THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES m- SCHOOL OF LAW >«' \, C ^ f ^ 'G'^N^e^-/^^'-'^^--^-^^-''^ /M tA..r p n6>lNxns^^ CXvO?<. A TREATISE ON THE LAW OF BILLS AND NOTES, CHECKS, INCLUDING THE TEXT OF THE NEGOTIABLE IN- STRUMENTS LAW OF NEW YORK, CONNECTICUT, COLORADO, FLORIDA, VIRGINIA, MARYLAND, AND THE DISTRICT OF COLUMBIA. CHRISTOPHER G. TIEDEMAN, LL.D., OF NEW YORK CITY, Author of Treatises on the Laio of '^ Real Property,''^ ^'Police Power,^* " Commercial Paper,^^ " Sales," etc. ST. LOUIS: THE F. II. THOMAS LAW BOOK CO. 1898. T Entered according to Act of Congress, In the year 1898, by C. G. TIEDEMAN, In the Office of the Librarian of Congress, at Washington. Press of Nixon- Jones Printing Co., St. Louis, Mo, PKEFACE. In the preparation of this treatise, the author has had in mind the needs of law schools, rather than those of the Bench and Bar in the active practice of the profession ; although it is believed, that the practicing lawyer will find as much aid from its use as he can from any other work, on the same subject of the same size. The writer has, recently, in the introduction to his Cases on Real Property, explained his views on methods of legal education, in which the main idea is the combination of exposidonf by the use of a carefully prei)ared text, setting forth the principles of the law; and illustration^ by the study of a few selected cases. The Cases on Real Property were prepared to be used with the author's treatise on the same subject; and in the present instance, the selected cases are appended to the succeeding chapters, whose sub- jects they are intended to illustrate, and incorporated in the one volume. It is believed that this feature will commend itself to a large number of teachers. The citations of authorities are numerous, considering the size and purpose of the volume ; they are largely recent decisions, and include decisions filed in 1897. For the convenience of schools having small libraries, to the official citation has been added the reference to the Amer- ican Decisions, American Reports, and the volumes of the Reporter System. In the appendix will be found the recent New York Negotiable Instruuieuts Law, which, with the exception of three sections, has been adopted in the additional States of Connecticut, Florida, Colorado, Virginia, Maryland, and the District of Columbia; recommended for adoption in Massachusetts, Rhode Island and South Carolina, and which, it is expected, will ultinuitely be substantially (iii) 740069 IV PREFACE. adopted by all the States ; in conformity with the recom- mendation by the conference of the State Commissioners on uniform State Laws. Christopher G. Tiedeman. 141 Herkimer St., Brooklyn Borough, New York City. TABLE OF CONTENTS. CHAPTER 1. GENERAL CHARACTERISTICS OF BILLS AND NOTES. Section 1. What is money. 2. Commercial paper defined. 3. Bills of exchange — Foreign and inland bills. 4. Forms of bills of exchange. 5. The effect of a bill — When does it operate as an equitable assignment. 6. Promissory notes defined. 7. Form of a promissory note. CHAPTER n. THE REQUISITES AND COMPONENT PARTS OF BILLS AND NOTES. Section 7. The date. 8. Ante- dating and post-dating. 9. Name of drawer or maker. 10. Joint and several notes. 11. Two or more drawers. 12. Liability of one or more joint makers or drawers, as sure- ties. 13. The name of the drawee. 14. The name of the payee. f 15. Fictitious or non-existing parties. 16. Same person as different parties. 17. Words of negotiability. 18. A distinct obligation to pay. 19. Time of payment. V TABLE OF CONTENTS. Section 20. Payment must be unconditional. 21. Certainty as to amount of payment. 22. Payment in money only. 23. The place of payment. 24. Acknowledgment of consideration. 25. Sealed instruments not negotiable. 26. Delivery. 27. Delivery as an escrow, 28. Delivery of bills and notes executed in blank. CHAPTER III. AGREEMENTS CONTROLLING THE OPERATION OF BILLS AND NOTES. Section 29. Kinds of agreements. 30. What memoranda will control. 31. Collateral agreements. 32. Agreements to renew. CHAPTER IV. PARTIES TO BILLS AND NOTES. Section 33. Infants. 34. Lunatics. 35. Drunkards and spendthrifts. 36. Married women. 37. The bankrupt or insolvent payee. 38. Alien enemies. 39. Bill or note executed by agent. 40. Form of signature by agent. 41. Partners. 42. Form of the firm's signature. 43. Private corporations. 44. Form of signature by agents of corporations, 45. Commercial paper of corporations under seal, 46. Drafts or warrants of one officer of the corporation on another. 47. Governments. 48. Municipal or public corporations. 49. Fiduciary parlies and personal representatives. vi TABLE OF CONTENTS. CHAPTER V. THE CONSIDERATION AS IT AFFECTS BONA FIDE OWNER- SHIP. Section 60. Necessity of consideration — What instruments import a consideration. 51. Between whom question of consideration may be raised — Bona fide holders. 52. Real and apparent relation of parties. 53. One consideration supporting the obligations of more than one. 54. Accommodation paper. 55. Money consideration — Contemporary loans, future ad- vances and existing debts. 66. When is a pledgee a bona fide holder for value. CHAPTER VI. ACCEPTANCE AND AGREEMENTS TO ACCEPT BILLS AND CER- TIFICATION OF NOTES. Section 57. The object and effect of acceptance. 58. When and in what cases must presentment for acceptance be made — Effect of failure. 69. Presentment by whom and to whom. 60. Where and at what time must presentment be made. 61. Form and manner of presentment. 62. When presentment is waived. 63. Who may accept. 64. Acceptance before and after completion of the bill. 65. Revocation of acceptance. 66. Acceptances when required to be in writing. 67. Form and phraseology of acceptance. 68. Implied acceptances — Detention or destruction of bill, 69. Agreements to accept. 70. Conditional acceptances. 71. Acceptances for honor or supra protest. 72. What acceptance admits. 73. Certified notes. vii TABLE OF CONTENTS. CHAPTER VII. THE TRANSFER OF BILLS AND NOTES BY DELIVERY AND IN GENERAL. Section 74. The assignability of choses in action in general — Non-nego- tiable paper. 75. Transfer of negotiable bills and notes payable to bearer. 76. Liability of assignors of bills and notes payable to bearer. 77. Liability of broker in transfer of paper by delivery. 78. Transfer by delivery of paper payable to order. 79. Sale of bill or note vpithout delivery. 80. Implied transfer of bills and notes. 81. Transfer by legal process — Attachment, garnishment, exe- cution. 82. Transfer donatio mortis causa. CHAPTER VIII. TRANSFER BY INDORSEMENT. Section 83. The meaning, purpose and effect of indorsement. 84. Liability of an indorser. 85. Liability of indorser " without recourse." 86. Successive indorsements — Liability for contribution and exoneration. 87. The place for indorsement — Allonge. 88. Form of the indorsement. 89. Indorsements in full and in blank. 90. Absolute, conditional and restrictive indorsements. 91. Time and place of indorsement. 92. Irregular indorsements — Joint makers, grantors, indorsers. CHAPTER IX. THE RIGHTS OF BONA FIDE HOLDERS. Section 93. Who is a bona Me holder. 94. What defenses -will and will not prevail against bona fide holders — General statement. 95. Instruments void for want of delivery. viii TABLE OF CONTENTS. Section 96. Blank instruments delivered to agent and filled up in viola- tion of instructions. 97. Bill or note written over a blank signature. 98. Bills or notes executed by mistake or under false repre- sentations. 99. Bills and notes executed under duress. 100. Estoppel as affecting defenses against bona fide holders 101. What is meant by bona fide. 102. Bona fide holder must be a holder for value. 103. When inadequacy of price constructive notice of fraud. 104. Inadequacy of price for indorsement as affected by laws against usury. 105. Inadequacy of price, as affecting amount which may be recovered of primary obligor and indorser. 106. Usual course of business. 107. Transfer before and after maturity. 108. Paper payable on demand or at sight when overdue. 109. Transfer after default in the payment of installment of principal or interest. 110. Transfer on last day of grace, or day of maturity. 111. Actual and constructive notice of defenses. 112. Notice by Zis pendens. 113. Burden of proof as to bona fide ownership. CHAPTER X. PRESENTMENT FOR PAYMENT. Section 114. For what purpose, and as to whom is presentment for payment necessary. 115. By whom must presentment be made. 116. Possession as evidence of right to present for payment. 117. To whom should presentment be made. 118. The place of presentment. 119. The time of presentment — Days of grace. 120. Computation of time — Legal holidays. 121. The hour of the day for presentment. 122. Mode of presentment. CHAPTER XI. PROTEST. Section 123. The object and necessity of protest. 124. By whom protest should be made. ix TABLE OF CONTENTS. Section 125. Place of protest. 126. By whom should presentment be made in preparation for protest. 127. Noting dishonor and extending protest. 128. Contents of certificate of protest — Proper time for the same. 129. Protest, evidence of what— When evidence of notice. CHAPTER XII. NOTICE OF DISHONOR. Section 130. Necessity of notice. 131. Who may give the notice. 132. To whom notice should be given. 133. The time allowed for giving notice. 134. Manner of giving notice, when important. 135. Manner of giving notice where parties to be notified reside in the same place. 136. Personal notice, how and when served. 137. Manner of serving notice on persons residing elsewhere. 138. What is meant by " residing in the same place." 139. Form and requisites of the notice of dishonor. 140. Allegation and proof of notice. CHAPTER XIII. EXCUSES FOR FAILURE OF PRESENTMENT, PROTEST AND NOTICE. Section 141. War, political and social disturbances, pestilence, epi- demics, conflagrations, floods, etc. 142. Drawing with no right to expect acceptance or payment. 143. Void note. 144. Ignorance of and failure to discover the address of par- ties. 145. Sickness, death or accident to holder or to paper. 146. Possession of security by drawer or indorser. 147. Waiver of presentment, protest and notice. 148. No damage to holder — Loss or destruction of the instru- ment. X TABLE OF CONTENTS. CHAPTER XIV. FORGERY AND ALTERATION OF BILLS AND NOTES. Section 149. Forgery defined and explained. 150. Forgery, alteration and spoliation distinguished. 151. The effect of authorized alterations. 152. Presumption as to time of alteration and burden of proof. 153. What are material alterations. 164. What are immaterial alterations. 155. Rights of bona fide holder of forged or altered bill or note, 156. Recovery of money paid on a forged bill or note. CHAPTER XV. THE RIGHTS AND LIABILITIES OF SURETIES AND GUARAN- TORS. Section 157. Sureties and guarantors distinguished. 158. Form and requisites of a guaranty. 159. Guaranty as appurtenant to a bill or note. 160. Demand of principal debtor and notice of default, when necessary. 161. Concealed sureties as accommodation parties — Nature of their liability — Admissibility of parol evidence to prove real character. 162. What will discharge guarantors and sureties — Surrender of securities and extension of time of payment. 163. Remedies of surety and guarantor — Contribution between co-sureties. CHAPTER XVI. CHECKS. Section 164. Check distinguished from a bill of exchange. 165. Checks are drawn on a bank or banker. 166. Check payable on demand and without grace. 167. The form and formalities of the check. 168. Certification of checks. 169. Negotiation and transfer of checks. 170. Memorandum checks. xi TABLE OF CONTENTS. Section 171. Presentment, notice and protest of checks. 172. "Within what time must check be presented. 173. Presentment of check by mail and by deposit. 174. What will excuse failure or delay in demand and notice. 175. When is a check stale or overdue. 176. Effect of death of drawer. 177. Bight of checkholder to sue the bank. CHAPTER XVII. PAYMENT OF AND BY BILLS, NOTES AND CHECKS. Section 178. Payment distinguished from sale or transfer. 179. Payment by whom. 180. Payment to whom. 181. Conditions of payment — Legal tender — Surrender of paper — Receipt. 182. Payment by bill or note — Presumption as to its absolute or conditional character. 183. Payment by check. APPENDIX. THE NEGOTIABLE INSTRUMENTS LAW OF NEW YORK, CONNECTICUT, COLORADO AND FLORIDA, MARYLAND, VIRGINIA, AND THE DISTRICT OF COLUMBIA. Article I. General provisions. (§§ 1-17.) II. Form and interpretation of negotiable instruments. (§§ 22- 42.) III. Consideration. (§§ 50-55.) IV. Negotiation. (§§ 60-80.) V. Rights of holder. (§§ 90-98.) VI. Liabilities of parties. (§§ 110-119.) VII. Presentment for payment. (§§ 130-148.) VIII. Notice of dishonor, (§§ 160-189.) IX. Discharge of negotiable instruments. (§§ 200-206.) xii TABLE OF CONTENTS. Article X. Bills of exchange; form and interpretation. (§§210-216). XI. Acceptance. (,§§ 220-230.) XII. Presentment for acceptance. (§§240-248.) XIII. Protest. (§§ 260-268.) XIV. Acceptance for honor. (§§ 280-290.) XV. Payment for honor. (§§ 300-306.) XVI. Bills in a set. (§§310-315.) XVII. Promissory notes and checks. (§§ 320-325.) XVIII. Notes given for a patent right and for a speculative con- sideration. (§§ 330-832.) XIX. Laws repealed, when to take effect. (§§340-341.) ARTICLE I. GENERAL PROVISIONS. Section 1. Short title. 2. Definitions and meaning of terms. 3. Persons primarily liable on instrument. 4. Reasonable time; what constitutes. 5. Time how computed; when last day falls on holiday. 6. Application of chapter. 7. Rule of law merchant ; when governs. ARTICLE II. FORM AND INTERPRETATION. Section 20. Form of negotiable instrument. 21. Certainty as to sum; what constitutes. 22. When promise is unconditional. 23. Determinable future time; what constitutes. 24. Additional provisions not affecting negotiability. 25. Omissions; seal; particular money. 26. When payable on demand. 27. When payable to order. 28. When payable to bearer. 29. Terms when sufficient. 30. Date, presumption as to. 31C Ante-dated and post-dated. 32. When date may be inserted. 33. Blanks, when may be filled. 34. Incomplete instrument not delivered. 35. Delivery; when effectual ; when presumed. 36. Construction where instrument is ambiguous. xiii TABLE OF CONTENTS. Section 37. Liability of persons signing in trade or assumed name. 38. Signature by agent; authority; how shown. 39. Liability of person signing as agent, et cetera. 40. Signature by procuration; effect of. 41. Effect of indorsement by infant or corporation. 42. Forged signature; effect of . ARTICLE III. CONSIDERATION OF NEGOTIABLE INSTRUMENTS. Section 50. Presumption of consideration. 51. What constitutes consideration. 52. What constitutes holder for value. 53. When lien on instrument constitutes holder for value. 54. Effect of want of consideration. 55. Liability of accommodation party. ARTICLE IV. NEGOTIATION. Section 60. What constitutes negotiation. 61. Indorsement; how made. 62. Indorsement must be of entire instrument. 63. Kinds of indorsement. 64. Special indorsement; indorsement in blanlj. 65. Blanli indorsement; how changed to special indorsement. 66. When indorsement restrictive. 67. Effect of restrictive indorsement; rights of indorsee. 68. Qualified indorsement. 69. Conditional indorsement. 70. Indorsement of instrument payable to bearer. 71. Indorsement where payable to two or more persons. 72. Effect of instrument drawn or indorsed to a person as cashier. 73. Indorsement where name is misspelled, et cetera. 74. Indorsement in representative capacity. 75. Time of indorsement; presumption. 76. Place of indorsement; presumption. 77. Continuation of negotiable character. 78. Striking out indorsement. 79. Transfer without indorsement; effect of. 80. When prior party may negotiate instrument, xiv TABLE OF CONTENTS. ARTICLE V. RIGHTS OF HOLDERS. Section 90. Rights of holder to sue; payment. 91. What constitutes a holder in due course. 92. When person not deemed holder in due course. 93. Notice before full amount paid. 94. When title defective. 95. What constitutes notice of defect. 96. Rights of holder in due course. 97. When subject to original defenses. 98. Who deemed holder iu due course. ARTICLE VI. LIABILITIES OF PARTIES. Section 110. Liability of malter. 111. Liability of drawer. 112. Liability of acceptor. 113. When person deemed indorser. 114. Liability of irregular indorser. 115. AVarranty; where negotiation by delivery, et cetera. 116. Liability of general indorsers. 117. Liability of indorser where paper negotiable by delivery. 118. Order in which indorsers are liable. 119. Liability of agent or broker. ARTICLE VII. PRESENTMENT FOR PAYMENT. Section 130. Effect of want of demand on principal debtor. 131. Presentment where instrument is not payable on demand 132. What constitutes a sufficieut presentment. 133. Place of presentment. 134. Instrument must be exhibited. 135. Presentment where instrument payable at bank. 136. Presentment where principal debtor is dead. 137. Presentment to persons linble as partners. 138. Presentment to joint debtors. XV TABLE OF CONTENTS. Section 139. When presentment not required to charge the drawer. 140. When presenlment not required to charge the indorser. 141. When delay in making presentment is excused. 142. When presentment may be dispensed with. 143. When instrument dishonored by non-payment. 144. Liability of person secondarily liable, when instrument dishonored. 145. Time of maturity. 146. Time; how computed. 147. Rule where instrument payable at bank. 148. What constitutes payment in due course. ARTICLE VIII. NOTICE OF DISHONOR. Section 160. To whom notice of dishonor must be given. 161. By whom given. 162. Notice given by agent. 163. Effect of notice given on behalf of holder. 164. Effect where notice is given by party entitled thereto. 165. When agent may give notice. 166. When notie sufficient. 167. Form of notice. 168. To whom notice may be given. 169. Notice where party is dead. 170. Notice to partners. 171. Notice to persons jointly liable. 172. Notice to bankrupt. 173. Time within which notice must be given. 174. Where parties reside in same place. 175. Where parties reside in different places. 176. When sender deemed to have given due notice. 177. Deposit in post-oflice, what constitutes. 178. Notice to subsequent parties, time of. 179. When notice must be sent. 180. Waiver of notice. 181. Whom affected by waiver. 182. Waiver of protest. 183. When notice dispensed with. 184. Delay in giving notice; how excused. 185. When notice need not be given to drawer. 186. When notice need not be given to indorser. 187. Notice of non-payment where acceptance refused. 188. Effect of omission to give notice of non-acceptance. 189. When protest need not be made; when must be made. xvi TABLE OF CONTENTS. ARTICLE IX. DISCHARGE OF NEGOTIABLE INSTRUMENTS. Section 200. Instrument; how discharged. 201. When persons secondarily liable on, discharged. 202. Right of party who discharged instrument. 203. Renunciation by holder. 204. Cancellation; unintentional; burden of proof. 205. Alteration of instrument; effect of. 206. What constitutes a material alteration. ARTICLE X. BILLS OF EXCHANGE ; FORM AND INTERPRETATION. Section 210. Bills of exchange defined. 211. Bill not an assignment of funds in hands of drawee. 212. Bill addressed to more than one drawee. 213. Inland and foreign bills of exchange. 214. When bill may be treated as promissory note. 215. Referee in case of need. ARTICLE XI. ACCEPTANCE OF BILLS OF EXCHANGE. Section 220. Acceptance, how made, et cetera. 221. Holder entitled to acceptance on face of bill. 222. Acceptance by separate instrument. 223. Promise to accept; when equivalent to acceptance. 224:. Time allowed drawee to accept. 225. Liability of drawee retaining or destroying bill. 226. Acceptance of incomplete bill. 227. Kinds of acceptances. 228. What constitutes a general acceptance. 229. Qualified acceptance. 230. Rights of parties as to qualified acceptance. b xvii TABLE OF CONTENTS. ARTICLE XII. PRESENTMENT OF BILLS OF EXCHANGE FOR ACCEPTANCE. Section 240. "When presentment for acceptance must be made. 24:L When failure to present releases drawer and indorser. 242. Presentment; how made. 243. On what days presentment may be made. 244. Presentment; where time is insufficient. 245. When presentment is excused. 246. When dishonored by non-acceptance. 247. Duty of holder where bill not accepted. 248. Rights of holder where bill not accepted. ARTICLE XIII. PROTEST OF BILLS OF EXCHANGE. Section 260. In what cases protest necessary. 261. Protest; how made. 262. Protest; by whom made. 263. Protest; when to be made. 264. Protest; where made. 265. Protest both for non-acceptance and non-payment, 266. Protest before maturity where acceptor is insolvent. 267. When protest dispensed with. 268. Protest; where bill is lost, et cetera. ARTICLE XIV. ACCEPTANCE OF BILLS OF EXCHANGE FOR HONOR. Section 280. When bill may be accepted for honor. 281. Acceptance for honor; how made. 282. When deemed to be an acceptance for honor of the drawer. 283. Liability of acceptor for honor. 284. Agreement of acceptor for honor. 285. Maturity of bill payable after sight; accepted for honor. 286. Protest of bill accepted for honor, et cetera, 287. Presentment for payment to acceptor for honor; how made, 288. When delay in making presentment is excused, 289. Dishonor of bill by acceptor for honor, xviii TABLE OF CONTENTS. ARTICLE XV. PAYMENT OF BILLS OF EXCHANGE FOR HONOR. Section 300. Who may make payment for honor. 301. Payment for honor; how made. 302. Declaration before payment for honor. 303. Preference of parties offeriDg to pay for honor. 304. Effect on subsequent parties where bill is paid for honor. 305. Where holder refuses to receive payment sttpra protest. 306. Rights of payor for honor. ARTICLE XVI. BILLS IN A SET. Section 310. Bills in sets constitute one bill. 311. Rights of holders where different parts are negotiated. 312. Liability of holder who indorses two or more parts of a set to different persons. 313. Acceptance of bills drawn in sets. 314. Payment by acct ptor of bills drawn in sets. 316. Effect of discharging one of a set. ARTICLE XVII. PROMISSORY NOTES AND CHECKS. Section 320. Promissory note defined. 321. Check dt fined. 322. Within what time a check must be presented. 323. Certification of check; effect of. 324. Effect where holder of check procures it to be certified. 325. When check operates as an assignment. ARTICLE XVIII. NOTES GIVEN FOR PATENT RIGHTS AND FOR A SPECULATIVE CONSIDERATION. Section 330. Negotiable instruments given for patent rights. 331. Negotiable instruments given for a speculative consid- eration. 332. How negotiable bonds are made non-negotiable. xix TABLE OF CONTENTS. ARTICLE XIX. LAWS REPEALED ; WHEN TO TAKE EFFECT. Section 340. Laws repealed. 341. When to take effect. XX TABLE OF CASES CITED. References are to Pages. Abbey v. Deyo, 109. Abbott V. Hendricks, 35. Abbott V. Rose, 2S3. Abel V. Alexander, 434. Abell V. Seymour, 86. Ackley School Dist. v. Hall, 103. Adalrr. Egland, 411. Adams v. Addington, 60. Adams v. Darby, 167, 305, 383, 383. Adams v. Flanagan, 85. Adams V. Hackensack T. Co., 304. Adams i\ Kennedy, 98. Adams v. King, 17. Adams V. Leland, 385. Adams r. Reeves, 501. Adams v. Robinson, 271. Adams v. Seaman, 29. Adams v. Smith, 279. Adams v. Squires, 503. Adams v. Wright, 362. Adams Bank v. Jones, 38. Addy V. Grlx, 52. Adkins v. Blake, 256. Aetna Bk. v. Winchester, 410. Aetna Nat. Bk. v. Charter Oak Ins. Co., 95. Aetna Xat. Bk. v. Fourth Nat. Bk., 47-.'. Agnel V. Ellis, 182, 183. Agnew V. Bank of Gettysburg, 306,307. Alrey v. Pearson, 390. Ala. Coal & iMinlng Co. v. Bralnar.l, 16, 93. Alabama Nat. Bank. v. Halsey, 147. Alcock V. Alcock, 78. Alcock V. Hopkins, 504. Aldcn V. Barbour, 180. Aldlnc Mfg. Co. V. Warner, 359. Aldrlch V. Jackson, 198, 234, 235. Aldrich V. Stockwcll, 117. Aldridge v, Branch Bank, 12. Allan r. Eldrcd, 171,357. Allen V. Berryhlll,433. Allen r. Briitlon, 113. Allen V. Clark, 199. Allen V. Fourth Nat. Bk., 414. Allen V. Frazee, 279. Allen V. Furbush, 67. Allen V. Harroh, 426. Allen V. King, 383. Allen V. Merchants Bk., 339. Allen V. Pegram, 234. Allen V. Reilly, 393. Allen V. Rightmere, 431, Allen V. Suydam, 167. Allen V. Wilklns, SO. Allin V. Williams (in full), 227. Allin V. Williams, 215. Allison V. Barrett, 202. Allison V. King, 202. Allison V. Kinne, 225. Aimer v. Palmer, 26, Almich V. Downey, 11. Alsop V. Todd, 70. Alter V. Berghaus, 403. Am. Emigrant Co. v. Clark, 465. Am. Exch. Nat. Bk. v. N. Y. Belting &c. Co., 252. Am. Exch. Nat. Bank v. Oregon Pottery Co., 95. Am. Nat. Bk. v. Bangs, 66, 411. Am. Nat. Bank v. Junk &c. Mfg, Co,, 304, otiO, 3f.7, Am. Trust & Sav. Bk. v. Gluck, 9,5, Am. Water Works v. Venner, 179. Ames V. Colburn, 418. A:ncs v. Merriam,470. Aramldown v. Woodman, 316. Amosr. Bennett, 604. Amoskeag r. Moore, 391. Anderson a. Drake, 169. Anderson r. Jacobson, 41. Anderson v. Rogers, 468. Anderson v. Warne, 433. Andressen i-. First Nat. Bank, 176, Andrew r. Blackley, 460. Andrews t'. Bank, 477. Andrews v. Germ. Nat. Bank, 172, 466. Andrews v. Simms, 219. Androscoggin Bk. r. Kimball, 11, 252. Angaletos v. Meridian Nat. Bk., 393. xxi TABLE OF CASES CITED. References are to Pages, Angle V. N. W, &c. Ins. Co., 40, 252, 269, 407, 410, 413. Aniba i\ Yeomans, 219. Anniston L. & T. Co. v. Stickney, 34. Annville Nat. Bk. v. Kettering, 390. Appeal of Greenbaum, 311. Apperson v. Bynam, 311, 382. Apperson v. Union Bank, 382. Apple V. Lesser, 372. Appleton V. Donaldson, 15L Appleton V. Parker, 504. Appleton V. Sweetapple, 481. Archibald v. Argall, 502. Arents v. Commonwealth, 426. Armstead v. Arm stead, 820. Armstrong v. Gibson, 259. Armstrong v. Harshman, 224. Armstrong v. Lewis, 39.3. Armstrong v. Pomeroy Nat. Bank (in full), 46. Armstrong v. Pomeroy Nat. Bank, 19. Arnold V. Dresser, 310, 318. Arnold v. Kinlock, 342. Arnold v. Sprague, 176. Arnot V. Woodburn, 264. Arnott V. Symonds, 218. Arpln V. Chapin, 191. Ashbrook v. Ryon, 204. Ashe V. Bcasley, 338, 339, 358. Ashley V. Gunton, 365. Asplnwall v. Wake, 183. Atkins V. Cobb, 222. Atkinson v. Brooks, 154. Atkinson v. Hawden, 407. Atkinson v. Manks, 144, 180. Atlantic Bk. v. Merchants' Bk., 463, 464. Atlantic Nat. Bank v. N. W. Fertilizing Co., 179. Atlantic Nat. Bk. v. Franklin, 154. Atlantic State Bank v. Savery, 91, 92. Atlas Bank v. Doyle, 151. Atlas Nat. Bank v. Holm, 270. Attenborough v. McKenzie, 166. Atty.-General v. Cont. L. Ins. Co., 472. Atty.-Gen. v. Life & Fire Ins. Co., 94. Atwood V. Cornwall. 500. Atwood V. Mannings, 174. Auerbach v. Le Sueur Mill Co., 95. Auerbach v. Prltchett, 30. Anltman & Taylor Co. v. Hefner, 433. Austin V. Boyd, 148, 150. Auten V. Gruner, 254, 258. Avent v. Maroney, 3S2. Averett's Adm'x v. Booker, 27, 144. Avery v. Latimer, 197. Avery v. Stewart, 315. Ayers v. Burns, 77. Aymar v. Beers, 167, 387, 479. Ayrault v. Bank, 355. xxii B Babcockv. Beman, 140. B;ibcock v. Blanchard, 513. Bacchus V. Richmond, 182. Bachcllor v. Priest, 1G6, 306, 307, 358, 499. Backus V. Danforth, 196. Backus V. Shepherd, 390. Bacon v. Bicknell, 23. Bacon v. Dyer, 304. Bacon v. Fitch, 17. Bacon v. Hanna, 366. Bacon v. Page, 24. Bacon's Adm'r v Bacon's Trustee, 266. Bailey v. Bank of Missouri, 365. Bailey v. Carswell, 85. Bailey v Dozler, 339, 341. Bailey V. Freeman, 428. Bailey v. Malvin, 497. Bai:ey v. Smith, 258, 261. Bailey v. Smoek, 34. Bailey v. Southwestern Bk.,384. Bailey v. Taylor, 408, 409. Baker r. Dening, 62. Baker w. Guarantee T. & S. D. Co., 269. Bailey v. Stoneman, 238. Baker v. Robinson, 226, 359. Baker v. Scott, 390. Balch V. Onion, 223. Baldwin v. Bank of Newbury, 86. Baldwin v. Dow, 429. Baldwin v. Richardson, 386. Baldwin v. Rosier, 76. Baldwin v. Threlkeld, 415. Baldwin v. Van Deusen, 199. Ball V. Allen, 405. Ballard v. Franklin Ins. Co., 407, 408. Balllnger v. Edwards, 259. Ballon V. Talbot, 87. Ballston Spa Bank v. Marine Bank, 86, 97. Bancroft v. Haines, 36. Bane v. Gridley, 69. Bangs V. Hornick, 146. Bankhead v. Owen, 199. Bank v. Adams, 404. Bank v. Armstrong, 242. Bank v. Ashworth, 405. Bank v. Barksdale. 328, 356. Bank v. Bressc, 60. Bank v. Barton, 350. Bank v. Cornhauser, 477. Bank V. Davis, 124, 487. Bank v. Doyle, 300. Bank v. Dunbar, 42. Bank v. Ellis, 60, 220. Bank v. Fairbrother, 373. Bank V. Frame, 442. Bank v. Glllet, 126. TABLE OF CASES CITED. References Bank v. Hollister, 350. Bank v. Habbell, 243. Bank v. Ilunt, 336, 347, 349, 350. Bank i-. Hyde, 54. Bank v. Jones, 254, 477, 495, 611. Bank V. Leach, 477. Bank V. Leonard, 140. Bank v. McAllister, 316. Bank v. McMlchael, 355. Bank v. Matthews, 512, Bank v. Miller, 477. Bank v. Norton, 124. Bankt'. Payne, 124. Bank v. Railroad Co., 293, 294. Bank v. Raymond, 291. Bank v. Rotge, 477. Bankr. Smith, 347. Bank v. Taylor, 291, 293. Bank v. Topping, 138, 141. Bank v. Wager, 416. Bank v. Weiss, 243. Bank V. Whitman, 477. Bank v. Whitney, 512. Bank v. Wlllard, 335. Bank v. Winchester, 117. Banking Co. v. Lewis, 299. Bank of Alexandria v. Swan, 362, 370. Bank of America v. Senior, 205, 220. Bank of America v. Shaw, 373, 404. Bank of Antif^o v. Union Trust Co. (In fall), 490. Bank of Antigo v. Union Trust Co., 472. Bank of British N. A. r. Merchants >. Bk., 403 References are to Pages. Cassel V. Dows, 179. Cassldy^'. Creamer, 366. Castle V. Candel. 212, 266. Castle V. Rickly, 238, 384. Caweln v. Browinski, 466. Cayuga Co. Bk. v. Bennett, 363, Cayuga Co. Bank v. Hunt, 169, 170, 310 341,362. Cayuga Co. Bk. v. Warden, 305. Cedar Falls Co. v. Wallace, 386, 393. Central Bank v. Allen, 313. Central Bk. v. Davis, 219, 388. Central Bk. v. Haramett, 248, 262. Central Bank v. Wlllard, 68. Central Nat. Bk. v. Adams, 386. Central Nat. Bk. v. Pipkin, 257. Central Nat. Bank v. Railroad Co., 36. Central Sav. Bank v. Richards, 177. Central Trust Co. v. N. Y. Equipment Co., 22. Chaddock v. Vanness, 225. Chadwell's Adm'r v. Chadwell, 13. Chadwick v. Eastman, 407. Chafoin v. Rich, 434. Chains V. McCram, 199,216. Chamberlain v. Hopps, 113. Chamberlain v. Pacific Wood &c. Co. 98. Champion v. Gordon, 355, 459. Chandler v. Carey, 24. Chandler v. Westfall, 226. Chapin v. Dobson, 138. Chapln V. Vt. Ac. R. R. Co., 99. Chapman v Cottrel, 175. Chapman v. Keane, 358, 359. Chapman r. McCrea, 215. Chapman v. Rose, 214,254, 257. Chapman v. Wight, 25. Chappelear v. Martin, 499. Chard v. Fox. 371. Charke v. Dederick, 263. Charlotte Steamboat v. Hammond, 5CiL Chase v. Redding, 204. Chase Nat. Bank v. Faarot, 252. Chatham Bank v. Allison. 342. Chatham Nat Bk. v. Pratt, 434. Chautauqua Co. Bk. v. Davis, 220, 308. Chauvlne r. Fowler, 358. Cheever v. Pittsburg etc. Ry. Co., 269. Chemical Nat. Bk. v. Wagner, 270. Chemung Canal Bank v. Bradner, 92. Chessmer v. Noyes, 339. Chester v. Dorr, 264. Chicago Ry. Equipment Co. v. Merchants Bank, 57. Chicago T. and Sav. Bk. v. Nordgren, 224. Chick V. PUlsbary, 362. Chlcopec Bk. v. Eager, 304. xxvii TABLE OF CASKS CITED. References Chicopee Bk. v. Phlla. Bk., 31S. Chllds V. Pellett, 503. Chipman v Tucker, 40. Chism V. First Nat. Bank, 19. Cholmley v. Darley, 66. Chouteau v. Allen, 25S, 268. Chouteau v. Webster, 360. Christian v. Morris, 106. Christy v. Canipban, 271. Chrysler v. Griswold. 31. Church v. Howard, 410. Cincinnati etc. Fish Co. v. Nat. Lafayette Bk., 462. Cisne V. Chide8ter,57. Citizens N. Bk. v. Cade, 367, 369. Citizens 'Sat. Bk. v . Importers' <& Traders' Bk. (in full), 420. Citizens' Nat. Bank v. Pioliet,27. Citizens' Nat, Bank v. Richmond, 407. City Bank v. First Nat. Bk., 415. City Bank v. Perkins, 260 City Bk. of Dowagiac v. Dlel, 263. City N. B.v. Clinton Co. N. B., 358. City Nat. Bank of Dayton v. Clin- ton Co. Kat. Bank (in full), 373. City of Elizabeth v. Force, 412. City of St. i-ouis v. Shields. 96. City Sav. Bk. v. Ilopson, 390. City Sav. Bk. v. Kensington Land Co., 343. Claflin V. Dawson, 207. Claflin V. Farmers' etc. Bk., 463. Claflin V. Wilson, 221. Claiborne Co. v. Brooks, 104. Clair V. Barr, 393. Clampitt V. Newport, 107. Clark V. Barnes, 29. Clark V. Boyd, 202, 211. Clark V. Calllson, 291, 292. Clark t^.Eldrldge, 371. Clark V. Evans, 270. Clark V. Farmers' Mfg. Co. 36, 99. Clark V. Iowa City, 99. Clark V. Lake Ave. etc., Sav. & L. Assn., 28, 96, Clark V. Moses, 107. Clark V. Schneider, 329. Clark V. School District, 102. Clark V. Sigourncy, 11, 37. Clark V. Sisson. 256, 261, 294. Clark V. Spencer, 284. Clark V. Thayer. 150, 271. Clark V. Trueblood, 214. Clark V. Whitaker, 202, 291, 292. Clarke v. City of Des Moines, 102. Clarke v. Gordon, 177. Clarke v. Johnson, 250, 257. Clarke v. Pease, 255. Clarke v. Percival, 56. xxviii are to Pages. Clarke ^at. Bk v. Bk. of Albion, 464. Clason V. Bailey, 14. Clavvson v. Munson, 61. Clay V. Erigerton, 430. Clements i'. Yeates, 166. Clews V. N. Y. Nat. Bk. Assn., 462. Cline V. Guthrie, 253. Cloppcr's Admr. v. Union Bk., 432. Clopton V. Hall, 149. Cloud r. Whiting, 279 Ciongb V. Holden (in full), 345. Clough V. Holden, 341. Clongh i: Seay, 407. Clute V. Robison, 36. Cluter. Small, 409. Clutton V. Attenborough, 19. Coal Co. V. Haenni, 45. Coapstlck V. Bosworth (lu full), 68. Coates V. Thayer, 434. Cobb V. Duke, 22. Cochran v. Atchison, 214, 215. Cochran r. Nebeker. 409. Cochran v. Strong, 213. Cocker. Branch Bank, 91. Coco r. Gnmbel, 197. Coddington v. Davis, 390. Coffeltw. Wise, 255. Coffey V. Reinhardt, 434. Coffraan v. Campbell, 177, 180. Coffin V. Loring, 315. CofBn V. Spencer, 27. Coggins z\ Stockard, 407. Cohen v. Prater, 197. Cohn V. llusson, 147. Colbrin v. Averlll,427. Cole f- Gushing, 220. Cole V. Jessup, 306. Cole V. Merchants Bank, 429. Colev. Sachett,504. Coleman v. Burr, 110. Coliger v. Frrincis, 258. Collins V. Buckeye State Ins. Co., 88. Collins x\ DrlscoU, 11. Collins V. Gilbert, 145. Collins v. Insurance Co., 236. Collins V. Stanfleld, 429. Collins V. Trotter, 304. Collis V. Emmett, 18, 49. Colorado Nat. Bank v. Boettcher, 178. Colson V. Arnot, 99, 214, 408. Colt-y. Barnard, 359. Columbus Ins. Co., etc. v. First Nat. Bank, 197. Comings v. Leedy, 80. Commercial Bk. v. Barksdale, 338, 339, 341,342,363. Commercial Bk. v. Hughes, 3'X). Commercial Bk. v. Varnum, 5, 314, 338 339, 340, 341. TABLE OF CASES CITED. References Commercial Bk. of Albany v. Strong, 365. Commercial Bank of Lake Erie v. Nor- ton, 85, 191. Commercial Nat. Bk. v. First Nat. Bk., 472. Commissioners v. Block, 103. Commissioners v. Batterlck, 217. Commissioners i\ Clark, 273. Commissioners v. Costello, 406. Commissioners v. Pallinger, 20. Commissioners v. Emigrant Ins. Bank, 33 Commissioners v. Foster, 406. Commissioners v. Indust. Sav. Bk., 412. Commissioners v. Powell, 224. Comrs. Knox Co. v. Aspinwan,99. Comm's's of Madison Co. t'. Clark, 264. Compton V. Blair, 383. Compton V. Patterson, 503. Comstock V. Hannah, 294. Comstock V. Hler, 150, 155, 271. Condon v. Pcarce, 214, 219 Cone V Brown, 307, 499. Cone V. Rees, 432. Conkling v. King, 503 Conn V. Tnornton, 26. Connelly V. McKean, 172. Connerly v. Planters &c. Ins. Co., 144. Connelly v. Goodwin, 343. Conover v. Earl, 213. Conover v. Insurance Co., 116. Conroy v. Ferric, 27. Conroy v. Warren, 464, 469. Cont. Nat. Bk. v. Cornhauser, 462. Conway v. 'SVilMams, 144. Cook r. Baldwin, 176, 177. Cook V. r.eech, 503. Cook V. Rcnick, 328. Cook V. State Nat. Bank, 86, 97, 463. Cooke V. Pomeroy,389. Cooke V. State Nat. Bk , 464. Coolidge V. Brlgham, 403. Coolldge V. Payson, 179, 473. Coolidge V. Ruggles, 24. Cooper V. Cnrtls, 97. Cooper v. Machine Co., 284. Coojier V. Noek, 211. Copel V. Butter, 457. Coppr. McDougall, 215, 384. Corbett v. Clark, 35. Corbin r. Planters' N. Bk., 339, 363. Corbin v. Wachhorst, 146. Corcoran v. Cattle Co., 117. Corcoran v. Doll, 409. Cordellv. McNeill, 429. Corgan v. Frew, 54, 218, 460. Corie v. Monkhouse, 200. Cork V. Bacon, 16, 465. are to Pages. Cornell r. Lovett, 481. Cornell t\ Ncbeker, 282. Cornett r. Haf.er, 363. Corn Kxch. IJk. v. Nassau Bk. 422. Corser i\ Paul, 86. Cortelyon v. Maben, 177. Costello V. Crowell, 24, 196. Costello V. Wilhelm, 434. Costigan v. Hawkins, 199. Couch V. SherrlU, 344. Couch v. Waring, 433. Coursln v. Ledlle, 144. Courtney V. Doyle, 34, 144. Courtney v. Hogan, 504. Cowing r. Altman, 11, 152, 470, 471. Cowlesi'. Harts, 371. Cowles V. Pick. 427, 428, 430. Cowperthwaite v. Sheffield, 307,358. Cowthey i\ Vandenburgh, 196. Coxr. Bank, 347. Cox V. Boone, 466, 467. Cox V. Beltzhoover, 17. Cox V National Bank, 34, 165, 166, 167, 180,304, 305,311. Cox V. Troy, 193. Cozzens v. Chicago Hydraulic Press etc., Co., 225. Crabtree v. May, 77. Craft's Appeal, 257. Craft I'. Railroad Co., 117. Craig r. Brown, 220. Craig r. Parkis, 446. Craig V. Price, 167. Craighead v. McLoney, 408, 410, 416. Craighead v. Peterson, 85. Craln r. Colwell, 392. Crawson v. Goss, 11, 12, 36. Cravens v. Logan, 107. Crawford i\ Spencer, 146, 442. Crawford v. West Side Bk., 410. Creamer f . Perry, 388. Credit Co. v. Howe Machine Co., 95, 174. Cremeri'. Hlgglnson, 427, 428, Creswell v. Holden, 98. Cribbs v. Adams, 315, 339, 341. Crlm V. Starkweather, 215, 266. Cristy I'. Campau, 248. Crittenden Co. r. Shanks, 103. Crocker v. Colwell, 93. Cromer r. Piatt, 371. Cromwell v. County of Sac, 261, 268. Cromwell v. Hewitt. 212, 430. Cromwell v. Lac. Co., 103. Cronlsc r. Kellogg, 432. Crooker r. Holmes, 27. Crooks V. TuUy, 225. Crosby r. Grant, 268 C^O!^by r. Roub, 218. Cro-sby v. Tanner, 263. xxix TABLE OF CASES CITED. References are to Pages. Croekey v. Skinner, 411. Cross V. Brown, 266. Cross V. Holli8ter,215. Croseman v. May, 266. Grossman v. May, 149. Crosthwalte v. Hose, 91. Croswell v. Lanahan, 86. Crowell V. Van Cibler, 178. Cruger v. Armstrong, 382, 464, 465, 467. Crump V. Berdan. 29. Cudahy Packing Co. v. Slonx Nat. Bank, 21. Culberteon v. Nelson, 28, 29, 30. Culbertson v. WUcox, 431, 432. Culver V. 9Iarks (in full), 396. Culver V. Marks, 469. Cnmmings v. Freeman, 23. Cummings v. Gassett, 17, 23. Cummings v. Hummer, 180. Cummings v. Kent, 236, 238. Cundy v. Marriott, 358. Cunningham v. Wardwell, 20, 172. Careton v. Moore, 80. Currier v. Davis, 399. Currier V. Lockwood, 23. Curry v. Bank of Mobile, 220. Curry v. Powers, 205. Curtis V. Mohr, 151, 261. Curtis V. Smallman,426. Curtis V. Sprague, 197. Curtiss V. Leavitt, 103. Curtlss V. Martiue, 384, 389. Cushlng V. Field, 412. Cushing V. Fifleld, 24, 66. Cushlng V. Gore, 465. Cushing v. Rice, 493. Cushman v. Haynes, 28. Custis V. Sprague, 220. Cutler V. Parsons, 214. Cutts V. Perkins, 175, 471. Cuyler v. Stevens, 369. D Dagget V. Whiting, 271. Darkins v. Graves, 343. Dalton City Bk. v. Haddock, 315. Daly V. Proetz, 316. Dana v. Sawyer, 170, 348. Daniels v. Wilson, 261. Darland v. Taylor, 204. Darling v. Wooster, 265. Darwin v Rijdey, 410. Davenport r. Stone, 271, 292. Davidson r. Lanier, 40. Davidson v. Powell, 224. Davidson v. Robertson, 6. Davis V. Barger, 39. Davis V. Barron, 244. XXX Davis V. Bartlett, 273, 274. Davis V. Blanton, 273. Davis V. Burt. 371. Davis V. Clark, 173, 181. Davis V. Dayton, 470. Davis V. Eppler, 368, 385, 386. Davis V. Francisco, 309. Davis V. French, 106. Davis V. Jenney, 409. Davis V. Johnson, 203. Davis V. Lee, 283. Davis V. McCready, 271, 279. Davis V. Melller, 361, 392. Davis V. Morgan, 216. Davis V. Neligh, 264. Davis V. Noll, 263. Davis V. Phillips, 501. Davis V. Statts,433. Davis V. Wells, 390. Davis V. W. Saratoga Bldg. Union, 95. Davison v. City Bank, 504. Day V. Jones, 433, 434. Day V. Kinney, 503. Day i\ Ramsdell, 98. Day V. Thompson, 503. Day V. Zimmerman, 272. Dayton v. Dale, 82. Deacon v. Stodhart, 497. Dean v. Caruth,34, 205. Dean v. De Legardi, 11. Dean v. Hall, 197. Dean v. Richmond, 80. Debesse v. Napier, 175, 471. Dcblieux V. Bullard, 363. Dcbruhl v. Maas, 203. Debuy's v. Moliere, 392. Deere v Marsden, 442. Deoring v. Wiley, 389. Dellass V. Roberts, 26. Deininger v. Miller, 361. Delano V. Bartlett, 35. DeLiqucro v. Munson, 166. DeLong V. Barnes, 145. DeLong V. Schroeder, 270. DeMeets v. Dagson,501. Dennis v. Williams, 503. Denston v. Henderson, 498. Dennlstown v. Stewart, 341, 370. Depeau v. Waddington, 151. Derby v. Thrall, 418. Derr v. Keougli, 410,413. Derrickson v. Whitney, 342. Derry ». Holman, 219. Des Arts v. Leggett, 393. Desha V. Stewart, 166. Des Moines Ins. Co. v. Mclntire, 77. Deutsche Bk. v. Berirs, 505. Devendorf r. Oil Co, 136. Devereaux v. Phillips' Estate, 150. , TABLE OF CASES CITED. References Devries v. Shamate, 37. De Witt V. Boring, 432. Dewitt V. Perkins, 258. DeWilt V. Walton, 122. Dicken v. ilall, oG3, 368. Dickens V Ileal, 343, 314, 345, 383. Dickerson v. Derrickson, 426, 430. Ulckersoa v. Turner, 342. Dickinson v. Cootes, 473. Dickinson r. Marsh, 178. Dietrich r. Uay hi, 58. Dillard v. Evans, 31, 501. Dillon V. Hussell, 434. Disborough 1'. Vanness, 214. District of Columbia r. Cornell, 104. Dively v Cedar Falls, 102. Dobbins v. Parker, 67. Dobree i\ Eastwood, 364, 36(5, 377. Dodd V. Bishop, 87. Dodd V. Doty, 223. Dodd V. Dunne, 38. Dodge r. Bank, 47,49. Dodge V. Emerson, 28, 502. Dodge V. Friedman's &c. Trust Co., 497. Dodge V. Haskell, 409. Dodge V. Nat. Exch. Bk., 308, 461. Dodson V. Taylor, 3G1, 370. Doc V. N. W. Coal & T. Co., 155, 270. Dollfus V. Frosch, 382. Donavan v. Flynn, 176. Donegan v. Wood, 340, 372. Donnell v. Bank, 327. Donnell r. Lewis Co. Sav. Bk , 384. Donnerbcrg v. Op[)cnheimer, 2G4. Donohoe-Kelly Bkg. Co. v. Puget Sound Sav. Bk.,225. Doolittle V. Lyman, 146. Uo.m V. Sliervvin, 226. Dorchester & Meilton Bk. v. New Eng- land Bk.,243. Dorsey v. Wolir(ln full), 56. Dorsey v. Wolff, 29. Doty V. Knox Co. Bank, 147. Doubleday v. Kress, 308, 499. Dougherty v. Dewney, 496, 497. Douglass V. Bank of Commerce, 313, 338. Douglass V. Cowles, 172. Douglass V. Ilowland, 428. Douglass r. Reynolds, 427, 428, 430. Douglas V. Waddle, 237. Dow V. Spcnny, 414. Dow V. Tuttlo, 67, 279. Dowr. iri)dike,30. Downer r Head, 89. Downer v. Ui-mer, 367. Downey r. Hick, 503. Downes i'. Church, 172. are to Pages. Downing v. Gibson, 264. Downs V. Planters' Bk., 362. Draper v. Clemens, 309, 318. Drake i-. Rogers, 39. Draper v. Sexton, 503. Draper v. Snow, 427, 428. Drapers. Wood, 410. Dreillingv. First Nat. Bk. (in full), 283. Drennan v. Bunn, 216. Dresser v. Mo. &c. Ry. Co., 261, 268. Drew V. Drury, 454. Drexler r. McGlynn, 353, 361, 366, 379. Driggs V. Abbott, 80. Driggs V. Rockwell, 264. Drum V. Drum, 403. Dryden v. Brilton, 202, 211. Dubois V- Meason, 224. Dncker v. Rapp, 434. Duckert i'. Von Lilienthal, 342, 343, 344. Dnfaur v. Oxenden, 174, 177. Dugan V. United States, 499, 501. Dugan V. U. S. Bank, 308. Duker r. Franz, 418. Dumonii'. Pope, 343. Dumont V. Williamson, 144, 214, 216. Dunavan r. Flynn, 37. Duncan v. Berlin, 176. Duncan v. Gilbert, 300. Duncan v. McCullough, 306. Duncan v. Scott, 255. Dunlap r. Thomson, 368. Dunn V. ?«lorri8, 211. Dunn r. Parson, 345. Dunn V. AVeslon, 264, 272. Durant r. Banter, 261. Dunlcn r. Smith, 382. Dure in r. Moeser, 201. Durham v. Giles, 433. Durham v. Price, 388. Dutch V. Boyd, 400. Dutchess Co. Ins. Co. v. Hatch, 274. Dutchess Co. Ins. Co. r. Ilatchfleld, 21. Dutton V. Marsh, 36. Duvall V. Craig, 98. Duvall V. Farmers' Bk., 389. D'Wolf r. Rabaud, 438,439. Dye V. Scott, 237. Dyer v. Gilson, 429. Dyer v. Homer, 196. Dykers r. Leather Mfg. Bk., 469. Dykcrs v. Leather Mfg. Co., 465. D) kcrs V. Townsend, S3. Dykman v. North, idge, l.')4,318. Dymock v. Midland Nat. Bank, 151. Dwlghtr. 5cov.ll, 884. iJwycr r. Markwortli, 103. xxxi TABLE OF CASES CITED. E Eadie v. Ashbaugh, 86. Eagle Bk. r. Hathaway, 364. Earhart r. Gant, 262. Eastf. Smith, 371. Easter r. Boyd, 61. Easterly v. Barber, 216. East Haddam Bk. v. Scoville, 358. Eastman v. Furman, 371. Eastman v. Plamer, 497. Eastman v. Shaw, 145,250. East Union v. Ryan, 104. Eaton V. McMahon, 385. Eutouf. Melius, 234, 235. Eberhart v. Page, 226. Eddy t'. Bond, 197. Edgell V. Sigerson, 352, 353. Edgerly v. Shaw, 77. Edgmon v. Ashelby, 304. Edis V. Bury, 9. Effingor r. Kichards, 66, 67. Eggcmann v. Ilenschen, 433. Ehrlcker. DeMeill, 27. Ehrler v. AVorthen, 271. Eilbert v. Finkbeiner, 226, EiBeley r. Harr, 436. Eitingi'. Brlnkerhoff, 171. Elford V. Teed, 349, 350. Elkhart v. Reidel, 87. Ellet r. Britton, 28. Elliott V. Deason, 38, 67, 264. Elliott V. Levings, 413. Ellis V. Ohio L. Ins. Co., 182, 414. Ellis V. Pulsifer, 97. Ellis V. Wheeler, 465. Ellsworth ■J'. Harmon, 429. Ellsworth r. St. Louis R. R. Co., 96. Ely V. Ely, 409. Ely V. James, 503. Emerson v. Burns, 274. Emerson v. Cutts,501. Emery r. Hobson, 148. Emery v. Marlaville, 104. Emly V. Lye, 133. Ernst r. Steckman, 26, 57. Episcopal Charitable Soc. v. Dedham Episcopal Church, 86. Epler V. Funk, 233, 234. Equitable Ins. Co. v. Harvey, 222. Equitable National Bk. v. Grifln & Skilley Co., 505. Erie Boot & Shoe Co. r. Eickenland, 95. Erwin v. Downs, 214, 310. Esau V. Greene Button Co., 200. Espy V. Bk. of Cincinnati, 182, 459, 462, 463. Essex Co. Nat. Bk. v. Bk. of Montreal, 462, 477. xxxii References are to Pages. Estate of Bk. of Pennsylvania, 304. Estes V. Lovering Shoe Co , 470. Etheridge v. Gallagher, 145, 263. Etting V. Schuylkill Bk., 362. Evans v. Anderson, 113. Evans v. Baker, 215. Evans w Foreman, 409. Evans v. Gee, 219. Evansville Nat. Bk. v. Kaufman, 427. Everett r. Tldball, 219. Everhart v. Buckett, 146. Eversole v. MauU, 264. Everson r. Carpenter, 76. Evertson v. Nat. Bank, 99. Exchange Bank v. Butner, 261. Exchange Bank v. Hubbard, 178. Exchange Bank v. Sutton Bank, 460, 46L 465, 469. Exchange Bank of St. Louis v. Rice, 174. Exchange Nat. Bk. v. Johnson, 499. Exeter Nat. Bank v. Orchard, 147. Ex parte Barclay, 358. Ex parte Cole, 38. Ex parte Hibbs, 406. Eyre v. Everett, 457. F Fairbanks v. Sargent, 294. Fairchild v. Ogdenburg, etc., R. R. Co. 100,384. Faler v. Jordan, 92. Fales V. Russell, 393. Falk V. Moebs, 134. Fall River Union Bank v. Wlllard, 171, 172. Farmer v. Perry, 427. Farmers' Bank v. Duvall, 318. Farmers' Bank v. Ewlng, 65, 66, 388, 389. Farmers' Bk. v. Gunnell, 382. Farmers' Bk. v. Reynolds, 434. Farmers' Bank of Bridgeport, v. Vail, 363. Farmers' Bank of Springvllle v. Shippey, 30. Farmers' etc. Bank r. Battle, 369. Farmers' etc. Bk. v. Butler, 255. Farmers' etc. Nat. Bk. v. Moxon, 271. Farmers' Nat. Bk. v. Sutton Mfg. Co., 95. Farmers' & Mech. Bk. r. Empire Stone Dressing Co., 190. Farmers' & M. Ins. Co. v. Needles, 96. Farmers' & M. N. Bk. v. Novlch, 410, 413. Farmers' & Trad. Bk. v. Carter Co., 463. Farmington S. Bk. v. Fall, 96. Farnsworlh v. Allen, 317, 336, 349, 360. Farnsworth v. Drake, 19. Farnsworth r. Mullen, 311. TABLE OF CASES CITED. References Farr v. Rick<>r (in full), 235. Farr v. Ricker, 210. Farrell v. Curtis, 468. FarwcU v. Salpaugh, 502. Farwell v. St. Paul Trust Co., 385, 386, 389, 393. Fossin V. Hubbard, 215, 360. Faucclt t'. Powell, 274. Faulkner t'. Ware, 273. Favorite v. Stidhani, 410. Fawsettr-. Nat. Life Ins. Co., 221,222. Faxon r. Ilollis, 403. Fay V. Fay, 146. Fay r Gaynon, 196. Fay r. Noble, 95, 116. Fay V. Smith, 410. Fayette Co. Sav. Bk. v. Steffes, 254. Fearing v. Clark, 40. Feiterr. Heath, 87. Fell V. Dial, 359. Fellows V. Prentiss, 434. Fcnn V. Dugdale, 499. Fenn v. Harrison, 133, 233. Fernandez v. Lewis, 167. Fernekes v. Bergenthal, 145. Ferree v. N. Y. Security &c. Co., 263. Ferris v. Bond, 12. Ferris v. Thaw, 135. Field V. Munson, 141. Field i\ Nlckerson, 214. Field v. Tibbltts, 267. Fieder v. Marshall, 173. Fllley V. Phelps, 93. Finley i\ Green, 226. First Nat. Bk. v. Adam, 150. First Nat. Bk. v. Alton, 150. First Nat. Bk. v. Babbridge, 269. First Nat. Bk. v. Ballou, 86. First Nat. Bk. v. Bensley, 170, 180. First Nat. Bk. v. Bentley, lo4. First Nat. Bk. v. Buckhannon Bk, 467. First Nat. Bk. v. Carpenter, 42'.). First Nat. Bk. r. Carson, 25. First Nnt. Itk. v. <'ecll, (In full), 156. First Nat. Bk. v. Cecil, 14'.>. First Nat. Bk. v. Clark, 17.5. First Nat. Bk. r. Com po- Board Mfg. Co , 252. First Nat. Bk. v. De Morse, 386. First Nat. Bk. v. Dubnque, S. \V. U. R. Co., 29. First Nat. Bk. v. Falkenhan, 390. First Nat. Bk. r. Forsyth, 268. First Nat. Bk. v. Fourth Nat. Bk., 167, 505. First Nat. Bk. v. Gaines, 432. First .\at. lik.t'. Garsldo, 174. First Nat. Bk. v. Gay, 29, 85, t6, 87. are to Pages. I First Nat. Bk. r. Getz, 272. First Nat. Bk. v. GIsh, 82. First Nat. Bk. v. Green, 274. First Nat. Bk. v. Gregg, 221. First Nat. Bk. v. Harris, 470. First Nat. Bk. v. Hartman, 391. First Nat. Bk. v. Johnson, 18. First Nat. Bk. v. Knevals, 503. First Nat. Bk. v. Laughlln, 29. First Nat. Bk. v. Leach, 462. First Nat. Bk. v. Leavltt, 434. First Nat. Bk. v. Linn Co., 465. First Nat. Bk. f. Marlow, 30. First Nat. Bk. v. Ma.xfleld, 389. First Nat. Bk. v. Maxwell, 493, 5a5. First Nat. Bk. r. Miller, 467, 469, First Nat. Bk. r. Morgan, 92. First Nat. Bk. v. Moss, 183. First Nat. Bk. v. Needham, 470. Flret Nat. Bk. r. North Missouri &c Co., 131. First Nat. Bk. v. N. W. Nat. Bk., 462. First Nat. Bk. v. Owens, 317. First Nat. Bk. v. Payne, 225. First Nat. Bk. v. Price, 24, 314. First Nat. Bk. r. Reno Co. Bk., 22L First Nat. Bk. r. Uyerson, 359, 369. First Nat. Bk. v. Scott Co., 268. First Nat. Bk. v. Shoemaker, 472. First Nat. Bk. v. Skeen, 26. First Nat. Bk. v. Slaughter, 29. First Nat. Bk. v. Slette, 29. First Nat. Bk.r. Sproull, 273. First Nat. Bk. v. Strang, 200. First Nat. Bk. v. Stuetzer, 98. First Nat. Bk. v. Wade, 258. First Nat. Bk. r. Wallis, 270. First Nat. Bk. r. Weston, 148. First Nat. Bk. v. Whitman, 177. First Nat. Bk. t: Wolff, 415. First Nat. Bk r. Wood, 368. First Nat. Bk. r. Zclma, 25.3. First Nat. Bk. of Portland v. Schuyler, 190. First Nat. Bk. of Salem v. Grant, 222. First Nat. Bk. of Trenton i\ Gray, 21». Fish f. First Nat. Bk., 214. Fish V. Hubbard, 141. Fisher r. Beckwlth, 171. Fisher v. Fisher, 300. Flske V. Eldrldge, 98. Fiske V. Pratt, .3.'>9. Fitch V. Jones, 06. Fltchburg Bk. c. Greenwood, 215. Fitlcr r. Beckley, 320, 321. Fltzharrls v. Leggatt, 29. Fitzmaurlce r. Mosier, 601. Flanagan v. Brown, 221. Flanagan v. Meyers, 39. xxxiii TABLE OF CASES CITED. References ar Flanagan v. Nat. Bk. of Dover, iOl. Flanders v. Chamberlain, 305. Fleschman v. Stern, 255. Fleming v. Gilbert, 67. Fletchers. Ark. N. B., 343. Fletcher v. Blodgett, 66. Fletchers. Dickinson, 299. Fletcher v. Jackson, 436. Fletcher v. Pierson, 308, 469. Fletcher v. Schaumberg, 270. Fletcher v. Thompson, 355. Flights. McLean, 20. Flint V. Flint, 213, 218. Florence Min. Co. v. Brown, 472. Flour City Bank v. Grover, 273. Flournoy v. First Nat. Bk., 183. Flowers v. Bitting, 13. Flynn v. Mudd & Hughes, 454. Fogarttes v. State Bk., 472. Foland v. Boyd, 384. Folger V. Chase, 218, 318, 412. Forbes v. Espy, 50. Forbes v. Omaha N. B., 369. Ford V. Angelrodt, 179, 181. Ford V. Ford, 408. Fordyce v. Nelson, 213. Foreman v. Buckwith, 201. Forster v. Fuller, 107. Forster I'. Second Nat. Bank, 200. Forsyth v. Day, 84. Fort Dearborn N. Bk. v. Carter, 175. Foster v. Clifford, ISO. Foster v. Gaston, 434. Fosters. Mackinson,287. Foster!'. Paulk, 143. Foster v, Shattuck, 19. Fountain v. Anderson, 105. Fountain v. Bookstaver, 218. Fourth Nat. Bk. v. Altheimer, 365. Fourth Nat. Bk. v. City Nat. Bk., 495. Fourth Nat. Bk. v. Henschen. 168, 310, 360. Fowler V. Gate City N. Bk., 177. Fowler v. Strickland, 260. Fox V. Bank, 285. Fox V. AVebster, 353. Froy V. Blackstone, 40. Fraker v. Cullom, 409. Fraker v. Little, 415. Fralich v. Norton, 28. Frank v. Irglns, 144, Frank v. Kalgler, 213. Frank v. Lanier, 199. Frank v. Lillenfeld, 224. Frank v. Wessels, 25, 31. Frankland v. Johnson in full), 125. Frankland v. Johnson, 97. Franklin v. March, 23. Franklin v Twogood, 201. xxxiv e to Pages. Franklin v. Vanderpool, 393. Franklin Ave. Ger. Sav. Inst. v. Board of Education, 135. Franklin Bank v. Freeman, 464. Franklin Bank v. Lynch, 179. Franklin L. Ins. Co. v. Courtney, 410. Franklin Life Ins. Co. v. Wallace, 502. Franklin Sav. Bank v. Reed, 66, 68. Frayser v. Dameron, 309. Frazer v. D'Invilliers, 215. Frazier v. Trow Printing Co., 11. Freanorv. Glngling, 434. Frederick v. Winans, 211, 244. Freking v. Rolland, 109. Freeman v. Benedict, 503. Freeman v. Bingham, 211. Freeman v Boynton, 168, 169, 501. Freeman I'. Ellison, 216. Freeman v. O'Brien, 214. Freeman v. Perry, 201. Freeman's Bank r. Ruckman, 34. Freeman's Nat. Bk. v. Nat. Tube Works, 221,243. Freese I'. Brownell,113. Frenall v. Fitch, .35. French r. Bk. of Columbia, 150,383, 393. French v. French, 152. French v. Jarvis, 222, .3.i9, ,360, 498. French v. Price, 89. French v. Talbot Pat. Co., 274. Freund v. Imp. & Trad. N. Bk., 201, 291, 293, 461. Friend r. Duryee, 91. Friend v. Williamson, 363. Frost V. Stokes, 312. Fry V. Evans, 107. Frye v. Lucker, 96. Fuller V. Goodnow, 248, 265. Fuller V. Hooper, 136, 384. Fuller V. Leonard, 166. Fuller V. Scott, 225, 431. Fuller V. Smith, Ryan & Mood, 234. Fulton V. MacCracken, 343. Funderburk v. Gorham, 106. Fnnk \. Babbitt (in full), 41. Funk V. Babbitt, 16. Furber v. Caverley, 23, 390. G Gaar v. Banking Co., 59. Gage V. AveriU, 223. Gage V. Mechanics' Bank, 429. Gaines i-. Manney, 323. Galbraith r. Townsend, 433, 434. Gale r. Miller, 36, 37. Galena v. Corwith, 102. 103. Galway v. Fullerton, 200. Gaudy v. Babbitt, 104. TABLK OF CASES CITED. References Gardner v. Gardner, Hi. Gardner v. Maynard, 497, 498. Gardner v. AVatson, 435. Gardner v. Cohen, 153. Garnelt r. Woodcock, 351, 362. Garrard v. Lewis L. R., 412. Garretson v. North Atchison IJk., 177, 179, 463. Garrett v. Interstate Bank, 33. Garrigus v. Home &c. Soc.,38. Garver v. Downic, 365. Garvin v. Wiswell, 197, 212. Gates V. Beecher, 168, 310, 312, 370, Gates V. McKee, 427. Gates V. Parker, 178. Gates r. Union Bank, 152. Gaul V. Willis, 259, 260. Gause v. City of ClarksvUle, 102. Gawtry v. Doane, 341, 342, 372, 386. Gay f. Mott, 149. Gay V. Rooke, 23. Gaylord V. Van Loan, 24. Gazzam v. Armstrong, 181. Geary v. Physic, 52. Oeddes t. Blackmore (in fall), 281. Geddes v. Blackmore, 252. Gelb V. Reynolds, 502. George v. Surrey, 52. Georgia Nat. Bank v. Henderson, 314, 459, 460. Germanla Bank v. Distlcr, 11. Germania Bank v. Follette, 216. German Nat. Bank v. Studley, 86. Germanic Nat. Bank v. Taaks, 177. Germ. Secur. Bk. v. McGnrry, 372. Gessner v. Smith, 339, 340, 345. Gettysburg N. Bk. v. Chlsolm, 407, 410, 413. Gibbs V. Linabury, 254. Glbert v. Sless, 145. Gibson V. Hunter, 49. Glbsonv. Miller, 262,273. Gibson V. Tobey, 503. Glddings V. Giddings, 38. Giffcrtf. West, 199. Glflord V. Harden, 468, 471. Gilbert V. Dennis, 369. Gilbert v. Nantucket Bk., 212. Gilbert v. Seymour, 212. Gilbert r. Sharp, 291, 293. , Gilchrist V. Donnell, 314, 363, 386. Glllf. Palmer, 370. Glllett V. New Market Sav. Bk., 98. Gillettr. Sweat, 410. Gilliam v. Uavis, 497. Gillilan v. Meyers, 22, 18.1. Gilman v. County of Douglass, 500 Gllmore V. lllr.'4t,29. Qilroy v. Brlnkley, 382. are to Pages. Girard Bk. v. Bk. of Penn. Twp., 462. Gist V. Lybrand, 308. Givensv. Merchants' Nat. Bk., 216, 217, 392. Glascock V. Robards, 147. Glaserr. Rounds, 386. Glasgow i: Pratte, 359, 369. Glaze V. Ferguson, 391. Glen V. Farmers' Bank, 146. Glen V. Noble, 464. Gllcksman v. Earley, 370. Glldden r. Chamberlain, 392. Gloucester Bk. r. Saline Bk., 414. Gobble v- Linder, 59. Goddard r. Merchants' Bk.,501. Goddard's Case, 62. Goetz V. Bank of Kansas City, 221. Goizlan v. Steinkamp, 145. Gompertz v. Bartlett, 234, Good r. Jtartin, 149,223, 224, 226,427. Gooding v. Underwood, 173. Goodloe V. Godley, 317. Goodlowe V. Taylor, 26. Goodman v. Litaker, 432. Goodman v. Ramsey Co., 103. Goodman v. Simonds, 11, 145, 154, 155, 248, 273. Goodnow V. Warren, 361, 380. Goodsell i\ Meyers, 77. Goodspeed v. Cutler, 409. Goodwin V. Davenport, 202, 211. Gordons. Adams, 38. Gordon v. Boppe, 151, 261. Gordon v. Preston, 265. Gordon v. Price, 503. Gorham v. Kcyes, 116. Gorman v. Ketchum,218. Oostaen fiat. Bk. v. Biug'iiam (la full), 290. Goshen Nat. Bk. v. Biugham, 463. Gould V. Stephens, 258. Goupy V. Harden, 233. Gowan v. Jackson, 170. Grafton Bk. r. Cox, 314, 385, 386. Graham 1-. Langston, 371. Grand Bank v. Blanchard, 318. Grange v. Relgh, 466. Granite Ry. Co. v. Bacon, 411. Grant r. Ellicott, 150, 271. Grant v. Hunt, 175. Grant r. Kidwell,261. Grant v. Treadwell Co., 96. Grant v. Walsh, 248, 274. Graul V. Struizel, 305, 359. Graves v. Am. Exch. Bk., 461. Graves v. Bank, 422. Graves v. Kellenbergen, 92. Graves v. Lllford, 394. Gray v. Bank of Kentucky, 271. XXXV TABLE OF CASES CITED. References ar Gray v Mllner, 16, 173. Gray v. Rowden, 23. Greathead v. Walton, 11. Greatlake v. Brown, 309. Green v. Borroughs, 429. Green v. Daveis, 17. Green v. Elson, 338. Green v. Louthain, 338. Green v. Raymond, 314, Green v. Russell, 502. Green v. Shepherd, 157. Greent'. Skell, 88. Green v Wilkie, 264. Greenby v. Wilcocks, 195. Greene v. Thompson, 430. Greener v. Ulerey, 96. Greenfield Bank v. Crafts, 86. Greenfield Sav. Bk. v. Stowell, 413. Greening v. Patten, 496. Greenough v. Smead, 168. Greenwell v. Haydon, 263. Greer V. Bush, 427. Gregg V. Beane, 467. Gregg V. Union etc. Nat. Bk., 266. Grlerson v. Mason, 138. Grieve v. Schweitzer, 499. Griffin v. Goff, 314. Griffith V. Cox, 410. Griffith V. Reed, 498. Griffith V. Sltgreaves, 255, 433. Griffiths V. Wells, 146. Grlggt'. Gilmer, 439. Grlgsby v. Ford, 310. Grimball v. Marshall, 341. Grimes v. Hillenbrand, 146. Grimshaw v. Bender, 4. Grlmstead v. Brlggs, 408. Grlnman v. Walker, 364, 365. Griswald v. Davis, 151. Grlswald v. Waddlngton, 395. Grommes v. Sullivan, 96. Groth V. Gyger, 309. Oniguon v. Union Trust Co. (in full), 324. Gulgnon v. Union Trust Co., 313, 314. Guild V. Belcher, 146. Guild V. Butler, 432. Guild V. Gayer, 498. Gumz V. Glegling, 226. H Haber v. Brown, 386. Hackettstown v. Swackhamer, 102, 103. Hadden v. Rodkey, 201. Hagar v. Whitmore, 224. Hagerthyv. Phillips, 217. Haggard v. Conkwright, 82. Haggland v. Stuart, 274. xxxvi e to Pages. Haines v. Dubois, 217. Haines v. Nance, 21, 34, 98, 177. Halbert v. Ellvvood, 22. Halch V. Burroughs, 146. Hale V. Andrews, 435. Hale V. Brown, 79. Hale V. Burr, 309, 386. Hale V. Danforth, 216, 217, 391 Hale V. Hitchcock, 201. Hale V. Rice, 200. Hall V. Allen, 197. Hall V. Auburn Turnpike Co., 95. Hall V. Bradbury, 88. Hall V. Cordell, 176, 179. Hall V. Crandall, 87, 97. Hallowell v. Curry, 362. Hall V. First Nat. Bk., 178, 179, 183. Hall V. Flanders, 176. Hall V. Hickman, 36. Hall I'. Kimball, 497. Hall V. Lauderdale, 87. Hall V. Mobile &c. R. R. Co., 203. Hall V. Smith, 435. HalU'. Steele, 178. Hall V. Storrs, 494. Hall V. Toby, 24. Hallowell V. Curry, 318. Hallowell Nat. Bk. v. Marston, 389. Ilalsted V. Calvin, 251. Hamilton v. Brooks, SO. Hamilton v. Hooper, 407, 408, 410. Hamilton v. Johnston, 613. Hamilton v. Marks, 257, 278. Hamilton v. Vought, 257, 270. Hamilton v. Winona Salt Ac. Co., 468. Hammett v. Brown, 22. Ham met 1 1\ True worthy, 391. Hammond v. Varian, 86. liamor v. Moore, 205. Hance V. Miller, 431. Handy v. Sibley (in full), 295. Handyslde V. Cameron, 13, 84. Hanger v. Abbott, 82. Hanks I'. Brown, 145. Hanerw. Patterson, 226. Hapgood V. Pol ley, 148. Harbison v. Bank of Indiana, 274. Hardie v. Mills, 201. Hardy v. First Nat. Bk., 269. Hardy v. Waters, 77. Harger v. Worrall, 145, 273. Harkerv. Anderson, 465. Harlan r. Ely, 495. Harper v. Stroud, 410. Harper r. Worrall, 191. Harrington v. Brown, 149. Harrington v. Butte & B. Min. Co., 268. Harris v. Brooks, 432, 433. Harris v. Carmody, 255. TABLE OF CASES CITED. References are to Pages. Harris r. Clark, 310. Harris v. Coleman & Ames&c. Co., 98. Harris r. Johnston, 504. Harris v. Lewis, 2-t. Harris v. Robinson, 386. Harris v. United States, 104. Harrison I'. Crowder, 317. Harrison v. Harrison, 52. Harrison v. Nicollet Nat. Bk., 460. Harrison v. Rasciic,358. Harrison i'. Trader, 383. Harrison I'. Wright, 472. Harrop v. Fisher, 291, 292. Harsh v. Klepper, 407. Hartv. Bridge Co., 451. Hart V. Eastman, 359. Hart V. Harrison Wire Co., 34. Hartv. McLellon, 866. Hart V, Mo. &c. Ins. Co., 96. Hart V. Taylor, 25. Hartford Bk. v. Barry, 316. Hartford Bk. v. Siedman, 306, 362. Hartleys. Case, 371. Hartman v. Shaflfer, 143. Harvey v. Cane, 13. Harvey v. Irvine, 98. Harvey v. Nelson, 390. Harzfeld v. Converse, 492, 493. Hasbrook v. Palmer (In fall), 54. Hasey V. White Pldgeon Co., 172. Haskell I'. Boardman, 362. Haskell r. Brown, 196. Haskell v. Champion, 410. Haskell v. Jones, 271. Haskell r. Mitchell, 202, 291, 292. Hastings f. DoUarhlde, 77. Hatch V. Johnson Loan & T. Co., 248, 265. Hatch r. Searles, 252. Hatchett r. Molton,439. Hately V. Pike, 98, 224. Hathcock V. Owen, 17, 197. Hatlcy V. Jackson, 389. Haven v. Grand Junction R. R. Co.,9!i. Hawkes v. Plillllim, 149, 427. Hawkey V. Borwick,347. Hawkshaw v. Parkins, 457. Hay r. Green, 195. Hay V. Jackele, 272. Haydenv. Goodnow, 409. Haydenv. Weldon, 224. Haydock v. Lynch, 144. Hayes v. Matthews, 412. Hayes v. Ward, 434, 457. Ilaynesr. Blrks, 363. Hays r. Citizens' Sav. Bk., 339. Hnys r. Morgan, 404. Hay ward r. French, 90, 92. Hayward v. Pilgrim Society, 95. Haywood v. Haywood, 80. Hazard i\ Grlswold, 255. Hazard v. Spencer, 311. Head V. Cole, 272. Heard v. Dubuque Co. Bank, 429. Hcartt V. Rhodes, 465. Heath v. Achey,503. Heath v. Silverthorn Mining Co., 154. lleaton v. Meyers, 133. Ilebcrle v. O'Day, 176. Hecht V. Batcheller, 216. Hedges v. Sealy, 291. Hedley v. Balnbrldge, 91. Heenan v. Nash, 93, 173. Heffron v. Gage, 330. Hcgeler v. Comstock,29. Hegeman v. Moon, 9. Helner v. Dawson, 256. Heist V. Hart, 271. Heifer t'. Alden, 36. Hemmelman v. Hotallng, 470, Hemmenway v. Stone, 411. Hemmlngway v. Matthews, 80. Hendershot V. Neb. N. Bk., 363. Henderson v. Bondnrant,2.52. Hendrie v. Kinnear, 225. Henrietta Xai. Bank v. State Nat. Bank (in full), 473. Henrietta Nat. Bk. v. State Nat. Bk., 463. Henry i\ Cohnan, 60, 67. Henry v. Conley, 504. Henry v. Ileeb, 86. Henschcl v. Mahler, 27. Hensel v. Chicago etc. R. R. Co., 40, Henshawr. Root, 398. Hepburn v. Griswold, 50O. Ilereth v. Merchants' Nat. Bk., 258. Herrlck I'. Baldwin, 385. Herrlck v. Woolvcrton, 266. Herrimun i<. Shonion,501. Herring v. Woodhull, 213, 218, 419. Hersey v. Flliott, 82. Hervcy r. Harvey, 410, 418. Hervey r-. Smith, 413. Hibbard v. Russell, 377. Hlblerr. Shipp, 434. Hicks r. Hinde, 140, 141. Higglns V. RJdgway,269. Hlgglnsf. Willis, 80. Highland r. Dresser, 427. Ilighniore v. Primrose, 35. Hlghsmlih f. .Martin, 248. Illldeburn t-. Turner, 342. Hlllr. Alexander, 197. Hill V. Banister, 104. mil 1-. Dunham, 11. Hill t'. Martin, 393. Hillf. Reave, 403. xxxvii TABLE OF CASES CITED. References Hill V. Shields, 263. IIill V.Todd. 35. Hills V. Bannister, 12'2. Hills V. Place, 34, 180, 303, 304. Hinckley v. Union Pac. R. R. Co., 263. nines V. Allely, 160. Hinkley v. Fourth Nat. Bk., 211. Hirschfeldcr v. Lacey Ac. Mfg. Co., 369. Hirshfleld v. Ft. Worth Nat. Bk., 316. Hirst V. Brooks, 265. Hitchcock V. Hogan, 316. Hoag V. Greenwich, 103. Hoare v. Cazenove, 182. Hobbs V. Chemical Nat. Bk., 344. Hobbs V. Straine (In full), 404. Hobbs V. Straine, 365, 373, 392. Hobson V. Davidson, 503. Hobson V. Hassett, 152. Hodges V. Gait, 368. Hodges V. Schuler, 30, 370. Hodson I). Eugene Glass Co., 274. Hoester v. Sammelmann, 353. Hoffman v. Bank of M.lwaukee, 145, 147, 166, 182, 183, 191, 264. Hoffman v. Foster, 264. Hoffman V. Ilolllngsworth, 305, 386. Hoffman v Smith, 383. Hogan V. Moore, 255, 264. Hogarth v. Wherley,84. Hogue V. Davis, 217. Holbrock v. Camp, 225. Holbrock v. Payne, 178. Holcomb V. Beach, 197. Holcomb V. Wyckoff, 261. Holden v. Bank, 124. Holden v. Bloxum, 93. Holddworth v. Hunter, 5, 6. Holland v. Hatch, 412, 418. - Holland v. Johnson, 434. Hollen V. Davis, 33, 54. Holloway v. Porter, 34. Holmes v. Bemls, 150. Holmes v. First Nat. Bk., 216. Holmes v. Hooper, 222. Holmes v. Lyklns, 504. Holmes v. Preston, 226. Holmes v. Railway Co., 513. H limes V. Roe, 466,467. Holmes v. Trumper, 413. Holmes V. Williams, 146. Holt V. Bodey, 15. Holt V. Ross, 183. Holton V. Hubbard, 268. Holtz V. Boppie, 168. Holzworth V. Koch, 154. Hood V. Hallenback, 140. Hoodless V. Reld, 502. Hookr. Pratt, 34,221. Hooper v. Williams, 438. xxxviii are to Pages. Hoover v. Glasscock, 389. Hoover v. McCormick, 148, 389. Hope r. Barker, 29. Hopkins v. Hawkeye Ins. Co., 254. Hopkins V. Page, 396. Hopkinson f . For8ter,473. Hopper V. Eiland, 113. Hopps V. Savage, 174. Horner v. Horner (in full), 73. Horst V. Wagner, 407. Horton v. Bayne, 270. Horton v. Garrison, 140. Horstman v. Henshaw, 182, 183. Hotchkiss V. Fitzgerald &c. Plaster Co., 262. Hotchkiss V. Moskey, 23. Houck V. Graham, 436. Hough V. Insurance Co., 492. Hougb V. Loring, 178. Houghton V. Ely, 225. Houghton V. First Nat. Bk , 87. Houghton V. Francis, 57, 412. Housatonic Bk. v. Laflin, 371. House V. Adams, 166, 881, 382, 395. House V. Grant, 204. Hovey v. Hobson, 78. Hovey v. Magill, 98. Howards. Chapman, 494. Howard v. Hinckley & E. Iron Co., 152. Howard v. McDonough, 404. Howard v. Palmer, 21. Howard Bank v. Carson, 360. Howe r. Bradley, 365. Howe V. Hartness, 266. Howe V. Merrill, 214, 226. Howe V. Taggart, 410. Howenstein v. Barnes, 29, 60. Howland v. Adrain, 370. Howland v. Edmonds, 265. Howzy V. Eppinger, 257. Hoxie V. Hodges, 148. Hoyt V. Lynch, 17. Hoyt V. Seeley, 464, 465, 469. Hubbard v. Chapin, 261. Hubbard v. Guernsey, 15. 217, 432. Hubbard v. Matthews, 309, 360, 381. Hubbard i'. Rankin, 2,54. Hudson V. Emmons, 28. Hudson V. Walcott, 237. Hnertenaatte v. Morris (in full), 188. Huffakerv. Nat. Bk. of Montlcello, 318, 343. Hughes V. Bowen,392. Hughes V. Frum, 196. Hughes r. Kellogg, 355. Hughes V. Kiddell,213. Hughes V. Nelson, 82, 293. Hughes V. Wheeler, 143. Huguley v. Morris, 91. TABLE OF CASES CITED. References are to Pa^es. Haling v. Hugg, 21. Hull V. Meyers, 217. Huiner. Watt, 360. Humphreys Finch, 252. Humphrey v. Ultt, 435. Humphreys v. Crane, 408. Humphreys v. Gulllow, 409. Humphreys v. Wilson, 84. Humphreyville i\ Culver, 197. Humphries v. Blcknell, 464, 466. Humphries r. Nix, 36. Hungerford v. CBrien, 427, 431. Hunt V. Adams, 429, 431. Huntv. Chapln, 91. Hunt V. Gray, 407. Huntv. Hunt, 204. Hunt V. Johnson, 145. Hunt r. Knickerbocker, 146. Hunt V. Mason, 145, 148. Hunt V. Maybie, 309. Hunt I". Nevers, 304. Hunt V. Railway Co., 137. Hunt V. Wadlelgh, 305, 393. Hunter r. Hennlnger, 196. Hunter i\ Jeflfery, 19. Hunter r. Parsons, 145. Hunter f. Wood, 304. Hunting v. Emnicrt, 180. Huntington v. Harvey, 392. Huntington v. Wellington, 429. Hnrlbutv. Hall, 407, 410. HurtiJ. Ford, 38. Huse V. Flint, 503. Huse V. Hamblin, 32, 503. Huse V. McDanlcl, 503. Hussey i". Winslow, 23. Huston V. First Nat. Bk., 214. Huston V. Young, 11. Hatchings v. Low, 197. Hutchinson r. Brown, 40. Hutchinson v. Simon, 213. Hutchinson v. Crutcher, 313, 385. Hyde v. Goodnow, 38. Hyman v. Am. Elec. Forge Co., 248. Hypes V. Griffin, 88. Ilsley V. Jones, 175, 179. Imperial Land Co., In ro, 36. Importers etc. Nat. Bk. i\ Llttel, 260. Importers' & Traders' Nat. Bk. v. Shaw, 360, 373. Indiana etc. R. R. Co. v. Davis, 100. Indig r. Nat. City Bk., 468. Industrial Bk. of Chicago v. Bowes, 469. Industrial Tr. & Sav. Co. v. Weakley, 46S. IngersoU r. Martin, 143, 145, Innes v. Munro, 68. In re Armstrong, 178. In re Parisian Cloak & Suit Co.'a Es- tate, 311. Insurance Co. v. Bruce, 256. Insurance Co. v. Grant, 114. Insurance Co. i-. Stanford, 495. Insurance Co. r. Wright, 446. International Bank v. Bowen, 498. International Trust Co. v. Wilson, 269. Iowa Valley State Bk. v. Slgstad, 389. Irby V. B lain, 258, 262. Ireland v. Kip, 369. Irickr. Black, 435. Iron Mountain Bk. v. Murdock, 410. Irvine v. Adams, 432, 434. Irving Bank i\ Alley, 20. Irving Bank v. Wetherald, 175, 183, 46S. Isbell V. Lewis, 364, 305, 385, 386, 392. Israel v. Gale, 1.10, 152. Ives V. Bank, 54. Ives V. Farmers Bk., 40, 410. Ivory V. Bk. of the State, 460. Ivory V. Michael, 252. Jaccard r. Anderson, 390. Jacks V. Darrin, 469. Jackson r. First Nat. Bk.,272. Jackson v. Gumear, 78. Jackson v. Hardin, 348. Jackson v. Love, 307. Jackson v. Meyers, 36, 99. Jackson v. Packer, 304, 311. Jackson v. Richards, 393. Jackson v. Wood, 15. Jacobs V. llifcbell (In full), 70. Jacoby-Micholas Co., In re, 95. Jjicqnin v. Warren, 23. Jaffray v. Brown, 225. Jaffray v. Crane, 435. Jaffray r. Krauss, 305. Jaggar Iron Co. v. Walker, 503. James v. Chalmers, 222. Jameson v. Jameson, 266, 267. Janscn v. Grirashaw, 6()3, 504. Jacqua v. Montgomery, 256. Jarlngcn v. Stratton, 359. Jarvis V. Garnelt, 312, 342. Jarvls r. St. Croix Mfg. Co., 366. Jarvis V. WIlBon. 22, 166, 176, 183. Jefts r. York, 87, 97, 98. Jenkins r. While, 391. Jenkins r. Wilkinson, 200. Jcnne i'. Ward, 178. Jeiinln^M v. Totid (In full), 275. Jennings v. Todd, 270. Jenuison r. Parker, 307. xxx'ix TABLE OF CASES CITED. References are to Pages. Jerome v. McCarter, 82. Jcssup V. Stenrer, 89. Jillsonv. 11111,304. Joest I'. Williams, 79. John V. City Nat. Kank, 313. Johnson v. Bank of U. S., 411. Johnson v. Blanks, 200. Johnson v. Brown, 315, 466. Johnson v. Carpenter, 203. Johnson v. Clark, ITS. Johnson v. Cocks, 370. Johnson v. Glover, 511. Johnson v. Ilarlh, 359, 376. Johnson v. Ha: vc> , 436. Johnson v. n<.agan,66. Johnson v. Jobnson, 493. Johnson v. Laird, 55. Johnson v. Mangum.lOT. Johnson v. McMurray, 273, 274. Johnson v. Mitchell, 197, 212, 219, 221, 429, 433. Johnson v. Parsons, 389, 390. Johnson v. Ramsey, 217. Johnson v. Smith, 98. Johnson v. Suburban Realty Co., 270. Johnson v. Way, 2o7. Johnson Co. Sav. Bk. v. Lowe, 390, 391. Johnston v. Allen, 501. Johnston v. Dickson, 144. Johnston v. jNfay, 408. Johnston v. McDonald, 225. Johnston v. Mills, 426. Johnston i\ Speer, 196. Jones 1'. Beriyhill, 271. Jones V. Broadhurst, 498. Jones V. Brown, 24. Jones V. Burden, 274. Jones V. Council Bluffs &c. Bk., 179. Jones V. Crosthwalte, 234. Jones V. Dow, 429. Jones V. Fales, 06, 212, 318. Jones V. Fort, 501. Jones V. lleiligcr, 338, 465, 505. Jones V. Kuhn, 427. Jones V. Le Tombe, 100. Jones V. Lewis, 367. Jones V. Radlitz, 29. Jones V. Ryde,233, 234: Jones V. Sales. 55. Jones V. Shapers, 220. Jones v- Shaw, 40. Jones V. Simpson, 28. Jones V. Thayer, 429. Jones V. Warden, 387. Jones V. Wilson, 155, 247, 262. Jordan v. Dobbins, 427. Jordan v. WheeK r, 171, 186. Joseph V. Natl. Bank, 252. Joslyn V, ColUnson, 149. Xl Joyner r. Turner, 305. Judah V. Harris, 55. Juillard v. Chaffee, 138. Juillard v. Green man, ,f)00. Juniata Bk. v. Hale, 358, 369. Junge V. Bowman, 88. Junker?'. Rush, 435. Jury v. Barker, 25. Kahm r. King Bridge Mfg. Co., 145. Kahn r. Wnllon, 73, 463. Kaiser r. First Nat. Bk., 270. Kaiser r. U. S. Nat. Bank, 155. Kalamazoo Nat. Bk. v. Clark, 254. Kannady v. Lambart, 439. Kaufman v. Barringer, 177. Kavanaugh v. Farmers' Bk. of Maltland, 461. Kayser v. Hall, 20. Kayser r. Hodopp, 150. Kearney v. King, 5. Keck V. Brewing Co., 136. Keene i'. Beard, 4.59, 464. Keith V. Jones, 54. Kelley !•. Greenough, 176. Kelley v. Hemingway, 24. Kelley v. Whitney, 203, 215, 257, 268, 27L Kellogg V. Curtis, 145, 274. Kellogg V. Schnaake, 263. Kelly V. Bronson, 27. Kelly V. Brown, 465. Kelly V. Bnrrongh (in full), 160. Kellman v. Calhoun, 273. KclseaiJ. Fletcher, 403. Kelsey v. McLaughlin, 213. Kelso V. Frye, 67, 279. Kempson v. Sanders, 234. Kendall v. Galvin, 114. Kennedy v. Bank, 416. Kennedy v. Chapin, 497. Kennedy v. Evans, 464. Kennedy v. Knight, 98. Kenner v. Creditors, 174. Kenton Ins. Co. v. McClellan, 80. Kenworth v. Sawyer, 80. Kenyon v. Williams, 88. Keohane v. .Smith, 203. Kephart v. Butcher, 235. Kern v. Von Phul, 389, Kernohan v. Durham, 263. Kcrrick v. Stevens, 308. Kesslerv. Hall, 106. Ketchum v. Buffalo, 102. Kidder v. Mcllhenny, 203. Kilbreath v. Gaylord, 267. Kiley v. Frosie, 131. Kilgore v. Buckley, 371. TABLE OF CASES CITED. References Kilkelly v. Martin, 410. Killby V. Rochossen, 377. KiUian v. Ashley, 225. Klllough V. Alford, 500. Kimball v. Blttner, 87. Kimball V. Bryan, 382. Kimball Co. v. Mellon, 26. Kimbro v. BuUett, 90, 91. Klncaid v. HlgRlns, 27. King V. Baldwin, 435. King V. Crowell, 312, 318. King V. Fleming, 11, 12, 39. Kingr. Holmes, 313. Klngr. Hunt, 410. King V. Hurley, 370. King V. Lambton, 114. King V. Ritchie, 244. Kingsbury v. Wall, 24. Kingston Sav. Bk. v. Bosserman, 408. Kinney v. Flynn, 17. Kinney v. Kruse, 204. Kinsley v. Robinson, 382, 383. Kinsman v. Blrdsall, 148. Klnyon v. Stanton, 469. Klnyon v. Wahlford, 250. Kirk V. Dodge Co. Mut. Ins. Co., 25, Kirkman v. Bank, 114. Klrkman v. Bank of America, 38. Kirkman v. Benham, 106. Kirkman v. Hamilton, 439. Klrkpatrick v. Hawk, 434. Klrkpatrlck v. I'uryear, 4(i9. Klrschner v. Conklln, 216, 217. Klrtland v. Wanzer, 338. Kittle V. Delamater, 211, 263. Kleckamp v. Meyer, 309. Klein V. Currier, 427. Klein V. Kelser, 212. Klelnman v. Boernsteln, 365. Klochenbaum r. Plerson, 370. Klopferi'. Levi, 183. Klosterman v. Kage, 392. Knapp V. Hoboken, 102, 104. Knapp V. Smith, 109. Knickerbocker L. Ins. Co. v. Pendleton, 383. Knight V. Hullbcrt, 13. Knight V. Putnam, 259. Knott f. Tldyman,269. Knott f . Vcnable, 107, 315, 308. Knaus r. Major, 428. Knowles V. Kiiowleet (In full), 158. Knowlton v. Bradley, 105, Knowlton v. Cooley, 22. Knox V. Clifford, 11. Knox V. Keeslde, 180. KnoxvUle Nat. J!k. v. Clark, 413. Koch r. Howoll, 178. Koulg ('. Bayard, 181. are to Pages. Koons V. Davis, 279. Kost v. Bender, 265. Kountz V. Kennedy, 407. Kramer v. Sandford, 388. Krouskop V. Shoutz, 68. Kragman v. Soule, 435. Krumm v. Beach, 109. Kuhns V. Gettysburg, Nat. Bank, 274. Kuntzr. Tempcl,316. Kyle V. Thompson, 308. Labodlole v. Landy, 382. Lacoste v. Harper, 384. Lacy V. Sugarman, 82. La Due V. First Nat. Bk , 266. Lallin R. R. Co. v. Nusheimer, 176. La Grange Inst. v. Anderson, 77. Laird v. Davidson, 211. Laird v. Warren, 57. Lamb v. Brlggs, 427. Lamb v. Matthews, 197, 499, Lambert i'. Clewlcy, 154. Lambert v. Ghiselln, 386. Lambert v. Sandford, 432. I.amUin v. Kdgerly (in full), 372. Lamkln v. Edgerly, 366. Lamkln i-. Nye, 315. Lampet's Case, 195. Lancaster Co. Bk. v. Moore, 78. Lancaster Nat. Bk. v. Garber, 257. Lancaster Nat. Bk. v. Taylor, 202, 262. Lancey v. Clark, 496. Land Co. v. Rhodes, 327. Landon v. Bryant, 391. Lane v. Bank of West Tennessee, 369. Lane v. Krekle, 19, 50. Lane v. Stacy, 217. Lang I'. Smyth, 5. Lange v. Koline, 31. Langerberger r. Kroegcr, 318. Langford v. Varner, 152, 247. Lanier v. Union Mfg etc. Tr. Co., 248. Lank v. Morrison, 2;4. Lanussc v. Barker, 426. Lapeyre v. Wcaks, 104. Large v. Kohne, 55, Larsen v. Breene, 477. Lary v. Young, 391. Latham v. Houston Flour Mills, 226. Lathropr. Donaldson, 273. Laughlin v. Wright, 305. Lavellette v. Wendt, 267. Law V. Crawford, 30. Lawrence v. Dobyns, 215, £05, 318, 347. Lawrence v. Dougherty, 30. Lawrence r. Fusscll, 221. Lawrence v. Hammond, 382. xli TABLE OF CASES CITED. References Lawrence v. McCalmont, 520. Lawrence v. Miller, 386. Lawrence v. Ralston, 392. Lawrence v. Russell, 308. Lawson v. Hank, 363, 376, 377. Lawson v. Lovejoy, 77. Lay V. Wiseman, "261. L.Rzier \. Horan (In lull), 319. Lazier v. Horan, 304. Lea V. Branch Bank, 438. Lea V. Cassen, 148. Lea V. Glover, 265. Leach v. Funk, 263. Leather Man Nat. Bk. v. Morgan, 414. Leavitt v. Putnam, 219, 222, 359. Lebanon &c. Road Co. v. Adair, 95. Ledwlch v. McKim, 251. Lee V. Alexander, 408. Lee V. Dick, 427. Lee V. M. E. Church, 140. Lee V. Pile, 260. Lee V. Turner, 263. Leeds v. Hamilton Paint etc. Co., 389. Lefflngwell v. White, 391. Lef tley r. Mills, 341. Legal Tender Cases, 500. Legs V. Legg, 80. Legg V. Vinal, 318, 344, 370. Lcglo r. Staples, 28. Lehman v. Jones, 386. Lehman Bros. v. McQueen, 519, Leiber v. Goodrich, 30. Leitch V. Wells, 272. Leland v. Parriott, 66, 222. Lennon v. Brainard, 500. Lenox v. Leverett, 362. Leonard v. Gary, 391. Leonard v. Leonard, 500. Leonard v. Olsen, 266, 357, 383, 385. 386, 466, 469. Leonard v. Phillips, 412. Leonardo. Swentzer, 148. Leonard v. Vredenburgh, 428, 438, 439. Leslie v. Bassett, 155. Lesser v. Schalze, 22. Lester v. Given, 472. Lester v. Rogers, 410. Lester r. Webb, 116, 117. Letson v. Dunham, 384. Lettley v. Mills, 306. Lcverone v. Hildreth, 148. Lewis V. Brehme, 377. Lewis V. Wilson, 35. Libby v. Pierce, 360. Lieber & Colsin v. Goodrich, 55. Liebschert'. Kraus, 97. Llggitt V. Weed, 172. Light V. Powers, 179. Lime Rock Bank v. Hewett, 364. xlii are to Pages. Lime Rock Bank v. Mallett, 68. Lincoln etc. Bk. v. Page, 318. Lindeman v. Guldin, 361. Lindenberger v Bcal, 366. Lindlcy v. First Nat. Bk., 179. Lindsay v. Price, 175. Lindus v. Melrose, 98. Lintz V. Howard, 2T2. Litchfield v. Flint, 107. Littauer v. Goldman, 199. Little V. Mills, 273. Little V. Phoenix Bk.,466. Little V. Rogers, 438. Littler. Slacklord,22. Littledale v. Maberry, 342. Littlefield tJ. Shie,80. Litchfield Bank r. Peck, 262. Little Rock Trnst C ». t. Martin (in full), 415. Little Rock Trust Co. v. Martin, 410. Livingston v. Gaussen, 107. Lloyd V. Keach, 259, 260, 261. Lloyd V. McGarr, 344. Lloyd V. Rowland, 173. Lobdell V. Baker, 234. Lockwood V. Crawford, 167, 170, 171, 318, 335, 359, 427. Lomer v. Meeker, 161. Long V. Campbell, 226. Long V. Mason, 409. Loomls V. Ruck, 255. Loose V. Loose, 377. Los Angeles N. B. v. Wallace, 305. Losee v. Bissell, 201, 262. Losee v. Dunkin, 266. Louisiana State Bank v. Dumartralt,36L Louisiana State Bank v. Ellery, 360. Louisville Mfg. Co. v. Welch, 431. Loux V. Fox, 467. Lovejoy v. Spafford, 20. Lovejoy v. Whipple, 36, 39. Lovell V. Hill, 23. Low V. Bliss, 29, 57. Lowenstein v. Bresler, 465. Lowman v. Auberry, 409. Lowry V. Steele, 389. Loyd V. McCaffrey, 7. Lubbering v. Kohlbrecher, 408. Lucas V. Ladew, 167, 315. Lucas V. Pinney, 96. Lucas V. Pitney, 95. Luce V. Shaff, 11. Lugrue v. Woodruff, 178. Lundberg v. N. W. Elevator Co., 152. Luning V. Wise, 211. Lyle V. Burke. 197. Lynch v. Bank, 293, Lynch v. Dodge, 79. Lynch v. First Nat. Bk., 463. TABLE OF CASES CITED. References Lynch v. Kennedy, 255. Lynch v. Mead, 212. Lynchburg Nat. Bk. r. Scott, 14<;. Lyons v. Miller, 233,234. M Maas V Montgomery Iron Works, 179. Macey v. Kendall, 150. MacFarland v. Pico, 31". Mackay ^\ St. Mary's Church, 99. Mackintosh v. Wyatt, 457. Macloon r. Smith, 315. Magoun f. Walker, 344. Magruder i\ Union Bk., 305, 309. Mahlu V. Kirby, 202. Mahoney t'. Ashlin, 5. Mahoney Mining Co. v. Anglo-Cal. Bk. 95. Main i'. Hilton, 20. Maine Trust &c. Co. v. Butler, 219. Maitland v. Citizens Nat. Bank, 155, 300. Makepeace i\ Harvard College, 67. Makepeace i\ Moore, 107. Maiden Bk. v. Baldwin, 311. Malone i\ Keener, 429. Manchester v. Van Brunt, 372. Manchester Bk. v. Fellows, 362. Mandeville v. Riddle, 439. Mandeville v. Welch, 35, 438. Manler v. Churchill, 157. Manlon Gravel Road Co. v. Kesslnger, 218. MaMn V. Bank, 285. Mann v. King, 85. Manncy i-. Colt,, 388. Manning v. Lyon, 393. Manning v. Maroney, 382. Manning r. McClure, 152, 155. Manson v. Felton, 79. Manufacturer's Bk. v. Hazard, 385. Manufacturers' Nat. Bk. v. Continental Bk., 243. Manufacturer's &c. Bank f. AVinship,93. Manufacturers & M. Bk. v. Follett, 412. Manufacturing Co. v. Bishop, 351. Manufacturing Co. i: Wakelleld, 493, 494 Meany r. Beckman Iron Co., 99. March v. Barnet, 499. Marine Bk. v. Fulton Bk.,24.i. Marlon Xat. Bk. r. Phillips Adnir., 358. Marion etc. R. R. Co. v. Hodge, 172. Market & Fulton Nat. IJk. v. Sargent, 251. Markey v. Carey, 26. Markham v. Hazen, 173, ISl. Maikland v. McDaniel, 389, 391. Marks V. Boone, 362, 372. Marks v. Corey, 219. are to Pages. Marsh v. Gold, 91. Marsh v. Low, 166. Mar6h v. Marshall, 263. Marsh v. Maxwell, 377. Mar&h v. Small, 256. Marsh v. Thompson Nat. Bank, 92. Marshall v. Mitchell, 388. Marshall v. Russell, 39. Marskey v. Turner, 151, 222. Marston v. Allen, 203. Martin r. Bacon, 177. Martin v. Brown, 369. Martin v. Cole, 236. Martin v. Fewell, 135. Martin v. Grabinsky, 314. Martin v. Hazard, 35. Martin v. Ingersoll, 362, 363. Martin v, Marshall, 150. Martin v. Muncy, 150. Martin v. Perqna, 392. Martin v. Smith, 372. Martin v. Stone, 26, 143. Martin v. Webb, 131. Marvin r. McCullum, 36, 113. Marzettl v. Williams, 423. Mason v. Franklin, 169, 312. Mason v. Frick, 99. Mason v. Hyde, 38. Mason v. Morgan, 80. Mason v. Noonan, 223. Mason i\ Pritchard, 387. Mason v. llumsey, 93. Maspero v. Pedesclaux, 361. Massachusetts Bank v. Oliver, 361. Massey v. Blair, 25. Massey r. Citizens Bldg. Assn., 96. Matheny v. Hughes, 272. Mathews i'. Dubuque Ac. Co., 98. Malhewson v. Strafford, 361. Maihias v. Kirsh, 154. Matter of Brown, 459, 460, 469. Matteson v. Ellsworth, 407. Matteson v Morris, 143, 201. Matteson v. Moulton, 178. Matthews v. Allen, 392. Matthews V. Baxter, 79. Matthews v. Crosby, 145. Matthews v Dare, 504. Matthews v. Hamilton, 494. Matthews v. Ilaughton, 55. Matthleson i: McMahon, 78. Mauran v. Lamb, 499. Maury v. Coleman, 279. Maux Ferry Co. v. Branegan, 384. Maxwell r. Vansant, 11, 2*23. May r. Boisseau, 389. May V. Boisseau, 388. May V. t'ainpbell, 259. May V. City Bank, 26. xliii TABLE OF CASES CITED. References May V. Coffin, 385. May V. Hewett, 13, 88. May v. Kelly, 173. Mayr. Miller, 12. May V. Sharp, 439. Mayberry v. Morris, 272. Mayer v. Chattahoochie Nat. Bk., 472. Mayer v. Isaacs, 428. Mayer v. Thomas, 304. Mayes v. Kobinson, 27S. Mayhew v. Circkett, 457. Mayor v. Inman, 103. Mayor, etc. r. Tenth Nat. Bk., 124. Mayor of Xashville v. Ray, 102, 103. Mayor of Wetumpka v. Wetumpka Wharf Co., 102. Maze V. Helnze, 17. McAndrew v. Radway, 342. McAuliffe V. Reuter, 220. McBride v. Farmers' Bank, 152. McCabe v. Caner, 152. McCall V. Tayler, 12. McCallum lu Driggs, 225. McCauley v. Gordon, 411. MeCarty v. Louisville Banking Co., 271. McCarty v. Roots, 216, 217. McClaini;. Weidemeyer, 81. McClanci'. Fitch, 3«. McClelland v. McClelland, 148. McCormlck v. Eckland, 207. McCormick r. Railroad Co., 404. McCoy V. Farmer, 316. McCormick v. Trotter, 55. McCoy V. Lockwood, 252, 411. McCrary v. Slaughter, 91. McCone v. Belt, 370. McElarin v. Nesbit, 55. McElwain v. Merchants' & Farmers' Bank, 238. McElwee v. Metropolitan Lumber Co., 503. McGavoch v. Whitfield, 104. McGee v. Prouty,15. McGee V. Riddlesbarger, 201. McGeorge v. Chapman, 385. McGoon V. Shirk, 500. McGrath v. Clark, 252, 410. McGregor v. Cleveland, 93. McGregory v. McGregory, 393. McGruder v. Bk. of Washington, 385. McGuire v. Calahan, 79. Mclntire v. Preston, 96. Mcintosh V. Lytle, 461. McKechine v. Ward, 434. McKee v. Boswell. 309. McKee v. Campbell, 436. McKee v. Hamilton, 93. McKinney v. Crawford, 305. McKnightr. Wheeler, 211. xliv are to Pages. McLaren v. Watson's Exrs., 429. McLean v. Nicheu,24. McMinn v. Richmond, 76. McMonigal v. Brown, 237, 389, 391. McMorran v. Murphy, 503. McMnrchey v. Robinson, 314, 316, 338. McMurtrie v. Jones, 365. McNaughtr. McClaughey, 149. McXell r. Chamber of Commerce, 116. McNeil V. Shober &c. Co., 98. McNeil V. Wyatt, 359. McPherson v. Bondreau, 262. McPherson r. Weston, 211, 229. McPherson Nat. Bank r. Velde, 199, McPhetres r. Holley's Ex'r, 377. McQuade v. Rosccrans, 73. McSherry v. Brooks, 222. McSparran v. Neeley, 11, 79. McVeigh v. Bk. of Old Dominion, 82, 382. McWilliams v. Mason, 433. McWilliams v. Webb, 196. Md. Fertilizing Co. v. Newman, 29. Mead i\ Merchants' Bk., 97, 154, 183. Mead v. Parker, 451. Mead r. Small, 498. Mead v. Young, 49. Meador r. Dollar Savings Bank, 24. Meads v. Merchants' Bk. of Albany, 463. Mechanics' Bank v. Bank of Columbia 87. Mechanics' &c. Bank v. Crow, 152, 27r Mechanics' Bk. v. Merchants' Bk., 314. Mechanics' Bankr. Valley Packing Co., 221,243. Mechanics' Banking Asso. &c. v. White Lead Co., 95. Mechanics' Bk. of Alexandria v. Bank of Columbia, 134. Mechanics' &c. Bank v. Crow, 145. Mecorneyr. Stanley, 157. Meggettv. Baum, 432. Mehagan v. McManus, 389. Mehlberg v. Fischer, 502. Meikel v. State Sav. Bk . 409. Meise v. Doscher,41. Meise v. Newman, 358. Meitze V. AVolfe, 219. Melick V. First Nat. Bk., 4.33. Melledge v. Boston Iron Co., 13. Mellerd v. Thorn, 434. Mellish V. Simeon, 173. Melville v. Glendennlng,457. Menaugh v. Chandler, 256. Mendenhall v. Baylies, 207. Menkens v. Ilerringhl, SO. Mense v. Osbern,377. Merchants' Bk. v. Birch, 361. Merchants' Bk. v. Elderkin, 318. TABLE OF CASES CITED. References Merchants' Bk. r. National Bk., 488. Merchants' Bank v. Splcer, 13, 218, 309, 464, 466, 479, 480. Merchants' Bk. v. State Bk., 116,459, 462, 463, 465. Merchants' Exch. Bk. v. Luckow, 433. Merchants' Exch. Nat. Bk. v. Sav. Inst., 274. Mercliants' Nat. Bank t. Citizens Gasligtit €o. (in full), 115. Merchants' Nat. Bk. v. Eagle Nat. Bk., 468. Merchants' Nat. Bk. v. Gregg, 212. Merchants' Nat. Bank v. Lovitt, 96. Merchants' Nat. Bk. v. McNler, 270. Merchants' Nat. Bank v. Spates, 198. Merchants' Nat. Bk. v. Tracy, 270. Merchants' &c. Nat. Bk, v. Trustees of Masonic Hall, 274. Merchants' & Farmers' Bank v. Wex- son, 154. Merlden Steam Mill v. Guy, 211. Merrick v. Boury, 407. Merrill v. Hurley, 26. Merrill v. Monticello, 103. Merrill v. Packer, 145. Merritt v. Duncan, 256. Messmore r. Meyer, 150. Messmore v. Morrison, 23, 314. Metcalf V. Richardson, 369. Metropolitan Nat. Bk. v. JoneB, 462. Meyer r. Beardsley, 410 Meyer r. Croix, 180. Meyer t'. Hllcher, 311. Meyer v. Hlbscher, 311. Meyer v. Hunecke, 407. Meyer v. Lathrop, 504. Meyer v. Richards, 199, 202, 203. Michigan Bank v. Eldred, 11, 92, 251. Mlddaugh v. Elliott, 407, 413. Middlesex v. Thomas, 502. Middleton v. Griffith, 211. Miles V. Hall, 365. Miles V. llelniger, 200. Milks r. Rich, 199, 429. Miller f. Clendenin, 224, 353. Miller r. Delamater, 81. Miller r. Flnley,271. Miller V. Hackley, 'Hi, 366, 389. Miller v. Irby's Admr., 517. Miller V. Lunsden, 504. Miller v. Nelhaus, 176. Miller V. Ottawa, 279. Miller V. Redwlne, 105. Miller V. Tharel, 201. Miller r. Thompson, 172. Miller V. Weeks, 20. Mills V. Bk. of U. S., 318, 370, 371. Mills V. Gleason, 102. are to Pages. Mills V. Porter, 262, Mims V. West, 272. Minchart i: Handlln, 366. Minell v. Read, 272. Miner v Bradley, 493. Mlnet V. Gibson, 49. Mining Co. v. Anglo-California Bank, 116,131. Minor v. Mechanics' Bank of Alexander, SG. Minot T. Rass (in fall), 475. Mlnot r. Rnss, 462. Minturn v. Fisher, 460, 469. Miser V. Trovlnger, 360, 383, 384. Mishlert'. Reed, 271. Mitchell V. Baring, 340. Mitchell V. Barney, 312. Mitchell V. Burlington, 103. Mitchell V. Byrne, 38. Mitchell V. Catchings, 266. Mitchell V. St. Mary, 27. Mitchinson v. Hewson, 80. Mix V. Nat. Bank of Bloomlngton, 152, 154. Moakeley v. Rlggs, 426. Moeser v. Schneider, 176. Moffett V. Hampton, 98. Moge r. Herndon,408. Mobawli Bank v. Brodeiick (in full), 478. Mohawk Bk. v. Broderick, 170, 383, 465, 467. Moies V. Bird. 149, 427, 428. Moiesc V. Knapp, 13, 174. Monroe I'. Hoff, 503. Monson v. Drakely, 410, 436. Montague r. Perkins, 174. Monlelins v. €barles (In full), 184. Montclinsi". Charles, 171. Montgomery f. Crossthwalte, 224. Slontgomerj' v. Kello^rg, 430. Montgomery Co. Bank v. Marsh, 367. Monument Nat. Bank v. Globe Works, 95,115, 117. Moody f. Findley, 217. Moody V. Threlkeld, 174. Moore v. Baird, 261. Moore v. Bank, 294. Moore v. Bowmaker, 457. Moore v. Cross, 225. Moore v. Ilcrshey, 78. Moore v. Hutchinson, 407. Moore v. McClure, 88. Moore i: Robinson, 256. Moore v. Ryder, 155, 272, Moore v. WlUey, 174. Moorehcad v. Gilmore, 92. Moran i\ Abbey, 496. Morcland's Assignee r. Citizens' N. B., 363. xlv TABLE OF CASES CITED. Morey v. Wakefield, 266. Morgan \. Bank of LiOnlsville (,in fall), 394. Morgan v. Edwards, 29. Morgan v. Thompson, 435. Morley v. Culverwell, 262. Morris v. Faurat, 237. Morris v. Harvey, 502, 503. Morris r. Pollion, 220. Morris v. Preston, 37, 219. Morrison v. Bailey, 355, 459, 466. Morrison v. Currie, 200, 234. Morrison r. Gartli, 410. Morrison v. Lovell, 199, 211. Morrison r. McCortney, 465. Morrison v. Smith, 408, 502. Morrison Lumber Co. v. Lookout Mt. Hotel Co., 224. Morrow v. Whitealdes, 80. Morse v. Chamberlain, 367. Moses r. Ela, 388. Moses V. Franklin Bk., 472. Moses V. Liawrence County Bank (in full), 436. Moss r. Averill, 95. Moss t\ Livingston, 98, 122. Mott V. Hicks, 88, 123, 126, 215. Mott V. Wright, 203. Mount Morris Bk. v. Lawson, 408. Mount Pleasant Bk. v. McLeran, 168.306, 310. Moantstephen v. Brooks, 16. Moye V. Cogdell, 501. Moyer's Appeal, 391. Moynahen v. Hanford, 225. Mudge r. Bullock, 81. Mulcare v. Welch, 217. Muldrow V. Caldwell, 219. Mulherrln v. Hannum, 304. MulU". Brlcker,176. Mullen V. Morris, 343. Muller V. Cook, 35. MuUer v. Pondlr, 38, 291. Mullman v. D'Eguino, 184. Mumford v. Am. L. Ins. Co., 94. Mnmford v. Weaver cin full), 205. Muncy School Board r. Com., 170. Mnnger r. Shannon, 27. Munn V. Burch, 495. Munn V. Commission Co.,26L Munroe v. Bordier, 148. Murphy v. Carey, 152. Murray v. Beckwith, 257, 295. Murray v. East India Co., 304. Murray r. Judah, 466, 479. Musselman r. Oakes, 18. MuHserr. Johnson, 135. Mnssey r. Scott, 87. Musson V. Lake, 318,342, 357, 371. xlvi References are to Pages. Mutual Life Ins. Co. v. Hunt, 78. Muzzy V. Knieht, 67. Myers v. Elazzard, 272. Myers r. Nell, 408. Myers v. Standart, 180, 377, 411. :n' Nabb V. Koontz, 439. Naglee v. Lyman, 179. Nance v. Lary, 253, 287. Naples V. Brown, 274. Narragansett Bank v. Atlantic Silk Co., 116. :Nasb V, Brown (in full), 331. Nash V. Brown, 312. Nashv. Mitchell, 85. National Bank v. Bradley, 362, 393. National Bank v. Green, 211, 260, 261. National Bank r. Leonard, 21, 200. National Bank v. Lewis, 3S9. National Bank v. Matthews, 96. National Bank v. Wells, 95. National Bank of Auburn v. Lewis, 259. National Bank of America v. Nat. Bk. of 111., 145. National Bank of Battle Creek v. Dean, 267. National Bank of Bedford v. Stever, 269. National Bank of Commerce v. Atkin- son, 97. National Bank of Commerce v. Law, 92. National Bank of Commerce v. Nat. M. B. Assn., 392. National Bank of N. A. v. Klrby, 268. National Bank of N. A. v. White, 150. National Bank of Pittsburg v. Wheeler, 214. National Bank of St. Joseph v. Dakln, 252. National Bank of Washington v. Texas, 222. National Exch. Bk. v. Kimball, 390. National Exch. Bk. v. Silliman, 213. National Exch. Bk. v. White, 251. National Gold Bk. v. McDonald, 468. National Hudson River Bk. v. Moffett, 306, 318. National Newark Bkg. Co. v. Second Nat. Bk., 171. National Park Bk. v. Ninth Nat. Bk. 182. National Pemberton Bank v. Lougee, 14> 426 National Pemberton Bk. v. Porter, 78, 96. National Safe & Lock Co. v. People. 469. National Security Bank?'. McDonald, 66. National Shoe & Leather Bk.r. Gooding, 305. TABLE OF CASKS CITKD. References National Spraker Bk. v. Treaclvvell Co., 96. National State Bk. v. Linderman, 463. National State Bk. v. Weil, 465. National Union Bk. v. Todd, 151. Nave V. Hadley, 89. Nave V. Richardson, 309, 310, 342. Nazro v. Fuller, 411. Nealv. Smith, 43S. Nebraska Natl. Bk. v. Logan, 468. Ncedhams v. Page, 225. Neeley v. Morris, 340, Neil V. Case, 409. Nelson v. Boynton, 438. Nelson v. Cowing, 147. Nelson v. Dubois, 428. Nelsonf. First Nat. Bk., 179, 371, 463. Nelson V. Fotterall, 170, 336. Nelson v. Wellington, 299. Neptune v. Paxton, 98. Neuhoffr. O'Reilly, 107. Nevins v. Bank of Lansingburgh, 365. New V. Walker, 145, 274. Newark India Rubber Co. v. Bishop, 309. Newberry v. Trowbridge, 369, 392. Newbold v. Barnet, 225. Newbold i\ Boraef, 387. Newell V. Gregg, 268. Newgass v. New Orleans, 103. New Haven Co. v. Goodwin, 403. New Haven Co. Bk. v. Mitchell, 372. Newman v. Kaufman, 459. Newman v. King, 410, 412. Newman v. Williams, 259. New Orleans Canal &c. Co. v. Montgom- ery, 223. New Providence v. Halsey, 103. Newton Wagon Co. v. Diers, 428. New York & Ala. C. Co. v. Selma Sav. Bk., 360. New York &c. Co. v. Meyer, 384. New York Iron Mine v. Citizens' Rank, 166. New York Nat. Exch. Bk. v, Crowell, 270. Nicely V. Commercial Bank, 29. Nickerson v. Babcock, 61. Nlckerson r. Gilliam, 105. Nickerson v. Ruger, 271, 273. Nickerson v. Sheldon, 59. Nichols V. Allen, 428. Nichols t'. Batc.'iOS. Nichols V. Blackmore, 171, 186. Nichols V. Commercial Bank, 179. Nichols V. Diamond, 173. Nichols V. Pearson, 259, 260. Nichols r Pool, 3-*l. Nichols r. Thomas, 78. Nichols & Sheppard Co. v. Dedrlck, 154. NlchoUs V. Webb, 339. are to Pages. Nicholson v. Combs, 410. Niess V. Coats, 201. Nifflin V. Smith, 93. Nightingale I'. Chafie, 502. Nightingale v. Withington, 77. Nimocks v. Woody, 7, 178. Ni.xon V. Palmer, 85. Noble V. Walker, 259, 260, 261. Noel v. Gaines, 67. Noel V. Kinney (in full), 107. Norfolk N. Bk. v. Griffin, 150. Norris v. Badger, 308, 501. Norris v. Despard, 382. North Atchison Bank v. Ganetson, 175. Nortb Atchison Bank v. Gay (in full), 440. North Atchison Bk. v. Gay, 433. North Atchison Bank v. Gray, 148. Northam v, Latouche, 79. North River Bank v. Aymer, 86. Northrup v. Sanborn, 460. Northumberland Co. Bk. v. Eyer, 429. Norton v. Coons, 436. Norton v. Norton, 38, Norton V. Pickering, 384. Norwich Bank v. Hyde, 33. Noxon V. DeWolf, 223. Noxon V. Smith, 21. Noyes v. Gilman, 34. Nunes V. Russell, 263. Nunez r. Danteles, 26. Nunnemacker v. Johnson, 500, 601. Nutting V. Sloan, 84. o Gates V. National Bank, 154, 269, Oatman v. Taylor, 104. Oberman v. Uoboken City Bk., 468. O'Brien v. Grant (in full), 481. O'Brien v. Smith, 466. Ocean Nat. Bk. v. Faut, 318. Ocean Nat. Bk. v. Williams, 338. 339, 340, 341. Odd Fellows v. First Nat. Bank, 87. Oddier. Nat. City Bk., 468. Odell r. Gallup, 409. Offuttv. Rucker, 465. Ogden V. Saunders, 214. Olendorff v. Swatz, 389. Olshausen v. Lewis, 171. Olson V. Peterson, 23. Omaha Nat. Bk. v. Walker, 429. O'Neal r. Rupp, 74. Onondaga Co. Sav. Bk. v. I'nlted States, 214. Oppenhelmer v. Farmers' &c. P>ank,29, 261. Ordeman v. Lawson, 428. xlvii TABLE OF CASES CITED. References Orear v. McDonald, 383. Oridge V. Sherburne, 315. O'llourke v. Hanchett, 392. Orr V. Maginnis, 341. Ortr. Fowler, 19, 50. Osborn v. Hawley, 30. Oeborn r. Klstler, 35, 99. Osborn v. Robbins, 255. Osborne v. Smith, 314. Osborne v. Thompson, 434. Osf ood V. Artt, 201, 208, 291. Otis V. CuUom, 199. Otis r. Van Storch, 434. Otisfield V. Mayberry, 501. Ottawa V. First Nat. Bk., 103. Ottor. Belden,305. Overman v. Bank, 488. Overman v. Hoboken City Bank, 172. Overton v. Mathews, 408, 410. Owen V. Van Usster, 173. Owens r. Taguc, 433. Owings V. Baker, 225, 226. Oxford Bank v. Haynes, 431. Oxford Iron Co. v. Spradley,95. Oxmond v. Varnum, 392. Pace V. Robertson. 435. Packard v. Herrington, 433. Packard v. Lyon, 312. Packard v. Richardson, 428. Packard v. Society, 117. Packer r. Wetherell, 219. Packwood v. Gridley, 272. Paddock i\ Brown, 140. Page V. Bank of Alexandria, 438. Page V. Danaher, 409. Page r. Gilbert, 371. Page V. Lathrop, 308. Page V. Marrell, 11. Paine v. Central Vermont R. R., 439. Paine r. Johnson, 434. Palmer v. Field, 217. Palmer r. Grant, 14. Palmer v. Marshall, 248. Palmer v. Nassau Bk., 273. Palmer v. Rice, 179. Palmer v. Sargent, 254. Palmer v. Ward, 28. Palmer v. Whitney, 273. Paramore v. Llndsley, 409,413. Pardier. Fish, 31. Paris V. Moe, 499. Parish v. Stone, 35. Park Bank v. Watson, 154. Parker v. Carson, 18. Parker v. Gordon, 170, 348, 350. Parker v. Kellogg, 312. xlviii are to Pages. Parker v. Riddle, 212. Parkharst v. Vail, 225, 427, 430, 439. Parks V. Duke, 36. Parmelee v. Austin, 42. Parnell v. Phillips, 93. Parr v. Jewell, 264. Parrott v. Colby, 503. Parshley v. Heath, 389. Parsy v. Spikes, 428. Patch V. Washburn, 226. Patch V. Wheatland, 93. Paterson Bank v. Butler, 368. Patience r. Townley, 382, 396. Paton V. Lent, 368. Patten v. Gleason, 271. Patterson v. Carroll, 223. Patterson v. Case, 201. Patton V. Winter, 180. Paulette v. Brown, 154, 270. Pauly V. Murray, 149. Paxson V. Nields, 145. Paysantj;. Ware, 11. Peabody v. McAvoy, 273. Peabody Ins. Co. v. Wilson, 305, 311, 344, 345, 363. Peale V. Addicks, 264. Pearson v. Garrett, 24. Pearson v. Bk. of Metropolis, 318. Pease v. Pease, 88, 98, 136. Pease v. AVarren, 307, 499. Peaslee v. Robins, 78, 103. Peckham v. Ilendren, 255. Pendleton v. Knickerbocker L. Ins. Co., 314. f»eninsular Sav. Bk. v. Hosie, 224, 435. Penn v. Bornman, 512. Pennington v. Baehr, 14. Pentz V. Stanton, 122, 132. People V. Johnson, 104. People V. McDermott, 34. People V. N. R. Bk., 365. People V. St. Nicholas Bk., 464. People V. Weber, 41. People's Bank v. Bogart, 199. People's Bank v. Brooke, 318, 342. People's Bank v. Jefferson Co. Sav. Bank (In full), 239. People's Bank v. Jefferson Co. Sav. Bk., 221. People's N. Bk. v. Dibrell, 371. Peoria &c. R. R. Co. v. Neill, 182. Perkins v. Catlin, 428. Perkins v. Franklin Bk., 315. Perkins v. White, 268, 384. Perry v. BIgelow, 65. Perry v. Crammond, 37. Perry I'. Friend, 225. Perry v. Perry, 500. Petefish V. Watklns, 433. TABLE OF CASES CITED. References Peter v. Beverly, 602. Peters v. Hobbs, 36S, 382. Pcto V. Reynolds, 173. Petri V. Fond da Lac, N. B , 261. Petty f. Douglass, 43-1. Petty r. Fleishcl, 54. Pettyjohn v. Liebscher, 145. Phelan v. Moss, 258. Phelpa V. Borland, 175. Phelps I'. Church, 219. Phelps r. Pond, 205. Phelps V. Stocking, 364. Phelps V. Visher, 225. Pheli>s, Dodge & Palmer Co. v. Hopkln- son, 146. Phllbrlck V. Dallett, 190. Philier v. Patterson, 150. Philips V. Frost, 177. Philips V. Preston, 436. Phillips V. Alderson, 365. Phillips V. Bullard, 504. Phillips V. Dippe,3S9. Phillips V. Dugan, 500. Phillips V. Hatch, 82. Phillips V. McCrordy,339. Phillips V. Thurn,50. Phllpotf. Briant, 457. Phipi)s I". Ilardmg, 357. Phoenix Bank v. Hussey, 5. Phoenix Ins. Co. v. Allen, 167, 171. Phoenix Ins. Co. v Church, 153, 503. Pickaway Co. Bank r. Prather, 96. Pickering v. Cording, 20. Picklar r. Harlan, 359. Pier V. Ueinrichshotfen, 387. Pierce v. Schoden, 369. Piker. Baldwin, 105. Pillow r. Hardeman, 361. Piner. Smith, 268. Piner v. Clary, 338. Pinkerton v. Bailey, 223. Plnkertonr. Marshall, 175. Pinney v. Administrators, etc., 141. Pircz V. Bank of Key West, 498. Pitman r. Breckenridge, 358. Planters' Bank v. Evans, 20. Planters' Bank v. Kesee, 459. Planters' Bank v. Sharp, 96. Planters' &c. Ins. Co. v. Funstall, 201. Plato V. Reynolds, 106. Piatt V. Beebe, 151, 1.52. Plummer r. Lyman, 176. Plyler v. Elliott, 444. Poett V. Stearns, 5('0. Poindexterr. Greenhow, 100. Polk r. Spinks, 382. Pollard V. Bowen, 338, 465. Pollard V. Huff, 426. Pollack r. Brush Electric A8SOCiatlon,4u9. are to Pages. Pollock r. Helm, 178. Polo Mfg. Co. V. Parr, 67. Pomeroy v. Tanner, 166, 183. Pond V. Waterloo Agr. Works, 257. Poock V. Lafayette Bldg. Assn., 96. Pool V. Anderson, 428. Poole V. Williams, 104. Poorman v. Mills, 265. Pope V. Bk. of Albion, 463. Popley V. Ashley, 198. Porter v. Cushman, 220, 499. Porter v. Kimball, 390. Porter v. Porter, 24. Porterfield v. Butler, 80. Post i\ Abbeville & W Ry. Co., 271. Post V. Kinzua Hemlock R. R. Co., 24. Potter V. Merchants' Bk.,97. Potter f. Tyler, 219. Potts V. Mayer, 503. Powder Co. v. Sinshelner, 141. Powell V. Waters, 37. Powers V. French, 148. Powers i'. Nelson, 222. Pratt V. Foote, 468. Pratt r. Ilcdden, 149. Pray v. Rhodes, 150. Preble r. Hunt, 145. Presbrey v. Williams, 267. Prefcby v. Thomas, 305, 339. Prescottv. Flinn, 86. Prescott V. Hull, 196. Prescott Bank r.Caverly, 167, 170, 171. Preston v. Spaulding, 493, 494. Prettymanv. Short, 23:1, 235. Prewittr. Chapman, 17. Price V. Teall,29. Price V. Torrington, 402. Prideaux v. Collier, 392. Priest V. Watson, 426. Prince v. Crawford, 91. Pritchard v. Smith, 358. Proctor V. Whitcomb, 304. Protalonga r. Lares, 182. Provident Sav. L. Ass. Co. v. Edmonds, 225. Parcell v. Allemong, 38i, 465, 472. Purviance v. Jones, 37. Putnam v. Crymes, 21. Putnam v. Schuyler, 433. Putnam v. Sullivan, 254. Q Quick V. Milligan, 63. Quinby v. Stoddard, 263. Quin V. Hanford, 176. Quln r. Sterne, 218. Quln V. Bard, 272. Quinnr. Dresback, 499. xlix TABLE OF CASES CITED. Quinn v. Hard, 274. Qaintance v. Goodrow, 389. E Raborg v. Peyton, 133. Rahm v. King- Bridge Mfg. Co., 223. Railroad Co. r. Schalte, 2U, 261. Railway &c. Pub. Co. v. Lincoln Nat. Bk.,270. Raiubolti'. Eddy, 413. Ramsdell v. Morgan, 146. Rand V. Cutler, 432. Randr. Dovey, 211. Randolph X. Bk. v. Hornblower, 462. Raney v. Winter, 87. Ranger v. Cary, 202, 266. Ranger v. Sergeant, 427. Ransom v. Sherwood, 212. Rash V. Farley, 147. Ratcliffe V. Planters' Bank, 169, 3S6. Rathbun I". Citizens Steamboat Co.,50,t. Rawson r. Davidson, 35, 99. Ray V. Smith, 214, 381, 384, 3SS. Ray V. Tubbs, 77. Raymond v. McNeal, 426. Raymonds. Middleton, 21, 212. Raymond v. Selllck, 205. Raynor v. Koagland, 291. Rea V. McDonald, 145, 150. Read v. Bank of Ky., 340, 341. Read v. Evans, 428. Read V. Marsh, 179. Reamer V. Bell, 219. Redllck V. Doll, 174, 251, 413. Redman v. Adams, 28. Reed v. Bott, 353. Reed v. Roark, 13, 408. Reedr. Stoddard, 434. Reed v. Wilson, 31fi, 317. Reedy V. Brunner, 256. Rees V. Warwick, 177. Reeve v. Pack, 180, 304. Reeves v. Pierson, 411. Reeves v. Stipp, 57. Reid V. Furnival, 213. Reld V. Morrison, 383. Reid t'. Reid, 468. Reilly v. Dodge, 451. Reinke v. Wilson, 393. Reinkei'. Wright, 392. Renick v. Robbins, 358. Renshaw v. Triplett, 359. Requa v. Collins, 368, 386. Rexr. Ballard, 406. Reynolds v. Appleman, 344, 371. Reynolds v. Douglass, 431. Reynolds v. Manning, 403. Reynolds v. Robinson, 138. 1 References are to Pages. Rhettt'. Pole, 360, 384. Rhode V. Proctor, 360. Rhoades v. Gent, 321. Rhodes V. Jenkins, 214. Rhodes r. Lindley, 55. Rice V. Stearns, 233. Rich V. Starbuck, 17, 40, 147. Richards v. Darst, 37. Richards v. Stephenson, 200. Richardson v. Fenner, 171. Richardson v. Lincoln, 38, 233. Richardson v. Pitts, 135. Richardson v. Richardson, 145. Richford v. Ridge, 480. Ricketts t" Bennetts, 91. Rittenhousei'. Ammerman, 106. Riddle V. Mandcville, 438. Rldgeway v. Raymond, 93. Rieman v. Fisher, 234. Rlgby V. Norwood, 439. Riggan v. Green, 78. RIggiu v. Collier, 5. Riggs V. Trees (in full), 63. R.ker v. Sprague Mfg. Co., 389, Riley v. Dickens, 33. Rindge v. Kimball, 405. Rindskopf v. Maloney, 343. Ring V. Jamison, 77. Ripley V. First Xat. Bk. of Spring* fleia (in full), 416. Risley v. Gray, 263. Ritchie r. Moore, 220. Rivers v. Thomas, 225. Roach r. Hill, 400. Roach V. Turner, 261. Roach V. Woodall, 412. Roark r. Turner, 260. Robarts r. Tucker, 48. Roberts v. Adams, 282. Roberts V. Austin, 7. Roberts v. Bethel, 174. Roberts v. Corbin, 472. Roberts r. Fisher, 198. Roberts V. Hall (in full), 285. Roberts v. Hall, 262. Roberts v. Lane, 264. Roberts v. Morrison, 86. Roberts v. Richardson, 434. Roberts v. Thompson, 520. Roberts v. Wald, 316. Roberston " Allen, 214. Robertson i;. Banks, 104. Robertson r. Bruner, 80. Robertson r. Deathrage, 436. Robertson v. Kensington, 220. Robertson v. Rowell, 148. Robbins v. Pinckard, 377. Robinson v. Abell, 225. Robinson v. Ames, 170, 180, 186. 383, 480. TABLE OF CASES CITED. References are to Pages. Robinson v. Bank, 236. lioblnson v. Bartlctt, 225. Uobinson v. Chemical Nat. Bank, 8i. Robinson v. Gould, 157. Robinson v. Lair, 202, 429. Robinson v. Reynolds, 101. Robinson v. Smith, 264 Robinson v. Yarrow, IS:?. Robson V. Bennet, 4S1. Roby t'. Phclon, 20. Rochncr V.Knickerbocker L. Ins. Co.,31t). Rock Co. Bk. V. Ilallister 221. Rodabaugh v. ritkln, 4:;o. Rodney v. Wilson, SSO. Rodocanachl v. Buttcrick, 14. Rogers v. Burlington, 103. Rogers v. Blackwell, 78. Rogers v. Colt, 218. Rogers v. Rogers, 104. Rog^ers v. Scliool Trustees (in full), 433. Rogers r. Walsh, 199. Rogers v. Ware, 50. Roger Williams Nat. Bank v. Groton Mfg. Co., 105. Roll V. Raguet, 73. Rose V. Hurley, 256. Rosemont v. Graham, 155. Rosenthal v. Ehrlicher, 467. Rosher v. Kleran, 370. Rosst'. Bydell,383. Ross V. Doland, 254. Ross V. Espy, 73. Ross V. Hurd, 392. Ross V. Terry, 199, 200. Ross V. Webster, 147. Rossi V. Schawacker, 224. Rosson V. Carroll, 359, 363. Rothr. Colv!n,92. Rounds V. Smith, 477, 511. Rousch V. Duff, 178. Rowe V. Collier, 502. Rowe V. Smith, 109. Rowe V. Tippen, 377. Rowland r. Fowler, 269. Rowland v. Levy, 322. Rowse V. Johnson, 434. Roxborough j-. Messick, 155. Rudd V. Matthews, 414. Ruddell r. Dillman, 254. Rudolph r. lircwcr, 149. Rufff. Webb, 22, 23. Rugglcs i: Swanwlck, 38. Russell V. Ilall, 35. Russell V. Phillips, 160. Rutland r. Brldter, 148. Ryan v. Doyle, 41)8. Ryan v. First Nat. Bk., 412. Ryhlner v. Felckert, IS, 85. s Sackelt v. Kellar, 256. Sackett V. Palmer, 27. Saco N. B. t'. Sanborn, 367, 368. Sage V. Wilson, 428. Salandert'. Lockwood,250. Salinas v. Wright, 27. Salisbury v. Bartleson, 385. Salisbury v. First Nat. Bk., 225. Salisbury r. Renick, 170. Solomon v. Pfelster, etc., Co., 371. Salter v. Burt, 316, 460. Salt Springs Nat. Bank v. Burton, 317. Salt Springs STat. Bank v. Sloan (In full), 444. Salt Springs Nat. Bank v. Sloan, 434. Sample v. Cochran, 433. Sampson v. Fox (in full), 513. Sampson r. Fox, 500. Samslng V. Conley, 212. Samuel v. Ilowarth, 457. Sanders r. Anderson, 13. Sanders v. Bagwell, 444. Sanders v. Blaln, 107. Sanderson v. Relnstadler, 365, 367. Sanford r. .Norton, 2.J6. Saratoga Bank v. King, 146. Sargent v. Applcton, 433. Sasscerz'. Farmers' Bk., ,^44. Sater v. Hunt, 497. Saunderson v. Jackson, 14. SaTage v. King, SO, 291, 292. Savage v. M'alsh, 96. Savannah Nat. Bank v. Raskins, 178. Savannah &c. Ry. Co. v. Schieffclin, 180, 181. Savings Bk. v. Bates, 268. Sawyer v. Allen, 265. Sawyer v. Bradford, 434. Sawyer v. Child, 24. Sawyer v. Fernald, 149. Sayles v. Sims, 426, 431, 432. Say rev. Frlck,3G0. Sayre v. Wheeler, 39. Scanlon i: Cobb, 78. Scanlon v. Keith, 126. Scarborough r. Harris, .383. Schcpp V. Carpenter, 202, 272. Schlmmelpcnnlch v. Bayard, 165, 181, 474. Schlesingcr v. Arline, 60. Schmidt V. Archer, 426. Schmidt v. Schmaeltcr, 14. Schmilllcr v. Simon (In full), 137. Schmlltler r. Simon, 106. Schinitz V. Hawkeye Gold Mining Co., 23. Schneider v. Norrls, 14. li TABLE OF CASES CITED. References Schoen v. Houghton, 248, 261. Schofield V. Bayard, 181, 182, 386. Schoharie Co. Nat. Bk. v. Bevard, 180. Scholefield v. Eichelberger, 381 , Scholfleld V. Londesborough, 413. School Dlst. V. Sipley, 85. Schoonmaker v. Roosa, 35. Schorr v. Woodlief, 344. Schroeder V. Nielson, 145. Schuchardt v. Ilall, 383. Schultz i: Astley, 406. Schultz V. Howard, 225. Schuylkill Co. v. Capley, 264. Schwartz v. Oppold, 410. Scott V. Conway, 110. Scott V. First Nat. Bk., 263, 264, 360. Scott I'. Gllkey,502. Scott V. Harris, 434. Scott V. Llddell, 213. Scott V. Lifford, 359. Scott t'. Meeker, 393. Scott V. Scott, 270. Scott r. Taul,432. Scott & Thatcher v. Colmesnil, 93. Scoville V. Landon,273. Scudder v. Union Nat. Bank, 4, 176, 179. Scull V. Roaue,27. Sea V. Glover, 26. Seabury v. Hungerford, 390. Seacord v. Meiller, 388. Searles v. Seipp, 21. Sears v. Lantz, 219. Seaton v. Scovill, 60. Seaver v. Lincoln, 306 Seaver v. Phelps, 78. Sebree Deposit Bk. v. Moreland, 359, 392. Second Nat. Bank v. AverlU, 460. Second Nat. Bank v. Basuier, 29. Second Nat. Hank v. Hewitt, 248. Second Nat. Bank v. Howe, 150. Second Nat. Bank v. McGuire, 388. Second Nat. Bank v. Morgan, 248, 257, 270. Second Nat. Bank t;. West. Nat. Bk.,463. Second Nat. Bank i'. Wetzel, 503. Second Nat. Bank v. Wheeler, 27. Second Nat. Bank v. Williams, 205. Security Bk. v. Continental Bk., 462. Security Bank v. Lucas, 211. Sedgwick v. Lewis, 91. Seibcl V. Vaughan, 413. Seldner v. Mt. Jackbon Nat. Bk., 388, 391. Seldonridge v. Connable, 11. Seligman v. Grady, 360. Seligman v. Rogers, 348. Selover v. Snively, 215. Semple v. Turner, 225. Seneca Co. Bk. v. Neass, 342, 344. lii are to Pages. Sentance v. Poole, 78. Searle v. Waterworth, 106. Seventh Nat. Bank v. Coot, 461, 462. Sewing Machine Oo. v. Moreno, 60, 61. Seybel v. Nat. Currency lik., 257. Seyfert v. Edieon, 148, 150, 264. Seymour v. Continental Life Ins. Co., 267. Seymour v. Cowing, 138. Seymour v. Malcolm &c. Lumber Co., 273. Seymour v. Mickey, 226. Seymour v. Van Slyck, 212. Shackleford v. Hooker, 17, 25, 179. Shaffer v. Maddox, 465. Shain V. Sullivan, 218. Sharts v. Await, 197. Shaver v. W. U. Tel. Co., 24, 177, 179. Shaw V. Camp, 26, 38. Shawi'. Knox, 216, 217. Shaw r. Cutwater, 145. Shaw V. Reed, 305, 393. Shawi'. Republic L. Ins. Co., 503. Shawr. Spencer, 103, 270. Shawt'. Stone, 100. Shawmut Nat. Bk. v. Manson, 152, 268. Shaylor v. Mix, 368. Shed V. Brett, 309, 313, 348, 358. Sheehan v. Jaft, 434. Sheehy y. Mandeville, 502. Shelborne Falls N. B. v. Townsley, 362, 363, 306, 368. Shelby v. Judd, 219, 305, 359. Shelden V. Parker, 202. Sheldon v. Butler, 429. Shepardw. Hall, 363. Shepard r. Hawley, 360. Shephard v. Graves, 11. Shepherd v. Turner, 207. Sherwin v. Bingham, 178. Sherwood v. Snow, 91, 92. Shitf V. Shiff, 104. Shipley i". Carroll, 38. Shipman v. Bank of the State of N. Y., 19. Shipman v. Cook, 357. Shipsey r. Bowery Nat. Bk., 468. Shirts V. Overjohn, 254. Shisler v. Van Dyke, 414. Shoe Leather Nat. Bk. v. Dix, 98. Shoemaker v. Mechanics' Bk.,364. Shoenberger's Ex'rs v. Savings Inst., 379. Shreeves v. Allen, 273, 295. Shriner v. Keller, 384, 503. Shryvcri' Hawkes,252. Shuetze v. Bailey, 134. Shugart v. Pattee, 60, 61. Shumway V. Reld, 504. Shute V. Robbins, 171, 186, TABLE OF CASES CITED. References Shuttlesworth v. Noyes, 80. Shutts V. Fingar, 267. Sibley V. Am. Exch. Nat. Bank, 359 Stbley V. Phelps, 21. Sice V. Cunningham, 266. Sickles V. Mather, 403. Sidle V. Anderson, 35, 99. Sieger V. Second Nat. Bk.,391. Slgerson v. Matthews, 392. Silver V. Jordan, 89. Simmons v. Camp, 226. Simmons v. Cincinnati Sav. Soc, 20.') 472. Simmons Hardware Co. v. Bk. of Green- wood, 472. Simon tJ. Merritt,264. Simons V. Morris, 264. Simpson V. Hall, 201, 263, 264. Simpson V. Pac. Ins. Co., 466. Simpson V. Stockhouse, 409. Simpson V. Turney, 377. Simpson V. Vose, 284. Sims V. Hundley, 344. Sims V. U. S. Trust Co., 499 Sinclair v. Johnson, 21. Sinker w. Fletcher, 211. Sioux Nat. Bank v. Cudahy Packing Co. 100. Slzer V. Heacock, 434. Skelton v. Dustln, 317, 342, 349. Skidmore i;. Little, 36. Sklllman v. Titus, 465, 470. Skinner v. Church, 220. Skinner v. Uaynor, 270. Slack V. Kirk, 216, 217, 512 Slade V. Mutrle, 497. Slagle V. Rust, 217. Slawson v. Loorlng, 132. Sloan T. Liatlmer (In full), 442. Sloan V. Latimer, 434, 435. Sloan V. Union Banking Co., 145, 274. Slocum V. DeLizardi, 360. Slocum V. Hooker, 77. Small V. Clarke, 248, 390. Small V. Franklin Min. Co., 504. Smalley v. Hale, 353. Smalley v. Wright, 361. Smedes v. Utlca Bk., 358. Smiley V. Melr, 60, 61. Smith V. Alexander, 98, 134. Smith V. Ayer, 269. Smith V. Bettger, 502. Smith V. Burrus, 354. Smith V. Caro. 359. Smith V. Case, 39. Smith V. Clark County, 99. Smith V. County of Sac, 274. Smitli T. Cromer (In full), 323. Smith V. Cromer, 306. are to Pages. Smith V. Curlee, 338. Smith!'. Dibrell,105. Smith V. Ferry, 223. Smith V. Finch, 429. Smith r. Glllen, 151. Smith V. Harper, 603. Smith V. Hogeland, 156. Smith V. Huckabee, 517. Smith V. Jones, 467. Smith V. Lltfe, 310. Smith V. Livingston, 257. Smith V. Lawnsdale, 388. Smith V. Marsack, 78, 183. Smith V. McClure, 21. Smith V. McNalr, 415. Smith V. Miller, 167, 357, 466, 504, 606. Smith V. Milton, 173. Smith V. Muncle Nat. Bank, 29, 166. Smith r.Nevlin, 223. Smith V Phllbrlck,311. Smith V. Polllon, 362, 385. Smith V. Rawson, 197, 212. Smith V. Rockwell, 393. Smith V. Sawyer, 498. Smith V. Sheldon, 435. Smith V. Sloan, 91. Smith V. Smith, 412, 460. Smith V. Wachob, 155. Smith V. Weld, 410. Smith v. Weston, 151. Smith V. Whiting, 370. Smith V. Whitney, 107. Smith V. Williamson, 79. Smith V. Wyckoff, 37. Smook V. Ripley, 59. Snedden v. Harmes, 472. Snider V. Express Co., 136. Snlvely v. Johnston, 427. Snow V. Perkins, 370. Snydam v. Weatfall, 15. Snyder v. Jones, 35. Snyder v. Oatman, 212. Snyder v. Reno, 199. Snyder v. Van Dorn, 40, 252. Snyder v. Wright, 244. Soares v. Glyn, 220. Soffe V. Gallagher, 503. Solarte v. Palmer, 371. Sondhelra v. Gilbert, 146, 164. South Boston Iron Co. v. Brown, 148. Southerland v. Freemont, 436. Sonthwark Bk. v. Gross, 411. Spalding V. Gates, 199. Sparks V. Despatcli Transfer Co. (in full), 127. Spauldlng v. Andrews, 174, 179. Spauldliigv. Evans, 18. Spauldlng v. Krutz, 367. Spaulding v. Putnam, 224. Uii TABLE OF CASES CITED. References Spencer v. Allerton, 224. Spencer v. Carstarphen, 211. Spencer v. Halpern, 216. Spencer v. Harvey, 389. Sperry v. Harr, 29, 60. Sperry v. Spaulding,274. Speurs V. Ledergerber, 501. Sprague v. Fletcher, 390. Sprague v. Hosmer, 176. Spray v. Bnrk (In full), 162. Spriggr. Bank of Mount Pleasant, 15. Springer v. Puttkamer, 198. Springfield Marine Bk. v. Mitchell, 472. Stackpole v. Arnold, 132. Stacy V. Baker, 1 13. Stacy V. Bank, 245. Stafford V. Fargo, 263. Stafford v. Yates, 369. Stahl V. Berger, 408. Stalnback v. Bank of Va., 168,362. Stainer v. Tyson, 86. Standage v. Creighton, 388. Stanley v. McElrath, 389, 499. Stanton v. Blossom, 358, 376, 383. Staples V. Franklin Bk., 316. Stapleton v. Louisville Banking Co., 29. Starln v. Genoa, 103. Stark V. Alford, 498. Stark w. 01sen,26, 29. Star Wagon Co. v. Sweezey, 388, 427. State V. Baker, 442. State V. Cobb, 412. State V. Givens, 406. State V. Hewitt, 442. State V. Huff, 104. State V. Libeity, 104. State V. McCormlck, 338, 343. State V. Modrel, 442. State Bk. v. Napier, 318. State V. Potter, 441. State V. Shripe, 323. State V. Taylor, 30. State Bk. V. Bartle, 392. State Bank v. Kain, 86, 97. State Bank v. McCoy, 79, 258. State Bank v. Wllkle, 177, 270. State ex rel. Block v. Cobb, 100. State ex rel. Worklngmen's Bkg. Co. v. Edmunds, 344. State of Wisconsin v. Torinus, 84. State Sav. Bk. v. Baker, 215. State Sav. Bk. v. Shaffer, 407. State Trust Co. v. Owen Paper Co., 225 Stayner v. Jolce, 410. Staynor v. Knowles, 305. Steckel v. Steckel, 436. Steele r. Russell, 356. Steel Co. V. Brick Co., 299. Steers v. Holmes, 149. hv are to Pages. stein V. Passmore, 224. Steman v. Harrison, 178. Stephens v. Graham, 410, 416. Stephens v. Monongahela Nat. Bk., 150, 432. Stephens v. Olson, 262. Stephenson v. Dickson, 362, 371. Sterling v. Marietta Co., 434. Stevens v. Beals, SO. Stevens v. Hannaa, 497. Stevens v. Gregg, 21. Stevens v. Monongahela Bk., 271. Stevens v. Park, 465. Stevens v. Stevens, 204. Stevenson v. O'Neill, 215, 27L Stewart v. Allison, 341. Stewart v. Babbs, 68. Stewart v. Bramhall, 214. Stewart v. Eden. 365. Stewart v. First Nat. Bk., 408. Stewart v. Kennett, 376. Stewart v. Lansing, 274. Stewart v. Smith, 59, 465. Stewart v. Street, 144. Stiger V. Bent, 499. Still well r. Aaron, 434. Stillwell V. How, 217. Stimson V. Whitney, 92, 207. Stinson v. Lee, 309. ■ Stix V. Matthews, 342, 359, 363. St. John V. Roberts, 305, 360, 498. St. Louis Nat. Bk. v. Flanagan, 433. St. Louis Stock Yards v, O'Reilly, 176. Stockdale v. Keyes, 92. Stockton Sav. &c. Soc. v. Giddings, 37, 38. Stoddard v. Kimball, 155, 26L Stoddard v. Penniman, 410. Stokes V. Pottery Co., 131. Stone V. Clough, 501. Stone V. Elliott, 272. Stone V. White, 149. Stoneman v. Pyle, 59, 61. Stoney v. Am. L. Ins. Co., 96. Stoney Island Hotel Co. v, Johnson, 13. Storer v. Mil liken, 433. Storey v. Krewson, 501. Storrs V. Flint, 104. Story V. Baird, 80. Story V. Lamb, 212. Story V. Livingston, 196. Stratton i\ McMakin,414. Straughan v. Fairchild, 155. Stroh V. Hinchman, 86. Strohm v. Hayes, 41. Strong V. King, 184, 349. Strong V. Straus, 270. Stuber r. Schock, 434. Stults V. Silva, 26. TABLE OF CASES CITED. References stamp V. Richardson Co. I5k., 432, 436. Sturges r. Fourth Nat. Bank, 177. Sturges r. MlHer, 201, 248, 262. Sturglsr. Bank of Clrclevillc, 97. Sturtevant v. Jaques, 105. Suffcll V. Bank of England, 412. Suffolk Bk. V. Worcester Bk.,305. Sullivan V. Cement Co., 451. Sullivan v. Langley, 274. Sullivan V. Rudlsell, 407. Sulsbacher v. Bank, 317. Sulzbachcr v. Bk. of Charleston, 385. Sumnierhlll v. Tapp, 15. Supervisors v. Schenck, 86, 96. Susquehanna Fert. Co. v. White, 603. Susquehanna Val. Bk. v. Looniis, 215, 384. Sussex Bank v. Baldwin, 313. Sutcllffe V. McDowell, 398. SuHlffc v. Atwood, 502. Sutton V. Owen, 212. Swampscott Mach. Co. v. Rice, 366, 372. Swan V. Hodges, 347, 349, 388. Swanzcy v. Parker, 109. Swayze v. Brlllon, 358. 359, 364. Sweeney v. R ister, 221. Sweeney v. Tlilckstun, 30. Sweet 1'. Hooper, 305. Sweet V. Swift (In full), 187. Sweet V. Swift, 1G6. Sweet V. Woodin, 216, 386. Sweetser v. French, 33, 54, 145. Swift V. Crocker, 435. Swift f. Smith, 257. Swift V. Tyson, 152, 1.54, 262. Swope V. Lefflngwell, 496, 497. Swopc V. Ross, 166. Sykes v. Giles, 85. Sylvester r. Crohan, 363, 366. Sylvester v. Staples, 35. Syme v. Brown, 225. Sypert v. Harrison, 427. Syracuse &c. R. R. Co. v. Collins, 466. T Taber v. Cannon, 84. Tabor r. Merchants' Nat. Bk., 252. Taddiken v. Cantrell, 408. Taft r. Brewster, 122, 123. Talbot V. Gay, 430. Talbot V. Nat. Bank. 312. Tappan v. Bank, 117. Tappam v. Ely, 220. Tardy v. Boyd, 392. Tarleton v. Southern Bank, 82. Tassey v. Church, 106. Tate V. Evans, 85. Tatlock V. Harris, 18, 48, 49. are (o Pages. Tatum V. Kelley, 146. Taunton Bk. v. Richardson, 391. Taylor v. Blnney, 429. Taylor v. Clark, 152. Taylor v. Cribb, 248. Taylor v. Dausby, 77. Taylor v. Drake, 176. Taylor v. French, 389, 391. Taylor t\ Xeblclt, 31. Taylor v. Newman, ISO. Taylor i-. Reese, 200. Taylor V. Shelton,S7, 104. Taylor r. Sip, 460, 46.5. Taylor v. Snyder, 314, 386. Taylor v. Surget, 107. Tebbetts v. Dowd, 378. Temple v. Fomroy, 84, Terry v. AUis, 201. Terry v. Blssell, 199, 214. Tescher v. Merca, 22. Tevis V. Young, 12, 13. Texas t'. Hardenberg, 263. Thacher v. Stevens, 224. Thatcher r. West River N. Bk., 150, 271. Thayer v. Brackett, 501. Thayer v. King, 393. Thayer r. Smith, 93. Theall v. Newell, 234 The Floyd Acceptances, 101. Third Nat. Bank r. Allen, 415. Third Nat. Bank v. Angell, 205. Tlilrd Nat. Bank v. Ashworth, 392. Third Nat. Bank v. Harrison, 145. Third Nat. Bank v. Lange, 270. Third Nat. Bank v. Nat. Bank, 221. Third Nat. Bank v. Snyder, 91. Thomas r. Relfe, 107. Thomas v. Walkins, 37, 145. Thompson v. Bank of British N. Am., 84. Thompson v Elliott, 85. Thompson v. Gray. 155. Thompson v. Ketcham, 24. Thompson v. Sioux Falls N. B., 152,270. Thompson v. >loan, 32. Thompson v. Stewart, 382. Thompson & Walkup Co. v. Appleby, 364, 365. Thompson-Houston Elec. Co. v. Capital Elec. Co., 201. Thornburg v. Emmons, 315. Thornton v. Dick, 193. Thornton v. Rankin, 105. Thrall r. Horton, 271. Thrall r. Mead, 265, 267. Thurston r. Island, 429. Thurston v. Mauro, 88. Tlcknor r. Roberts, 343. Tlconlc IJank v. Smiley, 215. Tildcn v. Barnard, 98, 269, 274. TABLE OF CASES CITED. References Tilford V. Miller, 503. Tinsley v. Klrby, 444. Tisdale V. Maxwell, 18. Timberlake v. Thayer, 499. Tinims v. Dellsle, 369. Tindal v. Brown, 376. Tinker v. McCauley, 429. Tisdale v. Maxwell, 502. Titus t'. Kyle, 236. Tobey v. Barber, 503,504. Tobey v. Berley, 372. Tobey «. Chlpman, 255. Tobey V. Lennig, 370. Tod V. Wiclj, 258, 265. Todd V. Neal's Admr., 340. Toledo Agrl. Works v. Heisser, 88. Tolman v. Hanrahan, 93, 173. Tomlin r. Thornton, 466. Tooke V. Bonds, 500. Toomer v. Rutland, 407. Toombs V. West, 145. Torotell ex parte, 26. Torrey v. Association, 117. Torrey v. Foss, 384. Tourtelot v. Reed, 271. Towle V. Dresser, 76. Towne v. Rice, 5, 98, 104. Town of Eagle t\ Kohu, 146. Town of New Athens v. Thomas, 99. Townsend r. Auld, 339, 366, 372. Townsend v. Bank of Racine, 198. Townsend v. Darby, 143, 438. Townsend v. Hcrr, 370. Townsend v. Lorain Bk., 371. Townsend v. Star Wagon Co., 411. Townsley v. Samrall, 179, 343. Trammel v. Chipman, 304. Traskv. Martin, 315. Trebilcock v. Wilson, 500. Tredway v. Antlsdel, 499. Trego V. Lowery, 148. Trent Tile Co. v. Fort Dearborn ' Nat. Bk. of €liicago (infull), 192. Trent Tile Co. v. Fort Dearborn N. Bk., 175. Trigg V. Saxton, 155. Trimble v. Thome, 426. Tripp V. Swanzey Mfg. Co., 100. Troy City Bk. v. Lanman, 180, 311, 411. True V. Collins, 367. Truesdell v. Thompson, 197. Trust Co. V. National Bank, 219, 291, 429. Trustees of Cahokla v. Rantenberg, 88, 98. Tryon v. Oxley, 106. Tucker v. Raleigh, 103. Tucker v. Tucker, 24. Tucker v. Oxley, 106. Ivi are to Pages. Tucker v. Raleigh, 103. Tucker v. Tucker, 24. Tuckerman v. Hartwell, 66, 67. Tucker Mfg. Co. v. Fairbanks, 98. Tunno t'. Lague, 382. Turle V. Sargent, 155. TurnbuU v. Bowyer, 384. Turnbull v. Brock, 434. TurnbuU v. Maddux, 392. Turner v. Iron Chief Min. Co., 266. Turner v. Keller, 214. Turner v. New Farmers' Bank, 505. Turners. Wilcox, 86. Turner, Wilson & Co. v. Browder, 148, 166. Tuscaloosa Cotton-seed Oil Co. v. Perry, 501. Tyler v. Gould, 166. Tyson v. Oliver, 368. u Ulrich V. Hower, 176. Union Bank v. Barber, 274. Union Bank v. Fowlkes, 345. Union Bank«. Hyde, 338, 390. Union Bank v. Magruder, 390. Union Bank v. Roberts, 408. Union Bankr. Willis, 168. 360. Union Bank of Rochester v. Gilbert, 146. Union Nat. Bank v. Barber, 155. Union Nat. Bank v. Brown, 146. Union Nat. Bank y. First N. Bk., 428. Union Nat. Bank v. Grant, 220. Union Nat. Bank v. Oceana Co. Bk., 472, 495. Union Nat. Bank v. Roberts, 411. United States v. Bank of Metropolis, 100, 180. United States v. Barker, 167. United States v. Central Nat. Bank, 100. United States v. Isham, 465. United States v. Linn, 409. United States v. Onondaga Co. Sav. Bk., 414, 415. United States v. Turner, 406. United States v. U. P. R. R. Co., lOS. United States v. White, 17, 21. United States Bank v. Barker, 362. United States Nat. Bank v. Burton, 366. United States Nat. Bank v. Crosley, 221. United States Nat. Bank v. Ewing, 155 United States Nat. Bank v. First Nat. Bank, 148. United States Nat. Bk. v. McNalr, 151, 258, 261. United States Trust Co. v. Roche, 104. Unsdell v. Cunningham, 27. Updegraf t v. Edwards, 203. TABLE OF CASES CITED. References y Vagllano v. Bank of England, 19. Valle V. Cerre, 178. Van Boekkellen v. Taylor, 36. Van Brunt v. Slngley, 254. Van Burkleo v. S. W. Mfg. Co., 153. Vance r. Collins, 364. Vance v. First Nat. Bk., 263. Vance v. Wells, 80. Vandewatcr v. McRae, 228. Van Duzer v. Howe, 182, 252. Van Meter v. Spurrier, 145. Van Patton v. Reals, 78. Van Patten v. Ulrich, 217. Van Riper v. Baldwin, 200. Vaustrum v. Liljengren, 177, ISO, 183. Van Vechten v. Pruvn, 365, 366, 367. VanZandtv. Hopkins, 24. Varley v. Title Guarantee & T. Co., 225. Vaughan v. Fowler, 444. Veazie Bank v. Paulk, 269. Vere v. Lewis, 49. Vletsr. Bank, 423. Vinton V. King, 267. Violett V. Patten, 428. Vischerv. Webster, 413. Vogle V. Ripper, 407, 408, 417. Voeltz V. Harris, 431. Vollz V. National Bank of Illinois (In full), 508. Voltzt'. Nat. Bank, 497. Von Sachs v. Kretz, 404. Voorhces V. Woodhull, 205. Vosburgh v Dleffendorf, 274. Voss V. Lewis, 436. w Wade V. Chicago, &c. R. R. Co , 261. Wadev. Creighton,226. Wade V. Guppinger, 211. Wade V. Wade, 393. Wadsworth v. Sharpsteen, 78. Wagner v. Crook, 468. Wagner v. Simmons, 155. Wainwrlghtv Straw, 24. Walnwrlght v. Webster, 198. Walt V. Pomeroy, 65,66, 411. Waiter. Foster, 233. Waitet'. Kalmisky, 150. Wakefield v. Greenhood, 176. AValker v. Bank of State of N. Y., 98. Walker r. Bradbury, 354. Walker r. Eberly,253. Walker v. Kee, 203, 257. Walker v. Krebaum, 219. Walker v. Patterson, 106. Walker r. Stetson, 166, 372, 385. are to Pages. Walker v. Thompson, 30. Walker v. Wills, 304. Walker r. Wilson, 263. Walker v. Woollen, 400. Wall V. Monroe. 104. Wallace v. Agry, 171. Wallace v. Crilley, 317, 371. Wallace v. Douglass, 180. Wallace v. Grlzzard, 499. Wallace v. Jewell, 410. Wallace v. McConnell, 180, 320, 426. Wallis V. Llttell, 138. Walmsley v. Acton, 342. Walnut V. Wade, 197. Walrad v. Petrie, 18. Walsh V. Blatchley, 5, 172. Walsh V. Dart, 170, 171,314, 315. Walters v. Brown, 364. Walters V. Short, 409. Walton V. Williams, 16, 181. Wanzer v. Tupper, 339. Ward V. Allen, 177. Wardr. Bourne, 502. Ward V. Doane, 214. Wardv. Howard, 501. Ward V. Johnson, 95. Ward V. Smith, 245, 304, 494, 495. Ward V. Sparks, 315. Warden v. Tucker, 383. Ware v. McCormack,216. Ware f. Street, 198. Waring v. Belts (In full), 332. Waring r. Betts, 313, 318. Warnick v. Crane, 342. Warren v. Brown, 31. Warren v Durfee, 205. Warren v. Haight, 263. Warren v . Lynch, 35. Warren v. Scott, 21. Warren Co. v. Marcy, 272. Warrcnsburg &c. Assn. v. ZoU, 386. Warring v. WlUlamB, 408. Warrington v. Early, 53. Washburn v. Alden, 84. Washington Bank v. Krum, 151. Washington Mutual Fire Ins. Co. v. St. Mary's Seminary, 131, 133. Washington Sav. Bk. v. Ekey, 413. Watervliet Bank v. White, 197, 463. Watkins v. Halstead, 80. Watkins v. Manle, 293. Watkins v. Parsons, 605. Watrous V. Holbrook, 16. Watson V. Alley (In full), 294. Watson V. Brown, 342. Watson V. Cbesire (in full), 231 Watson V. Cheshire, 214, 216. Watson V. Iloag, 251. Watson V. Lorlng, 339. Ivii TABLE OF CASES CITED. References Watson V. Tarpley, 339. Watt V. Gaus, 465, 468. Watt V. Klrby, 44. Way V. Bachelder, 66. Way V. Butterworth, 224, 311, 312, 331. Way V. Towle, 459. Wayne Agricultural Co. v. Cardell, 248. Weader v. First Nat. Bank (in full), 206. Weader v. First Nat. Bank, 203. Weaver v. Barden, 268. Weaver v. Bromley, 411. Weaver r. Penn, 361. W(!aver v. Scott, 22. Webb V. Mears, 172. W.;bb V. Spicer, 73. Webber v. Gotthold, 367. Weber v. Bank, 512. Webster v. Bailey, 144. Webster v. Bainbridge, 154. Webster v. College, 117. Weed V. Bond. 146. Weeks v. Medler, 202. Weems v. Farmers Bk., 309. Weems v. Parker, 24. Weems v. Shanghnessy, 248. Wagner r. Biering, 147. Weldler v. Kanffman, 196. Weill V. Trosclair, 150, Weinhauser v. Morrison, 176. Welch V. Alhngton, 502. Welcli V. Dameron, 37. Welch V. Goodwin, 414. Welch V. Lindo, 215, 233, 235. Welch V. Taylor Mfg. Co., 383. Wellington v. Jackson, 409, 414. Wells V. Brigham, 180, 460. Wells V. Davis, 390. Welsh V. Ebersole, 225. Welsh V. German Am. Bk., 414. West V. Brown, 362. West Boston Sav. Inst. r. Thompson, 498. West Branch Bk. v. Fulmer, 384. Western Cottage Organ Co. v. Reddish, 94. Western Min. Co. v. Toole, 172. Westfall V. Braley, 198. Westminster Bk. i: Wheaton, 459. Westmoreland v. Foster, 105,270. Weston V. Hight, 211. Weston V. Meyers, 13, 14, 252. Weston V. Wiley, 504. West Phlla. N. Bk. v. Field, 414. West River Bank v. Taylor, 362. West St. Louis Sav. Bank v. Shawnee Co. Bank, 86, 95, 97. Wetherall v. Claggett, 342. Wetter v. Klley, 197. Iviii are to Pages. Wetumpka &c. R. R. Co. v. Bingham, 100. Weyerhausen v. Dan, 505. Whayley v. Houston, 309, 469. Wharton v. Morris, 32. Whealley v. Strobe, 22. Wheeler v. Guild, 460, 50i. Wheeler v. Newbould, 299. Wheeler i». Reed, 126. Wheeler v. Webster, 16, 173, 177. Wheeless v. Williams, 416. Wheelock v. Freeman, 407. Whilden v. Merchants &c. Bank, 176. Whisler r. Bragg, 212. Whistler v. Forster, 291. White V. Bank, 243. White V. Continental Nat. Bk., 182, 183, 407. White V. Gushing, 24. Whiter. Haas, 409, 4n. White V. Hopkins, 432. White r. Keiih,392. White V. Madison, 87. White V. Miners' Nafl Bk., 221. White V. National Bk., 221. White V. Stoddard. 307, 359, 387. White r. Vermont &c. R. R. Co., 40,99. AVhiteley v. Allen, 390. Whitford v. Laidler, 99. Whitmore v. Nickerson, 13. Whitney v. Essen, 505. Whitney r. Wyman, 87. Whittier v. Collins, 264, 359, 388, 391, 392. Whittmer v. Ellison, 434. Whitwell V. Johnson, 318. Whitworth v. Adams, 259. Widoe r. Webb, 146. Wilcox V. Aultman, 501. Wilcox V. Williams, 311. Wilcoxen v. Logan, 497. Wild V. Howe, 434. Wilde V. Armsby, 409. Wilder V. Cowles, 200. Wilder V. Weakley, 78. Wiles V. Robinson, 502. Wilhelms v. Schmidt, 503. Wilkie V. Chandon, 391. Wilkins V. Casey, 175. Wilkins V. Commercial Bank, 360. Wilkins v. McGuire, 304. Wilkinson v. Johnson, 234. Willet V. Shepard, 409. Williams v. Bank of U. S., 363. 367. Williams V. Cheney, 116. Williams v. Drexel, 182, 183. Williams V. Forbes, 145. Williams v. Gallyonter.lSl. Williams V. Germain, 181. Williams v. Lewis, 390. TABLE OF CASES CITED. References Williams v. Matthews, 360. WilUiims V. Merchants' Xat. Bk , 216. Williams v. Mobile Sav. Bank, 82. Williams V. Potter, 221. Williams V. Putnam, 338. Williams v. Robblns, 88, 136. Williams r. Second Nat. Bank, 98. Williams V. Triplett, 323. Williams v. Williams, H9, 427. Williams f. Winans, 174, 176. Williamson v. Cllnc, 35. Williamson v. Smith, 54. Williamson v. Watts, 77. Willlamsport v. Com., 102, 103. Wllliamsport Gas Co. v. Pinkerton, 304. Willis f. Ftnley,467. Willis V. Heatli (in fall), 208. Willis r. Willis, 216, 499. Wllloughby V. Moulton, 13. Wilson V. Codman's Exrs., 215. Wilson V. Harris, 409. Wilson V. Holmes, 221. Wilson V. Kinscy, 282. Wilson V. Law, 414. Wilson t'. Mechanics' Sav. Bk., 264. Wilson V. Powers, 138, 434. Wilson V. Ralph, 212. Wilson V. Richards, 366. Wilson V. Senior, 360, 388. Wilson r. Wilson, 143. Wilson Co. V. National Bank, 21. Wlnchell v. Carey, 39. Winders v. Sperry, 149. Windham Bk. v. Norton, 314,387. Wlngr. Ford, 257. Wlngo I'. McDowell, 144. WIneted Bk. v. Webb, 502. Winter r. Pool, 413. Wlntcrmnte v. Post, 180. Wiseman v. Chlappella, 168, 313, 347, 349. WIthlngton v. Herring, 85. Wltkowsky v. Maxwell, 314, 342. Witter. Williams, 262. Wittcy V. Mich. Mat. L. I. Co., 21. WIttram v. Van Wornier, 44. Hilly V. .Mlohi^an nut. L.. lus. Co. (In full), 62. Wolcott r. Van Santvoord, 303, 312. Wolff. Hostetter, 216. Wolfe V. Jewctt, 169, 367. Wolfe V. Wllscy, 9. Wood f. Bodwcll, 209. Wood V. Callaghan, :«9, 366. Wood t'. Duval, 201. Wood V. Mechanics' Ac. Co., 304. Woodf. Pugh, 182. Wood r. Steele, 410. Woodard f. GrllTlths etc. Com. Co., 178. Woodburn v. Woodburn, .504. are to Pages. Woodford v. Dorwin, 37. Woodman v. Thurston, 389, 390. Wood River Bank v. First Nat Bank (In full), 354. Wood River Bank v. Flr->t Nat. Bk., 338, 343, 344, 460. Woodrutf f. King, 197. Woodruff V. Merchants' Bk., 314. Woodruff V. Munroe, 255, 414. Woods V. Armstrong, 146. Woods V. North, 29. Woods r. Wilder, 83. W^oods V. Woods, 224, 498, 503. Woodworth r. Bank of America, 66, 409, 411. Woodworth v. Hantoon, 294. Woolen V. Ulrlch, 271. Wooley V. Cobb, 152. Woolf V. Schaeffer, 442. Woolley V. Clements, 316. Wooten V. Walters, 493. Worcester Bank r. Wells, 177. Worcester Co. Bk. v. Dorchester etc. Bk., 250, 274. Worcester Nat. Bk. v. Cheney, 154, 155. Worden v. Salter, 2:6. Workingmen's Bk. r. Blell, 392. Workman v. Wright, 256, 414. Works V. Ilershey, 27, 265. Worthlngton v. Cowles, 200. Worthlngton v. Gowlcs, 199. Wright V. Anderson, 384. Wright v. Andrews, 388. Wright V. Brosseau, 44. Wright V. Dyer, 430, 431. Wright t\ Hart, 30. Wright f. Irwin, 26, 274. Wright r. Railway Co., 513. Wright V. Shawcross, 363. Wright V. Wright, 393. Wulschuer v. Sells, 203, 207, 211. Wyman v. Adams, 384. Wyman r. Goodrich, 427. Wyman v. Robblns, 263. Wyman v. Yeomans, 410. Wynne v. Ralkes, 179. Y Yale V. Ward, 5. Yates V. Dalton, 91. Yates V. Donaldson, 432. Yeager v. Farwell, 392. Yeaton v. Berney, 180, 304. Yellowstone Nat. Bank v. Gagnon, 153. Yerkes i: Blodgett, 393. Yocum r. Smith, 413. York V. Jones, 410. lix TABLE OF CASES CITED. Yorkshire Banking Co. Young ». Adams, 198. Young V. Bennett, 312. Young V. Brown, 428. Young V. Bryan, 338. Young V. Cole, 199, 234. Young V. Harris, 113. ■ Young V. Lehman, 182. Young V. Morgan, 492. Young V. Ward, 174. Ix References are to Pages. , Beason, 93. | Youngs v. Lee, 370, 371. Younker v. Martin, 201. z Zabriskie v. Cleveland etc. R. R. Co. ,96. Zimmerman v. Anderson, 30. Zimmerman v. Rate, 65, 413. Zlmpleman v. Veeder, 299. Zuel V. Bowen, 91. THE LAW OF BILLS AND NOTES, CHECKS. CHAPTER I. GENERAL CHARACTERISTICS OF BILLS AND NOTES. Section 1. What is money. * 2. Commercial paper defined. 3. Bills of exchange — Foreign and inland bills. i. Forms of bills of exchange. 5. The effect of a bill — When does it operate as an equitable assignment. 6. Promissory notes defined. 7. Form of a promissory note. § 1. What is money. — Money may be defined to be " any material that by agreement serves as a common medium of exchange and measure of value in trade." ^ In the early days of every nation, trade took the form of barter, i. e., one thing which A. had to sell and B. wanted to buy, would be exchanged for another which B. wanted to sell, and A. wanted to buy, the qmintities of the two things thereby exchanged being determined by the parties themselves, according to their estimates of the relative values of the commodities. As a cer- tain commodity came into general demand, it finally became a measure of value for other commodities, and when its quantity was definitely determined by the stamp of the 1 Standard Dictionary. § 1 CHARACTERISTICS OF BILLS AND NOTES. [CH. I. government, it assumed the characteristics of money as we now know it. Instead of barter or exchange of goods in general, A. would sell B. what he had to sell for a certain quantity of the commodity called money, and he would buy from B. or any one else what he wanted, paying for it some of the money which he had acquired by his sale of his own goods. Various things of intrinsic value were used at different times as money; but finally gold, silver and copper became the common materials of money, and this is the universal practice of the present day.^ The most striking characteristic of money is its currency, its easy circulation from hand to hand for whatever it is worth. It has always been the rule of law in England and in this country, that the purchaser of a chattel, of a horse or a cow, could acquire no better title to it, than what his vendor possessed. And if the vendor's title was defective for any reason, because he had stolen or ap})ropriated what belonged to another, the good faith of the vendee and his ignorance of the wrongful ap})ropriation would not furnish him with any defense to the real owner's action of trover or replevin.^ On the other hand, it is probably the law in all civilized communities that money is not subject to this rule. If one misappropriates money belonging to another, and transfers it for value to a third person, who receives it in good faith and without knowledge of the true ownership, the third person acquires an absolute title to it against even the true owner. The true owner can only recover it of those who receive it with actual or constructive notice of the defect of title or without consideration. ^ It may be advi&able to state that there is no intention here to dis- pute the proposition that United States Treasury notes are properly described as money. As to which, see infra, § 22. 2 See Tiedeman on Sales, Chapter XXI., and in particular §§ 310-316. There was an exception to this rule recognized by the English law, in the case of goods sold in the open market or fair. But this exception does not exist in the United States, and the rule above stated is universally enforced. Tiedeman on Sales, § 31L 2 CH. I.] CHARACTERISTICS OF BILLS AND NOTES. § 3 § 2. Commercial paper defined. — As the demands of commerce for the medium of exchange increased, the actual transfer of money in payment of debts, particularly where the transactions arose between parties living in distant places, became inconvenient, and finally, on account of the limited quantity of money in existence, absolutely impos- sible. As a substitute for money, certain obligations of individuals to pay money were transferred in payment of debts. These obligations are now known as commercial paper. /Commercial paper may therefore be defined to include all those instruments of indebtedness which are treated and used, in the commerce of the world, as the equivalents or representatives of money, or which are given the characteristics of money in the furtherance of com- mercial ends. In the course of time and of the develop- ment of international commerce, a great many other kinds of commercial paper have been invented and adopted by the commercial world, to which the distinctive characteris- tics of money have been more or less given ; such as coupon bonds, certificates of deposit, bills of lading, receivers' cer- tificates, government warrants, and the like ; ^ but inasmuch as this book is prepared for the use of students in law schools, the only kinds of commercial paper which will be discussed and explained here, are bills of exchange, prom- issory notes, and checks. Inasnmch as checks are a species of bills of exchange, with material modifications, the book is called a treatise on Bills and Notes. § 3. Bills of exchange — Foreign and inland bills. — , A bill of exchange is an unconditional written order by \ one person on another, directing him to pay to a third person or to his order, or to the bearer, the sura of money therein named! He who draws the bill is called the drawer; the person on whom it is drawn, the drawee^ and the one in whose favor it is drawn, or to whom or to whose order the money is to be paid, ihQ payee. Until the drawee agrees to honor or pay the bill, ho is under no ^ AH of which are treated of in Tiedeman's Commercial Paper. 3 § 3 CHARACTERISTICS OF BILLS AND NOTES. [CH. I. obligation to the payee or holder. But when he accepts it, he binds himself to pay the sum of money called for by the bill.i The bill of exchange was first employed in the settle- ment of international debts, by merchants living in dif- ferent countries; but they were afterwards used as well in domestic transactions. There are, however, important differences between foreign and inland hills. A bill of exchange is said to be foreign, when it is drawn in one country and made payable in another. It is an inland hill, when it is both drawn and made payable in the same coun- try. A bill is not foreign because parties to the bill reside in different countries, where it is drawn and made payable in the same country. The residences of the parties do not control the character of the bill.^ Formerly foreign and inland bills differed from each other in many other particulars ; but there are but two im- portant differences which need be mentioned in this con- nection. First, where a bill is foreign, its interpretation and construction is governed by the law of the place where it is to be paid, instead of the law of the place of its execution. An inland hill, being paj^able in the place where it was drawn, no conflict of laws can arise, and its construction and interpretation is always governed by the law of the place where it is drawn. Secondly, for reasons given elsewhere,^ it is necessary to protest a foreign bill of exchange for non-payment, in order to hold the drawer and indorsers liable, but this is not true of inland bills ; and, as long as local statutes have not modified the law merchant, protest is of no legal value in the case of inland bills. 1 See post, chapter on Acceptance. 2 Scudder v. Union Nat. Bank, 91 U. S. 406, It must be remembered, however, that where the drawee does not reside in the place, where the bill is drawn, the bill is presumed to be payable in the domicile or place of business of the drawee, unless some other place of payment is agreed upon. See Grimshaw v. Bender, 6 Mass. 157, and post, chapter on Pre- sentment for Payment. 3 See post, chapter on Protest. 4 CH. I.] CHARACTERISTICS OF BILLS AND KOTES. § 3 In determining what are foreign bills of exchanver to postpone payment beyond the given date.^ The same rule is applied, where a note is made payable on the death of the maker, or a certain time after his death. '^ The negotiability of a note is held not to be affected by a stipulation that, upon the non-payment of an installment of interest or principal, the whole amount of the note shall thereupon become due and payable.^ But when a bill or note is made payable, " when convenient or possible," without stating any limit of time after which it shall be due and payable, absolutely and at all events ; one can hardly find any reason lor holding that the instru- ment is negotiable. And there are many cases, which maintain that such a bill or note is non-negotiable.^ But 1 First Nat. Bank v. Skeen, 101 Mo. 633 (H S. W. 732); Goodlowe v. Taylor, 3 Hawks, 458 (" against the 19th of September, or when the house John Mayfleld has undertaken to build for me is completed ") ; Buchanan v. Wren (Tex. Civ. App.), 30 S. W. 1077; Aimer v. Palmer, 10 Kan. 464 (15 Am. Rep. 353) (payable ■within a certain time or " as soon as I can with due diligence make the money out of said patent right"); Ernest v. Steckman, 74 Pa. St. 13; 15 Am. Rep. 542; (do.). But see, contra, Stults v. Silva, 119 Mass. 137 (18 months from date " or sooner at the option of the mortgagor "); Carroll Co. Sav. Bank v. Strother, 28 S. C. 504; 6 S. E. 313 (whenever deemed insecure). 2 Shaw V. Camp, 160 111. 425 (43 N. E. 608); Bristol v. Warm r, 19 Conn. 7; Conn v. Thornton, 46 Ala. 587; Carnwright v. Gray, 127 N. Y. 92 (27 N. E. 835) ; Martin v. Stone (N. H.), 29 A. 845. 3 De Hassw. Roberts, 59 Fed. 853; Carlou v. Keneally, 12 M. & W. 139; Wright 0. Irwin, 33 Mich. 32; May v. City Bank, 58 Ga. 584; Sea v Glover, 1 111. App. 335; Markey v. Corey (Mich.), 66 N. W. 493; Merrill V. Hurley, 6 S. D. 592 (62 N. W. 958); Stark v. Olsen, 44 Neb. 646 (63 N. W. 37). But see contra, Kimball Co. v. Mellon, 80 Wis. 183 (48 N. W. 1100). * Ex parte Tootell, 4 Ves. 372 (when my circumstances will admit without detriment to myself or family) ; Nunez v. Dauteles, 19 Wall. 560 (" as soon as the crop can be sold, or the money raised from any 26 CH. II.] PARTS OF BILLS AND NOTES. § 20 there are also many cases in which the courts, in their de- sire to ascribe the character of negotiability to all commer- cial paper, have held these phrases to mean that the obligor promises to pay within a reasonable time, and have recog- nized the paper to be negotiable notwithstaiuliiig.^ A bill or note is held to be non-negotiable, where it is made payable on the happening in the alternative of two events, one of which is uncertain.^ And so, likewise, where it is made payable in the alternative on one of two dates. But where the alternative days of pay- ment are connected with the stipulation of payment in the alternative in two different places, as where a note is made payable in New York on one day, and in Liverpool on a subsequent day, the note has been held to be nevertheless negotiable.^ It has also been held that a stipulation for renewal of the note destroys its negotiability.* Another ground for holding that a bill or note is non- negotiable, because the promise to pay is conditional, is where it is made payable out of a particular fund or debt, so that its payment depends absolutely u[)on the existence of the fund or debt, out of which it is to be paid.* But source ") ; Salinas v. Wright, 11 Tex. 572 (" as soon as mycircumslances will permit "). ^ Crocker v. Holmes, 65 Me. 195; 20 Am. Rep. 687 (when I sell my place where I now live); Kincaid v. Higgins, 1 Bibb. 396 ("as soon as I possibly can ") ; Ubsdell v. Cunningham, 22 Mo. 124 (to be paid as soon as collected from my accounts at P.) ; Works u. Ilershey, 35 Iowa, 340 (when convenient). - Sackett v. Palmer, 25 Barb. 179. But see Scull v. Roane, Hempst. C. C. 103. 3 Ilenschel v. Mahler, 3 Hill, 132; s. c. 3 Denio, 428. ^ Citizens Nat. Bank v. PioUet, 126 Pa. St. 194 (17 A. 603); CoUn t7. Spencer, 39 Fed. 262; Mitchell v. St. Mary (Ind. '97), 47 N. E. 224; Second Nat. Bank v. Wheeler, 75 Mich. 546 (42 N. W. 963). 5 Munger v. Shannon, 61 N. Y 251; Ehricks v. De Mill, 75 N. Y. 370; Brill V. Tultlc, 81 N. Y. 454; 37 Am. Rep. 515 (" and charge the same to our account for labor and materials performed and furnished"); Averett's Admr. v. Bookor, 15 Gratt. 163 (76 Am. Dec. 203) (out of any money in his hands belonging to mi) ; Kelly v. Bronson, 26 Minn. 359 (4 N. W. 607); Conroy v. Ferrie (.Vliun. 97), 71 N. W. 383. 27 § 21 PARTS OF BILLS AND NOTES. [CH. II. when, in a bill of exchange, the drawer simply indicates, by a reference to a particular fund or account, how the drawee may reimburse himself, and does not intend that the payment of the b'U should be conditional upon the existence or suiBciency of the fund, the bill will neverthe- less be negotiable. 1 But mere indorsement on the note by the maker, of the value of his property, will not destroy its negotiability.'^ § 21. Certainty as to amount of payment. — Another requirement to the negotiability of a bill or note is, that the amount to be paid on the iiistiuraont must be certain, and definitely stated in the body of the instrument. If, upon reading the instrument, the definite amount of the obligation cannot be ascertained, the bill or note is non- negotiable, although the paper contains references to other papers or accounts, by resort to which the amount <>t payment can be definitely ascertained. The law-merchant requires that the amount due on the bill or note shall be ascertained from a reading of the paper itself.^ There are, however, certain well-established exceptions to the rule just stated, where the actual amount due on a note or bill is not to be ascertained on the face of the instru- ment, although the means of ascertaining the exact amount is provided in the body of the instrument. Probably, it is safe to say, that in no such case would the bill or note be i Clark V. Lake Ave. & Loan Ass'n, 65 Hun, G25 (for S. account) ; Redman v. Adams, 51 Mo. 429 ( "aud charpje the same against whatever amount may be due for my share of fish " ) ; Ellet v. Bdtton, 6 Tex. 229 (in full of a certain judgment mentioned in bill). 2 Hudson V. Emmons (Mich.), 65 N. W. 542. 3 Cushman v. Haynes, 20 Pick. 132 (" deducting all advances and expenses ""); Jones v. Simpson, 2 B. & C. 318 (" the proceeds of a ship- ment of goods, value about £2000, consigned by me to you ") ; Legio v. Staples, 16 Me. 252 ("whatever you may collect for me from A."); Dodge V. Emerson, 34 M. E. 96 (a certain sum and "all other f-ums that shall be due him "); Culbertson v. Nelson, 93 Iowa, 187 (61 N. W. 854); Palmer v. Ward, 6 Gray, 340; Fralich v. Norton, 2 Mich. 130 (55 Am. Dec. 56). And see Brooks v. Struthers (Mich. 97) 68 N. W. 272; Carmody v. Crane (Mich. 97), 68 N. W. 268 (provision for payment of taxes) . 28 CH. II.] PARTS OF BILLS AND NOTES. § 21 declared to he negotiable, if the source of information as to the exact amount due was not public property, and was within the more or less exclusive control of one of the par- ties to the paper. It needs no authority to support the claim to negotiabil- ity of a bill or note, which contains a stipulation for the payment of a certain rate of interest on the principal sum.^ So, also, although among the earlier authorities some doubt was expressed as to the negotiability of a bill or note, ^hich was made payable icitli excJiange on some money center; it is generally held now, that the negotiability of such an instrument is not affected by a stipulation for pay- ment luiUi exchange? Where a note or bill contains a stip- ulation for the principal sum and interest, loiih attorneys^ fees and costs of collection, the authorities are more evenl}'' divided, whether such a stipulati(m destroys the negotiabil- ity of the instrument. "^ The same contradiction of authority 1 And the fact, that the note calls for a higher rate of in'erest after maturity, is held not to destroy it negotiability. Crunap v. BiTdan, 97 Mich. 293; 56 N. W. 559; Hope v. Barker, 112 Mo. 338 (20 S. W. 567); contra, Hegeler v. Cotnstock, 1 S. D. 138 (45 N. W. 331). 2 Price V. Teall, 4 McLean, 201; Morgan v. Edwards, 53 Wis. 599 (11 N. W. 21); Bullock v. Taylor, 39 Mich. 137; Culbertson v. Nelson, 93 Iowa, 187 (61 N. W. 854) ; First Nat. Bank v. Dubuque S. W. R. R. Co., 52 Iowa, 378 (35 Am. Rep. 280; 3 N. W. 395), Si-e contra Low v. Bliss, 24 111. 168 (7G Am. Dec. 742) ; Fitzharris v. Leggatt, 10 Mo. App. 527; First Nat. Bank v. Slette (Minn. 97) ; 69 N. W. 1148. See Second Nat. Bank v. Basuier, 12 C. C. A. 517; 65 F. 58, and contra, Carroll Co. Sav. Bk. v. Strolher, 28 S. C. 504 (6 S. E. 313). ^ That it does not destroy its negotiability, see Oppenheimer v. Farm- ers' Bank, 97 Tenn. 19; 36 S. W. 705; Smith v. Muucie Nat. Bank, 29 Ind. 158; Stapleton v. Louisville Banking Co., 95 Ga. 802 (23 S. E. 81) ; Ilowentein v. Barnes, 5 Dill. 482; Dorsey v. Wolff, 142 111. 589 (32 N. E. 495) ; Sperry v. Horr, 32 Iowa, 184; Gilraore v. Hirst, 56 Kan. 626 (44 P. 603) ; Md. Fertilizing Co. v. Newman, 60 Md. 584 ; Stark v. Olsen, 44 Neb. 646 (63 N. W.37); First Nat. Bank v. Slaughter, 98 Ala. 602 (14 So. 545). That the stipulation, though good and valid, destroys the negotiability of the instrument, see Woods v. North, 84 Pa. St. 407 (24 Am. Rep. 201); Clark V. Barnes, 58 Mo. App. 667; First Nat. Bank v. Gay, 63 Mo. 33 (21 Am. Rep. 430) ; Adams v. Seaman, 82 Cal. 636 (23 P. 53) ; Jones v Radlitz, 27 Minn. 240 (6N. W. 800) ; Nicely v. Commercial Bank, 15 Ind. App. 563 (44 N. E. 570) ; First Nat. Bank v. Laughlin, 4 N. D. 391 (61 N. W. 473) ; Second Nat. Bank v. Basuier, 12 C. C. A. 517; 65 F. 58. In a few States, 29 § 22 PARTS OF BILLS AND NOTES. [CH. II. exists as to the effect of the insertion in a note of an authority to confess judgments.^ A stipulation in a note, that the maker shall pay all assessments of taxes against property, on which a mortgage was given to secure the payment of the note, destroys its negotiability. ^ But in- dorsements of credits on the back of a note or bill would not affect its negotiability.^ § 22. Payment in money only. — Another requisite of negotiability is, that the instrument should call only for the pa3'ment of money. If the instrument should call for the doing or buying of something else, or for the payment of money or the delivery of something else in the alterna- tive, negotiability is denied to the instrument, and it becomes a non-negotiable contract.* In the contem- plation of the law, money is any medium of ex- change which is recognized by the law of the country, in which the bill or note is made or to be performed, as a legal tender in the satisfaction of debts. Two proposi- tions, deducible from that definition, are to be borne in mind; First. Anything which the law declares to be legal tender is money, and nothing else. /Secondly. Foreign money is not legal tender, in the satisfaction of domestic debts. In this country, at the present day (1898), the stipulation for attorneys' fees or costs of collection, in addition to lawful interest, is held to be a violation of the laws against usury. State V. Taylor, 10 Ohio, 378; Dow v. Updike, II Neb. 95; Boozer v. Anderson, 42Aik. 167. 1 That the note is npgotiable, see Oaborn v. Hawley, 19 Ohio, 130; Zimmerman v. Anderson, 67 Pa. St. 421 (5 Am. Rep. 447). That it is thereby made non-negotiable, see Law v. Crawford, 67 Mo. App. 150; First Nat. Bank v. Marlow, 71 Mo. 618; Sweeney v. Thickstun, 77 Pa. St. 131. 2 Walker v. Thompson (Mich.), 66 N. W. 584. 3 Farmers' Bank of Springville v. Shippey, 182 Pa. St. 24 (37 A. 844). * Hodges V. Shuler, 22 N. Y. 114 (promise to pay $1,006 or upon sur- render of note to issue stock, etc.) ; Lawrence v. Dougherty, 5 Yerg. 435 (payable "in ginned cotton, at eight cents per pound"); Auerbach v. Pritchett, 68 Ala. 451; Culbertson v. Nelson, 93 Iowa, 187 (61 N. W. 854). But see contra Borah v. Curry, 12 111. 66; Bilderback u. Burlin- game, 27 111. 341. 30 CH. II.] PARTS OF BILES AND NOTES. § 22 gold and silver dollars, and the United Treasury notes, ^ are legal tender. A bill or note, calling for the payment of anything else, is non negotiable. But it is permissible to provide that the bill or note shall be p:iyable in only one of these three kinds of legal tenders, as, for ex imple '* pay- able in gold coin." 2 A bill or nf)te, made expressly pay- able ill National bank notes, would undoubtedly be non- negotiable. Prior to the civil war in this country, the State banks issued notes, which, under the law, passed as currency, and their value was more or less depreciated. It became a common custom for bills and notes to be made payable in a particular currency. There can be little doubt that such bills and notes were non-negotiable, according to the com- mon law merchant. "^ And under that banking system it was the rule, rather than the exception, for bills and notes to be made payable in a particular currency, or generally, " in current funds " '♦ in currency " " in good current money," and the like. Currency has a broader signification than money, and includes every medium of exchange, although it may not be legal tender. When Con- gress declared the United States Treasury notes to be legal tender, some of the courts held that, when a bill or note was made payable " in current funds," " in currency " and the like, without specifying any particular currency, the paper must be construed as calling for payment in the legal tender of the country.* » As to the power to declare these notes legal tender, see Tiedeman's Limitations of Police Power, § 90. 2 Chrysler v. GriswoM, 42 N. Y. 200; Burton v. Brooks, 25 Ark. 215 (payable in Greenback currency), meanin<; United States Treasury notes; Wright V. Morgan (TiX. Civ. App.), 37 S. W, 627 (payable in gold). 3 Wright V. Hart, 44 Pa. St. 45t (in current funds of Pittsburg) ; Leiberv. Goodrich, 5 Cow. 186 (in Pennsylvania or New York currency) ; Pardee v. Fish, GO N. Y. 205 (19 Am. Rep. 170) ; Diliard v. Evans, 4 Ark. 175 (in common currency of Arkansas); Warren v. Brown, 04 N. C. 381 (in current notes of North Cnrolina) ; Lange r'. Kohne, 1 McCord, 115 (in paper medium); Taylor v. Neblett, 4 Ileisk. 401 ('-In Tennessee money "). < Bull V. Bank of Kasson, 123 U. S. 105; Frank v. Wessels, 64 N. Y. 31 § 22 PARTS OF BILLS AND NOTES. [CH. II. It is not objectionable to the negotiable character of a bill or note that it calls for the payment of a certain quantity of foreign money ; but if it is made payable in foreign money, it is non-negotiable. Where the denomi- nations of the foreign money are different from those of the domestic money, no difficulty can arise from the fact that the paper calls for the payment of a certain amount of foreign money. But, where the denominations are the same in both countries, it is difficult to determine whether the reference to foreign money is intended to indicate the value of the money called for by the paper, or that it shall be payable in the foreign money. Thus, Canada and the United States havethe same denominations ; and during the Civil War, when the United States money was depreciated, it was customary in trade on the border to insert in notes, which were made on a specie or gold basis, that they were payable in Canada money. In two cases, arising in Michigan and New York, two opposite conclusions were reached as to the effect of this provision. In the Michigan case, the court held that the note could only be paid in Canada money, and hence was non-negotiable ; and in the New York case, it was held that the parties had used the phrase to indicate the amount in specie which was to be paid, and that the note was nego- tiable, because it could be liquidated by the payment of United States Treasury notes of the same value as the Canada dollar.^ The denomination of money must generally be stated in the body of the instrument. It need not, however, be writ- ten in words; the denominational mark, for example, •' £ " or '* $ " being sufficient, whether it appears in the body of the instrument or in the marginal note, the payee or holder 155; Burton v. Brooks, 25 Ark. 215. But see, contra, Huse v. Hamblln, 29 Iowa, 501 (4 Ana. Kep. 244). Where the instrument is made payable " in good current money " and the like, the construction, that only legal tender was intended, becomes more rational. AVharton v. Morris, 1 Dall. 133 (in lawful current money of Pennsylvania) ; Black v. Ward, 27 Mich. 191 (15 Am. Rep. 162). 1 Thompson v. Sloan, 23 Wend. 71 (35 Am. Dec. 546); Black v. Ward, 27 Mich. 191 (15 Am. Rep. 162). 32 CH. II.] PARTS OF BILLS AND NOTES. § 23 being impliedly authorized in that case to fill in the denom- ination.^ It is customary to write the sum of money in full in the body of the instrument, and to express it in figures in the upper or lower left-hand corner. But the statement in figures in the corner is only a memorandum and does not constitute, in the contemplation of commercial law, any part of the instrument. Where there is a variance between the figures so placed and the written words in the body of the instrument, the written words will invariably determine the amount called for ; but the figures in the margin can be pjfoperly referred to, where the written words are indis- tinct, for the purpose of verification of the amount which is presumably required to be paid on the instrument.^ So im- material are the figures in the margin of a bill or note, that it is held not to be a forgery to alter them, so as to make them conform to the written statement of the amount in the body of the instrument ; ^ and if the amount to be paid is not stated in the body of the bill or note, it is a defective instrument, and resort to the marginal figures cannot sup- ply the deficiency.* § 23, The place of payment. — If no place of payment is given in the bill or note, it is payable at the place of husi- n^^ss of the primary obligor; and at his residence, if he have no place of business. If it is a note, it is payable at the maker's place of business or residence ; and if it is a bill, it must be presented for acceptance and payment at the place of business or residence of the drawee and acceptor. If the bill or note states a place of payment, presentment 1 Sweetser v. French, 13 Met. 262; Beardsley v. Hill, 61 111. 