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ELEMENTS
OF THE LAW OF
Negotiable Contracts
BY
ELIAS FINLEY JOHNSON, B. S., LL. M.,
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
GEORGE WAHR,
ANN ABBOR, MICH.,
1898.
I
I
I The Inland Press,
j Ann Arbor, Mich.
Copyright, 1898
By George Wahr
L 5498
MAR 2 1932
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 experience as an instructor has taught the
undersigned that the best method of impressing 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, 1898.
TABLE OF CONTENTS.
CHAPTER I.
History, Nature and Purposes of Negotiable Contracts . . 21
Section 1. 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 negotia-
bility of notes 25
d. The Statute of Anne, its purpose 26
Section 2. Nature and Purposes of Bills and N'otes .... 32
a. Common law contracts and negotiable
contracts distinguished 38
b. They are representatives of money. . . 4m
CHAPTER II.
Bibliography of Negotiable Contracts 44
Section 3. Text Books and Cases 44
CHAPTER III.
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 son
e. Must not be under seal 50
f. Kinds of 51
g. Parties to, enumerated and defined. . . 5m
Section 9. Promissory Notes 52
a. Defined S2n
b. Must be written 52n
c. May be written in pen or pencil 52n
d. Form required 52n
e. Parties to, enumerated 53
VI
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 Must Contain an Order
I 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-
lute and Unconditional 74
a. Payment must not depend upon a con-
dition 79
•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. vii
Section 14. — Continued.
e. Conditions may be imposed by an in-
dorsement 81
f. 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 91
— The rule ih different States 91
b. Statutory provisions 92
c. Payment of an amount certain with
exchange 93
d. The amount should be expressly
stated 94
Vlll TABLE OF CONTENTS.
Section 16. — 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 day 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 109
— Subsequent 109
2. To promissory notes no
— Original 1 10
— 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 18. — 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. Mav 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 132
1. Power to make negotiable con-
tracts 132
2. Authority of 132
3. Joint agents 132
4. Signature of 132
k. Guardians 133
— The 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. May 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 Must 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. Effect 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 the phrase "value received" 168
d. Effect of a failure of consideration. . . 16&
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 mav 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
Xll
TABLE OF CONTENTS.
Section 25. — Continued.
c. The 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
i. When excused 187
Section 26. An 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
1 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
Section 27. 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
Section 28. An Acceptance is Incomplete Until a Deliv-
ery, Either Actual or Constructive,
and May be Revoked 200
a. The early rule 206
TABLE OF CONTENTS.
Xlll
Section 28. — Continued.
b. The acceptance is irrevocable after de-
livery 206
Section 29. An Acceptance May be Either 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 Denying 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
XIV
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 Subject 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 Must 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 257
e. When is an indorsement necessary. . . 257
f. Effect of a transfer without an indorse-
ment 258
g. Indorsement explained by parol evi-
dence, when 258
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 indorsees 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 indorsees 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
XVi 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 iadorse-
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-
ee 304
a. An indorsement in blank mav 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 310
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. XV11
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 XI.
Warranties or Admissions of a Transferrer of a Commercial
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-
tact 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
XV111 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
L Indorsement after payment 330
j. Payment before maturity 330
k. Mistake in an indorsement 331
1. Indorsees 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
0. 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 337
b. That presentment and demand were
made 337
c. The time and place of presentment and
demand 337
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 ; . . 337
g. The signature and seal of the notary. . 337
h. Why must presentment be made 350
i. The law of what place governs the
liability of the parties 356
j. The purpose of protest 361
k. Protest defined 366
1. In what cases necessary 366
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
1. Where the bill is payable after sight
or where it is necessary to fix the
maturity of the contract 379
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 for 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 381
1. Of drawers 381
2. Of indorsers 381
3. Of acceptors for honor 381
k. Presentment of checks — necessity of.. ^81
1. Presentment for payment — how made 381
1. 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 381
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
XX11 TABLE OF 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. Generally whenever the delay is
caused by 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 May 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 401
2. Changing the date or time of pay-
ment 401
TABLE OF CONTENTS. XXU1
Section 54. — Continued.
g. Material alterations — illustrations of.
3. Changing the place of payment. . . . 401
4. Changing the rate of interest 401
5. Adding interest when it did not
draw interest 401
6. Substituting a new payee 401
7. Adding a seal 402
8. Adding a subscribing witness 402
9. 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 payment where
none is named 402
13. Changing a material memorandum . 402
14. Changing the medium of payment. 402
h. Immaterial alterations — illustrations.. 402
1. Changing a bill payable to "A" or
• bearer, to "A" or order or bearer. . 402
2. Changing an indorsement in blank
into a special indorsement 402
3. Adding the legal rate of interest
where the note reads "with interest,,
simply 402
CHAPTER XV.
Defenses, Alteration, Xegligence 403
Section 55. Whenever the Makei of a Commercial Con-
tract, by His Own Carelessness or
Xegligence, Executes and Delivers
it so that Material Alterations May
be Made, in a Way Which Does
Xot 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
XXIV TABLE OF CONTENTS.
CHAPTER XVI.
Defenses, Fraud 408
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 Contractual Relations
Under a Misapprehension of the
Real Nature of the Contract, with
the Exercise of Due Diligence, then
it is a Res1 Defense and May Be In-
terposed Against An> 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
1. Those made with alien enemies and
in aid of rebellion 428
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
10. 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 Were
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
XXVI 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
1. 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. Notice of equities — when the rule does
not apply 446
1. Transfer of bill or note, payable "To
order1' without indorsement 446
TABLE OF CONTENTS. XXVII
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 456
Section 61. Quasi-Xegotiable 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^
XX Vlll TABLE OP 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 with 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 liability — how discharged... 472
i. Rights of surety 474
1. 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 him 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 m^y 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 481
Section 65. Short Title 481
Section 66. Definition ?nc] Meaning of Terms 481
Section 67. Person Prim?rily 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 XXVI.
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 485
Section 76. Additional Provisions Not Affecting Nego-
tiability 486
Section TJt 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; When 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
Sefction 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 492
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 101. 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 no. Conditional Indorsement 498
Section in. 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 Indorsement; 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 ; Payihent 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.... 507
Section 140. Liability of Agent or Broker 50S
CHAPTER XXXI.
Presentment for Payment 509
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 509
Section 144. Place of Presentment 510
Section 145. Instrument Must be Exhibited 510
Section 146. Presentment Where Instrument Payable
at Bank 510
Section 147.
Section 148.
Section 149.
Section 150.
Section 151.
Section 152.
Section 153.
Section 154.
Section 155.
Section 156.
Section 157.
Section 158.
Section 159.
TABLE OF CONTENTS. XXXlii
Presentment Where Principal Debtor is
Dead 511
Presentment to Persons Liable as Partners 511
Presentment to Joint Debtors 511
When Presentment Not Required to
Charge Drawer 511
Where Presentment Not Required to
Charge Indorser 512
Where Delay in Making Presentment is
Excused 512
When Presentment May Be Dispensed
With 512
When Instrument Dishonored by Non-pay-
ment 512
Liability of Person Secondarily Liable,
When Instrument Dishonored ... 513
Time of Maturity , 513
Time ; How Computed 513
Rule Where Instrument Payable at Bank. . 513
What Constitutes Payment in Due Course. 514
Notice of
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
CHAPTER XXXII.
Dishonor 515
160. To Whom Notice of Dishonor Must be
Given 515
161. By Whom Given 515
162. Notice Given by Agent 515
163. Effect of Notice Given on Behalf of Holder 515
164. Effect Where Notice is Given by Party En-
titled Thereto 516
165. When Agent May Give Notice 516
i£6. When Notice Sufficient 516
167. Form of Notice 516
168. To Whom Notice May be Given 517
169. Notice Where Party is Dead 517
170. Notice to Partners 517
171. Notice to Persons Jointly Liable 517
172. Notice to Bankrupt 518
173. Time Within Which Notice Must be Given 518
174. Where Parties Reside in Same Place 518
175. Where Parties Reside in Different Places. 518
176. When Sender Deemed to Have Given Due
Notice 5X9
XXXIV TABLE OF CONTENTS.
Section 177. Deposit in Postoffice; What Constitutes. . . 519
Section 178. Notice to Subsequent Party; Time of 519
Section 179. Where Notice Must be Sent 519
Section 180. Waiver of Notice 520
Section 181. Whom Affected by Waiver 520
Section 182. Waiver of Protest 520
Section 183. When Notice is Dispensed With 521
Section 184. Delay in Giving Notice ; How Excused 521
Section 185. When Notice Need Not be Given to
Drawer 521
Section 186. When Notice Need Not be Given to In-
dorser 521
Section 187. Notice of Non-payment Where Acceptance
Refused 522
Section 188. Effect of Omission to Give Notice of Non-
acceptance 522
Section 189. When Protest Need Not be Made; When
Must be Made 522
CHAPTER XXXIII.
Discharge of Negotiable Instruments 523
Section 190. Instrument ; How Discharged 523
Section 191. When Persons Secondarily Liable on, Dis-
charged 523
Section 192. Right of Party Who Discharges Instru-
ment 524
Section 193. Renunciation by Holder 524
Section 194. Cancellation ; Unintentional ; Burden of
Proof 524
Section 195. Alteration of Instrument ; Effect of 525
Section 196. 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 526
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
Acceptance of
Section 203.
Section 204.
Section 205.
Section 206.
Section 207.
Section 208.
Section 209.
Section 210.
Section 211.
Section 212.
Section 213;
Presentment of
Section 214.
Section 215.
Section
Section
Section
Section
Section
Section
Section
216.
217.
218.
219.
220.
221.
222.
CHAPTER XXXV.
Bills of Exchange 528
Acceptance; How Made, et cetera 528
Holder Entitled to Acceptance on Face of
Bill 528
Acceptance by Separate Instrument 528
Promise to Accept, When Equivalent to
Acceptance 528
Time Allowed Drawee to Accept 529
Liability of Drawee Retaining or Destroy-
ing Bill ^ . . 529
Acceptance of Incomplete Bill 529
Kinds of Acceptances 530
What Constitutes a General Acceptance. . 530
Qualified Acceptance 530
Rights of Parties as to Qualified Accept-
ance 530
CHAPTER XXXVI.
Bills of Exchange for Acceptance 532
When Presentment for Acceptance Must
be Made 532
When Failure to Present Releases Drawer
and Indorser 532
Presentment ; How Made 532
On What Days Presentment May be Made 533
Presentment Where Time is Insufficient.. 533
Where Presentment is Excused 533
When Dishonored by Non- Acceptance. . . 534
Duty of Holder Where Bill Not Accepted. 534
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 536
Section 228. Protest Both for Non- Acceptance and Non-
payment 536
xxxvi
Section 229.
Section 230.
Section 231.
Acceptance of
Section 232.
Section 233.
Section 234.
Section 235.
Section 236.
Section 237.
Section 238.
Section 239.
Section 240.
Section 241.
TABLE OF CONTENTS.
Protest Before Maturity Where Acceptor
Insolvent 536
When Protest Dispensed With 537
Protest Where Bill is Lost, etc 537
CHAPTER XXXVIII.
Bills of Exchange for Honor 538
When Bills May Be Accepted for Honor. . 538
Acceptance for Honor ; How Made 538
When Deemed to Be an Acceptance for
Honor of the Drawer 538
Liability of Acceptor for Honor 539
Agreement of Acceptor for Honor 539
Maturity of Bill Payable After Sight; Ac-
cepted for Honor 539
Protest of Bill Accepted for Honor, et
cetera 539
Presentment for Payment to Acceptor for
I Honor; How Made 540
When Delay in Making Presentment is Ex-
cused 54°
Dishonor of Bill by 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 541
Section 244. Declaration Before Payment for Honor. . . 541
Section 245. Preference of Parties Offering to Pay for
Honor 541
Section 246. Effect on Subsequent Parties Where Bill Is
Paid for Honor 542
Section 247. Where Holder Refuses to Receive Payment
Supra Protest 542
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
txfctfc or cofcTENta. Kxxvii
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
I 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
1 it to be Certified 546
Section 260. When Check Operates as an Assignment. . 546
CHAPTER XLIL
Notes Given for Patent Rights and for a Speculative Consid-
i 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 550
Section 266. Short Title 550
Section 267. Interpretation of Terms 550
kxxviii
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 Different 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 556
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 XLVIL
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 571
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 581
Section 318. Funds in hands of Drawee 381
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 585
Section 324. Payment in Due Course 585
Section 325. Banker Paying Demand Draft Whereon
Indorsement 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 LII.
Acceptance and Payment for Honor 588
Section 330. Acceptance for Honor Supra Protest 588
Section 330. Liability of Acceptor for Honor 588
Section 332. Presentment to Acceptor for Honor 589
Section 333. Payment for Honor Supra Protest 589
CHAPTER LIII.
Lost Instruments 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.
XL1
CHAPTER LVII.
Crossed Cheques 597
Section 341. General and Special Crossings Defined. . . . 597
Crossing by Drawer or After Issue 597
Crossing a Material Part of Cheque 598
Duties of Banker as to Crossed Cheques. . 598
Protection to Banker Where Cheque is
Crossed 599
Effect of Crossing on Holder 599
Protection to Collecting Banker 599
Section 342.
Section 343.
Section 344.
Section 345.
Section 346.
Section 347.
CHAPTER LVIII.
Promissory Notes - 600
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 II. 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.1
In the Exchequer Chamber, July 7, 1875.
[Reported in Law Reports 10 Court of Ex. 76, Jan. 28, 1875;
also Law Reports 10 Court of Ex. Chamber, jj?, July 7, 1875,
also in the House of Lords 1 App. Cas. 476, May 12, ij, 18, ip;
June J, 1876.']
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.
1 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 aotes, 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. 1, 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. (Consul tat de la Mer, par Boucher, torn, 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, Pt. 2, ch. 9* p. 255, and note, Am.
edit, 1821. See also Cobbet on Pawns, pp. 3, 12.) See also
Hallam, Introduct. to Literature of Europe, Vol. 1, ch. 1, § 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. 1, Consil. 53; Id. Pars. 3, Consil. 298.
See also the forms in Scaccia de Camblo, § 1, Quest. 5, pp. 110 to
127; Id., pp. 508 to 514; post, § 26, n. 3.)
SEC. I.] 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, (I603)1 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 exchange, 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.8
!Cro. Jac, 6 (1603).
2 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 herein
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 Shelderi v. Hentley,1 an action
was brought on a note under seal by which the defendant
promised to pay to bearer ;£ioo, 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 44it 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
bills of exchange were originally between 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 now 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 may be given in evidence
upon the trial " To which Powell, J., added: 4< On indebita-
tus assumpsit for money received to the use of the plaintiff
1 2 Show., 160.
2 2 Lutw., 1582.
SEC. I.] 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,1 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; the chief 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,5 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.
1 Carth., 269.
aLord 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 remember when 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. 1,
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. 9,1 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 4*it had
public before the drawer can be charged, but inland bills need
not be protested. " Lord Holt said of promissory 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. l3) l Salk. 24; 2 Salk. 442; Buller v. Crips, 6 Mod.
Rep. 30.
xIts 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 any 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.] GOODWIN V. ROBRATS. 2^
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
4 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).
ai Bos. & P., 648 (1797).
'Barn. & Aid., 1 (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 (*". 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.] GOODWINS. 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. // is from mercantile usage, as
proved in evidence, and ratified by judicial decision in the
great case of Lickbarrow v. Mason1, 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,8 and were adopted into the law by our courts as being
1 16 Mees. & W., 321.
2 2 Term. R., 63.
8 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
j-ecognize."
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 Sopaeus, 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 V. ROBARTS. 3 1
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 10, 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 15th century, which correspond in
form almost exactly with the forms in common use to-day. One is
still extant, dated April 28th, 1405, drawn by a 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.1
In the King's Bench, January 31, 1758.
[Reported by /. 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
Teports is that of Martin v. Boure (Cro. Jac. 6)."
We have good authority for saying that these instruments were
in 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 exchange.
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 XL 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.
1 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. 1, 289, 464; Wood's Byles on Bills and Notes,
50, 84, 577; Daniel on Nogotiable Instruments, 771, 1503, 1672,
1687; Randolph on Commercial Paper, 9, 481, 543; Ames on Bills
and Notes, 400; Norton on Bills and Notes, 111, 199.
SEC. 2.] MILLER V. RACE. 3$
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 12th 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 1 3th of Decem-
ber, applied to the Bank of England 4 4 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, who 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: ki 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 ta 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 what 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 plaintiff, for a special
proprietor can have no right against the true owner.
The cases that may affect the present, are Anonymous,1
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,"2 in which case
1 1 Salk., 126.
9 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.] 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,1 per Holt, C. J., at nisi prius at Guildhall.
44 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-
miriea — 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.
I H. 12 W., 1 Salk, 283, 284
I I Strange 505 (8 Geo. I.)
36 MILLER V. RACE. [CHAP. lr
First. He put several cases where the usage, course,
and convenience of trade made the law, and sometimes even
against an act of parliament.1
Secondly. This paper credit has been always, and with
great reason, favored and encouraged.2
The usage of these notes is, 4 ' 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.
4 "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
1 Stanley v. Ayles, per Hale, C. J. at Guildhall. 3 Keb. 444 \
2 Strange 1000. Lumley v. Palmer, 1 Salk. 23, where a parol-
acceptance of a bill of exchange was holden sufficient against the
acceptor.
2 Feny v. Fowler, et al. , 2 Strange 946.
8 1 Salk. 126 is in point.
4 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 1 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. l
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 sited in order to give a pro-
per answer to them, and therefore the court deferred giving
I 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, et al., v. Bathurst, et al., Ambl. 68, Nov., 1748.
SEC. 2.] MILLER V. RACE. 39
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
lie 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 note8 ruled by Ld. C. J.
1 1 Salk.j 126. 10 Williams, 3.
1 1 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 et 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.
iarging 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., 618.
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, iooo^, 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. Co mm., 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;
Bay ley 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. (1st ed. )
(1888); Tiedeman on Commercial Paper (1st 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— DEFINED1
By an Act of Parliament in 1882, known, as the 4 '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, 1.
Parsons on Bills says, "A written order for the payment of
money." 1 Parsons on Bills and Notes, 52.
Judge Byies 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 written* 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 Written. — 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 Written in Pencil or Ink. — In the case of
•Geary v. Physic, 5 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. 1, 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 y 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
Jeffry v. Walton, i Stark, 267, a memorandum entered in pencil upon
a card was received as evidence of an agreement; and in Rymes
v. Clarkson, 1 Phil., 22. Sir John Nicholl 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, 1 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 Nicholl 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. 7" 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. $r
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-,557-)
The following have been held sufficient as to form:
£1000.00. 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.
$ 1 000. 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.,
135; 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:
£2,361.81. 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.] ENUMERATION AND DEFINITION. 51
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 enumerXtion 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.1
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.
1 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 sum of money at a time specified therein." Story
on Bills and Notes, § 1.
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. IO.] ENUMERATION AND DEFINITION. 53
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 :
$500.00. 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.
$100.00. 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.
i . 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.*
In the King's Bench; Easter Term, 34 George III., May 24, 1794.
[Reported in 1 Espinasse 127; star p. I2Q.~\
Form of Action. — Assumpsit for work and labor, with
the common counts. Plea of the general issue.
*This case is cited in Daniel on Neg. 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:
1 * 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 £50.00; I will arrange
it with you this forenoon. "
In the case of Rex v. Ellor, 1 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 1
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 lived 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:
" Willi amsburgh, 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, 1 Mood. & Malk., 171, Ld.
Tenderton held the following not to be a bill of exchange:
SEC. 12.] 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, & Mod. Rep., 363; Mason v. Metcalf, 8 Baxt., 440;
Roberts v. Peake, 1 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, 1 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,
1 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, 1 Duval, 329, a Kentucky court held
the following instrument to be sufficient to constitute a bill of ex-
change: " Please let the bearer have $50.00; 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.] 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 could 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 plaintiffs 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.1
In the Suprkme Court, Connecticut, October, 1873.
[Reported in 40 Connecticut, 349^
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,
xThis 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 Bills and Notes, 21; Tiedeman on Commercial Paper, 23.
<>0 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 2 2d 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.
4 * 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.] CURRIER V. LOCKWOOD. 6l
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.1 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, 4 * 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.*
1 Smith v. Allen, 5 Day (Conn.), 337, where the note read as
follows: "Due A. B. one hundred dollars, on demand.99) Edwards
on Bills, 131; 1 Am. Lead. Cas. (5th ed.), 383.
* Cummingsv. 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.
8 Lord v. Harvey, 3 Conn., 372; DeForest v. Hunt, 8 id., 184;
Austin v. B os t wick, 9 id., 501; Lee v. Wyse, 35 id., 384.
62 CURRIER V. LOCKWOOD. [CHAP. 4,
Claim of Defendant in Supreme Court. — Lock wood,
contra for defendent said:
First. "A note must contain a legal promise for the
certain payment of a certain sum.1 An acknowledgment of a
debt is not a promissory note.2 The note must contain and
must express the promise of the debtor to pay the money."*
Secondly. "The statute of limitations 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.4
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.6 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."6
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:
1 1 Parsons on Notes and Bills, 23, 24; Story on Prom. Notes,
§14; Bouvier's Law Diet., Due Bill, Promissory Note, and
I. O. U.
2 1 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.
* 1 Parsons on Notes and Bills, 25.
4 Hart's Appeal from Probate, 32 Conn., 539.
6Sanfordv. Clark, 29 Conn., 460.
•Bell v. Morrison, 1 Peters, 531; Smith v. Eastman, 3 Cush.,
355; Mumford v. Freeman, 8 Met., 432; Brush v. Barnard, S
Johns, 407; McLellan v. Albee, 5 Shepley, 184; 1 Smith Lead.
Cas. (H. & W. Notes), part 2d, p. 876.
SEC. 13.] CURRIER Z>. LOCKWOOD. 63
"$17.14. "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,1
' ' 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 writing imports 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" were 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-
tiffs action is barred by the six years clause of the statute,
unless revived by a new promise to pay.
!5 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 "to 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. 13.] 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."1 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."2
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."6
What Words and Phrases are Equivalent to the Word
" Promise." — It is settled that a note need not contain the
words 'promise to pay,' if there are other words of equivalent
import."6 What words are of "equivalent import" and are
sufficient to raise a promise 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
I Chitty on Bills, 428.
a3 Com., 74.
I I Parsons on Notes and Bills, 14.
4 Story on Prom. Notes, 14.
* Byles on Bills, 8.
* 1 Parsons on Notes and Bills, 24.
»i
>>
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.1 In 1800, in the case of Guy v. Harris,2 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,8 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 of £\o and upwards,
and in either case required a stamp. "/. 0. U. £83, to be
paid May jth," was held to be a good promissory note.6
The cases are numerous where an instrument has been
held to be a good note without an express promise to pay.
41 1 do acknowledge myself to be indebted to A. in £10, 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.7 In the case of Morris v.
Lee,8 the words were, 4tI promise to be accountable to J. S.,
or order, for £$0, 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, 44This
'Fisher v. Leslie, 1 Esp., 425.
'Reported in Chitty on Bills, 526.
8 1 Esp., 245.
4 Israel v. Israel, 1 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; 1 Mees. & Wels., 32; S. C.
5 2 Mees. & Wels., 74.
•Waithman v. Eizee, 1 Car. & Kirw., 35.
7Cashborne v. Dutton, 1 Selwyn, Nisi Prius, 320.
8 1 Esp., 426.
SJEC. 13.] CURRIER V, LOCKWOOD. 6j
is a debt, being for value received, and said on account."1
S. C.
American Cases. — Turning to the 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 ilon 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,3 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, lt 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.1
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-
!8 Mod., 362; I Strange, 629; 2 Ld. Raym., 1396.
*5 Day, 337.
*8 Conn., 6.
*i9 Conn., 7.
5 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, $10." This differs from the case at bar in add-
ing the words "or dearer/1 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,2 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.11
In Luqueer v. Prosser,3 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 import an engagement that tnoney
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,6 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.6 In Johnson v. Johnson,7 the court say: "The
1 2 Cow., 536.
8 10 Wend., 675.
8 1 Hill, 259.
*29 Barb., 180.
5 6 N. Hamp., 364.
8 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. Burge, 6 Ala., 373; Finney v.
Shirley, 7 Mo., 42; McGowan v. West, id., 569; Lome v. Mur-
phy, 9, Geo., 338.
7 1 Ala., 263.
Promissory notes must contain a specific promise to pay. The
SEC. 13.] 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. Gary, 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:
4
70 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
a
*5*5
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. 1150.00.
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 for 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, 183 1.
"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, 1 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 smagreement 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. & W., 216.
"Memorandum. Mr. Sibree has this day deposited with me
SEC. 13.] CURRIER V. LOCKWOOD. 7 1
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."
Hfeld to be a 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, n 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., 1154.
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 life.
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, 1 M. & W., 533; Casborne v. Dut-
ton, Selwyn's Nisi Prius, 329; Kimball v. Huntington, 10 Wend.,
675; Block v. Bell, 1 M. &R., 149; Israel v. Israel, 1 Camp., 499;
Brooks v. Elkins, 2 M. & W., 74; Waithman v. Elsee, 1 C. & K.,
35; Dullea v. Emery, 2 Cr. & D. C. C, 506; Ellis v. Mason, 7
Dowling, 598; White v. North, 3 Exch. Rep., 689 (18 L. J. Rep.
[N. S.] Exch., 316); Shrivell v. Payne; 8 Dowling, 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 Day (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. ), 295; Miller v. Austen, 13 How., 218; Poorman v.
Mills, 35 Call., 118; Blood v. Northrup, 1 Kans., 28; Howe v.
Hartness, 11 Ohio St., 449; Cate v. Patterson, 25 Mich., 191;
Tripp v. Curtenius; 36 Mich., 494; Hunt v. Divine, 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, 1 Esp., 425;
Guy v. Harris (1800), Chitty on Bills, 426; Israel v. Israel, 1
Camp., 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, 1 F. & F., 539; Gould v. Courbs, 1 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, 75
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, hut is a mere
evidence of an account stated. Gray v. Bowden, 23 Pick., 282;
Almey v. Winslow, 126 Mass., 342; Fisher v. Leslie, 1 Esp., 425.
Israel vs. Israel, 1 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.,
3^3, 3**3 ; Patterson v. Poindexter, 6 Watts & Serg., 227; Sibree
v. Tripp, 15 M. & W., 23. In Tomkins v. Ashby, (6 B. & C,
541) (1 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,
101 Ind., 500; Johnston v. Griest, 85 Ind., 503; Williams v. Forbes,
114 111., 167; Kirkpatrick v. Taylor, 43 111., 207; Pratt v. Trustees,
93 HI-* 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,1
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 new 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.
?6 PEARSON V. 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.1
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.3
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.4 No
1 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. 1 Salk., 129; 1 Strange, 674; 2
Bl. Com., 446; 3 Burrows, 1637, 1670; 2 Ld. Raymond, 757.
28 Mod., 265, 307, 362; 10 Mod., 286, 294; 11 Mod., 180;
12 Mod., 15, 36, 380.
8 1 Ld. Ray, 175, 281, 744, 759, 1481.
*Sarsfield v. Witherley, 1 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, a,nd therefore not within the
custom of merchants.
Judgment was given for the defendant.1
1 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. 1; 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, 1 Stra., 674; Kyd
on Bills of Exchange, 33 to 37; and 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 0/ such instruments ,
in the general course of its negotiations; and if the contract wants
upon its face this essential quality, or character of certainty y 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; Munger v. Shannon, 61 N. Y., 251;
Cota v. Buck, 7 Mete. (Mass.), 588; Miller v. Poage, 56 la., 96;
Schmittler v. Simon, 10 1 N. Y., 554. Therefore, a promise to
pay "out of my father's estate;" "or out of 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; Cc-lehan v. Cooke, Willes R., 393; Jenny v. Earle, 2 Ld.
Raymond, 1361; Goss v. Nelson, 1 Bun. R., 226; Banbury v.
Lisset. 2 Strange R., T211; 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, 1151); 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; Cushing 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., T72; 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 III. App., 101; Blake v. Coleman, 22 Wis., 396; White
v. Cushing, 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. Schceps, 26 Kans., 310; Cook vs. Sat-
terlee, 6 Con., 108; Leonard v. Mason, 1 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. 14.] 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, 1 Burr., R., 226; Dankes v. Earl, etc., 2 W. Black., 782;
DeForest v. Frary, 6 Cow. (N. Y.), 151; Banbury v. Lisset, 2
Strange, 121 1.
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, 1 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. 1 Strange, 24 (17 17);
Evans v. Underwood, 1 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
So 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 Within 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 Niles
Brooks $2,512.87 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., 101), Gresham, J., held
the following to be a good promissory note and payable within a
reasonable time:
"Chicago, III., Nov. 1, 1883.
"For value received I promise to pay to S. F. Smithers two
thousand and forty-eight and 25-100 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
9)
SEC. 14.] 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. Cushing 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,
1895 (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 (17 1 7). 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,
31 111., 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, i8p8.
"Six months after date I promise to pay John Doe or order,
one hundred dollars, for value received, or as soon as I 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., 4643 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, 1 Cow., 691. 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.] RHODES V. LINDLEY. 8$
SECTION 15.
THE ORDER IN A BILL AND THE PROMISE IN A NOTE
MUST BE FOR THE PAYMENT OF MONEY ONLY.
RHODES v. LINDLEY.*
In the Suprkme Court of Ohio, December, 1827.
{Reported in 3 Ohio, ff. ]
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,a decided upon the cir-
cuit, at Ashtabula, is supposed to have settled this doctrine
differently. This inference is deduced, not from the point de-
^his 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.
