18 Johns., 230; Mitchell v. Culver, 7 Cowan, 336; Cope v. Daniel, 9 Dana (Ky.), 415 (1840); Cole v. Cushing, 8 Pick., 48; Vincent v. Horlock, i Camp., 442. The Holder's Right to Strike Out an Indorsement. — The holder of a commercial contract upon which there are indorse- ments may strike out any or all of such indorsements which are not necessary to his title. If the contract is payable to bearer and there are several indorsements in blank, the holder may strike out all of them. By striking out an indorsement, if intentional, the indorser is thereby released from all liability. Middleton v. Grif- fith, 57 N. J. L., 442; 51 Am. St. R., 617, 619; Mendelhall v. Banks, 16 Ind., 284; Parks v. Brown, 16 111., 454; Brett v. Mars- ton, 4S Me., 410. These indorsements may be struck out at any time either before or during the trial. Middleton v. Griffith, supra; Porter v. Cushings, 19 111., 572. The holder must not, however, strike out the indorsement through which he makes his title. If the indorsements are in blank and the instrument payable to bearer, as was said above, he may strike out all; if, however, it is payable to a particular person or order and is indorsed by him and several others in blank, he 332 GOMPERTZ V. BARTLETT. [CHAP. II, value; and common justice requires that the vendee should not be bound, and that the purchase money should be recov- ered back. Wightman, J. — I am of the same opinion, on the ground that the thing sold does not answer the description of that may not strike out the indorsement of the original payee without changing the transfer by indorsement to an assignment, for the reason that he would not be able to make his title through the original payee or his order. Transfer of Negotiable Contracts by Operation of Law. — While commercial contracts may be transferred by assignment, by indorsement and by delivery, they may also be transferred by operation of law. A transfer of a commercial contract by opera- tion of law will occur in the following cases: I. In the case of bankruptcy or assignment for the benefit of creditors, where all the property of the bankrupt or of the assignor passes to the assignee without an express assignment or indorse- ment; 1. In the case of the death of a payee or holder, his right and title passes to his personal representatives; 3. In the case of the death of one of the joint payees, the title vests at once in the survivors; 4. Where a note is transferred to a married woman, the title at once vests in the husband, unless otherwise provided for in the statutes under the married woman's acts. Norton on Bills and Notes (2d ed. ), 191. The Indorsement Must Not be Partial. — The law will not permit the parties to split their cause of action, therefore the holder of a commercial contract will not be permitted to indorse for a part of the amount; but in case a part of the amount has been paid, an indorsement may be made of the balance, which of course is not a violation of the rule. At common law a transfer of a part Only of a commercial contract could not be recognized, and no action at law could be maintained on such a title by any of the parties. Hawkins v. Cardy, i Ld. Raym., 360; Heilbut v. Nevil, 4 L. R. C. P., 358; Conover v. Earle, 26 Iowa, 169: Goldman v. Blum, 58 Tex., 636; Lindsay v. Price, t^T) Tex., 2S2. But now by statute in many of the states the indorsee or assignee of a part of a demand may sue by making the indorser or assignor a party, either plaintiff or defendant. Lapping v. Duffy, 47 Ind., 571; Gorves v. Ruby, 24 Ind., 418; Fordyce v. Nelson, 91 Ind., 448. In the case of a partial assignment, the indorsee will have a lien upon the instrument to the extent of the indorsement. Flint V. Flint, 6 Allen, 36. When May an Indorsement be Made? — The indorsement or transfer of a commercial contract may be made any time after SEC. 5 I.J GOMPERTZ V. BARTLETT. 333: which the vendor professed to sell. On its face the bill purports to be a foreign bill of exchange not requiring a stamp. It turns out, however, that so far from answering the description of that for which it was sold, it was not a its execution and delivery, either before or after maturity. Matur- ity does not destroy the negotiability of these contracts. Leavitt V. Putman, 3 N. Y., 494; Scott v. First Nat. Bk., 71 Ind., 448. But when a person takes a commercial contract after maturity, or with notice of its having been dishonored, he takes it subject to all the equities which might have been interposed against the party from whom he receives it. Robinson v. Lyman, 10 Conn., 30; Lansing v. Gaine, 2 Johns., 300. If, however, he takes it from one having a title freed from equities, then he gets the title of his indorser and may recover. Kost v. Bender, 25 Mich., 515. And this is true even though he had knowledge of the equities. The Law of ^Vhat Place Governs the Indorsement. — Commercial contracts, like common law contracts, in the absence of stipulations to the contrary, are governed according to the lex loci; and in case of indorsement, there is a presumption that it was made at the place where the contract was made. This presump- tion, however, may be rebutted by positive proof to the contrary. Unless otherwise stipulated, a contract of indorsement is controlled by the law of the place where made. There is some conflict of authority in the case where a contract is executed and delivered in one place to be performed in another, as to the laws of which place controls. It was held in the case of Staples v. Nott, upon a prom- issory note bearing date at Washington, D. C, and payable at a bank in Watertown, N. Y., that the plaintiffs was entitled to re- cover as upon a contract made under the government of the laws of the District of Columbia. 128 N. Y., 403; 28 N. E. Rep., 515; Bank v. Low, 81 N. Y., 566; Sheldon v. Haxtoa, 91 N. Y., 124. In the case of Alister v. Smith, it was held that the laws, of the state where a negotiable contract is made, will fix the rate of interest that it is to draw. 17 III, 328. Some of the courts have made a distinction between a case where the note was given for an original indebtedness or as a re- newal note simply. Staples v. Nott, supra; 65 Am. D., 651; Du- gan V. Lewis, 79 Tex., 246; 23 Am. St. R., 332; New England Co. v. McLaughlin, 87 Ga., i; Hanover Nat. Bk. v. Johnson, 90 Ala., 549- While Beck, C. J., in the case of Bigelow v. Burnham, says: " It is a well settled rule that the law of the place where a contract or a note by its terms is to be performed determines the question of its validity." 83 Iowa, 120; Burrows v. Stryker, 47 Iowa, 477; Story on Conflict of Laws, §§242, 280, 281; Andrews v. Ponds, 13 Peters, 65; City of Aurora v. West, 22 Ind., 88; 85 Am. D., 413; Mason v. Dousay, 35 111., 424; 85 Am. D., 368. 334 GOMPERTZ V. BARTLETT. [CHAP. II, bill drawn at Sierra Leone, but an inland still requiring a stamp, and therefore not a valid bill in any court of law. I agree, that if an article sold and delivered without a warranty answers the description of that which at the time of sale it The parties may, however, where a contract is executed in one place to be performed in another, stipulate as to the laws of which place shall control, and in that case their agreement will be car- ried out. New England Co. v. McLaughlin, supra. It is a well recognized rule of law that a commercial contract must conform to the place where made as to the formality of its execution and the consideration necessary to its validity; the lex ioci gov e.Tns also in its interpretation, nature and effect. Evans v. Anderson, 78 III, 558; King v. Sarria, 69 N. Y., 24; The Free- man's Bk. v. Ruckman, 16 Gratt. (Va.), 126. It is often difficult to determine whether a matter relates to the rights of the parties or to the remedy, and whether it is gov- erned by the lex loci or the lex fori. Lerou.x v. Brown, 12 C. B., 801; 74 E. C. L. R., 801; The Freeman's Bank v. Ruckman, 16 Gratt., 126. The Laws of W^hat Place Govern Negotiable Con- tracts. — In the case of Kilgore v. Dempsey, it was held, where the maker of a commercial contract resided in Ohio, where the law, at the time, allowed the parties to contract for any rate of interest not exceeding ten per cent., and the payee resided in Pennsylvania, where six per cent, was a legal rate of interest, that on a loan of money made in Ohio the parties had a right to stipulate in the note for interest at ten per cent, per annum and to make the note pay- able in Pennsylvania, without thereby rendering a contract usur- ious. 25 Ohio St., 413; Chapman v. Robertson, 6 Paige, 627; Peck V. Mayo, 14 Vt, 33, where Redfield, J., in delivering the opinion in an action upon a contract executed and delivered at Montreal, Canada, and payable in New York, said, "If a contract be entered into in one place to be performed at another, and the rates of interest differ in the two countries, the parties may stipu- late for the rate of interest of either country, and thus, by their own express contract, determine with reference to the law of which country that incident of the contract shall be recited." Harvey v. Archbold, i Ryan & Moody, 184; E. C. L. R., 412; Dessau v. Humphreys, 20 Martin, i; Andrews v. Pond, 13 Peters, 65; Ekins V. The East India Co., i P. Wms., 395. If, however, the contract is entered into in one country to be performed in another having established a lower rate of interest than the former, and the contract stipulates interest generally, it has always been held that the rate of interest recoverable was that of the place of performance only. Robinson v. Bland, 2 Burrow, loi 7; Fanning V. Cousequa, 17 Johns., 511; Scofield v. Day, 20 Johns., 102. SEC. 5 I.J GOMPERTZ V. BARTLETT. 335 professed to be, and the vendor professed to sell, the rule of taveat emptor applies. Young v. Cole ' and Jones v. Ryde ^ are both authorities in support of the action; and Jones v. Ryde is more especially an authority in point. Rule absolute. '3 Bing. (N. C), 724; 4 Scott, 495. ^S Taunt, 488; i Marsh., 157. CHAPTER XII. Protest. SECTION 52. THE "CERTIFICATE OF PROTEST" SHOULD SHOW: (i) A COPY OF THE INSTRUMENT OR SHOULD SET IT OUT ACCORDING TO ITS LEGAL EFFECT; (2) THAT PRE- SENTMENT AND DEMAND WERE MADE; (3) THE TIME AND PLACE OF PRESENTMENT AND DEMAND: (4) THE PARTIES BY AND TO WHOM PRESENTMENT AND DE- MAND WERE MADE; (5) THE ANSWER, IF ANY, GIVEN TO THE DEMAND; OR THAT NO ANSWER WAS GIVEN; OR THAT THE PARTY COULD NOT BE FOUND; OR THE FACTS WHICH EXCUSE PRESENTMENT AND DEMAND; (6) THAT NOTICE OF DISHONOR HAD BEEN GIVEN; (7) THE SIGNATURE AND SEAL OF THE NOTARY. MUSSON V. LAKE.i In the Supreme Court of the U. S-, Dec, 1845. [Reported in 4 Howard, 262.'] The Form of the Action. — Lake was sued as indorser of the following bill of exchange: — " Vicksburg, ijtli December, 18 j6. ' ' Exchange for $6, ijj /^\. '• Twelve months after first day of February, i8jy, 0/ this first of exchange {second of the same tenor and date tin- paid'), pay to the order of R. H. & J. H. Crump six thou- 'This case cited in Story on Bills of Exchange, 325; Wood's Byles on Bills and Notes, 575; Benjamin's Chalmers on Bills, Notes and Checks, 165; Bigelow on Bills and Notes, 87, 107; Bigelow's Cases on Bills and Notes, 100; Daniel on Negotiable Instruments, 654, 896, 898, 953, 970, 983; Norton on Bills and Notes, 127, 160, 322, 349; Tiedeman on Commercial Contracts, 326, 318, 334, 346, 507, 508; Randolph on Commercial Paper,, 29. 37> 47- SEC. 52. J MUSSON V. LAKE. 337 sand, one hundred and thirty-three dollars, value received, and charge the same to account of Steele, Jenkins & Co." " To Kirkman, Rosser & Co., New Orleans." "Indorsed: R. H. & J. H. Crump, W. A. Lake." ' ' Kirkman, Rosser & Co. , New Orleaus, 3d February, 18 j8, — protested for non-payment . A. Mazureau, Not. Pub." It being admitted, that Vicksburg, where said bill bore date, was in the State of Mississippi, and New Orleans, the place of payment, was in the State of Louisiana, the plain- tiffs then offered to read in evidence to the jury, the protest of said bill of exchange; which protest, thus offered to be read, is in the words and figures following, to-wit: — United States oe America, State of Louisiana. By this public instrument, protest, be it known, that on the third day of February, in the year one thousand eight hundred and thirty-eight, at the request of the Union Bank of Louisiana, holder of the original draft, whereof a true copy is on the reverse hereof written, I, Adolphe Mazureau, a notary public in and for the city and parish of New Orleans, State of Louisiana aforesaid, duly commissioned and sworn, demanded payment of said draft, at the counting-house of the acceptors thereof, and was answered by Mr. Kirkman that the same could not be paid. Whereupon I, the said notary, at the request aforesaid, did protest, and by these presents do publicly and solemnly protest, as well against the drawer or maker of the said draft, as against all others whom it doth or may concern, for all exchange, re-exchange, damages, costs, charges, and interests, suffered or to be suffered for want of payment of the said draft. Thus done and protested, in the presence of John Cragg and Henry Frain, witnesses. In testimony whereof, I grant these presents under my signature, and the impress of my seal of office, at the city of New Orleans, on the day and year first herein written. [L. S.J A. Mazureau, Notary Public. 338 MUSSON V. LAKE. [chap. 12, But the defendant objected to said protest, and the copy of the bill on the reverse side thereof written being read in evidence to the jury, on the ground that it was not stated in said protest that the notary presented said bill of exchange to the acceptors, or cither of them ; or had it in his posses- sion when he demanded payment of the same. And that for this alleged defect, which it was insisted could not be supplied by other proof, the said protest was invalid and void upon its face, and could not be received as evidence of a legal presentment of the bill for payment, or of the dishonor of the bill. And, thereupon, on the question whether the said protest could be read to the jury, as evidence of a legal presentment of the bill for payment, or of the dis- honor of said bill, the judges were opposed in opinion. Which is ordered to be certified to the Supreme Court of the United States for their decision. J. McKiNLEY. [l. s. ] J. Gholson. [l. s. j The Claim of the Plaintiff. — On the trial of this cause, and after the original bill of exchange, upon which the suit was brought, had been read to the jury, the plaintiff offered in evidence the protest thereof. The counsel of the parties to this suit do not differ at all as to the duty of a notary, when making a personal demand of the payment of negotiable paper prior to the protest thereof. lie concur in opinion, that he must have the note or bill with him, and should present it for payment, etc., and the only difference zvliicli arises is, as to the species of evidence which is indispensable to prove the fact of present- ment. Must the term itself be used in the protest, and will no form of words therein supply its place } This is the posi- tion assumed for the defendant; and, this being controverted, the issue is made which is now to be disposed of. A number of authorities have been cited by the learned counsel for the defendant, which, though certainly applicable to the duties to be performed by a notary ante protest, are believed not to decide the question raised here; nor, if they did, can it be conceded that they would be conclusive, upon a matter specially pertaining to Louisiana's jurisprudence. SEC. 52.] MUSSON V. LAKE. 339, The stress of the argument in the learned counsel's brief is that in all cases the fact of presentment must appear, in verbo, upon the face of the protest, and this is assuredly not so. For example: if a note or bill should be payable at a particular place, and the notary takes it thither at maturity, and there should be no one there to whom to present it, or of whom to demand payment, the law dispenses the party with making either, and the notary, of course, from certifying either, for nullus cogitur ad vana. So in the case of a lost note; a valid protest could could be made thereof without its production, if an adequate indemnity was tendered to protect the party from all future liability, or to reimburse him for any payments he should be constrained to make. In these and analogous cases, it could hardly be insisted, either that the law required the notary to certify to a presentment which was never made, and the failure whereof the law excuses; or, that the protest would be invalid without it. One of the most important of the cases cited adversely is a strong authority to establish this. It is the case of Freeman et al. v. Boynton.' The court there, after affirming the necessity of having the note or bill present when the demand is made, says: — "This rule may admit of exceptions, — as where the security may be lost; in which case a tender of sufficient indemnity would make the demand valid, without producing the security. And where, from the usual course of business, of which the parties are conversant, the security may be lodged in some bank, whose officers shall demand payment, and give notice to the indorser, according to the custom of such banks, — the security not being presented at the time of the demand, but the parties being presumed to know where it may be found." Here, again, presentments are dispensed with, in cases where protests are authorized; and surely these protests must dispense with averments which would not be true. The forms of protest vary in different countries. They vary in different states. They vary in the same state. They must necessarily adapt themselves to the true circumstances attendant upon the dishonor of bills and notes. ' 7 Mass. R., 483. 340 MUSSON V. LAKE. [CHAP. 12, The acts of public officers are favored to the extent that they are presumed to know their duty, and to do their duty, unless the contrary appears. A notary has no right "to demand payment," in the absence of the security which attests the party's liability, or without its presentment; and of course he is presumed to know that he cannot do it. Where, then, notaries "demand payment," they have a right to the presumption that the demand followed the presentation. A contrary doctrine casts the] presumption against the officer, and arraigns him, by implication, for a breach of duty; and that, too, in the absence of an interest or a motive. Hence, therefore, a "demand of payment," in the absence of other words, far from implying an actual presentment, would imply that there was none. It is beheved that no principle, nor usage, nor even precedent, gives the sanction of its authority to accusatory implications like these. If the protest had averred, that "payment was duly de- manded," surely that would have implied that the demand was made upon presentment; and if so, it is to be implied that the demand alleged in this protest was otherwise than duly made. If a protest states the substance of what is re- quired to be done, it is all that is needed. No form of words is sacramental; protests have been holden good, though they stated that the demand was made "at the maturity" of the bill or note; or "at the time they were due," in lieu of the usual mode of stating the precise day, month, and year when the demand was made. So, notaries must make their demand within certain hours of the days when the bills or notes ma- ture. Demands made in unseasonable hours would be of no avail. Nevertheless, protests but rarely enter into such de- tails, but the thing itself — the presentation — is as much re- quired to be made within the prescribed hours, as it is re- quired to be made at all. Why, then, is more specialty of statement needed about the exact performance of one duty than the other.? Why, if the demand of payment implies that it was made in due time, may it not imply that it was made after due presentation.' But the protest ad hoc was made in Louisiana. If good there, it must be good elsewhere. Commercial usages, how- S'^C. 52.] MUSSON V. LAKE. 34I ever ancient, however prevalent, and however reasonable, cannot confront her statutes and annul them, nor reverse her courts' judgments which settle their meaning. Most disas- trous would be the results were it otherwise; for notarial offices in the large cities have their printed forms of protests, which they use in all cases in like conjunctures, and which have been in use for years, and are in daily use; and in heavy business offices (Hke that of Mazureau's), there are sometimes from twenty to a hundred protests made in a single day, in behalf of the banks; and hence there are vast and incalculable interests dependent upon the validity of these protests, and it would be an intolerable grievance to dealers in commercial paper, if, while these protests bound indorsers in Louisiana, they released them elsewhere. A rapid synopsis of the statute and decisions of the Su- preme Court of Louisiana will settle the law of protests spe- cially applicable to the case at bar. The act of the Louisiana General Assembly, of March 13th, 1827, section i, provides: — "That all notaries, or per- sons acting as such, are authorized in their protests of bills of exchange, promissory notes, or orders for the payment of money, to make mention (not of the presentment, but) of the demand made upon the drawer, acceptor, or person, on whom such order or bill of exchange is drawn or given; and of the manner and circumstances (net of such presentment, but) of such demand; and whenever they shall have so done, a certified copy of such protest, etc., shall be evidence of all the matters therein stated." In the case of the Louisiana Ins. Co. v. Shaumburg, ' it was decided that a notary's certificate of demand of payment and protest may be contradicted by other evidence. If it might, evidence might be marshalled to rebut that contradic- tion, and even supply, by parol, omissions excepted to; and if this were so, the objection to the protest at bar should not have been to its admissibility, but to its effect, etc. And this would accord with the deci.sion of Allain v. Whittaker, et al.,^ which declares that ' ' the uniform practice in this state has '2 Mar., N. S., 511. ^5 N. S., 513- 21 342 MUSSON V. LAKE. [CHAP. 12, been to receive the protests of notaries as evidence of the demand on the maker of a note or acceptor of a bill of ex- change." In the case of Gale v. Kemper's Heirs,' the court says, — "The note was made payable at the office of discount and de- posit of the Bank of the United States, in the city of New Orleans, and the protest states, that (not the presentation, etc. , but) the demand was made there of the proper officer. When a note is payable at a particular place, a personal de- mand on the drawer or maker cannot be made, and it is not always required. It suffices to have been made of any per- sons there." In the case of Thatcher v. Goff,* the court gave a striking instance of its liberality of interpretation when construing the language of protests. It decided that, where certain notes, payable at the Branch of the United States Bank at Natchez, are protested by a notary residing in Natchez, who states in his protest that he demanded payment at the United States Bank, it will be considered as meaning the Branch at Natchez, and not the principal Bank of Philadelphia; thus supplying, by intendment, the important words, "Bank at Natchez, ' which the notary had omitted in his protest. The learned counsel has cited the case of Warren v. Bris- coe;' but it is believed to be clearly distinguishable from the case at bar. There the note was "payable at the Planter's Bank of Mississippi at Natchez," and the protest stated that "he went to the Planter's Bank, Natchez, and was informed by the teller, there were no funds in the bank for the payment of said note; wherefore he protested," etc. Not only is no presentment stated, but there are no words from which it is to be implied, for no demand is stated to have been made; and though it be inferable that there was some note of the party which the bank had no funds to take up, yet non constat that it was the note in question, unless the same had been ex- hibited to the teller. But this case was fully reviewed in the next case to be cited, which it is respectfully suggested is de- cisive of the validity of the protest in question. ' lo Louisiana, 208. ^ 13 Louisiana, 363. ' 12 Louisiana, 472. SEC. 52. j MUSSON V. LAKE. 343 The case referred to is that of Nott's Executor v. Beard.' The protest passed upon was from the identical notarial office which made the one in the case at bar. It is couched in the hke language, thus: — " I demanded payment of said draft at the counting-house of the acceptors thereof, and was answered by Mr. Burnett, one of said firm, that the same could not be paid." It is to every extent the very case at bar; it decides emphatically, that, under the laws of Louisiana, the word presentment is unnecessary in notarial protests; and the word demand implies the presentment, and is all-sufficient. The Claim of the Defendant.— This is an action brought by the plaintiff against the defendant, as indorser of a foreign bill of exchange. The question raised in the Circuit Court, and upon which the judges divided in opinion, was whether the protest offered in evidence showed upon its face ' ' that a presentment to the drawees of a bill, " and a demand of pay- ment, had been made. The protest does not state that the bill was ' ' presented " to the drawees and payment demanded, but sim.ply that the notary de->nanded payment of the bill, tvithout alleging that he presented it, or that he had it with him and exhibited it at the time he made the demand. We maintain that, by the settled principles of the commercial law, the protest of a foreign bill must show, that at the time the notary demanded payment he had the bill with him., ready to deliver in case it should be paid; this is generally done by stating that he presented or exhibited the bill. It does not necessarily follow, from a mere statement that he demanded payment of the bill, that he had the bill with him, and pre- sented it or exhibited it to the drawees or acceptor, because he could demand payment of the bill without actually having it with him. To present a bill for payment is to exhibit or- show the bill itself to the drawer or acceptor; to demand pay- ment of a bill is to request its payment; and this request may- be made whether the bill be present or not. A presentment ex vi termini imports that the bill itself was shown to the ac- ceptor. A mere demand of payment does not necessarily im- port that the bill was shown and exhibited to the acceptor at the time the demand was made. '16 Louisiana, 308. 344 MUSSON V. LAKE. [CHAP. 12, It is essential, to constitute a legal demand of payment of a bill or note, that it should be presented to the acceptor at the time the demand is made, or, in other words, that the person who makes the demand should have the bill with him. In Hansard v. Robinson,' the court of the King's Bench de- cided that the holder of a bill of exchange cannot insist on payment without producing and offering to deliver up the bill. The same principle is asserted in Freeman v. Boynton,^ and other authorities." The contract of an indorser is conditional; he promises that the bill shall be paid if it is duly presented for payment, or if not paid upon presentment, and notice of its non-pay- ment be given to him, that he will pay it. These constitute conditions precedent to a right of recovery against him.* And being conditions precedent, the proof must be clear and ex- plicit to charge him.'' In the last case, the Supreme Court of New York say: — "The question is not what inference the jury might draw from the evidence, but what testimony does the law require in such case. We have seen that this is a condition precedent, and strict proof is required. The law has allowed the indorser this protection; nothing short of clear proof of notice shall subject him to liability. The reason and justice of requiring proof against a surety will not be doubted. It is imposing no hardship on the party," etc. In that case, the proof was, that notice was left at the office of the defend- ant, or at the post-office. In the one case the notice would have been sufficient, in the other it would not; and as the proof did not affirmatively and clearly show that it was left at the office of the defendant, it was held insufficient. So here, if the bill was present, and shown to the acceptor when the demand was made, it was sufficient to charge the indorser; if it were not present, and ready to be delivered up when pay- ment of it was demanded, it was not sufficient ; and as the ' 7 Barn. & Cressw., 90; 14 Eng. Com. Law Rep., 20. '^ 7 Mass. Rep., 483. 'Vide Chitty on Bills, edit, of 1836, 385, et seq.; 12 Louisiana, 473- * Chitty on Bills, edit, of 1836, 385. ^ 20 Johns., 381. SEC. 52.] MUSSON V. LAKE. 345 evidence (that is, the protest) does not show it was presented or exhibited when the demand was made, it necessarily follows that the proof was insufficient to charge the indorser; because, as before shown, the statement in the protest, that he de- manded payment of the bill, does not of itself import ex vi termini that he had the bill with him when such demand was made. The refusal to pay in this case, when payment was demanded, may have been predicted upon the fact, that the notary did not have the bill. Every fact stated by the notary in this protest may be true, and yet no dishonor of the bill have occurred on which to charge the indorser. The protest must show every act to have been done that is necessary to charge the indorser, and can leave nothing to inference or in- tendment. If every fact stated in this protest might be true, and the bill itself never have been exhibited or shown for pay- ment, the proof is insufficient. In suits against indorsers of foreign bills of exchange, the' only legal evidence to prove the presentment of the bill and demand of payment is the protest. In regard to the drawer, if he had no funds in the hands of the drawee no protest is necessary, and an explicit promise to pay by an indorser may waive the necessity of a protest; but without such express waiver, a protest is the only evidence of presentment and de- mand known to the law. "Whenever," says the law,' ' ' notice of non-payment of a foreign bill is necessary, a pro- test must also be made, which, though on first view it might be considered mere matter of form, is, by the custom of mer- chants, indispensably necessary, and cannot be supplied by witnesses or the oath of the party, or in any other way; and it is said is part of the constitution of a foreign bill of ex- change, because it is the solemn declaration of a notary, who is a public officer recognized in all parts of Europe that a due presentment and dishonor has taken place, and all countries give credence to his certificate of the facts stated."^ To make the protest evidence of presentment and dis- honor, it must then show on its face the solemn declaration 'Chitty on Bills, edit, of 1836, 489, et seq. '^lo Mass. R., ij 12 Pick., 484; 4 Har. & Johns., 54, 61; 4 Wash. C. C. R., 468. 346 MUSSON V. LAKE. [CHAP. 12, of the notary, that a due presentment of the bill and its dishonor has taken place, and to constitute such due present- ment and dishonor, it has been shown that a presentation or exhibition of the bill itself to the acceptor, and a demand of payment, is necessary. And to establish a legal presentment, the bill must accompany the demand. The evidence must affirmatively show that fact, and as the protest in case of a foreign bill is the only evidence admissible to prove it, it must show that the bill accompanied the demand, by stating that it was presented, etc. , or other equivalent words. This is ex- pressly stated by Mr. Chitty.' He says, — "When the drawee, etc., refuses to pay the bill, the holder should cause it to be protested. For this purpose, he should carry the bill to a notary, who is to present it again to the drawee and demand payment," etc. If the drawee again refuses to pay, the no- tary is thereupon to make a minute, etc. The next step is to draw up the protest, which is a formal declaration, on pro- duction of the bill itself, etc., "that it has been presented for payment and payment refused," etc. In countries governed by the commercial law, the form of the protest shows that the bill itself must be stated to have been presented in the protest, as well as the demand of payment. The form runs thus: "On this day, the ist, etc., at the request of A. B., bearer of the original bill of exchange, whereof a true copy is on the other side written, I, B, C, notary, etc., did exhibit the said bill," etc., etc. The demand of payment and refusal is then stated, vede form.^ If it be necessary to exhibit the bill at the time payment of it is demanded, it would seem necessary to prove it; and if it be necessary to prove it, the protest, which is the instru- ment of proof, must not only show a demand of payment, but a presentation of the bill itself at the time the demand was made. And in conformity with these principles, the Su- preme Court of Louisiana held, in the case of Warren v. Briscoe,'' the protest must show that the bill itself was pre- sented, etc. 'Chitty on Bills, edit, of 1836, 492. ^Chitty on Bills, edit. 1836, 497. "12 Louisiana Rep., 475. SEC. 52.] MUSSON V. LAKE. 347 This case, it is true, has in effect been overruled by the case ot Nott's Executor v. Beard,' although the court en- deavored to reconcile the two cases. The last case, it is sub- mitted, is irreconcilable with the principle and the adjudicated cases hereinbefore cited. It substitutes inference or presump- tion for fact, and decides the point mainly on the ground that the notary is a public officer, and must be presumed to have done his duty. It introduces a new rule, unknown to the commercial law, and substitutes inference of a fact, the exis- tence of which the law required should be shown by express proof; and, moreover, it assumes to raise the presumption from the statement of a fact (to wit, demand), which by no means necessarily imports that the bill was presented when such demand was made. The case is, as we will endeavor to show, inconsistent not only with the previous case in the same court in 12 Louisiana, but with principle. The court (p. 312) admit the law to be, that the person making the demand must have the bill with him; but, say I hey, "It does not follow as a consequence, because both words are not used in the protest, that he had not the bill with him." By "both words," we understand the court to mean the words "presentment" and "demand," as used in the previous part of the sentence, in which they say, — "The person making the 'presentment' or 'demand' must have the bill with him." With all due deference to the opinion of that court, for whom we entertain the highest respect, the question was not whether it followed as a consequence, because both words were not used, that the notary had not the bill with him, but whether it followed as a consequence, from the state- ment of the one used, to wit, "demand," that he had the bill with him. The law required the plaintiff to prove that he presented the bill and demanded its payment, which was re- fused. It does not follow, that, because he demanded pay- ment of a bill, therefore he had the bill itself with him and presented it. He may have had it when he demanded pay- ment, or he may have demanded payment of the bill without having it. It is probable he had it, but the law will not per- mit the liability of an indorser to be established by the substi- '16 Louisiana R., 308. 348 MUSSON V. LAKE. [CHAP. 12, tution of probability for proof. The statement, therefore, that he demanded payment of it, is not proof that he presented or exhibited it. If it be essential that the bill should be pre- sented or shown, and payment thereof demanded, it follows that both the presentment of the bill for payment and the de- mand of payment should be stated. Chitty (page 492) says the notary should present it and demand payment, and if pay- ment is refused he should protest it, which is a formal declar- ation that he presented it, etc. From this, it appears the protest must state the presentment, that is, the exhibition of the bill to the acceptor, and the demand of payment. Aware of the difficulty of sustaining their opinion, if the same rule of evidence applied to the statements of the notary that would apply to the same statements on oath by a private individual, they say he is a public officer, and it is not to be presumed that he would do so unless an act as to go to the house of the acceptor and demand payment if he had not the bill with him, and that the law will presume the notary had done his duty. The principle, that the law presumes public officers to do their duty, it is respectfully submitted, was mis- applied by the court. It is true, in a proceeding against an officer for dereliction of duty, the presumption is that he has done his duty, and the contrary must be proved, though it in- volve a negative. But if this principle applies to a collateral proceeding hke this, it proves too much, and the long train of recorded decisions, requiring a protest to be produced on the trial, will at once be struck from the commercial code. If the law presumes he will do his duty, why require the protest to be produced, proof that the bill was left with him to protest would be sufficient, because, as it was his duty to protest it, it will be presumed he did so. So, when it is made his duty to give notice when he protests a bill, as is the case in some states, no notice need ever be proved; all that is necessary, upon the principle assumed by the court, is in such case to prove the protest, and then, as it was the notary's duty to give the notice, it will be presumed he gave it. Nay, if it be proved that the bill was put in his hands to protest, it will be presumed he did his duty, and therefore it will be presumed he did protest it. But the question might be here asked, SEC. 52. J MUSSON V. LAKE. 349 What is the duty of a notary when a foreign bill is placed in his hands for protest.' It is not merely to present and demand payment, but to set forth these facts in his protest. If he omits to do so, the protest on its face shows he has not done his duty, and of course the presumption falls to the ground. The principle might be carried out to cure any defective state- ment as to the time notices were given; if omitted to be stated when notice was given, as the notary's duty was to give notice, at furthest, the day after the protest, it could be presumed he did so, although his protest does not show the time when he gave the notice. The court endeavor to distinguish the case from the one in 12 Louisiana, 472. They say, in the last named case, the notary certified that he went to the Planters' Bank, and was informed by the teller there were no funds in the bank to pay the note, etc. He does not say, says the court, that "he presented the note or made a demand of payment." ■ What was the use to do so, if their opinion in 16 Louisiana is cor- rect.' According to that opinion, as he was presumed to do his duty, and as it was his duty to present the note and de- mand payment, this would be presumed; nay, as they say in that case, that it is not to be presumed the notary would do so unless an act as to go to the house of the acceptor without the bill; so, in this case, they might with equal justice have said it would not be presumed he would go to the bank to de- mand payment, and yet make no demand when he got there. Why was it not presumed he did his duty in that case, as well as in the last.' Simply because in that case the court decided, very correctly, that the facts which constitute a legal present- ment, etc. , must appear on the face of the protest, and can- not be presumed. Upon the whole, it is believed, both on principle and au- thority, that the case in 16 Louisiana cannot be sustained, and that the protest in this case is not legal evidence of pre- sentment, to charge the defendant. Decision. — The plaintiffs brought an action of assumpsit, in the Circuit Court of the United States for the Southern Dis- trict of Mississippi, against the defendant, as indorser of a bill of exchange, drawn at Vicksburg, in said state, by Steele, 350 MUSSON V. LAKE. [CHAP. 12, Jenkins & Co., for $6,133, payable twelve months after the first day of February, 1837, to R. H. & J. H. Crump; and ad- dressed to Kirkman, Rosser & Co., at New Orleans, and by them afterwards accepted, and indorsed by the payees and the defendant. On the trial of the cause, the plaintiffs offered to read as evidence to the jury a protest of the bill of exchange, to the reading of which the defendant objected; because it did not appear in the protest, that the notary had presented the bill to the acceptors, or either of them, when he demanded pay- ment thereof. And upon the question, whether the protest ought to be read to the jury as evidence of a presentment of the bill to the acceptors for payment, or as evidence of the dishonor of the bill, the judges were opposed in opinion. Which division of opinion they ordered to be certified to this court; and upon that certificate the question is now before us for determination. The indorser of a bill of exchange, whether payable after date or after sight, undertakes that the drawee will pay it, if the holder present it to him at maturity and demand payment; and if he refuse to pay it, and the holder cause it to be pro- tested, and due notice to be given to the indorser, then he promises to pay it. All these conditions enter into and make part of the contract between these parties to a foreign bill of exchange; and the law imposes the performance of them upon the holder, as conditions precedent to the liability of the in- dorser of the bill. A presentment to and demand of payment must be made of the acceptor personally, at his place of busi- ness or his dwelling.' Bankruptcy, insolvency, or even the death of the acceptor will not excuse the neglect to make due presentment; and in the latter case it should be made to the personal representatives of the deceased.^ Why Must a Presentment be Made. — The reasons why presentments should be made to the drawee are: ' Story on Bills, § 325. ^ Chitty on Bills, 7th London ed., 246, 247; Story on Bills, 360; 5 Taunt. R., 30; 12 Wend. R., 439; 2 Douglass, 515; War- rington V. Furbor, 8 East, 245; Esdaile v. Sowerby, 11 East, 117; 14 East, 500. SEC. 52. J MUSSON V. LAKE. 35 I 1st. That he may judge of the genuineness of the bill; 2nd. That he may judge of the right of the holder to re- ceive the contents; and 3rd. That he may obtain immediate possession of the bill upon paying the amount. The acceptor has a right to see that the person demand- ing payment has a right to receive it, before he is bound to answer whether he will pay it or not; for, notwithstanding his acceptance, it may have passed into other hands before its maturity. And he, as well as the drawee, has a right to the possession of the bill, upon paying it, to be used as a voucher in the settlement of accounts with the drawer.' Mr. Justice Story has given the form of a protest now in use in England, in his treatise on bills of exchange, by which it will be seen that the words " did exhibit said bill " are used, and a blank is left to be filled up with " the presentment, and to whom made, and the reason, if assigned, for non-pay- ment."^ This, with the authorities already referred to, shows that the protest should set forth the presentment of the bill, the demand of payment, and the answer of the drawee or ac- ceptor. The holder of the bill is the proper person to make the presentment of it for payment or acceptance.' But the law makes the notary his agent for the purpose of presenting the bill, and doing whatever the holder is bound to do to fix the liability of the indorser. Every thing, therefore, that he does in the performance of his duty must appear distinctly in his protest. He is the officer of a foreign government; the proceeding is ex parte; and the evidence contained in the pro- test is credited in all foreign courts.* The evidence contained in the protest must, therefore, stand or fall upon its own merits. It rests upon the same footing with parol evidence; and if it fails to make full proof of due diligence on the part of the plaintiff, it must be rejected. 'Story on Bills, § 361; Hansard v. Robinson, 7 Barn. & Cressw., 90. ^ Story on Bills, 302, note. 'Story on Bills, § 360. • Chitty on Bills, 215; Rogers v. Stephens, 2 T. R., 713; Brough V. Parkings, 2 Ld. Raym., 993; Orr v. Maginnis, 7 East, 359; Chesmer v. Noyes, 4 Camp., 129. j:;- MUSSON V. LAKE. [CHAP. 12, But the counsel for the plaintiffs insists, that the statute of Louisiana, and the interpretation given to it by the Supreme Court of that state in the case of Nott's Executor v. Beard,' have so changed the law merchant, as to render unnecessary the presentment of a foreign bill for payment. After a care- ful examination of the opinion of the court in that case, we are unable to perceive any intention manifested to depart from the settled usages of the law merchant; but, on the con- trary, they attempt by argument and authority to bring the case within that law. The question before that court was the identical question now before us. The protest was objected to because it did not show that the bill had been presented by the notary to the acceptors for payment. To this objection, that court said it might perhaps have been more specific if in the protest it had been stated that the bill was presented, and payment thereof demanded. And they admit the law is well settled, that, before the holder of an accepted bill can call on the drawer for payment, he must make a presentment for, or demand of, payment, and give notice of the refusal. Here, then, is a definite proposition, asserting that a presentment for payment and a demand of payment are convertabie terms, and that the proof of either would be sufficient. To support this proposition, they refer to Chitty on Bills, and Bayley on Bills, and the annotations on them. And as further proof and illustration, and to show that doiiand of payment should be preferred to prcseiitiiicnt for payment, they refer to the statute of Louisiana, passed in 1S27, in which they say the word dcnia)id is used in it, and that the word prcsciitiiiciit is not; and they refer to the statute, also, to show that notaries were vested with certain powers by it, which gave authority to their acts, and that they being public officers, the presumption of law is, that they do their duty; and therefore, if the protest were defective, and liable to the objection urged against it, this presumption of law would cover all such defects. This is substituting presumption for proof, in violation of all the rules of evidence. With all due respect for that distinguished tribunal, we are constrained to dissent from the general proposition they ' 16 Louisiana, 308. SEC. 52. J MUSSON V. LAKE, 353 have laid down on the subject of demand and presentment, and from all their reasoning in support of it. Due diligence is a question of law; and we think we have shown, by abun- dant authority, that the holder of an accepted bill, to fix the liability of the drawer or indorser, must present it to the ac- ceptor and demand payment thereof. It may be well here to repeat what Ld. Tenterden, C. J., said on this subject, in delivering the judgment of the Court of King's Bench, in the case of Hansard v. Robinson, before referred to. He said, — ' ' The general rule of the English law does not allow a suit by the. assignee of a chose in action. The custom of merchants, considered as part of the law, furnishes in this case an excep- tion to the general rule. What, then, is the custom in this respect.? It is, that the holder of the bill shall present the in- strument, at its maturity, to the acceptor, demand payment of its amount, and, upon receipt of the money, deliver up the bill. The acceptor paying the bill has a right to the posses- sion of the instrument for his own security, and as his voucher, and discharge pro tanto, in his account with the drawer. If, upon an offer of payment, the holder should refuse to deliver up the bill, can it be doubted that the acceptor might retract his offer, or retain his money.?" This extract, we think, fur- nishes a full answer to all that has been said by the Supreme Court of Louisiana to prove that it is not necessary to present the bill to the acceptor for payment; and to the presumption of law relied on to cure the defects in the protest. But to show, that, by the statute of Louisiana, the pre- sentment of a bill to the acceptor for payment is not dispensed with, and that the presentment is, by a fair construction of the act, as much within its true intent and meaning as the de- mand, we proceed to examine its provisions. The principal object of the legislature in passing this statute seems to have been, to give authority to notaries to give notices, in all cases of protested bills and promissory notes; and to make their certificates evidence of such notices. And, therefore, all that is said on the subject of the demand and the manner of mak- ing it, and the other circumstances attending it, was not in- tended as a new enactment on these subjects, but as induce- ment to the powers conferred on the notary, which was the 354 MUSSON V. LAKE. [CHAP. 12, principal object of the statute, as will appear, we think, by reading it. That part of it which relates to this subject is in these words: "That all notaries, and persons acting as such, are authorized, in their protests of bills of exchange, promis- sory notes, and orders for the payment of money, to make mention of the demand made upon the drawee, acceptor, or person on whom such order or bill of exchange is drawn or given, and of the manner and circumstances of such demand; and by certificate, added to such protest, to state the manlier in which any notices of protest to drawers, indorsers, or other persons interested were served or forwarded; and whenever they shall have so done, a certified copy of such protest and certificate shall be evidence of all the notices therein stated." It seems to have been taken for granted by the legisla- ture, that the notaries knew how to make out a protest, and therefore they did not prescribe the form, but gave the sub- stance of it, to which the notary was required to add a certifi- cate of the manner in which he had given notices, and when done, according to the statute, a certified copy of the protest and certificate should be evidence, not of the demand and manner and circumstances of the demand, but of the notice only. This shows that the intention of the legislature, in passing this part of the statute, was merely to authorize the notaries to give notices, and to make the copy of the protest, and the certificate added to it, evidence of notice in the courts of Louisiana. But independent of this view of the subject, we think the language employed in this statute includes the presentment of the bill for payment, and for all other pur- poses, as fully as it does the demand of payment. In giving construction to the act, the phrase, "and of the manner and circumstances of such demand," cannot be rejected, but must receive a fair interpretation. When taken in connection with other parts of the statute, what do these words mean .' The manner of making a demand of payment, we have seen, is by presenting the bill to the drawee or acceptor; and so im- portant is this part of the proceeding, that the omission to present the bill to the acceptor will justify his refusal to pay it, although payment be demanded. The legislature cannot SEC. 52.] MUSSON V. LAKE. 355 be presumed to have intended to make so important a change in the law merchant as that ascribed to them by the counsel for the plaintiffs, without at the same time providing some other mode of obtaining the acceptance and payment of bills of exchange, and of holding drawers and indorsers to their liabilities. It is but reasonable, therefore, to give the phrase before referred to such construction, if practicable, as will leave the law merchant as it stood before the passage of the statute, and carry into effect the main intention of the legisla- ture. This, we think, may fairly be done without doing any violence to the intention or the language of the statute. The manner of the demand must, therefore, mean the presentment of the bill for either acceptance or payment; and the circumstances of the demand, we think, means the place where the presentment and demand is made, and the person to whom or of whom it is made, and the answer made by such person. It is very clear, that bills payable at sight, and after sight, are within the meaning of the statute; because it provides for a demand of payment of the acceptor of a bill. Now how can there be an acceptance of a bill, without a pre- sentment for acceptance .? Until the bill becomes due, pay- ment cannot be demanded of the drawee. This shows, that without the word presentment and the word demand also, the plain meaning of the statute could not be carried into effect. A bill, payable at a fixed period after its date, need not be presented for acceptance; it is sufficient to present it and de- mand payment when it arrives at maturity ; but a bill pay- able at sight, or after sight, can never become due until after it has been presented for acceptance or payment. How is the holder or the notary to obtain the acceptance of such a bill, under the decision of the Supreme Court of Louisiana.? Will it be sufficient to demand payment of the bill.? That would be a nugatory act, because it is not due, then it must be ad- mitted, that, by fair and necessary construction, the word presentment is within the plain meaning and intention of the statute, and that the bill may be presented for acceptance or for payment, and therefore neither the statute nor the decis- ion of the Supreme Court of Louisiana has changed the law merchant in any of these respects. 356 MUSSON V. LAKE. [CHAP. 12, The Laws of What Place Control the Liability of Parties to Negotiable Contracts. — There is, however, an- other question, entirely independent of the statute and the decision of the Supreme Court of Louisiana, which may be decisive of the case before this court; and that question is, Whether the contract between the holder and indorser of the bill in controversy is to be governed by the laws of Louisiana, where the bill was payable, or by the laws of Mississippi, where it was drawn and indorsed. The place where the con- tract is to be performed is to govern the liabilities of the person who has undertaken to perforin it. The acceptors resided at New Orleans; they became parties to the bill by accepting it there. So far, therefore, as their liabilities were concerned, they were governed by the laws of Louisiana. But the drawers and indorsers resided in Mississippi; the bill was drawn and indorsed there; and their liabilities, if any, accrued there. The undertaking of the defendant was, as before stated, that the drawers should pay the bill; and that if the holder, after using due diligence, failed to obtain pay- ment from them, he would pay it, with interest and damages. This part of the contract was, by the agreement of the par- ties, to be performed in Mississippi, where the suit was brought, and is now depending. The construction of the contract, and the diligence necessary to be used by the plaintiffs to entitle them to a recovery, must, therefore, be governed by the laws of the latter state.' Whatever, therefore, may have been the intention of the legislature in passing the statute, and of the Supreme Court of Louisiana in the decision of the case referred to, neither can affect, in the slightest degree, the case before us. In Missis- sippi the custom of merchants has been adopted as part of the common law: and by that law and their statute law, this case 'Story on Bills, § 366; 4 Peters, 123; 2 Kent's Comm., 459; 13 Mass. R., 4; 12 Wend. R., 439; Story on Bills, § 76; 4 Johns. R., 119; 12 Johns. R., 142; 5 East, 124; 3 Mass., R., 81; 3 Cowen, 154; I Cowen, 107; 5 Cranch, 298. See also Daniel on Negotiable Paper, Sec. 1265; 28 N. E. Rep., 515; 81 N. Y., 571; 57 N. W. Rep., 865; 91 Ind., 440; 22 la., 194; 46 N. H., 300; 25 Ohio St., 413; 55 Minn., 259; 47 la., 477; Story on the Con- flict of Laws, Sees. 242, 280, 281; 39 Ohio St., 63. SEC. 52. J MUSSON V. LAKE. 357 must be governed. We think, therefore, the protest offered by the plaintiff, as evidence to the jury, ought not to have been received as evidence of presentment of the bill to the ac- ceptors for payment, nor as evidence of the dishonor of the bill; which is ordered to be certified to the Circuit Court ac- cordingly. Mr. Justice McLean said, " I think the protest was evi- dence. The notary made demand of payment, at the matur- ity of the bill, and we know that he had possession of the bill, from the fact of the protest being made on the same day. Now as the notary could not make a legal demand in the ab- sence of the bill, the fair, if not the necessary, inference is, that he had possession of the bill when he demanded pay- ment." Mr. Justice Woodbury said, " I regret being compelled to dissent from a portion of the opinion of the majority of the court which has just been pronounced. This I should be con- tent to do without explanation, if the grounds for it did not appear to be misunderstood. I do not question that a note should be present usually when payment is demanded; ' and that a written protest is the proper evidence to show a pre- sentment or demand in the case of a foreign bill of exchange.^ But, in my view, a protest like this was competent evidence to be submitted to the jury, in order that they might infer from it that the note was presented when the demand was. made. That was the point presented by the division of opin- ion between the judges in the court below. One held it was- competent evidence from which to make such an inference, and the other, it was not; and we are merely to decide which, was right. The question of due presentment and demand is a mixed: one of law and fact, and not one of mere law, unless all the- facts are first conceded or agreed.' This is an analogy of the rule about notice.* In all cases where it is possible for the ' Freeman V. Boynton, 7 Mass. R., 483; 17 Mass. R., 449; j Metcalf, 495. ^ ?, Wheat., 333; Burke V. McKay, 2 Howard, 71. 'United States v. J. Barker, i Paine's C. C. R., 156. *i Peters, 583. 358 MUSSON V. LAKE. [chap. 12, jury on any reasonable hypothesis to infer a proper present- ment from the protest offered, it is safer that the writing should not be withdrawn from them, but go in, and the court instruct the jury on the whole evidence what the law was on such facts as they might be satisfied of. Chancellor Kent ' thinks it very difficult, in these mixed questions of law and fact about com- mercial paper, to do justice by any other course. In this case the jury might or might not be satisfied of the fact of the bill being present when the demand was made. But why not let them pass on that fact.' It is manifest that no evil or danger would result from leaving the matter to them, under due in- structions from the court, provided there be no legal obstacle to such a course. It is conceded, on both sides, that the protest is compe- tent evidence, and contains enough from which the jury could infer a demand of payment. That is the most material part of the notary's duty. It is not only so described in some ele- mentary treatises, but the duty of having the note present, or of calling with it at the hours of business alone, are not des- cribed separately; but are involved or implied in the general duty of making a demand. Thus Dane, in his Abridgment, Bills of Exchange,^ says, — " In making a protest, three things are to be done, — the noting," demanding, and drawing up the protest." " The material part is the making of the demand." So the word demand is at times used as synonymous with the ■^oxA presentment by Bailey,* But the protest in this case states not only a demand, but that payment of the bill was refused, and he had it in posses- sion, so as to make a copy " of the original draft," on the back of the protest, or, to use his own words, " whereof a true copy is on the reverse hereof written," and also " demanded ' 3 Comm., 107. -Art. II, § I. ''The "noting" is simply the making of a memorandum of what the notary did so that he may subsequently have the facts upon which the certificate may be made. This should be done on the day the demand and presentment are made. The certificate of protest may be made at any time. Dennistown v. Stewart, 17 How., 606. *i6 Louisiana Rep., 311. SEC. 52. J MUSSON V. LAKE. 355 payment of said draft," and was answered, "that the same could not be paid." Under these expressions, it could hardly be deemed un- fair, or any stretch of probabihty, to infer that the bill was present at the demand, and the more especially as the notary knew it was his duty to have it present, and does not state that any objection was made, or refusal to pay, on account of its absence, as he should have stated, if such was the truth. My views do not differ from those of a majority of this court concerning the importance of having the principles as to com- mercial law, and especially commercial instruments, uniform, and as little fluctuating as possible; and hence as to them I would make no innovation here. But our difference is rather on a question of evidence. Thus, had the testimony offered been submitted to the jury, and they had inferred from it a due presentment of the note, it would not change any com- mercial principle as to the necessity of presentment, but merely establish the fact of presentment here on evidence deemed by the jury to render that fact probable. And if juries should be disposed to find such a fact on slight testi- mony, it would do no injury to commercial paper, or commer- cial principles, or substantial justice between parties, but merely indicate an increased liberality as to forms, where sub- stance has been regarded; that is, where the vital point in the transaction is beyond controversy, namely, that payment has clearly been demanded and not made. Such a course would accord, also, in spirit, with what was laid down by this court in 1 Peters, 583, that rules as to commercial paper ought to be formed and construed so as to be reasonable and founded in general convenience and with a view to clog as little as pos- sible, consistently with the safety of parties, the circulation of paper of this description. There is nothing in the nature of protests and present- ments which on principle requires any increased strictness in the proof of them, but, on the contrary, much to justify every reasonable presumption in their favor. Any holder would be anxious to get his money at once of the drawee, and not neg- lect to have the note with him so as to give it up on pay- ment and prevent delay. So would he wish to be paid and 360 MUSSON V. LAKE. [CHAP. 12, excused entirely from making protest, rather than resort to that and notice, and suffer the delay of recovering it of a drawer or indorser. Both of these considerations strengthen the inference that he and his agent would present the note, or have it with them, when demanding payment, and render it reasonable, after slight proof of presentment, to leave it to the opposite party to rebut that inference, so natural, by stronger proof that the note was not present, if the facts would warrant such proof. Another consideration against requiring great or greater rigidity in the evidence of a presentment and form of protest is the fact, that a protest is of less materiality than notice. As an illustration, that the notice is deemed more mater- ial than the protest, "omitting to allege in the declaration a protest of a bill is only form, not to be taken advantage of on a general demurrer.'" But, omitting to state a demand or notice is bad after verdict.^ Dane, in his Abridgment,' says, — "Notice is very mater- ial. Protests are mere matter of form." Yet notice may be very loose, and it answers in all cases, if it disclose merely the fact of demand, and a reliance on the person notified for pay- ment.'' "The notice, however, should inform the party to whom it is addressed, either in express terms or by necessary impli- cation, or, at all events, by reasonable intendment, what the bill or note is, that it has become due, that it has been duly presented to the drawer or maker, and that payment has been refused."^ But it has again and again been held, that the notice need not state a presentment in express terms, and that it will 'i Dane's Abr., Bills of Exchange, eh. 20, art. 11, § 9; Lill. Ent., 55; 3 Johns. R., 202; Solomons v. Staveley, Doug., 684, in note to Rushton v. Aspinall. 'Doug., 684. ^Vol. I, p. 395, ch. 20, art. 10, § i. *Shed V. Brett, i Pick., 401; Miliary. Bank of United States, II Wheat., 431; Gilbert v. Dennis, 3 Mete, 495; 2 Johns. Ch. R., 337; 12 Mass. R., 6; 4 Wash. C. C. Rep., 464. ^Chitty on Bills (9th Lond. & loth Amer. edit.), 469. SEC. 52. J MUSSON V. LAKE. 361 be implied from stating a demand and non-payment, and a looking to the indorser.' So, "Your note has been returned dishonored," is enough from which to intend all.'' It may be a letter, — merely to that effect, — and need not be a copy of the protest.^ And it has been adjudged, that the notice need not state, in express terms, that the note was present, or if present was exhibited, if it only contained mat- ter from which, by reasonable intendment, this can be in- ferred.* It not being necessary, then, to inform the indorser of the presentment of the note itself, in so many words, there seems to be no use in having the fact stated at length in the protest, if enough appear to render the fact probable. It would be difficult to find a reason, in the absence of positive law, why the form of the protest should not be dealt by as liberally as that of notice; and if, like the other, it dis- close a demand, allow the jury to infer from that, as in the case of notice, that the note was present. Indeed, a protest is not required to be in writing at all except in case of foreign bills, drawn on persons abroad.* The Purpose of a Protest.— ^«^ then it doubtless orig- inated 171 a rule merely allowing it to be done to save the expense and trouble of bringing a witness from, abroad to prove the fact, rather than making it imperative. Instead of a written protest being better evidence than a witness of the presentment and demand in case of inland bills or promissory notes, or even foreign bills drawn on persons here, it is inferior evidence to witnesses for proving present- '9 Peters, 33; 3 Kent's Comm., 108; 10 Mass. R., i; 4 Mason, 336; I Johns. Cas., 107. ^See various other illustrations, 6 Adolph. & Ellis, 499; 5 DowL, 771; 2 Chit. R., 364; 2 Macs. & Welsh., 109. " I Chit. (2d Eng. & ist Amer. edit.), 363, 364, 498, 499; 3 Camp. R., 334; 2 Starkie, 232; Goodwin v. Harley, 4 Adolph. & Ellis, 520, 870; 4 Eq. R., 48. See 8 Mass. R., 386. *Chitty on Bills (last edit.), 469; 2 Peters, 254; g Peters, 33. * Chitty on Bills, 643; Rogers v. Stevens, 2 D. & E., 713; 2 Starkey on Ev., 232; 6 Wheat., 572; 8 Wheat, 333; 3 Wend., 173; 2 Peters, 179; i Cranch, 205. 362 MUSSON V. LAKE. [chap. 12, merit and demand, and is usually inadmissible, except by special statutes.' Some seem to suppose that there is danger in allowing an informal written protest to go to the jury as evidence to be weighed in proving that the note was present. But there can be no more in that than allowing an informal notice to go to the jury. The jury must be satisfied, in both cases, and should so be instructed, that all has been done which the law in both requires. If there be any defense in either case, that all proper has not been done, it can probably be shown by counter evidence in one as well as the other. Why should it not be.' and why is not that an ample security against being improperly charged.? For the protest is not a written contract between the parties, or a sealed instrument not open to be contradicted by parol evidence. But it is a mere certificate of a notary, a subordinate officer, admitted for convenience as prima facie evidence of certain facts, and allowed to that extent in order to save the expense of witnesses and delays, but ought to be always open to be impaired or disproved by the other party in interest, who has never been heard before him, and of course cannot reasonably be concluded forever by his acts. The notary is not required to swear to them, when they are admissible as evidence, as he would be to a deposition, because of his official obligations and standing. But the character and construction that properly belong to his certificate as evidence seem to be like those of a deposi- tion; and if it states, in so many words, that the note was presented, or states what justifies such an inference, there appears to be no good reason why the contrary may not be proved, if such was the fact, and the indorser be thus pro- tected against statements or inferences not well founded. And the absurdity of the contrary course is still more apparent as to protests, when one made by any respectable merchant, and attested by two witnesses, in the absence of a notary, has the same validity as his.'' 'i Chitty on Bills, 405; 3 Pick., 415; 6 Wheat., 572; 5 Johns. R-) 375; 4 Wash. C. C. Rep., 148; 4 Camp. R., 129; 2 Howard's U. S., Rep., 71; 8 Wheat, 146. ^Chitty on Bills, 303; Story on Bills, §276. SEC. 5 2. J MUSSON V. LAKE. 363 In Nicholls v. Webb,' counter testimony was held to be admissible against the minutes of a notary offered to prove demand and notice. So it is admissible to show that the notary mistook the place, and did not demand the bill at the place of business of the drawee.^ In Vandewall v. Tyrrell,'* counter evidence was offered, and avoided the protest, because the clerk of the notary, and not the notary himself, as stated in the protest, made the demand.^ This point thus being established on both principle and precedent, all the danger or difficulty as to the merits of the case, by admitting a protest like this, is obviated. But it is further urged against it, that presentment is averred in the declaration, and therefore must be proved. This we admit. And so is notice averred in the declaration and notice of a presentment, and so that it must be proved." All we urge here is to let them be proved by similar general statements, from which the similar inferences may be drawn in one case as the other, that the note was present at the time of the de- mand, unless the contrary is shown, — as it may be, if true. Again, it is said that the forms of protest generally state, that the bill was present or exhibited. This is true.' But we are aware of no case deciding that this fact must be stated, in so many words, in the protest itself, though we admit that the jury must be satisfied that the fact existed. Minutes in the book of a messenger deceased have been held to be proof to be submitted to a jury as evidence of due de- mand and notice.* Yet there does not appear to have been a presentment stated, eo nomine, or that there was any but '8 Wheat., 336. '■'Insurance Company v. Shamburg, 2 Martin's R. (N. S. ), 513. 'Mood. & Malk , 87. *See Chitty on Bills, 495, note. ^Chitty on Bills, 643-647. «i Chit., 633; Doug., 654, 680. ' I Chitty, 395, 396 (ist Amer. edit.); Story on Bills of Ex- change, § 276, note. 'Welsh V. Barrett, 15 Mass. R., 380. 364 MUSSON V. LAKE. [CHAP. 12, inferential evidence that he had the note with him.' And it is not a Httle remarkable, that the only statute in England/ which prescribes the form of a protest, and which is in rela- tion to inland bills of five pounds and upwards, in order to recover damages and interest, the form does not state in so many words that the bill was present or was exhibited, but merely "at the usual place of abode of the said A. have de- manded payment of the bill," etc* In such cases, precisely that, and that alone, must be done which is contended for here, namely, leave it to the jury to infer the presence of the bill from its payment being demanded, and any other facts stated, unless the contrary is shown. Look at another anal- ogy. It is necessary that the exhibit of the note and the de- mand be made in the legal hours of business.* But, as in respect to the presence of the note, no case holds that this must appear by so many words in the protest. And it is not stated, in the common forms, that the demand was made in the usual hours of business. '' On the contrary, the jury are allowed or instructed that they may infer, from the statement of the demand and non-payment, that they were made within the proper hours. And if it was not, the other party would doubtless be allowed to disprove it by counter evidence. How can such a case, then, be distinguished in principle from this.? — except that there is much less in the usual form of protest from which to infer that the bill was presented in legal hours, than there is in this protest from which to infer that the bill was present when the demand was made. I am the more inclined, also, to the opinion, that this protest is competent evidence, because, under a special law in Louis- iana, passed March 13th, 1827, such protests have been ad- judged sufficient. Their law uses the word " deraand " when describing what the protest shall contain, and such a protest 'See, also. North Bank v. Abbott, 13 Pick., 469. ^9 and 10 Will., 3. ^'Chitty on Bills, 465 (9th ed. ). *Chitty on Bills, 349, 354; Reuben v. Bennet, 2 Taunt., 388; 2 Camp,, 537; Parker v. Gordon, 7 East, 385; i Maul. & Selw., 20. "i Chitty on Bills, 396. SEC. 52.] MUSSON V. LAKE. 365 is there allowed to go to the jury as evidence from which to infer that the note was present.' The bill now in dispute was on its face payable in Louis- iana; and hence the principles of commercial law require that the protest be made at the time and in the manner prescribed by that state. ^ But whether the statute of Louisiana prescribing what protest shall be sufficient ought to be considered as affecting anything beyond the evidence of protest in its own courts, is not very clear on principle.^ Hence, in forming an opinion, I have placed it mainly on general considerations, though in the construction of a Louis- iana statute, which clearly affected the contract, and not the evidence; and where the judgment of its court clearly rested on the statute alone, about which some doubt exists, it ought unquestionably to control us in respect to contracts made or to be fulfilled there, even, if a departure from the general principles of commercial law. I wish, also, to avert some ser- ious consequences that I apprehend may result from the deci- sion of the majority of the court in several of the states of the Union. Bills of exchange drawn in one state on persons in an- other must be considered, under the previous decisions of this court, as foreign bills.* Demand of payment, then, cannot be proved in suits upon them out of the state where presented, unless by a written protest, according to the cases before ■cited. Whenever the protest, then, in such case, does not state in detail a presentment or presence of the bill, though stating a demand, refusal, and no objection, the protest must, as in this decision, be ruled out as incompetent evidence; and the same decision virtually implies, that no other evidence except the written protest is admissible to show that fact, or indeed 'Nott's Executor v. Beard, 16 Louisiana R., 308. ^ Story on Bills of Exchange, § 176; i Chitty on Bills, 193, 506; Story's Conflict of Laws, § 369. 