354. 2 Com. V. Emigrant Ins. Bank, 98 Mass. 12 (93 Am. Dec. 126); Riley y. Dickens, 19111.29; Norwich Bank v. Hyde, 13 Conn. 279; Hollen ». Davis, 59 Iowa, 444 (44 Am. Rep. G8S). 3 Sweetser v. French, 13 Met. 262. * Hollen V. Davis, 59 Iowa, 444 (44 Am. Rep. 688); Norwich Bank V. Hyde, 13 Conn. 279. But see contra, Garrett v. Interstate Bauk, 79 Tex. 133 (15 S. W. 274). See post, § 28, as to authority to fill up Urnnks. 3 33 § 24 PARTS OF BILLS AND NOTES. [CH. II. must be made at that place, in order to hold the drawer sureties and indorsers liable.^ Generally, it is not necessary to the negotiability of a bill or note, to insert a statement of a place of payment. But in some of the States, it is now required by statute.^ § 24. Acknowledgment of consideration. — It is an almost invariable custom to insert in a bill or note the words value received., or others of like import, as an acknowledgment of the receipt of a consideration from the payee. But, although it was at an early date held essential to the negotiability of bills of exchange, it is now very generally held in the United States, as well as in England, that no acknowledgment of consideration is nec- essary to the negotiability of such instruments, except in the case of promissory notes, where the local statute, in giving the character of negotiability to notes, requires the general acknowledgment of consideration.^ When the words value received are inserted in a note, it is held to be an acknowledgment of consideration between the maker and payee ; but in a bill, it is prima facie evidence of con- sideration between the drawee and payee, as a general 1 Cox V, National Bank, 100 U. S. 704; Bank of United States v. Smith, 11 Wheat. 171; Hills v. Place, 48 N. Y. 520 (8 Am. Rep. 568). 2 Cox V. National Bank, 100 U. S. 704, construing the Alabama statute. In Virginia, it is required that the bill or note shall be payable at a particular bank or business office. Freeman's Bank v. Ruckman, 16 Gratt. 126; Holloway v. Porter, 46 Ind. 62. See Anniston L. & T. Co. v. Stickney, 108 Ala. 146 (19 So. 03), where it is held that the place of pay- ment may be shown by parol evidence, where such stipulation of place of payment is necessary to negotiability of a bill or note. 3 Noyes v. Gilman, 65 Me. 589; Courtney v. Doyle, 10 Allen, 122; Hook V. Pratt, 78 N. Y. 371 (34 Am. Rep. 539); Bristol v. Warner, 19 Conn. 7; Dtan v. Carrulh, 108 Mass. 242; People v. McDermott, 8 Cal. 288. It seems, also, that " value received," or some other acknowledg- ment of consideration, is not always held to be necessary to the negotia- bility of a promissory note, even though the statute enumerates it as one of the elements of a negotiable note. Bailey v. Smock, 61 Mo. 213. Acknowledgment of consideration not required in Illinois to make com- mercial paper negotiable. Haines v. Nance, 52 lil. App. 406 (Rev. Stat. Ill.,ch.98, §3). But see Hart i?. Harrison Wire Co., 91 Mo. 414 (4 S. W. 123). 34 CH. II.] PARTS OF BILLS AND NOTES. § 25 rule, i. e., where the bill is drawn payable to the order of a third person. But where the bill is made payable to the drawer's order, so that the drawer and payee are the same persons, it is presumed to be an acknowledgment of consideration between the drawer and drawee or acceptor.^ The words value received imply that there has been a valuable and substantial consideration.^ But it is always possible to show by parol evidence that, notwithstanding this acknowledgement of consideration, no consideration actually passed between the parties. "^ , Although it is not necessary to do more than to insert a general acknowledgment of consideration, by the use of such words as for value received^ the specific considera- tion of the bill or note may be inserted without affecting the negotiability of the instrument, even though the par- ticular consideration cannot be proven. The general impli- cation of consideration will enable the parties to prove the actual consideration, whatever it is.* § 25. Sealed instruments not negotiable. — The weight of authority is decidedly in favor of the proposition that, in the absence of statutory regulations to the contrary, the sealing of a bill or note w\\\ destroy its negotiability, not- withstanding that the geneial common law prohibition of the assignment of choses in action has been repealed. It is still held to be a requisite of bills and notes that they must be open letters, i. e., unsealed.^ > Highmore v. Primrose, 5 M. & S. 65; Mandeviller. Welch, 5 Wheat. 277. 2 Mandeville v. Welch, 5 Wheat. 277; Delano v. Bartlctt, 6 Cush. 304; Williamson v. Cline (W. Va.), 20 S. E. 917; Hill v. Todd, 29 111. 101 ; MuUer v. Cook, 23 N. Y. 49.5; Martin v. Hazard, 2 Colo. 596. 3 Schoonraaker V. Roos.i, 17 Johns. 301; Russell v. Hall, 10 Mart. (8 Ls. N. s.) 288; Parish v. Stone. 14 Pick. 198 (25 Am. Dec. 373) ; Snyder V. Jones, 38 Md. 542. * Sylvester v. Staples, 44 Mc 496; Corbett v. Clark, 45 Wis. 403 (30 Am. Rep. 763; Abbott v. Hendricks, 1 Man. & Gr. 791; Buchanan v. Wren, Ti-x. Civ. App. (30 S. W. 1077). 5 Frenall u. Fitch, 5Whart. 325; Warren v. Lynch, 5 Johns. 239; Lewis V. Wilson, 5 Blackf. 370; Sidle v. Anderson, 45 Pa. St. 464; Barden v. Southerland, 70 N. C. 528; Rawson v. Davidson, 49 Mich. 607; Osbornu. 35 § 26 PARTS OF BILLS AND NOTES. [CH. II. If a bill or note is sealed by the use of a wafer or an impression on wax, there can be no doubt that it was intended to make it a sealed instrument, and to take from it the character of negotiability, allhoiigh no reference is made to sealing in the body of the instrument. But if the sealing consists of a scroll, — which in most of the United States is a sufficient sealing, only when there is a reference to sealing in the body of the instrument, — affixing the scroll does not make a bill or note a sealed instrument, unless in the body of the instrument it is stated that it has been sealed.^ Where the party, executing a bill or note, is a corpora- tion, the addition of the seal does not ordinarily destroy its negotiability, in any case.^ § 26. Delivery. — Until the bill or note has been de- livered, it can have no validity; and, although delivery is presumed to have been made on the given date of the paper, this presumption can be overthrown by parol evidence of a delivery on some other day, preceding or following the date. In such a case, the life of the bill or note begins on the actual day of delivery, and not on the stated date of the paper. ^ Kistler, 35 Ohio St. 89. One must bear in mind in this connection the dis- tinction already made (.^ee ante, § 17) between negotiability and assign- ability. The sealed note or bill is assignable, but the assignee takes it subject to equitable defenses. Clute v. Robison, 2 Johns. 595; Hall v. Hicl^man, 2 Del. ch. 318; Barrow i'. Bispham, 6 Halst. 116; Heifer v. Alden, 3 Minn. 332; Parks v. Duke, 2 McCord, 380. And no days of grace are allowed on a scaled note or bill. Skidraore v. Little, 4 Tex. 301. 1 Humphries v. Nix, 77 Ga. 98 ; Van Bockkellen v. Taylor, 62 N. Y. 105 ; Bancroft v. Haines, 13 Pa. Co. Ct. 116; 2 Pa. Dist. 373. In some of the States, by statute, instruments, which would otherwise be negotiable, are not change 1 in character by being sealed. For these States, see Tiedeman Com. Paper, § 32. 2 Central Nat. Bank v. Railroad Co., 5 S. C. 156 (22 Am. Rep. 12) ; Dutton V. Marsh, L. R. 6 Q. B. 861; In re Imperial Land Co., L. R. 11 Eq. 498; Jackson v. Myers, 43 Md. 452. But see contra, Clark v. Farmers Mfg. Co., 15 Wend. 256. As to the use of the seal in the execution of bonds, see Tiedeman's Com. Paper., Chap. XXV.; and the use of a seal by a private corporation in the execution of a bill or note, see post, § 45. 3 Cransan v. Goss, 107 Mass. 439 (9 Am. Rep. 45) ; Lovejoy y. Whipple 18 Vt. 379 (46 Am. Dec. 157); Gale v. Miller, 54 N. Y. 536; Marvin t?. 36 CH. II.] PARTS OF BILLS AND NOTES. § 26 But the maturity of the paper, where it is made payable so many days after date^ is computed from the stated date, and not from the actual day of delivery.^ So necessary is delivery to the life of a bill or note, that if it is found in his possession after the death of the maker or drawer, the payee cannot sue the estate on it ; nor does the payee ac- quire title to the instrument, if it is subsequently delivered to him by the personal representative of the deceased maker or drawer. ^ The same rule ol)tains in the case of a partnership note, not delivered before the dissolution of the firm. It cannot be delivered afterward except with the consent of all the partners,^ and it is to be presumed that it cannot be delivered at all, where the dissolution of the partnership resulted from the death of one of the partners. If a bill or note is delivered to the personal agent of the drawer or maker, the delivery is not complete, so as to pass title, until the agent has in turn delivered it to the payee or his agent. Until such second delivery, the maker or drawer can recall it from the agent. ^ And this prin- ciple has been applied to the tranj5mi.s!!ion of a bill or note by mail to the payee. As long as it is in (ran.sil, it can be recalled, and the recall will prevent any acquisition of title thereto by the payee ; since the postal authorities McCullum, 20 Johns. 288; Thomas v. Watkins, 16 Wis. 549; Dunavan t;. Flynn, 118 Mass. 637; Richards v. Darst, 51 111. HO. 1 Powell V. Waters, 8 Cow. Ol^'J; Bumpass v. Timms, 3Sneed. 459. See ante, §§ 7, 8. 2 Smith V. Wyckoff, 3 Sandf. Ch. 77; Clark v. Sigourney, 17Coun. 511,; Purviancc v. Jones, 120 Ind. 1(J2 (21 N. E. 1099); Perry v. Crammoud, 1 Wash. C. C. 100. The latter case holding, however, that the payee has a claim on the undelivered note, jl he had actually parted with the consid- eration for the same. This is more properly described as a claim against the estate for a return of the cou.sideration. And where a note is re- tained by maker as agent of payee, the personal representatives may deliver it after death of maker. Welch v. Daraeron, 47 Mo. App. 221. 3 Gale V. Miller, 54 N. Y. 53G; Woodford v. Dorwin, 3 Vt. 82 (21 Am. Dec. 573). * Devries v. Shumate, 53 Md. 211; Brind v. Hampshire, 1 M. & W. 365. Otherwise, where third party is agent of both parties. Sto:kton Sav. &.C. Soc. V. Giddings, 96 Cal. 84 (30 P. 1016). See Morris v. Preston, 93 111. 215. 37 § 26 PARTS OF BILLS A^D NOTES. [CH. H. arc for that transaction held to be the agent for delivery of the maker or drawer.^ But if it is not recalled, the deposit of the letter, containing the bill or note, in the mail constitutes a suflScient delivery to pass title. ^ Where, however, the note or bill is delivered to an agent of the payee, or to a custodian or bailee, who is to deliver it to the payee at his convenience, upon certain conditions, or at a certain time in the future, the delivery is complete, and title passes, even though the delivery to the payee is not made until after the death of the maker or drawee.^ But delivery to a stranger Is not good, i. e., where the stranger cannot be considered in any sense as a bailee or agent of the payee,* The delivery must also be made with the intention to pass title and to complete the transaction. If the note or bill be handed to the payee or his agent, solely for the pur- pose of examination, or with the understanding that no title shall pass before performance of a condition; the delivery is not complete, and suit cannot be maintained by payee on that paper. ^ In this discussion of these unusual methods of delivery, the effect of the same is here 1 Muller V. Pondir, 55 N. Y. 325 (14 Am. Rep. 259). In this case a letter containing the note was given to malier's agent in Havana, to be mailed when the vessel arrived at New York. And see Norton v. Norton, 49 Hun, 605. 2 Kirkman v. Bank of America, 2 Coldw. 397; Mitchell v. Byrne, 6 Rich. 171; Hyde u. Goodnow, 3 N. Y. 266; Ex parte Cote, L, R. 9. Ch. App. 27. 3 Giddings v. Giddings, 51 Vt. 227 (31 Am. Rep. 682) ; Mason v. Hyde, 41 Vt. 432; Richardson v. Lincoln, 5 Met. 201 ; Bodley v. Higgins, 73 111. 375; Shaw V. Camp, 160 111. 425 (43 N. E. 608), Elliott v. Deasou, 64 Ga. 63; Stockton Sav. &c. Soc. v. Giddings, 96 Cal. 84; 30 P. 1016 (third party was agent of both parties). 4 Gordon v. Adams, 127 111. 223 (19 N. E. 557) ; Adams Bank v. Jones, 16 Pick. 574. 5 Carter v. McClintock, 29 Mo. 464; Hurt v. Ford (Mo.), 36 S, W. 671 Ruggles V. Swanwick, 6 Minn. 526; Dodd v. Dunne, 71 Wis. 578 (37 N. W. 430). And the same rule holds, where a note is executed and delivered in jest. Shipley v. Carroll, 45 111. 285, But a note or bill is presumed to have been delivered when it is in possession of the payee. Garrigus v. Home &c. Soc, 3 Ind, App. 91 ; 28 N. E. 1009. 38 CH. II.] PARTS OF HILLS AND NOTES. § 27 considered, only as it bears upon the rights of the imme- diate payee, and the rights of subsequent bona fide holders are not taken into consideration. Their rights are con- sidered in a subsequent chapter.^ Inasmuch as the life of a contract begins on the day of delivery, its validity is determined then, and not by its stated date. Where, therefore, the State law makes con- tracts invalid, when made on Sunday ; if a note is delivered on Sunday it is invalid, although it may bear a different date. On the other hand, if it is dated and executed on Sunday, but it is not delivered on that day, it is not a Sun- day contract, and is valid, although the maturity is computed from the date given. ^ § 27. Delivery as an escrow. — An e.s6T0?« is generally defined as a legal instrument , delivered to a third person to be held by him until the happening of a certain condition, when the title is to pass to the grantee or person for whom the instrument was intended. In the law of real proi)city, and al.so the law of personal property generally, until the condition happens or is performed, no title is acquired by the intended grantee, even though the deed or properly is delivered to him pi ior to such performance of the condi- tion ; and any bona fide purchaser from the grantee or vendee could acquire no title, which he could assert against the grantor or vendor in escrow.^ In applying the doc- trine of escroio to negotiable bills and notes, the difficulty is met with, that if a bona fide purchaser where a bill or note is delivered in escrow, cannot acquire title, which ho ' See post, chapter on Bona Fide Holders. 2 Drake v. Rogers, 32 Me. 524; Marshall u. Russell, 44 N. H. 509; Flanagan v. Meyers, 41 Ala. 132; King v. Fleming, 72 111.21 (22 Am. Rep. 131); Davis v. Barger, 57 Ind. 54. But it has been held that a note or bill, delivered on Sunday, may be subsequently ratified, and thereby made a valid contract. Winchell v. Carey, 115 Mas3. 500 (15 Am. Rep. 151); Lovejoy v. Whipple, 18 Vt. 379 (46 Am. Dec. 157) ; King v. Flem- ing, 72 111. 21 (22 Am. Rep. 131); Smith v. Case, 2 Greg. 100. Aud in any event the payee can recover the consideration paid for the paper, Sayre v. Wheeler, 31 Iowa, 112. 3 See Tiedeman on Real Prop., § 815; Tiedeman on Sales, § 326. 39 § 28 PARTS OF BILLS AND NOTES. [CH. II. could enforce against the drawer and acceptors of the bill, and against the maker of the liote, the commercial value of bills and notes, as substitutes for money, would be very seriously curtailed. Hence, it has been held very gen- erally, that, although delivery of a bill or note in escrow will not pass title, before the performance of the con- dition to the payee, or any subsequent holder who takes it without value or with notice of the unperformed con- dition of the escrow, a bona fide holder for value can hold all the parties liable on the paper.* § 28. Delivery of bills and notes executed in blank. — Where a bill or note is signed in blank, and delivered to the payee or a third person, with the authority to fill up the blanks, no second delivery is needed ; and the validity of the paper will, after its completion, relate back to the time of its delivery by the maker or drawer.^ Where the instrument is a deed, or any instrument under seal generally, the author- ities are at variance on the question of the necessity of a second delivery.^ But it seems that a coupon bond, having the characteristics of negotiable paper, may be delivered in blank, to be completed by another, without requiring a second delivery after its completion.* And where a blank note is filled out by an unauthorized agent, and it is deliv- ered by him to the payee, ratification by the maker is a good rebuttal to the defense of want of authority.^ The agent, to whom the blank instrument is given to fill 1 Benton v. Martin, 52 N. Y. 570; Black River Ins. Co. w. N. Y. &c. T. Co., 73 N. Y. 282; Jones v. Shaw, 67 Mo. 667; Fearing v. Clark, 16 Gray, 74 (78 Am. Dec. 394) ; Foy v. Blackstone, 31 111. 538 (83 Am. Dec. 246) ; Hutchinson v. Brown, 19 D. C. 136, But see contra, Chipman v. Tucker, 38 Wis. 43 (20 Am. Rep. 1). 2 Davidson v. Lanier, 4 Wall. 458; Angle v. N. W. &c. Ins. Co., 92 U. S. 330; Bank of Pittsburg v. Neal, 22 How. 96; Hensel v. Chicago &c. R. R. Co., 37 Minn. 88 (33 N. W. 329); Rich v. Starbuck, 51 Ind. 87; Ives v. Farmers' Bank, 2 Allen, 236 ; Snyder v. Van Doran, 46 Wis. 602 (32 Am. Rep. 739). 3 See Tiedeman Real Prop., § 789. 4 White V. Vermont &c. R. R. Co., 21 How. 575. 5 Bremner v. Fields (Tex. Civ. App.),34 S. W. 447. 40 CII. II.] PARTS OF BILLS AND NOTES. ILL. CAS. out, cannot bind principal by inserting any unusual clause ; at least as against the immediate payee who takes the paper with knowledge of the interposition of the agent. He is not even authorized to add "with interest" to a renewal of a note in which interest was stipulated for.^ ILLUSTRATIVE CASES. Fuuk V. Babbitt, 156 111. 408 (41 N. E. 1G6). Armstrongs. Pomeroy Nat. Bauk, 46 Ohio St. 512 (22 N. E. 866). Browu V. Butchers' aud Drovers' Bank, 6 Hill, 443. Witty V. Michigan Mut. L. Ins. Co., 123 Ind. 411 (24 N. E. 141). Dorsey v. Wolff, 142 111. 589 (32 N. E. 496). Brown v. Jordhall, 32 Minn. 135 (19 N. W. 650). Riggs V. Trees, 120 Ind. 402 (22 N.E. 254). Bill of Exchange Without Naming Drawee — Form of Action and Rights of Parties. Funk V. Babbitt, 150 111. 408 (41 N. E. 166). Baker, J. This was assumpsit brought by Erasmus D. Bab- bitt, appellee, against Francis M. Fuuk, the appellant, and one Ira Lackey, as partners under the firm name of Fuuk & Lackey, The 15 special counts of the declaration counted upon 15 promissory notes claimed to have been made by the firm to appellee, and the declaration also contained the common counts. The firm had been dissolved a year or more prior to the com- mencement of the suit. Lackey made default. Appellant inter- posed four pleas, — nonassumpsit, no consideration, that he did not execute the notes, and denial of joint liability, — and the two latter pleas were verified by atfidavit. A jury trial resulted in a verdict and judgment in favor of appellee, and against both part- ners of the late firm, for $4,240. There was an affirmance of the judgment upon appeal of Funk to the appellee court, and he then brougiit tlie case here by this appeal. It is claimed that the circuit court committed error in proceed- ing to trial without issue being joined upon the plea of nouas- sumpsit and those in denial of the execution of the notes and of joint liabilit}'. All three of said pleas concluded to the country, and no forinnl similiter was added to either. It is the doctrine of this court that going to trial without formal issue being joined on a i)lea is a waiver of a formal joinder, and the irregu- larity is cured by the verdict. Anderson v. Jacobson, 66 111. 522 ; Strohm v. Hayes, 70 III. 41 ; People v. Weber, 92 111. 288. » Meise v. Doscher, 83 Hun, 580; 31 N. Y. S. 1872. 41 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. H. It is assigned as error that the trial court permitted to be intro- duced in evidence six of tlie written instruments purporting to be signed by the firm of FLink& Lacke}'. Tliese several instruments were, la form, substantially like this: " $350.00. Bloomington, 111., April 23, 1891. Thirty days after date, pay to the order of E. D. Babbitt three hundred and fifty dollars, for value received. Funk & Lackey." Said instruments were declared on as promis- sory notes. It is urged that they are not notes, or even prom- ises to pay, and, not being directed to any one, do not constitute drafts or orders, and in fact amount to no more than blank pieces of paper. They are, undoubted'}', very irregular and informal instruments, but they are not void as written evidence of indebt- edness. A person may draw a bill upon himself, payable to a third pei'sou, in which case he is both drawer and drawee. Here the firm drew bills, but did not address them to any third pers(m or persons, and it is therefore to be regarded that they were, in legal effect, addressed to themselves, as drawees, and the sig- natures of the firm to the several bills bound the firm, both as drawers and acceptors. The instriunents are inland bills of exchange, to which the firm sustain the triple relation of drawers, drawees, and acceptors. And, as the declaration contains the consolidated counts, the bills were admissible in evidence under them. Moreover, the drawers and drawees being the same, the bills are, in legal effect, promissory notes, and may be treated as such, or as bills, at the holder's option. 1 Daniel Neg. Inst. §§ 128, 129. Complaint is made that counsel were permitted, over the objections of appellant, to ask numerous leading questions of Babbitt, the plaintiff below. On both sides of the case the rule excluding such questions on the direct examination of witnesses was rather loosely enforced, — more so than is advisable. Green- leaf says (1 Greenl. Ev., § 435), that when and under what cir- cumstances a leading question may be put is a matter resting in the sound discretion of the court, and not a matter which can be assigned for error. And this court has held that a general objec- tion to a question will not reach the objection of its being lead- ing, and that trial courts must be allowed to exercise a large discretion on the subject of leading questions. Farmelee v. Austin, 20 111. 35; Bank v. Dunbar, 118 111. 625; 9 N. E. 18(5. We do not understand the law, as held in tiiis State, to be that an assignment of error will not lie for permitting leading ques- tions to be asked ; but we do understand the doctrine to be tliat the matter of allowing such questions is so much a matter within the discretion of the trial court as that a judgment will not be reversed for a ruling in regard thereto, unless it is manifest that there has been a palpable abuse of discretion, and also a sub- stantial injury done. Upon inspection of the record, we find that in almost every instance the objections interposed were general objections, and not placed upon the ground that they were lead- ing. In a comparatively few instances the objections were put upon 42 CH. ir.] PARTS OF BILLS AND NOTES. ILL. CAS. that specific ground. But, so far as we can discover, in every such instance either the objections were made after the questions had been answered, and no motions made to exclude, or the ques- tions and answers were substantially repetitions of questions and answers already in the record, or else the inquiries were in regard to minor and unimportant matters. Moreover, Babbitt, at the time of his examination, was over 82 years of age, and it is apparent from the record that the infirmities of old age made it difficult to get his testimony upon the real matters involved in the controversy without, to some extent, resorting to direct and pointed interrogatories. Upon the whole, we are unable to come to the conclusion that the action and the rulings of the court in the premises show such a palpable and injurious abuse of discre- tion as to constitute reversible error. It is claimed that the court erred in allowing Lackey to testify, in answer to leading questions, over the objections of appellant, that the money he got of Babbitt " was used in firm business." The examination was thus : " Q. What was done with the money? A. Used to pay debts of the firm. (Objection and exception by defendant's counsel.) Q. Was it used in the firm? (Objection by defendant.) A. Yes, sir. (Defendant excepted.) The Court: That is all right, as far as it goes. (Defendant ex- cepted.) Q. Was that money used in the firm business? (Ob- jection by defendant, as calling for conclusion.) A. Yes, sir. The Court : I suppose it is a matter of fact, whether it was that way or not. He may answer that. (Defendant excepted.") We think that, from the standpoint of the views already expressed, this claim of error is not well made. The 15 notes in suit — the first bearing date December 13, 1890, the last bearing date May 27, 1891, and the others bearing intermediate dates — were executed by Lackey, in the name of the firm, for moneys borrowed of appellee at said several times. The moneys were delivered in the form of checks on the People's Bank of Bloomington, signed by Babbitt, and paj'able to Funk & Lackey or bearer. Appellant and Lackey were, and for many years had been, partners in the retail drug business at Blooming- ton, under the firm name of Funk & Lackey. Lackey had the principal care and management of the business. Funk giving it but little personal attention. At the trial the theory of plaintiff below (appellee here) was that he had loaned his money to the firm, and had taken the firm notes therefor, the money being delivered to, and the notes signed by Lackey, one of the partners, acting in behalf of, and as the agent of the firm. The tlieory of the defendant was that Lackey had borrowed the money as an individual, and for his own personal use, under an agreement to give the firm notes as security therefor, and that appellee had cognizance of these facts at the time of the transactions. There was evidence tending to prove each of these theories of the case. The instructions tliat were given on motion of appellee are not challenged. Appellant tendered to the court an instruction which 43 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. read as follows: " (4) The court instructs the jury that although they may believe from the evidence that the plaintiff loaned the money to the amount of the notes offered in evidence, and took such notes thereof, yet if the jury further believe from the evi- dence that such money was in fact borrowed for the use of Lackey, and not of the firm, and that the i)laintiff knew such fact, if it be a fact, or if the jury believe that the plaintiff knew, or had notice, that Lacke}'^ had no power so to bind the firm, or that the money, if an}^, was not in good faith loaned to the firm, then in either of such cases the jury should find the issues for the defendant." The court did not give said instruction, as asked, but modified it by adding thereto, at its end, the following w'ords: " Unless the plaintiff has proven by preponderance of the evidence that the firm of Funk & Lackey did in fact receive and use the money of the plaintiff." And the court then gave the instruction, as modi- fied, to the jury. And the court made a like modification to three others of the instructions submitted by appellant, before giving them to the jury. But the court also gave to the jury, at the instance and upon the motion of appellant, two other instructions, which read as follows: " (1) The court instructs the jury that if the plaintiff has failed to prove by a preponderance of the evidence that Funk & Lackey received mone}^, and if the jury further believe from the evidence that the money was loaned to Ira Lackey personally, then in such case the jury should find a verdict for the defendant Funk. And that should be the verdict of the jury, although it may appear from the evidence that Jra Lackey, at each of the times of making the several loans, as security there- for, gave to the plaintiff a note signed * Funk & Lackey.'" " (8) The court instructs the jury that, before the plaintiff can recover in the case, he must prove by preponderance of the evi- dence either one or both of the following: First, that the firm of Funk & Lackey actually received his money ; second, that he actually loaned it in good faith to the firm of Funk & Lacke}', and in good faith to receive their note therefor, — the law being that if the money was not received by the firm, and the money was loaned to Ira Lackey personally, then tlie plaintiff cannot recover, although at the time of making such loans the plaintiff, as security for his loans, took from Ira Lackey a note or notes signed by Funk & Lackey." The modifications made by the court to instructions 4, 2, 5, and 7 did not correctly state the law. One partner has power to borrow money for ^partnership purposes, and give the notes of the firm therefor. Walsh V. Lenuon, 98 111. 27. But he cannot bind the firm of which he is a member by giving the firm note in satisfaction of, or as security for, his personal indebtedness. Wittram v. Van Wormer, 44 111. 525; Wright v. Brosseau, 73 111. 38L And in Watt V. Kirb}^ 15 111. 200, this court said that where the credit is originally given to one partner the creditor cannot hold the other partners liable, although they may receive the benefit of the transaction ; that the debt, being separate in its inception, does 44 CH. II.] PARTS OF BILLS AND NOTES. ILL. CAS. not become joint by the subsequent application of the funds to the purposes of the partnership. We think, however, that, although the modification made by the court misstated the law, yet that it did not constitute reversible error. This court has decided in numerous cases that a party cannot assign for error a ruling made at liis own instance, and has no right to complain of an error in an instruction when like error appears in an in- struction given at his request. Coal Co. v. Haenni, 146 111. 614; 35 N. E. 162, and cases there cited. Here it was not at the instance of appellee (hat an unsound proposition of law was incor- porated in the instructions, but it was on the motion of appellant himself that it was brought into the case. That which the court thereafter did of its own motion was simply to harmonize the instructions tendered by appellant. Appellant makes quite a plausible argument for the purpose of showing that the language in tlie instructions given at his instance, i. e., " that the firm of Funk & Lackey actually received the mone}'," and " that Funk & Lackey received the monc}'," have reference only to the orig- inal reception of the money from Babbitt at the time of the loans ; whereas the language of the modifications made by the court, i. e., " that the firm of Funk & Lackey did in fact receive and use the money," are broader, and include, not only the case of an original reception of the money by the firm from Babbitt, but also the case of a receiving by the firm from Lackey subsequent to an original reception of the same from Babbitt by Lacke}', acting in his individual capacity, and not as agent of the firm. The state of the case was this : The testimony introduced by appellee tended to prove, among other things, that the mone}' borrowed from Babbitt, althougli not entered on the firm l)ooks, was actually used for firm purposes, — in paying firm indebted- ness, etc., — while the testimony introduced by appellant tended to prove, inter alia, that the borrowed money could not be traced on the books, or to any use for firm purposes, and that it was appropriated to the personal and individual use of Lackey. It is to be noted that the instructions proffered by appellant did not use any such expressions as " actually received the monej' in the first instance," or "original reception of the money from Babbitt," or "subsequent reception of the money by the firm from Lackey." They simply called the attention of the jury to this question, — whether or not there had been an actual recep- tion of the money by the firm, — and left it wholly a matter of indifference whether such receiving of the money by the firm was from Babbitt, and at the time of tiie loans, or subsequent to the original loans, and from Lackej'. The office of an instruction is to give knowledge and information to the jur}-, for immediate application to the subject-matter before them. The test, then, is, not what the ingenuity of counsel can, at leisure, work out the instructions to mean, but how and in wliat sense, under the evidence before them, and tlie circumstances of the trial, would ordinary men and jurors understand the instructions. We think 45 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. that in the light of the testimony above referred to the jury, when they were told in the instructions given at the request of appel- lant that they should pass upon the questions ' ' whether the firm of Funk & Lackey actually received the money," and whether ' ' Funk & Lackey received the money, ' ' — their attention not beiug called to either the inquiry as to when it was received, whether at the time of the loan or thereafter, or to the inquiry whether it was received from Babbitt or from Lackey, — would understand that it was immaterial from whom, or at what time, the money was received, provided only that the result was that the firm got tlie money and the benefit thereof. We find no error in the record for which tlie judgment should be reversed. The judgment of the appellate court is affirmed. Affirmed. Fictitious Payee — Effect on Rights of Holder. Armstrong v. Pomeroy Nat. Bank, 4G Ohio St. 612 (22 N. E. 8C6). MiNSHALL, C. J. The original action was a suit by Kate S. D. Armstrong against the Pomeroy National Bank, to recover of the bank the sum of $450, due her upon a deposit she had made with the bank. She averred that she had given a check, payable to one William Brown or order, that had been procured from her by the fraudulent practices of one Grimes, who represented him- self as acting for the said Brown in the negotiation of a note ; that there was no such person as Brown, and that the note was fraudulent, of all which she was ignorant at the time ; that Grimes afterwards indorsed the check ''William Brown," and, adding his own indorsement, presented it to the bank, who paid it. The principal ground of defense was that plaintiff was negligent in delivering the check to Grimes, and that it used ordinary care in paying it to Grimes, indorsed as it was. The case was tried to the court, who, upon the request of the parties, found its conclu- sions of law and fact separately, as follows : — " FINDINGS OF FACTS. " (1) That the defendant is a banking corporation, organized under the laws of the United States. (2) That on August 31, A. D. 1882, plaintiff had on deposit with defendant, subject to be drawn out by her check, a sum of money greater than the amount of the check hereinafter to be described. (3) That on said 31st day of August, A. D. 1882, one J, S. Grimes, by a fraud practiced upon plaintiff, by negotiating to her, as the pre- tended agent of one William Brown, a fictitious person, a forged promissory note negotiable in form, induced her to draw and de- liver to him, as pretended agent of said Brown, the following check: ' Pomeroy, O., August 31, 1882. Pomeroy National Bank, pay to William Brown or order, four hundred and fifty dollars ($450). [Signed] K. S. D. Armstrong."^ (4) That there was no such person as the above-named William Brown ; 46 CH, II.] TARTS OF BILLS AND NOTES. ILL. CAS. that plaintiff supposed (at tlie time) there was, and believed she delivered the check to said Brown, through his agent, said Grimes. (5) That she was not careless or negligent respecting the transaction, but, instead, was ordinarily careful and prudent in respect thereof. (6) That said Grimes on the same day (August 31, 1882), wrote the name 'William Brown' across the back of said check, and presented it to defendant for pay- ment; that defendant having no knowledge respecting the way Grimes had obtained it, or that the name ' William Brown ' was the name of a fictitious person, paid the same, and charged the amount thereof against the account of the plaintiff. (7) That defendant in paying the check to Grimes made the usual inquiries respecting his identity, and in other respects was ordinarily care- ful and prudent in relation to the transaction. (8) That plain- tiff before the commencement of this action demanded of defend- ant the payment of said sum by it paid to said Grimes, which defendant then refused, and has not, either before or since said demand, paid the same, or any part thereof. ' ' CONCLUSION OF LAW. " That the payment of the check by defendant to said Grimes was not (by the fncts above found) authorized by said plaintiff, and could not legally be made a charge against her in the account between her and the defendant respecting the money she had on deposit with it, and that the amount named in the check, together with interest thereon at the rate of six per cent from the day she made the demand above found to have been made, for its pay- ment to her, is due and payable from defendant to her." A motion for a new trial having been made and overruled, judgment was entered for the plaintiff upon the findings. The judgment of the common pleas was reversed on error by the cir- cuit court, and this proceeding is prosecuted to obtain a reversal of the circuit court, and an affirmance of the common pleas. Th's case is, in its general features, analogous to that of Dodge V. Bank, 20 Ohio St. 234, and should, as we think, be ruled by it. There a paymaster of the United States, who kept his account at the bank, drew his check on the ]>ank inpayment of an indebt- edness of the United States to Frederick B. Dodge, and delivered it to the person who presented the certificate, he representing himself to be Dodge. This representation Was false, and the person making it was a thief. Being a stranger to the paymaster, he at first refused to pay the claim to him, but on his assuring him that he could identify himself at the bank, the paymaster drew the check, payable to Dodge or order, and delivered it to the person j^resenling the certificate. The amount of the check was paid him by the bank on his representing himself to be Dodge, and indorsing the check in that name. The bank had no knowledge of what had transpired jirior to the presentation of the check for payment, and siip[)Osed it was paying it to the right person. In deciding the case, the court laid down the following 47 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. principles: (1) The duty of a banker is to pay the checks and bills of his customer, drawn payable to order, to the person who becomes holder by a genuine indorsement ; and he cannot charge him with payments made otherwise, unless the circumstances amount to a direction from the customer to the banker to pay the paper without reference to the genuineness of the indorsements, or are equivalent to a subsequent admission that the indorsement is genuine, in reliance on which the banker is induced to alter his position. (2) When thei-e is no fraud, or special understanding between the banker and the customer, the liability of the banker for paying a check upon a forged indoi'seraent cannot be affected by conduct of the customer in drawing the check, of which the banker had no notice. The case was again brought to this court upon a question of evidence, and was assigned to and disposed of by the first commission, which, after a full and careful re-exam- ination, approved and followed the former decision ; and the principles announced in the case, after such careful considera- tion, must determine this one. By the fraud of one Grimes the plaintiff was induced to pur- chase a note that had no real existence as a security. She is found by the court to have been ordinarily careful and prudent in the transaction, but was deceived. She supposed that she was purchasing a valid security belonging to a man, as represented by Grimes, by the name of William Brown, and for whom, as he represented, he was acting as agent, and gave to the assumed agent for Brown a check for the amount, payable to Brown or his order. Now it is evident both upon reason and the authority of the previous decisions, that the circumstances under which the plaintiff was induced to give the check, even though calculated to arouse suspicion on her part, cannot modify the duty required of the bank in the matter of paying or not paying the check. It is not claimed that the bank had any knowledge of how or under what circumstances Grimes had obtained the check, and there is no finding of any such course of dealing between the bank and the plaintiff as would have authorized it to depart from the general duty of a bank in paying the checks of its customers drawn payable to a certain person or order. It was its duty to pay to the person named or his order, and to withhold payment until it was satisfied, both as to the identity of the payee and the genuineness of his signature. Morse Bank., §474; Robarts v. Tucker, 16 Q. B. 560, per Maule, J., at p. 578. It is found that the bank made the usual inquiries respecting the identity of Grimes, and in other respects was ordinarily careful and prudent in relation to the transaction ; but this must be taken in connec- tion with the further fact that Grimes was not the payee of the check, and that his indorsement, without the genuine indorsement of the payee, could confer no title upon the holder of the check, or any interest in it» as against the drawer. "There is no doubt," says Lord Kenyon in Tatlock v. Harris, 3 Terra. R. 181, " but that the indorsee of a bill of exchange, payable to order, 48 CH. II.] PARTS OF BILLS AND NOTES. ILL. CAS.. must, in deriving his title, prove the handwriting of the first indorser." See Mead v. Young, 4 Term R. 28, 30; 2 Pars. Notes & B. 595. Tiie indorsement on the check, puri)orting to be that of the pa^ee. Brown, had been placed tiiere by Grimes, and was either a forgery or a fraud, and, for the purposes of this case, it is not material which it is termed. As to it the bank acted upon the representations of Grimes, and did not otherwise know whether it was genuine or not. As said in Dodge v. Bank, 30 Ohio St. 1 : " The rightful possession of a check by no means carries with it or implies a right to demand or receive payment of it, without the genuine indorsement of the person to whose order it is made payable ; " and if a banker accept or undertake to pay a check, " he must see to it, at his peril, that he pays according to the terms of the order, and to the party named therein, or to one holding it under the genuine indorsement of such payee. * * * And this is true whether the defendant exer- cised the degree of caution which bankers usually do in such cases or not. The question is, was the check paid to the party to whom, by its terms, it was made payable .'* " Therefore the court rightly concluded, as a question of law from the facts found, that the payment of the check by the defendant was not authorized by the plaintiff, and that it could not rightfully be charged to her account. The fact that the check was made payable to a person who had no existence does not alter the rights of the plaintiff as against the bank, for she supposed that Brown was a real person, and intended that payment should be made tosucli person. The doc- trine that treats a check or bill made payable to a fictitious per- son as one made payable to bearer, and so negotiable without indorsement, applies only where it is so drawn with the knowledge of the parties. Tatlock v. Harris, 3 Term K. 174, 180; Vere -y, Lewis, Id. 182; Minet v. Gibson, Id. 481; same case in the house of lords on error, Gibson v. Minet, 1 H. Bl. 569 ; CoUis V. Emett, Id. 313; Gibson v. Hunter, 2 H. Bl. 187, The doc- trine that a bill payable to a fictitious person or order is equiva- lent to one payable to bearer had its origin in these cases, which all grew out of bills drawn by Levisay & Co., bankrupts, payable to a fictitious person or order, and were accepted by Gibson & Co. ; but it will be noticed that the holding in each case was upon the express ground that the acceptor knew at the time of his acceptance that the bill was payable to a fictitious person, and but for this fact the fictitious indorsement would have been held to be a forgery, — some of the judges expressing a doubt whether it was not so, although its character was known to the acceptor. 3 Term R. 181. These cases will be found reviewed in a note to Bennett v. Farnell, 1 Camp. 130, It was held in this case that a bill made payable to a fictitious person or order is neither payable to the order of the drawer or bearer, but is completely void. But in an addendum to the case, at i)age 180c of the Report, Lord EUeuborough observes that this holding must be taken with 4 49 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. 11. this qualification: "Unless it can be shown that the circum- stance of the payee being a fictitious person was known to the acceptor." The rule is stated with this qualification in Byles on Bills, 82. See, also, to the same effect, Forbes v. Espy, 21 Ohio St. 483; 1 Rand. Com. Paper, §§ 162-164; 2 Pars. Notes & B. 591, and note a. Mr. Daniels, in his work on Negotiable Instru- ments (section 139), states the rule to be general, but, as shown by Mr. Randolph, the cases do not bear out the text. 1 Rand. Com. Paper, § 164, note 4. And upon principle we do not see how the law could be held to. be otherwise. For if the fictitious character of the payee is unknown to the drawer, whoever indorses the paper in that name with intent to defraud perpetrates a for- gery, and the indorsement is void ; a general intent to defraud being sulficieiit to constitute the offense. The case of Lane v. Krekle, 22 Iowa, 399, is not in point, for there the note was made payable to a fictitious person " or bearer," and passed by delivery without indorsement. The case of Phillips V. Thurn, 114 E. C. L. 694, cited by the learned judge, is clearly distinguishable from the case before us. There the signature of the drawer as well as the indorsement was a forgery ; but the defendant, the acceptor, was held liable because the plain- tiff discounted the paper, relying in good faiih upon the accept- ance of the defendant. The case was finally disposed of on a case stated, reported in L. R. 1 C. P. 463. The ground of the decision appears from the following observations of Keating, J. (page 472) : " I think, upon the facts stated in this special case, that it was not competent to the defendant to deny the genuine- ness of this bill. He knew that the plaintiffs were willing to advance money upon the bill only upon his vouching by his acceptance of it the authenticity of the drawing. His acceptance amounted to a representation to the plaintiffs which enabled the person representing Plana to obtain money from the plaintiffs on the bill." The decision in this case simply followed a well-recog- nized principle in the law of notes and bills. It is thus stated by Mr. Smith: " If the drawer's signature be forged, the drawee, if he accepts the bill, is bound to pay it, provided it be in the hands of a holder bona fide and for value, for the drawee's acceptance admits the drawer's handwriting to l)e genuine." Smith Merc. Law, 151. Now, Mrs. Armstrong can in no way be said to have afHrmed by any act of hers that the indorsement upon the check was genuine, for there was no indorsement on it when it left her hands. The case of Rogers v. Ware, 2 Neb. 29, cited by counsel for defendant in error, does not support his contention. The case of Ort v. Fowler, 31 Kan. 478, 2 Pac. Rep. 580, was rested upon a number of grounds ; and, in so far as it may have been on the ground that a note made payable to a fictitious person or order is in effect payable to bearer, irrespective of the knowledge of the maker, it simply follows the authority of 1 Daniels Neg. Inst., § 139, which, we have shown, is not borne out by the cases relied on. 50 ClI. II.] PARTS OF BILLS AND NOTES. ILL. CAS. If the drawer of a check, acting in good faith, makes it payable to a certain person or order, sujjposing there is such person, when in fact there is none, no good reason can l)e perceived why the banker should be excused if he pay the check to a fraudulent holder upon any less precautions than if it had been made pay- able to a leal person ; in other words, why he should not be required to use the same precautions in the one case as in the other, — that is, determine whether the indorsement is a genuine one or not. The fact that the payee is a non-existing person does not increase the liabiliiy of the bank to be deceived by the indorsement. The fact is that an ordinarily prudent banker would be less liable to be deceived into a mistaken payment by a fictitious indorsement such as this was than by a simple forgery. The determination of the character of any indorsement involves the ascertainment of two things: (1) The identity of the indorser ; and (2) the genuineness of his signature ; and no careful banker woukl pay upon the faith of the genuineness of any name until he had fully satisQed himself both as to the identity of the person and the genuineness of his signature. Now, a careful bj nker may be deceived as to the signature of a person with whose identity he may be familiar ; but he is less liable to be deceived when both the signature and the person whose signature it purports to be are unknown to him. In making the inquiry required in such case to warrant him in acting, he will either learn that tliere is no such person, or that no credible information can be obtained as to his existence, which, with an ordinarily prudent banker, would be the same as actual knowledge that there is no such person, and he would withhold payment, as he would have the right to do in such case. -But still, if he should be deceived as to the existence of the person, he would, nevertheless, require to be satisfied as to the genuineness of the signature. Of this, however, he could not be through his skill in such matters, and on which bankers ordinarily rely, for he would be without any standard of comparison, and he could have no knowledge of the handwriting of the supposed person, for there is no such person. So that if he acts at all it must be upon the confidence he may place in the knowledge of some other ])erson, and if he choose to act u[)on this, and make, instead of witliholding, payment, he acts at his peril, and must sustain whatever loss may ensue. It is a saying, frequently repeated in " The Doctor and Student," that " he who loveth peril shall perish in it." In other words, where a person has a safe way, and abandons it for one of uncertainty, he can l>lame no one but himself if he meets with misfortune. Judgment of the circuit court reversed, and that of the common pleas affirmed. 51 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. What is a Sufficient Signature. Brown v. The Butchers' aud Drovers' Bank, G Hill, 443. 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 in- dorsement 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 handwriting, and that he meant they should bind him as indorser, though it also appeared he could write. Tiie court below chai-ged 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 him- self as indorser, he was liable. Exception. The jury found a ■verdict for the plaintiffs below, on which judgment was rendered, and Brown thereupon brought error. Nelson, C. J. It has been expressly decided that an indorse- ment written in pencil is sufficient. Geary v. Physic, 5 Barn. & Cress. 234. And also that it may be made by a mark. George v. Surrey, 1 Mood & Malk. 516. In a recent case in the K. B. 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 differ- ence. Baker v. Dening, 8 Adol. & Ellis, 94 ; and see Harrison v. Harrison, 8 Ves. 186; Addy v. Grix, lb. 504. 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 himself. Judgment affirmed. Effect of Blank in Statement of Amount of Money in Body of Instrument. Witty V. Michigan Mut. L. Ins. Co., 123 Ind. 411 (24 N. E. 141). Berkshire, J. This is an action brought by the appellee against the appellant on the following writing: "$147.70. Indianapolis, Ind., Nov. 28th, 1883. Four months after date I promise to pay to the order of the Michigan Mutual Life Insur- nnce Company dollars, and five per cent, attorney's fees tiiereon per annum from date until paid, value received, without relief from valuation or appraisement laws of the State of Indiana. The indorsers jointly and severally waive presentment for payment, protest and notice of protest, and non-payment of this note, and expressly agree, jointly and severally, that the holder may renew or extend the time of payment hereof from time to time, and receive interest, in advance or otherwise, from either of the makers or indorsers for any extension so made, without releasing them hereon. Negotiable and payable at , 52 CH. II. j PARTS OF BILLS AND NOTES. ILL. CAS. J. B. Wittey. Nov. 28th— 31— 84. Indiana." The appellee in its complaint did not ask for a reformation of the instrument, but relied on it as a promissory note complete in itself. The appel- lant answered by the general denial only. The cause was sub- mitted to the court at special term, and a finding made for the appellee. The appellant filed a motion for a new trial, which the court overruled, and he excepted. An appeal was taken to gen- eral term, and upon the errors assigned the judgment at special term was affirmed, and from the judgment in general term this appeal is prosecuted. There is but one question presented for our consideration : Is the written instrument, as it appears in the record, an enforceable obhgation ? We are of the opinion that it is ; if not so, other- wise, by virtue of section 5501, Rev. St. 1881, and is negotiable by indorsement. It is signed by the appellant, and, when taken as an entirety, we think it contains a promise to pay $147.70, together with 5 per cent, attorney's fees. By the very terms of the instrument the appellant obligates himself to pay to the ap- pellee "dollars," and it is expressly recited that the promise rests upon a valuable consideration. No one can read the writ- ing without at once coming to the conclusion that the appellant intended to obligate himself to the appellee for the payment of some definite amount of money, and that the appellee understood that it was receiving such an obligation. Though there may be some formnl imperfections in the written obligation or contract which parties have entered into, if it contains matter sufficient to enable the court to ascertain the terms and conditions of the obligation or contract to which the parties intended to bind them- selves, it is sufficient. In the language of Lord Campbell in Warrington v. Early, 2 El. & Bl. 763: " The contract must be collected from the four corner.^ of the document, and no part of what appears there is to be excluded." We can imagine no good reason why the marginal figures upon the writing in question should be disregarded. We know, as a part of the commercial history of the country, that the universal practice has been, for a period so long that the memory of man runneth not to the con- trary, to represent by superscription in figures upon all obliga- tions for the payment of money the amount or sum which is writ^ten in the body of the instrument. The superscription is always intended to represent the amount found in the body of the instrument, and not a different amount. If, therefore, an obliga- tion is found where there is a promise to pay " dollars," but the number of dollars in the body of the instrument is blank, and tlic margin of the instrument is found to contain a superscription which states a number of dollars, wh}-, in view of tiie usage or custom which has so long i)revailed, should the body of the instriimout not be aided by the superscription ? We think in such a case tlie figures found in the margin should be taken as the amount which the obligor intended to obligate himself to pay, and the obligation enforced accordingly. 53 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. We do not think in such a case that the courts would be justi- fied in disregarding the evident intention of the parties, as indicated by the superscription upon the paper, and in holding the instrument void for uncertainty, or on the ground that it is not a perfect writing ; and especially are we of the opinion stated in view of the liberal statute which we have on the subject of promis- sory notes and other written obligations, and their negotiation. Section 5501, supra. In the case under consideration, the action is between the origmal parties to the instrument, and upon it in the form and condition in which it was executed ; and therefore we do not think it would be profitable to consider questions which might arise where the obligation is made payable at a bank, the blank number of dollars afterwards filled in by the payee, and in- dorsed by him to an innocent holder for value before maturity. As to whether the writing would be a negotiable instrument in its present condition but for our statute, we find some conflict of authority. We cite the following authorities for and against the proposition. For: Ives ?;. Bank, 2 Allen, 236; Sweetser v. French, 13 Mete. 262; Petty r. Fleishel, 31 Tex. 169; Corgan -y. Frew, 39 111. 31; Williamson v. Smith, 1 Cold. 1. Against: Bankv. Hyde, 13 Conn. 279; Edw. Bills, 168; Hollen v. Davis, 59 Iowa, 444 ; 13 N. W. Rep. 413 ; 44 Amer. Rep. 688, with note. We find no error in the record. Ju'lgment affirmed, with costs. Unconditional Written Promise or Order to Pay a Cer- tain Sum of Money. Hasbrook v. Palmer (Circuit Court of the United States, 1839), 2 Mc- Lean, 10. Opinion of the Codrt. This action is brought by the plain- tiffs as assignees on a promissory note, payable at New York, in New York funds or their equivalent. The defendants demur specially, and for cause of demurrer state that it is not averred in said declaration of what value the said New York funds or their equivalent in the declaration were at the time and place of pay- ment, and that said note is not negotiable. The Michigan statute in regard to the negotiability of promis- sory notes is similar to the Statute of Anne, which has been gen- erally adopted in this countrj'. And the principal question under this demurrer is, whether the note on which this action is brought, being payable in New York funds or their equivalent, is nego- tiable. The plaintiffs rely on the decision in the case of Keith v. Jones, 9 John. Rep. 120, where it was held that a note payable to A., or bearer, in "New York State bills or specie," was negotiable within the statute, upon the ground that the bills mentioned meant bank paper, whicli, in conformity with general usage and understar.ding, are regarded as cash; and, tlierefore, that the meaning was the same as if payable in lawful current money of 54 CH. II.] PARTS OF BILLS AND NOTES. ILL. CAS. the State. And also on the case of Jiulah v. Harris, 19 John. Rep. 144, where it was decided that a promissory note, payable at a particular place, in the banknotes current in the city of New York, was negotiable within the statute. And it is insisted that the promise to pay in New York funds, or their equivalent, is equivalent to an undertaking to pay in law- ful current money of the State of New York. 'J'hatit is generally understood that New York funds means specie, or a currency equal to specie, and that the drawer of the note promises, sub- stantially, to pay in current New York money. In support of the demurrer it is contended that to be negotiable a note must be for the payment of money only, and this is laid down in Chitty on Bills (ed. 1839), 152. He says it is the first and principal requisite, and is established by foreign as well as English law, that a bill or note must be for the payment of money only. That it cannot be for the delivery or payment of mer- chandise, or other things in their nature susceptible of deteriora- tion and loss and variation in value ; nor can it be for payment in good East India bonds or for the payment of money by a bill or note. Clarke v. Percival, 2 Bar. & Adol. 660 ; Bui. N. P. 272. A promissory note not payable in cash or specific articles is not negotiable. Matthews v. Haughtou, 2 Fairf. 377 ; Johusou V. Laird, 3 Blackf. Rep. 153. A note pa3'able to A. B., or order, in good merchantable whisky, at trade price, cannot be sued by an assignee or bearer in his own name. Rhodes v. Lindley, Ohio Rep. condensed, 465. A note for a certain sum, payable to A. or order, " in foreign bills" (meaning thereby bills of country banks), has been held not to be a good promissory note within the statute, and conse- quently not negotiable. Jones v. Sales, 4 Mass. Rep. 245. In the case of Lieber and Colsiu v. Goodrich, 5 Cowen Rep. 186, the court held a note payable in Pennsylvania or New York paper currency is not a promissory note for the payment of money within the statute. And in the case of McCoriuick v. Trotter, 10 Serg. & Raw. Rep. 94, the court decided that a promissory note payable to A. B., or order, for five hundred dollars, in notes of the char- tered banks in Pennsylvania, was not a negotiable note on which the indorsee can sue in his own name. In South Carolina it has been decided that paper medium is not money ; and that, therefore, a note pa3'able in paper medium is not assignable within the Statute of Anne and their Act; and on a verdict for the assignee of such a note judgment was arrested : Larger. Kohne, 1 McCord, 115; IMcElarin v. Nesbit, 2 Nott & McCordRep. 619. The cases cited in the 9th and 19th of John. Rep. seem not to be sustained by the current of decisions in this country and in England ; and it is diUicult to distinguish those cases from the decisions cited so as to maintain their consistency. If this, indeed, were practicable, it is not necessary to the decision of the question raised by this demurrer. 55 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. 11. What is imderstood in this State by New York funds or their equivalent, may be a matter of doubt ; nor does it seem to be of a nature which can be resolved by evidence, so far as regards the question under consideration. The term New York funds, it is presumed, may embrace stocks, bank notes, specie, and every description of currency which is used in commercial transactions. But whether is meant the funds of the State generally or of the city of New York is not clear. The presumption is in favor of the latter, but this is by no means certain. In this respect, as well as what constitutes New York funds, the face of the note is indefinite. It is, indeed, susceptible of different interpretations, and for this reason it cannot be con- sidered a negotiable instrument within the statute. It is not a note, in the language of the decisions, payable in money. It is pa3'able in New York funds or their equivalent. Now what is equivalent to New York funds? The answer is their value, their value in specie or in current paper which passes at a discount. Might not the drawer pay this note in this descrip- tion of paper, making up the discount? Would not this, in the language of the contract, be equivalent to New York funds? It would be equivalent if of equal value. The demurrer must be sustained. Stipulation for Attorney's Fee does not Destroy Negotiiibility. Dorsey v. Wolff, 142 111. 589 (32 N. E. 495). Magruder, J. This is an action of assu)npsit begun in the circuit court of Macoupin county on May 16, 1889, by Marcus A. Wolff against the appellant, Dorsey, to recover, as attorney's fees, the sum of 10 per cent upon the amount found to be due upon the pi'omissory notes hereinafter meniioned, in a suit there- tofore brought upon said notes. The defendant demurred to the declaration. The demurrer was overruled. The defendant ex- cepted to the order overruling the demurrer, and elected to stand by his demurrer. Thereupon plaintiff's damages were assessed at $1,619, and judgment was rendered in his favor for that amount. The judgment has been affirmed by the appellate court, from which latter court the case is brought here by appeal. The declaration sets up three notes, executed by the defendant, William M. Dorsey, dated December 31, 1885, payable to the order of George W. Belt, at the banking house of Belt Bros. & Co., in Bunker Hill, III., — the first for §13,586 84, on or before two years after date; the second for $543.47, on or before eighteen months after date ; and the third for $543.47, on or before two years after date, — each of which notes, after the maker promises for value received to pay the amount therein named to the order of said Belt, contains the following words: " With eight per cent interest per annum after maturity, and, if not paid when 56 CH. II.] PARTS OF BILLS AND NOTES. ILL. CAS. due and suit is brought thereou, tiien we promise o pay ten per ceut on the amount due hereon in addition as an attorney's fee, and to be recovered as part of this note, or by separate suit." By the terms of each note, also, the makers and indorsees waive presentment for payment, protest, and notice, etc. The declara- tion then avers that Dorsey delivered said notes to Belt, and Belt indorsed the same to plaintiff, etc. ; that said notes were not paid when due ; that suit was brought thereou ; that the said 10 per cent was not [)aid before or after said suit was l)rought, and was not recovered in said suit so brought upon said notes as a part thereof, etc. One of the counts, in addition to the foregoing averments, alleges that, after the maturity of the notes, they were placed in the hands of an attorney for suit ; that suit was brought thereon, and, the 10 per cent attorney's fee not having been re- covered therein, the plaintiff, before the bringing of the present suit, paid his attorney for his services in said former suit the said sum of §1,619.20. The main question presented by the assignments of error is whether or not the notes described in the declaration are negoti- able instruments. It is claimed by the a[)pellant that the notes are made non-negotialjle by the insertion therein of the written promise of the maker that, if they were not paid when due and suit was ])rought thereon, he would pay 10 per cent on the amount due thereon in addition, as an attorney's fee, and to be recovered as a part of the notes, or by separate suit ; that the in- dorsements b\' the payee did not confer the right upon the indor- see to bring suit in his own name upon the notes ; that, even if such indorsements §hould be held to have conferred upon the assignee the right to bring suit upon the notes in his own name, it did not confer upon such assignee the riglit to bring a separate suit upon the stipulations or promises as to the attorney's fees. Various definitions have been given of a " promissory note." In general terms, it may be defined to be a written promise by one person to pay to another person therein named or order a fixed sum of money, at all events, and at a time specified therein, or at a time winch must ceriainly arrive. Lowe v. Bliss, 24 111. 168; Chicago Ry. Equipment Co. v. Merchants' Bank, 136 U. S. 268 ; 10 Sup. Ct. Rep. 999 ; Story Prom. Notes, p. 2 ; 3 Kent Comm. 74: ; 2 Amer. & Eng. Enc. Law, p. 314. A note is none the less negotiable because it is made payable on or before a named date. Chicago R^'. Equipment Co. v. Merchants' Bank, supra; Cisne v. Cliidester, 85 111. 523 ; Ernst v. Steckman, 74 Pa. St. 13. An instrument 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, is not a note. Lpwe V. Bliss, supra. A note which provides for the payment, after the maturity tliereof, of a certain rate of interest per annum, not ex- ceeding the legal rate, is not made conditional by such provision. Houghton V. Francis, 29 111. 244; Reeves v. Stipp, 91 111. G09 ; Laird v. Warren, 92 111. 204. 57 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. Applying these definitions to the notes mentioned in the decla- ration in tliis case, we find that each note is " a note for a sura certain, payable at a fixed date." Dietrich v. Bayhi, 23 La. Ann. 767. The notes are not payable on a contingency, because the maker has the option of paying on or before a certain date ; nor are they conditional instruments because they contain the words, "with eight per cent interest per annum after maturity." The portion of each note which j)recedes the stipulation or promise as to the attorney's fee is in itself a complete promissor}' note. For example, the part of the first note that goes before the provision for the fee is as follows: " $13,586.84. Bunker Hill, Ills., Dec. 81st, 1885. On or before two years after date, for value received, we or either of us promise to pay to the order of George W. Belt, thirteen thousand five hundred eighty-six and 84-100 dollars, pay- able at the banking house of Belt Bros. & Co., in Bunker Hill, Illinois, with eight per cent intercut per annum after maturity," etc. " Here the svim, time of p lyment, and payee are certain, and these are the esseut'al characteristics of a promissory note." Houghton V. Francis, supra. The promise to pay the attorney's fee is a promise to do something after the note matures. It does not affect the character of the note before or up to the time of its maturity, either as to certainty in the amount to be paid, or fixed- ness in the date of payment, or dt-finiteness in the description of the person to whom the payment is to be made. The stipulation or promise as to the attorney's fee cannot, therefore, affect the negotiability of the note, because the negotiability of a promis- sory note is, for all practical purposes, at an end when it matures. Parties taking it after its maturity cannot claim to be innocent holders without notice c>f defenses which may be set up by the maker against its collection. If the stipulation for an attorney's fee is of such a character as to make the amount to be paid at maturity uncertain or indefinite, the note cannot be regarded as negotiable so as to authorize a suit upon it by the indorsee ; but, where the stipulation does not have such an effect, its insertion in the note does not destroy the negotiability of the note. When the amount to be paid at maturity is certain and fixed, the maker knows what he is to pay, and the holder knows what he is to receive, from the face of the note itself. Commercial paper is expected to be paid promp'ly when it is due. A stipulation for an attorney's fee, which is only to be recovered if the note is not paid when due and suit is brought upon it, can have no force except upon tlie maker's default. If he keeps his contract by pnying his note at its maturit}^, he will not be obliged to pay the additional amount; and no element of uncertainty enters into the contract. By the stipulation, the maker offers to the holder an assurance of his own confidence in his ab liiy to pay witlioutsuit, and thereby adds to the value of the pap r as promising less ex- pense in its collection. It has bet n said that " the additional agreement relates rather to the remedy upon the note, if a legal remedy be pursued, than to the sum which the maker is bound 58 CH. II.] PARTS OF BILLS AND NOTES. ILL. CAS. to pay ; and that it is not different in its character from a cogno- vit, which, when attached to promissory notes, does rot destroy liieir negotiabiht3\" Daniel Neg. Inst. (4th ed.), §§ 02, 62a. We do not think that the negotiability of the notes in this ease was destroyed by the stipulations therein as to attorneys' fees. The view here expressed is sustained by the authorilies. In Nickcrson v. Sheldon, 33 III. 372, the note contnined this pro- vision: "And we further agree, if the above note is not paid without suit, to pay ten dollars, in addition to tlie above, for attorneys' fees." In that case the plaintiff did not declare for the SlO, and hence the recovery was only for tlie principal and interest due on the note, but we held the note to be ni goliable uadtr the statute, and said: "The amount due by this note is absolutely certain, and it possesses all the requisites of a negoti- able instrument undrr the statute. Stewart r. Smith, 28 III. 397. There is no unci-rtainty us to the precise sum of money to be paid on the maturity of the note. Bane v. Gridh y, 67 111. 388 ; Gobble V. Linder, 76 111. 157; Barton v. Bank, 122 111. 352; 13 N. E. Rep. 503." In Stontman v. Pyle, 35 Ind. 103, the note contained a stipulation for the payment of attorne3's' fees should suit be instituted tiiereon, and it was said: " We see no reason, on principle or authority, or on grounds of public policy, for holding that such a stipulation destroys the commercial character of paper otherwi-e having that character. * * * So here the defendant had the right to pay the face of the note wh' n due, and avoid the attorneys' f.ns. As long as the note retained the peculiar characteristics of commercial paiier, viz., up to the t me of its maturitj' and dishonor, the amount t ) be paid on the one hand, and recovered on the other, was fixed and definite." Smock V. Ripley, 62 Ind. 81. In Gaar v. BankingCo., 11 Bush, 180, there was indorsed upon the back of an acce[)ted bill of exchange an agreement by the drawers, indorsers, and acceptors thereof " to i)ay a reasonalilo attorney's fee to any holder there- of if the same shall thereafter 1)0 sued upon, and also pay interest at the rate of ten p* r cent per auuutn after maturity until paid ;" and it was claimed that the written agreement so indorsed upon the bill destroyed its negotiability on the ground that the amount of the attorney's fee was not ascertuned, and hfucc that the bill was for an uncertain amount; but the court held otherwiso, and said : " The amount to be jiaid at maturity was fixed and c» rtain, and it was only in the event that the l)ill was not paid when due that any uncertainty arose. The reason that the rule that the amount to l)e paid must be fixed and ci rtain is that the pnjjer is to become a sul)stitute for money, and this it cannot be, unless it can be ascertained from it exactly how nuich money it rei)re- sents. As long, therefore, as it remains a snbstiiute for money, the amount which it entiths the holdt r to demand must be fixed and certain ; 1)ut when it is past due it ceases tu have that | eculiar quality denominated ' ucgotialiilit}^ ' or to perform the otiice of mone}' ; and hence anything which only renders its amount uncer- 59 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. ][I. taiu after it has ceased to be a substitute for money, but which in nowise affected it until after it had performed its office, can- not prevent it becoming negotiable paper." In Seaton v. Scovill, 18 Kan. 433, a note for the payment of a certain sum, " with interest at twelve i)er cent per annum after due until paid, also costs of collecting, including reasonable attorneys' fees if suit be instituted on this note," was held to be negotable; and iNIr. Justice Brewer, delivering the opinion of the court, quoted witli approval the above extract from the Kentucky case, and said: "The amount due at the maturity of the pa|)er is certain; and the only uncertaint}' is in the amount which shall be collectible in case the maker defaults, at the maturity of the paper, iu his promise to pay, and the holder is driven to the necessity of insti- tuting a suit for collection, and then only as to the expenses of such collection." In Sperry v. H 'rr, 32 Iowa, 184, each of the notes sued upon was for a certain sum, and contained the follow- ing words: " With ten per cent intere-t until paid; if not paid when due, and suit is brought ; thereon, I hereby agree to pay collection and attorneys' fees therefor; " and the court held tlusm to be negotiable, saying the attorneys' fees are not part of the sums due on the notes, but are an amount for which the maker may become liable when a legal remedy is enforced against him. Shugart v. Pattee, 37 Iowa, 422 ; Bank v. Breese, 39 Iowa, 640; Howenstein v. Barnes, 5 Dill. 482; Sclilesinger v. Arline, 31 Fed. Rep. 648 ; Sewing Mach. Co. v. Moreno, 6 Sawy. 35 ; 7 Fed. Rep. 806. Inasmuch as llie n te is negotiable, and |)asses by indorsement to the assignee, the agreement as to the attorney's fee also passes to such assignee as a part of the note. The stipulation or promise to pay the attorney's fee is not made with the payee alone. The note is payable to the payee or order. The promise is as much to the holder as to the original payee. The fee is to l)e paid if the note is not paid when due, whether it is then owned by tlie pa\ee or by any other holder. Moreover, the attorney's fee is an incident to the main debt and passes with it. Bunk v. Ellis, 2 Fed. Rep. 44; 2 Daniel Neg. Inst., § 62a; Adams v. Adding- ton, 16 Fed. Rtp. 89. The promise to pay it, thereby lessening the cost of collection in case of suit, gives the note currency as well as security, and is regarded as a provision for the indorsee or holder as well as for the payee. Bank v. Ellis, 6 Sawy. 96 ; 2 Fed. Rep. 44, Daniel, iu his work on Negotiable Instruments (volume 2, § 62o), says: " When the added stipulation is deemed valid, and the bill or note negotiable, such stipulation becomes a part of the acceptor's or indorser's contract, and need not be sued for by the attorney, but it is recoverable by the holder of the instrument." See cases cited in note 3. A further question arises as to the mode of enforcing the col- lection of the fee. It is said that it cannot be recovered in a sepa- rate suit if it is not embraced in the recovery on the note. Such seems to be the doctrine in Indiana. Smiley v. Meir, 47 Ind. 60 CH. II.] PARTS OF BILLS AND NOTES. ILL. CAS. 559. In a case in Iowa, also, where the note sued on contained a stipulation "to pay, in addition to the amount thereof, fifteen dollars attorneys' fees if the note is collected by suit," it was held not to be the intention of the parties that the fee should become due only after the note was collected by suit, but to be their intention that the fee should be recoverable with the amount of the note. Shugart v. Pattee, 37 Iowa, 422. In this State it has been held that the fee is not due when the suit is brought on the note, and therefore cannot be included in the assessment of damages. Nickerson v. Babcock, 29 111. 497 ; Easter v. Boyd, 79 ill. 325. In the two cases, however, in which this court so held, there was no express agreement in the note that the fee might be recovered in a separate suit. Nickerson v. Babcock, supra; Easter -y. Bo^nl, supra. In the case at bar, the promise is "to pay ten per cent on the amount due hereon in addition as an attorney's fee, and to be recovered as a part of this note or by separate suit." Whether or not a stipulation to pay the fee to be recovered as a part of the note, in case suit is brought on it for its non-payment when due, is so far a mere incident to the main debt that a separate suit cannot be brought for the fee after the termination of the suit on the note is a question which is not pre- sented by this record. We see no reason why the maker of the note may not stipulate that a separate suit may be brought for the fee, and why such stipulation cannot be enforced by the payee or the bolder. If the written promise to pay the fee passes to the holder by the indorsement, the written agreement as to the mode of ricovery also passes. The fact that tlie engagement to pay a fee is incidental and auxiliary to the main engagement to pay the debt does not prevent the maker of the note from agreeing to sub- mit to a separate suit for the recovery of the fee. We are there- fore of the opinion that the present suit is properly brought. It is further claimed that the agreement to pay the 10 per cent as a fee is usurious. The authorities above referred to hold to the contrary. Stoneman v. Pyle, supra; Sewing Mach. Co. v. Moreno, supra. See, also, 2 Pars. Notes & B., pp. 413,414; Clawsonv. Munson, 55 111. 394; Barton v. Bank, 122 111. 352; 13 N. E. Rep. 503. There is here no violation of the usury law, because the agi'eement " provides for new or additional compen- sation or interest for the use of the money because of the failure to pay at maturity. It is not in the nature of a contract for additional interest, but a [)rovision merely against loss or damage to the payee (or holder) si)ecjfically pointed out." Barton v. Bank, supra. There is nothing to show that 10 per cent on the amount due is an unreasonable fee. The defendant stood by his demurrer to the declaration, which described the notes, and the provision therein for a fee of 10 per cent. The declaration must therefore be regarded as alleging, in substance, that a reasonable attorney's fee was 10 per cent on the amount due on the notes. Smile}' V. Meir, supra. The judgment of the appellate court is afllrmed. 61 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II, Effect of Seal on Negotiability. Brown v. Jordhal, 32 Minn. 135 (1!) N. W. GoO). Plaintiff brought this action as holder of the following instru- ment, having brought it in good faith for value, in the usual course of business, before maturity, and without notice of any defense to it:— " ^120. Township of Manchester, Feb. 23, 1881. " Six months after date (or before, if made out of the sale of Drake's horse, hay, fork and hay-carrier) I promise to pay James B. Drake, or bearer, one hundred and twenty dollars. " Negotiable and payable at the Freeborn County Bank, Albert Lee, Minn., with ten per cent interest after maturity until paid. " OlE J. JOKDHAL. [seal] " Witness: J. Williamson." [seal] Plaintiff admitted on the trial that the note was obtained from defendant by fraud, and that as between the original parties it was "without consideration and fraudulent. The court thereupon directed a verdict for defendant; a new trial was denied, and defendant appealed. Gilfillan, C. J. The defendant executed an instrument in the form of a negotiable promissory note, except that after and oppo- site the signature were brackets, and between them the word "seal," thus "[Seal.]" The question in the case is, is this a negotiable promissory note, so as to be entitled to the peculiar privileges and immunities accorded to commercial paper? The rule that an instrument under seal, though otherwise in the form of a promissory note, is not (certainly when executed by a natural person, however it may be when executed by a corporation) a negotiable note, entitled to such privileges and immunities, is universally recognized, and is not disputed in this State. But the appellant contends that merely placing upon an instrument a scroll or device, such as the statute allows as a substitute for a common- law seal, without any recognition of it as a seal in the bod\' of the instrument, does not make it a sealed instrument. Undoubtedly where there is a scroll or device upon an instrument, there must be something upon the instrument to show that the scroll or device was intended for and used as a seal. The scroll or device does not necessarily, as does a common-law seal, establish its own character. Such words in the testimoniv.m clause as "witness my hand and seal," or " sealed with my seal," would establish that the scroll or device was used as a seal. No such reference iu the bod}^ of the instrument was necessary in the case of a common-law seal. Goddard'sCase, 2 Coke Rep. 5 a ; 7 Bac. Abr. (Bouvier's ed.) 244. Nor is there any reason to require it in the case of the statutory substitute, if the instrument anywhere shows clearly that tlie device was used as and intended for a seal. It would be difficult to conceive how the party could express that 62 CH. II.] ARTS OF BILLS AND NOTES. ILL. CAS. the device was intended for a seal more clearly than by the word " seal," placed within and made a part of it. This was an instru- ment under seal. Order alHrraed. Bill or Xote Delivered in Escrow — Right of Bona Fide Holder and Obligors. Riggs V. Trees, 120 Ind. 402 (22 N. E. 254). Elliott, C. J. The appellants were partners, doing business as real-estate brokers. Swain emplo3'ed them to sell his farm, and they did sell it to the appellee for §4,000. As part of the pur- chase price the appellee assumed and agreed to pay the princpal, but not the interest, of a mortgage executed to an insurance corn- puny to secure §1,800. A like amount was paid in cash, and a note for the remainder was executed by the appellee, and to secure its payment he executed a mortgage upon the land bought of Swain. The note was payable in bank, and was placed in the hands of the appellants. By the terms of the contract between the parties the note was to be held by the appellants until an ali- stract of title was furnished to tbe appellee, and all liens against the land paid and discharged. The note was not placed in the hands of the appellants for the purpose of passing the title to it, but for the purpose of delivering it to Swain, and closing the sale as soon as he had complied with his agreement and paid the liens on the land. The appellants, nothwithstanding their agreement to retain possession of the note and mortgage, delivered them, without the consent of the appellee, to Swain. Tlie note was trans- ferred by indorsement to a pors(ni for a valuable consideration, before maturity, and the indorsee received it without notice of any defense. At the time the contract of sale was made there were liens on the lands to the amount of §108 above the amount of the incumbrance assumed by the appellee. Swain is insolvent, and is not a resident of the State. The appellee could not have successfully defended against the note in the hands of the indorsee, for it was by his act that the appellants were etia1)k'd to put the notein circulation, and he must suffer rather than the innocent third person. The principle which rules here is the same as that which prevailed in Quick v. Milli- gan, 108 Ind. 419 ; t) N. E. Rep. 392. One who places in another's hands his promissory note, perfect in all its parts, cannot defeat the note in the hands of a honajhle holder. Tiie rule, indeed, in cases of promissory notes negotiable under the law-merchant, ex- tends much further, but we need do no more than apply the prin- ciple we have indicated as the governing one, although a much broader rule might be applied. The appellants violated their contract, and must respond in damages. It is no defense for iLem to assert that in law the delivery to them was absolute, and transferred title to Swain at once ; for, whatever may be the rule 63 ILL. CAS. PARTS OF BILLS AND NOTES. [CH. II. as between pa3'or and payee, it is quite clear tliat the appellants, having agreed to retain the note, were bound to keep their con- tract. The assumption that the appellants were the agents of Swain is unfounded, for they undertook to retain the notes under an agreement with the appellee, and not as Swain's agent. But if they had received the notes as the agents of Swain they had no right to violate their agreement with the appellee. If Swain him- self had made such an agreement, and it was properly evidenced by writing, he would have no right to violate it. Judgment affirmed, with 10 per cent damages and costs. 64 CHAPTER III. AGREEMENTS CONTROLLING THE OPERATION OF BILLS AND NOTES. Section 29. Kinds of agreements. 30. "What memoranda will control. 31. Collateral agreements. 32. Agreements to renew. § 29. Kinds of agreements. — Agreements, which are intended to control the operation of bills and notes, are of two principal kinds, viz. ; memoranda on the face or back of the instruments, and collateral or independent agree- ments. The principal legal difference between the two kinds lies in the fact, that the memorandum when inscribed on the bil'l or note, will furnish actual or constructive notice of itself to all subsequent holders, and hence will control the operation or character of the instrument, into whose- soever hands it may fall.^ Whereas, collateral agreements can only control the operation of the instrument as to those parties to it, who have received actual notice of their existence. There can be no constructive notice of such an agreement, for nothing appears in the body of the bill or note. § 30. What memoranda will control. — Not every mem- orandum will be hold to bo a part of a bill or note ; only those which by their terms are evidently designed to, and actually d», affect their character, and control the oi)era- tion of the instrument. If the memorandum is of such content that it could only have been intended as an aid to the memory of the holder or maker, to identify the instrument itself, or its source and consideration ; or where the memo- 1 Perry v. Bigelow, 128 Mass. 129; Wait v. Pomeroy, 20 Mich. 425 f4 Am. Rep. 34.')); Ziramerraau v. Role, 75 Pa. St. 188; Farmers' Bank v. Ewing, 78 Ky. 2fil (19 Am. Re;). 231). n G5 § 30 AGREEMENTS CONTROLLING OPKUATION. [CH. III. randum is a direction to the holder's own agents what to do with it, it will not become an integral part of the bill or note, and can therefore not change or alter its character.^ Nor can the memorandum be treated as a part of the bill or note, where it is so ambiguous and repugnant to the other contents, that parol evidence is necessary to explain its im- port ; or where the agreement is repugnant to the assign- ment or transfer of the instrument. ^ But with these limitations, any memorandum, written in any part of the bill or note, will constitute a part of it, and control its opera- tion. Thus, memoranda have been held to be a part of a note or bill, which impose conditions precedent to the obli- gation to pay ,^ which stipulate a place of payment,* a waiver of presentment, notice and protest,^ or which provides that the note is given as security^ or stipulate time of pay- ment, even though it makes the time uncertain or condi- tional, and thus destroys the negotiability of the paper. ^ Memoranda may also control the note or bill, where they provide for payment in a particular kind of money or cur- rency.^ If the memorandum is made contemporaneously with the execution of the bill or note, it clearly becomes a constituent part of it ; and it is always presumed that a 1 Fitch V. Jones, 5 El. & B. 238; Benedict v. Cowden, 49 N. Y. 396 (10 Am. Rep. 382). ^ Way V. Batchelder, 129 Mass. 361 (repugnant as to time of payment) ; Leland v. Parriott, 35 Iowa, 454 (memorandum that note is not to be sold). 3 Henry v. Colraau, 5 Vt. 402; Gushing v. Fifleld, 70 Me. 50 (35 Am. Rep. 293) ; Wait v. Pomeroy, 20 Mich. 425 (4 Am. Rep. 395). 4 Tuckerman v. Hartwell, 3 Me. 147 (14 Am. Dec. 225); Woodworth V. Bk. of America, 19 John?. 391 (10 Am. Dec. 239). But see, contra, Am. Nat. Bank u. Bangs 42 Mo. 450 (97 Am. Dec. D49). 5 Farmers' Bank v. Ewiiig, 78 Ky. 264 (39 Am. Rtp. 231). 6 Nat. Security Bank v. McDonald, 127 Mass. 82; Cholmley v. Darley, 14M. &W. 344. '' Johnson v. Heagan, 23 Me. 329; Franklyn Sav. Bank v. Reed, 125 Mass. 365; Effluger v. Richards, 35 Miss. (6 Geo.) 540. ^ Jones V. Fales, 4 Mass. 245 ( " foreign bills") ; Fletcher v. Blodgett, 16 Vt. 26 (42 Am. Dec. 487) (payable in fulled cloth); Benedict r. Cow- den, 49 N. Y. 396; 10 Am. Rep. 382 (to ba paid from profits of machines when sold). 66 CH. III.] agrp:emexts contuollinc} operation. § 32 memoraiuluiii has been written on a bill or note before delivery.* Where the memorandum is added to the bill or note after its negotiation, with the consent of both parties, it will constitute a part of the instrument, controlling its operation ; but if it is added without the consent of all the parties, it will not be a part of the instrument ; and if it materially controls or changes the liability of the parties, it will be an alteration which will invalidate the bill or note.^ § 31. Collateral agreements. — If an agreement is en- tered into by the parties to a bill or note, collateral to it, contemporaneously with the execution and negotiation of the instrument, the collateral agreement must be in writ- ing in order to be valid, and control the operation of such bill or note ; in obedience to the general rule of evi- dence, which prohibits the admission of parol evidence to vary or control the provisions of a written instrument.^ Subsequent agreements, whose terms change those of bills and notes, already delivered, partake of the nature of novations ; and if they are based upon a sufficient con- sideration and are fully executed or performed, they are binding upon all parties who lake the note or bill with notice of the collator 1 1 agreement, although they may not have been reduced to writing.* § 32. Agreements to renew. — The most frequent col- lateral agreement in practice is the agreement for renewal of a note or bill. If it is contemporaneous, it must be in 1 Tuckerman v. Hartwell, 3 Me. 147 (U Am. Dec. 225) ; Henry v. Col- man, 5 Vt. 402; Effinger v. Richards, 35 Miss. ((> Geo.) 540; Makepeace v. Harvard College, 10 Pick. 2!)8. Bit s^e B ly v. Shrader, 50 Miss. 336, where it is held that the presumption is contra, where the memorandum is on the back, instead of on the face of the instrument. 2 See post, chapter on Forgeries and Alterations. 3 Fleming v. Gilbert, 3 Johns. 520; Noell v. Gaines, 68 Mo. 649; Bruce V. Carter, 72 N. Y. 610; Elliott v. D.ason, 64 Ga. 63; Polo Mfg. Co. v. Parr, 8 Neb. 379 (30 Am. Rep. 830); Dobbins v. Parker, 46 Iowa, 357; Mnz7,y V. Knight, 8 Kan. 450. * Dnv I'. Tuttle, 4 Mass. 414 (3 Am. Dec. 22(1); Allen v. Furbish, 4 Gray, 504 (64 Am. Dec. 87) ; Kelso v. Frye, 4 Bibb. 493. G7 III. CAS. AGREEMENTS CONTFJOLLING OPERATION. [CH. III. writing; if it is subsequent, it must be supported by an independent consideration.^ A contract for renewal is exhausted by one renewal ; ^ and it has been held that the agreement must state with certainty the time of extension, in order to bind all parties to the note or bill.^ ILLUSTRATIVE CASES. Coapstick v. Bosworth, 121 lud. 6 (22 N. E. 772). Jacobs V. Mitchell, 46 Ohio St. 601 (22 N. E. 768). Horuer v. Horner, 145 Pa. St. 258 (23 A. 441). Oral Agreement Affecting' Terms of Xote Inadmissible. Coapstick v. Bosworth, 121 Ind. 6 (22 N. E. 772). Berkshire, J. This was a suit upon a promissory note, which reads as follows: "$400. Sedalia, Ind., March 19th, 1884. One year after date, for vakie received, I promise to pay Mary A. Bosworth four hundred dolhu-s ; tliis note to be collected by her- self during her natural life. If not collected before her decease, it shall be void as to other parties. Washington W. Coapstick." Issue having been joined, the cnse was submitted to the court for trial, and a finding made fur the plaintiff. The appellant then filed a motion for a new trial, which the court overruled, and he saved an exception. The court then rendered judgment upon the finding for the amount due upon tlie note. Before entering upon the trial the appellant made a moti n for a continuance, which was overruled, and an exception jtroperly reserved. There are but two errors assigned: (1) The court erred in overruling the motion for a continuance. (2) The court erred in overruling the motion for a new trial. Both errors present the same question, — the competencj' of certain evidence which the appellant offered to introduce. The testimony offered by the appellant was, in substance, as follows : That at the date of the execution of the note the parties were tenants in common of a certain t: act of land, the appellan'-j holding title to three-fourths and the appellee to one-fourth thereof ; tliat at the date on which the note was executed, and contemporaneous therewith, it was agreed between the parties that the appellee should convey her one-fourth interest to the appellant, and that in consideration 1 L'rae Rock Bank v. Mallett, 34 Me. 547 (56 Am. Dec. 673); Central Bank v. Willard, 17 Pick. 150 (28 Am. Dec. 284) ; Franklin Sav. Bank v. Reed, 125 Mass. 365. 2 Innes v. Munro, 1 Exch. 473. 3 Krouskop V. Shoutz, 51 Wis. 204 (8 N. W. 241). 68 CII. III.] AGREEMENTS CONTROLLING OPEKATION. ILL. CAS. thereof he should pay her thereafter an annuity not to exceed $40, "which should be given her in goods, provisions, or money, from time to time, as she might need it during her natural life, but that in no event should such payment exceed $40 per annum ; that one Shields, a notar}'^ public, was called upon to write out and take said Mary's acknowledgment to the deed for her said interest in the land ; that at his suggestion the note sued on was drawn up and signed for the purpose of secunng the appellee in the pay- ment of said annuity, and for no other or different purpose ; that it was agreed and understood at the time of the execution of the note and deed that no part of said note was ever to be paid except in the manner aforesaid, and that it was not to be paid at all, even as an anuuit}', after the appellee's death ; that no other or different consideration was to be paid to the appellee for her interest in said land. It is well settled in this State that the true consideration may be shown for a promissory note or other obligation by parol evi- dence ; and if there was no consideration, or if the consideration has failed, parol evidence may be given to establish the fact. This rule of law is so well established that we do not feel called upon to cite authorities. If, therefore, the offered evidence had a tendency to show that the note was executed without consideration in whole or in part, or to establish a failure of consideration as to all or any part of the note, the court erred in its rulings complained of, and a now trial should be granted. But there is another rule which is equally well settled, — that parol evidence will not be received of a pre- vious or contemporaneous verbal understanding between the parties to vary the terms and conditions of a written contract or obligation. Stewart v. Babbs, ante, 770 (present term), and authorities cited. But we need not cite authorities in support of this well-established rule. If, therefore, the offered evidence did not go to the consideration, and its only tendency would have been to prove the existence of a contemporaneous verbal agree- ment inconsistent with the terms and conditions of the note, then the rulings of the court were right, and the judgment should be affirmed. It is evident that the conveyance was the consideration for the note. It is conceded by the offer that the note was executed to secure to the appellee the amount that was to be paid to her for the land. It is not claimed that the amount which the note rep- resents is not the price that was agreed on for the land, nor that it was not worth the amount which the note calls for. The note and conveyance constituted but one contract, and the contract which the parties finally made, and the same is not impeached by either fraud or mistake. Suppose this suit had not been com- menced, but the appellee had been willing to take $40 per year, as the appellant proposed to pay her, and suppose both are per- mitted to live for 20 years or more from the date at which the note was executed, at the end of 10 years the appellant would 69 ILL. CAS. AGREEMENTS CONTROLLING OPERATION. [CH. III. pay $400, the amount of the note. Could the appellee compel the appellant to continue to pay her the $40 per annum ? This will hardly be claimed. But if she could, upon what contract would her right rest.^ Not upon the written contract which the parties entered into, for there are no such conditions contained in it. The action would have to be maintained either upon the verbal agreement, independent of the written contract, or upon the latter, varied and controlled by the verbal agreement ; and this would be in violation of the well-established rule to which we have referred, and the existence of which the appellant concedes in his brief. If the appellee cannot take advantage of the con- temporaneous verbal agreement, neither can the appellant. The ruling of the court is so clearly right that we feel that we must affirm the judgment, with damages. Judgment affirmed, with 5 per cent damages, and costs. Contemporary Agreement as to Time of Payment w^liere Time is Stipulated in the Instrument. Jacobs V. Mitchell, 4G Ohio St. 601 (22 N. E. 768). Error to circuit court, Allen county. The suit below was brought by the holders against the maker of a promissory note, the holders averring that they became the owner of it for a valuable consideration before it became due. The note is as follows: $4.00. December 9, 1884. Thirteen months after date I promise to pay to T. J. McElroy, or bearer, four hundred dollars, value received, 6 per cent, interest. J. W. Jacobs." The questions arise upon a demurrer to the answer, which is as follows: First defense. The said defendant, for ameuded answer to plaintiff's petition says that, concurrent with the execution and delivery of the note upon which this action is brought, the payee thereof, one T. J. McElroy, representing himself to be the agent of the ' ' Crawford, Henry & Williams County Bohemian Oats Association," executed and delivered to said defendant a written agreement, said T. J. McElroy rep- resenting to said defendant that he, the said McElroy, had full authority to bind said company as its agent. It is ex- pressly stated in said written agreement, executed and delivered by said McElroy to said -defendant, that the note given by said defendant to said T. J. McElroy should not be due and payable, and the amount therein named be called for, until said Bohemian Oats Association should sell for said J. W. Jacobs 80 bushels of Bohemian oats at $10 per bushel. This said agreement was taken by said J. W. Jacobs as a part consideration for the amount named in said note, which said Jacobs agreed to pay upon fulfill- ment of said written agreement. The only other consideration ever received by said Jacobs for said note was 40 bushels of oats, which were not worth more than 40 cents per bushel when re- ceived. The terms of said written agreement have never been 70 CH. HI.] AGREKMEXTS CONTIIOLLING OPERATION. ILL. CAS. complied -svith, either by said T. J. McElroy or the said oat asso- ciaiion The plaintiffs, before their alleged purchase of said note, knew that said written agreement existed, and had full notice of the force and intention thereof, and defendant denies that plaintiffs purchased said note before maturity. Secoxd de- fense. Said defendant says that the said note upon which the action was brought was obtained from said defendant by one T. J. McElroy, payee, by fraud, and was disposed of by said JMcElroy fraudulently, and that said fraud consisted of this, to wit: The said T. J. McElroy, on or about the 9th day of December, 1884, represented to said defendant that he was the agent of the " Crawford, Henry & Williams County Bohemian Oats Associa- tion," and for the purpose of defrauding said defendant, and to obtain his signature to a promissory note, agreed to deliver to said defendant 40 bushels of so-called Bohemian oats, represent- ing falsely tliat said oats were of an extraordinary quality and value, when in fact the said oats were of no more value tlian oats ordinarily raised by farmers ; and, for the further purpose of de- frauding said defendant, said T. J. McElroy represented and agreed, on the part of said company, that if said defendant would take said 40 bushels of oats, and deliver to said McElroy his promissory nole for the sura of $400, that he, the said McElroy, would hold said note and not dispose of it until after said Bohemian Oats Company should sell for said Jacobs 80 bushels of oats out of the next year's crop, at ^10 per bushel, and that said note would then, and not until then, have tobepaid by said Jacobs. Said agreement by said McElroy on the part of said company was in the form of a partly written and partly printed bond, and was delivered by said McElroy to said defendant concurrent with the delivery of sa'd note, who, relying on the said false and fraudulent statements of said McElroy, and believing that they were true, when in fact said false representations were made with intent to defraud said defendant by said McElroy, did sign said note, and deliver the same to said McElroy, who, contrary to his said agreement, and for the purpose of defrauding said defendant, disposed of said note so that defendant might not be able to make any defense thereto. Said agreement by said IMcElroy to sell, or cause to be sold bj' said company, said 80 bushels of oats, has not been performed, although the time has long since expired when said oats were to be sold, and said Jacobs retained 80 bushels of said oats, and still retains saWl oats, for the purpose of performing said contract on his part. The plaintiffs, defendant avers, took said note with knowledge of said contract between said McElroy and said defendant; and defendant further avers that plaintiffs are not bona fide holders of said note. Wherefore defendant asks that he may go hence with his costs. The demurrer was sustained, and judgment rendered for the plaintiffs ; and on proceedings in error the judgment was afllrmed by the circuit court. 71 ILL. CAS. AGREEMENTS CONTEOLLING OPERATION. [CH. III. Per Curiam (^after stating the facts as above). We think the court erred in sustaining the demurrer to the answer of the defendant. The first defense is based upon the non-performance of a contemporaneous written agreement, made and entered into by the parties in regard to the note, and of which it is averred the plaintiffs had notice when they became the holders of it. They then stand in the shoes of the original payee, McElroy. Although the note stipulates that it is payable 13 months after date, still this must be controlled, as between parties and holders with notice, by the written agreement ; that it is not to become due and payable until the association has sold for the maker 80 bushels of oats at the price named. 2 Pars. Notes & B. 144, 534. It is not necessary that an answer should be returned to the question why the parties should have subjected the absolute stip- ulation of the note as to the time of payment to the provisional terms of the written agreement. It is sufficient to say that they have seen fit to do so, and the agreement is binding on the holder. The effect of it is to give the maker the right to pay the note according to its terms, or to decline to do so until the terms of the written agreement are complied with, if, in his judgment, it would be more prudent to do so. This branch of the answer, then, states a sufficient defense to the action, — non-performance of the agi'eement. The case of Webb v. Spicer, 66 E. C. L. 894, 898, is, when rightly considered, not in conflict with this holding. The point of that decision was that the written agreement was not between the parties to the note. Here, it is. The fact that the suit is not between the original parties to the note and agreement does not affect the question, since the plaintiff acquired his title with notice, and stands in the shoes of the original payee. The second defense is based upon the alleged fraud of McElroy in obtaining the defendant's signature to the note by fraudulent representations as to the value of the oats. As it is also averred that the plaintiffs took the note with knowledge of the fraud, the facts averred certainly constitute a defense, and the demurrer should have been overruled. Neither of these defenses show that the maker was a party to any contemplated fraud upon the public. If the averments be true, and they are admitted by the demurrer, he was simply deceived into the belief that money could honestly be made out of the introduction of a new variety of oats, and the assumption that he was a party to any contemplated fraud on others at the time he executed the note is inconsistent with the averments of his answer. But if the assumption were true, still the illegal character of the consideration might be pleaded as a defense by the maker to an action on the note by the other party, or any holder of it with notice. Complicity in a wrong may defeat a party who, by action, seeks to enforce an executory con- tract based upon it, or to obtain affirmative relief against the contract, as by injunction or cancellation ; but such complicity does not preclude a defendant fi-om pleading the facts as a 72 CH. III.] AGREEMENTS CONTROLLING OPERATION. ILL. CAS. defense, although he may he in jxiri delicto. Roll ^J. Raguet, 4 Ohio, 400 ; McQuade v. Rosecrans, 36 Ohio St. 442 ; Kahu v. Walton, 46 Ohio St. 195, 20'J ; 20 N. E. Rep. 203. Judgment reversed, and cause remaudv d to the court of com- mon pleas, with directions to overrule the demurrer, and for further proceedings. Effect of Contemporary Agreement as to time of Pay- ment, where Noue is Stipulated, in Instrument. Horner v. Horner, U5 Pa. St. 258 (23 A. 441). McCoLLUM, J. The contest in this case is between the maker and payee of the note in suit. The note is therefore subject to any equitable defense or set-off which the maker has against it. If it was executed and delivered upon and ns jiart of the agree- ment set out in the altldaviis, the terms of the agreement and the damages resulting from a breach of it are matte -s proper to be considered in this action. As no time is meniioned in the note for its payment, the legal inference is that it is i)ayable on de- mand ; but this inference may be rebutted by proof of a con- temporaneous parol agreement fixing the time for the payment of it. Ross v. P^spy, 66 Pa. St. 481. Such agreement is not in contradiction to the terms of the Avritten instrument; it only prevents the implicntion raised by the law in the absence of uuy agreement as to the time of pay- ment. The evidence of it is not, therefore, in violation of the rule which forbids the introduction of oral testimony to desti'oy, contradict, or vary the terms of a written contract. It is also well settled in Pennsylvania that a written instrument obtained on the faith of a contemporaneous parol agreement cannot be en- forced in violation of such agreement. 'J he attempt to so use it subjects the writing to modification or contrarafts or warrants, of one oflScer of tlie corpora- tion on another. — It is a comparatively common custom in 1 Ante, § 5. 2 See Clark v. Farmers' &c. Mfg. Co., 15 Wend. 256; Rawson v. David- son, 40 Mich. 607; Osborn v. Kistler, 36 Ohio St. 99; Sidle v. Anderson, 45 Pa. St. 4G4. 3 Bank of Columbia v. Patterson, 7 Cranch, 305; Bank of U. S. v. Dandridge, 12 Wheat. 64; Many v. Boekman Iron Co., 9 Paige, 188; Colson V. Arnot, 57 N. Y. 253; Whitford v. Laidkr, 94 N. Y. 145; Town of New Athens V. Thomas, 82 111. 259; Buckley v. Briggs, 30 Mo. 452. 4 White V. Vermont &c. K. R. Co., 21 How. 575; Comrs. Knox Co. v. Aspinwall, 21 Iluw. 639; Clark v. Iowa City, 20 Wall. 683; Chapin v. Vt. &c. R. R. Co., 8 Gray, 675; Iliiven v. Grand Junction R. R. Co., 109 Mass. 88; Jackson v. Myers, 43 Md. 452; Mason v. Frick, 105 Pa. St. 162 (51 Am. Rep. 191); Smith v. Clark County, 54 Mo. 58; Mackay v. St. Mary's Church, 15 R. I. 121 (23 A. 108) ; Colson v. Arnot, 57 N. Y. 253 (15 Am. Rep. 490); Evertsou v. Nat. Bank, (,(^ N. Y. 14 (23 Am. Rep. 9). See Tiedeman Com. Paper, Chap. XXV, for a discussion of the charac- teristics of coupon bonds. 99 § 47 PARTIES TO BILLS AND NOTES. [CH. IV. the dealings of a private corporation for one of its officers, — its president or secretary, for example, — to draw on the treasurer in favor of some person to whom the corporation has become indebted. If the diaft or warrant contains all the essentials of negotiable paper, there can be very little doubt that the warrant is a negotiable bill of exchange, in which the same party is drawer and drawee ; and such a warrant may, like all other such irregular instruments, ^ be treated either as an accepted bill of exchange or as a promissory note. Since the warrant is drawn by the cor- poration on itself, the drawer and drawee being practically the same person, it has been generally held that it is not necessary to make a formal presentment for acceptance or payment, in order to hold the corporation liable. ^ §47. Governments as parties, — The power of the governments, both national and State, to become parties to negotiable instruments, as drawer, acceptor and maker, is clearly and fully recognized.^ It is a common thing for these governments to issue coupon bonds, treasury notes and bills of credit, which are essentially nothing more than promissory notes.* And the courts of the United States have recognized the power of a foreign government to be- come a party to a bill of exchange.^ But since governments do not, in the ordinary administration of public affairs, resort to the issue or use of negotiable paper; in order that such paper may be lawfully issued, with the govern- ment as a party to the same, the officer of the government, who issues it, must have an express authority from the » Ante, § 16. 2 Fairchild v. Ogdensburg &c. R. R. Co., 15 N. Y. 337 (69 Am. Dec. 606); Tripp u. Swanzey Mfg. Co., 13 Pick. 291; Shaw v. Stone, 1 Cush. 228; Indiana &c. R. R. Co. v. Davis, 20 lud. 6 (83 Am. Dec. 303); "Wetumplia &c. R. R. Co. v. Bingham, 5 Ala. 657. But see Sioux Nat. Banli V. Cudahy Packing Co., 63 Fed. 805, 3 Poindexter v. Greenhow, 114 U. S. 270; U. S. v. Bank of Metropolis, 15 Pet. 377; U. S. v. Central Nat. Bank, 6 Fed. Rep. 134; State ex rel. Plock V. Cobb, 64 Ala. 127. 4 See Tiedeman Com. Paper, Chapters XXIV and XXV. s Jones V. LeTombe, 3 Ball. 384. 100 Ctl. IV.] PARTIES TO BILLS AND NOTKS. § 48 legislative department of the government to negotiate the bond or other negotiable instrument ; except so far as the power to issue negotiable paper, or to make the govern- ment a party to it, may be implied as being necessary to carry out some express power. But such an implication will rarely be considered as necessary. It has thus been held that no oflScer of the United States government has the implied authority to bind the government by his ac- ceptance of a bill, although the bill is drawn against an acknowledged indebtedness of the government to the drawer.* § 48. Municipal or public corporations as parties. — Under the terms, municipal or public corporations, are included, not only cities, but every other local government which are instituted under the laws of the States, viz. : towns, counties, school districts and townships. In every case, the powers of these public corporations are limited by the provisions of the charters under which they have been organized. The general rule of interpretation is, that the municipal or public corporation can exercise only those )iow- ers, which are expressly granted by the charter, or which are implied, because they are plainly neccssiry in carrying out the powers which are expressly granted/^ In answering the question, how far and when can a municipal corporation be bound as a party to a negotiable instrument, wo find no difficulty where the power is expressly granted. There can be no question of the power of the legislature to authorize a municipal corporation to become a party to a bill, note or other commercial paper. The difficulty arises only when the power is claimed to be iniplied. Two questions are here involved: i'^?'?*s^, whether a municipal coiporatiou has the implied power to borrow money and bind the corporation by the obligation thus assumed ; or whether such corpora- iiion can only obtain funds by means of taxation : secondly/, whether, it' the implied power to borrow money be con- ' The Floyrl Acceptance.*, 7 Wall. 6GG. 2 See Tiederaau's Municipal Corp., Chap. VIII, IX. 101 § 48 PARTIES TO BILLS AND NOTES. [CH. IV. ceded, it includes the power to give in evidence of the money borrowed a negotiable instrument, a note, bill or bond. On the first question, the authorities are divided. Some of the cases maintain that the ordinary measure for pro- viding a city or county with the means of carrying on its work is taxation; and if the borrowing of money becomes necessary, a special grant of authority should Ke required.^ But the current of judicial opinion is decidedly in favor of the implied power of municipal and public corporations of all kinds to borrow money, within the express limitations of the charter, general laws and constitution of the State.^ But it must be for a public purpose that the money is bor- rowed.^ And as a consequence of the general prevalence of municipal extravagance, the power to borrow money is now very generally expressly granted, and subjected to express limitations as to the amount of indebtedness which might be incurred by borrowing money. The ordinary limitation is a specified percentage of the assessed value of private property subject to taxes.* Conceding the power of a municipal corporation to borrow money, the question still remains, whether it can, in bor- rowing mone}^ bind itself by becoming a party to nego- tiable paper, so that a bona fide holder can recover on it, although there are defenses which may be set up against the immediate parties. Some of the authorities hold that this power can be exercised only when the power to bor- 1 Mayor of Nashville v. Ray, 19 Wall. 4G8; Hackettstown u. Swack- hamer, 37 N. J. L. (8 Vroom) 191; Knapp w. lioboken, 38 N. J. L. (9 Vroom) 371; Gause v. City of Clarksville, 5 Dill. C. C. 165; Mayor of Wetumpka v. Wetumpka Wharf Co., 63 Ala. 611; Dively v. Cedar Falls, 21 Iowa, 365. 2 Williamsport v. Com., 84 Pa. St. 487 (24 Am. Rep. 708); Ketchum V. Buffalo, 14 N. Y. 356; Clarke v. School District, 3 R. I. 199; Galeua V. Corwith, 48 111. 423 (95 Am. Dec. 557) ; Clarke v. Cily of Dcs Moiues, 19 Iowa, 199 (87 Am. Dec. 423) ; Bank of Chillicotlae v. Mayor of Chilli- cothe, 7 Ohio, Ft. II, p. 31 (30 Am. Dec. 185); Mills v. Gleason, 11 Wis. 470 (78 Am. Dec. 721). 3 SeeTiedeman's Mun. Corp., §§ 137, 141, 175, 176, 184, 188. 4 See Tiederaan's Mun. Corp., § 189a. 102 CH. IV.] PAKTIES TO BILLS AND NOTES. § 48 row money is expressely granted.^ The general trend of judicial opinion has, until lately, been allogetiier in favor of the implied power of the municipal coi-poration, to become parties to a strictly negotiable instrument. ^ But recently, the United States Supreme Court has held that the power of a municipal corporation, to bind itself as a party to negotiable paper, is not to be implied from the power to borrow money, whether the latter power be express or implied. "^ This must, however, be taken as meaning only that the doctrine of ultra vires will be a good defense, even as against bona fide holders. And where the proceeds of the negotiation of the unauthorized issue of negotiable paper are received by the municipal corporation, it is liable to the holder of the paper for the amount so received.* The customary form of negotiable paper, when issued by municipal corporations, is that of a coupon bond, or scrii) ;^ and it is rarely the case that a municipal or public corporation becomes a party to an ordinary bill or note. The only municipal instrument which approximates in character these common kinds of negotiable paper, is the warrant, given by one officer of a municipal corporation on 1 Mayor of Nashville v. Kay, 19 Wall. 476; Ilackettstown v. Swach- hamer, 37 N. J. L. (8 Vroom) 191. 2 United States v. U. P. R. R. Co., 91 U. S. 72; Cromwell v. Lac. Co., 96 U. S. 51 ; Commissioners v. Block, 99 U. S. G8G; Ottawa v. First Nat. Bank, 105 U. S. 342; Ackley School Dist. v. Hall, 113 U. S. 135; New Providence v. Halsey, 117 U. S. 33G; Williamsport v. Com., 84 Pa. St. 487 (24 Am. Rep. 208); Starin v. Genoa, 23 N. Y. 454; Curtiss r. Leavitt, 15 N. Y. 35G; Goodman t?. Rara«ey Co., 11 Minn. 31; Galena v. Corwith, 48 111. 423 (95 Am. Dec. 657) ; Boss v. Ilewett, 20 Wis. 4G0; Crittenden Co. V. Shanks, 88 Ky. 475 (11 S. W. 408); Mayor u. Inman, 57 Ga. 370; Tucker v. Raleigh, 75 N. C. 267; Newgass v. New Orleans, 42 La. Ann. 163 (7 So. 5G.i). 3 Merrill v. Monticello, 138 U. S. 673; Brenham v. Germ. -Am. Bank, 144 U. S. 173; s. c. 549, reversing 35 Fed. Rep. 185, and overruling Rogers v. Burlington, 3 Wall. 654; MitchuU v. Burlington, 4 Wall. 270, and distinguishing Dwyer v. Mackworth, 57 Tex. 245. 4 Iloag V. Greenwich, 133 N. Y. 152 (30 N. E. 842). * For discussion of coupon bonds in general, see Ticdcman's Com. Paper, Chap. XXV, and municipal securities, Tiedeman's Muu. Corp., Chap. XL 103 § 49 PARTIES TO BILLS AND NOTES. [CH. IV. the treasurer or other oflScer of such corporation, directing him to pay a sum of money due. The general trend of authority in this country is to treat these warrants as of the character of vouchers ; and, since their value is not mate- rially enhanced by treating them as negotiable paper, to deny to them the characteristics of negotiability, at least so far as to enable a boria fide holder to recover on the warrant, where the officer has exceeded his authority in issuing the warrant. ^ § 49. Fiduciary parties and personal representatives as parties. — Trustees and guardians have not the power to bind the estates, which they have in charge, by any note or bill which they may attempt to issue in their representative capacity; and they will be personally liable on any such bill or note, even though they stipulate in the instrument that they are acting as trustee or guardian. ^ But, as between the guardian, a trustee and the ward or cestui que trust, it may be shown that the consideration for such bill or note redounded to the benefit of the estate.^ This is particularly true in cases, in which the trustee has the power to borrow money for the benefit of the estate. In such cases, the doctrine of the text may be taken as meaning, that the personal liability of the trustee stands between the bona fide holder and the trust estate, to protect both against his unauthorized exercise of the power to borrow money.* But where a note or bill is made payable to a 1 District of Columbia v. Cornell, 130 U. S. 655; Wall v. Monroe, 103 U. S. 559; Claiborne Co. ■;;. Brooks, 111 U. S. 400; Emery v. Mariaville, 56 Me. 315; East Union v. Eyan, 86 Pa. St. 459; People v. Johnson, 100 111. 537 (39 Am. Rep. 63); State v. Huff, 63 Mo. 288; State v. Lib- erty, 22 Ohio St. 44; Burlington &c. R. R. Co. v. Clay Co., 13 Neb. 367 (13 N. W. 628); Oatman v. Taylor, 29 N. Y. 657; Knapp v. Hoboken, 38 N. J.L. (9 Vroom) 371; Harris v. United States, 27 Ct. of CI. 177 (U. S. Treasury warrants). 2 Towne v. Rice, 122 Mass. 67; Hill v. Banister, 8 Cow. 31; Taylor v. Shelton, 30 Conn. 122; Storrs v. Flint, 46 N. Y. Super. Ct. 498; Robert- son V. Banks, 1 Smedes & M. 666; McGavoch v. Whitfield, 45 Miss. 452; Shiff V. Shiff, 20 La. Ann. 269. But see Gandy v. Babbitt, 56 Ga. 640. 3 Poole V. Wjlliams, 42 Ga. 539; Lapeyre v. Weeks, 28 La. Ann. 665. 4 See U. S. Trust Co. v. Roche, 116 N Y. 120 (22 N. E. 265) ; Rogers 104 CH. IV.] PARTIES TO BILLS AND NOTES. § 49 guardian or trustee, described as such, and for the benefit of the trust estate; and the note or bill is transferred by indorsement; some of tlie authorities hold that, on ac- count of the express description of the payee as guardian or trustee, the indorsee cannot claim to be a bona fide holder; and not only will he not be able to hold the guardian or trustee personally liable, but he takes it subject to all defenses, which may arise from a diver- sion of such note or bill from the purposes of the trust. ^ But where the indorsee has no actual notice of a breach of trust, and it is a bona fide purchase for cash of such a note or bill, the indorsee is a bona fide holder, and takes the paper free from any defenses, growing out of any secret diversion of trust funds, even though the instrument is made payable to the guardian or trustee, described as such.^ Where the note or bill is made paya- ble to the guardian or trustee, without describing him as such, there can bo no question, not only as to the bona fide ownership of the indorsee, but also as to the personal liability of the guardian or trustee on his indorsement.^ And it has been held that a trustee will be individually liable on a note, payable to him as trustee, wlien he trans- fers it by indorsement; even though the will, by which the trust estate was established, empowered him to make such transfer by indorsement:, unless he inserts in the indorse- ment an express stipulation that he is not individually liable.* The same principles apply in determining the liability of V. Rogers, 111 N. Y. 228 (18 N. E. 636); Burroughs v. Bunnell, 70 Md. 18 (16 A. 447); Pike v. Baldwin, 68 Iowa, 263 (26 N. W. 441); Miller v. Redwint', 75 Ga. 130. 1 Sturtevant v. Jaques, 14 Allen, 523; Shaw v. Spencer, 100 Mass. 382 (97 Am. Dec. 107); Baughn v. Shackleford, 48 Miss. 255; Smith v. I)ib- rell, 31 Tex. 239 (98 Am. Dec, 526); Nickerson v. Gilliam, 29 Mo. 456 (77 Am. Dec. 583). 2 Fountain v. Anderson, 33 Ga. 372; Westmoreland v. Foster, 60 Ala. 448; Thornton v. Rankin, 19 Mo. 193. 3 Knowlton v. Bradley, 17 N. H. 458 (43 Am, Dec 609). * Roger Williams Nat. Bank u. Groton Mfg. Co., 16 R. I. 504 (17 A. 170). 105 § 49 PARTIES TO BILLS AND NOTES. [CH. IV. an executor or administrator, as a party to a bill or note, signed by him in iiis representative capacity. He is not authorized to bind the estate by any note or bill, which he may execute, although it may be issued in settlement of a debt due by the estate. He is individually bound as maker of such a note, or drawer of such a bill, even though the signature is stated in the most explicit manner to have been made in his representative capacity. ^ If there is no fresh consideration for the executor's note, it is held, as against every one but a subsequent hona fide holder, that he will not be liable beyond the assets which he actually receives from the estate of the decedent. ^ And his liability will be limited to the amount of such assets, wherever he expressly limits his obligation to payment out of the assets of the estate.^ The executor or administrator is also personally liable as acceptor of a bill, drawn against him as such, even though he adds to his signature his official designation, at least as against bona fide holders.* But whore the drawer and payee, and particularly the latter, were informed at the time of acceptance, that the executor accepted in his representa- tive capacity, and only undertook to pay the bill out of whatever assets of the estate may be realized, such payee cannot hold the accepting executor beyond the amount of such assets.* Where the executor or administrator is the payee of a note or bill, as long as he does not transfer it by indorse- 1 Walker v. Patterson, 36 Me. 273; Funderburk v. Gorham, 46 Ga. 296 (note given for property purchased for estate) ; Bank of Troy v. Top- ping, 13 Wend. 657; Ritteuhouse v. Ammerman, 64 Mo. 197 (27 Ana. Rep. 215) ; Kessler v. Hall, 64 N. C. 60; Christian v. Morris, 50 Ala. 585. 2 Davis V. French, 20 Me. 21 (37 Am. Dec. 36); Byrd u. Holloway, 6 Smedes & M. 199. 3 Serle v. Waterworth, 4 Mees. & W. 9; Bank of Troy v. Topping, 9 Wend. 273; Kirkman v. Benham, 28 Ala. 501. But there must be some- thing more than signing his name as "executor" or "administrator." Tryon v. Oxley, 3 Green (Iowa), 289. ^ Tassey v. Church, 4 Watts & S. 141 (39 Am. Dec. 65). » Schmlttler v. Simon, 114 N. Y. 176 (21 N. E. 162). 106 CH. IV.] PARTIES TO BILLS AND >OTES. ILL. CAS. lucnt, he may treat it as his own private property or iu- ckide it in the assets of the estate; aiui maiutain an action on it in his personal or representative capacity, according to his election.^ The personal representative has the right in any case to transfer such paper by indorsement. ^ But he will be individually liable on such an indorsement, unless he makes the indorsement without recourse to him- self individually.^ ILLUSTRATIVE CASES. Noel V. Kinney, lOG N. Y. 74 (12 N, E. 351), Barrett v. Dodge, IG R. I. 740 (19 A. 530). Merchants' Nat. Bank v. Citizens' Gaslight Co., 159 Mass. 505 (34 N. E. 1083). Casco Nat. Bank v. Clark, 139 N. Y. 307 (34 N. E. 908). Frankland v. Johnson, 147 111. 520 (35 N. E. 480). Sparks v. Despatch Transfer Co., 104 Mo. 531 (15 S. W. 417) . Schmittler v. Simon, 114 N. Y. 176 (21 N. E. 172). Liability of AVif e on Promissory Xote — A Partner Avith Her Husband. Noel V. Kinney, lOG N. Y. 74 (12 N. E. 351). Danfoktii, J. The action is upon a note signed "J. P. Kin- ney & Co.," payable to the order of plaintiffs at bank, for §505, value received. The complaint contains alligations usual in such cases, and sufficient to charge the defendants as partners under the name affixed to the note. Fredericka M. Kinney alone answered, and her sole defense is that at the time stated she was a married woman, and that the note was executed and delivered by lier husband. But there is no allegation that it was made without her knowledge and consent, nor that it was made with- 1 Bogert V. Ilertell, 4 Hill, 503; Fry u. Evans, 8 Wend. 530; Litchfield V. Flint, 104 N. Y. 543 (11 N. E. 58) (treated as his personal property) ; Thomas v. Relfe, 9 Mo. 377; Clampitt v. Newport, 8 La. Ann. 124; Cra- vens V. Logan, 7 Ark. 103 (will by administrator de bonis non). 2 NeuhofE V. O'Reilly, 93 Mo. 1G4 (G S. W. 78); Makepeace v. Moore, 11 111. 474; Taylor v. Surget, 14 Ilun, IIG; Clark v. Moses, 50 Ala. 326. Where a note is payable to executors or administrators, and there are more than one, all must join in the indorsement. Smith v. Whitney, 9 Mass. 334; Johnson v. Mangum, G5 N. C. 14G; Sanders v. Bain, G J. J. Marsh. 44G (22 Am. Dec. 86). But see Bogert v. Ilertell, 4 IliH, 492. 3 Forster v. Fuller, 6 Mass. 58; Livingston v. Gaussen, 21 La. Ann. 286 (99 Am. Dec. 731). 107 ILL. CAS. PARTIES TO BILLS AND NOTES. [CII. IV. out her authority. Upon the trial the plaintiff put the note in evidence, and the defendant proved her marriage with the other defendant. But there was evidence from wliich the juiy might have found that she was the owner of improved real estate in the cit}^ of Brooklyn ; that the consid. ration of the note was the pur- chase price of mirrors placed in houses built upon her land ; and that the mirrors were unpaid for. The note was fail ly taken, and the consideration delivered upon the representation by the hus- band that the wife was the sole owner of the property-, and that the name of J. P. Kinney & Co. was used as mere matter of con- venience in transacting her business. It does not appear that there was any business except in relation to the houses. No question was made as to the authority of defendant's husband to execute the note, nor as to the truth of his representations. The defendant Fredericka moved to dismiss the complaint upon the ground that as to her the note was invalid, "its form," as her counsel stated, " sliowing it was not given in respect to her separate business or estate." The trial judge directed a verdict for the plaintiff, subject to the opinion of the court. It was so rendered, but, on motion of the defendant's counsel, afterwards set aside by the same judge, and judgment ordered for the de- fendant. Exceptions taken by the plaintiffs to this ruling were directed to be heard in the first ins' ance at general terra, judg- ment in the meantime to be suspended. The general term over- ruled the exception, and ordered judgment for the defendant. It is obvious that the contract in fulfilhnent of which the note was given was of value to the defendant, for by it she acquired articles for the improvement of her piopert3\ She retains those articles, and has so far avoided payment upon the ground that she and her husband, upon contracting and consummating mar- riage, became one person, and so incapable of thenceforth con- tracting one with the other; that, therefore, they could not be partners, and, as the contract sued on was in form a copartner- ship contract, it could not be enforced against her. If this is the present rule of law, then the statutes which enable the woman to acquire and hold property, to barizain, sell, assign and trans- fer it, to carry on any trade or business, and perform any labor or service on her own account, and which protect her in the enjoyment of her earnings from her trade, business, labor or ser- vices, and permit her to use and invest those earnings, are effect- ual only so far that she may, alone or jointly with any person or persons save her husband, derive profit and increase from her work, and gain from the use of hei' estate. If they are to be so limited in her favor, they may easily, as in this instance, become not merely enabling statutes for her benefit, but also in her hands instrumentalities of fraud. Upon the precise question presented the opinion of the court below assumes that the decisions of other courts are conflicting; but we are referred to no case in this court where a woman has successfully asserted her coverture as a defense to an action for 108 err. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. tlie price of goods purcliased by ber, and I am unable to see wby, as against creditors, sbe should be permitted to interpose the mere form of her promise as an obstacle to their recovery. It is settled that the things which the statute above referred to permit her to do in person she may also do by another as her agent. Tlrs is necessarilv so, for she is allowed to act in respect to them a'* if unmarried ; and it cannot be doubted that the improvement of her hind, or the management of her personal property, whether for preservation or Ixisiness, may be conducted by her by means fif any agency which anv other owner of property might emplo}', and that the produce and increase thereof will be hers. Knapp V. Smith, 27 N. Y. 278; Al)bey v. Deyo, 44 N. Y. 344. So she may do those things througti lier husband as her agent. Abbey V. Diyo, supra; Kowe v. Smith, 45 N. Y. 230. She may also liave such a community of interest with him in relation to real estate as will nnder her liable for his frauds relating to it; and when he, professing to act as her ajent, makes false representa- tions, although without her knowledge, and she receives the pro- ceeds, she cannot retain tlie fruits of his fraud. Krumm v. Beach, 96 N. Y. 398. Again, as to all contracts relating to her separate estate, or made in the course of her separate business, she stands at law on the same footing as if unmarried, and can therefore make iie- gotiable paper which will be governed by the law-merchant, and can be sued upon in the ordinary way by general complaint, and without special statements. Frecking v. RoUand, ho N. Y. 422. Nor can she escape liability because she and her husliand are joint makers of the note sued on. In Frecking v. Holland, supra, tlie action was ujion a promissory note sii)e Woiks, 101 I\Iass. 67. It is not necessary tliat the authority of an dllicer or agent to sign notes in behalf of a corporation should appear in the by-laws, or should have been expressh' given by ^ 115 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. vote of the directors or of the stockholders. In Lester v. Webb, 1 Allen, 34, it was said: " The rule is well settled, that if a cor- poration permit their treasurer to act as their general fiscal agent, and hold him out to the public as having the general authority implit d from his official name and character, and by their silence and acquiescence suffer him to draw and accept drafts, and to indorse notes payable to the corporation, they are bound by his acts done within the scope of such implied authority. Fay v. Noble, 12 Cush. 1 ; AVilliams v. Cheney, 3 Gray, 215 ; Conover v. Insurance Co., 1 N. Y. 290. On the facts proved at the trial the plaintiff might well claim, il the jury believed the evidence, that the treasurer had authority to in'^orse the notes in suit, derived, not from an}" express direction, but from the course of conduct and dealing of the treasurer with tlie knowledge and implied assent of the directors of the corporation." See, also, McNeil -y. Chamber of Commerce, 145 Mass. 285 ; 28 N. E. Rep. 245 ; Min- ing Co. V. Anglo-Cal fornian Bank, 104 U. S. 192. 3. But cases where the actual authority of an officer is inferred from a couise of business known to and permitted by the stockholders or the directors of a corporation do not touch the question whether authorit}^ is to be implied as matter of law from the name and nature of the office itself. In the present case the jury were instructed that the treasurer of such a corporation as the defendant company has by virtue of his office authority to sign a note which shall bind the corporation, and the defendant contends that this instruction was incorrect. The incidental powers of some officers or agents have become so well known and defined, and have be< n so frequently recognized by courts of justice, that certain powers are implied as matters of law in favor of third persons who deal with them on the assumption that they possess these powers, unless such persons are informed to the contrary. The officers and agents usually mentioned in this category are auctioneers, brokers, factors, cashiers of banks, and masters of ships. See Merchants' Bank v. State Bank, 10 Wall. 604 ; Case v. Bank, 100 U. S. 446. Treasurers of towns or cities in this commonwealth are well-known officers, and their ])owers are very limited. They are in general to receive, keep, and pay out money on the warrant of the proper officers of the towns and cities. Treasurers of business corpora- tions usually have much more extensive powers, and the decisions of this court hold that the treasurer of a manufacturing and trad- ing corporation is clothed by virtue of his office with power to act for the corporation in making, accepting, indorsing, issuing, and negotiating promissory notes and b'lls of exchange, and that such negotiable paper in the hands of an innocent holder for value, who has taken it without notice of any want of authority on the part of the treasurer, is binding on the corporation, although with reference to the corporation it is accommodation paper. Narragansett Bank v. Atlantic Silk Co., 3 Mete. (Mass.) 382; Bates V. Iron Co., 7 Mete. (Mass.) 224; Fay v. Noble, 12 Cush. 116 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. 1 ; Lester v. Webb, 1 Allen, 34 ; Bauk v. Winchester, 8 Allen, 109 ; Bird v. Daggett, 97 Mass. 494 ; Monument Nat. Bank v. Globe Works, ubi supra; Corcoran v. Cattle Co., 151 Mass. 74; 23 N. E. Rep. 727. While it is possible that most, if not all, of the cases in which this rule has been slated as law have some spcc'al circumstances from whicli the treasiinr's authority could be inferred, and that the couit was influenced in the decisions by the well known fact that in man}^ of the manufacturing cor- porations of this commonwealth tlie treasurer not only has the custody of the money, but is the general financial manager, and often the general business mannger, of the corporation, the rule itself has been frequently and broadly stated in our decisions, and is well known botli to the officers of manufacturing and trading cor- porations and to those of banks and financial institutions. It could not now be abrogated or unsettle 1 witi)oiit disturbing commer- cial transactions. There are, however, many corporations which transact more or less business to whicli the rule has been held not to apply. Thus it does not apply to a college (Webster v. Col- lege, 23 Pick. 302), nor to a ])arisli (Packard v. Society, 10 Mete. [Mass.] 427), nor to a monument association (Torre}' v. Association, 5 Allen, 327), n r to a municipality (Bank v. AVin- chester, 8 Allen, 109), nor to a savings bank (Tappan v. Bank, 127 Mass. 107), nor to a horse-railroad company (Craft v. Rail- road Co., 150 Mass. 207; 22 N. E. Rep. 920). Upon considera- tion of the decisions cited, we think it fair to say that the making and indorsing of negotiable paj)or is to be presumed to be within the i)ower of the treasurer of a manuf icturing and trading corpo- ration whenever from the nature of its ordinary business as usu- ally conducted the corporation is naturally to be expected to use its credit in carrying on commercial transactions. Such paper is the usual and ordinary instrument of utilizing credit in commer- cial transactions, and it is for the intere-t of the corporation and of the community that the bist instrument should be employed. It is no less for the interest of all that, if negotiable paper is to be employed, its validity should not be open to objections which would impair its usefulness by requiring at every step an inquiry into the authority by which it is issued. There are matters of common knowledge pertinent to the present question. Gaslight companies like the defendant are chartered for the purpose of making and sellin:: gas. They are located in every city of the commonwealth, and in most of the larger towns and villages. In the recent development of the use of electricity many electric light or light and jjower companies have been established where gaslight companies are in operation. The i)owers, obligations, and business of tliese electric compani« s are so similar to those of gas- lightcompanies that they are classed with them in the minds of bus- iness men, and are under the supervision of the same State board. We see no reason why, in respect to the present question, all of this general diss or corporations shouhl not be governed b}' one rule. They aie all in fact " manufacturing and trading corpora- 117 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. tious " in the same sense that companies whose business it is to manufacture and sell cottons, woolens, shoes, or paper are manu- facturing and trading corporations. None of these companies are traders in the strict sense contended for by the defendant, since none of them make it their "• business to buy merchandise or goods and sell the same." All of them, and the gaslight com- panies equally with the others named, buy merchandise and goods in large amounts, expend large sums in transforming by their processes of manufacture the articles purchased into other commodities which they sell for the purpose of making a profit. Neither the fact that pipes which a gaslight com- pany uses only to deliver to its customers one of the commodi- ties which it sells, nor that its price for that commodity may be regulated by civil authority, nor that the municipality in which its plant is located may purchase or take its franchise and prop- erty, makes it less advantageous or necessary, that the gaslight company shall be able to use its credit in its commercial dealings. Although such companies manufacture only as they deliver, and so have no occasion to hold large quantities of manufactured goods for a market, there are features of their business which make it necessary for them to have control of large amounts of money at certain seasons. Coal, their chief raw material, is uniformly at its lowest price in the summer, and away from the seaboard is usually taken in in large quantities at that season. Gas is uniformly sold upon time, and the bills collected monthly or quarterly. The work of extending and repairing street mains and other work upon the manufacturing plant can be done to the best advantage during only a portion of the year. A business so conducted affords abundant scope for the advantageous use of the credit of the corporations engaged in it, and they would naturally be expected to use their credit in tlie transaction of their ordinary business. Their published returns made to the board of gas commissioners show that the companies do in fact issue large amounts of promissory notes. It is true that these notes may possibly have been issued under special votes or by- laws or other explicit authority. Upon this point we have no evidence or means of certain knowledge. But it is also true, and is a consideration entitled to weight, that the practice of gas- lio-Iit companies to issue promissory notes has grown up since the announcement by the court of the rule that treasurers of manu- facturing and trading corporations are presumed to have authority to issue such notes ; and again, that gasHght companies are in fact manufacturing and trading corporations. The strong infer- ence is that the gaslight companies and their officers, and those who have received in payment or bought or discounted their promissory notes, have in so doing acted upon the assumption that the rule as to the implied authority of treasurers of manu- facturing and trading corporations to issue negotiable paper apphed to the treasurers of gaslight companies. Those who have occasion to deal directly with such companies, or to purchase or 118 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. discount their notes in the money market, would naturally assume that the rule so long applied by the court to other manufacturing and trading corporations would be applied to these. In our opinion, the same reasons which required the making of the rule referred to are oi)erative here, and require us to hold that it is to be applied in the case of gaslight companies. We do not dis- regard the fact that sucii companies have peculiar duties to the public, and peculiar privileges, and that their operations may be regulated b}' public authority, and their franchises and property taken over by tlie municipalities in which their works are located. But the situation of such a company with reference to this class of rights and obHgation^i is the same irrespective of the question whether its treasurer is or is not to be presumed to have power by virtue of hisollice to issue promissory notes. Such notes do not bind the franchises or the property of the company any more than debts upon open account. A majority of the court is there- fore of opinion that the jury was rightly instructed that the treasurer of the defendant corporation by virtue of his office, had authority to sign a note which would bind the corporation. 4. It is not necessary to consider in detail the numerous ques- tions argued by the defendant as to the admission and the exclusion of evidence and the rulings given and refused, bearing upon the status of Mr. Ruggles as the treasurer de jure or de facto of the corporation, or upon the answers to the special questions propounded by the court and answered by the jury in addition to the general verdict for the plaintiff. Upon the uncon- trovcrted evidence, certain persons claiming to act as the stock- holders of the corporation, all of whom were interested in its stock, assembled at its office on the day fixed in its by-laws as the date of its annual stockholders' meeting, and went through the forms of holding its annual meeting and of electing him treas- urer of the company. The former incumbent of the office re- signed it into the hands of Mr. Ruggles, and he has since tilled the position of treasurer under a claim of a right to the olHce, and without dispute on the part of any stockholder or member of the corporation, and no proceedings have been brought by the corporation itself to test his title to the otlice. The note in suit was issued when he had thus been in the unquestioned discharge of the functions of the ofhce for nearly three months, and immedi- ately thereafter, at a meeting of which public notice was gi\en, his election was ratified and confirmed. No person in any way interested in the stock, either as a stockholder of record or as a purchaser or pledgee of untransferred certificates, has contested in any way his riglit to the otUce. The contention that he is not the lawfully elected treasurer has been made onl}' by the corpoia- tion itself, and only as a technical defense t<; the present suit. Wiiatever might be the rule to be applieil if a stockholder or member of llie corporation or the corporation itself had contested the right of Mr. Ruggles in proceedings brought to test the validity of his original election, or of the subsequent ratification, 119 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. and without holding as to the rules which apply to de facto officers of government or of public or quasi-public corporations, we are of opinion that under such circumstances the corporation itself cannot be permitted to contend in defense of an action like the present that the acts of a person who, under color of an elec- tion to the office, has, without protest or opposition from any source, acted as its treasurer for so long a time, are invalid merely because the annual meeting at which he was chosen was not called in accordance with the by-laws. None of the excep- tions relating to this branch of the ease are, in view of the uncon- troverted facts, material to the question whether the note in suit is a valid cause of action against the corporation, and they are overruled as immaterial. Exceptions overruled. Field, C. J. (dissenting). The most important question in this case is whether the instruction of the court is correct that the treasurer of such a corporation as the defendant has authority to sign a promissory note for the corporation by virtue of his office, although the by-laws confer no such authority on him, and he has not been held out by either the stockholders or the directors of the corporation as having any such authority, and has not been knowingly permitted to exercise any such power. The ground on which certain officers and agents are held, as matter of law, to possess certain implied powers by virtue of the office or employ- ment, is that by a well-known general usage certain powers attach to the office or employment, and the appointment is pre- sumed to have been made with reference to this usage, unless there is notice or knowledge to the contrary. Tiie grounds on which this court has decided that the treasurer of a manufacturing and trading corporation must be taken to have authority to sign promissory notes in behalf of the corporation, unless there is notice or knowledge to the contrary, are stated in the opinion of the majority of the court, but these decisions have been confined to corporations which sell merchandise in the market, although they manufacture the merchandise which they sell, and the doc- trine has never been extended to such quasi-public corporations as gaslight companies. In a street-railway corporation, which perhaps affords the nearest analogy, an implied power in the treasurer to sign promissory notes for the corporation has been denied, and treasurers of municipal corporations, and of corpora- tions generally, have no such implied power. Gasliglit companies are not commonly known as " trading companies." They do not sell goods, wares, and merchandise in the market. Indeed, they are not commonly called " manufacturing companies." They manufacture and deliver gas to the inhabitants of defined locali- ties, at prices fixed either by public authority or by the com- panies themselves, subject to public supervision. Tliey may be invested with the right of eminent domain, and subjected to municipal control, and the business may be carried on by towns and cities as well as by private corporations. Their property is mainly in real estate. The income is received at regular times, 120 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. and, althougli small in proportion to the value of the plant, is not subject to unforeseen variations in kind or amount. These com- panies may issue bonds at not less than par, but, unless specially authorized by the legislature, the amount of bonds must not exceed the capiial ac tually paid in (St. 1886, c. 3.')(), § 3), and the property wliicli coiistiiutes the plant is or should be paid for by the capital stock and the proceeds of the bonds. Such com- panits may sometimes have occasion to borrow money and to give promissory notts, but, if will conducted, the occasions cannot be frequent. The word " treasurer," in and of itself, does not import that the person holding that ofHce is the general business manager of the corporation, but only that he is the person to receive, keep, and disburse the money of the corporation. It was not shown in the present case that treasurers of similar corporations customarily exercise the i)0wer of giving promissory notes in behalf of the cor- porations. Such a p(nver may be given by the by-laws to a treasurer, either alone or jointly with some other officer or officers ; but in this case the defendant offered to show that by the by-laws the treasurer " had no ]iower ns treasurer to sign notes in behalf of the company," and this evidense was excluded. We know of no custom or usage of which we can judicially take notice that treasurers of such corporations usually have such authority, or usually exercise such a power. We know of no principle of pub- lic policy which requires us to hold that the treasurer of such a corporation has impliedly such a power, when he in fact has it not, and has not been held out by the corporation or its directors as having it, and when it does not ajjptar that treasurers (f similar corporations have customarily exercised such a power so publicly and uniformly that courts cantake judicial notice of it. It is impor- tant that corporations should retain the power of controllirg their officers. The general i ulc is that when one person signs the name of another to any contract, whether the otiier be a natural or arti- ficial person, the authority to do so should be shown, unless the principal has held out such person as having such authority. The instances must bo rare when the Lw will necessarily imply from the name of an office in a corporation authority to sign the name of the corporation to any contract when no such authority has in fact been given, or has ever before bi en exercised with the knowl- edge of the stockholders or directors of the coriioration. There is, generally speaking, no hardship in compelling persons who take promissory notes signed by one person in the name of an- other to ascertain the authority' of tiie person signing, unless they are content to rely upon an indorser or guarantor. I think the instruction given on this subject was wrong. Allen, J. , concurs in this opinion. 121 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV Form of Signature by Agent to Bind Corporation — Note Must Run in Xanie of Corporation. Casco Nat. Bank v. Clark, 139 N. Y. 307 (34 N. E. 908). Appeal from supreme court, general term, second department. Action b}^ the Casco National Bank of Portland against John Claik and E. H. Close. From a judgment of the general term (18 N. Y. Supp. 887) affirming a judgment in favor of plaintiff, defendants appeal. Affirmed. Gray, J. The action is upon a promissory note, in the fol- lowing form, viz. : — Brooklyn, N. Y., Aug. 2, 1890. $7,500. Three months after date we promise to pay to tlie order of Clark & Chaplin Ice Company seventy-five hundn^d dollars at Mecbauics' Bank ; value received. John Clark, Prest. E. H. Close, Treas. It was delivered in payment for ice sold by the payee company to the Ridgewood Ice Company under a contract between those companies, and was discounted by the plaintiff for the payee before its maturity. The appellnnts Clark and Close appearing as makers upon the note, the one describing himself as " Prest." and the other as "Treas." were made individually defendants. They defended on the ground that they had made the note as officers of the Ridgewood Ice Compau}'^, and did not become per- sonally liable thereby for the debt represented. Where a nego- tiable promissory note has been given for the payment of a debt contracted by a coiporaiion, and the language of the promise does not disclose the corporate obligation, and the signatures to the paper are in the names of individuals, a holder taking bona fide and without uwtice of the circumstances of its making is entitled to hold the note as the personal undertaking of ils signers, notwithstanding they affix to their names the title of an office. Such an affix will be regarded as descriptive of the persons, and not of the character of the liabilit}'. Unless the promise purports to be by the corporation, it is that of the persons who subscribe to it; and the fact of adding to their names an abbreviation of some official title has no legal signilica- tion as qualifying their obligation, and imposes no obligation upon the corporation whose officers they may be. This must be regarded as the long and well-^eitled rule. Byles Bills, §§ 36, 37, 71; Pentz v. Stanton, 10 Wend. 271; Taft v. Brewster, 9 Johns 334; Hills v. Bannister, 8 Cow. 31 ; Mo^s v. Livingston, 4 N. Y. 208; De Witt v. Walton, 9 N. Y. 571 ; Bottomley v. Fisher, 1 Hurl. & C. 211. It is founded in the general principle that in a contract every material tiling must be definitely expressed, and not left to conjecture. Unless the language creates, or fairly implies, the undertaking of the corporation, if the purpose is equivocal, the obligation is that of its apparent makers. 