9 2 Ohio, 228.
84 RHODES tf. 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; Cook 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 or 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 Bar!., 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, 1897,
i ' Eighteem months after date, we, or either of us, promise to
pay to the bearer the sum of 20, 000 feet of good salable lumber, for
value received of him. J. W. Fox,
his
Riley A' Bond."
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.] 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., 1; 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, et 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.'9
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, 5 1 .
To the general rule, however, there seems to be at least an
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, 5 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 Words 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., 18. 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, n8; 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; Ehricksv. 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;
Munger 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, & £.
(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.*
In the King's Bench, at Nisi Prius (Trinity Term), June ii, 1818.
[Reported in 2 Star kit, 37 J, also in 3 English Common Law Reports
45*-
This was an action by the plaintiffs in right of the wife,
as administratrix of James Eastling.
Form of Action. — The declaration contained a count
upon a promissory note alleged to have been made by the
defendant, on the 12th of October, 1807, f°r 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 certum est
quod certum 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. 91
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, 1 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, 1807.
4 • / promise to pay to James Eastling, my head carter,
the sum of 65I, with lawful interest for the same, three
months after date, and also all other sums which may be
dua to him.91
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; 45 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. Staple ton v. Louisville Bank-
ing Co., 95 Georgia, 802; Montgomery v. Crossthwait, 90 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":
1 st, That the stipulation is valid and enforceable (1 Daniel
Neg. Inst., 4th ed. sec. 62, Montgomery v. Crossthwait, 90 Ala.,
553; 24 Am. St. Rep., 832; Benn v. Kutzschan, 24 Oregon, 28;
Dorsey v. Wolf, 142 111., 589);
I
SEC. l6.] 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 20L, and ought
to be stamped.
Contention of Plaintiff. — The plaintiff, contended that
it was certain to the extent of 65L 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, 24 111., 168; Hill
v. Todd, 29 111., 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 directly in point, and none bearing on the question, except
Pollard v. Harries (3 Bos. & P., 335), 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 (1) 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, n 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. 1
In the Common Pleas, Hilary Term (16 Geo. 2), Feb. ioth, 1742.
[Reported in Willes's Reports, jpj-]
Form of Action. — The first count is on a promissory
note dated 27th of May 1732, whereby the defendant prom-
ised to pay to Henry Delany or order 1 50 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-
1 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,
33; Benjamin's Chalmers, Bills Notes and Checks, 26, 28, 65,
276; Randolph on Commercial Paper, 146; Norton on Bills and
Notes, 39
2 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.
9^ COLEHAN V. COOKE. [CHAP. 4,
mon and civil law books. But I think that all the objections
that were made may be reduced to these two general posi-
tions:—
ist. 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. 17.] 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.1 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.2 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
1 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, id. 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.
2 Vid Copeman v. Gallant, 1 P. Wms., 320; Mace v. Cadell,
Cowp., 232; Pattison v. Bankes; id., 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.
93 COLEHAN V. COOKE. [CHAP. 44
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,
ist, 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-
merciiSy 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
SfC. 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,1 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
1 4 Mod. 242 and Comb. 227.
IOO 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,1 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,2 the promise in the note was to pay yoL 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,8 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.,8the 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
1 Reported in 10 Mod. 294, and 316; and cited in 2 Ld.
Raym. 1362, and in 8 Mod. 364.
a Cited in 2 Ld. Raym. 1362.
8 Cited in 8 Mod. 363.
* Reported in 2 Ld. Raym. 1361.
5 Since reported in 7 Mod. 417 oct. ed., and in 2 Str. 1151,
by the name of Beardesley v. Baldwin.
SEC. 17.] COLEHAN V. COOKE. IOI
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,1
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,2 depends on the same reason; for there the
note was to pay such a sunt 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
1 But there may be a conditional acceptance of a bill of ex-
change. Smith v. Abbot, 2 Str. 1152; Julian v. Shobrooke, 2
Wilf. 9; Pierson v. Dunlop, Cowp. 574; and Sproat v. Matthews,
1 D. and £. 182.
> 1 Str. 24.
3T. 8 and 9 G. 2 B. R.; Cunningh. Bills of Exchange 113.
102 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,1 and therefore the rule for arresting
the judgment must be discharged."8
1 This judgment was afterwards affirmed in the Court of King's
Bench on a writ of error. 2 Str., 12 17.
2 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., 12 n;
Dawkes v. Ld. Deloraine, 2 Bl. Rep., 782; 3 Wils., 207; Roberts
v. Peake, 1 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, 1 Wils., 262; Poplewell v. Wilson, 1
Str., 264; Chadwick v. Allen, ib., 607; Goss v. Nelson, 1 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. Bey man (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. 1 " 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; Porter v. Porter, 51 Me., 376; Pindar v. Barlow, 31 Ver., 529.
SEC. 17.] COLEHAN V. COOKE. 103
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;
Howland v. Edmonds, 24 N. Y., 30.7; 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." Raraot v.
Schotenfels, 15 la., 457; Works v. Hershey, 35 la., 340; Salinas
v. Wright, 11 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, 1 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, 1 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,
104 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, 1 Esp.,
261; for a history of "days of grace," seek Trask v. Martin, 1 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; Pridge v. Sherborne, n M. & W., 374; Macloon 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,
1 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. Blackly et al., n Ohio St., 89; Morrison v. Bailey, 5
Ohio St., 13; Champion v. Gordon, 70 Pa. St., 476; Wood River
Bankv. First National Bank, 36 Neb., 744; 55 N. W. Rep. 239.
SEC. 17.] COLEHAN V. COOKE. 105
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, m'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; 18
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.
What 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., ^8; 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.
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. Ellam, 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.
106 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, 101 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; Stulls v. Silva, 119 Mass.,
137; Cota v. Buck, 7 Mete, 588; Brooks v. Hargreaves, 21 Mich.,
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., 101; 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, 1 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, 1 Bro. Par. Cas., 379,
where the name of one of the parties was supplied; Boyd v. Broth-
SEC. 17.] COLEHAN V. COOKE. 107
erson, 10 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. 1st, due thirty days after date, allow-
ing grace, would fall due Feb. 3d. By excluding the 1st 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. 1st, 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 5 th. 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. 1st, due
one month after date, it is nominally due on Feb. 1st, 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., 3953 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, 1 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 1st day of the month, it is legally due the 9th. Mitchell v.
Degrand, 1 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.
108 COLEHAN V. COOKE. [CHAP. 4,
So that now the day of the date as well as the act is excluded.
Bemis v. Leonard, 118 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 Wend., 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.
Durffy, 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. l8.] MC CALL V. TAYLOR. IO9
SECTION 18.
THE PARTIES* TO A NEGOTIABLE CONTRACT MUST BE
CERTAIN AND DEFINITE.
McCALL v. TAYLOR.1
In the Common Pleas, May 26, 1865.
[Reported in ig Common Bench, joi; 115 Eng. C. L., 301, also
in 34 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:
11 £300.00. [No dale.]
1% Four months after date, pay to my order the sum of
Three hundred pounds, for value received.
" To Captain Taylor, [No drawer's name.]
' 4 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
1 This case is cited in Wood's Byles on Bills and Notes, pp.
156, 162; 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: —
(0) Original, and
(b) Subsequent.
The original parties are: —
(a) The drawer who executes and delivers the instrument.
(6) 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.
IIO MCCALL 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/. 19s. 2d.
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 Milne about six months
afterwards. It also appeared that Bailey had been debited
for the goods in the plaintiffs 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;
(£) Endorsers or subsequent transferers.
(c) 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.
(£) Subsequent.
The original parties to a promissory note are: —
(a) The maker, or the person who executes and delivers the
contract.
(b) 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.
(6) 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. l8.] MCCALL 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. l
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.2
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.8
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,4 and
Armfield v. Allport.6 He submitted, that, though informal,
1 2 Maule & Selw. 90 (1813).
2 3 Ellis & B. 549 (E. C. L. R vol. 77); 23 Law J. Q. B., 293.
8 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,
6 C. 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. 1; 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 MCCALL 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, whether 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 Company1 is precisely in pointy There, a parcel de-
livered to a railway company for carriage contained 9/. \os.
in cash and an instrument bearing a bill of exchange
stamp, in the following terms, "Thrre months after
date pay to me the sum of ill. 10s., 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
1 3 Ellis & B. 549 (E. C. L. R. vol. 77); 23 Law J. Q. B.,
293-
SEC. l8.] MCCALL V. TAYLOR. IIJ.
that the instrument was a lt writing," and not a "bill, note,
or security for money," within the meaning of the Carriers
Act;1 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:
4 4 1 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,2 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
1 ii G. 4 & i W. 4, c. 68, s. i.
2 2 Maule & Selw. 90 (1890).
'5 Taunt. 529 (E. C. L. R. vol. 1); 1 Marsh. 29 (E. C. L.
vol. 4).
114 MCCALL V, TAYLOR. [CHAP. 4,
declared on as a bill payable to bearer. In Fielder v. Mar-
shall,1 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,2 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
l9 C. B. N. S. 606 (E. C. L. R. vol. 99).
2 3 M. & G. 576 (E. C. L. R. vol. 42), 4 Scott N. R. 204.
SEC. l8.] MCCALL V. TAYLOR. IIS
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.1 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,2 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-
1 And a person to whom the money is to be paid.
2 9 Exch. 410.
•27 Law, J., Exch. 42.
Il6 MCCALL V. TAYLOR. [CHAP. 4,
dorsed by the drawee.1 In Byles on Bills,' it 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 not to be a bill of exchange, because there
was no payee; and to Rex v. Richards,5 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 months 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 drawers 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
1 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."
28th edit. 73.
'In Minet v. Gibson, 1 A. Bl. 608.
♦Russ C. C. T85.
5R. & R. C. C. 193.
SEC. l8. ] MC CALL V, TAYLOR. 117
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. 549 (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: —
(1) 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:
(1) 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: —
( 1 ) 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., 169; 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 months after date pay to me the sum of eleven pounds ,
ten shillings^ value received. .
" To Mr. Cruttenden, Jeweller." "[2\Tol signed.'] "
' ' A ccepted, 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. l8.] MC CALL V. TAYLOR. II9
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, 1 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, 1 Mete. (Ky.), 197; Allan v. Mawson, 4
Camp, 115.
In the case of Brown v. Gilman, 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, 18/0.
li Good for one hundred and twenty -six dollars on demand.
"Gilman c- ffovt."
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, 16
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
120 MCCALL 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, 106.
A note may be payable to "the trustees of A's will " and parol
evidence is ad mis rib le to show who the trustees are. Adams v.
King, 16 111., 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 Knight 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 indorsees name," etc., was supported. 2 Hill, (N. Y. ),
154; Kayser v. Hall, 85 111., 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, 1 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, 1 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, 1 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.] 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 in 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 MCCALL V. TAYLOR. [CHAP. 4,
Company supra. There, upon an instrument precisely simi-
lar to this, except that there it was dated, Ld. Campbell says:
44 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. l8.] MC CALL V. TAYLOR. 1 23
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 MCCALL V. TAYLOR. [CHAP. 4,
Rule. Discharged.
1
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, 1 B. Mon., 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, 1 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., 489; Beverley's Case, 4 Rep., 126;
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, 73 111., 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 kfeme 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.] MC CALL V. TAYLOR. I25
also Mason v. Morgan, 2 A. E., 30; Haly v. Lane, 2 Atk., 181;
Lloyd v. Lee, 1 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. McClellan, 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. 1 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, T25 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 Wife. — 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: (1)
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; (5) when husband
126 MC CALL V. 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 V. 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, ^ 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, 1 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
128 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, 101 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.] MC CALL V. TAYLOR. 120
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
assign 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: (1) 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, 239; East London & Co. v. Bailey et al., 4 Bing., 283;
13 E. C. L. R., 435; Story on Bills, Sec. 62; Tiedeman on Corn-
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
130 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 V. TAYLOR. I3T
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. Thorn, 1 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; Daniel on Negot. Inst. Sec. 266.
132 MCCALL 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 III. 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, 1 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, 1 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.] MCCALL0. TAYLOR. 133
to be sufficient signatures by the agent to bind the principal: 4< 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; Lamed 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
parted with, notwithstanding the other party to the contract may have
acted in good faith without knowledge of the infirmity. Seavers
8
134 MCCALL 0. TAYLOR. [CHAP. 4,
v. Phelps, 11 Pick., 304; Van Pattern v. Beals, 46 Iowa, 63; Wier-
bach v. 1st. 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.] BURSON V. HUNTINGTON. 135
SECTION 19.
A NEGOTIABLE CONTRACT MUST BE DELIVERED.
BURSON v. HUNTINGTON.1
In the Supreme Court, Michigan, Oct. iith, 1870.
[Reported in 21 Mich., 415; 4 American Dec, 497*]
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, Mich., Apr. 12th, 1866.
1 ' Ninety days from date, for value received, I promise
to pay A . N. Goldwood, or order, one hundred and twelve
dollars, and fifty cents, with interest.
John IV. Burson."
Indorsed on the back,
"A. 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
lThis case is cited in Tiedeman on Commercial Paper, 282;
Edwards on Commercial Paper, 326, 328, 331, 335; Daniel on
Negotiable Instruments, 122, 8^8; 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. Gold wood, 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. 139
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.1
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.2
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.8
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
1 Story on Bills, §§ 185, 187, 203; 1 Cow. T. 209; 4 Green. /,
28; 8 Vt., 94.
2 3 Caines, 217; 9 Johns, 295; 12 Do., 306.
"Int. R. L., June 30, '64, § 158; 3 Parsons on Cont., 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.2
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.8
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.
1 Story on Notes, § 197; 12 Johns., 310; 3 Kent Com., 103; 4
Mass., 370; 6 Pick., 258; 14 Pick., 268; 1 Doug., 413; 4 Hill, 442.
3 Story on Bills, § 188; Bostwick v. Dodge, 1 Doug., 413;
Outhwite v. Porter, 13 Mich., 533; Vinton v. Peck, 14 Mich., 287.
3Woodhullv. Holmes, 10 Johns. R., 231; Vallet v. Parker, 6
Wend., 615; Rockwell v. Charles, 2 Hill, 499.
*Comp. L., § 3767.
SEC. 19.] BURSON V. HUNTINGTON. 141
Defendant pleaded the general issue, with a notice that
he would prove that the note was obtained from him by fraud
and withont 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 a 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
I42 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.1 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
1 See 1 Greenl. Ev. Sec. 165, and authorities cited.
SEC. 19.] 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.1
*See Edwards on B. and N., 175, and authorities cited, and 1
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.2 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, 12a
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.
1 1 Pars., ubi supra.
2 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.] BURSON V. HUNTINGTON. 1 45
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
44 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. 4r
dence is, as to those who have been deceived into parting
with property or incurring obligations 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, though 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 by 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.1
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
*i 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.] BURSON V, HUNTINGTON. 1 47*
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. Primrose1 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.2
'yC.B. (N. S.)., 82.
2 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.
I48 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 bona
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,1 cited by Duer. J., in Gould v. Segee,2 and that used by
Williams J., in Ingham v. Primrose.8 But a reference to the
cases will show that no such question was involved, and that
these remarks were wholly outside of the case.
1 8 M. and W., 494.
2 5 Duer. (N. Y. ), 260.
»7 C. B. (N. S.), 82.
SEC. 19.] BURSON V. HUNTINGTON. 1 49
On the other hand, Hall v. Wilson,1 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.,2 (case of maker) and Gould v. Segee.8 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 dili-
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,4 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
1 16 Barb., 548, 555, and 556.
a45 111., 285.
'5 Duer. (N. Y.), 266.
4 10 Cush., 488.
9
150 BURSON V. HUNTINGTON. [CHAP. 4,
kept, and the much greater facility 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, 1 Exch. R., 32; Brind v. Hampston, 1 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
delivery 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.] BURSON V. HUNTINGTON. 151
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; Gilman 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. W. R., 163; Ware v. Allen,
128 U. S., 590.
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 wil*
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 , 2863 Bar-
rows v. Barrows, 138 111., 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.
152 BURSON V. 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 bona 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; 16 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.] 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 valid
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 bona 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., 301. 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., 545; 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. Vinton v. Peck, 14 Mich., 287; Conrad
v. Kinzie, 105 Ind., 287; 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.] STOESSIGER V. SOUTHEASTERN RY. CO. 155
SECTION 20.
A NEGOTIABLE CONTRACT MUST BE SIGNED.
STOESSIGER v. THE SOUTHEASTERN RY. CO.1
In the Court of Queen's Bench, Easter Term, April 21, 1854.
[Reported in j Ellis <5r* Blackburn (Q. B.), 549; (77 Eng. Com.
Law, 548); 23 Law Jr. Rep. (N. S.) (Com. Law), 2pj.]
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/. 10s. 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 9/. 10s,
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
1 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.
I5<> STOESSIGER 0. 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/. iar. in
cash, was never delivered to the consignee: whereby the said
sum of 9/. 1 or. 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 ill. 10$. 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., 1852.
1 • Three months after date pay to my order the sum of
eleven pounds and ios.f 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/. iar.,
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 1 W. 4 c. 68, ss. 1 and 2, for the articles
specified in sect. 1. 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
tfhich 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 & 1 W. 4 c. 68, s.
1, 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/. iar.
The learned Judge directed a verdict for the plaintiff for
9/. io*. , 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/. ioj. 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,1 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., Bol-
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 4 ' only in a sort of embryo state. " [Ld.
Campbell, C. J. — It is more like an authority for making a
l6 C. & P., 106 (E. C. L. R., vol. 25).
SEC. 20.] STOESSIGER V. SOUTHEASTERN RY. CO. 1 59
security than an actual security.] Further, if it is contended
that this was a writing of the value of n/. ios., 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.1 There are many oases in which a party to an
incomplete instrument becomes liable upon the completion;
Schultz v. Astley2 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,8 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. 1 of the Carriers' Act, u G. 4 & 1 W. 4, c. 68. It
'Russ & R., 181.
2 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/. 1 os., more than 10/. 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 liable 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 n/. 10s. Now can it be
What Constitutes a Signature — Who 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 " 1, 2, 8," were held to take the place of the signature of the
parties. Taylor v. Dabbins, 1 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., 482; 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 delivered 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.
1 62 STOESSIGER V. SOUTHEASTERN RY. CO. [CHAP. 4,
the carrier, of a value exceeding 10/. 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 writing, 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-
te 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. [Shoup, 17 Ohio St., 125; Eastern R. R.
Co. v. Benedict, 5 Gray, 561; Emly v. Lye, 15 East, 7; Becham
v. Drake, 9 M. & VV., 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.
I
CHAPTER V.
Non-Essentials of Negotiable Contracts,
SECTION 21.
(i). NEGOTIABLE CONTRACTS NEED NOT BE DATED.
DE LA COURTIER v. BELLAMY. «
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.
Judgment for the plaintiff.2
— -_ _ — —
1 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.
2 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. 5,
Giles v. Bourne, 6 Maule & Selevin, 74 (18 16), 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.
' l 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 fide 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. // 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., 375; 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 — Where 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, may be 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
may be 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; 1 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
10
1 66 DE LA COURTIER V. 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 Miller v. Gille-
land, 19 Pa. St., 119, for the effect of such correction upon the
rights and liabilities of sureties.
SEC. 2 2.] POPLEWELL V. WILSON. 1 67
SECTION 22.
(a). NEGOTIABLE CONTRACTS NEED NOT CONTAIN A
STATEMENT OF CONSIDERATION.
POPLEWELL v WILSON.1
In the King's Bench, Hilary Term (6 Geo.), 1719.
[Reported in i Strange, 263.]
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,
1 This case is reported in Wood's Byles on Bills and Notes,
i54> 2I9» 2235 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, 1
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":
(< Quarry ville, 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.t 230; State Nat. Bank v. Cason, 39 La. Ann., 865; McGowen
1 68 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, 90 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 Me., 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, 1 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, 1 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 lies 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. 2 2.] 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, 1 B. & P., 65i;Hayly v. Lane, 2 Atk., 182;
Lickbarrow v. Mason, 2 T. R., 71; Ford v. Beech, 11 Adolph. &
E., 854.
What 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., 25th, 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 compensation from my estate, and feeling able at pres-
ent to fully compensate her, I therefore and hereby acknowledge my-
self indebted to her in the sum of $2,500, 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
111., 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, 114 111., 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, 1 Ryan. & Mood., 125. While some cases
have attempted to hold that this was a good consideration, [Tate
v. Hilbert, 2 Ves. Jr., in; Seton v. Seton, 2 Bro. Ch., 610; Daw-
son v. Kearton, 25 L. J. Ch., 166], 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, 160 111., 425; Voorhees v. Combs, 33 N. J. L., 494; Pope
v. Dodson, 58 111., 360, (gift inter vivos); Raymond v. Sellick, 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 slightest
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 received, I promise to pay I. Af. Sawyer, if living,
if not, to his son Joseph Sawyer, fifteen hundred dollars, on the first
of October, 1862. Joseph Sawyer.91
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.] POPLEWELL V. WILSON. 171
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, 16 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.); Phoenix Ins. Co. v. Church, 81 N. Y.,
225; Mix v. Nat. Bk., 91 111., 20; Bardsley v. Deep, SS 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.] NON-ESSENTIALS. 1 73
SECTION 23
<0 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. Hemes, 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. go 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., 1. 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.
(J). A COMMERCIAL CONTRACT NEED NOT CONTAIN THE
INDICIA OF NEGOTIABILITY.
KENDALL ET AL. v. GALVIN.1
In the Supreme Court, Maine, June, 1838.
[Reported in ij Maine, /J/.]
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 & Kings bury \ Gents. — Please pay
N. K. Seaton four hundred fifty-five dollars, thirty-six
cents, and charge the same to my account.
* l Calais, June 7, iSjo. Geo. I. Galvin. "
The plaintiffs also proved by Seaton the acceptance and
payment of the order or bill by them. The defendant's coun-
sel contended, that the plaintiffs had not entitled themselves
to recover, and requested the judge to instruct the jury that
the acceptance and payment of the order, by the plaintiffs was
prima facie evidence of funds of the defendant in their hands,
and that it was incumbent on the plaintiffs to rebut that pre-
sumption to entitle them to recover. The Judge refused to
give this instruction, and did instruct them, that if the plain-
tiffs have shown an order drawn by the defendant on them,
and that they accepted and paid it, that makes out their
case; that the plaintiffs were not bound to show that they had
not funds of the defendant in their hands; and that if Galvin
had funds in their hands, it was competent for him to show it.
The verdict was for the plaintiffs, and the defendant excepted.
Claim of Defendant. — It was argued for the defendant
that the instrument relied on was a bill of exchange.2 The
1 This case is cited in Daniel on Negotiable Instruments, 88,
108; Wood's Byles on Bills and Notes, 155, 604. See also Mehl-
burg v. Tisher, 24 Wis., 607.
2Chitty on Bills, 1, 50; Bayley on Bills, 1.
SEC. 24.] KENDALL ET AL. V. GALVIN. I 75
acceptance of a bill of exchange is prima facie evidence of ef-
fects of the drawer in the hands of the acceptor.1 Where the
law presumes the affirmative of any fact, the negative of such
fact must be proved by the party averring it.a And in an ac-
tion for money paid, the acceptor must prove such facts as he
ought to state in the special count.3
Claim of Plaintiff. — The plaintiff, contended that this
was a mere order, or request to pay a sum of money for the
defendants, and not a bill of exchange. It wants the essen-
tial requisities of a bill:
1st. In not being payable to order or bearer.
2d. It does not appear to be for value received.
3rd. No time is fixed for the payment.
4th. It is not made payable at any particular place, nor
is even the residence of the party on whom the order is drawn
stated. The law does not require the negative to be proved,
and yet the defendant's case requires it.4
Decision. — The acceptance of a bill of exchange by the
drawee, is presumptive evidence that he had effects of the
drawer in his hands. It is so stated by the elementary writers
upon bills, and the authorities authorize it.6
Whether the instructions given were correct must de-
pend, therefore, upon the instrument offered in evidence by
the plaintiffs. If it is to be regarded as a bill of exchange,
the instructions were erroneous, because no testimony was of-
fered to rebut this presumption at law. If it can be regarded
as an order or request to pay money, and not a bill of ex-
change, and so not within the rule applicable to them, then
the instructions were correct.
No precise form of words are necessary in a bill of ex-
change.* There are certain essential requisities; such as, that
it be payable at all events, not on a contingency, not out of a
1 Chitty on Bills, 365, 410; 3 T. R., 183; 1 Wilson, 185; 2
Stark. Ev., 276.
2 2 Harrison's Dig., 1115; 3 East, 192; 3 Campb., 10; Varrili
v. He aid, 2 Greenl., 91; 2 Stark. Ev., 276; Chitty on Bills, 399.
8Bayley on Bills, 312.
4 Chitty on Bills, 212; note 1.
62 Stark Ev., 167, 8; Vere v. Lewis, 3 T. R., 183.
* Morris v. Lee, Ld. Ray., 1396.
CHAPTER VI
Acceptance.
SECTION 25.
THE DRAWEE OF A BILL OF EXCHANGE IS NOT LIABLE
THEREON UNTIL HE HAS ACCEPTED THE SAME.
SWOPE v. ROSS ET AL.1
In the Supreme Court of Pennsylvania, July 25, 1861.
[Reported in 40 Pa. St., 186; 80 Am. D., 567.]
The Form of Action. — This was an action of assumpsit
in the Common Pleas, entered February Term, i860, between
George Ross & Co. , plaintiffs, and Swope & Karns, in which
the following case was stated for the Opinion of the court in
the nature of a special verdict.
Ross Forward gave to Swope & Karns the following
instrument of writing:
"$616.00. "Somerset, Pa., August 18 th, 18 jp.
* * George Ross & Co. , Bankers, pay to Swope & Karns,
or order, ninety days from date, six hundred and sixteen
dollars. Ross Forward"
On or about the 1st of September thereafter, Swope, one
of the firm of Swope & Karns, delivered this paper (indorsed
Swope & Karns) to the plaintiff's bank, had the same dis-
counted, and received the money thereon less the discount,
$16.40.
At the time this check was given, and when it was dis-
counted at the bank, Ross Forward was one of the firm of
George Ross & Co., but went out on the 19th of September,
1859-
1 This case is cited in Daniel on Negotiable Instruments, 480,
501; Wood's Byles on B. & N., 406; Bigelow on B. & N., 42,
243; Bigelow's Cases on B. & N., 361; Norton on B. & N., 81,
84, 281; Benjamin's Chalmers Bills of Exchange and Promissory
Notes, 44, 53* 233-
SEC. 25.] SWOPE V. ROSS ET AL. 1 79
When the day of payment named in the check came round,
Forward had no funds in the bank, and the paper was regu-
larly protested for non-payment on the 19th of November, 1 859.
If the court be of the opinion that on the above state of
facts the plaintiffs are entitled to recover, the judgment to be
entered in favor of plaintiffs for $616, with interest from No-
vember 19th, 1859; otherwise judgment for defendant with
costs. Notice of dishonor of the bill was admitted in the ar-
gument. , The court below entered judgment for plaintiffs for
$616, with interest from November 19th, 1859.
Argument of Plaintiff. — The plaintiffs in error, argued
that the drawee of a check, payable in the future, who discounts
it to the payee before it is payable, is not entitled to recover
the money from the payee on account of the insolvency of the
drawer. A check is, in form and' effect, a bill of exchange.
If George Ross & Co. had accepted this check, their liability
to pay at maturity would not be questioned, whether the
drawee had funds or not; the acceptor being the principal
debtor.1
Payment before maturity is equally conclusive, and the
bank can only resort to Forward for reimbursement.
As the check was to the order of Swope & Karns, their
indorsement was necessary, of course, and would have been
so if it were payable on demand.
If they had received the money on this from any other
party than the drawee, their endorsement would have made
them liable on failure of payment by the drawee; but here the
drawee pays the money according to the request of the drawer,
and receives from the holder $16.40 for present payment.
Besides, the drawer was a member of the firm of George Ross
& Co. , the drawees, so that the doctrine of the court below is,
that a man may draw a check on himself, payable in future,
speculate on it before maturity, and, on his insolvency, com-
pel the payee to refund the whole amount.
Argument of Defendant. — The paper in controversy,
not being due, was not presented, for payment, nor did the
plaintiffs agree to accept it to be paid when due, but they did
1 3 Kent. , 85 .
180 SWOPE V. ROSS ET AL. [CHAP. 6
agree to discount it on defendant's endorsement, as other un-
due paper is discounted. This indorsement by plaintiff, with-
out acceptance, waived the acceptance, and guaranteed the
other member of the firm of George Ross & Co. , that For-
ward would pay it at maturity, which having failed to do, the
indorsees become liable.
Although a check is in effect a bill of exchange, it is also
true that bills payable to order are negotiable; and a transfer
by indorsement is similar to making a new bill, the indorser
being a new drawer.1 A blank indorsement is an equivocal
fact, and it is in the power of the holder to use it as an ac-
quittance to discharge the bill, or as an assignment to charge
the indorser.2
It was not a payment of their own paper. Forward,
though a member of the firm of Ross & Co. , was as much a
stranger in this transaction as any other person.