'See cases. Story on Bills, § 172. *TownsIey V. Sumrall, 2 Peters, 179, 586, 688; Lonsdale v. Brown, 4 Wash. C. C. R., 87, 153; i Hill, 44; 12 Pick., 283; 15 ■Wend., 527; 5 Johns., 375; Dickins v. Beal, 10 Peters, 579. 366 MUSSON V. LAKE. [CHAP. 12, any fact which may be omitted by accident or otherwise in the written protest, and that no inference can be admitted to be drawn from the protest as to presentment, when only a de- mand, refusal, and no objection are stated, as here. These consequences, with others before named, I would avoid, by making the protest competent evidence, and when it showed a demand, refusal, and no objection explicitly, as here, would leave it to the jury, from that and the other circumstances, to say whether they were or were not satisfied that the note was present. In this way it is easy to reconcile full action of the jury on the facts with that of the court on the law, and this, too, without any innovation or change in the rule as to commer- cial paper, or any violation of adjudged cases, but rather in conformity to them and to several strong analogies. This court have in other cases gone still farther, and held it proper even to expand or enlarge the rules of evidence in certain exigencies. In Nicholls v. Webb,' the principle laid down by Ld. Ellenborough, in Pritt v. Fairclough,' as to the rules of evidence, was adopted, namely, " That they must ex- pand according to the exigencies of society." And in the Bank of Columbia v. Lawrence,' speaking of a rule as to diligence, '8 Wheat., 332. '3 Camp. R., 305. 'i Peters, 583. Protest Defined. — Protest may be defined to be a solemn declaration, written, by a notary public, under a fair copy of the bill, stating that the payment or acceptance has been demanded and refused, the reason, if any, given, and that the bill is, there- fore, protested. Dennistown v. Stewart, 21 Curtis, 722; 17 How- ard, 606; Cayuga, etc. Bk., v. Hunt, 2 Hill (N. Y. ), 635. In What Cases Necessary. — Under the lex mercatoria, it was necessary to protest foreign bills of exchange only; but now by custom of merchants and bankers in many jurisdictions every commercial contract is protested. In Texas, protest and notice is rendered unnecessary by statute if suit is brought against the ac- ceptor or maker before the first term of the court to which srit can be brought after the right of action shall accrue, or at the second such term after, if good cause for the delay can be shown. Pro- test may also be waived by the parties to the contract, in which case, of course, it will not be necessary. Daniel on Neg. Inst., Sees. 926, 928; Wood's Byles on Bills and Notes, 260. When to be Made. — Presentment and demand should be SEC. 52.] MUSSON V. LAKE. 367 Thompson, J., says, — " For the sake of general convenience it has been found necessary to enlarge this rule." But all I ask here is to go as far as the existing rule of made on the day that the contract legally matures, unless they are excused or unless delay is justified. Notice of dishonor, or of protest, may be given as soon as the instrument is dishonored. If the parties reside in the same place it must be given before the close of the next day; if payable at a place of business, then before the close of business hours; if pay- able generally, then before the usual hours of rest of the next day. If, however, the parties reside at different places and notice must be sent by mail, then it must be deposited in the post-office in time for the first out-going mail, unless that it is at an unusually early hour. Lawson v. Farmer's Bank, i Ohio St., 206; Illustrative Cases, 203, and note. If where the parties reside at different places and notice is sent otherwise than by mail, then it must be sent at a time which will insure its receipt at the same time it would have been received if sent through the mails. Smith v. Poillon, 23 Hun., 632; Howard v. Ives, i Hill, 263. If the requirements of presentment, demand, and notice of dishonor have been complied with properly, the certificate may be made at any time before an action is brought. Where Made. — Protest must be made according to the law of the place of dishonor, or the place where the bill is made pay- able. Chitty on Bills, 456; Geralupolo v. Wieler, 10 C. B., 690; Mitchell V. Baring, 10 C. B., 4; 4 C. & P., 35; Carter v. Union Bank, 7 Hum., 548. By ^A^hGm Made. — Protest should be made by a notary pub- lic. It may, however, be made by any respectable resident of the place where the bill is dishonored or is payable. In the latter case the presentment and demand should be attested by two witnesses. Daniel on Negotiable Instruments, Sec. 934a, Onondaga County Bank v. Bates, 3 Hill, 53; Wood's Byles on Bills and Notes, 394; Tiedeman on Commercial Paper, 322; Chitty on Bills, 303; Story on Bills, 276. The clerk or deputy of a notary cannot protest un- less authorized by statute. Chitty on Bills, 495, and note. What the Certificate Must Show. — The certificate of pro- test must set forth: 1. A copy of the contract or a fair description of it; 2. The fact of presentment for acceptance or payment; 3. The time and place of presentment and demand; 4. The fact of dishonor with the reason therefor; 5. The fact of protest; 6. That notice of dishonor had been sent or given, together with the time of such notice; 7. The signature of the notary; 8. The seal of the notary. Dennistown v. Stewart, 21 Cur- tis, 722; 17 Howard, 606; Clough v. Holden, 115 Mo., 336; Tiede- 368 MUSSEN V. LAKE. _ [CHAP. 12, evidence seem to justify, and let reasonable inferences and presumptions be made by the jury from all that is stated in man on Com. Paper, Sec. 317; Daniel on Nag. Inst., 600; Suls- bacher V. Bank, 86 Tenn., 201; Cox v. Bank, 100 U. S., 716; Wood River Bk., v. First Nat. Bk., 36 Neb., 744. The Form of the Certificate of Protest. — The following is a common form of the certificate of protest: — State of Michigan, ) - ss County of Washtenaw, j Be it Known, That on the first day of September, in the year of our Lord one thousand eight hundred and ninety-eight, at the request of John Doe, I, Joseph H. Vance, a Notary Public, duly commissioned and sworn, residing in the city of Ann Arbor, County and State aforesaid, did present the original promissory (or bill of exchange) which is hereto attached, Richard Roe or fat the place of business of Richard Roe, naming it], and demanded payment (or acceptance) thereof, which was refused. Whereupon, I, the said Notary, at the request aforesaid, did Protest, and by these presents do solemnly protest, as well against the Drawers, Makers and Endorsers of the said promissory note (or bill of exchange) as against all others whom it doth or may concern for exchange, re-exchange, and all costs, charges, dam- ages and interest already incurred and to be incurred by reason of the non-payment (or non-acceptance) of the said promissory note (or bill of exchange.) And I, the said Notary, do hereby certify, that, on the same day and year aforesaid, due notice that said promissory note (or bill of exchange) had thus been presented for payment (or accep- tance) and that payment (or acceptance) thereof had been thus ^demanded and refused, and that the holders of the said promissory note (or bill of exchange) did and would look to the drawers, mak- ers and endorsers thereof for payment of the same, were put into the Post Office at Ann Arbor, Michigan, with the full legal postage paid thereon, and directed as follows, after diligent inquiry being made for the residence and place of business of the drawers and indorsers: Notice for John Smith, directed 1015 Main Street, Detroit, Michigan. Notice for Henry Jones, directed 150 Washington Street, Chi- cago, Illinois. Each of the above named places being the reputed place of residence or business of the person to whom the notice was di- rected. In Witness Whereof, I have hereunto subscribed my name and affixed my seal of office. L. S. JOSEPH H. VANCE, Notary Public in and for Washtenaw Co., Michigan. SEC. 52. J MUSSEN V. LAKE. 369 the protest, and thus decide whether the note was not prob- ably present when the demand was made. The Form of the Notice of Protest. —The following is the usual form of the "notice of protest": — Ann Arbor, Mich., Sept. ist, 1898. Take Notice, that the promissory note for one thousand dol- lars, made by Richard Roe, dated July 29th, 1898, payable one month after date at Ann Arbor, Michigan, and endorsed by you, has this day been presented to the said Richard Roe and demand made for payment thereof, which has been refused; said promissory note has been duly protested for non-payment and the holders now look to you for payment of the same. Yours, &c., JOSEPH H. VANCE, Notary Public in and for Washtenaw County, Michigan. Protest Dispensed With — When. — Protest may be ex- cused or delayed whenever or under circumstances which would excuse or dispense with notice of dishonor. It will be excused, when prevented by circumstances beyond the control of the holder and not attributable to his negligence or misconduct. For in- stance, when the party to whom presentment is to be made is quar- antined or dead. But when the excuse or cause for delay has been removed, then the protest must be made with reasonable dili- gence. Daniel on Negotiable Instruments, 730; Hull v. Meyers, 90 Ga., 674; Legg v. Thorpe, 12 East, i7r. Protest for Better Security. — In case the drawee or accep- tor becomes bankrupt or makes an assignment for the benefit of creditors before the maturity of the bill, then the holder may cause the bill to be protested for better security against those whose liability is conditional. Daniel on Neg. Inst, Sec. 530. CHAPTER XIII. Presentment and Demand. SECTION 53. IN AN ACTION BY AN INDORSEE VERSUS AN INDORSER, THE FORMER MUST SHOW PRESENTMENT AND DE- MAND, OR DUE DILIGENCE TO GET THE MONEY, AT THE MATURITY, FROM THE PERSON WHO IS PRIMAR- ILY LIABLE UPON THE CONTRACT. HEYLVN .. ADAMSON.i In the Court of King's Bench, Nov. 20th, 1758. [Reported in 2 Burrows , 66g. J The Form of the Action. — This was an action on the case, upon promises. And the first count in the declaration was upon an inland bill of exchange, drawn by Robert Carrick and directed to William Dods, dated the 13th day of March, 1756; whereby the said Robert Carrick required the said Wil- liam Dods to pay to the defendant or his order 100/. at 40 days after date, value received, as advised by the said Robert Carrick: which said bill was indorsed by the said defendant to the said plaintiffs, and was accepted by the said Dods, but not paid by him. Upon the trial of this cause, before Ld. Mansfield, at the sittings after the last Hilary term at Guildhall, it was proved on the part of the plaintiffs, that the said Robert Carrick made the bill; and that the defendant indorsed it to tlie plain- tiffs ; and that the said William Dods accepted it, but after- wards refused payment; and that the plaintiffs thereupon, on the day it became payable, carried it to be protested for the 'This case is cited in Daniel on Negotiable Instruments, 669a; Norton on Bills and Notes, 155, 325, 326; Story on Bills of Ex- change, 204, 381; Chitty on Bills, 520, 653, 241, 304, 339, 354, 368, 497, 521; Tiedeman on Commercial Paper, 259. SEC. 53. J HEYLYN V. ADAMSON. 37I non-payment; and soon afterwards brought their action thereon, against the defendant; but it did not appear, on the trial, that the drawer of the bill had any notice of such non- payment; or that any demand of the m.oney was ever made on him before the commencement of the suit. It was thereupon objected by the defendant's counsel, "That the action would not lie against the defendant (the in- dorser) until a demand of payment had been made upon the drawer: " and as no such demand was proved to have been made on the drawer, the plaintiffs ought therefore to be non- suited. Ld. Mansfield directed a verdict to be given upon the said first count, for the plaintiffs, for lOo/. damages and 40 shillings costs; subject to the opinion of the court, "Whether, upon this case, the plaintiffs were entitled to recover." The only question was. Whether, in an action brought upon an inland bill of exchange, by the indorsee against an indorser, this objection, "that no evidence was given at the trial, of notice [that the bill had been dishonored] to the drawer of the bill, or even of making any inquiry after him," was a ground of non-suit.'' The Claim of the Plaintiff. — The plaintiff made a dis- tinction between inland bills of exchange, and notes of hand [promissory notes]. In the latter, the drawer is to be the payer: in the former, the drawee (the acceptor of the bill) is to pay it. So that upon a note of hand, the drawer [the maker] of the note is the first person to be resorted to, for payment: but upon an inland bill of exchange, the acceptor of the bill, not the drawer, is the first person to be resorted to, for payment; (though the drawer shall indeed stand as a col- lateral security for his so doing). Therefore cases upon promissory notes are not applicable to cases on inland bills of exchange. The bill holder can't come upon the drawer of the bill, till the person upon whom it is drawn shall either refuse to accept it, or refuse payment after he has once accepted it. Every indorsement of a bill of exchange is in the nature of a new bill of exchange: and if there are several indorsers, they all undertake "that the drawee (the acceptor of the bill) shall pay it." 372 HEYLYN V. ADAMSON. [CHAP. ITjr The indorsee is a stranger to the drawer of a bill of ex- change: he is only concerned with the acceptor. A bill of exchange may happen not to be dated from any certain place; or it may be dated from a place where the drawer does not reside; as where a traveler, calling at an inn, takes up money there, and gives a bill which is afterwards in- dorsed by his landlord. And it would be vastly inconvenient to all the parties, if it should be holden necessary for the indorsee to find out or even search for the drawer of an inland bill of exchange, to give him notice "that the acceptor has refused payment." For, the security may be lost, in the interim, whilst such search is making; the indorser may break, before the indorsee may be able to find the drawer. But the indorser may know where to find him, or how to apply to him. Six Chief Justices have been of different opinions on this point: three of them, of one opinion: three, of another. The 9 & lo W., 3 c. , 17, was the first act that gives pro- tests for non-payment of inland bills of exchange: and the 3 & 4 Ann. c. , 9, § 4, 5, extends the protest, to the case of non- acceptance. The words of both these acts are remarkable, viz.: "That the protest shall be notified to the party from whom the bill was received; who shall repay the same with interest and charges. " The inconvenience may be the same (as to this matter) upon an inland bill, as upon a foreign bill. Yet upon a foreign bill, it certainly is not necessary. These opinions seem to relate only to notes of hand; but upon a bill of exchange, the indorsers are all only promisors and undertakers for the payer (the acceptor) of the bill; and are not obliged to look after the original drawer. And fact and experience in business are agreeable to this position. The Claim of the Defendant.— The defendant insisted that upon an action brought by the indorsee against an in- dorser of an inland bill of exchange, the plaintiff ought, at the trial, to prove notice to and demand of payment from the drawer of the bill. The indorser is only a conditional undertaker for the drawer of the bill, who is the first contractor: he stands as a SEC. S3.] HEYLYN V. ADAMSON. 373 surety only, and cannot be called upon; unless the drawer makes default. It is like the case of principal and accessory; where the accessory cannot be tried before the principal: so here the indorser cannot be liable till the original contractor has failed in performing his contract. And great inconveniences might follow, if this was other- wise. There are several authorities which fully prove that it is necessary.' Upon an action against the indorser of a prom- issory note, at Guildhall, C. B. Ld. Ch., J. Eyre's opinion was accordingly, ' ' That the plaintiff must prove diligence to get the money of the drawer; the indorser only warranting on his default. " And for want of such proof, he directed the jury to find for the defendant. Collins v. Butler, at Guildhall, per Lee, Ch. J. It was ruled accordingly; who cited a case determined on great debate. Due dihgence must be shown to have been used in inquiring after the drawer of the bill of ex- change, before the money can be recovered against the indorser. And there is no difference between a note of hand, and a bill of exchange; other than that the drawer of the note is the express promisor, and (as it were) both drawer and drawee; whereas on a bill of exchange, he is only an implied promisor. Indeed on a foreign bill of exchange this notice and demand is not necessary; because the foreign drawer is not amenable to justice here. As to the words of the statutes they do not exclude the- necessity of giving notice to the drawer; though they add an additional caution, ' ' of giving notice to the person from whom-, the bill was received." The Reply of the Plaintiff. — Mr, Serjeant's case, wherein; mention is made of the six Chief Justices differing in opinion, seems to be taken from the 3d volume of the Abridgement of the Law.^ 'Cases in B. R. Temp. W., 3, 244, Lambert v. Oakes, at Guildhall; and i Ld. Raym., 443; Lambert v. Oakes, S. C, is directly in point, i Salk., 126 pi. 6 Anon, accordingly. Syder- bottom V. Smith, i Strange, 649, M. 12 G. i, 2 Strange, 1087. ^See New Abridgement, vol. 3, title, Merchant and Merchan- dise, p. 608, note b. (which is undoubtedly the same case cited by the Sergeant). 23 2^4 HEYLYN V. ADAMSON. [CHAP. I3, The plaintiff said, ' ' I agree that the drawer of a bill of exchange is only a conditional undertaker for the drawee; and so also is the indorser of a bill of exchange a conditional un- dertaker for the drawee. But it does not follow, that the indorser of a bill of exchange is only a conditional undertaker for the drawer. The case of Lambert v. Oakes was upon a note of hand (according to Ld. Raymond); and Ld. Ch. J. Holt's opinion upon a bill of exchange, was upon a case not before him. In the case of Hamerton v. Mackrell, Ld. Hardwicke' held it not necessary. The drawee's place of abode is always known upon a bill of exchange, but not the drawer's. The court gave no opinion at the time of this argument; but postponed it, in order to settle the point with precision and certainty. Ld. Mansfield observed, That the confusion seemed to have arisen from its not being settled, ' ' who is the original debtor." Mr. justice Denison said, The case of Hamerton v. Mack- rell, was upon a writ of error; and the judgment was affirmed, upon the allegation contained in the declaration, of a promise, made by the indorsee, which (upon a writ of error), they con- sidered as an express promise; but Ld. Hardwicke did not give his own opinion at all, upon what is now the present question. Decision. — Ld. Mansfield said, He could not persuade himself that there had really been such a variety of opinions upon this question, at nisi prius, as had been mentioned at the bar. But however that may be, it must now be deter- mined upon the nature of the transaction, general conven- ience, and the authority of deliberate resolutions in court. A bill of exchange is an order, or command, to the drawee who has, or is supposed to have, effects of the drawer in his hands, to pay. When the drawee has accepted, he is the original debtor; and due diligence must be used in applying 'The Serjeant had been misinformed: for Ld. Hardwicke (as appears by my note of that case) did not give or even intimate his own opinion upon that point. SEC. S3. J HEYLYN V. ADAMSON. 375 to him. The drawer is only liable in default of payment by him, due diligence having been used; and therefore if the acceptor is not called upon within a reasonable time after the bill is payable, and happens to break, the drawer is not liable at all. Every man therefore who takes a bill of exchange, must know where to call upon the drawee; and undertakes to de- mand the money of him. The Liability of Drawer and Indorser, Compared. — When that bill of exchange is indorsed, by the person to whom it was made payable; as between the indorser and in- dorsee, it is a new bill of exchange; and the indorser stands in Xhe place of the drawer ; the. indorsee undertakes to demand the money of the drawee. If he neglects, and the drawee becomes insolvent, the loss falls upon himself. If the indor- see is diligent, and the drawee refuses payment, his imme- diate remedy is against the indorser; and it was very properly observed, that the act of 9, 10 W., 3, requires notice of the protest to be given "to the person from whom the bill was received." He may have another remedy against the first drawer, as assignee to, and standing in the place of the in- dorser. The indorsee does not trust to the credit of the original drawer; he does not know whether such a person exists, or where he lives, or whether his name may have been forged. The indorser is his drawer; and the person to whom he origin- ally trusted, in case the drawee should not pay the money. There is no difference in this respect between foreign and in- land bills of exchange, except as to the degree of inconven- ience: all the arguments from law, and the nature of a tran- saction, are exactly the same in both cases. As to foreign bills of exchange, the question was solemnly determined by this court, upon very satisfactory grounds, in the case of Bromley v. Frazier. ' That was ' ' An action upon the case upon a foreign bill of exchange, by the indorsee against the indorser;" and on general demurrer it was objected, " that they had not shown a demand upon the drawer, in ' I Strange, 441, Tr. 7 G. i B. R. 376 HEYLYN V. ADAMSON. [CHAP. I3, whose default only it is that the indorser warrants." And because "this was a point unsettled, and on which there are contradictory opinions in Salkeld, 131 and 133, the court took time to consider of it. And on second argument, they de- hvered their opinions. That the declaration was well enough: for, the design of the law of merchants in distinguishing these from all other contracts, by making them assignable, was for the convenience of commerce, that they might pass from hand to hand in the way of trade, in the same manner as if they were specie. Now to require a demand upon the drawer, will be laying such a clog upon these bills, as will deter every body from taking them. The drawer lives abroad, perhaps in the Indies, where the indorsee has no correspondent to whom he can send the bill for a demand; or if he could, yet the delay would be so great that nobody would meddle with them. Suppose it was a case of several indorsements, must the last indorsee travel round the world, before he can fix his action upon the man from whom he received the bills .'' In common experience, everybody knows that the more indorsements a bill has, the greater credit it bears: whereas if those demands are all necessary to be made, it must naturally diminish the value, by how much the more difficult it renders the calling in the money. And as to the notion that has pre- vailed, that the indorser warrants only in default of the drawer, there is no color for it; for every indorser is in the na- ture of a new drawer; and at nisi prius, the indorsee is never put to prove the hand of the first drawer, where the action is against an indorser. The requiring a protest ;f or non-accept- ance, is not because a protest amounts to a demand: for it is no more than a giving notice to the drawer to get his effects out of the hands of the drawee, who, (by the other's drawing) is supposed to have sufficient wherewith to satisfy the bill. Upon the whole, they declared themselves to be of opinion " That in the case of a foreign bill of exchange, a demand upon the drawer is not necessary to make a charge upon the indorser; but the indorsee has his liberty to resort to either for the money: consequently the plaintiff (they said) must have judgment." SEC. 53. J HEYLYN V. ADAMSON. 377 Every inconvenience here suggested holds to a great de- gree, and every other argument holds equally, in the case of inland bills of exchange. We are therefore all of opinion, ' ' That to entitle the in- dorsee of an inland bill of exchange to bring an action against the indorser, upon failure of payment of the drawee, it is not necessary to make any demand of, or inquiry after, the first drawer. " Promissory Notes and Bills of Exchange, Campared.— The law is exactly the same, and fully settled upon the analogy of .promissory notes to bills of exchange; which is very clear when the point of resemblance is once fixed. While a promissory note continues in its original shape of a promise from one man to pay to another, it bears no similitude to a bill of exchange. When it is indorsed, the re- semblance begins: for then it is an order by the indorser, upon the maker of the note (his debtor, by the note) to pay to the indorsee. This is the very definition of a bill of ex- change. The indorser is the drawer; the maker of the note is the acceptor; and the indorsee is the person to whom it is made payable. The indorser only undertakes, in case the maker of the note does not pay. The Duty of an Indorsee. — The indorsee is bound to apply to the maker of the note; he takes it upon that con- dition; and therefore must, in all cases, know who he is, and where he lives; and if after the note becomes payable, he is guilty of a neglect, and the maker becomes insolvent, he loses the money and cannot come upon the indorser at all. Therefore, before (ke indorsee of a promissory note brings an action against the indorser, he must show a demand, or due diligence to get the money from the maker of the note; just as the person to whom the bill of exchange is made pay- able must show a demand, or due diligence to get the money from the acceptor, before he brings an action against the drawer. This was determined by the whole Court of Conj- mon Pleas, upon great consideration, in Pasch. , 4G. , 2; as cited by my Ld. Ch. J. Lee in the case of Collins v. Butler.' '2 Strange, 1087, 11 G., 2. 378 HEYLYN V. ADAMSON. [CHAP. I3, So that the rule is exactly the same upon promissory notes, as it is upon bills of exchange; and the confusion has, in part, arisen from the maker of a promissory note being called the drawer; whereas, by comparison to bills of ex- change, the indorser is the drawer. All the authorities, and particularly Ld. Hardwicke, in the case of Hamerton v. Mackrell, M., lo G., 2 (according to my brother Denison's statement of what his Lordship said), ^Vi\. promissory notes and inland bills of exchange ]\isi -a^on the same footing:' and the statute expressly refers to inland bills of exchange/ But the same law must be applied to the same reason; to the substantial resemblance between promissory notes and bills of exchange; and not to the same sound, which is equally used to describe the makers of both. My Ld. Ch. J. Holt is quoted as being of opinion, "That in actions upon bills of exchange, it is necessary to prove a demand upon the drawer." For proof of this, the principal case referred to, is that of Lambert v. Oakes, reported in three books.' In I Ld. Raym., 443, it appears manifestly, that the question arose upon a promissory note. " R. signed a note under his hand, payable to Oakes, or his order; Oakes in- dorsed it to Lambert; upon which, Lambert brought the action for the money against Oakes. Per Holt, Ch. J. He ought to prove that he had demanded or done his endeavor to demand this money of R. before he can sue Oakes upon the indorsement. The same law, if the bill was drawn upon any other person, payable to Oakes or order;" that is, "A de- mand must be made of the person upon whom the bill is drawn." And other parts of the case manifestly show this to have been the meaning. For, my Ld. Ch. J. Holt is reported to have said, "The indorsement will subject the indorser to an action; because it makes a new contract, in case the per- ' My own note of that case is exactly agreeable, viz.: "Prom- issory notes seem to me to be put upon the same footing as inland bills of exchange." ^V, 3, 4 Ann., c. 9. ''t Ld. Raymond, i Salk. and 12 Mod. SEC. S3. J HEYLYN V. ADAMSON. • 379 son upon whom it is drawn does not pay it." Again,' "If the indorsee does not demand the money payable by the bill, of the person upon whom it is drawn, in convenient time, and afterwards he fails, the indorser is not liable. In Salkeld,^ the case is confounded: it is stated to be a bill of exchange, and ' ' that the demand must be made upon the drawer, or him upon whom it was drawn." My Ld. Ch. J. Holt had said that a demand must be made of the maker of a promissory note, (calling him the drawer); and in the case of a bill of exchange, of him upon whom the bill is drawn. The report jumbles both together, as applied only to a bill of exchange; misled, I dare say, by the equivocal sound of the term drawer, and by the Chief Justice's reasoning in the case of a promissory note, from the law upon bills of ex- change.'' In 1 2th Modern, 244, the case is mistaken, too; and stated as upon a bill of exchange, and as a determination ' ' that ' In p. 444- ■•'1 Salk., 127 (there called Lambert v. Pack), p. 9. 'The report in i Salk., 126, p. 6, is much more strong and explicit; but it is short, anonymous, and a mere loose scrap, by the same reporter; who was manifestly unclear about the case (being S. C. with p. 9) . Presentment for Acceptance — ^A^hen Necessary. — Presentment for acceptance is necessary as a general rule: 1. Where the bill is payable after sight or where it is neces- sary to fix the maturity of the contract; 2. Where it is made necessary by the terms of the contract. Presentment for acceptance need not be made, when the con- tract is payable on demand, at sight or at a time named. Bull v. Bank, 115 U. S., 373; Allen v. Suydam, 20 Wend., 321; Philpott V. Bryant, C. &P., 244. Presentment for Acceptance — How Made. — Present- ment for acceptance should be made: 1. By or on behalf of the holder (foreign bills by a notary); 2. At the place named, if there be one, or at the place of business or residence of the drawee; 3. Within a reasonable time after execution .and delivery and within business or reasonable hours; 4. To the drawee or some person authorized to act for him. If the bill is drawn upon or addressed to two or more per- sons (not partners), then it must be presented to each, unless one 380 HEYLYN V. ADAMSON. [CHAP. I3, there must be a demand upon the drawer of the bill of ex- change;" and yet the report itself shows demonstrably, that what was said by my Ld. Ch. J. Holt was applied to the maker of a promissory note (calling him the drawer). For the report makes him argue — ^"So if the bill was drawn on is authorized to accept or refuse acceptance for all, and then it is sufficient to present to him alone. If the bill is drawn upon a partnership, then presentment to any member of the firm will be sufficient. If the drawee is dead, then presentment may be made to his personal representatives. If the drawee has been pronounced a bankrupt or has made an assignment for the benefit of creditors, presentment for accept- ance may be made to him or to his assignee. Gates v. Beecher, 60 N. Y., 578; Parker v. Gordon, 8 R. I., 646; Smith v. Bank of New South Wales, L. R. 4 P. C, 194, 205-208; Cheek v. Roper, 5 Esp., 175. Presentment for Acceptance — Excused, When. — Pre- sentment for acceptance is excused, generally: 1. Where the drawee is dead; 2. When he has absconded; 3. Where he is a fictitious person; 4. Where he has no capacity to contract; 5. Where the presentment is irregular, but acceptance is re- fused upon some other ground; and 6. Where after reasonable diligence it cannot be made. Aymar v. Beers, 7 Cow., 705; Daniel on Negotiable Instruments, Sec. 478; U. S. V. Parker, i Paine, C. C, 156. Presentment for Acceptance May be Delayed — 'When. — Presentment for acceptance may be delayed where after due diligence it has been prevented at the proper time and place by reason of war, sickness, inevitable accident, or other circumstan- ces beyond the control of the holder. Aymar v. Beers, 7 Cow., 705; U. S. V. Parker, i Paine, C. C, 156. But in these cases presentment must be made within a reasonable time after the cause for delay is removed. Rights of Holder When Acceptance is Refused — May Sue Immediately. — When a bill has been properly pre- sented for acceptance, and dishonored, the holder may sue the drawer and prior indorsers immediately upon giving notice of such dishonor, without waiting to present the bill for payment. Daniel on Negotiable Instruments, Sees. 449, 450; Whitehead v. Walker, II L. J. Ex., 168; Lucas v. Ladew, 28 Mo., 342; Pilkinton v. Woods, 10 Ind., 432. EflFect of Acceptance. — Before acceptance the drawee is under no liability whatever unless he has contracted to accept. But by acceptance he becomes liable upon the contract to pay it SEC. 53. J HEYLYN V. ADAMSON. 381 any Other person, payable to Oakes or order;" which shows that the case in judgment was not a bill drawn upon another person, but payable only to Oakes, by R. himself. It seems to me as if Ld. Ch. J. Holt, in that case, had considered the drawee of a bill of exchange in the same light as the maker of a promissory note: but loose and hasty notes, misled by identity of sound, have misapplied what was said of according to its terms. Daniel on Nego. Inst., Sec. 451. His liability after acceptance is the same as the maker of a promis- sory note. Presentment for Payment— When Necessary. — It may be stated as a general rule that presentment for payment to the drawee is a prerequisite condition to the liability of the following parties: (i) of drawers; (2) of indorsers; (3) of acceptors for honor. Lambert v. Oakes, i Ld. Ray., 443; Heylyn v. Adamson, 2 Burrows, 669; Harry v. Perrit, i Salk., 134; Darrach v. Sav- age, I Shaw, 15s; Red Oak Bank v. Orvis, 40 la., 332; Long v. Stephenson, 72 N. Car., 569; Borough v. Perkins, I Salk., 131; Meise v. Newman, 76 Hun., 341; Ranson v. Mack, 2 Hill, 587; Griffin v. GofE, 12 Johnson, 423. And if there is a failure to make presentment for payment properly, these parties are relieved from all liability unless the presentment is excused. Presentment for payment is unnecessary in order to render the maker liable. His liability is absolute from the execution and delivery of the ■contract. Presentment of Checks — Necessity Of. — Demand of payment (unless excused) must be made upon a check in order to render the drawer or indorser liable; but he cannot complain, un- less by reason of the failure upon the part of the holder he has been injured and then only pro tanto. Syracuse, etc. Ry. Co. v. Collins, I Abb., N. C, 47; Murray v. Judah, 6 Cow., 484; Greenwich, etc. Co. v. Oregon Improvement Co., 76 Hun., 194. Presentment for Payment — How Made. — The present- ment for payment must be made: 1. By or on behalf of the holder (if a foreign bill, by a notary); 2. At the place named if there be one, or at the place of business or residence of the drawee or maker; 3. On the day the contract legally matures; 4. At a reasonable hour on that day; 5. To the person who is primarily liable on the contract or to some one who is authorized to act for him; and 6. By exhibiting the bill to the person from whom payment is demanded. Ocean Bank v. Williams, 102 Mass., 141; Lefty v. Mills, 4 T. R., 170; Sussex Bank v. Baldwin, 2 Harrison (N. J.), 487; Bank of Utica v. Smith, 18 Johnson, 230. A custom allow- 382 HEYLYN V. ADAMSON. [CHAP. I3, the drawer of a promissory note, to the drawer of a bill of ex- change; and to such a degree misapplied it, that two reports out of the three have stated the question as arising upon a bill of exchange; which is manifestly otherwise. But be this conjecture as it may, we are all of opinion, " That in actions upon inland bills of exchange, by an indor- see against an indorser, the plaintiff must prove a demand of, or due diligence to get the money from the drawee (or accep- ing presentment by a notary's clerk or deputy has been held suffi- cient. McClane V. Fitch, 4 B. Mon. (Ky.), 599; Miltenberger v. Spalding, ■>,:, Mo., 421; Commercial Bank v. Varnum, 49 N. Y., 269. {a) Where There are Several Drawees — Not Partners. — If there are several drawees or makers not partners, then presentment for payment must be made to each of them. Brit v. Lawson, 15 Hun., 123; Arnold v. Dresser, 8 Allen (Mass.), 435; Blake v. McMillen, 33 la., 150; Willis v. Green, 5 Hill, 232; Benedict v. Schmieg, 13 Wash., 476; 52 Am. St. Rep., 61; Shutts v. Fingar, 100 N. Y., 539; 53 Am. Rep., 231; 24 Am. Rep., 161. (1^) Where there are Several Drawees who are Partners. — If the drawees or makers are partners, presentment for payment may be made to any one of them, even though there has been a dissolution of the firm. Gates v. Beecher, 60 N. Y., 518; Brown V. Turner, 15 Ala., 832; Mt. Pleasant Bank v. McLaren, 26 la., 306; Greatrake v. Brown, 2 Cranch C. C, 541; Fourth Bank v. Heuschen, 52 Mo,, 207. The demand will also be sufficient if made on an agent of one of the firm. Brown v. Turner, supra. (c) Where the Drawee or Maker is Dead. — If the drawee or maker is dead, and no place of payment is named, presentment for payment should be made to his personal representatives. Ma- gruder v. Bank of Georgetown, 8 Curtis, 299; 3 Peters, 87; Groth V. Gyger, 31 Pa. St., 271. If there are no personal representa- tives, then presentment at the late residence of the drawee or maker. Some states permit a delay until they are appointed. Bank of Washington v. Reynolds, 2 Cranch C. C, 289; Laudry V. Stansbury, 10 La., 484. Presentment for Payment — When Excused. — Present- ment for payment to the drawee or maker is not necessary to charge a drawer or indorser: 1. Where the latter has no right to expect or believe that the contract will be honored; 2. Where the contract was made for his accommodation; 3. Where after reasonable diligence it cannot be made; 4. Where the drawee or maker is a fictitious person; and 5. Where it is expressly waived by the parties. Coyle v. Smith, I E. D. Smith, 400; Beale v. Parish, 20 N. Y., 407; Little SEC. 53.] HEYLYN V. ADAMSON. 383 tor); but need not prove any demand of the drawer; and that in actions upon promissory notes, by an indorsee against the indorser, the plaintiff must prove a demand of, or due negli- gence to get the money from the maker of the note." Accordingly, the rule v^^as, That the postea be delivered to the plaintiff. V. Phoenix Bank, 2 Hill, 425; Brush v. Barrett, 82 N. Y., 400; Cady v. Bradshavj, 116 N. Y., 188; Daniel on Neg. Instruments, Sec. 1576. Presentment for Payment — May be Delayed When. — Presentment for payment may be delayed: 1. Where the holder is too ill to make the presentment him- self or to appoint some one to do it for him; 2. Where the contract is lost; 3. Where the mail miscarries; 4. Where by reason of war or pestilence presentment can- not be made promptly; 5. Where the death of the holder occurs before maturity and before the appointment of a personal representative; and 6. Generally whenever the delay is caused by circumstances beyond the control of the holder and not imputable to his negli- gence. But in all of these cases presentment must be made with rea- sonable diligence after the causes of delay cease to operate. Wil- son V. Senier, 14 Wis., 380; Aborn v. Bosworth, i R. I., 401; Smith V. Mullett, 2 Camp., 208; Bray v. Hadwen, 5 M. & S., 68; Tunno v. Lague, 2 Johnson Cas., i; Woods v. Wilder, 43 N. Y., 164; Morgan v. Bank of Louisville, 4 Bush. (Ky. ), 82; White v. Stoddard, 11 Gray, 258. Presentment for Payment — Effect. — When a commer- cial contract has been properly presented for payment and dis- honored, and notice of that fact given to the parties who are secondarily liable (drawers and indorsers), an immediate right of action accrues to the holder against them. CHAPTER XIV. Defenses to Commercial Contracts.* SECTION 54. A MATERIAL ALTERATION IN THE TERMS OF A COMMER- CIAL CONTRACT IS A REAL DEFENSE AND MAY BE INTERPOSED AGAINST EVERY HOLDER. MASTER v. MILLER.i In the Court of King's Bench, July, 1791. [^Reported in 4 Term Rep., 320; 2 H. Bla., 141.] The Form of the Action. — The first count in this declar- ation was in the usual form, by the indorsees of a bill of ex- change against the acceptor; it stated that Peel & Co. on the 20th of March, 1788, drew a bill for 974/. I0.y. on the de- fendant, payable three months after date to Wilkinson & Cooke, who indorsed to the plaintiffs. The second count stated the bill to have been drawn on the 26th of March. There were also four other counts; for money paid, laid out and expended; money lent and advanced; money had and re- ceived; and on an account stated. The defendant pleaded the general issue; on the trial of which a special verdict was found. *An alteration of the date of a bill of exchange, after accept- ance, whereby the payment would be accelerated, avoids the in- strument; and no action can be afterwards brought upon it, even by an innocent holder for a valuable consideration. 'This case is cited in Daniel on Negotiable Instruments, 23, 148, 1373, 1373a, 1376, 1379, 1410; Wood's Byles on Bills and Notes, 33, 476, 483; Chitty on Bills, 182, 317, 6, 7, 8, 148, 159, 305, 560, 780; Story on Bills of Exchange, 17; Benjamin's Chal- mers on Bills, Notes and Checks, 254, 256; Norton on Bills and Notes, 234, 236; Randolph on Commercial Paper, 99, 288; Tiede- man on Commercial Paper, 194, 302, 394; Ames on Bills and Notes, 434. SEC. 54. J MASTER V. MILLER. 385, It Stated, that Peel & Co. on the 26th of March, 1788, drew their bill on the defendant, payable three months after date to Wilkinson & Cooke, for 974/. los. "Which said bill of exchange, made by the said Peel & Co. as the same hath been altered, accepted, and written upon, as hereafter men- tioned, is now produced, and read in evidence to the said jurors, and is now expressed in the words and figures follow- ing, to wit: ' June 2^rd, PJ4I. los. 'Manchester, March 20, iy88. ' Three months after date pay to the order of Messrs. Wilkinson & Cooke g'j4.l. los. received, as advised. ' Peel, Yates & Co. ' To Mr. Cha. Miller. ' 2jrd June, 1788.'" That Peel & Co. dehvered the said bill to Wilkinson & Cooke, which the defendant afterwards, and before the alter- ation of the bill hereinafter mentioned, accepted. That Wil- kinson & Cooke afterwards indorsed the said bill to the plain- tiffs, for a valuable consideration before that time given and paid by them to Wilkinson & Cooke for the same. That the said bill of exchange at the time of making thereof, and at the time of the acceptance, and when it came to the hands of Wilkinson & Cooke as aforesaid, bore date on the 26th day of March, 1788, the day of making the same. And that after it so came to and whilst it remained in the hands of Wilkinson & Cooke, the said date of the said bill, without the authority or privity of the defendant, was altered by some person or persons to the jurors aforesaid unknown from the 26th day of March, 1788, to the 20th day of March, 1788. That the words "June 23rd," at the top of the bill, were there inserted to mark that it would become due and payable on the 23rd of June next after the date; and that the alteration hereinbefore mentioned, and the blot upon the date of the bill of exchange, now produced and read in evidence, were on the bill of ex- change, when it was carried to and came into the hands and possession of the plaintiffs. That the bill of exchange was on the 23rd of June and also on the 28th of June, 1788, pre- sented to the defendant for payment; on each of which days 386 MASTER V. MILLER. [CHAP. I4, respectively he refused to pay. The verdict also stated that the bill so produced to the jury and read in evidence was the same bill, upon which the plaintiffs declared, etc. The Claim of Plaintiff. — For the plaintiffs it was con- tended, that they were entitled, notwithstanding the alteration in the bill of exchange, to recover according to the truth of the case, which is set forth in the second count of the declar- ation, namely, upon a bill dated the 26th of March; which the special verdict finds was in point of fact accepted by the de- fendant. More especially as it is clear that the plaintiffs are holders for a valuable consideration, and had no concern what- ever in the fraud that was meditated, supposing any such ap- peared. The only ground of objection which can be suggested is upon the rule of law relative to deeds, by which they are absolutely avoided, if altered even by a stranger in any ma- terial part; and upon a supposed analogy between those instruments and bills of exchange. But upon investigating the grounds on which the rule stands as applied to deeds, it will be found altogether inapplicable to bills: and, if that be shown, the objection founded on the supposed analogy be- tween them must fall with it. The general rule respecting deeds is laid down in Pigot's case,' where most of the authorities are collected; from thence it appears that if a deed be altered in a material point even by a stranger without the privity of the obligee, it is thereby avoided; and if the alteration be made by the obligee, or with his privity, even in an immaterial part, it will also avoid the deed. Now that is confined merely to the case of deeds, and does not in the terms or principle of it apply to any other in- struments not executed with the same solemnity. There are many forms requisite to the validity of a deed, which were originally of great importance to mark the solemnity and notoriety of the transaction, and on that account the grantees always were, and still are, entitled to many privileges over the holders of other instruments. It was therefore reasonable enough that the party, in whose possession it was lodged, should on account of its superior authenticity be bound to preserve it entire with the strictest attention, and at the peril ' 1 1 Co. , 27. SEC. 54.] MASTER V. MILLER. 387 of losing the benefit of it in the case of any material alteration even by a stranger. And that he is the better enabled to do from the nature of the instrument itself, which not being of a negotiable nature is not likely to meet with any mutilation- unless through the fraud or negligence of the owner; whereas bills of exchange are negotiable instruments, and are perpet- ually liable to accidents in the course of changing hands, from the inadvertance of those by whom they are negotiated, with- out any possibility of their being discovered by innocent in, dorsees, who are ignorant of the form in which they were originally drawn or accepted. And the present is a strong in- stance of that; for the plaintiffs cannot be said to be guilty of negligence in not inquiring how the blot came on the bill, which mere accident might have occasioned. That the same reasons, upon which the decisions of the courts upon deeds have been grounded, will not support such judgments upon bills, will best appear by referring to the au- thorities themselves. When a deed is pleaded, there must be a profert in curiam, unless as in Reed v. Brookman ' it be lost or destroyed by accident, which must however be stated in the pleadings. The reason of which is, that anciently the deed was actually brought into court for the purpose of in- spection; and if, as is said in lo Co., 92 b., the judges found that it had been rased or interlined in any material part, they adjudged it to be void. Now as that was the reason why a deed was required to be pleaded with a profert, and as it was never necessary to make a profert of a bill of exchange in pleading, it furnishes a strong argument that the reason ap- plied solely to the case of deeds. So deeds, in which were erasures, were held void, because they appeared on the face of them to be suspicious.' Nor could the supposition of fraud have been the ground on which that rule was founded with respect to deeds; for in Moor, 35, p. 116, a deed which had been erased was held void although the party himself who made it had made the erasure; which was permitting a party to avail himself of his own fraud. But it is impossible to con- ' 3 Term. Rep., 151. '' 13 Vin. Abr. tit. Faits, 37, 38; Bro. Abr. Faits, pi. 11, refer- ring to 44 Ed., 3, 42. 288 MASTER V. MILLER. [CHAP. 14, tend that the rule can be carried to the same extent as to bills; nor is it denied but that if the blot here had been made by the acceptor himself, he would still have been bound. In Keilw., 162 it is said that if A. be bound to B. in 20/. and B. erase out 10/. all the bond is void, although it is for the advantage of the obligor, and even where an alteration in a deed was made with the consent of both the parties, still it wasjield to avoid it.' Fraud could not be the principle on which those cases were determined; whereas it is the only principle on which the rule contended for can be held to extend to bills of exchange, but which is rebutted in the present case by the facts found in the special verdict. According to the same strictness, where a mere mistake was corrected in a deed, and not known by whom, it was held to avoid it.^ And it does not abate the force of the argument, that the law is relaxed in these respects even as to deeds, for the question still remains, whether at any time bills of exchange were construed with the same rigor as deeds. The principle upon which all these cases relative to deeds was founded was, that nothing could work any alter- ation in a deed, except another deed of equal authenticity. And as the party, who had possession of the deed, was bound to keep it securely, it might well be presumed that any ma- terial alteration even by a stranger was with his connivance, or at least through his. culpable neglect. In many of the cases upon the alteration of deeds, the form of the issue has weighed with the court; as in i Rol. Rep., 40, [which is also cited in Pigot's case,^] and Michael against Scockwith,' in both of which cases the alteration was after plea pleaded; and on that ground the court held that it was still to be considered as the deed of the party on non est factum. Now the form of the issue in actions upon deeds and those upon bills is very different; in the one case, the issue simply is, whether it is the deed of the party, which '2 Rol. Abr., 29, letter U, pi. 5. ^ 2 Rol. Abr., 29, pi. 6. ^ II Co., 27. *Cro. EL, 120. SEC. 54. ] MASTER V. MILLER. 380 goes to the time of the plea pleaded, as appears from the case before cited, and from 5 Co., 119 b; but here the issue is whether the defendant promised at the time of the accept- ance to pay the contents. The form of the issue is upon his promise, arising by implication of law from the act of accept- ance, which is found as a fact by the special verdict agreeable to the bill declared on in the second count. And in no in- stance, where an agreement is proved merely as evidence of a promise, is the party precluded from showing the truth of the case. Not only therefore the forms of pleading are different in the two cases, but the decisions which have been made upon deeds, from whence the rule contended for as to eras- ures and alterations is extracted, are altogether inapplicable to bills. The reasons for such rigorous strictness in the one case do not exist in the other. On the contrary all the cases upon bills have proceeded upon the most liberal and equitable principles with respect to innocent holders for a valuable con- sideration. The case of Minet v. Gibson' goes much further than the present: for there this court, and afterwards the House of Lords, held that it was competent to inquire into circumstances extraneous to the bill, in order to arrive at the truth of the transaction between the parties; although such circumstances operated to establish a different contract from^ that which appeared upon the face of the bill itself. Wherea.s. the evidence given in this case, and the facts found by the special verdict, are in order to show what the bill really was;, which it is competent for these parties to do against whom no- fraud can be imputed, if any exist. If the blot had fallen on the paper by mere accident, it cannot be pretended that it would have avoided the bill; and non constat upon this find- ing that it did not so happen. Even if felony were committed by a third person, through whose hands the bill passed, al- though that party could not recover upon it himself, yet his crime shall not affect an innocent party, to whom the bill is. indorsed or delivered for a valuable consideration. In Miller v. Race,^ where a bank note had been stolen,, and afterwards passed bona fide to the plaintiff, it was held: '3 Term. R., 481; in B. R., and i H. Bl., 569 in Dom. Proc. ^i Burr., 452. 24 390 MASTER V. MILLER. [CHAP. I4, that he might recover in trover against the person who had stopped it for the real owner. And the same point was held in Peacock v. Rhodes/ where the bill was payable to order. Again in Price v. Neale/ it was held that an acceptor, who had paid a forged bill to an innocent indorsee, could not re- cover back the money from him. Now if it be no answer to an action upon a bill against the acceptor to show that it was a forgery in its original making by a third person's having feigned the handwriting of the drawer, still less ought any subsequent attempt at forgery, even if that had been found which is not, to weigh against an innocent holder. But it would have been impossible to have recovered in any of these cases if the deed had been forged in any respect even by strangers to it; which shows that these several instruments cannot be governed by the same rules. And so little have the forms of bills of exchange and notes been observed, when put in opposition to the truth of the transaction, that in Rus- sell V. Langstaffe' the court held, in order to get at the justice of the case, that a person, who had indorsed his name on blank checks which he had entrusted to another, was liable to an indorsee for the sums for which the notes were afterwards drawn; and yet the form of pleading supposes the note to have been a perfect instrument, and drawn, before the in- dorsement. But the case which is most immediately in point to the present is that of Price v. Shute;* there a bill was drawn pay- able the 1st of January; the person upon whom it was drawn accepted it to be paid the ist of March; the holder, upon the bill's being brought back to him, perceiving this enlarged ac- ceptance, struck out the ist of March and put in the ist of January; and then sent the bill to be paid, which the acceptor refused. Whereupon the payee struck out the ist of January and put in the ist of March again. And in an action brought on this bill the question was, whether these alterations did 'Dougl., 633. ^3 Burr., 1354. 'Dougl., 514. *E., 33 Car., 2, in B. R.; 2 Moll, c. 10, s. 28. SEC. 54.J MASTER V. MILLER. 39I not destroy it .? And it was ruled they did not. This case therefore has settled the doubt; and never having been im- peached, but on the contrary recognized as far as general opinion goes, by having been inserted in every subsequent treatise upon the subject, it seems to have been acted on ever since. And it would be highly mischievous if the law were otherwise; for however negligent the owner of a deed may be supposed to be, who lets it out of his possession, the holder of a bill of exchange is by the ordinary course of such tran- sactions obliged to trust it even in the hands of those whose interest it is to avail themselves of this sort of objection. For it is most usual for the bill to be left for acceptance, and afterwards for payment, in the hands of the acceptor, who may be tempted to put such a blot on the date as may not be observed at the time, through the confidence of the parties. But even if the alteration should be considered as having de- stroyed the bill, why may not evidence be given of its contents upon the same principle as governed the case of Read v. Brookman,' where it was held that pleading that a deed is lost by time and accident supersedes the necessity of a profert. But at any rate the plaintiffs are entitled to recover on the general counts for money paid, and money had and received, on the authority of Tatlock v. Harris;^ for though it is ex- pressly stated that so much money was received by the defendant, yet that is a necessary inference from the fact of acceptance which is found. The Claim of the Defendant. — For the defendant it was contended, that the broad principle of law was, that any alter- ation of a written instrument in a material part thereof avoided such instrument; and that the rule was not merely confined to deeds, though it happened that the illustration of it was to be found among the old cases upon deeds only, be- cause formerly most written undertakings and obligations were in that form. This principle of law was founded in sound sense; it was calculated to prevent fraud, and deter men from tampering with written securities: and it would be directly re- '3 Term. R., 151. 2 3 Term. R., 174. 392 MASTER V. MILLER. [CHAP. I4, pugnant to the policy of such a law to permit the holder of a bill to attempt a fraud of this kind with impunity; which would be the case, if after being detected in the attempt, he were not to be in a worse situation than he was before. If any differ- ence were to be made between bills of exchange and deeds, it should rather be to enforce the rule with greater strictness as to the former; tor it would be strange that, because they were open to fraud from the circumstance of passing through many hands, the law should relax and open a wider door to it than in the case of deeds, where fraud was not so likely to be prac- ticed. The principle laid down in Pigot's case' is not dis- puted, as applied to deeds. But the first answer attempted to be given is, that the rule as to deeds is stii generis, and does not extend to other instruments of an inferior nature, be- cause it arises from the solemn sanction attending the execu- tion of instruments under seal. As to this it is sufficient to say that no such reason is suggested in any of the books: but the rule stands upon the broad ground of policy, which applies at least as strongly to bills as to deeds, for the reason above given. Then it is said that there is a material distinction between the several issues in the two cases. But the difference is more in words than in sense; the substance of the issue in both cases is, whether in point of law the party be liable to answer upon the instrument declared on; and therefore any matter which either avoids it ab initio, or goes in discharge of it, may be shown as much in the one case as in the other. Upon non est factum the question is, whether in law the deed produced in evidence be the deed of the party; so on non assumpsit the question is, whether the bill given in evidence be in point of law the bill accepted by the defendant; because the promise only arises by implication of law upon proof of the acceptance of the identical bill accepted, and given in evi- dence. Now neither of the counts in the declaration was proved by the facts found. For in the first count the bill was dated the 20th of March; but as there is no evidence of the defendant's having accepted such a bill, of course the plain- tiffs are not entitled to recover on that count. Neither can ' II Co., 27. SEC. 54.] MASTER V. MILLER. 393 they recover on the second, because though it is found that he accepted a bill dated the 26th of March, as there stated, yet inasmuch as the bill stated to have been produced in evidence to the jury is dated the 20th, of course the evidence did not support the count. With respect to the cases cited of bills of exchange hav- ing been always construed by the most liberal principles, and particularly in the case of Minet v. Gibson, the same answer may be given to all of them, which is, that so far from the original contracts having been attempted to be altered, all those actions were brought in order to enforce the observance of them in their genuine meaning against the party, who, in the latter case particularly, endeavored by a trick to evade the contract. Whereas here the contract has been substantially altered by the parties who endeavor to enforce it; or at least by those whom they represent, and from whom they derive title. Then the case in Molloy of Price v. Shute is chiefly relied on by the plaintiffs, to which several answers may be given. First, the authenticity of it may be questioned; for it is not to be found in any reports, although there are several contem- poraneous reporters of that period. In the next place, the bill, as originally drawn, was not altered upon the face of it; and therefore, as against all other persons at least than the acceptor, it might still be enforced. But principally it does not appear but that the action was brought against the drawer, who, as the acceptor had not accepted it according to the tenor of the bill, was clearly liable; as the payee was not bound to abide by the enlarged acceptance, but might con- sider it as no acceptance at all. Then if this bill be void for this fraud, no evidence could be given to prove its contents, as in the case of a deed lost; because in that there is no fraud. But even if any other evidence might have been given, it is sufficient to say that in this case there was none. And as to the common counts, if the general principle of law contended for applies to bills of exchange, it will prevent the plaintiffs from recovering in any other shape. Besides which, it is not stated that the defendant has received any consideration, 394 MASTER V. MILLER. [CHAP. I4, upon which ground the case of Tatlock v. Harris' was de- cided. In reply it was urged, that the issue was not whether the defendant had accepted this bill in the state in which it was shown to the jury; but whether he had promised to pay in consequence of having accepted a bill dated the 26th March, drawn by, etc., and those facts being found, the promise necessarily arises. It is said that the policy of the law will extend the same rule to the avoidance of bills of exchange, which have been altered, as to deeds; because there is even greater reason to guard against fraudulent alterations in the former than in the latter case. To which it may be answered, that the foundation of the rule fails in this case; for no fraud is found, and none can be presumed: and it is admitted, that if the blot had been made by accident, it would not have avoided the bill; and nothing is stated to show that it was not done by accident. Besides, the policy of the law is equally urgent in favor of the plaintiffs, it being equally politic to compel a performance of honest engagements. Here the defendant is only required to do that which in fact and in law he has promised to do. And if he be not liable on this contract, he will be protected in withholding payment of that money which he has received, and which by the nature of his engagement he undertook to repay. No answer has been given to the case cited from Molloy: for though the case is not reported in any other book, it bears every mark of authenticity, by noting the names of the parties, the court in which it was determined, and the time of the decision; and it has been adopted by subsequent writers on the same subject. Again, the alteration there was fully as im- portant as this, for it equally tended to accelerate the day of payment; and, lastly, it is not denied but that the action mighty have been maintained on the bill against any other person than the acceptor; which is an admission that the policy of the law does not attach so as to avoid such instru- ments upon any alteration, for otherwise it would have avoided the bill against all parties. ' 3 Term R., 174. SEC. 54.J MASTER V. MILLER. 395 Decision. — The question is not whether or not another action may not be framed to give the plaintiffs some remedy, but whether this action can be sustained by these parties on this instrument. For the instrument is the only means by which they can derive a right of action. The right of action, which subsisted in favor of Wilkinson & Cooke, could not be transferred to the plaintiffs in any other mode than this, inas- much as a chose in action is not assignable at law. No case, it is true, has been cited on one side or the other, except that in Molloy, of which I shall take notice hereafter, that decides the question before us in the identical case of a bill of ex- change. But cases and principles have been cited at the bar, which, in point of law as well as policy, ought to be applied to this case. That the alteration in this instrument would have avoided it, if it had been a deed, no person can doubt. And why in point of policy would it have had that effect in a deed.' Because no man shall be permitted to take the chance of committing a fraud, without running any risk of losing by the event, when it is detected. At the time when the cases cited, of deeds, were determined, forgery was only a misde- meanor: now the punishment of the law might well have been considered as too little, unless the deed also were avoided; and therefore the penalty for committing such an offense was compounded of those two circumstances, the punif5hment for the misdemeanor, and the avoidance of the deed. And though the punishment has been since increased, the principle still remains the same. I lay out of my consideration all the cases where the alteration was made by accident: for here it is stated that this alteration was made while the bill was in possession of Wilkinson & Cooke, who were then entitled to the amount of it, and from whom the plaintiffs derive title: and it was for their advantage (whether more or less is imma- terial here) to accelerate the day of payment, which in this commercial country is of the utmost importance. The cases cited, which were all of deeds, were decisions which applied to and embraced the simplicity of all the tran- sactions at that time; for at that time almost all written en- gagements were by deed only. Therefore those decisions, which were indeed confined to deeds, applied to the then state 396 MASTER V. MILLER. [CHAP. I4, of affairs: but they establish this principle, that all written in- struments, which were altered or erased, should be thereby avoided. Then let us see whether the policy of the law, and some later cases, do not extend this doctrine farther than to the case of deeds. It is of the greatest importance that these instruments, which are circulated throughout Europe, should be kept with the utmost purity, and that the sanctions to preserve them from fraud should not be lessened. It was doubted so lately as in the reign of George the First, in Ward's case,' whether forgery could be committed in any instrument less than a deed, or other instrument of the like authentic nature; and it might equally have been decided there that, as none of the preceding determinations extended to that case, the policy of the law should not be extended to it. But it was there held that the principle extended to other instruments as well as to deeds; and that the law went as far as the policy. It is on the same reasoning that I have formed my opinion in the present case. The case cited from Molloy indeed at first made a different impression on my mind: but on looking over it with great attention, I think it is not ap- plicable to this case. No alteration was there made on the bill itself; but the party, to whom it was directed, accepted it as payable at a different time, and afterwards the payee struck out the enlarged acceptance; and, on the acceptor refusing to pay, it is said that an action was maintained on the bill. But it does not say against whom the action was brought; and it could not have been brought against the acceptor, whose ac- ceptance was struck out by the party himself who brought the action. Taking that case in the words of it, " that the alter- ations did not destroy the bill," it does not affect this case: not an iota of the bill itself was altered; but on the person, to whom the bill was directed, refusing to accept the bill as it was originally drawn, the holder resorted to the drawer. Then it was contended that no fraud was intended in this case; at least, that none is found: but I think that, if it had been done by accident, that should have been found, to excuse the party, as in one of the cases, where the seal of the deed was torn off by an infant. With respect to the argument drawn from the '2 Str., 747; 2 Ld. Raym., 1461. SEC. 54-] MASTER V. MILLER. 397 form of the plea, it goes the length of saying, that a defend- ant is liable, on non assumpsit, if at any time he has made a promise, notwithstanding a subsequent payment: but the ques- tion is, whether or not the defendant promised in the form stated in the declaration; and the substance of that plea is, that according to that form he is not bound by law to pay. On the whole, therefore, I am of opinion that this falsification of the instrument has avoided it; and that, whatever other remedy the plaintiffs may have, they cannot recover on this bill of exchange. The only question in this case is, whether there appears on the face of this special verdict, a right of action in the plaintiffs on any of the counts. The first count is on a bill of exchange dated the 20th of March; but, taere being no proof of any bill of that date, there is clearly an end of that count. The second is on a bill dated the 26th of March; but the defendant objects to the plaintiff's recovering on this count also, because, the bill having been altered while it was in the hands of Wilkinson & Cooke, it is not the same bill as that which was accepted; and that is the true and only ques- tion in the cause. My idea is that the plaintiff's right of action, as stated in this count, cannot be maintained at com- mon law, but is supported only on the custom of merchants, which permits these particular choses in action to be trans- ferred from one person to another. The plaintiffs, as indors- ees, in order to recover on this bill, must prove the accept- ance by the defendant, the indorsement from Wilkinson & Cooke to them, and that this was the bill which was presented when it became due. Now has all this been proved 1 The bill was drawn on the 26th of March, payable at three months date; the defendant's engagement by his acceptance was, that it should be paid when it became due, according to that date; but afterwards the date was altered; the date I consider as a very material part of the bill, and by the alteration the time of payment is accelerated several days; according to that alteration, the payment was demanded on the 23d of June, which shows that the plaintiffs considered it as a bill drawn the 20th of March; then the bill which was produced in evi- dence to the jury was not the same bill which was drawn by 398 MASTER V. MILLER. [CHAP. I4, Peel & Co. and accepted by the defendant; and here the cases which were cited at the bar apply. Piggott's is the leading case; from that I collect, that when a deed is erased, whereby it becomes void, the obligor may plead non est fac- tum, and give the matter in evidence, because at the time of plea pleaded it was not his deed; and, secondly, that when a deed is altered in a material point by himself, or even by a stranger, the deed thereby becomes void. Novv^ the effect of that determination is, that a material alteration in a deed causes it no longer to be the same deed. Such is the law re- specting deeds: but it is said that that law does not extend to the case of a bill of exchange: whether it does or not must depend on the principle on which this law is founded. The policy of the law has been already stated, namely, that a man shall not take the chance of committing a fraud, and, when that fraud is detected, recover on the instrument as it was originally made. In such a case the law intervenes, and says, that the deed thus altered no longer continues the same deed, and that no person can maintain an action upon it. In reading that and the other cases cited, I observe that The General Classes of Defenses. — The defenses to commercial contracts have been divided into two general classes: — (i) real and (2) personal. A Real Defense — Defined. — The first or a real defense may be defined to be one which attaches to the contract and virtually destroys it so that it cannot be enforced against any of the parties to it nor in favor of any holder. Among the real defenses may be named: 1. Incapacity of the parties, such as infancy, coverature, insanity; 2. Illegality of the contract, as where it contravenes (i) the statute, or (2) the common law, or (3) public policy — such as usury, gaming or where notes or bills are given for the purchase of intox- icating liquors in jurisdictions where their sale is prohibited; 3. Where by the acts of the parties the contract has either been cancelled, or altered in a material way; and 4. Want of delivery. A Personal Defense — Defined. — A personal defense may be defined to be a defense which attaches not to the contract itself, but to the agreement or conduct of the parties in regard to the in- strument and which renders it inequitable for the holder to enforce it as between the immediate parties. It is called a personal de- fense because it is available as a defense only between the parties- SEC. 54. j MASTER V. MILLER. 399. it is nowhere said that the deed is void merely because it is the case of a deed, but because it is not the same deed. A deed is nothing more than an instrument or agreement under seal: and the principle of those cases is, that any alteration in a material part of any instrument or agreement avoids it, because it thereby ceases to be the same instrument. And this principle is founded on great good sense, because it tends to prevent the party, in whose favor it is made, from attempt- ing to make any alteration in it. This principle too appears to me as applicable to one kind of instruments as to another. It has been contended that there is a difference between an alteration of bills of exchange and deeds; but I think that the reason of the rule affects the former more strongly, and the alteration of them should be more penal than in the latter case. Supposing a bill of exchange were drawn for no/., and after acceptance the sum was altered to i,ooo/. : it is not pre- tended that the acceptor shall be liable to pay the 1,000/.- and I say that he cannot be compelled to pay the 100/. ac- cording to his acceptance of the bill, because it is not the same bill. So if the name of the payee had been altered, it and privies to the immediate contract. Parties are known as immediate and mediate. Immediate parties are the parties to the contract, as the maker and payee; the indorser and his indorsee. Mediate parties are parties between whom there are other parties, as maker and indorsee; first indorser and second indorsee. Among the personal defenses may be named; — (a) payment; (h) release; {c) accord and satisfaction; {d) failure of considera- tion; {e) fraud; (/) duress; (^) illegality, (whereby the statute, or common law or public policy, the act is pronounced illegal, but not void). Material Alteration — Defined. — A material alteration in a commercial contract is one which changes the legal relation of the parties or their obligations, or the legal effect of such contract. It is " an alteration which causes the contract to speak a language different in legal effect from that which it originally spoke." Johnston v. May, 76 Ind., 293; Osborne v. Van Houton, 45 Mich., 444; Burlingame v. Brewster, 79 111., 515; Rowley v. Jewett, 56 la., 492; Bank v. Douglass, 31 Conn., 170, i8r; Gardner v. Walsh, s El. & Bl., 83; Lunt v. Silver, 5 Mo. app., 186; Horn v. Newton City Bk., 32 Kan., 518; Gettysburg Bk. v. Chisolm, 169 Pa. St., 564, 569; Wait v. Pomeroy, 20 Mich., 425; Sulivan v. Rudisill, 63 la., 158. An alteration to correct a mistake is not material; Evans v. Foreman, 60 Mo., 449; Derby v. Thrall, 44. 