122 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. It was said in Briggs v. Partridge, 64 N. Y. 357, 363, that persons taking negotiable instruments are presumed to take them on tlie credit of the parties whose names appear upon tliem, and a person not a ))arty cannot be charged upon proof that the osten- sible party signed or indorsed as his agent. It may be perfectly true, if there is proof that the holder of negotiable paper was aware, when he received it, of the facts and circumstances con- nected with its making, and knew tliat it was intended ami deliv- ered as a corporate obligation only, that the persons signing it in this manner could U't be held individually liable. Such knowl- edge m;giit be inii)utable from tlie language of the paper, in con- nection with other circumstances, as in tliec;iseof Mott v. Hicks, 1 Cow. 513, where the note nad, " the i)resident and directors promise to pay," and was subscril)ed by t'le defendant as " pres- ident." The court held that that was sufficient to distinguish the case from Taft v. Brewster, supra, and made it evident that no personal engagement was entered into or intended. Much stress was p'aced in that case upon the proof that the plaintiff was intimately acquainted with the Irausaciion out of which arose the giving of the corporate oMigation. In the case of Bank of Gen- esee t\ Palchin liank, 19 N. Y. 312, referred to by the a|>pellants' counsel, liie act'on was against the defendant to hold it as the indorser of a bill of exehange drawn to tlie order of " S. B. Stokis, Cas," an 1 indorsed in the same words. The plaintiff bank was advised, at the time of discounting the bill by the president of the Patchin Bank, that Stokes was its casiiier, and that he had bdn directed to sei.d it in iov discount, and Stokes forwarded it in an official way to the plaintiff. It was h Id that t'.e Patchin Bank was liable, because the agency of the casliier in the matter was communicated to the knowledge of the plaintiff, as well as apparent. Jncidentally it was said that the same strict- ness is not required in the execution of commercial pa[)er as between banks; tliat is, in other respects, between individuals. In the al)sence of competi nt evidence showing or chirging knowledge in the holder of negotiable pai)er as to the char- acter of tlie obligation, t'le established and safe rule must be regarded to be that it is the agreement of its o-tensil>le maker, and not of some oilier party, neidier disclosed by the language nur in the manner of execution. Iii this case tliclanguag«> is •' we prom- ise to jiay," and tliesigntitures by the defendants Clark and Close are perfectly consilient with an assumption by them of the com- pany's del)L. Th'i appearance upon the margin of the paper of tiie printed name " Kidgewood Ice Company" was not a fact carrying any presuinpt on that the note was, or was intended to be, one by tiiat conqiany. It was competent for its ollicers to obligate themselves pcr-onally, for any reason sdisfactory to themselves; and, apparently to the world, tlioy did so by the langnag(> of the note, wliich the mere use of a blank form of note liaving upon its margin the name of their company was insufficient to n( gative. 123 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. In order to obviate the effect of the rule we have discussed, the appellants proved that Winslow, a director of the payee company, was also a dh-ector in the plaintiff bank at the time when the note was discounted, and it was argued that the knowledge chargeable to him, as director of the former company, was imputable to the plaintiff. But that fact is insuffli-ient to charge the plaintiff with knowledge of tlie character of the obligation. He in no sense re[iresented or acted for the bank in the transaction, and, what- ever his knowledge respecting the note, it will not be im[)utable to the bank. Bank v. Norton, 1 Hill, 572, 578; Mayor, etc. v. Tenth Nat. Bank, HI N. Y. 446, 457 ; 18 N. E, Rep. 618 ; Bank V. Payne, 25 Conn. 444. He was but one of the plaintiff's directors, wlio could only act as a hoard. Banlcu. Norton, supra. If he knew the f ict that these were not individual, but corporate, notes, we cannot presume th it ho communicated that knowledge to the board. An officer's knowledge, derived as an individud, and not whde acting officially for the bank, cannot operate to the prejudice of the latter. Bank v. Davis, 2 Hill, 451. The knowl- edge with which the bank as his principal would be deemed chargeable, so as to affect V, would be where, as one of the board of directors, and participating in the discount of the paper, he had acted atfirmalively or fraudulently with respect to it, as in the case of Bank v. Davis, supra, by a fraudulent perversion of the bills from the obj.ct for which drawn, or as in Holden v. Bank, 72 N. Y. 286, where the president of the bank, w^ho represented it in all the transactions, was engaged in a fraudulent scheme of conversion. It was said in the latter case that the knowledge of the president as an individual or as an executor was not imput- able to the bank merely because he was the president, but because, when it acted through him as president, in any transaction where that knowledge was material and applical)le, it acted through an agent. The rule may be stated, generally, to be that where a director or an officer lias knowledge of material facts respecting a proposed transaction, which h;is relations to it, as representing the bank, have given him, then, as it becomes his official duty to communicate that knowledge to the bank, he will be presumed to have doiie so, and his knowledge will then be imputed to tbe bank But no such duty can be deemed to have existed in tl is case, where the appellants have made and delivered a promissory note, purporting to be their individual promise. If one of the plaintiff's officers did have knowledge — whether individually or as a director of the Clark & Chaplin Company is not material — that the paper was made ami intended as a corporate note, his failure to so state to the bank could not prejudice it. It was in no sense incumbent upon him, assuming that he actually par- ticipated in the discount (a fact not shown), to explain that the note was the obligation of the Ridge wood Company, and not of the persons who appeared as its makers. He was under no duty to these persons to explain their acts, and the law would not imply any. At most it would be merely a case of knowledge, 124 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. acquired by a director of facts not material to the tran- action of discount ])y the plaintiff, and which he was under no obligation to communicate. No other questions require discussion, and the judgment rendered below should be alHrmed, with costs. All concur. Ambiguous Execution of Corporate Note by Agent. Frankland v. Johnson, 147 111. 520 (35 N. E. 480). Appeal from appellate court, first district. Assumpsit by L. M, Johnson against Benjamin Frankland. Plaintiff obtained judgment, which was affirmed by the appellate court. Defendant appeals. Affirmed. Wilkin, J. This was an action in assumpsit by appellee v(!rsus appellant, commenced in the superior court of Cook county by attachment. The declarntion consisted of the common counts, and a special count u|)on the following instrument: "$5,592.00. Chicago, June 1st, 1885. On or before the fiist day of June, 1888, the Western Seaman's Friend Society agrees to pay to L. M. Johnson or order the sum of five thousand five hundred and ninety-two do'lars, with interest at the rate of six per cent per annum. B. Frankland, Gen. Supt." The special count alleges that the defendant, on, etc., "made his certain promissory note in wilting, * * * in and by which said note the said defendant, by the name, style, and description of tiie ' Western Seaman's Friend Society,' promised to pay the said defendant," etc. '< » * * And that he, the said defend- ant, at the same time and place of the execution of the note aforesaid, and as part of the same transaction, by a certain writ- ing upon the face of said note, guarantied the prompt payment of tlie same, and undertook and promised to pay to the order of said plaintiff the sum of money therein mentioned, » * * which wiiting was in the words and figures, to wit, ' B. Frankland, Gen. Supt.' " 'I'lie affidavit for attachment alleged that the defendant was a non resident of the State, and that upon diligent inquiry his ])lace of resiiU nee could not be ascertained. An amended affidavit set up other causes for attachment, but, in our view of the case, it is uninqiortant. To the declaration, the defendant filed a i)lea of nonassumpsit ; and to the writ of attaciuuent, a plea in abatement, traversing the allegations of the affidavit. On these pleas, issue was joined, and a trial partially had before a jury; but, before it was concluded, it was agreed between the parties that the jury might be discharged, and the case be sub- mit; ed to the (•( urt, which was done. Judgment was rendered for the i)laintiff for the amount of the note sued on, and sustaining tie attachment. The defendant appealed to the a[)pellatc court, and it affirmeil the judgment of the superior court. As to tiie cause of action, the question between the parties is wbether the instrument sued on is the personal note of the defend- 125 ILL. CAS. PARTIES TO BILLS AND NOTES. [CII. IV. ant. or tliat of the Western Seaman's Friend Society. It is con- tended by counsel for appellee that,thero beiiis; no plea, verified by atlidavit, denying the execution of the instrument, the defendant cannot question his individual liability upon it. This position is based upon section 34, c. 1 10, of our statute, whicli provides that no person bhall be pt rmitted to deny on trial the execution of any instrument in writing upon which any action may have been brought, unless the person so denying the same shall, if defend- ant, verify his plea by affidavit. The defindant did not claim the right on the trial to deny the execution of the note. He admits that fact, but deu'es that, as executed, it became his personal obligation. This we Ihink he might d j without a sworn plea, and that seems to have been the view of tlie trial court. The defend- ant was permitted to introduce his own, and the testimony of other witnesses, giving his version (if all the facts and circum- stances under which the uole was made, and therefore had the benefit of all the fads available to him as a defense under any stale of pleading. The writing, on its face, is not distinctly the note of Frankland. A personal note by him, in proper form, would have used the personal pronoun "I," instead of the name of the corporation, and wou'd have been signed without the designation " Gen. Supt." JSVither is it, by its terms, a note of a corporation. As such, it should have been signed with the name of the corporation, by its president, secretary, or other offici rs authorized to execute it; or, as iu Scanlan v. Keitli, 102 111. 634, by the proper officers, designating themselves officers of the corporation for which they assumed to act; or, as iu Bank v. Gillet, 100 111. 254, using the corporate name both in the body of the note and in the signa' ures to it. But if it be conceded that, i)rima facie, a general superintend- ent of a corporation his authority to make promissory notes in its name, and this instrument held to appear on its face to be the obligation of the society, rather than of Frankland, certainly it could not even then be contended that it was conclusively so. It is well understood that, if the agent, either of a corporation or as an individual, makes a contract which he has no authority to make, he binds himself personally according to the terms of the contract. Aug. & A. Corp., § 303. It was said by Suiherland, J., in Mott V. Hicks, 1 Cow. 513: " It is perfectly well settled that if a person undertake to contract as agent for an individual or corporation, and contracts in a manner which is not legall}- binding upon his principal, he is personally responsible [citing authorities]. And tiie agent, when sued upon such a contract, can exonerate himself from personal liability only by showing his authority to bind those for whom he has undertaken to act. It is not for the i)laintiff to show that he has not authority. The defendant must show affirmatively that he had." This rule is quoted with approval in AVheeler v. Reed, 36 111. 91. This action is against Frankland individually. The note is declared upon as his personal promise to pay. The question, then, as to whether 126 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. it iS liis contract, or that of the Western Seaman's Friend Society, is O' e ' f fact, and so it was treated on the trial. Both parties went fully into th > facts and circumstances leading to and attend- ing the inakng of tlie noie. So far from showing allirmativcly that aiii)ellant had authority to make t e note, so as to ])ind the corporation, the evidence surely tends to sh »w the contrary, and that it was the intention of the i)ariies that he should be individ- ually responsible. No record i>roceedings whatever on the part f)f the corporation, pertaining to appellant's transactions with appellee or her husband, were shown. It is clear that, if suit had been against the society, there could have been no recovery, on the evidence in this record. At all events, the facts have been settled adversely to appellant, and are not open to review in this cc'urt. The propositioTis submitted to the trial court by appellant, to be held as law ai)plicable to tlie case, are mainly requests to hold certain facts to have been proven, and under the evidence they were all properly refused. In fact, no argument is made in sup- port of them. There is but one theory (n wiiich the judgment below could be reversed by this court, and that is that the note sued on must be held to be the contract of the corporation, abso- lutely and conclusively, and all parol proof tending to establish appellant's liability was incompetent, and that tiieory is clearly untenable. As to the judgment on the attachment, it is only necessary to say that the evidence at lea^t tended to support tlie allegations of the original affidavit, and the judgment of affirmance in the appel- late court is conclusive. The judgment of the appellate court will be affirmed. When Parol Evidence is Admissible to Charge Cor- poration on Xote. Sparks v. Despatch Transfer Co., 104 Mo. 531 (15 S. W. 417). Appeal from circuit court, Jackson county ; J. H. Slover, Judge. This is an action on five negotiable promissory notes, alleged to have been executed 1)3' defendant by and through one Stewart Jackson. The plaintiffs were copartners engaged in the horse and mule business in Kansas City, and had been for two years prior to the making of the notes sued on. The defendant was a business corj)oration, organized under the laws of this State, ai d doing transfer business in Kansas City. On the 21st day of June, 1887, one Stewart Jackson, in payment for certain mules by him bought of plaintiffs that day, gave plain- tiffs the following n-.te: "Sl,8r>n.00. Kansas City, Mo., June 21, 1887. Sixty da\s after date I promise to pay to the order of Sparks Bros, and Hancock, eigliteen hundred and sixty dollars, for value received, at the liauking office of II. S. Mills, in Kansas 127 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. City, Mo., with interest from date at the rate of ten per cent per annum until paid, and, if interest be not paid annually, to become as principal, and bear the same rate of interest. Due Aug. 20, 1887. Despatch Transfer Co., by S. Jackson, president." And on July 5, 1887, said Jackson, in i>ayraeut of mules that day bought of plaintiff'*, gave plaintiffs the following note : •'$1,840.00. Kansas City, Mo., July 5, 1887. Thirty days after date we promise to pay to the order of Sparks Bros, and Hancock, eighteen hundred and forty dolarc^, for value received, at the banking office of H. S. Mills & Son, in Kansas City, Mo., with interest from date at the rate of ten i)er cent per annum until paid, and, if in- terest be not paid annually, to become as principal, and bear the same rate of interest. Due Aug. 5, 1887. Despatch Transfer Co., by S. Jackson, President. Indorsed: Protest waived. S. Jackson." On the lltli of June, 1887, said Jackson, for mules bought by him of plaintiffs, gave them this note: "$300.00. Kansas Citj^ Mo., June 11, 1887. Sixty days after date I prom- ise to pay to the order of Sparks Bros, and Hancock, tliree hun- dred dollars, with ten per cent interest from date, value received. Due Aug. 10, 1887. S. Jackson." On June lllh said Jack- son, for mules by h'm bought that day of plaintiffs, gave this note: "$375.00. Kansns City, Mo., June 11, 1887. Sixty days after date I promise to pay to the order of Sparks Bros, and Hancock, tliree hundred and seventy-hve dollars, with ten per cent interest from date, value received. S. Jackson." And on June 15th this note: " $240. Kansas City, Mo., June 15, 1887. Sixty days after date I promise to pay to the order of Sparks Bros, and Hancock, two hundred and forty dollars, for one mouse-colored mule, bought of C. Sparks, with ten per cent in- terest from date, value received. Due Aug. 14, 1887. S. Jack- son." The plaintiffs declare upon each note separately, and charge that the defendant executed all five of the notes, by its president, Stewart Jackson. There is also a sixth count, which is as follows: " (6) Plaintiffs, for another cause of action, state that between the 10th day of June, 1887, and the 16th day of June, 1887, plaintiffs, at the request of the defendant, sold and delivered to the defendant certain mules as follows, to wit: On the 11th day of June three (3) mules, for $675 00; on the 15th day of June, 1887, one ( 1 ) mule for $240.00 ; amounting in all to the sum of $915.00; which said sum defendant owes plaintiffs, and fails and refuses to pay the same, although payment lias been demanded ; wherefore plaintiffs demand payment against defend- ant for the sum of $915.00 and for costs." The defendant, for its defense, denies that it executed either of said notes ; denies that it ever authorized the execution of either of said notes ; alleges that said notes were given to plain- tiffs by said Jackson on his own private account, and that the consideration therefor was certain mules and horses sold by plain- tiff to Jackson fur his individual account, and in no way con- nected with defendant's business; that said mules and horses 128 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. were never delivered to defendant, and were never bought by or for defendant ; that Jackson was carrying on a general business, buying and selling horses and mules for his own account, which plaintiffs well knew; and tbat the horses and mules for which tluse notes were given were bougiit by said Jackson in tbe ordi- nary course of his business, and plaintiffs knew he did not buy said mules and horses for defendant. Defendant set up its char- ter, showing that by it it was only authorized to conduct a gen- eral transfer business in the city of Kansas, moving freight from point to point in said city ; that it was never engaged in the busi- ness of buying or selling horses or mules, nor authorized any one to do so for it; that said two notes were wrongfully executed in its name by Jackson ; tliat it had no power to engage in the horse and mule business, antl the notes and the trades for said mules were ultra vires. Also pleaded especially that by one of its by- laws it was provided : " No debt for a sum larger than five hun- dred dollars shall be contracted in behalf of the company by any officer thereof, without a vote of the board of directors authoriz- ing same." That tiie debt sued for in the first and second and sixth counts exceeded five hundred dollars. That s:iid mules were not bought for defendant by said Jackson in the usual rou- tine of business : that they Avere not needed by defendant for its business ; that tbey were not di sired ; that defendant knew noth- ing of their purchase, and iis bnard of directors never authorized their purchase, nor the contracting of the debt therefor. This answer was verified by Harry E. Overstreet, secretary and treas- urer. The reply was a general denial. The cause was tried by a jury, and resulted in favor of plaintiffs on each count except the sixth. Tlie facts developed by tbe evidence are as follows : The de- fendant was a corporation engaged in the transfer business in Kansas City. Stewart Jackson was the president of the company. The company, as originally organized, had a capital of SI 0,000, — 100 shares. Jacksou had tbe controlling inierest, — 55 shares. Afierwards tbe stock was increased to $30,000, of which Jackson had 160 shares, — a majority of all the stock. Jackson was the president from the beginning until he left, in August, 1887, after the execution of the notes sued on. It also appears that Jackson purchased every mule and horse that defendant ever owned until he absconded; that defendant's busines^s re find for defendant on the sixth count of the petition. John J. Granefield, Foreman." Gantt, J. (after stating the facts as above). The notes sued on in this case were all executed by Stewart Jackson, who was at the time of their execution the president of the defendant below, appellant here. The first two were signed in the name of the Despatch Transfer Company, by Jackson as president ; the othi-r three by Jackson, without any reference to the corporation, or au}' words indicating that he intended to bind an}' one but him- self . The appellant seeks to avoid liability for any of these notes, but its defense differs, as to the first two, from its defense to the remaining three. Counsel for appellant argues that the evidence did not justify the instructions given for respondents, bj^ which appellant was held liable on the two notes signed with the corpo- rate name. Those instructions, in substance, declared the law to be that, if the jury should find that Jackson was the president of the defendant, and that dtfeiidant allowed him to act as their purchasing agent in buying stock in the name of the compau}', and recognized his act as such by paying his orders given on the company, or by paying his notes given bj' him for stock so pur- chased li_y iiim of i)laintiffs, then defendant was bound by his acts in purchasing the mules of plaintiff, and for the notes sued on in the first two counts, unless plaintiffs knew or had reasonable means of knowing that Jackson was buying these mules on his in- dividual account. The power of Jackson to bind the defendant is governed by the law of agency. The princij^le underlying is the same whether tlie principal be a corporation or an individual. It is now well settled that when in the usual course of the business of a corporation an officer has been allowed to manage its affairs, his authority to represent the corporation may be implied from the manner in which he lias been permitted by tlie directors to transact its business. This is only the application of the principle that usual employment is evidence of the powers of an agent, and the principal is held responsible for the acts of his agent within the apparent authority conferred on the agent. First Nat. Bank V. North Missouri &c. Co., 8G Mo. 125; Washington Mut. Fire Ins. Co. V. St. Marv's Seminarv, 52 Mo. 480 ; Kilev v. Frosee, 67 Mo. 390; Martin v. Webb, 110 U. S. 7 ; 3 Sup. Ct. Rep. 428; Mining Co. v. Anglo-Californian Bank, 104 U. S. 192. The pres- ident of a business cor|)oration is its chief executive officer. He may, without any special authority from the board of directors, perform all acts of an ordinary nature, which by usage or necessity are incident to his otlue, and may bind the corporation by con- tracts in matters arising in tlie usuul course of business. Boone Corp., § 144 ; Stokes v. Pottery Co., 4(3 N. J. Law, 237. In the case at bar Stewart Jackson was i)resident of defendant. He purchased every mule that defendant owned from its organiza- tion until after the execution of the notes sued on in this case. He had repeatedly signed notes in the name of the corporation, 131 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. and the corporation liad honored bis orders and paid his notes so drawn. Plaintiffs had 13 different transactions with him as the president and |)nrcha3ing a^ent of defendant prior to the giv- ing of the n )tes heroin, and his acts had always been ratified. The defendant was engaged in a transfer business in which the motive power was mules, and it was its written charter privileged to buy mules, and execute its notes therefor. Jackson had pur- chased mules for defendant of the plaintiffs ; and on this occasion he informed them th it he was purchising the mules for which these two notes were given, for the defen-lant. His transaction, under the evidence, was wiih^n both his actual and apparent authority to bind the defendant. The evidence is amply suffi- cient to bind defendant on these two notes; and there was no error in the in-truetions given for plaintiffs on these two notes, and certainly defendant ought not to be heard to complain. The action of the court in admit ing parol evidence to show that the defendant was liable on the tljri e notes sued on in third, fourth, and fifth counts, notwithstanding its name nowhere appeared on the notes, and in instructing the jury as it did in the eigh h instruction f()r the plaintiffs, presents for our consideration a question of great practical importance, and much depends upon its right decision. The exact question here presented has not been passed on by this court in any case that we have been able to find, but it has been long settled in many of our sister States. In Massachusetts as early as 1814, in the ca*e of Stackp.le -y. Arnold, 11 Mass. 27, it was held that, " where one makes a writ- ten contract, intending to act therein as the agent of another, and to bind his principal, it is necessary that it should appear in the contract itself that he acts as such agent;" and oral testi- mony was held inadmissible to contradict, vary, or materially affect the written contract. The same question came before tlie same court again in I860, in Brown v. Parker, 7 Allen, 337. In that case one N. H. Streeter had signed two negotiable notes, and it was sought to hold defendant Parker, on tlie ground that Streeter was his agent, and intended to bind defendant. The court says: " But in suits on promissory notes or bills of exchange no evidence is admis'^ible to charge any person as prin- cipal whose name is not in some way disclosed on the face of the note or draft. This point has been often drcided in this com- monwealth, and the reasons on which the rule rests have been fully stated in very recent decisions; " citing Slawson t). Loor- ing, 5 Allen, 340, and cases cited, it which it was said by Chief Justice Bigelow: "Being negotiable paper, all evidence c7e/i07*s the drafts is to be excluded. It is wholly immaterial, therefore, that the defendant was in fact the agent of the com|)any named on the face of the drafts ; that the plaintiff knew that he was so, and that the defendant had no personal interest in the company." In New York, in Pentz v. Stanton, 10 Wend. 271, the cases both in England and in the different States of the Union were reviewed, and the conclusion reached " that no person can be considered a 132 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. party to a bill unless his name or the name of the firm of which he is a partner appear on some part of it ; " citing Chit. Bills, 22 ; Fenn v. Harrison, 3 Terra R. 761; Eraly v. Lye, 15 East, 7. And this rule is universally accepted as the law by the recent text-writers on commercial paper. Tied. Com. Paper, § 87 ; Rand. Com. Paper, § 131. " The reason of this rule is that each party who takes a negotiable instrument makes his contracts with the parties who appear on its face to be bound for its payment. It is 'a courier without baggage,' whose countenance is its pass- port; and in suits upon negotiable instruments no evidence is admissible to charge any person as a principal thereto unless his name in some way is disclosed upon the instrument itself." 1 Daniel Neg. Inst., § 303 ; Mochera Ag., pp. 285-287 ; Heaton v. Myers, 4 Colo. 55. And another good reason for the rule is that every part of commercial paper must be definite and certain and contained in the body of the paper itself, so that every taker and holder understands exactly what his rights in and to it are, and with whom he is contracting. Counsel for respondents claim that this doctrine has been repudiated by this court in a number of decisions, and the importance of the question, and the earnestness with which this is urged, demand that we should state our reasons for declining to take that view of the case. The leading case relied upon by respondents is Washington &c., Ins. Co. v. St. Mary's Seminary, 52 Mo. 480. The note which was the basis of the action in that case was as follows : " S750. For value received in policy No. 2,969, dated the fourteenth dayof March, 1866, is- sued by the Washinizton Mutual Fire Insurance Company of St. Louis, I promise to pay said company (or their secretary for the time being) the sum of seven hundred and fifty dollars, in such portions and at such time or times as the directors of said com- pany may agreeably to their acts of incori)oration require. Daniel McCarthy, Prest. Per Thomas Burke." This court held that it was competent to explain the ambiguity on the face of the note itself. Speaking for the court. Judge Sherwood said in that case : '* In the present case the note sued on is signed ' Daniel McCarthy, Prest.' But president of what? Just here, under the rules laid down in the above cnses, parol evidence steps in, and affords a ready and satisfactory explanation. The word ' Prest.,' attached to the name of Daniel McCarthy, is an ear-mark of the oflicial capacity in which the note was signed, — not evidence, it is true, that the note was signed in that capacity, but a sufficient basis for the introduction, of testimony tending to establish that fact." Moreover, in that case the note on its face referred to policy No. 2,969, which insured the seminary building and church building belonging to St. Mary's Seminary. It will be observed, first, that the above note is not negotiable, and, secondly, that the ambiguity appears on its face, growing out of the word " Prest.," afiSxed to McCarthy's name. In tlie case at bar the notes are by their terms negotiable, and contain nothing but Jackson's name as maker ; so that this case is not authority, because the facts 133 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. are entirely different. It is true, however, that in this case Judge Sherwood quotes from the decision in Mechanics' Bank of Alex- andria V. Bank of Columbia, 5 Wheat. 327, in which the supreme court of the United States says : " It is by no means true, as was contended in argument, that the acts of agents derive their validity from professing on the face of them to have been done in the exercise of their agency." If this were all, it must be conceded that respondents are justified in claiming that this decision is broad enough to permit parol evidence in any case to explain who was the principal, notwithstanding there is no intimation on the face of the paper that any one but the agent is a party to it. But the supreme court of the United States did not put their decision on that ground ; but, on the contrary, Justice Jolinson, who de- livered the opinion, expi-essly says: "But the fact that this appeared on its face to be a private check is by no means to be conceded; on the contrary, the appearance of the corporate name of the institution on the face of the paper at once leads to the belief that it is a corporate, and not an individual, transaction ; to which must be added that the cashier is tlie drawer, and the teller the payee, and the form of ordinary checks deviated from by the substitution of ' t9 order ' for ' to bearer.' The evidence, there- fore, on the face of the bill predominates in favor of its being a bank transaction. But it is enough for the purposes of the defend- ant to establish that there existed on the face of the paper circum- stances from which it might reasonably be inferred that it was either one or the other, and in such a case to resort to extrinsic evidence to remove the doubt." So that it seems clear that the supreme court placed its decision upon the fact that upon the face of the paper the ambiguity appeared. That court would never have held that there was any ambiguity on the face of the notes sued on in the third, fourth and fifth counts in the case at bar. Falk-y. Moebs, 127 U. S. 697; 8 Sup. Ct. Rep. 1319. In Smith v. Alexander, 31 Mo. 193, the action was on the fol- lowing note : " $500. St. Louis, Mo., July 22, 1855. Ninety days after date I promise to pay to the order of Messrs. Smith & Co., five hundred dollars, for value received, negotiable and payable without defalcation or discount. J. H. Alexander, Treasr.,Ohio «& Miss. R. R. Co." In that case Alexander, having been sued on his note, was allowed to show tliat he was treasurer of the said railroad, and tliat he gave the note simply as agent of said company. Judge Ewing saying : "A mere addition to the name of the party signing the contract cannot be regarded as a certain indicium that it was made on behalf of another. Where, how- ever, it is doubtful from the face of the contract whether it was intended to operate as a personal engagement of the party signing it or to impose an obligation on some third person as principal, evidence is admissible to show the character of the transaction." So we see that Judge Ewing places his ruling on the doubt appear- ing on the face of the note, whether it was the obligation of Alexander or the railroad company. Shuetze v. Bailey, 40 Mo. 134 CII. IV.] PARTIES TO BILLS AND NOTK^. ILL. CAS. 69, was an action on a contract for half the vakie of a partition wall. It was not a negotiable instrument at all, and in that case the contract was signed, " Kenneth McKenzie, Agent for Volney Stevenson, on the first part," so that case is not similar in any legal feature to the one at bar. In Musser v. Johnson, 42 Mo. 7t, action was brought on a written assignment of a certain cl lim against Johnson and others by Isaac H. Sturgion, president North Missouri Railroad Company, " attested with the seal of the com- pany, and couutersigued by George H. Blood, Sec'ry N. M. R. R. Co." It was held to be the act of the company. Tlie instru- ment was not negotiable, and the paper on its face clearly showed it was the intention to assign the railroad coniiiany's right. The next case we are cited to is Ferris c. Thaw, 72 Mo. 446. In that case the note or instrument read: " 84,000, St. Louis, Mo., Oct. 3d, 1870. Twelve monihs after date I promise to pay to the order of John W. Luke, treasurer, $4,000. without defalcation or discount, for value received, negotiable and paj'able at the Third National Bank of St. Lou's, with ten per ct nt interest from date, paj-able semi-annually. Charlie Tliaw, W. M. Polar Star Lodge No. 79. Indorsed: John W. Luke, Treasurer." In that case ihe defendants were sued as members of Polar Star Lodg.^ No. 79 of Ancient Pree and Accepted Masons. Defendant Thaw was its chief officer, with the title of worshipful master. In that case it was shown that the lo'lge was an unincorporated body; that it had borrowed this $4,000 for lodge purposes. The loan was reported to tlie lodge and was approved at its meeting, all the defendants voting therefor. It will be oliserved that in this case the ambiguity apj^ears on the face of the paper, and the court properly pirmitted evidence to show who were the real principals, and the members of the lodge which received the money were held on it. It is true the learned judge quotes from Story on Agency and uses language that might be construed to include any undisclosed priuci[)al ; but it is not praciicalile in every case to go over the entire law, and point out all the qu'.difications that might be mentioned, and when the law, as quoted, applies to the controlling facts in the case, it must be understood as referring to those facts. It is clear to us that the learned judge who dihvered that opinion had no intention of discussing the proposition now under considera- tion. The case was phiced upon the ground that, the lodge having failed to becoiie a corpor.tion, its members were liable as copartners ; and they were all shown to have ratified the act of the worshipful master, and his agency appeared on the paper itse'f, so liiat it was unnecessary to discuss the question as to the liability of a person on an instrument to which he was not a party. Martin v. Fewe.l, 79 Mo. 401 ; Richardson v. Pitts, 71 Mo. 128. It remains only to notice Pranklia Ave. Ger. Sav. Inst. V. Board of Kducation, 75 Mo. 408. That was an action on school bond, as follows: '* It is hen by certified that the special school district of the town of Roscoe, county of St. Clair, State 135 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. of Missouri, is indebted to , or bearer, in the sura of $500, payable * * * xhis bond is issued under and by virtue of an act of ttie legislature of Missouri entitled ' An act to authorize cities, towns, and villages to organize for schools with special privileges.' Jas. Smanger, Prest. Henry Swann, Secretary." Of course, on the face of this bond, it was the bond of the school- district, and no such question as the one at bar was before the court. In Snider v. Express Co., 77 Mo. 525, Snider was the consignor of the lost package, and this court held that, although the package was the property of his sister Louisa, Snider was the trustee of an express trust, and authorized to sue. No question of negotiable paper was involved in the case, so that it will appear from an examination of each of the cases relied on by respondents as sustaining the action of the court in admitting parol evidence to show that Jackson was in fact the president and purchasing agent of appellant, and executed the three notes described in third, fourth, and fifth counts in behalf of said com- pany, that they are all unlike this case, in that in each of them there was some addition, such as " president," " worshipful master," " treasurer," or some title designating an agency on the face of the paper itself, and in such cases the law permits the ambiguity to be explained ; and, indeed, in all other contracts except bills of exchange and negotiable promissory notes it is always permissible to show by parol evidence who is the real principal. Tied. Com. Paper, § 87, and authorities cited. But wherever the cases have been reviewed we think it will be found that, although the rule has been relaxed in those cases where the maker or drawer adds the word " agent," or " president," or the like after his name, yet in negotiable instruments, when the prin- cipal's name does not appear, he is not liable on the bill or note as a party to the instrument. Devendorf v. Oil Co., 17 W. Va. 135 ; Fuller v. Hooper, 3 Gray, 341 ; Williams v. Robbins, 16 Gray, 77; Pease v. Pease, 35 Conn. 131r;Keck'y. Brewing Co., 22 Mo. App. 187 ; Bartlett v. Tucker, 104 Mass. 339. What we have here said is not in conflict with another equally well-settled rule, that a party may bind himself by another than his true name, where he signs any instrument with intent to bind himself, or signs any name under which he is shown to have held himself out to the world and carried on business. In these cases he is as much liable as if he had signed his true name. Bartlett V. Tucker, 104 Mass. 339. With this view of the law, then, we hold the court erred in the admission of parol evidence to show that Jackson executed the three notes sued on in third, fourth, and fifth counts, and in giving instruction No. 8, as prayed by plaintiffs. In regard to the refusal to give tiie twenty-third in- struction asked by defendant, we think the court committed no error. We do not think any such issue was properly tendered the plaintiffs, nor do we think there was sufficient evidence to justify it, if properly pleaded. We are driven hy our views of the law to affirm the judgment of the circuit court on the first and second 136 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. counts, and reverse the judgment on the third, fourth, and fifth counts. Hunt f. Railway Co., 89 Mo. 607; 1 S. W. Rep. 127, and cases cited. All judges of division No. 2 concur. Executor as a Party to Bill or Note. Schmittler v. Simon, 114 N. Y. 176 (21 N. E. 172). Appeal from supreme court, general term, First department. Action l)y Mar}' Schmittler ogaiust Adam Simon, as an acceptor of a draft of which ihe following is a copy: "New York, Feb- ruary 26, 1877. Mr. Adam Simon, executor, will please pay to Johannes Schmittler, or his order, on the first da}^ of Jul}', which will be the year 1879, the sum of nine hundred doll., with seven per cent interest, to be paid, besides the amount, yearlj', July month, and charge the amount against me, and of my mother's estate. Wm. J. Scharin." Across the face was written : "Ac- cept, Adam Simon, Executor," and indorsed: " Pay to the order of Mary Schmiitler tbe amount of note. Johannes Schmittler." A trial resulted in a judgment of nonsuit, which was affirmed by the general term (29 Hun, 480, mem.)^ but reversed b}^ the coui't of appeals (5 N. E. Rep. 452). A second trial resulted in a verdict and judgment for the plaintiff for the amount of the draft, which was alfirmed by the general term (43 Hun, 640, me??i. ), and the defendant appeals. Bkadley, J. Upon the review of a former trial, where the question presented had relation only to the legal import of the terms of the instrument in question, it was held that it was a bill of exchange, anil that the defendant was, upon his acceptance, personally liable to the plaintiff as indorsee of tlie paper. 101 N. Y. 654 ; 5 N. E. Rep. 452. This is the review of the succeeding trial, and tiie admissibilit}' of evidence offered by the defendant is now the subject of inquiry. The defendant was executor of the will of R(>ginaScharen, deceased. She was the mother of the drawer of the draft. There is some evidence tending to prove that the draft was taken by the payee for the plaintiff, w ho was his wife, or with a view to transfer it to her. 'Ihe defendant offered evidence tending to prove that it was understood by the plaintiff and her husbantl that the draft should be taken upon the security of the drawer's interest in the estate of his mother; that when the draft was drawn it was understood between the drawer, payee, and the plaintiff that it was to be paid out of such interest in the estate ; also, that the defendant then said, in the presence of all those parlies, that he would not accept the draft, or become lial)le upon it personally, and that it was then agreed or said between them that the defendant would accept the draft in his capacity as executor, to be paid only out of the drawer's interest in his mother's estate. This evidence was offered in various forms on inquiry, and, upon objection of plaintiff's counsel, was excluded, aud exceptions taken. The general rule is that when an agree- 137 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. ment is reduced to writing, it, as between the parties, is deemod to merge and overcome all prior or contemporaneous negotiations and declarations upon the sul)ject, and that no oral evidence is admissible to var^^, explain, or contradict its terms. But it may be that it would have been admissible for the defendant to prove, if he could, that his acceptance was not to take effect as such until a certain event, then in the future, and that when the payee and the plaintiff received it they were advised of an arrangement to that effect. Seymour v. Cowing, 40 N. Y. 532 ; 4 Abb. Dec. 200 ; Benton v. Martin, 52 N. Y. 570 ; Reynolds v. Robinson, 110 N. Y. 654 ; 18 N. E. Rep. 127 ; Wilson -y. Powers, 131 Mass. 539 ; Walhsv. Littell, 11 C. B. (n. s.) 368. In this connection refer- ence may also be made to the proposition that the purpose for which a written contract is made may rest in a collateral oral ar- rangement, which may be shown, to the effect that the design of it is different from that which its terms alone may indicate. Grierson v. Mason, 60 N. Y. 394 ; Juillard v. Chaffee, 92 N. Y. 529 ; Chapin v. Dobson, 78 N. Y. 74. These propositions are not applicable when the conclusion is required that the writing contains the final consummation of the entire agreement between the parties. While the evidence so offered may bear the construction that there was an understanding between the parties to the draft that the liability of the defendant on the acceptance was dependent upon an ascertained interest of the drawer in the estate of his mother, and in that event to be incurred to the extent oul}'- of such interest, not exceeding the amount of the draft, we think such evidence cannot fairly be con- strued as tending to prove a collateral agreement suspending the inception or operation of the acceptance until some future event, or as tending to sliow that it was made for a purpose independent of the import of its terms, within the rule before mentioned, and therefore it is unnecessary to consider the question of the appli- cabiUty of those propositions to negotiable paper. The consideration of a contract, in whatever form it may have been, may, as between the immediate parties to it, be the subject of inquiry, and, in an action by the payee upon a note made by an executor or administrator, on account of a debt which his testator or intestate left unpaid, such fact, and that the assets of the estate weie insufficient to pay the note, may be shown as a defense, wholly or partially, as it may appear that there was an entu'e or partial want of assets to pay the debt represented by the note. Bank v. Topping, 9 Wend. 273; 13 Wend. 557. The question in such case is one of consideration for the promise, evidenced by the note, supposed to have been founded wholly upon the assets of the estate which the maker represented. While the maker and payee of a promissory note, and tbe drawer and acceptor of a bill of exchange, are immediate parties to the paper, that relation of privity does not exist between the payee and acceptor, and, as between them alone, the want of consider- ation is no defense ; but the acceptor, for the purpose of his 138 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. defense in that respect, must go further, and prove that there was no consideration as between the drawer and payee. There was no purpose indicated in the evidence offered to do that, and therefore it does not seem to have been competent for that purpose. The question now is whether the e\'idencc so offered was admis- sible for anj' purpose. On tiie former review, in referring to the contention that the draft was drawn upon a specific fund, the court said: "Considering the question, as we are comijelkd to do, from the language of the instrument alone, we are unable to agree to the interpretation that the draft was pa3'able only from a particular fund," — and added: "While the point is not free from doubt, we think a reasonable consi ruction of the draft favors the conclusion that it [the fund] is mentioned only ns a source of reimbursement;" and, " if the language of the paper could be considered at all ambiguous, it was tlje duly of the defendant to limit his liability by apt words of acceptance when it was presented to him, but, as it is, he has unqualifii dly prom- ised to pay a fixed and definite sum at a specified time, and we think should be held to the contract wdiich other parties were authorized, by his acceptance, to infer he intended to make." It does not appear what view the court may have taken of tlie admissibility of evidence of the fact, and of the fact itself, if it had tlien appeared, that the pavee and the plaintiff, when Ihey received the draft, had been advised that it was drawn and accepted to be paid out of the drawer's interest represented by the defendant as executor. The queston tliere was solely one of construction of the instrument as represented by its terms, and all that the court there necessarily deteimineci was that it did not appear b^^ the terms of the draft that it was drawn ui)on a particular fund. That character wouhl not be given to the draft upon doubtful construction, as against the plaintiff, wiio was presumed to be a botia fide holder of it. The fact that the drawee was. in the draft, designated as executor, and that he added the like designation to his name subscribed to the accept- ance, would not, of itself, import any other than a personal relation of the defendant to the instrument, as the word " Execu- tor" annexed to his name would presumptively be treated as merely descriptive of the person, but it migiit be given some substantial significance by other provisions, if those were such as to require it in the instrument, and in a proper case this might be aided by extrinsic facts. The defendant, as executor, represented whatever interest the drawer of the draft had in the estate of Mrs. Scharen, deceased, and such interest must be obtained by him or whomsoever shonld become entitled t )it through the executor. Tliat situation would have rendered a d'aft upon the latter for that purpose, and his acceptance so qualified, legitimate. In that view it would seem that if the unclerstanding of the parties to the draft and the holder of it was such, the 2^^>^n<( fcicie import of the word " exec- ISO ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV. utor " might be overcome by evidence to the effect that it was used to qualify the liability of the defendant, and to show tliat it was assumed in his representative capacity only. This rule is applicable to other relations of a representative character, in like manner indicated, alihough the contract docs not, in its terms, purport to have been made by or for the prin(i[)al, otherwise than by way of designation of the representative character of the person making it. The like presumption exists in that as in this c: so, that the added designation is descriptio inrsoiim; and the right to show the fact to be otherwise is d' pendent upon the knowledge of the other i)arty to the contract that such was the purpose when it was made. Rrockway -y. Allen. 17 Wend. 40; Paddock V. Brown, 6 Hill, 530; Ilicks v. Hinde, 9 Barb. 528; Horton V. Garrison, 23 Barb. 176; Bank v. Leonard, 40 Barb. 136 ; Bowne v. Doiigla-s, 38 Birb. 312 ; Lee v. M. E. Church, etc., 52 Barb. 116 ; Babcock-u. Beman, 11 N. Y. 200. Insucli case it is open to explanation by evidence to show that the purpose, as understood by the parties to the transaction, was that the party so executing the contract intended to assume no personal liability. (HoodiJ. Hallenbe k, 7 Hun, 362-365, and cases before cited), and, when aided by sucii evidence, the fact that a payee in a note who indorses it, and a drawee in a draft who accepts it, are, as well as in the iudor-ement and :i(ce|)tance, in that manner desig- nated, may be entitled to S'me significance. Bowne t). Douglass, supra ; Babcock v. Beman, 1 1 N. Y. 200. The distinction between the cases referred to and the present one is that there was a principal wh' se representative made the contract, which was a fact essen- tial to the application of such rule upon the question of liability, while here the defendant as executor had no principal party to charge with liability upon his contract, and coul I represent no person as such. But he had duties to perform as executor, in relation to the estate of his testatrix, among which was the duty to render his account, and pay over, for the benefit of persons interested, such shares as they were entitled to from the estate. And if it was intended by the draft and acceptance, and such construction can, by aid of extrinsic facts, be allowed, that the defendan', shoidd be charged in the line of his representative duty merely, it would follow that he would be required to pay to the holder of the instrument to the extent of the sum mentioned, from the interest of the drawer in the estate, if it were sufficient for the purpose. That would be a proper lia- bility of the defendant as such trustee, and the drawer and payee might depend upon tlie existence of that fund for paj'ment. In the case of agency there is no fund, but a principal, to charge. It is difficult to see any well-founded distinction for the applica- tion in the two classes of cases of the rule which permits the Introduction of evidence to show the intention and purpose in that respect of the parties to and interested in the transaction, who were advised of such purpose when they assumed their relation to the contract. 140 CH. IV.] PARTIES TO BILLS AND NOTES. ILL. CAS. In Pinney v. Administrators, etc., 8 Wend. .500, this question did not arise. Tin re the administrators had been charged by judgment upon their bond to a third party, on account of a debt due from their intestale, and which they alleged as a liability of the estate, and a d( ficiency of a'-sets, by waj^ of defense. The replication charged that Ihe defendants had sufficient assets to pay the judgment and the plaintiffs claim, etc. The question arose upon the denuirrer to the replication. The plaintiff had judgment, with leave to the defendant to rejoin. The court held that the judgment upon the bond of the administrators did not bind the estate, although the bond purported to have been made by them in their representative capacit3\ It is evident, if they had any defense within tlie case of Bank v. Topping, supra, it did not survive the recovery of the judg- ment upon it. If tlie presumption arising out of the prima facie relation assumed by the defendant to the draft in question pre- vail, he must be pirsoiinlly liable within the doctrine of the case last cited. We are not prepared to say that in the present case the defense will be aided by the words, " against me and b}^ my mother's estate," in the draft, or any construction which may he put upon them. There is certainly some obscurity as to the purpose for which they were used, and they may be said to pre- sent some ambiguity. F> r the purpose of the construction of the instrument, no words can be added or taken from its pro- visions ; but where the words used, in their application to an instrument of which they are a part, are not entirely intelligible, parol evidence of the circumstances attending its execution may, as between the parties, be admissible to aid in the interpretation in its application of the language so used. Fish v. Hubbard, 21 Wend. 001-0(52; Fields. Munson, 47 N. Y. 211. For the reasons before given, we think the rejected evidence referred to should have been receivid, as bearing upon the under- standing of the relation and the character of liability the defend- ant assumed by its acceptance of the draft. It is deemed admissible, in view of the designation which was given to the defendant in the draft, and in his acceptance of it, and by what appears on the face of the draft. Hicks v. Ilinde, 9 Barb. 531 ; Powder Co. V. Siiisheiner, 48 Md. 411. This view is taken upon the assumption, as the offered evidence indicated, that the plain- tiff and lur husband were advised wliiu they received the draft of the facts embraced in the offers of proof. Otherwise the draft, as to the plaintiff, must, as on the former review, be treated as a negotiable bill of exchange, and no other interijretation can, l)y evideiice of extrinsic circumstances, be given, nor for that pur- pose will the evidence be admissible. The fact that the draft was payable at a particular time and place may be a circumstance entitled to consideration upon the merits, but they do not have the conclusive effect claimed for them by the plaintiff's counsel, and the same be said in respect to the payments heretofore made by the defendant of interest upon the amount of the draft. We 141 ILL. CAS. PARTIES TO BILLS AND NOTES. [CH. IV^. do not consider the effect of the acceptance by way of admission of assets in his hands belonging to the estate, or the force to which it may be entitled as such. The only question now here arises upon exceptions to the exclusion of evidence, which seem to have been well taken, and for that reason the judgment should be reversed, and a new trial granted, costs to abide the event. All concur, except Vann, J., dissenting. 142 CHAPTER V. THE CONSIDERATION, AS IT AFFECTS BONA FIDE OWNER- SHIP. Section 50. Necessity of consideration — What instruments import a consideration. 51. Between whom question of consideration may be raised — Bona fide holders. 52. Real and apparent relation of parties. 53. One consideration supporting the obligations of more than one. 54. Accommodation paper. 55. Money consideration — Contemporary loans, future ad- vances and existing debts. 5G, AYhen is a pledgee a bona fide holder for value. § 50. Necessity of consideration — What instruments import a consideration. — It is the universal rule of the En- glish and American law that no executory contract can be enforced in the courts, unless it he supported by a valuable consideration. And the rule applies to bills and notes with- out qualilication ; except that by the commercial law, every species of commercial paper, bills, notes, checks, etc., im- port a consideration. Whenever, therefore, a bill, note or check, is proven to have been duly executed and delivered, a sufficient consideration for such a contract will be presumed, until the want of consideration is affimatively established.^ And, although it was once hold in England to be necessary to the validity of negotiable instruments that a considera- tion 1)0 acknowledged in it, usually by the employment of the phrase " for value received," it is now generally held that no such acknowledgment is necessary, unless local 1 Bristol V. Warner, 19 Conn. 7; Townsend v. Derby, 3 Met. 3G3; Carnwright v. Gray, 127 N. Y. 92 (27 N. E. 835) ; Hughes v. Wheeler, 8 Cow. 77; Foster V. Paulk, 41 Me. 425; Ilartman v. Shaffer, 71 Pa. St. 312; Campbell v. McCormac, 90 N. C. 441; lugersoll v. Martin, 58 Md. 67 (42 Am. Rep. 322); Martin u. Stone (N. H.), 29 A. 845; Mat- tesou V. Morris, 40 Mich. 52; Wilson v. Wilson, 26 Oreg. 315; 38 P. 189. 143 § 51 THE CONSIDERATION. [CH. V. statutes, regulating such paper, expressly require it.^ This presumption of consieleration does not attach to every kind of commercial obligation. It applies only to sealed instruments, ^ and negotiable or quasi-negotiable paper. While the omission of the words of negotiability, from what would otherwise be a negotiable bill or note, will not destroy this presumption of consideration;^ the presumption does not apply to a bill or note, which is altogether non-negotiable, because it lacks one or more essential elements of negotiable paper ; as, for example, where the time of payment, or the amount payable, is uncertain.* In such cases, the presumption will arise only from an express acknowledgment of the consideration.^' The presumption of consideration applies, not only to the original note or bill, but likewise to all indorsements of the same,^ and to acceptance of bills. ^ § 51. Between whom question of consideration may be raised — Bona fide holders. — It is a general rule of the law of Commercial Paper, that defenses, not apparent on the face of the instrument, can be set up against only the original parties and those subsequent indorsees and holders who take the instrument with notice of the defense, or without value. The illegality or want of consideration is one of those defenses, which do not generally appear upon '■ See ante, § 24. 2 Conway v. Williams, 2 Hun, G42; Webster v. Bailey, 118 N. C. 193 (24 S. E. 9). 3 Haydock v. Lynch, 2 Ld. Baym. 1553; Averett's Adm'x v. Booker, 15 Gratt. 163 (76 Am. Dec. 203). And see Coursin v. Ledlie, 31 Pa. St. 506. 4 Atkinson v. Manks, 1 Cow. 691; Bilderbach v. Burlingame, 27 III. 338; Franks. Irgins, 27 Minn. 43 (6 N. AV. 380); Bristol v. Warner, 19 Conn. 7; Birclebach v. Wilkins, 22 Pa. St. 26. 5 Bourne v. Ward, 51 Me. 191; Courtney v. Doyle, 10 Allen, 122; Wingo V. McDowell, 8 Rich. 446. But see contra, Stewart w. Street, 10 Cal. 372. 6 Dumont v. Williamson, 18 Ohio St. 515 (98 Am. Dec. 186); Con- nerly v. Planters &c. Ins. Co., 66 Ala. 432; Johnston v. Dickson, 1 Blackf. 256. 1 Kendall v. Galvin, 15 Me. 131 (32 Am. Dec. 141). 144 CH. v.] THE CONSIDERATION. § 51 the face of a bill or note. Such a defense would therefore prevail in any action l)et\ve(>n the originul ))arties above described, between maker and payee of a note, between the drawer or acceptor and payee of a bill, etc.^ But, in order that want of consideration may be a good de- fense to an action on the note or bill by an indorsee or other subsequent hfdder, it must be proven that the subse- quent holder is not a hona fide holder, i. e., a holder for value and without notice.- An exception to this general rule is maintained by most of the cases in respect to the defense of illegality of consideration. Where the consid- eration is declared by decisions of the courts, or by statute, to be simply void on account of illegality; a bill or note, based upon such illegal consideration, would be void as to 1 Hunt V. Mason, 21 D. C. 181 : Preble v. Hunt, 85 Me. 267 (27 A. 151) ; Eastman v. Shaw, C5 N. Y. 522; Shaw v. Cutwater, 77 Him, 87; Thomas V. Watkins, 10 AVis. 6W; Gibert v. Sie^s, 40 La. Ann. G07 {\ So. 874); Bank of Ohio Valley v. Lockwood, 13 W. Va. 392 (31 Am. Rep. 768); Pettyjohn v. Liebscher, 02 Ga. 149 (17 S. E. 1007); Toombs r. West, 94 Ga. 280 (21 S. E. 522); Third Nat. Bk. v. Harrison, 3 McCrary, 316; Pax- son V. Nields, 137 Pa. St. 385 (20 A. 1016); Ingersoll v. Martin, 58 Md. 67 (42 Am. Rep. 322) ; Schroeder v. Nielsen, 39 Neb. 335 (57 N. W. 993); Williams v. Forbes, 114 111. 171 (28 N. E. 46.S) ; Richardson v. Richard- son, 148 III. 563 (a6 N. E. 608) ; Hanks v. Brown, 79 Iowa, 560 (44 N. W. 811); Merril v. Packer, 80 Iowa, 543 (45 N. W. 1076). But want of con- sideration between drawer and acceptor, or between the acceptor and payee, is no defense if he has paid a valuable consideration to the drawer. Hoffman v. Bmk of Milwaukee, 12 Wall. 191. Nor can the acceptor raise the ques ion of failure of corsideration, where there is a consideration between himself and the drawer of the bill, and there is no consideration between the drawer and the payee. Hunt v. Johnston, 96 Ala. 130 (11 So. 387). 2 Sweetser v. French, 13 Met. 262; Kellogg r. Curtis, 69 Me. 212 (31 Am. Rep. 273); Goodman v. Simonds, ^0 How. 343; Collins v. Gilbert, 94 U. S. 753; Matthews v. Crosby, 56 N. H. 21; Mechanics' &c. Bk. v. Crow, CO N. Y. 85; Har','er r. Worrall, 69 N. Y. 370 (25 Am. Rep. 206) ; Sloan r. Union Banking Co., 67 Pa. St. 470; Nat. Bk. of America v. Nat. Bk. of 111 , 164 111. 503 (45 N. E. 968) ; Hunter v. Parsons, 22 Mich. 96; Gotzian v. Sleiukamp, 53 Minn. 462 (55 N. W. 602) ; Kahm v. King Bridge Mfg. Co., 16 Kan. 530; Elhridge v. Gallagher, 55 Miss. 458; Rea v. McDonald (Minn. '97), 71 N. W. 11; New v. Walker, 108 Ind. 365 (9 N. E. 386) ; Van Meter r. Spurrier, 94 Ky. 22 (21 S. W. 337); Fernekes v. Bergenthal, 69 Wis. 464 (34 N. W. 238) ; De Long v. Barnes, 45 Ohio St. 237 (12 N. E. 735.) 10 145 § 51 THE CONSIDERATION. [CH. V. the original parties, and others who take it with notice or without value, but it could be enforced by a bona fide holder. ^ But where the consideration is made illegal by statute, and the statute expressly declares the contract founded on such consideration to be absolutely void, the language of the statute is given its full effect; and the courts have held that the defense will prevail in such cases, even against bona fide holders of negotiable papers. ^ The same effect is produced on the rights of bona fide holders, as well as on the rights of the immediate parties, whether the ille- gality affect the whole or only a part of the consideration, where the consideration is one and indivisible. But where a bill or note is given for two distinct and separate consid- erations, the instrument is void or voidable only^ro ianto, where only one of the considerations is illegal.^ So, also, where the partial invalidity is due to a partial failure or an innocent misstatement of the amount, the note will be invalidated pro tanto.^ The question, on whom rests the burden of proof of bona fide ownership, where the defense is want, failure or illegality of consideration is discussed in a subsequent chapter.* 1 Holmes v. William?, 10 Paige, 326 (40 Am. Dec. 250) ; Grimes v. Hillenbrand, 4 Hun, 354; Bangs v. Hornick, 30 Fed. 97; Doolittle v. Lyman, 44 N. H. 608; Fay v. Fay, 121 Mass. 561 ; Gorham v. Keyes, 137 Mass. 583; Sondheim v. Gilbert, 117 Ind. 71 (18 N. E. 776); Town of Eagle u. Kohn, 84 111. 292; Crawford v. Spencer, 92 Mo. 498 (4 S. W. 713); Lynchburg Nat. Bank v. Scott, 91 Va. 652 (22 S. E. 487) ; Corbin V. Wachhorst, 73 Cal. 411 (15 P. 22); Bradshaw v. Van Valkenburg, 97 Tenn. 316 f37 S. W. 88). 2 Hatch V. Burroughs, 1 Woods, 439; Bayley v. Tabor, 5 Mass. 286 (4 Am. Dec. 57) ; Weed v. Bond, 21 Ga. 195; Woods v. Armstrong, 54 Ala. 150 (25 Am. Rep. 071); Tatum v. Kelley, 25 Ark. 209 (94 Am. Dec. 717); Glen V. Farmers' Bank, 70 N. C. 191 ; Union Bank of Rochester v. Gil- bert, 83 Hun, 417; Ramsdell v. Morgan, 16 Wend. 574; Hunt v. Knicker- bocker, 5 Johns. 372 ; Griffiths v. Wells, 3 Benio, 226 ; Union Nat. Bank v. Brown (Ky. '97), 41 S. W. 273. 3 Brigham v. Potter, 14 Gray, 522; Saratoga Bank v. King, 44 N. Y. 87; Guild V. Belcher, 119 Mass. 257; Widoe v. Webb, 21 Ohio St. 431 (5 Am. Rep. 664) ; Barnard v. Backhaus, 52 Wis. 593 (6 N. E. 252; 9 N. E. 595) ; Everhart v. Puckett, 73 Ind. 409. 4 Phelps Dodge & Palmer Co. v. Hopkinson, 61 111. App. 400. ^ See post, chapter IX. on Rights of Bona Fide Holders. 146 CH. v.] THE CONSIDERATION. § 52 If the consideration of an original note or bill is illegal, the illegality will taint the renewal of the instrument, in every case where the entire consideration is illegal; and where only a part of the consideration is illegal, the renewal will 8till be subject to the defense of illegality ^jro tanto, un- less the illegal part of the consideration has been excluded from the renewal. And the same rule governs, where one note or bill is given in renesval of two or more original bills or notes, one of which is founded upon an illegal con- sideration.^ But where the proceeds of the negotiation of the new note are applied without the knowledge of the payee to the settlement of the old note, which is tainted by fraud or illegality of the consideration, the second note is valid. ^ § 52. Real and apparent relation of parties. — The real relation of the parties does not always a[)pear on the face of the paper; and whenever the apparent relation of the parties differs from the real, it is always competent for the purj)()se of admitting or excluding the defense of con- sideration, to show by parol evidence what the true rela- tion of the parties is. Thus the name of the payee and in- dorsee is often left blank, and the blank filled up afterwards with the name of a subsequent holder, thus making him appear as the payee or prior indorsee. In all such cases, it is competent for such a person to show that he is not the original payee or immediate indorsee, and thus exclude the defense of want or illegality of the consideration from his actio'.i on the instrument.^ It may also be shown that the drawer, instead of the acceptor, is the primary debtor, thus 1 Doty V. Knox Co. Bank, 10 Ohio St. 133; Alabama Nat. Bank v. Hal- sey, 109 Ala. 19G (19 So. 520); Wugner v. Biering, 73 Tex. 89 (11 S. W. 155) ; Exeter Nut. Bank v. Orchard, 39 Neb. 485 (58 N. VV. 144) ; Kash v. Farley, 91 Ky. 314 (15 S. W. 8C2). 2 Buchanan v. Drovers' Nat. Bank, 55 Fed. 223; 6 U. S. App. 5G6; Ross V. Wehsttr, G3 Conn. G4 (2G A. 476). See Cohn v. Ilusson, 113 N. Y. CG2 (21 N. E. 703). 3 II«)ffinau V. Bank of Milwaukee, 12 Wall. 181; Nelson v. Cowing, 6 Hill, 33G; Ahlrich v. Stockwell, 9 Ahen, 45; Rich v. Starbuck, 51 Ind. 87; Glascock V. Robards, 14 Mo. 350 (55 Am. Dec. 108). 147 K § 53 THIC CONSIDERATION. [CH. V. rebutting the general piesiiinption that the acceptor is the primary debtor, where the question arises between the immediate parties, the drawer and the acceptor. But as to all other parties, the presumption, that the acceptor is the primary debtor, is conclusive. ^ In no case can the real 1 elation of the parties be shown to be different from their apparent relation, as against a subsequent bona fide holder.^ § 53. One considei'ation supporting the obligations of more than one. — Not only may the promise of one be supported by a consideration moving to another, as in the case of a guarantor ; but the same consideration will sup- port the promises of all who are induced thereby to assume obligations. Co-makers of bills or notes, whether as joint- principals, or as principal and surety, are almost invariably bound bv one consideration, -"^ This is likewise the case with one whoindorses f'oranother's accommodation, if made when or before the loan was negoti;itod ; the indorsement consti- tutes a part of the original agreement and needs no independ- ent consideration.* But in every case, where parties join in the assumption of the same liability as co-makers of a note, or of different liabilities arising out of the same transaction, as maker and indorser ; the promises of all must be made before the consideration is executed, in order that the one consideration may support all the promises. An executed consideration cannot support a subsequent 1 Turner, Wilson & Co. v. Browder, 5 Bush, 216; Trego v. Lowery, 8 Neb. 238. 2 Munroe v. Bordier, 8 C. B. 862; U. S. Nat. Bank v. First Nat. Bank, 64 Fed. 985; 13 C. C. A. 472; South Boston Iron Co. v. Brown, 63 Me. 139 ; Lea v. Cassen, 61 Ala. 312 ; First Nat. Bank v. Weston, 88 Hun, 29. 3 Kinsman v. Birdsall, 2 E. D. Smith, 395; Hoxie v. Hodges, 1 Oreg. 251; Hapgood v. Policy, 35 Vt. 649; Rutland v. Brister, 53 Miss. 683; McClelland v. McCle'hmd, 42 Mo. App. 32. 4 Austin V. Bovd, 24 Pick. 64; Robertson v. Rowell, 158 Mass. 94 (32 N. E. 898); Powers v. French, 1 Hun, 582; Leonard v. Sweetzer, 16 Ohio, 1; Seyfert v. Edison, 45 N. J. L. (16 Vroora) 393; Brenner v. Guuder- sheimer, 14 Iowa, 82; Hoover v. McCormick, 84 Wis. 215 (54 N. W. 505) ; Emery V. Hobson, 62 Me. 578 (16 Am. Rep. 513; ; North Atchison Bk. v. Gray, 114 Mo. 203 (21 S. W. 479) ; Leverone v. Hildreth, 80 Cal. 139 (22 P. 72). 148 CH. V."I THE CONSIDERATION. § 54 promise. If, therefore, after the debt is contracted and the note delivered, the maker should procure the signature of another on such note, whether as co- maker, suiefy or indorscr, this later sipjnature does not create any liability in respect to the parlies in immediate privity with the obligor, unless it is supported by a fresh consideration.^ Where, however, the subsequent indorse- ment or signing of the paper is made in performance of a prior promise to the payee, to so indorse the pai)er as an additional inducement for the loan or other consideration of the note, it is held that no additional consideration is needed to hold the indorser liable. And the indorser will be bound by his subsequent indorsement, under these circum- stances, whether the prior promise of a subsequent indorse- ment was made b}' him or by the maker. It is the fact, that the payee made his loan in reliance upon this promise of an additional indorsement, and not the participation of the indorser in making the promise, or his knowledge of the promise, which makes the original consideration suflS- cient to support the indorsement.^ § 54. Accommodation paper, — When one lends his mercantile credit to another, by signing his name to an instrument in the character of maker, drawer, acceptor or indorser; the instrument, so far as such signature is con- cerned, is called accommodation paper. The obligation, arising out of this signature, is assumed fv)r the accom- modation of another, and is not su[)portes. 216 (7 Am. Rep. 511). 2 Israel v. Gale, 77 Fed. 532; 23 C. C. A. 274; Austin v. Boyd, 24 Pick. 64; Kayser v. Ilodopp, 116 Ind. 428 (19 N. E. 297); Grant v. Elli- cott, 7 Wend. 227; Nat. Bank of N. A. v. White, 19 App. Div. 390 (46 N. Y. S. 555) ; Bro'oks v. Hay, 23 Hun, 372 ; First Nat. Bk. v. Alton, 60 Conn. 402 (22 A. 1010); Seyfert v. Edison, 44 N. J. L. (16 Vroom) 393; Waite V. Kalmisky, 22 111. App. 382; First Nat. Bk. v. Adam, 138 111. 483 (28 N. E. 955); Holmes v. Bemis, 124 III. 453 (17 N. E. 42); Rea v. McDon- ald (Minn. '97), 71 N. W. 11 ; Weill V. Trosclair, 42 La. Ann. 171 (7 So. 232) ; Thatcher v. West R ver N. Bk., 19 Mich. 196; PhlUer v. Patterson, 168 Pa. St. 468 (32 A. 26); Norfolk N. Bli. v. Griffln, 107 N. C. 173 (11 S. E. 1049). 150 CH. v.] THE CONSIDERATION. § 55 pledge is given for a contemporaneous loan,^ But where the accommodation paper is pledged for an antecedent or existing debt, a fresh consideration is needed to bind the accommodation indorser, such as the surrender of the ohi note or of coHateral security.'^ § 55. Money consideration — Contemporary loans, future advances and existing debts — The most common consideration of contracts in general, and of commercial l)aper in particular, is money. There can be no doubt as to the sufficiency of a money consideration, where the money is paid over simultaneously with the negotiation or delivery of the bill or note.^ If the promise to pay in the future, to make future advances of goods or money, is a binding obligation, the note given or indorsed in considera- tion of this promise is sup[){)i ted by a consideration equal in amount to the advances, which the payee or indorsee has bound himself to make,* A common case of this kind is the deposit of a note or bill with a banker, to be discounted and drawn against. If the right to draw against it is made absolute, it is a sufficient consideration to make the bank or banker a holder for value. ^ But where the obligation to honor drafts against the amount of the note or bill is not absolute, the bank or banker is a holder for value; only to the amount of the drafts that had been honored, when » Atlas Bank v. Doyle, 9 R. I. 7G (98 Am. Dec. 3G8; 11 Am. Rep. 219); Gordon v. Boppe, 55 N. Y. 6G5; Appleton v. Donaldson, 3 Pa. St. 386; Washington Bank v. Krura, 15 Iowa, 53; Buchanan v. International Bank, 78 111. 500. 2 Depeau v. Waddington, 6 Whart. 220 (36 Am. Dec. 216); Smith v. Weston, 88 Ilun, 25; Nat. Un. Bank v. Todd, 132 Pa. St. 312 (19 A. 218). But see post, § 50, for a full discussion of the sufficiency of the consider- ation in the pledge of commercial paper. 3 Griswold v. Davis, 31 Vt. 390; Curtis v. Mohr, 18 Wis. 645. * Marskey v. Turner, 81 Micli. 62 (45 N. W. 644) (note for an insur- ance premium); Smith v. Gilku, 52 Ark. 442; 12 S. W. 1073; (uole for shares in a proposed mining corporation). 6 Bank of New York v. Vanderhorst, 32 N. Y. 553; Piatt v. Beebe, 67 N. y. 339; Dymock v. Midland Nat. Bank, 67 Mo. App. 97; Benton v. Germ. -Am. Nat. Bk., 122 Mo. 332 (26 S. W. 975); U. S. Nat. Bk. v. Mc- Nair, 114 N. C. 335 (19 S. E. 361). 151 § 55 THE CONSIDERATION. [CH. V. the question of bona fide ownership is raised and con- tested. ^ In respect to the sufficiency of a consideration, where it consists of an existing debt ; it seems to be well settled that the holder of a note or bill made or indorsed to him, in full and absolute payment or satisfaction of an existins: debt, — whether it be the debt of the maker or drawer, or indorser, or the obligation of some third person, who is a total stranger to the commercial paper — can claim to be a holder for value. And where the existing debt is in the form of an existing note or bill, such note or bill must be surrendered or canceled. In every case where the right of action on the existing debt is absolutely surrendered, there can be no doubt that the new note or bill, given or indorsed in payment or renewal of the old note or bill or debt, is supported by a sufficient consideration, and makes the payee or indorsee a holder for value. ^ But if the note or bill is negotiated only as a conditional payment of the existing debt, and the creditor does not surrender his cause of action on the old debt, until it can l)e ascertained whether the instrument taken in payment is paid or not ; it is held in some of the States, that the creditor is not a holder for value, and is not protected ntrainst the equitable defenses, from which the bona fide holder for value can 1 Thompson v. Sioux Falls N. Bank, 150 U. S. 231; McBride v. Farm- ers' Bank, 26 N. Y. 450; Benton v. Germ. -Am. Nat. Bk., 122 Mo. 332 (26 S. W. 975); Shawmut Nat. Bmk v. Manson (Ma«s. '07), 47 N. E. 196. 2 Piatt V. Beebe, 57 N. Y. 33D ; Mechanics' B:nk v. Crow, 60 N. Y. 85; Cowing V. Altman, 71 N. Y. 435 (27 Am. Kep. 70); Mix v. National Bank, 91 111. 20 (33 Am. Rep. 44); Manning v. McClure, 36 111. 490; Bromley o. Hawley, 60 Vt. 46 (12 A. 220); Howard v. Hinckley, &E. Iron Co., 64 Me. 93; Wooky v. Cobb, 165 Mass. 503 (43 N. E. 497); Israel v. Gale, 77 Fed. 532; 23 C. C. A. 274; Swift v. Tyson, 16 Pet. 1; Taylor V. Clark (Tenn. Ch. App.), 35 S. W. 442; Gates v. Union Bank, 12 Heisk. 325; Hobson v. Hassott, 76 Cal. 203 (18 P. 320) ; Brown ■0. North, 21 Mo. 528; Langford v. Varuer, 65 Mo. App. 370; Lundberg V. N. W. Elevator Co., 42 Minn. 37 (43 N, W. 685); McCabe v. Caner, 68 Mich. 182 (35 N. W. 901), The mere failure to surrender the original note docs not invalidate the renewal. Murphy v. Carey, 89 Hun, 106; French v. French, 84 Iowa, 655 (51 N. W. 145). See post, Chapter XVII. On Payment. 152 CII. V.j THE CONSIDERATION. § 56 claim exemption.^ The negotiation or indorsement of a note or bill under those circumstances differs little, if any, from a pledge of the n(»lo or bill as a collateral security. Under what circumstances a pledge is held to be a holder for value, is explained in the next section. § 5(3. When is a pledgee a bona fide holder for value. — A bill or note may of course be the subject of a pledge, like any other kind of personal property. And the rights of the pledgee in the note, bill or other commercial paper, are the same as where the subject-matter of the pledge is corporeal.'^ In fact, the subject-matter of most pledges given in the transaction of the business is commercial paper. The only diflSeult question, to be met with in the consideration of the pledge of negotiable instruments, and the one vehich distinguishes them from all other kinds of pledges, is to what extent and when is a pledgee of a note or bill a boini Jide holder. The claim of the pledgee to the character and protection of a bona fide holder depends upon the sufficiency of the consideration which supports the pledge. But he is a bona fide holder only to the amount of the debt for which the pajjcr is pledged.'^ No authority is needed for the proposition that the pledgee is a bona fide holder, where he takes the note or bill as collateral security for a contemporaneous loan, or for future ad- vances. The difficulty arises when the pledge is given for an existing debt. It is probably safe to say that the majority of the cases in this country require proof in such cases of a fresh consideration, in order to make the pledgee a hoMer for value ; although there are some cases, which either deny the necessity of a fresh consideration, or claim the presence of such consideration where other cases would deny its existence. 1 Phoenix Ins. Co. v. Church, 81 N Y. 218 (37 Am. Rep. 494) ; Garner V. Coheny (Ga.), 24 S. E. 851; Bank of Commerce v. Wripht (Ark. '97), 40 S. W. 81; Van Burkleo v. S. W. Mfg. Co. (Tex. '96), 39 S. W. 1085. * See post, § , and Tiedeman on Sales, § 274. » Yellowstone Nat. Bank v. Gagnon (Mont. '97), 48 P. 762. 153 § 56 THE CONSIDERATION. [CH. V. All the cases seem to agree that there is a fresh consid- eration, sufficient to make the pk-dgee a bona Jide holder for value, where, on receiving such pledge, other collateral security is surrendered ;i or where the original debt is ma- tured, and the pledgee expressly agrees to give an extension of time, whether he renews the original obligation or only promises to forbear to sue for a given time.^ On the other hand, some of the cases maintain that the agreement tov an extension of time nmst stipulate some definite period of extension; and that there is no fresh consideration, where the agreement not to sue is indefinite as to time ; as, for example, where the cieditor promises " to allow the loan to remain a little longer." '^ To this pro[)osition, however, other cases are opposed, holding not only that an indefinite extension of time is a sufficient consideration to niake the pledgee a holder for value; but also that an agreeuK nt for an indefinite exten- sion of time will be im[)lied in every case of pledge, where it is given after maturity; on the ground, that the giv- ing of a pledge under those circumstances cannot be rationally explained on any other hyi)othcsis than that both parties anticipated an extension of the time of pay- ment, or at least an indefinite forbearance to sue. These cases maintain, therefore, that in every case, where the pledge is given alter maturity of the principal debt, there 1 Mead 17. Merchants' Bu k, 25 N. Y. 143; Park Bank ». Watson, 42 N. Y. 490 (1 Am. Rep. 573); Djkmau v. Norihridgo, 3G N. Y. S. 962 ; 1 App. Div. 26; Heath v. Silverlhoin Mining Co., 39 Wis. 146; First National Bank v. Bentley, 27 Minn. 87 (3 N. W. 422); JNIathias v. Kirsch, 87 Me. 9 (33 A. 19); Nichul-i & Sheppaid Co. v. D.drick,61 Minn. 513 (63 N. W. 1110); Bank of Commerce v. Wright (A:k. '97), 40 S. W. 81. 2 Swift V. Tyson, 16 Pet. 1; Goodman v. Simonds, 20 IIow. 243; Worcester Nat. Banku. Cheney, 87 111. 002; Mix v. Nat. Bunk of Bloom- ington, 91 111. 20; Paulette v. Brown, 40 Mo. 52; Biuk ( f Commerce v. Wright (Ark. '97), 40 S. W. 81; Webster v. Ba'nbriclg«', 13 Hun, 180; Merchants and Farmers' Bank z). Wexson, 42 N. Y. 438; A'kinson v. Brooks, 26 Vt. 5G9; Ho^zworth v. Koth, 26 Oliio St. 33; Math as v. Kirsch, 87 Me. 9 (33 A. 19). 3 Atlantic Nat. Bank v. Franklin, 5") N. Y. 235; Gates??. National Bank. 100 U. S. 239; Lambert -y. Clewl}, 80 Me. 480 (15 A. 61). 154 CH. v.] THE CONSIDERATION. § 56 i.s an implied agreement for an indefinite forbearance to sue the j)k'dgor, which is a sufficient consideration to make the pledgee a holder for value. ^ Where there is no express or implied agreement for for- bearance, no surrender of other collaterals and no other specific consideration for the transfer of negotiable instru- ments as collaterals; it would seem, from the study of the general subject of consideration in the law of contracts, that the indorsee of such instruments cannot claim to be a holder for value. And such is the conclusion of many, if not the majority, of the cases. ^ On the other hand, there is eminent authority, including the Supreme Court of the United States, in sup|)ort of the proposition that every pledge, given before or after maturity of the principal debt, is su[)ported by a sufficient consideration to make the pledgee a holder for value; implied from the fact, that the possession of the collateral lulls the creditor into security and inactivity, and prompts him to show a leniency toward the debtor pledgor, which he would not otherwise mani- fest.^ Note. In Chapter X of the author's treatise on Commer- cial Paper, a very full discussion is to be found on the whole subject of consideration, as it bears upon the validity and 1 Manning v. McCluiv, 3G 111. 490; Worcester Nat. Bauk v. Cheney, 87 111. (!0-'; Thompson v. Gray, 03 Me. 228. But see contra, Moore v.Iiyder, 05 N. Y. 438; Bowman v. Van Kuren, 2'J Wis. 209 (19 Am. R<-p. 55t). 2 Leslie v. Bassetl, rJ9 N. Y. 523 (29 N. E. 834) ; Oomstock v. Hilt, 73 N. Y. 209 (29 Am. R-p. 142); U. S. Nat. Bk. v. Ewingc, 131 N. Y. 5C0 (30 N. E. 601) ; Smith v. Hogela- d, 78 Pa. St. 252; Union Nat. Bank v. Bar- ber, 66 Iowa, 559 (9 N. W. 890); Turle v. Sargent, 03 Minn. 211 (05 N. W. 349); Goodman v. Simonds, 19 Mo. 100; Wagner v. Simmons, 01 Ala. US. 3 B. C. & N, R. R. Co. V. Nat. Bank of Republic, 102 U. S. 14; Doe v. N. W. Coal & Transp. Co., 78 Fed. 62; Stoddard v. Kimball, 6 Cush. 469; Roxboroughy. Mossick, Ohio St. 448 (07 Am. Die. 340); Straugiiau V. Fairchild, 80 Ind. 698; Kaiser v. U. S. Nit. Bank (Gi. '90), 25 S. E. 020; Buchanan v. Mech.niics' Loan & Tr. Co., 84 Ml. 430 (35 A. 1099); Maitland v. Citizens Nit. B i: k, 40 M.l. 540 (17 Am. Rep. 020) ; Rosemond V. Graham, 54 Minn. 323 (50 N. W. 38) ; Jo:.es v. Wiesen (Neb. '97), 09 N. W. 702; Smith v. Wacho'), 179 Pa. St. 200 (30 A. 221); Trigg v. Saxton (Tenii. Ch. App. '90), 37 S. W. 50''. 155 ILL. CAS. THE CONSIDERATION. [CH, Y. cli a ;acl eristics of the various kinds of Commercial Paper. In this book, the fixed limitations of space have compelled the author to be satisfied with the presentation of those principles of the law of consideration, which apply exclu- sively in determining the existence or non-existence of ho>ia fide ownership ; presuming that the student ha>!, in his course on Contracts, become conversant with the sub- ject of consideration in general. +- ILLUSTRATIVE CASES. First Nat. Bank v. Cecil, 23 Orejj. 58 (32 P. 393). Knowles v. Knowles, 128 III. 110 (21 N. E. 196"). Kelly V. Burron£;h, 102 N. Y. 93 (G N. E. 109). Spray v. Burke, 123 Ind. 5(J5 (2i N. E. 588;. Forbearance to Sue, when Siifiicient Consideration for Note. First Nat. Bank v. Cecil, 23 Oreg. 58 (32 P. 393). Bean, J. This cause was originally f-ubmitted on briefs, with- out an oral argument, and, as the brief of appellant was confined largely to a discussion of the points pnssed upon in the opinion filed, tlie alleged error of the trial court in giving and refusing certain instructions, although assigned as error, and noted in the brief, escaped our attention, and was not considered. The con- tention for appellant is that, alth(>ugh an agreement by plaintiff to forbear instituting proceedin-js to set aside the conveyance from F. Cecil to defendant, and an actual forliearance by it, would be a good and sutlicient consileration for the execution cf the note by defendant, and that there was evidence from which the jury might find such an agreement, _\ct tiiat question was not submitted to tiie jury, but the court i-istructed them, in effect, that mere forbearance b}' plaintiff, ^^i'.liOllt an agreement to for- bear, would be a suffieii nt consideration for defendant's promise. The defendant requested the court to cliarge the jury that " the mere forbearance of plaintiff, if you shoidd find that there was such forbearance, to attack a conveycnce of property from F. Cecil to the defendant, wthout any agreement to forbear on the part of the plaintiff, would not be a sufficient consideration to sustain the contract in question, even though the plaintiff did for- bear to attack such conve3'ance on account of the defendant having signed tlie note in question." This was refused and the fol- lowing given: " If you believe from the evidence that when the defendant signed the note sued u[)on he did so to induce the plaintiff not to attack the convcj'ance of property theretofore made by Frank Cecil to himself, then I charge you that there wr.s 156 CH. v.] THE CONSIDERATION. ILL. CAS. a good and sufficient consideration for bis so signing." From tlie instruction refused and the one given it is apparent the theory of tlie trial c )urt was that an agreement on the part of plaintiff to forbear to attack tlie conve3'ance from Frank Cecil to defendant was not necessary to support the defendant's promise, but, if the note was signed by defendant to indive plaintiff to so forbear, it was a sufHcient consideralion. This was manifest error. An agreement by a creditor to forbear prosecnting his claim, and an actual forbearance by him, is a good consideration to sustain a promise of a third person to i)ay the claim (Robin- son V. Gould, 11 Cusli. 55, and Bish. Cont., § 03); but a mere forbearance, without such ai)romise, is not. " A mere forbear- ance to sue," savsBigelow, J., " without anj' promise or asfree- ment to that effect, by the holder of a note, forms no sufficient consideration for a guaranty. It is a mere omission on the part of the creditor to exercise his legal right, to which he is not bound by any promise, and whicli he may at any moment, and at his own pleasure enforce." Mccornoy v. Stanley, 8 Cush. 87. And this is so although the act of frty t ) an ol I note, which had long been made and delivered to tlie payee as a completed contract on a con- sideration wh Uy past and executed, and moving solely between the original makers a:id the plaintiff, and not to a new contract on a new and additional consideration a3 between the payee and himself. The words " f )r va'ue received " gain no new or addi- tional meaning by the defendant's signature, ami import no other or further consideration than that which they signified when the note was given ; and, witluuit some proof of a new consideration, plaintiff cannot recover, because the complaint avers tiiatthe note was not signtd by defendant until long aft' r it was delivered to the plaintiff by the original promisors. Green v. Shepherd, 5 Allen, 589. It follows, tiierefore, that the judgment must be reversed, and anew trial ordered. . 157 ILL. CAS. THE CONSIDERATION. [CH. V. Want of Consideration, and Misrepresentation as a Defense to Note. Knowles V. Knowles, 128 111. 110 (21 N. E. 19C). Bailey, J. This was a suit iu assumpsit, brought by Hiram Knowles against Riley Kiiowles, to recover the amount of two promissory notes executed by the defendant to the plaintiff. Under proper pleadings, the defendant set up as a defense want of consideration, and also certain false representations, whereby he was induced to execute sold notes ; and a trial before the court, a jury being waived, resulted in a judgment in favor of the plain- tiff for S669 70 and costs. This judgment was affirmed by the appellate court on appeal, and, the judges of that court having certified that the case involves questions of law of such impor- tance, on account of collateral interests, that it should be passed upon by this court, the record has been brought here by a further appeal. The plaintiff and defendant are brothers, and they, with their brother Prettyman Knowles, are tiie only surviving children of Marvel Knowles, a former resident of Gibson county, Ind., and who died at that place testate, July 31, 1883. In Apiil, 1883, the defendant was indebted to his father in the sum of $2,716, evidenced by three promissory notes, two of which were secured by a mortgage on the defendant's land in lUinois. On the 24th day of that month the defendant's father surrendered and deliv- ered said notes to the defendant, no part of them then being paid, and executed to him a release of said mortgage, and on the second day of May following the defendant executed, under his hand and seal, acknowledged and delivered to his father, an instrument in which, in consideration of the surrender to him of said notes, and the execution of said release, he, fir himself anel his heirs, forever relinquished, surrendered, and quitclaimed all his present and prospective interest, title, or claim to any part or portion of the personal or real estate of his fattier. The will of Marvel Knowles was executed September 9, 1881, which was prior to the execu- tion by the defendant of said relinquishment of his interest in his father's estate. No change, however, was made in the will, and after the death of the testator it was duly probated in Gibson county, Ind. The will by its terms, after providing for the pay- ment of the testator's debts anei certain specific bequests, directed that the residue of his personal estate shoulei be equally divideel between his three sons ; and also, after giving a certain tract of land to a granddaughter, devised the residue of his real estate in equal shares to his three sous, the shares of Riley and Preity- man to go to them and their heirs and assigns forever, and the share of Hiram to go to him during his natural life, and at his death to his children. The defendant testifies that, at the time of the execution of the instrument of May 2, 1883, he intended to relinquish h's expectancy in his father's estate, but on exam- ination of the will, after his father's death, he came to the cou- 158 on. A .] THE CONSIDERATION. ILL. CAS. elusion that he was placed on the same footing with his brothers, and he thereupon made claim to one-third of the estate. After some discussion, his brothers executed to him a deed conveying, as was &up[)Ose(l, the undivided one-third of all the lands belong- ing to his fulhtr's estate, — said deed being executed, according to tliB recitals therein contained, in consideration of one dollar, " and to comjjromisc and settle all differences and rights of action, and sui)posed rights of action, and matters iu dispute, between the parlies hereto." The evidence as to the negotiations which led to the execution of tliis deed is very confused and uncertain, leaving it altogether in doubt as to what controversies were in fact taken into consideration by tlie parties. It is not shown that the defendant at that time urged any claim beyond the right under the will to an undivided one-third interest in tlie lands. That he subsequently claimed the same interest in the personal estate may be fairly inferred from the evidence, although the amount of the personal estate, after the payment of debts and specific legacies, is not shown. Some time after the execution of the deed last mentioned it was discovered that it did not correctly describe the lands in- tended to be conveyed, a certain quarter section being therein described as only a 40-acre tract, and negotiations were there- upon set on foot for the correction of the deed. The matter of such Correction, as well as all other controversies with the de- fendant in relation to their father's estate, was placed by the defendant's brothers in the hands of their attorneys in Indiana, and the defendant was referred by his brothers to them. The defendant thereupon called upon said attorneys, and had an in- terview with them, which lasted from 4 o'clock in the afternoon to 3 o'clock the next morning. In that interview said attorneys insisted that the tlefendant was still liable to the estate for the amount of the note surrendered by his father, and that the same could be collected of him, with interest; and that, if he did not pay or account for the notes, he couhl not share in the dislril)U- tion of his father's estate. The defendant, on the other hand, in- sisted that the notes were canceled, and that he was owing the estate nothing. As the result of the interview, saia attorneys made a proposition, which the defendant accepted, that to settle the entire contioversy the defendant should execute his promis- sory notes for two-tliir<1s of the S2,70U, one-half payable to each of his brothers; and thereuijon the defendant executed his six promissory notes for $300 each, three payal)le to his brother Hiram, and three to his brother Pretlyman. The notes in suit are two of the notes executed to Hiram. Soon afterwards, and in i)ursuance of the arrangemeni then made, the defendant re- conveyed to his brothers the lauds conveyed by the deed contain- ing the erroneous descrii)tion, and a new deed was (xecuted to him, by which his brothers conveyed to him an undivided one- third of said lands by a correct description. That deed contained the following clause: " And it is further agreed by the grantors 159 ILL. CAS. THE CONSIDERATION. [CH. V. herein that they, as heirs of Marvel Knowles, do hereby release the grantee, the said Riley Knowles, from all obligations and re- lease which the saipellant that he could trade the mules for the note held by 1G2 CH. v.] THE CONSIDERATION. ILL. CAS. Carter, — the note sued upon. They testified that this conversa- tion occurred at the mill at Ewing. The foregoing is in brief all of the testimony of said witness or witnesses in behalf of the appellee in support of his reply in estoi)pel. The appellant denied making any such statement to the appellee about tlie note in suit. The appellant and some five or more witnesses testified to at least two conversations between appellant and appellee other than the conversation testified to by appellee at the mill, in which appellant told appellee that the note wasgiven for a gambling debt, and that he would not pay it, and that he should not purchase or trade for it, and if he did he would lose it. The appellant testified to the two conversations, and was corroborated by five witnesses. Some testified to being present at one of the conversations and some at the other. Other wit- nesses testified as to admissions of appellee, in which he stated that he knew before he purchased the note that it was given for a gambling debt, but that he thought he could make appellant take it in payment of the debt he owed the appellant for the mules, and that Carter said it was all right. The conversations testified to by appellant's witnesst-s were not disputed by the appellee, nor did he dispute any of the admissions that the witnesses testi- fied as to his having made. From the evidence in the record, all that can be claimed for it is that it shows that at one time before the purchase of the note appellant told the appellee that the note was all right, and that he won d pay it when it became due. This, however, is disputed, and the undisputed evidence shows that upon two or more occasions before appellee purchased the note ai)pellant told him what the note was given for, and that he would not pay it. By evidence undisputed it is shown that appellee knew all about what the note was given for at the time he traded for or purchased tiie note. Ap[)ellee himself does not testify to the contrary. It is true he says he thought it was all right, but his admissions, testified to and not denied by him, ex- plain this expression, as he states that he knew the note wasgiven for a gamblinjj contract, but he thought it was all right ; that lie could make the a[)pellant take it on the debt he was owing him for the mules. Tue appellee does not even stale in his testimoii}' that he relied upon the statement of the appellant, and was in- duced by such statement to purchase or trade for the note, nor does he deny that he knew the note was given for such gambling debt at the time he purchased it. Tlie appellmt filed a motion for a new trial, which was overruled, and he excei^ted, and judg- ment was rendered for a[)pellee on the verdict. The sulficiency of the evidence to support the verdict is questioned by the motion for new trial. The question presentid by the evidence as to whether or not a note given for a gambling debt is va id and col- lectible in the hands of an assignee, wlio purchased the same with knowledge that the note was given for such debt, but after the maker has stated to him that the note is all right, and that he will pay it when due, but without it appearing that the pur- 1G3 ILL. CAS. THE CONSIDERATION. ' [CH. V. chaser relied upon or was deceived by such statement of the maker. The note in sui»; in this case is not payable in any bank. By section 4950, Rev. St. 1881, the note is void, and the maker may defend against ttie note, and defeat a recovery in hands of an assignee, unless he is estopped under the facts in tliis case. The law is pretty well settled tbat, where a statute declares that a note given for a gambling debt shall be void, such note is invalid in the hands of a bona fide purchaser, even if such note is negotiable in its nature, and even if the maker has induced the assignee to purchase the same by representing to such assignee that the note is valid before he purchases the same, and he is thereby induced to purchase the same by reason of such repre- sentations of the maker. It is dout)tful whether. the maker is estopped from setting up his defense to the note. Sondheim v. Gilbert, 117 Ind. 71 ; 18 N. E. Rep. 687. The note in question in this case was void. It would constiiule no consideration for a new promise. The appellee had full knowledge at the time he purchased the note that the note was given for a gambling debt ; that the note was void ; that there was no consideration for the promise of the maker to i)ay the note. With this knowledge he was not deceived. He could not have believed the note was valid and binding at the time he purchased it. He had no right to rely upon a promise of the maker to pay a debt which he knew was given for a gambling debt, and was without consideration, and he was bound to know that there was no consideration for the promise. The facts as shown by the evidence do not consti- tute an estoppel, even if in such a case as this a party can be estopped from defending against the note. There is no evidence to support the verdict, and the court erred in overruling the motion for new trial, and the judgment must be reversed. Judgment reversed, at costs of appellee, with instructions to the court below to sustain the motion for new trial, and for further proceedings in accordance with this opinion. 164 / CHAPTER VI. ACCEPTANCE AND AGREEMENTS TO ACCEPT BILLS, AND CER- TIFICATION OF NOTES. Section 57. The object an-I effect of acceptance. 58. When and in what cases must presentment for acceptance be made — Effect of failure. 59. Presentment by whom and to whom. 60. Where and at what time must presentment be made. 61. Form and manner of presentment. 62. When presentment is waived. 63. Who may accept. 64. Acceptance before and after completion of the bill. 65. Revocation of acceptance. 63. Acceptances when required to be in writing. 67. Form and phraseology of acceptance. 68. Implied acceptances — Detention or destruction of bill. 69. Agreements to accept. 70. Conditional acceptances. 71. Acceptances for honor or supra protest. 72. What acceptance admits, 73. Certified notes. § 57. The object and effect of acceptance.— ^ The. accepiancaqf a InlLiii-iLiLji^in^enicnt inado by tlio drawee, usuallXJyj'itten across the fiicc of Iho bill, that he will pay t he full atuoun t c;i[lcd fiir_by: tho bill iiud according to its tenor, a nd subject to all the conditions and stipulations contained in the bill.) Until the drawee has agreed, by such acceptance or au agreement to accept,^ to honor the bill, he is under no obligation to pay it ; nor can he be sued on it by the holder of the bill, even though he has in his hands, to the credit of the drawer, sufficient lunds to cover the amount of the bill.^ 1 As to which aeepost, § C9. 2 Schimmelpenuich v. Bayard, 1 Pet. 264; Cox r. National Bank, 100 U. S. 704; Bullard v. Randall, 1 Gray, 605 (61 Am. Dec. 433); Carr r. Nat. Security Bank, 107 Mass. 45 (9 Am. Rep. 6) ; Tyler v. Gould, 48 N. 1(55 § 08 ACCEPTANCE AND AGREEMENTS TO ACCEPT, [CII. VI. The only exception to this proposition is where the cir- cumstances permit of the application of the principle, that a bill of exchange operates as an assignment of the fund asruinst which it is di-awn.^ Before acceptance, the drawee is so far considered a stranger to the bill, that he may acquire title to the unac- cepted bill by indorsement, and sue the drawee on it ; or transfer it to another, without incurring the liability of an acceptor. 2 Before acceptance, the drawer is the primary debtor; but acceptance makes the acceptor the primary debtor, and changes the obligation of the drawer into a secondary liability; that of an implied guaranty, that the bill will be paid by the acceptor, if it is presented for accept- ance and payment, according to the tenor of the bill.^ The drawer is also under obligation to reimburse the acceptor, if the drawee has accepted for accommodation of the drawer. Or, if the acceptor is indebted to the drawer, he debits the account of the drawer with the amount of the bill, when he pays the same. § 58. "When and in what cases must presentment for acceptance he made — Effect of failure. — Bills, which are payable on a certain day in the future, on demand or on a given time after date, do not require formal present- ment for acceptance. They need not be presented at all, until maturity, when they must be presented for payment.* Y. 682; Smith v. Muucie Nat. Bauk, 29 lud. 158: Russell ?7. Phillips, 14 Q. B. 891; De Liquero v. Munson, 11 Heisk. 15; Clements v. Yeates, 69 Mo. 479. 1 As to which, see ante, § 5. 2 Attenborough w. McKenzie, 36 Eng. L. & Eq. 563; Swopeu. Ross, 40 Pa. St. 186 (80 Am. D.c. 507); Desh.i v. Stewart, 6 Ala. 852. 3 Hoffman v. Milwaukee Bk., 12 Wall. 181 ; Cos v. National Bauk, 100 U. S. 704; Pomeroy v. Tanner, 70 N. Y. 547; Jarvis •?;. Wilson, 46 Conn. 90 (33 Am. Rep. 18); Marsh v. Low, 55 Ind. 271; Fuller v. Leonard, 27 La. Ann. 035; Turner v. Browder, 5 Bush, 216. 4 Bank of Washington v. Triplet^, 1 Pet. 25, Bachellor u. Priest, 12 Pick. 399; Plato v. Reynolds, 27 N. Y. 586; House v. Adams, 48 Pa. St. 261; Walker v. Stetson, 19 Ohio St. 400 (2 Am. Rep. 405); Sweet v. Swift, 65 Mich. 90 (31 N. W. 767) ; New York Iron Mine v. Citizens' Bk., 44 Mich. 344; 6 N. W. 823; (post-dated bill). 166 CH. VI.] ACCEPTAXCE AND AGREEMENTS TO ACCEPT. § 59 It is, however, customary in banking circles to present for acceptance, within a reasonable tinio, in these cases as well as in those in which Ihc presentment is absolutely required. And where such a hill is received by an agent, a bunk, for example, it is necessary to present in all cases. ^ But where bills are payable at .'■ight, or a stated time after sight or demand ; since in these cases the day of payment and maturity is dependent U[)on the ascertainment of a certain date of acceptance, they must be presented for acceptance with reasonable dispatch. ^ Whenever it is the duty of (he payee or holder of a bill to make presentment for acceptance, and he fails to do so within the prescribed time, and according to the require- ments of the law, as explained in succeeding sections; he not only will lose his cause of action on the bill, but also every collateral claim against the drawer and prior in- dorsers.^ If acceptance is refused, whether the present- ment is made before or within the required time, the holder must at once protest it for non-acceptance, if the bill be of the kind required to be protested ; and in any case, he must give prompt notice of dishonor to the drawer and prior indorsers, in oider to hold them liable on their implied guaranty of the honor of the bill.^ § 59. Presentnieiit by whom and to whom. — The pre- sentment for acceptance should be made by the rightful holder or by his duly authorized agent. But possession is 1 Allen V. Suydam, 20 Wend. 321 (32 Am. Rep. 355). 2 Cox V. National Bank, 100 U. S. 704; Prescott Bank «. Caverly, 7 Gray, 217 (GG Am. Dec. 473); Fernandez v. Lewis, 1 McCord, 321; Knott V. Venable, 42 Ala. 186; Craig v. Price, 23 Ark. 033; Phoenix Ins. Co. t?. Allen, 11 Mich. 501 (83 Am. Dec. 756); Aymar v. Beers, 7 Cow. 705 (17 Am. Dec. 538) ; Lockwood v. Crawford, 18 Conn. 3G1. As to what is reasonable dispatch, see jyost, § GO. 3 Smith V. Miller, 43 N. Y. 171 fS Am. Rep. GOO); s. c. 52 N. Y. 546; First Nat. Bank v. Fourth Nat. Bank, 77 N. Y. 320 (33 Am. Rep. G18); Adams v. Darby, 28 Mo. 1G2 (75 Am. Dec. 115). * Bank of Washington v. Triplett, 1 Pet. 25; United States v. Barker, 4 Wash. C. C. 4G4; Lucas v. Ladew, 28 Mo. 342. As to requirements of protest and notice, see post, chapters XI, XII. 167 § 59 ACCEPTANCE AND AGREEMENTS TO ACCEPT. [CH. VI. sufficient evidence of title, to enable an effective present- ment to be made; and if the one having possession is not the true owner, such presentment will inure to the benefit of the latter, if it has been made in the form and manner required by law.^ The presentment must of course be made to the drawee, or to his duly authorized agent. If a bill is drawn on two or more persons, it should be presented to each one of the drawees; unless the drawees are partners, when present- ment to one of them will be sufficient. ^ Where the bill is drawn on two or more individual draw- ees, the holder is not obliged to take the acceptances of any number less than all; and if he does so, he releases the drawer and indorsers from liability, unless the bill was protested for non-acceptance as to those who had refused.^ In making presentment to a supposed agent, in the absence of the drawee, the value of the presentment will depend upon the express or implied authority of the agent to accept. And the burden of proof is on the holder to show, that the acceptance was made by a duly authorized agent.* If the drawee is dead, there is some authority* for hold- ing, that there should be a presentment to his personal representatives. But, inasmuch as the personal representa- tives have no authority in their representative capacity to accept, it would seem to be the better doctrine that the bill may be at once protested for non-acceptance, without 1 Freeman v. Boynton, 7 Mass. 483; Bank of Utica v. Smith, 18 Johns. 230. 2 Union Bank v. Willis, 8 Met. 504 (^1 Am. Dec. 541) ; Holtz v. Bopple, 37 N. Y. 634; Gates v. Beecher, 60 N. Y. 518 (19 Am. Rep. 207; Fourth Nat. Bank v. Henschen, 52 Mo. 207; Mt. Pleasant Branch Bank v. McLaran, 26 Iowa, 306. 3 Greenoueh v. Smead, 3 Ohio St. 416; Union Bank v. Willis, 8 Met. 504 (41 Am. Dec. 541). By statute, it is now provided in some States, that if one of two or more joint drawees refuses to accept, the bill need not be presented to the others, but may be at once protested as to all. 4 Stainback v. Bank of Va., 11 Gratt. 260; Wiseman v. Chiappella, 28 How. 368; Sharpe v. Drew, 9 Ind. 281. 5 Chitty and Story. 168 CII. VI.] ACCEPTANCE AND AGUEEMKNTS TO ACCEPT. § GO making such piesentmcnt. It is different, where the drawee is a firm, which has been dissolved by the death of one of the partners. In such cases, presentment should be made to the surviving partners, as they are the administrators of the partnership affairs.^ § 60. Where ami at what tiiue must presentment be made. — The ])lace of presentment for acceptance is deter- mined altogether independently of the agreed place of pay- ment ; and it is always where the drawee lives or conducts his business.^ There is some tiuthority for the position that the holder may, according to his convenience, present the bill at the residejice or p\;ic(i of business of the drawee;^ but this woidd not appear to be a sound rule; especially in the light of the additional requirement, that presentment should be made daring business hours. The business man cannot be expected to be at home during the business hours of the day, or have some one at his residence who is authorized to acco[)t bills for him. The better rule would appear to be, that presentment nmst be made at the place of business, if the drawee has one, at least during business hours; and if he has no place of business, then at his resi- dence. If the residence or place of business of the drawee is unknown, or it has been changed, the holder must e.xercise reasonable diligence in discovering it. But if his reason- able inquiries fail to produce the desired information, he must tiicn protest the bill for non-acceptance, stating his inability to find the drawee.^ If the bill is presented at the drawee's place of business, it should bo presented during what are considered to be the 1 Cayuga Co. Bank v. Hunt, 2 Hill, G35. - Mason v. Franklin, 3 Johns. 202; Booth v. Franklin, 3 Johns. 207. But if the place of business or residence is unknown presentment at the place of payment is sufllcient. Wolfe v. Jewett, 10 La. .S!)0. 3 Chitty, 31(5 ; Daniel, § 461. * Freeman v. Boynton, 7 Mass. 483; Anderson v. Drake, 14 Johns. 114 (7 Am. Dec. 447); Ratcliffe v. Planters' Bank, 2 Sneed. 425; Wolfe v. Jewett, 10 La. 390; Hines u. AUely, 4 B. & Ad. 624. 169 § 60 ACCEPTANCE AND AGREEMENTS TO ACCEl'T. [CH. VI. ordinary business hours, by those engage*.,! in that particular business in that particular place. ^ If the bill is presented at the drawee's residence, it may be presented at any time before the customary hour for retiring.^ But the observance of these requirements, as to time and place, is only of importance, where the drawee cannot be found ; and it is necessary to determine whether a present- ment for acceptance is made to an authorized agent, or whether due diligence has been exercised in making the presentment, resulting in failure. If the presentment is made to the drawee in person, it is a good presentment, it matters not where or at what hour it was made. It has already been stated in a preceding section ^ that when presentment for acceptance is required to be made before maturity of the bill, it must be made within a rea- sonable time after negotiation of the bill by the drawer. What is a reasonable time is held to be a mixed question of law and fact; a question of law, where the facts are simple and undisputed, and a question of fact for the jury, where the case is attended by circumstances which render the question doubtful.* The question is answered in the light of the facts of the particular case. It is probably true, that presentment for acceptance should be made within the customary twenty- four hours after the payee's receipt of it, if the payee retains the possession of it. At any rate, it is certain that the same delay, which is held to be permissible where the bill is indorsed or transferred to another, would in case of its retention by the payee be held to be unreasonable, and would discharge the drawers.^ But bills of exchange are 1 Cayuga Co. Bank v. Hunt, 2 Hill, 635; Nelson v. Fotterall, 7 Leigh, 179; Parker v. Gordon, 7 East, 385. 2 Danau. Sawyer, 22 Me. 244 (39 Am. Dec. 674J. ^ §58. ^ Prescott Bank v. Caverly, 7 Gray, 217 (66 Am. Dec. 473); Lockwood V. Crawford, 18 Conn. 361; Mohawk Bank v. Broderick, 10 Wend. 304; s. c. 13 Wend. 133 (27 Am. Dec. 192); Muncy School Board v. Com., 84 Pa. St. 464; Salisbury v. Renick, 44 Mo. 554 ; Walsh v. Dart, 23 Wis. 334. ^ See Robinson v. Ames, 20 Johns. 146 (11 Am. Dec. 259); Gowan v. 170 Clil. VI.] ACCEPTANCK AND AGREEMENTS TO ACCEPT. § 61 not required to be presented for acceptance, before they are indorsed or transferred. They are intended to cir- culate as a substitute for currency, and to serve as a medium of exchange; and as long as the bill is not sent to some place outside of the ordinary channels of commerce, it may be passed from one person to another, and sent from place to place, until it reaches the place in which the drawee resides or does business. The payee is not obliged to send the bill directly to the place of business 01 domicile of the drawee.^ But the bill cannot circulate indefinitely, without presentment for acceptance. The cir- culation only extends the time which will be considered reasonable. And here again, we find the question of reasonable time to be dependent upon the customs of trade, and the facts of each case.^ § 61. Presentment — Form and manner. — No pre- sentment for acceptance is suflScient, if the party making it has not at least the potential possession of the bill ; and while it may be doubtful whether actual possession at the time of presentment may be necessary, it is certainly not necessary to exhibit it to the drawee, unless he demands an inspectifm of the bill.^ But if the drawee demands the production of the bill, and is not satisfied with the " pre- senter's " verbal description of it; the presentment is not Jackson, 20 Johns. 17C; Nat. Newark Bkg. Co. v. Second Nat. Bk., 63 Pa. St. 404; Jordan v. Wheeler, 20 Tex. C98; Richardson v. Fenner, 10 La. Ann. 599; Phoenix Ins. Co. v. Allen, 11 Mich. 501 (83 Am. Dec. 756); Allan V. Eldred, 50 Wis. 132 (G N. W. 565) ; Montelius v. Charles, 76 111. 303. ^ Wallace v. Agry, 4 Mason, 336; Prescott Bank v. Caverly, 7 Gray, 217 (66 Am. Dec. 473); Montelius v. Charles, 76 111. 303; Lockwood v. Crawford, 18 Conn. 361 ; Shute v. Robins, 3 C & P. 80. 2 See Prescott Bank v. Caverly, 7 Gray, 217 (66 Am. Dec. 47S); National Newark Banking Co. v. Second Nat. Bk., 63 Pa. St. 404; Nichols V. Blackmore, 27 Tex. 580; Montelius v. Charles, 76 111. 303; Phoenix Ins. Co. V. Allen, 11 Mich. 501 (83 Am. Dec. 756); s. c. 13 Mich. 191; Walsh V. Dart, 23 Wis. 334 ; Elting v. Brinkerhoff, 2 Hall, 459 ; Olshausen V. Lewis, 1 Bis3. 419. For a fuller citation of authorities and illustra- tions, see Tiedeman's Com. Paper, §§ 215, 216. 3 Fisher v. Beckwith, 19 Vt. 31 (46 Am. Dec. 174). But see Fall River Union Bank v. Willard, 5 Met. 216, apparently contra. 171 § 62 ACCEPTANCE AND AGREEMENTS TO ACCEPT. [CH. VI. good, unless the bill is exhibited for the drawee's exami- nation. And the drawee has the right, if he demands it, to retain possession of the bill for twenty-four hours, before determining whether he will accept or refuse to do so.i If the bill is executed in duplicate or triplicate, either part, but only one, need be presented; and only one part must be accepted or refused acceptance. The drawee will be liable to bona fide holders on all parts of the bill, on which he writes his acceptance. ^ § &'2. When presentment is waived. — If the drawer directs the bill to be paid " without acceptance," or the bill contains in any other form a waiver of acceptance; in such cases, presentment need not be made to hold the drawer and indorsers liable.^ So, also, is there an implied waiver of presentment for acceptance, and it may be dispensed with, where the drawer and drawee are the same person ; whether he be a natural person, a partnership or a private corporation,^ Where the drawee is an infant, lunatic, married woman, or any other person under a legal disability, which makes him or her unable to make a valid contract by acceptance of the bill ; the presentment may be dispensed with, and the 1 Fall River Union Bank v. "Willard, 5 Met. 216] Overman v. Hoboken City Bank, 30 N. J. L. \^2 Vroom) 563 ; Connelly v. McKean, 64 Pa. St. 113 ; Case V. Burt, 15 Mich. 82; Andrews v. Germ. Nat. Bank, 9 Heisk. 211 (24 Am. Rep. 300). In many Status, statutes expressly authorize the drawee to retain possession of the bill before giving his answer; usually, in accordance with the customary rules, as just stated. 2 Downes v. Church, 13 Pet. 205; Bank of Pittsburg v. Neal, 22 How. 96; Walsh v. Blatchley, 6 Wis. 422 (70 Am. Dec. 4G9). 3 Webb V. Mears, 9 Wright, 222; Miller v. Thompson, 3 M. & G. 576; Liggett u. Weed, 7 Kans. 273. •1 Douglass V. Cowles, 5 Day, 511; Cunningham v. Wardwell, 12 Me. 466; Marion &c. R. R. Co. v. Hodge, 9 lud. 1G3; Hisey v. White Pidgeon Co., 1 Dougl. 193; Western Min. Co. v. Toole (Ariz.), 11 P. 119; Capital &c. Ins. Co. V. Quinn, 73 Ala. 588 (on his firm). See ante, § 46. It is otherwise, where the instrument is a municipal warrant drawn by the officer of a municipal corporation or another. See Tiedeman Com. Paper, §138. 172 CH. VI.] ACCEPTANCE AND AGREEMENTS TO ACCEPT. § 63 bill [)rotested for non-acceptance, as soon as the disability of the drawee is discovered.^ § 63. Who may accept. — Except in cases of acceptances for honor or supra protest,'^ no one but the person, who is named in the hill as the drawee, can accept and be bound as an acceptor. A stranger to the bill cannot bind him- self by an acceptance as an acceptor.^ Where, however, the name of the drawee is not stated in the bill, one who accepts the bill will be presumed to l)e the intended drawee, and will be bound by his acceptance.* A bill may be drawn on two persons in the alternative, when acceptance by one will be sufficient.^ Where a bill is drawn on two or more drawees, jointly, they must all accept; and the acceptance of one is not suflScient, and the bolder may protest for non-acceptance,^ although the ac- ceptance by one will be binding upon him, unless it is made conditionally, upon the acceptance of the bill by the others.' But where the bill is drawn on a firm, an acceptance by a member of the firm will bind the firm if it comes within the scope of the firm's business; whether the accep- tance is made in the firm's name, or in the individual name of the partner who accepts.^ An agent may, if duly authorized, accept a bill drawn on his principal. But the holder is not obliged to take such an acceptance ; and may protest for non-acceptance, unless 1 See Mellish v. Simeon, 2 H. Bl. 378; and anle, chapter IV. 2 As to which, seeposf, § 71. 3 Nichols V. Diamond, 9 Exch. 157; Fieder v. Marshall, 9 C. B. 60G; Davis V. Clark, G Q. B. IG; Heenan v. Nash, 8 Minn. 407; May v. Ke^ly, 27 Ala. 497. < Gray v. Milner, 8 Taunt. 739; s. c. 3 Moore, 91; Peto v. Reynolds, 9 Exch. 410; Wheeler v. Webster, 1 E. D. Smith, 1. 5 See ante, § 13. ^ See ante, § 59 ^ Owen V. Van Uster, 10 C. B. 31C; Smith v. Milton, 133 Mass. 369. 8 Lloyd V. Rowland, 2 B. & Ad. 23; Markham v. Hazen, 48 Ga. 570; Tolman v. Ilanrahan, 44 Wis. 133; Gooding v. Underwood, 89 Mich. 187 (50 N. W. 818). Where, however, the bill is drawn on the individual partner, he cannot bind the Arm by acceptance in the firm's name. Nichols V. Diamond, 9 Exch. 157. 173 § 64 ACCEPTANCE AND AGREEMEiNTS TO ACCEPT. [CH. VI. he is supplied with undoubted proof of the authority of the agent to accept.^ § 64. Acceptance before and after completion of bill. — The drawee ordinarily accepts on presentment by the holder, after the bill has been fully executed and delivered to the payee. But the acceptance may precede the com- pletion and delivery of the bill ; and the blank acceptance may be filled up by any one who lawfully gets possession of the bill. 2 And, as against a honaJiiJe holder, the acceptor cannot set up any defense, growing out of wrongful nego- tiation or filling up of blanks.^ The acceptance may also be made after maturity of the bill ; but if the bill has not been protested, the acceptance after maturity will not bind any one but the acceptor, and give him no claim of indemnity against the drawee.^ The holder may require the drawee to write the date of acceptance on the bill ; particularly, where the bill is payable a given time after sight or de- mand, in order that the actual day may be ascertained without extraneous proof of the day of acceptance.^ When, however, the acceptance bears no date, it is presumed to have been made within a reasonable time after its execution, and before maturity; but the actual date of acceptance may, in such cases, be proven by parol evidence.^ 1 Atwood V. Mannings, 7 B. & C. 278; 1 Man. & Ry. 78; First Nat. Bank v. Garside, 53 111. App. 454, 2 Carter v. White, L. R. 25 Ch. D. 666; Credit Co, v. Howe Machine Co., 54 Conn. 357 (8 A. 472); Moiese v. Knapp, 30 Ga. 942; Hopps v. Savage, 69 Md. 513 (16 A. 133), 3 Bank of Com, v. Carey, 2 Dana, 142; Moody v. Threlkeld, 13 Ga. 55; Redlick v. Doll, 54 N. Y. 234 (13 Am. Rep. 573) ; Montagues. Perkins, 22 L.J. C. P. 187; Young v. Ward, 21 111. 223. * Exchange Bank of St. Louis v. Rice, 98 Mass. 288; Williams v. Winans, 13 N. J. L. (2 Green) 339; Spaulding v. Andrews, 48 Pa. St. 411; Bank of Louisville v. Ellery, 34 Barb. 630. 5 Dufaur v. Oxenden, 1 M. & R. 90; Moore v. Willey, Buller N. P, 270, The practice to afHx the date is so universal, that little opportunity has been given to courts to declare upon the right of the holder to demand it. c Roberts v. Bethel, 22 L. J. C. P. 69; s. c. 12 C. B. 778; Kenner ». Creditors, 1 La. 121. 174 CH. VI.] ACCEPTANCE AND AGUEEMENTS TO ACCEPT. § 66 Where an acceptance is written on a blank or incomplete bill, and is bused npon a valuable consideration ; the death of the drawee before its completion does not have any effect upon the liability of his estate on the acceptance; nor, on the other hand, does tlie death of the drawer, prior to acceptance, affect the drawee's liability on his subsequent acceptance.^ But it seems, that the acceptor has no claim against the drawer, if he accepts after he has knowledge of the drawer's bankruptcy. ^ § 65. Revocation of acceptance. — As long as the bill has not been returned to the holder, the acceptance may be revoked and canceled by the drawee.^ Although it has been held that an acceptance may be revoked after deliv- ery, where there is time to make [)rotest and to issue notices of dishonor;^ the general rule is that after delivery, the acceptance is irrevocable, unless all the parties, including the drawer and indorsers, consent to such revocation.^ And where verbal acceptances are binding and legal, the accept- ance is irrevocable, as soon as it has been conmiunicated to the holder, even though the bill has not been returned to him.® In some States, it is provided by statute that ac- ceptances are revocable, as long as the bill has not been transferred to a bona fide holder.^ § Qy different persons, as there are parties to the bill, secondarily liable. But one person may accept for the honor of all the parties, or for any number more than one.^ The holder is not required to take such an acceptance ; but if he does, his cause of action against the persons, for whose honor the acceptance has been given, will be suspended, until the acceptor for honor has defaulted.'^ But the acceptance for honor is conditional. In order to hold such an accei)t()r liable, not only must there have been a previous presentment to the drawee and protest for non-acceptance; but on maturity of the bill, it must again be presented for payment to the drawee; and if he refuses, it must be protested for non- payment. When tliese conditions are complied with, the bill should be presented to the acce[)tor for honor. And if he dishonors the bill by refusal of payment, it must be again 691; Williams?;. Gallyon (18 So. 1G2), 107 Ala. 439; Carson v. Kerr, 7 Kan. 243; Ford i>. Angelrodt, 37 Mo. 50 (88 Am. Dec. 174); Savanuah &c. Ry. Co. V. Schieffelin, 80 Ga. 5 76(5 S. E. 781). 1 § 63. - Konig V. Bayard, I Pet. 250; Scbimmelpennich v. Bayard, 1 Pet. 264; Gazzam v. Armstrong, 3 Dana, 554; Davis v. Clark, 6 Q. B. 16; Walton V. Williams, 44 Ala. 347; Markham v. Ilazen, 48 Ga. 570. 3 Williams v. G rmain, 7 li. &C. 468; Schofleld v. Bayard, 3 Wend. 488. 181 § 72 ACCEPTANCE AND AGREEMENTS TO ACCErr. [CH. VI. protested for non-payment, in order to hold the parties liable, for whose honor the acceptance was given .^ On the other hand, if the accei)tor for honor pays the bill, he will have recourse only to those parties to the bill, for whose honor he accepts; and only when he has notified them, at the time of bis acceptance, that he has accepted for their honor. '^ Since the acceptance for honor is a conditional accept- ance, no citation of authority is needed in support of the statement, that the holder of the bill is not obliged to take such an acceptance, but may proceed at once on the bill, asrainst the drawer and indorsers. § 72. What acceptance admits — The acceptance is an absolute promise to pay the bill, which purports to have been drawn on him by the drawer. So that, while he does not, by acceptance, admit the genuineness of the body of the bill, so that he can defend a suit brought against him on his acceptance, by showing that there has been a material alteration in the terms or amount of the 1)111 ; '' the acceptor does admit the genuineness of the signature of the drawer, and guarantees the authority of the agent of the drawer, where the bill has been drawn and signed by an agent.* The acceptor also admits as against the holder 1 Hoare v. Cazenove, 16 East, 391; Baring v. Clark, 19 Pick. 220; Schofieldv. Bayard, 3 Wend. 488; Wood v. Pugh, 7 Ohio, Pt. 11., 156; Protalonga v. Lares, 47 Cal. 378; Bacclius v. Richmond, 5 Yerg. 109. 2 Cases cited, supra. 3 E!?py w. Bank of Cincinnati, 18 Wall. 604; White v. Continental Nat. Bank, 64 N. Y. 316 (21 Am. Rep. 612). But he is liable, if the negligence of the drawer in drawing the bill has enabled the holder to make a suc- cessful alteration. Van Duzer v. Howe, 21 N. Y. 531; Young u. Leh- man, 63 Ala. 519. 4 Hoffman v. Bank of Milwaukee, 12 Wall. 181; Hortsman v. Hcn- shaw, 11 How. 177; Nat. Park Bk. v. Ninth Nat. Bk., 46 N. Y. 77 (7 Am. Rep. 310); Ellis v. Ohio L. Ins. Co., 4 Ohio St. 628; Peoria &c. R. R. Co. V. Neill, 16 111. 269; Williams v. Drexel, 14 Md. 566. But it is held that, if an agent has without authority drawn a bill in the name of his principal, the acceptor may dispute his authority against the original payee, and any other but a bona fide holder. Agnel v. Ellis, 1 Mc- Gloin, 57. 182 CH. VI.] ACCEPTANCE AND AGltKEMENTS TO ACCEPT. § 73 of the bill, but not against the drawer,^ that he has funds of the drawer sufficient to cover the bill, and that the drawer had a right to draw ; ^ that the drawer had the legal capacity to draw the bill, ^ as well as the payee to indorse.^ But the acceptor does not admit the genuineness of the signature of the payee to his indorsement, even when the bill is payable to order of the drawer; nor the authority of the payee's alleged agent to iudorise for him.® These admissions are not generally inferred from an acceptance for honor.*" § 73. Certified notes. — A promissory note is, of course, not susceptible of an ordinary acceptance. But there is a niore or less general custom, where a note is payable at a particular bank, for such bank to write its name across such note; and such signature is taken as a certificate, that the maker has sufficient funds or credit to cover the note, and that the bank guarantees its payment.^ The certifica- tion of checks is treated of in a subsequent chapter.^ 1 As to him only prima fade . Klopfer v. Levi, 33 Mo. App. 322. 2 Raborg V. Peyton, 2 Wheat. 885; Hoffman v. Bank of Milwaukee, 12 Wall. 181; Jarvis v. Wilson, 46 Conn. 90 (33 Am. Hep. 18); Flournoy u. First Nat. Bk., 78 Ga. 222 (2 S. E. 547); Gillllan v. Meyer.'^, 31 111. 52^; Hall V. First Nat. Bk., 133 111. 234 (21 N. E. 540); Pomeroy v. Tanner, 70 N. Y. 547; Beardsley v. C'lok, 89 Iliin, 151; Vanstrum v. Liljenaren, 37 Minn. 191 (33 N. W. 555) ; First Nal. Bk. v. Moss, 41 La. Ann. 227 (G So. 25). 3 Braithwaite v. Gardiner, 8 Q. B. 373; Aspinwall v. Wake, 10 Binp. 51; Agnel v. Ellis, 1 McGloin, 57. * Smith V. Marsack, G C. B. 48C; Peaslee v. Rubins, 3 Met. 1G4. See ante, chapter IV. ^ Hortsman v. Henshaw, 11 How. 177; Robinson v. Yarrow, 7 Taunt. 455; Iloltv. Ross, 54 N. Y. 472 (13 Am. Rep. 615); White?). Continen- tal Nat. Bank, 64 N. Y. 316(21 Am. R. p. 612); Williams i'. Drexel, 14 lud. 5G6. ^ Tiedeman Com. Paper, § 231. '< Mead v. Merchant's Bank, 25 N. Y. 148; Irving Bank v. Wetherall, 36 N. Y. 337. The latter case holds that the bank may, notwithstanding its certification of the note, become an indorsee and holder of such note against the maker and prior indorser?!, ** See posi, chapter XVI. 183 / ILL. CAS. ACCEPTANCE AND AGREEMENTS TO ACCEPT. [CH. VI. ILLUSTRATIVE CASES. Montelius v. Charles, 76 111. 303. Sweet V. Swift, 65 Mich. 90 (31 N. W. 767). Huertematte v. Morris, 101 N. Y. 63 (4 N. E. 1). Trent Tile Co. v. Ft. Dearborn Nat. Bank, 54 N. J. L. 33 (23 A. 423). Bills Payable at Sight or a Certain Time after Sight Must be Presented for Acceptance within a Reasona- ble Time after Negotiation. Montelius v. Charles, 76 111. 303. Mr. Justice Scott. This action was upon an inland bill of exchange, in the name of a remote assignee, against the drawers. One important question is whether the holders had been guilty of such laches before presenting it to the drawee for payment, as would bar a recovery against the drawers. Defendants were engaged in the banking business at Piper City, in this State. On the 8th day of September, 1873, on the application of James McBiide, they drew their draft on the Franklin Bank of Chicago, jiayable at sight, to the order of John Strank, who then resided at Canton in Dakota. It was on the same day deposited in the post-olfice, directed to the payee at Canton, who received it after some delay, attributable alcne to the fault of the mails. Having passed through the hands of several holders, it was presented on the 13th day of October, 1873, to the bank for payment, which, being refused, it was pro- tested and notice given through the post oflice to the drawers and the several indorsers. In the meantime the Franklin Bank, on which the draft had been drawn, had failed and gone into bank- ruptcy. The law is settled by an unbroken line of decisions that all drafts, whether foreign or inland bills, must be presented to the drawee within a reasonable time, and in case of non-payment notice must be given promptly to the drawer, to charge him. But what is a reasonable time under all the circumstances is sometimes a most difficult question. The general doctrine is each case must depend on its own peculiar facts, and be judgtjd accordingly. In Strong v. King, 35 111. 9, it was declared to be a general rule, the holder of a sight draft must put it in circulation or pre- sent it for payment, at farthest, on the next business day after its reception, if within the reach of the person on whom it is drawn. In the case at bar, the draft was put in circulation, and the point is made, the mere fact it was not presented for pay- ment until after the lapse of thirty-five days, is per se such laches on the part of the holders as would discharge the drawers. In Muilman v. D'Eguino, 2 H. Black. 565, Eyre, C. J., said: " Courts have been very cautious in fixing any time for an inland bill, payable ?it a certain period after sight, to be presented 184 CH. VI.J ACCEPTANCE AND AGUEEMENTS TO ACCEPT. ILL. CAS. for acceptance, and it seems to me more necessary to be cautious with respect to foreign bills payable in that manner. If, instead of drawing their foreign bills payable at usances in the old way, merchants choose, for their own convenience, to draw them in this manner and make the time com- mence when the holder pleases, I do not see how the courts can lay down any precise rule on the subject. I think, indeed, the holder is bound to present the bill in a reasonable time, in order that the period may commence from which the payment is to take place. The question what is a reasonable time, must depend on the peculiar circumstances of the case, and it must always be for the jury to determine whether laches is imputable to the plaintiff." BuLLER, J. " Due diligence is the only thing to be looked at, whether the bill be a foreign or an inland one, and whether it be payable at sight, at so many days after, or in any other manner. But here I must observe that I think a rule may thus far be laid down with regard to all bills payable at sight, or at a certain time after sight, namely, that the}' ought to be put in circulation. If they are circulated the parties are known to the world and their credit is looked to ; and if a bill drawn at three days' sight were kept out in that way for a year, I cannot say there would be laches. But if, instead of putting it in circulation, the holder were to lock it up for any length of time, I should say he was guilty of laches." Bills, both inland and foreign, having the quality of negotiabil- ity, are intended in some degree, to be used as a part of the cir- culation of the country, and are indispensable in the conduct of extended commercial transactions. They afford a safe and con- venient mode of making payments of indebtedness between distant points. Banking houses that for a consideration, issue such bills, must be understood to do so in accordance with the known cus- tom of the country — that they will be put in circulation for a limited period. If this were not so their value would be greatly depreciated, and their utility in commercial transactions would be destroyed. Were it understood the purchaser of such a bill was bound to make all possible dispatch to present it to the drawee or lose his recourse on the drawer, no prudent man would feel safe in taking one. He may know the drawer from whom he purchases the bill, and be willing to rely on his responsibility, but in many instances he has and can have no knowledge of the drawer's correspondent, the drawee. Commercial usage has, therefore, placed the responsibility upon the drawer, and he is presumed, in consideration of the premium paid, to assume all risks as to the solvency of the drawee for such reasonable time as the bill shall be kept in circulation. There can be no doubt, if the holder locks it up and keeps it out of circulation, he assumes all risks, and in case the bill is dishonored, his laches in that regard would bar a recovery against the drawer. Such bills are not issued with a view to be held as a permanent security, with a 185 ILL. CAS. ACCEPTANCE AND AGitEEMENTS TO ACCEPT. [CII. VI. continuing liability on the drawer. Illustrative of the law of this branch of the case, is Shute v. Robbins, 3 C. & P. 80. The difficulty is to determine for what length of time such a bill may be kept in circulation, consistently with a continuing liability on the drawer. The rule adopted, as we have seen, is, it must be presented in a reasonable tim'e under all the circum- stances. But courts, not infrequently, experience great per- plexity in making a distinction between a reasonable time for the presentation of such paper and laches on the part of the holder. Every case differs so essentially in its facts, it has given rise to many apparently contradictory decisions, but through all of them is noticeable the efforts of the courts to ascertain whether the bill was kept in circulation for only a reasonable period in the regular course of business. When that fact is once established the lia- bility of the drawer is regarded as continuing. It will be found the decisions differ only in what the various courts deemed rea- sonable in each particular case. In Robinson v. Ames, 20 Johns. 147, the bill declared on was drawn on the 6th of March, but not presented for payment to the drawees until the 20th of May. In the meantime the drawees had failed, but in a well-reasoned opinion the court came to the conclusion there was no such laches as would discharge the drawer. In Jordon v. Wheeler, 20 Tex. 698, the bill in suit was put in circulation and indorsed by defendants without having been pre- sented for acceptance before it fcame to the hands of the plaintiff ; that a little more than a month elapsed before he presented it for- payment, and that was declared to be according to usage. In Nichols v. Blackmore, 27 Tex. 58G, the court was of opinion a delay of forty-seven or forty-eight days was not such laches as would forfeit the right of the holder to recourse against the drawer in default of payment by the drawees. Many other cases of the same import might be cited, but these are sufficient for our present purpose. They establish, beyond doubt, the fact, there is no fixed period in which the bill must be presented for payment, but that each case must be decided on its own peculiar facts in the light of commercial usage. In the case at bar the bill was immediately put in circulation. It was mailed to the payee on the day it bore date, to his proper address in Dakota. Some delay occurred, attributable to inter- ruption in the transmission of tlie mails, but this fact could not be imputed to the payee as laches. On the receipt, the payee immediately undertook and availed of the first opportunity to negotiate the bill. It was kept in circulation, and no delay was suffered other than that incident to the transaction of business in a sparsely populated territory like Dakota. The facts and cir- cumstances pi'oven show no laches on the part of any holder that would operate to discharge tiie drawers. Aside from the presumption that will be indulged, the drawers must have known the bill was liable to be put in circulation for a 186 CH. VI.] ACCEPTANCE AND AGREEMENTS TO ACCEPT. ILL. CAS. limited period. The evidence, though conflicting, warranted the court in finding the draft was sold with the knowledge that it was to be sent to the payee in Dakota. That being so, on every prin- ciple of justice, waiving all considerations of commercial usage, defendants ought to be held to have taken upon themselves the risk of the failure of the drawee for such reasonable time as it would take the bill to go tliere and be returned inthe usual course of business, ail things considered, and to be presented to the drawee at Chicago. We entertain no doubt their obligation is to this extent. It would be absurd to suppose it was within the con- templation of the drawers the bill was to be sent directly to the drawee at Chicago for payment. The law imposed no such duty upon the party procuring it. He could rightfully send it to his creditor and be guilty of no laches. No error appearing in the record, the judgment will be affirmed. Judgment affirmed. No Acceptance of Bill Payable on Demand. Sweet V. Swift, G5 Mich. 00 (31 N. W. 767). Campbell, C. J. Plaintiff, who is a transferee not holding any better title than his assignor, sued defendant on two alleged acceptances. One A. E. Jackson, on March 1 and March 12, 1879, received frcjm Matthias Kundinger two orders, payable to Jackson or bearer, for S35.14 and $1(5. 12, addressed to Swift & Lockwood, a firm of which defendant was a member. They had an outstanding contract with Kundinger for the delivery of logs, which Kundinger had not performed. Jackson presented these orders, which were payable on demand, several times to Mr. Lockwood, who refused to honor them. In June, 1897, Swift & Lockwood dissolved, and Swift assumed the business and liabili- ties. On the 18th of December, 1897, Jackson induced one Norval Cameron, an agent of defendant, to write an acceptance upon them, with the understanding that they should only be pay- able if Kundinger had any credits at any time to cover them, which he never had. Jackson kept them for awhile, and Cameron would not pay them. He subsequently turned them over to Mr. Sweet, the plaintiff. The plaintiff insisted below, and insists here, that he and his assignor, Mr. Jackson, were bo7ia fide holders of this pa))er, and that the acceptance could not be affected by testimony of the circumstances and conditions under which it was given. The jury found for defendant. "We have no doubt the verdict was warranted. These orders, which in form were l)ills of exchange payable to bearer on demand, were given to Jackson in the first place, and held by him until transferred to Sweet. They were not subject to acceptance, and a demand could only be made for payment. This could not be done indefinitely, and, when pay- ment was refused, they ceased to be binding on the drawer as 187 ILL. CAS. ACCEPTANCE AND AGREEMENTS TO ACCEPT. [CII. VI. negotiable paper, unless he was notified of the dishonor. No such notice was given, and the paper was thenceforth valueless in itself. Having ceased to bind Kundinger, if, by putting his name on as acceptor, defendant became a party at all under the law-merchant to paper culling for no acceptance, he became lia- ble as the sole party liable, and his liability depended upon the consideration on which it was made. Jackson could not be a bona fide holder without notice of an obligation made to him directly, and upon negotiations carried on with him personally. The jury have found, under the charge, that the paper was not meant to be an absolute promise, and that, if it was, there was no consideration for it. This was fairly left to the jury. There was also no testimony tending to show that Cameron, who was defendant's general business agent, had any power to bind him to an accommodation promise, without any consideration. The case is one involving no legal difficulties, and there is no founda- tion for the contention that it is merely an attempt to change a written contract by parol. The question of consideration is entirely different from that, and the dealings were with Jackson himself, who was the promisee, if such an acceptance of dishon- ored paper not calling for acceptance, but only for payment, can be called a negotiable promise, which is a question we need not discuss. The judgment must be affirmed, with costs. The other justices concurred. No Consideration Necessary Between Acceptor and Holder — False Representations by Drawer. Huertematte v. Morris, 101 N. Y, C3 (-1 N. E. 1). EuGER, C. J. In the discussion of this case it is unnecessary to consider particularly the agency of Hourquet & Poylo in the transaction, as they acted solely as the gratuitous agents of the plain- tiffs, and had no interest in the subject of the business. It may therefore be treated as a transaction occurring directly betweiiu the plaintiffs and Rau Runnels, and, concisely described, was to the following effect: The plaintiffs were merchants doing bus- iness at Panama, and one Christofel was a customer and debtor of theirs, residing at San Juan del Sur, near Rivas, in the State of Nicaragua. Christofel was desirous of discharging his obligations to the plaintiffs, l)ut was embarrassed in doing so by the inf requen<;y of communication between Rivas and Panama, and the want of a system of exchange enabling him to transmit funds safely and expe- ditiously from one place to the other. Under these circumstances, the plaintiffs consulted Hourquet & Poylo, a business firm at Panama, as to the best manner of collecting the debt. The plain- tiffs were informed by Hourquet & Poylo that Rau Runnels was a correspondent of theirs residing at Rivas, and that the collection 188 CH VI.] ACCEPTANCE AND AGREEMENTS TO ACCEPT. ILL. CAS. could probably be made through him, and offered to transmit a draft on Christofel to Runnels for that purpose. Thereupon the plaintiffs made their draft on Christofel at 60 days for Si, 000, payable to Hourqiiet «fe Poylo, who indorsed the same to Runnels, and forwarded it to him at Rivas for collection. In due time it was received by Runnels, and at its maturity was paid to him in Colombian currency. It becomes important now to determine the legal obligations and duties of the parties toward each other at this stage of the transaction. In the collection of tlie draft. Runnels acted as the mere agent of the plaintiffs, and had no interest in the proceeds, except, perhaps, a lien thereon for the value of his services in making the collection. He had no right or authority to use such funds for his individual purposes, and his sole duty in relation to them was that of their transmission to his principals. The nature of the business impliedly authorized him to make such transmis- sion according to the usages in trade, and, in the absence of such usages, to do so by some other method which should, in the exercise of reasonable care and prudence, promise to accomplish the object intended. It was therefore open to him to transmit the funds received in specie as they were collected ; or he could have purchased a bill of exchange, if opportunity served, at at that place, and transmitted that; or he could remit them in any other way deemeil most safe, convenient, and desira- ble to him, subject to the approval by his principles of the method adopted. It does not apper in the case but that Runnels was a merchant or banker, and accustomed to sell exchange upon foreign places. However that may be, he in fact sent to the plaintiffs, February 4, 1879, imme- diately upon collection, the proceeds thereof, less cost of collection and exchange ou the draft in suit. This was his own draft upon the defendant, Morris, at New York, at 90 daj's' sight. Upon the receipt of this draft by the plaintiffs, it was accepted by them, and remitted to New York for presentation to and acceptance by the drawee, and the same was accepted by him February 26, 1879. The sole question in the case is whether the plaintiffs were bona fide holders for value of the draft. We cannot doubt but that they were. If, on receiving the funds in question. Runnels had purchased with them a bill of exchange or draft from a mer- chant or banker, according to the usages of trade, and trans- mitted the same to the plaintiffs, no question could arise but that he acted as their agent in the transaction, and thoy would have been bona lide holders of such paper within all definitions of that character; and we are unable to see the difference in principle between such a case and the transaction in question. The funds collected by Runnels were, until they consented to their appropriation by him, at all times the properly of the plain- tiffs. Runnels' sole duty in relation to them was that of transmission to the plaintiffs, and until that duty was legally per- 189 ILL. CAS. ACCEPTANCE AND AGREEMENTS TO ACCEPT. [cH VI. formed he held them in a fiduciary capacity for a specified pur- pose. His duty of transmission could not be performed by remit- ting his own obligation, payable at a future day, except by the consent and approval of the plaintiffs. Until this consent and approval were given, the funds remained the property of the plaintiffs, and any use of them by Runnels before that time would have constituted a violation of his duty to his principals, which it cannot be presumed he committed. Doubtless the lack of adequate facilities of exchange between Rivas and Panama induced Runneh to offer, and the plaintiffs to accept, the mode of remittance adopted ; and it was entirely com- petent for Runnels to propose, and for the plaintiffs to accept, such a solution of the inconveniences of the situation; but no title to the funds collected passed to Runnels until the acceptance of the draft by the plaintiffs. After that, and not till then, he was entitled to use those funds as his own. By the original employment the plaintiffs contemplated no credit to Runnels, and he had no right to, and it does not appear that he even sup- posed he acquired any riglit to, use the funds in question for his own purposes, or that he ever did so use tiiem. The conventional relation of debtor and creditor never existed between Runnels and the plaintiffs until the acceptance of his draft upon Morris, and then those relations were governed by the liabilities existing by force of the draft alone. In accordance with the rule which precludes a court from presuming a viola.tion of duly by an indi- vidual, we must assume that Runnels performed his duty, and his whole duty, to the plaintiffs as their agent. This required him to safely keep their funds until he had transmitted them according to the usage of trade, or in some other mode approved by them. The legal effect of the method adopted was to transfer the title to the funds collected to Runnels simultaneously with the acceptance by the plaintiffs of Runnels' draft upon Morris, and was the pre- cise equivalent of the payment of so much money in the immediate purchase of a draft or bill of exception by one person from another. We are therefore of the opinion that the plaintiffs were the bona fide holders for value of the draft in suit, and are entitled to recover thereon. The general term conceded that the plaintiffs were bona fide holders, for value, of the bill before acceptance, but deny them that character after acceptance, as against the acceptor. We think the concession is fatal to the conclusion reached by that court. It is said that tlie Farmers' & Mechanics' Bank^;. Empire 8tone Dressing Co., 5 Bosw. 290, is authority for the position. It is true that some expressions of the learned judge writing in that case may justify the citation, yet it should be considered that those remarks were unnecessary to the decision of the case ; and the same court have twice since then refused to follow it. We conceive the rule there laid down finds no support in the doctrines of the text-writers or the reported cases. Philhriek v. Dallett, 2 Jones & S. 370 ; First Nat. Bank of Portland v. Schuvler, 7 Jones & S. 190 CH. VI.] ACCEPTANCE AND AGREEMENTS TO ACCEPT. ILL. CAS. 440 ; Pars. Bills & Notes, 323 ; Daniels, § 534 ; Edw. Bills (2d Ed.), 410. If a party becomes a bona fide holder for value of a bill before its acceptance, it is not essential to his riglit to enforce It against a subsequent acceptor that an additional consideration should pro- ceed from liiin to the drawee. The bill itself implies a repre- sentation by the drawer that the drawee is already in receipt of funds to pay, and his contract is that the drawee shall accept and pay according to the terms of the draft. 1 Pars. Bills & Notes, 323, 544; Arpin v. Chapin (Mass.), 3 N. E. Rep. 25. The drawee can, of course, upon presentment, refuse to accept a bill, and in that event the only recourse of the holder is against the prior parties thereto ; but in case the drawee does accept such a bill, he becomes primaii'y liable for its payment, not only to its indorsers, but also to the drawer himself. The delivery of a bill or check by one person to another, for value, implies a repre- sentation on the part of the drawer that the drawee is iu funds for its payment, and his subsequent acceptance of such check or bill constitutes an admission of the truth of the representation which he is not allowed to retract. Daniels Neg. Inst. 534 ; Pars. Bills & Notes, 323, 544, 545. By such acceptance the drawer admits the truth of the representation, and having obtained a suspension of the holder's remedies against the drawer, and an extension of credit by his admission, is not afterwards at liberty to controvert the fact as against a bona fide holder for value of the bill. The payment to the drawer of the purchase price fur- nishes a good consideration for the acceptance which he then undertakes shall be made, and its subsequent performance by the drawee is only the fulfillment of the contract which the drawer im- pliedly represents that he is authorized by the drawee to make. The rule that it is not competent for an acceptor to allege as a defense to an action on a bill that it was done without consideration, or for accommodation, as against a bona fide holder for value of such paper, fl^ws logically from the conclusive force given to his admis- sion of funds, and is elementarv. Daniels Neg. Inst., §§ 532- 534; Edw. Bdls, 410; Harper v. Worrall. 69 N. Y. 371; Com- mercial Bank of Loke Va'\q v. Norton, 1 Hill, 501 ; R'^binson v. Reynolds, 2 Q. B. 211; Hoffmann. Bank of Milwaukee, 12 Wall. 181. Of course, the cases determined upon the ground that the holder of sucli pa|)er received it to a[)ply upon an antecedent debt, or that it had been unlawfully diverted from the purpose for which it was designed, have no application to the circumstances of this case. The judgments of the courts below must therefore be reversed, and a new trial ordered, with costs to abide the result. All concur, except Miller, J., absent. 