Decision. — The question presented by the case stated is
quite novel, and we have not been able to find that it
has been adjudicated. Undoubtedly the acceptor of a
bill of exchange is the principal debtor, and the drawer and
indorsers are but sureties. Of course the acceptor, even after
payment, cannot sue either the drawer or indorser of the bill
unless his acceptance was supra protest. His payment of the
bill extinguishes it; but the case stated finds that the plaintiffs
discounted the bill for the payees before it became payable,
not that they accepted it or paid it. Discounting a bill,
though it be done by the drawee, is neither acceptance nor
payment. Acceptance is an engagement to pay the bill ac-
cording to its tenor and effect when it becomes due. A bill is
paid only when there is an intention to discharge and satisfy
it. In Burbidge v. Manners,3 Ld. Ellenborough said "that
even payment of a bill before it became due, does not extin-
guish it any more than if it were merely discounted," and
added that ' ' payment means payment in due course and not
by anticipation." His lordship evidently thought that dis-
1 1 Wheaton's Selwyn, 285.
2 2 Id., 287.
8 3 Camp., 194.
SEC. 25.] SWOPE V. ROSS ET AL. l8l
counting a bill by a drawee is neither payment nor extinguish-
ment.
In Attenborough v. McKenzie,1 in the English Court
of Exchequer, it was held that if the acceptor of a bill dis-
counts it, he may reissue it so as to charge the drawer; that
nothing will discharge the drawer but payment, i. e. , payment
when due, or payment for the purpse of discharging and sat-
isfying the bill. Therefore if the acceptor discounts the bill
for the drawer and then indorses it away, the drawer will be
liable upon it to the holder, and the transfer by the drawer to
the acceptor will operate as an indorsement, although, at the
time, the drawer does not intend to transfer by way of indorse-
ment, being under the impression that the bill is discharged
by coming into the hands of the acceptor. Nor will the pay-
ment of the amount less the discount, be deemed a payment
of the bill by the acceptor. In that case the holder of the
bill took it by indorsement after it was due, from the trans-
feree of the acceptor. The ruling goes to the length that
even the accepting drawee of a bill may take it as an indorsee,
and as such may issue it. It also decides that he does take
it as an indorsee when he discounts it. Can then the drawee
of a bill, payable on time, who has discounted it, maintain an
action on it against the drawer or indorser if it be protested
for non-payment and notice be given? He is not a party to
the bill until he has accepted it. Until then, he has not as-
sumed the position of principal debtor •, nor undertaken any
obligation in regard to it. His discounting has neither paid
nor extinguished it, and it is not a promise to pay according
to its tenor and effect. Is he precluded from becoming an,
indorser by the fact that the bill was directed to him?
The Drawee May Become an Indorser. — It seems well
settled that the drawee of a bill may accept or pay it, supra-,
protest, for honor of the drawer or indorser, and if he takes it
up he stands in the position of an indorsee paying full value for
it, has the same remedies to which an indorsee would be-
entitled against all prior parties, and can of course sue the-
drawer or prior indorsers.2 In such cases the fact that the-
*36 Eng. Law and Eq., 562.
aChitty on Bills, 375.
11
I
~\
182 SWOPE V. ROSS ET AL. [CHAP. 6,
bill was drawn upon him does not incapacitate him from ac-
quiring the rights of an indorsee. No reason is apparent for
a different rule where the drawee becomes the holder by dis-
counting the bill before its dishonor. Uncertain whether the
drawer will put funds into his hands to meet the bill at matur-
ity, he may well refuse to accept, and yet may discount it on
the credit of both drawer and indorser. If he does not accept
he is as much a stranger to it as any other person discounting
it for the drawer or indorser. He is but purchasing the con-
tract, and the contract thus purchased is that the drawee will
pay the bill on presentment, when it shall fall due, or in case
of his failing to do so, that the parties whose names are already
upon it will pay, if due notice of its dishonor be given to
them. The promise is made by the parties to the bill. The
purchaser enters into no engagement.
These views accord with the doctrine laid down in Desha
Shephard & Co. v. Steward,8 a case which more closely resem-
2 6 Alabama, 852.
Acceptance Defined. — An acceptance is the act, by which
the person, on whom a bill of exchange is drawn, gives his assent
to comply with the request of the drawer. In other words an ac-
ceptance is an undertaking by the drawee of a bill of exchange to pay
the same according to its terms. 2 Bl. Com., 469; Swope v. Ross,
40 Pa. St., 186; Norton on Bills and Notes, 80; Ellison v. Colling-
ridge, 9 B. and C, 570. It has also been defined "as a promise
to pay a bill of exchange in money when due " Gallagher v. Nich-
olas, 60 N. Y., 438 (1875); ^ay v- Faulkner, 73 111., 469 (1874);
Bonnell v. Mawha, 8 Vt, 200; Spear v. Pratt, 2 Hill (N. Y. ),
582.
Form of an Acceptance. — There is no particular form re-
quired for an acceptance under the law merchant. No form of
words were necessary under the Lex Mercatoria to constitute a
valid acceptance of a bill of exchange. It was sufficient if the
drawee, in fact, undertook or promised to pay the bill, by any
form of expression. Coffman v. Campbell, 87 111., 98; Espy v.
Cincinnati First Nat. Bk., 18 Wall., 604.
(a). May be by Parol orin Writing. — Under the law mer-
chant an acceptance might be either by parol or in writing; and it
might be upon a separate piece of paper even. Sturges v. Fourth
Nat. Bk., 75 111., 595; Wilden v. Merchant's Bank, 64 Ala., 1;
Miller v. Neihaus, 51 Ind., 401. Many of the states now require
acceptance to be in writing. See statutes of your state.
( b. ) May be of a Bill not yet Drawn. — So also might there
SEC. 25.] SWOPE V. ROSS ET AL. 1 83
bles the present than any case we have been able to find. In
it the Supreme Court of that state ruled that the drawees of
a bill may sue the drawer or indorsers after it has been dis-
honored, even though they obtained the bill before its dis-
be an acceptance of a bill not yet drawn, and this acceptance
might be either by parol or in writing; and the acceptance would
be binding even though the exact amount of the bill and the time
for payment have not been fixed. Parker v. Greele, 2 Wend., 545;
Kennedy v. Geddes, 3 Ala., 581; Bank of Michigan v. Ely, 17
Wend., 508; Coolidge v. Payson, 2 Wheat, 66; Jones v. Council
Bluffs Bank, 34 111., 313; Burns v. Rolland, 40 Barb., 368; Bank
of Rutland v. Woodruff, 34 Vt, 89; Mason v. Dousay, 35 111.,
424; Sturges v. Fourth Nat. Bk., 75 111., 395; Hall v. First Nat.
Bk. A promise to accept a bill not yet drawn may operate as an
acceptance if the bill is drawn within a reasonable time, and this
is true not only as to the drawer, but as to every party who takes
the bill on the faith of such promise. Plumer v. Lyman, 49 Me.,
229; Stevman v. Harrison, 42 Pa. St., 49; Riggs v. Linsay, 7
Cranch, 500; McEvers v. Mason, 10 Johns., 207. It has beenheld
that an authority to draw a bill of exchange if the same is partic-
ularly described, implies a promise to accept. This authority
must be strictly complied with, however, and be acted upon with-
in a reasonable time. Ulster Bank v. McFarlan, 3 Den. (N. Y.),
553 > Naglee v. Lyman, 14 Cal., 450; Beech v. State Bank, 2 Ind.,
488; Gates v. Parker, 43 Me., 544; Burns v. Rowland, 40 Barb.,
368; Spalding v. Andrews, 48 Pa. St., 41c. Upon the question
whether there may be a parol acceptance of a future bill, there is
some conflict of authority. Kennedy v. Geddes, 8 Port (Ala. ),
263; Mercantile Bank v. Cox, 38 Me., 500; Plumer v. Lyman, 49
Me., 229; Spalding v. Andrews, 48 Pa. St., 411.
(c. ) May be by Telegram. — An acceptance may also be by
telegraph. In re Armstrong, 41 Fed. Rep., 381; North Atchison
Bank v. Garreston, 51 Fed. Rep., 168; Spalding v. Andrews, 48
Pa. St., 411.
(d.) May be Implied from the Detention or Destruc-
tion of a Bill. — An acceptance of a bill of exchange may be im-
plied from acts, such as the detention for a long time, contrary to
the usage of the parties under such circumstances as to give credit
to the bill. Dunavan v. Flynn, 118 Mass., 537; Storer v. Logan,
9 Mass., 55, 60; Rousch v. Duff, 35 Mo., 312. Whether a deten-
tion of the bill will amount to an acceptance or not, must depend
upon the circumstances of the case. A mere detention of the bill
by the drawee will not amount to an acceptance. Mason v. Barff,
2 B. & Aid., 26. If the bill is detained Jby the drawee for more
than twenty-four hours, or for a period long enough to enable the
drawee to ascertain the state of the account between he and the
drawer, the better doctrine is that such detention should be treated
184 SWOPE V. ROSS ET AL. [CHAP. 6,
honor; and that until acceptance they are strangers to the
bill, and may acquire rights to it, and stand in the same con-
dition as any other holder. It was said that there is no legal
presumption if th«* drawee comes into possession of the bill
as a non acceptance of the bill and should be protested, when
necessary. When the holder leaves a bill with the drawee for ac-
ceptance, and it is his duty to call for it within a reasonable time,
for the purpose of ascertaining whether it has been accepted or not,
the detention, of course, will not amount to an acceptance. Jeune
v. Ward, 2 Starkie, 326. If the drawee, however, retains the bill
and does not notify the holder of his intention to accept it or not,
and subsequently destroys it, he will be liable as an acceptor.
Jeune v. Ward, supra; Matteson v. Moulton, 11 Hun., 268. Mr.
Daniel, in his valuable work on Negotiable Instruments, says,
"Asa general rule, the mere detention for an unreasonable time
is not considered as amounting to an acceptance. " Daniel on Ne-
gotiable Instruments, Sec. 499a. This, of course, must depend
upon the circumstances in the particular case or upon the custom
of the parties. The better doctrine seems to be, in the absence of
any understanding, that if the drawee detains the bill for more
than 24 hours, without indicating his intention to accept, he should
be treated as having refused acceptance and due notice should be
given to the drawer. Bank v. Bank, 8 Barb., 396; 7 N. Y*.t 459;
Daniel on Negotiable Instruments, Sec. 492.
(e.) A Promise to Pay Amounts to an Acceptance. —
It has been held that a promise to pay a bill at maturity
amounts to an acceptance. Spaulding v. Andrews, 12 Wright, 41 1.
So also has, the authority " to draw i% a bill of exchange with a
promise to pay the same, been held to be an implied acceptance.
(/. ) May be Upon the Bill or Upon a Separate Paper. —
The acceptance may be written upon the bill itself, either upon its
back or upon its face, or it may be upon a separate piece of paper.
If upon a separate piece of paper, the language indicating the
acceptance must be clear and unequivocal and should clearly
point out the particular instrument accepted.
(g. ) Need Not be Dated. The acceptance need not be
dated. It may be before it has been signed by the drawer or
afterward. It may be before or after maturity. It may also be
before or after dishonor. The drawee may accept it after he has
once refused to accept or pay the same.
(/i.) Need Not be Accepted When Drawer and Drawee
are the Same Person, Corporation, or Partnership. — No
formal acceptance of a bill of exchange drawn, by a person or cor-
poration upon himself or itself, is necessary, the act of drawing
being deemed an acceptance. Hasey v. White Pigeon Co., 1
Doug. (Mich.), 193. So also will the act of drawing a bill by
one partner, in his own name, on the firm of which he is a mem-
SEC. 25.] SWOPE V. ROSS ET AL. 185
previous to its dishonor, that he takes it with the obligation
to accept.
Such being in our opinion the law, it was not error that
ber, for the use of the partnership, in law amount to an accept-
ance by the drawer in behalf of the firm. Dougal v. Chowles, 5
Day (Conn.), 511.
(/'. ) Some States Require the Acceptance to be in
Writing. — At common law the acceptance might be either by
parol or in writing, but many of the states have by statute provid-
ed that no acceptance shall be good unless the same shall be
reduced to writing. It has been held that an acceptance may be
made by telegram and that this form of acceptance is sufficient to
comply with the statutes requiring the acceptance to be in writing;
a telegram standing upon the same footing as a letter. Central
Savings Bank v. Richards, 109 Mass., 414; Nevada Bank v. Luce,
139 Mass., 488; Coffman v. Campbell, 87 111., 98; Lindley v.
First Nat. Bk., 76 Iowa, 630; Brinkman v. Hunter, 73 Mo., 172;
First Nat. Bank v. Clark, 61 Md., 401; Molson's Bank v. How-
ard, 40 N. Y. Sup. Ct, 15.
(/. ) The General Method of Acceptance. — The usual
mode of making an acceptance is by writing the word "accepted"
upon the face of the bill and subscribing the drawee's signature.
If it is payable after sight, the date of the acceptance should be
given also. It has been held that the drawee's name alone, written
upon the face or any part of the bill, would be a sufficient accept-
ance; so also has the word " accepted," "presented," "seen,"
"honored," or a direction to a third person to pay, or the day of
the month, or "I will pay this bill," have all been held to be a
good acceptance even though such statement was not signed.
Powell v. Monnier, 1 Atk., 611; Dufaur v. Oxenden, 1 M. & R.,
90; Spear v. Pratt, 2 Hill, 582; Ward v. Allen, 2 Mete. (Mass. ), 53;
Cook v. Baldwin, 120 Mass., 317, where the signed statement "I
take notice of the above," was held to be an acceptance; Brannin
v. Henderson, 12 B. Mon. (Ky.), 61, where "I will see the with-
in paid eventually," was held to be a good acceptance. Any
statement or the use of any form of words, from which an inten-
tion to accept can be inferred, will amount to an acceptance.
What Bills Must be Presented for Acceptance. —
All bills of exchange need not be presented for acceptance. None
need be presented for acceptance unless they are payable after
sight or a certain number of days after demand. All bills of ex-
change may be presented for acceptance unless they are payable at
sight. The holder can not look to the drawer for reimbursement
until after the bill has been presented for acceptance or payment
to the drawee unless such presentment has been excused.
The Liability of the Drawer. — The drawer's liability is a
conditional one, depending:
\/
1 86 SWOPE V. ROSS ET AL. [CHAP. 6,
the Court of Common Pleas gave judgment for the plaintiff
upon the case stated. The fact is not distinctly found that
notice of dishonor of the bill was duly given to the defendants,
i st. Upon presentment for acceptance or demand of pay-
ment, and
2d. Upon receiving due notice of a failure to accept, or to
pay the bill at maturity.
The drawee by accepting the bill, assumes the same liability as
that of a maker of a promissory note — being the principal debtor.
Wallace v. McConnell, 13 Pet, 136.
If, however, the bill is payable at a particular time after date,
presentment for acceptance is unnecessary. Commercial Bank v.
Perry, 10 Rob. (La.), 61.
It is always sufficient to present a bill for payment at maturity.
Varieties of Acceptances — Defined. — There are but two
general kinds of acceptances: (1) Absolute or general, and (2)
Conditional or qualified. The various authors upon negotiable
instruments have given other kinds of acceptances depending
largely upon the method of acceptance. They mention express,
implied, verbal, partial, local, virtual, and written.
(a.) Absolute Acceptance — Defined. — An absolute ac-
ceptance is one by which the drawee promises to pay the bill
according to its tenor.
(b.) Conditional Acceptance — Defined. — A conditional
acceptance is one where the drawee promises to pay the bill
according to some condition imposed.
Effect of a Conditional Acceptance.— If the holder
accepts a conditional acceptance, he thereby releases all prior
parties from liability unless they assent to such conditional accept-
ance in some way.
An express acceptance may be either absolute or unconditional.
It is usually indicated by writing the words " Accepted," or
"Seen," "Honored," or "I will pay the bill," or "A direction to
some third person to pay the bill," or any statement either ver-
bally or in writing by which the drawee indicates his intention to
accept and pay the bill. Phillips v. Frost, 19 Me., 77; Spear v.
Pratt, 2 Hill, 582; Cook v. Baldwin, 120 Mass., 317.
But in Iowa it was held that the statement " Kiss my foot,"
signed by the drawee, was a rejection of the bill. Norton v.
Knapp, 64 la., 112.
It has been repeatedly held that any word or statement by the
drawee which does not in itself negative the request to accept,
may be treated as a valid acceptance. Dufaur v. Oxenden, 1
Moody & R., 90.
Implied Acceptance — Defined. — An implied acceptance is
any act on the part of the drawee which clearly indicates an inten-
tion on his part to comply with the request of the drawer. This
SEC. 25.] SWOPE V. ROSS ET AL. 187
but it was conceded on the argument that such was the fact,
and that such is the meaning of the case stated.
The judgment is affirmed.
act may be either in words or conduct in the absence of statutory
regulations. Anderson v. First National Bank, 2 Fed. Rep., 125;
McCutchen v. Rice, 56 Miss., 455.
The implied acceptance may arise from a detention or a
destruction of the bill or from some other unwarranted use of it.
If the drawee, however, destroys a bill after he has notified the
drawer or holder that he would not accept it, such destruction
will not amount to an acceptance. Hall v. Steel, 68 111., 231;
Dunavan v. Flynn, 118 Mass., 537.
It has been held that a part payment of the bill would not
amount to an acceptance in writing. Cook v. Baldwin, 120 Mass.,
317; Bank of Rutland v. Woodruff, 34 Vt., 89.
A detention of the bill may or may not amount to an implied
acceptance, depending upon: 1st — What is said at the time the
bill is left with the drawee, and 2nd, the custom between the
parties. Chitty on Bills, 334.
Local Acceptance — Defined. — A local acceptance, may be
either absolute or conditional, but is made payable at some par-
ticular place. Troy City Bank v. Lauman, 19 N. Y., 477.
Partial Acceptance — Defined. — A. partial acceptance is one
where the drawee undertakes to pay but a part of the amount of
the bill. Petit v. Benson, Comberbach (1697), 452.
Virtual Acceptance — Defined. — A virtual acceptance is a
mere promise to accept.
Acceptance — When Excused. — The presentment for ac-
ceptance of a bill of exchange will be excused under the following
circumstances: —
a. Where the drawee is dead; or
b. Where the drawee is a fictitious person; or
c. Where the drawee has absconded; or
</. Where after due diligence the drawee cannot be found.
An irregular presentment will be held good where the drawee
refuses to accept upon other ground.
l88 PETIT V. BENSON. [CHAP. 6,
SECTION 26.
AN ACCEPTANCE SHOULD BE ABSOLUTE AND IDENTICAL
WITH THE TENOR OF THE BILL. A PARTIAL, CONDI-
TIONAL OR QUALIFIED ACCEPTANCE WILL RENDER
THE PARTIES TO SUCH AN ACCEPTANCE LIABLE AC-
CORDING TO THE TERMS OF THEIR ACCEPTANCE.
PETIT v. BENSON.1
Trinity Term, 1697.
[Reported in Combcrbach, 452. ]
A bill was drawn upon the defendant, who accepted it by
indorsement, in this manner: UI do accept this bill to be
paid, half in money and half in bills." And the question was,
whether there could be a qualification of an acceptance; for it
was alleged that this writing upon the bill was sufficient to
1 This case is cited in Daniel on Negotiable Instruments, Sec.
508, 516; Story on Bills of Exchange, 239; Ames on Bills and
Notes, 146. Benjamin's Chalmers on Bills, Notes and Checks,
5 1 ; Norton on B. and N. , 84.
In the case of Wegerfloffe v. Keene, (1 Strange, 214), Strange
attorney for defendant said: " This was an action upon the case
upon the custom of merchants brought by the person to whom a
foreign bill of exchange is made payable, against the acceptor.
The declaration set forth, that one James Collet, being a merchant
residing in Christiana in Norway, according to the custom of mer-
chants drew his first bill of exchange upon the defendant, request-
ing him to pay the plaintiff such first bill (his second not being
paid) of 127/. i8j. 4//. which bill was afterwards, viz., December
9th, 17 1 7, shown to the defendant, who accepted to pay 100/, upon
the 8th day of February following, by virtue whereof he became
chargeable, et in consider at ione inde eisdem die et anno ultimo su-
pradictis super se assumpsit, to pay the same on the said 8th day
of February tunc prox* sequent cm, which he has not done accord-
ing to his undertaking. There is likewise a count for monies had
and received, and an insimul computassent. The defendant as to
those two counts pleads non assumpsit, and as to the count upon
the bill, he pleads, that the said James Collet drew another bill for
100/ only, wherein he countermands the payment of the odd 27/.
1 8 s. 4d. by virtue whereof the defendant paid the 100/ in satisfac-
tion of the first bill, and the plaintiff accordingly received it in
satisfaction. The plaintiff protestando that the defendant did not
pay it in satisfaction; for plea saith, that he never received it in
satisfaction. And to this replication the defendant demurs.
Strange pro defendente, I shall not trouble the court with an
SEC. 26.] PETIT V. BENSON. 189
charge him with the whole sum. But it was proved by divers
exception which has formerly been taken to these replications, that
the payment in satisfaction has been admitted, the traverse of the
acceptance is immaterial; for I am sensible, it has been adjudged
to be well enough in the case of Young v. Ruddle, Salk., 627, and
of Hawshaw v. Rawlings, in this court, upon the ground, that
there can be no payment in satisfaction, without an acceptance in
satisfaction; and therefore a traverse of the acceptance is an argu-
mentative denial of the payment; for if the plaintiff did not accept
it in satisfaction, the consequence of that is, that it was not paid
in satisfaction.
Laying therefore the plea and replication aside, I shall take
up the case as it stands upon the declaration, and upon that, offer
some things distinctly, both as to the matter, and as to the manner
of it.
As to the matter of it, the case is no more than this; the per-
son to whom a foreign bill of exchange is made payable, brings his
action against the drawee, upon a partial acceptance for so much
of it as he undertook to pay, and counts upon the custom of mer-
chants.
The single point which will arise upon this case is, whether a
partial acceptance be good or not within the custom of merchants.
And I shall endeavor to prove, that this acceptance is a void ac-
ceptance, and consequently the plaintiff has no cause of action.
That I may not be misunderstood when I call this a void ac-
ceptance, I would premise, that I do not mean, it is so absolutely
void as to exclude any remedy against the acceptor, for I must ad-
mit, that this acceptance will create a contract between the parties,
upon which an action upon the case would have laid. But what I
shall insist upon is, that this is a void acceptance within the cus-
tom of merchants, upon which the plaintiff has founded his case;
and if it be void within the custom of merchants, then, whatever
effect it would have as a private contract between the parties, will
be a matter foreign to the present question, in as much as the plain-
tiff has not relied on it as such, but has brought his action upon
the custom.
I have inquired into the practice of merchants in this case,
but have not been able to get any certain account of this matter.
The true reason of which I apprehend to be, that it is a case
which seldom or never happens amongst merchants, for they
honor one another's bills, though there are no effects of the
drawer in their hands; and they would esteem it the greatest
blemish that could be cast upon them, if their correspondent should
once refuse to answer their bills any further than they had effects
in his hands.
What account I have received, I shall submit to the court.
Some are of opinion, that an acceptance for part is an acceptance
for the whole, in as much as it deprives the party of the benefit ) i
I90 PETIT V. BENSON. [CHAP. 6,
merchants that the custom among them was quite otherwise,
protesting, and so resorting back to the drawer. But I apprehend
there is no reason at all for this. To say that because commonly
a man does honor another's bill beyond what effects he has in his
hands, that therefore he must do it, is a strange conclusion. For
suppose he has but 20/. of the drawer in his hands, and is bound
to answer a bill for so much; it would be highly unreasonable, that
in case the other should draw for 10,000/. this man must either pay
the whole, or subject himself to an action for non-performance of
the condition.
But if this notion should prevail, that an acceptance for part
is an acceptance for the whole; yet as on the one hand it charges
the acceptor with the entire sum, so on the other hand it discharges
him of this action. For then there can be no color to split the
demand into two actions, but the plaintiff, in declaring for part
ought to show, that the rest is satisfied. Salk., 65.
Others are of opinion, that the party ought not to have taken
this acceptance, but protested the bill as to the whole, and sent
for another to the value of what the drawee would answer. This
likewise makes for the acceptor the defendant.
I am informed indeed, there is one gentleman who does
attend to say, that this matter has happened in his own experience;
but he, by what I find, is alone in that opinion, and perhaps may
not have considered Ihe consequences of it.
As there is this diversity of opinions upon a matter which sel-
dom or never comes in practice, I shall take it upon the reason of
the thing, with a view likewise to the many inconveniences which
will follow as a consequence of establishing this partial acceptance.
The better to come at this, it may not be improper to state
the method of transacting these affairs. When the party to whom
a bill of exchange is made payable receives it, he immediately ap-
plies to the drawee to get his Acceptance: if he accepts it, nothing
further is done till the day of payment, and then if it be paid the
matter is at an end. But if the drawee will not accept it, then the
party is to protest the bill, and send back the protest by the next
post. When the time of payment comes, he tenders the bill again, and
then the drawee may either pay it or refuse it: if he refuses it, then
there is a second protest for non-payment, and the bill itself is re-
turned. And so it is if he accepts it, and afterwards refuses to pay
it. From all this I would infer, that there can be no partial pro-
test for non-acceptance, which as I am informed is a protest not
in the memory of any but one of the notaries public. The words
of all protests are; / exhibited the original bill to the person to whom
directed, and demanded his acceptance thereof. Now an accept,
ance of part is not an acceptance thereof, no more than payment
of part is a payment of the whole. There is a book which goes by
the name of " Advice Concerning Bills of Exchange," and is es-
teemed amongst those who are most conversant in these affairs.
SEC. 26.] PETIT V. BENSON. I9I
and that there migftt be a qualification of an acceptance: for
And in fol 33, of that book it is said, that nothing but an accept-
ance to pay secundum tenorem bit Ice can deprive the party of the
benefit of a protest. And in fol. 16 of the same book he puts the
case of a bill drawn on A. and B., who are not joint- traders, and
an acceptance by one only: this says he goes for nothing, and the
party must protest the bill as in case of no acceptance. These are
the words of the book: and by putting the case of two who are not
joint- traders, I should apprehend he means, that each being charged
with a moiety, the acceptance of one is but an acceptance to pay a
moiety, which is but a partial acceptance, and therefore void: and
this is explained by the case of Pinkney v. Hall, (Salk., 126), where
one joint trader accepted a bill, and it was held to be the accept-
ance of both, because both were equally liable to pay the whole.
And to this purpose likewise, is Molloy de Jure Maritirao in the
chapter concerning bills of exchange.
If there can be no protest for non-acceptance of part, I would
consider how the case would stand in regard to allowing this par-
tial acceptance: the natural and plain consequence of that will be,
to put it in the power of the drawee, to defeat the other of the
benefit of protesting a bill for 10,000/. by his acceptance to pay
one penny only; for this I would submit, that if the party may take
such an acceptance, he must take it: if it will be good, he cannot
refuse it, for it is not at his election to charge the drawer but upon
the other's default; the drawee is the person to whom he must first
resort, and if he refuses, then and not till then, is there a proper
remedy against the drawer; and therefore in the action against the
drawer the plaintiff must show a protest, which is an endeavor to
receive the money of the drawer. Salk., 131.
But even admitting there may be a partial protest for non-ac-
ceptance, yet the inconveniences which will follow of course are
so great, that I hope it shall never be established by the judgment
of the court.
It would be endless to put cases where it has been held, that
rent-charges and the like cannot be apportioned; and therefore I
shall rely entirely upon the reason of the thing, that in this case
the contract between the drawer and the person to whom the bill is
payable is entire and not divisible. By this contract the drawer
(and consequently the indorser) subjects himself to an action if
the money be not paid at the time: but though he becomes liable to
one action, yet there is no reason, that by transactions between the
party to whom the bill is payable, and the drawee, to which he is
not privy, this contract should be branched out into several actions,
which will unavoidably be the case of every partial acceptance: for
I do not apprehend how this can be reduced to one action by re-
fusing this partial acceptance: and protesting for the whole; be-
cause (as I observed before) if the party may take it, he must take
it, and can charge the drawer no farther than there is a default in
the drawee.
I92 PETIT V. BENSON. [CHAP. 6,
he that may refuse the bill totally, may accept it in part. But
As therefore two actions are the fewest he can be charged
with, I would beg leave to instance how he may be charged with a
great many. The acceptor will charge him as far as his undertak-
ing: then another for the honor of the drawer (as is usual amongst
merchants) may undertake for another part, and by the same rea-
son 3. third, and a fourth, and no body can say where it shall stop:
so many different persons may accept for so many different
pence, and every one of these has his distinct remedy against the
drawer.
This is too great an inconvenience to be got over; and it is
such an inconvenience (I mean the multiplicity of suits) as the
common law has always endeavored to meet with. In the case of
Hawkins v. Cardee, Salk., 65, it was held, that the indorsee of part
could have no action, because says Ld. C. J. Holt, the drawer hav-
ing only subjected himself to one action, it cannot be divided so
as to subject him to two. If the grantee of a rent charge levies a
fine of part, the conusee cannot compel an attornment, for that
would be to give two actions against the tenant. So if a feoffment
were made to a man and his heirs with warranty, and he makes a
feoffment to two, the warranty is gone. If two take lands jointly
with warranty, and one makes a feoffment: the warranty is gone to
him, but remains as to his companion, so as he may vouch for a
moiety; and at common law if they had made partition, the war-
ranty was lost. Co. Litt., 187a. And all this goes upon that
ground, that it being res inter alios acta, it shall not turn to the
prejudice of a third person. But this partial acceptance is a matter
transacted between mere strangers; and therefore shall not hurt the
drawer, who was no party to it. No act of theirs, which would be
prejudicial to him, shall bind him. But the subjecting him to sev-
eral actions will be a prejudice; therefore he shall not be subjected
to several actions.