400 MASTER V. MILLER. [CHAP. 1 4, would not have continued the same bill. And the alteration in every respect prevents the instrunient's continuing the same, as well when applied to a bill as to a deed. It was said that Piggott's case only shows to what time the issue relates: but it goes further, and shows, that if the instrument be altered at any time before plea pleaded, it becomes void. It is true the court will inquire to what time the issue relates in both cases. Then to what does the issue relate here.? The plaintiffs in this case undertook to prove everything that would support the assumpsit in law, otherwise the assumpsit did not arise. It was incumbent on them to prove that, before the action was brought, this identical bill, which was produced in evi- dence to the jury, was accepted by the defendant, presented, and refused: but if the bill, which was accepted by the de- fendant, were altered before it was presented for payment, then that identical bill, which was accepted by the defendant, was not presented for payment; the defendant's refusal was a refusal to pay another instrument; and therefore the plaintiffs failed in proving a necessary averment in their declaration. If the bill had been presented and refused payment, and it had been altered after the action was brought, then it might Vt., 413; see contra, Newman v. King, 54 Ohio St., 273. Whether the alteration is material is a question of law. Material Alteration — Effect of. — "We understand the law to be well settled that a material alteration of a promissory note by any of the parties thereto discharges from liability thereon all other parties not consenting to or authorizing such alteration; and this without regard to whether the alteration is apparently or presum- ably to the benefit or detriment of the parties objecting. Courts cannot undertake to say that a party would have made the contract as altered, and thus make it for him, merely because its terms are more favorable to him than those embodied in the original instru- ment, any more than a like conclusion could be justified where the alteration imports additional liability. In the one case no less than in the other the altered paper is not the contract which the party has made; and in neither case can the courts declare it to be his contract, or enforce it as such. The law proceeds on the idea that the identity of the contract has been destroyed; that the con- tract made is not the contract before the court; that the party did not make the contract which is before the court; and, so adjudg- ing, it cannot go further, and hold him bound by it, on specula- tions, however probable and plausible, that he would or ought to have entered into the altered agreement because it involved less SEC. 54.] MASTER V. MILLER. 40I have been like the case mentioned at the bar. It was con- tended at the bar, that the inquiry before a jury in an action Hke the present should be, whether or not the defendant promised to pay the bill at the time of his acceptance: but granting that he did so promise, that alone will not make him liable unless that same bill were afterwards presented to him. I will not repeat the observations which have already been made by my Lord on the case in Molloy: but the note of that case is a very short one; and the principle of it is not set forth in any other book, nor indeed do the facts of it sufficiently appear. I doubt also whether it was a determination of this court: it only appears that ther-e was a point made at nisi prius, but not that it was afterwards argued here. But it has been said that a decision in favor of the plaintiffs will be the most convenient one for the commercial world: but that is much to be doubted; for if, after an alteration of this kind, it be competent to the court to inquire into the original date of the instrument, it will also be competent to inquire into the original sum and the original payee, after they have been altered, which would create much confusion, and open a door to fraud. liability than the original and only paper executed by him. There are some expressions in the books to the contrary." Montgomery V. Crossthwait, 90 Ala., 553; Illustrative Cases, 154; Masters v. Miller, supra. Material Alteration by a Stranger — Effect of. — Upon the question whether an alteration is ever material or not when made by a stranger, there is a different rule in the U. S. and England. In England a material alteration by a stranger destroys the title of the holder. Davidson v. Cooper, 11 M. & W., 778; 13 M. &W., 343. While in the United States such an alteration is treated as a spoliation simply. Drum v. Drum, 133 Mass., 566; Colson v. Arnot, 57 N. Y., 253; Neff v. Horner, 63 Pa. St., 237; Piersol v. Grimes, 30 Ind., 129; Fullerton v. Sturges, 4 Ohio St., 529; Bige- low v. Stilphen, 35 Vt., 521. Material Alterations— Illustrations of — The following changes in commercial contracts have been held to be material: 1. Changing a joint to a joint and several contract; 2. Changing the date or time of payment; 3. Changing the place of payment; 4. Changing the rate of interest; 5. Adding interest when it did not draw interest; 6. Substituting a new payee; 402 MASTER V. MILLER. [CHAP. 1 4, Great and mischievous neglects have already crept into these transactions; and I conceive, that keeping a strict hand over the holders of bills of exchange, to prevent any attempts to alter them, may be attended with good effects, and cannot be productive of any bad consequences, because the party who has a value for the bill may have recourse to the person who immediately received it from him. On these grounds, there- fore, I am of opmion that the plaintiffs cannot recover on the second count. Neither do I think that they can recover on the general counts, because it is not stated as a fact in the verdict that the defendant received the money, the value of the bill. Judgment for the defendant.' 'This judgment was afterwards affirmed in the Exchequer- Chamber. 5 Term Rep., 367. 7. Adding a seal; 8. Adding a subscribing witness; Adding or removing a signature; Adding words of negotiability when it was not negotiable; Adding a special consideration after "value received"; Adding a place of payment when none is named; Changing a material memorandum; Changing the medium of payment. Daniel on Neg. Inst., sees. 1373-1404 and cases cited; Cape Ann Nat. Bk. v. Burns, 129 Mass., 596; Angle v. Northwestern Ins. Co., 92 U. S., 330. Immaterial Alterations — Illustrations. — The following changes or alterations in commercial contracts have been held to be immaterial: 1. Changing a bill payable to "A" or bearer to "A" or order or bearer; 2. Changing an indorsement in blank into a special in- dorsement; 3. Adding the legal rate of interest where the note reads -"with interest" simply. 10 1 1 12 13 14 CHAPTER XV. Defenses. — Alteration. — Negligence. SECTION 55. WHENEVER THE MAKER OF A COMMERCIAL CONTRACT, BY HIS OWN CARELESSNESS OR NEGLIGENCE, EXE- CUTES AND DELIVERS IT SO THAT MATERIAL AL- TERATIONS MAY BE MADE, IN A WAY WHICH DOES NOT EXCITE THE SUSPICION OF CAREFUL AND PRU- DENT BUSINESS MEN, HE WILL BE HELD LIABLE THEREON TO ANY BONA FIDE HOLDER. NEGLIGENCE, HOWEVER, IS A QUESTION OF FACT. BROWN V. REED.i In the Supreme Court of Pennsylvania, Oct., 1875. {Reported in /p Pa. St., J/o.] The Form of Action. — This was an action of assumpsit brought January 31st, 1873, by W. W. Reed against T. H. Brown, upon the following note: ' ' North East, April jrd, iSyz. "Six months after date I promise to pay to J. B. Smith or order two hundred and fifty dollars for value received, with legal interest, without defal- cation or stay of execution. T. H. Brown." Indorsed "_/. B. Smith, without recourse." 'This case is cited in Benjamin's Chalmers, on Bills, Notes and Checks, 257; Bigelow on Bills and Notes, 187, 195; Wood's Byles on Bills and Notes, 481, 589; Tiedeman on Commercial Paper, 397; Ames on Bills and Notes, 598; Daniel on Negotiable Instruments, 1405, 1409; Norton on Bills and Notes, 239. See leading cases upon this question: Young v. Grote, 4 Bing., 253; 12. Moore, 484; Phelan v. Moss, 17 P. F. Smith (Pa.), 59; John- son Harvester Co. v. McLean, 57 Wis., 258; 46 Am. Rep., 39; Garrard v. Lewis, 47 L. T. Rep. (N. S. ), 408; Lowden v. Na- tional Bank, 38 Kan., 533. 404 BROWN V. REED. [CHAP. 15, The plaintiff gave the note in evidence, and testified that he had bought it from the payee for $220, which he paid in cash. He testified further that he had received the note bona fide, and rested. The defendant then offered to prove: "That the paper he signed has been altered since so signed, without his knowledge or consent, and that it was ob- tained from him by fraud of the payee; also, to show what took place between Smith, the payee, and himself at the time the note was made; also, to show that the paper in suit is but the part of an agreement entered into between himself and one J. B. Smith, purporting to constitute the defendant an agent to sell 'Hay and Harvest Grinders' in North East and Harbor Creek townships, in the county of Erie, and that the paper making him such agent, has since it was signed by him, been cut in two without his knowledge or consent, so as to make the part in evidence read as a promissory note for $250, and that a large part of the original instrument was cut off, and that the paper in suit is not the whole of the paper signed by defendant, nor in the shape in which he signed it, but when signed by him was as follows, to wit: North East, April 2d, 1872. ■' Six months after datel promiseto pay J- B. Smith or bearer fifty dollars when I sdl by order TWO HUNDRED AND FIFTY DOLLARS worthof Hay and Harvest Grinders, for value received, with legal interest, without appeal, and also without defalcation or stay of execution. T. H.Brown, Agentfor Hay & Harvett Grinders." The plaintiff objected to the offer, because, admitting it all to be true, it did not constitute a defence to the note in the hands of an innocent purchaser for value, before maturity, and it was not alleged that the plaintiff is not such a pur- chaser; nor that there was any guilty knowledge on part of the plaintiff in this case before purchase of the paper. [The paper was divided by cutting through between where the asterisks are placed.] The offer was rejected and a bill of exceptions sealed for the defendant. The court charged: — SEC. 55. J BROWN V. REED. 405 "There is no evidence impeaciiing tliis paper as a note in the hands of the plaintiff and your verdict therefore must be for the plaintiff for the amount of note and interest." The verdict was for the plaintiff for $280.54. The defendant took a writ of error, and assigned the re- jection of his offer of evidence and the charge of the court, for error. The Claim of the Plaintiff in Error (Defendant below). — The defendant contended that a note once issued and then altered is void altogether.' Cutting the contract into two pieces rendered the whole contract, and hence the part held by the plaintiff, absolutely void as against maker.'' The Claim of the Defendant in Error (Plaintiff be- low. — The defendant in error, cited the following cases in support of the decision of the court below and closed: Phe- lan V. Moss," and Garrard v. Haddan.* Decision.— The learned counsel for the plaintiff in error has appealed to us to reconsider and overrule Phelan v. Moss. ^ We mean, however, to adhere to those cases, as founded both on reason and authority, and as settling a principle of the utmost importance in the law of negotiable securities. That principle is that, if the maker of a bill, note or check issiies^ it in such a condition that it may easily be altered without detection, he is liable tc a bona fide holder who takes it in the usual course of business, before maturity. The maker 'Masters v. Miller, 4 Term Rep., 320, 346; Fay v. Smith, i Allen, 477; Wade v. Wittington, Id., 561; Coch v Coxwell, ' C, M. & R., 291; Smith's Lead. Cas., 934. ^2 Parsons Notes and Bills, 580-2; Chitty on Bills, 182; Wheelock v. Freeman, 13 Pick., 165; Wade v. Wittington, i Allen, 561; Fay v. Smith, Id., 477; Bruce v. Barber, 3 Barb., 374; Deny v. Reed, 40 Id., 16; Nazro v. Fuller, 24 Wend., 37; Warring v. Early, 2 El. & B., 763; Stephens v. Graham, 7 S. & R., 505; Jardine v. Payne, i B. & Ad., 671; Benedict v. Cowden, 49 N. Y., 396; Story on Notes, Sec. 408; Byles on Bills, Sees.. 254. 256- "17 P. F. Smith (Pa.), 59. ^Id., 82; Zimmerman v. Rote, 25 P. F. Smith (Pa.), 188. " 17 P. F. Smith (Pa.), 59; and Garrard v. Haddan, Id., 82; since followed in Zimmerman v. Rote, 25 P. F. Smith (Pa.), 188. 25 4o6 BROWN V. REED. [cHAP. 15, ought surely not to be discharged from his obligation by rea- son or on account of his own negligence in executing and issuing a note that invited tampering with. These cases did not decide that the maker would be bound to a bona fide holder on a note fraudulently altered, however skillful that alteration might be provided that he had himself used ordin- ary care and precaution. He would no more be responsible upon such an altered instrument than he would upon a skill- ful forgery of his handwriting. The principle to which I have adverted is well expressed in the opinion of the court in Zim- merman v. Rote.' "It is the duty of the maker of the note to guard not only himself but the public against frauds and alterations by refusing to sign negotiable paper made in such a form as to admit of fraudulent practices upon them, with ease and without ready detection." But would the facts offered to be given in evidence and rejected by the court below, have brought this case within the line of their decisions.? We think not. In Phelan v. Moss and in Zimmerman v. Rote, the party signed a perfect promissory note, on the margin or underneath which was written a condition which as between the parties was a part of the contract and destroyed its negotiability. But it could easily be separated, leaving the note perfect, and no one would have any reason to suspect that it had ever existed. In Garrard v. Haddan the note was executed with a blank, by which the amount might be increased, without any score to guard against such an alteration. In all these cases the de- fendants put their names to what were on their face promis- sory negotiable notes. In the case before us on the defend- ant's offer, he did not sign a promissory note, but a contract by which he was to become an agent for the sale of a wash- ing machine. It was indeed so cunningly framed that it might be cut in two parts, one of which with the maker's name would then be a perfect negotiable note. Whether there was negligence in the maker was clearly a question of fact for the jury. The line of demarcation between the two parts might have been so clear and distinct and given the in- strument so unusual an appearance as ought to have arrested '25 P. F. Smith (Pa.), 191. SEC. 55- J BROWN V. REED. 407 the attention of any prudent man. But it may have been otherwise. If there was no neghgence in the maker, the good faith and absence of negUgence on the part of the holder cannot avail him. The alteration was a forgery, and there was nothing to estop the maker from alleging and prov- ing it. The ink of a writing may be extracted by a chemical process, so that it is impossible for any but an expert to de- tect it, but surely in such a case it cannot be pretended that the holder can rely upon his good faith and diligence. We think then that the evidence offered by the defendant below should have been received. Judgment reversed and venire facia de novo awarded. Alterations — Negligence of Maker. — If the maker, by his negligence, should execute a commercial contract as follows: "$ 50.00. "Ann Arbor, Mich., Aug. 25, i8g8. " Two months after date without grace I promise to pay to the order of John Doe Fifty Dollars at the Ann Arbor Savings Bank, for value re- ceived, with eight per cent annual interest after due. Richard Roe." And a subsequent holder should write "10" in the margin before "S° " and "Ten hundred and" before "fifty" in the body of the note in a way which would not excite the suspicion of careful men, he would be liable to any bona fide holder for the sum of Ten hundred and fifty dollars. Garrard v. Haddan, 67 Pa. St., 82; Johnson Harvester Co. v. McLean, 57 Wis., 258; Yocum v. Smith, 63 111., 321; Vischer V. Webster, 8 Cal., 109. This doctrine however is denied in some jurisdictions. Green- field Savings Bank v. Stowell, 123 Mass., 203. In this case the figure "4" was inserted before "67" in the margin, and the phrase "four hundred and" before "sixty seven" in the body of the contract. In this case however the "alteration" was made by the principal party to the contract which no doubt had much to do with the opinion. See also Holmes v. Trumper, 22 Mich., 427; Washington, etc. Bank v. Ekey, 51 Mo., 273; Cape Ann Nat. Bk. v. Burns, 129 Mass., 596; Angle v. Northwestern Ins. Co., 92 U. S., 330; McGrath v. Clark, 56 N. Y., 34; Noll v. Smith, 64 Ind., S"- See also Scofield v. Ford, 56 la., 37°; Stephens v. Davis, 85 Tenn., 271; Seibel v. Vaughn, 69 III., 257. CHAPTER XVI Defenses— Fraud. SECTION 56. FRAUD MAY BE EITHER A REAL OR A PERSONAL DEFENSE. IT MAY ALWAYS BE INTERPOSED BETWEEN IMMEDI- ATE PARTIES, AND IF IT CAUSED THE PARTIES TO EN- TER INTO THE CONTRACTUAL RELATIONS UNDER A MISAPPREHENSION OF THE REAL NATURE OF THE CONTRACT, WITH THE EXERCISE OE DUE DILIGENCE, THEN IT IS A REAL DEFENSE AND MAY BE INTERPOSED AGAINST ANY HOLDER. FOSTER V. MACKINNON. 1 In the Court of Common Pleas, July, 1869. \^Reported i?i 4 Common Pleas, 704.] The Form of Action. — Action by indorsee against indor- ser on a bill of exchange for 3000/. drawn on the 6th of No- vember, 1867, by one Cooper upon and accepted by one Cal- low, payable six months after date, and indorsed successively by Cooper, the defendant, J. P. Parker, T. A. Pooley & Co., and A. G. Pooley, to the plaintiff, who became the holder for value (having taken it in part payment of a debt due to him from A. G. Pooley) before it became due, and without notice of any fraud. The pleas traversed the several indorsements, and alleged that the defendant's indorsement was obtained from him by fraud. 'This case is cited in Daniel on Negotiable Instruments, 850; Benjamin's Chalmers, on Bills, Notes and Checks, 58, 220; Nor- ton on Bills and Notes, 253; Wood's Byles, on Bills and Notes, 487, 589; Randolph on Commercial Paper, 284; Bigelow on Bills and Notes, 37, 176, 180; Ames on Bills and Notes, 540. SEC. 56.] FOSTER V. MACKINNON. 409 The cause was tried before Bovill, C. J., at the last spring assizes at Guildford. The defendant, who was a gen- tleman far advanced in years, swore that the indorsement was not in his hand-writing, and that he had never accepted nor indorsed a bill of exchange; but there was evidence that the signature was his; and Callow, who was called as a witness for the plaintiff, stated that he saw the defendant write the indorsement under the following circumstances: Callow had been secretary to a company engaged in the formation of a railway at Sandgate, in Kent, in which the defendant (who had property in the neighborhood) was interested, and the de- fendant had some time previously, at Callow's request, signed a guarantee for 3000/., in order to enable the company to ob- tain an advance of money from their bankers. Callow took the bill in question (which was drawn and indorsed by Cooper) to the defendant, and asked him to put his name on it, telling him that it was a guarantee; whereupon the defendant, in the belief that he was signing a guarantee similar to that which he had before given (and out of which no liability had resulted to him), put his signature on the back of the bill immediately after that of Cooper. Callow only showed the defendant the back of the paper: it was, however, in the ordinary shape of a bill of exchange, and bore a stamp, the impress of which was visible through the paper. The Lord Chief Justice told the jury that, if the indorse- ment was not the signature of the defendant, or if, being his signature, it was obtained upon a fraudulent representation that it was a guarantee, and the defendant signed it without knowing that it was a bill, and under the belief that it was a guarantee, and if the defendant was not guilty of any negli- gence in so signing the paper, he was entitled to the verdict. The jury returned a verdict for the defendant. The Claim of Defendant. — Two questions arise here: — 1. Whether there was any negligence on the part of the defendant in signing the document as he did; and 2. Whether, assuming Callow's evidence to be true, the defendant can be responsible upon an indorsement so fraudu- lently obtained. 4IO FOSTER V. MACKINNON. [CHAP. 1 6, In considering the first of these questions, regard must be had to the age and condition of the party. What would be neghgence in a merchant or a banker would not necessarily be negligence on the part of a gentleman of great age and im- paired physical powers. Negligence must in all cases be a relative term.' Then, as to the second question. It is essen- tial to every contract that there be volition. A man cannot be said to contract when he signs a paper upon a representa- tion and under a belief that he is signing something different from that which it turns out to be; to make a valid and bind- ing contract, the mind must go with the act. This arises upon the traverse of the indorsement. Upon the facts proved, the defendant cannot be said to have indorsed the bill at all. Where a man puts his name as acceptor or indorser on a blank stamp, he becomes responsible, if the bill is afterwards filled up and gets into the hands of a bona fide holder for value, to the full amount which the stamp will cover, ^ but in such case he intends to become a party to the bill. All the eases in which one who has been defrauded has been held liable upon the bill or note are explainable on the ground of agency." Young v. Grote,' may be sustained on that ground.* But the fact of agency must be first established.* In Ingham v. Primrose,' the defendant had once made a complete bill, and the ground of the decision was that he had negligently omitted to cancel or destroy it effectually. The Claim of Plaintiff.— The fact that the defendant's indorsement on the bill was obtained by a fraudulent repre- 'LyDch V. Nurdin, i Q. B., 29 (E. C. L. R., vol. 41). ^Russell V. Langstaffe, Montague v. Perkins, 2 Doug., 514; 22 L. J. C. P., 187; Byles on Bills, 9th ed., 181. "Byles on Bills, 9th ed., 131. *4 Bing., 253 (E. C. L. R., vol. 13), 12 Mo., 484. *See the observations upon that case of Parke, B., in Robarts V. Tucker, 16 Q. B., 560 (E. C. L. R., vol. 71); of Williams, J., in Ex parte Swan, 7 C. B. N. S. , 445 (E. C. L. R., vol. 97); and of Blackburn, J., in Gum v. Tyrie, 4 B. cSz: S., 680, 713 (E. C. L., vol. 116). 'Awde v. Dixon, 6 Ex., 869; Kingsford v. Merry, 11 Ex., 577, in error,- i H. & N., 503. ' 7 C. B. N. S., 82 (E. C. L. R., vol. 97 ), 28 L. J. C. R, 294. SEC. 56.] FOSTER V. MACKINNON. 4II sentation that he was signing something else, is no answer to the claim of a bona fide holder for value, without notice of the fraud. No doubt, as a general rule, fraud vitiates all con- tracts. But a bill of exchange is not in the ordinary sense of the word a contract at all. The law-merchant imposes certain obligations on parties who put their names on bills of exchange, — obligations altogether apart from the ordinary obligations arising out of other contracts. Bills of exchange now form an important part of the currency of the country. No matter how a bill or note may be tainted with fraud, or even if it had been obtained by duress or by felony, that is no answer to an action at the suit of a bona fide \io\AQxiox\-s\M&:^ Parsonson Bills, ed. 1865, pp. 109-115, citing amongst other cases, Putnam v. Sullivan,^ where Parsons, C. J., says: "The counsel for the defendants agree that generally an endorse- ment obtained by fraud shall hold the indorsers according to the terms of it; but they make a distinction between the cases where the indorser through fraudulent pretences has been in- duced to indorse the note he is called on to pay, and where he never intended to indorse a note of that description, but a different note and for a different purpose. Perhaps there may be cases in which the distinction ought to prevail; as, where a blind man had a note falsely and fraudulently read to him, and he indorsed it, supposing it to be the note read to him. But we are satisfied that an indorser cannot avail himself of this distinction but in cases where he is not chargeable with any laches or neglect or misplaced confidence in others." In Rex V. Hales, ^ the prisoner had got from a member of parliament named Gibson a blank frank, which he subse- quently, by writing over the signature and altering the word "free" into "for" and adding "myself and partners" turned into a promissory note for 2,600/.; and, though the most eminent counsel of the day were retained to defend him, it 'Bayley on Bills, 472, 473, 534; Chitty on Bills, loth ed., 50, 53, 178; Byles on Bills, 8th ed., 57; Duncan v. Scott, i Camp., 100; Marston v. Allen, 8 M. & W., 494; Harvey v. Towers, 6 Ex., 656. ^4 Massachusetts Rep., 45. '17 How. St. Tr., 161. 412 FOSTER V. MACKINNON. [CHAP. l6, did not occur to any of them that the then necessary allega- tion in the indictment of the intent to defraud Gibson failed in proof, which it would have done if the argument urged here is well founded, viz., that Gibson was not liable on the note, and therefore could not be defrauded. So, in Rex v. Revett, Byles on Bills,' A. by false representations induced B. to sign his name to a blank stamped paper, which A. afterwards secretly filled up as a promissory note for lOo/. upon it. A. was indicted for defrauding C. ; and it was held that C. had his remedy against B. on the note, and that the fraud there- fore not being upon C. but upon B., the indictment was not sustained by the evidence. Wherever there is consideration, fraud may be disregarded. If a stolen bill gets into circula- tion, the acceptor is liable at the suit of a bona fide holder for value. ^ This was not a case of forgery: it was a mere frau- dulent procurement of the defendant's signature to a genuine and a complete bill. Thoroughgood's Case,^ is peculiar, and not very intelligible; and in the case cited from Keilway, 76b, the deed was fraudulently read by the grantee himself. Decision. — Nance v. Lary,* also cited in Parsons on Bills, 114, seems to be very much to the purpose. In that case, the defendant and one Langford being about to execute a bond in blank, the latter produced a sheet of paper, upon which the defendant signed his name; whereupon Langford suggested that the signature was so far from the bottom of the paper that there might not be room for the bond to be written above it, and produced another sheet for the defendant to sign so as to leave sufficient room for the intended bond. Langford, with apparent carelessness, slipped the first sheet aside, and signed the other with the defendant, who carried it to the clerk of the court to be filled up, leaving the former with Langford, under the impression that it had been or would be destroyed. Subsequently, Langford caused the note upon '8th ed., 124. ''Ingham v. Primrose, 7 C. B. N. S,, 82, 85 (E. C. L. R., vol. 97), 28 L. J. C. P., 294. Awde v. Dixon, 6 Ex., 869, is like Stagg V. ElHott, 12 C. B. N. S., 373 (E. C. L. R., vol. 104). '2 Co. Rep., 9b. '5 Alabama Rep., 370. SEC. 56. J FOSTER V. MACKINNON. 413 which the present suit was brought to be written over the blank signature of the defendant retained by him, and nego- tiated it to the plaintiff. Collier, C. J., said: "The making of the note by Langford was not a mere fraud upon the de- fendant; it was something more. It was quite as much a for- gery as if he had found the blank, or purloined it from the de- fendant's possession. If a recovery were allowed upon such a state of facts, then every one who indulges in the idle habit of writing his name for mere pastime, or leaves sufficient space between a letter and his subscription, might be made a bank- rupt by having promises to pay money written over his signa- ture. Such a decision would be alarming to the community, has no warrant in law, and cannot receive our sanction." In that case the defendant never intended to sign the in- strument at all. Byles, J., in his judgment in Swan v. North British Australasian Company,' in the Exchequer Chamber says: " The object of the law merchant as to bills and notes made or become payable to bearer is, to secure their circula- tion as money; therefore honest acquisition confers title. To this despotic but necessary principle, the ordinary rules of the common law are made to bend. The misapplication of a genuine signature written across a slip of stamped paper (which transaction, being a forgery, would in ordinary cases convey no title), may give us a good title to any sum fraudu- lently inscribed, within the limits of the stamp, and in America, where there are no stamp-laws, to any sum what- ever. Negligence in the maker of an instrument payable to bearer makes no difference in his liability to an honest holder for value: the instrument may be lost by the maker without his negligence, or stolen from him, still he must pay." If that be right, it can only be with reference to the case of a complete instrument; it can hardly be applicable to a case where a man's signature has been obtained by a fraudulent representation to a document which he never intended to sign. Then, the verdict was clearly against the weight of evi- dence upon the question of negligence, Can it be said that it was any other than gross negligence on the part of the de- '2 H. & C, 184. 414 FOSTER V. MACKINNON. [CHAP. 1 6, fendant to put his name upon the back of a document such as that described, without even looking at the face of it. If any one is to suffer from his misplaced confidence in Callow, it surely must be the defendant himself. Byles, J., said: "This was an action by the plaintiff as indorsee of a bill of exchange for 3000/., against the defend- ant, as indorser. The defendant by one of his pleas traversed the indorsement, and by another alleged that the defendant's indorsement was obtained from him by fraud. The plaintiff was a holder for value before maturity, and without notice of any fraud. There was contradictory evidence as to whether the in- dorsement was the defendant's signature at all; but, according to the evidence of one Callow, the acceptor of the bill, who was called as a witness for the plaintiff, he, Callow, produced the bill to the defendant, a gentleman advanced in life, for him to put his signature on the back, after that of one Cooper, who was payee of the bill and first indorser. Cal- low not saying that it was a bill, and telling the defendant that the instrument was a guarantee. The defendant did not see the face of the bill at all. But the bill was of the usual shape, and bore a stamp, the impress of which stamp was visible at the back of the bill. The defendant signed his name after Cooper's, he the defendant (as the witness stated) believing the document to be a guarantee only. The Lord Chief Justice told the jury that, if the indorse- ment was not the defendant's signature, or if, being his signa- ture, it was obtained upon a fraudulent representation that it was a guarantee, and the defendant signed it without know- ing that it was a bill, and under the belief that it was a guar- antee, and if the defendant was not guilty of any negligence in so signing the paper, the defendant was entitled to the verdict. The jury found for the defendant. A new trial was obtained, first, on the ground of misdi- rection in the latter part of the summing-up, and secondly, on the ground that the verdict was against the evidence. As to the first branch of the rule, it seems to us that the question arises on the traverse of the indorsement. The case presented by the defendant is, that he never made the SEC. 56. J FOSTER V. MACKINNON. 415 contract declared on; that he never saw the face of the bill; that the purport of the contract was fraudulently misdescribed to him; that, when he signed one thing, he was told and be- lieved that he was signing another and an entirely different thing; and that his mind never went with his act. It seems plain, on principle and on authority, that, if a blind man, or a man who cannot read, or who for some rea- son (not implying negligence) forbears to read, has a written contract falsely read over to him, the reader misreading to such a degree that the written contract is of a nature alto- gether different from the contract pretended to be read from the paper which the blind or illiterate man afterwards signs; then, at least if there be no negligence, the signature so ob- tained is of no force. And it is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the contract to which his name is appended. The authorities appear to us to support this view of the law. In Thoroughgood's ' it was held that, if an illiterate man have a deed falsely read over to him, and he then seals and delivers the parchment, that parchment is nevertheless not his deed. In a note to Thoroughgood's Case, in Eraser's edition of Coke's Reports, it is suggested that the doctrine is not confined to the condition of an illiterate grantor; and a case in Keilway's Reports^ is cited in support of this observa- tion. On reference to that case, it appears that one of the judges did there observe that it made no difference whether the grantor was lettered or unlettered. That, however, was a case where the grantee himself was the defrauding party. But the position that, if a grantor or covenantor be deceived or misled as to the actual contents of the deed, the deed does not bind him, is supported by many authorities: see Com. Dig. Fait (B. 2), and is recognized by Bayley, B., and the Court of Exchequer, in the case of Edwards v. Brown. ^ Ac- ' Case 2 Co. Rep., 9 b. ^Keilw., 70, p. 6. 'i C. &J., 312. 4l6 FOSTER V. MACKINNON. [CHAP. l6, cordingly, it has recently been decided in the Exchequer Chamber, that, if a deed be dehvered, and a blank left therein be afterwards improperly filled up (at least if that be done without the grantor's negligence), it is not the deed of the grantor; Swan v. North British Australasian Land Company.' These cases apply to deeds; but the principle is equally applicable to other written contracts. Nevertheless, this principle, when applied to negotiable instruments, must be and is limited in its application. These instruments are not only assignable, but they form part of the currency of the country. A qualification of the general rule is necessary to protect innocent transferrees for value. If, therefore, a man write his name across the back of a blank bill, stamps and parts with it, and the paper is afterwards improperly filled up, he is liable as indorser. If he write it across the face of the bill, he is liable as acceptor, when the instrument has once passed into the hands of an innocent indorsee forvalue before maturity, and liable to the extent of any sum which the stamp will cover. In these cases, however, the party signing knows what he is doing: the indorser intended to indorse, and the acceptor '2 H. & C, 175. Fraud — Personal Defense, Generally. — As a general rule fraud is a personal defense and can therefore be interposed be- tween immediate parties only. Jackson v. Henry, 10 Johnson, 184. If the bill or note gets into the hands of a subsequent party for value without notice, he can recover. A contract affected by fraud is voidable not void. The party making a negotiable con- tract induced by fraud may rescind it and treat it as though it had never been made; but he must do this before it comes into the hands of a bona fide holder. Page v. Krekey, 137 N. Y., 313; Na- tional Bk. V. Veneman, 43 Hun., 241; Clark v. Pease, 41 N. H., 414; Soudheim v. Gilbert, 117 Ind., 71; Walker v. Ebert, 29 Wis., 194; Chapman v. Rose, 56 N. Y., 137; Douglas v. Matting, 29 la., 498; Lewis v. Clay, 42 Solicitor's Journal, 151. Fraud. — "Bohemian Oats" Notes. — " Bohemian Oats " or "Red Line" wheat, contracts have been enforced in some states while in others they have not. In Ohio and Iowa they have been enforced when in the hands of subsequent bona fide holders. In Michigan the right of the holder to recover was denied upon the ground of public policy. Sutton v. Beckwith, 68 Mich., 303 (t888); McNamara v. Gargett, 68 Mich., 454; Hanks v. Brown, SEC. 56. J FOSTER V. MACKINNON. 417 intended to accept, a bill of exchange to be thereafter filled up, leaving the amount, the date, the maturity, and the other parties to the bill undetermined. But in the case now under consideration, the defendant, according to the evidence, if believed, and the finding of the jury, never intended to indorse a bill of exchange at all, but intended to sign a contract of an entirely different nature. It was not his design, and, if he were guilty of no negligence, it was not even his fault that the instrument he signed turned out to be a bill of exchange. It was as if he had written his name on a sheet of paper for the purpose of franking a letter, or in a lady's album, or on an order of admission to the Tem- ple Church, or on the fly-leaf of a book, and there had already been, without his knowledge, a bill of exchange or a promis- sory note payable to order inscribed on the other side of the paper. To make the case clearer, suppose the bill or note on the other side of the paper in each of these cases to be writ- ten at a time subsequent to the signature, then the fraudulent misapplication of that genuine signature to a different pur- pose would have been a counterfeit alteration of a writing with intent to defraud, and would therefore have amounted to 79 la., 560; Merrill v. Packer, 80 la., 542; Payne v. Raubinek, 82 la., 587; Kitchen v. Loudenback, 48 Ohio St., 177; Jacobs v. Mitchell, 46 Ohio St.; 22 Ohio Law ]., 388; Hess v. Culver, (Mich.), 43 N. W. Rep., 994; Davis v. Seely, 71 Mich. Fraud — Rights of Bona Fide Holder. — The general rule is well settled that one who acquires a commercial contract, without notice of existing equities, in the usual course of business, for a valuable consideration and before maturity, takes it unaffected by fraud in its origin. Swift v. Tyson, 16 Pet., i; Selser v. Brock, 3 Ohio St., 302; Gridley v. Bane, 57 111., 529; Clapp v. County of Cedar, 5 la., 15; 68 Am. Dec, 678; Wayne Agricultural Co. v. Cardwell, 73 Ind., 535; Brown v. Spofford, 95 U. S., 474; Burrill v. Parsons, 71 Me., 282. Fraud — Statutory Provisions Relating to. — The question, whether fraud shall effect the validity of a negotiable contract has been the subject of statutory regulations in some of the states. In Georgia it is provided that a bona fide holder shall be protected from the defenses of fraud. Merritt v. Bagwell, 70 Ga., 578. In Illinois, however, it is provided by statute that " if any fraud or circumvention be used in obtaining the making or execu- ting of any note it shall be void (not voidable). Hewitt v. Jones, 72 111., 218. It is well to observe here that the " fraud " used "in 4l8 FOSTER V. MACKINNON. [CHAP. t6, a forgery. In that case, the signer would not have been bound by his signature, for two reasons, — first, that he never in fact signed the writing declared on, — and, secondly, that he never intended to sign any such contract. In the present case, the first reason does not apply, but the second does apply. The defendant never intended to sign that contract, or any such contract. He never intended to put his name to any instrument that then was or thereafter might become negotiable. He was deceived, not merely as to the legal effect, but as to the actual contents of the instru- ment. We are not aware of any case in which the precise ques- tion now before us has arisen on bills of exchange or prom- issory notes, or been judicially discussed. In the case of Ing- ham V. Primrose,' and the case of Nance v. Lary,^ cited in i Parsons on Bills inn, both cited by the plaintiff, the facts were very different from those of the case before us, and have but a remote bearing oo the question. But, in Putnam v. '7 C. B. N. S., 83 (E. C. L. R., vol.97), 28 L. J. C. P., 294. '5 Alabama, 370. obtaining the making or executing " does not apply to the consid- eration upon which the note was given. Culver v. Hide and Leather Bank, 78 111., 625; Taylor v. Thompson, 3 111. App., 109; Anten v. Gruner, 90 111., 300. " It must be borne in mind " says Walker, C. J., "that the fraud or covin must relate to the obtain- ing of the instrument itself, and not to the consideration upon which it is based. It is not fraud which relates to the quality, quantity, value, or character of the consideration that moves the contract, but it is such a trick or device as induces the giving of one character of instrument under the belief that it is an other of a different character; such as giving a note or other agreement for one sum or thing, when it is for another sum or thing; or as giving a note under the belief that it is a receipt." Latham v. Smith, 45 III., 25, 27. Where the Delivery of the Contract is Obtained Through Fraud. — Delivery of a bill or note is a prerequisite to its existence as a contract. If therefore its possession is obtained through fraud the payee cannot maintain any action thereon. Burson V. Huntington, 21 Mich., 415; 4 Am. Dec, 407; Kinyon V. Wohlford, 17 Minn., 239; 10 Am. Rep., 165; Clarke v. Johnson, 54 111., 296; Hall V. Wilson, 16 Barb., 548; Cline v. Guthrie, 42 Ind., 227; 13 Am. Rep., 357. In this last case a man signed his name upon a blank piece of paper, and subsequently a promissory SEC. 56. J FOSTER V. MACKINNON. 419 Sullivan, an American case,' and cited in Parsons on Bills of Exchange,^ a distinction is taken by Ch. J. Parsons between a case where an indorser intended to indorse such a note as he actually indorsed, being induced by fraud to indorse it, and a case where he intended to indorse a different note and for a different purpose. And the court intimated an opinion that, even in such a case as that, a distinction might prevail and protect the indorsee. The distinction in the case now under consideration is a much plainer one; for, on this branch of the rule, we are to assume that the indorser never intended to indorse at all, but to sign a contract of an entirely different nature. For these reasons, we think the direction of the Lord Chief Justice was right. With respect, however, to the second branch of the rule, we are of opinion that the case should undergo further inves- tigation. We abstain from giving our reasons for this part of our decision only lest they should prejudice either party on a second inquiry. The rule, therefore, will be made absolute for a new trial. '4 Mass., 45. ^Vol. i., p. iiin. note was written over it. It was held that he was not liable thereon for the reason that no delivery of a note was ever made. See also Ingram v. Primrose, 7 Conn. (N. S.), 82; Nance v. Lary, 5 Ala., 370; Caulkins v. Whisler, 29 Iowa, 495; 4 Am. Rep., 236. Notes Obtained in Blank and Wrongfully Filled up. — The rule is well settled that where a person executes a commercial contract in blank, and entrusts it to an other that the former is liable according to its completed terms, if the same gets into the hands of a bona fide holder. Russell v. Langstaffe, 2 Doug., 514; Bank of Pittsburgh v. Neal, 22 How. Pa., 107; Erchelberger v. Old Nat. Bank, 103 Ind., 401; Fullerton v. Sturgis, 4 Ohio St., 529. Ld. Mansfield said "that an indorsement on a blank note is a letter of credit for an indefinite sum. As between the original parties of course no recovery can be had contrary to the agree- ment." McCoy V. Lockwood, 71 Ind., 319; Bedell v. Herring, 11 Am. St. Rep., 307; 77 Cal., 572. CHAPTER XVII. Defenses. — Illegality.* SECTION 57. A WANT OR FAILURE OF CONSIDERATION IN A COMMER- CIAL CONTRACT IS A PERSONAL DEFENSE AND AVOIDS THE CONTRACT ONLY PRO TANTO. ILLEGALITY OF CONSIDERATION IS USUALLY A REAL DEFENSE AND AVOIDS THE CONTRACT IN TOTO. WHERE A PART OF THE CONSIDERATION IS LEGAL AND A PART IS ILLEGAL THE WHOLE CONTRACT IS VOID. WIDOE V. WEBB.' In the Supreme Court of Ohio, Dec, 1870. \^Reported in 20 Ohio St., 431: 5 Am. Rep., 664.] The Form of Action. — The original action out of which the present proceeding in error arises, was brought by the present plaintiff against the defendant before a justice of the peace, and, by appeal from his judgment, came into the court of common pleas of Morrow county. The suit was upon a promissory note, made and delivered by the defendant to the plaintiff for $50rViT. and the petition was in the usual form. The defendant answered that the sole consideration of said note was spirituous liquors sold by the plaintiff to the de- fendant, which had not been inspected according to law, and *See upon the principal proposition as to the effect of illegal consideration: Hay v. Ayling, 16 Q. B., 431; Fareira v. Gabell, 89 Pa. St., 89; Shirley v. Howard, 53 111., 455; Scollans v. Flynn, 120 Mass., 271; Eagle v. Kohn, 84 111., 292; Aurora v. West, 22 Ind., 88; Cowing v. Altman, 71 N. Y., 435. ' This case is cited in Benjamin's Chalmers on Bills, Notes and Checks, iii; Daniel on Negotiable Instruments, 204; Wood's Byles on Bills and Notes, 241, 243; Tiedeman on Commercial Contracts, 179. SEC. 57. J WIDOE V. WEBB. 42 I which were so sold to be drank on the premises where sold, in violation of law. The subject-matter of this defence was traversed by re- ply, in which the plaintiff averred that the note was given for goods, groceries, and provisions sold by plaintiff to defendant before the date of the note. The issue made by these ' pleadings was tried by a jury and a verdict found for the defendant, which the plaintiff moved to set aside and grant him a new trial, on the ground of error in the charge of the court to the jury, and that the finding of the jury was against the law, and against the mani- fest weight of the evidence. This motion was overruled, and judgment entered on the verdict, to which plaintiff excepted. From a bill of exceptions taken by the plaintiff, it is shown that the defendant testified upon the trial that the note in suit was given for a balance of an account that had been running for a year and a half preceding the date of the note; that not less than three-fourths of the account was for spirit- uous liquors bought and drank by him from time to time at plaintiff's grocery, including therein, however, ale and beer; and that part of the account was for cigars, tobacco, and lunches. Other witnesses called by the defendant testified that they had seen defendant purchase and drink spirituous liquors at plaintiff's grocery and get the same charged in his account, and that they had frequently seen him purchase at plaintiff's grocery and have charged to his account all kinds of groceries for family use. On plaintiff's behalf, both he and his clerk testified that the account which formed the consideration of the note was- for groceries purchased out of the plaintiff's store, and that no part of the consideration was for spirituous liquors, to their knowledge. Thereupon counsel for plaintiff asked the court to charge' the jury " that if the consideration of the note in controversy was an account for spirituous liquors in part, sold by plaintiff to defendant, the plaintiff would be entitled to recover so much in this action as the price and value of the groceries so sold." 422 WIDOE V. WEBB. [cHAP. 1 7, This charge the court refused to give, and instructed the jury that if any part of the consideration for the note was in- toxicating Hquors sold to defendant by the plaintiff in violation of the statute prohibiting the sale of intoxicating liquor to be drank on the premises where sold, the plaintiff could not re- cover; the law being, that when any part of the entire con- sideration of a promise is illegal, the whole contract is void. To which charge of the court and refusal to charge as re- quested, the plaintiff excepted. The plaintiff subsequently filed his petition in error in the district court, asking for a reversal of the judgment of the court of common pleas, on the grounds of error in the refusal to charge as requested, and in the charge given to the jury, and in overruling the motion to set aside the verdict and grant him a new trial. The district court affirmed the judgment of the common pleas. And to reverse that judgment of affirm- ance the present petition in error is prosecuted. The Claim of the Plaintiff in Error. — The common pleas erred in refusing to charge the jury as requested by the plain- tiff, and in the charge given. 1. The consideration of the note was several. It was an account that had been accruing some eighteen months, and consisted of items that, from the nature of the transac- tion, must have been sold at divers times and on different days. In such dealings between parties, every item must have constituted a separate contract, as one was in no way dependent upon another, and the items had no necessary con- nection with each other. In such case the items purchased that were valid in law and constituted a good consideration are not to be affected by those that were illegal and for that reason void. The purchase of each item of the account was a several contract, is illustrated by the case of Robinson v. Green.' 2. If the different items composing the account consti- '3 Mete, 159. See also Mayor v. Pyne, 3 Bing., 285; Per- kins V. Hart, II Wheat., 237, 251; Sickles v. Patterson, 14 Wend., 257; Robinson v. Snyder, 25 Penn. St., 203; Parsons on Contr., 495- SEC. 57.] WIDOE V. WEBB. 423 tuted each a several contract, the plaintiff was entitled to re- cover to the extent of the vahd consideration.' 3. The verdict was against the weight of the evidence as well as against the law. The Claim of Defendant in Error. — The consideration of the note being a book account made up in part for intoxi- cating liquors sold in violation of law, the note is void. Being tainted with that illegal consideration, destroys the obligation entirely.^ Decision. — The evidence in this case tended to show that the consideration of the note sued upon was an existing in- debtedness of the defendant to the plaintiff on account for goods, etc., sold and delivered by the plaintiff to the defend- ant, the items of which had accrued at various times during the period of eighteen months preceding the date of the note. Some of these items were for necessary family groceries and some for spirituous liquors, sold to be drank at the place where sold; in violation of the statute. The court instructed 'The State v. Findley, lo Ohio, 51; Morris v. Way, 16 Ohio, 469; Doty V. The Knox County Bank, 16 Ohio St., 133; Parish v. Stone, 14 Pick., 198; Robinson v. Green, 3 Mete, 159; 2 Kent's Com., 467, 468; I Parsons on Contr. , 457. 'S. & C, 729, 1431; Collins V. Merrill, 2 Mete. (Ky.), 163; 3 Bibb., 500; 6 Dana, 91; 8 B. Monr., 98; 9 lb., 90; Deering v. Chapman, 22 Maine, 488; Hunt v. Knickerbocker, 5 Johns., 327; Greenaugh v. Balch, 7 Greenl. Rep., 462; Wheeler v. Russell, 17 Mass., 258; 5 B. & C, 406; Kepner v. Kelfer, 6 Watts, 231; Wright V. Gear, 1 Root, 474; Mitchell v. Smith, 4 Dall., 269; Roby V. West, 4 N. H., 287; i Taunt., 136; Bliss v. Negus, 8 Mass., 51; 5 N. H., 196; 6 N. H., 225; Cro. Eliz., 199; 3 Taunt., 226; I T. R., 227, 359; Comyn's Dig. — Assumpsit, B. B.; 11 East, 502; 7 T. R., 200; 2 Ventr., 223; 8 Johns., 253; Loomis v. New- hall, 15 Pick., 167; Parsons on Contr.j Chitty on Contr. (5th Am. ed.), 417, 427, 692, 694; Mete, on Contr. — Amer. Jurist (No. 43), 45 ; Higgins v. Pitt, 4 Exch., 324; Trovinger v. McBurney, 5 Cowen, 253; Baldwin v. Palmer, 10 N. Y., 232; Jones v. Waite, 35 E. C. L., 130; Woodruff v. Hinman, 11 Verm., 592; Gamble v! Grimes, 2 Carter (Ind.), 392; 9 Verm., 23, 310; Amstrong v. Toler, ir Wheat, 258; Perkins v. Cummings, 2 Gray, 258; Adams V. Bowen, 8 S. & M., 624; Arr v. Lacey, 2 Doug. (Mich.) Rep., 230; Miller v. Harden, 32 Ala., 30; Stanley v. Nelson, 28 Ala., 514; Bates V. Watson, i Sneed, 376; Nutter v. Stoner, 48 Maine, 163. 424 WIDOE V. WEBB. [CHAP. 1 7, the jury that, if any of the items for spirituous hquors thus illegally sold entered into and formed part of the consideration of the note, then the plaintiff could not recover; the law being that when any part of the entire consideration of a promise is illegal the whole contract is void. And the question before us is: Did the court err in so instructing the jury as to the law applicable to the case.'' The concurrent doctrine of the text-books on the law of contracts is, that if one of two considerations of a promise be void merely, the other will support the promise; but that if one of two considerations be unlawful, the promise is void. When, however, for a legal consideration, a party undertakes to do one or more acts, and some of them are unlawful, the contract is good for so much as is lawful, and void for the residue. Whenever the unlawful part of the contract can be separated from the rest it will be rejected, and the remainder established. But this cannot be done when one of two or more considerations is unlawful, whether the promise be to do one lawful act, or two or more acts, part of which are un- lawful; because the whole consideration is the basis of the whole promise. The parts are inseparable.' Whilst a partial want or failure of consideration avoids a bill or note only pro tanto, illegality in respect to a part of the consideration avoids it in toto. The reason of this dis- tinction is said to be founded, partly at least, on grounds of public policy, and partly on the technical notion that the se- curity is entire, and cannot be apportioned; and it has been said with much force, that where parties have woven a web of fraud or wrong, it is no part of the duty of courts of jus- tice to unravel the threads and separate the sound from the unsound.^ And, in general, it makes no difference as to the effect, whether the illegality be at common law. or by statute.' 'Metcalf on Contr., 246; Addison on Contr., 905; Chitty on Contr. , 730; I Parsons on Contr., 456; i Parsons on Notes and Bills, 217; Story on Prom. Notes, § 190; Byles on Bills, in; Chitty on Bills, 94. ^ Story on Prom. Notes, and Byles on Bills, supra. 'See authorities, supra. SEC. 57. J winoE V. WEBB. 425 This doctrine is abundantly sustained by the whole cur- rent of the decisions on the subject, both in England and in this country.' Quite a number of these cases cannot be distinguished from the case under consideration. Robinson v. Bland was the case of a suit on a bill of exchange given in part for money lost at play, and in part for money lent. The declaration contained special counts on the bill, and the common count for money lent, and it was held no recovery could be had on the bill, because part of its con- sideration was money lost at play, which was illegal; but as to the money lent, the plaintiff was allowed to recover on the common count. In Scott v. Gilmore,^ the suit was also on a bill of ex- change, given by the drawer to the keeper of a coffee house, in payment for the balance of a debt, part of which was for small sums of money loaned, and part for spirits sold in vio- lation of the statute, and it was held by Ch. |. Mansfield, that the security being entire could not be apportioned, and since it was given partly for a consideration not merely void, but illegal, the whole bill was void. Heath, J., said: "Per- haps it might he different if for part of the bill there were no consideration." The case of Deering v. Chapman, supra, was a suit on a promissory note in which part of the consideration was, as here, for spirituous liquors previously sold in violation of a statute, and several of the other cases cited are of the same character. In each of them the whole note was held to be tainted and utterly void. In none of them does a distinction ' Featherstone v. Hutchinson, Crokes EL, 200; Robinson v. Bland, 2 Burr. R., 1077; Scott v. Gilmore, 3 Taunt., 226; Thomas V. Williams, 10 Barn. & Cress., 664; Jones v. Waite, 35 E. C. L. (S Bing., N. C, 341); Armstrong v. Toler, 11 Wheat., 258; Bates V. Watson, i Sneed, 376; Orr v. Lacey, 2 Douglass, 230; 9 Verm., 23; Deering V. Chapman, 22 Maine, 488; Careleton v. Woods, 8 Foster (N. H.), 290; Hinds v. Chamberlain, 6 N. H., 225; Hin- man v. Woodruff, 11 Verm., 582; Perkins v. Cummings, 2 Gray, 258; 8 Sm. & Marsh:, 624; Loomis v. Newhall, 15 Pick., 159; Crawford v. Morrell, 8 Johns., 253. ^3 Taunt., 226. 426 WIDOE V. WEBB. [CHAP. I7, appear to have been taken between the case where the note was given at the time the illegal transaction took place, which entered into the consideration of the note, and was the im- mediate inducement to its execution, and the case where the note was subsequently given for the purpose of carrying out or securing the performance of the original illegal contract. On the contrary, they clearly proceed on the principle, that whenever the subject-matter of the contract can be traced back, between privies, to an original illegal contract, the sub- stituted security is void.' The application of these principles to the present case compels us to say, that the instruction given the jury by the court, upon the trial, was correct, and the judgment was properly affirmed by the district court. The suit was upon a promissory note alone — upon a single and entire promise. This note was given in settlement of an account embracing transactions between the parties for a period of eighteen months. The evidence tended to show that whilst some of these transactions were proper and legal, yet many of the items of the account were for intoxicating liquors sold by the plaintiff to the defendant in direct viola- tion of the provisions of a highly penal statute. The con- tract evidenced by the note was illegal and void, because these sales of liquors, which formed a part of its considera- tion, were clearly illegal. With respect to the items of the plaintiff's account which were unconnected with the illegal sales, he might well have maintained an action on the original contracts of sale, eiien after the giving of this note. For being utterly void it dis- cliar ged none of the just indebtedness of the defendant. But he chose to sue upon the note which was prima facie evidence of indebtedness to the extent of the whole sum promised to be paid, and thus attempted to throw upon the defendant the burden of showing how much of it was given upon an illegal consideration, and upon the court the task of separating the sound from the unsound. If this effort should result in his losing what was justly due him, we carr but repeat what was said in a similar case: " It is but a reasonable punishment for 'Adams et al. v. Rowan et al., 8 Smedes & Marsh., 624. SEC. 57.] WIDOE V. WEBB. 427 including with his just due that which he had no right to take." We are not unaware of a seeming conflict between the conclusion at which we have arrived, and the third point in the syllabus of the case of Doty v. The Knox County Bank.' We are by no means satisfied that the judgment in that case was erroneous. The question there arose upon a petition to vacate a judgment which had been rendered at a previous term against Doty and in favor of the bank for upwards of $4,000, by confession on a warrant of attorney. The suit had been brought on a bill of exchange for $4,000, and it appeared upon the hearing of the petition for vacation, that a portion of a prior bill for $1,800 entered into and formed part of the con- sideration of the bill upon which judgment had been entered. And that, in the previous discounting of the $1,800 bill, some foreign bank bills of a less denomination than ten dollars had been paid out by the bank, contrary to the provisions of the statute upon that subject. The court below held that the bill '16O. St., 133. Illegality — When It Exists. — The defense of illegality may be interposed when by the terms, purpose, or consideration of a negotiable contract it contravenes: (a) some provision of the statutory law; (b) or the common law; {c) or public policy. The statute may avoid a contract in two ways: (a) where it declares the same to be void; and (^b^ where it iixes or inflicts a penalty for the violation of such provisions. This prohibitory penalty of the statute must be clear and unequivocal. Anson on Contracts, p. r72; Pollock on Contracts, 253, 254. If the pen- alty fixed by the statute for its violation is for administrative pur- poses only and not as a prohibition then the defense of illegality is but a personal defense and a bona fide holder may recover. Paton V. Coit, 5 Mich., 505. Illegality — Burden of Proof, When Statute Does Not Make Void. — Wherever the consideration of a commercial con- tract, between the original parties has been illegal, especially if in violation of a positive prohibition of statute, proof of such ille- gality throws upon the holder the burden of proving that he got it bona fide, and gave value for it. Harvey v. Towers, 6 Exch., 656; Smith V. Braine, 16 Q. B., 201; Bailey v. Bidwell, 13 Mees. & W., 73. The same rule applies where it is shown that the paper was obtained by fraud, or duress, or stolen, or when put in circulation by fraud. Mills v. Barber, i Mees. & W., 425; Aldrich v. War- ren, ]6 Me., 465. When a part of the consideration of a commercial contract is illegal, the whole contract is void. Coburn v. Odell, 30 N. H., 428 WIDOE %l. WEBB. [chap. 1 7, of $1,800, by reason of the premises, was wholly void, and the bank thereupon remitted upon its judgment so much of the $1,800 as had entered into the consideration of the bill on which judgment had been entered. The residue of this bill was found to have a good and valid consideration, to wit, other and previous bills of exchange on which Doty was justly indebted. The statute forbade the vacating of the judgment until it should be adjudged that there was a valid defence to the action; and the question was whether, after this remittitur, the judgment thus reduced should be wholly vacated, and the bank be required to bring its action on the valid bills, which had entered into the consideration of the bill in suit, and as to which there was no defense. The court refused to vacate the judgment in toto, and drive the parties into further litigation, which was required neither by considerations of justice, nor 540; Carlton v. Whittier, 5 N. H., 196; Bearing v. Chapman, 22 Me., 488. Illegality — Effect of Part Payment. — Neither will the fact that there has been a partial payment of the note alter this rule, even though the amount of such payment is equal to the ille- gal consideration which entered into the note; for the reason that the law will apply such payment to the consideration of the note which was legal. Caldwell v. Wentworth, 14 N. H., 431. Effect of Illegality Upon the Contract, When Once Renewed. — If the consideration of a commercial contract is ille- gal, a renewal of it does not cure the defect. Neither will the substitution of a new contract. Preston v. Jackson, 2 Stark, 237; Chapman v. Block, 2 B. & Aid., 588. If, however, on the renewal or substitution the illegal part is excluded, the renewal or substi- tuted contract may be enforced. Hay v. Ayling, 20 L. J. Q. B. , 171; i6 Q. B., 423; Boulton V. Coghlan, i Bing., 640. What Contracts are Tainted W^ith Illegality. — It may be said as a general rule that the following commercial contracts may not be enforced because of illegality; 1. Those made with alien enemies and in aid of rebellion (Harraner v. Doane, 12 Wall., 342; Critcher v. Holleway, 64 N. C, 526, also 528; Kingsbury v. Fleming, 66 N. C, 524). 2. Bribery, contracts (Parsons v. Thompson, i H. BL, 322; Nichols V. Mudgett, 32 Vt. , 546; Martin v. Wade, 37 Cal., 168; Ham V. Smith, 87 Pa. St., 63; Tool Company v. Norris, 2 Wall., 45); 3. Lobbying contracts (Marshall v. B. & O. R. R. Co., 16 How., 314; Rose V. Truax, 21 Barb., 361); 4. Wagering contracts (Walpole v. Saunders, 16 Eng. C. L., 276; Brown v. Leeson, 2 H. BL, 43); SEC. 57.] WIDOE V. WEBB. 429 the provision of the statute, and would have left the parties where they then stood. It is not every defence which might be available when set up by answer, at the proper time, that will require a judgment to be vacated in order that it may be interposed. In the case referred to, the judgment of the court below was affirmed by this court. Whilst we think that judgment may well be up- held, yet as to the third point of the syllabus which holds that, in so far as the prior illegal bill entered into the consid- eration of the renewed bill, the latter was merely rendered void pro tanto for want of consideration, a majority of the court, upon full consideration, think it cannot be reconciled with the current of the authorities, and that, in so far as it conflicts with the present decision, it is untenable. The judgment of the district court is affirmed. Day, J. , concurred in the judgment of affirmance, but not in the modification of the case of Doty v. The Knox County Bank. 5. Compounding of crimes (Galton v. Taylor, 7 T. Rep., 475; Murphy v. Bottomer, 40 Mo., 67;" Roll v. Ragnet, 4 Ohio, 400; Gardner v. Moxey, 9 B. Mon., 90); 6. Contract in restraint of trade (Mitchell v. Reynolds, i P. Wm., 181; Ross v. Sadgleer, 21 Wend., 166; Beal v. Chase, 31 Mich., 490); 7. Contracts for the procurement of marriage and divorce (Adams v. Adams, 25 Minn., 72; Everhart v. Puckett, 73 Ind., 409; Adams v. Adams, 91 N. Y., 381; Phillips v. Meyer, 82 111. ,67); 8. Contracts in restraint of marriage (Hartley v. Rice, 10 East, 22 ); 9. Contracts in relation to offenses against morality and religion, (Jackson v. Duchaire, 3 T. Rep., 551; Brown v. Kinsey, 81 N. C, 245); TO. Usury (Byles on Bills, 140). Illegality — Usury. — Usury is said to be an indictable mis- demeanor at common law. Byles, Bills 5: N., 312. To make a contract void on account of usury, there must be a loan of money as well as a corrupt intention. Again, it is said that at common law it was lawful to exact any rate of interest. Tied. Com. Paper, § 196. No one can become a bona fide holder of a note or bill which the statute declares to be void for usury. Rodecker v. Lit- tauer, 8 C. C. A., 320; 59 Fed., 857; Claflin v. Boorum, 122 N. Y., 385, 25 N. E., 360; Tilden V. Blair, 21 Wall., 241; Colby v. Parker, 34 Neb., 510, 52 N. W., 693. The statutes of each state must be examined to know the effect of usury in each of the juris- dictions. CHAPTER XVIII. Defenses — Infancy. * SECTION 58. MINORS MAY ALWAYS PLEAD INFANCY IN BAR OF AC- TIONS UPON THEIR COMMERCIAL CONTRACTS UNLESS THE SAME WERE EXECUTED AND DELIVERED FOR: (a) NECESSARIES, OR (b) IN SATISFACTION OF A TORT. WILLIAMSON V. WATTS.' In the Court of King's Bench, Dec, 1808. [Reported in i Campbell, SS--] The Form of Action. — Assumpsit on a bill of exchange. Plea, infancy. Replication, that the bill was accepted for necessaries, and issue thereupon. 'This case is cited in, Daniel on Negotiable Instruments, 225; Wood's Byles on Bills and Notes, 117, 120; Randolph on Com- mercial Paper, 393; Story on Bills, 84, 85; Chitty on Bills, 18, 19; Ames on Bills and Notes, 463; Benjamin's Chalmers, on Bills, Notes and Checks, 73; Norton on Bills and Notes, 208, 210. *An infant cannot accept a bill of exchange for necessaries. Incapacity — Infants — Liability for Necessaries and Torts. — Infants are not liable upon their contracts as a general rule, unless the same have been duly ratified. If, however, the contracts are e.\ecuted for necessaries, or given in satisfaction of damages growing out of a tort, his infancy is no bar to a recovery. Guthrie v. Murphy, 4 Watts (Pa.), 80; Angel v. McClellan, 16 Mass., 28; Bradley v. Pratt, 23 Vt., 378. That he is liable for his torts see, Ray v. Tibbs, 50 Vt., 688; Cooley on Torts, 103 et. seq. If an infant and an adult execute a note jointly, the adult only is liable. In England it is held that the action may be brought against the adult without making the infant a party. Burgess v. Merrill, 4 Taunt., 468. See also Taylor v. Dansby, 42 Mich., 84; Slocum V. Hooker, 12 Barb., 563. See as well the statutes of your state. Incapacity — Coverature. — At common law a married woman could not bind herself as the drawer, acceptor, maker, or indorser SEC. 58. J WILLIAMSON V. WATTS. 431 Decision. — Sir James Mansfield, C. J., said, This action certainly cannot be maintained. The defendant is allowed to be an infant; and did any one ever hear of an infant being liable as acceptor of a bill of exchange.'' The replication is of a commercial contract. Chitty on Bills, 28; Waterbury v. An- drews, 67 Mich., 282; Mason v. Morgan, 2 Ad. & EL, 30; Howe V. Wildes, 34 Me., 566. This common law rule has been greatly modified in many jurisdictions so that now she may execute these contracts and render her sole and separate estate liable as though she were feme sole. As a general rule, however, it must appear expressly: 1. That she intended to charge her separate estate; and 2. That the consideration was for the benefit of her estate. McVey v. Cantrell, 70 N. Y., 295; Yale v. Dederer, 22 N. Y., 450; Corn Exchange Ins. Co. v. Babcock, 42 N. Y., 613; Frank v. Lillienfield, 33 Grat. (Va. ), 394; Morrison v. Thistle, 67 Mo., 596; Williams v. Urmston, 35 Ohio St., 296. See also Kenston Ins. Co. V. McClellan, 43 Mich., 564. Incapacity of Bankrupts. — A bill or note, executed by a bankrupt after his discharge, for a prior debt, the consideration of which being the discharge of bankruptcy proceedings, is void. Fell V. Cook, 44 Iowa, 485; Hersey v. Elliott, 67 Me., 527; Story on Bills, § 102. Incapacity of Persons Under Guardianship. — "Persons under guardianship,'' says Mr. Daniel, " whether for infancy, im- becility, improvidence, or otherwise, cannot contract, and there- fore cannot be parties to negotiable instruments. Therefore if a spendthrift, under guardianship, indorse a note, he does not pass title, and is not bound by the indorsement. It is simply void." Daniel on Negotiable Instruments, § 250; Lynch v. Dodge, 130 Mass., 458. Incapacity of Persons Who Execute Commercial Con- tracts While Intoxicated. — In speaking of the effect of intoxi- cation of the maker upon commercial contracts, Williams, J. , in the case of The State Bank v. McCoy, (19 P. F. Smith (Pa.), 204), said: "If a man voluntarily deprives himself of the use of his reason by strong drink, why should he not be responsible to an innocent party for the acts which he performs when in that condi- tion? It seems to me that he ought, on the principle, that where a loss must be borne by one of two innocent persons, it shall be borne by him who has occasioned it ... . But there is another and controlling reason for holding the maker liable to the indorsee in such case, founded on principles of public policy and the neces- sities of commerce. The exigencies of trade require that there should be no unnecessary impediments to the ready circulation and currency of negotiable paper, but that it should be left free to pass from hand to hand like bank notes, and perform the functions of 432 WILLIAJISDN V. WATTS. [CHAP. 1 8, nonsense and ought to have been demurred to. As the point of law is so clear, I am strongly inclined to non-suit the plain- tiff. However, i( I am required to hear the evidence, I will do so, and the defendant will find redress in the court above, should the verdict be against her. money, untrammelled by any equities or defenses between the original parties. If, then, it should be held that the drunkenness of the maker avoids the note in the hands of the indorsee, it is ob- vious that such a rule would greatly clog and embarrass the circu- lation of commercial paper, for no man could safely take it with- out ascertaining the condition of the maker or drawer when it was given, although there might be nothing suspicious in its appear- ance or unusual in the character of the signature." The law formerly was that a party to a contract could not avoid it because he was so drunk at the time he signed it that he could not understand it. It has also been held that a party to a contract cannot avoid it on account of intoxication, unless another party to it used means to induce such intoxication; but the de- cided weight of authority now is that a party may avoid a contract made by him when he is so drunk that he cannot understand its effects and consequences, though no such means were used. It is a violation of moral obligation and legal duty to take advantage of a man in such a defenseless situation, and, if the intoxication was induced by the party taking such advantage, he would be guilty of still greater moral turpitude. Barrett v. Buxton, 2 .\.iken, 167; Bush V. Breinig, 113 Pa. St., 310, 6 Atl., 86; Prentice v. Achorn, 2 Paige, 29; 7 Daniel, Neg. Inst. § 214. A person entering into a contract, while temporarily deprived of his reason by intoxication, may avoid or ratify it when he becomes sober. It is not absolutely void. If the paper is negotiable, it cannot be avoided in the hands of an indorsee in good faith for a valuable consideration; and if such paper is indorsed before it has become due, for a valuable consideration, such defense cannot avail against the assignee with- out proving that he had notice of the defense before the indorse- ment, or notice of facts or circumstances sufficient to induce a rea- sonable man to inquire of the maker as to the defense. It may be said that a person who executes a proposed negotiable paper, while deprived of reason by insanity, may avoid it in the hands of an in- nocent indorsee, and that the same rule should apply when the person is deprived of reason by intoxication. The considerations upon which the rules stand are dissimilar. Insanity is involuntary, it is a disease, and is a more permanent state, and usually is not the result of the act of the person imposed upon; while drunken- ness is voluntary, and is a temporary state, and is regarded as a vice, — the helpless condition of the drunkard is his own fault. Other reasons support the rule that negotiable paper cannot be avoided in the hands of innocent holders because of intoxication. SEC. 58. J WILLIAMSON V. WATTS. 433. It appeared that the defendant was a woman of the town, and that the consideration for the acceptance was the sale of silk stockings and other expensive articles of dress. Where- upon a non-suit was directed.' If the loss must fall upon one of two innocent persons, it should be borne by the one whose fault contributed to it, if the fault of either did. There are also considerations of public policy which con- tribute to support the rule. It is believed that the exigencies of business and the necessities of commerce demand that negotiable paper shall pass from hand to hand without unnecessary impedi- ment. McSparran v. Neeley, 91 Pa. St., 18; Miller v. Finley, 26 Mich., 249; Smith v. Williamson, 8 Utah, 219. It has been held that total drunkenness producing complete suspension of reason is a defense to an action on a bill or note. Berkley v. Cannon, 4 Rich. Law (S. C. ), 136; Molton v. Camroux, 2 Exch., 487; Gore v. Gibson, 13 Mees. & W., 623; Holland v. Barnes, 53 Ala., 83. The former rule was that a man could not protect himself from any deed or agreement by pleading drunkenness, unless he could show that the drunkenness was brought about by the connivance of him who procured the deed or agreement. Cooke v. Clay- worth, 18 Ves., 12. Drunkenness must be specially pleaded. Gore v. Gibson, 13 Mees. & W., 623. Illustrative cases on Bills and Notes, 193. ' I do not find any case in which it has been expressly decided, that an infant may not bind himself by a negotiable instrument for necessaries; and in Williams v. Harrison, Carth. 