191 ILL. CAS. ACCEPTANCE AND AGREEMENTS TO ACCEPT. [CH.VI. Acceptance Once Delivered, Irrevocable, Except when Procured by Fi'aud. Trent Tile Co. v. Ft. Dearborn Nat. Bank of Chicago, 54 N. J. L. 33 (23 A. 423). Error to circuit court, Mercer county ; before Justice Scudder. Action by the Ft. Dearborn National Bank of Chicago against the Trent Tile Company on a bill of exchange. Judgment for plaintiff. Defendant appeals. Affirmed. The other facts fully appear in the following statement by napp, J. : — Riley drew a bill of exchange on the Trent Tile Company, the plaintiff in error, for $850, dated at Chicago, November 7, 1888, payable to the order of the defendant in error. The defendant in error forwarded the bill to the Mechanics' National Bank of Trenton for presentation and collection. The bank presented the bill to the drawee on the 12th of November, and its accept- ance, payable at the Mechanics' Bank, was indorsed on the bill by drawee's treasurer, and by him redelivered to the bank. There- after, and on the same day, the treasurer of tlie tile company learned that Riley had failed on the 10th of November. Oa the next day — 13ih — the treasurer applied to the cashier of the Mechanics' Bank for leave to revoke tiie acceptance, and to erase the indorsement and signature. This the cashier declined to per- mit, and notice thereupon was given the bank to refuse payment of the bill. At the time of the acceptance the drawer had no funds in the hands of the tile company, and was indebted to it. Under the facts set forth the circuit court of Mercer county ordered judgment for the plaintiff below for the amount of the bill and interest. The present writ of error is to review this judg- ment. Argued June term, 1891, before the Chief Justice, and Van Syckel, Knapp, and Garrison, J J. Knapp, J. (^after stating the facts'). The main question raised and discussed in tliis case is whether the drawee of a bill of exchange can, after an indorsement of acceptance and redelivery of the acceptance to the agent of the holder, on discovering the insolvency of the drawer, revoke such acceptance, the drawee having no funds of the drawer in his hands. The general rule is that an acceptance delivered to the holder is irrevocable, au I this is so whether the acceptance is on account of funds of the drawer of the bill in the hands of the acceptor, or for tlie accommodation of earlier parlies to tlie bill. Citation of authorities for the proposition of law would be superfluous. Tlie approved writers on the law of commercial paper and the adjudged cases are as one on this subject. Rand Com. Paper, pars. 216, 637. In com- mercial law, such an engagement, completed by delivery, can be discharged only by payment of the bill, release of the acceptance, or its waiver. An acceptance delivered to the agent of the holder duly authorized to receive it, is, in legal effect, and for all purposes, 192 CH.VI.] ACCEPTANCE AND AGREEMENTS TO ACCEPT. ILL. CAS. delivery to the bolder. When tlie bill bearing the signature of the acceptor by his act or direction comes into the hands of such agent, the contract becomes eo iustante a completed one between the acceptor and the f^rincipai owner of the bill. A bill of exchange forwarded to or delivered into the hands of a bank or banking-house for the purpose of presentation to the person upon whom the bill is drawn for his acceptance in the usual course of business is a transaction that creates tiie relation of principal and agent between such holder and the bank, wiih authority in such agent to receive in the holder's behalf delivery of the acceptance when signed. The Mechanics' National Bank of Trenton was therefore the agent of the plaintiff to procure in the plaintiff's name acceptance of the bill in question. The bill was presented to the defendant in dne course, and regularly accepted by its authorized oflicer, and delivered to such agent of the plaintiff. There would thus ap[)ear a (iuislied tian^action of legally binding force, vesting rights in the plaintiff which would not thereafter be divested witliout its consent. Tlie defendant, however, claims that it had the right to, and did, revoke its act of acceptance. The contention is grounded upon the authority of the well-known case of Cox u. Troy, 5 Barn. & Aid. 474, referred to by all the text-writers on negotial)le instruments since its decision. This case holds that, "where a defendant, [drawee], having once writ- ten his acceptance with the intention of acce|)ting a bill, after- wards changes his mind, and before it is communicated to the holder, or the bill delivered back to him, oblitei-ates his accept- ance, he is not bouuii as an acceptor. The propositions seemed so plainly just that the justices who decided the case said that the rule rested upon princi|)les of common sense. The case was simply this: A bill was handed to the drawee for his acceptance. Within the time allowed him for decision he had written his name upon the bill; then, on reflection, decided not to accept it, erased his name, and handed it hack to the party who had delivered it to him. Prior to this decision there were no dicta to be found of eminent English jurists tending to the doctrine that the mere act of signing in secret as an acceptor of a bdl bound the party so signing to the obligation of a completed contract; and in Thorn- tons. Dick, 4 Esp. 270, it seems to have been so decided. But this doctrine was ignored in Cox v. Troy, where the elemental principle was api)lied tliat the secret act of a party could ripen into a binduig contract only upon the intentional promulgation of such act by delivery or its equivalent. The transaction was in no true sense a revocation. It was a refusal to accept the draft. See, also, Bank of Van Diemen's Land v. Bunk of Victoria, L. R. 3 P. C. 52G. But it is not apparent how the defendant can profit by anything decided in the case of Cox v. Troy. It is no authority for the asserted ri^lit to revoke its act after delivery to the agent of the plaintiff. For such a right neither dictum nor authority has been found in any reported case determined upon principles of the common law. The case of Burrows v. Jemino, 13 193 ILL. CAS. ACCEPTANCE AND AGREEMENTS TO ACCEPT. [CH. VI. 2 Strange, 733, is cited as a case in point for the plaintiff in error. The point decided was tliat a man could not be sued in England on his acceptance of a bill of exchange abroad after he had been discharged from liability by the laws of the foreign jurisdiction. The custom referred to in the brief of counsel, and which received the consideration of the court in that case, was not the custom of merchants in England, bat the law as it existed in Leghorn, where the contract of acceptance arose. There, if the drawer failed, and the acceptor had not sufficient assets of the drawer in his hands at the time of the acceptance, the acceptance was void. But here, in the absence of fraud on the part of the plaintiff, which, it may be said, is feebly asserted, and in no degree sus- tained, the insolvency of the drawer, or the want of funds with the drawee, is no answer to his claim as a bona fide holder of the bill. The judgment below was in accordance with the foregoing views, and should be affirmed. 194 CHAPTER VII. THE TRANSFER OF BILLS AND NOTES BY DELIVERY AND IN GENERAL. Secti'^ /4. The assignability of choses in actionin general — Non-nego- tiable paper. 15. Transfer of negotiable bills and notes payable to bearer. 76. Liability of assignors of bills and notes payable to bearer. 77. Liability of broker in transfer of paper by delivery. 78. Transfer by delivery of paper payable to order. 79. Sale of bill or note without delivery. 80. Implied transfer of bills and notes. 81. Transfer by legal process — Attachment, garnishment, exe- cution. 82. Transfer donatio mortis causa. ^ § T4. The ussignability of choses iii action in gen- eral — Non-negotiable paper. — It is a well-known rule of the common l;iw that chosf^s in action cannot be a.ssigned, so ts to enaltle the assignee to maintain sm action upon it; and this is still the rule in the English-speaking wrr.'d, where it h.is not been changed by statute.^ At a very early day, the English Court of Chancery recog- nized the public demand for the assignment of at least cer- tain executory contracts ; and held such assignment to be V iliil, authorizing the assign<'C to compel the assignor to sue on the contract in his name. The courts of law ulti- mately recognized the validity of the assignment, so far as J Lord Coke tells us, in Lampet's Case, 10 Rep. 48: "The great wisdom and policy of the sages and founders of our law have provided iliat no possibility, title, riiiht, nor thing in action shall be granted or assigned to strangers, for that would be the occasion of multiplying of contentions and suits, of great oppression of the people, and chiefly of ti'rre-tenants, and the subversion of the due and equal execution of justice." See also Ilay v. Gr* en, 12 Cush. 282; Boston Ice Co. v. Potter, 123 Mass. 28 (29 Am. Rep. 9); Greenby v. Wilcocks, 2 Johns. (3 Am. l)ic. 379) ; aud general works on Contracts, such as Anson, Bishop or Lawaon. 195 § 74 TRANSFER OF BILLS AND NOTES IN GENERAL. [CH. VII. to permit the assignee to bring suit on the contract in the name of the assignor.^ In very many of the States, now, this common law rule has been completely abrogated by statute, so that the assignee of any contract, — with the exception of a few contracts of a personal character, which need not be referred to in this connection — may sue in his own name. But, prior to these modifications of the common law rule by Chancery, and by modern statutes, and certainly independently of them; a custom grew up among mer- chants, which was recognized by the common law courts as valid and binding, to recognize the right of the payee of bills of exchange and promissory notes to transfer the full legal title to the same. But in order that such assignee may acquire the full legal title, the bill or note had to con- tain all the required elements of negotiable paper, as they have been explained in cha[)ter II. If a paper was non- negotiable, even though it had in many respects the form and characteristics of a negotiable bill or note, the common law rule applied, and the assignee could only bring suit in the name of the assignor. ^ Another important difference between negotiable and non-negotiable paper is, that the latter is transferred sub- ject to all the defenses that may be set up against the original payee; whereas, in the transfer of a negotiable instrument to a bona fide holder, the latter takes it free from equitable defenses, i. e., those which do not ques- tion i\ie prima facie validity, and which do not appear on the face of the paper. ^ 1 Story V. Livingston, 13 Pet. 359; Fay v. Gaynon, 131 Mass. 31; McWilliams v. Webb, 32 Iowa, 577; and Anson, Bishop, or Lawson on Contracts. 2 Costello V. Crowell, 127 Mass. 293 (34- Am. Rep. 3G7); Backus v. Danforth, 10 Conn. 297; Prescott v. Hull, 17 Johns. 284; Johnstons. Speer, 92 Pa. St. 227 (37 Am. Rep. 675) ; Weidler v. Kauffman, 14 Ohio, 455; Hughes v. Frum, 41 W. Va. 445 (23 S. E. 604). 3 See post, chapter IX, on Bona Fide Holders as to the defenses which may be set up against them. See, also, as to non-negotiable paper, Cowthey V. Vandenburgh, lOlU. S. 572; Bradford u. Williams, 91 N.C. 7; Dyer v. Homer, 22 Pick. 253; Haskell v. Brown, 65 111. 29; Hunter v. 196 CH. VII.] TKANSFEll OF BILLS AND NOTES I\ GENERAL. § 75 The mode of cassignment of non-negotiable instruments differs in no respect from that of any other contract. Although some sort of written assignment is customarily employed, written either on the instrument itself or on a separate piece of paper; a verbal assignment with a deliv- ery of the instrument is equally effective to pa.ss the title; an equitable title, where the common law prohil)ition of a.-^signmcnt of choses in action still prevails; and a legal title, where it has been abrogated by statute.^ § 75. Transfer of negotiable bills and notes payable to bearer. — It was at one time thought that, in order that a bill or note mny be negotiahle , it had to be made payable to the^;«7/ee or his oi^der, or to tlie order o/the payee. But it has long been definitely established by the decisions, that a note or bill, payable to bearer^ or to A. (the payee) or bearer, was negotiable in the fullest sense of the term.-^ But negotiable bills or notes, which arc payable to bearer, may be transferred by delivery ; and the legal title to the same passes without any written transfer or indorsement.^ And this is likewise the case, where a bill or note, originally payable to order, is made payable to bearer by a prior in- dorsement in blank. ^ HenniDger, 93 Pa. St. 373; Wetter v. Kiley, 95 Pa. St. 461; Cohen v. Prater, 55 Ga. 203; Sharts v. Await, 73 lud. 304. * See Hill v. Alexander, 2 Kan. App. 151. 2 Walnut V. Wade, 103 U. S. 083; Eddy v. Bond, 19 Me. 461 (36 Am. Dec. 767); Truesdell v. Thompson, 12 Met. 565; Dean v. Hall, 17 Wend. 214; Hutchings v. Low, 1 Green (N. J. L.), 246; Carr v. LeFevre, 27 Pa. St. 413; Hathcock v. Owen, 44 Miss. 799; Smith v. Rawson, 61 Ga. 208; Avery v. Latimer, 14 Ohio, 542; Woodruff v. King, 47 Wis. 261 (2 N. W. 452) ; Johnson v. Mitchell, 50 Tex. 212 (32 Am. Rep. 002). 3 Ilolcomb V. Beach, 112 Mass. 450; Walnut v. Wade, 103 U. S. 683; Lyle V. Burke, 40 Mich. 41'«); 11.11 v. Allen, 37 Ind. 541 ; Coco v. Gumbel, 47 La. Ann. 900; Woodruff v. Kinj:, 47 Wis. 261 (2 N. W. 452) ; Lamb v. Matthews, 41 Vt. 42. But see, contra, by statute, requiring indorse- ment, Garvin v. Wiswell, 83 111. 215. * WatervlietBank v. White, 1 Denio, 608, Beall v. Gen. Elect. Co., &c., 38 N. Y. S. 527; Curtis v. Sprague, 51 Cal. 239; Bank of Lassen Co. r. Sherer, 108 Cal. 513 (41 P. 415); Bank of Winona v. Wofiford, 71 Mis. 711 (14 So. 262); Columbus Ins. Co. &c. Co. v. First Nat. Bank, 73 Mbs. 90 (15 So. 138). See Ilumphreyville r. Culver, 73 111. 485. 197 § 7(5 TRANSFER OF BILLS AND NOTES IN GENERAL. [CH. VII. § 76. Liability of assignors of bills and notes payable to bearer. — The popular notion is that, when ii bill or note is made payable to bearer, or where it is originally paya- ble to the order of the payee, and be indorses in blank, and thereby makes it, as to subsequent transferees, an in- slrumeiit payable to bearer, the assignor or transferrer not only can pass legal title to the same by delivery without indorsement ; but that he is free from all liability on such a note or bill, if he had acquired title to it in a lawful way. But this is not the law. The only difference between the liability of an indorser of paper payable to order and that of transferrer of paper which is payable to bearer, is that in the first case, the indorser guarantees the payment of such note or bill; whereas the latter does not. The trans- ferrer of a bill or note does not warrant the solvency of the maker or acceptor, respectively. There is some respectable authority for holding that where the maker of a note or the acceptor of a bill be- comes insolvent, the loss falls on the person who has title to such note or bill, when the insolvency occurs, and that he warrants the solvency of the primary obligor at the time of the transfer of the note or bill, whether he knew of the insolvency or not.^ But there are other cases, in which it is held that the transferrer is liable to the transferee on account of the insolvency of the maker or acceptor at or before the time of transfer, only when he knew of the in- solvency at the time of the tiansfer. That is, the trans- ferrer only warrants that at the time of the transfer he did not know of the insolvency of the maker or acceptor, and the consequent comparative valuelessness of the paper, ^ it being only a special a{)plication of the doctrine that the 1 Wainwright v. Webster, 11 Vt. 576 (34 Am. Dec. 707); Roberts v. Fisher, 43 N. Y. 159 (3 Am. Rep. G80) ; Merchants' Nat. Bank v. Spates 41 W. Va. 27; 23 S. E. 681; Westfall v. Braley, 10 Ohio St. 188 (75 Am. Dec. 509) ; Townsend v. Bank of Racine, 7 Wis. 185. See Springer v. Puttkamer, 159 111. 567 (42 N. E. 876). 2 Young V. Adams, 6 Mass. 182; Addrich v. Jackson, 5 R. I. 218; Ware V. Street, 2 Head, 609 (75 Am. Dec. 755) ; Popley v. Ashley, 6 Mod. 147; Bayard v. Shuuk, 1 Watts & S. 92 (37 Am. Dec. 441). 198 CH. VII.] TRANSFER OF BILLS AND NOTES IN GENERAL. § 7() transferrer warrants that he does not know of anything affecting the validity or value of the bill or note.^ The transferrer of paper payable to bearer may, of course, expressly guarantee the payment, either verbally, in a separate writing, or by indorsement ; and he will be bound thereby. 2 On the other hand, the transferrer warrants that the bill or note is free from any defense, which would affect the genuineness or validity of the paper, as an obligation of the maker, drawer or acceptor, or which would invalidate his own title tp the instrument. He is, therefore, liable if the signature of maker, drawer or acceptor or indorser has been forged,^ or any one of the^^e parties, whose names are on the paper, is incompetent to contract, because of some legal disability,* or the instrument is illegal and void.^ He also impliedly guarantees his own title to the paper.^ 1 See Bridge v. Batchelder, 9 Alleu, 394; Littauer v. Goldman, 72 N. Y. 506 (28 Am. Rep. 171) ; People's Bank v. Bogart, 81 N. Y. 101 (37 Am. Rep. 481J. 2 Bruce v. Burr, 67 N. Y. 237; Milks v. Rich, 80 N. Y. 269 (36 Am. Rep. 615"); McPherson Nat. Bank v. Velde, 49 111. App. 21. 3 Meyer v. Richards, 163 U. S. 885; Worthington v. Cowles, 112 Mass. 30; Bell v. Dagg, 60 N. Y. 528; Ross v. Terry, 63 N. Y. 613; Frank v. Lanier, 91 N. Y. 112; Terry v. Bissell, 26 Conn. 23; Allen v. Clark, 49 Vt. 390; Swanzey v. Parker, 50 Pa. St. 441 (88 Am. Dec. 549) ; Bankhead v. Owen, 60 Ala. 475; Challis v. McCrum, 22 Kan. 157 (31 Am. Rep. 181); Snyder v. Reno, 38 Iowa, 329 ; Giffert v. West, 37 Wis. 115; Brown v. Boone (Ky. '97), 41 S. W, 18. And see Spalding v. Gates (Ky. '97), 41 S. W. 440, as to requirement of diligence on the part of the assignee to notify and proceed against the assignor in such a case. * Baldwin v. Van Deusen, 37 N. Y. 487; Giffert v. West, 37 Wis. 115. It has, however, been held by the United States Supreme Court, that where the paper is somegovernmentor municipal bond, the transferrer is not lia ble, if the parties who executed and negotiated the bonds were not legally qualified to do so. Otis i;. Cullom, 92 U. S. 448. But see Meyer r. Rich- ards, 163 U. S. 385. And see Rogers v. Walsh, 12 Neb. 28(10 N. W. 467). 5 Young V. Cole, 3 Bing. N. C. 724; Costigan v. Hawkins, 22 Wis. 74 (94 Am. Dec. 583); Morrison v. Lovell, 4 W. Va. 346; Challis v. McCrum, 22 Kan. 157 (31 Am. Rep. 181). In New York, the assignor is liable as an implied guarantor of the legality of the bill or note, only when he knows of the illegality at the time of his transfer of it. Lit- tauer V. Goldman, 72 N. Y. 506 (28 Am. Rop. 171). 8 Baxter v. Duren, 29 Me, 434 (50 Am. Dec, 602). 199 § 78 TRANSFER OF BILLS AND NOTES IN GENERAL. [CH. VII. These warranties are implied, and hence they cannot be enforced, where the transferrer expressly withdraws them, and the transfer is made with an express disclaimer of con- tingent liability on the part of the transferrer. ^ § 77. Liability of broker in transfer of paper by de- livery. — Where a bill or note payable to bearer is sold through a broker, and he discloses his agency, and gives the name of his principal, the principal and not he will be bound by the implied warranties, which have been explained in the preceding section. ^ But if he conceals his agency altogether, so that he assumes the role of principal, or where he only fails to disclose the name of the principal, he is personally bound to the purchaser.^ The broker may in any case bind himself by an express warranty,^ or, where he is liable on these implied warranties, exempt himself from such liability by an express agreement.^ § 78. Transfer by delivery of paper payable to order. — The only complete way of transferring negotiable paper, which is payable to order, is by indorsement, and this is the only way in which the legal title to such paper may be transferred.^ But a delivery of a note or bill, payable to order, without indorsement, will pass the equitable title to such paper. ^ But where one has possession of a note or 1 Beal V. Roberts, 113 Mass. 525; Bell v. Dagg, 60 N. Y. 528; Ross v. Terry, 63 N. Y. 613. 2 76. 3 Cabot Bank v. Morton, 4 Gray, 156; Worthington v. Cowles, 112 Mass. 30; Morrison v. Currie, 4 Duer, 79. 4 Wilder v. Cowles, 100 Mass. 487. 5 Bell V. Dagg, 60 N. Y. 528. 6 See next cliapter for discussion of transfer by indorsement. ' Richards v. Stephenson, 99 Mass. 311; Hale v. Rice, 124 Mass. 392; Van Riper v. Baldwin, 19 Hun, 344; Forster v. Second Nat. Banli, 61 111. App. 272; Galway v. Fullerton, 17 N. J. Eq. (2 C. E. Gr.) 389; Jenkins V. Wilkinson, 113 N. C. 532 (18 N. E. 696) ; Miles v. Reiniger, 39 Ohio St. 499; First Nat. Bank v. Strang, 72 111. 559; Taylor v. Reese, 44 Miss. 89; National Bank v. Leonard, 91 Ga. 805 (18 S. E. 160); Corle v. Monk- house, 50 N. J. Eq. 537 (25 A. 157); Blesse v. Blackburn, 31 Mo. App. 264; Esau U.Greene Button Co. (Wis. '97), 68 N. W. 405. The title so ac- 200 CII. Vir.] TRANSFER OF BILLS AND NOTES IN GENERAL. § 78 bill payable to the order of another person, unindorsed, the presumption is that the title is in the latter, and the burden is on the one having possession to prove title. ^ A similar title to paper payable to order is acquired where the paper is assigned by deed or other separate instrument of assignment, whether it be accompanied by a delivery of the bill or note or not.^ In all such ca:>es, the transferee by assignment does not acquire the superior title of a bona fide holder. He does not acquire title in the usual course of business, and there- fore he takes title to the bill or note subject to all the defenses which might be set up against his assignor. ^ Sometimes, however, a delivery or assignment is made of a bill or note payable to order presently, and an indorse- ment is made subsequently. As soon as the indorsement is made, the transferee and indorsee becomes a bona fide holder. Where the subsequent indorsement is made in pursuance of a promise to indorse, contemporaneous with quired is properly called aa equitable title only in those States, in which assignments of chases in action in general are still valid only in equitable. But for the purpose of distinguishing the rights of such an assignee or transferee from those of an indorsee, it is still customary to call the title of such an assignee equitable, although statute has made the title legal, and enables the assignee to sue in his own name. ' Durein v. Moeser, 3(5 Kan. 441 (13 P. 797); Niess v. Coates, 57 111. App. 216. 2 Freeman v. Perry, 22 Conn. 617; Burdick v. Green, 15 Johns. 247; Burrows u. Keays, 37 Mich. 450; McGee v. Riddlesbarger, 39 Mo. 365; Osgood V, Artt, 17 Fed. 575; Foreman v. Buckwith, 73 Ind. 55; Franklin V. Twogoodj 18 Iowa, 515; Burnham v. Merchants' Exch. Bank, 92 Wis. 277 (66 N. W. 510); Wood v. Duval (Iowa, '97), 69 N. W. 1061. 3 Simpson y. Hall, 47 Conn. 417; Thomson-Houston Elec. Co. v. Capitol Electric Co., 56 Fed. 849; Losee v. Bissell, 76 Pa. St. 459; Freund v. Importers &c. Nat. Bank, 76 N. Y. 352 (transfer of an indor^ed check); Miller v. Tharcl, 75 N. C. 148; Benson v. Abbott, 95 Ga. 6'.» (22 S. E. 127); Matteson v. Morris, 40 Mich. 52; Sturges v. Miller, 80 111. 241; Patterson u. Case, 61 Mo. 439; Younker v. Martin, 18 Iowa, 143; Planters' &c. lus. Co. v. Funstall, 72 Ala. 142; Hale v. Hitchcock, 3 Kan. App. 23 (44 P. 446); Terry v. Allis, 16 Wis. 478; Hadden v. Rodkey, 17 Kan. 429; Hardie u. Mills, 20 Ark. 154. But see Brown v. Boone (Ky. '97), 41 S. W. 18, as to the implied duty of assignee to collect the note or bill so assigned. 201 § 79 TRANSFEIl OF BILLS AND NOTES IN GENERAL. [CH. VII. the assignment or delivery of the paper, the indorsement will relate back to the time of such assignment or delivery, po as to shut out all equities as effectually as if the indorse- ment had been made at or before the time of delivery.* And where the indorsement is subsequently refused, the assignor may be compelled to* indorse by a decree of the court for specific performance.^ But if there was no contemporaneous agreement for a subsequent indorsement, the indorsement operates from the time of indorsement, and the indorsee takes the paper subject to any defense which might come to his knowledge prior to the indorse- ment,^ except set-offs or counter-claims, which might otherwise be set up against him as assignee.^ § 79. Sale of bill or note without delivery. — It is a generally accepted principle of law, that a contract for the sale of goods or personal property will pass title without delivery, if such be the intention of the parties.^ And the same conclusion is reached, where the subject-matter of the sale is a bill, note, or check. The purchaser acquires a title to the same without delivery, which he can assert against every one but a subsequent holder for value, who acquires possession of the paper without notice of the prior sale.^ But, generally, delivery is essential to the transfer of title. And no title will pass on the executory contract of sale, unless the intention to pass title without delivery is clearly established.^ 1 Haskell v. Mitchell, 53 Me. 468 (89 Am. Dec. 176) ; Weeks v. Medlar, 20 Kan. 57; Brown v. Wilson, 45 S. C. 519 (23 S. E. 630); Birdsell Mfg. Co. V. Brown, 96 Mich. 213 (55 N. W.801). 2 Birdsell Mfg. Co. v. Brown, 96 Mich. 213 (55 N. W. 801). 3 Lancaster Nat. Bank v. Taylor, 100 Mass. 18 (97 Am. Dec. 70; 1 Am. Rep. 71); Clark v. Whitaker, 50 N. H. 474 (9 Am. Rep. 286); Beard v. Dedolph, 29 Wis. 136. * Ranger v. Carey, 1 Mete. 369; Beard v. Dedolph, 29 Wis. 136. 5 See Tiedeman on Sales, § 84. 6 See Shelden v. Parker, 3 Hun, 498; Meyer v. Richards, 163 U. S, 385; Allison v. Barrett, 16 Iowa, 278; Allison v. King, 21 Iowa, 302; Mabin v. Kirby, 4 Rich. Eq. 105. See Dryden v. Britton, 19 Wis. 22. ' Goodwin v. Davenport, 47 Me. 112 (74 Am. Dec. 478) ; Clarku. Boyd, 202 CH. Vri.] TRANSFER OF BILLS AND NOTES IN GENERAL. § 81 § 80. Implied transfer of bills and notes. — It is a gen- eral rule of the law of bailments, that where a thing is pledged to secure the payment of the debt, the assignment of the debt will by implication of law pass the title to fhe pledge to such assignee. And the same rule obtains, where the thing pledged is a bill or note.^ And a renewal of a note or bill will likewise carry by implication all paper held as collateral security for the original.^ § 81. Transfer by legal process — Attacliment, garnish- ment, execution. — The three principal legal processes, whereby property may be transferred to a creditor in sat- isfaction of his claim, are attachment, garnishment and execution. They are all the creatures of statute, and whether bills, notes and other commercial paper can be transferred by means of them for the satisfaction of the debts of the holder, depends upon the language of the local statute, under which the question arises. That is, each statute specifies what kinds of properly may be reached by attachment or execution, and pr()[)eity which does not come within the description contained in the statute, which pro- vides for the attachment or other process for the enforce- ment of debts, cannot be reached by means of such process. It is probable, however, that a creditor's bill in equity can reach commercial paper, in any case where attachment or execution is unavoidable. In some of the statutes, bills, notes, etc., are exi)ressly enumerated among the property Vt^hich may be reached by means of the statutory process; while in others choses in action are onl}'' referred to in 2 Ohio, 56; Mott v. Wright, 4 Biss. 53; Davis v. Johnson, 4 Colo. App. 645; Wulschner v. Sells, 87 lud. 71 ; Weader v. Bank, 126 Ind. Ill (25 N. E. 887) ; Meyer v. Richards, 163 U. S. 385. 1 Marston v. Allen, 8 M. & \V. 494; Walker v. Kee, 14 S. C. 144; Keohane v. Smith, 97 111. 156; Kelley v. Whitney, 45 Wis. 110 (30 Am. Rep. 697); Hall v. Mobile &c. R. R. Co., 58 Ala. 10; Updegraft v. Edwards, 45 Iowa, 513; Debruhl v. Maas, 54 Tex.;464; Carlton v. Buck- ner, 28 Ark. 60; Johnson v. Carpenter, 7 Minn. 176; Bell v. Simpson, 75 Mo. 485. 2 Kiddtr v. Mcllhanney, 81 N. C. 123. 203 § 82 TRANSFER OF BILLS AND NOTES IN GENERAL, [cil. \U. general terras. The student niust refer to the local statutes for a closer study of this question.^ § 82. Transfer donatio mortis causa. — The law, in respect to gifts made iu contemplation of death, is fully set forth in treatises on personal property, and a full dis- cussion of the general subject is not needed here. It is, however, advisable to state, for the refreshment of the memory of the student, that in order that the absolute title to the thing so donated may puss to the donee, and be enforceable after the death of the donor, the following conditions are required to be fulfilled: ( 1) the gift must be made in apprehension of death; (2) the donor must die of the same disease which created the apprehension of death; (3) the thing donated must have been delivered to and accepted by the donee or by some third person for him. At one time it was held to be doubtful whether a chose in action could be the subject of a donaiio mortis causa. It was first held, in relaxation of the original rule, that bills, notes, and other commercial paper, could be so transferred, where they were payable to bearer, or Avhere they were payable to order and indorsed by the donor. Finally, it was held, and it is the law to- day, that indorsement is in no case essential ; that where the jjaper was payable to the order of the donor, the donee, on delivery and acceptance, at least acquired an equitable title, which he could successfully assert against the personal representatives of the deceased donor, as well as against the i)arties to the note or bill.^ But the donor cannot make a valid donatio mortis causa of his own bill, note, or check, 1 For a summary of the statutory provisions, see Tiedeman on Com- mercial Paper, § 251. 2 House V. Grant, 4 Lans. 296; Stevens v. Stevens, 2 Hun, 470; Chase V. Redding, 13 Gray, 418; Hunt ?j. Hunt, 119 Mass. 474; Brovvn v. Brown, 18 Conn. 409 (46 Am. Dec. 338) ; Burke v. Bishop & Risley, 27 La. Ann. 465 (21 Am. Rep. 567) ; Ashbrook v. Ryon, 2 Bush, 228 (92 Am. Dec. 481) ; Darlaud v. Taylor, 52 Iowa, 503 (3 N. W. 510). 204 CH. VII.] TRANSFER OF BILLS AND NOTES, ETC. ILL. CAS- since his own paper is only an executory contract; and if it be without consideration, as is most likely in such cases, would not be an enforceable contract.^ ILLUSTRATIVi: CASES. Mumford v. Weaver, 18 K. I 801 (31 A. 1). Weader v. Frost Nat. Bank, 120 lud. Ill C-'5 N. E. 887). Willis V. Hcalh, 7d TvX. 12i (12 8. \V. 971). X) Ownership of and Right to Sue on,ljill or Note Indorsed ill Blank. Mumford v. Weaver, 18 K. I. 801 (31 A. 1). Per Curiam. The defendants plead that the note in suit is the property of one Maria S. Sanders, a resident of Massachu- setts, and that the plaintiff has no interest in the note, having received it after matuiity and without consideration, and that he holds it as custodian, merely, for the purpose of collecting it and paying the proceeds to the said Maria S. Sanders. The plaintiff demurs to the plea. The question thus presented for decision is whether the plaintiff is entitled, in the circumstances stated in the plea, to sue upon the note. We think he is. The plea does not aver that the plaintiff's possession of the note is mala fide. Any one in ])Ossession of a note indorsed in blank is prima facie the holder, and may sue upon it, until his riglit is disprove^ (Minn. '97), 71 N. W. 822. 211 § 83 TRANSFER BY INDORSEMENT. [CH. VIII. title of a bill or note, which is payable to bearer, unless the local statute provides to the contrary, ^ if such paper is iictuiilly indorsed, the indorser assumes towards the sub- sequent holders of the paper the same liability, which he sustains in his indorsement on paper which is payable to older. '^ Where the paper is non-negotiable, there is, generally speaking, no room for the application of the principles of indorsement. But, although it has been held in some cases, that the indorser of a non-negotiable bill or note does not assume any liability as a guarantor, unless he has made the indorsement " with recourse," or has expressly indicated in some other way his intention to assume the liability of an indorser ; ^ it is generally held that the implied liability of an indorser will attach in such a case, at least in favor of the immediate indorsee or transferee.* It is also held that the indorsement of a^on-negotiable instrument is an absolute guaranty of payment, and not dependent upon prior presentment and notice of dishonor.^ And so absolutely independent of the original contract is in such a case the contract of indorsement, that the indorser of a non-negotiable instrument cannot be joined in the same 1 In some States, the statutes require indorsement whether the paper be payable to bearer or order. Garvin v. Wiswell, 83 III. 215; Blacliman V. Lehman, 63 Ala. 547 (35 Am. Rep. 57). 2 Gilbert v. Nantucket Bank, 5 Mass. 97; Brush v. Reeves, 3 Johns. 435; Smith v. Rawson, 61 Ga. 208; Johnson v. Mitchell, 50 Tex. 213 (.32 Am. Rep. 602). 3 Klein v. Keiser, 87 Pa. St. 485; Cromwell v. Hewitt, 40 N. Y. 491 (100 Am. Dec. 527); Story v. Lamb, 52 Mich. 525; Merchants' Nat. Bank V. Gregg (Mich., 96), 64 N. W. 1052; Whisler v. Bragg, 31 Mo. 124; Sam- stag V. Conley, 64 Mo. 476. 4 Jones V. Fales, 4 Mass. 245; Raymond v. Middleton, 29 Pa. St. 529; Ransom V. Sherwood, 26 Conn. 437; Parker v. Riddle, 11 Ohio, 102; Wil- son V. Ralph, 3 Iowa, 450; Lynch v. Mead (Iowa), 68 N. W. 579; Carruth V. Walker, 8 Wis. 103 (76 Am. Dec. 235) ; Castle v. Candee, 16 Conn. 223 ; Gilbert v. Seymour, 44 Ga. 63; Seymour v. Van Slyck, 8 Wend. 403; Cromwell v. Hewitt, 40 N. Y. 491 (100 Am. Dec. 527) ; Snyder v. Oatman, 16 Ind. 265. * See cases in preceding note. But see contra, Sutton v. Owen, 65 N. C. 123. 212 CH. VIII.] THANSFER BY INDORSE3IENT. § 84 action with the maker of the note, or acceptor of a bill, as can be done where the paper is negotiable.^ But in order that one may indorse a non-negotiable paper and therel)y assume the implied liability of an indorser, the paper must be qnasi-negoivdhle; i. e. it must be of the general character of a bill, note or check, and lacking onl\ one or more of the requisites of negotiability. For exam- ple, one does not assume the liability of an indorser by indorsing a judgment. ^ Finally, an indorsement, in order that it may have the technical effect of an indorsement, must be full and com- plete. It cannot be partial. An indorsement to one, of a part of the amount called for by the bill or note, can only operate as an assignment ^?*o taiito of the paper, and such assignee cannot claim the superior character of a bona fide holder.^ But, as a matter of course, the bill or note may be indorsed to two or more jointly, each acquiring an aliquot share in the paper, but they must sue jointly.^ And so, also, there may be an indorsement in full to a third person, with a collateral agreement that the indorsee is to hold a part of the money due on the paper in trust for the indorser or some third person, without affecting the character of the indorsement.^ § 84. Liability of an indorser. — As already stated, indorsement has a dual legal character: fivnt, it is the means of transferring title to the bill or note which is in- dorsed ; secondly^ it is an implied contract of guaranty on the part of the indorser. In this connection, the latter phase of the indorsement will be considered. We are to ' Cochran v. Strong, 44 Ga. 036; First Nat. Bank of Trenton v. Gay, 71 Mo. G27. 2 Kelsey v. McLaughlin, 76 Ind. 379. 3 Ilughe-s V. Kiddell, 2 Bay, 324; Fordyce v. Nelson, 91 111. 447; Frank V. Kaigler, 30 Tex. 305; Hutchinson v. Simon, 57 Miss. 628; Scott v. Liddell, 98 Gi. 24 (25 S. E, 935). ♦ Flint, V. Flint, 6 Allen, 34 (83 Am. Dec. 615) ; Nat. Exch. Bank v. Silli- man, (!5 N. ¥.475; Conover v. Earl, 26 Iowa, 167; Herring v. Woodhull, 29 ir. 92 (81 Am. Dec. 200). « Reid V. Furniva!, 1 C. & M 538; 5 C. & P. 499. 213 § 84 TRANSFER BY INDORSEMENT. [CH. VIII. determine the scope and limitations of the liability of the indor&er as a guarantor or warrantor. Naturally, the indorser would be bound by the same Avarranties, which are imposed by law on the transferrer of paper payable to bearer. The indorser impliedly warrants that the prior parties, including drawer and acceptor of a bill, the maker of a note, and the indorsers of both, were competent to contract,^ that the signatures of all the prior parties to the paper are genuine and that he has a legal title to the paper, 2 and that the bill or note is legal and does not violate any law, such as the law against usury or gambling.^ In addition, however, to these implied warranties, which are imposed alike upon the indorser and the transferror of paper payable to bearer, the indorser guarantees that the instrument will be honored by the original [jarties at ma- turity, if duly presented for payment; and, if it be a bill, that it will l)e accepted when it is presented. But in either case, the intlorser is not lial)le unless notice of dis- honor is given to him by the holder within the time required. The guaranty of the indorsement is conditional upon the presentment and notice, and, if it is a case for protest, upon the making of the proper protest.^ 1 Bowman v. Hiller, 130 Mass. 153 (39 Am. Rep. 442) ; Erwin v. Downs, 15 N. Y. 575; Turner v. Keller, 66 N. Y. 66; Robertson v. Allen, 69 (9 Heisk.) Teun. 233. 2 Terry v. Bissell, 26 Conn. 23 ; Onondaga Co. Sav. Bk. v. United States, 64 Fed. 703; 12 C. C. A. 407; Chapman v. Rose, 56 N. Y. 137 (15 Am. Rep. 401) ; Colsou v. Arnot, 57 N. Y. 253 (15 Am. Rep. 496) ; Condon V. Pearce, 43 Md. 83; Howe v. Merrill, 5 Cush. 80; Fisli v. First Nat. Bank, 42 Micli. 203; Cochran v. Atchison, 27 Kan. 728; Dumont w. Wil- liamson, 18 Ohio St. 515 (98 Am. Dec. 186) ; Rhodes v. Jenkins, 18 Colo. 49 (31 P. 491; an irregular indorser). 3 Railroad Co. v. Schulte, 103 U. S, 118; Burrill v. Smith, 7 Pick. 291; Nat. Bank of Pittsburg v. Wheeler, 60 N. Y. 612; Stewart v. Bramhall, 74 N. Y. 85; Huston v. First Nat. Bank, 85 Ind. 21; Watson v. Cheshire, 18 Iowa, 202 (87 Am. Dec. 382); Fishy. First Nat Bk., 42 Mich. 203; Ward V. Doane, 77 Mich. 328 (43 N. W. 980 ; but indorsee must not know of the illegality). 4 Ogden v. Saunders, 12 Wheat. 313; Ray v. Smith, 17 Wall. 411; Field V. Nickerson, 13 Mass. 131; Cutler v. Parsons, 13 App. Div. 376 (43 N. Y. S. 187); Disborough v. Vanness, 7 N. J. L. (3 Hal.) 231; Freeman w. O'Brien, 38 Iowa, 406; Clark u. Trueblood (Ind. App. '97), 214 CH. VIII.] TUANSFEIt liY INDOKSEMENT. § 85 But the warranties, which are common to indorsements and transfers without indorsement, are absolute and not conditional upon presentment, protest and notice.^ § 85. Liability of indorser "without recourse. — An indorser m;iy by express agreement relieve himself of lia- bility for the dishonor of the bill or note, which he has indorsed, by inserting in the indorsement a qualification of his liability. Any words, expressive of the agreement, would be sufiicient ; but this qualification of his liability is usually indicated by the addition to the imlorsement of the words " without recourse." When an indorsement is made " without recourse," the indorser is not liable, if the primary obligor does not honor the paper :it maturity. Although, in commercial circles, an indorsement " without recourse" lowers the marketable value of the paper, it does not in law raise any presumption as to the financial responsibility of the parties, or cast any suspicion upon the legal character of the paper. ^ But an indorsement ** with- out recourse " does not relieve the indorser from anything but his implied guaranty that the paper will be duly hon- ored. He is still bound by the implied warranties of the competency of the parties, genuineness and legality of the instrument and the validity of his own title to it.^ 44 N. E. 679; Chapman v. McCrea, G3 Ind. 3G0; Selover v. Snively, 24 Kan. 672; Evans v. Baker (Kan. App. '97), 47 P. 314; Crim v. Stark- weather, 88 N. y. 339 (42 Am. Rep. 250); Allin v. Williams, 97 Cal. 403 (32 P. 441); State Sav. Bank v. Baker, 93 Va..510 (25 S. E. 550). See succeeding chapters X, XI, XII on Presentment for Paper, Protest and Notice. * Copp u. McDougall, 9 Mass. 1; Cochran v. Atchison, 27 Kan. 728. But see in this connection, Susquehanna Val. Bank v. Loorais, 85 N. Y. 207 (39 Am. Rep. 652). 2 Wilson V. Codman's Exrs., 3 Cranch, 195; Welch v. Lindo, 7 Cranch, 159; Fitchburg Bank v. Greenwood, 3 Allen, 434; Stevenson v. O'Neill, 71 111. 314; Bevan v. Fitzsimraons, 40 111. App. 108; Borden v. Clark, 26 Mich. 410; Mott v. Hicks, 1 Cow. 513 (13 Am. Dec. 550); Fassin v. Hub- bard, 55 N. Y. 465; Kelley v. Whitney, 45 Wis. 110 (30 Am. Rep. 697); Lawrence v. Dobyns, 30 Mo. 190; Cross v. Ilollister, 47 Kan. 652 (28 P. 693). 3 Ticonic Bank v. Smiley, 27 Me. 225 (46 Am. Dec. 593); Frazer v. 215 § 86 TRANSFER BY INDORSEMENT. [CH. VIII. § 86. Successive indorsements — Liability for contribu- tion and exoneration. — Indorsers guarantee the payment of the instruments to all subsequent indorsees, and for that reason they are liable in case of non-payment in the order in which their indorsements were made, each indorser being liable for the whole amount of the bill or note to every subsequent indorsee, but not to the prior indorsers. The indorsements are presumed to have beeu made in the order in which they appear on the paper. But, as between themselves, i. e., between the immediate indorsers and indorsees, the order may be changed by special agreement; or it may be shown by parol evidence that the actual order of indorsement was different from what it appears on the bill or note. Unless the parties have made an agreement to the contrary, each indorser is liable in solido to the suc- cessive subsequent indorsees, and any one or more of them may be sued in the same action. The holder cannot be required to join them all.^ If two indorsers appear on the face of the paper to have been joint payees or indorsees, their indorsements, although apparently successive, are really joint ; and if one pays the note or bill, he will have contribution from the other, to the extent of one-half, unless a special agreement to the D'Invilliers, 2 Pa. St. 200; Dumont v. Williamson, 18 Ohio St. 516 (98 Am. Dec. 186); Brown v. Ames, 61 N. W. 448; 59 Minn. 476; Watson v. Clieshire, 10 Iowa, 202 (87 Am. Dec. 382); Challis.u. McCrum, 22 Kan. 157 (31 Am. Rep. 181); Ware v. McCormack, 96 Ky. 139 (28 S. W. 959); Drennan v. Bunn, 124 111. 175 (16 N. E. 100); Hecht v. Batcheller, 147 Mass. 335 (17 N. E. 651); Spencer v. Halpern, 62 Ark. 595 (37 S. W. 711). 1 McCarty v. Roots, 21 How. 437; Germania Bank v. Follette, 72 Fed. 145; Shaw v. Knox, 98 Mass. 214; Kirschner v. Conklin, 40 Conn. 77; Easterly v. Barber, 66 N. Y. 433; Wolf v. Hostetter, 182 Pa. St. 292 (37 A. 988); Slack v. Kirk, 67 Pa. St. 380 (5 Am. Rep. 438) ; Bank of U. S. v. Beirne, 1 Gratt. 234 (42 Am. Dec. 551); Willis v. Willis, 42 W. Va. 522 (26 S. E. 515); Davis v. Morgan, 64 N. C. 576; Camp v. Simmons, 62 Ga. 73; Givens « Merchants' Nat. Bank, 85 111. 442; Williams v. Merchants' Nat. Bank, 67 Tex. 606 (4 S. W. 163); Hale v. Danforth, 46 Wis. 554 (1 N. W 284); Freeman v. Ellison, 37 Mich. 459; Sweet v. Woodin, 72 Mich. 393 (40 N. W. 471) ; Holmes v. First Nat. Bank, 38 Neb. 326 (56 N. W. 1011). 216 CH. VIII.] TRANSFER BY INDORSEMENT. § 87 contrary is shown. ^ Where two successive indorsees are not joint payees or indorsees, while the presumption is that they are successive indorsers, parol evidence is admis- sible to prove that they were in fact joint indorsers, in order to establish the claim of contribution of one from the other. ^ Where the bill or note is indorsed by the payee, and by one who is otherwise a stranger to the obligation, it is presumed that the indorsement of the payee is prior in point of time to the latter's indorsement. But if the latter is in fact the prior indorsement, this may be shown by parol evidence, in order to determine the liability of one to the other, but not to affect the rights of the bona fide holder against either.^ § 87. The place for indorsement — Allonge. — Of course the proper place for an indorsement is on the back of the bill, note or check ; for the literal meaning of indorse- ment is writinsj on the back. But in order that a sigruature and other accompanying writing may have the full effect of an indorsement, if made by the proper party, it is not necessary that it be put on the back of the paper. It may be written anywhere else on the paper; but in that case, it must be shown, in case of dispute, to have been written as an indorsement. But a signature or other signed written transfer of paper, which does not appear on some part of the bill or note, is not an indorsement, although it would operate as an effective assignment of the paper.* Where, 1 Lane v. Stacey, 8 Allen, 41 ; Hagerthy v. Phillips, 83 Me. 336 (22 A. 223); Hull v. Meyers, 90 Ga. 674; 16 R. E. 653; Vaa Patten v. Ulrich, 59 Hun, 628. But see Palmer v. Field, 76 Hun, 229. « Mulcare v. Welch, 160 Mass. 58 (35 N. E. 97) ; Slack v. Kirk, 67 Pa. St. 380 (5 Am. Rep. 438) ; Slagle v. Rust, 4 Gratt. 274; Giveus v. Merchants' Nat. Bank, 85 111. 442; Hale v. Danforth, 46 Wis. 554 (1 N. W. 284). But see contra, Johnson v. Ramsey, 4'i N. J. L. 279 (39 Am. Rep. 580). » McCarly v. Roots, 21 How. 437; Shaw v. Knox, 98 M iss. 214 ; Kir.^ch- D' r u. Conklin, 40 Conn. 77; Hubbard v. Guernsey, 64 N. Y. 457; SllUwell V. How, 46 Mo. 589; Hogue v. Davis, 8 Gratt. 4; Cady v. Sheppard, 12 Wis. 713; Moody V. Findley, 43 Ala. 167. * Com. V. Butlerick, 100 Mass. 1 (97 Am. Dec. 65); Haines v Dubois, 217 § 88 TRANSFER BY INDORSEMENT. [CH. VIII. however, by the frequent and numerous transfers of the paper, the entire avaihible space on the back has been exhausted in writing the successive indorsements, a piece of paper may be attached to the bill or note by mucilage or otherwise, and all additional indorsements may be written on this attached paper. The attached paper is called an allonge and becomes a pari of the instrument.^ § 88. Form of the indorsement. — An absolutely essen- tial element in every indorsement is the signature of the party who has the right to transfer the paper, and who intends by such indorsement to transfer the title to the bill or note. The full name should be given in the signature, and it is usual to do so, but the initials would suffice. ^ But it is really not necessary for the person who has the right to transfer the paper to use his customary signature. Any writing which was intended by such a party as a sig- nature, would be sufficient. Thus, the figures " 1, 2, 8 " placed on the back of a bill or note, with the intention of transferring title, was held to be sufficient to bind the transferrer as an indorser.^ If the indorsement does not consist simply of the sig- nature, it is usually accompanied by the words "pay to A. or order,* or " pay to the order of A." But it is not necessary to adopt this formula. As will be explained more fully in the next section, a simple signature of the payee or indorsee is sufficient; and where one desired to limit or qualify the indorsement, others such as " assigns," 30 N. J. 259; Arnott v. Symonds, 85 Pa. St. 99 (27 Am. Rep. 630); Quia V. Sterne, 26 Ga. 223 (71 Am. Dec. 204) ; Shaia v. Sullivan, 106 Cal. 208 (39 P. 606); Maniou Gravel Road Co. v. Kessinger, 66 lad. 553; Herring v. Woodhull, 29 111. 92 (81 Am. Dec. 296); Gorman v. Ketchum, 33 Wis. 427. 1 Folger V. Chase, 18 Pick. 63; Crosby v. Roub, 16 Wis. 616 (84 Am. Dec. 720); Fountain v. Bookstaver, 141 111. 461 (31 N. E. 17). 2 Merchants' Bank v. Spicer, 6 Wend. 443; Rogers u. Colt, 6 Hill, 322; Corganv. Frew, 39 111. 31 (89 Am. Dec 2SG). 3 Brown u. Butchers' and Drovers' Bank, 6 Hill, 443 (41 Am. Dec. 755). See to same effect, Flint v. Flint, 6 Allen, 34 (83 Am. Dec. 615). * Or bearer. 218 CH. VIII. ] TRANSFER BY INDORSEMENT. § 89 ("to A or his assigns ") would answer just as well, pro- vided language is not employed, which limits the liability of the transferrer. The transferrer is liable in any of these cases as an indorser.^ But there must be words of trans- fer. A guaranty is not a good indorsement.^ § 89. Indorsements in full and in blank. — When iin instrument is made payable by indorsement to A or order, or to the order of A, it is called an indorse7nent in fidl , and no one but the indorsee named can demand payment, unless lie in turn indorses. While it is proper for words of negotiability to be inserted in the indorsement, their absence from the indorsement will not destroy the further negotiability of the pai)er, as long as they are inserted in the body of the instrument.^ Where the payee or indorsee writes only his name on the back of the bill or note, it is called an indorsement in blank; and as long as it remains in that condition, the instrument is transferable by delivery, as if it was origi- nally payable to bearer. But the subsequent transferee ir.ay fill up the prior blank indorsement, by making it pay- able to the order of himself or of some one else, to whom he proposes to deliver it, and thereby make it an indorse- ment in full.* And where there are successive indorse- 1 Sears w. Lantz, 47 Iowa, G58; Shelby v. Jadd, 24 Kan. 161; Walker V. Krebaum, 67 111. 252. See Aniba v. Yeomans, 39 Mich. 171, and mite, §85. 2 Trust Co. V. Nat. Bank, 101 U. S, 68. But see contra, Meitz v. Wolfe, 28 Neb. 500 (44 N. W. 485^ ; Buck v. Davenport, 29 Neb. 407 (45 N. W. 77G) ; Packer v. Wetherell, 44 111. App. 95. And see Brothertou V. Street, 124 Ind. 599 (24 N. E. 10G8) (" sign" held to be sufficient) ; Maine Trust &c. Co. v. Butler, 45 Minn. 506 (48 N. W. 333) (assign sufficient); Marks v. Corey (Mich.), 66 N. W. 493 (assign is sufficient); Derry v. Holman, 27 S . C. 621 (2 S. E. 84 1, do) . 3 Potter V. Tyler, 2 Met. 58; Leavitt v. Putnam, 3 N. Y. 494 (53 Am. Dec. 322); Reamer v. Bell, 79 Pa. St. 292; Muldrowv. Caldwell, 7 Mo. 563. 4 Evans v. Gee, 11 Pot. 80; Central Bank v. Davis, 19 Pick, 374; Con- don V. Pearce, 43 Md. 83; Phelps v. Church, 65 Mich. 231 (32 N. W. 30) ; Morris v. Preston, 93 111. 215; Everett v. Tidball, 34 Neb. 803 (52 N. W. 816); Andrews ». Simms, 33 Ark. 771; Farr v. Ricker, 46 Ohio St. 265 (21 N. E. 354); Johnson v. Mitchell, 50 Tex. 212 (32 Am. Rep. 602); 219 § 90 TRANSFER BY INDORSEMENT. [cil. VIII. lueuts in blank, the holder may make any one of them an indorsement in full to his or another's order or he may fill them all up, making them indorsements to the order of the successive indorsers in blank, and thus show regular in- dorsements in full from the payee to himself. Where he makes one of the blank indorsements payable to his order, the other indorsers in blank are not thereby released from liability unless he cancels their indorsements.^ Indorsements in full, on the othor hand, cannot be made indorsements in blank, by striking out the superscription of the indorsement.^ § 90. Absolute, conditional and restrictive indorse- ments. — Most indorsements are geiierully what is called absolute; and the liability of the indorser is subject to the single condition that there must be a presentment for pay- ment and notice of non-payment to the indorser; and, whenever protest is required, that the bill or note so in- dorsed shall be duly protested for non-payment. But while it is very uncommon, other conditions m ly be at- tached to the indorsement, without destroying the negotia- bility of the p.iper. Until the stipulated condition is performed, the indorsee cannot demand payment, and payment to him before performance of the condition will discharge the obligation to the indorser of the maker of the note, or acceptor of the bill, which has been indorsed conditionally.-^ The more common kind of qualified indorsements is Skinner v. Church, 36 Iowa, 91; Custis v. Sprague, 51 Cal. 239; Jones v. Shapera, 57Fed.457; 6 C. C. A. 423; McAuliffe v. Renter, 63111. App. 255. 1 Craig V. Brown, Pet. C. C. 171; Bank v. Ellis, 9 Fed. 46; Cole v. Cushing, 8 Pick. 48; Ritchie v. Moore, 5 Munf. 388 (7 Am. Dec. 688); Chautauqua Co. Bk. v. Davis, 21 Wend. 584; Bank of America v. Senior, 11 R. I. 376. But if he cancels an indorsement in blank, he will thereby release the subsequent indorsers, unless it is done with their consent. Curry v. Bank cf Mobile, 8 Port. 360; Union Nat. Bank v. Grant, 48 La. Ann. 18 (18 So. 705). 2 Porter V. Cushman, 19 111. 572; Morris v. Poillon, 50 Ala. 403. 3 Robertson v. Kensington, 4 Taunt. 30; Soares v. Glyn, 14 L. J. Q. B. 313; Tappam v. Ely, 15 Wend. 362. 220 CH. VIII. J TRANSFER BY INDORSEMENT. § 90 what are known as restrictive indorsements, indorsements which are made with restrictions as to the purpose of the indorsement. Restrictive indorsements destroy the negotiability of tlie lull or note, as long as they are not canceled, or the restrictions not removed. An indorse- ment to "A only" or to the wse, or for the credit or account^ of the indorser or of some othei- person, is a restrictive indorsement.^ Another very common kind of restrictive indorsement is the indorsement " for col- lection." 2 The power of further transfer is taken away altogether by a restrictive intiorsement, and the restrictive indorsee is only empowered to hold or collect the money due on such bill or note, and apply it to the use or benefit of the per- son for whom the indorsement has been made. Inasmuch as the restriction is written on the back of the paper, a subsequent purchaser is charged with notice of the limited title of the indorsee.^ Such an indorsee cannot even bring suit on the bill or note, if it has been dishonored. The suit mnst be brought by the person for whose benefit the in- dorsement was made. This is undoubtedly the case where the indorsement is " for collection." ^ The restrictive in- 1 White V. Miners' National Bank, 102 U. S. 658; Wilson v. Holmes, 5 Mass. 543 (4 Ana. Dec. 75); Hook v. Pratt, 78 N. Y. 371 (34 Am. Rep. 539); Lawrence v. Fussell, 77 Pa. St. 460; Williams u. Potter, 72 Ind. 354; Johnson v. Mitchell, 50 Tex. 212 (32 Am. Rep. 602); Carrillo v. McPhillips, 55 Cal. 1.30. 2 Goetz V. Bank of Kansas City, 119 U. S. 551; Sweeney v. Easter, 1 Wall. 166; Fawsett v. Nat. Life Ins. Co., 97 111. 11 (37 Am. Rep. 95); Freeman's Nat. Bank v. Nat. Tube Works Co., 151 Mass. 413 (24 N. E. 779); Flanagan v Brown, 70 Cal. 254 (11 P. 706); Mechanics' Bank v. Valley Packing Co , 70 Mo. 643; First Nat. Bank v. Gregg, 79 Pa. St. 384; Rock Co. Nat. Bank v. Ilollister, 21 Minn. 385. 3 First Nat. Bank v. Reno Co. Bank, 3 Fed. 257; Hook v. Pratt, 78 N. Y. 371 (34 Am. Rep. 539); Bank of Carke Co. v. Oilman, 81 Hun, 486; Clanin V. VfW^o-a, 51 Iowa, 15 (50 N. W, 678); People's Bank v. Jefferson Co. Sav. Bank, 106 Ala. 524 (17 So. 728); Boyer v. Richardson (Neb. '97), 71 N. W. 981 ; and cases cited in preceding note. ■• White V. National Bank, 102 U. S. 658; Third Nat. Bank v. Nat. Bank, 102 U. S. 663; Rock County Bank r. Ilollister, 21 Minn. 385; U. S. Nat. Bank v. Crosley, 86 Iowa, 633 (.->3 N. W. 3.")2). 221 § 91 TRANSFER BY INDORSEMENT. [CH. VIII. clorseraent "for collection" or for the use or benefit of the indorser, may be recalled at any time as long as it has not been paid ; and an absolute indorsement, or presumably an assignment, to another would work an implied revocation of the restrictive indorsement.^ And where the indorser cannot recall the restrictive indorsement, as where it is to "A. only," a reindorsement to the indorser, or a second absolute indorsement by him to the restrictive indorsee, would restore the negotiability of the paper. ^ An agreement, attached to the indorsement, that the in- dorser shall not sell the bill or note so indorsed, docs not make it a restrictive indorsement. It is only a collateral agreement, the breach of which would only give rise to an action for damages.^ § 91. Time and place of indorsement. — Although the time of indorsement is of importance, in determining whether the indorsee is entitled to the protection of a bona fide holder,* the bill or note may be transferred by indorse- ment, and the indorser is bound by his guaranty of the honor of the paper, whether the indorsement is made before or after maturity.^ If the indorsement is not dated — and it is not custom- ary to date the indorsement — it is presumed, in the absence of evidence to the contrary, that it was made be- fore maturity, and that, therefore, the indorsee took the 1 Atkins V. Cobb, 51 Ga. 86; Brook v. Van Nest, 58 N. J. L. 162 (33 A. 382) ; Branch v. U. S. Nat. Bank (Neb. '97), 70 N. W. 34. 2 Fawsett v. Nat. Life Ins. Co., 97 111. 11 (37 Am. Rep. 95) ; Holmes V. Hooper, 1 Bay, 160; Marskey v. Turner, 81 Mich. 62 (45 N. W. 644) (oral agreement to transfer absolute title sufficient). 3 Leland u. Parriott, 35 Iowa, 454. See Equitable Ins. Co. v. Harvey (Tenn. '97), 40 S. W. 1092. 4 As to which, see post, § 107. 5 National Bank of Washington v. Texas, 20 Wall. 72; Baxter v. Little, 6 Met. 71 (39 Am. Dec. 707); French u. Jarvis, 29 Conn. 387; James v. Chalmers, 6 N. Y. 209; Leavitt v. Putnam, 3 N. Y. 494 (53 Am. Dec. 322); Brown u. Hull, 33 Gratt. 287; McSherry u. Brooks, 46 Md. 103; Powers v. Nelson, 19 Mo. 190; First Nat. Bank of Salem v. Grant, 71 Me. 374. 222 CH. VIII.] TRANSFER BY INDORSEMENT. § 02 paper free from any defect of title or other equitable defense. 1 The indorsement is also presumed to have been made at the place where the instrument was dated. ^ § 92. Irregular indorsements — Joint makers, guar- antors, indorsers. — It is a very common practice, in this country at least, for one to guarantee the payment of a bill or note, merely by writing his name on the back of the paper. Since he had not been payee or indorsee of the bill or note, he is not really an indorser; for an indorser is strictly one who transfers an instrument which is payable to his order by writing his name on the back of the instru- ment, and incidentally guarantees its payment. In the case under inquiry, he does not intend, nor in fact does he do more than, to guarantee the payment of the bill or note. Two difficulties are experienced in determining the char- acter in which he becomes liable. Firsts the statute of frauds requires all guaranties to be in writing ; and merely signing his name on the back r)f the paper, without stating for what purpose he has so signed, is not a compliance with the requirements of the Statute of Frauds. This objection could be avoided, if the facts warranted the construction that the party so signing became a joint maker of a note, or joint drawer of a bill. But in the case of notes so in- dorsed, the second difficulty will not have been overcome, viz. : that a party, so guaranteeing the payment of a note, expects to l)e notified of the dishonor of the paper, as a condition precedent to his liability on such indorsement. Joint makers of notes are not entitled to notice. In their attempts to avoid these dilemmas, the courts have reached contradictory conclusions as to the character 1 New OrleaLS Canal &c. Co. v. Moutgomer}-, 95 U. S. IG; Good v. Martin, 95 U. S. 90; Noxon v. DeWolf, 10 Gray, 343; Balch v. Onion, 4 Cush. 559; Pinkerton v. Bailey, 8 Wend. 600; Smith u. Nevlin, 89 111. 193; Dodd v. Doty, 98 111. 393; Mason v. Noonan, 7 Wi.s. (;09 ; Patterson V. Carrell, GO Ind. 128; Gage v. Averill, 57 Mo. App. Ill ; Smith v. Ferry, 09 Mo. 142; Rahm v. King-Bridge Mfg. Co., 16 Kan. 530. 2 Maxwell v. Vansant, 46 111. 58. 223 § 92 TRANSFER BY INDORSEMENT. [OH. VIII. in which such an indorseris to be held liable. There seems to he an unanimity of opinion, that where the paper is payr able to bearer, originally or made so subsequently by an indorsement in blank, a subsequent indorsement in blank is presumed to be a regular indorsement, and, at least a sub- sequent indorser, as against the payee named in the paper, and other indorsers, who have transferred the paper by indorsement.^ But when the signature of this irregular indorser precedes in point of place the indorsement of the payee, or when there is an unbroken line of indorsements in full from the payee to the present holder, in none of which does this irregular indorser appeur as an indorsee, it is plain that he has not become an indorser, by virtue of his prior character as payee or indorsee*. In the absence of parol evidence, showing his real character, it is left to judi- cial presumption to determine in what character he has bound himself by such an indorsement. Where his indorsement appears before the indorsement of the payee, it is not irrational to presume that it was put there before the negotiation of the instrument, that he signed as joint maker, and that the same consideration sup- ports his liability as well as that of the real maker. ^ And perhaps a plurality of the cases maintain, in contradiction of the real facts of most cases, that an irregular indorser \& prima facie liable as a joint maker. ^ * Dubois V. Mason, 127 Mass. 37 (34 Am. Rep. 335); Lank v. Morri- son, 44 Kan. 594 (24 P. 1106); Thaclier v. Stevens, 48 Conn. 5G1 (33 Am. Rep. 39); Armstrong v. Harshman, 61 Ind. 52 (28 Am. Rep. 665); Montgomery v. Crossthwalte, 90 Ala. 653 (8 So. 498) ; Frank v. Lilien- feld, 33 Gratt. 393; Hately v. Pike, 162 111. 241 (44 N. E. 461) ; Chicago T. & Sav. Bank v. Nordgren, 157 111. 663 (42 N. E. 148). 2 Good V. Martin, 95 U. S. 90; Hagar v. Whitmore, 82 Me. 248 (19 A. 444); Way v. Butterworlh, 108 Mass. 509; Spencer v. Allerton, 60 Conn. 410 (22 A. 778); Hayden v. Weldon, 42 N. J. L. 128 (39 Am. Rep. 551); Morrison Lumber Co. v. Lookout Mt. Hotel Co., 92 Tenn. 6 (20 S. W. 292); Stein v. Passmore, 25 Minn. 256; Blakeslee v. Hewett, 76 Wis. 341 (44 N. W. 1105) ; Miller v. Clendennin, 42 W. Va. 416 (26 S. E. 512). 3 Good V. Martin, 95 U. S. 90; Brooks v. Stackpole (Mass. '97), 47 N. E. 419; Peninsular Sav. Bank v. Hosie (Mich. '97), 70 N. W. 890; Rossi V. Schawacker, 66 Mo. App. 67; Woods u. Woods, 127 Mass. 141; Spauld- ing V, Putnam, 128 Mass. 363; Com. v. Powell, II Gratt. 828; Davidson 224 CH. VIII.] TKANSFEK BY INDORSEMENT. § 92 A great many cases, on the other hand, hold this irregu- lar indorser to be liable as a guarantor, and either hold that the Statute of Frauds does not apply to such cases, so as to require a writing of the terms of the guaranty above the guaranty, or concede to the holder the implied power to write out the guaranty above such an indorsement.^ Again, other cases hold him to be a joint-maker, with the liability of a guarantor.^ Finally, in other States, this irregular indorser is held to have the same liability and the same right of notice, as a regular indorser; in most cases, being treated as the second indorser in the absence of parol evidence to the contrary,^ although, at least in New York, where the indorsement of a stranger precedes that of the payee, the irregular in- dorser is presumed to be a Hrst indorser.^ V. Powell, 114 N. C. 575 (19 S. E. GOl) ; McCallum v. Driggs (17 Ro. 407); 35 Fla. 277; Owings v. Baker, 54 Md. 82 (39 Am. Rep. 353); Moy- nahan v. Hanford, 42 Mich. 329; Allison v. Kinne, 104 Mich. 141 (02 N. W. 152); Semple v. Turner, 65 Mo. 696; First Nat. Bank v. Payne, 111 Mo. 291; 208 W. 41 (peculiar case); Best u. Hoppie, 3 Colo. 139; Schullz V. Howard, 63 Minn. 198 (65 N. W. .363); Robinson v. Bartlctt, 11 Minn. 410; Salisbury v. First Nat. Bank, 37 Neb. 872 (56 N. W. 727) ; Houghton V. Ely, 2G Wis. 181 (7 Am. Rep. 52); Donohue-Kelly Banking Co. v. Puget Sound Sav. Bk., 13 Wash. 407, 411 (43 P. 359, 942) ; Provident Sav. L. Ass. Co. V. Edmonds, 95 Tenn. 53 (31 S. W. 168). 1 Parkhurst v. Vail, 73 111. 343; Boynton v. Pierce, 79 111. 145; Hol- brook V. Camp, 38 Conn. 23; Chaddock v. Vanness, 35 N. J. L. 517; Rivers v. Thomas, 1 Lea, 649 (27 Am. Rep. 784) ; Welsh v. Ebersole, 75 Va. 651; Robinson v. Abell, 17 Ohio St. 36; Crooks v. TuUy, 50 Cal. 254; Fuller V. Scott, 8 Kan. 254; Gumz v. Giegling (.Mich.), 66 N. W. 48; Varley v. Title Guarantee & T. Co., 60 111. App. 665. But see, as to what will support this presumption, Cozzens v. Chicago Hydraulic Press, etc., Co., 166 111. 213 (46 N. E. 788). 2 Syme v. Brown, 19 La. Ann. 147; Chandler v. Westfall, 30 Tex. 477; Killian v. Ashley, 24 Ark. 511 (91 Am. Dec. 519). 3 Phelps V. Visher, 50 N. Y. 69 (10 Am. Rep. 433); Ilt-ndrie v. Kin- near, 84 Hun, 141 ; Browning v. Merritt, 61 Ind. 425; Newbold v. Boraef, 155 Pa. St. 227 (26 A. 305) ; Johnston v. McDonald, 41 S. C. 81 (19 S. E. 65); Cady v. Shepard, 12 Wis. 713; Bradford v. Prescott, 85 Me. 482 (27 A. 461) ; Needhams v. Page, 3 B. Mon. 465; Perry v. Friend, 57 Ark. 437 (27 S. W. 1065) ; Buscher v. Murray, 21 D. C. 612; State Trust Co. V. Owen Paper Co., 162 Mass. 156 (by statute) ; 38 N. E. 438. •• Moore v. Cross, 19 N. Y. 227 (75 Am. Dec. 326); Jaffray v. Brown, 15 220 § 92 TRANSFER BY INDORSEMRNT. [CH. VIII. In very many of the States, now, the matter is regu- lated by statute ; in some, the irreguhir indorser being declared to be a guarantor, and in others, an indorser.^ In the absence of statute, controlling the question, the presumptions, heretofore explained as prevailing in the different States, are all rebuttable by parol evidence of the actual intent with which the irregular indorsement was made. Parol evidence is admissible to show that such an indorser intended to be bound, either as joint ranker, guarantor, surety or indorser.^ But if an indorsement is regular, i. p., it constitutes a link in the successive transfer of the bill or note from the piiyee to the last indorsee, parol evidence is not admissible to show that an indorser did not intend to be bound as such, at least as against a bona fide holder.^ 74 N. Y. 393; Bank of Port Jervis r. Darling, 91 Hun, 236; Wade «. Creighton, 25 Oreg. 455 (36 P. 289). 1 For a fuller discussion of this perplexing question, see Tiedeman Cora. Paper, §§ 270, 271. 2 Good •;;. Martin, 95 U. S. 90; Patch v. Washburn, 16 Gray, 82; Brown V. Butler, 99 Mass. 179; Eilbert v. Finkbeiuer, 68 Pa. St. 243 (8 Am. Rep 176) ; Owings v. Baker, 54 Md. 82 (39 Am. Rep. 353); Cahn v. Duaton, 60 Mo. 297; Baker v. Robinson, 63 N. C. 191; Browning v. Merritt, 61 Ind. 425; Eberhart v. Page, 89 111. 550; Worden v. Salter, 90 111. 160; Seymour v. Mickey, 15 Ohio St. 515; Holmes v. Preston, 70 Miss. 152 (12 So. 202). 8 Latham v. Houston Flour Mills, 68 Tex. 127 (3 S. W. 462) ; Howe V. Merrill^ 5 Gush. 80; Hauer v. Patterson, 84 Pa. St. 274; Long «. Campbell, 37 W. Va. 665 (17 S. E. 197); Finley v. Green, 85 111. 535; Doom V. Sherwin, 20 Colo. 234 (38 P. 56) ; Barnard v. Goslin, 23 Minn. 192; Simmons v. Camp, 64 Ga. 726. 226 CH. VIII.] TRANSFER BY IXDOKSEMENT. ILL. CAS. ILLUSTRATIVE CASES. Allin V. Williams, 97 Cal. 4C3 (32 P. 441). Watsou V. ChL'Sire, 18 Iowa, 202 (87 Am. Dtc. 382). Farr v. Ricker, 4G Oiiio St. 205 (21 N. E. 3.54). People's Bank v. Jefferson Co. Sav. Bank, lOG Ala. 524 (17 So. 728). Blakeslee v. Hewitt, 76 Wis. 341 (44 N. W. 1105). Authority of Agent to Indor.se for Principal — Ratifica- tion — Double Effect and Purpose of Indorsement. Allinw. Williams, 97 Cal. 403 (32 P. 441). Department 1. Appeal from superior court, Los Angeles county ; W. J. Clark, Judge. Action by Jolin Allin, trustee, against R. NYilliams, to recover a buhince due on a note indorsed by defendant. From a judg- ment for plaintiff, and an order denying a nevv trial, defendant appeals. Affirmid. IIauuison, J. In February, 1888, 10 individuals, including the |)laiiitiff and tlie defendant herein, borrowed upon their indi- vidual credit the sum of $10,000, for the use and benefit of the Pasadena Lake Vineyard, Land& Water Corapanj^ a corporation in which they were interested ($5,000 thereof from the San Gabriel Valley Bank, and $5,000 from a Mrs. Banta), for which they gave their joint and several notes. About a month after- wards the corporation paid to the defendant i\ sufficient sum of money therefor, for the purpose of taking up the notes and repay- ing the suras thus advanced, and (he defendant deposited the same with tlie San Gabriel Valley Bank, to the credit of " R. Williams et al." He immediately paid the loan that had been made by the bank, but Mrs. Banta refused to accept the money on her note, for the reason that it would not mature for nearly a year, and tliereujjon the money for its payment, viz., $5,221.98, was left in the bank to the aforesaid credit. Prior to this time the defendant had contracted to sell to one Webster certain real property in Pasndena, and Webster had contracted to sell a i)or- tion of the same property to one Wilson. Wei)StL'r was owing defendant $5,000 on his contract of purchase, and Wilson was owing to Webster a little more than this amount on his contract with him ; and on Apiil 18, 1888, in pursuance of an arrangement l)etween them for the i)nrpose of 1 quidaling these several obliga- tions, the defendant made a conveyance of the land to Wilson, Webster uniting therein. Wilson executed to the defendant his note for $5,000, payable February 10, 1889, and secured the same by a mortgage ui)on the land, made to the defenda it, as trustee for the 10 individuals who h;id signed the Banta not"; and on April 2Ist the defendant transferred the aforesaiil sum of $5,221.98 from the account of " R. Williams et al.," to his own personal account in the same bank. In September of that year several of these individuals exp essed a dissatisfaction with 227 ILL. CAS. TRANSFER BY INDORSEMENT. [CH. VIIl. his acts relating to the money, and thereupon the defendant, act- ing through his attorney, Wright, who was one of the 10, surren- dered to Wilson the aforesaid note and mortgage, and took from him a new note for $5,000, maturing February 10, 1889, payable to " R. Williams or order," together with a mortgage on the same property, securing its payment, and on the same day indorsed the note to the order of " John Allin, as trustee," the plaintiff herein, and assigned the mortgage to him "in trust for the benefit " of the 10 contributors, naming them. After the Wilson note had matured, the plaintiff brought an action thereon, making Wilson and the defendant herein defendants in the action. Wil- son suffered default, and the plaintiff, having dismissed the de- fendant herein from the action, took judgment against Wilson for the amount of the note, and for a sale of the mortgaged property. Upon the sale under that judgment tlie property was bid in by the plaintiff for the sum of $2,400, and the sheriff returned a defi- ciency judgment of $3,737. Thereupon the plaintiff, as trustee for the benefit of the 10 contributors, brought this action to re- cover from the defendant the amount of this deficiency. 1. The action against the defendant is for the purpose of en- forcing his liability as an indorser upon the Wilson note. The averments of a recovery of judgment in the action against Wilson, and of the proceedings thereunder, are for the purpose of show- ing that a portion of the note has been paid by subjecting the security given therefor to a sale, and thus determining the amount to be recovered from the defendant. The right to maintain an action against the indorser of a note whose payment has been secured by a mortgage given by the maker, after judgment has been recovered against themaker in asuit to foreclose, was estab- lished in Vandewater v. McRae, 27 Cal. 596. 2. The court finds that Wright, who was the defendant's at- torney, by whom the indorsement was made, was fully authorized to indorse the note, and there was sufficient evidence before it to authorize this finding. Aside from the general power of attorney which he had given him, the defendant directed Wright, at the time he was leaving the State, in September, just after objection had been made by the contributors to his disposition of the money, to fix the matter up to suit those who were making those objec- tions, and while he was absent from the State he sent a telegram to Wright to exercise his best judgment in arranging the matter. In addition to this, the defendant himself, after his return to Pasadena, indorsed upon the note a waiver of payment, present- ment for payment, protest and notice of protest, and the court was authorizeU to treat this act as an aflBrmance and ratification of the prior indorsement by his attorney. 3. The appellant contends that his indorsement of the note to the plaintiff was without consideration, and merely for the pur- pose of transferring the title thereto, and that he did not incur the liability of an indorser. An indorser may show, as between himself and his immediate indorsee, that the indorsement was 228 CH. Vni.] TRANSFEK BY INDORSEMENT. ILL. CAS. made merely for the purpose of transferring the note from a nominal bolder to the true owner, as from an agent to his i)rin- cipal ; or that the circumstances umler whicli the indorsement was made were such as would rend* r it inecjuitable to enforce an indorser's liability against him (McPlieison v. Weston, 85 Cal. 90 ; 24 Pac. Kop. 733) ; but in any such case the burden of estab- lishing such a defense to the apparent liabibty attendant upon his indorsement rests upon the indorser. The court below found upon evidence (which we thiidc ampl}' sustains its fuiding), that the " indorsement on the suid note was made for the purpose of. making tlie said defendant lial)le as an indorser of said note, and giving to the persons for whose benefit the plaintiff prosecutes this action the additional security of such indorsement and was made and received in settlement of the differences which ex- isted between the defendant and the said persons and that it is untrue that said indorsement was without considera- tion." When the money was placed in the hands of the defendant, he w^as but a mere depositary thereof for the purpose of pacing the Banta note, and after Mrs. Banta had refused to accept it until the note should mature, he still held it in trust for the 10 contributors, without any authority to make any other disposition of it. Although some of these contributors expressed an opinion that the money ought not to lie idle, but should earn as much interest as they were paying to Mrs. Banta, still the defendant does not claim to have had any express author- ity to make a loan of it, but seeks to uphold bis action by showing that there was a general desire that it should be loaned. He does not claim to have spoken specifically to more than three or four of the contributors, and they contardicted his statement, and, as well as the others, testified that the loan to Wilson was made without their knowledge. Under this evidence the court was authorized to find that the making of the loan to Wilson was his own act, and those for whom he held the money had the right to hold hiin responsible for any loss. They had tlie right to demand of him a transfer to another trustee of all of the money wliich had originally been placed in his hands for the purpose of paying tlie Banta note, irrespective of the use which he had made of it ; but, instead thereof, they agreed to accept a transfer of the Wilson note and mortgage, with the additional security of the defendant's indorse- ment. This was a direct advantage to the defendant, as it relieved him from the obligation to make immediate jjaymentof the trust money, and gave him the contingent advantage of having histtbli- gation entirely satisfied out of the mortgage security given by Wilson. The defendant docs not contend that there was any express agreement by which his indorsement of the Wilson note was to be taken in satisfaction of his liability for the money left with him in trust, but insists that the circumstances under which the indorsement was made show that it was so intended. Instead, however, of it appearing in the evidence that it was the intention 229 ILL. CAS. TRANSFER BV INDORSEMENT. [CH. VIII. of tie parties to accept the Wilson note and mortgage in satis- faction of the obligation of the defendant, the circumstances and negotiations between tliem at tLie time of the transaction show that the parties were dealing at arm's-length, and that the con- tributors were demanding the indorsement of the defendant as an additional security; and the court was justified in finding that it was given for that purpose. It is undoubtedly true that when a trustee holds funds which it is his duty to invest, and when the beneficiaries are interested chiefly in the income resulting from such investment, he will not be held liable for a depreciation of the security, or even for a loss in an investment that was made by him in good faith, and upon suitable security which was ample at the time of the investment. But tliis rule has no application to the present case. The defendant was a trustee of the moneys placed in his hands for the sole purpose of paying the Banta note, and when tliat could not be done his duty was merely to hold tlie money until those for whose benefit he held it should give him definite directions. He was at no time a trustee for the purpose of lending, or with power to lend, the money. The court, moreover, finds that his acts in making the loan were not only not authorized by the contributors, but also that the loan itself was not made in good faith. The land which he took from Wilson as security for the note was at the time held by him as security for an obligation of Webster to himself, and he was pressing Webster for payment. Although several of the witnesses testified that, in their opinion, the land was at that time a sufficient security for the loan, yet they were unable to corroborate their opinion by evidence of a sale of any land in that vicinity at any time between the transaction with Wilson and the time of the trial, and it appeared that within a little more than a year it sold for less tlian half the amount of the loan. It was also shown that lands were then declining in value, and Webster was himself willing to deduct Si, 200 from the amount due him from Wilson, in order to effect the arrangement by which Wilson should be substituted for him- self as the debtor to the defendant. These facts authorized the court to find that the defendant dealt with the trust property for his own profit, in violation of section 2229, Civil Code, and, con- sequently, that he did not act in good faith in making the loan. Section 2234, Id. 4. The judgment in the case of AUin v. Wilson is not set forth in the record, and we cannot say that it is of such a character as to constitute a bar to the present action. The mere filing of a dismissal with the clerk, or the entry of an order of dismissal in ihe minutes of the court, would not, of itself, constitute such a hSiV. The facts shown in reference to the dismissal justify the conclusion that it was filed before the hearing of the matter upon the default of Wilson. 5. It was not necessary that the plaintiff should have alleged in his complaint or shown an offer to assign to the defendant the deficiency judgment against Wilson, or that the judgment herein 230 CII. VllI.J TUANSFER BV IN'DOllSKMKNT. ILL. CAS. should direct that such assignment be made. Although anindor- ser is entitled, upon payment of a note which he has indorsed, or of a judgment against the maker rendered ttiereon, to an assign- ment thereof, yet such assignment is not a condition of the plain- tiff's right of recovery, but is a right accruing to the defendant by reasnn of his payment. 6. A coiisidt'ral)le portion of the brief on behalf of tlie appel- lant has been devoted to a discussion of the relative rights of llie plaintiff and the defendant in the property bought under the Wil- son judgment, as well as in the deficiency judgment, in case he shall satisfy tiie present judgment; and he argues tlierefrom that, as he is liable for only his sliare of the Baiila not% there can be no right of acliou against him until that share sliuU have been ascertained by a sale of the property bouiiht in under the Wilson judgment, and tlie means of collecting the deficiency judgment against Wilson sball have been exhausted. It is unnecessary for us, however, to pass upon tliese questions, as ttiey are not in- volved in lliis action. This is an ac ion by the plaintiff, as trustee for the 10 contributors, to recoverfrora t'le defendant the unpaid amount of the note taken by him fr )m Wilson, and indorsed to the plaintiff. The relative rights and obligations of the defend- ant towards the several contributors can be presented in an action for their adjustment at the settlement of the trust, after the Banta note shall have been paid. The judgment and order denying a new trial are aflfirmed. We concur: Garoulte, J. ; Paterson, J. Indorsement without Kecoiirse — Liability of Indorser. Watson V. Chesire, 18 luwa, 202 (87 Am. Dec. 382). This is a joint action, against John and Wesley Chesire and John M. Grifliih. Tlie facts, necessary to an understanding of the case, are as follows: Jolin and Wesley Chesire sold, May 15, 1858, Certain land in Mills County to one Moore, receiving, for I)art of the purchase-money, his note, secured by a mortgage on a portion of the land sold. Afterward, January 20, 18G0, the Chesires traded or sold the note and mortgage of Mooie (which note was dated May 15, 1858, was for tlie sum of $743, i)ayable one year after date, with ten per cent interest) to the defendant Griffith, receiving in pay- ment or exchange ninety acres of land, a mare and a heifer, vari- ously estimated by tlie witnesses as being worth from S250 to S400, and upwards. TJie Chesires indorsed to Gritfith the note and mortgage, without recourse to them. Afterward, about A[)ril, 18G0, Griffith traded or exchanged the Moore note and mortgage to the plaintiff, Watson, for certain land, aliO indorsing the same, without recourse. Watson sues tLe Chesires and Griffith on the indorsement. The nature of the pleadings and questions raised will appear in 231 ILL. CAS. TRANSFER BY INDORSEMENT. [CH. VIII. the opinion. Verdict and judgment for the defendants, and plaintiff appeals. Dillon, J. The first error assigned by the plaintiff is, that "the court erred in sustaining the defendants' demurrer to the first count of the petition." This makes it essential to set out the substance of this count with accuracy. It commences by alleging that John and Wesley Chesire held and owned the Moore note and mortgage, describing them ; that January 20, 1860, the said Chesires, for a good and valuable consideration (^but not alleging tvhat), sold and assigned said note to their co-defendant, Griffith, whereby they falsely war- ranted the said note to be genuine, unpaid and unsatisfied in any wa}^ ; that afterward GriflHth, assignee as aforesaid, sold and assigned said note to the plaintiff for a good and valuable con- sideration, whereby he, Griffith, falsely warranted, etc., as above ; that plaintiff relied upon said warranties and paid Griffith for said note ; that the said note, at tlie time the same was assigned by Chesires to Griffith, and by Giiffith to the plaintiff, "had been fully paid, extinguished, and nothing was due thereon from the said Moore to the defendants or either of them ; " whereby " the defendants fraudulently deceived the plaintiff, to his damage" in the amount of said note. Copies of these assign- ments are set forth, showing that they were made "■ loithont recourse." The first was an assignment in full by J. and W. Cliesire to "John M. Griffith or order, without recourse." The next was in blank, as follows: "Without recourse. John M. Griffith." To this the court sustained a demurrer, both in behalf of the Chesires and of Grifflih. We will consider the case, with respect to the Chesires, sep- arately and first. Upon con.sideration, we think the demurrer was righily sus- tained. It is only by treating this count as founded upon the indorse- ment, that the plaintiff's action against the Chesires has any color or plausibility. There is, except through the indorsement, no privity between the plaintiff and the Chesires. The latter sold the note to Griffith, and not to tlie plaintiff. The plaintiff purchased of Griffith, not of tlie Chesires. No transact on is alleged between the plaintiff and the Chesires. Hence, the plaintiff's right to sue the latter, if it exists at all, must exist by virtue of the contract of indorsement. Now if tills count be treated as one ex contractu upon the in- dorsement, it U not maintainable, because the indorsement, on its face, negatives and rebuts any personal liability on the part of the Chesires. This is the object and effect of an indorsement " without recourse." Such an indorsement transfers title, hut stipulates for exemp- tion from the ordinnry responsibility of an indorser. It will not, 232 CH. VIII.] TRANSFEK BY INDORSEMENT. ILL. CAS. however, protect the assignor from liability over from fraud and misrepresentation in the assignment of tlie note. In point, see Welch V. Lindo, 7 Crancii, 159; 2 Curtis' ed. 496; Epler v. Funk, 8 Pa. St. (8 Barr) 4G8, 469; Prettyman v. Short, 5 Har. (Del.) 360; Ricliardsou v. Lincoln, 5 Mete. 201; Rice y. Stearns, 3 Ma^s. 225 ; Waite v. Foster, 33 Maine, 424 ; Goupy V. Harden, 7 Taunt. 159, |ier Dallas, J. ; Cliitty on Bills, 218, 225, 235 ; Story on Notes, § 146 ; Lyons v. Miller, 6 Grat. (Va.) 427. Suppose it to lie tiue that, in the transfer of the Moore note by Chesires to Griffitli, the latter was deceived and defrauded. This would give Griffith his right of action against the former. Suppose it to I e true, also, that tjje plaintiff was deceived and defrauded by Griffitli. This would give him a right of action against the latter. He could not sue the Chesires for the fraud they practiced upon Griffith. S ) that the reasoning drives us back to the point at which we started, viz., the plaintiff cannot sue Chesires ex contractu, hav- ing had no transaction with them exceitt upon the indorsement. If the first count is treated as being founded upon that, it fails, because the indorsement itself not only does not create, but expressly avoids, a cause of action. (^Vide authorities above cited. ) The case presents the question, What, in the absence of special contract, are the obligations of the transferrer of negotial)le paper, who indorses it without recourse? It seems to us that the obligations of a transferrer of such paper, by indorsement icith- out recourse, are substantially the same as those of a transferrer of such paper when payable to beaier by delivery merely. It is a clear and well-settled doctrine, that such a transfer does not make the parly liable as indorser. When he indorses paper without recourse, or transfers it (if payable to bearer or if indorsed in blank) liy delivering merely, without putting his name upon it, he ceases to be a party to the paper. He cannot be made liable as a party to or upon the instrument. Tiiere may be a liability in such case.'!, but it arises upon the transaction, upon the facts of the ca?e, to be asserte(l in an action for the originai consideration or its value or for fraud practiced, and not upon the indorsement or upon the paper transferred. Speaking of the same general subject, in the well- known case of Jones v. Ryde, 1 Marsh. 157; 5 Taunt. 489, Gibbs, C. J., says: The ground of resisting this claim is, that it was a negoiial)le security without indorsement; anle's Bank, that it claimed the money due upon it, and that it was no longer negotialile paper. No one could purchase the instrument with th's indorsement, and claim protection as an innocent jiurciiaser against the true owner. Whosoever under- took to collect this pni)er thus indorsed, whether acting as the agent of tiie owner or the agent of the agent, knew that the money, when collected, ex aequo et bono, would belong to the owner of the paper. Any appropriation of it otherwise, with- out the consent of the owner, woul(i be unauthorized. This we understand to be the distinction between the legal effect of a restricted indorsement, such as " for collection," or " on account of," and a gener:il indorsement in blank, or " Pay to ," without restrictive words. When the defendant bank received the draft for colhction, and collected the money, it well knew, from the restricted indorsement, if there was no other agreement, that it belonged to the plaintiff, and not the Commer- cial Bank, and that the Commercial Bank had no title to it, nor any power to authorize the defendant l)ank to ap[)ly it or its pro- ceeds to the i)ayment of an indebtedness due it from the Com- mercial Bank. As between the owner and the collecting bank, the latter collected upon the terms and conditions expressed by the indorsement, irrespective of any understanding or agreement that may have existed belwe( n it and its principal, the agent of the owner. It couM not acqui»-e a right which its principal did not possess, and it knew its principal was a mere a-jent of the owner, for collection. No person or corpora' ion has any authority to apply money or property received and held by its debtor as agent or upon trust, with knowledge of the fact, in satisfaction of the debts of such agent. There is no question of an innocent pur- chaser for value in the case. It is contended for appellant that under the agreement and course of dealing between the plaintiff and its agent, the Com- mercial Bank of Nashville, as soon as the money was col- lected by the latter, the relation of debtor and creditor arose, and the ownership of the money vested in the Com- mercial Bank, and the collection of tlie money by the de- fendant and crediting it upon the indel)t"dness of the agent bank was, in law, the transmission of the money to the agent bank, as ir. ' 241 ILL. CAS. TRANSFER BY INDORSEMENT. [CH. VIII. much so as if actually placed in its vaults, and had the effect to create the relationship of debtor and creditor between plaintiff and the Commercial Bank. The plaintiff, by its restricted in- dorsement, gave notice to the Commercial Bank and the defend- ant that the draft, or the money when collected, belonged to it. No agreement between the Commercial Bank and the defendant, nor any method of bookkeeping nor of keeping accounts current, could divest the owner of its title to the draft of its proceeds. There are statements in some opinions of courts of high standing seemingly in conflict with our conclusion, but an examination of the facts of these cases will show the principle of law applied is not applicable to the present case. In tlie case of Bank v. Arm- strong, 148 U. S. 60; 13 Sup. Ct. 533, where the indorsement was "For collection," Mr. Justice Brewer, delivering the opinion of the court, declared that, as to the drafts which had been for- warded by the Fidelity Bank for collection to its agents, and which were not collected until after notice of its insolvency, the collect- ing banks, in making collections, acted as the agents of the owner of the drafts, and not as the agents of the Fidelity Bank ; that, as to drafts collected before the insolvency of the Fidelity Bank had been disclosed, and which had been credited by the subagents upon the drafts of the Fidelity Bank to them before notice of its insolvency, under the facts of the case, the collecting bank of subagent was not liable to the owner. The cuurt agreed with the conclusions of the trial court, which held that " the collection had been fully completed," and that the credit to the Fidelity Bank " was the same as though the money had actually reached the vaults of the Fidelity Bank." The facts of the case as stated in the" opinion showed that there was an agreement between the plaintiff and the Fidelity Bank that the latter was to i emit the 1st, 11th, and 21st of each month. Collections intermediate these dates were, by the custom of banks and the understanding of the parties, to be mingled with the general funds of the Fidelity, and used in its business. By the arrangement as ioiniermedi:ite col- lections, the relation of debtor and creditor exi-ted. The Fidelity Bank became the owner of the money, and was a debtor to the plaintiff. We are of opinion that the court based the con- clusion that the subagent was not liable to the plaintiff upon the fact that the money, when collected and credited under the arrangement made with the plaintiff, was the money of the Fidelity, and not the money of the plaintiff. It was the agreement between the plaintiff and its agent that remittances were to be made at stated periods only, and in the meantime the Fidelity Bank had the right to use the money in its busi- ness, which terminated the ownership of the plaintiff as soon as the money was collected by the Fidelity, and created the relation- ship of debtor and creditor. In discussing the question of col- lections by a subagent before and after " avowed insolvency " of the principal agent, the court was of opinion that the fact of collection by a subagent before notice of insolvency of its prin- 242 CH. VIII.] TRANSFER BY INDOHSEMENT. ILL. CAS. cipal was " not decisive" of its liability to the owner, and the decision was rested mainly upon the ovvner and its agent, by which the relation of debtor and creditor was established be- tween the days of remittances. In th'^ case of White v. Bank, 102 U. S. G58, the indorsement was, " Pay S. V. White or order for account of," etc. The court declared that the " indorsement is without ambiguity, and needs no exiilanation, either by parol proof or resort to usaj;e. The phun meaning of it is that the acceptor of the draft is to pay it to the indorsee for the use of the indorser. The intloisee is to receive it on account of the indorser. It does not jiurport to transfer the title of the paper, or the ownership of the money when received. Both these re- main, by the reosonable and almost necessury meaning of the language, in the indorser." In tlie cse of liank ?;. Ilubbell, 117 N. Y. 384, 39G; 22 N. E. 1031, the same distinction and rule is declared as held in 148 U. S., 13 8up. Ct., supra. The court says: "The lirm, l)y the arrangement, had the right to retain the moneys, and to remit weekly ; and, of course, from one week to another, it had tlie right to use the money, and the plainiiff relied upon the credit of the firm for such time as it had the right to retain the money." In the case of Mechanics' Bank v. Valley Packing Co., 70 Mo, 643, the indorsement was "Pay to D. or order for collection for account of C." The court held " that the restrictive indorse- ment destioyed the negotiability of the bill, and operated as a mere authority- to receive the proceeds for the use of the indorser." In the case of Dorchester & Milton Bank v. New Kngland Bank, 1 Cash. 177, the distinction between an indorse- ment in blank and a restrictive indorsement is fully declared. Maiuifaclureis' Nat. Bank v. Continental Bank, 12 Am. St. Rep. 598, 148 Mass. 553, 20 N. E. 193; PVeeman's Nat. Bank v. National Tube Works, 21 Am. St. Rep. 4G1, 151 Mass. 413, 24 N. E. 779. We are of opinion the distinction is clear, and the rule sound. Without it, ownership of the draft und money would be divested against the express contract of the indorsement, and without fault. Tlie case of Bank v. Weiss, 07 Tex. 331, 3 S. W. 299, lays down the broad rule tliat, where a bank or peison collects money upon a draft sent to it by the bank to which it was indorsed for collec- tion by the owner, with a rcsiricted indorsement, the agent col- lecting the money holds it in trust for the owner, and has no authority to ai)ply it to the paNment of any indelitedness due from tlie forwaniing bank, and that without reference to the question of notice of its insolvency. The agreement l)etween the plaintiff in the case at bar and the Commercial Bank did not auihorizr tin; latter to use the plaintiff's money at ari}' time in its bnsine.-s. A-« soon as collected, itw.is the duty of tlie C mraer- ci:il Bmk to notify the plaintiff of thti collection, and tin n plain- tiff would draw it out. According to the facts of the case, the collection was never credited to plaintiff, and the Commercial 243 ILL. CAS. TRANSFER BY INDORSEMENT. [CH. VIII. Bank ceased to do business, and its agency tei'minated by insol- vency before its contract with plaintiff was completed. We are of opinion under the facts of this case the plaintiff was entitled to recover, and a judgment will be here rendered to that effect. Reversed and rendered. Irregular Indorsement for Acconmiodation — Restric- tive Indorsement for Collection — Such Indorsee Agent of Indorser. Blakeslee v. Hewitt, 70 Wis. 341 (44 N. W. 1105). Appeal from circuit court, Clark county; A. W. Newman, Judge. Aciion by Maria S Blakeslee agaiust James Hewitt and others, on a promissory note. From the judgment for plaintiff, defend- ants appeal. Cole, C. J. The undisputed evidence in this case shows that all the indorsers signed the note u[)on which suit is brought before its delivery to the payee, to give credit to the maker, Colburn. This is the effect of the testimony of Ring ami Youmans, The former says, in substance, that it was understood that tlie indorsers should indorse the note to give Colburn credit for the purchase of the mill property, and that he indorsed as he agreed to. Youmans says he knew Colburn's signature and the other signatures on the back of the note ; that they were the signatures of the defendants Hewitt, Archer, Ring, and Youmans. The reason they signed as indorsers was as an accommodation to give credit to Colburn. Under these circumstances, they became liable to the paj'ee as indorsers. That is the rule laid down by this court in Cady v. Shepard, 12 Wis. 639. It has been followed in other cases. Davis V. Barron, 13 Wis. 254; Snyder v. Wright, Id. 689; King V. Ritchie, 18 Wis. 555; Frederick v. Winans, 51 Wis. 472, 8 N. W. Rep. 301. It is idle to say, in the face of this testimony, which is undisputed, that there is no proof to show, when Hewitt and Archer indorsed the note, whether it was before or after delivery to the payee, or that they indorsed it to give credit to the maker. The testimony is clear and satisfactory that they and the other indorsers indorsed it before delivery for the very purpose of giving credit to* the maker, and they should be held to their contract. The sssuraption that they might have signed as second indorsers on the responsibility of the payee, is in conflict with all the facts proven. Another objection taken is that there was no proof of a proper demand of payment and notice of dishonor given. The note was made payable at the Clark County Bank at Neills- ville. The cashier of that bank, who was a notary public, duly demanded payment of the note at the bank, and pro- tested the same for non-payment, and gave immediate notice to each of the indorsers. It appears that the note had been 244 CH. VIII.] TRANSFER BY INDORSEMENT. ILL. CAS. left with a bank at Sparta, doubtless for collection, and was sent by the latter bank to the Clark County Bank for the same purpose. It is said tliat it did not appear that the cashier of the Clark County Bank iiad any authority fiom the payee to present the note for payment. But the facts show that there was an implied authority for the Sparta bank to send the note to the Clark County Bank for collection, as was done. This authority is implied from the facts of the case, and it was so decided in Stacy V. Bunk, 12 Wis. 629. The Clark County Bank was unquestionably the agent of the Sparta Bank to collect the note for the owner thereof. Marine Bank v. Fulton Bank, 2 Wall. 252; Ward v. Smith, 7 Wall. 447. Where a bank is designated for the payment of a note, the common usage is for the holder to send it to such bank for collection, and the party bound for its payment can call and take it up. Umler such circumstances, the bank becomes the agent of the payee to receive payment. Ward V. Smith, supra. This doctrine is elementary, and no authority need be cite Ledwich v. Mcltim, 53 N. Y. 307; Redlick v. Doll, 54 N. Y. 234 (13 Am. Rep. 573); Bazendale v. Bennett, L. R. 3 Q. B. 527. But see Clarke V. Johnson, 54 111. 296. 2 Ilalsted V. Colvin, 51 N. J. Eq. 387 (26 A. 928). ■'' Michigan Bank v. Eldrcd, 9 Wall. 544, National Exchange Bank v. White, 30 Fed. 412; Bank of Pittsburg v. Neal, 22 How. 96; Market & 251 § 96 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. fide holder is held to be entitled to recover on an instru- ment which htis been filled up by an agent in violation of instructions, it will be found that the unauthorized additions or insertions conform in character with the object and pur- pose of the blank instrument. If the additional clause or sti[)ulation is not customarily inserted in a bill or note, the holder is charged with notice of its unusual character, and he is put to his inquiry to ascertain whether the agent is authorized to insert the unusual provision, whenever he knows that the paper has been completed by an agent. ^ And in all cases, the holder must show that he took the paper, which had been wrongfully completed by the agent, in good faith, for value and without notice of the violation of instructions by such agent. It has been held that where the holder knows that the instrument has been signed in blank, and its completion has been intrusted to an agent, he is charged with the duty of inquiring into the limitations of the agent's authority. ^ But the better opinion seems to be that he is permitted to presume that the agent has not exceeded his authority, as long as the paper does not contain any unusual or inconsistent provisions.^ Fulton N. Bk. v. Sargent, 83 Me. 349 (27 A. 192); Chase Nat. Bank v. Faurot, 149 N. Y. 532 (44 N. E. 164;; Am. Exch. Nat. Bank v. N. Y. Belting &c. Co., 148 N. Y. 698 (43 N. E. 163; Androscoggin Bank v. Kim- ball, 10 Cush. 373; Humphrey v. Finch, 97 N. C. 303 (1 G. E. 870); Geddes v. Blackmore, 132 Ind. 651 (32 N. E, 567) ; Snyder v. Van Doren, 46 Wis. 602 (32 Am. Rep. 739); Weston v. Myers, 33 111. 424; Hender- son V. Bondurant, 39 Mo. 369 (93 Am. Dec. 281) ; Joseph v. National Bank, 17 Kan. 256; Tabor v. Merchants' Nat. Bank, 48 Ark, 454 (3 S. W. 805) ; Shryver v. Hawkes, 22 Ohio St. 308. 1 Angle V. N. W. Mut. Ins. Co., 92 U. S. 331; McGrath v. Clark, 56 N. Y. 34 (15 Am. Rep. 372); McCoy v. Lockwood, 71 Ind. 319; Ivory v. Michael, 33 Mo. 398. 2 VanDuzerv. Howe, 21 N. Y. 531; Hatch v. Searles, 2 Sm. & Giff. 147; First Nat. Bank v. Compo. Board Mfg. Co., 61 Minn. 274; 63 N. W. 731; National Bank of St. Joseph v. Dakin, 64 Kan. 656 (39 P. 180); Bank of Topeka v. Nelson (Kan. '97), 49 P. 155, where the bill was nego- tiated without additional signatures. 3 See Angle v. N. W. Ins. Co , 92 U. S. 331 ; Snyder u. Van Doren, 46 Wis. 602 (32 Am. Rep. 739); McCoy v. Lockwood, 71 Ind. 319. As to the effect of an alteration of a completed instrument, as against a bona fide holder, see postf chapter on Forgeries and Alterations. 252 CH. IX.] RIGHTS OF BONA IIDE HOLDERS. § 98 § 97. Bill or note written over a blank signature. — But a diritinction should be recognized between signing a blank form of a bill or note, and intrusting the same to a stranger, whether it is given with instructions to fill, or without such instructions, on the one hand ; and on the other hand, writing one's name on a blank piece of paper, over which a third person, having obtained possession of it for some other purpose, writes out a promissory note or bill of exchange. As has been seen, in the former case, the bona fide holder has the right to presume that the agent, to whom the blank bill or note has been delivered, had the authority to fill it up and nego- tiate it; and that he filled it up and negotiated it in accord- dance with his instructions. But where one has merely written his name on a blank piece of paper — it matters not for what purpose, if it be not for the purpose of sign- ing some kind of contract — and some one, to whom the paper with the signature has been given, writes out over the signature a promissory note or bill of exchange, there is neither an implied authority to bind the party so writing his name by such a bill or note, nor negligence in intrusting the signature to a third ])erson, upon which can rest the claim that such a person is liable to a ho)ia fide holder as maker, drawer, or acceptor of such a note or bill. In such cases, the bona fide holder cannot recover.^ § 98. Bills or notes executed by mistake or under false representations. — Mistake and false representations are equitable defenses, which do not negative the existence of a prima facie legal contract; and hence, one would natur- ally suppose that these would not be good defenses in an action on a note or bill brought against a maker or a drawer by a bona fide holder; and, undoubtedly, this general i)rop- 1 First Nat. Bank v. Zeims, 93 Iowa, 140 (01 N. W. 483); Clioe v. Guthrie, 42 Ind. 227 (13 Am. Rep. 357); Nauce v. Lary, 5 Ala. 370 (in this case, one signed his name to a blank paper, with instruction to write over it a bond; held not liable on note written instead); Walker ». Eberly, 29 Wis. 194. 253 § 98 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. ositioii is well settled. ^ It does h;ippen, sometimes, ibal ignorant or careless persons are induced to sign a contiact, under a false representation as to its character, which is in fact a bill or note. The general drift of authority makes in this connection a distinclion i)etvveen persons who can read the [)aper and those who cannot. Where one is generally illiterate, or he is unable to read the language in which the contract is written, {)roof that he signed the contract under the false re[)resentati()n that iC was something else than a bill or note, will avoid such bill or note so signed even in the hands of a bona Jide holder. ^ But where one is able to read for himself, he is guilty of negligence if he permits the paper to be read to him, or is satisfied with an oral explanation of its contents and characte'r. If he has been misled or deceived, under such circumstances, he must suffer the loss, and he cannot defend himself against the claims of a bona fide holder.^ In some of the Western States, however, it has been held that false representations of the character of the instru- ment signed will be a good defense to an action on the same by a bona fide holder, if there appears to have been no negligence, short of confidence in the representations of the payee ; and in Illinois, such false representations are declared by statute to be a good defense to an action on a bill or note, even against a bona fide holder.* 1 See ante, § 94. 2 Putnam v. Sullivan, 4 Mass. 45 (3 Am. Dec. 206) ; Chapman v. Rose, 56 N. Y. 137 (15 Am. Rep. 401) ; Schuylkill Co. v. Copley, 67 Pa. St. 386 (5 Am. Rep. 441); Van Brunt v. Slngley, 85 111. 281; Fayette Co. Sav. Bank v. Steffes, 54 Iowa, 214 (6 N. W. 267); Kalamazoo Nat. Bank v. Clark, 523 Mo. App. 59 (o'd and feeble). 3 Chapman v. Rose, 56 (15 Am. Rep. 401); Ruddell v. Dillman, 73 Ind. 518 (37 Am. Rep. 152) Bank v. Johns, 22 W. Va. 520; Brooks v. Matthews, 78 Ga. 739 (3 S. E. 627); Ross v. Doland, 29 Ohio St. 473; Hopkins ??. llawKCye Ins. Co., 57 Iowa, 203 (10 N. W. 605) ; Carpenter v. First Nat. Bank, 119 111. 352 (ION. E. 18); Shirts v. Overjohn, 60 Mo. 305. * Hubbard r. Rankin, 71 111. 129; Auten v. Gruner, 90 III. 300; Gibbs V. Linabury, 22 Mich. 479 (7 Am. Rep. 675); Butler v. Karns, 39 Wis. 61 ; Palmer v. Sargent, 5 Neb. 223; Green v. Wilkie (Iowa, '96), 66 N. W. 1046. 254 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. § 100 § 99. Bills and notes executed under duress. — It is doubtful wlu'tlier a bona fide holder can recover on a bill or note, whose execution has been procured by duress; and the authorities are not afrrced. Some of the cases, hold- ing to the principle, that a contract executed under duress is voidable only, maintain that duress is not a good defense against a bona fide holder.^ Other cases, on the principle that where there is duress there has been no exercise of will power and hence no intentional delivery of the bill or note, have held ihwi {ha bona fide holder cannot maintain action on such a bill or note.^ As a general rule, only those persons who have signed a contract under duress may set up the defense of duress. But it has been held that where a surety or joint obligor takes the pa[)er without notice of the duress, he may defend any suit biougiit against him on the paper, at least as against the immediate parties.-^ And the same rule has been followed in the case of an accommodation indorser.^ § 100. Estoppel as affecting defenses against bona fide holders. — If the purchaser of a bill or note should, for the purpose of allaying his suspicious as to the validity of the paper, make inquiries of any party or parties to the in- strument before completing the purchase ; and these parties should give him assurances that the bill or note was valid, those who gave him such assurances would be estoi^ped from setting up defenses in any action brought against them on the instrument; at least in any case where they either knew or should have known at the time of the existence of such a de- fense, but not where the defense was discovered afterwards.^ 1 Clarke v. Pease, 41 Vt. 414; Griffith v. Sifgreaves, 90 Pa. St. IGl; Hogan V. Moore, 48 Ga. 15G; Duncan v. Scott, 1 Camp. 100; Farnaers &c. Bank v. Butler, 48 Mich. 102; Peckhara v. Ilendren, 7G Ind. 46. 2 Loomis V. Ruck, oG N. Y. 4G2; 1 Daniel Negot. Inst., §§ 857, 858. ■'' Hazard v. Griswold, 21 Fed. 178; Harris v. Carmody, 131 Mass. 51 (41 Am. Rep. 188); Coffelt v. Wise, G2 Ind. 451; Osborn v. Robbins, 36 N. Y. 3G5. ^ Griffith V. Sltgreaves, 90 Pa. St. IGl. ■' Tobey r. Chipman, 13 Allen, 123; Lynch c. Kennedy, 3t N. Y. 151; Fleischinan v. Stern, 90 N. Y. 110; Woodruff r. Munroe, 33 Ind. 14G; 255 § 101 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. There is a difference of opinion, however, whether snch an assurance would work an estoppel, where it is made in the form of a certificate, attached to the instrument by the primary obligors at its inception. It has been held that such a certificate would work an estoppel ^ and, also, that it would not. 2 Of course, the ordinary principles of estoppel apply in this case ; so that, in order that the bona fide holder may be protected tliereby, he must show that the representation was made before the purchase, and that he relied upon it, in making the purchase ; ^and, in an action on the estoppel, the holder can only recover the consideration he paid, 'plus interest, and not the face value of the instrument.* § 101. Wbat is meant by bona fide. — It has been very frequently stated that, in order that the holder of a bill or note may claim the right to protection from the defenses which do not appear on the face of the instrument, he must show that he took the paper in good faith. Mala fides would deprive him of this protection. He must hei\.honafide holder. Two constructions have been ph\ced upon this requirement of good failh. One rule is that to be a boyia fide holder, the indorser or transferee must have used due diligence in inquiring into any suspicious circumstances which may have surrounded the instrument or its negotia- tion, of which he became cognizant at the time. And if such an inquiry would have led to the discovery of the de- fense, he cannot claim to be a bona fide holder.^ But Reedy v. Brunner, 60 Ga. 107 ; Hefner v. Dawson, 63 111. 403 (14 Am. Rep. 123); Workman v. Wright, 30 Ohio St. 405 (31 Am. Rep. 546) ; Rose v. Hurley, 39 Ind. 77; Menaugh v. Chandler, 89 Ind. 94. 1 Insurance Co. v. Bruce, 95 U. S. 328; Bank of Rome v. Rome, 19 N. Y. 20 (75 Am. Dec. 272); Clark v. Sisson, 22 N. Y. 312. 2 Jaqua v. Montgomery, 33 Ind. 36 (5 Am. Rep. 168). 3 Crossan v. May, 68 Ind. 242; Sackett v. Kellar, 22 Ohio St. 554; Moore v. Robinson, 62 Ala. 537; Watson v. Hoag, 40 Iowa, 143. 4 Campbell v. Nichols, 33 N. J. L. 81. 5 Sanford u. Norton, 17 Vt. 285; Merritt v. Duncan, 7 Heisk. 156 (19 Am. Rep. 612); Marsh v. Small, 3 La. Ann. 402 (48 Am. Dec. 452); Adkins v. Blake, 2 J. J. Marsh. 40. 256 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. § 103 the great weight of authority in this country, as well as reason, supports the contrary doctrine, that the bona fide character of a holder can be destroyed only by proof of participation in or actual knowledge of the fraudulent or illegal character of the instrument.^ § 102. Bona fide holder must be a holder for value. — One cannot in his own character claim to be a bona fide holder of a bill or note, unless he can show that he has paid a valuable consideration for its transfer to him. The courts do not always express the requirement in the same way, but they are agreed that the consideration must be substantial. It must have a substantial value, although not necessarily adequate. But a consideration may be substantial and even adequate, although it be less than the face value of the bill or note, if it approximately repre- sents its market value. Several legal questions may, however, arise, where the consideration paid is less than the face value. They are the subjects of the three succeeding sections."^ § 103. When inadequacy of price constructive notice of fraud. — If I he price paid for the transfer of a bill or note be grossly inadequate, i. e., it is far below its real market value; it is undoubtedly true that the purchaser is thereby charged with constructive notice of the fraudulent or defective title of the vendor, or of the existence of some 1 Bank of Pittsburg v. Neal, 22 How. 9G; Swift v. Smith, 102 U. S. 446; Wing V. Ford, 89 Me. 140 (35 A. 1023); Smilli v. Livingston, 111 Mass. 342; Stimson v. Whitney, 130 Mass. 591 ; Chapman v. Rose, 5G N. Y. 137 (15 Am. Rep. 401); Seybel v. Nat. Currency Banlt, 54 N. Y. 288 (13 Am. Rep. 583) ; Craft's Appeal, 42 Conn. 146; Hamilton v. Vought, 34 N. J. L. 187; Second Nat. Bank v. Morgan, 1G5 Pa. St. 199 (30 A. 957) ; Lancaster Nat. Bank v. Garbcr, 178 Pa. St. 91 (35 A. 848); Walker v. Kee, 14 S. C. 142; Murray v. Beckwith, 81 111. 43; Pond v. Waterloo Agr. Works, 50 Iowa, 590; Ilowzy v. Eppinger, 34 Mich. 29; Central Nat. Bank v. Pipkin, 66 Mo. App. 592; Hamilton v. Marks, 63 Mo. 167; Kelley v. Whitney, 45 Wis. 110 (30 Am. Rep. 697) ; Johnson v. Way, 27 Ohio St. 374; Brothers V. Bank of Kankana. 84 Wis. 381 (54 N. W. 786). 2 As to the sufficiency of consideration in general, to make one a bona fide holder, see generally ante, chapter V. 17 257 § 104 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. defense to the liability thereon of the primary obligors and prior indorsers.^ But every price, which is less than the face value of the bill or note, is not necessarily inadequate or unsubstantial. Only that price is inadequate which falls below the market value. One-half the face value may, under some circum- stances, be a grossly inadequate price ; while under altered circumstances it may be greatly in excess of the real mar- ket value of the paper. Each case must therefore stand on its own merits; and where it can be shown that the price paid approximates reasonably the market value of the paper, there is no constructive notice of fraud or other equitable defenses, which would take from the purchaser the protection due to a bona fide holder."^ § 104. Inadequacy of price for indorsement as effected by laws against visury. — In many of the States, statutes are to be found which declare the exaction of more than a certain rate of interest for loans of money to be usurious and illegal, and impose various penalties for infrac- tions of the statute; and in a few cases, the instru- ment which is based on an usurious contract is declared to be absolutely void, even as against bona fide holders. Where the charge of usury is brought against the original parties to the bill or note, there can be no question of the validity of the charge, where it is shown that an usurious rate of interest has been exacted, whether it takes the form of interest to accrue in the future, or it is paid by way of discount from the face of the p:iper. But the dif- ficult question to be determined in this connection is, 1 Gould V. Stevens, 43 Vt. 125 (5 Am. Rep. 265) ; Tod v. Wick, 36 Ohio St. 370; Auteo v. Gruaer, 90 111. 300; First Nat. Bank v. Wade, Iowa (G3 N. W. 345); Chouteau v. Allen, 70 Mo. 290; Dewitt v. Per- kins, 22 Wis. 451; United States Nat. Bank v. McNair, 116 N. C. 550 (21 S. E. 389); Coliger v. Francis, 2 Baxter, 42 ; Hereth v. Merchants' Nat. Bank, 34 Ind. 380. 2 Phelan v. Moss, 67 Pa. St. 59 (5 Am. Rep. 402); State Bank v. Mc- Coy, 69 Pa. St. 204 (8 Am. Rep. 246); Bailey v. Smith, 14 Ohio St. 396 (84 Am. Dec. 385) ; Cannon v. Canfleld, 11 Neb. 506 (9 N. W. 693); Irby V- Blaiu, 31 Kau. 716 (3 P. 499). 2.38 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. § 104 whether the transfer of a bill or note by a payee or indorsee, for a sura less than the face value of the paper, is usurious, where the difference in amount between the face value and the price paid is more than the hiwful rate of discount. Where an indorsee takes the bill or note on the indorse- ment of the payee, when he knows that the payee is an accommodation indorser, the transaction will be usurious, it the discount from the face value is greater than the law- ful maximum rate of interest.^ But whore the payee is himself a holder for value, or where the indorsee does not know that he is an accommodation indorser, the transfer constitutes a sale of an existing obligation; and whether in such a case the law against usury applies is answered dif- ferently by the different courts. A few cases have held that even in such a case, the transaction is usurious, so that the indorsee's claim against all parties to the instrument is subject to the defense of usury, where the price paid by such indorsee constitutes a greater discount from the face value than what is allowed by the usury law.^ A greater number of cases have held that while the indorsement is iu such a case usurious, so far as liability of the immediate indorser is concerned, it does not affect the indorsee's title to the bill or note, or his claim against the primary obligors and prior indorsers.^ The third view, which is more consonant with the de- mands of the commercial world, and which is supported by the great weight of authority, is that the indorsement of an existing, complete bill or note is in every respect a sale of a commodity, and not " a loan or forbearance of money " 1 Veazie Bank v. Paiilk, 40 Me. 109; Lloyd v. Keach, 2 Conn. 175 (7 Am. Dec. 25(J); Nat. Bank of Auburn v. Lewis, 75 N- Y. 510 (31 Am. Rep. 484); Noble v. Walker, 32 Ala. 45G; May v. Campbell, 7 Humph. 450. 2 Whitwortli V. Adams, 5 Rand. 41!). 3 Kni2;ht v. Putnam, 3 Pick. 184; Ballinger v. Edwards, 4 Ired. Eq. 449; Armstrong v. Gibson, 31 Wis. CI (II Am. Kep. 699); Newman v. Williams, 29 Miss. 222. See Nichols v. Pearson, 7 Pet. 103; Gaul v. Willis, 20 Pa. St. 259. 259 § 105 RIGHTS OF BONA FIDE HOLDERS. [cH. IX. which comes within the provisions of the hiw iigtilust usury ; that this law does not in such a case affect either the lia- bility of the primary obligor and prior indorsers, or of the immediate indorser, to the indorsee. These cases hold, that where an indorsement is made at a discount from the face value of the bill or note, which would be usurious, if made in the original loan of the money on such bill or note, the transaction will not be considered usurious, and hence illegal, in any respect whatever ; and that such in- dorsee has his remedy on the bill or note, not only against the maker, drawer, acceptor and prior indorsers, but also against the immediate indorser.^ § 105. Inadequacy of price, as affecting amount which may be recovered of primary obligor and indorser. — Another occasion for contrariety of opinion is the determi- nation of the amount that the holder of a bill or note can recover of the drawer and acceptor or maker and prior indorsers on the one hand, and of the immediate indorser on the other, where he pays less than the face value for such bill or note. There is probably no contradiction of authority on the proposition that the holder can recover the full face value of the primary obligors and prior indorsers, where the transaction is not tainted with fraud, or other equitable defense. But where there is a defense to the action on the paper, which is available against the prior indorsee or payee, some of the cases hold that the holder can re- cover only the consideration he paid plus interest ; as the object of the doctrine of bona fide ownership is only to indemnify the bona fide holder against loss, on account of the non-liability of the prior parties to the bill or 1 Nichols V. Pearson, 7 Pet. 103; Fowler v. Strickland, 107 Mass. 552; City Banls v. Perkins, 29 N. Y. 554 (86 Am. Rep. 332) ; Brown u, Penfield> 36 N. Y. 473; Lloyd v. Reach, 2 Conn. 175 (7 Am. Dec. 256); Import- ers &c. Nat. Bank v. Littel, 46 N. J. L. 233; Gaul v. Willis, 26 Pa. St. 259; Roark v. Turner, 29 Ga. 455; National Bank v. Green, 33 Iowa, 140 > Nobler. Walker, 32 Ala. 450; Bunzel u. Maas (Ala. '97), 22 So. 568; Lee V. Pile, 37 Ind. 107. 260 CH. IX.] RIGHTS OF BONA FIDE IIOLDEKS. § 106 note.^ Other decisions, on the other hand, maintain that in every case, where suit can be maintained at all, the bona fide holder can recover the full face value of the primary obligors and prior indorsers.^ Other cases, again, main- tain that only the consideration actually paid can be recovered of the drawee, acceptor or maker, where the one sued has signed the paper for accommodation, and the holder knew that fact when ho took the paper. ^ The same contradiction of authority exists in determining how much, in case of inadequacy of price, can be recov- ered of the immediate indorser ; some of the authorities maintaining that the full face value can be recovered,* while other cases maintain that only the consideration paid can be recovered of such immediate indorser.^ § 106. Usual course of business. — No one can claim to be a bona fide holder, so as to secure in his own person the protection against the so-called equitable defenses, unless he has acquired title to the bill or note, in what is called " the usual course of business." This means that he must 1 Stoddard v. Kimball, 6 Cush. 469; Clark v. Sisson, 22 N. Y. 312; Gordon v. Boppe, 55 N. Y. 605; Ilolcomb v. Wyckoff, 35 N. J. L. 35 (10 Am. Rep. 219) ; Oppenheimer v. Farmers' &c. Bank, 97 Tenn. 19 (36 S. W, 705); Exchange Bank v. Biitner, 00 Ga. 654; Bailey v. Smith, 14 Ohio St. 396 (84 Am. Dec. 385); Grant v. Kidwell, 30 Mo. 455; Buchanan u. International Bank, 78 111. 500; Curtis v. Mohr, 18 Wis. 645; Petri v, Fonddu Lac N. B., 84 Tex. 212 (20 S. W. 777). 2 Cromwell v. County of Sac, 96 U. S. 51; Kailroad Companies u. Schutte, 103 U. S. 118; Wade v. Chicago &c. R. R. Co., 149 U. S. 327; Lay u. Wissman, 30 Iowa, 305; Schoen v. Houghton, 50 Cal. 528; U. S. Nat. Bank v. McNair, 116 N. C. 550 (21 S. E. 389); Bissell v. Dickerson, 64 Conn. 61 (29 A. 473). 3 Dresser v. Mo. &c. Ry. Co., 93 U. S. 92; Hubbard v. Chapin, 2 Allen, 328; Lay v. Wissman, 36 Iowa, 305. See Daniels v. Wilson, 21 Minn. 530, where this rule is held to apply only where the cause of action is subject lo some defense not appearing on the face of the paper. < Durant v. Banta, 26 N. J. L. 624; Lloyd v. Keach, 2 Conn. 175 (7 Am. Dec. 25G) ; Moore v. Baird, 30 Pa. St. 139; Roach v. Turner, 29 Ga. 455; National Bank v. Green, 33 Iowa, 140. ^ Munn V. Commission Co., 15 Johns. 44^(8 Am. Dec. 219); Cage v. Palmer, 16 Cal. 158; Noble v. Walker, 32 Ala. 456. 261 § lOfi EIGHTS OF BONA FIDE HOLDERS. [CH. IX. have acquired the paper in the course of a common and customary negotiation of it. The character of the consid- eration does not affect the question; and it has been held that the transfer of a bill or note in payment of a pre-ex- istinsf debt has nevertheless been made in the usual course of business.^ It is the character of the transfer which determines the question, whether it has been made " in the usual course of the business." If the paper is payable to order, any transfer except by indorsement by the payee or last indorser will not be in "the usual course of business," and the transferee takes the bill or note subject to equitable defenses. ^ And whether the paper be payable to order or to bearer, invol- untary transfers, as to assignees in bankruptcy or receivers, or even to assignees for the benefit of creditors, are not held to be made in the usual course of business; and such transferees take negotiable paper subject to whatever defenses may be available against their assignors.^ Whether a negotiation of a bill by an acceptor is a usual course of business, so as to enable the transferee to claim the protection of a boria fide holder, has been decided in the affirmative* and in the negative.^ 1 Swift V. Tyson, 16 Pet. 1; Schepp v. Carpenter, 51 N. Y. 602; Hotchkiss V. Fitzgerald &c. Plaster Co., 41 W. Va. 375; 23 S. E. 576; McPherson v. Bondreau, 48 La. Ann. 431 (19 So. 550); Robinson v. Lair, 31 Iowa, 9. See Burnham v. Merchants' Exch. Bank, 92 Wis. 277 (66 N. W. 510). 2 Lancaster Nat. Bank v. Taylor, 100 Mass. 18 (97 Am. Dec. 70; 1 Am. Rep. 71 ) ; Mills v. Porter, 4 Hun, 524 ; Gibson v. Miller, 29 Mich. 355 (18 Am. Rep. 98); Sturges v. Miller, 80 111. 241; Losee v. Bissell, 76 Pa. St. 459. See ante, § 78, 83. 3 Billings V. Collins, 44 Me. 271; Roberts v. Hall, 37 Conn. 205 (9 Am. Rep. 308) ; Litchfield Bank v. Peck, 29 Conn. 384; Stephens v. Olson, C2 Minn. 295; 64 N. "W. 898 (transfer to new partnership). But see Earhart v. Gant, 32 Iowa, 481, where a contrary ruling was made under ihe statute. And see also Irby v. Blain, 31 Kan. 710 (3 P. 499); Jones v. AViesen (Neb. '97), 69 N. W. 762, where such purchaser is held to have all the rights of an indorsee without recourse. * Morley V. Culverwell, 7 M. &W. 174; Witte v. Williams, 8 S. C. 290 (28 Am. Rep. 294). '" Central Bank v. Hammett, 50 N. Y. 158. 262 CH. IX.] RIGHTS OF BOXA FIDP: HOLDERS. § 107 § 107. Transfer before aud after maturity. — The universal rule of the law of commercial paper is that a bill or note ceases to be negotiahle when it becomes clue, and can afterwards \)Q,u\i\y a^iKigned, i. e., transferred with- out giving to the transferee any better title than what his assignor or transferrer had. The fact that the paper is overdue is sufficient to throw upon the transferee the duty of inquiring why it was not paid at maturity.^ But the indorsee after maturity takes the paper subject only to those equities which arose between the original parties, and between himself and the primary obligor or his imme- diate indorser. He does not t ike the paper with notice of equities which arose between intermediate indorsers and indorsees.'-^ Where one sisrns a bill or note for accommodation, whether as primary obligor or indorser, it has been held that he is bound to an overdue indorsee, whether he knows of the character of his obligation or not; unless he signs with the agreement or understanding that the paper is to be negotiated before maturity or within a stipulated time, and the overdue indorsee knows that he has signed for accommodation. In the latter case, such overdue indorsee takes the paper, with constructive notice of the defense which such accommodation obligor has, and cannot hold 1 Texas v. Hardenberg, 10 Wall. (i3; Ferree v. N. Y. Security &c. Co., 74 Fed. 709; Hinckley v. Union Pac. R. R. Co., 129 Mass. 52 (37 Am. Rep. 297) ; Simpson v. Hall, 47 Conn. 417; City Bank of Dowagiac v. Dill, 102 Mich. 305 (60 N. W. 707); Marsh v. Marshall, 5.S Pa. St. 390; Quimby V. Sfod lard (N. H.), 35 A. 1106; Leach v. Funk (Iowa, '90), GC N. W. 7G8; Charke v. Dederick, 31 Md. 148; Davis v. Noli, 38 W. Va. 66 (17 N. E. 791); K Hogs? v. Schnaake, 56 Mo. 130; Lee v. Turner, 89 Mo. 489 (14 S. W. 505); Kittle v. Dolamater, 3 Neb. 325; Scolt r. First Nat. Bank, 71 Ind. 445: Kernohan v. Durham, 48 Ohio St. 1 (26 N. E- 982); Greenwell v. Haydon, 78 Ky. 333 (r,9 Am. Re;). 2:U); Walker r. Wilson, 79 Tex. 185 (14 S. W. 7'.l8; 15 S. W. 402); Stafford v. Fargo, 35 III. 481; Nunes v. Russell, 65 111. App. 171; Risley r. Gray, 98 Cal. 40 (32 P. 884) ; Vance i'. First Nat. Bank, 49 La. Ann. 378 (21 So. 860). 2 Hill V. Shields, 81 N. C. 250 (31 Am. Rep. 499); Warren r. Halght, 65 N. Y. 171; Crosby v. Tanner, 40 Iowa, 130; Elheridge v. Gallagher, 55 Miss. 458; Wyraan »-. Robbins, 51 Ohio St. 98 (37 N. E. 264). 263 § 107 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. him liable.^ But in New York and other States, it has been held that in every case of accommodation, there is an implied agreement that the paper is to be negotiatiBd before maturity, and that, therefore, the accommodation party is not liable on the paper to an immediate overdue indorsee. ^ The overdue indorsee is also not subject to any equity arising against his indorser after the transfer, or to any set-off arising out of collateral or independent claims.^ But in all these cases, it must be remembered that while the overdue indorsee does not get any better title than what his indorser had ; he does get whatever title or right he had. Hence, if the transfer after maturity was made by one, who before maturity had acquired title as a bona fide holder, the overdue transferee could recover of the parties to the paper on the strength of the bona fide character of his transferrer's title. This is not only the rule in the case of transfer of overdue paper, but, also, where the transferee takes the paper before the maturity with notice from one who is a bona fide holder.* But this rule is subject to this exception, that if the paper were open to defense in the hands of the payee or of some 1 Dunn V. Weston, 71 Me. 270 (36 Am. Rep. 310) ; Parr v. Jewell, 16 C. B. 684; Caruthers v. West, 11 Q B. U4; Seyfert u. Edison, 44 N.J. L. 393. 2 Chester v. Dorr, 41 N. Y. 279; Hoffman v. Foster, 43 Pa. St. 137; Peale v. Addicks, 174 Pa. St. 549 (34 A. 203); Battle v. Weems, 44 Ala. 105;"Simons v. Morris, 53 Micti. 155. 3 Baxter v. Little, 6 Met. 7 (39 Am. Dec. 707) ; Barker v. Valentine, 10 Gray, 341; Simpson v. Hall, 47 Conn. 417; Elliott v. Deason, 64 Ga. 63; Eversole v. Maull, 50 Md. 96; Wliittaker v. Kuhn, 52 Iowa, 315 (3 N. W- 127); Arnot V. Woodbiirn, 35 Mo. 99; Davis v. Miller, 14 Gratt. 1. But see contra, Driggs v. Rockwell, 11 Wend. 504; Davis v. Neligh, 7 Neb. 78; Downing v. Gibson, 53 Iowa, 517 (5 N. W. 699) (statute controlling). •* Hoffman v. Bank of Milwaukee, 12 Wall. 181; Commissioners of Madison Co. v. C'a-k, 94 U. S. 278; Roberts v. Lane, 64 Me. 108 (18 Am. Rep. 242); Bissell v. Gowdy, 31 Conn. 47; Wilson v. Mechanics Sav. Bank, 45 Pa. St. 488; Hogan v. Moore, 48 Ga. 156; Bassett v. Avery, 15 Ohio St, 299; Scott v. First Nat. Bank, 71 Ind. 445; Barker v. Lichten- berger, 41 Neb. 751 (60 N. W. 79); Bradley v. Marshall, 54 111. 173; Rob- inson V. Smith, 62 Minn. 62 (64 N. W. 90) ; Simon v. Merritt, 33 Iowa, 537; Kinney v. Kruse, 28 Wis. 183; Donnerberg v. Oppenheimer, 15 Wash. 290 (46 P. 254). 264 CH. IX.] RIGHTS OF BONA FIDK HOLDERS. § 108 prior indorsee, he could not, by securing a retransfer to himself of the bill or note by a subsequent bona fide in- dorsee or holder, claim the benefit of the superior title of such subsequent bona fide holder.^ § 108. Paper payable on deiuand or at sight, when overdue. — Where a bill or note is made payable on demand, or at sight, it becomes payal>le immediately on demand by the holder, except that, in some of the States, an instrument payable at sight carries the days of grace .^ This is true, not only when the bill or note is payable *' on demand "or " at sight ;" but also where some other equiv- alent phrase is employed to denote the time of payment, as "in such portions and at such times as the directors may direct." "^ At one time it was held that a bill or note, particularly a note which was payable on demand, was never overdue, so as to let in equitable defenses, as long as there has been no demand for payment.^ But it now seems to be definitely settled, at least in this country, that such a paper is over- due, if it remains unpaid for an unreasonable time after its date or the day of deliveiy ; and if it is transferred after the lapse of what is considered by the courts to be a rea- sonable time for payment, the transferee cannot claim the superior title of ix bona fide holder. On the other hand, if the bill or note is transferred within a reasonable time after its negotiation, the transferee is not charged with constructive notice of the prior dem.ind and dishonor.^ 1 Hatch V. Johnson Loan & Trust Co., 79 Fed. 828; Sawyer v. Allen, 9 Allen, 42; Tod v. Wick. 3G Ohio St. 370; Kost u. Bender, 25 Mich. 515; Fuller V. Goodnow, (J2 Minn. 103 ((J4 N. W. 161). 2 Hirst V. Brooks, .lO Barb. 534; Darling t7. Wooster, 9 Ohio St. 517 And part payment would, of course, be taken as evidence of a domami, and of a consequent maturity of the paper, as to the balance which remained unpaid. Bayliss v. Pearson, 15 Iowa, 279. ^ Howland v. Edmonds, 24 N. Y. 307. See to the same effect. Bow- man V. McChesney, 22 Gratt. 609. * Brooks V. Mitcliell, 9 M. & W. 15; Lea v. Glover, 1 Bradw. 335; Gordon v. Preston, Wright (Ohio), 341. ^ Thrall v. Mead, 40 Vt. 540; Works v. Hershey, 35 Iowa, 340; Poor- 265 § 108 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. In determining what is to be considered as a reasonable time, after the lapse of which a bill or note is to be treated as overdue, no general rule or principle can be formulated, which will clearly point to the answer. The mere length of time is no guide. In every case, the conclusion dei)ends upon its peculiar circumstances. If it is ascertained from the circumstances of the particular case under inquiry, that the parties had intended the instrument to be a con- tinuing obligation, and had not anticipated an immediate payment of the bill or note, a greater length of time would be considered reasonable, than where the circumstances disclose the expectation of an early payment. In the case of bills, the continuous circulation of the paper, by trans- fer from one party to another, and from place to place, is a controllino; circumstance ; and in the case of bills and notes, the most common measure of the reasonableness of the time is the presence or absence in the instrument of the reservation of interest. The reservation of interest is taken to be signal proof of the intention of the parties to make the instrument a continuing obligation; and the actual de- termination of what is a reasonable time varies with the lengths of the periods of payment of interest.^ man v. Mills, 29 Cal. 118 (95 Am. Dec. 90); Bacon's Adm'r v. Bacon's Trustee (Va. '97), 27 S. E. 576. 1 In the following cases, the instrument was held to be overdue, when transferred: Camp v. Clark, 14 Vt. 387 (two months) ; Losee v. Dunkin, 7 Johns. 70; 5 Am. Dec. 245 (two mouths and a half) ; Herrick v. Wool- verton, 41 N. Y. 581; 1 Am. Rep. 4G1 (three months) ; La Due v. First Nat. Bank, 31 Minn. 33; 16 N. W. 420 (five months) ; Morey v. Wakefield, 41 Vt. 24; 98 Am. Dec. 562 (ten months) ; Turner v. Iron Chief Min. Co., 74 Wis. 355; 43 N. W. 149 (ten months); Cross v. Brown, 51 N. II. 486 (13 months); Crim v. Starkweather, 88 N. Y. 339; 42 Am. Rep. 250 (3^ years) ; Gregg v. Union &c. Nat. Bank, 87 Ind. 238 (six years) ; Leonard V. Olson (Iowa, '97), 68 N. W. 677 (ten years). In the following cases, bills and notes were held to be still negotiable, and therefore not yet over- due: Howe V. Hartness, 11 Ohio St. 449; 78 Am. Dec. 312 (two days); Mitchell V. Catchlngs, 23 Fed. Rep. 710 (23 days); Sice v. Cunningham, 1 Cow. 397 (five months) ; Castle v, Candee, 16 Conn. 224 (nine months) ; Ranger v. Gary, 1 Met. 309 (two year.>) ; Jameson v. Jameson, 72 Mo. G40 (six years, where note was payable at any time during maker's lifetime and demand was made one year after maker's death). 266 CH. IX.] RIGHTS OF J50XA FIDE HOLDERS. § 109 In some of the States, the time when such paper "becomes overdue is now regulated by statute, notably in Massachusetts, Connecticut, California, and others. But the bill or note still remains payable on demand, so that, notwithstanding tbe statute, it matures as between the original parties whenever payment is demanded.^ Where this question is not regulated by statute, a note payable on demand, without reservation of interest, is held to be due immediately, for the purposes of the Statute of Limitations; so that the statute will run from the date of the note; but where interest is reserved, it will run from the expiration of what is considered to be a reasonable time for the maturing of the note.^ § 109. Transfer after default in the payment of install- ment of principal or interest. — If a bill or note is made payable in installments at succeeding dates, default in the payment of one installniont of the principal sum will con- stitute such a dishonor of the entire bill or note as to make a subsequent transferee take the paper subject to all the equities, whether the entire sum becomes payable on default in one installment or not.^ But the authorities are not agreed as to the effect of a default in the payment of an installment of interest. All are agreed that if the note stipulates that the whole prin- cipal sum shall become due and payable, if the installment of interest is not paid, any subsequent transferee would not be a bona fide holder. But, although it has been held that the failure to pay an installment of interest would destroy the negotiability of the note, whether it contains ' Seymour v. Continental Life Ins. Co., 44 Conn. 300 (26 Am. Rep. 469). 2 Tiirall V. Mead, 40 Vt. 540; Lavellete v. Wendt, 75 N. Y. 579; Siiutts V. Fingar, 100 N. Y. 5.39 (3 N. E. 588); Presbrey y. Williams, 15 Ma-s. 193. For special applications of the principle, see Jameson v. Jameson, 72 Mo. 640; Kilbreath v. Gaylord, 34 Ohio St. 305, 3 Vinton v. Kinf:, 4 Allen, 562; Field v. Tibbetts, 57 Me. 358 (99 Am. Dec. 770) . See, as to stipulation that all of a series of notes shall become due on default in payment of one. National Bk. of Battle Creek v. Dean, 86 Iowa, 656 (53 N.W. 838). 267 § 111 RIGHTS OF BONA FIDE HOLDERS. [CH. IX. the stipulation for acceleration of payment or not,^ the better opinion is that, where there is no such stipulation, default in the payment of the interest does not take away the negotiability of the note, and the subsequent trans- feree can claim the protection of a bona Jide hoWer ; at least, where the holder takes the paper without notice of the default.^ § 110. Transfer on last day of grace, or day of matur- ity, — before the close of the hours of business, is said by some of the authorities to be a transfer before maturity ;^ but there is authority for holding that the paper is over- due at that time, and the transferee on the day of pay- ment takes the paper subject to the equities.* § 111. Actual and constructive notice of defenses. — One of the requirements of bona Jide ownership is that the holder must be a purchaser without notice of defenses to the bill or note. But in order that notice may affect the purchaser's title as a bona fide holder, he must receive the notice before he has completed the transfer of the paper to him by the payment of the consideration; and if he has paid only a purt of the consideration, when he received notice, he is a bona fide holder ^>'0 fanto, for the amount which he has already paid.^ If an agent of the purchaser receives notice, while he is representing his principal in 1 Newell V. Greg?, 51 B irb. 263. And see First N it. Bank v. Scott Co., 14 Minn. 77; First Nat. Bank v. Forsytli (Minn. '97), 69 N. W. 909. 2 Kelley v. Whitney, 45 Wis. 110 (30 Am. Rep. 697); Cromwell t?. County of Sac, 96 U. S. 51; F;rst Nit. BIj. v. Forsyth (Minn. '97), 69 N. W. 909. But see Nat. Bauk of N. A. v. Kirby, 108 Mass. 497; Chou- teau V. Allen, 70 Mo. 290. 3 Crosby v. Grant, 3G N. II. 273; Savings Bank v. Bates, 8 Conn. 505; Holton V. Hubbard, 49 La. Ann. 715 (22 So. 338). ■« Pineu. Smith, 11 Gray, 38. But see Shawmut Nat. Bank v. Manson (Mass. '97), 47 N. E. 196, wh^re bank, which had credited payees with amount of check and permitted them to draw against it, before receiving report from the clearing house, was held to be a bona fide holder. s Dresser v. Mo. &c. Ry. Co., 93 U. S. 92 ; Weaver v B irden, 49 N. Y. 291; Perkins v. White, 36 Ohio St. 330; Harrington v. BuUe & B. Min. Co. (Mont. '97), 48 P. 758. 268 GH. IX.] RIGHTS OF BONA FIDE HOLDERS. §111 that particular transaction, the principal is charged with such notice, but the notice is not imputed to the principal, if the agent receives it, when he is engaged with his own affairs.^ But wliere one is a member of two tirras, knowled cm would trade fortlum, then they will be right here, and as soon as ray famil}' gets able I will try to make the money and pay them off, I will consider you an innocent purchaser; and wi.-h j-ou would get them." Plaintiff testified: '• I told him that !Mr, Cha'^e had promised to keep ihe notes himself, but, as he had traded them off alrcad\', I suppose I would as soon he would have them as anybody else." We think the proI)ability is that the s'atunent of plaintiff is nearest correct, and that there was no absolu'e promise 1o \^ny tlie note. 4. 'Ihe Controlling question is whether the defendant had notice of the fraudulent intent of Chase, or part'cipated in acc'mi)lish- ing it. Tlie fraudulent scheme of Chase was well developed by the evidence. His efforts were directed to inducing parties lo 279 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. enter into an agreement to manage the sale of a book in certain localities, and, by pointing out the profits they could realize hy ])urchasing a lot of books, the sale of which they could control themselves, to obtain from them negotiable notes payable in the future. He remained in the neighborhood, furnishing to the parties taking hold of the scheme books as they were sold until he had obtained all the notes he could procure. He then sold the notes, left the neighborhood, and refused to furnish books to those who had purchased. He boarded at a hotel in Centralia. Defendant frequently visited him at his hotel. This he admitted. Said he went because he "liked to hear him go over his pros- pectus." Defendant introduced Chase to plaintiff. He hunted him up for that purpose. On the introduction he went to the hotel, and was present during a part of the interview between them. For this introduction Chase paid him $50. He told a friend, who upbraided him with getting plaintiff into trouble, that he had a " right to work for a commission as much so as any- body else had in any other kind of business." Defendant testi- fied that he told plaintiff that if he did not get the books he would not be hurt, for it was written in the contract that in that event the note would be null and void. " He asked me if it was written on the note, and I told him that it was not. He said if that was written on the note, then IMr. Chase could not trade it off." It will be observed that the fraud of Chase was not in the character of the contracts made, but in a predetermined intention, after obtaining and selling the notes, not to comply with the contract. This fact should be kept in mind in considering the good faith of Bush in the matter. It is insisted that the evidence establishing the foregoing facts fixes upon defendant Bush the knowledge of the fraudulent intent of Chase, and we would be of that opinion if it disclosed all the facts and circumstances in the case. The fact that Chase paid Bush $50 for an introduction to Jennings, standing alone, ought to be in itself a conclusion of knowledge of, if not participation in, the intended fraud. But that fact does not stand alone. It seems from the evidence to have been well understood — in fact, no secret was made of it in the neighborhood — that any per- son would be paid by Chase a like commission for introducing one who would enter into a contract such as plaintiff made. Jennings admitted that he was informed, before he entered into the contract, that Bush was to be paid for introducing him. He himself afterwards obtained a reward for introducing a Mr. Green to Chase, and admitted that he had also tried to induce others to make contracts. If we charge defendant with notice of the fraud, we must also charge ]ilaintiff with knowledge. He disclaims such knowledge. Why, then, should we charge knowl- edge upon defendant? He paid nearly the face value for the note, which is a strong circumstance in his favor. We should attribute to each party honesty of purpose in the absence of proof to the contrary. It is evident, we think, from all the circum- 280 CH. IX.] RIGHTS OF BONA FIDE UOLDERS. ILL. CAS. stances, that both parties honestly believed, wheu the transfer of the note was made, that the contract would be fully performed. We ihink from the evideuce before us that the defendant at most had a mere suspicion that the contract would not be carried out. This, as has been seen, was not sufficient to stamp his purchase with bad faith. The question of right between these parties is undoubtedly a close one. The case was evidently tried by plain- tiff upon the theory that notice of the contract and the indorse- ment thereon was sufficient to charge defendant with bad faith in buying the note. Upon a trial of fact by a chancellor, when the evidence is so nearly balanced, we are not disposed to disturb the result reached ; but in this case, in which no specific findings were asked by counsel or made by the court, we cannot deter- mine whether the finding was upon the question of notice or was controlled by some of tlie legal propositions herein discussed. With the view we take of the law, we are not satisfied with the finding. We therefore reverse the judgment, and remand the cause for a retrial, if the parties desire it. All concur, except Barclay, J. , who is absent. Liability to Bona Fide Holder of One Who Signs a Xote or Bill in Blank, wliicli is Delivered to Another to Fill Up. Geddes v. Blackmore, 132 Ind. 551 (32 N. E. 507). Olds, J. The appellee, Charles Blackmore, brought this action against the appellants Daniel T. Geddes and William Winder on a promissory note dated August 15, 1884, due in one day after date, payable to said Charles Blackmore, for $1,000, with 8 per cent interest, and signed by said Daniel T. Geddes and William Winder. Geddes was defaulted, and Winder answered in three paragraphs : First, a general denial ; second, a general plea of 7ion est factum; and, third, setting up an alteration of the note. There was a trial by jury, and a special verdict returned. The facts found by the jury in their special Acrdict show that the appellant William Winder signed a printed blank form of promissory note, the date of the note, date of maturity, auKuint, and name of payee all being blank ; and intrusted it to Geddes, with verbal instructions to pur- chase hogs for a firm composed of said William and Asbury Winder, and to fill the blanks in the note, and deliver the same to the person from whom he purchased hogs, filling the dates. The amount and name of the payee were to be filled by inserting the amount to be paid for the hogs and the name of the person from whom the hogs were purchased. Geddes violated his instructions, and used the note to borrow $1,000 of appellee, Blackmore, filling the blank amount at $1,000, and the name of Blackmore as payee. lie filled the other blanks, and signed the note himself as one of the payors, delivered the same to Black- more, and received from him $1,000. Geddes purchased no hogs 281 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. of Blackmore, and did not use any of the money for the purchase of any hogs for said William Winder or the firm of Winder & Winder ; and neither Winder nor Winder & Winder received any of the money. That the use made of the note was unauthorized by Winder, and was without his knowledge and contrary to his instruction. Both the appellee and the appellant Winder moved for judgment on the special verdict, and the court overruled the motion of Winder and sustained the motion of the appellee, Blackmore, and rendered judgment in his favor for the amount found due on the note. These rulings of the court on the motions for judgment are assigned as errors. The facts found show that Geddes violated the confidence reposed in him by appellant Winder, disobeyed his instructions, and used'the note for another purpose than that for which it was intended, but, notwithstanding such violation of confidence, the appellant is liable on the note. In Roberts v. Adams, 8 Port. (Ala.) 297, the court says : " No rule can be better settled than the one which determines that he who signs his name to a blank piece of paper with intent to be filled up as a note or indorse- ment will be liable, although the person intrusted therewith shall violate the confidence reposed in him by filling it up with another sum, or using it for another purpose, than the one intended ; " and many autliorities are cited in support of this doctrine. The same rule is adhered to by this court. In Wilson v. Kinsey, 49 lud. 35, it was held that when a party signed a promissory note in blank and intrusted it to another to discount the note at bank, a blank being left for the name of the payee, and the note was negotiated to a third party, and his name inserted as payee, the person so signing the note was liable. In that case Kinse}^ signed the note, and intrusted it to one Butler to negotiate ; and the court says: "We do not doubt, in view of the evidence, that when the note was signed Butler intended to negotiate it at the bank ; but we find no evidence of any agreement be- tween him and Kinsey that he should not negotiate it else- where. Had Kinsey insisted upon any such thing, it seems probable that, when the subject of rcsiricting the authority of Butler was under consideration, he would have insisted upon having the blank for the name of the i)ayee filled, as well as the ones which he insisted on having filled before he parted with the paper. This he did not do, but permitted the i)aper to go out into the market as it was. In that condition it fell into the hands of Wilson, who paid value for it, and who, as we think, is not charged with notice of anything which can affect his right to recover upon the note." Cornell v. Nebeker, 58 Ind. 425, supports the same doctrine. In this case Geddes was not restricted to fill in the name of any particular person as payee, or to any amount. It is true he was intrusted with the note for the purpose of filhng in tlie blank, and to negotiate it in payment of hogs, to be purchased by him for the firm of Winder & Win- der ; but he was intrusted with the blank with authority to fill the 282 CH. IX.] RIGHTS OF 150KA FIDF: HOLDERS. ILL. CAS. blanks, and negotiated it for a particular purpose, and he violated the confidence i-eposed in liim, and negotiated it for another i)ur- pose. Winder, by tlie signing of the note in blank, and intrust- ing it to Geddes to fill the blanks and negotiate it, placed it in the power of Goddes to accomplish just what he did accomplish, viz., fill the ])lank-!, and negotiate it 1o Blackmore, and secure a loan of $1,000; and the rule seems to be well settled that when a person signs his name to a blank note, and intrusts it to anotlu r, he thereby gives such person authorit}' to fill it up in any manner he plea«es, not inconsistent with the character of such blank paper, and a p;irty taking it will be protected. See Davis V. Lee, 2G Miss. 505; Abbott v. Rose, 62 Me. 194. Nor do we think Winder was relieved from liability by reason of the fact that Geddes signed his own name to tiie note as one of the payors or makers. Winder by in- trusting the note to Geddes, authorized him to fill the note out in any manner he i)leased, not inconsistent with the character of such blank. The filling of it as he did, and signing his own name with that of Winder as payee, was perfectly consistent with the character of the blank so signed by Winder. It enabled Geddes to do just what the facts fouud show that he did do. He first met Blackmore on the street, and informed him that he would i)rol)al)ly want to make the loan of him on a note signed by Winder, then filled the blanks, and signed it himself, and negotiated it, and obtained the money upon it. The fact is found that on the same day Winder was also in town, and that Blackmore knew it, and made no mention of the fact in regard to the loan to Winder; but this fact carries no notice to Blackmore of the unauthorized use of tlie paper, ])iit rather conveys to him knowledge that Winder was witliin reach, so tliat Geddi's could and had procured Irs signature for the purpose of the loan. Tiiere is a general finding at the close of the verdict that Winder did not execute the note, but, in view of the form of tlie verdict, tiiis must be treated as a mere conclusion drawn from the other facts found. As all tlie facts relating to the signing, delivery, filling blanks, and knowledge and instructions are very fully set out and found by the jury, and it is clearly apparent that the latter statement is intended as a conclusion drawn from the facts previously slated and fouud by the jury, we think there was no error in the lulings of the court on the motions for judgment. Judgment alfirmed, widi costs. Bank not a H<)l(!<*r for Value which Di.scouiits Pai)or and Places Amount to Credit of tli<' Depositor and Indorsee. Dreillingw. First Nat. Bank, 43 Kan. 197 (23 P. 94). Holt, C. This was an action in the Ellis district court on a negotiable promissory note. Trial by jury. The court directed them peremptorily to find for the [)ljiutiff for the unpaid balance 283 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. fcil. IX. of the note. The defendants, as plaintiffs in eiTor, complain of this direction of the court, and of certain rulings concerning the l)lea(iings. The action was commenced by the First National Hank of Battle Creek as plaintiff. Afterwards the court per- mitted a supplemental petition to be filed, wherein none of tlie nllegatioiis of the original petition were repeated upon wliich the plaintiff relied to recover, but simply stated that after tlie cora- meucement of tliis action the First National Bank of Buttle Creek and the Second National Bank of Battle Creek had been consoli- dated under the name of "The National Bank of Battle Creek." This supplemental pleading was authorized by section 144, Civil Code. Clark V Spencer, 14 Kan. 398; Simpson v. Vose, 31 Kan. 227; 1 Pac. Rep. 601. The defendants answered the original petition by a sworn denial, and also b}^ setting up other matters of defense. The plaintiff replied by a general denial. After the supplemental petition was filed, the defendants again answered fully as to the merits of the action, but set up no new matter, only more elab- orately and full}^ stating their defenses as set forth in their first answer. After tliis second answer there was no reply filed. None was necessary. The allegations of the answer had been once denied substanlially by the reply to the defendants' original an- swer. This was sufficient. Brookover v. Esterly, 12 Kan. 149 ; Cooper V. Machine Co., 37 Kan, 231 ; 15 Tac. Rep. 235. At the trial the plaintiff showed that it bought the note before due without knowledge of any defenses there might be to it. The note was given in payment of a threshing-machine. In the sale of this machine a wari'anty was given ; and the defense urged was that there had been a breach of the warranty, and therefore a failure of consideration. The court required of ^the defendants, before proof of this warranty and its breach could be offered, that they should show that the note wns either transferred after due, or else was not transferred for a valuable consideration ; or that, if plaintiff took it before due, he took it with notice of the defenses which defendants had against it. The defendants proffered evidence to show the warranty and its breach, but neither offered or attempted to establish either one of the three propositions suggested by the court. The defendants complain of this ruling, first, because the court arbitrarily directed their order of proof. It had the right to do so, and did not abuse its discretion in its requirements. In fact, it was the proper order for the court to make. Ordinarily, a party has latitude in introducing his testimony ; but in this case it would have been an idle thing to have introduced testimony concerning the warranty and its breach when it hnd been fairly established, by evidence prima facie, that plaintiff was a bona fide purchaser of the note before maturity. All defenses which might have been urged against the original payee thereof were cut off in an action by the holder, who purchased before maturity, with- out notice, and for a valuable consideration. 