The great benefit arising to the public from these bills is, their
being negotiable and passing about as money; for everybody is
sensible, that without the assistance of these bills our trade could
never be carried on for want of sufficient specie; not to mention
the trouble and danger in returning money, which is avoided by
this expedient. It is this benefit which the public receives from
these bills, that has entitled them to all the favor they have re-
ceived, of which innumerable instances might be given For this
reason it has been held, that the bare drawing or accepting a bill,
Makes a merchant for that purpose. 1 Salk., 125; Show., 125; 2
Vent., 295. Now if what is contended for on the other side should
prevail, the public will be deprived of this great benefit; for no
man will take this bill as so much money in the way of trade, when
he is to resort to one man for one part, and perhaps send out of
the kingdom for the other to a place where he has no correspond-
ent. In the case of Jocelyn v. Laserre, which was in this court,
SEC. 26.] PETIT Z>. BENSON. I93
he to whom the bill is due may refuse such acceptance, and
(Hil., 11 Ann. rot., 214), where the bill was to pay out of my
growing subsistence, it was held, that in this regard, his growing
subsistence might never amount to the sum drawn for, therefore
this was not a bill of exchange within the custom of merchants,
for nobody would take it upon such a contingency. And the cases
of promissory notes since the statute have gone upon the same
reason. Smith v. Bqheme (Mich., 1 Geo. in B. R.), which was
to pay money or surrender a man to prison. And the case of
Appleby v. Biddle (B. R. Hil., 3 Geo.), which was to pay so
much to A. if I do not pay so much to B., and both these were
held not to be within the statute, upon that only reason that they
were not negotiable.
Another inconvenience which naturally occurs upon this occa-
sion is, that the drawee will insist to have the whole bill delivered
up, when he pays but a part only. For according to the authors
who treat of this subject, he can never charge the drawer, when
they come to make up their accounts, with more than he has
vouchers for under the hand of the drawer. In Lex Mercatoria,
274, it is said, that if the bill be lost, the drawee cannot justify
the payment, though he has a letter of advice. And this refutes
all the expedients of indorsing part, or giving a special receipt for
so much, because in neither of those cases will the drawee have
any authority to produce under the hand of the drawer. If the
drawer then refuses to allow what the other has paid, his only
remedy will be to bring his action; and how he will be able to
maintain it upon the custom of merchants, I must confess myself
at a loss to find out, for he will want the necessary evidence to
maintain such an action, which is the bill itself that was drawn
upon him.
If this then will be the case, where he pays the money without
taking up the bill; I must contend that by all the rules of prudence
and justice he may insist to have the whole bill delivered up to
him, when he only pays part of it according to his acceptance.
Supposing him then in possession of the whole bill, I would
consider in what a condition we have left the party to whom it was
made payable. He must be supposed to have advanced a con-
sideration adequate to the whole sum, and consequently is in jus-
tice entitled to his whole money of somebody or other. It will be
said, that he may get what he can of the drawee, and then go
back to the drawer for residue. It is true he may do so, and the
drawer may be a man of so much honor as to pay him every
farthing. But what must he do when he finds he is mistaken in
his man; when the drawer (instead of ordering him the money as
he expected) shall tell him, "No, you have nothing to produce
under my hand, and if you have been so foolish as to deliver up
the bill, you must take it for your pains." I know of no remedy
in this case but what would be worse than the disease, and there-
194 PETIT V. BENSON. [CHAP. 6,
protest it so as to charge the first drawer; and though there be
fore the most prudent thing he can do will be to sit down by the
loss.
And this will be so far from being a trick in the drawer, that
it will be no more than what every prudent man will do. For if
upon the report of what has been done he should advance the
residue of the money, yet still there is a bill standing out against
him for the whole, upon which bill it cannot appear he has paid
the money which the drawee had left unpaid. And whether in that
case he would not afterwards be answerable for the whole, may be
proper to be considered.
I have now done with what I had to offer in maintenance of
the negative of the question I proposed to speak to, and shall
therefore proceed to take notice of what was hinted at upon the
former argument in behalf of the plaintiff in this case.
It was said that the drawee may (and very often does) accept
to pay the money at a different time from what is appointed in the
bill. I must admit he may do so, but surely that case can bear
no proportion to this case. It is not liable to any of the incon-
veniences I mentioned; it is the same as if the bill had at first
given him a longer time, and it is well known that after acceptance
a month or two will break no squares where the man is good; with
this further, that amongst merchants such an acceptance is es-
teemed a general acceptance to pay the money according to the
tenor of the bill. Besides, Molloy says, that in such a case the
bill must be protested, which cannot be done in our case.
It was further urged to be highly reasonable, that the drawee
should honor the bill as far as he had effects. I admit this to be
reasonable, and perhaps it would not have been impossible for the
plaintiff to have declared in such a manner, as to have charged the
defendant to the amount of his acceptance; but we are here upon
the custom of merchants, and whatever might be reasonable in
case of private property, will cease to be so, when it appears to be
pregnant of so many inconveniences to the public as I have men-
tioned. And if the plaintiff has it in his power to frame a case
wherein he may do himself justice, that makes the argument
stronger against suffering him to break in upon the public conven-
ience for his private benefit. The policy of the law is, rather to
let one man suffer, than to introduce a general inconvenience: but
here, we are to be led into the greatest inconveniences, even in a
case where there is no danger of the party's suffering in the least;
for he has a remedy, which stands clear of all these inconvenien-
ces, and there will be no harm in leaving him to that.
It was said, that if the drawer (who is supposed to know what
effects he has in the other's hands) by drawing for more, subjects
himself to several actions, it is his own fault. The answer to this
is, that the very drawing for more, destroys the presumption that
he knew how accounts stood. But amongst merchants, as I ob-
SEC. 26.] PETIT V. BENSON. 195
an acceptance, yet after that he hath the same liberty of
charging the first drawer as he before had.
served before, that is not the case, for they often honor one an-
other's bill, where there are no effects at all.
But even admitting that, the drawer does not stand altogether
clear of this objection, yet still this may be the case of one who
cannot be supposed to know how the accounts stood between the
drawer and the drawee: for it may happen this bill may be in-
dorsed, and then the indorser is to be charged in the same manner
as the drawer. The indorser will be liable to several actions,
though he is in no ways privy to any of the transactions between
the indorsee and the drawee.
Upon breaking the case upon the former argument a difference
was taken between the case of the acceptor and that of any other
person: that he should not come and discharge himself against his
own acceptance, whatever the other might have done as to refusing
this partial acceptance. If this was his case only, it might be rea-
sonable to extend this acceptance as far as it will go; but the hard-
ship is, that what is law in his case, must likewise be law in the
case of the drawer and indorser; so that here are two innocent
persons who are to be involved in the same common fate; and that
is never to be suffered, especially when the drawee may be charged
in another name, which will not aftect the drawer or indorser.
But if this partial acceptance should be thought good within
the custom of merchants: yet the plaintiff can never recover in
this action, in regard to the manner in which he has declared.
The Payee or Holder May Refuse a Partial or Condi-
tional Acceptance. — The payee or holder is entitled to an abso-
lute acceptance of the bill. If the drawee refuses to give such an
acceptance, the holder may protest the bill for non-acceptance and
look to the drawer for payment. Wintermute v. Post, 24 N. J. L.,
420; Gibson v. Smith, 75 Ga., $y, Stevens v. Water Co., 62 Me.,
498; Wallace v. Douglas, 116 N. C, 659; 1 Daniel on Neg. Inst.,
sec. 509; Boehm v. Garcias, 1 Camp., 425; Shaver v. Western
Union Tel. Co., 57 N. Y., 459; Green v. Raymond, 9 Neb., 298.
Antecedent Parties are Discharged by a Qualified or
Conditional Acceptance. — When the payee or holder of a bill
of exchange accepts a qualified or conditional acceptance, he
thereby releases all prior parties unless he can secure their assent
to such an acceptance. Rowe v. Young, 2 B. & B., 165; Walker v.
Atwood, 11 Mod., 190; Russell v. Phillips, 14 Q. B., 900; Ed-
wards on Bills, 429; Story on Bills, 272; Daniel on Neg. Inst.,
5io> 5"-
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.1
In Court of Queen's Bench, 1843.
[Reported in 6 Adolphus 6° Ellis, N. S., 16; 6 Queen* s Bench, 16;
51 Eng., C. Z., /j*.]
The Form of Action. — Assumpsit. The first count stated
that 14one John Hart," on the 8th day of March, 1838,
44 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 100/.," value received, at twelve months
after date, which had elapsed before the commencement, etc. ;
* 4 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.
1 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.] DAVIS V. CLARKE. I97
4 • £100. 4 ' London, 8th March, 1838.
4 4 Twelve months after date pay to me or my order one
hundred pounds, value received,
44 To Mr. John Hart. John Hart."
Across the face of this instrument was written the follow-
ing:
1 4 Accepted.
44 H. J. Clarke.
4 4 payable at 3 1 9 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, Petersdorff
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,1 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 lia-
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,2 applies. The defendant, by his acceptance, estops him-
self from disputing his own character and the nature of the
instrument. In Polhill v. Walter,8 indeed, it was said that no-
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 ai
1 8 Taunt., 739.
2 8 Taunt, 739.
•3 B. & Ad., 114.
12
I98 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.1
The Decision. — There is no authority, either in the En-
glish law or the general law merchant, for holding a party to
be liable 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,2
and Jackson v. Hudson 8 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 4 ' 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, no6 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
1 1 C. M. & R., 439; S. C, 5 Tyrwh., 107; he referred also to
Jackson v. Hudson, 2 Camp., 447.
3 3 B. & Ad., 114.
8 2 Camp., 447.
4 2 Camp., 447.
6 8 Taunt., 739.
SEC. 27.] DAVIS V. CLARKE. I99
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.1
1 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, 1 E. D.
Smith, 1; 1 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, 1
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, 1 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.1
In the King's Bench, Hilary Term, 1822.
[Reported in 5 Barnwell 6* Alderson, 474; 7 Eng, C. L.f 260. ]
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.
^his case is cited in Daniel on Negotiable Instruments, 6$,
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. 201
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,1 although that is only a loose
dictum. But in Molloy2 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,4 this point was expressly ruled by Ld. Ellenborough.
1 P. 83.
3 Book 2, c. 10, s. 28.
8 6 East, 200; Chitty on Bills, 160, S. C.
4 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.1 And it is treated as
the law of France at the present day by Pardessus, a modern
writer.2 In Adams v. Lindsell,8 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
1 1 Camp., 426, n.
2 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. 1,
p. 400. This writer, speaking of the effect of an acceptance, says:
"Elle est irrevocable, et celui qui la don£e ne serait pas libre de la
rayer, meme du conseutement de celui sur la presentation duquel
la lettre auroit 6t£ accept^e, parce que Tacceptation n'oblige pas
simplement l'accepteur envers le porteur; qu'elle forme 6galement
un contrat entre le tireur et l'accepteur. " In the next paragraph,
the same learned writer says: " Cependant comme le bonne foi doit
§tre avant tout consider^, et que la seule crainte de la fraude no
doit pas emp6cher des operations legitimes, le tir6 qui auroit trop
pr£cipitamment accept^, et voudroit revoquer son acceptation
avant que la lettre qui en est revetue circuit, pourroit la rayer et
assurer la date et l'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 Tacceptation non ray6e."
3 2 B. & A., 681.
SEC. 28.] 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,1 Ld. Ellenborough said,
4 • 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, l il peut 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.
1 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 for 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.
Now 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.] 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 contracts 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 la n 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 maybe
said, that the defendants here ought to have shown that this
was done by mistake. How is it possible to do that ? 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.1
1 See Wilde v. Sheridan, 21 L. J. Rep., 260, which Ames in
his valuable work on Bills and Notes cites for a contrary doctrine;
1 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.] JOHNSON ET AL. V. COLLINS. 207
SECTION 29.
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. 1
In King's Bench, Nov. 25TH, 1800.
{Reported in i East> p8.~\
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 25th 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/. 10s.
6d.y 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, applied 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 2 5th 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
1 This case is cited in Wood's Byles on Bills and Notes, 302,
303; Norton on Bills and Notes, 93, 95, 98, 101; 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 (1 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)1 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.
l3 Burr., 1663 (1765).
SEC. 29.] JOHNSON ET AL. V. COLLINS. 209.
But Ld. Mansfield there said,1 "This amounts to the same
thing as an acceptance. / will give the bill due honor is in
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."2 "This agreement to honor the bill was a virt-
ual acceptance of it."8 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);4 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. Mears6 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:.
lIb., 1669.
3 lb., 1673.
*Ib., 1674.
4Dougl., 297 (1779)-
5 1 Atk., 611 (1737).
6 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. Harris1 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 implied 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. Douglas2 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, ]., 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
x3 Term Rep., 174.
2 1 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,1 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;
1 Vide Forth v. Stanton, i Saund. Rep., 210, 211, and n. 2 by
Serjt. Williams.
212 JOHNSON ET AL. V. COLLINS. [CHAP. 6,
and I doubt whether the decision can be sustained on any
other ground. The undertaking there indeed was in writing;
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:1 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.3 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-
1 Vide the opinion of Wilmot, J., delivered in Pillans v. Van.
Mierop, 3 Burr., 1670, 1.
2 7 Term Rep., 350 n. [S. C, 4 Bro. Pari. Ca., 27, TomL
edit.]
'Cowp., 573.
SEC. 29.] 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 (*).
1 Vide Clark v. Cook, 4 East, 57; Wynne et 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, 1 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 (/. 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
214 C00L1DGE ET AL. V. PAYSON ET AL. [CHAP. 6,
SECTION 29a— Continued.
COOLIDGE ET AT. v. PAYSON ET AL.1
In the Supreme Court U. S., Feb., 1817.
[Reported in 2 WhcatorCs Rep., 66; Condensed Reports U. S., vol.
4, P- 33-]
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 & Cary, 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
^his 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. 290.] COOLIDGE ET AL. V. PAYSON ET AL. 215
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, conform-
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, and will 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 otfr 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 isisufficientjfor the pur-
pose for which it was given, provided [the partiesn possess the
means; and of the last signer, I have no hesitation 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. "
2l6 COOLIDGE ET AL. V, PAYSON ET AL. [CHAP. 6,
On the day on which this letter was written, Cornth-
waite & Cary 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
was 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 & Cary, 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 was no legal objection to such recovery that the
promise to accept the present bill was made to the drawers
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 Coolidge &
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 might
SEC. 29a.] 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 &
Cary to Williams, 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),1 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
1 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 with
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.] COOLIDGE ET AL. V. PAYSON ET AL. 219
In the case of Mason v. Hunt (1779)1, 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 Cowper2 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
1 1 Doug., 296 (1779).
'Cowper, 571.
3 1 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 with 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,8 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
l4 East, 57.
SEC. 29a.] COOLIDGE ET AL. V. PAYSON ET AL. 2 2 1
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.1
^ee 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:
1 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;
5 th, the promise must be unconditional; and,
6th, the promise should be in writing. (In some jurisdic-
tions it must be in writing. )
222 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 op King's Bench, Nov. 27TH, 1812.
[Reported in 16 East's Rep., 391.]
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. (181 1), 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, 18 10, upon
Penn and Hanbury of London, in favor of Quevremont
Balleydier & Co. , for 800/. sterling, at 1 30 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-
2 This case is cited in Chitty on Bills, 347, 344, 345 > 349> 35° >
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.] 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: 4< accepted under protest for the honor of the
first indorsers." The bill became due on the 3d of December,
1 810, but was not presented to the drawees, Penn & Hanbury,
for payment; nor was it proved to have been 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 of 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, *. 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,1 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, 4 ' 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, the bill being before then protested for non-
payment, then the merchant to whom the bill was first pay-
1 i Lutw., 896 (1781).
SEC. 30.] 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,"1 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-payment is not equally necessary
1 4 Des Avals.
226 HOAKE 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 (i. e. 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,1
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
1 1 Lutw., 896.
SEC. 30.] HOARE ET AL. V. CAZENOVE ET AL. 2 27
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 Whom 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.1
In the King's Bench, Nov. i6th, 1762.
[Reported in J Burrows, 1354."}
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, in the 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).
1 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 fidey
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 40$. 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-
14
f
230 PRICE V. NEAL. [CHAP. 6,
ler et al.1 (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 inclined,
"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, * * That that bill was 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 plaintiffs use. In which action, the plain-
tiff can not recover the money, unless it be against conscience
1 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-
R. R. Co. v. Neill, 66 111., 269.
SEC. 31.] PRICE V. NEAL. 23 1
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 paid, 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
I
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: 'f 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,
1 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, 1 Hill, 287, 295; Redington v. Woods, 45 Cal., 406,
418; Holt v. Ross, 54 N. Y., 472, 475; Peoria Ry. Co. v. Neill, 16
111., 269, 270; McKleroy 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 Drawet 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, j. *., 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, n How., 177; Braith-
waite v. Gardnier, 8 Q. B., 473; Taylor v. Croker, 4 Esp., 189;
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.1
In the Court of Appeals of New York, April, 1850.
[Reported in 3 Comstock, 230; 3 N. K, 230.]
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 * 4 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
1 This case is also cited in Daniel on Negotiable Instruments,
533> 349a> 54o, i36l> I362> J384, 1654a, 165 1, 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 0. 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
$Ii035-38, which the Superior Court refused to set aside, and
after judgment the defendants appealed to this court.
The Claim of Appellants. — The appellants claimed: —
ist. 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.1 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.2
1 Hall v. 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.] 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.1
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.2 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.8
The Claim of Respondents. — The respondents claimed:
1 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.
2 Cases before cited, and Bank of Gloucester v. Salem Bank,
17 Mass., 33.
1 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.1
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.8
3rd. The party paying has a right to recover his money
as well where the forgery is that of the indorsees 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.4
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
1 Chit, on Cont ., 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, 1 Wend., 355;
Burr v. Veeder, 3 id. 412; Waite v. Leggett, 8 Co wen, 195; Union
Bank v. U. S, Branch Bank, 3 Mass., 74; Garland v. Salem Bank,
9 id. 389; Lazell v. Miller, 15 id., 207.
2 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, 16 Louis
Rep., 457-
'Fuller v. Smith, 1 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, 1 Term. Rep., 654; Dick et al. v. Leverich, 11 Louis.
Rep., 573; Canal Bank v. Bank of Albany, 1 Hill, 287; Talbot v.
Bank of Rochester, 1 id. 295; Coggill v. Am. Ex. Bank, I
Comst., 11.
SEC. 32.] BANK OF COMMERCE V. UNION BANK. 237
genuineness in every respect, save the signature of the
drawer.1
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.2 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, #ho is usually his cus-
tomer or correspondent. As 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. Lutwidgej* Ld. C. J. Pratt was of opin-
ion that 44 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.
2Pricev. Neal, 3 Bur., 1354.
8 1 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 handwritings or in any hand-
writing 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, amount 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
1 Story on Bills, § 262.
SEC. 32.] 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,2 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 liable 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 plaintiffs 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
1 Canal Bank v. The Bank of Albany, i Hill, 287, 292, 3.
8 6 Taunt, 76 (1814).
•9 Barn. & Cres., 902 (1827).
4 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.1
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.
^his 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.] MEAD V. YOUNG. 24I
The Form of Action.— This was an action brought by
the indorsee of a bill of exchange for go/, 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, if 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 ?
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 for him ; and the circumstance of his bearing the
same name with the payee would be no defence to him on a
SEC. 33.] MEAD Z>. 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,1 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
1 1 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."
Buller, 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?
Now the act of that person who indorsed, and who in so
SEC. 33.] 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 would 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
15
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 instrument \ indorsement, etc., with intent to defrauds
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 Buller,
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. 1.
SEC. 33.] MEAD V. YOUNG. 247
acceptor, to inquire whether the person under whom the
plaintiff claims, was or was not the payee."1
Rule absolute.
1 See the following cases for a further discussion of this general
proposition: Robarts v. Tucker, 16 Q. B. (Ex. Ch. ), 560; Law-
rence v. Russell, 77 Pa. St., 4.60; 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, 1 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;— -first, 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 indorsement; 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 lo 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
SEC. 36.] 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 tcodden 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,
1 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,
43i-
r*< 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; Faris 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. 25 1
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.f 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 maybe Inter-
posed Against the Assignee." — What we mean by the phrase
1 • equities which may be 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, 4tis
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., 61 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, 1 Vesey Jr., 247; Durton v.
Benson, 1 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, 1 Ves.
354 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. Magloughlin, 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 4 • 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 ij Indiana, jp. ]
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-
1 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. 1) 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 (1) 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.
Gatland, 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 indorsees
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, 1 la., 263;
"I 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., 951; Markey
v. Carey, 108 Mich., 184; 66 N. W. Rep., 493; "For value re-
SEC. 42.] 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, 575.
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, 101 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 prima facie 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, 1 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.] FRENCH V. TURNER. 259.
of the notes. That he is still wholly and notoriously insol-
vent, having no property subject to execution, and that a»
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:
(1) 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., in 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.
260 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, 41 111., 409; Mc-
Dowell v. Goldsmith, 6 Md., 319; Rogers v. Wiley, 14 111., 65;
Ranger v. Cary, 1 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. Wood worth 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.] 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 i4 thereon " (1 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, 40 111., 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, 56 111., 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 may be
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.2
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
1 Story on Bills, § 204. See also Rex v. Bigg, 1 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,
68 111., 25.
2 Story on Bills, § 200.
SEC. 42.] FRENCH V. TURNER. 263
the case, still he is not liable on the contract of assignment.
The plaintiff 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.1
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
41 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,3 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.*
1 Story on Prom. Notes, §§ 117, 118 and notes.
8 8 Ind., 79.
8 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; 1 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 48.
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.1
In the Supreme Court of Massachusetts, October, 1844.
[Reported in 8 Met calf, 504.]
The Form of Action. — Assumpsit by the indorsees
against the indorser of a promissory note of the following
tenor:
"August 8 th, 184.3.
"For value received, I promise Tilley Willis, to pay to
him, or order, $350, in four months from date,
T. D. Thompson."
On the back was the name of lt 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 Mirick & 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-
lrrhis case is cited in Daniel on Negotiable Instruments, 455,
594, 713, 713a, 999a, 1757; Benjamin's Chalmers 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.] 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
266 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."1
Mr. Dane, who cites it in his Abridgment,2 remarks, that
1 1 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.8
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, who 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.
aVol. I, 416, 417.
8See 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, 4 ' 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,1 which
was assumpsit on a note given by Chaplin to Bennet, under
which the defendant wrote,
4 ' / 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.2
Immediately after, occurred the case of Carver v. War-
ren.8 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
1 5 Mass., 358.
2 6 Mass., 519.
8 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, 4t I promise to pay F. M. Stone or order," and was
signed B. Chad wick; 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.2
The next case was White v. Howland,8 which was on a
note payable by one Taber to the plaintiff, and on the back
of it was written,
•• For value recewed, we jointly and severally undertake
to pay the money, within mentioned, to the said William
White.
L Coggeshall, Jr.
J no. 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,4 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."
1 7 Mass., 58.
'Peaks's Cas., 130; see also Bayley on Bills (2d Amer. ed.), 44.
*9 Mass., 314.
4 11 Mass., 436.
SEC. 43.] UNION BANK V. WILLIS. 269
In the case of Baker v. Briggs,1 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. Jones3 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. Thornton4 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.
1 8 Pick., 130.
2 19 Pick., 260.
8 24 Pick., 64.
*3 Met., 275.
2 7° UNION BANK V. WILLIS. [CHAP. 8,
The case of Richardson v. Lincoln l 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.2
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.3 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
bofia 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.
8 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,
2 72 UNION BANK V. WILLIS. [CHAP. Sy
acting in such capacity, being not only capable of performing
what the whole can do, and of receiving that which belongs ta
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 ta
such a limited joint liability, there being neither a community
of interests, nor joint participation of profit and loss, the i'act
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.1 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
1 Shepard v. Hawley, i Conn., 367.
SEC. 43.] 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.2
To apply the law to the tacts as proved in the case before
us: Thompson and Mirick & Co. stand in the relation of joint
*5 Hill, 234.
2 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.
When 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.
2 74 UNION BANK V. WILLIS. [CHAP. Sr
and several promisors. Payment of the note was demanded
of Thompson, but not of Mirick & Co. The defendant is an.
indorser, liable 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, 1 Glyn. & 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, 1
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., 1 1 05); 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.
Allerton, 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, 11 1 Mo., 291; O wings 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.*
In the Supreme Court, New York, May, 1844.
[Reported in 6 Hill, 443, 41 Am. Dec, 755.]
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, •• 1. 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; 1 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, 1 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. Woodhull, 29 111., 92; Yarborough v.
Bank of England, t6 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.] 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., 59; Cusley v.
Roub, 1 6 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, 39 111., 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: —
"1, 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, 1 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;"
17
278 B ROM AGE ET AL. V. LLOYD ET AL. [CHAP. 8,
Decision. — It has been expressly decided that an indorse-
ment written in pencil is sufficient;1 and also that it may be
made by a mark.1 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.8
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.4
Judgment affirmed.
SECTION 45.
AN INDORSEMENT IS NOT COMPLETE UNTIL A DELIVERY
OF THE CONTRACT UPON WHICH IT IS MADE.
BROMAGE ET AL. v. LLOYD ET AL.8
In the Court of Exchequer, May, 1847.
[Reported in I Exchequer Rep., J2.~\
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 theindorser. It has been
held that the indorsement need not be on the back of the instru-
ment. Rex v. Bigg, 1 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; Arnot v. Symonds, 85 Pa. St., 99.
'Geary v. Physic, 5 Barn. & Cress., 234.
'George v. Surrey, 1 Mood. & Malk., 516.
'Baker v. Dening, 8 Adol. & Ellis, 94; and see Harrison v.
Harrison, 8 Ves., 186; Addy v. Grix, id., 504.
4See Rogers v. Coit, (ante. p. 322, 323).
5 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., 116; Mars-
ton v. Allen, 8 Mees. & W., 494; Spencer v. Carstarphen, 15 Colo.,
445 (1890); 24 Pac. Rep., 882; Laird v. Davidson, 124 Ind., 412;
Cooper v. Nock, 27 III., 301.
SEC. 45.] 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, (1) 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.1
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,2 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.
1 Marston v. Allen, 8 M. & W., 494.
2 5 Price, 442.
280 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,1 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.2 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.8 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 form&,
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.
aChilds v. Monins, 2 Brod. & Bing., 460; E. C. L. R., 6.
"Hammond v. Colls, 1 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.1 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.2 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
1Watkins v. Maule, 2 Jac. & W., 237.
2 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.*
In the Supreme Court of Vermont, Mar., 1892.
[Reported in 64 Vermont, iji; 24 At I. Rep., 136. ]
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, 1 M. & W. 65; Marston v. Allen,
8 Id., 494; Belcher v. Campbell, 8 Q. B., 1. 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.
1 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; Ken worthy v. Sawyer, 125 Mass., 28; Sinker
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., 1; Erwin v. Downs, 15 N.
Y., 575; 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, 353-356, 442, 443; Sto. Pr. Notes, s 135;
2 Aik., 264; Whitney v. Dean, 22 Vt, 561.
SEC. 46. ] 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
1, 1886, are for $1,000 each, and payable 16, 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, — 1st, 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.1
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.2 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.8 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
part of the debt until the ?wte 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.5 It was
said, by the court in Talliaferro's Ex'rs. v. Kings Admr,6
1 Randolph Com. Paper, s. 739.
2 Grafton Bank v. Doe et al., 19 Vt., 463.
8 National Bank of North America v. Kirby, 108 Mass., 497.
* Catlin v. Lyman, 16 Vt, 44.
5 1 Aik., 410; Austin v. Imus, 23 Vt., 286.
6 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,1 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 maker to pay interest.1
'■■■■■ ' 111 ■■■■■— _- ^ ^— M ■■ ■ 1 ■ — . ■■ — ■*■ ■'
1 19 Me., 31.
2 First National Bank v. County Commissioners, 14 Minn.,
77 (100 Am. Dec, 196, 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-
dorsee 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,1 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.9 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 makers default was necessary to charge the
indorser with it. In that case the indorser was released trom
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.
1 1 Camp., 50.
*Sedg. on Dam., 383; Selleck v. French, 1 Conn., 32, (6 Am.
Dec, 189, note.)
'Reported in Canada Law Jour., Vol. 20, No. 19.
288 HOTEL CO. V. BAILEY. [CHAP. 8,
The case of Codman v. The Vt. and Can. Railroad Co.,1
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:
41 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.2 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.
li6 Blatch., 165.
2 Amy v. Dubuque, 98 U. S., 470.
SEC. 46.] 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 liability 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 liability 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. l 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.2
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 indorsees 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
1 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.
a 19 Vt., 463.
SEC. 46.] HOTEL CO. V. BAILEY. 29 1
entire note, and that the liability 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 indorsees
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
indorsees 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 in 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 indorsees liability in regard
392 HOTEL CO. V. BAILEY. [CHAP. 8,
to that interest is dependent upon the indorsees liability for
the maker's promise to pay the principal, which is still condi-
tional, and for that reason the indorsees 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 indorsees liability to
pay that year's interest, and may enforce its payment by suit,
while the indorsees 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 indorsees 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.1 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.2 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 for 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
lAmy v. Dubuque, 98 U. S., 470 (25 L. C. P. Co., 228.)
2 19 Vt, 463.
SEC. 46.] 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 likewise 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
(b). 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. Hay ward, 4 Term., 470
(1791); Penny v. Innes, 1 C. M. & R.. 439; 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, 85 111., 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 Upon 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. 1 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. 1 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 Indorsees 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, t; 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, 1
Idaho, 229; Ballingalls v. Gloster, 3 East, 481; Story on Bills,
224, 255; Wood's Byles, 255.
SEC. 47.] 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.*
In the Court of King's Bench, 1794.