160, the court of K. B. in the time of Ld. Holt, seem rather to have been of opin- ion, that he might, although not liable upon a bill of exchange drawn in the course of trade. It is now settled, however, that an account stated by an infant, even of moneys due for necessaries, is invalid, Trueman v. Hurst, i T. R., 40; Bartlettv. Emery, lb., 42; and it seems inevitably to follow, that he cannot be bound by his signature to a negotiable bill or note, as that not only prima facie admits the debt, but if valid, would render him liable to an action at the suit of the indorsee in which the amount of the orig- inal debt could not be disputed. The old doctrine, that a single bill given by an infant for necessaries is binding, though of no im- mediate practical use such an instrument being now as rare as a statute staple, seems to afford an argument from analogy to show, that a promissory note given by an infant for necessaries would be binding, if payable only to the person who supplied them. Co. Litt., 172 a. CHAPTER XIX. Bona Fide Holder.— Who Is?'' SECTION 59. A HOLDER OF NEGOTIABLE PAPER, WHO TAKES IT BEFORE MATURITY, FOR A VALUABLE CONSIDERA- TION, IN THE USUAL COURSE OF TRADE, AND WITH- OUT KNOWLEDGE OF FACTS WHICH IMPEACH ITS VALIDITY BETWEEN ANTECEDENT PARTIES, HOLDS IT BY A GOOD TITLE, AND MAY MAINTAIN AN ACTION UPON THE SAME. JOHNSON .'. WAY.i In the Supreme Court, Ohio, Dec, 1875. \Reported in 2"^ Ohio St. , J/4. ] The Form of Action.— The plaintiff brought suit in the Court of Common Pleas of Portage county to recover of the 'This case is cited in Daniel on Negotiable Instruments, 769, 775; Wood's Byles on Bills and Notes, 210; Benjamin's Chalmers on Bills, Notes and Checks, 103; Tiedeman on Commercial Paper, 280, 289; Norton on Bills and Notes, in, 301, 304. *i. A holder of negotiable paper, who takes it (i) before maturity, (2) for a valuable consideration, in the usual course of trade, and (4) without knowledge of facts which impeach its val- idity between antecedent parties, holds it by a good title. 2. To defeat his recovery thereon, it is not sufficient to show that he took it under circumstances which ought to excite sus- picion in the mind of a prudent man. 3. To have that effect, it must be shown that he took the paper under circumstances showing bad faith or want of honesty on his fart. 4. Circumstances tending to show bad faith or fraud in tak- ing such paper, are admissible in evidence, and the establishment of such bad faith or fraud, whether by direct or circumstantial evi- dence, subjects the holder of paper so taken to defenses existing between antecedent parties. SEC. SQ.j JOHNSON V. WAY. 435 defendant the amount of two promissory notes of seventy-five dollars each, of which the following is a copy: ' ' State of Ohio, July 2p, i86p. " Three months after date, I promise to pay to the order of L. A. Wilder, seventy-five dollars, for value received, with use. [Stamp.] ''Solomon Way." "Indorsed.- I hereby certify that I ain worth $8,000, consisting of personal property to the amount of $1,000 and one hundred and seventeen acres of land. I make this state- ment for the purpose of obtaining credit. " Solomon Way." "Indorsed, without recourse, to L. A. Wilder." The second note is like the first, except due in four months after date. On the trial the plaintiff admitted that the notes were given for a worthless patent right metallic roofing cement, and were without consideration, as between the original parties. The proof shows that one Lewis D. Joy bought the notes before maturity; that Joy paid $100 cash for each $150 of notes, and received them indorsed "without recourse; " that the plaintiff bought the notes of Joy before maturity, and paid the face thereof in coal stock of the Trumbull Coal Company (an incorporated mining company), at fifty cents on the dollar of its par value; that the coal stock was delivered to Joy and the notes to Johnson before they matured, and without any actual notice of any defense. On the trial the plaintiff asked the court to charge the jury as follows: "I. Suspicion of defect of title, or fraudulent inception, or the knowledge of circumstances which would excite such suspicion in the mind of a prudent man, or gross negligence on the part of the taker at the time of the transfer, will not defeat his title; that result can be produced only by bad faith on his part; mere want of caution and care is not enough. "2. In brief, did the plaintiff or Joy buy the notes in good faith and without fraud, for value, before due.? If so, 436 JOHNSON V. WAY. [CHAP. I9, and without notice of any defect, plaintiff is entitled to re- cover. It is a question of good faith and fraud, and not of carelessness or negligence on the part of plaintiff or Joy, un- less it amounts to fraud or want of good faith. "3. That the law presumes prima facie in favor of every holder of negotiable paper, that, ist. He is the owner of it; 2d. That he took it for value; 3d. Before due; 4th. In the regular course of trade; and plaintiff is entitled to re- cover, unless these presumptions of law are overcome by proof in the case." The court refused to charge as requested, but charged the jury upon the point in question as follows: "If the proof shows that both Johnson and Joy took these notes with notice of their infirmities, then plaintiff ought not to recover, and upon this proposition the burden of proof rests upon the defendant. "To constitute a sufficient notice, it is not essential that the party should have had actual positive notice of the defects of the notes, but if the circumstances and facts connected with, and surrounding the transfer, whether they appeared upon the notes themselves, or outside of them, were of such strong and pointed character as to put the purchaser on in- quiry, then the law presumes that he did make those inquiries, or that if he did not he should bear the responsibility in the same manner as if he had made them, and they had led him to a full knowledge of the whole truth connected with giving the notes. The purchaser was not bound to make inquiries, unless there was something in the circumstances of the case that would have put an ordinarily careful and prudent man upon investigation. But while the purchaser was not bound to make inquiries from motives of mere curiosity and suspi- cion, yet he was not at liberty to shut his eyes to facts and circumstances that presented themselves to him, if those facts and circumstances would have attratted the attention of a man of common prudence. It was not enough if the facts and circumstances were merely sufficient to suggest inquiry by the most cautious; nor does the law require circumstances so startling as to awaken investigation on the part of the most dull and stolid. But if the defendant has shown you by testi- SEC. 59. J JOHNSON V. WAY. 437 mony, to your satisfaction, that Joy and Johnson had actual notice of the time of the purchase of the notes of their de- fects and infirmities, or if they had such knowledge of facts and circumstances as to put a reasonable and prudent man upon inquiry, then the plaintiff can not recover." To the refusal of the court to charge as requested, and to the charge as given, the plaintiff excepted. Judgment was rendered for the defendant, and on petition in error the judg- ment of the Common Pleas was affirmed by the District Court. It is now sought to reverse the judgments of the, courts below for error in the charge given to the jury on the trial in the Court of Common Pleas. The Claim of Plaintiff in Error. — The court erred in its charge, which was, in substance, that "the plaintiff, having admitted that the notes were without consideration between the original parties, he is not entitled to recover, unless he proves (independent of any presumption of law) that he bought them before due, and paid value in the regu- lar course of trade.' And as to notice, see the following cases: — Goodman v. Simons,^ Andrews v. Pond,' Fowler v. Brantly,* Bank of Pittsburg v. Neal.'* The indorsement furnished no evidence or ground of suspicion to put plaintiff on inquiry." The purchaser of commercial paper, before due, in good faith, for value, in the regular course of trade, holds it dis- charged of all prior equities. Circumstances of suspicion that would attract the attention of a man of common pru- dence, or even carelessness or gross negligence on his part, at 'i Parsons on Notes and Bills, 185; Swift v. Tyson, 16 Pet., i6; Nixon v. DeWolf, 10 Gray, 348; Dumont v. Williamson, i& Ohio St., 115; Davis v. Bartlett, 12 lb., 544. ^ 20 How., 365. '13 Pet, 65. *i4lb., 318. *22 How., 108; 2 Parsons on Con., 3, 4. "Russell V. Ball, 2 Johns., 50; Goddard v. Lyman, 14 Pick., 268; Bisbing v. Graham, 14 P. S., 14; Epler v. Funk, 8 Barr., 468. 438 JOHNSON V. WAY. [CHAP. I9, the time of jthe purchase, will not defeat his title. That can only be effected by actual notice, or fraud on his part.' The rule in England originally for a long period protected the holder against the fraud of antecedent parties, unless he was shown to have had actual notice, or was guilty of bad faith. It was first announced by Ld. Mansfield in 1758, in Miller v. Race,^ and was reaffirmed by the same judge in Grant v. Vaughn.' In 1764, and through all the long period following it, not only in that, but the various other courts of that country, it remained the unquestionable law of the land down to 1824, when Gill v. Cubit,* changed the rule, and made the holder chargeable with knowledge, if the circum- stances were such as ought to have excited the suspicions of a person of reasonable care and prudence. In 1834, in Crook v. Jadis,^ the Court of King's Bench again changed the law, and held that the owner should be protected unless guilty of gross negligence in the purchase. But in 1836, the law having been found not only unsatisfac- tory to commerce, but to the courts themselves as being too variant and changeable, and depending upon the intelligence and capacity not only of the purchaser, but even of the jury who might try the question, that same court, in Goodman v. Harvey, rising above the erroneous precedents of the cases, commencing with Gill v. Cubit, and seeming to appreciate the increased and constantly increasing requirements of the business interests of the country and of trade, brushed away the uncertainty and changeableness attendant on the applica- tion of the rule as held in Gill v. Cubit and Crooks v. Jadis, and returned to the original doctrine of Miller v. Race, which has ever since been the settled law of that country, affirmed by numerous decisions since then, so repeatedly and decidedly that no late jurist or elementary writer is found to dispute the 'Murray v. Lardner, 2 Wall., 121; Goodman v. Harvey, 4 Adol. & Ellis., 470. ^i Bur. King's Bench Rep., 452. '3 Bur. 15, 16. *3 Barn. & Cress., 466. "5 Barn. & Ad., 909. SEC. 59. J JOHNSON V. WAY. 439 proposition, "tliat nothing short of actual notice, or bad faith (fraud) will defeat the title of the holder."' For the law as declared in this country see: Swift v. Ty- son," Goodman v. Simons,' Bank of Pittsburg, v. Neal,* Mur- ray V. Lardner,' Edwards on Bills and Notes,* Uther v. Rich,' Steinbacker v. Boker,' Magee v. Badger, « Belmont Bank v. Hodge," Brush v. Scribner." Decision. — The questions made in the case relate to the rights of indorsees of negotiable paper, and arise upon the charge of the court to the jury. Though other questions are made in argument, we do not deem it important to notice here but one of the grounds of exception. The court charged the jury, that, as the notes were con- ceded to be invalid as between the original parties, the plain- tiff, though an indorsee of the notes for value before due, could not recover, if he had such knowledge of facts and cir- cumstances as to put an ordinarily careful and prudent man upon inquiry as to the infirmities of the notes. The question, then is, whether this rule is to be applied to a holder of negotiable paper, and to whom it is indorsed in the usual course of trade, for value before due. It was early the settled law in England, in regard to paper drawn in a form to pass from hand to hand in the course of business and trade, that the holder, who came by it fairly 'Raphael v. Bank of England, 84 English Com. Law, 161; Carlon v. Ireland, 85 Com. Law, 765. '16 Pet, 15. "20 How., 343. * 22 lb., 108. ^2 Wall., no. »3i8. ' 10 Adol. & Ellis, 784. '34 Barb., 436. '34 N. Y., 247. '"35 lb., 65. " II Conn., 388; 10 Cush., 488; 4 Ga., 287; 13 Ala., 390. 440 JOHNSON V. WAY. [chap. 1 9, and honestly, before due, for a valuable consideration, had a good title.' In 1824, in Gill v. Cubit, ^ the Court of King's Bench ad- ded a new limitation to the title of the holder of negotiable paper, and held that he acquires no title, as against the equi- ties of antecedent parties, if he takes it under circumstances which would excite the suspicions of a prudent and careful man. This rule was followed for a number of years in Eng- land, and by many of the courts of this country. But in 1834, in Crook v. Jadis," this rule was so far shaken, that an indorsee of a bill of exchange was permitted to recover against the drawer unless he proved that the indor- see was guilty of gross negligence in taking the bill; and two years later, in Goodman v. Harvey,^ it was decided that gross negligence is not alone enough to destroy the title of a holder for value, but that a case of bad faith in taking the security must be made against him, in order to defeat the claim. Since 1836, the rule established in Goodman v. Harvey has been followed by the British courts, and may now be re- garded as the settled law of that country.^ Although the rule declared in Gill v. Cubit has been fol- lowed by many of the courts of this country, it has been so generally repudiated by the more modern decisions, and that of Goodman v. Harvey, approved, that the doctrine of this case may now be regarded to be the American as well as Eng- lish law upon the subject.'' 'Salk., 126; Miliary. Race, i Bur., 452; Peacock v. Rhodes, Doug., 633; Lawson v. Weston, \ Esp., 26; Gorgier v. Mieville, 3 Barn. & Cres., 45. ^3 Barn. & Cres., 466. ■' 5 Barn. & Ad., 909. *4 Ad. & EL, 870. ^Raphael v. The Bank of England, 17 C. B. (84 E.G. L. ), i6i- "Worcester County Bank v. Dorchester and Milton Bank, 10 Cush., 488; Smith v. Livingston, 11 1 Mass., 342; Matthews v. Poy- thress, 4 Geo., 287; Miller v. Einley, 26 Mich., 249; Phelan v. Moss, 67 Penn. St., 59; Magee v. Badger, 34 N. Y., 247; Belmont Bank v. Hoge, 35 N. Y., 65; Goodman v. Simonds, 20 How., 343; Murray v. Lardner, 2 Wall., no; Hotchkiss v. National Bank, 21 Wall., 354; i Smith's Lead. Cas. (7 Am. ed.), 825; Redfield & Bigelow's Lead. Cas. on Bills and Notes, 257. SEC. 59-] JOHNSON V. WAY. 441 In the case of the Belmont Bank v. Hoge, supra, the view of the New York Court of Appeals upon the question is stated as follows: ' ' One who, for full value, obtains from the apparent owner a transfer of negotiable paper before it ma- tures, and who has no notice of any equities between the original parties, or of any defects in the title of the presump- tive owner, is to be deemed a bo7ia fide holder. He does not owe to the party who puts such paper in circulation the duty of active inquiry, to avert the imputation of bad faith. The rights of the holder are to be determined by the simple test of honesty and good faith, and not by mere speculation as to his probable diligence or negligence." In Smith v. Livingston,' the court disapprove the rule of Gill v. Cubit, and say: "Circumstances which might excite the suspicions of one man might not attract the attention of another. It is a rule which business men can not act upon in the ordinary affairs of life with any certainty that they are safe." ' III Mass., 345. Purchaser for Value Without Notice — Defined. — A " bona fide holder," or a "purchaser for value without notice," of a commercial contract, is one who has taken it: 1. Before maturity; 2. For a valuable consideration; 3. In the due course of business; and 4. Without notice of its dishonor or of facts which impeach its validity. Miller v. Race, i Burr., 452; McCauIey v. Murdock, 97 Ind., 230; Scotten v. Randolph, 96 Ind., 581; Doane v. Kind, 30 Fed. Rep., 106; Adams v. Robinson, 69 Ga., 627; Trust Co. v. Bank, 101 U. S., 68; Whistler v. Forster, 14 C. B. (N. S.), at 258; Barnum v. Phenix Co., 60 Mich., 388; Gee v. Saunders, 66 Tex., 333; Palmer v. Marshall, 60 111., 289; Swall v. Clarke, 51 Col., 227; Ward v. Howard, 88 N. Y., 74; Johnson v. Way, 27 Ohio St., 374; Robertson v. Coleman, 141 Mass., 231; Dreilling v. First Nat. Bk., 43 Kan., 197; 23 Pac. Rep., 94. Purchaser Before Maturity. — In the case of Fisher v. Le- land, Shaw, C. J., said, "where a negotiable note is found in cir- culation after it is due, it carries suspicion on the face of it. The question instantly arises, why is it in circulation? Why is it not paid? Here is something wrong. Therefore, although it does not give the indorsee notice of any specific matter of defense, such as set-off, payment, or fraudulent acquisition, yet it puts him on in- quiry; he takes only such title as the indorser himself has, and 442 JOHNSON V. WAV. [chap. I9, In Murray v. Lardner, supra, the law in regard to nego- tiable paper, as settled by the Supreme Court of the United States, is summarized, as follows: "The party who takes it before due for a valuable consideration, without knowledge of any defect of title, and in good faith, holds it by a title valid against all the world. Suspicion of defect of title or the knowledge of circumstances which would excite such suspicion in the mind of a prudent man, or gross negligence on the part of the taker at the time of the transfer, will not defeat his title. That result can be produced only by bad faith on his part. The rule may perhaps be said to resolve itself into a question of honesty or dishonesty, for guilty knowledge and willful ignorance alike involve the result of bad faith." It was, moreover, settled in that case, that circumstances tending to show bad faith or fraud in taking such paper, though not conclusive in themselves, are admissible in evi- dence, and the establishment of bad faith or fraud, whether by direct or circumstantial evidence, is fatal to the title of the party so taking it. subject to any defense which might be made if the suit were brought by the indorser." 4 Cush., 456; Morgan v. U. S., 113 U. S., 500; Churchy. Clapp, 47 Mich., 257; Woodsmer v. Cole, 69 Cal., 142; Haywood v. Sealer, 61 la., 574; Speck v. Pullman Car Co., 121 111., 57; Hinckley v. Union P. R. R., 129 Mass., 61 Ford V. Phillips, 83 Mo., 530; Griffin v. Hartz, 94 N. C, 440; Woodworth v. Huntoon, 46 111., 131; Watson v. Alley, 141 111., 284; 31 N. E. Rep., 419. ((7.) Exception. — There is one exception to the rule as stated above and that is, if the holder acquired the bill or note after maturity, from one who became a bona fide holder before maturity, he then will have a good title, freed from personal defenses. This principle rests upon the doctrine that the indorsee takes no less title than his indorser has. Roberts v. Lane, 64 Me., 108; Bassett v. Avery, 15 Ohio St., 299; Richert v. Tulford, 52 111., 166; Woodman v. Churchill, 52 Me., 58; Wilson v. Mechanic's Bank, 45 Pa. St., 494; Bissell v. Gowdy, 31 Conn., 48. This exception it is held does not apply against an accommodation party. Dun v. Weston, 71 Me., 270; Daniel on Negotiable Instru- ments, § 786. Bill or Note Payable on Demand or at Sight. — When Over Due. — A bill or note payable on demand or at sight is pay- able within a " reasonable time," when that tima has passed such instruments are over or past due. What a "reasonable time " is SEC. 59.] JOHNSON V. WAY. 443 The rule established in these cases neither restricts the usefulness of paper made to pass from hand to hand in com- merce, nor does it relieve the party taking it from the obliga- tions of good faith. This rule may be more readily applied than that laid down in Gill v. Cubit, for a rule based on good faith as a standard is more easily comprehended than one grounded upon speculations as to what ought to excite the suspicions of a prudent man. A prudent man, it has been well said, may be more or less suspicious under similar cir- cumstances at one time than at another, and may also suspect where another equally prudent would not, and the standard of the jury may be higher or lower than that of other men who are prudent in the management of their affairs. The point in controversy has not been directly deter- mined by the Supreme Court of this state. The rules laid down in Davis v. Bartlett,' which are stated in the syllabus, ' 12 Ohio St., 534. cannot be fixed by any definite and precise rule. What would be a reasonable time in one case might be unreasonable in an other under different circumstances. For illustrations see, Mitchell v. Catchings, 23 Fed. Rep., 710; Paine v. Cent. Vt. R. R. Co., 14 Fed. Rep., 270; First Nat. 13k. v. Needham, 29 Iowa, 249; Her- rick V. Wolverton, 41 N. Y., 581; Cowing v. Altman, 71 N. Y., 435; Cripps V. Davis, 12 M. & W., 159, 165. In Michigan it is held that a demand note is due and payable at once, and without demand. Palmer v. Palmer, 36 Mich., 487; 94 Mich., 411; 132 Mass., 338; 146 Mass., 118; 83 N. Y., 456; 11 Ohio St., 601. This question is regulated in some states by statute. Bill or Note Payable in Installments, Either of Principle or Interest — When Over Due. — If the commercial contract is payable in installments, the maturity and non-payment of the in- stallment makes the same overdue so that a purchaser thereof would be chargeable with equities between original parties. Field V. Tibbetts, 57 Me., 359; Vinton v. King, 4 Allen, 561; Hart v. Stickney, 41 Wis., 630. The rule, whether the non-payment of an installment of interest when due, is equivalent to notice of dis- honor, is controverted. In support of the rule see, Newell v. Gregg, 51 Barb., 263. Contra, Kelly v. Whitney, 45 Wis., no; National Bk. v. Kirby, 108 Mass., 497; 3° Am. Rep., 702. Bill or Note, Not Matured Until Expiration of the Day W^hen it is Legally Due. — A bill or note is not past maturity or over due until after the expiration of the day on which it becomes legally due, unless the same has been actually dishonored before the last day has fully expired. Bosch v. Cassig, 64 la., 314; 444 JOHNSON V. WAY. [CHAP. I9, are, however, in harmony with that of Goodman v. Harvey; so is the decision in Bassett v. Avery,' as well as the principle upon which the case was decided. But a remark upon a hypothetical case stated in the opinion delivered in Bassett v. Avery warrants the charge to the jury complained of in this case. Speaking of what might constitute a defense against an indorsee of a negotiable note, it is said: "If such circum- stances of suspicion had been shown to exist as ought to have put Bassett upon inquiry before purchasing, he would be pre- sumed to have either made the inquiry and ascertained the truth, or have been guilty of a degree of negligence equally fatal to his claim to be considered a bona fide purchaser.'' ' 15 Ohio St., 299. Crosby v. Grant, 36 N. H., 273; Continental N. B. v. Townsend, 87 N. Y., 10. Therefore a purchaser may be a bona fide holder, who purchases a bill or note on the last day of grace. See contra. Pine V. Smith, i i Gray, 38. Purchaser for a Valuable Consideration. — One of the requisites of a bona fide holding of a negotiable contract is that the holder must have paid a valuable consideration for the same. Value is either money or money's worth. The amount of value or money paid is not important except as it may have a bearing upon the question of actual or constructive notice of equities. DeWitt V. Perkins, 22 Wis., 451; Lay v. Wissman, 36 la., 305; King v. Nichols, 138 Mass., 20; Smith v. Jansen, 12 Neb., 125; Dreilling v. First Nat. Bk., 43 Kan., 197. Valuable Consideration — Defined. — The following consid- erations have been held to be valuable: 1. The surrendering of negotiable securities; 2. Giving one's signature to a negotiable paper; 3. Releasing an existing debt, (upon this question there is much conflict of authority see in favor. Swift v. Tyson, i6 Peters, i; and contra. Bay v. Coddington, 5 Johnson Ch., 54); 4. An agreement to forbear (Oates v. First Nat. Bk., 100 U. S., 239); 5. Holding as collateral security (see contra, Bay v. Cod- dington. ) If the purchaser receives actual notice of dishonor after the agreement to purchase and before the purchase money is paid, he is only protected to the extent of money or value actually paid. Dresser v. Railway Company. Purchaser in the Due Course of Business — Defined. — A bona fide holder in order to be protected must have purchased in the due or ordinary course of business. The " due or ordinary course of business " means a transaction according to the usages SEC. 59.] JOHNSON V. WAV. 445 This statement is made upon the authority of Williamson v. Brown;' but that case did not relate to negotiable paper; and we have seen, moreover, that a different rule now obtains in New York in reference to that kind of instruments. In McKesson v. Stanbury,^ it was only necessary to de- termine upon which party the burden of proof rested, and the case, as explained, and upon the principles settled in Davis v. Bartlett, was decided right. The statement in the opinion in regard to the prudence required of an indorsee of negotiable paper was unnecessary in the decision of the case, and like that of a similar character in Bassett v. Avery, may be re- '15 N. Y., 354. ■■'3 Ohio St., 156. and customs of commercial transactions. Elias v. Finnegan, 37 Minn., 145; Kellogg v. Curtis, 69 Me., 212. One who receives a bill or note as a receiver, or as assignee for the benefit of credit- ors, or as executor or administrator, or as trustee, does not receive the same in the " due course of business." Briggs v. Merrill, 58 Barb., 379; Billings v. Collins, 44 Me., 271; Roberts v. Hall, 37 Conn., 205; Earhart v. Gant, 32 la., 481; Kemper v. Comer, 73 Tex., 201; Gilson v. Miller, 29 Mich., 355. Purchaser " Without Notice" — Kinds of Notice — Ac- tual and Constructive — Defined. — A bona fide YioXAtr musthave acquired the commercial contract without notice of its dishonor. The notice necessary to establish a privity is either actual or con- structive. By " actual notice " is meant either knowledge of a fact or the means of such knowledge to which the holder has dis- honestly or corruptly shut his eyes. By " constructive notice" is meant that the purchaser of a commercial contract has read it and therefore is chargeable with a knowledge of everything apparent upon the face of such paper. Mere "negligence" will not charge a purchaser with "actual notice," unless the same amounts to bad faith. Negligence how- ever is evidence of bad faith. Johnson v. Way, 27 Ohio St., 374; Lawson v. Weston, 4 Esp., 56; Goodman v. Harvey, 4 A. & E., 47°- Neither will actual notice defeat recovery by an mdorsee if his indorser was a purchaser for value without notice. Kost v. Ben- der, 25 Mich., 615; Chalmers v. Lanion, i Camp., 383; Bank etc., V. Gore, 63 Cal., 355; Fairclough v. Pavia, 9 Ex., 690; Eckhertv. Ellis, 26 Hun., 663. The purchaser is charged with constructive notice of every de- fect apparent upon the paper, such as for example, the kinds of indorsements, whether restrictive or conditional, or anomolous, etc.; the time of payment; want of signature; that blanks are not 446 JOHNSON V. WAS, [chap. 19, garded only as a dictum. Without questioning the 'correct- ness of the decisive points of these cases, we do not feel bound to follow the dicta referred to. Although entitled to great weight as the utterances of able judges, and warranted by a line of decisions, they were, however, only incidental remarks in the cases in which they were made, and are not in accord- ance with the rule as now settled by repeated decisions of the highest courts of England and America. Guided by the leading authorities of both countries, we are brought to the following conclusions: A holder of negotiable paper, who takes it before matur- ity, for a valuable consideration, in the usual course of trade, without knowledge of facts which impeach its validity between antecedent parties, holds it by a good title. filled; that there has been a cancellation or alteration apparent upon its face. See Angle v. N. W. Ins. Co., 92 U. S., 342; Row- land V. Fowler, 47 Conn., 347; Davis Mach. Co. v. Best, 105 N. Y., 59; McBain v. Seligman, 58 Mich., 294; Merchants Bk. v. Hanson, 33 Minn., 43. Notice to Agent — Effect Of. — In the case of notice, the general rule is that notice to an agent is notice to the principal. But this rule is subject to these qualifications; (a) that the notice to the agent which will affect the principal, must have been received in the same transaction or at least so recently that it may be pre- sumed to have remained in his memory; and (b) it must be a notice of a material fact, and one which it would be the duty of the agent to communicate to his principal. Kaufman v. Robey, 60 Tex., 308; 48 Am. Rep., 266. Notice of Equities — \A^hen the Rule Does Not Apply. — The rule that a purchaser of a commercial contract cannot re- cover, when he either has notice of equities or where he purchases after maturity, does not apply when he purchases of one having a good title. Kost V. Bender, 25 Mich., 515; Scotland Co. v. Hill, 132 U. S., 117; Shaw v. Clark, 49 Mich., 384; Bodley v. Nat. Bk., 38 Kan., 61; Graham v. Larimer, 83 Cal., 179; Woodworth v. Huntoon, 40 111., 13 t; Bassett v. Avery, 15 Ohio St., 299; Suffolk Bk. V. Boston, 149 Mass., 305; Hereth v. Merchants Bk., 34 Ind., 380. There is one limitation upon this exception, and that is when he is one of the original parties. Kost v. Bender, supra. Transfer of Bill or Note, Payable "To Order" W^ith- out Indorsement. — "It is too well settled by authority, both in England and in America, to permit of questioning, that the pur- chaser of a draft, check or promissory note, who obtains title without indorsement (where it is payable to order) by the payee. SEC. 59. J JOHNSON V. WAY. 447 To defeat his recovery thereon, it is not sufficient to show that he took it under circumstances which ought to excite sus- picion in the mind of a prudent man. To have that effect, it must be shown that he took the paper under circumstances showing bad faith or want of hon- esty on his part. Circumstances tending to show bad faith or fraud in tak- ing such paper, though not conclusive in themselves, are ad- missible in evidence; and the establishment of such bad faith or fraud, whether by direct or circumstantial evidence, sub- jects the holder of paper so taken to defenses existing be- tween antecedent parties. It follows that the judgment of the District Court and that of the Common Pleas must be reversed, and that the cause must be remanded for further proceedings. Judgment accordingly. holds it subject to all equities and defenses existing between the original parties, even though he has paid full consideration, with- out notice of the existence of such equities, and in the due course of trade and before maturity." The Goshen Bank v. Bing- ham, 118 N. Y., 349; Trust Company v. National Bank, loi U. S., 68; Lancaster Bank v. Taylor, 100 Mass., 18; Harrop v. Fisher, 30 L. J., 283. The reasoning on which this doctrine is founded may be briefly stated as follows: "The general rule is that no one can transfer a better title than he possesses. An exception arises out of the rule of the law merchant, as to negotiable instruments. It is founded on the commercial policy of sustaining the credit of commercial paper. Being treated as currency in commercial transactions, such instruments are subject to the same rule as money. If transferred by indorsement, for value, in good faith and before maturity, and in the due course of trade, without notice of equities, they become available in the hands of the holder, notwithstanding the existence of equities and defenses which would have rendered them unavailable in the hands of- a prior holder. " But when a negotiable contract is payable to a person or his order and is transferred without indorsement, it is treated as a chose in action transferred by assignment to the pur- chaser. The assignee, under the modern rule, acquires all the title of the assignor and may maintain an action thereon in his own name. But he is treated as an assignee the same as an assignee of a common law contract and is subject to all the equi- ties and defenses existing in favor of the maker or acceptor against the previous holder. The Goshen Bank v. Bingham, supra. CHAPTER XX. Checks and Bills of Exchange Distinguished. SECTION 60. A CHECK IS A WRITTEN ORDER OR REQUEST, ADDRESSED TO A BANK OR TO PERSONS CARRYING ON THE BUSI- NESS OF BANKING, BY A PARTY HAVING MONEY IN THEIR HANDS, REQUESTING THEM TO PAY ON PRE- SENTMENT TO ANOTHER PERSON, OR TO BEARER, OR ORDER, A CERTAIN SUM OF MONEY SPECIFIED IN THE INSTRUMENT.* MORRISON ET AL. v. BAILEY ET AL.' In the Supreme Court of Ohio, December, 1S55. \_Reported in § Ohio Si., ij.] Decision. — This suit was brought against Bailey, as drawer, and Burgess, as indorser, of a paper, of which the following is a copy: *A check is always payable on presentation and demand, and is not entitled to days of grace. A draft for money, in the usual form of a check, but payable on a future specified day is a bill of exchange, and entitled to days of grace. Whether days of grace are to be allowed on a draft in the form of a check depends upon the question whether the instrument is payable on demand, or at a future day. The usage of banks in any particular place, to regard drafts upon them, payable at a day certain after date, as checks, and not entitled to days of grace, is inadmissible to control the rule of law in relation to such paper. 'This case is cited in Daniel on Negotiable Instruments, 1568, 1569, 1574, 1576, 1587, 1590, 1600, 1638; Randolph on Commer- cial Paper, 93; Tiedeman on Commercial Paper, 421, 432, 434, 442, 443, 452; Norton on Bills and Notes, 29, 382; Benjamin's Chalmers on Bills, Notes and Checks, 31, 66, 267; Wood's Byles, on Bills and Notes, S7. 280; Illustrative Cases, 40; Paige's Illus- SEC. 60.] MORRISON ET AL. V. BAILEY ET AL. 449 "Sjoo. Cleveland, O., June jo, iSjj. ' ' Wicks, Oils & Brownell: Pay to L. F. Burgess, on the ijth day of July, 'sj, or order, three hundred dollars. R. B. Bailey." Indorsed by " Z. F. Burgess.'' The paper was presented to Wicks, Otis & Brownell, for payment, on the i6th day of July, 1853; payment refused, and notice of non-payment given on that day. It is claimed, on the part of the defence, that present- ment was not made, and notice given, in due time. And the question for determination is, whether this instrument, upon which suit is brought, is, or is not, entitled to days of grace; and this depends upon the question, whether this instrument is a check eo nomine, or a bill of exchange, subject to the rules and usages governing ordinary bills of exchange. Bills of Exchange and Checks Distinguished. — The distinction between a bill of exchange and a check, although much confused, in some respects, by the apparently inconsis- tent language of some of the adjudicated cases, as well as some of the elementary writers bearing upon it, is founded in the difference in the nature of these two classes of commer- cial paper. Checks, being drafts or orders for immediate pay- ment of money, have come into such common use as to super- sede, in frequent payments of considerable amounts, not only gold and silver coin, but even bank notes. And with their general use, certain usages have grown up peculiar to that class of instruments, and which have become engrafted on the commercial law of the country. A check is subject to many of the rules and which regulate the rights and liabilities of parties to bills of exchange, and so nearly resembles the latter class of instruments, that some authors have defined a check to be, in substance and in legal effect, an inland bill of exchange, payable on demand. But, trative Cases on Commercial Paper, 324. See also Andrew v. Blachley, 11 Ohio St., 89; Stewart v. Smith, 17 Ohio St., 83; Mer- chant's Bank v. State Bank, 10 Wall, 647; Culter v. Reynolds, 64 111., 321; Woodruff V. Merchants' Bank, 25 Wend., 673; Bickford V. First Nat. Bank, 42 111., 238; Attorney General v. Continental Life Ins. Co., 71 N. Y., 325. 450 MORRISON ET AL. V. BAILEY ET AL. [CHAP. 20, as Judge Story well said, in the matter of Brown,' although a check ' ' nearly resembles a bill of exchange, yet nullum simile est idem." By statute, in Ohio, all bills made negotiable are entitled to three days grace in the time of payment.^ But days of grace in the time of payment would be inconsistent with the nature and purpose of a check, which requires on acceptance, and is always payable immediately on present- ment. ' 2 Story, 502. - Revised Stat., 576. Check — Defined. — "A check is a draft or order on a bank or banker, purporting to be drawn on a deposit of funds, for the payment, at all events, of a certain sum of money to a certain person therein named, or to him or his order, or to bearer, and payable instantly on demand. Van Schaack, Bank Checks, i, cit- ing Blair v. Wilson, 28 Grat. (Va. ), 170; Story, Prom. Notes (7th ed.), § 487; 2 Daniel Neg. Inst. (3d ed. ), § 1566; Norton on Bills and Notes, 380. "A check resembles an inland bill of exchange payable on demand, except that it is always drawn on a banker; and many, but not all, of the rules governing a bill, are applicable to it. "In some, but not all, states, an instrument, in the form of a check, drawn in one state on a banker in another state, is held to be a foreign bill of exchange, and not a check." Check — Form Of. — The following is the ordinary form of a check: Ann Arbor, Mich., Sept. isi, l8g8. The Ann Arbor Savings Bank, Pay to Ada?n Sfnith or order \or to Adam Smith simply, or to Adam Smith or bearer, or simply to bearer~\ Five hundred and -{^ Dollars. $500 1%. John Jones. Check— Presentment and Demand. — A check should be presented and paid promptly. Fegley v. McDonald, 89 Pa. St., 128. Checks are negotiable instruments, and are transferred by indorsement and delivery. Conroy v. Warren, 3 Johns. Cas., 259. The same rules apply to checks, as to presentment and notice of dishonor, as to bills of exchange. Harker v. Anderson, 21 Wend., 372; Pollard v. Bowen, 57 Ind., 234. EfTect of a Delay in Presentment. — When a person re- ceives a check, he must present it for payment within a reasonable time, in order to preserve his right of recourse on the drawer and indorsers in case of non-payment by the drawee. Grange v. Reigh, 93 Wis.. 552; Bull v. Bank, 123 U. S., 105; Daniel on Neg. Inst, Sees. 1590, 1591; Gregg v. Beane, 69 Vt., 22. And SEC. 60. J MORRISON ET AL. V. BAILEY ET AL. 45 1 These two classes of commercial paper, although in many respects similar, are to be distinguished in the following par- ticulars, to wit: 1. A check is drawn upon an existing fund, and is an absolute transfer or appropriation, to the holder, of so much money in the hands of the drawee; whereas a bill of exchange is not always, or necessarily, drawn upon actual funds in the hands of the drawee, but very frequently drawn in anticipa- tion of funds, or upon a previously arranged credit. 2. The drawer of a check is always the principal; whereas the drawer of a bill frequently stands in the position of a mere surety. what is considered a reasonable time is within the next secular day. Grange v. Reigh, supra; Gregg v. Beane, supra; Holmes v. Roe, 62 Mich., 199; 28 N. W. Rep., 864;Bank v. Miller, 37 Neb., 500; 40 Am. St. Rep., 499; 55 N. W. Rep., 1064; Gifford v. Har- dell, 88 Wis., 538; 43 Am. St. Rep., 925; 60 N. W. Rep., 1064. The drawer, however, will not be released by the delay unless he has suffered some loss thereby. Bull v. Bank, 123 U. S., 105; Woodin V. Frazee, 38 N. Y. Sup., 190. Memorandum Checks — Defined. — Mr. Norton in his val- uable work on Bills and Notes says: "It is necessary to notice shortly a class of checks of a pecu- liar character, known as 'memorandum checks.' In form and appearance a memorandum check does not differ from ordinary checks, except that on the face of them is written the word 'mem- orandum,' or 'mem.,' or 'memo.' Such a check 'is given by the maker to the payee rather as a memorandum of indebtedness than as a payment. ^Between those parties it is considered as a due- bill or an I. O. U. It can be sued upon as a promissory note, without presentment to the bank, whereas the holder of a regular check must first demand its payment at bank, and be refused, be- fore he can maintain an action against the drawer.. Van Schaack, Bank Checks, 184. The fact that the word 'memorandum,' or 'mem.,' or 'memo.' is written on a check, makes it a memorandum check. The bank, however, is not bound to pay any attention to these words, or to recognize any contract as implied between the maker and payee which gives the check any peculiar character. If such a check is presented for payment, and the drawer has suffi- cient funds to meet, it the bank must honor it like any ordinary check. If the agreement between the maker and the payee is that it shall not be presented for payment, any remedy of the drawer for the breach of such agreement is solely against the payee. Morse, banks, 313. 452 MORRISON ET AL. V. BAILEY ET AL. [CHAP. 20, 3. As between the holder of a check and an indorser, demand of payment within due time is essential to the liabil- ity of the latter. Where the parties reside in the same place, the holder should present the check on the day it is received, or within business hours of the following day; and when pay- able at a different place from that in which it is negotiated, the check should be forwarded by mail on the same, or the next succeeding day, for presentment. Bat days of grace being allowed to bills of exchange, the time for demanding payment of a bill is different. 4. As between the holder and drawer, however, mere delay in presenting a check in due time for payment would "A memorandum check presents all the features of other ne- gotiable instruments when transferred or indorsed to a bona fide holder for value. Van Shaack, Bank Checks, 185. ^ A meino- randiiiH check is a contract by which the maker engages to pay to the bona fide holder absolutely, and not upon a condition to pay if the bank upon which it be drawn should not pay, upon presentation at maturity, and if due notice af the presentation and non-payment should be given." Franklin Bank v. Freeman, 16 Pick. (Mass.), 535. See also, as to this class of checks, Gushing v. Gore, 15 Mass., 69; Dykers V. Leather Manufacturers' Bank, 11 Paige (N. Y.), 612; Norton on Bills and Notes, 383. See also, American Emigrant Co. v. Clark, 47 la., 671; Franklin Bk. v. Freeman, 16 Pick., 535; U. S. V. Isham, 17 Wall., 496. Checks — Certification of — Effect Upon Drawer's Lia- bility. — As has been said, a check is an order to pay the holder a sum of money at the bank on presentment of the check and demand of the money; no previous notice is necessary, no acceptance is required or expected; it has no days of grace. It is payable on presentment and not before. It is the duty of the bank to pay the checks of its depositors when they are presented for payment, if it has sufficient funds on deposit. By the certification of a check is meant that the banker un- dertakes to pay the same to any holder upon demand. This certi- fication may be made by a telegraphic promise. Henrietta Nat. Bk. V. State Nat. Bk., 80 Tex., 648; 16 S. W. Rep., 321. The weight of authority is that if the drawer, in his own behalf or for his own benefit, gets his check certified and then delivers it to the payee, the drawer is not discharged; but that if the payee or holder, in his own behalf or for his own benefit, gets it certified, instead of getting it paid, then the drawer is discharged. This rule of law seems to be based upon sound reasons. Born v. First Na- tional Bank, 123 Indiana, 78; Brown v. Leckie, 43 Illinois, 497; First National Bank v. Leach, 52 N. Y., 350; Continental National SEC. 60.] MORRISON ET AL. V. BAILEY ET AL. 453 not discharge the latter, unless he had been injured thereby, and then only to the extent of his loss; but a different rule, in this respect, prevails in case of a bill of exchange. 5. A check requires no acceptance, and, when presented, the presentment is for payment. 6. It is not protestable, or in other words, protest is not requisite to hold either the drawer or an indorser. ' From these distinguishing characteristics, arising out of the nature of these two classes of instruments, it follows that 'This rule is now changed by statute in some of the states so that all negotiable instruments must be protested when dishonored. Bank v. Cornhauser, 37 111. App., 475; Minot v. Russ, 156 Mass., 458; Bank v. Whitman, 94 U. S., 343; Bank v. Jones, 27 N. E. R., 533; Larsen v. Breene, 12 Colo., 480; Bank v. Miller, 77 Ala., 168. Check — Payment Upon Unauthorized Indorsement. — If the bank or drawee of a check pays it upon an unauthorized in- dorsement, it is liable for the amount of the check to the true holder on demand. First National Bank v. Whitman, 94 U. S., 343j 10 Wall., 152; Dodge v. National Exchange Bank, 20 Ohio State, 234; Citizen's Nat. Bk. v. Importer's & Trader's Bk., 119 N. Y., 19s; 23 N. E. Rep., 540; Bank of British N. A. v. Mer- chant's Bk., I N. Y., iir; Victs v. Bank, 101 N. Y., 563; Mar- zetti V. Williams, i Barn. & Adol., 415; Corn Exchange Bk. v. Nassau Bk., 91 N. Y., 74. Check — Liability of Banker for Failure to Honor. — Whenever a banker receives money on deposit, he impliedly con- tracts thereby with the depositor that he will pay checks drawn upon him to the amount of such deposit, and a failure to comply with such implied contract entitles the depositor to recover any . .damages that he may suffer by reason of such failure. The banker, however, must be given a reasonable time after the deposits are made, to enter the credit on his books. Marzetti v. Williams, i Barn. & Adol., 415; National Bank v. Peck, 127 Mass., 298. Coupon Bonds — Defined. — Coupon bonds belong to com- mercial contracts in the sense that they are negotiable contracts. They are not, however, subject to all the rules of commercial paper, but are governed by special rules and customs. Daniel in his work on Negotiable Instruments says, that "a bond is an_ in- strument complete in itself, and yet composed of several distinct instruments each of which is in itself as complete as the whole together. As originally issued the coupon bonds consisted of (first) an obligation to pay a certain amount of money at a future day; and (second) annexed to it is a series of coupons each one of which is a promise for the payment of a periodical installment of 28 454 MORRISON ET AL. V. BAILEY ET AL. [CHAP. 20, a check is always payable on presentation and demand; and that, if a draft for money be in the usual form of a check, ex- cept that it is payable on a specified day in future, it is a bill of exchange and entitled to days of grace. This is the result of the doctrine of the most recent and well considered author- ■ ities having a bearing upon this subject.' 'Bowen et al. v. Newell at al., 4 Selden, 190; Brown v. Lusk, 4 Yerger, 240; Daniels v. Kyle et al., i Kelley (Ga.), 304; Wood- ruff V. Merchants' Bank, 25 Wend., 673, 6 Hill, 174; Chitty on Bills, 512, 515; Byles on Bills, 71; Story on Prom. Notes, sees. 481-491; 3 Kent's Com., 104. interest. The contract between the payer and the holder is con- tained in the bond, but the coupons are furnished as convenient instruments to enable the holder to collect interest without pre- senting the bond by separating and presenting the proper coupon, and it also enables him to anticipate his interest by negotiating the coupon which represents it to another person at any time before its maturity." Dan. on Negot. Inst.; Morris Canal and Banking Co. V. Fisher, 64 Am. Dec, 428, and cases there collected; McClelland V. Norfolk R. R. Co., no N. Y., 397-401; Commissioners v. Aspinwall, 21 How. (U. S.), 539; Frank v. Wessels, 64 N. Y., 155. These coupon bonds, which are usually issued by corpora- tions, but may be issued by private persons, constitute or repre- sent a vast portion of the wealth of the country. They may be transferred by delivery or indorsement; and the purchaser of them in good faith takes them freed from all equities, and the burden of proof on the question of such good faith lies on the part of him who assails the title. Coupon — Defined. — The term "coupon" is derived from the French "couper" — to cut — and is defined by Worcester, in his dictionary, to signify "one of the interest certificates attached to transferable bonds, and of which there are usually as many as there are payments to be made; so called, because it is cut off when it is presented for payment." Coupons resemble promissory notes in form more than any other kind of negotiable instruments. They may, however, be in the form of drafts, or orders, or checks. It is said that they differ from bills of exchange inasmuch as they are not intended for acceptance when drawn upon a bank. They are independent securities and may be separate from the bond from which they are originally attached and in this condition are in legal effect negotiable in the same manner and affected with the legal attributes of all negotiable paper. Ketchum v. Duncan, 96 U. S,, 659; Town of Cicero v. Cifford, 53 Ind., 191; White v. Vt. & Mass. R. R. Co., 21 How. (U. S.), 575; City of Memphis v. Brown, 5 Am. Law Times, 424; Trustees v. Lewis, 34 Fla., 424; 43 Am. St. Rep., 209; Morris Canal and Banking Co. v. Fisher, supra. SEC. 60. J MORRISON ET AL. V. BAILEY ET AL. 455 It is also settled, in Woodruff v. Merchants' Bank, and Bowen v. Newell, above referred to, that any supposed usage of banks in any particular place to regard drafts upon them, payable at a day certain after date, as checks, and not entitled to days of grace, is inadmissible to control the rules of the law in relation to such paper. Motion for new trial overruled, and judgment for the plaintiff. These coupons, however, to be negotiable must bear upon their face the indicia of negotiability — that is, they must be pay- able to a particular person or order, or bearer, and must also con- tain all the other essentials of negotiable contracts. Augusta Bank V. Augusta, 49 Me., 507; Smith v. Clark Co., 54 Mo., 58; John- son V. County of Stark, 24 111., 75; Haven v. Grand Junction R. R. Co., 109 Mass., 88; McClelland v. Norfolk R. R. Co., no N. Y., 397. CHAPTER XXI. Quasi-Negotiable Contracts. SECTION 61. QUASI-NEGOTIABLE CONTRACTS ENUMERATED AND DE- FINED. Letters of Credit — -Defined. — A letter of credit may be defined to be a letter of request, whereby one person requests some other person to advance money or give credit to a third person, and promises that he will pay or guarantee the same to the person who makes the advancement, or accept bills drawn upon himself for a like amount.' A letter by one person to another requesting the latter to make advances to a third person on the credit of the former is a letter of credit. Letters of credit are of two kinds, general and special. A general letter of credit is addressed to any and every per- son, and therefore gives any person to whom it may be shown authority to advance upon its credit. The privity of con- tracts springs up between him and the drawer of the letter and it becomes in legal effect the same as if addressed to him by name. While a special letter of credit is one addressed to a particular individual by name, and' is confined to him and gjives no other person a right to act upon it. Letters of credit may further be subdivided into those that contemplate a sin- gle transaction and those that contemplate an open and con- tinued credit embracing several transactions. In the latter case they are not generally confined to transactions with a single individual, but if the nature of the business requires it, different individuals are authorized to make advancement upon 'Dan. on Negot. Inst., Sec. 1790. SEC. 6l.j QUASI-NEGOTIABLE CONTRACTS. 457 it, and it then becomes a several contract with each individual to the amount advanced.' The following is a sufficient form for a letter of credit: ''Ann Arbor, Mich., Sept. 1st, 1898. " To Barring Bros., London, England. Sirs : — " TAe Ann Arbor Savings Bank" hereby agrees to ac- cept and pay at maturity any draft or drafts on it at sixty days sight issued by you, to the extent of $^,000. Chas. E. Hiscock, Cashier." Letters are commonly used by tourists throughout the world. In almost every city there are certain banking firms which make a special business of furnishing travelers with these letters of credit. United States Treasury Notes — Defined. — The treasury notes of the United States, payable to bearer, are negotiable commercial contracts and their transferability is subject to the commercial law of other paper of that character. If such paper is payable at a definite future time, one who becomes the holder of such paper after such time takes it subject to the rights of antecedent holders to the same extent as any other paper bought after its maturity.^ Bank Notes — Defined. — A bank note has been defined to be a promissory note made by a banker, payable to bearer on demand and intended to circulate as money. Mr. Daniel says that "it is the note of an incorporated bank designed to circulate like money and payable to bearer on demand."* The terms "bank notes" and "bank bills," says Mr. Daniel, in his valuable work on Negotiable Instruments, ' ' are 'The Union Bank of La. v. The Executors, etc., 3 N. Y., 203; Russell V. Wiggins, 2 Story's Rep., 214. 'Vermilye Co. v. Adams Express Co., 21 Wall, 138; Dens- more, etc. V. Duncan, etc., 57 N. Y., 573. ^Dan. on Negot. Inst, Sec. 1664; Townsend v. People, 4 III., 326, where Butterfield, J., said that "a bank note is a written promise on the part of the bank to pay to the bearer a certain sum of money." 458 QUASI-NEGOTIABLE CONTRACTS. [CHAP. 2 1, of the like significations, and for the purposes of interpreta- tion both in criminal and civil jurisprudence are equivalent and interchangeable."' In the case of Miller v. Race (1758), Ld. Mansfield said that ' ' bank notes are treated as money — as cash in the or- dinary course and transaction of business — by the general con- sent of mankind, which gives them the credit and currency of money to all intents and purposes. They are as much money as guineas themselves are, or any other current coin that is used in common payment as money or cash, and are never considered as securities for money, but as money itself."^ While "bank notes" in ordinary business transactions are treated as money, they are not money in the strict sense of that term. They are negotiable instruments, however, and pass from hand to hand by delivery simply. As a general rule the transferrer of a bank note makes all the warranties of a transferrer of other negotiable contracts.' They may be transferred also by indorsement, in which case the indorser would be liable in the same way and to the same extent as if his indorsement had been placed upon an ordinary promissory note or bill of exchange.^ Bank notes are intended for indefinite circulation, and as long as they continue to 'circulate they are never due and therefore the statute of limitations will never run against them. It is held, however, that if they cease to circulate the statute does begin to run.^ Neither are they discharged because they have been re- deemed by the bank which issued them, but may be issued ' Dan. on Negot. Inst., Sec. 1664; Eastman v. Commonwealth, 4 Gray, 416. ^i Burr, 452. ^Dan. on Negot. Inst., sec. 1675-79. ■•Ramsdale v. Horton, 3 Pa. St., 330; Corbett v. Bank of Smyrna, 2 Harr. (Del), 235; Westfall v. Braley, 10 Ohio St., 188; Gilman v. Peck, 11 Vt., 516; Bayard v. Shunk, i Watts & S., 92. '^Kimbro v. Bank of Fulton, 49 Ga., 419; Solomons v. Bank of England, 13 East, 135; Morse on Banking, 402. SEC. 6l.] QUASI-NEGOTIABLE CONTRACTS. 459 again and again, and kept in circulation during tlie corpora- tive existence of tiie bank.' Gold and Silver Certificates.— Tlie treasurer of the Uni- ted States has been authorized to issue what are known as "gold and silver certificates." These certificates are intended to circulate as money, but, like bank notes, are not money. They are negotiable and pass from hand to hand by delivery simply. They contain a certificate that ' ' there have been deposited in the treasury of the United States gold (or silver) dollars payable to bearer on demand." It has been held, however, that a "silver certificate" is not, in com- mon parlance, a promissory note, and evidence that one stole a ' ' silver certificate " is not admissable against one charged with stealing a "promissory note."'' Bills of Lading— Defined.— A bill of lading may be de- fined to be "a formal acknowledgment of the receipt of goods and an engagement to deliver them to the consignee or his assigns."' A bill of lading serves a two-fold capacity: (i) It is a contract for the transportation of the goods, as well as (2) a receipt for the goods. As a receipt for the goods, it is prima facie evidence of the quantity, condition and quality of the goods received. A bill of lading is not a negotiable instrument in the sense that a bill or note is. It represents goods, wares and mer- chandise and not money. It may be transferred by indorse- ment or delivery, and will thus operate to transfer or deliver all the right and title to the goods, wares and merchandise which it represents, so that the indorsee may have a good title to the same as against the transferrer. Several of the states have by statute made bills of lading absolutely nego- tiable. It was said in the case of Shaw v. Railroad Co. , that 'Parsons on Bills and Notes, 95; Dan. on Negot. Inst., sec. 1683. ^Stewart v. State, 62 Md., 412. ''Empire Transportation Co. v. Wallace, 68 Pa. St., 302; Mer- chants Bank v. Hewitt, 3 Iowa, 93; Merchants Bk. v. Union, etc. Co., 69 N. Y., 373, and cases cited; Barnard v. Campbell, 55 N. Y., 456. 460 QUASI-NEGOTIABLE CONTRACTS. [CHAP. 2 1, "although a statute makes a bill of lading negotiable by in- dorsement and delivery, it does not follow that all the conse- quences incident to all the indorsements of bills and notes ensue or intended to ensue from such negotiation.'" A thief or the finder of a negotiable contract may in cer- tain cases transfer it so that the transferree may be a bona fide holder of such contract. This is not true in the case of a bill of lading. A thief or a finder of a bill of lading cannot divest the true owner of the title to the goods, wares and merchan- dise by transferring the same to an innocent party. ^ ■Warehouse Receipt — Defined. — "A warehouse receipt" may be defined to be a receipt given by a warehouseman for goods received by him for storage. These receipts, like bills of lading, are the representatives of the goods, wares and merchandise for which they were given. These certificates may be transferred either by indorsement or by delivery, and which transfer operates as effectually to transfer the goods as the actual transfer of the goods themselves. While their transfer operates to pass the title to the goods which they re- present, they are not absolutely negotiable, for the reason that their transfer cannot operate to deprive the real owner of the goods of his title thereto. In many of the states these in- struments have been made negotiable, under certain rules and regulations, by statute.^ Warehouse receipts are not negotiable so as to enable the person holding, them to transfer a greater right or title to the property mentioned in them than he has himself. The de- livery of the receipt has the same effect as the delivery of the property.' In the absence of statutorj' provision warehouse '100 U. S., 557. ^Shaw V. R. R. Co., supra; Price v. Wis. Co., 43 Wis., 267; Emery v. Irving Nat. Bk., 25 Ohio St., 255; Barnard v. Camp- bell, 55 N. Y., 462; Friedlander v. Texas Ry. Co., 130 U. S., 416. ' Cleveland v. Sherman, 40 Ohio St., 176; Conrad v. Fisher, 37 Mo. App., 367; State v. Loomis, 27 Minn., 521; Nat. Bk. v. Wilder, 34 Minn., 149; Brooks v. Hanover Nat. Bk., 26 Fed. R., 301. 'Burton v. Curyea, 40 111., 320; 89 Am. D., 350, 361. SEC. 6l.J QUASI-NEGOTIABLE CONTRACTS. 461 receipts are not negotiable instruments in the sense that bills and notes are. They do not call for the payment of money.' Receiver's Certificate— Defined.— " Receiver's " are au- thorized under certain circumstances, by authority of the court, to issue certificates, certifying that a given amount is due for labor, materials or supplies. This certificate becomes a lien against the property controlled by the receiver and takes priority over mortgage indebtedness and will be paid out of the proceeds in a foreclosure proceeding before the original indebtedness. The effect of granting these certificates by a receiver is to create a new lien against the property and which will be paid prior to the lien held by the mortgagees or bond holders. They are usually negotiable in form and pass upon delivery so that the transferree may enforce the payment of the same by an action thereon; but nevertheless they are not commercial contracts in the sense that an innocent purchaser will be protected against equities.^ Certificates of Stock— Defined. — A certificate of stock, is a certificate of a corporation or joint stock company, that the person named therein is the owner of a designated number of shares of the stock of such corporation or joint-stock com- pany. They may be negotiable in form but are not strictly negotiable instruments. If they are negotiable in form the holder may transfer by indorsement all his claim represented thereby against the company or corporation so that the com- pany would be liable to the transferree. The corporation may, and usually does provide how its certificates of stock may be transferred in which case the corporation would not be liable to any holder of the stock to whom it has been trans- ferred contrary to the rule of the corporation. Neither may a thief or the finder of a certificate of stock deprive the right- ' Rice y. Cutler, 17 Wis., 351; 84 Am. D., 747; Robson v. Swart, 24 Minn., 371; 100 Am. D., 238; Ins. Co. v. Kiger, 103 U. S., 352; Planter's Mill Co. v. Merchant's Nat. Bk., 78 Ga., 582. ^Wallace V. Loomis, 97 U. S., 146; Meyer v. Johnston, 53 Ala., 237; Union Trust Co. v. 111. R. R. Co., 117 U. S., 434; Swan V. Clark, no U. S., 602; Turner v. Peoria R. R. Co., 75 111., 134; Humphreys v. Allen, 101 IlL, 490; McCurdy v. Bowes, 88 Ind., 583; Bank of Montreal v. Thayer, 7 Fed. R., 622. 462 QUASI-NEGOTIABLE CONTRACTS. [CHAP. 2 1, ful owner of his right and interest therein by an indorsement and transfer of the same. Due Bill — Defined. — A due bill is simply an acknowledge- ment of a debt without any express promise to pay the same. The following are illustrations of due bills: I. O. U. ; due " A. " $50; I acknowledge myself indebted to " B. " in the sum of $100.2 'Shaw V. Spencer, loo Mass., 382; 97 Am. D., 107; Graves V. Mining Co., 81 Cal., 325; Allen v. Pegren, 6 Iowa, 173; John- ston V. Laflin, 103 U. S., 804; Farmer's Bank v. Wasson, 48 Iowa, 338; Hammond V. Hastings, 134 U. S., 401; Leitch v. Wells, 48 N. Y., 586, 613; McNeil v. Tenth Nat. Bk., 46 N. Y., 325. 2 Fisher v. Lealie, i Esp., 425; Israel v. Israel, i Camp., 499; Currier v. Lockwood, 40 Conn., 348; Smith v. Allen, 5 Day (Conn.), 337; Hegeman v. Moon, 131 N. Y., 462; Brooks v. El- kins, 2 Mees. & Wels., 74; Schmitz v. Hawkeye Gold Mining Co., 67 N. W. Rep., 618; Hussey v. Winslow, 59 Me., 170; See Sec. 13, p. 72 of this text. CHAPTER XXII Conflict of Laws. SECTION 62. WHERE A NEGOTIABLE CONTRACT IS EXECUTED AND DELIVERED AT ONE PLACE TO BE PERFORMED AT ANOTHER AND THE RATE OF INTEREST IS DIFFER- ENT AT THE TWO PLACES, THE PARTIES MAY STIPU- LATE WITH REFERENCE TO THE LAWS OF WHICH PLACE SHALL GOVERN. KILGORE V. DEMPSEY.i In the Supreme Court, Ohio, Dec. 1874. \^ Reported in 25 Ohio St., 4.13; 18 Am. Rep., 306. The Form of the Action. — Motion for leave to file pe- tition in error to reverse the District Court of Pike County. Andrew Kilgore executed to Richard Dempsey the note upon which this action was brought, of which the following is a copy: "$7,000. Piketon, O., May 29, 1856. ' ' Two years after date I promise to pay to the order of Richard Dempsey the sum of seven thousand dollars, at the Bank of Pennsylvania, Philadelphia, with interest at the rate of ten per cent, per annum — the interest to be payable semi-annually, at the end cf every six 'inonths from this date, at said Bank. Signed: Andrew Kilgore." 'This case is cited in Daniel on Negotiable Instruments, 922, 923; Tiedeman on Commercial Paper, 511. See also, Potter v. Tollman, 35 Barb., 182; Richards v. Globe Bk., 12 Wis., 692; DePaw V. Humphreys, 20 Mart. (La.), i; Edwards on Bills, 183; Miller V. Tiffany, i Wall., 310; Staples v. Nott, 28 N. E. Rep,, 515; Sheldon v. Haxtun, 91 N. Y., 124; Bank v. Low, 81 N. Y., 566. 464 KILGORE V. DEMPSEY. [CHAP. 22, Kilgore resided in Pike County, Ohio, and Dempsey in Philadelphia, at the date of the note, but both parties were present at Piketon when the transaction was concluded. A mortgage on lands in Pike County was given by Kilgore to secure the amount ot the note and interest. At the date of the note the stipulated rate of interest was lawful in Ohio, but illegal in Pennsylvania, where the legal rate was six per cent, and no more. The interest was paid bn the note up to May 29, 1871. Dempsey commenced an action to foreclose his motgage in Pike Common Pleas on the 26th of June, 1872. Kilgore set up two defenses: ( i) That under the laws of Pennsylvania the contract was usurious; and (2) that Dempsey was entitled to recover only six per cent, interest on the note. A demurrer, to both of these defenses, was sustained as to the first, and Kilgore thereupon asked and obtained leave to file an amendment to his second defense. The Distript Court affirmed the decree of the Common Pleas. The object of this motion is to obtain leave to file a petition in error to reverse the judgment of the District Court. The principal errors assigned are: i. That the District Court erred in sustaining the demurrer to the first defense. There are other errors assigned; but we do not find them well taken, and they are not of sufficient importance to require .further notice. The Claim of the Plaintiff in Error (defendant below). — The plaintiff in error argued: i. That his note is to be regarded as a contract made in Pennsylvania, and must be governed by the laws of that state. The precise question raised is: Where a note is executed in one state, expressing a rate of interest authorized by the laws of that state, but expressly being made payable in another state, where the law does not authorize so high a rate, in a suit upon the note, the laws of which state are to govern.'' When a note is made in a state where the rate of interest is less than in a state where the same is to be paid, the higher rate may be collected.' 'Story's Con. of Laws, sees. 2 9 1-2 93a, 298-306, and note to each section; Edwards on Notes and Bills, sees. 180, 182, 183, and notes. SEC. 62.] KILGORE V. DEMPSEY. 465, The note is governed by the law of the place where made payable. ' There is no good reason for making the rule in cases like this an exception to the rule that applies to all other per- sonal contracts.^ 2. If the note was governed by the laws of Ohio, the agreement to pay exchange made the contract usurious. This was a shift or device to get more than legal interest.^ The Claim of the Defendant in Error (plaintiff below). — The defendant in error argued: i. That the lex loci con- tractus of personal contracts determines their nature and validity. If valid where made, they are valid everywhere. If invalid where made, they are invalid everywhere.* 2. If a note or bill be executed in one country and made payable in another, the parties may, by agreement, elect the rate of interest of either country without incurring the penal- ties of usury. ^ 3. When the maker of a note resides in one state, and the payee in another, the parties may fix upon the residence of the maker as the place of payment, m which case they may stipulate that, in addition to legal interest, the debtor shall 'Parsons on Notes and Bills, 324-327, 333-336, and 376-380 and notes; 43 N. H., 113; Tyler on Usury, 79-90; Scofield v. Day, 20 Johns., 102; Healey v. Gorman, 3 Green, 328; Vinson v. Piatt et al., 21 Ga., 135; 2 Parsons on Notes and Bills, 376, note e. ^Butler V. Meyer, 17 Ind., 77; Little v. Riley, 43 N. H., 109; Boulton V. Street, 3 Coldwell, 31; Bigelow, 162. '2 Parsons on Notes and Bills, 426; 6 Ohio St., 19; i Ohio St., 409; 12 Ohio St., 544; 13 Ohio, i; 5 Ohio St., 266; 10 Ohio, 378; Tyler on Usury, 335-338; Butick v. Harries, 3 Am. L. Reg., 112; Cornell v. Barnes, 26 Wis., 473. *2 Kent's Com., 458; 2 Parsons on Notes and Bills, 378; An- drews V. Pond, 13 Pet, 77; De Wolf v. Johnson, 10 Wheat, 367; Dunscomb v. Bunker, 2 Met, 8; Mix v. Insurance Co., 11 Ind., 117. ° 2 Kent, 460, 461; Depaw V. Humphreys, 10 Martin, i; 2 Par- sons on Contracts, 583-585, and note (5th ed. ); 1 Paige, 220; An- drews V. Pond, 13 Pet, 65; Peck v. Mayo, 14 Vt., 33; Chapman V. Robinson, 6 Paige, 627; Edwards on Bills, 717; 2 Parsons on. Notes and Bills, 336, 337, 377, 378- 466 KILGORE V. DEMPSEY. [CHAP. 22, also pay the creditor the current exchange between the two places, and the note will not be usurious.' Decision. — The question under the first assignment of error, arises out of the conflict of the laws of Ohio and Penn- sylvania relative to the legal rate of interest. Its determina- tion has been greatly aided by the ability with which it has been discussed and presented on principle and authority. It is conceded by counsel for plaintiff in error, that the authori- ties are conflicting on the subject, and this is apparent from an examination of those cited. It is observable, however, that few of the cases cited de- cide the precise question here presented. Some of them pre- sent questions of fact as to where the contract was executed, which had to be determined before the law was applied. Others are cases in which a note bearing interest, but no rate stipulated, was made in one country and payable in another, the laws of which were in conflict on the subject of interest; and the question was whether the rate of interest in the coun- try where the contract was made, or that in which it was to be performed, should control. In others, notes which did not bear interest till due, were made in one state and by their terms payable in another, where there was like conflicts in the laws, the question was, whether damages allowed for de- taining the money after it was due, should be measured by the rate of interest at the place the contract was made, or that at which it was to have been performed. As the decisions in these cases, and others referred to which are not directly in point, would throw but little light on the question here, a re- view of them will not be attempted. But coming to another class of authorities more directly in point, and in which there is likewise a conflict, we are left to decide between them. According to some of these author- ities, if a note is made payable at a designated place, it imist in respect to interest conform to the law of the place of pay- '3 Parsons on Contracts (5th ed. ), 136, and authorities cited; Edwards on Bills, 360; Merritt v. Benton, 10 Wend., 116; Cayuga Bank V. Hunt, 2 Hill, 635; Curwen, 1524; Swan, 1854, p. 99,860. 61; Buckingham v. McLean, 13 How., 212; Southern Bank v. Brashears, i Disney, 207. SEC. 62. J KILGORE V. DEMPSEY. 467 ment, without reference to the place where it was inade or signed. According to others, if a note is made in one state and payable in another, and the interest laws of such states are in conflict, the laws of either state may be applied; in other words, that such a note may have two different places the laws of which may enter into its construction. This latter point is supported by a few authorities directly in point, and which, in our opinion, establish the rule that ought to be followed. In Depaw v. Humphreys,' the note was given in New Or- leans, payable in New York, for a large sum of money, bear- ing interest at ten per cent. , being legal interest in Louisiana, the New York legal interest being seven per cent. only. The question was whether the note was usurious, and therefore void, as it would be if made in New York. The Supreme Court of Louisiana decided that it was not usurious and that, although the note was made payable at New York, yet the interest might be stipulated for, either according to the law of Louisiana, or according to that of New York. The court ex- pressly said: "That in a note executed here (New Orleans) on '10 Martin (La.), p. i. In the case of Miller v. Tiffany, persons — ^Palmer of New York and Wallace of Cleveland, O., assignees of insolvent firms, sold to one Miller of Ft. Wayne, Ind., goods to the amount of ^20,000, taking a note secured by a mortgage. On this note the action was brought, the note being drawn in Indiana and made payable in Cleveland, O., the bargain for the goods being concluded in New York. Legal interest in New York was 6 %, in Indiana 7 %, in Ohio 10%, and the note called for 10% interest. Justice Swayne, of the U. S. Supreme Court, in his decision said: " The general principle in relation to contracts made in one place to be performed in another, is ■ well settled. They are to be governed by the law of the place of performance, and if the inter- est of the place of performance is higher than that permitted in the place of contract, the parties may stipulate for the higher in- terest without incurring the penalties of usury. The converse of this proposition is also well settled. If the rate of interest be higher at the place of contract than at the place of performance, the parties may lawfully contract in that case also for the higher interest." i Wall, 298. In the 35 N. J. L., there was a case of a bill drawn in Illinois and delivered to drawee in New York, and was- governed by the 468 KILGORE V. DEMPSEY. [CHAP. 2 2, a loan of money made here, the creditor may stipulate for the legal rate of interest authorized by our law, although such a rate be disallowed in the place (New York) at which payment is to be made." This is the exact question here. In Peck v. Mayo,' the notes sued on were made at Montreal, Canada, where the makers resided, payable in Albany, New York. The lawful rate of interest in Montreal was six per cent. , and in New York seven per cent, per annum. Redfield, J., in de- livering the opinion of the court, after an examination of all the authorities, said: "If a contract be entered into in one place to be performed in another, and the rate of interest differ in the two countries, the parties may stipulate for the rate of interest of either country, and thus, by their own ex- press contract, determine with reference to the law of which ' 14 Vermont, 33. laws of the latter place, but if in good faith the bill had been made payable in the former state any rate of interest not exceeding that there allowed, might have been reserved. In the case of Townsend v. Riley, the defendant had given his note for ^2,000, secured by a mortgage on his property in New Hampshire. He afterwards removed to New York, and by subse- quent agreement promised to pay the rate of interest of New York. Justice Bellows in delivering the opinion of the Supreme Court of New Hampshire, entered very fully into the discussion of the valid- ity of interest allowed in cases where the laws of the states conflict. He said: "The question arises whether the parties to a contract made in one state and payable in another may lawfully stipulate for the interest of the state where the contract is made, although higher than is allowed in the state where the money is payable. Upon careful consideration of the authorities bearing upon this question, we think that the parties may stipulate for the interest of either state unless the arrangements be entered into merely as a cover for usury. If then the contract was made in New York in good faith, and not to avoid the usury laws of New Hampshire, it must be regarded as valid although the New York rate of interest was higher than that of New Hampshire. These views are sus- tained by decided cases in New York, Vermont and Louisiana, and none of an opposite character have been brought to our notice." 