284 CH. IX.] RIGHTS OF BOxVA FIDE HOLDERS. ILL. CAS. The defendants urge, secondly, that the evidence offered by the plaintiff does not show it to have been a bona lide purchaser of the note. The testimony estabhsiied that tlie First National Bauk of Battle Creek took this note at its face value before due, and gave Nichols, Shepherd & Co., the original payees of the note, credit ou their account. When the nose was taken, Nichols, Shepherd & Co. had a balance at the bank to their credit of over $10,000 ; and it was proveir that up to the time of this action their balance had never been less that $10,000. The testimony of Victor P. Collins, president of the bank, shows that the amount of the credit of Nichols, Shepherd & Co. at the bank when this note was placed to their credit has since been drawn out many times, and rei>laced by new deposits, so that the amount to the credit of Nichols, Shepherd & Co., though often changed in character, had not been materially diminished in amount, but had been kept good by other notes, drafts, and moneys deposited subsequently. It is probably true that simply discounting a note, and crediting the amount thereof on the iudorser's account, with- out parting with any value for it, is not enough to constitute such bank a bona fide purchaser of the note. In this instance, how- ever, this transaction was simply placing the note to the credit of Nichols, Shepherd & Co. alone ; for they subsequently checked against it, and exhausted the amount of their credit at the time this note was placed to their account, including the amount of this note. We think the fact of thus paying out the full amount makes them i)urchasers. It is conceded that the bank did not buy the note outright, and pay for it, at that time; but they certainly were debtors to Nichols, Shepherd & Co. for its amount ; and the general rule as to the application of payments, when there are no special facts to interfere, is that the'^lirst payments go to the oldest debts. Under this lule, the bank paid for it by allowing Nichols, Shepheicl & Co. to check against and exhaust the amount of their credit at that lime. This note was a i)art of that credit. It paid for it by cashing checks drawn upon it, and thus became a purchaser of the same for value. Fox v. Bank, 30 Kan. 441 ; 1 Tac. Kep. 789 ; Maim v. Bank, 30 Kan. 412 ; 1 Pac. Rep. 579 ; Rand. Com. Paper, § 994. The other errors complaiued of do not require mention, and we recommend that the judgment be affirmed. Per Curiam. It is so ordered ; all the justices concurring. What is Meant by Usual Course of Business. Roberts v. Hall, 37 Conn. 205. Caupentek, J. The facts of this case are briefly these: The note in suit is one of two notes, given for the purchase-money of certain property sold to the defendant l)y one Yale. The de- fendant was induced by fraud to give his notes for $700, for property which was worth but $400. The day after the sale the 285 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. fraud was discovered by the defendant, who thereupon offered to return the property to Yale, and demanded a return of his notes, but Yale refused to accept the property iind return the notes. The other note, and $79 of this note, were paid to Yale from the avails of certain collaterals, which payments exceeded the value of the property. This note, before due, was trans- ferred to the plaintiff, in trust for the payment of certain cred- itors named, with a balance j^ayable to the wife of Yale, who was tiien living apart from her husband, and who has since been divorced. The creditors assented to the trust, and directed the plaintiff to commence and prosecute this suit. The note is more than sufficient to pay the creditors named, so that if collected there will be a balance to be paid to the wife. The plaintiff had no knowledge of the fraud, and took the note in good faith for the purposes stated. There was no consideration for the transfer except the claims of the creditors. Whether the payee was or was not, at the time of the transfer of the note, insolvent, does not appear. Upon these facts the superior court reudei-ed judgment for the plaintiff. The court therefore must have decided that the plain- tiff took the note in good faith, for a valuable consideration, and in the regular course of business. The case presents two questions: — .1. Is the plaintiff to be ri garded as a trustee for the creditors, or the agent of the payee? If the latter, it is conceded that the plaintiff is not entitled to recover; if the former, then the plaintiff insists upon his right to recover and the defendant denies it. We think the plaintiff, to a certain extent, is a trustee for the creditors. The auditor has clearly found that the note was trans- ferred to the plaintiff in trust for the creditors and Mrs. Yale, and that the creditors ratified and confirmed the transfer, and that the plaintiff is following their directions in bringing and prose- cuting this action. In respect, however, to that portion of the note which was payable to Mrs. Yale, we are clearly of the opinion that he was the agent of the payee, and was in no sense a trustee for cred- itors. The ordinary relations between husband and wife will be presumed to have existed in this case until the contrary appears. It is only found that they were living apart, and have since been divorced. No indebtedness from him to her is found ; and, so far as appears, the money, as soon as paiart with his i>roperty? Or would he at once suspect the integrity of the paper itself, and the credit and standing of the party offering it? A correct answer to these questions must settle conclusively the mercantile character of this transaction. The fundamental principle of the law, applicable to negoti- able paper, is that it is the representative of monev, and ma}' be used in all mercantile transactions as its substitute. But when used for any purpose outside the usual and ordinary 287 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. course of business, it ceases to carry with it the privileges and immunities with whicli the law clothes negotiable paper. The tendency of the law, in respect to the legitimate uses of nego- tiable paper, is thus referred to in 1 Parsons on Notes and Bills, p. 257: "And therefore we are disposed to believe that the law of this country is tending toward the rule that whether nego- tiable paper is sold, or discounted, or indorsed over to pay a new debt, or for a new purchase, or to secure new debt, or an old debt, or to pay an old debt, it becomes in each case the property of the holder, and carries with it all the pri\ilege3 of negotiable paper, unless there be something in the particular transaction which is equivalent to fraud, actual or construc- tive." It will be noticed that this language is comprehensive, and was doubtless intended to embrace every instance in which such paper may be used and still retain its privileges. But it is not sufficiently broad to cover this case, as we shall presently see. The doctrine that commercial paper may be properly used as security for a pre-existing debt has been disputed, and there are conflicting decisions upon that point; but it is now pretty generally established. The profession, however, did not readily acquiesce in the doctrine, inasmuch as there is an apparent hardship in allowing the holder of such paper, who parted with nothing upon its credit, to recover of one who, as against other parties, has a good defense. The reason upon which this doctrine rests, and without which the law would undoubtedly have been determined otherwise, is, that a very considerable portion of the negotiable paper made in business is used in this way. We can easily understand, therefore, that among business men, accustomed to deal in this kind of paper, the receiving or offering it as security for an old debt is not in itself calculated to excite suspicion, for the simple reason that it is according to usage ; and if according to usage, presump- tively at least, such use facilitates trade, and should receive the sanction of the courts unless there is some real and substantial objection to it. But in the case before us no such usage appears. On the contrary, the purpose for which the paper was used is excep- tional and unusual. We apprehend that cases like this are rarely to be met with in business circles. Let us examine it more carefully. A man has a piece of negotiable paper with which he wishes to pay or secure certain debts. If there is but one debt he can transfer it directly to the creditor, and the law protects the transaction. That is according to the usual course of business. But if he transfers to a friend, to hold till due, and then collect it, and with its avails pay the creditor, that is unusual and suspicious upon its face, and requires explanation. Unless some good reason can be shown for such a proceeding, the law ought not to protect it. But it is said that heie were several creditors, which, it is claimed, sufficiently explains the 288 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. fact that the security was effected through the intervention of a trustee. Let us test this position. If the paper is right and free from defects, why not sell it in market or get it discounted, and with its avails pay the debts at once? Or, if the debts are not to be paid until the paper is due and collectc d, why not retain it in his own hands until due, and if necessary sue and collect in his own name? Such a course would be natural and usual. But what honest reason can be suggested why it should be transferred to a third part}', who has no interest in the matter, to be sued in his name? Such a course is unusual, and not in the course of trade. The transaction at once suggests the idea that there is some equity in favor of the maker inherent in the note itself, and which can be made available as against the pa^^ee, and which the payee is seeking to avoid. But there is another circumstance appearing in the case which makes the unusual character of the transaction still more apparent. The creditors are informed of the transfer, they ratify and confirm It, and direct the commencement and prosecution of this suit. What occasion is there for all this, exce[)t to make it appear that the plaintiff is a trustee for the creditors? And why is it desirable that it should appear that he is a trustee for the creditors, unless for the very purpose of shutting out this defen-e? If Yale was in fact solvent, this proceeding was extraordinary and inexplicable upon any theory consistent with honesty and fair deaing. At least no sufficient reason for it appt ars in the case. If he was insolvent, another and insurmountable difficulty is at once encountered. The conveyance, not being in conformity to the provisions of our insolvent law, and operating to pay the creditors named in full, thereby giving them a preference, contravenes the policy of that law, and is therefore void as against credit'>rs. Surely it Avill not be contended that such a couveyance shcmld receive the sanction of this court as a legitimate mercantile transaction. The fact that a part of this money was payable to the wife of Yale is worthy of notice also in this branch of the case. To that extent, as we have already seen, the plaiutiff was the agent of Yale. We have no occasion to say that this ciicumstance alone renders this conveyance void at common law. But if there was a secret trust in favor of Yale, and the oi)eration of the conveyance should be to defraud creditors, it certainly would ])e void as against creditors. A fraudulent conve} auce can in no sense be said to be in the usual course of business. But be this as it may, the fact that Yale himself is still interested i.j this note, either in his own right or in right of his wife, should suggest to all parties concerned an inquiry as to the reason and occasion of this conveyance. We are not referred to any case directly in point, and are not aware that any exists ; but we believe the views above expressed are in harmony with reason and good sense, and not in conflict with any adjudged case. In Billings v. Collins, 44 Maine, 271, 19 ^ 28d ILL. CAS. RIGHTS OF BONA FIDK HOLDERS. [CH. IX. it was held that the assignment of negotiable paper, by operation of a bankrupt or insolvent law, was not in the regular course of trade, and that the assignee could only acquire the rights of the insolvent. The opinion of the court is brii f , simply announcing the result without adducing any argument in its support; l)ut we have no reason lo doubt the correctness of the decision. So far as it goes it supports our position in tlie present case. For these reasons, after careful consideration, we have come to the conclusion that this note was not taken in the regular course of business, and that the judgment of the court below upon that ground was erroneous, and must be reversed. Transferee of Certified Check Payable to Order, Unin- dorsed, Takes Check Subject to all Defenses. Goshen Nat. Bank v. Bingham, 118 N. Y. 349 (23 N. E. 180). Appeals from judgments rendered by the general term of the supreme court of the tirst depariment, affirming judgments entered upon the reports of a referee. On Novembir 27, 1884, Benjamin D. Brown applied to the cashier of tlie Goshen National Bank, at Goshen, N. Y , to cash a sight-draft for $17,000, drawn by him upon the fimi of William Bingham & Co., of New York, accompanied by a quantity of the bonds of tlie West Point Manufacturing Company, of the face value of $17,000. Brown represented that he had negotiated a sale of these bonds at their face value with William Bingham & Co. ; that they had diiected him to draw upon them at sight for $17,000, the. draft to be accompanied by the bonds, and that the draft would be paid upon presentation. Such representations were absolutely false. The bonds had no market value. Brown was a bankrupt, and had no funds in the bank, except such as resulted from the credit given him upon the failh of the draft on Bingliam & Co., accompanied by the bonds. The cashier of the Goshen Nationtd Bank, relying upon such representations, cashed the draft of $17,000, and placed the proceeds to the credit of Brown, upon the books of the bank. He gave Brown sight- drafts on New York for $12,000, and certified a chtck drawn by Brown to lis own oider, dated November 26, 1884, for $5,000. On ti.e morning of November 28th, Brown called at the office of William Bingham & Co., and stated that he wanted to get some currency. Mr. Bingham passed tiie check to the firm's cashier, directing him to give Brown currency f-ir the amount. The cashier gave him a check drawn on the Corn Exchange Bank for $5,000. Brown had the check cas^hcd at the Corn Exchange Bank. He also had the New Y'ork drafts cashed, amounting to $12,000, which he had obtained from the Go hen National Bank. After procuring the checks and drafts to be cashed, he fled to Canada, where he remained at the time of the tri:il of these actions. Wlien Bingham & Co. took from Brown the check cer- 290 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. tifird by the Goshen National Bank, it was not indorsed. The referee found that, " at the time of the transfer of the said cer- tified check by Brown to the plaintiffs, it was intended botli by Brown and the plaintiffs tliat said certified check should be indorsed by Brown, and it was supposed by both parties that he had so indorsed it; and, if the plaintiffs had known that it was not indorsed, they would not have paid the consideration there- for." He further found " tliat Brown raade no statement to the defendants, or either of them, at the time of the transfer of the check, * « * tiiat such check was indorsed;" and, "prior to the- commencement of the action of replevin, the defendants never requested Brown to indorse said check." While Bingliara & Co. held the check in question unindorsed, a demand for its return to tlie bank, accompanied by a full ex- planation of the circumstances under whi'.h the certification was obtained, was made upon Bingham & Co. in behalf of the bank ; and, upon their refusal to return it, an action to recover its pos- session was commenced by the bunk against Bingham & Co. That action is firstly above entitled. Subsequently, and on De- cember IGth, Bingham & Co. obtained from Brown a power of attorney to indorse the check. Pursuant thereto, the check was indorsed, and jjayment thereafter demanded of the bank. This was refused, and thereupon the action secondly above entitled was commenced by Bingham & Co. to recover the amount of the check. Pa kker, J. {after statinr/ the facts as above"). As against Brown, to whose order the check was payable, the bank had a good de- fense. But it could not defeat a recovery by a bona fide holder, to whom the check had been indorsed for value. By an oversight on the part of both Brown and Bingham & Co., the check was accepted and cashed without the indorsement of the payee. Before the authority to indorse the name of the pa3'ee upon the check was procured, and its subsequent indorsement thereon, Bingham & Co. had notice of the fraud, which constituted a defense for the bank as against Brown. Can the recov- ery had be sustained? It is too well settled by authority, both in England and in this country, to permit of question- ing, that the purchaser of a draft of check who obtains title without an indorsement by the paj^ee holds it subject to all equities and defenses existing between the original parties, even though he has paid fall consideration, without notice of the exist- ence of snch equities and defenses. Harrop v. Fisher, 30 Law J. C. P. 283; Whistler r. Fors'cr, U C. B. (\. s.) 218; Savage V. King, 17 Me. 301 ; Clark v. Callison, 7 111. A\^\^. 203; Hask> 1! V. Mirchell, 03 Me. 4G8 ; C'ark v. Whituker, 50 N. H. 474 ; Calder -u. Billington, 15 Me. 3!)8 ; Bank v. Taylor, 100 ISIass. 18; Gilbert -y. Sliarp, 2 Lans. 412; Hedges v. Sealy, 9 Barb. 214- 218; Bank v. R:»ymon(l, 3 Wend. G'.> ; Raynor\'. Iloagland, 39 N. Y. Super. Ct. 11 ; Mullcr v. Pondir, 55 N. Y. 325 ; Freundv. Bank, 90 N. Y. 352; Trust Co. v. Bank, 101 U. S. 68; Osgood 291 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. V. Artt, 17 Fed. Rep. 575. 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 ex- ception arises out of the rule of tlie 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, 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. This rule is only applicable to negoti- able instruments which are negotiable according to the law- merchant. When, as in this case, such an instrument, is transferred, but without an indorsement, it is treated as a chose in action assigned to the purchaser. The assignee acquires all the title of the assignor, and may maintain an action thereon in his own name ; and, like other choses in action, it is subject to all the equities and defenses existing in favor of the maker or accep- tor against the previous holder. Prior to the indorsement of this check, therefore, Bingham & Co. were subject to the defense existing in favor of the bank as against Brown and the payee. Evidence of an intention on the part of the transferee to indorse does not aid the plaintiff. It is the act of indorsement, not the intention, which negotiates the instrument; and it cannot be said that the intent constitutes the act. The effect of the indorsement made after notice to Bingham & Co. of the bank's defense must now be considered. Did it relate back to the time of the transfer, so as to constitute the plaintiffs holders by indorsement as of that time? While the referee finds that it was intended both by Brown and the plaintiffs that the check should be indorsed, and it was supposed that he had so in- dorsed it, he also finds that Brown made no statement to the effect that the check was indorsed ; neither did the defendants request Brown to indorse it. There was therefore no agreement to indoi'se. Nothing whatever was said upon the subject. Before Brown did agree to indorse, the plaintiffs had notice of the bank's defense. Indeed, it had commenced an action to recover possession of the check. It would seem, therefore, that, having taken title by assignment, — for such was the legal effect of the transaction, by reason of which the defense of the bank against Brown became effectual as a defense against a recovery on the check in the hands of the plaintiffs as well, — Brown and Bing- ham & Co. could not by any subsequent agreement or act so change the legal character of the transfer as to affect the equities and rights which had accrued to the bank ; that the subsequent act of indorsement could not relate back so as to destroy the intervening rights and remedies of a third party. This position is supported by authority. Harrop v. Fisher, Whistler v. Forster, Savage v. King, Haskell v. Mitchell, Clark v. Whitaker, Clark v. 292 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. Callison, Bank v. Taylor, Gilbert r. Sliarp, cited supra. Watkins V. Maule, 2 Jac. & W. 243, and Hughes i-. Nelson, 29 N. J. Eq. 547, are cited by the plaintiff in opposition to the view we have expressed. In Watkins v. Maule the holder of a note obtained without indorsement collected it from the makers. Subsequently the makers complained that the note was only given as a guaranty to the payee, who bad become bankrupt. Thereupon the holder refunded the money and took up the note, upon the express agreement that the makers would pa}' any amount which the holders should fail to make out of the bankrupt payee's propert}'. The makers were held liable for deficiency. Hughes V. Nelson did not involve the precise question here presented. Ihe views expressed, however, are in con- flict with some of the cases cited ; but we regard it, in such respects, as against the weight of authority. Freund v. Bauk, supra, docs nut aid the plaintiff. In that case it was held that the certiflcation by the bank of a check in the hands of a holder who had purchaseil it for value from the payee, but which had not been indorsed by him, rendeied the bank Jiable to such holder for the amount thereof. By accepting the check the bank took, as it had the right to do, the risk of the title which the holder claimed to have acquired from the payee. In such case the bank eiiters into contract with the holder by which it accepts the check and promises to pay it to the holder, notwithstanding it lacks tiie in- dorsement provided for ; and it was accordingly held that it was liable upon such acceptance, upon the same principles that con- trol the liabilities of other acceptors of commercial paper. Lynch V. Bank, 107 N. Y. 183; 13 N. E. Kep. 775. But one question remains. The learned referee held, and in that respect he was sustained by the general term, that the bank, by its certitication, represented to every one that Brown had on deposit with it §5,000 ; that such amount had been set apart for the satisfaction of the check, and that it should be so applied whenever the check should be presented for payment; and that, Bingham & Co., having acted upon the faith of these representa- tions, and having patted with 85,000 on the stiength thereof, the bank is estopped from asserting its defense. 'Ihe referee omitted an importnnt feaiure of the contract of certificalion. The bank did certify that it had the money, would retain it, and apply it in paynient, provided the cheek should be indorsed b}' the payee. Lynch v. Bank, supra. If the check had been trans- ferred to plaintiffs by indorsement, the defendantwould have had no defense, not because of the docirine of estopiiel, but upon prin- ciples especially applicable to negotiable instrumenls. Bank v. Kailroad Co., 13 N Y. 638. Jf the maker or acceptor could ever be held to l)e estopped by reason of representations con- tained in a negotiable insirumcnt, he certainly could not be in the absence of a compliance with the provisions upon which he had representid that his liability should depcLd. But it is well settled that the maker or acceptor of a negotiable instrument is 2il3 ILL. CAS. KIGHTS OF BONA FIDE HOLDERS. [CH. IX. not estopped from contesting its validity because of representa- tions contained in tlie instrument. In such cases an estoppel can only be founded upon some separate and distinct writing or statement. Clark v. Sisson, 22 N. Y. 312 ; Bush v. Lathrop, Id. 535 ; Moore v. Bank, 55 N. Y. 41 ; Fairbanks v. Sargent, 104 N. Y. 108 ; 9 N. E. Rep. 870 ; Bank v. Railroad Co., supra. The views expressed especially relate to the action of Bingham & Co. against the bank, aud call for a reversal of the judgment. We are of the opinion tliat the action brought by the bank against Bingham & Co. to recover possession of the check cannot be maintained, and in that case the judgment should be affirmed. All concur, except Haight, J., not sitting. Rights of an Indorsee after Maturity. Watsou V. Alley, 141 111. 284 (31 N. E. 419). ScHOLFiELD, J. The controversy here is whether certain prom- issory notes purporting to be executed by the Superior Nickel Works, a corporation, to Louis Ellickson, and by him assigned before maturity to A. T. Bliss, and by Bliss assigned after matur- rity to Winfield N. Alley, aie legal charges against the assets of the corporation in the hands of its receiver. The lower courts adjudged that they were, and decreed their payment by the receiver. Appellants contend that they are not, because the president and secretary of the corporation, who assumed to execute the notes, had no authority to thereby bind the corpora- tion, and because, also, they were executed witliout any valid consideration, and Alley, being an assignee after maturity', took the notes subject to those defenses. Ihe notes purport to con- tain each a power of attorney to confess judgment for the amount due thereon ; but, since tlaere is no attempt to do any act under and by virtue of thtse powers, it is unnecessary to consider that feature of the notes. It is iv t denied that not*, s may be executed lawfully by the president and secretary of a cor[)oration, when they were executed in good faith to secure indebtedness of the corporation, lawfully incurred in the course of its business, and we are therefore under no necessity to cie authorities to show that this is the law ; and, although Alley is an assignee after maturity, his assignor, Bliss, was an assignee before maturity, and Alley is entitled to stand in the place of Bliss, and no defense can be urged by the corporation, as against Alley, which it could not have urged against Bliss, had he remained the owner of the notes, and sought to enforce the r collection. Woodworth v. Huntoon, 40 111. 131. See, also, Rand. Com. Paper, § 673, and authorities cited in note. It only remains, then, to determine whether the defenses here urged would be good as agninst the rights of Bliss, were he, in- stead of Alley, attempting to enforce payment of these notes in this proceeding. In Comstock v. Hannah, 76 111. 535, we cited 294 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. with approval the following: "The party who takes it [com- mercial paper] before due, for a valuable cousideration, without knowledge of any defects of title, and in good fnith, holds it by a title valid against the world. Suspicion of defect of title, or the knowledge cf circmnstanccs which would exciie such suspicion in the mind of a prudent man, or gross negligence on the part of the taker, at the time of tlie transfer, will not defeat his title. That result can only be produced by bad faith on his part. The bur- den of proof lies on the person who assails the right claimed by the l^arty in possession." We followed this ruling in Shreeves v. Allen, 79 J 11. 553, and INIurray v. Beckwith, 81 111. 4.3. The evi- dence here fails to show l)ad faith in Bliss in olitaining the assign- ment of these notes, but ex[)ressly proves the contrary. The utmost that can be said in that respect is that he might by inquiry have ascertained the consideration for which the notes were given. But this only ])roves that, in failing to make such inquiry, he was negligent, and, under what is quoted supra, is insufficient to affect him witli notice. The only evidence upon the question is the testimony of Bliss himself. He testified that he received the notes from Ellickson, " two or three days or a week after their execution," in payment for indebtedness by P^llickson to himself for professional services as an attorney at law; that he did not know that the notes were in existence until Ellickson gave them to him ; and that he subsequently gave the notes to Alley in pay- ment of a debt which he owed Alley. He admits that he had been acting for the corporation and P>llickson, as their attorney at law, since the beginning ('f this suit, and that he did some work for them in that cajjacitv lu-fore that time. There is not a par- ticle of evidt nee in ihe abstract that he had actual knowledge of the consideration of these notes, or the circumstances under which they were execiite/1, at the time they were assigned to him ; and we cannot infer that he had such knowledge merely because he may have had an opportunity, by the exercise of diligence, to have obtained it. We find no error in the judgment of the appellate court. It is therefore affirmed. Pledgee as an Indorsee and Bona Fide Holder — His Riglits and Oblijjations. Handy v. Sibley, 40 Ohio St. 329 (17 N. E. 329). Error to circuit court, Hamilton county. The original action was commenced in the court of common pleas of Hamilton county by the defendant in error, James W. Sibley, against Helen A. Handy, Mariettc B. H;\ndy, Charles E. Handy, Jennie A. Handy (now Jennie A. Rhodes), Anna W. Handy, and P^ugene F. Williams, i)laintiffs in error, and Truman B. Handy, t ) foreclose a mortgage as hereinafter set forth. On March 27, 1883, Helen A. Handy, Mariette B. Handy, Charles E. Handy, Jennie A. Handy, and Anna W. Handy, children of 295 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. Truman B. Handy, executed and delivered to their father their promissory note, a copy of which is as follows : — " $25,000.00. Cincinnati, March 27, 1883. Ninety days after date we promise to pay to the order of Tru- man B. Handy, twenty-five thousand ($25,000) dollars, payable at the Citizens' National Bank at Cincinnati, with interest at 6 per cent per annum. Value received. Helen A. Handy. Jennie A. Handy. " Mariette B. Handy. Anna W. Handy." " Chas. E. Handy. Indorsed: " Truman B. Handy." This note was secui'ed by a mortgage deed executed and ac- knowledged March 27, 1883, by the above-named makers of the note, conveying to Truman B. Handy certain described real estate owned by the mortgagors, and situated in the village of Clifton, in Hamilton count}'. The note and mortgage were executed to Truman B. Handy by his children, for his accommodation, and simply as sui'ety for him, and to enable him to pledge the same as collateral, or, by having the same discounted, to obtain money for his convenience and accommodation, and for no other consid- eration. At the time of executing the mortgage the real estate therein described was unincumbered, and worth $100,000. On April 2, 1883, Truman B. Handy executed and delivered to James W. Sibley his promissory note and agreement, a copy of which is as follows: — "$15,000.00. Cincinnati, Ohio, April 2, 1883. " Ninety days after date I promise to pay James W. Sibley, or order, fifteen thousand dollars, for value received ; having depos- ited or jjledged as collateral security for the payment of this note a note for twenty-five thousand dollars, secured by mortgage given me by Helen A. Handy, Mariette B. Handy, Chas. E. Handy, Jennie A. Handy, and Anna W. Handy. And I hereby give to the holder there of full power and authority to sell or collect at my expense all or any part or portion thereof, at any place, either in the city of Cincinnati or elsewhere, at public or private sale, at his option, on the non-performance of the above promise, and at au}'^ time thereafter, and without advertising the same or other- wise giving to me any notice. In case of public sale the holder may purchase without being liable to account for more than the net proceeds of such sale. Truman B. Handy." Indorsed: "James W.Sibley." Truman B. Handy indorsed the note for $25,000, and duly assigned the mortgage securing the same to James W. Sibley, and deposited them witii him, for the purpose and with the power and authority set forth in the above note and agreement of April 2, 1883. On June 9, 1883, Truman B. Handy and his children executed and delivered to Eugene F. Williams an assignment, of which James W. Sibley had notice, and to which he assented in 296 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. certain terms ; a copy of which assignment and assent is as fol- lows : — "Know all men that whereas, Helen A., Mariette B., Charles E., Jennie A., and Anna W. Handy, did on the 27th day of March, 1883, execute and deliver to Truman B. Handy their cer- tain promissory note for twenty-five thousand dollars ($25,000.00), and on the same day executed a mortgage to secure the same, pa}' able ninety (90) days after the date tliereof, with six (G) per cent interest upon certain real estate situated in Clifton, Hamil- ton county, Ohio, and being the same premises described in a mortgage executed by said Helen A. Handy and others to said Truman B. Handy, recorded in mortgage book 461, page 170, Hamilton county, Ohio, mortgage records ; and whereas, said note and the mortgage securing the same were for a valuable consideration assigned and transferred by said Truman B. Handy to one J. W. Sibley to secure the sum of $15,000.00 and interest; and whereas, the said Truman B. Handy is indebted to one Eugene F. Will'ams in something over ten thousand dol- lars ($10,000.00), and being desirous of securing the same: Now, therefore, we do hereby agree and consent that the said Eugene F. Williams shall receive an assign- ment and transftr of ten thousand dollars of, in, and to said note and morlgnge of $25,000.00, together with the interest tliereon, the same bemg the surplus over and above tbe $15,000.00 due said Sibley, and the interest due him under said note and mortgage, and that said surplus of $40,000.00 and the interest accruing thereon, secured by said note and mortgage, shall be applied towards the paj'ment of said indebtedness by said 'I'ruman B. Handy to said Williams, the said Williams, however, agreeing to extend the payment of his claim secured by this assignment for one year from the date hereof, and also agreeing to a[)ply to the diminuti<'n of said in(lel)tedness all dividends that he may receive from the late lirm of Handy, Richardson & Compan}-, of Chicago; interist to be allowed to the said Williams at the rate of 6 per cent per aiunim until the paynicnt of the indebtedness hereby secured. Said Truman B. Handy hereb}' so assigns said note and mortgage, and joins in this agreement. " TuL MAN B. IIanuy. Jknnik a. Hanuy. " Hklkn a. Handy. Anna W. Handy. " Makiettic B. Handy. Ei;genk F. Williams. " Chaulls K. Handy. By Jordan, Joudan & Williams, His Attorneys. "I do hereby acknowledge the service upon me of notice of the above and foregoing assignment made by Truman B. Handy and others to Eugene F. Williams, dated June i>, 1S.S3, and agree hereby to hold said note and mortgage, and deliver the same to said Williams, or his attorneys, Jordan, Jordan t<; Williams, or his legal representatives, upon the payment to me of fifteen thou- sand dollars, and interest thereon at 6 per cent from March 27, 1883, whether said $15,000.00 and interest be paid by said Tru- 297 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. man B. Handy or any other person. 1 sign the above with the agreement and understanding that nothing therein contained shall prevent me from enforcing my security at any time, or shall hold me responsible, in case other persons assert and maiutaia legal rights against said note or the proceeds thereof, or any part thereof. James W. Sibley." The note for Si 5, 000 being past due and unpaid, James W. Sibley caused the note and mortgage for S25,U00, pledged as collateral security for the payment thereof, to be offered at public auction sale, on July 21, 1883, at the chamber of commerce hall in Cincinnati, Ohio, and Sibley, being the highest and best bidder, purchased the note and mortgage of $25,000 for the sum of $15,- 000. The sale was made without the consent of the children of Truman B. Hand}^ none of wh jm had any notice or knowledge of the existence or ter:ns of the power of attorney under which Sibley sold the pledged collaterals, until long after the sale ; nor did they have any notice of the time or place of such sale, nor did they learn of such sale, until long after it was made. Notice of the sale of the pledge at "the chamber of commerce was given to the attorney's of Eugene F. Williams, but not to him personally' ; and before the sale the atlornej^s of Williams informed Sibley by letter that they had not notified their client of the notice si'rved upon them of the intended sale, and that therefore he had no knowledge of Sibley's purpose to offer the pledge for sale. The condition of the mortgage deed having been broken by reason of the non-payment at maturit}^ of the note for $25,000, James W. Sibley filed his petition in the court of common pleas to foreclose the equity of redemption, and prayed that the premises described in the mortgage be sold, and that of the proceeds of such sale there be paid to him the amount due on the mortgage note, to wit : $25,000, with interest from March 27, 1883. Eugene F. Will- iams, who was made defendant in the foreclosure proceedings, claims in his answer that Sibley is entitled to receive out of the proceeds of the sale of the premises, as against him, the sum of $15,000, with interest, and no more. On appeal, the circuit court, upon an agreed statement of facts, which hereinbefore have been substantially set forth, adjudged and decreed the equities of the case to be with vSibley ; that the note for $25,000 set forth in the petition, and the mortgage securing the same, belonged to Sibley ; that he was entitled to a decree against the defendants for the full amount thereof, with interest; and that on failure to pay Sibley $27,802, and costs of suit, the mortgaged premises should be sold, and the last-named sum be paid from the proceeds of such sale. To reverse the judgment of the circuit court, this petition in error is now prosecuted. DiCKMAN, J. {after stating the facts as above). Independent of the power of sale vested in James W. Sibley, by the instrument of writing dated April 2, 1883, he would not have been author- ized to sell at public or private sale the note and mortgage of $25,000, which Truman B. Handy had pledged as collateral 298 CII. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. security for the payment of his note of $15,000. There is a dis- tinction between a pledge of ordinary chattels and a pledge of commercial paper. A pledge of the latter as collateral security for the payment of a debt does not, in the absence of a special power for that purpose, authorize the pledg.-e to sell the securi- ties so pledged upon default of payment, either at public or jiri- vate sale. He is bound to hold and collect the same as they become due, and apply the net proceeds to the payment of the debt so secured. The reason assigm d for this exception to the general rule in relation to tlie sale of property pledged is tliat such securities, not being usually marketable at their fair value, would generally be sold at asicrifice, and injustice would Ihus be done the debtor ; ami it cannot be presumed it was the inten- tion of the parties thus to denl with the securities. Wheeler v. Newbould, 16 N. Y. 31)2; Fletcher v. Dickinson, 7 Allen, 23 ; Nelson v. Wellington, 5 Bosw. 178; Brown v. Ward, 3 Duer, 660; Banking Co. v. Lewis, 12 N. J. Eq. 323; Steel Co. v. Brick Co., 82 111. 548; Z mpleman v. Veeder, 98 111. 613. Ordinarily, where there is a deposit of personal property as security, there is an implixl power of sale upon default, upon giving reasonable notice to the debtor to redeem. But the pledgee of negotial)le paper, who desires a more summary and si)ee(ly m ans of obtaining mone}'- from his security than hy col- lecting the same when it f:ill3 due, or hy a bill in clmncery and a judicial sale under a regular decree of foreclosure, will obtain a special posver of sale from tlie pkdgeor. In enforcing his rights, however, l-y a sale of the pledge, he will be held to tlie strictest good f.iih in the execution of the power f r the protection of the rights of the plt'dgeor, and will be charged with a trust for the benelit of the dehtnr, and the benefit of those to whoiu the debtor may have assigned his inter* st. It seems to be beyond controversy th it the note for 825,000, secured by mortgage, and givi n by the children of Truman B. Handy to their father, was gooil for that am(Kuit, although purchased by Sibley at the sale for $15,000 only, that l)"ing the amount of the note for vhich the n')te of $25,000 had been pledged as collateral securit}'. Upon foreclosure of the mortgage, and sale of the premises, it appi ars that a sum would b-i rcaliz< d more than sutrieient to pay the note of $25,000, sulllci' nt to pay the principal and interest of the note of $15,000, and leave a surplus. The question arises whether Sibley, because of his s de and purchase of the pledge, shall be permitted to retain this surplus eml)raced within tlie note of $25,0(»0 as his own jiroperty, or be held to account for it as trustee to Eugene F. Williams. The mortgage note of $25,000 was executed to Truman B. Hand}' ])y his c Mldren, solelv for his accommodation, to enable him to pledge the same as collateral, or, by discount, to obtain money for his c )nvenicnce, and for no other consideration. They executed the note and mortgage simply as surety for their father. They had no knowledge of the power of sale g ven by him to Sibley until long after the sale 299 ILL. CAS. RIGHTS OF BONA FIDE HOLDERS. [CH. IX. of the pledge ; nor did they have any notice of the time or place of such sale, or leara of the sale until long after it was made. We do not think that, under the circumstances, Sibley can sub- ject their property to the payment of $25,000, when he loantd to their father only $15,000; or that he can retaia the balance, $10,000, without any consideration tlierefor. Handy deposited or pledged the note and mortgage as collateral security for the payment of $15,000, and no more. If, at the maturity and non- payment of his claim, Sibley, without resorting to a sale of the pledge, had sought to enforce payment by foreclosure of the mortgage, he would have been entitled out of the proceeds of the sale of the premises only to the amount of his debt. He could not, by resorting to a sale of the pledge, enlarge his equities, or successfully invoke the aid of a court of equity, in an effort to exact fiom his debtor more than he owed him. The principle is elementary, and as old as the Roman law, that if the creditor exercises his power of sale over the pledge he must give the surplus, after paying himself, to the debtor. D. 13. 7. 42 L. ; Hunter Rom. Law, 439. And as betweea debtor and creditor, whatever may be the effect of a sale as to annulling all the debtor's residuary interest in a pledge of ordinary chattels, when a question arises as to the rights of third parties, who are makers of accoramodati >n paper pledged as collateral security, such parties should not be required to pay the creditor more than the amount of his debt. It has been decided l»y the supreme court of Massachusetts, in Fisher v. Fisher, 98 Mass. 303, that if a promissory note, which is without considi ration as between the original parties thereto, is dlivered witliout consideration to another person, who i)ledges it before its maturity as collateral security for a debt of his own, of less amount than the face of the note, the pledgees, if tliey take it without notice, are to be deemed holders for va'ue, and may maintain an action thereon for the amount due them upon the del>t which it was p'edged to secure. In the opin on of tlie court it was said: " The evidence estab'ished that the plaintiff received the note from the holder before its maturity, without any knowledge of the circumstances under which the d( fendants had delivered it to the payee, or the purposo for which the latter delivered it to the holder, and that it was held by the plaintiffs as c»llateral security for a valid debt due from the holder to tin m. Under tlie decisions of the court these facts proved that the plaintiffs were bona fide holders for value, and without notice, and w. re therefore entitled to recover to the extent of their d* bt for wh eh the note was pledged as co'lateral securit}'." In Duncan v. Gilbert, 29 N. J. Law, 527, it is stated as the rule that the holders of accommodation paper, assigned as collateral security, cannot recover of the accommodation maker any more than the consideration actually advanced. In Bank v. Doyle, 9 R. I. 76, it was held that, in case of accommodation paper pledged, the pledgee can recover of the maker only the amount of the debt due him from the pledgeor. And in Maitland 300 CH. IX.] RIGHTS OF BONA FIDE HOLDERS. ILL. CAS. V. Bank, 40 Md. 540, the doctrine was laid down that, in an action against the maker of a promissory note, made for the accommodation of the indorser, brought by the indorsee, to whom it was passed as collateral security for the payment of notes dis- counted by the indorsee for the benefit of the indorser, the measure of the plaintiff's right of recovery is the amount due on the debts embraced by the security, and that it is incumbent on the plaintiff to t-how what debts were intended to be secured by the note, and the amounts remaining due in res[)ect thereof. "Indeed," says Alvey, J., "all that the plaintiff is entitled to recover is the amount due on the debts intended to be secured, it being conceded that the note was taken as collateral security merely. In such case, while the phiintiff is entitled to be treated as a holder for value it is only so to the extent necessary to pro- tect the debts intended to be secured." The note executed by the children of Handy and pledged as collateral security, being only accommodation paper, and being held in pledge by Sibley, witli no other lien upon it, they might, after the payment of the note of $15,000, have demanded the surrender or cancellation of the collateral. But by the assign- ment of June 9, 1883, it was agreed by and between Truman B. Handy, his children, and P2ugene F. Wilhams, that there should be assigned and transferred to Williams $10,000 of and in the note and mortgage of $25,000, the surplus over and above the $15,000 due Sibley, which surplus should be applied towards the payment of Williams' claim against Handy ; Williams, how- ever, agreeing to extend the payment of his claim for one year from the date of the assignment. The record does not disclose that Williams had any knowledge of the power which Handy had vested in Sibley to sell at public or private sale the collateral note and mortgage, and to become the purchaser thereof. The terms of tiie assignment of June 9tli, and of Sibley's written agreement attached thereto, would not bring such knowledge home to Will- iams, any more than to the child icn of Handy, and it is among the agreed facts that none of the children, until long after the sale of July 21, 1883, had notice or knowledge of the existence of such power of sale. So far as Williams knew, Sibley was a pledgee of negotiable paper secured by mortgage, with no special authority to sell the same as he would a pledge of ordinary chattels, but only empowered to pursue the usual course of fore- closure ])roceedings. The surplus, $10,000, was set apart to him, with the concurrence of all parties to the assignment, in view of a bona fide indebtedness to him by Handy, and for the valuable consideration that he would extend the payment of his claim against Handy. There is nothing in the record inconsist- ent with the i)resuini)tion that the assignment to Williams of June 9, 1883, and tiie agreement by Sibley in relation thereto, were one and the same transaction. Williams having given a valuable consideration, Sibley was bound by his agreement to hold the note and mortgage, and deliver the same to Williams upon 301 ILL. CAS.' RIGHTS OF BONA FIDE HOLDERS. [CH. IX. receiving paj^ment of $15,000, and interest. The proviso of Sibley tliat notliing contained in tlie writing signed by liim should prevent him from enforcing his security at any time, would not be notice to Williams of a special power of sale, but might con- vey the meaning that tbe one year's extension of payment to Handy should not interfere with Sibley's right to enforce his security at any time by a regular foreclosure of the mortgage. And as between "Williams and Handy, and the children of Handy, the equities of the children in the surplus of the note and mort- gage, after paying Sibley's claim of $15,000, would, under the assignment of June 9th, follow and inure 1o the benefit of Will- iams. Nor do we conceive that the rights of Williams should be concluded in equity by the sale of the i)ledge under a power of which he was not cognizant at the time he agreed with Handy to extend the time for the payment of his claim against him, and which extension he might not have granted, if Sibley had defi- nitely notified him, as he might have done, of his power to sell and purchase the pledged collaterals. The existence of the power of sale was a fact which, under the circumstances, Sibley, as a trustee, should have disclosed toWilHams, and his failure to com- municate the fact to him was contrary to the principles of equity. In our opinion the defendant in error, James W. Sibley, has no right to ask anj^thing more than the full payment of his claim, with interest ; and Eugene F. Williams is entitled to receive the surplus of the mortgage of $25,000 over and above the sura of $15,000, and interest, owing by Truman B. Handy to the defend- ant in error. Judgment reversed, and judgment for Eugene F. Williams. 302 CHAPTER X. PRESENTMENT FOR PAYMENT. Section 114. For what purpose, and as to whom is presentment for payment necessary. 115. By whom must presentment be made. 116. Possession as evidence of right to present for payment. 117. To whom should presentment be made. 118. The place of presentment. 119. The time of presentment — Days of grace. 120. Computation of time — Legal holidays. 121. The hour of the day for presentment. 122. Mode of presentment. § 114. For what purpose and as to whom is present- ment for payment necessary. — The holder of :i bill of exchange or of a piomitjsory note almost invariably pre- sents the paper to the acceptor or maker, respectively, for payment on the day of maturity; and there is a more or less popular notion that, if he fails to do this, at the proper time and in the proper way, the holder will lose all his rights in such paper as against all the parties to it. This is, however, not true as to the acceptor of a bill or maker of a note. They are primary obligors, and like all other primary debtors, their liability can be discharged only by payment, or the equivalent of payment, such as a legal release or the operation of the statute of limitation. The general rule, therefore, is that a failure on the part of the holder to present the paper for payment on the day of maturity will not discharge the acceptor of a bill or the maker of a note; and this is true, even where the paper is made payable at a particular bank, or some other specified })lace; and the acceptor or maker can show that he had deposited sufiicient funds to meet his obliga- tion at the stipulated place of payment.^ And this rule is 1 Wolcottu. Van Santvoord, 17 Johns. 248 (8 Am. Dec. 39()) ; Hills r. Place, 48 N. Y. 520 ^8 Am. Rep. 5G8) ; Bank of the U. S. v. Smith, 11 303 § 114 PRESENTMENT FOR PAYMENT. [CH. X. rigorously enforced in the United States, even where the acceptor or maker has provided sufficient funds at the stip- ulated bank of payment, and the bank has failed subse- quent to the maturity of the paper. The lo.-s in such a case falls on the acceptor or maker, respectively, and the holder can nevertheless enforce payment of the bill or note.^ But where a place of payment is specified in the instru- ment, and the acceptor or maker can prove that he was at the place, on the day of maturity, ready to pay the amount, or had so deposited sufficient funds to enable the bill or note to be fully honored ; the failure of the holder to pre- sent for payment will prevent any subsequent recovery of damages and costs, and subsequently accruing interest. ^ Apart from the cases in which there is a stipul.ited place of payment, the failure to present for payment on the day of maturity will prevent the accrument of interest, where there is no stipulation in the paper for the payment of interest from date, and the paper is payable on demand. The interest will accrue in such a case only from the time when demand is made.^ But where interest runs from the date, or the time of maturity is certain and fixed by the Wheat. 173; Cox v. National Bank, 100 U. S. 704; Wilkins v. McGuire, 2 App. D. C. 448; Trammel v. Chipman, 74 Ind. 474; Yeaton v. Berney, 62 111. 617; Jillson v. Hill, 4 Gray, 31G; Reeve v. Pack, 6 Mich. 240; Mayer v. Thomas, 97 Ga. 772 (25 S. E. 761); Callanan u. Williams, 71 Iowa, 303 (32 N. W. 383); Collins v. Trotter, 81 Mo. 275; Jackson v. Packer, 13 Conn. 342; Am. Nat. Bank v. Junk Bros. &c. Co., 94 Tenn. 62; 30 S. W. 753 (accommodation maker). 1 Ward V. Smith, 7 Wall. 447; Adams v. Hackensack I. Co., 43 N. J. L. 638; (43 Am. Eep. 40C) ; Williamsport Gas Co. u. Pinkerton, 95 Pa. St. 62; Wood V. Mechanics &c. Co., 41 111. 267 (1 Am. Lead. Cas. 478). But see Lazier v. Horan, 55 Iowa, 75 (7 N. W. 457). 2 Murray v. East India Co., 5 B. & Aid. 204; Bacon v. Dyer, 12 Me. 19; Hills V. Place, 48 N. Y. 520 (8 Am. Rep. 568); Budweiser Brewing Co. V. Capparelli, 38 N. Y. S. 972; 16 Misc. Rep. 502; Mulherrin u. Han- num, 2 Yerg. 81 ; Lazier v. Horan, 55 Iowa, 75 (7 N. W. 457). 3 Hunt V. Nevers, 15 Pick. 500 (26 Am. Dec. 616) ; Proctor v. Whit- comb, 137 Mass. 303; Hunter v. Wood, 54 Ala. 71 ; Breyfogle v. Beckley, 16 Serg. & R. 264; Estate of Bk. of Pennsylvania, 60 Pa. St. 471; Edgmon?;. Ashelby, 76 111. 161; Walker u. Wills, 5 Ark. 166; Barough v. White, 4 B. & C. 327. 304 CH. X.] PRESENTMENT FOR PAYMENT. §114 terras of the instrument, the failure to make presentment for payment at the proper time, will not prevent the accru- ment of interest from the day of maturity, or affect the holder's right to such subsequently accruing interest.^ The rule is, however, very different in respect to parties secondarily liable on a bill or note. These parties guaran- tee payment of the instrument, provided the presentment for payment is made when the paper falls due. For this reason, the failure to make presentment will discharge the drawer of a bill and the indorsers of a bill or note.^ And where the paper is payable at a specified place, pre- sentment elsewhere and not at that place, will not preserve their liability to the holder.'' The necessity for presentment is held to be so necessary to the perfection of the liability of an indorser, that it has been generally held that an indorser after maturity cannot be held liable on his indorsement, until a demand for pay- ment has been made on the acceptor or maker. ^ 1 Suffolk Bank u. Worcester Bk., 5 Pick. 106; Sweet v. Hooper, 62 Me. 54; Flanders v. Chamberlain, 24 Mich. 306; Joyner v. Turner, 19 Ark. 690; Staynor v. Knowles, 82 lud. 157; Laughlin v. Wright, 63 Cal. 113. 2 Nat. Shoe & Leather Bk. v. Gooding, 87 Me. 337 (32 A. 967) ; Presby V. Thomas, 1 App. D. C. 171; Jaff'ray v. Krauts, 79 Hun, 449; Cayuga Co. Bk. V. Warden, 1 N. Y. 413; Duncan v. McCullough, 4 Serg. & R. 480; Peabody Ins. Co. v. Wilson, 29 W. Va. 528 (2 S. E. 888) ; Burrittv. Tid- marsh, 5 Bradvv. 341; Bowers v. Indust. Bk., 58 111. App. 498; Magruder V. Union Bank, 3 Pet. 87; Otto v. Beldcn, 28 La. Ann. 302; Los Angeles N. B. V. Wallace, 101 Cal. 28G (36 P. 197) ; HofEraau v. HoUingsworth, 10 Ind. App. 353 (57 N. E. 960). And the holder not only loses his remedy against the drawer or indorser on the bill or note itself, but likewise ou the original contract. Adams v. Darby, 28 Mo. 162; 75 Am. Dec. 115 (drawer). 3 Bank of U. S. v. Smith, 11 Wheat. 171; Cox v. National Bank, 100 U. S. 704; Shaw v. Reed, 12 Pick. 132; Lawrence v. Dobyns, 30 Mo. 196. * Berry V. Robinson, 9 Johns. 121 (6 Am. Dec. 267); Hunt r. Wad- leigh, 26 Me. 271 (45 Am. Dec. 108) ; Bassenhorst v. Wilby, 45 Ohio St. 333 (13 N. E. 75); McKinney v. Crawford, 8 Serg. & R. 351; Graul v. Strutzel, 53 Iowa, 712 (6 N. AV. 119); Shelby v. Judd, 24 Kan. 161. In New York, it is held that no subsequent demand is necessary to hold a post-due indorser liable, if the bill or note has been transferred after maturity with the protest attached. St. John v. Roberts, 31 N. Y. 441 (88 Am. Dec. 287). 20 305 §115 PRESENTMENT FOR PAYMENT. [CH. X. The slrict enforcement of the requirement of presentment is by the general rule of law limited to drawers and in- dorsers. As a general proposition, therefore, it may be stated, that a party who is not a drawer or indorser, is not discharged from his liability, if the presentment has not been made on the day of maturity. Parties secondarily liable, who are not rei^ular parties to the bill or note, may, nevertheless, be held. The subjects of irregular indorse- ments and of the rights and obligations of guarantors, are treated fully elsewhere.^ Presentment on the day of ma- turity is not necessary where the paper is non-negotiable for any reason.^ § 115. By whom must presentment be made. — Any bona fide holder, and anyone having lawful possession for the purpose of collection, may present the paper to the acceptor or maker tor payment and receive payment. Pay- ment to such a person will extinguish the liability of all parties to the paper to the lawful holder.^ But, as will be explained more fully in a subsequent chapter,* for the pur- pose of making protest for non-payment, the presentment is required to be made by the notary or his duly authorized deputy. The holder may, of course, make presentment for pay- ment through an agent; and the agent's authority need not be in writing; although, probably, the acceptor or maker may require such written authority or an indorsement of the paper either to the agent or in blank, where it is made payable to order. ^ If the holder be dead, his personal representatives, whenever they are appointed, should make 1 As to irregular indorsements see ante, § 92, and as to guarantors see post, ^ 157. 2 Smith V. Cromer, 66 Miss. 157 (5 So. 619). 3 Leftley v. Mills, 4 T. R. 175; Bachelor v. Priest, 12 Pick. 399; Agnew V. Bk. of Gettysburg, 2 Harr. & G. 478. * See post, Chapter. XI. s See Seaver u. Lincoln, 21 Pick. 267; Hartford Bank v. Stedman, 3 Conn. 489; Bank of Utica v. Smith, 18 Johns. 230; National Hudson River Bank v. Moffett, 17 App. Div. 232 (45 N. Y. S. 588); Cole v. Jessup, ION. Y. 9G; Mt. Pleasant Bk. v. McLeran, 26 Iowa, 306. 306 CII. X.] PRESENTMENT FOR PAYMENT. § 116 the presentment.^ If the paper is payable to a firm, and one of them dies, presentment should be made by the survivors. 2 If the holder is a married woman, in a State where the common law disabilities have not been removed by statute, presentment should be made by, and payment to, tlie husband.^ And if the holder be a pledgee, he should make presentment for the benefit of himself and the pledgor.* § 116. Possession as evidence of right to present for payment. — Only one who has the right to receive pay- ment, on his own account, or as the representative of another can make the presentment. Hence it is exceed- ingly important to determine how far possession may be considered as evidence of the holder's right to present for and to receive pnyment, so as to determine when the paper has been dishonored, or when the acceptor or maker can safely make payment. If the paper is on its face payable to bearer, or it has been indorsed in blank, which makes it subsequently paya- ble to bearer, the possession of the bill or note is held to be prima facie proof of ownership, and of the right of the holder to make presentment and to receive pavment.*" But where the paper is payable to order, and there has been no indorsement in blank, possession is woi prima facie evidence of ownership. The burden of pi-oving ownership and consequent right to make i)resentnient and to receive payment is on the holder, by [)roof of his acquisition of title without indorsement.^ This can be done, wheie the indorsee is dead, by proof of the holder's appointment and qualification as executor or administrator. And where there » White V. Stoddard, 11 Gray, 258 (71 Am. Dec. 711), and ante, § 49. 2 See ante, § 41 . 8 See ante, § 3G. •1 Cowperthwaite v. Sheffield, 1 Sandf. 447; Jennison v. Parker, 7 Mich. 355. '•> Bachellor v. Priest, 12 Piclt. 399; Agnew v. Bank of GeUysburir, 2 Ilarr. & G. 478; Jackson u. Love, 82 N. C. 405 (33 Am. lU-p. 685); Cone V. Browu, 15 Rich. 262. 6 Pease v. Warren, 25 Mich. 9 (18 Am. Rep. 58). 307 § 117 PRESENTMENT FUR PAYMENT. [CH. X. has been an assignment or a s^ale under execution or attach- meiit of the note or bill, by proof of such assignment, execu- tion or attachment. And so it is with the holder of an unindorsed bill or note, payable lo order, who claims to be the agent of the last indorsee. Such professed agent must prove his author- ity. Possession by him of such a bill or note is not pri 771a facie proof of his right to make presentment and to receive payment.^ When an indorser's possession of a bill or note payable to order \?, pi^ima facie proof of ownership, is not definitely determined by the cases. Some of them hold that his possession is presumptive evidence of his right to make presentment only when the subsequent indorsements have been canceled; ^ while others maintp.in that cancella- tion of the subsequent indorsements is not essential to the piHma facie proof of his right to make presentment and to receive payment.^ It would seem more rational, and more in accordance with the fundamental principles of the law of commercial paper to require, in making out a pi'i7iia facie case of ownership by an indorser, not only cancellation of the subsequent indorsements, but also proof that they had been canceled by the subsequent indorsees or with their consent. § 117. To whom should preseutment be made. — It is clear that presentment for payment should be made to the acceptor of the bill and the maker of the note, for they are the primary debtors. And if the acceptor or maker can be found, the presentment must be made to him in » Doubleday v. Kress, 50 N. Y. 410 (10 Am. Rep. 502) ; Dodge v. Nat. Exch. Bk., 30 Ohio St. 1. 2 Bank of Utica v. Smith, 18 Johns. 230; Chautauqua Co. Bank v. Davis, 21 Wend. 584; Lawrence v. Russell, 77 Pa. St. 460; Briukley v. Going, 1 111. 288; Kyle v. Thompson, 3 111. 432. 3 Dugan V. U. S. Bank, 3 Wheat. 172; Bank of U. S. v. United States, 2 How. 711; Kerrick v. Stevens, 58 Mich. 297 (25 N. W. 199); Bank of Kansas City r. Mills, 24 Kan. G04; Best v. Nokorais Nat. Bk., 76 111. 608; Norris v. Badger, 6 Cow. 449; Page v. Lathrop, 20 Mo. 589. 308 CH. X.J PRESENTMENT FOR PAYMENT. § 117 person. But if he cannot be found in the place, where the law requires presentment to be made/ on the day of maturity, presentment and demand should be made of any one, who is of the years of discretion, and who is in charge of such place, whether it be the residence or place of busi- ness of such acceptor or maker. ^ Where a corporation is the acceptor or maker, care should be taken to make presentment to the officer who is authorized to represent the corporation in such matters.^ If the acceptor or maker be dead, and his representatives have been duly appointed and qualified, presentment should be made to such rei)resentatives, if thc}'^ can be found. But if there are no personal rei)resentatives at the time of matutity of the paper, presentment should be made at the place of residence or of busiiic-s of the deceased obligor, to any person of years of discretion, who is in charge of such place ; unless the paper is payable at a bank or some other specified place, when presentment there will be sufficient.* If the acceptor or maker is a firm, presentment to one of the partners is sufficient, even though the partnership has been dissolved, whether by death, by agreement, or by limitation.^ If there are two or more acceptors or makers, 1 As to which ?ee post, § 118. 2 Merchants' Bank v. Spicer, 6 Wend. 443; Hunt v. Maybee, 7 N. T. 266; Stinson v. Lee, 68 Miss. 113 (8 So. 272); Bradley v. Northern Bank, 60 Ala. 259; Draper v. Clemens, 4 Mo. 52; Kleekamp v. Meyer, 5 Mo. App. 444; Whaley v. Houston, 12 La. Ann. 585. And it seems to be a requisite that the certificate of protest shall name or describe the person to whom presentment was made, unless it is stated that no one could be found, to whom presentment could be made. Nave v. Rich- ardson, 36 Mo. 130. 3 Newark India Rubber Co. v. Bishop, 3 E. D. Smith, 48; McKee v. Boswell, 33 Mo. 567; Casco Bk. v. Mussey. 19 Me. 20. * Magruder v. Union Bk., 3 Pet. 87; Bank of Washington v. Reynolds, 2 Cranch.C. C. 289; Hale v. Burr, 12 Mass. 80; Groth v. Gyger, 31 Pa. St. 271 (72 Am. Dec. 745) ; Weems v. Farmers' Bank, 15 Md. 231; Davis v Francisco, 11 Mo. 572 (49 Am. Dec. 98); Frayzer v. Dameron, 6 Mo. App. 153. s Shedr. Brett, 1 Pick. 401 (11 Am. Dec. 209); Hubbard v. Matthews, 54 N. Y. i?, (13 Am. Rep. 562) ; Greatlake i'. Brown, 2 Cranch C. C. 541; 309 § 118 PRESENTMENT FOR PAYMENT. [CH. X. who are not partners, presentment should be made to all of them, at least where they all reside in the same place. ^ But where they reside in different places, the necessity for presentment to all of them varies according to circum- stances. It is certain that where the paper is payable in a partic- ular place, it need be presented to the resident obligors only.^ And where there is no express stipulation as to place of payment, it has been held that prcf^entmeiit need be made only to the obligors who reside in the most acces- sible place. ^ But it would seem that presentment should be made to all, notwithstanding their residence in different places, until payment has been received. And if they reside in places so far distant from each other, that pre- sentment cannot be made on the same day, it must be made to the more distant one, as soon as possible after maturity.* If a bill is accepted siqjra protest^ presentment for payment should be made to the drawee and afterwards, in case of non-payment by the drawee, to the acceptor supra protest, and both presentments must be averred in the protest.'^ § 118. The place of presentment. — If a place of pay- ment is not stated in a bill or note, it is a presumption of law that it is payable at the domicile of the acceptor or maker, or at the place where he conducts his business, if Erwin v. Downs, 15 N. Y. 575; Fourth Nat. Bank v. Henschen, 52 Mo. 207; Mount Pleasant Bank v. McLeran, 26 Iowa, 306. If one of the partners dies, presentment should be made to one of the surviving partners, and not to the personal representatives of the deceased part- ner. Cayuga Co. Bk. v. Hunt, 2 Hill, 635. 1 Arnold v. Dresser, 8 Allen, 435; Gates v. Beecher, 60 N. Y. 518 (19 Am. Kep. 207); Britt v. Lawson, 15 Hun, 123; Bank of Red Oak v. Orvis, 40 Iowa, 332; Benedict v. Schraiegs, 13 Wash. 476 (43 P. 374) ; Nave V. Richardson, 36 Mo. 130. 2 Smith V. Little, 10 N. H. 526. 3 Harris v. Clark, 10 Ohio, 6. * See 1 Daniel's Negot. Inst., § 595; 1 Parsons N. & B. 363, note w. As to joint and several notes and billt^ see ante, §§ 10, 11. 5 See ante, §71. 310 CH. X.] PRESENTMENT FOll PAYMENT. § 118 he has any. And presentment should be made to him at such ph\ce. The phice of the date of the instrument is prima facie the phice of payment; and if it happens that the place of date is not the domicile or place of business of the acccjitor or maker, so that he cannot be found in the i)lace of date, the holder is not obliged to make in- £-^^10^ quiries after the obligor's al)ode or place of abode; and if ]f)0 ^- ^ he does not know where the obligor is to be found, the ,'2^^,r -vn> ' holder satisfies the requirements of the law, if he holds the 3^l--^- paper at the place of date in readiness to receive payment. But if he knows where the acceptor or maker is to be found, the presentment must be made to the latter at his actual place of business or domicile.^ The parties may, however, agree upon a different place of payment, and presentment must then be made at the stipulated place and need not be presented anywhere else, whether such stipulation has been inserted in the body of the bill or note, or it constitutes a collateral agreement; and whether such collateral agreement is verbal or is reduced to writing. The only difference in effect is, that if the stipulation is collateral, it will be binding only on those subsequent indorsers or transferees of the bill or note, who know of the agreement. ^ Where the paper is made payable at either of two or more places, presentment may be made at either of them, and need be made at only one. This ruling hus been nnule quite frequently where a bill or note is payable *' at any bank " in a certain place. ^ J Cox V. National Bank, 100 U. S. 704; Britton v. Nichols, 104 U. S. 757; Hazard w. Spencer, 17 R. I. 5G1 (23 A. 729; Smith v. Philbricli, 10 Gray, 252 (GO Am. Dec. 315); Farnsworth v. Mullen, 1(J4 Mass. 112 (41 N. E. 131") ; Meyer v. llibscher, 47 N. Y. 2Go; In re Parisian Cloaii & Suit Co. '8 Estate, 173 Pa. St. 507 (34 A. 224) ; Apperson v. Bynum, 5 Coldw. 341. 2 Cox V. National Baul<, 100 U. S. 704; Peabody Ins, Co. v. Wilson, 29 W. Va. 528 (2 S. E. 888) ; Meyer v. Hibscher, 47 N. Y. 2G5; Troy City Bank v. Lanman, 19 N. Y. 477; Appeal of Greenboum, 173 Pa. St. 507 (84 A. 224) ; Brown v. Jones, 113 Ind. 4G (13 N. E. 857). 3 Jackson v. Packer, 13 Conn. 342; Way i'. Butterworth, lOG Mass. 75; s. c. 108 Mass. GOS; Maiden Bk. r. Baldwin, 13 Gray, 154 (74 Am. Dec. 627); Boit v. Corr. 54 Ala. 112; Wilcox v. Williams, 5 Nev. 20G. But 311 § 118 PRESENTMENT FOR PAYMENT. [CH. X. As long as the drawee has not accepted a bill, which is made payable in another place, a joint presentment for acceptance and payment may be made at either place, z. e., at his place of business or domicile or at the place of pay- ment. After acceptance, presentment for payment must, of course, be made at the place of payment.* If the bill has been accepted supra protest, the presentment to the drawee must be made at his domicile or place of business.'^ After determining in what city or town presentment should be made, the further question remains to be an- swered, whether presentment should be made to the acceptor or maker at his residence or at his place of busi- ness. If the presentment is made to such obligor in person, and he does not object to the place of presentment, and gives that objection as his reason for refusal to honor his obligation, it will be a good presentment, it matters not where it was made. Presentment in the street would be sufficient under such circumstances.^ But where the presentment is not made to the acceptor or maker in person, or he objects to the unusual place of presentment, the presentment is not good, unless it is made at his resi- dence or place of business. If he has no place of business, or it cannot be found, presentment must be made at his residence in the place of payment.* But where the acceptor or maker has a regular place of tlie office of a private banker is not included in the stipulation for pay- ment "at any bank." Way v. Butterworth, 108 Mass. 608; Nash w. Brown, 165 Mass. 384; 43 N. E. 180 (Trust company). 1 Mason v. Franklin, 3 Johns. 202. And see Wolcott v. Van Sant- voord, 17 Johns. 248 (8 Am. Dec. 396) ; Bank of U. S. v. Smith, 11 Wheat. 173. 2 Mitchell V. Barney, 10 B. & C. 4. 3 King u. Holmes, 11 Pa. St. 456; Parker v. Kellogg, 158 Mass. 90 (32 N. E. 10.38); Gates v. Beecher, 60 N. Y. 518 (19 Am. Rep. 207); Frost u. Stokes, 56 N. Y. Super. 76; King v. Crowell, 51 Me. 244 (14 Am. Rep. 560). * Packard v. Lyon, 5 Duer, 82; Bank of New Orleans v. Whittemore, 12 Gray, 469; Jarvis v. Garnett, 39 Mo. 271. And the same requirement is enforced, where he has abandoned his place of business. Talbot v. Nat. Bank, 129 Mass. 67 (37 Am. Rep. 302). 312 CH. X.] PRESENTMENT FOR PAYMENT. §118 business, where he is in the habit of transacting his busi- ness in general, presentment must be made at that phice, and not at his residence. And if he cannot be found there, or any one else, to whom presentment can be made in his absence, he need not be sought at his residence. The presentment at the place of business is sufficient to bind drawer and indorsers.^ If the maker or acceptor has two regular places of business in the same city or town, and the address of one is given, presentment must be made at the given address, and presentment at the other place is not sufficient.^ Where a place of payment is designated in the l)ill or note ; as for example, at a bank, presentment must be made there and need not be made anywhere else, although the bank was found to be closed, or no one could be found there who was authorized to receive payment. If, how- ever, the bank has transferred its business to another bank or banker, and the holder knows of such transfer, and to whom, presentment should be made at the other bank or banker. But in no such case is it necessary to make pre- sentment at the place of business or residence of the acceptor or maker. '^ If the holder does not know the place of business or residence of the acceptor or maker, and there is no stipulation of a place of payment, the holder must make diligent inquiry after the habitat of the acceptor or maker; and not until he has exhausted every reasonable means of securing the desired information of the whereabouts of 1 Wiseman v. Chiapella, 23 How. 368; Shed v. Brett, 1 Pick. 401 (11 Am. Dec. 209); Berg v. Abbott, 83 Pa. St. 177 (24 Am. Rep. 158); Bank of Commonwealth v. Mudgett, 44 N. Y. 514; Bynum v. Apperson, 9 Heisk. 632; Ilutcbison v. Crutcher (Tenn. '07), 39 S. W. 725; John u. City Nat. Bank, 62 Ala. 529 (34 Am. Rep. 35). But presentment is not sufl3cient, when it is made at a place, where he is transacting .«ome special business, and which is not his permanent and general place of business. Sussex Bank v. Baldwin, 2 Harr. 487. - Brooks V. Iligby, 11 Ilun, 235. ^ Central Bank v. Allen, 10 Me. 41; Douglass v. Bank of Commerce, 97 Tenn. 133; 36S. W.874; Guignon v. Union Tr. Co., 156 111. 135(40 N. E. 556^; Berg r. Abbott, 83 Pa. St. 177 (24 Am. Rep. 158); Waring v. Belts, 90 Va. 46 (1 7 S. E. 739) . 313 § 119 PRESENTMENT FOR PAYMENT. [CH. X. sacli acceptor or maker, can he protest for non-payment, without making the required presentment.^ § 119. The time of presentment — Days of grace. — In order to hold the drawer and indorsers liable on a bill or note, it is necessary to present for payment on the day of maturity. And presentment before or after the exact day of maturity will not be sufficient unless the holder has a sufficient excuse for delay. ^ But this statement is to be qualified by the allowance of the so-called days of grace. Instead of being payable on the day named in, or computed from the terms of the bill or note, inde- pendently of statute, it is really payable three (by local custom, sometimes, four) days after such time. This rule grew out of an old commercial custom of allow- ing drawees and acceptors this extra time for making arrangements for the payment of the bill. At first, this indulgence was a matter of grace, and not a matter of com- mon right, as it finally became, and is now, wherever it has not been abolished by statute. Hence the name, days of grace. After the custom grew into a right, which could be demanded by the acceptor, it was extended to all kinds of commercial paper where the time of maturity was a certain date, or a specified time after date, sight or demand, but not to paper payable on demand.^ Bills payable at sight 1 Grafton Bank v. Cox, 13 Gray, 503; Taylor v. Snyder, 3 Den. 145 (45 Am. Dec. 457); Witkowski v. Maxwell, 69 Miss. 56 (10 So. 453); Gil- christ V. Donnell, 53 Mo. 591; Martin v. Grabinsky, 38 Mo. App. 359. 2 Mechanics' Bk. v. Merchants' Bk., 6 Met. 13; Pendleton v. Knicker- bocker L. Ins. Co., 5 Fed. 238; 7 Fed. IGO; Windham Bk. v. Norton, 22 Conn. 213 (56 Am. Dec. 397) ; Walsh v. Dart, 12 Wis. 635; Griffin v. Goff, 12 Johns. 423; Georgia Niit. Bank v. Ilemlerson, 46 Ga. 487 (12 Am. Rep. 590) ; McMurchey v. Robinson, 10 Ohio, 196. 3 Bank of Washington v. Triplett, 1 Pet. 25; Messmore v. Morrison, 172 Pa. St. 300 (34 A. 45); Osborne v. Smith, 14 Conn. 3C6; WoorufC u. Merchants' Bank, 25 Wend. 673; Bower v. Newell, 8 N. Y. 190; s. c. 13 N. Y. 290 (64 Am. Dec. 550) ; First Nat. Bk. v. Price, 52 Iowa, 570 (3 N. W. 639); Guignon v. Union Tr. Co., 156 111. 135 (40N.E.556); Green V. Raymond, 9 Neb. 295 (2 N. W. 881); Carey-Lombard Co. v. First. Nat. Bk., 86 Tex. 299 (24 S. W. 260). See Commercial Bank v. Varnum, 49 N. Y. 269. 31t CH. X.] PRESENTMENT FOR TAYMENT. § 120 have been held to be both entitled ^ and not entitled^ to days of grace. The custoin of allowing days of grace has also been abolished by statute in many of the States.^ If the paper is payable in installments, days of grace will be allowed for the payment of each installment, unless the bill or note stipulates that the whole obligation matures on default as to one installment, when the one presentment and refusal to pay constitutes a dishonor of the whole bill or note.* Days of grace are not allowed, where the instrument is for some reason nonnegotiable,^ or where the pa[)er con- tains, or the parties have agreed to, a waiver of the right.^ § 120. Computation of time — Legal holidajs. — In all computations of the time of payment of bills, notes and checks, the day of date is excluded, and the last day of the computation included. If the paper is payable in one or more years after date, the first or other subsequent anni- versary of the date would be the day of payment, unless days of grace are allowed, when the day of maturity will be three days after such anniversary of the date. The same would be the rule, where the paper is payable one or more weeks or months after date. If the unit of time be a month, a calendar month is presumed to be intended, and the day of maturity will be the same day of the suc- ceeding month, on which the bill or note is dated. For 1 Cribbs v. Adams, 13 Gray, 597; Thornburgh v. Emmons, 23 W. Va. 325; Walsh v. Dart, 12 Wis. 035; Ward v. Sparks, 53 Ark. 519 (14 S. W. 898); Knotty. Venable, 42 Ala. 18G. 2 Trask v. Martin, 1 E. D. Smith, 505; Daltou City Bank v. Haddock, 64 Ga. 584; Lucas v. Ladew, 28 Mo. 342. 3 It is abolished by the Negotiable Instruments Law recently enacted in New York and other States, See Appendix. * Oridge r. Sherburne, 11 M. W. 374. But no days of grace are allowed iu the payment of Interest. Macloou v. Smith, 49 Wis. 200 (5 N. W. 336). But see contra Coffin v. Loring, 5 Allen, 153, where installment of principal matures at the same time with the interest. 5 Avery v. Stewart, 2 Conn. 69 (7 Am. Dec. 240); Lamkiu v. Nye, 43 Miss. 241. 6 Perkins v. Franklin Bank, 21 Pick. 483. 315 § 121 PRESENTMENT FOR PAYMENT. [CH. X. example, if a note is dated the fifteenth of January, paya- ble one, two or three months after date, it will be due (days of grace excluded), the fifteenth day of February, March and April, respectively. But if the date of the paper be the last day of the month, for example the 31st of January, and payable one, two, or three months after date, the day of maturity will be, respectively, the twenty- eighth of February (twenty-ninth, in leap year), thirty- first of March, and thirtieth of April. ^ If the paper falls due on a Sunday or other legal holi- day, presentment must be made on the day succeeding, if the days of grace are not allowed. But if the days of grace are allowed, then on the day preceding, namely the second day of grace. And if two holidays come together, on the first day of grace. But under no circumstances, except when otherwise provided by statute, can the acceptor of a bill or maker of a note be required to perforin his obliga- tion prior to the actual day of maturity, because of the con- currence of legal holidays at that time.^ If the holiday does not fall on the last day, it is counted in the computation of time, as if it had been a business day.^ The courts take judicial notice of the dates on which legal holidays fall.* § 121. The hour of the day for presentment. — Pre- sentment for payment is required by the law to be made at a reasonable hour of the day. What is a reasonable hour 1 Roehner v. Knickerbocker L. Ins. Co., 63 N. Y. 163; Ammidown v. Woodman, 31 Me. 580; Hartford Bank v. Barry, 17 Mass, 93; Daly u Proetz, 20 Minn. 411; McMurchey v. Robinson, 10 Ohio, 496; McCoy v Farmer, 65 Mo. 244. 2 Barlow v. Gregory, 31 Conn. 261; Staples v. Franklin Bk., 1 Met. 43 (35 Am. Dec. 345) ; Salter v. Burt, 20 Wend. 205 (32 Am. Dec. 530) ; Reed V. Wilson, 40 N. J. L. (12 Vroom) 29; Hirshfleld u.Ft. Worth Nat. Bauk, 83 Tex. 452 (18 S. W. 743); Barrett v. Allen, 10 Ohio, 426; Hitchcock v. Hogan, 99 Mich. 124 (57 N. W. 1095) ; Kuntz v. Tempel, 48 Mo. 75; Bren- cen V. Vogt, 97 Ala. 647 (11 So. 893); Capital Nat. Bank v. Am. Esch. Nat. Bk. (Neb. '97), 71 N. W. 743; overruling Bank v. McAllister, 33 Neb. 646 (50 N. W. 1040). 3 Woolley V. Clements, 11 Ala. 220; Roberts v. Wold, 61 Minn. 291 (63 N. W. 739) ; Bartlett v. Leathers, 84 Me. 241 (24 A. 842). * Reed v. Wilson, 40 N. J. L. (12 Vroom) 29. 31(5 CH. X.] PRESENTMENT FOR PAYMENT. § 122 depends upon the circumstances. If the bill or note is payable at a bank, presentment should be made during banking hours. If the paper is payable generally, and the acceptor or maker has a place of business, at which pre- sentment should be made, business hours are the proper time for presentment; and if the obligor has no place of business, so that presentment must bo made at his resi- dence, any hour before the customary time for retirement will be considered reasonable. But in all these cases, the reasonableness of the hour of presentment is only impor- tant when the holder fails to find the acceptor or maker. If the presentment is actually made to him in person on the day of maturity, it matters not at what hour it is made.^ The acceptor or maker has the whole day in which to make payment. But a second demand cannot be required of the holder. If the paper is payable in a bank, it would seem to be necessary to keep the bill or note at the bank, so that the acceptor or maker may make payment there at any time during the business hours of the day. If it is payable at the place of business or residence of the obligor, he must seek the holder, in order to make payment, where he fails to pay, when the presentment was made.^ § 122. Mode of presentment. — The person who makes the presentment must have possession of the bill or note, so that he may deliver it to the acceptor or maker, if he makes payment. And if the acceptor or maker demands it, the holder must exhibit the bill or note, so that the obligor may inspect it, if he wants to do so. The paper need not otherwise be exhibited; although it seems to be necessary, in making a presentment for payment, that the 1 Farasworth v. Allen, 4 Gray, 453; Bank of Syracuse v. Hollister, 17 N. Y. 46 (72 Am. Dec. 41G) ; Salt Springs Nat. Bank v. Burton, 58 N. Y. 430 (17 Am. Rep. 265V, Reed v. Wilson, 40 N. J. L. (12 Vroom) 29; First Nat. Bank v. Owens, 23 Iowa, 185; Skclton v. Dusten, 92111. 49; Wallace V. Crilley, 46 Wis. 577 (1 N. W. 301); MacFarland v. Pico, 8 Cal. 626; Goodloe V. Godley, 13 Smed. & M. 233 (51 Am. Dec. 159). 2 Harrison v. Crowder, 6 Smed. & M. 4(54 (14 Am. Dec. 290) ; 1 Par- sons N. & B. 374. 317 § 122 PRESENTMENT FOR PAYMENT. [CH. 71. demand of payment should be accompanied by some state- ment or indication that the paper is in the actual posses- sion of the party who is making the presentment.^ Where the paper is payable at a bank, it is sufficient if it is in the conscious possession of an officer of the bank, who is entitled to receive payment. ^ It has also become established usage in many of the States for the bank which holds the paper, to give notice to the acceptor or maker a few days before the day of maturity, that his paper is at the bank and will be due on a certain day. Where the paper is paj^able at the bank, there can be no doubt, that this notice fully takes the place of a more formal presentment.^ But it is not so clear, whether this preliminary notice takes the place of a pre- sentment for payment on the day of maturity, when the paper is not payable at the bank, and is only deposited there for collection. This question has been answered in the affirmative^ and in the negative.^ It is also required that the demand of payment should not vary from the tenor of the paper. It will not be a good presentment, if gold is demanded, where the paper does not call for payment in gold.® ^ Musson V. Lake, 4 How. 262; Arnold v. Dresser, 8 Allen, 435; Legg V. Vinal, 165 Mass. 555 (43 N. E. 518); Lockwood v. Crawford, IS Conn. 361; Ocean Nat. Bank v. Faut, 50 N. Y. 474; Waring v. Betts, 90 Va. 96 (17 S. E. 739) ; King v. Crowell, 51 Me. 244 (89 Am. Dec. 366); Draper v. Clemens, 4 Mo. 52; Smith v. Gibbs, 2 Smed. & M. 479. 2 Chicopee Bk. v. Phila. Bk., 8 Wall. 641; Folger v. Chase, 18 Pick. 63; Nat. Hudson River Bank v. Moffett, 17 App. Div. 232 (45 N. Y. S. 588); Merchants' Bk. v. Elderkin, 25 N. Y. 178; Hallowell v. Curry, 41 Pa. St, 322; State Bk. v. Napier, 6 Humph. 270 (44 Am. Dec. 308); Huffaker v. Nat. Bk. of Monticello, 13 Bush, 644; People's Bk. v. Brooke, 31 Md. 7 (1 Am. Rep. 11); Lawrence v. Dobyns, 30 Mo. 196. « Camden v. Doremus, 3 How. 515; Mills v. Bk. of U. S., 11 Wheat. 431; Lincoln &c. Bk. v. Page, 9 Mass. 155 (6 Am. Dec. 52); Dykmau v. Northridge, 36 N. Y. S. 962; 1 App. Div. 26. ^ Jones V. Fales, 4 Mass. 245; Whitwell v. Johnson, 17 Mass. 449; Grand Bank v. Blanchard, 23 Pick. 505. 5 Pearson v. Bk. of Metropolis, I Pet. 89; Barnes v. Vaughan, 6 R. I. 259; Farmers' Bank v. Duvall, 7 Gill J. &78. 6 Langerberger v. Kroeger, 48 Cal. 147. 318 CH. X.] PRESENTMENT FOR PAYMENT. ILL. CAS. ILLUSTRATIVE CASES. Lazier v. Horan, 55 Iowa, 75 (7 N. W. 457). Smith V. Cromer, 6(J Miss. 157 (5 So. G19). Guignon v. Union Trust Co , lofj 111. 135 (40 N. E. 556). Nash V. Brown, 165 Mass. 384 (43 N. E. 180). Waring v. Belts. 90 Va. 90 (17 S. E. 739). Deposit by Maker of Xote, Payable at Bank, of Money at Such Bank to pay such Note Discharges 3Iaker, if Bank Fails After Day of Maturity, and there has been no Presentment. Lazier v. Horan, 55 Iowa, 75 (7 N. \V. 457). Action upon a promissory note, and for the foreclosure of a mortgage. There was a judgment and decree of foreclosure against the defendant, and he appeals. The facts appear in the opinion. RoTHROCK, J. The promissory note, which is the foundation of the action, is in these words: — " $1,250. Des Moines, Iowa, March 21, 1872. " On or before the twenty- first day of March, 1874, I promise to pay to William Bradcn or order $1,250, with interest thereon from this date until paid, at the rate of 10 per cent per annum, paj'able annually on tlie twenty-first daj'^ of March in each year, for value received, principal and interest paj^able at B. F. Allen's bank in the city of Des Moines. Should any of said interest not be paid when due, it shall bear interest at the rate of 10 per cent per annum from the time the same becomes due, and a fail- ure to pay any of said interest within 30 days after due shall cause the whole of this note to thereupon become due and collectible at once. " TlMOTHV X HoRAN." mark. The mor'gage securing this note is duly stamped with United States revenue stamp, legally canceled ; indorsed cm the back as follows, to wit: '"Pay to the order of Jesse Lazier. William BUAUEN," The note was given for part of the i)urc-liape money of certain real estate situated in Ma(iison county. The land was owned by the plaintiff, and the sale was made througli Braden, and the note was taken payable to the order of Braden, for the plain- tiff's benefit. On tlie twenty-first day of March, 1874, the defendant, who is a resident of Madison county, went to B. F. Allen's bank to pay the note. The note was not at the bank, and the defendant de- posited the amount rccjuired to pay the same, to wit, $1,512.50, 319 ILL. CAS. PRESENTMENT FOR PAYMENT. [CH. X. and took from the bank a deposit ticket, of which the following is a copy: '' B. F. Allen's Bank. " To Timothy Horan. Des Moines, March 21, 1874. Currency to pay note favor William Bradeu for - - - $1,250 00 Interest - 262 50 Duplicate." $1,512 50 Some efforts were made by the defendant, by way of corre- spondence through Percival & Hatton, real estate agents at Des Moines, to have the note sent to the bank, but they were unavail- ing. The money thus deposited remained with the bank, and on the nineteenth day of January, 1875, the bank and B. F. Allen failed, and it does not appear from the evidence what, if any- thing, will be realized on account of said deposit. That it is a total loss does not seem to be seriously disputed. We are required to determine whether the foregoing facts are a defense to an action on the note, or, in other words, where a note is made payable at a bank, and the maker deposits the amount necessary to fully discharge it, and leaves the same there, and the bank afterwards fails, is such deposit a complete defense to an action by the payee or indorsee against the maker? It is well settled that as to the acceptor of a bill of exchange or the maker of a promissory note, payable at a bank or other specified i)lace, no presentment nor demand of payment need be made at the specified place to entitle the holder to maintain an action against the maker or acceptor. Story on Promissory Notes, § 228 ; 1 Daniel on Negotiable Instruments, § 643 ; 1 Parsons on Notes and Bills, i308 ; Wallace v. McConnell, 13 Peters, 136; Fitler v. Beckley, 2 Watts & Serg. 458 ; Armstead v. Arrastead, 10 Leigh, 525. In Parsons on Notes and Bills it is said: " The courts in this country have, with the exception of Louisiana and Indiana, held that such acceptances were not conditional ; that demand need not be averred by the plaintiff, but that if the acceptor was at the place at the time designated, and ready to pay the money, it was matter of defense to be pleaded on his part, which defense, how- ever, is no bar to the action, but goes only in reduction of damages and in prevention of costs." That the maker of a promissory note, and the acceptor of a bill of exchange payable at a particular place, are under the same obligation in this respect, and their rights and liabilities are the same, seems also to be well established. See the authorities above cited. W^hat are the rights of the [)artie3, however, where the maker of a note or the acceptor of a bill deposits the money in the bank designated as the place of payment, and leaves it there, is another question, upon which there is a surprising paucity of adjudicated cases. The learned counsel for the respective parties in this cause have cited us to no case which is exactly in point. 320 CH. X.] PRESENTMENT FOU PAYMENT. ILL. CAS. It is true that in Wallace v. MeConnell, supra, there is lan- guage used from which it may fairly be implied that in such case, if the holder of the note or bill should neglect to present it at the specified place, by reason of which the money should be lost by the failure of the bank or the like, this wou'd be a defense; and in Armstead v. Armstead, supra, it is said " th;it the maker, if he was ready at the time and place to make the payment, may plead the matter in bar of damnges and costs; but he must at the same time bring the money into court which the plaintiff will be entitled to receive. A further consequence, indeed, might follow if nny loss had been sustained by his failure to present, but th's must be set up as matter of defense. In Fitler v. Beck- ley, supra, Houston, J., said: "I incline to the opinion in 13 Peters, 144, as above, that if the maker or acceptor, where the money is payable at a bank, pays the monej' into the bank, to the credit of the paj'^ee on such note or 1)ill, and leaves it there, it will be a complete discharge, though the money should be lost by robbery of the bank or otiierwise ; ])ut this case does not call for an opinion of the court on this point." In Nichols V. Pool, 2 Jones (L.) N. C , in discussing the ques- tion whether a demand at the place of |)a3'ment is necessary to maintain the action, it is snid : "The more reasonable construc- tion that they (the words ' payable,' etc.) were used to convey the idea that the parties had m;ide an arrangement, suggested by Cf)nsiderations of convenience to both sides, according to which the money is to be paid at a particular place, on a given day ; or, in other words, assurance given by the debtor, and accepted by the creditor, that the money will be then and there ])aid. * * * Considered in this sense the effect is thut the creditor does not lose his debt by failing to apply for it at the i)reci3e time and place, but may afterwards recover it; while, on the other hand, the debtor may, if, in fact, he bad the money at tlie time and place, use that as a defense and defeat the action by bringing the money into court, or, if he deposited it, and it was lost by the failure of the bank, he can put the loss on the creditor, because of his laches in not cal ing to get it." In Rhoades v. Gent, 5 B. & A. 244, language to the same effect is used in the opinion of one of the judges. An examina- tion of these cases will show that the question of the rights of the parties where there has been actual dei)Osit made by the maker or acceptor, is not directly involved. Tlicy are all cases upon the question as to whether an action may be maintained with-)ut a demand having been made at the jilace of ))avmcnt. The lan- guage which we have quoted is, however, germane to the question which was before the courts in the several cases involving the rights of the parties to written instruments of this character, and, if nothing more, serves to indicate the views of the learned writers of the opinions cited. In Story on Promissory Notes, § 228, this language is used : "If, by such omission or neglect of i)resentment and demand, 21 321 ILL. CAS. PRESENTMENT FOR PAYMENT. [CH. X. he (the maker or acceptor) has sustained any loss or injmy, as if the bill or note were payable at a bank, and the acceptor or maker had funds there at the time, which have been lost by the failure of the bank, then and in such case the acceptor or maker will be exonerated from liability to the extent of the loss or injury fo sustained." To the same effect see Story on Bills of Exchange, § 356 ; 1 Parsons on Contracts, 272-3 ; Daniell on Negotiable Instruments, § 643. It is correct as claimed by counsel for appellee that these writers cite no authority which supports the proposition an- nounced by them. But, notwithstanding this, the views of these learned authors are entitled to proper consideration. On the other hand, no case has been cited whicti announces the opposite view from that given in the above citations. With the limited time at our disposal, we are unable to make an exhaustive search for authorities and in this case we have found none which are fairly in point. In Rowland v. Levy, 14 La. Ann. 223, it was held, when a note was payable at the office of a commercial firm in New Orleans, and at maturity it was presented by the holder at the place named for payment, and payment refused, and a few days after maturity the maker remitted part of the sum to the mercantile firm to be applied on the note, that this was no payment. It will b ; observed from this statement that the case is wholly different frcmi that at bar. Here, if the note had been presented at maturity. It would have been paid, for Ihe money was in the bank for that very purpose. It would, perhaps, be an unreasonable requirement to hold that the holder of the note or bill should present it ag:iin for ])ayment. We think tliat, upon princi[)Ie, the defendant in this case should be wholly discharged, and we will briefly state our reasons there- for. The note was made payable at a bank. These institutions are depositories of money. They are also collection agencies, througli which by much the larger part of that; branch of the busi- ness of the country is transacted. When a. note is made payalile at a bank the parties expect the colh ction to be made through the bank. It is true, when the defendant deposited the mone}' the bank, while holding it, was technically the agrnt of the de- positor. But the money was deposited for the holder of the note, and it required no act of the depositor to authorize the bank to pa}'^ the note. " If the customer of a banker accept a bill and make it payable at h s banker's, that is of itself a sufficient authority to tho banker to apply the customer's funds in l>aying the bill." Byles on Bills, 151. And if money be deposited for the payment of such a bdl or note the holder may maintain an action against tiie bank therefor. Parsons on Common Law, 130. By the very terms of the contract the defendant agreed to pay the note at the bank. Now, while it is a general rule that pay- ment of a note or bill should be made to the actual holder, yet when the parties have contracted thut payment may be made at a bank it means that payment is to be made at the bank. 'J'he 322 CH. X.] PRESENTMENT FOR PAYMEJIT. ILL. CAS. parties lo this note did not contemplate tliat the payee should make a journey from Indianapolis and meet the maker at Allen's bank, and tliere receive his money from the hands of the maker and deliver liim tlie note. This court has tliree times determined that when the maker of a promissory note, payable in personal property, to be delivered nt a specified time and i)lace, makes a tender of the specific articles and sets them apart at the time and place slipuljted, and the creditor is not there to receive, or refuses to accept, the property, the debt is thereby discharged and the title to the property passes to the creditor. Gaines v. Manney, 2 Green, 251; Williams r Triplett, 3 Iowa, 518 ; State v. Shiipe, 16 Iowa, 36. Now, while it is h< Id in these cases, that upon designating the pro[)erty and settii g it apart for the creditor tlie title of the property passes, and, it may be said, that by the deposit of the money in the bank for the holder the right of property in the money does not pass, because the depositor jiiay withdraw it, yet this distinction is really not an important one, for, as we have seen, if the money remains on deposit, the holder of the note may present his note and take the money, or, if necessar}'^, main- tain an action for it. In one of the cases cited the note provided for i)ayment in brick. Now, if that could be discharged by deliv^- ering the brick set apart for the creditor at the time and place designated, it is difficult to see why, if the note was payable iu dollars, it would not equally be a discharge to set apart and de- posit the dollars for the holder of the note. In our opinion there should have been a judgment for the defendant for costs, and the mortgage should have been canceled, as prayed in the answer. Reversed. Non-nejfotial)lo Iiistriiiuciit — Proseiitinoiit for Paj'- iiieiit Uuucccssary. Smith V. Cromer, G6 Miss. 157 (5 So. G19). Appeal from circuit court, Jackson county ; S. H. Terral, Judge. This is a proceeding by attachment. The affidavit alleged an indebtedness by l>ouis Cromer, l)ut the declaration was against Louis Cromer and several otlier namt d peisons, " doing business under the firm name of Louis Cromer." The following is the instrument sued on : — "$365.74. Moss Point, April 16, 188.S. '•Received on board schooner Robeit Delmas,fr<>m E. B. Smith, 2,244 i)arrels of charcoal, for which I promise to pay to the order of John J. Driscoll, at New Orleans, the sum of S365.74. " Louis Ckomek, Master." The schooner, with the charcoal on board, ran on a bar and sunk, and, the defendant having lirst promised to turn over the 323 ILL. CAS. PRESENTMENT FOR PAYMENT. fcH. X. schooner and cargo in settlement of the indebtedness, and after- wards having refused to do that, or to make any other satisfac- tory agreement about payinoj the indebtedness, this attachment was sued out and levied on the schooner and cargo. The defend- ant Louis Cromer |>leaded that the debt was not due when the attachment was sued out, and the other defendants pleaded that tljey did not make the writing, and that they were not partners with Louis Cromer, and did not promise, etc. On the trial the court refused to admit evidence that the defendants other than Louis Cromer were liable for the debt, for the reason that the attachment had only been sued out against him ; said the court instructed the jury to find for the defendant, because the " bill of exchange for the debt sued on was given payable to John J. Driscoll, at New Orleans, La., and no demand was ever made for the payment of the bill of exchange by any person entitled or authorized to make such demand." Judgment was rendered against Smith, and he appeals. Campbell, J. The plaintiff should have been allowed to show by evidence the liability of the defendants other than Louis Cromer. They had pleaded, and their liability was the question at issue as between them and the plaintiff. The action of the court on the instructions was erroneous. The instrument sued on is not a bill of exchange. It was not necessary for it to be presented in New Orleans for ]ia3anent. The plaintiff certainly showed himself entitled to a verdict against Louis Cromer, and proposed to show the liability of the other defendants, who had pleaded to his declaration, and denied liability, and the court denied him the right to show this. If any objection could have been made by the defendants who were not embraced by name in the attachment, they waived it by pleading to the action. Reversed and remanded. Time of Presentment — Acceleration of Time of Matu- I'ity — Foreclosure of Mortgagee, given to secure Notes — What Law Controls Construction of Notes. Guignon v. Union Trust Co., 156 IlL 135 (40 N. E. 556). Appeal from appellate court. Fourth district. Bill by the Union Trust Company and and others against Emile S. Guignon and others to foreclose a mortgage. Complainants obtained a decree, which was modified by the appellate court. 53 ]11. App. 681. Defendants appeal. Affirmed. This was a bill in equity brought in the circuit court of St. Clair county, to foreclose a mortgage. Upon a hearing in the circuit court, on the answer, replication, and the evidence, a decree was rendered in favor of the complainants in the bill, which, on appeal, was affirmed in the appellate court. The opinion of the a})pellate court is as follows : — " This was a suit brought by the Union Trust Company, trustee, 324 en. X.] PRESENTMENT FOR PAYMENT. ILL. CAS. William H. Alley, John B. Logan, Charles A. Mair, and the exec- utors of the last will of Josephus Collett, deceased, against Eraile S. Guignon, of St. Louis, Mo., and others to foreclose a mortgage executed by Guignon to secure tlie purchase money of the lands in said mortgage described, amounting to SCO, 000, evidenced by his six principal promissory notes for S(J,GGG.66f each, and notes for the interest tliereon, in favor of said Collett, and three principal notes for the same sum each, and notes for the interest thereon in favor of Emily C. Lyon. Three of said nine principal notes matured March 18, 1892 ; three March 18, 1893 ; and the remaining three, March 18, 1894. Tlie princii)al and interest notes maturing March 18, 1892, and the interest notes maturing September 18, 1892, were paid at maturity. Five of the unpaid Collett notes were undisposed of when he died, and were held by his execu- tors; and the remaining unpaid five notes he sold to complainant Alley, two of which, maturing March 18, 1893, were protested by Scudder, notary. P^mily C. Lyon sold the five unpaid notes payable to her to complainant Mair, before maturity. The prin- cipal note, due March 18, 1893, and the note for interest thereon, due on s ime date, for $400, were protested by Carr, notary; and complainant Lyon, after the protest, bought them of Mair, be- cause L3-on had guaranteed their payment. The remaining three of said unpaid notes are held and owned by Mair. Damages of 4 per cent on the amount of the protested notes were asked for in the bill, by virtue of the provisions of the Missouri statute set out at length therein. The mortgage provides that compensation shall be made to the trustee for all services rendered, and also that the mortgagor agreed to pay all expenses, fees, and charges of the said trust company in executing the trust. The bill also prays for an accounting and payment of the amount which, under the bill and mortgage (macle part thereof), may be found due upon an account stated. 'J"he cause was heard b}'^ the court upon the bill, answer, and evidence, all the defendants except August Gehner appearing; and as to him the court found it had jurisdic- tion, and he, having failed to answer, the bill was taken as con- fessed by him. The court found all the material allegations of the bill were true, setting out the findings specifically, and also that the Union Trust Company, complainant, was entitled to S2,650 as a reasonable compensation for its services and the necessary expenses incurred by it in and about the execution of the trust and referred the cause to the master to compute the amount due each of the complainants, in view of the findings and the several notes which are part of the recoid; and the decree then further lecites that on the 21st of December the master pre- sented his report, finding $6,986.83 duecomplainant ]Mair,S7, 720.- 33^ due complainant Lyon, $14,707.16 dneconi|)lainant Allev, and $14,424. oO to complainant executors Jump and Bot^art, and ap- proves said report, and thereupon decrees that defendant Emile S. Guignon, within 35 days from date of decree, pay each of said parties the sum so due to each respectively, with 5 per cent 325 ILL. CAS. PRESENTMENT FOR PAYMENT. [CH. X. interest from date of decree upon all except said sum of $2,650, which shall be taxed and included as costs. Decree then pro- vides for sale of mortgaged premises in case of default, subject to redemption. " Defendants appealed, and bring up the record to this court. The following errors are assigned: (1) The decree is against the law and the evidence. (2) The decree is for too large an amount. (3) The court erred in allowing 4 per cent damages, under the laws of Missouri, to Alley and Lyon. (4) The court erred in allowing $400 to the Union Trust Company for services, there being no evidence to support such allowance, nor prayer in the bill. (5) The court erred in allowing the Union Trust Com- pany $2,250 for solicitor's fees. The amount is excessive, and there is no provision in the mortgage nor prayer in the bill to that effect. (6) The court erred in allowing the Union Trust Company $2,650 for services and expenses incurre. 878, Hurd's Rev. St.: "When any written contract wherever payable shall be made in this State, or between citizens or corporations of this Slate, or a citizen or cor- poration of this State and a citizen or corporation of any other State, territory, or country (or shall be secured by mortgage or trust deed on lands in this State), sucii contract may bear any rate of interest allowed by law to be taken or con- tracted for by persons or cori)orations in this State, or which is or may be allowed by law on any contract for money due or owing in this State. * * * " We do not think this section of the statute controls the question involved. Here the contract was made iu Missouri, and was payable in that State, and the right to recover the damages on the protest of the note depends upon whether the notes are to be construed according to the laws of Illinois or the laws of Missouri. If the latter, then the dam- ages were properly allowed. In .Jones on Mortgages (ed. 1894, vol. 1, § 0.57) the author says: "The validity of a contract secured by a mongage made iu one State upon lands in another State depends, so far as the usury laws affect it, upon the ques- tion, by the law of which State is the contract itself governed? If the loan is to be repaid in the State where it is made, the con- tract will he governed by ti)e laws of that State, even when secured by mortgage of land situate in another State." Section 660: " The authorities generally do not regard the circumstance that the loan is secured hy mortgage in determining wiiether it is usurious." Section ()62: " But, as to the form and validity of the mortgage deed as a conveyance, the law of the place where the land is situated nuist always govern." In 1 Daniel Neg. Inst. (ed. 1891), p. 930, the author (section 918) says: "The rate of interest wliich a bill of exchange or promissory note bears when no rate is specified, and the question whether or not it shall bear interest are both determinable by the law of the place where it is expressly or impliedly to be paid." Section 921: "The rule applicalile to interest applies as well to what is distinctly termed 'dimages.' Kvni\\ party, drawer, indorser, and acceptor, is liable according to tlie place where the bill is drawn, indorsed, or accepted." Sections 1, 2, c. 98, Hurd's Rev. St., entitled " Negotiable Instruments," provide for the payment of damages on hills of exchange protested for non-payment in certain si^eci- fied cases. This statute would seem to indicate that the allow- ance of dtunages to the holder of protested commercial paper was not contrary to the policy of the State. Under the authorities, we are of ()|iinion tliat the laws of Missouri, where the paper was payable, must control. 329 ILL. CAS. PRESENTMENT FOR PAYMENT. [CH. X. Testimony was introduced before the master showing what the services of the solicitor were reasonably worth in the case, and from the evidence the master reported as follows: " The master further reports from the evidence that a reasonable sum for ex- penses for attorneys for the trustees is $2,250." The evidence before the master also showed that the services of the Union Trust Company were reasonably worth $400. The report of the master was approved, and the court in its decree found "Ihat the Union Trust Company is entitled to $2,650, as a reasonable compensation for its services and the necessary expenses incurred by it in and about the execution of the said trust. Cause referred to master for computation." Upon this linding, the court, among other things, decreed " that, out of the proceeds of the sale, the master in chancery pay, first, the costs of this suit and of snid sale, including $2,650 to said Union Trust Company." As has been seen, the decree was affirmed in the appellate court; and it is insisted that the decision affirming the allowance of $2,650 to the Union Trust Company is erroneous. It will be observed that the allowance of $2,650 embraced two items: First, $400, for the services of the Union Trust Company ; second, $2,250 to cover reasonable solicitor's fees for foreclosing the moi'tgage. We will consider the two items separately. As respects the first, the deed of trust contains this provision : " It is agreed that the said trustee, under this indenture, shall be entitled to a reasonable compensation for all services rendered thereunder, to be paid by the said mortgagor." Here is an express agreement by the mortgagor to pay the trustee compen- sation for his services, and the evidence shows that the compen- sation was worth $400 (the amount allowed by the (ourt) ; and we see no reason why, under the agreement and evidence, the allowance should be disturbed. Appellants' attorneys have cited and rely on Heffion v. Gage, 149 111. 186; 36 N. E. 569, as an authority sustaining their position. An examination of the decision in that case will show that it has no bearing on the ques- tion. In that case the circuit court allowed a trustee's fee, and also solicitor's fees ; but, on appeal to the appellate court, the decree was set a^ide as to the trustee's fees, and affirmed in all other respects. The defendants appealed to this court, and we affirmed the judgment of the appellate court; but the trustee, who was defeated in the appellate court, assigned no cross errors, and the ruling of the appellate court as to his fees was not called in question, and nothing was decided or said on that subject. We now come to the question as the amount allowed the Union Trust Company for solicitor's fees. The mortgage contains a provision for releasing portions of the mortgage property upon certain payments being made, and then follows this clause : " The mortgagor agrees to pay all expenses of such releases, as well as all other fees and charges of the said trust company in executing this trust." Here the Union Trust Company, the trustee named in the mortgage, was called upon by the holders of the mortgage 330 CH. X.] PRESENTMENT FOR PAYMENT. ILL. CAS. indebtedness to foreclose the mortgage. In order to do this, it was necessary for it to employ solicitors,— men skilled in that department of the law. The company was not a lawyer, and could not, without the assistance of a solicitor, forclose the mort- gage; and whatever expense the company incurred in foreclosing the mortgage which was reasonable in amount would, in our opin- ion, fall within the clause of the mortgage sui)ra, providing for fees and charges. Objection is made to the amount allowed. The amount of the mortgage foreclosed wiis over $43,000. The mortgaged lands had been sold by the mortgagor, and, in foreclosing, care and skill were required in order to secure a good title under the decree in case no redemption was made. Under all the circumstances, we are not inclined to hold that the amount allowed was too large. The judgment of the appellate court will be affirmed. Affirmed. Note " Payable at any Bank," Cannot be Presented at a Loan and Trust Company to Hold Indorser Nash V. Brown, 165 Mass. 384 (43 N. E. 180). Exceptions from superior court, Suffolk county ; Albert Mason, judge. Action by Willard G. Nash against Charles H. Brown, indorser on a promissory note held by plaintiff, " payable at an}' bank in Boston." The note was presented to the Massachusetts Loan & Trust Companj', and duly protested. This corporation was created for the purpose of receiving, on deposit, storage, or otherwise, moneys, government securities, stocks, bonds, coin, jewelry, phite, valuable i)apers, and documents, evidences of debt, and other property of every kind, and of collecting and dis- bursing the principal of such property as produces interest or in- come Avheii it becomes due, upon terms prescribed by the corpora- tion, and for the purpose of advancing money or credits on real and personal security, on terms that might be agreed upon. The court, at defendant's request, ruled that the trust compan}' was not a bank, within the contemplation of the contract set forth in the note, and that defendant could not be held, to which rulings plaintiff excepts. Ex( eptiuns overruled. Field, C. J. This is an action against an indorser on a prom- issory note made " payal)le at any bank in Boston." The note was dul^'presi-nted for payment at the office of the Massachusetts Loan & Trust Company, in Boston, and was duly protested by a notary public for non-payment. The question is whether the Massachusetts Loan & Trust Company is a " bank," as that word is used in the jiromissory note. The meaning of the woid " bank " has been considered in Way v. Butterworth, lOG Mass. 75 ; 108 Mass. 509. The Massachusetts Loan & Trust Company is a corporation, but it is not a national bank, and not a State bank, within the meaning of Pub. St. c. 118. It was incorporated 331 ILL. CAS. PRESENTMENT FOR PAYMENT. ^ [CH. X. by St. 1870, c. 323, under the name of the Northampton Loan & Trust Company, and by St. 1875, c. 16, was allowed to change its name to that of the Massachusetts Loan & Trust Company, and to have its location in Boston. See St. 1881, c. 95 ; St. 1888, c. 413. We assume that it has the power to discount commercial paper, and perform many other acts which banks of issue and deposit usually perform. But our statutes make a distinction be- tween trust companies organized under our laws, and banks, and we are not aware that such trust companies are commonly called " banks," or that there is any well established custom to present promissory notes and bills of exchange payable at a bank to such trust companies for payment. The jn'esent case discloses no evi- dence of any such custom. We are of opinion that the ruling was right. Exceptions overruled. Presentment for Payment at Maker's Place of Busi- ness — What is a Reasonable Hour — Note Payable at Bank whick has Gone Out of Business. Waring v. Betts, 90 Va. 96 (17 S. E. 739). Lacy, J. This is a writ of error to a judgment of the corpo- ration court of Danville, rendered on the 6th day of October, 1892. The action was debt on a negotiable note for $500 against J. L. Waring, W. L. Waring, Jr , and J. D. Blair, maker and indorsers of the said note, by E. Betts, the owner of the same. The note was negotiable, and pnyable at the Business Men's Bank of Richmond, Va. , a going concern at the date of the execution of the note, but it went out of existence, ceased to do business, and distributed its assets before the maturity of the note. At tlie time of the maturity of the note it was not paid, and the action was instituted against maker and indorsers of the same as stated. The defense was by demurrer, and by plea of nil debit, and the defense is by the indorsers that the note was not presented for payment, nor duly protested, and that they are not bound. The case was tried by a jury, and a special verdict rendered, which is as follows : — " We, tlie jury sworn to speak the truth upon the issue joined, upon our oath say that the defendant J. L. Waring executed a note in writing in wonis and figures, to wit: 'Danville, Va., April 26th, 1892, $500.00. Four months after date I promise to pay to the order of myself, with interest until paid, five hundred dollars, for value received. Negotiable and payable, without offset, at the Business Men's Bank of Richmond, Va. ; and we, the makers and indorsers of this note, hereby severally waive the benefit of our homestead exemption as to this debt. J. L. Waring. No. due 26-29 Aug.' Indorsers on note: J. L. Waring, Jr., J. D. Blair. And other defendants indorse I said note. Tnat said note was held by W. S. Patton, Sons & Company, bankers, in Danville, on the 29th of August, 1892, in their possession, in Danville. 332 CH. X.] PRESENTMENT FOR PAYMENT. ILL. CAS. That said W. S. Patton, Sons & Company sent the following telegram: 'Telegram of W. S. Patton, Sons & Company to Notary. Dated, Danville, Va., 29th, 1892. To J. F. Glenn, Cash. Merchants' National Bank, Richmond, Va. : We have failed to forward for collection note of J. L. Waring to his order, indorsed by him, W. L. Waring, Jr., and J. D. Blair, dated 26th of April, 1892, payable four months, at Business Men's Bank, Richmond, Va. , for five hundred dollars. Will send it to you by messenger to-day. In mean time demand payment of it in bank hours, and, if not paid, have it protested to-day. Protect us. W. S. Patton, Sons & Company,' — which was received by John F. Glenn, cashier of Merchant's National Bank, Richmond, Va. (one of the witnesses), of Richmond, between one and two p. m. on 29th August, 1892. That said John F. Glenn, as a notary public for the city of Richmond, made a demand on W. L. Waring, Jr., one of the defendants, showing him said writing describing said note, at room 5, Hanewinckle Building, at 2 : 30 p. m., on the 29th of August, 1892, for the payment of said note, and he declined to pay it, and said W. L. Waring, Jr. , said that he was not authorized to represent said Business Men's Bank. That the funds of the bank had all been distril)uted. That there were no assets of the bank in his hands. That the only place of business the said Business Men's Bank had on the 29th August, 1892, was at No. 5, Hanewinckle Building, Richmond, Va. That W. L. Waring, Jr., was the i)riucipal manager of said Busi- ness Men's Bank affairs on the 29th August, 1892. That pre- vious to the 29th August, 1892, the Business Men's Protective Union, under whose charter the Business Men's Bank was doing business, had determined to cease to do banking business, and had distributed its assets. That at a subsequent hour on the 29th August, 1892, at 2:30 P. M., said John F. Glenn went to the said office of W. L. Waring, Jr., No. 6, Hanewinckle Build- ing, with the said note in his possession, which had been brought to him by W. F. Patton, one of the firm of W. S. Patton, Sons & Company, after 5 P. M. on August 29, 1892, to demand payment of said note, and, not finding said W. L. Waring, Jr., in at that time, went immediately to the home of said W. L. Waring, Jr., to demand payment, but did not find him at his residence; whereupon said John F. Glenn, as notary public, protested said note, antl gave legal notice of said protest, as set out in the fol- lowing protest: 'Virginia, City of Richmond, to wit: Know all men by these presents that I, John F. Glenn, a notarj' public in and for the city aforesaid, duly connnissioned and qualified, at the request of the cashier of the INIerchants' National Bank of Richmond, on the 29th of August, in the year of our Lord 1892, presented the note, a copy of which is the reverse of this, written at theplaceof business, and also at the residence of W. L. Waring, Jr. , former vice-president of the Business Men's Bank, at which bank said note is payable, the said Business Men's Bank being no longer in existence, and not having an otfice or other place of 333 ILL. CAS. PRESENTMENT FOR PAYMENT. [CH. X. business, and demanded payment of the same, the period limited having expired, I also make diligent search and inquiry in order to demand payment of the maimer, but was not able to find him ; tbat the said maker of said note, he being a non-resident, had no office or place of business in the city aforesaid; wherefore I, the said notary, do hereby protest the said note, as well against the indorsers as against the maker aforesaid, and all others whom it did and may concern, for all loss, damages, principal, interest, costs, and charges sustained or to be sustained, by reason of the non-payment aforesaid, and I thereupon, on the same day, addressed written notices to the indorsers of the said note, inform- ing them of the demand, non-payment and protest and dishonor thereof, and that the holders look to them for its payment, and directed one to each indorser at his post office address as follows : W. L. Waring, Jr., City of Richmond; J. D. Blair, Danville, Va. ; paid postage, and deposited them in the post office in this city, to be forwarded by first mail. In testimony of all which 1 have hereunto subscribed my name and affixed my notarial seal at the city of Richmond, aforesaid, the day and year aforesaid. J. F. Glenn^ Notary PiibUc, Richmond, Va. Notarial charges, $3.00.' That no part of said note and costs of protest has been paid. Tbat at the time said John F. Glenn demanded payment of said note at 2:30 P. M., August 29th, 1892, W. L. Waring, Jr., did not demand the production of the note sued on in this suit. That J. L. Waring and J. D. Blair resided in Danville on the 29ih August, 1892, and neither had a place of business in Rich- mond, Va. But whether or not, upon the whole matter aforesaid, the issue joined be for the plaintiff or for the defendant, we, the jury, do not know, and therefore we pray the advice of the court; and if, upon the whole matter, it shall seem to the court that issue is for the plaintiff upon said issue, in that case we assess the damages of the plaintiff $503, with interest thereon from the 29lh of August, 1892. But if upon the whole matter aforesaid it shall seem to the court that the issue is for the defendant, then we, the jury, find for the defendants W. L. Waring and J. D. Blair upon the said issue. That the business hours of the banks in Richmond were from 9 A. M. to 3 P. M., though it is the cus- tom in Richmond to demand payment after three P. M. H. A. Cobb, Foreman." — Whereupon, it appearing to the court that the law was for the plaintiff, judgment was rendered for tlie plaintiff against the defendants, in the sum of $503, with interest from the 29th day of August, 1892, as by the jury in their verdict ascertained ; whereupon the plaintiff applied for and obtained a wr.t of error to this court. The first question arising here is that raised by the demurrer. The declaration states a good case, and sets forth that on its due day it was duly presented for payment of the sum of money therein specified, required payment refused, and that it was duly protested, etc- And the defendant's demurrer to the plaintiff's declaration was properly overruled. The claim of the defendant 334 CH. X.] PRESENTMENT FOli PAYMENT. ILL. CAS, is that there was no presentment of the note, because when pay- ment was demanded of the indorser W. L. Waring, manager of the late Business Men's Bank, Mr. Glenn did not have the note in his possession, and could not have presented it; but, as has been seen from the facts found by the jury, paj'ment was refused by Waring, and the note not asked for, but pa3'ment refused, and the statement made that he was not authorized to represent the bank, which had ceased to do business, and had distributed its assets. Presentment of the 1)ill or note and demand of pa3-ment should be made by an actual exhibition of the instrument itself, or at least the demand of payment should be accompanied by some clear indication that the instrument is at hand, ready to be delivered, and such must really be the case. This is requisite in order that the drawer or acceptor may be able to judge (1) of the genuineness of the instrument ; (2) the right of the holder to receive payment; and (3) tliat he may immediately reclaim possession upon paying the amount. If on demand of payment the exhibition of the instrument is not asked for, and the party of whom demand is made declines on other grounds, a formal presentment by actual exhibition of the paper is consid- ered as waived. Daniell Neg. Inst., p. 485, § 6o4, citing Lock- wood V. Crawford, 18 Conn. 361, and Bank v. Willard, 5 Mete. (Mass.) 216. All the parties subsequent to the principal payor are bound only as his guarantors, and promise to pay only on condition that a proper demand of payment be made and due notice be given to them in case the note or bill is dishonored, and we repeat this is one of the fundamental principles of the law of negotiable paper ; and the infrequency and the character of the circumstances wliich will excuse the holder from making the demand, and still preserve to him all his rights as effectually as if it were made, will illustrate the stringency of the rule itself. 1 Pars. Bills & N. , p. 442. The question of excuse, then, will depend upon whether due diligence lias been used, and presents the ordinary inquiry as to negligence. The principal excuses resolve themselves into two classes: First, the impossibility of demand ; second, the acts, words, or position of a i)arty, proving that he had no right or waived all right to the demand, of the waiver of which he would avail himself. That impossibility should excuse non-demand is obvious, for the law compels no one to do what he cannot perform. But it must be actual, and not merelv hypothetical ; and, though it need not be absolute, no slight difficulty will have this effect. Id. The circumstances which will excuse a demand are such generally as apply to a failure to present and demand payment within the required time, not absolutely. Id. 444, 445. In this case the presentment of the note was not made at bank within the usual bank hours, with the note in possession, but, as we have seen, this was excused in this case (1) b}' the fact that there was no bank to present it at, and (2) because payment was refused upon the ground that the bank had ceased to do business, 335 ILL. CAS. PRESENTMENT FOR PAYMENT. [CH. X. and its assets were distributed ; and the note was not asked for nor required. Payment being refused on other grounds, the right to have produced must be considered as waived. The note, however, was carried during the day to the place of business of the late manager of the bank, and the indorser sought to be charged, and, this being closed, it was carried to his residence, and, that being also closed, it could not be presented to him; and, although it was not in banking hours, it was during the day- time, and before the hour of rest. When the note is payable at a bank it is to be presented during banking hours, and the paj^er is allowed until the expiration of banking hours for payment; but when not to be made at bank, but to an individual, present- ment may be made at any reasonable time during the day during what are termed " business hours," which it is held range through the whole day to the hours of rest in the evening. Pars. Bills & N. 447, citing Bank v. Hunt, 2 Hill (N. Y.), 635 ; Nelson v. Folterall, 7 Leigh, 194. And in the* case of Farnsworth v. Allen, 4 Gray, 453, a presentation made at 9 P. IM. at the maker's residence 10 miles from Boston, when he and his family had retired, was held sufficient. And in Barclay v. Bailey, 2 Camp. 527, Lord EUenborough sustained a presentment made as late as 8 P. M. at the house of a trader. It is only when presentment is at the residence that the time is extended into the hours of rest. If it is at the place of business it must be during such hours when such places are customarily open, or at least while some one is there, competent to give an answer. Pars. Bills & N. 448. In this case there wa3 no presentment to the maker, who could not be found, which, however, was unnecessary, under section 2842 of the Code of Virginia. The protest was in due form, and duly protested, which was authorized by section 2849 of the Code, although the said note was payable at a bank in tiiis State, and under section 2850 is prima facie proof of the facts stated therein, and is sub- stantially in accordance with the finding of the jury. It there- fore appears that such presentment as was requisite was made to the indorser and last manager of the bank, and that it was impossible to present the same at the bank named therein, as it has ceased to exist. We must therefore conclude that there has been sufficient diligence on the part of the plaintiff, and that the judgment of the court below in his favor was right, and should be affirmed. 336 CHAPTER XI. PROTEST. Section 123. The object and necessity of protest. 124. By whom protest should be made. 125. Place of protest. 126. By whom should presentment be made in preparation for protest. 127. Noting dishonor and extending protest. 128. Contents of certificate of protest — Proper time for the same. 129. Protest, evidence of what— When evidence of notice. § 123. The object and necessity of protest. — The pro- test is intended to furnish to the holder legal testimony of the fact thiit the required presentment and demand of pay- ment has been made, and notice of dishonor given, to be used in an action on the bill or note against the drawer and indorser. In the absence of a notarial certificate of protest, these facts of dishonor and notice would have to be proved in open court by the personal testimony of the per- sons who had made the presentment and demand, and who had given the notice of dishonor to the drawer or indorser, who was being sued on the bill or note. Although it would be inconvenient to do this in any case of an inland bill or note, and expensive whore the parties do not reside in the same place ; still, it would be possible to secure the desired evidence, when needed, since all the parties in the case of inland bills and notes, are within the jurisdiction of the courts, in which the action would be brought against the drawer or indorsers. But where the bill or note is for- eign, — because one or more of the parties reside beyond the jurisdiction of the courts of the State or country in which the facts of dishonor of the bill or note occurred — the party who could testify to these facts could not be com- pelled by judicial process to appear and give his testimony in the pending suit against the foreign drawer or indorser. 22 337 § 123 PROTEST. [CH. XI. For these reasons, it has become the universal rule of the lavv merchant of the civilized world, that to secure and per- petuate this testimony the holder must have the foreign bill of exchange and promissory note protested for non-pay- ment. And so necessary is protest now considered in the case of a foreign bill of exchange, that the drawer and indorsers of such a bill cannot be held liable, unless proof of dishonor is made by the protest for non-acceptance or non-payment. No other evidence will be receivable in the place of the protest. It has become an organic part of the foreign bill.^ As long as a promissory note has not been indorsed, pro- test can in no case be required, since the maker is liable in the absence of proof of dishonor of the note. But, as soon as it has been indorsed, and it is a foreign note, the protest is as necessary, in order to fasten liability on the indorser, as in the case of a foreign bill.^ In the case of inland bills and notes, the protest is not necessary, because the facts of dishonor can be shown by the direct testimony of the party who made the present- ment and demand, and met with a refusal of payment, as has already been explained; and, independently of statute authorizing the protest of inland bills and notes, the pro- test of such paper means nothing and has no value what- ever.^ And so, also, in the absence of statute, the protest 1 Union Bank v. Hyde, 6 Wheat. 572; Burke v. McKay, 2 How. 66; Commercial Bank v. Varnum, 49 N. Y. 269; Ocean Nat. Bank. v. Will- iams, 102 Mass. 141; Green v. Louthain, 49 Ind. 139; McMurchey v. Robinson, 10 Ohio, 496; State v. McCormick, 57 Kan. 440 (46 P. 777); Carter v. Union Bank, 7 Humph. 548 (46 Am. Dec. 89) ; Ashe v. Beasley (N. D. '96), 69 N. W. 188; Commercial Bank v. Barksdale, 36 Mo. 563. But see Green v. Elson, 31 Tex. 159. 2 Williams v. Putnam, 14 N. H. 540 (40 Am. Dec. 204) ; Piner v. Clary, 17 B. Mon. 645; Bay v. Mitchell, 15 Conn. 15. But see Kirtland v. Wan- zer, 3 Duer, 278; Bonar v. Mitchell, 5 Exch. 415. 8 Young V. Bryan, 6 Wheat. 146; Union Bank v. Hyde, 6 Wheat. 572; Pollard V. Bowen, 67 Ind. 232; Smith v. Curlee, 59 HI. 221; Bond v. Bragg, 17 III. 69; Wood River Bk. v. First N. Bk., 36 Neb. 744 (55 N. W. 239); Jones v. Heiliger, 36 Wis. 149; Douglass v. Bank of Commerce, 97 Tenn. 133; 36 S. W. 874. 338 CII. XI ] PROTEST. § 124 of a foreign bill is no evidence of dishonor in the country in which the protest was made.^ But in most of the United States and in England (and probably, else- where in the civilized world) statutes have been enacted, which permit the use of the notarial protest in the proof of the dishonor of domestic or inland bills and notes. In some of the States, it is al)solutely required by statute ; and probably in all, the protest is required to be made, in order to recover the special damages which are authorized by the statute to be recovered for the dishonor of the paper. But, sometimes, the statutes are permissive only, and do not absolutely require protest, in order to save the liability of drawer and indorsers.^ Protest is required to be made, not only of non-payment of bills and notes, but, likewise, of the non-acceptance of a bill ; and, this too, when presentment for acceptance is not required to be made before the day of maturity. If the presentment for acceptance is actually made before the day of maturity, there should be a prompt protest for non- acceptance, as in the case of refusal of payment.^ § 124. By wbom protest should be made. — The gen- eral law-merchant requires the protest for dishonor, whether of non-acceptance or non-payment, to be made by a notary public, and by the same notary who presented the paper for honor, and noted its dishonor.* But if no notary can be found in the place of payment — a very unusual occur- 1 Nicholls V. Webb, 8 Wheat. 326; Chessmer v. Nojes, 4 Camp. 129; Corbin v. Planters' N. B., 87 Va. GGl (13 S. E. 98). 2 Bailey v. Dozier, 6 How. 23; Wanzer v. Tupper, 8 How. 234; Town- send V. Auld, 28 N. Y. S. 74G; 8 Misc. Rep. 616; Hays v. Citizens' Sav. Bk. (Ky. '97), 40 S. W. 573; Presby v. Thomas, 1 App. D. C. 171; Brown V. Wilson, 45 S. C. 519; 23 S. E. 630; Ashe v. Beasley (N. D), 69 N. W. 188. •" Bank of Washington I'.Triplett,! Pet. 25; Watson u. Tarpley, 18 How. 517; Watson t'. Loring, 3 Mass. 557; Allen r. Merchants' Bk., 22 Wend. 216 (34 Am. Dec. 289) ; Phillips v. McCurdy, 1 Harr. & J. 187. * Cril)bs V. Adams, 13 Gray, 507; Ocean Nat. Bank v. Williams, 102 Mas><. 141; Commercial Bk. v. Variium, 49 N. Y. 269; Gessuer v. Smith, 18 N. Y. St. Rep. 1013; 2 N. Y. S. 655; Commercial Bk. v. Barksdale, 36 Mo. 563; Carter v. Union Bank, 7 Humph. 548 (46 Am. Dec. 89). 339 § 126 PROTEST. [CH. XI. ence at the present day, — then the protest may be made out by any reputable citizen of the place, customarily attested by two witnesses.^ § 125. Place of protest. — In the case of protest for non-payment of a bill or note, it is patent that protest can l)e made only in the place of payment. But where a bill is made payable in some other place than the domicile or place of business of the drawee; since the bill must at all events be presented for non-acceptance in the domicile or place of business of the drawee; it is held that, not only must protest for non-acceptance be made there, but that the protest for non-payment may be made there also, as long as there has not been a prior acceptance of the bill by the drawee. 2 § 12fi. By whom should presentment be made in pre- paration for protest. — As it has been explained in the preceding chapters, for the purpose of receiving payment, and for every other purpose than that of protest, the proper party to make presentment for acceptance or pay- ment is the holder or his duly authorized agent. If, how- ever, acceptance or payment is refused, and protest for non-acceptance or non-payment is required, the notary public who is to make the protest is obliged by law to make a second presentment and demand for acceptance or non-acceptance, so that he can of his own knowledge certify to the fact of dishonor. For the same reason, it is generally held to be necessary for the notary, who issues the certifi- cate of protest, to make the presentment himself, and not by procuration of his clerk.' Nevertheless, the commercial 1 Burke v. McKay, 2 How. 66; Todd v. Neal's Admr., 49 Ala. 266; Read v. Bk of Ky., 1 T. B. Mon. 91 (15 Am. Dec. 86). 2 Mitchell V. Baring, 4 C. & B. 35; s. c. 10 B. & C. 4. See Grigsby V. Ford, 3 How. (Miss.) 184; Neely v. Morris, 2 Head 595 (75 Am. Dec. 753). * Ocean N. B. v Williams, 102 Mass. 141; Commercial Bank v. Var- num,49 N. Y. 2C9; Gessner u. Smith, 18 N. Y. St. Rep. 1013; 2 N. Y. S. G55; McClaneu. Fitch, 4 B. Mon. GOO; Donegan v. Wood, 49 Ala. 242 (20 340 CH. XI.] PROTEST. § 127 law recognizes the validity of a notarial protest, which is based upon a presentment by the notary's cleric, wher- ever there is a clearly established custom for the clerk to make the presentment in such cases. ^ § 127. Noting the dishonor and extending protest — Proper time for same. — The law merchant requires that the essential part of the protest should be made on the same day that the presentment was made ; so that the errors, due to defective memory, may be reduced to a minimum .^ In order, however, to facilitate the business of a busy notary, particularly in the case of the notary of a large bank, a distinction is made by the law between the writing in full of the certificate of protest, which must be put in evidence in an action on the bill or note against a drawer or indorser ; and a memorandum of the essential facts of dishonor made by the notary in his note book. The memo- randum is called, noting the dishonor; and if it is made on the day of maturity and presentment on the back of the paper, or in the notary's note book, and contains a com- plete statement of the material facts of dishonor; this memorandum is held to be a suflScient compliance with the requirements of the law, that the protest should be made out on the day of presentment. And the notary mav, at his leisure, at any time thereafter before the trial of the action in which it is required, make out his certificate of protest.^ Am. Rep. 275); Commercial Bk. v. Bardsdale, 36 Mo. 563; Clough w. Holden, 115 Mo. 336 (21 S. W. 1071). * Cribbs v. Adams, 13 Gray, 597; Ocean Nat. Bank v. Williarass, 102 Mass. HI; Commercial Bk. v. Varnum, 49 N. Y. 2(;9; Gawtry v. Doane, 51 N. Y. 90; Buckley v. Seymour, 30 La. Ann. 1384; Bk. of Ky. r. Garey, 6 B. Mon. 628; Stewart v. Allison, 6 Serg. & R. 324 (9 Am. Dec. 43:5) 2 Deunistoun v. Stewart, 17 How. 606; Read v. Bk.of Kentucky; 1 T. B. Mon. 91(15 Am. Dec. 86) ; Leftley v. Mills, 4 T. R. 174 ; Commercial Bank v. Barksdale, 36 Mo. 563. 3 Dennistounr. Stewart, 17 IIow. 606; Bailey v. Dozler, 6 How. 23; Cayuga Co. Bk. v. Hunt, 2 Hill, 635; Commercial Bk. v. Barksdale, 36 Mo. 663 ; Grimball v. Marshall, 6 Sm. & M. 359; Orr v. Maginnis, 7 East, 358. 341 § 128 PROTEST. [CH, XI. § 128. The contents of the certificate of protest. — It is desired here, to set forth what are the essential con- tents of the certificate. 1. The certificate should state accurately the date of pre- sentment; and, although probably not necessary, the hour of the presentment should be given. ^ 2. If the bill or note is payable at a particular phice, the certificate should set forth the fact, that presentment was made at that place. ^ 3. It seems to be required, although the reason for it is not very plain, that the certificate should contain distinct and separate si'dtemeuis of present meut for, and demand of , payment.^ 4. The refusal of acceptance or of payment must be distinctly stated.* 5. The names of the persons, by whom and to whom the presentment was made. This is however not strictly neces-ary, as it may be presumed from the statements of presentment and demand that presentment has been made by and to the proper person.^ 6. Although not necessary, it is customary to attach to the certificate a verbatim copy of the bill or note, with all the indorsements thereon, so that the original on which the protest was made, may be easily identified. 7. The notary must sign the certificate. Although not * Walmsley v. Acton, 44 Barb. 312; Chatham Bank v. Allison, 15 Iowa, 357. See Jarvis v. Garnett, 39 Mo. 268 ; Skelton v. Dustin, 92 111. 49. 2 People's Bank v. Brooke, 31 Md. 7 (1 Am. Rep. 11). See Seneca Co. Bk. V. Neass, 5 Denio, 329. 3 Musson V. Lake, 4 How. 262; Gawtry v. Doane, 51 N. Y. 90; War- nick V. Crane, 4 Denio, 460; People's Bank v. Brooke, 31 Md. 7 (1 Am. Rep. 11); Watson V. Brown, 14 Ohio, 473; Nave u. Richardson, 36 Mo. 130; Commercial Bank v. Barksdale, 36 Mo. 563. 4 Littledale v. Maberry, 43 Me. 264; Arnold v. Kinlock, 50 Barb. 44; Young V. Bennett, 7 Bush, 474. But see Derrickson v. Whitney, 6 Gray, 248; Wetherall v. Clagjjett, 28 Md. 465. ^ See Hildeburn v. Turner, 6 How. 69; McAndrew v. Radway, 34 N. Y. 511; Dickerson v. Turner, 12 lud. 223; Witkowsky v. Maxwell, 69 Miss. 65 (10 So. 453); Duckert v. Van Lilienthal, 11 Wis. 56; Stix «. Matthews, 75 Mo. 86, 342 CH. XI.] PROTEST. § 129 absolutely necessary, in the absence of statutory require- ment, it is customary for him to subscribe his name; ^. e., to write his name below the certificate. But a clerk may affix the signature, if done by the notary's authority or direction.* 8. The notary's seal must be impressed upon the cer- tificate. Without such seal, the certificate cannot be re- ceived as prima facie evidence of the facts stated in the certificate. 2 Any sort of an impression on the paper would be a sufficient seal, if it bore evidence of its being the adopted seal of the notary, except, possibly, a mere scit)ll.^ 9. The certificate of protest generally contains now a statement of the fact that notices of dishonor have been sent to parties secondarily liable, and the names of such parties and their addresses are given. The effect of this statement in the certificate is explained in the next section. § 129. Protest, evidence of wliat — When evidence of notice. — The notarial certificate is, at the common law, evidence of the facts therein stated, only so far as they fall within the duty of the notary in making the present- ment and demand of payment. If the notary goes beyond this and certifies to collateral facts, having no direct bear- ing on the sufficiency of the presentment, the certificate is not lawful evidence of those facts; and, if they are to be proven, they must be established by other testimony.* » Fulton V. MacCracken, 18 Mel. 528 (81 Am. Dec. 620). 2 Townsley v. Surarall, 2 Pet. 170; Dickens v. Beal, 10 Pet. 582; Bk. of Kochcster v. Gray, 2 Hill, 227; Mullen v. Morris, 2 Barr (2 Pa. St.) 85; Tickuor v. Roberts, 11 La U; Bradley v. Northern Bk., 60 Ala. 258; Fletcher v. Ark. N. B. (Ark.), 35 S. W. 228; Carter v. Burley, 9 N. H. 558; Rindskopf v. Maloney, 9 Iowa, 640 (74 Am. Dec. 367); Bryden v. Taylor, 2 liar. & J. 396 (3 Am. Dec. 554). But see contra in absence of statute requiring seal, Huffaker v. Nat. Bank of Monticello, 12 Bush, 287; Bk.of Kentucky v. Pursley, 3 T. B. Mou. 238. 3 Bk. of Manchester v. Slason, 13 Vt. 334; Connolly v. Goodwin, 5 Cal. 220. * Townsley v. Sumrall, 2 Pet. 170; State v. McCormick, 57 Kan. 440 (46 P. 777) ; Dakin v. Graves, 48 N. II. 45; Duckert v. Von Lilienthal, II Wis. 57; Dumont v. Pope, 7 Blachf. 367; Wood River Nat. Bank v. First Nat. Bk , 36 Neb. 744 (55 N. W. 2.39); City Sav. Bk. v. Kensington Land Co. (Tenn. Ch. '96), 37 S. W. 1037. 343 § 129 PROTEST. [CH. XI. The notarial certificate is an official act which cannot be performed by any one but a notary. In the absence of statute, enlarging his duties or his powers, his certificate cannot be taken as prima facie evidence of anything else than his performance of his official duties. It is now a very common, if not a universal, custom for the notary, who issues the certificate of protest, to send the notices of dishonor to the parties secondarily liable, whom the holder of the bill or note wishes to hold liable thereon ; and to insert in the notarial certificate a statement that notices of dishonor have been sent to the parties therein named. In many States, this is authorized by statute. In the absence of statute, authorizing and requiring it, this is not a part of the duty of the notary. A local custom may, inde- pendent of statute, make this a part of the notary's duty for the breach of which he could be held personally liable. ^ But, unless a statute authorized it, his statement in the certificate of protest would not be accepted in court as prima facie evidence of the fact that the parties had been duly notified. It would have to be proven by the personal testimony of the notary. ^ If the protest has been made by the notary, at the proper time and in the proper place, but all the statements necessary to prove a proper demand and notice do not ap- pear in the notarial certificate, parol evidence is admissible to supply the deficiency.' 3 1 Dickens v. Beal, 10 Pet. 572; Legg v. Vinal, 165 Mass. 555 (43 N. E. 518) ; Hobbs v. Chemical Nat. Bank, 97 Ga. 524 (25 S. E. 348) ; Brennan V. Vogt, 97 Ala. 647 (11 So. 893); Bank of Rochester v. Gray, 2 Hill, 237; Wood River N. B. v. First N. B., 36 Neb. 744 (55 N. W. 239). 2 Dickens v. Beal, 10 Pet. 572; Sims v. Hundley, 6 How. 1; Hobbs v. Chemical Nat. Bank, 97 Ga. 524 (25 S. E. 348); Miller v. Hackley, 5 Johns. 375 (4 Am. Dec. 372); Schorr v. Woodlief, 23 La. Ann. 473; Lloyd V. McGarr, 3 Barr (3 Pa. St.) 474; Brennan v. Vogt, 97 Ala. 647 (11 So. 893); Couch v. Sherrill, 17 Kan. 622; Duckert v. Von Lilienthal, 11 Wis. 56; Bond v. Bragg, 17 111. 69; State ex rel. Workingmen's Banking Co. v. Edmunds, 66 Mo. App. 47. 3 Magoun v. Walker, 49 Me. 419; Reynolds v. Appleman, 41 Md. 615; Peabody Ins. Co. v. Wilson, 29 W. Va. 528 (2 S. E. 888) ; Seneca Co. Bk. V. Neass, 5 Denio, 329; Sasscer v. Farmers' Bk., 4 Mo. 409. 344 CH. XI.] PROTEST. ILL. CAS. Finally, the protest is prima facie evidence only, and the facts therein stated may be disproved by any compe- tent testimony to the contrary.^ ILLUSTRATIVE CASES. Clough V. Holden, 115 Mo. 336 (21 S. W. 1071"). Wood River Bank i>. First Nat. Bank, 36 Neb. 744 (55 N. W. 239). Sufficiency of Protest — Presentment After Ordinary Business Hours by Notary. Clough V. Holden, 115 Mo. 336 (21 S. W. 1071). In banc. Appeal from circuit court, Jackson county ; R. H. Field, Judge. Action by David M. Clough against John D. Bancroft and Howard M. Holden on a note. The case was dismissed by plain- tiff as to Bancroft. From a judgment for plaintiff , defendant Holden appeals. Reversed. For decision in division No. 1, see 20 S. W. Rep. 695. The other facts fully appear in the following statement by Gantt, J. : — This action was originally commenced against John D. Bancroft as maker, and Howard M. Holden as indorser, of the following note: "$4,000. Chicago, October 6th, 1888. On the first day of July, 1889, after date, I promise to pay to the order of the Union Tie Company, Chicago, four thousand dollars, at room 70, Home Insurance Buikiing, Chicago, Illinois. Value received. No. 9,995. John D. Bancroft." [Indorsed] " Union Tie Com- pany. J. D. Bancroft, Treasurer. Pay to the order of D. M. Clough, Esqr. Howard M. Holden, Kansas City, Mo. D. M. Clough. Pay D. Hoyt, cashier, or order, for collection, account of Bank of Minneapolis. M. Bofferding, Cashier." This last indorsement was erased when the action was begun. John D. Bancroft, the maker, entered his voluntary appearance to the cause, and filed his answer. Holden, the indorser, was duly served in Jackson county, and filed his answer. After the issues were made up, Bancroft applied for a change of venue, pending which the plaintiff dismissed as to him, to which action of the court defendant Holden excepted. The answer of defend- ant Holden contained, first, a general denial, and these special defenses: "(2) This defendant, for his further answer to said 1 Dickens v. Beal, 10 Pet. 572; Dunn v. Parson, 66 Hun, 635; Johnson V. Brown, 154 Mass. 106 (27 N. E. 994); Peabody Ins. Co. v. Wilson, 29 W. Va. 528 (2 S. E. 888); Union Bk. v. Fowlkes, 2 Sneed, 654; Gessner V. Smith, 18 N. Y. St. Rep. 1013; 2 N. Y. S. 655. 345 ILL. CAS. PROTEST. [CH. XI. petition, states that it is true that the said Bancroft made and the said Holden indorsed the note described in said petition, but de- fendant further states that he was merely an accommodation indorser, and that he had no greater or further interest in said note than as accommodation indorser for the said Bancroft. (3) This defendant further states that the said note was obtained from the said Bancroft by fraud and misrepresentation, and with- out consideration, and that the plaintiff at the lime he took said note knew that the same had been obtained from said Bancroft by fraud and misrepresentation, and without consideration, and that he never paid value for the same, and that said Holden was merely an accommodation indorser on said note. (4) This defendant, further answering, states that plaintiff in th's cause did institute suit against him and the said John D. Bancroft, the maker of said note, and that since the institution of said smt, and after answer filed by him in this cause, he refuses further to prosecute his action against the said Bancroft. Wherefore this defendant, having fully answered, asks to be hence discharged, with his costs in this behalf created." To this answer, plaintiff filed the following reply : " The plaintiff , for amended reply to the answer of defendant in the above entitled cause, says it is true th:it the defendant Bancroft made and the said Holden indorsed the said note described in the petition, but denies each and every other allegation contained in said answer, and says that for value received before the maturity thereof the said note was indorsed and delivered to this plaintiff, and he is now the owner and holder thereof in good faith, without any knowledge then or now that there was any fraud or defect or failure of consideration in any wise connected with said note, and prays judgment as in the petition." The trial resulted in a judgment for plaintiff, from which defendant Holden has appealed to this court. The errors assigned will be considei*ed in the order in which it is alleged they occurred. Gantt, J. {after Hating the facts). 1. To sustain his case against defendant Holden as an indorser, plaintiff offered a copy of the note, with all the indorsements thereon as above set forth, with the following certificate of protest: " State of Illinois, Cook county — ss. : Be it known, that on this 3d day of July, in the year of our Lord 1889, I, Ben. vS. Mayer, notary public, duly commissioned and sworn, and residing in Chicago, in said county and State, at the request of the Continental National Bank, went with the original note, of which a true copy is above written, to the office of John D. Bancroft, Room 70, Home Ins. Bldg., at 5:20 P. M., to demand payment thereon, and found the door locked, whereupon I, the said notar3% at the request of the aforesaid, did protest," etc. ; which certificate was duly signed by the notary, and sworn to before Howard Rope, another notarv. To the introduction of this certificate of protest defendant ob- jected, for the reason that it appeared the note was payable at an office, room 70, in an insurance building, and the certificate 346 CH. XI.] PROTEST. ILL. CAS. does not recite that this note was presented during business hours; that it could not be said, as a matter of law, that 5:20 P. M. was within business hours. The court overruled this ob- jection, to which defendant excepted. Defendant afterwards called Thomas Wright, and this witness having testified that he was and had been a resident of Chicago for a year and a half, and knew the location of the Home Insurance Buildino:, in said city, he was asked what were the ordinary business hours in Chicago, and witliin what hours business men could usually be found in their offices. Tlie court refused to permit him to answer the question. After repeated efforts to show the custom as to business hours, all of which were overruled by the court, " defendant offered to prove by this witness that this presenta- tion and demand for pa3'ment were not made in the usual business hours of ottice men and business men in the city of Chicago," which was by the court excluded, and defendant excepted. Ihe admission of the certificate over objection, and the rejec- tion of the evidence to show that a demand for payment, made at 6:20 P. M., was not within business hours, present the question very clearl}-, in two aspects. The note sued on was made pay- able at a specified business place. If a negotiable promissory note or bill of exchange is made payable at a particular bank, presentment for j^ayment must be made at said bank during banking hours. Tied. Com. Paper, § 317; 1 Daniel Neg. Inst., § 600; Story Prom. Notes (7th ed.), §§ 22G, 227; Story Bdls, §§230-249; Swan v. Hodges, 3 Head, 251. And it is well settled that if a i)romissory note is payable at a particular busi- ness place, whether bank or not, it will be sufficient for the holder, in order to charge the indorser, to present the same for payment at the specified place, within busmess hours, and he is under no obligation, in case of dishonor at that place, to present it for payment elsewhere, or personally to the maker. Law- rence /y. Dobyns, 30 Mo. 19G; 1 Daniel Neg. In^t., §635; Story Prom. Notes, § 234 ; Sulsbacher v. Bank, 86 Tenn. 201; 6 S. W. Kep. 120; Brent's Exr's v. Bank, 1 Pet. 92; Cox V. Bank, 100 U. S. 716; Hawkey v. Borwick, 4 Bing. 136; Bank v. Smith, 11 Wheat. 