[Reported in 1 Espinasse> 181 ; Peake, 22j.]
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
1 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, 73 111.,
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 (1) 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 is prima facie evidence of ownership. Palmer v. Nassau
Bank, 78 111., 380; Morris v. Preston, 93 111., 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 "PaytoB"; 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.,
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.] 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 III., 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-
2gS 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; iEtna Ins. Co. v. Alton City Bk., 25 111., 243; Dan. on
Negot. Inst., Sec. 698; Johnson v. Donnell, 90 N. Y., 1; White
v. Miner's Nat. Bk., 102 U. S., 658; Hook v. Pratt, 78 N. Y.,
371; Leavitt v. Putman, 3 Corns., 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., 45; 1 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. Finnie, 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.] SMITH t>. 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. Lamed, 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 negotiability; 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, 1 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 <i 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, against a bona fide holder
for value without notice. Clark v. Thayer, 105 Mass., 216; 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 Cushing, 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 England1 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. Mc Knight v. Wheeler, 6 Hill,
492; Maine Trust Co. v. Butler, 45, Minn., 506; Ankeny v. Henry,
1 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.
1 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,1
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. 8
The plaintiff had a verdict.
"Vide Moor v. Manning, Com., 311; Acheson v. Fountain,
1 Stra., 557; Morris v. Foreman, 1 Dal., 193.
'Chaters v. Bell et 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
4 i 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 v. FULLER.*
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: —
iK$799-oi. "New York, April jot A, 184.6.
1 1 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. "
4 * To Messrs. Mitchell & Wynkoop.
1 1 (Accepted by) Mitchell & Wynkoop. "
1 ' (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; 1 Daniel Neg. Inst, § 693; Greneaux v. Wheeler, 6 Tex.,
522; Weathered v. Smith, 9 Tex., 625; Whithed v. Mc Adams, 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., 63653 Johns Cas., 263. So " a note payable to
the maker's order becomes, in legal effect, when indorsed in blank,
1 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
4 * $744. 77. 4 4 New York, April 30th, 184.6.
4 • 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."
1 * To Messrs. Mitchell & Wynkoop.
4 4 (Accepted by) Mitchell & Wynkoop. "
44 (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:
4 4 Pay to J. B. Trevor, Esq. , cask, 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 (5th ed. ), 109, cited by Pollock in 2 Exch. infra.;
Chit. Bills, 228, 230a; 3 Kent, Comm., side p. 90; Story, Prom.
Notes, § 139; 2 Pars. Notes and Bills, 19, 26; Walker v. McDon-
ald, 2 Exch., 531, citing Smith v. Clarke, 1 Peake, 295, and 1
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,
1 Denio, 367; Savannah Nat. Bank v. Haskins, 10 1 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; 1 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.
41 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.1 That there would be no use in a special indorse-
ment if any holder could maintain the action without showing
title in himself.2 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.4
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
l2 Dal., 144; 1 Yeates, 94; 12 Ser. & R., 43.
2 7 Cranch, 159.
2 1 Peter's C. C. Rep., 171.
4 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.1 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.8
In Smith v. Clarke,8 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
^his is ruled in Gorgerat v. McCarty, 2 Dal., 144; 1 Yeates,
94; Zeigler v. Geary, 12 Ser. & R., 43; 7 Cranch, 159; and in
Craig v. Brown, 1 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.
308 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 bona 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.1
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.8
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,
Baylor v. Binney, 7 Mass., 481; Mullen v. French, 9 Watts,
96.
*Little 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.1
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, n Johns. R., 52; n Ser. & R., 179,
Sterling v. Marietta Co.; Curtis v. Sprague, 51 Cal., 239; Middle-
ton v. Griffith, 57 N. J. L., 442; Berney v, Steiner Bros., 108
Ala., in.
19
CHAPTER IX.
Warranties 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 Brown9 s Chancery Cases, 2j£.]
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
JThis 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, 1 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; Turnbull 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 indorsees 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 may be 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. Indorsing a com-
mercial contract after maturity is equivalent to making a new con-
tract payable on demand. 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 commereial 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.] EX. PARTE CLARKE. 313
make of the bill, but he, by his indorsement, is certainly
liable to the indorsee.1
Gay, 146 Mass., 118; 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;
13 N. E. R., 75; Leavitt v. Putman, 3 N. Y., 494.
1 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, 1 Salk., 127; Lambert v. Oakes, S. C, 1 Ld.
Raym., 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: (x) 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 v. WILLIAMSON.1
In thb Supreme Court op Ohio, Dec, 1869.
[Reported in 18 Ohio St., 515; 5 Am. Law Reg, {N. S. ), 330 ; 98
Am. Dec, 186.]
The original action in this case was brought by the
plaintiff in error, who states in his petition 4 * 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
1 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 EH. & 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 number 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 delivered 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, 4 * without recourse, " the vendor impliedly war-
rants that the signatures of the prior parties whose names ap-
pear thereon are genuine.
316 DUMONT V. WILLIAMSON. [CHAP. IO,
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,1 speaking of the liabilities of a party who transfers a
note by delivery only, says: "In 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,2 Ellis v. Wild,8 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.
2 29 Maine R., 434.
*6 Mass. R., 321.
SEC. 50.] 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,1
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. 44 But,"
adds the learned author, ' 4 this distinction does not seem to
be well founded." And again, at page 589 of the same vol-
ume, the principle is broadly stated 44 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: 44The party assuming to transfer a negotiable
instrument thereby asserts it to be genuine, and is bound to
make his assertion good." And on page 289: 44 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.2
In England, it seems to be well settled, by the latest
decisions on the subject, that the vendor of a bill of exchange
lVol. 2, pages 37, 39.
2 Shaver v. Ehle, 16 Johns. R., 201, and 20 N. Y. R., 226.
318 DUMONT V. WILLIAMSON. [CHAP. 10,
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,2 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,3 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,4
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.6 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. L. 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.
4 6 Mass., 321.
6 Cabot Bank v. Morton, 4 Gray, 156; Lobdell v. Baker, 1
Met, 193; Merriam v. Wolcott, 3 Allen, 258.
•5 R. I., 218.
SEC. 50.] DUMONT V. WILLIAMSON. 319
that * 4 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,1 and in
Thrall v. Newell.2
And the principle upon which these decisions rest has its
foundation, as we think, in reason and justice.
1 26 Conn., 23.
2 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
•conditional 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. (H annum
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: 1st, 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, 5 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, 5 R. I., 218; Lobdell v. Baker, 3 Mete, 469; 1 Addison on
Cont., p. 152; Ellis v. Wild, 6 Mass., 321; Eagle Bank v. Smith,
5 Conn., 71; Shaver v. Ehle, 16 Johns., 201; Dumont v. William-
son, 1 8 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. 10,
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.] DUMONT V. WILLIAMSON. 32 1
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
322 DUMONT V. WILLIAMSON. [CHAP. IO,
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, Blethenv. Lovering, 58 Me., 437; Ogden v.
Blydenburgh, 1 Hilton, 182; Fake v. Smith, 2 Abb. (N. Y.), App.,
76; 2 Parsons on Notes and Bills, ch. 2, § 2, and cases in notes;
Terry v. Bissell, 26 Conn., 23; 1 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, ( 1 ) 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, 81 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 "Without 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, 24 Eng. 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: (x) THAT HE IS A
LAWFUL HOLDER OF THE CONTRACT; (a) 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, 156; 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
^his 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 Rogersy
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 815/.
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, l 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.51 Here the plaintiff had the bill
1 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: il 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.]
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. Speller2 is
much in point to show that the plaintiff cannot recover this
money back; this is like the case of Baglehole v. Walters,8
and Pickering v. Dowson.4 There was no representation
whatever made at the sale of the bill, which distinguishes this
case from Bridge v. Wain.6 At most, it was but a sale of
what purported to be a foreign bill. Wilson v. Vysar.8
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. Saunders7 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.
ai4 Q. B. Rep., 621.
8 3 Camp., 154.
*4 Taunt., 779.
6 1 Stark, 504.
6 4 Taunt., 288.
74 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,1 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,2 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. Ryde8 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 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
]3 Bing., (N. C), 724.
2Vol. 1, p. 152.
8 5 Taunt, 488.
SEC. SI.] 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. Ryde1 and Young v. Cole2 are authorities in support
J5 Taunt., 488.
33Bing. (N. C), 724.
Warranties 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, 1 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. 51.] 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 common 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 were 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 upQn the fourth,
for the reason that the maker has the entire day in which to pay
the same; therefore 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;
33° GOMPERTZ V. BARTLETT. [CHAP. It,
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. Siberl, 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. 51.] 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, 1 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.
Indorsees 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 t) 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, 1 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, 45 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 transfe* of a commercial contract by opera-
tion of law will occur in the following cases:
t. 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;
2. 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, 1 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, 33 Tex., 282.
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. 51.] 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 What 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. Haxton, 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. 17 111., 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., 1; 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, 47 7 \
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
loci governs also in its interpretation, nature and effect. Evaus v.
Anderson, 78 111., 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. Leroux v. Brown, 12 C. B.,
801; 74 E. C. L. R., 801; The Freeman's Bank v. Ruckman, 16
Gratt., 126.
The Laws of What 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, 1 Ryan & Moody, 184; E. C. L. R., 412; Dessau v.
Humphreys, 20 Martin, 1; Andrews v. Pond, 13 Peters, 65; Ekins
v. The East India Co., 1 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,
101 7; Fanning v. Cousequa, 17 Johns., 511; Scofield v. Day, 20
Johns., 102.
SEC. 51.] GOMPERTZ V. BARTLETT. 335
professed to be, and the vendor professed to sell, the rule of
caveat emptor applies. Young v. Cole ! and Jones v. Ryde 2
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.
2 5 Taunt, 488; 1 Marsh., 157.
CHAPTER XII.
Protest.
SECTION 52.
THE "CERTIFICATE OF PROTEST" SHOULD SHOWC(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.*
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: —
11 Vicksburg, 17th December \ 1836.
1 ' Exchange for $6, 133 M,.
1 • Twelve months after first day of February \ 1837, of
this first of exchange {second of the same tenor and date un-
paid), pay to the order of R. If. & J. H. Crump six thou-
^his 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;
Bige low'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,.
*9> 37, 47-
SEC. 52.] MUSSON V. LAKE. 337
sand, one hundred and thirty-three dollars, value received,
and charge the same to account of
Steele, Jenkins & Co."
1 * To Kirkman, Rosser & Co. ,
New Orleans."
"Indorsed: R. H. & J. H. Crump,
W. A. Lake."
44 Kirkman, Rosser & Co., New Orleaus, 3d February,
1838, — 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.] 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 either 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. ]
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. We concur in opinion, that he must have the note
or bill with him, and should present it for ^payment, etc.;
and the only difference which 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
verboy 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.1
The court there, after affirming the necessity of having the
note or bill present when the demand is made, says: —
41 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.
1 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 believed 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-
SEC. 52.] MUSSON V. LAKE. 341
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 (like 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 (not 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,1 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 decision of Allain v. Whittaker, et al.,a
which declares that * ' the uniform practice in this state has
12 Mar., N. S., 511.
a5 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,1 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,2 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 4 • 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.
1 io Louisiana, 208.
2 1 \ Louisiana, 363.
2 13 Louisiana, 363.
3 12 Louisiana, 472.
SEC. 52.] MUSSON V. LAKE. 343
The case referred to is that of Nott's Executor v. Beard.1
The protest passed upon was from the identical notarial office
which made the one in the case at bar. It is couched in the
like 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 simply that the notary demanded payment of the bill,
without 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.
1 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,1 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,8 and
other authorities.8
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.4 And
being conditions precedent, the proof must be clear and ex-
plicit to charge him.5 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
1 7 Barn. & Cressw., 90; 14 Eng. Com. Law Rep., 20.
8 7 Mass. Rep., 483.
8 Vide Chitty on Bills, edit, of 1836, 385, et seq.\ 12 Louisiana,
473-
4 Chitty on Bills, edit, of 1836, 385.
5 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 jyediqledLupon 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,1
•4 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. " a
To make the protest evidence of presentment and dis-
honor, it must then show on its face the solemn declaration
Shitty on Bills, edit, of 1836, 489, et seq.
2 10 Mass. R., 1; 12 Pick., 484; 4 Har. & Johns., 54, 61; 4
Wash. C. C. R., 468.
34$ 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.1 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 1st, 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.2
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,8 the protest must show that the bill itself was pre-
sented, etc.
Shitty on Bills, edit, of 1836, 492.
aChitty on Bills, edit. 1836, 497.
8 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,1 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
they, 4iIt 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 'presentment1 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-
1i6 Louisiana R., 308.
34^ 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 like 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.] 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 4<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,
35° 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.1 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.1
Why Must a Presentment be Made. — The reasons why
presentments should be made to the drawee are:
1 Story on Bills, § 325.
9 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.] MUSSON V. LAKE. 35 1
i st. 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.1
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."3 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.8 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.
1 Story on Bills, § 361; Hansard v. Robinson, 7 Barn. &
Cressw., 90.
2 Story on Bills, 302, note.
8 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.
352 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,1
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 convertable 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 demand of
payment should be preferred to presentment for payment,
they refer to the statute of Louisiana, passed in 1827, in
which they say the word demand is used in it, and that the
word presentment 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
1 1 6 Louisiana, 308.
SEC. 52.] 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 manner
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 billy 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.
35 ^ 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 perform 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.1
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
1 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; 1 Cowen, 107; 5 C ranch, 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.] 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.8 This is an analogy of the
rule about notice,* In all cases where it is possible for the
1 Freeman v. Boynton, 7 Mass. R., 483; 17 Mass. R., 449; 3,
Metcalf, 495.
2 8 Wheat., 333; Burke v. McKay, 2 Howard, 71.
'United States v. J. Barker, 1 Paine'sC. C. R., 156.
*i Peters, 583.
22
35 8 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,2 says, — li In making a protest, three things
are to be done, — the noting,8 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
word presentment by Bailey.4
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, • l whereof a true
copy is on the reverse hereof written, " and also 4 * demanded
1 3 Comm., 107.
2 Art. 11, § 1.
8 The "noting 'Ms 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.] MUSSON V. LAKE. 359
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 probability, 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."1
But, omitting to state a demand or notice is bad after
verdict.2
Dane, in his Abridgment,8 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."6
But it has again and again been held, that the notice
need not state a presentment in express terms, and that it will
li Dane's Abr., Bills of Exchange, ch. 20, art. 11, § 9; Lill.
Ent., 55; 3 Johns. R., 202; Solomons v. Staveley, Doug., 684, in
note to Rushton v. Aspinall.
2 Doug., 684.
8 Vol. 1, p. 395, ch. 20, art. 10, § 1.
*Shed v. Brett, 1 Pick., 401; Miller v. Bank of United States,
11 Wheat., 4313 Gilbert v. Dennis, 3 Mete, 495; 2 Johns. Ch. R.,
337; 12 Mass. R., 6; 4 Wash. C. C. Rep., 464.
5Chitty on Bills (9th Lond. & 10th Amer. edit.), 469.
SEC. 52.] 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.2
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.4
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,1 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.5
The Purpose of a Protest.— A nd then it doubtless orig-
inated in 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., 1; 4 Mason,
336; 1 Johns. Cas., 107.
'See various other illustrations, 6 Adolph. & Ellis, 499; 5
Dowl., 771; 2 Chit. R., 364; 2 Mees. & Welsb., 109.
' 1 Chit. (2d Eng. & 1st 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; 9 Peters, 33.
6Chitty 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; 1 Cranch, 205.
362 MUSSON V. LAKE. [CHAP. 12,
ment and demand, and is usually inadmissible, except by
special statutes.1
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/
1 1 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.
2 Chitty on Bills, 303; Story on Bills, §276.
SEC. 52.] MUSSON V. LAKE. 363
In Nicholls v. Webb,1 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.2
In Vandewall v. Tyrrell,8 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.4
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.8 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.7
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.8 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.
8Mood. & Malk , 87.
*See Chitty on Bills, 495, note.
6Chitty on Bills, 643-647.
6 1 Chit, 633; Doug., 65 4, 680.
1 1 Chitty, 395, 396 (1st Amer. edit); Story on Bills of Ex-
change, § 276, note.
8Welsh v. Barrett, 15 Mass. R., 380.
364 MUSSON V. LAKE. [CHAP. 12,
inferential evidence that he had the note with him.1 And it
is not a little remarkable, that the only statute in England,9
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.8 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.4 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.6 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 " demand" when
describing what the protest shall contain, and such a protest
^ee, also, North Bank v. Abbott, 13 Pick., 469.
*9 and 10 Will., 3.
8Chitty 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; 1 Maul. & Selw., 20.
5 1 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.1
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.2
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.8
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
v 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
lNott's Executor v. Beard, 16 Louisiana R., 308.
2 Story on Bills of Exchange, § 1763 1 Chitty on Bills, 193,
506; Story's Conflict of Laws, § 369.
•See cases, Story on Bills, § 172.
*Townsley v. Sumrall, 2 Peters, 179, 586, 688; Lonsdale v.
Brown, 4 Wash. C. C. R., 87, 153; 1 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,1 the principle laid
down by Ld. Ellenborough, in Pritt v. Fairclough,2 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,
lS Wheat, 332.
2 3 Camp. R., 305.
3 1 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 tnercatoria, 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 grit 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, 1 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, 1 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 Whom 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 j
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:
i. 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 Neg. 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, )
r 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 [at 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 10 15 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.
s : JOSEPH H. VANCE,
" \ Notary Public in and for Washtenaw Co., Michigan.
SEC. 52.] 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, 171.
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.
HEYLYN v. ADAMSON.1
In the Court of King's Bench, Nov. 2oth, 1758.
[Reported in 2 Burrows, 66p. ]
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 1 3th 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 the 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
^his 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-] HEYLYN V. ADAMSON. 37 1
non-payment; and soon afterwards brought their action
thereon, against the defendant; but it did not appear, on the
trials that the drawer of the bill had any notice of such non-
payment; or that any demand of the money was ever made on
him before the commencement of the suit.
It was thereupon objected by the defendant's counsel,
4 * 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 ioo/. 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. 13,
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 & 10 W., 3c, 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. 53.] 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. 1 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 diligence 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, * 4 of giving notice to the person from whom
the bill was received."
The Reply of the Plaintiff. — Mr, Serjeant's case, whereini
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.2
1 Cases in B. R. Temp. W., 3, 244, Lambert v. Oakes, at
Guildhall; and 1 Ld. Raym., 443; Lambert v. Oakes, S. C, is
directly in point. 1 Salk., 126 pi. 6 Anon, accordingly. Syder-
bottom v. Smith, 1 Strange, 649, M. 12 G. 1, 2 Strange, 1087.
2 See New Abridgement, vol. 3, title, Merchant and Merchan-
dise, p. 608, note b. (which is undoubtedly the same case cited by
the Sergeant).
28
374 HEYLYN V. ADAMSON. [CHAP. 13,
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. Hardwicke1
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- 53-] 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
the 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,
1 4 that they had not shown a demand upon the drawer, in
1 1 Strange, 441, Tr. 7 G. 1 B. R.
376 HEYLYN V. ADAMSON. [CHAP. 13,
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-
livered 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 for 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.] 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 the 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 Com-
mon Pleas, upon great consideration, in Pasch., 4 G., 2; as
cited by my Ld. Ch. J. Lee in the case of Collins v. Butler.1
l2 Strange, 1087, 11 G., 2.
37^ HEYLYN V. ADAMSON. [CHAP. 13,
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., 10G., 2 (according to
my brother Denison's statement of what his Lordship said),
put promissory notes and inland bills of exchange just upon
the same footing:1 and the statute expressly refers to inland
bills of exchange.8
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 1 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-
lMy 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."
2 V, 3, 4 Ann., c. 9.
*i Ld. Raymond, 1 Salk. and 12 Mod.
SEC. 53.] HEYLYN V. ADAMSON. 379
son upon whom it is drawn does not pay it." Again,1 "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,2 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
1 In p. 444.
2 1 Salk., 127 (there called Lambert v. Pack), p. 9.
"The report in 1 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 — When 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. 13,
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
marker 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:
Where the drawee is dead;
When he has absconded;
3. Where he is a fictitious person;
4. Where he has no capacity to contract;
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, 1 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, 1 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,
11 L. J. Ex., 168; Lucas v. Ladew, 28 Mo., 342; Pilkinton v.
Woods, 10 Ind., 432.
Effect 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.] 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: (1) of drawers; (2) of indorsers; (3) of acceptors for
honor. Lambert v. Oakes, 1 Ld. Ray., 443; Heylyn v. Adamson,
2 Burrows, 669; Harry v. Perrit, 1 Salk., 134; Darrach v. Sav-
age, 1 Shaw, 155; 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. Golf, 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, 1 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. 13,
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, 33 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.
(3) 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.
(*■) 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:
i. 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, 1 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 was, That the postea be delivered
to the plaintiff.
v. Phoenix Bank, 2 Hill, 425; Brush v. Barrett, 82 N. Y., 400;
Cady v. Bradshaw, 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, 1 R. I., 401;
Smith v. Mullett, 2 Camp., 208; Bray v. Hadwen, 5 M. & S., 68;
Tunno v. Lague, 2 Johnson Cas., 1; Woods v. Wilder, 43 N. Y.,
164; Morgan v. Bank of Louisville, 4 Bush. (Ky. ), 82; White v.
Stoddard, n 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.1
In the Court of King's Bench, July, 1791.
[Reported in 4 Term Rep. , 320; 2 H. Bla.y 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/. 10s. 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,
3°5> 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.] 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/. 10s. "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* 23rd, P74l- 10s.
'Manchester, March 20, 1788.
4 Three months after date pay to the order of Messrs.
Wilkinson & Cooke 97 4L 10s. received, as advised.
'Peel, Yates & Co.
1 To Mr. Cha. Miller.
'23rd June, 1788.'"
That Peel & Co: delivered 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. 1 4,
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 bill's: 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,1 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 11 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 l 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 10 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.2 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-
1 3 Term. Rep., 151.
9 13 Vin. Abr. tit. Faits, 37, 38; Bro. Abr. Faits, pi. 11, refer-
ring to 44 Ed., 3, 42.
388 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
was held to avoid it.1
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.2 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 1 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
1 2 Rol. Abr., 29, letter U, pi. 5.
2 2 Rol. Abr., 29, pi. 6.
8 11 Co., 27.
*Cro. EL, 120.
SEC. 54.] MASTER V. MILLER. 389
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. Gibson1 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. Whereas
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,2 where a bank note had been stolen,,
and afterwards passed bona fide to the plaintiff, it was held
x3 Term. R., 481; in B. R., and 1 H. Bl., 569 in Dom. Proc.
2 1 Burr., 452.
24
39° MASTER V. MILLER. [CHAP. 1 4,
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,1 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. Langstaffe8 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;4 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.
23 Burr., 1354.
8Dougl., 514.
*E., 33 Car., 2, in B. R.; 2 Moll, c. 10, s. 28.
SEC. 54.] MASTER V. MILLER. 39 1
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,1 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;2 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. 14,
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 sui 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
1 11 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. 14,
upon which ground the case of Tatlock v. Harris1 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.
1 3 Term R., 174.
SEC. 54.] 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 punishment 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. 14,
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,1 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
l2 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, tnere 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 ? 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. 1 4,
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-
turn, 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. Now 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:
— (1) 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 (1) 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.] 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 1,000/. : 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 ioo/. 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;
(6) release; (c) accord and satisfaction; (</) failure of considera-
tion; (e) fraud; (/) duress; (g) 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, 181; Gardner v.
Walsh, 5 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 instrument'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 le&s
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 a9 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. 401
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
like 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 there 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 opinion 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.1
^his judgment was afterwards affirmed in the Exchequer-
Chamber. 5 Term Rep., 367.
7. Adding a seal;
8. Adding a subscribing witness;
9. Adding or removing a signature;
10. Adding words of negotiability when it was not negotiable;
11. Adding a special consideration after "value received";
12. Adding a place of payment when none is named;
13. Changing a material memorandum;
14. 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.
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.1
In the Supreme Court of Pennsylvania, Oct., 1875.
{Reported in J 9 Pa. St., 370.]
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 3rd, 1872.
* * 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 "J. 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, ^8 Kan., 533.
404 BROWN V. REED. [CHAP. 1 5,
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:
1 * 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:
u
North East, April 2d, 1872.
Six months after date I promise to pay J. B. Smith or bearer fifty doUars when I sell by
order TWO HUNDRED AND FIFTY DOLLARS worth of Hay and Harvest Grinders,
for value received, with legal interest, without appeal, and also without
defalcation or stay of execution.
T.H.Brown, Agent for Hay A Harvest Grinders.
11
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.] BROWN V. REED. 405
' ' There is no evidence impeaching this 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.1 Cutting the contract into two
pieces rendered the whole contract, and hence the part held
by the plaintiff, absolutely void as against maker.2
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,8 and Garrard v. Haddan.4
Decision. — The learned counsel for the plaintiff in error
has appealed to us to reconsider and overrule Phelan v. Moss.6
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 issues
it in such a condition that it may easily be altered without
detection, he is liable to a bona fide holder who takes it in
the usual course of business, before maturity. The maker
1 Masters v. Miller, 4 Term Rep., 320, 346; Fay v. Smith, 1
Allen, 477; Wade v. Wittington, Id., 561; Coch v Coxwell, 2 C,
M. & R., 291; Smith's Lead. Cas., 934.
2 2 Parsons Notes and Bills, 580-2; Chitty on Bills, 182;
Wheelock v. Freeman, 13 Pick., 165; Wade v. Wittington, 1
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, 1 B. & Ad., 671; Benedict v. Cowden,
49 N. Y., 396; Story on Notes, Sec. 408; Byles on Bills, Sees.
254, 256-
8 17 P. F. Smith (Pa.), 59.
*Id., 82; Zimmerman v. Rote, 25 P. F. Smith (Pa.), 188.
5 17 P. F. Smith (Pa.), 59; and Garrard v. Haddan, Id., 82;
since followed in Zimmerman v. Rote, 25 P. F. Smith (Pa.), 188.
26
406 BROWN V. REED. [CHAP. 1 5,
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.1 "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
x25 P. F. Smith (Pa.), 191.
SEC. 55.] BROWN V. REED. 407
the attention of any prudent man. But it may have been
otherwise. If there was no negligence in the maker, the
good faith and absence of negligence 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, 1898.
" 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.*9
And a subsequent holder should write "10" in the margin before
"50 " 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., 511. See also Scofield v. Ford, 56 la., 370;
Stephens v. Davis, 85 Tenn., 271; Seibel v. Vaughn, 69 111., 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, i
In the Court of Common Pleas, July, 1869.
[Reported in 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.
1 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. l6,
In considering the first of these questions, regard must
be had to the age and condition of the party. What would
be negligence 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.1 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,2 but in
such case he intends to become a party to the bill. All the
cases 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.5
But the fact of agency must be first established.6 In Ingham
v. Primrose,7 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-
1 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.
44 Bing., 253 (E. C. L. R., vol. 13), 12 Mo., 484.
5 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. & S., 680, 713 (E. C. L.,
vol. 116).
8Awde v. Dixon, 6 Ex., 869; Kingsford v. Merry, 11 Ex., 577,
in error, 1 H. & N., 503.
7 7 C. B. N. S., 82 (E. C. L. R., vol. 97), 28 L. J. C. P., 294.
SEC. 56.] FOSTER V. MACKINNON. 411
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 holder for value:1
Parsons on Bills, ed. 1865, pp. 109-115, citing amongst other
cases, Putnam v. Sullivan,2 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,8 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, 10th ed., 50,
53, 178; Byles on Bills, 8th ed., 57; Duncan v. Scott, 1 Camp.,
100; Marston v. Allen, 8 M. & W., 494; Harvey v. Towers, 6 Ex.,
656.
2 4 Massachusetts Rep., 45.
8 17 How. St. Tr., 161.
412 FOSTER V. MACKINNON. [CHAP. 1 6,
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,1 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 ioo/. 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.1 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
^th 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. Elliott, 12 C. B. N. S., 373 (E. C. L. R., vol. 104).
•2 Co. Rep., 9b.
4 5 Alabama Rep., 370.
SEC. 56.] 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,1 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-
x2 H. & C, 184.
414 FOSTER 0. MACKINNON. [CHAP. l6,
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.] 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 Fraser 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 Reports2 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.8 Ac-
1 Case 2 Co. Rep., 9 b.
2Keilw., 70, p. 6.
8i C. & J., 312.
41 6 FOSTER V. MACKINNON. [CHAP. 1 6*
cordingly, it has recently been decided in the Exchequer
Chamber, that, if a deed be delivered, 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.1
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 transferees 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 for value 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
1 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, 291a.,
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
(1888); McNamarav. Gargett, 68 Mich., 454; Hanks v. Brown,
SEC. 56.] 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 J., 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., 1; 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
41 8 FOSTER V. MACKINNON. [CHAP. 1 6,
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,1 and the case of Nance v. Lary,2 cited in I
Parsons on Bills 1 1 1 n, both cited by the plaintiff, the facts
were very different from those of the case before us, and have
but a remote bearing on the question. But, in Putnam v.
"7 C. B. N. S., &3 (E. C. L. R., vol. 97), 28 L. J. C. P., 294.
2 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
111., 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.] FOSTER V. MACKINNON. 419
Sullivan, an American case,1 and cited in Parsons on Bills of
Exchange,2 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.
2 Vol. i., p. inn.
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 dona fide holder. Russell v. Langs taffe, 2 Doug., 514;
Bank of Pittsburgh v. Neal, 22 How. Pa., 107; Erchelberger v.