46 N. H., 300. For further authority in the same line see: — 25 Ohio, 413; 2 Kent, 460-461; 2 Parsons on Con., 583-5; i Page, 220; 13 Peters, 65; 14 Vermont, 33; 6 Paige, 627; Edwards on Bills, 717; Parsons on Notes and Bills, 336-7, 377, 378; 22 Iowa, 194. Tiedeman on Commercial Paper, page 798, says: "In order to carry out the in- tention of parties to legal transactions their contracts must be SEC. 62. J KILGORE V. DEMPSEY. 469 country that incident of the contract shall be decided." In Chapman v. Robertson,' the plaintiff resided in England, where the legal rate of interest was lower than in New York, where it was seven per cent, per annum. The contract for the loan was made in England, but the bond was to be se- cured by a mortgage on lands in New York, and the arrange- ment made and carried out was, that Robertson was to exe- cute the bond bearing seven per cent, interest, and execute and record the mortgage securing it in New York, and then ' 6 Paige, 627. construed in the light of that law which the parties themselves had in contemplation." In support of which, see Bank v. Morris, i Hun., 680; Bank of State of Ga. v. Lewis, 45 Barb., 340. See further, Olcott v. Rathbone, 5 Wend., 492; Welsh v. Arlington, 23 Cal., 322; 8 Pick., 522; 16 Pick., 22. Mr. Parsons in his work on Bills and Notes lays down the fol- lowing propositions: 1. That if a bill or note be payable in a particular place it is to be treated as if made there without reference to the place where it was written, signed or dated. 2. That if, by the express terms of a bill or note, or by legal construction of its terms, it is payable specially in any place it is presumed that both parties knew this fact. 3. It is presumed that both parties knew the law of the place in which the paper is payable. 4. That both parties intended that this law should govern the contract. 2 Parsons Bills and Notes, 324. If the contract is made in one place and it is agreed to be performed in another place, the law of the place of performance instead of the lex loci contractus will govern the contract. But the place of payment, unless there is an express agreement to the contrary, is presumed to be the same as where the contract is made. Story Conflict of Laws, § 280; Tiedeman Commercial paper, § 508. InGoddinv. Shipley, 7 B. Mon., 577, C. J. Marshall says: "The general principle that a contract referring by its own terms. to a particular place where it is to be performed is to receive its construction and legal character and effect from the laws of the place thus referred to, is in itself so obviously reasonable and on the score of authority so well established as to preclude all dis- cussion as to its correctness." This proposition is supported by the following cases: Cook v. Moffatt, 5 How., 29s; Woodruff v. Hill, 116 Mass., 310; Drake V. Found Treas. Mining Co., 53 Feb., 474; Blodgett v. Durgin, 32 Vt, 364; Hunt V. Standard, 15 Ind., 33; Freeman's Bank v. Puck- man, 16 Grat., r26; Robinson v. Bland, 2 Burr, 1077; Kaufman V. Bank of Ky., 41 Miss., 212. 29 470 KILGORE V. DEMPSEY. [CHAP. 22, forward them to England, where Chapman placed the amount of the bond with Robertson's banker to his credit. It was held that this transaction was not usurious. From these authorities, and on principle, we are of opin- ion that Kilgore and Dempsey had a legal right to contract with reference to the laws of either Ohio or Pennsylvania, as they might in good faith agree, and that the note made in Ohio, by which Kilgore agreed to pay ten per cent, interest and principal at Philadelphia, where six per cent, was the legal rate of interest, was not, therefore, usurious. The de- murrer to this defense was properly sustained. Motion overruled. The general conclusion is that the validity of contracts for notes of interest depends upon the laws of the place where the contract is made and payable, whether it be in the domicile of the debtor, or in that of the creditor, or in that where the propety hy- pothecated is situated or elsewhere. Story Conflict of Laws, 294. The question whether a contract is usurious or not depends upon the validity of the interest in the country where the contract is made and is to be executed. Story Conflict of Laws, 292, 304; Andrews v. Pond, supra; Pratt v. Wallbridge, 16 Ind., 54; Mc- Allister v. Smith, 17 111., 328. It is in accord with the weight of authority that where two parties make a contract of loan in one state, to be performed in another, they may, acting in good faith, and without the intent to evade the law, agree that the law of either shall control the rate of interest. Smith v. Parsons, 55 Minn., 528-9; i Randolph Com- Paper, § 28; Brown v. Gardner, 4 B. J., Lea, 156; Pomeroy v. Ainsworth, 22 Barb., 126-8-9; Arnold v. Potter, 22 la., 198. Where a contract is made with reference to the place of per- formance, as is generally the case, the law of the place of contract yields to the law of the place of performance. Fanning v. Con. sequa, 17 Johns, 510-18; Shillits v. Reineking, 30 Hun., 345. For further authorities on the proposition that the place of payment or performance will govern the construction and validity of a contract, see, Sands v. Smith, i Neb., 108; Matthews v. Paine, 47 Ark., 54; Prior v. Wright, 14 Ark., 189; Tyler v. Trahue, 8 B. Mon., 306; Cox & Disk v. U. S., 6 Pet., 173, 203; Denny v. Williams, 5 Allen, 1; Bell v. Bruen, i How., 182; Hyde v. Goodnow, 3 Comst., 36q; Staples v. Nott, 28 N. E. Rep. (N.Y.), 515; Lee V. Selleck, 33 N. Y., 615; Bank v. Low, 81 N. ¥., 566; Transportation Co. v. Kilderhouse, 87 N. Y., 430; Sheldon v. Haxtun, 91 N. Y., 124; Bigelowv. Burnham, 49 N. W. Rep.(Ia. ), 104; Burrows v. Stryker, 47 la., 477; Orcutt v. Hough, 54 N. H., 472; Scott V. Perlee, 39 Ohio st, 63; Martin v. Johnson, 10 S. E. Rep., 1092; 8 L. R. A., 170; Daniel on Neg. Inst, sec. 922; Story on the Conflict of Laws, sees. 242, 280, 281. CHAPTER XXIII. Sureties or the Contract of Suretyship. SECTION 63. THE CONTRACT OF SURETYSHIP OR OF SURETY CORRES- PONDS IN MANY RESPECTS WITH THAT OF GUARANTY, BUT MANY IMPORTANT DIEFERENCES EXIST, WHICH SHOULD BE CAREFULLY NOTED. Surety — Defined. — The contract of surety may be defined as an original undertaking to answer for the debt, default or miscarriage of another. Form of the Contract. — It may be stated as a general rule that no particular form is required. It may or may not be in writing. But when connected with a commercial con- tract, it must be written.' Consideration of. — i. If the contract of suretyship is executed and delivered at the same time and as a part of the principal negotiable contract, then the same consideration which supports the negotiable contract is sufficient to sup- port the contract of suretyship. Leonard v. Vredenburgh,^ Parkhurst v. Vail.^ 2. If the contract of suretyship is executed and delivered at a different time than the principal contract, there must be some new consideration.* 'Tiedeman on Bills and Notes, Sec. 158; Allen v. Harrah, 30 la., 363; Larrusse v. Barker, 3 Wheat., loi. ^8 Johns., 29. ^73 111., 343; Moses V. Lawrence Co. Bk., 149 U. S., 298; Leonard v. Vredenburgh, 8 Johnson, 29. * Leonard v. Vredenburgh, supra; Rigby v. Norwood, 34 Ala., 129; Star Wagon Co. v. Swezey, 63 la., 520; Draper v. Snow, 20 N. Y., 331; 75 Am. Dec, 408; Good v. Martin, 94 U. S., 90; Evansville Nat. Bk. v. Kaufman, 93 N. Y., 273; 45 Am. Rep., 204; Williams v. Williams, 67 Mo., 667; Seyfert v. Harrison, 88 Ky., 461; Farmer V. Perry, 70 la., 358. 472 SURETIES OR THE CONTRACT OF SURETYSHIP. [CHAP. 23, Negotiability of. — i. Being a common law contract, it is therefore not negotiable. 2. But when connected with and made a part of a ne- gotiable commercial contract, the weight of authority is that it passes with the commercial contract.' Grace. — Inasmuch as the contract of suretyship is a com- mon law contract, it is not entitled to grace as a distinct con- tract. But when it is connected with and made part of a commercial contract, no liability can arise upon it until the lapse of grace. Presentment, Demand, Notice of Dishonor — Neces- sity for. — It may be stated as a general rule that presentment, demand and notice of dishonor are not necessary in order to render a surety liable. A surety is bou7id with his principal as an original promisor, and his obligation is equally abso- lute} Mere delay of the creditor to sue the principal will not discharge a surety." Liability of Sureties. — A surety is liable as follows: 1. He is liable for the amount of the contract; 2. He is liable with the principal and at the same time; 3. He is liable alone and independently of the principal; 4. He may be sued before the principal; 5. He is liable without presentment and demand, un- less those steps are required by the terms of his contract. Surety's Liability — How Discharged. — i. It may be stated as a general rule that whatever discharges the principal discharges the surety. But the principal may be discharged 'Barlow v. Meyers, 64 N. Y., 41; 21 Am. Rep., 547; First Nat. Bk. V. Carpenter, 41 la., 518; McLaren v. Watson, etc., 20 Wend., 425; 37 Am. Dec, 260; Gage v. Mechanics Bk., 79 111., 62; Ellsworth V. Harmon, loi III., 274; Green v. Burroughs, 47 Mich., 70; Baldwin v. Dow, 130 Mass., 416; Jones v. Dow, 142 Mass., 130; 7 N. E. Rep., 839. 'Roberts v. Hawkins, 70 Mich., 566; 38 N. W. R., 575; Gage V. Bank, 79 111., 62; Davis Sewing Machine Co. v. Jones, 61 Mo., 409; Dole V. Young, 24 Pick., 252; Parkhurst v. Vail, 73 111., 343; Green v. Thompson, 33 la., 293. ^Lenox v. Prout, 3 Wheat., 524, Powell v. Waters, 17 Johns., 176; Rodabaugh v. Pitkin, 46 la., 544; Cromwell v. Hewitt, 40 N. Y., 491; 100 Am. Dec, 527; Dorglass v. Reynolds, 7 Pet. 126; Wright V. Dyer, 48 Mo., 525. SEC. 63. J SURETIES OR THE CONTRACT OF SURETYSHIP. 473 when the surety is not. As, for instance, when the principal is (a) a married woman, (d) an infant, or (c) where the surety has actually signed and the signatures of the other parties have been forged. 2. But specially the surety may be discharged in the fol- lowing ways: («) by payment; {d) by alteration in a mater- ial part; (c) by release of the principal, unless there has been a reservation against the surety;' (d) misrepresentation on the part of the principal releases the surety as to all parties to such transaction;^ (e) by satisfaction; (/") by creditors' parting with securities.' (This discharge, however, is only pro tanto)\ {£■) by diversion of the funds,* (k) by entering into a binding agreement not to sue prior parties; (?) by a valid agreement for the extension of time by the principal obligee. It may be said, however, that a mere extension of time simply is no consideration.'^ Neither will a part payment of the prin- cipal or interest be a £ood consideration for the extension of time. The extension of time which will release a surety must be upon a valid consideration and for a definite period. It has been held that a part payment of the principal in advance is a good consideration, as well as a payment of interest in ad- vance. So also will an agreement to pay a larger rate of in- terest, in consideration of an extension of time, be a good consideration. A mere forbearance to sue simply is no con- sideration for the extension of time. If, however, the surety offers to indemnify the principal obligee against loss in case an action is brought against the principal debtor, then the prin- cipal obligee must bring an action, or otherwise the surety will be released.'' '10 Pick., 528; 7 Wend., 429; 2 Cal., 121; 26 Kan., 573; 24 Mo. App., 317. '^ 3 Ohio State, 302; 52 Iowa, 94. = 5 Pick., 507; 2 Neb., 265. ' I Par. B. & N., 236. "HI Pa. State, 187; 41 Ohio State, 603; 95 Ind., 156; 58 Mich., 343; 100 N. Y., 539. * 4 Johns. Chancery, 123. 474 SURETIES OR THE CONTRACT OF SURETYSHIP. [CHAP. 23, Rights of Surety. — i. He may commence proceedings in chancery to compel creditors to sue the principal obligor.' 2. He may go into chancery and compel the creditor to sue by indemnifying him.'' 3. He may pay the debt himself and bring an action against the principal obligee. 4. If there are co-sureties, after he has paid the debt he may sue them for contribution.^ 5. If he compromises with the creditor, he may recover that amount only of the debtor.* 6. If he pays the debt in a depreciated currency, he may recover its actual value only.^ '17 [ohns., 324. ^ 6 Grat., 524. 'Johnson v. Harvey, 84 N. Y., 363; 38 Am. Rep., 515; Voss V. Lewis, 126 Ind., 155; Houck v. Graham, 123 Ind., 277; Robert- son V. Deatherage, 82 111., 511; Stump v. Richardson Co. Bk., 24 Neb., 522. *22 Grat., 524. '22 Grat., 753. CHAPTER XXIV. Guarantor, or Contract of Guaranty. SECTION 64. THE CONTRACT OF GUARANTY DIFFERS IN SOME IMPORT- ANT RESPECTS FROM THE CONTRACT OF SURETY, AND IT IS NOT EASY TO DEFINE IT IN ANY BRIEF AND COMPREHENSIVE FORMULA. The Contract of Guaranty— Defined.— The contract of guaranty may be defined as a collateral undertaking to answer for the debt, default or miscarriage of another. It may be distinguished from the contract of surety in this, that it is sec- ondary and collateral to the principal debt, while the contract of surety is primary and principal. In other words, a guar- antor promises to pay the contract if the principal cannot, while a surety promises to pay the contract if the principal does not; i. e. , a guarantor insures the solvency of the debtor, while a surety insures the payment of the debt. Form Required. — The contract of guaranty comes within the Statute of Frauds, and therefore must be in writing. No particular phraseology, however, is required. Consideration for. — The contract of guaranty being a common law contract, it must be supported by a consideration. The consideration of the principal contract, however, is suffi- cient to support the contract of guaranty when they are exe- cuted and delivered at the same time and as a part of the same instrument.' If, however, the contract-of guaranty is written upon a promissory note after the note has been delivered and taken effect as a contract, there must be a new and distinct consideration to support it.^ A forbearance to sue is sufficient consideration to support the contract of guaranty. 'Parkhurst v. Vail, 73 111., 343; 20 N. Y., 331. ^Rigby V. Norwood, 34 Ala., 129; 67 Mo., 667, 5 Gush., 80. 476 GUARANTOR, OR CONTRACT OF GUARANTY. [CHAP. 24, Negotiability of. — The contract of guaranty being a com- mon law contract, it is not negotiable. But when it is con- nected with and made a part of a commercial contract, the weight of authority permits it to pass with the principal con- tract. Upon this question, however, there is much conflict in the authorities.' Grace. — The contract of guaranty being a common law contract standing alone, of course is not entitled to grace. But when the same is connected with a commercial contract it partakes of this characteristic, inasmuch as no liability can accrue against the guarantor until the principal debtor has become absolutely liable. Kinds of Guarantees. — The kinds of guarantees may be enumerated as follows: They are general, special, conditional, absolute, limited, unlimited, temporary and continuing. The term used to designate the particular kind of a guaranty suffi- ciently explains its meaning. Presentment, Demand, Notice of Dishonor — Neces- sity for. — It may be stated as a general rule that the under- taking of a guarantor is not conditional; it is absolute, — that the maker shall pay the note when due or he will; and to render him liable no demand is necessary. But if the con- tract of guaranty depends upon a contingency, then a demand and notice must be given within a reasonable time. It will be noticed here, however, that the strict rule of presentment, demand and notice of dishonor does not apply to the contract of guaranty even in this case.^ When the terms of the con- tract are absolute, the courts do not agree as to the necessity of presentment, demand and notice of dishonor. For the cases holding that no demand is necessary, see 20 Johns. , 366; 19 Ohio State, 553; 40 111., 159. Holding that demand, etc., is necessary, see 7 Peters, 126; 12 Peters, 523. It may be said that even where presentment and demand and notice of dishonor are required, it is sufficient if they are made and done in a reasonable time. And even if omitted 'See in favor of the proposition, Story on Bills, § 458, and contra, Parsons on B. & N., 133. ^See 12 Peters, 207; 45 Ohio State, 388; 39 111., 577; 19 Ohio State, 453. •SEC. 64.] GUARANTOR, OR CONTRACT OF GUARANTY. 477 altogether, the guarantor is not released unless he has suffered some loss, and then only pro tanto} If the principal debtor is insolvent at the time of the maturity of the contract and so continues, the guarantor cannot complain of a failure or delay to make demand.^ Liability of a Guarantor.— At common law he was not liable until it was shown that the principal debtor could not pay the debt, i. e., a judgment and execution had to precede an action against the guarantor. But now by statute in many of the states this common law rule has been changed so that a guarantor may be sued with the principal and at the same time. He is liable for the full amount of the contract. Liabilities of Guarantor — How Discharged. — It may be stated generally that whatever discharges the principal dis- charges the guarantor. The guarantor may also be discharged by payment, by extension of time by the creditor (if upon sufficient consideration), by surrender of any security held by the creditor, and by a forbearance to sue the principal within a reasonable time. Rights of Guarantor. — I. When he pays the debt, he is subrogated to all the rights of the original creditor. 2. When he pays the debt, he should insist upon keeping the note alive, i. e., he should not allow the note to be can- celled. 3. If, however, the note is cancelled, he may still sue for money paid for the use of the debtor. '2 Mich., 504; 39 111., 577; 40 111., 155. ^12 Peters, 525. Chapter 25 ( i 26 27 28 29 30 31 32 33 THE AMERICAN UNIFORM NEGOTIA- BLE INSTRUMENTS LAW.> CONTENTS. [I] General Provisions. (§ 1-17.) [II] Form and Interpretation of Negotiable Instruments. (§§ 20-42.) [III] Consideration. (§§ 50-55.) [IV] Negotiation. (§§ 60-80.) [V] Rights of Holder. (§§ 90-98.) [VI] Liabilities of Parties. (§§ 110-119.) [VIIJ Presentment for Payment. (§§ 130-148.) [VIII] Notice of Dishonor. (§§ 160-189.) [IX] Discharge of Negotiable Instruments. (§§ 209-206.) " 34 [X] Bills of Exchange; Form and Interpreta- tion (§§ 210-215.) 35 [XI] Acceptance. (§§ 220-230.) 'It has been adopted in the following States of the United States: 1. Colorado, Laws of 1897, Chapter 239; 2. Connecticut, Laws of 1897, Chapter 74; 3. Florida, Laws of 1867, Chapter 4524; 4. Maryland, Laws of 1897; 5. New York, Laws of 1897, Chapter 612; 6. The District of Columbia, 1897. The chapters following are articles of the New York Negotia- ble Instruments Law. They constitute Chapter 50 of the general laws of New York. It became a law May r9, 1897, and went into effect Oct. I of the same year. This act was recommended by the Commissioners on the Uniformity of Laws. The following states, Colorado, Connecticut, Florida, Maryland, Virginia and the District of Columbia have each enacted the same recommendation into law. The acts of the different states are identical except as to headings and sections. It is expected that this uniform law will ultimately be adopted in all the states. It has been recom- mended for adoption in Rhode Island, Massachusetts and South Carolina. The chapters and sections in brackets are those cor- responding to the New York law. 480 UNIFORM NEGOTIABLE INSTRUMENTS LAW. Chapter 36 [XII] Presentment for Acceptance. (§§ 240- 248.) 37 [XIII] Protest. (§§ 260-268.) 38 [XIV] Acceptance for Honor. (§§ 280-290.) 39 [XV] Payment for Honor. (§§ 300-306.) 40 [XVI] Bills in a Set. (§§ 310-315-) 41 [XVII] Promissory Notes and Checks. (§§ 320- 325-) 42 [XVIII] Notes Given for a Patent Right and for a Speculative Consideration. (S§ 330- 332.) 43 [XIX] Laws Repealed, When to Take Effect. (§§ 340-341.) CHAPTER XXV. General Provisions. SECTION 65. SHORT TITLE. [i.] This act shall be known as the negotiable instru- ments law. SECTION 66. DEFINITIONS AND MEANING OF TERMS. [2. J In this act, unless the context otherwise requires: ' ' Acceptance " means an acceptance completed by deliv- ery or notification. " Action" includes counter-claim and set-off. ' ' Bank " includes any person or association of persons carrying on the business of banking, whether incorporated or not. ' ' Bearer " means the person in possession of a bill or note which is payable to bearer. "Bill "means bill of exchange, and " note " means ne- gotiable promissory note. " Delivery" means transfer of possession, actual or con- structive, from one person to another. ' ' Holder " means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof. "Indorsement" means an indorsement completed by delivery. " Instrument" means negotiable instrument. " Issue" means the first delivery of the instrument, com- plete in form to a person who takes it as a holder. "Person" includes a body of persons, whether incorpor- ated or not. 482 GENERAL PROVISIONS. [CHAP. 25, 'Value" means valuable consideration. 'Written" includes printed, and "writing" includes print. SECTION 67. PERSON PRIMARILY LIABLE ON INSTRUMENT. [3. J The person "primarily" liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same. All other parties are "secondarily" liable. SECTION 68. REASONABLE TIME, WHAT CONSTITUTES. [4.] In determining what is a "reasonable time" or an • unreasonable time' regard is to be had to the nature of the instrument, the usage of trade or business (if any) with re- spect to such instruments, and the facts of the particular case. SECTION 69. TIME, HOW COMPUTED: WHEN LAST DAY FALLS ON HOLIDAY. [5. J Where the day, or the last day, for doing any act herein required or permitted to be done falls on Sunday or on a holiday, the act may be done on the next succeeding secu- lar or business day. SECTION 70. APPLICATION OF CHAPTER. [6. J The provisions of this act do not apply to negotia- ble instruments made and delivered prior to the passage hereof. SEC. 71. J GENERAL PROVISIONS. 483 SECTION 71. LAW MERCHANT; WHEN GOVERNS. [7.] In any case not provided for in this act the rules of the law merchant shall govern. CHAPTER XXVI. Form and Interpretation. SECTION 72. FORM OF NEGOTIABLE INSTRUMENT. [20. J An instrument to be negotiable must conform to the following requirements: 1. It must be in writing and signed by the maker or drawer; 2. Must contain an unconditional promise or order to pay a sum certain in money; 3. Must be payable on demand, or at a fixed or deter- minable future time; 4. Must be payable to order or to bearer; and 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reason- able certainty. SECTION 73. CERTAINTY AS TO SUM; WHAT CONSTITUTES.' [21.] The sum payable is a sum certain within the meaning of this act, although it is to be paid: 1. With interest; or 2. By stated installments; or 3. By stated installments, with a provision that upon default in payment of any installment or of interest, the whole shall become due; or ' The foregoing section, with the exception of the last subdi- vision, is taken from the English Bills of Exchange Act, Sec. 9, subd. I. SEC. 74. J FORM AND INTERPRETATION. 485 4. With exchange, whether at a fixed rate or at the current rate, or 5. With costs of collection or an attorney's fee, in case payment shall not be made at maturity. SECTION 74. WHEN PROMISE IS UNCONDITIONAL.' [22. ] An unqualified order or promise to pay is uncon- ditional within the meaning of this act, though coupled with: 1. An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or 2. A statement of the transaction which gives rise to the instrument. But an order or promise to pay out of a particular fund is not unconditional. SECTION 75. DETERMINABLE FUTURE TIME; WHAT CONSTITUTES.^ [2 3. J An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable: 1. At a fixed period after date or sight; or 2. On or before a fixed or determinable future time specified therein; or 3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not nego- tiable, and the happening of the event does not cure the de- fect. 'This section is taken from the English Bills of Exchange Act, Sec. 3, Subd. 3. ''This section is substantially Section 11 of the English Bills of Exchange Act, with the exception of subd. 2, which is added. 486 FORM AND INTERPRETATION. [CHAP. 26, SECTION 76. ADDITIONAL PROVISIONS NOT AFFECTING NEGOTIABIL- ITY. [24.] An instrument which contains an order or promise to do any act in addition to the payment of money is not ne- gotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which: 1. Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or 2. Authorizes a confession of judgment if the instru- ment be not paid at maturity; or 3. Waives the benefit of any law intended for the ad- vantage or protection of the obligor; or 4. Gives the holder an election to require something to be done in lieu of payment of money. But nothing in this section shall validate any provision or stipulation otherwise illegal. SECTION 77. OMISSIONS; SEAL; PARTICULAR MONEY.' [25.] The validity and negotiable character of an in- strument are not affected by the fact that: 1. It is not dated; or 2. Does not specify the value given, or that any value has been given therefor; or 3. Does not specify the place where it is drawn or the place where it is payable; or 4. Bears a seal; or 5. Designates a particular kind of current money in which payment is to be made. But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consider- ation to be stated in the instrument. ' The first three subdivisions are from the English Bills of Ex- change Act, Sec. 3. SEC. 78. ] FORM AND INTERPRETATION. 487 SECTION 78. WHEN PAYABLE ON DEMAND. [26.] An instrument is payable on demand: 1. Where it is expressed to be payable on demand, or at sight, or on presentation; or 2. In which no time for payment is expressed. Where an instrument is issued, accepted or indorsed when overdue, it is, as regards the person so issuing, accepting or indorsing it, payable on demand. SECTION 79. WHEN PAYABLE TO ORDER. [27.] The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It may be drawn payable to the order of: 1. A payee who is not maker, drawer or drawee; or 2. The drawee' or maker; or 3. The drawee; or 4. Two or more payees jointly; or 5. One or some of the several payees; or 6. The holder of an office for the time being. Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable cer- tainty. SECTION 80. WHEN PAYABLE TO BEARER.^ [28. J The instrument is payable to bearer: 1. When it is expressed to be so payable; or 2. When it is payable to a person named therein or bearer; or ' Probably intended for drawer. ^This section is, in substance, Section 8 of the English Bills of Exchange Act. 488 FORM AND INTERPRETATION. [CHAP. 26, 3. When it is payable to the order of a fictitious or non- existing person, and such fact was known to the person mak- ing it so payable; or 4. When the name of the payee does not purport to be the name of any person; or 5. When the only or last indorsement is an indorsement in blank.' SECTION 81. TERMS WHEN SUFFICIENT. [29. J The instrument need not follow the language of this act. but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof. SECTION 82. DATE PRESUMPTION AS TO. [30.] Where the instrument or an acceptance or any in- dorsement thereon is dated, such date is Aeemed pritna facie to be the date of the making, drawing, acceptance or indorse- ment, as the case may be. SECTION 83. ANTE-DATED AND POST-DATED. - [31.] The instrument is not invalid for the reason only that it is ante-dated or post-dated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. 'Armstrong v. Pomeroy, Nat. Bk., 46 Ohio St., 512; Bennett V. Farwell, i Campb., 130. ^Thisis Sec. 13, subd. i, of the EngHsh Bills of Exchange Act, in substance. SEC. 84. j FORM AND INTERPRETATION. 489 SECTION 84. WHEN DATE MAY BE INSERTED.' [32. J Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the ac- ceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of is- sue or acceptance, and the instrument shall be payable ac- cordingly. The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date. SECTION 85. BLANKS; WHEN MAY BE FILLED.-' [33-] Where the instrument is wanting in any material particular, the person in possession thereof has ^. prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill up as such for any amount. In order, however, that any such instrument, when completed, may be enforced against any person who became a party thereto prior to its comple- tion, it must be filled up strictly in accordance with the au- thority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in ac- cordance with the authority given and within a reasonable time. 'This is, in substance, Section 12 of the English Bills of Ex- change Act. ^This is taken from Section 20 of the English Bills of Exchange Act. 490 FORM AND INTERPRETATION. [CHAP. 26, SECTION 86. INCOMPLETE INSTRUMENT NOT DELIVERED. [34.] Where an incomplete instrument has not been de- livered it will not, if completed and negotiated, without author- ity, jbe a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery. SECTION 87. DELIVERY; WHEN EFFECTUAL; WHEN PRESUMED. [35.] Every contract on a negotiable instrument isin com- plete and revocable until delivery of the instrument for the pur- pose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accept- ing or indorsing, as the case may be; and in such case the de- livery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the prop- erty in the instrument. But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved. SECTION 88. CONSTRUCTION WHERE INSTRUMENT IS AMBIGUOUS.' [ 36. J Where the language of the instrument is ambiguous, or there are omissions therein, the following rules of construc- tion apply: ' Subd. I. The first clause in this subdivision is taken from the English Bills of Exchange Act, sec. 9, subd. 2. SEC. 89. J FORM AND INTERPRETATION. 49 1 1. Where the sum payable is expressed in words and also in figures and there is a discrepancy between the two, the sum denoted by the words is the sum payable; but if the words are ambiguous or uncertain, reference may be had to the figures to fix the amount; 2. Where the instrument provides for the payment of interest, without specifying the date from which interest is to run, the interest runs from the date of the instrument, and if the instrument is undated, from the issue thereof; 3. Where the instrument is not dated, it will be consid- ered to be dated as of the time it was issued; 4. When there is a conflict between the written and printed provisions of the instrument, the written provisions prevail; 5. Where the instrument is so ambiguos that there is doubt whether it is a bill or note, the holder may treat it as either at his election; 6. Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is to be deemed an indorser; 7. Where an instrument containing the words " I prom- ise to pay " is signed by two or more persons, they are deemed to be jointly and severally liable thereon. SECTION 89. LIABILITY OF PERSONS SIGNING IN TRADE OR ASSUMED NAME. [ 37. ] No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise expressly provided. But one who signs in a trade or assumed name will be liable to the same extent as if he had signed in his own name. SECTION 90. SIGNATURE BY AGENT; AUTHORITY HOW SHOWN. [38. ] The signature of any party may be made by a duly authorized agent. No particular form of appointment is 492 FORM AND INTERPRETATION. [CHAP. 26, necessary for this purpose; and the authority of the agent may be estabhshed as in other cases of agency.' SECTION 91. LIABILITY OF PERSON SIGNING AS AGENT, ETC. [39. j Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere ad- dition of words describing him as an agent, or as filling a rep- resentative character, without disclosing his principal, does not exempt him from personal liability. SECTION 92. SIGNATURE BY PROCURATION; EFFECT OF.^ [40. A signature by " procuration" operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority. SECTION 93. EFFECT OF INDORSEMENT BY INFANT OR CORPORATION.' [41. J The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity the corporation or infant may incur no liability thereon. 'Allen V. Williams, 97 Cal., 403. ' English Bills of Exchange Act, sec. 25. ^This section is taken from the English Bills of Exchange Act, sec. 22, subd. 2. SEC. 94. ] FORM AND INTERPRETATION. 493 SECTION 94. FORGED SIGNATURES; EFFECT OF.' [42. ] Where a signature is forged or made without au- thority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority. ' See sec. 24 of the English Bills of Exchange Act. CHAPTER XXVII. Consideration of Negotiable Instruments SECTION 95. PRESUMPTION OF CONSIDERATION. [50. ] Every negotiable instrument is deemed /r2»«« /«- cic to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value. SECTION 96. CONSIDERATION, WHAT CONSTITUTES. [5 1. J Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt consti- tutes value; and is deemed such whether the instrument is payable on demand or at a future time. SECTION 97. WHAT CONSTITUTES HOLDER FOR VALUE.' [52. j Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who became such prior to that time. ' This section is taken from the English Bills of Exchange Act, sec. 27, subd. 2, and is founded upon Hunter v. Wilson, 4 Ex.,- 489. See Daniel, sec. 174a. SEC. 98.] NEGOTIABLE INSTRUMENTS. 495. SECTION 98. WHEN LIEN ON INSTRUMENTS CONSTITUTES HOLDER FOR VALUE.i [53. J Where the holder has a Hen on the instrument, arising either from contract or by iniphcation of law, he is deemed a holder for value to the extent of his lien. SECTION 99. EFFECT OF WANT OF CONSIDERATION. [54. j Absence or failure of consideration is matter of defense as against any person not a holder in due course; and partial failure of consideration is a defense pro tanto whether the failure is an ascertained and liquidated amount or other- wise. SECTION 100. LIABILITY OF ACCOMMODATION INDORSER.'' [55. J An accommodation party is one who has signed the instrument as maker, drawer, acceptor or indorser, with- out receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party. ' This section is taken from the English Bills of Exchange Act, sec. 27, subd. 3, and is founded upon Collins v. Martin, i Bos. & P., 648. ^This is taken from sec. 28, of the English Bills of Exchange Act. CHAPTER XXVIII. Negotiation. SECTION 101. WHAT CONSTITUTES NEGOTIATION. [60. J An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferree the holder thereof. If payable to bearer it is negotiable by delivery; if payable to order it is negotiated by the indorsement of the holder completed by delivery. SECTION 102. INDORSEMENT; HOW MADE. [61. J The indorsement must be written on the instru- ment itself or upon a paper attached thereto. The signature of the indorser, without additional words, is a sufficient in- dorsement.' SECTION 103. INDORSEMENT MUST BE OF ENTIRE INSTRUMENT. [62. J The indorsement must be an indorsement of the entire instrument. An indorsement, which purports to trans- fer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more in- dorsees severally, does not operate as a negotiation of the in- strument. But where the instrument has been paid in part, it may be indorsed as to the residue. ' Brown v. Butchers and Drovers Bank, 6 Hill, 443; 41 Am. Dec. 755; Johnson III. Cases, 114. SEC. I04.J NEGOTIATION. 497 SECTION 104 KINDS OF INDORSEMENT. [63. J An indorsement may be either special or in blank; and it may also be either restrictive or qualified, or condi- tional. SECTION 105. SPECIAL INDORSEMENT; INDORSEMENT IN BLANK. [64. ] A special indorsement specifies the person tO' whom, or to whose order the instrument is to be payable; and the indorsement of such indorsee is necessary to the further negotiation of the instrument. An indorsement in blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery. SECTION 106. BLANK INDORSEMENT; HOW CHANGED TO SPECIAL INDORSEMENT. [65. j The holder may convert a blank indorsement into- a special indorsement by writing over the signature of the in- dorser in blank any contract consistent with the character of the indorsement. SECTION 107. WHEN INDORSEMENT RESTRICTIVE. [66. J An indorsement is restrictive, which either: 1 . Prohibits the further negotiation of the instrument; or 2. Constitutes the indorsee the agent of the indorser; or 3. Vests the title in the indorsee in trust for or to the- use of some other person. But the mere absence of words implying power to nego- tiate does not make an indorsement restrictive. 498 NEGOTIATION. [chap. 28, SECTION 108. EFFECT OF RESTRICTIVE INDORSEMENT; RIGHTS OF INDORSEE. [67.] A restrictive indorsement confers upon the in- dorsee the right: 1. To receive payment of the instrument; 2. To bring any action thereon that the indorser could bring; 3. To transfer his rights as such indorsee, where the form of the indorsement authorizes him to do so. But all subsequent indorsees acquire only the title of the first indorsee under the restrictive indorsement. SECTION 109. QUALIFIED INDORSEMENT. [68. J Qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words ' ' without re- course" or any words of similar import. Such an indorse- ment does not impair the negotiable character of the instru- ment. SECTION 110. CONDITIONAL INDORSEMENT. [69. ] Where an indorsement is conditional, a party re- quired to pay the instrument may disregard the condition, and make payment to the indorsee or his transferee, whether the condition has been fulfilled or not. But any person to whom an instrument so indorsed is negotiated, will hold the same, or the proceeds thereof, subject to the rights of the person in- dorsing conditionally. SEC. III.] NEGOTIATION. 499 SECTION 111. INDORSEMENT OF INSTRUMENT PAYABLE TO BEARER. [70.] Where an instrument, payable to bearer, is in- dorsed specially, it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as in- dorser to only such holders as make title through his indorse- ment. SECTION 112. INDORSEMENT WHERE PAYABLE TO TWO OR MORE PERSONS. [71. J Where an instrument is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others. SECTION 113. EFFECT OF INSTRUMENT DRAWN OR INDORSED TO A PERSON AS CASHIER. [72.] Where an instrument is drawn or indorsed to a person as "cashier" or other fiscal officer of a bank or cor- poration, it is deemed prima facie to be payable to the bank or corporation of which he is such officer; and may be nego- tiated by either the indorsement of the bank or corporation, or the indorsement of the officer. SECTION 114. INDORSEMENT WERE NAME IS MISSPELLED, ET CETERA. [73.] Where the name of a payee or indorsee is wrongly designated or misspelled, he may indorse the instrument as therein described, adding, if he think fit, his proper signature. 500 NEGOTIATION. [CHAP. 28, SECTION 115. INDORSEMENT IN REPRESENTATIVE CAPACITY. [74. J Where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability. SECTION 116. TIME OF INDORSEMENT; PRESUMPTION. [75. ] Except where an indorsement bears date after the maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue. SECTION 117, PLACE OF INDORSEMENT; PRESUMPTION. [76. J Except where the contrary appears, every indorse- ment is presumed prima facie to have been made at the place where the instrument is dated. SECTION 118. CONTINUATION OF NEGOTIABLE CHARACTER. [77. J An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or dis- charged by payment or otherwise. SECTION 119. STRIKING OUT INDORSEMENT. [78. J The holder may at anytime strike out any in- dorsement which is not necessary to his title. The indorser SEC. 120.] NEGOTIATION. 50I whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument. SECTION 120. TRANSFER WITHOUT INDORSEMENT; EFFECT OF. [79. ] Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferrer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferrer. But for the purpose of deter- mining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made. SECTION 121. WHEN PRIOR PARTY MAY NEGOTIATE INSTRUMENT. [80. ] Where an instrument is negotiated back to a prior party, such party may, subject to the provisions of this act, reissue and further negotiate the same. But he is not entitled to enforce payment thereof against any intervening party to whom he was personally liable. CHAPTER XXIX. Rights of Holders. SECTION 122. RIGHT OF HOLDER TO SUE; PAYMENT [90. ] The holder of a negotiable instrument may sue thereon in his own name; and payment to him in due course discharges the instrument. SECTION 123. WHAT CONSTITUTES A HOLDER IN DUE COURSE.' [91. J A holder in due course is a holder who has taken the instrument under the following conditions: 1. That it is complete and regular upon its face; 2. That he became the holder of it before it was over- due, and without notice that it had been previously dis- honored, if such was the fact; 3. That he took it in good faith and for value; 4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. SECTION 124. WHEN PERSON NOT DEEMED HOLDER IN DUE COURSE. [92. ] Where an instrument payable on demand is ne- gotiated an unreasonable length of time after its issue, the holder is not deemed a holder in due course. 'This section is taken from the English Bills of Exchange Act, sec. 29. SEC. 125.] RIGHTS OF HOLDERS. 503 SECTION 125. NOTICE BEFORE FULL AMOUNT PAID. [93. J Where the transferee receives notice of any in- firmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the amount theretofore paid by him. SECTION 126. WHEN TITLE DEFECTIVE. [94. j The title of a person who negotiates an instru- ment is defective within the meaning of this act when he ob- tained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amounts to a fraiud. SECTION 127. WHAT CONSTITUTES NOTICE OF DEFECT. [95. J To constitute notice of an infirmity in the instru- ment or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. SECTION 128. RIGHTS OF HOLDER IN DUE COURSE. [96. j A holder in due course holds the instrument free from any defect of title of prior parties and free from defenses available to prior parties among themselves, and may enforce 504 RIGHTS OF HOLDERS. [CHAP. 29, payment of the instrument for the full amount thereof against all parties liable thereon. SECTION 129. WHEN SUBJECT TO ORIGINAL DEFENSES. [97. ] In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same de- fenses as if it were non-negotiable. But a holder who derives his title through a holder in due course, and who is not him- self a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter. SECTION 130. WHO DEEMED HOLDER IN DUE COURSE. [98. ] Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course. But the last-mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title. CHAPTER XXX. Liabilities of Parties. SECTION 331. LIABILITY OF MAKER. [no. J The maker of a negotiable instrument by mak- ing it engages that he will pay it according to its tenor; and admits the existence of the payee and his then capacity to indorse. SECTION 132. LIABILITY OF DRAWER. [iii.j The drawer by drawing the instrument admits the existence of the payee and his then capacity to indorse; and engages that on due presentment the instrument will be accepted and paid, or both, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder. SECTION 133. LIABILITY OF ACCEPTOR. [II 2. J The acceptor by accepting the instrument en- gages that he will pay it according to the tenor of his accept- ance; and admits: 1. The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instru- ment; and 2. The existence of the payee and his then capacity to indorse. 5o6 LIABILITIES OF PARTIES. [CHAP. 30, SECTION 134. WHEN PERSON DEEMED INDORSER. [113.] A person placing his signature upon an instru- ment otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. SECTION 135. LIABILITY OF IRREGULAR INDORSER. [1 14. J Where a person, not otherwise a party to an in- strument, places thereon his signature in blank before deliv- ery, he is liable as indorser in accordance with the following rules: 1. If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties; 2. If the instrument is payable to the order of the maker or drawer, or is payable to bearer, he is liable to all parties subsequent to the maker or drawer; 3. If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee. SECTION 136. WARRANTY WHERE NEGOTIATION BY DELIVERY, ET CETERA. [115.] Every person negotiating an instrument by de- livery or by a qualified indorsement, warrants: I. That the instrument is genuine and in all respects what it purports to be; That he has a good title to it; That all prior parties had capacity to contract; That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless. SEC. 137.] LIABILITIES OF PARTIES. 507 But when the negotiation is by delivery only, the war- ranty extends in favor of no holder other than the immediate transferree. The provisions of subdivision three of this sec- tion do not apply to persons negotiating public or corporate securities, other than bills and notes. SECTION 137. LIABILITY OF GENERAL INDORSER. [116.] Every indorser who indorses without qualifica- tion, warrants to all subsequent holders in due course: 1. The matter and things mentioned in subdivisions one, two and three of the next preceding section; and, 2. That the instrument is at the time of his indorse- ment valid and subsisting. And, in addition, he engages that on due presentment, it shall be accepted or paid, or both, as the case may be, ac- cording to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indors- er who may be compelled to pay it. SECTION 138. LIABILITY OF INDORSER WHERE PAPER NEGOTIABLE BY DELIVERY. [117. J Where a person places his indorsement on an in- strument negotiable by delivery he incurs all the liabilities of an indorser. SECTION 189. ORDER IN WHICH INDORSERS ARE LIABLE. [118.] As respects one another, indorsers are liable prima facie in the order in which they indorse; but evidence is admissible to show that as between or among themselves they have agreed otherwise. Joint payees or joint indorsees who indorse are deemed to indorse jointly and severally. 5o8 LIABILITIES OF PARTIES. [CHAP. 30, SECTION 140. LIABILITY OF AGENT OR BROKER. [119.] Where a broker or other agent negotiates an in- strument without indorsement, he incurs all the liabilities pre- scribed by Section 115' of this act, unless he discloses the name of his principal, and the fact that he is acting only as agent. ' This is Sec. 65 in the other states. CHAPTER XXXI. Presentment for Payment. SECTION 141. . EFFECT OF WANT OF DEMAND ON PRINCIPAL DEBTOR. [1 30. J Presentment for payment is not necessary in or- der to charge the person primarily Hable on the instrument; but if the instrument is, by its terms, payable at a special place, and he is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender of pay- ment upon his part. But except as herein otherwise pro- vided, presentment for payment is necessary in order to charge the drawer and indorsers. SECTION 142. PRESENTMENT WHERE INSTRUMENT IS NOT PAYABLE ON DEMAND. [131.] Where the instrument is not payable on demand, presentment must be made on the day it falls due. Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof. SECTION 143. WHAT CONSTITUTES A SUFFICIENT PRESENTMENT. [132.] Presentment for payment, to be sufficient, must be made: ' This article is taken largely from the English Act and is gen- erally declaratory of the law. 5IO PRESENTMENT FOR PAYMENT. [CHAP. 3I, 1. By the holder, or by some person authorized to re- ceive payment on his behalf; 2. At a reasonable hour on a business day; 3. At a proper place as herein defined; 4. To the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where the presentment is made. SECTION 144. PLACE OF PRESENTMENT. [133.] Presentment for payment is made at the proper place: 1. Where a place of payment is specified in the instru- ment and it is there presented; 2. Where no place of payment is specified, but the ad- dress of the person to make payment is given in the instru- ment and it is there presented; 3. Where no place of payment is specified and no ad- dress is given and the instrument is presented at the usual place of business or residence of the person to make payment; 4. In any other case if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence. SECTION 145. INSTRUMENT MUST BE EXHIBITED. [134.] The instrument must be exhibited to the person from whom payment is demanded, and when it is paid must be delivered up to the party paying it. SECTION 146. PRESENTMENT WHERE INSTRUMENT PAYABLE AT BANK. [135. J When the instrument is payable at a bank, pre- sentment must be made during banking hours, unless the per- SEC. 147. J PRESENTMENT FOR PAYMENT. 5 II son to make payment has no funds there to meet it at any time during the day, in which case presentment at any hour before the bank is closed on that day is sufficient. SECTION 147. PRESENTMENT WHERE PRINCIPAL DEBTOR IS DEAD. [136. J Where the person primarily liable on the instru- ment is dead, and no place of payment is specified, present- ment for payment must be made to his personal representative, if such there be, and if, with the exercise of reasonable dili- gence, he can be found. SECTION 148. PRESENTMENT TO PERSONS LIABLE AS PARTNERS. [137. J Where the persons primarily liable on the instru- ment are liable as partners, and no place of payment is speci- fied, presentment for payment may be made to any one of them, even though there has been a dissolution of the firm. SECTION 149. PRESENTMENT TO JOINT DEBTORS. [138. J Where there are several persons not partners primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all. SECTION 150. WHEN PRESENTMENT NOT REQUIRED TO CHARGE THE DRAWER. [139. J Presentment for payment is not required in order to charge the drawer where he has no right to expect or re- quire that the drawee or acceptor will pay the instrument. JI2 PRESENTMENT FOR PAYMENT. [CHAP. 3 1, SECTION 151. WHEN PRESENTMENT NOT REQUIRED TO CHARGE THE INDORSER. [140. J Presentment for payment is not required in order to charge an indorser where the instrument was made or ac- cepted for his accommodation, and he has no reason to expect that the instrument will be paid if presented. SECTION 15'2. WHEN DELAY IN MAKING PRESENTMENT IS EXCUSED. [141. ] Delay in making presentment for payment is ex- cused when the delay is caused by circumstances beyond the control of the holder and not imputable to his fault, mis- conduct or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence. SECTION 153. WHEN PRESENTMENT MAY BE DISPENSED WITH. [142. J Presentment for payment is dispensed with: 1. Where after the exercise of reasonable diligence pre- sentment as required by this act cannot be made; 2. Where the drawee is a fictitious person; 3. By waiver of presentment expressed or implied. SECTION 154. WHEN INSTRUMENT DISHONORED BY NON-PAYMENT. [143. J The instrument is dishonored by non-payment when: I. It is duly presented for payment and payment is re- fused or cannot be obtained; or SEC. 155.] PRESENTMENT FOR PAYMENT. 513 2. Presentment is excused and the instrument is over- due and unpaid. SECTION 155. LIABILITY OF PERSON SECONDARILY LIABLE, WHEN IN- STRUMENT DISHONORED. [1 44. J Subject to the provisions of this act, when the instrument is dishonored by non-payment, an immediate fight of recourse to all parties secondarily Hable thereon, ac- crues to the holder. SECTION 156. TIME OF MATURITY. [145. ] Every negotiable instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday, or a holiday, the instrunaent is payable on the next succeeding business day. Instruments falling due on Saturday are to be presented for payment on the next suc- ceeding business day, except that instruments payable on de- mand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday. SECTION 157. TIME; HOW COMPUTED. [1 46. J Where the 'interest is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and by including the date of payment. SECTION 158. RULE WHERE INSTRUMENT PAYABLE AT BANK. [147.] Where the instrument is made payable at a bank 514 PRESENTMENT FOR PAYMENT. [CHAP. 3 1, it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon. SECTION 159. WHAT CONSTITUTES PAYMENT IN DUE COURSE. [148. J Payment is made in due course when it is made at or after the maturity of the instrument to the holder there- of in good faith and without notice that his title is defective. CHAPTER XXXII. Notice of Dishonor. SECTION 160. TO WHOM NOTICE OF DISHONOR MUST BE GIVEN. [i6o.] Except as herein otherwise provided, when a ne- gotiable instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged. SECTION 161. BY WHOM GIVEN. [161.J The notice may be given by or on behalf of the holder, or by or on behalf of any party to the instrument who might be compelled to pay it to the holder, and who, upon taking it up would have a right to reimbursement from the party to whom the notice is given. SECTION 162. NOTICE GIVEN BY AGENT. [162. J Notice of dishonor may be given by an agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not. SECTION 163. EFFECT OF NOTICE GIVEN ON BEHALF OF HOLDER. [163.] Where notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and 5l6 NOTICE OF DISHONOR. [CHAP. 32, all prior parties who have a right of recourse against the party to whom it is given. SECTION 164. EFFECT WHERE NOTICE IS GIVEN BY PARTY ENTITLED THERETO. [164. J Where notice is given by or on behalf of a party entitled to give notice, it enures for the benefit of the holder and all parties subsequent to the party to whom notice is given. SECTION 165. WHEN AGENT MAY GIVE NOTICE. [165. J Where the instrument has been dishonored in the hands of an agent, he may either himself give notice to the parties liable thereon, or he may give notice to his princi- pal. If he give notice to his principal, he must do so within the same time as if he were the holder, and the principal upon the receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder. SECTION 166. WHEN NOTICE SUFFICIENT. [166.] A written notice need not be signed, and an in- sufficient written notice may be supplemented and validated by verbal communication. A misdescription of the instru- ment does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby. SECTION 167. FORM OF NOTICE. [167. J The notice may be in writing or merely oral and may be given in any terms which sufficiently identify the SEC. 1 68.] NOTICE OF DISHONOR. 517 instrument, and indicate that it lias been dishonored by non- acceptance or non-payment. It may in all cases be given by delivering it personally or through the mails. SECTION 168. TO WHOM NOTICE MAY BE GIVEN. [168.] Notice of dishonor may be given either to the party himself or to his agent in that behalf. SECTION 169. NOTICE WHERE PARTY IS DEAD. [169. J "When any party is dead, and his death is known to the party giving notice, the notice must be given to a per- sonal representative, if there be one, and if, with reasonable diligence, he can be found. If there be no personal represen- tative, notice may be sent to the last residence or last place of business of the deceased. SECTION 170. NOTICE TO PARTNERS. [170. J Where the parties to be notified are partners, notice to any one partner is notice to the firm even though there has been a dissolution. SECTION 171. NOTICE TO PERSONS JOINTLY LIABLE. [17 1. J Notice to joint parties who are not partners must be given to each of them, unless one of them has authority to receive such notice for the others. 51^ NOTICE OF DISHONOR. [CHAP. 32, SECTION 172. NOTICE TO BANKRUPT. [172. J Where a party has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, notice may be given either to the party himself or to his trustee or assignee. SECTION 173.^ TIME WITHIN WHICH NOTICE MUST BE GIVEN. [173.] Notice may be given as soon as the instrument is dishonored; and unless delay is excused as hereinafter pro- vided, must be given within the times fixed by this act. SECTION 174. WHERE PARTIES RESIDE IN SAME PLACE. [174. J Where the person giving and the person to re- ceive notice reside in the same place, notice must be given within the following times: 1. If given at the place of business of the person to receive notice, it must be given before the close of business hours on the day following; 2. If given at his residence, it must be given before the usual hours of rest on the day following; 3. If sent by mail, it must be deposited in the postoffice in time to reach him in usual course on the day following. SECTION 175. WHERE PARTIES RESIDE IN DIFFERENT PLACES. [175.] Where the person giving and the person to re- ceive notice reside in different places, the notice must be given within the following times: SEC. 176. J NOTICE OF DISHONOR. 519 1. If sent by mail, it must be deposited in the postoffice in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day, by the next mail thereafter. 2. If given otherwise than through the postoffice, then within the time that notice would have been received in due course of mail, if it had been deposited in the postoffice within the time specified in the last subdivision. SECTION 176. WHEN SENDER DEEMED TO HAVE GIVEN DUE NOTICE. [176. J Where notice of dishonor is duly addressed and deposited in the postoffice, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails. SECTION 177. DEPOSIT IN POSTOFFICE; WHAT CONSTITUTES. [177. J Notice is deemed to have been deposited in the postoffice when deposited in any branch postoffice or in any letter box under the control of the postoffice department. SECTION 178. NOTICE TO SUBSEQUENT PARTY; TIME OF. [178.] Where a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving notice to antecedent parties that the holder has after the dis- honor. SECTION 179. WHERE NOTICE MUST BE SENT. [179.] Where a party has added an address to his sig- nature, notice of dishonor must be sent to that address; but 520 NOTICE OF DISHONOR. [CHAP. 32, if he has not given such address, then the note must be sent as follows: 1. Either to the postoffice nearest to his place of resi- dence, or to the postoffice where he is accustomed to receive his letters; or 2. If he live in one place, and have his place of busi- ness in another, notice may be sent to either place; or 3. If he is sojourning in another place, notice may be sent to the place where he is so sojourning. But where the notice is actually received by the party within the time specified in this act, it will be sufficient, though not sent in accordance with the requirements of this section. SECTION 180. WAIVER OF NOTICE. [180] Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied. SECTION 181. WHOM AFFECTED BY WAIVER. [181. J Where the waiver is embodied in the instrument itself, it is binding upon all parties; but where it is written above the signature of an indorser it binds him only. SECTION 182. WAIVER OF PROTEST. [182]. A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver not only of a formal protest, but also of presentment and notice of dishonor. SEC. 183. ] NOTICE OF DISHONOR. 52 1 SECTION 183. WHEN NOTICE IS DISPENSED WITH. [183]. Notice of dishonor is dispensed with when, after the exercise of reasonable diligence, it cannot be given to or does not reach the parties sought to be charged. SECTION 184. DELAY IN GIVING NOTICE; HOW EXCUSED. [184]. Delay in giving notice of dishonor is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, no- tice must be given with reasonable diligence. SECTION 185. WHEN NOTICE NEED NOT BE GIVEN TO DRAWER. [185]. Notice of honor is not required to be given to the drawer in either of the following cases: 1. Where the drawer and drawee are the same person; 2. Where the drawee is a fictitious person or a person not having capacity to contract; 3. Where the drawer is the person to whom the instru- ment is presented for payment; 4. Where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument; 5. Where the drawer has countermanded payment; SECTION 186. WHEN NOTICE NEED NOT BE GIVEN TO INDORSER. [186]. Notice of dishonor is not required to be given to an indorser in either of the following cases: 522 NOTICE OF DISHONOR. [CHAP. 32, 1. Where the drawee is a fictitious person or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the instrument; 2. Where the indorser is the person to whom the instru- ment is presented for payment; 3. Where the instrument was made or accepted for his accommodation. SECTION 187. NOTICE OF NON-PAYMENT WHERE ACCEPTANCE REFUSED. [187]. Where due notice of dishonor by non-acceptance has been given, notice of a subsequent dishonor by non-pay- ment is not necessary, unless in the meantime the instrument has been accepted. SECTION 188. EFFECT OF OMMISSION TO GIVE NOTICE OF NON- ACCEPTANCE. [188]. An omission to give notice of dishonor by non- acceptance does not prejudice the fights of a holder in due course subsequent to the omission. SECTION 189. WHEN PROTEST NEED NOT BE MADE; WHEN MUST BE MADE. [189]. Where any negotiable instrument has been dis- donored it may be protested for non-acceptance or non-pay- ment, as the case may be; but protest is not required, except in the case of foreign bills of exchange. CHAPTER XXXIII. Discharge of Negotiable Instruments. SECTION 190. INSTRUMENT; HOW DISCHARGED. [200]. A negotiable instrument is discharged: 1. By payment in due course by or on behalf of the principal debtor; 2. By payment in due course by the party accommo- dated, where the instrument is made or accepted for accom- modation; 3. By the intentional cancellation thereof by the holder; 4. By any other act which will discharge a simple con- tract for the payment of money. 5. When the principal debtor becomes the holder of the instrument at or after maturity in his own right. SECTION 191. WHEN PERSONS SECONDARILY LIABLE ON, DISCHARGED. [20 1. J A person secondarily liable on the instrument is discharged: 1. By any act which discharges the instrument; 2. By the intentional cancellation of his signature by the holder; 3. By the discharge of a prior party; 4. By a valid tender of payment made by a prior party; 5. By a release of the principal debtor, unless the holder's right of recourse against the party secondarily liable is expressly reserved; 6. By any agreement binding upon the holder to extend the time of payment or to postpone the holder's right to en- 524 DISCHARGE OF NEGOTIABLE INSTRUMENTS. [CHAP. 33, force the instrument, unless the right of recourse against such party is expressly reserved. SECTION 192. RIGHT OF PARTY WHO DISCHARGES INSTRUMENT. [202. J Where the instrument is paid by a party second- arily liable thereon, it is not discharged; but the party so pay- ing it is remitted to his former rights as regards all prior par- ties, and he may strike out his own and all subsequent indorse- ments, and again negotiate the instrument, except: 1. Where it is payable to the order of a third person, and has been paid by the drawer; and 2. Where it was made or accepted for accommodation, and has been paid by the party accommodated. SECTION 193. RENUNCIATION BY HOLDER. [203.] The holder may expressly renounce his rights against any party to the instrument, before, at or after its ma- turity. An absolute an unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument, discharges the instrument. But a renun- ciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon. SECTION 194. CANCELLATION; UNINTENTIONAL; BURDEN OF PROOF. [204. J A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where an instrument or any signature thereon appears to have been cancelled, the burden of proof lies on the party who SEC. 195. ] DISCHARGE OF NEGOTIABLE INSTRUMENTS. 525 alleges that the cancellation was made unintentionally, or un- der a mistake, or without authority. SECTION 195. ALTERATION OF INSTRUMENT; EFFECT OF. I" 205. ] Where a negotiable instrument is materially al- tered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, au- thorized or assented to the alteration and subsequent indor- sers. But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof according to its original tenor. SECTION 196. WHAT CONSTITUTES A MATERIAL ALTERATION. [206. J Any alteration which changes: I. The date; 2 3 4 5 made The sum payable, either for principal or interest; The time or place of payment; The number or the relations of the parties; The medium or currency in which payment is to be Or which adds a place of payment where no place of pay- ment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material al- teration. CHAPTER XXXIV. Bills of Exchange; Form and Interpretation. SECTION 197. BILL OF EXCHANGE DEFINED. [210.] A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed determinable future time a sum certain in money to order or to bearer. SECTION 198. BILL NOT AN ASSIGNMENT OF FUNDS IN HANDS OF DRAWEE. [211.] A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the pay- ment thereof, and the drawee is not liable on the bill unless and until he accepts the same. SECTION 199. BILL ADDRESSED TO MORE THAN ONE DRAWEE. [2 1 2. J A bill may be addressed to two or more drawees jointly, whether they are partners or not; but not to two or more drawees in the alternative or in succession. SECTION 200. INLAND AND FOREIGN BILLS OF EXCHANGE.i [213.] An inland bill of exchange is a bill which is, or ' See English Bills of Exchange Act, Sec. 4; Commercial Bk. V. Varnum, 49 N. Y., 269. SEC. 20I.] BILLS OF EXCHANGE. 527 on its face purports to be, both drawn and payable within this state. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill. SECTION 201. WHEN BILL MAY BE TREATED AS PROMISSORY NOTE.i [2 1 4. J Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat the in- strument, at his option, either as a bill of exchange or a prom- issory note. SECTION 202. DRAWEE IN CASE OF NEED." [2 1 5. J The drawer of a bill and any indorser may insert thereon the name of a person to whom the holder may resort in case of need, that is to say, in case the bill is dishonored by non-acceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit. 'See English Bills of Exchange Act, Sec. 5 (2); Miller v. Thompson, 3 M. & Or., 576; Smith v. Bellamy, 2 Stark., 223^ Daniel, Sec. 131. ^ See English Bills of Exchange Act, Sec. 15. CHAPTER XXXV. Acceptance of Bills of Exchange. SECTION 203. ACCEPTANCE; HOW MADE, ET CETERA. [220, J The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The ac- ceptance must be in writing and signed by the drawer. It must not express that the drawee will perform his promise by any other means than the payment of money. SECTION 204. HOLDER ENTITLED TO ACCEPTANCE ON FACE OF BILL. [22 1. J The holder of a bill presenting the same for ac- ceptance may require that the acceptance be written on the bill and if such request is refused, may treat the bill as dis- honored. SECTION 205. ACCEPTANCE BY SEPARATE INSTRUMENT. [222. J Where an acceptance is written on a paper other than the bill itself, it does not bind the acceptor except in favor of a person to whom it is shown and who, on the faith thereof, receives the bill for value. SECTION 206. PROMISE TO ACCEPT; WHEN EQUIVALENT TO ACCEPTANCE [223.] An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor SEC. 207. J ACCEPTANCE OF BILLS OF EXCHANGE. 529. of every person who, upon the faith thereof, receives the bill for value. SECTION 207. TIME ALLOWED DRAWEE TO ACCEPT. [224. ] The drawee is allowed twenty-four hours after presentment in which to decide whether or not he will accept the bill; but the acceptance if given dates as of the day of presentation. SECTION 208. LIABILITY OF DRAWEE RETAINING OR DESTROYING BILL.' [22 5. J Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or non-accepted to the holder, he will be deemed to have accepted the same. SECTION 209. ACCEPTANCE OF INCOMPLETE BILL.^ [226. j A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has been dishonored by a previous refusal to accept, or by non-payment. But when a bill payable after sight is dishonored by non-acceptance and the drawee subse- quently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment. 'Mattesonv. Moulton, ii Hun., 268; Gates v. Erie, 4Hun., 96. 'See English Bills of Exchange Act, Sec. 18. 530 ACCEPTANCE OF BILLS OF EXCHANGE. [CHAP. 35, SECTION 210. KINDS OF ACCEPTANCES.' [227. j An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect of the bill as drawn. SECTION 211. WHAT CONSTITUTES A GENERAL ACCEPTANCE. - [228. ] An acceptance to pay at a particular place is a general acceptance unless it expressly states that the bill is to be paid there only and not elsewhere. SECTION 212. QUALIFIED ACCEPTANCE. [229.] An acceptance is qualified, which is: 1. Conditional, that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated; 2. Partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn; 3. Local, that is to say, an acceptance to pay part only at a particular place; 4. Qualified as to time; 5. The acceptance of some one or more of the drawees, but not of all. SECTION 213. RIGHTS OF PARTIES AS TO QUALIFIED ACCEPTANCE. [230, J The holder may refuse to take a qualified accept- ance, and if he does not obtain an unqualified acceptance, he ' See English Bills of Exchange Act, Sec. 19. ^ See English Bills of Exchange Act, Sec. 19 (2 c). SEC. 213.] ACCEPTANCE OF BILLS OF EXCHANGE. S3I may treat the bill as dishonored by non-acceptance. Where a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill, unless they have expressly or impliedly authorized the holder to take a qualified accept- ance, or subsequently assent thereto. When the drawer or indorser receives notice of a qualified acceptance, he must within a reasonable time express his dissent to the holder, or he will be deemed to have assented thereto. CHAPTER XXXVI. Presentment of Bills of Exchange for Acceptance. SECTION 214. WHEN PRESENTMENT FOR ACCEPTANCE MUST BE MADE [240. J Presentment for acceptance must be made: 1. Where the bill is payable after sight, or in any other case where presentment for acceptance is necessary in order to fix the maturity of the instrument; or 2. Where the bill expressly stipulates that it shall be presented for acceptance; or 3. Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee. In no other case is presentment for acceptance necessary in order to render any party to the bill liable. SECTION 215. WHEN FAILURE TO PRESENT RELEASES DRAWER AND INDORSER. [241. J Except as herein otherwise provided, the holder of a bill which is required by the next preceding section to be presented for acceptance must either present it for acceptance or negotiate it within a reasonable time. If he fails to do so, the drawer and also indorsers are discharged. SECTION 216. PRESENTMENT; HOW MADE. [242. ] Presentment for acceptance must be made by or on behalf of the holder at a reasonable hour, on a business SEC. 217. J PRESENTMENT OF BILLS OF EXCHANGE, 533 day, and before the bill is overdue, to the drawee or some person authorized to accept or refuse acceptance on his be- half; and 1. Where a bill is addressed to two or more drawees who are not partners, presentment must be made to them all, unless one has authority to accept or refuse acceptance for all, in which case presentment may be made to him only; 2. Where the drawee is dead, presentment may be made to his personal representative; 3. Where the drawee has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, presentment may be made to him or to his trustee or assignee. SECTION 217. ON WHAT DAYS PRESENTMENT MAY BE MADE. [243. J A bill may be presented for acceptance on any day on which negotiable instruments may be presented for payment under the provisions of sections seventy-two and eighty-five of this act. When Saturday is not otherwise a holiday, presentment for acceptance may be made before twelve o'clock noon on that day. SECTION 218. PRESENTMENT WHERE TIME IS INSUFFICIENT. [244. ] Where the holder of a bill drawn payable else- where than at the place of business or the residence of the drawee has not time, with the exercise of reasonable diligence,, to present the bill for acceptance before presenting it for pay- ment on the day that it falls due, the delay caused by pre- senting the bill for acceptance before presenting it for payment is excused and does not discharge the drawers and indorsers. SECTION 219. WHERE PRESENTMENT IS EXCUSED. [245. J Presentment for acceptance is excused and a bill 534 PRESENTMENT OF BILLS OF EXCHANGE. [CHAP. 36, may be treated as dishonored by non-acceptance in either of the following cases: 1. Where the drawee is dead, or has absconded, or is a fictitious person, or a person not having capacity to contract by bill; 2. Where, after the exercise of reasonable diligence, presentment cannot be made; 3. Where, although presentment has been irregular, ac- ceptance has been refused on some other ground. SECTION 220. WHEN DISONORED BY NON-ACCEPTANCE. [246. J A bill is dishonored by non-acceptance: 1. When it is duly presented for acceptance, and such an acceptance as is prescribed by this act is refused or cannot be obtained; or 2. When presentment for acceptance is excused and the bill is not accepted. SECTION 221. DUTY OF HOLDER WHERE BILL NOT ACCEPTED. [247. J Where a bill is duly presented for acceptance and is not accepted within the prescribed time, the person presenting it must treat the bill as dishonored by non-accept- ance or he loses the right of recourse against the drawer and indorsers. SECTION 222. RIGHTS OF HOLDER WHERE BILL NOT ACCEPTED. [248. J When a bill is dishonored by non-acceptance, an immediate right of recourse against the drawers and indorsers accrues to the holder and no presentment for payment is nec- essary. CHAPTER XXXVII. Protest of Bills of Exchange. SECTION 223. IN WHAT CASES PROTEST NECESSARY. [260. j Where a foreign bill appearing on its face to be such is dishonored by non-acceptance, it must be duly pro- tested for non-acceptance, and where such a bill which has not previously been dishonored by non-acceptance is dis- honored by non-payment, it must be duly protested for non- payment, if it is not so protested, the drawers and indorsers are discharged. Where a bill does not appear on its face to be a foreign bill, protest thereof in case of hishonor is un- necessary. SECTION 224 PROTEST; HOW MADE. [261. J The protest must be annexed to the bill, or must contain a copy thereof, and must be under the hand and seal •f the notary making it, and must specify: 1. The time and place of presentment; 2. The fact that presentment was made and the manner thereof; 3. The cause or reason for protesting the bill; 4. The demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found. SECTION 225. PROTEST; BY WHOM MADE. [262. j Protest may be made by: I. A notary public; or 536 PROTEST OF BILLS OF EXCHANGE. [CHAP. 37, 2. By any respectable resident of the place where the bill is dishonored, in the presence of two or more credible witnesses. SECTION 226. PROTEST; WHEN TO BE MADE. [263. J When a bill is protested, such protest must be made on the day of its dishonor, unless delay is excused as herein provided. When a bill has been duly noted, the pro- test may be subsequently extended as of the date of the noting. SECTION 227. PROTEST; WHERE MADE. [264. J A bill must be protested at the place where it is dishonored, except that when a bill drawn payable at the place of business or residence of some person other than the drawee, has been dishonored by non-acceptance, it must be protested for non-payment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary. SECTION 228. PROTEST BOTH FOR NON-ACCEPTANCE AND NON- PAYMENT. [265. J A bill which has been protested for non-accept- ance may be subsequently protested for non-payment. SECTION 229. PROTEST BEFORE MATURITY WHERE ACCEPTOR INSOLVENT. [266. ] Where the acceptor has been adjudged a bank- rupt or an insolvent or has made an assignment for the benefit SEC. 230. J PROTEST OF BILLS OF EXCHANGE. 