171. That the note in (piestiou was presented at the place designated — the office of Bancroft, Room No. 70, Home Insurance Building, Chicago — on the day it matured, doesnot admit of question. On this point the notary's certificate is exi)licit, but the defendant insisted the certificate of protest was in^ullicient in not stating that he presented the note within business hours. He states tliat he presented it at 5:20 o'clock, P. M. The certificate is sufiicient on its face to raise the presumption that he made the demand within business hours. Sulzbacher v. Bank, 8C^ Tenn. 205 ; 6 S. W. Rep. 129 ; Baura- gardner v. Reeves, 35 Pa. St. 250 ; Wiseman r. Chiappella, 23 How. 368, 379, 380; Burbank v. Beach, 15 Barb. 326; Bank v. Hunt, 2 Hill, 635. In these cases in the supreme court of the United States and New York the certificate was general, and the 347 ILL. CAS. PROTEST. [CH. XI. courts ruled the presumption was that the notary had made the presentment during business hours. We take it that 5 :20 P. M. is not such an unusual hour that this court would be justified in holding, as a matter of law, that it was not within business hours in Chicago. American courts are wont to take judicial notice of the banking hours of any large city lying within the area of the jurisdiction of the court, though there is no authority for sup- posing that the banking hours of the city of New York would be considered as judicially known to the courts of Boston or Chicago, or vice versa. " Unquestionably proof would have to be intro- duced." Daniel Neg. Inst., § 601; Morse Banks, 371. But although the notary's certificate is prima facie evidence that the note was presented for payment in business hours, it is only prima facie. This brings us to the point of controversy in this case, the action of the trial court in refusing to permit the appellant to show that 5:20 P. M. was not within business hours in Chicago. It will be observed that the competency of the witness to speak as to the custom was not challenged because he had not qualified himself. The objection was not to -the competency of the witness, but of his testimony. It is too late to raise the question of per- sonal disqualification for the first time in this court. Seliginan V. Rogers, 21 S. W. Rep. 94 (division No. 2, at this term). The ruling of the court was made squarely upon the subject-matter of the proposed evidence. If the evidence was competent, then it was error to exclude it, because it fully met the requirement, in that the inquiry was as to the general hours of business in Chicago, among business and office men. The question itself suggested its materiality, but counsel, unwilliug to risk that, went fur- ther, and made the offer of proof, which clearly shows it was material, thus complying with the rule announced in Jack- son V. Hardin, 83 Mo. 178, 186 ; Thomp. Bills, 302 ; 1 Daniel Neg. Inst., § 601. "When the presentment is at the place of business it must be during the hours when such places are customarily open, or at least while some one is there competent to give answer. It is only when presentment is at the residence that the time is extended to the hours of rest." Id. 603. The rule thus announced by Mr. Daniel is approved by the other text writers on commercial law generally. The question, it must be remembered, is not whether a demand actually made on Bancroft on the day in question after business hours would be good, but is a call at his business office, after the expiration of business hours, after it was closed for the day, with no other effort to find him, a sufficient presentment to dishonor the bill and hold the indorser? In other words, can a party invoke the right to this constructive demand, without making it within business hours.'* We think that both reason and the authorities generally hold that such a presentment is not sufficient to bind the indorser. Dana v. Sawyer, 22 Me. 244 ; Parker v. Gordon, 7 East, 385 ; Shed v. Brett, 1 Pick. 412; Baumgardner v. Reeves, 35 Pa. St. 250; 348 CH. XT.] PROTEST. ILL. CAS. Swan V. Hodges, 3 Head, 251 ; "Wiseman v. Chiappella, 23 How. 368, 380; Story Bills (4th (d.). § 236; Bayley Bills & N. (5th ed.), c. 7, § 1, p. 199, The rule is tersely stated by Thompson, J., in Bauragarten v. Reeves, supra: " It is tlie duty of a notary when he receives a hill or note, intended to be protested, to make a demand of the party primarily lial)le, at his usual place of bus- iness, within business hours." In Elford v. Teed, 1 Maule & S. 28, Lord Ellenl)orough, C. J., said: "There was not any text writer upon whose authority a presentment of a bill by a notary at a house of business, after it was closed, could be sus- tainrd. It is laid down in Marius that it must be made during times of business, at such seasonal ile hours as a man is bound to attend, by analogy to the lioral juridicae of the couris of justice." Mar. Bills (2d rd.), 187. To this line of authorities, respond- ent opposes the case of Skelton v. Dustin, 92 J 11. 49, 54. We have examined that case with care, and we cannot find anything in the decision based upon the facts of the case that is in con- flict with the view we have taken of the law on this subject. That part of tiie opinion relating to the point under discussion is as follows: " Ills said that a bill of exchange should be presented for payment on the day it is payable, during the business hours on that day (Strong v. King, 35 111. 9) ; and it is claimed there- fore that it must be affirmatively shown, which it is said was not done in this case, that the bill was so presented during his busi- ness hours. The only evi - CHAPTER XII. NOTICE OF DISHONOR. Section 130. Necessity of notice. 131. Who may give the notice. 132. To whom notice should be given. 133. The time allowed for giving^otice. 134. Manner of giving notice, when important. 135. Manner of giving notice where parties to be notified reside in the same place. 136. Personal notice, how and when served. 137. Manner of serving notice on persons residing elsewhere. 138. What is meant by "residing in the same place." 139. Form and requisites of the notice of dishonor. 140. Allegation and proof of notice. § 130. Necessity of notice. — Whenever a bill or note is dishonoied })y a refusal of the drawee or maker to accept or pay, it becomes the duty of the holder, after making presentment and securing protest, whenever that is neces- sary, to give immediate notice of the dishonor to all second- ary obIigf)rs — the drawer and indorsers — whom he wishes to hold liable. The liability of these parties depends upon the full perlormance of the contlition, that the holder has made presentment, and given the required notice of non- payment. If the condition is broken by the failure to give the notice to the party, whom the holder wishes to hold liable, such 'drawer or indorser is completely discharged, not only from all liability on the bill or note, but, likewise, on the original contract, in settlement of which the i)ill or note was issued or indorsed.^ Notice is not required to be ' Musson V. Lake, 4 How. 2G2; Phipps v. Harding, 70 Fed. 4G8; 17 C. C. A. 203; Smith u. Miller, 43 N. Y. 171 (3 Am. Rep. G90) ; Shipman v. Cook, IG N. J. Eq. (1 C. E. Gr.) 251 ; Leonard v. Olson (Iowa, '97), G8 N. W. G77; Allan v. Eldred, 50 Wis. 136 (6 N. W. 565) ; Bettertou v. Roope, 3 Lea, 215. 357 § 131 NOTICE OF DISHONOR. [CH. XII. giveu to the acceptor of u bill or maker of a note,* and to no one, if the bill or note is for any reason non-negotiable.^ § 131. Who may give the notice. — In order that a notice of dishonor may be effective, it must be given by a party to the bill or note, or the re[)resenlative of such a party. A total stranger to the paper and to the parties cannot give the notice.^ Where a representative or agent of a party to the paper gives the notice, he must be duly authorized ; but, being authorized, he may give it either in his own name, or in that of his principal.^ The holder need only give notice to the last indorser; and if the drawer and prior indorsers do not receive notice from any authorized source, they are discharged. But if the last indorser, who receives notice, gives notice for his own protection to the prior indorsers and drawer, as he has a right to do; his notice to them will not only preserve their liability on the paper for his own benefit, to be en- forced when ho is required to make his own indorsement good to the holder; but it will inure to the benefit of the holder, who can then sue the drawer and prior indorsers, as if he or his agent had given to them the required notice. But before a later indorser can give notice, so as to bind the parties, either to himself or to the holder, notice must have been sent to him.^ On the other hand, i.f the holder 1 Marion Nat. Bk, v. Phillips Admr. (Ky.). 35 S. W. 910; Pritchard V. Smith, 77 Ga. 463; Miller v. Clendenin, 42 \V. Va. 416 (-^6 S. E. 512). See ante, §§ 92, 114. 2 Pitman v. Breckenridge, 3 Gratt. 127, and see Cundy v. Marriott, 1 B. & Ad. 696. 3 Stanton v. Blossom, 14 Mass. 116 (17 Am. Dec. 198); Chanvine v. Fowler, 3 Wend. 173; Meise v. Newman, 78 Hun, 428; Jubiata Bk. v. Hale, 16 Serg. & R. 157 (16 Am. Dec. 558) ; Ex parte Barclay, 7 Ves. 598. . * Harrison v. Euscue, 15 M. & W. 231 ; Shed v. Brett, 1 Pirk. 401 (11 Am. Dec. 209); East Haddara Bk. v. Scoville, 12 Conn. 303; Sraedes v. Utica Bk., 20 Johns. 372; Cowperlhwaite v. Sheflield, 1 Sandf. 416; Ashe V. Beasley (N. D ), 69 N. W. 188; Renick v. Robbins, 28 Mo. 339; Bank of Missouri v. Vaughn, 36 Mo. 90; Swayze v. Britton, 17 Kans. 629; Drex- ler V. McGlynn, 99 Cal. 143 (33 P. 773). 5 Chapman v. Keane, 3 Ad. & El. 193; Boteler v. Dexter, 20 D. C. 26; Bachellor v. Priest, 12 Pick. 399; City N. B. v. Clinton Co. N. B., 49 Ohio 358 CH. XII.] NOTICE OF DISTIONOIJ. § 132 has notified the drawer and all the indorsers, the notices will inure to the benefit of any one of the intermediate indorsers, who is compelled to pay the hill or note.^ It has been hehl that the acceptor of a bill or the maker of a note may give the notice. ^ If the holder be dead, his personal representative must give the notice, within a reasonable time after his appoint- ment and qualification.^ § 132. To whom notice should be given. — All the parties, secondarily liable, whom the holder wishes to hold liable, must be notified. And this is true, even of an indorser for collection only.^ And whenever the circum- stances require that demand should be made after maturity, where there has been an indorsement and transfer after maturity, notice must be given to the overdue indorser, as well as to the indorsers be-fore maturity.^ But wher- ever presentment has been made at maturity, and proper St. 351 (30 N. E. 985); Stafford v. Yates, 18 Johns. 327; Aldine Mfg. Co. V. Warner, 96 Ga. 370 (23 S. E. 404); Renshaw v. Triplett, 23 Mo. 213; Stix V. Matthews, 63 Mo. 371; Jarnlgen v. Stratton, 95 Tenn. 619 (32 S. W. 625); Swayze v. Brilton, 17 Kans. 627; Big Sandy N. B. v. Chilton, 40 W. Va. 491 (21 S. E. 774); Wood v. Callaghan, 61 Mich. 402(28 N. W. 162). 1 Beale v. Parrish, 20 N. Y. 407 (75 Am. Dec. 414). ^ Chapman v. Keane, 3 Ad. & El. 193; Brailsford v. Williams, 15 Md. 150 (74 Am. Dec. 559); French v. Jarvis, 29 Conn. 347 (notice by holder enuring to indorse after maturity) ; Fir.st N. B. v. Ryerson, 23 Iowa, 508; Johnson v. Harth, 1 Bailey, 482; Glasgow" v. Pralte, 8 Mo. 336 (40 Am. Dec. 142;. But see Sebrte Deposit Bk. v. Moreland, 96 Ky. 150 (28 S. W. 153). 3 White V. Stoddard, 11 Gray, 258 (71 Am. Dec. 711). * Scott V. Lifford, 9 East, 347; Bank of Missouri v. Vaughn, 36 Mo. 90; Whittier v. Collins, 15 R. I. 44; 23 A. 39 (although secured by col- laterals) ; Sibley v. Am. Exch. Nat. Bank, 97 Ga. 126 (25 S. E. 479) ; McNeil V. Wyatt, 3 Humph. 125; Rosson v. Carroll, 90 Tenn. 90 (16 S. W. 66); Fiske v. Pratt, 154 Mass. 367 (28 N. E. 282). * Colt V. Barnard, 18 Pick. 260 (29 Am. Dec. 580); Lockwood v. Crawford, 18 Conn. 361; Leavitt v. Putnam, 3 N. Y. 494 (53 Am. Dec. 322); Fell v. Dial, 14 S. C. 247; Beebe v. Brooks, 12 Cal. 308; Shelby ». Judd, 24 Kans. 161 ; Graul v. Strutzel, 53 Iowa, 712 (6 N. W. 119) ; Smith V. Caro, 9 Oreg. 278; Hart v. Eastman, 7 Minn. 74. See PIcklar v. Har- lan, 75 Mo. 678; Baker r. Robinson, 63 N. C. 191. 359 § 132 • NOTICE or DISHONOR. [CH. XII. protest has been made and notices issued to drawer and indorsers, a subsequent transfer by indorsement would not require a second presentment, or issue of notice. ^ One notice to an indorsing firm and received by one partner binds all the partners, whether the default occurred before or after the dissolution of the partnership. ^ But if there are two or more independent joint indorsers, notice should be sent to each of them ; notice to one does not even bind that one.^ The notice may, of course, be sent to the agent of a drawer or indorser, if such agent be fully authorized to receive such notices and bind his principal thereby.* If the party to be notified has made an assignment in bank- ruptcy or for the benefit of creditors, it is proper, although it is apparently doubtful whether it is necessary, for the notice to be sent to the assignee.^ If the drawer or indorser be dead, as long as the party notifying does not know of such death, the notice is good, if sent to the deceased party. If his death is known, but no personal representative has yet been appointed, the 1 Libby v. Pierce, 47 N. H. 309; French v. Jarvis, 29 Conn. 347; St. John V. Roberts, 31 N. Y. 441 (88 Am. Dec. 287); Williams?;. Matthews, 3 Cow. 252; Scott v. First N. Bk., 71 Ind. 445. 2 Rhett V. Pole, 2 How. 457; Hubbard v. Matthews, 54 N. Y. 43,50 (13 Am. Rep. 562); Slocum v. DeLizardi, 21 La. Ann. 355 (99 Am. Dec. 740); Fourth Nat. Bank v. Henschen, 52 Mo. 207; Hume v. Watt, 5 Kans. 34. 3 Union Bk. v. Willis, 8 Met. 504, 512 (41 Am. Dec. 541); Shepard v. Hawley, 1 Conn. 367 (6 Am. Dec. 244) ; Hubbard v. Mathews, 54 N. Y. 43, 50 (13 Am. Rep. 562); Bk. of Chenango v. Root, 4 Cow. 126; Sayre v. Frick, 7 Watts v. S. 383 (62 Am. Dec. 249) ; Miser v. Trovinger, 7 Ohio St. 281; Seligman v. Gray, 66 Mich. 341 (33 N. W. 510); Boyd v. Orton, 16 Wis. 95. 4 Fassin v. Hubbard, 55 N. Y. 465; Chouteau v. Webster, 6 Met. 1 (39 Am. Dec. 705) ; N. Y. & Ala. C. Co. v. Selma Sav. Bk., 51 Ala. 305 (23 Am. Rep. 552) ; Louisiana State Bank v. EUery, 16 Mart. N. S. (La.) 87; Wilkins v. Commercial Bank, 6 How. (Miss.) 217; Wilson v. Senier, 14 Wis. 380. See Howard Bank v. Carson, 50 Md. 18. 5 Rhode V. Proctor, 4 B. & C. 517; Am. Nat. Bank v. Junk &c. Mfg. Co., 94 Tenn. 624 (30 S. W. 753) ; Casco Nat. Bank v. Shaw, 79 Me. 376 (10 A. 67); Importers & Traders Bank v. Shaw, 144 Mass. 421 (11 N. E. 666 ) 360 CH. XII.] NOTICE OF DISHONOR. § 133 notice should be sent within the usual time to the late resi- dence of the deceased drawer or indoiser, addressed to him, or to his '* legal representative," and no further notice is required after the ai^pointmcnt of an executor or administrator.^ It has been held that a notice, sent under such circumstances, addressed to "the estate" of the deceased party, w^ould not be good, although there does not seem to be any satisfactory reason for that conclusion. ^ Nor will a notice, sent before the qualification of the per- sonal representative, be good if it is addressed to one who is expected to, and does subsequently, qualify as such.^ If a personal representative has qualified, and his name and address are known, no other notice but one sent and addressed to him will be sufficient to bind the estate of the deceased drawer or indorser.* § 133. The time allowed for giving notice. — The notice should always be given after, and never before, the bill or note has been dishonored. And, at an earlier time, the law did not make any more specific requirement than that the notice should be given -williin a reasonable time after dishonor. It is now the rule that the holder has until the expiration of the next day in which to give notice, subject to certain modifications, neces:?ary in the cases where the notices hav(i to be sent away from the i)lacc of protest. 1 GoodDOw V. Warren, 122 Mass. 79, 82 (23 Am. Rep. 289); Dodson t>. Taylor, 5G N. J. L. 11 (28 A. 316) ; Merchants' Bk. v. Birch, 17 Johns. 25 (8 Am. Dec. 367); Dcininger v. Miller, 40 N. Y. S. 195; Weaver v. Penn, 27 La. Ann. VI'.); Pillow v. Hardeman, 3 Humph. 538 (39 Am. Dec, !!t5); Liiideman t?. Guldin, 34 Pa. St. 54; Drexler c. McGlynn, 99 Cal. 143 (33 P. 773). - Massachussets Bank v. Oliver, 10 Cush. 557. See contra Bk. of Port Jcrvis v. Darling, 91 Ilun, 236. 3 Mathewson v. Strafford Bk., 45 N. H. 104. ■• Goodnow V. Warren, 122 Mass. 79 (23 Am. Rep. 289); Sma'ley v. Wright, 39 N. J. L. (11 Vroom) 471; Pillow v. Hardeman, 3 Humph. 538 (39 Am. Dec. 195); Barnes v. Reynolds, 4 How (Miss.) 114; Maspero r. Pedesclaux, 22 La. Ann. 227. Notice to one of two or more personal representatives will be sufficient. Bealls v. Peck, 12 Barb. 245; Louis- ana S'.ate Bankv. Dumartrait, 4 La. Ann. 483; Carolina N. B. v. Wallace, 13 S. C. 347 (36 Am. Rep. 694). 361 § 133 NOTICE OF DISHOKOE. [cil. XII. If the drawer or indorser, who is entitled to notice, re- sides in the place of protest, and notice should be sent to his residence, it may be delivered at his residence at any time, before the customary hour for retirement, on the day succeeding the dishonor of the paper. But if the notice is to be left at his place of business, it should be served dur- ing business hours. ^ If the party to be notified resides in some other place, the notice may be sent by mail, and if there be more than one mail, the last mail of the following day will be early enough. If there be but one mail, it should be sent by that mail, unless it is made up at an un- reasonable hour, when the holder may dispatch the notice by the mail of the second succeeding day. What is a rea- sonable hour depends upon the habits of the community. ^ Each indorser has the same time after the receipt of the notice of dishonor, in which to notify the prior parties whom he wishes to hold liable. Aud if one party fails to issue his notice on the day following his receipt of the notice, the party so notified will be discharged of all lia- bility, even though the excessive diligence of the holder or later indorser has enabled the indorser notified to receive the notice within the usual time after dishonor.^ 1 Garnett v. Woodcock, 6 Maule & S. 44; Cayuga Co. Bk. v. Hunt, 2 Hill, 635; Hallo well v. Curry, 41 Pa. St. 322; Bonner v. City of New Orleans, 2 Woods, 135; Adams v. Wright, 14 Wis. 442; Marks v. Boone, 24 Fla. 177 (4 So. 532). 2 Martin v. Ingersoll, 8 Pick. 1; Haskell v. Boardman, 8 Allen, 38; U. S. Bk. V. Barker, 12 Wheat. 559; Bk. of Alexandria v. Swan, 9 Pet. 33; Smith V. Poillon, 87 N. Y. 690 (^41 Am. Rep. 402); Nat. Bk. v. Bradley, 117 N. C. 526 (23 S. E. 455); Stephenson v. Dickson, 24 Pa. St. 148 (62 Am. Dec. 3C9) ; Marks v. Boone, 24 Fla. 177 (4 So. IS2) ; West v. Brown, 6 Ohio St. 542; Downs v. Planters' Bk., 1 Smed. & M. 2G1 (40 Am. Dec. 92); Hartford Bk. v. Stedman, 3 Conn. 489; Chick v. Pillsbury, 24 Me. 458 (41 Am. Dec. 394). If there is no mail on the succeeding day, as might be the case in foreign mail by sea, the notice must be sent by the next regular mail ship. Lenox v. Leverett, 10 Mass. 1 (6 Am. Dec. 97) ; Stainback v. Bk. of Va., 11 Gratt. 260. 3 Shelburne Falls N. B. ■;;. Townsley, 102 Mass. 177 (3 Am. Rep. 446) ; Bartlett v. Hawley, 120 Mass. 92; West River Bank v. Taylor, 34 N. Y. 128; Seaton v. Scoville, 18 Kans. 433 (26 Am. Rep. 779); Manchester Bk. V. Fellows, 28 N. H. 302; Etting v. Schuylkill Bk., 2 Pa. St. 355 (44 3G2 CH. XIT.] NOTICE OF DISHONOR. § ^35 If the succeeding clay is a legal holida}', the notice may, but need not, be sent on that day ; it may be dehiyed until the next business day following. And it has been held that, if an indorser receives notice on a legal holiday, since he is not obliged to open his mail on such a day, he has until the second day after the holiday in which to send out his notices.^ § 134. Manner of giving notice, when important. — If the drawer or indorser, who is to be notilied, actually receives the notice within the accustomed and required time, it is of no consequence how it was transmitted or communicated. The manner of giving notice becomes important only when the party notified did not receive the notice at all, or it did not reach him in due time."'^ § 135. Manner of giving notice, where parties to be notified reside in the same place. — Where parties to be notified reside in the place of presentment, it is now gen- erally required that the notice t^hould be served personally on them or on their representatives, whether the party notifying resides there or elsewhere. Under such circum- stances, a notice sent l)y mail is insulBcient.^ Am. Dec. 205) ; Corbin v. Planters' N. Bk., 87 Va. 661 (13 S. E. 98) ; Stix V. Mathews, 63 Mo. 371; Lawson v. Farmers' Bk., 10 Ohio St. 206; Rosson V. Carroll, 90 Tenn. 90 (16 S. W. 66). 1 Wright V. Shawcross, 2 B. & Aid. 501; Haynes v. Birk?, 3 Bos. & P. 699; Shepard v. Hall, 1 Conn. 329; Martin v. lugersoll, 8 Pick. 1; Farmers' Bank of Bridgeport v. Vail, 21 N. Y. 485; Sylvester u. Crohan, 138 N. Y. 494 (34 N. E. 273); Friend v. Williamson, 9 Gratt. 31; Com- mercial Bank v. Barksdale, 36 Mo. 263; Deblieux v. Bullard, 1 Rob. 66 (36 Am. Dec. 684). 2 Bank of United States v. Corcoran, 2 Pet. 121 ; Shelburne N. Bank V. Townsley, 102 Mass. 177 (3 Am. Rep. 445); Cayuga Co. Bk. v. Ben- nett, 5 Hill, 236; Dicken v. Hall, 87 Pa. St. 379; Cornett u. Hafer, 43 Kan. 60 (22 P. 1015); Carolina N. Bk. v. Wallace, 13 S. C. 347 (36 Am. Rep. 694); Moreland's Assignee v. Citizens' N. B. (Ky.), 30 S. W. 637; Gilchrist u. Donnell, 53 Mo. 591; Hendershot v. Neb. N. Bk., 25 Neb. 127 (41 N. W. 133). ^ Williams v. Bank of U. S., 2 Pet. 96; Bowling v. Harrison, 6 How. (Miss.) 248; Pcabody Ins. Co. v. Wilson, 29 W. Va. 528 (2 So. 888); Cabot Bk. v, Warner, 10 Allen, 522; Brown v. Bk. of Abingdon, 85 Va. 363 § 136 NOTICE OF DISHONOR. [CH. XII, But this rule, which was once a universal requirement, now gives way, whenever a clearly established custom for notices to be sent by mail is proven.^ And, wherever the postal authorities provide for the general delivery of mail by carriers at the places of business or residences of the persons to whom they are addressed, it is generally held that the mail is the proper medium for the transmission of notices of dishonor, for the obvious reason that delivery by letter carrier is just as much a personal service of the notice, as if it had been delivered by a special messenger. This ruling has been confirmed by statute in some of the States. But, in case of delivery of notices by mail in the same place, it must be deposited in the post office, early enough to be delivered on the day on which the party was entitled to receive notice. ^ § 13(5. Personal notice, how and where served. — Where personal notice of service is required, whether it is delivered by a special messenger or by a letter carrier, the notice must be sent to the place of business or residence of the party to be notified. And if the person cannot be found at one place, it is not necessary to seek him at the other, in order to deliver the notice to him in person. It may be left with the person found to be in charge of the place of business or residence; or if no one can be found, it would be sufficient to shove it under the door, or to put 95 (7 S. E. 357); Isbell y. Lewis, 98 Ala. 550 (13 So. 335); Vance v. Col- lin?, 6 Cal. 435; Bank of Commerce v. Chambers, 14 Mo. App. 152; Swayze v. Britton, 17 Kan, G25; Thompson & Walkup Co. v. Appleby (Kan. App. '97), 48 P. 933. 1 Bowling V. Harrison, 6 How. (Miss.) 248; Lime Rock Bank?;, Hewett, 52 Me. 51; Chicopee Bk. v. Eager, 9 Met. 583; Grinraan v. Walker, 9 Iowa, 426; Carolina N. B. v. Wallace, 13 S. C. 347 (36 Am. Rep. 694). 2 Dobree v. Eastwood, 3 C. & P. 250; Eagle Bk. v. Hathaway, 5 Met. 212; Phelps V. Stocking, 21 Neb. 343; 32 N, W, 217 (good, if received the next day); Shoemaker v. Mechanics' Bk., .59 Pa. St. 79, 83 (98 Am. Dec. 315); Brennan v. Vogt, 97 Ala. 047 (11 So. 893); Walters v. Brown, 15 Md. 295 (74 Am. Dec. 5G6) ; Benedict v. Schmieg, 13 Wash. 476; 43 P. 374 (street address inquired in such cases) . 364 CH. XII. 1 NOTICK OF DISHONOR. § 13G it in the keyhole, or on a desk or table. ^ But, in order that a notice may be sufficient, when left at the party's place of business, it must be his permanent and general place of business, and not some temporary place of resort for the transaction of some special or particular business, or a place where he attends only to business of a non- financial character.'^ If he has two permanent places of business in the same city, the notice may be sent to either, unless it is known that he attends to all his banking business at one particular place. ^ And where one resides at a hotel or boarding house, that is his legal residence. But if the notice is not deliv- ered to the party notified in person, it should be delivered to a clerk or the proprietor, or left in the room occupied by such party ; although it seems that, in the case of a private boarding house, it will be sufficient, if left at the house with any person of yeais of discretion/ In all these cases, the party to be notified should first be inquired for, before a delivery to any one else will consti- tute a sufficient notification.'' It is presumable that notice of dishonor may be served by telephone, but to be sufficient, one must be sure that the right party receives the communication.^ 1 Bk. of Columbia v. Lawrence, 1 Pet. 578; Hobbs u. Straine, 149 Mass. 212 (21 N. E. 3C5) ; Van Vechten v. Pruyn, 13 N. Y. 540; Novins V. Bank of Lansiugburj^h, 10 Mich. 547; Isbell v. Lewis, 98 Ala. 550 (13 So. 335) ; Grinman v. Walker, 9 Iowa, 426 ; Sanderson v. Reinstadler, 31 Mo. 483; Fourth N. B. v. Altheimer, 91 Mo. 190 (3 S. W. 858) ; Stewart V. Eden, 2 Caines, 121 (2 Am. Dec. 222). 2 Bk. of Columbia v. Lawrence, 1 Pet. 578; Bank of United States v. Corcoran, 2 Pet. 121; Lamkin v. Edgerly, 151 Mass. 348 (24 N. E. 49); Kleinman v. Boernstcin, 32 Mo. 311; People v. N. R. Bk., (i2 Hun, 484. 3 Commercial Bk. of Albany v. Strong, 28 Vt. 3U; (07 Am. Dec. 714); Pliillips v. Aldersoii, 5 Humph. 402. * Bank of United States v. Hatch, G Pet. 250; McMurlric v. Jones, 3 Wash. C. C. 200; Howe v. Bradley, 19 Me. 31; Bauk of West Tennessee V. Davis, 5 Heisk. 430; Ashley v. Gunton, 15 Ark. 415; Miles v. Hall, 12 Smed. & M. 332. See Bailey v. Bank of Missouri, 17 Mo. 407. ^ Ashley v. Gunton, 15 Ark. 415. 6 Thompson & Walkup Co. v. Appleby (Kan. App. '97), 48 P. 933. 3G5 § 137 NOTICE OF DISHONOR. [CH. XII. § 137. Manner of serving notice on persons residing elsewhere. — When the parties to be notified reside else- where than at the phice of presentment or protest, or the residence of the party notifying, the law invariably per- mits service by mail. If the party notifying deposits the notice in the post office, properly addressed to the right party, the holder or other party sending the notice has done everything required of him, and he can hold the party so notified liable on the bill or note, even though the notice should be lost in the mail.^ The notice will in such a case be insufficient if it can be proven that there had been a mis- take in the address, due to the negligence of the party sending the notice.^ But the law docs not absolutely require that notices be sent by mail in such cases. Other means of communication may be resorted to, the telephone, the telegraph, or a special messenger. But where such unusual means of communication are employed, to hold the drawer or indor- ser liable, the notice must be delivered within the time, that it would have been delivered, if it had been sent by mail.^ If the party to be notified does not reside in the same place where he transacts his business, it would seem proper and necessary for the notice to be mailed to him at his place of business, unless it is known that he receives 1 Lindenberger v. Beall, 6 Wheat. 104; Shelburne Falls N. B. v. Townsley, 102 Mass. 177 (3 Am. Rep. 445); Swampscolt Mach. Co. v. Rice, 159 Mass. 404 (34 N. E. 520); United States Nat. Bank t?. Burton, 58 Vt. 426; Miller v. Hackley, 5 Johns. 375 (4 Am. Dec. 372) ; Wilson v. Richards, 22 Minn. 337. Deposit in a street letter-box is a deposit in the post office. Casco N. Bk. v. Shaw, 79 Me. 376 (10 A. 67) ; Wood v. Callaghan, 61 Mich. 402 (28 N. W. 162); Johnson v. Brown, 154 Mass. 105 (27 N. E. 994.) See contra, Townsend v. Auld, 31 N. Y. S. 29; 10 Misc. 343. 2 Bacon v. Hanna, 137 N. Y. 379 (33 N. E. 303) ; Sylvester v. Crohan, 63 Hun, 509; s. c. 138 N. Y. 494 (34 N. E. 273) ; Hart v. McLtllan, 80 Me. 95 (13 A. 272). 3 Bk. of Columbia v. Lawrence, 1 Pet. 578; Van Vechten v. Pruyn, 13 N. Y. 549; Cassidy v. Creamer (Pa.), 13 A. 744; Dobree v. Eastwood, 3 C. & P. 250; Minehart v. Ilandlin, 37 Ark, 276; Jarvis v. St. Croix Mfg. Co., 23 Me. 287; Drexler v. McGlynn, 99 Cal. 143 (33 P. 773). 3(36 CH. XII.] NOTICE OF DISHONOR. § 137 his mail at his residence ; or unless he resides in the place where the bill or note is payable, and to be presented or protested. In these latter cases the notice should be sent to the residence.^ If there is no i)ost office at the place, where the party to be notified has his residence, or transacts his business, the notice should be sent to the nearest post office, unless it is known that he customarily receives his mail at some other office, when it should be sent to him there. ^ On the other hand, it is sufficient to address a notice generally to the city or town, in which the party resides or transacts his business, even though there be one or more branch po>t offices, or there is a postal delivery ; unless it is known, that the party is in the habit of receiving his mail at a particular branch of the post-office, or what his street address is. If these facts are known, the party notifying should add these particulars to the address, in order to preserve the liability of the drawer or indorser notified.'^ In all cases of transmission of notices by mail in the United States, the name of the State, as well as of the town, is required.* Where the drawer or indorser gives a particular ad- dress, — as ho has a right to do, and which he is presumed to have done, when he subscribes an address to his signa- ture, — to which notices and other communications should be sent, no notice will he sufficient to charge him with 1 "Williams v. Banli of U. S., 2 Pet. 96; Montgomery Co. Bank v. Marsh, 7 N. Y. 481; Van Vechtan v. Pruyn, 13 N. Y. 549; Webber v. Gotthold, 28 N. Y. S. 703 (8 Misc. 50.^); "Wolfe v. Jewett, 10 La. 383. 2 Bk. of Columbia v. Lawrence, 1 Pt. 578; Spaulding v. Krutz, 1 Dill, C. C. 414; Bank of Geneva v. Ilowlett, 4 Wend. 328; Sanderson v. Reinstadler, 31 Mo. 4811; Jones v. Lewis, 8 Watts. & S. 14. See Citizens N. Bk. V. Cade, 73 Mich. 449 (41 N. W. 500). 3 Saco N. B. V. Sanborn, r,3 Me. 310 (18 Am. Rep. 224) ; True v. Collins, 3 xVllen, 438; Burlingame v. Foster, 128 Mass. 125; Morse v. Chamberlain, 144 Mass. 40G (11 N. E. 5G0) ; Downer v. Reraer, 21 "Wend. 10; s. c. 23 Wend. f)20; Am. N. B. u. Junk, etc., Mfg. Co., 94 Tenn. G24 (30 S. W. 753). < Beckwith v. Smith, 22 Me. 125 (38 Am. Dec. 290). 367 § 138 NOTICE OF DISHONOR. [CH. XII. liability on the bill or note, if it is not sent to the given address.^ The holder has a right to presume that the address of the drawer or indorser has not been changed since the negotia- tion or transfer of the paper; but if he should know of such a change, he must send the notice to the new address, and a notice sent under such circumstances to the old address will not be sufficient. ^ § 138. What is meant by "residing in the same place." — The importance of determining whether one resides in the same place, arises only when the sufficiency of a notice by mail is inquired into. It does not depend so much upon the fact that the parties reside within or with- out the corporate limits of the same town, as whether they get their mail out of the same or different post-offices. If the parties get their mail out of different branches of the post office, as where there arc branches of the post office in the same corporate city or town, the parties are held for the present purposes to reside in different places; and a notice of dishonor sent by mail will preserve the contingent liability of the drawer or indorser so notified.-^ But if the parties resort to the same post office for their mail, it is held that for the purpose of sendiug notices of dishonor they must be considered as residing in the same place, even though the party to be notified resides outside of the corporate limits; and notice must be served person- ally, unless permitted by local custom or statute.* But 1 Hodges V. Gait, 8 Pick. 2,51; Bartlett v. Robinson, 39 N. Y. 187; Dicken v. Hall, 87 Pa. St. 379; Paterson Bank v. Butler, 7 Halst. (H N. J. L.) 268; Bk. of Columbia v. Magruder, 6 Har. & J. 172 (14 Am. Dec. 271); Carter v. Union Bk., 7 Humph. 548 (46 Am. Dec. 89); Peters v. Hobbs, 25 Ark. 67 (91 Am. Dec. 526); Tyson v. Oliver, 43 Ala. 455. 2 Saco N. B. V. Sanborn, 63 Me. 340 (18 Am. Rep. 224) ; Requa v. Col- lins, 51 N. y. 144; First N. B. v. Wood, 51 Vt. 473 (31 Am. Rep. 692); Knott V. Venable. 42 Ala. 186; Dunlap v. Thomson, 5 Yerg. 67; Davis r. Eppler, 38 Kan. 629 (16 P. 793). 3 Shaylor ?;. Mix,4 Alleu,35l;Patonu.Lent,4 Duer, 231 ; Gist u.Lybrand, 3 Ohio, 307 (17 Am. Dec. 595); Bell v. Hagerstown Bk., 7 Gill. 216. * Shelburne Falls N. B. v. Townsley, 102 Mass. 177 (3 Am. Rep. 445); 368 CH. XII.] NOTICE or DISHONOR. § 139 still the authorities are not uniform. There are many cases, which hold that notice by mail will be sufficient where the party notified lives outside of the corporate limits of the place of presentment and protest, if there is no local post office and the party gets his mail through the post office at such place of protest. It seems that the right decision depends upon the degree of inconvenience in the employ- ment of a special messenger to make personal service of the notice.^ § 139. Form and requisites of the notice of dis- honor. — Mere knowledge of dishonor does not take the place of, or amount to notice. Notice consists of the communication of the fact of dishonor by the person whose duty it is to give notice. Where, therefore, this commu- nication has not been made by the proper party and in the proper way, as has been explained in the sections of this chapter, the drawer or indorser is discharged from all liability, even though he has learned in some other way of the fact of dishonor within the required time.^ But it is not necessary that the notice be written ; it may be verbal. And it seems that the notice, when verbal, may be of the most informal and meager character, and yet be sufficient, unless the party notified asks for a more explicit notice, and the additional information is refused.^ Wherever, however, the notice is written, since the party Ireland v. Kip, 10 Johus. 490; s. c. 11 Johns. 231; Brown r. Bk. of Abingdon, 85 Va. 95 (7 S. E. 357) ; Farmers', etc., Bank v. Battle, 4 Humph. 85; Forbes v. Omaha N. B., 10 Neb. 338 (G N. W. 393). J Bank of Columbia v. Lawrence, 1 Pet. 578; Bk. of U. S. v. Norwood, 1 Ilarr. & J. 423; Timms v. Delisle, 5 Blachf. 447; Barrett v. Evans, 28 Mo. 331; Newberry v. Trowbridge, 4 Mich. 391; s. c. 13 Midi. 2G3. 2 Juniata Bk. v. Hale, IG Serg. & R. 1&7 (IG Am. Dec. 558) ; Burgh v. Legge, 5 M. & W. 418; Bk. of Old Dominion v. McVeigh, 29 Gratt. 64G Lane v. Bank of West Tcnnessei-, 9 Ileisk. 419. 3 Gilberts. Dennis, 3 Met. 496; Metcalfe v. Richardson, 11 C. B. 1011, Cuyler v. Stevens, 4 Wend. 5GG; Hirschfelder v. Loccy &c. Mfg. Co., 17 N. Y. S. 72G; Glasgow v. Pratte, 8 Mo. 33G (40 Am. Dec. 142); Martin v Brown, 75 Ala. 4t2; First N. Bk. v. Ryerson, 23 Iowa, 608; Pierce v Schaden, 55 Cal. 406. See Citizens N. Bk. v. Cade, 73 Mich. 449 (41 N. W 500). 24 3r)H § 139 NOTICE OF DISHONOR. [CH. XII. notified has not the same opportunity to ask for additional information, as when the notice is verbal and personal; in order that the written notice may be sufficient, it must contain statements of every fact, which is necessary, in order to prove the liability of the party notified on the dishonored bill. 1. The notice must contain a description of the bill or note sufficient to enable the party notified to identify the paper, which has been dishonored. The description, when properly made, should give the date of the paper; should state by whom executed, payable to whom, for what amount, when due, by whom indorsed, and in the case of a bill, on whom it is drawn. And if it is payable at a particular place, the place of payment should be set forth. When these ordinary elements of a bill or note are accur- ately described in the notice, the holder or other party giving the notice has fully complied with the requirements of the law ; and he does not lose his remedy against a drawer or indorser, because the description corresponds to and includes two or more bills or notes, having other unusual points of differentiation.^ But ill order that the ]:)arty notified may in any case take advantage of any defect or insufficiency of the description, and claim for that reason a discharge from liability on a bill or note, he must be able to show that he has been actually misled by the omissions or misstatements of the notice. 2 2. The notice should also show that the paper has been 1 Mills V. Bk. of U. S., 11 Wheat. 431; Legg v. Vmal, 165 Mass. 555 (43 N. E. 518); Gill v. Palmer, 29 Conn. 54; Ilodgts v. Schuler, 22 N. Y. 115; Dodsou v. Taylor, 56 N. J. L. 11 (28 A. 31C) ; Glicksman v. Earley, 78 Wis. 223 (47 N. W. 272") ; Brown v. Jones, 125 Ind. 375 (25 N. E. 452) ; Klochenbaura v. Pierson, 16 Cal. 375; Townsend v. Herr, 85 Mo. 5C3. - Dennistoun v. Stewart, 17 How. 606; Bank of Alexandria v. Swan, Pet. 33; King v. Hurley, 85 Me. 525 (27 A. 463); Smith v. Whiting, 12 Mass. 6 (7 Am. Dec. 25); Youngs v. Lee, 12 N. Y. 55; Gates v. Beecher, 60 N. Y. 518 (19 Am. Rep. 207) ; Gill v. Palmer, 29 Conn. 54; Rowland v. Adrain, 29 N. J. L. (I Vroom) 41 ; Tobey v. Lennig, 14 Pa. St. 483; Snow V. Perkins, 2 Mich. 238; Johnson v. Cocks, 7 Eng. (Ark.) 672; McCune v. Belt, 38 Mo. 281. 370 en. XII.] NOTICE OF DISHONOR. $ 140 dishonored, ^. e., that it has been presented for payment, payment demanded, and refused. All these facts should be stated, in order to show a case of dishonor.^ But it has been held that, if the notice states that the bill or note has been " dishonored," or *' protested," no fur- ther statement is required.^ 3. It is held that the notice should also contain the state- ment that the holder or other party giving the notice looks for payment to the party notified.-^ But it is now very generally held that this is not necessary, inasmuch as the giving of notice is of itself sufficient intimation of the in- tentions in this respect of the party giving the notice.* It has been held that there will be sufficient notification, if copies of the bill or note and of the protest are sent to the party to be notified.^ On the other hand, it has been held that an unsigned notice is not sufficient.^ § 140. Allegation and proof of notice. — In an action on a bill or note against a drawer or indorser, the burden is on the plaintiff to prove that the drawer or indorser has been <1uly notified. Whore there has been personal service, the fact that the defendant has received the notice can in most cases be proven by the plaintiff. And so, also, is it 1 Musson V. Lake, 4 How. 2(32; Clark v Eldridge, 13 Met. 9G; Page v, Gilbert, 60 Me. 485; Salomon v. Pfeister, &c. Co. (N. J. L.), 31 A. G02. See Wallace v. Crilley, 46 Wis. 577. And see Cromer v. Piatt, 37 Mich. 132 (26 Am. Rep. 503), where the rule of the text is held to be too severe. 2 Hartley v. Case, 4 B. & C. 339; Mills v. Bk. of U. S., 11 Wheat. 431 ; Ilousatonic Bk. v. Laflin, 5 Cush. 546; Kilgore v. Buckley, 14 Conn. 362; Youngs V. Lee, 12 N. Y. 55; Stf'phenson v. Dickson, 24 Pa. St. 148 (62 Am. Dec. 362) ; Burkam v. Trowbridge, 9 Mich. 209; Reynolds ?'. Apple- man, 41 Md. 615; Eastman v. Furman, 24 Cal. 379. 3 See Davis ». Burt, 7 Iowa, 56; East v. Smith, 4 D. & L. 744; Solarto V. Palmer, 7 Bing. 530; s. c. 1 Bing. N. C. 194. * Bk. of U. S. V. Carneal, 2 Pet. 542; Ch.ard v. Fox, 14 Q. B. 200; Bur- gess V. Vreeland, 23 N. J. L, (4 Zab.) 71 (59 Am. Dec. 408); Clark v. Eldridg'', 13 Mot. 96; Cowles v. Harts, 3Conn. 516; Graham r. Sangston, 1 Mil. ."9; Townsend v. Lorain Bk., 2 Ohio St. 345; Bk. of Capo Fear v. R.-awoll, 2 Hawks. 560. 5 Nelson V. First N. B., C'.) Fed. 798; 16 C. C. A. 425. « Peoi.le's N. Bk. r. l)il)rell, 91 Tonn. ;?01 (18 S. W. (\2C,). 37] © ILL. CAS. NOTICE OF DISHONOR. [CH. XII. possible for him to prove the receipt of notice, when sent by mail, where the defendant has made some acknowledg- ment of its receipt. But in the case of transmission of notices by mail, it is not necessary for the plaintiff to prove the actual receipt of the notice by the defendant. The plaintiff makes out a prima facie proof of the receipt of the notice, when he proves that a notice properly addressed to the defendant was deposited in the mail. He is not required to establish the fact that the notice has been received by the defendant.^ But where the indorser or drawer, who is sued, proves that he never receives the notice, it is sometimes held that evidence in support of the allegation of due notice must be more certain and specific as to the fact of proper mailins.^ ILLUSTRATIVE CASES. Lamkin v. Edgerly, 151 Mass. 348 (24 N. E. 49). City Nat. Bank of Dayton v. Clinton Co. Nat. Bank, 49 Ohio St. 351 (30 N. E 958). Drexler «. McGlynn, 99 Cal. 143 f33 P. 773). What Is a Sufficient Address in Sending Notice of Dishonor? Lamkin v. Edgerly, 151 Mass. 348 (24 N. E. 49). Exceptions from superior court, Suffolk county ; Robert R. Bishop, Judofe. An action by Guy Lamkin against C. E. Edgerly and Edward N. Pickering to recover on a promissory note. The only issue was whether defendant Pickering, the first indorser on the note, i Swampscott Mach. Co. v. Rice, 159 Mass. 404 (34 N. E. 520); Done- gan V. Wood, 49 Ala. 242 (20 Am. Rep. 275) ; Gawtry v. Doanc, 51 N. Y. 84; New Haven Co.Bk. v. Mitchell, 15 Conn. 206; Marks w. Boone, 24 Fla. 177 (4 So. 532); Walker v. Stetson, 14 Ohio St. 89 (84 Am. Dec. 302); Martin v. Smith (Mich.), G6 N. W. 61; Tobey v. Berley, 26 111. 426. As to the effect of statement in certificate of protest of service of notice, see ante, § 129. 2 Townsend v. Auld, 31 N. Y. S. 19 ; 24 Civ. Proc. 181 ; Apple v. Lesser, 93 Ga. 749 (21 S. E. 171) ; Germ. Secur. Bk. v. McGarry, 106 Ala. 663 (17 So. 704) ; Manchester v. Van Brunt, 22 N. Y. S. 362. 372 CH. XII ] NOTICE OF DISHONOR. ILL. CAS. received due notice of non-payment. The court found tliat he did, and he excepts to the finding. Pub. St, Mass. c. 77, § 16, provides that notice of non-payment of a promissorry note may be given to a party who is entitled to such notice by depositing in the post office addressed to the residence or " place of business " of siicli ])arty. Adams & Blinn, for plaintiff. C. S. Lincoln and C. P. Lin- coln for defendant Pickering. Knowltox, J. If the room to which the notice was directed was the i)lace of business of the defendant Pickering on Novem- ber 8, 1888, there can be no doubt that the notice was sufficient. Pub. St. c. 77, § IG ; Hobbs v. Straine, 149 Mass. 212 ; 21 N. E. Rep. 3G5; Bank v. Faiibrother, 14S Mass. 181; 19 N. E. Rep. 345 ; Bank of America v. Shaw, 142 Mass. 290 ; N. E. Rep. 779 ; Importers' & Traders' Nat. Bank o. Shaw, 144 Mass. 421 ; 11 N. E. Rep. 666. The judge found that it was his place of business, and the question presented by the bill of exceptions is whether there was evidence to warrant the finding. The room was at No. 68 Devonshire street, Boston ; and at that time the defendant's name was on the door-post at the street, and on the glass panel in the door of the room. An inquiry for him of a person iu the room was answered by a statement that he was not in. The superintendent of the building testified that he was a tenant there the first part of November, 1888, and had been for a year or two, and that he remained there and had goods there until the 12th da}^ of November or later, and paid rent for his office up to that date. The janitor of the building gave similar testimony, and said that he saw the defendant in his office twice in November of that year, and that his mail was left there, as usual, up to the loth of No- vember. Although there was other evidence which tended to show that he spent but little time there, the judge, on the whole, was warranted in finding that the room had not ceased to be his place of business when the notice was given, on November 8th. Exceptions overruled. All Tndorsers N^eert Not be Notified of Dishonor — Tjia- bility of Collecting- Bunk for Failure to Send Out Notices. City Nat. Bank of Dayton v. Clinton Co. Nat. Bank, 49 Ohio St. Zr>l (30 N. E. 958). (Syllabus by the court.) Error to circuit court, Clinton county. The plaintiff in error, the City National Bank of Daj'ton, on the 3d day of December, A. D. 1888, filed in the court of com- mon pleas of Clinton county a petition, wherein, after averring the corporate character of the plaintiff and defendant, it sets forth as the grounds for the relief which it sought against the defendant in error, the Clinton County Bank, that in the due 373 ILL. CAS. NOTICE OF DISHONOR. [ciI. XII. course of its business it purchased, before due, of S. J. Patter- son, the payee thereof, a certain promissory note, which was pay- able at the banking house of the defendant in error ; that said S. J. Patterson indorsed the same ; that after said purchase, and before the note became due, tbe plaintiff in error forwarded it to the defendant in error for collection ; that defendant in error undertook to collect the same, or, if not collected, to take such steps as were necessary to fix the liability of the indorser ; that the note was not paid when due ; that the defendant in error did not protest the same so as to fix the liability of the indorser; that the makers were insolvent, and praying damages for the amount of the note with interest. The defendant in error answered the petition, denying that the note was purchased by the plaintiff in error in the due course of its business, but, on the contrary, alleging that the plaintiff in error was merely the agent of the indorser, S. J. Patterson, for its collection. It also set up as a defense: "That if, in fact, said plaintiff, in the due course of its business, did purchase from the payee, and become, before due, the owner and holder of said note, the said S. J. Patterson, as an indorser thereof, has not been released and dis- charged from his liability to the plaintiff as such indorser for the following reasons of fact: "First. This defendant duly pre- sented to and made demand for payment of said rote by the makers, Fulton & Peters, of all which said p'aintiff and said indorser, S. J. Patterson, had due notice; and on said pnsenta- tion and demand this defendant made arrangement for llie pay- ment of said note, and the same would have been paid but for the reasons hereinafter stated. Second. Said S. J. Patterson, after receiving notice that said note had been duly presented to said makers, Fulton & Peters, and demand of payment duly made by this defendant, assumed to and did extend the time of payment thereof for a fixed and definite time, to wit, to October 25, 1887. Said indorser, S. J. Patterson, thereby waived formal protest and notice by a notary public, all of wliich said plaintiff then well knew. Third. After the assignment of said makers, Fulton & Peters, the said indorser, S. J. Patterson, admitted to this defendant his liability on said note, and made no claim of release by reason of any negligence on the part of this defendant in not formally protesting said note by and through a notaiy public. This defendant denies that it has been guilty of any negligence whatever, and, on the contrary, avers that it used due dili- gence for the collection of said note, and that the same would iiave been collected but for the reasons hereinbefore stated." The aflSimative matters of the answer were denied by the reply. The cause was tried to the court without tlie intervention of a jury, and a judgment rendered for the defendant in error. The evidence, and the rulings of the court in admitting and rejecting evidence, were embodied in a bill of exceptions. The cause was taken to the circuit court by the plaintiff in error, where tlie judg- ment of tlie court of common pleas was affirmed, whereupon pro- 374 CH. XII.] NOTICK OF DISHONOR. ILL. CAS. ceedings were institute 1 in this court to obtain u reversal of both of said judgments. Reversed. Guuckel & Rowe and Mills & Van Pelt, for jJainliff in error. SniiLh & Savage, for defendant in error. BuADBL'UY, J. Tlieie is no conflict in the evidence relating to any material fact in this case. The petition avers that the plaintiff in error had purchased the note which is the sul)ject of controversy between the parties hereto in due course of business before it becmne due. This, it is tiue, the answer of the defend- ant in error denies, but tlie cashier of tlie plaintiff in eiror, G. B. Harman, states directly and unequivocally in his deposition that his bank purchased the paper of the payee, S. J. Patterson, on August 20, 1888, five days after its date, at a discount of 7 per cent.; that the discount amounted to $5.07 — -all whicli he says is shown by the books of the bank. Mr. Eichel- berger, bookkeeper for Mr. Patterson, is equally explicit. No attempt is made, by the cross-examination or otherwise, to cast a suspicion upon or to discredit these two witnesses, or impeach the correctness of the books of the bank; nor is any evidence adduced that in the slightest degree contradicts their statements. Under these circumstances, it cannot be presumed, even to sup- port the judgment rendered, that the court of common pleas found th s evidence to be false, and totally disregarded it in making up its judgment. The real contention between the parlies w:is whether Patterson, the indorser of the promissor}' note, had been discharge d from liability to the plaintiff in error by reason of the negligence of the defendant in error. The note had been transmitted to de- fendant in error for collection, and was not paid at maturity. If defendant in error, by its negligence, haddiscliargcd the indorser, then it should be held liable for the damages it thereby caused ; but if, notwithstanding this alleged negligence, Patterson re- mained lialile, it should be exonerated, for all the duty it owed to the plaintiff in error in case the note was not paid was to take such action as would charge the indorser. When the note ma- tured, the defendant in error notified the makers, and one of thi'm came to its banking house. A plain and simple duty then confronted the defendant in error,— either to require payment of the note, or, in default thereof, to take such action as, by the law merchant, was necessary to charge the indorser. It did neither. That the note was conditionally paid, is suggested. What that may mean in this connection is not clear. No doubt that, as between the holder and the maker of a promissory note, a conditional pay- ment may be made ; but the rules of the commercial law require a holder, who intends to hold an indorser liable, to give notice to the latter of the default of the maker. Anything le>s than a full and alisolute payment is a default, for nothing less than that measures the duty of the maker. In this case, however, there was no conditiomd pa3'ment made. True, the defendant in error had in its hands the means of enforcing payment, Vmt did nothing. 375 ILL. CAS. NOTICE OF DISHONOR. [CH. XII. It simply accepted tbe maker's promise that, if Patterson did not give further time, they would pay the note. If the defendant in error had given notice to the plaintiff in error of the default of the maker, it would have discharged its duty, for it would have afforded the latter an opportunity to give uoiice to Patter- son. Lawson v. Bank, 1 Ohio St. 206. It is true that the defendant in error could have passed by the plaintiff in error, and given notice of the maker's default directly to the indorser, Patterson, and thus fixed the latter' s liability. This the defend- ant in error also failed to do. It is suggested that this failure was on account of ignorance of the residence or address of Pat- terson. If this was true, it constitutes no excuse for (1) the defendant in error, in that contingency, not being able to dis- charge its duty in any other way than by a notice to the plaintiff in error, was bound the more strongly to notify the latter ; and (2) the means of knowledge were at hand. Fulton, one of the makers of the note, was at the bank, and announced his in- tention to write to Patterson to obtain an extension of the time of payment. It was apparent from the conversation that he had with the officers of defendant in error that he knew Patterson's address, and an inquiry of him would have enlightened those officers; but the inquiry was not made. The makers of the note, Fulton & Peters, in fact wrote to Patterson for an exten- sion in the following terms : " Wilmington, O., October 19, 1887. Mr. S. J. Patterson, Dayton, O. — Dear Sir: We wish you would advise the Clinton County Bank to hold our note until November 5th, or, if you cannot do that, anyhow until the 25th inst. We cannot possibly meet it until at least that time ; and obhge, yours, Fulton & Peters." This is the only notice that Patterson received. Whether a notice of the non-payment of a promissory note, given by the maker to the indorser, is sufficient to fix the liability of the latter, has not been determined by this court. The authorities upon the question are in conflict. The cases of John- son V. Harth, 1 Bailey, 482 ; Rosher v. Kieran, 4 Camp. 87; and Chitty on Bills, p. 495, note m, with some other authorities, seem to support the doctrine of the sufliciency of such notice, while the following cases deny it: Stanton v. Blossom, 14 Mass. 116; Tindal v. Brown, 1 Term R. 167, per Willes' opinion, 169, and Buller, J., 170; Stewart v. Kennett, 2 Camp. 177. Nor is the determination of this question necessary now, for, if a notice given by the maker to an indorser should be held sufficient to charge the latter, yet this letter of the maker is faulty in that it neither states that any demand of payment had been made, that the note had been forwarded to and was at the place of payment, or that it was due. If the court should go to the extent of holding that the indorser is bound to carry in his memory the due date of a note that he indorses, and must pre- sume that its payment has been demanded at the proper time and place, all which is necessary to make this letter sufficient notice, was due diligence shown in giving the notice? The last day of 376 CH. XII.] NOTICE OF DISHONOR. ILL. CAS. grace was October 17th, and the letter was not written until the 19th, two clays later. To constitute due diligence it should have been deposited in the post office in time to have departed in the earliest mail to the residence of Patterson that departed after business hours on the 18th. Lawson v. Bank, 1 Ohio St. 206. It is true that, if the defendant in error had chosen to give notice of nonpayment to the plaintiff in error, the plaintiff in error would have had one day after it received notice within which to give notice to Patterson, and in that case a notice given to the plaintiff in error to Patterson on the 19th of October would have been in time. 1 Pars. Notes & B. 613; Lawson v. Bank, 1 Ohio St. 206. Where, however, a holder of a promissory note passes by an immediate indorser, and serves notice of nonpay- ment upon one more remote, he cannot avail himself of the time the immediate indorser would have had to serve the remote one, if the holder had given notice to the former, but the holder in that case must give notice to the remote indorser within the same time that he is required to give it to the immediate indorser. 1 Pars. Notes & B. 514 ; Dobree v. Eastwood, 8 Car. & P. 250 ; Simpson v. Turnev, 5 Humph. 419; Rowe ^?. Tipper, 13 C. B. 249; Marsh v. Maxwell, 2 Camp. 210, note. Therefore, if the letter of Fulton & Peters had been sufficient in form and sub- stance to fix the liability of Patterson, it was mailed too late, and for tliat reason he was discharged. This release of Patterson was an accomplished fact before the makers of the note applied to him to extend the time of payment. The omission of the bank to require payment, or, in default thereof, to give the necessary notice to charge Patterson, was caused by the solicitations of the makers, Fulton & Peters. The most careful scrutiny of the records fails to disclose that Patter- son, up to this time, said or did anything to mislead the bank, or to induce it to relax its vigilance, or to omit any step necessary in law to charge him as indorser. Patterson therefore had a per- fect defense against any action to charge him as an indorser, unless, by his subsequent conduct, he has forfeited his right to set up tills discharge. A subsequent promise to pay, when made with full knowledge of the facts, has been held to be evidence of a demand and notice, or to imply a previous waiver thereof. Myers v. Standart, 11 Ohio St. 29; Hib- hard v. Russell, 16 N. H. 410; Robbins v. Pinckard, 5 Sniedes & M. 51 ; Lewis v. Brehme, 33 Md. 412; McPhetres v. Halley's Ex'r, 32 Me. 72; Mense v. Osbern, 5 Mo. 544; Loose V Loose, 36 Pa. St. 538; Killby v. Rochussen, 18 C. B. (n. c.) 357. In the case under consideration, however, no promise to pay was made by Patterson, unless the following letter, written by him to Fulton & Peters in reply to theirs of the 19ih of Octo- ber, asking for an extension of tlie time of payment, can be con- strued into such promise: "Dayton, O., October 20, 1887. Messrs. Fulton «& Peters, Wilmington, Ohio — Gentlemen: " Yours of 19th at hand, and we have instructed our bank (to 377 ILL. CAS. NOTICE OF DISHONOR. [CH. XII. whom the note belongs, we having discounted same) to grant extension to October 25th. Please honor it at that time, and much oblige, yours truly, S. J. Patterson." If this letter should be construed to contain an implied promise to pay the note, yet, as it was written without any knowledge on the part of the writer that he had been discharged from liability, it does not fall within the principles upon which a subsequent promise to pay has been held to bind an indorser. Tebbetts v. Dowd, 23 Wend. 379. Is Patterson estopped to set up his discharge by reason of his letter of the 20th of October, 1888, granting an extension to the makers of the note? On October 17, 1888, tlie day the note matured, one of the makers, Fulton, was called into the bank and his attention directed to it. The makers then had funds in the bank which could have been applied to its payment, but upon Mr. Fulton's representation that his firm was pressed for means it was induced to indulge them until they could apply to Patterson for a short extension of the time of payment, promising to pay it if Patterson refused to extend the time. After two days' delay they wrote the letter of October 19th, to which they received, in answer, Patterson's let- ter of the 20th, granting the favor, of which the bank was at once advised. It thereupon continued to receive and ))ay out for the makers larcre sums of money, until November 1, 1888, on which day the makers assigned their property in trust for their creditors, having assets sufficient to pay only a few cents on the dollar of their indebtedness. No doubt, but for this letter of Patterson's, the bank would have charged this note against the makers' de- posits, and in that way secured its payment. If Patterson had Ijeen informed of these facts, and chose to grant an extension to the makers, and the bank, relying thereon, had paid out all the funds of the makeis before the assignment was made, and thus lost its means of indemnity, he should be held to abide the conse- quences. But he had no such knowledge. He neither knew that he had been discharged by the bank's neglect, nor that the bank had indemnity within its control. His granting the exten- sion was an innocent act in itself, and he should not be charged with consequences that he had no reason to suspect would flow from it. On the contrary, the bank, defendant in error, was an actor in the entire transaction. With means of payment in its hands, it cho?e to indulge the makers in direct violation of its duty to the plaintiff in error. It knew this indulgence was granted to the makers of the note expressly to enable them to apply for an extension of payment to one who, upon the face of the paper, was only liable in case it did the very duty that it must of necessity violate to grant the indulgence; and when the letter from Patterson was made known to it, and it proceeded to act upon the extension granted, it had no reason to believe that he had granted the estension with knowledge of the facts, and it took no action to advise liim of their existence. Under these circumstances, the defendant in error must be held 378 CH. XII.] NOTICE OF DISHONOR. ILL. CAS. to have assumed the risks that naturally flowed from its actions, one of wbieh was that Patterson might avail himself of a defense lhu3 afforded to him by its own negligence. As upon the undis- puted facts the judgment sbouM have been for tlie plaintiff in error, it becomes unnecessary to consider the other questions that arise upon the record. Judgment reversed, and cause remanded for further proceed- ings. Notice of Dishonor 3Iust be Addressed to Executor or Administrator of Deceased Indorser. Drexler v. McGlynn, 90 Cal. 143 (33 P. 773). Patterson, J-. Tliis is an action against the defendants, as executors of the last will and testament of James M. Donahue, deceased, upon a promissory note indorsed by their testator September 10, 1889. The note became due March 10, 1890. Donahue died on the 3d day of Marcli, 1890, leaving a will in which the defendants were named as executors, and which was filed in the superior court on the 11th day of March, 1890. It is claimed that the estate is not liable because no proper notice of protest was given, but we think the i)oint is not well taken. The notice was addressed to "Messrs. Peter J. McGlynn and J. F. Burgin, Jr., a'lministrators of the estate of J. M. Donahue, deceased," and it was deposited in the post office on the day the note became due. The Civil Court provides that a notice of dishonor may be given, in case of the death of the parly otherwise euliiled to notice, to one of his peisonal repre- sentatives, or, if there are none, then to any nn mber of his family, and, if there be no family, it must l)e nniilcd to his last place of residence. Section 3145. Api)ellants contend that, in- asmuch as the defendants had not been api)ointed by the court at the time the notice was given, they were not personal re[)re- senttilives, within the mtaning of this statute; and cases are cited, holding that notice sent to a person afterwards appointed administrator of an intestate is insufficient. The^e authorities are not in point. While it is true that the apixfintment of an executor is only provisional, and requires the approval of the court, for the purpose of administraliD.i upon the estate of the testator, it is also true that the law allows a man to ap[)oint his executors, subject to this apjHOval, and treats them as entitled to the office until they renounce it; and unless, for snme reason, they are incomi)etent, the a[)pointment makes them representatives of the estate, "■ so far as relates to acts in which tluy are merely passive, such as receiving notice of the di-honor of a note " Sboenberger's Ex'rs v. Savings Inst., 28 Pa. St. 4G6. It mat- ters not that the person named in the will may never be actually appointed executor by the court. He may renounce the trust. But, as he is the person to whom the testator has confided the 379 ILL. CAS. NOTICE OF DISHONOR. [CH. Xir. administration of his estate, it is regarded as safe to intrust him wilh the notice. "It is not to he expected that any person can ordinarily be found upon whom this duty [protecting the estate] will rest more strongly than upon one who is named as executor in the will." Goodnow v. Warren, 122 Mass. 82 ; 3 Rand. Com. Paper, § 1245. The reason for holding that a notice to one named in the will as executor is good, is not applicable to the case of one who happens after the notice is given to be appointed administrator, because the latter is neither honorably, nor in legal duty, bound to do anything for the protection of the estate. It is claimed, also, that the note was not presented for pay- ment by the holder ; that the evidence shows that the note was transferred to the Auglo-Californian Bank, which was the holder of the note at the time demand was made. The certificate of the notary, it is true, states the note was presented, and payment was demanded, "at the request of the Anglo-Californian Bank, Ld., holder of the original note," but the plaintiff testified that he had been the owner of the note from the time it was made until the day of his trial, and the fair import of the evidence is that the note was given to the bank simply for collection. Tlie notice may properly be given by an agent, and the agent may give the notice in his own name. 3 Rand. Com. Paper, §§ 123G, 1237; 2 Daniel Neg. Inst., § 991. There is nothing in the point that the notice was invalid because it was addressed to the defendants as " administrator." The notice need not have been addressed to them in their representa- tive character at all. The actual receipt of the notice is the material thing. Beals v. Peck, 12 Barb. 245. If the defend- ants actually received the notice, — and such is the presumption from the fact of mailing, properly addressed and postage pre- paid, — the object of the law has been attained. We think the court properly overruled the demurrer. The allegation as to protest might have been more specific in its statement of facts, but, as against a general demurrer, it is good. Judgment and order affirmed. We concur: Harrison, J. ; Garoutte, J. 380 CHAPTER XIII. EXCUSES FOR FAILURE OF PRESENTMENT, PROTEST AND NOTICE. Section 141. "War, political and social disturbances, pestilence, epidem- ics, conflagrations, floods, etc. 142. Drawing with no right to expect acceptance or payment. 143. Void note. 144. Ignorance of and failure to discover the address of par- ties. 145. Sickness, death or accident to holder or to paper. 146. Possession of security by drawer or indorser. 147. Waiver of presentment, protest and notice. 148. No damage to holder — Loss or destruction of the instru- ment. § 141. War, political and social disturbances, pesti- lence, epidemics, conflagrations, floods, etc. — Notwith- standing the fact, that in the law of Commercial Paper the requirement of presentment, protest and notice is vigorously enforced; still impossibilities are not required. When cir- cumstances make it an impossibility for the holder of a bill or note to make presentment and protest, and to send out notices of dishonor, or to do either of these things, at the required time ; he will be excused for the delay or non-per- formance of these conditions, and nevertheless hold the drawer and indorsers liable. A variety of occurrences of a public character may be mentioned as illustration, which so block the wheels of commerce, that it l)ecoraes impossible to perform these commercial duties. Thus, the breaking out of war between the countries, in which the parties to a bill or note reside, is a good excuse, as long as hostilities continue, for want of presentment, protest or notice, because all intercour.«e between the citizens of belligerent nations is then strictly interdicted by the law of war.' 1 Scholefleld v. Eichelberger, 7 Pet. 586; Ray o. Smith, 17 Wall. 411; Hubbard v. Matthews, 54 N. Y. 43 (13 Am. Rep. 562); Hoase v. Adams, 48 Pa. St. 261 (86 Am. Dec. 588); Bynum v. Apperson, 9 Ilelsk. 632; 381 § 142 EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. The parties to commercial paper will also be excused from performing these conditions, if a riot or other public disturbance forces a comi)lete cessation of l)usiness on the day of maturity of a bill or note.^ Want of presentment, piotest and notice, or either of them, is excused also, where business is completely suspended on account of the prevalence of an epidemic or other disease, by the occur- rence of a flood or conflagration. But in all these cases, the suspension of business must be complete and made ab'«olutely necessary by the public calamity or disturbance. ^ But whenever the impediment to the performance of these duties is removed, it is the duty of the holder to make presentment and protest, and to issue notices of dishonor, in order to preserve the liability of drawer and indorsers. He has a reasonable time after the removal of the cause of delay, in which to do these things.^ § 142. Dravi^ing with no right to expect acceptance or payment. — If one draws on another, without having any reasonable ground to expect that the bill will be honored, the drawer cannot require presentment and notice.* Farmer's Bk. v. Gunnell, 26 Gratt. 131 ; McVeigh v. Bk. of Old Dominion, 26 Gratt. 785; Norris v. Despard, 38 Md. 487; Peters v. Hobbs, 25 Ark. 67; Durden v. Smith, 44 Miss. 549. And the same rule is followed, where a part of the country is occupied by the military forces of the enemy, preventing communication between parties residing in the different sec- tions of the same country. Apperson ■;;. Bynum, 5 Coldw. 341; Polk v. Spinks, 5 Cold. 431 (98 Am. Dec. 426). 1 See Apperson v. Union Bk., 4 Cold. 446; Patience v. Townley, 2 Smith, 223; Purcell v. AUemong, 12 Gratt. 739. 2 Tunno v. Lague, 2 Johns. 1 (1 Am. Dec. 14). 3 See cases cited in preceding notes and Bond v. Moore, 93 U. S. 593; House V. Adams, 48 Pa. St. 261 (86 Am. Dec. 588); Gilroy v. Brinkley, 12 Heisk. 392; Labadiole v. Landry, 20 La. Ann. 149. * Lawrence v. Hammond, 4 App. Dec, (D. C.) 467; Kinsley v. Robin- son, 21 Pick. 327; Thompson v. Stewart, 3 Conn. 171 (8 Am. Dec. 168); Dollfus V. Frosch, 5 Hill, 493 (40 Am. Dec. 368); Kimball v. Bryan, 56 Iowa, 632 (10 N. W. 218); Adams v. Darby, 28 Mo. 162 (75 Am. Dec. 115); Brower v. Ruppert, 24 111. 182; Cashman v. Harrison, 90 Cal. 297 (27 P. 283) ; Avent v. Maroney (Miss.), 12 So. 209; Manning v. Maroney, 87 Ala. 663; 6 So. 343 (where the drawer had instructed drawee not to accept). But see Cruger v. Armstrong, 3 Johns. 5 (2 Am. Dec. 126). 382 CH. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. § 142 But this fact would only excuse want of presentraeut, protest and notice as to the drawer ; the indorsers would nevertheless he discharged, if these duties to secondary ohiigors were neglected or delayed, unless the indorsers knew when they indorsed the paper, that the drawer's relations with the drawee did not justify the expectation that the bill would be accepted. In the latter case, the indorsers as well as the drawers would be held bound on their indorsement, notwithstanding the want of present- ment, protest and notice.^ But the mere fact, that the drawee is not at the time absolutely indebted to the drawer, is no ground for hold- ing that the drawer had no right to expect acec[)tance of his bill. In each case it is a question of fact, whether in view of the business relations of the drawer and drawee an acceptance of the bill could be reasonably expected.^ It would seem that if the drawee has accepted the bill, the drawer had a right to expect him to pay it, when it is presented. But it has been held, that even in that case, the relations of the drawer and drawee may be such that the former has no reasonable grounds for expecting pay- ment, as in the case of accommodation acceptances ; and hence he may be held liable although the holder fails to make presentment for payment, or to send the drawer notice of dishonor.^ And, for the same reason, the in- J French v. Bk. of Columbia, 4 Cranch, 141; Mohawk Bank v. Broder- ick, 10 Wend. 304; s. c. 13 Wend. 133 (27 Am. Dec. 192); Scarborough V. Harris, 1 Bay, 177 (1 Am. Dec. 609); Ayarden v. Tucker, 7 Mass. 449 (5 Am. Dec. 62); Bogy v. Keil, 1 Mo. 743. 2 Dickens v. Beal, 10 Pet. 572; Kuickerboker L. Ins. Co. v. Pendleton, 112 U. S. 696; Stanton v. Blossom, 14 Mass. 116 (7 Am. Dec. 198); Rob- inson V. Ames, 20 Johns. 146 (11 Am. Dec. 259); Orear r. McDonald, 9 Gill. 350 (53 Am. Dec. 7f3); Schuchardt v. Hall, 36 Md. 600 (11 Am. Rep. 514); Adams v. Darby, 28 Mo. 162 (75 Am. Dec. 115); Welch v. Taylor Mfg. Co., 82 111. 579; Miser v. Trovinger, 7 Ohio St. 281; Compton v. Biair, 46 Mich. 1; Leonard v. Olson (Iowa, '90), 08 N. W. 677. 3 Kinsley v. Robinson, 21 Pick. 327; Barbaroud v. Waters, 3 Met. (Ky.) 304; Allen v. King, 4 McLean, 128; Hoffman v. Smith, 1 Caines, 157; R 8S V. Bydell, 5 Duer, 462; Compton v. Blair, 46 Mich. 1 (drawer had instructed acceptor not to pay the bill); Harrison v. Trader, 29 Ark. 85; Beverldge v. Richmond, 14 Mo. App. 405. But he is rntitled to 383 § 144 EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. dorser cannot require presentment, protest and notice, where the bill or note is issued for his accommodation, under an agreement or understanding that he will provide for payment on the day of maturity.^ The same is also the rule, where the drawer or indorser has been provided l)y the acceptor or maker with funds to enable him to take up y the paper at maturity.'^ There is, also, no right to demand presentment, protest, and notice, where the drawer and drawee are the same natural persons, as well as in the case of co-partnership and corporations.^ § 143. Void note, — When a note is void for any rea- son, as between the maker and payee, and the indorser knew it when the indorsement was made; the indorser can- not require presentment, protest and notice. He guarantees the validity of a note, which he cannot expect to see honored by the makers.* § 144. Ignorance of and failure to discover, tlie address of parties. — The failure to make presentment notice and presentment, if he had reasonable ground for expecting pay- ment. Norton v. Piclsering, 8 B. & C. 610; Miser u. Trovinger, 7 Ohio St. 281; Lacoste v. Harper, 3 La. Ann. 385 (48 Am. Dec. 449). 1 Letson v. Dunham, 2 Gr. (13 N. J. L.) 307 ; Torrey v. Foss, 40 Me. 74 ; Shriner v. Keller, 25 Pa. St. 61 ; Black v. Fizer, 10 Heisk. 48. 2 Ray V. Smith, 17 Wall. 411; Wright v. Anderson, 70 Me. 86; Curtis V. Martin, 20 111. 557. •" Fairchild v. Ogdenburg R. R. Co., 15 N. Y. 357 (69 Am. Dec. 606); Fuller V. Hooper, 3 Gray, 334; Bailey v. Southwestern Bk., 11 Fla. 206; Rhett V. Pole, 2 How. 457; Dwight v. Scovill, 2 Conn. 054; Maux Ftrry Co. V. Branegan, 40 Ind. 361; New York &c. Co. v. Myer, 51 Ala. 325. The same rule obtains where the maker of a note, or acceptor of a bill, and an indorser are the same person. Foland v. Boyd, 23 Pa. St. 470; West Branch Bank v. Fulmer, 3 Pa. St. 399 (40 Am. Dec. 651) ; Donnell V. Lewis Co. Sav. Bk., 80 Mo. 165; Castle v. Rickly, 44 Ohio St. 490 (9 N. E. 136). See ante, § 46. * Copp V. M'Dugall, 9 Mass, 1; Wyman v. Adams, 12 Cush. 210; TurnbuU v. Bowyer, 40 N. Y. 456 (100 Am. Dec. 523); Susquehanna Val. Bk. V. Loomis, 85 N. Y. 207 (39 Am. Rep. 652); Perkins v. White, 36 Ohio St. 530; Butler v. Slocomb, 33 La. Ann. 170 (39 Am. Rep, 265) In this case the defense was incapacity of maker on account of infancy. 384 CH. XIII.] EXCUSES FOR NON-PKESENTMENT, ETC. § 144 and to give notice will be excused, when the holder or other party, whose duty it is to do any of these things, cannot after the exercise of due diligence find out the parties to whom presentment should be made or notice sent. If he cannot find the maker of a note or acceptor of a bill, presentment for payment or acceptance will be excused; but the paper must be protested, and notice sent to the drawer and indorsers. If the drawer or one of the iudorsers cannot be found, this fact will excuse notice to that particular drawer or indorser, but not presentment and protest.^ But as soon as the address of the party is discovered, the presentment must be made, or the notice sent, as the case may be.^ But in the case, where the maker of a note or accei)tor of a bill has changed his abode or place of business ; whether it will be necessary to make presentment to him at his new address, on discovering it, will depend upon whether it is in the same State or country, or in a different one. If he has moved to another State or country, the holder is not required to make presentment; but he may protest at once for non-payment or non-accept- ance, stating the fact that presentment became impossible by the departure of the maker or acceptor from the State or country. And for these purposes, the States of the American Union are considered as foreign to each other. "^ 1 May V. Coffin, 4. Mass. 341; Manufacturer's Bank v. Hazard, 35 N. Y. 22C; Isbell v. Lewis, 98 Ala. 560 (13 So. 335); Walker v. Stetson, 14 Ohio St. 89 (84 Am. Dec. 8G'2) ; Garver v. Downie, 33 Cal. 17(5; Davis v. Eppler, 38 Kan. G29 (IG P. 793). 2 Baldwin v. Richardson, 1 B. & C. 245; Hutchison v. Crutcher (Tenn. '97), 39 S. W. 725; McGeorge v. Chapman, 44 N. J. L. (16 Vroom) 395; Beale v. Parish, 20 N. Y. 407 (75 Am. Dec. 414), and cases cited in pre- ceding note. » McGruder v. Bk. of Washington, 9 Wheat. 598; Grafton Bk. r. Cox, 13 Gray, 503; Sulzbackerr. Bk. of Charleston, 2 Pickle, 201 (6 S. W. 129); Adams v. Leland, 30 N. Y. 399; Smith r. Poillon, 87 N. Y. 590 (41 Am. Rep. 402); Reid u. Morri.son, 2 Watts and S. 401 ; Leonard i?. Olson (Iowa, '9G), 68 N. W. 677; Eaton v. McMahon, 42 Wis. 484; Salisbury v. Barjlison, 39 Minn. 365 (40 N. W. 265); Herrick v. Baldwin, 17 Minn. 209~(10 Am. Rep. 161). But see Farwell v. St. Paul Trust Co., 45 Minn. 495 (48 N. W. 326). 25 385 § 144 EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. Temporary absence does not, however, excuse failure to present for payment. ^ If the maker or acceptor is notoriously insolvent and has absconded, or has been committed to the penitentiary, it is not necessary to make presentment anywhere, not even at his former residence or place of business. But insolvency alone does not excuse presentment.^ In determining what amount of diligence must be exer- cised in searching after the desired address of a party to a bill or note, nothing more definite can be stated without going into the details of particular cases, than that it is that degree of diligence which may be expected of a reason- ably prudent man under the special circumstances of the particular case. And it has been held that where the inquiry leads to a reliable person, who professes to know the desired address, the inquiry need not be pursued any further, and the party will nevertheless be held bound on the paper although the information proves to be erroneous.^ But until some such definite information is received, in- quiry must be made of every other party to the paper, and of everyone else, who is likely to know the address which is being sought after.* 1 Glaser v. Rounds, 16 R. I. 235 (14 A, 863). 2 Hale V. Burr, 12 Mass. 89; Schofleld v. Bayard, 3 Wend. 488; Taylor V. Snyder, 3 Den 145 (45 Am. Dec. 457); Lehman v. Jones, 1 Watts & S. 126 (37 Am. Dec. 455); Cedar Falls Co. v. Wallace, 83 N. C. 225; Rat- cliffe V. Planters' Bk., 2 Snecd, 425; First Nat. Bk. v. De Morse (Tex. Civ. App.), 26 S. W. 417 (maker in the penitentiary); Leonard v. Olson (.Iowa, '96), 68 N. W. 677 ; Warrensburg &c. Assn. v. Zoll, 84 Mo. 94. See contra Farwtll v. St. Paul Trust Co., 45 Minn. 495 (48 N. W. 326). 3 Harris v. Robinson, 4 How. 336; Brighton &c. Bank v. Philbrick, 40 N. H. 606; Gawtry v. Doane, 51 N. Y. 84; Belden v. Lamb, 17 Conn. 441; Central N. Bk. v. Adams, 11 S. C. 452 (32 Am. Rep. 495). 4 Lambert!). Ghistlin, 9 How. 552; Sweet v. Woodin, 72 Mich. 393 (40 N. W. 471) ; Grafton Bk. v. Cox, 13 Gray, 503; Davis v. Eppler, 38 Kan. 629 (16 P. 793); Lawrence v. Miller, 16 N. Y. 238; Requa v. Collins, 51 N. Y. 144; HofEmau v. Hollingsworth (Ind. App.), 37 N. E. 960; Isbell v. Lewis, 98 Ala. 550 (13 So. 335) ; Gilchrist v. Donnell, 53 Mo. 591 ; Haber V. Brown, 101 Cal. 445 (35 P. 1035). 386 CH. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. § 146 § 145. Sickness, death or accident to holder or to paper — Delay in transmission by mail. — The sickness or death of the holder, or the happening of some accident or injury to him, on the eve of the maturity of the paper, and so unexpected that provision could not be reasonably made for the presentment, protest and notice by another, have been held to be good excuses for the failure to do these things at the required time. But they do not excuse the complete failure to do them, after the emergency has passed, and sufficient lime has elapsed for the appointment of another to act for the holder.^ The same excuses would be sufficient, if the accident or sickness happened to the agent of the holder, or to an indorser, wh) was ex[)ect- ing to give notices of dishonor to the drawer and prior indorscis. If a l)ill or note is transmitted by mail, whether it be to an agent for collection, or to some indorsee in full, and it should be lost or delayed in the mail, so that presentment could not be made on the day of maturity, the delay in presentment, protest and notice, thereby occasioned, will be excused. 2 And so, also, where the failure to receive the paper in time to make presentment in (\uq season is occasioned by the immediate indorser, the delay in i)resentment, protest and notice will not discharge him; although, it seems, it will discharge the drawer and prior indorsees, who did not occasion the delay.'' § 14(). Possession of security by drawer or indorser. — A difficult question, and about which the authorities are contradictory, is how far will the ))<)ssessi()n of security or 1 White r. Stoddard, 11 Gray, 258 (71 Am. Dec. 711); Aymar u. Beer?, 7 Cow. 705 (17 Am. Dec. 538). In the case of death of tlie holder, d<,l:iy in presentment, protest and notice is excusable, until the executor or adniiiiistrator has qualifled. See ante, §§ 115, 113. 2 Windham Bank v. Norton, 22 Conn. 213 (5G Am. Dec. 397); Jones v. Warden, 6 Watts & S. 399; Pier v. Ileinrichshoffen, C7 Mo. 1C3 (29 Am. Rep. 501); Newbold v. Boraef, 155 Pa. St. 227 (26 A. 305). ' Mason r. Pritchard, 9 Heisk. 793. 387 § 147 EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. of the property of the primary obligor by the drawer or anindorser, permit the holder to di-peuse with presentment, protest and notice, as to such drawer or indorser. Prob- bably all the cases would support the proposition, that while mere possession of collaterals to secure the payment of the instrument will not excuse presentment and notice, such a drawer or indorser could not require these things, if the acceptor or maker has made an assignment of all his prop- erty; since there would be nothing left in the hands of such acceptor or maker, wherewith to make payment of the bill or note in question.^ § 147. Waiver of presentment, protest and notice. — The requirement of presentment, protest and notice is for the benefit of the persons secondarily liable ; and if they see fit to do so, they, or any one of them, may by agree- ment, express or implied, waive the requirement, and bind themselves, in spite of the omission of these customary acts. The waiver can be made only by one who is secondarily liable on a bill or note, or by his duly authorized agent,^ 1 Kramer v. Sandford, 4 Watts & S. 328 (39 Am. Dec. 92) ; Creamer v. Perry, 17 Pick. 332 (27 Am. Dec. 297); Seacord v. Miller, 13 N. Y. 55; Whiltier v. Collins, 15 R. I. 44 (23 A. 39) ; Wright v. Andrews, 70 Me. 86; Moses v. Ela, 43 N. H. 557 (82 Am. Dec. 175); May v. Bois^eau, 8 Leigh, 164; Swan v. Hodges, 3 Head, 251; Wilson v. Senier, 14 Wis. 380; Ray v. Smith, 17 Wail. 416. Where the acceptor or maker has made an assignment for the benefit of creditors, presentment must be made to such assignee; ante, § 117. But some of the cases maintain that presentment, protest and notice may be omitted, whenever the drawer or indorser has property of the primary obligor, which fully secures hira from his secondary liability on the bill or note, whether it constitutes the whole or only a part of the property of the acceptor or maker. Marshall v. Mitchell, 35 Me. 221 (58 Am. Dec. 697) ; Second N. Bk. v. McGuire, 33 Ohio St. 295 (31 Am. Kep. 539) ; Durham v. Price, 5 Yerg. 300 (26 Am, Dec. 267) ; Smith v. Lowns- dale, 6 Ore. 78. 2 Standage v. Creighton, 5 C. & P. 406; Central Bank v. Davi?, 19 Pick. 373; Manney v. Coit,80N. C. 300; Seldner y. Mt. Jackson Nat. Bk., 66 Md. 488 (8 A. 262) waiver made by a member of firm) ; Brjant v. Lord, 19 Minn, 397; Star Wagon Co. v. Sweezey, 52 Iowa, 394 (3 N. W. 421) ; Farmer's Bank v. Ewing, 78 Ky. 264 (39 Am. Rep. 231). 388 CII. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. § 147 and it must be made to the holder of the l)ill or note. But if it is made to the holder, the waiver will inure to the benefit of any subsequent indorsee or transferee.^ If the waiver is made by the drawer of a bill, and it is put in the body of the instrument, it constitutes a part of the contract of every one who becomes secondarily liable thereon, whether as drawer or indorser.^ But if it appears over the signature of one of the indorsers, it will bind him only, and not any other prior or subsequent indorser.^ The waiver may be written on the bill or note, or on a separate paper ;^ and while it is doubtful, whether a parol waiver is binding on the party making it, there being authorities for^ and against^ the proposition ; it is not nec- essary that the waiver should be couched in words of ex- press agreement. The waiver will, for example, be inferred from the use of words by an indorser, which show his in- 1 Miller v. Hackley, 5 Johns. 375 (4 Am. Dec. 372); National Bank v. Lewis, 50 Vt. 622 (28 Am. Rep. 5U); Curtiss v. Martin, 20 111. 557; Olendorf v. Swatz, 5 Cal. 480 (03 Am. Dec. 141). 2 Hoover v. McCormick, 84 Wis. 215 (54 N. W. 505) ; Farmers' Bank v. Ewing, 78 Ky. 2G6 (39 Am. Rep. 231) ; Deering v. Wiley, 56 111. App. 309; Lowry v. Steele, 27 Ind 168; Leeds v. Hamilton Paint &c. Co. (Tex. Civ. App), 35 S. W. 77; Iowa Val. State Bk. u. Sigstad (Iowa), 65 N. W. 407; Phillips v. Dippo (Iowa), 61 N. W. 2IG. s Woodman v. Thurston, 8 Cush 157; Johnson v. Parsons, 140 Mass. 173 (4 N. E. 196) ; Stanley v. McElrath, 86 Cal. 449 (25 P. 16) ; Cooke v. Pomeroy, 65 Conn. 466 (32 A. 935); Ilatley v. Jackson, 48 Md. 254; McMonigal v. Brown, 45 Ohio St. 499 (15 N. E. 860); May i;. Boisseau, 8 Leigh, 164; Quintauce v. Goodrow, 16 Mont. 376; Mehagan v. Mc- Manus, 35 Nel). 633 (53 N. W. 574). But see contra Parshley v. Heath, 69 Me. 90 (31 Am. Rep. 246). * Riker v. Sprague Mfg. Co., 14 R. I. 402 (51 Am. Rep. 413) ; Spencer V. Harvey, 17 Wend 489; Duvall v. Farmers' Bk., 9 Gill & J. 31; Hoover V. Glasscock, 16 La. 242. 5 Boyd V. Cleveland, 4 Pick. 525; Ilallowfll Nat. Bk. v. Marston, 85 Me. 488 (27 A. 529) ; Barcl;iy r. Weaver, 19 Pa. St. 396 (57 .\ra. Doc. 6^1) ; Taylor v. French, 2 Lea, 260 (31 Am. Rep. 609) ; Markland v. McDaniel, 51 Kan. 350 (.32 P. 1114); Quintance v. Goodrow, .16 Mont. 376. 6 Rodney V. Wilson, 67 Mo. 123 (29 Am. Rep. 499); Beller r. Frost, 70 Mo. 186; FarwtU v. St. Paul Trust Co., 45 Minn. 495 (48 N. W. 326); Kern v. Von Phul, 7 Minn. 426 (82 Am. Dec. 105) ; First Nat. Bk. v. Max- tleld, 83 Me. 576 (22 A. 479) 389 § 1 17 EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. tention to be bound in the capacity of a guarantor, instead of an indorser,^ Presentment, protest and notice constitute three distinct acts, which are required to be done, unless excused or waived, in order to hold liable a secondary obligor to a bill or note. And a waiver of one of them would not neces- sarily imply a waiver of all. It has thus been held that a waiver of notice will not include by implication a waiver of demand ; although it would seem to bo more reasonable to infer that a waiver of demand would include a waiver of notice as well as protest, since demand must necessarily precede protest and notice of dishonor. ^ But the later cases show a tendency to follow and adopt the banking cus- tom, wherever it is found to be an estal)lished custom, to take the waiver of protest as a complete waiver of technical presentment and notice, as well as of protest. So that it is now very generally held, both as to foreign and inland bills of exchange, that a waiver of protest dispenses also with formal demand and notice.^ 1 Union Bk. v. Magruder, 7 Pet. 287; Davis v. Wells, 104 U. S. 159; Furbei- v. Caverley, 42 N. II. 74; Seabury v. Hungerford, 2 Hill, 80; Airey v. Pearson, 37 Mo. 424; Blanc v. Mut. Nat. Bk., 28 La. Ann. 921 (26 Am. Rep. 119) ; Small v. Clarke, 51 Cal. 227; Wells v. Davis, 2 Utah, 411. 2 Waiver of notice, Berkshire Bank v. Jones, 6 Mass. 524 (4 Am. Dec. 175) ; Backus v. Shepherd, 11 Wend. 029; Whiteley v. Allen, 56 Iowa, 224 (41 Am. Rep. 99; 9 N. W. 190); Camp v. Wiggin.«, 72 Iowa, 643; 34 N. W. 461 (waiver of provision as to place of payment); Sprague v. Fletcher, 8 Oreg. 367 (34 Am. Rep. 587). Waiver of demand. Porter v. Kimball, 53 Barb. 467; s. c. 3 Lans. 330; Bryant u. Merchants' Bk., 8 Bush, 43; Johnson Co. Sav. Bk. v. Lowe, 47 Mo. App. 151 (demand and protest). Waiver of demand and notice, including protest. Davis v. Wells, 104 U. S. 159; Woodman v. Thrui«tou, 8 Cush. 157; National Exch. Bk. v. Kimball, 66 Ga. 758; Baker v. Scott, 29 Kan. 136; Jaccard v. Anderson, 37 Mo. 91; Wells v. Davis, 2 Utah, 411. 3 Union Bk. v. Hyde, 6 Wheat. 572; City Sav. Bk. v. Hopson, 53 Conn. 453 (5 A. 601); Johnson v. Parsons, 140 Mass. 173 (4 N. E. 196); Cod- dington v. Davis, 1 N. Y. 186 ; Annville N. Bk. v. Kettering, 106 Pa. St. 531 (51 Am. Rep. 536); First Nat. Bank v. Falkenhan, 94 Cal. 141 (29 P.866); Williams V. Lewi«, 69 Ga. 762; Harvey v. Nelson, 31 La. Ann. 434 (33 Am. Rep. 222); Baskin v. Crews, 66 Mo. App. 22; Jaccard v. Anderson, 390 CH. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. § 147 It is not material whether the waiver is made before or after the negotiation or indorsement of the bill or note ; and where it is done after negotiation and before maturity, any statement made by a drawer or indorser to the holder, such as the uselessness of making presentment and protest, which is calculated to induce the holder to refrain from doing these required things, will operate as a waiver of them.^ Requests for extension of the time of payment, when made by, or with the consent, of the drawer or indorser, constitute a waiver/'' as well as a distinct promise on their part to pay at maturity.^ Although, according to the general rules of the law of contracts, it would appear that a waiver of presentment, protest and notice after maturity would not revive an ex- tinguished liability, unless such waiver was supported by a new consideration ; the great weight of authority seems to support the proposition, that no new consideration is necessary ; and that a waiver has the effect of preserving the liability of a drawer or indorser, whether it is made 37 Mo. 91; Johnson Co. Sav. Bk. v. Lowe, 47 Mo. App. 151; Carpenter V. Reynolds, 42 Miss. 807; Wilkie v. Chandon, 1 Wash. St. 355 (25 P. 464). J Taylor v. French, 4 E. D. Smith, 458; Moyer's Appeal, 87 Pa. St. 129; Hamraett v. Trueworthy, 51 Mo. App. 281 (waiver at maturity); Boyd V. Bk. of Toledo, 32 Ohio St. 526 (30 Am. Rep. 624) ; McMonisjal V. Brown, 45 Ohio St. 499 (15 N. E. 860). See Landon r. Bryant (Vt. '96), 37 A. 290. 2 Leffingwell v. White, 1 Johns. 99 (1 Am. Dec. 97); Cady r. Brad- .<*haw, 116 N. Y. 188 (22 N. E. 371) ; Whitlier v. Collins, 15 R. I. 44 (23 A. 39); Barclay v. Weaver, 19 Pa. St. 396 (57 Am. Dec. 6C1); Jenkins V. White, 147 Pa. St. 303 (23 A. 556); Amoskeag Bk. v. Moore, 37 N. H. 539 (75 Am. Doc. 156); Hale v. Danforth, 46 Wis. 554 (1 N. W. 284); Glaze V. Ferguson, 48 Kan. 157 (29 P. 396). See Landon v. Bryant (Vt. '96), 37 A. 296. 3 Sigerson v. Mathews, 20 How. 496; Taunton Bank v. Richardson, 5 Pick, 436; Markland v McDaulel, 61 Kan. 350 (32 P. 1114); Scldner o. Mt. .Jackson Nat. Bk., 66 Md. 488 (8. A. 262) ; Leonard v. Gary, 10 Wend, 504; First Nat. Bk. v. Hartman, 110 Pa. St. 196 (1 A. 271); Siegers. Second Nat. Bk., 132 Pa. St. 307 (19 A. 217^); Boyd v. Bk. of Toledo, 32 Ohio St. 526 (30 Am. Rep. 624) ; Lary v. Young, 13 Ark. 401 (58 Am. Dec. 332); Bryant v. Wilcox, 49 Cal. 47. 391 § 147 EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. before or after maturity. Usually, waivers after maturity take the form of promises to pay the bill or note in ques- tion or part-payment of the same. And the l)romi^^e does not constitute a good waiver, unless it is made after full knowledge of the failure of the holder to make presentment and to secure protest and notice.^ But the waiver after maturity will be good, although it is made in ignorance of the legal effect of the holder's failure to make the proper presentment and protest and to give the required notice. The universal distinction of the law between ignorance of law and of fact is here applied .^ So, also, where the waiver after maturity takes the form of a promise to pay, it must be an absolute promise to pay. A mere promise to " see what can be done " will not be a good waiver.^ 1 Sigerson v. Matthews, 20 How. 496; Yeager v. Farwell, 13 Wall. 6; Matthews v. Allen, 16 Gray, 594 (78 Am. Dec. 430); Hobbs v. Straine, 149 Mass. 212 (21 N. E. 365) ; Nat. Bk. of Commerce v. Nat. M. B. Assn., 55 N. Y. 211 (14 Am. Rep. 232) ; Ross v. Hurd, 71 N. Y. 14 (27 Am. Rep. 1); Oxmond v. Varnum, 111 Pa. St. 193 (2 A. 224); TurnbuU v. Maddux, 68 Md. 579 (13 A. 334); Newberry v. Trowbridge, 13 Mich. 263; Seb'ree Dep. Bk. V. Moreland, 96 Ky. 150 (28 S. W. 153); Givens v. Merchants' Nat. Bk., 85 111. 442; Lockwood v. Bock, 50 Minn. 142 (52 N. W. 391); White V. Keith, 97 Ala. 668 (12 8o. 611); State Bk. v. Bartle, 114 Mo. 276 (21 S. W. 816); Workingmen's Bkg. Co. v. Blell, 57 Mo. App. 410; Davis V. Miller, 88 Iowa, 114 (55 N. W. 89). See Reinke v. Wright, 93 Wis. 368 (67 N. W. 737). But see contra as to validity of waiver after maturity without new consideration, Huntington v. Harvey, 4 Conn. 124; Lawrence v. Ralston, 3 Bibb. 1 ; and contra as to effect of ignorance of the failure to make demand and protest, Debuys v. Mollere, 3 Mart. (La.), 318 (15 Am. Dec. 159); Bogart v. McClung, 11 Heisk. 105 (27 Am. Rep. 737). 2 Mathews v. Allen, 16 Gray, 594 (78 Am. Dec. 430) ; Third Nat. Bk. v. Ashworth, 105 Mass. 503; Glidden v. Chamberlain, 167 Mass. 486 (46 N. E. 103); Givens v. Merchants' Nat. Bk., 85 111.442; Hughes v. Bowen, 15 Iowa, 446; and, generally, the cases cited in preceding note. But, see contra, as to ignorance of fact that his liability was that of an indoreer. O'Rourke v. Hanchett, 89 Hun, 611. 3 Prideaux v. Collier, 2 Stark. 57; Klosterman v. Kage, 39 Mo. App. 60; Grain v. Colwell, 8 Johns. 384; Ross v. Hurd, 71 N. Y. 14 (27 Am. Rep. 1); Martin v. Perqua, 65 Hun, 225; Tardy u. Boyd, 26 Gratt. 631; Isbell V. Lewis, 98 Ala. 550 (13 So. 335) ; Whittier v. Collins, 15 R. I. 44 ; 23 A. 39 (request for delay no waiver). 392 CH. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. § 148 § 148. Xo damage to holder — Loss or destruction of the instrument. — The inere fact, Unit the drawer or indorser will suffer no damage, if there should be a failure to make presentment and protest, and to give notice, would not be a sufficient excuse, whether because there were no funds in the drawee's hand-<, or the acceptor or maker was notoriously insolvent. In all such cases, pre- sentment, protest and notice are nevertheless required, although the drawer or indorser is fully cognizant of all the facts. ^ The loss of the bill or note prior to maturity will not excuse presentment. For in that case, the commercial law permits ami requires presentment to be made without ex- hibition of the instrument, upon statement of the loss and offer of a bond of indemnity against the subsequent pre- sentation of the paper by a bona fide holder. If this is not done, the drawer and indorsers will be discharged.^ >< ^ French v. Bk. of Columbia, 4 Cranch, 141; Shaw w. Reed, 12 Pick. 132; Buck v. Cotton, 2 Conn, 12G; Jackson v. Richards, 2 Caines, 343; Mannings. Lyon, 70 Hun, 345; Commercial Bk. v. Hujjlies, 17 Wend. 94; National Bk. v. Bradley, 117 N. C. 52G (23 S. E. 455); Hunt w. Wadleifth, 26 Me. 271 (45 Am. Dec. 108); Cedar Falls Co. v. Wallace, 83 N. C. 225; Farwell v. St. Paul Trust Co., 45 Minn. 495 (48 N. W. 32(;) ; Bassenhorst V. Wilby, 45 Ohio St. 333 (13 N. E. 75); Hill v. Martin, 12 Mart. (La.), 177 (13 Am. Dec. 37:'); Reinke v. Wilson, 93 Wis. 3fi8 ((57 N. W. 737); Clair V. Barr, 2 Mar.sh. 255 (12 Am. Dtc. 391). But svaante, § 144, where the insolvent has absconded. 2 Fales V. Russell, IG Pick. 315; McGregory v. McGregory, 107 Mass. 643; Yerkes v. Blodgett, 48 Mich. 211; Armstrong v. Lewi.«, 14 Minn. 40G; Smith v. Rockwell, 2 Hill, 184. If a bill is drawn in duplicate and the original is lost, a duplicate may be used in presentment and demand. Any reasonable delay in hunting for the original will be excu.sed. Benton v. Martin, 31 N. Y. 382; Angaletos v. Meridian Nat. Bank, 4 Ind. App. 573 (31 N. E. 3G8). But a bond of indemnity need not be offered, if t!ie paper is non-negotiable. Wright v. Wright, 54 N. Y. 437; Allen v. Reiil), 15Nev. 452. Or, in some States where, in the case of a negotiable instrument, its partial or total destruction by Arc or otherwise has bt en proven beyond all reasonable doubt. Bank of U. S. v. Sill, 6 Conn. lOG (13 Am. Dec. 44); Thayer v. King, 15 Ohio St. 242 (45 Am. Dec. 571); Scott V. Meeker, 20 Hun, IGl; Des Arts v. Leggett, 16 N. Y. 582; Wade V. Wade, 12 III. 89. 393 ILL. CAS. EXCUSES FOU NON-PRESENTMENT, ETC. [CII. XIII. ILLUSTRATIVE CASES. Morgan V. Bank of Louisville, 4 Bush, 82. Culver V. Marks, 122 Ind. 554 (28 N. E. 1086). Hobbs V. Straine, 149 Mass. 212 (21 N. E. 365). Presentment, Protest and Notice Excnsed l>y War or Dis- tvirbances of Public Order, Sufficient to Prevent the Conduct of Business. Morgan v. Bank of Louisville, 4 Bush, 82. Chief Justice Williams. This was a suit upon the note of Morgan for two thousand five hundred and ninety-two dollars, dated New Orleans, La., January 23, 1861, payable at the office of Pilcher & Goodrich, New Orleans, at nine months' time, with eight per cent interest, and indorsed by Pilcher & Goodrich and B. P. Scally. The note was not paid at maturity, but protested by a notary public in New Orleans. Morgan, the maker, let judgment go by default, but Scally, the indorser, insists that he is not liable. The evidence establishes the following facts, to wit: That Scally resided in Louisville, Ky., when the note fell due, and ever since ; that there was then a war between the Southern and Northern States, and no mail communication between New Orleans and Louisville; that the latter post had fallen into the Federal possession, and a mail sent hence to New York May 3, 1862 ; from which time mail communication became regular and safe once a week ; and that the blockade of New Orleans, by order of the Presi- dent of the United States, was raised June 1, 1862 ; that the said paper was held by the New Orleans Canal and Banking Company until November 20, 1862, when it was sent by express to the Bank of Louisville, at Louisville, Kentucky, which owned it ; and that December 5, 1862, the cashier of the Bank of Louisville deposited a notice in the post office at Louisville, notifying Scally of the dishonor of said paper ; that by the laws of Louisiana and cus- tom of merchants such paper is regarded as commercial. Was this a legal notice to the indorser, Scally? It is insisted by ai)pellee that no protest or notice was neces- sary, because of the late Civil War, Louisville and New Orleans then being within the military lines, and held Viy different bellig- erents, and claims that this has been so adjudicated by this Court in Graves v. Lilford, 2 Duvall, 108 ; Bell, Berkley & Co. v. Hall, lb. 292, and Berry, etc. v. Southern Bank, lb. 379. The first case was upon assigned notes — not commercial paper — hence no question of commercial law was involved. In the case of Bell, Berkley & Co. v. Hall, suit, with attach- ment,, was brought but a few days before the bill of exchange fell due, January 13, 1862. It had been drawn and accepted in Kentucky, but payable in New Orleans ; the war was flagrant 394 CU. XIII.] EXCUSES FOR NON-PRESENTMKNT, ETC. ILL. CAS. when it fell due ; the bill had not been forwarded to New Orleans for payment, but was in suit in Kentucky ; it would have been illegal to attempt then to collect this bill in New Orleans ; the maker and indorsers of the bill not only had the presumed notice of open hostilities between the two States, but tiie actual notice by suit that the holder was looking to them. In Berry v. Southern Bank, tlie bills of exchange were drawn and indorsed in Kentucky and sold to a Kentucky l)ank, addressed to a firm in New Oilcans, the very day of the President's procla- mation of blockade, the official notification of war between Ken- tucky and Louisiana, and which were not payable until after the Congressional action of non-intercourse and the President's proclamation thereof. These bills were not accepted, and no evidence that they were ever in New Orleans ; but suit was prosecuted upon them against the drawer and indorsers, who resided in Kentucky. It was held, upon tbese facts, that the war rendered it not only unnecessary, but illegal, to send said hills to New Orleans for collection ; and, therefore, protest was unnecessar}- and notice immaterial, as the public war itself was a notification ; and this doctrine is well announced by the court of error in New York (Griswald v. Waddington, 16 Johns. 443), well drawing a distinction between commercial paper drawn in one country, payable in another, before and after war breaks out between these countries. But the facts in the case now under consideration are quite different from those in Berry v. Southern Bank. In this case the paper was made in New Orleans befoie the war broke out, paya- ble in New Orleans after it broke out ; the maker and first indorsers were residents of Louisiana when it fell duo, and the paper held by a New Orleans bank, though it belonged to a Ken- tucky bank, and the last indorser, who is now resisting it, was a resi(lent of Kentucky. The war could be no notice to him that the maker and first indorsers, who were residents of Louisiana, had not paid it to a Louisiana holder; therefore it was essential to notify him of the fact at the earliest practicable i)eriod. The New Orleans holder very pro|)erly had it duly presented and i)rotested for non-payment, and nf)tified the Louisiana parties thereof, but could not then notify the Kentucky parties. But reasonable diligence would not require a sending of the notice by the very first mail sent out by the military authorities from New Orleans, through a portion of the enemy's country, because the sending of such mail might not be known, nor might be safe if known. When, however, the mail became regular, and notoiious, and safe, it was the duty of the New Orleans holder to notify its principal that it might notify the antecedent Kentucky parties. In House v. Adams, 48 Pa. St. 206, the Supreme Court of Pennsylvania, in case of two bills of exchange drawn and indorsed in that State, on a New Orleans house, and which were protested — the first June 11, 1H61, the second July 29, 1861 — 395 ILL. CAS. EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. and notice of dishonor received by the holders at Pittsburg, July 11, 1862, and was immediately delivered to the antecedent parties there, held upon the authority of Patience v. Townley, 2 Smith's Eiig. R. 224, and Hupkins v. Page, 2 Brock U. S. R. 20, that notice of tlie dishonor of such paper was essential so soon as it could reasonably be made ; but as, from the evidence, it appeared that the first mail received at Pittsburg from New Orleans was about July 1, 1862, and considerable intervals between them, the notice was deemed reasonable and the indorsers held liable. The blockade was removed from the port of New Orleans June 1, 1862. The mails were regularly sent to New York, and thence to the other places within the Federal Hues regularly once a week. There appears no reasonable excuse for delaying the sending of this paper from New Orleans until November 20, 1862. A delay of five months and twenty days after the blockade was raised, with regular weekly mails, which had gone safely once a week for a month, cannot be deemed reasonable, nor accounted for by the then political situation of the countr3\ The ports of the Gulf and Southern Atlantic were blockaded by the Federal nav}' ; no part of the route from New York to Louisville was through the enemy's country, or in their posses- sion ; hence the line of communication between New Orleans and Louisville, via New York, remained open and uninterrupted. Wherefore the judgment is reversed as to Scally, with direc- tions for further proceedings in accordance herewith. Presentment of Check for Payment and Notice of Non-payment Excused Where the Drawer has no Funds on Deposit at tlie Banlt, Culver V. Marks, 122 Ind. 554 (23 N. E. 1080). Olds, J. This is an action by Jacob F. Marks against Malinda Culver, administratrix of the estate of Moses C. Culver, deceased, to recover a claim against the estate of the decedent. It is contended by the appellee that the appeal was not taken and perfected within the time allowed by statute. Tlie appellant asked and obtained leave of this court to ajjpeal, which disposed of this question, aud it is unnecessary to consider it further. Appellant's decedent died in December, 1884, and the claim was filed in February, 1885. The basis of the claim is three checks, copies of which are filed with the complaint, and raaiked "A," '' B,'' and " C," and are in the following words and fig- ures: (A) "La Fayette, In<1., Nov. 1st, 1869. The First National Bank: Pay to J. F. Marks one thousand dollars. $1,000. [Signed] M. C. Culver." (B) " La Fayette, Ind., Nov. 8th, 1870. First National Bank: Pay to J. F. Marks or bearer five hundred dollars. §500. [Signed] M. C. Culver," 396 CH.XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. ILL. CAS. (C) " La Fayette, Ind., Dec. 29th, 1870. First National Bank: Pay to J. F. Marks or bearer one thousand dollars. gl.OOO.OO. [Signed] M. C. Culver." Also three promissory notes, — one dated December 17, 1870, for $1,051.34, executed by the dece- dent to appellee; one dated Septemlier 1, 1870, for S550, exe- cuted by decedent to appellee; and one dated July 29, 1872, for §2,000, executed by the decedent to one Smith Lee. and assigned by him to appellee. There are some 19 paragraphs of complaint, most of them declaring upon the checks, and varying in their alle- gations. There was no further [pleading filed. There was a trial by the court under the statute, and a finding for the appellee on the checks and notes, aggregating $7,694.31. The court's finding is as follows: The court being in all things fully advised, finds that there is due the plaintiff, of and from the administratrix, to be paid out of the estate of the decedent, JMoscs C. Culver, on account of the note for $2,000, and dated July 29, 1872, the sum of eight hundred and twenty-three dollars and twelve cents ($823.12) ; on the due-bill dated December 17, 1870, the &ura of seven hundred and ninety-six dollars and fifiy-nine cents (S79G.59); on the two one thousand dollar checks, one dated November 21, 1869, and one dated December 29, 1870, the sum of three thousand nine hundred and thirty-six dollars and twenty six cents ($3,936.26); on the five hundred and fifty dollar note, dated September 1, 1870, the sum of one thousand three hundred and eightj'-three dollars and thirty-four cents ($1,383.34), including one hundred and twent}-- five dollars and sevent^'-five cents as and for attorne3''s fees ; and on the check for five hundred dollars, and dated No- vember 8, 1870, the sum of seven hundred and fifty-five dollars, being the principal and interest thereon from the 1st day of January, 1878; and making in the aggregate, the sum of seven thousand six hundred and ninety-four dollars and thirty-one cents ($7,694.31). " The appellant demurred to each paragraph of the complaint, which was overruled, and exceptions. The appellant also filed a motion for a new trial, which was overruled, and exceptions ; also moved the court in arrest of judgment, which was overruled and exceptions reserved ; and these various rulings of the court are assigned as error. No question is pre- sented as to the sufficiency of the paragraphs on the notes, or the right of the appellee to recover the amount due upon them. The paragraphs of the complaint are numerous, and we do not deem it necessary to set them out, as we can slate the questions presented in much loss space. They all declare upon the checks, and aver facts to excuse the necessity for [)reseiitment to the bank for payment, and notice to the drawer of non-payment dif- fering in the averments in this particular: Some aver that Culver, the drawer, did not have money or funds sufficient in amount in said bank on the day of the date and delivery of said check, nor did he have enough on the day after the date of drawing an(l 31)7 ILL. CAS. EXCUSES FOR NOX-PRESENTMENT, ETC. [CH. XIII. delivering said check in said bank, to pay said check. The ninth paragraph, declaring on the check dated November 1, 1869, alleges that Culver, the drawer, did not have money or means enough in said bank on the day of the date of said check, nor did he have sufficient funds or money in said bank until tbe 11th day of November, 1869, to pay said check. Others aver that all the money or m^eans said Moses C. Culver had in said bank on the (lay of tbe date of said check, or had at any time thereafter in said bank, were, by said check, paid to said Moses C. Culver, or to other persons on the order, check, or request of the said Cul- ver, and not to the plaintiff on account of said check. Others aver that at the time of the execution and delivery of said check the said Moses C. Culver requested the plaintiff not to present said check to said bank for payment, and that he, the said Moses C. Culver, should be permitted to pay, and that be, the said Culver, would pay, said check without presentment thereof for payment to said bank ; and the plaintiff then and there promised not to present for payment said check at said bank, and to permit the said Culver to pa^^ the same without presentment for payment at said bank ; that in pursuance of said request of said Culver, and the promise of the plaintiff, the plaintiff did not present said check, nor was the same presented to said bank for payment. The fourteenth paragraph on the check, dated December 29, 1870, alleges that Culver did not have money or means sufficient in amount in said bank on the day of the date of said check, nor did he have enough means or money in said bank for more than 30 days thereafter, to pay said check. The foregoing are the averments in \^e respective paragraphs relating to the checks. The several paragraphs are, respectively, based on the checks as the foundation of the action, and the checks constitute a cause of action, Henshaw v. Root, 60 Ind. 220; Fletcher v. Pierson, 69 Ind. 281. The general rule is that a check must be presented to the bank for paj'ment, and that notice of non-payment must be given to the drawer, but there are exceptions to this rule. In Bolles Banks, p. 325, § 333, it is said: "Another excuse is the lack of funds with the drawee. The drawing of a check under such circumstances, unexplained, is a fraud which deprives the maker of every right to require pre- sentation and demand of payment." In Franklin v. Vanderpool, 1 Hall, 78, it is held that, if a maker of a bank-check has no funds in the bank upon which it is drawn at the date of the check, it is not necessary for the holder to present such check at bank for payment, in order to enable him to sustain an action upon it against the maker. Where the maker of a check withdraws his funds from the bank, so that the check cannot be paid, no demand and notice are necessary. Bolles Banks, supra ; Sutcliffe v. McDowell, 2 Nott & McC. 251. In 2 Morse Banks (3d Ed.), § 425, it is said: "Presentment, however, may be altogether dispensed with, provided that if made it could not at the time be legall}^ and prooerly met bj' the bank with a payment ; " and 398 CH. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. ILL. CAS. numerous authorities are cited in support of this statement. This is in accordance with a well-settled legal principle that the law requires no unnecessary thing to be done. Checks are presumed to be drawn against a fund deposited in the bank, out of which they are to be paid ; and if there is no such fund so deposited out of which they can be paid, the presumption is that a demand will be of no avail, and useless ; and it must be further presumed that the drawer knows the state of his account with the bank, and whether or not he has sufficient funds on deposit to pay the check, and if he has not, no demand is necessary; and, if no demand be necessary, then certainly no notice is necessarj', — being no de- mand, there could be no notice of demand. It is further stated in Morse Banks, supra, that " regular presentation ma}^ be waived by conduct or representations. Any agreement, express or im- plied, will excuse any want of the usual formalities." It is further said that " a check given as evidence of a loan to the drawer need not l)e presented to the drawee." This doctrine is held in the case of Currier v. Davis, 111 Mass. 480. It is the well-settled rule that, in the absence of any agree- ment or special circumstances, a check shall be presented at least within banking hours on the day following the date of its delivery, if the bank on which it is drawn is in the same place where the payee lives or does business, and that the first presentment fixes the rights of the parties. If, upon such presentation, tbc bank offers and is willing to pay, and the payee refuses to accei)t it, and afterwards, ^and before it is again presented, the bank fails, as between the payee and the drawer the payee suffers the loss. See 2 Morse, Banks, §§ 421, 420. And it must necessaril}- fol- low, from the well-settled law regarding checks, tliatif the drawer has no funds in the bank at the time the payee is by law required to present tlie check for payment, no necessity for demand and notice exists, and that the liability of the parties is fixed at tliis time. That is to sa}-, if demand and notice be necessary, demand must be made on the day following the delivery of tlie check, if the bank is in the same place where the payee lives, and docs business, and notice must be given, and the liability is thereby- then and there fixed, and the payee may immediately bring suit. So, on the other hand, it must logically flow and necessarily fol- low from this rule that if the drawer has no money or funds on deposit in the bank at the time the payee is required to present the check, then the liability of the drawer is fixed without pre- sentation and notice, and the ])ayee may at once bring suit on the check; and whatever takes j^luce afterwards in the state of his account at the bank can make no difference, and will not change the rights of the parties. The authorities cited, we think, are decisive of all the questions presented by the rulings on the demurrers to the several paragrajilis of complaint; and that the general rule is that the payee must present the check for pay- ment, and give notice to the drawer of its non-payment, but that no presentation or notice is necessary when the drawer has no 3i>9 ILL. CAS. EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. funds on deposit for the payment of the cheek at the time when the cheek should be presented ; or if he have funds on deposit at the time, and withdraw the same, leaving none on deposit for the payment of the check, or if by consent of the drawee or agent between him and the payee the check is not to be presented at the bank for payment, then there is no necessity for presentation and notice. There was no error in overruling the demurrers to the complaint. It is contended that the right of recovery was barred b}" limita- tion. What we have said in passing upon the complaint disposes of this question. The check being in writing, and conslituling the foundation of the action, it is not barred by the statute of limitations. A question is made as to the check. It is con- tended that as the complaint alleges that the checks were drawn on the " First National Bank of La Fayette, Indiana," and that there was no proof of such fact except that the checks were read in evidence and tliat the checks are drawn on the " First National Bank," that the proof made by the introduction of the checks does not correspond with the averments of the complaint. The checks were copied and made a part of the respective paragraphs of the complaint which declared u[)on them, and showed affirma- tively in each paragraph of the complaint the name of the bank upon which they were drawn. They were each dated at " La Fayette, Indiana," and drawn on the "First National Bank," and the name of no other jdace or bank appeared upon the check ; and the evidence showed that there was a First National Bank at La Fayette, and that fair presumption, in the absence of anything appearing to the contrary, is that it related to, and .that they were drawn upon, that bank. "Walker r. Woollen, 54 Ind. 164; Roach V. Hill, Id. 245 ; Dutch v. Boyd, 81 Ind. 146. It is not contended that there is no evidence to support the allegations of the paragraphs of the complaint which allege that it was agreed that appellee should not present the checks at the bank for paj^ment, but that Culver should pay them without pre- sentation. This can make no difference. There were several other paragraphs of the complaint, respectively declaring on each of the checks, and, if the evidence supported one paragraph declaring on each check, the finding would be sustained. It was not necessary, because appellee declared on each cause of action in several various foims of averments, that he should prove the allegations of each paragraph of his complaint. It is contended that the assessment of the amount of recovery is too large ; that the court allowed interest upon the checks. In this there is no error. Under the law, as we have stated, the cause of action accrued upon the cheeks at the time they should have been presented, if there had been mone}' in the bank for their payment ; and, as the payee resided at the same place where the bank was doing business, this would be the next day after the delivery of the check, and appellee is entitled to interest from that date. 400 CU. XIII.] EXCUSES FOR NON-PRESENTMENT, ETC. ILL. CAS. We now come to questions presented by the motion for new trial on the admission and rejection of evidence. The appellant offered to prove by Mr. M. L. Pierce, president of the bank, that if, at the date of several cliecks, or at any time during the years 1869 and 1870, checks for like amounts liail been presented to the First National Bank, drawn by Moses C. Culver by the bolder of such checks, they would liave been paid. Tlie offer was prop- erly made. The witness was sworn, and asked the proper ques- tion, and the evidence was excluded. In this ruling of the court there was no error. The evidence offered is to the effect that the bank could have paid the checks without rcgaid to whether Mr. Culver had funds in the bank or not. It is a well-settled rule that the liabilities of the parties are fixed by the fact of the drawer liaving or not having funds in the bank out of whicL the check could be lawfully paid, and the fact that he had no funds in ihe bank against which the check is drawn, and out of which he had a legal right to have it paid, or, in other words, if the bank was not at the time indebted to the drawer for money deposited, whereby he had the right to expect the bank to pay the check and charge it to him as against such deposit account, then the payee was relieved from making a demand ; and this cannot be clianged l)y a willingness on the part of the bank to pay the check of the drawer, notwithstanding he may have no funds on deposit. The payee took the check with the legal obligation resting upon him to present the check at the bank for payment, and if he failed to do 80, and the drawer had funds in the bank to pay it, and loss ensued by reason of such failure, the payee suffers the loss; but, if the drawer had no funds in the bank for the payment of the check, the payee is excused from presenting the cheek for payment. If the drawer has no funds in the bank at the time for present- ment for payment, there is no legal obligation resting upon the payee to present it for jiayraent. The bank had no legal right to permit the drawer to overdraw and pay his clieckoutof the funds of other depositors, or the money of the stockholders. The next question for consi(leration is the exception of the appellant to the ruling of the court to the admission in evidence of the entries in the books of the First National Bank, made in the usual course of business, showing the state of the account of said Moses C. Culver at and subsequent to the execution of the checks sued upon. As preliminary to the introduction of the entries in these books in evidence, it was shown by the clerks and officers of the bank, produced in court as witnesses, and as to the entries made by such witnesses, that they were at the time the entries were made the proper and authorized book-keepers to make such entries ; that the entries were made by them in the due course of business, in the discharge of their duties, and were correct when made ; that the entries made by them were original and entered by them in books kept for that purpose; and that they had no recollection of the facts represented by the entries. As to the entries made by parties who were not witnesses, it was •_'.; 401 ILL. CAS. EXCUSES FOR NON-PRESENTMENT, ETC. [CH. XIII. shown that the enterer was at the time the entry was made the proper book-keeper and agent of the bank to make the entries in the due course of business ; that the entries were original entries, in original books, made by such book-keepers, in due course of business, and were in the known handwriting of such book- keepers ; and that the enterer was dead or a non-resident of the State of Indiana, After the making of such preliminary proof, the entries weie admitted in evidence, over the objection of the appellant. It was proper to prove in tbis case the state of Moses C. Culver's account with the bank upon which he drew the cliecks, at the time he drew them, and subsequent thereto, under the issues in the case. And it is pertinent to the question to consider how such facts could be proven, if the evidence introduced was not admissible or competent for that purpose. The bank with which he did business, and upon which he drew the check, kept books and made an entry of all their business, — of the money deposited by Culver, and checks drawn by him and paid by the bank. The books were kept by disinterested parties. Some of the persons who at the time of the transaction kept the books took the deposit and placed it to Culver's credit, paid the checks drawn by him, and entered them on the books, or charged them to his account, were dead. Others were beyond the jurisdiction of the court, and others had no personal recollection of the trans- action, except to know that the books were kept in due course of the banking business, and were correct, and showed a correct statement of the account. Unless the evidence admitted was competent, the appellee is deprived of making proof of the facts. Price V. Torrington, 1 Smith Lead. Cas. (9th Ed.) 566, was an action for beer sold and delivered. It was held that a book containing an account of the beer deUvered by the plaintiff's drayman, and which it was the duty of the drayman to sign daily, was competent to prove the delivery, on proof that the drayman was dead, and of his handwriting. In a note to this case it is said: "A party's own books of account and original entries are now, in most, if not all, of the United States received as evidence of a sale and delivery of goods to, or of work done for, the adverse party." On the same subject it is further said: " The reason for its introduction hasneverbeen placed by any court on higher ground than that of necessity ; for, in view of the number and frequency of transactions of which entries are daily required to be made, the difficulty and inconvenience of making formal common-law proof of each item would be very great. To insist upon it, therefore, would either render a credit system impossible, or leave the creditor remediless." In 1 Greenl. Ev. (14th Ed.), § 115, it is said: "It is upon the same ground that certain entries made by third persons are treated as original evidence. Entries by third persons are divisible into two classes: First, those which are made in the discharge of official duty and in the course of professional employment; and, secondly, mere private entries. Of these latter we shall hereafter speak. In regard to 402 ni. XIII.] EXCUSES FOU NON-PRESENTMENT, ETC. ILL. CAS. the former class,* the entry, to be admissil)le, must be one which it was the person's duty to make, or which belonged to the trans- action as part thereof, or which was its usual and proper concom- itant." In 1 Whart. Ev. (3 Ed.), § 238, it is said: "An accountant or other lousiness agent may be regarded as a mem- ber of a well-adjusted business machine, noting in the proper time and in the proper way what it is bis duty to upte. If he has no personal motive to sweive him, the inference is that what be does in this way he does accurately ; and his evi- dence, if there be nothing to impeach it, rises in authority precisely to the extent to which he is to be regarded as a mechanical and self-forgetting register of the events which his accounts are offered to prove. Hence it is that the mem- oranda or book entries of an officer, agent, or business man, when in the course of his duties, become evidence after his de- cease, or after he has passed out of the range of process, or he- come incompetent to testify of the truth of such entries ; sub- ject, however, to be excluded, if it appears that in making the entries he was not registering, but manufacturing, current facts." The rule, as stated by Greenleaf and Wharton, is well supported by authorities. Sickles v. Mather, 20 Wend. 70. In Tiie Faxon V. HoUis, 13 Mass. 427, the book of a blacksmith, kept in ledger form, the items being fiist noted down on a slate and then entered in the book, was held to be competent evidence. Rey- nolds V. Manning, 15 Md. 510 ; Kelsea v. Fletcher, 48 N. H. 282 ; Coolidge -y. Brigham, 5 Mete. 68; New Haven Co. v. Goodwin, 42 Conn. 230. In Alter v. Berghaus, 8 Watts, 77, it is held that the absence of a witness from the State, so far as it effects the admissibility of secondary evidence, has the same effect as his death. This was in relation to the admission in evidence of original entries in books made by such absent pi-rson. We think the evidence is clearly admissible, but we might add that, as regards the books kept by bookkeepers and officers of National Banks, by section 5209, Rev. St. U. S., it is made a penal offense to make a false entry in any such books ; so that these entries were not only made as original entries in the due course of busi- ness, but the persons making them were liable to criminal pros- ecution, and, upon conviction, to suffer imprisonment, if they made a false entry. A book-keeper for tlie bank made out a statement of all the items of Culver's account appearing in the books of the bank, and ap[)eared and was sworn as a witness, and stated that he had pre- pared such statement, and had it with him, and with the books before him was interrogated as to what items appeared in the account. Tlie court permitted such statement so made out and testified to by the witness in evidence, and allowed the same to" lie read to tiie jury, over the objection and exrcptions of tl:i- appellant, and this ruling of the court is C(jmplaini'd of as an error. This was a long statement of accounts, and the witness who made out the statement was subject to cross-examinatiou. 403 ILL. CAS. EXCUSES FOIl NON-PRKSENTMENT, ETC. [CH. XIII. The appellant had an opportunity to test its correctness, and cross-examine the witness who made out the statement. The appellant had as full and complete an opportunity to discover any error in the statement made by the witness as if he had appeared as a witness and testified from the books without making any written statements. When the entries in books are numerous and comp^cated, it is competent to permit an expert book-keeper, who has examined the books, to give a summary oral statement of their contents and computations made. See The Work of the Advocate, by Elliott, page 217, and authorities there cited. See, also, Von Sachs v. Kretz, 72 N. Y. 548 ; McCormick v. Railroad Co. , 49 N. Y. 315 ; Howard v. McDonough, 77 N. Y. 593. We see no reason why, when huch expert witness who has examined the books and made an abstract of them, testifies as a witness, and oppor- tunity is given for cross-examination in regard to such statement, as in this case, the statement may not be admitted in evidence and read to the jury. We think the abstract of the books was properly admitted, but the original entries made in the books were also in evidence in this case, and no complaint is made that the statement did not correspond with the books, and, whether properly admitted or not, no harm could have resulted to the ap- pellant by reason of the admission of such statement, and there- fore no reason exists for the reversal of the case. Bank v. Adams, 91 Ind. 286 ; Hays v. Morgan, 87 Ind. 231-236. There is a fur- ther question as to the same ruling of the court in refusing to allow the appellant to ask one Spencer a cross-examining ques- tion. We have considered this, and there was no error. There is no error in the record for which the judgment should be re- versed. Judgment affirmed, with costs. Sufficiency of Notice of Dishonor — Promise to Pay After Dishonor Constitutes a Waiver. Hobbs V. Straine, 149 Mass. 212 (21 N. E. 3C5). Morton, C. J. Notice of the dishonor of a note is sufficient to charge an indorser, if it is delivered to him pei-sonally, or is left at his place of residence or of business, or is deposited in the mail, addressed to him at his place of residence or of business, ilie postage being prepaid. Pub. St. c. 77, § 16; Bank v. Shaw, 144 Mass. 421; 11 N. E. Rep. 666; Bank v. Shaw, 142 Mass. 290 ; 7 N. E. Rep. 779. The underlying principle of all the de- lisions upon the subject is that reasonable diligence must be used by the holder in getting notice of the dishonor to the indorser. In the case at bar the evidence tended to show that the plaintiff in due time sent a written notice of the dishonor, addressed to the defendant, to his office, which was his place of business, and, finding no one in, left it there. The precise place in the office where it was left was not fixed with certainty, and 404 CH.XIII.] EXCUSES FOR NON-PKESENTMENT, ETC. ILL. CAS. the court instructed the jury that, if they found that it was left in a consi)icuOus place in the oflSce, it was a suflicient notice. This ruling was correct. The jury might well find that the notice was left in good faith in the tlefeudant's office in such way that he would be likely to see it when he came in. Such a mode of giving the notice would ordinarily be as effectual as if it were sent by mail, through a letter carrier. We think the evidene(> shows a compliance with the rule of law requiring the hokkr to exercise reasonable diligence, and that the notice was sufficient to charge the defendant as iudorser. There being conflicting evidence as to the sufficiency of the notice, the plaintiff at the trial relied upon a waiver by the defendant of any defect in the notice, and introduced evidence tending to show that after the note matured the defendant prom- ised to pay ; he testifying that at the time of the alleged promise he knew that he was released from liability on account of the failure to receive notice. This was evidence of a waiver, and the instruction of the court to the jury that " if the d^^fendant, know- ing all the facts which released him from liability, and knowing or believing himself to be discharged from liability as indorser, promised to pay the note, they would be warranted in finding for the plaintiff," was sufficiently favorable to the defendant. Bank V. Ashworth, 105 Mass. 603 ; Rindge v. Kimball, 124 Mass. 209, Exceptions overruled. 405 CHAPTER XIV. FORGERY AND ALTERATION OF BILLS AND NOTES. Section 149. Forgery defined and explained. 150. Forgery, alteration and spoliation distinguished. 151. The effect of authorized alterations. 152. Presumption as to time of alteration and burden of proof. 153. What are material alterations. 154. What are immaterial, alterations. 155. Rights of bona fide holder of forged or altered bill or note. 156. Recovery of money paid on a forged bill or note. § 149. Forgery defined and explained.— Forgery may be defined as " the act of falsely niakiuor or materially altering, with intent to defraud, any writing, which, if genuine, might be of legal efficacy, or the foundation of a legal liability" (Standard Dictionary). Although the more common kind of forgery is the signing of one's name to a legal instrument, that is otherwise genuine, or the complete execution of such an instrument in another's name, includ- ing the signature; it is just as much a forgery, if one should write over the genuine signature of another what he was not authorized to write, and representing fraudulently a liability as a party to a bill or other legal instrument which does not exist. It is pronounced to be a forgery even where a fraudulent representation is made as to the personality of the individual, who has executed the bill or note; as where two people bear the same name, and the instrument is executed by one, and it is transferred under a misrepresentation that it was executed by the other person of the same name.^ The signature of a fictitious name, where it is made with intent to defraud, has been held to be a forgery.^ 1 Com. V. Foster, 114 Mass. 311 (19 Am. Rep. 353). 2 Schultz V. Astley, 2 Bing. N. C. 544; Rex v. Ballard, 1 Leach, 97; United States v. Turner, 7 Ptt. 132; Brown v. People, 8 Hun, 562; ex parte Hibbs, 26 Fed. Rep. 421; State v. Givens, 5 Ala. 747; Com. v. Costello, 120 Mass. 358. 406 Cir. XIV.] FOKGEKY AND ALTERATION. §150 § 150. Forgery, alteration and spoliation distin- guished. — The intent to defraud is an essential element of forgery ; and where an otherwise genuine bill or note has been altered in any of its material parts, with intent to defraud, it is just as much forgery, as if the original instru- ment had been a counterfeit.^ And these fraudulent alterations not only avoid the bill or note itself, but they also extinguish the debt or obligation, which constitutes the consideration of the instrument."' But while an innocent alteration, if material, will avoid a bill or note, the action on the original consideration can nevertheless be maintained. This is at least the trend of judicial opinion.^ It is, however, true that, as long as no one has suffered any material injury from an innocent alteration, a court of equity jurisdiction has the power to decree a restoration of the instrument to its oriojinal condition, and reinstate the parties to their original rights under it. But the court will never interfere, where the alteration was fraudulent.* An innocent immaterial alteration has no practical eflect » Wheelock v. Freeman, 13 Pick. 1G5 (23 Am. Dec. 674); Belknap v. National Bank of N. A., 100 Mass. S7G (97 Am. Dec. 105); Hamilton v. Hooper, 46 Iowa, 515 (26 Am. Rep. 161); Burwell v. Orr, 84 HI. 465; White V. Continental Nat. Bank, 64 N. Y. 316 (21 Am. Rep. 612). 2 Wheelock v. Freeman, 13 Pick. 1G5 (23 Am. D(C, 674); Meyer v. Hunecke, 55 N. Y. 412; Booth v. Power.s, 56 N. Y. 22; Flanagan v. Nat. Bk. of Dover, 2 N. Y. S. 488; 18 N. Y. St. Rep. 826; Gettysburg N. Bk. v. Chisolra, 169 Pa. St. 564 (32 A. 730); Hurlbnt v. Hall, 39 Neb. 889 (58 N. W. 538); Ballard v. Franklin Ins. Co., 81 Ind. 239; Merrick v. Boury, 4 Ohio St. 70; Cog;?ins v. Stockard, 64 Mis.'^. 301 (1 So. 245); Middaugh V. Eliott, 1 Mo. App. 4(;2. 3 A'kinson v. Hawden, 2 Ad. & El. 628; Angle v. N. W. etc. Ins. Co., 92 U. S. 342; Meyer v. Hunecke, 55 N. Y. 412; Booth v. Powers, 56 N. Y. 22; Hunt v. Gray, Jr , 35 N. J. L. 227 (10 Am. Rep. 232); Harsh v. Klepper, 28 Ohio St. 200; Vogle v. Ripper, 34 111. 100 (85 Am. Dec. 298) ; Clough V. Seay, 49 Iowa, 111; Sullivan v. Rudisill, 63 Iowa, 158; Matte- fion V. Ellsworth, 33 Wis. 488 (14 Am. Rep. 766; Moore v. Hutchinson, 09 Mo. 429; State Sav. Bk. v. Shaffer, 9 Neb. 1 (;U Am. Rep. 394). But t've Bigelow v. Stili>hen, 35 Vt. 521; Toomer v. KuMand, 57 Ala. 379 (29 Am. Rep. 722). ■• Chad wick v. Eastman, 53 Me. 10; Citizens Nat. Bk. v. Richmond, 121 Mass. 110; Kouniz v. Kennedy, 63 Pa. St. 187 (3 Am. Rep. 641); Horst V. Wagner, 43 Iowa, 373 (22 Am. Rep. 255). 407 § 151 FORGERY AND ALTERATION. [CH. XIV. whatever on the bill or note. But it has been held,^ and likewise denied ^ that an immaterial fraudulent alteration will avoid it. Where an alteration is made in the contents of a bill or note by a stranger without the consent or procurement of any party thereto, it is called a spoliation. And in the United States, it is held to have no effect on the liability of the parties, as long as the original terms of the instru- ment can be deciphered, with reasonable certainty.^ § 151. The effect of autliorized alterations. — If the alteration is made with the consent of the parties to a bill or note, it has the effect of making a new contract as a substitute for the original. If the consent of all the partiesis obtained, all of them are, of course, bound by the new con- tract; but if the alteration is made with the approbation of only a part of them, those consenting will be bound, while the others will be discharged from all liability.^ The consent to the alteration need not precede its execu- tion. It may be ratified subsequently by a recognition of the altered bill or note. If, however, the act of recogni- tion is done without knowledge of the alteration, it will 1 Lubbering v. Kohlbrecher, 22 Mo. 598; Kingston Sav. Bk. v. Bosser- man, 52 Mo. App. 269. See Craighead v. McLoney, 99 Pa. St. 211; Johnston v. May, 76 Ind. 293. 2 Moge V. Herndon, 30 Miss. 110; Mt. Morris Bk. v. Lawson, 27 N. Y. S. 272; Reed v. Roark, 14 Tex. 329 (C5 Am. Dec. 127); Humphreys v. Crane, 5 Cal. 173. 3 Ford V. Ford, 17 Pick. 418; Drum v. Drum, 133 Mass. 566; Colson v. Arnot, 57 N. Y. 253 (15 Am. Rep. 496; ; Bigelow v. Stilphen, 35 Vt. 521; Ballard v. Franklin Ins. Co., 81 Ind. 239; Lee v. Alexander, 9 B. Mon. 25 (48 Am. Dec. 412); Union Bk, v. Roberts, 45 "Wis. 373; Lubbering v. Kohlbrecher, 22 Mo. 596; Vogle v. Ripper, 34 111. 100 (85 Am. Dec. 298) ; Hamilton v. Hooper, 46 Iowa, 515 (26 Am. Rep. 161). 4 Warring v. Williams, 8 Pick. 322; Bailey v. Taylor, 11 Conn. 531 (29 Am. Dec. 321); Stahl v. Berger, 10 Serg. & R. 170 (13 Am. Dec. 666); Myers v. Nell, 84 Pa. St. 369; Taddikeu v. Cantrell, 69 N. Y. 597 (25 Am. Rep. 253); Bk. of Ghio Valley v. Lockwood, 13 W. Va. 392 (31 Am. Rep. 768); Morrison v. Smith, 13 Mo. 234 (53 Am. Dec. 145); Overton v. Mathews 35 Ark. 146 (37 Am. Rep. 9); Stewart v. First Nat. Bank, 40 Mich. 348; Grimstead v. Briggs, 4 Iowa, 559. 408 CH. XIV. J FOUGERY AND ALTERATION. § 153 operate as an estoppel, to bind the party acting, only to a bona fide holder.^ § 152. Resumption as to time of alteration and bur- den of proof. — Where the alteration is so well done that it is not readily recognized by an examination of the paper, the burden of proof is on the party alleging the alteration ; and it is presumed that the alteration was made contem- poraneously with the execution of the bill or note.^ Some of the cases hold that the alteration is presumed to have been made at the time of execution of the instrument, whether it is apparent or concealed, throwing the burden of proof in every case on the defendant.'^ Other cases maintain that, where the alteration is apparent, the burden is on the plaintiff to prove that it was made prior to nego- tiation of the bill or note, or that it was made with the consent of the parties, if made subsequently.* § 153. What are material alterations. — Any alteration is material which changes the liability of the parties in any way; and the alteration will avoid the bill or note, whether it is favorable or unfavorable to the party making it; on the ground that any change in the terms of the instrument affects its identity. • Humphreys v. Guillow, 13 N. 11. 385 (38 Am. Dec. 499) ; Wood- worth V. Bank of America, IG Johns. 391 OO Am. Dec. 239); Clute v. Small, 17 Wend. 238; Wellington v. Jackson, 121 Mass. 157; Fraker v. CuUom, 21 Kan. 555; Evans v. Foreman, 60 Mo. 449; Bell v. Machin, 69 Iowa, 408; Goodspeed v. Cutler, 75 111. 534. " Meikel v. State Sav. Bk., 36 Ind. 355; United States v. Linn, 1 How. 104; Odell r. Gallup, 62 Iowa 253 (17 N. W.502); Lowman v. Auberry, 72 111. 619. 3 Dodge V. Haskell, 69 Me. 429; Davis v. Jenney, I Met. 221; Bailey V. Taylor, 11 Conn. 531 (29 Am. Dec. 321); Cochran v. Nebeker, 48 lud. 4G0; Pararaore v. Liudsey, 63 Mo. 63; Wilson v. Harris, 35 Iowa, 507; Corcoran v. Doll, 32 Cal. 82. See Hayden v. Goodnow, 39 Conn. 164. < Wilde V. Armsby, 6 Cush. 314; Ely v. Ely, G Gray 439; Simpson v. Stockhouse, 9 Pa. St. 186 (49 Am. Dec. 554) ; Long v. Mason, 84 N. C. 15; Willetr. Shepard, 34 Mich. 106; White v. Haas, 32 Ala. 430 (70 Am. Dec. 548); Page v. Danaher, 43 Wis. 221; Walters v. Short, 10 111. 252. See Nell v. Case, 25 Kan. 510 (37 Am. Rep. 259), for a full discussion of the contradictory opinions of the courts on this question. 409 § 153 FORGERY AXD ALTERATION. [CH. XIV. The following have been held to be material alterations: 1. Any change in the date of the instrument.^ 2. Any change in the time of payment. ^ 3. In the amount of prin- cipal or rate of interest;^ or in the medium of payment, as whether payable in gold or generally.* 4. Any alteration ill the personality, number and relations of the parties to the bill or note, to the detriment of any of the parties thereto.** 5. Any change whatsoever in the liability of the parties, by the erasure or addition of words; as, for example, tbe 1 Wood V. Steele, 6 Wall. 80; Crawford v. West Side Bank, 100 N. Y. 50 (2 N. E. 881; 53 Am. Rep. 152) ; Stephens v. Graham, 7 Serg. & R. 505 (10 Am. Dec. 485); Newman v. King, 54 Ohio St. 273 (43 N. E. 683); Benedict v. Miner, 58 111. 19; Wyman v. Yeomans, 84 111. 403; Britton v. Dierker, 46 Mo. 591 (2 Am. Rep. 553) ; Overton v. Mathews, 35 Ark. 146 (37 Am. Rep. 9) ; Brown v. Straw, 6 Neb. 536 (29 Am. Rep. 369). But it is held not to be a material alteration to change the date of an indorse- ment. Griffith V. Cox, I Overt. 210. 2 Hervey v. Harvey, 15 Me. 357; Ives v. Farmers' Bank, 2 Allen 236; Stayner v. Joice, 82 Ind. 35; Lester v. Rogers, 18 B. Mon. 537; Bay v. Shrader, 50 Miss. 326; King v. Hunt, 13 Mo. 97; Benjamin v. Delahay, 9 111. 536. 3 McGrath v. Clark, 56 N. Y. 34 (15 Am. Rep. 372); Schwartz v. Op- pold, 74 N. Y. 307; Fay v. Smith, 1 Allen, 477 (79 Am. Dec.752) ; Draper V. Wood, 112 Mass. 315 (17 Am. Rep. 92) ; Craighead v. McLoney, 99 Pa. St. 211; Gettysburg N. Bk. v. Chisolm, 169 Pa. St. 564 (32 A. 730); Derr V. Keough (Iowa), 65 N. W. 339; Franklin L. Ins. Co. v. Courtney, 60 Ind. 134; Aetna Bk. v. Winchester, 43 Conn. 391 ; Farmers' & M. N. Bk. V. Novich (Tex.), 34 S. W. 914; Kilkelly v. Martin, 34 Wis. 525; Little Rock Trust Co. v. Martin, 57 Ark. 277 (21 S. W. 468) ; Iron Mountain Bank v. Murdock, 62 Mo. 70 ; Hurlbut v. Hall, 39 Neb. 889 (58 N. W. 538) . * Angle V. N. W. &c. Ins. Co., 92 U. S. .S30; Church v. Howard, 17 Hun 5; Darwin v. Ripley, 63 N. C. 318; Bogarth v. Breedlove, 39 Tex. 561. But see Bridges v. Winters, 42 Miss. 135 (97 Am. Dec. 443; 2 Am. Rep. 598). 5 Mouson V. Drakely, 40 Conn. 552 (16 Am. Rep. 74) ; Howe v. Tag- gart, 133 Mass. 284; Stoddard v. Penniman, 108 Mass. 366 (11 Am. Rep. 363); York v. Jones, 14 Vroom (42 N. J. L.), 332; Bank of Commerce v. Union Bank, 3 N. Y. 230; Smith v. Weld, 2 Pa. St. 54; Banington v. Bk. of Washington, 14 Serg. & R. 405; Hamilton v. Hooper, 46 Iowa, 515 (26 Am. Rep. 161); Nicholson v. Combs, 90 Ind. 515 (46 Am. Rep, 229); Wal- lace V. Jewell, 21 Ohio St. 163 (8 Am. Rep. 48); Gillett v. Sweat, 6 111. 475; Burlingame v. Brewster, 79 111. 515 (22 Am. Rep. 177); Morrison v. Garth, 78 Mo. 434; Harper v. Stroud, 41 Tex. C36; Haskell v. Champion, 30 Mo. 136. But see Brownell v. Winnie, 29 N. Y. 400 (86 Am. Dec. 314) ; Favorite v. Stidham, 84 Ind, 423. 410 CH, XIV.] FORGEKY AND ALTERATION. § 154 insertion of words of negotiability in the body of the bill or note.^ 6. Alteration in the place of payment, either in inserting, changing or erasing a specific place of payment. ^ In the N. Y. Negotiable Instruments Law, 1897, § 206, a material alteration is declared to be any alteration which changes, 1, the date ; 2, the sum payable, either for prin- cipal or interest; 3, the time or place of payment ; 4, the number or the relations of the parties ; 5, the medium or currency in which payment is to be made. Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect. § 154. What are immaterial alterations? — An altera- tion is immaterial, wiienever it does not change the legal effect of the instrument, as wliere words are added which are implied by law, or where words of no legal importance are stricken out or added. A few examples will be given for the purposes of illustration. 1 Granite Ry. Co. v. Bacon, 15 Pick. 239; Belknap v. Nat. Bk. of N. A., 100 Mass. 376 (07 Am. Doc. 105); Booth v. Powers, 56 N. Y. 22; McCauley v. Gordon, 64 Ga. 221 (37 Am. Rep. 68); Johnson r. Bank of U. S., 2 B. Mon. 310; Weaver v. Bromley, 65 Mich. 212 (31 N. W. 830); Brown v. Straw, 6 Neb. 536 (20 Am. Rep. 369) ; Union Nat Bk. r. Rob- erts, 45 Wis. 373; Croskcy v. Skinner, 44 III. 321 (erasure of a jiuuranty). Ilemmcnway v. Stone, 7 Mass. 58 (5 Am. Dec. 27); Reevt s t\ Pierson, 23 Hun 185 (statement of consideration) ; Woodworth v. Bank of Amer- ica, 16 Johns. 301 (10 Ara. Dec. 230) addition or erasure of memoranda) ; Benedict v. Cowden, 49 N. Y. 396 (10 Am. Rep. 382) (ditto); Wait v. Poraeroy, 20 Mich. 425 (4 Am. Rep. 395) (ditto). 2 Nazro v. Fuller, 24 Wend. 374; Southwark Bink v. Gross, 35 Pa. St. 80; Bank of Ohio Valley v. Lockwood, 13 W. Va.302 (31 Am. Rep. 768); White V. Hass, 32 Ala. 430 (70 Am. Dec. 548); McCoy r. Lockwood, 71 Ind. 319; Townscnd v. Star Wafrou Co., 10 Neb. 615 (35 Am. Rep. 403); Adair v. E-jland, 58 Iowa, 314 (12 N. W. 277). But see Am. Nat. Bk. v. Bangs, 42 Mo. 450 (07 Am. Dec. 340). It must be remembered, however, in this connection, that the dr.iwee, In accepting a bill, has the right to stipulate a specific place of piyment in the same city or town, where none has been provided for by the drawer. Myers v. Standart, 11 Ohio St. 29; Troy City Bk. r. Lanman, 19 N. Y. 477. In the latter case, the drawee is held to have this rifjht, even though some other bank or banking house is designated by the drawer as the place of payment. 411 § 155 FORGERY AND ALTERATION. [CH. XIV. Inasmuch as the cashier of a bank is authorized to make bis bank a party to a bill, note or check, by adding to his own signature the word " cashier; " it is not considered to be a material alteration for any one without authority to add to the signature the name of the bank of which he is cashier. ^ Inasmuch as the marginal figures of the amount of money payable on a note or bill are held not to be a part of such note or bill, any alteration of them is not considered to be so material as to affect the rights of the parties in the instrument.^ So, also, and for the same reason, is it held to be immaterial, if a change is made in the figures in the margin, which denote the number of the bill, note or check, in a particular series.^ Other examples might be added, such as changes in the names of the parties, in order to make the written name conform to the real name of the party. ^ In all of them, the alteration is held to be imma- terial, because the substantial rights and liabilities have not in any wise been thereby affected.^ § 155. Rights of bona fide holder of forged or altered hill or note — Effect of estoppel. — The general rule is that a party to a bill or note, whose liability thereon has been affected by an alteration in its terms and provisions, is not liable, even to a bona fide holder.® And there are cases 1 Folger V. Chase, 18 Pick. 63; Bank of Genesee v. Patchin Bank, 13 N. Y. 309. Seean«e, §44. 2 Smith V. Smith, 1 R. I. 398 (53 Am. Dec. 652) ; Houghton «. Francis, 29 111. 244. But see Garrard v. Lewis, L. R. 10 Q. B. 30. See ante, §21. 3 Com. V. Indust. Sav. Bk., 98 Mass. 12; Birdsell v. Russell, 29 N. Y. 220; City of Elizabeth v. Force, 29 N. J. Eq. (2 Stew.) 587; State v. Cobb, 64 Ala. 127; Suffell v. Bank of England, L. R. 7 Q. B. 270. * Manufacturers & M. Bk. v. Follett, 11 R. I. 92 (23 Am. Rep. 418); Hayes r. Matthews, 63 Ind. 412 (30 Am. Rep. 226); Burlingame v. Brew- ster, 79 111. 515 (22 Am, Rep. 177); Ryan v. First Nat. Bank, 148 111. 349 (35 N. E. 1120); Blair v. Bank of Tennessee, 11 Humph. 84. 5 See Cushing v. Field, 70 Me. 50 (35 Am. Rep. 293); Leonard v. Phillips, 39 Mich. 182 (33 Am. Rep. 370); Ryan v. First Nat. Bk., 148 111. 349 (35 N. E. 1120) ; Brock v. Brock, 29 111. App. 334 (interest from maturit}^ ; Holland v. Hatch, 15 Ohio St. 464. 6 Roach V. Woodall, 91 Tenn. 206 (18 S. W. 407); Newman v. King, 412 CH. XIV.] FORGERY AND ALTERATION. § 155 which hold that such ii party is not in any case liable to any one on the altered bill or note, where the alteration has been made without his consent.^ But the weight of judicial opinion is cast in favor of the proposition that, if the alteration is so successful that it cannot be readily de- tected, and it has been made possible by the negligence of the party executing the instrument, in leaving blank spaces uncanceled, a bona fide holder can recover on the altered instrument against the partv wliose negligence is thus established. But negligence on the part of the maker or drawer, and successful concealment of the fact of altera- tion, must co-exist. 2 It has also been held to be culpable negligence, render- ing one liable to a bona fide holder on an altered instru- ment, to write the whole or a part of the instrument with a pencil, where the alteration had been made by an erasure of the part which had been so written. "^ In previous sections^ it has been explained that the acceptor of a bill is estopped from denying the genuineness of the signature of the drawer, but not of the contents of the bill;^ that the traus- 54 Ohio St. 273 (43 N. E. 683) ; Gettysburg N. Bk. v. Chisolm, 169 Pa. St. 564 (32 A. 730); Derr v. Keough (Iowa), 65 N. W. 339; Middaugh v. EllioU, 1 Mo. App. 462; Farmers' & M. N. Bk. v. Novich (Tex.), 34 S. W. 914. 1 Greenfield Sav. Bk. v, Stowell, 123 Mass. 196; (25 Am. Rep. 67); Holmes V. Trumper, 22 Mich. 427 (7 Am. Rep. 601); Washington Sav. Bk. V. Ekey, 51 Mo. 272. See Kuoxville Nat. Bk. v. Clark, 51 Iowa, 264; (33 Am. Rep. 129; 1 N. W.491). 2 Angle V. N. W. &c. Ins. Co., 92 U. S. 530; Scholfleld v. Londes- borough, 2 Q. B. 660; Rcdlich v. Doll, 54 N. Y. 237 (13 Am. Rep. 573) ; Brown v. Reed, 79 Pa. St. 370 (21 Am. Rep. 75); Gettysburg N. Bk. v. Chisolm, 169 Pa. St. 564 (32 A. 730) ; Yocum v. Smith, 63 111. 321 (14 Am. Rep. 120) ; Blakey v. Johnson, 13 Bush, 197 (26 Am. Rep. 254) ; Casou r. Grant Co. Dep. Bk. (Ky.), 31 S. W. 40; Rainbolt v. Eddy, 34 Iowa, 440 (11 Am. Rep. 152); Derr v. Keough (Iowa), 05 N. W. 339; Paramore v. Lindsley, 63 Mo. 63; Winter v. Pool, 104 Ala. 580 (16 So. 543); Vischer V. Webster, 8 Cal. 109. 3 Ilervey w. Smith, 55 111. 224; Seibel v. Vaughan, 69 111. 257. See Zimmerman u. Rote, 75 Pa. St. 188; Elliott v. Leviugs, 54 111. 213, where a material clause is so negligently affixed as that it may be easily removed. * See ante, § 72. 413 § 156 FORGERY AND ALTERATION. [CH. XIV. ferier and inclorser, alike, warrant the genuineness and validity of every part of the instrument which has been transferred or indorsed ; ^ and that any party to a bill or note, whether a primary or secondary obligor, may be estopped from setting up the defense of forgery or inva- lidity from any cause, as against a hova fide holder, who has taken the paper in reliance upon the assurance of such a party, that it is free from the taint of suspected illegality or invalidity .2 By a reference to these preceding sections, it becomes unnecessary to do more in the present connec- tion th:in to refer the student to the cases, in which forgery was the particular ground of defense to an action on the instrument by a bona fide holder, and which was success- fully set aside by the claim of an estoppel. ^ § 156. Recovery of money paid on a forged bill or note. — In conformity with the general rule of law, that money paid under a mistake of fact may be recovered back, any party to a forged bill or note may recover back from the party receiving it the money which has been paid under the mistaken belief in its genuineness, providing there has been no culpable delay in giving notice of the discovery of foro-ery. The general rule in this country requires that notice must be given, and demand made, within a reasona- ble time after the discovery of the forgery or alteration. This rule applies to checks, as wall as to bills and notes, and whether there are any indorsers or not.