Old Nat. Bank, 103 Ind., 401; Fuller ton 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.1
In the Supreme Court of Ohio, Dec, 1870.
\Reported in 20 Ohio St. ,*4Ji; 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 $50AVt 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.
1 This case is cited in Benjamin's Chalmers on Bills, Notes
and Checks, 111; Daniel on Negotiable Instruments, 204; Wood's-
Byles on Bills and Notes, 241, 243; Tiedeman on Commercial
Contracts, 179. I
SEC. 57.] WIDOE V. WEBB. 42 1
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 plaintiffs grocery and get the same charged in his
account, and that they had frequently seen him purchase at
plaintiffs 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 plaintiffs 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."
26
42 2 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 liquors 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.1
2. If the different items composing the account consti-
*3 Mete, 159. See also Mayor v. Pyne, 3 Bing., 285; Per-
kins v. Hart, 11 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 valid consideration.1
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.8
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, 10 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; 1 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; 1 Taunt., 136; Bliss v. Negus, 8
Mass., 51; 5 N. H., 196; 6 N. H., 225; Cro. Eliz., 199; 3 Taunt.,
226; 1 T. R., 227, 359; Cqmyn'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.; 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, 11 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, 1 Sneed, 376; Nutter v. S toner, 48 Maine,
163.
424 WIDOE V. WEBB. [CHAP. 1 7,
the jury that, if any of the items for spirituous liquors 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. l
Whilst a partial want or failure of consideration avoids
a bill or note only pro tantoy 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.2
And, in general, it makes no difference as to the effect,
whether the illegality be at common law. or by statute.'
lMetcalf on Contr., 246; Addison on Contr., 905; Chitty on
Contr., 730; 1 Parsons on Contr., 456; 1 Parsons on Notes and
Bills, 217; Story on Prom. Notes, § 190; Byles on Bills, in;
Chitty on Bills, 94.
a Story on Prom. Notes, and Byles on Bills, supra.
3 See authorities, supra.
SEC. 57.] WIDOE 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.1
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,2 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
1 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.
(5 Bing., N. C, 341); Armstrong v. Toler, 11 Wheat., 258; Bates
v. Watson, 1 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-
manv. 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.
2 3 Taunt., 226.
426 WIDOE V. WEBB. [CHAP. 1 7,
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.1
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, even
after the giving of this note. For being utterly void it dis-
charged 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 can but repeat what was
said in a similar case: "It is but a reasonable punishment for
1 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. l
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
1 16 O. 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 fixes 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. 172; 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, 1 Mees. & W., 425; Aldrich v. War-
ren, 16 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 V. WEBB. [CHAP. 1 7,
of $ i, 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 totoy and drive the parties into further litigation,
which was required neither by considerations of justice, nor
540; Carlton v. Whittier, 5 N. H., 196; Deering 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; 16 Q. B., 423; Boulton v. Coghlan, 1 Bing., 640.
What Contracts are Tainted With 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, 1 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, 1 P.
Wm., 181; Ross v. Sadgleer, 21 Wend., t66; Beal v. Chase, 31
Mich., 490);
7. Contracts for the procurement of marriage and divorce
(Adams v. Adams, 25 Minn., 72; Everhart v. Puckftt, 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);
10. Usury (Byles on Bills, 140).
Illegality — Usury. — Usury is said to be an indictable mis-
demeanor at common law. Byles, Bills & 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 Decome 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 Fo3:
(a) NECESSARIES, OR (b) IN SATISFACTION OF A TORT.
WILLIAMSON v. WATTS.1
In the Court op King's Bench, Dec, 1808.
[Reported in 1 Campbell, 552.]
The Form of Action. — Assumpsit on a bill of exchange.
Plea, infancy. Replication, that the bill was accepted for
necessaries, and issue thereupon.
^his 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 executed 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.] WILLIAMSON V. WATTS. 43 1
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 WILLIAMSON V. WATTS. [CHAP. l8,
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, if 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 Aiken, 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.] 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.1
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.
1 1 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 co.urt 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, 1 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 Deing 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.
Ji 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 v. WAY.1
In the Supreme Court, Ohio, Dec, 1875.
[Reported in 27 Ohio St., 374.]
The Form of Action. — The plaintiff brought suit in the
Court of Common Pleas of Portage county to recover of the
1 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, m, 301, 304.
*i. A holder of negotiable paper, who takes it (1) 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 onght 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 part.
r~~34. 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. 59.] JOHNSON V. WAY. 435
defendant the amount of two promissory notes of seventy-five
dollars each, of which the following is a copy:
1 ' State of Ohio, July 29, 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 am 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:
*' 1. 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. 19,
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.
11 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:
11 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.
1 * 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 attracted 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.] 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.1 And as to notice, see the following
cases: — Goodman v. Simons,2 Andrews v. Pond,8 Fowler v.
Brantly,4 Bank of Pittsburg v. Neal.6
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.,
16; Nixon v. DeWolf, 10 Gray, 348; Dumont v. Williamson, 18
Ohio St., 115; Davis v. Bartlett, 12 lb., 544.
2 20 How., 365.
8 13 Pet, 65.
*i4 lb., 318.
8 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.
27
438 JOHNSON V. WAY. [CHAP. 1 9,
the time of jthe purchase, will not defeat his title. That can
only be effected by actual notice, or fraud on his part. l
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,4 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,6 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
1 Murray v. Lardner, 2 Wall., 121; Goodman v. Harvey, 4
Adol. & Ellis., 470.
*i Bur. King's Bench Rep., 452.
»3 Bur. 15, 16.
4 3 Barn. & Cress., 466.
6 5 Barn. & Ad., 909.
SEC. 59.] JOHNSON V. WAY. 439
proposition, "that nothing short of actual notice, or bad
faith (fraud) will defeat the title of the holder."1 .
For the law as declared in this country see: Swift v. Ty-
son," Goodman v. Simons,8 Bank of Pittsburg, v. Neal,4 Mur-
ray v. Lardner,5 Edwards on Bills and Notes,6 Uther v. Rich,1
Steinbacker v. Boker,8 Magee v. Badger,0 Belmont Bank v.
Hodge,10 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-
tiffs 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.
2 16 Pet., 15.
a2o How., 343.
4 22 lb., 108.
5 2 Wall., no.
8 318.
7 10 Adol. & Ellis, 784.
8 34 Barb., 436.
9 34 N. Y., 247.
10 35 lb., 65.
11 n Conn., 388; 10 Cush., 488; 4 Ga., 287; 13 Ala., 390.
44° JOHNSON V. WAY. [CHAP. 1 9,
and honestly, before due, for a valuable consideration, had a
good title.1
In 1824, in Gill v. Cubit,3 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.6
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.8
^alk., 126; Miller v. Race, 1 Bur., 452; Peacock v. Rhodes,
Doug., 633; Lawson v. Weston, 4 Esp., 26; Gorgier v. Mieville, 3
Barn. & Cres., 45.
2 3 Barn. & Cres., 466.
8 5 Barn. & Ad., 909.
*4 Ad. & EL, 870.
5 Raphael v. The Bank of England, 17 C. B. (84 E. C. L. ), 161-
•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; 1 Smith's Lead. Cas. (7 Am. ed.), 825; Redfield &
Bigelow's Lead. Cas. on Bills and Notes, 257.
SEC. 59.] JOHNSON V. WAY. 44I
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 bona 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,1 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. "
1 in Mass., 345.
Purchaser for Value Without Notice — Denned. — 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; McCauley 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. Ice-
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. WAY. [CHAP. 1 9,
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 pf 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; Church v. Clapp, 47 Mich., 257; VVoodsmer v. Cole,
69 Cal., 142; Haywood v. Seeler, 61 la., 574; Speck v. Pullman
Car Co., 121 111., 57; Hinckley v. Union P. R. R., 129 Mass., 61
Ford v. Phillips, 8$ 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.
(a.) 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,1 which are stated in the syllabus,
1 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. Bk. 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; 30 Am. Rep., 702.
Bill or Note, Not Matured Until Expiration of the Day
When 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. 1 9,
are, however, in harmony with that of Goodman v. Harvey;
so is the decision in Bassett v. Avery,1 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.''
1 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, 1 1 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., 203 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, 16
Peters, 1; 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 — Denned. —
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. WAY. 445
This statement is made upon the authority of Williamson v.
Brown;1 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,2 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-
Ji5 N. Y., 354.
a3 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 holder must have
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.,
470.
Neither will actual notice defeat recovery by an indorsee if his
indorser was a purchaser for value without notice. Kost v. Ben-
der, 25 Mich., 615; Chalmers v. Lanion, 1 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. WAY. [CHAP. 1 9,
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 (£) 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 — When 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 c; 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" With-
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.] 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, 101 U.
S., 68; Lancaster Bank v. Taylor, ioo 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.1
In the Supreme Court of Ohio, December, 1855.
[Reported in 5 Ohio St.% /j.]
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.
^his case is cited in Daniel on Negotiable Instruments, 1568,
1569, 1574, 1576, 1587, 1590, 1600, 16383 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, 57, 280; Illustrative Cases, 40; Paige's Illus-
SEC. 60.] MORRISON ET AL. V. BAILEY ET AL. 449
"$300. Cleveland, O., June 30, 1853.
41 Wicks, Otis & Brownell: Pay to L. F. Burgess, on
the 13th day of July, '33, or order, three hundred dollars.
R. B. Bailey."
Indorsed by 4< L. F. Burgess"
The paper was presented to Wicks, Otis & Brownell, for
payment, on the 16th 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.
45° MORRISON ET AL. V. BAILEY ET AL. [CHAP. 20,
as Judge Story well said, in the matter of Brown,1 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.2 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.
1 2 Story, 502.
a 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, 1, 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. 1st, 1898.
The Ann Arbor Savings Bank,
Pay to Adam Smith or order [or to Adam Smith simply, or to
Adam Smith or bearer, or simply to bearer]
Five hundred and YA Dollars.
$500 tWt. 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.
Effect 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.] 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., 8 64; Bank v. Miller, 37 Neb.,
500; 40 Am. St. Rep., 499; 55 N. W. Rep., 1064; Gilford v. Har-
well, 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. But 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 metno-
randutn 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 of the presentation and non-payment
should be given. ' Franklin Bank v. Freeman, 1 6 Pick. ( Mass. ), 535.
See also, as to this class of checks, Cushing 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 discbarge 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
^his 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.,
5 33 J 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.,
343; 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., 195; 23 N. E. Rep., 540; Bank of British N. A. v. Mer-
chant's Bk., i N. Y., in; Victs v. Bank, 101 N. Y., 563; Mar-
zetti v. Williams, 1 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, 1
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.1
1 Bowen et al. v. Newell et al., 4 Selden, 190; Brown v. Lusk,
4 Yerger, 240; Daniels v. Kyle et al., 1 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 ail 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.] 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.1
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
gives 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
1 Dan. on Negot. Inst, Sec. 1790.
SEC. 6l.] QUASI-NEGOTIABLE CONTRACTS. 457
it, and it then becomes a several contract with each individual
to the amount advanced.1
The following is a sufficient form for a letter of credit:
kiAnn Arbor, Mich., Sept. ist, 1898.
" To Barring Bros.,
London, England.
Sirs: —
44 The 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 $5,000.
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.2
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."8
The terms * * bank notes " and ' * bank bills, " says Mr.
Daniel, in his valuable work on Negotiable Instruments, * ' are
1 The Union Bank of La. v. The Executors, etc., 3 N. Y.,
203; Russell v. Wiggins, 2 Story's Rep., 214.
2Vermilye Co. v. Adams Express Co., 21 Wall., 138; Dens-
more, etc. v. Duncan, etc., 57 N. Y., 573.
8 Dan. on Negot. Inst, Sec. 1664; Townsend v. People, 4 111.,
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."
45^ QUASI-NEGOTIABLE CONTRACTS. [CHAP. 21,
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.4
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.6
Neither are they discharged because they have been re-
deemed by the bank which issued them, but may be issued
1 Dan. on Negot. Inst., Sec. 1664; Eastman v. Commonwealth,
4 Gray, 416.
2 1 Burr, 452.
8 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, 1 Watts & S., 92.
BKimbro 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 the corpora-
tive existence of the bank.1
Gold and Silver Certificates. — The 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."2
Bills of Lading — Defined.— A bill of lading may be de-
fined to be ' 4 a formal acknowledgment of the receipt of goods
and an engagement to deliver them to the consignee or his
assigns."8
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 ot Shaw v. Railroad Co. , that
Larsons on Bills and Notes, 95; Dan. on Negot. Inst., sec.
1683.
'Stewart v. State, 6« Md., 412.
* Empire Transportation Co. v. Wallace, 68 Pa. St., 302; Mer-
chants Bank v. Hewitt, 3 Iowa, 933 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. 21,
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. — il 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.8
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.4 In the absence of statutory provision warehouse
!ioo U. S., 557.
2 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.
8 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.
4 Burton v. Curyea, 40 111., 320; 89 Am. D., 350, 361.
SEC. 6 1.] QUASI-NEGOTIABLE CONTRACTS. 46 1
receipts are not negotiable instruments in the sense that bills
and notes are. They do not call for the payment of money.1
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.2
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 -
1 Rice v. 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, 10 1 111., 490; McCurdy v. Bowes,
88 Ind., 583; Bank of Montreal v. Thayer, 7 Fed. R., 622.
462 QUASI-NEGOTIABLE CONTRACTS. [CHAP. 21,
ful owner of his right and interest therein by an indorsement
and transfer of the same.1
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
11 A." $50; I acknowledge myself indebted to " B." in the sum
of$ioo.2
'Shawv. Spencer, ioo 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, 1 Esp., 425; Israel v. Israel, 1 Camp., 499;
Currier v. Lock wood, 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.
*3> P- 72 °f 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.1
In the Supreme Court, Ohio, Dec. 1874.
[ Reported in 25 Ohio St., 413; 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. Pike ton, 0.t May 29, 1856.
4 ' 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 months 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.), 1; Edwards on Bills, 183;
Miller v. Tiffany, 1 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. DEMPSEV. [CHAP. 2 2,
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 of 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 on 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: ( 1 ) 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 District 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: 1. 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: 1. 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.1
Story's Con. of Laws, secs.29i-293a, 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.1 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
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.8
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.4
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.6
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, in which case they may
stipulate that, in addition to legal interest, the debtor shall
Larsons on Notes and Bills, 324-327, 333-336, and 376-380
and notes; 43 N. H., 113; Tyler on Usury, 79-90; Scofieldv. 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.
8 2 Parsons on Notes and Billg, 426; 6 Ohio St., 19; 1 Ohio St.,
409; 12 Ohio St., 544; 13 Ohio, 1; 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.
4 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.
5 2 Kent, 460, 461; Depawv. Humphreys, 10 Martin, 1; 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. 2 2,
also pay the creditor the current exchange between the two
places, and the note will not be usurious.1
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 must
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, sec.
61; Buckingham v. McLean, 13 How., 212; Southern Bank v.
Brashears, 1 Disney, 207.
SEC. 62.] KILGORE V. DEMPSEY. 467
tnenty without reference to the place where it was made 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, l 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
^o 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." 1 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. 22,
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,1 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
xi4 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; 1 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.] KILGORE V. DEMPSEY. 469
country that incident of the contract shall be decided." In
Chapman v. Robertson,1 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, 1
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.
In Goddin v. 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., 295; 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., 126; Robinson v. Bland, 2 Burr, 1077; Kaufman
v. Bank of Ky., 41 Miss., 212.
29
470 KILGORE V. DEMPSEY. [CHAP. 2 2,
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; 1 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, 1 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, 1 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. Y., 566;
Transportation Co. v. Kilderhouse, 87 N. Y., 430; Sheldon v.
Haxtun, 91 N. Y., 124; Bigelowv. Burnham, 49 N. W. Rep. (la. ),
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.1
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.8
2. If the contract of suretyship is executed and delivered
at a different time than the principal contract, there must be
some new consideration.4
'Tiedeman on Bills and Notes, Sec. 158; Allen v. Harrah, 30
la., 363; Larrusse v. Barker, 3 Wheat., 10 1.
2 8 Johns., 29.
8 73 HI-, 343; Moses v. Lawrence Co. Bk., 149 U. S., 298;
Leonard v. Vredenburgh, 8 Johnson, 29.
4 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.1
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 bound with his principal
as an original promisor \ and his obligation is equally abso-
lute.'1 Mere delay of the creditor to sue the principal will not
discharge a surety.8
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, 10 1 111., 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.f
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.] SURETIES OR THE CONTRACT OF SURETYSHIP. 473
when the surety is not. As, for instance, when the principal
is (a) a married woman, (6) 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: (a) by payment; (6) by alteration in a mater-
ial part; (c) by release of the principal, unless there has been
a reservation against the surety;1 (d) misrepresentation on the
part of the principal releases the surety as to all parties to
such transaction;2 (e) by satisfaction; (/") by creditors' parting
with securities.8 (This discharge, however, is only pro
tanto)\ (g) by diversion of the funds,4 (A) 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.5 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.6
^o Pick., 528; 7 Wend., 429; 2 Cal., 121; 26 Kan., 573; 24
Mo. App., 317.
2 3 Ohio State, 302; 52 Iowa, 94.
8 5 Pick., 5073 2 Neb., 265.
4 1 Par. B. & N., 236.
5 in Pa. State, 187; 41 Ohio State, 603; 95 Ind., 156; 58
Mich., 343; 100 N. Y., 539.
6 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.8
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.8
5. If he compromises with the creditor, he may recover
that amount only of the debtor.4
6. If he pays the debt in a depreciated currency, he may
recover its actual value only.5
*i7 Johns., 324.
2 6 Grat., 524.
8 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.
4 22 Grat, 524.
6 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.y 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.1 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.2 A forbearance to sue is sufficient
consideration to support the contract of guaranty.
^arkhurst v. Vail, 73 111., 343; 20 N. Y., 331.
aRigby v. Norwood, 34 Ala., 129; 67 Mo., 667, 5 Cush., 80.
47^ 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.1
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.2 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/r<? tanto.1 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.1
Liability of a Guarantor. — At common law he was not
liable until it was shown that the principal debtor could not
pay the debt, *. e.f 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.— 1. 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, *'. 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.
1 2 Mich., 504; 39 111., 577; 40 111., 155.
ai2 Peters, 525.
I
THE AMERICAN UNIFORM NEGOTIA-
BLE INSTRUMENTS LAW.1
CONTENTS.
Chapter 25 [I] General Provisions. (§ 1-17.)
26 [II] Form and Interpretation of Negotiable
Instruments. (§§ 20-42.)
27 [III] Consideration. (§§ 50-55.)
28 [IV] Negotiation. (§§ 60-80.)
29 [V] Rights of Holder. (§§ 90-98.)
30 [VI] Liabilities of Parties. (§§ 110-119.)
31 [VIIJ Presentment for Payment. (§§ 130-148.)
32 [VIII] Notice of Dishonor. (§§ 160-189.)
33 [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 19, 1897, and went into
effect Oct. 1 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.
< <
i <
i <
t i
4 i
4 i
480 UNIFORM NEGOTIABLE INSTRUMENTS LAW.
Chapter 36 [XII] Presentment for Acceptance. (§§ 240-
248.)
37 [XIII] Protest. (§§ 25o-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. (§§ 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.] In this act, unless the context otherwise requires:
4 * Acceptance " means an acceptance completed by deliv-
ery or notification.
44 Action" includes counter-claim and set-off.
44 Bank" includes any person or association of persons
carrying on the business of banking, whether incorporated or
not.
44 Bearer" means the person in possession of a bill or
note which is payable to bearer.
44 Bill" means bill of exchange, and 4 4 note " means ne-
gotiable promissory note.
44 Delivery" means transfer of possession, actual or con-
structive, from one person to another.
4 4 Holder " means the payee or indorsee of a bill or note,
who is in possession of it, or the bearer thereof.
44 Indorsement" means an indorsement completed by
delivery.
44 Instrument" means negotiable instrument.
44 Issue" means the first delivery of the instrument, com-
plete in form to a person who takes it as a holder.
44 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.] 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.] 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. ] The provisions of this act do not apply to negotia-
ble instruments made and delivered prior to the passage
hereof.
SEC. 71.] 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.] An instrument to be negotiable must conform to
the following requirements:
i. 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.1
[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
1 The foregoing section, with the exception of the last subdi-
vision, is taken from the English Bills of Exchange Act, Sec. 9,
subd. 1.
SEC. 74.] 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.1
[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
[23.] 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 1 1 of the English Bills of
Exchange Act, with the exception of subd. 2, which is added,
so
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.1
[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.
1 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 drawee1 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.2
[28.] 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
1 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.1
SECTION 81.
TERMS WHEN SUFFICIENT.
[29.] 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 deemed prima 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.
1 Armstrong v. Pomeroy, Nat. Bk., 46 Ohio St., 512; Bennett
v. Farwell, 1 Campb., 130.
'This is Sec. 13, subd. 1, of the English Bills of Exchange
Act, in substance.
SEC. 84.] FORM AND INTERPRETATION. 489
SECTION 84.
WHEN DATE MAY BE INSERTED.1
[32.] 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.3
[33-] Where the instrument is wanting in any material
particular, the person in possession thereof has a 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 p^rty 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.
1 This is, in substance, Section 1 2 of the English Bills of Ex-
change Act.
2 This is taken from Section 20 of the English Bills of Exchange
Act.
49° 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.1
[ 36. ] Where the language of the instrument is ambiguous,
or there are omissions therein, the following rules of construc-
tion apply:
1 Subd. 1. The first clause in this subdivision is taken from
the English Bills of Exchange Act, sec. 9, subd. 2.
SEC. 89.] 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
49 2 FORM AND INTERPRETATION. [CHAP. 26,
necessary for this purpose; and the authority of the agent may
be established as in other Gases of agency. '
SECTION 91.
LIABILITY OF PERSON SIGNING AS AGENT, ETC.
[ 39- ] 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.1
[41.] 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.
1 Allen v. Williams, 97 Cal., 403.
2 English Bills of Exchange Act, sec. 25.
8 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.1
[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.
1 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 prima fa-
cie 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.
[51.] 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.1
[52.] 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.
1 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. j NEGOTIABLE INSTRUMENTS. 495
SECTION 98.
WHEN LIEN ON INSTRUMENTS CONSTITUTES HOLDER
FOR VALUE.1
[53.] Where the holder has a lien on the instrument,
arising either from contract or by implication 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.] 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.
1 This section is taken from the English Bills of Exchange Act,
sec. 27, subd. 3, and is founded upon Collins v. Martin, 1 Bos. &
P., 648.
8 This is taken from sec. 28, of the English Bills of Exchange
Act.
CHAPTER XXVIII.
Negotiation.
SECTION 101.
WHAT CONSTITUTES NEGOTIATION.
[60. ] 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.] 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.1
SECTION 103.
INDORSEMENT MUST BE OF ENTIRE INSTRUMENT.
[62. ] 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.
1 Brown v. Butchers and Drovers Bank, 6 Hill, 443; 41 Am.
Dec. 755; Johnson 111. Cases, 114.
SEC. IO4.] NEGOTIATION. 497
SECTION 104.
KINDS OF INDORSEMENT.
[63. ] 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. ] 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.] 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.] Qualified indorsement constitutes the indorser a
mere assignor of the title to the instrument. It may be made
by adding to the indorsees 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.] 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.] 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. ] 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'li 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.] The holder may at anytime strike out any in-
dorsement which is not necessary to his title. The indorser
SEC. I20.] NEGOTIATION. 501
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.
81
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.1
[91. ] 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.
lThis section is taken from the English Bills of Exchange Act,
sec. 29.
SEC. I25.] RIGHTS OF HOLDERS. 503
SECTION 125.
NOTICE BEFORE FULL AMOUNT PAID.
[93.] 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] 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 fraud.
SECTION 127.
WHAT CONSTITUTES NOTICE OF DEFECT.
[95-] 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.] 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 131.
LIABILITY OF MAKER.
[no,] 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.
[in.] 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.
[H2.] 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.
506 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.
[114.] 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:
1. That the instrument is genuine and in all respects
what it purports to be;
2. That he has a good title to it;
3. That all prior parties had capacity to contract;
4. 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.] Where a person places his indorsement on an in-
strument negotiable by delivery he incurs all the liabilities of
an indorser.
SECTION 139.
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.
508 LIABILITIES OF PARTIES. [CHAP. 30,
1
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 1 1 5 ! of this act, unless he discloses the
name of his principal, and the fact that he is acting only as
agent.
1 This is Sec. 65 in the other states.
CHAPTER XXXI.
Presentment for Payment.1
SECTION 141.
EFFECT OF WANT OF DEMAND ON PRINCIPAL DEBTOR.
[130.] Presentment for payment is not necessary in or-
der to charge the person primarily liable 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:
1 This article is taken largely from the English Act and is gen-
erally declaratory of the law.
5IO PRESENTMENT FOR PAYMENT. [CHAP. 3 1,
i . 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.
[J33-] 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] When the instrument is payable at a bank, pre-
sentment must be made during banking hours, unless the per-
SEC. 147.] PRESENTMENT FOR PAYMENT. 511
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.] 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.] 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.] 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.] 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.
J 12 PRESENTMENT FOR PAYMENT. [CHAP. 3 1,
SECTION 151.
WHEN PRESENTMENT NOT REQUIRED TO CHARGE THE
INDORSER.
[140.] 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 152.
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.] 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.] The instrument is dishonored by non-payment
when:
1. 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.
[144.] Subject to the provisions of this act, when the
instrument is dishonored by non-payment, an immediate
right of recourse to all parties secondarily liable 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 instrument 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.
[146.] 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.] 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,
[160.] 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.
[i 6 1.] 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.] 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
516 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.] 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.] 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 NOT ICE 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.] 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. 5 17
instrument, and indicate that it has 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.] 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.] 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.
[171.] 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.
82
$l8 NOTICE OF DISHONOR. [CHAP. 32,
SECTION 172.
NOTICE TO BANKRUPT.
[172.] 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.] 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.] NOTICE OF DISHONOR. 519
i. 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.] 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.] 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 maybe 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.] 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. 52I
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.
|_i86]. Notice of dishonor is not required to be given to
an indorser in either of the following cases:
522 NOTICE OF DISHONOR. [CHAP. $2,
i. 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 rights 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.
[201.] 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.] 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.] 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. I95.] 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.
[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.] Any alteration which changes:
1. The date;
2
3
4
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
5-
made.
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 io
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.
[212.] 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.1
[213.] An inland bill of exchange is a bill which is, or
1 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.1
[214.] 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.*
[215.] 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. & Gr., 576; Smith v. Bellamy, 2 Stark., 223;
Daniel, Sec. 131.
3 See English Bills of Exchange Act, Sec. 15.
CHAPTER XXXV.
Acceptance of Bills of Exchange.
SECTION 203.
ACCEPTANCE; HOW MADE, ET CETERA
[220.] 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.
[221.] 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.] 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.] 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.1
[225.] 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, lo 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.2
[226.] 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, n Hun., 268; Gates v. Erie, 4 Hun., 96.
3 See English Bills of Exchange Act, Sec. 18.
53° ACCEPTANCE OF BILLS OF EXCHANGE. [CHAP. 35,
SECTION 210.
KINDS OF ACCEPTANCES.1
[227.] 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.1
[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, ] The holder may refuse to take a qualified accept-
ance, and if he does not obtain an unqualified acceptance, he
1 See English Bills of Exchange Act, Sec. 19.
3 See English Bills of Exchange Act, Sec. 19 (2 c).
SEC. 213.] ACCEPTANCE OF BILLS OF EXCHANGE. 531
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.] 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.] 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.] 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.] 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.] 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. ] 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.] 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. ] 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.] 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 drawersand 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.] The protest must be annexed to the bill, or must
contain a copy thereof, and must be under the hand and seal
of 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.] Protest may be made by:
1. 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. ] 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. ] 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.] A bill which has been protested lor 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
l>ill to be protested for better security against the drawer and
indorsers.
SECTION 230.
WHEN PROTEST DISPENSED WITH.1
[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.1
[268.] 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.
1 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.] 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 234
WHEN DEEMED TO BE AN ACCEPTANCE FOR HONOR OF
THE DRAWER.
[282.] 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.] The acceptor for honor is liable to the holder
and all parties to the bill subsequent to the party {or whose
honor he has accepted.
SECTION 236.
AGREEMENT OF ACCEPTOR FOR HONOR.
[284.] The acceptor for honor by such acceptance en-
gages that he will on due presentment pay- the bill 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.
54° ACCEPTANCE OF BILLS OF EXCHANGE. [CHAP. 38,
SECTION 239.
PRESENTMENT FOR PAYMENT TO ACCEPTOR FOR HONOR;
HOW MADE. .
[287.] 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. ] 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.
lSo in original. There is no section 104, probably means sec.
175-
3 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.] 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. ] Where two or more persons offer 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. ] 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. ] 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.
[310.] 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.] 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.] 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. ] 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.] 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.] 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.
[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.] 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.1
^ee Culver v. Marks, 122 Ind., 554; 22 N. E. Rep., 1086.
54*> PROMISSORY NOTES AND CHECKS. [CHAP. 41,
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. ] Where the holder of a check procures it to be
accepted or certified the drawer and all indorsers are dis-
charged from liability thereon.!
SECTION 260.
WHEN CHECK OPERATES AS AN ASSIGNMENT.
[325.] 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.
1Minot 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.
[33°»] 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.] 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.] 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.] The laws or parts thereof specified in the sched-
ule hereto annexed are hereby repealed.
SECTION 265.
WHEN TO TAKE EFFECT.
[341.] This chapter shall take effect on the first day of
October, eighteen hundred and ninety-seven.
84
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.