537 of creditors, before the bill matures, the holder may cause the bill to be protested for better security against the drawer and indorsers. SECTION 230. WHEN PROTEST DISPENSED WITH.' [267.] Protest is dispensed with by any circumstances which would dispense with notice of dishonor. Delay in not- ing or protesting is excused when delay is caused by circum- stances beyond the control of the holder and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence. SECTION 231. PROTEST WHERE BILL IS LOST, ETC [268. J Where a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof. ' This is taken from the English Bills of Exchange Act, sec. 51, subd. 9; Morgan v. Bank, etc., 4 Bush, (Ky.), 82; Daniel on Neg. Inst., sec. 730. 2 This is quoted directly from the English Bills of Exchange Act, sec. 51, subd. 8. CHAPTER XXXVIII. Acceptance of Bills of Exchange for Honor. SECTION 232. WHEN BILLS MAY BE ACCEPTED FOR HONOR. [280. ] Where a bill of exchange has been protested for dishonor by non-acceptance or protested for better security and is not overdue, any person not being a party already liable thereon, may, with the consent of the holder, inter- vene and accept the bill supra protest for the honor of any party liable thereon or for the honor of the person whose ac- count the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn; and where there has been an acceptance for honor for one party, there may be a further acceptance by a different person for the honor of another party. SECTION 233. ACCEPTANCE FOR HONOR; HOW MADE. [281. j An acceptance for honor supra protest must be be in writing and indicate that it is an acceptance for honor, and must be signed by the acceptor for honor. SECTION 284 WHEN DEEMED TO BE AN ACCEPTANCE FOR HONOR OF THE DRAWER. [282. J When an acceptance for honor does not ex- pressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer. SEC. 235.] ACCEPTANCE OF BILLS OF EXCHANGE. 539 SECTION 235. LIABILITY OF ACCEPTOR FOR HONOR. [283. J The acceptor for honor is Hable to the holder and all parties to the bill subsequent to the party for whose honor he has accepted. SECTION 236. AGREEMENT OF ACCEPTOR FOR HONOR. [284. J The acceptor for honor by such acceptance en- gages that he will on due presentment pay the bHl according to the terms of his acceptance, provided it shall not have been paid by the drawee, and provided also that it shall have been duly presented for payment and protested for non-payment and notice of dishonor given to him. SECTION 237. MATURITY OF BILL PAYABLE AFTER SIGHT; ACCEPTED FOR HONOR. [285.] Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non-acceptance and not from the date of the acceptance for honor. SECTION 238. PROTEST OF BILL ACCEPTED FOR HONOR, ET CETERA. [286.] Where a dishonored bill has been accepted for honor snpra protest or contains a reference in case of need, it must be protested for non-payment before it is presented for payment to the acceptor for honor or referee in case of need. 540 ACCEPTANCE OF BILLS OF EXCHANGE. [CHAP. 38, SECTION 239. PRESENTMENT FOR PAYMENT TO ACCEPTOR FOR HONOR; HOW MADE. [287. J Presentment for payment to the acceptor for honor must be made as follows: 1. If it is to be presented in the place where the protest for non-payment was made, it must be presented not later than the day following its maturity. 2. If it is to be presented in some other place than the place where it was protested, then it must be forwarded within the time specified in section one hundred and four. ' SECTION 240. WHEN DELAY IN MAKING PRESENTMENT IS EXCUSED. [288. J The provisions of section eighty-one apply where there is delay in making presentment to the acceptor for honor or referee in case of need.^ SECTION 241. DISHONOR OF BILL BY ACCEPTOR FOR HONOR. [289.] When the bill is dishonored by the acceptor for honor it must be protested for non-payment by him. 'So in original. There is no section 104, probably means sec. 175- ^ So in original. Probably means sec. 141. CHAPTER XXXIX. Payment of Bills of Exchange for Honor. SECTION 242. WHO MAY MAKE PAYMENT FOR HONOR. [300. J Where a bill has been protested for non-payment any person may intervene and pay it supra protest for the honor of any person liable thereon or for the honor of the person for whose account it was drawn. SECTION 243. PAYMENT FOR HONOR; HOW MADE. [301.] The payment for honor supra protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honor, which may be appended to the protest or form an extension to it. SECTION 244. DECLARATION BEFORE PAYMENT FOR HONOR. [302.] The notarial act of honor must be founded on a declaration made by the payer for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays. SECTION 245. PREFERENCE OF PARTIES OFFERING TO PAY FOR HONOR. [303. J Where two or more persons oiler to pay a bill for the honor of different parties, the person whose payment will 542 PAYMENT OF BILLS OF EXCHANGE. [CHAP. 39, discharge most parties to the bill is to be given the prefer- ence. SECTION 246. EFFECT ON SUBSEQUENT PARTIES WHERE BILL IS PAID FOR HONOR. [304. J Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are dis- charged, but the payer for honor is subrogated for, and suc- ceeds to, both the rights and duties of the holder as regards the party for whose honor he pays and all parties liable to the latter. SECTION 247. WHERE HOLDER REFUSES TO RECEIVE PAYMENT SUPRA PROTEST. [305. J Where the holder of a bill refuses to receive pay- ment supra protest, he loses his right of recourse against any party who would have been discharged by such payment. SECTION 248. RIGHTS OF PAYER FOR HONOR. [306.] The payer for honor on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the protest. CHAPTER XL. Bills in a Set. SECTION 249. BILLS IN SETS CONSTITUTE ONE BILL. [3 1 O.J Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitute one bill. SECTION 250. RIGHTS OF HOLDERS WHERE DIFFERENT PARTS ARE NEGOTIATED. [311.] Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is as between such holders the true owner of the bill. But nothing in this section affects the rights of a person who in due course accepts or pays the part first presented to him. SECTION 251. LIABILITY OF HOLDER WHO INDORSES TWO OR MORE PARTS OF A SET TO DIFFERENT PERSONS. [312. J Where the holder of a set indorses two or more parts to different persons he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills. 544 BILLS IN A SET. [CHAP. 40, SECTION 252. ACCEPTANCE OF BILLS DRAWN IN SETS. [313. J The acceptance may be written on any part and it must be written on one part only. If the drawee accepts more than one part, and such accepted parts are negotiated to different holders in due course, he is liable on every such part as if it were a separate bill. SECTION 253. PAYMENT BY ACCEPTOR OF BILLS DRAWN IN SETS. [314. J When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be de- livered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon. SECTION 254. EFFECT OF DISCHARGING ONE OF A SET. [315. J Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or otherwise the whole bill is discharged. CHAPTER XLI. Promissory Notes and Checks. SECTION 255. PROMISSORY NOTE DEFINED. [320. J A negotiable promissory note within the mean- ing of this act is an unconditional promise in writing made by one person to another signed by the maker engaging to pay on demand or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker's own order, it is not complete until in- dorsed by him. SECTION 256. CHtCK UHFINED. [321.] A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange pay- able on demand apply to a check. SECTION 257. WITHIN WHAT TIME A CHECK MUST BE PRESENTED. [322. J A check must be presented for payment within a reasonable time after its issue or the drawer will be dis- charged from liability thereon to the extent of the loss caused by the delay.' 'See Culver V. Marks, 122 Ind., 554; 22 N. E. Rep., 1086. 546 PROMISSORY NOTES AND CHECKS. [CHAP. 4I, SECTION 258. CERTIFICATION OF CHECK; EFFECT OF. [323. ] Where a check is certified by the bank on which it is drawn the certificate is equivalent to an acceptance. SECTION 259. EFFECT WHERE THE HOLDER OF CHECK PROCURES IT TO BE CERTIFIED. [324. J Where the holder of a check procures it to be accepted or certified the drawer and all indorsers are dis- charged from liability thereon, i SECTION 260. WHEN CHECK OPERATES AS AN ASSIGNMENT. [325. J A check of itself does not operate as an assign- ment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check. 'Minot V. Russ, 156 Mass., 458. CHAPTER XLII. Notes Given for a Patent Rights and for a Speculative Consideration. SECTION 261. NEGOTIABLE INSTRUMENT GIVEN FOR PATENT RIGHTS. [330.] A promissory note or other negotiable instru- ment, the consideration of which consists wholly or partly of the right to make, use or sell any invention claimed or repre- sented by the vendor at the time of sale to be patented, must contain the words "given for a patent right" prominently and legibly written or printed on the face of such note or instru- ment above the signature thereto; and such note or instru- ment in the hands of any purchaser or holder is subject to the same defenses as in the hands of the original holder; but this section does not apply to a negotiable instrument given solely for the purchase price or the use of a patented article. SECTION 262. NEOTIABLE INSTRUMENT FOR A SPEOULATIVE CONSID- ERATION. [331. j If the consideration of a promissory note or other negotiable instrument consists in whole or in part of the purchase-price of any farm product, at a price greater by at least four times than the fair market value of the same pro- duct at the time, in the locality, or of the membership and rights in an association, company or combination to produce or sell any farm product at a fictitious rate, or of a contract or bond to purchase or sell any farm product at a price greater by four times than the market value of the same product at 548 NOTES GIVEN FOR A PATENT RIGHTS. [CHAP. 42, the time in the locality, the words, "given for a speculative consideration," or other words clearly showing the nature of the consideration, must be prominently and legibly written or printed on the face of such note or instrument above the sig- nature thereof; and such note or instrument, in the hands of any purchaser or holder, is subject to the same defenses as in the hands of the original owner or holder. SECTION 263. HOW NEGOTIABLE BONDS ARE MADE NON-NEGOTIABLE. [332. J The owner or holder of any corporate or muni- cipal bond or obligation (except such as are designated to cir- culate as money, payable to bearer), heretofore or hereafter issued in and payable in this State, but not registered in pur- suance of any State law, may make such bond or obligation, or the interest coupon accompanying the same, non-negotia- ble, by subscribing his name to a statement indorsed thereon, that such bond, obligation or coupon is his property; and thereon the principal sum therein mentioned is payable only to such owner or holder, or his legal representatives or assigns, unless such bond, obligation or coupon be transferred by in- dorsement in blank, or payable to bearer, or to order, with the addition of the assignor's place of residence. CHAPTER XLIII. Laws Repealed; When to Take Effect. SECTION 264. LAW REPEALED. [340. J The laws or parts thereof specified in the sched- ule hereto annexed are hereby repealed. SECTION 265. WHEN TO TAKE EFFECT. [341. J This chapter shall take effect on the first day of October, eighteen hundred and ninety-seven. ENGLISH BILLS OF EXCHANGE ACT, 1882. (45 AND 46 Vict., Ch. 61, Aug. 18, 1882.) An Act to Codify the Law Relating to Bills of Exchange, Cheques, and Promissory Notes. CHAPTER XLIV. Preliminary. SECTION 266. SHORT TITLE. [i.J This act may be cited as the Bills of Exchange Act, 1882. SECTION 267. INTERPRETATION OF TERMS. [2.] In this act, unless the context otherwise requires: — "Acceptance" means an acceptance completed by deliv- ery or notification. " Action" includes counter-claim and set-off. " Banker" includes a body of persons, whether incorpor- ated or not, who carry on the business of banking. "Bankrupt" includes any person whose estate is vested in a trustee or assignee, under the law for the time being in force relating to bankruptcy. "Bearer" means the person in possession of a bill or note which is payable to bearer. "Bill" means bill of exchange, and "note" means promissory note. " Delivery" means transfer of possession, actual or con- structive, from one person to another. SEC. 267. J PRELIMINARY. 55 1 " Holder" means the payee or endorsee of a bill or note who is in possession of it, or the bearer thereof. "Indorsement" means an indorsement completed by delivery. ' ' Issue " means the first delivery of a bill or note, com- pleted in form, to a person who takes it as a holder. "Person" includes a body of persons, whether incorpor- ated or not. "Value" means valuable consideration. "Written" includes printed, and "writing" includes print. CHAPTER XLV. Bills of Exchange — Form and Interpretation. SECTION 268. BILL OF EXCHANGE DEFINED. [3. J I. A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer. 2. An instrument which does not comply with these conditions, or which orders any act to be done in addition to the payment of money, is not a bill of exchange. 3 An order to pay out of a particular fund is not un- conditional within the meaning of this section; but an unqual- ified order to pay, coupled with {a) an indication of a partic- ular fund out of which the drawee is to re-imburse himself or a particular account to be debited with the amount, or (d) a statement of the transaction which gives rise to the bill, is unconditional. 4. A bill is not invalid by reason — (a) That it is not dated; {d) That it does not specify the value given, or that any value has been given therefor; (c) That it does not specify the place where it is drawn or the place where it is payable. SECTION 269. INLAND AND FOREIGN BILLS. [4.J I. An inland bill is a bill which is, or on the face of it purports to be — (a) both drawn and payable within the SEC. 270.] FORM AND INTERPRETATION. 553 British Islands, or ((5) drawn within the British Islands upon some person resident therein. Any other bill is a foreign bill. For the purposes of this act ' ' British Islands " mean any part of the United Kingdom of Great Britain and Ireland, the Islands of Man, Guernsey, Jersey, Alderey, and Sark, and the islands adjacent to any of them being part of the dominions of Her Majesty. 2. Unless the contrary appear on the face of the bill the holder may treat it as an inland bill. SECTION 270. EFFECT WHERE DIFFERENT PARTIES TO BILL ARE THE SAME PERSON. [5- J I. A bill may be drawn payable to, or to the order of, the drawer; or it may be drawn payable to, or to the order of, the drawee. 2. Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note. SECTION 271. ADDRESS TO DRAWEE. [6.] I. The drawee must be named or otherwise indi- cated in a bill with reasonable certainty. 2. A bill may be addressed to two or more drawees whether they are partners or not, but an order addressed to two drawees in the alternative, or two or more drawees in succession, is not a bill of exchange. SECTION 272. CERTAINTY REQUIRED AS TO PAYEE. [7. J I. Where a bill is not payable to bearer, the 554 FORM AND INTERPRETATION. [CHAP. 45, payee must be named or otherwise indicated therein with reasonable certainty. 2. A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an office for the time being. 3. Where the payee is a fictitious or non-existing per- son, the bill may be treated as payable to bearer. SECTION 273. WHAT BILLS ARE NEGOTIABLE. [8.] I. When a bill contains words prohibiting trans- fer, or indicating an intention that it should not be transfer- able, it is valid as between the parties thereto, but is not negotiable. 2. A negotiable bill may be payable either to order or to bearer. 3. A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an in- dorsement in blank. 4. A bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or in- dicating an intention that it should not be transferable. 5. Where a bill, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option. SECTION 274. SUMS PAYABLE. [9.] I. The sum payable by a bill is a sum certain within the meaning of this act, although it is required to be paid — (a) With interest. {i>) By stated installments. SEC. 275. J FORM AND INTERPRETATION. 555 (c) By Stated installments, with a provision that upon default in payment of any installment the whole shall become due. {d) According to an indicated rate of exchange, or according to a rate of exchange to be ascer- tained as directed by the bill. 2. Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable. 3. Where a bill is expressed to be payable with inter- est, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated from the issue thereof. SECTION 275. BILL PAYABLE ON DEMAND. [lo.J I. A bill is payable on demand — («) Which is expressed to be payable on demand, or at sight, or on presentation; or {b) In which no time for payment is expressed. 2. Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand. SECTION 276. BILL PAYABLE AT A FUTURE TIME. [II.] A bill is payable at a determinable future time within the meaning of this act which is expressed to be payable — 1. At a fixed period after date or sight. 2. On or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening may be uncertain. An instrument expressed to be payable on a contingency is not a bill, and the happening of the event does not cure the defect. 556 FORM AND INTERPRETATION. [CHAP. 45, SECTION 277. OMISSION OF DATE IN BILL PAYABLE AFTER DATE. [i2.j Where a bill expressed to be payable at a fixed period after date is issued undated, or where the acceptance of a bill payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly. Provided that ( i ) where the holder in good faith and by mistake inserts a wrong date, and (2) in every case where a wrong date is inserted, if the bill subsequently comes into the hands of a holder in due course, the bill shall not be avoided thereby, but shall operate and be payable as if the date so in- serted had been the true date. SECTION 27.S. ANTE-DATING AND POST-DATING. [13. j I. Where a bill or an acceptance or any in- dorsement on a bill is dated, the date shall, unless the con- trary be proved, be deemed to be the true date of the draw- ing, acceptance or indorsement, as the case may be. 2. A bill is not invalid by reason only that it is ante- dated or post-dated, or that it bears date on a Sunday. SECTION 279. COMPUTATION OF TIME OF PAYMENT. [14.] Where a bill is not payable on demand, the day on which it falls due is determined as follows: I. Three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace: Provided that — SEC. 280.] FORM AND INTERPRETATION. 557 («) When the last day of grace falls on Sunday, Christmas Day, Good Friday, or a day ap- pointed by Royal proclamation as a public fast or thanksgiving day, the bill is, except in the case hereinafter provided for, due and pay- able on the preceding business day; {b) When the last day of grace is a bank holiday (other than Christmas day or Good Friday) under the Bank Holidays Act, 1871,' and acts amending or extending it, or when the last day of grace is a Sunday and the second day of grace is a bank holiday, the bill is due and payable on the succeeding business day. 2. Where a bill is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment. 3. Where a bill is payable at a fixed period after sight, the time begins to run from the date of the acceptance if the bill be accepted, and from the date of noting or protest if the bill be noted or protested for non-acceptance or for non- delivery. 4. The term "month" in a bill mean calendar month. SECTION 280. CASE OF NEED. [15. J The drawer of a bill and any indorser may insert therein the name of a person to whom *-he "^older may resort in case of need, that is to say, in case the bill is dishonored by non-acceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may think fit. '34 and 35 Vict, Ch. 17. 558 FORM AND INTERPRETATION. [CHAP. 45, SECTION 281. OPTIONAL STIPULATIONS BY DRAWER OR INDORSER. [1 6. J The drawer of a bill, and any indorser, may in- sert therein an express stipulation: — 1. Negativing or limiting his own liability to the holder; 2. Waiving as regards himself some or all of the hold- er's d'lties. SECTION 282. DEFINITION AND REQUISITES OF ACCEPTANCE. [17.] I. The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. 2. An acceptance is invalid unless it complies with the following conditions, namely: («) It must be written on the bill and be signed by the drawee. The mere signature of the drawee without additional words is sufficient. {b) It must not express that the drawee will perform his promise by any other means than the pay- ment of money. SECTION 283. TIME FOR ACCEPTANCE. [18.] A bill may be accepted: — 1. Before it has been signed by the drawer, or while otherwise incomplete; 2. When it is overdue, or after it has been dishon- ored by a previous refusal to accept, or by non-payment; 3. When a bill payable after sight is dishonored by non-acceptance, and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of first presentment to the drawee for acceptance. 559 FORM AND INTERPRETATION. [CHAP. 45, SECTION 284. GENERAL AND QUALIFIED ACCEPTANCES. [19.] I. An acceptance is either {a) general or (l>\ qualified. 2. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect of the bill as drawn. In particular an acceptance is qualified which is: — («) Conditional, that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated; (d) Partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn; (c) Local, that is to say, an acceptance to pay only at a particular specified place; An acceptance to pay at a particular place is a general acceptance, utjless it expressly states that the bill is to be paid there only and not elsewhere; (d) Qualified as to time; (e) The acceptance of some one or more of the drawees, but not of all. SECTION 285. INCHOATE INSTRUMENTS. [20.] I. Where a simple signature on a blank stamped paper is delivered by the signer in order that it may be con- verted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an indorser; and, in like manner, when a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he thinks fit. 2. In order that any such instrument when completed may be enforceable against any person who became a party 560 FORM AND INTERPRETATION. [CHAP. 45, thereto prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given. Reasonable time for this purpose is a question of fact. Provided that if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given. SKCTION 280. DELIVERY. [2 I.J I. Every contract on a bill, whether it be the drawer's, the acceptor's, or an indorser's is incomplete and re- vocable, until delivery of the instrument in order to give effect thereto. Provided that where an acceptance is written on a bill, and the drawee gives notice to or according to the directions of the person entitled to the bill that he has accepted it, the acceptance then becomes complete and irrevocable. 2. As between immediate parties, and as regards a re- mote party other than a holder in due course, the delivery: — {a) In order to be effectual must be made either by or under the authority of the party drawing, accepting, or indorsing, as the case may be; {b) May be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the bill. But if the bill be in the hands of a holder in due course a valid delivery of the bill by all parties prior to him so as to make them liable to him is conclusively presumed. 3. Where a bill is no longer in the possession of a party who has signed it as drawer, acceptor, or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved. CHAPTER XLVI. Capacity and Authority of Parties. SECTION 287. CAPACITY OF PARTIES. [22.] I. Capacity to incur liability as a party to a bill is co-extensive with capacity to contract. Provided that nothing in this section shall enable a cor- poration to make itselt liable as drawer, acceptor, or indorser of a bill unless it is competent to it so to do under the law for the time being in force relating to corporations. 2. Where a bill is drawn or indorsed by an infant, minor, or corporation having no capacity or power to incur liability on a bill, the drawing or indorsement entitles the holder to receive payment of the bill, and to enforce it against any other party thereto. SECTION 288. SIGNATURE ESSENTIAL TO LIABILITY. [23.] No person is liable as drawer, indorser, or accep- tor of a bill who has not signed it as such: Provided that — 1. Where a person signs a bill in a trade or assumed name, he is hable thereon as if he had signed it in his own name; 2. The signature of the name of a firm is equivalent to the signature by the person so signing of the names of all per- sons liable as partners in that firm. SECTION 289. FORGED OR UNAUTHORIZED SIGNATURE. [24. ] Subject to the provisions of this Act, where a sig- 562 CAPACITY AND AUTHORITY OF PARTIES. [CHAP. 46, nature on a bill is forged or placed thereon without the au- thority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be ac- quired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of au- thority. Provided that nothing in this section shall effect the rati- fication of an unauthorized signature not amounting to a for- gery. SECTION 290. PROCURATION SIGNATURES. [2 5. J A signature by procuration operates as notice that the agent has but a limited authority to sign, and the prin- cipal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority. SECTION 291. PERSONS SIGNING AS AGENT OR IN REPRESENTATIVE CAPACITY. [26.] I. Where a person signs a bill as drawer, in- dorser, or acceptor, and adds words to his signature indicating that he signs for or on behalf of a principal, or in a represen- tative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability. 2. In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is writ- ten, the construction most favorable to the validity of the in- strument shall be adopted. CH AFTER XLVII. The Consideration for a Bill. SECTION 292. VALUE AND HOLDER FOR VALUE. [27. J I. Valuable consideration for a bill may be constituted by: — (a) Any consideration sufificient to support a simple contract; (d) An antecedent debt or liability, Such a debt or liability is deemed valuable consideration whether the bill is payable on demand or at a future time. 2. Where value has at any time been given for a bill the holder is deemed to be a holder for value as regards the acceptor and all parties to the bill who became parties prior to such time. 3. Where the holder of a bill has a lien on it arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien. SECTION 293. ACCOMMODATION BILL OR PARTY. [28.] I. An accommodation party to a bill is a per- son who has signed a bill as drawer, acceptor, or indorser, without receiving value thereof, and for the purpose of lend- ing his name to some other person. 2. An accommodation party is liable on the bill to a holder for value; and it is immaterial whether, when such holder took the bill, he knew such party to be an accommo- dation party or not. ^64 THE CONSIDERATION OF A BILL. [CHAP. 47, SECTION 294. HOLDER IN DUE COURSE. [29.] I. A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions, namely: («) That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; {b) That he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it. 2. In particular the title of a person who negotiates a bill is defective within the meaning of this Act when he ob- tained the bill, or the acceptance thereof, by fraud, duress, or force and fear, or other unlawful means, or for an illegal con- sideration, or when he negotiates it in breach of faith, or un- der such circumstances as amount to a fraud. 3. A. holder (whether for value or not), who derives his title to a bill through a holder in due course, and who is not himself a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder. SECTION 295. PRESUMPTION OF VALUE AND GOOD FAITH. [30. J I. Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value. 2. Every holder of a bill \s prima facie deemed to be a holder in due course; but if in an action on a bill it is admit- ted or proved that the acceptance, issue, or subsequent nego- tiation of the bill, is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill. CHAPTER XLVIII. Negotiation of Bills. SECTION 296. NEGOTIATION OF BILL. [31. ] I. A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder of the bill. 2. A bill payable to bearer is negotiated by delivery. 3. A bill payable to order is negotiated by the indorse- ment of the holder completed by delivery. 4. Where the holder of a bill payable to his order trans- fers it for value without indorsing it, the transfer gives the transferee such title as the transferror had in the bill, and the transferee in addition acquires the right to have the indorse- ment of the transferror. 5. Where any person is under obligation to indorse a bill in a representative capacity, he may indorse the bill in such terms as to negative personal liability. SECTION -297. REQUISITES OF A VALID INDORSEMENT. [32.J An indorsement in order to operate as a negotia- tion must comply with the following conditions, namely, — I. It must be written on the bill itself and be signed by the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient. An indorsement written on an allonge, or on a "copy" of a bill issued or negotiated in a country where "copies" are recognized, is deemed to be written on the bill itself. 566 NEGOTIATION OF BILLS. [CHAP. 48, 2. It must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorsement which pur- ports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a negotiation of the bill. 3. Where a bill is payable to the order of two or more payees or indorsees who are not partners all must indorse, un- less the one indorsing has authority to indorse for the others. 4. Where, in a bill payable to order, the payee or in- dorsee is wrongly designated, or his name is misspelt, he may indorse the bill as therein described adding, if he thinks fit, his proper signature. 5. Where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved. 6. An indorsement may be made in blank or special. It may also contain terms making it restrictive. SECTION 298. CONDITIONAL INDORSEMENT. [33-] Where a bill purports to be indorsed condition- ally, the condition may be disregarded by the payer, and pay- ment to the indorsee is valid whether the condition has been fulfilled or not. SECTION 2h9. INDORSEMENT IN BLANK AND SPECIAL INDORSEMENT. [34,] I. An indorsement in blank specifies no indor- see, and a bill so indorsed becomes payable to bearer. 2. A special indorsement specifies the person to whom, or to whose order, the bill is to be payable. 3. The provisions of this Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement. SEC. 300.] NEGOTIATION OF BILLS. 567 4. When a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the in'dorser's signature a direction to pay the bill to or to the order of himself or some other person. SECTION 300. RESTRICTIVE INDORSEMENT. [35.] I. An indorsement is restrictive which prohibits the further negotiation of the bill, or which expresses that it is a mere authority to deal with the bill as thereby directed, and not a transfer of the ownership thereof, as, for example, if a bill be indorsed "Pay D. only," or "Pay D. for the ac- count of X.," or "Pay D. or order for collection." 2. A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorize him to do so. 3. Where a restrictive indorsement authorizes further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement. SECTION .301. NEGOTIATION OF OVERDUE OR DISHONORED BILL. [36. J I. Where a bill is negotiable in its origin it con- tinues to be negotiable until it has been (a) restrictively in- dorsed or (d) discharged by payment or otherwise. 2. Where an overdue bill is negotiated, it can only be negotiated subject to any defect of title affectipg it at its ma- turity, and thenceforward no person who takes it can acquire or give a better title than that which the person from whom he took it had. 3. A bill payable on demand is deemed to be overdue within the meaning and for the purposes of this section, when 568 NEGOTIATION OF BILLS. [CHAP. 48, it appears on the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact. 4. Except where an indorsement bears date after the maturity of the bill, every negotiation is prima facie deemed to have been effected before the bill was overdue. 5. Where a bill which is not overdue has been dishon- ored any person who takes it with notice of the dishonor takes it subject to any defect of title attaching thereto at the time of dishonor, but nothing in this sub-section shall affect the rights of a holder in due course. SECTION 302. NEGOTIATION OF BILL TO PARTY ALREADY LIABLE THEREON. [37 -J Where a bill is negotiated back to the drawer, or to a prior indorser, or to the acceptor, such party may, sub- ject to the provisions of this Act, re-issue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable. SECTION 303. RIGHTS OF THE HOLDER. [38. J The rights and powers of the holder of a bill are as follows: 1. He may sue on the bill in his own name: 2. Where he is a holder in due course, he holds the bill free from any defect of title of prior parties, as well as from mere personal defences available to prior parties among themselves, and may enforce payment against all parties liable on the bill: 3. Where his title is defective {a) if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and {b) if he obtains payment of the bill the person who pays him in due course gets a valid dis- charge for the bill. CHAPTER XLIX. General Duties of the Holder. SECTION 304. WHEN PRESENTMENT FOR ACCEPTANCE IS NECESSARY. 1. Where a bill is payable after sight, presentment for acceptance is necessary in order to fix the maturity of the in- strument. 2. Where a bill expressly stipulates that it shall be pre- sented for acceptance, or where a bill is drawn payable else- where than at the residence or place of business of the drawee, it must be presented for acceptance before it can be presented for payment. 3. In no other case is presentment for acceptance neces- sary in order to render liable any party to the bill. 4. Where the holder of a bill, drawn payable elsewhere than at the place of business or residence of the drawee, has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused, and does not discharge the drawer and indorsers. SECTION 305. TIME FOR PRESENTING BILL PAYABLE AFTER SIGHT. [40.] I. Subject to the provisions of this Act, when a bill payable after sight is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time. 2. If he do not do so, the drawer and all indorsers prior to that holder are discharged. 570 GENERAL DUTIES OF THE HOLDER. [CHAP. 49, 3. In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the bill, the usage of trade with respect to similar bills, and the facts of the particular case. SECTION 306. RULES AS TO PRESENTMENT FOR ACCEPTANCE AND EX- CUSES FOR NON-PRESENTMENT. [41. J I. A bill is duly presented for acceptance which is presented in accordance with the following rules: (a) The presentment must be made by or on behalf of the holder to the drawee, or to some person authorized to accept or refuse acceptance on his behalf, at a reasonable hour on a business day and before the bill is overdue; (d) Where a bill is addressed to two or more drawees, who are not partners, presentment must be made to them all, unless one has authority to accept for all, then presentment may be made to him only; (c) Where the drawee is dead, presentment may be made to his personal representative; (d) Where the drawee is bankrupt, presentment may be made to him or his trustee; {e) Where authorized by agreement or usage, a pre- sentment through the post-office is sufficient. 2. Presentment in accordance with these rules is ex- cused, and a bill may be treated as dishonored by non-accept- ance: (a) Where the drawee is dead or bankrupt, or is a fictitious person or a person not having capa- city to contract by bill; (d) Where, alter the exercise of reasonable diligence, such presentment cannot be effected; (c) Where, although the presentment has been irreg- ular, acceptance has been refused on some other ground. SEC. 307. J GENERAL DUTIES OF THE HOLDER. 57 1 3. The fact that the holder has reason to believe that the bill, on presentment, will be dishonored does not excuse presentment. SECTION 307. NON-ACCEPTANCE. [42.] I. When -a bill is duly presented for acceptance and is not accepted within the customary time, the person presenting; it must treat it as dishonored by non-acceptance. If he do not, the holder shall lose his right of recourse against the drawer and indorsers. SECTION 308. DISHONOR BY NON-ACCEPTANCE AND ITS CONSEQUENCES. [43. J I. A bill is dishonored by non-acceptance: (a) When it is duly presented for acceptance, and such an acceptance as is prescribed by this act is refused or cannot be obtained; or (d) When presentment for acceptanceis excused and the bill is not accepted. 2. Subject to the provisions of this Act, when a bill is dishonored by non-acceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder, and no presentment for payment is necessary. SECTION 309. DUTIES AS TO QUALIFIED ACCEPTANCES. [44.] I. The holder of a bill may refuse to take a qualified acceptance, and if he does not obtain an unqualified acceptance may treat the bill as dishonored by non-accept- ance. 2. Where a qualified acceptance is taken, and the drawer or an indorser has not expressly or impliedly author- ized the holder to take a qualified acceptance, or does not 572 GENERAL DUTIES OF THE HOLDER. [ CHAP. 49, subsequently assent thereto, such drawer or indorser is dis- charged from his HabiHty on the bill. The provisions of this sub-section do not apply to a par- tial acceptance, whereof due notice has been given. Where a foreign bill has been accepted as to part, it must be protested as to the balance. 3. When the drawer or indorser of a bill receives notice of a qualified acceptance, and does not within a reasonable time express his dissent to the holder, he shall be deemed to have assented thereto. SECTION 310. RULES AS TO PRESENTMENT FOR PAYMENT. [45. J Subject to the provisions of this Act, a bill must be duly presented for payment. If it be not so presented the drawer and endorsers shall be discharged. A bill is duly presented for payment which is presented in accordance with the following rules: 1. Where the bill is not payable on demand, present- ment must be made on the day it falls due. 2. Where the bill is payable on demand, then, subject to the provisions of this Act, presentment must be made within a reasonable time after its issue in order to render the drawer liable, and within a reasonable time after its indorsement, in order to render the indorser liable. In determining what is a reasonable time, regard shall be had to the nature of the bill, the usage of trade with regard to similar bills, and the facts of the particular case. 3. Presentment must be made by the holder or by some person authorized to receive payment on his behalf at a rea- sonable hour on a business day, at the proper place as here- inafter defined, either to the person designated by the bill as payer, or to some person authorized to pay or refuse payment on his behalf if with the exercise of reasonable diligence such person can there be found. 4. A bill is presented at the proper place: — (a) Where a place of payment is specified in the bill and the bill is there presented; SEC. 311.] GENERAL DUTIES OF THE HOLDER. 573 {b) Where no place of payment is specified, but the address of the drawee or acceptor is given in the bill, and the bill is there presented; {c) Where no place of payment is specified and no address given, and the bill is presented at the drawee's or acceptor's place of business if known, and if not, at his ordinary residence if known; {d) In any other case if presented to the drawee or acceptor wherever he can be found, or if pre- sented at his last known place of business or residence. 5. Where a bill is presented at the proper place, and after the exercise of reasonable diligence no person authorized to pay or refuse payment can be found there, no further pre- sentment to the drawee or acceptor is required. 6. Where a bill is drawn upon, or accepted by, two or more persons who are not partners, and no place of payment is specified, presentment must be made to them all. 7. Where the drawee or acceptor of a bill is dead, and no place of payment is specified, presentment must be made to a personal representative, if such there be, and with the exercise of reasonable diligence he can be found. 8. Where authorized by agreement or usage a present- ment through the post-office is sufficient. SECTION 311. EXCUSES FOR DELAY OR NON-PRESENTMENT FOR PAYMENT. [46.] I. Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate presentment must be made with reasonable diligence. 2. Presentment for payment is dispensed with, — {a) Where, after the exercise of reasonable diligence, presentments as required by this Act, cannot be effected. Missing Page SEC. 314. J GENERAL DUTIES OF THE HOLDER. 5 75 course subsequent to the omission, shall not be prejudiced by the omission. 2. Wtiere a bill is dishonored by non-acceptance, and due notice of dishonor is given, it shall not be necessary to give notice of a subsequent dishonor by non-payment unless the bill shall in the meantime have been accepted. SECTION 314. RULES AS TO NOTICE OF DISHONOR. [49. J Notice of dishonor in order to be valid and effec- tual must be given in accordance with the following rules: — 1. The notice must be given by or on behalf of the holder, or by or on behalf of an indorser who, at the time of giving it, is himself liable on the bill. 2. Notice of dishonor may be given by an agent either in his own name, or in the name of any party entitled to give notice whether that party be his principal or not. 3. Where the notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior indorsers who have a right of recourse against the party to whom it is given. 4. Where notice is given by or on behalf of an indorser entitled to give notice as hereinbefore provided, it enures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given. 5. The notice may be given in writing or by personal communication, and may be given in any terms which suffi- ciently identify the bill, and intimate that the bill has been dishonored by non-acceptance or non-payment. 6. The return of a dishonored bill to the drawer or an indorser is, in point of form, deemed a sufficient notice of dis- honor. 7. A written notice need not be signed, and an insuffi- cient written notice may be supplemented and validated by verbal communication. A mis-description of the bill shall not vitiate the notice unless the party to whom the notice is given is in fact misled thereby. 5 76 GENERAL DUTIES OF THE HOLDER. [CHAP. 49, 8. Where notice of dishonor is required to be given to any person, it may be given either to the party himself, or to his agent in that behalf. 9. Where the drawer or indorser is dead, and the party giving notice knows it, the notice must be given to a personal representative, if such there be, and with the exercise of reas- onable diligence he can be found. 10. Where the drawer or indorser is bankrupt, notice may be given either to the party himself or to the trustee. 11. Where there are two or more drawers or indorsers who are not partners notice must be given to each of them, unless one of them has authority to receive such notice for the others. 12. The notice may be given as soon as the bill is dis- honored, and must be given within a reasonable time there- after. In the absence of special circumstances notice is not deemed to have been given within a reasonable time, unless — (a) Where the person giving and the person to receive notice reside in the same place, the notice is given or sent off in time to reach the latter on the day after the dishonor of the bill; (d) Where the person giving and the person to receive notice reside in different places, the notice is sent oft on the day after the dishonor of the bill, if there be a post at a convenient hour on that day, and if there be no such post on that day then by the next post thereafter. 13. Where a bill when dishonored is in the hands of an agent, he ma)- either himself give notice to the parties liable on the bill, or he may give notice to his principal. If he give notice to his principal, he must do so within the same time as if he were the holder, and the principal upon receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder. 14. Where a party to a bill receives due notice of dis- honor, he has after the receipt of such notice the same period of time for giving notice to antecedent parties that the holder has after the dishonor. SEC. 315.3 GENERAL DUTIES OF THH HOLEER. 577 15. Where a notice of dishonor is duly addressed and posted, the sender is deemed to have given due notice of dis- honor, notwithstanding any miscarriage by the post-office. SECTION 315. EXCUSES FOR NON-NOTICE AND DELAY. [50. J I. Delay in giving notice of dishonor is excused where the delay is caused by circumstances beyond the con- trol of the party giving notice, and not imputable to his de- fault, misconduct, or negligence. When the cause of delay ceases to operate the notice must be given with reasonable diligence. 2. Notice of dishonor is dispensed with — {a) When, after the exercise of reasonable diligence, notice as required by this act cannot be given to or does not reach the drawer or indorser sought to be charged; {d) By waiver, express or implied. Notice of dis- honor may be waived before the time of giving notice has arrived, or after the omission to give due notice; (c) As regards the drawer in the following cases, namely, ( i ) where drawer and drawee are the same person, (2) where the drawee is a ficti- tious person or a person not having capacity to contract, (3) where the drawer is the person to whom the bill is presented for payment, (4) where the drawee or acceptor is as between himself and the drawer under no obligation to accept or pay the bill, (5) where the drawer has countermanded payment; (d) As regards the indorser in the following cases, namely, (i) where the drawee is a fictitious person or a person not having capacity to con- tract and the indorser was aware of the fact at the time he indorsed the bill, (2) where the indorser is the person to whom the bill is pre- sented for payment, (3) where the bill was ac- cepted or made for his accommodation. 578 GENERAL DUTIES OF THE HOLDER. [CHAP. 49, SECTION 316. NOTING OR PROTEST OF BILL. [51. J I. Where an inland bill has been dishonored it may, if the holder think fit, be noted for non-acceptance or non-payment, as the case may be; but it shall not be neces- sary to note or protest any such bill in order to preserve the recourse against the drawer or indorser. 2. Where a foreign bill, appearing on the face of it to be such, has been dishonored by non-acceptance it must be duly protested for non-acceptance, and where such a bill, which has not been previously dishonored by non-acceptance, is dishonored by non-payment it must be duly protested for non-payment. If it be not so protested the drawer and in- dorsers are discharged. Where a bill does not appear on the face of it to be a foreign bill, protest thereof in case of dis- honor is unnecessary. 3. A bill which has been protested for non-acceptance may be subsequently protested for non-payment. 4. Subject to the provisions of this Act, when a bill is noted or protested, it must be noted on the day of its dis- honor. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting. 5. Where the acceptor of a bill becomes bankrupt or insolvent or suspends payment before it matures, the holder may cause the bill to be protested for better security against the drawer and indorsers. 6. A bill must be protested at the place where it is dis- honored: Provided that — {a) When a bill is presented through the post-office, and returned by post dishonored, it may be protested at the place to which it is returned and on the day of its return if received during business hours, and if not received during busi- ness hours, then not later than the next busi- ness day; SEC. 317.] GENERAL DUTIES OF THE HOLDER. 579 {i>) When a bill drawn payable at the place of busi- ness or residence of some person other than the drawee, has been dishonored by non- acceptance, it must be protested for non-pay- ment at the place where it is expressed to be payable, and no further presentment for pay- ment to, or demand on, the drawee is neces- sary. 7. A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify — (a) The person at whose request the bill is protested; {d) The place and date of protest, the cause or reason for protesting the bill, the demand made, and the answer given, if any, or the fact that the drawee or acceptor could not be found. 8. Where a bill is lost or destroyed, or is wrongly de- tained from the person entitled to hold it, protest may be made on a copy or written particulars thereof. 9. Protest is dispensed with by any circumstance which would dispense with notice of dishonor. Delay in noting or protesting is excused when the delay is caused by circum- stances beyond the control of the holder, and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate the bill must be noted or protested with reasonable diligence. SECTION 317. DUTIES OF HOLDER AS REGARDS DRAWEE OR ACCEPTOR. [52.] I. When a bill is accepted generally present- ment for payment is not necessary in order to render the ac- ceptor liable. 2. When by the terms of a qualified acceptance present- ment for payment is required, the acceptor, in the absence of an express stipulation to that effect, is not discharged by the omission to present the bill for payment on the day that it matures. 580 GENERAL DUTIES OF THE HOLDER. [CHAP. 49, 3. In order to render the acceptor of a bill liable it is not necessary to protest it, or that notice of dishonor should be given to him. 4. Where the holder of a bill presents it for payment, he shall exhibit the bill to the person from whom he demands payment, and when a bill is paid the holder shall forthwith deliver it up to the party paying it. CHAPTER L. Liabilities of Parties. SECTION 318. FUNDS IN HANDS OF DRAWEE. [53.] I. A bill, of itself, does not operate as an assign- ment of funds in the hands of the drawee available for the payment thereof, and the drawee of a bill who does not ac- cept as required by this Act is not liable on the instrument. This sub-section shall not extend to Scotland. 2. In Scotland, where the drawee of a bill has in his hands funds available for the payment thereof, the bill oper- ates as an assignment of the sum for which it is drawn in favor of the holder, from the time when the bill is presented to the drawee. SECTION 319. LIABILITY OF ACCEPTOR. [54.] The acceptor of a bill, by accepting it: 1. Engages that he will pay it according to the tenor of his acceptance; 2. Is precluded from denying to a holder in due course: (a) The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the bill; (6) In the case of a bill payable to drawer's order, the then capacity of the drawer to indorse, but not the genuineness or validity of his indorsement; (c) In the case of a bill payable to the order of a third person, the existence of the payee and his then, capacity to indorse, but not the genuineness or validity of his indorsement. 36 582 LIABILITIES OF PARTIES. [CHAP. 50, SECTION 320. LIABILITY OF DRAWER OR INDORSER. [55.] I. The drawer of a bill by drawing it: (a) Engages that on due presentment it shall be ac- cepted and paid according to its tenor, and that if it be dishonored he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonor be duly taken; (d) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse. 2. The indorser of a bill by indorsing it: (a) Engages that on due presentment it shall be ac- cepted and paid according to its tenor, and that if it be dishonored he will compensate the holder or a subsequent indorser who is compel- led to pay it, provided that the requisite pro- ceedings on dishonor be duly taken; (d) Is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer's signature and all pre- vious indorsements; (f) Is precluded from denying to his immediate or a subsequent indorsee that the bill was at the time of his indorsement a valid and subsisting bill, and that he had then a good title thereto. SECTION 321. STRANGER SIGNING BILL LIABLE AS INDORSER. [56. J Where a person signs a bill otherwise than as drawer or acceptor, he thereby incurs the liabilities of an in- dorser to a holder in due course. SEC. 322. J LIABILITIES OF PARTIES. 583 SECTION 322. MEASURE OF DAMAGES AGAINST PARTIES TO DISHON- ORED BILL. [57.] Where a bill is dishonored, the measure of dam- ages, which shall be deemed to be liquidated damages, shall be as follows: 1. The holder may recover from any party liable on the bill, and the drawer who has been compelled to pay the bill may recover from the acceptor, and an indorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior indorser: {a) The amount of the bill; {b) Interest thereon from the time of presentment for payment if the bill is payable on demand, and from the maturity of the bill in any other case; {c) The expenses of noting, or, when protest is neces- sary, and the protest has been extended, the expenses of protest. 2. In the case of a bill which has been dishonored abroad, in lieu of the above damages, the holder may recover from the drawer or an indorser, and the drawer or an indorser who has been compelled to pay the bill may recover from any party liable to him, the amount of the re-exchange with inter- est thereon until the time of payment. 3. Where by this Act interest may be recovered as dam- ages, such interest may, if justice require it, be withheld wholly or in part, and where a bill is expressed to be payable with interest at a given rate, interest as damages may or may not be given at the same rate as interest proper. SECTION 323. TRANSFERRER BY DELIVERY AND TRANSFERREE. [58. J I. Where the holder of a bill payable to bearer negotiates it by delivery without indorsing it, he is called a " transferrer by delivery." 584 LIABILITIES OF PARTIES. [CHAP. 50, 2. A transferrer by delivery is not liable on the instru- ment. 3. A transferrer by delivery who negotiates a bill thereby warrants to his immediate transferree being a holder for value that the bill is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless. CHAPTER LI. Discharge of Bill. SECTION 824. PAYMENT IN DUE COURSE. [59. J I. A bill is discharged by payment in due course by or on behalf of the drawee or acceptor. " Payment in due course " means payment made at or af- ter the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective. 2. Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not dis- charged; but (a) Where a bill payable to, or to the order of, a third party is paid by drawer, the drawer may enforce payment thereof against the acceptor, but may not re-issue the bill: {i>) Where a bill is paid by an indorser, or where a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or ante- cedent parties, and he may, if he thinks fit, strike out his own and subsequent indorse- ments, and again negotiate the bill. 3. Where an accommodation bill is paid in due course by the party accommodated the bill is discharged. SECTION 325. BANKER PAYING DEMAND DRAFT WHEREON INDORSE- MENT IS FORGED. [60. J Where a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays S86 DISCHARGE OF BILL. [CHAP. 5 1, the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it pur- ports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority. SECTION 326. ACCEPTOR THE HOLDER AT MATURITY. [61. j When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged. SECTION 327. EXPRESS WAIVER. [62. J I. When the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor the bill is discharged. The renunciation must be in writing, unless the bill is de- livered up to the acceptor. 2. The liabilities of any party to a bill may in like man- ner be renounced by the holder before, at, or after its matur- ity; but nothing in this section shall affect the rights of a holder in due course without notice of the renunciation. SECTION 328. CANCELLATION. [63.] I. Where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the bill is discharged. 2. In like manner any party liable on a bill may be dis- charged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would SEC. 329.] DISCHARGE OF BILL. 587 have had a right of recourse against the party whose signature is cancelled, is also discharged. 3. A cancellation made unintentionally, or under a mis- take, or without the authority of the holder, is inoperative; but where a bill or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority. SECTION 329. ALTERATION OF BILL. [64. J I. Where a bill or acceptance is materially altered without the assent of all parties liable on the bill, the bill is avoided except as against a party who has himself made, authorized, or assented to the alteration, and subse- quent indorsers. Provided that, Where a bill has been materially altered, but the altera- tion is not apparent, and the bill is in the hand of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it accord- ing to its original tenor. 2. In particular the following alterations are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment with- out the acceptor's assent. CHAPTER LII. Acceptance and Payment for Honor. SECTION 330. ACCEPTANCE FOR HONOR SUPRA PROTEST. [65.] I. Where a bill of exchange has been protested for dishonor by non-acceptance, or protested for better secur- ity, and is not overdue, any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon, or for the honor of the person for whose ac- count the bill is drawn. 2. A bill may be accepted for honor for part only of the sum for which it is drawn. 3. An acceptance for honor supra protest in order to be valid must — (a) Be written on the bill, and indicate that it is an acceptance for honor: ((5) Be signed by the acceptor for honor. 4. Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an ac- ceptance for the honor of the drawer. 5. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non-acceptance, and not from the date of the acceptance for honor. SECTION 331. LIABILITY OF ACCEPTOR FOR HONOR. [66.] I. The acceptor for honor of a bill by accepting it engages that he will, on due presentment, pay the bill ac- cording to the tenor of his acceptance, if it is not paid by the SEC. 332. J ACCEPTANCE AND PAYMENT FOR HONOR. 5^9 drawee, provided it has been duly presented for payment, and protested for non-payment, and that he receives notice of these facts. 2. The acceptor for honor is hable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted. SECTION 332. PRESENTMENT TO ACCEPTOR FOR HONOR. [67.] I. Where a dishonored bill has been accepted for honor supra protest, or contains a reference in case of need, it must be protested for non-payment before it is pre- sented for payment to the acceptor for honor, or referee in case of need. 2. Where the address of the acceptor for honor is in the same place where the bill is protested for non-payment, the bill must be presented to him not later than the day following its maturity; and where the address of the acceptor for honor is in some place other than the place where it was protested for non-payment, the bill must be forwarded not later than the day following its maturity for presentment to him. 3. Delay in presentment or non-presentment is excused by any circumstance which would excuse delay in presentment for payment or non-presentment for payment. 4. When a bill of exchange is dishonored by the accep- tor for honor it must be protested for non-payment by him. SECTION 333. PAYMENT FOR HONOR SUPRA PROTEST. [68.] I. Where a bill has been protested for non-payment, any person may intervene and pay it supra protest for the honor of any party liable thereon, or for the honor of the per- son for whose account the bill is drawn. 2. Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will dis- charge most parties to the bill shall have the preference. 5gO ACCEPTANCE AND PAYMENT FOR HONOR. [CHAP. 52, 3. Payment for honor supra protest, in order to operate as such and not as a mere voluntary payment, must be attes- ted by a notarial act of honor which may be appended to the protest or form an extension of it. 4. The notarial act of honor must be founded on a dec- laration made by the payer for honor, or his agent in that be- half, declaring his intention to pay the bill for honor, and for whose honor he pays. 5. Where a bill has been paid for honor, all parties sub- sequent to the party for whose honor it is paid are discharged, but the payer for honor is subrogated for, and succeeds to borh the rights and duties of, the holder as regards the party for whose honor he pays, and all parties liable to that party. 6. The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the pro- test. If the holder do not on demand deliver them' up, he shall be liable to the payer for honor in damages. 7. Where the holder of a bill refuses to receive payment supra protest he shall lose his right of recourse against any party who would have been discharged by such payment. CHAPTER LIII. Lost Instruments. SECTION 334. HOLDER'S RIGHT TO DUPLICATE OF LOST BILL. >[69. ] Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer if required to idemnify him against all persons whatever in case the bill alleged to have been lost shall be found again. If the drawer on request as aforesaid refuses to give such duplicate bill, he may be compelled to do so. SECTION 385. ACTION ON LOST BILL. [70.] In any action or proceeding upon a bill, the court or a judge may order that the loss of the instrument shall not be set up, provided an indemnity be given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question. CHAPTER LIV. Bill in a Set. SECTION 336. RULES AS TO SETS. [7 1. J I. Where a bill is drawn in a set, each part of the set being numbered, and containing a reference to the other parts, the whole of the parts constitute one bill. 2. Where the holder of a set indorses two or more parts to different persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed as if the said parts were separate bills. 3. Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first ac- crues is as between such holders deemed the true owner of the bill; but nothing in this sub-section shall affect the rights of a person who in due course accepts or pays the part first pre- sented to him. 4. The acceptance may be written on any part, and it must be written on one part only. If the drawee accepts more than one part, and such ac- cepted part gets into the hands of different holder in due course, he is liable on every such part as if it were a separate bill. 5. When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be deliv- ered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof. 6. Subject to the preceding rules, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged. CHAPTER LV. Conflict of Laws. SECTION 337. RULES WHERE LAWS CONFLICT. [72.] Where a bill drawn in one country is negotiated, accepted, or payable in another, the rights, duties, and liabili- ties of the parties thereto are determined as follows: 1 . The validity of a bill as regards requisities in form is- determined by the law of the place of issue, and the validity as regards requisities in form of the supervening contracts, such as acceptance, or indorsement, or acceptance supra pro- test, is determined by the law of the place where such con- tract was made. Provided that — («) Where a bill is issued out of the United Kingdom it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue; (3) Where a bill, issued out of the United Kingdom,, conforms, as regards requisities in form, to the law of the United Kingdom, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who ne- gotiate, hold, or become parties to it in the United Kingdom. 2. Subject to the provisions of this Act, the interpreta- tion of the drawing, indorsement, acceptance, or acceptance supra protest of a bill, is determined by the law of the place- where such contract is made. Provided that where an inland bill is indorsed in a for- eign country the indorsement shall as regards the payer be in- terpreted according to the law of the United Kingdom. 594 CONFLICT OF LAWS. [CHAP. 55, 3. The duties of the holder with respect to presentment for acceptance or payment and the necessity for or sufficiency of a protest or notice of dishonor, or otherwise, are deter- mined by the law of the place where the act is done or the bill is dishonored. 4. Where a bill is drawn out of but payable in the Uni- ted Kingdom and the sum payable is not expressed in the currency of the United Kingdom, the amount shall, in the absence of some express stipulation, be calculated according to the rate of exchange for sight drafts at the place of pay- ment on the day the bill is payable. 5. Where a bill is drawn in one country and is payable in another, the due date thereof is determined according to the law of the place where it is payable. CHAPTER LVI. Cheques on a Banker. SECTION 338. CHEQUE DEFINED. [73. J A cheque is a bill of exchange drawn on a banker payable on demand. Except as otherwise provided in this part, the provisions of this Act applicable to a bill of exchange payable on de- mand apply to a cheque. SECTION 839. PRESENTMENT OF CHEQUE FOR PAYMENT. [74. J Subject to the provisions of this Act: — 1. Where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or the person on whose account it is drawn had the right at the time of such presentment as between him and the banker to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid. 2. In determining what is a reasonable time regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case. 3. The holder of such cheque as to which such drawer or person is discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such dis- charge, and entitled to recover the amount from him. 596 CHEQUES ON A BANK. [CHAP. 56, SECTION 340. REVOCATION OF BANKER'S AUTHORITY. [75. J The duty and authority of a banker to pay a cheque drawn on him by his customer are determined by: — 1. Countermand of payment; 2. Notice of customer's death. CHAPTER LVII. Crossed Cheques. SECTION 341. GENERAL AND SPECIAL CROSSINGS DEFINED. [76.] I. Where a cheque bears across its face an ad- dition of — {a) the words " and company" or any abbreviation thereof between two parallel transverse lines, either, with or without the words "not negotiable;" or {&) two parallel transverse lines simply, either with or without the words "not negotiable," that addition constitutes a crossing, and the cheque is crossed generally. (2). Where a cheque bears across its face an addition of the name of a banker, either with or without the words "not negotiable, " that addition constitutes a crossing, and the cheque is crossed specially and to that banker. SECTION 342. CROSSING BY DRAWER OR AFTER ISSUE. [77. J I. A cheque may be crossed generally or spe- cially by the drawer. 2. Where a cheque is uncrossed, the holder may cross it generally or specially. 3. Where a cheque is crossed generally the holder may cross it specially. 4. Where a cheque is crossed generally or specially, the holder may add the words " not negotiable." 5. Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collection. 6. Where an uncrossed cheque, or cheque crossed gen- 5^8 CROSSED CHEQUES. [CHAP. 57, erally, is sent to a banker for collection, he may cross it spe- cially to himself. SECTION 343. CROSSING A MATERIAL PART OF CHEQUE. [78. J A crossing authorized by this Act is a material part of the cheque; it shall not be lawful for any person to obliterate or, except as authorized by this Act, to add to or alter the crossing. SECTION 344. DUTIES OF BANKER AS TO CROSSED CHEQUES. [79. J I. Where a cheque is crossed specially to more than one banker except when crossed to an agent for collec- tion being a banker, the banker on whom it is drawn shall refuse payment thereof. 2. Where the banker on whom a cheque is drawn which is so crossed nevertheless pays the same, or pays a cheque crossed generally otherwise than to a banker, or if crossed specially otherwise than to the banker to whom it is crossed, or his agent for collection being a banker, he is liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid. Provided that where a cheque is presented for payment which does not at the time of presentment appear to be crossed, or to have had a crossing which has been obliterated, or to have been added to or altered otherwise than as author- ized by this Act, the banker paying the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be questioned by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorized by this Act, and of payment having been made otherwise than to a banker or to the banker to whom the cheque is or was crossed, or to his agent for collection be- ing a banker, as the case may be. SEC. 345 -J CROSSED CHEQUES. 599 SECTION 345. PROTECTION TO BANKER WHERE CHEQUE IS CROSSED. [80. J Where the banker, on whom a crossed cheque is drawn, in good faith and without negligence pays it, if crossed generally, to a banker, and if crossed specially, to the banker to whom it is crossed, or his agent for collection being a banker, the banker paying the cheque, and, if the cheque has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner thereof. SECTION 346. EFFECT OF CROSSING ON HOLDER. [8i.j Where a person takes a crossed cheque which bears on it the words "not negotiable," he shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had. SECTION 347. PROTECTION TO COLLECTING BANKER. [82. J Where a banker in good faith and without negli- gence receives payment for a customer of a cheque crossed generally or specially to himself, and the customer has no title or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment. CHAPTER LVIII Promissory Notes. SECTION 348. PROMISSORY NOTE DEFINED. [83.] I. A promissory note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in mone}-, to, or to the order of, a specified person or to bearer. 2. An instrument in the form of a note payable to mak- er's order is not a note within the meaning of this section un- less and until it is indorsed by the maker. 3. A note is not invalid by reason only that it contains also a pledge of collateral security with authority to sell or dispose thereof. 4. A note which is, or on the face of it purports to be, both made and payable within the British Islands is an inland note. Any other note is a foreign note. SECTION 349. DELIVERY NECESSARY. [84.] A promissory note is inchoate and incomplete un- til delivery thereof to the payee or bearer. SECTION 350. JOINT AND SEVERAL NOTES. [85. J I. A promissory note may be made by two or more makers, and they may be liable thereon jointly, or jointly and severally according to its tenor. SEC. 351.] PROMISSORY NOTES. 60I 2. Where a note runs "I promise to pay" and is signed by two or more persons it is deemed to be their joint and several note. SECTION 351. NOTE PAYABLE ON DEMAND. [86. J I. Where a note payable on demand has been indorsed, it must be presented for payment within a reason- able time of the indorsement. If it be not so presented the indorser is discharged. 2. In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade and the facts of the particular case. 3. Where a note payable on demand is negotiated, it is not deemed to be overdue, for the purpose of affecting the holder with effects of title of which he had no notice, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue. SECTION 352. PRESENTMENT OF NOTE FOR PAYMENT. [87. J I. Where a promissory note is in the body of it made payable at a particular place, it must be presented for payment at that place in order to render the maker liable. In any other case, presentment for payment is not necessary in order to render the maker liable. 2. Presentment for payment is necessary in order to render the indorser of a note liable. 3. Where a note is in the body of it made payable at a particular place, presentment at that place is necessary in order to render an indorser liable; but when a place of pay- ment is indicated by way of memorandum only, presentment at that place is sufficient to render the indorser liable, but a presentment to the maker elsewhere, if sufficient in other re- spects, shall also suffice. 6o2 PROMISSORY NOTES. [CHAP. 58 SECTION 353. LIABILITY OF MAKER. [88.] The maker of a promissory note by making it — 1. Engages that he will pay it according to its tenor. 2. Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse. SECTION 354. APPLICATION OF PART II TO NOTES. [89.] I. Subject to the provisions in this Part, and except as by this section provided, the provisions of this Act relating to bills of exchange apply, with the necessary modifi- cations, to promissory notes. 2. In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer's order. 3. The following provisions as to bills do not apply to notes; namely, provisions relating to — (a) Presentment for acceptance; {i>) Acceptance; (c) Acceptance supra protest; {d) Bills in a set. 4. Where a foreign note is dishonored, protest thereof is unnecessary. CHAPTER LIX. Supplementary. SECTION 355. GOOD FAITH. [90. J A thing is deemed to be done in good faith, within the meaning of this Act, where it is in fact done honestly, whether it is done neghgently or not. SECTION 356. SIGNATURE. [9 1. J I. Where, by this Act, any instrument or writing is required to be signed by any person, it is not necessary that he should sign it with his own hand, but it is sufficient if his signature is written thereon by some other person by or under his authority. 