* Where the 1 §§ 76, 84. 2 § 100. s Leather Man. Nat. Bank v. Morgan, 117 U. S. 96; "Wellington v. Jackson, 121 Mass. 157; Wilson v. Law, 112 N. Y. 536 (20 N. E. 399); Shisler v. Van Djke, 92 Pa. St. 447 (37 Am. Rep. 702); West Phila. N. Bk. V. Field, 143 Pa. St. 473 (22 A. 829); Casco Bk. v. Keene, 53 Me. 103; VVorkmau v. Wright, 33 Ohio St. 405 (31 Am. Rep. 646); Rudd v. Matthews, 79 Ky. 479 (42 Am. Rep. 231); Dow v. Spenny, 29 Mo. 386; Woodruff V. Munroe, 33 Md. 146. * Gloucester Bk. v. Salem Bk., 17 Mass. 33; "Welch v. Goodwin, 123 Mass. 71 (25 Am. Rep. 13); United States v. Onondaga Co. Sav. Bk., 39 Fed. 259; Allen v. Fourth Nat. Bk., 59 N. Y. 12.; Welsh v. German Am. Bk., 73 N. Y. 424 (29 Am. Rep. 175); Ellis v. Ohio L. Ins. Co., 4 Ohio St. 628; Stratton v. McMakiu, 81 Ky. 641 (renewal note a forgery as to 414 CH. XIV.] FORGERY AND ALTERATION. ILL. CAS. instrument is a complete forgery in every part, it need not be returned with tlie demand for repayment of the money, which has been paid on it; but if there are some genuine signatures on it, or in the case of alteration of the body of the instrument, it must be returned, so that the transferrer or indorser, who is to make the payment of the considera- tion, may have the means of enforcing whatever rights of action he may have on the instrument against others.^ And if the holder is in possession of any collateral security, he can be required to surrender it, or account for its dis- appearance. ^ ILLUSTRATIVE CASES. Little Rock Trust Co. v. Martin, 67 Ark. 277 (21 S. W. 468). Ryan v. Fir&t Nat. Bank of Springfield (35 N. E. 1120). Citizen's Nat. Bank v. Importers' and Traders' Bank, 119 N. Y. 195 (23 N. E. 540). Inserting a Rate of Interest, where None Had Been Agreed Upon, is a Material Alteration AVhich Avoids tbe Note. Little Rock Trust Co. v. Martin, 57 Ark. 277 (21 S. W. 468). Battle, J. This was an action on a note in the following words and figures : — " Saline Co., Ark., January 17th, 18 — . On or before the first day of November, 1889, I promise to pay L. Cahill & Co. or bearer seventy dollars, at Bank of Little Rock; value received. If paid at maturity, interest at eiglit per cent from November 1, 1889 ; but, if not paid when due, interest at per cent per annum from date until paid. No promise or contract outside of this note will be recognized. [Signed] S. R. Martin, J. W. Huey." The defense was, the note had been materially altered since it was executed. The second sentence in the note, as executed, one party suit on original note allowed); Tliird Nat. Bank. v. Allen, 69 Mo. 310; Baldwin v. Tlirelkeld, 8 Ind. App. 312 (34 N. E. 851) ; Fraker v. Little, 24 Kan. 598 (30 Am. Rep. 2G2) ; City Bank v. First Nat. Bank, 45 Tex. 203. • Brewster v. Burnett, 125 Mass. 68 (28 Am. Rep. 203); Smith v. McNair, 19 Kan. 330 (27 Am. Rep. 117). See United States v. Onondaga Co. Sav. Bk., 39 Fed. 259. 2 First Nat. Bk., v. Wolff, 79 Cal. C9 (21 P. 551). 415 ILL. CAS. FORGERY AND ALTERATION. [CH. XIV. read as follows: "If paid at maturity, interest at per cent from November 1, 1889 ; but, if not paid when due, inter- est at per cent per annum from date until paid." It was altered to read: " If paid at maturity, interest at eight per cent from November 1, 1889; but, if not paid when due, interest at per cent per annum from date until paid." The defendants recovered judgment, and the plaintiff appealed. Appellant insists that the alteration of the note had no legal effect, and was therefore immaterial. It is said in its abstract that this was the only issue. Was the legal effect of the note affected by the alteration? Allowing days of grace, the note was due on the 4th of Novem- ber, 1889. If paid at maturity, the note, as executed, bore no interest, but, as altered, 8 per cent per annum from the 1st of November, 1889, until the 4th of the same month. Wheeless v. Williams, 62 Miss. 369; Bank v. Wager, 2 Cow. 712. The dif- ference is slight, but the maxim, ^ de minimis non curat lex," is not applicable to cases like this. The alteration made the note void. Craighead v. McLoney (Pa.), 14 Cent. Law J. 192; Stephens v. Graham, 7 Serg. & R. 505 ; Kennedy v. Bank, 18 Pa. St. 347. Affirmed. Immaterial Alteration does not Constitute a Forgery, and does not Invalidate tlie Instrument. Ripley v. First Nat. Bank of Springfield, 148 111. 349 (36 N. E. 1120). Wilkin, J. This is an action of assumpsit by appellee against appellants, begun in the circuit court of Sangamon county. It has been tried three times in that court, and as often heard in the appellate court of the third district. The last judgment of the circuit court was for plaintiff for the amount of the note sued on, which has been affirmed by the appellate court. On August 30, 1884, appellants J. F. Ryan and W. J. Reilly contracted with one P. P. O'Donnell for the purchase of certain chattel property, agreeing to pay him therefor $4,200. They executed their prom- missory note of that date for the sum, payable to the order of " The First National Bank of Springfield" (appellee), due 90 days after date, and obtained the signatures tliereto of Maggie Ryan and Mary Reilly as sureties. The evidence tends to show, and for the purposes of this opinion the fact is accepted as settled, that it was understood by the makers of this note and O'Donnell that by delivering it to the bank the money would be realized with which to pay for the goods purchased. After it was signed by all the makers, J. F. Ryan and W. J. Reilly took it, and shortly afterwards handed it to O'Donnell. The three then went to the bank, expecting to discount it, and get the cash. The cashier, however, declined to take it without the indorsement of O'Donnell, who, after some hesitancy, consented to do so. Instead of signing his name upon the back of the paper, he wrote 416 CH. XIV.] FORGERY AND ALTERATION. ILL. CAS. it at the foot of the note, after the signatures of the makers. The bank then discounted it to tlic amount of interest it called for for the 90 days, $8G.40, O'Donnell insistins: that he was to have the full amount of S4,200. Ryan and Reilly went out and got the $80.40, and paid it to the bank. It thereupon placed to the credit of O'Donnell $4,200 and the parties left, Ryan and Reilly immediately taking ])ossession of the goods purchased. In a few minutes O'Donnell returned to the bank, and told the cashier that his name should have been signed on the back of the note, that he did not want to be a party to it as a maker. The cashier told him it made no difference as to his liability, but he insisted ui)on having it changed, and the cashier finally erased his signature at the foot of the note, wrote his name before the words, " The First National Bank of Springfield," and placed the bank's guaranty stamp on the back, which O'Donnell signed. It thus ai)[)ears that, as originally written, the note was payable to appellee, signed by appellants. As first changed, it appeared to be payable to appellee, signed by appellants and O'Donnell, but it was in fact pa} able to appellee, signed by appellants, and indorsed by O'Donnell. As last changed it was made payable to O'Donnell, but simultaneously indorsed and guarantied by him to appellee. On each of the trials below the defense relied upon was that the note had been so altered after its execution, without the consent of the makers, as to discharge tliem from all liability upon it, and the only substantial question before us for decision is whether or not, on the facts above stated, that defense was made out. The last tiial was upon a declaration containing a special count, describing the note as originally made, and the common counts. The note was offered in evidence as finally changed, and the defendants objected. The objection was overruled, and this appellants insist was error. The execution of the note was proved, and it is clear that, if it was not rendered invalid hy alterations, it was admissible under the common counts. Box- berger v. Scott, 88 111. 477. Recurring, tlien, to the principal question, it seems to be well settled that, while the general rule is that the unauthorized alteration of a contract by a party to it renders it void, the rule has been so far relaxed, at least in this country, that such an alteration, evin though made by a party to the contract, will not destroy its validity, unless the alteration is found to be material. 2 Pars. Cont. 720. As expressed by Mr. Daniel in his work on Negotiable Instruments, Vol. 2, p. 359): Not eveiy change in a bill or note amounts to an alteration. If the legal effect be not changed, the instrument is not altered, although some change may have been made in its appearance, either by the addition of words, which the law would imply, or by striking out words t)f no legal significance." This court said in Vogel V. Ripper, 34 111. lOG : "The effect of an alteration in a written instrument depends upon its nature, the person by whom, and the intention with which it wa3 made. If neither 27 417 ILL. CAS. FORGERY AND ALTERATION. [CH. XIV. the rights or interest, duties or obligations of either of the parties are in any manner changed, an alteration may be con- sidered as immaterial," The controlling question, then, in this case is, were the changes made in the note sued upon, or either of thorn, material, within the meaning of the law? As shown by the authorities already cited, a change, to be material, must in some way affect the legal rights of the parties as they were expressed before the change was made. Daniel says, citing Hol- land V. Hatch, 15 Ohio St. 464: " And in no case is a change in the phraseology of the instrument material when it does not essentially change its legal effect." See, also, Pars. Bills & N. 560. It is also competent, in determining whether a change has materially affected the rights of the parties, to take into consid- eration tbeir intention when the agreement was executed. Thus the date of a note may be changed so as to make it correspond with the intention of the parties without affecting its validity. Duker v. Franz, 7 Bush 273 ; Hervey v. Harvey, 15 Me. 357 ; Pars. Bills & N. 569, 570. In Ames v. Colburn, 11 Gray, 390, Metcalf, J., said: "The altpration of the date of the note was made by tlie promisee, without the knowledge or express consent of the promisor, but, as the arbitrator has found that it was made without any fraudulent intention, and merely to correct a mistake, and make the note such as both parties intended it should be, and understood it was, we are of opinion, upon the authorities, that the note was not vacated by the altera- tion, and the plaintiff is entitled to judgment on the award." In Derby v. Thrall, 44 Vt. 413, the defendant was surety on a note payable to the plaintiff. Through a mistake the plaintiff's given name was wrongly written in the body of the note, and he, after it was delivered to him, with the consent of the principal maker, but without the knowledge or consent of the defendant, changed the name of the payee so as to correct the mistake, an*! it was held the alteration was not material in the sense of invalidating the instrument. As originally written it was payable to Franklin Derby. By the change it was made payable to Francis E. Derby. The court said: "The change made no alteration in the liability or obligation of the maker. There was no change in the party to whom the obliga- tion was assumed. The only effect of the alteration was to cor- rectly describe the party to whom the promise was in fact under- standingly made." The reasoning applies with full force to this case. It is not denied that it was the intention of appellants, when they executed the note, to obligate themselves to pay " to the order of ' The First National Bank of Springfield, Illinois.' " That was the language of their contract. That they are being called upon by this action to pay to a different person or company is not pretended. The change of the payee and the indorsement and guaranty, had, therefore, no other effect than to carry out the intention of the parties when they signed the note. But, aside from the question of intention, we are unable to see 418 CH. XIV.] FORGERY AND ALTERATION. ILL. CAS. how the legal liability of the makers was changed. It is too clear for argument that the placing of the name of O'Donnell at the foot of the note was, in the light of the attending facts, no change whatever. lie was requested to indorse the note, and he signed his name for that purpose, and no other. While the word " indorse," means a writing on the back, it can always be shown that a signature on the face of an instrument was placed there n(jt as a maker, but for the purpose of binding the party as in- dorser only. Herring v. Woodhull, 29 111. 92. The legal effect, then, of O'Donnell signing his name on the face of the paper as indorser was precisely the same as though he had signed it on the back, and no one could pretend that the latter would have amounted to an alteration of the instrument. If he had signed it upon the back in the first place, not being the payee, the bank could have written over his signature just such a guaranty as now appears over it, and the rights of all the parlies wouhl have been just the same as the}' now are. A third party indorsing a note becomes liable as a guarantor. Camden v. McKoj', 3 Scam. 437 ; Boynton v. Pierce, 79 III. 145. Cie:irly such an indorse- ment would have been legitimate, and in no sense an altera- tion. It only remains, therefore, to be determined whether making the note payable to O'Donnell instead of the bank, and at the same time assigning it back to it with tiie guaiaii'y, changed "the rights or interests, duties or oltligations of either of the parlies." Was tlie legal effect of the obligation, as between the bank and the makers, thereby essentially changed ? As originally made, it would have been the duty of the makers to pay the bank $4,200 at the expiration of 90 days. How can it be said that that duty was either enlarged or dirainislu d b}'- the change? The rights and duties of the bank, as between it and the makers, were precisely tlie same after as before the change. True, it bad also the guaranty of O'Donnell, but that it had a right to obtain without reference to the change made in the payee. His guaranty neither enlarged nor diminished the rights of the banks against ap[)ollaiits. Counsel say O'Donnell becanio the indorser, an I not the guarantor of the note ; that, being only an indorser, llie bardi was re(iuirKl to lake jiroinpt action to enforce payment from the makers, in order to hold him liaiile, and in this way they say the makers were deprived of " the right to indulge the pre- sumption that the note would be carried if desired." The riizht would be a most precarious one even on the position assumed, but the complete answer to the arjuim ntis the fact that by the express terms of the indorsement O'Domu'll became a guarantor, and not a mere indorser. The language; of the indoiscmeiit is: " For value received, I hereby guaranty the payment of the within note at maturity," etc. Cases are cited in wiiichit was held that changing name of the payee in a pri missory note was a material alteration. With those cases we find n) fault whatever. They were decided upon a slate of facts which showed that the change would or 4iy ILL. CAS. FORGERY AND ALTERATION. [CH. XIV. might have resulted in imposing other duties and obligations upon the parties. It seems to be thought that the fact that two of the makers of this note signed it as securities should affect the decision of the case. Wedonottbiukso. On this record, if the change amounted in law to a material alteration of the note, all the makers were discharged; if material, the obligation of the sureties is in no way changed. Whatever may be said as to the propriety of the conduct of the cashier of the bank, when tested by the rules of business, it clearly appearing tbat no wrong was intended, and there being nothing in the record to show that appellants would have been or could have been injured by that conduct, we are of the opinion that the validity of the note was not destroyed. The rulings of the circuit court as to the competency of evi- dence and in giving and refusing instructions were in conformity with this view, and to follow counsel in their argument on that branch of the case would be but to repeat what we have already said. The judgment of the appellate court will be aflflrmed. Liiability of Drawee Bank on Check which has been Paid on Forged Indorsements. Citizens' Nat. Bank v. Importers' and Traders' Bank, 119 N Y. 195 (23 N. E. 540). Appeal from supreme court, general term, first department. This action was commenced by the plaintiff, a bank in the State of Iowa, to recover against the defendant, a bank in New York city, on the ground of the non-paj'ment of certain drafts or bills of exchange which plaintiff had drawn upon the defendant in favor and to the order of Wadsworth & Co. The complaint alleges, in 10 counts, the making and delivery of the drafts, their indorse- ment by the payees, a presentation and demand for payment, the defendant's refusal, and its protest for non-payment thereof; that at the time of defendant's refusal to pay the plaintiff had suffi- cient funds on deposit with defendant wherewith to pay the drafts; and that by reason of the non-payment the plaintiff has been compelled to pay the amount of the drafts, and to take them up. The form of the drafts was as follows, viz. : "$3,269.65. State of Iowa. No. 232,245. The Citizens' National Bank of Davenport. Davenport, April 7, 1884. Pay this first of ex- change, second unpaid, to the order of W. C. Wadsworth & Co., thirty-two hui)dred sixty-nine 65-100 dollars, in current funds. E. S. Carl, Cashier. To Importers' and Traders' National Bank, New York." The defense set up in tbe answer was the payment of the described paper to the Fourth National Bank, as the holder thereof through various indorsements. The answer admitted the possession by defendant of sufficient deposits from the plaintiff to 420 CH. XIV.] FORGERY AND ALTERATION. ILL. CAS pay all of the paper. Upon the trial these facts were developed : W. «&; Co. bought these drafts from the plaintiff bank in order to remit to their creditors in payment of sundry accounts, and, having appro- priately indorsed tbem, delivered them to their bookkeeper, to be sent off. He, however, erased the indorsements, and forged others, and used the paper for his own purposes. It thereby came into other hands, and through theFourih National Bank was pre- sented to and paid by the defendant. Against the plaintiff's proofs establishing the forgeries, through which the paper was diverted from the uses ordered by W. & Co., the defendant offered nothing in disproof. After the forgeries were discovered, and upon the return to the plaintiff of the drafts from the defend- ant, W. & Co. demanded and obtained them back from the plaintiff, and indorsed tliem to one W. for collection. He was refused payment of them by the defendant on their presentation ; the defendant's cashier placing the refusal on the ground of liieir previous payment. W. then returned them to the payees, "W. & Co. The plaintiff repaid to W. & Co. the moneys wherewith the drafts had been purchased by them, and then commenced this action. Gray., J. (after stating the facts as above). The form of the complaint is, perhaps, technically open to a criticism that it seems to ground the action upon the drafts themselves, and therefore makes it one to recover plaintiff's deposits. Such a cause of action has not accrued to the plaintiff at all, upon the facts in this record. The cause of action winch is stated to have accrued to plaintiff was for the refusal of the defendant to honor the plaintiff's drafts upon it. The contract between the two banks, as implied by law, was that the amount of funds standing to the credit of tiie ])lain- tiff })ank on the defendant's books should bo held and jiaid out upon and according to the plaintiff's ciiecks or order; and a failure to obey an order for tiicir payment was a breach of the defendant's duty and contract, for whicii it is legally liable, either in tort or upon tlie contract. In this case the breach ^of contract occurred upon the refusal to pay the plaintiff's drafts upon its funds to the order of the payees named, and a cause of action then arose in plaintiff's favor. But tbia criticism upon the form of the complaint is not serious in its results ; for the pleading may be upheld, and the action maintained as one simply for tlie breach of the defend- ant's contract to pay the drafts of the plaintiff. Code Civil Proc, § 481, requires that a complaint shall contain a plain and woncise statement of the facts constituting the cause of action ; and that requisite is met here sulUciently. The pleading, after describing the drafts, and stating the procccdincs up to protest for non-payment, alleges " that at the time said defendant so neglecle(l and refused to pa^', * * * plaintiff had sullicient money or funds on deposit with the defendant to its credit, and subject to its draft or order, wherewith to pay, * » * and that by reason ot the non-payment the plaintiff has been 421 ' ILL. CAS. FORGERY AND ALTERATION. [CH. XIV. compelled to pay, and has paid, the amount," etc. That is a plain statement of the facts, from which, as a legal conclusion, the plaintiff's legal right to recover is deducible, and the defend- ant could in nowise lie misled. This seems especially true; for by its answer the defendant admits that it was indebted to the plaintiff for moneys theretofore deposited sulijcct to its draft, check, or order in more tlian a sufficient sum to pay all the drafts ; and it relies, to defeat the action, upon the defense of payment only. As to the cause of action, I tliink it clearly one which did accrue to, and became enforceable b}', the plaintiff. In the first place, we must rcgnrd the paper as never having been i)aid by defendant to the order of the plaintiff ; for the rule is well and long established that a forged indorsement does not pass a title to commercial paper, negotiable only by indorsement; and pa3^ment by the drawee, although in good faith, of a draft so affected, is no payment at all, as to the true owner. Graves v. Bank, 17 N. Y. 205. It was the defendant's business to see to it that its depositor's moneys were expended according to its directions; and every ex- penditure was at the defendant's risk of the direction being valid, and the indorsement conveying title to the holder genuine. Corn Exchange Bank v. Nassau Bank, 91 N. Y. 74, 81. The defendant made no attempt to disprove tlie plaintiff's evi- dence as to the forged indorsements of the payees' names and orders, and the forgeries must be taken as proved. Forgeries may consist, in the legal sense, of any fraudulent alteration of paper by which another may be defrauded. Chit. Bills, 781. So we have no payment by the defendant of these drafts proved; and the question becomes solely one upon its objection to the right of the plaintiff to maintain this action for non-payment by the de- fendant, to third persons, of the drafts. Its counsel says the proper remedy was to sue for the deposits. That is not so. Here the cause of action is the breach of the implied and con- cealed contract to pay out the plaintiff's funds according to its drafts and order. The remedy was to sue for the breach, and to recover against the defendant in an amount equal to the amount of the plaintiff's drafts which were refused payment. That the plaintiff repaid to W. & Co. the moneys they had ))aid to it to obtain these drafts, and thereby reacquired the paper, is wholly immaterial as long as the action is not upon the drafts themselves. If the plaintiff was suing upon this paper through a derivative title from W. & Co., it would be a very different question indeed. But the payment back of the moneys to W. & Co. established the damage, and its extent, to which the defendant's act subjected the plaintiff. The acquisition thereby, and the holding and exhi- bition, of the dishonored drafts, are evidences of the facts consti- uting the cause of action. In recent cases this court has passid upon similar questions as to the rights of drawers of checks, to which we may in fact liken this paper. In Bank of British N. A. v. Merchants' Nat. Bank, 1 N. Y. Ill, the case shows the payment 422 CH. XIV.] rOKGEKY AND ALTERATION. ILL. CAS. by the defendant bank of a check given b3' the plaintiff bank to H., and made payable to hor order. Her indorsement was forged, and the money collected by another person. When the facts of the forgery and of the payment weie discovered, the action was com- menced. It is true the only defcLse was the statute of limita- tions ; but Earl, J., in his opinion, which wos concurred in by all the judges, said : " When the defendant paid the check upon the forged indorsement, it paid its own mone}', and discharged no part of its indebtedness to the plaintiff. * * * The plaintiff lost none of its rights by receiving, under a mistake as to the facts, the check as one properly paid and chuiircd to its account by the defendant." But later, in the case of Viets v. Bank, 101 N. Y. 563 ; 5 N. E. Rep. 457, this rule was laid down, that " the refusal to pay on presentation of the check, whicli presentation is equivalent to a demand of pajanent, gives to the drawee a right of action, in case he has funds in the bank to meet the check, and the refusal to pay is without his authoiity." This doctrine, I find, has the distinct support of a decision of the king's bench in the case of Marzetti v. Williams, 1 Barn. & Adol. 415. That was an action by the drawer of a check against his bankers for failing to pay it to the payees named tiierein on presentation. The dishonor was tlin ugh some inadvertence of the bankers; and, as matter of fact, the check, being presented the next day, was then paid. Lord Tenterden held that the action was maintainable as one founded on the bankers' implied contract with his cu-tomer that he will pa}' checks drawn by him, provided he has moneys of tlie customer, and a breach of that contract was created when the defendants would not pay the check. Nominal damages were awarded the plamtiff in tiiat case, though he might not have sustained a damage in fact. Justices Parke, Taunton, and Patterson agreed with Lord Tenterden, holding that it was immaterial whether the action was, in form, tort or assumpsit. The rule is well supported in principle as by the authorities, and governs this case. The damage to the plaintiff here was not merely nominal, for the dishonor of its drafts, but actual, for the amount presented by them, and which the |)laintiff had to make good to the payees. There is but one other question which I think calls for further consideration, and that is as to the exclusion of certain evidence whicli the di fendant sought to elicit from the witness Wadsworth. By a question to that witness, who was oiic of the i)ayees of the drafts, defendant endeavored to prove that when the plaintiff paid back to Wadsworth & Co, the moneys for the drafts which had been dishonored they had settled with their bookkeeper, and for this indebtedness to them, ir.cluding the appropriation by him of these drafts, had received certain property. In support of their right to make this proof, they argued that if W. & Co. had made a settlement with their bookkeeper they were not in any condition to demand back the drafts which had been returned to the plaintiff by the defendant as paid, and 423 ILL. CAS. FORGERY AND ALTERATION. [CH. XIV. if plaintiff redelivered the drafts to them, under such a state of facts, it acted in its own wrong, and the defendant would not be liable. Without discussing the features of such a case, it is suflflcient to say that there are two good reasons for the exclusion of the evidence. In the first place, no such defense was set up by the answer, nor did that pleading contain any allegation which would raise any other issue than the issue of payment. In the next place, the question, if answered according to its tenor, would not elicit any proof that W. & Co. had been paid. It called for the witness' testimony as to whetlier his firm did not charge the book-keeper with the drafts, and then take from him various kinds of property " as security for this entire indebted- ness, consisting of tlicse checks in part; and did they not receive that property? and did they not collect something from it? " etc. But that they may have received some securities for his indebted- ness would not establish the fact of a payment and extinguish- ment of any claim based on the purchase of the drafts which were dishonored. I think the action was rightly disposed of below ; and the judgment appealed from should be aflSrmed, with costs. All concur. 424 CHAPTER XV. THE RIGHTS AND LIABILITIES OF SURETIES AND GUAR- ANTORS. Section 157. Sureties and guarantors distinguished. 158. Form and requisites of a guaranty. 159. Guaranty as appurtenant to a bill or note. 160. Demand of principal debtor and notice of default, when necessary. 161. Concealed sureties as accommodation parties — Nature of their liability — Admissibility of parol evidence to prove real character. 162. What will discharge guarantors and sureties — Surrender of securities and extension of time of payment. 163. Remedies of surety and guarantor — ContriDution between co-sureties. § 157. Sureties and guarantors distinguished. — The surety and guaraDtor both promise to answer for the debt of another; but their characters, and therefore their rights, are different, on account of the different relations they bear to the other parties, and to the original contract. A guarantor is one who, by independent agreement or con- tract, promises to answer for the del^t, default or miscar- riage of another, it matters not what may be the character of the contract or obligation, which is guaranteed. There may be a guaranty, strictly so-called, of a bill or note, as well as of any other executory contract. But, while it may be possible for one, in the strict sense of the teim, to be- come a surety of any kind of contract, it is customary to confine the employment of the name to those who guarantee the payment of a bill, note, or other negotiable instrument, by becoming a regular party to the paper, whether as drawer or acceptor of a bill, the joint maker of a note or indorser of either. The surety's character as a guarantor is, so far as the holder of the bill or note is concerned, merged and lost in his character as a regular party to the 4i'5 § 158 SURETIES AND GUARANTORS. [CH. XV. instrument. That is, he is either joint-maker of a note, drawer or acceptor of a bill, or indorser ; and his rights, except as to the right of subrogation to collateral secur- ities, held by the holder of the bill or note, are the same, as if he had not become a party to the instrument for the accommodation of the real debtor. All sureties are accom- modation parties.^ But a guarantor is never a regular party to a bill or note. His obligation rests upon a separate collateral agreement. And the character of his obligation is not necessarily the same as that of a surety, although they both promise to pay the same debt of another. ^ § 158. Forms and requisites of a guaranty. — It is not required that the guaranty shall assume any particular form. It may be written on a separate piece of paper, or on or across the bill or note, whose payment is guaranteed. The guaranty may be absolute, or conditional upon the happening of some other contingency than the default of the principal debtor.^ It may refer to past, present or future indebtedness, and it may be limited or unlimited in respect to the amount of the debt and the time of contract- 1 Bank of U. S. v. Hatch, 6 Pet. 250; Wallace v. McConnell, 13 Pet. 13G; Sayles v. Sims, 73 N. Y. 551; Benedict v. Olson, 37 Minn. 431 (35 N. W. 10); Raymond v. McNeal, 36 Kan. 471 (13 P. 814); National Pem- berton Bank v. Lougee, 108 Mass. 371 (11 Am. Rep. 367) ; Arents v. Com- monwealtii, 18 Gratt. 750; Schmidt v. Archer, 113 Ind. 365 (14N. E. 543; Blair v. Bank of Tennessee, 11 Humph. 83; Priest v. Watson, 7 Mo. App. 578; 75 Mo. 310 (42 Am. Rep. 409). It must, however, be remembered that there is a difference between a surety and a regular party to a bill or note, in that a surety becomes a regular party for the accommodation of another, and to lend his credit to the paper. See Trimble v. Thorne, 16 Johns. 152 (8 Am. Dec. 302) ; Bcardsley v. Warner, 8 Wend. 613; Pollard v. Huff, 44 Neb. 892 (63 N. W. 58). 2 It should be observed that guaranties will be discussed in these pages only so far as such discussion is necessary to explain the guaranties of bills and notes. 3 Lanusse v. Barker, 3 Wheat. 101 ; Moakeley v. Riggs, 19 Johns. 69 (10 Am. Dec. 196); Curtis v. Smallman, 14 Wend. 231; Bishop v. Rowe, 71 Me. 263; Dickerson v. Derrickson, 39 111. 574; Allen v. Harrah, 30 Iowa, 363; Johnston v. Mills, 25 Tcx. 704. 426 CH. XV.] SURETIES AND GUARANTORS. § 158 ing the debt, as well as to the number of debts whose pay- ment is to be assured. Generally, where the singular number is employed in describing the debt to be guaran- teed, as where one guarantees *' any sum " not exceeding a certain amount, the guaranty does not cover more than one debt. But if the i)lural is employed, " any sum or sums," the guaranty will include all the debts which are contracted by the party guaranteed, as long as their aggre- gate amount does not exceed the limit imposed by the guaranty.^ Like all other contracts, a consideration must support a guaranty, in order that it may be enforced. If the guar- anty is given contemi)oraneous1y with, or antecedent to, the negotiation of the bill or note which is guaranteed, the consideration of the bill or note will likewise support the guaranty, the consideration having been given in reliance upon the guaranty and the original promise.^ But if the guaranty is given subsequent to the negotiation of the bill or note, there must be a fresh and independent considera- tion for such guaranty, unless the guaranty has been given subsequently in performance of a contemporaneous agree- ment to furnisji it.^ Another requirement to the validity of a guaranty is that it shall be in writing, signed by the party to be charged. 1 Douslass V. Reynolds, 7 Pet. 113; Lee v. Dick, 10 Pet. 482; Jordanu. Dobbins, 122 Mass. 1G8 (23 Am. Rep. 305); Gates v. McKee, 13 N. Y. 232 (64 Am. Dec. -545) ; Lockwood v. Crawford, 18 Conn. 3G1 ; Cremer v. Hig- ginson, 1 Mason, 323; Greer u. Bush, 57 Miss. 575: Ranger?;. Sergeant, 36 Tex. 26. 2 Colburn v. Averill, 30 Me. 310 (50 Am. Dec. 630); Bickford v. Gibbs, 8 Cush. 151; Drapers. Snow, 20 N. Y. 331 (75 Am. Dec. 408); Snively r. Johnston, 1 Watts & S. 309; Wyman v. Goodrich, 2G Wi.s. 21 ; Lamb v. Briggs, 22 Neb. 138 (34 N. W. 217); Parkhurst v. Vail, 73 111. 343; Jones V. Kuhn, 34 Kan. 414 (8 P ^77); Highland v. Dresser, 35 Minn. 345 (29 N. W. 55) ; Star Wagon Co. v. Swczy, 63 Iowa, 520 (19 N. W. 298). 3 Good V. Martin, 94 U. S. 90; Moies v. Bird, 1 1 Mass. 436 (G Am. Dec. 179); Hawkes?;. Phillips, 7 Gray, 284; Evansville Nat.Bk. v. Kaufman, 93 N. Y. 273 <^45 Am. Rep. 20^); Cowlos v. Pick, 55 Conn. 251 (10 A. 669); Williams v. Williams, 67 lyio. 6G7; Sypcrt v. Harrison, 88 Ky. 461 (11 S. W. 435); Klein v. Currier,|l4 111. 237; Farmer v. Perry, 70 Iowa, 358 (30 N. W. 762); Hungerford v. O^Brien, 37 Minn. 306 (34 N. W. 161). 427 § 158 SURETIES AND GUARANTORS. [CH. XV. This is an invariable provision of the Statutes of Frauds in the United States. There is, however, a difference of opinion as to what kind of writingsatisfies the requirements of the statute. The courts are agreed that the signature of the party to be charged must be obtained. In some of the States, it is held that the writing must contain a statement of the consideration for the guaranty; not an explicit statement, but sufficient writing to show the founda- tion for the guaranty.^ There are, however, cases in other States which deny the necessity even of the acknowledgment in writing of a con- sideration for the guaranty, leaving the want of considera- tion to be shown by parol in defense of the action on the ofuarantv.^ And in some of these latter courts, it is held that a simple signature of the guarantor, on some part of the original instrument of indebtedness, is a sufficient compliance with the requirements of the Statute of Frauds.^ But the obligation must in fact, as well as in form, be a promise to answer for the debt of others, in order that the 1 Mayer v. Isaacs, 6 M. & W. 610; Douglass v. Reynolds, 7 Pet. 113 (A. " might require your aid from time to lime/' and I promise "to be res^ponsible at any time for a sum," etc.) ; Cremer v. Higginson, 1 Mason, 323; Cowles v. Pick, 55 Conn. 251 (10 A. 569); Ordeman v. Lawson, 49 Md. 135; Union N. Bk. v. First N. Bk., 45 Ohio St, 236 (13 N. E. 884); Parsy v. Spikes, 49 Wis. 384 (35 Am. Rep. 782; 5 N. W. 794); Young v. Brown, 53 Wis. 333 (10 N. W. 394); Nichols v. Allen, 23 Minn. 543; Newton Wagon Co. v. Diers, 10 Neb. 84 (4 N. W. 995). In New York, by statute the existence of a consideration is required to be acknowledged in the writing. Douglass v. Howland, 24 Wend. 35; Draper v. Snow, 20 N. Y. 331 (75 Am. Dec. 408) ; Brewster v. Silence, 8 N. Y. 211. 2 Packard v. Richardson, 17 Mass. 122 (9 Am. Dec. 123); Sage v. Wilson, 6 Conn. 81 ; Leonard v. Vredenburg, 8 Johns. 29 (5 Am. Dec. 317) ; Bailey v. Freeman, 11 Johns. 221 (6 Am. Dec. 371) ; Read v. Evans, 17 Ohio 128; Violelt v. Patten, 5 Cranch, 142. 3 Moies V. Bird, 11 Mass. 436 (6 Am. Dec. 179); Perkins v. Catlin, 11 Conn. 213 (29 Am. Dec. 282); Nelson v. Dubois, 13 Johns. 175; Pool v. Anderson, 116 Ind. 88 (18 N. E. 445). See Knaus v. Major (Mich. '97), 69 N. W. 489, as to the binding effect of a verbal warranty that a note is good when made by the holder. In many of the States such a signature on a bill or note, unexplained, would impose on the party signing the liability of an indorser. See ante, § 92. 428 CH. XV.] SURETIKS AND GUARANTORS. § 159 statutory requirerueiit of a writing should apply. And it has been held that if a debtor liquidates his own obligation by the transfer to his creditor of another's bill, note or check, verbally guaranteeing the payment of the negotiable paper so transferred, it is really a guaranty of the payment of his own debt, and is binding, although not reduced to writing.^ § 159. Guaranty as appurtenant to a bill or note. — If the guaranty of a hill or note is written on a separate paper, it seems to be well settled that it will not pass ns appurte- nant of the bill or note to a subsequent transferee of the bill or note, unless the guaranty itself contains words of nego- tiability in describing the persons to whom payment of the principal obligation is guaranteed.^ But where the guaranty is written on the bill or note without words of negotiabilitv, the authorities are divided on the proposition that a subse- quent holder of the bill or note may sue the guarantor; some holding the affirmative,-^ and others sustaining the negative.* 1 Brown v. Curtis, 2 N. Y. 225; Cardell v. McNiell, 21 N. Y. 336; Milks V. Rich, 80 N. Y. 209 (30 Am. Rep. 615); Malone v. Keener, 44 Pa. St. 107; Hunt v. Adaras, 5 Mass. 358 (4 Am. D( c. 68) ; Thurston r. Island, G R. I. 103; IIuntiDirton v. Wellington, 12 Mich. 10; Smith v. Finch, 3 111. 21; Collins v. Stanfleld, 138 Ind 184 (38 N. E. 1091); Sheldon v. Butler, 24 Minn. 513; Barker v. Scudder, 50 Mo. 272; Dyer ». Gilson, 10 Wis. 657. 2 McLnren v. Watson's Ex'r.«, 19 Wend. 557; 20 Wend. 425 (37 Am. Dec. 260); Barlow v. Myers, 64 N. Y. 41 (21 Am. Rep. 547). And see First National Bank v. Carpenter, 41 Iowa, 518. 3 McLaren v. Watson's Ex'rs, 20 Wend. 425 (37 Am. Dec. 200); Cole V. Merchant's Bank, GO Ind. 350; Gage v. Mechanics' Bk., 79 111. 62; Ellsworth V. Harmon, 101 111. 274; Robinson v. Lair, 31 Iowa, 9; Green t;. Burroughs, 47 Mich. 70; Heard v. Dubuque Co. Bk.,8Neb. 10 (30 Am. Rep. 811); Johnson v. Mitchell, 50 Tex. 212 (32 Am. Rep. 002). Butsee Jones V. Thayer, 12 Gray, 443 (74 Am. Dec. G02) ; Baldwin v. Dow, 130 Mass. 416. * Trust Co. V. National Bank, 101 U. S. 08; Omaha Nat. Bk. v. Walker, 5 Fed. 399; Bissell v. Gowdy, 31 Conn. 47; Taylor v. Binney, 7 Mass. 479; Belcher v. Smith, 7 Cash. 482; Jones v. Dow, 142 Mass. 130 (7 N. E. 839); Northumberland Co. Bk. v. Eyer, 58 Pa. St. 97; and see Tinker v. McCauley, 3 Mich. 188. 429 § 160 SURETIES AND GUARANTORS. [CH. XV. § 160. Demand of principal debtor and notice of default to guarantor, when necessary. — As has been fully explained in preceding sections/ one, who becomes re- sponsible for the payment of a bill or note, as a drawer or indorser, guarantees its payment only upon the condition that the bill or note be presented to the acceptor or maker at the time of maturity, protest made for default and notice of dishonor given to such drawer or indorser. And if these conditions have not been complied with in every particular, unless there is a satisfactory excuse for the failure to so comply, the drawer or indorser is completely discharged from all secondary liability, even though it can be shown that no damage has resulted to him from the prompt per- formance of these conditions by the holder of the bill or note. And this Is equally true, if the drawer or indorser has become a jiarty to the paper for the accommodation of the principal debtor or other party to the paper, and is for that reason properly described as a surety. But where one guarantees the payment of a bill or note, without bringing himself into the classification of sureties, i. e., without making himself a drawer or indorser of the bill or note, unless an express condition is attached to his guaranty, he can be held liable on his guaranty for the default of the primary obligor of the bill or note, even though demand of payment and notice of dishonor have not been made in strict accordance with the requirements of the law of nego- tiable paper. In any case, the guarautor is liable, if demand has been made of the primary obligor, and notice of default sent to the guarantor, within a reasonable time after maturity .^ And even this more or less lax require- 1 See §§ 84, 130. 2 Douglass V. Reynolds, 7 Pet. 126; Talbot v. Gay, 18 Pick. 535; Cowles V. Pick, 55 Conn. 251 (10 A. 669); Cromwell v. Hewitt, 40 N. Y. 491 (100 Am. Dec. 527); Clay v. Edgerton, 19 Oliio St. 549 (2 Am. Rep. 422); Dickerson v. Derrickson, 39 III. 577; Parkhurst v. Vail, 73 111. 343; Greene v. Thompson, 33 Iowa, 293; Rodabaugh v. Pitkin, 46 Iowa, 544; Montgomery v. Kellogg, 43 Miss. 486 (5 Am. Rep. 508); Newton Wagon Co. v. Diers, 10 Neb. 285 (4 N. W. 995). Wright v. Dyer, 48 Mo. 525. 430 CH. XV.] SURETIES AND GUARANTORS. § 161 ment of a demand and notice of default is not an absolute condition precedent to the liability of the guarantor. It seems to be a settled proposition of law that the guarantor can be held liable in case of default of the primary obligor without proof of previous demand and notice of default ; unless it can be shown that the guarantor has suffered joint damage by the failure of the holder to notify the guarantor of the default, within a reasonable time after maturity of the obligor. For example, the guarantor is liable, notwith- standing the want of notice, if tlie principal was insolvent at and before maturity of the bill or note, because it is pre- sumed that the guarantor has suffered nothing in that case from the failure to give notice of the default.^ § 161. Concealed sureties as accommodation parties — Nature of tlieir liability — Admissibility of parol evi- dence to prove real character. — If the accomn^odation party to commercial paper, whether he be drawer or acceptor of a bill, maker of a note, or indorser of either, affixes the word surety to his signature, he must undoubt- edly be treated as surety by all the subsequent holders of the paper.2 But whether his real character as surety can be shown by parol evidence, where it has been concealed or at least not disclosed in the bill or note, is differently decided by the different courts; and the ruling is different, according to the effect of the disclosure of the real chaiacter of the party as surety on the rights of the other parties to the instrument. If a concealed suiety appears as a regular acceptor or indorser, while a few cases in the United States hold to the English equitable rule that parol evidence is ' 150X001(18 V. Douglass, 12 Pet. 497; Louisville Mfg. Co. v. Welch, 10 How. 4(;i; Oxford Bank v. Ilaynes, 8 Pick. 423 (19 Am. Dec. 334); Breed v. Ilillhouse, 7 Conn. 523; Brown v. Curtis, 2 N. Y. 225; Allen r. Righlmere, 20 Johns. 3G5 (11 Am. Doc. 288); Hance v. Miller, 21 111. C36; Vollz V. Harris, 40 111. 155; Hungerford v. O'Brien, 37 Minn. 30G (34 N. W. 101) ; Wright v. Dyer, 48 Mo. 525; Fuller v. Scott, 8 Kan. 25. ~ Hunt V. Adams, 5 Muss. 358 (4 Am. Dec. C8) ; Sayles v. Sims, 73 N. Y. 551; Culbertson v. Wilcox, 11 Wash. St. 522 (39 P. 954). 431 § 162 SURETIES AND GUARANTORS. [CH. XV. admissible to prove the party's ciiaracter as surety, as against all parties who know the fact (but not as a bona fide holder) ; ^ the great weight of judicial opinion follow the English common law rule, which permits the subsequent holder of a bill or note to treat all the prior parties accord- ing to their ostensible character, and deny the admissibility of parol evidence to prove their real character, where it would completely change the character of a party to the paper. ^ But it seems that, if the concealed surety a))pearsas a joint maker or drawer, so that proof of his character as surety would not reverse the ostensible relations of the parties, the general trend of judicial opinion in this country per- mits the proof of his real character by parol evidence, with the accompanying moditication of the rights of the parties.^ § 162. What will discharge guarantors and sureties — Surrender of teecurities and extension of time of pay- ment. — In explaining what will discharge guarantors and sureties, it must always be borne in mind, that where the character of a surety is concealed by his appearance as a regular party to a bill or note, his rights and his liabilities, as against a bona fide holder, are determined by his osten- 1 Guild V. Butler, 127 Mass. 386; Rand v. Cutler, 155 Mass. 451 ^29 N. E. 1085) ; First Nat. Bk. v. Gaines, 87 Ky 597 (9 S. W. 396) ; Cone v. Rees, 11 Ohio C. C. 632; Meggett v. Baura, 57 Miss. 22; Benedict v. Olson, 37 Minn. 431 f35 N. W. 10); Stump v. Richardson Co. Bk., 24 Neb. 522 (89 N. W. 433). 2 Harris v. Brooks, 21 Pick. 195 (32 Am. Dec. 254) ; White t>. Hopkins, 8 Watts &S. 99 (37 Am. Dec. 542) ; Bk. of Montgomery v Walker, 9 Serg. 6 R. 229 (11 Am. Dec. 709); s. c. 12 Serg. &. R. 382; Stephens v. Monon- gahela, 88 Pa. St. 157 (32 Am. Rep. 438) ; Clopper's Adm'r v. Union Bk., 7 Har. & J. 92 (16 Am. Dec. 294); Lambert v. Sandford, 2 Blackf. 137 (18 Am. Dec. 149) ; DeWitt v. Boring, 123 Ind. 4 (23 N. E. 1085) ; Yates V. Donaldson, 5 Md. 389 (61 Am. Dec. 283) ; Scott v. Taul (Ala. '97), 22 So. 447; Cronise v. Kellogg, 20 111. 11; Culbertson v. Wilcox, 11 Wash. St. 522 (39 P. 954). 3 Hubbard v. Gurney, 64 N. Y. 457; Saylesv. Sims, 73 N. Y. 551; Bar- ron u. Cady, 40 Mich. 259; Goodman v. Litaker, 84 N. C. 8 (37 Am. Rep. 602); Stillwell v. Aaron, 69 Mo. 539 (33 Am. Rep. 517) ; Irvine v. Adams, 48 Wis. 468 (33 Am. Rep. 817). 432 CII. XV.] SURETIES AND GUARANTORS. § 162 srble, rather than his real, character. Of course, it is not possible for the guarantor, as distinguished from a surety, to masquerade in any other character. In the first place, whatever discharges the principal debtor, will likewise discharge the guarantor and surety ; whether it be a payment, release, or the successful estab- lishment of a defense to an action on the bill or note, such as illegality or fiaud.^ In the second j^lcce, the guarantor or surety will be dis- charged from liability, if his signature has been procured by fraud or misrepresentation, or the bill or note has been diverted from its expressed purpose, or its terms altered in any material degree, with or without the cognizance of the principal debtor. These defenses, however, will not avail the guarantor or surety as against a bona fide holder. ^ Finally, the guarantor or surety is discharged, if the holder surrenders to the principal debtor or other party to the paper collateral securities, which he holds as security for the guaranteed debt ; or enters into a binding contract for the extension of the time of payment, without the con- sent of such guarantor or surety. Under the principle of 1 Durham v. Giles, 52 Me. 206; Sargent v. Appleton, 6 Mass. 85 (4 Am. Dec. 90); Day v. Jones, 150 Mass. 231 (22 N. E. 898); Couch v. Waring, 9 Conn. 261; Putnam v. Schuyler, 4 Hun, 166 (but see McWilliams v. Mason, 31 N. Y. 294); Storer v. Milliken, 85 111. 218; Griffith v. Sit- greaves, 90 Pa. St. 161 ; Aultman & Taylor Co. v. Hefner, 67 Tex. 54 (2 S. W. 861); Es^emann v. Henschen, 56 Mo. 123. But see Carver v. Steele, 116 Cal. 116 (47 P. 1007), where it is held that loss of remedy against maker of a note does not discharge a surety. And so, also, a surety is nevertheless liable, although the principal is a married woman, and she successfully sets up the defense of want of legal authority to make a contract. Davis v. Statts, 43 Ind. 103 (13 Am. Rep. 382); Sample v. Cochran, 82 Ind. 260; Allen v. Berryhill, 27 Iowa, 534 (1 Am. Rep. 309). 2 Harris v. Brooks, 21 Pick. 195 (32 Am. Dec. 254) ; Packard v. Her- rington, 41 Kan. 469 (21 P. 621); Owens v. Tague, 3 Ind. App. 245; Johnson v. Mitchell, 14 Colo. 227 (23 P. 452) ; Anderson v. Warne, 71 111. 20 (22 Am. Rep. 83); Peteflsh v. Watkins, 124 111. 384 (16 N. E. 248); North Atchison Bk. v. Gay, 114 Mo. 203 (21 S. W. 479); St. Louis Nat. Bk. V. Flanagan, 129 Mo. 178 (31 S. W. 773) ; Melick v. First Nat. Bk., 52 Iowa, 94 (2 N. W. 1021); Galbraith v. Townsend, 1 Tex. Civ. App. 447; 20 S. W. 943; Merchants' Exch. Bk. v. Luckow, 37 Minn. 542 (35 N. W. 434). 28 433 § 162 SURETIES AND GUARANTORS. [CH. XV, subrogation, the guarantor or surety has a vested interest in the collateral security, which cannot be jeopardized or destroyed without his discharge from his liability.^ But, unless the holder of a bill or note has agreed to use due diligence in suing the principal, or there is a statute re- quiring it, mere delay in suing the principal will not dis- charge the surety or guarantor, as long as the Statute of Limitations does not bar the cause of action. ^ The agree- ment for an extension of the time of payment must not only be based upon a valuable executed consideration of some sort,^ but the agreement must be absolute and for an extension of payment for a definite period of time. It is not the length of time, but its definiteness which dis- charges the guarantor or surety.^ 1 Otis V. Van Storch, 15 R. I. 41 (.23 A. 39) ; Hayes v Ward, 4 Johns. Ch. 123 (8 Am. Dec. 554); Paine v. Johnson, 76 N. Y. 274; Millerd v. Thorn, 56 N. Y. 402; Sloan v. Latimer, 41 S. C. 217 (19 S. E. 491) ; Freanor v. Yingling, 37 Md. 491; Galbraith v. Townsend, 1 Tex. Civ, App. 477; Holland v. Johnson, 51 Ind. 346; Barrett v. Davis, 104 Mo. 549 (16 S. W. 377); Kirkpatrick v. Howk, 80 111. 122; Dillon v. Russell, 5 Neb. 484. But see Sheehan v. Taft, 110 Mass. 331. 2 Berry v. Pullen, 69 Me. 191 (31 Am. Rep. 248); Salt Springs Nat. Bank v. Sloan, 135 N. Y. 371 (32 N. E, 231) ; Chatham Nat. Bank v. Pratt, 135 N. Y. 423 (32 N. E. 236); Chafoin v. Rich, 77 Cal. 476 (19 P. 882); Sterling v. Marietta Co., 11 Serg. & R. 179; Coffey v. Reinhardt, 114 N. C. 509 (19 S. E. 370); Farmers' Bk. v. Reynolds, 13 Ohio, 84; Hibler v. Shipp, 78 Ky. 64; Sawyer v. Bradford, 6 Ala. 572; Osborne v. Thompson, 36 Minn. 528 (33 N. W. 1); Butler v. Gambs, 1 Mo. App. 466. 3 Billington v. Wagoner, 33 N. Y, 31; Ducker v. Rapp, 67 N. Y. 464; Scott V. Harris, 76 N, C. 205; Whittraer v. Ellison, 72 111, 301 ; Bradshaw V. Combs, 102 111. 428; Roberts v. Richardson, 39 Iowa, 290; Abel v. Alexander, 45 Ind. 523 (15 Am. Rep. 270); Foster v. Gaston, 123 Ind. 96 (23 N. E. 1092); Irvine v. Adams, 48 Wis. 467 (33 Am. Rep. 817; 4 N. W. 573); Cosetllo v. Wilhelm, 13 Kan, 229; Wild v. Howe, 74 Mo, 551. But mere part payment of the debt or payment of past due interest, will not raise the presumption of an agreement for extension of time of payment. Nor is it a sufficient consideration to make the agreement binding. First Nat, Bk. v. Leavitt, 65 Mo, 563; Petty v. Douglass, 76 Mo. 70; Wilson v. Powers, 130 Mass. 127; Turnbull v. Brock, 31 Ohio St. 649; Stuber v. Schack, S3 111, 191. 4 Day V. Jones, 150 Mass. 231 (22 N. E. 898); Reed v. Stoddard, 100 Mass, 425; Fellows v. Prentiss, 3 Denio, 512 (45 Am. Dec. 484) ; Sizer v. Heacock, 23 Wend, 81 ; McKechnie v. Ward, 58 N, Y. 541 (17 Am. Rep,, 281) ; Coales v. Thayer, 93 Ind. 156; Rowset;. Johnson, 66 Mo. Apy.. 57, 434 CII. XV.] SURETIES AND GUARANTORS. § IHS § 163. Remedies of surety and guai*aiitor — Contribu- tion between co-sureties. — If a guarantor or surely is required to pay the bill, note or check, which he guaran- tees, he has, as against his principal and the creditor, one of two courses to pursue. The more common course, per- haps, is for him to pay the debt and recover of the princi- pal and all other parties whom the holder may have held liable. But his claim against the principal and others, is limited to the amount which he has been required to pay and has actually paid, to secure his own release from liability ; with interest on the same, and whatever costs of suit have been incurred in resisting the enforcement of the claim ; and the suit must be brought within the statutory period of limitation.^ On the other hand, the guarantor or surety may file a bill in equity, making the creditor and principal parties, to enjoin proceedings against himself, until the remedies against the principal have first been exhausted. But the guarantor or surety would in such a case have to indemnify the creditor against loss by the delay in the proceedings against him thereby occasioned. This is an unusual j^ro- ceeding; because, ordinarily, the interests of the guarantor or surety can be as well promoted by his payment of the debt and recovery of the principal.'^ If there are two or more guarantors or sureties, they are Sloan V. Latimer, 41 S. C. 217 (19 S. E. 491); Smith v. Sheldon, 35 Mich. 42 (24 Am. Rep. 529) ; Booth v. Wiley, 102 111. 84; Gardner v. Watson, 13 111. 347; Jaffray v. Crane, 50 Wis 349 (7 N. W. 300); Morgan v. Thomp- son, GO Iowa, 280 (14 N. W. 30i;). The substitution of a demand note f>>r original note has been held to be no such extension of time of pay- ment as will discharge guarantors and sureties. Peninsular Sav. Bank V. Ilosie (Mich. '97), 70 N. W. 890. 1 Hall V. Smith, 5 How. 90; Swift v. Crocker, 21 Pick. 241; Hale v. Andrews, G Cow. 225; Bonney r. Seeley, 2 Wend. 481; Beckley v. Mun- son, 13 Conn. 299; Pace v. Robertson, G5 N. C. 650; Junker v. Rush, 136 111. 179 (2G N. E. 499) ; Smith v. Sheldon, 35 Mich. 42 (24 Am. Rep. 529) ; Beck with v. Webber, 78 Mich. 390 (44 N. W. 330). See Krugman v. Soule, 132 Mass. 285. - King V. Baldwin, 17 Johns. 384 (8 Am. Dec. 415); Irick v. Black, 17 N. J. Eq. (2 C. E. Gr.) 189; Humphrey v. Hitt, G Gratt. 509 (53 Am. Dt'C. 133). 435 ILL. CAS. CONSIDERATION SLPl'OKTING GUARANTY. [CH. XV. presumed to be co-equal guarantors or sureties; uud if one of them is required to pay the debt, he can compel the other to make contribution in equal proportions, unless their liability to each other for contribution has been otherwise determined by express agreement between them. But contribution can be enforced, only when one has actually paid more than his share of the debt.^ Successive indorsers are never held to be co-sureties, and liable to each other for contribution, where they do not guarantee the payment of the bill or note to the same original party. But where two parties indorse a bill or note for the same party, they are co-sureties, and, in the absence of an agreement to the contrary, are liable for contribution. 2 ILLUSTRATIVE CASES. Moses V. Lawrence County Bank, 149 U. S. 298. North Atchison Bank v. Gay, 114 Mo. 203 (21 S. W. 479). Sloau V. Latimer, 41 S. C. 217 (.19 S. W. 491). Salt Springs Nat. Bank v. Sloan, 135 N. Y. 371 (32 N. E. 231) . Rogers v. School Trustees, 46 111. 428. Guaranties Contemporaneous and Subsequent, Must be Supported by Consideration — When Separate Consid- eration is Necessary. Moses V. Lawrence County Bank, 149 U. S. 298. This was an action, brouglit April 16, 1888, by a national bank, organized under the acts of Congress, and doing business in, and a citizen of Pennsylvania, against six persons, citizens of Ala- bama and residing in the middle district of Alabama, to recover the amount due on a guaranty of a promissory note. 1 Fletcher v. Jackson, 23 Vt. 581 (56 Am. Dec. 98); Stump v. Richard- son County Bk., 24 Neb, 522; 39 N. W. 433 (one a concealed surety); Johnson v. Harvey, 84 N. Y. 363 (38 Am. Rep. 515) ; Norton v. Coons, G N. Y. 33; Southerland v. Freemont, 107 N. C. 565 (12 S. E. 237); Monson v. Drakely, 40 Conn. 552 (16 Am. Rep. 74); Eiseley v. Harr, 42 Neb. 3 (64 N. W. 365) ; Voss v. Lewis, 126 Ind. 155 (25 N. E. 892) ; Houck V. Graham, 123 Ind. 277; 24 N. E. 113 (agreement controlling con- tribution). See Robertson v. Deatherage, 82 111. 511; McKee v. Camp- bell, 27 Mich. 497. 2 Philips V. Preston, 5 How, 278; Briggs v. Boyd, 37 Vt. 534; Steckel V. Steckel, 28 Pa. St. 233. See ante, § 86. 436 CH. XV.] CONSIDERATION SUPPORTING GUARANTY. ILL. CAS. The complaint alleged that, on August 15, 1887, the Sheffield Furnace Company, an Alabama corporation, made a promissory note for $12,111.51, payable to its own order four months after date at the banking house of Moses Brothers, in Montgomery ; that contemporaneously with the making of the note, and before its delivery or negotiation, and in order to give it credit and cur- rency, its payment at maturity was guaranteed by the defendants, for a valuable consideration, by an indorsement in writing on tlie note in these words: " We hereby guarantee the payment of the note at maturity," signed by the defendants, and which was in- tended by them to induce, and which in fact induced, James P. Witherow and all others to whom the note and guaranty were offered for negotiation and sale, to take the note and guaranty and to give value therefor; that the note, with the guaranty thereon, was before its maturity duly indorsed for value by the Sheffield Furnace Company to the order of Witherow ; that after- ward, and before the maturity of the note and guaranty, Witheiow indorsed the note, guaranteed as aforesaid, to the plaintiff for value; that afterward, and before the maturity of the note and guaranty, the defendants indorsed in writing on the note their waiver of note and protest and notice ; that the note was not paid at maturity, and that the note and guaranty remained unpaid and the property of the plaintiff. The defendant pleaded twelve pleas, of which the only ones material to be stated were as follows : — Fourth. That the guaranty sued on was a special promise to answer for the debt of another, and did not express any consider- ation for the promise. Fifth. That the note was given by the Sheffield Furnace Com- pany for a debt owing to Witherow liefore it was made, and was not founded upon a consideration paid or liability accrued at the time of the making thereof, and the guaranty was without any consideration. Eiglitli. That the Sheffield Furnace Company paid the debt sued on to Witherow before this action was commenced. Twelfth. That the guaranty sued on was a S[)ecial promise to answer for the debt of another, and did not express any consid- eration therefor, and was not executed contemi)oraneously with, nor before the negotiation of, the note of which it guaranteed the payment. The plaintiff demurred to the fourtli and fifth i)leas, because they did not deny that the defendants indorsed the guaranty upon the note contem[)oraneously with its execution and before any negotiation thereof; and also demurred to these pleas, as well as to the twelfth, because they did not deny that the defendant in- dorsed the gu:iranty upon the note before its negotiation to the plaintiff and in order to give it credit and currency, nor allege that tlie plaintff had notice of any want of consideration for the guaranty. To the eighth plea a roplication was filed, alleging that the 437 ILL. CAS. CONSIDERATION SUPPORTING GUARANTY. [CH. XV. plaintiff became the owner of the note for a valuable considera- tion before maturity, and that no part thereof had ever been paid to the plaintiff or to any one authorized by the plaintiff to receive it. To this replication the defendant demurred. The court sustained the demurrers to the pleas, and overruled the demurrer to the replication. Issue was then joined on the eighth plea and the replication thereto; and a trial by jury was had upon that issue, at wliich the plaintiff gave in evidence the note, purporting to be " for value I'eceived," and the following indorsements thereon, in the order in which they appeared upon the note: 1st. "Pay to the order of J. P. Witherow," signed by the Sheffield Furnace Com- pany. 2d. An indorsement in blank by Witherow. 3d. "We hereby guarantee the payment of this note at maturity," signed by the defendants. 4th. Another blank indorsement by Withe- row under the guaranty. No other evidence was introduced. Thereupon the court instructed the jury to render a verdict for the plaintiff for the amount sued for, with interest ; a verdict was returned accordingly; and the defendant, having duly excepted to the evidence and to the instruction, tendered a bill of exceptions and sued out this writ of error. Mr. Justice Gray. By the Statute of Frauds of Alabama, a special promise to answer for the debt, default, or miscarriage of another is void " unless such agreement, or some note or memo- randum thereof, expressing the consideration," is in writing, and subscribed by or in behalf of the party to be charged : Alabama Code of 1887, § 1732. The words "value received," or acknowledging the receipt of one dollar, sufficiently expressing a consideration. Neal v. Smith, 5 Ala. 568 ; Boiling v. Munohus, 65 Ala. 658. Every negotiable promissory note, even if not purporting to be "for value received," imports a consideration. Mandeville -y. Welch, 5 Wheat. 277 ; Page v. Bank of Alexandria, 7 Wlieat. 35 ; Townsend v. Derby, 3 Met. 363. And the indorsement of such a note is itself prima facie evidence of having been made for value. Riddle v. Mandeville, 5 Cranch, 322, 332. The promissory note, in the case at bar, having been made payable to the maker's own order, first took effect as a contract upon its indorsement and delivery by the maker, the Sheffield Furnace Company, to Witherow, the first taker. Lea v. Branch Bank, 8 Porter, 119; Little y. Rogers, 1 Met. 108; Hooper v. Williams, 2 Exch. 13; Brown v. DeWinton, 6 C. B. 336. A guaranty of the payment of a negotiable promissory note, written by a third person upon the note before its delivery, requires no other consideration to support it, and need express none other (even where the law requires the consideration of the guaranty to be expressed in writing), than the consideration which the note upon its face implies to have passed between the original jiarties. Leonard v. Vredenburgh, 8 Johns. 29 ; D'Wolf V. Rabaud, 1 Pet. 476, 501, 502; Nelson v. Boynton, 3 Met. 396, 438 CH. XV.] CONSIDERATION SUPPORTING GUARANTY. ILL. CAS. 400, 401; Bickford v. Gibbs, 8 Cush. 154; Nabb v. Koontz, 17 Md. 283; Parkburst v. Vail, 73 III. 343. The demurrers to tbe fourth and fifth pleas, therefore, were rightly sustained. But a guaranty written upon a promissory note, after the note lias been delivered and taken effect as a contract requires a dis- tinct consideration to support it; and if such a guaranty does not express any consideration, it is void, where the Statute of Frauds, as in Alabauia, requires the consideration to be expressed in writing. Leonard v. Vredenburgh, and other cases, above. Rigby V. Norwood, 34 Ala. 129. The demurrer to the twelfth plea, therefore, should have been overruled, and judgment rendered tiiereon for the defendant, unless the court saw fit to permit the plaintiff to file a replication to that plea. It was argued on behalf of the original plaintiff that the valid- ity and effect of the guaranty must be governed by the general commercial law, without regard to any statute of Alabama. But there can be no doubt that the Statute of Frauds, even as applied to commercial instruments, is such a law of the State as has been declared by Congress to be a rule of decision in the courts of the United States. Act of September 24, 1789, c. 20, § 34, 1 Stat. 92; Rev. Stat., § 721; Mandevillc ?;. Riddle, 1 Cranch, 290, and 5 Cranch, 322; D'Wolf^. Rabaud, 1 Pet. 476; Kirkman v. Ham- ilton, 6 Pet. 20 ; Brashear v. West, 7 Pet. G08 ; Paine v. Central Vermont R. R., 118 U. S. 152, IGl. It was also contended that the order sustaining the demurrers, if erroneous, did not prejudice the defendant, because lie might have availed himself of the defense of the Statute of Frauds under the general issue. That might have been true, if he had pleaded the general issue. Kannady -y. Lambart, 37 Ala. 57; Pollock v. Brush Electric Association, 128 U. S. 446. But he did not plead it, and had the right to rely on his special uleas only. Alabama Code, § 2675. The suggestion of counsel, that by the practice in Alabama the entry of an appearance of counsel for the defendant was equiva- lent to filing a plea of the general issue, is too novel to be ac- cepted without proof, and seems inconsistent with Grigg v. Gilmer, 54 Ala. 425. If the record did not show what the plead- ings were, it might be presumed that the general issue was pleaded. May v. Sharp, 49 Ala. 140 ; Hatchett v. Molton, 76 Ala. 410. But in this case tw*. Ive pleas are set forth in the record, and it cannot be assumed that there was any other. The eighth plea was payment. The defendant introduced no evidence to support this plea, and has, therefure, no ground of exception to the rulings and instruction at the trial of the issue joined thereon. But the erroneous ruling on the demurrer to the twelfth plea re- quires the judgment to be reversed, and the case remanded to the circuit court for further proceedings inconformity with tliis opinion. 4.S0 ILL. CAS. WRONGFUL NEGOTIATION. [CH. XV. Liability of Surety on Note which is Jfegotiated in Vio- lation of Agreement that Other Sureties were to be Obtained. North Atchison Bank v. Gay, 114 Mo. 203 (21 S. W. 479). Gantt, p. J. This suit was instituted against Will R. Gay, as principal, and David Gordon and Samuel May, as sureties, on the following written instrument: " $2,500.00. Westboro, Mo., October 10th, 1888. Ninety days afterdate we promise to pay to the order of North Atchison Bank twenty-five hundred dollars, for value received, with interest from maturity at the rate of ten per cent per annum, together with an attorney's fee often per cent of the whole amount due, if collected by attorney or process of law. Will R. Gay. David Gordon. Samuel May. Payable at North Atchison Bank, Westboro, Mo." Defendants Will R. Gay and Samuel May suffered judgment against them by default. Defend- ant Gordon filed a separate answer, in which he admitted signing the note, but denied its deliveiy, admitted the incorporation of plaintiff, and then pleaded the following special defenses, to wit, that said plaintiff never paid or surrendered, in any manner, any money or valuable consideration whatever for said instrument ; that Gay represented that it was a note for only $2,500; that it would be promptly paid at maturity, and that before it was delivered one A. B. Wilkinson and three solvent sureties would sign it also, and not having his glasses, and relying on Gay, he signed the note ; that these representations were all false, and in violation of said agreement the note was delivered by Gay. He also alleges a contract with plaintiff not to accept paper with his name on it unless there were other solvent sureties also. He also charged that Gay turned over collateral securities sufficient, to plaintiff, to pay said note, and asks that it be compelled to credit it. Finally, he charges that plaint'ff knew Gay was insolvent, and did not expect said note to be paid by Gay, when it took it, and that Gay turned over to plaintiff ail his available property at the time, and this was a fraud on defendant. Plain- tiff denied all fraud, and all knowledge of the agreement for other sureties. The cause was tried to a jury under instructions of the court. The plaintiff, to maintain its case, introduced the instru- ment in writing in evidence, and rested its case. Defendant Gor- don then testified, in substance, that on the 17th October, 1888, he drove into Westboro, to a livery stable ; that, as he drove up, Gay and Peck, the cashier of the pbiniiff bank, were standing on the sidewalk. He heard Gay say to Peck, " ' Will Uncle Dave be good on the note? ' Peck run both hands in his pocket, and walked off." Gay approached and requested him to sign a note for $2,500. He said he could not do it, but Gay insisted it would be a great accommodation ; that five other good sureties would sign. Thereupon he went into plaintiff's bank, and signed the note or instrument sued on. Peck, the cashier, was outside, 440 CH. XV.] WRONGFUL NEGOTIATION. ILL. CAS. he says, and, just after signing the note. Gay and the defendant Gordon came out on the sidewalk, and Gay said to the cashier, " I will take this note, and get the other names on it, and send or bring it up; and it will be all right, will it?" Peck said it would. No other names were mentioned in Pi ck's presence, but Gay mentioned Brown Wilkinson to defendant as one who would sign with them. The other names he could uot call, except May, who did sign. The defcndiuit also called Peck, the cashier, who testified that tiie bank held a note on Gay for §4,000 ; that it was past due. About two weeks before the note in suit was given to the bank, the witness, one day, at Rockport requested Gay to arrange the $4,000 note ; this being the usual custom of banks, — that when paper became due the maker should either pay it or renew it. He says he saw defendant sign the note in the bank. Did not hear anything about any names to go on the note, and knew nothing of such an agreement. Gay afterwards sent him the note, and on the same day it was credited on the $4,000 note, and about the same time a mortgage was given by Gay to secure the balance of the note. The note sued on, and the mortgage, satisfied the $4,000 note. The court gave the following instruc- tion for defendants: (5) If the jury believes that, at the time defendant Gordon signed tlu; contract or instrument in suit, it was the express understanding and agreement by and between defend- ants Gay and Gordon thnt saiil .contract or instrument should not be delivered to the bank until one A. B. Wilkinson had signed the same as security thereon, and you further believe from the evidence, facts, and circumstances in proof that J. W. Peck, the cashier of the bank, liad knowledge of such agreement and under- standing between Gay and Gordon, and knew that Gordon under- stood from Gay that said contract or instrument was not to be delivered until it was signed by said Wilkinson, and you further find that said contract or instrument was deliveroil to the bank without the signature of s;iid Wilkinson, your verdict should be for the defendant. And 3'ou are further instructed that the bur- den of ijroving that there was an agreement between Gay and Gordon that Wilkinson was to sign the contract or instrument of writing as surety, and that Peck knevv of such agreement before he received the same and gave credit on the note, is upon the defendant." The court refused to Instruct that such an agree- ment, made without the knowledge of tlie bank, would release defendants, and refused to instruct on the alleged promise of the bank not to accept Gordon as surety unless there were otiier sol- vent sureties on tlie notes, and the court refused to instruct on the theory of a conspiracy between Gay and Pock to get Gordon to sign the note. The jury found for plaintiff, and defendant Gordon ai)peals. 1. Since the decision in State v. Potter, G3 Mo. 212, it has been the settled law of this court that when a surety signs a bond or note, and leaves it in the hands of his principal therein, to be delivered only on condition that it is to be signed by other 441 ILL. CAS. SURETY DISCHARGED BY EXTENSION. [CH. XV. sureties, and the principal delivers the bond or note, in violation of this agreement, to the obligee, and the obligee has no notice of such an agreement, the surety will be bound. State v. Modrel, 69 Mo. 152 ; State v. Baker, 64 Mo. IG7 ; State v. Hewitt, 72 Mo. 604; Woolf V. Schaeffer, 74 Mo. 158. Hence the trial court very properly refused defendant's first instruction, which ignored notice to the bank of the alleged agreement as to additional sure- ties. Instruction No. 5, copied above, gave defendant the ben- efit of the law as it is established in this State. It is his misfor- tune if he could not convince the jury the bank knew of his agreement with Gay, and of its violation. There was nothing on the face of the paper itself to indicate that it was incomplete. 2. Nor can we agree with learned counsel that the record shows no consideration for tliis note. The taking of this new note, extending the time of payment 90 days, and crediting the old note with that sum as payment, was ample consideration for the promise in the new. Bank v. Frame (Mo. Sup.), 20 S. W. Rep. 620; Crawford -y. Spencer, 92 Mo. 498; 4 S. W. Rep. 713; Deere v. Marsden, 88 Mo. 512. 3. The court very properly declined to hear the evidence of defendant to the effect that he had an agreement with the cashier not to tajie notes with his name on them unless they were other- wise solvent. The alleged promise was without any consideration, and was no defense to this action. 4. Neither was there any error in giving plaintiff's first and only instruction. The contract provided that " if it should be collected by any attorney, or by process of law," the attorney's fee of 10 percent should be at a bona fide holder.^ § 16(5. Check payable on demand without grace. — Although there are cases, which hold that a check may be made payable at a future day, or in any other way than on demand ;°the weight of authority is in favor of recognizing, 1 Espy V. Bk. of Cincinnati, 18 Wall. 604; Merchants' Bank v. State Bank, 10 Wall. fi04; Bowen v. Newell, 8 N. Y. 190; s. c. 13 N. Y. 290 (64 Am. Dec. 550). - Georgia Nat. Bk. v. Henderson, 46 Ga. 487 (12 Am. Rep. 51)0). 3 Planters' Bk. v. Kesee, 7 Ileisk. 200; Keene v. Beard, 8 C. B. N. S. 372. < Espy V. Bank of Cincinnati, 18 Wall. 004; Champion v. Gordon, 70 Pa. St. 474 (10 Am. Rep. 681): Morrison v. Bailey, 5 Ohio St. 13 (64 Am. Dec. 632) ; Newman v. Kaufman, 28 La. Ann. 805 (20 Am. Rep. 114). 5 Westminster Bk. v. Wheaton, 4 R. I. 30; Way v. Towle, 155 Mass. 374 (29 N. E. 506); Matter of Brown, 2 Story, 502; Bowen v. Newell, 13 N. Y. 290 (04 Am. Dec. 550 (the conclusion being made to rest on local business custom) ; Champion v. Gordon, 70 Pa. St. 474 (10 Am. Rep. 681) (do.). 459 § 167 CHECKS. [Cll. XVI. as one of the indispensable requirements of a check, that it be payable on demand and without days of grace. ^ § 167. The form and formalities of the check. — The form and formalities of the check differ but little from those of a bill of exchange. Like other kinds of commer- cial paper, the check contains a date, although it is not essential to its validity. ^ And it is a rather common occurrence for a check to be post-dated, i. e., to bear date at a later day than that on which it is actually negotiated. The purpose of post-dating a check is to enable it to be negotiated immediately, while it is not payable until the future day; having, as to the time of payment the effect of a bill of exchange, but in other respects that of a check. ^ While the bank may pay a post-dated check before its date to its real owner it cannot debit the account of the depositor before the given date; and it takes the check subject to the subsequent proof of title in another, where the check is payable to bearer.* All the various requisites of negotiable paper, as they have been explained in Chapter II, must be complied with in the case of a check ;" such as payment in money, and certainty as to amount, time and the person to whom payment shall be made. Words of negotiability are required to make a check negotiable ; but their absence does not affect the character of the check other than to 1 Bradley v. Delaplaine, 5 Harr. 305; Andrew v. Blackley, 11 Ohio St. 89; Georgia Nat. Bank v. Henderson, i6 Ga. 487 (12 Am, Rep. 590); Wood River Bk. v. First Nat. Bk., 36 Neb. 744 (55 N. W. 239) ; Ivory v. Bk. of the State, 36 Mo. 475 (88 Am. Dec. 150); Harrison v. Nicollet Nat. Bk., 41 Minn. 488 (43 N. W. 336); Minturn v. Fisher, 4 Cal. 35; Brown v. Lusk, 4 Yers. 210. 2 Exchange Bk. v. Sutton Bk., 78 Md. 577 (28 A. 563). 3 Salter v. Burt, 20 Wend. 205 (32 Am. Dec. 530) ; Matter of Brown, 2 Story, 502; Taylor v. Sip, 29 N. J. L. (1 Vroom.) 284. 4 Wheeler v. Guild, 20 Pick. 545 (32 Am. Dec. 231); Bristol Knife Co. V. First Nat. Bk., 41 Conn. 421 (19 Am. Rep. 517); Second Nat. Bk. v. Averill, 2 App. D. C. 470. « See Smith v. Smith, 1 R. I. 398 (53 Am. Dec. 652) ; Northrop v. San- born, 22 Vt. 433 (54 Am. Dec. 83); Wells u. Brigham, 6 Cush. 6 (52 Am. Dec. 750) ; Corgau v. Frew, 39 111. 31 (89 Am. Dec. 286). 460 en. XVI.] CHECKS. § 108 make it non-negotiablo.^ It was once the English law that a bank was not obliged to honor a check which was payable to OKler;^ and the act of Parliament, making the change in the law, only rcciuires the banks to honor such checks, but relieves them of all liability, if they should make payment on such a check on a forged in- dorsement to the wrong person. But in the United States, banks are universally required by custom to honor checks payable to order, and pay them at their peril to any other persons than those to whom they are made payal)le, or to whom they have been duly indorsed by the original payee or indorsee,^ But if payment is made to the rightful holder, it will be a good debit to the account of the depositor, although it is payable to order and has not been indorsed by hini.^ In respect to the address of the drawee, the check differs somewhat from a liill of exchange. In a bill of exchange, the drawee's address is almost invariably in the left-hand corner, at the bottom. In a check, the address of the bank is usually written or printed in large letters across the top, just below the date and place of execution. But this is not an essential difference; and the character of the order or draft is in nowise affected by any departure from custom in this respect.® § 1()8. Certification of checks. — Since the check is in- tended to be paid immediately and on demand, the parties cannot be said to have contemplated any presentment for acceptance, it being payable whenever there is a present- ment for any puipose. There is, therefore, no authority from the drawer to the })ayee to secure acceptance of a 1 See Escliange Bk. v. Sutton Bk., 78 Md. 577 (28 A. 663). 2 Bellamy v. Majoribanks, 8 Eng. L. & Eq. 517. 8 Bowen v. Newoll, 8 N. Y. 100; Graves v. Am. Exch. Bank, 17 N. Y. 205; Seventh Nat. Bank v. Cook, 73 Pa. St. 483 (13 Am. Rep. 751) ; Dodge V. Nat. Exch. Bk., 30 Ohio St. 1; Mcintosh v. Lytle, 23 Minn. 33(i (37 Am. Rep. 410). < Freund v. Imp. & Trad. N. Bk., 7C, N. Y. 352. ^ Kavanaugh r. Farmers' Bk. of Maitland, 59 Mo. App. 540; Bull v. First Nat. Bk., 123 U. S. 105. 401 § 168 CHECKS. [CH. XVI. check and put it in circulation, as is universally true in the case of a bill of exchange. Yet the necessities of the com- mercial workl have required this to some degree. A cus- tom has grown up, and lately assumed immense proportions in the large commercial centers, for the bank, on which a check is drawn, to enter into a positive agreement with the holder to pay the check whenever it is presented. This is called the certification of the check. Certification has been said to be '* the equivalent of acceptance." ^ But this is not strictly true in every particular ; and the effect of certification varies materially according to the circumstances. If the cer- tification is given by the bank, at the solicitation of the holder, the drawer and prior indorsers are completely discharged from all liability for the payment of the check, and the holder must look solely to the bank.^ But if the bank certifies the check at the request of the drawer, and before its delivery to the payee, the drawer is still liable, and the certification has the same effect as does the accept- ance of a bill of exchange.^ In every other respect, the certification is the equivalent of acceptance. The bank, on certifyiug a check, is precluded from afterwards question- ing the genuineness of the drawer's signature, as against the claims of a bona fide holder, although it does not guarantee that the body of the bill or indorsements are genuine.* Nor can the bank afterwards refuse to pay the 1 Merchants' Bank v. State Bk., 10 Wall. 60t, G47. 2 First Nat. Bk. v. Leacb, 52 N. Y. 350 (11 Am. Rep. 708) ; Seventh Nat. Bank v. Coot, 73 Pa. St. 483 (13 Am. Rep. 751); Girard Bk. v. Bk. of Penn. Twp., 39 Pa, St. 92; Metropolitan N. Bk. v. Jones, 137 111. 634 (27 N. E. 533) ; Cont, Nat. Bk. v. Cornhauser, 37 111. App, 475; Essex Co, N. Bk. V. Bk of Montreal, 7 Biss. 197; Bullard v. Randall, 1 Gray, 605 (61 Am. Dec. 433). 3 Minot V. Russ, 156 Mass. 458 (31 N. E. 489); Randolph N. Bk. v. Hornblower, 160 Mass. 401 (35 N. E. 850); Cincinnati &c. Fish Co. u. Nat. Lafayette Bank, 51 Ohio St. 106 (36 N. E. 833). ^ Espy V. Bk. of Cincinnati, 18 Wall. 604; Security Bk. v. Continental Bk., 64 N. Y. 31G; Clews v. N. Y. Nat. Bk. Assn., 89 N. Y. 418 (V2 Am. Rep. 303j ; First Nat. Bk. v. N. W. Nat. Bk., 40 111. App. 640 ; s. c. 152 111, 296 (38 N, E. 739). 462 CH. XVI.] CHECKS. § 168 check, because there were no funds on deposit to cover the check; although, if the check has been certified to by mis- take, the certification can be recalled, if it is done before the check has been further negotiated. ^ The customary form of certification of a check is for some duly authorized officer of the bank to write across the face of the check the word " good" or "certified" and sign his name or write his initials. ^ But the form does not appear to be of any great moment. It may be written on a separate pM[)er, or may be communicated by telegraph.'' And it seems that, in the absence of statutory requirement to the contrary, a verbal certification will bind the bank, if it be communicated to the payee or other holder of the check. ^ In the absence of express authorization, by the board of directors of a bank, the only officers who have impliedly the authority to bind the bank by the certification of a check, are the president, cashier and teller.^ But no officer 1 Irving Bk. v. Wetherald, 36 N. Y. 335; Watervliet Bank v. White, 1 Denio, 608 ; Bk. of Republic v. Baxter, 31 Vt. 101 ; Second Nat. Bk. v. West Nat. Bk., 61 Md. 128 (34 Am. Kep. 300). The certification is not absolutely binding on the bank, except as against a bona fide holder. Where, there- fore, a certified check, payable to order, is transferred without indorse- ment, the subsequent holders cannot hold the bank liable, where the certification has beeu procured by fraud or misrepresentation. Goshen Nat. Bk. V. Bingham, 118 N. Y. 349 (23 N. E. 180). And in any case, the holder must prove title. Lynch v. First Nat. Bk., 107 N. Y. 179 (13 N. E. 775). 2 Barnet v. Smith, 30 N. H. 256 (64 Am. Dec. 290). " Henrietta Nat. Bk. v. State Nat. Bk., 80 Tex. 648 (16 S. W. 321). * Carr v. Nat. Security Bk., 107 Mass. 45 (9 Am. Rt-p. 6); Pope w. Bank of Albion, 59 Barb. 226; National State Bk. v. Liudermau, 161 Pa. St. 199 (statute roquiring writing) (28 A. 1022); Nelson v. First Nat. Bank, 48 111. 36 (95 Am. Dec. 510); Garretson v. North Atchison Bk., 39 Fed. 1(;3; 47 Fed. 867 (telegram). But see contra. Espy i'. Bank of Cin- cinnati, 18 Wall. 604; Farmers' &, Trad. Bk. v. Carter Co., 88 Tenn. 279 (12 S. W. 545); Kahn v. Walton, 46 Ohio St. 195 (20 N. E. 203), holding that a verbal statement that a check is good, does not necessarily in- volve a positive promise that it will be paid. fi Merchant's Bk. v. State Bk., 10 Wall. 604; Meads v. Merchants' Bk. of Albany 25 N. Y. 143; Claflin v. Farmers' &c. Bk., 25 N. Y. 293; Cooke V. State Nat. Bk., 52 N. Y. 96 (11 Am. Rep. 667). But see Atlantic Bk. V. Merchants' Bk., 10 Gray, 532. 463 § 170 CHECKS. [CH. XVI. has the authority to certify a check drawn by one who has not sufficient funds on deposit to cover it, and no one but a bona fide holder can hoM the baiili liable on such a cer- tification.^ Nor can any officer of a bank certify a post- dated check i)rior to the given date of the check.^ The certification of a check does not give the holder any specific lien on the assets of the bank.^ § 169. Negotiation and transfer of checks. — Like bills of exchange and promissory notes, a check, payable to bearer, is transferable by delivery without indorsement. And while it is more or less customary for a bank to ask for the indorsement of the person to whom payment is made, such indorsement is only intended to secure evidence and identification of the payee, and does not impose upon him the liability of an indorser, unless it is shown that he signed aiiimo indorsandi. If the check is payable to order, indorsement by the puyee and indorsees is necessary to the transfer of the full legal title to the check.* § 170. Memorandum cbecks. — A peculiar form of check has come into use in certain business communities, which is known as the memorandum check. This is described to be " a con'.ract by which the maker engages to pay the bona fide holder absolutely, and not upon a con- dition to pay upon presentation at maturity, and if due notice of the presentation and non-payment should be given. The word ' memorandum,' written or printed upon the check, describes the natuie of the contract with precis- ion."^ It is in the nature of a due bill, the only material dif- 1 Atlantic Bk. v. Merchants' Bk., 10 Gray, 532; Cooke v. State Nat. Bk., 62 N. Y. 96 (11 Am. Rep. 667). 2 Clarke Nat. Bk. v. Bk. of Albion, 52 Barb. 592. 3 People V. St. Nicholas Bk., 77 Hun, 159. 4 Hoyt V. Seeley, 18 Conn. 353; Keene v. Beard, 8 C. B. N. S. 372; Cruger v. Armstrong, 3 Johns. 5 {2 Am. Dec. 126) ; Conroy v. Warren, 3 Johns. 259 (2 Am. Dec. 156); Merchants' Bk. v. Spicer, 6 Wend. 445; Glen V. Noble, 1 Blatchf . 105; Humphries v. Bicknell, 2 Litt. 296 (13 Am Dec. 268). ^ Franklin Bk. v. Freeman, 16 Pick. 535. 404 CH. XVI.] CHECKS. § 171 ference being that the bank, whose name appears upon the check, is impliedly authorized by the maker to pay it like any ordinary check, and to debit the depositor's account with the amount.^ § 171. Presentment, notice and protest of checks. — Except in the case of memoraiiduni checks, it is as neces- sary, in order to hold the drawer and indorsers, to observe the rules in respect to presentment for payment, protest and notice of dishonor, where the instrument is a check, as where it is a hill of exchange or promissory note.^ But there is this diflerence between bills and checks as to consequences of negligence, or delay in demand and notice. Inasmuch as checks are payable on demand, the drawer is not discharged by any such delay or neglect, unless actual damage can be proved by him ; as, for example, by proof of the failure of the bank after the negotiation of the check, and after the lapse of a reasonable time, within which the check could have been presented for payment. If the bank has not failed, the check is payable whenever pre- sented, and the drawer is not discharged by the delay .^ 1 United States v. Isham, 17 AVall. 49(J; (.'ushin6 (13 Am. Dec. 268) ; Simp- son V. Pac. &c. Ins. Co., 44 Cal. 143, and cases cited in the preceding and succeeding notes. 2 O'Brien v. Smith, 1 Blar';, 99; Smith, v. Miller, 43 N. Y. 171 (3 Am. Rep. 690) ; Syracuse &c. R. R. Co. v. Collins, 57 N. Y. 641; aff' g 3 Lans. 29 ; Cox V. Boone, 8 W. Va. 500 (23 Am. Rep. 627) ; Morrison v. Bailey, 5 Ohio St. 13 (64 Am. Dec. 632); Eickford tJ.FirstNat. Bk., 42 HI. 238 (89 Am. Dec. 436) ; Cawein v. Browinski, 6 Bush, 457 (99 Am. Dec. 684) ; Holmes V. Roe, 62 Mich. 199 (28 N. W. 8G4) ; Simpson v. Pac. &c. Ins. Co., 44 Cal. 143; Grange v. Reish (Wis.), 67 N. W. 1130; Andrews v. Germ. Nat. Bank, 9 Heisk. 211 (24 Am. Rep. 300). 466 CII. XVI.] CHECKS. § 172 receives the check at a distance from the place where the f)ank is situated, he has the whole of the day after receiv- ing it in w^hich to forward tlie ciiecklor presentment through an appropriate channel, hy mail or express, to the place where the bank is located. And the person who receives it has the next day after receiving it, in which to make pre- sentment. Any loss, arising from failure of the bank during the time needed and con>umed in tlie transportation of the check, will fall on the drawer.^ And where the banking custom of the place, where the bank is located, is to make presentment through the clearing-house, the consequent delay is justifiable; and the collecting bank or holder of the check is not liable if the drawee bank fails, while the check is passing through the clearing-house.^ But the payee of ca check need not send it direct to the bank for presentment. lie may transfer it by indorsement or delivery to another. And the indorsee or transferee has the next day after receiving the check, in which to present for payment or to forward it for presentment. But if more time has elapsed between the original negotiation of the check and its final presentment for payment by the indorsee or holder than what is allowed by law to the payee, the drawer is discharged, in case of the intermediate failuie of the bank, although the immediate indorser is still bound. The law does not permit any extension of the risk of the drawer by a series of transfers by indorsement or by deliver}'. The check is designed for immediate present- ment, and not for circulation.' 1 Smitli V. Jonos, 20 Wend. 192 (32 Am. Dec. 527); Gregg v. Beane fVt. 'D7), 37 A. 248; Loux v. Fox, 171 Pa. St. G8 (32 A. 190); First Nat. Bk. V. Buckliannon Bk., 80 Md. 475 (31 A. 302). Itseems, however, that, where the payee resides in the country, away from the place in which the bank is located, a longer time than twenty-four hours \-i allowed within which to make presentment. Cox v. Boone, 8 W. Va. 500 (23 Am. Rep. G27). - Willis V. Finley, 173 Pa. St. 28 (34 A. 213); contra. Holmes v. Roe, 02 Mich. 109 (28 N. W. 8G4.) » Cruger t'. Armstrong, 3 Johns. 5 (2 Am. Dec. 12G) ; Mohawk Bk. v. Bruderick, 10 Wend. 3C4 ; 13 Wend. 133 (27 Am. Dec. 192); Rosenthal v. Ehrlicher, 154 Pa. St. 39(> (2G A. 435); First Nat. Bk. r. Miller, 43 Neb. 467 § 173 CHECKS. [CTI. XVI, § 173. Presentment of clH'''k by mail and by deposit. — ■ It is probably correct to say that the ordinary method of forwarding a check for presentment, where it is negotiated at a distance from the place where the bank is situated, is by uKiil or express to some third person or independent bank or banker, who is charged with the duty of presenting the check for }>ayment to the bank or banker on which it is drawn. But a custom has grown up of late to send the check direct to the baidi on which it is drawn, particularly where the paying bank is the correspondent of the receiv- ing bank, or it is the only bank in the place of its location. The propriety and sufficiency of this method of present- ment has been denied,^ but equally weighty authority justify its adoption. 2 It is al>o a very common practice for one depositor to deposit to hi-< account a check drawn in his favor by another depositor. In such a case, the bank assumes the dual obligation of collecting and l^aying the check. And if the account of the drawer does not per- mit of its paj'ment, it has been held that the check may be returned to the depositor, although its amount has been passed to his credit.^ Where, howcvei-, checks are received for collection by the bank on which they are drawn, the bank has until the next day to return the checks, if they are not to be paid.* If the account of the drawer of a number of checks does 791 (G2 N. W. 195) ; Hamilton v. Winona Salt. &c. Co , 95 Mich. 436 (54 N. W. 903) ; Brown v. Lusk, 4 Yerg. 210; GlEford v. Hardell, 88 Wis. 538 (GO N, W. 1064); Reid v. Reid, 11 Tex. 584; Industrial Tr. &c. Sav. Co. V. Weakley, 103 Ala. 458 (15 So. 854); Watt v. Gans (Ala. '97), 21 So. 1011. 1 Farwell v. Curtis, 7 Biss. 160; Wagner v. Crook, 167 Pa. St. 259; 31 A. 576 (collecting bank liable for any loss) ; Anderson v. Rogers, 53 Kan. 542 (36 P. 1067). 2 Shipsey v. Bowery Nat. Bk., 59 N. Y. 485: Indig v. Nat. City Bank, 80 N. Y. 100; Nebraska N. Bk. v. Logan, 35 Neb. 182 (52 N. W. 808). 3 Nat. Gold Bk. v. McDonald, 51 Cal. 64 (21 Am. Rep. 697). But see contra, Pratt v. Foote, 9 N. Y. 463; Oddie v. Nat. City Bk , 45 N. Y. 735 (6 Am. Rep. 160). 4 Oberraan v. Hoboken City Bk., 2 Vroom (30 N. J. L.), 563; Mer- chants' Nat. Bk. V. Eagle Nat. Bk., 101 Mass. 281 (100 Am. Dec. 120). 468 CH. XVI.] CHECKS. § 174 not show a siiflBcient balance to pay all the checks, which may be presented at one time, the duty of the bank is to pay the checks in full, in the order in which they have been presented for payment or received for deposit or col- lection, a!id not to distribute the balance ^;/-o ?'a^a amonir the checkholders.^ § 174. What will excuse failure or delay in demand and notice. — As a general proposition, it may be stated that the same causes or occurrences, which will excuse failure or delay in the due presentment and protest of bills and notes, and in the notification of their dishonor, apply to similar cases arising in the negotiation and handlingr of checks. And the reader is referred to a preceding chajjter ^ for a general discussion of these satisfactory excuses. The most common excuses in the cases of checks, as against the drawer, are the insolvency of the bank on which the check is drawn, and the absence of funds on deposit to the credit of the diawer. Either fact, when knt.wn to the holder, will excuse his failure to make pre- sentment. "^ The holder is also excused from demand and notice, as against the drawer, if he has countermanded the payment of the check, or drawn out the funds on deposit at the bank.^ 1 Matter of Brown, 2 Story, 503; Nat. Safe & Lock Co. v. People, 50 III. App. 33G. And if two checks are presented simultaneously whicb aggregate more than the balance to the credit of the drawer, the bank may refuse to pay both. Dykers v. Leather M'f'g Bk., 11 Paige 612. 2 Chapter XIIL 3 Beauregard v. KnowltoD, 156 Mass. 395 (31 N. E. 389); Iloyt v. Seeley, 18 Conn. 353; Couroy v. Warren, 3 Johns. 259 (2 Am. Dec. loi!) ; Brush V. Barrelt, 82 N. Y. 400; Exchange Bk. v. Sutton Bk , 78 Md. 577 (28 A. 56;]); Kirkpatrick v. Puryear, 93 Tenn. 409 (24 S. W. 1130); Fletcher v. Pierson, 69 lud. 281 (35 Am. Rep. 214); Culver v. Marks, li'2 lad. 554 (23 N. E. 108(;) ; Kinyon v. Stanton, 44 Wis. 479 (28 Am. Rep. 601); Leonard v. Olson (Iowa, '97), G8 N. W. 677. But see First Nat. Bk. V. Miller, 37 Neb. 500 (55 N. W. 1064). ■•Jacks V. Darrin, 3 E. 1). Smith, 558; Industrial Bank of Chicago v. Bowes, 165 III. 70 f46 N. E. 10); Whalty v. Houston, 12 La. Ann. 585r MiiUuru V. Fisher, 7 Cal. 573. 4G9 § 175 CHECKS. [CH. XVI. § 175. When is a check stale or overdue. — la a pre- cediog section/ it was explained what expedition in the presentment of a cheek for payment was required by the law, in order to hold the drawer and indorser liable, where the bank had failed in the meanwhile, or where for any other reason damage has been suffered by the drawer of the check in consequence of such delay. But where no such loss or damage is thereby incurred by the drawer, the delay in presentment does not discharge either the drawer or indorser. The natural inference from that exposition of the law would be that a check is always due and payable, whenever presented, it matters not how long the delay in presentment continues, short of the statutory period of limitation. And this -is true, where the check is not sub- ject to some defense which could be successfully set up against the payee. In other words, in order that an in- dorsee or transferee of a check may claim the protection of a bona fide holder, and the right to hold and enforce the check, free from the defenses not appearing on its face, the check must have been transferred wilhin a reasonable time after its original negotiation. Generally stated, the lapse of time must not have been so long that in the light of the circumstances of the particular case, it is sufficient to arouse the suspicions of a reasonably prudent man of the existence of son;3 defense to the enforcement of the check. The actual length of time, which would be con-idered sufficient to make the check stale or overdue, varies with the ciicumstances of each case. 2 But the time of the delay is computed from the actual 1 §171. - First Nat. Bk. v. Harris, 108 Mass. 514 (four days, not overdue); Ames?/-. Merriam,98 Mass. 29-t (ten days, not overdue) ; Cowing??. Altraan, 71N. Y.435 (27 Am. Rep. 70) (one year, fctale) ; Davis u. Dayton, 27 N. Y. S. 9G9; 7 iMisc. 488 (two days, not overdue) ; Skillmau v. Tilus, 3 Vroom. (31 N. J. L.) 9(i (2^ years, stale); First Nat. Bk. v. Needham, 29 Iowa, 249 (six months, stule) ; Ilimmelmnnu. HotaIinke the use of certified checks necessary, the persons who receive them can always require them to be certified before delivery. If they receive them uncertified, and then present them to the bank for certification instead of paj^ment, so far as the drawer is concerned, the certification should be considered as payment. It may also be said that in the second case the certi- fication amounted to an extension of the time of payment at the request of the payees without the consent of the drawers. Before the certification the drawers could have requested the payees to present the check for payment on Saturday, or could themselves have drawn out the money and paid the check. After certifica- tion the amount of the check no longer stood to the credit of the drawers, and tlie payees had Accepted an obligation of the bank to pay only through tlie clearing house, which could not happen before the following IMnnday. Tlie result is that in the first case the judgment is reversed, and the demurrer overruled ; and in the second case the judgment is allirmed. So ordered. ILL. CAS. CHECKS. fCH. XVI. Check must be Presented within a Reasonable Time — Now Generally held Necessary to Present or Forward for Presentment within Twenty-four Hours. Mohawk Back v. Broderick, 10 Wend. 304. This was an action of assumpsit, tried at the Albany Circuit in March, 1831, before the Hon. James Vauderpoel, one of the Cir- cuit Judges. The phiintiffs declared as the indorsees of a check drawn by John Lc Breton, on llie Mechanics' and Farmers' Bank in Albany, for $86.18, bearing date the 14lh J.uuiary, 1830, payable to the order of the defendants, and by tlKin indorsed to the plaintiffs. A special verdict was found, from which the following facts ap- peareJ: The check was drawn previous to the 14th January, post dated, and delivered to the defendants, who transferred it, also before the 14th January, to one Myers, and indorsed their names upon it in blank ; on the 14ih January Myers depos- ited it in the Mohawk Bank at Schenectady, where it w\is received and entered to his credit as casli. On the 3d February, the Mohawk Bank sent the clieck to the Comraerc'al Bank, in Albany, in exchange as cash, which bank caused the check to be pre- sented for payment to the Mechanics' and Farmers' Bank on the 6th February, when payment was refused, the check protested, and notice sent to the defendants. Neither on the 14th Januarj', 1830, nor at any time afterward, had Le Breton, the drawer of the check, any funds in the Farmers' and Mechanics' Bank ; previous to that day he had overdrawn his account $90, which was made good on the 4lh February. At the date of the check Le Breton was a merchant in Albany, doing business and conliouing in business until tlie 1st of Fetiruary, when he slopped payment; during all the month of January he was insolvent and continued so until his death ; none of his debts except the check in question were due until he stopped payment. The average time in which the Mohawk Bank makes its exchanges with the Albany banks is once in three weeks ; from the 14th of January until the 3d February, no packages were sent by the Moliawk Bank to the Albany banks, nor were any exchanges made between those dates by the Mohawk Bank with the Albany banks. When the Moliawk Bank holds notes payable at Albany, they are sent when about to fall due to tlie All)any banks for collection, although the usual time for making exciianges has not arrived ; but between tlie above dates no notes were sent to Albany by the Mohawk Bank. A daily mail passes between Schenectady and Albany. Savage, C. J. Upon the facts presented by the special ver- dict, the plaintiffs contend that no demand was necessary, as the drawer had no funds in the hands of the draweps, and was insol- vent ; and if a demand was necessary it was made in a reasonable time. The defendants insist that the check having been drawn and negotiated before its date, it was payable on the day of its 478 CH. XVI.] CHECKS. ILL. CAS. (late, to wit, the 14th January, and should have been presented when ])ayable, and, at all events, that it was not presented in a reasonable time. I cannot assent to tlie proposition of the plaintiffs, that no demand was necessary in this case. When the action is against the drawer, who has drawn where he had no funds, nor any rea- sonable exjieciatioii that his draft would be paid by the drawee, be cannot ol»jcct the want of seasonable demand and notice, be- cause in such case he cannot possihly susiain damage from the Want of presentment of the bill ; such, however, is not this case. This suit is brought not against the drawer, but indoi sers. The rule on this sultject is well laid down by Mr. Justice Sutherland, in Murray r. Judah, 6 Cowen, 490: " As a general rule, there- fore, a check is not due from the drawer until payment has been demanded from the drawee, and refused by him. As between the holder of a check and an indorser or third person, payment must be demiudetl within a reasonable time. But as between the holder and maker or drawer, a demand at any time before suit brought is sutficient, unless it appear that the drawee has failed, or the drawer has in some other manner sustained injury by the delay." Between thesie patties a demand of payment from the drawees was clearly necessary. Nor can I assent to the proposition of the defendant, that the check in question is a bill payable on the 14th Januuy, and that, therefore, it is to be governed by the same rules as l)ills payable on a particular day. The check was both drawn and negotiated before its date, the effect of which is that it is payable on demand, on or after the day on which it purports to bear date, and nothing more. The only serious question is whetlier the clieck was presented in reasonable time. In the Merchants' Bank v. Spicer, 6 Wen- dell, 445, Mr. Justice Marcysays: " Checks are considered as having the character of inland bills of exchange, and the holder thereof, if he would prove liis right to resort to the drawers and indorsers, must use the sami diligence in presenting them for payment and in giving notice of default of the drawer that would be required of him as ihe holder of an inland bill." With regard to inland bills of exchange and promissory notes payable on demand, the only rule as to when payment must be demanded is that it must be done within a reasonable time. What shall be deemed a reasonable time must in some measure depend on the circumstances of each particular case. In this court, whether the presentment is made within a reasonable time, is held to l)e a question of law, where there is no dis|)ute about facts ; in some other courts it is held to be a question for the jury. It is sin- gular that so little is to be found in the books upon the question, What time is reasonable? As to bills and i)romissory notes, we have in our own court some cases. In Aymar v. Beers, 7 Cowen, 711, Mr. Justice Woodworth has reviewed the cases, from which it appears that no precise time has been determined upon as a reasonable lime. In that case the bill was drawn in 47i» ILL. CAS. CHECKS. [CH. XVI. New York upon a house in Richmond, Virginia, at three days' sight ; it was presented in twenty-nine days, and held to be in time, in consequence of peculiar circumstances. In Robinson v. Ames, 20 Johns. R. 146, seventy-five days had elapsed, and it was held that there was no laches ; in that case the bill had been negotiated. In both these cases the action was against the drawer. Although it has been often said that checks are like inland bills of exchange, and are to be governed by the same principles, yet I apprehend greater diligence has been required in present- ing checks than ever has been required in presenting bills of exchange. In Mechanics' Bank v. Spicer, before cited, it was held that it was not indispensable that a clieck should be pre- sented on the same day it was drawn, where the parties all resided in the same city. Mr. Chitty, in his treatise on bills, has collected many of the cases on this point, p. 345 to 353, Phil. ed. of 1821. When this question has been decided by juries no uniform rule could prevail ; in some, three or four or five days were deemed not too long, and in others it was held that the demand should be on the same day. But the more recent rule seems to be that a check given and payable in London in the morning must be presented the next morning, or, at farthest, during the banking hours of the next day ; if it be pay- able at a place different from where it was drawn, it should be sent by the mail of the next day. In the case of Beeching v. Gower, 1 Holt, 313, the plaintiffs were bankers at Turnbridge. On the 5th March, 1816, they received from the defendant a note of the Kentish Bank, pa3'able at Maidstone and at London. They sent it to London on the evening of the 5th ; on the 6th it was presented, but the house had failed ; it was returned to the plaintiffs on the 7th, and notice given to the defendant. The Maidstone Bank paid on the 6th, but stopped payment on the 7th. Maidenstone is fourteen miles from Turnbridge ; London is more than twice the distance. In this action the plaintiffs recovered. In another case between the same parties, the defendants paid the plaintiffs a check on the Maidstone Bank on the 5th April. The plaintiffs kept it the 5th and 6th, and sent it to Maidstone on the 7th but the bank did not open that morning. Had it been sent on the 5th or 6th it seems it would have been paid. Gibbs, C. J., nonsuited the plaintiffs, saying: "The plaintiffs cannot recover; they have been guilty of laches. I will not say that it was their duty to have sent the checkoff by the post of the 5th; but the extreme time up to which they were justified in keeping it, was till the post of the 6th. They did not send it till the 7th. It does not matter when the carrier arrived ; they must suffer for their negli- gence." In Richford v. Ridge, 2 Campb. 537, Lord Ellen- borough says: " It seems convenient that a check received in the course of one day should be presented the next, and that the holder must present it with due diligence to the bankers on 480 Ctt. XVI.] CHECKS. ILL. CAS. whom it was drawn, and give notice of its dishonor to those against whom he seeks a reraed3\ In that case it appeared tliat the plaintiffs were bankers at Aylesbury. On the 13th June they cashed for the defendant a check drawn by a house in Smithfield upon a house in the city of Lon- don. The plaintiffs mio^ht have sent the check on the same day, but they did not till the next, the 14th ; their agents pre- sented it on the 15ih, when it was dishonored, and notice was given on the IGth. The plaintiffs had a verdict. Tiiese were nisiprius cases, l)ut the cause of Robson v. Bennet, 2 Taunt. 389, was argued and considered by tlie court. MansOeld, C. J., cites the case of Appleton v. Sweetapple, as deciding that a check need not be presented on tlie day on which it is drawn. In Cor- nell V. Lovett, 1 Hall, G8, Mr. Justice Oakley says the rule appears to be settled that no laches can be imputed to the holder if the check is presented at any time during the day after that on which it was given. The true rule undoubtedly is, that a check, to charge an indorser, must be presented with all the dispatch and diligence which is consistent with the transaction of other commercial concerns. The plaintiffs received this check on the 14th January. They were in the habit of sending notes at other times than their regular periods of exchanging, according to the time of their fall- ing due ; there was nothing in the nature of their business, therefore, which prevented an earlier presentment of the check in question. According to the cases above referred to, the check should have been sent on the loth ; it would then have been presented on the IGth. Had notice of its dishonor been then given, the court cannot say tiiat the defendants might not have secured themselves, as tlie drawer was doing business for two weeks after that time before he stopped payment. I am of opinion the defendants are entitle to judgment. Payment of Checks Through Clearing^-House — Effect of Contract for Clearance on Obliyratiou to Honor Checks on Insolvent Bank. O'Brien v. Grant, HG N. Y. 1G3 (40 N. E. 871J. Appeal from supi-eme court, general term, First department. Action by Miles M. O'Brien and another, receivers of the Madison Square Bank, against Hugh J. Grant, receiver of the Saint Nicholas Bank, to recover certain securities. From a judgment of the general term (32 N. Y. Supp. 41)8) affirming a judgment dismissing the complaint, plaintiff appeals. Aflirmed. This action was brought to recover from the defendant certain securities which had been deposited by the Madison Square Bank with the St. Nicholas Bank, and the proceeds of the securities, which the latter bank had converted into money. The following yi 481 ILL. CAS. CHECKS. [CH. XVI. facts were found, and are either undisputed or proved : In Jan- uary, 1891, an arrangement was made between the Madison Square Bank and the St. Nicholas Banlc (both of them being State banks) by which the latter bank, which was a member of the New York Clearing-House Association, became the agent to clear, through the clearing house, checks drawn upon the Madison Square Bank. The St. Nicholas Bank submitted in writing a memorandum of the conditions on which it would undertake this business for the Madison Square Bank, as follows: " $50,000 bal- ance to be kept at all times, to be free from interest. An allow- ance at the rate of 2 per cent per annum shall be allowed on average exceeding this amount. Tiie Madison Square Bank is to keep with this bank $100,000 in approved bills receivable." In a letter dated January 9, 1891, addressed by the Madison Square Bank to the St. Nicholas Bank, the cashier of the Madison Square Bank says: "Referring to conversation of our president with your good selves, we would say that we accept the terms and conditions on which your bank agrees to clear for us as per your memorandum, namely $50,000 balance to be kept with you at all times, free of interest. Interest at 2 per cent per annum to be allowed us on average exceeding that amount. This bank to keep with you $100,000 of approved bills receivable. * * * We inclose copy of a letter addressed by us to the clearing-house committee to conform with the requirements of their circular of December 18th, last." The letter to tlie clear- ing-house committee inclosed a copy of a resolution signifying the acquiescence of the Madison Square Bank with the terms of the circular, and authorizing its cashier to send a check for the annual payment of $200 required of banks clearing through mem- bers. It was verbally agreed between the parties, at the time of the arrangement referred to in said letter of the 9th of January, that other securities, of equal value, might be substituted from time to time for those first deposited, making up the $100,000 of bills receivable. The Clearing-House Association was and is a voluntary association of banks and banking associations of the city of New Yoi-k. The object of the association, as stated in its constitution, is " tlie effecting at one place of the daily ex- changes between the several associate banks, and the payment at the same place of balances resulting from such exchanges." The St. Nicholas Bank was a member of the association. The Madison Square Bank was not so. Section 25 of the constitution was as follows: "Whenever exchanges shall have been made at the clearing-house, by previous arrangements between members of the association, through one of their number and banks in the city and vicinity who are not members, the receiving bank at the clearing bouse shall in no case discontinue the arrangement with- out giving previous notice, which notice shall not take effect until the exchanges of the morning following the receipt of such notice shall have been completed." This section was in force at and before January 9, 1891, and is still in force, and it was known to 482 CH. XVI.] CHECKS. ILL. CAS. be so by the Madison Square Bank at the time of the making of this arrangement. After the m:ikiag of this arrangement, and on and after the 13th January, 1891, the St. Nicholas Bank made the clearances at the clearing hoube for the Madison Square Bank up to and including the 8th day of August, 1893; and the Madison Square Bank deposited and kept good, as to amount and value, its deposit of bills receivable with the St. Nicholas Bank, and up to some time in July, 1893, kept good its money balance of $50,000 in addition thereto. Some time prior to August 8, 1893, the St. Nicholas Bank desired to terminate the arrangement for making clearances for the Mailison Square Bunk. At that date it held, also, certain coUaterul securities, taken upon loans made upon notes of the Madison Square Bank, and by atrreement they or their pro- ceeds should be applied to any other ol)ligation3 of that bank. On the 8th day of August, 1893, the St. Nicholas Bank gave the notice required by the twenty-fifth rule, — that it would cease to make clearances for the Madison Square Bank. This was seived upon the banks constituting tlie Clearing House Association on that day. By the terms of section 25 this notice took effect upon the completion of the exchanges at the clearing house on the 9th of August. These clearances were made every day immediately after 10 o'clock, and were completed before 12 o'clock. The St. Nicholas Bank paid on the 9lh of August, through the clearing house, checks drawn ui)on the Madison Square Bank by depos- itors having amounts to meet the same to their credit as depositors on the books of tlie Madison Square Bank, $372,000. On the 8th day of August, 1893, the Madison Square Biink, after ineffectual efforts to obtain a loan to relieve its immediate necessities, was visited by the clearing-house committee and its condition exam- ined ; also by an officer of the State bank dej)artment. After this examination by the committee of the clearing house, their conclu- sion that the bank was not in a condition to continue business was communicated to the officers and some of the directors of the Mad- ison Square Bank. The Madison Square Bank di(i not 0[)en for business on the following day. It was, in fact, insolvent on the 8th of August, 1893; and the officers of tlie St. Nicholas Bank knew before the exchanges were made on the 9th of Au>rust, that the Madison Square Bank was insolvent, or that its insolvency was im- minent, and that it had stopped business. Included in the gross sura of $372,000, the amount of the checks upon the Madison Square Bank cleared by the St. Nicholas Bank on the 9lh of August, were two cheeks drawn by Elliott Danforth, the treas- urer of the State of New York, against funds of the State depos- ited in the said bank, which cheeks were signed and dated on the 8lh day of August, 1893, anci were dei)()sited in banks in the city of New York which were members of the Clearing-IIouse Associ- ation, before 10 o'clock on the morning of the 9th of August, 1893, and were by such banks sent to the clearing house on said 9th day of August. The clearance of said checks was regular, and according to the usual course of business among the banks 483 ILL. CAS. CHECKS. [CH. XVI. constituting said Clearing-House Association, notwithstanding the fact that they were not deposited for collection with a clear- ing-house bank until tlie morning of the 9th day of August, 1893. The St. Nicholas Bank had no knowledge on the 9th day of August, 1893, of any irregularity in regard to the drawing, deposit, or transmission to the clearing house of any of the checks going to make up said gross amount of $372,000. The referee found that the payments of checks on tlie morning of August 9, 1893, were in the performance of its contract with the Madison Square Bank, and "were not made with the intent on the part of either of the banks to give a preference to any creditor of the Madison Square Bank over any other creditor, or in violation of the corporation law of the Slate, and he held that the plaintiffs were not entitled to recover any part of the money or securities held by the St. Nicholas Bank. From the affiraiance of the judgment entered upon his report, at the general term, the plaintiffs have appealed to this court. Louis Marshall, for appellants. William Allen Butler, for respondent. Gray, J. (after stating the facts). The St. Nicholas Bank claims tlie right to apply the securities and moneys theretofore deposited with it by the Madison Square Bank towards the reimbursement of its payment or clearances of the morning of August 9, 1893. With respect to that claim tlie proposition of the plaintiffs is twofold : They say that rule 25 of the clearing house did not require the St. Nicholas Bank to clear the checks drawn on the Madison Square Bank, presented after it became aware of the insolvency of the latter, and that such insolvency terminated the relation of clearing-house agents, and rendered any payments made unauthorized; or, if the clearing- house rule is susceptible of the interpretation that it required the St. Nicholas Bank to honor checks drawn on the Madison Square Bank after its insolvency became known to it, the contract between the banks, in so far as it contemplated such payment, and the use of the securities of the Madison Square Bank to secure the advances made by the St, Nicholas Bank, was an illegal preference, under the statute. The controversy must turn, in my opinion, upon the nature of the relation which existed between the two banks in question and the clearing house, and upon what was the extent of the obligation entailed upon the St. Nicholas Bank, in engag- ing to receive and to clear checks drawn upon the Madison Square Bank, when presented at the clearing house. For the plaintiffs it is argued that, as between the Madison Square Bank and the St. Nicholas Bank, the relation, simply, of principal and agent was created, and therefore, unon the insolvency of the former becoming known, on the morning of the day when clear- ances of the previous day's checks were to be effected, that the latter bank was not entitled to pay checks drawn upon the former bank. But I think to view the relation as such is altogether incorrect, and unwarranted by the facts. In a certain and 484: err. XVI.] CHECKS. ill. cas. limited sense, the St. Nicholas Bank, of course, would act as an agent, in clearing and paying checks drawn upon the Madison Square Bank. That, however, was a mere feature of that larger contractual relation into wliich the two banks had entered with the Clearing-House Association, and wliith characterized all their dealings. The agreement of January, 1891, was one to which there were three parties, eacii of which was moved to enter into it by a legitimate consideration. The Madison Square Bank accjuired tlie very substantial advan- tages which tlie members of tlie Ciearing-House Association en- joyed, in the increased convenience, dispatch, and safety of banking transactions. The St. Nicholas Bank acquired the advantage, benefit, and a protection )>y the deposit of collateral securities to the amount of $100,000, and of the cash, required to be made by the Madison Square Bank. The cash deposit was to be free of interest, and maintained at a da ly balance of $50,- 000. The members of the Ciearing-IIouse Association, in extend- ing to the Madison Square Bank the riglit to have its checks cleared and paid through one of its members, were assured that all checks presented would be paid up to, and including, the day following the giving of the notice by the St. Nicholas Bank of the termination of the arrangement between itself and the Madison Square Bank. The learned referee veiy correctl}^ defines the arrangement between tliese two banks and tiie clcaiing house as constituting a tri[)artite agreement, upon ample consideration, for the mutual benefit of all the parties who entered into it. That agreement jjrovided for the length of its duration, for the maintenance at all times of the stipulated security to protect the St. Nicholas Bank, and bound that bank to receive and pay the checks drawn upon the Madison Scpiare Bank as it would its own. The St. Nicholas Bank could only agree and arrange to clear for th.e Madison Square Bank in accordance with conditions imi)osed by the constitution and rules of the Clearing-IIouse Association ; and an essential condition was that the arrangement could not be discontinued, nor should its liaf)ility cease, until after the completion of the exchanges of the morning next following the receii)t of a notice of discoiUinuance. There was nothing in such a provision of the constitution of the clearing-house which was objectionable, legady speaking or otherwise. It was perfectly com[)etent for the banks to form themselves into this voluntar}' association, and to agree that they should be governed by a constitution and by rules. When adopted, they expressed the contract by which such mem- ber was bound, and which measured its riiihts, duties, and lia- bilities. Belton V. Hatch, 109 N. Y. 503; 17 N. E. 225. If not in conflict with rules of law, they must bo awarded that effect which is always accordcMl t ) the deliberate engagements of parties. The provisions of section 2.") of the constitution of the Clearing- IIouse Association were designed as a security and a protoctioa for the members, in the event mentioned. When the Madison 485 ILL. CAS. CHECKS. [CH. XVI. Square Bank made its arrangement with the St. Nicholas Bank, and also made compliance with the terms of tlie demand of the clearing-house circular, I think it is clear that a definite con- tractual relation was at once created between the three parties, whose provisions and relative engagements were effectually defined in and controlled by the constitution and rules of the clearing house, in so far as tliey touched the proposed clearances of checks. The contract which bound the members of this vol- untary associations of banks, and regulated their duties, rights, and liabilities, perraiited the repi'esentation of an outside bank through a member, provided that member assumed a liability which should not cease until the completion of clearances on the morning next after its notice of a discontinuance was given. That liability so exactly provided for is, however, sought to be limited to cases where insolvency has not supervened, as to the non-member bank. If the relation here was strictly that of an agent acting for a principal, the question might be a serious one ; but even then much might be said in favor of the liability which the agent had, with the consent of the principal, assumed. That, however, was not the relation. The Madison Square Bank was a contracting party in an agreement to which tlie other parties were the Si. Nicholas Bank and the Clearing-House Association, and it had accepted, and had become bound by, provisions in the latter' s constitution and rules. That agreement was entered into at a time when it was perfectly competent to make it, and its duration was fixed by section 25 of the constitution of the clearing house. As tlie res|)ondent's counsel says, every bank entitled to the payment of checks sent by it through the exchanges of the clearing house, in due course, had aright to rely upon the liability of any other bank clearing for a nonmember, and unless this liability continued definitely, and up to a certain period, the liability of the clearing bank would not be fixed and enforceable. Here the effect of the constitution and rules of the clearing house upon the agreement was as though it had been stated, in so many words, that it should commence upon January 13, 1891, and should be at an end on August 9, 1893, after the clearances of that day had been completed. What was there in the agreement and its incidents which contravened any rule of law or of policy? The plaintiffs say that the effect is to give an illegal preference, under the statute, which, it is meant, would be accomplished by the payment of checks after the insolvency of the nonmember bank is known, and by the use by the clearing bank of the deposited securities in reimbursement thereof. To that I cannot agree. The statute referred to is the State corporation law (chapter 688, Laws 1892), which, in section 48, contains previ- ously existing provisions of the banking law of this State. The provisions of the section forbid the assignment or transfer of any property " when the corporation is insolvent, or its insolvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of 486 CH. XVr.] CHKCKS. ILL. CAS. the corporation." This provision has no application to such a case as tliis, where, at the time wlien the arrangement was made with the St. Nicholas Bank, the Madison Square Bank was sol- vent. It would be absurd to speak of the agreement of January', 1891, as having been made in contemplation of future insolvency, or with the intent to give a preference to any creditor of the Madison Square Bank. If there is any presumi)tion respecting the business engagements of going concerns, it is that they will be fulfilled ; and when securit}'^ is exacted, it is a business precau- tion, to compel exact and prompt performance, rather than a provision in contemplation of insolvency. If it were otherwise, business transaeti(jns which have for their subject the accommo- dation of one corporation by anoiher in the loan of money, or the extension of credit, would be seriously embarrassed, if not checked. The statute recognizes the right of a banking corpora- tion to transfer promissory notes or evidences of dt'l)t, received in the transaction of its ordinary business, to purchasers for a valuable consideration ; and it may lawiu ly do so in pledge to secure its creditor, wlien it is in a condition of solvency. The deposit of securities made by the Madison Square Bank with the St. Nicholas Bank constituteci a lawful pledge of its assets to pro- tect the former against any possible loss in undertaking to clear and pay all checks drawn ui)on the latter, and sent through the clearing house. The invalidity of a transfer or assignment of property by a banking corporation, under the banking law, is where it has been matle while in a condition of insolvcncv, or in contemplation of it, and with the " intent" of giving a preference. The "intent" must exist, and be inferable, to vitiate the transaction. In this connection our recent decision in Bank v. Davis, 143 N. Y. 51)0 ; 37 N. E. 616, may be referred to, where the question involved was whether the preference given to savings bank deposits by the State banking law was in contravention of the United States national banking law, which avoids transfers or assignments or deposits made with a view to prefer a creditor. It was there said — and the observation is applicable here —that " it is the voluntary act of the national bank, in contemplation of its insolvency, and with the view of then preventing tiie ratable application of its property, which is avoided b}' the natiijnal law. In the present case, while a going concern, it entered into an engagement with the savings bank, which the State law required and regulated, which vested in the latter superior rights or equities, and which, in the possible event of future insol- vency, would give to it a prior claim to payment from the assets. When that event happened, and the receiver was appointed, he took over the property of the insolvent con- cern, as trustee for its creditors and shareholders, under the same conditions as the bank held it, and subject to the right of this plaintiff to l)e the first paid in full before other creditors were paid." So I say here the plaintiffs, U|)on becoming vested, as receivers, with the property of the insolvent Madison Square 487 ILL. CAS. CHECKS. [CH. XVI. Bank, held it subject to all rights lawfully' acquired, and to all superior equities, among which was the right of the St. Nicholas Bank, by virtue of an agreement valid in its inception and at all times, to apply the securities in its possession in reimbursement of its payments of checks presented through the clearing house on the morning of August 9, 1893, — payments which it was obliged to make, as well by the rule of commercial honor as by force of the obligations imposed by the constitution and rules of the clearing house. Nor do the cases of Overman v. Bank, 30 N. J. Law, Gl, and Merchants' Bank v. National Bank, 139 Mass. 618; 2 N. E. 89, referred to, touch tbis question of the obligation of the clearing bank under the constitution and rules of the clearing house, and with reference to which the nonmember had contracted, — a distinction recognized in the Overman case cited. The plaintiff's counsel suggests a possible illustration of the effect of the construction, which is given to this section of the clearing-house constitution. He says all the credit- ors of the Madison Square Bank, becoming aware of its insolvency, might have drawn checks upon their de- posits, and, if they succeeded in getting them presented by clearing-house banks, the St. Nicholas Bank would have been compelled to pay them, to its possible ruin. The illustration, however, proves nothing. That may be said to have been a risk assumed by the St. Nicholas Bank, but very much of the business of the land, and especially that portion which is done in Wall street, is conducted upon faith ; and experience has shown that it has not, in the main, been misplaced. For such a contingency as counsel suggests, it was- necessary that the officers of the Madison Square Bank should have been parties to an immoral and illegal scheme. The St. Nicholas Bank must be deemed to have contemplated and to have assumed every risk, in undertaking to become responsible for the Madison Square Bank, and to have exercised such reasonable judgment in doing so, and to have taken such security against loss therein, as the practical observa- tion and the business experience of its officers suggested. The conclusion I have reached is that the insolvency of the Madison Square Bank did not excuse the St. Nicholas Bank from theperformanceofitsobligationstowardstheclearing-house banks. What rather empliasizes the Interest in the question of the right of the St. Nicholas Bank to clear and pay on August 9, 1893, all the checks drawn upon the Madison Square Bank and presented by clearing-house banks, is the fact that there were four checks, ex- ceedingin the aggregate the sum of $300,000, whichwere drawn un- der somewhat peculiar circumstances. I may refer to two of thtm, ao-areirrating $250,000, which were drawn Ijy Mr. Danforth, then State treasurer, on August 8, 1893, who had heard enough, in some way, to take alarm at the situation of the Madison Square Bank, with which were Slate funds oti deposit. He aa-rauged to deposit them with the Manhattan Trust Company, which kept 488 CH. XVI.] CHECKS. ILL. CAS. accounts with the Chase and the Continental National Banks, and which had its checks cleared through them. The two checks were handed into the two banks at a little before 10 o'clock of the morning of August 9, 1893, and were at once sent, with all other checks, to the clearing house, where the business of clearances commences to be transacted at 10 o'clock. The evidence conclu- sively shows that there was nothing unusual in this transaction. It is the general and invariable custom of the b:ink3 in New York City to pass all checks dated u[)on the previous day, and received between 10 o'clock of that day and 10 o'clock in tlie morning of the day following, by hand or by mail, through the clearing house, with the clearances of that morning. Checks may come in the morning by mail, or may be brought in by local deposi- tors, before 10 o'clock; and it is considered to he regular, and in the exercise of i)usiness prudence, to have them cleared as promptly as the rules allow. In this case there is nothing to show that the officers of the Madison Square Bank knew of the manner in which the State trettsurer's checks were deposited for payment by the Manhattan Trust Company, or that they had anything to do with their drawing. It ap[)ears tliat that com- -pany acted in good faith in the matter, and Mr. Waterbury, its president, testified that there was nothing unusual, or contrary to the usual course of business, in getting Mr. Danforth's checks put promptly through the clearing house that morning; and it is difficult to see how )t would be material, if it was otherwise. As to the two banks wliich acted for the trust company, they appear to have merely performed their duty to their depositor, in pass- ing the checks severally through the clearing house. Nor can it be pretended that the St. Nicholas Bank had any knowledge or notice respecting these checks, or any of the checks, which it paid in ils clearances of August 9lh. Its officers had no knowl- edge of the insolvency of the Madison Square Bank until that morning. Ils notices of the day previous, to the various banks, that it would no longer continue to clear for the Madison Square Bank, were based on a dissatisfaction with its failure to keep good its promised daily cash balance of deposits. Until the clearing-house committee completed ils examination of the condition of the latter bank, in the afternoon of the 8lh (}f August, it was not known how it stood. The time was one of great excitement and of distrust in financial cir- cles, wliicli cast its shadow over many banks ; and a bank to justify be ing assisted l)y the associated bank, must show itself to possess sufficient resources, in the possession of assets of real value. Tlic altonlion of the clearing-house committee being called to the Madison Square Bank, their examination resulted in the advice that it should suspend. They diil not decide as to the solvency of the bank. It mi<:ht resume, if it succeeded in making such arrangements as would put it in the possession of funds by realization upon its assets. However that might be, the bank decided not to open its doors on the following morning. It was 489 ILL. CAS. CHECKS. [CU. XVI. sffirmatively testified to by the cashier of the St. Nicholas Bank that they had no suspicion of tlie inability of the Madison Square Bank to continue its business, when sending out notices to other banks, but thought it unsafe to continue clearing for it, in view of its past conduct. If the evidence showed any knowledge in the St. Nicholas Bank as to the particular checks, as to which so much has been urged, and which it paid in the clearances of the morning of August 9th, or if it had such nolite concerning the designs of their drawers as to make it an abettor in an unlawful scheme to obtain a preference over other creditors, a very differ- ent question would be presented. But there was nothing whatever to charge it with any knowledge or notice, and all the evidence goes to prove that it acted in perfect good faith ; and that being so, and its payment of checks passing through the clearing house on the morning of August 9th having been made in discharge of the liability resting upon it, under the constitution and rules of the association, it cot only could not, but it should not, be made to suffer a loss. The knowledge possessed by it, in common with the public, in the morning of August 9th, did not change its position or affect its liability. The presumption was thi.t every check presented at the morning's clearances was held for value, and it was for the plaintiffs to rebut that presumption, and to show that the banks presenting checks were not acting in good faith in what they did, but merely as agents for the drawers, in obtaining the funds drawn against. They failed to do so. More than that, the evidence established the contrary, except in the possible instances of the two checks drawn by the Uhlmans, which were two of the four checks I mentioned as taking the clearances of August 9, 1893, out of the ordinary. I deem it unnecessary to discuss the facts respecting them. The St. Nich- olas Bank was in no respect more informed about their making or their collection than it was about the other checks. If there was anything irregular concerning them, I agree with the learned referee that the question would affect, not the St. Nicholas Bank, but the right of the bank which presented them to hold their proceeds. If we leave out of consideration the two Uhlman checks, the balance of account is still against the plaintiffs and their action would have to fail any way. For these reasons, as for those which were well expressed by the very learned referee, and with which they are in harmony, I think the judgment below was right, and I advise its affirmance here. All concur, except An- drews, C. J., and Peckham, J., dissenting. Judgment affirmed. Liability of Collecting- Bank for Worthless Check Received hy it in Payment of Note — When Check Operates as Assignment pro tanto of Fund on Deposit. Bank of Antigo v. Union Trust Co., 149 111. 343 (3G N. E. 1029). Appeal from appellate court first district. Assumpsit by the Bank of Antigo against the Union Trust 490 CII. XVI.] CHECKS. ILL. CAS. Company upon a check drawn on the defendant by A. Weed & Co. Defendant obtained jiidgraent, which was affirraed by the appellate court. Plaintiff appeals. Afflnned. On and prior to September 2, 1890, A. Weed & Co. were doing business at Ashland, Wis., and that day delivend their chick for $3,000, drawn upon appellee bank, to appellant, and took up a note owned by appellee, then due, against Hoxie & Mellor, theretofore sent to appellant by appellee for collec- tion, and on which A. Weed & Co. were indorsers. The check was as follows: "Chicago, September 2d, 1890. The Union Trust Company: Pay to the order of Amos Baum, cashier, three thousand dollars. A. Weed & Co." The said Baum, cas'hier of appellant bank, accepted the check as so much cash, canceled the note, delivered it to A. Weed & Co., and remitted the amount, less $3 charges, to appellee by draft on appellant's cor- respondent, the Merchants' Bank of Chicago, wliich draft was duly paid, etc. The check was also sent to the Merchants' Bank of Chicago by appellant for collection, and presented to appellee for payment on September 4, 1890, and dishonored ; whereupon due protest was made, etc. On August 25, 1890, upon certain representations made by A. Weed & Co., appellee was to, and di 1 on Se|)lemher 3d following, discount for them $11,2I9.G5 of Hoxie & Mellor paper, the same being three notes of $3,000, S3. 000, and $5,430, respectively. On Sept("ml)er 2<1, A. Weed & Co. had to their credit on the books of appellee $809.25, and on that day and the following, prior to credit- ing their account with the proceeds of tlie discounted paper, had overdrawn their account to the amount of $5,760.57; so that, after deducting overdrafts, a balance was left to their credit on ap[)ellee's books, at the close of business on September 3d, of $5,489 08. On the evening of this day, appellee became aware of the failure of Hoxie & Mellor, and at the opening of business on the morning of September 4th, cli:irged back to A. Weed & Co. the $5,430 note, less discount ($85.05), and returned it to them with the following letter: "Chicago, September 4, 1890. Messrs. A. Weed «fc Co., Ashland, Wis. — Dear Sirs: Upon being infoinied yesterday that Messrs. Hoxie & Mellor had failed, we deducted the amount of the note of $5,430, less discount, $85. ()9, — $5,344.31, — from j'our account, and herewith return the note. Yours, respectfully, G. M. Wilson, Cashitr," — thus leaving a balance to the credit of A. Weed «fe Co. of $144.77 at the time of tlie presentation of the check for payment on that day. An action was brought by appellant ngainst appellee on the check in the circuit court of Cook county, and resulted in verdict and judgment for appellee. On appeal to the appellate court, this judgment was tillirmed, and plaintiff below prosecutes this further ai)peal. SiioPK, J. (after stating the facts). It is contended that the contract between a|)pellee and Weed & Co. under wliich the three notes of Mellor & Hoxie were discounted was an entire 491 ILL. CAS. CHECKS. [CH. XVI. contract, and that appellee had no right to rescind as to the $5,430 note, and retain the proceeds of the two $3,000 notes. It is true, as stated by counsel for appellee, that the general rule is that, when a party wishes to rescind an entire contract, he must rescind it in tuto or not at all. Harzfeld v. Converge, 105 111. 534. But it is not to be overlooked that this is a rule of con- struction, based upon the intention of the parties to the contract, and not a rule of law controlling that intention. 2 Pars. Cont. 521. Conceding that the discounting of the notes in question constituted a contract between appellee and Weed & Co., it does not appear from the record, nor is it claimed, that Weed & Co., have treated or sought to treat the contract as entire and indivis- ible. On the other hand, it does appear that the $5,430 note was returned to them by appellee, with a letter informing them that, having heard of the failure of Hosie & Mellor, the makers of the notes, the amount thereof had been deducted from their account, etc. Weed & Co. on September 6, 1890, sent this note back to appellee, who, on the 8th, again returned it to Weed & Co., who, ib seems, retained it. The letter of Weed & Co. of the 6th, or their purpose in returning the note, is not shown. Nor does it appear that they then or afterwards asserted or undertook to assert under the contract any right against appellee. In the absence of any proof to the contrary, it may, we tiiink, be said that Weed & Co. by their silence have themselves elected to treat the contract as rescinded as to the $5,430 note. If A. Weed & Co. have acquiesced in the rescission of the contract as to the $5 430 note by appellee, it cannot be in the logic of things that apptllaut can succeed to any greater rights under the contract than A. Weed & Co., who, as we have seen, in the absence of countervailing proof on that question, have elected to acquiesce in the rescission. Appellant being under no constraint, in order to protect its own interests or rights, to pay the debt of A. Weed & Co. to appellee, l>ut having, as will be seen, paid the same voluntarily, could not be subrogated to the rights of A. Weed &, Co. in the premises. Hough v. Insur- ance Co., 57 111. 318; Young v. Morgan, 89 111. 199; Beaver v. Blanker, 94 III. 175. But were the foregoing considerations not warranted by this record, we think, under the facts in this case, that the discount- ing of the notes constituted an apportionable contract. The record shows that in its letter of Septeml)er 1, 1890 (in reply to one from A. Weed & Co. containing the proposition for dis- counting $15,000 of Hoxie-Mellor paper), appellee said that it could " use, say, $10,000 of the paper" referred to "from Sep- tember 1st to 4th," and that, under this arrangement, the three separate notes above mentioned were discounted by aiipellee. It is not contended tliat appellee had not the right, had the integrity of the notes at the time been questionable, to have refused to discount any or all of them. Kach note constituted, in and of itself, a se, arate and independent contract, upon a distinct con- 492 CH. XVI. J CHECKS. • ILL. CAS. sideration, and the books of the bank show that they were dis- counted as separate and distinct entries. The rule as laid down by Mr. Parsons (volume 2, star p. 517) is: "If the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the otlier is apportioned to each item to be performed, or is left to he implied by law, such a contract will generally be held to be severable." Anl Mr, Wharton (Cont., § 748) says: " Wlieu a consideration is divisible, and the i)iice can be a|)portioned, then, if a distinct divisible portion of the consideration fails, the price paid for such portion can be rccovoi-ed buck ; " and that, " in cases * * * in which the consideration is divisible, the purchaser may elect to take what can be delivered to him, and in such case, if the purchase money has been paid, he can recover back the excess, or, if there has been no payment, defend pro tanto." See cases in notes. In Manufacturing Co. v. Wakefield, 121 Mass. 91, where the action was an account for certain India-rubber goods sold, and the price of each article, and discount from the gross sum, were stated in the account, the court, in passing upon the question of whether the contract was entire or divisible, said: " We do not deem this contract to have been an entire one. That a contract should be of that character, it is not sufflcient menly tl»at the subjects of purchase are in- cluded in the same instrument of conveyance. If but one con- sideration is paid for all the articles, so that it is not possible to determine the amount of consideration paid for each, the con- tract is entire. Miner v. Bradley, 22 Pick. 457. * * • When many different articles are bought at tlie same time for distinct prices, even if they are articles of the same general descrii)tion, so that a warranty that they are all of a particular quality would apply to each, tlie contract is not entire, but is in effect a sepa- rate contract for each article sold. Johnson v. Johnson, 3 Bos. & P. 162 ; Miner v. Bradle}', supra." To the same effect is the doctrine stated in Wooten v. Walters, 110 N. C. 251 ; 14 S. E. 734, 736, where the sale was of a stock of merchandise and land. It was there said tliat, "though a number of things be bought together without fixing an entire price for the whole, but the price of each article is to be ascertained by a rate or measure as to the several articles, or when the things are of different kinds, though a total i)rice is named, but a certain price is affixed to each thing, the contract in such cases may be treated as a sepa- rate contract for eacli article, although tiiey all be included in one instrument of conveyance or by one contract ; " citing John- son r. Johnson and Miner r. Bradle3', supra. See, also. Hill ?•. Reave, 11 Mete. (Mass.) 268; Gushing r. Rice, 46 Me. 302; Proton r. Spaulding, 120 111. 208 ; 10 N. E. 903. We are, liow- cver, referred by counsel for appellant to the case of Ilarzfeld v. Converse, supra, as maintaining a contrar}- view. Tliis is a mis- apprehension. That case falls clearly within the rule, announced in the Massachusetts and other cases, that where "tlie purcliase 493 ILL. CAS. CHECKS. [CH. XVI. is of goods as a particular lot, * * * or the number of barrels in which the goods are packed, the contract is held to be entire." Manufacturing v. Wakefield, su[)ra, and cases therein collated. Moreover, at tlie time of the discounting of said notes, Weed & Co. had overdrawn their account with appellee $5,760.57. By the judgments of the circuit and appellate courts, the con- troverted question of fact as to fraud on the part of Weed & Co. in the transaction is conclusively settled, and that such fraud was consummated before the paj'ment of Weed & Co.'s over- drafts. This being so, appellee would be exoused from surren- dering up to Weed & Co. the two $3,000 notes. Preston v. Spaulding, supra, and cases cited. We are therefore of opinion that appellee had the right to rescind the contract, as it did, by returning to Weed & Co. the $5,430 note, and charging the same back tj their account. It is also insisted that, although appellee had the right to partially rescind the contract as against Weed & Co. it could not legally exercise such riglit as against appellant, it being a bona fide holder of the $3,000 check in question, drawn by Weed & Co. on appellee. It appears that about September 2, 1890, appellee sent to appellant for collection and returns a $3,000 note, then due, against Hoxie & Mellor, owned by appellee, and upon which Weed & Co. were indorsers. On that day Weed &, Co. gave appellant the check in question, drawn on appellee for the amount of the note, which was at once canceled by appellant and surrendered to Weed & Co. Appellant received the check as cash, and remitted the proceeds, less charges, to appellee, by draft on Blerchants' Bank of Chicago. This remittance was received by appellee on September 3d, and paid. On the next day, about noon, the check sued on was presented to appellee for payment, which was refused. Appellee, in tlie mean- time, between the receipt of the remittance and presentation of the check for payment, having become apprised of tiie business failure of Hoxie & Mellor and the fraud of Weed & Co., had charged back to Weed & Co.'s account, and returned to them, the said $5,430 note, less discount ($85.65), leaving a balance to the credit of Weed & Co. of $144.77, only, when the check was presented. It is not shown or pretended that appellant, in mak- ing collection of said note, was authorized by appellee to receive in payment thereof anything but money. When appellant re- ceived the note from appellee for collection, it then and thereby became the agent of appellee for that purpose ; and the law is well settled that unless such agent is specially authorized so to do, he has no right to accept in payment of his principal's debt anything in lieu of money. Matthews v. Hamilton, 23 111. 470 ; Ward v. Smith, 7 Wall. 447 ; Howard v. Chapman, 4 Car. & P. 508; Story Prom. Notes (7ih Ed.), §§ 115-389, and notes. Being authorized to receive money only, tlie agent has no implied power to receive a check in payment (Hall v. Storrs, 7 Wis, 253) ; and where the collection agent, not being there- 494 CH. XVI.] CHECKS. ILL. CAS. unto authorized, accepts in payment of liis principal's demand a clieck, or depreciated currency, and loss ensues thereby, he must bear it (Ward v. Sraitli, supr'i ; Morse Banks, 431, 432; Harlan v. Ely, 68 Cal. 522 ; 9 Pac. 947). But it is claimed Ihat the drawing of the check by Weed & Co. on appellee operated as an assignment to appellant of so much of the fund on deposit, against ■which it was drawn, as was necessary to pay it. As between the drawer and drawee, this is doubtless correct. Union Nat. Bank v. Oceana Co. Bank, 80 III. 212. But, in order to clmrge the bank with the amount, it is in- dispensable that the check be fir>t presented to it for pay- ment, or some other act done equivalent thereto. This rule was announced in the early case of Munn v. Burch, 25 III. 35, where it was held that the check of a depositor on his banker, delivered to another for value, transfers to the payee therein, and his assigns, so much of the depotit as the check calls for, and that, when presented to the bank for payment, the banker becomes liable to the holder for the amount thereof provided the drawer has at the time sufficient funds on deposit to pay it. And this doctrine has been subsequently reaffiimcd in numerous decided coses in this court, among which see Insurance Co. v. Stanford, 28 111. 1G8 ; Bickford v. Bunk, 42 111. 238 ; P^juitli Nat. Bank ^^ City Nat. Bank, 68 111. 398; Bank r. Jones, 137 111. 634 ; 27 N. E. 533. That appellee had, belween the time of making the check and its presentation for payment, on deposit to the credit of Weed & Co., funds sufficient to meet the check, can have no bearing on the question. Appellee had no notice of the existence of the check until presented for payment, and the deposit against which it was drawn having been, as we have seen, depleted by proper charges and deductions until only a meager sura remained, there was no sufficient fund lelt on deposit out of which it could be paid, and the check was therefore rightfully dishonored. Other errors are assigned, which have been care- fully considered, but, in view of what has been said, no useful purpose would be served by a discussion of them. The judg- ment of the appellate court will be affirmed. Affirmed. 495 CHAPTEE XVII. PAYMENT OF AND BY BILLS, NOTES AND CHECKS. Section 178. Payment distinguished from sale or transfer. 179. Payment by -wliom. 180. Payment to whom. 181. Conditions of Payment — Legal tender — Surrender of paper — Receipt. 182. Payment by bill or note — Presumption as to its absolute or conditional character. 183. Payment by check. § 178. Payment distingTiishcd from sale or transfer. — Payment consists of the performance of a contract, with the intention of extinguishing 1 he liability of the party paying or of tlie party for whcm the payment has been ma;le. The same outward acts may and do often constitute a sale, when the parties intend to transfer, instead of extinguishing, the liability on the contract. In each case the real intention determines the character of the transaction ; and it must be determined, in the absence of an express understanding or agreement, by circumstances which are sufficient in strength to overcome the general presumption of law, that payment of money on a contract is intended as a technical payment, and a consequent extinguishment of the contract or liability on such contract.^ lu ap[)lying this question to payment of bills, notes and checks, the most important circumstance, in determining the character of the transaction, is the relation of the party paying to the bill or other commercial paper. § 179. Paj'ment by whom. — It is a well-settled rule of the law of contracts, that, while only a party to a contract can make tender of payment, so as to affect the claims of 1 Lancey v. Clark, G4 N. Y. 206 (21 Am. R°p. C04) ; Dougherty v. Deeney, 45 Iowa, 443; Swope v. Lefllngwell, 72 Mo. 348; Greening v. Patten, 51 Wis. 146 (18 N. W. 107); Moran v. Abbey, 58 Cal. 163. 406 CH. XVII.] PAYMENT, § 179 the holder in any respect whatever; actual payment, naade with the intention of extinguishing the contract, when ac- cepted by the holder, can he made by any one, whether he be a psirty to the contract or not. And this is equally true of bills, notes and checks. If a stranger makes payment of a bill, note or check, payable to bearer, without any agreement as to his inten- tion in making such payments, it will probably be presumed that he intended to acquire title to such bill or note, and not to extinguish the liabilities of the parties to the paper. But if the paper is payable to order and is transferred to him without indorsement, the presumption is that it is a payment and not a sale or transfer, even though the paper has not been canceled or payment acknowledged thereon.