[1.] 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: —
4 ' Acceptance " means an acceptance completed by deliv-
ery or notification.
4 4 Action " includes counter-claim and set-off.
4 4 Banker " includes a body of persons, whether incorpor-
ated or not, who carry on the business of banking.
4 '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.
4 4 Bearer " means the person in possession of a bill or
note which is payable to bearer.
4 4 Bill " means bill of exchange, and 4 * note " means
promissory note.
4 4 Delivery " means transfer of possession, actual or con-
structive, from one person to another.
SEC. 267.] PRELIMINARY. 55 1
1 < Holder " means the payee or endorsee of a bill or note
who is in possession of it, or the bearer thereof.
1 4 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.
4 * 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.] 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 (b) 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;
(6) 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.] 1. 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 ( b) 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.] 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.] 1. 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.
(b) By stated installments.
SEC. 275.] 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.
[10.] I. A bill is payable on demand —
(a) 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.
[11.] 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.
55^ FORM AND INTERPRETATION. [CHAP. 45,
SECTION 277.
OMISSION OF DATE IN BILL PAYABLE AFTER DATE.
[12.] 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 278.
ANTE-DATING AND POST-DATING.
[13.] 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:
1. 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
(0) 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;
(6) When the last day of grace is a bank holiday
(other than Christmas day or Good Friday)
under the Bank Holidays Act, 1871,1 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 4I month" in a bill mean calendar month.
SECTION 280.
CASE OF NEED.
[15.] The drawer of a bill and any indorser may insert
therein the name of a person to whom *he Kolder 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.
x34 and 35 Vict., Ch. 17.
55& FORM AND INTERPRETATION. [CHAP. 45,
SECTION 281.
OPTIONAL STIPULATIONS BY DRAWER OR INDORSER.
[16.] 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 duties.
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:
(0) It must be written on the bill and be signed by the
drawee. The mere signature of the drawee
without additional words is sufficient.
(6) 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 (d)
qualified.
2. A general acceptance assents without qualification
to the order of the drawer. A qualified ecceptance in express
terms varies the effect of the bill as drawn.
In particular an acceptance is qualified which is: —
(a) Conditional, that is to say, which makes payment
by the acceptor dependent on the fulfillment
of a condition therein stated;
(& 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, unless 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.
SECTION 286.
DELIVERY.
* [21.] 1. Every contract on a bill, whether it be the
drawer's, the acceptor's, or an indorsees 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 liable 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.
[25.] 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-
dorsee 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.
CHAPTER XLVII.
The Consideration for a Bill.
SECTION 292.
VALUE AND HOLDER FOR VALUE.
[27.] i. Valuable consideration for a bill may be
constituted by: —
(a) Any consideration sufficient to support a simple
contract ;
(b) 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.
564 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:
(a) 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;
(6) 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 taith, 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.] 1. 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 is 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 accoptance, 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.] An indorsement in order to operate as a negotia-
tion must comply with the following conditions, namely, —
1. 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 4 * copies " are
recognized, is deemed to be written on the bill itself.
35
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 2*9.
INDORSEMENT IN BLANK AND SPECIAL INDORSEMENT.
[34.] 1. 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 indorsees 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 <4Pay 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.] I. Where a bill is negotiable in its origin it con-
tinues to be negotiable until it has been (a) restrictively in-
dorsed or (6) discharged by payment or otherwise.
2. Where an overdue bill is negotiated, it can only be
negotiated subject to any defect of title affecting 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.] 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.] 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 (6) 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.
i. 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.
57© GENERAL DUTIES OF THE HOLDER. fCHAP. 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.] 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;
( b) 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;
(6) Where, after 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.] 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.] 1. 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.] 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
(b) When presentment for acceptance is 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 liability 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.] 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.
574 GENERAL DUTIES OF THE HOLDER. [CHAP. 49,
The fact that the holder has reason to believe that the
bill will, on presentment, be dishonored, does not dispense
with the necessity for presentment.
(d) Where the drawee is a fictitious person;
(c) As regards the drawer where the drawee or ac-
ceptor is not bound, as between himself and
the drawer, to accept or pay the bill, and the
drawer has no reason to believe that the bill
would be paid if presented;
(d) As regards an indorser, where the bill was ac-
cepted or made for the accommodation of that
indorser, and he has no reason to expect that
the bill would be paid if presented;
(e) By waiver of presentment, express or implied.
SECTION 312.
DISHONOR BY NON-PAYMENT.
[47.] I. A bill is dishonored by non-payment (a) when
it is duly presented for payment and payment is refused or
cannot be obtained, or (6) when presentment is excused and
the bill is overdue and unpaid.
2. Subject to the provisions of this Act, when a bill is
dishonored by non-payment, an immediate right of recourse
against the drawer and Endorsers accrues to the holder.
SECTION 313.
NOTICE OF DISHONOR AND EFFECT OF NON-NOTICE.
[48.] Subject to the provisions of this Act, when a bill
has been dishonored by non-acceptance or by non-payment
notice of dishonor must be given to the drawer and each in-
dorser, and any drawer or indorser to whom such notice is not
given is discharged;
Provided that —
1. Where a bill is dishonored by non-acceptance, and
notice of dishonor is not given, the rights of a holder in due
SEC. 314] GENERAL DUTIES OF THE HOLDER. 575
course subsequent to the omission, shall not be prejudiced by
the omission.
2. Where 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.] 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.
576 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.
1 1. 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;
(b) Where the person giving and the person to receive
notice reside in different places, the notice is
sent off 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 may 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.] GENERAL DUTIES OF THH HOLDER. 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.] 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;
(&) 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, (1) 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.
57^ GENERAL DUTIES OK THE HOLDER. [CHAP. 49,
SECTION 316.
NOTING OR PROTEST OF BILL.
[51.] 1. 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
(b) 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;
(6) 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. i
<
[52.] i. When a bill is accepted generally present-
ment for payment is not necessary in order to render the ac- i
ceptor liable. i
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.] 1. 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:
(#) The existence of the drawer, the genuineness of
his signature, and his capacity and authority to
draw the bill;
(b) 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;
(6) 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;
(&) Is precluded from denying to a holder in due
course the genuineness and regularity in all
respects of the drawers signature and all pre-
vious indorsements;
(c) 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.] 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.] 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.] i. Where the holder of a bill payable to bearer
negotiates it by delivery without indorsing it, he is called a
• 4 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 324.
PAYMENT IN DUE COURSE.
[ 59. ] 1. 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:
(b) 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.] Where a bill payable to order on demand is
drawn on a banker, and the banker on whom it is drawn pays
586 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.] 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.] 1. 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.] 1. 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.] 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:
(&) 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.] 1. 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.] ACCEPTANCE AND PAYMENT FOR HONOR. 589
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 liable 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.] 1. 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.
59° 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 LIU.
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 335.
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.
[71.] 1. Where a bill is glrawn 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 requisites 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 —
(a) 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;
(b) 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. ] 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 339.
PRESENTMENT OF CHEQUE FOR PAYMENT.
[74.] 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.] 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 (6) 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*] 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*-
aft
59& 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.] 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.] 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-] CROSSED CHEQUES. 599
SECTION 345.
PROTECTION TO BANKER WHERE CHEQUE IS CROSSED.
[80.] 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.
[81.] 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. ] 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 of determinable
future time, a sum certain in money, 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.] I. A promissory note maybe made by two or
more makers, and they may be liable thereon jointly, or
jointly and severally according to its tenor.
SEC. 3SI-] PROMISSORY NOTES. 6oi
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.] 1. 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.] 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.
602 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;
(6) 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.] 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 negligently or not.
SECTION 356.
SIGNATURE.
[91.] 1. 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.] 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.
4 * Non-business days" for the purposes of this Act mean —
(a) Sunday, Good Friday, Christmas Day;
604 SUPPLEMENTARY. [CHAP. 59,
(6) A bank holiday under the Bank Holidays 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] F°r ^e 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] 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.] The provisions of this Act as to crossed checks
shall apply to a warrant for payment of dividend.
SEC. 361.] 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] *• 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, 1870,1 or acts
amending it, or any law or enactment for the
time being in force relating to the revenue;
(6) The provisions of the Companies Act, 1862,2 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.
8 25 and 26 Vict., c. 89.
606 SUPPLEMENTARY. [CHAP. 59,
SECTION 363.
SAVING OF SUMMARY DILIGENCE IN SCOTLAND.
[98.] 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.] 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.] 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
First 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.
(. Witnesses.
J. K. [
N. B. — The bill itself should be annexed, or a copy of
the bill and all that is written thereon should be underwritten.
lThe other schedules are purely local in interest, and are
therefore omitted. — Ed.
TABLE OF CASES
(References are to pages.)
Abbott v. McKinley, 2 Miles (Pa.), 220 125
Aborn v. Bosworth, 1 R. I., 401 383
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, 16 111., 169 118, 119, 120
Adams v. Jones, 12 Adolph. & E., 459 280
Adams v. Bovven, 8 S. & M., 624 423
Adams v. Adams, 25 Minn., J2 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, 319
Aldrich v. Warren, 16 Me., 465 427
Alexander v. Thomas, 16 Adol. & 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., 228 300
American Emigrant Co. vs. Clark, 47 la., 671 452
6lO TABLE OF CASES.
America v. Kirby, 108 Mass., 497 285
Amy v. Dubuque, 98 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, 1 Str. 24 (1717) 79, 101
Andrews v. Pond, 13 Peters, 65 333, 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, 1 Ld. Raym., 738 34, 39
Anonymous, 1 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. Delarmire, 1 Strange, 505 35
Armstrong v. Harshman, 61 Ind., 52 120
Armfield v. Allport, 27 Law J., Exch., 42 in, 115
Ammidown v. Woodman, 31 Me., 580 107
Armstrong v. Pomeroy Natl. Bank, 46 Ohio St., 512 488
Arnold v. The Rock River Ry. Co., 5 Duer, 207 84, 89
Arnold v. Check Bank, 1 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. 611
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, 1 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, 77 Ala., 168 453
Bank v. Miller, 37 Neb., 500; 40 Am. St. Rep., 499 451
Bank v. Cornhauser, 37 111. app., 475 453
Bank, etc. v. Merrill, 2 Hill, 295 72
Bank v. Morris, 1 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., 369 154
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., 1 N. Y., in . . 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
6ia Table of cases.
Bank v. Douglass, 31 Conn., 170 * 399
Eank of Utica v. Smith, 18 Johns, 230 331
Bank of Washington v. Reynolds, 2 Crauch. C. C, 289. . . . 382
Bank of Jamaica v. Jefferson, 92 Tenn., 537 275
Bank v. Gilliland, 23 Wend., 311 (1840) 172
Bank v. Mayberry, 48 Me., 556 165
Bank v. Strother, 28 S. C, 504 , 93
Bank v. Wheeler, 75 111., 546 93
Bank v. Price, 52 la., 570 105
Barnard v. dishing, 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. I., 740; 37 Am. St. R., 777 173
Bardsley v. Deep, 88 Pa. St., 420 172
Barnsley v. Baldwyn, 7 Mod., 417; 2 Str., 1151 100
Barrough v. White, 4 B. & C, 327 105
Baring v. Clark, 19 Pick., 220 227
Barney v. Grover, 28 Vt., 391 253
Barrow v Porter, 44 Vt., 587 251
Barnett v. Young, 29 Ohio St., 71 300
Bartlett v. Emery, 1 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
Bassenhorst v. Wilby, 45 Ohio St., 333 313, 382
Bassett v. Avery, 15 Ohio St., 299 442, 444, 446
Bates v. Watson, 1 Sneed, 376 423, 425
Batzer v. Buren, 29 Me., 434 327
Bays v. Conner, 105 Ind., 415 127
Bayard v. Shunk, 1 Watts & 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 77, 78, 79
Beale v. Parish, 20 N. Y., 407 382
Beal v. Glen. Elec. Co., 38 N. Y., 527 295
Beebe v. Bank of New York, 1 Johnson, 529, 572 254
Beckwith v. Angell, 6 Conn., 325 266
Becham v. Drake, 9 M. & W., 92 162
Bedell v. Hening, 11 Am. St. Rep., 307; 77 CaL, 572 419
TABLE OF CASES. 613
Beer v. Clifton, 98 Cal., 328 312
Beeoh v. State Bank, 2 Ind., 488 183
Beeching v. Westbrook, 8 M. & W., 412 62
Bell v Cafferty. 21 Ind., 41 1 318
Bell v. Morrison, 1 Peters, 531 62
Bell v. Bruen, 1 How., 182 470
Bell v. First N. Bank, 111 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. Campbell, 8 2. B., 1 282
Bemis v. Leonard, 1 18 Mass., 502 108
Benjamin v. Fillman, 2 McLean (U. S.), 351 168
Benn v. Kutzschan, 24 Or., 28; 32 Pac. B., 763 91, 92, 293
Bentick v. Dorrien, 6 East., 200 201, 202, 206
Benton v. Martin, 52 N. Y., 574 153
Benedict v. Schxnieg, 13 Wash., 476; 52 Am. St. Bep., 61 382
Benedict v. Cowden, 49 N. Y., 396 405
Bennett v. Farwell, 1 Campb., 130 488
Berney v. Steiner Bros., 108 Ala., in 309
Biglow v. Bilrnham, 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, 1 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., 417 119
Blakeslee v. Hewitt, 76 Wis., 341 ; 44 N. W. Rep., 1105. .275, 298
Blake v. McMillen, 33 la., 150 382
88
614 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. Lovering, 58 Me., 437 322, 330
Bliss v. Meyers, 8 Mass., 51 423
Blogg v. Pinkers, 1 Ryan & Mood., 125 169
Bloomer v. Henderson, 8 Mich., 395 254
Blood v. Northup, 1 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, 1 Salk, 131 ; Holt's Rep., 121 51, 381
Borden v. Clark, 26 Mich., 410 299. 322
Bostwick v. Dodge, 1 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, 1 Bing, 640 428
Bowie v. Hall, 1 L. B. 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
Bowen 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
Braithwaite 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 43°
Brandan v. Barnett, 12 Clark & R, 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, 1 Bingham, 281 167
Brill v. Tuttle, 81 N. Y., 457 89
Brisbane vs. Dacres, 5 Taunt, 142 235
Bridge v. Batchelder, 0 Allen, 394 (1864) 328
Bridge v. Wain, 1 Stark, 504 325
Brit v. Lawson, 15 Hun., 133 382
Brinkman v. Hunter, 73 Mo., 172 185
Brind v. Hampshire, 1 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. Gilman, 13 Mass., 158 1 19
Brown v. Butler, 99 Mass., 179 275
Brown v. Salisbury, 1 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, 156 470
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 4J7
Brown v. Davies, 3 T. R., 80 302
Brown v. DeWinton, 6 Man. G. & S., 336 305
Brown v. Jordhall, 32 Minn., 135 50
Brown v. Leckie, 43 111., 497 452
Broughton v. Manchester Water Wks., 3 B & Aid., 1 128
Bromage et al. v. Lloyd et al., 1 Exchequer Rep., 32 278
Bromley v. Frazier, 1 Strange, 441 375
Brough v. Parkings, 2 Ld. Raym., 993 351
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) 2584, 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, 1 1 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., 112 87
Bull v. Bank, 115 l). 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. 40?
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, 1 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., yy 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. Beg 465
TABLE OF CASES. 6lJ
c
Cabot Bank v. Morton, 4 Gray, 156 318
Cady v. Shephard, 12 Wis., 639 274
Cady v. Bradshaw, 1 16 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,u Ohio St., 172 172
Capron v. Capron, 44 Vt., 410 81, 106
Cape Ann Nat. Bk. v. Burns, 129 Mass., 596 402, 407
Carlon v. Kenealy, 12 Mes. & Wei., 139 94
Carlos v. Fancourt, 5 D. & E., 482 102
Carter 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. Dutton, 1 Selw., 320 66, 70, 72
Catron v. I. & 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, 101 Ind., 500 73
Cayuga Bank v. Hunt, 2 Hill, 635 366, 466
Central Bank v. Davis, 19 Pick., 376 296
Chadwick v. Allen, 1 Str., 607 102
Chaddock v. Vaness, 35 N. J. L, 517 258, 275
Chaffee v. Jones, 19 Pick., 260 269
Challiss v. McCrum, 22 Kan., 157 299, 318
Chalmers v. Lanion, 1 Camp., 383 445
Chambers v. Union Bank, 78 Pa. St., 205 240
Chandler v. Carey, 64 Mich., 237 :...//, 78
Chandelor v. Sopus Cro. Jac, 4 324
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 (X. 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. Xoyes, 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, 7^
Childs v. Monins, 2 Brod. & Bing., 460 280
Chipman v. Tucker, 38 Wis., 43 153
Chipman v. Foster, 1 19 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; 85 111., 523 106
City of Aurora v. West, 22 Ind., 88 333
City of Memphis v. Brown, 5 Am. L. T., 424 454
Citizens Nat. Bk. v. Importers Bk., 119 X. Y., 195 453
Clanser v. Stone, 29 111., 1 16 93
Cleveland v. Sherman, 40 Ohio St., 176 460
Claflin v. Boorum, 122 X. Y., 385; 25 X. 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. Pease, 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. & Aid., 660 79
Clark v. King, 2 Mass., 524 84
Clough v. Holden, 115 Mo., 336 367
Clodfelter v. Cox 251
TABLE OF CASES. 619
Carlos v. Fancourt, 5 Term. R., 482 77
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, 20 Johnson, 637 172
Coffman v. Campbell, 8 111., 98 182, 185
Coggill v. Am. Ex. Bank, 1 Comst, 77 236
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, 1 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. Saver, 1 Barn., 303 107
Colehan v. Cooke, Willes' Reports, 393 78, 89, 95
Collins v. Merrill, 2 Mete. (Ky.), 163. . : 423
Collins v. Gilbert, 94 U. S., 53 152
Collier v. Mahan, 21 Ind., no 294
Collins v. Martin, 1 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, 1 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, 103
Conrad v. Kinzie, 105 Ind., 287 154
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., 259 450
Continental Nat. Bk. v. Cornhauser, 37 111. App., 475 453
Continental Bank v. Strauss, 137 N. Y., 148 124
Continental N. B. v. Townsend, 87 N. Y., 10 444
Conover v. Earle, 26 Iowa, 169 332
Conner v. Martin, 1 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. (X. 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. Fayton 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, 237
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. Rabcock, 42 X. 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
Ccunty, etc., v. Auckley, 90 Mo., 126 168
Cowing v. Altman, 71 N. Y., 435 420, 443
Cowie v. Stirling, 6 E. & B., 333 (88 E. C. L. R.) 1 19
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 A2?
Cox v. Bank, 100 U. S., 716 368
Cox v. Bunn, 6 Johnson, 326 108
Cox v. Troy, 5 Barn, ft Aid., 474 200, 282
Cox v. Liotard, H. 24, Geo. Dougl., 167, N. (55) 97
Cox, etc., v. U. S., 6 Pet., 173, 203 47°
Covle v. Smith, 1 E. D. Smith, 400 382
Crabtree v. May, 1 B. Mon., 289 124
Craig v. Brown, 1 Peter's C. C. Rep., 174 307
Critcher v. Holleway, 64 N. C, 526 42^
Crutchley v. Mann, 5 Taunt., 529 113
Cramlington v. Evans, 1 Showers, 5 168
Crawford v. Cully, Wright (Ohio R.), 453 57
TABLE OF CASES. 62 1
Crawford v. Morrell, 8 Johns., 253 425
Critchlow v. Parry, 1 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
Crooker v. Holmes, 65 Me., 195 80, 106
Crosby v. Grant, 36 N. H., 273 444
CrQsby v. Tanner, 40 Iowa, 136 254
Cros'swait v. Boss, 1 Humph. (Tenn.), 23 127
Crossmore v. Page, 73 Cal., 213 103
Cruchley v. Clarence, 2 M. & S., 90 (in) 113, 120
Crutchley v. Mann, 5 Taunton, 529 120
Culbertson v. Nelson, Gl N. W. Bep., 854 77
Culver v. Leary, 19 La. Ann., 202 273, 274
Culver v. Hide and Leather 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. Lockwood, 40 Conn., 349 59, 69, 462
Curtis v. Sprague, 51 Cal., 239 (1876) 295, 309, 328
Cushing v. Field, 70 Me., 50 78
dishing v. Gore, 15 Mass., 69 452
Cusley v. Roub, 16 Wis., 616 2yj
Cutter v. Reynolds, 64 111., 321 449
Davidson v. Cooper, 11 M. & W., 778 401
Davis v. Wilkinson, 10 A. & E., 98 89
Darrach v. Savage, 1 Shaw, 155 381
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, N. S., 16; 6 Queen's Bench,
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., 380 330
Davis Sewing Machine Co. v. Jones, 61 Mo., 409 472
Daniels v. Kyle et al., 1 Kelley (Ga.), 304 454
Davis Mach. Co. v. Best, 105 N. Y., 59 446
Daggett v. Daggett, 124 Mass., 149 73
62 2 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. 77
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, 1 470
Depcw v. Humphreys, 20 Mart. (La.), 1 463, 465, 467
DeForest v. Frary, 6 Cow., 151 57, 78, 79
DeWolfe v. French, 51 Me., 420 80
DeHavilland v. Bowerbank, 1 Camp., 50 287
Dennistown v. Stewart, 17 Flow., 606; 12 Curtis, 722
358» 366> 367
Deny v. Reed, 40 Barb., 16 405
Derby v. Thrall, 44 Vt., 413 400
Deering v. Chapman, 22 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
Dehrens v. McKenzie, 23 Iowa, 333 133
Delaware Bank v. Jarvis, 20 X. Y., 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 72
Dixon v. Nwttall, 6 C. & P., 320 102
Digberty v. Daniel, 5 Yerger, 451 85
Dietrich v. Bayhi, 23 La. An., 767 91
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. Bk., 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, 1 Denio, 367 305
Douglas v. Waddle, 7 Ohio, 413 300
Dougal v. Chowles, 5 Day (Conn.), 511 185
Draper v. Snow, 20 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, 1 Camp., 100 411
Dun v. Weston, 71 Me., 270 442
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, 101 Md., 474 106
Dunscomb v. Bunker, 2 Mete, 8 465
Durant v. Bunta, 5 Dutch (N. J.), 623, 635 294
Dwight v. Newell, 15 111., 333 131
Dykers v. Leather Bk., 11 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, ^2 la., 481 445
Eastman v. Commonwealth, 4 Gray, 416 458
Eastern R. R. Co. v. Benedict, 5 Gray, 561 162
Easterly v. Barber, 66 X. 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, 1 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, 101 111., 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. Finnegan, 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. Funk. 8 Ban*., 468 437
Erwin v. Downs, 15 N. Y., 575 282, 311
Ernst v. Steckman, 74 Pa. St., 13 81, 88
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 X. Y., 575 327
Espy v. Cincinnati First Nat. Bk., 18 Wall., 604 182
Estes v. Tower, 102 Mass., 65 104
Esdaile v. Sowerby, 1 1 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, 1 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., 449 309
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, 1 Allen, 477 405
Faris v. Wells, 68 Ga., 604 250
Farmers' Nat. Bk. v. Sutton & Co., Fed. R., 191 91
Fanning v. Cousequa, 17 Johns., 511 334, 470
Fairbanks v. Metcalf, 8 Mass., 230 153
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., 578 472
Farmers' Bank vs. Wasson. 48 la., 338 462
Farsen v. Hubbard, 55 N. Y., 465 258
Farmer v. Perry, 70 la., 358 471
Fenno v. Gay, 146 Mass., 118 105, 313, 330
Fenner v. Mears. 2 Blak. Rep., 1269 209
Fell v. Cook, 44 la., 485 431
Ferris v. Bond, 4 Barn. & Aid., 697 78
Fearing v. Qark, 16 Gray, 74 153
Fernandey v. Glynn, 1 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 36
Featherstone v. Hutchison 425
Fegley v. McDonald, 89 Pa. St., 128 450
Fenning 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, 1 Esp., 425 66, 72, 73, 462
Fisher v. Rieman, 12 Md., 497 327
Fisher v. State Bank, 7 Black., 610 107
Field v. Xickerson, 13 Mass., 131 312
Finley v. Shirley, 7 Mo., 42 68
F"isk 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
First 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., 524 161
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. \V. 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., 561 208
First National Bank v. County Commissioners, 14 Minn.,
77 (100 Am. 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. II., 208 8r)
Flenry v. Tufts, 25 111. App., 101 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. t8 Pick., 63 256. 277
Foltier v. Schroeder. 10 La. Ann., 12 312
Foreman v. Beckwith. 7$ 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
Foy v. Blackstone, 31 111., 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
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, 1 Salk., 2S3, 284 35, 37, 40
Forbes v. Epsy, 21 Onio St., 474 152
Foster v. Shattuck, 2 N. H., 446 119
Foy v. Blackstone, 31 111., 538 153
Ford v. Phillips, 83 Mo., 530 442
Foster v. Fuller, 6 Mass., 58 131
Ford v. Beech, 1 1 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, 1 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, 59 255, 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
Friedlander v. Texas By. Co., 130 TJ. 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 X. Y., 112. 311
Franklin 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. 298
Freeman's Bank v. Puckman, 16 Grat., 126 469
Fullerton v. Hill, 48 Kan., 558 275
Fullerton v. Sturges, 4 Ohio St., 529 401
Fuller v. Smith, 1 C. & P., 197 236
Gr
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., 208 342
Gates v. Beecher, 60 N. Y., 578 380, 382
Garland v. Scott, 15 La. An., 143 72
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, 1 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. Wider, 10 C. B., 690 367
Gee v. Saunders, 66 Tex., 333 441
German Nat. Bk. v. Studley, 1 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, 31 111., 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., 72 Ala., 566 151
Gilford v. Hardell, 88 Wis., 538; 43 Am. St. Rep., 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
Oompertz v. Bartlett, 24 Eng. L. & E. Rep., 156
818; 319, 321, 822
Gould v. Segee, 5 Duer. (N. Y.), 268 144, 148
Gordon v. Adam, 127 111., 223 150, 151
Goss v. Nelson, 1 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, 1 C. B., 543 72
Goddard v. Lyman, 14 Pick., 268 437
Goodwin v. Bobarts, L. R. 10, Ex. 76 21
Goupy v. Harden, 7 Taunton, 159,163 314
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. G, 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, 712 312
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. Vaughn, 3 Burr., 15, 16 120, 438
Grange v. Reign, 08 Wis., 552 450, 451
Gray v. Milner, 8 Taunt., 739 119, 197, 198, 199
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., 263 407
Green v. S. Kipworth, 1 Phil., 53 48
Gray v. Bowden, 23 Pick., 282 69, 73
39
630 TABLE OF 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. Logue, 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, 1 Esp., 245 66
Guthrie v. Murphy, 4 Watts (Pa.), 80 430
Gordon v. Rundlet, 28 X. H., 435 69, y2, 84
Good v. Martin, 95 T7. $., 90 275, 471
Hay v. Ayling, 16 Q. B., 431 420, 428
Hawkins v. Cardee, Salk., 65 192
Hall v. Toby, no Pa. St., 318 105, 257
Hall v. Farmer, 5 Denio, 484 167
Hall v. Fuller, 5 Barn. & Tress., 750 234
Hale v. Danforth, 46 Wis., 555 293
Hammond v. Hastings, 134 U. S., 401 462
Harrop 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
Haven v. Grand Junction R. R. Co., 109 Mass., 88 455
Harker v. Anderson, 21 Wend., 372 450
Harvey v Towers, 6 Ex., 656 411
Hall v. Wilson. 16 Barb., 548 149, 418
Hasey v. White Pigeon Co., 7 Doug. (Mich.), 193 184
Hance v. Miller, 21 111., 636 296, 297
Hall v. First Nat. Bk 183
Hammond v. American Mut. Life Ins. Co., 10 Gray, 307. . . . 108
Hague v. French, 3 B. & P., 173 163, 164
Hassman v. Holscher, 49 Mo., 87 151
Haight v. Naylor, 5 Daily, 219 133
Hathaway 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 6i, 68
Hammond v. Colls, 1 C. B., 916 280
Harvey v. Carchbold, 1 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, 68 111., 231 187
Haines v. Dubois, 30 N. J. L., 259 276
Hawkins v. Cardy, 1 Ld. Raym., 360 257, 332
Hanover Nat. Bk. v. Johnson, 90 Ala., 549 333
Harrison v. Harrison, 8 Ves., 186 278
Harry v. Perrit, 1 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 III, 180 132
Haves 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 AJk., 182 169
Hatch v. Trayes, 1 1 Ad. & E., 702 167
Hart v. Stickney, 41 Wis., 630 103, 443
Haussonllier v. Hartsnick, 7 D. & E., 733 102
Hastings v. Thompson, 54 Minn., 184; 55 N. W. Rep., 968
93i 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 86, 87
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., 76 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., 77 247
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, 1 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 Sandford, 328 ' 55
Horn v. Newton, etc., Bk., 32 Kan., 518 399
Howe v. Hartness, 1 1 Ohio St., 449 72
Howard v. Ives, 1 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, 1 1 How., 177 232
Holmes v. Jacques, 1 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, 1 12 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. Rep., 186 282
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., 114 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, 101 111., 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., 674 369
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 91
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
I
In re King's Estate, 94 Mich., 411, 425; 54 N. W. Bep., 178
105, 830
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
Innes 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 Q. B., 628 124
Ingraham v. Disborough, 47 N. Y., 421 253
Irvine v. Lowry, 14 Pet., 293 (85) 87
Israel v. Douglas, 1 H. Blac, 239 210
Israel v. Israel, 1 Campb., 499 66, 72, 73, 462
T
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, 1 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., 777 78
Jefferies v. Austin, 1 Strange, 674 77
Jeffries v. Evans, 6 B. Mon., 119.. 253
Jeffery v. Walton, 1 Stark, 267 48
Jenkins v. Bass, 88 Ky., 397 118
Jenny v. Hale, 8 Mod., 265 77
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) 280, 282
Jennison v. Stafford, 1 Cush., 168, 170 168
Jester v. Hopper, 8 Eng. (Ark.), 43 119
Jones v. Nicholl, 82 Cal., 32 330
TABLE OF CASES. 635
Jones v. Waite, 35 E. C. L., 130 423, 425
Jones v. Dow, 142 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. Bep., 515 474
Johnson v. Frisbie, 15 Mich., 286 90
Johnson v. Speer, 92 Pa. St., 227 91, 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, 210
Jordon v. Gillen, 44 U. S., 424 250
Johnston v. May, 76 Ind., 293 399
Johnson v. Way, 27 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 yy, 100, 192
Johnson v. Johnson, Minor (Ala.), 263 61, 68
Johnson v. Mitchell, 50 Tex., 212... .258, 295, 296, 297, 298, 806
Johnson v. Donnell, 90 N. Y., 1 298
Johnson Harvester Co. vs. McLean, 57 Wis., 258 403, 407
Johnson v. Laflin, 103 U. S., 804 462
Johnson v. Henderson, 76 N. Car., 22y 86
Julian v. Shobrooke, 2 Wilf., 9 101
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. Williams, 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., 212 445
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, 06 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., 360 121
Kirk v. Burton, 9 M. & W., 284 127
Kirkman v. Benham, 28 Ala., 501 131
King v. Thorn, 1 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., 418; 18 Am. Rep 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. 637
Knox v. Clifford, 38 Wis., 651 165
Knight v. Jones, 21 Mich., 161 118, 120
Kost v. Bender, 25 Mich., 515 445, 446
Kohn v. Watkins, 26 Kan., 691 152
Kuler v. Williams, 49 Ind., 504 255
Kuntz v. Temple, 48 Mo., 75 105
Kulenkamp v. Groff, 71 Mich., 675 259
Lacy v. Holbrook, 4 Ala., 18 87
Lansing v. Gaine, 2 Johns., 300 333
Lambert v. Pack, 1 Salk., 127 379
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, 1 Ld. Raym., 443 313, 373, 378, 381
Lawrence v. Russell, 77 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., 101 471
Larned v. Johnson, 9 Allen 133
Laird v. Warren, 92 111., 204 91
Larsen v. Breene, 12 Colo., 480 453
Lambert v. Pack, 1 Salk., 127 313
Lancaster v. Baltzell, 7 G. & J., 468 258
Lawrence v. Furrell, 77 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 Am. Dec, 822
208, 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, 1 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., 838 169
Lester v. Paine, 39 Barb., 616 275
Lee v. Pile, 37 Ind., 107, no 258, 322
Levis v. Young, 1 Mete. (Ky.), 197 119
Leonard v. Vredenburgh, 8 Johns., 29 471
Lee v. Selleck, 33 N. Y., 615 470
Lenox v. Prout, 3 Wheat., 524 472
Leitch v. Wells, 48 N. Y., 586, 613 46s
Lester v. Garland, 15 Ves., 248. 107
Lee v. Balcom, 9 Colo., 216 72
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, 1 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 Hill., 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, 1 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, 1 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 CASES. 639
Lovell v. Everton, 1 1 Johns., 52 309
Long v. Stephenson, J2 N. Car., 569 381
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, 11 Mass., 97 133*
Lowden v. Nat. Bk., 38 Kan., 533 403
Lobdell v. Baker, 1 Met., 193 318, 319, 320, 327
Loyd v. Howard, 152 B., 995 302
Lugneer v. Prosser, 1 Hill, 259 68
Lumley v. Palmer, 1 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, 1 Q. B., 29 ; E. C. L. R., Vol. 41 410
Lynch v. Dodge, 130 Mass., 458 124
:m:
Martin v. Ch^untry, 2 Strange, 271 77, 85, 86, 89
Masters v. Miller, 4 Term Rep., 320, 346 405
Martin v. Wade, 37 Cal., 168 428
Mason v. Morgan, 2 Ad. & El., 30 431
Matthews v. Poythress, 4 Geo., 287 440
Magee v. Badger, 34 N. Y., 247 440
Marshall v. B. & O. R. R. Co., 16 How., 314 428
Marzetti v. Williams, 1 Barn. & Adol., 415 453
Marine National Bk. v. National City Bk., 59 N. Y„ 67 247
Maxwell v. Morehart, 66 Ind., 301 92
Maynard v. Mier, 85 Ind., 317 92
Maiden Bk. v. Baldwin, 13 Gray (Mass.), 154 173
Marrigan v. Page, 2 Hum. (Tenn.), 247 6i
Marine Bk. v. Rushmore, 28 111., 403 84
Mason v. Metcalf, 8 Baxt., 440 57
Mahoney v. Fitzpatrick, 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., 424 183, 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., 170 470
Mason v. Frick, 105 Pa. St., 162 50
^4° TABLE OF CASES.