2. In the case of a corporation, where by this Act any instrument or writing is required to be signed, it is sufficient if the instrument or writing be sealed with the corporate seal. But nothing in this section shall be construed as requir- ing the bill or note of a corporation to be under seal. SECTION 357. COMPUTATION OF TIME. [92. J Where, by this Act, the time limited for doing any act or thing is less than three days, in reckoning time, non- business days are excluded. "Non-business days" for the purposes of this Act mean — (a) Sunday, Good Friday, Christmas Day; 6o4 SUPPLEMENTARY. [CHAP. 59, {b) A bank holiday under the Bank Hohdays Act, 1 87 1, or acts amending it; (c) A day appointed by Royal proclamation as a pub- lic fast or thanksgiving day. Any other day is a business day. SECTION 358. WHEN NOTING EQUIVALENT TO PROTEST. [93. J For the purpose of this Act, where a bill or note is required to be protested within a specified time or before some further proceeding is taken, it is sufficient that the bill has been noted for protest before the expiration of the speci- fied time or the taking of the proceeding; and the formal pro- test may be extended at any time thereafter as of the date of the noting. SECTION 359. PROTEST WHEN NOTARY NOT ACCESSIBLE. [94. J Where a dishonored bill or note is authorized or required to be protested, and the services of a notary cannot be obtained at the place where the bill is dishonored, any householder or substantial resident of the place may, in the presence of two witnesses, give a certificate, signed by them, attesting the dishonor of the bill, and the certificate shall in all respects operate as if it were a formal protest of the bill. The form given in Schedule i to this Act may be used with necessary modifications, and if used shall be sufficient. SECTION 360. DIVIDEND WARRANTS MAY BE CROSSED. [95. J The provisions of this Act as to crossed checks shall apply to a warrant for payment of dividend. SEC. 361. J SUPPLEMENTARY. 605 SECTION 361. REPEAL. [96.] The enactments mentioned in the second schedule of this Act are hereby repealed as from the commencement of this Act to the extent in that schedule mentioned. Provided that such repeal shall not affect anything done or suffered, or any right, title, or interest acquired or accrued before the commencement of this Act, or any legal proceeding or remedy in respect of any such thing, right, title, or interest. SECTION 362. SAVINGS. [97. J I. The rules in bankruptcy relating to bills of exchange, promissory notes, and checks, shall continue to ap- ply thereto notwithstanding anything in this Act contained. 2. The rules of common law including the law mer- chant, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to bills of ex- change, promissory notes and checks. 3. Nothing in this Act or in any repeal effected thereby shall affect: (a) The provisions of the Stamp Act, 1870,' or acts amending it, or any law or enactment for the time being in force relating to the revenue; (d) The provisions of the Companies Act, 1862,' or acts amending it, or any act relating to joint stock banks or companies; (c) The provisions of any act relating to or confirming the privileges of the Bank of England or the Bank of Ireland respectively; (d) The validity of any usage relating to dividend warrants, or the indorsements thereof. '33 and 34 Vict, c. 97. ^25 and 26 Vict., c. 89. 6o6 SUPPLEMENTARY. [CHAP. 59, SECTION 363. SAVING OF SUMMARY DILIGENCE IN SCOTLAND. [98. J Nothing in this Act or in any repeal effected thereby shall extend or restrict, or in any way alter or effect the law and practice in Scotland in regard to summary dili- gence. SECTION 364. CONSTRUCTION WITH OTHER ACTS. ETC. [99. J Where any act or document refers to any enact- ment repealed by this Act, the act or document shall be con- strued, and shall operate, as if it referred to the correspond- ing provisions of this Act. SECTION 365. PAROL EVIDENCE IN JUDICIAL PROCEEDINGS IN SCOT- LAND. [100. J In any judicial proceeding in Scotland, any fact relating to a bill of exchange, bank check, or promissory note, which is relevant to any question of liability thereon, may be proved by parol evidence: Provided that this enactment shall not in any way affect the existing law and practice whereby the party who is, according to the tenor of any bill of ex- change, bank check, or promissory note, debtor to the holder in the amount thereof, may be required, as a condition of ob- taining a sist of diligence, or suspension of a charge, or threatened charge, to make such consignation, or to find such caution as the court or judge before whom the cause is de- pending may require. This section shall not apply to any case where the bill of exchange, bank check, or promissory note has undergone the sesennial prescription. SUPPLEMENTARY. 607 Fi rst Schedule} Form of protest which may be used when the services of a notary cannot be obtained. Know all men that I, A. B. (householder), of in the county of . ; , in the United Kingdom, at the request of C. D., there being no notary public available, did on the day of 1 88 . . at demand payment (or acceptance) of the bill of exchange hereunder written, from E. F. , to which demand he made answer (state answer, if any.) Wherefore, I now in the presence of G. H. and J. K. do protest the said bill of exchange. (Signed) A. B. l Witnesses. J- K. f N. B. — The bill itself should be annexed, or a copy of the bill and all that is written thereon should be underwritten. 'The other schedules are purely local in interest, and are therefore omitted. — Ed. TABLE OF CASES. (References ^re lo pages.) Abbott V. McKinley, 2 Miles (Pa.), 220 '. . . 125 Aborn v. Bosworth, i R. 1., 401 353 Abrahams v. Mitchell. 112 Pa. St., 232 259 Acheson v. Fountain, 7 Stra., 557 _ ... 303 Adams v. Seaman, 82 Cal., 637 92, 93 Adams v. King, 16 III, 169 118, 119, 120 Adams v. Jones, 12 Adolph. & E., 459 280 Adams v. Bowen, 8 S. & M., 624 423 Adams v! Adams, 25 Minn., 72 429 Adams v. Adams, 91 N. Y., 381 429 Adams v. Blethen, 66 Me., 19 257, 277 Adams v. Beal, 67 Ind., 53 124 Adams, et al. v. Rowan, et al., 8 Smedes & Marsh, 624 426 Adams v. Lindsell, 2 B. & A., 681 202 Adams v. Robinson, 69 Ga., 627 441 Addy V. Grix, 8 Ves., 504 278 Aetna Ins. Co. v. Alton City Bk., 25 111., 243 298 Aivde V. Dixon, 6 Ex., 869 410 Aldrich v. Jackson, 5 R. I., 218 311, 318, 310 Aldrich v. Warren, 16 Me., 465 427 Alexander v. Thomas, 16 Adol. &l EL, 353 78 Alister v. Smith, 17 111., 328 333 Allain v. Whittaker, 5 Mar., 513 341 Allan V. Manson, 4 Camp., 115 119 Allin V. Williams, 97 Cal., 403 282, 293, 492 Allen V. Pegram, 16 Iowa, 163 299, 462 Allen V. Harrah, 30 la., 363 471 Allen V. Suydam, 20 Wend., 321 379 Almich V. Downey, 45 Minn., 460 163, 166 Alma V. Winslow, 126 Mass., 342 73 Altman v. Rellershofer, 68 Mich., 287 92 Altoona Bk. v. Dunn, 151 Pa. St., 228 3°° American Emigrant Co. vs. Clark, 47 la., 671 452 6lO TABLE OF CASES. America v. Kirby, io8 Mass., 497 285 Amy V. Dubuque.-pS U. S., 470 288, 292 Ancher v. Bank of England, Doug., 615 302 Andrew v. Blachley, 11 Ohio St., 89 102, 449 Andrews v. Franklyn, i Str. 24 (1717) 79, loi Andrews v. Pond, 13 Peters, G5 333, 334, 437, 465, 478 Anderson v. First National Bank, 2 Fed. Rep., 125 187 Anderson v. Bullock, 4 Munf ., 442 80 Andenton v. Shoup, 17 Ohio St., 125 162 Angle V. Northwestern Ins. Co., 93 U. S., 330. . . . 402, 407, 446 Angel V. McClellan, 16 Mass., 228 122, 430 Anglo-California Bank v. Ames, 27 Fed Rep., 727 124 Aniba v. Yeomans, 39 Mich., 171 256, 277 Ankeny v. Henry, 7 Idaho, 229 294, 307 Anonymous, i Ld. Raym., 738 34, 39 Anonymous, i Salk., 126 -. . . . 34, 39 Anton V. Gruner, 90 111., 625 418 Appleby v. Biddulph. 8 Mod., 363 81, 100, 192 Arden v. Watkins, East., 317 281 Armstrong v. Toler, 11 Wheat, 258 423, 425 Armory v. Ddarmire, I Strange, 505 35 Armstrong v. Harshman, 61 Ind., 52 120 Armfield v. Allport, 27 Law J., Exch., 42 iii, 115 Ammidown v. Woodman, 31 Me., 580 107 Armstrong v. Pomeroy TSTatl. Bank, 46 Ohio St., 512 488 Arnold v. The Rock River Ry. Co., 5 Duer, 207 84, 89 Arnold v. Check Bank, i T. R. C. P., 578 247 Arnold v. Dresser, 8 Allen (Mass.), 435 382 Arnold v. Potter, 22 la., 198 470 Arnot V. Symonds. 85 Pa. St., 99 226,262, 278 Arr V. Lacey, 2 Doug, (Mich.) Rep., 230 423 Ascher v. Claflin, 31 111., 306 84 Attenborough v. McKenzie, 36 Eng. Law & Eq., 562 181 Attorney General v. Continental Life Ins. Co., 71 111., 325. . . 449 Atwood V. Griffin, 2 C. & P., 368 120 Auerbach v. Pritchett, 58 Ala., 451 84 Augusta Bank v. Augusta, 49 Me., 507 455 Aurora v. West, 22 Ind., 88 420 Austin V. Bostwick, 9 Conn., 501 61 Austin V. Boyd, 24 Pick., 64 269 Austin V. Imvs., 23 Vt., 286 284 Austin V. Munro, 47 N. Y., 360 131 Aymar v. Beere, 7 Cow., 705 380 Aymar v. Sheldon, 12 Wend., 438 302 TABLE OF CASES. 6ll Ayrey v. Fearnsides, 4 M. & W., 168 89 Averett v. Booker, 15 Gratt. (Va.) 163 57 Avery v. Stewart, 2 Conn., 69 105, 108, 109 Bacon v. Bonham, 33 N. Y., 614 249 Bacon v. Bicknell, 12 Wis., 523 72 Badgley v. Votrain, 68 111., 25 262 Baglehole v. Walters, 3 Camp., 154 325 Bailey v. Bidwell, 13 Mees. & W., 73 427 Bailey v. Taber, 5 Mass., 286 166 Bailey v. Rawley, i Swan (Tenn.), 205 132, 269 Baker v. Briggs, 8 Pick., 130 , . . 270 Baker v. Dening, 8 Adol. & Ellis, 94 228 Baldwin v. Palmer, 10 N. Y., 232 423 Baldwin v. Dow, 130 Mass., 416 472 Ball V. Allen, 15 Mass., 433 72 Ballingalls v. Gloster, 3 East., 481 294 Bank of Commerce v. Union Bank, 3 Comst., 230 232, 233 Bank of Gloucester v. Salem Bank, 17 Mass., 33 235 Bank of U. S. v. Bank of Georgia, 10 Wheat., 333. . . . 230, 235 Bank of Michigan v. Ely, 17 Wend., 508 183, 214 Bank v. Becknagel, 109 N. Y., 482 214 Bank of Ect. v. Sherer, 108 Cal, 513 295 Bank v. Low, 81 N. Y., 566 333, 463, 470 Bank v. Miller, jj Ala., 168 453 Bank v. Miller, 37 Neb., 500; 40 Am. St. Rep., 499 451 Bank v. Cornhauser, 37 111. app., 47 5 453 Bank, etc. v. Merrill, 2 Hill, 295 72 Bank v. Morris, i Hun., 680. . . . , 469 Bank of Rutland v. Woodruff, 34 Vt., 89 183, 187 Bank v. Bank, 8 Barb., 396; 7 N. Y., 459 184 Bank v. Thompson, 42 N. H., 369 i54 Bank v. Weiss, 67 Texas, 331 298 Bank of Ft. Madison v. Alden, 129 U. S., 372 301 Bank of Ga. v. Lewis, 45 Barb., 340 469 Bank of British N. A. v. Merchants Bk., i N. Y., iii 453 Bank of Montreal v Thayer, 7 Fed. Rep., 622 461 Bank, etc., v. Gore, 63 Cal, 355 445 Bank of Pittsburg v. Neal, 22 How., 108 437. 439 Bank v. Jones, 27 N. E. R., 533 453 Bank v. Whitman, 94 U. S., 343 453 Bank of Utica v. Smith, 18 Johns, 230 381 6l2 TABLE OF CASES. Bank v. Douglass, 31 Conn., 170 399 Bank of Utica v. Smith, 18 Johns, 230 331 JJank of Washington v. -Reynolds, 2 Crauch. C. C, 289. . . . 382 i>ank of Jamaica v. Jefferson, 92 Tenn., 537 2:75 iiank v. Gilliland, 23 Wend., 311 (1840J 172 Bank v. Mayberry, 48 Me., 556 , 105 Bank v. Strother, 28 S. C, 504 93 Bank v. Wheeler, 75 III, 540 93 Bank v. Price, 52 la., 570 105 Barnard v. Gushing, 4 Mete, 230 81 Banbury v. Lisset, 2 Strange, 121 1 78, 79, 102 Barrett v. Buxton, 2 Aiken, 167 432 Barrett v. Allen, 10 Ohio, 426 105 Barrett v. Dodge, 16 R. L, 740; 2)7 Am. St. R., yyj 173 Bardsley v. Deep, 88 Pa. St., 420 172 Barnsley v. Baldw)n, 7 Mod., 417; 2 Str., 1151 100 Barrough v W'lute, 4 B. & C , ^2j . . . 105 Baring v. Clark, 19 Pick., 220 227 Jjarney v. Grover, 28 Vt., 391 253 Barrow v Porter, 44 Vt., 587 251 Barnett v. Young, 29 Ohio St., 71 300 Bartlett v. Emery, i T. R., 42 433 Bartlett v. Tucker, 104 Mass., 336 132, 161, 162 Barrows v. Barrows, 138 111., 656 151 Barrey v. Ranson, 12 N. Y., 462 293 Barnard v. Campbell, 55 N. Y., 456 459, 460 Barnum v. Phenix Co., 60 Mich., 388 441 Barlow v. Meyers, 64 N. Y., 41 ; 21 Am. Rep., 547 472 Bass V. Kline, 4 Maule & Selwyn Eassenhorst v. Wilby, 45 Ohio St., 333 313, 382 Bassett v. Avery, 15 Ohio St., 299 442, 444, 446 Bates V. Watson, i Sneed, 376 423, 425 Batzer v. Buren, 29 Me., 434 327 Bays V. Conner, 105 Ind., 415 127 Bayard v. Shunk, i Watts &l S. (Pa.), 92 327, 458 3ay V. Coddington, 5 Johnson's Ch., 54 172, 444 Baxter, Duren, 29 Me., 434 314, 316, 317, 318 Beardsley v. Baldwyn, 2 Strange, 1151 yj, 78, 79 Beale v. Parish, 20 N. Y., 407 382 Heal V. Glen. Elec. Co., 38 N. Y., 527 295 Beebe v. Bank of New York, i Johnson, 529, 572 254 Reckwith v. Angell, 6 Conn., 325 266 Becham v. Drake, 9 M. & W., 92 162 Bedell v. Hening, 11 Am. St. Rep., 307; 77 Cal., 573 419 TABLE OF CASES. 613 Beer v. Clifton, 98 Cal., 328 312 Beech v. State Bank, 2 Ind., 488 183 Beeching v. Westbrook, 8 M. & W., 412 62 Bell V Cafferty. 21 Ind., 411 , 318 Bell V. Morrison, i Peters, 531 62 Bell V. Bruen, i How., 182 , 470 Bell V. First N. Bank, iii U. S., 382 105 Bell V. Dagg, 60 N. Y., 528 318, 325, 327 Belmont Bank v. Hoge, 35 N. Y., 65 439, 440, 441 Belleville Bank v. Barneman, 124 111., 205 153 Belden v. Hann, 61 Iowa, 41 296 Belcher v. CampbeU, 8 2. B., i 282 Bemis v. Leonard, 118 Mass., 502 , 108 Benjamin v. Fillman, 2 McLean (U. S.), 351 168 Benn v. Kutzschan, 24 Or., 28; 32 Pac. E., 763 91, 92, 293 Bentick v. Dorrien, 6 East., 200 201, 202, 206 Benton v. Martin, 52 N. Y., 574 153 Benedict v. Schmieg, 13 Wash., 476; 52 Am. St. Rep., 61 382 Benedict v. Cowden, 49 N. Y., 396 405 Bennett v. Farwell, i Campb., 130 488 Berney v. Steiner Bros., 108 Ala., iii 309 Biglow V. Burnham, 83 Iowa, 120 333 Bigelow V. Stilphen, 35 Vt., 521 Bigelow V. Burnham, 49 N. W. Rep. (la.), 104 470 Bickford v. First Nat. Bk., 42 111., 238 : 449 Bilderbeck v. Burlingame, 27 111., 338 103 Bill V. White, 52 Wis., 169 161 Billings V. Collins, 44 Me., 271 445 Bishop V. Rowe, 71 Me., 263 132 Bisbing v. Graham, 14 Pa. St., 14 322, 437 Biskup V. Oberle, 6 Mo. App., 583 73 Bissell V. Gowdy, 31 Conn., 48 442 Bissell vs. Dickerson, 64 Conn., 61 294 Bishop V. Hayward, 4 Term., 470 > 293 Bissenthall v. Williams, i Duval (Ky.), 329 58 Bixler v. Kresge, 169 Pa. St., 405 124 Blake v. Coleman, 22 Wis., 396 78, 81 Blackmen v. Lehman, 63 Ala., 547 57. 7^ Blanchard v. Williamson, 70 111., 647 169 Black V. Ward, 27 Mich., 191 87 Blanckenhagen v. Blundell, 2 B. & Al., 417 "9 Blakeslee v. Hewitt, 76 Wis., 341; 44 N. W. Rep., 1 105. .275, 298 Blake v. McMillen, 33 la., 150 382 6l4 TABLE OF CASES. Block V. Bell, i M. & Rob., 149 57, 72 Blair v. Wilson, 28 Grat. (Va.), 170 450 Bleaden v. Charles, 7 Bing., 246 331 Blethen v. Levering, 58 Me., 437 322, 330 Bliss V. Meyers, 8 Mass., 51 423 Blogg V. Pinkers, i Ryan & Mood., 125 169 Bloomer v. Henderson, 8 Mich., 395 254 Blood V. Northup, i Kan., 28 72 Blodgett V. Durgin, 32 Vt., 364 469 Boardman v. Hayne, 29 la., 339 253 Boehm v. Garcias, 7 Camp., 425 195 Bown V. Hanaden, 4 T. R., 149 57 Born V. First Natl. Bank, 123 Ind., 78 452 Bodley v. Nat. Bk., 38 Kan., 61 446 Bonnell v. Mawha, 8 Vt., 200 182 Bogert V. Hertell, 4 Hill, 492 131 Borst V. Griffin, 5 Wend., 84 108 Borough V. Perkins, i Salk, 131; Holt's Rep., 121 51, 381 Borden v. Clark, 26 Mich., 410 299, 322 Bostwick V. Dodge, i Doug., 413 340 Bosch V. Cassig, 64 la., 314 443 Bourne v. Ward, 51 Me., 191 168 Boulton V. Street, 3 Coldwell, 31 461 Boulton V. Coughlan, i Bing, 640 428 Bowie V. Hall, 1 L. K. A., 546; 69 Md., 433 91, 93 Bowles V. Lambeth, 54 111,, 237 62, 72, 120 Bowman v. Hiller, 130 Mass., 153 282, 311 Bowman v. Wood, 15 Mass., 534 308 r.cwen et al. v. Newell et al, 4 Selden, 190 454, 455 Boyd V. Brotherson, 10 Wend., 93 107 Boyce v. Edwards, 4 Peters, 121 221 Braham v. Bubb, Chitty on Bills, 87 81 Bradley v. Clarke, 5 D. & E., 201 , 97 Bradley v. Pratt, 23 Vt., 378 121, 122 Brayley v. Kelley, 25 Minn., 160 117 PJraithwaite v. Gardiner, 8 Q. B., 473 232, 247 Bray v. Hadwen, 5 M. & S., 68 383 Brannin v. Henderson, 12 B. Mon. (Ky.), 61 185 Bradsley v. Delp, 88 Pa. St., 420 274 Bradley v. Pratt, 23 Vt., 378 430 Brandan v. Barnett, 12 Clark & F., 805 29 Brady v. Chandler, 31 Mo., 28 70, 72 Brewster v. Hobart, 15 Pick., 302 132 Brewster v. Williams, 2 S. Car., 455 82 TABLE OF CASES. 615 Brewster v. McCardel, 8 Wend., 479 166 Brett V. Marston, 43 Me., 410 331 Bree v. Holbech, Dougl., 630 ■ 324 Breneman v. Furness, 90 Pa. St., 186 259 Brenzer v. Wightman, 7 W. & S. (Pa.) 61 Brewer v. Brewer, 6 Ga., 588' 61 Bristol V. Warner, 19 Conn., 7 79 Brix V. Braham, i Bingham, 281 167 Brill V. Tuttle, 81 N. Y., 457 '. 89 Brisbane vs. Dacres, 5 Taunt, 142 235 Bridge v. Batchelder, 9 Allen, 394 (1864) 328 Bridge v. Wain, i Stark, 504 325 Brit V. Lawson, 15 Hun., 133 382 Brinkman v. Hunter, 73 Mo., 172 185 Erind v. Hampshire, i M. & W., 65 282 Bristol V. Warner, 19 Conn., 7 67 Briggs V. Merrill, 58 Barb., 379 , 445 Briggs V. Central Nat. Bk., 80 N. Y., 182 298 Brind v. Hampston, 7 M. & W., 365 150 Brooks V. Hargreaves, 21 Mich., 254 78, 106 Brown v. Mott, 7 Johnson, 361 , 167, 168 Brown v. Harraden, 4 D. & E., 148; 4 Tenn. Rep. 148. 97, 104 Brown v. Vailes, 14 L. R. A., 120 108 Brown v. Oilman, 13 Mass., 158 119 Brown v. Butler, 99 Mass., 179 275 Brown v. Salisbury, i Glyn. & Jam., 407 274 Brown v. Reed, 73 Pa. St., 370 403 Brown v. Turner, 15 Ala., 832 , 382 Brown v. McNamara, 20 N. Y., 287 323 Brown v. Gardiner, 4 B. J. Lea, 156 47^ Brown v. Gillman, 13 Mass., 158 69 Brown v. Kinsey, 81 N. C, 245 , 429 Brown v. Butchers' Bank, 6 Hill, 443. . . 160, 161, 276, 277, 496 Brown v. Leeson, 2 H. BL, 43 428 Brown v. Lusk, 4 Yerger, 240 454 Brown v. Spofford, 95 U. S., 474 4^7 Brown v. Davies, 3 T. R., 80 3°^ Brown v. DeWinton, 6 Man. G. & S., 336 305 Brown v. Jordhall, 32 Minn., 135 5° Brown v. Leckie, 43 111., 497 45^ Broughton v. Manchester Water Wks., 3 B & Aid., i 128 Bromage et al. v. Lloyd et al., 1 Exchequer Rep., 32 278 Bromley v. Frazier, i Strange, 441 375 Brough V. Parkings, 2 Ld. Raym., 993 35i 6l6 TABLE OF CASES. Bromwich v. Lloyd, 2 Lutwytch, 1582 24 Brooks V. Hanover Bk., 26 Fed. Rep., 301 460 Brooks V. Elkins, 2 M. & W., 74 66, 70, 72, 462 Brooks, Oliphant & Co. v. Vannest, 58 N. J. L., 162 298 Brutt V. Picard, R. & M., 37 166 Brunetti v. Lewin, 1 Lutw., 896 (1781) 224, 226 Bruce v. Barber, 3 Barb., 374 . . . 405 Bruce v. Bruce, 5 Taunt., 495 236 Bruch V. Barrett, 32 N. Y., 400 383 Brush V. Barnard, 8 Johnson, 407 62 Brush V. Scribner, 11 Conn., 388 439 Buckingham v. McLean, 13 How., 212 466 Buchanan v. Bank, 78 111., 500 167 Bullock V. Taylor, 39 Mich, 138 , 92, 93 Bull V. Kasson, 123 U. S., 1 12 87 Bull V. Bank, 115 U. S., 373 379 Buller V. Crips, 6 Modern, 29 25, 26 Bull V. Bank, 123 U. S., 105 450, 451 Burchell v. Burchell, 2 Ld. Raym., 15, 45 102 Burton v. Brooks, 25 Ark., 215 87 Burgess v. Merrill, 4 Taunt., 468 124, 430 Burson v. Huntington, 21 Mich., 415; 4 Am. Dec. 407 135, 238, 418 Burrill v. Parsons, 71 Me., 282 417 Burrows v. Stryker, 47 Iowa, 477 333, 470 Burlingame v. Brewster, 79 111., 515 399 Burke v. McKay, 2 Howard, 71 357 Burns v. Rowland, 40 Barb., 368 183 Burnap v. Cook, 32 111., 168 304 Burrage v. Lloyd, 7 Exch. R., 32 150 Burr V. Veeder, i Wend., 412 236 Burton v. Curyea, 40 111., 320; 89 Am. Dec, 350, 360 460 Butler V. Paine, 8 Minn., 320 85 Butchers', Etc., Bank v. Hubbell, 177 N. Y., 384 298 Butler V. Meyer, 17 Ind., jj 465 Bussard v. Levering, 6 Wheaton, 102 104 Buch V. Linthicum, 59 Ind., 344 124 Bush V. Lathrop, 22 N. Y., 535 254 Bush V. Breinig, 113 Pa. St., 310; 6 Atl., 86 133, 432 Buttrick v. Harries, 3 Am. L. Reg 465 TABLE OF CASES. 617 o Cabot Bank v. Morton, 4 Gray, 156 318 Cady V. Shephard, 12 Wis., 639 274 Cady V. Bradshaw, 116 N. Y., 188 383 Caldwell v. Wentworth, 14 N. H., 431 428 Calvin v. Sterrett, 41 Kan., 218 251 Campbell v. Robbins, 29 Ind., 271 .- 259 Camidge v. Allenby, 6 B. & C, 327 (1827) 327 Canal Bank v. Bank, 1 Hill, 287. . . . 232, 236, 239, 287, 295, 310 Carlisle v. Wishart,ii Ohio St., 172 172 Capron v. Capron, 44 Vt., 410 81, 106 Cape Ann KTat. Bk. v. Burns, 129 Mass., 596 402, 407 Carlon v. Kenealy, 12 Mes. & Wei., 139 94 Carlos V. Fancourt, 5 D. & E., 482 102 Ctrter v. McClintock, 29 Mo., 464 144 Carleton v. Woods, 8 Foster (N. H.), 290 425 Carlton v. Whittier, 5 N. H., 196 428 Carlon v. Ireland, 85 Com. Law, 765 439 Carnwright v. Gray, 127 N. Y., 93 73, 106, 167 Carver v. Hayes, 47 Me., 257 72 Carson v. Lucas, 13 B. Mon. (Ky.) 72 Carter v. Union, 7 Hun., 548 367 Carvor v. Warren, 5 Mass., 545 267, 270 Carpenter v. Farnsworth, 106 Mass., 561 119 Carlton v. Kenealy, 12 M. & W., 139 103 Cashbourne v. Button, i Selw., 320 66, 70, 72 Catron v. 1. & Society, 46 Iowa, 108 128 Catlin v. Lyman, 16 Vt., 44 284 Cate v. Patterson, 25 Mich., 191 72, 89 Caulkins v. Whisler, 29 la., 475; 4 Am. Rep., 236 419 Caupfield v. Cook, 92 Mich., 626 108 Caviness v. Rushton, loi Ind., 500 73 Cayuga Bank v. Hunt, 2 Hill, 635. 366, 466 Central Bank v. Davis, 19 Pick., 376 296 Chadwick v. Allen, i Str., 607 102 Chaddock v. Vaness, 35 N. J. L., 517 258, 275 Chaffee v. Jones, 19 Pick., 260 269 ChalHss V. McCrum, 22 Kan., 157 299, 318 Chalmers v. Lanion, i Camp., 383 445 Chambers v. Union Bank, 78 Pa. St., 205 240 Chandler v. Carey, 64 Mich., 237 77, 78 Chandelor v. Sopus Cro. Jac, 4 3^4 6l8 TABLE OF CASES. Chapman v. Remington, 80 Mich., 552 168 Chapman v. Speller, 14 Q. B. Rep., 621 325 Chapman v. Robertson, 6 Paige, 627 334 Chapman v. Block, 2 B. & Aid., 588 428 Chapman v. Rose, 56 N. Y., 137 416 Chapman v. Robinson, 6 Paige (N. Y.), 627 465 Chapman v. Rose, 56 N. Y., 137 141 Champion v. Gordon, 70 Pa. St., 476 104 Charlton v. Reed, 61 la., 166 81 Charles v. Denis, 42 Wis., 56 259, 322, 358 Chaters v. Bell et al 303 Cheek v. Roper, 5 Esp., 175 380 Chenaul v. Bush, 84 Ky., 528 168 Chesmer v. Noyes, 4 Camp., 129 351 Chicago Ry. Co. v. Merchant's Bank, 136 U. S., 268 94 Chicago Cottage Organ Co. v. Swartzell, 6 Mo. App., 490. . . 151 Childers v. Boulnois, Dow. & Ry 66, 73 Childs V. Monins, 2 Brod. & Bing., 460 280 Chipman v. Tucker, 38 Wis., 43 153 Chipman v. Foster, 119 Mass., 198 162 Christian v. Moris, 50 Ala., 586 131 Chrysler v. Renois et al., 43 N. Y., 209 85 Church V. Clapp, 47 Mich., 257 442 Churchman v. Martin, 54 Ind., 380 94 Cisue V. Chidester; 85 III, 523 106 City of Aurora v. West, 22 Ind., 88 333 City of Memphis v. Brown, 5 Am. L. T., 434 454 Citizens Nat. Bk. v. Importers Bk., 119 N. Y., 195 453 Clanser v. Stone, 29 III, 116 93 Cleveland v. Sherman, 40 Ohio St., 176 460 Claflin V. Boorum, 122 N. Y., 385; 25 N. E., 360 429 Cline V. Guthrie, 42 Ind., 227; 13 Am. Rep., 357 151 418 Clapp V. County of Cedar, 5 la., 15; 68 Am. Dec, 678 417 Clark V. Sigourney, 17 Conn., 511 151, 278 Clark V. Boyd, 2 Ohio, 56 151, 278 Clarke v. Thayer, 105 Mass., 216 152, 300 Clarke v. Ptese, 41 N. H., 414 147, 416 Clarke v. Johnson, 54 111., 296 418 Clark V. Farmer's, etc., 15 Wend., 256 50 Clarke v. Cock, 4 East, 57 220 Clarke v. Perceval, 2 Barn, cfc Aid., 660 79 Clark V. King, 2 Mass., 524 84 Clough V. Holden, 115 Mo., 336 367 Clodfelter v. Cox 251 TABLE OF CASES. 6ig Carlos V. Fancourt, 5 Term. R., 482 jj Camden v. Mullen, 29 Cal., 566 126 Central Savings Bank v. Richards, 109 Mass., 414 185 Cocks V. Masterman, 9 Barn & Cres., 902 239 Codman v. The Ut. & Can. Railroad Co., 16 Blatch., 165 . . . 288 Coddington v. Bay, 30 Johnson, 637 172 Coffman v. Campbell, 8 111., 98 182, 185 Coggill V. Am. Ex. Bank, i Comst., "jj 236 Citizens' Natl. Bank. v. Piollet, 126 Pa. St., 194 77 Colt V Barnard, 18 Pick., 260 302 Colby V. Parker, 34 Neb., 510; 52 N. W., 693 429 Columbia v. Laurence, i Pet., 583 366 Colson V. Arnot, 57 N. Y., 253 401 Cole V. Cushing, 8 Pick., 48 331 Coles V. Hulme, 15 Com. I. R., 300 106 Coleman v. Sayer, i Barn., 303 107 Colelian v. Cooke, Willes' Reports, 393 78, 89, 95 Collins V. Merrill, 2 Mete. (Ky.), 163 423 Collins V. Gilbert, 94 U. S., 53 152 Colher v. Mahan, 21 Ind., no 294 Collins V. Martin, i Bos. & P., 648 27, 169, 495 Collins V. Butler, 2 Strange, 1087 377 Collins V. The Buck-eye Ins. Co., 17 Ohio St., 215 132 College V. Wheeler et al., 61 N. Y., 88, 105 253 Collis V. Emmett, i H. Bk., 313 168 Commercial Bank v. Perry, 10 Rob. (La.), 61 186 Commercial Bk. v. Armstrong, 148 U. S., 50 298 Com. Exchange Bk. v. Nassau Bk., 91 N. Y., 74 453 Commissioners v. Aspinwall, 21 How. (U. S.), 539 454 Commercial Bk. v. Varnum, 49 N. Y., 269 382 Combe's Case, 9 Rep, 75 132 Commercial Nat. Bank v. Burch, Receiver, and Burch, Re- ceiver, V. Kalamazoo Paper Co., 141 111., 519 254 Conn. V. Thornton, 46 Ala., 588 79> io3 Conrad v. Kinzie, 105 Ind., 287 i54 Conroy v. Warren, 2 Doug., 636 304 Conrad v. Fisher, 37 Mo. App., 367 43° Cornell v. Barnes, 26 Wis., 473 465 Conroy v. Warren, 3 Johns. Cas., 259 45° Continental Nat. Bk. v. Cornhauser, 37 111. App., 475 453 Continental Bank v. Strauss, 137 N. Y., 14S 124 Continental N. B. v. Townsend, 87 N. Y., 10 .• 444 Conover v. Earle, 26 Iowa, 169 • ■ • 332" Conner v. Martin, i Strange, 516 274 620 TABLE OF CASES. Conlin v. Cantrell, 64 N. Y., 219 126 Convers v. Johnson, 146 Mass., 22 105 Conner v. Routh, 12 How. (N. Y.), 176 107 Cooper V. Nock, 27 111., 301 278 Cook V. Baldwin, 120 Mass., 317 185, 186, 187 Cooper V. Chicago Cottage Organ Co., 58 111. App., 248. ... 151 Cooke V. Clayworth, 18 Ves., 12 433 Cooke V. U. S., 91 U. S., 389 144 Coolidge V. Ruggles, 15 Mass., 387 57 Coolidge et al. v. Payton et al., 2 Wheaton, 66 183, 207, 214 Cooke V. Satterlee, 6 Cow., 108 57, 78, 84, 89 Cooke V. Horn, 29 Law Times, 369 94 Cooper V. King, 73 Iowa, 136 168 Cook V. Moffatt, 5 Has., 295 469 Copp V. McDugall, 9 Mass., 70 282 Cope V. Daniel, 9 Dana (Ky.), 415 331 Core V. Wilson, 40 Ind., 206 293 Cornthwaite v. First Natl. Bank, 57 Ind., 268 131, Z57 Corgan v. Trew, 39 111., 31 277 Corbett v. Bank of Smyrna, 2 Harr. (Del.), 235 458 Corbet v. Clarke, 45 Wis., 403 88 Corn Exchange Ins. Co. v. Babcock, 42 N. Y., 613 431 Corbett v. Stonemetz, 15 Wis., 187 103 Costello V. Crowell, 127 Mass., 293 78 Cota V. Buck, 7 Mete. (Mass.), 588 78, 80, 106 County, etc., v. Auckley, 90 Mo., 126 168 Cowing V. Altman, 71 N. Y., 435 420, 443 Cowie V. Stiriing, 6 E. & B., 333 (88 E. C. L. R.), 119 Cover V. Meyers, 75 Md., 406 311 Coch V. Coxwell, 2 C, M. & R., 291; Smith's Lead. Cas., 934 405 Coburn v. Odell, 30 N. H., 540 427 Cox V. Bank, 100 U. S., 716 368 Cox V. Bunn, 6 Johnson, 326 108 Cox V. Troy, 5 Barn. & Aid., 474 200, 283 Cox V. Liotard, H. 24. Geo. Dougl.,.167, N. (55) 97 Cox, etc., V. U. S., 6 Pet., 173, 203 470 C'oyle V. Smith, i E. D. Smith, 400 382 Crabtree v. May, i B. Mon., 289 124 Craig V. Brown, i Peter's C. C. Rep., 174 307 Critcher v. Holleway, 64 N. C, 526 428 Crutchley v. Mann, 5 Taunt, 529 113 Cramlington v. Evans, i Showers, 5 168 Crawford v. Cully, Wright (Ohio R.), 453 57 TABLE OF CASES. 62 I Crawford v. Morrell, 8 Johns., 253 425 Critchlow v. Parry, i Camp., 182 313 Cripps V. Davis, 12 M. & W., 159, 165 443 Cromwell v. County of Sac, 96 U. S., 51, 60 104, 294 Cromwell v. Hewitt, 40 N. Y., 491; 100 Am. Dec, 527 472 Crook V. Jadis, 5 Barn. & Ad., 909 438, 440 Crocker v. Holmes, 65 Me., 195 80, 106 Crosby v. Grant, 36 N. H., 273 444 Crosby v. Tanner, 40 Iowa, 136 254 Crosswait v. Ross, 1 Humph. (Tenn.), 23 127 Crossmore v. Page, 73 Cal., 213 103 Cruchley v. Clarence, 2 M. & S., 90 (ill) 113, 120 Crutchley v. Mann, 5 Taunton, 529 120 Culbertson v. Nelson, 61 N. W. Rep., 854 77 Culver V. Leary, 19 La. Ann., 202 273, 274 Culver V. Hide and I^eather Bank, 78 111., 625 418 Cummings v. Freeman, 2 Hum. (Tenn.) 143 61, 68 Curtis V. National Bank, 39 Ohio St., 579 274 Curtis V. Leavitt, 15 N. Y., 66 128 Currier v. Locbwood, 40 Conn,, 349 59, 69, 462 Curtis V. Sprague, 51 Cal., 239 (1876) 295, 309, 32S Cushing V. Field, 70 Me., 50 78 Cushing V. Gore, 15 Mass., 69 45^ Cusley V. Roub, 16 Wis., 616 277 Cutter V. Reynolds, 64 111., 321 449 ID Davidson v. Cooper, 11 M. & W., 778 401 Davis V. Wilkinson, 10 A. & E., 98 89 Darrach v. Savage, i Shaw, 155 3^1 Dawkes v. Ld. Deloraine, 2 Bl. Rep., 782; 3 Wiles, 207 102 Davis v. Rockingham & Co., 89 Va., 290 129 Dartmouth College Case, 4 Wheaton, 636 127 Davis V. Clark, 6 Adolphus v. Ellis, W. S., 16; 6 Queen's Bencli, 16; 51 Eng., C. L., 151 196, 197 Daukes v. Earl & Co., 2 W. Black, 782 79 Dale V. Kimpton, 46 Vt., 76 252 Davies v. Austen, 7 Vesey Jr., 247 253 Day v. Baldwin, 34 Ja., 380 33° Davis Sewing Machine Co. v. Jones, 61 Mo., 409 472 Daniels v. Kyle et al., i Kelley (Ga.), 304 454 Davis Mach. Co. v. Best, 105 N. Y., 59 446 Daggett V. Daggett, 124 Mass., 149 73 622 TABLE OF CASES. Davis V. McCready, 17 N. Y., 320 78, 167 Davis V. Bartlett, 12 Ohio St., 544 437, 443 Davis V. Seely, 91 Mich., 209 417 Davis v. Jones, 17 C. B., 625 165 Dale V. Gear, 38 Conn., 15 322 Davis V. Breron, 94 U. S., 423 259 Davidson v. Powell, 11 14 N. C, 575 253 Daggert v. Whiting, 35 Conn., 366 300 Dawson v. Kearton, 25 L. J. ch., 166 169 Dawkes v. Earl of &c., 2 Wm. Black., 782 y-j Davies v. Wilkinson, 10 Aid. & EL, 98 78 DeForest v. Hunt, 8 Conn., 184 61 Deberry v. Darnell, 5 Yerg., 451 86 Dean v. Carruth, 108 Mass., 242 168 Dexlaux v. Hood, Bull N. P., 274 97 DeWitt V. Perkins, 22 Wis., 457 444 Denny v. Williams, 5 Allen, i 470 Depew v. Humphreys, 20 ;\Iart. (La.), 1 463, 465, 467 DeForest v. Frary, 6 Cow., 151 57, 78, 79 DeWolfe v. French, 51 Me., 420 80 DeFIavilland v. Bowerbank, i Camp., 50 287 Dennistown v. Stewart, 17 How., 606; 12 Curtis, 722 358, 366, 367 Deny v. Reed, 40 Barb., 16 405 Derby v. Thrall, 44 Vt., 413 400 Deering v. Chapman, 2.2 Maine, 488 423, 425, 428 DePauw v. Bank, 126 Ind., 553 275, 300 Densmore & Co. v. Duncan, 57 N. Y., 573 82, 457 DeWolf V. Johnson, 10 Wheat, 367 465 DeWitt V. Walton, 5 Seld. (N. Y.), 571 162 DeCamp v. Hanna, 29 Ohio St., 467 147 iJehrens v. McKenzie, 23 Iowa, 333 133 Delaware Bank v. Jarvis, 20 N. \ ., 226 320, 328 Desha, Shephard & Co. v. Steward, 6 Alabama, 852 182 De La Courtier v. Bellamy, 2 Showers, 411 163 Dilley V. VanWie, 6 Wis., 209 84 Dickenson v. Dickenson, 2 Phil., 173 48 Dickinson v. Teague, 23 L. T. Rep., 65 7- Dixon V. Nwttall, 6 C. & P., 320 102 Digberty v. Damel, 5 Yerger, 451 85 Dietrich v. Bayhi, 23 La. An., 767 gi Dick et al. v. Leverich, 11 Lous. Rep., 573 236 Dickins v. Beal, 10 Pet., 579 365 Dowling V. National Bank, 145 U. S., 512 127 TABLE OF CASES. 623 Doty V. Bates, 1 1 Jons, 544 127 Downing v. Backinstoes, 3 Caines, 137 167 Douglas V. Matting, 29 la., 498 416 Dodge V. Nat. Exch. Bit., 20 Ohio St., 234 453 Dodge V. Emerson, 34 Me., 96 94 Dow V. Updike, 1 1 Neb., 7 N. W. Rep., 115 93 Donefian v. Wood, 49 Ala., 242 104 Dorsey v. Wolf, 142 111., 589 92 Douglass V. Reynolds, 7 Pet., 126 472 Dole V. Young, 24 Pick., 252 472 Doane v. Kind, 30 Fed. Rep., 106 441 Doty V. The Knox County Bank, 16 Ohio St., 133. . . . 423, 427 Dollfus V. Frosch, i Denio, 367 305 Douglas V. Waddle, 7 Ohio, 413 300 Dougal V. Chowles, 5 Day (Conn.), 511 185 Draper v. Snow, 80 N. Y., 331; 75 Am. Dec, 408 471 Drake v. Found, etc.. Mining Co., 53 Fed. R., 474 469 Drake v. Rogers, 32 Me., 524 165 Dreilling v. First Nat. Bk., 43 Kans., 197 441, 444 Drayton v. Dale, 2 Barn, etc., 293 232 Drum V. Drum, 133 Mass., 566 401 Drenian v. Bung, 124 111., 175 299 Dumont v. Williamson, 18 Ohio St., 515 311, 319, 437 Dufaur v. Openden, 7 M. and R., 90 185, 186, 299 Dunavan v. Flynn, 118 Mass., 537 183, 187, 200 Dullea V. Emery, 2 A. & D., 506 92 Duke V. Clark, 58 Miss., 466 254 Durnford v. Patterson, 7 Mash. (La.), 460 105 Dubric v. Voss, 19 La., 5 ; Andrew, 210 258 Duncan v. Scott, i Camp., 100. 4^1 Dun V. Weston, 71 Me., 270 44^ Dugan V. U. S., 3 Wheaton, 172 252, 305 Dugan V. Lewis, 79 Tex., 246 333 Durton v. Benson, 7 P. Wm., 497 253 Dunkle v. Nichols, loi Md., 474 106 Dimscomb v. Bunker, 2 Mete, 8 4^5 Durant v. Bunta, 5 Dutch (N. J.), 623, 635 294 Dwight V. Newell, 15 111., 333 ^3^ Dykers v. Leather Bk., 1 1 Paige, 612 452 Dye V. Scott 259 624 TABLE OF CASES. Eagle Bank v. Smith, 5 Conn., 71 319 Eagle V. Kohn, 84 111., 292 420 Easton v. Hyde, 13 Minn., 90 87 East London & Co. vs. Bailey et al., 4 Bing., 283 129 Earthart v. Gant, 32 la., 481 445 Eastman v. Commonwealth, 4 Gray, 416 458 Eastern R. R. Co. v. Benedict, 5 Gray, 561 162 Easterly v. Barber, 66 N. Y., 443 293 Eckhert v. Ellis, 26 Hun., 663 445 Edwards v. Davenport, 20 Fed. Rep., 756 124 Edis V. Bury, 6 B, & C, 407 57, 119 Edgerton v. Edgerton, 8 Conn., 66 67 Edis V. Bury, 6 B. & C, 433 57 Edwards v. Brown, i C. & J., 312 415 Edie V. East India Co., 2 Burr., 1221 298 Eeron v. Harrison, 3 T. R., 759 (1790) 328 Ehricks v. DeMill, 75 N. Y., 370 '. 88 Ekins V. The East India Co., 7 P. Wms., 395 334 Ellsworth V. Harmon, loi 111., 274 472 Eldrhd v. Mallory, 2 Colo., 320 81 Ellison V. Collinridge, 9 C. B., 570 85, 182 Ellsworth V. St. Louis R'y Co., 98 N. Y., 553 128 Ellis V. Ohio Ins. Co., 4 Ohio, 628 230, 232 Ellis V. Wild, 6 Mass., 321 316, 318, 319, 327 Ellis V. Ruren, 29 Me., 434 327 Ellis V. Mason, 7 Dowl., 598 72 Ellis V. Einnegan, 37 Minn., 145 445 Ellis and Morton v. O. L. Ins. & Tr. Co., 4 Ohio St., 628. . 314 Empire Transportation Co. v. Wallace, 68 Pa. St., 302 459 Emigrant Company v. Clarke, 47 la., 671 86 Epler V. Eunk, 8 Barr., 468 437 Erwin v. Downs, 15 N. Y., 575 282, 311 Ernst V. Steckman, 74 Pa. St., 13 81, 82 Erchelberger v. Old Nat. Bank, 103 Ind., 401 419 Emery v. Irving Nat. Bk., 25 Ohio St., 255 460 Ernly v. Lye, 15 East, 7 162 Erwin v. Down, 15 N. Y., 575 327 Espy V. Cincinnati First Nat. Bk., 18 Wall., 604 182 Estes V. Tower, 102 Mass., 65 104 Esdaile v. Sowerby, 11 East, 117 350 Esterly v. Barber, 66 N. Y., 433 300 TABLE OF CASES. 625 Evansville Nat. Bk. v. Kaufman, 93 N. Y., 273 471 Evans v. Underwood, i Willis, 262 79, 102 Evans v. Speer Hardware Co., 45 S. W. Rep., 370 (1888), (Ark.), 172 Everhart v. Puckett, 73 Md., 409 168, 429 Evans v. Anderson, 78 111., 558 334 Evans v. Foreman, 60 Mo., 449 399 Ex-parte Henderson, 4 Ves., 163 124 Exchange Bank v. Rice, 98 Mass., 288 214 Exchange Bank v. Hubbard, 62 Fed., Rep., 112 214 Ex-parte Swan, 7 C. B., N. S., 445; E. C. L. R., vol. 97. . . . 410 Ex-Parte Clarke, 3 Brown's Ch., 238 310 Farwell v. Ensign, 66 Mich., 600 239 Fane v. Gregory, 42 111., 416 153 Fake v. Smith, 2 Abb. (N. Y.), App., 76 322 Farina v. Gabell, 89 Pa. St., 89 420 Fay V. Smith, i Allen, 477 405 Paris V. Wells, 68 Ga., 604 250 Farmers' Nat. Bk. v. Sutton & Co., Fed. R., 191 91 Fanning v. Cousequa, 17 Johns., 511 334, 47° Fairbanks v. Metcalf, 8 Mass., 230 i53 Fairclough v. Pavia, 9 Ex., 690 445 Fancourt v. Thorne, 9 A. & E. (58 E. C. L ), 312 89 First Nat. Bk. v. Carpenter, 41 la., 578 47^ Farmers' Bank vs. Wasson, 48 la., 338 462 Farsen v. Hubbard, 55 N. Y., 465 258 Farmer v. Perry, 70 la., 358 47^ Fenno v. Gay, 146 Mass., 118 105, 313, 330 Fenner v. Mears, 2 Blak. Rep., 1269 209 Fell V. Cook, 44 la., 485 43i Ferris v. Bond, 4 Barn. & Aid., 697 78 Fearing v. Clark, 16 Gray, 74 i5,3 Fernandey v. Glynn, i Camp., 426. 202 Fennings v. Brown, 9 Mees & W., 496 298 Fetters v. Muracie Nat. Bk., 34 Ind., 251 300 Fenny v. Fowler, 2 Strange, 946 3^ Featherstone v. Hutchison 425 Fegley v. McDonald, 89 Pa. St., 128 45° Penning v. Napanee Brush Co., Canada Law Jour., Vol. 20, No. 19 287 First Nat. Bk. v. Bynum, 84 N. Car., 24 92, 102 626 TABLE OF CASES. Fisher v. Fisher, 98 Mass., 303 151 Fisher v. Leslie, i Esp., 425 66, 72, 73, 462 Fisher v. Rieman, 12 Md., 497 327 Fisher v. State Bank, 7 Black., 610 107 Field V. Nickerson, 13 Mass., 131 312 Finley v. Shirley, 7 Mo., 42 6S Fisk V. Cox, 18 Johns, 145 169 Fielder v. Marshall, 9 C. B. N. S., 606; E. C. L. R., Vol. 99. . 114 Fisk V. First Nat. Bk., 42 Mich., 203 311 Urst Nat. Bank v. Clark, 61 Md., 401 185 First Nat. Bk. v. Leach, 52 N. Y., 350 452 First Nat. Bk. v. Slaughter, 98 Ala., 602 78 First Nat. Bk. v. Fowler, 36 Ohio St., 524 i6j First Nat. Bk. v. Larsen, 90 Wis., 206 93, 211 First Nat. Bk. v. McAllister, 46 Mich., 397 172 First Nat. Bk. of Brooklyn v. Slette, 69 N. W. Rep., 1148, Minn 87 First Nat. Bk. etc. v. Greenville Nat. Bk., 84 Tex., 40 87 First Bank v. Burkham, 32 Mich., 328 240 First Nat. Bk. v. Payne, 1 1 1 Mo., 291 225 First Nat. Bk. v. Needham, 29 Iowa, 249 443 First Nat. Bk. v. First Nat. Bk., 76 Ind., 561 298 First National Bank v. County Commissioners, 14 Minn., "JJ (100 i\m. Dec, 196) 285 First Nat. Bank v. Crabtree, 86 Iowa, 731 282 Fitzgerald v. Reed, 9 Sand. M. (Miss.), 94 124 Field V. Tibbetts, 57 Me., 359 104, 443 Fletcher v. Thompson, 55 N. H., 208 89 Flenry v. Tufts, 25 111. App., loi 78 Floyd Acceptances, 7 Wall., 679 130 Flint V. Flint, 6 Allen, 36 332 Fleckner v. Bank, 8 Wheat., 360 257 Flowers v. Billing, 45 Ala., 488 160 Foster v. Mackinnon, 4 Common Pleas, 704 174, 408 Forward v. Thompson, 12 Upper Canada, 103 72 Folger V. Chase, 18 Pick., 63 256, 277 Foltier v. Schroeder, 19 La. Ann., 12 312 Foreman v. Beckwith, 78 Ind., 575 251 Fort Dearborn v. Carter, 152 Mass., 34 200 Forbes v. Epsy, 2 1 Ohio St. , 474 152 Foster v, Shattuck, 2 N. H. , 446 119 Fov V. Blackstone, 31 III, 538 153 Ford V. Phillips, 83 Mo., 530 442 Foster v Fuller, 6 Mass ,58 131 TABLE OF CASES. 627 Ford V. Beech, 1 1 Adolph. & E, , 854 169 FoUett V Moore, 4 Ex. ,416 89 Fordyce v. Nelson, 91 Ind. , 448 332 Fourth Bk. v. Heuschen, 52 Mo., 207 382 Ford V. Hopkins, i Salk., 2^3, 284 35, 37, 40 Forbes v. Epsy, 21 Onio St., 474. 152 Foster v. Shattuck, 2 N. H., 446 iig Foy V. Blackstone, 31 111., 538 153 Ford V. Phillips, 83 Mo., 530 442 Foster v. Fuller, 6 Mass., 58 131 Ford V. Beech, 11 Adolph. & E., 854 169 Follett V. Moore, 4 Ex., 416 89 Fordyce v. Nelson, 91 Ind., 448 332 Fourth Bk. v. Heuschen, 52 Mo., 207 382 Ford V. Hopkins, i Salk., 283, 284 35> 37. 40 Fowler v. Brantly, 14 Pet., 318 437 Frank v. Lilienfield, 33 Gratt. (Va.), 377 126, 431 French v. Turner, 15 Indiana, 59 355, 256, 277 Frazier v. Tray Printing Co., 24 Hun., 281 165 Freeman v. Exchange Bk., 87 Ga., 45 298 Frank v. Wessels, 64 N. Y., 155 87, 454 Frank v. Quast, 86 Conn., 649 300 Priedlander v. Texas Ky. Co., 130 U. S., 416 41, 460 Freed v. Brown, 55 Ind., 310 124 Franklin Bk. v. Lynch, 52 Md., 270 214 Freeman v. Boynton, 7 Mass., 483 339, 344, 357 Frank v. Lanier, 91 N. Y., 112 3fi Pranklin vs. March, 6 N. H., 364 68, 72 Franklin Bk. v. Freeman, 16 Pick., 535 452 Freeman's Nat. Bk. v. National Tube Works, 151 Mass., 413. 29S Freeman'sBank v. Puckman, 16 Grat, 126 469 Fullerton v. Hill, 48 Kan., 558 275 Fullerton v. Sturges, 4 Ohio St., 529 401 Fuller V. Smith, i C. & P., 197 236 O- Garrald v. Haddan, 17 P. F. Smith (Pa.), 82. . . . 405, 406, 407 Gates V. Parker, 43 Me., 544 183 Gardner v. Moxey, 9 B. Mon., 90 429 Gardner v. Walsh, 5 El. & Bl., 83 399 Gale V. Kemper, etc., 10 La., 208 34^ Gates V. Beecher, 60 N. Y., 578 380, 382 Garland v. Scott, 15 La. An., 143 1^ 628 TABLE OF CASES. Garrard v. Lewis, 47 L. T., Rep., 408 403 Gamble v. Grimes, 2 Carter (Md.), 392 423 Gay V. Rooke, 151 Mass., 115 69 Garnet v. Clark, 1 1 Mod., 226 167 Gaar v. Louisville Banking Co., 11 Bush. (Ky.), 182. ... 92, 93 Garrigus v. Home & Society, 3 Ind. App., 91 106 Gayno v. Samuel, 14 Ohio, 592 126 Gale V. Miller, 54 N. Y., 536 247 Galton V. Taylor, 7 T. Rep., 475 429 Gallagher v. Nicholas, 60 N. Y., 438 182 Garland v. Salem Bank 236 Gage V. Mechanics' Bank, 79 111., 62 472 German-American Nat. Bk. v. People's Gas & E. Co., (Minn.), 65 N. W. R., 90 151, 153 Geary v. Physic, 5 Barn. & Co., 234 47, 161, 277, 278 George v. Surrey, i Mood. & Malk, 516 278 Gettysburg Bk. v. Chisolm, 169 Pa. St., 564 399 Germania Bank v. Distler, 67 Barb., 333 165 German Mut. Ins. Co. v. Franck, 22 Ind., 364 103 Geddings v. Byington, 2 Ohio 228 Geralupolo v. Wieler, 10 C. B., 690 367 Gee V. Saunders, 66 Tex., 333 441 German Nat. Bk. v. Studley, i Mo. App., 260 301 Giles V. Bourne, 6 M. & S., 74 164, 165 Gilson V. Miller, 29 Mich., 355 445 Gibson v. Minet, I Hen. Bla 43 Gilmore v. Hirst, 56 Kans., 626 93 Gilliban v. Meyers, 31 III., 525 57, 81, 89 Gibson V. Powell, 6 How. (Miss.), 60 226 Gilbert v. Denins, 3 Mete, 495 360 Gilman v. Peck, 11 Vt., 576 458 Gilman v. New Orleans etc., 'J2. Ala., 566 151 GifEord v. Hardell, 88 Wis., 538; 43 Am. St. Eep., 925 451 Gibson v. Smith, 75 Ga., 33 195 Gill V. Cubit, 3 Barn. & Cress., 466 438, 440 Givens v. Merchants' Bank, 85 111., 443 293 Gould V. Seger, 5 Duer. (N. Y.), 268 144, 148 Goodman v. Simonds, 20 How., 343 153, 437, 439, 440 Goodman v. Harvey, 4 Adol. & Ellis, 870 361, 438, 440, 445 Gorgerat v. McCarty, 2 Dal., 144 307 Gore V. Gibson, 13 Mees. & W., 623 433 Gorgier v. Mieville, 3 Barn. & Cres., 45 440 Gorves v. Guby, 24 Ind., 418 332 Goldman v. Blum, 58 Tex., 636 332 TABLE OF CASES. 629 Gompertz v. Bartlett, 24 Eng. L. & E. Rep., 156 318, 319, 331, 322 Gould V. Segee, 5 Duer, (N. Y.), 268 144, 148 Gordon v. Adam, 127 111., 223 150, 151 Goss V. Nelson, i Burr., 226 78, 79, 102, 103 Gordon v. Parmelee, 15 Gray, 413 104 Goodsell V. Meyers, 3 Wend., 479 273 Goetz V. Bank, 1 19 U. S., 556 232 Gorman v. Ketchum, 33 Wis., 427 226 Goodrich vs. DeForest, 15 Johnson, 6 199 Goddin v. Shipley, 7 B. Mon., 577 469 Gould V. Courbs, i C. B., 543 72 Goddard v. Lyman, 14 Pick., 268 437 Goodwin v. Robarts, L. R. 10, Ex. 76 21 Goupy V. Harden, 7 Taunton, 159,16^ 314 Goodwin v. Davenport, 47 Me., 112 312 Green v. Burroughs, 47 Mich., 70 472 Green v. Keel, 2 Hun., 486 133 Greenaugh v. Balch, 7 Greenl. Rep., 462 423 Griffin v. Hartz, 94 N. C., 440 442 Graham v. Larimer, 83 Cal., 179 446 Graves v. Mining Co., 81 Cal., 325 462 Graves v. American Bank, 17 N. Y., 205 247 Graul v. Strutzel, 53 Iowa, 712 3(2 Greenwich, etc., Co. v. Oregon, etc., Co., 76 Hun., 194. ... 381 Groth V. Gyger, 31 Pa. St., 271 382 Graham v. Robertson, 79 Ga., 72 330 Greatrake v. Brown, 2 Cranch C. C, 541 382 Green v. Thompson, 33 la., 293 472 Grattair v. Wiggins, 23 Cal., 16 330 Green v. Shepherd, 5 Allen, 589 168 Grant v. Ellicott, 7 Wend., 227 167 Grant v. Da Costa, 3 M. & S., 351 168 Grant v. A^aughn, 3 Burr., 15, 16 120, 438 Grange v. Reigh, 93 Wis., 552 450, 451 Gray v. Milner, 8 Taunt., 739 119, 197. 198, i99 Green v. Warnick, 64 N. Y-, 220 253 Gray v. Worden, U. C. Q. B., 535 ^ 85 Griffin v. Goff, 12 Johns, 423 104, 381 Grand Gulf Bank v. Wood, 12 S. & M., 482 251 Gridley v. Bane, 57 111., 529 417 Greefield Savings Bank v. Stowell, 123 Mass., 203 407 Green v. S. Kipworth, i Phil., 53 48 Gray v. Bowden, 23 Pick., 282 69, 73 630 TABLE Ol'' CASES. Green v. Davis, 4 B. & C, 235 50, 71, 72 Green v. Raymond, 9 Neb., 298 195 Gregg V. Beane, 69 Vt., 22 450, 451 Greeneaux v. Wheeler, 6 Tex., 522 304 Grocers' Bk. v. Penfield, 69 N. Y., 502 300 Green v. Wilkie, 66 N. W. Rep., 1046 147 Graff V. Logvie, 61 Towa, 704 153 Grafton Bank v. Doe et al., 19 Vt., 463 187, 284, 290, 292 Gurney v. Wamersley, 4 El. & BL, 132 314, 319, 372 Gurney et al. v. Wamersley, 24 L. J., I. B., 46 318 Gulick V. Grover, 33 N. J: L., 463 301 Gum V. Tyne, 4 B. & S., 680, 713; E. C. L., vol. 116 410 Guy V. Harris, i Esp., 245 66 Guthrie v. Murphy, 4 Watts (Pa.), 80 430 Gordon v. Rundlet, 28 N. H., 435 69, 72, 84 Good V. Martin, 95 TJ. S., 90 275, 471 lEa: Hay V. Ayling, 16 Q. B., 431 420, 428 Flawkins v. Cardee, Salk., 65 192 Hall v. Toby, no Pa. St., 318 105, 257 pjall V. Farmer, 5 Denio, 484 167 Hall V. Fuller, 5 Barn. & Tress., 750. . .■ 234 Flale V. Danforth, 46 Wis., 555 293 Hammond v. Hastings, 134 U. S., 401 ; . . . . 462 Flarrop v, Fisher, 30 N. J. L , 283 447 Hazard v. Bank, 72 Ind., 130 282 Hawey v. Towers, 6 Exch., 656 427 Harraner v. Doane, 12 Wall., 342 428 Flaven v. Grand Junction R. R. Co., 109 Mass., 88 4.S5 Harker v. Anderson, 21 Wend., 372 450 Harvey v Towers, 6 Ex., 656 41 1 Hall V. Wilson. 16 Barb , 548 149, 418 Hasey v. White Pigeon Co., 7 Doug. (Mich.), 193 184 Hance v. Miller, 21 III, 636 296, 297 Hall V. First Nat. Bk 183 Flammond v. American Mut. Life Ins. Co., 10 Gray, 307. . . . 108 Hague V. French, 3 B. & P., 173 163, 164 Flassman v. Holscher, 49 Mo., 87 151 Haight V. Naylor, 5 Daily, 219 133 Flathaway v. Payne, 34 N. Y., 92 150 Hailey v. Falconer, 32 Ala., 536 322 Harris v. Bradley, 7 Yerg. (Tenn.), 310 311 TABLE OF CASES. 63 1 Hannum v. Richardson, 48 Vt., 508 319, 320 Harrison v. McKim, 18 Iowa, 485 259 Hageman v. Moon, 131 N. Y., 462 73 Hart's Appeal, 32 Conn., 539 62 Hamilton v. Spottiswoode, 4 Exch., 200 55 Hanks v. Brown, 79 la., 560 417 Harrow v. Dugan, 6 Dana (N. Y.), 341 61, 68 Hammond v. Colls, i C. B., 916 280 Harvey v. Carchbold, i Ryan & Moody, 184 Hatch V. Barrett, 34 Kan., 230 257 Hardy v. Merriweather, 14 Md., 203 129 Hardy v. Waters, 38 Me., 450 122 Hawshaw v. Rawlings 189 Ham V. Smith, 87 Pa. St., 63 428 Haywood v. Seeler, 61 la., 574 442 Harmer v. Dipple, 31 O. St., 72 121 Hartley v. Rice, 10 East, 22 429 Harlow v. Roswell, 15 111., 56 120 Harvey v. Kay, 9 B. & C, 364 119 Haly V. Lane, 2 Atk., 181 125 Havens v. Griffin, Chip., 42 213 Hall v. Ste J, 68 III, ,231 187 Haines v. Dubois, 30 N. J. L,, 259 276 Hawkins v. Cardy, i Ld. Raym., 360 257, 332 Hanover Nat. Bk. v. Johnson, 90 Ala., 549 333 Harrison v. Harrison, 8 Ves., 186 278 Harry v. Perrit, i Salk., 134 381 Hansard v. Robinson, 7 Barn. & Cres., 90 344, 351, 353 Hamerton v. Mackrell 374. 378 Hartford Fire Ins. Co. v. Wilcox, 57 111., 180 132 Hayes v. Caulfield, 5 Q. B., 81 282 Hayland v. Blodgett, 9 Or., 166 84 Hays v. Gwin, 19 Ind., 19 81 Hartley v. Wilkinson, 4 Campb., 127 81 Hayly v. Lane, 2 Alk., 182 169 Hatch v. Trayes, 1 1 Ad. & E., 702 167 Hart V. Stickney, 41 Wis., 630 io3> 443 Haussonllier v. Hartsnick, 7 D. & E., 733 102 Hastings v. Thompson, 54 Minn., 184; 55 N. W. Rep., 968 93. 94 Harris Mnfg. Co. v. Anfinson, 31 Minn., 182 91 Hamilton Gin Co. v. Sinker, 74 Tex., 52 91 Haddock V. Woods, 46 la., 435 ^^' ^7 Harrison v. Sager, 27 Mich., 476 108 632 TABLE OF CASES. Hasbrook v. Palmer, 2 McLean, 10 85 Handyside v. Cameron, 21 111., 588 132 Hanes v. Kerrison, 2 Taunton, 323 105 Hawley v. Bingham, 6 Or., jd 82 Healey v. Gorman, 3 Green, 328 465 Henrietta Nat. Bk. v. State Nat. Bk., 80 Tex., 648 452 Hersey v. Ellicott, 67 Me., 527 431 Herrick v. Wolverton, 41 N. Y., 581 443 Hewitt V. Jones, 72 111., 218 417 Hess V. Culver (Mich.), 43 N. W. Rep., 994 417 Hereth v. Merchants' Bk., 34 Ind., 380 446 Heilbut V. Nevil, 4 L. R. C. P., 358 332 Herring v. Woodhull, 29 111., 92 276 Helmer v. Com. Bank, 44 N. W. Rep., 482 277 Heylyn v. Adamson, 2 Burrows, 669 310, 370, 381 Hemmenway v. Stone, 7 Mass., 58 268 Heuschel v. Mahler, 3 Denio, 428 85 Hetherington v. Nixon, 46 Ala., 297 125 Helmer v. Krolick, 36 Mich., 371 81 Herman v. Nash, 8 Minn., 407 199 Henetrtematte v. Morrie, 28 Hurr., JJ 247 Herrick v. Whitney, 15 John., 240 237 Hegeman v. Moon, 131 N. Y., 462 462 Heffron v. Hanford, 40 Mich., 305 301 Helper v. Alden, 3 Minn., 332 51 Hill V. Shields, 81 N. C, 250 253, 322 Hill V. Todd, 29 111., 103 93 Hill V. Henry, 17 Ohio St., 9 - 106 Hitchings v. Edmands, 133 Mass., 338 105, 330 Hirschfield v. Fort Worth Nat. Bank, 83 Tex., 452; 18 S. W. Rep., 743 105 Hill V. Caillone, i Ves. Sr., 122 253 Hinman v. Woodruff, 11 Vt., 582 425 Hinds V. Chamberlain, 6 N. H., 225 425 Hill V. Wilson, 16 Barb., 548 150 Hilborn v. Alford, 22 Cal, 482 160 Higgins V. Pitt, 4 Exch., 324 423 Higgins V. Bullock, 66 111., 37 255 Hillsdale College v. Thomas, 40 Wis., 6 144 Hitchcock V. Buchanan, 105 U. S., 416 162 Hilton V. Houghton, 35 Me., 143 154 Hilborn v. Artus, 3 Scam., 344 328 Holmes v. Hooper, Bay, 158 303 Holmes v. Roe, 62 Mich., 199 451 TABLE OF CASES. 633 Holmes v. Trumper, 22 Mich., 427 407 Horn V. Readfearne, 2 Bing., 433 70 Hoyt V. Lynch, 2 Sandf ord, 32 8 55 Horn V. Newton, etc., Bk., 32 Kan., 518 399 Howe V. Hartness, 11 Ohio St., 449 72 Howard v. Ives, i Hill, 263 367 Holland v. Barnes, 53 Ala., 83 433 Holland v. Moody, 12 Ind., 170 125 Holt V. Ross, 54 N. Y., 472, 475- 232 Hartsman v. Henshaw, 11 How., 177 232 Holmes v. Jacques, i Q. B. L. R., 376 120 Horn V. City Bank, 33 Kan., 518 127 Howland v. Edmonds, 24 N. Y., 307 103 Howe V. Hartness, 1 1 Ohio St., 449 87 Howe V. Wildes, 34 Me., 566 431 Holcomb V. Beach, 112 Mass., 450 328 Hoare et al. v. Cazenove et al., 16 East, 391 222, 227 Houck V. Graham, 123 Ind., 277 474 Hosstatter v. Wilson, 36 Bar., 307 84, 89 Hotel Co. vs. Bailey, 64 Vermont, 137; 24 Atl. Bep., 136 282 Hotchkiss V. National Bank, 21 Wall., 354 440 Horton v. Arnold, 17 Wis., 139 84 Houghton V. Francis, 29 111., 244 91 Hodges V. Shuler, 22 N. Y., 1 14 78, 84, 89 Hogue V. Williamson, 85 Tex., 553 88 Hook V. Pratt, 78 N. Y., 371 298 Howe V. Bradley, 19 Me., 31 285 Huyck V. Meador, 24 Ark., 191 72 Humphreys v. Allen, loi 111., 490 461 Hunt V. Divine, 37 111., 137 72 Hunt V. Knickerbocker, 5 Johns., 327 423 Huse V. Hamblen, 29 la., 501 85 Hunt V. Adams, 5 Mass., 358 267 Hunt V. Standard, 15 Ind., 33 469 Hutchins v. Flintge, 2 Tex., 473 260 Hudson v. Wolcott, 39 Ohio St., 618 259 Hull V. Meyers, 90 Ga., 674 3^9 Hughes V. Keddell, 2 Bay (S. Car.), 324 257 Hunter v. Wilson, 4 Ex., 489 494 Husband v. Egling, 81 111., 172 78 Hurd V. Dubuque Bk., 8 Neb., 10 9^ Huie V. Bailey, 16 La., 213 305 Humphreyville v. Culver, 73 111., 485 295 H'nckley v. Union P. R. R., 129 Mass., 61 442 634 TABLE OF CASES. Hussey v Winslow, 59 Me., 170 462 Hyde v. Goodnow, 3 Comst., 369 470 In re King's Estate, 94 Mich., 411, 425; 54 N. W. Rep., 178 105, 330 Ingham v. Primrose, 7 C. B. N. S., 82; E. C. L. R., vol. 97. . . 147, 148, 410, 412, 418, 419 Insurance Co. v. Shamburg, 2 Martin, 513 363 Insurance Co. v. Kiger, 103 U. S., 352 461 Lines V. Dunlop, 8 Term. Rep., 595 209 Ingraham v. Bladwin, 9 N. Y., 45 124 In re Taylor, 8 D. M. & G., 254 124 In re Howes, 3 O. B., 628 124 Ingraham v. Disborough, 47 N. Y., 421 253 Irvine v. Lowry, 14 Pet., 293 (85) 87 Israel v. Douglas, i H. Blac, 239 210 Israel v. Israel, i Campb., 499 66, 72, 73, 462 J Jackett V. Spencer, 29 Barb., 180 105 Jackson v. First Nat. Bk., 42 N. J. L., 177 300 Jacobs V. Mitchell, 46 Ohio St., 601 ; 22 Ohio Law. J., 388. . . 417 Jardine v. Payne, i B. & Ad., 671 405 Jackson v. Duchaine, 3 T. Rep., 551 429 Jackson v. Hudson, 2 Camp., 447 198 Jacquin v. Warren, 40 111., 459 70, 72 Jarvis v. Wilkins, 7 M. & W., 410 71 Jackson v. Henry, 10 Johnson, 184 416 Jennings v. Bank, 22 Pac. Rep., "jjj 78 Jefferies v. Austin, i Strange, 674 'J7 Jeffries v. Evans, 6 B. Mon., 119 253 Jeffery v. Walton, i Stark, 267 «iI8 Jenkins v. Bass, 88 Ky., 397 118 Jenny v. Hale, 8 Mod., 265 11 Jenny v. Eerie, 2 Ld. Raym., 1361 78, 79, 100 Jerome v. Whitney, 7 Johnson; 321 85 Jeune v. Ward, 2 Stark, 326 184, 200 Jenys v. Fawler et al., 2 Strange, 946 (1732) 230, 233 Jennison v. Stafford, i Gush., 168, 170 168 Jester v. Hopper, 8 Eng. (Ark.), 43 119 Jones V. Nicholl, 82 Gal., 32 330 TABLE OF CASES. 635 Jones V. Waite, 35 E. C. L., 130 423, 425 Jones V. Dow, 143 Mass., 130 '. 472 Jones V. Shaw, 67 Mo., 667 82 Jones V. Council Bluffs Bank, 34 111., 313 183 Jones V. Brown, 1 1 Ohio St., 601 105 Jones V. Fales, 4 Mass., 245 87 Jones V. Ryde, 5 Taunt, 488 319, 236, 237, 325, 335 Jones V. Raditz, 27 Minn., 240 92 Jones V. State, 40 Ark., 347 84 Johnson v. Harvey, 84 N. Y., 363; 38 Am. Kep., 515 474 Jchnson v. Frisbie, 15 Mich., 286 90 Johnson v. Speer, 92 Pa. St., 227 Qi, 93 Josselyn v. Ames, 3 Mass., 274 266 Jordon v. Tate, 19 Ohio St., 586 106 Johnson v. Sutherland, 39 Mich., 579 168 Johnson v. Collins, 1 East., 98 207, 319 Jordon v. Gillen, 44 U. S., 424 250 Johnston v. May, 76 Ind., 293 399 Johnson v. Way, 37 Ohio St., 374 434, 441, 445 Jordon v. Downs, 9 Rob., 265 260 Johnson v. County of Stark, 24 111., 75 455 Johnson v. Griest, 85 Ind., 503 73 Jordan v. Hurst, 12 Pa. St., 269 302 Johnson v. King, 20 Ala., 270 161 Jccelyn v. Le Sene, 10 Mod., 294, 316; 2 Ld. Raym., 1362; 8 Mod., 364 77, 100, 192 Johnson v. Johnson, Minor (Ala.), 263 61, 68 Johnson V. Mitchell, 50 Tex., 312 358, 395, 396, 297, 298, 306 Johnson v. Donnell, 90 N. Y., i 298 Johnson Harvester Co. vs. McLean, 57 Wis., 258 403, 407 Jchnson v. Laflin, 103 U. S., 804 462 Johnson v. Henderson, 76 N. Car., 227 86 Julian v. Shobrooke, 2 Wilf., 9 lo^ Judah V. Harris, 19 Johns., 144 85 Kaufman v. Robey, 60 Tex., 308; 48 Am. Rep., 266 446 Kaufman v. Bank, 41 Miss., 212 469 Kayser v. Hall, 85 111., 511 120 Keyes v. Fenstermaker, 24 Col., 329 105 Kenyon v. Wilhams, 19 Ind., 45 132 Kessler v. Hall, 64 N. C, 60 131 Kemworth v. Sawyer, 125 Mass., 29 125, 282 636 TABLE OF CASES. Kenton Ins. Co. v. McClellan, 43 Mich., 564 125 Keenam v. Nash., 8 Minn., 409 129 Kempson v. Saunders, 4 Bing., 5 325 Kern v. Von Phul, 7 Minn., 74. 259 Kendall et al. v. Galvin, 15 Maine, 131 174 Kemper v. Corner, 73 Tex., 201 445 Kellogg V. Curtis, 69 Me., 212 44.5 Kelly V. Whitney, 45 Wis., no 104, 443 Kenston Ins. Co. v. McClellan, 43 Mich., 564 431 Kipner v. Kelfer, 6 Watts., 231 423 Ketcham v. Duncan, 96 XJ. S., 657 454 Kemp V. Klaus, 8 Neb., 24 92 Kelly V. Brookland, 4 Hill, 263 89 Kelly V. Burroughs, 102 N. Y., 93 300 Kedlich v. Dall, 54 N. Y., 234 152 Kennedy v. Geddes, 3 Ala., 581 183 King V. Cole, Holt's Rep., 360 i2i Kirk V. Burton, 9 M. & W., 284 127 Kirkman v. Benham, 28 Ala., 501 131 King V. Thorn, i Term R., 489 131 Kinderly v. Jervis, 22 Beav., 31 251 Kingsland v. Koeppe, 137 111., 344 275 Kimball v. Huntington, 10 Wend., 675; 25 Am. Dec, 590. . 68, 72, 167 Kirkpatrick v. Taylor, 43 111., 207 73, 169 Killam V. Schoeps, 26 Kan., 310 78 Kitchen v. Londenback, 48 Ohio St., 177 417 Krig V. Nichols, 138 Mass., 20 444 Kingsbury v. Fleming, 66 N. C, 524 428 Kinyon v. Wohlford, 17 Minn., 239; 10 Am. Rep., 165. . . . 144, 153, 418 Kinney v. Lee, 10 Tex., 155 57 Kingman v. Pierce, 17 Mass., 247 331 Knight V. McReynolds, 37 Tex., 204 82 Kingsford v. Merry, 11 Ex., 577 410 Kimbro v. Bank of Fulton, 49 Ga., 419 458 Kilgore v. Bulkley, 14 Conn., 383 61, 73 Kilgore v. Demsey, 25 Ohio St., 413; 18 Am. Bep 334, 463 Kingston v. Long, M. 25 G., 3 B. R. Bayley's Bills of Ex- change, 71 102 Kirkham v. Boston, 67 111., 599 259 King V. Sarria, 69 N. Y., 24 334 King V. Fleming, 72 111., 21 154 Klauber v. Biggerstaff, 47 Wis., 551 87 TABLE OF CASES. g^y Knox V. Clifford, 38 Wis., 651 ^5- Knight V. Jones, 21 A/[ich., 161 '..".'..'.'.." 118 120 Kost V. Bender, 25 Mich., 515 445'^ 44Q Kohn V. Watkins, 26 Kan., 691 '1^2 Kuler V. Williams, 49 Ind., 504 2t;c; Kuntz V. Temple, 48 Mo., 75 ....'.'..'. 105 Kulenkamp v. Groff, 71 Mich., 675 V. 259 Lacy V. Holbrook, 4 Ala., 18 87 Lansing v. Gaine, 2 Johns., 300 3^3 Lambert v. Pack, i .Salk., 127 ^79 Lamb v. Matthews, 41 Vt., 42 (1868) 328 Lawson v. Farmers' Bk., 1 Ohio St., 206 367 Lane v. Stacy, 8 Allen (Mass.), 41 (1864) 273 Lambert v. Oakes, i Ld. Raym., 443 313, 373, 378, 3S1 Lawrence v. Russell, yy Pa. St., 460 247 Lancaster Bk. v. Taylor, 100 Mass., 18 447 Lawson v. Weston, 4 Esp., 26 440 Lay V. Wissman, 36 la., 305 444 Lafayette Bk. v. Ringell, 51 Ind., 393 72 Lawson V. Weston, 4 Esp., 56 445 Latham v. Smith, 45 111., 25, 27 418 Larrusse v. Barker, 3 Wheat., loi 471 Lamed v. Johnson, 9 Allen 133 Laird v. Warren, 92 111., 204 91 Larsen v. Breene, 12 Colo., 480 453 Lambert v. Pack, i Salk., 127 313 Lancaster v. Baltzell, 7 G. & J., 468 258 Lawrence v. Furrell, yy Pa. St., 460 307 Laird v. Davidson. 124 Ind., 412 278 Lane v. Stacey, 8 Allen (Mass.), 41 294 Leavitt v. Putman, 3 N. Y., 494; 53 Ai . Dec, 322 298, 302, 312, 333 Lewis V. Dunlap, 72 Mo., 178 258, 259 Lehigh Coal & Iron Co. v. West Superior Iron & Steel Co., 91 Wis., 221 152 Lewis V. Long, 102 N. C, 206 | 259 Legg V. Thorpe, 12 East., 171 369 Leroux v. Brown, 12 C. B., 801 334 Lunt V. Silver, 5 Mo. App., 186 399 Lefty V. Mills, 4 T. R., 170 381 Lexington v. Butler, 81 U. S., 14 128 638 TABLE OF CASES. Legett V. Jones, 10 Wis., 34 93 Lewis V. Tipton, 10 Ohio St., 88 80, 106 Lean v. Lozardi, 27 Mich., 424 165 Levi V. Latham, 15 Neb., 509 127 Leonard v. Mason, i Wend., 522 78, 177 Lee V. Bank, 45 Kan., 8 127 Levi V. Earle, 30 Ohio St., 147 126 Lewis V. Parke, 4 Ad. & EL, 838 i6(; Lester v. Paine, 39 Barb., 616 275 Lee V. Pile, 37 Ind., 107, no 258, 322 Levis V. Young, i Mete. (Ky.), 197 119 Leonard v. Vredenburgh, 8 Johns., 29 47 r Lee V. Selleck, 33 N. Y., 615 470 Lenox v. Prout, 3 Wheat., 524 472 Leitch V. Wells, 48 N. Y., 586, 613 462 Lester v. Garland, 15 Ves., 248 107 Lee V. Balcom, 9 Colo., 216 "ji Lee V. Wyse, 35 Conn., 384 61 Lewis V. Clay, 42 Solicitor's Journal, 151 416 Leonard v. Wilson, 2 C. & M., 589 331 Little V. Slackford, i M. & M., 171 56, 57, 73 Little V. O'Brien, 9 Mass., 423 308 Livingston v. Dean, 2 Johns. Ch., 479 254 Lindley v. First Nat. Bk., 76 Iowa, 630 185, 214 Livingston v. Dean, 2 Johns. Ch., 479 254 Little V. Phoenix Bk., 2 Plill., 425 383 Livingston v. Roosevelt, 4 Johnson, 251 126 Libbey v. Mikeborg, 28 Minn., 38 ' 105 Lieber v. Goodrich, 5 Cow., 186 85 Lickbarrow v. Mason, 2 T. R., 71 29, 169 Little V. Riley, 43 N. H., 109 465 Lindsay v. Price, 33 Tex., 280 200, 332 Little V. O'Brien, 9 Mass., 423 305 Light V. Kingsbury, 50 Mo,, 331 259 Loomis V. Newhall, 15 Pick., 159 423, 425 Lovell V. Beauchamp, 19 Appeal Cases (L. R.), 607 124 Loyd V. Lord, i Bro. Par. Cas., 379 106 Lome V. Murphy, 9 Ga., 338 61, 68 Lord V. Harvey, 3 Conn., 372 61 Love V. Wells, 25 Ind., 503 165 Lloyd V. Lee, i Strange, 94 125 Lovell V. Hill, 6 C. & P., 238 81 Lowe V. Bliss, 24 111., 168 91, 93 Lord V. Hall, 9 L. J., C. P., 147 ; 8 C. B., 627 (65 E. C. L. R.) 132 TABLE OF CASLS. 639 Lovell V. Everton, 1 1 Johns., 52 309 Long V. Stephenson, 72 N. Car., 569 38 1 Lonsdale v. Brown, 4 Wash., C. C. 87, 153 365 Lovejoy v. Whipple, 18 Vt., 379 152 Lockwood V. Coley, 22 Fed. Rep., 192 161 Louisiana Ins. Co. v. Shaumburg, 2 Mar., 511 341 Long V. Colburne, 1 1 Mass., 97 133 Lowden v. Nat. Bk., 38 Kan., 533 403 Lobdell V. Baker, i Met., 193 318, 319, 320, 327 Loyd V. Howard, 152 B., 995 302 Lugneer v. Prosser, 1 Hill, 259 68 Lumley v. Palmer, i Salk., 23 36 Lucas V. Ladew, 28 Mo., 342 380 Lynch v. Dodge, 130 Mass., 458 274, 431 Lyon V. Marshall, 1 1 Barb., 241 120 Lynch v. Nurdin, i Q. B., 29 ; E. C. L. R., Vol. 41 410 Lynch v. Dodge, 130 Mass., 458 134 Martin v. Chauntry, 2 Strange, 271 77, 85, 86, 89 Masters v. Miller, 4 Term Rep., 320, 346 405 Martin v. Wade, 37 Cal., 168 423 Mason v. Morgan, 2 Ad. & EL, 30 431 Matthews v. Poythress, 4 Geo., 287 44° Magee v. Badger, 34 N. Y., 247 44° Marshall v. B. & O. R. R. Co., 16 How., 314 428 Marzetti v. Williams, i Barn. & Adol., 415 4.S3 Marine National Bk. v. National City Bk., 59 N. Y., 67 247 Maxwell v. Morehart, 66 Lid., 301 9^ Maynard v. Mier, 85 Ind., 317 92 Maiden Bk. v. Baldwin, 13 Gray (Mass.), 154 I73 Marrigan v. Page, 2 Hum. (Tenn.), 247 61 Marine Bk. v. Rushmore, 28 111., 403 '^^4 Mason v. Metcalf, 8 Baxt., 440 57 Mahoney v. Pitzpatrick, 133 Mass., 134 81 Marion Gravel Road Co. v. Kessinger, 66 Ind., 553 276 Maryland & Co. v. Newman, 60 Md., 584 ; 45 Am. R., 750. . 92 Macloon v. Smith, 49 Wis., 200; 5 N. W. Rep., 336 104 Mason v. Dousay, 35 111., 424 ^^3. 333 Mace V. Cadell Cowp., 232 • 97 Martin v. Stubbings, 126 111., 387 ; 9 Am. St. Rep., 620 168 Martin v. Johnson, 10 S. E. Rep., 1092 ; 8 L. R. A., 170. • • • 47° Mason v. Frick, 105 Pa. St., 162 SO 640 TABLE OF CASES. Maxwell v. Agnew, 21 Fla., 1 154 71 Master v. Miller, 4 Term B., 320 240, 320, 384, 401, 405 Mathews v. Paine, 47 Ark., 54 470 Mason v. Barff, 2 B. & Aid., 26 183 Matteson v. Moulton, 1 1 Hun., 268 , 184 Mahon v. Sawyer, 18 Ind., 73 143, 150 Martin v. Flaharty, 13 Mont., 96 150 Maiden v. Webster, 30 Ind., 317 161 Marston v. Allen, 8 M. & W., 494 148, 278, 279, 282, 411 Manf. Nat. Bk. v. Contanentile, 148 Mass., 53. . . ^ 29S Maine Trust Co. v. Butler, 45 Minn., 506 302 Marston v. Allen, 8 Mees & W., 454 302 Markey v. Carey, 108 Mich., 184 256 May V. Kelly, 27 Ala., 497 188 Mason v. Rumsey, I Camp., 384 199 Marvine v. Hymers, 12 N. Y., 223 12-! Martin v. Cole, 104 U. S., 30 258 Mason v. Hunt, i Doug., 296 (1779) 201, 219 Maxwell v. Vansant, 56 lU,, 58 261 March v. Ward, Peak's Cas., 130 268 Mansfield v. Baldwin, 9 N. Y., 45 124 Mason v. Morgan, 2 Ad. & Ellis, 30 (29 E. C. L. R.) 125 Mattison v. Marks, 31 Micli., 421 106 Matteson v. Morris, 40 Mich., 55 251 Mansfield v. Fehon, 13 Pick., 206 124 Martin v. Boure, Cro. Jac., 6 23, 32 Manett v. Eg. Ins. Co., 54 Me., 537 103 May V. Cooper, Post., 376 97 Massie v. Byrd, 87 Ala., 681 330 Martin v. Cole, 104 U. S., 30 322 Mayor v. Pyne, 3 Bing., 285 422 Markle v. Hatfield, 2 John., 462 235 March v. Barnett, 1 14 Cal., 375 294 Merriden v. Gallaudet, 120 N. Y., 298 311 Meise v. Newman, 76 Hun., 341 381 Merchants' Bank v. Hewit, 3 la., 93 459 Merchants' Bank v. Union, Etc., Co., 69 N. Y., 373 459 Merrell v. Packer, 80 la., 542 417 Merchants' Bk. v. Hanson, 33 Minn., 43. ., 446 Merritt v. Bagwell, 70 Ga., 578 417 Merchants' Ins. Co. v. Abbott, 131 Mass., 397 172 Mead v. Young, 4 Term. Rep., 28 240 Mechanics' etc.. Bank v. Schuyler, 7 Con., 337 119, 165 Meachem v. Pinson, 60 Miss., 226 91 TABLE OF CASES. 64! Meador v. Dollar Savings Bank, 56 Ga., 605 105 Mehlberg v. Fisher, 24 Wis., 607 165, 173, 174 Merchants' Bank of New York v. Exchange Bank of New Orleans, 16 La. Rep., 457 236 Merchants' Bk. v. State Bank, 10 Wall., 647 449 Meyer v. Johnston, 53 Ala., 237 461 Medbury v. Watrous, 7 Hill, no 273 Mehlhop V. Rea, 90 Iowa, 30 124 Meeker v. Shanks, 112 Ind., 207 _. 300 Merchants' Nat. Bank v. Gregg (Mich.), 64 N. W. Rep., 1052 256 Merchants' Bank v. Spicer, 6 Wend., 443 277 Megginson v. Harper, 2 C. & M., 322 12a Merrit v. Benton, 10 Wend., 116 466 Memphis, etc., v. Mitchell, 17 Ga., 570 70 Merritt v. Benton, 10 Wend., 116 294 INI echanics' and Farmers' Bank v. Schuyler, 7 Cow. (N. Y.), 337 164 Mercantile Bank v. Cox, 38 Me., 500 183 Merriam v. Wolcott, 3 Allen, 258 (1861) 318, 319, 327 Medley v. Elliott, 62 111,. 532 33° Melanotte v. Teasdale, 13 M. & W., 213 62, 70 Mendelhall v. Banks, 16 Ind., 284 Miller v. Bank of U. S., 11 Wheat, 431 360 Mix V. Insurance Co., 11 Ind., 117 465 Miltenberger v. Spalding, 33 Mo., 421 382 Minturn v. Ladue, 23 Howard, 435 13° Mitchell V. Baring, 10 C. B., 4; 4 C. & P., 35 367 Middleton v. Griffith, 57 N. J. L., 442 309, 331 Miller v. Tiffany, 1 Wall., 298 460, 467 Miller v. Delamaker, 12 Wend,, 433 125, 274 Mills V. Barney, 22 Cal., 240 3^ i Miller v. Austin, 13 How., 218 71. 7^ Miller v. Eace, 1 Bur. King's Bench Rep., 453 27, 32, 119, 243, 331, 389, 438, 440, 441, 458 Mitchell V. Catchings, 23 Fed. Rep., 710 443 Miller v. Finley, 26 Mich., 249 433 Mitchell V. Fuller, 15 Pa. St., 270 296, 304, 305 Miller v. Einley, 26 Mich., 249 44° Minet v. Gibson, 3 T. B., 481 389, 393 Miller v. Neihaus, 51 Ind., 401 ''^^^ Minot V. Russ, 156 Mass., 458 453 Miner v. Robinson, 12 Am. D., 694 259 Mills V. Barber, i Mees. & W., 425 427 Miller v. Harden, 32 Ala., 30 425 642 TABLE OF CASES. Miller v. McKenzie, 95 N. Y., 575 168 Miller v. Gilleland, 19 Pa. St., 119 166 Michigan Ins. Co. v. Leavenworth, 30 Vt., 11 165 Miller v. Thompson, 3 M. & G., 576; E. C. L. R., vol. 42. . . 114 Mitchell V. Degrand, i Mason, 176 ■. 107 Mitchell V. Easton, 37 Minn., 335 105 Miller v. Biddle, 13 Law Times, R. (N. S.), 334 103 Miller V. Prage, 56 la., 96 78 Mix V. Nat. Bk., 91 111., 20 172 Mitchell V. Smith, 4 Dall., 269 423 Mitchell V. Culver, 7 Cowan, 336 331 Miller v. Earned, 103 111., 562 299, 300 Molton V. Camroux, 3 Exch., 487 124 133, 433 Morris v. Preston, 93 111., 215 296 Morris Canal and Banking Co. v. Fisher, 64 Am. Dec, 428. 454 Morrison et al. v. Bailey et al., 5 Ohio St., 13 104, 448 Moss V. Averill, 10 N. Y., 447, 449 128 Monument Nat. Bk. v. Globe Works, loi Mass., 57 128 Moore v. Hershey, 90 Pa. St., 196 124 Moore v. Anderson, 8 Ind., 18 120 Moody V. Threlkeld, 13 Ga., 56 120 Moxon V. Pulling, 4 Camp., 50 262 Mous V. Bird, 1 1 Mlass., 436 268 Morley v. Culverwell, 7 Mess. & W., 174 330 Morris v. Lea, Ed. Raym., 1327 57, 66, 175 Morgan v. Bank, etc., 4 Bush., 82 383 Morgan v. U. S., 113 U. S., 500 442 Morrison v. Thistle, 67 Mo.. 596 431 Morgan v. Burrows, 16 So. R., 432. .'. 152 Montague v. Perkins, 2 Doug., 514 410 ;\lorris v. Way, 16 Ohio, 469 423 ^lonson V. Tripp, 81 Me., 24 168 Moffat V. Edwards, i Car. & M., 16 103 Morris v. Richards, 45 Law. T. R., 210 105 Molloy v. Delves, 7 Bing., 428 168 ]\Iohawk Bank v. Broderick, 10 Wend., 304 103 Moses V. Lawrence Co. Bk., 149 U. S., 298 471 Molson's Bank v. Howard, 40 N. Y. Sup. Ct., 15 185 Morris v. Foreman, i Dal., 193 303 Moor V Hershey, 90 Pa. St., 196 134 Moeise v. Knapp, 30 Ga., 942 199 Moies V. Bird, 11 Mass., 436 226 Mowatt V. Wright, i Wend., 355 236 Moses V. Macfarlan, 2 Burr., 1012 235 TABLE OF CASES. 643 Morgan v. Edwards, 53 Wis., 599; 11 N. W. Rep., 21 93 Montgomery v. Crossthwait, 90 Ala., 553; 24 Am. St. Rep., ^^^ 93, 461 Moody V. Findley, 43 Ala., 167 300 Molloy V. Shute ogo Mt. Mansfield Hotel Co. v. Bailey, 64 Vt., 151 302 Mt. Pleasant Bk. v. McLaren, 26 la., 306 382 Mumford v. Freeman, 8 Mete. (Mass.), 432 62 Murray v. Judah, 6 Cow., 484 323, 381 Mudge V. Bullock, 83 111., 22 126 Muir V. Schenck, 3 Hill, 230 252 Murray v. Lylburn, 2 Johns Ch., 441 252, 254 Munger v. Shannon, 61 N. Y., 251 78, 89 Mullanphy Sav. Bank v. Schopp et al. v. Magloughlin, 133 111., 33 254 Murray v. Lardner, 2 Wall., 121 438, 439 Musson V. Lake, 4 Howard, 262 336 Muse V. Dantzler, 85 Ala., 359 50 Murphy v. Bottomer, 40 Mo., 67 429 Mullen V. French, 9 Watts, 96 308 Mutual Life Ins. Co. v. Hunt, 79 N. Y., 541 133 Myer v. Hart, 40 Mich., 517 92 McAlister v. Smith, 17 111., 328 470 McBain v. Seligman, 58 Mich., 294 446 McCormick Harvesting Mach. Co. v. Faulkner, 64 N. W. R., 163 151- 153 McClure v. Jeffrey, 8 Ind., 79 263 McClane v. Fitch, 4 B. Men., 599 382 McClelland v. Norfolk R. R. Co., 110 N. Y., 397, 401 454, 455 McCurdy v. Bowes, 88 Ind., 583 461 McCoy V. Lockwood, 71 Ind., 319 419 McCauley v. Murdock, 97 Ind., 230 44^ McCruden v. Jonas, 173 Pa. St., 507 I73 McClellan v. Coffin, 93 Ind., 456 84 McCartney v. Smalley, 1 1 la., 85 84 McCrary v. Newberry, 25 111., 496 103 McCall V. Taylor, 19 Common Bench, 301; 34 Law Journal (N. S.) Common Law, 365 109 McCutchen v. Rice, 56 Miss., 455 187 McDowell V. Goldsmith, 6 Md., 319 260 McEvers v. Mason, 10 Johns., 207 183, 213 McFarland v. Sikes, 54 Conn., 250 iS© McGurk V. Huggett, 56 Mich., 187 300 McGregor v. Rhodes, 25 L. J. Q. B., 318 310 644 TABLE OF CASES. McGrath v. Clark, 56 N. Y., 34 407 McGowan v. West, 7 Mo., 569 68 McGruder v. Bank, etc., 8 Curtis, 299 382 McGee v. Larramore, 50 Mo., 425 81 McGowen v. West, 7 Mo., 569; 38 Am, Dec, 468 168 McKnight V. Wheeler, 6 Hill, 492 302 McKim V. Smith & Steene, i Hall's Amer. Law Journ., 486. . 213 McKleroy v. Southern Bk., 14 La. An., 458 232, 240 McKesson v. Stanbury, 3 Ohio St., 156 445 McLellan v. Albee, 5 Shepley, 184 62 Macleod v. Luce, 2 Strange, 762 89 McLane v. Sacramento, etc., Ry. Co., 66 Cal., 606 104 McLaren v. Watson, etc., 20 Wend., 425 472 McMullen v. Rafferty, 89 N. Y., 456 105, 313, 330 McNeil V. Tenth Nat. Bk., 46 N. Y., 325 462 McNamara v. Gargelt, 68 Mich., 454 416 McSparran v. Neely, 91 Pa. St., 17 165, 433 McA^ey v. Cantrell, 70 N. Y., 295 125, 126, 431 McWilliams v. Webb, 32 Iowa, 577 250 Nat. Bk. V. Grant, 71 Me., 374 30D National Bk. v. Kirby, 108 Mass., 497; 30 Am. Rep., 702. . 104, 284, 443 Nat. Bank v. Ringel, 5 1 Ind., 383 85 National Bank v. Veneman, 43 Hun., 241 416 National Bk. v. Wilder, 34 Minn., 149 460 National Bk. v. Peck, 127 Mass., 298 453 National Park Bank v. German Am. & Security Co., 5 L. R. A., 673 128 Nat. Bk. V. Gay, 63 Mo., 33 92 National Park Bank v. Ninth National Bank, 46 N. Y., ^7 . . 247 National Bank v. Wells, 79 N.'Y., 498 128, 301 Nat. Bank v. Galland, 45 Pac. Rep., 35 256 Nazro v. Fuller, 24 Wend., 37 405 Naglee v. Lyman, 14 Cal., 450 183 Nat. Butchers' Bk. v. Hubdell, 117 N. Y., 384 298 National Bk., etc., v. Green, 33 la., 140 294 Nat. Security Bk. v. McDonald, 127 Mass., 82 301 Nance v. Lary, 5 Ala., 370 412, 418, 419 Newton v. Bealer, 41 Iowa, 334 150 Neff V. Homer, 63 Pa. St., 237 401 New England, etc., Co. v. McLaughlin, 87 Ga., i. .173, 333, 334 TABLE OF CASES. 645 Newell V. Gregg, 51 Barb., 263 443 Newman v. King, 54 Ohio St., 273 400 Nevada Bank v. Luce, 139 Mass., 488 185 Nicholls V. Webb, 8 Wheat., 336 363, 366 Nixon V. De Wolf, 10 Gray, 348 437 Nichols V. Mudgett, 32 Vt., 546 428 Nightingale v. Withington, 15 Mass, 272 123 Noll V. Smith, 64 Ind., 511 407 Norwich Bank v. Hyde, 13 Conn., 281 94 Noll V. Thornton, 46 Ala., 587 106 Noyes v. Brown, 33 Vt., 431 250 Norton v. Ellam, 2 M. & W., 461 105 Norton v. Rose, 2 Wash. (Va.), 233 254 Nott's Executor v. Beard, 16 La., 308 343, 347, 352, 365 Norton v. Karapp, 64 la., 112 186 North Atchison Bank v. Garretson, 51 Fed. Rep., 168 183 Norfolk Nat. Bk. v. Griffin, 107 N. C., 173 300 Nutter V. Stoner, 48 Maine, 163 423 N. W. Mutual Ins. Co. v. Blankenship, 94 Ind., 532 134 O'Keefe v. First Nat. Bk., 49 Kan., 347 32S O'Kell V. Charles, 34 L. T. Rep., 422 162 O'Rouke V. O'Rouke, 43 Mich., 58 154 Dates V. First Nat. Bk., 100 U. S., 239 444 Ocean Bk. v. Williams, 102 Mass., 141 381 Ogden V. Saunders, 12 Wheaton, 213 107 Ogden V. Blydenburgh, i Hilton, 182 322 Ohio Life Ins. Co. v. Ross, 2 Md. Ch., 25, 39 254 Olcott V. Rathbone, 5 Wend., 492 469 Olcott V. Tioga Ry. Co., 40 Barb., 179 128 Onondaga, etc., Bk. v. Bates, 3 Hill, 53 367 Orcutt V. Hough, 54 N. H., 472 4/0 Orr V. Lacey, 2 Douglass, 230 425 Oridge v. Sherborne, 11 M. Sr W., 374 94, 103 Orr V. Maginnis, 7 East, 359 35^ Osborne v. Hubbard, 20 Oregon, 318 5° Osborn v. Kistler, 35 Ohio St., 50 50 Osbom V. Hawley, 19 Ohio St., 130 78 Osburn v. Farr, 42 Mich., 134 124 Osborne v. Van Houton, 45 Mich., 444 399 Outhwite V. Porter, 13 Mich,, 533 140 Overton v. Mathews, 35 Ark., 147 9^- 646 TABLE OF CASES. Overton v. Tyler, 4 Barr., 346 89 Owen V. Barnum, 7 111., 461 89 Owen V. Van Uster, 20 L. J. Rep., 61 162 Owen V. Evans, 134 N. Y., 514 253 Owings V. Baker, 54 Md., 82 275 Oxford Bank v. Haynes, 8 Pick., 423 220 Parker v. Gordon, 7 East., 385 364 Paton V. Coit, 5 Mich., 505 427 Parkliurst v. Vail, 73 111., 343 471, 473, 475 Pass V. McCrea, 36 Miss., 143 250 Palmer v. Hammer, 10 Kan., 464 ; 81, 82 Palmer v. Ward, 6 Gray, 340 84 Payne v. Raubinek, 82 la., 587 417 Parish v. Stone, 14 Pick., 198 423 Page V. Cook, 41 N. E. Rep. (Mass.), 115 81 Palmer v. Pratt, 2 Bing., 185 57, 78 Parish v. Stone, 14 Pick., 198 168, 169 Page V. Krekey, 137 N. Y., 313 416 Pardee v. Fish, 60 N. Y ., 265 (85), 87 Pattison v. Bankes Cowp., 543 97 Papham v. Bathurst, Ambl., 68 38 Palmer v. Marshall, 60 111., 289 441 Paine v. Cent. Vt. R. R. Co., 14 Fed. Rep., 270 443 Patterson v. Poindexter, 6 W. & S. (Pa.) "JZ Parker v. Greele, 2 Wend., 545 183 Palmer v. Nassau Bank, 78 111., 380 296 Payne v. Jenkins, 4 Car. & P., 335 72 Parsons v. Thompson, i H. BL, 322 428 Page V. Cooke, 164 Mass., 116 106 Palmer v. Palmer, 36 Mich., 487 103, 105, 312, 330, 443 Patterson v. Graves, 5 Blackf. (Ind.), 593 119 Page V. Krekey, 137 N. Y., 313 147 Parkinson v. Lee, 2 East., 314 324 Palmer v. Poor, 121 Ind., 138 150 Palmer v. Ward,, 6 Gray, 340 103 Parks V. Brown, 16 111., 454 331 Parson v. Armor & Oakey, 3 Peters, 426 221 Peoria Ry. Co. v. Neill, 16 111., 269 232 Pearson v. Garrett, 4 Mod. R., 242 74, 78, 99 Peacock v. Rhodes, i Doiigl., 633 390 "Peto V. Reynolds, 9 Exch., 410 115, 158 TABLE OF CASES. 647 Perkins v. Bank, 21 Pick., 483 105 Petillon V. Lorden, 86 111., 361 119 Pease v. Cole, 53 Conn., 53 127 Pelletier v. Conture, 148 Mass., 269 124 People's Bk. v. Jefferson, etc., Bk., 106 Ala., 624 275, 298 Perkins v. Hart, 1 1 Wheat., 237 422 Penny v. Innes, i C. M. & R., 439 198, 293 Petit V. Benson, Cumberbach, 452 187, 188 Perkins v. Cummings, 2 Gray, 258 423, 425 Pennington v. Baehr, 48 Cal., 565 161 Peacock v. Rhodes, Doug., 633 440 Peck V. Mayo, 14 Vt., 33 334, 465, 468 Phelan v. Moss, 17 P. P. Smith (Pa.), 59; 67 Penn. St., 53 ... . 403, 405, 406, 440 Phillips V. Paget, 2 Ark., 80 122 Phoenix Ins. Co. v. Allen, 11 Mich., 501 84 Phoenix Ins. Co., v. Church, 81 N. Y., 225 172 Phillips V. Wicks, 36 N. Y., 254 125 Phelps V. Town, 14 Mich., 374 87 Philpott V. Bryant, C. & P., 244 379 Phillips V. Imthurn, 114 E. C. L. R., 694 152 Phillips V. Frost, 19 Me., JJ 186 Phillips V. Meyer, 82 111., 67 429 Phillips V. Preston, 5 Howard, 278 293 Pillans V. Van Mierop, 3 Burr., 1663 212, 217 Pickerring v. Ilfracomb R. R. Co., 3 Law Rep., C. P., 235. .. 252 Pindar v. Barlow, 31 Ver., 529 102 Pilkinton v. Woode, 10 Ind., 432 380 Piersol v. Grimes, 30 Ind., 129 40i ■ Pierson v. Dunlop, Cowp., 574 loi, 217 Pinney v. Adm'rs, 8 Wend., 500 257 Pinkney v. Hall, i Salk., 126 i9^ Pirviance v. Jones, 120 Ind., 162 152 Pitts V. Fogelsing, 37 Ohio St., 676 3°° Pitkin V. Flanagan, 23 Vt., 160 300 Pickering v. Dawson, 4 Taunt., 779 325 Pine V. Smith, 11 Gray, 38 444 Plumer v. Lyman, 49 Me., 229 i°3 Planter's Mill Co. v. Merchants' Bk., 78 Ga., 582 401 Potter V. Tollman, 35 Barb., 182 463 Powell V. Watters, 8 Cow., 669 ^52 Pond V. Waterloo, 50 Iowa, 695 294 Poorman v. Mills, 35 Cal., 118 72 Porter v. Cushings, 19 111., 572 33^ 648 TABLE OF CASES. Powers V. Finnic, 4 Call. (Va.), 411 29S Powell V. Gray, 6 Gray, 340 57 Powell V. Waters, 17 Johns., 176 472 Power V. Ward, 6 Gray, 175 78 Polk V. Gallant, 34 Am. Dec, 410 252 Pope V. Dodson, 58 111., 360 169 Pomeroy v. Ainsworth, 22 Barb., 126 470 Pollard V. Herries, 3 B & P (1791), 335 93, 173 Poirier v. Norris, 2 E. & B. (75 E. C. L.), 89 172 Potter V. Everett, 2 Hall., 252 236 Polhill V. Walter, 3 B. & Ad., 114 197, 19-^ Poplewell V. Wilson, 1 Strange, 263 102, 167 Porter v. Porter, 51 Me., 376 102 Powell V. Monnier, i Atk., 611 (1737) 185, zyj Pollock V. Maison, 41 111., 516 33B Pott V. Clegg, 16 Mees. & W., 321 29 Pollard V. IBrown, 57 Ind., 234 4^0 Prentsman v. Baker, 30 Wis., 644 152 Pritt V. Fairclough, 3 Campb., 305 366 Prescott Bank v. Caverly, 7 Gray, 217 2^2 Price V. Trusdell, 28 N. J. E. R., 200 29^ Preston v. Whitney, 23 Mich., 260 89 Protection, etc., Co. v. Bill, 31 Conn., 204 7 j President v. Hurtin, 9 Johnson, 217; 6 Am. Dec, 273. . . . 167 Pratt V. Trustees, 93 111., 475 169 Preston v. Dunham, 52 Ala., 217 102 Prior V. Wright, 14 Ark., 186 470 Pratt V. Wallbridge, 16 Ind., 54 470 Price V. Taylor, 5 Hurl & Nor., 540 79 Preston v. Jackson, 2 Stark., 237 428 Price V. Shute, 4 E., 33 3cp Prather v. McA^oy, 8 Mo., 661 84 Pratt V. Eads, i Blackf. (Ind.), 82 104 Price V. Neal, 3 Burr., 1355 228,234, 235, 237, 239, 390 Bridge v. Sherborne, 11 M. & W., 374 104 Prestwick v. Marshall, 7 Bing., 565 (20 E. C. L. R.) 125 Price V. Jones, 105 Md., 543 72 Prentice v. Achorn, 2 Paige, 29 432 Pratt V. Trustee, 93 111., 475 73 Putnam v. Sullivan, 4 Mass. Rep., 45 146, 411, 419 Purviance v. Jones, 120 Ind., 162 144, 151 Puffer V. Smith, 22 Mich., 479 141 TABLE OF CASES. 649 Q Quin V. Sterne, 26 Ga., 223 276, 278 Quigley v. Mexico So. Bank, 80 Mo., 295 250 Quinby v. Merritt, 1 1 Humph., 439 84 Railway Co. v. Sprague, 103 U. S., 762 104 Ranger v. Gary, i Mete, 369 260 Raymond v. Sellick, 10 Gonn., 480 169 Ramot V. Schotenfels, 15 la., 457 103 Ray V. Faulkner, 73 111., 469 182 Raper v. Birkbeck, 15 East., 20 203 Rauson v. Mack, 2 Hill, 587 381 Rawson v. Davison, 49 Mich., 607 50 Raphael v. Bank of England, 84 English Gom. Law, 161 ; 17 G. B., 161 439. 440 Ray V. Tibbs, 50 Vt., 688 43° Ramsdale v. Horton, 3 Pa. St., 330 458 Reed v. Roark, 14 Tex., 329 50 Red Oak Bk. v. Orvis, 40 la., 332 381 Regina v. White, i Den. Cr.G., 208 159 Rex. V. Revett, Byles on Bills, 8th ed., 124 412 Reamer v. Bell, 79 Pa. St., 292 296, 307 Bex. V. Ellor, 1 Leech, 323 55, 57 Read v. Brookman, 3 Term R., 157 387, 391 Reuben v. Bennet, 2 Taunt., 388 3^4 Rex V. Hales, 17 How., 161 411 Reed v. Rorak, 14 Tex., 329 161 Rex V. Richards, R. & R. G. G., 193 116 Read v. McNulty, 12 Rich., 445 93 Rex V. Randall, Russ. G G., 185 116 Rex V. Adderley, 2 Doug., 463, 464 107 Reading v. Beardsley, 41 Mich., 123 124 Rex V. Clark, Russ. & R., 181 i59 Rex V. Hart, 6 G. & P., 106 iS8 Rex V. Bigg, I Strange, 18 276 Redington v. Woods, 45 Cal., 406, 418 232, 247, 311 Rex V. Bigg, 3 Peere William's R., 419; i Stange, 18 262, 263, 278 Rex. V. Lambton, 5 Price, 442 279 Rhodes v. Jenkins, 18 Colo., 49 302, 311 650 TABLE OF CASES. Ehodes v. Lindley, 3 Ohio, 37 (14 Am. Dec, 422) 83 Rice V. Rice, 68 Ala., 216 170 Rice V. Howland, 147 Mass., 407 168 Richardson v. Richardson, 148 111., 563 169 Rigby V. Norwood, 34 Ala., 129 471, 475 Rice V. Hearn, 109 N. C, 150 254 Richardson v. Carpenter, 46 N. Y., 661 78, 88 Riker v. Sprague Manufacturing Co., 14 R. I., 402 94 Ripley v. Greenleaf, 2 Ver., 129 107 Rittenhouse v. Ammerman, 64 Mo., 197 131 Rich V. Starbuck, 51 Ind., 87 120 Rieman v. Fisher, 4 Am. Law Reg., 433 299 Rice V. Cutler, 17 Wis., 351 ; 84 Am. Dec, 747 461 Riggs V. Waldo, 2 Cal., 485 275 Richardson v. Lincoln, 5 Met., 201 210 Richards v. Barton, i Esp., 269 199 Rice V. Stearns, 3 Mass., 225 322 Richards v. Globe Bk., 12 Wis., 692 463 Richert v. Tulford, 52 111., 166 442 Riggs V. Linsay, 7 Cranch, 500 183 Right, etc., V. First Nat. Bk., 42 Mich., 461 161 Robinson v. Snyder, 25 Penn. St., 203 422 Robarts v. Tucker, 16 Q. B. 560; E. C. L. R., 71 312, 410 Roby V. West, 4 N. H., 287 423 Robinson v. Green, 3 Mete, 159 422, 423 Robson V. Swart, 24 Minn., 371 ; 100 Am. Dec, 238 461 Rodney v. Wilson, 67 Mo., 123 259 Robbins v. May, 11 Ad. & E., 213 71 Roberts v. Hall, 37 Conn., 205 4IS Rogers v. Wiley, 14 111., 65 260 Rowland v. Fowler, 47 Conn., 347 446 Rowe V. Young, 2 B. & B., 165 195 Rose V. Truax, 21 Barb., 361 428 Robinson v. Bland, 2 Burr. R., 1077 425 Roll V. Ragnet, 4 Ohio, 400 429 Roberts v. Lane, 64 Me., 108 442 Rodecker v. Littauer, 8 C. C. A., 320; 59 Fed., 857 429 Robertson v. Coleman, J41 Mass., 231 441 Robarts v. Tucker, 16 Q. B., 560 247 Robertson v. Kensington, 4 Taunt., 30 297 Roberts v. Peake, i Burrows, 323 57, 102 Roman v. Terna, 40 Tex., 306 7' Roberts v. Wood, 38 Wis.. 60 153 Rogers v. Colt, 6 Hill, 322 277, 278 TABLE OF CASES. 