^ This presumption ma}', however, be rebutted by proof of intention, and it is a question for the jury to determine in the light of all the circumstances of the case.- Any party to the paper has the right to make or tender payment. If the party paying is the primary obligor, — the maker of a note or accei)tor of a bill, — the payment will extinguish the bill or note completely, and all the parties to it are discharged. And this is true, not only when the party paying is the ostensible and actual primary obligor, "^ but also where he is an ostensible secondary obligor, for whose accommodation the bill or note has been 1 Binford v. Adams, 104 lud. 41; Gilliam v. Davis, 7 Wasii. 332 (35 P. 69); Eastman v. Pluraer, 32 N. H. 238; Bailey v. Malvin, 53 Iowa, 371 (5 N. W. 515). But see Kennedy v. Chapin, 67 Md. 454 (10 A. 243); Dodge V. Freedraau's &c. Trust Co., 93 U. S. 379; Swope v. LefDogweli, 72 Mo. 348. 2 Deacon v. Stodhart, 2 Man. & G. 317; Wilcoxen v. Logan, 91 N. C. 449; Doughertys. Deeney, 45 Iowa, 443; Hall v. Kimball, 77 111. 161; Voltz u. Nat. Bank, 158 111. 532 (42 N. E. 69) (payment of checks by clearing-house agent); Swope v. Leflangwell, 72 Mo. 341; Campbell v. Allen, 38 Mo. App. 27. 3 Gardner v. Maynard, 7 Allen, 456 (83 Am. Dec. 699) ; Slade v. Mutrie, 156 Mass. 19 (30 N. E. 168) (part payment); Eastman v. Plumer, 32 N. 11. 238; Stevens v. Hannan, 88 Mich. 13 (49 N. W. 874 (payment by one of two joint makers) ; Boyd v. Bell, G!) Tex. 735 (7 S. W. 657). But see Sater r. Hunt, 66 Mo. App. 527. 82 497 § 179 PAYMENT. [CH. XVII. negotiated. For example, if A. for the accommodation of B. makes a note payable to the order of the latter, who negotiates it and at maturity i)ays the note, payment by B. will operate as a complete extinguishment of all liability on such note, and a subsequent tiant^fer of it to an innocent purchaser will give him no cause of action against A.^ So, also, if payment has been made of such a note by the maker, A., it will constitute a complete extinguishment of the paper, so as to prevent its reissue or further negotia- tion : but A. would, of course, have his cause of action against B. for reimbursement, and the canceled note may be put in evidence in proof of his claim. ^ Where, however, payment is made by a secondary obligor, by an indorser or the drawer of a bill, in a case where the paper has not been negotiated lor his accommo- dation, payment by him simply extinguishes his own liabil- ity and the liability of subsequent indorsees, and leaves intact the causes of action against the primary obligor and all prior secondary obligors, whose liabilities have been preserved by the ])roper presentment, protest and notice at the time of maturity. And an indorser, or drawer, so pay- ing, by canceling all subsequent indorsements, has the right by his own fresh indorsement to reissue the paper, the new transferee acquiring the right to proceed on the paper against all the prior parties thereto.-'' 1 Gardner n. Maynard, 7 Allen, 457 (83 Am Dec. 699) ; Guild v. Gayer, 17 Mass. 615; Jones v. Broadhurst, 9 C. B. 173; Mead v. Small, 2 Me. 207 (11 Am. Dec. 62). In the case of a bill payable at sight, payment may be made supra protest by any stranger for the honor of one or more of the pai'ties to the bill. The same requirements as to declarations for whose honor he pays are made as in the case of acceptance siipi'a protest. Denston v. Henderson, 13 Johns. 322; Smith v. Sawyer, 55 Me. lot) (1)2 Am. Dec, 576); Pirez v. Bank of Key West, 30 Fla. 467 (18 So. 590). 2 Griffith V. Reed, 21 Wend. 502 (34 Am. Dec. 267); First Nat. Bk. v. Maxwell, 83 Me. 576 (22 A. 479) ; Ryan v. Doyle, 29 Ky. 363; Bell v. Nor- wood, 7 La. 95; International Bank v. Bowen, 80 111. 541; Woods v. Woods, 127 Mass. 141 ; Stark v. Alford, 49 Tex. 260; Board of Education V. Sinton, 41 Ohio St. 504. . 3 French r. Jarvis, 29 Conn. 347; West Boston Sav. Inst. v. Thompson, 124 Mass. 50G ; St. John v. Roberts, 31 N. Y. 441 (88 Am. Dec. 287) ; 498 en. XVII.] PAYMENT. § 180 If an indorser :illows his pio[)erty to be sold in satisfac- tion of a judgment procured against liini on his indorse- ment, of a note, it has been hchl that he cannot recover of the maker, the value of the property so sold, but only the amount actually credited on the execution, after paying the costs of the sale; since it was his duty to protect his own propeity by the payment of the note.^ § 180. Payment to Avliom. — For the purpose of extin- guishing the lial)ilities of the parties to the pajier, payment must be made to the holder, or to his duly authorized agent. If the paper is payal)le to bearer or indorsed in blank, payment may be made to any one having possession of the bill or note, however defective his title to it may be, if the payor does not know of such defect. ^ But if the paper is payable to order, payment to any one but the person, to whose order it is payable, or his authorized agent, will not discharge the liabilities of the parties, unless the payee was in fact entitled to receive payment, eiiher in his own right or as the representative of the holder.'^ Where there has been no indorsement, the party having actual title to the bill or note may ])rove his title by extraneous evidence ; as Tredway v. Antisdel, 86 Mich. 82 (48 N. W. 956) ; Willis v. Willis, 42 W. Va. 522 (26 S. E. 515) ; Fenn v. Duudale, 40 Mo. 63; Stanley v. McElrath, 86 Cal. 449 (25 P. 16). But see Wallace v. Grizzard, 114 N. C. 488 (19 S. E. 760), where payment by guarantors was held to be absolute, extin- guishing all liabilities on and rights under the notes, because the makers had been charged up in their accounts with the guarantors, with the amounts paid on the notes. And see Tiraberlake u. Thayer, 71 Miss. 279 (U So. 446). 1 March V. Barnet, 114 Cal. 375 (46 P. 152). 2 Dugan V. United States, 3 Wheat. 172; Bank of U. S. v. United States, 2 How. 711 ; Lamb u. Matthews, 41 Vt. 42; Bachellor v. Priest, 12 Pick. 390; Cone v. Brown, 15 Rich. 2(i2; Bank of Utica v. Smith, 18 Johns. 230; Mauran v. Lamb, 7 Cow. 174; Grieve v. Schweitzer, 36 Wi-. 554. But payment to an unauthorized person knowingly does not extin- guish liability. Chnppelear v. Martin, 45 Ohio St. 126 (12 N. E. 448). 3 Sims V. U. S. Trust Co , 103 N. Y. 472 (9 N. E. 605) ; Doubloday v. Kress, 50 N. Y. 410; Quinn v. Dresbach, 75 Cal. 159 (16 P. 762) ; Paris v. Moe, 60 Ga. 90; Poa>-e v. Warren, 29 Mich. 9 (18 Am. Rep. 58); Porter r. Cu-hman, 19 111. 572; Stiger v. Bent, 111 111. 328; Exchange Nat. Bank V. Johnson, 30 Fed. 588; Burke v. White, 61 Mo. App. 521. 4119 § 181 PAYMENT. [CH. XVII. for example, in the ease of a general assignee, assignee in bimkruptcy, personal representative of a deceased holder, trustee or guardian of an insane person or infant.^ § 181. Conditions of payment — Legal tender — Sur- render of paper — Receipt. — No one, without the consent of the holder, can make payment of an ordinary bill or note, except by the tender of money, i. e., legal tender. If the bill or note calls for the payment of a given amount of dollars and cents in general terms, the payor can make payment in any kind of money, which by the law of the land is declared to be legal tender. At the present time, the legal tender constitutes the gold and silver coin of the denomination of one dollar and over, and the United States treasury notes. ^ The fact, that there is any difference in the values of the various kinds of legal tender in the markets of the world, does not aflect the right of the payor to select the kind of legal tender, in which to make pay- ment, as long as the bill or note does not call for pay- ment in any particular kind. He tenders the amount of money, called for by the bill or note, whether the kind he selects be depreciated or appreciated in value.^ But if the bill or note calls for payment in any particular kind of legal tender ; for example, in gold, it can only be satisfied by a tender of that kind, and the holder may refuse to receive any other.* If the paper calls for payment in anything else than 1 Leonard v. Leonard, U Pick. 280; Sampson v. Fox, 109 Ala. G62 (19 So. 896). See Perry v. Perry (Ky.), 32 S. W. 755; Nunneraacker v. Johnson, 38 Minn. 390 (38 N. W. 351) ; Lennon v. Brainard, 36 Minn. 330 (31 N. W. 172) (assignee under defective indorsement). 2 Hepburn v. Griswold, 8 Wall. 604; Legal Tender Cases, 12 Wall. 4r.7; Juillard v. Greenman, 110 U. S. 421. 3 Bush u. Baldrey, 11 Allen, 3G7; Atwood v. Cornwall, 28 Mich. 336 (15 Am. Rep. 219); Killough v. Alford, 32 Tex. 457 (5 Am. Rep. 249); Oilman v. County of Douglass, 6 Nev. 27 (3 Am. Rep. 237). 4 Bronson v. Rodes, 7 Wall. 245; Trebilcock v. Wilson, 12 Wall. 087; McGoon V. Shirk, 64 111. 408 (5 Am. Rep. 122) ; Phillips v. Dugan, 21 Ohio St. 466 (8 Am. Rep. 66); Poett v. Stearns, 31 Cal. 78; Tooke u. Bonds, 29 Tex. 419; Bridges v. Reynolds, 40 Tex. 204. 500 CH. XVII.] PAYMENT. § 181 legal teuder, a.s in " l)ank-l)ill8," tender of such currency will be sufficient.^ With the consent of the holder, payment may in any case be made in something other than legal tender. But an agent has no such implied authority. In the absence of express authority, he cannot receive anything but nioneyin payment. 2 Before making payment, the payor has the right to demand an opportunity to examine the bill or note, for the purpose of assuring himself of the genuineness of the signatures and of the body of the paper, as well as of the title of the holder to the paper. "^ Another condition, which the payor can and should exact in making pajMueiit, is that the bill or note paid sh(Mild be surrendered to him, for the purpose of preventing any further claim against him on the p:i[)er, and as evidence of the fact that payment has been made in full.* It is doubt- ful whether a receipt can be demanded. The better author- ity is, that it cannot, however valualile it may be as strong evidence of [laj-nient.^ 1 Davis V. rhillips, 7 Mou. 632; D.llard v. Evans, 4 Ark. 175. 2 DeMels v. Dagson, 53 N. Y. 635; Tuscaloosa Cotton-seed Oil Co. v. Perry, 85 Ala. 158 (4 So. G35) ; Moye v. Cogdoll, 69 N. C. 93; Buttrick v. Roy, 72 Wis. 164 (39 N. W. 345); Speurs v. Ledergerber, 56 Mo. 465; Nunnemacker v. Johnson, 38 Minn. 390 (38 N. -W. 351); Ilerriman v. Shomon, 24 Kan. 387 (36 Am. Rep. 261). 3 Wheeler v. Guild, 20 Pick. 545 (32 Am. Dec. 231) ; Canal Bank v. Bk. of Albany, 1 Hill, 287; Goddard v. Merchants' Bk., 2 Sandf. 247; aff'd 4 N. Y. 147; Adams v. Reeves, 68 N. C. 134 (12 Am. Rep. 627); Wilcox v. Aultman, 64 Ga. 544 (37 Am. Rep. 92). * Dugan V. United States, 3 Wheat. 172; Otisfleld v. Mayberry, 63 Me. 197; Freeman v. Boynton, 7 Mass. 483; Baring v. Clark, 19 P.ck. 220; Bank of University v. Tuck, 96 Ga. 456 (23 S. E. 467); Stone v. Clough, 41 N. H. 290; Bond v. Starrs, 13 Conn. 412; Norris v. Badger, 6 Cow. 440; Storey y. Krewson, 55 Ind, 397 (23 Am. Rep. 668); Fitzmaurice v Mosier, 116 Ind. 363 (16 N. E. 175) (equity will compel .surrender of a fully paid note); Brinkley v. Going, 1 111. 366; Buehler v. McCormick, 169 111.26!) (48 N. E. 287) ; Be.^t V. Crall, 23 Kan. 432 (33 Am. Hep. 185). See Johnston v. Allen, 22 Fla. 224. 5 See Jones v. Fort, 9 B. & C. 764; Thayer v. Brackett, 12 Mass. 450. But part payment may be required to be noted on the bill or note. See Emerson v. Cutts, 12 Mass. 78; Ward v. Howard, 88 N. Y. 74. 501 § 182 -^ PAYMENT. [CII. XVII. § 182. Payment by bill or note — Presumption tis to its absolute or conditional character. — When ;i pay- ment is made of a debt by a bill or note, the intention of the parties — whether such payment shall l)c absolute, and shall therefore extinguish all liability on the original debt, whether the bill or note is ultimately paid or not, or only conditional upon its being honored at maturity, — may of course be definitely expressed at the time of the transaction ; and such express intention cannot be controlled by any collateral circumstances. But where the parties have given no expression to their intention in the [)ien)isos, it is left to legal presumption to determine whether the payment in such a case is absolute or conditional. As to what is the presumption of law, the cases aie hopelessly conflicting, the general tendency being to hold to the presumption, that the payment is conditional. There are conflicting decisions on almost all of the possible cases, which may arise. Thus, it has been held, where the payment is made by the debtor's own note of a precedent or contemporary debt, it is a conditional payment.^ On the other hand it has been held that such a ivayment by l)ill or note is pre- sum[)tively absolute. ^ Where a precedent debt is paid by the bill or note of a third person, whether it is payable to order and indorsed, or payable to bearer and unindorsed, 1 Peter u. Beverly, 10 Pet. 532; Baulv of United States v. Daniel, 12 Pet. 32; Winsted Bank v. Webb, 39 N. Y. 325 (100 Am. Dec. 435) ; Bd. of Education v. Fonda, 77 N. Y. 350; Nishtingale v. Chafee, 11 R. I. 609 (23 Am. Rep. 531) ; Middlesex v. Thomas, 5 C. E. Gr. (20 N. J. Eq.) 39 ; Morris v. Harveys, 75 Va. 726; Archibald v. Argall, 53 111. 307; Scott v. Gilkey, 153 lil. 168 (39 N. E. 265); Farwell v. Salpaugh, 32 Iowa 582; Sutliffe V. Atwood, 15 Ohio St. 186; Geib v. Reynolds, 35 Minn. 331 (28 N. W. 923); Wiles v. Robinson, 80 Mo. 47; Welch v. AUington, 23 Cal. 322; Breitung v. Liadauer, 37 Mich. 217. As to contemporary debt, see Sht'ehy v. Mandeville, 6 Cranch, 258. 2 Ward V. Bourne, 56 Me. 61; Dodge v. Emerson, 131 Mass. 467; Green v. Russell, 132 Mass. 536; Smith v. Bettger, 68 Ind. 254 (34 Am. Rep. 256); Franklin Life Ins. Co. v. Wallace, 93 Ind. 7; Morrison v. Smith, 81 111. 221; Houdle-s v. Reid, 112 111. 105; Mehlberg r. Fischer, 24 Wis. GOT; Tisdale v. Maxwell, 58 Ala. 40; Rowe v. Collier, 25 Tex. 252. 502 CH. XVII.] PAYMENT. § 182 the payment is generally held to be conditional ^ with a few cases, holding such payments to be presumptively abso- lute. ^ But there seems to be a general agreement in the case of the payment of a contemporaneous debt by a stranger's l)ill or note, that it is presumed to be absolute, where the bill or note is payable to bearer or indorsed in blank by some prior holder, so that it may be transferred without indorsement;^ and conditional^ wliere the p;iper is payable to order, and can be transferred only by imlorse- ment.^ It is also generally held to be only a conditional payment, where in the renewal of a note, the old note is retained by the holder.^ But where the old note has l)een surrendered, this would seem to be undoubtedly a case of absolute payment, and so it has been held.® 1 Downey v. Hicks, 14 How. 240; Freeman v. Benedict, 37 Conn. 559; Coniiling v. King, 10 N. Y. 440; Potts v. Mayer, 74 N. y. 594; Gibson v. Tobey, 46 N. Y. G37 (7 Am. Rep. 397); Wilhelrast?. Schmidt, 84 III. 183; Gordon v. Price, 10 Ired. L. 385; Tilford v. Miller, 84 Ind. 185; Cook v. Beech, 10 Humph. 413. But see Shaw v. Republic L. Ins. Co., 69 N. Y. 286. 2 Dennis v. William?, 40 Ala. 633; Ely u. James, 123 Mass. 36; Draper V. Sexton, 118 Mass. 427. See Bay City Bank u. Lindsay, 94 Mich. 176 (54 N. W. 42). 3 Tobey v. Barber, 5 Johns. 68 (4 Am. Dec. 326) ; Gibson v. Tobey, 46 N. Y. 637 (7 Am. Rep. 397); Day v, Kinney, 131 Mass. 37; Gordons. Price, 10 Ired. L. 385; Susquehanna Fert. Co. v. White, G6 Md. 444 (7 A. 802). But see Huse u. McDaniel, 33 Iowa, 406 (4 Am. Rep. 244); Iluse V. Flint, ib.; Iluse v. Hamblin, ib. * Monroe v. Haff, 5 Den. 3G0; Soffe v. Gallagher, 3 E. D. Smith, 507; Shrimer v. Keller, 25 Pa. St. 61. See Day v. Tliompson, 64 Ala. 269. * Woods V. Woods, 127 Mass. 141 ; Heath v. Achey, 96 Ga. 438 (23 S. E. 396); Hobson v. Davidson, 8 Mart. (La.) 422 (13 Am. Dec. 294); Jansen V. Grimshaw, 125 HI. 468 (17 N. E. 850) Adams v. Squires, 61 111. App. 513; Boston Nat. Bank v. Jose, 10 Wash. 185 (38 P. 1026). c Phoenix Ins. Co. v. Church, 81 N. Y. 218 (37 Am. Rep. 494); Mc- Morrau v. Murphy, 68 Mich. 246 (36 N. W. 60); Childs v. Pellett, 102 Mich. 558 (61 N. W. 54); Morris v. Harvey, 75 Va. 726; Second Nat. Bank v. Wetzel, 151 Pa. St. 142 (24 A. 1087); Nichols v. Bate, 10 Yerg. 429; Compton v. Patterson, 28 S. C. 115 (5 S. E. 27C) ; Bk of Com. V. Letcher, 3 J. J. Marsh. 195; Smith v Harper, 5 Cal. 329. But see Parrolt v. Colby, 71 N. Y. 697; First Nat. Bank r. Knevals, 67 Hun, 648; Jagger Iron Co. v. Walker, 76 N. Y. 521, and f-ee McElwee v. Mclropoli- tan Lumber Co., 69 Fed. 302; 16 C. C. A. 232. 503 § 183 PAYMENT. [CH. XVII. These presumptions may always be rebutted, not only by proof of an express agreement to the contrary ; but, likewise, by influence from collateral circumstances, which seem to indicate an intention contrary to the logal pre- sumption.^ Wherever the payment by bill or note is held to be con- ditional, the right of action on the original debt is sus- pended, until the bill or note is payable; and if it should be dishonored at maturity, the right of action on the origi- nal debt revives, and the creditor has his right of election on which liability to bring suit. But if he elects to sue on the original debt, he must produce in court, or satisfac- torily account for the absence of the bill or note, so that the debtor may be protected from a subsequent suit on the bill or note by a bona fide holder of the same.^ § 183. Payment by check. — Where the payment of a debt is made by a check, — apparently, whether it be the check of the debtor or of some third party, — it is pre- sumed alwa3:s to be a conditional payment only, and be- comes an absolute payment only when the check has been paid. And so strong is this presumption, that, where the debt takes the form of a bill, note or other instrument of indebtedness, the holder is not obliged to surrender such instrument, until the check has been paid.^ 1 Appleton V. Parker, 15 Gray, 173; Amos v. Bennett, 125 Mass. 123; Shumway v. Reid, 34 Me. 5G0 C5(j Am. Dec. G79) ; Tobey u. Barber, 5 Johns. 68 (4 Am. Dec. 326) ; Meyer v. Lathrop, 73 N. Y. 315; Weston v. Wiley, 78 Ind. 54; Courtney v. Hogan, 93 111. 101; Jansen v. Grimshaw, 125 III. 468 (17 N. E. 850) ; Burchard v. Frazer, 23 Mich. 224; Charlotte Steamboat v. Hammond, 9 Mo. 58 (43 Am. Dec. 536). 2 Tobey v. Barber, 5 Johns. 68 (4 Am. Dec. 326); Cole v. Sachett, 1 Hill, 516; Harris v. Johnston, 3 Cranch, 311; Matthews v. Dare, 20 Md. 248; Alcock v. Hopkins, 6 Cash. 484; Beecher v. Dacry, 45 Mich. 92; Miller v. Lumsden, 16 111. 161; Holmes v. Lykins, 50 Mo. 399. 3 Small V. Franklin Min. Co., 99 Mass. 277; Smith v. Miller, 43 N. Y. 171 (3 Am. Rep. 690); 52 N. Y. 545; Davison v. City Bank, 57 N. Y. 81; Canadian Bank v. McCrea, 106 111. 281 ; Woodbiirn v. Woodburn, 115111. 427 (5 N. E. 82) ; Barnet v. Smith, 30 N. H. 256 (64 Am, Dec. 290) ; Henry V. Conley, 48 Ark. 267 (3 S. W. 181); Phillips v. Bullard, 58 Ga. 256; 504 CH. XVII.] PAYMENT. ILL. CAS. And if an agent for collection were, without authority, to receive a check in payment of a bill or note, and sur- render the bill or note before payment of the check; any loss, resulting from the dishonor af the check, and his sur- render of the 1)111 or note, would fall upon the agent.* But payment by check is so far an absolute payment, that, where it is given in payment of a bill, the drawer of the check cannot countermand it, on learning of the insol- vencv of the drawer of the bill.^ ILLUSTRATIVE CASES. Bay City Bank v. Lindsay, 94 Mich. 176 (54 N. W. 42). Voltz V. National Bank of Illinois, 158 111. 532 (42 N. E. 69). Sampson v. Fox, 109 Ala. 662 (19 So. 896). Payment of Bill by Acceptor's Sight Draft on Drawer which the Latter agreed Orally to Fay — Absolute Payment — Xo Recourse against Drawer by the Bank which Paid the Original Bill to Holder, on Receipt of the Sight Draft, and which Draft was Subse- quently I>i«honored. Bay City B-i-^k v. Lindsay, 94 Mich. 176 (54 N. W. 42). Error to circuit court, Wayne county; George S. Hosmer, Judge. Action by the Bay City Bank against Arcbibald G. Lindsay, survivor, etc., to recover the amount of a draft. From a judg- ment for defendant, plaintiff appeals. Affirmed. MoNTGOMEHT, J. Tlic plaintiff declared ou the common counts, Turner v. New Farmers' Bk. (Ky. '97), 39 S. W. 425; Watkins v. Par- sons, 13 Kan. 426; Jones v. Heiliiier, 36 Wis. 149. If bill or note is surrendered, payment by check becomes absoluti^ First Nat. Bk. v. Maxwell, 83 Me. 576 (22 A. 479). See Equitable Nat. Bank v. Griffin & Skelley Co., 113 Cal. 692 (45 P. 985). J Whitney v. E.-^sen, 99 Mass. 308 (96 Am. Dec. 762); Smith v. Miller, 43 N. Y. 171 (3 Am. Hep. 690) ; 52 N. Y. 546; Kathbun v. Citizens' Steam- boat Co., 76 N. Y. 376; First Nat. Bank v. Fourth Nat. Bk., 89 N. Y. 412; "Weyerhausen v. Dun, 100 N. Y. 150; 2 N. E. 274 (taking a note in payment). Certification of the check before delivery to him would not change his liability in case of the dishonor of the check. Bickford v. First Nat. Bank, 42 111. 238 (89 Am. Dec. 436); Brown v. Leckie, 43 111. 497. Sie Deutsche Bank v. Berirs, 73 Law. T. 66;). 2 Equitable Nat. Bank v. Griffin Skelley Co., 113 Cal. 692 (45 P. 985). 505 13 ^' ILL. CAS. PAYMENT. [CH. XVII. and furnished a bill of particulars which limited its demand to a claim for $2,000 paid E. J. Vance & Co. on December 15, 1890, for the firm of Lindsay & Gamlile, and at their request to take up the draft hereinafter referred to. The other item in the bill is the liability of defendant on the draft, a copy of which was served with the declaration. The draft in question was dated September 12, 1890, was drawn b}'^ ttie defendant on E. J. Vance & Co., payable to the order of the drawers, and was accepted by E. J. Vance & Co., payable at the Bay City Bank. It was indorsed as follows: " Pay E. W. L^ech & Co. or order. Lind- say & Gamble, E. W. Leech & Co., (in blank,)" — and also: "Pay to the order of W. O, Cliff, cashier, for collection, for account of Peninsular Savings Bank, Detroit, Mich. J. B. Moore, Cashier." The case rested upon the testimony adduced by the plaintiff, which tended to show that the defendant's firm, at the date of the transactions in question, consisted of A. G. Lindsay and Patrick M. Gamble, since deceased; that Gamble was a member of all three firms, — of Lindsay & Gamble, E^ J. Vance & Co., and Leech & Co.; that on the day of maturity of the draft, it was presented for payment at the Bay City Bank; that payment was refused for the reason that there were no funds of E. J. Vance & Co. in hand to pay with ; that during the day the attention of tl>e bookkeeper of E. J. Vance & Co., Mr. Buits, was directed to the sub- ject by the cishier of the })laintiff. For a statement of what followed, we quote from the tistimony given by Mr. Butts on the trial: " I went to the bank, and told Mr. Young, the cashier of the Bay City Bank, that it was paper that Lindsay & Gamble should pay, and lliat I would have to make a draft back on them to pay it with. Mr. Young said he would take a demand draft or a sight draft, if I would call up Lindsay & Gamble, and have Mr. Lindsay say that he would take care of it. I then went to our office, and called up Mr. Lindsay, and reminded him of this paper coming due, that they should pay. I asked him if he would take care of a demand draft, if I should make it, and he said, ' On demand is a pretty short time ; ' he hardly thought he would be able to take care of it. He asked me if I could not make it for a few days' time. I tliink he menti mere, this ad- ditional difficulty standing in the way of plaintiff's recovery here : Not only was the agreement to accept oral, but it was made to Vance & Co., and no authority to bind defendant was given, ex- cept an oral promise to accept the sight draft. It follows that there was no such privity of contract between the plaintiff and defendant as entitles the plaintiff to recover. Judgment is affirmed, with costs. The other justices concurred. 507 ILL. CAS. PAYMENT. [CH. XVII. Payment of Checks Tlirougli Cleai'ing House Agent — Conditional — and Gives Agent Rights of Indorser. Voltz V. Natioual Biak of Illiaois, 158 Id. 532 (42 N. E, 69). Appeal from appellate court, First district. Assumpsit by the National Bauk of Illinois against Fred L. Voltz and Albert Lang, copartners as Fred L. Voltz & Co. Plaintiff obtained judgment, which was affirmed l:)y the appellate court. 57 III. App. 360. Defendants ap[)eal. Affirmed. This cause is l)rought to this court by appeal on a certificate of importance from the appellate court of the First district. On and for some time prior to June 3, 1893, there was in the city of Chicago an association known as the Chicago Clearing House. The membership of that association comi^rised certain of the •Chicago banks, and its purpose was to facilitate tlie daily settle- ment between those banks. The National Bank of Illinois, appellee, and the First National Bank of Chicago, were both members of that association. On and for some time prior to June 2, 1893, Hermann Schaffner & Co. were engaged in bus- iness as private bankers in the city of Chicago. They were not in the clearing-house association, but through an arrangement between them and, appellee checks drawn upon the former were cleared by the latter. In order to make this arrangement effective, so that checks drawn upon Hermann Schaffner & Co., and certified, would be received by the clearing-house banks, it became necessary for appellee to guaranty tlie payment of such checks. On June 2, 1893, the First National Bank held for col- lection a draft for $581.03, drawn on appellants, F. L. Voltz & Co., and Vjy them accepted. On that day appellants, who then had funds on general deposit with Hermann Schaffner & Co., drew a check upon tlie latter for the sum of $581.03, had it certi- fied, and delivered it to the First Naiional Bauk in payment of the draft. That check was received by tlie First National Bank between 11 and 12 o'clock on June 2d, and too late to be put through the clearing house on that da3% At about 8 :30 a. m. of June 3, 1893, Hermann Schaffner & Co. made a voluntary assignment for the benefit of their creditors. They then ceased doing business, and are still insolvent. On June 3, 1893, the First National Bank presented said check through the clearing house to the National Bank of Illinois. The payment of it was refused on account of the insolvency of Hermann Schaffner & Co. The cashier of the First National thereupon called the attention of appellee to the guaranty in evidence, and thereupon appellee issued its cashier's check for the amount, and the check in suit was indorsed " Without i-ecourse," by the First National Bank, and delivered to appellee. The amount of the check was charged by appellee as an overdraft of Herman Schaffner & Co.'s account, and it subsequently filed a claim for the amount so paid 508 CH. XVII.] PAYMENT. ILL. CAS. against the estate of Hermann Schaffner & Co. The following is a copy of the check as it was offered in evidence : — " No. 1,070. Chicago, June 2<1, 1893. To Hermann Schaffner & Co., Bankers: Pay to the order of the First National $r)81yO„% (five hundred eighty-one and ^Vo dollars). F. L. Voltz & Co." " Certified June "2nd, 1893. Hermann Schaffner & Co. A. Swartz, Teller." Indorsed on back: " First National Bank. Without recourse. R. J. Street, Cash." "Pay throngh Chicaso Clearing House onlv. "Paid June 3rd, 1893." The indorsement, " Paid June 3rd, 1893," is the clearing-house stamp, put there on June 2d, and dated a da}^ ahead by tlie First National Bank in anticipation of payment through the clearing of the next day, as was the usage among the members of the clearinghouse. The following is a copy of the guaranty given by appellee to the First National Bank : — " Chicago, Feb. 3rd, 1886. L. J. Gage, Esq., Vice-President, City — Dear Sir: This bank hereby holds itself accountable for payment on presentation in the regular course to it of any and all checks or drafts drawn apon the banks and bankers below named, or either of them, and properly certified by them. This obligation, however, to apply only to such drafts and checks as may be received by you in ithe course of your business in pay- ment of collections or discounted items. » * * " Hermann Schaffner & Co. " Truly yours, " \\yi. A. Hammond, Cashier." The suit is assumpsit by api)ellee, as assignee of the check, against appellants, as makers. The declaration also contains the common counts. The issues joined were submitted to the cir- cuit court without a jury, and the finding and the judgment were for appellee for $007.66 damages. And thereafter the judgment was alfirmed in the appellate court. At the trial, appellants submitted certain written propositions, to be held as law. The court held proposition 1, as follows: "(l)Thc court finds as a matter of law that the relationship between Hermann Schaffner & Co. and the plaintiff herein, where- by the latter represented tiie former in the clearing house in the city of Chicago, was that of principal and agent." But the court refused to hold propositions from 2 to 9, inclusive, which were as follows: " (2) The court finds as a matter of law that the plaintiff herein came into possession of the check sued on herein for and as the agent of Hermann Schaffner & Co., and that the payment made therefor by it to the First National Bank was in law a payment by Ileimann Schaffner & Co., and an extinguish- ment of the drawc r's liability. (3) The court finds as a matter of law that, as the National Bank of Illinois was not liable upon its gnarantv to the First National Bank, the payment by it was made 5oy ILL. CAS. PAYMENT. [CH. XVII. as volunteer, and it is not entitled to he subrogated as against the defendants to the rights of the First National Bank. (4) The court finds as a matter of law that the contract executed by the National Bank of Illinois in 1886 was ultra vires and void, and that the First National Bank could not have maintained any recovery thereon for the check in question. (5) The court finds as a matter of law that the contract of guaranty executed by the National Bank of Illinois to the First National Bank in 1886 is void, as rendering the National Bank of Illinois liable for an amount in excess of the capital stock of the company actually paid in, and tliat the First National Bank could not have main- tained any action thereon for the recovery of the amount of the check in suit. (6) The court finds as a matter of law that the contract of guaranty executed by the National Bank of Illinois to the First National Bank in 1886 is void, as being against public policy ; and that the First National Bank could not have main- tained any action thereon for the recovery of the amount of the check in suit. (7) The court finds as a matter of law that the defendants are not liable to tlie plaintiff upon the check sued on herein. (8) The court finds as a matter of law that the First National Bank was bound to know the ultra vires character of the contract of guaranty executed to it by the National Bank of Illinois in 1886 by reason of itself being a national bank. (9) The court finds as a matter of law that Hermann Schaffner & Co. would have no right of action upon the check in question if it had paid it, and that the National Bank of Illinois cannot, by virtue of the payments made by it in the course of its agency for Hermann Schaflfner & Co., acquire any greater rights as against the defendants herein than Hermann Schaffner & Co. would have had had such payment been made by them." Baker, J. (after stating the facts). There was no real incon- sistency in the rulings of the trial court upon the written proposi- tions submitted to it in holding proposition 1, and refusing to hold propositions 2, 7, and 9 as law in the decision of the case. Assuming it to be true that, while appellee represented Hermann Schaffner & Co. in the clearing house, the relation that existed between them was that of principal and agent, yet that relation ceased to exist early on the morning of June 3, 1893, when Hei- maun Schaffner & Co. made a general assignment for the benefit of their creditors, and ceased doing business, and appellee refused longer to represent them in the clearing house, and threw out and returned their clearings, amounting to S6, 976. 01. The evidence is that in the forenoon of June 3d appellee refused longer to pay checks certified by them and that the check in question was not paid through the clearing house. The testimony of Mr. Moll, who was assistant cashier of appellee, is explicit that the check was paid by appellee on account of the guaranty in writing held by the First National Bank. And Mr. Street, cashier of the First National Bank, testifies in chief: "This check was shown to me by our note teller, and I remembered the fact that we had 510 CH. XVII.] PAYMENT. ILL. CAS. a guaranty from the National Bank of Illinois, and I held them to their guaranty simply, and they took the check up." And testi- fies on cross-cxnmination : "When that check was not paid through the clearing hcjuso, our bank, eiiher on June 3d, or June 5lli, demanded that the N:Uional Bank of Illinois should give us the face of it." And also says that he indorsed the check by way of transfer to the National Bank of Illinois, but to protect his own bank, made the indorsement " without recourse." In holding proposition 1 the trial court did not, either in terras or by necessary implication, find as matter of fact that appellee, in paying the check, did so as agtnt of Hei maun Schaffner & Co. ; and when that proposition is read in the light of the refusal to hold propositions 2, 7, and 9, it is mnniftst that court must have found that appellee did not pay or come into possession of the check "for and as the agent" of Hermann iSchaffner & Co. Therefore the doctrine that payment by the agent of the maker of a note or drawee and acceptor of a check is a payment of the note or check, and an extinguishment of the lialiility of the indorser of such note or drawer of such check, has no apiilication to the case ; and the authorities cited Dy appellants upon this branch of the controversy — i. e. Mechem Ag., § 487 ; Burton v. Slaughter, 26 Grat. 914; and Johnson v. Glover, 121111. 28;3; 12 N. E. 257 — are not in point. In our op nion, the coiiclubion here must be that, when appellee gave to the First National Bank the cashier's check for the face of the F. L. Voltz & Co. cheek, and took an assignment of the latter (heck, it did so, not as the agent of Hermann Schaffner & Co., but as guarantor of said check. And it follows, since appellee did not pay the check as agent, that by the indorsement it took the legal title to the check, and has a legal right, as assignee, to recover the money therein specified from appellants, the drawers of the check, the said Hermann Schaffner & Co. having failed and refused to make payment; and this wholly regardless of the considerations that may have induced it to make the pa3'ment and take the assignment. Ap- pellants, the drawers, procured the certification of the check prior to its delivery to the payee, and they are primarily liable to such payee or its assignee. Bank v. Jones, 137 111. 634, 27 N. E. 533; Brown v. Leckis, 43 111. 497; Bickford v. Bank, 42 III. 238 ; Rounds v. Smith, Id. 245. It is claimed in some of tiie refused propositions that were submitted to the court, and also in the argument of appellants, that the contract of guaranty given b}' appellee to the First National Bank was ultra vires and void ; that it was also void as ren-uior and general manager of the company, had received money for the bond^, — a supposition which no trior of facts, in the course of judicial in- vestigation, would be invited to indulge. Nor is there any foun- dation for the idea that it was the duty of Carr, as its president, to make payment of the debts of the water compati}'. There is no evidence that such duty had been imposed or authority had been conferred by the company, nor that cither exists by geneiid usage. In 1 IMor. Priv. Corp., § 537, it is said: '-The implied powers of the president of a corporation deponil upon tlie nature of the company's ])usinos3, and the measuie of the liabil- ity delegated to him by the board of directors. It seems that a president has no greater power, by virtue of his olfice merely, tinn any other director of the company, except that he is the presiding officer of the meetings of the V)oard." 517 ILL. CAS. PAYMENT. [CH. XVII. The supreme court of New Jersey said: "In the absence of anything in tlie act of incorporation bestowing special power upon the president, he has, from bis mere official station, no more control over the corporate property and funds than any other director. The affairs of corporate bodies are within the exclusive control of their l)oards of directors, from whom authority to dispose of their assets must be derived." What were the duties of the Tuscumbia Bunking Company, the holder of the collateral, affected and bound by the acts of Carr, one of the partners, in reference to tlie collateral, we pass for future con- sideration. For the reasons we have given, we do not concur in the theory on which the court based its first finding or conclusion. The second finding of the court, that the presumed payment of the collateral operated a payment of the notes on which the suit is founded, is equally untenable. If there had been the obliga- tion to pay the collateral resting on Carr, it was an individual obligation. It did not rest on the banking company, nor was it assumed by him in the relation or capacity of a partner in the compan}'. It is merely elementary to say that partnership assets cannot be appropriated to the payment of the individual debts of either partner. 1 Bates Paitn., § 410. In Burwell v. Springfield, 15 Ala. 273, it was said by Collier, C. J. : " One partner cannot release a debt due from the firm, in order to extinguish his indi- vidual liability; nor can a debt due to a partnership be dis- charged by one of the partners applying it in payment of an in- dividual debt owing by him to the debtor of the flim, without the knowledge and approbation of the other members of the concern." The law never presumes wrong doing, and cannot presume that a partner has misappropriated partnership assets, or that others dealing with him have participated in the misappropriation. Yet this is the presumption which seems to have been indulged to reach the conclusion that the notes were paid. There are other grounds upon which it is insisted the judgment of the court below should be affirmed. The first is that the debt due from the IClectric Light & Water Company to the defendant was accepted by tlie banking company in payment of the notes on which the suit is founded. — the matter of the third and fourth pleas. Payment of a debt is an affirmative plea, the burden of proving which is on the i)arty pleading, " who must prove the payment of money, or something accepted in its stead, made to the plaintiff, or to some i)erson authorized in his stead to receive it." 2 Greenl. Ev. , § 516. As the rule has been often expressed in our decisions: " A party pleading or relying on payment must prove it. The fact is peculiarly within his knowledge, and though his adversary in pleading negatives it, the negative averment is taken as true until disproved." 3 Brick. Dig. 698, § 1. If it be conceded that the pleas are supported by the evidence of the defendant, the concession must be made that they are disproved by the evidence of Carr, with whom the trans- actions were had, and by whom it was alleged the payment was 518 CH. XVIl] PAYMENT. ILL. (AS. accfpted. It would serve no useful purpose to analyze and dis- cuss their contradictory evidence, inquirinor -wliicli is the more consistent witli the conduct of men of ordinary prudence, ia the course of the transactions they narrate. The court below made no finding in ref( rence to tliese pleas and the existince of the facts on which they aie l>ascil. If we resort to presiiin[)tiou, the presumption must he tliat the finding, in this state of the evidence, would have been that the picas were not supported, — that the defendiuit had not satisfitil the burden of proof resting ui)oa him. In Leiiraan Bios. v. IMcQuecn, 65 Ala. 572, considering a question of j)aynuMit, tlie court said: "In the consideration of all ques- tions of this character, dependent upon conflicting evidence, it is important to inquire, and bear in mind, upon which party lies the burden of pi oving the disputed fact. For when the law casts the burden of jiroof ui)0n a l)art3', if he does not offer evidence of the fact, for ail the |)urpose3 of the particular ease the non- existence of the fa( t must be assumed. Or if tlie evidence in reference 1o the fact is equally bahanced, or if it does not generate a rational belief of tlie existence of the fact, leaving the mind in a state of doubt and uncertainty, the party affirmmg its existence must fail for want of proof. The burden of prov- ing a disputed fact rests, in all cases, u[)on tlie i)ariy affirming its existence, and claiming to derive right and benefitfiora it. * * * A plaintiff proves llie existence of a debt which the defendant claims to have paid. In the first instance, proof of tlie debt would rest on ihe plaintiff if it was denied ; and if his evidence was insufficient, he would fail for want of proof. But, the debt being prr)ved, the buiden of proving payment rests upon the defendant; and if his evidence is insufficient he would fail for want of proof." The defendant has not supported the ))lea3 of payment ; the burden of j)roof resting u[)on him is not discharged. The remaining insistence is that the banking company, by its failure to collect the debt of tlie P21ectric Light & Water Com- pany, suffering the company to sell and dispose of all its property and franchises, whereby the debt was lost, is answerable to the defendant for the loss. It may well be doubted whether the loss of the debt is shown by the evidence. By the sale, all the properly and franchises of the company were charged with a trust for the payment of its debts, — a trust which would prevail against all other than bona fide ijurchasers from the Tuscumbia Water Com- pany, without notice ; and the eviilence shows that, at the time of the trial, the value of tliepro[)erty equaled, if it did not exceed, the debts. However this may be, we are not of opinion the insistence can be supported. The question depends materially on the terms of the pledge, as incoiporated in the notes, connected with the attending facts. The first pledge of the debt was as collateral security for the payment of a note of §100, having oO days to run. After the maturity of that noie, there is a second pledge of the balance of the debt, to secure the payment of a note for 8306, Laving 60 da\ s to run. The terms of each pledge are the 519 ILL. CAS. PAYMENT. [CH. XVII. same: " And I hereby give to the holder full power and author- ity to sell or collect, at my expense, all or any portion thereof, at any place, either in the city of Tuseumbia or elsewhere, at public or private sale, at his option, on nonperformance of above prom- ise," etc. It is this agreement by which the rights and duties of the parties are to be measured, rather than by any general rule of law which, in the absence of the agreement, would regulate their general rights and duties on a general pledge of negotiable or non-negotiable securities for the payment of debts. Lawrence V. McCalmont, 2 How, (U. S.) 426; Roberts v. Thompson, 14 Ohio St. 1; Id., 82 Am. Dec. 465. The pledge doubtless con- templates that the holder of the notes would abstain from any and all acts by which the value of the pledge would be deteriorated, keeping it ready for restoration on payment of the notes. This is mere passiveness; and if payment had been tendered, it must have been accepted. But it was not eontemi)lated that the holder should exercise any diligence in the collection or in making sale of the collaterals. The two are conjoined by the agreement, and com- mitted to the mere option of the holder of the notes. There was authority to collect the collateral. At the utmost this would devolve on the holder of the notes the duty and liability of an agent, and, as an agent, binding him only to ordinary care and diligence. It is apparent that, l)y the exercise of no ordinary diligence, the pur- suit of no ordinary legal remedies, there could have been col- lection of the collateral. Before the maturity of the first note the sale to the water company was effe^jted, and thereafter, as the bill of exceptions recites, the Electric Light & Water Com- pany ceased to exist. The inference is that the company became disorganized, rendering a suit at law against it impracticable. If it is suggested thit equitable remedies could have been pursued to reach and subject the jjroperty conveyed to the water com- pany, the answer is that such remedies as are extraordinary the holder could not be expected to pursue. We find no room in the evidence for the imputation of negligence to the banking company in reference to the collateral. The result is the judgment must be reversed, and a judgment here rendered that the plaintiff have and recover of the defendant the principal of the notes, with the interest computed to this day, together with the costs in the circuit court and the costs of this court. 520 APPENDIX. THE NEGOTIABLE INSTRUMENTS LAW OF NEW YORK, CONNECTICUT, COLORADO AND FLORIDA, MARYLAND, VIRGINIA, AND THE DISTRICT OF COLUMBIA. INTRODUCTION. On the recommendation of the American Bar Associa- tion, which was made a few years ago, commissioners on Uniform State Laws have been appointed by the govern- ments of the States, who are empowered to meet in joint conference, frame and adopt statutes, which they may recommend to their respective Legislatures for incorpora- tion into the statute law of the State-s, and thereby elimi- nate as much as possible the present useless and confusing conflict in the commonest principles and provisions of private law. At the meeting of the commissioners in 1896, The Negotiable Instruments Law, which is substantially a reproduction of the English Act on Bills of Exchange and Promissory Notes, was adopted and recommended for gen- eral enactment by the State Legislatures. In 1897, by the action of the Legislatures of New York, Connecticut, Colorado, and Florida, this codification of the commercial law has become the law of these States, super- seding all preceding local statutes. In 1898, the law was adopted in Maryland and Virginia, and is at the time of going 521 INTRO. THE NEGOTIABLK INSTRUMENTS LAW. [aPP. to press before the United States Senate, having already passed the House of Representatives with every prospect of its adoption as the hiw of the District of Columbia. It is confidently expected that this code will be ultimately enacted in all of the United States, particularly since it has been adopted by the great commercial State of New York, and thirty States are now represented by commissioners at these annual conferences. In a number of the States, it has already been recommended, in Massachusetts by the Governor and in South Carolina by the Supreme Court. The Negotiable Instruments Law, as it has been enacted by the Legislature of New York, is herewith appended, in the form in which it has been so adopted, with the correc- tions of typographical errors, as ordered by the act of 1898. But in order that the reader of this book may be able to refer to the numbers of the sections, as they appear in the law, as it has been adopted by the other States, these numbers are appended to the respective sections in paren- theses. The numbers of the sections are the same in Con- necticut, Colorado and Florida, except that what appears as Art. I. in the New York statute, and as a preamble in the statutes of (Connecticut and Florida, is in Colorado put at the end of the statute and numbered § 190. In the New York statute there are three sections (§§ 330-332) which do not appear in the statutes, as adopted by the other States. In every other respect, the phraseology and contents of the sections are identical. 522 THE NEGOTIABLE INSTRUMENTS LAW. CHAPTER G12, LAWS 1897; CHAPTER 50 OF THE GENERAL LAWS. (Became a law May 19, 1897.) CHAPTER 50 OF THE GENERAL LAWS. THE NEGOTIABLE INSTRUMENTS LAW. Article L General Provisions. (§ 1-17 ) IL Form and Interpretation of Negotiable Instruments. (§§ 22-42.) III. Consioeration. (§§ 50-55.) IV. Negotiation. (§§ 60-80.) V. Rights of Holder. (§§ 90-98.) VI. Liabilities of Parties. (§§ 110-119.) VII. Presentment for Payment. (§§ 130-148.) VIII. Notice of Dishonor. (§§ lGO-189.) IX. Discharge of Negotiable Instruments. (§§ 200-206.) X. Bills of Exchange; Form and Interpretation. (§§ 210- 216.) XI. Acceptance. (§§ 220-230.) XII. Presentment for Acceptance. (§§ 240-248.) XIII. Protest. (§§ 2G0-268.) XIV. Acceptance for Honor. (§§ 280-290.) XV. Payment for Honor. (§§ 300-306.) XVI, Bills in a Set. (§§ 310-315.) XVII. Promissory Notes and Checks. (§§ 320-325.) XVIII. Notes Given for a Patent Right and for a Specula- tive Consideration. (§§ 330-332 ) XIX. Laws Repealed, When to Take Effect. (§§ 340-341.) 523 ARTICLE I. GENERAL PROVISIONS.! Section 1, Short title. 2. Definitions and meaninjj; of terms. 3. Person primarily liable on instrument. 4. Reasonable time; vrhat constitutes. 5. Time how computed; when last day falls on holiday. 6. Application of chapter. 7. Rule of law merchant; when governs. Section 1. Short title. — This act shall be known as the negotiable instruments law. § 2. Definitions and meaning of terms. — In this act, unless the context otherwise requires: — " Acceptance " means an acceptance completed by de- livery or notification. " Action " includes counter-claim and set-off. "Bank" includes any peison or association of persons carrying on the busine>s of banking, whether incorporated or not. "Bearer" means the person in possession of a bill or note which is payable to bearer. " Bill" means bill of exchange, and "note" means negotiable promissory note. "Delivery" means transfer of possession, actual or constructive, from one person to another. " Holder " means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof. ! (In Connecticut and Florida, Art. I. appears as a preamble, without being sectionized; while in Colorado, it appears at the end of the statute as § 190.) 524 APP.] GKNERAL PROVISIONS. ART. 1 " Indorsement " means an indorsement completed by delivery. "Instrument " means negotiable instrument. " Issue " means the first delivery of the instrument, complete in form to a person who takes it as a holder. '* Person " includes a body of persons, whether incor- porated or not. " Value " means valual)le consideration. " Written " includes printed, and " writing " includes print. § 3. Person primarily liable on instrument. — 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. § 4. Reasonable time, what constitutes. — In determin- ing what is a " reasonable time " or an " unreasonable time " regard is to 1)6 had to the nature of the instrument, the usage of trade or business (if any) with respect to such instruments, and the facts of the particular case. § 5. Time, bow computed; when last day falls on holiday. — Where the day, or the last day, for doing any act herein required or permitted to be done falls on Sun- day or on a holiday, the act may be done on the next succeeding secular or business day. § 6. Application of chapter. — The provisions of this act do not apply to negotiable instruments made and delivered prior to the passage hereof. § 7. Law merchant; when jjoverns. — In any case not provided for in this act the rules of the law merchant shall govern. 525 ARTICLE II. FORM AND INTERPRETATION, Section 20. Form of negotiable instrument. 21. Certainty as to sum; what constitutes 22. When promise is unconditional. 23. Determinable future time; what constitutes. 24. Additional provisions not affecting negotiability. 25. Omissions; seal; particular money. 26. When payable on demand. 27. When payable to order. 28. When payable to bearer. 29. Terms when sufficient. 30. Date, presumption as to. 31. Ante-dated and post-dated. 32. When date may be inserted. 33. Blanks, when may be filled. 34. Incomplete instrument not delivered. 35. Delivery; when effectual ; when presumed. 36. Construction where instrument is ambiguous. 37. Liability of persons signing in trade or assumed name. 38. Signature by agent; authority; how shown. 39. Liability of person signing as agent, et cetera. 40. Signature by procuration; effect of. 41. Effect of indorsement by infant or corporation. 42. Forged signature; effect of . § 20 ( § 1). Form of negotiable instriiment. — An in- strument to be negotiable must conform to the following requirements : — 1. It must be in writing and signed by the maker or drawer. 2. Must contain an unconditional promise or order to pay a sura certain in money; 3. Must be payable on demand, or at a fixed or deter- minable future time; 526 APP.] FORM AND INTEHPHETATION. ART. II. 4. Must he [jayublc 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, § 21 (§ 2). Certainty as to sum; what constitutes. — The sum payable is a sum certain within the meaning ol" this act, although it is to l)e paid: — 1. With interest ; or 2. By stated installments; or 3. By stated installments, with a provision that upon default ill payment of any installment or of interest, the whole shiiU l)ecome due; or 4. With exchange, whether at a fixed rate or at the cur- rent rate ; or 5. W^ilh costs of collection or an attorney's fee, in case payment shall not be made at maturity. § 22 (§ 8). Wlien promise is unconditional. — An un- qualified order or promise (o pay is unconditional within the meaning of this act, though coupled with: — 1, An indication of a particular fund out ot" 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, § 23 (§ 4). Determinable future time; what consti- tutes. — 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 527 ART. II. THE NEGOTIABLK INSTRUMENTS LAW. [aPP. 2. Oil or before a fixed or (lctermin;ible future lime specified therein ; or 3. On or at a fixed period after the occurrence of a spec- fied event, which is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negoti- able, and the happening of the event does not cure the defect. § 24 (§ 5). Additional provisions not affecting nego- tiability. — An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an in- strument 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 instrument be not paid at maturity ; or 3. Waives the benefit of any law intended for the advan- tage 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. § 25 (§ 6). Omissions; seal; particular money. — The validity and negotiable character of an instrument 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 528 APP.] FORM AND INTERPRETATION. ART. II. 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 consideration to be stated in the instrument. § 26 (§ 7), When payable on demand. — An instru- ment 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. § 27 (§ 8). When payable to order. — 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 a maker, drawer or drawee; or 2. The drawer or maker ; or 3. The drawee; or 4. Two or more payees jointly ; or 5. One or some of several payees ; or 0. The holder of an office for the time beins:. Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable certainty. § 28 ( § 9). When payable to bearer. — The instrument is payable to bearer : — 1. When it is expressed to be so payable; or 34 52fl ART. II. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. 2. When it is payable to a person named therein or bearer ; or 3. When it is payable to the order of a fictitious or non- existing person, and such fact was known to the person making 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. § 29 (§ 10). Terms, when sufficient. — 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 thereof. § 30 (§11). Date, presumption as to. — Where the in- strument or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the date of the making, drawing, acceptance or indorsement, as the case may be. § 31 (§ 12). Ante-dated and post-dated. — The instru- ment is not invalid for the reason only that it is ante-dated or post-dated, provided this is not done for an illejral or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. §32 (§ 13). When date may be inserted. — Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an in- strument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or ac- ceptance, and the instrument shall be payable accordingly. 530 APP.] FORM AXD INTERPRETATION. ART. II. The insertion of a wrong date does not avoid the instru- ment 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. § 33 ( § 14). Blanks; when may be filled. — Where the instrument is wanting in any material particular, the per- son in possession thereof has a jjyima facie authority to complete it by filling up the blanks therein. And a signa- ture 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 it up as such for any amount. In order, however, that any such instrument, when com[)leted, may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority 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 pur- poses in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time. § 34 (§ 15). Incomplete instrument not delivered. — Where an incomplete instrument has not been delivered it will not, if completed aid negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon befori> delivery. § 35 (§ l(i). Delivery; when effectual; when pre- sumed. — Eveiy contract on a negotiable instrument is incomplete and revocable until delivery of the instrument 531 ART. II. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. for the purpose of giving effect thereto. As between im- mediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made cither by or under the authority of the party making, drawing, accepting or indorsing, as the case may be ; and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property 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 lia- ble 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. § 36 (§ 17). Coiisstruction where instrument is ambig- uous. — Where the language of the instrument is ambig- uous, or there are omissions therein, the following rules of construction apply : — 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, references 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 instru- ment, 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. Where there is a conflict between the written and 532 APP.] FORM AND INTEUPRETATION. ART. II. printed provisions of tlie instrument, the written provisions prevail ; 5. Where the instrument is so ambiguous 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 promise to pay " is signed by two or more persons, they are deemed to be jointly and severally liable thereon. § '"57 (§ 18). Liability of person signing' in trade or assumed name. — 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. § 38 ( § 19). Signature by agent; autliority ; Low shown. — The signature of any party may bo made by a duly authorized agent. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agency. § 39 (§ 20). Liability of person signing as agent, etc. — 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 addition of words describing him as an agent, or as filling a representative character, without disclosing his princi));il, does not exempt him from personal liability. 533 ART. 11. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. § 40 (§ 21). Signature by procuration; effect of. — 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. § 41 (§ 22). Effect of indorsement by infant or corpo- ration. — The indorsement or assignment of the instru- ment 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. § 42 (§ 23). Forjjed signature; effect of. — Where a signature is forged or made without authority of the per- son whose signature it purports to be, it is wholly inoper- ative, 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 ngain-t whom it is sought to enforce such right isi)recluded from setting up the forgery or want of authority. 534 ARTICLE Til. CONSIDERATION OF NEGOTIABLE INSTRUMENTS. Section 50. Presumption of consideration. 51. What constitutes consideration. 52. What constitutes holder for value. 53. When lien on instrument constitutes holder for value. 54. Effect of want of consideration. 55. Liability of accommodation party. § 50 ( § 24). Presumption of consideration. — Every negotiable instrument is deemed ^>"ma facie to have been issued for a valuable consideration; and every person whose t^ignaturo appears thereon to have become a party thereto for value. § 51 (§ 25). Consideration, what constitutes. — Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value.; and is deemed such whether the instrument is pa3'able on demand or at a future time. § 52 (§ 2(5). What constitutes holder for value. — Where value has at any time been given for the instru- ment, the holder is deemed a holder for value in respect to all parties who became such prior to that time. § 53 (§ 27). "Wlicn lien on instrument constitutes holder for value. — Where the holiler has a lieu 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. 535 ART. III. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. § 54 (§ 28). Effect of waut of cousideration. — Ab- sence 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. § 55 (§ 29). Liability of accommodation party. — An accommodation party is one who has signed the instrument as maker, drawer, acceptor or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instru- ment to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party. 536 ARTICLE IV. NEGOTIATION. Section 60, What constitutes negotiation. 61. Indorsement; how made. 62. Indorsement must be of entire instrument. 63. Kinds of indorsement. 64. Special indorsement; indorsement in blank. 65. Blank indorsement; how changed to special indorsement. 66. When indorsement restrictive. 67. Effect of restrictive indorsement; rights of indorsee. 68. Qualified indorsement. 69. Conditional indorsement. 70. Indorsement of instrument payable to bearer. 71. Indorsement where payable to two or more persons. 72. Effect of instrument drawn or indorsed to a person as cashier. 73. Indorsement where name is misspelled, et cetera. 74. Indorsement in representative capacity. 75. Time of indorsement; presumption. 76. Place of indorsement: presumption. 77. Continuation of negotiable character. 78. Striking out indorsement. 79. Transfer without indorsement; effect of. 80. When prior party may negotiate instrument. § 60 (§ 30). What constitutes negotiation. — An in- strument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer it is negotiated by delivery ; if payable to order it is negotiated by the indorsement of the holder completed by delivery. § 61 (§ 31). Indoi'seiucut ; liow made. — The indorse- ment must be written on the instrument itself or upon a 537 ART. IV. THE NEGOTIABLE INSTRUMENTS LAW. [aI'P. paper attached thereto. The signature of the iiidorser, without additional words, is a sufficient indorsement. § 62 ( § 32). ludorsemeut must be of entire instru- ment. — The indorsement must be an indorsement of the entire instrument. An indorsement, which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the instrument to two or more indorsees severally, does not operate as a negotiation of the instrument. But where the instrument has been paid in part, it may be indorsed as to the residue. § 63 ( § 33). Kinds of indorsement. — An indorsement may be either special or in blank; and it may also be either restrictive or qualified, or conditional. § 64 (§ 34). Special indorsement; indorsement in blank. — 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 nesfotiation 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. § 65 (§35). Blank indorsement; how changed to special indorsement. — The holder may coQVcrt a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract con- sistent with the character of the indorsement. § 66 ( § 36). When indorsement restrictive. — An in- dorsement is restrictive, which cither : — 1. Prohibits the further negotiation of the instrument; or 2. Constitutes the indorsee the agent of the indorser ; or 538 APP.] NEGOTIATION. ART. IV. 3. Vests the title in the indorsee in trust for or to tlie use of some other person. But the mere absence of words implying power to nego- tiate does not make an indorsement restrictive. § 67 (.§ 37). Effect of restrictive indorsement; rights of indorsee. — A restrictive indorsement confers upon the indorsee the right; — 1. To receive payment of the instrument ; 2. To Ijring 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 oidy the title of the first indorsee under the restrictive indorsement. § 68 (§ 38). Qualified indorsement. — Qualified in- dorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorsee's signature the words " without recourse " or any words of similar import. Such an indorsement does not impair the negotiable character of the instrument. § 61) (§ 39). Conditional indorsement. — Where an in- dorsement is conditional, a party required to pay the in- strument 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 indorsing conditionally. § 70 (§ 40). Indorsement of instrument payable to bearer. — Where an instrument, payable to bearer, is in- 539 ART. IV. TllH KEGOTIABLE JNSTKUxAIENTS LAW. [aPP. dorsed specially, it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as indorser to only such holders as make title through his indorsement. § 71 (§ 41). Indorsement where payable to two or more persons. — Where an instrument is payable to the order of two or more payees or indorsers who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others. § 72 (§ 42). Effect of instrument drawn or indorsed to a person as cashier. — Where an instrument is drawn or indorsed to a person as " cashier" or other fiscal officer of a bank or corporation, it is deemed pj^iiPM J^acie to be payable to tiie bank or corporation of which he is such officer; and may be negotiated by either the indorsement of the bank or corporation, or the indorsement of the officer. § 73 (§ 43). Indorsement where name is misspelled, et cetera. — 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. § 74. (§ 44). Indorsement in representative capac- ity. — Where any person is under obligations to indorse in a representative capacity, he may indorse in such terms as to negative personal liability. § 75 (§45). Time of indorsement; presumption. — Ex- cept 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. 540 APP.J NEGOTIATION. ART. IV. § 76 (§ 46). Place of indorsement; presumption. — Except where the contrjiiy appears, every indorsement is presumed prima facie to have beea made at the place where the instrument is dated. § 77 (§ 47). Continuation of negotiable character. — An instrument negotiable in its origin continues to be nego- tiable until it has been restrictively indorsed or discharged by payment or otherwise. § 78 (§ 48). Striking out indorsement. — The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument. § 79 (§ 49). Transferwithout indorsement; effect of. — Where the holder of an indorsement 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 determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made. § 80 (§ 50). When prior party may negotiate instru- ment. — 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. 541 ■x-* ARTICLE V. RIGHTS OF HOLDERS. Section 90. Rights of holder to sue; payment. 91. What constitutes a holder in due course. 92. When person not deemed holder in due coarse. 93. Notice before full amount paid. 94. When title defective. 95. What constitutes notice of defect. 96. Rights of holder in due course. 97. When subject to original defenses. 98. Who deemed holder in due course. § 90 (§ 51). Right of holder to sue; payment. — The holder of a negotiable instrument may sue thereon in his own name ; and payment to him in due course discharges the instrument. § 91 (§ 52). What constitutes a holder in due course. — A holder in due course is a holder who has taken the instru- ment 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. § 92 (§ 53). When person not deemed holder In due course. — 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. 542 APP.] RIGHTS OF HOLDERS. ART. V. § 93 (§ 54). Notice before full amount paid. — Where the transferee receives notice of any infirmity in the instru- ment 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. § 94 (§ 55). When title defective. — The title of a per- son who negotiates an instrument is defective within the meaning of this act when he obtained 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. § 95 (§ 56). What constitutes notice of defect. — To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledo^e of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. § 96 (§ 57). Rights of holder iu due course. — 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 payment of the instrument for the full amount thereof against all parties liable thereon. § 97 (§ 58). When subject to original defenses. — In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable. But a holder who derives his title through a holder in due course, 543 ART. V. THE NEGOTrABLE INSTRUMENTS LAW. [aPP. and who is not himself 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. § 98 (§ 59). Who deemed holder in due course. — Every holder is deemed ^Wma 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 bur- den 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. 544 ARTICLE VI. LIABILITIES OF PARTIES. Section 110. Liability of maker. 111. Liability of drawer. 112. Liability of acceptor. 113. When person deemed indorser. 114. Liability of irregular indorser. 116. Warranty; where negotiation by delivery, et cetera. 116. Liability of general indorsers. 117. Liability of indorser where paper negotiable by delivery. 118. Order in which indorsers are liable. 119. Liability of agent or broker. § 110 (§ 60). Liability of maker. — The maker of a negotiable instrument by making it engages that he will pay it according to its tenor; and admits the existence of the payee and his then capacity to indorse. § 111 (§ 61). Liability of drawer. — 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. 35 545 ART. VI. THK NEGOTIABLE INSTRUMENTS LAW. [aPP. § 112 (§ 62). Liability of acceptor. — The acceptor l>y accepting the instrument engaj^es thut he will pay it accord- ing to the tenor of his acceptance and admits : — 1. The existence of the drawer, the genuineness of his sign;iture, and his capacity and authority to draw the in- strument; and 2. The existence of the payee and his then capacity to indorse. § 113 (§ 63). When person deemed indorser. — A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an in- dorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. § 114 (§ 64). Liability of irregular indorser. — Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, 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 muker or drawer. 3. If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee. § 115 (§ 65). Warranty where negotiation by delivery, et cetera. — Every person negotiating an instrument by delivery or by a qualified indorsement, warrants: — 1. That the instrument is genuine and in all respects what it purports to be ; 546 APP.] LIABILITIES OF PARTIES. ART. VI. 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 value- less. But when the negotiation is by delivery only, the war- ranty extends in favor of no holder other than the imme- diate transferee. The provisions of subdivision three of this section do not apply to persons negotiating public or corporate securities, other than hills and notes. § 116 (§ (56). Liability of general indorser. — Every indorser who indorses without qualification, 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 indorsement valiery negotiable instrument is payable at the time fixed tlierein without grace. Wlien 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 succeeding business day, except that instruments payable on demand 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. § 146 (§ 86). Time; how computed. — Where the inter- est is payable at a fixed })eriod after date, after sight, or after the happening of a specified event, the time of pay- ment is determined by excluding the day from which the time is to begin to run, and by including the date of pay- ment. § 147 (§ 87). Rule where instrument payable at bank. — Where the instrument is made payable at a bank it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon. § 148 (§88), What constitutes payment in due course. — Payment is made in due course when it is made at or after the maturity of the instrument to the holder thereof in good faith and without notice that his title is defective. 553 ARTICLE VIII. NOTICE OF DISHONOR. Section 160. To whom notice of dishonor must be given. 161. By whom given. 162. Notice given by agent. 163. Effect of notice given on behalf of holder. 164. Effect where notice is given by party entitled thereto. 165. When agent may give notice. 166. When notice sufficient. 167. Form of notice. 168. To whom notice may be given. 169. Notice where party is dead. 170. Notice to partners. 171. Notice to persons jointly liable. 172. Notice to bankrupt. 173. Time within which notice must be given. 174. Where parties reside in same place. 176. Where parties reside in different places. 176. When sender deemed to have given due notice. 177. Deposit in post-offlce, what constitutes. 178. Notice to subsequent parties, time of. 179. When notice must be sent. 180. Waiver of notice. 181. Whom affected by waiver. 182. Waiver of protest. 183. When notice dispensed with. 184. Delay In giving notice ; how excused. 185. When notice need not be given to drawer^ 186. When notice need not be given to indorser. 187. Notice of non-payment where acceptance refused. 188. Effect of omission to give notice of non-acceptance. 189. When protest need not be made; when must be made. § 160 (§ 89). To whom notice of dishonor must be given. — Except as herein otherwise provided, when a 554 APP.] NOTICE OF DISHONOR. AKT. VIII. negotiable instrument has been dishonored by non-accept- ance 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. § 161 (§ 90). By whom given. — 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 reimbursscment from the party to whom the notice is given. § 162 (§ 91). Notice given by agent. — Notice of dis- honor 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. § 163 (§ 92). Effect of notice given on behalf of holder. — Where notice is given by or on behalf of the holder, it inures for the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given. § 164 (§ 93). Effect where notice is given by party entitled thereto. — • Where notice is given by or on behalf of a party entitled to give notice, it inures for the benefit of the holder and all parties subsequent to the party to whom notice is given. § 165 (§ 94). When agent may give notice. — Where the instrument has been dishonored in the hands of an ngent, he may either himself give notice to the parties liable thereon, 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 the 555 ART. VIII. THE KEGOTIABLE INSTRUMENTS LAW. [aPP. receipt of such notice has himself the same time for giving notice as if the agent had been an independent holder. § 166 (§ 95). When notice sufficient. — A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communi- cation. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby. § 167 (§ 96). Form of notice. — The notice may be in writing or merely oral and may be given in any terms which sufficiently identify the 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. § 168 (§ 97). To whom notice maybe given. — Notice of dishonor may be given either to the party himself or to his agent in that behalf. § 169 (§ 98). Notice where party is dead. — When any party is dead, and his death is known to the party giving notice, the notice must be given to a personal representa- tive if there be one, and if, with reasonable diligence, he can be found. If there be no personal representative, notice may be sent to the last residence or last place of business of the deceased. § 170 (§ 99). Notice to partners. — 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. § 171 (§ 100). Notice to jierson.s jointly liable. — Notice to joint parties who are not partners must be given to each 556 ATP,] NOTICE OF DISHONOR. AKT, VIII. of them, unless one of them hiis authority to receive such notice for the others. § 172 (§ 101). Notice to bankrupt. — 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. § 173 (§ 102). Time within which notice must be given. — Notice may be given as soon as the instrument is dishonored ; and unless delay is excused as hereinafter provided, must be given within the times fixed by this act. § 174 (§ 103). Where parties reside in same place. — Where the person giving and the person to receive 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 busi- ness 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 post-office In time to reach him in usual course on the day following. § 175 (§ 104). Where parties reside in different places. — Where the person giving and the jierson to re- ceive notice reside in different places, the notice must be given within the following times: — 1. If sent by mail, it must be deposited in the post-office In time to go by mail the day following the day of dis- honor, or if there be no mail at a convenient hour on that day, by the next mail thoroaftcr. 557 ART. VITI. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. 2. If given otherwise than through the post-office, then, within the time that notice would have been received in due course of mail, if it had been deposited in the post- office within the time specified in the last subdivision. § 176 (§ 105). When sender deemed to have given due notice. — Where notice of dishonor is duly addressed and deposited in the post-office, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails. § 177 (§ 106). Deposit in post-office; what consti- tutes. — Notice is deemed to have been deposited in the post-office when deposited in any branch post-office or in any letter box under the control of the post-office depart- ment. § 178 (§ 107). Notice to subsequent party ; time of. — 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. § 179 (§ 108). Wliere notice must be sent. — Where a party has added an address to his signature, notice of dis- honor must be sent to that address ; but if he has not given such address, then the note must be sent as fol- lows:— 1. Either to the post-office nearest to his place of resi- dence, or to the post-office where he is accustomed to receive his letters; or 2. If he live in one place, and have his place of business in another, notice may be sent to either place; or 558 APP.] NOTICE OF DISHONOR. ART. VIII. 3. If he iri sojourning in aiioUier i)lace, notice may be sent to the phice where he is so sojourning. But where the notice i.s actually received by the parly within the time specified in this act, it will be sufficient, though not sent in accordance with the requirements of this section. § 180 (§ 109). Waiver of notice. — Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied. § 181 (§ 110). Wliom affected by waiver. — Where the waiver is embodied in the instrument itself, it is bind- ing upon all parties; but where it is written above the signature of an indorser, it binds him only. § 182 (§ 111). Waiver of protest. — A waiver of pro- test, 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 [)rotest, but also of presentment and notice of dishonor. § 183 (§ 112). When notice is dispensed witli. — Notice of dishonor is dispensed with when, after the exercise of reasonable ddigence, it cannot be given to or does not reach the parties sought to be charged. § 184 (§ 113). Delay in giving notice; liow ex- cused. — Delay in giving notice of dishonor is excused when the delay is caused by circumstances beyond the con- trol of the holder and not imputal)le to his default, mis- conduct or negligence. When the cause of delay ceases to operate, notice must be given with reasonable diligence. 559 ART. VIII. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. § 185 (§ 114). When notice need not be given to drawer. — Notice of dishonor 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. § 186 (§ 115). When notice need not be given to in- dorser. — Notice of dishonor is not required to be given to an indorser in either of the following cases: — 1. Where the drawee is a fictitious person or a person not having capacity to contract, and the indorser was aware of the fact at the time he indorsed the instrument ; 2. Where the indorser is a person to whom the instru- ment is presented for payment ; 3. Where the instrument was made or accepted for his accommodation. § 187 (§ 116). Notice of non-payment where acceptance refused. — Where due notice of dishonor by non-accept- :ince has been given, notice of a subsequent dishonor by non-payment is not necessary, unless in the meantime the instrument has been accepted. § 188 (§ 117). Effect of omission to give notice of non-acceptance. — 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. 5(50 ^^^0 NOTICE OF DISHONOR. ART. VIII. § 189 (§ 118). When protest need not be made ; when must be made.- Where any negotiable instrument has been dishonored it may be protested for non-acceptance or non-payment, as the case maybe; hut protest is not re- quired, except in the case of foreign bills of exchancre 36 561 ARTICLE IX. DISCHARGE OF NEGOTIABLE INSTRUMENTS. Section 200. Instrument; how discharged. 20 lo When persons secondarily liable on, discharged. 202. Right of party who discharged instrument. 203. Renunciation by holder. 204. Cancellation; unintentional; burden of proof. 205. Alteration of instrument; effect of. 206. What constitutes a material alteration. § 200 (§ 119). Instrument; hovv discharged. — A nego- tiable 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 accommodation ; 3. By the intentional cancelhition 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. § 201 (§ 120). When persons secondarily liable on, discharged. — A person secondarily liable on the instru- ment 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 ; 562 APP.] DISCHARGE. ART. IX. 5. By a release of the principal debtor, unless the hold- er'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 enforce the instrument, unless the right of recourse against such party is expressly reserved. § 202 (§ 121). Right of party who discharges instru- ment. — Where the instrument is paid by a party second- arily liable thereon, it is not discharged ; but the party so paying it is remitted to his former rights as regards all prior parties, and he may strike out his own and all subse- quent indorsements, 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. § 203 (§ 122). Renunciation by holder. — The holder may expressly renounce his rights against any party to the instrument, before, at or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument, discharges the instrument. But a renunciation 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." § 204 (§ 123). Cancellation; unintentional; burden of proof. — A cancellation made unintentionally, or under 563 ART. IX. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. a mistake, or without the authority of tiie hulder, is inoper- ative ; but where an instrument or any signature thereon appears to have been canceled, the burden of proof lies on the party who alleges that the cancellation was made unin- tentionally, or under a mistake, or without authority. § 205 (§ 124). Alteration of instrument; effect of . — Where a negotiable instrument is materially altered with- out the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized or assented to the alteration and subsequent indorsers. 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. § 206 (§ 125). What constitutes a material altera- tion, — Any alteration which changes: — 1. The date; 2. The sum payable, either for principal or interest; 3. The time or j^lace of payment ; 4. The number or the relations of the parties; 5. The medium or currency in which payment is to be 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 alteration. 564 ARTICLE X. BILLS OF EXCHANGE; FORM AND INTERPRETATION. Section 210. Bills of exchange defined. 211. Bill not an assignment of funds In bands of drawee. 212. Bill addressed to more than one drawee. 213. Inland and foreign bills of exchange. 214. When bill may be treated as promissory note. 215. Referee in case of need. § 210 (§ 12(5). Bill of exchange defined. — A bill of exchaiiije is an unconditional order in writing addressed by one person to another, signed by the i)erson 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 order or to bearer. § 211 (§ 127). Bill not an assignment of funds in hands of drawee. — A bill of itself does not operate as an assignment of the funds in the hands of the drawee avail- able for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same. § 212 (§ 128). Bill addressed to more than one drawee. — 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. § 213 (§ 12!)). Inland and foreign bills of exchange. — An inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within this State. Any other bill is a foreign bill. Unless the contrary 565 ART. X, THE NEGOTIABLE INSTRUMENTS LAW. [aPP. appears on the face of the bill, the holder may treat it as an inland bill. § 214 (§ 130). When bill may be treated as promis- sory note. — 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 ex- change or a promissory note. § 215 (§ 131). Referee in case of need. — 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-accept- ance 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. 566 ARTICLE XL ACCEPTANCE OF BILLS OF EXCHANGE. Section 220. Acceptance, how made, et cetera. 221. Holder entitled to acceptance on face of bill. 222. Acceptance by separate instrument. 223. Promise to accept; when equivalent to acceptance. 224. Time allowed drawee to accept. 225. Liability of drawee retaining or destroying bilL 226. Acceptance of incomplete bill. 227. Kinds of acceptances. 228. What constitutes a general acceptance, 229. Qualified acceptance. 230. Rights of parties as to qualified acceptance. § 220 (§ 132). Acceptance ; how made, etcetera. — The acceptance of a bill is the siguitication by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money. § 221 (§ 133). Holder entitled to accei)tance on face of bill. — 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 dishonored. § 222 (§ 134.) Acceptance by separate instrument. — 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. 5<)7 AKT, XI, THE NEGOTIABLE INSTRUMENTS LAW. [aPP. § 223 (§ 135). Promise to accept; when equivalent to acceptance. — An unconditional promise in writing to ac- cept a bill before it is drawn is deemed an actual acceptance in favor of every person who, upon the faith thereof, receives the bill for value. § 224 (§ 136). Time allowed drawee to accept. — 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. § 225 (§ 137). Liabilityof drawee retaining or destroy- ing- bill. — Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or non- accepted to the holder, he will be deemed to have accepted the same. § 226 (§ 138). Acceptance of incomplete bill. — 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. § 227 (§ 139). Kinds of acceptances. — An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qual- ified acceptance in express terms varies the effect of the bill as drawn, 568 APP.] ACCEI'TANCE OF BILLS OF EXCHANGE. ART. XI. § 228 (§ 140). What constitutes a general accept- ance. — All 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. § 229 (§ 141). Qualified acceptance. — An acceptance is qualified, which i.s: — 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. § 230 ( § 142). Bights of parties as to qualified accept- ance. — The holder may refuse to take a qualified accept- ance, and if he does not obtain an unqualified acceptance, he 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 acceptance, 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. 569 ARTICLE XII. PRESENTMENT OF BILLS OF EXCHANGE FOR ACCEPTANCE. Section 240. "When presentment for acceptance must be made. 241. When failure to present releases drawer and indorser. 242. Presentment; how made. 243. On what days presentment may be made. 244. Presentment; where time is insufficient. 245. When presentment is excused. 246. When dishonored by non-acceptance. 247. Duty of holder where bill not accepted. 248. Rights of holder where bill not accepted. § 240 (§ 143). When presentment for acceptance must be made. — Presentment for accepttince 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. § 241 (§ 144). When failure to present releases drawer and indorser. — Except as herein otherwise pro- vided, 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 all indorsers are discharged. 570 API'.] PRESENTMENT OF BILLS OF EXCHANGE. ART. XII. § 242 (§ 145). Presentment; Low made. — Presentment for iicceptance must be made by or on behalf of the holder at a reasonable hour, on a business day, and before the bill is overdue, to the drawee or some person authorized to accept or refuse acceptance on his behalf; 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. § 243 (§ 146). On what days presentment may be made. — A bill maybe presented for acceptance on any day on which negotiable instruments may be presented for payment under the provisions of sections one hundred and thirty-two and one hundred and forty-five of this act. When Saturday is not otherwise a holiday, presentment for accept- ance may be made before twelve o'clock noon on that day. § 244 (§ 147). Presentment where time is insuffi- cient. — Wheie 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 dili- gence, to present the bill for acceptance before presenting it for payment on the day that it falls duo, the delay caused by presenting the bill for acceptance before present- ing it for payment is excused and does not discharge the drawers and indorsers. 571 ART. XII. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. § 245 (§ 148). Where presentment is excused. — Pre- sentment for acceptance is excused and a bill 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 con- tract by bill; 2. Where after the exercise of reasonable diligence, presentment cannot be made ; 3. Where, although presentment has been irregular, acceptance has been refused on some other ground. § 24G (§ 149). When dishonored by non-acceptance. — 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 can- not be obtained ; or 2. When presentment for acceptance is excused and the bill is not accepted. § 247 (§ 150). Duty of holder where bill not ac- cepted. — 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- acceptance or he loses the right of recourse against the drawer and indorsers. § 248 (§ 151). Bights of holder where bill not ac- cepted. — 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 necessary. 572 ARTICLE XIII. PROTEST OF BILLS OF EXCHANGE. Section 260. In what cases protest necessary. 2G1. Protest; how made. 262. Protest; by whom made. 263. Protest; when to be made. 264. Protest; where made. 265. Protest both for non-acceptance and non-payment. 266. Protest before maturity where acceptor insolvent. 267. When protest dispensed with. 268. Protest; where bill is lost, et cetera. § 260 (§152). Ill what cases protest necessary. — Where a foreign bill appearing on its face to be such is dishonored by non-acceptance, it must be duly protested for non-acceptance, and where such a bill which has not previously been dishonored by non-acceptance is dishonored by non-payment, it must be duly protested for non-pay- ment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does not appear on its face to be a foreign bill, protest thereof in case of dishonor is unnecessary. § 261 (§ 153). Protest; how made. — 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 ; 573 ART. XIII. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. 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. § 262 (§ 154). Protest; by wliom made. — Protest may be made by; — 1. A notary public; or 2. By any respectable resident of the place wher3 the bill is dishonored, in the presence of two or more credible witnesses. § 263 (§ 155). Protest; when to be made. — 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 protest may be sub- sequently extended as of the date of the noting. § 264 (§ 156). Protest; where made. — 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 resi- dence of some person other than the drawee, has been dis- honored by non-acceptance, it must be protested for non- payment at the pliice where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary. § 265 (§ 157). Protest both for non-acceptance and non-payment. — A bill which has been protested for non- acceptance maybe subsequently protested for non-payment. § 266 (§ 158). Protest before maturity where acceptor insolvent. — Where the acceptor has been adjudged a bank- rupt or an insolvent or has made an assignment for the benefit of creditors, before the bill matures, the holder 574 APP.] PROTEST OF BILLS OF EXCHANGE. ART. XIII. may cause the bill to be protested for better security against the drawer and indorsers. § 267 (§ 159). When protest dispensed with. — Protest is dispensed with by any circumstances which would dis- pense with notice of dishonor. Delay in noting or protest- ing is excused when 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, the bill must be noted or protested with reasonable diligence. § 268 (§ 160). Protest where bill is lost, et cetera. — 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. 575 ARTICLE XIV. ACCEPTANCE OF BILLS OF EXCHANGE FOR HONOR. Section 280. When bill may be accepted for honor. 281. Acceptance for honor; how made. 282. When deemed to be an acceptance for honor of the drawer. 283. Liability of acceptor for honor. 284. Agreement of acceptor for honor. 285. Maturity of bill payable after sight; accepted for honor. 286. Protest of bill accepted for honor, et cetera. 287. Presentment for payment to acceptor for honor; how made. 288. When delay in making presentment is excused. 289. Dishonor of bill by acceptor for honor. § 280 (§ 161). When bill may be accepted for honor. — 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 for whose account 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. § 281 (§ 162). Acceptance for honor; how made. — An acceptance for honor supra protest must be in writing and 576 APP.] ACCEPTANCE. ART. XIV. indicate tliat it is an acceptance for honor, and must be signed by the acceptor for honor. § 282 (§ 1(53). When deemed to be an acceptance for honor of the drawer. — "Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer. § 283 (§ 164). Liability of acceptor for honor. — The acceptor for honor is liable to the holder and all parties to the bill subsequent to the party for whose honor he has accepted. § 284 (§ 164). Agreement of acceptor for honor. — The acceptor for honor by such acceptance engages 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. § 285 (§ 166). Maturity of bill payable after sight; accepted for honor. — 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. § 286 (§ 167). Protest of bill accepted for honor, et cetera. — 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 presented for payment to the acceptor for honor or referee in case of need. 87 577 ART. XIV. THE NEGOTIABLE INSTRUMENTS LAW. [apP. § 287 (§ 1(38). Presentment for payment to acceptor for honor; how made. — 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 1)6 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 seventj-five. § 288 (§ 169). When delay in making presentment is excused. — The provisions of section one hundred and forty-one apply where there is delay in making present- ment to the acceptor for honor or referee in case of need. § 289 (§ 170). Dishonor of bill by acceptor for honor. — When the bill is dishonored by the acceptor for honor it must be protested for non-payment by him. 578 ARTICLE XV. PAYMENT OF BILLS OF EXCHANGE FOR HONOR. Section 300. Who may make payment for honor. 301. Payment for honor; how made. 302. Declaration before payment for honor. 303. Preference of parties offering to pay for honor. 304. Effect on subsequent parties where bill is paid for honor. 305. "Where holder refuses to receive payment supra protest. 306. Rights of payor for honor. § 300 (§ 171). Who may make payment for honor. — Where a bill has been protested for non-payment, any per- son 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. § 301 (§ 172), Payment for honor ; how made. — The ));iyment 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. § 302 ( § 173). Declaration before payment for honor. — The notarial act of honor must be founded on a declara- tion made by the payor for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays. § 303 (§ 174). Preference of parties offering to pay for lionor. — Where two or more persons offer to pay a bill for the honor of different parties, the person whose 579 ART. XV. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. payment will discharge most parties to the bill is to be given the preference. § 304 (§ 175). Effect on subsequent parties where bill is paid for honor. — Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged, but the payor for honor is subrogated for, and succeeds 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. § 305 (§ 176). Where holder refuses to receive pay- ment supra protest. — Where the holder of a bill refuses to receive payment supra protest, he loses his right of re- course against any party who would have been discharged by such payment. § 306 (§ 177). Rights of payor for honor. — The payor for honor on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is en- titled to receive both the bill itself and the protest. 580 ARTICLE XVI. BILLS IN A SET. Section 310. Bills in sets constitute one bill. 311. Rigtits of liolders wliere different parts are negotiated. 312. Liability of holder who indorses two or more parts of a set to different persons. 313. Acceptance of bills drawn in sets. 314. Payment by acceptor of bills drawn in sets. 315. Effect of discharging one of a set. § 310 ( § 178). Bills in sets constitute one bill. — 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. § 311 (§ 179). Rights of holders where different parts are negotiated. — 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. § 312 (§ 180). Liiability of holder who indorses two or more parts of a set to different persons. — Where the holder of a set indorses two or more parts to different per- sons ho is liable on every such part, and every indorscM- subsequent to him is liable on the part ho has himself in- dorsed, as if such parts were separate bills. § 313 (§ 181). Acceptance of bills drawn in sets. — The acceptance msiy l)o written on any part and it muijt be 581 ART. XVI. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. 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. § 314 (§ 182). Payment by acceptor of bills drawn in sets. — 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. § 315 (§ 183). Effect of discharging one of a set. — Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or other- wise the whole bill is discharged. 582 ARTICLE XVII. PROMISSORY NOTES AND CHECKS. Section 320. Promissory note defined. 321. Check defined. 322. Within what time a check must be presented. 323. Certification of check ; effect of. 324. Effect where holder of check procures it to be certified. 325. When check operates as an assignment. § 320 (§ 184). Promissory note defined. — A negotiable promissory note within the meaning of this act is an un- conditional 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 dn.wn to the maker's own order, it is not complete until indorsed by him. § 321 (§ 185). Check defined, — 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 payable on demand apply to a check. § 322 ( § 186 ). Within what time a check must be pre- sented. — 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, §323 (§187). Certification of check; effect of. — Where a check is certified bylhc bank on which it is drawn the certification is equivalent to an acceptance. 583 ART. XVII. THE NEGOTIABLE INSTRUiMENTS LAW. [aPP. § 324 (§ 188). Effect where the holder of check pro-- cures it to be certified. — Where the holder of a check procures it to be accepted or certified the drawer and all indorsers are discharged from liability thereon. § 325 (§ 189). When check operates as an assign- ment. — A check of itself does not operate as an assignment 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. 584 ARTICLE XVril. NOTES GIVEN FOR PATENT RIGHTS AND FOR A SPECU- LATIVE CONSIDERATION. Section 330. Negotiable instruments given for patent rights. 331. Negotiable instruments given for a speculative consid- eration. 332. How negotiable bonds are made non-negotiable. § 330. Negotiable instruments given for patent rights. — A promissory note or other negotiable instrument, 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 " prom- inently and legibly written or printed on the face of such note or instrument above the signature thereto ; 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 holder ; but this section does not apply to a negotiable instrument given solely for the purchase price or the use of a patented article. § 331. Negotiable instrument for a speculative consideration. — 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 product at the time, in the locality, or of the membership and rights in an association, company or combination to produce or sell any farm 585 ART. XVIII. THE NEGOTIABLE INSTRUMENTS LAW. [aPP. product at a fictitious rate, or of a contract or bond to pur- chase or sell any farm product at a price greater by four times than the mari?et value of the same product at 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 signature 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. § 332. How negotiable bonds are made non-nego- tiable. — The owner or holder of any corporate or munici- pal bond or obligation (except such as are designated to circulate as money, payable to bearer), heretofore or here- after issued in and payable in this State, but not registered in pursuance of any State law, may make such bond or obligation, or the interest coupon accompanying the same, non-negotiable, by subscribing his name to a statement indorsed thereon, that such bond, obligation or coupon is his property ; and thereon the principal sum therein men- tioned is payable only to such owner or holder, or his legal representatives or assigns, unless such bond, obligation or coupon be transferred by indorsement in blank, or payable to bearer, or to order, with the addition of the assignor's place of residence. 586 ARTICLE XIX. LAWS REPEALED; WHEN TO TAKE EFFECT. Section 340. Laws repealed. 341. When to take effect. § 340. T^aws repealed. — The laws or parts thereof specified in the schedule hereto annexed are hereby repealed. § 341. When to take effect. — This chapter shall take effect on the first day of October, eighteen hundred and ninety-seven. 587 INDEX. The general references are to sections of the text of the treatise ; the references in parentheses, e. g. (184), are to pages, where illustrative cases are found printed in full; and the references niarljed A, e. g. A4, are to the sections of the Negotiable Instruments Law, which is printed as an appendix. ACCEPTANCE, of drafts or warrants of ofQcers of private corporations, 46. imports consideration, 50. the object and effect of acceptance, 57 (188), A112, A220. when and in what cases must presentment for acceptance be made — effect of failure, 58, A187-189, A240, A241, A246-A248. presentment by whom and to whom, 59. where and at what time must presentment be made, 60 (184), A4, A243. form and manner of presentment, 61, A224, A242. when presentment is waived, 62, 147 (404). who may accept, 63, A215. acceptance before and after completion of the bill, 64, A226. revocation of acceptance, 65 (102). acceptances when required to be in writing, 66, A221, A222. form and phraseology of acceptance, 67. implied acceptances — detention or destruction of bill, 68, A225. agreement to accept, 69, A223. conditional acceptances, 70, A227-A230. acceptances for honor or supra protest, 71, A280-A289, A300-A306. what acceptance admits, 72. certified notes, 73. exhibition of bill, and its retention by drawee, when acquired in presentment for, 61. which part may be presented, where bill is executed in duplicate or triplicate, 61. after maturity, 64. on separate paper, 67, A222. acceptance defined. A2. See Excuses for Faii.uuk of Prf.sentmknt, Protest and Notice. (5sn) INDEX. ACCEPTANCE OF PAPER, included in delivery, (see delivery.) ACCEPTOR. See Acceptance. not entitled to protest or notice, 92. not discharged by failure to make presentment for payment on day of maturity, 1 14. not discharged by want of notice of dishonor, 130. ACCIDENT, to holder or paper, as an excuse for failure of presentment, protest and notice, 145. ACCOMMODATION PAPER, executed by partner, 41. executed by private corporation, 43. real and apparent relation of parties as against bona fide holders, 52, 161. same consideration may support obligation of principal debtor and accommodation party, 53 (440). general discussion of, 54. rights of bona fide holder to, as affected by transfer before or after maturity, 107. knowledge of, how far affects bona fide ownership, 111. See Sureties and Guarantors. ACCOMMODATION PARTIES, canceled sureties as, 161. payment by, 179. See Accommodation Paper and Sureties and Guarantors. ADDRESS, ignorance of, as an excuse for failure of presentment and pro- test, 144. ADEQUACY, of consideration as affecting bona fide ownership, as constructive notice of fraud, 103. ADMINISTRATORS, as parties, 49. presentment for acceptance to, 59. presentment for payment by, 115. presentment for payment to, 117. notice of dishonor by and to, 131, 132 (379). ADMISSIONS, from acceptance, 72. AGENT, delivery by, 26. power of, to fill up blanks, 28, 96. execution of bill or note by, 39, A38, A40, 590 INDEX. AGENT — Continued, signature by, 40, A40. liability of, on bill or note, 39, 40, A39. of private corporation, 43 (p. 115, 122, 125, 127). of governments, 47. of municipal or public corporations. 48. presentment for acceptance by, and to, 59, 63. authority of, to indorse, (227). Indorsee for collection takes only as, 90, (239"), (244). paper executed in blank, and wrongfully filled up by, 9G, (281). may make presentment for payment, 115. possession of paper, proof of authority to present for payment, 116. presentment for payment to, 117. may give notice of dishonor, 131, A1G2, A165. may receive notice of dishonor, 132. AGREEMENTS CONTROLLING THE OPERATION OF BILLS AND NOTES, 29-32, A24. kinds of agreements, 29. what memoranda will control, 30. collateral agreements, 31. agreements to renew, 32. AGREEMENT TO ACCEPT, G9. ALIEN ENEMIES, as parties to bills aud notes, 38. ALLONGE, 87. ALTERATIONS. See Forgery. AMBIGUITIES, in instruments, how construed, A36. AMBIGUOUS INSTRUMENTS, 7, A36. ANTECEDENT DEBTS, when a sufficient consideration, 56. ANTE-DATING, of bills and notes, 8, 26, A31. ASSIGNABILITY, of choses in action, 74. and negotiability distinguished, 17, 107. ASSIGNABILITY AND NEGOTIABILITY, distinguished, 17, 107. ASSIGNMENT, by bill of exchange, 5. by check, 177, (491). ASSIGNORS, of paper payable to bearer, liability of, 76. In bankruptcy or insolvency, do nut take in usual course of bu8!ne8a,106. 591 INDEX. ATTACHMENT, transfer by, 81. not usual course of business, 106. ATTORNEY'S FEES, stipulation for, how afifects negotiability, 21 (p. 56). BANK OR BANKER, defined, A2. note or bill payable at, 17, A147. See Checks. BANKRUPT, as party to bill or note, 37. BEARER, bill and notes payable to, 17, A28. transfer of, 75. liability of assignors of, 76. defined, A2. BILLS AND NOTES, GENERAL CHARACTERISTICS. what is money, 1. commercial paper defined, 2. bills of exchange — foreign and inland bills, 3, A2, A210, A213, A310-A315. forms of bills of exchange, i, A20. the effect of a bill — when does it operate as an equitable assign- ment 5, A211. promissory notes defined, 6, A2, A320. form of a promissory note, 7, A20, A36, A214. BILLS, NOTES AND CHECKS, REQUISITES AND COMPONENT PARTS, the date, 7, A25, A30, A32. ante-dating and post-dating, 8, A31, 26. name of drawer or maker 9 (p. 52), A20, AllO, Alll. joint and several notes, 10, A36. two or more drawers, 11. liability of one or more joint makers or drawers, as sureties, 12. the name of the drawee, 13 (p. 41), A20, A215. the name of the payee, 14. fictitious or non-existing parties, 15, A37. same persons as different parties, 16. words of negotiability, 17, A20, A27, A28. a distinct obligation to pay, 18 (p. 54), A20. time of payment, 19, A20, A23, A26. payment must be unconditional, 20, A20, A22. certainty as to amount of payment, 21 (pp. 62, 56), A21, A36. payment in money only, 22, A25. the place of payment, 23, A25. 592 INDEX. BILLS, NOTES AND CHECKS, REQUISITES AND COMPONENT PARTS — Continued, acknowledgment of consideration, 24, A25. sealed instruments not negotiable, 25 (p. 62), A25. delivery, 26, A35. delivery as an escrow, 27 (p. 68), delivery of bills and notes executed in blank, 28, A33, 96, A34, agreements controlling operations of, 29-32, A24. kinds of, 29. what memoranda will control, 30 (pp. 68, 70, 73). collateral agreements, 31. agreements to renew, 32. form and formalities of checks, 167. payment by, 182, 183 (481), (505), (508). BILLS OF EXCHANGE, foreign and inland bills, 3, A210. forms of, 4, A214. effect of, 5, A211. distinguished from checks, 164-167. acceptance of. See Acceptance. See Bills and Notes. BLANK, delivery of instruments executed in, 2K, 96, A33, A34. effect of, in statement of amount of money (HI. Cas., p. 52). acceptance of bill executed in, 64. indorsement in, 89 (235). BLANK SIGNATURE, bill or note, written over, without authority — right of bona fide purchaser, 97. BONA FIDE, what is meant by, 101. See Bona Fidk Holder. BON.\ FIDE HOLDER, how affected by flctltious parties, 15. right of, in case of escrow, 27. as against infant party, 33. as against lunatics, 34. as against drunkards and spendthrifts, 35. as against married women, 36. as against bankrupts and insolvents, 37. as against agent, 39. in paper of partnership, 41. in paper of private corporations, 42. in paper of municipal corporations, 48. where fiduciaries and personal represi;ntatives are parties, 49. defense of consideration against, 51 (162). not affected by unreal appearance of the relation of parties, 52. :'.,s 5l>3 INDEX. BONA FIDE HOLDER — Continued. may enforce accommodation paper, 54 (158). will antecedent debt be sufficient consideration to make one a, 55. when is a pledgee a, 56. when void note cannot be enforced by, (162). protected from defenses growing out of wrongful filling up of blanks, 64. cannot be affected by revocation of acceptance, 65. how affected by false representations of drawer (188). where paper payable to order is indorsed subsequent to transfer by delivery, 78. where paper payable to order is transferred by delivery, 78, 83, 89. as affected by prior sale without delivery, 79. not affected by change in apparent order of indorsement, 86. as affected by restrictive indorsement and its cancellation, 90 (239). who is a bona fide holder; purchaser from, 93, 107, A80, A91, A94. what defenses will and will not prevail against bona fide holders — general statement, 94 (275), (283), A93, A95, A96, A97. instruments void for want of delivery, 95. blank instruments delivered to agent and filled up in violation of instructions, 90 (281), A34. bill or note written over a blank signature, 97. bills or notes executed by mistake or under false representa- tions, 98. bills and notes executed under duress, 99. estoppel as affecting defenses as against bona fide holders, 100. what is meant by bona fide, 101. bona fide holder must be a holder for value, 102 (283), (285), A52. when inadequacy of price constructive notice of fraud, 103. inadequacy of price for indorsement as affected by laws against usury, 104. inadequacy of price, as affecting amount which may be recovered of primary obligor and indorser, 105. usual course of business, 106 (285), (290), A91, A92. transfer before and after maturity, 107 (294), A80. paper payable on demand or at sight when overdue, 108. transfer after default in the payment of installment of principal or interest, 109. transfer on last day of grace, or day of maturity, 110. actual and constructive notice of defenses. 111, A93, A94. notice by lis pendens, 112. burden of proof as to bo7ia Ude ownership, 113, A98. rights of, of forged or altered bill or note, 155, A42. parol evidence to prove real character of concealed sureties, as against, 161. what will discharge sureties and guarantors as against, 162. rights of, in regard to checks, 175, 176. 594 INDEX. BROKER, liability of, in transfer of paper by delivery, 77, A119. BURDEN OF PROOF, of bona fide ownership, 113. of right to receive payment, and to malie presentment, 116. as to lime of alteration, 152. CERTIFICATE OF PROTEST, 128. CERTIFICATION, of notes, 73. of check, does not change requirements of transfer to make bona fide ownership (290). of checks, generally discussed, 168 (473), (475). CHECKS, as a gift causa mortis, 82. transfer of certified, unindorsed, whether it gives rights of bona fide holder (290). distinguished from bills of exchange, 164, A321. are drawn on a bank or banker, 165. payable on demand and without grace, 166. the form and formalities of, 167. certification of, 168 (473), (475), A323, A324. negotiation and transfer of, 169. memorandum, 170. presentment, notice and protest of, 171. within what time must check be presented, 172 (478), A322. presentment of, by mail and by deposit, 173 (491). what will excuse failure or delay in demand and notice, 174. when stale or overdue, 175. effect of death of drawer, 176. right of checkholder to sue the bank, 177 (491 ) , A325. payment through clearing house (481) (508). payment by, 183 (508), (481). CLEARING HOUSE, payment through (481). conditional (508). COLLATERAL AGREEMENTS, controlling operation of bills and notes, 31 (pp. 70, 73). COLLATERAL SECURITIES, as an excuse for failure of presentment, protest and notice, 146. surrender of, effect on liability of sureties and guarantors, 162 (453;. See Skcuritiks. COLLECTION. indorsement for, 90 (239), (244). 595 INDEX. COMMERCIAL PAPER, defined, 2. COMPLETION, of bill after acceptance, 64. See Blank. CONDITIONAL ACCEPTANCE, 70. CONDITIONAL INDORSEMENT, 90. CONDITIONS, to payment and time of payment, 19, 20. CONFLAGRATIONS, as an excuse for failure of presentment, protest and notice, 141 (394). CONFLICT OF LAWS, what law controls construction (324). CONSIDERATION, acknowledgment of, how far necessary to negotiability, 24, 50. '* value received " 24, 50. necessary to support agreements controlling operation of bills and notes, 29-32. necessity of consideration — what instruments import a considera- tion, 50, A50. between whom question of consideration may be raised — bona fide holders, 51 (158), (275), A52, A54. real and apparent relation of parties, 52. one consideration supporting the obligations of more than one, 53, A52. accommodation paper, 54 (161), A55. money consideration — contemporary loans, future advances and existing debts, 55 (156), (283), (285), A51. when is a pledgee a bona fide holder for value, 56 (295), A53.^ indorsements import, 50. not necessary between acceptor and holder (188). how far necessary to indorsement, 83. statement of, how far notice. 111. want or failure of, as affecting burden of proof of bona fide owner- ship, 113. CONSTRUCTIVE NOTICE, of fraud, when inadequacy of price is, 103. of defenses, 111. See Notice. CONTEMPORARY LOANS, a suflScient consideration, 55. CONTRIBUTION, liability of indorsers for, 86. between co-sureties, 1G3. 596 INDEX. CORPORATIONS. See Private Curpokations; Municipal Copora- TIONS. COSTS OF COLLECTION, stipulation for, how affects negotiability, 21. CURRENCY. tlistinguislied from money, 22. payment in, destroys negotiability, 22. CURTESY, WORDS OF, does not affect negotiability, 18. DAMAGE, to holder, as an element in determining the necessity of present- ment, protest and notice, 148. DATE, its necessity, and presumptions as to, 7, A25, A30, A32. ante-dating, post-dating, 8, 26, A31. payment, certain time after, 19. bills payable given time after, when presentment for acceptance must be made, 58. of acceptance, 61, 67. of dishonor must be inserted in certificate of protest, 128. of check, 167. DAYS OF GRACE, 119. not allowed in checks, 166. DEATH, as an excuse for failure of presentment, protest and notice, 145. DEFENSES, against bona fide holders, in general, 94. fraud, 94. forgery, 94. illegality, 94. incapacity of parties, 94, instruments void for want of delivery, 95. blank instruments wrongfully filled up by agent, 96. instrumeut wrongfully written over blank signature, 97. mistake or misrepresentation, 98. duress, 99. affected by estoppel, 100. burden of proof, 113. DELAY, in transmission by mail as an excuse for failure of presentment, protest and notice, 145. DELIVERY, essential, 26. defined, A2. 597 INDEX. DELIVERY — Continued. presumption as to time of, 26. what is a sufficient, 26 (p. 112). in escrow, 27. of bills and notes executed in blank, 28. prevents revocation of acceptance, 65 (192). except when procured by fraud (192). transfer by, of bills and notes payable to bearer, 75. of paper indorsed in blanls, 75. of paper payable to order, 78, 106. liability of broker in transfer by, 77. sale of paper without, 79 (20G). essential in gift causa mortis, 82. essential to indorsement, 83. instrument void for want of, bona fide holder, 95. essential to check, 176. time of, not date, considered, as to bona fide holders, 175. DEMAND, payable on, and certain time after, 19, A26. bills payable on, when presentment for acceptance must be made, 58.(187). paper payable on demand is overdue, 108, 175. checks are payable on, 166. DEPOSIT, of bill or note in bank, good presentment, 122 (319). DESTRUCTION OF BILL, by drawee, an implied acceptance, 68. or note, as an excuse for failure of presentment, protest and notice, ■ 148. DETENTION OF BILL, by drawee, an implied acceptance, 68. DISHONOR, of paper, liability of assignors of paper payable to bearer, 76. noting, and extending protest, 127. DISTURBANCES, POLITICAL AND SOCIAL, as an excuse for failure of presentment, protest and notice, 141 (394). DONATIO MORTIS CAUSA, 82. DRAFTS, of officers of private corporation, 46. See Bills of Exchange. DRAWEE. See Acceptor, Acceptance, name of, 13 (41), A215. effect of uncertainty, 13 not liable until acceptance, 57. 598 INDEX. DRAWEE — Continued. his relation to bill before acceptance, 57. presentment for acceptance on two or more drawees, A212, 63, 59. in case of death of, 59. can alone accept, 63, A215. false representations by drawer (188). how affected by stipulation of place of payment before acceptance, 118. rights of drawee bank, who pays check on forged indorsements (420). DRAWER OF BILL OR CHECK, name, 9. two or more, 11. liability as surety, 12. what is a sufficient signature (52). primary obligor before, and secondary obligor after acceptance, 57. discharged by failure to present for acceptance, 58. false representations by drawer (188). discharged by failure to make presentment for payment on day of maturity, 114. failure to give notice of dishonor, discharges, 130, 132, A187, A188. not entitled to notice, where he had no right to expect acceptance or payment, 142 (396) A139, A140, A185. effect of death of, 176. DRUNKARDS, as parties to bills and notes, 35. » presentment for acceptance where drawees are, 62. DRUNKENNESS, as affecting capacity of parties to bills and notes, 35. See Drunkards. DUE-BILL, whether negotiable, 18, DURESS, as a defense against bona fide holder, 99. EPIDEMICS, as an excuse for failure of presentment, protest and notice, 141 (394). EQUITABLE DEFENSES, do not prevail against bona fide holder, 94. See Dkfenses and Bona Fidk Holders. ESCROW, delivery in, 27 (p. 63). ESTOPPEL, as affecting defenses against bona fide holders, 100. 599 INDEX. EVIDENCE, of what is certificate of protest, 129. EXCHANGE, stipulation for, how affects negotiability, 21. EXCUSES FOR FAILURE OF PRESENTMENT, PROTEST AND NOTICE, war, political and social disturbances, pestilence, epidemics, con- flagrations, floods, etc., 141 (394), A141, A183. drawing with no right to expect acceptance or payment, 142 (396), A139, A140, A185, A186. void note, 143. ignorance of and failure to discover the address of parties, 144, A141, A142, A183. sickness, death or accident to holder or to paper, 145, A141, A184. possession of security by drawer or indorser, 146. waiver of presentment, protest and notice, 147 (404), A142, A180- A182. no damage to holder — loss or destruction of the instrument, 148, (442), A2G8. in the case of checks, 171-174. See Checks. in presentment for acceptance, A245. EXECUTION, transfer by, 81. not usual course of business, 106. EXECUTpRS, * as parties, 49 (p. 137). presentment for acceptance to, 59. presentment for payment by, 115. presentment for payment to, 117. notice of dishonor by and to, 131, 132 (379). EXISTING DEBTS, when a sufficient consideration, 55. EXONERATION, liability of indorsers for, 86. EXTENDING PROTEST, 127. EXTENSION OF TIME OF PAYMENT, efiEect on liability of indorsers, 84, 144. sureties and guarantors, 162 (442). drawer, 114. See Indorsement and Presentment for Payment. FICTITIOUS OR NON-EXISTING PARTIES, effect on rights of bona fide holders, 15 (111. Cas. p. 46). FIDUCIARY PARTIES, to bills and notes, 49. 600 INDEX. FIRM. See Partners. FLOODS, as an excuse for failure of presentment, protest and notice, 141 (394). FOUBEAUANCE TO SUE, when a sufficient consideration (156). FOREIGN BILLS OF EXCHANGE, 3. FOREIGN MONEY, payment in, destroys negotiability, 22. FORGERY, liability of assignors of paper, payable to bearer, 76. liability of indorsers, 84. as a defense against bona fide holder, 94, A42. forgery defined and explained, 149. forgery, alteration and spoliation distinguished, 150, A204, the effect of authorized alterations, 151, A205. presumption as to time of alteration and burden of proof, 162. what are material alterations, 153 (415), A206. what are immaterial alterations, 154 (416). rights of bona fide holder of forged or altered bill or note, 155, A42. recovery of money paid on a forged bill or note, 136 (420). FRAUD, as a defense to note (158). in procurement of acceptance, 65 (192). liability of assignors of paper payable to bearer, 76. liability of indorsers, 84. as a defense against bona fide holder, 94, 98. notice of, from inadequacy of consideration, 103. as affecting burden of proof of bona fide ownership, 113. FUTURE ADVANCES, a sufficient consideration, 55. GARNISHMENT, transfer by, 81 (208). GIFT CAUSA MORTIS, 82. GOVERNMENTS, as parties, 47. GRACE, days of, 119. GUARANTOR, liability of irregular indorser as, 92. what will discharge, 1G2 (440), (442), (444), (453). remedies of, 163. See Guaranty and Surktiks and Guarantors. GUARANTY, supported by what consideration, 5.3 (440). 601 INDEX. GUARANTY — Continued. liability of irregular indorser as guarantor, 92, form and requisites of a guaranty, 158. as an appurtenant to a bill or note, 159. demand of principal debtor and notice of default, when necessary, 160 (444). GUARDIANS, as parties, 49. HOLDER, defined, A2. See Bona Fide Holder. HOLIDAYS, 120. day of maturity falling on, A5. HONOR, acceptance for, 71. what, admits, 72. HOUR, of day for presentment, 121 (332). HUSBAND, riglit of, in wife's bills and notes, 36. IGNORANCE OF ADDRESS, as an excuse for failure of presentment, protest and notice, 144. ILLEGALITY, of consideration as against bona fide holders, 51, 52, 94. liability of assignors of paper payable to bearer, 76. liability of indorsers for, 84. burden of proof of bona fide ownership, 113. IMPLICATION OF LAW, as to time of acceptance, 60. acceptance by, 68. transfer by, 80. as to order of indorsements, 86. as to time of indorsement, 91. in cases of irregular indorsements, 92. when inadequacy of price gives notice of fraud by, 103. IMPLIED ACCEPTANCE, 68. IMPLIED TRANSFER, of bills and notes, 80. INADEQUACY, of consideration, as affecting bona fide ownership, as constructive notice of fraud, 103. as affecting laws against usury, 104. as determining amount or recovery by bona fide holder, 105. 602 INDEX. INCAPACITY OF PARTIES, liability of assignors of paper payable to bearer, 76. liability of indorsers, 84. as a defense against bona fide holder, 94. See Infants, Lunatics, Married Women, Drunkards, Spend- thrifts, Alien Enemies. IN DORSA, 83. INDORSEMENT, defined, A2. imports consideration, 50. same consideration supporting principal obligation and, 53. in blank makes paper payable to bearer, 75 (205), AG5, 89. of paper, payable to order, to pass legal title, 78, A79. the meaning, purpose and effect of indorsement, 83 (227), A61, A70. liability of an indorser, 84, A1I6, A117, A18G-A189. liability of indorser " without recourse," 85 (231). successive indorsement — liability for contribution and exoneration, 86 (235), A119. the place for indorsement — allonge, 87. form of the indorsement, 88, AGO, A73. indorsements iu full and in blank, 89 (235), A63, A64, A65. absolute, conditional and restrictive indorsements, 90 (239), (244J, A63, AC6, AC7, AG8, AG9. time and place of indorsement, 91, A75, A76. irregular indorsements — joint makers, grantors, indorsers, 92 (244), A36, A113, A114. cannot be partial, 83, A62. of checks, 1G9. by infant or corporation, A41. of paper payable to bearer, 83, A70, A 117. where two or more are payees, 83, A71. where paper is made payable to cashier, 44, A72. where name is raispelled, A73. may be stricken out, 84, 89, 90, A78. INDORSER, discharged by failure to make presentment for acceptance, 68. to make presentment for payment, 114. to give notice of dishonor, 130, 132 (373). possession of paper by, when proof of ownership, 116. may give notice of dishonor, when, 131. See Indorsement, Pkotkst, Presentment for Payment, Notice. INFANTS, as parties to bills and notes, 33. rights of, as against bona fide holder, 33. as agents, 39. presentment for acceptance, where drawees are, 62. indorsement by, A41. 603 INDEX. INJURY, to holder or paper, as au excuse for failure of presentment, protest and notice, 145. INLAND BILLS OF EXCHANGE, 3. no protest, in absence of statute, 123 (364). INSANE, See Lunatics. INSOLVENCY, of primary obligor, liability of assignors of paper payable to bearer, 76. liability of indorser, 84. INSOLVENT, as party to bill or note, 37. INSTRUMENT, defined, A2. INSURRECTION, as an excuse for failure of presentment, protest and notice, 141 (394). IRREGULAR INDORSEMENTS, 92 (244). ISSUE, defined, A2. JOINT AND SEVERAL NOTES, 10. JUDGMENTS, stipulation of power to confess, how affects negotiability, 21. LARCENY, of bill or note, right of bona fide purchaser, 95. LEGAL HOLIDAYS, 120. as affecting time allowed lor giving notice of dishonor, 136. LEGAL PROCESS, transfer by, 81. LEGAL TENDER, what is, 22. payment only in, 22, 181 (513). LIABILITY, primary and secondary, 57 (188), 84, A3. LIS PENDENS, notice by, 112. LOSS OF INSTRUMENT, as an excuse for failure of presentment, protest and notice, 148. 604 INDEX. LUNATICS, as parlies to bills and notes, 34. contra bona Jide holder, 34. presentment for acceptance where drawee is Insane, 62. MAIL, notice of dishonor by, 135, 137, 138. delay in transmission by, as an excuse for failure of presentment, protest and notice, 145. presentment by, 173 (491). MAKER OF NOTE, name, signature or subscription, 9. liability of irregular indorser as, 92. not entitled to protest or notice, 92. not discharged by failure to make presentment on day of maturity, 114. not discharged by want of notice of dishonor, 130. MALA FIDE, what is meant by, 101. MARRIED WOMEN, us parties to bills and notes, 30 (p. 107). as agents, 39. presentment for acceptance where drawees are, 62. MATURITY, acceptance after, 64. transfer before and after, 107. in case of bills and notes payable ou demand or at sight, 108. transfer after default in payment of installment of principal and interest, 109. transfer on last day of grace, or on day of, 110. rights of indorsee after (294), A5. presentment for payment on day of, 114, A145. computation of time of — days of grace. 119, 120, A5, A146. accelerated when and how (324). when check stale or overdue, 175. MEMORANDUM CHECKS, 170. MINORS. See Infants. MISREPRESENTATION, as a defense to note (158). as against bona fide holder, 98. MISTAKE, as a defense against bona fide holder, 98. 605 INDEX. MONEY, defined and explained, 1, 22. distinguished from currency, 22. payment only in, 22, 181 (513). a sufiicient consideration, 55. paid on forged bill or note, recovery of, 156 (420). MONTH, in statement of time of payment means calendar month, 19, 120. MUNICIPAL CORPORATIONS, as parties, 48. claims of bona fide holders, 48. NAME, of drawer or maker, 9. of drawee, 13. of payee, 14. NEGLIGENCE, as a ground of liability to bona fide holder, 95. NEGOTIABILITY, as affected by date or its absence, 7, 8. uncertainty of drawer or maker, 9-12, drawee, 13. payee, 14. fictitious or non-existent parties, 15. appearance of same persons as different parties, 16. want of words of negotiability, 17. distinct obligations to pay, 18. uncertainty as to time of payment, 19. payment, because conditional, 20. amount of payment, 21. kind of money or currency, 22. place of payment, 23. acknowledgment of consideration, 24. presence of seal, 25. delivery, 2G-28. affected by restrictive indorsement, 90 (239), (244), A63, A66, A67, A69, ATT. See Bona Fide Holder, Transfer of Bills and Notks, Indorse- ment. NEGOTIABILITY AND ASSIGNABILITY, distinguished, 17, 107. as affected by maturity of paper, 107. NEGOTIABILITY, WORDS OF, necessity for same, 17, A27, A28. " (306 INDEX. NEGOTIABLE INSTRUMENTS LAW, THE, [The Index under this heading Is exclusively to the appendix, wherein Is found the text or the Negotiable Instruments Law, which has been enacted in a number of the States.] general provisions, A 1-17 (preamble). form and interpretation of negotiable instruments, A22-42 CA1-A23;. consideration, A50-55 (A24-A29). negotiation, A60-80 (A30-A50). rights of holder, A90-98 CA51-oD). liabilities of parties, AI10-I19 (AGO-69). presentment for payment, Al 30-148 (A70-88). notice of dishonor, AlGO-189 (A89-1I8) discharge of negotiable instruments, A200-206 (AI19-126). bills of exchange; form and interpretation, A210-215 (A126-131). acceptance, A220-230 (A132-142), presentment for acceptance, A240-248 (A143-151). protest, A260-268 (A152-1C0). acceptance for honor, A280-289 (161-170). payment for honor, A300-30G (A171-177). bills in a set, A310-315 (A178-183). promissory notes and checks, A320-325 (A184-189). notes given for a patent right and for a speculative consideration, A330-332. laws repealed, when to take effect, A340-34I. Form and Interpretation, form of negotiable instrument, A20 (Al). certainty as to sum; what constitutes, A21 (A2). when promise is unconditional, A22 (A3). determinable future time; what constitutes, A23 (A4). additional provisions not affecting negotiability, A24 (A5). omissions; seal; particular money, A26 (AG). when payable on demand, A2G (A7). when payable to order, A27 (A8). when payable to bearer, A28 (A9). terms when sufficient, A29 (AlO). date, presumption as to, A30 (All). ante-dated and post-dated, A31 (A12). when date may be inserted, A32 (A13). blanks, when may be tilled, A33 (A14). incomplete instrument not delivered, A34 (A15). delivery; when effectual; when presumed, A35 (A16). construction where instrument is ambiguous, A36 (A17). liability of person signing in trade or assumed name, A37 (A18). signature by agent; authority; how shown, A38 (A19). liability of person signing as agent, et cetera, A39 (A20). signature by procuration; effect of, A40 (A21) effect of indorsement by infant or corporation, A41 (A22), forged signature ; effect of, A42 (A23). 607 INDEX. NEGOTIABLE INSTRUMENTS LAW, THE — Continued. Consideration of Negotiablk Instruments, presumption of consideration, A50 (A24). what constitutes consideration, A 51 (A25). what constitutes holder for value A52 (A26). when lien on instrument constitutes holder for value, A53 (A27). effect of want of consideration, A54 (A28). liability of accommodation indorser, A55 (A29). Negotiation, what constitutes negotiationj AGO (ASO). indorsement; how made, A61 (A31). indorsement must be of entire instrument, A62 (A32). kinds of indorsement, A63 (A33). special indorsement; indorsement in blanls, A64: (A34). blanls indorsement; how changed to special indorsement, A65 (A35). when indorsement restrictive, A66 (A36). effect of restrictive indorsement; rights of indorsee, A67 (A37). qualified indorsement, A68 (A38). , conditional indorsement, A69 (A39) . indorsement of instrument payable to bearer, A70 (A40). indorsement where payable to two or more persons, A71 (A41). effect of instrument drawn or indorsed to a person as cashier, A72 (A42). indorsement where name is misspelled, et cetera, A73 (A43). Indorsement in representative capacity, A74 (A44). time of indorsement; presumption, A75 (A45). place of indorsement; presumption, A76 (A46). continuation of negotiable character, A77 (A47). striking out indorsement, A78 (A48). transfer without indorsement; effect of, A79 (A49). when prior party may negotiate instfument, A80 (A50). Rights of Holders, rights of holder to sue; payment, A90 (A51). what constitutes a holder in due course, A91 (A52). when person not deemed holder in due course, A92 (A53). notice before full amount paid, A93 (A54) . when title defective, A94 (A55). what constitutes notice of defect, A95 (ASG). rights of holder in due course, A96 (A57). when subject to original defenses, A97 (ASS). who deemed holder in due course, A98 (A59). Liabilities of Parties, liability of maker, AllO (A60). liability of drawer, AllI (A61). liability of acceptor, Air2 (A62), when person deemed indorser, A113 (A63). 608 INDEX. NEGOTIABLE INSTRUMENTS LAW, THE — Continued, liability of irregular indorser, A114 (AG4). warranty; where negotiation by delivery, et cetera, A 115 CA65). liability of general indorsers, AUG (A66J. liability of indorser where paper negotiable by delivery, All 7 (A67). order in which indorsers are liable, A118 (A68). liability of agent or broker, A 119 (A69). Presentment for Payment, effect of want of demand on principal debtor, A130 (A70). presentment where instrument is not payable on demand, A131 (A71). what constitutes a sufficient presentment, A132 (A72). place of presentment, A133 (A73). instrument must be exhibited, A134 (A74). presentment where instrument payable at banli, A135 (A75). presentment where principal debtor is dead, A136 (A7G). presentment to persons liable as partners, A137 (A77), presentment to joint debtors, A138 (A78). when presentment not required to charge the drawer, A139 (A79) . when presentment not required to charge the indorser, A 140 (A80). when delay in making presentment is excused, A141 (A81). when presentment may be dispensed with, A142 (A82). when instrument dishonored by non-payment, A143 (A83). liability of person secondarily liable, when instrument dishon- ored, A144 (A84). time of maturity, A145 CA86). time; how computed, AUG (A86). rule where instrument payable at bank, A147 (A87). what constitutes payment in due course, A148 (A88). Notice of Disuonor, to whom notice of dishonor must be given, AIGO (A89). by whom given, AlGl (■A90). notice given by agent, A162 (A91). effect of notice given on behalf of holder, A1G3 (A92), effect where notice Is given by party entitled thereto, A1G4 (A93). when agent may give notice, A165 (A94). when notice sufficient, AIGG (A96). form of notice, A 167 (A96). to whom notice may be given, A168 (A97). notice where party is dead, A1G9 (A98). notice to partners, A17 (A99;. notice to persons jointly liable, A171 (AlOO). notice to bankrupt, A 172 (AlOl). time within which notice must be given, AI73 (A102). where parties reside in same place, A174 (A103). where parties reside in different places, AMU (A104). 89 6oy INDEX. NEGOTIABLE INSTRUMENTS LAW, THE — Continued. when sender deemed to have given due notice, A176 (A105). deposit in post-office, what constitutes, A177 (A106). notice to subsequent parties, time of, A178 (^A107). when notice must be sent, A179 (A108). waiver of notice, A180 (A109). whom affected by waiver, A181 (AllO). waiver of protest, A182 (AIll). when notice dispensed with, A183 (A112). delay in giving notice; how excused, A184 (A113). when notice need not be given to drawer, A185 (A114). when notice need not be given to indorser, A186 (A115). notice of non-payment where acceptance refused, A187 (A116). effect of omission to give notice of non-acceptance, A188 (A117). when protest need not be made ; when must be made, A189 (A118) . Discharge of Negotiable Instruments, instrument; how discharged, A200 (AllO). when persons secondarily liable on, discharged, A201 (A120), right of party who discharged instrument, A202 (A121). renunciation by holder, A203 (A122). cancellation; unintentional; burden of proof, A204 (A123). alteration of instrument; effect of, A205 (A124). what constitutes a material alteration, A206 (A126'). Bills of Exchange; Form and Interpretation, bills of exchange defined, A210 (A126). bills not an assignment of funds in hands of drawee, A211 (A127) . bills addressed to more than one drawee, A212 (A128). inland and foreign bills of exchange, A213 CA129). when bill may be treated as promissory note, A214 CA130). referee in case of need, A215 (A131). Acceptance of Bills of Exchange, acceptance, how made, et cetera, A220 (A 132). holder entitled to acceptance on face of bill, A221 (A133). acceptance by separate instrument, A222 (A134). promise to accept; when equivalent to acceptance, A223 (A135). time allowed drawee to accept, A224 (A136). liability of drawee retaining or destroying bill, A225 (A137). acceptance of incomplete bill, A226 (A138). kinds of acceptances, A227 (A139). what constitutes a general acceptance, A228 (A140). qualified acceptance, A229 (A141). rights of parties as to qualified acceptance, A230 (A142). Presentment of Bills of Exchange for Acceptance, when presentment for acceptance must be made, A240 (AI43). when failure to present releases drawer and indorser, A24I (A144). presentment; how made, A242 (A145). 610 INDEX. NEGOTIABLE INSTRUMENTS LAW, THE- Continued. on what clays presentment may be made, A243 (AU6). presentment; where time is insufficient, A244 (A147;. when presentment is excused, A245 (A148;. when dishonored by non-acceptance, A246 (A149). duty of holder where bill not accepted, A247 (A150). rights of holder where bill not accepted, A248 (A151). Protest of Bills of Exchange, in what cases protest necessary, A260(A152). protest; how made, A261 (A153J. protest; by whom made, A2(52 (A154). protest; when to be made, A263 (Alo5). protest; where made, A264 (AloG). protest both for non-acceptance and non-payment, A265 (A157). protest before maturity where acceptor insolvent, A2(J6 (A158). when protest dispensed with, A267 (A150). protest; where bill is lost, et cetera, A268 CA160). Acceptance of Bills of Exchange for Honor, when bill may be accepted for honor, A280 (A161). acceptance for honor; how made, A281 (A162). when deemed to be an acceptance for honor of the drawer A'>8'> (A163). liability of acceptor for honor, A283 CA164). agreement of acceptor for honor, A284 (A165). maturity of bill payable after sight; accepted for honor, A285 CA166;. protest of bill accepted for honor, et cetera, A286 (A167). presentment for payment to acceptor for honor; how made A287 (A168). when delay in making presentment is excused, A288 (A169). dishonor of bill by acceptor for honor, A289 (A170). Payment op Bills op Exchange for Honor, who may make payment for honor, A300 (A171). payment for honor; how made, A301 CA172). declaration before payment for honor, A302 (A173). preferene of parties offering to pay for honor, A303 CA174). effect on subsequent parties where bill is paid for honor. A304 (A175). where holder refuses to receive payment supra protest, A30r, (AI7G). rights of payor for honor, A30G (A 177). Bills in a Set, bills in sets constitute one bill, A310 (A178). rights of holders where different parts are negotiated. A3 II CA179). liability of holder who indorses two or more parts of a set to different persons, A312 (A180). 611 INDEX. NEGOTIABLE INSTRUMENTS LAW, THE — Continued, acceptance of bills drawn in sets, A313 (A18I). payment by acceptor of bills drawn in sets, A314 (A182). effect of discharging one of a set, A315 (A183). Promissory Notes and Checks, promissory note defined, A320 (A184). check defined, A321 (A185). within what time a check must be presented, A322 (A186). certification of check; effect of, A323 (A187). effect where holder of check procures it to be certified, A324 CA188). when check operates as an assignment, A325 (A189). Notes Given for Patent Rights and for a Speculative Con- sideration, negotiable instruments given for patent rights, A330. negotiable instruments given for a speculative consideration, A331. how negotiable bonds are made non-negotiable, A332. NEGOTIATION, what constitutes, AGO. See Bona Fide Holder, Negotiability, Transfer of Bills and Notes, Indorsement. NON COMPOS MENTIS. See Lunatics. NON-NEGOTIABLE INSTRUMENTS, do not import consideration, 50. transfer of, 74. effect of indorsement of, 83. need not be presented for payment on day of maturity to hold in- dorsers and drawers, 114 (323). days of grace not allowed in, 120. notice of dishonor is not required in cases of, 130. NOTARY PUBLIC, must make protest, 124. NOTE, PROMISSORY. See Promissory Notes. NOTES AND BILLS. See Bills and Notes. NOTICE, when fraud is inferred from inadequacy of price on theory of con- structive, 103. actual and constructive, of defenses, 111. by lis pendens, 112. of dishonor, when certificate of protest is, 129. NOTICE OF DISHONOR, necessity of notice, 130, IGO (444), A163, A188. who may give the notice, 131, AlCl, A162, A163, A164, A165. 612 INDEX. NOTICE OF DISHONOR — Continued. to whom notice should be given, 132, A160, A168, A169, A170, A171 A172, ' the time allowed for giving notice, 133, A173, A174, A175, A178> A179. manner of giving notice, when important, 134. manner of giving notice where parties to be notified reside in the same place, 135, A174. personal notice, how and when served, 136. manner of serving notice on persons residing elsewhere, 137, A175. what is meant by " residing in the same place, " 138, A174. form and requisites of the notice of dishonor, 139 (372), (404), A166, A167, A176. allegation and proof of notice, 140 (372). waiver of, 147 (404), A180, A181-A186. when notice necessary to hold guarantor, 100 (444). in the case of checljs, 171-174. See Checks. See Excuses fou Failure of Presentment, Protest and Notice. NOTING DISHONOR, 127. OBLIGATION TO PAY, must be distinct, 18. OFFICERS. See Agents, Private Corporations, Municipal Corpo- rations, Governments. ORDER, bills and notes payable to, 17, A27. transfer of, 75. OVERDUE PAPER, transfer of, as affecting bona, fide ownership, 107. when bills and notes payable on demand or at .«ight are, 108. transfer after default in payment of installment of principal and interest, 109. transfer on last day of grace, or on day of maturity, HO. PAROL EVIDENCE, in proof of date, 7, 8, (;4. in identifying parties or explaining signatures, 9, 13, 14. in proof of real character of concealed sureties, 12, 161. in proving amount of payment, 21, 22. in proving actual day of delivery, 26. in proof of collateral agreements, 31. as to consideration, 62, 53, 64. in proof of date of acceptance, 64. as to fact of acceptance, 66. of agreement to accept, 69. 613 INDEX. PAROL EVIDENCE — Continued. to prove time and place of indorsement, 91. to prove real character of irregular iudorsers, 92. of ownership of bills and notes, 116. as a substitute for certificate of protest, 123. of vpaiver of presentment, protest and notice, 147t of time of alteration, 152. PARTIES TO BILLS AND, NOTES, dravFer or maker, 9-12, AUO, Alll. drawee, 13. payee, 14. fictitious or non-existing, 15. same persons as different, 16. infants, 33, A41. lunatics, 34. drunkards and spendthrifts, 35. married women, 36 Cp. 107). the bankrupt or insolvent payee, 37. alien enemies, 38. bill or note executed by agent, 39, A38, A40, form of signature by agent, 40, A40, A39, A74. partners, 41 (pp. 107, 112). form of the firm's signature, 42. private corporations, 43 (p. 115), A41. form of signature by agents of corporations, 44 (pp.115, 122,125,127), A72, A74. commercial paper of corporations under seal, 45. drafts or warrants of one officer of the corporation on another, 46. governments, 47. municipal or public corporations, 48. fiduciary parties and personal representatives, 49 (p. 137), 59, A74. PARTNERS, as parties, 41 (pp. 107, 112). form of signature, 42. presentment for acceptance to, 59. who may accept, 63. presentment for payment by and to, 116, 117. as drawer or maker, 11. as drawee, 13. notice to one partner, 111, 132, A170. presentment to, 117, A137. PARTNERSHIP. See Partners. PAY, as an expression of obligation not necessary to negotiability, 18. PAYMENT, time of, must be certain, 19, 20. must be unconditional, 20. 614 INDEX. PAYMENT — Continued. amount of, must be certain, 21. in money only, 22. place of, 23, 114, 118. on acceptance supra protest, 71, A300-A306. liability of assignors of paper payable to bearer, 76. presentment for. See Presentment for Payment. through clearing house (481), (508). distinguished from sale or transfer, 178 (513), A200. by whom, 179, A202. to whom, 180, A90. conditions of — legal tender — surrender of paper — receipt, 181 (513), A148, A134. by bill or note — presumption as to its absolute or conditional char- acter, 182 (505). by check, 183 (508), (481). PERSONAL REPRESENTATIVES, as parties, 40. presentment for acceptance to, 59. presentment for payment by, 115. presentment for payment to, 117. notice of dishonor given by, 131. notice of dishonor given to, 132 (379), A. 189. PERSONS, defined, A2. primarily liable, A3, secondarily liable, A3. PESTILENCE, as an excuse for failure of presentment, protest and notice, 141 (394). PLACE OF ACCEPTANCE, (JO. PLACE OF BUSINESS, presentment for acceptance at, 60. presentment for payment at, 118. PLACE OF INDORSEMENT, 91. PLACE OF NOTICE OF DISHONOR, 133, 135, 136. PLACE OF PAYMENT, 23, 118 (319) (332). presumption as to, where none is stated, 23, 118. as afftcting rights of acceptor or maimer on failure to present for payment, 114. as affecting question of presentment for payment while there are two or more payors, 117. PLACE OF PROTEST, 125. PLEDGEE, may enforce accommodation paper, 64. when a bona fide holder, 56 (295). CA5 INDEX. POLITICAL DISTURBANCES, as an excuse for failure of presentment, protest and notice, 141. POSSESSION OF SECURITY, as an excuse for failure of presentment, protest and notice, 146. POST-DATING, of bills and notes, 8, 26, A31. > POWER OF ATTORNEY, signature by procuration, A40. See Agent. PRIMARY LIABILITY, 57 (188), A3. PRINCIPAL. See Agent. PRESENTMENT FOR ACCEPTANCE. See Acceptance. PRESENTMENT FOR PAYMENT, supra protest, 71, A300-A306. not necessary in case of non-negotiable instrument, 114 (323). for what purpose, and to wliom is presentment for payment neces- sary, 114, A130, A144, A200, A201. by whom must presentment be made, 115, 126, A90, A132. possession as evidence of right to present for payment, 116. to whom should preHentment be made, 117, A136, A137, A138, A132. the place of presentment, 118 (319), (331), (332), A133, A135. the time of presentment — days of grace, 119 (324), A131, A146, A146. computation of time — legal holidays, 120 (324), A5. the hour of the day for presentment, 121 (332), A132. mode of presentment, 122 (319), A132, A134. waiver of, 147 (404). when demand necessary to hold guarantor, 160 (444). of checks, 171-174 (478), (491). See Checks. See Excuses for Failure op Presentment, Protest and Notice. PRIVATE CORPORATIONS, as parties, 43 (p. 115). form of signature, 44 (pp. 115, 122, 125, 127). commercial paper of, under seal, 45. drafts or warrants of officers of, 46. presentment for payment to, 117. indorsement by, A41. PROCESS, transfer by legal, 81. PROCURATION, signature by, A40. PROMISSORY NOTE, defined. 6. form of, 7. when ambiguous, 7. when void, presentment, protest and notice excused, 143. 616 INDEX. PROOF, burden of, as to bona fide ownership, 113. of ownership from possession, 116. PROTEST, for non-acceptance, 58, 59, 60, 64, 71, A265. acceptance swpra, 71. time for presentment for purposes of (345), A263, A266. the object and necessity of protest, 123 (354), AI89, A260, A267. by whom protest should be made, 124 (345), A262. place of protest, 125, A2G4. by whom should presentment be made in preparation for protest, 126. noting dishonor and extending protest, 127, A261, A263. contents of certificate of protest — proper time for the same, 128 (345), (354), A261. protest, evidence of what — when evidence of notice, 129 (354). waiver of, 147 (404), A182, A2G7. of checks, 171-174. See Ciikcks. See Excuses for Failure of Presentment, Protest and Notice. PUBLIC CORPORATIONS. See Municipal Corporations. REASONABLE HOUR. for presentment for acceptance, 60. for presentment for payment. 121, (332). what is, A4. REASONABLE TIME, what is, in determining time of acceptance, 60 (184), A4. in determining when paper payable on demand or at sight is over- due, 108, A4. RECEIPT, demand of, as condition of payment, 181. RENEWAL, agreements for, 32. RESIDENCE, when presentment for acceptance may be made at, 60. presentment for payment at, 118. sending notice of dishonor to, 135, 136, 137, 138. RESTRICTIVE INDORSEMENT, 90 (239). REVOCATION, of acceptance, 65 (192). when complicated by fraud (192). RIOTS, as an excuse for failure of presentment, protest and notice, 141 (394). G17 INDEX. SEAL, when does it destroy negotiability, 25 (p. 62). ol private corporation, 45. SECONDARY LIABILITY, 57 (188), 84, A3. SECURITIES, possession of, as an excuse for failure of presentment, protest and notice, 146. surrender of, effect on liability of sureties and guarantors, 162 (453). SICKNESS, as excuse for failure of presentment, protest and notice, 145. SIGHT, AT OR AFTER, in stipulation of time of payment, 19. bills payable at sight or given time after, when presentment for acceptance must be made, 58 (184). when paper payable at sight is overdue, 108. SIGNATURE, of drawer or maker, 9. what is a sufficient (111. Cas., p. 52). when required in acceptance, G7. See Bills and Notes. SOCIAL DISTURBANCES, as an excuse for failure of presentment, protest and notice, 141 (394). SPENDTHRIFTS, as parties to bills and notes, 35. SPOLIATION, 150. See Forgery. STATUTE OF FRAUDS, applies to acceptances, 66. SUBSCRIPTION, of owner or maker, 9. See Bills and Notes. SUNDAY, 9, 120. SUPRA PROTEST, acceptance, 71. what, admits, 72. SURETIES AND GUARANTORS, THE RIGHTS AND LIABILITIES OF, sureties and guarantors distinguished, 157. form and requisites of a guaranty, 158 (436). guaranty as appurtenant to a bill or note, 159. demand of principal debtor and notice of default, when necessary, 160 (444). concealed sureties as accommodation parties — nature of their lia- bility — admissibility of parol evidence to prove real character, 161, 128. 618 INDEX. SURETIES AND GUARANTORS, THE RIGHTS AND LIABILITIES OF — Continued. what will discharge guarantors and sureties — surrender of securi- ties and extension of time of payment, 162, (440), (442), (444), (453). remedies of surety and guarantor — contribution between co-suretiesi 163. liability of surety on note, where agreement to procure other sureties was violated (440). SURETY, supported by what consideration, 63. SURRENDER OF BILL OR NOTE, a condition to payment, 181. SURRENDER OF SECURITIES, effect on liability of sureties and guarantors, 162 (453). TELEGRAPH, serving notice of dishonor by, 137. TELEPHONE, serving notice of dishonor by, 136, 137. TIME OF ACCEPTANCE, 60 (184). TIME OF GIVING NOTICE OF DISHONOR, 133. TIME OF INDORSEMENT, 91. TIME OF PAYMENT, must be certain, 19. extension of, effect on liability of drawer, 114. effect on indorsers, 84, 114. effect on sureties and guarantors, 162 (442). TIME OF PRESENTMENT FOR PAYMENT, 119, 120, 121 (324). TRANSFER OF BILLS, NOTES AND CHECKS BY DELIVERY, the assignability of choses in action \a general — non-negotiable paper, 74. transfer of negotiable bills ami notes payable to bearer, 75. liability of assignors of bills and notes payable to bearer, 76, A115. liability of broker in transfer of paper hy delivery, 77, Al 19. transfer by delivery of paper payable to order, 78, 106, A79. sale of bill or note without delivery, 79. implied transfer of bills and notes, 80. transfer by legal process — attachment, garnishment, execution, 81, 106. transfer donatio mortis cauga, 82, 106. when transfer Is made in the usual course of business, 106. checks, 169. distinguished from payment, 178 (513). See Indorskmk.vt, for TRANsKKit nv Indorskmbnt. 619 INDEX. TRANSFER BY INDORSEMENT, 83-92. See Indorsement. TRUST, indorsement in, 90. TRUSTEES, as parties, 49. as indorsees, 90. ULTRA VIRES, as affecting liability of private corporations to bona fide holders, 43. as affecting rights of bona fide holders of municipal obligations, 48. UNCERTAINTY, as to drawer or maker, 9, II, 12. drawee, 13. payee, 14. where same persons are different parties, 16. as to obligation to pay, 18, 20. time of payment, 19. amount of payment, 21. kind of money or currency, 22. USUAL COURSE OF BUSINESS, as affecting bona fide ownership, 106 (285). USURY, when inadequacy of price constitutes, 104. VALIDITY OF BILLS AND NOTES, as affected by post-dating and ante-dating, 8, 26. as affected by want of drawer or maker, 9. of drawee", 13. of payee, 14. VALUE, defined, A2. bona fide holder must be a holder for, 102. when inadequacy of price constructive notice of fraud, 103. when inadequacy of price violates usury laws, 104. when inadequacy determines amount of recovery by bona fide holder, 105. VALUE RECEIVED, sufficient acknowledgment of consideration, when required, 24. VOID NOTE, presentment, protest and notice excused in case of, 143. WAIVER, of presentment for acceptance, 62, 147 (404). presentment, protest and notice, 147 (404). 620 INDEX. WAR, as an excuse for failure of presentment, protest and notice, 141 (394). WARRANTIES, of assignors of paper payable to bearer, 76. WARRANTS, of officers of private corporations, 46. of officers of municipal or public corporations, 48. WIFE. See Married Women. WITHOUT RECOURSE, indorsement, 85 (231) WORDS OF NEGOTIABILITY, 17. in a due bill, 18. WRITING, when acceptances must be in, 66. 621 ■~7 LAW LIBRART IJNIVERSITy OF CALIPORWU LOS ANGELES llBKirS '^^^'°^'^^ ^'^'^^'^^ ^*'^'^'^ AA 000 847 864 6