Maxwell v. Agnew, 21 Fla., 1154 71
Master v. Miller, 4 Term B., 820 240, 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., 53 298
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, 2J Ala., 497 188
Mason v. Rumsey, 1 Camp., 384 199
Marvine v. Hymers, 12 N. Y., 223 % 128
Martin v. Cole, 104 U. S., 30 258
Mason v. Hunt, 1 Doug., 296 (1779) 201, 219
Maxwell v. Vansant, 56 111., 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 Mich., 421 106
Matteson v. Morris, 40 Mich., 55 251
Mansfield v. Felton, 13 Pick., 206 124
Martin v. Boure, Cro. Jac., 6 23, 32
Manett v. Eg. Ins. Co., 54 Me., 537 103
May v. Cooper, Fost., 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
Merchants1 Bank v. Hewit, 3 la., 93 459
Merchants' Bank v. Union, Etc., Co., 89 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
Head v. Young, 4 Term. Bep., 28 240
Mechanics' etc., Bank v. Schuyler, 7 Con., 337 119, 165
Meachem v. Pinson, 60 Miss., 226 91
TABLE OF CASES. 64 I
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., 322 120
Merrit v. Benton, 10 Wend., 116 466
Memphis, etc., v. Mitchell, 17 Ga., 570 70
Merritt v. Benton, 10 Wend., 1 16 294
Mechanics' 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,. 532 330
Melanotte v. Teasdale, 13 M. & W., 213 62, 70
Mendelhall v. Banks, 16 Ind., 284
Miller v. Bank of U. S., 1 1 Wheat, 431 360
Mix v. Insurance Co., n Ind., 117 465
Miltenberger v. Spalding, 33 Mo., 421 382
Minturn v. Ladue, 23 Howard, 435 130
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., 208 460, 467
Miller v. Delamaker, 12 Wend., 433 125, 274
Mills v. Barney, 22 Cal., 240 311
Miller v. Austin, 13 How., 218 71, 72
Miller v. Bace, 1 Bur. King's Bench Rep., 452
27, 32, 110, 243, 331, 389, 438, 440, 441, 458
Mitchell v. Catchings, 23 Fed. Rep., 710 443
Miller v. Finley, 26 Mich., 249 433
Mitchell v. Puller, 15 Pa. St., 270 296, 304, 305
Miller v. Einley, 26 Mich., 249 44a
Minet v. Gibson, 3 T. B., 481 389, 393
Miller v. Neihaus, 51 Ind., 401 182
Hinot v. Buss, 156 Mass., 458 453
Miner v. Robinson, 12 Am. D., 694 259
Mills v. Barber, 1 Mees. & W., 425 427
Miller v. Harden, 32 Ala., 30 423
•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., n 165
Miller v. Thompson, 3 M. & G., 576; E. C. L. R., vol. 42. . . 114
Mitchell v. Degrand, 1 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. Larned, 103 111., 562 299, 300
Molton v. Camroux, 2 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, 101 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 Mass., 436 268
Morley v. Culverwell, 7 Mess. & W., 174 330
Morris v. Lea, Ld. 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
Morris v. Way, 16 Ohio, 469 4^3
Monson v. Tripp, 81 Me., 24 168
Moffat v. Edwards, 1 Car. & M., 16 103
Morris v. Richards, 45 Law. T. R., 210 105
Molloy v. Delves, 7 Bing., 428 168
Mohawk 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, 1 Dal., 193 3°3
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, 1 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, 00 Ala., 553; 24 Am. St. Bep.,
832 92, 461
Moody v. Findley, 43 Ala., 167 300
Molloy v. Shute 393
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
HI., 33 254
Murray v. Lardner, 2 Wall., 121 438, 439
Musson v. Lake, 4 Howard, 262 386
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. Mon., 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., 230 441
McCruden v. Jonas, 173 Pa. St., 507 173
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 (K.
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., 250 150
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, 1 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
McVey v. Cantrell, 70 N. Y., 295 125, 126, 431
McWilliams v. Webb, 32 Iowa, 577 250
Nat. Bk. v. Grant, 71 Me., 374 300
National Bk. v. Kirby, 108 Mass., 497; 30 Am. Rep., 702. .
104, 284, 443
Nat. Bank v. Ringel, 51 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., 298 456
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., 77. . 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., 4^0 183
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., 1. .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., 347 328
O'Kell v. Charles, 34 L. T. Rep., 422 162
O'Rouke v. O'Rouke, 43 Mich., 58 154
Oates 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, 1 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., 472 470
Orr v. Lacey, 2 Douglass, 230 425
Oridge v. Sherborne, 11 M. & W., 374 94, 103
Orr v. Maginnis, 7 East, 359 351
Osborne v. Hubbard, 20 Oregon, 318 50
Osborn v. Kistler, 35 Ohio St., 50 50
Osborn 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 91
40
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
Parkhurst v. Vail, 73 111., 343 471, 472, 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.) 73
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, 1 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 1 19
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, 1 Dougl., 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, 1 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. F. Smith (Pa.), 59; 67 Penn. St., 53
403, 405, 406, 440
Phillips v. Paget, 2 Ark., 80 122
Phoenix Ins. Co. v. Allen, 1 1 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, 1 14 E. C. L. R., 694 152
Phillips v. Frost, 19 Me., 77 186
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., 129 401
Pierson v. Dunlop, Cowp., 574 101, 217
Pinney v. Adm'rs, 8 Wend., 500 257
Pinkney v. Hall, 1 Salk., 126 191
Pirviance v. Jones, 120 Ind., 162 152
Pitts v. Fogelsing, 37 Ohio St., 676 300
Pitkin v. Flanagan, 23 Vt., 160 300
Pickering v. Dawson, 4 Taunt., 779 325
Pine v. Smith, 1 1 Gray, 38 444
Plumer v. Lyman, 49 Me., 229 183
Planter's Mill Co. v. Merchants' Bk., 78 Ga., 582 461
Potter v. Tollman, 35 Barb., 182 463
Powell v. Watters, 8 Cow., 669 152
Pond v. Waterloo, 50 Iowa, 695 294
Poorman v. Mills, 35 Cal., 118 72
Porter v. Cushings, 19 111., 572 331
648 TABLE OF CASES.
Powers v. Finnie, 4 Call. (Va.), 411 298
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. Hemes, 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, 198
Poplewell v. Wilson, 1 Strange, 263 102, 167
Porter v. Porter, 51 Me., 376 102
Powell v. Monnier, 1 Atk., 611 (1737) 185, 209
Pollock v. Maison, 41 111., 516 338
Pott v. Clegg, 16 Mees. & W., 321 29
Pollard v. Brown, 57 Ind., 234 450
Prentsman v. Baker, 30 Wis., 644 152
Pritt v. Fairclough, 3 Campb., 305 366
Prescott Bank v. Caverly, 7 Gray, 217 282
Price v. Trusdell, 28 N. J. E. R., 200 293
Preston v. Whitney, 23 Mich., 260. . .-. 89
Protection, etc., Co. v. Bill, 31 Conn., 204 79
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., 33 390
Prather v. McVoy, 8 Mo., 661 84
Pratt v. Eads, 1 Blackf. (Ind.), 82 104
Price v. Neal, 3 Burr., 1855 228,234, 285, 237. 239, 390
Pridge v. Sherborne, 1 1 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. Cary, 1 Mete, 369 260
Raymond v. Sellick, 10 Conn., 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 Com. Law, 161 ; 17
C. B., 161 439, 440
Ray v. Tibbs, 50 Vt., 688 430
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, 1 Den. Cr.C, 208 159
Rex. v. Revett, Byles on Bills, 8th ed., 124 v 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., 388 364
Rex v. Hales, 17 How., 161 411
Reed v. Rorak, 14 Tex., 329 161
Rex v. Richards, R. & R. C. C, 193 116
Read v. McNulty, 12 Rich., 445 93
Rex v. Randall, Russ. C. C, 185 116
Rex v. Adderley, 2 Doug., 463, 464 107
Reading v. Beardsley, 41 Mich., 123 124
Rex v. Clark, Russ. & R., 181 159
Rex v. Hart, 6 C. & P., 106 158
Rex v. Bigg, 1 Strange, 18 276
Redington v. Woods, 45 Cal., 406, 418 232, 247, 311
Rex v. Bigg, 3 Peere William's R., 419; 1 Stange, 18
262, 263, 278
Rex. v. Lambton, 5 Price, 442 279
Rhodes v. Jenkins, 18 Colo., 49 302, 311
650 TABLE OF CASES.
Bhodes v. Lindley, 3 Ohio, 37 (14 Am. Dec., 422) 88
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, 1 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. Greep, 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, 1 1 Ad. & E., 213 71
Roberts v. Hall, 37 Conn., 205 445
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 4^
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, 141 Mass., 231 441
Robarts v. Tucker, 16 Q. B.f 560 247
Robertson v. Kensington, 4 Taunt., 30 297
Roberts v. Peake, 1 Burrows, 323 57, 102
Roman v. Terna, 40 Tex., 306 71
Roberts v. Wood, 38 Wis., 60 153
Rogers v. Colt, 6 Hill, 322 277 ', 278
TABLE OF CASES. 65 1
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
Roffey v. Greenwell, 10 Al. & El., 222 79
Roberts v. Smith, 58 Vt., 494 84
Row v. Dawson, 1 Vesey, 331 250
Rossiter v. Rossiter, 8 Wend., 494 132
Robertson v. Sheward, 1 M. & G., 51 1 120
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, 1 Burr., 1077 72, 469
Robertson v. Deatherage, 82 111., 511 474
Rodabaugh v. Pitkins, 46 la., 544 472
Roberts v. Hawkins, 70 Mich., 566 472
R. R. Co. v. Schutte, 103 U. S., 118 294
Russell v. Langstaffe, Dougl., 514 164, 390, 419
Rushton 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
Ruff v. Webb, 1 Espinasse, 127 54
Russ v. Smith, 19 Tex., 171 ; 70 Am. Dec, 327 328
Russell v. Phillips, 14 Q. B., 900 195
Russell v. Powell, 14 M. & W., 418 55
Rundell v. Keeler, 7 Watts, 237 122
Russell v. Swam, 16 Mass., 314 274
Runnells v. Gerner, 80 Mo., 477 124
Rumsey v. Briggs, 139 N. Y., 323 189
Rymes v. Clarkson, 1 Phil., 22 48
Ryhiner v. Feickert, 92 111., 305, 311 273, 274
Ryan v. May, 14 111., 49 255
652 TABLE OF CASES.
Sanderson v. Piper, 5 Bing., 425 94
Sarsfield v. Witherley, 1 Show., 125 76
Saxton v. Stevenson, 23 Up. Can. C. P., 503 93
Salter v. Burt, 20 Wend., 205 108
Sando v. Smith, 1 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, 11 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., 18 108
Sayre v. Wheeler, 31 Iowa, 112 154
Sands v. Wood, 21 Iowa, 263 256, 277
Sackett v. Spencer, 29 Barb., 180 68
Savannah Nat. Bank v. Haskins, 101 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 1 19
Scanlon v. Cobb, 85 111., 296 124
Schmittler v. Simon, 101 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, 101 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., 544 159
Scott v. Calpin, 139 Mass., 529 296
TABLE OF CASES. 653
•
Scott v. State Bank, 9 Ark., 36 153
Seavers v. Phelps, 1 1 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, 1 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., 1 85
Shaw v. Camp., 160 111., 425 106, 169
Shelby v. Judd, 24 Kan., 166 277
Shaw v. Clark, 49 Mich., 384. .'. 446
Shuttleworth v. Stephens, 1 Camp. R., 407 « . . 1 19
Shirk v. Shultz, 1 13 Ind., 571 124
Sheldon v. Haxtun, 91 N. Y., 124 463, 470
Shepard v. Hawley, 1 Conn., 367 272
Sheuton v. James, 5 Q. B., 199 81
Shipley v. Carroll, 45 111., 285 144, 149
Shoulters v. Allen, 51 Mich., 530 133
Shutts v. Fingar, 100 N. Y., 539 382
Shed v. Brett, 1 Pick., 401 360
Sheldon v. Haxton, 91 N. Y., 124 333
Shaw v. Sullivan, 106 Cal., 208 376
Shanucker v. Sibert, 18 Kan., 104 330
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, 195
Shaw v. Spencer, 100 Mass., 382; 97 Am. Dec, 107. . . .133, 462
Shank v. Butsch, 28 Ind., 19 160
Shaw v. B. B. Co., 100 U. 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. Garke, 17 Conn., 519 255
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. B., 123 67
Smead \r. Indianapolis, etc., 11 Ind., 105 301
Smithers v. Junkers, 41 Fed. Sep., 101 80, 106
Sm'alley v. Wight, 44 Me., 442 258, 302
Smith v. Braine, 16 Q. B., 201 427
Smith v. Livingston, 1 1 1 Mass., 342 440
Smith v. Chester, 1 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, 462
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, 2 Starkie, 375; 3 English Common Law
Reports, 452 00
Smith v. Pickering, Peake, N. P. C, 50 281
Smith v. Boheme, 2 Ld. Raym., 1362 ioo, 193
Smith v. Poillion, 23 Hun., 632 367
Smith v. Smith, 1 F. & R, 539 72
Smith v. Abbot, 2 Str., 1 152 101
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., 180 205, 304, 305, 307
Smith v. Lockridge, 8 Bush., 425 199
Smith v. Milton, 133 Mass., 369 189
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, 1 17 Ind., 71 416-
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
Spurgln v. McPheeters, 42 Ind., 527 56, 89
Sproat v. Matthews, 1 D. & E., 182 101
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 1
Storm v. Sterling, 3 E. & B., 832 (yy E. C. L. R.) 119, 120
Btoessiger v. The Southeastern By. Co., 3 Ellis & Blackburn
(Q. B.) 549 112, 118, 155
Stewart v. State, 62 Md., 412 459
State v. Loomis, 2y 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., 299 134
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, 1 19 Mass., 137 78, 106
Stewart v. Lispenard, 26 Wend., 299 124
Stephens v. Weldon, 151 Pa. St., 520 254
6$6 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 J2
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.f 24 106
Stewart v. Smith, 17 Ohio St., 83 450
Stanley v. Nelson, 28 Ala, 514 423
Stevens v. Harman, 86 Mich., 307 256
Steere v. Trobilock et al., 66 N. W. Rep., 342 256
Stevens v. Blunt, 7 Mass., 240 106
Staples v. Nott, 65 Am. D„ 651 333, 463, 470
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., 158 399
Sulsbacher v. Bank, 86 Tenn., 201 . 368
Sussex Bk. v. Baldwin, 2 Harrison (N. J.), 487 381
Sumner v. Gay, 14 Pick., 311 270
Sutherland v. Reeve, 151 111., 384 254
Suffolk Bk. v. Boston, 149 Mass., 305 446
Sutton v. Beckwith, 68 Mich., 303 416
Summers v. Hutson, 48 Ind., 230 253
Swift v. Whitney, 20 111., 144 87
Sweetland v. Creigh, 15 Ohio, 1 18 87
Sweeting v. Barrett, 1 Stark, 106 120
Swope v. Boss et al., 40 Fa. St., 186; 80 Am. D., 567 178, 182
Swift v. Tyson, 16 Pet., 16 172, 294, 417, 437, 439, 444
Swan v. Clark, 110 TJ. S., 602 461
Swan v. North British Australasian Company, 2 H. & C,
184 4i3> 4i6
Swanzey v. Parker, 50 Pa. St., 441 327
Swall v. Clarke, 51 Cal., 227 441
Sweetzer v. French, 2 Cushing, 309 301
Syracuse, etc., Co. v. Collins, 1 Abb. N. C, 47 381
Syderbottom v. Smith, 1 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., 1 1 1 169
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, 1 Strange, 399 160
Talliaferro's Ex'rs. v. King's Admr., 9 Dana, 331 (35 Am.
Dec, 140) 284
Taylor v. Surget, 21 N. Y., 1 16 278
Tapping v. Duffy, 47 Ind., 571 332
Tenney v. Prince, 4 Pick., 385 270
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, 1 Salk., 126 39
Thoroughgood's Case, 2 Co. Rep., 96 412, 415
Thomas v. Williams, 10 Barn. & Cress., 664 425
Thayer v. Daniels, 1 13 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., 202 319
The Goshen Bank v. Bingham, 118 N. Y., 347 447
Thatcher v. Goff, 13 La., 363 342
Thornton v. Rankin, 19 Mo., 193 133
Thomas v. Watkins, 16 Wis., 549 143
Tibbits v. Gerrish, 25 N. H., 41 84
Tindal v. Brown, 1 D. and E., 167 97
Tift v. Tift, 4 Denio, 175 122
Tittle v. Thomas, 30 Miss., 122 120
Tinsley v. Hoskins, 1 1 1 N. C, 340 92
'6$8 TABLE OF CASES.
Tilden v. Blair, 21 Wall., 241 429
Ticonic Bank v. Smiley, 2J 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., 191 454
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. Biley, 46 N. H., 300 468
Transportation Co. v. Kilderhouse, 87 N. Y., 430 470
Trask v. Martin, 1 E. D. Smith, 506 104
Trudy v. Farrar, 32 Me., 225 132
Tripp v. Curtenius, 36 Mich., 494 72
Trueman v. Hurst, 1 T. R., 40 433
Trust Co. v. Bank, 101 U. S., 68 441, 447
Trovinger v. McBurney, 5 Cowen, 253 423
Trustees v. Lewis, 34 Fla., 424; 43 Am. St. Bep., 203 454
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 B. B. 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., 1 383
Turnbull v. Bowyer, 40 N. Y., 456 311, 330
Tyler v. Trahue, 8 B. Mon. (Ky.), 306 470
Ubsdell v. Cunningham, 22 Mo., 124 81
Ulster Bank v. McFarlan, 3 Den., 553 183
Union Bank v. Beirne, 1 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 U. 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., 496 452
U. S, v. Parker, 1 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, 101 N. Y., 563 453
Vinton v. King, 4 Allen, 562 103, 443
Vincent v. Horlock, 1 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., 2j6 428
Wayne Agricultural Co. v. Cardwell, 73 Ind., 535 417
Wallace v. Loomis, 97 U. S., 146 461
Wade v. Wittington, 1 Allen, 561 405
Warring v. Early, 2 El. & B.f 763 405
Walmefly v. Child, 41
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., 245 350
Walker v. McDonald, 2 Exch., 527 295
Watson, etc., v. Evans, 1 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, 1 1 Mod., 190 195
Walker v. Walker, 66 Vt, 285 127
Waugh v. Russell, 1 Marshall 106
Ward v. The Bank of K., 7 Mon. (Ky.), 93 132
Waterbury v. Andrews, 67 Mich., 282 125
Waithman v. Elzee, 1 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, 1 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, 1 Strange, 214 188
White v. Cushing, 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, yj 111., 351 103, 106
White v. Richmond, 16 Ohio, 5 ". . 87
White v. Stoddard, 11 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, 1 1 L. J. Exch., 168 380
Wheeler v. Milkr et al., 2 Handy, 149 314
TABLE OF CASES. 66l
Whithed v. McAdams, 18 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., 92 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, 1 E. D. Smith, 1 199
Whistler v. Forster, 14 C. B. (N. S.), 258 441
Wheatley v. Williams, 1 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, 77 132
Williams v. Williams, 1 Carth., 269 25
Williams v. Foster, 114 Ind., 167 73
Williams v. Forbes, 1 14 111., 167 169
Williams v. Urnston, 35 Ohio St., 296 126
Wilson v. Senier, 14 Wis., 380 383
Williams v. Harrison, Carth, 160 433
Wilson v. Campbell, 68 N. W. Rep., 278 94
Wilson v. Clements, 3 Mass., 9 213
Wilson v. Mechanics' Bank, 45 Pa. St., 494 442
Wilson v. Vysar, 4 Taunt., 288 325
Wise v. Charlton, 4 A. & E., 786 89
Wilkinson v. Johnson, 3 Barn. & Cress., 428 237
Wilkinson v. Lutwidge, 1 Strange, 148 237
Wilkinson v. Suteridge, 1 Strange, 648 232
Wilks v. Robinson, 3 Rich. (S. C), 102 106
Wisdom v. Becker, 52 111., 346. 131
Willoughby's Case, 1 Leech, 05 55
Widoe v. Webb, 20 Ohio St., 431; 5 Am. Bep., 664 420
Willis v. Barrett, 2 Stark., 29 (3 E. C. L. R.) 119
Willis v. French, 84 Me., 593 311
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
662 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. 1st 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., 1 182
Willoughby v. Moulton, 47 N. H., 205 160
Wookey v. Pole, Barn. & Aid., 1 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. I*., 323 56
Woodworth v. 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, 1 1 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 8i, 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, 72 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, 1 Root, 474 423
TABLE OF CASES. 663
Wright v. Shelby et al., 16 B. Mon., 4 153
Wright v. Wright, 1 Ves. R., 41 1 289
Wright v. Dyer, 48 Mo., 525 472
Wynne et al. v. Raikes et al., 5 East., 514 213
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, 1 Salk., 627 189
Young v. Ball, 9 Watts. (Pa.), 139 (1839) 293
Young v. Grote, 4 Bing., 253 403, 410
Young v. Cole, 3 Bingham (N. G), 724 320, 326, 327, 335
Yocum v. Smith, 63 111., 321 407
York v. McNutt, 69 Am. Dec, 607 252
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, 186 n.
ACCEPTANCE,
defined, 180, 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 n,
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 under, 530.
conditional acceptance, 101 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, liability 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 n.
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"55<>-
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, 77.
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, 91 n.
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,
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 money 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, in 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.
m
BILL OF EXCHANGE,
and promissory notes compared, 377.
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-I54-
in escrow, 146, 152, 153.
discount of bill by drawee before acceptance, 178-187.
relation of drawee 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.
CHECKS,
origin, or history of, 28.
defined, 448, 450 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 which the indorser is estopped to deny, 282 11, 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, 77 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. 675
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,
instalment 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 meaning 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 indorsees 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 holidays, 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, 273 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, 408-419, 416 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.
48
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 policy, 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, 248, 450, 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, ^141, 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, 181.
may become an indorsee, 181.
may become an indorser, 181.
may accept supra protest, 181.
may sue prior parties, 181. .
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 holder, 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, Tj 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,
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, 174-175.
see "Bill of Exchange;" "Check;" "Promissory Note."
J
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 delivery 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, 47S"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. l
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, ,
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 indorsees 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 by, 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 may 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. >
6SS 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." 1
forgery of indorsement, 246-247, 312.
accommodation indorser, see "Accommodation," and 29911,
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, 4^9 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,
3JO-3I3* 3io 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. 689
INDORSEMENT,
delivery necessary, 302.
after payment, effect of, 330 n.
mistake in, 33m.
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, 43°-433> 433 n-
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 HOLT'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. 69I
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.
liability 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. 1
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 "money0 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 notict, 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, yy 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.
43
694 INDEX.
NON-ESSENTIALS,
need not contain indicia of negotiability, 174-177.
NON COMPOS 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, 248.
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. 1
how, when, and where it must be given, 360, 361, 367 n,
5i5> 519-
sufficiency of notice, 360, 516, 519.
indemnification 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.
effect 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 liable, 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 n.
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 sufficient, 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 INLEX.
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 /Acceptance." )
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 f "Drawee;" "Drawer;" "Drunkenness ;*
"Holder ;" "Infancy;" "Indorsee;" "Guardians;" "Trustees:"
"Indorser;" "Lunacy;" "Maker;" "Married Women;"
"Payee." |
where parties left blank, 1 18 n.
may be described, 119 n.
how designated, 109, no.
PAYEE,
of bill, defined, 1 10 n.
of note, defined, no n.
INDEX. 697
PAYEE,
designation of, no n.
rules concerning, 118 n. ;
payable to fictitious person, in, 112, 118.
competency to indorse, estoppel of acceptor to deny, 233-
240. 1
may refuse partial or conditional acceptance, 195 n.
PAYMENT,
medium of, 54, 83, 84 n.
must not depend upon a contingency, 74, 77 n.
must not be out of a particular fund, 77 n.
may indicate a particular fund, 77 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. 1
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 Administrators."
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, 380 n, 510.
by whom and to whom, 351, 379, 383.
effect 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 370383.
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 73 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 11.
given for patent right, 547.
given for speculative purposes, 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. 70I
PROMISSORY NOTE,
accommodation parties, see "Accommodation."
liability of maker, see "Indorsement."
PROMISE TO GIVE,
promise 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.
by 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, 144.
rights of bona fide 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.
(1) 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 transferee, 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.
706 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,
237> 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 valid and subsisting obligation,
310 n. ,
that the abligations of all prior parties are 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. ,
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.
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