65 I Rockwell V. Charles, 2 Hill, 499 Rousch V. Duff, 35 Mo. 312 183 Roach V. Woodall, 91 Tenn., 206 312 Rose V. Van Mierop & Hopkins, 3 Burr., 1663 (1765). . . . 208 Roberts v. Haskill, 20 111., 59 328 Robinson v. Lyman, 10 Conn., 30 333 Roosa V. Crist, 17 111., 450 328 Rodney v. Wilson, 67 Mo., 123 322 Rowley v. Jewett, 56 la., 492 399 Rogers v. Stevens, 2 D & E., 713 351, 361 Ross V. Espy, 66 Pa. St., 481 259 Ross V. Smith, 19 Tex., 171 302, 304. Roberts v. McGrath, 38 Wis., 52 151 Koffey V. Greenwell, 10 Al. & El., 222 73 Roberts v. Smith, 58 Vt., 494 84 Row V. Dawson, i Vesey, 331 -. 250 Rossiter v. Rossiter, 8 Wend., 494 132 Robertson v. Sheward, i M. & G., 511 120 Roehner v. Knickerbocker Ins. Co., 63 N. Y., 160 107 Robbins v. Eaton, 10 N. H., 561 123 Robeson v. Roberts, 20 Ind., 155 253 Robinson v. Bland, i Burr., 1077 72, 469 Robertson v. Deatherage, 82 III, 511 474 Rodabaugh v. Pitkins, 46 la., 544 472 Roberts v. Hawkins, 70 Mich., 566 472 R. R. Co. V. Schutte, 103 U. S., 1 18 294 Russell v: Langstaffe, Dougl., 514 164, 390, 419 Bushton V. Aspinwall 360 Russell V. Wiggins, 2 Story's Rep., 214 457 Russell V. Ball, 2 Johns., 50 437 Russell V. Whipple, 2 Cow., 536 68, 69, 72 EufE V. Webb, 1 Espinasse, 127 54 Russ V. Smith, 19 Tex., 171 ; 70 Am. Dec, 327 328 Russell V. Phillips, 14 O. B., 900 i95 Russell V. Powell, 14 M. & W., 418 55 Rundell v. Keeler, 7 Watts, 237 122 Russell V. Swam, 16 Mass., 314 274 Runnells v. Garner, 80 Mo., 477 124 Rumsey v. Briggs, 139 N. Y., 323 189 Rymes v. Clarkson, i Phil., 22 4^ Ryhiner v. Feickert, 92 111., 305, 3" ^73. 274 Ryan v. May, 14 111., 49 ^55 TABLE OF CASES. Sanderson v. Piper, 5 Bing., 425 94 Sarsfield v. Witherley, i Show., 125 76 Saxton V. Stevenson, 23 Up. Can. C. P., 503 93 Salter v. Burt, 20 Wend., 205 108 Sando v. Smith, I Neb., 108 470 Savage v. King, 17 Me., 301 125 Savings Bank v. Strother, 28 S. C, 504 92 Sawyer v. McLough, 46 Barb., 350 170 Salinas v. Wright, 1 1 Tex., 572 103 Samson v. Thornton, 3 Met., 275 269 Salinas v. Wright, 1 1 Tex., 572 102 Salter v. Burt, 20 Wend., 205 105 Sanford v. Clark, 29 Conn., 460 62 Sawyer v. Vaughn, 25 Me., 337 169 Sachett v. Palmer, 25 Barb., 174 84 Sands v. Lyon, 18 Conn., 18 loS Sayre v. Wheeler, 31 Iowa, 112 154 Sands v. Wood, 21 Iowa, 263 256, 277 Sackett v. Spencer, 29 Barb., ISO 68 Savannah Nat. Bank v. Haskins, loi Mass., 307 305 Sanders v. Anderson, 20 Mo., 402 160 Scofield v. Day, 20 Johns., 102 Scott V. First Nat Bk., 71 Ind., 448 333 Schofield V. Bayard et al., 3 Wend., 488 227 Scott V. Perlee, 39 Ohio St., 63 470 Schultz V. Astley, 2 Bing., 544 i [9 Scanlon v. Cobb, 85 111., 296 124 Schmittler v. Simon, loi N. Y., 554 78 Schreiber v. Richmond, 73 Wis., 12 106 Schafer v. Reilly, 60 N. Y., 61 253 Scott V. Gilmore, 3 Taunt., 226 425 Scotland Co. v. Hill, 132 U. S., 117 446 Schlesinger V. Arline, 31 Federal Rep., 648 91 Scotten V. Randolph, 96 Ind., 581 441 Schmittler v. Simons, loi N. Y., 554 257 Scofield V. Day, 20 Johnson, 102 465 Scollans v. Flynn, 120 Mass., 271 420 Schmitz V. Hawkeye Co., 67 N. W Rep., 618 462 Scofield V. Ford, 56 la., 370 407 Schultz V. Astley, 2 New Ca., 544 I59 Scott V. Calpin, 139 Mass., 529 296 TABLE OF CASES. 653 Scott V. State Bank, 9 Ark., 36 153 Seavers v. Phelps, 11 Pick., 304 133 Selser v. Brock, 3 Ohio St., 302 310, 417, 311 Sears v. Wright, 24 Me., 278 80 Seyfart v. Harrison, 88 Ky., 461 471 Seibel v. Vaughn, 69 111., 257 407 Second Nat. Bk. v. Williams, 13 Mich., 282 169 Sears v. Lautz, 47 la., 658 256, 277 Seaton v. Scoville, 18 Kan., 433 91 Seldonridge v. Connable, 32 Ind., 375 165, 168 Selleck v. French, i Conn., 32 (6 Am. Dec, 189, note) 287 Seyfert v. Edison, 45 N. J., 393 300 Seaton v. Hinneman, 50 la., 395 107 Seton V. Seton, 2 Bro. Ch., 610 169 Seymour v. Mickey, 15 Ohio St., 515 275 Searle v. Galbraith, 73 111., 269 124 Second Nat. Bank v. Miller, 60 N. Y., 639 125 Seavers v. Phelps, 1 1 Pick., 304 124 Shaver v. Ehle, 16 Johns., 201 317, 319, 327 Shillits V. Reineking, 30 Hun., 345 470 Shamokin Bank v. Street, 16 Ohio St., i 85 Shaw V. Camp., 160 111., 425 106, 169 Shelby v. Judd, 24 Kan., 166 277 Shaw V. Clark, 49 Mich., 384 4-1-6 Shuttleworth v. Stephens, i Camp. R., 407 119 Shirk V. Shultz, 1 13 Ind., 571 124 Sheldon v. Haxtun, 91 N. Y., 124 463, 470 Shepard v. Hawley, i Conn., 367 272 Sheuton v. James, 5 Q. B., 199 81 Shipley v. Carroll, 45 111., 285 144. i49 Shoulters v. Allen, 51 Mich., 530 133 Shutts V. Fingar, 100 N. Y., 539 382 Shed V. Brett, i Pick., 401 360 Sheldon v. Haxton, 91 N. Y., 124 333 Shaw V. Sullivan, 106 Cal., 208 3/6 Shanucker v. Sibert, 18 Kan., 104 33° Shelden v. Hentley, 2 Showers, 160. 24 Shrivell v. Payne, 8 Dowl (P C), 441 72 Shirley v. Howard, 53 111., 455 420 Shults V. Shults, 158 111., 654 150, 152 Shaver v. Western Union Tel. Co., 57 N. Y 459. i95 Shaw V. Spencer, 100 Mass., 382; 97 Am. Dec, 107 133, 462 Shank v. Butsch, 28 Ind., 19 160 Shaw V. B. R. Co., 100 TJ. S., 557 460 654 TABLE OF CASES. Shaw V. Knox, 98 Mass., 214 293, 300 Simpson v. Griffin, 9 Johns., 131 294 Sickles V. Patterson, 14 Wend., 257 422 Sigourney v. Lloyd, 8 B. & C, 622 298 Siegel V. Chicago, etc.. Savings Bank, 131 111,, 569 78, 167 Sittig V. Birkestack, 38 Md., 158 120 Simonson v. Durffy, 50 Mich,, 81 108 Sigourney v. Clarke, 17 Conn., 519 2=55 Sibree v. Tripp, 15 M. & W., 23 71, 73 Skaaraas v. Finnegan, 31 Minn., 48 153 Slade V. Halsted, 7 Cow., 322 168 Sleeper v. Chapman, 121 Mass., 404 254 Slocum V. Hooker, 12 Barb., 563 124, 430 Smith V. Williamson, 8 Utah, 219 433 Smith V. Kendall, 9 Mich., 241 93 Smith V. Kendall, 6 T. K., 123 67 Smead v. Indianapolis, etc., 1 1 Ind., 105 301 Smitliers v. Junkers, 41 Fed. Rep., 101 80, 106 Smalley v. Wight, 44 Me., 442 258, 302 Smith V. Braine, 16 Q. B., 201 427 Smith V. Livingston, 1 11 Mass., 342 440 Smith V. Chester, i Term Rep., 654 236 Smith V. Long, 40 Mich., 555 275 Smith V. Eastman, 3 Cush. (Mass.), 355 62 Smith V. Jansen, 12 Neb., 125 444 Smith V. Clark Co., 54 Mo., 58 455 Smith V. Allen, 5 Day (Conn.), 337 61, 62, 63, 67, 69, 72, 463 Smith V. Carter, 25 Wis., 283 259 Smith V. Whiting, 9 Mass., 334 131 Smith V. Mullet, 2 Campb., 208 383 Smith V. Ellis, 29 Me., 422 106 Smith V. Nightingale, 3 Starkie, 375; 3 English Comm.on Law Reports, 452 90 Smith V. Pickering, Peake, N. P C, 50 281 Smith V. Boheme, 2 Ld. Raym., 1362 lOO, 193 Smith V. Poillion, 23 Hun., 632 367 Smith V. Smith, i F & F.,_ 539 72 Smith V. Abbot, 2 Str., 1152 lOi Smith V. Nevlin, 89 111., 193 260 Smith V. Knox, 3 Espinasse, 46 167 Smith V. Marland, 59 la., 645 94 Smith V. Mercer, 6 Taunt., 75 234, 235 Smith V. Kessler, 44 Pa. St., 142 275 Smith V. Mayo, 9 Mass., 62 123 TABLE OF CASES. 655 Smith V. Clarke, 1 Esp., 180 295, 304, 305, 307 Smith V. Lockridge, 8 Bush., 425 igg Smith V. Mihon, 133 Mass., 369 i8g Smith V. Mercer, 6 Taunt., 76 239. Smith V. Bank, etc., L. R., 4 P. C. 194, 205, 208 380 Snyder v. Reno, 38 Iowa, 329 321 Sondheim v. Gilbert, 117 Ind., 71 4 [6 Solomons v. Bank of England, 13 East., 135 458 Solomons v. Stavely, Doug., 684 360 Southern Bank v. Brashears, 1 Disney, 207 466 Speck V. Pullman Car Co., 121 111., 57 442 Spencer v. Carstarthen, 15 Col., 445 278, 302 Sparks v. Dispatch Transfer Co., 104 Mo., 531 162- Spinker v. Fletcher, 61 Ind., 276 282 Spalding v. Andrews, 48 Pa. St., 411 183, 184 Spear v. Pratt, 2 Hill, 582 182, 185, 186 Sperry v. Horr, 32 Iowa, 184 91, 93 Spurgin v. McPheeters, 43 Ind., 527 56, 89 Sproat V. Matthews, i D. & E., 182 10 1 Spencer v. Allerton, 60 Conn., 410 275 Spears v. Bond, 79 Mo., 470 84 Sparman v. Kevin, 83 N. Y., 245 124 Spinning v. Sullivan, 48 Mich., 8 25 [ Storm V. Sterling, 3 E. Sz: B., 832 (yy E. C. L. R.) 119, 120 Stoessiger v. The Southeastern Ky. Co., 3 Ellis & Blackburn (Q. B.) 549 113, 118, 155 Stewart v. State, 62 Md., 412 459 State V. Loomis, 27 Minn., 521 460 Stephens v. Davis, 85 Tenn., 271 407 Sturges V. Fourth Nat. Bk., 75 111., 395 182, 183 Stewart v. Lispenard, 26 Wend., 299 13 ^ Stump V. Richardson Co. Bk., 24 Neb., 522 474 Stone V. French, 37 Kan., 145 151 Stewart v. Bramhall, 74 N. Y., 85 282 Storer v. Logan, 9 Mass., 55, 60 183 Stevens v. Wood, 127 Mass., 123 154 State Capital Bank v. Thompson, 42 N. H., 370 154 Stanley v. Ayles, 3 Keb., 444 ; 2 Strange, 1000 36 Star Wagon Co. v. Swezey, 63 la., 520 471 Stevens v. Blunt, 7 Mass., 240 78 Stenam v. Harrison, 42 Pa. St., 49 183, 199 Sturtevant v. Randall, 53 Me., 149 275 Stulls V. Silva, 119 Mass., 137 78, 106 Stewart v. Lispenard, 26 Wend., 299 124 Stephens v. Weldon, 151 Pa. St., 520 25.]^ 656 TABLE OF CASES. Strickland v. Holbrooke, 75 Cal., 268 72, 88, 91 Stapleton v. Louisville Banking Co., 95 Georgia, 802 92 Stevens v. Water Co., 62 Me., 498 195 Stephens v. Graham, 7 S. & R., 505 405 State Bank v. Thompson, 42 N. H., 376 165 St. Louis, etc., Co. v. Camden Bk., 47 Ark., 545 72 Steinbacker v. Boker, 34 Barb., 436 439 State Nat. Bank v. Cason, 39 La. Ann., 865 167 State v. Taylor, 10 Ohio, 378 92, 93 Street v. United States, 133 U. S., 299 108 Stagg v. Elliott, 12 C. B. N. S., 373 ; E. C. L. R., vol. 104. , . 412 Stevens v. Mclntire, 14 Me., 14 168 Stevenson v. O'Neal, 71 111., 314 322 Stillwell V. Craig, 58 Mo., 24 106 Stewart v. Smith, 17 Ohio St., 83 450 Stanley v. Nelson, 28 Ala, 514 423 Stevens v. Harman, 86 Mich., 307 2-,6 Steere v. Trobilock et al., 66 N. W Rep., 342 2^6 Stevens v. Blunt, 7 Mass., 240 106 Staples V. Nott, 65 Am. D., 651 333, 463, 4"0 Stevens v. Beals, 10 Cush. (Mass.), 291 125 Strong V. Straus, 40 Ohio St., 87 133 Story V. Lamb, 62 Mich., 525 329 Sulivan v. Rudisill, 63 la., 158 39") Sulsbacher v. Bank, 86 Tenn., 201 368 Sussex Ek. v. Baldwin, 2 Harrison (N. J.), 487 381 Sumner v. Gay, 14 Pick., 311 270 Sutherland v. Reeve, 151 III., 384 254 Suffolk Bk. v. Boston, 149 Mass., 305 446 Sutton V. Beckwith, 68 Mich., 303 416 Summei's v. Hutson, 48 Ind., 230 253 Swift V. Whitney, 20 111., 144 87 Sweetland v. Creigh, 15 Ohio, 118 87 Sweeting v. Barrett, i Stark, 106 120 Swope V. Ross et al., 40 Pa. St., 186; 80 Am. D., 567 178, 182 Swift V. Tyson, 16 Pet., 16 172, 294, 417, 437, 439, 444 Swan V. Clark, 1 10 U. S., 602 461 Swan V. North British Australasian Company, 2 H. & C, 184 413. 416 Swanzey v. Parker, 50 Pa. St., 441 327 Swall V. Clarke, 51 Cal., 227 441 Sweetzer v. French, 2 Gushing, 309 301 Syracuse, etc., Co. v. Collins, i Abb. N. C, 47 381 Syderbottom v. Smith, i Strange, 649 373 TABLE OF CASES. 657 Taylor v. Croker, 4 Esp., 189 232 Tatlock V. Harris, 3 Term Rep., 174 210, 391, 394 Taylor v. Jacoby, 2 Pa. St., 494 107 Taylor v. Dansby, 42 Mich., 84 124, 430 Tate V. Hilbert, 2 Ves. Jr., in i6y Taylor v. Thompson, 3 111. App., 109 418 Taylor v. Bullen, 5 Exch. Rep., 779 324 Taylor v. Binney, 7 Mass.,, 481 308 Taylor v. Dobbins, i Strange, 399 163 Talliaferro's Ex'rs. v. King's Admr., 9 Dana, 331 (35 Am. Dec, 140) 284 Taylor v. Surget, 21 N. Y.. 116 270 Tapping v. Duffy, 47 Ind., 571 332 Tenney v. Prince, 4 Pick., 385 2/0 Terry v. Bissel, 26 Conn., 23 314, 319, 322 Thompson v. Candor, 60 111., 244 151 Thatcher v. St. Andrew's Church, 37 Mich, 269 150 Thompson v. Sloan, 23 Wend, 71 85, 86 Thornton v. Dick, 4 Esp., 270 200, 206 Thompson v. Leach, Holt's Rep., 357 122 The State Bank v. McCoy, 19 P. F. Smith (Pa.), 204 431 The State v. Findley, 10 Ohio, 51 423 Thomas v. Roosa, 7 Johns., 461 85 Thatcher v. Densmore, 5 Mass., 299 168 Thalkeimer v. Brinckerhoff, 20 Johnson (N. Y.), 380 249 Thomas v. Whip, i Salk., 126 39 Thoroughgood's Case, 2 Co. Rep., 96 412, 415 Thomas v, Williams, 10 Barn. & Cress., 664 435 Thayer v. Daniels, 113 Mass., 131 252 Thrall v. Baker, 4 Metcalf, 193 327 The Freeman's Bk. v. Ruckman, 16 Gratt., 126 334 Thrall v. Newell, 19 Vt., 202 3^9 The Goshen Bank v. Bingham, 118 N. Y., 347 447 Thatcher v. Goff, 13 La., 363 342 Thornton v. Rankin, 19 Mo., 193 I33 Thomas v. Watkins, 16 Wis., 549 I43 Tibbits V. Gerrish, 25 N. H., 41 84 Tindal v. Brown, i D. and E., 167 97 Tift V. Tift, 4 Denio, 175 122 Tittle V. Thomas, 30 Miss., 122 i^o Tinsley v. Hoskins, in N. C, 340 92 ■658 TABLE OF CASES. Tilden v. Blair, 21 Wall., 241 429 Ticonic Bank v. Smiley, 27 Me., 225 321, 322 Timnes v. Shannon, 19 Iowa, 296 253 Townsley v. Sumrall, 2 Pet., 179, 586 221, 365 Townsend v. Derby, 3 Mete. (Mass.), 363 168 Todd V. Ames, 60 Barb., 862 125 Tool Company v. Norris, 2 Wall., 45 428 Town of Cicero v. Clifford, 53 Ind., 191 45^ Townsend v. People, 4 111., 326 457 Tolman v. Hannahan, 44 Wis., 133 199 Tompkins v. Ashby, 6 B. & C, 541 66, 71, 73 Townsend v. Eiley, 46 N. H., 300 468 Transportation Co. v. Kilderhouse, 87 N. Y., 430 470 Trask v. Martin, i E. D. Smith, 506 104 Trudy v. Farrar, 32 Me., 225 132 Tripp V. Curtenius, 36 Mich., 494 72 Trueman v. Hurst, i T. R., 40 433 Trust Co. V. Bank, loi U. S., 68 441, 447 Trovinger v. McBurney, 5 Cowen, 253 423 Trustees v. Lewis, 34 Fla., 424; 43 Am. St. Rep., 209 454 Trent File Co. v. Fort Dearborn, 54 N. J. L., 33 200 Troy City Bank v. Lauman, 19 N. Y., 477 187 Turner v. Peoria R. R. Co., 95 111., 134 88, 89, 461 Turnan v. Temke, 84 111., 286 151 Turner v. Keller, 66 N. Y., 66 310 Tucker v. Tucker, 119 Mass., 79 103 Tunno v. Lagere, 2 Johns. Cas., i 383 TurnbuU v. Bowver, 40 N. Y., 456 311, 330 Tyler v. Trahue, 8 B. Mon. (Ky.), 306 470 XJ Ubsdell V. Cunningham, 22 Mo., 124 81 Ulster Bank v. McFarlan, 3 Den., 553 183 Union Bank v. Beirne, i Grat., 226, 234, 539 132 Union Trust Co. v. Chicago & R. R. Co., 7 Fed. R., 513. . . 89 Union Bank of La. v. The Executors, etc., 3 N. "Y., 203. . . . 457 Union Trust Co. v. 111. R. R. Co., 117 XT. S., 434 461 Union Bank v. Willis, 3 Metcalf , 504 264 Union Bank v. U. S. Branch Bank, 3 Mass., 74 236 U. S. Bank v. Bank of Georgia, 10 Wheat., 333, 353 232 U. S. V. Isham, 17 Wall, 496 45^ U. S. V. Parker, i Paine's C. C, 156 357, 380 Uther V. Rich, 10 Adol. & Ellis, 784 439 TABLE OF CASES 659 ^^ Van Patton v. Beals, 46 Iowa, 63 134 Vandewall v. Tyrrell, Mood. & Malk., 87 363 Vallett V. Parker, 6 Wend., 616 140, 153 Vanbuskirk v. Hartford Fire Ins. Co., 14 Conn., 141 251 Valley Natl. Bk. v. Crowell, 148 Pa. St., 284 78 Verder v. Verder, 63 Vt., 38 312 Vere v. Lewis, 3 T. R., 183 175 Vermilye Co. v. Adams Ex. Co,, 21 Wall., 138 457 Vinson v. Piatt et al., 21 Ga., 135 465 Victs V. Bank, loi N. Y., 563 453 Vinton v. King, 4 Allen, 562 103, 443 Vincent v. Horlock, i Camp., 442 277, 331 Vinton v. Peck, 14 Mich., 282 140, 154, 165 Vischer v. Webster, 8 Cal., 109 407 Voorhees v. Combs, 33 N. J. L., 494 169 Voss V. Lewis, 126 Ind., 155 474 Ward V. Johnson, 57 Minn., 301 151, 153 Ward V. Howard, 88 N. Y., 74 441 Walker v. Woolen, 54 Ind., 164 81 Wallace v. McConnell, 13 Pet., 136 186 Wallace v. Douglas, 116 N. C, 659 195 Warren v. Lynch, 5 Johnson, 239 129 Warren v. Brown, 64 N. Car., 381 87 Waterbury v. Andrews, 67 Mich., 282 431 Watson V. Alley, 141 111., 284; 31 N. E. Rep., 419 442 Walpole V. Saunders, 16 Eng. C. L., 276 428 Wayne Agricultural Co. v. Cardwell, 73 Ind., 535 417 Wallace v. Loomis, 97 U. S., 146 461 Wade V. Wittington, i Allen, 561 405 Warring v. Early, 2 El. & B., 763 405 Walmefly v. Child, 4^ Washington, etc.. Bank v. Ekey, 51 Mo., 273 407 Watson V. Chesire, 18 la., 202 299, 310, 314, 322 Wait V. Pomeroy, 20 Mich., 425 399 Waren v. Briscoe, 12 La., 472 342, 346 Warrington v. Furbor, 8 East., 245 35° Walker v. McDonald, 2 Exch., 527 295 Watson, etc., v. Evans, i Hurl. & C, 662 120 66o TABLE OF CASES. Ward V. Allen, 2 Mete. (Mass.), 53 185 Ward's Case, 2 Str., 747 396 Warner v. Whitaker, 6 Mich., 133 253 Watt V. Clark, 9 Pa. St., 399 253 Ware v. Allen, 128 U. S., 590 151 Waite V. Leggett, 8 Cowen, 195 236 Watkins v. Maule, 2 Jac. & W., 237 -. 281 Wagner v. Kenner, 2 Robinson (La.), 120 107 Walker v. McDonald, 2 Exch., 531 305 Walker v. Ebert, 29 Wis., 194 144, 147, 416 Walker v. Woolen, 54 Ind., 163 92 Walker v. Alwood, 11 Mod., 190 195 Walker v. Walker, 66 Vt, 285 127 Waugh V. Russell, i Marshall 106 Ward V. The Bank of K., 7 Mon. (Ky.), 93 132 Waterbury v. Andrews, 67 Mich., 282 125 Waithman v. Elzee, i C. & K., 35 66, 72 Welsh V. Bank, 73 N. Y., 424 247 Webb V. Fairmaner, 3 M. & W., 473 108 Weil V. Tyler, 38 Mo., 545 84 Westfall V. Braley, 10 Ohio .St., 188 458 West V. Russell, 48 Mich., 74 124 Weber v. Orten, Mo., 677 251 Weston V. Penniman, i Mason, 306 177 Weeks v. Esler, 143 N. Y., 374 50 Weathered v. Smith, 9 Tex., 172 304 Webb V. O'Dell, 49 N. Y., 583 ' 323 Wenman v. The Mohawk Co., 13 Wend., 267 330 Welsh V. Barrett, 15 Mass., 380 363 Webber v. Christen, 121 111., 91 151, 153 Wegerfloffe v. Keene, i Strange, 214 188 White V. Gushing, 88 Me., 339 78 White V. Vt. & Mass. R. R.'Co., 21 How. (U. S.), 575 454 White V. Continental Bk., 64 N. Y., 316 230 White V. Howland, 9 Mass., 314 268 White V. Smith, -jj 111., 351 103, 106 White V. Richmond, 16 Ohio, 5 87 White V. Stoddard, 1 1 Gray, 258 383 White V. Continental Bk., 64 N. Y., 316 247 White V. Weaver, 41 111., 409 260 White V. Miners' Nat. Bk., 102 U. S., 658 298 White V. North, 3 Exch., 684 72 Whitehead v. Walker, 11 L. J. Exch., 168 380 Wheeler v. Miller et al., 2 Handy, 149 314 TABLE OF CASES. 66l Whithed v. McAdams, i8 Tex., 553 304 Whitmore v. Nickerson, 125 Mass., 496 151 Whitney v. Dean, 22 Vt., 561 282 Whitehead v. Taylor, 10 Adol. & E., 210 281 Wheatley v. Stroh, 12 Cal., 02 56 Wheeler v. Guild, 20 Pick., 545 153, 331 Wheeler v. Wheeler, 9 Cow., 34 131, 251 Wheeler v. Wilson, 47 N. Y., 519 103 Wheeler v. Warner, 47 N. Y., 519 105, 106 Wheeler v. Russell, 17 Mass., 258 423 Wheeler v. Warner, 47 N. Y., 519 330 Wheeler v. Webster, i E. D. Smith, i 199 Whistler v. Forster, 14 C. B. (N. S.), 258 441 Wheatley v. Williams, i M. & W., 533 70, 72 Wheelock v. Freeman, 13 Pick., 165 405 White V. Madison, 26 N. Y., 117 162 Williamson v. Watts, 1 Campbell, 552 430 Williams v. Urmston, 35 Ohio St., 296 431 Williamson v. Brown, 15 N. Y., 354 445 Williams v. Williams, 67 Mo., 667 471 Williams v. Robbins, 16 Gray, yy 132 Williams v. William.s, i Garth., 269 25 Williams v. Foster, 114 Ind., 167 73 Williams v. Forbes, 114 111., 167 169 Williams v. Urnston, 35 Ohio St., 296 126 Wilson V. Senier, 14 Wis., 380 383 Williams v. Harrison, Garth, 160 433 Wilson V. Gampbell, 68 N. W. Rep., 278 9I Wilson V. Glements, 3 Mass., 9 213 Wilson V. Mechanics' Bank, 45 Pa. St., 494 442 Wilson V. Vysar, 4 Taunt., 288 325 Wise V. Gharlton, 4 A. & E., 786 89 Wilkinson v. Johnson, 3 Barn. & Cress., 428 237 Wilkinson v. Lutwidge, i Strange, 148 237 Wilkinson v. Suteridge, i Strange, 648 232 Wilks V. Robinson, 3 Rich. (S. C.), 102 106 Wisdom V. Becker, 52 111., 346 131 Willoughby's Case, 1 lieech, 95 55 Widoe V. Webb, 20 Ohio St., 431; 5 Am. Rep., 664 420 Willis V. Barrett, 2 Stark., 29 (3 E. C. L. R.) 119 Willis V. French, 84 Me., 593 3" Willis V. Green, 5 Hill, 232 382 Wilde V. Sheridan, 21 L. J. Rep., 260 206 Wieman v. Anderson, 42 Pa. St., 311 126 41 66? TABLE OF CASES. Wiffer V. Roberts, i Esp., 261 104 Wilder v. Cowles, 100 Mass., 487 327 Wilder v. Weakley, 34 Ind., 181 133 Wierbach v. ist Nat. Bank, 97 Pa. St., 543 134 Winters v. Home Ins. Co., 30 Iowa, 172 300 Wintermute v. Post, 24 N. Y., 420 195 Wilder v. Merchants' Bank, 64 Ala., i 182 Willoughby v. Moulton, 47 N. H., 205 160 Wookey V. Pole, Barn. & Aid., i 27 Wolf V. Van Metre, 23 Iowa, 397 125 Worcester County Bank v. Dorchester & Milton Bank, 10 Cush., 488 - 149, 440 Woodfalk V. Leslie, 2 Nott v. M., 585 71 Wooley V. Sergeant, 8 N. J. L., 323 56 Woodworth t. Hunton, 40 111., 131 260, 261, 442, 446 Woodman v. Churchill, 52 Me., 58 442 Woodsmer v. Cole, 69 Cal., 142 442 Woodruff V. Hinman, 11 Vt, 592 423 Woodin V. Frazee, 38 N. Y. Sup., 190 451 Woodruff V. Hill, 116 Mass., 310 469 Woodward v. Campbell, 22 Conn., 459 150 Woodruff V. Merchants' Bk., 25 Wend., 673 449, 454, 455 Worden v. Dodge, 4 Denio., 159 88 Worden v. Dodge, 4 Denio., 159 78, 84 Woolen V. Ulrich, 64 Ind., 120 81, 82 Worth V. Case, 42 N. Y., 363 78 Woodbury v. Roberts, 59 la., 348 78 Works V. Hershey, 35 la., 340 80, 103, 106 Wood River Bank v. First National Bank, 36 Neb., 744; 55 N. W Rep., 239 104 Wood V. Price, 46 111., 435 86 Wood V. Brush, •/2 Cal., 224 257 Woods V. Wilder, 43 N. Y., 164 383 Wood V. Muller, 3 Robinson (La.), 299 107 Wood V. Goodfellow, 43 Cal., 187 330 Wood, etc., Bk. v. First Nat. Bk., 36 Neb., 744 368 Worth V. Case, 42 N, Y., 362 144 Woodhull V. Holmes, 10 Johns. R., 231 140 Woodford v. Dorwin, 3 Vt., 82 164 Woodbury v. Woodbury, 47 N. H., 71 161 Wright V. Travers, 73 Mich., 494 89, 92 Wright V. Hart, 45 Pa. St., 454 84 Wright V. Irwin, 33 Mich., 32 103 Wright V. Gear, i Root, 474 423 TABLE OF CASES. 663 Wright V. Shelby et al., i6 B. Mon., 4 153 Wright V. Wright, i Ves. R., 41 1 289 Wright V. Dyer, 48 Mo., 525 472 Wynne et al. v. Raikes et al., 5 East., 514 213 IT Yates V. Nash, 29 L. J. C. P., 306 119 Yates V. Lyon, 61 N. Y., 344 124 Yarborough v. Bank of England, 16 East., 12 276 Yale V. Dederer, 22 N. Y., 450 125, 431 Young V. Glover, 3 Jurist (U. S.), 637 262, 275, 277 Young V. Ruddle, i Salk., 627 189 Young V. Ball, 9 Watts. (Pa.), 139 (1839) 293 Young V. Grote, 4 Bing., 353 403, 410 Young V. Cole, 3 Bingham (N. C), 724 320, 326, 327, 335 Yocum V. Smith, 63 111., 321 407 York V. McNutt, 69 Am. Dec, 607 252 Z Zeigler v. Geary, 12 Ser. & R., 43 307 Zimmerman v. Anderson, 67 Pa. St., 421 89 Zimmerman v. Rote, 25 P. F. Smith (Pa.), 188 405, 406 INDEX. ABSOLUTE ACCEPTANCE, defined, i86 n. ACCEPTANCE, defined, i8o, 182 n, 246, 558. form of, 182 n. may be by parol, 182 n. must be written when, 185 n. may be of bill not yet drawn, 182 n. may be by telegram or telephone, 183 n. may be implied from detention, 183 n. promise to pay, amounts to, 184. when need not be, 184. general methods of, 185. can only be made by the drawee, 196. discounting by drawee is not, 180. may become and indorser, 181. drawee may sue upon contract, 181. may be for honor or supra protest, 199. may be by stranger when in blank, 199 n. may be by a member of a firm, 199 n. joint parties must all accept, 199 n. may be by an agent, 199 n. effect of, 116 n, 202 n, 205, 380 n. prima facie evidence of effects of drawer in hands of acceptor, 174, 177- classification of acceptances, 186 n. kinds of, 186 n, 530. absolute, 186 n, 188. conditional, 186 n, 188. implied, 186 n. local, 187 n. partial, 187 n, 189 n, 190 n, 195 n. virtual, 187 n. presentment for, when necessary, 379, 532. how made, 379, 528. when excused, 380 n. may be delayed, 380 n. 666 INDEX. ACCEPTANCE, may be express, constructive, oral, or written, 183 n, 185 11, 207-221. irrevocable, 206 n. in what name, 182 n, 196-199. while bill is incomplete, 182 n, 184 n. of bill not yet drawn, 182 n, 184 n. of bill overdue, 184 n. must be according to tenor of bill, 180, 188-195, 188. nee dnot be dated, 184 n. qualified acceptance, 186, 188, 530, 559. rights of parties imder, 530. conditional acceptance, loi n, 186 n, 188, 530. defined, 186. absolute acceptance, 186. who may accept, 118 n, 178, 196, 199, 538. by drawer, 118 n, 178 n. necessity for delivery by acceptor, 200, 202. forms and varieties of, as verbal, written, and implied from conduct, 182 n, i83n, 184 n, 187 n, 538. payee may refuse partial acceptance, 195 n. evidence of, 182 n. may be cancelled, 204. may not be cancelled after delivery, 205, 206. when necessary, 207, 379. written acceptance, 207. verbal or parol acceptance, 207, 211. by telegram, 183 n. implied from conduct, 183, 529. detention of bill, 183-184 n, 529. destruction of bill, 183-184 n, 529. on separate paper, 212, 528. of unaddressed bill, 117. promise to accept, 182, 208, 209, 217, 218, 528. parol promise to accept, 182, 207, 209, 211. accommodation acceptor, see "Accommodation." may be of a bill yet to be drawn, 209, 211, 213, 216, 220, 221. may be revoked before delivery, 213. what bills must be accepted, 185. rights of holder when refused, 380 n, 534. time allowed, 529. in case of need, 557. time of acceptance, 558. liability of acceptor, 180, 228-232, 231, 232. INDEX. 667 ACCEPTANCE, facts which acceptor is estopped to deny, or warranties, 228- 232, 232 n, 233, 237. see "Estoppel." refusal of, rights of holder, 380 n. damages against acceptor, 219. for honor or supra protest, 222, 538, 542. liability of acceptor supra protest, 224, 227 n. for whom made, 227 n, to whom liable, 227 n. steps necessary to consummate liability of, 224, 225, 226, 539. liability of, 539. presentment to drawee at maturity, 224, 225, 226. protest on nonpayment by drawee, 225, 226. of check, 405 n. ACCEPTANCE FOR HONOR, see "Acceptance." see generally, 222. ACCEPTOR, drawee may become an indorser, 181. who may accept, 186. of bill, defined, 109 n, 181. relation to bill, 116. liability of, 178, 503. see "Acceptance." facts which he is estopped to deny, or warranties, 228-232, 232 n. see "Estoppel." capacity of, warranty by, or estoppel of indorser, 310 n, 228- 232, and note, accommodation acceptor, see "Accommodation." supra protest, liabiHty of, 222-227, 227 n. steps necessary to consummate liability of, 222-227, 227 n. presentment to drawee at maturity, 222-227, 227 n. protest on nonpayment by drawee, 222-227, 227 n. ACCOMMODATION, accommodation party defined, 299 n, 563. liability of, 267, 299 n, 563. persons accommodated, 382 n. diversion, 300 n. 668 INDEX. ACCOMMODATION, overdue accommodation paper, 300 n, 442 11. indorsement, 299 n. ACCORD AND SATISFACTION, see "Defenses.'' ACTION, who may sue, 250. when action must be brought, 392 n. ADMINISTRATORS, see "Executors and Administrators," 131 n. ADMISSIONS, see "Warranties." AGENTS, see "Principal and Agent," also 132 n. liability of, 508. capacity to make negotiable contracts, 132. authority of, 132 n. joint agents, 132 n. signature of, 132 n, 162 n. married woman may be, 125. how appointed, 126 n. form of signature, 162 n. signature of cashier, 162 n. may accept bills of exchange, 199 n. ALLONGE, defined, 261, 277 n. ALTERATION OF INSTRUMENT, effect of, 525. as a defense, 384-402, 473. possible through negligence of maker, 403-407. by a stranger, 401 n. material, 400 n, 401 n, 402 n, 525. immaterial, 402 n, 525. through negligence, 403-407, 407 n. writing contract over indorsement in blank, 265, 266, 295 n, 297 n, 308, 331 n. warranty by, or estoppel of, indorser, 287 n, 310 n, 312 n. American Bills of Exchange act. in general, 479-550- AMERICAN BILLS OF EXCHANGE ACT, in general, 479-550- INDEX. 669 AMOUNT, Ambiguity, see 496, 491. see "Bill of Exchange;" "Promissory Note." ANNE, STATUTE OF, 3 AND 4, see 26, Tj. ANTECEDENT DEBT, see "Consideration." ASSIGNMENT, defined, 248. the common law rule, 248. common law rule abrogated, 249. rights which assignee receives, 248-249. rights of assignee, 250. is subject to equities, 250, 252. assignability distinguished from negotiability, 248. may be by parol, 250. may be in writing, 250. whether writing an indorsement or assignment, 340. of non-negotiable instruments, 86 n, 250. action by assignee, 86 n, 338, 339, 250, 251. notice of assignment, 250-251, 252. notice, by whom given, 252. consideration, 263. subject to equities between prior parties, 86 n, 250, 252, 262. distinguished from an indorsement, 248. requirements in case of, 251. ATTORNEY'S FEES, effect of a provision to pay, gin. statutory provisions, 92 n. liability, of indorser for, 293 n. BANKRUPTCY, a defense, 431 n. of holder, transfer by operation of law, 274 n. indorsement by bankrupt, 274. BANK BILLS, see "Negotiable Contracts." see 149, 457 n. BANK NOTES, defined, 457, 458. see "Negotiable Contracts." stolen, rights of bona fide holder, 149. purpose of, 458. 670 INDEX. BIBLIOGRAPHY, Ames on Bills and Notes, 44. Batemen on Commercial Paper, 44. Bayley on Bills, 44. Beauves Lex Merc. — Bills of Exchange, 44. Benjamin's Chalmers on Bills, Notes and Checks, 44. Bigelow on Bills and Notes, 44. Bigelow's cases on Bills and Notes, 44. Bryant & Stratton's Commercial Paper, 44. Byles on Bills and Notes, 44. Chalmers on Bills, Notes and Checks,, 44. Chitty on Bills of Exchange, 44. Cunningham on Bills of Exchange, 44. Daniels on Negotiable Instruments, 44. Edwards on Bills and Promissory Notes, 44. Hartman on Bills of Exchange, 44. Hough's Article in Vol. 2, American and English Encyclope- dia of Law, 44. Huffcut's Negotiable Instruments, 44. Hulteau on Bills, 44. Johnson's cases on Bills and notes, 44. Kyd on Bills, 44. Malynes Lex Mercatoria, 44. Marius on Bills and Notes, 44. Norton on Bills and Notes, 44. Paige's cases on Commercial Paper, 44. Parsons on Bills and Notes, 45. Pomeroy's Smith's Mercantile Law, 45. Pothier de Exchange, 45. Randolph on Commercial Paper, 45. Scrutten's Elements of Mercantile Law, 45. Sharswood's Bayley on Bills, 45. Smith's Mercantile Law, 45. Story on Bills and Notes, 45. Story on Promissory Notes, 45. Tiedeman on Commercial Paper, 45. Wood's Byles on Bills and Notes, 45. BILL OF EXCHANGE, see "Negotiable Contracts." purpose of, 41 n, 42 n. defined, 46, and note, 245, 526. kinds of, 51. foreign bill, 23, 25 n, 51 n, 552. inland bill, 23, 25 n, 51 n, 552. INDEX. 671 BILL OF EXCHANGE, origin of bills, 21. parties defined and enumerated, 51 n. form, 50 n. must be written, 47 n, 484. may be written with pen or pencil, 47 n. must not be under seal, 50 n. essentials in general, 47-50. indicia of negotiability, 174-177, 554. origin of negotiability, 23-27, 41 n. date, 163, 163 n, 556. place of date, 165 n. necessity for and meaning of "value received," 130, 168 n, 176. days of grace, 97 n, 104 n, 105 n. order contained in bill, 54-59, 54 n. certainty as to terms, 54. uncertainty as to event, 57 n. uncertainty as to time, 57 n, 176. payment out of particular fund, 57 n, 88 n, 100, 102 n, 17s, -^77- giving holder option between payment in money or some other thing, 84 n, 91 n. payable on demand or at sight, etc., 102 n, 442 n. no time of payment expressed, 105 n, 164 n. time of payment, blank, 164 n. payable in installments, 94 n, 443. must be for payment of monev only, 58 n, 53, 54, 83-89,- 84 n. payment in property other than money, 83-89. option given holder, 84 n. performance of other acts in addition to payment of: money, 86 n, 91 n. definition of money, 85 n. amount blank, 164 n. amount must be certain, 54, 90-94. interest, 92, 92 n. exchange, 93 n. payable in foreign money, 84 n, 85 n, 86 n, 87 n. specification of parties, 155-162. signature of drawer, iii n, 114, 115, 155-162, 160 n. certainty as to parties, 54, 109-134. designation of drawee, 196, 197, 199. designation of payee, 109-134, 118 n. 672 INDEX. BILL OF EXCHANGE, and promissory notes compared, yjj. and checks distinguished, 448-455. in sets, 543. acceptances of two or more, 543. where different parts are negotiated, 543. payment of, 544. discharge of one, effect of, 544. what bills are negotiable, 554. payable at a future time, 555. payable on demand, 555. omission of date, 556. ante-dating, 556. post dating, 556. payable to order of drawer, 196-199. payable to fictitious person, 112, 113, 118 n. delivery, 54, I35-IS4- in escrow, 146, 152, 153. discount of bill by drawee before acceptance, 178-187. relation of dnnvee to bill before acceptance, 28, 178-187, 190 n. acceptance, see "Acceptance.'' accommodation parties, see ''Accommodation." non-negotiable bill, 84 n, 117 n, 250. liability of drawer, 161 n, 181, 185, 186. warranties or facts which the drawee is estopped to deny, _ 203-205. liability of acceptor, 180, 228-247, 232 n. see "Acceptance." facts which acceptor is estopped to deny, 228-247, 232 n. see "Estoppel;" "Warranties." liability of indorser, see "Indorsement." sets of, 51 n. BILLS OF LADING, see "Negotiable Contracts." defined, 459. purposes of, 459. negotiable by statute, 459. BIOGRAPHY AND ORIGINAL, see 21-32. BLANK, indorsement in blank, 258 n, 259 n, 295, 304 n, 305 n. indorsement written on blank note, 164 n, 419 n. INDEX. 673. "BOHEMIAN OATS," NOTES, see 416 n. see "Defenses.'' BONA FIDE HOLDER, defined 434, 441 n. see "Purchaser for Value without Notice." rights of, 144, 147, 148, 149, 152 n, 153 n, 434-447- BURDEN OF PROOF, as to whether one is a purchaser for value without notice, 167 n, 427 n. BONDS, defined, 453 n. coupons, 454 n. CAPACITY, of parties to contract, 121 n, 124 n, 126 n, 127 n, 129 n, 132 n, 133 n, 561. see "Defenses." of drawee, estoppel to deny, 232 n. of prior parties, warranty by, or estoppel of indorser, 282 n, 295 n. CASHIER, see "Agent," and 162 n. CERTAINTY, as to order in bill or promise in note, 54, 62. as to amount to be paid, 90-94, 484. as to parties, 54, 109-134, 553- CERTIFIED CHECKS, see "Negotiable Contracts." effect of, 452 n, 544. CERTIFICATE OF DEPOSIT, see "Negotiable Contracts." CERTIFICATE OF STOCK, see "Negotiable Contracts." defined, 461. negotiability of, 461. CERTIFICATE OF PROTEST, form of 369. i CHECKS, origin, or history of, 28. defined, 448, 45° n, 545- not entitled to grace, 104. •674 INDEX. CHECKS, memorandum checks, 451 n. defined, 451 n. nature of, 451 n. form of, 450 n. drafts on bank in another state, 450 n. effect of delay in presentment, 450 n. checks and bills distinguished, 449. presentment and demand of, 450 n, 545. payment upon unauthorized indorsement, 453 n, liability of banker for failure to honor, 453 n. and bills of exchange distinguished, 448-455. when should be presented, 452. where parties reside in same place, 542. where parties reside in different places, 542. genuineness of terms contained in bill, 228 n, 231 n, 233-240. facts wliich the indorser is estopped to deny, 282 n, 310-313. that the bill or note will be accepted and paid, 282 n, 310 n. genuineness of instrument, 282 n, 310 n. that the instrument is a vaild and subsisting obligation, 310 n. that the obligation of all prior parties are valid, 294 n, 310 n. capacity of prior parties, 282 n, 310 n. that he, as indorser, has title, and the right to transfer, 282 n, 310 n. indorser without recourse, 298 n, 310 n, 314-322, 319 n, 322 n. COLLECTION, see "Attorney's Fees." COMMON LAW CONTRACTS. Negotiable and common law contracts, distinguished, 38. CONDITIONS, commercial contracts must not contain, 74, -jj n. will be sustained if sure to happen, 79 n. reason for the rule, 79 n. may be imposed by indorsement, 81 n. inconsistent, will be disregarded, 81 n. if changes time of payment simply, will be sustained, 81 n. must appear upon contract, 82 n. INDEX. 67s CONDITIONAL ACCEPTANCE, defined, 186 n. in general, 186 n. see "Acceptance." CONDITIONAL INDORSEMENT, defined, 297 n. in general, 297 n. see "Indorsement." CONFLICT OF LAWS, instrviment executed in one state and payable in another con- trolled by what law, 463-470, and notes, usury laws, 274 n, (463-492 n). intention of parties, 463-470, and notes, intent to evade law, 463-470. CONSIDERATION, need not be stated, 167. presumed, 167, and note. what will support, 169 n. natural affection not sufficient, 169 n. may be inquired into, 169 n. defined, sufficiency, 167, 169 n, 563. money consideration, 170 n. other than money, 170 n. pre-existing debt, 172 n, 563. necessity for and rneaning of "value received," 168 n. bill or note imports a consideration, 167 n. want or failure of, as a defense, 168 n. for assignment of non-negotiable instrument, 263. of indorser's contract, 294. illegality of, 399, 420-429. statutory prohibition, 372 n, 320 n, 321 n, 399, 420-429. violation of the Sunday laws, 165 n. other statutes, 420-427. common-law prohibition, 399, and notes, contravention of public policy, 399, and notes, in general, 420-429. restraint of trade, 429. effect of illegality, 420-429. illegality as being total or partial, 420-429. accommodation paper, see "Accommodation." suretyship contract, 471. contract of guaranty, 475. presumption of, 494. want of, effect of, 495- 676 INDEX. CONSTRUCTIVE DELIVERY, see "Delivery.'' CONSTRUCTIVE NOTICE, see "Notice." CONTRIBUTION, as between indorsers, 233 n. as between accommodation indorsers, 299 n. CORPORATIONS, power to execute commercial contracts, 127 n. not allowed to execute accommodation contracts, 128 n. power to indorse commercial contracts, 128 n. the form of their contracts, 129 n. power of their agents, 129. indorsement by, 274 n, 492. CORPORATIONS— PUBLIC^ power to make commercial paper, 129. COUPON, defined, 453 n. see "Negotiable Contracts." COUPON BONDS, defined, 453 n. see "Negotiable Contracts." COVERTURE, see "Married Women." CUSTOM OF MERCHANTS, defined and explained, 21-32. DAMAGES, see liability of "Acceptor;" "Maker;" "Drawer;" "Indorser." DATE, see "Non-Essentials," 163. of bill or note, 163. ante and post-dating, 165 n, 556, 488. effect of dating on Sunday, 165 n. where placed, 165 n. mistake in, 166 n. presumption as to, 488. when may be inserted, 489. blanks, when filled, 489. DAYS OF GRACE, defined, 104 n. allowed on notes and bills, 97 n. INDEX. 677 DAYS OF GRACE, upon suretyship or guaranty, 472,476. not allowed on checks, 104 n. what instruments entitled to, 104 n. where grace is allowed, when is payment due, 104 n. may be dispensed with, 105 n. what days are hoHdays, 105 n. when grace is allowed, when payment demanded, 104 n. DEATH, of holder, presentment may be delayed, 382. of holder, transfer by operation of law, 2^2, n, 332 n. of joint payee or indorsee, rights of survivor, 332 n. DEFENSES, general classes of, 398 n. cut off by transfer do not again attach, 260 n, 261 n. as against immediate party, and as against purchaser for value without notice, 261 n, 418 n, 419 n. as real or personal, 398 n. real defenses, 384-462, 398. personal defenses, 398, 408,-419 and notes, coverture, 399 n, 430. instruments executed by married woman, 133 n, 430 n. indorsement by married woman, 273 n, 436 n. infancy, 400 n, 430-433 and note. instruments executed by, 131 n, 132 n, 378 n, 430. notes for necessaries, 430 n. notes for torts, 430 n. indorsements by, 273 n, 321 n. persons under guardianship, 431. persons non compos mentis, 399-402 n. instruments executed by, 132 n. indorsements by, 321 n. drunken persons, 431 n, 432 n. instruments executed by, 431 n, 432 n. instruments avoided by statute, 427 n. bankruptcy, 431. usury, 429 n, 430. alterations, 232, 399, 384-402. forgery, 228-232. fraud, 399 n, 232 n, 4o8-4i9> 4^6 n, 417 n. personal defense, 416 n. rights of bona fide holder, 417 n. statutory provisions, 417 n. "Bohemian Oats" notes, 416 n. note obtained by, 418 n. 42 678 INDEX. DEFENSES, want or failure of consideration, 399 n. illegality of consideration, 399 n, 420-429. personal defense, 420. when it exists, 427 n. illustrations of, 428 n, 429 n. statutory prohibition, 321 n, 317. violation of the Sunday laws, 165 n. other statutes, 425. common-law prohibition, 399 n, 427 n. contravention of public polic) , 427 n, 430 n. in general, 428 n. restraint of trade, 428 n. effect of illegality, 420-429. illegality as being total or partial, 420-429. want of delivery, 399 n. discharge of instrument and of the parties thereto, 399, 473. payment, 399 n. accord and satisfaction, 399 n. discharge by agreement, 399 n, 473. discharge of drawer or indorser by prejudicial acts or neglect of holder, 282-294. discharge by diversion, 300, 301, 473. statute of limitations, 38-48. DEFINITIONS, acceptance, 182 n. acceptor, 51 n. accommodation parties, 299 n. bank notes, 457. bill of exchange, 46. foreign bill, 51 n. inland bill, 51 n. in general, 481. , bill of lading, 459. certificate of stock, 461. check, 450. coupon, 454. coupon bonds, 453. custom of merchants or law merchant, 20-32. drawer, 51 n. drawee, 51 n. due bill, 462. guarantor, 475. indorsement. 2j8, j.qo, 255-263. INDEX. 679 DEFINITIONS, indorser of bill, 255-263. of note, 255-263. , letter of credit, 456. maker, 53 n. material alteration, 399 and notes, memorandum check, 451 n. money, 83, 84 and notes, payee of bill, 51 n. payee of note, 53 n. promissory note, 52. receiver's certificate, 461. suretyship, 471. United States treasury notes, 457. warehouse receipt, 460. DELIVERY, defined, 150 n, 560. kinds of, 150 n. to an agent, 150 n. of bill or note, 54, 135 n. the necessity of, 143, 144. does execution include delivery, J41, 490. does indorsement prove, 142. note not good until, 145. conditional, 146. fraudulent, effect of, 146, 151 n. obtained without, 149. constructive, 150 n. when made, 151 n. when note to be signed by others, before, 151 n. cannot be made after death of maker, 151 n. to a fictitious person, effect of, 152 n. may be compelled, 152 n. maker must part with possession, 152 n. maker not liable unless, 153 n. on Sunday, 154 n. parol evidence admissible, 154 n. , in blank, 164 n. without date, 164 n, , without stating the amount, 164 n. through negligence, 152 n. after death of maker, 151 n. actual or constructive, 150 n. 68o INDEX. DELIVERY, escrow, 146, 150 n, 152 n. must not be to payee, 153 n. may be placed in hands of payee, when, 153 n. by acceptor, 200-206. , by indorser, 278-282. sufficiency of, 150 n. transfer by, 32. see "Transfer." conditional, 151 n. presumption as to time of, 152 n, 490. may be rebutted, 152 n. DEMAND, when to be made, instrument payable on demand, 74 n, 302 n, 282-294, 487. upon whom. effect of failure to demand, instrument payable on, when over-due, 442 n, 487. DISCHARGE OF INSTRUMENT], as a defense, 293 and notes, how, 523. payment, 473. by operation of law, 356-358. by agreement, 399. discharge of drawer or indorser by prejudicial act or neglect of holder, 282-294 and notes, 374-376. see "Suretyship." when persons secondarily liable, 523. DISCOUNT, of bill by drawee before acceptance, 178-187. of paper without date, 165 n. DISHONOR, when dishonored, 512, 571. see "Notice of Dishonor." by non-payment, 574. , by non-acceptance, 571. DIVERSION, of accommodation paper, 300 n. of suretyship contract, 473. DRAWEE, duty of, 231. of bill, defined, 109 n. INDEX. 68l DRAWEE, may discount the bill, i8i. may become an indorsee, i8l. may become an indorser, i8i. may accept supra protest, iSi. may sue prior parties, iSi. , designation of, 198, 199. in case of need, 527. relation to bill before acceptance, 27, 196, 228. not liable until acceptance, 178-187. warranties or admissions of, 228, 232 n. must know handwriting of drawer, 231 n, 233. need not know handwriting in body, 231 n. presumed to know handwriting of drawer, 231 n, 233, 237. presentment, when dead, 533. DRAWER, not liable until acceptance, 178, 198. of bill, defined, 109 n. signature of, 117. rights and liabilities before acceptance, 27, 181, 196, 503. after acceptance, 374. liability of, 180, 182 and notes, liability of and indorser compared, 375. of check, 449-453 and notes, discharge from liability by acts or neglect of holdei-, 282-294, 374- existence of, estoppel of acceptor to deny, 233-240 and notes, signature of, estoppel of acceptor to deny, 233-240. authority to draw, estoppel of acceptor to deny, 385. capacity of, estoppel of acceptor to deny, 233-240. accommodation drawer, see "Accommodation." capacity of, warranty by, or estoppel of, indorser, 282-294 and notes. DRUNKARDS, power to make negotiable contracts, 133 n. DRUNKENNESS, as a defense, 431 n, 432 n. instruments executed by drunken persons, 431 n. DUE BILLS, see "Quasi-Negotiable Contracts." defined, 69 n, 462. distinguished from promissory notes, 72 n, 73 n. 682 INDEX. EXCHANGE, payment of an amount certain with, 93 n. EXCHEQUER BLLS, see "Negotiable Contracts." EXECUTORS AND ADMINISTRATORS, power to execute and deliver negotiable contracts, 131. power to transfer negotiable instrument, 274 n, 281. transfer to, on death of holder, 274 n. presentment to 381 n. EQUITABLE ASSIGNMENT, see "Assignment."' EQUITY, see "Purchaser for Value without Notice.'' equitable assignment, 249. relief against inadvertent failure to indorse, 249, 250, 447 n. EQUITIES, what is meant by, 253. what equities may be interposed, 254. title of bona fide holder for value not subject to, 137, 261 n. see "Defenses." assignee of non-negotiable instrument takes subject to, 86, 249, 250, 251, 252, 254. see "Defenses." effect of failure to indorse, 249, 250, 255 n, 328 n, 447 n. transfer of over due pater, subject to, 330 n, 333n. ESCROW, delivery in escrow, 152 n, 153 n. ESSENTIALS, enumerated, 54. see "Bills of Exchange;'' "Promissory Notes.'' in writing, not sealed, 47 n, 50 n. an order in a bill, 31 n, 54-59, 55 n. a promise in a note, 59. to pay money, 54, 83, 84 n, 86 n, 87 n, 88 n, 89 n. order or promise must be absolute, 54, 74, JJ n, 79 n, 80 n, 81 n, 82 n. amount must be certain, 54, 90, 90 n, 91 n, 92 n, 93 n, 94 n. time must be certain, 54, 95 n. parties must be definite, 54, 109. must be signed, 54, 155. must be delivered, 54, 135 n. not payable out of a particular fund, 177, 193 n. INDEX. 683 ESTOPPEL, of maker to deny delivery, if negligent, 149. facts which acceptor is estopped to deny, 228-232, 232 n, genuineness of drawer's signature, 228-232, 232 n, 236, 237- existence of drawer, 232 n. capacity of drawer, 232 n. authority to make draft, 232 n. competency of payee to indorse, 232 n, 233-240. facts which acceptor does not admit, 233-240. genuineness of payee's or subsequent indorsements, 233-240, 240 n. payment upon. checks as negotiable instruments, 448-455, and notes, presentment, protest, and notice of dishonor, effect of delay, 450 n, 451 n, 545. rights of holder against bank, 449-452, and notes, certification and acceptance of checks, 452 n, 546. effect upon drawer's liability, 452 n, 544. failure of bank to honor check, 453 n. payment by, 449, 450. when operates as an assignment, 451, 546. FAILURE OF CONSIDERATION, see "Consideration." FEES, notarial fees, see "Collection." FEME COVERT, see "Married Women;" "Defenses." FOREIGN BILL, see "Bill of Exchange." FORGERY, defined, 246. by wrong payee of same name, 119 n, 240-247. as a defense, 233-240. estoppel of, warranties by, indorser, 312 n, 318. of bill in respect to terms, acceptor not estopped, 233-240. of indorsements, estoppel of acceptor, 240-247. of drawer's signature, estoppel of acceptor, 228-232, 231 n. FORM, of bill of exchange, 50 n. of promissory note, 52 n, 53. indicia of negotiability, I74-I75- see "Bill of Exchange;" "Check;" "Promissory Note." 684 INDEX. FRAUD, as a defense, 259 n, 289, 399 n, 408-419, 416 n. rights of bona fide holder, 417 n. statutory provisions, 417 n. "Bohemian oats" notes, 416 n. where deUvery obtained by, 418 n. obtained in blank, 419 n. GOLD AND SILVER CERTIFICATES, see "Negotiable Contracts." defined, 459. Goldsmith's notes, 27. GOVERNMENT BONDS, see "Negotiable Contracts." GRACE, see "Days of Grace." GUARANTY, , whether writing an indorsement or guaranty, 209-219. defined, 475. in general, 475-478. form of contract, 475. consideration for, 475. negotiability of contract, 476. not entitled to grace, 476. classification of, 476. necessity for presentment, demand and notice, 476. liability of guarantor, 477. how discharged, 477. rights of guarantor, 477. GUARDIANS, power to make negotiable instruments, 133 n. power to transfer instrument, HISTORY, - of bills of exchange, 21-32. HOLIDAYS, what days are, 105 n. note or bill falls due on, 105 n. Holt's (Lord) objection to the negotiability of promissory notes, 25 and note. HOLDER FOR VALUE, what constitutes, 502. duties of, 569. INDEX. 685 HOLDER IN DUE COURSE, what constitutes, 502. HONOR, acceptance for honor, 222, 224, 227 n, 538, 542. HUSBAND AND WIFE, see "Married Women." ILLEGALITY, see "Denfenses." illustration, 428 n. when it exists, 427 n, 428 n. burden of proof, 427. usury, 429. , ILLEGAL AGREEMENTS, illegality as a defense, 420-429. see "Consideration.'' effect of renewal of, 428 n. what contracts are, 428. illustrations of, 428 n, 429 n. IMPLIED ACCEPTANCE, see "Acceptance." IMMATERIAL ALTERATIONS, effect of, 402. see "Defenses." , INCOMPLETE CONTRACT, liability of person executing, 419 n, 559. INDICIA, I see "Non-Essentials." of negotiability, 174-177, 554. see "Bill of Exchange;" "Promissory Note." bills and notes need not contain, 174. INDORSEE, duty of, 377. see "Indorsement;" "Purchaser for Value without Notice." not subject to equities, 260 n. may have better title than his indorser, 260 n. INDORSER, , order in which liable, 507. when deemed, 506. in an action by what must show, 370-383- admission of, see "Warranties." 686 INDEX. INDORSER, consideration of indorser's contract, 294 n. duty of, 377. liability of drawer and indorser compared, 375. of bill or note, defined, 109 n, 255 n. may limit his liability, 258 n. accommodation indorser, see "Accommodation." amount of liability, 293 n, 294 n. liability for attorney's fees, 293 n. not liable to each other in contribution, 293 n. where less than full amount paid, 294 n. capacity of, warranty bv, or estoppel of, subsequent indorser, 310-313, 310 n. liability of, 164 n, 180, 250 n, 274, 282-294, 283, 293. discharged how, 265. see "Indorsement." liability for annual interest, 284, 288. liable only upon condition, 285, 287. discharge of, by act or neglect of holder, 282-294, 310. INDORSER WITHOUT RECOURSE, contract of, 322 n. warranties of, 322 n, 315-322. * INDORSER, SPECIAL, liability of, 304-309. defined, 296. INDORSEMENT, mode of, 256. when necessary, 257 n. negotiable by. defined, 249, 255 n, 263 n, 295 n, 496. upon blank instrument, 164 n. by whom made, 265-275. when made, 332 n. formal requisites, 250, 255, 261, 276, 565. must be written, 250, 276 n. must be on the instrument indorsed, 250, 260. must be by payee or subsequent holder, 264. kinds of, 295 n, 497. to whom, 257 n. indorsement or assignment, 249. indorsement or guaranty, 265-275. of entire instrument, 257 n, 332 n, 496. in blank, 250 n, 295 n, 304-309, 497. right to fill up, 331 n. INDEX. 687 INDORSEMENT, may be changed to a special, 308. written contract over indorsement in blank, 250 n, 295 n,. 296 n. a guaranty m.ay be, 256. applies to negotiable contracts only, 256. upon non-negotiable contract is an assignment, 256 n. effect of transfer without, 258 n. when contract may be transferred without, 258 n. presumed to be bona fide, 260 n. burden of proof, 260 n. may be with pen or pencil, 277 n. effect of after maturity, 312 n. negotiability cannot be restrained by, 295-303. general effect, 301. effect of, 301 n. , indorsement written on blank bill or note, 164 n, 265, 415- 418. absolute, 298 n. qualified, 498. in full, 296 n. instrument originally payable to bearer, 261-263, 295- 303, 296 n, 304-309, 304 n. of instrument overdue, 301 n, 302 n, 326-335. without recourse, 298, 314-322, 322 n. warranties, 322 n. contract of, 322 n. , conditional indorsement, 295 n, 297 n, 498. defined, 299 n. restrictive indorsement, 295 n, 297 n, 497. defined, 297 n. effect of, 498. nature of indorsement, 255-263 and notes, 301 n. as a contract, 140, 256 n, 258 n, 282-294, 301 n, 350. as a transfer, 180, 301. requisites of indorsement, 255-263, 261, 276. no particular form required, 276, 276 n. following tenor of instrument, 250 n. who may indorse, 273 n. necessity for delivery, 278-282, 282 n. explained by parol evidence, 258 n, 259 n. anomalous or irregular indorsements, 264-275, 259 n, 275 n. by person whose name does not otherwise appear, 264- '275- ' 688 INDEX. INDORSEMENT, (anomalous or irregular indorsements), defined, 275 n. , indorsement before transfer by payee, 264-275. his liability, 275 n, 506. title of indorsee, 249 n, 250 n, 260. who may take by, 250 n. by an infant, 273 n. by non compos mentis, 273 n. by administrator, 274 n. by husband at common law, 274 n. by a bankrupt, 274 n. , by a partner, 274 n. by a corporation, 301. not subject to equities between original parties, see "De- fenses." I forgery of indorsement, 246-247, 312. accommodation indorser, see ''Accommodation," and 299 n, 495- 1 liability of, 299 n. by agent, 301 n. by joint payees, 273. right of holders to strike out, 304-309, 331 n, 500. when it may be made, 332 n. governed by the lex loci, 333 n, 334 n, 356, 463-470, 469 n. 470 n. of non-negotiable instrument, 329 n. liability of indorser, 179, 250 n, 282-294. warranties or facts which indorser is estopped to deny, 282, 310-313, 310 n. that the bill or note will be accepted and paid, 282, 310 n, genuineness of instrument, 310 n. that the instrument is a valid and subsisting obligation, 310 n. that the obligations of all prior parties are valid, 310 n. capacity of prior parties, 281, 310 n. that he, as indorser, has title and the right to transfer, 282, 310 n. indorser without recourse, 298, 299, 282, 310 n, 314-322. warranties or facts which transferrer without indorsement is estopped to deny, 323-335. presumption as to time of, 260 n. presumption as to place of, 261 n. must not be partial, 332 n. liability of a special indorser, 304-309. INDEX. 6891 INDORSEMENT, delivery necessary, 302. after payment, effect of, 330 n. mistake in, 33in. genuineness of, estoppel of acceptor, 240-247, 240 n. discharge of indorser, 282-294, 375. competency of payee to indorse, estoppel of acceptor, 240-247. necessity for, to transfer instrument, 257 n. effect of failure to indorse by mistake or otherwise, 250, 251, 251 n. mistake in, 331 n. INFANCY, , capacity of, 121. as a defense, 121 n, 430-433, 433 "■ instruments executed by infants, 121 n, 430 n, 433 n. joint note of infant and adult, 121 n. indorsement and transfer by infant, 273 n, 320 n. infant liable for necessaries, 121 n. infants liable for torts, 122 n. infant as payee, 122 n. infant as indorser, 122 n, 273 n. liability upon his indorsement, 123 n, 273 n. infant's ratification, 122 n, 273 n. note of infant and adult, 124 n. note of infant partner, 124 n. indorsement by, 492. INLAND BILL, see "Bill of Exchange." INSANE PERSONS, power to make negotiable contracts, 133 n. INNOCENT PARTIES, rights of, 145, 147. INSANITY, see "Lunacy.'' INTEREST, does not render amount uncertain, 92, 92 n. where no time of payment is stated, 102 n incident to the principal, 282-294. liability to pay, by indorser, 282-294. defenses to payment of, 282-294. alteration of rate, material, 401 n. annual, when due. .690 INDEX. INTERPRETATION OF TERMS, see 481, 550. INTOXICATION, see "Drunkenness." KNOWLEDGE, see "Notice." LARCENY, see "Stolen Instrument.'' LAW MERCHANT, , defined and explained, 29 n. LETTERS OF CREDIT, see "Negotiable Contracts." defined, 456. general, 456. LIMITATIONS, see "Statutes of," 288. LIABILITY OF ACCEPTOR, see "Acceptor." see 381. LIABILITY OF DRAWER AND INDORSER, see "Drawer"; "Indorser." see 582. LIABILITY OF ACCEPTOR FOR HONOR, see "Acceptor supra protest." see 388. LIABILITY OF MAKER, see "Maker." see 302. special, 456. form, 457. LORD FIOLT'S OBJECTION TO PROMISSIORY NOTES, see 25 and note. LOCAL ACCEPTANCE, defined, 187 n. LOST INSTRUMENT, action on, 591. rights of bona fide holder, 26, 33, 48, 144, 146, 149, 416, 581. protest of, 339. LUNATICS, power to make negotiable contracts, 133 n. INDEX. 691 LUNACY, as a defense, 398 n. , instruments executed by persons non compos mentis, 124 n. indorsement and transfer by persons non compos mentis, 319 n. lunatics, capacity to contract, 124 n. effect of insanity upon capacity to contract, 124 n. MAKER, of note, defined, no. signature of, 117 n, 155-162, 160 n. liability of, 161 n, 505. capacity of warranty by, or estoppel of indorser, 282 n, 310 n. accommodation maker, see "Accommodation." MATERIAL ALTERATION, see "Defenses."' see 384-402. defined, 399 n. effect of, 400 n. by a stranger, 401 n. illustrations of, 401 n, 402 n, 525. what constitutes, 525. MARRIED WOMEN, marriage of holder, rights of husband, 125 n, 274 n. transfer to married woman, rights of husband, 257 n. coverture as a defense, 398 n, 430 n. instruments executed by, 124 n. indorsement and transfer by, 274 n, 431 n. capacity of, 124 n. at common law, 124 n. under the statute, 124 n, 126 n. liability of husband for ante-nuptial contract of, 125 n. liability of — general rule, 125 n. liabiHty of as a partner, 126. as an agent, 125. as a surety, MATURITY, time of, 513. see "Time;" "Overdue Paper." how computed, 513. MEASURE OF DAMAGES, see 583. 692 INDEX. MEDIUM OF PAYMENT, in general, 54, 83-90 and notes. MEMORANDUM CHECKS, in general, 451 n, 452 n. MERCHANTS, see "Custom of Merchants." METHODS OF TRANSFER, by act of parties, by assignment, by indorsement, by delivery,, by operation of law, 248, 332 n. MISTAKE, in indorsement, 331 n. in place for demand of payment, 363. as to contract entered into, 410, 415. MONEY, defined, 85 n. instrument must be payable in but may be money of any country, 87 n, 486. instrument must be payable in, 54, 83, 84 n. must not be payable in "bills payable,'' 87 n. general rule, 84 n. may be payable in merchandise when, 84 n. statutory rule, 84 n. must not be payable in "goods," 84 n. the reason for the rule, 85 n. equivalent expressions for "money," 86 n. "bank bills," 87 n. "money," 87 n. "currency," of this place, 87 n. "good current money," 87 n. "current funds of the State of Ohio," 87. "current money," 87 n. must not be payable out of a particular fund, 88 n. may be charged to a particular fund, 88 n. must not be payable in "money" and an "act," 89 n. the amount of money must be certain, 90. MUNICIPAL CORPORATIONS, power to execute commercial contracts, 130 n. NATURE, of negotiable contracts, 32, 41 n. INDEX. 693 NEGLIGENCE, delivery by, 147, 148. of maker, 403-407, 407 n. of indorser, 410. , of acceptor, 245. , of purchaser for value without notice, 434-447, 446 n. NEGOTIABILITY, origin of, 23. , upon what instruments, first allowed, 23, 41 n. purpose of, 41 n. indicia of, 174-177. see "Bill of Exchange;" "Promissory Note." of suretyship and guaranty, 471, 472. distinguished from assignability, 86 n, 256 n. see "Assignment;" "Indorsement;" "Transfer." the statute of Anne, 26, 27, jj n. the custom of merchants, or law merchant, defined and ex- plained, 29 n. see "Bill of Exchange;" "Checks;" "Defenses ;" "In- dorsement;" "Purchaser for Value without Notice;" "Transfer." additional terms do not affect, 486. what constitutes, 497. NEGOTIABLE CONTRACTS, negotiable contracts and common law contracts, disting- guished, 38. , enumerated, 46. , defined, 46-53. see "Essentials;" "Bills of Exchange;" "Promissory Note." how made non-negotiable, 548. NEGOTIABLE INSTRUMENTS, see "Bill of Exchange;" "Check;'' "Promissory Note." NON-ESSENTIALS, generally, 163. | need not be dated, 163 and note. parol evidence admitted, 165 n. effect of dating on Sunday, 165 n. ante and post dating, 165 n. mistake in, 166 n. need not specify consideration, 167. extrinsic evidence admitted, 168 n. need not stipulate place of payment, 173. presumed place, when not named, 173. 694 INDEX. NON-ESSENTIALS, need not contain indicia of negotiability, 174-177. NON CO.MPOS MENTIS, see "Drunkenness;"' "Lunacy." see "Indorsement," 273 n. NON-NEGOTIABLE INSTRUMENTS, distinguished from negotiable instruments, 84 n, 117 n, 248. assignment of, 249, 250, 251. see "Assignment," assignment distinguished from negotiation, 24S. presumption of consideration, 167 n. indorsement of, 329 n. NOTE, see "Promissory Note.'' see Goldsmith, 27. NOTICE, kinds of, 445. effect of non-notice, 474. rules as to, 575. construction, 445. actual, 445. excuses for, 577. of assignment of non-negotiable instrument, 251, 252. to agent, 446 n. effect of, 446 n. before full amount is paid, 503. what constitutes, 583. of equities, 446 n. see "Purchaser for Value without Notice." to partners, 271. to joint parties, 271, 272. NOTICE OF DISHONOR, form of, 516, 575. necessity for, 282-294, 383 n, 472, 476. defined, 366, 519. : how, when, and where it must be given, 360, 361, 367 n, 515. 519- sufficiency of notice, 360, 516, 519. indentification of instrument, 346. statement of presentment, etc., 360. to whom given, 515. where party is dead, 517. by whom notice should be given, 365, 367 n, 515. 517. INDEX. 695 NOTICE OF DISHONOR, may be given by agent, 515, 516. to whose benefit notice accrues, 375. method of giving notice, 360, 521. time of giving notice, 312 n, 366 n, 367 n, 518. efifect of failure to give notice of dishonor, 272, 282, 294, 521, 522. excuses for failure to give notice, 261 n, 369 n, 577. waiver of notice, 261 n, 369 n, 520, 521. of check, 453. to partners, 517. to persons jointly Hable, 517. to bankrupt, 518. where given, 518. when parties reside in same place, 518. when parties reside in different places, 518. where sent, 519. who effected by waiver of, 520. when need not be given to drawer, 521. when need not be given to indorser, 521. NOTARIAL FEES, see "Collection." NUDUM PACTUM, see "Consideration." OPERATION OF LAW, transfer by, 248, 332 n. ORDER, contained in bill, 54-59. 55 "• see "Bill of Exchange." see illustrations of, 55 n, 58 n. a request may amount to, 57 n. no particular form of words necessary, 57 n. an acknowledgment of a debt not sufScient, 58 n. "pleas" may amount to an order, 58 n. ORIGINAL PARTIES, defined, 109 n. ORIGIN, of negotiability, 23. of checks, 28. OVERDUE PAPER, may be transferred, 184 n, 301 n, 312 n, 330 n. rights of transferee, 301 n, 330 n. 696 INDEX. OVERDUE PAPER, when instrument payable on demand becomes, 442. when instrument payable in installments becomes, 443. purchaser before maturity, 441 n, 442 n. note payable at sight, when overdue, 442. note payable in installments when overdue, 443 n. PAROL ACCEPTANCE, see "Acceptance.'' PAROL EVIDENCE, , inadmissible to vary terms of indorsement, 258 n, 259 n. PARTIAL ACCEPTANCE, , define, 187 n, 189 n, 195. effect on liability of prior parties, 195 n. PARTNERSHIP, infant's liability as a partner, 124 n. power to make negotiable contracts, 126 n, 127 n. partners, form of signature, 126 n. indorsement by, 274 n. PARTIES, see "Essentials," 54, 109-130. to bill of exchange, 51 n, 109-130. how designated, 109 n, no n. to promissory note, 54, 109-133. must be certain, 109 n, 117 n. exception as to certainty of, 117 n. who may accept bill, 118, 178. see i-icceptance." , antecedent discharged by partial acceptance, 195 n. accommodation parties, see "Accommodation." certainty as to, 54, 109-133, 117 n. specification of, 118 n, 119 n. capacity of parties, 121 n. see "Acceptor;" "Drawee;" "Drawer;" "Drunkenness;" "Holder;" "Infancy;" "Indorsee;" "Guardians;" "Trustees;" "Indorser;" "Lunacy;" "Maker;" "Married Women |" "Payee." 1 where parties left blank, 118 n. may be described, 119 n. how designated, 109, no. PAYEE, of bill, defined, no n. of note, defined, no n. INDEX. 697 PAYEE, designation of, 110 n. rules concerning, 118 n. , payable to fictitious person, iii, 112, 118. competency to indorse, estoppel of acceptor to deny,- 233- 240. I may refuse partial or conditional acceptance, 195 n. PAYMENT, medium of, 54, 83, 84 n. must not depend upon a contingency, 74, j-j n. must not be out of a particular fund, "j"/ n. may indicate a particular fund, jy n. will be good if condition is sure to happen, 79 n. at convenience of maker, 80 n. may be merchandise, when, 84 n. statutory provisions, 84 n. place of, 173, 402 n. time of payment, days of grace, 104 n. payment for honor, 541, 589. by whom, 541. \ how made, 541. effect upon subsequent parties, 542. rights of payer, 542. in due course, 585. part payment, 428 n. presentment for, 509. where not payable on demand, 509. what constitute, 509. time of payment, 95, 572, 573. the exact time need not be stated, 102 n. when note is lost, 103 n. when payable in installments, 103 n. when payable on demand, 103 n. before maturity, effect of, 330 n. when demanded, when last day is a holiday, 105. where no time is stated, 105 n. presentment for, 381 n, 572. when necessary, 281 n. how made, 381 n. when excused, 382 n, 573. where there are several drawees, 382 n. in case of partners, 382 n. where drawee or maker is dead, 382 n. may be delayed when, 383 n. 698 INDEX. PAYMENT, effect of, 383. PERSONS PRIMARILY LIABLE, in general, 482. discount of bill by drawee before acceptance, 178, 187. according to tenor of instrument, 180. when a discharge and defense, 178, 187. presentment for, when necessary, 381 n. manner of presentment for, 381 n. indorsement after, 330 n. PERSONAL DEFENSES, defined, 398. see "Defenses."' PERSONAL REPRESENTATIVES, see "Executors and xAdministrators." see also page 131 n. PLACE, as to indorsement, see "Indorsement" and 333 n. see all 334 n, 356, 463-470 and note. PLACE OF PAYMENT, need not be stated, 123. see "Non-Essentials." excuses for delay, 573. rules as to, 572. PRESENTMENT, why made, 350. effect of, 383 n. necessity for, 282, 294, 350, 370, 381 n, 383 n, 379, 380 n, 472, 476, 532. purposes of, 350, 351. when payable at bank, 510. instrument must be exhibited, 510. where debtor is dead, 511. to partners, 511. to point parties, 511. when not necessary, 511. for acceptance, 379 n. how made, 380 n. when executed, 380 n. manner of, 354, 379 n, 380, 532. time of, 389, 380 n, 282, 294, 533. INDEX. 699 PRESENTMENT, days of grace, 104 n, 355 n, 472, 476. place of, 379 n, 38011, 510. ' by whom and to whom, 351, 379, 383. eflfect of failure to present, 377, 532. excuses for failure to present, 380 n, 572, 533. excuses for delay in, 380 n, 512. of check, 450 n. for payment, how made, 381 n. for payment, 381 n. how made, 381 n. when delayed, 383 n. when excused, 383 n. PRESENTMENT AND DEMAND, see "Presentment." see 370-383. PRESUMPTION, as to whether party is a purchaser for value without notice, 372 n. PRINCIPAL AND AGENT, notice to agent, 446 n. see "Agent," and also 132 n. PROMISE, contained in note, 59, 73, and notes, see "Promissory Note." what words are equivalent to "promise," 65, 69 n, to "jt, n. an I. O. U. not a good promise, 72 n. must be absolute and unconditional, 74. PROMISSORY NOTE, when first used, 24. see "Negotiable Contracts." Lord Holt's objection to, 25, and note, defined, 545, 600. purpose of, 41 n. and money compared, 39. and goods compared, 38. the statute of Anne, 26. non-negotiable note, 63. origin of negotiability of, 23, 38, 42 n. form of, 52 n. must be written, 52 n. must not be sealed, 52 n. essentials of note, in general, 54, 59, 69 n, 63. 700 INDEX. PROMISSORY NOTE, what words will import a promise to pay, 71 n. indicia of negotiability, 174, 177. and bills of exchange compared, 377. obtained in blank and wrongfully filled up, 419 n, given for patent right, 547. given for speculative puiposes, 547. when unconditional, 485. days of grace, 104, 134 n, 355 n, 472, 476. delivery, 54, 135 n, 135, 154, and note. in escrow, 146. date, 163-166, and note, where placed, 165 n. effect of on Sunday, 165 n. mistake in, 166 n. under seal, 50. the promise contained in note, 54, 59-73. certainty as to terms, 54, 68, 79. uncertainty as to event, 79. uncertainty as to time, 102 n, 107 n. payment out of particular fund, 57 n, 88 n, 102 n, 177. giving holder option of payment in money or some other thing, 84 n, 91 n. payable on demand or at sight, etc., 102 n, 442 n. no time of payment expressed, 105 n, 164. time of payment blank, 164. payable in installments, 94 n, 443. must be for payment of money only, 54. payment in property other than money, 83-89. option given holder, 83 n, 89 n. performance of other acts in addition to payment of money, 84 n, 89 n. definition of money, 85 n . amount blank, 164. amount must be certain, 54, 90-94. interest, 90-94. exchange, 93 n, 94 n. payable in foreign money, 87 n, 88 n. specification of parties, 109-134. signature of maker, 117 n, 155-162. certainty as to parties, 117 n, 109, 134. designation of payee, 109-134. payable to fictitious person, 109-115. necessity for and meaning of "value received," 167-172, and notes. INDEX. yoi, PROMISSORY NOTE, accommodation parties, see "Accommodation." liability of maker, see "Indorsement." PROMISE TO GIVE, prorr.ise to "give," not a good note, 73 n. PROTEST, defined, 366 n, 535. requisites of certificate of, 367 n, 336-369. necessity for, effect of failure to protest, 361, 366 n, 535, 536- acceptance supra protest, 179-181. in order to hold acceptor supra protest, 222-227. by whom made, 367 n, 534. where made, 536. dispensed with, 369 n, 520, 522, 537. for better security, 369 n. purposes of, 361. when to be made, 366. form of certificate, 368 n. form of notice of protest, 369 n. waiver of, 520. who affected, 520. for non-acceptance, 536. for non-payment, 536. before maturity, 536. where bill is lost, 537. PUBLIC CORPORATIONS, power to execute commercial contracts. 129 n. PUBLIC POLICY, agreements in contravention of, 398 n, 427 n. PURCHASER FOR VALUE WITHOUT NOTICE, defined 441 note, who is a purchaser for value without notice, 146-148, 441 n,. 444 n, 434, 437-447, 563- purchaser in due course, 502. value, 167-172 n, 441 n. notice, 441 n, 445 n. kinds of 445 n. title obtained without indorsement, of bill or note payable to- order, 446. overdue payer, 330 n, 331 n, 441 n, 564. in due course, 44 n. without notice, 445 n. for value, 444 n. 702 INDEX. PURCHASER FOR VALUE WITHOUT NOTICE, before maturity, 441 n. presumption and burden of proof, and order of proof, 427 n, 564- of coupon bonds, 453 n. defenses as against, 398 n. defenses as real or personal, 398 n. real defenses, 384-402, 398 n. personal defenses, 398 n. coverture, 398 n, 430 n. infancy, 398 n, 441 n, 430, 433, and notes, persons non compos mentis, 398 n. drunken persons, 431 n, 432 n. non-delivery of instrument, 416-419, and notes, statutes avoiding instrument, 416-418, and notes, usury, 398 n, 429 n. alterations, 238, 384, 403-407. forgery, 237-240. fraud, 384, 408-419, and notes, 427 n, 434. want of failure of consideration, 140-148. illegality of consideration, 420-428, and notes, statutory prohibition, 398 n, 416 n. violation of Sunday laws, 140-144. common-law prohibition, 398 n, 428 n. contravention of public policy, 398 n, 428 n. in general, 428 n. restraint of trade, 429 n. effect of illegality, 419, 420 n. illegality as being total or partial, 420 and notes, discharge of the instrument and of the parties thereto, 296, 301, 336 n. payment, 330 n, 398 n. discharge by agreement, 398 n. discharge of drawer or indorser by prejudicial acts or neglect of holder, 282, 294, 374-383. statute of limitations, 57-73. stolen instruments, 26, 39, 144, 146, 149, 389, 448. lost instruments, 39, 144, 389. purchaser before maturity, 441 n. purchaser in due course of business, 444 n, 564. PURPOSE, of negotiability, 32-43, 41 n, 188 n. INDEX. 703 QUALIFIED ACCEPTANCE, in general, 178-187. see "Acceptance." QUASI-NEGOTIABLE CONTRACTS, enumerated, 46, 53, 456-462. REAL DEFENSES, see "Defenses." see 398 n. defined, 398. RECEIVER'S CERTIFICATE, defined, 461. see "Negotiable Contracts." negotiability of, 461. RESTRAINT OF TRADE, agreemnt in, 49 n, 327-330. RESTRICTIVE INDORSEMENT, defined, 297 n. in general, 297 n. see "Indorsement." RIGHTS OF HOLDER, to sue, 502. when not purchaser in due course, 502. in due course, 503. RULES AS TO SETS, see 592. SATISFACTION, see "Discharge of Instrument." SET-OFF, see "Defenses.' SEAL, see "Essentials." must not contain. SIGNATURE, see "Essentials," 54, 109-134, 561, 603. sufficiency, 160 n, 603. by whom made, 161 n. form of, 161 n. may be written, 161 n. may be printed, 161 n. in trade name, 491. bv two or more, 161 n. 704 INDEX. SIGNATURE, by agent, 161 n, 162 n, 562, 491. by cashier, 162 n. of drawer, estoppel of acceptor to deny, 228-232, 232 n. forged or unauthorized, 561, 493. procuration, 562. STATUTES, the statute of Anne, 14, 26, JJ. of limitations, 288. STATUTE OF LIMITATIONS, a defense, 59-73. begins to run as to interest, 282-294, 288. begins to run as to the entire contract, 329 n. indorsement, 329 n. STOLEN INSTRUMENT, transfer of, 26, 39, Xi^. rights of bona Me holder, 26, 39, 144, 146, 149, 389. SUBSEQUENT PARTIES, defined, 108 n. SUNDAY, note or bill falls due on, 105 n. violation of the Sunday laws, 165 n. delivery on, 153. SUPRA PROTEST, see "Acceptance for Honor." acceptance supra protest, 222. SURETY, defined, 471. in general, 471-474. form of contract, 471. consideration necessary, 471. negotiability of contract, 472. not entitled to grace, 472. necessity for presentment, demand and notice, 472. liability of surety, 472. how discharged, 472, 473. of drawer and indorser, 185-187. rights of surety, 474. SURVIVORSHIP, of joint payee or indorsee, 327-330. TENOR, of bill, 180, 178-187. INDEX. 705 TIME, reasonable, 482. see "Essentials," 54. of payment must be certain, 95. of delivery presumed, 150 n, 153 n. computation of, 107 n, 481, 556. when measured from an act, 107 n. when measured from an event certain to pass, 106 n. of payment, days of grace, 104 n, 443 n, 444 n. depending upon an event, 106 n. lost notes when due, 103 n. need not always be stated, 102 n. where no time stated, 105 n. when payable on or before a certain time, 106 n. of acceptance, 558. TITLE, of indorsee or holder, see "Indorsement;" "Transfer." warranty of, by indorser ,251 n, 293 n, 310-313, and notes. TRADE, RESTRAINT OF, unlawful agreements, 327-330. TRANSFER, without indorsement, effect of, 446 n, 501. in general, 248-254, 583. defined, 583. by delivery simply, 328. methods of transfer, 248. (i) by act of parties, 248. assignment, 248. rights of assignee, 350, 384-402. indorsement, see "Indorsement." delivery, 248, 278, 282 and notes, 328 n. (2) by operation of law, 248, 332 n. death of holder, 322, 332 n. bankruptcy of hloder, 332 n, 264-273. marriage of femesol, 264-273. husband and wife, 255-263, 332 n. death of joint payee or endorsee, 332 n. overdue paper, 178-187, 295-303. rights of transferefe, 295-303, 323-335. of negotiable instrument without indorsement, 258, 350, 319, and notes, of non-negotiable instrument, see "Assignment." warranties, 327. of lost instrument, 26, 39, 144, 389- 7o6 INDEX. TRANSFER, of stolen instrument, 26, 39, 144. title of holder, 255, 263. TRUSTEES, power to make negotiable instruments, 133 n. UNITED STATES TREASURY NOTES, see "Negotiable Contracts." defined, 457 n. UNLAWFUL AGREEMENTS, in general, 420-429, and notes, see "Consideration." UNCERTAINTY, see "Bill of Exchange;" "Promissory Note." USURY, as a defense, 398 n, 429 n, 463-470. VALUE, what constitutes, 167-172, 441 n, 444 n. see "Purchaser for Value without Notice." VALUE RECEIVED, necessity for and meaning of expression, 167-172, and notes. VERBAL ACCEPTANCE, see "Acceptance." WAREHOUSE RECEIPTS, defined, 460. see "Negotiable Contracts.'' as negotiable instrument, 460. WARRANTIES, by acceptor, 228-232, 232 n, 233, 237, 238. genuineness of drawer's signature, 228-232, 232 n, 233, 2^7. 238. existence of drawer, 232. capacity of drawer, 232, 240. authority to make draft, 232. payee's competency to indorse, 232. facts which acceptor does not admit, 238. genuineness of payee's and subsequent indorsements, 240-244. genuineness of terms contained in bill, 230-244. by indorser, 310-313, 310 n. that the bill or note will be accepted and paid, 310 n. genuineness of instrument, 232 n, 310 n. INDEX. 707 WARRANTEES, (by indorser), that the instrument is a vaUd and subsisting obhgation, 310 n. i that the abUgations of all prior parties arc valid, 298 n, 299 n, 310 n. capacity of prior parties, 299 n, 310. that he, as indorser, has title, and the right to transfer, 299 n, 310 n. I Dy transferrer without indorsement, 323-335, 316, 319, 327 n, 506. genuineness of instrument, 323-335 n, 327 n, 506. capacity of prior parties, 323-335 n, 327 n. that he has title, and right to transfer, 323-335 n. that the instrument is what it purports to be, 323 and notes. I that the instrument is not forged, 323 n. by indorser without recourse, 314, 322. that he is a lawful holder, 314, 322. that he has the title, 314, 322. that the contract is a genuine one, 314, 322. that he has a right to transfer it, 314. 322. by drawee by acceptance, 232 n. the signature of drawer, 232 n. that he has funds, 232 n. that drawer has capacity, 232 n. that the payee has capacity to indorse, 232 n. KF 957 Ak J66 Author Vol. Johnson, K1-ia.R F-iy^1«»y 1 Title Copy J .... Elements of the law of negotiable